Sky Harbour Group Corp

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

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.

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.

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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 thanone 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 Skynot 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* mayat times exceed the Federal Deposit Insurance Corporation limit. To date, the Company hasnot* 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 anyone entity. The Company classifies all highly liquid investments, with the exception of U.S. Treasury securities, purchased with an original maturity ofthree months or less as cash or restricted cash.

Pursuant to the Company’s bond offering described in Note11 — 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.

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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 Level1 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 thannot 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 Series2021 Bonds, as defined in Note11 — 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 Level1 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 doesnot believe the unrealized losses represent impairments because the unrealized losses are due to general market factors. The Company hasnot recognized an allowance for expected credit losses related to its investments or restricted investments as the Company hasnot identified any unrealized losses attributable to credit factors during the years ended* December 31, 2025and December 31, 2024.The Company has the ability and intent to hold these restricted investments until maturity, and as a result, the Company wouldnot* 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.

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Leases

The Company accounts for leases under Accounting Standards Codification (“ASC”) Topic842, Leases. The Company determines whether a contract contains a lease at the inception of the contract. ASC Topic842 requires lessees to recognize lease liabilities and right-of-use (“ROU”) assets for all operating leases with terms of more than12 months on the consolidated balance sheets. The Company has made an accounting policy election tonot recognize leases with an initial term of12 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 tonot separate lease and non-lease components for all underlying asset classes. The Company hasnot 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 Topic842. 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 donot 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 arenot fixed or in-substance fixed payments. These variable payments werenot material in amount for both of the years ended* December 31,*2025 and2024. 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 Note17 — 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 the2023 Purchase Agreement (as defined in Note12** —Warrants) in accordance with the guidance contained in ASC Topic815, “Derivatives and Hedging” (“ASC815”), under which warrants that donot 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 Topic820, 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 Topic820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value intothree levels: Level1 – quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities; Level2 – quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that arenot active or other inputs that are observable or can be corroborated by observable market data; and Level3 – unobservable inputs that are supported by little orno market activity and that are significant to the fair value of the assets and liabilities. The fair value hierarchy gives the highest priority to Level1 inputs and the lowest priority to Level3 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 Level2 and3 inputs in determining the fair value of financial and non-financial assets and liabilities. Accordingly, fair value estimates* maybe different than the amounts that may*ultimately be realized upon sale or disposition of these assets or settlement of these liabilities.

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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 Topic805, Business Combinations, an acquisition doesnot 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 isnot 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 Topic805, 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 tothird 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* mayhave 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 areno* options given to the lessee to purchase the underlying assets.

Rental revenue is recognized in accordance with ASC842 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 isnot probable, the Company recognizes any difference between revenue amounts recognized to date under ASC842 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 and2024, the Company didnot derive10% 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.

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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, arenot 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 wasnot 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 thannot that a tax benefit willnot 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 Note14 — 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 (Topic740*)*

In* December 2023,the FASB issued ASUNo.* 2023-09, Income Taxes (Topic740*): Improvements to Income Tax Disclosures*. The amendments in this update applied to all entities that are subject to Topic740,** 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 ASU2023*-09 effective* January 1, 2025.*

Recently Issued Accounting Pronouncements

Disaggregation of Income Statement Expenses (Subtopic220*-40)*

In* November 2024,the FASB issued ASUNo.* 2024-03, Income Statement — Reporting Comprehensive Income: Expense Disaggregation Disclosures (Subtopic220*-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 (Topic270*)*

In* December 2025,the FASB issued ASUNo.* 2025-11, Interim Reporting (Topic270*): Narrow-Scope Improvements*. This ASU intends to improve the navigability of the guidance in ASC270, Interim Reporting (“ASC270”), 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.

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Camarillo Acquisition

On* December 6, 2024 (the “CMA Closing Date”), the Company, throughtwo* wholly-owned subsidiaries of Sky, completed the acquisition of CloudNine at Camarillo LP (“CloudNine”), a California limited partnership, and Sky805 LLC (“Sky805”), 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 Sky805 Holdings LLC, a Delaware limited liability company and wholly-owned subsidiary of Sky, is the sole member of Sky805.

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 Sky805, which werenot legally assumed by the Company. The Company didnot 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:

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. Sky805 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 Sky805's obligations under the CMA Leases in connection with the Camarillo Acquisitions. The CMA Leases pertain tofour 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.

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The following tables are summaries of the amortized cost, unrealized gains, unrealized losses, and fair value by investment type as of* December 31, 2025and December 31, 2024:*

The following table sets forth the maturity profile of the Company's investments and restricted investments as of* December 31, 2025:*

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

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 and2024 totaled approximately $4.9 million and $1.9 million, respectively.

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

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 and2024 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, 2025and 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 arenot being depreciated as the assets havenot been placed into service.

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Lease intangible assets, net, consists of the following:

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 and2024 totaled approximately $0.3 million and less than $0.1 million, respectively.

Estimated amortization of the respective intangible lease assets as of* December 31, 2025for each of thefive* succeeding years and thereafter is as follows:

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

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The table below summarizes operating lease expense for the years ended* December 31, 2025and December 31, 2024*recorded in the captions within our consolidated statement of operations:

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 between2044 and2097, 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 approximately7* 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 betweentwo* parcels, with rent payments associated with thefirst parcel (“IAD Phase I”) commencing the earlier of certificate of occupancy or36 months from the issuance of permits for IAD Phase I, and rent payments associated with thesecond parcel (“IAD Phase II”) commencing the earlier of issuance of permits for IAD Phase II orfive years from certificate of occupancy associated with IAD Phase I. The IAD Lease requires the Company to commence construction related to IAD Phase II withinfive 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 or24* 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 containstwo 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 or36* 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 approximately1* 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.

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

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

The Company’s future minimum lease payments required under leases as of* December 31,*2025 were as follows:

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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:

The amounts presented above exclude tenant variable payments, rental escalations that arenot 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, 2025and2024* recorded in the captions within our consolidated statement of operations:

As of* December 31, 2025and 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, 2025and December 31, 2024,*respectively.

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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 itsfirst* 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 2021with a principal amount of $166.3 million (the “Series2021* Bonds”). The members of the Obligated Group are jointly and severally liable under the Series2021 Bonds. SHG and its other subsidiaries arenot members of the Obligated Group and haveno obligation to repay the bonds.

The Series2021 Bonds are payable pursuant to a loan agreement dated* September 1, 2021between 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, Series2021*-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 afirst 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 Series2021 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 Series2021* Bond that has a maturity date of* July 1, 2036was 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 1and July 1,commencing January 1, 2022.Principal repayments due under the Series2021* 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, 2025and December 31, 2024,the fair value of the Company's Series2021* Bonds was approximately $140.8 million and $143.8 million, respectively. The fair value of the Company's bonds is estimated utilizing Level2 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:

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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 anyone* 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* mayfund 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 Series2021* 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* maybe capitalized, at the option of the Term Loan Borrowers, during the earlier of (i) thefirst* three years of the Term Loan Facility or (ii) the substantial completion of the hangar projects contemplated by the Series2021 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:

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 nextfour quarters. The Historical Debt Service Coverage Ratio (the “Historical DSCR”) is based on the Hangar Project EBITDA for the previousfour quarters minus the sum of certain capital expenditures plus taxes divided by the interest of debt service for the previousfour 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. Commencingthree months after the earlier of* September 4, 2028or 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 to1.00.*

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, Series2025 Notes (the “Series2025 Notes”). If the Lenders under the Credit Agreement approve an increase in the Term Loan Facility, additional Series2025 Notes will be issued. The Loan and Security Agreement and the Series2025 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 thefive-year term. The fair value of the Swap Agreement was immaterial as of December 31, 2025.*

As of* December 31, 2025,there wereno* loans outstanding under the Term Loan Facility.

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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 thetwelve* 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, 2026and2027,* 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 the2025 Vista Loan was approximately $6.1 million, which can be increased to an aggregate principal balancenot to exceed $9.5 million beginning* December 31, 2026,subject to the Stratus Borrowers meeting a Fixed Charge Coverage Ratio (the “Vista FCCR”) ofnot* less than 1.40 to1.00 and other customary covenants. In connection with the2025 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,the2025* 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,the2025* Vista Loan will bear fixed interest at a rate of the greater of (i) the sum of the30-day term SOFR rate and 2.25% or (ii)5.0%. The2025 Vista Loan matures* December 4, 2035.*

In connection with the2025 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, 2025and December 31, 2024:*

The Company’s contractual principal payments required under its bonds payable and loans payable as of* December 31,*2025 was as follows:

Interest

The following table sets forth the details of interest expense:

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SHG's legal predecessor, Yellowstone Acquisition Company (“YAC”) issued tothird-party investors 6,799,439 warrants which entitled the holder to purchaseone 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 purchaseone 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, 2023with certain investors, the Company issued tothird*-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 Level1* 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 Level2 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.

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 toone 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 donot 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 maysell the shares through B. Riley by any method permitted that is deemed an “at the market” offering as defined in Rule415* 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 isnot 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, 2022through March 27, 2024,the Company hadnot* 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.

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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 “Initial2024 Investors”), pursuant to which the Company agreed to sell and issue to the Initial2024 Investors at an initial closing an aggregate of 3,352,106 shares (the “Initial2024 PIPE Shares”) of the Company’s Class A Common Stock for an aggregate purchase price of approximately $31.8 million (the “Initial2024 Closing”), and agreed to sell and issue to the Initial2024 Investors at asecond closing, at the option of the Initial2024 Investors, up to an aggregate of number of shares equal to the number of each such Initial2024 Investor's Initial2024 PIPE Shares purchased in the Initial2024 Closing at the same purchase price of $9.50 per share (the “Second2024 Closing” and, together with the Initial Closing, the*“2024* Financing”).

The2024 Purchase Agreement provided that, at any time prior to the Initial2024 Closing, and at the sole discretion of the Company, additional investors (the “Additional2024 Investors” and, together with the Initial2024 Investors, the*“2024* Investors”) could execute a joinder to the2024 Purchase Agreement pursuant to which they would agree to purchase additional shares of Class A Common Stock (the “Additional2024 PIPE Shares”) in the Initial2024 Closing, along with the option to purchase Second Closing2024 PIPE Shares.

On* October 25, 2024,the Additional2024* Investors each executed a joinder to the2024 Purchase Agreement, pursuant to which the Additional2024 Investors agreed to purchase, and the Company agreed to sell, an aggregate of 603,684 Additional2024 PIPE Shares (together with the Initial2024 PIPE Shares, the “First Closing2024 PIPE Shares”) for an aggregate purchase price of $5.7 million. The Initial2024 Closing of the2024 Financing occurred on* October 25, 2024,and 3,955,790 First Closing2024* PIPE Shares were issued to the2024 Investors for an aggregate purchase price of $37.6 million, on* October 25, 2024 (the “Initial2024* Closing Date”).

On* December 20, 2024,pursuant to the terms of the2024* Purchase Agreement, the Company sold and issued to the2024 Investors an aggregate of 3,955,790 shares (the “Second Closing2024 PIPE Shares” and, together with the First Closing2024 PIPE Shares, the*“2024* PIPE Shares”) of Class A Common Stock for an aggregate purchase price of approximately $37.6 million (the “Second2024 Closing”). Inclusive of the Initial2024 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 the2024 Purchase Agreement.

The2024 Purchase Agreement includes certain covenants, including a limitation on the Company’s use of the net proceeds from the2024 Financing and a restriction on the Company’s issuance of additional shares of Class A Common Stock for a period of90 days following the Initial2024 Closing Date, subject to certain exceptions. The2024 PIPE Shares were offered and sold in transactions exempt from registration under the Securities Act, in reliance on Section4(a)(2) thereof and Rule506 of Regulation D thereunder. In connection with the2024 Financing, the2024 Investors entered into a customary lock-up agreement that restricts sales of shares of Class A Common Stock by the2024 Investors for a period ofsix months beginning on the Initial2024 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 mayexchange Sky Common Units along with an equal number of Class B Common Shares, for Class A Common Shares on the Company. The LLC Interests donot* 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 forno* consideration.

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On* January 25, 2022,the Company's2022* Incentive Award Plan (the*“2022* Incentive Award Plan”) became effective following approval by the Company's shareholders. The2022 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 the2022 Incentive Award Plan. An aggregate of approximately 6.2 million shares of Class A Common Stock are issuable pursuant to the2022 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 2025and 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’s2022* Incentive Award Plan at a weighted average grant date fair value of $12.33. The RSUs granted will vest ratably over afour-year period beginning on thefirst anniversary of the respective grant date and ending on thefourth 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, 2025and2024:*

During the years ended* December 31,2025 and2024, 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, 2025is 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’s2022* 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's2022* Incentive Award Plan. The NSOs vest ratably over afour-year period beginning on thesixth 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, 2025and2024:*

During the years ended* December 31, 2025and2024,* 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 wasno unrecognized compensation expense associated with the Sky Incentive Units.

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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, 2025and2024.*

We adopted ASU2023-09 Income Taxes (Topic740*): 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 ASU2023*-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:*

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:

The Company recorded income tax expense of $0 and the effective tax rate was 0.0% for the years ended* December 31,2025 and2024. 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 thannot that the deferred tax assets willnot be realized.

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Components of the Company’s deferred tax assets at* December 31,2025 and December 31,*2024 are as follows:

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 thannot that the asset willnot 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 to2017. Tax operating loss carryovers arising in years after2017 * maybe carried forward indefinitely but are only available to offset80% 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 year2040 in various amounts. Utilization of our net operating loss carryforwards* maybe subject to substantial annual limitations due to the ownership change limitations provided by Section382* of the Internal Revenue Code, as amended, and similar state provisions.

Uncertain Tax Positions

We believe that there areno tax positions taken or expected to be taken that would significantly increase or decrease unrecognized tax benefits within12 months of the reporting date.

The federal and state statutes of limitation for assessment of tax liability generally lapse withinthree years after the date the tax returns are filed. However, income tax attributes that are carried forward, such as net operating loss carryforwards,* maybe 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 donot 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 Interests85% 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.

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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 donot participate in the earnings or losses of the Company and are thereforenot participating securities. As such, separate presentation of basic and diluted earnings per share of Class B Common Stock under thetwo-class method hasnot been presented.

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):

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The following table summarizes the components of Accumulated other comprehensive income (loss):

During the years ended* December 31, 2025and 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.

Supplemental Cash Flow Information

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

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

The following table summarizes interest paid:

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:

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The Company hasone 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.

In addition to the lease payment commitments discussed in Note10 —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.

The Company has contracts for construction of the OPF Phase II, BDL Phase I, and POU Phase I projects. The Company* mayterminate any of the contracts or suspend construction without cause. There areno* 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 doesnot expect that the ultimate disposition of such other contingencies or matters will materially affect its financial condition, results of operations, or cash flows.

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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 Sky805,* 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 thestandard 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 BaronG58* aircraft. The effective date of the agreement was* September 8, 2021and the agreement automatically renews annually. The agreement could be terminated without penalty if either party provides35* 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 EpicE1000GX* aircraft. The effective date of the agreement was* August 30, 2024and the agreement automatically renews annually. The agreement can be terminated without penalty if either party provides30* 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, 2021and 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 ofone* 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, 2025the 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, 2025the 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.

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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”), maybe 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, 2027or 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 ofnot* less than 2.00 to1.00.

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 therenot 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 2026Yorkville Promissory Note”). The issue price for the January 2026*Yorkville Promissory Note was 100% of the aggregate principal amount thereof.

The* January 2026Yorkville 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 thetwelve* successive months thereafter, Sky shall repay a portion of the outstanding balance of the* January 2026Yorkville Promissory Note in an amount equal to $833,333.33. The obligations of Sky under the January 2026Yorkville 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 2026Yorkville Promissory Note, the Company agreed to issue 40,000 shares of Class A Common Stock to Yorkville in a registered direct offering. The January 2026Yorkville Promissory Note contains customary representations and warranties by Sky and the Company and customary events of default. The proceeds of the January 2026Yorkville Promissory Note may*be used for working capital and general corporate purposes.

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Tax-Exempt Series2026* 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), Series2026* (the “Series2026 Bonds”). The Series2026 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 “Series2026* 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 Series2026* Bond Trustee. The Series2026 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 Rule144A* under the Securities Act of1933, as amended (the “Securities Act”) or accredited investors within the meaning of Rule501(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 Series2026 Bond Trustee. The Series2026 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 Series2021 Bonds and borrowings under the Term Loan Facility.

The Series2026 Bonds and borrowings under the Loan Agreement bear interest at a rate of 6.00% per year, payable semi-annually in arrears on* January 1and July 1of each year, beginning on July 1, 2026.The Series2026* 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 maybe remarketed at a new interest rate or otherwise refinanced. Accordingly, although the Series2026* Bonds have a stated final maturity of* July 1, 2060,Sky Capital III will be required to refinance or remarket the Series2026* 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 Series2026 Bonds; (iii) pay capitalized interest on the Loan through* January 1, 2029;and (iv) pay the costs of issuance of the Series2026* Bonds.

The Series2026 Bonds are subject to (a) optional redemption at the discretion of Sky Capital III at any time on or after* January 1, 2030at a redemption price equal to the principal amount plus a1%* premium and accrued and unpaid interest to the redemption date, (b) mandatory redemption upon the occurrence of a determination of taxability of the Series2026 Bonds, and (c) mandatory sinking fund redemption beginning in2056.

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 Series2021 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.

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