What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-03-27 compared with 2024-03-27 · 346 added, 257 removed, 747 unchanged (45% of the section changed)

46 unchanged sentences

13,816 88,213

Prepaid expenses and other assets

Accounts receivable, prepaid expenses, and other assets

Cost of construction

6 unchanged sentences

14,732 11,829

Lease intangible assets, net

$ 556,556 $ 402,199

Liabilities and equity

3 unchanged sentences

152,797 69,437

Bonds payable, net of debt issuance costs and premiums

Bonds payable, net of unamortized debt issuance costs and premiums

162,621 162,420

1 unchanged sentence

Warrants liability

46,130 12,045

Total liabilities

16 unchanged sentences

( 64,592 ) ( 19,361 )

Accumulated other comprehensive income (loss)

Accumulated other comprehensive income

Total Sky Harbour Group Corporation stockholders’ equity

12 unchanged sentences

Rental revenue

$ 12,700 $ 7,137

Total revenue

Loss on impairment of long-lived assets

General and administrative

Campus operating expenses

Fuel expenses

Ground lease expenses

Depreciation and amortization

Pursuit and marketing expenses

Employee compensation and benefits

13,882 10,310

General and administrative expenses

Total expenses

35,175 24,568

Operating loss

( 20,414 ) ( 16,993 )

Other (income) expense:

1 unchanged sentence

Other (income) expense

Unrealized loss (gain) on warrants

( 1,961 ) ( 737 )

Unrealized loss on warrants

Total other (income) expense

$ ( 53,683 ) $ ( 25,441 )

Net loss attributable to non-controlling interests

( 8,452 ) ( 9,264 )

Net loss attributable to Sky Harbour Group Corporation shareholders

$ ( 45,231 ) $ ( 16,177 )

Loss per share

$ ( 1.76 ) $ ( 0.98 )

Weighted average shares

25,742 16,456

See accompanying Notes to Consolidated Financial Statements

4 unchanged sentences

December 31, 2023

Other comprehensive loss, before related income taxes:

Unrealized gains (losses) on available-for-sale securities

$ ( 53,683 ) $ ( 25,441 )

Unrealized gains on available-for-sale securities

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

( 815 ) ( 270 )

Total other comprehensive loss

$ ( 53,942 ) $ ( 25,027 )

See accompanying Notes to Consolidated Financial Statements

2 unchanged sentences

(in thousands, except share data)

Redeemable Sky Series B

Accumulated Other

Preferred Units

Comprehensive

1 unchanged sentence

Balance at December 31, 2022

Sky incentive compensation prior to recapitalization

Net income (loss) prior to recapitalization

Yellowstone Transaction and recapitalization, See Note 3

14,962,831 $ 1 42,192,250 $ 4 $ 29,560 $ ( 3,184 ) $ ( 102 ) 26,279 $ 72,096 98,375

Share-based compensation

Sky incentive compensation following recapitalization

Issuance of initial commitment shares

- - - - 1,816 - - 1,816 443 2,259

Vesting of restricted stock units

228,312 - - - - - - - - -

Shares withheld for payment of employee taxes

( 65,585 ) - - - ( 377 ) - - ( 377 ) - ( 377 )

Exchange of Class B Common Stock

145,894 - ( 145,894 ) - 184 - - 184 ( 184 ) -

Issuance of PIPE Shares, net of equity issuance costs

8,893,846 1 - - 57,012 - - 57,013 - 57,013

Exercise of warrants

225 - - - 3 - - 3 - 3

Other comprehensive income (loss)

Net income (loss) following recapitalization

- - - - - - 414 414 - 414

- - - - - ( 16,177 ) - ( 16,177 ) ( 9,264 ) ( 25,441 )

Balance at December 31, 2023

24,165,523 2 42,046,356 4 88,198 ( 19,361 ) 312 69,155 63,091 132,246

Share-based compensation

- - - - 3,737 - - 3,737 181 3,918

Vesting of restricted stock units

406,661 - - - - - - - - -

Shares withheld for payment of employee taxes

Exchange of Class B Common Stock

( 120,886 ) - - - ( 1,443 ) - - ( 1,443 ) - ( 1,443 )

Exchange of Sky Incentive Units

751,485 - - - 280 - - 280 ( 280 ) -

Issuance of strock through ATM Facility, net of equity issuance costs

79,676 - - - 1,071 - - 1,071 - 1,071

Issuance of PIPE Shares, net of equity issuance costs

7,911,580 1 - - 74,572 - - 74,573 - 74,573

Exercise of warrants

262,188 - - - 3,445 - - 3,445 - 3,445

Assumption of Overflow NCI partnership interests

- - - - ( 1,226 ) - - ( 1,226 ) 1,176 ( 50 )

Other comprehensive income (loss)

- - - - - - ( 259 ) ( 259 ) - ( 259 )

- - - - - ( 45,231 ) - ( 45,231 ) ( 8,452 ) ( 53,683 )

Balance at December 31, 2024

33,456,227 $ 3 42,046,356 $ 4 $ 168,634 $ ( 64,592 ) $ 53 $ 104,102 $ 55,716 $ 159,818

See accompanying Notes to Consolidated Financial Statements

5 unchanged sentences

Cash flows from operating activities:

$ ( 53,683 ) $ ( 25,441 )

Adjustments to reconcile net loss to net cash used in operating activities:

1 unchanged sentence

Straight-line rent adjustments, net

( 109 ) ( 239 )

Equity-based compensation

Loss on impairment of long-lived assets

Non-cash operating lease expense

Unrealized loss (gain) on warrants

Loss on disposition assets, net

Realized gain on available for sale investments

Changes in operating assets and liabilities:

Prepaid expenses and other assets

Accounts receivable, prepaid expenses, and other assets

( 1,108 ) ( 440 )

Right-of-use asset initial direct costs

( 17 ) ( 26 )

Accounts payable, accrued expenses, and other liabilities

Net cash used in operating activities

( 9,095 ) ( 7,735 )

Cash flows from investing activities:

Purchases of long-lived assets

( 2,262 ) ( 767 )

Payments for cost of construction

( 76,287 ) ( 55,373 )

Proceeds from disposition of long-lived assets

Investment in notes receivable, net

Net cash provided by acquisition of business

( 1,000 ) ( 2,040 )

Net cash (used in) provided by acquisition of business

( 31,683 ) 1,793

Purchases of available for sale investments

( 244,687 ) ( 54,481 )

Purchases of held-to-maturity investments

- ( 171,991 )

Proceeds from available for sale investments

237,614 68,194

Proceeds from held-to-maturity investments

74,387 198,397

Net cash used in investing activities

( 43,907 ) ( 16,268 )

Cash flows from financing activities:

Proceeds from issuance of PIPE Shares

75,160 57,312

Proceeds from issuance of PIPE Warrants

Proceeds from Yellowstone trust

Proceeds from exercise of warrants

Proceeds from ATM facility

Payments for equity issuance costs

Refund of debt issuance costs

( 955 ) ( 800 )

Payments of loans payable

( 1,776 ) ( 1,762 )

Payments of employee taxes related to vested equity awards

( 1,443 ) ( 377 )

Net cash provided by financing activities

75,095 54,873

Net (decrease) increase in cash and restricted cash

22,093 30,870

Cash and restricted cash, beginning of year

72,266 41,396

Cash and restricted cash, end of year

$ 94,359 $ 72,266

See accompanying Notes to Consolidated Financial Statements

6 unchanged sentences

Sky Harbour Group Corporation and its consolidated subsidiaries are collectively referred to as the “Company.”

On January 25, 2022 ( the “Closing Date”), our predecessor, YAC, a special purpose acquisition company incorporated in Delaware on August 25, 2020, consummated the Yellowstone Transaction contemplated by the Equity Purchase Agreement, dated as of August 1, 2021 ( the “Equity Purchase Agreement”), with Sky, a Delaware limited liability company.

As a result of the closing of the Yellowstone Transaction, and collectively with the other transaction described in the Equity Purchase Agreement, the Company was reorganized 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 “Common Units”).

As of the Closing Date, SHG owned approximately 26.1 % of the common units of Sky (the “Sky Common Units”), and the prior holders of Sky’s Existing Common Units (the “LLC Interests”) owned approximately 73.9 % of the Sky Common Units and control the Company through their ownership of the Class B Common Stock, $ 0.0001 par value (“Class B Common Stock”) of the Company.

As of December 31, 2023 , the Company and the LLC Interests owned approximately 36.5 % and 63.5 % of Sky Common Units, respectively.

See Notes 2 and 3 for additional discussion related to the Yellowstone Transaction.

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 December 31, 2024, SHG owned approximately 44.3 % of the Sky Common Units, and the prior holders of Sky’s Existing Common Units (the “LLC Interests”) owned approximately 55.7 % of the Sky Common Units and control the Company through their ownership of the Class B Common Stock, $ 0.0001 par value (“Class B Common Stock”) of the Company.

Basis of Presentation and Significant Accounting Policies

4 unchanged sentences

Certain historical amounts have been reclassified to conform to the current year’s presentation.

Notwithstanding the legal form of the Yellowstone Transaction pursuant to the terms therein, the Yellowstone Transaction was accounted for as a reverse recapitalization in accordance with GAAP (the “Reverse Recapitalization”).

Under this method of accounting, YAC was treated as the acquired company for financial reporting purposes, and Sky was treated as the accounting acquirer.

In accordance with this accounting method, the Yellowstone Transaction was treated as the equivalent of Sky issuing stock for the net assets of YAC, accompanied by a recapitalization.

Sky was deemed the accounting acquirer for purposes of the Yellowstone Transaction based on an evaluation of the following facts and circumstances:

• The LLC Interests, through their ownership of the Class B Common Stock, hold a majority voting interest in the Company;

• The LLC Interests have the ability to nominate and elect the majority of the Company’s Board of Directors;

• Sky’s senior management team comprises the senior management of the Company;

• Sky’s assets were larger in relative size compared to YAC’s assets prior to the Yellowstone Transaction.

Thus, the financial statements included in this Report reflect (i) the historical operating results of Sky prior to the Yellowstone Transaction;

(ii) the combined results of Sky and SHG from the date of the Yellowstone Transaction;

and (iii) the net assets of SHG (formerly YAC) were stated at historical cost, with no goodwill or other intangible assets recorded.

Amounts previously presented as operating expenses are now separately disclosed as campus operating expenses, fuel expenses, and ground lease expenses within the consolidated statement of operations.

Amounts previously presented as general and administrative expenses are now separately disclosed as pursuit and marketing expenses, compensation and benefits, and general and administrative expenses within the consolidated statement of operations.

These reclassifications had no effect on total expenses, net loss, net loss per common share and had no impact on the Company’s consolidated balance sheets, statement of stockholders’ equity and statement of cash flows for the prior year period.

Use of Estimates

19 unchanged sentences

The Company monitors the relative credit standing of financial institutions with whom the Company transacts and limits the amount of credit exposure with any one entity.

The Company classifies all highly liquid investments, with the exception of U.S.

Treasury securities, purchased with an original maturity of three months or less as cash or restricted cash.

Pursuant to the Company’s bond offering described in Note 9 — Bonds Payable, Loans Payable, and Interest , various restricted trust bank accounts were established at a major financial institution.

6 unchanged sentences

Additionally, the Company assesses whether it has plans to sell the security or it is more likely than not it will be required to sell any available-for-sale securities before recovery of its amortized cost basis.

Realized gains and losses and declines in fair value judged to be other than temporary, if any, on available-for-sale securities are included in other (income) expenses.

Interest income is recognized when earned as a component of other (income) expense.

For available-for-sale securities sold prior to maturity, realized gains and losses and declines in fair value judged to be other than temporary, if any, are included in other (income) expenses.

For available-for-sale securities held to maturity, the Company recognizes purchases of, and proceeds from, available-for-sale securities are reported on a gross basis in the cash flows from investing activities section of the consolidated statement of cash flows.

The costs of investments sold is based on the specific-identification method.

17 unchanged sentences

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.

The Company allocates a portion of its internal salaries to both capitalized cost of construction and to compensation and benefits 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 project is completed.

7 unchanged sentences

Depreciation is recognized on a straight-line basis over 3 to 20 years, based on the estimated useful life of the assets.

Lease intangible assets

Lease intangible assets on the consolidated balance sheets consists of acquired in-place lease and above-market lease intangible assets.

Lease intangible assets are carried at cost less accumulated amortization.

Amortization is recognized on a straight-line basis over the acquired leases' respective remaining term.

Impairment of long-lived assets

The Company’s assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

The Company’s long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Impairment analyses are based on, in part, the Company’s current plans, intended holding periods and available market information at the time the analyses are prepared.

19 unchanged sentences

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 17 — Commitments and Contingencies.

Warrants liability

The Company accounts for the warrants assumed in the Yellowstone Transaction and the warrants sold and issued in connection with the Private Placement Purchase Agreement (as defined in Note 12 — Equity and Redeemable Equity ) 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.

The Company accounts for the warrants assumed in the Yellowstone Transaction and the warrants sold and issued in connection with the 2023 Purchase Agreement (as defined in Note 11 — Equity ) 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.

11 unchanged sentences

Accordingly, fair value estimates may be different than the amounts that may ultimately be realized upon sale or disposition of these assets or settlement of these liabilities.

Business Combinations

Business Combinations and Asset Acquisitions

The Company evaluates each acquisition transaction to determine whether the acquired asset meets the definition of a business and therefore should be accounted for as a business combination, or if the transaction should be accounted for as an asset acquisition.

Under ASC Topic 805, Business Combinations , an acquisition does not qualify as a business when substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets.

If the Company determines that the screen test is met, the transaction is accounted for as an asset acquisition.

If the screen test is not met, the Company further considers whether the acquisition includes, at a minimum, inputs and processes that have the ability to create outputs in the form of revenue.

If the assets acquired meet this criteria, the transaction is accounted for as a business combination.

The Company accounts for acquisitions that qualify as asset acquisitions utilizing a cost accumulation model whereby the purchase price of the acquisition is allocated to the assets acquired on a relative fair value basis on the date of acquisition.

Inputs used to determine such fair values are primarily based upon internally developed models, publicly-available information, a risk-adjusted discount rate and/or publicly-available data regarding transactions consummated by other market participants, as applicable.

The Company accounts for business combinations using the acquisition method of accounting under ASC Topic 805, Business Combinations , whereby the total purchase price is allocated to tangible and intangible assets acquired and liabilities assumed based on respective estimated fair values.

1 unchanged sentence

The excess of the acquisition price over those estimated fair values, if any, is recorded as goodwill.

Transaction-related expenses and restructuring costs, if any, are expensed as incurred.

Transaction-related costs related to asset acquisitions are capitalized as part of the cost basis of the acquired assets.

Transaction-related expenses and restructuring costs that are deemed to be part of an acquisition of a business are expensed as incurred.

Revenue recognition

12 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 years ended December 31, 2023 and December 31, 2022, rental revenue includes $ 1,565 and $ 156 of variable lease payments, respectively.

Variable lease revenue recognized during the year ended December 31, 2023 included a negotiated lease termination fee received from a tenant of two hangars at OPF whereby the Company agreed to release the tenant from its lease obligations in exchange for approximately 8.5 months of additional rent.

As of December 31, 2023 and December 31, 2022, the deferred rent receivable included in prepaid expenses and other assets was $ 367 and $ 83 , respectively.

For the year ended December 31, 2024, rental revenue and fuel revenue includes $ 887 and $ 1,876 of variable lease payments, respectively.

For the year ended December 31, 2023, rental revenue and fuel revenue includes $ 1,127 and $ 438 of variable lease payments, respectively.

As of December 31, 2024 and December 31, 2023, the deferred rent receivable included in accounts receivable, prepaid expenses, and other assets was $ 594 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 in the consolidated balance sheet.

Rent received in advance consisted of $ 390 and $ 241 as of December 31, 2024 and December 31, 2023, respectively.

For the year ended December 31, 2023 and 2022 , the Company derived 30 % and 78 % of its revenue from two tenants, respectively.

At certain of the Company's hangar campuses, the Company recognizes 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.

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 year ended December 31, 2024 the Company did not derive 10% of its revenue from any single tenant.

For the year ended December 31, 2023 , the Company derived 30 % of its revenue from two tenants.

Advertising Costs

The Company expenses the cost of advertising and marketing as incurred.

Advertising and marketing costs recognized as general and administrative expenses totaled $ 279 for the year ended December 31, 2023 , and $ 340 for the year ended December 31, 2022 .

Advertising and marketing costs recognized as pursuit and marketing expenses totaled $ 431 for the year ended December 31, 2024 , and $ 279 for the year ended December 31, 2023 .

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.

Amounts payable under the Tax Receivable Agreement, as defined in Note 3 — Yellowstone Transaction , are accrued by a charge to income when it is probable that a liability has been incurred and the amount is estimable.

Amounts payable under the Tax Receivable Agreement, as defined in Note 14 — Income Taxes , are accrued by a charge to income when it is probable that a liability has been incurred and the amount is estimable.

Recently Adopted Accounting Pronouncements

Credit Losses (Topic 326 )

In June 2016, the FASB issued ASU No.

2016 - 13, Financial Instruments - Credit Losses (Topic 326 ):

Measurement of Credit Losses on Financial Instruments (“ASU 2016 - 13” ).

Subsequent to the issuance of ASU 2016 - 13, the FASB clarified the guidance through several ASUs.

The collective new guidance (ASC 326 ) generally requires that credit losses be reported using an expected losses model rather than the incurred losses model that is currently used and establishes additional disclosures related to credit risks.

The Company adopted this guidance using the modified retrospective method in the first quarter of fiscal year 2023.

The adoption did not have a material impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements

Segment Reporting (Topic 280 )

4 unchanged sentences

2023 - 07 are required for all public entities, including entities with a single reportable segment.

2023 - 07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and early adoption is permitted.

The guidance is required to be applied on a retrospective basis.

We are currently evaluating the impact of the standard on our consolidated financial statement disclosures.

2023 - 07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company adopted the guidance retrospectively beginning with its consolidated financial statements for the year ended December 31, 2024.

The adoption of ASU No.

2023 - 07 did not have a material effect on the Company's consolidated financial statements, except for the related disclosures.

Recently Issued Accounting Pronouncements

Income Taxes (Topic 740 )

8 unchanged sentences

The Company is currently evaluating the impact of this updated standard on its disclosures to the consolidated financial statements.

Yellowstone Transaction

As contemplated by the Equity Purchase Agreement, on the Closing Date, the following occurred:

• YAC changed its name to Sky Harbour Group Corporation.

• All outstanding shares of stock held by the Sponsor were converted into shares of Class A Common Stock of the Company.

• Sky restructured its capitalization and issued to the Company 14,937,581 Sky Common Units, which was equal to the number of outstanding shares of Class A Common Stock immediately after giving effect to the Equity Purchase Agreement.

The number of outstanding shares after the Equity Purchase Agreement reflected the redemption of Class A Common Stock (by former holders of the special purpose acquisition company shares that elected to redeem such shares) and the Class A Common Stock issued as a result of the BOC PIPE investment (the “BOC PIPE”), the reclassification of the existing Sky Common Units (other than the Sky Incentive Units), existing Sky Series A preferred units (the “Series A Preferred Units”) and Series B preferred units (the “Series B Preferred Units”) into Sky Common Units.

• Certain adjustments were affected to the number of Sky Incentive Units to reflect the new capital structure.

• SHG was appointed as the managing member of Sky under the Third Amended and Restated Operating Agreement (the “A&R Operating Agreement”).

• The Sky Common Units issued to the Sponsor in respect of Sky’s Series B Preferred Units were converted into 5,500,000 shares of Class A Common Stock of the Company.

• The LLC Interests received one share of Class B Common Stock for each Sky Common Unit that they held, and as consideration for the issuance of 14,937,581 Sky Common Units by Sky to the Company, YAC contributed to Sky the net amount held in the YAC trust account after deducting the amount required to fund the redemption of the Class A Common Stock held by eligible stockholders who properly elected to have their shares redeemed as of the Closing Date and the amount of various transaction costs.

• The YAC Warrants that were issued and outstanding immediately prior to the Closing Date became SHG Warrants.

The following table reconciles the elements of the Yellowstone Transaction to the consolidated statements of changes in equity for the year ended December 31, 2022:

Yellowstone Transaction

Cash - Yellowstone trust and cash, net of redemptions

Cash - BOC PIPE investment

transaction costs and advisory fees

Net proceeds from the Yellowstone Transaction

Conversion of Sky Series B preferred units to Class A Common Stock

Initial fair value of Warrants liability assumed on 1/25/2022

Net adjustment to total equity from the Yellowstone Transaction

The following table reconciles the number of shares of SHG Common Stock immediately following the consummation of the Yellowstone Transaction:

Number of shares

Yellowstone Common stock, outstanding prior to Yellowstone Transaction

redemption of Yellowstone Common Stock

( 12,061,041 )

Common stock of Yellowstone, net of redemptions

Shares held by Sponsor

Conversion of Sky Series B units to Class A Common Stock

Shares issued in BOC PIPE investment

Class A Common Stock outstanding after the Yellowstone Transaction

Class B Common Stock issued to LLC Interests

Total shares of common stock following the Yellowstone Transaction

Tax Receivable Agreement

On the Closing Date, in connection with the completion of the Yellowstone Transaction and as contemplated by the Equity Purchase Agreement, the Company, Sky, the LLC Interests, and the TRA Holder Representative, entered into a tax receivable agreement (the “Tax Receivable Agreement”).

Pursuant to the Tax Receivable Agreement, the Company will generally be required to pay the LLC Interests 85 % of the amount of savings, if any, in U.S.

federal, state, local, and foreign taxes that are based on, or measured with respect to, net income or profits, and any interest related thereto that the Company realizes, or is deemed to realize, as a result of certain tax attributes, including:

• existing tax basis in certain assets of Sky and certain of its direct or indirect subsidiaries, including assets that will eventually be subject to depreciation or amortization, once placed in service, attributable to Sky Common Units acquired by the Company from a TRA Holder, as determined at the time of the relevant acquisition;

• tax basis adjustments resulting from taxable exchanges of Sky Common Units (including any such adjustments resulting from certain payments made by the Company under the Tax Receivable Agreement) acquired by the Company from a TRA Holder pursuant to the terms of the A&R Operating Agreement;

• tax deductions in respect of portions of certain payments made under the Tax Receivable Agreement (each of the foregoing, collectively, the “Tax Attributes”).

As of December 31, 2023 , no transactions occurred that would result in a cash tax savings benefit that would trigger the recording of a liability under the terms of the Tax Receivable Agreement.

Rapidbuilt Acquisition

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.

Camarillo Acquisition

On December 6, 2024 ( the “CMA Closing Date”), the Company, through two wholly-owned subsidiaries of Sky, completed the acquisition of CloudNine at Camarillo LP (“CloudNine”), a California limited partnership, and Sky 805 LLC (“Sky 805” ), California limited liability company in exchange for approximately $ 32.1 million in aggregate cash consideration (collectively, the “Camarillo Acquisitions”).

As a result of the Camarillo Acquisitions, CMA CloudNine Holdings LLC, a Delaware limited liability company and wholly-owned subsidiary of Sky, owns a 100 % limited partnership interest in CloudNine, and CMA Sky 805 Holdings LLC, a Delaware limited liability company and wholly-owned subsidiary of Sky, is the sole member of Sky 805.

Substantially all of the cash consideration paid in connection with the Camarillo Acquisitions was utilized to satisfy the pre-existing senior and subordinated debt obligations of CloudNine and Sky 805, which were not legally assumed by the Company.

The Company did not issue or assume any other debt in connection with the Camarillo Acquisitions.

The Camarillo Acquisitions were accounted for as asset acquisitions, and the purchase price of the acquisitions was allocated to the assets acquired on a relative fair value basis on the date of acquisition.

The following table summarizes the allocation of the purchase price to the fair value of the assets acquired and liabilities assumed for the Camarillo Acquisitions:

December 6, 2024

Constructed assets, net 30,382

Operating lease right-of-use assets

Long-lived assets, net 4,241

Accounts payable, accrued expenses and other liabilities

Operating lease liabilities

Total liabilities

Total fair value of net assets acquired

CloudNine's principal asset is an approximately 120,000 square foot hangar and office complex at Camarillo Airport (“CMA”) in Camarillo, California, located in the greater Los Angeles metropolitan area.

Sky 805 is the holder of related ground leases (the “CMA Leases”) and fixed-based operator rights at CMA.

The Company assumed all of CloudNine's and Sky 805's obligations under the CMA Leases in connection with the Camarillo Acquisitions.

The CMA Leases pertain to four parcels covering approximately 17 acres of land at CMA and have remaining lease terms of 37 years, each with 10 -year options exercisable at the sole discretion of the Company.

Rapidbuilt Business Combination

On May 12, 2023 ( the “Option Exercise Date”), Sky exercised its option to acquire a 51 % equity interest in Overflow Ltd., a Texas limited partnership (“Overflow”), and its wholly-owned operating subsidiary, Rapidbuilt, Inc., a Texas corporation (“Rapidbuilt”), for nominal consideration (the “Rapidbuilt Acquisition”).

As a result of the Rapidbuilt Acquisition, Weatherford Steel Buildings Holdings LLC, a Delaware limited liability company and wholly-owned subsidiary of Sky (“WSBH”), owns a 50 % limited partnership interest in Overflow, and Weatherford Steel Buildings GP LLC, a Delaware limited liability company and wholly-owned subsidiary of Sky (“WSB GP”), owns a 1 % general partnership interest in Overflow.

As a result of the Rapidbuilt Acquisition, Weatherford Steel Buildings Holdings LLC, a Delaware limited liability company and wholly-owned subsidiary of Sky (“WSBH”), owned a 50 % limited partnership interest in Overflow, and Weatherford Steel Buildings GP LLC, a Delaware limited liability company and wholly-owned subsidiary of Sky (“WSB GP”), owned a 1 % general partnership interest in Overflow.

On December 31, 2024, the Company assumed the former majority shareholder's ownership interest in Overflow for no consideration.

As a result, WSBH and WSB GP own 100 % of the partnership interests in Overflow as of December 31, 2024.

Rapidbuilt is a manufacturer of pre-engineered steel buildings that previously entered into a supplier arrangement with Sky.

5 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 table summarizes the allocation of the purchase price to the fair value of the assets acquired and liabilities assumed for the Rapidbuilt Acquisition:

Restricted Cash

47 unchanged sentences

Bradley International Airport (“BDL”), Windsor Locks, CT (Hartford area);

Camarillo Airport (“CMA”), Camarillo, CA (Los Angeles area);

Centennial Airport (“APA”), Englewood, CO (Denver area);

3 unchanged sentences

Nashville International Airport (“BNA”), Nashville, TN;

Orlando Executive Airport (“ORL”), Orlando, FL;

Phoenix Deer Valley Airport (“DVT”), Phoenix, AZ;

Salt Lake City International Airport (“SLC”), Salt Lake City, UT;

San José Mineta International Airport (“SJC”), San Jose, CA;

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

Trenton-Mercer Airport (“TTN”), Ewing, NJ (New York and Philadelphia areas);

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

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

2 unchanged sentences

Constructed assets, net of accumulated depreciation:

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

BNA, CMA, OPF Phase I, SGR, and SJC Renovation

$ 115,151 $ 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, ADS Phase II, APA Phase I, BDL Phase I, DVT Phase I, OPF Phase II, ORL Phase I, and PWK Phase I

$ 144,900 $ 64,212

The BNA, OPF Phase I, and SGR projects are being depreciated over a weighted-average useful life of approximately 47.0 years.

The BNA, CMA, OPF Phase I, SGR, and SJC Renovation sites are being depreciated over a weighted-average useful life of approximately 46.2 years.

Depreciation expense for the year ended December 31, 2024 and 2023 totaled $ 1,899 and $ 1,737 , respectively.

Long-lived Assets

Long-lived Assets and Lease Intangible Assets

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

6 unchanged sentences

Purchase deposits and construction in progress

16,947 12,792

Accumulated depreciation

5 unchanged sentences

As of December 31, 2024 and December 31, 2023 , long-lived assets included approximately $ 2,380 and $ 362 , respectively, of purchase deposits towards long-lived assets which are not being depreciated as the assets have not been placed into service.

In June 2022, the Company evaluated the development progress related to its smart hangar app.

This evaluation included the decision to abandon previous software development efforts and the transition of development efforts to a new third -party development company.

In connection with this evaluation, the Company determined that previously capitalized software costs associated with the abandoned development were not recoverable and recognized an impairment loss of $ 248 during the year ended December 31, 2022.

Lease intangible assets, net, consists of the following:

December 31, 2024

December 31, 2023

Acquired in-place leases $ 1,878 $ -

Above market leases 1,151 -

Accumulated amortization

Total operating lease expense $ 3,005 $ -

Lease intangible assets are being amortized over a weighted-average use life of approximately 10.3 years.

Amortization expense for the year ended December 31, 2024 and 2023 totaled $ 24 and $ 0 , respectively.

Estimated amortization of the respective intangible lease assets as of December 31, 2024 for each of the five succeeding years and thereafter is as follows:

Year Ending December 31,

Acquired In-Place Leases

Above Market Leases

$ 1,862 $ 1,143

Supplemental Balance Sheet and Cash Flow Information

7 unchanged sentences

Professional Fees

Property Taxes

Tenant security deposits

$ 27,655 $ 16,740

13 unchanged sentences

$ 64,802 $ 16,870

Net decrease 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

839 ( 1,639 )

22 unchanged sentences

December 31, 2023

Operating expenses

$ 4,047 $ 3,735

Ground lease expenses $ 8,564 $ 3,889

Fuel expenses 270 158

General and administrative expenses

4 unchanged sentences

In addition to the Company’s ground leases, the Company has operating leases for office space and ground support vehicles, and finance leases for vehicles supporting operations at Rapidbuilt.

The Company’s ground lease at OPF was entered into in May 2019 through its wholly owned subsidiary, Sky Harbour Opa Locka Airport LLC (“SHOLA”), with AA Acquisitions LLC (“AA”).

AA is the master ground lessee of Miami Dade County (“MDC”), the ultimate landowner.

On April 29, 2022, the Company, through a wholly-owned subsidiary outside the Obligated Group (as defined in Note 10 — Bonds Payable, Loans Payable, and Interest ), purchased AA’s underlying interest in the ground lease for approximately $ 8.5 million and now leases the OPF property directly from MDC (the “OPF Lease Transaction”).

The OPF Lease Transaction also required the Company to pay approximately $ 1.0 million in assignment fees to MDC, which, along with the $ 8.5 million purchase price, were recognized as initial direct costs and presented as a component of right-of-use assets.

Following the OPF Lease Transaction, SHOLA continues to be obligated under the existing sublease but to an affiliate within the Company.

The OPF Lease Transaction extends the term of the lease at OPF for the Company to approximately 57 years.

The Company has accounted for the OPF Lease Transaction as a lease modification requiring remeasurement and remeasured the right-of-use asset and operating lease liability utilizing the Company’s incremental borrowing rate as of the date of remeasurement.

As a result of the remeasurement, non-cash subtractions to the right-of-use asset and operating lease liability of $ 12,289 were recorded during April 2022.

In January 2023, the Company executed a lease amendment with the Town of Addison, Texas, to add two additional parcels of land (the “ADS Expansion Parcels”) to the existing lease at ADS (the “ADS Lease”).

2 unchanged sentences

The ADS Lease and the ADS Expansion Parcels contain no additional extension options as the lease term is the maximum allowable term permitted by the Town of Addison.

In October 2023, the Company, through a wholly-owned subsidiary of the Company, entered into a ground lease agreement (the "PWK Lease") with PWK.

In October 2023, the Company, through a wholly-owned subsidiary of the Company, entered into a ground lease agreement with PWK (the “PWK Lease”).

The PWK Lease is divided into two parcels, with the first parcel containing approximately 15 acres of land (“PWK Phase I”).

13 unchanged sentences

The POU Lease covers two parcels containing approximately 7 acres of land at POU.

The initial term of the POU Lease will be 15 years from the date of completion of construction, with lease payments commencing upon the earlier of completion of construction or December 2025.

The POU Lease contains language permitting the Company to extend the POU Lease an additional 25 years at any point following the execution of the POU Lease, subject to Dutchess County legislative approval.

The Company intends to seek the 25 -year extension in the first half of 2024.

The POU Lease contains a customary due diligence period in which the Company holds the right to terminate the POU Lease within 270 days of its execution, as well as customary deadlines by which the Company must submit site design plans and commence construction.

The initial term of the POU Lease was 15 years from the date of completion of construction.

The POU Lease contained language permitting the Company to extend the POU Lease an additional 25 years at any point following the execution of the POU Lease, subject to Dutchess County legislative approval.

The POU Lease contains customary deadlines by which the Company must submit site design plans and commence construction.

In November 2024, the Company executed an amendment to the POU Lease (the “Amended POU Lease”).

The Amended POU Lease extended the term of such ground lease from 15 year to 40 years from the completion of construction, with lease payments commencing upon the earlier of completion of construction or June 2027.

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.

The property at SJC includes additional land on which the Company intends 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.

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.

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

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.

In August 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.

In December 2024, the Company, through a wholly-owned subsidiary of the Company, entered into a ground lease agreement (the “TTN Lease”) at Trenton-Mercer Airport (“TTN”) with the County of Mercer, New Jersey.

The TTN Lease covers approximately 10 acres of property at TTN.

The initial term of the TTN Lease will be 30 years from the earlier of certificate of occupancy or 36 months from the lease commencement date, as defined in the TTN Lease, with lease payments commencing contemporaneously with the term.

The TTN Lease contains an option exercisable by the Company to extend the TTN Lease for an additional 20 years following the expiration of such initial term.

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

3 unchanged sentences

Operating cash flows from operating leases

$ 1,971 $ 1,822

Operating cash flows from finance leases

5 unchanged sentences

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

5.08 % 4.62 %

Ground leases - Unimproved at commencement

Ground leases - Existing improvements

Equipment leases

Office Leases

All operating leases

Finance leases

10 unchanged sentences

Operating Leases

Total lease payments

Less rent concessions to be applied at Company’s discretion

Bonds payable, loans payable and interest

16 unchanged sentences

provided, however, that the failure to maintain this ratio will not be considered an event of default so long as the Obligated Group takes all commercially reasonable action for correcting such deficiency.

The measurement of the Debt Service Coverage Ratio will commence with the period ending December 31, 2024.

The measurement of the Debt Service Coverage Ratio commenced with the period ending December 31, 2024.

If the Debt Service Coverage Ratio as of the end of any fiscal quarter is less than 1.0, the parent companies of the Borrowers will make contributions to the borrowers or otherwise cause the Debt Service Coverage Ratio to be at least 1.0 within 10 business days of the test date.

If the Debt Service Coverage Ratio as of the end of any fiscal quarter is less than 1.25 , Sky Harbour Capital LLC must deliver to the trustees, within 120 days, an independent consultant’s report and a specific plan designed to achieve a Debt Service Coverage Ratio of 1.25 in the following fiscal year.

If the Debt Service Coverage Ratio as of the end of any fiscal quarter is less than 1.25 , Sky Harbour Capital LLC must deliver to the trustees an independent consultant’s report and a specific plan designed to achieve a Debt Service Coverage Ratio of 1.25 in the following fiscal year within 120 days.

The Company was in compliance with all debt covenants as of December 31, 2024.

The Series 2021 Bonds have principal amounts, interest rates, and maturity dates as follow:

30 unchanged sentences

$ 162,621 $ 162,420

In connection with the issuance of the Bonds Payable, the Company originally recognized debt issuance costs totaling $ 6 million which are being amortized into interest using the effective interest method over the life of the bonds.

Interest that is incurred at the stated interest rate of the bonds, as well as the amortization of bond premium and amortization of debt issuance costs are capitalized and added to the cost of construction on the consolidated balance sheet.

During the year ended December 31, 2022, the Company received a refund of approximately $ 1.2 million of debt issuance costs associated with the issuance of the Bonds Payable, and recognized the refund as a reduction of debt issuance costs.

Vista Loan and Guaranty Agreement

31 unchanged sentences

Interest expense

As part of Yellowstone’s initial public offering, Yellowstone issued to third -party investors 6,799,439 warrants which entitled the holder to purchase one share of Class A Common Stock at an exercise price of $ 11.50 per share (the “Public Warrants”).

SHG's legal predecessor, Yellowstone Acquisition Company (“YAC”) issued to third -party investors 6,799,439 warrants which entitled the holder to purchase one share of Class A Common Stock at an exercise price of $ 11.50 per share (the “Public Warrants”).

In addition, 7,719,779 private placement warrants were sold to the Sponsor.

Each Private Warrant allows the Sponsor to purchase one share of Class A Common Stock at an exercise price of $ 11.50 per share.

Following the Yellowstone Transaction, the Public Warrants and Private Warrants remain outstanding under the same terms and conditions to purchase shares of the Company’s Class A Common Stock.

The Public Warrants and Private Warrants remain outstanding under the same terms and conditions to purchase shares of the Company’s Class A Common Stock.

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 Private Placement Purchase Agreement, the Company issued to third -party investors 1,541,600 PIPE Warrants (together with the Public Warrants and the Private Warrants, the “Warrants”).

In connection with the 2023 Purchase Agreement (as defined in Note 11 — Equity) , 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 similar in form and substance to the Company’s Public Warrants.

3 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.

As of December 31, 2023 , 6,798,974 and 7,719,779 Public and Private Warrants remain outstanding, respectively.

As of December 31, 2023, the aggregate number of PIPE Warrants outstanding was 1,541,600 .

During the year ended December 31, 2024, 262,188 Warrants were exercised, resulting in approximately $ 3.0 million of proceeds.

During the year ended December 31, 2023, 225 Warrants were exercised, resulting in an immaterial amount of proceeds.

As of December 31, 2024 , 15,798,155 Warrants remain outstanding.

The closing price of the Warrants was $ 2.92 and $ 0.75 per warrant on December 31, 2024 and December 31, 2023, respectively.

The aggregate fair value of the Warrants was approximately $ 46.1 million and $ 12.0 million as of December 31, 2024 and December 31, 2023, respectively.

During the year ended December 31, 2023 , the Company recorded an unrealized loss of approximately $ 8.6 million.

During the year ended December 31, 2022, the Company recorded an unrealized gain of approximately $ 5.1 million.

Equity and Redeemable Equity

Prior to the Yellowstone Transaction

Sky and its members initially entered into a Limited Liability Company Agreement on February 12, 2018.

This LLC agreement was subsequently amended and restated on March 12, 2021 ( the “First A&R Operating Agreement”), which was again amended and restated on September 14, 2021 ( the “Second A&R Operating Agreement”).

On January 25, 2022, in connection with the Yellowstone Transaction, Sky, its members, and SHG entered into the A&R Operating Agreement.

On August 1, 2021, Sky entered into the Equity Purchase Agreement with Yellowstone.

In conjunction with the Equity Purchase Agreement, Boston Omaha Corporation agreed to invest $ 55.0 million of equity in the form of Redeemable Series B Preferred Units through its affiliate BOC YAC Funding LLC (“BOC YAC”).

On September 14, 2021, Sky issued 8,049 Series B Preferred Units to BOC YAC in exchange for the $ 55.0 million.

The Series B Preferred Units contained redemption rights for both Sky and for the holders of the Series B Preferred Units under certain circumstances.

Because the Series B Preferred Units were redeemable in cash, they were previously classified as Temporary Equity, between the Liabilities and Equity sections of the consolidated balance sheet.

They were carried at their net issuance price and not reflected at redemption value in the consolidated balance sheet because no Series B Preferred Units were redeemed between December 31, 2021 and January 25, 2022, the date such Units were automatically converted to the Company’s Class A Common Stock equal to the original $ 55.0 million investment at the conversion price of $ 10 per share.

Recapitalization

Prior to the Closing Date, there were 31,250 Series A Preferred Units, 8,049 Series B Preferred Units, and 27,035 Founder Units authorized, issued and outstanding.

As a result of the Reverse Recapitalization on the Closing Date, the Series A Preferred Units and Founder Units converted into 42,192,250 Sky Common Units and the LLC Interests received 42,192,250 shares of SHG’s Class B Common Stock.

The Series B Preferred Units converted to 5,500,000 shares of SHG’s Class A Common Stock, and Sky issued 14,937,581 Sky Common Units to SHG, which was equivalent to the total number of shares of the SHG’s Class A Common Stock outstanding on the Closing Date.

During the years ended December 31, 2024 and December 31, 2023, the Company recorded unrealized losses of approximately $ 34.5 million and $ 8.6 million associated with the change in fair value of the Warrants.

Common Equity

As of December 31, 2024 , there were 33,456,227 and 42,046,356 shares of Class A Common Stock and Class B Common Stock outstanding, respectively.

4 unchanged sentences

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.

Forward Purchase Agreement

On January 17, 2022, the Company entered into a forward purchase agreement (the “Forward Purchase Agreement”) with ACM ARRT VII E LLC (the “Counterparty”), pursuant to which the Counterparty had the right, but not the obligation, to purchase up to 7,000,000 shares of Class A Common Stock from shareholders who had redeemed shares, or indicated an interest in redeeming shares, prior to the closing of the Yellowstone Transaction.

The Counterparty purchased 664,909 such shares and, immediately following the Closing Date, pursuant to the agreement, the Company paid to the Counterparty a forward price of approximately $ 6.7 million.

The Counterparty also had the right to sell such shares to others during an 18 -month term, terminating the Company’s forward purchase obligations, and repaying to the Company a portion of the forward price, in amounts corresponding to the number of shares sold.

On March 7, 2022, the Counterparty notified the Company that it had sold the 664,909 shares covered by the agreement.

As a result, a total of approximately $ 6.7 million was remitted to the Company by the Counterparty.

Common Stock Purchase Agreement

On August 18, 2022, the Company entered into a Common Stock Purchase Agreement (the “Stock Purchase Agreement”) with B.

Riley Principal Capital II, LLC (“B.

Pursuant to the Stock Purchase Agreement, subject to the conditions and limitations set forth therein, the Company has the right, but not the obligation, from time to time at the Company's sole discretion over a 36 -month term of the Stock Purchase Agreement, to direct B.

Riley to purchase up to 10 million shares of the Company's Class A Common Stock in the aggregate.

Under the Stock Purchase Agreement, on any trading day selected by the Company, the Company has the right, in its sole discretion, to present B.

Riley with a purchase notice (each, a "VWAP Purchase Notice"), directing B.

Riley (as principal) to purchase a specified amount of shares not to exceed the lesser of (i) one million shares of Common Stock and (ii) 20 % of the total aggregate number (or volume) of shares of Class A Common Stock traded on the NYSE American at a price(the "VWAP Purchase Price") equal to the product of 0.97 and the VWAP of the Company's Class A Common Stock on the applicable date for each VWAP Purchase Notice, subject to certain limitations contained in the Stock Purchase Agreement.

Sales of Class A Common Stock pursuant to the Stock Purchase Agreement, and the timing of any such sales, are solely at the discretion of the Company, and the Company is under no obligation to sell any securities to B.

Riley under the Stock Purchase Agreement.

In consideration for entering into the Stock Purchase Agreement and concurrently with the execution of the Stock Purchase Agreement, the Company issued to B.

Riley 25,000 shares of Class A Common Stock as initial commitment shares and will issue up to an aggregate of 75,000 shares of its Class A Common Stock as additional commitment shares if certain conditions and milestones are met.

The Company recognized expense associated with the issuance of such commitment shares of $ 112 during the year ended December 31, 2022 based on the fair value of the Company's Class A Common Stock on the date of issuance.

As of December 31, 2023, the Company has not directed B.

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.

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 $ 100 million of shares of Class A Common Stock.

Pursuant to the ATM Agreement, the Company 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.

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 the Company, including any price or size limits or other customary parameters or conditions the Company may impose.

The Company will pay B.

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

During the year ended December 31, 2024, the Company sold 79,676 shares of Class A Common Stock under the ATM Facility at a weighted-average sales price of $ 13.75 .

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

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

In connection with entering into the ATM Agreement, on March 27, 2024, the Company and B.

Riley terminated (the “B.

Riley Termination”) the Common Stock Purchase Agreement (the “B.

Riley Stock Purchase Agreement”) dated August 18, 2022.

As a result of the B.

Riley Termination, the Company recognized approximately $ 0.1 million of expense associated with the write-off of deferred equity issuance costs.

From August 18, 2022 through March 27, 2024, the Company had not directed B.

Riley to purchase any Class A Common Stock pursuant to the B.

Riley Purchase Agreement.

Riley Stock Purchase Agreement.

2023 Private Placement and Securities Purchase Agreement

On November 1, 2023, the Company entered into a Securities Purchase Agreement (the “Private Placement Purchase Agreement”) with certain investors (collectively, the “Investors”), pursuant to which the Company (i) sold and issued to the Investors at an initial closing an aggregate of 6,586,154 shares (the “Initial PIPE Shares”) of the Company’s Class A Common Stock and accompanying warrants to purchase up to 1,141,600 shares of Class A Common Stock (the “Initial PIPE Warrants”), for an aggregate purchase price of $ 42.8 million (the "Initial Financing"), and (ii) sold and issued to the Investors at a second closing, an aggregate of 2,307,692 shares (the “Additional PIPE Shares”, and, together with the Initial PIPE Shares, the “PIPE Shares” ) of the Company’s Class A Common Stock and accompanying warrants to purchase up to an aggregate of 400,000 shares of Class A Common Stock (the “Additional PIPE Warrants” and, together with the Initial PIPE Warrants, the “PIPE Warrants”) for an aggregate purchase price of $ 15.0 million (the “Additional Financing” and, together with the Initial Financing, the “Financing”).

The closing of the Initial Financing occurred on November 2, 2023 ( the “Initial Closing Date”), and the closing of the Additional Financing occurred on November 9, 2023 ( the “Second Closing Date”).

Together with the Initial Closing Date, the aggregate PIPE financing through the Price Placement Purchase Agreement totaled $ 57,810,000 .

The Private Placement Purchase Agreement includes certain covenants, including a limitation on the Company’s use of the net proceeds from the Financing, certain customary standstill restrictions for a period of 90 days following the Initial Closing Date and a restriction on paying any extraordinary dividend to the extent it would result in the issuance of a number of shares of Class A Common Stock upon exercise of the PIPE Warrants (without regard to any limitations on exercise of the PIPE Warrants) in excess of the number of shares of Class A Common Stock permissible by the NYSE American LLC to be issued without stockholder approval.

In addition, pursuant to the Private Placement Purchase Agreement, the Company granted to the Lead Investor certain participation rights with respect to certain future equity and debt offerings by the Company until the eighteen -month anniversary of the Initial Closing Date.

In addition, the Investors entered in to a six month customary lock-up agreement beginning on the Initial Closing Date.

On November 1, 2023, the Company entered into a Securities Purchase Agreement (the “2023 Purchase Agreement”) with certain investors (collectively, the “2023 Investors”), pursuant to which the Company (i) sold and issued to the 2023 Investors at an initial closing an aggregate of 6,586,154 shares (the “Initial 2023 PIPE Shares”) of the Company’s Class A Common Stock and accompanying warrants to purchase up to 1,141,600 shares of Class A Common Stock (the “Initial PIPE Warrants”), for an aggregate purchase price of $ 42.8 million (the "Initial 2023 Financing"), and (ii) sold and issued to the 2023 Investors at a second closing, an aggregate of 2,307,692 shares (the “Additional 2023 PIPE Shares”, and, together with the Initial 2023 PIPE Shares, the “2023 PIPE Shares” ) of the Company’s Class A Common Stock and accompanying warrants to purchase up to an aggregate of 400,000 shares of Class A Common Stock (the “Additional PIPE Warrants” and, together with the Initial PIPE Warrants, the “PIPE Warrants”) for an aggregate purchase price of $ 15.0 million (the “Additional 2023 Financing” and, together with the Initial 2023 Financing, the “2023 Financing”).

The closing of the Initial 2023 Financing occurred on November 2, 2023 ( the “Initial 2023 Closing Date”) , and the closing of the Additional 2023 Financing occurred on November 9, 2023.

Together with the Initial 2023 Financing, the aggregate PIPE financing through the 2023 Purchase Agreement totaled approximately $ 57.8 million.

The 2023 Purchase Agreement included certain covenants, including a limitation on the Company’s use of the net proceeds from the 2023 Financing, certain customary standstill restrictions for a period of 90 days following the Initial 2023 Closing Date and a restriction on paying any extraordinary dividend to the extent it would result in the issuance of a number of shares of Class A Common Stock upon exercise of the PIPE Warrants (without regard to any limitations on exercise of the PIPE Warrants) in excess of the number of shares of Class A Common Stock permissible by the NYSE American LLC to be issued without stockholder approval.

In addition, pursuant to the 2023 Purchase Agreement, the Company granted to the Lead Investor certain participation rights with respect to certain future equity and debt offerings by the Company until the eighteen -month anniversary of the Initial 2023 Closing Date.

2024 Private Placement and Securities Purchase Agreement

On September 16, 2024, the Company entered into a Securities Purchase Agreement (the “2024 Purchase Agreement”) with certain investors (collectively, the “Initial 2024 Investors”), pursuant to which the Company agreed to sell and issue to the Initial 2024 Investors at an initial closing an aggregate of 3,352,106 shares (the “Initial 2024 PIPE Shares”) of the Company’s Class A Common Stock for an aggregate purchase price of approximately $ 31.8 million (the “Initial 2024 Closing”), and agreed to sell and issue to the Initial 2024 Investors at a second closing, at the option of the Initial 2024 Investors, up to an aggregate of number of shares equal to the number of each such Initial 2024 Investor's Initial 2024 PIPE Shares purchased in the Initial 2024 Closing at the same purchase price of $ 9.50 per share (the “Second 2024 Closing” and, together with the Initial Closing, the “2024 Financing”).

The 2024 Purchase Agreement provided that, at any time prior to the Initial 2024 Closing, and at the sole discretion of the Company, additional investors (“Additional 2024 Investors” and, together with the Initial 2024 Investors, the “2024 Investors” ) could execute a joinder to the 2024 Purchase Agreement pursuant to which they would agree to purchase additional shares of Class A Common Stock (the “Additional 2024 PIPE Shares”) in the Initial 2024 Closing, along with the option to purchase Second Closing 2024 PIPE Shares.

On October 25, 2024, the Additional 2024 Investors each executed a joinder to the 2024 Purchase Agreement, pursuant to which the Additional 2024 Investors agreed to purchase, and the Company agreed to sell, an aggregate of 603,684 Additional 2024 PIPE Shares (together with the Initial 2024 PIPE Shares, the “First Closing 2024 PIPE Shares”) for an aggregate purchase price of $ 5.7 million.

The Initial 2024 Closing of the 2024 Financing occurred on October 25, 2024, and 3,955,790 First Closing 2024 PIPE Shares were issued to the 2024 Investors for an aggregate purchase price of $ 37.6 million, on October 25, 2024 ( the “Initial 2024 Closing Date”).

On December 20, 2024, pursuant to the terms of the 2024 Purchase Agreement, the Company sold and issued to the 2024 Investors an aggregate of 3,955,790 shares (the “Second Closing 2024 PIPE Shares” and, together with the First Closing 2024 PIPE Shares, the “2024 PIPE Shares”) of Class A Common Stock for an aggregate purchase price of approximately $ 37.6 million (the “Second 2024 Closing”).

Inclusive of the Initial 2024 Closing, the Company issued and sold an aggregate of 7,911,580 shares of Class A Common Stock for an aggregate purchase price of approximately $ 75.2 million pursuant to the 2024 Purchase Agreement.

The 2024 Purchase Agreement includes certain covenants, including a limitation on the Company’s use of the net proceeds from the 2024 Financing and a restriction on the Company’s issuance of additional shares of Class A Common Stock for a period of 90 days following the Initial 2024 Closing Date, subject to certain exceptions.

The 2024 PIPE Shares were offered and sold in transactions exempt from registration under the Securities Act, in reliance on Section 4 (a)( 2 ) thereof and Rule 506 of Regulation D thereunder.

In connection with the 2024 Financing, the 2024 Investors entered into a customary lock-up agreement that restricts sales of shares of Class A Common Stock by the 2024 Investors for a period of six months beginning on the Initial 2024 Closing Date, subject to certain exceptions.

Non-controlling interests

3 unchanged sentences

As of December 31, 2024 , the LLC interests owned approximately 55.7 % 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 December 31, 2023, the former majority shareholder owned approximately 49 % of the partnership interests in Overflow.

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

On December 31, 2024, the Company assumed the former majority shareholder's ownership interest in Overflow for no consideration.

As of December 31, 2024 and December 31, 2023, the former majority shareholder owned 0 % and 49 % of the partnership interests in Overflow, respectively.

Equity Compensation

7 unchanged sentences

The RSUs will vest ratably over a four -year period beginning on the first anniversary of the grant date and ending on fourth anniversary.

All RSUs were valued at their fair market value, which is the closing price of the Company's stock on the date of the grant.

All RSUs were valued at their fair market value, which was the closing price of the Company's stock on the date of the grant.

The following tables presents a summary of RSU activity for the year ended December 31, 2024:

7 unchanged sentences

888,946 $ 9.17

During the years ended December 31, 2023 , and December 31, 2022, the Company recognized stock compensation expense of $ 1,816 and $ 764 , respectively, associated with the RSUs.

The unrecognized compensation costs associated with all unvested RSUs at December 31, 2023 was $ 5,070 that is expected to be recognized over a weighted-average future period of 2.7 years.

Sky Incentive Units

In May 2021, Sky granted 3,951 Sky Incentive Units to certain employees.

In connection with the Yellowstone Transaction and the execution of the Third A&R Operating Agreement, the number of existing Sky Incentive Units outstanding was adjusted based on a defined unit conversion ratio to reflect the new capital structure (see Note 12 — Equity and Redeemable Equity ) and remain Sky Incentive Units, resulting in 2,807,750 outstanding Sky Incentive Units.

These Incentive Units may be exchanged for Sky Common Units at the holder’s discretion upon vesting.

There were no changes to the terms or conditions of the Sky Incentive Units effected by the Yellowstone Transaction.

The Sky Incentive Units are classified as equity instruments.

The Sky Incentive Units were valued as of the date of grant using the Option-Pricing Method described in the AICPA Accounting and Valuation Guide entitled Valuation of Privately Held Company Equity Securities Issued as Compensation.

The Option-Pricing Method treated profit units (such as Sky Incentive Units) and the capital units outstanding at the time of the valuation (Sky’s Series A Preferred Units, Series B Preferred Units, and the Founder Units) as call options on the total equity value of Sky, with exercise (or strike) prices based on the incremental equity required to repay liquidation preferences for the various holders of Sky interests.

The values of the options associated with each strike price were calculated using the Black-Scholes option pricing model based on the grant date.

The Sky Incentive Units were classified as Level 3 in the fair value hierarchy.

The key inputs and assumptions used in the valuation of the Sky’s Incentive Units were:

Fair value of total equity

Term (in years)

Risk-free interest rate

Below is a summary of activity related to the Sky Incentive Units for the Year ended December 31, 2023 :

During the years ended December 31, 2024 , and December 31, 2023, the Company recognized stock compensation expense of $ 3,425 and $ 1,816 , respectively, associated with the RSUs within employee compensation and benefits within the consolidated statement of operations.

The unrecognized compensation costs associated with all unvested RSUs at December 31, 2024 was approximately $ 6.9 million that is expected to be recognized over a weighted-average future period of 2.5 years.

Non-qualified Stock Options ( “ NSOs ” )

In February 2024, the Company granted to certain employees options to purchase 438,781 shares of Class A Common Stock at an exercise price of $ 11.63 under the Company's 2022 Incentive Award Plan.

The NSOs vest ratably over a four -year period beginning on the sixth anniversary of the grant date and have a term of 10 years.

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

During the year ended December 31, 2024, the Company recognized stock compensation expense of approximately $ 0.3 million associated with all NSO awards.

The unrecognized compensation costs associated with all unvested NSOs at December 31, 2024 was approximately $ 2.9 million that is expected to be recognized over a weighted-average future period of 8.1 years.

Sky Incentive Units

Weighted-average grant date fair value

Sky units outstanding as of December 31, 2022 (as previously presented)

3,951 $ 318.44

Sky units outstanding as of December 31, 2022 (recast for recapitalization)

2,807,750 $ 0.45

Sky units outstanding as of December 31, 2023

2,807,750 $ 0.45

Vested Units outstanding as of December 31, 2023

2,232,735 $ 0.45

Non-vested Units outstanding as of December 31, 2023

575,015 $ 0.45

The Company recognized equity-based compensation expense on a straight-line basis over the requisite service period and has elected to account for forfeitures of Sky Incentive Units if and when they occur.

The Company recorded equity-based compensation expense relating to Sky Incentive Units of $ 444 and $ 341 for the years ended December 31, 2023, and December 31, 2022, 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 December 31, 2023 , there was $ 257 of total unrecognized compensation expense that is expected to be recognized over a weighted-average future period of 1.4 years.

Effective Tax Rate Reconciliation

The Company recognized equity-based compensation expense relating to awarded equity units of Sky (the “Sky Incentive Units”) of $ 181 and $ 444 for the years ended December 31, 2024, and December 31, 2023, respectively.

Expense associated with the Sky Incentive Units is recorded within employee compensation and benefits 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 December 31, 2024, there was $ 0.1 million of total unrecognized compensation expense that is expected to be recognized over a weighted-average future period of 0.4 years.

We are subject to taxation in all jurisdictions in which we operate that impose an income tax on our business activities.

10 unchanged sentences

Total income tax benefit

A reconciliation of the statutory federal income tax expense to the income tax expense (benefit) from continuing operations provided at December 31, 2023 and December 31, 2022 is as follows:

A reconciliation of the statutory federal income tax expense to the income tax expense (benefit) prior to income (loss) attributable to non-controlling interests from continuing operations at December 31, 2024 and December 31, 2023 is as follows:

For the Year Ended December 31,

3 unchanged sentences

( 183 ) ( 133 )

Unrealized gain on warrants

1,815 ( 1,067 )

Unrealized loss on warrants

Stock-based compensation

Income taxed to non-controlling interests

Change in valuation allowance

6 unchanged sentences

Difference between book and tax capital accounts

Accounts receivable, prepaid expenses, and other assets

Stock-based compensation

6 unchanged sentences

Unrealized Gain/Loss on investments

$ ( 1 ) $ ( 1 )

Long-lived assets

( 529 ) ( 716 )

Right-of-use assets

4 unchanged sentences

For the year ended December 31, 2024 , we recorded a full valuation allowance due to historical losses before income taxes which reduced management's ability to rely on future expectations of income.

As of December 31, 2023 , we have available federal tax operating loss carryforwards of approximately $ 14.4 million, including approximately $ 1.7 million generated by our legal predecessor prior to the Yellowstone Transaction.

As of December 31, 2024 , we have available federal tax operating loss carryforwards of approximately $ 32.0 million, including approximately $ 1.7 million generated by our legal predecessor prior to the Yellowstone Transaction and $ 6.0 million generated by our subsidiary, Rapidbuilt.

All federal tax operating loss carryforwards arose in tax years subsequent to 2017.

8 unchanged sentences

however, all tax years, including those of our legal predecessor, are subject to examination by the Internal Revenue Service.

Tax Receivable Agreement

Following closing of the Yellowstone Transaction, the Company, Sky, the LLC Interests, and the TRA Holder Representative, entered into a tax receivable agreement (the “Tax Receivable Agreement”).

Pursuant to the Tax Receivable Agreement, the Company will generally be required to pay the LLC Interests 85% of the amount of savings, if any, in U.S.

• tax deductions in respect of portions of certain payments made under the Tax Receivable Agreement (each of the foregoing, collectively, the “Tax Attributes”).

As of December 31, 2024 , no transactions occurred that would result in a cash tax savings benefit that would trigger the recording of a liability under the terms of the Tax Receivable Agreement.

Earnings (loss) per Share

18 unchanged sentences

Shares subject to unvested restricted stock units

Shares issuable upon the exercise of unvested stock options 439 -

Shares issuable upon the exercise of Warrants

7 unchanged sentences

Balance as of December 31, 2022

Other comprehensive loss before reclassifications

$ ( 102 ) $ ( 102 )

Other comprehensive loss before reclassifications

Amounts reclassified to other (income) expense

1 unchanged sentence

Balance as of December 31, 2023

$ ( 102 ) $ ( 102 )

Other comprehensive income before reclassifications

3 unchanged sentences

During the years ended December 31, 2024 and December 31, 2023, the Company reported reclassifications of $ 815 and $ 270 , respectively, of unrealized gains on available-for-sale securities to net income as a component of other (income) expense.

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 December 31, 2024, 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.

The accounting policies of the Company’s consolidated segment are the same as those described in Note 2 — Basis of Presentation and Significant Accounting Policies.

Any intercompany revenues or expenses are eliminated in consolidation.

Commitments and Contingencies

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.

Construction began on the APA Phase I project in October 2022.

The DVT Lease requires approximately $ 15.3 million and $ 14.6 million of improvements to be made for Phase I and for Phase II, if such option is exercised, respectively, within 12 -months after receiving permitting documents for each Phase, but in no event later than May 2026.

Construction began on the DVT Phase I project in December 2022.

The Company has committed to spend $ 10.0 million in capital improvements on the ADS construction project.

If this amount is not expended, the Company is subject to a reduction of the term of the lease.

The DVT Lease requires approximately $ 14.6 million of improvements to be made for the DVT Phase II project within 12 -months after receiving permitting documents, but in no event later than May 2026.

The PWK Lease contains a requirement that the Company must commence construction within six months of the issuance of permits and must complete construction within 18 months of construction commencement.

If the Company is unable to adhere to the prescribed timeline and unable to receive an extension from PWK, the PWK Lease is subject to termination.

The Company has contracts for construction of the APA Phase I, DVT Phase I, and ADS Phase I projects.

The SJC Lease contains customary milestones by which the Company must complete additional construction.

The ORL Lease requires that the Company construct $ 30 million of improvements in its initial phase of construction within 24 months of the effective date of the lease.

The ORL Lease contains other customary milestones by which the Company must commence and complete subsequent phases of construction.

The SLC Lease requires that the Company make minimum capital improvements of $ 40 million.

The TTN Lease requires that the Company make minimum capital improvements of $ 30 million.

The Company has contracts for construction of the APA Phase I, DVT Phase I, ADS Phase I, and OPF Phase II projects.

The Company may terminate any of the contracts or suspend construction without cause.

There are no termination penalties under the construction contracts.

There are no termination penalties under such construction contracts.

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 CloudNine and Sky 805, who also serves as an independent contractor of the Company following the CMA Asset Acquisition.

The Company provided an initial loan commitment of $ 1.0 million and agreed to provide an additional $ 2.0 million of availability under a revolving line of credit to fund the working capital requirements of such company.

The Loan and Security Agreement matures on December 6, 2029, and bears interest at a the standard overnight financing right plus 2 % per annum.

As of December 31, 2024, the Company had loaned a total of $ 1.0 million to such company, the balance of which is presented as a component of accounts receivable, prepaid expenses, and other assets within the Company's consolidated balance sheet.

Echo Echo Agreement

On September 20, 2021, the Company entered into a non-exclusive agreement with Echo Echo, LLC, a related party to the Founder and CEO, for the use of a Beechcraft Baron G58 aircraft.

3 unchanged sentences

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

For the years ended December 31, 2023 , and December 31, 2022, the Company recognized $ 215 and $ 194 of expense, within general and administrative expense under the terms of this 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 years ended December 31, 2024 , and December 31, 2023, the Company recognized $ 372 and $ 215 of expense, within pursuit and marketing expense under the terms of this agreement.

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

For the year ended December 31, 2023 , the Company paid $ 105 for consulting services to a company that employed the chief financial officer until prior to July 1, 2021 and with which the Company had a pre-existing vendor relationship.

The Company paid $ 108 during the year ended December 31, 2022 to the same company.

Other Related Party Transactions

For the year ended December 31, 2024 , the Company recognized $ 0 of expense for consulting services received from a company that employed the chief financial officer until prior to July 1, 2021 and with which the Company had a pre-existing vendor relationship.

The Company recognized $ 105 of expense during the year ended December 31, 2023 for consulting services received from the same company.

Subsequent Events

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

The property at SJC includes additional land on which the Company intends 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.

The SJC Lease contains customary milestones by which the Company must complete additional construction.

On March 27, 2024, the Company, through a wholly-owned subsidiary of the Company, entered into a ground lease agreement (the “ORL Lease”) at Orlando Executive Airport (“ORL”) with the Greater Orlando Aviation Authority (“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 construction period, with lease payments commencing contemporaneously with the term.

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.

The ORL Lease requires that the Company construct $ 30 million of improvements in its initial phase of construction within 24 months of the effective date of the lease.

The ORL Lease contains other customary milestones by which the Company must commence and complete subsequent phases of construction.

On January 1, 2025, the Company executed a lease amendment with respect to its ground lease at APA to add an approximately 1 acre parcel of land to the existing lease (the “APA Lease Amendment”).

The land associated with the APA Lease Amendment became immediately available for possession in January 2025 and is co-terminus with the other parcels covered by the Company's ground lease at APA.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

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-K

Item 8. Financial Statements and Supplementary Data