Filing summary
Entity note: The supplied filing is Yellowstone Acquisition Company’s Form 10-Q, not a filing for Sky Harbour Group Corp. It covers the quarter ended September 30, 2020; the financial statements report activity from the company’s August 25, 2020 inception through September 30, 2020.
Business context
Yellowstone was a newly formed blank-check company seeking a business combination. It had not begun operations or generated operating revenue by September 30, 2020. The IPO and related transactions described below occurred after the reporting date.
Financial results and liquidity
| Metric | Amount or status |
|---|---|
| Revenue | None; the company expected no operating revenue before a business combination. |
| General and administrative costs / net loss | $2,178 for the inception-to-September 30 period. |
| Net loss per share | Reported as $(0.00), basic and diluted. |
| Cash and total assets | $27,580 cash; $233,503 total assets, including $205,923 in deferred offering costs. |
| Liabilities | $210,681 total current liabilities: $60,681 accounts payable and accrued expenses, and a $150,000 sponsor note. |
| Stockholders’ equity | $22,822. |
| Cash flow | $2,178 used in operating activities; $29,758 provided by financing activities; cash increased by $27,580. |
| Margins and operating cash generation | Not meaningful for this pre-operating blank-check company; no operating revenue was reported. |
The sponsor note was non-interest-bearing and unsecured, and was repaid on October 26, 2020. Management said available working capital was expected to cover needs through the earlier of a business combination or one year from the filing.
Material developments and comparison
No comparable prior-period results are provided because the company was formed during this reporting period. On October 26, 2020, Yellowstone completed an IPO of 12.5 million units at $10 each, raising $125 million gross, and sold 7.5 million private placement warrants for $7.5 million. It placed $127.5 million in trust. On December 1, the underwriters exercised part of the over-allotment option for 1,098,898 additional units; the filing reports total trust funds of approximately $138.7 million after this exercise. The sponsor also bought 219,779 additional private placement warrants. These are subsequent events, not September 30 balances.
Outlook, risks and other items
- The company had 15 months from the October 26 IPO closing, through January 26, 2022, to complete a business combination; otherwise it was required to cease operations, redeem public shares from trust (subject to stated terms), and liquidate.
- Management noted COVID-19 could adversely affect the company’s financial position, operations, or target search, but said the impact was not readily determinable. The statements include no adjustments for that uncertainty.
- Trust funds were intended for a business combination and held in short-term U.S. government securities or qualifying money market funds. The company reported no material market or interest-rate exposure and no off-balance-sheet arrangements.
- Potential risks include failure to complete a business combination, creditor claims against trust assets, and reliance on sponsor funding. Sponsor reimbursements for business-related out-of-pocket costs had no stated cap; possible working-capital loans could be convertible into warrants.
- The company reported no legal proceedings and no material changes to the IPO prospectus risk factors. Management concluded disclosure controls were effective as of September 30, 2020.
Important facts for investors to verify
- Confirm the intended issuer: this filing is for Yellowstone Acquisition Company, not Sky Harbour Group Corp.
- Check post-quarter IPO, partial over-allotment, trust funding, and founder-share changes against subsequent filings; these were not reflected in the September 30 balance sheet.
- Review the IPO prospectus for redemption mechanics, liquidation terms, sponsor indemnity limitations, underwriting fees, and dilution from founder shares and warrants.
- Assess whether Yellowstone identified and completed a qualifying business combination before its stated deadline.