Business Description

Harbor is a non-operating holding company that is the parent of a consolidated group of subsidiaries, including AWAC Aviation, Inc. (“AWAC”), which, until January 9, 2026, was the sole member of Air Wisconsin Airlines LLC (“Air Wisconsin”), which operated as an air carrier. Harbor is also the direct parent of three other subsidiaries: (1) Lotus Aviation Leasing, LLC (“Lotus”), which leased flight equipment to Air Wisconsin, (2) Air Wisconsin Funding LLC (“AWF”), which provided flight equipment financing to Air Wisconsin, and (3) Harbor Therapeutics, Inc. (“Therapeutics”), which is a non-operating entity with no material assets. As previously disclosed, on January 9, 2026, Harbor completed the last in a series of transactions pursuant to which it disposed of all of its aviation assets, including its membership interests in Air Wisconsin (the completion of all such transactions, collectively, the “Aviation Disposition”). For additional information, please refer to the sections titled “— Aviation Disposition ” and “— Organizational Structure, ” in Part I, Item 1, Business , in this Annual Report . Because Harbor consolidated Air Wisconsin for financial statement purposes prior to the Aviation Disposition, for purposes of this Annual Report, disclosures relating to activities of Air Wisconsin also apply to Harbor, unless otherwise noted. Where reference is made only to Harbor Diversified, Inc. (such as when referring to the outstanding shares of common stock), it is referred to as “Harbor.” Where reference is made only to Air Wisconsin (such as where it is named specifically for its historical contractual obligations and operations), it is referred to as “Air Wisconsin.” Where reference is intended to include Harbor and its consolidated subsidiaries, they are jointly referred to as the “Company,” “we,” “us,” or “our.” Business Overview From its formation in 1965 until April 3, 2025, Air Wisconsin operated primarily as a regional airline affiliated with major airlines providing short and medium haul scheduled flights that connected smaller communities with larger cities and acting as a “feeder” for the major airlines’ domestic and international airline hubs. From March 2023 until April 3, 2025, Air Wisconsin provided regional airline services for American Airlines, Inc. (“American”) pursuant to a capacity purchase agreement (the “American capacity purchase agreement”) that it had entered into with American in August 2022. For the year ended December 31, 2025, a substantial portion of our operating revenue was derived from operations associated with the American capacity purchase agreement, even though that agreement terminated in April 2025. For the year ended December 31, 2024, substantially all of our operating revenue was derived from operations associated with the American capacity purchase agreement. As of December 31, 2025, Air Wisconsin owned a fleet of 54 CRJ-200 regional jets, manufactured by Bombardier, Inc. On January 3, 2025, American gave notice to Air Wisconsin of the termination of the American capacity purchase agreement, effective April 3, 2025. Given the dynamics in the airline industry, including the decision by multiple major airlines to eliminate from their fleets single class 50-seat aircraft, such as those owned by Air Wisconsin, we realized that it was unlikely Air Wisconsin would be able to enter into a new capacity purchase agreement with a major airline to provide regional airline service. As a result, on January 10, 2025, Air Wisconsin announced a strategic realignment of its business strategies. As part of that contemplated realignment, Air Wisconsin began exploring various business opportunities, including (1) expanding its charter operations; (2) focusing on Essential Air Service Program (“EAS”) markets; and (3) transitioning its relationship with American to a codeshare and interline relationship. These efforts did not lead to sustainable operations or positive financial results. During the first and second quarters of 2025, and, with respect to possible EAS operations, into the third quarter of 2025, Air Wisconsin continued to evaluate the viability of various business opportunities and strategic alternatives. However, following termination of the American capacity purchase agreement, Air Wisconsin’s level of flying was drastically reduced relative to the level of flying before the termination, and there were periods during which Air Wisconsin operated no flights.…