Sky Harbour Group Corp

Previous wording

Our projections associated with the commencement and completion of construction, estimated total construction cost, hangars, and rentable square footage of our properties in development are inherently subjective and require judgement to estimate. We believe that our estimates of construction costs and timelines are subject to variability based on various factors including, but not limited to, changes in anticipated site plans, hangar mix, hangar specifications, executed guaranteed maximum price construction contracts, and general market conditions. During 2024, we updated many of our preliminary estimates based on our intention to begin incorporating a larger hangar prototype into our home basing hangar campuses, which is intended to provide an increase in rentable square footage of hangar, office, and lounge space upon completion. This larger hangar prototype requires an increase in construction materials and components, and we expect its incorporation into multiple future development projects will ultimately result in cost savings through the realization of economies of scale. Our updated estimates of total construction costs do not include projections of potential cost reductions due to such efficiencies, and we continue to reevaluate our preliminary and updated estimates from time to time over the course of the development lifecycle. We intend to continue to aggressively mitigate inflationary pressures, reduce construction costs to the greatest extent possible, and pursue compressed development schedules. We currently structure our guaranteed maximum price construction contracts with shared savings clauses to incentivize the general contractors to reduce construction costs. No assurance can be given that our cost mitigation strategies will be successful, the costs of our ongoing and future projects will not exceed budgets or the guaranteed maximum price for such projects, or that the completion will not be delayed beyond the projected completion dates.

Current wording

Our projections associated with the commencement and completion of construction, estimated total construction cost, hangars, and rentable square footage of our properties in development are inherently subjective and require judgement to estimate. We believe that our estimates of construction costs and timelines are subject to variability based on various factors including, but not limited to, changes in anticipated site plans, hangar mix, hangar specifications, executed guaranteed maximum price construction contracts, and general market conditions. During 2024 and 2025, we updated many of our preliminary estimates based on our intention to begin incorporating a larger hangar prototype into our home basing hangar campuses, which is intended to provide an increase in rentable square footage of hangar, office, and lounge space upon completion. This larger hangar prototype requires an increase in construction materials and components, and we expect its incorporation into multiple future development projects will ultimately result in cost savings through the realization of economies of scale. Our updated estimates of total construction costs do not include projections of potential cost reductions due to such efficiencies, and we continue to reevaluate our preliminary and updated estimates from time to time over the course of the development lifecycle. We intend to continue to aggressively mitigate inflationary pressures, reduce construction costs to the greatest extent possible, and pursue compressed development schedules. We currently structure our guaranteed maximum price construction contracts with shared savings clauses to incentivize the general contractors to reduce construction costs. No assurance can be given that our cost mitigation strategies will be successful, the costs of our ongoing and future projects will not exceed budgets or the guaranteed maximum price for such projects, or that the completion will not be delayed beyond the projected completion dates.

Previous wording

Rental revenues for the three months ended March 31, 2025 were approximately $4.4 million, compared to approximately $2.1 million for the three months ended March 31, 2024. The $2.3 million, or 109%, increase was primarily the result of operations at CMA, which was acquired during the three months ended December 31, 2024, the commencement of operations at SJC during the three months ended June 30, 2024, and the cumulative impact of increased occupancy at our BNA and OPF hangar campuses.

Current wording

Rental revenues for the three months ended June 30, 2025 were approximately $5.2 million, compared to approximately $3.2 million for the three months ended June 30, 2024. The $2.0 million, or 65%, increase was primarily the result of operations at CMA, which was acquired during the three months ended December 31, 2024 and the cumulative impact of increased occupancy at our BNA, OPF, and SJC hangar campuses.

Previous wording

Fuel revenues for the three months ended March 31, 2025 were approximately $1.1 million, compared to approximately $0.3 million for the three months ended March 31, 2024. The approximately $0.8 million, or 326%, increase was primarily the result of fuel sales at our CMA hangar campus, where our fuel revenues and related expenses are recognized on a gross basis.

Current wording

Fuel revenues for the three months ended June 30, 2025 were approximately $1.3 million, compared to approximately $0.4 million for the three months ended June 30, 2024. The approximately $0.9 million, or 207%, increase was primarily the result of fuel sales at our CMA hangar campus, where our fuel revenues and related expenses are recognized on a gross basis.

Previous wording

Campus operating expenses increased approximately $1.1 million, or 142%, from approximately $0.8 million for the three months ended March 31, 2024, to approximately $1.9 million for the three months ended March 31, 2025. Salaries, wages, and benefits associated with our hangar campus personnel increased approximately $0.6 million, primarily driven by headcount increases in anticipation of the commencement of operations at our DVT, APA, and ADS hangar campuses, the acquisition of a hangar campus at CMA during December 2024, and the commencement of operations at our SJC hangar campus in April 2024. Other campus operating expenses increased approximately $0.5 million, primarily driven by increased insurance, property taxes, and utilities associated with operations at CMA and SJC, where our operations commenced in December 2024 and April 2024, respectively.

Current wording

Campus operating expenses increased approximately $1.2 million, or 122%, from approximately $1.0 million for the three months ended June 30, 2024, to approximately $2.2 million for the three months ended June 30, 2025. Salaries, wages, and benefits associated with our hangar campus personnel increased approximately $0.6 million, primarily driven by headcount increases in anticipation of the commencement of operations at our DVT, APA, and ADS hangar campuses and the acquisition of a hangar campus at CMA during December 2024. Other campus operating expenses increased approximately $0.6 million, primarily driven by increased insurance, property taxes, and utilities associated with operations at CMA and SJC, where our operations commenced in December 2024 and April 2024, respectively.

Previous wording

Fuel expenses for the three months ended March 31, 2025 were approximately $0.7 million, compared to approximately $0.1 million for the three months ended March 31, 2024. The approximately $0.6 million, or 906%, increase was primarily the result of the CMA Transaction during the three months ended December 31, 2024, and the related impact of recognizing certain fuel revenue and expenses on a gross basis.

Current wording

Fuel expenses for the three months ended June 30, 2025 were approximately $0.9 million, compared to approximately $0.1 million for the three months ended June 30, 2024. The approximately $0.8 million, or 1,026%, increase was primarily the result of our acquisition of CMA during the three months ended December 31, 2024, and the related impact of recognizing certain fuel revenue and expenses on a gross basis.

Previous wording

Depreciation and amortization increased approximately $0.5 million, or 75%, for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The increase was primarily driven by our acquisition of a hangar campus at CMA during the three months ended December 31, 2024 .

Current wording

Depreciation and amortization increased approximately $0.8 million, or 130%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. The increase was primarily driven by our acquisition of a hangar campus at CMA during the three months ended December 31, 2024 and the commencement of operations at our DVT campus during the three months ended June 30, 2025.

Previous wording

Pursuit and marketing expenses for the three months ended March 31, 2025 were approximately $0.6 million, compared to approximately $0.4 million for the three months ended March 31, 2024. The approximately $0.2 million, or 64%, increase was primarily the result of investment in our growth strategy in securing airport site acquisitions and potential tenants throughout the year.

Current wording

Pursuit and marketing expenses for the three months ended June 30, 2025 were approximately $0.6 million, compared to approximately $0.4 million for the three months ended June 30, 2024. The approximately $0.2 million, or 57%, increase was primarily the result of investment in our growth strategy in securing airport site acquisitions and potential tenants throughout the year.

Previous wording

Employee compensation and benefits expenses increased approximately $0.7 million, or 18%, to $4.2 million for the three months ended March 31, 2025, as compared to approximately $3.6 million for the three months ended March 31, 2024. The increase was primarily driven by an increase in corporate headcount and expense recognized associated with our equity compensation programs. Headcount and compensation expenses increased approximately $0.5 million, and non-cash equity compensation expense increased approximately $0.2 million.

Current wording

Employee compensation and benefits expenses increased approximately $0.9 million, or 26%, to $4.3 million for the three months ended June 30, 2025, as compared to approximately $3.4 million for the three months ended June 30, 2024. The increase was primarily driven by an increase in corporate headcount and expense recognized associated with our equity compensation programs. Headcount and compensation expenses increased approximately $0.7 million, and non-cash equity compensation expense increased approximately $0.2 million.

Previous wording

For the three months ended March 31, 2025 and 2024, other general and administrative expenses were approximately $1.1 million and approximately $1.0 million, respectively. The approximately $0.1 million increase was primarily driven by slight increases in professional fees and technology costs due to the expansion of the business and headcount, offset by a slight decrease in corporate insurance premiums.

Current wording

For the three months ended June 30, 2025 and 2024, other general and administrative expenses were approximately $1.0 million and approximately $0.8 million, respectively. The approximately $0.2 million increase was primarily driven by slight increases in professional fees and technology costs due to the expansion of the business and headcount, offset by a slight decrease in corporate insurance premiums.

Previous wording

Ground lease expenses increased approximately $1.7 million, or 136%, from approximately $1.2 million for the three months ended March 31, 2024, to approximately $2.9 million for the three months ended March 31, 2025. The increase in ground lease expense was driven primarily by expense recognized associated with the ground and hangar lease signed at SJC during the three months ended March 31, 2024. The increase in ground lease expense was also driven by the ground leases signed at ORL during the three months ended March 31, 2024, IAD during the three months ended June 30, 2024, SLC during the three months ended September 30, 2024, and the ground leases assumed as part of the CMA Transaction during the three months ended December 31, 2024.

Current wording

Ground lease expenses increased approximately $3.0 million, or 86%, from approximately $3.5 million for thesix months ended June 30, 2024, to approximately $6.5 million for thesix months ended June 30, 2025. The increase in ground lease expense was driven primarily by expense recognized associated with the ground lease signed at IAD during the three months ended June 30, 2024, SLC during the three months ended September 30, 2024, the ground leases assumed as part of the CMA Transaction during the three months ended December 31, 2024, and the ground leases signed at SWF and HIO during the three months ended June 30, 2025.

Previous wording

Other expense decreased from approximately $16.0 million of expense for the three months ended March 31, 2024, to approximately $2.3 million of expense for the three months ended March 31, 2025. This decrease was primarily due to an approximately $13.7 million difference in the mark-to-market adjustment of the outstanding warrants at March 31, 2025 as compared to March 31, 2024.

Current wording

Other income increased from approximately $6.9 million of expense for thesix months ended June 30, 2024, to approximately $19.6 million of income for thesix months ended June 30, 2025. This increase was primarily due to an approximately $27.2 million difference in the mark-to-market adjustment of the outstanding warrants at June 30, 2025 as compared to June 30, 2024.

Previous wording

We believe that we have access to multiple sources of capital to fund our long-term liquidity requirements, including the incurrence of additional private activity bonds and other debt and the issuance of additional equity securities. We also have the ability to utilize our ATM Facility or otherwise utilize our shelf registration statement on Form S-3 to access the capital markets. However, as we have recently become a publicly-traded company, we cannot assure you that we will have access to these sources of capital or that, even if such sources of capital are available, that these sources of capital will be available on favorable terms. Our ability to incur additional debt will depend on multiple factors, including our degree of leverage, the value of our unencumbered assets and borrowing restrictions that are or may be imposed by future lenders. Our ability to access the equity and debt capital markets will depend on multiple factors as well, including general market conditions for real estate companies, our degree of leverage, the trading price of our common stock and debt and market perceptions about our Company.

Current wording

We believe that we have access to multiple sources of capital to fund our long-term liquidity requirements, including the incurrence of additional private activity bonds and other debt and the issuance of additional equity securities. We also have the ability to utilize our ATM Facility (as defined below) or otherwise utilize our shelf registration statement on Form S-3 to access the capital markets. However, as we have recently become a publicly-traded company, we cannot assure you that we will have access to these sources of capital or that, even if such sources of capital are available, that these sources of capital will be available on favorable terms. Our ability to incur additional debt will depend on multiple factors, including our degree of leverage, the value of our unencumbered assets and borrowing restrictions that are or may be imposed by future lenders. Our ability to access the equity and debt capital markets will depend on multiple factors as well, including general market conditions for real estate companies, our degree of leverage, the trading price of our common stock and debt and market perceptions about our Company.

Previous wording

On March 27, 2024, we entered into an At Market Issuance Sales Agreement (the “ATM Agreement”) with B. Riley Securities, Inc. (“B. Riley”) with respect to an “at the market” offering program (the “ATM Facility”), under which we may, from time to time, at our sole discretion, issue and sell through B. Riley, acting as sales agent, up to $100 million of shares of Class A Common Stock. Pursuant to the ATM Agreement, we may sell the shares through B. Riley by any method permitted that is deemed an “at the market” offering as defined in Rule 415 under the Securities Act. B. Riley will use commercially reasonable efforts consistent with its normal trading and sales practices to sell the shares from time to time, based upon instructions from us, including any price or size limits or other customary parameters or conditions we may impose. We will pay B. Riley a commission of 3.0% of the gross sales price per share sold under the ATM Agreement, subject to certain reductions. During the three months ended March 31, 2025, we sold no shares of Class A Common Stock under the ATM Facility. During the twelve months ended December 31, 2024, we sold 79,676 shares of Class A Common Stock under the ATM Facility at a weighted-average sales price of $13.75. As a result, we have approximately $98.9 million in remaining capacity under our ATM Facility.

Current wording

On March 27, 2024, we entered into an At Market Issuance Sales Agreement (the “ATM Agreement”) with B. Riley Securities, Inc. (“B. Riley”) with respect to an “at the market” offering program (the “ATM Facility”), under which we may, from time to time, at our sole discretion, issue and sell through B. Riley, acting as sales agent, up to $100 million of shares of Class A Common Stock. Pursuant to the ATM Agreement, we may sell the shares through B. Riley by any method permitted that is deemed an “at the market” offering as defined in Rule 415 under the Securities Act. B. Riley will use commercially reasonable efforts consistent with its normal trading and sales practices to sell the shares from time to time, based upon instructions from us, including any price or size limits or other customary parameters or conditions we may impose. We will pay B. Riley a commission of 3.0% of the gross sales price per share sold under the ATM Agreement, subject to certain reductions. During the three and six months ended June 30, 2025, we sold 20,472 shares of Class A Common Stock under the ATM Facility at a weighted-average sales price of $13.70. During the twelve months ended December 31, 2024, we sold 79,676 shares of Class A Common Stock under the ATM Facility at a weighted-average sales price of $13.75. As a result, we have approximately $98.6 million in remaining capacity under our ATM Facility.

Previous wording

The following table summarizes our sources and uses of cash for the three months ended March 31, 2025 and 2024 (in thousands):

Current wording

The following table summarizes our sources and uses of cash for thesix months ended June 30, 2025 and 2024 (in thousands):

Previous wording

Cash provided by operating activities is significantly influenced by the amount of cash we invest in personnel and infrastructure to support the anticipated growth of our business. Our working capital consists primarily of cash, receivables from tenants, prepaid expenses, accounts payable, accrued compensation, accrued other expenses, and lease liabilities. The timing of collection of our tenant receivables, and the timing of spending commitments and payments of our accounts payable, accrued expenses, accrued payroll and related benefits, all affect these account balances.

Current wording

Cash used in operating activities is significantly influenced by the amount of cash we invest in personnel and infrastructure to support the anticipated growth of our business. Our working capital consists primarily of cash, receivables from tenants, prepaid expenses, accounts payable, accrued compensation, accrued other expenses, and lease liabilities. The timing of collection of our tenant receivables, and the timing of spending commitments and payments of our accounts payable, accrued expenses, accrued payroll and related benefits, all affect these account balances.

Previous wording

Net cash used in operating activities was approximately $5.0 million for the three months ended March 31, 2025, as compared to cash used in operating activities of approximately $4.4 million for the same period in 2024. The $0.6 million increase in cash used in operating activities was primarily attributable to an approximately $0.5 million increase in net loss, net of non-cash adjustments and an approximately $0.1 million unfavorable change in working capital. The increase in net loss, net of non-cash adjustments was primarily driven by the impact of increases in headcount at both the corporate and hangar campus level, including start-up expenses incurred in anticipation of commencing operations at DVT, APA, and ADS. The unfavorable change in working capital was primarily driven by the timing of spending commitments and payments of our accounts payable and other accrued expenses.

Current wording

Net cash used in operating activities was approximately $6.0 million for thesix months ended June 30, 2025, as compared to cash used in operating activities of approximately $5.5 million for the same period in 2024. The $0.5 million increase in cash used in operating activities was primarily attributable to an approximately $2.1 million increase in net loss, net of non-cash adjustments and an approximately $1.6 million favorable change in working capital. The increase in net loss, net of non-cash adjustments was primarily driven by the impact of increases in headcount at both the corporate and hangar campus level, including start-up expenses incurred in anticipation of commencing operations at DVT, APA, and ADS. The favorable change in working capital was primarily driven by the timing of collections of accounts receivable as well as spending commitments and payments of our accounts payable and other accrued expenses.

Previous wording

Net cash used in investing activities was approximately $4.5 million for the three months ended March 31, 2025, as compared to cash provided by investing activities of approximately $33.9 million for the same period in 2024. The decrease of approximately $38.4 million of cash provided by investing activities was driven primarily by a decrease in proceeds received from held-to-maturity investments of approximately $68.0 million and an increase of capital expenditures of approximately $14.3 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. These impacts were offset by an approximately $44.8 million decrease in purchases of available for sale investments.

Current wording

Net cash used in investing activities was approximately $54.8 million for thesix months ended June 30, 2025, as compared to cash provided by investing activities of approximately $54.5 million for the same period in 2024. The decrease of approximately $109.3 million of cash provided by investing activities was driven primarily by a decrease in proceeds received from held-to-maturity investments of approximately $69.1 million, an increase of capital expenditures of approximately $27.0 million, and an approximately $12.4 million increase in purchases of available for sale investments for thesix months ended June 30, 2025 as compared to the six months ended June 30, 2024.

Previous wording

Net cash used in financing activities was approximately $1.2 million for the three months ended March 31, 2025, as compared to net cash provided by financing activities of approximately $0.3 million for the same period in 2024. The approximately $1.5 million increase in net cash used in financing activities was primarily driven by a decrease of $1.5 million in proceeds received from the exercise of Warrants during the three months ended March 31, 2024.

Current wording

Net cash used in financing activities was approximately $1.5 million for thesix months ended June 30, 2025, as compared to net cash provided by financing activities of approximately $1.0 million for the same period in 2024. The approximately $2.5 million increase in net cash used in financing activities was primarily driven by a decrease of $3.0 million in proceeds received from the exercise of Warrants during the six months ended June 30, 2024.