EDGAR 10-K Filing

Company CIK: 1128281
Filing Year: 2024
Filename: 1128281_10-K_2024_0001437749-24-010272.json

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ITEM 1. BUSINESS
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 subsidiary, we operate in the aviation services segment of the general aviation industry, in which we serve as the operator of a heliport.
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 and until October 31, 2022 as a fixed base operator (“FBO’) and a provider of aircraft maintenance and repair services (“MRO”) at the Garden City (Kansas) Regional Airport. FBOs provide ground-based services, such as fueling and aircraft storage for general aviation, commercial and military aircraft, and other miscellaneous services.
Our business activities at the Downtown Manhattan (New York) Heliport facility (the “Downtown Manhattan Heliport”) commenced in November 2008 when we were awarded the Concession Agreement by the City of New York to operate the Downtown Manhattan Heliport, which we assigned to our subsidiary, FirstFlight Heliports, LLC d/b/a Saker Aviation Services.
We believe the 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. Beginning in April 2022, following declined tourism due to the COVID-19 pandemic, sightseeing tour operators saw an increase in activity and a much higher demand for tours. There can be no assurance that this increased activity will continue as demand for sightseeing tours will depend on future developments in the tourist industry.
Concession Agreement for Downtown Manhattan Heliport
The Company was 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 was required to 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.
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, the Company has not been allowed to permit its tenant operators to conduct tourist flights from the Downtown Manhattan Heliport on Sundays since 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. The Air Tour Agreement also provided for the minimum annual guarantee payments the Company is required to pay to the City of New York under the Concession Agreement.
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 and/or strays from agreed upon routes. The Air Tour Agreement also extended the Concession Agreement for 30 months and gave the City of New York two one-year options to extend the term of the Concession Agreement. The term of the Concession Agreement was subsequently extended by the City of New York through April 30, 2023 by the city’s exercise of both its two one-year option renewals.
During the program year that began on May 1, 2020, the City of New York agreed, in recognition of the pandemic’s impact, that the Company could defer payment of minimum guaranteed payments. In April 2021, the City of New York waived the deferred fees through December 31, 2020. In May 2021, the City of New York waived the deferred fees through April 30, 2021 which coincided with the original expiration of the Concession Agreement as amended by the Air Tour Agreement. The Company worked with the City of New York to address fees to be paid by the Company for the period May 1, 2021 through December 31, 2021. In March 2022, the City of New York agreed to accept 18% of monthly Gross Receipts in excess of $100,000 as Concession fees for this period. In April 2022, the Company agreed to resume paying the City of New York the total monthly amounts due under the Concession Agreement retro-active to January 2022 and to continue paying fees due under the Concession Agreement through the remainder of the Air Tour Agreement. During the twelve months ended December 31, 2023 and 2022, we incurred approximately $682,000 and $1,509,000 in concession fees, respectively, which are recorded in the cost of revenue.
On February 15, 2023, NYCEDC reported that it would be bringing a new concession agreement with the Company as the operator of the Downtown Manhattan Heliport to the New York City Franchise and Concession Review Committee meeting on March 3, 2023. The item was subsequently removed from the agenda, with NYCEDC announcing on April 7, 2023 that the previous Request for Proposals ("RFP") had been cancelled and that it is their intention to put out a new RFP in 2023.
On April 28, 2023, the Company entered into a Temporary Use Authorization Agreement (the “Use Agreement”), effective as of May 1, 2023, with the City of New York acting by and through the New York City of Department of Small Business Services (“DSBS”). The Use Agreement has a term of one year. Pursuant to the terms of the Use Agreement, the Company has been granted the exclusive right to operate as the fixed base operator for the Downtown Manhattan Heliport and collect all revenue derived from the Downtown Manhattan Heliport operations. In addition to terminations for an event of default, the Use Agreement could be terminated at any time by the Commissioner of the DSBS or suspended at any time by the NYCEDC. The Company was required under the Use Agreement to remit a monthly administrative fee to the NYCEDC in the amount of $5,000. During the twelve months ended December 31, 2023, the Company incurred $40,000 in administrative fees which are recorded in the cost of revenue.
On July 13, 2023, the DSBS was granted approval by the Franchise and Concession Review Committee to enter into an Interim Concession Agreement (the “Interim Agreement”) with the Company to provide for the continued operation of the Downtown Manhattan Heliport. The Interim Agreement became effective upon registration with the Comptroller of the City of New York and commenced on December 12, 2023. The Interim Agreement provides for one (1) six-month term (the “Initial Period”), with two (2) six-month options to renew (the “Renewal Periods”). The Company is required to pay the greater of $1,036,811 or 30% of Gross Receipts during the Initial Term and the greater of $518,406 or 30% of Gross Receipts during both Renewal Periods. In addition to terminations for an event of default, the Interim Agreement can be terminated at any time by the Commissioner of the DSBS or suspended at any time by the NYCEDC.
On November 13, 2023, the DBS and NYCEDC released the new RFP. The initial due date for submissions was January 12, 2024, with the due date being subsequently extended to February 12. 2024. The Company submitted a timely proposal in compliance with the terms of the RFP. The Interim Agreement will govern the Company’s operation of the Downtown Manhattan Heliport until the RFP process is concluded and an operator selected unless terminated earlier pursuant to its terms.
Lease for Garden City (Kansas) Regional Airport
On October 3, 2022, FBO Air-Garden City, Inc., (“GCK”), one of our wholly owned subsidiaries, entered into a FBO Transfer Agreement (the “Transfer Agreement”) with Crosby Flying Services, LLC (the “Buyer”) pursuant to which GCK agreed (i) to sell to the Buyer substantially all of its assets (the “Assets”) and none of its liabilities, and (ii) to a seven year non-competition covenant (the “Non-Compete”) whereby the Company, including our subsidiaries and affiliates, will not engage in any business involving the operation of a fixed based operation supplying aviation fuels and lubricants or the supply of other goods or provision of services typically supplied or performed at fixed base operations at airports at any facility located within one hundred (100) miles of the Garden City Regional Airport in Garden City, Kansas for $1.6 million.
On October 31, 2022 (the “Closing Date”), the transaction contemplated by the Transfer Agreement Company closed and we became subject to the Non-Compete, for an aggregate purchase price of, after certain closing adjustments, approximately $1.5 million. The Buyer paid the purchase price on the Closing Date less $160,000, which was subsequently paid on the first anniversary of the Closing Date. Both GCK leases, which allowed us to operate at the Garden City Regional Airport, were terminated by Garden City as of the October 31, 2022 closing date.
Suppliers and Raw Materials
We obtain supplies from a variety of sources, generally from more than one supplier. Our suppliers are both domestic and foreign, and we believe that our sources of supplies and 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 the Downtown Manhattan Heliport, which we believe 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 location. We intend to continue to invest in improvements to our sales and marketing strategies to drive revenue growth.
Government Approvals
The aviation services that we provide are performed on 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. 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 (“FAA”) rules and regulations, and local, regional and national rules and regulations as they relate to environmental matters. The FAA, from time to time, issues directives and other regulations relating to the management, maintenance and operation of facilities. 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 believe we are in compliance with, and intend to continue to comply with, all applicable government regulations but 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. The adoption of new regulations could result in increased costs and have an adverse impact on our results of operations, including, for example, regulations that restricted air travel such as reduced seating capacity or possible temporary orders to cease operations as a result of public health crises.
Customers
Beginning in April 2022, the Company’s customers began operating at pre-pandemic levels which continued through the end of 2022. In June 2022, a new tenant began operating at our Downtown Manhattan Heliport. For the fiscal year ended December 31, 2022, three customers represented approximately $184,000, or 75%, of the balance of accounts receivable. In addition, these three customers represented approximately 83 % of our revenue in 2022. The Company has a security deposit in place for each of these customers.
In September 2023, one of the Company’s former customers resumed operations. For the fiscal year ended December 31, 2023, the Company’s four customers represented approximately $248,000, or 84.1%, of the balance of accounts receivable. In addition, these four customers represented approximately 84.8% of our revenue in 2023. The Company has a security deposit in place for each of these customers.
Competition
Our New York location is the only heliport authorized by New York to perform sightseeing tours. Therefore, we face no direct competition in servicing this line of business. There are two other New York heliports who offer fuel and corporate charter services that we face direct competition from in providing these services.
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.
Employees
As of December 31, 2023, we employed eleven persons, nine of which were employed on a full-time basis. None of these employees were an executive officer. All of our personnel are employed in connection with our operations in New York.
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.

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ITEM 1A. RISK FACTORS
ITEM 1A.
RISK FACTORS
Risks related to our business and operations:
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. The price and supply of jet fuel is unpredictable and fluctuates based on events we cannot control, such as geopolitical developments, including but not limited to heightened uncertainties and impacts resulting from Russian military actions in Ukraine and associated response, supply and demand for crude oil, actions by oil and jet fuel producers, actions by jet fuel refiners, conflict, unrest or economic instability in oil producing countries and regions, regional production patterns and weather conditions. 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. 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. While we do not currently anticipate a significant reduction in fuel availability, dependency on foreign imports of crude oil and the impacts resulting from Russian military actions in Ukraine and possibility of changes in government policy on jet fuel production, transportation and marketing make it impossible to predict the future availability of jet fuel. As a result, any increases in these prices or decrease in the availability of fuel may adversely affect our profitability and competitiveness.
If we are not awarded the contract to operate the Downtown Manhattan Heliport through the new RFP, our operations will be materially adversely affected.
We currently operate the Downtown Manhattan Heliport pursuant to the Interim Concession Agreement. The NYCEDC initiated a new RFP to govern the use of the Downtown Manhattan Heliport. There is no guarantee that the proposal we submitted for the new RFP will be selected and that we will be awarded the contract to operate the Downtown Manhattan Heliport. If our proposal to the new RFP is not chosen, our business will be materially adversely affected as we would be required to cease all our operations at the Downtown Manhattan Heliport and we would have no business operations to generate revenue.
We could be adversely affected by the loss of our Interim Concession Agreement with the City of New York.
On July 13, 2023, the DSBS was granted approval by the Franchise and Concession Review Committee to enter into an Interim Concession Agreement (the “Interim Agreement”) with the Company to provide for the continued operation of the Downtown Manhattan Heliport. The Interim Agreement became effective upon registration with the Comptroller of the City of New York and commenced on December 12, 2023, the date set forth in a written notice received by the Company to proceed. The Interim Agreement provides for one (1) six-month term (the “Initial Period”), with two (2) six-month options to renew (the “Renewal Periods”). The Company is required to pay the greater of $1,036,811 or 30% of Gross Receipts during the Initial Term and the greater of $518,406 or 30% of Gross Receipts during both Renewal Periods. In addition to terminations for an event of default, the Interim Agreement can be terminated at any time by the Commissioner of the DSBS or suspended at any time by the NYCEDC.
On November 13, 2023, the DBS and NYCEDC released the new RFP. The initial due date for submissions was January 12, 2024, with the due date being subsequently extended to February 12. 2024. The Company submitted a timely proposal in compliance with the terms of the RFP. The Interim Agreement will govern the Company’s operation of the Downtown Manhattan Heliport until the RFP process is concluded and an operator selected unless terminated earlier pursuant to its terms.
All of our business is conducted and reliant on the Downtown Manhattan Heliport. Any disruption in business at the Downtown Manhattan Heliport or additional restrictions imposed on the operations of the Downtown Manhattan Heliport by the NYCEDC could adversely impact our results of operations. Additionally, our business depends on us remaining as the operator of the Downtown Manhattan Heliport. If the Interim Agreement expires, or is terminated early pursuant to its terms, without us having a further agreement in place for our continued operation of the Downtown Manhattan Heliport, our business will be adversely affected as we would be required to cease our operations at the Downtown Manhattan Heliport.
Our business is subject to extensive governmental regulation.
We 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, such as those related to public health crises including pandemics and epidemics. 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.
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 growth and future success also depends on 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.
We are currently involved in arbitration with Empire Aviation, LLC regarding claims of unpaid fees to Empire under our prior Management Agreement, the arbitration could be time-consuming and expensive and may not have a favorable outcome.
Empire Aviation, LLC and the Company were parties to a certain Management Agreement effective November 1, 2008. The Management Agreement terminated on April 30, 2023. Empire Aviation notified the Company that it believes additional fees (“Management Fees”) are due under the Management Agreement.
On March 14, 2024, the Company and Empire participated in an arbitration of this dispute. In their filing, Empire claims that Saker failed to pay Empire certain Management Fees in various months throughout the term of the Management Agreement, aggregating approximately $1,050,000 plus $250,000 of accrued interest. Saker has asserted numerous defenses and counterclaims against Empire.
The arbitration will require additional time and effort from management and additional expenses and may not result in a favorable outcome. Such expenses and results could adversely affect our business.
Bank failures or other events affecting financial institutions could adversely affect our liquidity and financial performance.
We currently maintain a portion of our excess working capital reserves in a high yield savings account at UBS Financial Services Inc. (“UBS”), which we believe is a high-quality institution. The cash balance we have on account with UBS currently, and may from time to time, exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. If UBS were to fail, we could lose all or a portion of the amounts held more than such insurance limitations. In addition, events involving limited liquidity, defaults, non-performance or other adverse conditions in the financial or credit risk markets impacting financial institutions at which we maintain balances, or concerns or rumors about such events, may lead to disruptions in access to our bank deposits or otherwise adversely impact our liquidity or financial performance. There can be no assurance that our deposits in excess of the FDIC or other comparable insurance limits will be backstopped by the U.S. or that UBS or any bank or financial institution with which we do business will be able to obtain needed liquidity from other banks, government institutions, or by acquisition in the event of a failure or liquidity crisis.
Risks related to our securities:
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.
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.
Our management team currently has the ability to influence stockholder votes.
As of December 31, 2023, our executive officers, directors and their family members and associates, collectively, are entitled to vote 294,433 shares, or 29.9% of the 985,888 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 and one executive officer/director.
General risk factors:
Potential additional financings, the granting of additional stock options and any anti-dilution provisions in potential future derivative securities could further dilute our existing stockholders.
As of December 31, 2023, there were 985,888 shares of our common stock outstanding. If all of our outstanding and currently exercisable options were exercised, there would be 1,053,382 shares outstanding, an increase of approximately 6.8%. 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.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 1B.
UNRESOLVED STAFF COMMENTS
Not applicable.

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ITEM 2. PROPERTIES
ITEM 2.
PROPERTIES
As of April 1, 2024, the Company operates the Downtown Manhattan Heliport pursuant to the Interim Concession Agreement and had no leased offices or hangar space.

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ITEM 3. LEGAL PROCEEDINGS
ITEM 3.
LEGAL PROCEEDINGS
Empire Aviation, LLC (“Empire”) and the Company were parties to a certain Management Agreement (the “Management Agreement”) effective November 1, 2008. The Management Agreement terminated on April 30, 2023. As previously disclosed in the Company’s 2022 Annual Report on Form 10-K, Note 15. Contingent Liabilities, Empire Aviation notified the Company that it believes additional fees (“Management Fees”) are due under the Management Agreement.
On March 14, 2024, the Company and Empire participated in an arbitration of this dispute. In their filing, Empire claims that Saker failed to pay Empire certain Management Fees in various months throughout the term of the Management Agreement, aggregating approximately $1,050,000 plus $250,000 in accrued interest. Of this amount, approximately $350,000 has been accrued by the Company in 2023 and is included in the Company’s Condensed Consolidated Statement of Operations in selling general administrative expenses and the Condensed Consolidated Balance Sheet in accounts payable. Saker has asserted numerous defenses including, but not limited to, Empire waiving its rights to such fees by the parties’ course of conduct. Further, Saker asserted counterclaims against Empire. The Company and Empire will each submit proposed findings to the arbitrator in the next 30 days. We anticipate that the arbitrator will issue his rulings within 30 days of these submissions. Although we believe that Saker has valid defenses and a good chance to prevail on the merits against Empire’s claims, we can give no assurance as to the same.

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ITEM 4. MINE SAFETY DISCLOSURE
ITEM 4.
MINE SAFETY DISCLOSURES
Not applicable.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
ITEM 5.
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 common stock as reported on the OTCQB each full quarterly period within for the two most recent fiscal years.
Common Stock
Quarterly Period Ended
High
Low
March 31, 2022
$ 4.20
$ 2.50
June 30, 2022
$ 4.91
$ 4.10
September 30, 2022
$ 4.78
$ 3.51
December 31, 2022
$ 5.75
$ 4.10
March 31, 2023
$ 6.15
$ 5.15
June 30, 2023
$ 6.35
$ 4.40
September 30, 2023
$ 5.89
$ 4.35
December 31, 2023
$ 8.00
$ 5.60
Holders
As of April 1, 2024, there were approximately 475 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
In the past, the Company has paid cash dividends on our common stock. Any future determination to pay dividends on our common stock will be at the discretion of our Board of Directors and will depend upon a number of factors, including our results of operations, financial condition, future prospects, contractual restrictions, restrictions imposed by applicable law and other factors our Board of Directors deems relevant.

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ITEM 6. SELECTED FINANCIAL DATA
ITEM 6.
[RESERVED]

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
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 uncer-tainties, 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, general economic conditions, our ability to raise additional capital, 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
Saker Aviation Services, Inc. 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 subsidiary, we operate in the aviation services segment of the general aviation industry in which we serve as the operator of a heliport.
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 and until October 31, 2022 as an FBO and MRO at the Garden City (Kansas) Regional Airport.
On October 31, 2022, the Garden City facilities were sold and we no longer maintain an FBO or MRO at the Garden City (Kansas) Regional Airport.
Our business activities at the Downtown Manhattan Heliport commenced in November 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”).
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.
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 Annual Report on Form 10-K.
Consolidated Statement of Operations Data:
Year Ended
December 31,
Year Ended
December 31,
(in thousands, except for share and per share data)
Revenue
$ 8,838
$ 7,599
Operating income
$ 3,513
$
Other income, before income tax expense
$
$
Income from continuing operations, before income taxes
$ 3,953
$ 1,361
Income tax expense
$ (1,507 )
(300 )
Discontinued operations income, net of income taxes
$
$
Net Income
$ 2,446
$ 1,247
Net income per share - basic
$ 2.50
$ 1.28
Net income per share - diluted
$ 2.47
$ 1.26
Weighted average number of shares - basic
976,782
976,048
Weighted average number of shares - diluted
989,686
987,149
Balance Sheet Data: (in thousands)
December 31,
December 31,
Working capital surplus
$ 8,270
$ 5,740
Total assets
$ 10,611
$ 6,913
Total liabilities
$ 2,292
$ 1,130
Stockholders’ equity
$ 8,319
$ 5,783
Total liabilities and Stockholders’ equity
$ 10,611
$ 6,913
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Comparison of Results for the Years Ended December 31, 2023 and December 31, 2022.
REVENUE AND RESULTS OF CONTINUING OPERATIONS
DISCONTINUED OPERATIONS
As disclosed in a Current Report on Form 8-K filed with the SEC on November 2, 2022, on October 31, 2022 (the “Closing Date”), the Company sold its subsidiary FBO and MRO operations of FBO Air-Garden City, Inc. (“GCK”) to Crosby Flying Services, LLC (the “Buyer”) for an aggregate purchase price of $1.6 million. The Buyer paid the purchase price on the Closing Date less $160,000 (the “Installment Payment”) which was paid in cash upon the first anniversary of the Closing Date. GCK results of operations have been reported as discontinued operations in the Condensed Consolidated Statements of Operations for the year ended December 31, 2022.
Comparison of Continuing Operations from the Twelve Months Ended December 31, 2023 and December 31, 2022.
REVENUE
Revenue from continuing operations increased by 16.3 percent to $8,837,614 for the twelve months ended December 31, 2023, as compared with corresponding prior-year period revenue of $7,598,597.
For the twelve months ended December 31, 2023, revenue from continuing operations associated with services and supply items increased by 11.9 percent to approximately $6,429,414 as compared to approximately $5,747,000 in the twelve months ended December 31, 2022. This increase was attributable to increased demand for services in 2023 compared to the prior year.
For the twelve months ended December 31, 2023, revenue from continuing operations associated with the sale of jet fuel and related items increased by 45.3 percent to approximately $2,299,000 as compared to approximately $1,582,000 in the twelve months ended December 31, 2022. This increase was attributable to the higher volume of gallons and price of jet fuel sold at our New York location in 2023 compared to the prior year.
For the twelve months ended December 31, 2023, all other revenue from continuing operations decreased by 59.6 percent to approximately $109,000 as compared to approximately $269,000 in the twelve months ended December 31, 2022.
GROSS PROFIT
Total gross profit increased 36.2 percent to $6,281,220 in the twelve months ended December 31, 2023 as compared to $4,613,316 in the twelve months ended December 31, 2022. Gross margin was 71.1 percent for the twelve months ended December 31, 2023 as compared to 60.7 percent for the same period in 2022. The increase in gross profit related to higher levels of activity at our New York location in 2023 as compared to the prior year. The increase in gross margin is related to the lower cost of jet fuel and lower costs associated with services and supplies in 2023 as compared to the prior year.
OPERATING EXPENSE
Selling, General and Administrative
Total selling, general and administrative expenses (“SG&A”) were $2,768,310 in the twelve months ended December 31, 2023, a decrease of $1,112,592, or 28.7 percent, as compared to the same period in 2022.
SG&A associated with operations were approximately $2,132,000 in the twelve months ended December 31, 2023, a decrease of approximately $1,197,000, or 35.9 percent, as compared to the twelve months ended December 31, 2022. SG&A as a percentage of revenue, was 24.1 percent for the twelve months ended December 31, 2023, as compared with 43.8 percent in the corresponding prior year period. The decrease in SG&A was primarily attributable to decreased fees due under the Company’s management agreement and fees due the NYCEDC in 2023 compared to the prior year.
Corporate SG&A was approximately $636,000 for the twelve months ended December 31, 2023, representing an increase of approximately $84,000, or 15.2 percent, as compared with the corresponding prior year period. The increase in Corporate SG&A on a year-over-year basis was largely attributable to an increase in services provided by various service providers.
OPERATING INCOME
Operating income for the year ended December 31, 2023 was $3,512,910 as compared to operating income of $732,414 in the year ended December 31, 2022. The increase in operating income on a year-over-year basis was driven by the factors described above.
Depreciation and Amortization
Depreciation and amortization was approximately $16,000 and $100,000 for the twelve months ended December 31, 2023 and 2022, respectively. The decrease in depreciation expense was attributable to the sale of our Kansas location on October 31, 2022.
Interest Income and Expense
Interest income was $220,098 and $3,302 for the twelve months ended December 31, 2023 and 2022, respectively. The increase in interest income is attributable to the Company investing its excess working capital reserves in a high yield savings account and U.S government backed securities with UBS Financial Services Inc. (“UBS”).
Interest expense for the year ended December 31, 2023 was $0 as compared to $17,979 in the same period in 2022. Interest expense in 2022 is included in loss from discontinued operations. The decrease in interest expense on a year-over-year basis was due primarily to the repayment of notes payable in connection with the sale of our Kansas operation effective October 31, 2022.
Income Tax
Income tax expense for the twelve months ended December 31, 2023 was approximately $1,507,000, as compared to $300,000 in the same period in 2022. The increase in income tax expense is attributable to higher net income in the twelve months ended December 31, 2023 as compared to 2022.
Net Income Per Share
Net income for the twelve months ended December 31, 2023 was $2,446,444 as compared to net income of $1,246,621 in the twelve months ended December 31, 2022. The increase in net income was attributable to higher revenue combined with decreased fees due under the Company’s management agreement and fees due the NYCEDC in 2023 compared to the prior year.
Basic net income per share for the twelve months ended December 31, 2023 was $2.50 as compared to basic net income per share of $1.28 in 2022. Diluted net income per share for the twelve months ended December 31, 2023 was $2.47 as compared to diluted net income per share of $1.26 in 2022.
Liquidity and Capital Resources
As of December 31, 2023, we had cash, cash equivalents, and restricted cash of $6,931,709 and a working capital surplus of $8,269,527. We generated revenue from continuing operations of $8,837,614 and had net income of $2,446,444 for the year ended December 31, 2023. For the year ended December 31, 2023, cash flows included net income of $2,446,644, cash provided by operating activities of $3,344,387, and cash used in investing activities of $2,389,835.
On March 15, 2018, the Company entered into a loan agreement for a $1,000,000 revolving line of credit (the “Key Bank Revolver Note”) which, at the discretion of the Bank, provides for the Company to borrow up to $1,000,000 for working capital and general corporate purposes. On November 22, 2023, the Bank reduced the amount available under the Key Bank Revolver Note to $500,000. This revolving line of credit is a demand note with no stated maturity date. Borrowings under the Key Bank Revolver Note will bear interest at a rate per annum equal to Daily Simple SOFR plus 2.75%. The Company is required to make monthly payments of interest on any outstanding principal under the Key Bank Revolver Note and is required to pay the entire balance, including principal and all accrued and unpaid interest and fees, upon demand by the Bank. Any proceeds from the Key Bank Revolver Note would be secured by substantially all of the Company’s assets. There were no amounts due under the Key Bank Revolver Note at December 31, 2023 or 2022.
The Company has invested its excess working capital reserves in a high yield savings account and government backed securities with UBS Financial Services Inc. (“UBS”).
The Company was 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 was required to 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.
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, the Company has not been allowed to permit its tenant operators to conduct tourist flights from the Downtown Manhattan Heliport on Sundays since 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. The Air Tour Agreement also provided for the minimum annual guarantee payments the Company is required to pay to the City of New York under the Concession Agreement.
Additionally, since June 1, 2016, the Company has 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 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 and gave the City of New York two one-year options to extend the term of the Concession Agreement. The term of the Concession Agreement was subsequently extended by the City through April 30, 2023 by the City’s exercise of both one-year option renewals and expired on that date.
The reductions under the Air Tour Agreement have negatively impacted the Company’s business and financial results as well as those of its management company at the Downtown Manhattan Heliport, Empire Aviation. The Company incurred management fees with Empire Aviation of approximately $448,000 and $2,138,000 during the years ended December 31, 2023 and December 31, 2022, respectively. Empire Aviation notified the Company that it believes additional fees are due under the management agreement. Please see Note 10. Litigation. The Empire management agreement expired April 30, 2023. The Company’s internal management team and heliport employees have taken over all duties relating to the management of the heliport.
During the program year that began on May 1, 2020, the City of New York agreed, in recognition of the pandemic’s impact, that the Company could defer payment of minimum guaranteed payments. In April 2021, the City of New York waived the deferred fees through December 31, 2020. In May 2021, the City of New York waived the deferred fees through April 30, 2021 which coincided with the original expiration of the Concession Agreement as amended by the Air Tour Agreement. The Company worked with the City of New York to address fees to be paid by the Company for the period May 1, 2021 through December 31, 2021. In March 2022, the City of New York agreed to accept 18% of monthly Gross Receipts in excess of $100,000 as Concession fees for this period. In April 2022, the Company agreed to resume paying the City of New York the total monthly amounts due under the Concession Agreement retro-active to January 2022 and to continue paying fees due under the Concession Agreement through the remainder of the Air Tour Agreement.
On February 15, 2023, NYCEDC reported that it would be bringing a new concession agreement with the Company as the operator of the Downtown Manhattan Heliport to the New York City Franchise and Concession Review Committee meeting on March 3, 2023. The item was subsequently removed from the agenda, with NYCEDC announcing on April 7, 2023 that the previous Request for Proposals ("RFP") had been cancelled and that it is their intention to put out a new RFP in 2023.
On April 28, 2023, the Company entered into a Temporary Use Authorization Agreement (the “Use Agreement”), effective as of May 1, 2023, with the City of New York acting by and through the New York City of Department of Small Business Services (“DSBS”). The Use Agreement has a term of one year. Pursuant to the terms of the Use Agreement, the Company has been granted the exclusive right to operate as the fixed base operator for the Downtown Manhattan Heliport and collect all revenue derived from the Downtown Manhattan Heliport operations. In addition to terminations for an event of default, the Use Agreement could be terminated at any time by the Commissioner of the DSBS or suspended at any time by the NYCEDC. The Company was required under the Use Agreement to remit a monthly administrative fee to the NYCEDC in the amount of $5,000. For the year ended December 31, 2023, the Company incurred $40,000 in administrative fees which are recorded in the cost of revenue.
On July 13, 2023, the DSBS was granted approval by the Franchise and Concession Review Committee to enter into an Interim Concession Agreement (the “Interim Agreement”) with the Company to provide for the continued operation of the Downtown Manhattan Heliport. The Interim Agreement became effective upon registration with the Comptroller of the City of New York and commenced on December 12, 2023, the date set forth in a written notice to proceed received by the Company. The Interim Agreement provides for one (1) six-month term (the “Initial Period”), with two (2) six-month options to renew (the “Renewal Periods”). The Company is required to pay the greater of $1,036,811 or 30% of Gross Receipts during the Initial Term and the greater of $518,406 or 30% of Gross Receipts during both Renewal Periods. In addition to terminations for an event of default, the Interim Agreement can be terminated at any time by the Commissioner of the DSBS or suspended at any time by the NYCEDC. During the years ended December 31, 2023 and 2022, we incurred approximately $682,000 and $1,509,000 in concession fees, respectively, which are recorded in the cost of revenue.
On November 13, 2023, the DBS and NYCEDC released the new RFP. The initial due date for submissions was January 12, 2024, with the due date being subsequently extended to February 12. 2024. The Company submitted a timely proposal in compliance with the terms of the RFP. The Interim Agreement will govern the Company’s operation of the Downtown Manhattan Heliport until the RFP process is concluded and an operator selected unless terminated earlier pursuant to its terms.
During the twelve months ended December 31, 2023, we had a net increase in cash of $954,552. Our sources and uses of funds during this period were as follows:
Cash from Operating Activities
For the year ended December 31, 2023, net cash provided by operating activities was $3,344,387. This amount included an increase in operating cash related to net profit of $2,446,444 and additions for the following items: (i) depreciation, $16,414; (ii) stock-based compensation, $81,999; (iii)inventories, $12,409; (iv) income tax receivable, $75,000; (v) customer deposits, $48,813; (vi) accounts payable, $376,628; and (vii) accrued expenses, $735,830. The increase in cash provided by operating activities in 2023 was offset by the following items: (i) realized gain on investments, $8,479; (ii) accounts receivable, $49,978 and (iii) prepaid expenses $390,693. For the year ended December 31, 2022, net cash provided by operating activities was $1,712,556. This amount included an increase in operating cash related to net profit of $1,246,621 and additions for the following items: (i) depreciation, $100,089; (ii) stock based compensation, $71,995; (iii) accounts receivable, $60,866; (iv)inventories, $7,091; (v) income tax receivable, $573,679; (vi) prepaid expenses, $150,805; (vii) customer deposits, $123,755; (viii) accounts payable, $116,284; and (vii) accrued expenses, $192,689. The increase in cash provided by operating activities in 2022 was offset by the following items: (i) gain on sale of assets, $431,318 and (ii) life insurance proceeds $500,000.
Cash from Investing Activities
For the year ended December 31, 2023, net cash of $2,389,835 was used in investing activities for the purchase of investments of $3,386,842 and the purchase of property and equipment of $22,992. These amounts were offset by proceeds from the sale of investments of $852,000, the exercise of options of $7,999, and payment of note receivable from sale of assets of $160,000. For the year ended December 31, 2022, net cash provided by investing activities was $1,424,315. This amount included net proceeds from sale of assets, $1,440,000, offset by the purchase of property and equipment, $15,685.
Cash from Financing Activities
For the year ended December 31, 2023, there was no cash used in, or provided by, financing activities. For the year ended December 31, 2022, net cash provided by financing activities was $393,380. This amount included proceeds from life insurance $500,000 offset by (i) repayment of notes payable, $67,045; and (ii) repayment of right of use lease payables, $39,575.
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
Beginning in April 2022, the Company’s customers began operating at pre-pandemic levels which continued through the end of 2022. In June 2022, a new tenant began operating at our Downtown Manhattan Heliport. For the fiscal year ended December 31, 2022, three customers represented approximately $184,000, or 75%, of the balance of accounts receivable. In addition, these three customers represented approximately 83% of our revenue in 2022. The Company has a security deposit in place for each of these customers.
In September 2023, one of the Company’s former customers resumed operations. For the fiscal year ended December 31, 2023, four customers represented approximately $248,000, or 84.1%, of the balance of accounts receivable. In addition, these four customers represented approximately 84.8% of our revenue in 2023. The Company has a security deposit in place for each of these customers.
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. 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 2020.
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.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA
SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES
Table of Contents to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm
Consolidated Financial Statements
Consolidated Balance Sheets as of December 31, 2023 and 2022
Consolidated Statements of Operations For the Years Ended December 31, 2023 and 2022
Consolidated Statements of Stockholders’ Equity For the Years Ended December 31, 2023 and 2022
Consolidated Statements of Cash Flows For the Years Ended December 31, 2023 and 2022
Notes to Consolidated Financial Statements
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, 2023 and 2022, 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, 2023 and 2022, 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.
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.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter did not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Contingent Liabilities
As described in Note 10 to the consolidated financial statements, management assesses matters to determine whether it can reasonably estimate the amount of a loss contingency and whether the loss is probable. Where the reasonable estimate of the probable loss is a range, Management records as an accrual in its financial statements the most likely estimate of the loss or the low end of the range, if there is no best estimate. Management either discloses the amount of a possible loss or range of a loss in excess of the recorded accrual or states that such an estimate cannot be made. Management discloses significant contingencies even where the liability is not probable or the amount of the loss is not estimable, or both, if management believes there is at least a reasonable possibility that a loss may be incurred.
The principal considerations for our determination that performing procedures relating to loss contingencies is a critical audit matter are the significant judgment by Management when assessing the likelihood of a loss being incurred and when estimating the loss or range of loss for each contingency, which in turn led to significant auditor judgment, subjectivity and effort in performing procedures and evaluating Management’s assessment of the liabilities and disclosure associated with loss contingencies.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included auditing the estimated range of loss provided by Management to determine if the amount of loss can be reasonably estimated, as well as financial statement disclosures. These procedures also included, among others, evaluating the reasonableness of Management’s assessment regarding whether the loss is probable and evaluating the sufficiency of the Company’s disclosures related to this contingency.
/s/ Kronick Kalada Berdy & Co. P.C.
We have served as the Company's auditor since 2009.
Kingston, Pennsylvania
April 01, 2024
PCAOB ID No. 448
SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31,
December 31,
ASSETS
CURRENT ASSETS
Cash, cash equivalents, and restricted cash
$ 6,931,709
$ 5,977,157
Investments
2,543,321
Accounts receivable
294,521
244,543
Non-Compete receivable
160,000
Inventories
1,142
13,551
Income tax receivable
44,899
119,899
Prepaid expenses
745,606
354,913
Total current assets
10,561,198
6,870,063
PROPERTY AND EQUIPMENT, net of accumulated depreciation and amortization of $3,127,876 and $3,111,462 respectively
49,440
42,862
TOTAL ASSETS
$ 10,610,638
$ 6,912,925
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable
$ 705,133
$ 328,505
Customer deposits
253,446
204,633
Accrued expenses
1,333,092
597,262
Total current liabilities
2,291,671
1,130,400
Total liabilities
2,291,671
1,130,400
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; 985,888 and 976,330 shares issued and outstanding as of December 31, 2023 and 2022, respectively
29,577
29,290
Additional paid-in capital
19,902,505
19,812,794
Accumulated deficit
(11,613,115 )
(14,059,559 )
TOTAL STOCKHOLDERS’ EQUITY
8,318,967
5,782,525
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$ 10,610,638
$ 6,912,925
See accompanying notes to consolidated financial statements.
SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended
December 31,
REVENUE
$ 8,837,614
$ 7,598,597
COST OF REVENUE
2,556,394
2,985,281
GROSS PROFIT
6,281,220
4,613,316
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
2,768,310
3,880,902
OPERATING INCOME
3,512,910
732,414
OTHER INCOME
BAD DEBT RECOVERY
212,000
125,000
LIFE INSURANCE PROCEEDS, FORMER PRESIDENT
500,000
REALIZED GAIN ON INVESTMENTS
8,479
INTEREST INCOME
220,098
3,302
TOTAL OTHER INCOME
440,577
628,302
INCOME FROM CONTINUING OPERATIONS, before income taxes
3,953,487
1,360,716
INCOME TAX EXPENSE
(1,507,043 )
(300,000 )
INCOME FROM CONTINUING OPERATIONS
2,446,444
1,060,716
DISCONTINUED OPERATIONS
Loss
(65,413 )
Gain in Sale of Assets
431,318
Income tax expense
(180,000 )
INCOME FROM DISCONTINUED OPERATIONS, net of income taxes
185,905
NET INCOME
$ 2,446,444
$ 1,246,621
Basic Net Income Per Common Share
$ 2.50
$ 1.28
Diluted Net Income Per Common Share
$ 2.47
$ 1.26
Weighted Average Number of Common Shares - Basic
976,782
976,048
Weighted Average Number of Common Shares - Diluted
989,686
987,149
See accompanying notes to consolidated financial statements.
SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR YEARS ENDED DECEMBER 31, 2023 AND 2022
Additional
Total
Common Stock
Paid-in
Accumulated
Stockholders’
Shares
Amount
Capital
Deficit
Equity
BALANCE - January 1, 2022
975,074
$ 29,252
$ 19,740,837
$ (15,306,180 )
$ 4,463,909
Amortization of stock based compensation
71,995
71,995
Issuance of Common Stock in connection with exercise of stock options
1,256
(38 )
Net income
1,246,621
1,246,621
BALANCE - December 31, 2022
976,330
$ 29,290
$ 19,812,794
$ (14,059,559 )
$ 5,782,525
Amortization of stock based compensation
81,999
81,999
Issuance of Common Stock in connection with exercises of stock options
9,558
7,712
7,999
Net income
2,446,444
2,446,444
BALANCE - December 31, 2023
985,888
$ 29,577
$ 19,902,505
$ (11,613,115 )
$ 8,318,967
See accompanying notes to consolidated financial statements.
SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended
December 31,
CASH FLOWS FROM OPERATING ACTIVITIES
Net income
$ 2,446,444
1,246,621
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
16,414
100,089
Life insurance proceeds
(500,000 )
Stock based compensation
81,999
71,995
Realized gain on investments
(8,479 )
Gain on sale of assets
(431,318 )
Changes in operating assets and liabilities:
Accounts receivable
(49,978 )
60,866
Inventories
12,409
7,091
Income tax receivable
75,000
573,679
Prepaid expenses
(390,693 )
150,805
Customer deposits
48,813
123,755
Accounts payable
376,628
116,284
Accrued expenses
735,830
192,689
TOTAL ADJUSTMENTS
897,943
465,935
NET CASH PROVIDED BY OPERATING ACTIVITIES
3,344,387
1,712,556
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments
(3,386,842 )
Proceeds from sales of investments
852,000
Net proceeds from sale of assets
1,440,000
Payment for exercise of options
7,999
Payment of note receivable from sale of assets
160,000
Purchase of property and equipment
(22,992 )
(15,685 )
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
(2,389,835 )
1,424,315
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from life insurance
500,000
Repayment of notes payable
(67,045 )
Repayment of right of use leases payable
(39,575 )
NET CASH PROVIDED BY FINANCING ACTIVITIES
393,380
NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
954,552
3,530,251
CASH, CASH EQUIVAELNTS, AND RESTRICTED CASH - Beginning
5,977,157
2,446,906
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH - Ending
$ 6,931,709
5,977,157
NON-CASH INVESTING ACTIVITIES
Net proceeds from sale of assets was reduced by issuance of a note receivable
$ 160,000
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the periods for:
Interest
$
17,979
Income taxes
$ 728,110
216,546
See accompanying notes to consolidated financial statements.
SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - Nature of Operations
Our business activities are carried out by FirstFlight Heliports, LLC d/b/a Saker Aviation Services (“FFH”), a wholly-owned subsidiary, as the operator of 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 (“GCK”), a wholly-owned subsidiary and, until October 31, 2022, provided services as a fixed base operator (“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.
NOTE 2 - Liquidity and Material Agreements
As of December 31, 2023, we had cash, cash equivalents, and restricted cash of $6,931,709 and a working capital surplus of $8,269,527. We generated revenue from continuing operations of $8,837,614 and had net income of $2,446,444 for the year ended December 31, 2023. For the year ended December 31, 2023, cash flows included net income of $2,446,444, cash provided by operating activities of $3,344,387, and cash used in investing activities of $2,389,835.
On March 15, 2018, the Company entered into a loan agreement for a $1,000,000 revolving line of credit (the “Key Bank Revolver Note”) which, at the discretion of the Bank, provides for the Company to borrow up to $1,000,000 for working capital and general corporate purposes. On November 22, 2023, the Bank reduced the amount available under the Key Bank Revolver Note to $500,000. This revolving line of credit is a demand note with no stated maturity date. Borrowings under the Key Bank Revolver Note will bear interest at a rate per annum equal to Daily Simple SOFR plus 2.75%. The Company is required to make monthly payments of interest on any outstanding principal under the Key Bank Revolver Note and is required to pay the entire balance, including principal and all accrued and unpaid interest and fees, upon demand by the Bank. Any proceeds from the Key Bank Revolver Note would be secured by substantially all of the Company’s assets. There were no amounts due under the Key Bank Revolver Note at December 31, 2023 or 2022.
The Company has invested its excess working capital reserves in a high yield savings account and government backed securities with UBS Financial Services Inc. (“UBS”).
The Company was 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 was required to 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.
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, the Company has not been allowed to permit its tenant operators to conduct tourist flights from the Downtown Manhattan Heliport on Sundays since 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. The Air Tour Agreement also provided for the minimum annual guarantee payments the Company is required to pay to the City of New York under the Concession Agreement.
Additionally, since June 1, 2016, the Company has 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 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 and gave the City of New York two one-year options to extend the term of the Concession Agreement. The term of the Concession Agreement was subsequently extended by the City through April 30, 2023 by the City’s exercise of both one-year option renewals and expired on that date.
The reductions under the Air Tour Agreement have negatively impacted the Company’s business and financial results as well as those of its management company at the Downtown Manhattan Heliport, Empire Aviation. The Company incurred management fees with Empire Aviation of approximately $448,000 and $2,138,000 during the years ended December 31, 2023 and December 31, 2022, respectively. Empire Aviation notified the Company that it believes additional fees are due under the management agreement, as further described in Note 10. Litigation. The Empire management agreement expired April 30, 2023. The Company’s internal management team and heliport employees have taken over all duties relating to the management of the heliport.
During the program year that began on May 1, 2020, the City of New York agreed, in recognition of the pandemic’s impact, that the Company could defer payment of minimum guaranteed payments. In April 2021, the City of New York waived the deferred fees through December 31, 2020. In May 2021, the City of New York waived the deferred fees through April 30, 2021 which coincided with the original expiration of the Concession Agreement as amended by the Air Tour Agreement. The Company worked with the City of New York to address fees to be paid by the Company for the period May 1, 2021 through December 31, 2021. In March 2022, the City of New York agreed to accept 18% of monthly Gross Receipts in excess of $100,000 as Concession fees for this period. In April 2022, the Company agreed to resume paying the City of New York the total monthly amounts due under the Concession Agreement retro-active to January 2022 and to continue paying fees due under the Concession Agreement through the remainder of the Air Tour Agreement.
On February 15, 2023, NYCEDC reported that it would be bringing a new concession agreement with the Company as the operator of the Downtown Manhattan Heliport to the New York City Franchise and Concession Review Committee meeting on March 3, 2023. The item was subsequently removed from the agenda, with NYCEDC announcing on April 7, 2023 that the previous Request for Proposals ("RFP") had been cancelled and that it is their intention to put out a new RFP in 2023.
On April 28, 2023, the Company entered into a Temporary Use Authorization Agreement (the “Use Agreement”), effective as of May 1, 2023, with the City of New York acting by and through the New York City of Department of Small Business Services (“DSBS”). The Use Agreement has a term of one year. Pursuant to the terms of the Use Agreement, the Company has been granted the exclusive right to operate as the fixed base operator for the Downtown Manhattan Heliport and collect all revenue derived from the Downtown Manhattan Heliport operations. In addition to terminations for an event of default, the Use Agreement could be terminated at any time by the Commissioner of the DSBS or suspended at any time by the NYCEDC. The Company was required under the Use Agreement to remit a monthly administrative fee to the NYCEDC in the amount of $5,000. For the year ended December 31, 2023, the Company incurred $40,000 in administrative fees which are recorded in the cost of revenue.
On July 13, 2023, the DSBS was granted approval by the Franchise and Concession Review Committee to enter into an Interim Concession Agreement (the “Interim Agreement”) with the Company to provide for the continued operation of the Downtown Manhattan Heliport. The Interim Agreement became effective upon registration with the Comptroller of the City of New York and commenced on December 12, 2023. The Interim Agreement provides for one (1) six-month term (the “Initial Period”), with two (2) six-month options to renew (the “Renewal Periods”). The Company is required to pay the greater of $1,036,811 or 30% of Gross Receipts during the Initial Term and the greater of $518,406 or 30% of Gross Receipts during both Renewal Periods. In addition to terminations for an event of default, the Interim Agreement can be terminated at any time by the Commissioner of the DSBS or suspended at any time by the NYCEDC. During the years ended December 31, 2023 and 2022, we incurred approximately $682,000 and $1,509,000 in concession fees, respectively, which are recorded in the cost of revenue.
On November 13, 2023, the DBS and NYCEDC released the new RFP. The initial due date for submissions was January 12, 2024, with the due date being subsequently extended to February 12. 2024. The Company submitted a timely proposal in compliance with the terms of the RFP. The Interim Agreement will govern the Company’s operation of the Downtown Manhattan Heliport until the RFP process is concluded and an operator selected unless terminated earlier pursuant to its terms.
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 GCK. 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 consolidated 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, stock-based compensation, allowance for credit losses, deferred tax assets, and contingent liabilities.
Cash, cash equivalents, and restricted 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. Amounts included in restricted cash at December 31, 2022 is a deposit of $425,000 required by the Concession Agreement with NYEDC. The deposit restriction was lifted in connection with the termination of the Concession Agreement on April 30, 2023. The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.
Investments and Related Allowance for Credit Losses
Investments held by the Company have readily determinable fair values and are reported at cost, which approximates fair value at December 31, 2023. On a monthly basis, realized gains and losses are determined by using the first-in first-out method and will be reported in other income and unrealized gains and losses will be reported in Other Comprehensive Income (Loss). Investments consist of U.S. treasury Notes and Bills with maturities ranging from March 31, 2024 through November 30, 2024. Investments are not purchased with the intent of selling in the near term. However, from time to time, the Company may decide to sell certain securities for liquidity, tax planning and other business purposes. Purchases and sales are recorded on a trade date basis and interest income is recorded when earned.
The Company classifies its debt securities classified as available for sale are carried in the financial statements at fair value. Realized gains and losses on available for sale debt securities, determined using the first-in, first-out (FIFO) method, are included in earnings. Management assesses the financial condition and near-term prospects of the issuer, industry, and/or geographic conditions, credit ratings as well as other indicators at the individual security level. Impairments below cost in the estimated fair value of individual available for sale debt securities when there is an intent to sell or for which it more likely than not the Company will be required to sell before the impairment is recovered, are realized in other income in the statements of operations. When there is not an intent to sell or it is more likely than not the Company will not be required to sell the security before the impairment is recovered, management assesses whether the decline in fair value has resulted from credit losses or other factors. If the present value of discounted cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for available for sale credit losses is recorded. Such losses are limited to the amount that amortized cost exceeds fair value, even if the amount of the credit loss is greater. Any future changes in the allowance for credit losses is recorded as provision for (reversal of) credit losses.
Accounts Receivable and Revenue Concentration
Beginning in April 2022, the Company’s customers began operating at pre-pandemic levels which continued through the end of 2022. In June 2022, a new tenant began operating at our New York Heliport. For the fiscal year ended December 31, 2022, the Company’s three customers represented approximately $184,000, or 75%, of the balance of accounts receivable. In addition, these three customers represented approximately 83% of our revenue in 2022. The Company has a security deposit in place for each of these customers.
In September 2023, one of the Company’s former customers resumed operations. For the fiscal year ended December 31, 2023, the Company’s four customers represented approximately $248,000, or 84.1%, of the balance of accounts receivable. In addition, these four customers represented approximately 84.8% of our revenue in 2023. The Company has a security deposit in place for each of these customers.
Accounts receivable are stated at the amount management expects to collect from outstanding balances. Collection losses have historically been immaterial, and management concluded that, based on its review of material balances outstanding, current economic conditions and the financial stability of its customers a valuation allowance for credit losses was not needed.
Inventories
Inventory consists of aviation fuel which is stated at 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 4. Amortization of leasehold improvements is provided using the straight-line method over their estimated useful life. 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.
Revenue Recognition
The Company recognizes revenue from ground-based services, such as fueling. 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.
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. Customer deposits amounted to $253,446 and $204,633 at December 31, 2023 and 2022, 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 due to the uncertainty of future taxable income and the lack thereof of taxable income in carry-back 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 2020.
Discontinued Operations
A component of the Company is classified as a discontinued operation when (i) the operations and cash flows of the component of the Company can be clearly distinguished and have been or will be eliminated from our ongoing operations; (ii) the component has either been disposed of or is classified as held for sale; and (iii) we will not have any significant continuing involvement in the operations of the component of the Company after the disposal transactions. Significant judgments are involved in determining whether a component meets the criteria for discontinued operations reporting and the period in which these criteria are met.
If a component of the Company is reported as a discontinued operation, the results of operations through the date of sale, including any gain or loss recognized on the disposition, are presented on a separate line of the Statement of Operations.
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.
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, 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 anti-dilutive.
The following table sets forth the components used in the computation of basic and diluted income per share:
For the Year Ended
December 31,
2023(1)
2022(1)
Weighted average common shares outstanding, basic
976,782
976,048
Common shares upon exercise of options
12,904
11,101
Weighted average common shares outstanding, diluted
989,686
987,149
(1)
Common shares of 13,332 and 26,664 underlying outstanding stock options for the years ended December 31, 2023 and 2022, respectively, were excluded from the computation of diluted earnings per share as their inclusion would be anti-dilutive.
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, 2023 and 2022, the Company incurred stock based compensation of $81,999 and $71,995, respectively. 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, 2023, the unamortized fair value of the options totaled $92,880 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, 2023 and 2022 were estimated using the Black-Scholes option pricing model with the following weighted average fair values:
For the Year Ended
December 31,
Dividend yield
%
%
Expected volatility
4.918 %
4.918 %
Risk-free interest rate
3.84 %
3.99 %
Expected lives, years
5.0
5.0
NOTE 4 - Property and Equipment, Net
Property and equipment consist of the following:
December 31,
Estimated
Useful Life
(in years)
Office furniture and equipment
$ 424,242
$ 413,574
-
Leasehold improvements
2,753,074
2,740,750
-
Total
3,177,316
3,154,324
Less: accumulated depreciation and amortization
(3,127,876 )
(3,111,462 )
Property and equipment, net
$ 49,440
$ 42,862
Depreciation and amortization expense for the years ended December 31, 2023 and 2022 was approximately $16,000 and $100,000, respectively. The decrease in depreciation expense was attributable to the sale of our Kansas operation on October 31, 2022.
NOTE 5 - Income Taxes
The Company’s deferred tax assets consisted of the following:
December 31,
Deferred tax assets:
Stock based compensation
$ 86,000
$ 86,000
Property and equipment
376,000
385,000
Total deferred tax assets
462,000
471,000
Valuation Allowance
(462,000 )
(471,000 )
Deferred tax asset - net of valuation allowance
$
$
Decrease in valuation allowance
$ (9,000 )
$
The valuation allowance fluctuated due to the uncertainty of future taxable income.
The provision for income taxes from continuing operations using the statutory federal tax rate as compared to the Company's effective tax rate is summarized as follows:
December 31,
Tax at statutory rate
21.0 %
21.0 %
Life insurance proceeds
%
(11.7 )%
State and local income taxes, net of federal
17.0 %
12.7 %
Effective income tax expense rate
38.0 %
22.0 %
Income tax receivable principally consists of funds due from the taxing authorities resulting from the carryback of of net operating loss to prior tax years.
NOTE 6 - Stockholders’ Equity
Common Stock
A summary of the Company’s shares of Common Stock outstanding at December 31, 2023 is presented in the table below:
Number of shares outstanding
December 31, 2022
976,330
Issuance of common stock in connection with exercise of stock options
9,558
December 31, 2023
985,888
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 “2019 Plan”) at which time the Company’s 2005 Stock Incentive Plan (the “2005 Plan”) was terminated and no future awards could be issued under the 2005 plan. As of December 31, 2023, there were no options outstanding under the 2005 Plan.
The 2019 Plan is administered by the Company’s Compensation Committee and provides for 185,000 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, 2023 and 2022, there were 110,840 and 124,172 shares, respectively, available for grant as options under the 2019 Plan.
Details of all options outstanding under the Plan are presented in the table below:
Number of
Options
Weighted Average
Exercise Price
Balance, January 1, 2022
59,994
$ 2.184
Granted
20,832
4.900
Exercised
(3,333 )
2.580
Expired
(9,999 )
3.240
Balance, December 31, 2022
67,494
$ 4.040
Granted
13,332
7.600
Exercised
(13,332 )
2.662
Balance, December 31, 2023
67,494
$ 5.012
A summary of the Company’s stock options outstanding at December 31, 2023 is presented in the table below:
Exercise Price
Outstanding
Weighted average remaining contractual life of
options (in years)
Exercisable
Intrinsic
Value
$7.60
13,332
4.92
---
$
$4.00
7,500
3.66
7,500
$ 13,069
$5.40
13,332
3.92
13,332
$ 4,566
$3.45
9,999
2.92
9,999
$ 22,923
$2.58
9,999
1.92
9,999
$ 31,622
$5.60
13,332
.92
13,332
$ 1,900
TOTALS
67,494
54,162
$ 74,080
Preferred Stock
As of December 31, 2023 and 2022, 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 to 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, 2023 and 2022, there were no shares of preferred stock outstanding.
NOTE 7 - 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. Company contributions to the 401K Plan totaled approximately $28,000 and $40,000 for the years ended December 31, 2023 and 2022, respectively.
NOTE 8 - Related Parties
The law firm of Wachtel & Missry, LLP provides certain legal services to the Company and its subsidiaries from time to time. William B. Wachtel, Chairman of the Company’s Board of Directors, is a managing partner of this firm. During the twelve months ended December 31, 2023 and 2022, the Company was billed approximately $93,000 and $3,000, respectively, for legal services by Wachtel & Missry, LLP.
The Company was party to a management agreement with Empire Aviation, an entity owned by the children and grandchild of the Company’s former Chief Executive Officer and former member of our Company’s Board of Directors.
NOTE 9 - Discontinued Operations
As disclosed in a Current Report on Form 8-K filed with the SEC on October 3, 2022, GCK entered into a FBO Transfer Agreement (the “Agreement”) with Crosby Flying Services, LLC (the “Buyer”) pursuant to which GCK agreed (i) to sell to the Buyer substantially all of its assets (the “Assets”) and none of its liabilities, and (ii) to a seven year non-competition covenant (the “Non-Compete”) whereby the Company, including its subsidiaries and affiliates, will not engage in any business involving the operation of a fixed based operation supplying aviation fuels and lubricants or the supply of other goods or provision of services typically supplied or performed at fixed base operations at airports at any facility located within one hundred (100) miles of the Garden City Regional Airport in Garden City, Kansas (the “Airport”), for $1.6 million.
As disclosed in a Current Report on Form 8-K filed with the SEC on November 2, 2022, on October 31, 2022 (the “Closing Date”), the Company closed on the sale of the Assets to the Buyer and became subject to the Non-Compete, for an aggregate purchase price of approximately $1.5 million, after certain closing adjustments. The Buyer paid the purchase price on the Closing Date less $160,000, that amount being subject to GCK’s and the Company’s compliance with a Non-Compete Agreement. The $160,000 was paid upon the first anniversary of the Closing Date.
GCK results of operations have been reported as discontinued operations in the Condensed Consolidated Statements of Operations for the twelve months ended December 31, 2022.
Components of discontinued operations are as follows:
12/31/22
Revenue
$ 3,704,048
Cost of revenue
3,183,561
Gross profit
520,487
Operating expenses
567,920
Operating loss from discontinued operations
(47,433 )
Gain on sale
431,318
Income tax expense
(180,000 )
Interest expense
(17,980 )
Net income from discontinued operations
185,905
Basic and diluted net income per common share
0.19
Weighted average number of shares outstanding, basic
976,048
Weighted average number of shares outstanding, diluted
987,149
For the year ended December 31, 2022, total operating, investing, and financial cash flows from discontinued operations were $(416,413), $1,440,000, and $(106,620), respectively.
NOTE 10 - Litigation
Empire Aviation, LLC (“Empire”) and the Company were parties to a certain Management Agreement (the “Management Agreement”) effective November 1, 2008. The Management Agreement terminated on April 30, 2023. As previously disclosed in the Company’s 2022 Annual Report on Form 10-K, Note 10. Contingent Liabilities, Empire Aviation notified the Company that it believes additional fees (“Management Fees”) are due under the Management Agreement.
On March 14, 2024, the Company and Empire participated in an arbitration of this dispute. In their filing, Empire claims that Saker failed to pay Empire certain Management Fees in various months throughout the term of the Management Agreement, aggregating approximately $1,050,000 plus $250,000 in accrued interest. Of this amount, approximately $350,000 has been accrued by the Company in 2023 and is included in the Company’s Condensed Consolidated Statement of Operations in selling, general and administrative expenses and the Condensed Consolidated Balance Sheet in accounts payable. Saker has asserted numerous defenses including, but not limited to, Empire waiving its rights to such fees by the parties’ course of conduct. Further, Saker asserted counterclaims against Empire. The Company and Empire will each submit proposed findings to the arbitrator in the next 30 days. We anticipate that the arbitrator will issue his rulings within 30 days of these submissions. Although we believe that Saker has valid defenses and a good chance to prevail on the merits against Empire’s claims, we can give no assurance as to the same.
NOTE 11 - Investments
Accounting principles generally accepted in the United States of America establish a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are described below:
Level 1 - Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access.
Level 2 - Inputs to the valuation methodology include:
●
quoted prices for similar assets or liabilities in active markets;
●
quoted prices for identical or similar assets or liabilities in inactive markets;
●
inputs other than quoted prices that are observable for the asset or liability;
·
inputs that are derived principally from or corroborated by observable market data by correlation or by other means.
Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.
The fair value measurements and levels within the fair value hierarchy of these measurements for the assets reported at fair value on a recurring basis are U.S. Treasury Notes and Bills in the amount of $2,543,321 within level 2.
The Company’s policy is to recognize transfers of investments into or out of Level 3 as of the date of the event or change in circumstances that caused the transfer. For the year ended December 31, 2023 , there were no transfers of investments into or out of Level 3. There are no assets requiring the use of Level 3 inputs for the year ended December 31, 2023.
NOTE 12 - Subsequent Events
The Company has made an assessment of its operations and determined that there were no material subsequent events requiring adjustment to, or disclosure in, our consolidated financial statements for the year ended December 31, 2023.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.

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ITEM 9A. CONTROLS AND PROCEDURES
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, 2023.

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ITEM 9B. OTHER INFORMATION
ITEM 9B.
OTHER INFORMATION
Not Applicable.

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
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, 2023:
Name
Age
Position
William B. Wachtel
Director, Chairman of the Board
Samuel Goldstein (1)
Director, President & CEO
Marc Chodock
Director
Roy Moskowitz
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. Mr. Wachtel was re-elected as our Chairman of the Board and has served in that capacity since October 27, 2011.
Mr. Wachtel has been a managing partner of Wachtel Missry LLP (previously Wachtel & Masyr, LLP, and before that, its predecessor law firm Gold & Wachtel, LLP), since its founding in August 1984. During the twelve months ended December 31, 2023 and 2022, the Company was billed approximately $93,000 and $3,000, respectively, for legal services by Wachtel & Missry, LLP. Mr. Wachtel is a co-founder of the Drum Major Institute, an organization carrying forth the legacy of the late Reverend Martin Luther King, Jr.
We believe that Mr. Wachtel’s experience advising companies regarding legal issues gives him the qualifications and skills to serve on our board of directors..
Samuel Goldstein - Director, President and Chief Executive Officer
Mr. Goldstein was appointed as a director on September 21, 2018 and our President and Chief Executive Officer on July 5, 2022.
Mr. Goldstein had served on the Helicopter Tourism and Jobs Council (“HTJC”) from 2014 through 2019. During this time, HTJC successfully negotiated a settlement with the City of New York enabling the helicopter air tour industry to continue operations. In early 2019, Mr. Goldstein joined Marino, a leading strategic communications firm with offices in New York and Los Angeles, where he was a director with Marino’s Land Use Public Policy unit since 2019, and as Senior Director, Public Policy & External Relations since 2021. Mr. Goldstein left Marino at the end of 2023. Mr. Goldstein was also 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.
We believe Mr. Goldstein’s exposure and outreach skills, developed in part as the previous Deputy Director of HTJC and corresponding knowledge of the local helicopter marketplace, gives him the qualifications and skills to serve on our board of directors.
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 Advisers, 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.
We believe Mr. Chodock's experience in advising companies by serving on boards as well as his knowledge of the aviation industry gives him the qualifications and skills to serve on our board of directors.
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 from 2006 to 2019. 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.
We believe Mr. Moskowitz’ experience analyzing legal issues gives him the qualifications and skills to serve on our board of directors..
Family Relationships
There are no family relationships among our directors and executive 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 and Roy P. Moskowitz, the Nominating Committee comprised of William B. Wachtel and Samuel Goldstein; 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, 2023 and Forms 5 and amendments thereto, furnished to us with respect to the fiscal year ended December 31, 2023, 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.
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.
Audit Committee
The board of directors has an audit committee that is responsible for assisting our board of directors in its oversight of the integrity of our financial statements, the qualifications and independence of our independent auditors, and our internal financial and accounting controls. The audit committee has direct responsibility for the appointment, compensation, retention (including termination) and oversight of our independent auditors, and our independent auditors report directly to the audit committee. The audit committee also prepares the audit committee report that the SEC requires to be included in our annual proxy statement.
The members of the audit committee are Messrs. Roy P. Moskowitz and Marc Chodock. Each member of the audit committee qualifies as an independent director under the corporate governance standards of the Nasdaq Listing Rules. Our board of directors has determined that Marc Chodock qualifies as an “audit committee financial expert” as such term is currently defined in Item 407(d)(5) of Regulation S-K.

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ITEM 11. EXECUTIVE COMPENSATION
ITEM 11.
EXECUTIVE COMPENSATION
As a smaller reporting company under the Exchange Act, we are providing the following executive compensation information in accordance with the scaled disclosure requirements pursuant to Item 402(m)-(q) of Regulation S-K.
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, 2023 and 2022 for services performed on our behalf with respect to the person who served as our executive officers and employees designated as highly compensated during the year ended December 31, 2023 and 2022.
SUMMARY COMPENSATION TABLE
Name and Principal Position
Year
Salary
($)
Bonus
($)
Stock Awards
($)(1)
All Other
Compensation
($)
Total
($)
Samuel Goldstein, President and Chief Executive Officer
50,000
25,331 (2)
22,000
97,331
17.998 (2)
4,500
22,498
(1)
The fair value of the stock awards granted are calculated in accordance with FASB ASC Topic 718.
(2)
Represents the fair value of the option awards granted to Mr. Goldstein for his services as a non-employee director.
(3)
Represents the total non-employee director fees received by Mr. Goldstein.
Mr. Samuel Goldstein became our acting principal executive officer in March 2021. He was appointed as the company’s President, Chief Executive Officer, and principal executive, financial, and accounting officer, on July 5, 2022. In 2023, Mr. Goldstein, received $15,000 in consulting fees and a $50,000 bonus. Mr. Goldstein received no compensation or bonuses in 2022. As a non-employee director, Mr. Goldstein is entitled to a fee of $1,000 per board meeting.
Mr. Goldstein is currently the Company’s sole executive officer.
OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2023
The following table shows information about the number of unexercised stock options held by our named executive officer as of December 31, 2023:
Option Awards (1)
Name
Number of Securities
Underlying
Unexercised Options (#)
Exercisable
Number of Securities Underlying
Unexercised Options (#)
Unexercisable
Option Exercise
Price ($)
Option
Expiration
Date
Samuel Goldstein:
3,333
--
5.60
12/05/2024
3,333
--
2.58
12/01/2025
3,333
--
3.45
12/01/2026
3,333
--
5.40
12/01/2027
---
3,333
7.60
12/01/2029
(1)
All outstanding awards of stock options were granted under our 2019 Stock Incentive Plan
2023 DIRECTOR COMPENSATION TABLE
The table below shows information about the compensation of our non-executive directors except for Samuel Goldstein for their service during fiscal 2023. The Compensation for our non-employee director Samuel Goldstein, who is our President and Chief Executive Officer, is set forth in the Summary Compensation Table above.
Fees
Earned in
Cash
($)(1)
Option
Awards
($)(2)
Total
($)
Name
William B. Wachtel
8,000
25,331
33,331
Marc Chodock
9,250
25,331
34,581
Roy P. Moskowitz
9,500
25,331
34,831
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, 2023, the Board of Directors granted each non-employee director an option for their service in 2023. Each option was for 3,333 shares and was priced at $7.60 per share, which was the closing sales price of our common stock on December 1, 2023. The options vest on December 1, 2024 and may be exercised until December 1, 2028. See Item 12. for a description of all outstanding options held by non-employee directors and employees at December 31, 2023. The fair value of the option awards are calculated in accordance with FASB ASC Topic 718.
Employment Agreements
As of December 31, 2023, the Company has no Employment Agreements in place.
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 $28,000 and $40,000 for the years ended December 31, 2023 and 2022, respectively.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Beneficial Owners
The following table presents certain information as of April 1, 2024 regarding the beneficial ownership of our common stock by:
●
our current executive officer and each of our 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
of Common
Stock
Percentage of
Common Stock
Name of Beneficial Owner
Beneficially
Owned
Beneficially
Owned (1)
William B. Wachtel (2)
189,558 (3)
18.2 %
Samuel Goldstein (4)
15,611 (5)
1.5 %
Marc Chodock (6)
120,513 (7)
11.6 %
Roy P. Moskowitz (8)
15,414 (9)
1.5 %
All directors and officers as a group (4 in number)
341,096
32.8 %
Ronald I. Heller (10)
64,085 (10)
6.5 %
Ravi Desai (11)
73,445 (11)
7.4 %
Eriksen Capital Management, LLC (12)
55,525 (12)
5.3 %
(1)
The percentages computed in the table are based upon 985,888 shares of our common stock, which were outstanding on April 1, 2024. Under the rules of the SEC, “beneficial ownership” is deemed to include shares for which an individual, directly or indirectly, has or shares voting or dispositive power, whether or not they are held for the individual’s benefit, and includes shares that may be acquired within 60 days, including, but not limited to, the right to acquire shares by the exercise of options or the vesting of restricted stock units. Effect is given to shares of our common stock upon the exercise of options currently exercisable or exercisable within 60 days of April 1, 2024, such amount of exercisable options totaling 54,162, We have omitted percentages of less than 1% from the table.
(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) 147,975 shares held by Mr. Wachtel in the open market; (b) 28,251 shares of common stock owned by EuroAmerican Investment Corporation of which he is the sole shareholder, director and officer, (c) 3,333 shares issuable upon the exercise of an option expiring December 1, 2024, which option is currently exercisable; (d) 3,333 shares issuable upon the exercise of an option expiring December 1, 2025, which option is currently exercisable; (e) 3,333 shares issuable upon the exercise of an option expiring December 1, 2026, which option is currently exercisable; and (f) 3,333 shares issuable upon the exercise of an option expiring December 1, 2027, which 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, 2023, which shall become exercisable on December 1, 2024; and (y) 11,114 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) Samuel Goldstein is our President, Chief Executive Officer and a director.
(5)
The shares of our common stock reported in the table include (a) 2,279 shared held by Mr. Goldstein; (b) 3,333 shares issuable upon the exercise of an option expiring December 1, 2024, which option is currently exercisable and (c) 3,333 shares issuable upon the exercise of an option expiring December 1, 2025, which option is currently exercisable and (d) 3,333 shares issuable upon the exercise of an option expiring December 1, 2026, which option is currently exercisable and (d) 3,333 shares issuable upon the exercise of an option expiring December 1, 2027, which 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, 2023, which shall become exercisable on December 1, 2024.
(6) Marc Chodock is a director.
(7)
The shares of our common stock reported in the table are based on a Schedule 13D/A filed with the SEC on December 4, 2023. 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 include: (a) 107,181 shares held by the reporting persons listed above (b) 3,333 shares issuable upon the exercise of an option expiring December 1, 2024, which option is currently exercisable and (c) 3,333 shares issuable upon the exercise of an option expiring December 1, 2025, which option is currently exercisable and (d) 3,333 shares issuable upon the exercise of an option expiring December 1, 2026, which option is currently exercisable and (e) 3,333 shares issuable upon the exercise of an option expiring December 1, 2027, which 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, 2023, which shall become exercisable on December 1, 2028.
(8) Roy P. Moskowitz is a director.
(9)
The shares of our common stock reported in the table include (a) 8,748 shares held by Mr. Moskowitz; (b) 3,333 shares issuable upon the exercise of an option expiring December 1, 2024, which option is currently exercisable; (b) 3,333 shares issuable upon the exercise of an option expiring December 1, 2027, 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, 2023, which shall become exercisable on December 1, 2024.
(10) 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 as disclosed in a 13G filed with the Securities and Exchange Committee on April 10, 2015, after taking into account our 1 for 30 reverse stock split which was effective March 1, 2019. 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.
(11)
Ravi Desai’s address is 14 Walsh Drive, Parsippany, NJ 07054. Mr Desai is the beneficial owner of 73,445 shares of common stock as disclosed in a 13D/A filed with the Securities and Exchange Committee on March 14, 2023.
(12)
E Eriksen Capital Management LLC’s address is 8695 Glendale Road, Custer, WA 98240. Eriksen is the beneficial owner of 55,525 shares, including (i) 49,627 shares held by Cedar Creek Partners LLC, a private investment partnership managed by the reporting person; (ii) 4,810 shares in separately managed accounts managed by Eriksen Capital Management; and (iii) 1,088 shares held by Tim Eriksen, as disclosed in a Schedule 13G filed with the Securities and Exchange Commission on January 10, 2024.
Equity Compensation Plan Information
The following table sets forth certain information, as of December 31, 2023, 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
67,494
$ 5.012
110,840
Equity compensation plans not approved by security holders
--
$ -
-
Total
67,494
$ 5.012
110,840
On August 27, 2019, at the Company’s Annual Meeting, the stockholders of the Company approved the Stock Incentive Plan of 2019 (the “2019 Plan”) at which time the Company’s 2005 Stock Incentive Plan (the “2005 Plan”) was terminated and no future awards could be issued under the 2005 plan. As of December 31, 2022, 9,999 options were outstanding under the terminated 2005 Plan. All of these options were exercised in 2023.
The 2019 Plan is administered by the Company’s Compensation Committee and provides for 185,000 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.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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.
We had no transactions, since the beginning of our last fiscal year, or any currently proposed transaction, in which we were or are to be a participant and the amount involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which any related person had or will have a direct or indirect material interest.
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 and Roy P. Moskowitz qualify as independent.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees. The aggregate fees billed for professional services rendered by the principal accountant were approximately $101,500 by Kronick Kalada Berdy & Co. in both 2023 and 2022 for the audits of our annual financial statements for the fiscal years ended December 31, 2023 and 2022, 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 Audit-Related Fees billed for the years ended December 31, 2023 and December 31, 2022.
Tax Fees. For both years ended December 31, 2023 and 2022, the aggregate fees billed by the principal accountant for services categorized as Tax Fees were $15,000.
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, 2023 and 2022.
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.
Part VI

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
ITEM 15.
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a)
Financial Statements
The consolidated financial statements of Saker Aviation Services, Inc. and subsidiaries as of December 31, 2023 and 2022 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, incorporated by reference from Exhibit 4.1 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019.
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.
10.7# Temporary Use Authorization Agreement by and between FirstFlight Heliports, LLC and the City of New York by and through the New York City of Department of Small Business Services, effective as of May 1, 2023, incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 4, 2023.
10.8# Interim Concession Agreement by and between FirstFlight Heliports, LLC and the City of New York by and through the New York City of Department of Small Business Services, commencing December 13, 2023, incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 19, 2023.
21.1* Subsidiaries of Saker Aviation Services, Inc.
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*
Inline XBRL Instance Document
101.SCH*
Inline XBRL Taxonomy Extension Schema Document
101.CAL*
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*
Inline XBRL Taxonomy Extension Linkbase Document
101.LAB*
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*
Inline XBRL Taxonomy Extension Presentation Linkbase Document
Cover Page Interactive Data File (Formatted as Inline XBRL and contained in Exhibit 101)
*Filed herewith
# Schedules and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company will furnish a copy of any omitted schedule or similar attachment to the Securities and Exchange Commission upon request.
+Management compensation plan or arrangement