Sky Harbour Group Corp

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’** EQUITY**

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2026

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, constructs, leases, and manages general aviation hangars for business aircraft across the United States. SHG 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* June 30, 2026*, SHG owned approximately 45.1% of the Sky Common Units and the prior holders of Sky Common Units (the “LLC Interests”) owned approximately 54.9% of the Sky Common Units and control the Company through their ownership of the Company's Class B Common Stock, $0.0001 par value (“Class B Common Stock”).

Basis of Presentation

The accompanying unaudited consolidated financial statements and the related notes (the “Financial Statements”) have been prepared in conformity with the U.S. Securities and Exchange Commission (the “SEC”) requirements for quarterly reports on Form10-Q, and consequently exclude certain disclosures normally included in audited consolidated financial statements prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). These Financial Statements include the accounts of SHG and its consolidated subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Financial Statements should be read in conjunction with the audited consolidated financial statements and the notes contained in the Company’s Annual Report on Form10-K for the year ended* December 31, 2025,*which includes additional disclosures and a summary of the Company's significant accounting policies. In the Company’s opinion, these Financial Statements include all adjustments, consisting of normal recurring items, considered necessary by management to fairly state the Company’s results of operation, financial position, and cash flows.

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

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, and estimates and assumptions related to right-of-use assets and operating lease liabilities. Actual results could differ materially from those estimates.

Risks and Uncertainties

The Company is subject to risks and uncertainties common to early-stage companies. For most of its history, the Company has been engaged in securing access to land through ground leases and developing and constructing aviation hangars. The major risks faced by the Company are 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, committed bank drawdown facility, and has the ability to utilize its at-the-market offering program 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.

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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.

Cost of Construction

Cost of construction on the accompanying 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 general and administrative 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 projects are completed.

Once a capital project is complete, the Company begins to depreciate the constructed asset on a straight-line basis over the lesser of the estimated useful life of the asset or the remaining term of the related ground lease, including expected renewal terms.

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 recognize 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 thethree andsix months ended* June 30, 2026and2025*. 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. Forone of the leases, the shortfall (if any) must be paid to the lessor. See Note18 —Commitments and Contingencies.

Warrants liability

The Company accounts for its Warrants (as defined in Note11 —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 in the consolidated statement of operations.

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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, if any, 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 under ASC Topic606, Revenue from Contracts with Customers. 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 thethree andsix months ended* June 30, 2026* and2025, the Company didnot derive10% of its revenue from any single tenant.

Income Taxes

SHG is classified as a corporation for U.S. 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 transactions contemplated by that certain Equity Purchase Agreement, dated as of* August 1, 2021,by and among Yellowstone Acquisition Company (“YAC”) and Sky, which we refer to as 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.

The Company recorded income tax expense of $0 and the effective tax rate was 0.0% for thethree andsix months ended* June 30, 2026* and2025. The effective income tax rate for thethree andsix months ended* June 30, 2026* and2025 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 due to the cumulative losses sustained by the Company to date.

Recently Issued Accounting Pronouncements

In* November 2024,the FASB issued ASUNo.* 2024-03*,* Income Statement —* Reporting Comprehensive Income: Expense Disaggregation Disclosures (Subtopic* 220-40): Disaggregation of Income Statement Expenses. This ASU requires public business entities to disclose in the notes to financial statements specific categories within relevant expense captions presented on the face of the income statement. The ASU is effective for annual reporting periods beginning after* December 15, 2026,and interim reporting periods beginning after December 15, 2027.*Early adoption is permitted. The amendments should be applied on a prospective basis with retrospective application permitted. We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and disclosures.

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Investments of the Company’s cash in various U.S. Treasury securities that have been classified as available-for-sale and are carried at estimated fair value utilizing Level1 inputs as determined based upon quoted market prices. Investments of the funds held in the restricted trust bank accounts associated with the Series2021 Bonds and the Series2026 Bonds, as defined in Note10 —Bonds payable, loans payable, and interest, are reported as “Restricted investments” in the accompanying consolidated balance sheets. Such investments are classified as available-for-sale or held-to-maturity at the time of investment.

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 thethree andsix months ended* June 30, 2026*. The held-to-maturity restricted investments are carried on the consolidated balance sheet at amortized cost. As of* June 30, 2026*, 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 fair value of the Company’s restricted investments is estimated utilizing Level1 inputs including prices for U.S. Treasury securities with comparable maturities on active markets.

The following tables set forth summaries of the amortized cost, unrealized gains, unrealized losses, and fair value by investment type as of* June 30, 2026* and* December 31, 2025*:

The following table sets forth the maturity profile of the Company’s investments and restricted investments as of* June 30, 2026*:

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

Depreciation expense for thethree andsix months ended* June 30, 2026* totaled approximately $1.7 million and $3.2 million, respectively. Depreciation expense for thethree andsix months ended* June 30, 2025*totaled approximately $1.2 million and $2.0 million, respectively.

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

Depreciation expense for thethree andsix months ended* June 30, 2026* totaled approximately $0.4 million and $0.7 million, respectively. Depreciation expense for thethree andsix months ended* June 30, 2025totaled approximately $0.3 million and $0.5 million, respectively. Capitalized depreciation of long-lived assets included in cost of construction totaled approximately $0.2 million and $0.3 million for thethree* andsix months ended* June 30, 2026*, respectively. Capitalized depreciation of long-lived assets included in cost of construction totaled approximately $0.1 million and $0.4 million for thethree andsix months ended* June 30, 2025,respectively. As of June 30, 2026* and* December 31, 2025,long-lived assets included approximately $3.5 million and $2.7 million, respectively, of purchase deposits towards long-lived assets and construction in progress which arenot* being depreciated as the assets havenot been placed into service.

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Lease intangible assets, net, consists of the following:

Amortization expense for thethree andsix months ended* June 30, 2026* totaled approximately $0.1 million and $0.1 million, respectively. Amortization expense for thethree andsix months ended* June 30, 2025*totaled approximately $0.1 million and $0.1 million, respectively. Less than $0.1 million of amortization expense is included within rental revenue within the consolidated statements of operations for all periods presented.

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

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The table below sets forth a summary of operating lease expense for thethree andsix months ended* June 30, 2026and2025* 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 ground support vehicles and finance leases for vehicles supporting operations at its pre-engineered metal building subsidiary.

In* January 2026,the Company, through an indirect, wholly-owned subsidiary of the Company, executed a lease amendment with respect to its ground lease at SWF to add an approximately 10 acre parcel of land to the existing lease (the “SWF Lease Amendment”). The land associated with the SWF Lease Amendment became immediately available for possession in January 2026*and is co-terminus with the other parcel covered by the Company's ground lease at SWF.

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* June 30, 2026* were as follows:

Tenant leases to which the Company is the lessor require the following non-cancelable future minimum lease payments from tenants as of* June 30, 2026*:

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 thethree andsix months ended* June 30, 2026and2025* recorded in the captions within our consolidated statement of operations:

As of * June 30, 2026* and * December 31, 2025* , the deferred rent receivable included in accounts receivable, prepaid expenses, and other assets was approximately $2.1 million and $1.5 million, respectively. Deferred rent liabilities and rent received in advance represent tenant payments received prior to the contractual due date, and is included in accounts payable, accrued expenses, and other liabilities. Such liabilities totaled approximately $6.2 million and $6.6 million as of * June 30, 2026* and * December 31, 2025* , respectively.

The following table summarizes the Company’s bonds and loans payable as of* June 30, 2026* and* December 31, 2025*:

The Company’s contractual principal payments required under its bonds payable and loans payable as of* June 30, 2026* were as follows:

As of* June 30, 2026and December 31, 2025,the fair value of the Company's Series2021* Bonds was approximately $141.8 million and $140.8 million, respectively. As of* June 30, 2026,the fair value of the Company's Series2026* Bonds was approximately $155.3 million . The fair value of the Company's bonds is estimated utilizing Level2 inputs including prices for the bonds on inactive markets. The Term Loan Facility and the Vista Loan bear interest at a floating rate based on an index plus a spread, and the Yorkville Promissory Notes carry short-term maturities. As such, the Company believes the carrying value of such debt approximates their respective fair value.

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Interest Expense

The following table sets forth the details of interest expense:

The Company uses derivative financial instruments to manage its interest rate risk associated with its variable-rate term loan facility in an aggregate principal amount of up to $200 million (the “Term Loan Facility”) with JPMorgan Chase Bank, N.A. The Company doesnot enter into derivative transactions for speculative or trading purposes. 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 following table reflects the fair value of the Swap Agreementas of* June 30, 2026* and* December 31, 2025*:

The Swap Agreement isnot designated as a hedging instrument. The Company records cash settlements and changes in fair value associated with the Swap Agreement as a component of interest expense within the consolidated statement of operations.

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Tax-Exempt Series 2026 Bonds Issuance

On* February 12, 2026,Sky Harbour Capital III LLC (“Sky Capital III”), an indirect, wholly-owned subsidiary of the Company, completed a $150 million financing through the issuance of Revenue Bonds (Sky Harbour Capital III LLC Aviation Facilities Project), 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.

*Term Loan Facility *

First Amendment to Term Loan Facility

On* January 8, 2026,Sky Harbour Capital II LLC (“SH Capital II”), an indirect, wholly-owned subsidiary of the Company, entered into an amendment (the “Amendment”) to the Term Loan Facility. The Amendment amended the Term Loan Facility to provide for, among other things, conditions under which surplus funds, as defined in the Amendment (the “Term Loan Facility Surplus Funds”), may*be released to SH Capital II and its special purpose subsidiaries (the “Term Loan Borrowers”).

In addition, Sky Harbour Holdings III LLC (“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* may*be utilized by Sky, as discussed below.

Provided certain conditions within the Amendment are met, the Amendment permits the Term Loan Borrowers to distribute or otherwise transfer such Term Loan Facility 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 Term Loan 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 Term Loan Facility 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 Term Loan 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 Term Loan Borrowers, at a ratio ofnot* less than2.00 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 associated with the Term Loan Facility, 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 Term Loan Facility.

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Second Amendment to Term Loan Facility

On* June 29, 2026,SH Capital II entered into an amendment (the “Second Amendment”) to the Term Loan Facility. The Second Amendment amends the Term Loan Facility to permit the Company to request a borrowingnot* to exceed $20 million under the Term Loan Facility (the “OPF Phase II Borrowing”) for the purpose of financing or reimbursing costs incurred by Sky Harbour Opa Locka Airport LLC (the “OPF Phase II Owner”) in connection with thesecond phase of its construction project at Miami-Opa Locka Executive Airport (the “OPF Phase II Project”). Under the terms of the Second Amendment, the OPF Phase II Project wasnot added to the borrowing base of the Term Loan Facility, nor did the OPF Phase II Owner become a Borrower. Subsequently, on* June 29, 2026,*SH Capital II requested and borrowed the OPF Phase II Borrowing of $20 million.

The Second Amendment requires that the Company make cash contributions toone or more of the Borrowers in an aggregate amount ofnot less than $20 million (the “Term Loan Facility Replenishment”) to fund eligible capital expenditures associated with the Portfolio II Projects. The Company is permitted to utilize the cash proceeds of the Series2026 Bonds to fulfill the requirements of the Term Loan Facility Replenishment. Pursuant to the Second Amendment the Borrowers have agreednot to create or permit a lien on the Company's hangar campus at SJC or its equity interests therein, or income derived therefrom, until the Term Loan Facility Replenishment is complete.

The OPF Phase II Borrowing and the obligations under the Term Loan Facility Replenishment are also subject to the customary condition that therenot be any default under the Term Loan Facility.

The Borrowers’ obligations with respect to the Term Loan Facility Replenishment have been guaranteed by the Company and by Sky Harbour Holdings II LLC.

Other Term Loan Facility Activity

On* January 8, 2026,subsidiaries of the Company that own existing and future hangar campuses at CMA and BDL were added to the borrowing base of the Term Loan Facility. Subsequently, on January 8, 2026,*SH Capital II drew funds of approximately $13 million under the Term Loan Facility in order to reimburse the Company for prior advances associated with capital expenditures at BDL and certain other general corporate purposes.

On* April 17, 2026,*the subsidiary of the Company that owns a hangar campus at SLC was added to the borrowing base of the Term Loan Facility. Subsequently, the Company drew funds of approximately $14 million under the Term Loan Facility in order to reimburse the Parent for prior advances associated with capital expenditures at SLC and certain other general corporate purposes.

As of* June 30, 2026,*there was approximately $130.2 million of availability under the Term Loan Facility, subject to borrowing base restrictions.

2026 Yorkville Promissory Note

On* January 27, 2026,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 $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 issued 40,000 shares of Class A Common Stock to Yorkville. 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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SHG’s legal predecessor, 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 BOC Yellowstone LLC (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 thethree andsix months ended* June 30, 2026and2025*. As of* June 30, 2026*,15,798,155 Warrants remain outstanding.

The closing price of the Warrants was $0.46 and $0.65 per warrant on* June 30, 2026* and* December 31, 2025*, respectively. The aggregate fair value of the outstanding Warrants was approximately $7.3 million and $10.3 million as of* June 30, 2026* and* December 31, 2025*, respectively. During thethree months ended* June 30, 2026* and2025, the Company recorded unrealized gains associated with the change in fair value of the Warrants of approximately $3.8 million and $21.8 million, respectively. During thesix months ended* June 30, 2026* and2025, the Company recorded unrealized gains associated with the change in fair value of the Warrants of approximately $3.0 million and $19.3 million, respectively.

Common Equity

As of* June 30, 2026*, there were 34,510,324 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 of1933, as amended. 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.

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.

The Company isnot obligated to sell any shares under the ATM Agreement or the A&R 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 the Sales Agents, of all of the shares subject to the ATM Agreement and (ii) termination of the ATM Agreement in accordance with its terms.

During thethree 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 thesix 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.

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* June 30, 2026* 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 of 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* June 30, 2026*, the LLC interests owned approximately 54.9% of the Sky Common Units outstanding.

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Restricted Stock Units (“RSUs”)

In* February 2026,the Company granted time-based RSUs to certain employees, consultants, and non-employee directors under the Company’s2022* Incentive Award Plan.1,015,450 time-based awards were granted at a grant date fair value of $8.97, which will vest ratably over afour-year period beginning on thefirst anniversary of the grant date and ending on* February 18, 2030.*

During thethree andsix months ended* June 30, 2026*, the Company recognized stock compensation expense of approximately $1.4 million and $2.7 million, respectively, associated with all RSU awards. During thethree andsix months ended* June 30, 2025*, the Company recognized stock compensation expense of approximately $1.1 million and $2.1 million, respectively, associated with all RSU awards. The Company recognizes expense associated with RSU awards within employee compensation and benefits within the statement of operations. As of* June 30, 2026,there are 1,558,859 unvested RSUs outstanding with a weighted average grant date fair value of $9.54. The unrecognized compensation costs associated with all unvested RSUs at June 30, 2026*was approximately $13.5 million that is expected to be recognized over a weighted-average future period of 3.1 years.

Non-qualified Stock Options (“NSOs”)

In* February 2026,the Company granted to certain employees options to purchase 1,187,443 shares of Class A Common Stock at an exercise price of $8.85 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. The options were valued at $5.19 using a Black-Scholes pricing model.

During thethree andsix months ended* June 30, 2026*, the Company recognized stock compensation expense of approximately $0.4 million and $0.7 million, respectively, associated with all NSO awards. During thethree andsix months ended* June 30, 2025*, the Company recognized stock compensation expense of approximately $0.2 million and $0.4 million, respectively, associated with all NSO awards. The unrecognized compensation costs associated with all unvested NSOs at* June 30, 2026*was approximately $12.0 million that is expected to be recognized over a weighted-average future period of 7.9 years.

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 earnings (loss) per common share were as follows (in thousands):

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The following table summarizes the components of accumulated other comprehensive income:

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

The following table summarizes non-cash activities associated with the Company’s operating 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* June 30, 2026,*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.

In addition to the lease payment commitments discussed in Note8 —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 construction 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.

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 the Company’s acquired subsidiaries at Camarillo Airport (“CMA”), who also serves as an independent contractor of the Company. 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 right plus 2% per annum.

As of* June 30, 2026* and* December 31, 2025*, the Company had loaned a total of $1.2 million and $1.1 million, respectively, 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 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 thethree andsix months ended* June 30, 2026*, the Company recognized approximately $0.1 million and $0.2 million of expense, respectively, within pursuit and marketing expenses under the terms of this agreement. For thethree andsix months ended* June 30, 2025*, the Company recognized approximately $0.2 million and $0.3 million of expense, respectively, within pursuit and marketing expenses under the terms of this agreement. The related liability is included in Accounts payable, accrued expenses and other liabilities within the consolidated balance sheet as of* June 30, 2026*.

Other Relationships

For thethree andsix months ended* June 30, 2026* and2025, the Company recognized less than $0.1 million of expense for consulting services received from a company that employed the Chief Financial Officer until prior to* July 1, 2021.*

On* June 1, 2025,the Company hired an individual to serve as its head of construction and president ofone* of its 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 project. During thethree andsix months ended* June 30,2025, the Company incurred $2.3 million and $5.7 million of construction costs associated with the General Contractor at its APA Phase I project, respectively. The General Contractor was also previously engaged by the Company to serve as an architectural and engineering consultant in connection with its ADS Phase II development project. During thethree andsix months ended June 30, 2026*, the Company incurred $0.1 million and $0.1 million, respectively, of construction costs associated with such services. During thethree andsix months ended* June 30,2025, the Company incurred $0.1 million and $0.1 million of construction costs associated with the ADS Phase II development project, respectively. All such costs are capitalized and included as a component of cost of construction within the consolidated balance sheet as of June 30, 2026*.

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 thethree andsix months ended* June 30, 2026* the allocated costs from the General Contractor to Ascend were less than $0.1 million and $0.1 million, respectively. During thethree andsix months ended* June 30, 2025*the allocated costs from the General Contractor to Ascend were $0.

On* August 10, 2026,the Company entered into a securities purchase agreement with certain purchasers, pursuant to which the Company agreed to sell an aggregate of 4,000,000 shares of its Class A Common Stock in a registered direct offering at a purchase price of $10.00 per share. The Company expects the offering to close on or about August 12, 2026,subject to customary closing conditions. The Company expects to receive aggregate gross proceeds of approximately $40.0 million from the offering, before deducting offering-related expenses. The Company intends to use the net proceeds for general corporate purposes. The offering is expected to be conducted pursuant to the Company's effective shelf registration statement on Form S-3 (RegistrationNo.* 333-278275), including a base prospectus dated* April 10, 2024and a prospectus supplement dated on or about August 12, 2026.*

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