{"url_path":"/sec/skas/10-q/2026/item-2","section_key":"item-2","section_title":"Item 2 Management**’**s Discussion and Analysis of Financial Condition and Results of Operations**","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1128281/0001437749-26-017366-index.html","accession_number":"0001437749-26-017366","cik":"0001128281","ticker":"SKAS","issuer_name":"Saker Aviation Services, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1128281/0001437749-26-017366-index.html","primary_entity_key":"0001128281","primary_entity_name":"Saker Aviation Services, Inc."},"word_count":1955,"has_tables":true,"body_markdown":"**Item 2 - Management**’**s Discussion and Analysis of Financial Condition and Results of Operations**\n\n \n\nThe following discussion should be read together with the accompanying unaudited condensed consolidated financial statements and related notes in this report. This Item 2 contains forward-looking statements that involve risks and uncertainties. Undue reliance should not be placed on these forward-looking statements, which speak only as of the date of this report. Actual results may differ materially from those expressed or implied in such forward-looking statements. Factors which could cause actual results to differ materially are discussed throughout this report and include, but are not limited to, those set forth at the end of this Item 2 under the heading \"Cautionary Statement Regarding Forward Looking Statements.\" Additional factors are under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.\n\n \n\nThe terms “we”, “us”, and “our” are used below to refer collectively to the Company and its subsidiary through which our businesses are conducted.\n\n \n\n**Overview**\n\n \n\nSaker Aviation Services, Inc. (“we,” “us,” “our” or the “Company”) is a Nevada corporation. Our common stock, $0.03 par value per share (the “common stock”), is quoted on the OTCQB Marketplace (“OTCQB”) under the symbol “SKAS”. We previously served as the operator of a heliport and currently provide strategic financial advisory services to clients.\n\n \n\nWe were formed on January 17, 2003 as a proprietorship and were incorporated in Arizona on January 2, 2004. We became a public company as a result of a reverse merger transaction on August 20, 2004 with Shadows Bend Development, Inc., an inactive public Nevada corporation, and subsequently changed our name to FBO Air, Inc. On December 12, 2006, we changed our name to FirstFlight, Inc. On September 2, 2009, we changed our name to Saker Aviation Services, Inc.\n\n \n\n8\n\n \n\n \n\nAs discussed throughout this document, we previously were the operator of the Downtown Manhattan (New York) Heliport until March 29, 2025. Our business activities at the Downtown Manhattan (New York) Heliport facility (the “Downtown Manhattan Heliport”) commenced in November 2008 when we were awarded the Concession Agreement by the City of New York to operate the Downtown Manhattan Heliport, which we assigned to our subsidiary, FirstFlight Heliports, LLC d/b/a Saker Aviation Services. As described in greater detail below, we no longer operate the Downtown Manhattan Heliport.\n\n \n\nBeginning in December 2025, we commenced providing strategic financial advisory services to clients.\n\n \n\nREVENUE AND OPERATING RESULTS\n\n \n\n*Comparison of Operations for the Three Months Ended March 31, 2026 and March 31, 2025.*\n\n \n\n*REVENUE*\n\n \n\nFor the three months ended March 31, 2026, revenue from operations associated with providing financial advisory services was $15,000. For the three months ended March 31, 2025, revenue from operations at the Downtown Manhattan Heliport was $1,260,756, consisting of approximately $297,000 from the sale of jet fuel, approximately $937,000 associated with services and supply items, and $27,000 relating to all other revenue. The change in a year-over-year basis is due to the Company ceasing operations at the Downtown Manhattan Heliport on March 29, 2025.\n\n \n\n*COST OF REVENUE*\n\n \n\nFor the three months ended March 31, 2026, cost of revenue from providing financial advisory services was $21,875. For the three months ended March 31, 2025, cost of revenue from operating the Downtown Manhattan Heliport was $749,396. The change in a year-over-year basis is due to the Company ceasing operations at the Downtown Manhattan Heliport on March 29, 2025.\n\n \n\n*GROSS PROFIT*\n\n \n\nTotal gross profit from operations decreased by 101.3 percent in the three months ended March 31, 2026 as compared with the three months ended March 31, 2025. For the three months ended March 31, 2026, the Company had a net loss from operations of $(6,875) compared to a gross profit of $511,360 for the three months ended March 31, 2025. Gross margin was (45.8) percent in the three months ended March 31, 2026 as compared to 40.6 percent in the same period in the prior year. The change in a year-over-year basis is due to the Company ceasing operating the Downtown Manhattan Heliport on March 29, 2025.\n\n \n\n*OPERATING EXPENSE*\n\n \n\nSelling, General and Administrative\n\n \n\nTotal selling, general and administrative expenses, (“SG&A”), from operations were $296,449 in the three months ended March 31, 2026, representing a decrease of $711,015 or 70.6 percent, as compared to the same period in 2025.\n\n \n\nSG&A expenses associated with our operations were approximately $220,000 in the three months ended March 31, 2026, representing a decrease of approximately $633,000, or 74.2 percent, as compared to the three months ended March 31, 2025. SG&A associated with our operations, as a percentage of revenue, was 1,467 percent for the three months ended March 31, 2026, as compared with 67.7 percent in the corresponding prior year period. The decrease in SG&A on a year-over-year basis is primarily attributable to a one-time charge in the first quarter of 2025 to record deferred compensation expense relating to a Covenant to Compete Agreement as well as decreased professional fees in 2026 relating to the Company’s ongoing challenge, and pending litigation, of the NYCEDC selection of the heliport’s new operator.\n\n \n\n9\n\n \n\n \n\nCorporate SG&A from operations was approximately $76,000 for the three months ended March 31, 2026, representing a decrease of approximately $78,000 as compared with the corresponding prior year period. The decrease in corporate expenses was primarily attributable to a decrease in services provided by various service providers.\n\n \n\n*OPERATING LOSS*\n\n \n\nOperating loss from operations for the three months ended March 31, 2026 was $303,324 as compared to $496,104 in the three months ended March 31, 2025. The change on a year-over-year basis was largely attributable to the items discussed above.\n\n \n\nInterest Income\n\n \n\nInterest income for the three months ended March 31, 2026 and 2025 was $79,303 and $78,671, respectively.\n\n \n\nIncome Tax\n\n \n\nIncome tax expense for the three months ended March 31, 2026 and 2025 was $0.\n\n \n\nNet Loss Per Share\n\n \n\nNet loss was $223,227 and $514,765 for the three months ended March 31, 2026 and 2025, respectively. The change on a year-over-year basis was largely attributed to the items discussed above.\n\n \n\nBasic net loss per share for the three months ended March 31, 2026 and 2025 was $0.22 and $0.52, respectively. Diluted net loss per share for the three months ended March 31, 2026 and 2025 was $0.22 and $0.51, respectively.\n\n \n\nLIQUIDITY AND CAPITAL RESOURCES\n\n \n\nAs of March 31, 2026, we had cash and cash equivalents of $4,539,940 and a working capital surplus of $8,509,684. In the three months ended March 31, 2026, we generated revenue from operations of $15,000 and had a net loss of $223,227**.**For the three months ended March 31, 2026, cash flows included net cash used in operating activities of $57,772, which included net loss of $223,227, and net cash used in investing activities of $33,954.\n\n \n\nOn March 15, 2018, the Company entered into a loan agreement for a $1,000,000 revolving line of credit (the “Key Bank Revolver Note”) which, at the discretion of the Bank, provides for the Company to borrow up to $1,000,000 for working capital and general corporate purposes. On November 22, 2023, the Bank reduced the amount available under the Key Bank Revolver Note to $500,000. This revolving line of credit is a demand note with no stated maturity date. Borrowings under the Key Bank Revolver Note will bear interest at a rate per annum equal to Daily Simple SOFR plus 2.75%. The Company is required to make monthly payments of interest on any outstanding principal under the Key Bank Revolver Note and is required to pay the entire balance, including principal and all accrued and unpaid interest and fees, upon demand by the Bank. Any proceeds from the Key Bank Revolver Note would be secured by substantially all of the Company’s assets. There were no amounts due under the Key Bank Revolver Note at March 31, 2026 or 2025.\n\n \n\nThe Company has invested its excess working capital reserves in a high yield savings account and government backed securities with UBS Financial Services Inc. (“UBS”).\n\n \n\nOn February 10, 2025, the Company entered into a Covenant Not To Compete agreement (the “Covenant Agreement”) with Brian Tolbert, the manager of the Downtown Manhattan Heliport (the “Receiving Party”). The Covenant Agreement provides for payments beginning in April 2025 totaling $276,923 over the next 18 months, provided the Receiving Party does not disclose any confidential information to, or accept employment with, the new operator of the Heliport or any of its subsidiaries. The Company has recorded the liability and expense in the Company’s Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Operation as of March 31, 2026.\n\n \n\n10\n\n \n\n \n\nDuring the three months ended March 31, 2026, we had a net decrease in cash of $91,726. Our sources and uses of funds during this period were as follows:\n\n \n\n**Cash from Operating Activities**\n\n \n\nFor the three months ended March 31, 2026, net cash used in operating activities was $57,772. This amount included a decrease in operating cash related to net loss of $223,227 and additions for the following items: (i) stock-based compensation, $5,666; (ii) prepaid expenses, $49,979; and (iii) accrued expenses, $174,576. These increases in operating activities were offset by (i) realized gain on investments of $794; (ii) accounts receivable, $10,000; (iii) deferred liabilities, $46,154; and (iv) accounts payable, $7,818.\n\n \n\nFor the three months ended March 31, 2025, net cash provided by operating activities was $34,789. This amount included an increase in operating cash related to net loss of $514,765 and additions for the following items: (i) depreciation and amortization, $3,879; (ii) stock-based compensation, $27,097; (iii) write-off of relinquished assets, net of depreciation, $104,339; (iv) accounts receivable, $128,422; (v) inventory, $6,647; (vi) prepaid expenses, $519,194; (vii) deferred liabilities, $276,923; (viii) customer deposits, $2,852; and (ix) accounts payable, $105,644. These increases in operating activities were offset by a decrease in accrued expenses of $618,436 and realized gain on investments of $7,007.\n\n \n\n**Cash Used in Investing Activities**\n\n \n\nFor the three months ended March 31, 2026, net cash used in investing activities was $33,954. This amount included purchases of investments of $1,054,954 offset by the sale of investments of $1,021,000.\n\n \n\nFor the three months ended March 31, 2025, net cash used in investing activities was $29,743. This amount included purchases of investments of $732,598 and the purchase of property and equipment of $6,145, offset by the sale of investments of $709,000.\n\n \n\n**CAUTIONARY STATEMENT FOR FORWARD-LOOKING STATEMENTS**\n\n \n\nStatements contained in this report may contain information that includes or is based upon \"forward-looking statements\" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent management's current judgment and assumptions, and can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements are frequently accompanied by the use of such words as \"approximately,\" \"believes,\" could,\" \"estimated,\" \"expects,\" \"may,\" \"should,\" \"will,\" and similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors, are described in greater detail in our Annual Report on Form 10-K for the year ended December 31, 2025.\n\n \n\nAny one of these or other risks, uncertainties, other factors, or any inaccurate assumptions made by the Company may cause actual results to be materially different from those described herein or elsewhere by us. Undue reliance should not be placed on any such forward-looking statements, which speak only as of the date they were made. Subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above and elsewhere in our reports filed with the SEC. We expressly disclaim any intent or obligation to update any forward-looking statements, except as may be required by law."}