Sky Harbour Group Corp

Previous wording

Our future success depends upon our ability to attract and retain tenants for hangars at our HBO campuses. The extent to which we achieve growth in our customer base materially influences our business and results of operations. Any number of factors could affect our ability to grow our customer base, including tenant preferences for hangar space and related services, including size and location of the hangar, as well as general economic conditions. The level and volatility of fuel prices may also impact the general aviation industry and our ability to attract and retain tenants. For example, during the first quarter of 2026, fuel prices increased significantly as a result of ongoing geopolitical events and market disruptions. At our ADS, APA, and CMA HBO campuses, we are directly exposed to fluctuations in fuel prices, which could have have a material effect on our operating results at such campuses. Due to the competitive nature of our industry, we cannot predict the impact periods of high volatility in fuel prices or significant disruptions in the supply of aircraft fuel will have on our ability to attract and retain tenants. In addition, our ability to attract and retain customers may be dependent on other factors outside of our control, including the future trend of private aircraft sizes and the availability of alternative hangars, including size, location and/or services provided. Any significant decline in our customer base, or in our rate of growth, could have a material adverse effect on our business and results of operations, which could, in turn, result in a decline in the trading price of our securities.

Current wording

Our future success depends upon our ability to attract and retain tenants for hangars at our HBO campuses. The extent to which we achieve growth in our customer base materially influences our business and results of operations. Any number of factors could affect our ability to grow our customer base, including tenant preferences for hangar space and related services, including size and location of the hangar, as well as general economic conditions. The level and volatility of fuel prices may also impact the general aviation industry and our ability to attract and retain tenants. For example, during the first half of 2026, fuel prices increased significantly as a result of ongoing geopolitical events and market disruptions. At our ADS, APA, and CMA HBO campuses, we are directly exposed to fluctuations in fuel prices, which could have a material effect on our operating results at such campuses. Due to the competitive nature of our industry, we cannot predict the impact periods of high volatility in fuel prices or significant disruptions in the supply of aircraft fuel will have on our ability to attract and retain tenants. In addition, our ability to attract and retain customers may be dependent on other factors outside of our control, including the future trend of private aircraft sizes and the availability of alternative hangars, including size, location and/or services provided. Any significant decline in our customer base, or in our rate of growth, could have a material adverse effect on our business and results of operations, which could, in turn, result in a decline in the trading price of our securities.

Previous wording

Economic conditions and actions by policymaking bodies contributed to rising interest rates, which, along with increases in our borrowing levels, could increase our future borrowing costs. While the Federal Reserve reduced interest rates during 2025 and has indicated the potential for further rate cuts in 2026, interest rates remain relatively high and there can be no certainty with respect to the occurrence, timing, or magnitude of further interest rate cuts by the Federal Reserve, and thus no certainty with respect to the ultimate impact on our borrowing costs. We expect to issue additional debt to finance future site developments and refinance the Term Loan Facility and the Series 2026 Bonds on or prior to its maturity date and mandatory tender date, respectively. Elevated interest rates would impact our overall economic performance. In addition, we are subject to credit spreads demanded by fixed income investors. As a non-rated issuer, increases in general of credit spreads in the market, or for us, may result in a higher cost of borrowing in the future. We intend to access the bond market on an opportunistic basis. In addition, we may hedge against rising benchmark interest rates by entering into hedging strategies with high quality counterparties.

Current wording

Economic conditions and actions by policymaking bodies contributed to rising interest rates, which, along with increases in our borrowing levels, could increase our future borrowing costs. While the Federal Reserve reduced interest rates during 2025, it has since paused its rate-cutting cycle and has indicated the potential for interest rate hikes in the future. Interest rates remain relatively high and there can be no certainty with respect to the occurrence, timing, or magnitude any future interest rate decisions by the Federal Reserve, and thus no certainty with respect to the ultimate impact on our borrowing costs. We expect to issue additional debt to finance future site developments and refinance the Term Loan Facility and the Series 2026 Bonds on or prior to its maturity date and mandatory tender date, respectively. Elevated interest rates would impact our overall economic performance. In addition, we are subject to credit spreads demanded by fixed income investors. As a non-rated issuer, increases in general of credit spreads in the market, or for us, may result in a higher cost of borrowing in the future. We intend to access the bond market on an opportunistic basis. In addition, we may hedge against rising benchmark interest rates by entering into hedging strategies with high quality counterparties.

Previous wording

Fuel revenues for the three months ended March 31, 2026 were approximately $2.2 million, compared to approximately $1.1 million for the three months ended March 31, 2025. The approximately $1.1 million, or 97%, increase was primarily the result of a $0.8 million increase in fuel sales at our CMA, ADS, and APA hangar campuses, where our fuel revenues and related expenses are recognized on a gross basis. Other fuel revenue increased by approximately $0.3 million, which was primarily driven by an increase in fuel gallons uplifted at our BNA, OPF, and SJC hangar campuses due to increased occupancy.

Current wording

Fuel revenues for the three months ended June 30, 2026 were approximately $2.8 million, compared to approximately $1.4 million for the three months ended June 30, 2025. The approximately $1.4 million, or 100%, increase was primarily the result of a $1.2 million increase in fuel sales at our CMA, ADS, and APA hangar campuses, where our fuel revenues and related expenses are recognized on a gross basis. Other fuel revenue increased by approximately $0.2 million, which was primarily driven by an increase in fuel gallons uplifted at our BNA, OPF, and SJC hangar campuses due to increased occupancy.

Previous wording

Fuel expenses for the three months ended March 31, 2026 were approximately $1.1 million, compared to approximately $0.7 million for the three months ended March 31, 2025. The approximately $0.4 million, or 57%, increase was primarily the result of an increase in the cost of fuel of approximately $0.4 million, driven by the impact of recognizing fuel revenue and expenses on a gross basis at our CMA, ADS, and APA hangar campuses.

Current wording

Fuel expenses for the three months ended June 30, 2026 were approximately $1.9 million, compared to approximately $0.9 million for the three months ended June 30, 2025. The approximately $1.0 million, or 111%, increase was primarily the result of an increase in the cost of fuel of approximately $1.0 million, driven by the impact recognizing fuel revenue and expenses on a gross basis at our CMA, ADS, and APA hangar campuses and increased volatility in fuel prices.

Previous wording

Pursuit and marketing expenses for the three months ended March 31, 2026 were approximately $0.6 million, compared to approximately $0.6 million for the three months ended March 31, 2025. The 7% increase was primarily the result of increased marketing spend and our investment in our growth strategy in securing airport site acquisitions and potential tenants throughout the year.

Current wording

Pursuit and marketing expenses for the three months ended June 30, 2026 were approximately $0.7 million, compared to approximately $0.6 million for the three months ended June 30, 2025. The 17% increase was primarily the result of increased marketing spend and our investment in our growth strategy in securing airport site acquisitions and potential tenants throughout the year.

Previous wording

Employee compensation and benefits expenses increased approximately $0.1 million, or 3%, to $4.3 million for the three months ended March 31, 2026, as compared to approximately $4.2 million for the three months ended March 31, 2025. The increase was primarily driven by an increase in expense recognized associated with our equity compensation programs.

Current wording

Employee compensation and benefits expenses increased approximately $0.3 million, or 7%, to $4.6 million for the three months ended June 30, 2026, as compared to approximately $4.3 million for the three months ended June 30, 2025. The increase was primarily driven by increases in headcount and expense recognized associated with our equity compensation programs.

Previous wording

For the three months ended March 31, 2026 and 2025, other general and administrative expenses were approximately $1.1 million and approximately $1.0 million, respectively. The approximately $0.1 million, or 11%, increase was primarily driven by increases in professional fees and technology costs due to the expansion of the business and headcount, offset by a slight decrease in corporate insurance premiums.

Current wording

For the three months ended June 30, 2026 and 2025, other general and administrative expenses were approximately $1.1 million and approximately $1.0 million, respectively. The approximately $0.1 million, or 10%, increase was primarily driven by increases in professional fees and technology costs due to the expansion of the business and headcount, offset by a slight decrease in corporate insurance premiums.

Previous wording

Other expense decreased from approximately $2.3 million for the three months ended March 31, 2025, to approximately $2.0 million for the three months ended March 31, 2026. The decrease was primarily due to an approximately $1.7 million difference in the mark-to-market adjustment of the outstanding warrants at March 31, 2026 as compared to March 31, 2025 offset by an approximately $1.2 million increase in interest expense due to higher indebtedness and an approximately $0.3 million decrease in interest income.

Current wording

Other income decreased from approximately $21.9 million for the three months ended June 30, 2025, to approximately $2.4 million for the three months ended June 30, 2026. The decrease was primarily due to an approximately $18.0 million difference in the mark-to-market adjustment of the outstanding warrants at June 30, 2026 as compared to June 30, 2025, an approximately $1.2 million increase in interest expense due to higher indebtedness, and an approximately $0.3 million decrease in interest income.

Previous wording

Rental revenues for the three months ended March 31, 2026 were approximately $6.5 million, compared to approximately $4.5 million for the three months ended March 31, 2025. The $2.0 million, or 46%, increase was primarily the result of operations at our DVT, APA, and ADS hangar campuses, which commenced operations throughout the year ended December 31, 2025, and the cumulative impact of increased occupancy at our BNA, OPF, and SJC hangar campuses.

Current wording

Rental revenues for the six months ended June 30, 2026 were approximately $13.5 million, compared to approximately $9.7 million for the six months ended June 30, 2025. The $3.8 million, or 39%, increase was primarily the result of operations at our APA and ADS hangar campuses, which commenced operations throughout the year ended December 31, 2025, the completion of OPF Phase II during the three months ended June 30, 2026, and the cumulative impact of increased occupancy at our BNA, DVT, and SJC hangar campuses.

Previous wording

Campus operating expenses increased approximately $0.7 million, or 37%, from approximately $1.9 million for the three months ended March 31, 2025, to approximately $2.6 million for the three months ended March 31, 2026. Salaries, wages, and benefits associated with our hangar campus personnel increased approximately $0.2 million, primarily driven by headcount increases associated with the commencement of operations at our DVT, APA, and ADS hangar campuses throughout the year ended December 31, 2025. Other campus operating expenses increased approximately $0.5 million, primarily driven by increased insurance, property taxes, and utilities associated with operations at DVT, APA, and ADS.

Current wording

Campus operating expenses increased approximately $0.9 million, or 22%, from approximately $4.1 million for the six months ended June 30, 2025, to approximately $5.0 million for the six months ended June 30, 2026. Salaries, wages, and benefits associated with our hangar campus personnel increased approximately $0.4 million, primarily driven by headcount increases associated with the commencement of operations at our DVT, APA, and ADS hangar campuses throughout the year ended December 31, 2025. Other campus operating expenses increased approximately $0.5 million, primarily driven by increased insurance, property taxes, and utilities associated with operations at DVT, APA, and ADS.

Previous wording

Ground lease expenses increased approximately $1.1 million, or 36%, from approximately $2.9 million for the three months ended March 31, 2025, to approximately $4.0 million for the three months ended March 31, 2026. The increase in ground lease expense was driven by the ground leases signed at the ground leases signed at SWF and HIO during the three months ended June 30, 2025 and the ground leases signed at LGB and FTW during the three months ended December 31, 2025.

Current wording

Ground lease expenses increased approximately $1.3 million, or 20%, from approximately $6.5 million for the six months ended June 30, 2025, to approximately $7.8 million for the six months ended June 30, 2026. The increase in ground lease expense was driven by the ground leases signed at the ground leases signed at SWF and HIO during the three months ended June 30, 2025 and the ground leases signed at LGB and FTW during the three months ended December 31, 2025.

Previous wording

Depreciation and amortization for the three months ended March 31, 2026 was approximately $2.0 million, as compared to approximately $1.1 million for the three months ended March 31, 2025. The approximately $0.9 million, or 79%, increase was primarily driven by the commencement of operations at our DVT and ADS campuses during the three months ended June 30, 2025, and the commencement of operations at our APA campus during the three months ended September 30, 2025.

Current wording

Depreciation and amortization for the six months ended June 30, 2026 was approximately $4.1 million, as compared to approximately $2.6 million for the six months ended June 30, 2025. The approximately $1.5 million, or 58%, increase was primarily driven by the commencement of operations at our OPF Phase II campus during the three months ended June 30, 2026, the commencement of operations at our DVT and ADS campuses during the three months ended June 30, 2025, and the commencement of operations at our APA campus during the three months ended September 30, 2025.

Previous wording

Our cash deposits may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and the majority are maintained with a major financial institution with reputable credit. Our restricted cash is held in trust at a major financial institution pursuant to the Series 2021 Bonds indenture. We monitor the relative credit standing of financial institutions with whom we transact and limit the amount of credit exposure with any one entity. Our portfolio of investments and restricted investments is composed entirely of U.S. Treasury securities as of March 31, 2026.

Current wording

Our cash deposits may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and the majority are maintained with a major financial institution with reputable credit. Our restricted cash is held in trust at major financial institutions pursuant to the respective indentures of the Series 2021 Bonds and Series 2026 Bonds. We monitor the relative credit standing of financial institutions with whom we transact and limit the amount of credit exposure with any one entity. Our portfolio of investments and restricted investments is composed entirely of U.S. Treasury securities as of June 30, 2026.

Previous wording

On February 12, 2026, Sky Harbour Capital III LLC (“Sky Capital III”) completed a $150 million financing through the issuance of Series 2026 Bonds. The Series 2026 Bonds were issued by the Public Finance Authority of Wisconsin and bear interest at a rate of 6.00% per year, payable semi-annually in arrears on January 1 and July 1 of each year, beginning on July 1, 2026. The Series 2026 Bonds are subject to mandatory tender for purchase on January 1, 2031 (the “Mandatory Tender Date”), and will mature on July 1, 2060, unless earlier exchanged, redeemed or repurchased. On the Mandatory Tender Date, holders will be required to tender their Bonds for purchase at a price equal to 100% of the principal amount thereof plus accrued interest. Following such mandatory tender, the Series 2026 Bonds may be remarketed at a new interest rate or otherwise refinanced. Accordingly, although the Series 2026 Bonds have a stated final maturity of July 1, 2060, Sky Capital III will be required to refinance or remarket the Series 2026 Bonds on or prior to January 1, 2031. We intend to use the proceeds, 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 the 2026 Projects; (ii) fund a deposit to the debt service reserve fund for the Series 2026 Bonds; (iii) pay capitalized interest on the Series 2026 Bonds through January 1, 2029; and (iv) pay the costs of issuance of the Series 2026 Bonds.

Current wording

On February 12, 2026, Sky Harbour Capital III LLC (“Sky Capital III”) completed a $150 million financing through the issuance of Series 2026 Bonds. The Series 2026 Bonds were issued by the Public Finance Authority of Wisconsin and bear interest at a rate of 6.00% per year, payable semi-annually in arrears on January 1 and July 1 of each year, beginning on July 1, 2026. The Series 2026 Bonds are subject to mandatory tender for purchase on January 1, 2031 (the “Mandatory Tender Date”), and will mature on July 1, 2060, unless earlier exchanged, redeemed or repurchased. On the Mandatory Tender Date, holders will be required to tender their Bonds for purchase at a price equal to 100% of the principal amount thereof plus accrued interest. Following such mandatory tender, the Series 2026 Bonds may be remarketed at a new interest rate or otherwise refinanced. Accordingly, although the Series 2026 Bonds have a stated final maturity of July 1, 2060, Sky Capital III will be required to refinance or remarket the Series 2026 Bonds on or prior to January 1, 2031. We utilize the proceeds of the Series 2026 Bonds, 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 the 2026 Projects; (ii) fund a deposit to the debt service reserve fund for the Series 2026 Bonds; (iii) pay capitalized interest on the Series 2026 Bonds through January 1, 2029; and (iv) pay the costs of issuance of the Series 2026 Bonds.

Previous wording

During the three months ended March 31, 2026, the Company sold 47,371 shares of Class A Common Stock under the ATM Facility at a weighted-average sales price of $10.07. As of March 31, 2026, ATM Shares having an aggregate gross sales price of up to approximately $97.3 million remain available for issuance under the A&R ATM Agreement.

Current wording

During the three months ended June 30, 2026, the Company sold 195,112 shares of Class A Common Stock under the ATM Facility at a weighted-average sales price of $10.60. During the six months ended June 30, 2026, the Company sold 242,483 shares of Class A Common Stock under the ATM Facility at a weighted-average sales price of $10.49. As of June 30, 2026, ATM Shares having an aggregate gross sales price of up to approximately $95.2 million remain available for issuance under the A&R ATM Agreement.

Previous wording

The following table summarizes our sources and uses of cash for thethree months ended March 31, 2026 and 2025 (in thousands):

Current wording

The following table summarizes our sources and uses of cash for thesix months ended June 30, 2026 and 2025 (in thousands):

Previous wording

Net cash used in operating activities was approximately $3.9 million for thethree months ended March 31, 2026, as compared to cash used in operating activities of approximately $5.1 million for the same period in 2025. The approximately $1.1 million decrease in cash used in operating activities was primarily attributable to an approximately $1.2 million decrease in net loss, net of non-cash adjustments, offset by an unfavorable change in working capital of approximately $0.1 million. The decrease in net loss, net of non-cash adjustments was primarily driven by the impact of increases in revenue from our operations at DVT, APA, and ADS. The unfavorable change in working capital was primarily driven by the timing of collections of accounts receivable as well as spending commitments and payments of our accounts payable and other accrued expenses.

Current wording

Net cash used in operating activities was approximately $3.4 million for thesix months ended June 30, 2026, as compared to cash used in operating activities of approximately $6.0 million for the same period in 2025. The approximately $2.6 million decrease in cash used in operating activities was primarily attributable to an approximately $2.5 million decrease in net loss, net of non-cash adjustments and a favorable change in working capital of approximately $0.1 million. The decrease in net loss, net of non-cash adjustments was primarily driven by the impact of increases in revenue from our operations at DVT, APA, ADS, and OPF. The favorable change in working capital was primarily driven by the timing of collections of accounts receivable as well as spending commitments and payments of our accounts payable and other accrued expenses.

Previous wording

Net cash used in investing activities was approximately $126.9 million for thethree months ended March 31, 2026, as compared to cash used in investing activities of approximately $4.5 million for the same period in 2025. The increase of approximately $122.4 million of cash used in investing activities was driven primarily by an increase in purchases of available-for-sale and held-to-maturity securities of $63.9 million due to the investment of certain Series 2026 Bonds proceeds, a decrease in proceeds received from available-for-sale investments of approximately $49.9 million, and an increase of capital expenditures of approximately $8.4 million.

Current wording

Net cash used in investing activities was approximately $96.0 million for thesix months ended June 30, 2026, as compared to cash used in investing activities of approximately $54.8 million for the same period in 2025. The increase of approximately $41.2 million of cash used in investing activities was driven primarily by a decrease in proceeds received from available-for-sale investments of approximately $69.2 million and an increase of capital expenditures of approximately $19.0 million, offset by a decrease in purchases of available-for-sale and held-to-maturity investments of approximately $49.7 million.

Previous wording

Net cash provided by financing activities was approximately $174.9 million for thethree months ended March 31, 2026, as compared to net cash used in financing activities of approximately $1.2 million for the same period in 2025. The approximately $176.1 million increase in net cash used in financing activities was primarily driven by proceeds received from the issuance of the Series 2026 Bonds of $150.0 million and approximately $29.0 million of proceeds received from the Term Loan Facility and 2026 Yorkville Promissory Note. These were offset by an increase of $3.9 million in payments for debt issuance costs.

Current wording

Net cash provided by financing activities was approximately $226.4 million for thesix months ended June 30, 2026, as compared to net cash used in financing activities of approximately $1.5 million for the same period in 2025. The approximately $227.9 million increase in net cash used in financing activities was primarily driven by proceeds received from the issuance of the Series 2026 Bonds of $150.0 million and approximately $78.8 million of proceeds received from the Term Loan Facility and 2026 Yorkville Promissory Note. These were offset by an increase of $3.9 million in payments for debt issuance costs.