10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

☒    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2019

OR

☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from _______________ to ________________

Commission File Number: 000-52593

SAKER AVIATION SERVICES, INC.

(Exact name of registrant as specified in its charter)

Nevada	87-0617649
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

20 South Street, Pier 6 East River New York, NY	10004
(Address of principal executive offices)	(Zip Code)

(212) 776-4046

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

Title of each class

Common Stock, $0.03 par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes  ☐ No  ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes  ☐ No  ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  ☒ No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes  ☒ No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐	Non-accelerated filer	☐	Smaller reporting company	☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐    No ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes  ☐ No  ☒

As of June 28, 2019 (the last business day of the registrant’s most recently completed second fiscal quarter), the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold as of the close of such business day was $              .

As of March 30, 2020, the Registrant had 1,020,135 shares of its Common Stock, par value $0.03 per share, issued and outstanding.

SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES

FORM 10-K

INDEX

ITEM 1.	BUSINESS	1
ITEM 1A.	RISK FACTORS	4
ITEM 1B.	UNRESOLVED STAFF COMMENTS	8
ITEM 2.	PROPERTIES	8
ITEM 3.	LEGAL PROCEEDINGS	8
ITEM 4.	MINE SAFETY DISCLOSURES	8
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	9
ITEM 6.	SELECTED FINANCIAL DATA	10
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	11
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	17
ITEM 8.	FINANCIAL STATEMENTS	18
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	34
ITEM 9A.	CONTROLS AND PROCEDURES	34
ITEM 9B.	OTHER INFORMATION	34
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE	35
ITEM 11.	EXECUTIVE COMPENSATION	37
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	39
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	42
ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	42
ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES	44
ITEM 16.	FORM 10-K SUMMARY	45
	SIGNATURES	46

THIS FORM 10-K CONTAINS 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. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE SET FORTH IN SUCH FORWARD-LOOKING STATEMENTS. CERTAIN FACTORS THAT MIGHT CAUSE SUCH A DIFFERENCE ARE DISCUSSED IN ITEM 1A, “RISK FACTORS” AND ITEM 7, “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” OF THIS ANNUAL REPORT ON FORM 10-K. SEE ALSO “FORWARD-LOOKING STATEMENTS” WITHIN SUCH ITEM 7 OF THIS ANNUAL REPORT ON FORM 10-K.

PART I

ITEM 1. BUSINESS

General

Saker Aviation Services, Inc. (“we”, “us”, “our”) 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”. Through our subsidiaries, we operate in the aviation services segment of the general aviation industry, in which we serve as the operator of a heliport, a fixed base operation (“FBO”), a provider of aircraft maintenance and repair services (“MRO”), and as a consultant for a seaplane base that we do not own. FBOs provide ground-based services, such as fueling and aircraft storage for general aviation, commercial and military aircraft, and other miscellaneous services.

We 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.

Our business activities are carried out as the operator of the Downtown Manhattan (New York) Heliport, as an FBO and MRO at the Garden City (Kansas) Regional Airport.

The Garden City facility became part of our company as a result of our acquisition of the FBO assets of Central Plains Aviation, Inc. in March 2005 and of Aircraft Services, Inc. (“Aircraft Services”) in October 2016.

Our business activities at the Downtown Manhattan (New York) Heliport facility (the “Heliport”) commenced in July 2008 when we were awarded the Concession Agreement by the City of New York to operate the Heliport, which we assigned to our subsidiary, FirstFlight Heliports, LLC d/b/a Saker Aviation Services (“FFH”).

We believe the general aviation market has been historically cyclical, with revenue correlated to general U.S. economic conditions. Although not truly seasonal in nature, the spring and summer months tend to generate higher levels of revenue and our operations generally follow that trend. We cannot predict with certainty the impact that the ongoing novel coronavirus (“COVID-19”) pandemic will have on our business operations, financial condition and results of operations. The COVID-19 pandemic has significantly disrupted business operations in the United States and globally and has contributed to a decline in general economic conditions in the United States. To the extent local, regional and the federal government impose restrictions on air travel and/or air tourism or consumers cease traveling, our results of operations will be negatively impacted. Please see Item 1A. “Risk Factors” below.

Suppliers and Raw Materials 

Our principal materials are aviation fuel and aircraft parts. We obtain aviation fuel, component parts and other supplies from a variety of sources, generally from more than one supplier. Our suppliers and sources are both domestic and foreign, and we believe that our sources of materials are adequate to meet our needs for the foreseeable future. We do not believe the loss of any one supplier would have a material adverse effect on our business or results of operations. We generally purchase our supplies on the open market, where certain commodities have fluctuated in price significantly in recent years. We have not experienced any significant shortage of our key supplies.

Marketing and Sales

The main goal of our marketing and sales efforts is to increase traffic at our facilities, which would then drive revenue through the incremental sale of our products and services. Our primary marketing tactic in this regard is to focus advertising efforts in the environments (web, periodical and industry publications) where the pilot and aviation-user community might be introduced to our brand name and locations. We intend to continue to invest in improvements to our sales and marketing strategies to drive revenue growth.

1

Government Approvals

The aviation services that we provide are generally performed on municipal or other government owned real estate properties. Accordingly, at times we will need to obtain certain consents or approvals from governmental entities in conjunction with our operations. These consents and approvals are typically in the form of a lease agreement, as is the case at our Kansas facility, or a concession agreement, as is the case with our New York facility. There can be no assurance that we will obtain further consents or approvals on favorable terms or be able to renew existing consents or approvals on favorable terms, if at all.

Government Regulation

We are subject to a variety of governmental laws and regulations that apply to companies in the aviation industry. These include, among other matters, compliance with the Federal Aviation Administration rules and regulations, and local, regional and national rules and regulations as they relate to environmental matters. We believe we are in compliance with, and intend to continue to comply with, all applicable government regulations. The adoption of new regulations could result in increased costs and have an adverse impact on our results of operations, including, for example, new regulations restricting air travel as a result of the recent COVID-19 pandemic. New regulations relating to the COVID-19 pandemic could cause us to experience significant declines in activity, which would materially adversely affect our results of operations and financial condition. In the event we are unable to remain compliant with applicable rules and regulations, or new regulations result in a reduction in our operations, our business may be adversely affected.

Customers

For the fiscal year ended December 31, 2019, four customers represented approximately 54.7% of our revenue. The loss of any of these four customers could represent a significant decrease in revenue that may adversely affect our business and results of operations. Additionally, these four accounts represented approximately 73.0% of the balance of accounts receivable at December 31, 2019. Accounts receivable are carried at their estimated collectible amounts and are periodically evaluated for collectability. We depend significantly on our business with these four customers.

Competition

The FBO segment of the aviation services industry is competitive in both pricing and service because aircraft in transit are able to choose from a number of FBO options within a 300-mile radius. The vast majority of FBO operators are independent, single location operators. We are the sole FBO at our facility in Garden City, KS. As such, we face no direct on-airport competition. However, we face competitive pressure on pricing and services from FBO facilities at other airports, depending on aircraft travel flexibility.

We plan to grow our business through both internal development of existing resources and facilities and through the potential acquisition of other related business. We anticipate that growing our business will provide us with greater buying power from suppliers and, therefore, result in lower costs. Lower costs would allow us to implement a more aggressive pricing policy against some competitors. We believe that the higher level of customer service offered in our facilities will allow us to draw additional aircraft traffic and thus compete successfully against other FBOs of all sizes. However, there can be no assurance that we will be able to compete successfully in the highly competitive aviation industry.

Costs and Effects of Complying With Environmental Laws

We are subject to a variety of federal, state and local environmental laws and regulations, including those that govern health and safety requirements, the discharge of pollutants into the air or water, the management and disposal of hazardous substances and wastes and the responsibility to investigate and clean up contaminated sites that are or were owned, leased, operated or used by us or our predecessors. Some of these laws and regulations require us to obtain permits, which contain terms and conditions that impose limitations on our ability to emit and discharge hazardous materials into the environment and may be periodically subject to modification, renewal and revocation by issuing authorities. Fines and penalties may be imposed for non-compliance with applicable environmental laws and regulations and the failure to have or to comply with the terms and conditions of required permits. We intend to comply with these laws and regulations. However, from time to time, our operations may not be in full compliance with the terms and conditions of our permits or licenses. We periodically review our procedures and policies for compliance with environmental laws and requirements. We believe that our operations are in material compliance with applicable environmental laws and requirements and that any potential non-compliance would not be expected to result in us incurring material liability or cost to achieve compliance. Although the cost of achieving and maintaining compliance with environmental laws and requirements has not been material, we can provide no assurance that such cost will not become material in the future.

2

Employees

As of December 31, 2019, we employed 28 persons, 24 of which were employed on a full-time basis, and one of which was an executive officer. All of our personnel are employed in connection with our operations in New York and Kansas.

Available Information

We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Therefore, we file periodic reports, proxy statements and other information with the SEC. We maintain a website at www.sakeraviation.com where we make available, free of charge, documents that we file with, or furnish to, the SEC, including our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements, registration statements and any amendments to those reports. Our SEC reports can be found under the “SEC Filings” heading in the “Investor Relations” tab on our website. The information found on our website is not part of this or any other report we file with, or furnish to, the SEC.

ITEM 1A. RISK FACTORS

The following risk factors relate to our operations:

We will need additional financing to expand our business.

Certain potential aviation services firms which we may seek to acquire in the future may accept shares of our common stock or other securities as payment by us for the acquisition. However, we believe that most will likely prefer cash payments, whether paid at the closing or in post-closing installment payments. There can be no assurance that our operations will generate sufficient cash flow to meet these acquisition obligations. Accordingly, we anticipate the need to seek additional equity or debt financing to meet any cash requirements for acquisitions. Any such financing will be dependent on general market conditions and the stock market’s evaluation of our performance and potential. Accordingly, we can give no assurance that we will obtain such equity or debt financing and, even if we do, that the terms would be satisfactory to us.

The COVID-19 pandemic, or any similar public health threat, could have a material adverse impact on the Company's business, operating results and financial condition, including the suspension of our customer’s operations at the Downtown Manhattan Heliport.

 The coronavirus outbreak or similar public health threats, or fear of such events, that affects travel demand, travel behavior, or travel restrictions could have a material adverse impact on our business, financial condition and operating results. In addition, outbreaks of disease have resulted in increased government restrictions and regulation, and could expand to include quarantines of our personnel or an inability to access facilities or our aircraft, which would adversely affect our operations.

3

In December 2019, the COVID-19 strain of coronavirus was reported in China. The World Health Organization has declared COVID-19 a pandemic. The United States government has already implemented some forms of travel restrictions. For example, on January 30, 2020, the U.S. Department of State issued a Level 4 "do not travel" advisory for China and, in March of 2020, the U.S. government implemented travel restrictions to Canada and parts of Europe. The U.S. government has also implemented quarantine requirements and travel restrictions in connection with the COVID-19 pandemic, among other measures. Future travel restrictions may impact the type of air travel services we provide. The COVID-19 pandemic and public fear of COVID-19 has reduced the demand for our customer’s services, and as of March 17, 2020, all sightseeing tour operations at the Downtown Manhattan Heliport have ceased due to a drop in demand as a result of the ongoing COVID-19 pandemic. The extent of the impact of the COVID-19 on our operational and financial performance will depend on future developments, including the duration and spread of the COVID-19 pandemic and related travel advisories and restrictions and the impact of the COVID-19 on overall demand for air travel, all of which are highly uncertain and cannot be predicted. If we experience significant declines in demand and a suspension of our customer’s operations over an extended period of time, our results of operations for the fiscal year ending December 31, 2020 will be materially adversely affected.

Our business, results of operations and financial condition may be adversely affected by the outbreak of COVID-19.

The global spread of COVID-19 has created significant volatility, uncertainty and economic disruption. The extent to which the coronavirus pandemic impacts our business, operations and financial results is uncertain and will depend on numerous evolving factors that we may not be able to accurately predict, including:

■ the duration and scope of the pandemic;

■ the length of time our customer’s sightseeing tour operations at the Downtown Manhattan Heliport are suspended due to decreased demand;

■ governmental, business and individual actions taken in response to the pandemic and the impact of those actions on global economic activity;

■ the actions taken in response to economic disruption;

■ the impact of business disruptions and reductions in employment levels in the United States;

■ our customers’ continuing viability as businesses; and

■ the possibility that all of our facilities will be required to close

We could be adversely affected by increases in the price, or decreases in the availability, of jet fuel.

Our operations could be significantly affected by the availability and price of jet fuel. A significant increase in the price of jet fuel would most likely have a material impact on our ability to achieve and maintain profitability unless we are able to pass on such costs to our customers. Due to the competitive nature of the industry, our ability to pass on increased fuel prices by increasing our rates is uncertain. Likewise, any potential benefit of lower fuel prices may be offset by increased competition and lower revenue, in general. While we do not currently anticipate a significant reduction in fuel availability, dependency on foreign imports of crude oil and the possibility of changes in government policy on jet fuel production, transportation and marketing make it impossible to predict the future availability of jet fuel. If there are new outbreaks of hostility or other conflicts in oil producing areas or elsewhere, there could be a reduction in the availability of jet fuel or significant increases in costs to our business, as well as to the entire aviation industry, which in turn would adversely affect our business and results of operations.

We could be adversely affected by the loss of certain key customers or the inability of such key customers to pay amounts due to us.

For the fiscal year ended December 31, 2019, four customers represented approximately 54.7% of our revenue. Additionally, these four accounts represented approximately 73.0% of the balance of accounts receivable at December 31, 2019. Accounts receivable are carried at their estimated collectible amounts and are periodically evaluated for collectability. The loss of any of our key customers, or the inability of such customers to pay amounts due to us, could result in a significant decrease in revenue that may adversely affect our business and result of operations.

We could be adversely affected by the loss of or failure to extend our material agreements including our Concession Agreement with the City of New York and our lease of the Garden City, Kansas facilities.

A substantial portion of our business depends on our existing material agreements including our Concession Agreement with the City of New York and our lease of facilities in Garden City, Kansas. If we were to lose these agreements, or if these agreements expired without renewal or extension, we may be unable to operate our business in our current geographic markets. Should we lose or fail to extend these agreements, there is no guarantee that we could enter into new agreements with similar terms or into new agreements at all. If we were to enter into material agreements with less favorable terms or if we were unable to enter into new agreements, our business and results of operations would be materially and adversely affected.

4

Our agreement (the “Air Tour Agreement”) with the New York City Economic Development Corporation (the “NYCEDC”) may continue to negatively impact our business and financial results as well as those of our management company.

Under the Air Tour Agreement, we cannot allow our tenant operators to conduct tourist flights from the Downtown Manhattan Heliport on Sundays. We were also required to ensure that our tenant operators reduced the total allowable number of tourist flights from 2015 levels by 20 percent beginning June 1, 2016, by 40 percent beginning October 1, 2016 and by 50 percent beginning January 1, 2017. Additionally, since June 1, 2016, we have been required to provide monthly written reports to the NYCEDC and the New York City Council detailing the number of tourist flights conducted out of the Downtown Manhattan Heliport compared to 2015 levels, as well as information on any tour flight that flies over land or strays from agreed upon routes. These provisions of the Air Tour Agreement have, and may continue to, have an adverse effect on our business and results of operations.

The continued threat of terrorist actions may result in less demand for private aviation and, as a result, our revenue may be adversely affected and we may not be able to continue successful operations.

Terrorist actions involving public and private aircraft may have a significant adverse impact on us. As a result of these actions, individuals and corporate customers may cease using private aircraft as a means of transportation or reduce their use of such aircraft, or we could become subject to burdensome regulations that would have an adverse effect on our results of operations. In either event, we would be unable to maintain sales and may be unable to continue our operations on a successful basis.

The FBO segment of the aviation services industry in which we operate is fiercely competitive.

We compete with national, regional, and local FBO operators. Many of our competitors have been in business longer than we have and have greater financial resources available to them. Having greater financial resources will make it easier for these competitors to absorb an increase in fuel prices and other expenses. In addition, these competitors might seek acquisitions in regions and markets competitive to us, which could have an adverse effect on our business and results of operations. Accordingly, we can give no assurance that we will be able to successfully compete in our industry.

Our business as an FBO is subject to extensive governmental regulation.

FBOs are subject to extensive regulatory requirements that could result in significant costs. For example, the FAA, from time to time, issues directives and other regulations relating to the management, maintenance and operation of facilities, including the potential of emergency regulations related to the COVID-19 pandemic. Additionally, we may be subject to government procurement regulations as they relate to obtaining new agreements or renewing or extending existing agreements with governmental entities. Compliance with those requirements may cause us to incur significant expenditures. The proposal and enactment of additional laws and regulations, as well as any charges that we have not complied with any such laws and regulations, could significantly increase the cost of our operations and reduce overall revenue. We cannot provide assurance that compliance with existing laws and regulations or that laws or regulations enacted in the future will not adversely affect our business and results of operations. If any emergency regulations related to the COVID-19 pandemic caused us to temporarily cease operations, our results of operations and financial condition would be adversely impacted.

We must maintain and add key management and other personnel.

Our future success is heavily dependent on the performance of our managers. Our growth and future success depends, in large part, on the continued contributions of management and our ability to retain management. Our success depends to a significant extent upon the continued service of Ron Ricciardi, our President and Chief Executive Officer. On September 1, 2019, we entered into an employment agreement with Mr. Ricciardi. The initial term runs from September 1, 2019 through September 1, 2019 and does not provide for automatic renewal. Loss of the services of Mr. Ricciardi could significantly harm our business, results of operations and financial condition. The Company maintains key-person insurance on the life of Mr. Ricciardi.

5

Our growth and future success also depends on other key individuals, as well as our ability to motivate and retain these personnel or hire other persons. Although we believe we will be able to retain and hire qualified personnel, we can give no assurance that we will be successful in retaining and recruiting such personnel in sufficient numbers to increase revenue, maintain profitability or successfully implement our growth strategy. If we lose the services of management or any of our key personnel or are not able to retain or hire qualified personnel, our business could be adversely affected.

If our employees were to unionize, our operating costs would increase and our business could be adversely affected.

None of our employees are currently represented under a collective bargaining agreement. From time to time, there may be efforts to organize our employees. There is no assurance that our employees will not unionize in the future, particularly if legislation is passed that facilitates unionization. The unionization of our employees could have a material adverse effect on our business, financial condition and results of operations due to the possibility of work stoppage, wage increases, or other developments that may result from the unionization of our employees.

Changes in minimum wage laws outside of our control could affect our profitability.

We have employees who are paid wage rates based on the applicable federal or state minimum wage and increases in the minimum wage may increase our labor costs and reduce profitability. Federal, state, or local minimum wages may be raised in the future and we may be unable or unwilling to increase our prices in order to pass these increased labor costs on to our customers, in which case, our business and results of operations could be materially and adversely affected.

We are subject to environmental laws that could impose significant costs on us and the failure to comply with such laws could subject us to sanctions and material fines and expenses. 

We are subject to a variety of federal, state and local environmental laws and regulations, including those governing the discharge of pollutants into the air or water, the management and disposal of hazardous substances and wastes and the responsibility to investigate and clean-up contaminated sites that are or were owned, leased, operated or used by us or our predecessors. Some of these laws and regulations require us to obtain permits, which contain terms and conditions that impose limitations on our ability to emit and discharge hazardous materials into the environment and may be periodically subject to modification, renewal and revocation by issuing authorities. Fines and penalties may be imposed for non-compliance with applicable environmental laws and regulations, the failure to have required permits or the failure to comply with the terms and conditions of such permits. We intend to comply with all laws and regulations, however, from time to time, our operations may not be in full compliance with the terms and conditions of our permits. We periodically review our procedures and policies for compliance with environmental laws and requirements. We believe that our operations are in material compliance with applicable environmental laws, requirements and permits and any lapses in compliance are not expected to result in us incurring material liability or cost to achieve compliance. However, there can be no assurance that our operations will remain in material compliance with applicable environmental laws and requirements. Historically, the costs of achieving and maintaining compliance with environmental laws, requirements and permits have not been material; however, the operation of our business entails risks in these areas and a failure by us to comply with applicable environmental laws, regulations or permits could result in civil or criminal fines, penalties, enforcement actions, third party claims for property damage and personal injury, requirements to clean up property or to pay for the costs of cleanup and/or regulatory or judicial orders enjoining or curtailing operations or requiring corrective measures. Moreover, if applicable environmental laws and regulations, or the interpretation or enforcement thereof, become more stringent in the future, we could incur capital or operating costs beyond those currently anticipated and our business and results of operations could be harmed.

6

The following risk factors relate to our common stock:

There is no active market for our common stock, which makes our common stock less liquid.

To date, trading of our common stock has been sporadic and nominal in volume. In addition, there are only a limited number of broker-dealers trading our common stock. As a result, there is little, if any, liquidity in our common stock. We can provide no assurance that an active trading market will ever develop.

Our common stock is subject to the penny stock rules, which makes our common stock less liquid.

The SEC has adopted a set of rules called the “penny stock rules” that regulate broker-dealers with respect to trading in securities with a bid price of less than $5.00. These rules do not apply to securities registered on certain national securities exchanges (including the Nasdaq Stock Market), provided that current price and volume information regarding transactions in such securities is provided by the exchange. Our stock is not listed on such an exchange and we have no expectation that our common stock will be listed on such an exchange in the future. The penny stock rules require a broker-dealer to deliver to the customer a standardized risk disclosure document prepared by the SEC that provides information about penny stocks and the nature and level of risks in the penny stock market. Additionally, the broker-dealer must provide the customer with other information. The penny stock rules also require that, prior to a transaction in a penny stock, the broker-dealer must determine in writing that the penny stock is a suitable investment for the purchaser. The broker-dealer must also receive the purchaser’s written agreement to the transaction. These disclosure requirements have the effect of reducing the level of trading activity in the secondary market for a stock such as ours that is subject to the penny stock rules.

Potential additional financings, the granting of additional stock options and anti-dilution provisions in our warrants could further dilute our existing stockholders.

As of March 30, 2020, there were 1,020,135 shares of our common stock outstanding. If all of our outstanding common stock purchase warrants and options were exercised, there would be 1,073,463 shares outstanding, an increase of approximately 5.2%. Any further issuances due to additional equity financings, or the granting of additional options could further dilute our existing stockholders, which could cause the value of our common stock to decline.

Our Board of Directors’ right to issue shares of preferred stock could adversely impact the rights of holders of our common stock.

Our Board of Directors currently has the right to authorize the issuance of up to 333,306 shares of one or more series of our preferred stock with such voting, dividend and other rights as our directors determine. Such action can be taken by our Board of Directors without the approval of our shareholders. Accordingly, the holders of any new series of preferred stock could be granted voting rights that reduce the voting power of the holders of our common stock. For example, the preferred holders could be granted the right to vote on a merger as a separate class even if the merger would not have an adverse effect on their rights. This right, if granted, would give such preferred holders a veto with respect to any merger proposal. Alternatively, such preferred holders could be granted a large number of votes per share while voting as a single class with the holders of our common stock, thereby diluting the voting power of the holders of our common stock. In addition, the holders of any new series of preferred stock could be given the option to redeem their shares for cash in the event of a merger. This would make acquiring us less attractive to a potential buyer. Thus, our Board of Directors could authorize the issuance of shares of the new series of preferred stock in order to defeat a proposal for the acquisition of our company that a majority of the holders of our common stock otherwise favor.

Our common stock may not continue to be traded on the OTCQB.

We cannot provide any assurance that our common stock will continue to be eligible to be quoted on the OTCQB Marketplace (“OTCQB”). Should our common stock cease to be quoted on the OTCQB and fail to qualify for listing on a stock exchange (including the Nasdaq Stock Market), our common stock would only trade in the “pink sheets” which generally provides an even less liquid market than the OTCQB. In such event, stockholders may find it more difficult to trade their shares of our common stock or to obtain accurate and current information concerning market prices for our common stock.

7

Our management team currently has influential voting power.

As of March 30, 2020, our executive officers, directors and their family members and associates, collectively, are entitled to vote approximately 333,589 shares, or 32.7% of the 1,020,135 shares of our outstanding shares of common stock. Accordingly, and because there is no cumulative voting for directors, our executive officers and directors are currently in a position to influence the election of all of our Board of Directors. The management of our company is controlled by our Board of Directors, which is currently comprised of three independent directors, a director who is a managing partner of a law firm which provides legal services to us, and one executive officer/director.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2. PROPERTIES

As of March 30, 2020, we lease office and hangar space at the following locations:

Location	Purpose	Space (Square Feet)	Annual Rental		Expiration
2117 S. Air Service Road Garden City, Kansas	Kansas FBO location	17,640	$	26,244	December 31, 2030
2145 S. Air Service Road Garden City, Kansas	Kansas MRO location	3,782	$	6,780	December 31, 2030

We believe that our space is adequate and suitable for our immediate needs. Additional hangar space may be required for our operations in the future. No definitive plans to lease any additional space have been developed at the time of this report. Should additional hangar space be required, there can be no assurance that such space will be available or available on commercially reasonable terms or at all.

ITEM 3. LEGAL PROCEEDINGS

From time to time, we may be a party to one or more claims or disputes which may result in litigation. However, we are currently not a party to, nor is our property subject to, any material pending legal proceedings.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

8

PART II

ITEM5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock is quoted on the OTCQB under the symbol “SKAS”. The OTCQB is a regulated quotation service that displays real-time quotes, last-sale prices and volume information in over-the-counter (“OTC”) equity securities. Our common stock is only traded on a limited or sporadic basis and should not be deemed to constitute an established public trading market. OTC quotations reflect intra-dealer prices, without retail mark-up, mark-down, or commission and may not necessarily represent actual transactions.

The following table sets forth the high and low closing sale prices for the common stock as reported on the OTCQB for the past two most recent fiscal years, with quarters ended prior to March 1, 2019 adjusted for the Company’s reverse stock split effected on such date.

	Common Stock
Quarterly Period Ended	High		Low
March 31, 2018	$	4.98	$	2.79
June 30, 2018	$	3.90	$	2.13
September 30, 2018	$	3.87	$	2.25
December 31, 2018	$	3.30	$	2.28
March 31, 2019	$	4.50	$	2.31
June 30, 2019	$	4.10	$	2.61
September 30, 2019	$	4.55	$	2.85
December 31, 2019	$	7.00	$	4.67

Holders

As of March 30, 2020, there were approximately 248 holders of record of our common stock. This number does not include beneficial owners of the common stock whose shares are held in the names of various broker-dealers, clearing agencies, banks and other fiduciaries.

Dividends

             On September 30, 2019, the Company announced that its Board of Directors had declared a special cash dividend of $0.50 per share (the “Dividend”). The Dividend is being paid to stockholders in equal quarterly installments of $0.125 per share which began on November 1, 2019, with the final dividend scheduled to be paid on August 28, 2020. The total amount of future cash dividends to be paid has been accrued in the Company’s balance sheets as of December 31, 2019.

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ITEM6. SELECTED FINANCIAL DATA

Not applicable.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-looking Statements

This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects” and similar references to future periods. These statements may include projections of revenue, provisions for doubtful accounts, income or loss, capital expenditures, repayment of debt, other financial items, statements regarding our plans and objectives for future operations, acquisitions, divestitures and other transactions, statements of future economic performance, statements of the assumptions underlying or relating to any of the foregoing statements and statements other than statements of historical fact.

Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by such forward-looking statements. We therefore caution you against relying on any of these forward-looking statements because they are neither statements of historical fact nor guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements include our services and pricing, the impact of the COVID-19 pandemic, general economic conditions, our ability to raise additional capital, our ability to obtain the various approvals and permits for the acquisition and operation of FBOs and the other risk factors contained in Item 1A of this report.

Any forward-looking statement made by us in this report speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Overview

Our long-term strategy is to increase our sales through growth within our aviation services operations. To do so, we may expand our geographic reach and product offering through strategic acquisitions and improved market penetration within the markets we serve. We expect that any future acquisitions or product offerings would be to complement and/or augment our current aviation services operations.

If we are able to grow our business as planned, we anticipate that our larger size would provide us with greater buying power from suppliers, resulting in lower costs. We expect that lower costs would allow for a more aggressive pricing policy against some competition. More importantly, we believe that the higher level of customer service offered in our facilities will allow us to draw additional aircraft to our facilities and thus allow us to compete against other FBOs of varying sizes.

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Summary Financial Information

The summary financial data set forth below is derived from and should be read in conjunction with the consolidated financial statements, including the notes thereto, filed as part of this report.

Consolidated Statement of Operations Data:	Year Ended December 31, 2019		Year Ended December 31, 2018
(in thousands, except for share and per share data)
Revenue	$	11,568	$	11,118
Operating Income, before income tax expense	$	1,066	$	508
Income tax expense	$	399	$	196
Net Income	$	667	$	312
Net income per share – basic	$	0.66	$	0.30
Net income per share – diluted	$	0.65	$	0.30
Weighted average number of shares – basic		1,008,979		1,029,001
Weighted average number of shares – diluted		1,021,865		1,039,599

Balance Sheet Data: (in thousands)	December 31, 2019		December 31, 2018
Working capital surplus	$	3,928	$	3,872
Total assets	$	7,257	$	6,341
Total liabilities	$	1,681	$	994
Stockholders’ equity	$	5,576	$	5,347
Total liabilities and Stockholders’ equity	$	7,257	$	6,341

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Comparison of Results for the Years Ended December 31, 2019 and December 31, 2018.

REVENUE

Revenue increased by 4.0 percent to $11,567,725 for the twelve months ended December 31, 2019 as compared with corresponding prior-year period revenue of $11,118,452.

For the twelve months ended December 31, 2019, revenue associated with services and supply items increased by 2.1 percent to approximately $6,600,000 as compared to approximately $6,400,000 in the twelve months ended December 31, 2018.

For the twelve months ended December 31, 2019, revenue associated with the sale of jet fuel, aviation gasoline and related items increased by 6.8 percent to approximately $4,800,000 as compared to approximately $4,500,000 in the twelve months ended December 31, 2018.

For the twelve months ended December 31, 2019, all other revenue increased by 5.4 percent to approximately $184,000 as compared to approximately $174,000 in the twelve months ended December 31, 2018.

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GROSS PROFIT

Total gross profit increased 13.2 percent to $5,716,659 in the twelve months ended December 31, 2019 as compared to $5,051,761 in the twelve months ended December 31, 2018. Gross margin was 49.4 percent for the twelve months ended December 31, 2019 as compared to 45.4 percent for the same period in 2018. The increase in gross profit is related to higher levels of activity at our Heliport operation in 2019 as compared to the prior year. The increase in gross margin is related to higher levels of revenue from services and supplies, which generally carry a higher overall gross margin, in 2019 as compared to the prior year.

OPERATING EXPENSE

Selling, General and Administrative

Total selling, general and administrative expenses (“SG&A”) were $4,669,097 in the twelve months ended December 31, 2019, an increase of $109,519 or 2.4 percent, as compared to the same period in 2018.

SG&A associated with our FBO operations were approximately $4,100,000 in the twelve months ended December 31, 2019, an increase of approximately $100,000, or 2.4 percent, as compared to the twelve months ended December 31, 2018. SG&A associated with our FBO operations, as a percentage of revenue, was 35.9 percent for the twelve months ended December 31, 2019, as compared with 36.5 percent in the corresponding prior year period. The increased operating expenses were largely attributable to increased costs related to the higher levels of activity in our Heliport operations.

Corporate SG&A was approximately $514,000 for the twelve months ended December 31, 2019, representing an increase of approximately $13,000 as compared with the corresponding prior year period.

OPERATING INCOME

Operating income for the year ended December 31, 2019 was $1,047,562 as compared to $492,183 in the year ended December 31, 2018. The increase on a year-over-year basis was driven by higher levels of gross profit.

Depreciation and Amortization

Depreciation and amortization was approximately $124,000 and $472,000 for the twelve months ended December 31, 2019 and 2018, respectively. The decrease in depreciation was attributable to the Company’s leasehold improvements becoming fully depreciated at the end of 2018.

Interest Income and Expense

Interest income was $27,069 and $33,027 for the twelve months ended December 31, 2019 and 2018, respectively. The decrease in interest income was mainly attributable to the issuance of a note receivable from one of our customers at the Heliport in 2018, which was fully paid as of December 31, 2018. Interest expense for the year ended December 31, 2019 was $7,987, as compared to $17,121 in the same period in 2018. The decrease in interest expense was mainly attributable to the Company’s 2019 repayment of bank loans that were originated in March 2018.

Impairment of Goodwill and Other Intangibles

We had $750,000 of goodwill at December 31, 2019 and 2018.

Income Tax

Income tax expense for the twelve months ended December 31, 2019 was approximately $399,000, as compared to $197,000 in the same period in 2018. The increase is attributable to an increase in net income in 2019 as compared to net income in the same period in 2018.  

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Net Income Per Share

Net income for the twelve months ended December 31, 2019 was $667,644 as compared to net income of $311,536 in the twelve months ended December 31, 2018.

Basic and diluted net income per share for the twelve months ended December 31, 2019 was $0.66 and $0.65, respectively, as compared to basic and diluted net income per share of $0.30 each for the same period in 2018.

Liquidity and Capital Resources

As of December 31, 2019, we had cash of $3,597,491 and a working capital surplus of $3,928,872. We generated revenue of $11,567,725 and had net income of $667,644 for the twelve months ended December 31, 2019. For the twelve months ended December 31, 2019, cash flows included net cash provided by operating activities of $1,123,862, net cash used in investing activities of $87,382, and net cash used in financing activities of $277,638.

As disclosed in a Current Report on Form 8-K filed on March 21, 2018 with the SEC, on March 15, 2018 the Company entered into a loan agreement (the “Loan Agreement”) with Key Bank National Association (the “Bank”). The Loan Agreement contains three components: (i) a $2,500,000 acquisition line of credit (the “Key Bank Acquisition Note”); (ii) a $1,000,000 revolving line of credit (the “Key Bank Revolver Note”); and (iii) a $338,481 term loan (the “Key Bank Term Note”).

Proceeds of the Key Bank Acquisition Note were to be dispersed pursuant to a multiple draw demand note dated as of the agreement date, where the Company could, at the discretion of the Bank, borrow up to an aggregate amount of $2,500,000, to be used for the Company’s acquisition of one or more business entities. Until the Change of Terms Agreement, as defined below, the Company was required to make consecutive monthly payments of interest, calculated at a rate per annum equal to one-day LIBOR (adjusted daily) plus 2.75%, on any outstanding principal under the Key Bank Acquisition Note from the date of its issuance through September 15, 2018 (the “Conversion Date”).

At any time through and including the Conversion Date, at the Bank’s discretion, the Company had the opportunity to request that any loan made under the Key Bank Acquisition Note be converted into a term loan to be repaid in full, including accrued interest, by consecutive monthly payments over a 48 month amortization period beginning after the Conversion Date. For any loan that was not converted into a term loan on or before the Conversion Date, the Company would have been required to begin making monthly payments of principal and interest after the Conversion Date, over a 48 month amortization period, after which the remaining unpaid principal and accrued interest would have become due and payable. All loans under the Key Bank Acquisition Note would have, after the Conversion Date, accrued interest at a rate per annum equal to the Bank’s four year cost of funds rate plus 2.5%. As of the Conversion Date, there were no amounts due under the Key Bank Acquisition Note and no amounts had been converted to a term loan.

On October 11, 2018, and as subsequently amended, the Company entered into a new loan agreement with the Bank (the “Change of Terms Agreement”) which modified the original terms of the Key Bank Acquisition Note. Under the Change of Terms Agreement, the Company may continue to, at the discretion of the Bank, borrow up to an aggregate amount of $2,500,000 through June 30, 2020 (the “Maturity Date”), to be used for the Company’s acquisition of one or more business entities. The Change of Terms Agreement requires the Company to make consecutive monthly payments of interest on any outstanding principal calculated at a rate per annum equal to 4.25%. The entire principal balance, plus all accrued interest, is due in full on the Maturity Date. As of December 31, 2019, there were no amounts due under the Change of Terms Agreement.

             Proceeds from the Key Bank Revolver Note, at the discretion of the Bank, provide for the Company to borrow up to $1,000,000 for working capital and general corporate purposes. 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 one-day LIBOR (adjusted daily) 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. As of December 31, 2019, there were no amounts due under the Key Bank Revolver Note.

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Proceeds from the Key Bank Term Note were utilized to retire amounts previously outstanding under a $280,920 term loan from PNC Bank. As of December 31, 2019, all amounts outstanding under the Key Bank Term Note have been repaid.

The Company is party to a Concession Agreement, dated as of November 1, 2008, with the City of New York for the operation of the Downtown Manhattan Heliport (the “Concession Agreement”). Pursuant to the terms of the Concession Agreement, the Company must pay the greater of 18% of the first $5,000,000 in any program year based on cash collected (“Gross Receipts”) and 25% of Gross Receipts in excess of $5,000,000, or minimum annual guaranteed payments. During the twelve months ended December 31, 2019 and 2018, we incurred approximately $1,640,000 and $1,800,000 in concession fees, respectively, which are recorded in the cost of revenue.

As disclosed in a Current Report on Form 8-K filed with the SEC on February 5, 2016, the Company and the New York City Economic Development Corporation (the “NYCEDC”) announced new measures to reduce helicopter noise and impacts across New York City (the “Air Tour Agreement”).

Under the Air Tour Agreement, filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2015, the Company may not allow its tenant operators to conduct tourist flights from the Downtown Manhattan Heliport on Sundays beginning April 1, 2016. The Company was also required to ensure that its tenant operators reduce the total allowable number of tourist flights from 2015 levels by 20 percent beginning June 1, 2016, by 40 percent beginning October 1, 2016 and by 50 percent beginning January 1, 2017. Additionally, beginning on June 1, 2016, the Company was required to provide monthly written reports to the NYCEDC and the New York City Council detailing the number of tourist flights conducted out of the Downtown Manhattan Heliport compared to 2015 levels, as well as information on any tour flight that flies over land and/or strays from agreed upon routes.

The Air Tour Agreement also extended the Concession Agreement for 30 months, resulting in a new expiration date of April 30, 2021. The City of New York has two one-year options to further extend the Concession Agreement. The Air Tour Agreement also provides that the minimum annual guarantee payments the Company is required to pay to the City of New York under the Concession Agreement be reduced by 50%, effective January 1, 2017.

These reductions have negatively impacted the Company’s business and financial results as well as those of its management company at the Heliport, Empire Aviation which, as previously disclosed, is owned by the children of Alvin Trenk, the Company’s former Chief Executive Officer and a former member of its Board of Directors.  The Company incurred management fees with Empire Aviation of approximately $2,200,000 and $1,777,000 during the twelve months ended December 31, 2019 and 2018, respectively, which is recorded in administrative expenses. The Company and Empire Aviation have also contributed to the Helicopter Tourism and Jobs Council (“HTJC”), an association that lobbies on behalf of the helicopter air tour industry, and which had engaged in discussions with the Mayor’s office.  Mr. Trenk is also an active participant with HJTC, which is managed by his grandson. One of our Directors, Sam Goldstein, serves as deputy director of HJTC.  

           On April 20, 2018, the Company’s Kansas subsidiary entered into a purchase lease with Commerce Bank for a refueling truck (the “Truck Lease”). The Truck Lease commenced on May 1, 2018 and continues for 60 months at an interest rate of LIBOR plus 416 basis points. At the end of the Truck Lease, the Company’s subsidiary may purchase the vehicle for $1.00.

           On January 15, 2019, the Company was issued an unsecured note by one of its customers at the Heliport. The note schedules payments of approximately $276,000 in receivables payable by such customer, has a maturity date of October 31, 2019, as amended, and carries a 7.5% rate of interest. The note payments were to be made in six monthly installments beginning May 31, 2019. The customer’s payments on the note have not met the installment plan and the Company was working on changes to the note when the customer filed for Chapter 11 Bankruptcy. The Company intends to continue to pursue remaining amounts due under the note and it is the Company’s expectation that the note will be fulfilled.

As disclosed in a Current Report on Form 8-K filed with the SEC on July 6, 2015, the Company entered into a stock purchase agreement, dated June 30, 2015, by and between the Company and Warren A. Peck, pursuant to which Mr. Peck purchased all of the capital stock of the Company’s wholly-owned subsidiary, Phoenix Rising Aviation, Inc. The details of the agreement are described in such Current Report as well as in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, which was filed with the SEC on April 11, 2016. The Company received $100,000 due under this agreement in September 2017 and an additional payment of $100,000 in September 2018. In 2019, the Company accepted the title to a Falcon 10 aircraft owned by Mr. Peck as satisfaction in full of the remainder of the $270,000 stock purchase price. The Company intends to sell the aircraft and has classified the it as “Held For Sale” on the Company’s Consolidated Balance Sheets as of December 31, 2019.

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As disclosed in a Current Report on Form 8-K filed with the SEC on September 06, 2019, effective September 1, 2019, the Company and Ronald J. Ricciardi entered into a new Employment Agreement (the “New Agreement”). Pursuant to the New Agreement, Mr. Ricciardi will continue to serve as the Company’s President and Chief Executive Officer. Among other things, the New Agreement provides for a four-year term with a base salary of $200,000, with subsequent annual base salary increases at the discretion of the Board of Directors. In addition, Mr. Ricciardi is eligible to receive an annual incentive bonus in an amount equal to 25% of the then-applicable base salary earned in the event that the Company meets or exceeds its annual operating plan for earnings before interest, taxes, depreciation and amortization. Mr. Ricciardi also received a stock award upon the execution of the New Agreement. In addition, Mr. Ricciardi is eligible for additional stock awards upon each of the four anniversary dates of this New Agreement. Each of the five stock awards shall be the number of shares equal to the issued and outstanding shares of the Company on the date of each issuance multiplied by one half of one percent. The issuance of such stock awards are to be administered according to the Company’s Equity Compensation Plan, as approved the Company’s stockholders.

Our anticipated capital expenditures in 2020 are approximately $50,000 - $100,000.

During the twelve months ended December 31, 2019, we had a net increase in cash of $758,842. Our sources and uses of funds during this period were as follows:

Cash from Operating Activities

For the year ended December 31, 2019, net cash provided by operating activities was $1,123,862. This amount included an increase in operating cash related to net income of $667,644 and additions for the following items: (i) depreciation, $124,264; (ii) stock-based compensation expense, $33,997; (iii) prepaid expenses and other current assets, $271,830; (iv) deposits, $3,552; (v) deferred income taxes, $31,000; (vi) accounts payable, $49,052; and (vii) accrued expenses, $59,129. The increase in cash provided by operating activities in 2019 was offset by the following items: (i) accounts receivable, trade, $106,267; and (ii) inventories, $10,339. For the year ended December 31, 2018, net cash provided by operating activities was $856,258. This amount included an increase in operating cash related to net income of $311,536 and additions for the following items: (i) depreciation, $472,067; (ii) stock-based compensation expense, $33,997; (iii) accounts receivable, trade, $240,586; and (iv) deposits, $44,205. The increase in cash provided by operating activities in 2018 was offset by the following items: (i) inventories, $7,736; (ii) prepaid expenses and other current assets, $34,783; (iii) deferred income taxes, $53,000; (iv) accounts payable, $146,903; and (v) accrued expenses, $3,711.

Cash from Investing Activities

For the year ended December 31, 2019, net cash used in investing activities was $87,382. This amount included payments of note receivable of $87,208 offset by purchases of property and equipment of $174,590. For the year ended December 31, 2018, net cash provided by investing activities was $660,082. This amount included payments of note receivable of $850,264 offset by purchases of property and equipment of $190,182.

Cash from Financing Activities

      For the year ended December 31, 2019, net cash used in financing activities was $277,638 of which $112,217 was attributable to the repayment of notes payable, $126,630 to the payment of accrued dividends, and $38,891 to the repayment of right of use leases. For the year ended December 31, 2018, net cash used in financing activities was $402,195 of which $361,379 was attributable to the repayment of notes payable and $175,816 to the repurchase and cancellation of common stock, offset by the issuance of notes payable of $135,000.

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Off-Balance Sheet Arrangements

We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivative instruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest in an unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.

Critical Accounting Estimates

Discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the amounts reported in the consolidated financial statements and the accompanying notes. We evaluate our estimates on an ongoing basis, including those estimates related to product returns, product and content development expenses, bad debts, inventories, intangible assets, income taxes, contingencies and litigation. We base our estimates on experience and on various assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

The critical accounting policies which we believe affect our more significant judgments and estimates used in the preparation of our consolidated financial statements are provided as follows:

Accounts Receivable, Trade

The Company extends credit to large and mid-size companies for products and services. The Company has concentrations of credit risk in that 73.0% of the balance of its accounts receivable at December 31, 2019 is made up of only four customers. At December 31, 2019, accounts receivable from the Company’s four largest accounts amounted to approximately $241,298 (35.6%), $115,864 (17.1%), $111,149 (16.4%), and $26,523 (3.9%), respectively. In addition, these four customers represented approximately 54.7% of our revenue in 2019. At December 31, 2018, accounts receivable from the Company’s four largest accounts amounted to approximately $285,350 (33.7%), $202,080 (23.8%), $101,678 (12.0%), and $12,671 (1.5%), respectively. In addition, these four customers represented approximately 59.7% of our revenue in 2018. The Company has in place a security deposit in connection with three of these receivables. Accounts receivable are carried at their estimated collectible amounts. Accounts receivable are periodically evaluated for collectability and the allowance for doubtful accounts is adjusted accordingly. We determine collectability based on our management experience and knowledge of the customers.

Goodwill and Intangible Assets

Goodwill and intangibles that are deemed to have indefinite lives are not amortized but, instead, are to be reviewed at each reporting period for impairment. We assessed potential impairment of goodwill using qualitative factors by considering various factors including macroeconomic conditions, industry and market conditions, cost factors, a sustained share price or market capitalization decrease and any reporting unit specific events. We performed an analysis of our goodwill and intangible assets at December 31, 2019 and 2018.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between their financial statement carrying amounts and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Deferred tax assets are subject to a valuation allowance because it is more likely than not that certain of the deferred tax assets will not be realized in future periods. We file income tax returns in the United States (federal) and in various state and local jurisdictions. In most instances, we are no longer subject to federal, state and local income tax examinations by tax authorities for years prior to 2016.

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Stock Based Compensation

Stock-based compensation expense for all share-based payment awards are based on the estimated grant-date fair value. We recognize these compensation costs over the requisite service period of the award, which is generally the option vesting term.

Option valuation models require the input of highly subjective assumptions, including the expected life of the option. Because our employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options.

Recently Adopted Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, “Leases” (“ASU 2016-02”), which requires an entity to recognize assets and liabilities on the balance sheet for the rights and obligations created by leased assets and provide additional disclosures. ASU 2016-02 became effective for us on January 1, 2019 and we have adopted the new standard using a modified retrospective approach. The adoption of ASU No. 2016-02 did not have a material impact on the Company’s financial statements.

ITEM 7A.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

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ITEM 8. FINANCIAL STATEMENTS

SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES
Table of Contents to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm	19
Consolidated Financial Statements
Consolidated Balance Sheets as of December 31, 2019 and 2018	20
Consolidated Statements of Operations For the Years Ended December 31, 2019 and 2018	21
Consolidated Statements of Stockholders’ Equity For the Years Ended December 31, 2019 and 2018	22
Consolidated Statements of Cash Flows For the Years Ended December 31, 2019 and 2018	23
Notes to Consolidated Financial Statements	24

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Audit Committee of the Board of Directors and Stockholders of

Saker Aviation Services, Inc.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Saker Aviation Services, Inc. and Subsidiaries (the "Company") as of December 31, 2019 and 2018, the related consolidated statements of operations, stockholders’ equity and cash flows, for the years then ended, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Change in Accounting Principle

As discussed in Note 3 to the consolidated financial statements, the entity changed its methods of accounting for leases in 2019 due to the adoption of ASU No. 2016-02 “Leases”.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Kronick Kalada Berdy & Co. P.C.

We have served as the Company's auditor since 2009.

Kingston, Pennsylvania

March 30, 2020

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SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	December 31, 2019			December 31, 2018
ASSETS
CURRENT ASSETS
Cash	$	3,597,491		$	2,838,649
Accounts receivable		678,045			847,814
Inventories		181,204			170,865
Notes receivable		188,828			270,000
Held for sale assets		270,000			---
Prepaid expenses and other current assets		294,644			566,474
Total current assets		5,210,212			4,693,802
PROPERTY AND EQUIPMENT, net of accumulated depreciation and amortization of $3,676,488 and $3,630,731 respectively		323,316			388,072
OTHER ASSETS
Deposits		2,512			2,512
Right of use assets		495,377			---
Goodwill		750,000			750,000
Deferred income taxes		476,000			507,000
Total other assets		1,723,889			1,259,512
TOTAL ASSETS	$	7,257,417		$	6,341,386
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	397,343		$	348,291
Customer deposits		130,395			126,843
Accrued dividends payable		373,370			---
Accrued expenses		319,557			288,630
Notes payable – current portion		---			57,722
Right of use leases payable – current portion		60,675			---
Total current liabilities		1,281,340			821,486
LONG-TERM LIABILITIES
Notes payable - less current portion		---			173,399
Right of use leases payable - less current portion		399,733			---
Total liabilities		1,681,073			994,885
STOCKHOLDERS’ EQUITY
Preferred stock - $0.03 par value; authorized 333,306; none issued and outstanding
Common stock - $0.03 par value; authorized 3,333,334; 1,020,135 and 1,006,768 shares issued and outstanding as of December 31, 2019 and 2018, respectively		30,604			30,203
Additional paid-in capital		19,818,637			19,756,839
Accumulated deficit		(14,272,897	)		(14,440,541	)
TOTAL STOCKHOLDERS’ EQUITY		5,576,344			5,346,501
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	7,257,417		$	6,341,386

See accompanying notes to consolidated financial statements.

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SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	For the Years Ended December 31,
	2019			2018
REVENUE	$	11,567,725		$	11,118,452
COST OF REVENUE		5,851,066			6,066,691
GROSS PROFIT		5,716,659			5,051,761
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		4,669,097			4,559,578
OPERATING INCOME		1,047,562			492,183
OTHER INCOME (EXPENSE):
OTHER INCOME		---			447
INTEREST INCOME		27,069			33,027
INTEREST EXPENSE		(7,987	)		(17,121	)
TOTAL OTHER INCOME		19,082			16,353
INCOME FROM OPERATIONS, before income taxes		1,066,644			508,536
INCOME TAX EXPENSE (BENEFIT)
CURRENT		368,000			250,000
DEFERRED		31,000			(53,000	)
INCOME TAX EXPENSE		399,000			197,000
NET INCOME	$	667,644		$	311,536
Basic Net Income Per Common Share	$	0.66		$	0.30
Diluted Net Income Per Common Share	$	0.65		$	0.30
Weighted Average Number of Common Shares – Basic		1,008,979			1,029,001
Weighted Average Number of Common Shares – Diluted		1,021,865			1,039,599

See accompanying notes to consolidated financial statements.

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SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

FOR YEARS ENDED DECEMBER 31, 2019 AND 2018

							Additional						Total
	Common Stock						Paid-in			Accumulated			Stockholders’
	Shares			Amount			Capital			Deficit			Equity
BALANCE – January 1, 2018		1,070,586		$	32,117		$	19,896,744		$	(14,752,077	)	$	5,176,784
Amortization of stock based compensation								33,997						33,997
Repurchase and cancellation of Common Stock		(64,084	)		(1,922	)		(173,894	)					(175,816	)
Issuance of additional common stock		266			8			(8	)					0
Net income											311,536			311,536
BALANCE – December 31, 2018		1,006,768		$	30,203		$	19,756,839		$	(14,440,541	)	$	5,346,501
Issuance of additional Common Stock in connection with reverse split		525			16			(16	)					0
Amortization of stock based compensation								33,997						33,997
Dividends declared											(500,000	)		(500,000	)
Issuance of additional Common Stock		12,842			385			27,817						28,202
Net income											667,644			667,644
BALANCE – December 31, 2019		1,020,135		$	30,604		$	19,818,637		$	(14,272,897	)	$	5,576,344

See accompanying notes to consolidated financial statements.

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SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Years Ended December 31,
	2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	667,644		$	311,536
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		124,264			472,067
Stock based compensation		33,997			33,997
Changes in operating assets and liabilities:
Accounts receivable, trade		(106,267	)		240,586
Inventories		(10,339	)		(7,736	)
Prepaid expenses and other current assets		271,830			(34,783	)
Deposits		3,552			44,205
Deferred income taxes		31,000			(53,000	)
Accounts payable		49,052			(146,903	)
Accrued expenses		59,129			(3,711	)
TOTAL ADJUSTMENTS		456,218			544,722
NET CASH PROVIDED BY OPERATING ACTIVITIES		1,123,862			856,258
CASH FLOWS FROM INVESTING ACTIVITIES
Payment of notes receivable		87,208			850,264
Purchase of property and equipment		(174,590	)		(190,182	)
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		(87,382	)		660,082
CASH FLOWS FROM FINANCING ACTIVITIES
Notes Payable:
Borrowings:		---			135,000
Repayments		(112,117	)		(361,379	)
Dividends paid		(126,630	)		---
Repayment of right of use leases payable		(38,891	)		---
Repurchase and cancellation of common stock		---			(175,816	)
NET CASH USED IN FINANCING ACTIVITIES		(277,638	)		(402,195	)
NET CHANGE IN CASH		758,842			1,114,145
CASH – Beginning		2,838,649			1,724,504
CASH – Ending	$	3,597,491		$	2,838,649
NON-CASH OPERATING, INVESTING AND FINANCING ACTIVITIES:
Accrued Dividend Payable	$	373,370		$	---
Change in Accounts Receivable through issuance of a Note Receivable	$	276,036		$	750,264
Right of use assets obtained in exchange for Lease obligations	$	548,070		$	---
Issuance of common stock	$	28,202			---
Change in assets held for sale from Notes Receivable	$	270,000		$	---
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the periods for:
Interest	$	7,987		$	17,121
Income taxes	$	79,029		$	341,547

See accompanying notes to consolidated financial statements.

23

SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES

Notes To Consolidated Financial Statements

NOTE 1 - Nature of Operations

Saker Aviation Services, Inc. (“Saker”), through its subsidiaries (collectively the “Company”), operates in the aviation services segment of the general aviation industry, in which it serves as the operator of a heliport and a fixed base operation (“FBO”), and as a provider of aircraft maintenance, repair and overhaul (“MRO”). FBOs provide ground-based services, such as fueling and aircraft storage for general aviation, commercial and military aircraft, and other miscellaneous services.

FirstFlight Heliports, LLC d/b/a Saker Aviation Services (“FFH”), a wholly-owned subsidiary, operates the Downtown Manhattan Heliport via a concession agreement with the City of New York. FBO Air Garden City, Inc. d/b/a Saker Aviation Services (“FBOGC”), a wholly-owned subsidiary provides FBO and MRO services in Garden City, Kansas.

NOTE 2 – Liquidity and Material Agreements

As of December 31, 2019, we had cash of $3,597,491 and a working capital surplus of $3,928,872. We generated revenue of $11,567,725 and had net income of $667,644 for the twelve months ended December 31, 2019.

As disclosed in a Current Report on Form 8-K filed on March 21, 2018 with the SEC, on March 15, 2018 the Company entered into a loan agreement (the “Loan Agreement”) with Key Bank National Association (the “Bank”). The Loan Agreement contains three components: (i) a $2,500,000 acquisition line of credit (the “Key Bank Acquisition Note”); (ii) a $1,000,000 revolving line of credit (the “Key Bank Revolver Note”); and (iii) a $338,481 term loan (the “Key Bank Term Note”).

Proceeds of the Key Bank Acquisition Note were to be dispersed pursuant to a multiple draw demand note dated as of the agreement date, where the Company could, at the discretion of the Bank, borrow up to an aggregate amount of $2,500,000, to be used for the Company’s acquisition of one or more business entities. Until the Change of Terms Agreement, as defined below, the Company was required to make consecutive monthly payments of interest, calculated at a rate per annum equal to one-day LIBOR (adjusted daily) plus 2.75%, on any outstanding principal under the Key Bank Acquisition Note from the date of its issuance through September 15, 2018 (the “Conversion Date”).

At any time through and including the Conversion Date, at the Bank’s discretion, the Company had the opportunity to request that any loan made under the Key Bank Acquisition Note be converted into a term loan to be repaid in full, including accrued interest, by consecutive monthly payments over a 48 month amortization period beginning after the Conversion Date. For any loan that was not converted into a term loan on or before the Conversion Date, the Company would have been required to begin making monthly payments of principal and interest after the Conversion Date, over a 48 month amortization period, after which the remaining unpaid principal and accrued interest would have become due and payable. All loans under the Key Bank Acquisition Note would have, after the Conversion Date, accrued interest at a rate per annum equal to the Bank’s four year cost of funds rate plus 2.5%. As of the Conversion Date, there were no amounts due under the Key Bank Acquisition Note and no amounts had been converted to a term loan.

On October 11, 2018, and as subsequently amended, the Company entered into a new loan agreement with the Bank (the “Change of Terms Agreement”) which modified the original terms of the Key Bank Acquisition Note. Under the Change of Terms Agreement, the Company may continue to, at the discretion of the Bank, borrow up to an aggregate amount of $2,500,000 through June 30, 2020 (the “Maturity Date”), to be used for the Company’s acquisition of one or more business entities. The Change of Terms Agreement requires the Company to make consecutive monthly payments of interest on any outstanding principal calculated at a rate per annum equal to 4.25%. The entire principal balance, plus all accrued interest, is due in full on the Maturity Date. As of December 31, 2019, there were no amounts due under the Change of Terms Agreement.

Proceeds from the Key Bank Revolver Note, at the discretion of the Bank, provide for the Company to borrow up to $1,000,000 for working capital and general corporate purposes. 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 one-day LIBOR (adjusted daily) 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. As of December 31, 2019, there were no amounts due under the Key Bank Revolver Note.

Proceeds from the Key Bank Term Note were utilized to retire amounts previously outstanding under a $280,920 term loan from PNC Bank. As of December 31, 2019, all amounts outstanding under the Key Bank Term Note have been repaid.

The Company is party to a Concession Agreement, dated as of November 1, 2008, with the City of New York for the operation of the Downtown Manhattan Heliport (the “Concession Agreement”). Pursuant to the terms of the Concession Agreement, the Company must pay the greater of 18% of the first $5,000,000 in any program year based on cash collected (“Gross Receipts”) and 25% of Gross Receipts in excess of $5,000,000, or minimum annual guaranteed payments. During the twelve months ended December 31, 2019 and 2018, we incurred approximately $1,640,000 and $1,800,000 in concession fees, respectively, which are recorded in the cost of revenue.

24

SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES

Notes To Consolidated Financial Statements

As disclosed in a Current Report on Form 8-K filed with the SEC on February 5, 2016, the Company and the New York City Economic Development Corporation (the “NYCEDC”) announced new measures to reduce helicopter noise and impacts across New York City (the “Air Tour Agreement”).

Under the Air Tour Agreement, filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2015, the Company may not allow its tenant operators to conduct tourist flights from the Downtown Manhattan Heliport on Sundays beginning April 1, 2016. The Company was also required to ensure that its tenant operators reduce the total allowable number of tourist flights from 2015 levels by 20 percent beginning June 1, 2016, by 40 percent beginning October 1, 2016 and by 50 percent beginning January 1, 2017. Additionally, beginning on June 1, 2016, the Company was required to provide monthly written reports to the NYCEDC and the New York City Council detailing the number of tourist flights conducted out of the Downtown Manhattan Heliport compared to 2015 levels, as well as information on any tour flight that flies over land and/or strays from agreed upon routes.

The Air Tour Agreement also extended the Concession Agreement for 30 months, resulting in a new expiration date of April 30, 2021. The City of New York has two one-year options to further extend the Concession Agreement. The Air Tour Agreement also provides that the minimum annual guarantee payments the Company is required to pay to the City of New York under the Concession Agreement be reduced by 50%, effective January 1, 2017.

These reductions have negatively impacted the Company’s business and financial results as well as those of its management company at the Heliport, Empire Aviation which, as previously disclosed, is owned by the children of Alvin Trenk, the Company’s former Chief Executive Officer and a former member of its Board of Directors.  The Company incurred management fees with Empire Aviation of approximately $2,200,000 and $1,777,000 during the twelve months ended December 31, 2019 and 2018, respectively, which is recorded in administrative expenses. The Company and Empire Aviation have also contributed to the Helicopter Tourism and Jobs Council (“HTJC”), an association that lobbies on behalf of the helicopter air tour industry, and which had engaged in discussions with the Mayor’s office.  Mr. Trenk is also an active participant with HJTC, which is managed by his grandson. One of our Directors, Sam Goldstein, serves as deputy director of HJTC.  

On April 20, 2018, the Company’s Kansas subsidiary entered into a purchase lease with Commerce Bank for a refueling truck (the “Truck Lease”). The Truck Lease commenced on May 1, 2018 and continues for 60 months at an interest rate of LIBOR plus 416 basis points. At the end of the Truck Lease, the Company’s subsidiary may purchase the vehicle for $1.00.

On January 15, 2019, the Company was issued an unsecured note by one of its customers at the Heliport. The note schedules payments of approximately $276,000 in receivables payable by such customer, has a maturity date of October 31, 2019, as amended, and carries a 7.5% rate of interest. The note payments were to be made in six monthly installments beginning May 31, 2019. The customer’s payments on the note have not met the installment plan and the Company was working on changes to the note when the customer filed for Chapter 11 Bankruptcy. The Company intends to continue to pursue remaining amounts due under the note and it is the Company’s expectation that the note will be fulfilled.

As disclosed in a Current Report on Form 8-K filed with the SEC on July 6, 2015, the Company entered into a stock purchase agreement, dated June 30, 2015, by and between the Company and Warren A. Peck, pursuant to which Mr. Peck purchased all of the capital stock of the Company’s wholly-owned subsidiary, Phoenix Rising Aviation, Inc. The details of the agreement are described in such Current Report as well as in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, which was filed with the SEC on April 11, 2016. The Company received $100,000 due under this agreement in September 2017 and an additional payment of $100,000 in September 2018. In 2019, the Company accepted the title to a Falcon 10 aircraft owned by Mr. Peck as satisfaction in full of the remainder of the $270,000 stock purchase price. The Company intends to sell the aircraft and has classified the it as “Held For Sale” on the Company’s Consolidated Balance Sheets as of December 31, 2019.

As disclosed in a Current Report on Form 8-K filed with the SEC on September 06, 2019, effective September 1, 2019, the Company and Ronald J. Ricciardi entered into a new Employment Agreement (the “New Agreement”). Pursuant to the New Agreement, Mr. Ricciardi will continue to serve as the Company’s President and Chief Executive Officer. Among other things, the New Agreement provides for a four-year term with a base salary of $200,000, with subsequent annual base salary increases at the discretion of the Board of Directors. In addition, Mr. Ricciardi is eligible to receive an annual incentive bonus in an amount equal to 25% of the then-applicable base salary earned in the event that the Company meets or exceeds its annual operating plan for earnings before interest, taxes, depreciation and amortization. Mr. Ricciardi also received a stock award upon the execution of the New Agreement. In addition, Mr. Ricciardi is eligible for additional stock awards upon each of the four anniversary dates of this New Agreement. Each of the five stock awards shall be the number of shares equal to the issued and outstanding shares of the Company on the date of each issuance multiplied by one half of one percent. The issuance of such stock awards are to be administered according to the Company’s Equity Compensation Plan, as approved the Company’s stockholders.

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SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES

Notes To Consolidated Financial Statements

NOTE 3 - Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, FFH and FBOGC. All significant inter-company accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s significant estimates include depreciation, amortization, impairment of goodwill and intangibles, stock-based compensation, allowance for doubtful accounts and deferred tax assets.

Cash

The Company maintains its cash with various financial institutions which often exceeds federally insured limits. The Company has not experienced any losses from maintaining cash accounts in excess of federally insured limits. As part of its cash management process, the Company periodically reviews the relative credit standing of these financial institutions.

Accounts Receivable, Trade and Revenue Concentration

The Company extends credit to large and mid-size companies for products and services. The Company has concentrations of credit risk in that 73.0% of the balance of its accounts receivable at December 31, 2019 is made up of only four customers. At December 31, 2019, accounts receivable from the Company’s four largest accounts amounted to approximately $241,298 (35.6%), $115,864 (17.1%), $111,149 (16.4%), and $26,523 (3.9%), respectively. In addition, these four customers represented approximately 54.7% of our revenue in 2019. At December 31, 2018, accounts receivable from the Company’s four largest accounts amounted to approximately $285,350 (33.7%), 202,080 (23.8%), $101,678 (12.0%), and $12,671 (1.5%), respectively. In addition, these four customers represented approximately 59.7% of our revenue in 2018. Accounts receivable are carried at their estimated collectible amounts. Accounts receivable are periodically evaluated for collectability and the allowance for doubtful accounts is adjusted accordingly. We determine collectability based on our management experience and knowledge of the customers.

Inventories

Inventories consist primarily of maintenance parts and aviation fuel and are stated at the lower of cost or net realizable value determined by the first-in, first out method.

Property and Equipment

Property and equipment is stated at cost. Depreciation is provided primarily using the straight-line method over the estimated useful lives as set forth in footnote 5. Amortization of leasehold improvements is provided using the straight-line method over the shorter of their estimated useful life or lease term, including renewal option periods expected to be exercised. Maintenance and repairs are charged to expense as incurred; costs of major additions and betterments are capitalized. When property and equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is reflected in income.

Goodwill and Intangible Assets

Goodwill and intangibles that are deemed to have indefinite lives are not amortized but, instead, are to be reviewed at each reporting period for impairment. The Company assessed potential impairment of goodwill using qualitative factors by considering various factors including macroeconomic conditions, industry and market conditions, cost factors, a sustained share price or market capitalization decrease and any reporting unit specific events. The Company performed an analysis of its goodwill and intangible assets at December 31, 2019 and 2018.

Leases

At December 31, 2019, our consolidated balance sheets include a right of use asset of approximately $495,000, a long-term lease liability of approximately $400,000, and a short-term liability of approximately $61,000.

26

SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES

Notes To Consolidated Financial Statements

Revenue Recognition

The Company recognizes revenue from ground-based services, such as fueling and aircraft storage, and aircraft maintenance and repair services. Revenue for the sale of ground-based services is recognized as a sale of services at the time the service is performed and provided to customers. Revenue for the sale of aircraft fuel is recognized at the time products are delivered to customers. Customers are invoiced at the time the services are performed and the associated revenue is recognized in the period it is earned. Revenue from aircraft storage services is recognized monthly based upon agreement. Aircraft maintenance and repair service revenue is recognized over time as all of the performance obligations are met. Performance obligations are satisfied when control of the aircraft has been transferred back to the customer.

In 2014, the Financial Accounting Standard Board (the “FASB”) issued ASC 606, Revenue from Contracts with Customers (“ASC 606”), replacing the existing accounting standard and industry specific guidance for revenue recognition with a five-step model for recognizing and measuring revenue from contracts with customers. The underlying principle of the new standard is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. ASC 606 became effective on January 1, 2018 and we adopted it using the modified retrospective method applied to open contracts and only to the version of the contracts in effect as of January 1, 2018. Prior period amounts have not been adjusted and continue to be reflected in accordance with our historical accounting. There was no impact on the consolidated financial statements and no cumulative effect adjustment was recognized.

Customer Deposits

Customer deposits consist of amounts that customers are required to remit in advance to the Company in order to secure payment for future purchases and services.

Advertising

The Company expenses all advertising costs as incurred. Advertising expense for the years ended December 31, 2019 and 2018 was approximately $29,840 and $33,118, respectively.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between their financial statement carrying amounts and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income or loss in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company recognizes the tax benefits of uncertain tax positions only where the position is “more likely than not” to be sustained assuming examination by tax authorities. Management has analyzed the Company’s tax positions, and has concluded that no liability should be recorded related to uncertain tax positions taken.

Deferred tax assets are subject to a valuation allowance because it is more likely than not that certain of the deferred tax assets will not be realized in future periods. The Company files income tax returns in the United States (federal) and in various state and local jurisdictions. In most instances, the Company is no longer subject to federal, state and local income tax examinations by tax authorities for years prior to 2016.

Fair Value of Financial Instruments

The reported amounts of the Company’s financial instruments, including accounts receivable, accounts payable and accrued liabilities, approximate their fair value due to their short maturities. The carrying amounts of debt approximate fair value because the debt agreements provide for interest rates that approximate market. The carrying value of the note receivable approximated fair value because it was discounted at a current market rate.

Net Income Per Common Share

Basic net income per share applicable to common stockholders is computed based on the weighted average number of shares of the Company’s common stock outstanding during the periods presented. Diluted net income per share reflects the potential dilution that could occur if securities or other instruments to issue common stock were exercised or converted into common stock. Potentially dilutive securities, consisting of options and warrants, are excluded from the calculation of the diluted income per share when their exercise prices are greater than the average market price of the common stock during the period or when their inclusion would be antidilutive. 

27

SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES

Notes To Consolidated Financial Statements

The following table sets forth the components used in the computation of basic and diluted income per share:

	For the Year Ended December 31,
		2019(1)	2018(1)
Weighted average common shares outstanding, basic		1,008,979	1,029,001
Common shares upon exercise of options		12,886	10,598
Weighted average common shares outstanding, diluted		1,021,865	1,039,599

(1) Common shares of 40,402 and 39,402 underlying outstanding stock options for the years ended December 31, 2019 and 2018, respectively, were excluded from the computation of diluted earnings per share as their inclusion would be antidilutive.

Stock-Based Compensation

Stock-based compensation expense for all share-based payment awards are based on the estimated grant-date fair value. The Company recognizes these compensation costs over the requisite service period of the award, which is generally the option vesting term. For each of the years ended December 31, 2019 and 2018, the Company incurred stock based compensation of $33,997. Such amounts have been recorded as part of the Company’s selling, general and administrative expenses in the accompanying consolidated statements of operations. As of December 31, 2019, the unamortized fair value of the options totaled $74,660 and the weighted average remaining amortization period of the options approximated five years.

Option valuation models require the input of highly subjective assumptions, including the expected life of the option. Because the Company's employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options.

The fair value of each share-based payment award granted during the years ended December 31, 2019 and 2018 were estimated using the Black-Scholes option pricing model with the following weighted average fair values:

	For the Year Ended December 31,
	2019	2018
Dividend yield	0%	0%
Expected volatility	910%	740%
Risk-free interest rate	1.6%	2.5%
Expected lives (years)	5.0	5.0

The weighted average fair value of the options on the date of grant, using the fair value based methodology during the years ended December 31, 2019 and 2018, was $5.16 and $3.03, respectively.

Recently Adopted Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, “Leases” (“ASU 2016-02”), which requires an entity to recognize assets and liabilities on the balance sheet for the rights and obligations created by leased assets and provide additional disclosures. ASU 2016-02 became effective for us on January 1, 2019 and we have adopted the new standard using a modified retrospective approach. The adoption of ASU 2016-02 did not have a material effect on the Company’s consolidated financial statements.

NOTE 4 – Inventories

Inventory consists primarily of aviation fuel, which the Company dispenses to its customers, and parts inventory as a result of the acquisition of Aircraft Services. The Company also maintains fuel inventories for commercial airlines, to which it charges into-plane fees when servicing commercial aircraft.

28

SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES

Notes To Consolidated Financial Statements

Inventories consist of the following:

	December 31,
	2019		2018
Parts inventory	$	87,625	$	82,384
Fuel inventory		79,497		76,761
Other inventory		14,082		11,720
Total inventory	$	181,204	$	170,865

Included in fuel inventory are amounts held for third parties of $25,804 and $37,675 as of December 31, 2019 and 2018, respectively, with an offsetting liability included as part of accrued expenses.

NOTE 5 – Property and Equipment

Property and equipment consist of the following:

	December 31,						Estimated
	2019			2018			Useful Life (years)
Aircraft	$	56,000		$	56,000		7	–	12
Vehicles		396,483			467,972		5	–	10
Office furniture and equipment		452,520			409,260		3	–	7
Tools and shop equipment		81,847			81,847		3	–	10
Leasehold improvements		2,812,594			2,803,724		10	–	20
Building/fuel farm		200,000			200,000		7	–	17
Total		3,999,804			4,018,803
Less: accumulated depreciation and amortization		(3,676,488	)		(3,630,731	)
Property and equipment, net	$	323,316		$	388,072

Depreciation and amortization expense for the years ended December 31, 2019 and 2018 was approximately $124,000 and $472,000, respectively.

NOTE 6 – Goodwill and Intangible Assets

The Company had $750,000 of goodwill at each of December 31, 2019 and 2018.

NOTE 7 – Notes Payable

Notes payable consist of:	December 31,
	2019		2018
Key Bank Term Note, paid in full in 2019.	$	---		112,117
Commerce Bank Truck Lease, converted to Right of use lease payable in 2019.		---		119,004
Subtotal		---		231,121
Less: current portion		---		(57,722	)
Total – long term	$	---	$	173,399

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SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES

Notes To Consolidated Financial Statements

NOTE 8 – Income Taxes

The Company’s deferred tax assets consisted of the following: 

	December 31,
Deferred tax assets:	2019			2018
Stock based compensation	$	44,000		$	50,000
Goodwill and intangibles		3,000			21,000
Property and equipment		471,000			486,000
Total deferred tax assets		518,000			557,000
Valuation Allowance		(42,000	)		(50,000	)
Deferred tax asset – net of valuation allowance	$	476,000		$	507,000
Change in valuation allowance	$	8,000		$	---

The provision for income taxes using the statutory federal tax rate as compared to the Company's effective tax rate is summarized as follows:	December 31,
	2019			2018
Tax expense at statutory rate		21.0	%		21.0	%
State and local income taxes, net of federal		16.4	%		17.7	%
Effective income tax expense rate		37.4	%		38.7	%

On December 22, 2017, the 2017 Tax Cut and Jobs Act (the “Tax Act”) was enacted into law and the new legislation contains several key tax provisions, including a reduction of the corporate income tax rate to 21% effective January 1, 2018, among others. We are required to recognize the effect of the tax law changes in the period of enactment, such as determining the estimated transition tax, re-measuring our U.S. deferred tax assets and liabilities at a 21% rate as well as reassessing the net realizability of our deferred tax assets and liabilities. 

NOTE 9 – Stockholders’ Equity

Common Stock

A summary of the Company’s shares of Common Stock outstanding at December 31, 2019 is presented in the table below:

:	Number of shares outstanding
January 1, 2018		1,070,586
Repurchase and cancellation of shares of Common Stock		(64,084	)
Shares issued in connection with exercise of stock options		266
December 31, 2018		1,006,768
Shares issued in connection with Reverse Split		525
Shares issued in connection with exercise of stock options		7,806
Shares issued in connection with Employment Agreement		5,036
December 31, 2019		1,020,135

Stock Options

On August 27, 2019, at the Company’s Annual Meeting, the stockholders of the Company approved the Stock Incentive Plan of 2019 (”the “Plan”). Also included are outstanding warrants granted under the Stock Option Plan of 2005, which was approved during the Annual Meeting on December 12, 2006. The Plan is administered by the Company’s Compensation Committee and provides for 250,000 shares of common stock to be reserved for issuance under the Plan. Directors, officers, employees, and consultants of the Company are eligible to participate in the Plan. The Plan provides for the awards of incentive and non-statutory stock options. The Compensation Committee determined the vesting schedule to be up to five years at the time of grant of any options under the Plan, and unexercised options will expire in up to ten years. The exercise price is to be equal to at least 100% of the fair market value of a share of the common stock, as determined by the Compensation Committee, on the grant date. The fair value of stock options are calculated in accordance with FASB ASC Topic 718. As of December 31, 2019 and 2018, there were 196,672 and 186,673 shares available for grant as options under the Plan, respectively.

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SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES

Notes To Consolidated Financial Statements

Details of all options outstanding under the Plan are presented in the table below:

	Number of Options			Weighted Average Exercise Price
Balance, December 31, 2017		56,661		$	2.606
Granted		13,332			2.400
Exercised		(6,666	)		2.310
Balance, December 31, 2018		63,327		$	2.594
Granted		13,332			5.600
Exercised		(13,332	)		2.350
Expired		(9,999	)		2.550
Balance, December 31, 2019		53,328		$	3.391

A summary of the Company’s stock options outstanding at December 31, 2019 is presented in the table below:

Exercise Price	Outstanding	Weighted average remaining contractual life of options (in years)	Exercisable	Intrinsic Value
$5.60	13,332	4.92	---	$	---
$2.40	13,332	3.92	13,332	$	20,225
$3.24	13,332	2.92	13,332	$	9,026
$2.25	6,666	1.92	6,666	$	11,113
$2.40	6,666	.92	6,666	$	10,113
TOTALS	53,328		39,996	$	50,477

Warrants

The company does not have any warrants outstanding as of December 31, 2019.

Preferred Stock

As of December 31, 2019 and 2018, the Company has 333,306 shares of preferred stock authorized and none of which is issued and outstanding.  On February 27, 2019, the Company filed with the Secretary of State of the state of Nevada a certificate of amendment o our articles of incorporation. The amendment provided for, among other things, a reduction in the number of authorized shares of preferred stock to 333,306. The Company’s Board of Directors currently has the right, with respect to the authorized shares of our preferred stock, to authorize the issuance of one or more series of preferred stock with such voting, dividend and other rights as the directors determine. As of December 31, 2019 and 2018, there were no shares of preferred stock outstanding. 

NOTE 10 – Employee Benefit Plan

The Company maintains a 401K Plan which covers all employees of the Company (the “401K Plan”). Effective January 1, 2020, the Company switched to a Safe Harbor 401K plan. The Safe Harbor 401K Plan stipulates that, going forward, all employees become vested 100% on day one. Employer contributions prior to the change vest over a five-year period on a 20% per year basis. The Company’s Safe Harbor 401K Plan provides that the Company match each participant's contribution at 100% up to 4% of the employee’s deferral. The employer match prior to the change was 50% up to 6% of the employee’s deferral. Company contributions to the 401K Plan totaled approximately $31,000 and $30,000 for the years ended December 31, 2019 and 2018, respectively.

NOTE 11 – Commitments

Right-Of-Use Leasing Arrangements

The Company leases facilities from Garden City, Kansas, which provides for: (a) a 21-year lease term expiring December 31, 2030, with one five-year renewal period, and (b) a base rent of $2,187 per month. In addition, the Company incurs a fuel flowage fee of $0.06 per gallon of fuel received. The fuel flowage fee is to be reviewed annually by the Garden City Regional Airport, the City of Garden City, and the Company. Flowage fees on fuel gallons purchased aggregated approximately $52,000 and $49,000 for the years ended December 31, 2019 and 2018, respectively.

31

SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES

Notes To Consolidated Financial Statements

The Company leases additional facilities from Garden City, Kansas, which provides for a 14 year lease term expiring December 31, 2030 with a base rent of $565 a month.

In 2018, the Company’s Kansas subsidiary entered into a purchase lease with Commerce Bank for a refueling truck. The lease commenced on May 1, 2018 and continues for 60 months at an interest rate of LIBOR plus 416 basis points. At the end of the lease, the Company’s subsidiary may purchase the vehicle for $1.00.

The Company’s lease right of use assets and lease liabilities as of December 31, 2019 are summarized as follows:

	December 31,
	2019
Right of use assets	$	495,377
Current portion of debt and right of use lease liabilities	$	60,675
Long term portion of debt and right of use lease liabilities		399,733
Total right of use lease liabilities	$	460,408
Weighted average remaining lease terms (years)		12
Weighted average discount rate		5.5	%

The maturities of the Company’s right of use lease liabilities as of December 31, 2019 are as follows:

For the year ended
December 31,	Total
2020	$	84,672
2021		84,018
2022		83,149
2023		61,688
2024		50,448
Thereafter		289,171
TOTAL	$	653,146
Less Interest		(192,738	)
Present value of lease liabilities	$	460,408

The components of right of use lease expenses included in “Selling, General and Administrative Expenses” in the Company’s consolidated statements of operations aggregated approximately $35,000 in 2019.

NOTE 12 – Dividend Payable

On September 30, 2019, the Company announced that its Board of Directors had declared a special cash dividend of $0.50 per share (the “Dividend”). The Dividend is being paid in equal quarterly installments of $0.125 per share which began on November 1, 2019, with the final dividend scheduled to be paid on August 28, 2020. The total amount of future cash dividends to be paid has been accrued in the Company’s consolidated balance sheets as of December 31, 2019.

NOTE 13 – Related Parties

From time to time, the law firm of Wachtel Missry, LLP provides certain legal services to the Company and its subsidiaries. William B. Wachtel, Chairman of the Company’s Board of Directors, is a managing partner of such firm. During the year ended December 31, 2019 and 2018, no services were provided to the Company by Wachtel & Missry, LLP.

As described in more detail in Note 2, Liquidity, and Material Agreements, the Company is party to a management agreement with Empire Aviation, an entity owned by the children of Alvin S. Trenk, the Company’s former Chief Executive Officer and a former member of our Company’s Board of Directors.

32

SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES

Notes To Consolidated Financial Statements

NOTE 14 – Litigation

From time to time, the Company may be a party to one or more claims or disputes which may result in litigation. The Company’s management does not, however, presently expect that any such matters will have a material adverse effect on the Company’s business, financial condition or results of operations.

NOTE 15 – Subsequent Events

In December 2019, the COVID-19 strain of coronavirus was reported in China. The World Health Organization has declared COVID-19 a pandemic. The United States government has already implemented some forms of travel restrictions. For example, on January 30, 2020, the U.S. Department of State issued a Level 4 "do not travel" advisory for China and, in March of 2020, the U.S. government implemented travel restrictions to Canada and parts of Europe. The U.S. government has also implemented quarantine requirements and travel restrictions in connection with the COVID-19 pandemic, among other measures. Future travel restrictions may impact the type of air travel services we provide. The COVID-19 pandemic and public fear of COVID-19 has reduced the demand for our customer’s services, and as of March 17, 2020, all sightseeing tour operations at the Downtown Manhattan Heliport have ceased due to a drop in demand as a result of the ongoing COVID-19 pandemic. The extent of the impact of the COVID-19 on our operational and financial performance will depend on future developments, including the duration and spread of the COVID-19 pandemic and related travel advisories and restrictions and the impact of the COVID-19 on overall demand for air travel, all of which are highly uncertain and cannot be predicted. If we experience significant declines in demand and a suspension of our customer’s operations over an extended period of time, our results of operations for the fiscal year ending December 31, 2020 will be materially adversely affected.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Management, including our President (principal financial officer) and Chief Executive Officer (principal executive officer), have evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Annual Report on Form 10-K. Based upon, and as of the date of that evaluation, our President and our Chief Executive Officer concluded that the disclosure controls and procedures were effective, in all material respects, to ensure that information required to be disclosed in the reports filed and submitted by us under the Exchange Act, is (i) recorded, processed, summarized and reported as and when required, and (ii) is accumulated and communicated to our management, including our President and our Chief Executive Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There has been no change to our internal control over financial reporting during the fourth quarter of the fiscal year covered by this Annual Report on Form 10-K that has materially affected, or that is reasonably likely to materially affect our internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. All internal control systems, no matter how well designed and tested, have inherent limitations, including, among other things, the possibility of human error, circumvention or disregard. Therefore, even those systems of internal control that have been determined to be effective can provide only reasonable assurance that the objectives of the control system are met and may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of management, including our Chief Executive Officer (principal executive officer) and our President (principal financial officer), we conducted an assessment of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the assessment under this framework, management concluded that our internal control over financial reporting was effective as of December 31, 2019.

ITEM 9B. OTHER INFORMATION

None.

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Part III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

The following table contains certain information related to the directors and executive officers of the Company as of December 31, 2019:

Name	Age	Position
William B. Wachtel	65	Director, Chairman of the Board
Ronald J. Ricciardi	58	Director, President & Chief Executive Officer
Samuel Goldstein	41	Director
Marc Chodock	41	Director
Roy Moskowitz	65	Director

Each of our directors is elected at the Annual Meeting of Stockholders to serve until the next Annual Meeting of Stockholders or until his successor is duly elected and qualified. Our officers are appointed annually by the Board of Directors to serve at the discretion of the Board.

Business History

William B. Wachtel – Director, Chairman of the Board

Mr. Wachtel was elected as a director and our Chairman of the Board on March 31, 2005. Mr. Wachtel served as our Chairman until April 8, 2009, when he resigned from such capacity but remained a member of the Board. On October 27, 2011, Mr. Wachtel was re-elected as our Chairman of the Board.

Mr. Wachtel has been a managing partner of Wachtel Missry LLP (previously Wachtel & Missry, LLP, and before that, its predecessor law firm Gold & Wachtel, LLP), since its founding in August 1984. Such firm has provided certain legal services to the Company in the past. He is a co-founder of the Drum Major Institute, an organization carrying forth the legacy of the late Reverend Martin Luther King, Jr.

Mr. Wachtel’s participation is important to our Board of Directors because of his extensive experience advising companies regarding legal issues, which provides him with a depth and breadth of experience that enhances our ability to navigate legal and strategic issues, and because of his extensive experience working with us.

Ronald J. Ricciardi – Director, President and Chief Executive Officer

Mr. Ricciardi was designated as Chief Executive Officer on November 29, 2018 and has served as our President since March 2009. From August 2004 until September 2006, Mr. Ricciardi also served as our Acting Chief Financial Officer. Mr. Ricciardi was a director of Saker’s predecessor entity since its inception in 2003 and continues to serve in that capacity for the current entity. From December 2006 until October 2010, Mr. Ricciardi served as Vice Chairman of the Board. Mr. Ricciardi served as Chairman of the Board from April 2009 until October 2011.

Mr. Ricciardi is a senior executive with extensive general management experience in entrepreneurial and large companies. Before joining Arizona FBO Air and from 2000 - 2003, Mr. Ricciardi was President and CEO of P&A Capital Partners, Inc., an entertainment finance company established to fund the distribution of independent films. From 1999 – 2000, Mr. Ricciardi was also co-founder, Chairman and CEO of eTurn, Inc., a high technology service provider, for which he developed a consolidation strategy, negotiated potential merger and acquisition candidates, prepared private placement materials and executed numerous private, institutional and venture capital presentations. After a management career at Pepsi-Cola Company and the Perrier Group of America, Mr. Ricciardi was President and CEO of Clearidge, Inc., a leading regional consumer products company, where he provided strategic and organizational development, and led a consolidation effort that included 14 transactions, which more than tripled the revenue of Clearidge, Inc. over four years.

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Mr. Ricciardi’s participation is important to our Board of Directors because of his 15 years of experience working in a variety of roles with us, including his service on our Board of Directors, combined with his knowledge of the aviation industry and his extensive management experience, all of which demonstrate his strong commitment to us and make him a valued member of our Board of Directors.

Samuel Goldstein – Director

Mr. Goldstein was appointed as a director on September 21, 2018. 

Mr. Goldstein has served since 2014, and continues to serve, as Deputy Director of the Helicopter Tourism and Jobs Council (“HTJC”). During this time, HTJC successfully negotiated a settlement with the City of New York enabling the helicopter air tour industry to continue operations. Concurrently, Mr. Goldstein was a principal at Kivvit Public Affairs from 2017 to 2018 and served previously as the director of government relations for Selfhelp Community Services, one of New York’s largest senior housing and social service organizations, from 2008 to 2013.

Mr. Goldstein’s participation is important to our Board of Directors because his exposure and outreach skills developed in part as Deputy Director of HTJC, and corresponding knowledge of the local helicopter marketplace, enable Mr. Goldstein to advise the Company on potential courses of action.

Marc Chodock – Director

Mr. Chodock was appointed as a director on June 25, 2015. 

Mr. Chodock has been acting as a private investor since February 2013. Previously, he was a consultant in the New York office of McKinsey & Company and a Principal at MatlinPatterson Global Advisors, where he served on the Board of Directors of four companies. He holds a Bachelor of Science in Economics from the University of Pennsylvania’s Wharton School of Business and a Bachelor of Applied Science in Biomedical Science from the School of Engineering and Applied Science of the University of Pennsylvania.

Mr. Chodock's participation is important to our Board of Directors because of his extensive experience in advising companies by serving on boards as well as his knowledge in depth and breadth of the aviation industry.

Roy P. Moskowitz – Director

Mr. Moskowitz was appointed as a director on June 25, 2015.

Mr. Moskowitz has been the Chief Legal Officer of The New School since September 2006. From 1988 – 2004, Mr. Moskowitz held senior positions of legal oversight for New York educational institutions, including the New York State Education Department, City University of New York, Community School District #2, and the Regional Superintendent of Region 9.

Mr. Moskowitz’ participation is important to our Board of Directors because his extensive experience analyzing legal issues enables Mr. Moskowitz to advise the Company on potential courses of action, particularly when legal topics are involved.

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Family Relationships

There are no family relationships among our directors and officers.

Other Directorships

None of our directors serves as a director of a company (1) with a class of securities registered pursuant to Section 12 of the Exchange Act, (2) subject to Section 15(d) of the Exchange Act, or (3) registered as an investment company under the Investment Company Act of 1940.

Code of Ethics

On May 19, 2006, our Board of Directors adopted a Code of Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions as well as to all of our other employees and directors. Our Code of Ethics is posted on our website at www.sakeraviation.com under the “Investor Relations” tab, and then under the “Corporate Governance” sub-tab. We intend to satisfy any disclosure requirements pursuant to Item 5.05 of Form 8-K regarding any amendment to, or a waiver from, certain provisions of our Code of Ethics by posting such information on our website under the “Investor Relations” section.

Committees of the Board of Directors

There are three committees of the Board of Directors: the Audit Committee comprised of Marc Chodock, Roy P. Moskowitz and Samuel Goldstein; the Nominating Committee comprised of William B. Wachtel and Ronald J. Ricciardi; and the Compensation Committee comprised of Roy P. Moskowitz, Marc Chodock, and Samuel Goldstein.

Delinquent Section 16(a) Reports

Based solely on a review of Forms 3 and 4 and amendments thereto, furnished to us during the fiscal year ended December 31, 2019 and Forms 5 and amendments thereto, furnished to us with respect to the fiscal year ended December 31, 2019, each director and officer timely reported all of his transactions during that most recent fiscal year as required by Section 16(a) of the Exchange Act, except for Messrs. Wachtel, Chodock, and Ricciardi, each of whom filed one late Form 4 reporting one transaction, Mr. Moskowitz, who filed one late Form 4 reporting two transactions, and Mr. Goldstein who filed his initial statement of beneficial ownership on Form 3 late and filed one late Form 4 reporting one transaction.

Corporate Governance

There have been no changes to the procedures by which our security holders may recommend nominees to our Board of Directors since our Board of Directors set forth such policy in our proxy statement for our Annual Meeting of Stockholders held on November 6, 2013.

Our Board of Directors has determined that, of its Audit Committee, Marc Chodock qualifies as a financial expert as such term is defined in applicable SEC rules, and Roy P. Moskowitz, Samuel Goldstein and Marc Chodock qualify as “independent” as such term is defined by the rules of the Nasdaq Stock Market.

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ITEM 11. EXECUTIVE COMPENSATION

COMPENSATION OF EXECUTIVE OFFICERS

The following table sets forth the annual and long-term compensation paid by us during the fiscal years ended December 31, 2019 and 2018 for services performed on our behalf with respect to the person who served as our executive officer as of December 31, 2019.

SUMMARY COMPENSATION TABLE

Name and Principal Position	Year	Salary ($)(1)	All Other Compensation ($)(2)	Total ($)
Ronald J. Ricciardi, President and Chief Executive Officer	2019	175,385	46,315	221,700
	2018	150,000	17,306	167,306

1.

Effective September 1, 2019, Mr. Ricciardi’s base salary was increased from $150,000 to $200,000. Mr. Ricciardi received a base salary in 2018 of $150,000.  Included in Mr. Ricciardi’s 2019 salary is a $10,000 bonus he received pursuant to his employment agreement with the Company.

2.

Pursuant to his employment agreement with the Company, Mr. Ricciardi was granted 5,036 shares of the Company’s common stock on December 5, 2019, which was valued at $28,202. Mr. Ricciardi receives health insurance coverage estimated at a value of approximately $1,067 per month in both 2019 and 2018, and received a match to his 401K contributions from us amounting to approximately $5,300 and $4,500 in 2019 and 2018, respectively.

OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2019

There are no outstanding equity awards at December 31, 2019.

2019 DIRECTOR COMPENSATION TABLE

Name	Fees Earned in Cash ($)(1)	Option Awards ($)(2)	Total ($)
Samuel Goldstein	7,500	18,665	26,165
William B. Wachtel	5,000	18,665	23,665
Marc Chodock	7,500	18,665	26,165
Roy P. Moskowitz	7,750	18,665	26,415

1.

Each non-employee director is entitled to a fee of $1,000 per board meeting and $750 and $500 per committee meeting for committee chairman and committee members, respectively. Each director is also entitled to reimbursement for expenses incurred in connection with attendance at meetings of the Board of Directors.

2.

Each non-employee director is eligible to be granted an annual option to purchase shares of our common stock. On December 1, 2019, the Board of Directors granted each non-employee director an option for their service in 2019. Each option was for 3,333 shares and was priced at $5.60 per share, which was the closing sales price of our common stock on December 1, 2019. The options vest on December 1, 2020 and may be exercised until December 1, 2024. See Item 12. for a description of all outstanding options held by non-employee directors at December 31, 2019. The fair value of the option awards are calculated in accordance with FASB ASC Topic 718.

Employment Agreements 

As disclosed in a Current Report on Form 8-K filed with the SEC on September 06, 2019, effective September 1, 2019, the Company and Ronald J. Ricciardi entered into a new Employment Agreement (the “New Agreement”). Pursuant to the New Agreement, Mr. Ricciardi will continue to serve as the Company’s President and Chief Executive Officer. Among other things, the New Agreement provides for a four-year term with a base salary of $200,000 with subsequent annual base salary increases at the discretion of the Board of Directors. In addition, Mr. Ricciardi is eligible to receive an annual incentive bonus in an amount equal to 25% of the then-applicable base salary earned in the event that the Company meets or exceeds its annual operating plan for earnings before interest, taxes, depreciation and amortization. Mr. Ricciardi also received a stock award upon the execution of the New Agreement. In addition, Mr. Ricciardi is eligible for additional stock awards upon each of the four anniversary dates of this New Agreement. Each of the five stock awards shall be the number of shares equal to the issued and outstanding shares of the Company on the date of each issuance multiplied by one half of one percent. The issuance of such stock awards are to be administered according to the Company’s Equity Compensation Plan, as approved the Company’s stockholders.

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 Additional Narrative Disclosure

We do not offer a defined benefit retirement or pension plan. The Company maintains a 401K Plan (the “401K Plan”) which covers all employees of the Company. Effective January 1, 2020, the Company switched to a Safe Harbor 401K plan. The Safe Harbor 401K Plan stipulates that, going forward, all employees become vested 100% on day one. Employer contributions prior to the change vest over a five-year period on a 20% per year basis. The Company’s Safe Harbor 401K Plan provides for the Company to match each participant's contribution at 100% up to 4% of the employee’s deferral. The employer match prior to the change was 50% up to 6% of the employee’s deferral. Company contributions to the 401K Plan totaled approximately $31,000 and $30,000 for the years ended December 31, 2019 and 2018, respectively.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Beneficial Owners

The following table presents certain information as of March 30, 2020 regarding the beneficial ownership of our common stock by:

●  each of our current executive officer and directors; and

● all of our current directors and executive officer as a group; and

● each other person or entity known by us to own beneficially 5% or more of our issued and outstanding common stock;

Unless otherwise indicated below, the address for each of our directors and officers is 20 South Street, Pier 6 East River, New York, New York 10004. 

	Number of Shares			Percentage of
	of Common Stock			Common Stock
Name of Beneficial Owner	Beneficially Owned			Beneficially Owned (1)
William B. Wachtel (2)		187,280	(3)		18.1	%
Ronald J. Ricciardi (4)		48,670	(5)		4.8	%
Marc Chodock (6)		110,514	(7)		10.8	%
Samuel Goldstein (8)		3,333	(9)		0.3	%
Roy P. Moskowitz (10)		10,458	(11)		1.0	%
All directors and officers as a group (5 in number)		360,255			34.0	%
Ronald I. Heller (12)		64,085	(12)		6.3	%
All Beneficial Holders as a group (6 in number)		424,340			40.3	%

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(1)	The percentages computed in the table are based upon 1,020,135 shares of our common stock, which were outstanding on December 31, 2019. Effect is given, pursuant to Rule 13-d(1)(i) under the Exchange Act, to shares of our common stock issuable upon the exercise of options or warrants currently exercisable or exercisable within 60 days of March 30, 2020.
(2)	William B. Wachtel is our Chairman of the Board and a director.
(3)	The shares of our common stock reported in the table include: (a) 6,467 shares purchased by Mr. Wachtel in the open market; (b) an aggregate of 1,550 shares issued in connection with the cashless exercise of options; (c) 3,333 shares issuable upon the exercise of an option expiring December 1, 2020, which option is currently exercisable; (d) 3,333 shares issuable upon the exercise of an option expiring December 1, 2021, which option is currently exercisable; (e) 3,333 shares issuable upon the exercise of an option expiring December 1, 2022, which option is currently exercisable; (f) 3,333 shares issuable upon the exercise of an option expiring December 1, 2023, which option is currently exercisable. The shares of our common stock reported in the table do not reflect (x) 3,333 shares issuable upon the exercise of an option granted on December 1, 2019, which shall become exercisable on December 1, 2020; and (y) 11,113 shares of our common stock acquired by Wachtel Missry, LLP, which has provided certain legal services for us. Mr. Wachtel is a managing partner of such firm, but does not have sole dispositive or voting power with respect to such firm’s securities.
(4)	Ronald J. Ricciardi is our President, Chief Executive Officer and a director.
(5)	The shares of our common stock reported in the table include 8,846 shares issued in connection with a cashless exercise of an option to purchase 10,000 shares and a stock grant of 5,036 shares in 2019 issued in connection with Mr. Ricciardi’s employment agreement.
(6)	Marc Chodock is a director.
(7)	The shares of our common stock reported in the table include 100,000 shares based on a Schedule 13D filed with the SEC on February 9, 2015. The reporting persons are (i)ACM Value Opportunities Fund I, LP, a Delaware limited partnership (the “Fund”), with respect to the shares of our common stock directly owned by it; (ii) ACM Value Opportunities Fund I GP, LLC, a Delaware limited liability company  (the “General Partner”), as general partner of the Fund, with respect to the shares of our common stock directly owned by the Fund, (iii) Arvice Capital Management, LLC, a Delaware limited liability company (the “Manager”), as manager of the Fund, with respect to the shares of our common stock directly owned by the Fund; and (iv) Mr. Marc Chodock (“Mr. Chodock”), as managing member of the Manager, with respect to the shares of our common stock directly owed by the Fund.  The business address of each of the Reporting Persons is 110 East 25th St., 3rd Floor, New York, New York 10011.  The shares of our common stock reported in the table also include 3,848 shares issued in connection with the cashless exercise of options to purchase 6,666 shares. In addition, the shares of our common stock reported in the table include: (a) 3,333 shares issuable upon the exercise of an option expiring December 1, 2022, which option is currently exercisable and (b) 3,333 shares issuable upon the exercise of an option expiring December 1, 2023, which option is currently exercisable. The shares of our common stock reported in the table do not reflect 3,333 shares issuable upon the exercise of an option granted on December 1, 2019, which shall become exercisable on December 1, 2020.
(8)	Samuel Goldstein is a director.

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(9)	The shares of our common stock reported in the table include 3,333 shares issuable upon the exercise of an option expiring December 1, 2023, which option is currently exercisable. The shares of our common stock in the table do not reflect 3,333 shares issuable upon the exercise of an option granted on December 1, 2019, which shall become exercisable on December 1, 2020.
(10)	Roy P. Moskowitz is a director.
(11)	The shares of our common stock reported in the table include (a) 3,167 shares purchased by Mr. Moskowitz in the open market; (b) 3,958 shares issued in connection with a cashless exercise of options to purchase 6,666 shares; (c) 3,333 shares issuable upon the exercise of an option expiring December 1, 2022, which option is currently exercisable; and (d) 3,333 shares issuable upon the exercise of an option expiring December 1, 2023, which option is currently exercisable. The shares of our common stock reported in the table do not reflect 3,333 shares issuable upon the exercise of an option granted on December 1, 2019, which shall become exercisable on December 1, 2020.
(12)	Ronald I. Heller’s address is c/o Heller Capital Partners, 700 E. Palisade Avenue, Englewood, NJ 07632. Mr. Heller is the beneficial owner of 64,085 shares of common stock. The Heller Family Foundation holds 45,752 shares of common stock and the Ronald I. Heller IRA holds 18,333 shares of common stock. Mr. Heller controls the voting and disposition of such securities held by the Heller Family Foundation and Ronald I. Heller IRA.

Equity Compensation Plan Information

The following table sets forth certain information, as of December 31, 2019, with respect to securities authorized for issuance under equity compensation plans. The only security being so offered is our common stock.

	Number of Securities to be issued upon exercise of outstanding options, warrants and rights		Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)		(b)		(c)
Equity compensation plans approved by security holders		53,328	$	2.655		196,672
Equity compensation plans not approved by security holders		—	$	—		—
Total		53,328	$	2.655		196,672

We received stockholder approval on December 12, 2006 for the Saker Aviation Services, Inc. Stock Option Plan of 2005 which relates to 250,000 shares of our common stock. Additionally, we received stockholder approval on December 5, 2019 for the Saker Aviation Services Inc. 2019 Stock Incentive Plan, which made 185,000 shares of our common stock were available for award under the plan.

On February 27, 2019, the Company filed with the Secretary of State of the state of Nevada a certificate of amendment to our articles of incorporation. The amendment provided for a reverse stock split (the “Reverse Split”) of the Company’s outstanding shares of common stock at a ratio of 1-for-30. This amendment further provided for a reduction in the number of authorized shares of Common Stock to 3,333,334, as well as for a reduction in the number of authorized shares of preferred stock to 333,306 (the Authorized Share Reduction”). The Company’s intention to effect both the Reverse Split and the Authorized Share Reduction were previously disclosed in a definitive information statement on Schedule 14A filed on July 13, 2017 and in a current report on Form 8-K filed on August 23, 2017. The amendment had an effective date and time of 12:01 a.m. Eastern Time on March 1, 2019 for stockholders of record on February 27, 2019.

41

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Certain Relationships and Related Transactions

Our Board of Directors adopted a Policy and Procedure Governing Related Party Transactions on April 26, 2007, which policy delegates certain functions related to the review and approval of related party transactions to the audit committee and the compensation committee.

Pursuant to a management agreement with Empire Aviation, which is owned by the children of Alvin S. Trenk, our former Chief Executive Officer and a former director, the Company incurred management fees of approximately $2,200,000 and $1,777,000 during the twelve months ended December 31, 2019 and 2018, respectively, which is recorded in administrative expenses.  The Company and Empire Aviation have also contributed to the Helicopter Tourism and Jobs Council (“HTJC”), an association that lobbies on behalf of the helicopter air tour industry, and which had engaged in discussions with the Mayor’s office. Mr. Goldstein, one of our directors, serves as deputy director of HTJC. Mr. Trenk is also an active participant with HTJC, which is managed by his grandson. 

On February 6, 2018, the Company was issued a note by one of its customers at the Heliport. The note scheduled approximately $750,000 in receivables payable by such customer, had a maturity date of October 31, 2018, and carried a 7.5% rate of interest. As of December 31, 2019, all amounts due under the note have been paid. During the second quarter of 2018, Mr. Trenk acquired controlling interest in this customer.

Director Independence

Our Board of Directors made the determination of director independence in accordance with the definition set forth in the Nasdaq Stock Market rules. Under such definition, Marc Chodock, Roy P. Moskowitz and Samuel Goldstein qualify as independent.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees. The aggregate fees billed for professional services rendered by the principal accountant were approximately $97,100 and $94,800 by Kronick Kalada Berdy & Co. for 2019 and 2018, respectively, for the audits of our annual financial statements for the fiscal years ended December 31, 2019 and 2018, and the reviews of the financial statements included in the Company’s Quarterly Reports on Forms 10-Q for those fiscal years.

Audit-Related Fees. There were no fees billed for professional services categorized as Audit-Related Fees by the principal accountant for the fiscal years ended December 31, 2019 and 2018.

Tax Fees. For the years ended December 31, 2019 and 2018, the aggregate fees billed by the principal accountant for services categorized as Tax Fees were $15,000 and $0, respectively.

All Other Fees. There were no fees billed for services categorized as All Other Fees by the principal accountant for the fiscal years ended December 31, 2019 and 2018.

Audit Committee Policies and Procedures. The audit committee of the Board of Directors must pre-approve all auditing services and permitted non-audit services (including the fees and terms thereof) to be performed for us by our independent registered public accountants, subject to the de minimus exceptions for non-audit services described in Section 10A(i)(1)(B) of the Exchange Act, which nonetheless must be approved by our audit committee prior to the completion of the audit. Each year the audit committee approves the engagement of our independent registered public accountant to audit our financial statements, including the associated fee, before the filing of the previous year’s Annual Report on Form 10-K. At the beginning of the fiscal year, the audit committee will evaluate other known potential engagements of the independent registered public accountants, including the scope of work proposed to be performed and the proposed fees, and approve or reject each service, taking into account whether the services are permissible under applicable law and the possible impact of each non-audit service on the independent registered public accountant’s independence from management. At each such subsequent meeting, the registered public accountants and management may present subsequent services for approval. Typically, these would be services such as due diligence for an acquisition, that would not have been known at the beginning of the year.

Since December 17, 2009 when our Board of Directors initially authorized the engagement of Kronick Kalada Berdy & Co., pursuant to the SEC rules stating that an auditor is not independent of an audit client if the services it provides to the client are not appropriately approved, each subsequent engagement of Kronick Kalada Berdy & Co, has been approved in advance by the audit committee of the Board of Directors, and none of these engagements made use of the de minimus exception to the pre-approval contained in Section 10A(i)(1)(B) of the Exchange Act.

42

Part VI

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a) Financial Statements

The consolidated financial statements of Saker Aviation Services, Inc. and subsidiaries as of December 31, 2019 and 2018 and for each of the years then ended, and the Report of Independent Registered Public Accounting Firm thereon, are included herein as shown in the “Table of Contents to Consolidated Financial Statements.”

(b) Financial Statement Schedules

None.

(c) Exhibits

Exhibit No.	Description of Exhibit
3.1	Amended and Restated Articles of Incorporation, incorporated by reference from Exhibit 3(i)(6) to the Company’s Current Report on Form 8-K filed on December 18, 2006.
3.2	Articles of Merger (Changing name to Saker Aviation Services, Inc.), incorporated by reference from Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on October 1, 2009.
3.3	Certificate of Amendment to Articles of Incorporation of Saker Aviation Services, Inc., incorporated by reference from Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on February 28, 2019.
3.4	Bylaws of Saker Aviation Services, Inc., incorporated by reference from Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on October 1, 2009.
4.1*	Description of Securities
10.1	Stock Option Plan of 2005, incorporated by reference from Exhibit 10-18 to the Company’s Annual Report on Form 10-KSB for the fiscal year ended December 31, 2005.
10.2	Concession Agreement between FirstFlight, Inc. and the City of New York by and through New York City of Department of Small Business Services, dated October 7, 2008, incorporated by reference from Exhibit 33.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015.
10.3	2019 Stock Incentive Plan, incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 12, 2019.
10.4	Amendment to NYC Heliport Concession Agreement, dated as of July 13, 2016, incorporated by reference from Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2016.
10.5	Loan Agreements entered into by and between the Company and KeyBank, dated as of March 15, 2018, incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 21, 2018.
10.6	Modified Loan Agreement entered into by and between the Company and KeyBank, dated as October 11, 2018, incorporated by reference from Exhibit 10.13 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018.

43

10.7	Employment Agreement, dated September 1, 2019, by and between the Company and Ronald J. Ricciardi, incorporated by reference from Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on September 6, 2019.
23.1*	Consent of Independent Registered Public Accounting Firm.
31.1*	Certification pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act (principal financial officer).
31.2*	Certification pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act (principal executive officer).
32.1*	Certification pursuant to Section 1350 Certification of Sarbanes-Oxley Act of 2002.

101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	Extension Definition XBRL Taxonomy Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

*Filed herewith

+Management compensation plan or arrangement

ITEM 16. FORM 10-K SUMMARY

None.

44

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Saker Aviation Services, Inc.
Date:  March 30, 2020	By:	/s/ Ronald J. Ricciardi
		Ronald J. Ricciardi
		President, Principal Executive Officer, Principal Financial Officer, and Principal Accounting Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

SIGNATURE	TITLE	DATE
	Chairman of the Board,
/s/ William B. Wachtel	Director	March 30, 2020
William B. Wachtel
/s/ Rnald J. Ricciardi	President, Chief Executive Officer, Director	March 30, 2020
Ronald J. Ricciardi
/s/ Marc Chodock	Director	March 30, 2020
Marc Chodock
/s/ Roy P. Moskowitz	Director	March 30, 2020
Roy P. Moskowitz
/s/ Samuel Goldstein	Director	March 30, 2020
Samuel Goldstein

45

EX-4.1

Exhibit 4.1

DESCRIPTION OF SECURITIES

The following is a brief description of the common stock, par value $0.03 per share (the “common stock”), of Saker Aviation Services, Inc. (the “Company,” “we,” “our” or “us”), which is the only security of the Company registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended. This description is not complete, and we qualify it by referring to our amended and restated articles of incorporation, as amended (the “Articles of Incorporation”) and our bylaws, as amended (the “Bylaws”).

Our Articles of Incorporation authorizes us to issue 3,666,640 shares of capital stock, divided into two classes:

● 3,333,334 shares of common stock, $0.03 par value per share; and

● 333,306 shares of preferred stock, $0.03 par value per share (“preferred stock”).

Common Stock

Subject to any rights of holders of our preferred stock, holders of shares of our common stock are entitled to share equally on a per share basis in such dividends as may be declared by the board of directors out of funds legally available therefor. Upon our liquidation, dissolution or winding up, after payment of creditors and holders of outstanding shares of our preferred stock, if any, the remaining assets of the Company, if any, will be divided pro rata on a per share basis among the holders of shares of our common stock. Our shares of our common stock are not subject to any liability for further assessments. There are no conversion or redemption privileges nor any sinking fund provisions with respect to our common stock. Our common stock is not subject to call. The holders of our common stock do not have any preemptive or other subscription rights.

Shares of our common stock have one vote for each share entitled to vote on matters at all stockholders’ meetings. The holders of our common stock do not have cumulative voting rights.

Effects on our Common Stock if We Issue Preferred Stock

Our Articles of Incorporation provides our board of directors the authority, without further action by the stockholders, to issue up to 333,306 shares of preferred stock in one or more series. Our board of directors has the authority to determine the terms of each series of preferred stock, within the limits of the Articles of Incorporation and the laws of the state of Nevada. These terms include the number of shares in a series, dividend rights, liquidation preferences, terms of redemption, conversion rights, and voting rights.

The issuance of any preferred stock may negatively affect the holders of our common stock. These possible negative effects include diluting the voting power of shares of our common stock and affecting the market price or value of our common stock.

Anti-Takeover Effects of Provisions of our Articles of Incorporation and Bylaws

Preferred Stock

Our board of directors, without stockholder approval, has the authority under our Articles of Incorporation to issue preferred stock with rights superior to the rights of the holders of common stock. As a result, preferred stock, while not intended as a defensive measure against takeovers, could be issued quickly and easily, could adversely affect the rights of holders of common stock and could be issued with terms calculated to delay or prevent a change of control of the Company or make removal of management more difficult.

Restrictions on Call of Special Meetings

Our Bylaws provide that special meetings of stockholders can only be called by the board of directors, the chair of the board, the president of the Company, or chief executive officer of the Company, or upon the request of the holders of at least one-tenth of the outstanding shares entitled to vote at the meeting. Our stockholders are permitted our Bylaws, under certain circumstances, to act by written consent in lieu of a meeting.

Amendment of Bylaws

Our Bylaws grant both our stockholders and our board of directors, at any meeting, the power to amend or repeal our bylaws.

E-1

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Saker Aviation Services, Inc.

New York, New York

We consent to the incorporation by reference in the Registration Statement on Form S-8 (File No. 333-235477) of our report dated March 30, 2020, relating to the consolidated financial statements of Saker Aviation Services, Inc. and Subsidiaries (the “Company”) appearing in this Annual Report on Form 10-K for the year ended December 31, 2019.

/s/ Kronick Kalada Berdy & Co. P.C.

Kingston, Pennsylvania

March 30, 2020

E-1

EX-31.1

EXHIBIT 31.1

Certification of President

(principal financial officer)

Pursuant To Rule 13a-14(a)/15d-14(a)

I, Ronald J. Ricciardi, certify that:

1.    I have reviewed this Annual Report on Form 10-K of Saker Aviation Services, Inc.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:        March 30, 2020

By:  /s/ Ronald J. Ricciardi

Ronald J. Ricciardi

President (principal financial officer)

E-1

EX-31.2

EXHIBIT 31.2

Certification of Chief Executive Officer

(principal executive officer)

Pursuant To Rule 13a-14(a)/15d-14(a)

I, Ronald J. Ricciardi, certify that:

1.    I have reviewed this Annual Report on Form 10-K of Saker Aviation Services, Inc.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:           March 30, 2020

By:  /s/ Ronald J. Ricciardi

Ronald J. Ricciardi

Chief Executive Officer (principal executive officer)

E-1

EX-32.1

EXHIBIT 32.1

Section 1350 Certification

Pursuant to U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (“Section 906”), Ronald J. Ricciardi, the Chief Executive Officer (principal executive officer) and President (principal financial officer) of Saker Aviation Services, Inc., does hereby certify that:

1.   The Annual Report on Form 10-K for the year ended December 31, 2019 (the “Report”) of Saker Aviation Services, Inc. fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of Saker Aviation Services, Inc.

Date: March 30, 2020	By:	/s/ Ronald J. Ricciardi
		Ronald J. Ricciardi
		Chief Executive Officer (principal executive officer)
Date:  March 30, 2020	By:	/s/ Ronald J. Ricciardi
		Ronald J. Ricciardi
		President (principal financial officer)

A signed original of this written statement required by Section 906 has been provided to Saker Aviation Services, Inc. and will be retained by Saker Aviation Services, Inc., and furnished to the Securities and Exchange Commission or its staff upon request. 

E-1

XML

Note 9 - Stockholders' Equity (Details Textual) - shares	Dec. 12, 2006	Dec. 31, 2019	Feb. 27, 2019	Dec. 31, 2018
Preferred Stock, Shares Authorized		333,306	333,306	333,306
Preferred Stock, Shares Issued, Total		0		0
Preferred Stock, Shares Outstanding, Ending Balance		0		0
The 2005 Plan [Member]
Common Stock, Capital Shares Reserved for Future Issuance	250,000
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent	100.00%
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant		196,672		186,673
The 2005 Plan [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	5 years
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	10 years

XML

Note 10 - Employee Benefit Plan (Details Textual) - USD ($)		12 Months Ended
	Jan. 01, 2020	Dec. 31, 2019	Dec. 31, 2018
Plan 401K [Member]
Defined Contribution Plan, Employers Matching Contribution, Annual Vesting Percentage		20.00%
Defined Contribution Plan, Employers Matching Contribution, Vesting Period		5 years
Defined Contribution Plan, Employer Matching Contribution, Percent of Match		50.00%
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay		6.00%
Defined Contribution Plan, Employer Discretionary Contribution Amount		$ 31,000	$ 30,000
Subsequent Event [Member] | Safe Harbor 401K Plan [Member[
Defined Contribution Plan, Employers Matching Contribution, Annual Vesting Percentage	100.00%
Defined Contribution Plan, Employer Matching Contribution, Percent of Match	100.00%
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay	4.00%

XML

Note 7 - Notes Payable (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Notes Payable [Table Text Block]

Notes payable consist of:	December 31,
	2019		2018
Key Bank Term Note, paid in full in 2019.	$	---		112,117
Commerce Bank Truck Lease, converted to Right of use lease payable in 2019.		---		119,004
Subtotal		---		231,121
Less: current portion		---		(57,722	)
Total – long term	$	---	$	173,399

XML

Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, FFH and FBOGC. All significant inter-company accounts and transactions have been eliminated in consolidation.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s significant estimates include depreciation, amortization, impairment of goodwill and intangibles, stock-based compensation, allowance for doubtful accounts and deferred tax assets.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash

The Company maintains its cash with various financial institutions which often exceeds federally insured limits. The Company has

not

experienced any losses from maintaining cash accounts in excess of federally insured limits. As part of its cash management process, the Company periodically reviews the relative credit standing of these financial institutions.

Accounts Receivable [Policy Text Block]

Accounts Receivable

,

T

rade

and Revenue Concentration

The Company extends credit to large and mid-size companies for products and services. The Company has concentrations of credit risk in that

73.0%

of the balance of its accounts receivable at

December 31, 2019

is made up of only

four

customers. At

December 31, 2019,

accounts receivable from the Company’s

four

largest accounts amounted to approximately

$241,298

(

35.6%

),

$115,864

(

17.1%

),

$111,149

(

16.4%

), and

$26,523

(

3.9%

), respectively. In addition, these

four

customers represented approximately

54.7%

of our revenue in

2019.

At

December 31, 2018,

accounts receivable from the Company’s

four

largest accounts amounted to approximately

$285,350

(

33.7%

),

202,080

(

23.8%

),

$101,678

(

12.0%

), and

$12,671

(

1.5%

), respectively. In addition, these

four

customers represented approximately

59.7%

of our revenue in

2018.

Accounts receivable are carried at their estimated collectible amounts. Accounts receivable are periodically evaluated for collectability and the allowance for doubtful accounts is adjusted accordingly. We determine collectability based on our management experience and knowledge of the customers.

Inventory, Policy [Policy Text Block]

Inventories

Inventories consist primarily of maintenance parts and aviation fuel and are stated at the lower of cost or net realizable value determined by the

first

-in,

first

out method.

Property, Plant and Equipment, Policy [Policy Text Block]

Property and Equipment

Property and equipment is stated at cost. Depreciation is provided primarily using the straight-line method over the estimated useful lives as set forth in footnote

5.

Amortization of leasehold improvements is provided using the straight-line method over the shorter of their estimated useful life or lease term, including renewal option periods expected to be exercised. Maintenance and repairs are charged to expense as incurred; costs of major additions and betterments are capitalized. When property and equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is reflected in income.

Goodwill and Intangible Assets, Policy [Policy Text Block]

Goodwill and Intangible Assets

Goodwill and intangibles that are deemed to have indefinite lives are

not

amortized but, instead, are to be reviewed at each reporting period for impairment. The Company assessed potential impairment of goodwill using qualitative factors by considering various factors including macroeconomic conditions, industry and market conditions, cost factors, a sustained share price or market capitalization decrease and any reporting unit specific events. The Company performed an analysis of its goodwill and intangible assets at

December 31, 2019

and

2018.

Lessee, Leases [Policy Text Block]

Leases

At

December 31, 2019,

our consolidated balance sheets include a right of use asset of approximately

$495,000,

a long-term lease liability of approximately

$400,000,

and a short-term liability of approximately

$61,000.

Revenue [Policy Text Block]

Revenue Recognition

The Company recognizes revenue from ground-based services, such as fueling and aircraft storage, and aircraft maintenance and repair services. Revenue for the sale of ground-based services is recognized as a sale of services at the time the service is performed and provided to customers. Revenue for the sale of aircraft fuel is recognized at the time products are delivered to customers. Customers are invoiced at the time the services are performed and the associated revenue is recognized in the period it is earned.

Revenue from aircraft storage services is recognized monthly based upon agreement. Aircraft maintenance and repair service revenue is recognized over time as all of the performance obligations are met. Performance obligations are satisfied when control of the aircraft has been transferred back to the customer.

In

2014,

the Financial Accounting Standard Board (the “FASB”) issued ASC

606,

Revenue from Contracts with Customers (“ASC

606”

), replacing the existing accounting standard and industry specific guidance for revenue recognition with a

five

-step model for recognizing and measuring revenue from contracts with customers. The underlying principle of the new standard is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. ASC

606

became effective on

January 1, 2018

and we adopted it using the modified retrospective method applied to open contracts and only to the version of the contracts in effect as of

January 1, 2018.

Prior period amounts have

not

been adjusted and continue to be reflected in accordance with our historical accounting. There was

no

impact on the consolidated financial statements and

no

cumulative effect adjustment was recognized.

Customer Deposits [Policy Text Block]

Customer Deposits

Customer deposits consist of amounts that customers are required to remit in advance to the Company in order to secure payment for future purchases and services.

Advertising Cost [Policy Text Block]

Advertising

The Company expenses all advertising costs as incurred. Advertising expense for the years ended

December 31, 2019

and

2018

was approximately

$29,840

and

$33,118,

respectively.

Income Tax, Policy [Policy Text Block]

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between their financial statement carrying amounts and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income or loss in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company recognizes the tax benefits of uncertain tax positions only where the position is “more likely than

not”

to be sustained assuming examination by tax authorities. Management has analyzed the Company’s tax positions, and has concluded that

no

liability should be recorded related to uncertain tax positions taken.

Deferred tax assets are subject to a valuation allowance because it is more likely than

not

that certain of the deferred tax assets will

not

be realized in future periods. The Company files income tax returns in the United States (federal) and in various state and local jurisdictions. In most instances, the Company is

no

longer subject to federal, state and local income tax examinations by tax authorities for years prior to

2016.

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair Value of Financial Instruments

The reported amounts of the Company’s financial instruments, including accounts receivable, accounts payable and accrued liabilities, approximate their fair value due to their short maturities. The carrying amounts of debt approximate fair value because the debt agreements provide for interest rates that approximate market. The carrying value of the note receivable approximated fair value because it was discounted at a current market rate.

Earnings Per Share, Policy [Policy Text Block]

Net Income Per Common Share

Basic net income per share applicable to common stockholders is computed based on the weighted average number of shares of the Company’s common stock outstanding during the periods presented. Diluted net income per share reflects the potential dilution that could occur if securities or other instruments to issue common stock were exercised or converted into common stock. Potentially dilutive securities, consisting of options and warrants, are excluded from the calculation of the diluted income per share when their exercise prices are greater than the average market price of the common stock during the period or when their inclusion would be antidilutive. 

The following table sets forth the components used in the computation of basic and diluted income per share:

	For the Year Ended December 31,
		2019(1)	2018(1)
Weighted average common shares outstanding, basic		1,008,979	1,029,001
Common shares upon exercise of options		12,886	10,598
Weighted average common shares outstanding, diluted		1,021,865	1,039,599

( 1 ) Common shares of 40,402 and 39,402 underlying outstanding stock options for the years ended December 31, 2019 and 2018, respectively, were excluded from the computation of diluted earnings per share as their inclusion would be antidilutive.

Share-based Payment Arrangement [Policy Text Block]

Stock

-

Based Compensation

Stock-based compensation expense for all share-based payment awards are based on the estimated grant-date fair value. The Company recognizes these compensation costs over the requisite service period of the award, which is generally the option vesting term. For each of the years ended

December 31, 2019

and

2018,

the Company incurred stock based compensation of

$33,997

.

Such amounts have been recorded as part of the Company’s selling, general and administrative expenses in the accompanying consolidated statements of operations. As of

December 31, 2019,

the unamortized fair value of the options totaled

$74,660

 and the weighted average remaining amortization period of the options approximated

five

years.

Option valuation models require the input of highly subjective assumptions, including the expected life of the option. Because the Company's employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do

not

necessarily provide a reliable single measure of the fair value of its employee stock options.

The fair value of each share-based payment award granted during the years ended

December 31, 2019

and

2018

were estimated using the Black-Scholes option pricing model with the following weighted average fair values:

	For the Year Ended December 31,
	2019	2018
Dividend yield	0%	0%
Expected volatility	910%	740%
Risk-free interest rate	1.6%	2.5%
Expected lives (years)	5.0	5.0

The weighted average fair value of the options on the date of grant, using the fair value based methodology during the years ended

December 31, 2019

and

2018,

was

$5.16

and

$3.03,

respectively.

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Adopted Accounting Pronouncements

In

February 2016,

the FASB issued ASU

No.

2016

-

02,

“Leases” (“ASU

2016

-

02”

), which requires an entity to recognize assets and liabilities on the balance sheet for the rights and obligations created by leased assets and provide additional disclosures. ASU

2016

-

02

became effective for us on

January 1, 2019

and we have adopted the new standard using a modified retrospective approach. The adoption of ASU

2016

-

02

did

not

have a material effect on the Company’s consolidated financial statements.

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Note 3 - Summary of Significant Accounting Policies - Fair Value of Share-based Payment Awards Granted (Details)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Dividend yield	0.00%	0.00%
Expected volatility	910.00%	740.00%
Risk-free interest rate	1.60%	2.50%
Expected lives (years) (Year)	5 years	5 years

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Note 5 - Property and Equipment - Summary of Property and Equipment (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Property, Plant and Equipment, Gross	$ 3,999,804	$ 4,018,803
Less: accumulated depreciation and amortization	(3,676,488)	(3,630,731)
Property and equipment, net	323,316	388,072
Air Transportation Equipment [Member]
Property, Plant and Equipment, Gross	$ 56,000	56,000
Air Transportation Equipment [Member] | Minimum [Member]
Property, Plant and Equipment, Useful Life (Year)	7 years
Air Transportation Equipment [Member] | Maximum [Member]
Property, Plant and Equipment, Useful Life (Year)	12 years
Vehicles [Member]
Property, Plant and Equipment, Gross	$ 396,483	467,972
Vehicles [Member] | Minimum [Member]
Property, Plant and Equipment, Useful Life (Year)	5 years
Vehicles [Member] | Maximum [Member]
Property, Plant and Equipment, Useful Life (Year)	10 years
Office Equipment [Member]
Property, Plant and Equipment, Gross	$ 452,520	409,260
Office Equipment [Member] | Minimum [Member]
Property, Plant and Equipment, Useful Life (Year)	3 years
Office Equipment [Member] | Maximum [Member]
Property, Plant and Equipment, Useful Life (Year)	7 years
Tools, Dies and Molds [Member]
Property, Plant and Equipment, Gross	$ 81,847	81,847
Tools, Dies and Molds [Member] | Minimum [Member]
Property, Plant and Equipment, Useful Life (Year)	3 years
Tools, Dies and Molds [Member] | Maximum [Member]
Property, Plant and Equipment, Useful Life (Year)	10 years
Leasehold Improvements [Member]
Property, Plant and Equipment, Gross	$ 2,812,594	2,803,724
Leasehold Improvements [Member] | Minimum [Member]
Property, Plant and Equipment, Useful Life (Year)	10 years
Leasehold Improvements [Member] | Maximum [Member]
Property, Plant and Equipment, Useful Life (Year)	20 years
Building [Member]
Property, Plant and Equipment, Gross	$ 200,000	$ 200,000
Building [Member] | Minimum [Member]
Property, Plant and Equipment, Useful Life (Year)	7 years
Building [Member] | Maximum [Member]
Property, Plant and Equipment, Useful Life (Year)	17 years

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Note 12 - Dividend Payable

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Dividends Payable Disclosures [Text Block]

NOTE

12

–

Dividend Payable

On

September 30, 2019,

the Company announced that its Board of Directors had declared a special cash dividend of

$0.50

per share (the “Dividend”). The Dividend is being paid in equal quarterly installments of

$0.125

per share which began on

November 1, 2019,

with the final dividend scheduled to be paid on

August 28, 2020.

The total amount of future cash dividends to be paid has been accrued in the Company’s consolidated balance sheets as of

December 31, 2019.

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Note 8 - Income Taxes

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE

8

–

Income Taxes

The Company’s deferred tax assets consisted of the following: 

	December 31,
Deferred tax assets:	2019			2018
Stock based compensation	$	44,000		$	50,000
Goodwill and intangibles		3,000			21,000
Property and equipment		471,000			486,000
Total deferred tax assets		518,000			557,000
Valuation Allowance		(42,000	)		(50,000	)
Deferred tax asset – net of valuation allowance	$	476,000		$	507,000
Change in valuation allowance	$	8,000		$	---

The provision for income taxes using the statutory federal tax rate as compared to the Company's effective tax rate is summarized as follows:	December 31,
	2019			2018
Tax expense at statutory rate		21.0	%		21.0	%
State and local income taxes, net of federal		16.4	%		17.7	%
Effective income tax expense rate		37.4	%		38.7	%

On

December 22, 2017,

the

2017

Tax Cut and Jobs Act (the “Tax Act”) was enacted into law and the new legislation contains several key tax provisions, including a reduction of the corporate income tax rate to

21%

effective

January 1, 2018,

among others. We are required to recognize the effect of the tax law changes in the period of enactment, such as determining the estimated transition tax, re-measuring our U.S. deferred tax assets and liabilities at a

21%

rate as well as reassessing the net realizability of our deferred tax assets and liabilities. 

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Note 4 - Inventories

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Inventory Disclosure [Text Block]

NOTE

4

–

Inventories

Inventory consists primarily of aviation fuel, which the Company dispenses to its customers, and parts inventory as a result of the acquisition of Aircraft Services. The Company also maintains fuel inventories for commercial airlines, to which it charges into-plane fees when servicing commercial aircraft.

Inventories consist of the following:

	December 31,
	2019		2018
Parts inventory	$	87,625	$	82,384
Fuel inventory		79,497		76,761
Other inventory		14,082		11,720
Total inventory	$	181,204	$	170,865

Included in fuel inventory are amounts held for

third

parties of

$25,804

and

$37,675

as of

December 31, 2019

and

2018,

respectively, with an offsetting liability included as part of accrued expenses.

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Note 1 - Nature of Operations

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

NOTE

1

-

Nature of Operations

Saker Aviation Services, Inc. (“Saker”), through its subsidiaries (collectively the “Company”), operates in the aviation services segment of the general aviation industry, in which it serves as the operator of a heliport and a fixed base operation (“FBO”), and as a provider of aircraft maintenance, repair and overhaul (“MRO”). FBOs provide ground-based services, such as fueling and aircraft storage for general aviation, commercial and military aircraft, and other miscellaneous services.

FirstFlight Heliports, LLC d/b/a Saker Aviation Services (“FFH”), a wholly-owned subsidiary, operates the Downtown Manhattan Heliport via a concession agreement with the City of New York. FBO Air Garden City, Inc. d/b/a Saker Aviation Services (“FBOGC”), a wholly-owned subsidiary provides FBO and MRO services in Garden City, Kansas.

XML

Consolidated Balance Sheets (Parentheticals) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Property and equipment, accumulated depreciation	$ 3,676,488	$ 3,630,731
Preferred stock, par value (in dollars per share)	$ 0.03	$ 0.03
Preferred stock, shares authorized (in shares)	333,306	333,306
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.03	$ 0.03
Common stock, shares authorized (in shares)	3,333,334	3,333,334
Common stock, shares issued (in shares)	1,020,135	1,006,768
Common stock, shares outstanding (in shares)	1,020,135	1,006,768

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Note 3 - Summary of Significant Accounting Policies - Computation of Basic Net Income Per Share (Details) - shares		12 Months Ended
		Dec. 31, 2019	Dec. 31, 2018
Weighted average common shares outstanding, basic (in shares)	[1]	1,008,979	1,029,001
Common shares upon exercise of options (in shares)	[1]	12,886	10,598
Weighted average common shares outstanding, diluted (in shares)	[1]	1,021,865	1,039,599

[1] Common shares of 40,402 and 39,402 underlying outstanding stock options for the years ended December 31, 2019 and 2018, respectively, were excluded from the computation of diluted earnings per share as their inclusion would be antidilutive.

XML

Note 5 - Property and Equipment (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Depreciation, Depletion and Amortization, Total	$ 124,000	$ 472,000

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Note 9 - Stockholders' Equity

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

NOTE

9

–

Stockholders’ Equity

Common Stock

A summary of the Company’s shares of Common Stock outstanding at

December 31, 2019

is presented in the table below:

:	Number of shares outstanding
January 1, 2018		1,070,586
Repurchase and cancellation of shares of Common Stock		(64,084	)
Shares issued in connection with exercise of stock options		266
December 31, 2018		1,006,768
Shares issued in connection with Reverse Split		525
Shares issued in connection with exercise of stock options		7,806
Shares issued in connection with Employment Agreement		5,036
December 31, 2019		1,020,135

Stock Options

On

August 27, 2019,

at the Company’s Annual Meeting, the stockholders of the Company approved the Stock Incentive Plan of

2019

(”the “Plan”). Also included are outstanding warrants granted under the Stock Option Plan of

2005,

which was approved during the Annual Meeting on

December 12, 2006.

The Plan is administered by the Company’s Compensation Committee and provides for

250,000

shares of common stock to be reserved for issuance under the Plan. Directors, officers, employees, and consultants of the Company are eligible to participate in the Plan. The Plan provides for the awards of incentive and non-statutory stock options. The Compensation Committee determined the vesting schedule to be up to

five

years at the time of grant of any options under the Plan, and unexercised options will expire in up to

ten

years. The exercise price is to be equal to at least

100%

of the fair market value of a share of the common stock, as determined by the Compensation Committee, on the grant date. The fair value of stock options are calculated in accordance with FASB ASC Topic

718.

As of

December 31, 2019

and

2018,

there were

196,672

and

186,673

shares available for grant as options under the Plan, respectively.

Details of all options outstanding under the Plan are presented in the table below:

	Number of Options			Weighted Average Exercise Price
Balance, December 31, 2017		56,661		$	2.606
Granted		13,332			2.400
Exercised		(6,666	)		2.310
Balance, December 31, 2018		63,327		$	2.594
Granted		13,332			5.600
Exercised		(13,332	)		2.350
Expired		(9,999	)		2.550
Balance, December 31, 2019		53,328		$	3.391

A summary of the Company’s stock options outstanding at

December 31, 2019

is presented in the table below:

Exercise Price	Outstanding	Weighted average remaining contractual life of options (in years)	Exercisable	Intrinsic Value
$5.60	13,332	4.92	---	$	---
$2.40	13,332	3.92	13,332	$	20,225
$3.24	13,332	2.92	13,332	$	9,026
$2.25	6,666	1.92	6,666	$	11,113
$2.40	6,666	.92	6,666	$	10,113
TOTALS	53,328		39,996	$	50,477

Warrants

The company does

not

have any warrants outstanding as of

December 31, 2019.

Preferred Stock

As of

December 31, 2019

and

2018,

the Company has

333,306

shares of preferred stock authorized and

none

of which is issued and outstanding.  On

February 27, 2019,

the Company filed with the Secretary of State of the state of Nevada a certificate of amendment o our articles of incorporation. The amendment provided for, among other things, a reduction in the number of authorized shares of preferred stock to

333,306.

The Company’s Board of Directors currently has the right, with respect to the authorized shares of our preferred stock, to authorize the issuance of

one

or more series of preferred stock with such voting, dividend and other rights as the directors determine. As of

December 31, 2019

and

2018,

there were

no

shares of preferred stock outstanding. 

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Note 5 - Property and Equipment

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

NOTE

5

–

Property and Equipment

Property and equipment consist of the following:

	December 31,						Estimated
	2019			2018			Useful Life (years)
Aircraft	$	56,000		$	56,000		7	–	12
Vehicles		396,483			467,972		5	–	10
Office furniture and equipment		452,520			409,260		3	–	7
Tools and shop equipment		81,847			81,847		3	–	10
Leasehold improvements		2,812,594			2,803,724		10	–	20
Building/fuel farm		200,000			200,000		7	–	17
Total		3,999,804			4,018,803
Less: accumulated depreciation and amortization		(3,676,488	)		(3,630,731	)
Property and equipment, net	$	323,316		$	388,072

Depreciation and amortization expense for the years ended

December 31, 2019

and

2018

was approximately

$124,000

and

$472,000,

respectively.

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Note 13 - Related Parties

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

NOTE

13

–

Related Parties

From time to time, the law firm of Wachtel Missry, LLP provides certain legal services to the Company and its subsidiaries. William B. Wachtel, Chairman of the Company’s Board of Directors, is a managing partner of such firm. During the year ended

December 31, 2019

and

2018,

no

services were provided to the Company by Wachtel & Missry, LLP.

As described in more detail in Note

2,

Liquidity, and Material Agreements, the Company is party to a management agreement with Empire Aviation, an entity owned by the children of Alvin S. Trenk, the Company’s former Chief Executive Officer and a former member of our Company’s Board of Directors.

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Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 667,644	$ 311,536
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	124,264	472,067
Stock based compensation	33,997	33,997
Changes in operating assets and liabilities:
Accounts receivable, trade	(106,267)	240,586
Inventories	(10,339)	(7,736)
Prepaid expenses and other current assets	271,830	(34,783)
Deposits	3,552	44,205
Deferred income taxes	31,000	(53,000)
Accounts payable	49,052	(146,903)
Accrued expenses	59,129	(3,711)
TOTAL ADJUSTMENTS	456,218	544,722
NET CASH PROVIDED BY OPERATING ACTIVITIES	1,123,862	856,258
CASH FLOWS FROM INVESTING ACTIVITIES
Payment of notes receivable	87,208	850,264
Purchase of property and equipment	(174,590)	(190,182)
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	(87,382)	660,082
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings:		135,000
Repayments	(112,117)	(361,379)
Dividends paid	(126,630)
Repayment of right of use leases payable	(38,891)
Repurchase and cancellation of common stock		(175,816)
NET CASH USED IN FINANCING ACTIVITIES	(277,638)	(402,195)
NET CHANGE IN CASH	758,842	1,114,145
CASH – Beginning	2,838,649	1,724,504
CASH – Ending	3,597,491	2,838,649
NON-CASH OPERATING, INVESTING AND FINANCING ACTIVITIES:
Accrued Dividend Payable	373,370
Change in Accounts Receivable through issuance of a Note Receivable	276,036	750,264
Right of use assets obtained in exchange for Lease obligations	548,070
Issuance of common stock	28,202
Change in assets held for sale from Notes Receivable	270,000
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest	7,987	17,121
Income taxes	$ 79,029	$ 341,547

XML

Consolidated Balance Sheets - USD ($)	Dec. 31, 2019	Dec. 31, 2018
CURRENT ASSETS
Cash	$ 3,597,491	$ 2,838,649
Accounts receivable	678,045	847,814
Inventories	181,204	170,865
Notes receivable	188,828	270,000
Held for sale assets	270,000
Prepaid expenses and other current assets	294,644	566,474
Total current assets	5,210,212	4,693,802
PROPERTY AND EQUIPMENT, net of accumulated depreciation and amortization of $3,676,488 and $3,630,731 respectively	323,316	388,072
OTHER ASSETS
Deposits	2,512	2,512
Right of use assets	495,377
Goodwill	750,000	750,000
Deferred income taxes	476,000	507,000
Total other assets	1,723,889	1,259,512
TOTAL ASSETS	7,257,417	6,341,386
CURRENT LIABILITIES
Accounts payable	397,343	348,291
Customer deposits	130,395	126,843
Accrued dividends payable	373,370
Accrued expenses	319,557	288,630
Notes payable – current portion		57,722
Right of use leases payable – current portion	60,675
Total current liabilities	1,281,340	821,486
LONG-TERM LIABILITIES
Notes payable - less current portion		173,399
Right of use leases payable - less current portion	399,733
Total liabilities	1,681,073	994,885
STOCKHOLDERS’ EQUITY
Preferred stock - $0.03 par value; authorized 333,306; none issued and outstanding
Common stock - $0.03 par value; authorized 3,333,334; 1,020,135 and 1,006,768 shares issued and outstanding as of December 31, 2019 and 2018, respectively	30,604	30,203
Additional paid-in capital	19,818,637	19,756,839
Accumulated deficit	(14,272,897)	(14,440,541)
TOTAL STOCKHOLDERS’ EQUITY	5,576,344	5,346,501
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 7,257,417	$ 6,341,386

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Note 8 - Income Taxes - Summary of Provision for Income Taxes (Details)	12 Months Ended		24 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	21.00%	21.00%	21.00%
State and local income taxes, net of federal	16.40%	17.70%
Effective income tax expense rate	37.40%	38.70%

XML

Note 9 - Stockholders' Equity - Summary of the Company's Stock Options (Details)	12 Months Ended
	Dec. 31, 2019 USD ($) $ / shares shares
Outstanding (in shares)	53,328
Exercisable (in shares)	39,996
Intrinsic Value | $	$ 50,477
Range One [Member]
Exercise Price (in dollars per share) | $ / shares	$ 5.60
Outstanding (in shares)	13,332
Weighted average remaining contractual life of options (Year)	4 years 335 days
Exercisable (in shares)
Intrinsic Value | $
Range Two [Member]
Exercise Price (in dollars per share) | $ / shares	$ 2.40
Outstanding (in shares)	13,332
Weighted average remaining contractual life of options (Year)	3 years 335 days
Exercisable (in shares)	13,332
Intrinsic Value | $	$ 20,225
Range Three [Member]
Exercise Price (in dollars per share) | $ / shares	$ 3.24
Outstanding (in shares)	13,332
Weighted average remaining contractual life of options (Year)	2 years 335 days
Exercisable (in shares)	13,332
Intrinsic Value | $	$ 9,026
Range Four [Member]
Exercise Price (in dollars per share) | $ / shares	$ 2.25
Outstanding (in shares)	6,666
Weighted average remaining contractual life of options (Year)	1 year 335 days
Exercisable (in shares)	6,666
Intrinsic Value | $	$ 11,113
Range Five [Member]
Exercise Price (in dollars per share) | $ / shares	$ 2.40
Outstanding (in shares)	6,666
Weighted average remaining contractual life of options (Year)	335 days
Exercisable (in shares)	6,666
Intrinsic Value | $	$ 10,113

XML

Note 8 - Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	December 31,
Deferred tax assets:	2019			2018
Stock based compensation	$	44,000		$	50,000
Goodwill and intangibles		3,000			21,000
Property and equipment		471,000			486,000
Total deferred tax assets		518,000			557,000
Valuation Allowance		(42,000	)		(50,000	)
Deferred tax asset – net of valuation allowance	$	476,000		$	507,000
Change in valuation allowance	$	8,000		$	---

Federal Income Tax Note [Table Text Block]

The provision for income taxes using the statutory federal tax rate as compared to the Company's effective tax rate is summarized as follows:	December 31,
	2019			2018
Tax expense at statutory rate		21.0	%		21.0	%
State and local income taxes, net of federal		16.4	%		17.7	%
Effective income tax expense rate		37.4	%		38.7	%

XML

Note 3 - Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	For the Year Ended December 31,
		2019(1)	2018(1)
Weighted average common shares outstanding, basic		1,008,979	1,029,001
Common shares upon exercise of options		12,886	10,598
Weighted average common shares outstanding, diluted		1,021,865	1,039,599

Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value [Table Text Block]

	For the Year Ended December 31,
	2019	2018
Dividend yield	0%	0%
Expected volatility	910%	740%
Risk-free interest rate	1.6%	2.5%
Expected lives (years)	5.0	5.0

XML

Note 11 - Commitments

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

NOTE

11

–

Co

mmitments

Right-Of-Use Leas

ing Arrangements

The Company leases facilities from Garden City, Kansas, which provides for: (a) a

21

-year lease term expiring

December 31, 2030,

with

one five

-year renewal period, and (b) a base rent of

$2,187

per month. In addition, the Company incurs a fuel flowage fee of

$0.06

per gallon of fuel received. The fuel flowage fee is to be reviewed annually by the Garden City Regional Airport, the City of Garden City, and the Company. Flowage fees on fuel gallons purchased aggregated approximately

$52,000

and

$49,000

for the years ended

December 31, 2019

and

2018,

respectively.

The Company leases additional facilities from Garden City, Kansas, which provides for a

14

year lease term expiring

December 31, 2030

with a base rent of

$565

a month.

In

2018,

the Company’s Kansas subsidiary entered into a purchase lease with Commerce Bank for a refueling truck. The lease commenced on

May 1, 2018

and continues for

60

months at an interest rate of LIBOR plus

416

basis points. At the end of the lease, the Company’s subsidiary

may

purchase the vehicle for

$1.00.

The Company’s lease right of use assets and lease liabilities as of

December 31, 2019

are summarized as follows:

	December 31,
	2019
Right of use assets	$	495,377
Current portion of debt and right of use lease liabilities	$	60,675
Long term portion of debt and right of use lease liabilities		399,733
Total right of use lease liabilities	$	460,408
Weighted average remaining lease terms (years)		12
Weighted average discount rate		5.5	%

The maturities of the Company’s right of use lease liabilities as of

December 31, 2019

are as follows:

For the year ended
December 31,	Total
2020	$	84,672
2021		84,018
2022		83,149
2023		61,688
2024		50,448
Thereafter		289,171
TOTAL	$	653,146
Less Interest		(192,738	)
Present value of lease liabilities	$	460,408

The components of right of use lease expenses included in “Selling, General and Administrative Expenses” in the Company’s consolidated statements of operations aggregated approximately

$35,000

in

2019.

XML

Note 7 - Notes Payable

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Notes Payable Disclosure [Text Block]

NOTE

7

–

Notes Payable

Notes payable consist of:	December 31,
	2019		2018
Key Bank Term Note, paid in full in 2019.	$	---		112,117
Commerce Bank Truck Lease, converted to Right of use lease payable in 2019.		---		119,004
Subtotal		---		231,121
Less: current portion		---		(57,722	)
Total – long term	$	---	$	173,399

XML

Note 2 - Liquidity and Material Agreements (Details Textual)					1 Months Ended		9 Months Ended	12 Months Ended
	Sep. 01, 2019 USD ($)	Oct. 11, 2018 USD ($)	Jan. 01, 2017	Nov. 01, 2008 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 15, 2018	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2015	Sep. 30, 2019 USD ($)	Jan. 15, 2019 USD ($)	Apr. 20, 2018 USD ($)	Mar. 15, 2018 USD ($)	Dec. 31, 2017 USD ($)	May 17, 2013 USD ($)
Cash and Cash Equivalents, at Carrying Value, Ending Balance								$ 3,597,491	$ 2,838,649						$ 1,724,504
Working Capital								3,928,872
Revenue from Contract with Customer, Including Assessed Tax								11,567,725	11,118,452
Net Income (Loss) Attributable to Parent, Total								667,644	311,536
Environmental Remediation, Agreed Percentage of Reduction in Tenant Operated Tourist Flights										20.00%
Environmental Remediation, Agreed Percentage of Reduction in Tenant Operated Tourist Flights by Year One										40.00%
Environmental Remediation, Agreed Percentage of Reduction in Tenant Operated Tourist Flights by Year Two										50.00%
Financing Receivable, after Allowance for Credit Loss, Total												$ 276,000
Financing Receivable, Interest Rate												7.50%
Financing Receivable, after Allowance for Credit Loss, Current, Total								188,828	270,000
President and Chief Executive Officer [Member]
Employment Agreement, Term	4 years
Annual Base Salary	$ 200,000
Percentage of Base Salary, Annual Incentive Bonus	25.00%
Employment Agreement, Number of Additional Stock Awards	5
Employment Agreement, Stock Awards, Percent of Issued and Outstanding Stock	0.0005%
Warren A. Peck [Member]
Proceeds from Collection of Notes Receivable					$ 100,000	$ 100,000
Financing Receivable, after Allowance for Credit Loss, Current, Total											$ 270,000
Truck Lease [Member]
Lessee, Finance Lease, Term of Contract													5 years
Capital Lease, Lessee, Purchase Price of Capital Leased Asset													$ 1
Concession Agreement [Member]
Percentage Payable Greater than Gross Receipts During Period				18.00%
Amount of Gross Receipts During Period				$ 5,000,000
Percentage Payable Greater than Gross Receipts in Year One				25.00%
Concession Fees								1,640,000	1,800,000
Line of Credit Facility, Payment Term										2 years 180 days
Line of Credit Facility, Number of Options to Extend Agreement										2
Minimum Annual Guarantee Percent			50.00%
General and Administrative Expense, Total								2,200,000	$ 1,777,000
London Interbank Offered Rate (LIBOR) [Member] | Truck Lease [Member]
Capital Leases of Lessee, Contingent Rentals, Basis Spread on Variable Rate													4.16%
Key Bank National Association [Member] | Term Loan [Member]
Debt Instrument, Face Amount														$ 338,481
PNC Bank [Member] | Term Loan [Member]
Extinguishment of Debt, Amount								280,920
Acquisition Line of Credit [Member] | Key Bank National Association [Member]
Line of Credit Facility, Maximum Borrowing Capacity														2,500,000
Debt Instrument, Term							4 years
Debt Instrument, Periodic Payment, Total								$ 0
Acquisition Line of Credit [Member] | Key Bank National Association [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate							2.75%
Acquisition Line of Credit [Member] | Key Bank National Association [Member] | Cost of Funds Rate [Member]
Debt Instrument, Basis Spread on Variable Rate								2.50%
Working Capital Line of Credit [Member] | Key Bank National Association [Member]
Line of Credit Facility, Maximum Borrowing Capacity														$ 1,000,000
Debt Instrument, Periodic Payment, Total								$ 0
Working Capital Line of Credit [Member] | Key Bank National Association [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate								2.75%
PNC Acquisition Line [Member]
Line of Credit Facility, Maximum Borrowing Capacity																$ 2,500,000
Change of Terms Agreement [Member] | Key Bank National Association [Member]
Line of Credit Facility, Maximum Borrowing Capacity		$ 2,500,000
Debt Instrument, Periodic Payment, Total								$ 0
Change of Terms Agreement [Member] | Key Bank National Association [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate		4.25%

XML

Note 4 - Inventories (Details Textual) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Fuel [Member]
Inventory Third Party	$ 25,804	$ 37,675

XML

Note 6 - Goodwill and Intangible Assets (Details Textual) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Goodwill, Ending Balance	$ 750,000	$ 750,000

XML

Consolidated Statements of Operations - USD ($)		12 Months Ended
		Dec. 31, 2019	Dec. 31, 2018
REVENUE		$ 11,567,725	$ 11,118,452
COST OF REVENUE		5,851,066	6,066,691
GROSS PROFIT		5,716,659	5,051,761
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		(4,669,097)	(4,559,578)
OPERATING INCOME		1,047,562	492,183
OTHER INCOME (EXPENSE):
OTHER INCOME			447
INTEREST INCOME		27,069	33,027
INTEREST EXPENSE		(7,987)	(17,121)
TOTAL OTHER INCOME		19,082	16,353
INCOME FROM OPERATIONS, before income taxes		1,066,644	508,536
INCOME TAX EXPENSE (BENEFIT)
CURRENT		368,000	250,000
DEFERRED		31,000	(53,000)
INCOME TAX EXPENSE		399,000	197,000
NET INCOME		$ 667,644	$ 311,536
Basic Net Income Per Common Share (in dollars per share)		$ 0.66	$ 0.30
Diluted Net Income Per Common Share (in dollars per share)		$ 0.65	$ 0.30
Weighted Average Number of Common Shares – Basic (in shares)	[1]	1,008,979	1,029,001
Weighted Average Number of Common Shares – Diluted (in shares)	[1]	1,021,865	1,039,599

[1] Common shares of 40,402 and 39,402 underlying outstanding stock options for the years ended December 31, 2019 and 2018, respectively, were excluded from the computation of diluted earnings per share as their inclusion would be antidilutive.

XML

Note 2 - Liquidity and Material Agreements

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Going Concern Disclosure [Text Block]

NOTE

2

–

Liquidity

and Material Agreements

As of

December 31, 2019,

we had cash of

$3,597,491

and a working capital surplus of

$3,928,872.

We generated revenue of

$11,567,725

and had net income of

$667,644

for the

twelve

months ended

December 31, 2019.

As disclosed in a Current Report on Form

8

-K filed on

March 21, 2018

with the SEC, on

March 15, 2018

the Company entered into a loan agreement (the “Loan Agreement”) with Key Bank National Association (the “Bank”). The Loan Agreement contains

three

components: (i) a

$2,500,000

acquisition line of credit (the “Key Bank Acquisition Note”); (ii) a

$1,000,000

revolving line of credit (the “Key Bank Revolver Note”); and (iii) a

$338,481

term loan (the “Key Bank Term Note”).

Proceeds of the Key Bank Acquisition Note were to be dispersed pursuant to a multiple draw demand note dated as of the agreement date, where the Company could, at the discretion of the Bank, borrow up to an aggregate amount of

$2,500,000,

to be used for the Company’s acquisition of

one

or more business entities. Until the Change of Terms Agreement, as defined below, the Company was required to make consecutive monthly payments of interest, calculated at a rate per annum equal to

one

-day LIBOR (adjusted daily) plus

2.75%,

on any outstanding principal under the Key Bank Acquisition Note from the date of its issuance through

September 15, 2018 (

the “Conversion Date”).

At any time through and including the Conversion Date, at the Bank’s discretion, the Company had the opportunity to request that any loan made under the Key Bank Acquisition Note be converted into a term loan to be repaid in full, including accrued interest, by consecutive monthly payments over a

48

month amortization period beginning after the Conversion Date. For any loan that was

not

converted into a term loan on or before the Conversion Date, the Company would have been required to begin making monthly payments of principal and interest after the Conversion Date, over a

48

month amortization period, after which the remaining unpaid principal and accrued interest would have become due and payable. All loans under the Key Bank Acquisition Note would have, after the Conversion Date, accrued interest at a rate per annum equal to the Bank’s

four

year cost of funds rate plus

2.5%.

As of the Conversion Date, there were

no

amounts due under the Key Bank Acquisition Note and

no

amounts had been converted to a term loan.

On

October 11, 2018,

and as subsequently amended, the Company entered into a new loan agreement with the Bank (the “Change of Terms Agreement”) which modified the original terms of the Key Bank Acquisition Note. Under the Change of Terms Agreement, the Company

may

continue to, at the discretion of the Bank, borrow up to an aggregate amount of

$2,500,000

through

June 30, 2020 (

the “Maturity Date”), to be used for the Company’s acquisition of

one

or more business entities. The Change of Terms Agreement requires the Company to make consecutive monthly payments of interest on any outstanding principal calculated at a rate per annum equal to

4.25%.

The entire principal balance, plus all accrued interest, is due in full on the Maturity Date. As of

December 31, 2019,

there were

no

amounts due under the Change of Terms Agreement.

Proceeds from the Key Bank Revolver Note, at the discretion of the Bank, provide for the Company to borrow up to

$1,000,000

for working capital and general corporate purposes. 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

one

-day LIBOR (adjusted daily) 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. As of

December 31, 2019,

there were

no

amounts due under the Key Bank Revolver Note.

Proceeds from the Key Bank Term Note were utilized to retire amounts previously outstanding under a

$280,920

term loan from PNC Bank. As of

December 31, 2019,

all amounts outstanding under the Key Bank Term Note have been repaid.

The Company is party to a Concession Agreement, dated as of

November 1, 2008,

with the City of New York for the operation of the Downtown Manhattan Heliport (the “Concession Agreement”). Pursuant to the terms of the Concession Agreement, the Company must pay the greater of

18%

of the

first

$5,000,000

in any program year based on cash collected (“Gross Receipts”) and

25%

of Gross Receipts in excess of

$5,000,000,

or minimum annual guaranteed payments. During the

twelve

months ended

December 31, 2019

and

2018,

we incurred approximately

$1,640,000

and

$1,800,000

in concession fees, respectively, which are recorded in the cost of revenue.

As disclosed in a Current Report on Form

8

-K filed with the SEC on

February 5, 2016,

the Company and the New York City Economic Development Corporation (the “NYCEDC”) announced new measures to reduce helicopter noise and impacts across New York City (the “Air Tour Agreement”).

Under the Air Tour Agreement, filed as an exhibit to our Annual Report on Form

10

-K for the year ended

December 31, 2015,

the Company

may

not

allow its tenant operators to conduct tourist flights from the Downtown Manhattan Heliport on Sundays beginning

April 1, 2016.

The Company was also required to ensure that its tenant operators reduce the total allowable number of tourist flights from

2015

levels by

20

percent beginning

June 1, 2016,

by

40

percent beginning

October 1, 2016

and by

50

percent beginning

January 1, 2017.

Additionally, beginning on

June 1, 2016,

the Company was required to provide monthly written reports to the NYCEDC and the New York City Council detailing the number of tourist flights conducted out of the Downtown Manhattan Heliport compared to

2015

levels, as well as information on any tour flight that flies over land and/or strays from agreed upon routes.

The Air Tour Agreement also extended the Concession Agreement for

30

months, resulting in a new expiration date of

April 30, 2021.

The City of New York has

two one

-year options to further extend the Concession Agreement. The Air Tour Agreement also provides that the minimum annual guarantee payments the Company is required to pay to the City of New York under the Concession Agreement be reduced by

50%,

effective

January 1, 2017.

These reductions have negatively impacted the Company’s business and financial results as well as those of its management company at the Heliport, Empire Aviation which, as previously disclosed, is owned by the children of Alvin Trenk, the Company’s former Chief Executive Officer and a former member of its Board of Directors.  The Company incurred management fees with Empire Aviation of approximately

$2,200,000

and

$1,777,000

during the

twelve

months ended

December 31, 2019

and

2018,

respectively, which is recorded in administrative expenses. The Company and Empire Aviation have also contributed to the Helicopter Tourism and Jobs Council (“HTJC”), an association that lobbies on behalf of the helicopter air tour industry, and which had engaged in discussions with the Mayor’s office.  Mr. Trenk is also an active participant with HJTC, which is managed by his grandson. One of our Directors, Sam Goldstein, serves as deputy director of HJTC.  

On

April 20, 2018,

the Company’s Kansas subsidiary entered into a purchase lease with Commerce Bank for a refueling truck (the “Truck Lease”). The Truck Lease commenced on

May 1, 2018

and continues for

60

months at an interest rate of LIBOR plus

416

basis points. At the end of the Truck Lease, the Company’s subsidiary

may

purchase the vehicle for

$1.00.

On

January 15, 2019,

the Company was issued an unsecured note by

one

of its customers at the Heliport. The note schedules payments of approximately

$276,000

in receivables payable by such customer, has a maturity date of

October 31, 2019,

as amended, and carries a

7.5%

rate of interest. The note payments were to be made in

six

monthly installments beginning

May 31, 2019.

The customer’s payments on the note have

not

met the installment plan and the Company was working on changes to the note when the customer filed for Chapter

11

Bankruptcy. The Company intends to continue to pursue remaining amounts due under the note and it is the Company’s expectation that the note will be fulfilled.

As disclosed in a Current Report on Form

8

-K filed with the SEC on

July 6, 2015,

the Company entered into a stock purchase agreement, dated

June 30, 2015,

by and between the Company and Warren A. Peck, pursuant to which Mr. Peck purchased all of the capital stock of the Company’s wholly-owned subsidiary, Phoenix Rising Aviation, Inc. The details of the agreement are described in such Current Report as well as in the Company’s Annual Report on Form

10

-K for the year ended

December 31, 2015,

which was filed with the SEC on

April 11, 2016.

The Company received

$100,000

due under this agreement in

September 2017

and an additional payment of

$100,000

in

September 2018.

In

2019,

the Company accepted the title to a Falcon

10

aircraft owned by Mr. Peck as satisfaction in full of the remainder of the

$270,000

stock purchase price. The Company intends to sell the aircraft and has classified the it as “Held For Sale” on the Company’s Consolidated Balance Sheets as of

December 31, 2019.

As disclosed in a Current Report on Form

8

-K filed with the SEC on

September 06, 2019,

effective

September 1, 2019,

the Company and Ronald J. Ricciardi entered into a new Employment Agreement (the “New Agreement”). Pursuant to the New Agreement, Mr. Ricciardi will continue to serve as the Company’s President and Chief Executive Officer. Among other things, the New Agreement provides for a

four

-year term with a base salary of

$200,000,

with subsequent annual base salary increases at the discretion of the Board of Directors. In addition, Mr. Ricciardi is eligible to receive an annual incentive bonus in an amount equal to

25%

of the then-applicable base salary earned in the event that the Company meets or exceeds its annual operating plan for earnings before interest, taxes, depreciation and amortization. Mr. Ricciardi also received a stock award upon the execution of the New Agreement. In addition, Mr. Ricciardi is eligible for additional stock awards upon each of the

four

anniversary dates of this New Agreement. Each of the

five

stock awards shall be the number of shares equal to the issued and outstanding shares of the Company on the date of each issuance multiplied by

one

half of

one

percent. The issuance of such stock awards are to be administered according to the Company’s Equity Compensation Plan, as approved the Company’s stockholders.

XML

Note 12 - Dividend Payable (Details Textual)	12 Months Ended
	Dec. 31, 2019 $ / shares
Common Stock, Dividends, Per Share, Declared	$ 0.50
Dividends, Per Share to be Paid in Equal Quarterly Installments	$ 0.125

XML

Note 8 - Income Taxes (Details Textual)	12 Months Ended		24 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	21.00%	21.00%	21.00%

XML

Note 9 - Stockholders' Equity - Common Stock Outstanding (Details) - shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Common stock outstanding (in shares)	1,006,768	1,070,586
Repurchase and cancellation of shares of Common Stock (in shares)		(64,084)
Shares issued in connection with exercise of stock options (in shares)	7,806	266
Shares issued in connection with Reverse Split (in shares)	525
Shares issued in connection with Employment Agreement (in shares)	5,036
Common stock outstanding (in shares)	1,020,135	1,006,768

XML

Note 11 - Commitments (Details Textual)		12 Months Ended
	Oct. 03, 2016 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Apr. 20, 2018 USD ($)
Variable Expenses Gallon		$ 52,000	$ 49,000
Selling, General and Administrative Expenses [Member]
Operating Lease, Expense		$ 35,000
Facility in Garden City, Kansas [Member]
Lessee, Operating Lease, Term of Contract		21 years
Number of Renewals		1
Operating Leases, Monthly Rent Expense		$ 2,187
Fuel Flowage Fee, Per Gallon		0.06
Additional Facilities in Garden City Kansas [Member]
Lessee, Operating Lease, Term of Contract	14 years
Operating Leases, Monthly Rent Expense	$ 565
Truck Lease [Member]
Lessee, Finance Lease, Term of Contract				5 years
Capital Lease, Lessee, Purchase Price of Capital Leased Asset				$ 1
Truck Lease [Member] | London Interbank Offered Rate (LIBOR) [Member]
Capital Leases of Lessee, Contingent Rentals, Basis Spread on Variable Rate				4.16%

XML

Note 11 - Commitments (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Operating Lease, Assets And Liabilities, Lessee [Table Text Block ]

	December 31,
	2019
Right of use assets	$	495,377
Current portion of debt and right of use lease liabilities	$	60,675
Long term portion of debt and right of use lease liabilities		399,733
Total right of use lease liabilities	$	460,408
Weighted average remaining lease terms (years)		12
Weighted average discount rate		5.5	%

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

For the year ended
December 31,	Total
2020	$	84,672
2021		84,018
2022		83,149
2023		61,688
2024		50,448
Thereafter		289,171
TOTAL	$	653,146
Less Interest		(192,738	)
Present value of lease liabilities	$	460,408

XML

Note 5 - Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Property, Plant and Equipment [Table Text Block]

	December 31,						Estimated
	2019			2018			Useful Life (years)
Aircraft	$	56,000		$	56,000		7	–	12
Vehicles		396,483			467,972		5	–	10
Office furniture and equipment		452,520			409,260		3	–	7
Tools and shop equipment		81,847			81,847		3	–	10
Leasehold improvements		2,812,594			2,803,724		10	–	20
Building/fuel farm		200,000			200,000		7	–	17
Total		3,999,804			4,018,803
Less: accumulated depreciation and amortization		(3,676,488	)		(3,630,731	)
Property and equipment, net	$	323,316		$	388,072

XML

Note 15 - Subsequent Events

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Subsequent Events [Text Block]

NOTE

15

–

Subsequent Events

In

December 2019,

the COVID-

19

strain of coronavirus was reported in China. The World Health Organization has declared COVID-

19

a pandemic. The United States government has already implemented some forms of travel restrictions. For example, on

January 30, 2020,

the U.S. Department of State issued a Level

4

"do

not

travel" advisory for China and, in

March

of

2020,

the U.S. government implemented travel restrictions to Canada and parts of Europe. The U.S. government has also implemented quarantine requirements and travel restrictions in connection with the COVID-

19

pandemic, among other measures. Future travel restrictions

may

impact the type of air travel services we provide. The COVID-

19

pandemic and public fear of COVID-

19

has reduced the demand for our customer’s services, and as of

March 17, 2020,

all sightseeing tour operations at the Downtown Manhattan Heliport have ceased due to a drop in demand as a result of the ongoing COVID-

19

pandemic. The extent of the impact of the COVID-

19

on our operational and financial performance will depend on future developments, including the duration and spread of the COVID-

19

pandemic and related travel advisories and restrictions and the impact of the COVID-

19

on overall demand for air travel, all of which are highly uncertain and cannot be predicted. If we experience significant declines in demand and a suspension of our customer’s operations over an extended period of time, our results of operations for the fiscal year ending

December 31, 2020

will be materially adversely affected.

XML

Note 11 - Commitments - Operating Lease Right-of-use Assets and Lease Liabilities (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Right of use assets	$ 495,377
Right of use leases payable – current portion	60,675
Right of use leases payable - less current portion	399,733
Total right of use lease liabilities	$ 460,408
Weighted average remaining lease terms (years) (Year)	12 years
Weighted average discount rate	5.50%

XML

Note 8 - Income Taxes - Summary of Deferred Tax Assets and Deferred Tax Liabilities (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Stock based compensation	$ 44,000	$ 50,000
Goodwill and intangibles	3,000	21,000
Property and equipment	471,000	486,000
Total deferred tax assets	518,000	557,000
Valuation Allowance	(42,000)	(50,000)
Deferred tax asset – net of valuation allowance	476,000	507,000
Change in valuation allowance	$ 8,000

XML

Note 9 - Stockholders' Equity - Summary of Outstanding Options Under the Plan (Details) - $ / shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Outstanding (in shares)	63,327	56,661
Outstanding, weighted average exercise price (in dollars per share)	$ 2.594	$ 2.606
Granted (in shares)	13,332	13,332
Granted, weighted average exercise price (in dollars per share)	$ 5.60	$ 2.40
Exercised (in shares)	(7,806)	(266)
Exercised, weighted average exercise price (in dollars per share)	$ 2.35	$ 2.31
Expired (in shares)	(9,999)
Expired, weighted average exercise price (in dollars per share)	$ 2.55
Outstanding (in shares)	53,328	63,327
Outstanding, weighted average exercise price (in dollars per share)	$ 3.391	$ 2.594

XML

Note 4 - Inventories (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	December 31,
	2019		2018
Parts inventory	$	87,625	$	82,384
Fuel inventory		79,497		76,761
Other inventory		14,082		11,720
Total inventory	$	181,204	$	170,865

XML

Note 14 - Litigation

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Legal Matters and Contingencies [Text Block]

NOTE

14

–

Litigation

From time to time, the Company

may

be a party to

one

or more claims or disputes which

may

result in litigation. The Company’s management does

not,

however, presently expect that any such matters will have a material adverse effect on the Company’s business, financial condition or results of operations.

XML

Note 9 - Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Common Stock Outstanding Roll Forward [Table Text Block]

:	Number of shares outstanding
January 1, 2018		1,070,586
Repurchase and cancellation of shares of Common Stock		(64,084	)
Shares issued in connection with exercise of stock options		266
December 31, 2018		1,006,768
Shares issued in connection with Reverse Split		525
Shares issued in connection with exercise of stock options		7,806
Shares issued in connection with Employment Agreement		5,036
December 31, 2019		1,020,135

Share-based Payment Arrangement, Option, Activity [Table Text Block]

	Number of Options			Weighted Average Exercise Price
Balance, December 31, 2017		56,661		$	2.606
Granted		13,332			2.400
Exercised		(6,666	)		2.310
Balance, December 31, 2018		63,327		$	2.594
Granted		13,332			5.600
Exercised		(13,332	)		2.350
Expired		(9,999	)		2.550
Balance, December 31, 2019		53,328		$	3.391

Share-based Payment Arrangement, Option, Exercise Price Range [Table Text Block]

Exercise Price	Outstanding	Weighted average remaining contractual life of options (in years)	Exercisable	Intrinsic Value
$5.60	13,332	4.92	---	$	---
$2.40	13,332	3.92	13,332	$	20,225
$3.24	13,332	2.92	13,332	$	9,026
$2.25	6,666	1.92	6,666	$	11,113
$2.40	6,666	.92	6,666	$	10,113
TOTALS	53,328		39,996	$	50,477

XML

Note 10 - Employee Benefit Plan

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Compensation and Employee Benefit Plans [Text Block]

NOTE

10

–

Employee Benefit Plan

The Company maintains a

401K

Plan which covers all employees of the Company (the

“401K

Plan”). Effective

January 1, 2020,

the Company switched to a Safe Harbor

401K

plan. The Safe Harbor

401K

Plan stipulates that, going forward, all employees become vested

100%

on day one. Employer contributions prior to the change vest over a

five

-year period on a

20%

per year basis. The Company’s Safe Harbor

401K

Plan provides that the Company match each participant's contribution at

100%

up to

4%

of the employee’s deferral. The employer match prior to the change was

50%

up to

6%

of the employee’s deferral. Company contributions to the

401K

Plan totaled approximately

$31,000

and

$30,000

for the years ended

December 31, 2019

and

2018,

respectively.

XML

Note 6 - Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE

6

–

Goodwill and I

ntangible Assets

The Company had

$

750,000

of goodwill at each of

December 31, 2019

and

2018.

XML

Note 7 - Notes Payable - Summary of Notes Payable (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Notes payable		$ 231,121
Less: current portion		(57,722)
Total – long term		173,399
Key Bank Term Note [Member]
Notes payable		112,117
Commerce Bank Truck Lease [Member]
Notes payable		$ 119,004

XML

Note 3 - Summary of Significant Accounting Policies (Details Textual)	12 Months Ended
	Dec. 31, 2019 USD ($) $ / shares shares	Dec. 31, 2018 USD ($) $ / shares shares
Operating Lease, Right-of-Use Asset	$ 495,377
Operating Lease, Liability, Noncurrent	399,733
Operating Lease, Liability, Current	60,675
Advertising Expense	$ 29,840	$ 33,118
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | shares	40,402	39,402
Share-based Payment Arrangement, Noncash Expense, Total	$ 33,997	$ 33,997
Shares Based Compensation, Stock Options Unamortized Fair Value	$ 74,660
Share-based Compensation, Weighted Average Remaining Amortization Period	5 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares	$ 5.16	$ 3.03
Accounts Receivable [Member] | Customer Concentration Risk [Member]
Number of Major Customers	4	4
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Four Customers [Member]
Concentration Risk, Percentage	73.00%
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer One [Member]
Concentration Risk, Percentage	35.60%	33.70%
Accounts Receivable, after Allowance for Credit Loss, Total	$ 241,298	$ 285,350
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer Two [Member]
Concentration Risk, Percentage	17.10%	23.80%
Accounts Receivable, after Allowance for Credit Loss, Total	$ 115,864	$ 202,080
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer Three [Member]
Concentration Risk, Percentage	16.40%	12.00%
Accounts Receivable, after Allowance for Credit Loss, Total	$ 111,149	$ 101,678
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer Four [Member]
Concentration Risk, Percentage	3.90%	1.50%
Accounts Receivable, after Allowance for Credit Loss, Total	$ 26,523	$ 12,671
Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Concentration Risk, Percentage		59.70%
Number of Major Customers	4	4
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Four Customers [Member]
Concentration Risk, Percentage	54.70%

XML

Note 4 - Inventories - Summary of Inventory (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Inventories	$ 181,204	$ 170,865
Parts [Member]
Inventories	87,625	82,384
Fuel [Member]
Inventories	79,497	76,761
Other Inventory [Member]
Inventories	$ 14,082	$ 11,720

XML

Note 3 - Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Significant Accounting Policies [Text Block]

NOTE

3

-

Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, FFH and FBOGC. All significant inter-company accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s significant estimates include depreciation, amortization, impairment of goodwill and intangibles, stock-based compensation, allowance for doubtful accounts and deferred tax assets.

Cash

The Company maintains its cash with various financial institutions which often exceeds federally insured limits. The Company has

not

experienced any losses from maintaining cash accounts in excess of federally insured limits. As part of its cash management process, the Company periodically reviews the relative credit standing of these financial institutions.

Accounts Receivable

,

T

rade

and Revenue Concentration

The Company extends credit to large and mid-size companies for products and services. The Company has concentrations of credit risk in that

73.0%

of the balance of its accounts receivable at

December 31, 2019

is made up of only

four

customers. At

December 31, 2019,

accounts receivable from the Company’s

four

largest accounts amounted to approximately

$241,298

(

35.6%

),

$115,864

(

17.1%

),

$111,149

(

16.4%

), and

$26,523

(

3.9%

), respectively. In addition, these

four

customers represented approximately

54.7%

of our revenue in

2019.

At

December 31, 2018,

accounts receivable from the Company’s

four

largest accounts amounted to approximately

$285,350

(

33.7%

),

202,080

(

23.8%

),

$101,678

(

12.0%

), and

$12,671

(

1.5%

), respectively. In addition, these

four

customers represented approximately

59.7%

of our revenue in

2018.

Accounts receivable are carried at their estimated collectible amounts. Accounts receivable are periodically evaluated for collectability and the allowance for doubtful accounts is adjusted accordingly. We determine collectability based on our management experience and knowledge of the customers.

Inventories

Inventories consist primarily of maintenance parts and aviation fuel and are stated at the lower of cost or net realizable value determined by the

first

-in,

first

out method.

Property and Equipment

Property and equipment is stated at cost. Depreciation is provided primarily using the straight-line method over the estimated useful lives as set forth in footnote

5.

Amortization of leasehold improvements is provided using the straight-line method over the shorter of their estimated useful life or lease term, including renewal option periods expected to be exercised. Maintenance and repairs are charged to expense as incurred; costs of major additions and betterments are capitalized. When property and equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is reflected in income.

Goodwill and Intangible Assets

Goodwill and intangibles that are deemed to have indefinite lives are

not

amortized but, instead, are to be reviewed at each reporting period for impairment. The Company assessed potential impairment of goodwill using qualitative factors by considering various factors including macroeconomic conditions, industry and market conditions, cost factors, a sustained share price or market capitalization decrease and any reporting unit specific events. The Company performed an analysis of its goodwill and intangible assets at

December 31, 2019

and

2018.

Leases

At

December 31, 2019,

our consolidated balance sheets include a right of use asset of approximately

$495,000,

a long-term lease liability of approximately

$400,000,

and a short-term liability of approximately

$61,000.

Revenue Recognition

The Company recognizes revenue from ground-based services, such as fueling and aircraft storage, and aircraft maintenance and repair services. Revenue for the sale of ground-based services is recognized as a sale of services at the time the service is performed and provided to customers. Revenue for the sale of aircraft fuel is recognized at the time products are delivered to customers. Customers are invoiced at the time the services are performed and the associated revenue is recognized in the period it is earned. Revenue from aircraft storage services is recognized monthly based upon agreement. Aircraft maintenance and repair service revenue is recognized over time as all of the performance obligations are met. Performance obligations are satisfied when control of the aircraft has been transferred back to the customer.

In

2014,

the Financial Accounting Standard Board (the “FASB”) issued ASC

606,

Revenue from Contracts with Customers (“ASC

606”

), replacing the existing accounting standard and industry specific guidance for revenue recognition with a

five

-step model for recognizing and measuring revenue from contracts with customers. The underlying principle of the new standard is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. ASC

606

became effective on

January 1, 2018

and we adopted it using the modified retrospective method applied to open contracts and only to the version of the contracts in effect as of

January 1, 2018.

Prior period amounts have

not

been adjusted and continue to be reflected in accordance with our historical accounting. There was

no

impact on the consolidated financial statements and

no

cumulative effect adjustment was recognized.

Customer Deposits

Customer deposits consist of amounts that customers are required to remit in advance to the Company in order to secure payment for future purchases and services.

Advertising

The Company expenses all advertising costs as incurred. Advertising expense for the years ended

December 31, 2019

and

2018

was approximately

$29,840

and

$33,118,

respectively.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between their financial statement carrying amounts and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income or loss in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company recognizes the tax benefits of uncertain tax positions only where the position is “more likely than

not”

to be sustained assuming examination by tax authorities. Management has analyzed the Company’s tax positions, and has concluded that

no

liability should be recorded related to uncertain tax positions taken.

Deferred tax assets are subject to a valuation allowance because it is more likely than

not

that certain of the deferred tax assets will

not

be realized in future periods. The Company files income tax returns in the United States (federal) and in various state and local jurisdictions. In most instances, the Company is

no

longer subject to federal, state and local income tax examinations by tax authorities for years prior to

2016.

Fair Value of Financial Instruments

The reported amounts of the Company’s financial instruments, including accounts receivable, accounts payable and accrued liabilities, approximate their fair value due to their short maturities. The carrying amounts of debt approximate fair value because the debt agreements provide for interest rates that approximate market. The carrying value of the note receivable approximated fair value because it was discounted at a current market rate.

Net Income Per Common Share

Basic net income per share applicable to common stockholders is computed based on the weighted average number of shares of the Company’s common stock outstanding during the periods presented. Diluted net income per share reflects the potential dilution that could occur if securities or other instruments to issue common stock were exercised or converted into common stock. Potentially dilutive securities, consisting of options and warrants, are excluded from the calculation of the diluted income per share when their exercise prices are greater than the average market price of the common stock during the period or when their inclusion would be antidilutive. 

The following table sets forth the components used in the computation of basic and diluted income per share:

	For the Year Ended December 31,
		2019(1)	2018(1)
Weighted average common shares outstanding, basic		1,008,979	1,029,001
Common shares upon exercise of options		12,886	10,598
Weighted average common shares outstanding, diluted		1,021,865	1,039,599

( 1 ) Common shares of 40,402 and 39,402 underlying outstanding stock options for the years ended December 31, 2019 and 2018, respectively, were excluded from the computation of diluted earnings per share as their inclusion would be antidilutive.

Stock

-

Based Compensation

Stock-based compensation expense for all share-based payment awards are based on the estimated grant-date fair value. The Company recognizes these compensation costs over the requisite service period of the award, which is generally the option vesting term. For each of the years ended

December 31, 2019

and

2018,

the Company incurred stock based compensation of

$

33,997

.

Such amounts have been recorded as part of the Company’s selling, general and administrative expenses in the accompanying consolidated statements of operations. As of

December 31, 2019,

the unamortized fair value of the options totaled

$74,660

 and the weighted average remaining amortization period of the options approximated

five

years.

Option valuation models require the input of highly subjective assumptions, including the expected life of the option. Because the Company's employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do

not

necessarily provide a reliable single measure of the fair value of its employee stock options.

The fair value of each share-based payment award granted during the years ended

December 31, 2019

and

2018

were estimated using the Black-Scholes option pricing model with the following weighted average fair values:

	For the Year Ended December 31,
	2019	2018
Dividend yield	0%	0%
Expected volatility	910%	740%
Risk-free interest rate	1.6%	2.5%
Expected lives (years)	5.0	5.0

The weighted average fair value of the options on the date of grant, using the fair value based methodology during the years ended

December 31, 2019

and

2018,

was

$5.16

and

$3.03,

respectively.

Recently Adopted Accounting Pronouncements

In

February 2016,

the FASB issued ASU

No.

2016

-

02,

“Leases” (“ASU

2016

-

02”

), which requires an entity to recognize assets and liabilities on the balance sheet for the rights and obligations created by leased assets and provide additional disclosures. ASU

2016

-

02

became effective for us on

January 1, 2019

and we have adopted the new standard using a modified retrospective approach. The adoption of ASU

2016

-

02

did

not

have a material effect on the Company’s consolidated financial statements.

XML

Note 11 - Commitments - Lease Liabilities (Details)	Dec. 31, 2019 USD ($)
2020	$ 84,672
2021	84,018
2022	83,149
2023	61,688
2024	50,448
Thereafter	289,171
TOTAL	653,146
Less Interest	(192,738)
Present value of lease liabilities	$ 460,408

XML

Condensed Statements of Stockholders' Equity - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance (in shares) at Dec. 31, 2017	1,070,586
Balance at Dec. 31, 2017	$ 32,117	$ 19,896,744	$ (14,752,077)	$ 5,176,784
Amortization of stock based compensation		33,997		$ 33,997
Repurchase and cancellation of shares of Common Stock (in shares)	(64,084)			(64,084)
Repurchase and cancellation of Common Stock	$ (1,922)	(173,894)		$ (175,816)
Shares issued in connection with Employment Agreement (in shares)	266
Issuance of additional common stock	$ (8)	8		0
Issuance of additional common stock	$ 8	(8)		0
Net income			311,536	311,536
Balance (in shares) at Dec. 31, 2018	1,006,768
Balance at Dec. 31, 2018	$ 30,203	19,756,839	(14,440,541)	5,346,501
Amortization of stock based compensation		33,997		$ 33,997
Shares issued in connection with Employment Agreement (in shares)	12,842			5,036
Issuance of additional common stock	$ (385)	(27,817)		$ (28,202)
Issuance of additional common stock	$ 385	27,817		28,202
Net income			667,644	$ 667,644
Shares issued in connection with Reverse Split (in shares)	525			525
Issuance of additional Common Stock in connection with reverse split	$ 16	(16)		$ 0
Issuance of additional Common Stock in connection with reverse split	16	(16)		0
Dividends declared			(500,000)	(500,000)
Balance (in shares) at Dec. 31, 2019	1,020,135
Balance at Dec. 31, 2019	$ 30,604	$ 19,818,637	$ (14,272,897)	$ 5,576,344

XML

Document And Entity Information - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Mar. 30, 2020	Jun. 28, 2019
Document Information [Line Items]
Entity Registrant Name	Saker Aviation Services, Inc.
Entity Central Index Key	0001128281
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Interactive Data Current	Yes
Entity Common Stock, Shares Outstanding (in shares)		1,020,135
Entity Public Float			$ 0
Entity Shell Company	false
Document Type	10-K
Document Period End Date	Dec. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Amendment Flag	false
Title of 12(g) Security	Common Stock, $0.03 par value