Sky Harbour Group Corp 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX TO FINANCIAL STATEMENTS Financial Statements Page Report of Independent Registered Public Accounting Firm (PCAOB ID: 274 ); EisnerAmper LLP, New York, NY 46 Balance Sheets - December 31, 2025 and December 31, 2024 48 Statements of Operations - Years Ended December 31, 2025 and December 31, 2024 49 Statements of Comprehensive Income (Loss) - Years Ended December 31, 2025 and December 31, 2024 50 Statements of Changes In Stockholders' Equity - Years ended December 31, 2025 and December 31, 2024 51 Statements of Cash Flows - Years ended December 31, 2025 and December 31, 2024 52 Notes to Financial Statements 53 45 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors Sky Harbour Group Corporation: Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Sky Harbour Group Corporation and Subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2025 and 2024, and the consolidated results of their operations and their cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 46 Table of Contents Constructed assets, long-lived assets, and cost of construction – Indicators of Impairment As of December 31, 2025, the Company had constructed assets and long-lived assets, net of accumulated depreciation, and cost of construction of approximately $349.8 million. As disclosed in Note 2 to the financial statements, the Company monitors events and changes in circumstances representing triggering events that could indicate that the carrying amounts of constructed assets, long-lived assets, and cost of construction may not be recoverable at asset group level. Examples of the types of events and circumstances that would cause management to assess the Company’s constructed assets, long-lived assets, and cost of construction for potential impairment include, but are not limited to: a significant decrease in the market price of an asset; a significant adverse change in the manner in which the asset is being used or its physical condition; natural disasters; a change in the projected holding period; significant changes regarding future occupancy; and changes in the local markets or economic conditions. When such events or changes in circumstances are present, the Company assesses potential impairment by comparing projected future cash flows over the anticipated holding period on an undiscounted basis to the carrying amount of the asset. These projected cash flows reflect in-place and projected leasing activity, market revenue and expense growth rates, anticipated holding period, and changes in economic and other relevant conditions. We identified the evaluation of indicators of impairment as a critical audit matter due to significant judgment made by management in identifying indicators of impairment. This in turn led to a high degree of auditor judgment, subjectivity, and audit effort in performing procedures to evaluate the reasonableness of management’s significant assumptions related to the impairment evaluation including identifying events and circumstances that exist that would indicate the carrying amounts of constructed assets, long-lived assets, and cost of construction may not be recoverable. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. We obtained an understanding and evaluated the design of controls over the Company’s impairment evaluation. Our procedures included, among others, assessing the methodologies applied and identifying the existence of any triggering events, including comparing estimated costs to completion to initial budgets, comparing lease occupancy rates at the asset group level, as well as performing trend analysis including revenue and net operating income at the asset group level year over year, and considering if the determination was reasonable considering the past and current economic performance of the airport projects and if consistent with evidence obtained in other areas of the audit. We tested completeness and accuracy of the underlying data used by management in its evaluation. We held discussions with management regarding known or expected changes in business conditions, asset utilization, strategic plans, or regulatory or economic factors that could affect the recoverability of constructed assets, long‑lived assets, and cost of construction. /s/ EisnerAmper We have served as the Company’s auditor since 2020. EISNERAMPER LLP Iselin, New Jersey March 19, 2026 47 Table of Contents SKY HARBOUR GROUP CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share data) December 31, 2025 December 31, 2024 Assets Cash $ 20,718 $ 42,442 Restricted cash 16,306 51,917 Investments - 18,987 Restricted investments 11,453 13,816 Accounts receivable, prepaid expenses, and other assets 14,154 8,624 Cost of construction 60,837 144,900 Constructed assets, net 267,687 110,302 Right-of-use assets 177,955 147,831 Long-lived assets, net 21,356 14,732 Lease intangible assets, net 2,710 3,005 Total assets $ 593,176 $ 556,556 Liabilities and equity Accounts payable, accrued expenses, and other liabilities $ 37,360 $ 27,655 Operating lease liabilities 190,222 152,797 Bonds payable, net of unamortized debt issuance costs and premiums 162,815 162,621 Loans payable and finance lease liabilities 20,544 7,535 Warrants liability 10,269 46,130 Total liabilities 421,210 396,738 Commitments and contingencies (Note 20) Stockholders’ equity Preferred stock; $ 0.0001 par value; 10,000,000 shares authorized as of December 31, 2025; none issued and outstanding - - Class A common stock, $ 0.0001 par value; 200,000,000 shares authorized; 33,989,673 and 33,456,227 shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively 3 3 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 December 31, 2025 and December 31, 2024, respectively 4 4 Additional paid-in capital 173,514 168,634 Accumulated deficit ( 45,774 ) ( 64,592 ) Accumulated other comprehensive income - 53 Total Sky Harbour Group Corporation stockholders’ equity 127,747 104,102 Non-controlling interests 44,219 55,716 Total equity 171,966 159,818 Total liabilities and equity $ 593,176 $ 556,556 See accompanying Notes to Consolidated Financial Statements 48 Table of Contents SKY HARBOUR GROUP CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) Year ended December 31, 2025 December 31, 2024 Revenue: Rental revenue $ 21,588 $ 12,700 Fuel revenue 5,952 2,061 Total revenue 27,540 14,761 Expenses: Campus operating expenses 8,682 3,953 Fuel expenses 3,315 555 Ground lease expenses 13,459 8,564 Depreciation and amortization 6,294 2,706 Pursuit and marketing expenses 2,309 2,027 Employee compensation and benefits 17,255 13,882 General and administrative expenses 4,253 3,488 Total expenses 55,567 35,175 Operating loss ( 28,027 ) ( 20,414 ) Other (income) expense: Interest expense, net of capitalized interest 1,359 715 Other (income) expense ( 846 ) ( 1,961 ) Unrealized (gain) loss on warrants ( 35,861 ) 34,515 Total other (income) expense ( 35,348 ) 33,269 Net income (loss) $ 7,321 $ ( 53,683 ) Net loss attributable to non-controlling interests ( 11,497 ) ( 8,452 ) Net income (loss) attributable to Sky Harbour Group Corporation shareholders $ 18,818 $ ( 45,231 ) Earnings (loss) per share Basic $ 0.56 $ ( 1.76 ) Diluted $ 0.09 $ ( 1.76 ) Weighted average shares Basic 33,828 25,742 Diluted 77,774 25,742 See accompanying Notes to Consolidated Financial Statements 49 Table of Contents SKY HARBOUR GROUP CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in thousands) Year Ended December 31, 2025 December 31, 2024 Net income (loss) $ 7,321 $ ( 53,683 ) Unrealized gains on available-for-sale securities 70 556 Realized gains on available-for-sale securities reclassified to the consolidated statements of operations ( 123 ) ( 815 ) Total other comprehensive income (loss) $ 7,268 $ ( 53,942 ) See accompanying Notes to Consolidated Financial Statements 50 Table of Contents SKY HARBOUR GROUP CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS ’ EQUITY (in thousands, except share data) Class A Class B Additional Accumulated Other Total Non- Common Stock Common Stock Paid-in Accumulated Comprehensive Stockholders’ Controlling Total Shares Amount Shares Amount Capital Deficit Loss Equity Interests Equity 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 ( 120,886 ) - - - ( 1,443 ) - - ( 1,443 ) - ( 1,443 ) Exchange of Sky Incentive Units 751,485 - - - 280 - - 280 ( 280 ) - Issuance of stock 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 ) Net loss - - - - - ( 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 Share-based compensation - - - - 5,694 - - 5,694 75 5,769 Vesting of restricted stock units 389,868 - - - - - - - - - Shares withheld for payment of employee taxes ( 122,894 ) - - - ( 1,535 ) - - ( 1,535 ) - ( 1,535 ) Payment of equity issuance costs - - - - ( 85 ) - - ( 85 ) - ( 85 ) Exchange of Sky Incentive Units 196,000 - - - 75 - - 75 ( 75 ) - Issuance of stock through ATM Facility, net of equity issuance costs 20,472 - - - 281 - - 281 - 281 Shares issued as debt issuance costs 50,000 - - - 450 - - 450 - 450 Other comprehensive income (loss) - - - - - - ( 53 ) ( 53 ) - ( 53 ) Net income (loss) - - - - - 18,818 - 18,818 ( 11,497 ) 7,321 Balance at December 31, 2025 33,989,673 $ 3 42,046,356 $ 4 $ 173,514 $ ( 45,774 ) $ - $ 127,747 $ 44,219 $ 171,966 See accompanying Notes to Consolidated Financial Statements 51 Table of Contents SKY HARBOUR GROUP CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year ended December 31, 2025 December 31, 2024 Cash flows from operating activities: Net loss $ 7,321 $ ( 53,683 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 6,380 2,706 Amortization of debt issuance costs 348 - Equity-based compensation 5,769 3,918 Straight-line rent adjustments, net ( 980 ) ( 109 ) Non-cash operating lease expense 7,301 4,651 Loss on disposition assets, net 121 30 Loss on extinguishment of loans payable 13 - Unrealized (gain) loss on warrants ( 35,861 ) 34,515 Realized gain on available for sale investments ( 112 ) ( 307 ) Changes in operating assets and liabilities: Accounts receivable, prepaid expenses, and other assets ( 166 ) ( 1,108 ) Right-of-use asset initial direct costs - ( 17 ) Accounts payable, accrued expenses, and other liabilities 7,530 309 Net cash used in operating activities ( 2,336 ) ( 9,095 ) Cash flows from investing activities: Purchases of long-lived assets ( 9,509 ) ( 2,262 ) Payments for cost of construction ( 74,665 ) ( 76,287 ) Proceeds from disposition of long-lived assets 563 11 Investment in notes receivable, net ( 121 ) ( 1,000 ) Net cash (used in) provided by acquisition of business - ( 31,683 ) Purchases of available for sale investments ( 201,370 ) ( 244,687 ) Proceeds from available for sale investments 220,416 237,614 Proceeds from held-to-maturity investments 2,356 74,387 Net cash used in investing activities ( 62,330 ) ( 43,907 ) Cash flows from financing activities: Proceeds from issuance of PIPE Shares - 75,160 Proceeds from exercise of warrants - 3,015 Proceeds from ATM facility 281 1,094 Proceeds from issuance of loan payable 21,077 - Payments for debt issuance costs ( 4,886 ) - Payments for equity issuance costs ( 90 ) ( 955 ) Payments of loans payable ( 7,516 ) ( 1,776 ) Payments of employee taxes related to vested equity awards ( 1,535 ) ( 1,443 ) Net cash provided by financing activities 7,331 75,095 Net (decrease) increase in cash and restricted cash ( 57,335 ) 22,093 Cash and restricted cash, beginning of year 94,359 72,266 Cash and restricted cash, end of year $ 37,024 $ 94,359 See accompanying Notes to Consolidated Financial Statements 52 Table of Contents SKY HARBOUR GROUP CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 (in thousands, except share data) 1. Organization and Business Operations Sky Harbour Group Corporation (“SHG”) is a holding company organized under the laws of the State of Delaware and, through its main operating subsidiary, Sky Harbour LLC and its subsidiaries (collectively, “Sky”), is an aviation infrastructure development company that develops, leases and manages general aviation hangars for business aircraft across the United States. Sky Harbour Group Corporation and its consolidated subsidiaries are collectively referred to as the “Company.” The Company is organized as an umbrella partnership-C corporation, or “Up-C”, structure in which substantially all of the operating assets of the Company are held by Sky and SHG’s only substantive assets are its equity interests in Sky (the “Sky Common Units”). As of December 31, 2025, SHG owned approximately 44.7 % of the Sky Common Units, and the prior holders of Sky’s Existing Common Units (the “LLC Interests”) owned approximately 55.3 % 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. 2. Basis of Presentation and Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements and the related notes (the “Financial Statements”) have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission. These Financial Statements include the accounts of the Company and its consolidated subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain historical amounts have been reclassified to conform to the current year’s presentation. 53 Table of Contents Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Such estimates include assumptions used within impairment analyses, estimated useful lives of depreciable assets and amortizable costs, estimates of inputs utilized in determining the fair value of financial instruments such as warrants, estimates and assumptions related to right-of-use assets and operating lease liabilities, and estimates and assumptions used in the determination of the fair value of assets acquired and liabilities assumed in business combinations. Actual results could differ materially from those estimates. Risks and Uncertainties The Company’s operations have been limited to-date. For most of its history, the Company was engaged in securing access to land through ground leases, and developing and constructing aviation hangars. The major risks faced by the Company is its future ability to obtain additional tenants for the facilities that it constructs, and to contract with such tenants for rental income in an amount that is sufficient to meet the Company’s financial obligations, including increasing construction costs due to inflation and increased borrowing costs to the extent that the Company incurs additional indebtedness. Liquidity and Capital Resources As a result of ongoing construction projects and business development activities, including the development of aircraft hangars and the leasing of available hangar space, the Company has incurred recurring losses and negative cash flows from operating activities since its inception. The Company expects to continue to invest in such activities and generate operating losses in the near future. The Company obtained long-term financing through bond and equity offerings to fund its construction, lease, and operational commitments, and believes its liquidity is sufficient to allow continued operations for more than one year after the date these financial statements are issued. Significant Accounting Policies Basis of Consolidation SHG is deemed to have a controlling interest of Sky through its appointment as the Managing Member of Sky, in which SHG has control over the affairs and decision-making of Sky. The interests in Sky not owned by the Company are presented as non-controlling interests. Sky’s ownership percentage in each of its consolidated subsidiaries is 100 %, unless otherwise disclosed. Cash and Restricted Cash The Company’s cash and restricted cash is held at major commercial banks, which may at times exceed the Federal Deposit Insurance Corporation limit. To date, the Company has not experienced any losses on its cash deposits. 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 11 — Bonds Payable, Loans Payable, and Interest , various restricted trust bank accounts were established at a major financial institution. Such trust bank accounts are included in Restricted cash and Restricted investments on the consolidated balance sheet as of December 31, 2025 and December 31, 2024 . 54 Table of Contents Investments Investments of the Company's cash in various U.S. Treasury securities have been classified as available-for-sale and are carried at estimated fair value utilizing Level 1 inputs as determined based upon quoted market prices on active markets. Unrealized gains and losses are excluded from earnings and are reported as a component of comprehensive income (loss). The Company periodically evaluates whether declines in fair values of its available-for-sale securities below their book value are other-than-temporary. This evaluation consists of several qualitative and quantitative factors regarding the severity and duration of the unrealized loss as well as the Company's ability and intent to hold the available-for-sale security until a forecasted recovery occurs or its contractual maturity. 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. 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. Restricted Investments Held-to-Maturity Pursuant to provisions within the Master Indenture of the Series 2021 Bonds, as defined in Note 11 — Bonds Payable, Loans Payable, and Interest , the Company invests the funds held in the restricted trust bank accounts in various U.S. Treasury securities. Therefore, such investments are reported as “Restricted investments” in the accompanying consolidated balance sheets. The fair value of the Company’s restricted investments is estimated utilizing Level 1 inputs including prices for U.S. Treasury securities based upon quoted market prices on active markets. Unrealized losses on certain of the Company's investments and restricted investments are primarily attributable to changes in interest rates. The Company does not believe the unrealized losses represent impairments because the unrealized losses are due to general market factors. The Company has not recognized an allowance for expected credit losses related to its investments or restricted investments as the Company has not identified any unrealized losses attributable to credit factors during the years ended December 31, 2025 and December 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. The held-to-maturity restricted investments are carried on the consolidated balance sheet at amortized cost. Cost of Construction Cost of construction on the consolidated balance sheets is carried at cost. The cost of acquiring an asset includes the costs necessary to bring a capital project to the condition necessary for its intended use. Costs are capitalized once the construction of a specific capital project is probable. Construction labor and other direct costs of construction are capitalized. Professional fees for engineering, procurement, consulting, and other soft costs that are directly identifiable with the project and are considered an incremental direct cost are capitalized. 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 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. Constructed assets, net Constructed assets on the consolidated balance sheets consists of developed aircraft hangar buildings and are carried at cost less accumulated depreciation. Once a capital project is complete, the Company begins to depreciate the constructed asset on a straight-line basis over the lesser of the life of the asset or the remaining term of the related ground lease, including expected renewal terms. Other long-lived assets Long-lived assets on the consolidated balance sheets consists principally of land, buildings, machinery and equipment, ground support equipment, software, and computer equipment. Long-lived assets are carried at cost less accumulated depreciation. Maintenance and repair expenses are charged to expense as incurred. 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 constructed assets, long-lived assets, and cost of construction 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. An impairment exists when the carrying amount of an asset exceeds the aggregate projected future cash flows over the anticipated holding period on an undiscounted basis. An impairment loss is measured based on the excess of the property’s carrying amount over its estimated fair value. Estimates of fair value are determined using discounted cash flow models, which consider, among other things, anticipated holding periods, current market conditions and utilize unobservable quantitative inputs, including appropriate capitalization and discount rates. If the estimates of the projected future cash flows, anticipated holding periods, or market conditions change, evaluation of impairment losses may be different and such differences could be material to the consolidated financial statements. The evaluation of anticipated cash flows is subjective and is based, in part, on assumptions regarding future occupancy, rental rates and other factors that could differ materially from actual results. 55 Table of Contents Leases The Company accounts for leases under Accounting Standards Codification (“ASC”) Topic 842, Leases . The Company determines whether a contract contains a lease at the inception of the contract. ASC Topic 842 requires lessees to recognize lease liabilities and right-of-use (“ROU”) assets for all operating leases with terms of more than 12 months on the consolidated balance sheets. The Company has made an accounting policy election to not recognize leases with an initial term of 12 months or less on the Company’s consolidated balance sheets and will result in recognizing those lease payments in the consolidated statements of operations on a straight-line basis over the lease term. When management determines that it is reasonably certain that the Company will exercise its options to renew the leases, the renewal terms are included in the lease term and the resulting ROU asset and lease liability balances. The Company has lease agreements with lease and non-lease components; the Company has elected the accounting policy to not separate lease and non-lease components for all underlying asset classes. The Company has not elected to capitalize any interest cost that is implicit within its operating leases into cost of construction on the consolidated balance sheet, but instead, expenses its ground lease cost as a component of operating expenses in the consolidated statements of operations. All of the Company’s ground leases at airports are classified as operating leases under ASC Topic 842. Management has determined that it is reasonably certain that the Company will exercise its options to renew the leases, and therefore the renewal options are included in the lease term and the resulting ROU asset and operating lease liability balances. As the Company’s lease agreements do not provide a readily determinable implicit rate, nor is the rate available to the Company from its lessors, the Company uses its incremental borrowing rate to determine the present value of the lease payments. The Company has operating leases that contain variable payments, most commonly in the form of common area maintenance and operating expense charges, which are based on actual costs incurred. These variable payments were excluded from the calculation of the ROU asset and operating lease liability balances since they are not fixed or in-substance fixed payments. These variable payments were not material in amount for both of the years ended December 31, 2025 and 2024 . 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. 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 2023 Purchase Agreement (as defined in Note 12 — Warrants ) in accordance with the guidance contained in ASC Topic 815, “Derivatives and Hedging” (“ASC 815” ), under which warrants that do not meet the criteria for equity classification and must be recorded as derivative liabilities. Accordingly, the Company classifies the warrants as liabilities carried at their fair value and adjusts the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until the warrants are exercised or expire, and any change in fair value is recognized as an unrealized gain or loss in the consolidated statements of operations. Fair Value of Financial Instruments ASC Topic 820, Fair Value Measurement and Disclosures, defines fair value and establishes a framework for measuring fair value. The objective of fair value is to determine the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). ASC Topic 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 – quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities; Level 2 – quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active or other inputs that are observable or can be corroborated by observable market data; and Level 3 – unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. Considerable judgment is necessary to interpret Level 2 and 3 inputs in determining the fair value of financial and non-financial assets and liabilities. 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. 56 Table of Contents 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. The initial valuations are derived from estimated fair value assessments and assumptions used by managements. The excess of the acquisition price over those estimated fair values, if any, is recorded as goodwill. 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 The Company leases the hangar facilities that it constructs to third parties. The Company determines whether a contract contains a lease at the inception of the contract. The lease agreements are either on a month-to-month basis or have a defined term and may have options to extend the term. Some of the leases contain options to terminate the lease by either party with given notice. The Company expects to continue to derive benefit from the underlying assets after the end of the lease term through further leasing arrangements. The underlying assets are the leasehold interest that the Company has in connection with its ground leases. There are no options given to the lessee to purchase the underlying assets. Rental revenue is recognized in accordance with ASC 842 and includes fixed payments of cash rents, which represents revenue each tenant pays in accordance with the terms of its respective lease and is recognized on a straight-line basis over the term of the lease. Rental revenue and the corresponding rent and other receivables are recorded net of any concessions and uncollectible tenant receivables for all periods presented. The Company evaluates the collectability of tenant receivables for payments required under the lease agreements. If the Company determines that collectability is not probable, the Company recognizes any difference between revenue amounts recognized to date under ASC 842 and payments that have been collected from the lessee, including any additional rent or lease termination fees, as a current period adjustment to rental revenue. At certain of the Company's hangar campuses, the Company recognizes revenue from ground-based services, such as the fueling and towing of aircraft. 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 years ended December 31, 2025 and 2024 , the Company did not derive 10% or more of its revenue from any single tenant. Advertising Costs The Company expenses the cost of advertising and marketing as incurred. Advertising and marketing costs recognized as pursuit and marketing expenses totaled approximately $ 0.3 million for the year ended December 31, 2025 , and approximately $ 0.4 million for the year ended December 31, 2024 . 57 Table of Contents Income Taxes SHG is classified as a corporation for Federal income tax purposes and is subject to U.S. Federal and state income taxes. SHG includes in income, for U.S. Federal income tax purposes, its allocable portion of income from the “pass-through” entities in which it holds an interest, including Sky. The “pass-through” entities, are not subject to U.S. Federal and certain state income taxes at the entity level, and instead, the tax liabilities with respect to taxable income are passed through to the members, including SHG. As a result, prior to the Yellowstone Transaction, Sky was not subject to U.S. Federal and certain state income taxes at the entity level. The Company follows the asset and liability method of accounting for income taxes. This method gives consideration to the future tax consequences associated with the differences between the financial accounting and tax basis of the assets and liabilities as well as the ultimate realization of any deferred tax asset resulting from such differences, as well as from net operating losses and other tax-basis carryforwards. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. When a valuation allowance is increased or decreased, a corresponding tax expense or benefit is recorded. 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 Income Taxes (Topic 740 ) In December 2023, the FASB issued ASU No. 2023 - 09, Income Taxes (Topic 740 ): Improvements to Income Tax Disclosures . The amendments in this update applied to all entities that are subject to Topic 740, Income Taxes . The standard requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. The amendments in this update are effective for annual periods beginning after December 15, 2024. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively. The Company adopted ASU 2023 - 09 effective January 1, 2025. Recently Issued Accounting Pronouncements Disaggregation of Income Statement Expenses (Subtopic 220 - 40 ) 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. The Company is currently evaluating the impact of adopting this ASU on our consolidated financial statements and disclosures. Interim Reporting Requirements (Topic 270 ) In December 2025, the FASB issued ASU No. 2025 - 11, Interim Reporting (Topic 270 ): Narrow-Scope Improvements . This ASU intends to improve the navigability of the guidance in ASC 270, Interim Reporting (“ASC 270” ), and clarifies when it applies. The ASU also provides additional guidance on what disclosures should be provided in interim reporting periods and establishes a principle under which an entity must disclose events since the end of the last annual reporting period that have had material impact on the entity. The guidance is effective for annual periods beginning after December 15, 2027, including interim periods within those fiscal years. Early adoption is permitted and entities may apply the guidance prospectively or retrospectively. The Company is currently evaluating the impact of adopting this ASU on our consolidated financial statements and disclosures. 58 Table of Contents 3. Acquisitions 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 Cash $ 419 Constructed assets, net 30,382 Operating lease right-of-use assets 12,691 Long-lived assets, net 4,241 Total assets 47,733 Accounts payable, accrued expenses and other liabilities 1,511 Operating lease liabilities 14,113 Total liabilities 15,624 Total fair value of net assets acquired $ 32,109 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. . 59 Table of Contents 4. Investments and Restricted Investments The following tables are summaries of the amortized cost, unrealized gains, unrealized losses, and fair value by investment type as of December 31, 2025 and December 31, 2024: December 31, 2025 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Investments, available for sale: U.S. Treasuries $ - $ - $ - $ - Total investments $ - $ - $ - $ - Restricted investments, held-to-maturity: U.S. Treasuries 11,453 55 - 11,508 Total restricted investments $ 11,453 $ 55 $ - $ 11,508 December 31, 2024 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Investments, available for sale: U.S. Treasuries $ 18,934 $ 53 $ - $ 18,987 Total investments $ 18,934 $ 53 $ - $ 18,987 Restricted investments, held-to-maturity: U.S. Treasuries 13,816 85 ( 353 ) 13,548 Total restricted investments $ 13,816 $ 85 $ ( 353 ) $ 13,548 The following table sets forth the maturity profile of the Company's investments and restricted investments as of December 31, 2025: Investments Restricted Investments Due within one year $ - $ 11,453 Due one year through five years - - Total $ - $ 11,453 60 Table of Contents 5. Cost of Construction and Constructed Assets Constructed assets, net, and cost of construction, consists of the following: December 31, 2025 December 31, 2024 Constructed assets, net of accumulated depreciation: Buildings: ADS Phase I, APA Phase I, BNA, CMA, DVT Phase I, OPF Phase I, SGR, and SJC Renovation $ 277,473 $ 115,151 Accumulated depreciation ( 9,786 ) ( 4,849 ) $ 267,687 $ 110,302 Cost of construction: ADS Phase II, BDL Phase I, HIO Phase I, IAD Phase I, OPF Phase II, ORL Phase I, POU Phase I, PWK Phase I, SLC Phase I, and TTN Phase I $ 60,837 $ 144,900 Constructed assets are being depreciated over a weighted-average useful life of approximately 47.6 years. Depreciation expense for the years ended December 31, 2025 and 2024 totaled approximately $ 4.9 million and $ 1.9 million, respectively. 6. Long-lived Assets Long-lived assets, net, consists of the following: December 31, 2025 December 31, 2024 Ground support equipment $ 2,882 $ 1,644 Machinery and equipment 7,719 4,903 Buildings 7,993 5,434 Land 1,620 1,620 Other equipment and fixtures 1,899 966 Purchase deposits and construction in progress 2,658 2,380 24,771 16,947 Accumulated depreciation ( 3,415 ) ( 2,215 ) $ 21,356 $ 14,732 Long-lived assets are being depreciated over a weighted-average use life of approximately 12.2 years. Depreciation expense for the years ended December 31, 2025 and 2024 totaled approximately $ 1.2 million and $ 0.8 million, respectively. Capitalized depreciation of long-lived assets included in cost of construction totaled approximately $ 0.7 million and $ 0.5 million for the years ended December 31, 2025 and December 31, 2024, respectively . As of December 31, 2025 and December 31, 2024 , long-lived assets included approximately $ 2.7 million and $ 2.4 million, respectively, of purchase deposits towards long-lived assets which are not being depreciated as the assets have not been placed into service. 61 Table of Contents 7. Lease Intangible Assets Lease intangible assets, net, consists of the following: December 31, 2025 December 31, 2024 Acquired in-place leases $ 1,878 $ 1,878 Above market leases 1,151 1,151 3,029 3,029 Accumulated amortization ( 319 ) ( 24 ) $ 2,710 $ 3,005 Lease intangible assets are being amortized over a weighted-average use life of approximately 9.3 years. Amortization expense for the years ended December 31, 2025 and 2024 totaled approximately $ 0.3 million and less than $ 0.1 million, respectively. Estimated amortization of the respective intangible lease assets as of December 31, 2025 for each of the five succeeding years and thereafter is as follows: Year Ending December 31, Acquired In-Place Leases Above Market Leases 2026 $ 191 $ 104 2027 191 104 2028 191 104 2029 191 104 2030 191 104 Thereafter 715 520 Total $ 1,670 $ 1,040 8. Accounts Payable, Accrued Expenses, and Other Liabilities Accounts payable, accrued expenses and other liabilities, consists of the following: December 31, 2025 December 31, 2024 Costs of construction $ 18,442 $ 14,267 Employee compensation and benefits 2,017 2,746 Interest 3,889 3,474 Professional fees 851 1,149 Property taxes 444 969 Tenant rent received in advance 6,500 390 Tenant security deposits 1,536 1,036 Other 3,681 3,624 $ 37,360 $ 27,655 62 Table of Contents 9. Leases — Lessee The table below summarizes operating lease expense for the years ended December 31, 2025 and December 31, 2024 recorded in the captions within our consolidated statement of operations: Year Ended December 31, 2025 December 31, 2024 Ground lease expenses $ 13,459 $ 8,564 Fuel expenses 619 270 General and administrative expenses 144 111 Total operating lease expense $ 14,222 $ 8,945 The Company’s long-term ground leases have remaining terms ranging between 18 to 71 years, including options for the Company to extend the terms. These leases expire between 2044 and 2097, which include all lease extension options available to the Company. 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. 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 our pre-engineered metal building subsidiary. In March 2024, the Company, through an indirect, 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 an indirect, 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 an indirect, 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 an indirect, 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 an indirect, 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. In January 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. In April 2025, the Company, through an indirect, wholly-owned subsidiary of the Company, entered into a ground lease agreement (the “HIO Lease”) at Hillsboro Airport (“HIO”) with the Port of Portland. The HIO Lease covers approximately 13 acres of property at HIO. The initial term of the HIO Lease will be 35 years from the later of certificate of occupancy or 18 months from the expiration of the diligence period, as defined in the HIO Lease, with lease payments commencing contemporaneously with the term. The HIO Lease contains an option exercisable by the Company to extend the HIO Lease for an additional 10 years following the expiration of the initial term. In April 2025, the Company, through an indirect, wholly-owned subsidiary of the Company, entered into a ground lease agreement (the “SWF Lease”) at New York Stewart International Airport (“SWF”) with the Port Authority of New York and New Jersey. The SWF Lease covers approximately 16 acres of property at SWF. The initial term of the SWF Lease will be 30 years, with lease payments commencing on the earlier of hangar occupancy or 36 months from the receipt of certain environmental approvals. The SWF Lease contains three options exercisable by the Company to extend the SWF Lease for an additional total of 15 years following the expiration of the initial term. In October 2025, the Company, through an indirect, wholly-owned subsidiary of the Company, entered into a ground lease agreement (the “LGB Lease”) at Long Beach Airport (“LGB”) with the City of Long Beach, California. The LGB Lease covers approximately 17 acres of property at LGB. The initial term of the LGB Lease will be 50 years beginning 18 months after the effective date, with lease payments commencing contemporaneously with the term. In December 2025, the Company, through an indirect, wholly-owned subsidiary of the Company, entered into a ground lease agreement (the “FTW Lease”) at Fort Worth Meacham International Airport (“FTW”) with the City of Fort Worth. The FTW Lease covers approximately 4.5 acres of property at FTW. The initial term of the FTW Lease will be 40 years, with lease payments commencing immediately upon execution of the lease. 63 Table of Contents Supplemental consolidated cash flow information related to the Company’s leases was as follows: Year ended December 31, 2025 December 31, 2024 Cash paid for amounts included in measurement of lease liabilities: Operating cash flows from operating leases $ 6,482 $ 4,223 Operating cash flows from finance leases 3 3 Financing cash flows from finance leases 31 26 Supplemental consolidated balance sheet information related to the Company’s leases was as follows: Weighted Average Remaining Lease Term in years December 31, 2025 December 31, 2024 Operating leases Ground leases - Unimproved at commencement 52.5 54.6 Ground leases - Existing improvements 30.1 31.0 Equipment leases 7.8 5.2 Office Leases 0.1 1.1 All operating leases 44.9 44.6 Finance leases 2.5 1.9 Weighted Average Discount Rate Operating leases Ground leases - Unimproved at commencement 5.79 % 5.45 % Ground leases - Existing improvements 5.18 % 5.18 % Equipment leases 5.51 % 5.46 % Office Leases 4.82 % 4.82 % All operating leases 5.68 % 5.39 % Finance leases 6.75 % 4.98 % The Company’s future minimum lease payments required under leases as of December 31, 2025 were as follows: Year Ending December 31, Operating Leases Finance Leases 2026 $ 7,051 $ 59 2027 8,780 45 2028 10,204 32 2029 10,837 - 2030 10,928 - Thereafter 622,537 - Total lease payments 670,337 136 Less imputed interest ( 480,115 ) ( 11 ) Total $ 190,222 $ 125 64 Table of Contents 10. Leases — Lessor Tenant leases to which the Company is the lessor require the following non-cancelable future minimum lease payments from tenants as of December 31, 2025 : Year Ending December 31, Operating Leases 2026 $ 21,625 2027 15,675 2028 11,053 2029 5,153 2030 3,801 Thereafter 13,382 Total $ 70,689 The amounts presented above exclude tenant variable payments, rental escalations that are not fixed, or future rental revenue from the renewal or replacement of existing tenant leases. Variable payments consist of recoveries from tenants for common area maintenance, utilities, and operating expenses of the property, and various other fees, including fees associated with the delivery of aircraft fuel, late fees, short-term rentals, and lease termination fees. Variable payments are charged based on the terms and conditions included in the respective tenant leases and are recognized in the same period as the expenses are incurred. The table below sets forth a summary of variable payments for the years ended December 31, 2025 and 2024 recorded in the captions within our consolidated statement of operations: Year ended December 31, 2025 December 31, 2024 Variable payments included in rental revenue $ 1,568 $ 887 Variable payments included in fuel revenue 2,766 1,876 Total variable payments included in revenue $ 4,334 $ 2,763 As of December 31, 2025 and December 31, 2024, the deferred rent receivable included in accounts receivable, prepaid expenses, and other assets was approximately $ 1.5 million and $ 0.6 million, 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 was approximately $ 6.5 million and $ 0.4 million as of December 31, 2025 and December 31, 2024, respectively. 65 Table of Contents 11. Bonds payable, loans payable and interest Bonds payable On May 20, 2021, Sky formed a new wholly-owned subsidiary, Sky Harbour Capital LLC, as a parent corporation to its wholly-owned subsidiaries that operate each of the aircraft hangar development sites under its first six ground leases. Sky Harbour Capital LLC and these subsidiaries form an Obligated Group (the “Obligated Group” or the “Borrowers”) under a series of bonds that were issued in September 2021 with a principal amount of $ 166.3 million (the “Series 2021 Bonds”). The members of the Obligated Group are jointly and severally liable under the Series 2021 Bonds. SHG and its other subsidiaries are not members of the Obligated Group and have no obligation to repay the bonds. The Series 2021 Bonds are payable pursuant to a loan agreement dated September 1, 2021 between the Public Finance Authority (of Wisconsin) and the Borrowers. The payments by the Borrowers under the loan agreement are secured by a Senior Master Indenture Promissory Note, Series 2021 - 1 issued by the Obligated Group under an indenture (the “Master Indenture”). The obligations of the Borrowers are collateralized by certain leasehold and sub-leasehold deeds of trust or mortgages on the Borrowers’ interests in the development sites and facilities being constructed at each airport where the Borrowers hold ground leases. In addition, the Borrowers have assigned, pledged and granted a first priority security interest in all funds held under the Master Indenture and all right, title and interest in the gross revenues of the Borrowers. Furthermore, Sky, Sky Harbour Holdings LLC and Sky Harbour Capital LLC have each pledged as collateral its respective ownership interest in any of the Borrowers. The Series 2021 Bonds have principal amounts, interest rates, and maturity dates as follow: $ 21.1 million bearing interest at 4.00 %, due July 1, 2036; $ 30.4 million bearing interest at 4.00 %, due July 1, 2041; and $ 114.8 million bearing interest at 4.25 %, due July 1, 2054. The Series 2021 Bond that has a maturity date of July 1, 2036 was issued at a premium, and the Company received bond proceeds that were $ 0.2 million above its face value. The bond premium is being amortized as a reduction of interest expense over the life of the bond. Interest is payable on each January 1 and July 1, commencing January 1, 2022. Principal repayments due under the Series 2021 Bonds are paid annually, commencing July 1, 2032. The Company was in compliance with all debt covenants as of December 31, 2025. As of December 31, 2025 and December 31, 2024, the fair value of the Company's Series 2021 Bonds was approximately $ 140.8 million and $ 143.8 million, respectively. 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 December 31, 2025 and December 31, 2024 : December 31, 2025 December 31, 2024 Bonds payable: Series 2021 Bonds Principal $ 166,340 $ 166,340 Premium on bonds 249 249 Bond proceeds 166,589 166,589 Debt issuance costs ( 4,753 ) ( 4,753 ) Accumulated amortization of debt issuance costs and accretion bond premium 979 785 Total Bonds payable, net $ 162,815 $ 162,621 66 Table of Contents Tax-Exempt Warehouse Facility On September 4, 2025, Sky Harbour Capital II LLC (“SH Capital II”), an indirect, wholly-owned subsidiary of the Company, entered into a Draw Down Note Purchase And Continuing Covenant Agreement (the “Credit Agreement”), among SH Capital II, the other borrowers party thereto, the lenders party thereto (the “Lenders”) and JPMorgan Chase Bank, N.A., as administrative agent, sole bookrunner and sole lead arranger (“JPMorgan” or “Administrative Agent”). The Credit Agreement provides for, among other things, a term loan facility in an aggregate principal amount of up to $ 200 million (the “Term Loan Facility”) at any one time outstanding. The Term Loan Facility provides for borrowings under the Credit Agreement (the “Loans”) to be made by the Lenders from time to time as requested by SH Capital II. The Lenders will make funds available to the Term Loan Borrowers (as defined below) through the purchase of notes issued by the Issuer (as defined below) pursuant to the Loan and Security Agreement (as defined below) so that the Issuer may fund the Loans to Borrowers. The Loans will mature on September 4, 2030, subject to any extensions by the Lenders. The Term Loan Facility may be increased, subject to credit approval, up to an aggregate principal amount of $ 300 million. The Credit Agreement provides for Loans to be made from time to time by special purpose subsidiaries of SH Capital II (SH Capital II together with the special purpose subsidiaries, the “Term Loan Borrowers”) for the construction and operation of hangar project facilities at various airports (the “Hangar Projects”), subject to customary phased eligibility criteria. Loans will be secured by the real estate underlying the Hangar Projects, pledges of equity interests in the Term Loan Borrowers and certain revenues of the Term Loan Borrowers. Sky Harbour LLC, the Company’s operating company, and Sky Harbour Holdings II LLC, the holding company of SH Capital II, and Sky Harbour Holdings III LLC (“SKYH III”) will guarantee the Term Loan Borrowers’ obligations under the Loans pursuant to a Parent Guarantee and a Holdco Guaranty, respectively. In addition, pursuant to a Non-Recourse Carveout Guaranty, the Company will be required to guarantee the Term Loan Borrowers’ obligations under the Loans in certain limited circumstances such as misconduct by the Term Loan Borrowers or the primary guarantors. In addition, SKYH III has entered into a Pledge and Security Agreement with the Administrative Agent pursuant to which it will pledge its interest in an account ( the “Facility Cash Flow Account”) into which will be deposited amounts received by Sky Harbour LLC from excess revenues released from the Master Trust Indenture (Security Agreement), dated as of August 1, 2021, among Sky Harbour Capital LLC, the Obligated Group, and The Bank of New York Mellon, as master trustee, as amended from time to time and as joined from time to time by additional members as permitted therein (the “Term Loan Master Indenture”). No excess revenues are permitted to be released from the Term Loan Master Indenture until, among other things, substantial completion of the projects financed by the Series 2021 Bonds for the benefit of Obligated Group (the “2021 Projects”). Certain events may disqualify a Hangar Project from further Loans and trigger prepayments such as the cancellation or termination of a construction contract or a ground lease or a material violation of environmental law. The Credit Agreement also has customary and other mandatory prepayment events including the obligation to prepay amounts to bring Company back into compliance with the Leverage Ratio (as defined below). Loans under the Credit Agreement will bear interest at a rate of 80 % of the sum of SOFR and 0.10 %, plus 200 basis points. Interest payments may be capitalized, at the option of the Term Loan Borrowers, during the earlier of (i) the first three years of the Term Loan Facility or (ii) the substantial completion of the hangar projects contemplated by the Series 2021 Bonds. The entire principal amount of the Loans is due on September 4, 2030, unless extended in accordance with the Credit Agreement. Once the outstanding aggregate principal balance of the Loans reaches $ 25 million, the Term Loan Borrowers are obligated, to have hedges on 50 % of the Term Loan Borrowers’ interest rate risk. In accordance with the Credit Agreement, the Term Loan Borrowers have paid an upfront fee equal to 1.50 % of the $ 200 million in Loans commitments. The Credit Agreement also requires the Term Loan Borrowers to pay quarterly commitment fees to the Administrative Agent for the benefit of the secured lenders at the applicable rate per annum set forth below under the caption “Commitment Fee Rate,” based upon the Term Loan Borrowers’ total commitment utilization in effect for each such day during each quarter: Category Total Commitment Utilization Commitment Fee Rate 1 ≥75% 0.35 % 2 <75% but ≥ 50% 0.45 % 3 <50% 0.55 % The Credit Agreement contains customary affirmative and negative covenants for transactions of this type, including maintenance of financial ratios, debt service reserve requirements, restricted payments test and limitations on the sale, lease, or distribution of assets. The Term Loan Borrowers agreed to comply with historical and projected debt service coverage ratios. The Projected Debt Service Coverage Ratio (the “Projected DSCR”) is based principally on projected EBITDA of Hangar Projects that have reached substantial completion (“Hangar Project EBITDA”) minus certain capital expenditure and taxes divided by the debt service for the next four quarters. The Historical Debt Service Coverage Ratio (the “Historical DSCR”) is based on the Hangar Project EBITDA for the previous four quarters minus the sum of certain capital expenditures plus taxes divided by the interest of debt service for the previous four quarters. For this purpose, “EBITDA” is defined to include amounts in the Facility Surplus Account. Additionally, the Term Loan Borrowers agreed to a Leverage Ratio of 65 % (the “Leverage Ratio”). The Leverage Ratio is calculated by dividing total indebtedness of the Term Loan Borrowers by a borrowing base value. The borrowing base value is principally the sum of project costs for the Hangar Projects or, in the case that an existing Hangar Project is used as collateral, net purchase price plus certain reserves established pursuant to the Credit Agreement and financed transaction costs. Commencing three months after the earlier of September 4, 2028 or a trigger date based on substantial completion of certain Hangar Projects, the Term Loan Borrowers are required to maintain (i) the Historical DSCR, or (ii) the Projected DSCR, in each case determined on the last day of each fiscal quarter of the Term Loan Borrowers, at a ratio of less than 1.25 to 1.00. In connection with the Credit Agreement, SH Capital II entered into a Loan and Security Agreement (the “Loan and Security Agreement”), with Public Finance Authority (of Wisconsin) (the “Issuer”), SH Capital II, the other borrowers party thereto, and the Administrative Agent. The Loan and Security Agreement provides for, among other things, the issuance of up to $ 200 million of Sky Harbour Obligated Group II Issue, Series 2025 Notes (the “Series 2025 Notes”). If the Lenders under the Credit Agreement approve an increase in the Term Loan Facility, additional Series 2025 Notes will be issued. The Loan and Security Agreement and the Series 2025 Notes further provide for the Issuer to assign all revenues on the Notes to the Administrative Agent for the benefit of the secured lenders and provide for the incorporation of certain covenants from the Credit Agreement and customary terms and conditions for financings of this type. In October 2025, the Company entered into an interest rate swap (the “Swap Agreement”) for notional amounts of up to $ 200 million, based on predetermined notional schedule agreement as defined in the Swap Agreement. The Swap Agreement effectively fixes the SOFR component of any loans at or below the notional schedule made under the Term Loan Facility at approximately 2.65 %, or 4.73 % inclusive of applicable interest rate spreads, for the five -year term. The fair value of the Swap Agreement was immaterial as of December 31, 2025. As of December 31, 2025, there were no loans outstanding under the Term Loan Facility. 67 Table of Contents Yorkville Promissory Note On December 8, 2025, Sky issued a non-convertible, unsecured promissory note to YA II PN, Ltd., a Cayman Islands exempt limited company, or its registered assigns (“Yorkville”), in the aggregate principal amount of $ 15 million (the “Yorkville Promissory Note”). The issue price for the Yorkville Promissory Note was 100 % of the aggregate principal amount thereof. The Yorkville Promissory Note accrues interest at a rate of 7.75 % per annum (or 18 % upon the occurrence of an event of default) and matures on June 8, 2027. Beginning on July 8, 2026, and continuing on the same day of each of the twelve successive months thereafter, Sky shall repay a portion of the outstanding balance of the Yorkville Promissory Note in amounts equal to $ 1.25 million, with $ 7.5 million and $ 7.5 million due during the years ended December 31, 2026 and 2027, respectively. The obligations of Sky under the Yorkville Promissory Note are guaranteed by the Company pursuant to a separate guaranty agreement between the Company and Yorkville. The Yorkville Promissory Note contains customary representations and warranties by Sky and the Company and customary events of default. The proceeds of the Yorkville Promissory Note may be used for working capital and general corporate purposes. On December 15, 2025, in connection with and pursuant to the Yorkville Promissory Note, the Company issued 50,000 shares of the Company’s Class A Common Stock to Yorkville. Vista Loan and Guaranty Agreement On December 4, 2025, Stratus Building Systems, Inc. (“Stratus”) and Overflow Ltd. (“Overflow”, and together with Stratus, the “Stratus Borrowers”), both indirect, wholly-owned subsidiaries of the Company, entered into a Loan and Security Agreement (the “2025 Vista Loan”) with Vista Bank (“Vista”) to refinance the Stratus Borrowers' maturing term loan with Vista (the “2020 Vista Loan”) and certain of Stratus' equipment loans (the “Refinanced Equipment Loans”) then outstanding. The aggregate principal balance of the 2025 Vista Loan was approximately $ 6.1 million, which can be increased to an aggregate principal balance not to exceed $ 9.5 million beginning December 31, 2026, subject to the Stratus Borrowers meeting a Fixed Charge Coverage Ratio (the “Vista FCCR”) of not less than 1.40 to 1.00 and other customary covenants. In connection with the 2025 Vista Loan, Sky and Vista entered into a guaranty agreement whereby all of the Stratus Borrowers’ obligations under the Vista Loan will be guaranteed by Sky. Prior to January 31, 2027, the 2025 Vista Loan bears monthly interest at a rate of the greater of (i) the sum of the U.S. Prime Rate and 0.25 % or (ii) 5.0 %. Beginning on February 1, 2027, the 2025 Vista Loan will bear fixed interest at a rate of the greater of (i) the sum of the 30 -day term SOFR rate and 2.25 % or (ii) 5.0 %. The 2025 Vista Loan matures December 4, 2035. In connection with the 2025 Vista Loan, the Company recognized an immaterial loss on extinguishment of debt associated with the Refinanced Equipment Loans. Loans Payable and Finance Leases The following table summarizes the Company's loans payable and finance lease liabilities as of December 31, 2025 and December 31, 2024: December 31, 2025 December 31, 2024 Maturity Dates Weighted-Average Interest Rates Balance Weighted-Average Interest Rates Balance 2020 Vista Loan December 2025 - $ - $ 8.43 % $ 7,224 2025 Vista Loan December 2035 7.25 % 6,090 - - Yorkville Promissory Note June 2027 7.75 % 15,000 - - Equipment loans August 2026 - September 2028 3.79 % 9 8.01 % 270 Finance leases August 2026 - July 2027 5.98 % 125 5.00 % 41 Total principal amount of loans payable and finance leases 7.53 % 21,224 8.39 % 7,535 Less: unamortized debt issuance costs ( 680 ) - Total Loans payable and finance leases $ 20,544 $ 7,535 The Company’s contractual principal payments required under its bonds payable and loans payable as of December 31, 2025 was as follows: Year Ending December 31, Contractual Principal Payments 2026 $ 7,613 2027 7,593 2028 98 2029 105 2030 113 Thereafter 171,916 Total $ 187,438 Interest The following table sets forth the details of interest expense: Year ended December 31, 2025 December 31, 2024 Interest $ 7,645 $ 7,655 Commitment fees 357 - Accretion of bond premium and amortization of debt issuance costs 491 201 Total interest incurred 8,493 7,856 Less: capitalized interest ( 7,134 ) ( 7,141 ) Interest expense $ 1,359 $ 715 68 Table of Contents 12. 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. 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 Securities Purchase Agreement (the “2023 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. The Company determined the fair value of its Public Warrants and PIPE Warrants based on the publicly listed trading price as of the valuation date. Accordingly, these warrants are classified as Level 1 financial instruments. 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. No Warrants were exercised during the year ended December 31, 2025. During the year ended December 31, 2024, 262,188 Warrants were exercised, resulting in approximately $ 3.0 million of proceeds. As of December 31, 2025 , 15,798,155 Warrants remain outstanding. The closing price of the Warrants was $ 0.65 and $ 2.92 per warrant on December 31, 2025 and December 31, 2024, respectively. The aggregate fair value of the Warrants was approximately $ 10.3 million and $ 46.1 million as of December 31, 2025 and December 31, 2024, respectively. During the years ended December 31, 2025 and December 31, 2024, the Company recorded an unrealized gain of approximately $ 35.9 million and an unrealized loss of approximately $ 34.5 million, respectively, associated with the change in fair value of the Warrants. 13. Equity Common Equity As of December 31, 2025 , there were 33,989,673 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. Holders of Class A Common Stock and Class B Common Stock are entitled to one vote per share on all matters submitted to the stockholders for their vote or approval. The holders of Class A Common Stock are entitled to receive dividends, as and if declared by the Company’s Board of Directors out of legally available funds. With respect to stock dividends, holders of Class A Common Stock must receive Class A Common Stock. The holders of Class B Common Stock do not have any right to receive dividends other than stock dividends consisting of shares of Class B Common Stock, as applicable, in each case paid proportionally with respect to each outstanding share of Class B Common Stock. At-the-Market Facility On March 27, 2024, the Company entered into an At Market Issuance Sales Agreement (the “ATM Agreement”) with B. Riley Securities, Inc. (“B. Riley”) with respect to an “at the market” offering program (the “ATM Facility”), under which the Company may, from time to time, at its sole discretion, issue and sell through B. Riley, acting as sales agent, up to $ 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. B. Riley will use commercially reasonable efforts consistent with its normal trading and sales practices to sell the shares from time to time, based upon instructions from 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. 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 Stock Purchase Agreement. On December 31, 2025, the Company entered into an Amended and Restated At Market Issuance Sales Agreement (the “A&R ATM Agreement”) with B. Riley and Yorkville Securities, LLC (“Yorkville Securities” and, together with B. Riley, the “Sales Agents”), pursuant to which, among other things, Yorkville Securities was added as an additional sales agent. Pursuant to the A&R ATM Agreement, the Company may offer and sell, from time to time through the Sales Agents, shares of its Class A Common Stock, having an aggregate offering price of up to $ 100.0 million (the “ATM Shares”). The material terms and conditions of the ATM Agreement otherwise remain unchanged. During the year ended December 31, 2025, the Company sold 20,472 shares of Class A Common Stock under the ATM Facility at a weighted-average sales price of $ 13.70 . 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 . As of December 31, 2025, ATM Shares having an aggregate gross sales price of up to approximately $ 98.6 million remain available for issuance under the A&R ATM Agreement. 69 Table of Contents 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 (the “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 The LLC Interests’ ownership in Sky is presented as non-controlling interests within the Equity section of the consolidated balance sheet as of December 31, 2025 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 December 31, 2025 , the LLC interests owned approximately 55.3 % of the Sky Common Units outstanding. 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. 70 Table of Contents 14. Equity Compensation On January 25, 2022, the Company's 2022 Incentive Award Plan (the “2022 Incentive Award Plan”) became effective following approval by the Company's shareholders. The 2022 Incentive Award Plan provides for grants of stock-based compensation awards, including without limitation, non-qualified stock options, incentive stock options, stock appreciation rights, or SARs, restricted stock awards, restricted stock unit awards, incentive unit awards other stock or cash based awards and dividend equivalent awards. Employees, officers, and consultants of the Company or any parent or affiliate, including Sky, or any non-employee director of the Company’s Board of Directors are eligible to receive awards under the 2022 Incentive Award Plan. An aggregate of approximately 6.2 million shares of Class A Common Stock are issuable pursuant to the 2022 Incentive Award Plan. Restricted Stock Units ( “ RSUs ” ) On an annual basis, the Company grants RSUs which have time-based conditions and are classified as equity awards. During the year ended December 31, 2025, the Company granted 437,930 time-based awards at a grant date fair value of $ 11.15 in February 2025 and granted 60,634 time-based awards at a grant date fair value of $ 9.77 in June 2025. During the year ended December 31, 2024, the Company granted 430,002 time-based RSUs to certain employees under the Company’s 2022 Incentive Award Plan at a weighted average grant date fair value of $ 12.33 . The RSUs granted will vest ratably over a four -year period beginning on the first anniversary of the respective grant date and ending on the fourth anniversary of the respective 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 years ended December 31, 2025 and 2024: Number of Shares Weighted-Average Grant Date Fair Value Unvested as of December 31, 2023 871,732 $ 6.65 RSUs Granted 430,002 12.33 RSUs Vested ( 406,042 ) 6.89 RSUs Forfeited ( 6,746 ) 11.71 Unvested as of December 31, 2024 888,946 $ 9.17 RSUs Granted 498,564 10.98 RSUs Vested ( 474,199 ) 9.05 RSUs Forfeited ( 29,558 ) 11.08 Unvested as of December 31, 2025 883,753 $ 10.20 During the years ended December 31, 2025 and 2024, the Company recognized stock compensation expense of approximately $ 4.9 million and $ 3.4 million, respectively, associated with the RSUs within employee compensation and benefits within the consolidated statement of operations. The stock compensation expenses recognized for the year ended December 31, 2025 is inclusive of the recognition of approximately $ 0.7 million of expense associated with the accelerated vesting of unvested RSUs upon the departure of the Company's former Chief Operating Officer. The unrecognized compensation costs associated with all unvested RSUs at December 31, 2025 was approximately $ 7.3 million that is expected to be recognized over a weighted-average future period of 2.5 years. Non-qualified Stock Options ( “ NSOs ” ) During the year ended December 31, 2025, the Company granted to certain employees options to purchase 686,647 shares of Class A Common Stock at an exercise price of $ 11.07 under the Company’s 2022 Incentive Award Plan. During the year ended December 31, 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. All NSOs are valued using a Black -Scholes pricing model. The following tables presents a summary of NSO activity for the years ended December 31, 2025 and 2024: Number of Options Weighted-Average Exercise Price per Option Weighted-Average Grant Date Fair Value Outstanding as of December 31, 2023 - $ - $ - NSOs Granted 438,781 11.63 7.32 NSOs Exercised - - - NSOs Forfeited and expired - - - Outstanding as of December 31, 2024 438,781 $ 11.63 $ 7.32 NSOs Granted 686,647 11.07 6.33 NSOs Exercised - - - NSOs Forfeited and expired - - - Outstanding as of December 31, 2025 1,125,428 $ 11.29 $ 6.72 During the years ended December 31, 2025 and 2024, the Company recognized stock compensation expense of approximately $ 0.8 million and $ 0.3 million, respectively, associated with all NSO awards. The unrecognized compensation costs associated with all unvested NSOs at December 31, 2025 was approximately $ 6.5 million that is expected to be recognized over a weighted-average future period of 7.7 years. Sky Incentive Units The Company recognized equity-based compensation expense relating to awarded equity units of Sky (the “Sky Incentive Units”) of approximately $ 0.1 million and $ 0.2 million for the years ended December 31, 2025, and December 31, 2024, 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, 2025, there was no unrecognized compensation expense associated with the Sky Incentive Units. 71 Table of Contents 15. Income Taxes We are subject to taxation in all jurisdictions in which we operate that impose an income tax on our business activities. The current and deferred federal and state income tax expense was $ 0 for each of the years ended December 31, 2025 and 2024. We adopted ASU 2023 - 09 Income Taxes (Topic 740 ): Improvements To Income Tax Disclosures on a prospective basis beginning with the year ended December 31, 2025. The following table presents required disclosure pursuant to ASU 2023 - 09 and reconciles the U.S. federal statutory tax amount and rate to our actual global effective amount and rate for the year ended December 31, 2025: Year Ended December 31, 2025 Amount Tax Rate Income tax at federal statutory rate $ 7,102 21.0 % State income tax, net of federal taxes - 0.0 % Nontaxable or nondeductible items Unrealized gain on warrants ( 7,530 ) ( 22.3 )% Stock-based compensation 370 1.1 % Change in valuation allowance 175 0.5 % Other adjustments Difference between book and tax capital accounts ( 518 ) ( 1.5 )% Provision to return adjustments 399 1.2 % Effective tax rate $ - 0.0 % 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 is as follows: For the Year Ended December 31, 2024 Income tax benefit at the federal statutory rate of 21% $ ( 11,273 ) State income tax benefit, net of federal benefit ( 183 ) Unrealized loss on warrants 7,248 Stock-based compensation ( 384 ) Income taxed to non-controlling interests 1,465 Other, net ( 379 ) Change in valuation allowance 3,506 Total income tax benefit $ - The Company recorded income tax expense of $ 0 and the effective tax rate was 0.0% for the years ended December 31, 2025 and 2024 . The effective income tax rate for the year ended December 31, 2025 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. 72 Table of Contents Components of the Company’s deferred tax assets at December 31, 2025 and December 31, 2024 are as follows: For the Year Ended December 31, 2025 2024 Deferred tax assets: Amortization $ 22 $ 22 Difference between book and tax capital accounts 95 495 Accounts receivable, prepaid expenses, and other assets - 140 Lease liability 26 9 Net operating loss carryforwards 8,266 7,058 Valuation allowance ( 7,441 ) ( 7,187 ) Total deferred tax assets $ 968 $ 537 Deferred tax liabilities: Long-lived assets ( 920 ) ( 529 ) Right-of-use assets ( 40 ) ( 8 ) Other ( 8 ) - Total deferred tax liabilities $ ( 968 ) $ ( 537 ) Total $ - $ - The realization of deferred tax assets, including net operating loss carryforwards ("NOLs"), is dependent on the generation of future taxable income sufficient to realize the tax deductions, carryforwards, and credits. Valuation allowances on deferred tax assets are recognized if it is determined that it is more likely than not that the asset will not be realized. For the year ended December 31, 2025 , 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, 2025 , we have available federal tax operating loss carryforwards of approximately $ 33.4 million, including approximately $ 1.7 million generated by our legal predecessor prior to the Yellowstone Transaction and $ 7.1 million generated by our subsidiary, Stratus Building Systems. All federal tax operating loss carryforwards arose in tax years subsequent to 2017. Tax operating loss carryovers arising in years after 2017 may be carried forward indefinitely but are only available to offset 80% of future taxable income. We have available state tax operating loss carryforwards of approximately $ 33.4 million, which are available to reduce future state taxable income and would begin to expire in tax year 2040 in various amounts. Utilization of our net operating loss carryforwards may be subject to substantial annual limitations due to the ownership change limitations provided by Section 382 of the Internal Revenue Code, as amended, and similar state provisions. Uncertain Tax Positions We believe that there are no tax positions taken or expected to be taken that would significantly increase or decrease unrecognized tax benefits within 12 months of the reporting date. The federal and state statutes of limitation for assessment of tax liability generally lapse within three years after the date the tax returns are filed. However, income tax attributes that are carried forward, such as net operating loss carryforwards, may be challenged and adjusted by taxing authorities at any time prior to the expiration of the statute of limitations for the tax year in which they are utilized. As of December 31, 2025 , we do not have any open exams; 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. 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; and • 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, 2025 , 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. 73 Table of Contents 16. Earnings (loss) per Share Basic earnings (loss) per share of Class A Common Stock is computed by dividing net income (loss) attributable to SHG by the weighted-average number of shares of Class A Common Stock outstanding during the period. Diluted net income (loss) per share of Class A Common Stock is computed by dividing net income (loss) attributable to SHG, adjusted for the assumed exchange of all potentially dilutive securities, by the weighted-average number of shares of Class A Common Stock outstanding adjusted to give effect to potentially dilutive shares using the treasury stock or if-converted method as appropriate. Shares of the Company’s Class B Common Stock do not participate in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B Common Stock under the two -class method has not been presented. Year Ended December 31, 2025 December 31, 2024 Numerator: Net income (loss) $ 7,321 $ ( 53,683 ) Less: Net loss attributable to non-controlling interests ( 11,497 ) ( 8,452 ) Basic net income (loss) attributable to Sky Harbour Group Corporation shareholders 18,818 ( 45,231 ) Less: Net (loss) attributable to LLC Interests ( 11,497 ) - Diluted net income (loss) attributable to Sky Harbour Group Corporation shareholders $ 7,321 $ ( 45,231 ) Denominator: Based weighted average shares of Class A Common Stock outstanding 33,828 25,742 Effect of dilutive exchange of Class B Common Stock 42,046 - Effect of dilutive exchange of Sky Incentive Units 1,857 - Effect of dilutive restricted stock 43 - Diluted weighted average shares outstanding 77,774 25,742 Earnings (loss) per share of Class A Common Stock – Basic $ 0.56 $ ( 1.76 ) Earnings (loss) per share of Class A Common Stock – Diluted $ 0.09 $ ( 1.76 ) 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): Year Ended December 31, 2025 December 31, 2024 Shares subject to unvested restricted stock units 840 889 Shares issuable upon the exercise of unvested stock options 1,125 439 Shares issuable upon the exercise of Warrants 15,798 15,798 Shares issuable upon the exchange of Class B Common Stock - 42,046 Shares issuable upon the exercise and exchange of Sky Incentive Units 4 2,056 74 Table of Contents 17. Accumulated Other Comprehensive Income (Loss) The following table summarizes the components of Accumulated other comprehensive income (loss): Unrealized gain (loss) on Available-for-sale Securities Total Balance as of December 31, 2023 $ 312 $ 312 Other comprehensive loss before reclassifications 556 556 Amounts reclassified to other (income) expense ( 815 ) ( 815 ) Balance as of December 31, 2024 $ 53 $ 53 Other comprehensive income before reclassifications 70 70 Amounts reclassified to other (income) expense ( 123 ) ( 123 ) Balance as of December 31, 2025 $ - $ - During the years ended December 31, 2025 and December 31, 2024, the Company reported reclassifications of $ 123 and $ 815 respectively, of unrealized gains on available-for-sale securities to net income as a component of other (income) expense. 18. Supplemental Cash Flow Information Supplemental Cash Flow Information The following table summarizes non-cash investing and financing activities: Year ended December 31, 2025 December 31, 2024 Accrued costs of construction, including capitalized interest $ 17,170 $ 15,796 Accrued costs of long-lived assets 401 741 Debt issuance costs and premium amortized to cost of construction 194 201 Debt issuance costs recognized through issuance of Class A Common Stock 450 - The following table summarizes non-cash activities associated with the Company’s operating and finance leases: Year ended December 31, 2025 December 31, 2024 Right-of-use assets obtained in exchange for operating lease liabilities $ 32,151 $ 64,802 Right-of-use assets obtained in exchange for finance lease liabilities 115 - Net increase (decrease) in right-of-use assets and operating lease liabilities due to lease remeasurement 2,314 839 The following table summarizes interest paid: Year ended December 31, 2025 December 31, 2024 Interest paid $ 7,415 $ 7,655 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: Year ended December 31, 2025 December 31, 2024 Cash, beginning of year $ 42,442 $ 60,257 Restricted cash, beginning of year 51,917 12,009 Cash and restricted cash, beginning of year $ 94,359 $ 72,266 Cash, end of year $ 20,718 $ 42,442 Restricted cash, end of year 16,306 51,917 Cash and restricted cash, end of year $ 37,024 $ 94,359 75 Table of Contents 19. 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, 2025, 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. 20. Commitments and Contingencies In addition to the lease payment commitments discussed in Note 10 — Leases — Lessee , the ground leases to which the Company is a party contain covenants that require the Company to conduct construction of hangar facilities on the leased grounds within a certain period and in some cases, to spend a minimum dollar amount. Airport Project Minimum Spend Commitment Timeframe Commitments DVT DVT Phase II $14.6 million of capital improvements. Complete construction within 36 months of receiving all permitting documents. ORL ORL Phase I $30.0 million of capital improvements. Complete minimum spend commitment within 36 months of the effective date of the lease. ORL ORL Phase II $5.0 million of capital improvements. Commence construction within 5 years of effective date of the lease and complete construction within 24 months of construction commencement. POU POU Phase I $25.0 million of capital improvements. Commence construction within 6 months of the issuance of permits and complete construction within 15 months of construction commencement. PWK PWK Phase I None. Commence construction within 6 months of the issuance of permits and complete construction within 18 months of construction commencement. SJC All Phases $8.1 million of capital improvements. Complete minimum spend commitment within 15 years of lease commencement. SLC SLC Phase I $40.0 million of capital improvements. None. TTN TTN Phase I $30.0 million of capital improvements. Complete construction within 36 months of receiving all permitting documents or no later than 48 months after the effective date of the lease. The Company has contracts for construction of the OPF Phase II, BDL Phase I, and POU Phase I projects. The Company may terminate any of the contracts or suspend construction without cause. There are no termination penalties under such construction contracts. In addition to the matters described in this note, the Company is involved in various legal proceedings and claims in the ordinary course of its business. Although the Company cannot predict with certainty the ultimate resolution of these matters, which involve judgements that are inherently subjective, the Company does not expect that the ultimate disposition of such other contingencies or matters will materially affect its financial condition, results of operations, or cash flows. 76 Table of Contents 21. 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 the standard overnight financing rate plus 2 % per annum. As of December 31, 2025, the Company had loaned a total of $ 1.1 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. The effective date of the agreement was September 8, 2021 and the agreement automatically renews annually. The agreement could be terminated without penalty if either party provides 35 days' written notice, or if the aircraft is sold or otherwise disposed of. The Company was charged per flight hour of use along with all direct operating costs. Additionally, the Company also incurred the pro rata share of maintenance, overhead and insurance costs of the aircraft. On July 30, 2025, the Company and Echo Echo, LLC terminated such 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, 2025 , and December 31, 2024, the Company recognized approximately $ 0.5 million and $ 0.4 million of expense, within pursuit and marketing expense under the terms of these agreements. The related liability is included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheet as of December 31, 2025 . Other Relationships For the year ended December 31, 2025 , the Company recognized less than $ 0.1 million 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 $ 0 of expense during the year ended December 31, 2024 for consulting services received from the same company. On June 1, 2025, the Company hired an individual to serve as its head of construction and president of one of its indirect, wholly-owned subsidiaries, Ascend Aviation Services (“Ascend”). Such individual was previously employed by, and continues to hold a financial interest in, a company that provides construction services to the Company (the “General Contractor”). The General Contractor was previously engaged by the Company to serve as general contractor in connection with its SGR and APA Phase I development projects. During the year ended December 31, 2025 the Company incurred $ 9.4 million of construction costs associated with the General Contractor at its APA Phase I project. The General Contractor was also previously engaged by the Company serve as an architectural and engineering consultant in connection with its ADS Phase II development project. During the year ended December 31, 2025 the Company incurred $ 0.1 million of construction costs associated with such services. All such costs are capitalized and included as a component of constructed assets or cost of construction within the consolidated balance sheet as of December 31, 2025. Ascend shares office space, equipment, and various administrative services with the General Contractor. Costs incurred by the General Contractor are allocated between Ascend and the General Contractor and are charged at cost. During the year ended December 31, 2025 the allocated costs from the General Contractor to Ascend were approximately $0.1 million. 77 Table of Contents 22. Subsequent Events Tax-Exempt Warehouse Facility Amendments On January 8, 2026, SH Capital II entered into an amendment (the “Amendment”) to the Credit Agreement. The Amendment amended the Credit Agreement to provide for, among other things, conditions under which surplus funds, as defined in the Amendment (the “Credit Agreement Surplus Funds”), may be released to the Borrowers. Also on January 8, 2026, subsidiaries of the Company that own hangar campuses at CMA and BDL were added to the borrowing base of the Credit Agreement. Subsequently, on January 8, 2026, SH Capital II drew funds of approximately $ 13 million under the Credit Agreement in order to reimburse the Company for prior advances associated with capital expenditures at Bradley International Airport and certain other general corporate purposes. Following this draw, there was approximately $ 187 million in capacity under the Credit Agreement for future borrowings. In addition, SKYH III amended its related guaranty (the “Sky III Guaranty”), and such amendment, the “Sky III Guaranty Amendment”) to provide for, among other things, conditions under which surplus funds arising from amounts received by Sky from excess revenues released from the Master Indenture. Provided certain conditions within the Amendment are met, the Amendment permits the Borrowers to distribute or otherwise transfer such Credit Agreement Surplus Funds to (i) Sky (the “Parent Guarantor”) for the payment of general and administrative expenses of the Parent Guarantor, (ii) the payment of current interest or principal on indebtedness of the Parent Guarantor or indebtedness guaranteed by the Parent Guarantor, (iii) to deposit or transfer such funds into a separate account of an affiliate of the Parent Guarantor as security for the payment of principal of or interest on other indebtedness, or (iv) as a capital contribution of a Borrower for the approved construction and operation of hangar project facilities at various airports (the “Portfolio II Projects”, and such restriction on distributions and transfers the “Permissible Uses”). The Amendment permits the release of the Credit Agreement Surplus Funds beginning on the later of January 1, 2027 or a trigger date based on substantial completion of certain Portfolio II Projects, and requires the Borrowers to maintain (i) a historical debt service coverage ratio, and a (ii) projected debt service coverage ratio, in each case determined on the last day of each fiscal quarter of the Borrowers, at a ratio of not less than 2.00 to 1.00. The Sky III Guaranty Amendment permits the release of excess revenues released from the Master Trust on or after the later of (i) January 1, 2027 and (ii) three ( 3 ) months after the Capitalized Interest End Date provided that (a) there are funds in excess of $ 800,000 on deposit in the accounts for such excess revenues on release date, and (b) to the extent there is a deficiency in any of the accounts under, there are sufficient funds on deposit (in addition to the minimum amount of funds held pursuant to cover such deficiency) and such funds are applied to remedy each such deficiency. The release of excess revenues is also subject to Permissible Uses. The above release conditions are also subject to the customary condition that there not be any default under the Credit Agreement. 2026 Yorkville Promissory Note On January 27, 2026, Sky issued a non-convertible, unsecured promissory note to Yorkville, in the aggregate principal amount of $ 10 million (the “January 2026 Yorkville Promissory Note”). The issue price for the January 2026 Yorkville Promissory Note was 100 % of the aggregate principal amount thereof. The January 2026 Yorkville Promissory Note accrues interest at a rate of 7.75 % per annum (or 18 % upon the occurrence of an event of default) and matures on June 8, 2027. Beginning on July 8, 2026, and continuing on the same day of each of the twelve successive months thereafter, Sky shall repay a portion of the outstanding balance of the January 2026 Yorkville Promissory Note in an amount equal to $ 833,333.33 . The obligations of Sky under the January 2026 Yorkville Promissory Note are guaranteed by the Company pursuant to a separate guaranty agreement between the Company and Yorkville. In connection with and pursuant to the January 2026 Yorkville Promissory Note, the Company agreed to issue 40,000 shares of Class A Common Stock to Yorkville in a registered direct offering. The January 2026 Yorkville Promissory Note contains customary representations and warranties by Sky and the Company and customary events of default. The proceeds of the January 2026 Yorkville Promissory Note may be used for working capital and general corporate purposes. 78 Table of Contents Tax-Exempt Series 2026 Bonds Issuance On February 12, 2026, Sky Harbour Capital III LLC (“Sky Capital III”), an indirect, wholly-owned subsidiary of the Company, completed a $ 150 million financing through the issuance of Revenue Bonds (Sky Harbour Capital III LLC Aviation Facilities Project), Series 2026 (the “Series 2026 Bonds”). The Series 2026 Bonds were issued by the Public Finance Authority of Wisconsin, a multi-jurisdictional conduit issuer (the “Issuer”), pursuant to a Trust Indenture, dated as of January 1, 2026 ( the “Indenture”) and effective as of February 12, 2026, between the Issuer and UMB Bank, N.A., as trustee (the “Series 2026 Bond Trustee”). The proceeds of the Bonds were used to make a loan (the “Loan”) to Sky Capital III pursuant to a Loan Agreement, dated as of February 1, 2026 ( the “Loan Agreement”), between the Issuer and Sky Capital III, and assigned to the Series 2026 Bond Trustee. The Series 2026 Bonds were issued in a limited offering (the “Offering”) pursuant to a Limited Offering Memorandum dated January 29, 2026 ( the “Limited Offering Memorandum”) to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) or accredited investors within the meaning of Rule 501 (a) under the Securities Act. The borrowings under the Loan Agreement are guaranteed (the “Guarantee”) by Sky, and Sky Harbour Holdings IV LLC, a wholly owned subsidiary of Sky (the “Pledgor”). Pursuant to the Indenture, all of the Issuer’s right, title, and interest in the Loan Agreement (except for certain unassigned rights) were assigned to the Series 2026 Bond Trustee. The Series 2026 Bonds are secured by the Loan Agreement and the residual cash flows of certain of the Company’s projects, and payment of the Bonds is structurally subordinate to the Series 2021 Bonds and borrowings under the Term Loan Facility. The Series 2026 Bonds and borrowings under the Loan Agreement bear interest at a rate of 6.00 % per year, payable semi-annually in arrears on January 1 and July 1 of each year, beginning on July 1, 2026. The Series 2026 Bonds are subject to mandatory tender for purchase on January 1, 2031 ( the “Mandatory Tender Date”), and will mature on July 1, 2060, unless earlier exchanged, redeemed or repurchased. On the Mandatory Tender Date, holders will be required to tender their Bonds for purchase at a price equal to 100 % of the principal amount thereof plus accrued interest. Following such mandatory tender, the Bonds may be remarketed at a new interest rate or otherwise refinanced. Accordingly, although the Series 2026 Bonds have a stated final maturity of July 1, 2060, Sky Capital III will be required to refinance or remarket the Series 2026 Bonds on or prior to January 1, 2031. The principal amount of the Loan is $ 150 million. The Company intends to use the proceeds from the Loan, together with other available funds, including draws from the Company’s Term Loan Facility, to (i) finance or refinance, directly or indirectly, all or a portion of the construction, equipping and/or improvement of all or a portion of certain aircraft storage facilities (collectively, the “2026 Projects”); (ii) fund a deposit to the debt service reserve fund for the Series 2026 Bonds; (iii) pay capitalized interest on the Loan through January 1, 2029; and (iv) pay the costs of issuance of the Series 2026 Bonds. The Series 2026 Bonds are subject to (a) optional redemption at the discretion of Sky Capital III at any time on or after January 1, 2030 at a redemption price equal to the principal amount plus a 1% premium and accrued and unpaid interest to the redemption date, (b) mandatory redemption upon the occurrence of a determination of taxability of the Series 2026 Bonds, and (c) mandatory sinking fund redemption beginning in 2056. Sky Capital III expects to meet its payment obligations under the Loan Agreement from funds to the extent available and permitted to be released under the master trust indenture with respect to the Series 2021 Bonds and the Term Loan Facility. Interest is capitalized through January 1, 2029. The Indenture and the Loan Agreement provide for customary events of default, all as described in the Indenture and the Loan Agreement. 79 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES Not applicable.