Q1 2024 Sky Harbour Group Corp Earnings Call

May 14, 2024

Operator: Good afternoon. My name is John, and I will be your conference operator for today. At this time, I would like to welcome everyone to the Sky Harbour 2024 Q1 Earnings Call and Webinar. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply submit a question online using the webcast URL posted on our website. Thank you. I would now like to turn the call over to Mr. Francisco Gonzalez, Chief Financial Officer. You may begin your conference.

Good afternoon, My name is John and I'll be your conference operator for today at this time I would like to welcome everyone to the Sky Harbor 2024 first quarter earnings call and webinar.

John: Good afternoon. My name is John, and I will be your conference operator for today. At this time, I would like to welcome everyone to the Sky Harbour 2024 First Quarter Earnings Call and Webinar. All lines have been placed on mute to prevent any background noise.

John: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply submit a question online using the webcast URL posted on our website. Thank you. I would now like to turn the call over to Mr. Francisco Gonzalez, Chief Financial Officer. You may begin your conference.

Life have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question. During this time simply submit a question online you can go back as you are all posted on our website. Thank you.

Operator: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply submit a question online using the webcast URL posted on our website. Thank you. I would now like to turn the call over to Mr. Francisco Gonzalez, Chief Financial Officer. You may begin your conference.

Speaker Change: I would like to turn the call over to Mr. Francisco Gonzales, Chief Financial Officer, you May begin your conference.

Francisco Gonzalez: Thank you, John. I'm Francisco Gonzalez, CFO of Sky Harbour. Hello, and welcome to the 2024 Q1 Investor Conference Call and Webcast for the Sky Harbour Group Corporation. We have also invited our bondholder investors in our borrowing subsidiary, Sky Harbour Capital, to join and participate on this call. Before we begin, I've been asked by counsel to note that on today's call, the company will address certain factors that may impact this and next year's earnings. Some of the information that will be discussed today contains forward-looking statements. These statements are based on management assumptions, which may or may not come true, and you should refer to the language on slides 1 and 2 of this presentation, as well as our SEC filings for a description of the factors that may cause actual results to differ from our forward-looking statements.

John: Thank you John.

Francisco Gonzalez: Thank you, John. Francisco Gonzalez, CFO of Sky Harbour. Hello and welcome to the 2024 first quarter investor conference call and webcast for Sky Harbour Group Corporation. We have also invited our bondholder investors in our borrowing subsidiary, Sky Harbour Capitals, to join and participate in this call. Before we begin, I've been asked by the Board to note that on today's call, the company will address certain factors that may impact this and next year's earnings.

Francisco Gonzales: This coincides CFO Sky Harbor, Hello, and welcome to the 2024 first quarter Investor Conference call and webcast for the Scot Harper Group Corporation.

Speaker Change: We have also impacted our bondholder investors borrowings subsidiary Sky Harbor capital, who joined these faithful please call.

Speaker Change: Before we begin I've been asked by counsel. Please note that on today's call. The company will address certain factors that may impact this and next year.

Speaker Change: Yes.

Speaker Change: Some of the information that will be discussed today contains forward looking statements. These statements are based on management's assumptions, which may or may not control and you should refer to the language on slide one and two of this presentation as well as our SEC filings for a description of the factors that may cause actual results to differ from our forward looking statements.

Francisco Gonzalez: Some of the information that will be discussed today contains forward-looking statements. These statements are based on management assumptions, which may or may not come true, and you should refer to the language on slides 1 and 2 of this presentation, as well as our SEC filings, for a description of the factors that may cause actual results to differ from our forward-looking statements. All forward-looking statements are made as of today, and we assume no obligation to update any such statement. So now, let's get started.

Francisco Gonzalez: All forward-looking statements are made as of today, and we assume no obligation to update any such statements. Now, let's get started. The team with us this afternoon, you know from our prior webcasts, Tal Keinan, our CEO and Chair of Board, Will Whitesell, our COO, Mike Schmitt, our Chief Accounting Officer, Tim Herr, our Treasurer, and Tori Petro, our Accounting Manager. We have a few slides we want to review with you before we open it to questions. These slides have been filed a few minutes ago in Form 10-Q with the SEC, and also for Sky Harbour Capital with MSRB EMMA. Will also be available on our website shortly. As the operator stated, you may submit written questions during the webcast during the Q&A platform, and we will address them shortly after our prepared remarks. Let's get started.

Speaker Change: Forward looking statements are made as of today and we assume.

Speaker Change: No obligations to update any such statements.

Speaker Change: So now let's get started.

Francisco Gonzalez: The team with us this afternoon, you know from our prior webcasts, Tal Kainan, our CEO and Chair of the Board, Will Whitesell, our COO, Mike Schmid, our Chief Accounting Officer, Tim Herr, our Treasurer, and Tori Pretor, our Accounting Manager. We have a few slides we want to review with you before we open it to questions. These slides have been filed a few minutes ago in Form 10-Q with the SEC, and also for Sky Harbor Capital with MSRB, EMA, and will also be available on our website shortly. As the operator stated, you may submit written questions during the webcast during the Q4 platform, and we will address them shortly after our prepared remarks. Let's get started!

Speaker Change: With us. This afternoon, you know from our prior webcast, Doug King, our CEO and chair of board with White, So our CFO, Mike Smith, our Chief Accounting Officer, Jim <unk>, our Treasurer, Terry Bradshaw, our accounting.

Speaker Change: Gotcha.

Speaker Change: We have a few slides we will want to review with you before we open it to questions.

Terry Bradshaw: A few minutes ago.

Speaker Change: Thank you with the SEC.

Terry Bradshaw: And also of course capital with MSRP.

Terry Bradshaw: And we will also be available on our website shortly.

Q4 platform: As the operator stated you may submit questions. During the webcast during Q4 platform I will address that shortly after our prepared remarks.

Terry Bradshaw: Let's get started.

Terry Bradshaw: Okay.

Terry Bradshaw: Yeah.

Francisco Gonzalez: This is a summary of the financial results of our wholly-owned subsidiary, Sky Harbour Capital, and its operating subsidiaries that form the Obligated Group in the context of the trend of the past three years for selected metrics. As you may see, we continue the path of construction activity and expect that it to accelerate in the coming quarters as Will will discuss shortly. Revenues moved higher in Q1, and we expect them to continue to move higher in Q2 now that the three campuses are fully leased. Operating expenses remain relatively flat, leading to a positive cash flow from operations, as you may see in the lower right-hand chart. We expect to remain cash flow positive going forward at the operating level. We expect this trend to continue and to accelerate in H1 of next year when Denver, Phoenix, and Dallas campuses open. Next slide.

Terry Bradshaw: This is a summary of financial results of our wholly owned subsidiary Scarborough capital got it.

Francisco Gonzalez: This is a summary of the financial results of our wholly owned subsidiary Sky Harbour Capital and its operating subsidiaries that form the obligated group in the context of the trend of the past three years for sedictive metrics. As you can see, we continue the path of construction activity and expect that to accelerate in the coming quarters, as we'll discuss shortly. Revenues moved higher in Q1, and we expect them to continue to move higher in Q2, now that the three campuses are fully leased.

Terry Bradshaw: Operating subsidiaries that formed the obligated group in the context of the trend for the past three years, partially like big metrics.

Terry Bradshaw: As you May see we continue on the path of construction activity and expect that.

Terry Bradshaw: To accelerate.

Terry Bradshaw: In the coming quarters as we'll discuss shortly.

Terry Bradshaw: Revenues.

Terry Bradshaw: In Q1, and we expect them to continue to move higher in Q2, not that different campuses are fully leased.

Francisco Gonzalez: Operating expenses remain relatively flat, leading to a positive cash flow for operations, as you can see in the lower right-hand chart. We expect to remain cashflow positive going forward at the operating level. We expect this trend to continue and to accelerate in the first half of next year when Denver, Phoenix, and Dallas campuses open. Next slide.

Terry Bradshaw: <unk> expenses remained relatively flat leading to a positive cash flow from operations as you may see in the lower right hand chart.

Terry Bradshaw: We expect to remain cash flow positive going forward at the operating level.

Terry Bradshaw: We expect this trend to continue and to accelerate in the first half of next year, when Denver, Phoenix and Dallas skepticism.

Speaker Change: Thanks, a lot.

Francisco Gonzalez: On a consolidated basis, the results from Q1 track similar results as Sky Harbour Capital, except for SG&A, which is mainly at the parent company and reflect the impact of non-cash employee stock and cash-based compensation expenses. The next step function in revenues on a consolidated basis is expected to occur in Q2, the current quarter, with the opening last April, last month, of our new campus at the San José Mineta International Airport. We expect Sky Harbour Capital on a consolidated basis to reach cash flow positive in the summer of 2025 as we reach sufficient scale to cover our holding company expenses. Let us turn to Tal Keinan, our CEO, for an update on site acquisition.

Speaker Change: On a consolidated basis the results from Q1 <unk> results.

Speaker Change: Scott capital, except for SG&A, which is mainly at the parent company.

Speaker Change: The impact of noncash employee stock and cash.

Speaker Change: Cash based compensation expenses.

Francisco Gonzalez: On a consolidated basis, the results in Q1 track similar results at Scarborough Capital except for SG&A, which is mainly a repair company and reflects the impact of non-cash employee stock and cash-based compensation. The next step function in revenues, on a consolidated basis, is expected to occur in Q2, the current quarter, with the opening last April, last month, of our new campus at the San Jose Mineta International Airport. We expect Sky Harbor Capital on a consolidated basis to reach cash flow positive in the summer of 2025 as we reach sufficient scale to cover our holding company. Now, let us turn to Tatiana Arceo for an update on the site acquisition.

Speaker Change: The next step function in revenues.

Speaker Change: On a consolidate basis is expected to occur in Q2, the current quarter with the opening last April last month of our new campus at the San Jose.

Speaker Change: Sure.

Speaker Change: We expect kind of a capital for a consolidate basis to reach cash flow positive in the summer of 2025, as we reached sufficient scale to cover our holding company expenses.

Speaker Change: Turning to <unk>, our CEO for an update on site acquisition.

Tal Keinan: Thanks, Francisco. So as people I think are becoming accustomed to, we think of our activities in four silos: site acquisition, development, leasing, operations. Site acquisition, as you can see, this is the major hurdle in our business. It's not that our work is done when we acquire a site, but I think most of the value of our growth is captured at the point of site acquisition. This chart shows revenue capture historically and what we projected going forward as well on the basis of airports times square footage of hangar that we see fitting on the airport in question, times revenue per square foot that airplanes at that airport are currently paying. Of course, our objective is to capture higher revenue per square foot than is currently available at those airports, but that's what this chart shows.

Tatiana Arceo: Thanks Francisco. So, as people are becoming accustomed to, we think of our activities in four silos: site acquisition, development, leasing, and operation. Site acquisition, as you can see, is the major hurdle in our business. It's not that our work is done when we acquire a site, but I think most of the value of our growth is captured at the point of site acquisition. This chart shows revenue capture historically and what we projected going forward as well on the basis of airports times square footage of hangar that we see fitting on the airport in question times revenue per square foot that airplanes at that airport are currently paying.

Speaker Change: Thanks Rich Cisco.

Speaker Change: As people I think are becoming accustomed to we think of our activities in four silos site acquisition development leasing operations.

Speaker Change: The <unk> acquisition as you can see this is the major hurdle in our business.

Speaker Change: It's not that our work is done when we acquire a site I think most of the value of our growth is captured at the point of site acquisition.

Speaker Change: This chart shows revenue capture historically, and what we projected going forward as well on the basis of airports times square footage of hangar that we see fitting on the airplane question times revenue per square foot that airplanes up that airport are currently.

Speaker Change: <unk> Bay of course, our objective is to capture higher revenue per square foot than is currently available at those airports, but that's what this chart.

Tatiana Arceo: Of course, our objective is to capture higher revenue per square foot than is currently available at those airports, but that's what this chart shows, and I would say we're on track to meet our projections, perhaps exceed them this year. Now, I'm going to hand it over to Will to talk about development.

Speaker Change: Shows.

Tal Keinan: I would say we're on track to meet our projections, perhaps exceed them this year. I'm gonna hand it over to Will to talk about development.

Speaker Change: And I would say we are on track to meet our projections, perhaps exceed them this year.

Speaker Change: I'm going to hand, it over to will to talk about development.

Will Whitesell: Thanks, Tal. This Gantt chart represents a high-level summary of our development and construction pipeline as we see it today. Behind each one of these fields and phases, there's a significant amount of detail that represents both the planning and execution approach of each one of the fields to deliver the assets. This Gantt chart will continue to be detailed and new fields added as our pipeline grows. This represents a threefold increase in projects from 2023, 2024 moving into 2025. Our Q1 focus has been on determining the structural remediation plan of the three fields discussed in our previous call.

Thanks, Tom.: Thanks, Tom.

Will: This Gantt chart represents a high-level summary of our development and construction pipeline as we see it today. Behind each one of these fields and phases, there is a significant amount of detail that represents both the planning and execution approach of each one of the fields to deliver the assets. This Gantt chart will continue to be detailed, with new fields added as our pipeline grows.

Will: Gantt chart represents a high level summary of our development and construction pipeline as we see it today behind each one of these fields in phases, there's a significant amount of detail that represents both the planning and execution approach of each one of the fields to deliver the assets.

Thanks, Tom.: This Gantt chart will continue to be detailed and new fields added as our pipeline grows. This represents a three fold increase in projects from 2023 24 moving into 2025, our first quarter focus has been on determining the structural or <unk>.

Will: This represents a three-fold increase in projects from 2023-2024 moving into 2025. Our first quarter focus has been on determining the structural remediation plan for the three fields discussed in our previous call. The second quarter was driven around defining our processes to scale up the operation to move towards nine projects in 2025. And the third and fourth quarters will be driving the process to scale the operation, find inefficiencies, and deliver projects faster and at scale.

Thanks, Tom.: <unk> planned of the three fields discussed in our previous call. The second quarter has been driven around defining our processes to scale up the operation to move towards nine projects in 2025, and the third third and fourth quarter will be driving the process to scale the operation finding.

Will Whitesell: Q2 has been driven around defining our processes to scale up the operation to move towards nine projects in 2025, and Q3 and Q4 will be driving the process to scale the operation, finding efficiencies, delivering projects faster and at scale. As a summary, these are the three major fields that we spoke about on our previous call that represented the areas, each field that needed to be remediated with the structural fixes. These projects, per our last call, are proceeding according to our plan, as we move forward at this date.

Thanks, Tom.: Inefficiencies delivering projects faster and at scale.

Thanks, Tom.: Yes.

Thanks, Tom.: Okay.

Thanks, Tom.: As a summary of these are the three major fields that we spoke about in our previous call that represented.

Will: As a summary, these are the three major fields that we spoke about in our previous call that represent each field that needed to be remediated with the structural fixes. These projects, per our last call, are proceeding according to our plan as we move forward at this date.

Thanks, Tom.: The areas to the sorry at each field that needed to be remediated with the structural fixes.

Thanks, Tom.: These projects.

Thanks, Tom.: Per our last call.

Thanks, Tom.: Are proceeding according to our plan as we move forward at this date.

Thanks, Tom.: Okay.

Tal Keinan: Okay. It's Tal Keinan again. Our leasing update. As we discussed at our last earnings call, the first three airports are functionally fully leased. I will say we're targeting effective occupancy that is higher than 100% on those campuses. I think we did discuss this in the last earnings call, and there was a question about it, in that we have both in Nashville and Miami what we call semi-private hangars, where we have more than one tenant in a hangar. In which case, the lease contracts are defined by aircraft square footage rather than hangar square footage, and which is really the convention in our industry.

Thanks, Tom.: Okay. It says tell Ken and again, our leasing update so.

Tyler Cannon: Okay, it's Tyler Cannon again. Our leasing update, so as we discussed on our last earnings call, the first three airports are functionally fully leased. I will say we're targeting effective occupancy that is higher than 100% on those campuses. I think we discussed this in the last earnings call, and there was a question about it, in that we have both in Nashville and Miami what we call semi-private hangars, where we have more than one tenant in the hangar, in which case the lease contracts are defined by aircraft square footage rather than hangar square footage, which is really the convention in our industry.

Thanks, Tom.: As we discussed at our last earnings.

Thanks, Tom.: Earnings call. The first three airports are.

Thanks, Tom.: Functionally fully leased.

Ken: I will say, we're targeting effective occupancy that is higher than 100% on those campuses I think we did discuss this in the last.

Ken: In the last earnings call. There was a question about it.

Ken: We have both.

Ken: <unk> in Nashville, and Miami.

Thanks, Tom.: What we call semi private hangars, where we have more than 100 tenants and anger in which case the.

Thanks, Tom.: The lease contracts are defined by aircraft square footage, rather that hanger square footage, which is really the convention in our industry, that's how FBS.

Tal Keinan: That's how FBOs charge aircraft rent, which allows you to get to about 120% occupancy in a standard hangar. We do think there's actually more squeeze out of Nashville and Miami. As Francisco alluded to at the beginning, we opened our fourth campus in San José, California on 1 April. I think the two things to note on San José is number one, we're coming up on 60% leased. I guess we're about 6 weeks in to San José, so the leasing pace has been good.

Tyler Cannon: That's how FBOs charge aircraft rent, which allows you to get to about 120% occupancy in a standard hangar. So we do think there's actually more squeeze out of Nashville and Miami. As Francisco alluded to at the beginning, we opened our fourth campus in San Jose, California, on April 1st.

Speaker Change: Charge aircraft rent at which allows you to get to about 120% occupancy and our standard hangar. So we do think there is actually more squeezed out of Nashville and Miami.

Speaker Change: As Francisco alluded to at the beginning we opened our fourth campus.

Tyler Cannon: I think the two things to note about San Jose are, number one, we're coming up on 60% leased. I guess we're about six weeks in, so the leasing pace has been good. And our revenue per square foot is a lot higher, and I'll come back to that on the summary slide, where I think it's important to understand when you look at that revenue capture chart that we looked at a couple slides ago, we are orienting the company, you know, really in the next 24 to 36 months towards targeting the best airports in the country.

Speaker Change: In San Jose, California on April 1st I think the.

Francisco Gonzales: Two things to note on San Jose is.

Speaker Change: Everyone, where we're coming up on 60% leased.

Thanks, Tom.: I guess, what we're about.

Thanks, Tom.: Six weeks in to.

Thanks, Tom.: San Jose So the leasing pace has been has been good.

Tal Keinan: Our revenue per square foot is a lot higher, and I'll come back to that on the summary slide, where I think it's important to understand when you look at that revenue capture chart that we looked at a couple slides ago, we are orienting the company, you know, really in the next 24 to 36 months towards targeting the best airports in the country. As I think people have appreciated here, there's kind of a finite range within which development cost and OPEX, which is really the denominator of yield on cost. There's a finite range within which those two factors vary. That's the denominator. The action is really in the numerator, right? We are a real estate business fundamentally, and it's about location.

Thanks, Tom.: And our revenue per square foot is a lot higher and I'll come back to that on the summary slide.

Thanks, Tom.: It's important to understand when you look at that revenue capture chart that.

Thanks, Tom.: We looked at a couple of slides ago.

Thanks, Tom.: Our orienting the company it really in the next 24 months to 36 months towards targeting the best airports in the country.

Tyler Cannon: As I think people have appreciated here, there's kind of a finite range within which development cost and OPEX, which is really the denominator of yield on cost. There's a finite range within which those two factors vary. That's the denominator. The action is really in the numerator, right?

Thanks, Tom.: As I think people have appreciated here.

Thanks, Tom.: And have a finite range within which development cost and Opex.

Thanks, Tom.: Which is really the denominator of yield on cost there is a finite range within which those those two factors vary.

Thanks, Tom.: Eliminating the action is really in the numerator.

Tyler Cannon: We are a real estate business fundamentally, and it's about location. As you can see, you capture significantly higher yields on what we call Tier 1 airports. San Jose is the first Tier 1 airport in the Sky Harbour portfolio, and most Farside acquisition focus over the next 24 to 36 months will be Tier 1 airports.

Thanks, Tom.: We are a real estate business fundamentally it is about location.

Tal Keinan: As you can see, you capture significantly higher yields on what we call tier one airports. San José is the first tier one airport in the Sky Harbour portfolio, and most of our site acquisition focus over the next 24 to 36 months is tier one airports. Next slide is airport operations, where there's not much material to report here. Just to say that the objective that we set on the board level for 2024 is to really demonstrate that we're at a year where we're really building a brand for the first time for Sky Harbour. Part of that is demonstrating a clear differentiation between the Sky Harbour offering and that of legacy aircraft basing solutions. It's a very resident-centric model.

Thanks, Tom.: As you can see you.

Thanks, Tom.: You captured significantly higher yields on what we call tier one airports San Jose is the first tier one airport in the Sky Harbor portfolio and most of our site acquisition focus over the next 24 months to 36 months is tier one airports.

Thanks, Tom.: Next slide is.

Tyler Cannon: Next slide is airport operations, where there's not much material to report here, just to say that the objective that we set at the board level for 2024 is to really demonstrate that we're in a year where we're really building a brand for the first time for Sky Harbour, and part of that is demonstrating a clear differentiation between Sky Harbour and that of legacy aircraft basing solutions. It's a very resident-centric model.

Thanks, Tom.: Airport operations.

Thanks, Tom.: There's not much material to report here.

Thanks, Tom.: Just to say that the objective that we set on the <unk>.

Thanks, Tom.: <unk> level for 2024.

Thanks, Tom.: It should really demonstrate that we are in a year, where we're really building up <unk>.

Thanks, Tom.: <unk> for the first time for Sky Harbor.

Sky Harbor: And part of that is demonstrating a clear differentiation between the Sky Harbor offering.

Sky Harbor: Legacy aircraft facing solutions.

Sky Harbor: It's a very resident centric model as people on the call that we don't have transient business at all at Sky Harbor, It's all the residents and we have a.

Tal Keinan: As people on the call know, we don't have transient business at all at Sky Harbour. It's all the residents, and we have a really, I would say, almost maniacal focus on catering to those residents in the most special way possible. What does that mean? Number one, efficiency. We're demonstrating, and we hope to continue demonstrating the shortest time to wheels up in aviation, if you know, your corporation or you as an individual have made the very large investment of owning a business aircraft, we think efficiency and spontaneity is a very big piece of the value driven there. We have an interruption. Yeah, we're good.

Tyler Cannon: As people on the call know, we don't have any transient business at all at Sky Harbour. It's all residents, and we have a really, I would say, almost maniacal focus on catering to those residents in the most special way possible. What does that mean?

Sky Harbor: It really is I'd say almost maniacal focus on catering to those residents in the most special way possible what does that mean number one efficiency, we're demonstrating and we hope to continue demonstrating the shortest time to wheels up in.

Tyler Cannon: Number one, efficiency. We're demonstrating, and we hope to continue demonstrating, the shortest time to wheels up in aviation. If your corporation or you as an individual have made the very large investment of owning a business aircraft, we think efficiency and spontaneity are a very big piece of the value driven there. We have an interruption, and we're good. So that shortest time on two wheels up, I think, is what it's all about for many of the residents that are in our resident community.

Sky Harbor: In aviation if you.

Sky Harbor: Operations are you as an individual is.

Sky Harbor: That may make that a very large investment of <unk>.

Sky Harbor: Owning a.

Sky Harbor: Business aircraft, we think efficiency and spontaneity is a very big piece of.

Sky Harbor: But the value driven there have an interruption in okay.

Tal Keinan: That shortest time to wheels up, I think is what it's all about for many of the residents that are in our resident community. Second is personalization. You know, we have small line crews on every campus, both pilots and aircraft owners are on a first-name basis with everybody that touches their aircraft, and we're able to provide, you know, some very tailored service to these residents, which I think is becoming increasingly appreciated. Of course, privacy. One of the values of basing in Sky Harbour is there is no public terminal to walk through. Our residents' privacy is protected on an absolute basis.

Sky Harbor: So that shortest time to wheels up I think is what it's all about four for many of the.

Sky Harbor: The residents that are in our resident community.

Tyler Cannon: Second is personalization. We have small line crews on every campus, both pilots and aircraft owners are on a first-name basis with everybody that touches their aircraft, and we're able to provide some very tailored service to these residents, which I think is becoming increasingly appreciated, and, of course, privacy. One of the values of basing in Sky Harbour is that there is no public terminal to walk through.

Sky Harbor: It is personalization.

Aircraft owner: We have small line crews on every campus both pilots and aircraft owners on a first name basis with everybody.

Sky Harbor: That touches their aircraft and we're able to provide a very tailored service.

Sky Harbor: To these to these residents, which I think is becoming increasingly appreciated.

Sky Harbor: And of course privacy one of the I think one of the values that spacing and Sky Harbor is there is no public terminal to walk through.

Sky Harbor: Our residents privacy is protected on absolute basis.

Tal Keinan: last on the list, but first in our minds and our approach to operations is safety, where there's, you know, absolutely no compromises. That means pursuing and hiring the best ground crews in the business and having an absolutely rigorous training and testing regimen for our ground crews. With that, let me hand it back to Francisco to talk a little bit about our liquidity position and our long-term permanent debt.

Francisco Gonzalez: Our residents' privacy is protected on an absolute basis. And then, last on the list, but first in our minds and our approach to operations is safety, where there are absolutely no compromises. So that means pursuing and hiring the best ground crews in the business and having an absolutely rigorous training and testing regimen for our ground crews. With that, I will hand it back to Francisco to talk a little bit about our liquidity position and our long-term, permanent debt.

Sky Harbor: And then last on the list, but first in our in our mindset. Our approach operations is safety, where theres absolutely no compromises, so that means pursuing and hiring the best ground crews.

Sky Harbor: In.

Sky Harbor: The business and having an absolutely rigorous training and testing regimen for <unk>.

Sky Harbor: For our ground crews.

Speaker Change: With that let me hand, it back to Francisco.

Francisco Gonzales: To talk a little bit about our liquidity position and our long term permanent debt.

Francisco Gonzalez: Thank you, Tal. We continue to enjoy strong liquidity as we roll our cash into 1- to 3-month U.S. Treasury bills and notes, pending their use in construction. In the meantime, we continue to earn more on our cash than the interest expense of our bonds. At quarter end, we are close to $160 million in cash and U.S. Treasuries. Our debt, as you all know, is permanent fixed rate bonds with our first maturity eight years away and capitalized interest through the July payment of next year. The recurring cash flows from operations that we expect at the Obligated Group in 2025 will amply cover the expected debt service of $5.6 million next year without having to touch the $4 million ramp-up reserve we put in place just in case at the time of the bond issuance. Next slide.

Francisco Gonzales: Thank you Tal, we continue to enjoy strong liquidity as we rollout cash.

Francisco Gonzalez: of Canada. At quarter end, we are close to $160 million in cash and U.S. Treasuries. Our debt, as you will know, is permanent fixed-rate bonds with a first maturity eight years away and capitalized interest through the July payment of next year. The recurring cash flows from operations that we expect at the Abilgarro Group in 2025 will amply cover the expected net service of 5.6 million next year without having to touch the 4 million ramp-up we put in place just in case at the time of the bond insurance. Next slide.

Francisco Gonzales: One to three months U S Treasury bills and notes pending they are used in construction in the meantime, we continue to earn more than our cash that the interest expense corporate bonds.

Speaker Change: At quarter end, we had close to $106 million in cash and U S treasuries.

Francisco Gonzales: Our debt as you will know is permanent fixed rate bonds with the first maturity eight years away and capitalized interest from the July payment of next year.

Francisco Gonzales: The recurring cash flows from operations that we expect I'll be able to get our group in 2025.

Francisco Gonzales: We'll actually cover the expected net service a $5 6 million next year without having to touch the $4 million.

Francisco Gonzales: We put in place just in case, let me talk about the bond issuance.

Sky Harbor: Next slide.

Francisco Gonzalez: One more comment on our bonds. Our longest 30-year maturity due in 2054 traded recently to yield 5.75. A level commensurate with strong double B ratings and a testament of the great quality and demand for our bonds. As you all know, we have met funding gaps at the Obligated Group with new equity and feel very comfortable to project that after stabilization, the future debt service coverage ratios will exceed those that were forecasted at the time of the bond issuance two years ago. We continue on a path to seek investment-grade ratings next year as campuses ramp up with cash flow generation. We add additional accretive fields to the portfolio in a de-risked way, and we use interim financings in order to protect the current bondholders of the Obligated Group.

Sky Harbor: One more comment on our bonds, our longest 30 year maturity due in 2008 before traded recently to yield $5 75 as.

Francisco Gonzalez: One more comment on our bond. Our longest 30-year maturity bond maturing in 2054 recently traded to yield $5.75, a level commensurate with strong WB ratings and a testament to the great quality and demand for our bond. As you all know, we have met funding gaps at the Obligated Group with new equity and feel very comfortable to project that after stabilization. The future debt service coverage ratios will exceed those that were forecasted at the time of the Bonnie insurance a few years ago.

Sky Harbor: As ever commensurate with strong double b ratings.

Sky Harbor: A testament of the great quality and demand for our bonds as you. All know we have met funding gaps at the only a group with new equity I feel very comfortable to project debt after stabilization infusion debt service coverage ratios will exceed those.

Sky Harbor: We're forecasting at the time of the bond issuance three years ago.

Francisco Gonzalez: We continue on a path to seeking best and great ratings next year as campuses ramp up with cash flow generation. We are adding additional accretive fields to the portfolio in a de-risked way, and we use interim financings in order to protect the current board holders of the obligated group. If we need to make adjustments to our covenants in order to achieve triple A ratings, we will consider those seriously, given our goal to deliver this milestone in the fall of next year. Next slide.

Sky Harbor: We continue.

Sky Harbor: Path to seek investment grade ratings next year as campuses ramp up with cash flow generation.

Sky Harbor: Yes.

Sky Harbor: Additional accretive fields III portfolio the risk weight.

Sky Harbor: We use interim financings in order to protect the current board holders will be able to get a group.

Francisco Gonzalez: If we need to make adjustments to our covenants in order to achieve triple B ratings, we will consider those seriously, given our goal to deliver this milestone in the fall of next year. Next slide. This slide we have shown before, but wanted to reiterate that we continue to receive funding proposals of equity and debt to meet our growth capital needs, but we are being disciplined on our consideration of these. We seek growth capital that is trade accretive to our bondholders and earnings cash flow accretive to our equity stockholders. We have not sold any shares under our ATM program. Our conservative balance sheet and liquidity allow us to be deliberate. We are fully funded for the first 10 airports and can reach cash flow breakeven without any additional capital raise.

Sky Harbor: If we need to make adjustments to our covenants in order to achieve AAA ratings, we will consider dose seriously given our go to the northeast milestone in the fall of next year.

Sky Harbor: Next slide.

Sky Harbor: This slide we have shown before but wanted to reiterate that we continue to receive funding proposals for aggregate debt to meet our growth capital needs, but we are being disciplined on our considered ratio lease we seek growth capital that Australia, creative or bondholders and earnings cash flow accretive to our equity.

Francisco Gonzalez: This slide shows before a wide audience that we continue to receive funding proposals of equity and debt to meet our growth capital needs, but we are being disciplined in our consideration of these. We seek growth capital that is trade-accretive to our bondholders and earnings cash flow-accretive to our equity stockholders. We have not sold any shares under our ATM program. A concerted balance sheet on liquidity allows for delivery. We are fully funded for the first 10 airports and can reach cash flow break-even without any additional capital risk.

Sky Harbor: We have not sold any shares under our ATM program.

Sky Harbor: Our conservative balance sheet and liquidity allow us to be delivered.

Sky Harbor: We're fully funded 41 at airports and to reach cash flow breakeven without any additional capital rates of course, you will get accelerated growth.

Francisco Gonzalez: Of course, if we can accelerate growth with the right new funding, we will take advantage of opportunities as these arise. Back to Tal for a brief review of our areas of focus in the next twelve months.

Francisco Gonzalez: Of course, if we can accelerate growth with the right new funding, we will take advantage of opportunities as these arise. Now, back to Tao for a brief review of our areas of focus in the next 12 months.

Sky Harbor: Right near funding, we will take advantage of opportunities as these arise.

Speaker Change: Back to <unk>.

Sky Harbor: A brief review of our areas of focus in the next 12 months.

Tal Keinan: Thanks, Francisco. Our radar sweep looking forward is as follows: Site acquisition, as I said earlier, it's now about maximizing revenue capture. That means the most square footage on the best airfields in the country. Our site acquisition team has grown significantly. It'll continue to grow. We've got many airfields in the call it gestation process that will, you know, hopefully yield ground leases at those airports. But again, tier one airports is the focus. Development, we're moving to standardization and structuring ourselves for scale. That means very high run rate, parallel processing of many fields across the country at a time. Will and his growing team have done a lot of work to gear us up for really running this company at scale.

Speaker Change: Thanks Francisco so.

Tao: Thanks, Francisco. So, our radar sweep looking ahead is as follows. Site acquisition, as I said earlier, is now about maximizing revenue capture. That means the most square footage on the best airfields in the country. Our site acquisition team has grown significantly, and it will continue to grow.

Speaker Change: Our.

Francisco Gonzales: Radar sweep looking forward is as follows site acquisition as I said earlier its now about maximizing revenue capture that means the most square footage on the best airfields in the country by site acquisition team has grown significantly it'll continue to grow.

Tao: We've got many, many airfields in the, call it, gestation process that will hopefully yield ground leases at those airports. But again, Tier 1 airports are the focus and development. We're moving to standardization and structuring ourselves for scale. That means very high run rate, parallel processing of many, many fields across the country.

Francisco Gonzales: We've got many many airfields in the call it gestation process that will help.

Francisco Gonzales: Yields ground leases at those airports.

Francisco Gonzales: But again tier one airports is the focus development.

Francisco Gonzales: We're moving to standardization and structuring ourselves for scale.

Will: That means very high run rate parallel processing of many many fields across the country at a time will and his growing team have done a lot of work to get us up for really running this company at scale, we feel we're at a position where our unit economics are increasingly borne out we're comfortable with them, especially as.

Tao: At the same time, Will and his growing team have done a lot of work to gear us up for really running this company at scale. We feel we're in a position where our unit economics are increasingly borne out. We're comfortable with them, especially as we move to these higher revenue airfields, like the airfields in the New York area, for example. The development side of the business is really about coming to the development scale.

Tal Keinan: You know, we feel we're at a position where our unit economics are increasingly borne out. We're comfortable with them, especially as we move to these higher revenue airfields, like the airfields in the New York area, for example. The development side of the business is really about coming to develop at scale. On the leasing side, as I mentioned earlier, this is the year where we want to generate brand awareness. You know, we've been a very local story in each location that we're in, so far. It's time for us to become a national story, both in terms of the number of campuses that we have coming online, and also just recognition of the value that we bring to airport sponsors themselves, right?

Speaker Change: As we as we move to these higher revenue airfields like their fields in the New York area.

Speaker Change: For example.

Speaker Change: And.

Speaker Change: The development side of the business is really about coming to.

Speaker Change: Develop at scale.

Tao: On the leasing side, as I mentioned earlier, this is the year where we want to generate brand awareness. You know, we've been a very local story in each location that we're in so far. It's time for us to become a national story, both in terms of the number of campuses that we have coming online and also just recognition of the value that we bring to airport sponsors themselves, right? Increasingly, we're feeling pulled from the airport sponsors and that we have a differentiated offering that serves the business aviation community differently from what's been available up until now.

Speaker Change: On the leasing side.

As mentioned earlier this is the year, where we want to generate brand awareness, we've been a very local story in each location that we're in so far.

Speaker Change: It's time for us to become a national story, both in terms of the number of campuses that we have.

Speaker Change: Coming online.

Speaker Change: And also just recognition of the value that we bring to airport sponsors themselves right increasingly we're feeling pulls from the airport sponsors and that we have a differentiated offering that serves the business aviation community differently now from what's what's been available.

Tal Keinan: Increasingly, we're feeling pull from the airport sponsors, and that we have a differentiated offering that serves the business aviation community differently from what's been available up until now. Then operations, again, it's maniacal focus on the resident who has very particular needs that we feel we're meeting differently than any available offering to date. Again, the kind of measurable metric that we wanna focus on here is time to wheels up. You know, in addition to that, there are a bunch of unquantifiables that we know are important, like personalization, and keeping that safety standard at the top of the industry. With that, I think we can take it to questions.

Speaker Change: Up until now.

Tao: And then operations, again, it's maniacal focus on the resident who has very, very particular needs that we feel we're meeting differently than any available offering to date. And again, the kind of measurable metric that we want to focus on here is time to wheels up. And in addition to that, there are a bunch of unquantifiables that we know are important, like personalization and keeping that safety standard at the top of the industry. With that, I think we can take it to questions.

Speaker Change: And then operations again, it's maniacal focus on the resident, whereas very very particular needs that we feel we are meeting differently.

Speaker Change: And then any available offering.

Speaker Change: To date and again, the kind of measurable metric that we want to focus on here is.

Speaker Change: Is time to wheels up.

Speaker Change: And in addition to that there are bunch of unquantifiable that we know are important.

Speaker Change: <unk> like personalization and keeping us safely said it at the top of the industry.

Speaker Change: With that I think we can take it to questions. Yes. This concludes our prepared remarks, we now look forward to your questions. Operator. Please go ahead with you.

Francisco Gonzalez: Yes. This concludes our prepared remarks. We now look forward to your questions. Operator, please go ahead with the queue.

John: Yeah, this concludes our prepared remarks. We now look forward to your questions. Operator, please go ahead. Thank you. At this time, I would like to remind everyone, in order to ask a question, please submit it online using the webcast URL. We'll pause for just a moment to compile the Q&A roster.

Operator: Thank you. At this time, I would like to remind everyone, in order to ask a question, please submit it online using the webcast URL. We'll pause for just a moment to compile the Q&A roster. Thank you. First question comes from Phillip Crystal. The question reads as follows: I read that Sky is potentially pursuing legal action for the additional cost for Phoenix and Denver. Can you discuss any potential recovery for the additional capital outlay for those locations? Thank you.

Speaker Change: Thank you at this time I would like to remind everyone in order to ask a question. Please submit it online you think the webcast you are all well.

John: Thank you. At this time, I would like to remind everyone, in order to ask a question, please submit it online using the webcast URL. We'll pause for just a moment to compile the Q&A roster. Thank you. The first question comes from Philip Ristow. The question reads as follows. I read that Sky is potentially pursuing legal action for the additional cost of Phoenix and Denver. Can you discuss any potential recovery for the additional capital outlay for those locations? Thank you. Thank you, Phyllis Francisco.

Speaker Change: For just a moment to compile the Q&A roster. Thank you.

Speaker Change: First question comes from Philip pre Salt Lake.

Speaker Change: The question reads as follows I read that Sky is potentially pursuing legal action for the additional cost for Phoenix and Denver can you discuss any potential recovery for the additional capital outlay for those locations. Thank you.

Francisco Gonzalez: Thank you, Phillip, Francisco. First of all, thank you for your question and for your, you know, following Sky Harbour these past few years as an investor. Yes. We have engaged counsel, outside counsel to pursue claims against those parties that, you know, were related to these flawed designs that now we have addressed. You know, the outcome of that is too early to tell. You know, we know that some of the parties have obviously insurance behind them. You know, more on this in the near future. You know, we do expect some recovery, but unfortunately, it's not gonna be a full recovery of the increased cost that we have endured.

Francisco Gonzalez: Thank you, Philip. This is Francisco.

Francisco Gonzales: Thank you Phil It is Francisco first.

Speaker Change: First of all thank you for your question and for your following Scarborough.

Speaker Change: These past few years as an investor.

Francisco Gonzalez: First of all, thank you for your question and for your, you know, following Sky Harbour these past few years as an investor. Yes, so we have engaged counsel, outside counsel, to pursue claims against those parties that, you know, were related to these flood designs that now we have addressed, and, you know, the outcome of that it's too early to tell. You know, we know that some of the parties obviously have insurance behind them.

Speaker Change: Yes. So we are have engaged counsel outside counsel to pursue claims against those parties that.

Speaker Change: <unk> <unk> were related to these floor designs that now we have.

Speaker Change: Addressed and.

Speaker Change: The outcome of that.

Speaker Change: It is too early to tell we know that's the only parties have obviously a insurance behind them. So more on this in the near future. We do expect some recovery.

Francisco Gonzalez: So, you know, more on this in the near future. We do expect some recovery, but unfortunately, it's not going to be a full recovery of the increased costs that we have endured, but we are going to fully pursue our legal remedies under the contracts and laws in the various jurisdictions that we were impacted, such as Texas, Denver, and so on. Next question.

Speaker Change: But unfortunately, it's done it will be a full recovery.

Speaker Change: Of the eight increased cost that we have endured but we are going to fully pursue our.

Francisco Gonzalez: We are gonna fully pursue our, you know, our legal remedies under the contracts and laws in the various jurisdictions that we were impacted, Texas, you know, Denver, and so on. Next question.

Speaker Change: Our legal remedies.

Speaker Change: Under the contract loss in the various jurisdictions that we were impacted.

Speaker Change: Ex us.

Speaker Change: Remember.

Speaker Change: And so on.

Speaker Change: Next question.

Operator: Again, if you would like to ask a question, please submit it online using the webcast URL. The next question comes from Phillip Crystal. Can you comment on the non-rental revenues that you mentioned on 27 March? What is the potential for that segment over the next five years as a percentage of the overall revenue and margins? Thanks.

Speaker Change: Again, if you would like to ask a question.

Tal: Again, if you would like to ask a question, please submit it online using the webcast URL. The next question comes from Philip Bristol. Can you comment on the non-rental revenues that you mentioned on March 27th? What is the potential for that segment over the next five years as a percentage of the overall revenue and margins? Thank you.

Speaker Change: Have you submitted online through the web cast here al.

Speaker Change: The next question comes from Philip Bristol can.

Speaker Change: Can you comment on the non rental revenue stick you mentioned on March 27, what.

Philip Bristol: What is the potential for that segment over the next five years as a percentage of the overall revenue and margins. Thanks.

Tal Keinan: Yeah. Okay. This is Tal. We're seeing actually two questions, two similar questions on this. We'll address Alan Jackson as well, on the same one. Let me start with this. The focus of the company right now is on growth, putting more dots on the map and better dots on the map. Right? We're actually devoting relatively little bandwidth to the additional revenue streams. The idea being, we will circle back when we own these. Remember, there's a very deep moat, around us once we establish ourselves at an airport. We think there's a lot of time to come back and address these revenue streams. I can tell you what we have in place right now.

Speaker Change: Yes, okay.

Tal: Yeah, okay. This is Tal. We're seeing actually two questions on this, two similar questions on this, so we'll address Alan Jackson as well on this same one.

Speaker Change: This is tell we're seeing actually two questions two.

Speaker Change: Two similar questions on this so we'll address Allan Jackson as well.

Tal: So let me start with this. The focus of the company right now is on growth, putting more dots on the map and better dots on the map, right? So we're actually devoting relatively little bandwidth to the additional revenue streams, the idea being that we will circle back when we own them. Remember, there's a very deep sea around us once we establish ourselves at an airport. So we think there's a lot of time to come back and address these revenue streams. I can tell you what we have in place right now.

Speaker Change: On the same one so let me start with the focus of the company right now is on growth putting more dots on the map and better dots on the map right. So we're actually devoting relatively little bandwidth to the additional revenue streams of the idea of being we will circle back when when we own these.

Speaker Change: Remember theres, a very deep moat around us once once we establish ourselves at an airport. So we think theres a lot of time to come back and address these set of these revenue streams I can tell you what we have in place right now.

Tal: As everyone here knows, there are fueling revenues everywhere but Houston, which supplements our rental revenues. There are now aircraft detailing revenues as well. Remember, like fuel, we're really coupon clippers here, right? We never own the fuel. We don't provide the detailing services.

Tal Keinan: As everyone here knows, there are fueling revenues everywhere but Houston, which supplement our rental revenues. There are now aircraft detailing revenues as well. Remember, like fuel, we're really coupon clippers here, right? We never own the fuel. We don't provide the detailing services. We facilitate a third party providing those services, and we take a cut of the revenues. That will be the model for most, if not all, of the dozen or so additional revenue streams that we're looking to put in place. I'll say again, the focus right now primarily is on growth, putting more dots on the map. Once you own those, you can come back and push those beachheads to, you know, to bring in additional revenues.

Speaker Change: As everyone here knows there are fueling revenues ever, but but Houston, which supplements our rental revenues. They are now aircraft detailing revenues as well remember like fuel. We are we're really coupon clippers here right. We can ever on the fuel we don't provide the detailing services weeks.

Tal: We facilitate, a third party providing those services, and we take a cut of the revenues. And that will be the model for most, if not all, of the dozen or so additional revenue streams that we're looking to put in place. But I'll say again, the focus right now is primarily on growth, putting more dots on the map. Once you own those, you can come back and push those beachheads to bring in additional revenue.

Speaker Change: We facilitate.

Speaker Change: A third party, providing those services and we take a cut at the of the revenues and that will be the model for most if not all of the dozen or so additional revenue streams that we're looking to put in place.

Speaker Change: I'll say again the focus right now primarily is on growth putting more dots on the map once you're all knows you can come back and push those beachheads.

Speaker Change: We had to bring in additional revenues.

Speaker Change: Okay.

Operator: The next question comes from Greg Gibbs. Do you think you can achieve over 100% occupancy at other campuses, or is it more of a one-off?

The next question comes from Greg Davis.

Tal: The next question comes from Greg Gibbis. Do you think you can achieve over 100% occupancy at other campuses or is it more of a one-off? Yeah, Greg, thanks for that question. No, that's definitely something that we'll do everywhere going forward.

Speaker Change: Do you think you can achieve over 100% occupancy at other campuses or is it more of a one off.

Tal Keinan: Yeah, Greg, thanks for that question. No, that's definitely something that we'll do everywhere going forward. I don't remember if we discussed this in the last call, but our prototype hangar has evolved on the basis of the 2021 edition of the NFPA 409 fire code for aviation hangars. We're going from a floor layout of just under 12,000 sq ft to a floor layout of about 34,000 sq ft. That 34,000 sq ft hangar can be demised in a way that provides two fully private bays that are the equivalent of our current hangars, right? We could do that. Or leave them undemised, which leaves you a much more stackable format, right?

Greg: Yes, Greg Thanks for that question.

Tal: Yeah, Greg, thanks for that question. No, that's definitely something that we'll do everywhere going forward. I don't remember if we discussed this in the last call, but our prototype hangar has evolved on the basis of the 2021 edition of the NFCA 409 fire code for aviation hangars. So we're going from a floor layout of just under 12,000 square feet to a floor layout of about 34,000 square feet. That 34,000 square foot hangar can be demised in a way that provides for fully private bays that are the equivalent of our current hangars, right?

Greg: Definitely something that we'll do.

Greg: Everywhere going forward the.

Speaker Change: I don't remember if we discussed this in the last last call, but our prototype hanger.

Speaker Change: Has evolved on the basis of the 2021 addition of the NFPA four nine fire code for aviation hangers.

Speaker Change: So we're going from a floor layout of just under 12000 square feet.

Speaker Change: Two a floor layout of about 34000 square feet.

Speaker Change: That's 34000 square foot hangar can be demise in a way that provides two.

Speaker Change: Fully private phase that are the equivalent of our current anchors right. We can do that.

Tal: We could do that or leave them undemised, which leaves you a much more stackable format, right? You can achieve higher revenue density in that 34,000 square foot format than you can in the 12,000 square foot format. So not only is it applicable to other campuses, but I expect occupancy to be higher on the future campuses than on the current campus.

Speaker Change: Or leave them undermined.

Speaker Change: Which leaves you a much more stackable format right. You can you can achieve higher revenue density in that 34000 square foot format than you can in the 12000 square foot format. So not only is that applicable to other campuses.

Tal Keinan: You can achieve higher revenue density in that 34,000 sq ft format than you can in the 12,000 sq ft format. Not only is it applicable to other campuses, I expect actually occupancy to be higher on the future campuses than on the current campuses.

Speaker Change: I expect that actually occupancy to be higher.

Speaker Change: Future campuses and then on the current campuses.

Speaker Change: Okay.

Operator: Next question comes from the line of Christine Thomas. What is the current trend in construction for sq ft cost? Are there benefits to scale as you add hangars to a bigger installed base?

Speaker Change: First question comes from the line of Kristina.

Will: This question comes from Christine Thomas. What is the current trend in construction per SQF cost? Are there benefits to scale as you add hangars to a bigger installed base?

Speaker Change: Please.

Kristina: What is the current trend in construction for <unk> costs.

Speaker Change: Their benefits benefits to scale as you add <unk> to a bigger installed base.

Speaker Change: Okay.

Will Whitesell: Thanks for the question, Christine. Currently in the market right now, we see construction costs on most of our campuses between $240 and just north of $300 a sq ft. I would say that some of the inflationary pressures, meaning escalation as we look at projects in our pipeline that are 12 months out, is starting to settle down a little bit from what was anywhere from 6% to 10% to a more normal range of 3% to 5% on a per annum basis. I'm sorry, I don't know where that.

Speaker Change: Thanks for the question Christine.

Will: Thanks for the question, Christine. Currently, in the market right now, we see construction costs on most of our campuses between $240 a square foot and just north of $300 a square foot. I would say that some of the inflationary pressures, meaning escalation as we look at projects in our pipeline that are 12 months out, are starting to settle down a little bit from what was anywhere between 6% to 10% to a more normal range of 3% to 5% on a per annum basis. Goodbye.

Speaker Change: Currently in the market right now we see construction cost on most of our campuses between $240 a square foot to just north of $300 a square foot I would say that some of the inflationary pressures, meaning escalation as we look at projects in our pipeline that are 12 months.

Speaker Change: <unk> is starting to settle down a little bit from what was anywhere to 6% to 10%.

Speaker Change: To a more normal range of 3% to 5% on a per annum basis.

Speaker Change: Okay.

Speaker Change: I'm, sorry, I don't know where the.

Operator: The next question comes from the line of Matthew Howlett. Are you still on pace to sign 3 ground leases in H2 2024 and 6 in 2025? If so, will all be tier one locations?

Speaker Change: The next question comes from the line of Matthew hold at Argos skill on face to face pre ground leases into H 'twenty four and six in 'twenty quantified if so they'll all be tier one locations.

Tal: The next question comes from Valan Afmati. Hold on. Are you still on pace to sign three ground leases in 2H24 and six in 2025? If so, will all be Tier 1 locations? Yeah, thanks, Matt. This is Tal.

Tal Keinan: Yeah, thanks, Matt. This is Tal. Yes, we're on pace. Again, our ambition is actually to exceed guidance. We'll see. You'll be the first to know. We won't be bashful as these leases come in. In terms of targeting, you know, we have over 100 airports that are in process that we're targeting. We will definitely take what comes. The focus is on the highest or the top, you know, tier one airports where we see the highest revenues. That said, you know, you're familiar with the unit economics, even on the rest of the airports, they're all attractive. And again, to the extent that the, you know, capital won't be a constraint going forward, we see no need to turn down or other business.

Yeah. Thanks, Matt. This is Tao, yes, we were on pace.

Tal: Yes, we're on pace, and our ambition is actually to exceed that. We'll see; we won't be bashful as these leases come in. In terms of targeting,

Tal: Yeah, thanks, Matt. This is Tal.

Speaker Change: Our ambition is actually to exceed guidance.

Tal: Yes, we're on pace. Our ambition is actually to exceed that. We'll see.

Tal: We won't be bashful as these leases come in. In terms of targeting, you know, we have over 100 airports that are in the process that we're targeting. We will definitely take what comes.

Speaker Change: We'll see you'll be with that.

Speaker Change: We won't be bashful as these leases come in in terms of targeting.

Speaker Change: We have over 100 airports that are in process that we're targeting we will definitely take what comes the focus is on the highest.

Tal: The focus is on the highest, you know, Tier 1 airports where we see the highest revenues. That said, you're familiar with the unit economics even on the rest of the airports. They're all attractive.

Speaker Change: Tier one airports, where we we see the highest revenues that said.

Speaker Change: You are familiar with the unit economics, even on.

Speaker Change: The rest of the airports, they're all all attractive and again to the extent that the capital is won't be a constraint going forward.

Tal: And again, to the extent that capital won't be a constraint going forward, we see no need to turn down other businesses. So it's kind of full steam ahead right now. But I think you'll notice a significant skew towards, yeah, the best airports in the country. That is where 80% of the focus is today.

Speaker Change: We see no need to turn down.

Speaker Change: Other other business. So it is kind of full full steam ahead, right now, but I think youll notice a significant skew towards yes.

Tal Keinan: It's kind of full steam ahead right now. I think you'll notice a significant skew towards, yeah, the best airports in the country. That is where 80% of the focus is today.

Speaker Change: The best airports in the country that is where 80% of the focus is today.

Speaker Change: Okay.

Operator: Please wait for a moment while we compile the Q&A roster. Thank you. The next question comes from Peyton Skill. Guidance on full occupancy at SJC.

Speaker Change: Please wait for a moment, while we all while we compile the Q&A roster. Thank you.

John: Please wait for a moment while we compile the Q&A roster. Thank you. The next question comes from Peyton Skill: Guidance on full occupancy at SJC.

Speaker Change: The next question comes from patrons skill.

Speaker Change: Guidance and full occupancy at SAIC.

Tal Keinan: Yeah. We good? Yeah. All right. Thank you for the question, Peyton. We actually currently have the entire hangar under LOI. You know, how much of that is actually going to materialize as a full lease, we'll know in the coming, I'd say month, or so. Our internal target is midsummer to have that hangar full. Right now it looks like we might be on pace to beat that. The entire hangar. Actually, we're about 105% occupancy in the hangar under LOI currently. If we can convert that into leases, you know, we should know that in the next three or four weeks.

Speaker Change: Yes.

Francisco Gonzalez: Thank you for the question, Peyton. We actually currently have the entire hangar under LOI. You know, how much of that is actually going to materialize as a full lease we'll know in the coming, I'd say, month or so. Our internal target is mid-summer to have that hangar full. Right now, it looks like we might be on phase two to beat that. The entire hangar, actually, we're at about 105% occupancy in the hangar currently. If we can convert that into leases, you know, we should know that in the next three or four weeks. Let me add that San Francisco and San Jose are already at the current level.

Speaker Change: Yeah, alright. Thanks, Thank you for the question Peyton.

Speaker Change: We we actually currently have the entire hanger under LOI.

Speaker Change: How much of that is actually going to materialize as a as a full lease we'll know in the coming.

Speaker Change: It's a month or so our internal target is mid summer to have that anchor full right now it looks like we might be on pace to do beat that the entire aggregate actually were about 105% occupancy in the hanger is under LOI. Currently if we can convert that into leases. Yes. We should note that next three or four weeks.

Francisco Gonzalez: Let me add. It's Francisco. San José, already at the current level, is cash accretive. Obviously, as it gets fully leased, it will contribute, you know, expected to contribute north of $1.5 million of incremental cash flow, on a consolidated basis. We're looking forward to it reaching full occupancy in the coming weeks and months.

Francisco Gonzalez: Let me add, San Francisco, San Jose is already cash accretive, and obviously, as it gets fully leased, it will contribute north of, expected to contribute north of a million and a half of incremental cash flow on a constant basis, so we're looking forward to it reaching full occupancy in the coming weeks and months.

Speaker Change: Let me add Francisco, a federal say aim.

Speaker Change: Already at the current level.

Speaker Change: It is cash accretive and obviously as it gets fully leased.

Speaker Change: Contribute.

Bill North of expected to achieve.

Speaker Change: To contribute north of.

Speaker Change: Amelia really half.

Speaker Change: Of incremental cash flow a lack oscillate basis. So we're looking forward to two eight reaching its local currency and becoming.

Speaker Change: Which amongst.

Speaker Change: Okay.

Operator: Question comes from Christine Thomas. Why does an airport sponsor choose Sky Harbour over other providers? How many other providers generally compete for each airport?

Speaker Change: <unk> comes from Christine's Thomas why this in airports sponsored show Sky Harbor offer other providers, how many other providers generally.

Tal: The question comes from Christine Thomas, why does an airport sponsor choose Sky Harbour over other providers? How many other providers generally compete for each airport?

Speaker Change: Compete for each airport.

Tal Keinan: Yeah. Thanks for the question, Christine. It's Tal. So I think it depends on the airport, depends on the situation. You know, one of the things that we've learned over the years doing this is no two airports are alike. You know, we at the beginning, I think, try to find template solutions to getting onto airports. That's not really how it works. I'll give you an example, though, of an advantage. If you take an airport that's served today by two or three FBOs, and remember, the main business of the FBOs is fueling, and on certain airports it's really dominated by transient fueling versus base tenants.

Speaker Change: Yeah. Thanks, Thanks for the question Christine itself.

Tal: Yeah, thanks for the question, Christina Stout. So I think it depends on the airport, it depends on the situation. One of the things we've learned over the years doing this is no two airports are alike. We, at the beginning, I think tried to find template solutions to getting onto airports. But that's not really how it works.

Speaker Change: Yeah.

Speaker Change: So I think it depends on the airport depends on the situation and one of the things that we've learned over the years doing this is there's no two airports are alike.

Speaker Change: Yes.

Speaker Change: We at the beginning I think tried to find template solutions to getting onto airports.

Speaker Change: That's not really how it works I will give you. An example, though of an advantage. If you if you take an airport that serve today by two or three F. B o's.

Tal: I'll give you an example of an advantage: if you take an airport that's served today by two or three FBOs, remember, the main business of the FBOs is fueling, and at certain airports, it's really dominated by transient fueling versus base tenants. Unless those FBOs are operating at full capacity, can't expand, can't add personnel or equipment to handle more volume, then adding an additional FBO primarily cannibalizes the business of the existing FBOs, which is not necessarily good for the airport, and it hurts their tenants, and there is a responsibility of the airport sponsor toward its existing tenants. Whereas adding a Sky Harbour base to an airport doesn't cut into What is that good for?

Speaker Change: And remember the main business of the F. B Ost is fueling.

Speaker Change: And on certain airports, it's really dominated by transient fueling versus based tenants.

Tal Keinan: Unless those FBOs are operating at full capacity, can't expand, can't add, you know, personnel or equipment to handle more volume, then adding an additional FBO primarily cannibalizes the business of the existing FBOs, which is, you know, not necessarily good for the airport, and it hurts their tenants, and there is a, you know, responsibility of the airport sponsor toward its existing tenants. Whereas adding a Sky Harbour base to an airport doesn't cut into the transient fueling business at all for the FBOs, and brings incremental hangar capacity to those airports. What is that good for? You know, I think on the weaker side, it's an economic development boost to these airport sponsor jurisdiction. On the maybe stronger side is ad valorem tax receipts for that jurisdiction, right?

Speaker Change: And less of those F. B o's are operating at full capacity can't expand caridad personnel or equipment to handle more volume than adding an additional spo, primarily cannibalize the business of the existing Sps, which is not.

Speaker Change: Not necessarily good for the airport and it hurts their tenants and there is a real responsibility.

Speaker Change: The airport sponsored toward its existing tenants.

Speaker Change: It is adding a sky harbor base to an airport doesn't cut into the transient fueling visits at all for the <unk>.

Speaker Change: And brings incremental hangar capacity those airports what is that good for <unk>.

Tal: I think on the weaker side, it's an economic development boost to the airport sponsor jurisdiction, and on the stronger side is ad valorem tax receipts for that jurisdiction. Many states in the country charge an ad valorem tax on aircraft, which can be considerable, and having those aircraft based at the airport is a direct driver of tax revenue, which really eclipses all other revenue sources for airport sponsors, right? I mean, rent, you know, fuel flowage fees, and other sources of revenue are going to fall way short in most jurisdictions that have avalanche packs.

Speaker Change: I think on the on the weaker side, it's an economic development boost to these airports sponsor.

Speaker Change: Jurisdiction.

Speaker Change: On the maybe stronger side.

Is AD valorem tax receipts for that jurisdiction right. Many states in the country charge in that block tax on aircrafts, which can be considerable and having those aircraft base at the airport.

Tal Keinan: Many states in the country charge an ad valorem tax on aircraft, which can be considerable, and having those aircraft based at the airport is a direct driver of tax revenue, which really eclipses all other revenue sources for airport sponsors, right? I mean, rent, you know, fuel flowage fees, and other sources of revenue are gonna fall way short in most jurisdictions that have ad valorem tax. They're gonna fall way short of ad valorem tax receipts. Look, there are a lot of other reasons that airport sponsors might be interested in a Sky Harbour.

Speaker Change: As a direct driver of tax revenue, which which makes.

Speaker Change: Really eclipses all other revenue sources.

Speaker Change: For airport sponsors right Brett.

Speaker Change: Rent.

Speaker Change: Fuel flow its fees and other sources of revenue are are going to fall way short in most most jurisdictions that have bipolar facts you can fall way short of.

Tal: They're going to fall way short of ad valorem tax receipts. So, and look, there are a lot of other reasons that airport sponsors might be interested in Sky Harbour. Again, I don't think there's one sweeping statement we can make about that, but maybe take that as an example of, you know, the type of consideration an airport sponsor might have.

Speaker Change: Of AD valorem tax receipts. So look there are a lot of other.

Speaker Change: Reasons at airport sponsors might be interested in the Sky Harbor of better together I don't think there's one sweeping statement, we can make about that but maybe.

Tal Keinan: I don't think there's one sweeping statement we can make about that, but maybe take that as an example of, you know, of the types of consideration an airport sponsor might have.

Speaker Change: Maybe take that as an example.

Speaker Change: Some of the types of consideration therefore sponsor might have.

Speaker Change: Okay.

Operator: The next question comes from the line of Matthew Howlett. Are you still on pace to sign 3 ground leases in 2024 and 6 in 2025? If so, will all be tier one locations?

Speaker Change: The next question comes from the line of marquee held at.

John: The next question comes from Matti Halded. Are you still on pace to sign three ground releases in 2024 and six in 2025? If so, will all be Tier 1 vacations? Yes, I think we already addressed that question, so maybe we can skip to the next.

Speaker Change: Are you still on pace to sign three jounce leases in 2024 and six in 2025, if solid, albeit tier one locations.

Tal Keinan: Yes. Sorry, I think we already addressed that question, so maybe we can skip to the next.

Speaker Change: Oh, yes, sorry, I think we already addressed that question. So maybe we can skip to the next.

John: Yes, sorry, I think we have already addressed that question, so maybe we can skip to the next one.

Speaker Change: Okay.

Operator: The next question comes from the line of Alan Jackson. As you begin to establish the national brand, do you anticipate more competition emerging? Does Sky Harbour have a first-mover advantage as compared to future competitors that can insulate the company from potential rent reductions?

The next question comes from the line of Ali Jackson as you begin to established a national brand DNA.

Tal: The next question comes from Alan Jackson. As you begin to establish the national brand, do you anticipate more competition emerging? Does Sky Harbour have a first-mover advantage as compared to future competitors that can insulate the company from potential rent reductions?

Speaker Change: Dissipate more competition emerging.

Speaker Change: The Sky Harbor have east first mover advantage as compared to future competitors that can insulate the company from potential rent reductions.

Tal Keinan: Yeah, Alan, it's Tal. I think the short answer is yes, right? We expect competition to come into our space. Yeah. Right now nobody else is doing this. The unit economics are clear to everybody on the call. We do expect competition to come in. And we also do think that there is a first-mover advantage here, and I think it comes in a few different forms. One example would be on the site acquisition side, where, you know, today Sky Harbour is in process, like I said, in a very large number of airports across the country. No two airports are alike. We sought and failed to find a template solution to site acquisition. It's much more art than science.

Speaker Change: Yeah, Alan it's it's tell.

Tal: Yeah, Ellen, it's Tal. I think the short answer is yes, right? We expect competition to come into our space, right? Right now, nobody else is doing this. The unit economics are clear to everybody on the call.

Speaker Change: I think the short answer is yes, right, we expect competition to come into our space you're right right now nobody else is doing this.

Speaker Change:

Speaker Change: The unit economics are clear to where everybody on the call. We do expect competition to come in.

Tal: We do expect competition to come in, and we also do think that there is a first mover advantage here, and I think it comes in a few different forms.

Speaker Change: And we also do think that there is a first mover advantage here and I think it comes in in a few different forms. One example would be on the site acquisition side, where you know today.

Tal: One example would be on the site acquisition side, where today Sky Harbour is in the process, like I said, in a very, very large number of airports across the country. No two airports are alike, so we sought and failed to find a template solution for site acquisition.

Speaker Change: Sky Harbor is in is in process like I said in a very very large number of airports across the country.

Speaker Change: No two airports are like we saw it and failed to find a template solution to site acquisition, it's much more art than science and we have what we think is the best team in the country.

Tal: It's much more art than science, and we have what we think is the best team in the country doing this today. We do think that it's something that's going to be difficult to emulate. In addition, I think many on the call will appreciate, Sky Harbor is structured in all aspects of the business for this specific mission. And, you know, although it's not, you know, some high-tech company with a patent protecting it; there are a lot of moving parts of the business, right?

Tal Keinan: We have what we think is the best team in the country doing this today. We do think that that's something that's gonna be difficult to emulate. In addition, again, I think many on the call will appreciate, Sky Harbour is structured in all aspects of the business for this specific mission. You know, although it's not, you know, this is not some high-tech company with a patent protecting it. There are a lot of moving parts of the business, right? From the way we finance ourselves to the way we staff ourselves to our methodologies. This is not copy-paste from any other industry. So we do see real benefit to being the first mover in this space.

Speaker Change: Doing this today, we do think that that's something that's going to be difficult to to emulate.

Speaker Change: In addition.

Speaker Change: Again, I think many many of the call will appreciate your Sky Harbor is structured in all aspects of the business for this specific mission.

Speaker Change: And although it's not.

Speaker Change: This is not some high tech company with a patent protecting.

Tal: From the way we finance ourselves, to the way we staff ourselves, to our methodologies, this is not copy-paste from, you know, any other industry. So we do see a real benefit to being the first mover in this space. That said, you know, we don't expect to be alone in this space forever. I mean, that will happen.

Speaker Change: Protecting it there are a lot of moving parts of the business right from the way, we finance ourselves should wait staff ourselves to our methodologies.

Speaker Change: This is not copy paste from from any other industry.

Speaker Change: So we do we do see real benefit to being the first mover in this space that said.

Tal Keinan: That said, you know, we don't expect to be alone in this space forever. I mean, that will happen.

We don't expect to be alone in this space forever, I mean that that will happen.

Speaker Change: Okay.

Operator: Question comes from Peyton Skill. What is the dollar per gallon difference between fueling with Sky H and fueling at a neighboring FBO?

Speaker Change: Question comes from Peyton skill.

Tal: The question comes from Peyton Skill. What is the dollar per gallon difference between fielding with Sky H and fielding at a neighboring FBO?

Peyton skill: What is the dollar per gallon difference between fueling with Sky H and fielding at the neighboring F. B O.

Tal Keinan: I think two things that we share in common with the FBOs. Number one is we bundle rent and fuel. We encourage our prospective residents to look at total basing costs in order to kind of make an apples-to-apples decision. We make the vast majority of our revenue from rent. The FBOs make the vast majority of their revenues from fuel, but they are bundled. The second is that we negotiate with individual tenants, right? Again, we're not, you know, we don't have thousands of residents. We are talking about, you know, major corporations or very high net worth individuals as tenants. Everybody is on some negotiated rate, right? We have tenants that prefer a lower rent and a higher fuel margin.

Tal: It's tell we So I think two things that we share in common with the FBOs. Number one is that we bundle rent and fuel. We encourage our prospective residents to look at total base costs in order to kind of make an apples-to-apples decision. We make the vast, vast majority of our revenue from rent. The FBOs make the vast majority of their revenues from fuel, but they are bundled. The second is that we negotiate with individual tenants. Right?

Peyton skill: It's tell.

Peyton skill: We.

Peyton skill: So I think two things that we share in common with the F. B O S. Number one is we bundle rent and fuel.

Peyton skill: We encourage our prospective residents to look at total basing cost in order to kind of make.

Peyton skill: Make an apples to apples decision.

Peyton skill: We make the vast vast majority of our revenue from rent the FCS make the vast majority of their revenues from fuel, but they are bundled.

Peyton skill: The second is that we we negotiate with individual tenants right again, we're not we don't have thousands of.

Tal: Again, we're not talking about thousands of residents, and we are talking about, you know, major corporations or very high net worth individuals as tenants. Everybody is on some negotiated rate, right? We have tenants that prefer a lower rent and higher fuel margin. We have, you know, tenants who prefer the opposite. So I don't think there's any...

Peyton skill: Our president's.

And we are talking about major corporations are very high net worth individuals.

Peyton skill: Tenants everybody is on some negotiated rate right, we have tenants that prefer a lower rent and higher fuel margin. We have tended to prefer the opposite so I don't think there is there is any.

Tal Keinan: We have, you know, tenants who prefer the opposite. I don't think we can say a specific spread on dollars per gallon between Sky Harbour and an FBO. I think we could just say in general, our rents are much higher than an FBO's rents. Our fuel prices are lower than an FBO's fuel prices.

Peyton skill: I don't think we can say specific spread on a dollar per gallon between Sky Harbor and in Spo I think we could just say in general our rents are much higher than in spo as rents are fuel prices are lower than F. U S fuel prices.

Tal: I don't think we can say a specific spread on dollars per gallon between Sky Harbour and an FBO. I think we could just say, in general, our rents are much higher than an FBO's rents, and our fuel prices are lower than an FBO's fuel prices.

Peyton skill: Okay.

Operator: The next question comes from Matthew Howlett. Can you give us an update on the warrants? How should investors think about them? They can be a significant source of capital to the company. You can call them when the stock is $18 for a certain period of time.

Speaker Change: The next question comes from Matthew Haulage can you give us an update on the white.

Francisco Gonzalez: The next question comes from Matthew Hollett: can you give us an update on the warrants? How should investors think about them? They can be a significant source of capital to the company. You can call them when the stock is $18 for a certain period of time. Yes, thanks Matt for the question.

Speaker Change: How should investors think about them they can be a significant source of capital to the company.

Speaker Change: You can call them when the stock is $18 for a certain period of time.

Francisco Gonzalez: Yes. Thanks, Matt, for the question. Yes, you know, as many of you know, we inherited the warrants at the time of the de-SPAC. Then also we provided some warrants in our last PIPE that are, you know, within the same CUSIP and they're registered, so they all basically came together in the same trading. You know, we get this question a lot. You know, yes, they have been a source of capital already. I think we mentioned in the last webcast that we have gotten about $3 million of proceeds from the exercise of warrants, and obviously something that we will continue to welcome.

Speaker Change: Yes.

Francisco Gonzalez: Yes, thanks Matt for the question. Yes, you know, as many of you know, we inherited the warrants at the time of the VSPAC, and then also we provided some warrants in our last pipe that are, you know, within the same QCIP and the ratio, so they all basically came together in the same trading. You know, we get this question a lot, and you know, yes, they have been a source of capital already.

Speaker Change: Thanks, Matt for the question.

Speaker Change: Yes, yes, you many of you know we inherited it.

Speaker Change: The warrants anytime of the leaseback.

Speaker Change: And then also we provided some warrants.

Speaker Change: Our last five.

Speaker Change: Is that are.

Speaker Change: Within the St CUSIP.

Speaker Change: And the ratio so they all basically.

Speaker Change: He came together in the same trading.

Speaker Change: We get this question a lot yes, they have been a source of capital already I think we mentioned the last.

Francisco Gonzalez: I think we mentioned in the last webcast that we've gotten about $3 million in proceeds from the exercise of warrants, and obviously, something that we will continue to welcome. Yes, you're right in your question that as for the terms of the warrants, I think this is pretty standard for these PAC warrants, that they have a cap of $18, at which time the company can basically, you know, enforce a cold exercise of the warrants.

Speaker Change: A webcast that we've got it.

Speaker Change: About eight.

Speaker Change: $3 million.

Speaker Change: Of.

Speaker Change: Proceeds from the.

Speaker Change: Exercise of warrants.

Speaker Change: And obviously something that that we will come to you to welcome yes, Youre right in your question that aspirin in terms of the I think this is pretty standard.

Francisco Gonzalez: Yes, you're right in your question that as per the terms of the I think this is pretty standard for de-SPAC warrants that they have a we see it as a cap at $18, at which time the company can basically you know force a call exercise of the warrants. You know we have no current plans to do anything with the warrants. You know we continue to monitor them and so on. We see them as a way for people who are interested in our stock to also take a long position on the company. Again from our perspective you know we probably let the market kinda like dictate that.

Speaker Change: For these pack warrants that.

Speaker Change: We have.

Speaker Change: See it as a cap at $18, which time the company can basically.

Speaker Change: Paint force of coal.

Speaker Change: The exercise of the warrants.

Francisco Gonzalez: You know, we currently have no plans to do anything with the warrants. You know, we continue to monitor them and so on, and we see them as a way for people who are interested in our stock to also take a long position in the company. But again, from our perspective, we probably let the market kind of dictate that, and we see, you know, as people decide to exercise them now and in the future as a source of capital, but obviously at the margin.

Speaker Change: We we have no.

Speaker Change: Currently any plans to do anything with the warrants we continue to monitor them.

Speaker Change: So on.

Speaker Change: And we.

Speaker Change: We see their muscle way for people interested in even in our stock to also it took a long position on the company, but again from our perspective.

Speaker Change: We probably led to market colleague they take that and we see it because people decided to exercise them not only to future.

Francisco Gonzalez: We see, you know, as people decide to exercise them now into the future, as a source of capital, but obviously at the margin. Now, as time goes by and our stock performs, yes, there'll come a time where, as we get close to expiration, that warrant holders will then have the opportunity to exercise. Given the amount of warrants we have outstanding, it will be a material amount of proceeds coming to the company at that time. Operator, there seems not to be any additional questions. Thank you all for joining us this afternoon and for your interest in Sky Harbour.

Speaker Change: As a social capital.

Speaker Change: But obviously at the margin.

Francisco Gonzalez: Now, as time goes by and our stock performs, yes, there'll come a time when, as we get closer to expiration, warrant holders will then have the opportunity to exercise their warrants, and then given the amount of warrants we have outstanding, it will be a material amount of proceeds coming to the company at that time.

Speaker Change: Now as time goes by and the stock.

Speaker Change: <unk>, yes, it will come a time, where as we get closer to exploration that warrant holders will have the opportunity to exercise and that given the amount of ones that we have outstanding it will be a material amount of proceeds coming to the company at that time.

Speaker Change: Okay.

Speaker Change: Operator are there seems not to be any additional questions.

John: Operator, there seem not to be any additional questions. So thank you all for joining us this afternoon and for your interest in Sky Harbour. Thank you. Ladies and gentlemen, this concludes today's conference call.

John: Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect. Thank you for watching!

Speaker Change: So thank you all for joining us this afternoon and for your interest in Scarborough.

Operator: Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Speaker Change: Thank you ladies and gentlemen. This concludes today's conference call. Thank you for your participation you may now disconnect.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Q1 2024 Sky Harbour Group Corp Earnings Call

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