ysac20230331

ysac20230331_10q.htm

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 March 31, 2023

☐	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 May 8, 2023, 15,108,950 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.

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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	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27
PART II. OTHER INFORMATION		28
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults Upon Senior Securities	28
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits	28
	Exhibit Index	28
	Signatures	30

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ITEM 1.

FINANCIAL STATEMENTS

SKY HARBOUR GROUP CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

	*March 31, 2023*			*December 31, 2022*
	(unaudited)			(audited)
Assets
Cash	$	2,853		$	2,174
Restricted cash		70,303			39,222
Investments		18,405			24,895
Restricted investments		74,594			114,648
Prepaid expenses and other assets		6,464			4,448
Cost of construction		17,568			48,242
Constructed assets, net		78,519			39,709
Right-of-use assets		56,542			56,716
Long-lived assets, net		1,296			1,150
Total assets	$	326,544		$	331,204

Liabilities and equity
Accounts payable, accrued expenses and other liabilities	$	13,065		$	14,184
Operating lease liabilities		53,833			53,531
Bonds payable, net of debt issuance costs and premiums		162,263			162,210
Warrants liability		7,114			2,904
Total liabilities		236,275			232,829

Commitments and contingencies (Note 14)

Stockholders’ equity
Preferred stock; $0.0001 par value; 10,000,000 shares authorized as of March 31, 2023; none issued and outstanding		-			-
Class A common stock, $0.0001 par value; 200,000,000 shares authorized; 15,108,725 and 14,962,831 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively		1			1
Class B common stock, $0.0001 par value; 50,000,000 shares authorized; 42,046,356 and 42,192,250 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively		4			4
Additional paid-in capital		30,137			29,560
Accumulated deficit		(9,380	)		(3,184	)
Accumulated other comprehensive income (loss)		75			(102	)
Total Sky Harbour Group Corporation stockholders’ equity		20,837			26,279

Non-controlling interests		69,432			72,096
Total equity		90,269			98,375

Total liabilities and equity	$	326,544		$	331,204

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*
	*March 31, 2023*			*March 31, 2022*
Revenue:
Rental revenue	$	1,107		$	397
Total revenue		1,107			397

Expenses:
Operating		1,792			1,234
Depreciation		450			145
General and administrative		3,549			4,594
Total expenses		5,791			5,973

Operating loss		(4,684	)		(5,576	)

Other (income) expense:
Unrealized loss on warrants		4,210			13,938
Other (income) expense		(133	)		-
Total other (income) expense		4,077			13,938

Net loss		(8,761	)		(19,514	)

Net loss attributable to non-controlling interests		(2,565	)		(3,751	)
Net loss attributable to Sky Harbour Group Corporation shareholders	$	(6,196	)	$	(15,763	)

Loss per share
Basic	$	(0.41	)	$	(1.44	)
Diluted	$	(0.41	)	$	(1.44	)
Weighted average shares
Basic		14,983			10,954
Diluted		14,983			10,954

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
	March 31, 2023			March 31, 2022
Net loss	$	(8,761	)	$	(19,514	)
Other comprehensive loss, before related income taxes:
Unrealized gains on available-for-sale securities		223			-
Total comprehensive loss	$	(8,538	)	$	(19,514	)

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)

	*Redeemable Sky Series B*				*Class A*				*Class B*					*Additional*					*Accumulated Other*			*Total*					*Non-*
	*Preferred Units*				*Common Stock*				*Common Stock*					*Paid-in*		*Accumulated*			*Comprehensive*			*Stockholders’*			*Members*		*Controlling*			*Total*
	*Shares*		*Amount*		*Shares*		*Amount*		*Shares*			*Amount*		*Capital*		*Deficit*			*Income (Loss)*			*Equity*			*Equity*		*Interests*			*Equity*
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

	*Redeemable Series B*					*Class A*				*Class B*				*Additional*					*Accumulated Other*		*Total*						*Non-*			*Total*
	*Preferred Units*					*Common Stock*				*Common Stock*				*Paid-in*		*Accumulated*			*Comprehensive*		*Stockholders’*			*Members*			*Controlling*			*Equity*
	*Shares*		*Amount*			*Shares*		*Amount*		*Shares*		*Amount*		*Capital*		*Deficit*			*Loss*		*Equity*			*Equity*			*Interests*			*(Deficit)*
Balance at December 31, 2021		-	$	54,029			-	$	-		-	$	-	$	-	$	-		$	-		-		$	16,931		$	-		$	16,931
Sky incentive compensation prior to recapitalization		-		-			-		-		-		-		-		-			-		-			23			-			23
Net income (loss) prior to recapitalization		-		-			-		-		-		-		-		-			-		-			(1,247	)		-			(1,247	)
Yellowstone Transaction and recapitalization		-		(54,029	)		14,937,581		1		42,192,250		4		28,681		-			-		28,686			(15,707	)		81,024			94,003
Sky incentive compensation following recapitalization		-		-			-		-		-		-		-		-			-		-			-			63			63
Net loss following recapitalization		-		-			-		-		-		-		-		(15,763	)		-		(15,763	)		-			(2,504	)		(18,267	)
Balance at March 31, 2022		-	$	-			14,937,581	$	1		42,192,250	$	4	$	28,681	$	(15,763	)	$	-	$	12,923		$	-		$	78,583		$	91,506

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)

	*Three months ended*
	*March 31, 2023*			*March 31, 2022*
Cash flows from operating activities:
Net loss	$	(8,761	)	$	(19,514	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		450			145
Straight-line rent adjustments, net		(25	)		12
Equity-based compensation		478			86
Non-cash operating lease expense		485			539
Unrealized loss on warrants		4,210			13,938
Changes in operating assets and liabilities:
Prepaid expenses and other assets		(705	)		(3,500	)
Right-of-use asset initial direct costs		(9	)		-
Accounts payable, accrued expenses and other liabilities		(676	)		(1,870	)
Net cash used in operating activities		(4,553	)		(10,164	)

Cash flows from investing activities:
Purchases of long-lived assets		(175	)		(6	)
Payments for cost of construction		(8,948	)		(12,428	)
Issuance of notes receivable		(1,321	)		-
Purchases of held-to-maturity investments		-			(166,560	)
Proceeds from available for sale investments		6,713			-
Proceeds from held-to-maturity investments		40,044			-
Net cash provided by (used in) investing activities		36,313			(178,994	)

Cash flows from financing activities:
Proceeds from issuance of BOC PIPE		-			45,000
Proceeds from Yellowstone trust		-			15,691
Payments for equity issuance costs		-			(8,822	)
Net cash provided by financing activities		-			51,869

Net increase (decrease) in cash and restricted cash		31,760			(137,289	)

Cash and restricted cash, beginning of year		41,396			203,935

Cash and restricted cash, end of period	$	73,156		$	66,646

See accompanying Notes to Unaudited Consolidated Financial Statements

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SKY HARBOUR GROUP CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

(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 March 31, 2023, SHG owned approximately 26.2% of the Sky Common Units and the prior holders of Sky Common Units (the “LLC Interests”) owned approximately 73.8% 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, 2022, 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, including salaries, wages, and benefits associated with operations personnel employed at the Company's hangar development sites. $89 previously classified within general and administrative expenses on the consolidated statement of operations for the three months ended March 31, 2022, has been reclassified to operating expenses. This reclassification had no effect on total expenses, net loss, net loss per common share and had no impact on the Company’s consolidated balance sheets, statement of stockholders’ equity and statement of cash flows for the prior year period.

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 incentive compensation expense and financial instruments such as warrants, and estimates and assumptions related to right-of-use assets and operating lease liabilities. Actual results could differ materially from those estimates.

Risks and Uncertainties

The Company’s operations have been limited to-date. For most of its history, the Company was engaged in securing access to land through ground leases, and developing and constructing aviation hangars. The major risks faced by the Company is its future ability to obtain additional tenants for the facilities that it constructs, and to contract with such tenants for rental income in an amount that is sufficient to meet the Company’s financial obligations, including increasing construction costs due to inflation.

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%. There are no unconsolidated variable interest entities (“VIEs”) in which Sky is considered to be the primary beneficiary.

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. 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 also has tenant leases and accounts for those leases in accordance with the lessor guidance under ASC Topic 842.

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 in the consolidated statements of operations.

Warrants liability

The Company accounts for the warrants assumed in the Yellowstone Transaction (see Note 9) 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 7) 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. As of March 31, 2023 and December 31, 2022, the deferred rent receivable included in prepaid expenses and other assets was $120 and $83, respectively.

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 security deposit amounts held, as a current period adjustment to rental revenue. There were no material adjustments to rental revenue for uncollectible tenant rental payments in either of the three and nine months ended March 31, 2023 or 2022.

For the three months ended March 31, 2023 the Company derived approximately 45% of its revenue from three tenants, including 20% from a single tenant. For the three months ended March 31, 2022, the Company derived approximately 90% of its revenue from two tenants.

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 months ended March 31, 2023 and March 31, 2022. The effective income tax rate for the three months ended March 31, 2023 and March 31, 2022 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.

Recently Adopted Accounting Pronouncements

Credit Losses (Topic 326)

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). Subsequent to the issuance of ASU 2016-13, the FASB clarified the guidance through several ASUs. The collective new guidance (ASC 326) generally requires that credit losses be reported using an expected losses model rather than the incurred losses model that is currently used and establishes additional disclosures related to credit risks. The Company adopted this guidance using the modified retrospective method in the first quarter of fiscal year 2023. The adoption did not have a material impact on the Company’s condensed consolidated financial statements.

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3.	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 8, 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 months ended March 31, 2023. The held-to-maturity restricted investments are carried on the consolidated balance sheet at amortized cost. As of March 31, 2023, 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 are summaries of the amortized cost, unrealized gains, unrealized losses, and fair value by investment type as of March 31, 2023 and December 31, 2022:

	*March 31, 2023*
	*Amortized Cost*		*Gross Unrealized Gains*		*Gross Unrealized Losses*			*Estimated Fair Value*
Investments, available for sale:
U.S. Treasuries	$	18,330	$	78	$	(3	)	$	18,405
Total investments	$	18,330	$	78	$	(3	)	$	18,405

Restricted investments, held-to-maturity:
U.S. Treasuries		74,594		118		(1,219	)		73,493
Total restricted investments	$	74,594	$	118	$	(1,219	)	$	73,493

	*December 31, 2022*
	*Amortized Cost*		*Gross Unrealized Gains*		*Gross Unrealized Losses*			*Estimated Fair Value*
Investments, available for sale:
U.S. Treasuries	$	24,997	$	65	$	(167	)	$	24,895
Total investments	$	24,997	$	65	$	(167	)	$	24,895

Restricted investments, held-to-maturity:
U.S. Treasuries		114,648		299		(1,991	)		112,956
Total restricted investments	$	114,648	$	299	$	(1,991	)	$	112,956

The following table sets forth the maturity profile of the Company's investments and restricted investments as of March 31, 2023:

	*Investments*		*Restricted Investments*
Due within one year	$	8,409	$	54,370
Due on year through five years		9,996		20,224
Total	$	18,405	$	74,594

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4.	Cost of Construction and Constructed Assets

The Company’s portfolio as of March 31, 2023 includes the following completed and in-development projects:

●

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

●

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

●

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

●

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

●

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

●

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

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

	*March 31, 2023*			*December 31, 2022*
Constructed assets, net of accumulated depreciation:
Buildings, SGR (Phase I), BNA, and OPF (Phase I)	$	80,123		$	40,921
Accumulated depreciation		(1,604	)		(1,212	)
	$	78,519		$	39,709
Cost of construction:
OPF (Phase II), APA, DVT, and ADS	$	17,568		$	48,242

Depreciation expense for the three months ended March 31, 2023 and 2022 totaled $392 and $135, respectively.

5.	Long-lived Assets

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

	*March 31, 2023*			*December 31, 2022*
Ground support equipment	$	1,034		$	485
Other equipment and fixtures		328			110
Purchase deposits and construction in progress		87			650
		1,449			1,245
Accumulated depreciation		(153	)		(95	)
	$	1,296		$	1,150

Depreciation expense for the three months ended March 31, 2023 and 2022 totaled $58 and $10, respectively. As of March 31, 2023 and December 31, 2022, equipment included approximately $87 and $650, respectively, of purchase deposits towards ground support equipment which are not being depreciated as the assets have not been placed into service.

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6.	Supplemental Balance Sheet and Cash Flow Information

Prepaid expenses and other assets

In July 2022, the Company entered into a vendor agreement to acquire construction materials related to the Company's development projects (the “Vendor Agreement”). In connection with the Vendor Agreement, the Company entered into a revolving line of credit loan and security agreement (the "Vendor Loan Agreement"), whereby the Company agreed to provide up to $2.5 million of availability under a revolving credit line to fund the working capital requirements of the vendor. The Vendor Loan Agreement matures in July 2029 and initially bears interest at a rate of 5% per annum for the first year, and increases by 1% per annum each year on the anniversary date of the Vendor Loan Agreement until its maturity.

In December 2022, the Vendor Loan Agreement was amended to increase the commitment under the revolving line of credit to $4.5 million. In connection with the amendment of the Vendor Loan Agreement, the Company was granted an option to purchase a 51% interest in the vendor for nominal consideration (the "Vendor Purchase Option"). The Vendor Purchase Option is exercisable solely at the discretion of the Company and is deemed to have no fair value as its exercise price is essentially equivalent to the fair value of the underlying equity. The Vendor Purchase Option was exercised on May 12, 2023, see “Note 16 — Subsequent Events”. The Vendor Purchase Option does not confer any voting rights to the Company prior to its exercise.

As of March 31, 2023, and December 31, 2022, the Company had loaned a total of $3.5 million and $2.2 million, respectively, to the vendor, the balance of which is presented as a component of Prepaid expenses and other assets within the Company's consolidated balance sheet.

Accounts payable, accrued expenses and other liabilities

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

	*March 31, 2023*		*December 31, 2022*
Costs of construction	$	7,391	$	6,098
Employee compensation and benefits		811		2,047
Interest		1,735		3,470
Professional Fees		1,826		1,621
Other		1,302		948
	$	13,065	$	14,184

Supplemental Cash Flow Information

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

		*Three months ended*

SEC Form 10-Q filed by Sky Harbour Group Corporation