Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO

Commission File Number: 001-39648

Sky Harbour Group Corporation

(Exact name of registrant as specified in its Charter)

Delaware	85-2732947
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

136 Tower Road, Suite 205
Westchester County Airport White Plains, NY (Address of principal executive offices)	10604 (Zip Code)

(212) 554-5990 Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of Class	Trading Symbols	Name of Exchange on Which Registered
Class A common stock, par value $0.0001 per share	SKYH	NYSE American LLC
Warrants, each whole warrant exercisable for one share of Class A common stock at an exercise price of $11.50 per share	SKYH WS	NYSE American LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. (See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act).

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 4, 2024, 29,391,337 shares of Class A common stock, par value $0.0001 per share, and 42,046,356 shares of Class B common stock, par value $0.0001 per share, were issued and outstanding, respectively.

Table of Contents

SKY HARBOUR GROUP CORPORATION

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION		2
Item 1.	Financial Statements	2
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	34
PART II. OTHER INFORMATION		35
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3.	Defaults Upon Senior Securities	35
Item 4.	Mine Safety Disclosures	35
Item 5.	Other Information	35
Item 6.	Exhibits	36
	Exhibit Index	36
	Signatures	37

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ITEM 1.

FINANCIAL STATEMENTS

SKY HARBOUR GROUP CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

	*September 30, 2024*			*December 31, 2023*
	(unaudited)			(audited)
Assets
Cash	$	3,540		$	60,257
Restricted cash		70,627			12,009
Investments		19,464			11,866
Restricted investments		16,741			88,213
Accounts receivable, prepaid expenses and other assets		6,208			6,003
Cost of construction		120,443			64,212
Constructed assets, net		79,750			77,283
Right-of-use assets		127,813			70,527
Long-lived assets, net		12,227			11,829
Total assets	$	456,813		$	402,199

Liabilities and equity
Accounts payable, accrued expenses and other liabilities	$	21,202		$	16,740
Operating lease liabilities		129,981			69,437
Loans payable and finance lease liabilities		7,968			9,311
Bonds payable, net of debt issuance costs and premiums		162,572			162,420
Warrants liability		35,557			12,045
Total liabilities		357,280			269,953

Commitments and contingencies (Note 15)

Stockholders’ equity
Preferred stock; $0.0001 par value; 10,000,000 shares authorized as of September 30, 2024; none issued and outstanding		-			-
Class A common stock, $0.0001 par value; 200,000,000 shares authorized; 25,326,328 and 24,165,523 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively		2			2
Class B common stock, $0.0001 par value; 50,000,000 shares authorized; 42,046,356 and 42,046,356 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively		4			4
Additional paid-in capital		93,610			88,198
Accumulated deficit		(51,094	)		(19,361	)
Accumulated other comprehensive income		41			312
Total Sky Harbour Group Corporation stockholders’ equity		42,563			69,155

Non-controlling interests		56,970			63,091
Total equity		99,533			132,246

Total liabilities and equity	$	456,813		$	402,199

See accompanying Notes to Unaudited Consolidated Financial Statements

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SKY HARBOUR GROUP CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(Unaudited)

	Three Months Ended						Nine months ended
	September 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
Revenue:
Rental revenue	$	4,097		$	2,502		$	10,119		$	5,337
Total revenue		4,097			2,502			10,119			5,337

Expenses:
Operating		3,681			1,675			9,103			5,179
Depreciation		646			670			1,917			1,650
General and administrative		4,634			3,556			14,145			10,838
Total expenses		8,961			5,901			25,165			17,667

Operating loss		(4,864	)		(3,399	)		(15,046	)		(12,330	)

Other (income) expense:
Interest expense		177			234			558			316
Unrealized (gain) loss on warrants		15,961			(1,597	)		23,930			-
Other income		(303	)		(37	)		(1,799	)		(252	)
Total other (income) expense		15,835			(1,400	)		22,689			64

Net loss		(20,699	)		(1,999	)		(37,735	)		(12,394	)

Net loss attributable to non-controlling interests		(2,145	)		(1,810	)		(6,003	)		(6,788	)
Net loss attributable to Sky Harbour Group Corporation shareholders	$	(18,554	)	$	(189	)	$	(31,732	)	$	(5,606	)

Loss per share
Basic	$	(0.74	)	$	(0.01	)	$	(1.29	)	$	(0.37	)
Diluted	$	(0.74	)	$	(0.01	)	$	(1.29	)	$	(0.37	)
Weighted average shares
Basic		25,055			15,245			24,689			15,132
Diluted		25,055			15,245			24,689			15,132

See accompanying Notes to Unaudited Consolidated Financial Statements

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SKY HARBOUR GROUP CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
Net loss	$	(20,699	)	$	(1,999	)	$	(37,735	)	$	(12,394	)
Unrealized gains on available-for-sale securities		26			204			503			521
Realized gains on available-for-sale securities reclassified to the consolidated statements of operations		(67	)		(19	)		(774	)		(121	)
Total comprehensive loss	$	(20,740	)	$	(1,814	)	$	(38,006	)	$	(11,994	)

See accompanying Notes to Unaudited Consolidated Financial Statements

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SKY HARBOUR GROUP CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share data)

(Unaudited)

	*Class A*					*Class B*				*Additional*						*Accumulated Other*			*Total*			*Non-*
	*Common Stock*					*Common Stock*				*Paid-in*			*Accumulated*			*Comprehensive*			*Stockholders’*			*Controlling*			*Total*
	*Shares*			*Amount*		*Shares*		*Amount*		*Capital*			*Deficit*			*Income (Loss)*			*Equity*			*Interests*			*Equity*
Balance at December 31, 2023		24,165,523		$	2		42,046,356	$	4	$	88,198		$	(19,361	)	$	312			69,155		$	63,091		$	132,246
Share-based compensation		-			-		-		-		987			-			-			987			45			1,032
Vesting of restricted stock units		176,166			-		-		-		-			-			-			-			-			-
Shares withheld for payment of employee taxes		(57,833	)		-		-		-		(686	)		-			-			(686	)		-			(686	)
Exercise of warrants		253,703			-		-		-		3,332			-			-			3,332			-			3,332
Payment of equity issuance costs		-			-		-		-		(43	)		-			-			(43	)		-			(43	)
Other comprehensive income		-			-		-		-		-			-			378			378			-			378
Net loss		-			-		-		-		-			(18,940	)		-			(18,940	)		(2,259	)		(21,199	)
Balance at March 31, 2024		24,537,559		$	2		42,046,356	$	4	$	91,788		$	(38,301	)	$	690		$	54,183		$	60,877		$	115,060
Share-based compensation		-			-		-		-		1,030			-			-			1,030			45			1,075
Vesting of restricted stock units		100,700			-		-		-		-			-			-			-			-			-
Shares withheld for payment of employee taxes		(22,090	)		-		-		-		(239	)		-			-			(239	)		-			(239	)
Exercise of warrants		3,639			-		-		-		47			-			-			47			-			47
Issuance of stock through ATM Facility		7,407			-		-		-		90			-			-			90			-			90
Exchange of Sky Incentive Units		251,485			-		-		-		89			-			-			89			(89	)		-
Other comprehensive loss		-			-		-		-		-			-			(623	)		(623	)		-			(623	)
Net income (loss)		-			-		-		-		-			5,761			-			5,761			(1,598	)		4,163
Balance at June 30, 2024		24,878,700		$	2		42,046,356	$	4	$	92,805		$	(32,540	)	$	67		$	60,338		$	59,235		$	119,573
Share-based compensation		-			-		-		-		860			-			-			860			46			906
Vesting of restricted stock units		69,791			-		-		-		-			-			-			-			-			-
Shares withheld for payment of employee taxes		(22,163	)		-		-		-		(198	)		-			-			(198	)		-			(198	)
Exchange of Sky Incentive Units		400,000			-		-		-		166			-			-			166			(166	)		-
Payment of equity issuance costs		-			-		-		-		(23	)		-			-			(23	)		-			(23	)
Other comprehensive income		-			-		-		-		-			-			(26	)		(26	)		-			(26	)
Net loss		-			-		-		-		-			(18,554	)		-			(18,554	)		(2,145	)		(20,699	)
Balance at September 30, 2024		25,326,328		$	2		42,046,356	$	4	$	93,610		$	(51,094	)	$	41		$	42,563		$	56,970		$	99,533

	*Class A*				*Class B*					*Additional*					*Accumulated Other*			*Total*			*Non-*			*Total*
	*Common Stock*				*Common Stock*					*Paid-in*		*Accumulated*			*Comprehensive*			*Stockholders’*			*Controlling*			*Equity*
	*Shares*		*Amount*		*Shares*			*Amount*		*Capital*		*Deficit*			*Income (Loss)*			*Equity*			*Interests*			*(Deficit)*
Balance at December 31, 2022		14,962,831	$	1		42,192,250		$	4	$	29,560	$	(3,184	)	$	(102	)		26,279		$	72,096		$	98,375
Share-based compensation		-		-		-			-		393		-			-			393			85			478
Exchange of Class B Common Stock		145,894		-		(145,894	)		-		184		-			-			184			(184	)		-
Other comprehensive income		-		-		-			-		-		-			177			177			-			177
Net loss		-		-		-			-		-		(6,196	)		-			(6,196	)		(2,565	)		(8,761	)
Balance at March 31, 2023		15,108,725	$	1		42,046,356		$	4	$	30,137	$	(9,380	)	$	75		$	20,837		$	69,432		$	90,269
Share-based compensation		-		-		-			-		499		-			-			499			81			580
Vesting of restricted stock units		124,261		-		-			-		-		-			-			-			-			-
Exercise of warrants		225		-		-			-		3		-			-			3			-			3
Other comprehensive income		-		-		-			-		-		-			38			38			-			38
Net income (loss)		-		-		-			-		-		778			-			778			(2,412	)		(1,634	)
Balance at June 30, 2023		15,233,211	$	1		42,046,356		$	4	$	30,639	$	(8,602	)	$	113		$	22,155		$	67,101		$	89,256
Share-based compensation		-		-		-			-		500		-			-			500			72			572
Vesting of restricted stock units		19,363		-		-			-		-		-			-			-			-			-
Other comprehensive income		-		-		-			-		-		-			185			185			-			185
Net loss		-		-		-			-		-		(189	)		-			(189	)		(1,810	)		(1,999	)
Balance at September 30, 2023		15,252,574	$	1		42,046,356		$	4	$	31,139	$	(8,791	)	$	298		$	22,651		$	65,363		$	88,014

See accompanying Notes to Unaudited Consolidated Financial Statements

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SKY HARBOUR GROUP CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

	*Nine months ended*
	*September 30, 2024*			*September 30, 2023*
Cash flows from operating activities:
Net loss	$	(37,735	)	$	(12,394	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,917			1,650
Straight-line rent adjustments, net		(42	)		(188	)
Equity-based compensation		3,013			1,630
Non-cash operating lease expense		3,275			1,409
Realized gain on available for sale investments		(139	)		-
Gain on disposition of assets		(5	)		-
Unrealized loss on warrants		23,930			-
Changes in operating assets and liabilities:
Accounts receivable, prepaid expenses and other assets		270			674
Right-of-use asset initial direct costs		(17	)		(26	)
Accounts payable, accrued expenses and other liabilities		(1,102	)		982
Net cash used in operating activities		(6,635	)		(6,263	)

Cash flows from investing activities:
Purchases of long-lived assets		(1,327	)		(597	)
Payments for cost of construction		(54,050	)		(40,043	)
Proceeds from disposition of long-lived assets		10			-
Investment in notes receivable, net		-			(2,040	)
Net cash provided by acquisition of business		-			1,793
Purchases of available for sale investments		(206,883	)		(5,427	)
Purchases of held-to-maturity investments		-			(103,994	)
Proceeds from available for sale investments		199,153			14,011
Proceeds from held-to-maturity investments		71,464			138,434
Net cash provided by investing activities		8,367			2,137

Cash flows from financing activities:
Proceeds from exercise of warrants		2,960			3
Proceeds from ATM Facility		90			-
Principal payments for loans payable and finance leases		(1,343	)		(513	)
Payments for equity issuance costs		(415	)		-
Payments of employee taxes related to vested equity awards		(1,123	)		-
Net cash provided by (used in) financing activities		169			(510	)

Net increase (decrease) in cash and restricted cash		1,901			(4,636	)

Cash and restricted cash, beginning of year		72,266			41,396

Cash and restricted cash, end of period	$	74,167		$	36,760

See accompanying Notes to Unaudited Consolidated Financial Statements

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SKY HARBOUR GROUP CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

(in thousands, except share data)

1.	Organization and Business Operations

Sky Harbour Group Corporation (“SHG”) is a holding company organized under the laws of the State of Delaware and, through its main operating subsidiary, Sky Harbour LLC and its subsidiaries (collectively, “Sky”), is an aviation infrastructure development company that develops, leases and manages general aviation hangars for business aircraft across the United States. Sky Harbour Group Corporation and its consolidated subsidiaries are collectively referred to as the “Company.”

The Company is organized as an umbrella partnership-C corporation, or “Up-C”, structure in which substantially all of the operating assets of the Company are held by Sky and SHG’s only substantive assets are its equity interests in Sky (the “Sky Common Units”). As of September 30, 2024, SHG owned approximately 37.6% of the Sky Common Units and the prior holders of Sky Common Units (the “LLC Interests”) owned approximately 62.4% 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”).

2.	Basis of Presentation and Summary of Significant Accounting Policies

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 Form 10-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 the Company 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 Form 10-K for the year ended December 31, 2023, 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, 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 the business combination. 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 has been engaged in securing access to land through ground leases and developing and constructing aviation hangars. The major risks faced by the Company is its future ability to obtain additional tenants for the facilities that it constructs, and to contract with such tenants for rental income in an amount that is sufficient to meet the Company’s financial obligations, including increasing construction costs due to inflation and increased borrowing costs to the extent that the Company incurs additional indebtedness.

Liquidity and Capital Resources

As a result of ongoing construction projects and business development activities, including the development of aircraft hangars and the leasing of available hangar space, the Company has incurred recurring losses and negative cash flows from operating activities since its inception. The Company expects to continue to invest in such activities and generate operating losses in the near future.

The Company obtained long-term financing through bond and equity offerings to fund its construction, lease, and operational commitments, and believes its liquidity is sufficient to allow continued operations for more than one year after the date these financial statements are issued.

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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 Sky not owned by the Company are presented as non-controlling interests. Sky’s ownership percentage in each of its consolidated subsidiaries is 100%, unless otherwise disclosed.

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 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 project is 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 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”) Topic 842, Leases. The Company determines whether a contract contains a lease at the inception of the contract. ASC Topic 842 requires lessees to recognize lease liabilities and right-of-use (“ROU”) assets for all operating leases with terms of more than 12 months on the consolidated balance sheets. The Company has made an accounting policy election to not recognize leases with an initial term of 12 months or less on the Company’s consolidated balance sheets and will result in recognizing those lease payments in the consolidated statements of operations on a straight-line basis over the lease term. When management determines that it is reasonably certain that the Company will exercise its options to renew the leases, the renewal terms are included in the lease term and the resulting ROU asset and lease liability balances.

The Company has lease agreements with lease and non-lease components; the Company has elected the accounting policy to not separate lease and non-lease components for all underlying asset classes. The Company has not elected to capitalize any interest cost that is implicit within its operating leases into cost of construction on the consolidated balance sheet, but instead, expenses its ground lease cost as a component of operating expenses in the consolidated statements of operations.

Warrants liability

The Company accounts for its Warrants (as defined in Note 10 — Warrants) in accordance with the guidance contained in ASC Topic 815, “Derivatives and Hedging” (“ASC 815”), under which warrants that do not meet the criteria for equity classification and must be recorded as derivative liabilities. Accordingly, the Company classifies the Warrants as liabilities carried at their fair value and adjusts the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until the warrants are exercised or expire, and any change in fair value is recognized in the consolidated statement of operations.

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Revenue recognition

The Company leases the hangar facilities that it constructs to third parties. The lease agreements are either on a month-to-month basis or have a defined term and may have options to extend the term. Some of the leases contain options to terminate the lease by either party with given notice. There are no options given to the lessee to purchase the underlying assets. Rental revenue is recognized in accordance with ASC Topic 842, Leases (see Note 8 — Leases) and includes fixed payments of cash rents, which represents revenue each tenant pays in accordance with the terms of its respective lease and is recognized on a straight-line basis over the term of the lease. Rental revenue and the corresponding rent and other receivables are recorded net of any concessions and uncollectible tenant receivables for all periods presented. The Company evaluates the collectability of tenant receivables for payments required under the lease agreements. If the Company determines that collectability is not probable, the Company recognizes any difference between revenue amounts recognized to date under ASC 842 and payments that have been collected from the lessee, including any additional rent or lease termination fees, as a current period adjustment to rental revenue.

Variable lease payments consist of tenant reimbursements 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, and lease termination fees. Variable lease 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. For the three and nine months ended September 30, 2024, rental revenue includes $817 and $1,870 of variable lease payments, respectively. For the three and nine months ended September 30, 2023, rental revenue includes $920 and $1,224 of variable lease payments, respectively.

As of September 30, 2024 and December 31, 2023, the deferred rent receivable included in prepaid expenses and other assets was $501 and $367, 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. Rent received in advance consisted of $297 and $241 as of September 30, 2024 and December 31, 2023, respectively.

For the three and nine months ended September 30, 2024 the Company did not derive 10% of its revenue from any single tenant. For the three and nine months ended September 30, 2023 the Company derived approximately 46% and 38% of its revenue from two tenants, respectively.

Income Taxes

SHG is classified as a corporation for Federal income tax purposes and is subject to U.S. Federal and state income taxes. SHG includes in income, for U.S. Federal income tax purposes, its allocable portion of income from the “pass-through” entities in which it holds an interest, including Sky. The “pass-through” entities, are not subject to U.S. Federal and certain state income taxes at the entity level, and instead, the tax liabilities with respect to taxable income are passed through to the members, including SHG. As a result, prior to the Yellowstone Transaction, Sky was not subject to U.S. Federal and certain state income taxes at the entity level.

The Company follows the asset and liability method of accounting for income taxes. This method gives consideration to the future tax consequences associated with the differences between the financial accounting and tax basis of the assets and liabilities as well as the ultimate realization of any deferred tax asset resulting from such differences, as well as from net operating losses and other tax-basis carryforwards. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. When a valuation allowance is increased or decreased, a corresponding tax expense or benefit is recorded.

The Company recorded income tax expense of $0 and the effective tax rate was 0.0% for the three and nine months ended September 30, 2024 and 2023. The effective income tax rate for the three and nine months ended September 30, 2024 and 2023 differs from the federal statutory rate of 21% primarily due to a full valuation allowance against net deferred tax assets as it is more likely than not that the deferred tax assets will not be realized due to the cumulative losses sustained by the Company to date.

Recently Issued Accounting Pronouncements

Segment Reporting (Topic 280)

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The disclosure requirements included in ASU No. 2023-07 are required for all public entities, including entities with a single reportable segment. ASU No. 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and early adoption is permitted. The guidance is required to be applied on a retrospective basis. The Company is currently evaluating the impact of the standard on our consolidated financial statement disclosures.

Income Taxes (Topic 740)

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this update apply to all entities that are subject to Topic 740, Income Taxes. The standard requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. The amendments in this update are effective for annual periods beginning after December 15, 2024. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of this updated standard on its disclosures to the consolidated financial statements.

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3.	Rapidbuilt Acquisition

On May 12, 2023 (the “Option Exercise Date”), Sky exercised its option to acquire a 51% equity interest in Overflow Ltd., a Texas limited partnership (“Overflow”), and its wholly-owned operating subsidiary, Rapidbuilt, Inc., a Texas corporation (“Rapidbuilt”), for nominal consideration (the “Rapidbuilt Acquisition”). As a result of the Rapidbuilt Acquisition, Weatherford Steel Buildings Holdings LLC, a Delaware limited liability company and wholly-owned subsidiary of Sky (“WSBH”), owns a 50% limited partnership interest in Overflow, and Weatherford Steel Buildings GP LLC, a Delaware limited liability company and wholly-owned subsidiary of Sky (“WSB GP”), owns a 1% general partnership interest in Overflow.

Rapidbuilt is a manufacturer of pre-engineered steel buildings that previously entered into a supplier arrangement with Sky. Rapidbuilt and Sky’s strategic partnership has resulted in a standard set of proprietary prototype hangar designs, which are intended to deliver high-quality business aviation facilities, lower construction costs, minimize development risk, expedite permit issuance, and facilitate the implementation of refinements across Sky’s portfolio. The Company had pre-existing relationships with Rapidbuilt through a vendor agreement entered into in July 2022 to acquire construction materials related to the Company's development projects (the “Rapidbuilt Vendor Agreement”) and a revolving line of credit loan and security agreement (the “Rapidbuilt Loan Agreement”) to fund the working capital requirement of Rapidbuilt. These pre-existing relationships were effectively settled in the acquisition and the net receivable balance of $44 is included within the consideration transferred. No gain or loss was recognized in the effective settlement of the Rapidbuilt Vendor Agreement and the Rapidbuilt Loan Agreement.

The total cash purchase consideration was nominal. The Company accounted for the acquisition using the acquisition method of accounting, whereby the total purchase price was allocated to assets acquired and liabilities assumed based on respective estimated fair values.

The following tables summarize the allocation of the purchase price to the fair value of the assets acquired and liabilities assumed for the Rapidbuilt Acquisition:

	May 12, 2023
Cash	$	293
Restricted Cash		1,500
Long-lived assets		10,752
Total assets		12,545

Accounts payable, accrued expenses and other liabilities		1,427
Loans payable and finance lease liabilities		11,074
Total liabilities		12,501
Total fair value of net assets acquired		44

Effective settlement of net receivable from Rapidbuilt		44
Total consideration transferred	$	44

Following the Rapidbuilt Acquisition, substantially all of Overflow and Rapidbuilt's activities relate to the manufacturing of pre-engineering hangar structures for Sky's hangar development projects. As such, the pro-forma effect of this acquisition on revenues and earnings was not material.

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4.	Investments and Restricted Investments

Investments of the Company's cash in various U.S. Treasury securities have been classified as available-for-sale and are carried at estimated fair value utilizing Level 1 inputs as determined based upon quoted market prices.

Pursuant to provisions within the Master Indenture of the Series 2021 Bonds, as defined in Note 9 — 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. Unrealized losses on certain of the Company's investments and restricted investments are primarily attributable to changes in interest rates. The Company does not believe the unrealized losses represent impairments because the unrealized losses are due to general market factors. The Company has not recognized an allowance for expected credit losses related to its investments or restricted investments as the Company has not identified any unrealized losses attributable to credit factors during the three and nine months ended September 30, 2024. The held-to-maturity restricted investments are carried on the consolidated balance sheet at amortized cost. As of September 30, 2024, the Company has the ability and intent to hold these restricted investments until maturity, and as a result, the Company would not expect the value of these investments to decline significantly due to a sudden change in market interest rates. The fair value of the Company’s restricted investments is estimated utilizing Level 1 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 September 30, 2024 and December 31, 2023:

	*September 30, 2024*
	*Amortized Cost*		*Gross Unrealized Gains*		*Gross Unrealized Losses*			*Estimated Fair Value*
Investments, available for sale:
U.S. Treasuries	$	19,423	$	41	$	-		$	19,464
Total investments	$	19,423	$	41	$	-		$	19,464

Restricted investments, held-to-maturity:
U.S. Treasuries		16,741		63		(294	)		16,510
Total restricted investments	$	16,741	$	63	$	(294	)	$	16,510

	*December 31, 2023*
	*Amortized Cost*		*Gross Unrealized Gains*		*Gross Unrealized Losses*			*Estimated Fair Value*
Investments, available for sale:
U.S. Treasuries	$	11,554	$	312	$	-		$	11,866
Total investments	$	11,554	$	312	$	-		$	11,866

Restricted investments, held-to-maturity:
U.S. Treasuries		88,213		105		(694	)		87,624
Total restricted investments	$	88,213	$	105	$	(694	)	$	87,624

The following table sets forth the maturity profile of the Company's investments and restricted investments as of September 30, 2024:

	Investments		Restricted Investments
Due within one year	$	19,464	$	5,279
Due one year through five years		-		11,462
Total	$	19,464	$	16,741

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5.	Cost of Construction and Constructed Assets

The Company’s portfolio as of September 30, 2024 includes the following completed and in-development projects:

●

Addison Airport (“ADS”), Addison, TX (Dallas area);

●

Bradley International Airport (“BDL”), Windsor Locks, CT (Hartford area);

●

Centennial Airport (“APA”), Englewood, CO (Denver area);

●

Chicago Executive Airport (“PWK”), Wheeling, IL (Chicago area);

●

Hudson Valley Regional Airport (“POU”), Wappingers Falls, NY (New York area);

●

Miami-Opa Locka Executive Airport (“OPF”), Opa Locka, FL (Miami area);

●

Nashville International Airport (“BNA”), Nashville, TN;

●

Orlando Executive Airport (“ORL”), Orlando, FL;

●

Phoenix Deer Valley Airport (“DVT”), Phoenix, AZ;

●

Salt Lake City International Airport (“SLC”), Salt Lake City, UT;

●

San José Mineta International Airport (“SJC”), San Jose, CA;

●

Sugar Land Regional Airport (“SGR”), Sugar Land, TX (Houston area); and

●

Washington Dulles International Airport (“IAD”), Dulles, VA (Washington, DC area).

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

	*September 30, 2024*			*December 31, 2023*
Constructed assets, net of accumulated depreciation:
Buildings: BNA, OPF Phase I, SGR, and SJC Renovation	$	84,053		$	80,232
Accumulated depreciation		(4,303	)		(2,949	)
	$	79,750		$	77,283
Cost of construction:
ADS Phase I, ADS Phase II, APA Phase I, BDL Phase I, DVT Phase I, OPF Phase II, ORL Phase I, and PWK Phase I	$	120,443		$	64,212

Depreciation expense for the three months ended September 30, 2024 and 2023 totaled $456 and $449, respectively. Depreciation expense for the nine months ended September 30, 2024 and 2023 totaled $1,354 and $1,289, respectively.

6.	Long-lived Assets

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

	*September 30, 2024*			*December 31, 2023*
Ground support equipment	$	1,421		$	1,051
Machinery and equipment		3,939			3,783
Buildings		5,433			5,380
Land		1,620			1,620
Other equipment and fixtures		814			596
Purchase deposits and construction in progress		902			362
		14,129			12,792
Accumulated depreciation		(1,902	)		(963	)
	$	12,227		$	11,829

Depreciation expense for the three months ended September 30, 2024 and 2023 totaled $189 and $221, respectively. Depreciation for the nine months ended September 30, 2024 and 2023 totaled $562 and $361, respectively. Capitalized depreciation of long-lived assets included in cost of construction totaled $112 and $59 for the three months ended September 30, 2024 and 2023, respectively. Capitalized depreciation of long-lived assets included in cost of construction totaled $378 and $178 for the nine months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024 and December 31, 2023, long-lived assets included approximately $898 and $362, respectively, of purchase deposits towards long-lived assets which are not being depreciated as the assets have not been placed into service.

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7.	Supplemental Balance Sheet and Cash Flow Information

Accounts payable, accrued expenses and other liabilities

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

	*September 30, 2024*		*December 31, 2023*
Costs of construction	$	13,652	$	7,022
Employee compensation and benefits		1,892		2,438
Interest		1,739		3,474
Professional fees		1,107		1,154
Tenant security deposits		995		614
Other		1,817		2,038
	$	21,202	$	16,740

Supplemental Cash Flow Information

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

	*Nine months ended*
	*September 30, 2024*		*September 30, 2023*
Accrued costs of construction, including capitalized interest	$	13,021	$	8,593
Accrued costs of long-lived assets		17		47
Debt issuance costs and premium amortized to cost of construction		152		158

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

	*Nine months ended*
	*September 30, 2024*		*September 30, 2023*
Right-of-use assets obtained in exchange for operating lease liabilities	$	59,192	$	1,368
Net increase (decrease) in right-of-use assets and operating lease liabilities due to lease remeasurement	$	70	$	(206	)

The following table summarizes interest paid:

	*Nine months ended*
	*September 30, 2024*		*September 30, 2023*
Interest paid	$	7,496	$	7,256

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:

	*Nine months ended*
	*September 30, 2024*		*September 30, 2023*
Cash, beginning of year	$	60,257	$	2,174
Restricted cash, beginning of year		12,009		39,222
Cash and restricted cash, beginning of year	$	72,266	$	41,396

Cash, end of period	$	3,540	$	2,471
Restricted cash, end of period		70,627		34,289
Cash and restricted cash, end of period	$	74,167	$	36,760

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8.	Leases

Lessee

The table below sets forth a summary of operating lease expense for the three and nine months ended September 30, 2024 and 2023 recorded in the captions within our consolidated statement of operations:

	Three months ended				Nine months ended
	September 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
Operating expenses	$	2,541	$	972	$	6,135	$	2,875
General and administrative expenses		28		24		83		72
Total operating lease expense	$	2,569	$	996	$	6,218	$	2,947

The Company’s ground leases at airports are classified as operating leases under ASC Topic 842. Management has determined that it is reasonably certain that the Company will exercise its options to renew the leases, and therefore the renewal options are included in the lease term and the resulting ROU asset and operating lease liability balances. As the Company’s lease agreements do not provide a readily determinable implicit rate, nor is the rate available to the Company from its lessors, the Company uses its incremental borrowing rate to determine the present value of the lease payments. 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 Rapidbuilt.

The Company’s lease population does not include any residual value guarantees. The Company has operating leases that contain variable payments, most commonly in the form of common area maintenance and operating expense charges, which are based on actual costs incurred. These variable payments were excluded from the calculation of the ROU asset and operating lease liability balances since they are not fixed or in-substance fixed payments. These variable payments were not material in amount for the three and nine months ended September 30, 2024 and 2023. 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. For one of the leases, the shortfall (if any) must be paid to the lessor. See Note 15 — Commitments and Contingencies.

The Company’s ground leases have remaining terms ranging between 16 to 73 years, including options for the Company to extend the terms. These leases expire between 2040 and 2097, which include all lease extension options available to the Company. Certain of the Company's ground leases contain options to lease additional parcels of land at the Company's option within a specified period of time.

In March 2024, the Company, through a wholly-owned subsidiary of the Company, entered into a ground lease agreement (the “SJC Lease”) at SJC with the City of San Jose. The SJC Lease covers approximately 7 acres of property that contains an approximately 38,000 square foot hangar, approximately 19,000 square feet of office space, and approximately 108,000 square feet of apron and ramp space. The property at SJC includes additional land on which the Company intends to develop approximately 28,000 square feet of additional hangar space. The initial term of the SJC Lease will be 20 years from May 1, 2024, and contains a mutual option to extend the SJC Lease an additional 5 years following the expiration of the initial term.

In March 2024, the Company, through a 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 a wholly-owned subsidiary of the Company, entered into a ground lease agreement (the “IAD Lease”) at IAD with the Metropolitan Washington Airports Authority (“MWAA”). The IAD Lease covers approximately 18 acres of property at IAD. The initial term of the IAD Lease will be approximately 50 years and expire on March 31, 2074, and contains an option exercisable by the Company to extend the IAD Lease an additional 10 years following the expiration of the initial term. The property covered by the IAD Lease is split between two parcels, with rent payments associated with the first parcel (“IAD Phase I”) commencing the earlier of certificate of occupancy or 36 months from the issuance of permits for IAD Phase I, and rent payments associated with the second parcel (“IAD Phase II”) commencing the earlier of issuance of permits for IAD Phase II or five years from certificate of occupancy associated with IAD Phase I. The IAD Lease requires the Company to commence construction related to IAD Phase II within five years of the receipt of the certificate of occupancy for IAD Phase I.

In August 2024, the Company, through a wholly-owned subsidiary of the Company, entered into a ground lease agreement (the “SLC Lease”) at Salt Lake City International Airport (“SLC”) with the Salt Lake City Corporation. The SLC Lease covers approximately 8.4 acres of property at SLC. The initial term of the SLC Lease will be 30 years from the earlier of certificate of occupancy or 24 months from the expiration of the diligence period, as defined in the SLC Lease, with lease payments commencing contemporaneously with the term. The SLC Lease contains two options exercisable by the Company to extend the SLC Lease for an additional 20 years following the expiration of the initial term.

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

	*Nine months ended*
	*September 30,*		*September 30,*
	*2024*		*2023*
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$	2,883	$	1,504
Operating cash flows from finance leases		2		2
Financing cash flows from finance leases		21		11

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

Weighted Average Remaining Lease Term (in years)	*September 30, 2024*			*December 31, 2023*
Operating leases
Ground leases - Unimproved at commencement		54.6			55.8
Ground leases - Existing improvements		26.7			46.1
Equipment leases		3.8			4.0
Office leases		1.3			1.4
All operating leases		43.9			53.4
Finance leases		2.1			2.7

Weighted Average Discount Rate
Operating leases
Ground leases - Unimproved at commencement		5.41	%		5.22	%
Ground leases - Existing improvements		4.92	%		4.00	%
Equipment leases		5.28	%		5.45	%
Office leases		4.82	%		2.46	%
All operating leases		5.31	%		5.08	%
Finance leases		4.98	%		5.00	%

The Company’s future minimum lease payments required under leases as of September 30, 2024 were as follows:

Year Ending December 31,	Operating Leases			Finance Leases
2024 (remainder of year)	$	1,304		$	6
2025		5,342			24
2026		6,545			17
2027		7,225			2
2028		7,449			-
Thereafter		416,487			-
Total lease payments		444,352			49
Less imputed interest		(314,371	)		(2	)
Total	$	129,981		$	47

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Lessor

The Company leases the hangar facilities that it constructs or rents from municipal landlords to third-party tenants. These leases have been classified as operating leases. The Company does not have any leases classified as sales-type or direct financing leases. Lease agreements with tenants are either on a month-to-month basis or have a defined term with an option to extend the term. The defined term leases vary in length from one to ten years with options to renew for additional term(s) given to the lessee. There are no options given to the lessee to purchase the underlying assets.

The leases may contain variable fees, most commonly in the form of tenant reimbursements, which are recoveries of the common area maintenance and operating expenses of the property and are recognized as income in the same period as the expenses are incurred. The leases did not have any initial direct costs. The leases do not contain any restrictions or covenants to incur additional financial obligations by the lessee.

Tenant leases to which the Company is the lessor require the following non-cancelable future minimum lease payments from tenants as of September 30, 2024:

Year Ending December 31,	*Operating Leases*
2024 (remainder of year)	$	3,259
2025		11,618
2026		10,014
2027		7,164
2028		4,913
Thereafter		2,953
Total	$	39,921

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9.	Bonds payable, loans payable, and interest

Bonds payable

On May 20, 2021, Sky formed a new wholly-owned subsidiary, Sky Harbour Capital LLC (“SHC”), as a parent corporation to its wholly-owned subsidiaries that operate each of the aircraft hangar development sites under its ground leases. SHC and these subsidiaries form an Obligated Group (the “Obligated Group” or the “Borrowers”) under a series of bonds that were issued in September 2021 with a principal amount of $166.3 million (the “Series 2021 Bonds”). The members of the Obligated Group are jointly and severally liable under the Series 2021 Bonds. SHG and its other subsidiaries are not members of the Obligated Group and have no obligation to repay the bonds.

The Series 2021 Bonds are payable pursuant to a loan agreement dated September 1, 2021 between the Public Finance Authority (of Wisconsin) and the Borrowers. The payments by the Borrowers under the loan agreement are secured by a Senior Master Indenture Promissory Note, Series 2021-1 issued by the Obligated Group under an indenture (the “Master Indenture”). The obligations of the Borrowers are collateralized by certain leasehold and subleasehold deeds of trust or mortgages on the Borrowers’ interests in the development sites and facilities being constructed at each airport where the Borrowers hold ground leases. In addition, the Borrowers have assigned, pledged and granted a first priority security interest in all funds held under the Master Indenture and all right, title and interest in the gross revenues of the Borrowers. Furthermore, Sky, Sky Harbour Holdings LLC and SHC have each pledged as collateral its respective ownership interest in any of the Borrowers.

The Series 2021 Bonds have principal amounts, interest rates, and maturity dates as follow: $21.1 million bearing interest at 4.00%, due July 1, 2036; $30.4 million bearing interest at 4.00%, due July 1, 2041; and $114.8 million bearing interest at 4.25%, due July 1, 2054. The Series 2021 Bond that has a maturity date of July 1, 2036 was issued at a premium, and the Company received bond proceeds that were $0.2 million above its face value. The bond premium is being amortized as a reduction of interest expense over the life of the bond. Interest is payable on each January 1 and July 1, commencing January 1, 2022. Principal repayments due under the Series 2021 Bonds are paid annually, commencing July 1, 2032.

On March 22, 2023, SHC elected to modify the scope of the Series 2021 Bonds pursuant to the terms of the Master Indenture, in order to reallocate a portion of the proceeds of the Series 2021 Bonds to its project site located at ADS (the “ADS Project”) . In connection with the election to modify the scope of the Series 2021 PABs to include the ADS Project, (i) Addison Hangars LLC (“Sky Harbour Addison”) and OPF Hangars Landlord LLC (“OPF Hangars”) joined as members of the Obligated Group, (ii) Sky Harbour Holdings LLC contributed its membership interest in OPF Hangars to SHC, (iii) SHC pledged its equity interest in each of Sky Harbour Addison and OPF Hangars to the Master Trustee as security for the obligations under the Series 2021 Bonds, (iv) Sky Harbour Addison granted to the Master Trustee a mortgage on its leasehold interest in the real property comprising the ADS Project, (v) OPF Hangars granted the Master Trustee a mortgage on its leasehold interest in the real estate comprising the project located in Opa Locka, Florida, and (vi) Sky Harbour Services LLC, a wholly-owned subsidiary of the Company, has agreed to waive all management fees and development fees during the construction period of the projects associated with the Series 2021 Bonds.

As of September 30, 2024 and December 31, 2023, the fair value of the Company’s Series 2021-1 Bonds was approximately $141.5 million and $116.5 million, respectively. As of September 30, 2024 and December 31, 2023, the fair value of the Company’s bonds is estimated utilizing Level 2 inputs including prices for the bonds on inactive markets.

The following table summarizes the Company’s Bonds payable as of September 30, 2024 and December 31, 2023:

	*September 30, 2024*			*December 31, 2023*
Bonds payable:
Series 2021 Bonds Principal	$	166,340		$	166,340
Premium on bonds		249			249
Bond proceeds		166,589			166,589
Debt issuance costs		(4,753	)		(4,753	)
Accumulated amortization of debt issuance costs and accretion of bond premium		736			584
Total Bonds payable, net	$	162,572		$	162,420

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Loans Payable and Finance Leases

The following table summarizes the Company's loans payable and finance lease liabilities as of September 30, 2024 and December 31, 2023:

		September 30, 2024					December 31, 2023
	Maturity Dates	Weighted-Average Interest Rates			Balance		Weighted-Average Interest Rates			Balance
Vista Loan	December 2025		8.60	%	$	7,610		8.53	%	$	8,768
Equipment loans	August 2026 - September 2028		8.01	%		311		8.09	%		475
Finance leases	September 2024 - July 2027		4.98	%		47		5.00	%		67
Total Loans payable and finance leases			8.55	%	$	7,968		8.47	%	$	9,310

Interest

The following table sets forth the details of interest expense:

	Three months ended						Nine months ended
	September 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
Interest	$	1,912		$	1,969		$	5,763		$	5,522
Accretion of bond premium and amortization of debt issuance costs		50			52			152			158
Total interest incurred		1,962			2,021			5,915			5,680
Less: capitalized interest		(1,785	)		(1,787	)		(5,357	)		(5,364	)
Interest expense	$	177		$	234		$	558		$	316

10.

Warrants

SHG's legal predecessor, Yellowstone Acquisition Company (“YAC”), issued to third-party investors 6,799,439 warrants which entitled the holder to purchase one share of Class A Common Stock at an exercise price of $11.50 per share (the “Public Warrants”). In addition, 7,719,779 private placement warrants were sold to BOC Yellowstone LLC (the “Sponsor”). Each Private Warrant allows the Sponsor to purchase one share of Class A Common Stock at an exercise price of $11.50 per share. The Public Warrants and Private Warrants remain outstanding under the same terms and conditions to purchase shares of the Company’s Class A Common Stock. The terms of the Private Warrants are identical to those of the Public Warrants, except for that so long as the Private Warrants are held by the Sponsor or its permitted transferees, they may be exercised on a cashless basis.

In connection with the Securities Purchase Agreement (the “Private Placement Purchase Agreement”) entered into on November 1, 2023 with certain investors, the Company issued to third-party investors 1,541,600 warrants (the “PIPE Warrants”, and together with the Public Warrants and the Private Warrants, the “Warrants”). The PIPE Warrants are equivalent in form and substance to the Company’s Public Warrants.

The Warrants contain an exercise price of $11.50 per share and expire on January 25, 2027. The Company determined the fair value of its Public Warrants and PIPE Warrants based on the publicly listed trading price as of the valuation date. Accordingly, these warrants are classified as Level 1 financial instruments. As the terms of the Private Warrants are identical to those of the Public Warrants, the Company determined the fair value of its Private Warrants based on the publicly listed trading price of the Public Warrants as of the valuation date and have classified the Private Warrants as Level 2 financial instruments.

During the nine months ended September 30, 2024, 257,342 Warrants were exercised, resulting in approximately $3.0 million of proceeds. There were no warrants exercised during the three months ended September 30, 2024. As of September 30, 2024, 15,803,001 Warrants remain outstanding.

The closing price of the Warrants was $2.25 and $0.75 per warrant on September 30, 2024 and December 31, 2023, respectively. The aggregate fair value of the outstanding Warrants was approximately $35.6 million and $12.0 million as of September 30, 2024 and December 31, 2023, respectively. During the three months ended September 30, 2024, the Company recorded an unrealized loss associated with the change in fair value of the Warrants of approximately $16.0 million. During the three months ended September 30, 2023, the Company recorded an unrealized gain of approximately $1.6 million. During the nine months ended September 30, 2024 and 2023, the Company recorded unrealized losses associated with the change in fair value of the Warrants of approximately $23.9 million and $0, respectively.

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11.

Equity

Common Equity

As of September 30, 2024, there were 25,326,328 and 42,046,356 shares of Class A Common Stock and Class B Common Stock outstanding, respectively. Holders of Class A Common Stock and Class B Common Stock vote together as a single class on all matters submitted to the stockholders for their vote or approval, except as required by applicable law. Holders of Class A Common Stock and Class B Common Stock are entitled to one vote per share on all matters submitted to the stockholders for their vote or approval.

The holders of Class A Common Stock are entitled to receive dividends, as and if declared by the Company’s Board of Directors out of legally available funds. With respect to stock dividends, holders of Class A Common Stock must receive Class A Common Stock. The holders of Class B Common Stock do not have any right to receive dividends other than stock dividends consisting of shares of Class B Common Stock, as applicable, in each case paid proportionally with respect to each outstanding share of Class B Common Stock.

At-the-Market Facility

On March 27, 2024, the Company entered into an At Market Issuance Sales Agreement (the “ATM Agreement”) with B. Riley Securities, Inc. (“B. Riley”) with respect to an “at the market” offering program (the “ATM Facility”), under which the Company may, from time to time, at its sole discretion, issue and sell through B. Riley, acting as sales agent, up to $100 million of shares of Class A Common Stock. Pursuant to the ATM Agreement, the Company may sell the shares through B. Riley by any method permitted that is deemed an “at the market” offering as defined in Rule 415 under the Securities Act of 1933, 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. During the three months ended September 30, 2024, the Company sold no shares of Class A Common Stock under the ATM Facility. During the nine months ended September 30, 2024, the Company sold 7,407 shares of Class A Common Stock under the ATM Facility at a weighted-average sales price of $12.42.

The Company is not obligated to sell any shares under the ATM Agreement. The offering of shares pursuant to the ATM Agreement will terminate upon the earlier to occur of (i) the issuance and sale, through B. Riley, of all of the shares subject to the ATM Agreement and (ii) termination of the ATM Agreement in accordance with its terms.

In connection with entering into the ATM Agreement, on March 27, 2024, the Company and B. Riley terminated (the “B. Riley Termination”) the Common Stock Purchase Agreement (the “B. Riley Stock Purchase Agreement”) dated August 18, 2022. As a result of the B. Riley Termination, the Company recognized approximately $0.1 million of expense associated with the write-off of deferred equity issuance costs. From August 18, 2022 through March 27, 2024, the Company had not directed B. Riley to purchase any Class A Common Stock pursuant to the B. Riley Stock Purchase Agreement.

Private Placement and Securities Purchase Agreement

On September 16, 2024, the Company entered into a Securities Purchase Agreement (the “2024 Private Placement Purchase Agreement”) with certain investors (collectively, the “Initial Investors”), pursuant to which the Company agreed to sell and issue to the Initial Investors at an initial closing an aggregate of 3,352,106 shares (the “Initial PIPE Shares”) of the Company’s Class A Common Stock for an aggregate purchase price of approximately $31.8 million (the “Initial Closing”), and agreed to sell and issue to the Initial Investors at a second closing, at the option of the Initial Investors, up to an aggregate of number of shares equal to the number of each such Initial Investor's Initial PIPE Shares purchased in the Initial Closing (the “Second Closing PIPE Shares”) at the same purchase price of $9.50 per share (the “Second Closing” and, together with the Initial Closing, the “PIPE Financing”).

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

The 2024 Private Placement Purchase Agreement includes certain covenants, including a limitation on the Company’s use of the net proceeds from the PIPE Financing and a restriction on the Company’s issuance of additional shares of Class A Common Stock for a period of 90 days following the Initial Closing Date, as defined in Note 17 — Subsequent Events, subject to certain exceptions.

The Initial Closing occurred on October 25, 2024. See Note 17 — Subsequent Events.

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 September 30, 2024 and represents the Sky Common Units held by holders other than SHG. The holders of LLC Interests may exchange Sky Common Units along with an equal number of Class B Common Shares, for Class A Common Shares on the Company. The LLC Interests do not have the option to redeem their Sky Common Units for cash or a variable number of Class A Common Shares, nor does SHG have the option to settle a redemption in such a manner. As of September 30, 2024, the LLC interests owned approximately 62.4% of the Sky Common Units outstanding.

The former majority shareholder's ownership in Overflow is presented as a non-controlling interest within the Equity section of the consolidated balance sheet. As of September 30, 2024, the former majority shareholder owned approximately 49% of the partnership interests in Overflow.

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12.

Equity Compensation

Restricted Stock Units (“RSUs”)

In February 2024, the Company granted time-based RSUs to certain employees under the Company’s 2022 Incentive Award Plan. 430,002 of time-based awards were granted at a grant date fair value of $12.33, which will vest ratably over a four-year period beginning on the first anniversary of the grant date and ending on February 15, 2028.

During the three and nine months ended September 30, 2024, the Company recognized stock compensation expense of approximately $0.8 million and $2.7 million, respectively, associated with all RSU awards, which is recorded within General and Administrative Expenses within the statement of operations. During the three and nine months ended September 30, 2023, the Company recognized stock compensation expense of $0.5 million and $1.4 million, respectively. As of September 30 2024, there are approximately 958,707 unvested RSUs outstanding with a weighted average grant date fair value of $9.76. The unrecognized compensation costs associated with all unvested RSUs at September 30, 2024 was approximately $7.6 million that is expected to be recognized over a weighted-average future period of 2.7 years.

Non-qualified Stock Options (“NSOs”)

In February 2024, the Company granted to certain employees options to purchase 438,781 shares of Class A Common Stock at an exercise price of $11.63 under the Company's 2022 Incentive Award Plan. The NSOs vest ratably over a four-year period beginning on the sixth anniversary of the grant date and have a term of 10 years. The options were valued at $7.32 using a Black -Scholes pricing model. During the three and nine months ended September 30, 2024, the Company recognized stock compensation expense of approximately $0.1 million and $0.2 million, respectively, associated with all NSO awards. The unrecognized compensation costs associated with all unvested NSOs at September 30, 2024 was approximately $3.0 million that is expected to be recognized over a weighted-average future period of 8.4 years.

Sky Incentive Units

The Company recognized equity-based compensation expense relating to awarded equity units of Sky (the “Sky Incentive Units”) of $45 and $136 for the three and nine months ended September 30, 2024, respectively, and $72 and $238 for the three and nine months ended September 30, 2023, respectively. Expense associated with the Sky Incentive Units is recorded within General and Administrative Expenses 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 September 30, 2024, there was $0.1 million of total unrecognized compensation expense that is expected to be recognized over a weighted-average future period of 0.7 years.

13.

Earnings (loss) per Share

Basic earnings (loss) per share of Class A Common Stock is computed by dividing net income (loss) attributable to SHG by the weighted-average number of shares of Class A Common Stock outstanding during the period. Diluted net income (loss) per share of Class A Common Stock is computed by dividing net income (loss) attributable to SHG, adjusted for the assumed exchange of all potentially dilutive securities, by the weighted-average number of shares of Class A Common Stock outstanding adjusted to give effect to potentially dilutive shares using the treasury stock or if-converted method as appropriate. Shares of the Company’s Class B Common Stock do not participate in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B Common Stock under the two-class method has not been presented.

	Three Months Ended						Nine Months Ended
	September 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
Numerator:
Net loss	$	(20,699	)	$	(1,999	)	$	(37,735	)	$	(12,394	)
Less: Net loss attributable to non-controlling interests		(2,145	)		(1,810	)		(6,003	)		(6,788	)
Basic and diluted net loss attributable to Sky Harbour Group Corporation shareholders		(18,554	)		(189	)		(31,732	)		(5,606	)

Denominator:
Basic and diluted weighted average shares of Class A Common Stock outstanding		25,055			15,245			24,689			15,132

Loss per share of Class A Common Stock – Basic and diluted	$	(0.74	)	$	(0.01	)	$	(1.29	)	$	(0.37	)

Potentially dilutive shares excluded from the weighted-average shares used to calculate the diluted net loss per common share due to the Company's net loss position were as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
Shares subject to unvested restricted stock units		959		957		959		957
Shares issuable upon the exercise of unvested stock options		439		-		439		-
Shares issuable upon the exercise of Warrants		15,803		14,519		15,803		14,519
Shares issuable upon the exchange of Class B Common Stock		42,046		42,046		42,046		42,046
Shares issuable upon the exercise and exchange of Sky Incentive Units		2,156		2,808		2,156		2,808

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14.

Accumulated Other Comprehensive Income

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

	Unrealized gain on Available-for-sale Securities			Total
Balance as of December 31, 2023	$	312		$	312
Other comprehensive income before reclassifications		503			503
Amounts reclassified to other (income) expense		(774	)		(774	)
Balance as of September 30, 2024	$	41		$	41

	Unrealized gain on Available-for-sale Securities			Total
Balance as of December 31, 2022	$	(102	)	$	(102	)
Other comprehensive income before reclassifications		521			521
Amounts reclassified to other (income) expense		(121	)		(121	)
Balance as of September 30, 2023	$	298		$	298

15.

Commitments and Contingencies

In addition to the lease payment commitments discussed in Note 8 — Leases, 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 APA Lease requires the Company to improve the property in accordance with a development plan included in the lease and to complete such improvements within 24-months of the issuance of permitting documents. Construction began on the APA Phase I project in October 2022.

The DVT Lease requires approximately $15.3 million and $14.6 million of improvements to be made for Phase I and for Phase II, if such option is exercised, respectively, within 12-months after receiving permitting documents for each Phase, but in no event later than May 2026. Construction began on the DVT Phase I project in December 2022.

The Company has committed to spend $10.0 million in capital improvements on the ADS construction project. If this amount is not expended, the Company is subject to a reduction of the term of the lease.

The PWK Lease contains a requirement that the Company must commence construction within six months of the issuance of permits and must complete construction within 18 months of construction commencement. If the Company is unable to adhere to the prescribed timeline and unable to receive an extension from PWK, the PWK Lease is subject to termination.

The SJC Lease contains customary milestones by which the Company must complete additional construction.

The ORL Lease requires that the Company construct $30 million of improvements in its initial phase of construction within 24 months of the effective date of the lease. The ORL Lease contains other customary milestones by which the Company must commence and complete subsequent phases of construction.

The SLC Lease requires that the Company make minimum capital improvements of $40 million.

The Company has contracts for construction of the APA Phase I, DVT Phase I, and ADS Phase I projects. The Company may terminate any of the contracts or suspend construction without cause. There are no termination penalties under the construction contracts.

In addition to the matters described in this note, the Company is involved is various legal proceedings and claims in the ordinary course of its business. Although the Company cannot predict with certainty the ultimate resolution of these matters, which involve judgements that are inherently subjective, the Company does not expect that the ultimate disposition of such other contingencies or matters will materially affect its financial condition, results of operations or cash flows.

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16.

Related Party Transactions

On September 20, 2021, the Company entered into a non-exclusive agreement with Echo Echo, LLC, a related party to the Founder and CEO, for the use of a Beechcraft Baron G58 aircraft. The effective date of the agreement was September 8, 2021 and the agreement automatically renews annually. The agreement can be terminated without penalty if either party provides 35 days written notice, or if the aircraft is sold or otherwise disposed of. The Company is charged per flight hour of use along with all direct operating costs. Additionally, the Company is responsible for reimbursing its pro rata share of maintenance, overhead and insurance costs of the aircraft.

On September 19, 2024, the Company entered into an additional non-exclusive agreement with Echo Echo, LLC for the use of an Epic E1000GX aircraft. The effective date of the agreement was August 30, 2024 and the agreement automatically renews annually. The agreement can be terminated without penalty if either party provides 30 days written notice, or if the aircraft is sold or otherwise disposed of. Additionally, the Company is responsible for reimbursing its pro rata share of the direct operating costs of the aircraft, exclusive of maintenance and insurance.

For the three and nine months ended September 30, 2024, the Company recognized $108 and $195 of expense, respectively, within General and administrative expense under the terms of these agreements. For the three and nine months ended September 30, 2023, the Company recognized $41 and $157 of expense, respectively, associated with these agreements. The related liability is included in Accounts payable, accrued expenses and other liabilities on the consolidated balance sheet as of September 30, 2024.

For the three and nine months ended September 30, 2024, the Company recognized $0 of expense for consulting services, to a company that employed the chief financial officer until prior to July 1, 2021. The Company recognized $3 and $98 of expense during the three and nine months ended September 30, 2023, respectively, to the same company.

17.

Subsequent Events

Private Placement and Securities Purchase Agreement

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

The Investors have the option to purchase up to an aggregate of 3,955,790 Second Closing PIPE Shares for an aggregate purchase price of up to $37.6 million at the Second Closing. Each Investor has the option to purchase in the Second Closing up to a number of Second Closing PIPE Shares equal to the number of such Initial Investor’s Initial PIPE Shares purchased in the Initial Closing, at the same purchase price of $9.50 per share. The amount of Second Closing PIPE Shares, if any, to be issued at the Second Closing will be determined by each Investor in its sole discretion pursuant to each of their allocations, and the Second Closing will occur, if at all, at the sole discretion of the Investors, on or before December 20, 2024 (the “Second Closing Date”), subject to customary closing conditions. To the extent any Investor does not elect to purchase its full allocation of Second Closing PIPE Shares, such Second Closing PIPE Shares (the “Shortfall Shares” and, together with the First Closing PIPE Shares and the Second Closing PIPE Shares, the “PIPE Shares”) may be purchased by other Investors who have elected to purchase their full allocation of Second Closing PIPE Shares (the “Full Option Investors”). Any Shortfall Shares will be divided among the Full Option Investors on a pro rata basis based on the Initial PIPE Shares to be purchased by such Full Option Investors in the Initial Closing. To the extent any Full Option Investor does not elect to purchase its full allocation of Shortfall Shares, such Shortfall Shares may be purchased by Altai Capital Management, L.P. or its affiliates, as it may designate in its sole discretion.

On the Initial Closing Date, the Investors entered into a customary lock-up agreement that restricts sales of shares of Class A Common Stock by the Investors for a period of six months beginning on the Initial Closing Date, subject to certain exceptions.

Pursuant to the terms of the 2024 Private Placement Purchase Agreement, on the Initial Closing Date, the Company entered into a Registration Rights Agreement (the “2024 PIPE Registration Rights Agreement”) with the Investors. Pursuant to the 2024 PIPE Registration Rights Agreement, the Investors are entitled to certain customary registration rights, and the Company is required to prepare and file a resale registration statement with the SEC to register the resale of the PIPE Shares and to use its best efforts to cause such registration statement to be declared effective by the SEC by the earlier of (i) the later of (x) the 180th calendar day following the Initial Closing Date, or on the next succeeding business day if such date falls on a day that is not a business day and (y) the 15th calendar day following the Second Closing Date, if any, or on the next succeeding business day if such date falls on a day that is not a business day, and (ii) the 5th business day after the date the Company is notified (orally or in writing whichever is earlier) by the SEC that such registration statement will not be “reviewed” or will not be subject to further review; provided, however, that the Company shall have 10 additional business days if required to update for a quarterly filing.

POU Ground Lease Extension

On November 7, 2024, the Company, through a wholly-owned subsidiary of the Company, executed an amendment to its ground lease agreement at Hudson Valley Regional Airport (“POU”) with the County of Duchess, New York (the “Amended POU Lease”). The Amended POU Lease extended the term of such ground lease from 15 year to 40 years from the completion of construction, with lease payments commencing upon the earlier of completion of construction or December 2025. The Amended POU Lease contains an option exercisable by the Company to extend the Amended POU Lease an additional 10 years following the expiration of the initial term.

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ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and the notes included elsewhere in this Quarterly Report on Form 10-Q (this “Form 10-Q”), as well as the information contained in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities Exchange Commission (the “SEC”) on March 27, 2024 (the “Form 10-K”), which is accessible on the SEC’s website at www.sec.gov.

Cautionary Note Regarding Forward-Looking Statements

This Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements can be identified by the use of forward-looking terminology, including the words “believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “may,” “might,” “will,” “potential,” “projects,” “predicts,” “continue,” or “should,” or, in each case, their negative or other variations or comparable terminology. There can be no assurance that actual results will not materially differ from expectations. These statements are based on management’s current expectations, but actual results may differ materially due to various factors, including, but not limited to:

	•	expectations regarding the Company’s strategies and future financial performance, including the Company’s future business plans or objectives, prospective performance and commercial opportunities and competitors, services, pricing, marketing plans, operating expenses, market trends, revenues, liquidity, cash flows and uses of cash, capital expenditures, and the Company’s ability to invest in growth initiatives;

	•	the effects of general economic conditions, including inflation, rising interest rates, and availability of construction materials and labor for our development projects;

	•	our limited operating history makes it difficult to predict future revenues and operating results;

	•	our ability to implement our construction costs mitigation strategies;

	•	changes in applicable laws or regulations;

	•	the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors; and

•

our financial performance.

The forward-looking statements contained in this Form 10-Q are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) and other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors” in the Form 10-K. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. These risks and others described in the Form 10-K may not be exhaustive.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and developments in the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this prospectus. In addition, even if our results or operations, financial condition and liquidity, and developments in the industry in which we operate are consistent with the forward-looking statements contained in this prospectus, those results or developments may not be indicative of results or developments in subsequent periods.

Overview and Background

We are an aviation infrastructure development company building the first nationwide network of home basing hangar campuses for business aircraft. We develop, lease, and manage general aviation hangars across the United States, targeting airfields in markets with significant aircraft populations and high hangar demand. Our home basing hangar campuses feature exclusive private hangars and a full suite of dedicated services specifically optimized for home-based, versus transient, aircraft.

The physical footprint of the U.S. business aviation fleet grew by almost 28 million square feet in the ten years preceding the beginning of the COVID-19 pandemic, with hangar supply lagging dramatically, especially in key growth markets. As the fleet of private jets in the United States continues to grow, with recent new aircraft deliveries exceeding retirements, demand for hangar space is at a premium in part because new jets require more square footage of hangar space and the pace of new hangar construction has lagged behind the demand. The cumulative square footage of the business aircraft fleet in the United States increased 50% between 2010 and 2021. Moreover, over that same period, there was an 81% increase in the square footage of larger private jets – those with greater than a 24-foot tail height. A recent study conducted by a business aircraft manufacturer forecasted that business aircraft will only continue to grow in the next ten years, with up to 8,500 new business jet deliveries worth over $275 billion expected to be delivered between 2024 and 2033, further supported by data from the major business aviation manufacturers that suggest the current order backlog for new business aviation aircraft is over $49 billion.

These larger footprint aircraft do not fit in much of the existing hangar infrastructure and impose stacking challenges and constraints in the traditional shared or community hangars operated by FBOs. The addition of winglets (the vertical extensions on aircraft wingtips) on most modern business jets inhibits wing-over-wing storage. Aircraft hangars are in high demand and short supply, with some airports compiling waiting lists that can exceed several years.

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We believe our scalable, real estate-centric business model is uniquely optimized to capture this market opportunity and address the increased imbalance between the supply and demand for private jet storage. We intend to capitalize on the existing hangar supply constraints at major U.S. airports by targeting high-end tenants in markets where there is a shortage of private and FBO hangar space, or where such hangars are or are becoming obsolete.

We expect to realize economies of scale in construction through a prototype hangar design replicated at our hangar campuses across the United States. This allows for centralized procurement, straightforward permitting processes, efficient development processes, and the best hangar in business aviation. Unlike a service company, our revenues are mostly derived from long-term rental agreements, offering stability and forward visibility of revenues and cash flows. This allows the Company to fund its development through the public bond market, providing capital efficiency and mitigating refinance risk.

We seek to develop our home basing hangar campuses on long-term ground leases (or sub-leases thereof) at airports with suitable infrastructure serving metropolitan centers across the United States. We lease each of our properties under long-term ground leases.

The table below presents certain information with respect to our portfolio as of September 30, 2024.

●

Addison Airport (“ADS”), Addison, TX (Dallas area);

●

Bradley International Airport (“BDL”), Windsor Locks, CT (Hartford area);

●

Centennial Airport (“APA”), Englewood, CO (Denver area);

●

Chicago Executive Airport (“PWK”), Wheeling, IL (Chicago area);

●

Hudson Valley Regional Airport (“POU”), Wappingers Falls, NY (New York area);

●

Miami-Opa Locka Executive Airport (“OPF”), Opa Locka, FL (Miami area);

●

Nashville International Airport (“BNA”), Nashville, TN;

●

Orlando Executive Airport (“ORL”), Orlando, FL;

●

Phoenix Deer Valley Airport (“DVT”), Phoenix, AZ;

●

Salt Lake City International Airport (“SLC”), Salt Lake City, UT;

●

San José Mineta International Airport (“SJC”), San Jose, CA;

●

Sugar Land Regional Airport (“SGR”), Sugar Land, TX (Houston area); and

●

Washington Dulles International Airport (“IAD”), Dulles, VA (Washington, DC area).

PROPERTIES IN OPERATION

Facility	Completion Date	Hangars		Rentable Square Footage		% of Total Rentable Square Footage			Occupancy at September 30, 2024
SGR	December 2020		7		66,080		16.3	%		100.0	%
BNA	November 2022		10		149,069		36.7	%		91.6	%
OPF Phase I	February 2023		12		160,092		39.5	%		100.0	%
SJC	Existing facility		1		41,464		7.5	%		100.0	%
Total/Weighted Average			30		416,705		100.0	%		97.0	%

PROPERTIES IN DEVELOPMENT

		Projected	Projected	Estimated Total
		Construction	Completion	Project Cost		Rentable
Facility	Status	Start ⁽¹⁾	Date ⁽¹⁾	($mm) ⁽¹⁾	Hangars ⁽¹⁾	Square Footage ⁽¹⁾
ADS Phase I	In Construction	Q4 2023	Q1 2025	32.9 - 37.0	6	137,835
ADS Phase II	Predevelopment	Q1 2025	Q4 2025	31.8 - 35.8	4	116,420
APA Phase I	In Construction	Q4 2022	Q1 2025	44.8 - 50.8	9	130,550
APA Phase II	Predevelopment	Q4 2025	Q2 2026	34.3 - 38.3	3	107,135
BDL Phase I	Predevelopment	Q2 2025	Q2 2026	33.2 - 37.2	3	125,400
DVT Phase I	In Construction	Q4 2022	Q1 2025	48.3 - 53.6	8	134,270
DVT Phase II	Predevelopment	Q3 2025	Q3 2026	34.6 - 38.6	6	123,646
IAD Phase I	Predevelopment	Q3 2025	Q3 2026	55.0 - 60.0	4	174,070
OPF Phase II	In Development	Q1 2025	Q2 2026	35.8 - 39.8	3	155,100
ORL Phase I	Predevelopment	Q3 2025	Q4 2026	31.9 - 35.9	3	155,100
POU Phase I	Predevelopment	Q2 2025	Q2 2026	28.2 - 32.2	2	103,400
POU Phase II ⁽²⁾	Predevelopment	TBD	TBD	TBD	TBD	TBD
PWK Phase I	Predevelopment	Q4 2025	Q3 2026	69.1 - 73.1	4	206,800
SJC Phase II	Predevelopment	Q2 2026	Q2 2027	21.0 - 24.0	1	28,235
SLC	Predevelopment	Q3 2025	Q3 2026	60.1 - 70.5	4	206,800
Total				$561.0 - 626.8	60	1,904,761

	⁽¹⁾	^{Our projections associated with the commencement and completion of construction, estimated total construction cost, hangars, and rentable square footage of our properties in development are inherently subjective and require judgement to estimate. We believe that our estimates of construction costs and timelines are subject to variability based on various factors including, but not limited to, changes in anticipated site plans, hangar mix, hangar specifications, executed guaranteed maximum price construction contracts, and general market conditions.}
	⁽²⁾	^{We have not yet formed preliminary estimates regarding the projected construction timeline, total construction costs, or hangar mix associated with our POU Phase II development project.}

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Recent Developments

In August 2024, we entered into the SLC Lease at SLC with the Salt Lake City Corporation. The SLC Lease covers approximately 8.4 acres of property at SLC. The initial term of the SLC Lease will be 30 years from the earlier of certificate of occupancy or 24 months from the expiration of the diligence period, as defined in the SLC Lease, with lease payments commencing contemporaneously with the term. The SLC Lease contains two options exercisable by us to extend the SLC Lease for an additional 20 years following the expiration of the initial term. Under the terms of the SLC Lease, we are required to make minimum capital improvements of $40 million.

In September 2024, we entered into the 2024 Private Placement Purchase Agreement with the Initial Investors, pursuant to which, among other things, we agreed to sell and issue to the Initial Investors at an initial closing an aggregate of 3,352,106 Initial PIPE Shares for an aggregate purchase price of approximately $31.8 million. In October 2024, the Additional Investors each executed a joinder to the 2024 Private Placement Purchase Agreement, pursuant to which the Additional Investors agreed to purchase, and the Company agreed to sell, an aggregate of 603,684 additional shares of Class A Common Stock at the Initial Closing for an aggregate purchase price of approximately $5.7 million. The Initial Closing of the 2024 Private Placement Purchase Agreement occurred in October 2024, and we sold 3,955,790 First Closing PIPE Shares to the Investors at an aggregate purchase price of approximately $37.6 million.

Factors That May Influence Future Results of Operations

Revenues

Our revenues are derived from rents we earn pursuant to the lease agreements we enter into with our tenants. Our ability to expand through new ground leases and tenant leases at airports is integral to our long-term business strategy and requires that we identify and consummate suitable new ground leases or investment opportunities in real estate properties for our portfolio that meet our investment criteria and are compatible with our growth strategy. Our ability to enter into new ground leases and tenant leases on favorable terms, or at all, may be adversely affected by a number of factors. We believe that the business environment of the industry segments in which our tenants operate is generally positive for tenants. However, our existing and potential tenants are subject to economic, regulatory and market conditions that may affect their level of operations and demand for hangar space, which could impact our results of operations. For example, during the year ended December 31, 2023, a tenant renting two hangars at OPF made the determination that it was necessary to change its business plans in the greater Miami market, which ultimately resulted in the negotiated settlement of the tenant’s lease with us and their exit from our OPF hangar campus. Accordingly, we actively monitor certain key factors, including changes in those factors (fuel prices, new aircraft deliveries, hangar rental rates) that we believe may provide early indications of conditions that may affect the level of demand for new leases and our lease portfolio. See “—Risks Related to our Business and Operations” within the Form 10-K for more information about the risks related to our tenants and our lease payments.

Ground Lease Expense

One of our largest expenses is the lease payments under our ground leases. For the nine months ended September 30, 2024 and 2023, our operating lease expense for ground leases was $6.0 million and $2.8 million, respectively. We elect to expense rather than capitalize ground lease expense incurred at hangar campus sites under development and will incur expense under U.S. GAAP regardless of whether our ground leases defer cash rent payments until completion of construction. As we enter into new ground leases at new airport sites, our ground lease expense and associated cash payments to airport landlords will ultimately continue to increase into the future. If airport landlords increase the per acre cost of the ground lease of our target campuses, the operating margins at potential target developments may be impacted negatively.

Interest Expense

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 benchmark interest rates have been reduced and additional reductions are expected in the coming quarters, we do not yet know the level of such reductions and the ultimate impact on our borrowing costs. We expect to issue additional debt to finance future site developments and 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.

General and Administrative Expenses

The general and administrative expenses reflected in our statement of operations are reflective of the professional, legal and consulting fees, payroll costs, and other general and administrative expenses, including those necessary to support our business as a public company such as expenses associated with corporate governance, SEC reporting, and other compliance matters. While we expect that our general and administrative expenses will rise in some measure as our portfolio of campuses grows, we expect that such expenses as a percentage of our portfolio will decrease over time due to efficiencies, economies of scale, insourcing of job functions, and cost control measures.

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Construction Material Costs and Labor

When constructing our home basing hangar campuses, we use various materials, assemblies, and labor components. We contract for our materials and labor with various general contractors under guaranteed maximum price (GMP) contracts upon receipt of building permits. This allows us to mitigate certain inflationary pressures associated with increases in certain building materials and labor costs between the time construction begins at a hangar campus and the time it is completed. Typically, the materials and most of the components used to construct our hangar campuses are readily available in the United States. We continue to monitor the supply markets and ensure robust competition to achieve the best prices available. Typically, the price changes that most significantly influence our operations are price increases in steel, concrete, and labor. We believe that recent inflationary pressures and market conditions will lead to continued increases in construction costs and market rental rates for hangars within our development projects. However, there can be no assurance that we will be able to increase the lease rates for the hangars within our hangar campuses to absorb these increased costs and/or delays, if at all.

In May 2023, we acquired a controlling interest in Rapidbuilt, a metal building and hangar door manufacturer, that we expect will ultimately result in an increase in quality and a reduction in the overall cost of the metal building and hangar door components at future development projects. We expect that over time this vertical integration will enable us to deliver metal buildings to most of our development sites in shorter times as compared to the anticipated lead times associated with conventional metal building fabricators. We believe internal building fabrication will provide us opportunities to aggressively target continued schedule compression at most of our development projects in the future. In December 2023, we engaged several structural engineering firms to perform an independent peer review of the hangar buildings designed for our DVT Phase I and APA Phase I development projects. The independent peer reviews determined a significant design defect existed within our prototype hangar building designs that requires retrofitting to both meet and exceed our standards and the respective local building codes. The anticipated retrofitting efforts are also expected to be applied to ADS Phase I, and we project that the aggregate additional cost of such retrofits could total between $26 to $28 million and require an additional three to five months of construction duration for each project impacted. Given the planned design enhancements at our APA Phase I, DVT Phase I, and ADS Phase I development projects, we anticipate that our total construction costs for these projects to each be greater than our original estimates, and outside of the scope of the guaranteed maximum price construction contracts. In March 2024, we funded the increase in estimated costs by contributing $27 million of our corporate cash holdings to SHC, thereby restricting the use of such cash to the project scope of the Series 2021 Bonds.

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

Current Capital Requirements and Future Expenditures for Expansion

We previously funded SHC with over $200 million to fund the two phases at our initial five ground leased airport locations. We maintain the ability to include up to $50 million in new projects outside the original five locations to be funded with a portion of the existing proceeds held by the trustee as long as certain approvals and supplemental consultant reports are provided showing that such new project would result in better coverage of debt service than previously contemplated projects. We exercised this ability utilizing approximately $26 million of the $50 million available and received the requisite approvals and reports in March 2023 with respect to our ADS Phase I development project.

We previously raised equity capital, along with potential future debt and further equity issuances, including the 2024 Private Placement Purchase Agreement and 2023 Private Placement Purchase Agreement entered into on September 16, 2024 and November 1, 2023, respectively, see Liquidity and Capital Resources — Private Placement and Securities Purchase Agreement below, to begin to fund additional airport campuses and reach up to 20 airport campuses over the next several years. We also have the ability to access the capital markets through our ATM Facility and through our effective shelf registration statement on Form S-3. On average, each future campus is anticipated to be composed of 200,000 rentable square feet and is expected to cost approximately $55 million per campus, with 65% or more to be funded with additional private activity bonds or other indebtedness. All future hangar campus projects are discretionary and require us to identify the appropriate airports with the target hangar demand economics, secure required ground leases and permits, and complete future construction at such sites.

The cumulative 20 airport site business plan is estimated to cost approximately $1.2 billion, with approximately 65% to 75% anticipated from private activity bonds and the balance with equity or equity-linked financing. Our ability to raise additional equity and/or debt financing will be subject to a number of risks, including our ability to obtain financing upon reasonable terms, if at all, costs of construction, delays in constructing new facilities, operating results, and other risk factors. In the event that we are unable to obtain additional financing, we may be required to raise additional equity capital, creating additional dilution to existing stockholders. There can be no assurance that we would be successful in raising such additional equity capital on favorable terms, if at all. Even if we can obtain such additional equity financing if needed, there can be no assurance that we would be successful in raising such additional financing on favorable terms, if at all.

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Critical Accounting Policies and Estimates

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires management 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 financial statements, and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following as our critical accounting policies:

Use of Estimates

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. We allocate a portion of our 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 costs on the loans and bonds used to fund the capital projects are also capitalized until the capital project is completed. Once a capital project is complete, the cost of the capital project is reclassified to Constructed Assets on the accompanying balance sheet and we begin 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.

Leases

We account for leases under Accounting Standards Codification (“ASC”) Topic 842, Leases. We determine whether a contract contains a lease at the inception of the contract. ASC Topic 842 requires lessees to recognize operating lease liabilities and right-of-use (“ROU”) assets for all leases with terms of more than 12 months on the consolidated balance sheets. We have made an accounting policy election that will keep leases with an initial term of 12 months or less off our 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 we will exercise our options to renew the leases, the renewal terms are included in the lease term and the resulting ROU asset and operating lease liability balances. We have elected to not capitalize any interest cost that is implicit within our operating leases into cost of construction on the consolidated balance sheet, but instead, we expense our ground lease cost in the consolidated statements of operations.

We have lease agreements with lease and non-lease components; we have elected the accounting policy to not separate lease and non-lease components for all underlying asset classes.

Revenue Recognition

We lease hangar facilities that we construct to third parties. The lease agreements are either on a month-to-month basis or have a defined term and may have options to extend the term. Some of the leases contain options to terminate the lease by either party with given notice. There are no options given to the lessee to purchase the underlying assets. Rental revenue is recognized in accordance with ASC Topic 842, Leases, and includes (i) 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 and (ii) variable payments of tenant reimbursements, which are recoveries of all or a portion of the common area maintenance and operating expenses of the property and are recognized in the same period as the expenses are incurred.

The Company evaluates the collectability of tenant receivables for payments required under the lease agreements. If the Company determines that collectability is not probable, the Company recognizes any difference between revenue amounts recognized to date under ASC 842 and payments that have been collected from the lessee, including any additional rent or lease termination fees, as a current period adjustment to rental revenue.

Recent Accounting Pronouncements

See Note 2 — Basis of Presentation and Significant Accounting Policies in the Notes to Consolidated Financial Statements for a full description of recent accounting pronouncements including the expected dates of adoption and effects on results of operations and financial condition.

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Results of Operations

Three Months Ended September 30, 2024 Compared to the Three Months Ended September 30, 2023

The following table sets forth a summary of our consolidated results of operations for the periods indicated below and the changes between the periods (in thousands).

	Three months ended
	September 30, 2024			September 30, 2023			Change
Revenue:
Rental revenue	$	4,097		$	2,502		$	1,595
Total revenue		4,097			2,502			1,595

Expenses:
Operating		3,681			1,675			2,006
Depreciation		646			670			(24	)
General and administrative		4,634			3,556			1,078
Total expenses		8,961			5,901			3,060

Operating loss		(4,864	)		(3,399	)		(1,465	)

Other (income) expense:
Interest expense		177			234			(57	)
Unrealized gain on warrants		15,961			(1,597	)		17,558
Other income		(303	)		(37	)		(266	)
Total other (income) expense		15,835			(1,400	)		17,235

Net loss	$	(20,699	)	$	(1,999	)	$	(18,700	)

Revenues

Revenues for the three months ended September 30, 2024 were approximately $4.1 million, compared to approximately $2.5 million for the three months ended September 30, 2023. The $1.6 million, or 64%, increase was primarily the result of the commencement of operations at SJC during the three months ended June 30, 2024 and the impact of increased occupancy at our BNA and OPF hangar campuses, offset by approximately $0.4 million of net non-recurring adjustments to revenue recognized during the three months ended September 30, 2023, primarily associated with a negotiated lease termination fee from a former tenant of two hangars at OPF. Revenue associated with our delivery of aircraft fuel increased approximately $0.4 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

Operating Expenses

Operating expenses increased approximately $2.0 million, or 120%, for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The increase in operating expense is primarily reflective of increased ground lease expense, which increased approximately $1.6 million for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The increase in ground lease expense was driven primarily by a full quarter of expense associated with the ground and hangar lease signed at SJC during the three months ended March 31, 2024. The increase in ground lease expense was also driven by the ground leases signed at PWK, BDL, and POU during the three months ended December 31, 2023, ORL during the three months ended March 31, 2024, IAD during the three months ended June 30, 2024, and SLC during the three months ended September 30, 2024. Salaries, wages, and benefits associated with our campus personnel increased by approximately $0.2 million, primarily driven by a headcount increase associated with the commencement of operations at our SJC hangar campus. Other operating expenses increased by approximately $0.2 million, primarily driven by increased utility, insurance, and other start-up expenses associated with the commencement of operations at our SJC hangar campus.

Depreciation Expense

Depreciation expense remained materially consistent for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023.

General and Administrative Expenses

For the three months ended September 30, 2024, and 2023, general and administrative expenses were approximately $4.6 million and $3.6 million, respectively. The approximately $1.0 million, or 30%, increase was primarily due to an approximately $0.7 million increase in salaries, wages, and other benefits, driven by an increase in corporate headcount and expense recognized associated with our equity compensation programs. Headcount and compensation expenses increased approximately $0.4 million and non-cash equity compensation expense increased approximately $0.3 million. Marketing and other pursuit costs increased by approximately $0.2 million, reflecting our growth strategy in securing airport site acquisitions and potential tenants.

Other (Income) Expense

Other expense increased from approximately $1.4 million of income for the three months ended September 30, 2023, to approximately $15.8 million of expense for the three months ended September 30, 2024. This increase was primarily due to an approximately $17.6 million difference in the mark-to-market adjustment of the outstanding warrants at September 30, 2024 as compared to September 30, 2023. The increase was also partially offset by an approximately $0.3 million increase in other income, primarily due to interest earned on our investments in U.S. Treasuries classified as available for sale.

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Nine Months Ended September 30, 2024 Compared to the Nine Months Ended September 30, 2023

The following table sets forth a summary of our consolidated results of operations for the periods indicated below and the changes between the periods (in thousands).

	Nine months ended
	September 30, 2024			September 30, 2023			Change
Revenue:
Rental revenue	$	10,119		$	5,337		$	4,782
Total revenue		10,119			5,337			4,782

Expenses:
Operating		9,103			5,179			3,924
Depreciation		1,917			1,650			267
General and administrative		14,145			10,838			3,307
Total expenses		25,165			17,667			7,498

Operating loss		(15,046	)		(12,330	)		(2,716	)

Other (income) expense:
Interest expense		558			316			242
Unrealized loss on warrants		23,930			-			23,930
Other income		(1,799	)		(252	)		(1,547	)
Total other (income) expense		22,689			64			22,625

Net loss	$	(37,735	)	$	(12,394	)	$	(25,341	)

Revenues

Revenues for the nine months ended September 30, 2024 were approximately $10.1 million, compared to approximately $5.3 million for the nine months ended September 30, 2023. The $4.8 million, or 90%, increase was primarily the result of the commencement of operations at our SJC hangar campus and the cumulative impact of certain additional tenant leases in place at our BNA and OPF hangar campuses as compared to the nine months ended September 30, 2023. The commencement of operations at our SJC hangar campus together with the increase in occupancy at our OPF and BNA hangar campuses for the nine months ended September 30, 2024 as compared to September 30, 2023 resulted in increased rental revenues of approximately $3.8 million. Revenue associated with our delivery of aircraft fuel increased approximately $1.0 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

Operating Expenses

Operating expenses increased approximately $3.9 million, or 76%, for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The increase in operating expense is primarily reflective of increased ground lease expense, which increased by approximately $3.3 million for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The increase in ground lease expense was driven primarily by two full quarters of operating lease expense associated with the ground and hangar lease signed at SJC during the three months ended March 31, 2024. The increase in ground lease expense was also driven by new ground leases signed at PWK, BDL, and POU during the three months ended December 31, 2023 and at ORL, IAD, and SLC during the nine months ended September 30, 2024. Salaries, wages, and benefits associated with our campus personnel increased by approximately $0.4 million, primarily driven by a headcount increase associated with the commencement of operations at our SJC hangar campus in April 2024.

Depreciation Expense

Depreciation increased approximately $0.3 million, or 16%, for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The increase reflects a full nine months of depreciation associated with our OPF hangar campus, which opened during the nine months ended September 30, 2023. The increase was also partially driven by the placement of additional ground support equipment into service throughout 2023 and 2024 and a full nine months of depreciation related to Rapidbuilt, which was acquired during the nine months ended September 30, 2023.

General and Administrative Expenses

For the nine months ended September 30, 2024, and 2023, general and administrative expenses were approximately $14.1 million and $10.8 million, respectively. The approximately $3.3 million, or 30%, increase was primarily due to an approximately $3.0 million increase in salaries, wages, and other benefits, driven by an increase in corporate headcount and expense recognized associated with our equity compensation programs. Headcount and compensation expenses increased approximately $1.6 million, and non-cash equity compensation expense increased approximately $1.4 million.

Other (Income) Expense

Other expense increased from approximately $0.1 million to approximately $22.7 million for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. This increase was primarily due to an approximately $23.9 million difference in the mark-to-market adjustment of the outstanding warrants at September 30, 2024 as compared to September 30, 2023. The increase was also partially offset by an approximately $1.5 million increase in other income, primarily due to interest earned on our investments in U.S. Treasuries classified as available for sale.

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Liquidity and Capital Resources

Overview

Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to repay borrowings, fund the construction of new assets, fund working capital and other general business needs. Our primary sources of cash include the potential issuance of equity and debt securities and rental payments from tenants. Our long-term liquidity requirements include lease payments under our ground leases with airport authorities, repaying principal and interest on outstanding borrowings, funding the construction costs of our hangar campus development projects (see “— Construction Material Costs and Labor”), funding for operations, and paying accrued expenses.

We believe that we have access to multiple sources of capital to fund our long-term liquidity requirements, including the incurrence of additional private activity bonds and other debt and the issuance of additional equity securities. We also have the ability to utilize our $100 million ATM Facility or otherwise utilize our shelf registration statement on Form S-3 to access the capital markets. However, as we have recently become a publicly-traded company, we cannot assure you that we will have access to these sources of capital or that, even if such sources of capital are available, that these sources of capital will be available on favorable terms. Our ability to incur additional debt will depend on multiple factors, including our degree of leverage, the value of our unencumbered assets and borrowing restrictions that are or may be imposed by future lenders. Our ability to access the equity and debt capital markets will depend on multiple factors as well, including general market conditions for real estate companies, our degree of leverage, the trading price of our common stock and debt and market perceptions about our Company.

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 September 30, 2024.

The following table summarizes our cash and cash equivalents, restricted cash, investments, and restricted investments as of September 30, 2024 and December 31, 2023 (in thousands):

	September 30, 2024		December 31, 2023
Cash and cash equivalents	$	3,540	$	60,257
Restricted cash		70,627		12,009
Investments		19,464		11,866
Restricted investments		16,741		88,213
Total cash, restricted cash, investments, and restricted investments	$	110,372	$	172,345

2024 Private Placement and Securities Purchase Agreement

On September 16, 2024, we entered into the 2024 Private Placement Purchase Agreement with the Initial Investors relating to, among other things, the issuance and sale to the Initial Investors at an initial closing an aggregate of 3,352,106 Initial PIPE Shares of our Class A Common Stock for an aggregate purchase price of $31.8 million. On October 25, 2024, the Additional Investors each executed a joinder to the 2024 Private Placement Purchase Agreement, pursuant to which the Additional Investors agreed to purchase, and we agreed to sell, an aggregate of 603,684 additional shares of First Closing PIPE Shares for an aggregate purchase price of $5.7 million. The Initial Closing under the 2024 Private Placement Purchase Agreement occurred on October 25, 2024, and 3,955,790 First Closing PIPE Shares were issued to the Investors for an aggregate purchase price of $37.6 million.

The Investors have the option to purchase up to an aggregate of 3,955,790 shares of Second Closing PIPE Shares for an aggregate purchase price of up to $37.6 million. Each Investor has the option to purchase in the Second Closing up to a number of Second Closing PIPE Shares equal to the number of such Initial Investor’s Initial PIPE Shares purchased in the Initial Closing, at the same purchase price of $9.50 per share. The amount of Second Closing PIPE Shares, if any, to be issued at the Second Closing will be determined by each Investor in its sole discretion pursuant to each of their allocations, and the Second Closing will occur, if at all, at the sole discretion of the Investors, on or before the Second Closing Date, subject to customary closing conditions.

2023 Private Placement and Securities Purchase Agreement

On November 1, 2023, we entered into a Securities Purchase Agreement (the “2023 Private Placement Purchase Agreement”) with certain investors (collectively, the “2023 Investors”), pursuant to which we (i) sold and issued to the 2023 Investors on November 2, 2023 an aggregate of 6,586,154 shares (the “2023 Initial PIPE Shares”) of our Class A Common Stock and accompanying warrants to purchase up to 1,141,600 shares of Class A Common Stock (the “Initial PIPE Warrants”), for an aggregate purchase price of $42.8 million (the “2023 Initial Financing”), and (ii) sold and issued to the 2023 Investors on November 29, 2023 an aggregate of 2,307,692 shares of our Class A Common Stock (the “2023 Additional PIPE Shares” and, together with the 2023 Initial PIPE Shares, the “2023 PIPE Shares”) and accompanying warrants to purchase an aggregate of 400,000 shares of Class A Common Stock (the “Additional PIPE Warrants” and, together with the Initial PIPE Warrants, the “PIPE Warrants”) for an aggregate purchase price of $15.0 million. Together with the 2023 Initial Financing, the aggregate PIPE financing through the 2023 Private Placement Purchase Agreement totaled approximately $57.8 million.

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At-the-Market Facility

On March 27, 2024, we entered into an At Market Issuance Sales Agreement (the “ATM Agreement”) with B. Riley Securities, Inc. (“B. Riley”) with respect to an “at the market” offering program (the “ATM Facility”), under which we may, from time to time, at our sole discretion, issue and sell through B. Riley, acting as sales agent, up to $100 million of shares of Class A Common Stock. Pursuant to the ATM Agreement, we may sell the shares through B. Riley by any method permitted that is deemed an “at the market” offering as defined in Rule 415 under the Securities Act. B. Riley will use commercially reasonable efforts consistent with its normal trading and sales practices to sell the shares from time to time, based upon instructions from us, including any price or size limits or other customary parameters or conditions we may impose. We will pay B. Riley a commission of 3.0% of the gross sales price per share sold under the ATM Agreement, subject to certain reductions. During the three months ended September 30, 2024, we sold no shares of Class A Common Stock under the ATM Facility. During the nine months ended September 30, 2024, we sold 7,407 shares of Class A Common Stock under the ATM Facility at a weighted-average sales price of $12.42.

We are not obligated to sell any shares under the ATM Agreement. The offering of shares pursuant to the ATM Agreement will terminate upon the earlier to occur of (i) the issuance and sale, through B. Riley, of all of the shares subject to the ATM Agreement and (ii) termination of the ATM Agreement in accordance with its terms. We have made limited sales under the ATM Facility to date and will only do so when our stock price is at prices our board of directors deems appropriate.

Private Activity Bonds

On September 14, 2021, SHC completed an issuance through the Public Finance Authority (Wisconsin) of $166.3 million of Senior Special Facility Revenue Bonds (Aviation Facilities Project), Series 2021 (the “PABs”). The PABs are comprised of three maturities: $21.1 million bearing interest at 4.00%, due July 1, 2036; $30.4 million bearing interest at 4.00%, due July 1, 2041; and $114.8 million bearing interest at 4.25%, due July 1, 2054. The Series 2021 Bond that has a maturity date of July 1, 2036 was issued at a premium, and Sky received bond proceeds that were $0.2 million above its face value. The net proceeds from the issuance of the PABs proceeds are being used to (a) finance or refinance the construction of various aviation facilities consisting of general aviation aircraft hangars and storage facilities located and to be located on the SGR site, the OPF site, the BNA site, the APA site, and the DVT site; (b) fund debt service and other operating expenses such as ground lease expense during the initial construction period; (c) fund deposits to the Debt Service Reserve Fund; and (d) pay certain costs of issuance related to the PABs.

Debt Covenants

The PABs contain financial and non-financial covenants, including a debt service coverage ratio, a restricted payments test and limitations on the sale, lease, or distribution of assets. To the extent that SHC does not comply with these covenants, an event of default or cross-default may occur under one or more agreements, and we or our subsidiaries may be restricted in our ability to pay dividends, issue new debt or access our leased facilities. The PABs are collateralized on a joint and several basis with the property and revenues of all SHC subsidiaries and their assets financed or to be financed from the proceeds of the PABs.

Covenants in the PABs require SHC to maintain a debt service coverage ratio (as defined in the relevant documents) of at least 1.25 for each applicable test period, commencing with the quarter ending December 31, 2024. The PABs are subject to a Continuing Disclosure Agreement whereby SHC is obligated to provide electronic copies of (i) monthly construction reports, (ii) quarterly reports containing quarterly financial information of SHC and (iii) annual reports containing audited consolidated financial statements of SHC to the Municipal Securities Rulemaking Board. As of September 30, 2024, we were in compliance with all debt covenants.

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Lease Commitments

The table below sets forth certain information with respect to our future minimum lease payments required under leases as of September 30, 2024 (in thousands):

Year Ending December 31,	Operating Leases			Finance Leases
2024 (remainder of year)	$	1,304		$	6
2025		5,342			24
2026		6,545			17
2027		7,225			2
2028		7,449			-
Thereafter		416,487			-
Total lease payments		444,352			49
Less imputed interest		(314,371	)		(2	)
Total	$	129,981		$	47

Contractual Obligations

The following table sets forth our contractual obligations as of September 30, 2024 (in thousands):

	2024
	(remainder
	of year)		2025-2026		2027-2028		Thereafter		Total
Principal payments on bonds payable	$	-	$	-	$	-	$	166,340	$	166,340
Interest payments on bonds payable		-		13,881		13,881		114,968		142,730
Contractual payments on other long-term indebtedness		593		7,979		95		-		8,667
Lease commitments		1,310		11,928		14,676		416,487		444,401

Total	$	1,903	$	33,788	$	28,652	$	697,795	$	762,138

Funds to meet interest payments through the first half of 2025 on the Series 2021 PABs are held in reserve as restricted cash and restricted investments.

Off-Balance Sheet Arrangements

We do not maintain any off-balance sheet arrangements.

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Cash Flows

The following table summarizes our sources and uses of cash for the nine months ended September 30, 2024 and 2023 (in thousands):

	Nine months ended
	September 30, 2024			September 30, 2023
Cash and restricted cash at beginning of period	$	72,266		$	41,396
Net cash used in operating activities		(6,635	)		(6,263	)
Net cash provided by investing activities		8,367			2,137
Net cash provided by (used in) financing activities		169			(510	)
Cash and restricted cash at end of period	$	74,167		$	36,760

Operating Activities

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

Net cash used in operating activities was approximately $6.6 million for the nine months ended September 30, 2024, as compared to cash used in operating activities of approximately $6.2 million for the same period in 2023. The $0.4 million increase in cash used in operating activities was primarily attributable to an approximately $2.5 million unfavorable change in the Company's working capital position, which was primarily driven by the timing of vendor payments and tenant receipts. The change in working capital position was offset by an approximately $2.1 million decrease in net loss, net of non-cash adjustments. The decrease in net loss, net of non-cash adjustments was primarily driven by an increase in rental revenue and the impact of increases in non-cash operating lease expense and equity-based compensation expense.

Investing Activities

Our primary investing activities have consisted of payments related to the cost of construction at our various hangar campus development projects and investment in U.S. Treasury Securities. As our business expands, we expect to continue to invest in our current and anticipated future portfolio of hangar campus development projects.

Net cash provided by investing activities was approximately $8.4 million for the nine months ended September 30, 2024, as compared to cash provided by investing activities of approximately $2.1 million for the same period in 2023. The increase of approximately $6.3 million of cash provided by investing activities was driven primarily by an increase of approximately $185.1 million in proceeds received from the Company's available-for-sale investments, and a decrease of approximately $104 million of purchases of held-to-maturity investments. These increases were offset by an increase of approximately $201.5 million of available-for-sale U.S. Treasury purchases for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. Proceeds received from the Company's held-to-maturity investments decreased by approximately $67.0 million and capital expenditures increased by approximately $14.7 million for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.

Financing Activities

Our primary financing activities have consisted of capital raised to fund the growth of our business and proceeds from debt obligations incurred to finance our hangar campus development projects. We expect to raise additional equity capital and issue additional indebtedness as our business grows.

Net cash provided by financing activities was approximately $0.2 million for the nine months ended September 30, 2024, as compared to net cash used in financing activities of approximately $0.5 million for the same period in 2023. The approximately $0.7 million increase in net cash provided by financing activities was primarily driven by $2.9 million of proceeds received from the exercise of Warrants during the nine months ended September 30, 2024, offset by increases of approximately $1.1 million, $0.8 million, and $0.4 million in payments associated with vested equity awards, loan principal payments, and equity issuance costs, respectively.

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ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information under this item.

ITEM 4.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

In connection with the preparation of this Form 10-Q, as required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2024. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and is accumulated and communicated to our management, including our CEO and CFO, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during the three months ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

The Company is not currently a party to any material legal proceedings.

ITEM 1A.

RISK FACTORS

There have been no material changes in our risk factors from those disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the three months ended September 30, 2024, there were no unregistered sales of the Company's securities that were not reported in a Current Report on Form 8-K.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.

OTHER INFORMATION

During the three months ended September 30, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K

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ITEM 6.

EXHIBITS

(a)

See accompanying Exhibit Index included before the signature page of this report for a list of exhibits filed or furnished with this report.

		Incorporated by Reference
Exhibit Number	Description	Schedule/ Form	File No.	Exhibit	Filing Date

3.1	Second Amended and Restated Certificate of Incorporation of Yellowstone Acquisition Company.	8-K	001-39648	3.1	January 31, 2022

3.2	Bylaws of Sky Harbour Group Corporation.	8-K	001-39648	3.2	January 31, 2022

10.1 (#) (+)	Lease between Salt Lake City Corporation, as Landlord, and SLC Development LLC, as Tenant.

10.2	Form of Securities Purchase Agreement, dated as of September 16, 2024 by and among Sky Harbour Group Corporation and the Investors named therein.	8-K	001-39648	10.1	September 17, 2024

31.1 (#)		Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a).

31.2 (#)		Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a).

32.1 (##)		Certification of the Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.

32.2 (##)		Certification of the Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.

101.INS (#)		Inline XBRL Instance Document.

101.SCH (#)		Inline XBRL Taxonomy Extension Schema Document.

101.CAL (#)		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF (#)		Inline XBRL Taxonomy Extension Definition.

101.LAB (#)		Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE (#)		Inline XBRL Taxonomy Presentation Linkbase Document.


104 (#)		Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.

(#)		Filed herewith.
(##)		The certifications attached as Exhibits 32.1 and 32.2 that accompany this Report, are not deemed filed with the SEC and are not to be incorporated by reference into any filing of Sky Harbour Group Corporation under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Report irrespective of any general incorporation language contained in such filing.
(+)		Certain schedules and exhibits to this Exhibit have been omitted pursuant to Item 601(a)(5) or Item 601(b)(10)(iv), as applicable, of Regulation S-K. The Registrant agrees to furnish supplemental copies of all omitted exhibits and schedules to the Securities and Exchange Commission upon its request.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SKY HARBOUR GROUP CORPORATION (Registrant)


	By:	/s/ Tal Keinan
	Tal Keinan Chief Executive Officer (Principal Executive Officer)

	November 12, 2024


	By:	/s/ Francisco Gonzalez
	Francisco Gonzalez Chief Financial Officer (Principal Financial Officer)

	November 12, 2024


	By:	/s/ Michael W. Schmitt
	Michael W. Schmitt Chief Accounting Officer (Principal Accounting Officer)

	November 12, 2024

Exhibit 10.1

LEASE

BETWEEN

SALT LAKE CITY CORPORATION, as Landlord

AND

SLC Development LLC, as Tenant

For Premises Located At:

Salt Lake City International Airport

Salt Lake City, Utah

1.	DEFINITIONS		8

2.	TERM		12

	2.1	Term.	12

	2.2	Renewal Terms.	12

	2.3	Due Diligence Period.	13

3.	RENT		13

	3.1	Ground Rent.	13

	3.2	Renewal Term Rent.	13

	3.3	Payment of Concession Fee.	14

	3.4	Fuel Royalty.	14

	3.5	Intentionally Omitted.	14

	3.6	Payment; Proration, Etc.	14

	3.7	Statements.	15

	3.8	Late Fees and Interest.	15

	3.9	No Set-offs or Deductions.	16

	3.10	Accord and Satisfaction.	16

	3.11	No Misrepresentation.	16

4.	REAL ESTATE TAXES; UTILITIES		16

	4.1	Real Estate Taxes.	16

	4.2	Utilities.	16

5.	FINANCIAL ASSURANCES AND SECURITY		17

	5.1	Lease Security.	17

	5.2	Letter of Credit.	17

	5.3	Use of Letter of Credit.	17

	5.4	No Assignment by Tenant.	18

6.	USE		18

	6.1	Permitted Use.	18

	6.2	Exclusive Control.	18

	6.3	Signage.	18

	6.4	Access.	19

	6.5	Tenant’s Access.	19

	6.6	Cooperation with Airport Development Activities.	19
7.
	COMPLIANCE		19

	7.1	Generally.	19

	7.2	Copies of Notices.	19

8.	MAINTENANCE AND CONSTRUCTION		20

	8.1	Condition of Premises.	20

	8.2	Obligation to Maintain.	20

9.	CONSTRUCTION		21

	9.2	Landlord’s Work.	23

10.	PROHIBITED LIENS		23

	10.1	Tenant’s Covenant	23

	10.2	Protection of Landlord.	24

	10.3	Equipment Liens.	24

11.	HAZARDOUS MATERIALS		24

	11.1	Hazardous Materials.	24

	11.2	Stormwater.	28

12.	INDEMNIFICATION; LIABILITY OF LANDLORD		29

	12.1	Obligation to Indemnify.	29

	12.2	Obligation to Defend.	30

	12.3	Landlord’s Obligation to Tender Claim.	30

	12.4	Apportionment of Liability.	30

	12.5	Validity of Obligations.	30

	12.6	Contractor Indemnities.	30

	12.7	Indemnification Procedures.	31

	12.8	Insurance Proceeds.	31

13.	INSURANCE		31

	13.1	Tenant to Insure.	31

14.	LOSSES AND LOSS PROCEEDS		35

	14.1	Notice.	35

	14.2	Duty to Repair and Replace.	35

	14.3	Substantial Casualty.	35

	14.4	Adjustment of Claims; Use of Property Insurance Proceeds.	35

15.	LANDLORD’S TRANSFERS AND RELATED RIGHTS		36

	15.1	Utility Easements.	36

	15.2	Landlord’s Operational Rights.	36

	15.3	Relocation of Premises.	36

16.	TITLE; REPAIRS AND MAINTENANCE		37

	16.1	Title.	37

	16.2	Repairs and Maintenance for the Term.	37

	16.3	Reimbursement to Landlord.	37

17.	TENANT’S TRANSFERS; SUBLEASES		37

	17.1	Tenant’s Rights.	37

	17.2	Subleases.	38

	17.3	Conditions to Effectiveness of Certain Transactions.	38

18.	QUIET ENJOYMENT; TITLE TO CERTAIN PREMISES; CERTAIN AGREEMENTS		38

	18.1	Quiet Enjoyment.	38

	18.2	Access and Inspection.	38

	18.3	Title.	39

19.	EVENTS OF DEFAULT; REMEDIES		39

	19.1	Definition of “Event of Default”.	39

	19.2	Remedies.	40

	19.3	Tenant’s Late Payments; Late Charges.	41

	19.4	Landlord’s Right to Cure.	42

	19.5	Holding Over.	42

	19.6	Accord and Satisfaction; Partial Payments.	42

	19.7	Miscellaneous.	42

	19.8	Survival.	42

	19.9	Multiple Suits.	42

20.	END OF TERM		43

21.	NOTICES		43

22.	ADDITIONAL DELIVERIES; THIRD PARTIES		45

	22.1	Estoppel Certificates.	45

	22.2	Further Assurances.	45

	22.3	Amendment.	45

	22.4	Successors and Assigns.	45

	22.5	No Third-Party Beneficiaries.	45

23.	MISCELLANEOUS		45

	23.1	Performance Under Protest.	45

	23.2	Survival.	45

	23.3	Force Majeure.	46

24.	INTERPRETATION, EXECUTION, AND APPLICATION OF LEASE		46

	24.1	Captions.	46

	24.2	Counterparts.	46

	24.3	Delivery of Drafts.	46

	24.4	Entire Agreement.	46

	24.5	Governing Law; Venue.	46

	24.6	Partial Invalidity.	46

	24.7	Principles of Interpretation.	47

	24.8	Rules and Regulations.	47

25.	REQUIRED FEDERAL PROVISIONS		47

	25.1	Subordination to Governmental Agreements.	47

	25.2	Right of Flight.	47

	25.3	Non-Interference.	47

	25.4	General Civil Rights Provisions.	48

	25.5	Compliance with Nondiscrimination Requirements.	48

	25.6	Lease of Real Property.	50

	25.7	Affirmative Action.	50

	25.8	Title VI of Pertinent Nondiscrimination Acts and Authorities.	50

	25.9	Exclusive Rights.	51

	25.1	Americans with Disabilities Act (ADA).	52

	25.11	Waiver of Visual Artists Rights.	52

	25.12	Right to Develop Airport.	52

	25.13	Federal Government’s Emergency Clause.	52

	25.14	Incorporation of Provisions.	52

26.	STATE SPECIFIC PROVISIONS		53

	26.1	Representation Regarding Ethical Standards for City Officers and Employees and Former City Officers and Employees.	53

	26.2	Government Records Access and Management Act.	53

27.	AVIATION OPERATIONS		54

	27.1	Release.	54

	27.2	Easement Reservation.	54

	27.3	14 C.F.R. Part 77, Obstructions in Navigable Airspace.	54

28.	AIRPORT SECURITY		54

	28.1	TSA Airport Security.	54

	28.2	Aircraft Operating Area.	55

	28.3	Maintenance.	55

	28.4	Noncompliance.	55

29.	MORTGAGEE PROTECTIONS		56

30.	RECORDING		58

LEASE

This LEASE (including all exhibits attached hereto and made a part hereof, the “Lease”) is by and between Salt Lake City Corporation, a Utah municipal corporation (“Landlord” or the “City”), and SLC Development LLC, a Delaware Limited Liability Company authorized to do business in the State of Utah (“Tenant”) and is effective as of the date the City Recorder attests the applicable City signature, which shall be the recordation date (“Effective Date”).

RECITALS

A. Landlord owns, and through its Department of Airports operates, the Salt Lake City International Airport (“Airport”).

B. Landlord owns certain real property more particularly described in Exhibit A, consisting of approximately 8.4 acres located on the northern portion of the Airport property adjacent to the Boeing lease area on the east side of the Salt Lake City International Airport (“Premises”).

C. Tenant desires to lease the Premises for the construction, operation, maintenance, repair and replacement of Improvements to be primarily used as private/semi-private commercial hangar facilities along with indoor private office and lounge space and for other related aeronautical uses as set forth herein.

D. Landlord is willing to lease the Premises to Tenant and permit such use of the Premises on the terms and conditions specified in this Lease.

AGREEMENT

NOW, THEREFORE, for and in consideration of the mutual covenants and promises contained herein, Landlord and Tenant agree as follows:

1.	DEFINITIONS

The following definitions apply in this Lease.

“Acts or Omissions” shall have the meaning set forth in Section 11.1.

“Affiliate” of any specified Person means any other Person related to that Person based on common ownership, common management or common control including subsidiaries and parent entities of Tenant.

“Aircraft Operations Area” or “AOA” shall have the meaning set forth in Section 27.2.1.

“Airport Security” shall mean have the meaning set forth in Section 27.1.

“Approvals” means any and all licenses, permits (including building, demolition, alteration, use, and special permits), approvals, consents, certificates (including certificate(s) of occupancy), rulings, variances, authorizations, or amendments to any of the foregoing as shall be necessary or appropriate under any Law to commence, perform, or complete any Construction, or for the use, occupancy, maintenance, or operation of the Premises.

“Building” means the building or buildings located or to be located on the Premises from time to time.

“Building Equipment” means all fixtures incorporated in the Premises owned by Landlord or Tenant and used, useful, or necessary to operate the Building as such (including boilers; compactors; compressors; conduits; ducts; elevators; engines; equipment; escalators; fittings; heating, ventilating and air conditioning systems; machinery; and pipes) as opposed to operating any business in the Building.

“Commencement Date” means the date upon which this Lease commences, which shall be the earlier of the date of beneficial occupancy of the Building or the issuance of a certificate of occupancy by Salt Lake City Building Services for the Building but in no event later than twenty-four (24) months from the expiration of the Due Diligence Period, unless Commencement Date is extended pursuant to Section 2.1 herein or otherwise agreed to in writing between the parties. In no event shall Commencement Date be earlier than completion of the Landlord’s Work, described on Exhibit E attached, if such work prevents Tenant’s access via road or taxilane to the Premises.

“Concession Fee” means as defined in Section 3.3.

“Concession Fee Threshold” shall mean 5% of the amount per square foot of all Hangar Rents that exceed thirty-six dollars ($36.00) per square foot. For purposes of illustration, when Tenant enters into a sublease for a hangar or a portion of a hangar at a rental rate of fifty dollars ($50.00) per square foot, then the Concession Fee would be calculated as $50.00 - $36.00 = $14.00 x 5% = $.70 per square foot.

“Contract Year” means the period annually from July 1 to June 30.

“Consortium” means the SLC Fuel Company LLC, or its successor, comprised of contracting airlines, associate/affiliate airlines, non-contracting users, and itinerant users of the fuel system owned by the City and leased to the Consortium under a separate agreement.

“Effective Date” means the recordation date of this Lease with the City Recorder’s Office.

“Environmental Law” means and includes all applicable federal, state, and local Laws currently in effect or which may come into effect during the Term of this Lease, as may be amended from time to time, and all implementing regulations, orders, and applicable federal or applicable state court decisions interpreting, relating to, regulating or imposing liability (including, but not limited to, response, removal, remediation and damage costs) or standards of conduct or performance relating to industrial hygiene, occupational health and safety conditions, environmental conditions, or exposure to, contamination by, or clean-up of, any and all Hazardous Materials, including without limitation, all applicable federal or state superlien or environmental clean-up statutes.

“Equipment Lien” means any security interest, financing lease, personal property lien, conditional sales agreement, chattel mortgage, security agreement, title retention arrangement or any similar arrangement (including any related financing statement) for Tenant’s acquisition or leasing of any Financed FF&E used in the Premises that is leased, purchased under conditional sale or installment sale arrangements, encumbered by a security interest, or used under a license, provided that each Equipment Lien encumbers or otherwise relates only to the Financed FF&E for which such secured party provides bona fide purchase-money financing or a bona fide equipment lease, after the Commencement Date. A Leasehold Mortgage is not an Equipment Lien.

“Event of Default” shall have the meaning set forth in Section 18.1.

“Expiration Date” means the date when this Lease terminates or expires in accordance with its terms, whether on the Scheduled Expiration Date, by Landlord’s exercise of remedies for an Event of Default, or otherwise.

“FAA” means the Federal Aviation Administration.

“FF&E” means all movable furniture, furnishings, equipment, and personal property of Tenant or anyone claiming through Tenant (excluding Building Equipment) that may be removed without material damage to the Premises and without adversely affecting: (a) the structural integrity of the Premises; (b) any electrical, plumbing, mechanical or other system in the Premises; (c) the present or future operation of any such system; or (d) the present or future provision of any utility service to the Premises. FF&E includes items such as factory equipment, furniture, movable equipment, telephone, telecommunications, and facsimile transmission equipment, point of sale equipment, televisions, radios, network racks, and computer systems and peripherals.

“Government” means each and every governmental agency, authority, bureau, department, quasi-governmental body, or other entity or instrumentality having or claiming jurisdiction over the Premises (or any activity this Lease allows), including the United States government, the State and County governments, the Landlord, and their subdivisions and municipalities, and all other applicable governmental agencies, authorities, and subdivisions thereof. “Government” shall also include any planning commission, board of standards and appeals, department of buildings, city council, zoning board of appeals, or similar body having or claiming jurisdiction over the Premises or any activities on or at the Premises.

“Ground Rent” shall have the meaning set forth in Section 3.1.

“Hangar Rents” shall mean the amount Tenant charges to Sublessees for use of space within Tenant’s hangar Improvements.

“Hazardous Materials” means any and all substances, products, by-products, waste, or other materials of any nature or kind whatsoever which (a) are or become listed or regulated under any Environmental Laws; (b) give rise to liability under any Environmental Laws or any statutory or common law theory based on negligence, trespass, intentional tort, nuisance, strict or absolute liability or under applicable reported decisions of state or federal court; or (c) which may be hazardous or harmful to the air, water, soil or environment or affect industrial hygiene, occupational health or safety, including without limitation, petroleum and/or asbestos materials, products, by-products, or waste and per- and polyfluoroalkyl substances.

“Improvements” means all improvements located or to be located on the Premises from time to time.

“Industry Standards” means the customary industry management practices applicable to the construction, maintenance, operation, and decommissioning of hangar and related facilities similar to the Tenant’s at airports in the United States of similar size and operations as the Airport.

“Initial Term” shall have the meaning set forth in Section 2.1.

“Laws” means all present or future laws, ordinances, requirements, orders, proclamations, directives, rules, building codes, minimum standards, and regulations of any Government affecting the Premises, this Lease, or any construction in any way.

“Lease Security” shall have the meaning set forth in Section 5.1.

“Monetary Default” shall have the meaning set forth in Section 18.1.1.

“Nonrenewal Notice” shall have the meaning set forth in Section 5.2.

“Partial Lease Year” means any portion of a Contract Year less than a full year.

“Permitted Use” means the development, construction and operation of hangar facilities and other related Improvements to be primarily used for the storage of aircraft and for other related aeronautical uses, subject to applicable Laws and regulations. The Permitted Use shall be limited to the following: (a) storage and maintenance of Sublessee’s aircraft and other incidental property such as parts, equipment, supplies and property carried on such aircraft; parking of Tenant’s employees, Sublessee’s and passenger-owned ground vehicles; (b) Tenant and Sublessee office space incidental to Tenant/Sublessee’s approved commercial aeronautical business; (c) the parking, storage, routine maintenance, minor repair, cleaning and servicing of aircraft operated in connection therewith and the maintenance and repair of personal property operated in connection with operations hereunder; (d) the storage of aircraft parts and supplies; (e) ground service activities necessary for the support of the commercial hangar operations occurring on the Premises including fueling of Sublessee’s aircraft; provided that the primary use of the Premises must, at all times, be related to aeronautical activities; (f) administrative offices, with customary vending machines with food and beverage service, but only as needed to support the commercial hangar operations occurring on the Premises; and (g) any other purpose or activity that the Landlord may, from time to time, expressly authorize in advance in writing in Landlord’s sole discretion. “Permitted Use” does not include: aircraft rental or leasing, flight school training or any other privilege usually granted a Fixed Base Operator except that Tenant is permitted to fuel Sublessee’s aircraft and aircraft operated on behalf of Sublessee through the Consortium. Tenant is not permitted to install fuel tanks but may fuel Sublessee’s aircraft with fuel purchased from the Consortium using Tenant provided equipment, provided that Tenant has executed a Fuel System Access Agreement with the Consortium. Any other commercial or income producing activity not specified herein unless approved in writing by the Landlord.

“Person” means any natural person, association, corporation, Government, individual, joint venture, joint-stock company, limited liability company, partnership, trust, unincorporated organization, or other entity of any kind.

“Premises” shall mean as described on Exhibit A.

“Property Insurance Proceeds” means net proceeds (after reasonable costs of adjustment and collection, including legal costs) of Property Insurance, when and as received by Landlord, Tenant, Depository, or any Mortgagee, excluding proceeds of Tenant’s business interruption insurance in excess of Rent.

“Real Estate Taxes” means all general and special real estate taxes (including taxes on FF&E, sales taxes, use taxes, privilege taxes, and the like), assessments, municipal water and sewer rents, rates and charges, excises, levies, license and permit fees, fines, penalties, privilege taxes in Salt Lake County and other Governmental charges and any interest or costs with respect thereto, general and special, ordinary and extraordinary, foreseen and unforeseen, of any kind and nature whatsoever that at any time before or during the Term and applicable to the Term or any part of it may be assessed, levied, imposed upon, or become due and payable out of or in respect of, or charged with respect to or become a lien on, the Premises, or any FF&E, Building Equipment or other facility used in the operation thereof, or the rent or income received therefrom, or any use or occupancy thereof.

“Renewal Term” shall have the meaning set forth in Section 2.2.

“Renewal Term Rent” shall have the meaning set for in Section 3.2.

“Rent” shall have the meaning set forth in Section 3.2.

“Scheduled Expiration Date” means 11:59 p.m. on the date that is thirty (30) years from the Commencement Date.

“Sublessee” shall refer to Tenant’s subtenants.

“Term” shall have the meaning set forth in Section 2.1.

“TSA” shall mean the Transportation Security Administration.

TERM

2.1

Term.

The initial term of this Lease (the “Initial Term”) shall commence on the Commencement Date and continue until the Scheduled Expiration Date, unless terminated sooner as permitted herein. Landlord shall extend the Commencement Date on a day for day basis for the period of delay of issuance of permits caused by City and that are beyond Tenant’s reasonable control, and for delays associated with Landlord’s Work that prohibits Tenant’s access to the Premises via road or taxilane.

2.2

Renewal Terms.

Provided that Tenant is not then in default hereunder, upon expiration of the Initial Term or subsequent Renewal Term, respectively, Tenant shall have the option, to the extent permitted by law, exercisable not less than 12 months prior to the expiration of the Initial Term or Renewal Term, as applicable, by giving notice in writing to Landlord, to renew this Lease for up to an additional two (2), ten (10) year options (each a “Renewal Term” and collectively, the “Term”). In no event shall the Term exceed fifty (50) years from the Commencement Date.

2.3

Due Diligence Period.

Due diligence shall be completed within one hundred and eighty days of the Effective Date (“Due Diligence Period”). If upon completion of its due diligence during the Due Diligence Period, Tenant determines in good faith using all due diligence that the Premises is not suitable for its proposed Improvements, Tenant is unable to secure any required license, certificate, or other authorization for Tenant’s Improvements and subsequent operations, Tenant shall notify Landlord and Landlord will have the opportunity to remedy the site to the satisfaction of Tenant or elect not to remedy the site. If Landlord elects not to remedy the site, Tenant may remedy the site at its sole cost and expense, or terminate this Lease by sending written notice to Landlord within ten (10) business days of receipt of written notice from Landlord of Landlord’s election. Tenant shall return the Premises to Landlord in the same condition, as determined by Landlord, as it was prior to the Due Diligence Period. If Tenant fails to notify Landlord that the Premises is not suitable for its proposed Improvements t and terminates the Lease, it shall be deemed an acceptance of the Premises “as-is” as set forth in Section 8 below. Tenant intends to apply for available economic and development incentives during the Due Diligence Period and Landlord agrees to make commercially reasonable efforts to cooperate with any such applications made by Tenant provided that Landlord shall not incur any cost, expense or liability in connection with Tenant’s application or the award of economic development incentives.

RENT

3.1

Ground Rent.

Tenant shall pay Landlord, without notice or demand, in lawful money of the United States of America, a monthly rent payment based upon the total square footage of the Premises (the “Ground Rent”) in accordance with the schedule attached hereto as Exhibit C (for the purposes of the calculation of Ground Rent, the rentable square footage of the Premises shall be 365,820 square feet. It is the express understanding and agreement of Landlord and Tenant that all Rent due and payable hereunder shall be absolutely net to Landlord, so that this Lease shall yield to Landlord the Rent specified above during the Term and that all operating expenses of every kind and nature whatsoever relating to the operation of the Premises during the Term shall be paid by Tenant without cost or obligation of any type to Landlord whatsoever. Rent shall give Landlord an absolutely “net” return for the Term, free of any expenses or charges for the Premises, except as this Lease expressly provides.

3.2

Renewal Term Rent.

In the event Tenant timely exercises a Renewal Term at the conclusion of the Initial Term, effective as of the first Renewal Term, Tenant shall pay to Landlord, without notice or demand, in lawful money in the United States of America, a monthly rent payment based on the total square footage of the Building, calculated as the then-current Ground Rent for the square footage of the Improvements (the “Renewal Term Rent”). The Renewal Term Rent shall increase annually based on the CPI; however, the rate shall never decrease. Renewal Term Rent shall be paid in addition to Ground Rent (Renewal Term Rent and Ground Rent shall be collectively referred to as “Rent”). Renewal Term Rent shall continue and escalate annually based upon CPI as set forth herein in any subsequent Renewal Term.

3.3

Payment of Concession Fee.

Beginning on the Commencement Date, and each Contract Year or Partial Contract Year for the remaining Term of this Lease, Tenant shall make a concession fee payment to City (“Concession Fee”) equal to five percent (5%) of any amount exceeding the Concession Fee Threshold of all Hangar Rents due to Tenant during the preceding Contract Year or Partial Contract Year. In no circumstance shall the Concession Fee be less than $100,000 per Contract Year (“Minimum Annual Concession Fee”). The Minimum Annual Concession Fee for a Partial Contract Year shall be prorated. The Concession Fee Threshold and the Minimum Annual Concession Fee shall increase annually as of the first day of each Contract Year by an amount equivalent to the percentage increase in the CPI; however, the rate shall never decrease.

3.4

Fuel Royalty.

During the Term of this Agreement, Tenant shall pay to City a fuel royalty (“Fuel Royalty”) as established by Title 16 of Salt Lake City Code and set forth on the Salt Lake City Consolidated Fee Schedule, as may be modified from time to time. As of the effective date of this Agreement, the Fuel Royalty is equal to six cents ($0.06) per gallon of fuel obtained by the Tenant from the Consortium, as allowed as a Permitted Use.

3.5

Intentionally Omitted.

3.6

Payment; Proration, Etc.

Commencing on the Commencement Date, Tenant shall pay all Rent and the Concession Fee payable to Landlord by good and sufficient check payable to Landlord or by wire transfer, at such address as Landlord shall designate from time to time. In the event Tenant exercises a Renewal Term, Tenant shall pay Landlord Renewal Term Rent in addition to the Concession Fee and Ground Rent in the same manner. All Rent and other amounts due under this Agreement shall be due and payable as follows:

3.6.1 Monthly in Advance.

Commencing as of the Commencement Date, the following rents and amounts described in this Section 3 shall be due and payable on a monthly basis, in advance and without notice or demand therefore, on the first (1st) day of each month during the term of this Lease, and shall be prorated on a per diem basis for any time period of less than one (1) month: (a) Ground Rent; (b) 1/12^th of the Minimum Annual Concession Fee (b) Renewal Term Rent, if applicable; and (c) Any other charge not otherwise addressed in this Lease.

3.6.2 Annual Reporting and True-Up.

Without notice or demand therefore, Tenant shall furnish to Landlord within ninety (90) days following the close of any Contract Year, a complete and accurate account for all revenues applicable to the Concession Fee collected through the end of the preceding Contract Year. Tenant shall remit the Concession Fee payment as provided in Section 3.3 above. Tenant shall furnish an annual itemized statement of the preceding year’s rents collected in support of the accompanying payment. If Tenant fails to timely furnish City with any of the information required under this Section, the Concession Fee may be determined by assuming Tenant’s activity in any year for which Tenant fails to report its activity is equal to Tenant’s activity during any of the previous twelve (12) months for which Tenant submitted the required information.

3.6.3 Annually in Arrears.

Within ninety (90) days of the close of any Contract Year, Tenant shall pay to Landlord any amounts due of any nature attributable to that Contract Year. Without limitation, Tenant shall pay the balance due for the Concession Fee which is payable monthly in advance, but computed on the basis of the Contract Year. If the amount of the Concession Fee paid monthly during the Contract Year exceeds the amount due when computed on the basis of the Contract Year, then City shall credit the excess balance to Tenant’s account against one (1) or more succeeding monthly payments. In the event this Lease terminates, and Tenant does not hold a subsequent contract against which sums can be credited, then City will make a cash payment of any excess balance due to Tenant. It shall be the duty of Tenant to make a claim of overpayment and resulting credit due, with supporting documentation, which claim will be evaluated by Landlord. Claims must be made within one-hundred eighty (180) days of the close of any Contract Year.

3.7

Statements.

Within ninety (90) days of the close of any Contract Year, Tenant shall furnish to Landlord a written statement, prepared in accordance with generally accepted accounting principles and certified by a responsible officer of the company, and by an officer of Tenant’s independent accounting or auditing firm, specifying the amount of Tenant’s Hangar Rents for the prior Contract Year. The statement shall include a certification that the payments made by Tenant to Landlord during the preceding year were made in accordance with the terms of this Lease. Such statement shall also contain a complete list of the accounts and their balances as shown on the books and records of Tenant, that was used to compute the amounts due to Landlord during the period covered by the statement. Tenant shall respond to all Landlord requests for any additional information related to the Concession Fee or payments due from Tenant hereunder, Tenant will provide it within seven (7) calendar days.

3.8

Late Fees and Interest.

Without waiving any other right of action available to Landlord, in the event of any monetary default hereunder, if Tenant fails to pay when due any amount required to be paid by Tenant under this Lease, Landlord may charge a sum equal to five percent (5%) of such unpaid amount as a service fee each month. In addition, if Tenant fails to pay within ten (10) days of written notice of failure to pay any amount required to be paid by Tenant under this Lease, such unpaid amount shall bear interest at the rate of eighteen percent (18%) per annum from the due date of such amount to the date of payment in full, with interest.

3.9

No Set-offs or Deductions.

All Rent, Concession Fee, and other amounts due shall be paid without abatement, deduction, offset, or prior notice or demand, unless specifically provided otherwise by the terms of the Agreement.

3.10

Accord and Satisfaction.

No payment by Tenant or receipt by Landlord of a lesser amount than the Rent, Concession Fee, and other amounts due hereunder shall be deemed to be other than on account of the Rent, Concession Fee, or other amount due, and no endorsement or statement on any check or in any letter or other transmittal shall be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of any Rent, Concession Fee, and other amounts due, or to Landlord’s right to pursue any other remedy provided in this Lease or by law.

3.11

No Misrepresentation.

Except for the purpose of modifying its accounting practices to meet its business needs, and in accordance with standard General Accepted Accounting Practices (“GAAP”), Tenant shall not modify its accounting treatment or rename or redefine services or products, which under the terms of this Agreement would be subject to the Rent, Concession Fee, or any other amount due.

4.	REAL ESTATE TAXES; UTILITIES

4.1

Real Estate Taxes.

Tenant shall pay and discharge all Real Estate Taxes payable or accruing for all period(s) within the Term. Tenant shall also pay all interest and penalties any Government assesses for late payment of any Real Estate Taxes. Tenant shall, within a reasonable time after notice from Landlord, give Landlord reasonable proof that Tenant has paid any Real Estate Taxes that this Lease or other Law requires Tenant to pay. Nothing herein shall preclude Tenant from paying the Real Estate Taxes under protest and appealing any Real Estate Tax assessment or preclude Tenant from seeking or securing a tax abatement as an economic incentive under any state or local tax incentive program.

4.2

Utilities.

Tenant shall arrange and pay for all fuel, gas, light, power, water, sewage, garbage disposal, telephone, and other utility charges, and the expenses of installation, maintenance, use, and service in connection with the foregoing, for the Premises during the Term. Landlord shall have absolutely no liability or responsibility for the foregoing, provided that Landlord performs its obligations regarding any related application Landlord shall not be liable for damages or any failure or interruption in the supply of any utility services to the Premises, and no such failure or interruption shall entitle Tenant to terminate this Lease. Tenant agrees that it will not install any equipment that exceeds or overloads, or is reasonably expected to exceed or overload, the capacity of any utility facilities and that if any equipment installed by Tenant shall require additional utility facilities, the same shall be installed at Tenant’s sole cost and expense.

5.	FINANCIAL ASSURANCES AND SECURITY

5.1

Lease Security.

Prior to the execution of this Lease, Tenant shall deposit with Landlord the sum equal to fifty percent (50%) of annual Ground Rent and estimated Concession Fee (and including twelve months’ Renewal Term Rent in the event Tenant timely exercises a Renewal Term) (the “Lease Security”). The Lease Security shall be in the form of a performance bond or letter of credit in the form attached as Exhibit D. The performance bond or letter of credit must be irrevocable without the possibility of cancellation and shall automatically renew until cancelled or returned by Landlord. The parties agree that this deposit shall be held by Landlord throughout the Term of this Lease as security for Tenant’s full performance of all its obligations to Landlord, and that Landlord may apply such deposit in Landlord’s sole discretion to any sum that Tenant owes to Landlord under this or any other agreement or obligation to pay, including without limitation late rent, property damage, fines charged to Landlord for conduct of Tenant, badging costs, interest and fees, or other monetary obligations of any kind. Upon expiration or termination of this Lease for any reason, Landlord shall refund the available remaining portion, if any, to Tenant within one hundred-twenty (120) days of Landlord’s determination that all amounts due to Landlord have been paid.

5.2

Letter of Credit.

Tenant may provide the Lease Security in the form of irrevocable commercial standby letters of credit for the amounts this Lease then requires, provided that: (a) such letters of credit are substantially in the form attached hereto as Exhibit D; (b) such letters of credit are payable upon Landlord’s presentation of the original of such letters of credit together with a sight draft to the issuer, accompanied by Landlord’s signed statement that Landlord is entitled to draw on such letters of credit. In addition to the foregoing, such letters of credit shall provide for: (i) continuance for at least one year from issuance; and (ii) automatic extension for additional periods of one year from initial expiry date and each subsequent expiry date, unless the issuer gives Landlord notice of its intention not to renew such letter of credit not less than 60 days before such expiry date (a “Nonrenewal Notice”). Landlord shall consent to reduce or release such letters of credit when and as this Lease would entitle Tenant to any reduction or release of the Lease Security.

5.3

Use of Letter of Credit.

If any of the following occurs, then in addition to the causes for draw set forth in Section 5.1, Landlord may draw upon the balance of the Lease Security in an amount equal to the letter of credit if: (a) the issuer delivers (i) a Nonrenewal Notice or (ii) Notice that such issuer no longer intends to maintain a branch in Salt Lake City, Utah at which Landlord may draw upon such letter of credits, and, in either case “i” or “ii,” Tenant fails to deliver replacement letters of credit that comply with this Lease within 20 days after Tenant receives notice of the occurrence of “i” or “ii” (for purposes of which, the parties shall reasonably cooperate to facilitate the simultaneous exchange of the old letters of credit for the new letters of credit); or (b) the remaining term of the letter of credit is at any time less than 30 days, but Tenant has not delivered an extension or renewal of such letter of credit for at least one year.

5.4

No Assignment by Tenant.

Tenant shall not assign or encumber or attempt to assign or encumber the Lease Security, except in connection with a permitted assignment of this Lease complying with this Lease. Tenant shall provide Landlord written notice of any such permitted assignment.

USE

6.1

Permitted Use.

Tenant may use the Premises only for the Permitted Use, in accordance with all applicable Laws and Industry Standards, including Landlord’s Minimum Standards, as may be specified, adopted, or amended from time to time.

6.2

Exclusive Control.

Subject to the terms herein, Tenant shall have exclusive control, possession, occupancy, use, and management of the Premises, subject to the terms hereof, and preferential rights to use an Airplane Design Group (ADG) IV taxi-lane for airside access to the Premises, including limited adjacent areas, totaling approximately 8.4 acres, as depicted in Exhibit A.

6.3

Signage.

Tenant shall not, without the prior written approval of Landlord, erect, maintain, or display any signs on Airport or the Premises, including advertising signs, billboards, identification signs, or symbols, posters, or any similar devices.

6.3.1 Subject to the foregoing, Tenant shall have the right to install identification signs as may be necessary for the proper conduct of Tenant’s services and approved commercial aeronautical services of Tenant’s Sublessees as contemplated hereunder. All such signs shall be consistent with any overall signing program established or to be established by the Landlord.

6.3.2 Prior to the erection, construction or placing of any sign on Airport or upon Premises, Tenant shall submit for Landlord’s approval drawings, sketches, designs, and dimensions of such signs. Approval shall not be unreasonably withheld. Any conditions, restrictions, or limitations with respect to the use thereof as imposed by Landlord in writing shall become conditions of this Lease.

6.4

Access.

Landlord and its agents, employees, suppliers, contractors, consultants and representatives, and invitees shall have the right to enter, access, ingress and egress upon the Premises for the purposes of: (a) confirming the performance by Tenant of all of Tenant’s obligations under this Lease; (b) doing any other act which the Landlord may be obligated or have the right to perform under this Lease; and (c) for any other lawful purpose. Landlord has the right to enter the Premises at all times without notice in the event of an emergency or for the purpose of making emergency repairs. Under other circumstances, Landlord will make reasonable efforts to give notice of Landlord’s intended entry to Tenant at least forty-eight (48) hours in advance of that entry. Landlord shall conduct its activities in the Premises in a manner that will not cause unreasonable interference with Tenant’s Permitted Use. Tenant waives any claim against the Landlord for any damages, for any injury or interference with Tenant’s business, any loss of occupancy or quiet enjoyment of the Premises or any other loss occasioned by such entry, except to the extent caused by the gross negligence or willful misconduct of the Landlord. The Landlord shall have the right to use any and all means which the Landlord may deem reasonable to open doors or windows in an emergency in order to obtain entry into any Building located on the Premises. Landlord may, at any time, temporarily or permanently close, consent to or request the closing of any roadway or other right of way for such access, ingress or egress, so long as a means of access, ingress and egress reasonably equivalent to that formerly provided. Tenant understands and agrees that there may be inconveniences caused by construction or renovations, and Tenant hereby releases and discharges Landlord from any and all claims, demands or causes of action which Tenant now or at any time hereafter may have against Landlord arising or alleged to arise out of the closing of any right of way or other area used as such whether within or without Airport, so long as such reasonably equivalent access is provided, if necessary.

6.5

Tenant’s Access.

Other than as provided herein, Tenant will have exclusive rights of ingress to and egress from the Premises for Tenant and its Sublessee’s their respective employees, agents, customers, vendors, suppliers and other invitees. In addition, Tenant and Sublessees shall have non-exclusive and non-discriminatory access rights to and from the Premises via the adjacent ramps, taxiways, runways and landside access roads in compliance with all Laws, including Airport Rules & Regulations.

6.6

Cooperation with Airport Development Activities.

Tenant understands and agrees that Landlord is pursuing development activities in connection with the airport redevelopment program that may affect the Premises and other areas at the Airport. Tenant agrees to work cooperatively and in good faith with Landlord and all other tenants or participants in Landlord’s development activities to minimize any disruptions and provide for successful services under this Lease.

7.	COMPLIANCE

7.1

Generally.

Tenant shall during the Term, at Tenant’s expense, in all material respects: (a) comply with all Laws; and (b) procure and comply with all Approvals required by Law.

7.2

Copies of Notices.

Landlord and Tenant shall give the other a copy of any notice each may receive regarding the Premises or any Real Estate Taxes (including any bill or statement), and any notice of nonrenewal or threatened nonrenewal of any Approval that each may receive from any Government, utility company, insurance carrier, or insurance rating bureau.

8.	MAINTENANCE AND CONSTRUCTION

8.1

Condition of Premises.

Subject to the provisions of Section 2.3, Tenant takes the Premises “as is,” and Landlord shall have no obligation with respect to the delivery of the Premises or the condition thereof as of the Effective Date. Tenant acknowledges that it is leasing the Premises after a full and complete examination, including without limitation, subsurface conditions, existing structures thereon, the presence of any Hazardous Materials located on the Premises prior to the Effective Date, and Laws affecting the Premises, and Tenant accepts the same in the same condition in which they or any part thereof are as of the Effective Date, and (except as otherwise expressly provided in this Lease) assumes all risks in connection therewith, without any representation or warranty, express or implied, in fact or by law, on the part of Landlord and without recourse to Landlord. Any information in Landlord’s possession that directly impacts Tenant’s due diligence investigation of the Premises, including without limitation, verbal information, books, records, leases, and related documents, working drawings, plans and specifications, surveys, appraisals, engineers’ reports, geotechnical reports, insurance policies, service contracts, annual operating statements and any title information, as well as information on existing liens, or conditions, is given without any representation or warranty of any kind whatsoever. It is Tenant’s obligation and duty to perform its own due diligence with respect to the Premises and this Lease, and Landlord shall have no liability to Tenant hereunder for failing to provide information, providing incomplete information or otherwise. Tenant shall treat all information made available to Tenant by Landlord as confidential and shall limit the dissemination of such information to Persons who need to know such information in connection with the transaction contemplated hereby or are required or necessary to negotiate or carry out the terms of this Lease.

8.2

Obligation to Maintain.

Tenant at its own expense shall keep and maintain the Premises, including all Improvements and personal property thereon, in clean, neat, safe, sanitary and orderly condition, subject to reasonable wear and tear. Tenant’s obligation to maintain the Premises includes an obligation to make all repairs to the Premises (including plumbing, heating, air conditioning, ventilating, electrical, lighting, fixtures, walls, structure, Building systems, ceilings, floors, windows, doors, plate glass, skylights, landscaping, driveways, site Improvements, curb cuts, parking lots, sidewalks, fences and signs located in, on or at the Premises) as may be required by Law from time to time during the Term, whether structural or nonstructural, foreseen or unforeseen, capital or operating, as well as the obligation to maintain the Premises and all Improvements thereon in accordance with Industry Standards and Landlord’s Tenant Improvement Guidelines and Tenant Design Standards posted on Landlord’s public website at https://slcairport.com/business-services/tenant-improvement-guidelines/, and Landlord’s Minimum Standards, as specified, adopted, and amended from time to time.

8.2.1 Tenant agrees that all maintenance-type services to be performed hereunder shall be accomplished by qualified personnel, or where regulated by law, a properly licensed contractor. All such maintenance, repairs and replacements shall be of quality equal to the original in materials and workmanship.

8.2.2 Tenant shall provide or cause to be provided a complete and proper arrangement for the adequate sanitary handling and disposal, away from Airport, of all trash, garbage, and other refuse caused as a result of the operations conducted on Premises. Tenant shall provide, at its sole expense, suitable covered metal receptacles for all such garbage, trash, and other refuse. Tenant shall keep Premises, at all times, free and clear of wastepaper, trash, rubbish, debris, discarded plastic, graffiti, discarded pallets, or anything unsightly or detrimental to health or likely to create a fire hazard or conducive to deterioration to remain on any part of Premises.

8.2.3 Tenant shall be responsible for snow removal to the lease line at the Premises and shall perform such services using reasonable care to prevent damage to Landlord’s facilities or the property of others. Tenant shall place snow in areas designated by the Landlord.

9.	CONSTRUCTION

9.1.1 Construction Requirements.

Tenant shall perform any construction in accordance with the requirements set forth in the Landlord’s Tenant Improvement Guidelines and Tenant Design Standards set forth on Landlord’s public website, as they may be amended from time to time, unless otherwise provided in this Lease. Tenant shall not erect any structures, make any Improvements or modifications, or do any other construction work on the Premises, or alter, modify, or make additions, Improvements, or repairs (except emergency repairs) to, or replacements of any infrastructure now existing or built, or install any fixtures (other than trade fixtures removable without permanent injury to the Premises or Improvements thereon) without the prior written approval of Landlord as more specifically provided in the Tenant Improvement Guidelines.

9.1.2 Diligence.

Tenant shall with reasonable promptness and reasonable diligence commence, prosecute, and complete Tenant’s construction in a good and workmanlike manner in compliance with all Laws, Industry Standards, the Tenant Improvement Guidelines and Tenant Design Standards, and this Lease.

9.1.3 Fire Suppression.

Tenant will, at its own expense, install and maintain sufficient fire extinguishers or fire suppression systems on the Premises of a kind acceptable and in such locations as directed by the City Fire Marshall. The use of fire-retardant systems containing per-or polyfluoroalkyl substances (PFAS/PFOA) are expressly prohibited.

9.1.4 Construction Bonds.

Prior to the start of any construction, Tenant shall provide or cause to be provided to Landlord a performance and a payment bond in a form acceptable to City Attorney’s Office, in an initial amount of not less than the total construction cost of the project: (a) to guarantee faithful performance of the requirements of this Lease, including all applicable warranties; and (b) to guarantee the payment of all labor, materials, or supplies used directly or indirectly in the prosecution of the work provided for in this Lease and the approved project. Performance bonds shall insure to the benefit of Landlord, and nothing in this Lease shall be construed to create any third-party rights against Landlord. Landlord may draw on the performance bonds in an amount equal to: (a) all reasonable sums that Landlord expends as the result of an Event of Default related to Tenant’s construction obligations under this Lease; (b) an amount equal to Landlord’s reasonable costs of recovering possession and terminating this Lease, stabilizing the Premises, including demolishing any partially constructed Buildings thereon, removing all debris resulting from demolition, returning the Premises to reasonably level and vacant form, and (c) any and all other damages legally recoverable by Landlord, together with reasonable out-of-pocket costs and expenses incurred by Landlord upon the occurrence of an Event of Default. Tenant shall promptly replenish the performance bond to the extent of any such draw.

9.1.5 Construction Contracts.

Tenant shall include in all construction contracts entered into in connection with any approved project, a provision requiring the contractor, or, in the alternative, Tenant, to indemnify, hold harmless, defend and insure Landlord, including but not limited to Landlord’s directors, officers, agents, and employees, against the risk of legal liability for death, injury or damage to persons or property, direct or consequential, arising or alleged to arise out of, or in connection with, the performance of any or all of such construction work, whether the claims and demands made are just or unjust, unless same are caused by the sole negligence or willful misconduct of Landlord, its directors, officers, agents, employees or contractors. Tenant shall furnish, or require the contractor to furnish, insurance, as required herein. Tenant shall include in any construction contract such provisions as may be required by Landlord relating to the operations of the contractor on the Airport.

9.1.6 Default During Construction.

In the event of default by Tenant during the design or construction period of any approved project, Landlord shall have the right, but not the obligation, following written notification to Tenant and an opportunity to cure as provided in Section 17.4, to perform any work Tenant shall have failed to construct in accordance with Tenant’s approved project plans at Tenant’s sole cost and expense. Landlord shall have the right, which right shall be set forth in all contracts between Tenant and its contractors and suppliers for work or materials relating to any approved project, to replace Tenant with itself and to continue the contracts of Tenant with said independent contractors and suppliers. Landlord shall not be required to give any advance notice if, in Landlord’s sole and absolute judgment, Landlord’s action above is necessary to remediate a dangerous condition at the Premises which is a potential hazard to Tenant, Tenant’s employees or agent, other tenants of the Airport or the public or that the Premises does not comply with the requirements of this Lease.

9.1.7 Construction of Commercial Hangar Facilities.

Tenant shall construct commercial hangar facilities on the Premises in accordance with Landlord’s Tenant Design Standards, Hangar Development Standards, Minimum Standards as specified, adopted, and amended from time to time, and all other applicable requirements. Within ninety (90) days after Tenant commences beneficial occupancy of the completed hangar facilities, Tenant shall file a statement of final cost, verified by the chief financial officer of Tenant, with detail acceptable to Landlord showing the cost of construction, along with as built drawings in AutoCAD and paper format. Tenant shall make available to Landlord, at Landlord’s request, receipts and invoices for labor and materials covering the cost of construction of said commercial hangar facility, including architectural, engineering and other related fees and expenses. Tenant’s total investment in all construction shall be approximately Forty Million Dollars and No/100 Dollars ($40,000,000.00).

9.1.8 Excavations.

If an excavation or work is made (or authorized) upon land adjacent to the Premises, then Tenant shall either: (a) afford to the person causing or authorized to cause such excavation or work a license to enter the Premises, including Landlord, in accordance with Tenant’s reasonable instructions, to perform such work as such person shall reasonably deem necessary or desirable; or (b) perform or cause to be performed, without cost or expense to Landlord in its capacity as Landlord under this Lease, work as described in clause “a” to the extent reasonably necessary under the circumstances. Notwithstanding anything to the contrary in this paragraph, Tenant shall comply with all Laws that require access to the Premises for any excavation or remedial work on adjacent land. The work performed under subsection (a) above shall be at no cost to Tenant, the parties performing the work shall take reasonable measures to minimize Tenant and Sublessee’s operations, and the Premises shall be restored to the condition existing prior to the work being performed. Tenant shall not, because of any excavation or work described in this paragraph, have any claim against Landlord in its capacity as such for damages, indemnity, or suspension, diminution, abatement, or reduction of Rent.

9.2

Landlord’s Work.

Landlord, at Landlord’s sole cost and expense, shall complete the following as further described on Exhibit E: (a) design and construction of a non-exclusive access road to the Premises; (b) utility lines necessary for Tenant and other party connections; and (c) a taxilane improvements connecting the Premises to the adjacent taxiway.

10.

PROHIBITED LIENS

10.1

Tenant’s Covenant

If a Prohibited Lien, including any mechanic’s, vendor’s, laborer’s, or material supplier’s statutory lien or other similar lien arising from work, labor, services, equipment, or materials supplied, or claimed to have been supplied, to Tenant (or anyone claiming through Tenant), but only if such lien attaches (or may attach upon termination of this Lease) to the Fee Estate, but excluding an Equipment Lien, is filed then Tenant shall, within forty-five (45) days after receiving Notice from Landlord of such filing (but in any case within fifteen (15) days after Landlord Notifies Tenant of commencement of foreclosure proceedings), cause such Prohibited Lien to be paid, discharged, bonded, or cleared from title. If Landlord receives notice of any such filing, then Landlord shall promptly notify Tenant.

10.2

Protection of Landlord.

Notice is hereby given that Landlord shall not be liable for any labor or materials furnished or to be furnished to Tenant upon credit.

10.3

Equipment Liens.

If Tenant enters into any Equipment Lien, then Tenant shall: (i) not file (or cause or permit to be filed) such Equipment Lien as a lien against the Premises or any part of the Premises (except the Financed FF&E); and (ii) cause to be inserted in the documents for such Equipment Lien a provision to the following effect: Notwithstanding anything to the contrary herein, this chattel mortgage, conditional sales agreement, title retention agreement, or security agreement shall not create or be filed as a lien against the Fee Estate.

11.

HAZARDOUS MATERIALS

11.1

Hazardous Materials.

11.1.1 Standards of Operation – Disposal, Use and Storage of Hazardous Materials.

The voluntary or involuntary release or discharge of Hazardous Materials on the Airport is strictly prohibited (except to the extent, if any, that disposal of Hazardous Materials through the Landlord’s sewerage system complies with all applicable Environmental Laws). Storage and use of Hazardous Materials on the Airport is prohibited, except that Tenant may store and use Hazardous Materials on the Premises in a safe and prudent manner and in accordance with the requirements of all applicable Environmental Laws and Industry Standards and only for those kinds and quantities of Hazardous Materials that are normally used in conducting the activities permitted under this Lease. Tenant shall provide Landlord with a copy of any application for an Approval, if required, for use or storage of Hazardous Materials on the Premises from any regulatory agency responsible for enforcement of Environmental Laws and shall also provide a copy of any permit received from such agency. This Lease does not authorize the Tenant to store and use Hazardous Materials on the Airport other than the Premises.

11.1.2 Liability.

Tenant shall be solely and fully responsible and liable for:

(A) Storage, use or disposal of Hazardous Materials on the Premises or the Airport by Tenant, Tenant’s officers, agents, employees, contractors, permittees or invitees; or

(B) Any hazardous Material release or discharge which is caused by or results from the activities of Tenant, Tenant’s officers, agents, employees, contractors, permittees, Sublessees, or invitees on the Premises or the Airport.

11.1.3 Prevention of Release or Discharge.

Tenant shall take all reasonable precautions to prevent its activities from causing any Hazardous Material release or discharge to occur on the Premises or the Airport and shall take all reasonable precautions to prevent any release or discharge into soil or groundwater or any unlawful release into Landlord’s sanitary or storm drains and sewers at the Airport.

11.1.4 Obligation to Investigate and Remediate.

Tenant, at Tenant’s sole cost and expense, shall promptly investigate and remediate, in accordance with requirements of all applicable Environmental Laws, any release or discharge or threat of release or discharge of Hazardous Materials on the Premises unless Tenant demonstrates that it was caused by a condition that existed prior to Tenant entering the Premises or caused by the Landlord’s negligence or non-compliance with Environmental Laws (including negligence or non-compliance of its officers, agents, employees or contractors) or on the Airport (outside of Premises) caused or resulting from activities of Tenant, Tenant’s officers, agents, employees, contractors, permittees or invitees, including but not limited to any release or discharge or threat of release or discharge into soil or groundwater which was caused or results in whole or in part from the activities of Tenant, Tenant’s officers, agents, employees, contractors, permittees or invitees but excluding the disposal of Hazardous Materials through the Landlord’s sewerage system so long as such disposal complies with all applicable Environmental Laws.

11.1.5 Landlord’s Right to Investigation and Remediation.

In addition to all other rights and remedies of Landlord hereunder, if Tenant does not promptly commence investigation of any such release or discharge or threat of release or discharge or does not diligently pursue appropriate remedial activities as required by applicable Environmental Laws for which Tenant is responsible under this Lease, Landlord, in its discretion and on notice to Tenant as described below, may pay to have same investigated and remediated as required by applicable Environmental Laws, and Tenant shall reimburse Landlord for one hundred and ten percent (110%) of its share of the reasonable and documented costs within thirty (30) days of Landlord’s demand for payment. Notwithstanding the foregoing, Landlord shall be entitled to reimbursement only if it first gives written notice to Tenant of its intention to commence investigation and/or remediation prior to such commencement and Tenant either does not commence diligent pursuit or remedial activities within thirty (30) business days of the notification or does not maintain such diligent pursuit; except prior notice by Landlord is not required if Landlord determines that investigation or remediation is immediately necessary in accordance with Environmental Laws and Tenant does not take appropriate immediate action upon notification.

11.1.6 Environmental Indemnification.

Tenant shall defend (with counsel acceptable to Landlord in Landlord’s reasonable discretion), indemnify and hold Landlord harmless from and against all loss, damage, liability (including all consequential damages) and expense (including, without limitation, the reasonable and necessary costs of any cleanup and remediation of Hazardous Materials as required by applicable Environmental Laws or which may be necessary to redevelop the contaminated Airport property) which Landlord may sustain as a result of the following associated with operations under this Lease:

(A) Storage, use or disposal of Hazardous Materials on the Premises or the Airport by Tenant, Tenant’s officers, agents, employees, contractors, permittees or invitees; or

(B) Any Hazardous Material release or discharge on the Premises or the Airport, including but not limited to any release or discharge into soil or groundwater or Landlord’s sanitary or storm drains and sewers at the Airport or elsewhere, which is caused by or results from the activities of Tenant, Tenant’s officers, agents, employees, contractors, permittees or invitees.

By way of clarification, this indemnity covers any losses relating to Hazardous Materials or Environmental Laws in addition to any indemnity required in Section 11.

11.1.7 Release of Hazardous Materials Claims Against Landlord.

Tenant releases, acquits and forever discharges Landlord from any and all claims, actions, causes of action, demands, rights, damages, costs, including but not limited to loss of use, lost profits, or expenses, which Tenant may now have, or which may hereafter accrue on account of or in any way growing out of all known and unknown, foreseen and unforeseen bodily and personal injuries and property damage, and the consequences thereof resulting or arising out of the presence or cleanup of any Hazardous Material on the Premises or the Airport.

11.1.8 Cessation of Activities.

Tenant shall cease its activities on the Premises and the Airport, to the extent requested by Landlord and upon thirty (30) days’ notice from Landlord, if Landlord determines, in its sole discretion, that such cessation is necessary to investigate, cure or remediate any release or discharge of Hazardous Materials or any threat of a release or discharge thereof; provided, however, that no notice from Landlord for the cessation of activities shall be required in the event of an emergency. Tenant shall not recommence its activities on the Premises or the Airport, as appropriate, until notified by Landlord that such release or discharge or threat of release or discharge of Hazardous Material has been investigated, cured and remediated in a manner satisfactory to Landlord.

11.1.9 Abatement of Fees and Charges on Airport.

Tenant shall not be charged fees or charges for use of the Premises or the Airport to the extent that Tenant is required to cease activities on that portion of the Premises or the Airport due to Landlord’s efforts to investigate, cure or remediate contamination, unless the release or discharge is one for which Tenant is responsible under this Lease.

11.1.10 Records and Inspections.

(A) If Tenant makes any written disclosure, or provides any report, to any Governmental agency concerning a release of Hazardous Materials at the Airport, Tenant shall concurrently also provide a copy of such disclosure or report to Landlord.

(B) Tenant shall promptly deliver a copy to Landlord of all notices that Tenant receives from any Governmental agency or third party concerning a claim or a notice of violation regarding Hazardous Materials at the Airport.

(C) Tenant shall maintain, during the Term of this Lease and for a period of not less than three (3) years after the expiration or termination of this Lease, or for any longer period of time required by any applicable law, regulation, policy, order or decree, separate and accurate records, as required by applicable Environmental Laws, pertaining to the use, handling and disposal of any Hazardous Material(s) by Tenant, Tenant’s officers, agents, employees, contractors, permittees or invitees on or from the Airport.

(D) Upon request by Landlord, Tenant shall furnish Landlord with copies of such records, and such other documentation or reports as the Landlord, from time to time, and at any time during the Term of this Lease, may reasonably require pertaining to the use, handling, disposal, release or discharge of any Hazardous Materials by Tenant, Tenant’s officers, agents, employees, contractors, permittees or invitees on or from the Airport.

(E) Landlord shall have the right, under the terms of this Lease (and at Landlord’s sole expense, except when any release or discharge of Hazardous Materials or threat of release or discharge of Hazardous Materials is caused by Tenant or Tenant’s officers, agents, employees, contractors, permittees or invitees), to enter the Premises during the Term to conduct periodic environmental inspections. Prior to conducting environmental testing, Landlord shall provide seven (7) day’s written notice to Tenant concerning the planned testing procedures and locations. However, in the event of an emergency, no written notice shall be required prior to access to the Premises for any necessary environmental response activities, including environmental testing needed in response to the emergency. Landlord shall endeavor to conduct each inspection or test in the presence of Tenant’s representative and in a manner that does not unreasonably interfere with Tenant’s operations.

11.1.11 No Third Party Beneficiaries.

Except for as provided in Section 28.8, Nothing contained in this Section 10 shall be construed as conferring any benefit on any person not a party to this Lease, nor as creating any right in any person not a party to this Lease to enforcement of any obligation created under this Lease, or waiver of Landlord’s or Tenant’s rights with respect to any third party.

11.1.12 Tenant Obligations Upon Termination.

Prior to vacating the Premises, and in addition to all other requirements under this Lease and without limiting Tenant’s indemnification obligations under this Lease, Tenant shall:

(A) Remove any Hazardous Materials placed or stored on the Premises during the Term by Tenant or as a result of Tenant’s use or occupancy of the Premises during the Term and shall demonstrate to Landlord’s reasonable satisfaction that such removal is in compliance with all applicable Environmental Laws, including without limitation conducting any environmental audits as may be required by Landlord to demonstrate such removal has been completed according to the terms of this Lease.

(B) With respect to any release of Hazardous Materials on the Premises not removed pursuant to prior paragraph (a) and not subject to the exceptions therein, Tenant shall promptly investigate and remediate any such release in accordance with the requirements of all applicable Environmental Laws and permits (“Tenant’s Remediation”). If Tenant’s remediation will leave Hazardous Materials in the soil or groundwater at the Airport prior to completion of the remediation, the Tenant shall obtain the Landlord’s written determination that such Hazardous Materials will not interfere with any reuse of the Premises reasonably contemplated or anticipated by the Landlord. If the Landlord does not make such a determination, Tenant will perform the remedial activities necessary to avoid interference with future reuse of the Premises (“Remediation for Reuse”). In the event Tenant fails to perform Tenants’ Remediation or Remediation for Reuse, the Landlord may conduct such reasonable investigation or remediation after providing Tenant with a written notice thirty (30) days in advance and Tenant does not diligently commence and pursue such actions. If the Landlord incurs such costs, Landlord may invoice one hundred and ten percent (110%) of reasonable and documented costs to Tenant.

11.1.13 Survival of Obligations.

Tenant’s obligations under this Section 910 shall survive the expiration or earlier revocation or suspension of this Lease.

11.2

Stormwater.

11.2.1 Tenant acknowledges that certain properties within the Airport, or on Landlord-owned land, are subject to federal and state stormwater rules and regulations. Tenant agrees to observe and abide by such stormwater rules and regulations as may be applicable to Landlord’s property and Tenant’s uses thereof.

11.2.2 Tenant acknowledges that any stormwater discharge permit issued to Landlord may name Tenant as a co-permittee. Tenant acknowledges further that it may be necessary to undertake such actions to minimize the exposure of stormwater to “significant materials” generated, stored, handled or otherwise used by Tenant, as such term may be defined by applicable stormwater rules and regulations, by implementing and maintaining “best management practices” as that term may be defined in applicable stormwater rules and regulations.

11.2.3 Landlord may provide Tenant with written notice of any stormwater discharge permit requirements applicable to Tenant and with which Tenant may be obligated to comply from time-to-time, including but not limited to: certification of non-stormwater discharges; collection of stormwater samples specific to that Tenant’s operations; preparation of stormwater pollution prevention or similar plans; implementation of best management practices; and maintenance of necessary records. Such written notice shall include applicable deadlines. Tenant agrees that within thirty (30) days of receipt of such written notice it shall notify Landlord in writing if it disputes any of the stormwater permit requirements it is being directed to undertake. If Tenant does not provide such timely notice, Tenant will be deemed to assent to undertake such stormwater permit requirements applicable to Tenant’s operations. In that event, Tenant agrees to undertake, at its sole expense, unless otherwise agreed to in writing between Landlord and Tenant, those stormwater permit requirements that specifically apply to Tenant’s operations and can reasonably be complied with by a single tenant (as opposed to requiring broader cooperation and expense among several parties) for which it has received written notice from Landlord, and Tenant agrees that it will hold harmless and indemnify Landlord for any violations or non-compliance with any such permit requirements.

12.

INDEMNIFICATION; LIABILITY OF LANDLORD

12.1

Obligation to Indemnify.

Tenant shall, at its sole cost and expense, indemnify and hold Landlord and its officers, board members, departments, representatives, Landlord’s authorized representative(s), agents, employees, Affiliates, successors and assigns harmless from and against all losses, claims, demands, suits, actions, legal or administrative proceedings, damages, costs, charges and causes of action of every kind or character whatsoever, including, but not limited to, reasonable attorneys’ and consultants’ fees and other legal costs such as those for paralegal, investigative, legal support services and the actual costs incurred for expert witness testimony, (collectively “Claims”) directly or indirectly arising from, related to or connected with, in whole or in part, Tenant’s use of the Premises, including but not limited to Claims directly or indirectly arising from, related to or connected with, in whole or in part: any act, omission, fraud, wrongful or reckless conduct, fault or negligence by Tenant or its officers, directors, agents, employees, subcontractors or suppliers of any tier, or by any of their employees, agents or persons under their direction or control; violation by Tenant or Tenant’s officers, directors, agents, subcontractors or suppliers of any tier, or by any of their employees, agents and persons under their direction or control, of any copyright, trademark or patent or Law; nonpayment to any of Tenant’s subcontractors or suppliers of any tier, or if any officers, agents, consultants, employees or representatives of Tenant or its subcontractors or suppliers of any tier; and, any other act, omission, fault or negligence, whether active or passive, of Tenant or anyone acting under its direction or control or on its behalf in connection with or incidental to the performance of this Lease (collectively “Acts or Omissions”). This indemnification obligation includes any penalties or fines assessed by the FAA or TSA as well as any other costs to the Landlord, such as investigation and security training, incurred as a result of any violation Law, including the Airport Security plan, by the Tenant, its subcontractors, or anyone directly or indirectly employed by them or anyone for whose acts they may be liable. This Section 11.1 does not apply to Environmental Law and Hazardous Materials discharges, which shall be subject to the indemnity provisions in Section 10.

12.2

Obligation to Defend.

Tenant shall, at its sole cost and expense, defend Landlord and its officers, board members, departments, representatives, authorized representative(s), agents and employees, Affiliates, successors and assigns from and against all Claims that are directly or indirectly based, in whole or in part, upon the allegation or assertions, express or implied, that Tenant, or its officers, directors, agents, subcontractors or suppliers of any tier, or any of their employees, agents or persons under their direction or control, committed any Acts or Omissions, regardless of whether such allegations or assertions are true and whether or not Tenant, or its officers, directors, agents, subcontractors or suppliers of any tier, or any of their employees, agents or persons under their direction or control, are ultimately found liable for such Acts or Omissions.

12.3

Landlord’s Obligation to Tender Claim.

Tenant’s duty to defend shall arise only upon Landlord’s tender of defense to Tenant in writing. Upon receipt of Landlord’s tender of defense, if Tenant does not promptly accept the defense and thereafter duly and diligently defend Landlord and its officers, board members, departments, representatives, authorized representative(s), agents and employees, Affiliates, successors and assigns as provided herein, then Tenant shall pay and be liable for the reasonable costs, expenses and attorney fees incurred after the tender of defense by City and its officers, board members, departments, representatives, authorized representative(s), agents and employees, Affiliates, successors and assigns, in defending against the Claims and enforcing this provision.

12.4

Apportionment of Liability.

Nothing herein shall be construed to require Tenant to indemnify, hold harmless, or defend Landlord from Landlord’s fault, which shall be apportioned between the parties based on the proportionate share of fault of each party or as otherwise allowed under Utah law.

12.5

Validity of Obligations.

The parties intend that the indemnity and defense provisions in this Section 11 shall be interpreted so as to be enforceable to the fullest extent permitted by Law, but nothing herein shall be interpreted in any manner to violate public policy.

12.6

Contractor Indemnities.

Tenant’s agreements with its contractors shall provide in writing (in a form acceptable to Landlord) that each subcontractor shall, jointly and severally with Tenant, indemnify and defend Landlord, and Landlord’s officers, board members, departments, representatives, authorized representative(s), agents and employees, Affiliates, successors and assigns, from any alleged wrongful acts, wrongful omissions, or negligence of the subcontractor, and its officers, directors, agents, subcontractors or suppliers of any tier, and their employees, agents or persons under their direction or control, to at least the same degree as Tenant is bound to indemnify, defend and hold Landlord harmless from and against such alleged acts. Nothing in this Lease shall prevent Tenant from making a claim against its subcontractors for contribution at law or pursuing contribution or indemnification from its subcontractors pursuant to the terms and conditions of the subcontracts between Tenant and its subcontractors.

12.7

Indemnification Procedures.

Wherever this Lease requires Tenant to indemnify and/or defend Landlord:

12.7.1 Prompt Notice.

Landlord shall promptly notify Tenant of any claim. To the extent, and only to the extent, that Landlord fails to give prompt notice and such failure materially prejudices Tenant, Tenant shall be relieved of its indemnity obligations for such claim.

12.7.2 Selection of Counsel.

Tenant shall select counsel reasonably acceptable to Landlord. Even though Tenant shall defend the action, Landlord may, at its option and its own expense, engage separate counsel to advise it regarding the claim and its defense. Such counsel may attend all proceedings and meetings. Tenant’s counsel shall actively consult with Landlord’s counsel. Tenant and its counsel shall, however, fully control the defense.

12.7.3 Cooperation.

Landlord shall reasonably cooperate with Tenant’s defense of Landlord, provided Tenant reimburses Landlord’s actual reasonable out of pocket expenses (including legal costs) of such cooperation.

12.7.4 Settlement.

Tenant may, with Landlord’s consent, settle the claim.

12.8

Insurance Proceeds.

Tenant’s obligations shall be reduced by net insurance proceeds Landlord actually receives for the matter giving rise to indemnification.

13.

INSURANCE

13.1

Tenant to Insure.

Tenant must be covered by insurance for the Tenant’s operations and for subcontractors, and for all other parties for whom the Tenant is legally liable. Tenant, at its own cost and expense, shall secure and maintain the following policies of insurance:

13.1.1 Commercial General Liability Insurance.

Tenant shall provide and maintain commercial general liability insurance naming Landlord as additional insured on a primary and non-contributory basis in comparison to all other insurance including Landlord’s own policy or policies of insurance, for all claims against Landlord described herein. Commercial general liability insurance shall include coverage for bodily injury and property damage, products and completed operations liability, premises operations, acts of independent contractors, and such other coverage as may be necessary to protect Landlord herein from such claims and actions. Said insurance shall have limits of not less than $5,000,000 per occurrence limit of liability. If the policy is issued on a claims made basis, the policy shall be maintained for a period of one (1) year following the completion of this Lease or contain a comparable “extended discovery” clause or “tail coverage.”

13.1.2 Business Auto Coverage Form.

The policy or policies shall provide coverage for owned, hired, and non-owned automobiles. The policy or policies shall provide for limits of at least 5,000,000 dollars.

13.1.3 Workers Compensation.

Tenant shall furnish to Landlord adequate evidence of Workers’ Compensation and employer’s liability insurance sufficient to cover all of Tenant’s employees pursuant to Law, unless a waiver of coverage is allowed and acquired pursuant to Law. In the event any work is subcontracted, Tenant shall require its subcontractor(s) similarly to provide workers’ compensation insurance for all of the latter’s employees, unless a waiver of coverage is allowed and acquired pursuant to Utah law.

13.1.4 Special Form Coverage Insurance.

Tenant shall insure for special form coverage any and all Tenant personal property and Improvements on Premises. Such insurance shall be in an amount equal to the full insurable replacement value of such personal property and Improvements.

(A) All special form coverage insurance policies shall contain loss payable endorsements in favor of the parties as their respective interests may appear hereunder.

(B) All special form coverage insurance policies placed upon Premises may have a loss payable clause in favor of any mortgagee or lender of Tenant, as its interests may appear.

13.1.5 Additional Insured and Pre-Cancellation Notice.

The insurance policies required above shall contain an endorsement listing Salt Lake City Corporation as an additional insured (except for workers’ compensation required in subparagraph 12.1.3 of this Section) and shall further provide that the policy may not be canceled or modified in a way which impairs the protection of the additional insureds without thirty (30) days prior written notice to Landlord (10 days for non-payment).

13.1.6 Certificates of Insurance.

Prior to execution of this Lease by Landlord, the Tenant shall provide City with certificates evidencing the coverage described above in a form acceptable to City Attorney’s Office. All certificates of insurance shall list Salt Lake City Corporation as Certificate Holder.

13.1.7 Delivery of Certificates of Insurance.

Tenant shall deliver certificates of insurance either by mail to the Notice Address listed in Section 20 or by email to airportinsurance@slc.gov.

13.1.8 Rights Reserved by Landlord.

Landlord reserves the right to increase limits and coverage hereunder consistent with Industry Standards, statute or judicial decision, or Airport policy; provided, however, that any such increase shall be consistent with other similarly situated tenants. Tenant shall then cause its insurance coverages hereunder increased to any such new limit.

13.1.9 Landlord Continuance of Coverage.

If any of the policies of insurance required from the Tenant are canceled or lapse, Landlord may, at Landlord’s sole discretion and upon notice to Tenant, obtain substitute coverage at reasonable rates. Landlord may deduct the cost of such coverage, plus ten percent (10%) for administrative charges, from any monies owing to the Tenant.

13.1.10 Policies of Insurance.

At Landlord’s request, the Tenant shall provide Landlord with the actual policies providing the coverage required above.

13.1.11 Quality of Insurance Companies.

All policies of insurance provided shall be issued by insurance companies qualified to do business in the state of Utah and listed on the United States Treasury Department’s current Department of Treasury Fiscal Services List 570, or having a general policyholders rating of not less than “A-” in the most current available A.M. Best Co., Inc.’s, Best Insurance Report.

13.1.12 Waiver of Subrogation.

Notwithstanding any other provisions contained in this Lease, Tenant hereby waives any rights it may have against Landlord on account of any loss or damage to its property including the Premises and its contents, which arises from any risk generally covered by the insurance or any other insurance required to be carried hereunder, whether or not such other party may have been negligent or at fault in causing such loss or damage. Tenant shall obtain a clause or endorsement in the policies of such insurance which it obtains in connection with the Premises or other area at the Airport to the effect that the insurer waives, or shall otherwise be denied, the right of subrogation against Landlord for any loss covered by such insurance.

13.1.13 Adequacy of Coverage.

Property Insurance means fire and property insurance and builder’s risk insurance sufficient to avoid co-insurance, with “ordinance or law” coverage. Such insurance may contain a deductible clause. The payment of deductibles under any insurance policy required by this Lease shall be made solely by the Tenant, and the Landlord shall not have any liability for payment thereof. To the extent customary for like properties at similar airports in the United States, such insurance shall include coverage for explosion of steam and pressure boilers and similar apparatus located on the Premises; coverage for terrorism; an “increased cost of construction” endorsement; and an endorsement covering demolition and cost of debris removal. Premises Insurance shall also include rental or business interruption insurance in an amount at least equal to twelve times annual Rent and Real Estate Taxes and providing for a 6-month extended period of indemnity. The insurance coverage shall be for not less than one hundred percent (100%) of the full replacement value of the Improvements and Building. Throughout the Term of this Lease, Landlord and Tenant shall periodically (but not more often than once per calendar year) determine a reasonable amount clause for the full replacement value of the Improvements and Building. The payment of deductibles under any insurance policy required by this Lease shall be made solely by the Tenant, and the Landlord shall not have any liability for payment thereof. Landlord and Tenant will agree upon a reasonable and customary deductible on said Improvements and Building in light of the creditworthiness and use of the Premises of the new Tenant. Such amount is subject to the final approval by Landlord in Landlord’s sole discretion. Landlord maintains property insurance that covers the Airport, but will not cover any Improvements made by Tenant to the Premises.

13.1.14 Builder’s Risk Insurance.

During any construction activity, Tenant shall obtain and maintain for the benefit of Landlord “special peril” Builder’s Risk insurance equal to one hundred percent (100%) of the value of Tenant’s Improvement project. Coverage shall also include: (a) form work in place; (b) form lumber on site; (c) temporary structures; (d) equipment; and (e) supplies related to the work while at the site. In the event Tenant fails to maintain such insurance, Landlord may, at its option and upon notice to Tenant, arrange therefor, and any premium incurred shall be reimbursed by Tenant to Landlord upon demand.

13.1.15 Pollution Liability Insurance.

Tenant shall obtain and maintain a Pollution Legal Liability Insurance with a limit of not less than $5,000,000 each occurrence or claim, protecting Tenant from and against liability for bodily injury, property damage, personal injury, environmental site restoration, and clean-up costs, including fines and penalties in accordance with applicable EPA and State regulations. This insurance may not exclude coverage for mold and legionella. Tenant must maintain such coverage for a period of five (5) years after the expiration or earlier termination of this Lease. If this insurance contains a general aggregate limit, it must apply separately to operations under this Lease.

13.1.16 Hangarkeeper’s Liability Insurance.

Tenant shall insure for any and all Tenant controlled aircraft on the Leased Premises. Such insurance shall have limits of no less than $5,000,000 each occurrence or claim.

13.1.17 Business Interruption Coverage.

Tenant shall maintain gross earnings and extra expense insurance that shall include coverage for all amounts due in accordance with Article 3of this Agreement for a minimum of a six (6) month period. The proceeds of such insurance shall be used first to continue rent and fee payments due to City in accordance with this Agreement.

14.

LOSSES AND LOSS PROCEEDS

14.1

Notice.

If either party becomes aware of any damage or destruction of any kind or nature, ordinary or extraordinary, foreseen or unforeseen, affecting any or all Improvements, whether or not insured or insurable (“Casualty”), then such party shall promptly notify the other.

14.2

Duty to Repair and Replace.

If less than 30% of the square footage of the Premises (including the Improvements thereon) are damaged by a Casualty, then such damage is deemed an immaterial loss (“Immaterial Loss”) and Tenant shall, at its own cost and expense, promptly repair, replace, and rebuild the Premises and the Improvements, at least to the extent of the value and as nearly as practicable to the character of Improvements existing immediately prior to such occurrence, and in accordance with the procedures for Landlord’s advance review and approval of plans, etc.

14.3

Substantial Casualty.

If 30% or more of the square footage of the Premises (including the Improvements thereon) are damaged by a Casualty, then such damage is deemed a substantial casualty (“Substantial Casualty”) and Tenant will have the option within a period of thirty (30) days of the date of such Substantial Casualty to elect to terminate the Lease by giving Landlord written notice thereof. If Tenant does not exercise this option, Tenant will promptly repair, replace, and rebuild as set forth in Section 13.2 above. If Tenant does not elect to repair, replace, and rebuild, then the Landlord may request that Tenant demolish the Improvements and return the Premises to substantially the same condition as at the Effective Date.

14.4

Adjustment of Claims; Use of Property Insurance Proceeds.

Unless Tenant has validly elected to terminate the Lease due to a Substantial Casualty, Tenant shall have the sole right and authority to adjust any insurance claim. Property insurance proceeds shall be disbursed: (a) in the case of an Immaterial Loss, to Tenant, to be held in trust to be applied first for restoration; and (b) in the case of any other Casualty, to Tenant for the sole purpose of restoration of the Premises in accordance with Section 13.2 above.

15.

LANDLORD’S TRANSFERS AND RELATED RIGHTS

15.1

Utility Easements.

Landlord reserves to itself and the right to grant to others in the future nonexclusive utility easements (including easements for construction, maintenance, repair, replacement and reconstruction) over, under, through, across or on the Premises in locations that will not unreasonably interfere with Tenant’s use thereof. Landlord also reserves to itself, and the right to grant to others in the future, nonexclusive easements for purposes of access to adjacent Airport property or other property adjacent to the Premises in which Landlord has rights over, under, through, across or on the Premises in locations that will not unreasonably interfere with Tenant’s use thereof. Tenant shall not be obligated to maintain or repair facilities constructed by or on behalf of others under authority granted to them by Landlord and located on the Premises, unless the need for repair is caused by Tenant’s negligence or other wrongful conduct. Any interference as a result of any such easements shall be temporary, and all work on the Premises shall proceed expeditiously and in a manner so to not unreasonably interfere with Tenant’s operations on the Premises. Tenant shall be given reasonable notice before commencement of any work on the Premises. Such work shall not result in the closure of any business on the Premises. In the event the installation or maintenance of such future utility lines in such easements causes any damage to the Premises, or any portion thereof, including but not limited to pavement, curbs and sidewalks, the same shall be repaired by Landlord at its expense, if not so repaired by the party installing and maintaining the line.

15.2

Landlord’s Operational Rights.

Landlord reserves to itself a nonexclusive operational easement (including easements for installation, construction, maintenance, repair, replacement and reconstruction) over, under, through, across or on the Premises in locations that will not unreasonably interfere with Tenant’s use thereof to install items related to the operation of the Airport as well as the provision of safety and security for the Airport or as required by law, including without limitation the installation of security cameras and antennas on the roof of any Building that may be constructed on the Premises as well as related facilities and equipment. Tenant shall not be obligated to maintain or repair facilities or equipment constructed or installed under the terms of the aforementioned easement, unless the need for repair is caused by Tenant’s negligence or other wrongful conduct. Any interference as a result of any such easements shall be temporary, and all work on the Premises shall proceed expeditiously and in a manner so as to minimize unreasonable interference with Tenant’s operations. Tenant shall be given reasonable notice before commencement of any work on the Premises. Such work shall not result in the permanent closure of any business on the Premises. In the event any installation or maintenance as permitted under this Section 14.2 causes any damage to the Premises, or any portion thereof, the same shall be repaired by Landlord at its expense.

15.3

Relocation of Premises.

Upon at least twenty-four (24) months’ prior Notice to the Tenant, Landlord shall have the right to relocate, at Landlord’s expense, any portion of Tenant’s facilities located on the Premises and the Improvements constructed thereon at Landlord’s sole cost and expense. Landlord shall relocate the Premises and the Improvements constructed thereon to another comparable location at the Airport, in which event the “Premises” shall be revised to include the new location of such relocated facilities and not to include the former location(s), as appropriate. Except as otherwise agreed between the parties, the Improvements to be constructed by Landlord on the relocated Premises will be of equal or better quality. Landlord agrees to use all reasonable efforts to minimize interference with Tenant’s operations at the Premises in connection with any such relocation.

16.

TITLE; REPAIRS AND MAINTENANCE

16.1

Title.

Tenant, having constructed and paid for the Buildings and Improvements shall be vested with title to and all incidents of ownership solely in the same for the Initial Term, unless this Lease is terminated prior to Initial Term as provided herein or as otherwise permitted by law or court order. At the end of the Initial Term, or termination of this Lease, title to the Building and Improvements shall, at Landlord’s option, vest in Landlord, or Landlord may require the Building and/or Improvements to be removed by Tenant, in which event Tenant shall, at its sole cost and expense, raze and remove all structures on the Premises, safely cap all utilities, and return the site in a level condition with all debris removed, if so required by Landlord. If Tenant exercises, and Landlord approves, any Renewal Term, title to the Building and Improvements will still vest in Landlord but Landlord may not require Tenant to demolish and remove the Building and/or Improvements until the end of the applicable Renewal Term. In the event Landlord elects not to require demolition of the Building and Improvements, Landlord shall accept the Building and Improvements without cost to Landlord and free and clear of any encumbrances with the Building and Improvements and all alterations and additions thereto in a good state of repair, reasonable wear and tear excepted.

16.2

Repairs and Maintenance for the Term.

For the Term, including any and all Renewal Terms, Tenant agrees that it will, at its expense, maintain and keep the Building, the Premises, and all other Improvements thereon in good order and condition and will make all necessary and appropriate repairs, replacements and renewals thereof, including all structural maintenance. Tenant shall not permit rubbish, debris, waste material or anything unsightly or detrimental to health, or likely to create a fire hazard, or conducive to deterioration, to remain on any part of the Premises or to be disposed of improperly. For the Initial Term, Landlord shall not be required to repair or maintain the Building or the Premises in any way.

16.3

Reimbursement to Landlord.

If Tenant fails to make any repairs, maintain the Building, Improvements, or Premises, or do any work required of it within thirty (30) days after written notice of the need therefor has been given to Tenant by Landlord, Landlord may cause to be performed such work for the account and at the expense of Tenant and all sums so expended by Landlord, together with ten percent (10%) of cost for administration, shall be paid by Tenant on demand.

17.

TENANT’S TRANSFERS; SUBLEASES

17.1

Tenant’s Rights.

Except as otherwise provided herein, until such time that the Improvements have been completed and a Certificate of Occupancy for the Premises has been issued, Tenant may not Transfer this Lease without Landlord’s consent, which consent may be granted or withheld in Landlord’s sole discretion. Any approved assignee of Tenant shall assume all obligations and liabilities of Tenant under this Lease. Tenant shall pay all transfer and other taxes payable on account of any Transfer by Tenant. No approved assignment shall affect any obligations of Tenant or rights of Landlord under this Lease, all of which shall continue in full force and effect notwithstanding any Transfer of this Lease. Notwithstanding the foregoing, upon notice to Landlord, Tenant may assign this Lease to an Affiliate at anytime during the Term of this Lease.

17.2

Subleases.

Tenant may enter into Subleases provided the following (a) No Sublease shall affect any obligations of Tenant or rights of Landlord under this Lease, all of which shall continue in full force and effect notwithstanding any Sublease; (b) Subleases must be subordinate to this Agreement; (c) Tenant provides Landlord a listing of all Sublessees upon Landlord’s request; (d) Any Sublease shall expire no later than one hour before the Expiration Date or earlier termination of the Lease; and (e) the fact that any Sublessee causes any Default shall not relieve Tenant of Tenant’s obligation to cure it. Tenant shall take all steps reasonable and necessary to prevent any such Default.

17.3

Conditions to Effectiveness of Certain Transactions.

No assignment of this Lease or Sublease of (substantially) the entire Premises shall be effective or have any validity unless and until such assignment or Sublease otherwise complies with this Lease and Landlord has consented to such sublease or assignment, if required hereunder, and received: (a) in the case of an assignment, an executed counterpart of the assignment and an assumption of this Lease by the assignee, in a form reasonably acceptable to Landlord, effective as of the date of assignment; (b) in the case of a Sublease of all or substantially all the Premises, a copy of the Sublease complying with and subordinate to this Lease, in a form reasonably acceptable to Landlord; and (c) notice of the assignee or Sublessee.

18.

QUIET ENJOYMENT; TITLE TO CERTAIN PREMISES; CERTAIN AGREEMENTS

18.1

Quiet Enjoyment.

So long as this Lease has not been terminated, and Tenant is not in default under this Lease, Landlord covenants that Tenant shall and may peaceably and quietly have, hold, and enjoy the Premises for the Term, subject to the terms of this Lease, without molestation, hindrance, or disturbance by or from Landlord or anyone claiming by or through Landlord or having title to the Premises paramount to Landlord, and free of any encumbrance created or suffered by Landlord.

18.2

Access and Inspection.

Notwithstanding anything to the contrary in this Lease, Landlord and its agents, representatives, and designees may enter the Premises upon notice of at least two (2) business days during regular business hours (except in the case of an emergency), to: (a) ascertain whether Tenant is complying with this Lease; (b) cure Tenant’s Defaults; (c) inspect the Premises and any Construction; (d) perform such tests, borings, and other analyses as Landlord determines may be necessary or appropriate relating to (non)compliance with any Laws or possible Hazardous Materials discharge; or (e) show the Premises to a prospective Transferee or Fee Mortgagee. In entering the Premises, Landlord and its designees shall not unreasonably interfere with operations on the Premises and shall comply with Tenant’s reasonable instructions.

18.3

Title.

Notwithstanding anything to the contrary in this Lease, all Improvements, Building Equipment, and FF&E located in, on, or at the Premises or otherwise constituting part of the Premises shall during the Term be owned by, and belong to, Tenant. All benefits and burdens of ownership of the foregoing, including title, depreciation, tax credits, and all other tax items, shall be and remain in Tenant during the Term. Upon termination of this Lease prior to full Term for any reason, title to and ownership of all Improvements constructed or installed by Tenant on the Premises, including without limitation the Improvements, shall vest in Landlord. Title to Tenant’s trade equipment shall not vest in Landlord unless Tenant fails to remove all trade equipment or other personal property from the Premises within thirty (30) days from such termination.

19.

EVENTS OF DEFAULT; REMEDIES

19.1

Definition of “Event of Default”.

An “Event of Default” means the occurrence of any one or more of the following:

19.1.1 Monetary Default.

If Tenant fails to pay any Rent or other money (including Real Estate Taxes and insurance premiums) when and as this Lease requires (“Monetary Default”) and continues for ten days after notice to Tenant.

19.1.2 Prohibited Liens.

If Tenant fails to comply with any obligation regarding Prohibited Liens and does not remedy such failure within thirty (30) days after notice from Landlord.

19.1.3 Bankruptcy or Insolvency.

If Tenant ceases to do business as a going concern, ceases to pay its debts as they become due or admits in writing that it is unable to pay its debts as they become due, or becomes subject to any bankruptcy proceeding (except an involuntary bankruptcy proceeding dismissed within one hundred and eighty (180) days after commencement), or a custodian or trustee is appointed to take possession of, or an attachment, execution or other judicial seizure is made with respect to, substantially all of Tenant’s assets or Tenant’s interest in this Lease (unless such appointment, attachment, execution, or other seizure was involuntary and is contested with diligence and continuity and vacated and discharged within one hundred and eighty (180) days).

19.1.4 Nonmonetary Default.

If Tenant fails to comply with any affirmative or negative covenant or obligation in this Lease, except a Monetary Default; or breaches any representation or warranty (as of the date made or deemed made), and Tenant does not cure it within thirty (30) days after notice from Landlord, or, if the nature of the default is such that is cannot with due diligence be cured within thirty (30) days, Tenant fails to advise Landlord of Tenant’s intention to take all reasonable steps to cure such Nonmonetary Default, and duly commence such cure within such period, and then diligently prosecute such cure to completion; and (c) complete such cure within a reasonable time under the circumstances (not necessarily limited to thirty (30) days).

19.2

Remedies.

If an Event of Default occurs, then Landlord shall, at Landlord’s option, have any or all of the following remedies, all cumulative (so exercise of one remedy shall not preclude exercise of another remedy), in addition to such other remedies as may be available at law or in equity or under any other terms of this Lease. Landlord’s remedies include:

19.2.1 Termination of Tenant’s Rights.

Landlord may terminate Tenant’s right to possess the Premises upon notice, in which case this Lease shall terminate, such date of termination shall be the Expiration Date, and Tenant shall immediately surrender possession to Landlord.

19.2.2 Taking Possession.

Upon termination of this Lease by Landlord, Landlord may re-enter and take possession of the Premises, and remove Tenant without thereby being liable for damages or guilty of trespass. This is intended to constitute an express right of re-entry by Landlord. No re-entry by Landlord shall absolve or discharge Tenant from liability under this Lease.

19.2.3 Suits Before Expiration Date.

Landlord may sue for damages or to recover Rent from time to time at Landlord’s election.

19.2.4 Receipt of Moneys.

No receipt of money by Landlord from Tenant after termination of this Lease, or after the giving of any notice of termination of this Lease, shall reinstate, continue, or extend this Lease or affect any notice theretofore given to Tenant, or waive Landlord’s right to enforce payment of any Rent payable or later falling due, or Landlord’s right to recover possession by proper remedy, except as this Lease expressly states otherwise, it being agreed that after service of notice to terminate this Lease, Landlord may demand, receive, and collect any moneys due or thereafter falling due without in any manner affecting such notice, proceeding, order, suit or judgment, all such moneys collected being deemed payments on account of use and occupation or, at Landlord’s election, on account of Tenant’s liability.

19.2.5 No Waiver.

No failure by Landlord to insist upon strict performance of any covenant, agreement, term, or condition of this Lease or to exercise any right or remedy upon a Default, and no acceptance of full or partial Rent during continuance of any such Default, shall waive any such Default or such covenant, agreement, term, or condition. No covenant, agreement, term, or condition of this Lease to be performed or complied with by Tenant, and no Default, shall be modified except by a written instrument executed by Landlord. No waiver of any Default shall modify this Lease. Each and every covenant, agreement, term, and condition of this Lease shall continue in full force and effect with respect to any other then-existing or subsequent Default of such covenant, agreement, term or condition of this Lease.

19.2.6 Security Devices.

Landlord may change the locks and other security devices providing admittance to the Premises.

19.2.7 Damages.

Landlord may recover from Tenant all damages Landlord incurs by reason of Tenant’s Default, including reasonable costs of recovering possession, reletting the Premises, and any and all other damages legally recoverable by Landlord, and reimbursement of Landlord’s out of pocket costs, including attorneys’ and consultants’ fees, and fees for dishonored checks.

19.2.8 Injunction of Breaches.

Whether or not an Event of Default has occurred, Landlord may obtain a court order enjoining Tenant from continuing any Default or from committing any threatened Default. Tenant specifically and expressly acknowledges that damages may not constitute an adequate remedy for any nonmonetary default.

19.2.9 Continue Lease.

Landlord may at Landlord’s option maintain Tenant’s right to possession. In that case, this Lease shall continue and Landlord may continue to enforce it, including the right to collect Rent when due and any remedies for nonpayment.

19.2.10 Restoration Funds.

Upon any termination of this Lease, to the extent that Landlord holds any insurance proceeds, they shall be applied solely as Landlord directs, including as a payment toward any sums then payable to Landlord.

19.3

Tenant’s Late Payments; Late Charges.

If Tenant fails to make any payment to Landlord required under this Lease within ten days after receipt of notice, then in addition to any other remedies of Landlord, and without reducing or adversely affecting any of Landlord’s other rights and remedies, Tenant shall pay Landlord interest rate of 18% per annum on such late payment, beginning on the date such payment was first due and payable and continuing until the date when Tenant actually makes such payment.

19.4

Landlord’s Right to Cure.

If Tenant at any time fails to make any payment or take any action this Lease requires, then Landlord, after 30 days’ notice to Tenant, or in an emergency with such notice (if any) as is reasonably practicable under the circumstances, and without waiving or releasing Tenant from any obligation or Default and without waiving Landlord’s right to take such action as this Lease may permit as a result of such Default, may (but need not) make such payment or take such action. Tenant shall reimburse Landlord for an amount equal to (a) all reasonable sums paid, and reasonable costs and expenses (including legal costs) incurred, by Landlord in exercising its cure rights under this paragraph; and (b) interest of 18% per annum on the amount in subparagraph 18.4(a).

19.5

Holding Over.

No holding over is permitted, and if for any reason or no reason Tenant remains in the Premises after the Expiration Date, then Landlord will suffer injury that is substantial, difficult, or impossible to measure accurately. Therefore, if Tenant remains in the Premises after the Expiration Date, for any reason or no reason, then in addition to any other rights or remedies of Landlord, Tenant shall pay to Landlord, as liquidated damages and not as a penalty, for each month (prorated daily for partial months) during which Tenant holds over after the Expiration Date, a sum equal to 200% times the monthly Rent, including Additional Rent, payable under this Lease during the year preceding the Expiration Date.

19.6

Accord and Satisfaction; Partial Payments.

No payment by Tenant or receipt by Landlord of a lesser amount than the amount owed under this Lease shall be deemed to be other than a part payment on account by Tenant. Any endorsement or statement on any check or letter accompanying any check or payment of Rent shall not be deemed an accord or satisfaction. Landlord may accept any such check or payment without prejudice to Landlord’s right to recover the balance of such Rent or pursue any other remedy.

19.7

Miscellaneous.

Landlord and Tenant further agree as follows with respect to any Defaults and Landlord’s rights and remedies.

19.8

Survival.

No termination of this Lease and no taking possession of or reletting the Premises shall relieve Tenant of its liabilities and obligations hereunder, all of which shall survive such expiration, termination, repossession, or reletting, but subject to any limitations on personal liability or recourse in this Lease.

19.9

Multiple Suits.

Landlord may sue to recover damages, or sum(s) equal to any installment(s) of Rent payable by Tenant, from time to time at Landlord’s election. Nothing in this Lease requires Landlord to await the date when this Lease or the Term would have expired absent an Event of Default and a resulting termination of this Lease.

20.

END OF TERM

Upon the Expiration Date: (a) all Improvements shall become Landlord’s property; (b) Tenant shall deliver to Landlord possession of the Premises, in the condition this Lease requires, subject to any loss that this Lease does not require Tenant to restore; (c) Tenant shall surrender any right, title, or interest in and to the Premises and deliver such evidence and confirmation thereof as Landlord reasonably requires; (d) Tenant shall deliver the Premises free and clear of all: (i) subleases, and (ii) liens except liens that Landlord or any of its agents caused; (e) Tenant shall assign to Landlord, without recourse, and give Landlord copies or originals of, all assignable licenses, permits, contracts, warranties, and guarantees then in effect for the Premises; (f) the parties shall adjust for any prepaid Rent and shall make such payments as shall be appropriate on account of such adjustment in the same manner as for a sale of the Premises (but any sums otherwise payable to Tenant shall first be applied to cure any Default); and (g) the parties shall terminate the Memorandum of Lease. Notwithstanding anything to the contrary in this paragraph, Tenant shall remove from the Premises any FF&E, and Tenant must do so within thirty (30) days after the Expiration Date, at which point title to any remaining FF&E shall immediately pass to Landlord.

21.

NOTICES

All notices shall be in writing and addressed to Landlord or Tenant respectively. Notices Either party may change its address by notice in compliance with this Lease. Notice of such a change shall be effective only upon receipt. Any party giving a notice may request the recipient to acknowledge receipt of such notice. The recipient shall promptly comply with any such request, but failure to do so shall not limit the effectiveness of any notice.

Notice will be sufficient if delivered to the following Notice Addresses by hand delivery directly to the named individual or title, by express U.S. mail postage prepaid, or by overnight delivery service for which delivery receipt is required.

To City:

Airport Contracts and Procurement Manager

Salt Lake City Department of Airports

Salt Lake City International Airport

P.O. Box 145550

Salt Lake City, Utah 84114-5550

Email: Airport.Notices@slc.gov

Hand delivery:

Airport Contracts and Procurement Manager

Salt Lake City Department of Airports

Salt Lake City International Airport

Administrative Offices, Third Floor

3920 West Terminal Drive

Salt Lake City, Utah 84122

Ph. No. (801) 575-2401

Overnight carrier:

Airport Contracts and Procurement Manager

Salt Lake City Department of Airports

Salt Lake City International Airport

3619 West 510 North

Salt Lake City, Utah 84116

Ph. No. (801) 575-2401

To Tenant:

SLC Development LLC

c/o Sky Harbour LLC

136 Tower Rd., Suite 205

White Plains, NY 10605

ATTN: Alison Squiccimarro, In House Counsel

Ph. No. (914) 261-8382

Email: asquiccimarro@skyharbour.group

With a copy to:

Sky Harbour LLC

3851 NW 145^th St

Opa-locka, FL 33054

With a copy:

Approved Leasehold Mortgagee (subject to notice requirement to Landlord described below)

Any notice delivered by hand shall be deemed received by the addressee upon actual delivery; any notice delivered by overnight delivery service or express mail as set forth in this Lease shall be deemed received by the addressee on the following business day after deposit. The parties may designate in writing other Notice Addresses for notice from time to time.

If an Approved Leasehold Mortgagee, as defined in Section 28, provides written notice to Landlord containing notice of an Approved Leasehold Mortgagee’s address for notices, and an Approved Leasehold Mortgagee receives written confirmation of Landlord’s receipt of such notice of interest and notice address, then Landlord will send notices of Tenant’s default under this Lease to such Approved Leasehold Mortgagee in the same manner as set forth above.

22.

ADDITIONAL DELIVERIES; THIRD PARTIES

22.1

Estoppel Certificates.

Up to twice a year, Tenant may request that Landlord execute, acknowledge, and deliver to Tenant (or directly to a designated third party) an estoppel certificate in substantially the form provided in Exhibit B.

22.2

Further Assurances.

Each party shall execute and deliver such further documents, and perform such further acts, as may be reasonably necessary to achieve the parties’ intent in entering into this Lease.

22.3

Amendment.

Any amendment of this Lease must be in writing signed by both parties.

22.4

Successors and Assigns.

This Lease shall bind and benefit Landlord and Tenant and their successors and assigns, but this shall not limit or supersede any Transfer restrictions.

22.5

No Third-Party Beneficiaries.

Except as stated in Section 28.8, nothing in this Lease confers on any Person (except Landlord and Tenant) any right to insist upon, or to enforce against Landlord or Tenant, the performance or observance by either party of its obligations under this Lease.

23.

MISCELLANEOUS

23.1

Performance Under Protest.

If a dispute arises about performance of any obligation under this Lease, the party against which such obligation is asserted shall have the right to perform it under protest, which shall not be regarded as voluntary performance. A party that has performed under protest may institute appropriate proceedings to recover any amount paid or the reasonable cost of otherwise complying with any such obligation, with interest at the Prime Rate.

23.2

Survival.

All rights and obligations that by their nature are to be performed after any termination of this Lease shall survive any such termination.

23.3

Force Majeure.

Neither Landlord nor Tenant shall be liable in any manner for any failure or delay in the performance or fulfillment of any of its duties or obligations hereunder, other than Tenant’s payment of Rent, to the extent resulting from any cause or circumstance beyond its reasonable control or reasonable ability to remedy, including, but not limited to, acts of God, federal or state laws, or Governmental regulations, orders or restrictions, war, war-like conditions, hostilities, mobilization, blockades, embargo or other transportation delay, detention, revolution, riot, looting, strike, lockout or other labor disputes, shortages of labor, inability to secure fuel, materials, supplies or power or because of shortages thereof, epidemic, fire or flood. In connection therewith, Landlord reserves the right to allocate its resources as it, in its sole discretion, deems fair and equitable. Either party shall have a reasonable amount of time after such cause or circumstance described above is remedied to perform the obligations of the party under this Lease.

24.

INTERPRETATION, EXECUTION, AND APPLICATION OF LEASE

24.1

Captions.

The captions of this Lease are for convenience and reference only. They in no way affect this Lease.

24.2

Counterparts.

This Lease may be executed electronically and in counterparts, all of which shall constitute one complete document for the purposes hereof.

24.3

Delivery of Drafts.

Neither party shall be bound by this Lease unless and until such party shall have executed and delivered at least one counterpart of this Lease. The submission of draft(s) or comment(s) on drafts shall bind neither party in any way. Such draft(s) and comment(s) shall not be considered in interpreting this Lease.

24.4

Entire Agreement.

This Lease contains all terms, covenants, and conditions about the Premises. The Parties have no other understandings or agreements, oral or written, about the Premises or Tenant’s use or occupancy of, or any interest of Tenant in, the Premises.

24.5

Governing Law; Venue.

This Lease, its interpretation and performance, the relationship between the parties, and any disputes arising from or relating to any of the foregoing, shall be governed, construed, interpreted, and regulated under the laws of the State of Utah, without regard to principles of conflict of laws. Venue for any action arising from this Lease shall be solely in the state and federal courts of Salt Lake County, Utah.

24.6

Partial Invalidity.

If any term or provision of this Lease or its application to any party or circumstance shall to any extent be invalid or unenforceable, then the remainder of this Lease, or the application of such term or provision to persons or circumstances except those as to which it is invalid or unenforceable, shall not be affected by such invalidity. All remaining provisions of this Lease shall be valid and be enforced to the fullest extent that Laws allow.

24.7

Principles of Interpretation.

No inference in favor of or against any party shall be drawn from the fact that such party has drafted any part of this Lease. The parties have both participated substantially in its negotiation, drafting, and revision, with advice from counsel and other advisers. A term defined in the singular may be used in the plural, and vice versa, all in accordance with ordinary principles of English grammar, which also govern all other language in this Lease. The words “include” and “including” shall be construed to be followed by the words: “without limitation.” Each of these terms shall be interpreted as if followed by the words “(or any part of it)” except where the context clearly requires otherwise: Building Equipment; FF&E; Fee Estate; Improvements; Land; Leasehold Estate; Premises; Structure; and any other similar collective noun. Every reference to any document, including this Lease, refers to such document as Modified from time to time (except, at Landlord’s option, any Modification that violates this Lease), and includes all exhibits, schedules, and riders to such document. The word “or” includes the word “and.”

24.8

Rules and Regulations.

At its sole cost and expense, Tenant shall comply, and shall exercise reasonable efforts to cause its agents, employees, guests, invitees and contractors to comply, with all rules and regulations governing the conduct at the Airport and the operations of the Airport, promulgated from time to time by the Airport Director.

25.

REQUIRED FEDERAL PROVISIONS

25.1

Subordination to Governmental Agreements.

This Lease and all provisions hereof are subject and subordinate to the terms and conditions of any existing or future agreement entered into between Landlord and the United States of America for the improvement or operation and maintenance of Airport, the execution of which has been or may be required as a condition precedent to the transfer of federal rights or property to the Landlord for Airport purposes, or the expenditure of federal funds for the improvements or development of Airport; this Lease will be subject to any ordinances, rules or regulations which have been, or may hereafter be adopted pertaining to Airport. Tenant shall reasonably abide by the requirements of agreements entered into between Landlord and the United States, and shall consent to amendments and modifications of this Lease if required by such agreements or if required as a condition of the Landlord’s entry into such agreements.

25.2

Right of Flight.

It will be a condition of this Lease, that Landlord reserves unto itself, its successors and assigns, for the use and benefit of the public, a right of flight for the passage of aircraft in the airspace above the surface of the real property herein described, together with the right to cause in said airspace such noise as may be inherent in the operation of aircraft, now known or hereafter used, for navigation of or flight in the said airspace, and for use of said airspace for landing on, taking off from or operating on Airport.

25.3

Non-Interference.

Tenant, by entering into this Lease agrees for itself, its successors, and assigns that it will not do or permit to be done by its officers, agents, employees, contractors or invitees, any act or omission that could reasonably be expected to interfere with the landing and taking off of aircraft from the Airport or otherwise constitute a hazard, or unreasonably interfere with the conduct of business by an Air Carrier, tenant or contractor of Landlord, or unreasonably interfere with the performance of their duties by the staff of Landlord or by the staff of FAA, TSA or any other agency of the U.S. Government, or of the contractors thereof. In the event this covenant is breached, Landlord reserves the right, in addition to any other rights or remedies under this Lease or in law or equity, to enter upon the Premises and cause the abatement of such interference at the expense of Tenant.

25.4

General Civil Rights Provisions.

In all its activities within the scope of its airport program, Tenant agrees to comply with pertinent statutes, Executive Orders, and such rules as identified in Title VI List of Pertinent Nondiscrimination Acts and Authorities to ensure that no person shall, on the grounds of race, color, national origin (including limited English proficiency), creed, sex (including sexual orientation and gender identity), age, or disability be excluded from participating in any activity conducted with or benefiting from Federal assistance. If the Tenant transfers its obligation to another, the transferee is obligated in the same manner as the Tenant. The above provision obligates the Tenant for the period during which the property is owned, used or possessed by the Tenant and the Landlord remains obligated to the Federal Aviation Administration.

25.5

Compliance with Nondiscrimination Requirements.

During the performance of this Lease, the Tenant, for itself, its assignees, and successors in interest (hereinafter referred to as the “Tenant”), agrees as follows:

25.5.1 Compliance with Regulations.

The Tenant (hereinafter includes consultants) will comply with the Title VI List of Pertinent Nondiscrimination Acts and Authorities, as they may be amended from time to time, which are herein incorporated by reference and made a part of this Lease.

25.5.2 Nondiscrimination.

The Tenant, with regard to the work performed by it during the Lease, will not discriminate on the grounds of race, color, national origin (including limited English proficiency), creed, sex (including sexual orientation and gender identity), age, or disability in the selection and retention of subcontractors, including procurements of materials and leases of equipment. The Tenant will not participate directly or indirectly in the discrimination prohibited by the Nondiscrimination Acts and Authorities, including employment practices when the contract covers any activity, project, or program set forth in Appendix B of 49 CFR part 21.

25.5.3 Solicitations for Subcontracts, including Procurements of Materials and Equipment.

In all solicitations, either by competitive bidding or negotiation made by the Tenant for work to be performed under a subcontract, including procurements of materials, or leases of equipment, each potential subcontractor or supplier will be notified by the Tenant of the contractor’s obligations under this contract and the Nondiscrimination Acts and Authorities on the grounds of race, color, or national origin.

25.5.4 Information and Reports.

Tenant will provide all information and reports required by the Acts, the Regulations, and directives issued pursuant thereto and will permit access to its books, records, accounts, other sources of information, and its facilities as may be determined by the Sponsor or the Federal Aviation Administration to be pertinent to ascertain compliance with such Nondiscrimination Acts and Authorities and instructions. Where any information required of a contractor is in the exclusive possession of another who fails or refuses to furnish the information, the Tenant will so certify to the Sponsor or the Federal Aviation Administration, as appropriate, and will set forth what efforts it has made to obtain the information.

25.5.5 Sanctions for Noncompliance.

In the event of Tenant’s noncompliance with the non-discrimination provisions of this contract, the Sponsor will impose such contract sanctions as it or the Federal Aviation Administration may determine to be appropriate, including, but not limited to:

(A)

Withholding payments to the Contractor under the contract until the Contractor complies; and/or

(B)

Cancelling, terminating, or suspending a contract, in whole or in part.

25.5.6 Incorporation of Provisions.

Tenant will include the provisions of paragraphs 23.5.1 through 23.5.6 in every subcontract, including procurements of materials and leases of equipment, unless exempt by the Acts, the Regulations, and directives issued pursuant thereto. Tenant will take action with respect to any subcontract or procurement as the Landlord or the Federal Aviation Administration may direct as a means of enforcing such provisions including sanctions for noncompliance. Provided, that if the Tenant becomes involved in, or is threatened with litigation by a subcontractor, or supplier because of such direction, Tenant may request the Landlord to enter into any litigation to protect the interests of the Landlord. In addition, Tenant may request the United States to enter into the litigation to protect the interests of the United States.

25.6

Lease of Real Property.

In the event facilities are constructed, maintained, or otherwise operated on the property described in this (deed, license, lease, permit, etc.) for a purpose for which a Federal Aviation Administration activity, facility, or program is extended or for another purpose involving the provision of similar services or benefits, the (grantee, licensee, lessee, permittee, etc.) will maintain and operate such facilities and services in compliance with all requirements imposed by the Nondiscrimination Acts and Regulations listed in the Title VI List of Pertinent Nondiscrimination Acts and Authorities (as may be amended) such that no person on the grounds of race, color, or national origin, will be excluded from participation in, denied the benefits of, or be otherwise subjected to discrimination in the use of said facilities.

25.7

Affirmative Action.

The Tenant for himself/herself, his/her heirs, personal representatives, successors in interest, and assigns, as a part of the consideration hereof, does hereby covenant and agree as a covenant running with the land that (1) no person on the ground of race, color, or national origin, will be excluded from participation in, denied the benefits of, or be otherwise subjected to discrimination in the use of said facilities, (2) that in the construction of any improvements on, over, or under such land, and the furnishing of services thereon, no person on the ground of race, color, or national origin, will be excluded from participation in, denied the benefits of, or otherwise be subjected to discrimination, (3) that the Tenant will use the premises in compliance with all other requirements imposed by or pursuant to the Title VI List of Pertinent Nondiscrimination Acts and Authorities.

In the event of breach of any of the above Non-discrimination covenants, Landlord will have the right to terminate the Lease and to enter or re-enter and repossess said land and the facilities thereon, and hold the same as if said Lease had never been made or issued.

25.8

Title VI of Pertinent Nondiscrimination Acts and Authorities.

During the performance of this Lease, Tenant, for itself, assignees, and successors-in-interest (hereinafter referred to as the “Tenant”) agrees to comply with the following non-discrimination statutes and authorities; including but not limited to:

(a)

Title VI of the Civil Rights Act of 1964 (42 USC § 2000d et seq., 78 stat. 252) (prohibits discrimination on the basis of race, color, national origin);

(b)

49 CFR part 21 (Non-discrimination in Federally-Assisted programs of the Department of Transportation—Effectuation of Title VI of the Civil Rights Act of 1964);

(c)

The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, (42 USC § 4601) (prohibits unfair treatment of persons displaced or whose property has been acquired because of Federal or Federal-aid programs and projects);

(d)

Section 504 of the Rehabilitation Act of 1973 (29 USC § 794 et seq.), as amended (prohibits discrimination on the basis of disability); and 49 CFR part 27 (Nondiscrimination on the Basis of Disability in Programs or Activities Receiving Federal Financial Assistance);

(e)

The Age Discrimination Act of 1975, as amended (42 USC § 6101 et seq.) (prohibits discrimination on the basis of age);

(f)

Airport and Airway Improvement Act of 1982 (49 USC § 47123), as amended (prohibits discrimination based on race, creed, color, national origin, or sex);

(g)

The Civil Rights Restoration Act of 1987 (PL 100-259) (broadened the scope, coverage and applicability of Title VI of the Civil Rights Act of 1964, the Age Discrimination Act of 1975 and Section 504 of the Rehabilitation Act of 1973, by expanding the definition of the terms “programs or activities” to include all of the programs or activities of the Federal-aid recipients, sub-recipients and contractors, whether such programs or activities are Federally funded or not);

(h)

Titles II and III of the Americans with Disabilities Act of 1990 (42 USC § 12101, et seq) (prohibit discrimination on the basis of disability in the operation of public entities, public and private transportation systems, places of public accommodation, and certain testing entities) as implemented by U.S. Department of Transportation regulations at 49 CFR parts 37 and 38;

(i)

The Federal Aviation Administration’s Nondiscrimination statute (49 USC § 47123) (prohibits discrimination on the basis of race, color, national origin, and sex);

(j)

Executive Order 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (ensures nondiscrimination against minority populations by discouraging programs, policies, and activities with disproportionately high and adverse human health or environmental effects on minority and low-income populations);

(k)

Executive Order 13166, Improving Access to Services for Persons with Limited English Proficiency, and resulting agency guidance, national origin discrimination includes discrimination because of limited English proficiency (LEP). To ensure compliance with Title VI, you must take reasonable steps to ensure that LEP persons have meaningful access to your programs (70 Fed. Reg. 74087 (2005);

(l)

Title IX of the Education Amendments of 1972, as amended, which prohibits you from discriminating because of sex in education programs or activities (20 USC § 1681, et seq).

25.9

Exclusive Rights.

Nothing contained in this Lease shall be deemed to grant to Tenant any exclusive right or privilege within the meaning of 49 U.S.C. § 40103€ or any other Law, except that, subject to the terms and provisions of this Lease, Tenant shall have the right to exclusive possession of the Premises under this Lease. Landlord reserves the right to allow others to provide the same or similar operations as the Permitted Uses at the Airport.

25.10

Americans with Disabilities Act (ADA).

Tenant acknowledges that, pursuant to the Americans with Disabilities Act, 42 U.S.C. Sections 12101 et seq. and applicable Utah law concerning public access for persons with disabilities, as amended and supplemented (ADA) and the Air Carrier Access Act, 49 U.S.C. Section 41705, as amended and supplemented (ACAA), to the extent applicable to Tenant, programs, services and other activities provided by a public entity to the public, whether directly or through a contractor, must be accessible to the disabled public. To the extent the ADA or the ACAA is so applicable: (a) Tenant shall provide the services specified in this Lease in a manner that complies with the ADA or the ACAA, as applicable, and any and all other applicable federal, State and local disability rights legislation; (b) Tenant agrees not to discriminate against disabled persons in the provision of services, benefits or activities provided under this Tenant; and (c) Tenant further agrees that any violation of this prohibition on the part of Tenant, its employees, agents or assigns shall constitute a material breach of this Lease.

25.11

Waiver of Visual Artists Rights.

Tenant shall not install any object in the Premises that constitutes a work of visual art under the Visual Artists Rights Act of 1990 (VARA) unless and until Tenant has (a) obtained the prior written approval of Landlord and (b) provided Landlord with a written waiver from the author of such work of visual art, in form and substance reasonably satisfactory to Landlord, which waiver shall identify specifically the work of visual art and the uses of that work to which the waiver applies in accordance with 17 U.S.C. § 106A(e)(1) and that specifies that installation of the work may subject the work to destruction, distortion, mutilation, or other modification, by reason of its removal in accordance with 17 U.S.C. § 113(d)(1)(B).

25.12

Right to Develop Airport.

Landlord reserves the right to further develop or improve the Airport as it sees fit, regardless of the desires or view of Tenant and without interference or hindrance.

25.13

Federal Government’s Emergency Clause.

All provisions of this Lease shall be subordinate to the rights of the United States of America to operate the Airport or any part thereof during time of war or national emergency. Such rights shall supersede any provisions of this Lease inconsistent with the operations of the Airport by the United States of America.

25.14

Incorporation of Provisions.

Tenant will include the provisions of Sections 23.1.1 to Section 23.5.6 in every contract and subcontract, including procurements of materials and leases of equipment, unless exempt by the Laws. Tenant will take action with respect to any subcontract or procurement as the sponsor or FAA may direct as a means of enforcing such provisions including sanctions for noncompliance. Provided, that if Tenant becomes involved in, or is threatened with litigation by a subcontractor, or supplier because of such direction, Tenant may request Landlord to enter into any litigation to protect the interests of Landlord. In addition, Tenant may request the United States to enter into the litigation to protect the interests of the United States. In the event that the FAA requires, as a condition precedent to granting of funds for the improvement of the Airport, modifications or changes to this Lease, Tenant agrees to consent in writing upon the request of Landlord to such reasonable amendments, modifications, revisions, supplements or deletions of any of the terms, conditions, or requirements of this Lease as may be reasonably required to enable Landlord to obtain FAA funds, provided that in no event shall such changes materially impair the rights of Tenant hereunder. Except where such material impairment could occur, a failure by Tenant to so consent shall constitute a breach of this Lease and an Event of Default.

26.

STATE SPECIFIC PROVISIONS

26.1

Representation Regarding Ethical Standards for City Officers and Employees and Former City Officers and Employees.

Tenant represents that it has not: (a) provided an illegal gift or payoff to an officer or employee or former officer or employee of the other party, or his or her relative or business entity; (b) retained any person to solicit or secure this contract upon an agreement or understanding for a commission, percentage, or brokerage or contingent fee, other than bona fide employees or bona fide commercial selling agencies for the purpose of securing business; (c) knowingly breached any of the ethical standards set forth in Salt Lake City’s conflict of interest ordinance, Chapter 2.44, Salt Lake City Code, or in any comparable conflict of interest ordinance; or (d) knowingly influenced, and hereby promises that it will not knowingly influence, an officer or employee or former officer or employee of the other party to breach any of the ethical standards set forth in the city’s conflict of interest ordinance, Chapter 2.44, Salt Lake City Code, or in any comparable conflict of interest ordinance.

26.2

Government Records Access and Management Act.

Landlord is subject to the requirements of the Government Records Access and Management Act, Chapter 2, Title 63, Utah Code Annotated or its successor (“GRAMA”). All materials submitted by Tenant pursuant to this Lease are subject to disclosure unless such materials are exempt from disclosure pursuant to GRAMA. The burden of claiming an exemption from disclosure shall rest solely with Tenant. Any materials for which Tenant claims a privilege from disclosure shall be submitted marked as “Confidential” and accompanied by a statement from Tenant explaining its claim of exemption from disclosure. Landlord will make reasonable efforts to notify the Tenant of any requests made for disclosure of documents submitted under a claim of confidentiality. Tenant may, at its sole expense, take any appropriate actions to prevent disclosure of such material. Tenant specifically waives any claims against Landlord related to disclosure of any materials required by GRAMA.

27.

AVIATION OPERATIONS

27.1

Release.

Tenant releases the Landlord from any present or future liability whatsoever and covenants not to sue the Landlord for damages or any other relief based directly or indirectly upon noise, light, vibrations, smoke, air currents, electronic or other emissions or flight (including overflight of the Premises) occurring as a result of aviation or airport or airport-related operations at or otherwise associated with the Airport, said release and covenant to include, but not be limited to claims (known or unknown) for damages for physical or emotional injuries, discomfort, inconvenience, property damage, death, interference with use and enjoyment of property, nuisance, or inverse condemnation or for injunctive or other extraordinary or equitable relief. It is further agreed that the Landlord shall have no duty to avoid or mitigate such damages by, without limitation, setting aside or condemning buffer lands, rerouting air traffic, erecting sound or other barriers, establishing curfews, noise or other regulations, relocating airport facilities or operations or taking other measures, except to the extent, if any, that such actions are validly required by Governmental authority.

27.2

Easement Reservation.

The Landlord reserves from the Premises an easement for flight of aircraft in or adjacent to the airspace above the Premises and for the existence and imposition over, on and upon said Premises of noise, light, vibrations, smoke, air currents, electronic or other emissions, discomfort, inconvenience, interference with use and enjoyment, and any consequent reduction in market value which may occur directly or indirectly as a result of aviation, airport or airport related operations at or otherwise associated with use of the Airport. Tenant accepts the Premises subject to the risks and activities hereinabove described.

27.3

14 C.F.R. Part 77, Obstructions in Navigable Airspace.

Tenant agrees to comply with the applicable notification and review requirements covered in 14 CFR Part 77 of the Federal Aviation Regulations, in the event future construction of a Building is planned for the Premises covered by this Lease, or in the event of any planned modification or alteration of any present or future Building or structure situated on the Premises. Tenant, by accepting this Lease, expressly agrees for itself, its successors, and assigns that it will not erect nor permit the erection of any structure or object nor permit the growth of any tree on the Premises or any other obstruction, that exceeds the height requirements contained in 14 CFR Part 77 or amendments thereto, or interferes with the runway and/or taxiway “line of sight” of the control tower. In the event the aforesaid covenants are breached, the Landlord reserves the right to enter upon the Premises covered by this Lease and to remove the offending structure or object or cut the offending tree, all of which shall be at the expense of Tenant.

28.

AIRPORT SECURITY

28.1

TSA Airport Security.

Tenant acknowledges that security is of primary importance at the Airport, and that security requirements are likely to change during the term of this Lease. Tenant shall at all times comply with all federal, state and local security laws, regulations, policies, requirements and directives whether written or verbal, including, without limitation, 49 CFR Part 1542 “Airport Security” or any amendment or successor thereto, and Tenant will work cooperatively with City in connection with the same. Tenant understands and agrees that the same may impact Tenant’s business operations and costs. Tenant further agrees that it shall be strictly liable for the payment of any civil penalties assessed against City or Tenant relating to security, and shall be solely and fully responsible for any and all breaches of security and the consequences thereof resulting from the negligence or intentional acts of omission or commission of its officers, employees, representatives, agents, servants, subtenants, consultants, contractors, successors, assigns and suppliers.

28.2

Aircraft Operating Area.

28.2.1 Access to Aircraft Operations Area.

Tenant shall have access to the Airport’s aircraft operations area (“AOA”), provided such access is obtained in accordance with all applicable federal and Landlord security procedures. Movement of all persons into and from the AOA shall be cleared in accordance with federal and Airport rules and regulations. Tenant shall be responsible for the proper opening and closing of security gates and/or doors permitting access the AOA.

28.2.2 Vehicle Operations within the AOA.

No vehicles owned or operated by Tenant will be allowed within the AOA, except in accordance with federal and Airport regulations.

28.3

Maintenance.

Tenant shall provide and maintain adequate security within and around the Premises and shall be responsible for monitoring the use of the Premises and preventing unauthorized access to or use of the same. Tenant shall take any action that may be required to insure compliance with those requirements promulgated by the Landlord acting in its regulatory capacity and by the United States Transportation Security Administration and Department of Homeland Security or other federal or state Governmental agencies having jurisdiction relative to Airport Security. Tenant shall also take any and all actions that may be required to insure compliance with all airport standards and directives and any reasonable requirement of the Landlord’s Airport Public Safety and Security Manager or other authorized Landlord representative. Tenant shall at all times exercise control over any employee or vehicle at the Airport. Tenant shall reimburse the Landlord the amount of any civil penalty or fine that may be assessed against the Landlord by any Governmental agency for a violation of security rules or regulations which violation is caused by Tenant’s failure to comply with security rules, regulations and other applicable security requirements.

28.4

Noncompliance.

If Landlord is deemed to be in noncompliance with any Laws governing access to secure areas of the Airport including the areas of the airfield, and said noncompliance is the result of the Acts or Omissions of the Tenant or of any of Tenant’s employees, agents, or contractors or subcontractors, and such noncompliance results in a civil penalty action against the Landlord, then in addition to any rights and remedies that the Landlord may have on account of such default of Tenant, Tenant agrees to reimburse the Landlord for all expenses, including reasonable attorney fees incurred by the Landlord in defending against the civil penalty action and for any civil penalty or settlement amount paid by the Landlord as a result of the civil penalty action. Landlord shall give Tenant reasonable notice of any allegation, investigation, or proposed or actual civil penalty sought for such noncompliance to the extent possible and Tenant may participate in such matter.

29.

MORTGAGEE PROTECTIONS

29.1 With the prior review and consent of Landlord which shall not be unreasonably withheld, conditioned or delayed, and subject to the terms and conditions of this Lease, Tenant may convey, pledge or encumber, by deed of trust, mortgage or similar instrument (the “Approved Leasehold Mortgage”), its leasehold interest in and to the Premises and the Improvements in favor of a lender (the “Approved Leasehold Mortgagee”), and Tenant may assign this Lease as collateral security in connection with any Tenant financing, including the issuance of PABs (as defined in Section 29.6). Any such Approved Leasehold Mortgage, and all rights under or relating thereto, shall be subject to each of the covenants, conditions and restrictions set forth herein, and to all rights of Landlord hereunder and will always be subordinate to the rights of Landlord under this Lease and the Premises. Notwithstanding the foregoing, the Approved Leasehold Mortgagee shall in no event become personally liable to perform the obligations of Tenant under this Lease unless and until the Approved Leasehold Mortgagee becomes the owner of the leasehold estate pursuant to foreclosure, transfer in lieu of foreclosure, or otherwise, and thereafter said Approved Leasehold Mortgagee shall remain liable for such obligations only so long as such Approved Leasehold Mortgagee remains the owner of the leasehold estate. Tenant shall be responsible for payment of all of Landlord’s costs and expenses, including reasonable attorneys’ fees and expenses, incurred in reviewing any proposed Approved Leasehold Mortgage hereunder.

29.2 If an Approved Leasehold Mortgagee gives Landlord written notice of such Approved Leasehold Mortgagee’s interest in the Premises and such notice contains the address to which notices to such Approved Leasehold Mortgagee are to be sent, Landlord will thereafter send such Approved Leasehold Mortgagee, at the address given, and in the manner set forth in Section 20 of this Lease, a copy of any notice of default which Landlord may thereafter deliver or send to Tenant. Within the time permitted for the curing or commencing the curing of any default under this Lease, such Approved Leasehold Mortgagee, at its option, may pay any amount due or do any other act or thing required of Tenant by the terms of this Lease, and all amounts so paid or other acts so done by Approved Leasehold Mortgagee shall be effective to cure such default as the same would have been if paid or done by Tenant. Landlord shall have no liability or obligation to either Tenant or an Approved Leasehold Mortgagee to provide notice of a Tenant default or liability for failure to provide such notice if Tenant or Approved Leasehold Mortgagee does not provide written notice, with affirmative written confirmation of receipt from Landlord, of such notice address to Landlord.

29.3. An Approved Leasehold Mortgagee shall not become liable for Tenant’s obligations under this Lease unless and until such Approved Leasehold Mortgagee becomes the owner of the leasehold estate established hereby by foreclosure, assignment in lieu of foreclosure or otherwise, or if such Approved Leasehold Mortgagee gives notice to Landlord that such Approved Leasehold Mortgagee will assume Tenant’s obligations under this Lease. An Approved Leasehold Mortgagee shall remain liable for the obligations of Tenant under this Lease only for so long as it remains the owner of the leasehold estate established hereby.

29.4 If any default or event of default occurs under an Approved Leasehold Mortgage, the Approved Leasehold Mortgagee and Tenant shall immediately, and in no event later than five (5) business days of learning thereof, notify Landlord of the same in writing.

29.5 If a non-monetary default by Tenant under this Lease is susceptible of being cured by an Approved Leasehold Mortgagee only after such Approved Leasehold Mortgagee has obtained possession of the Premises, then an Approved Leasehold Mortgagee shall have an additional period not to exceed thirty (30) days to cure a non-monetary default after obtaining possession of the Premises; provided, however, that (i) such Approved Leasehold Mortgagee initiated all necessary actions to obtain possession of the Premises, including the initiation of foreclosure proceedings under its Approved Leasehold Mortgage, within ninety (90) days after the earlier of the date on which such Approved Leasehold Mortgagee became aware of such non-monetary default or the date on which such Approved Leasehold Mortgagee received notice from Landlord of such non-monetary default; (ii) such Approved Leasehold Mortgagee shall have pursued such actions with reasonable diligence; (iii) such Approved Leasehold Mortgagee, within any applicable cure period provided in this Lease, shall have paid all Rent and other sums then due to Landlord under this Lease; and (iv) such Approved Leasehold Mortgagee shall have cured any other defaults by Tenant under this Lease that are susceptible of being cured by such Approved Leasehold Mortgagee without obtaining possession of the Premises. Notwithstanding the foregoing, the rights granted to an Approved Leasehold Mortgagee in this Article shall not impair any right granted to Landlord in this Lease (a) to perform any obligations under this Lease that Tenant is required, but fails, to perform, and (b) to obtain reimbursement from Tenant of Landlord’s costs and expenses incurred in so performing and, subject to rights granted to an Approved Leasehold Mortgagee, to declare an Event of Default if Tenant fails so to reimburse within any applicable cure period.

29.6 Tenant shall be permitted to finance the design, construction and operation of the Tenant Improvements through the issuance of Private Activity Bonds (“PAB”), provided, however, Landlord shall have the right to review and approve (which approval shall not be unreasonably conditioned, delayed or withheld) all instruments and documents to be executed by, or binding upon, Tenant in connection with the issuance of such PABs. Tenant must submit drafts of the PAB financing documents to Landlord for review and approval at least 30 days in advance of Tenant’s execution of such documents. Subject to Landlord’s rights to review and approve any leasehold mortgage and PAB financing documents. Landlord shall provide customary consents and all related approvals required in connection with a PAB issuance and leasehold mortgage as part of the PAB financing program, which will be provided at Tenant’s sole cost and expense. Any lien created to secure such financing or any other debt undertaken by Tenant shall be secured by Tenant’s leasehold interest in the Lease and the Tenant Improvements and shall not be secured by the fee interest in the Premises. IT IS UNDERSTOOD AND AGREED THAT TENANT’S FINANCING OF THE TENANT IMPROVEMENTS THROUGH THE ISSUANCE OF PABS IS SOLELY THE DEBT OF TENANT AND SHALL NOT RESULT IN ANY FINANCIAL BURDEN OR OBLIGATION OF LANDLORD IN ANY MANNER, INCLUDING ANY COST OR EXPENSE ASSOCIATED WITH THE TEFRA HEARING OR ANY OTHER CONSENT OR APPROVAL REQUIRED TO BE PROVIDED BY LANDLORD. To the extent that the financing document(s) with respect to the Approved Leasehold Mortgage, provide for a lien on any revenues of the Tenant that are available to make lease payments due under this lease, such financing documents(s) shall require that such revenues be used to make the required lease payments hereunder prior to being used to pay debt service to the Approved Leasehold Mortgagee. Lienholders through PAB financing described herein shall be included within the definition of Approved Leasehold Mortgagee.

29.7 If this Lease is terminated for Tenant’s breach before the end of the Term, for any reason other than a default that has not been cured by Tenant or Approved Leasehold Mortgagee within the period specified, including, without limitation, as a result of a rejection or disaffirmation of the Lease in a bankruptcy, insolvency or other proceeding affecting creditor’s rights then Landlord shall provide a copy of the termination notice to the Approved Leasehold Mortgagee. Upon the written request of Approved Leasehold Mortgagee made any time within thirty (30) days after the receipt of such notice from Landlord, Landlord shall agree to enter into a new lease of the Premises with Approved Leasehold Mortgagee for the remainder of the Term of the Lease upon the same covenants, conditions, limitations and agreements contain in the Lease, except for such provisions which must be modified to reflect any such termination, and the passage of time, provided, that, in the event of any such termination, Approved Leasehold Mortgagee (or such successor or assign) (A) shall pay to Landlord, simultaneously with the delivery of such new lease, all unpaid amounts due under the Lease up to and including the date of the commencement of the term of such new lease and all reasonable and substantiated expenses incurred by Landlord to prepare such new lease, and (B) otherwise shall cure all other defaults under the Lease promptly and with due diligence after the delivery of such new lease. If Landlord does not enter into a new lease with the Approved Leasehold Mortgagee, the Improvements shall immediately vest with the City and then the Approved Leasehold Mortgagee shall immediately remove all trade fixtures and other personal property from the Premises and repair to Landlord’s reasonable satisfaction, any damage caused to the Premises by the removal. The Approved Leasehold Mortgagee shall not remove or tamper with any improvement on the Premises.

29.8 Tenant’s present and future Approved Leasehold Mortgagee and any present and future approved mortgagees for which Landlord has received written notice and described under Section 20 and Section 29.2 are intended third party beneficiaries to this Article. As third-party beneficiaries, they are entitled to the applicable rights under and may enforce the provisions of this Article of the Lease as if they were parties thereto. Nothing contained herein shall release Tenant from any of its obligations under this Lease that may not have been discharged or fully performed by an Approved Leasehold Mortgagee.

29.9 Nothing contained herein shall release Tenant from any of its obligations under this Lease that may not have been discharged or fully performed by an Approved Leasehold Mortgagee.

30.

RECORDING

The Parties shall execute a short form Memorandum of Ground Lease substantially in the form of Exhibit G to be recorded in the Salt Lake County Recorder’s Office affirming this Lease and its Effective Date.

IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the Effective Date.

SALT LAKE CITY CORPORATION

___________________________________

SHANE ANDREASEN

DIRECTOR OF REAL ESTATE & COMMERCIAL DEVELOPMENT

SALT LAKE CITY DEPARTMENT OF AIRPORTS

ATTEST & COUNTERSIGN:

Salt Lake City Recorder’s Office

_________________________________

City Recorder

APPROVED AS TO FORM:

Salt Lake City Attorney’s Office

_________________________________

Senior City Attorney

SLC Development LLC

By: ______________________________

Its: ______________________________

Attachments:

Exhibit A = Legal Description

Exhibit B = Estoppel Certificate

Exhibit C = Salt Lake City Department of Airports Ground Rent Schedule

Exhibit D = Letter of Credit

Exhibit E = Landlord’s Work

Exhibit F = Memorandum of Lease

EXHIBIT A

LEGAL DESCRIPTION AND DEPICTION (PAGE 1 OF 2)

[Omitted]

EXHIBIT A

LEGAL DESCRIPTION AND DEPICTION (PAGE 2 OF 2)

LEGAL DESCRIPTION:

LEASE AREA:

BEGINNING AT A POINT BEING 3707.80 FEET NORTH 05°01’34” EAST, ALONG THE CENTERLINE OF 2200 WEST STREET, AND 913.34 FEET NORTH 84°58’26” WEST FROM THE MONUMENT AT THE INTERSECTION OF 700 NORTH AND 2200 WEST, SAID POINT ALSO BEING WEST AIRPORT GRID SYSTEM (WAGS) STATION 57+27.54N, 35+33.56E, AND RUNNING THENCE NORTH 85°12’30” WEST 670.00 FEET; THENCE NORTH 04°47’30” EAST 546.00 FEET; THENCE SOUTH 85°12’30” EAST 670.00 FEET; THENCE SOUTH 04°47’30” WEST 546.00 FEET TO THE POINT OF BEGINNING.

CONTAINS 365,820 SQUARE FEET OR 8.398 ACRES, MORE OR LESS

(AFFECTING TAX PARCELS: 08282001320000 AND 08281000010000)

EXHIBIT B

ESTOPPEL CERTIFICATE

PREMISES: ____________________________

LEASE: Dated ___________ between Salt Lake City Corporation (the “Landlord”) and __________________ (the “Tenant”)

WHEREAS, this Estoppel Certificate is being delivered to Tenant in connection with [explanation for request to be inserted]; and

WHEREAS, [_______] shall be entitled to rely on this Estoppel Certificate in conjunction with [reference to explanation for request to be inserted].

NOW THEREFORE, Landlord certifies to Tenant and [___________] that, as of the date this document is signed:

The Lease has not been modified or amended, orally or in writing, by formal agreement or by letter. A true and complete copy of the Lease is attached hereto as Attachment 1 to Exhibit B.

The Lease has a Commencement Date as of __________________ with Fixed Rent commencing on _____________. The current Fixed Rent is $________________ as provided Section 3.1 of the Lease.

Rent and other charges due under the Lease have been paid through and including ______________.

The Premises, which are more fully described in the Lease, consist of _____ acres located at the Salt Lake City International Airport.

The Scheduled Termination Date of the Lease is ____________.

A Lease Security in the form of a Letter of Credit in the amount of $___________ has been delivered to Landlord under the Lease, and the full amount thereof is outstanding.

The Tenant has no option to purchase the Premises and has no right of first refusal as to the Premises.

The Tenant is in possession of the Premises.

The Lease is a complete statement of the agreement between the parties with respect to the letting of the Premises referred to therein.

10.

The Lease is presently in full force and effect according to its terms and is the valid and binding obligation of the undersigned as of the date hereof.

11.

The address for notices to be sent to the undersigned is as set forth in said Lease and acknowledgement of receipt of any Approved Leasehold Mortgagee’s notice address.

12.

Tenant is not in default in the performance of its obligations to Landlord under the Lease, nor has an event occurred that, with the giving of notice or the passage of time or both, could constitute a default by Tenant.

13.

The Landlord has no charges, liens, or claims of offset under said Lease against the Tenant.

14.

Capitalized terms used in this Estoppel Certificate and not otherwise defined shall have the same meanings as assigned to those terms in the Lease.

IN WITNESS WHEREOF, the undersigned has caused this Estoppel Certificate to be executed as a sealed instrument by its duly authorized officer on this ____ day of ________________, 20__.

LANDLORD

[_____________________]

[INSERT NOTARY BLOCK]

ATTACMENT 1 TO EXHIBIT B

Copy of Lease

(to be attached)

EXHIBIT C

GROUND RENT SCHEDULE

Salt Lake City International Airport

Period	Psf/Yr

Lease Effective Date to Rent Commencement Date	$0.00 PSF/Year
Rent Commencement Date to 08/31/2027	$0.417 PSF/Year
09/01/2027 – 08/31/2032	$0.495 PSF/Year
09/01/2032 – 08/31/2037	$0.589 PSF/Year
09/01/2037 – 08/31/2042	$0.699 PSF/Year
09/01/2042 – 08/31/2047	$0.831 PSF/Year
09/01/2047 – 08/31/2052	$0.987 PSF/Year
09/01/2052 – 08/31/2057	$1.171 PSF/Year
09/01/2057 – 08/31/2062	$1.388 PSF/Year
09/01/2062 – 08/31/2067	$1.647 PSF/Year
09/01/2067 – 08/31/2072	$1.953 PSF/Year
09/01/2072 – 08/31/2077	$2.316 PSF/Year

This is a standardized fee rate schedule and does not modify, imply, grant or offer any additional lease term under the Lease. If this exhibit conflicts with the terms of the Lease or any amendment thereto, the terms set forth in the Lease or amended Lease will govern.

EXHIBIT D

FORM OF LETTER OF CREDIT

[On letterhead or L/C letterhead of Issuer.]

Date: ________, 20___

BENEFICIARY

Salt Lake City Corporation [SEAL OF SALT LAKE CITY CORPORATION]

Department of Airports

Executive Director

P.O. Box 145550

Salt Lake City, Utah 84114-5550

ACCOUNT PARTY

L/C No.: __________________

Loan No. : _________________

AMOUNT: US $__________ (_______________________ DOLLARS)

Ladies and Gentlemen:

We establish in favor of Salt Lake City Corporation (the “Beneficiary”) our irrevocable Letter of Credit numbered as identified above (the “L/C”) for an aggregate amount of ________________ DOLLARS ($_______), expiring at __:00 p.m. on _______ (such date, as extended from time to time, the “Expiry Date”). “Banking Day” means a weekday except a weekday when commercial banks in the State of Utah are authorized or required to close, and a day on which inter-bank payments can be made on Fedwire system

We authorize Beneficiary to draw on us (the “Issuer”) for the account of _______ (the “Account Party”) under the terms and conditions of this L/C.

Funds under this L/C are available by presenting the following documentation (the “Drawing Documentation”): (a) a sight draft drawn on us substantially in the form of Attachment 1, with blanks filled in and bracketed items provided as appropriate, and (b) a signed statement from Beneficiary, as landlord under the lease between Beneficiary and ____________ dated ___________ ____, 2024 (the “Lease”), that (i) Beneficiary is entitled to draw on this L/C under the terms of the Lease, or (ii) that Beneficiary received a notice from Issuer that this L/C No. ________ will not be extended and Account Party has failed to provide a replacement letter of credit satisfactory to Beneficiary within forty-five (45) days prior to the current Expiry Date. No other evidence of authority, certificate, or documentation is required.

Drawing Documentation must be presented at Issuer’s office at ___________, Salt Lake City, Utah on or before the Expiry Date by personal presentation, courier or messenger service, or fax. Drawings hereunder may be presented by facsimile/telecopy (“FAX”) to Fax Number _______________ under telephone pre-advice to _________________. Such FAX presentation must be received on or before the expiry date in compliance with the terms and conditions of this Letter of Credit. Any such FAX presentation shall be considered the sole operative instrument of drawing. The absence of such telephone confirmation as described above does not affect our obligation to honor such drawing if such drawing is otherwise in compliance with the terms and conditions of this Standby Letter of Credit.

We agree, irrevocably and irrespective of any claim by any applicant, to honor drafts drawn under and in conformity with this L/C, not to exceed the amount of this L/C in aggregate, presented to us on or before the Expiry Date, provided we also receive (on or before the Expiry Date) any other Drawing Documentation this L/C requires.

We shall pay any draws under this L/C only from our own funds by check or wire transfer, in compliance with the Drawing Documentation.

If Beneficiary presents proper Drawing Documentation to us on or before the Expiry Date, then we shall pay under this L/C at or before the following time (the “Payment Deadline”): (a) if presentment is made at or before noon of any Banking Day, then the close of the third succeeding Banking Day; and (b) otherwise, the close of the fourth succeeding Banking Day. If we determine that Drawing Documentation is not proper, then we shall send advise Beneficiary in writing, specifying all grounds for our determination.

Partial and multiple drawings are permitted. This L/C shall, except to the extent reduced thereby, survive any partial drawings.

We shall have no duty, obligation, responsibility or right to inquire into the veracity of or basis for any draw under this L/C or any Drawing Documentation. We acknowledge that the Lease mentioned above is for identification purposes only and is not intended to be incorporated herein nor to form part of this L/C.

The Expiry Date shall automatically be extended by one (1) year upon each natural expiration of the term hereof unless, on or before the date 60 days before any Expiry Date, we have sent Beneficiary notice that the Expiry Date shall not be so extended (a “Nonrenewal Notice”).

This letter of credit is transferable, but only in its entirety, and may be successively transferred. Transfer of this letter of credit shall be affected by us upon your submission of this original letter of credit, including all amendments, if any, accompanied by our transfer request form duly completed and executed. If you wish to transfer the letter of credit, please contact us for the form which we shall provide to you upon your request. In any event, this letter of credit may not be transferred to any person or entity listed in or otherwise subject to, any sanction or embargo under any applicable restrictions. Charges and fees related to such transfer will be for the account of the account party. Any notice to Beneficiary shall be in writing and delivered by hand with receipt acknowledged or by overnight delivery service such as FedEx (with proof of delivery) at the above address, or such other address as Beneficiary may specify by written notice to Issuer and Issuer amend the Letter of Credit to Reflect the Change.

No amendment that adversely affects Beneficiary shall be effective without Beneficiary’s written consent.

This L/C is subject to and incorporates by reference: (a) the International Standby Practices 98 (“ISP 98”); and (b) to the extent not inconsistent with ISP 98, Article 5 of the Uniform Commercial Code of the State of New York. This Letter of Credit is governed by and construed in accordance with the laws of the State of ______________and shall be subject to the exclusive jurisdiction of ___________________.

Very truly yours,

[Issuer Signature]

Hereunto duly authorized

ATTACHMENT 1 TO EXHIBIT D

FORM OF SIGHT DRAFT

[Beneficiary Letterhead]

TO:

[Name and Address of Issuer]

SIGHT DRAFT

AT SIGHT, pay to the Order of Salt Lake City Corporation the sum of ______________ United States Dollars ($______________). Drawn under [Issuer] Letter of Credit No. ______________ dated ______________.

[Issuer is hereby directed to pay the proceeds of this Sight Draft solely to the following account: _________________________.]

SALT LAKE CITY CORPORATION

By:____________________________________
Name:_________________________________
Title:__________________________________

Date: ________________

ATTACHMENT 2 TO EXHIBIT D

FORM OF TRANSFER NOTICE

[Beneficiary Letterhead]

TO:

[Name and Address of Issuer] (the “Issuer”)

TRANSFER NOTICE

By signing below, the undersigned, Beneficiary (the “Beneficiary”) under Issuer’s Letter of Credit No. ______________ dated ______________ (the “L/C”), transfers the L/C to the following transferee (the “Transferee”):

[Transferee Name and Address]

The original L/C is enclosed. Beneficiary directs Issuer to reissue or amend the L/C in favor of Transferee as Beneficiary. Beneficiary represents and warrants that Beneficiary has not transferred, assigned, or encumbered the L/C or any interest in the L/C, which transfer, assignment, or encumbrance remains in effect.

SALT LAKE CITY CORPORATION

By:____________________________________
Name:_________________________________
Title:__________________________________

Date: ________________

EXHIBIT E

LANDLORD’S WORK

Landlord shall commence the design, permitting and construction of a public access road which shall run north of the Boeing facility traveling east and west to the northwest corner of the Boeing facility at which point it shall turn south and extend to a cul-de-sac at the southeast corner immediately adjacent to the Premises. The public access road will include all necessary curb, gutter, storm and associated work typical with a public access road. Landlord shall extend utilities along the public access road for Tenant and other development connections. Landlord shall design and construct a Group III taxilane connection to the existing Taxiway K adjacent to the Premises.

Landlord and Tenant shall work cooperatively together regarding any designated wetlands on the Premises as additional information is known as to their official status, mitigation (if necessary) and costs associated with any such mitigation to benefit Tenant’s Improvements on the Premises.

EXHIBIT F

FORM OF MEMORANDUM OF LEASE

When recorded, return to:

Salt Lake City Department of Airports

Airport Property & Real Estate Manager

P.O. Box 145550

Salt Lake City, UT 84114

MEMORANDUM OF LEASE

THIS MEMORANDUM OF LEASE (“Memorandum”) is made pursuant to that certain Lease dated___________, 20__ (the “Lease”), between SLC DEVELOPMENT, LLC, a Delaware Limited Liability Company (“Lessee”), and Salt Lake City Corporation, a Utah municipal corporation, by and through its Department of Airports (the “City”).

Premises. For and in consideration of the payments and the terms and conditions more particularly set forth in the Lease, and other good and valuable consideration, the City has leased to Lessee an exclusive interest in certain property located in Salt Lake County, State of Utah, as legally and visually described on Exhibit A attached hereto (the “Property”), for the purpose of constructing, maintaining, and operating a commercial facility.

Term. The term of the Lease is 30 years expiring on ___________.

Lease Terms. The terms and conditions of the Lease are hereby incorporated into this Memorandum by this reference.

Assignment. The Lease may be assigned only under certain circumstances as set forth in the Lease.

Governing Law. This Memorandum and the Lease are governed by the laws of the State of Utah. In the event of any conflict between the terms of this Memorandum and the Lease, the Lease shall control.

Inquiries. Inquiries may be directed to the City at the address identified above or to Lessee by contacting Lessee at the address identified on the records of the Division of Corporation and Commercial Code for the State of Utah.

Executed effective as of the date of recordation.

		CITY:

ATTEST:		Salt Lake City Corporation, a Utah municipal corporation, by and through its Department of Airports


By:		By: Shane Andreasen
Deputy Salt Lake City Recorder		Its: Director of Real Estate & Commercial Development


Approved as to form:



Megan DePaulis, Senior City Attorney
Date:

STATE OF UTAH	)
	: ss
COUNTY OF SALT LAKE	)

The foregoing Memorandum was acknowledged before me this ____day of __________, 20__ by Shane Andreasen, Director of Real Estate and Commercial Development, Department of Airports, SALT LAKE CITY CORPORATION, a municipal corporation of the State of Utah, on behalf of the corporation.


	NOTARY PUBLIC

EXHIBIT A

PROPERTY LEGAL DESCRIPTION

CONTAINS 365,820 SQUARE FEET OR 8.398 ACRES, MORE OR LESS

(AFFECTING TAX PARCELS: 08282001320000 AND 08281000010000)

Exhibit 31.1

CERTIFICATIONS

I, Tal Keinan, certify that:

I have reviewed this Quarterly Report on Form 10-Q of Sky Harbour Group Corporation;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 12, 2024

	/s/ Tal Keinan
	Tal Keinan, Chief Executive Officer
	(Principal Executive Officer)

Exhibit 31.2

CERTIFICATIONS

I, Francisco Gonzalez, certify that:

I have reviewed this Quarterly Report on Form 10-Q of Sky Harbour Group Corporation;

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 12, 2024

	/s/ Francisco Gonzalez
	Francisco Gonzalez, Chief Financial Officer
	(Principal Financial Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Sky Harbour Group Corporation (the “Company”) on Form 10‑Q for the period ended September 30, 2024 as filed with the Securities and Exchange Commission on or about the date hereof (the “Report”), the undersigned, in the capacities and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 12, 2024	/s/ Tal Keinan
	Tal Keinan, Chief Executive Officer
	(Principal Executive Officer)

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 12, 2024	/s/ Francisco Gonzalez
	Francisco Gonzalez, Chief Financial Officer
	(Principal Financial Officer)

Document And Entity Information - shares	9 Months Ended
Document And Entity Information - shares	Sep. 30, 2024	Nov. 04, 2024
Document Information [Line Items]
Entity Central Index Key	0001823587
Entity Registrant Name	Sky Harbour Group Corporation
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2024
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2024
Document Transition Report	false
Entity File Number	001-39648
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	85-2732947
Entity Address, Address Line One	136 Tower Road, Suite 205
Entity Address, City or Town	White Plains
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10604
City Area Code	212
Local Phone Number	554-5990
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Common Class B [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		42,046,356
Common Class A [Member]
Document Information [Line Items]
Title of 12(b) Security	Class A common stock, par value $0.0001 per share
Trading Symbol	SKYH
Security Exchange Name	NYSEAMER
Entity Common Stock, Shares Outstanding		29,391,337
Warrant [Member]
Document Information [Line Items]
Title of 12(b) Security	Warrants, each whole warrant exercisable for one share of Class A common stock at an exercise price of $11.50 per share
Trading Symbol	SKYH WS
Security Exchange Name	NYSEAMER

Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Assets
Cash	$ 3,540	$ 60,257
Restricted cash	70,627	12,009
Investments	19,464	11,866
Restricted investments	16,741	88,213
Accounts receivable, prepaid expenses and other assets	6,208	6,003
Right-of-use assets	127,813	70,527
Total assets	456,813	402,199
Liabilities and equity
Accounts payable, accrued expenses and other liabilities	21,202	16,740
Operating lease liabilities	129,981	69,437
Loans payable and finance lease liabilities	7,968	9,311
Bonds payable, net of debt issuance costs and premiums	162,572	162,420
Warrants liability	35,557	12,045
Total liabilities	357,280	269,953
Commitments and contingencies (Note 15)
Stockholders’ equity
Preferred stock; $0.0001 par value; 10,000,000 shares authorized as of September 30, 2024; none issued and outstanding	0	0
Additional paid-in capital	93,610	88,198
Accumulated deficit	(51,094)	(19,361)
Accumulated other comprehensive income	41	312
Total Sky Harbour Group Corporation stockholders’ equity	42,563	69,155
Non-controlling interests	56,970	63,091
Total equity	99,533	132,246
Total liabilities and equity	456,813	402,199
Common Class A [Member]
Stockholders’ equity
Common stock	2	2
Common Class B [Member]
Stockholders’ equity
Common stock	4	4
Construction in Progress [Member]
Assets
Property, Plant and Equipment, Net	120,443	64,212
Asset under Construction [Member]
Assets
Property, Plant and Equipment, Net	79,750	77,283
Equipment and Software [Member]
Assets
Property, Plant and Equipment, Net	$ 12,227	$ 11,829

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares	Sep. 30, 2024	Dec. 31, 2023
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common Class A [Member]
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	200,000,000	200,000,000
Common stock, shares issued (in shares)	25,326,328	24,165,523
Common stock, shares outstanding (in shares)	25,326,328	24,165,523
Common Class B [Member]
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	42,046,356	42,046,356
Common stock, shares outstanding (in shares)	42,046,356	42,046,356

Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Revenue:
Rental revenue	$ 4,097	$ 2,502	$ 10,119	$ 5,337
Total revenue	4,097	2,502	10,119	5,337
Expenses:
Operating	3,681	1,675	9,103	5,179
Depreciation	646	670	1,917	1,650
General and administrative	4,634	3,556	14,145	10,838
Total expenses	8,961	5,901	25,165	17,667
Operating loss	(4,864)	(3,399)	(15,046)	(12,330)
Other (income) expense:
Interest expense	177	234	558	316
Unrealized (gain) loss on warrants	15,961	(1,597)	23,930	0
Other income	(303)	(37)	(1,799)	(252)
Total other (income) expense	15,835	(1,400)	22,689	64
Net loss	(20,699)	(1,999)	(37,735)	(12,394)
Net loss attributable to non-controlling interests	(2,145)	(1,810)	(6,003)	(6,788)
Net loss attributable to Sky Harbour Group Corporation shareholders	$ (18,554)	$ (189)	$ (31,732)	$ (5,606)
Loss per share
Basic (in dollars per share)	$ (0.74)	$ (0.01)	$ (1.29)	$ (0.37)
Diluted (in dollars per share)	$ (0.74)	$ (0.01)	$ (1.29)	$ (0.37)
Weighted average shares
Basic (in shares)	25,055	15,245	24,689	15,132
Diluted (in shares)	25,055	15,245	24,689	15,132

Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Net loss	$ (20,699)	$ (1,999)	$ (37,735)	$ (12,394)
Unrealized gains on available-for-sale securities	26	204	503	521
Realized gains on available-for-sale securities reclassified to the consolidated statements of operations	(67)	(19)	(774)	(121)
Total comprehensive loss	$ (20,740)	$ (1,814)	$ (38,006)	$ (11,994)

Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Common Stock [Member] Common Class A [Member]	Common Stock [Member] Common Class B [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Parent [Member]	Noncontrolling Interest [Member]	Total
Balance (in shares) at Dec. 31, 2022	14,962,831	42,192,250
Balance at Dec. 31, 2022	$ 1	$ 4	$ 29,560	$ (3,184)	$ (102)	$ 26,279	$ 72,096	$ 98,375
Share-based compensation	0	0	393	0	0	393		478
Share-based compensation							85
Other comprehensive income	0	0	0	0	177	177	0	177
Net loss	$ 0	0	0	(6,196)	0	(6,196)	(2,565)	(8,761)
Exchange of Class B Common Stock (in shares)	145,894
Exchange of Class B Common Stock	$ 0	$ 0	184	0	0	184		0
Exchange of Class B Common Stock (in shares)		(145,894)
Exchange of Class B Common Stock							(184)
Balance (in shares) at Mar. 31, 2023	15,108,725	42,046,356
Balance at Mar. 31, 2023	$ 1	$ 4	30,137	(9,380)	75	20,837	69,432	90,269
Balance (in shares) at Dec. 31, 2022	14,962,831	42,192,250
Balance at Dec. 31, 2022	$ 1	$ 4	29,560	(3,184)	(102)	26,279	72,096	98,375
Net loss								(12,394)
Balance (in shares) at Sep. 30, 2023	15,252,574	42,046,356
Balance at Sep. 30, 2023	$ 1	$ 4	31,139	(8,791)	298	22,651	65,363	88,014
Balance (in shares) at Mar. 31, 2023	15,108,725	42,046,356
Balance at Mar. 31, 2023	$ 1	$ 4	30,137	(9,380)	75	20,837	69,432	90,269
Share-based compensation	$ 0	$ 0	499	0	0	499		580
Share-based compensation							81
Vesting of restricted stock units (in shares)	124,261	0
Exercise of warrants (in shares)	225	0
Exercise of warrants	$ 0	$ 0	3	0	0	3	0	3
Other comprehensive income	0	0	0	0	38	38	0	38
Net loss	$ 0	$ 0	0	778	0	778	(2,412)	(1,634)
Balance (in shares) at Jun. 30, 2023	15,233,211	42,046,356
Balance at Jun. 30, 2023	$ 1	$ 4	30,639	(8,602)	113	22,155	67,101	89,256
Share-based compensation	$ 0	$ 0	500	0	0	500		572
Share-based compensation							72
Vesting of restricted stock units (in shares)	19,363	0
Other comprehensive income	$ 0	$ 0	0	0	185	185	0	185
Net loss	$ 0	$ 0	0	(189)	0	(189)	(1,810)	(1,999)
Balance (in shares) at Sep. 30, 2023	15,252,574	42,046,356
Balance at Sep. 30, 2023	$ 1	$ 4	31,139	(8,791)	298	22,651	65,363	88,014
Balance (in shares) at Dec. 31, 2023	24,165,523	42,046,356
Balance at Dec. 31, 2023	$ 2	$ 4	88,198	(19,361)	312	69,155	63,091	132,246
Share-based compensation	$ 0	$ 0	987	0	0	987		1,032
Share-based compensation							45
Vesting of restricted stock units (in shares)	176,166	0
Shares withheld for payment of employee taxes (in shares)	(57,833)	0
Shares withheld for payment of employee taxes	$ 0	$ 0	(686)	0	0	(686)	0	(686)
Exercise of warrants (in shares)	253,703	0
Exercise of warrants	$ 0	$ 0	3,332	0	0	3,332	0	3,332
Payment of equity issuance costs	0	0	(43)	0	0	(43)	0	(43)
Other comprehensive income	0	0	0	0	378	378	0	378
Net loss	$ 0	$ 0	0	(18,940)	0	(18,940)	(2,259)	(21,199)
Balance (in shares) at Mar. 31, 2024	24,537,559	42,046,356
Balance at Mar. 31, 2024	$ 2	$ 4	91,788	(38,301)	690	54,183	60,877	115,060
Balance (in shares) at Dec. 31, 2023	24,165,523	42,046,356
Balance at Dec. 31, 2023	$ 2	$ 4	88,198	(19,361)	312	69,155	63,091	132,246
Net loss								(37,735)
Balance (in shares) at Sep. 30, 2024	25,326,328	42,046,356
Balance at Sep. 30, 2024	$ 2	$ 4	93,610	(51,094)	41	42,563	56,970	99,533
Balance (in shares) at Mar. 31, 2024	24,537,559	42,046,356
Balance at Mar. 31, 2024	$ 2	$ 4	91,788	(38,301)	690	54,183	60,877	115,060
Share-based compensation	$ 0	$ 0	1,030	0	0	1,030		1,075
Share-based compensation							45
Vesting of restricted stock units (in shares)	100,700	0
Shares withheld for payment of employee taxes (in shares)	(22,090)	0
Shares withheld for payment of employee taxes	$ 0	$ 0	(239)	0	0	(239)	0	(239)
Exercise of warrants (in shares)	3,639	0
Exercise of warrants	$ 0	$ 0	47	0	0	47	0	47
Other comprehensive income	0	0	0	0	(623)	(623)	0	(623)
Net loss	$ 0	$ 0	0	5,761	0	5,761	(1,598)	4,163
Issuance of stock through ATM Facility (in shares)	7,407	0
Issuance of stock through ATM Facility	$ 0	$ 0	90	0	0	90	0	90
Exchange of Sky Incentive Units (in shares)	251,485	0
Exchange of Sky Incentive Units	$ 0	$ 0	89	0	0	89	(89)	0
Balance (in shares) at Jun. 30, 2024	24,878,700	42,046,356
Balance at Jun. 30, 2024	$ 2	$ 4	92,805	(32,540)	67	60,338	59,235	119,573
Share-based compensation	$ 0	$ 0	860	0	0	860		906
Share-based compensation							46
Vesting of restricted stock units (in shares)	69,791	0
Shares withheld for payment of employee taxes (in shares)	(22,163)	0
Shares withheld for payment of employee taxes	$ 0	$ 0	(198)	0	0	(198)	0	(198)
Payment of equity issuance costs	0	0	(23)	0	0	(23)	0	(23)
Other comprehensive income	0	0	0	0	(26)	(26)	0	(26)
Net loss	$ 0	$ 0	0	(18,554)	0	(18,554)	(2,145)	(20,699)
Exchange of Sky Incentive Units (in shares)	400,000	0
Exchange of Sky Incentive Units	$ 0	$ 0	166	0	0	166	(166)	0
Balance (in shares) at Sep. 30, 2024	25,326,328	42,046,356
Balance at Sep. 30, 2024	$ 2	$ 4	$ 93,610	$ (51,094)	$ 41	$ 42,563	$ 56,970	$ 99,533

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Cash flows from operating activities:
Net loss	$ (37,735)	$ (12,394)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,917	1,650
Straight-line rent adjustments, net	(42)	(188)
Equity-based compensation	3,013	1,630
Non-cash operating lease expense	3,275	1,409
Realized gain on available for sale investments	(139)	0
Gain on disposition of assets	(5)	0
Unrealized (gain) loss on warrants	23,930	0
Changes in operating assets and liabilities:
Accounts receivable, prepaid expenses and other assets	270	674
Right-of-use asset initial direct costs	(17)	(26)
Accounts payable, accrued expenses and other liabilities	(1,102)	982
Net cash used in operating activities	(6,635)	(6,263)
Cash flows from investing activities:
Purchases of long-lived assets	(1,327)	(597)
Payments for cost of construction	(54,050)	(40,043)
Proceeds from disposition of long-lived assets	10	0
Investment in notes receivable, net	0	(2,040)
Net cash provided by acquisition of business	0	1,793
Purchases of available for sale investments	(206,883)	(5,427)
Purchases of held-to-maturity investments	0	(103,994)
Proceeds from available for sale investments	199,153	14,011
Proceeds from held-to-maturity investments	71,464	138,434
Net cash provided by investing activities	8,367	2,137
Cash flows from financing activities:
Proceeds from exercise of warrants	2,960	3
Proceeds from ATM Facility	90	0
Principal payments for loans payable and finance leases	(1,343)	(513)
Payments for equity issuance costs	(415)	0
Payments of employee taxes related to vested equity awards	(1,123)	0
Net cash provided by (used in) financing activities	169	(510)
Net increase (decrease) in cash and restricted cash	1,901	(4,636)
Cash and restricted cash, beginning of year	72,266	41,396
Cash and restricted cash, end of period	$ 74,167	$ 36,760

Note 1 - Organization and Business Operations

9 Months Ended

Sep. 30, 2024

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1.	Organization and Business Operations

Note 2 - Basis of Presentation and Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2024

Notes to Financial Statements

Significant Accounting Policies [Text Block]

2.	Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

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

Use of Estimates

Risks and Uncertainties

Liquidity and Capital Resources

Significant Accounting Policies

Basis of Consolidation

Cost of Construction

Leases

Warrants liability

Revenue recognition

Income Taxes

Recently Issued Accounting Pronouncements

Segment Reporting (Topic 280)

Income Taxes (Topic 740)

Note 3 - Rapidbuilt Acquisition

9 Months Ended

Sep. 30, 2024

Notes to Financial Statements

Business Combination Disclosure [Text Block]

3.	Rapidbuilt Acquisition

The following tables summarize the allocation of the purchase price to the fair value of the assets acquired and liabilities assumed for the Rapidbuilt Acquisition:

	May 12, 2023
Cash	$	293
Restricted Cash		1,500
Long-lived assets		10,752
Total assets		12,545

Accounts payable, accrued expenses and other liabilities		1,427
Loans payable and finance lease liabilities		11,074
Total liabilities		12,501
Total fair value of net assets acquired		44

Effective settlement of net receivable from Rapidbuilt		44
Total consideration transferred	$	44

Note 4 - Investments and Restricted Investments

9 Months Ended

Sep. 30, 2024

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

4.	Investments and Restricted Investments

The following tables set forth summaries of the amortized cost, unrealized gains, unrealized losses, and fair value by investment type as of September 30, 2024 and December 31, 2023:

	*September 30, 2024*
	*Amortized Cost*		*Gross Unrealized Gains*		*Gross Unrealized Losses*			*Estimated Fair Value*
Investments, available for sale:
U.S. Treasuries	$	19,423	$	41	$	-		$	19,464
Total investments	$	19,423	$	41	$	-		$	19,464

Restricted investments, held-to-maturity:
U.S. Treasuries		16,741		63		(294	)		16,510
Total restricted investments	$	16,741	$	63	$	(294	)	$	16,510

	*December 31, 2023*
	*Amortized Cost*		*Gross Unrealized Gains*		*Gross Unrealized Losses*			*Estimated Fair Value*
Investments, available for sale:
U.S. Treasuries	$	11,554	$	312	$	-		$	11,866
Total investments	$	11,554	$	312	$	-		$	11,866

Restricted investments, held-to-maturity:
U.S. Treasuries		88,213		105		(694	)		87,624
Total restricted investments	$	88,213	$	105	$	(694	)	$	87,624

The following table sets forth the maturity profile of the Company's investments and restricted investments as of September 30, 2024:

	Investments		Restricted Investments
Due within one year	$	19,464	$	5,279
Due one year through five years		-		11,462
Total	$	19,464	$	16,741

Note 5 - Cost of Construction and Constructed Assets

9 Months Ended

Sep. 30, 2024

Notes to Financial Statements

Cost of Construction and Constructed Assets [Text Block]

5.	Cost of Construction and Constructed Assets

The Company’s portfolio as of September 30, 2024 includes the following completed and in-development projects:

●

Addison Airport (“ADS”), Addison, TX (Dallas area);

●

Bradley International Airport (“BDL”), Windsor Locks, CT (Hartford area);

●

Centennial Airport (“APA”), Englewood, CO (Denver area);

●

Chicago Executive Airport (“PWK”), Wheeling, IL (Chicago area);

●

Hudson Valley Regional Airport (“POU”), Wappingers Falls, NY (New York area);

●

Miami-Opa Locka Executive Airport (“OPF”), Opa Locka, FL (Miami area);

●

Nashville International Airport (“BNA”), Nashville, TN;

●

Orlando Executive Airport (“ORL”), Orlando, FL;

●

Phoenix Deer Valley Airport (“DVT”), Phoenix, AZ;

●

Salt Lake City International Airport (“SLC”), Salt Lake City, UT;

●

San José Mineta International Airport (“SJC”), San Jose, CA;

●

Sugar Land Regional Airport (“SGR”), Sugar Land, TX (Houston area); and

●

Washington Dulles International Airport (“IAD”), Dulles, VA (Washington, DC area).

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

	*September 30, 2024*			*December 31, 2023*
Constructed assets, net of accumulated depreciation:
Buildings: BNA, OPF Phase I, SGR, and SJC Renovation	$	84,053		$	80,232
Accumulated depreciation		(4,303	)		(2,949	)
	$	79,750		$	77,283
Cost of construction:
ADS Phase I, ADS Phase II, APA Phase I, BDL Phase I, DVT Phase I, OPF Phase II, ORL Phase I, and PWK Phase I	$	120,443		$	64,212

Note 6 - Long-lived Assets

9 Months Ended

Sep. 30, 2024

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

6.	Long-lived Assets

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

	*September 30, 2024*			*December 31, 2023*
Ground support equipment	$	1,421		$	1,051
Machinery and equipment		3,939			3,783
Buildings		5,433			5,380
Land		1,620			1,620
Other equipment and fixtures		814			596
Purchase deposits and construction in progress		902			362
		14,129			12,792
Accumulated depreciation		(1,902	)		(963	)
	$	12,227		$	11,829

Note 7 - Supplemental Balance Sheet and Cash Flow Information

9 Months Ended

Sep. 30, 2024

Notes to Financial Statements

Supplemental Balance Sheet and Cash Flow Disclosure [Text Block]

7.	Supplemental Balance Sheet and Cash Flow Information

Accounts payable, accrued expenses and other liabilities

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

	*September 30, 2024*		*December 31, 2023*
Costs of construction	$	13,652	$	7,022
Employee compensation and benefits		1,892		2,438
Interest		1,739		3,474
Professional fees		1,107		1,154
Tenant security deposits		995		614
Other		1,817		2,038
	$	21,202	$	16,740

Supplemental Cash Flow Information

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

	*Nine months ended*
	*September 30, 2024*		*September 30, 2023*
Accrued costs of construction, including capitalized interest	$	13,021	$	8,593
Accrued costs of long-lived assets		17		47
Debt issuance costs and premium amortized to cost of construction		152		158

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

	*Nine months ended*
	*September 30, 2024*		*September 30, 2023*
Right-of-use assets obtained in exchange for operating lease liabilities	$	59,192	$	1,368
Net increase (decrease) in right-of-use assets and operating lease liabilities due to lease remeasurement	$	70	$	(206	)

The following table summarizes interest paid:

	*Nine months ended*
	*September 30, 2024*		*September 30, 2023*
Interest paid	$	7,496	$	7,256

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:

	*Nine months ended*
	*September 30, 2024*		*September 30, 2023*
Cash, beginning of year	$	60,257	$	2,174
Restricted cash, beginning of year		12,009		39,222
Cash and restricted cash, beginning of year	$	72,266	$	41,396

Cash, end of period	$	3,540	$	2,471
Restricted cash, end of period		70,627		34,289
Cash and restricted cash, end of period	$	74,167	$	36,760

Note 8 - Leases

9 Months Ended

Sep. 30, 2024

Notes to Financial Statements

Lessee and Lessor, Operating Lease [Text Block]

8.	Leases

Lessee

	Three months ended				Nine months ended
	September 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
Operating expenses	$	2,541	$	972	$	6,135	$	2,875
General and administrative expenses		28		24		83		72
Total operating lease expense	$	2,569	$	996	$	6,218	$	2,947

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

	*Nine months ended*
	*September 30,*		*September 30,*
	*2024*		*2023*
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$	2,883	$	1,504
Operating cash flows from finance leases		2		2
Financing cash flows from finance leases		21		11

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

Weighted Average Remaining Lease Term (in years)	*September 30, 2024*			*December 31, 2023*
Operating leases
Ground leases - Unimproved at commencement		54.6			55.8
Ground leases - Existing improvements		26.7			46.1
Equipment leases		3.8			4.0
Office leases		1.3			1.4
All operating leases		43.9			53.4
Finance leases		2.1			2.7

Weighted Average Discount Rate
Operating leases
Ground leases - Unimproved at commencement		5.41	%		5.22	%
Ground leases - Existing improvements		4.92	%		4.00	%
Equipment leases		5.28	%		5.45	%
Office leases		4.82	%		2.46	%
All operating leases		5.31	%		5.08	%
Finance leases		4.98	%		5.00	%

The Company’s future minimum lease payments required under leases as of September 30, 2024 were as follows:

Year Ending December 31,	Operating Leases			Finance Leases
2024 (remainder of year)	$	1,304		$	6
2025		5,342			24
2026		6,545			17
2027		7,225			2
2028		7,449			-
Thereafter		416,487			-
Total lease payments		444,352			49
Less imputed interest		(314,371	)		(2	)
Total	$	129,981		$	47

Lessor

Tenant leases to which the Company is the lessor require the following non-cancelable future minimum lease payments from tenants as of September 30, 2024:

Year Ending December 31,	*Operating Leases*
2024 (remainder of year)	$	3,259
2025		11,618
2026		10,014
2027		7,164
2028		4,913
Thereafter		2,953
Total	$	39,921

Note 9 - Bonds Payable, Loans Payable, and Interest

9 Months Ended

Sep. 30, 2024

Notes to Financial Statements

Debt Disclosure [Text Block]

9.	Bonds payable, loans payable, and interest

Bonds payable

The following table summarizes the Company’s Bonds payable as of September 30, 2024 and December 31, 2023:

	*September 30, 2024*			*December 31, 2023*
Bonds payable:
Series 2021 Bonds Principal	$	166,340		$	166,340
Premium on bonds		249			249
Bond proceeds		166,589			166,589
Debt issuance costs		(4,753	)		(4,753	)
Accumulated amortization of debt issuance costs and accretion of bond premium		736			584
Total Bonds payable, net	$	162,572		$	162,420

Loans Payable and Finance Leases

The following table summarizes the Company's loans payable and finance lease liabilities as of September 30, 2024 and December 31, 2023:

		September 30, 2024					December 31, 2023
	Maturity Dates	Weighted-Average Interest Rates			Balance		Weighted-Average Interest Rates			Balance
Vista Loan	December 2025		8.60	%	$	7,610		8.53	%	$	8,768
Equipment loans	August 2026 - September 2028		8.01	%		311		8.09	%		475
Finance leases	September 2024 - July 2027		4.98	%		47		5.00	%		67
Total Loans payable and finance leases			8.55	%	$	7,968		8.47	%	$	9,310

Interest

The following table sets forth the details of interest expense:

	Three months ended						Nine months ended
	September 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
Interest	$	1,912		$	1,969		$	5,763		$	5,522
Accretion of bond premium and amortization of debt issuance costs		50			52			152			158
Total interest incurred		1,962			2,021			5,915			5,680
Less: capitalized interest		(1,785	)		(1,787	)		(5,357	)		(5,364	)
Interest expense	$	177		$	234		$	558		$	316

Note 10 - Warrants

9 Months Ended

Sep. 30, 2024

Notes to Financial Statements

Warrants [Text Block]

10.

Warrants

Note 11 - Equity

9 Months Ended

Sep. 30, 2024

Notes to Financial Statements

Equity [Text Block]

11.

Equity

Common Equity

At-the-Market Facility

Private Placement and Securities Purchase Agreement

The Initial Closing occurred on October 25, 2024. See Note 17 — Subsequent Events.

Non-controlling interests

Note 12 - Equity Compensation

9 Months Ended

Sep. 30, 2024

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

12.

Equity Compensation

Restricted Stock Units (“RSUs”)

Non-qualified Stock Options (“NSOs”)

Sky Incentive Units

Note 13 - Earnings (Loss) Per Share

9 Months Ended

Sep. 30, 2024

Notes to Financial Statements

Earnings Per Share [Text Block]

13.

Earnings (loss) per Share

	Three Months Ended						Nine Months Ended
	September 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
Numerator:
Net loss	$	(20,699	)	$	(1,999	)	$	(37,735	)	$	(12,394	)
Less: Net loss attributable to non-controlling interests		(2,145	)		(1,810	)		(6,003	)		(6,788	)
Basic and diluted net loss attributable to Sky Harbour Group Corporation shareholders		(18,554	)		(189	)		(31,732	)		(5,606	)

Denominator:
Basic and diluted weighted average shares of Class A Common Stock outstanding		25,055			15,245			24,689			15,132

Loss per share of Class A Common Stock – Basic and diluted	$	(0.74	)	$	(0.01	)	$	(1.29	)	$	(0.37	)

Potentially dilutive shares excluded from the weighted-average shares used to calculate the diluted net loss per common share due to the Company's net loss position were as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
Shares subject to unvested restricted stock units		959		957		959		957
Shares issuable upon the exercise of unvested stock options		439		-		439		-
Shares issuable upon the exercise of Warrants		15,803		14,519		15,803		14,519
Shares issuable upon the exchange of Class B Common Stock		42,046		42,046		42,046		42,046
Shares issuable upon the exercise and exchange of Sky Incentive Units		2,156		2,808		2,156		2,808

Note 14 - Accumulated Other Comprehensive Income

9 Months Ended

Sep. 30, 2024

Notes to Financial Statements

Comprehensive Income (Loss) Note [Text Block]

14.

Accumulated Other Comprehensive Income

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

	Unrealized gain on Available-for-sale Securities			Total
Balance as of December 31, 2023	$	312		$	312
Other comprehensive income before reclassifications		503			503
Amounts reclassified to other (income) expense		(774	)		(774	)
Balance as of September 30, 2024	$	41		$	41

	Unrealized gain on Available-for-sale Securities			Total
Balance as of December 31, 2022	$	(102	)	$	(102	)
Other comprehensive income before reclassifications		521			521
Amounts reclassified to other (income) expense		(121	)		(121	)
Balance as of September 30, 2023	$	298		$	298

Note 15 - Commitments and Contingencies

9 Months Ended

Sep. 30, 2024

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

15.

Commitments and Contingencies

The SJC Lease contains customary milestones by which the Company must complete additional construction.

The SLC Lease requires that the Company make minimum capital improvements of $40 million.

Note 16 - Related Party Transactions

9 Months Ended

Sep. 30, 2024

Notes to Financial Statements

16.

Related Party Transactions

Note 17 - Subsequent Events

9 Months Ended

Sep. 30, 2024

Notes to Financial Statements

Subsequent Events [Text Block]

17.

Subsequent Events

Private Placement and Securities Purchase Agreement

POU Ground Lease Extension

Insider Trading Arrangements

3 Months Ended

9 Months Ended

Sep. 30, 2024

Insider Trading Arr Line Items

Material Terms of Trading Arrangement [Text Block]

ITEM 5.

OTHER INFORMATION

Rule 10b5-1 Arrangement Adopted [Flag]

false

Rule 10b5-1 Arrangement Terminated [Flag]

false

Non-Rule 10b5-1 Arrangement Terminated [Flag]

false

Non-Rule 10b5-1 Arrangement Adopted [Flag]

false

Significant Accounting Policies (Policies)	9 Months Ended
Significant Accounting Policies (Policies)	Sep. 30, 2024
Accounting Policies [Abstract]
Basis of Accounting, Policy [Policy Text Block]	*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 Form 10-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 the Company 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 Form 10-K for the year ended December 31, 2023, 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, Policy [Policy Text Block]	*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 the business combination. Actual results could differ materially from those estimates.
Risks and Uncertainties [Policy Text Block]	*Risks and Uncertainties* The Company’s operations have been limited to-date. 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 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 [Policy Text Block]	*Liquidity and Capital Resources* As a result of ongoing construction projects and business development activities, including the development of aircraft hangars and the leasing of available hangar space, the Company has incurred recurring losses and negative cash flows from operating activities since its inception. The Company expects to continue to invest in such activities and generate operating losses in the near future. The Company obtained long-term financing through bond and equity offerings to fund its construction, lease, and operational commitments, and believes its liquidity is sufficient to allow continued operations for more than one year after the date these financial statements are issued.
Consolidation, Policy [Policy Text Block]	Basis of Consolidation SHG is deemed to have a controlling interest of Sky through its appointment as the Managing Member of Sky, in which SHG has control over the affairs and decision-making of Sky. The interests in Sky not owned by the Company are presented as non-controlling interests. Sky’s ownership percentage in each of its consolidated subsidiaries is 100%, unless otherwise disclosed.
Cost of Construction [Policy Text Block]	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 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 project is 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 life of the asset or the remaining term of the related ground lease, including expected renewal terms.
Lessee, Leases [Policy Text Block]	Leases The Company accounts for leases under Accounting Standards Codification (“ASC”) Topic 842, Leases. The Company determines whether a contract contains a lease at the inception of the contract. ASC Topic 842 requires lessees to recognize lease liabilities and right-of-use (“ROU”) assets for all operating leases with terms of more than 12 months on the consolidated balance sheets. The Company has made an accounting policy election to not recognize leases with an initial term of 12 months or less on the Company’s consolidated balance sheets and will result in recognizing those lease payments in the consolidated statements of operations on a straight-line basis over the lease term. When management determines that it is reasonably certain that the Company will exercise its options to renew the leases, the renewal terms are included in the lease term and the resulting ROU asset and lease liability balances. The Company has lease agreements with lease and non-lease components; the Company has elected the accounting policy to not separate lease and non-lease components for all underlying asset classes. The Company has not elected to capitalize any interest cost that is implicit within its operating leases into cost of construction on the consolidated balance sheet, but instead, expenses its ground lease cost as a component of operating expenses in the consolidated statements of operations.
Derivatives, Policy [Policy Text Block]	Warrants liability The Company accounts for its Warrants (as defined in Note 10 — Warrants) in accordance with the guidance contained in ASC Topic 815, “Derivatives and Hedging” (“ASC 815”), under which warrants that do not meet the criteria for equity classification and must be recorded as derivative liabilities. Accordingly, the Company classifies the Warrants as liabilities carried at their fair value and adjusts the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until the warrants are exercised or expire, and any change in fair value is recognized in the consolidated statement of operations.
Revenue [Policy Text Block]	Revenue recognition The Company leases the hangar facilities that it constructs to third parties. The lease agreements are either on a month-to-month basis or have a defined term and may have options to extend the term. Some of the leases contain options to terminate the lease by either party with given notice. There are no options given to the lessee to purchase the underlying assets. Rental revenue is recognized in accordance with ASC Topic 842, Leases (see Note 8 — Leases) and includes fixed payments of cash rents, which represents revenue each tenant pays in accordance with the terms of its respective lease and is recognized on a straight-line basis over the term of the lease. Rental revenue and the corresponding rent and other receivables are recorded net of any concessions and uncollectible tenant receivables for all periods presented. The Company evaluates the collectability of tenant receivables for payments required under the lease agreements. If the Company determines that collectability is not probable, the Company recognizes any difference between revenue amounts recognized to date under ASC 842 and payments that have been collected from the lessee, including any additional rent or lease termination fees, as a current period adjustment to rental revenue. Variable lease payments consist of tenant reimbursements 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, and lease termination fees. Variable lease 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. For the three and nine months ended September 30, 2024, rental revenue includes $817 and $1,870 of variable lease payments, respectively. For the three and nine months ended September 30, 2023, rental revenue includes $920 and $1,224 of variable lease payments, respectively. As of September 30, 2024 and December 31, 2023, the deferred rent receivable included in prepaid expenses and other assets was $501 and $367, 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. Rent received in advance consisted of $297 and $241 as of September 30, 2024 and December 31, 2023, respectively. For the three and nine months ended September 30, 2024 the Company did not derive 10% of its revenue from any single tenant. For the three and nine months ended September 30, 2023 the Company derived approximately 46% and 38% of its revenue from two tenants, respectively.
Income Tax, Policy [Policy Text Block]	Income Taxes SHG is classified as a corporation for Federal income tax purposes and is subject to U.S. Federal and state income taxes. SHG includes in income, for U.S. Federal income tax purposes, its allocable portion of income from the “pass-through” entities in which it holds an interest, including Sky. The “pass-through” entities, are not subject to U.S. Federal and certain state income taxes at the entity level, and instead, the tax liabilities with respect to taxable income are passed through to the members, including SHG. As a result, prior to the Yellowstone Transaction, Sky was not subject to U.S. Federal and certain state income taxes at the entity level. The Company follows the asset and liability method of accounting for income taxes. This method gives consideration to the future tax consequences associated with the differences between the financial accounting and tax basis of the assets and liabilities as well as the ultimate realization of any deferred tax asset resulting from such differences, as well as from net operating losses and other tax-basis carryforwards. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. When a valuation allowance is increased or decreased, a corresponding tax expense or benefit is recorded. The Company recorded income tax expense of $0 and the effective tax rate was 0.0% for the three and nine months ended September 30, 2024 and 2023. The effective income tax rate for the three and nine months ended September 30, 2024 and 2023 differs from the federal statutory rate of 21% primarily due to a full valuation allowance against net deferred tax assets as it is more likely than not that the deferred tax assets will not be realized due to the cumulative losses sustained by the Company to date.
New Accounting Pronouncements, Policy [Policy Text Block]	Recently Issued Accounting Pronouncements Segment Reporting (Topic 280) In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The disclosure requirements included in ASU No. 2023-07 are required for all public entities, including entities with a single reportable segment. ASU No. 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and early adoption is permitted. The guidance is required to be applied on a retrospective basis. The Company is currently evaluating the impact of the standard on our consolidated financial statement disclosures. Income Taxes (Topic 740) In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this update apply to all entities that are subject to Topic 740, Income Taxes. The standard requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. The amendments in this update are effective for annual periods beginning after December 15, 2024. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of this updated standard on its disclosures to the consolidated financial statements.

Note 3 - Rapidbuilt Acquisition (Tables)

9 Months Ended

Sep. 30, 2024

Notes Tables

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

	May 12, 2023
Cash	$	293
Restricted Cash		1,500
Long-lived assets		10,752
Total assets		12,545

Accounts payable, accrued expenses and other liabilities		1,427
Loans payable and finance lease liabilities		11,074
Total liabilities		12,501
Total fair value of net assets acquired		44

Effective settlement of net receivable from Rapidbuilt		44
Total consideration transferred	$	44

Note 4 - Investments and Restricted Investments (Tables)

9 Months Ended

Sep. 30, 2024

Notes Tables

Schedule of Available for Sale Securities, and Held to Maturity [Table Text Block]

	*September 30, 2024*
	*Amortized Cost*		*Gross Unrealized Gains*		*Gross Unrealized Losses*			*Estimated Fair Value*
Investments, available for sale:
U.S. Treasuries	$	19,423	$	41	$	-		$	19,464
Total investments	$	19,423	$	41	$	-		$	19,464

Restricted investments, held-to-maturity:
U.S. Treasuries		16,741		63		(294	)		16,510
Total restricted investments	$	16,741	$	63	$	(294	)	$	16,510

	*December 31, 2023*
	*Amortized Cost*		*Gross Unrealized Gains*		*Gross Unrealized Losses*			*Estimated Fair Value*
Investments, available for sale:
U.S. Treasuries	$	11,554	$	312	$	-		$	11,866
Total investments	$	11,554	$	312	$	-		$	11,866

Restricted investments, held-to-maturity:
U.S. Treasuries		88,213		105		(694	)		87,624
Total restricted investments	$	88,213	$	105	$	(694	)	$	87,624

Investments Classified by Contractual Maturity Date [Table Text Block]

	Investments		Restricted Investments
Due within one year	$	19,464	$	5,279
Due one year through five years		-		11,462
Total	$	19,464	$	16,741

Note 5 - Cost of Construction and Constructed Assets (Tables)

9 Months Ended

Sep. 30, 2024

Notes Tables

Schedule of Constructed Assets, Net and Cost of Construction [Table Text Block]

	*September 30, 2024*			*December 31, 2023*
Constructed assets, net of accumulated depreciation:
Buildings: BNA, OPF Phase I, SGR, and SJC Renovation	$	84,053		$	80,232
Accumulated depreciation		(4,303	)		(2,949	)
	$	79,750		$	77,283
Cost of construction:
ADS Phase I, ADS Phase II, APA Phase I, BDL Phase I, DVT Phase I, OPF Phase II, ORL Phase I, and PWK Phase I	$	120,443		$	64,212

Note 6 - Long-lived Assets (Tables)

9 Months Ended

Sep. 30, 2024

Notes Tables

Property, Plant and Equipment [Table Text Block]

	*September 30, 2024*			*December 31, 2023*
Ground support equipment	$	1,421		$	1,051
Machinery and equipment		3,939			3,783
Buildings		5,433			5,380
Land		1,620			1,620
Other equipment and fixtures		814			596
Purchase deposits and construction in progress		902			362
		14,129			12,792
Accumulated depreciation		(1,902	)		(963	)
	$	12,227		$	11,829

Note 7 - Supplemental Balance Sheet and Cash Flow Information (Tables)

9 Months Ended

Sep. 30, 2024

Notes Tables

Schedule of Accounts Payable and Accrued Liabilities [Table Text Block]

	*September 30, 2024*		*December 31, 2023*
Costs of construction	$	13,652	$	7,022
Employee compensation and benefits		1,892		2,438
Interest		1,739		3,474
Professional fees		1,107		1,154
Tenant security deposits		995		614
Other		1,817		2,038
	$	21,202	$	16,740

Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]

	*Nine months ended*
	*September 30, 2024*		*September 30, 2023*
Accrued costs of construction, including capitalized interest	$	13,021	$	8,593
Accrued costs of long-lived assets		17		47
Debt issuance costs and premium amortized to cost of construction		152		158

	*Nine months ended*
	*September 30, 2024*		*September 30, 2023*
Right-of-use assets obtained in exchange for operating lease liabilities	$	59,192	$	1,368
Net increase (decrease) in right-of-use assets and operating lease liabilities due to lease remeasurement	$	70	$	(206	)

	*Nine months ended*
	*September 30, 2024*		*September 30, 2023*
Interest paid	$	7,496	$	7,256

	*Nine months ended*
	*September 30, 2024*		*September 30, 2023*
Cash, beginning of year	$	60,257	$	2,174
Restricted cash, beginning of year		12,009		39,222
Cash and restricted cash, beginning of year	$	72,266	$	41,396

Cash, end of period	$	3,540	$	2,471
Restricted cash, end of period		70,627		34,289
Cash and restricted cash, end of period	$	74,167	$	36,760

Note 8 - Leases (Tables)

9 Months Ended

Sep. 30, 2024

Notes Tables

Lease, Cost [Table Text Block]

	Three months ended				Nine months ended
	September 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
Operating expenses	$	2,541	$	972	$	6,135	$	2,875
General and administrative expenses		28		24		83		72
Total operating lease expense	$	2,569	$	996	$	6,218	$	2,947

Supplemental Information of Leases [Table Text Block]

	*Nine months ended*
	*September 30,*		*September 30,*
	*2024*		*2023*
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$	2,883	$	1,504
Operating cash flows from finance leases		2		2
Financing cash flows from finance leases		21		11

Weighted Average Remaining Lease Term (in years)	*September 30, 2024*			*December 31, 2023*
Operating leases
Ground leases - Unimproved at commencement		54.6			55.8
Ground leases - Existing improvements		26.7			46.1
Equipment leases		3.8			4.0
Office leases		1.3			1.4
All operating leases		43.9			53.4
Finance leases		2.1			2.7

Weighted Average Discount Rate
Operating leases
Ground leases - Unimproved at commencement		5.41	%		5.22	%
Ground leases - Existing improvements		4.92	%		4.00	%
Equipment leases		5.28	%		5.45	%
Office leases		4.82	%		2.46	%
All operating leases		5.31	%		5.08	%
Finance leases		4.98	%		5.00	%

Lessee, Operating Lease, Liability, to be Paid, Maturity [Table Text Block]

Year Ending December 31,	Operating Leases			Finance Leases
2024 (remainder of year)	$	1,304		$	6
2025		5,342			24
2026		6,545			17
2027		7,225			2
2028		7,449			-
Thereafter		416,487			-
Total lease payments		444,352			49
Less imputed interest		(314,371	)		(2	)
Total	$	129,981		$	47

Lessor, Operating Lease, Payment to be Received, Maturity [Table Text Block]

Year Ending December 31,	*Operating Leases*
2024 (remainder of year)	$	3,259
2025		11,618
2026		10,014
2027		7,164
2028		4,913
Thereafter		2,953
Total	$	39,921

Note 9 - Bonds Payable, Loans Payable, and Interest (Tables)

9 Months Ended

Sep. 30, 2024

Notes Tables

Schedule of Long-Term Debt Instruments [Table Text Block]

	*September 30, 2024*			*December 31, 2023*
Bonds payable:
Series 2021 Bonds Principal	$	166,340		$	166,340
Premium on bonds		249			249
Bond proceeds		166,589			166,589
Debt issuance costs		(4,753	)		(4,753	)
Accumulated amortization of debt issuance costs and accretion of bond premium		736			584
Total Bonds payable, net	$	162,572		$	162,420

Debt and Finance Lease Obligation [Table Text Block]

		September 30, 2024					December 31, 2023
	Maturity Dates	Weighted-Average Interest Rates			Balance		Weighted-Average Interest Rates			Balance
Vista Loan	December 2025		8.60	%	$	7,610		8.53	%	$	8,768
Equipment loans	August 2026 - September 2028		8.01	%		311		8.09	%		475
Finance leases	September 2024 - July 2027		4.98	%		47		5.00	%		67
Total Loans payable and finance leases			8.55	%	$	7,968		8.47	%	$	9,310

Interest Expense, Debt [Table Text Block]

	Three months ended						Nine months ended
	September 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
Interest	$	1,912		$	1,969		$	5,763		$	5,522
Accretion of bond premium and amortization of debt issuance costs		50			52			152			158
Total interest incurred		1,962			2,021			5,915			5,680
Less: capitalized interest		(1,785	)		(1,787	)		(5,357	)		(5,364	)
Interest expense	$	177		$	234		$	558		$	316

Note 13 - Earnings (Loss) Per Share (Tables)

9 Months Ended

Sep. 30, 2024

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended						Nine Months Ended
	September 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
Numerator:
Net loss	$	(20,699	)	$	(1,999	)	$	(37,735	)	$	(12,394	)
Less: Net loss attributable to non-controlling interests		(2,145	)		(1,810	)		(6,003	)		(6,788	)
Basic and diluted net loss attributable to Sky Harbour Group Corporation shareholders		(18,554	)		(189	)		(31,732	)		(5,606	)

Denominator:
Basic and diluted weighted average shares of Class A Common Stock outstanding		25,055			15,245			24,689			15,132

Loss per share of Class A Common Stock – Basic and diluted	$	(0.74	)	$	(0.01	)	$	(1.29	)	$	(0.37	)

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

	Three Months Ended				Nine Months Ended
	September 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
Shares subject to unvested restricted stock units		959		957		959		957
Shares issuable upon the exercise of unvested stock options		439		-		439		-
Shares issuable upon the exercise of Warrants		15,803		14,519		15,803		14,519
Shares issuable upon the exchange of Class B Common Stock		42,046		42,046		42,046		42,046
Shares issuable upon the exercise and exchange of Sky Incentive Units		2,156		2,808		2,156		2,808

Note 14 - Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2024

Notes Tables

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

	Unrealized gain on Available-for-sale Securities			Total
Balance as of December 31, 2023	$	312		$	312
Other comprehensive income before reclassifications		503			503
Amounts reclassified to other (income) expense		(774	)		(774	)
Balance as of September 30, 2024	$	41		$	41

	Unrealized gain on Available-for-sale Securities			Total
Balance as of December 31, 2022	$	(102	)	$	(102	)
Other comprehensive income before reclassifications		521			521
Amounts reclassified to other (income) expense		(121	)		(121	)
Balance as of September 30, 2023	$	298		$	298

Note 1 - Organization and Business Operations (Details Textual) - $ / shares	Sep. 30, 2024	Dec. 31, 2023
Common Class B [Member]
Common Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.0001	$ 0.0001
Sky Harbour LLC [Member] \| Common Class B [Member]
Common Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.0001
Sky Harbour LLC [Member]
Subsidiary, Ownership Percentage, Parent	37.60%
Sky Harbour LLC [Member] \| LLC Interests and TRA Holders [Member]
Subsidiary, Ownership Percentage, Parent	62.40%

Note 2 - Basis of Presentation and Summary of Significant Accounting Policies (Details Textual) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)
Operating Lease, Variable Lease Income	$ 817	$ 920	$ 1,870	$ 1,224
Advance Rent	297		297		$ 241
Income Tax Expense (Benefit)	$ 0	$ 0	$ 0	$ 0
Effective Income Tax Rate Reconciliation, Percent	0.00%	0.00%	0.00%	0.00%
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	21.00%	21.00%	21.00%	21.00%
Customer Concentration Risk [Member] \| Revenue Benchmark [Member]
Number of Major Tenants		2		2
Customer Concentration Risk [Member] \| Revenue Benchmark [Member] \| Two Tenants [Member]
Concentration Risk, Percentage		46.00%		38.00%
Prepaid Expenses and Other Assets [Member]
Deferred Rent Asset, Net, Current	$ 501		$ 501		$ 367
Consolidated Subsidiaries [Member] \| Sky Harbour LLC [Member]
Subsidiary, Ownership Percentage, Parent	100.00%		100.00%

Note 3 - Rapidbuilt Acquisition (Details Textual) $ in Thousands	May 12, 2023 USD ($)
Overflow Ltd [Member] \| Weathorford Steel Buildings Holdings LLC [Member]
Subsidiary, Ownership Percentage, Parent	50.00%
Subsidiary, Ownership Percentage, Noncontrolling Owner	1.00%
Overflow Ltd [Member]
Business Acquisition, Percentage of Voting Interests Acquired	51.00%
Rapidbuilt [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables	$ 44

Note 3 - Rapidbuilt Acquisition - Schedule of Business Acquisition (Details) - Rapidbuilt Acquisition [Member] $ in Thousands	May 12, 2023 USD ($)
Cash	$ 293
Restricted Cash	1,500
Long-lived assets	10,752
Total assets	12,545
Accounts payable, accrued expenses and other liabilities	1,427
Loans payable and finance lease liabilities	11,074
Total liabilities	12,501
Total fair value of net assets acquired	44
Effective settlement of net receivable from Rapidbuilt	44
Total consideration transferred	$ 44

Note 4 - Investments and Restricted Investments - Summaries of the Amortized Cost, Unrealized Gains, Unrealized Losses, and Fair Value by Investment Type (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Investments, available for sale, amortized cost	$ 19,423	$ 11,554
Investments, available for sale, gross unrealized gains	41	312
Investments, available for sale, gross unrealized losses	0	0
Investments, available for sale, estimated fair value	19,464	11,866
Restricted investments, held-to-maturity, amortized cost	16,741	88,213
Restricted investments, gross unrealized gains	63	105
Restricted investments, gross unrealized losses	(294)	(694)
Restricted investments, estimated fair value	16,510	87,624
US Treasury Securities [Member]
Investments, available for sale, amortized cost	19,423	11,554
Investments, available for sale, gross unrealized gains	41	312
Investments, available for sale, gross unrealized losses	0	0
Investments, available for sale, estimated fair value	19,464	11,866
Restricted investments, held-to-maturity, amortized cost	16,741	88,213
Restricted investments, gross unrealized gains	63	105
Restricted investments, gross unrealized losses	(294)	(694)
Restricted investments, estimated fair value	$ 16,510	$ 87,624

Note 4 - Investments and Restricted Investments - Investments and Restricted Investments (Details) $ in Thousands	Sep. 30, 2024 USD ($)
Investments, due within one year	$ 19,464
Restricted investments, due within one year	5,279
Investments,due on year through five years	0
Restricted investments, due on year through five years	11,462
Investments, total	19,464
Restricted investments, total	$ 16,741

Note 5 - Cost of Construction and Constructed Assets (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Depreciation	$ 456	$ 449	$ 1,354	$ 1,289

Note 5 - Cost of Construction and Constructed Assets - Constructed Assets, Net and Cost of Construction (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Asset under Construction [Member]
Buildings: BNA, OPF Phase I, SGR, and SJC Renovation	$ 84,053	$ 80,232
Accumulated depreciation	(4,303)	(2,949)
Property, Plant and Equipment, Net, Total	79,750	77,283
Construction in Progress [Member]
Property, Plant and Equipment, Net, Total	$ 120,443	$ 64,212

Note 6 - Long-lived Assets (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Depreciation	$ 456	$ 449	$ 1,354	$ 1,289
Equipment and Software [Member]
Depreciation	189	221	562	361
Construction in Progress [Member]
Depreciation	112	$ 59	378	$ 178
Equipment [Member]
Property, Plant, and Equipment, Not in Service	$ 898		$ 898		$ 362

Note 6 - Long-lived Assets - Long-lived Assets, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Equipment [Member]
Property, Plant and Equipment, Gross	$ 1,421	$ 1,051
Machinery and Equipment [Member]
Property, Plant and Equipment, Gross	3,939	3,783
Building [Member]
Property, Plant and Equipment, Gross	5,433	5,380
Land [Member]
Property, Plant and Equipment, Gross	1,620	1,620
Other Equipment and Fixtures [Member]
Property, Plant and Equipment, Gross	814	596
Purchase deposits and Construction in Progress [Member]
Property, Plant and Equipment, Gross	902	362
Equipment and Software [Member]
Property, Plant and Equipment, Gross	14,129	12,792
Accumulated depreciation	(1,902)	(963)
Property, Plant and Equipment, Net	$ 12,227	$ 11,829

Note 7 - Supplemental Balance Sheet and Cash Flow Information - Accounts Payable, Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Costs of construction	$ 13,652	$ 7,022
Employee compensation and benefits	1,892	2,438
Interest	1,739	3,474
Professional fees	1,107	1,154
Tenant security deposits	995	614
Other	1,817	2,038
Accounts Payable and Accrued Liabilities	$ 21,202	$ 16,740

Note 7 - Supplemental Balance Sheet and Cash Flow Information - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Accrued costs of construction, including capitalized interest	$ 13,021	$ 8,593
Accrued costs of long-lived assets	17	47
Debt issuance costs and premium amortized to cost of construction	152	158
Right-of-use assets obtained in exchange for operating lease liabilities	59,192	1,368
Net increase (decrease) in right-of-use assets and operating lease liabilities due to lease remeasurement	70	(206)
Interest paid	7,496	7,256
Cash, beginning of year	60,257	2,174
Restricted cash, beginning of year	12,009	39,222
Cash and restricted cash, beginning of year	72,266	41,396
Cash, end of period	3,540	2,471
Restricted cash, end of period	70,627	34,289
Cash and restricted cash, end of period	$ 74,167	$ 36,760

Note 8 - Leases (Details Textual)	Sep. 30, 2024	Aug. 31, 2024 a	May 31, 2024 a	Mar. 27, 2024 a	Mar. 23, 2024 ft²
Minimum [Member]
Lessor, Operating Lease, Term of Contract (Year)	1 year
Maximum [Member]
Lessor, Operating Lease, Term of Contract (Year)	10 years
Ground Leases at SGR, OPF, and BNA [Member] \| Minimum [Member]
Lessee, Operating Lease, Term of Contract (Year)	16 years
Ground Leases at SGR, OPF, and BNA [Member] \| Maximum [Member]
Lessee, Operating Lease, Term of Contract (Year)	73 years
SJC Lease [Member]
Lessee, Operating Lease, Term of Contract (Year)					20 years
Lessee, Operating Lease, Renewal Term (Year)					5 years
SJC Lease [Member] \| Hanger [Member]
Area of Real Estate Property (Square Foot)					38,000
SJC Lease [Member] \| Office Space [Member]
Area of Real Estate Property (Square Foot)					19,000
SJC Lease [Member] \| Apron and Ramp Space [Member]
Area of Real Estate Property (Square Foot)					108,000
SJC Lease [Member] \| Additional Land to Develop [Member]
Area of Real Estate Property (Square Foot)					28,000
ORL Lease [Member]
Lessee, Operating Lease, Term of Contract (Year)				30 years
Lessee, Operating Lease, Renewal Term (Year)				20 years
Area of Land (Acre) \| a				20
IAD Lease [Member]
Lessee, Operating Lease, Term of Contract (Year)			50 years
Lessee, Operating Lease, Renewal Term (Year)			10 years
Area of Land (Acre) \| a			18
SLC Lease [Member]
Lessee, Operating Lease, Term of Contract (Year)		30 years
Lessee, Operating Lease, Renewal Term (Year)		20 years
Area of Land (Acre) \| a		8.4

Note 8 - Leases - Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Operating lease expense	$ 2,569	$ 996	$ 6,218	$ 2,947
Operating Expense [Member]
Operating lease expense	2,541	972	6,135	2,875
General and Administrative Expense [Member]
Operating lease expense	$ 28	$ 24	$ 83	$ 72

Note 8 - Leases - Supplemental Information (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Operating cash flows from operating leases	$ 2,883	$ 1,504
Operating cash flows from finance leases	2	2
Financing cash flows from finance leases	$ 21	$ 11
Operating leases, weighted average remaining lease term (Year)	43 years 10 months 24 days		53 years 4 months 24 days
Finance leases, weighted average remaining lease term (Year)	2 years 1 month 6 days		2 years 8 months 12 days
Operating leases, weighted average discount	5.31%		5.08%
Finance leases, weighted average discount	4.98%		5.00%
Ground Leases - Unimproved at Commencement [Member]
Operating leases, weighted average remaining lease term (Year)	54 years 7 months 6 days		55 years 9 months 18 days
Operating leases, weighted average discount	5.41%		5.22%
Ground Leases - Existing Improvements [Member]
Operating leases, weighted average remaining lease term (Year)	26 years 8 months 12 days		46 years 1 month 6 days
Operating leases, weighted average discount	4.92%		4.00%
Equipment Leases [Member]
Operating leases, weighted average remaining lease term (Year)	3 years 9 months 18 days		4 years
Operating leases, weighted average discount	5.28%		5.45%
Office Leases [Member]
Operating leases, weighted average remaining lease term (Year)	1 year 3 months 18 days		1 year 4 months 24 days
Operating leases, weighted average discount	4.82%		2.46%

Note 8 - Leases - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
2024 (remainder of year)	$ 1,304
2024 (remainder of year)	6
2025, Operating Lease	5,342
2025, Finance Lease	24
2026, Operating Lease	6,545
2026, Finance Lease	17
2027, Operating Lease	7,225
2027, Finance Lease	2
2028, Operating Lease	7,449
2028, Finance Lease	0
Thereafter, Operating Lease	416,487
Thereafter, Finance Lease	0
Total lease payments, Operating Lease	444,352
Total lease payments, Finance Lease	49
Less imputed interest, Operating Lease	(314,371)
Less imputed interest, Finance Lease	(2)
Total, Operating Lease	129,981	$ 69,437
Total, Finance Lease	$ 47

Note 8 - Leases - Non-cancelable Future Minimum Lease Payments from Tenants (Details) $ in Thousands	Sep. 30, 2024 USD ($)
2024 (remainder of year)	$ 3,259
2025	11,618
2026	10,014
2027	7,164
2028	4,913
Thereafter	2,953
Total	$ 39,921

Note 9 - Bonds Payable, Loans Payable, and Interest (Details Textual) - Series 2021 Bonds [Member] - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023	May 20, 2021
Long-Term Debt, Gross	$ 166,340	$ 166,340	$ 166,300
Debt Instrument, Unamortized Premium, Total	249	249	200
Fair Value, Inputs, Level 2 [Member]
Long-Term Debt, Fair Value	$ 141,500	$ 116,500
Tranche One [Member]
Long-Term Debt, Gross			$ 21,100
Debt Instrument, Interest Rate, Stated Percentage			4.00%
Tranche Two [Member]
Long-Term Debt, Gross			$ 30,400
Debt Instrument, Interest Rate, Stated Percentage			4.00%
Tranche Three [Member]
Long-Term Debt, Gross			$ 114,800
Debt Instrument, Interest Rate, Stated Percentage			4.25%

Note 9 - Bonds Payable, Loans Payable, and Interest - Bonds Payable (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023	May 20, 2021
Total Bonds payable, net	$ 162,572	$ 162,420
Series 2021 Bonds [Member]
Series 2021 Bonds Principal	166,340	166,340	$ 166,300
Premium on bonds	249	249	$ 200
Bond proceeds	166,589	166,589
Debt issuance costs	(4,753)	(4,753)
Accumulated amortization of debt issuance costs and accretion of bond premium	736	584
Total Bonds payable, net	$ 162,572	$ 162,420

Note 9 - Bonds Payable, Loans Payable and Interest - Loans Payable and Finance Lease Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 13, 2023
Weighted average interest rate	8.55%	8.47%
Balance	$ 7,968	$ 9,310
Vista Loan [Member]
Weighted average interest rate	8.60%	8.53%
Balance	$ 7,610	$ 8,768
Equipment Loan [Member]
Weighted average interest rate	8.01%	8.09%
Balance	$ 311	$ 475
Finance Lease [Member]
Weighted average interest rate	4.98%	5.00%
Balance	$ 47	$ 67

Note 9 - Bonds Payable, Loans Payable, and Interest - Interest Expenses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Interest	$ 1,912	$ 1,969	$ 5,763	$ 5,522
Accretion of bond premium and amortization of debt issuance costs	50	52	152	158
Total interest incurred	1,962	2,021	5,915	5,680
Less: capitalized interest	(1,785)	(1,787)	(5,357)	(5,364)
Interest expense	$ 177	$ 234	$ 558	$ 316

Note 10 - Warrants (Details Textual) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023	Nov. 01, 2023	Oct. 26, 2020
Proceeds from Warrant Exercises			$ 2,960	$ 3
Fair Value Adjustment of Warrants	$ 15,961	$ (1,597)	$ 23,930	0
Public Warrants [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)							6,799,439
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)							$ 11.5
Private Placement Warrant [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)						1,541,600	7,719,779
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)						$ 11.5	$ 11.5
Class of Warrants or Rights, Exercised During Period (in shares)	0		257,342
Proceeds from Warrant Exercises			$ 3,000
Class of Warrant or Right, Outstanding (in shares)	15,803,001		15,803,001
Class of Warrants and Rights Outsanding, Price (in dollars per share)	$ 2.25		$ 2.25		$ 0.75
Warrants and Rights Outstanding	$ 35,600		$ 35,600		$ 12,000
Fair Value Adjustment of Warrants	$ (16,000)	$ 1,600	$ 23,900	$ 0

Note 11 - Equity (Details Textual) - USD ($) $ / shares in Units, $ in Thousands			1 Months Ended	3 Months Ended	9 Months Ended
	Sep. 16, 2024	Mar. 27, 2024	Oct. 25, 2024	Sep. 30, 2024	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Payments of Stock Issuance Costs					$ 415	$ (0)
Sky Harbour LLC [Member] \| LLC Interests and TRA Holders [Member]
Subsidiary, Ownership Percentage, Noncontrolling Owner				62.40%	62.40%
Overflow [Member] \| Former Majority Shareholder [Member]
Subsidiary, Ownership Percentage, Noncontrolling Owner				49.00%	49.00%
At Market Issuance Sales Agreement [Member]
Sale of Stock, Maximum Amount Issuable		$ 100,000
Sale of Stock, Commission Percentage		3.00%
Stock Issued During Period, Shares, New Issues (in shares)				0	7,407
Shares Issued, Price Per Share (in dollars per share)				$ 12.42	$ 12.42
Payments of Stock Issuance Costs		$ 100
Common Class A [Member]
Common Stock, Shares, Outstanding (in shares)				25,326,328	25,326,328		24,165,523
Common Class A [Member] \| The 2024 Private Placement Purchase Agreement [Member]
Stock Issued During Period, Shares, New Issues (in shares)	3,352,106		3,955,790
Shares Issued, Price Per Share (in dollars per share)	$ 9.5
Proceeds from Issuance of Common Stock	$ 31,800		$ 37,600
Common Class B [Member]
Common Stock, Shares, Outstanding (in shares)				42,046,356	42,046,356		42,046,356

Note 12 - Equity Compensation (Details Textual) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended
	Feb. 29, 2024	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Sky Incentive Units [Member] \| Sky Harbour LLC and Subsidiaries (Sky) [Member]
Share-Based Payment Arrangement, Expense		$ 45	$ 72	$ 136	$ 238
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount		100		$ 100
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)				8 months 12 days
The 2022 Incentive Award Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares)	438,781
Share-Based Compensation Arrangements by Share-Based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in dollars per share)	$ 11.63
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share)	$ 7.32
The 2022 Incentive Award Plan [Member] \| Restricted Stock Units (RSUs) [Member]
Share-Based Payment Arrangement, Expense		$ 800	$ 500	$ 2,700	$ 1,400
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number (in shares)		958,707		958,707
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value (in dollars per share)		$ 9.76		$ 9.76
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount		$ 7,600		$ 7,600
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)				2 years 8 months 12 days
The 2022 Incentive Award Plan [Member] \| Restricted Stock Units (RSUs) [Member] \| Share-Based Payment Arrangement, Employee [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)	430,002
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share)	$ 12.33
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year)	4 years
The 2022 Incentive Award Plan [Member] \| Share-Based Payment Arrangement, Option [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year)	4 years
Share-Based Payment Arrangement, Expense		100		$ 200
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount		$ 3,000		$ 3,000
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)				8 years 4 months 24 days
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period (Year)	10 years

Note 13 - Earnings (Loss) Per Share - Schedule of Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2024	Sep. 30, 2023
Net loss	$ (20,699)	$ 4,163	$ (21,199)	$ (1,999)	$ (1,634)	$ (8,761)	$ (37,735)	$ (12,394)
Less: Net loss attributable to non-controlling interests	(2,145)			(1,810)			(6,003)	(6,788)
Basic and diluted net loss attributable to Sky Harbour Group Corporation shareholders	$ (18,554)			$ (189)			$ (31,732)	$ (5,606)
Basic and diluted weighted average shares of Class A Common Stock outstanding (in shares)	25,055			15,245			24,689	15,132
Loss per share of Class A Common Stock – Basic and diluted (in dollars per share)	$ (0.74)			$ (0.01)			$ (1.29)	$ (0.37)

Note 13 - Earnings (Loss) Per Share - Antidilutive Securities (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Restricted Stock Units (RSUs) [Member]
Antidilutive securities (in shares)	959	957	959	957
Share-Based Payment Arrangement, Option [Member]
Antidilutive securities (in shares)	439	0	439	0
Warrant [Member]
Antidilutive securities (in shares)	15,803	14,519	15,803	14,519
Class B Common Stock [Member]
Antidilutive securities (in shares)	42,046	42,046	42,046	42,046
Sky Incentive Units [Member]
Antidilutive securities (in shares)	2,156	2,808	2,156	2,808

Note 14 - Accumulated Other Comprehensive Income - Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Balance	$ 132,246	$ 98,375
Balance	99,533	88,014
AOCI, Accumulated Gain (Loss), Debt Securities, Available-for-Sale, Including Noncontrolling Interest [Member]
Balance	312	(102)
Other comprehensive income before reclassifications	503	521
Amounts reclassified to other (income) expense	(774)	(121)
Balance	41	298
AOCI Attributable to Parent [Member]
Balance	312	(102)
Other comprehensive income before reclassifications	503	521
Amounts reclassified to other (income) expense	(774)	(121)
Balance	$ 41	$ 298

Note 15 - Commitments and Contingencies (Details Textual) $ in Thousands	9 Months Ended
	Sep. 30, 2024 USD ($)
BNA Construction Project [Member]
Termination Penalty	$ 0
APA Lease [Member]
Lease Improvement Plan, Period Limitation (Month)	24 months
DVT Lease [Member]
Lease Improvement Requirement, Phase I Requirement	$ 15,300
Lease Improvement Requirement, Phase II Requirement	14,600
ADS Construction Project [Member]
Capital Improvement, Comment To Spend	10,000
ORL Lease [Member]
Lease Improvement Requirement, Phase I Requirement	30,000
SLC Lease [Member]
Lessee, Operating Lease, Capital Improvement Requirement, Value	$ 40,000

Note 16 - Related Party Transactions (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Non-exclusive Agreement [Member]
Related Party Transaction, Amounts of Transaction	$ 108	$ 41	$ 195	$ 157
Employee Service [Member] \| Company That Employed The Chief Financial Officer [Member]
Related Party Transaction, Amounts of Transaction	$ 0	$ 3	$ 0	$ 98

Note 17 - Subsequent Events (Details Textual) - USD ($) $ / shares in Units, $ in Millions			1 Months Ended
	Oct. 25, 2024	Sep. 16, 2024	Oct. 25, 2024	Nov. 07, 2024	Sep. 30, 2024
POU Lease [Member]
Lessee, Operating Lease, Term of Contract (Year)					15 years
Subsequent Event [Member] \| POU Lease [Member]
Lessee, Operating Lease, Term of Contract (Year)				40 years
Lessee, Operating Lease, Renewal Term (Year)				10 years
The 2024 Private Placement Purchase Agreement [Member] \| Common Class A [Member]
Stock Issued During Period, Shares, New Issues (in shares)		3,352,106	3,955,790
Proceeds from Issuance of Common Stock		$ 31.8	$ 37.6
The 2024 Private Placement Purchase Agreement [Member] \| Subsequent Event [Member] \| Common Class A [Member]
Stock Issued During Period, Shares, New Issues (in shares)	603,684
Proceeds from Issuance of Common Stock	$ 5.7
Equity Offering, Maximum Shares to be Issued (in shares)	3,955,790		3,955,790
Equity Offering, Maximum Amount	$ 37.6		$ 37.6
Equit Offering, Minimum Offering Price Per Share (in dollars per share)	$ 9.5		$ 9.5