In December 2023, Air Wisconsin entered into a sales-type lease for one of its aircraft that was previously treated as an operating lease since September 2022. The term of that lease is 36 months, with monthly payments of $64 that commenced in December 2023 and end in November 2026. If the lessee is not in default at the end of the lease term, the lessee may purchase the aircraft for a minimal amount at that time. Air Wisconsin has not provided a residual value guarantee as part of that lease.

The ASU No. 2016-13, Financial Instruments- Credit Losses: Measurement of Credit Losses on Financial Instruments (“ASC 326”) requires assessment of the net investment in the lease as of the commencement date. Based on the expected payments due under the sales-type lease, and using an implicit rate of 12.6%, Air Wisconsin determined the initial net investment in the lease to be $2,132 The Company monitors publicly available information regarding the credit worthiness of the non-U.S. governmental agency in custody of the aircraft and the aircraft serves as collateral for the lease. Management determined that a credit loss reserve of $743 and $333 was appropriate under ASC 326 as of December 31, 2025 and December 31, 2024, respectively. The change in the credit loss reserve for the year ended December 31, 2025 of $410 over the previous year, reflects missed lease payments and changes in the publicly available creditworthiness of the non-U.S. governmental agency in custody of the aircraft. Management also added $18 and $19 of interest accrued to the carrying value of the sales lease receivable under the sales-type lease as of December 31, 2025 and December 31, 2024, respectively. The net sales-lease receivable was $952 and $1,530 as of December 31, 2025 and December 31, 2024, respectively. As of December 31, 2025 and December 31, 2024, the net investment in the lease, net of the credit loss reserves, are labeled as Sales lease receivable, net in the consolidated balance sheets as $952 and $470, respectively, which reflects the amount expected to be received over the next one-year period, and $— and $1,060, respectively, for Long-term sales receivable, net, which reflects the remaining amounts to be collected over the remaining term of the lease as of the respective dates of the consolidated balance sheets. For the years ended December 31, 2025 and December 31, 2024, the Company recorded $219 and $256, respectively, of interest income from the lease which is recorded in Interest and dividend income in the consolidated statements of operations.