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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q
(Mark One)
 
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2011

or

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

For the transition period from _______________ to ________________

Commission File Number: 000-52593

SAKER AVIATION SERVICES, INC.
(Exact name of registrant as specified in its charter)

Nevada
 
87-0617649
(State or other jurisdiction of
 
(I.R.S. Employer
incorporation or organization)
 
Identification No.)
     
101 Hangar Road, Avoca, PA
 
18641
(Address of principal executive offices)
 
(Zip Code)
 
(570) 457-3400

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Yes x         No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes x         No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule
12b-2 of the Exchange Act.
 Large accelerated filer
 ¨
Accelerated filer
 ¨
Non-accelerated filer
 ¨
Smaller Reporting Company
 x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ¨          No x

As of November 14, 2011, the registrant had 33,040,422 shares of its common stock, $0.001 par value, issued and outstanding.

 
i

 
 
SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES
Form 10-Q
September 30, 2011

Index

  Page
   
PART I - FINANCIAL INFORMATION
 
   
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
     
 
Balance Sheets as of September 30, 2011 (unaudited) and December 31, 2010
1
     
 
Statements of Operations for the Three and Nine Months Ended September 30, 2011 and 2010 (unaudited)
2
     
 
Statements of Cash Flows for the Nine months Ended September 30, 2011 and 2010 (unaudited)
3
     
 
Notes to Financial Statements (unaudited)
4
                             
ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  9 
   
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
14
   
ITEM 4.  CONTROLS AND PROCEDURES
14
   
PART II - OTHER INFORMATION
 
   
ITEM 5. OTHER INFORMATION
14
   
ITEM 6. EXHIBITS
14
   
SIGNATURES          
16
 
 
ii

 

SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

   
September 30,
   
December 31,
 
   
2011
   
2010
 
   
(Unaudited)
       
ASSETS
           
             
CURRENT ASSETS
           
Cash
  $ 291,406     $ 1,541,992  
Accounts receivable
    1,736,361       1,360,203  
Inventories
    214,886       207,947  
Note receivable – current portion, less discount
    99,328       94,263  
Prepaid expenses and other current assets
    310,645       352,473  
Deferred income taxes
    294,000       294,000  
Total current assets
    2,946,626       3,850,878  
                 
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $769,710 and $668,260 respectively
    2,473,392       1,918,104  
                 
OTHER ASSETS
               
Deposits
    169,367       444,472  
Note receivable, less current portion and discount
    326,647       401,789  
Intangible assets
    135,000       100,000  
Goodwill
    2,368,284       2,368,284  
Deferred income taxes
    111,369       362,000  
Total other assets
    3,110,667       3,676,545  
TOTAL ASSETS
  $ 8,530,685     $ 9,445,527  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
                 
CURRENT LIABILITIES
               
Accounts payable
  $ 851,019     $ 443,814  
Customer deposits
    186,719       240,415  
Line of credit
    650,000       500,000  
Accrued expenses
    150,784       1,406,475  
Notes payable – current portion
    523,611       248,000  
Total current liabilities
    2,362,133       2,838,704  
                 
LONG-TERM LIABILITIES
               
Notes payable - less current portion
    1,978,511       1,106,475  
Total liabilities
    4,340,644       3,945,179  
                 
STOCKHOLDERS’ EQUITY
               
Controlling interest
               
Preferred stock - $.001 par value; authorized 9,999,154; none issued and outstanding
    —        —   
Common stock - $.001 par value; authorized 100,000,000;
               
33,040,422 and 33,164,453 shares issued and outstanding
as of September 30, 2011 and December 31, 2010, respectively
    33,040       33,164  
Additional paid-in capital
    19,842,293       19,651,434  
Accumulated deficit
    (15,685,292 )     (16,070,005 )
Total controlling interest
    4,190,041       3,614,593  
Non-controlling interest
          1,885,755  
TOTAL STOCKHOLDERS’ EQUITY
    4,190,041       5,500,348  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
  $ 8,530,685     $ 9,445,527  
 

See notes to condensed consolidated financial statements.
 
 
1

 

SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
 
   
For the Three Months Ended
September 30,
   
For the Nine Months Ended
September 30,
 
   
2011
   
2010
   
2011
   
2010
 
                         
REVENUE
  $ 4,643,683     $ 2,922,363     $ 11,993,660     $ 8,453,888  
COST OF REVENUE
    2,775,001       1,311,187       6,648,196       4,055,185  
GROSS PROFIT
    1,868,682       1,611,176       5,345,465       4,398,703  
                                 
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
    1,458,146       1,254,429       4,382,877       3,673,685  
                                 
OPERATING INCOME
    410,536       356,747       962,587       725,018  
                                 
OTHER INCOME (EXPENSE)
                               
OTHER INCOME (EXPENSE), net
    4,332       (2,980 )     20,018       (94,715 )
INTEREST INCOME
    5,642       816       24,455       1,449  
INTEREST EXPENSE
    (39,914 )     (43,177 )     (118,108 )     (131,425 )
TOTAL OTHER INCOME (EXPENSE)
    (29,940 )     (45,341 )     (73,635 )     (224,691 )
                                 
INCOME BEFORE INCOME TAX EXPENSE
    380,596       311,406       888,952       500,327  
                                 
INCOME TAX EXPENSE
    (235,725 )           (504,239 )      
                                 
NET INCOME
  $ 144,871     $ 311,406     $ 384,713     $ 500,327  
                                 
Net income per Common Share – Basic and Diluted
  $ 0.00     $ 0.01     $ 0.01     $ 0.02  
                                 
Weighted Average Number of Common Shares Outstanding – Basic
    33,040,422       33,164,453       33,045,420       33,164,453  
                                 
Weighted Average Number of Common Shares Outstanding – Diluted
    34,844,369       33,164,453       34,849,367       33,164,453  


 See notes to condensed consolidated financial statements.
 
 
2

 

SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 
   
 
Nine Months Ended September 30,
 
   
 
2011
   
2010
 
CASH FLOWS FROM OPERATING ACTIVITIES
       
 
 
Net income  
  $ 384,713     $ 500,327  
   Adjustments to reconcile net income to net cash provided by operating activities:  
               
      Depreciation and amortization  
    259,551       122,787  
      Management fee recorded through additional paid in capital
    745,669       796,887  
      Loss on dispositions of equipment
    2,799        
      Stock based compensation  
    5,247       10,783  
   Changes in operating assets and liabilities:  
               
      Accounts receivable  
    (376,158 )     (471,673 )
      Inventories  
    (6,939 )     27,652  
      Prepaid expenses and other current assets  
    41,828       (64,204 )
      Deposits
    275,105       (26,670 )
      Deferred income taxes
    250,631          
      Accounts payable  
    407,205       (32,816 )
      Customer deposits  
    (53,696 )     9,930  
      Accrued expenses  
    (1,255,691 )     396,402  
      Security deposits
          25,224  
         TOTAL ADJUSTMENTS  
    295,551       (2,585 )
   
               
          NET CASH PROVIDED BY OPERATING ACTIVITIES  
    680,264       497,742  
   
               
CASH FLOWS FROM INVESTING ACTIVITIES
               
   Proceeds from disposition of equipment
    65,247        
   Payment of note receivable
    70,077       86,645  
   Purchase of property and equipment  
    (917,885 )     (893,829 )
      NET CASH USED IN INVESTING ACTIVITIES
    (782,561 )     (807,184 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES
               
   Purchase of common stock, retired
    (11,989 )      
   Line of credit, net
    150,000        
   Redemption of non-controlling interest
    (476,995 )      
   Repayment of notes payable
    (809,305 )     (143,088 )
      NET CASH USED IN FINANCING ACTIVITIES  
    (1,148,289 )     (143,088 )
   
               
NET CHANGE IN CASH  
    (1,250,586 )     344,357  
   
               
CASH – Beginning  
    1,541,992       574,847  
CASH – Ending
  $ 291,406     $ 919,204  
                 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
               
Cash paid during the periods for:
               
        Interest   $   118,108     $   131,425  
                 
 SUPPLEMENTAL DISCLOSURE OF NON-CASH FLOW INFORMATION:                
        Line of credit restructuring   $
 —
    $
500,000
 
        Increase in Notes Payable for the Redemption of non-controlling interest   $
 1,956,952
    $
 —
 
          

 See notes to condensed consolidated financial statements.

 
3

 

NOTE 1 - Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial statements and with the instructions to Quarterly Report on Form 10-Q as promulgated by the Securities and Exchange Commission. Accordingly, they do not include all of the information and disclosures required for annual financial statements. These condensed consolidated financial statements should be read in conjunction with the financial statements and related footnotes for Saker Aviation Services, Inc. and its subsidiaries (collectively, the “Company”), which appear in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 and filed with the Securities and Exchange Commission.

The condensed consolidated balance sheet as of September 30, 2011 and the condensed consolidated statements of operations and cash flows for the three and nine months ended September 30, 2011 and 2010 have been prepared by the Company without audit. In the opinion of the Company’s management, all adjustments (consisting of normal recurring accruals) necessary to make the Company’s financial position as of September 30, 2011 and its results of operations for the three and nine months and cash flows for the nine months ended September 30, 2011 not misleading have been included.  The results of operations for the three and nine months ended September 30, 2011 are not necessarily indicative of the results to be expected for any full year or any other interim period.

NOTE 2 – Management’s Liquidity Plans

As of September 30, 2011, the Company had cash of $291,406 and had a working capital surplus of $584,493. The Company generated revenue of approximately $11,994,000 and net income of approximately $385,000 for the nine months ended September 30, 2011.

On September 21, 2011, the Company entered into an agreement with Bank of America whereby the bank established an equipment line of credit for up to $130,000.  As of May 1, 2012, the principal amount drawn by the company against the line of credit will be converted into a term loan (the “B of A Equipment Loan”).  The B of A Equipment Loan shall be amortized over five years and shall bear interest at a rate equal to the bank’s prime rate plus 1.5 percentage points.

On July 20, 2011, the Company entered into a loan agreement (the “Loan Agreement”) with Bank of America.  The Loan Agreement provides the Company with (i) a revolving line of credit agreement (the “B of A Credit Facility”) in the amount of $650,000, and (ii) a $318,198 term loan facility (the “B of A Term Loan).

The B of A Credit Facility, which was fully extended as of September 30, 2011, requires interest payments based on outstanding balances at an interest rate of 30-day LIBOR plus 300 basis points, and is annually renewable at Bank of America’s option.  An annual fee of 0.50% is incurred against the total availability of the B of A Credit Facility.  The B of A Term Loan is amortized over 48 months at an interest rate of 4.2%.  A one-time origination fee of 1.0% was incurred at the commencement of the B of A Term Loan.

The Company used $500,000 of the proceeds from the B of A Credit Facility to repay the revolving line of credit agreement (the “Prior Credit Facility”) dated March 3, 2009 and made jointly and severally by the Company and Airborne, Inc., a former subsidiary that was divested in March of 2009 (“Airborne”), in favor of Birch Hill Capital, LLC (“Birch Hill”).  The Prior Credit Facility required interest payments based on outstanding balances at an interest rate of prime plus 350 basis points (6.75% as of July 20, 2011) and was payable upon demand by Birch Hill.

The use of proceeds of the B of A Term Loan was the repayment of the remaining principal that resulted when, on May 7, 2010, the Prior Credit Facility was modified to reduce the maximum line of credit to $500,000 and to reclassify the remaining $500,000 into a promissory note that provided for a 36-month amortization with a 24-month balloon payment of outstanding principal and interest at 7% per year.

The Company used $150,000 of the proceeds from the B of A Credit Facility, along with $600,000 in cash on hand, to repay a Loan Agreement with EuroAmerican Investment Corp. (“EuroAmerican”), pursuant to which EuroAmerican loaned the Company an aggregate of $750,000.  The EuroAmerican loan required interest-only payments at a rate of 12%.

As a result of the Company’s repayment of the Prior Credit Facility and EuroAmerican loan, such arrangements have been terminated and Airborne is no longer a co-borrower.  The warrants originally issued to Birch Hill in connection with the Prior Credit Facility remain in place.
 
4

 

The Company is party to a concession agreement with the City of New York for the operation of the Downtown Manhattan Heliport (the “Heliport”).  Under this agreement, the Company must pay the greater of 18% of the first $5 million in program year gross receipts and 25% of gross receipts in excess of $5 million or minimum annual guaranteed payments that began at $1.2 million in Year 1 of the agreement, which commenced on November 1, 2008, and increase to approximately $1.7 million in Year 10 of the agreement, which expires on October 31, 2018.  During the nine months ended September 30, 2011, the Company incurred with the City of New York approximately $1,370,000 in concession fees, which is included in the cost of revenue.  The Company also agreed, pursuant to this agreement, to make certain capital improvements and safety code compliance upgrades to the Heliport in the amount of $1,000,000 within two years following the receipt of building permits for the capital improvements and another $1,000,000 by the end of the fifth year of the Agreement. At September 30, 2011, the Company had made approximately $1,975,000 in capital improvements at the Heliport pursuant to the concession agreement.

On August 29, 2011, the Company entered into a Redemption Agreement with the non-controlling interest in a subsidiary of the Company.  As part of this agreement, the non-controlling interest relinquished its membership interest in the subsidiary in return for earn-out payments of the non-controlling interest’s capital account of $2,769,000. Of that amount, $444,000 was paid upon the execution of the Redemption Agreement and the balance is recorded as a liability at a discount rate of seven (7%) percent.  Continuing earn-out payments shall be paid on monthly basis in an amount equal to (i) five percent (5%) of the subsidiary’s gross receipts plus (ii) five percent (5%) of the subsidiary’s pre-tax profit.  See also Note 5 – Stockholder’s Equity.

NOTE 3 - Summary of Significant Accounting Policies

Principles of Consolidation
The condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, FBO Air Wilkes-Barre, Inc. d/b/a Saker Aviation Services (“FBOWB”), FBO Air Garden City, Inc. d/b/a Saker Aviation Services (“FBOGC”), and FirstFlight Heliports, LLC d/b/a Saker Aviation Services (“FFH”).  All significant inter-company accounts and transactions have been eliminated in consolidation.

Reclassifications
Certain reclassifications were made to the prior period amounts to conform to the current period presentation.  None of the reclassifications affected our net income or loss in any period.

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

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

   
For the Three Months Ended
September 30,
   
For the Nine Months Ended
September 30,
 
    2011*     2010*     2011*     2010*  
Weighted average common shares outstanding, basic
    33,040,422       33,164,453       33,045,420       33,164,453  
Common shares upon exercise of options
    1,803,947             1,803,947        
Weighted average common shares outstanding, diluted
    34,844,369       33,164,453       34,849,367       33,164,453  

* Outstanding stock options and warrants aggregating 900,000 and 8,303,587, respectively, were excluded from the compilation of diluted earnings per share as their exercise prices were greater than the average market price of the common stock for the three and nine months ended September 30, 2011 and 2010, respectively.
 
 
5

 

Stock Based Compensation
Stock-based compensation expense for all stock-based payment awards are based on the 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 the nine months ended September 30, 2011 and 2010, the Company incurred stock-based compensation of $5,247 and $9,219, respectively.  Such amounts have been recorded as part of the Company’s selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.  As of September 30, 2011, the unamortized fair value of the options totaled $11,250.

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.

Recently Issued Accounting Pronouncements
During 2009, the Financial Accounting Standards Board (“FASB”) launched the FASB ASC as the single source of authoritative nongovernmental GAAP.  The ASC was effective for interim and annual periods ending after September 15, 2009.  The ASC does not change GAAP.  Instead, it takes all individual pronouncements that currently comprise GAAP and reorganizes them into approximately 90 accounting Topics, and displays all Topics using a consistent structure.  Changes to the ASC subsequent to September 30, 2009, are referred to as Accounting Standards Updates (“ASU”).

On June 30, 2009, the FASB issued ASU 2009-01, “Topic 105 – Generally Accepted Accounting Principles, amendments based on Statement of Financial Accounting Standards No. 168 – The FASB Accounting Standard Codification and the Hierarchy of Generally Accepted Accounting Principles.”  This ASU amends the FASB ASC for the issuance of FASB Statement of Financial Accounting Standards (“SFAS”) No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles.”  This ASU includes FASB SFAS No. 168 in its entirety.  ASU 2009-01 was effective for interim and annual periods ending after September 15, 2009.  The adoption of ASU 2009-01 had no effect on the operating results or financial condition of the Company.

The FASB issued ASC 810, “Non-Controlling Interests in Consolidated Financial Statements – an amendment of ARB No. 51).  ASC 810 established accounting and reporting standards for the non-controlling interest in a subsidiary (previously referred to as minority interests). ASC 810 also requires that a retained non-controlling interest upon the deconsolidation of a subsidiary be initially measured at its fair value. Upon adoption of ASC 810, the Company was required to report any non-controlling interests as a separate component of consolidated stockholders’ equity. The Company was also required to present any net income or loss allocable to non-controlling interests and net income or loss attributable to the stockholders of the Company separately in its consolidated statements of operations, if significant. ASC 810 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after January 1, 2009. ASC 810 requires retroactive adoption of the presentation and disclosure requirements for existing minority interests. All other requirements of ASC 810 are applied prospectively. The Company adopted ASC 810 and reclassified the non-controlling interest in FFH as a separate component of consolidated stockholders’ equity on January 1, 2009.   The adoption of ASC 810 did not have a material impact on the Company’s results of operation or financial condition.

NOTE 4 - Inventories

Inventories consist primarily of maintenance parts and aviation fuel, which the Company sells to its customers.  The Company also maintains fuel inventories for commercial airlines, to which it charges into-plane fees when servicing commercial aircraft.  A summary of inventories as of September 30, 2011 and December 31, 2010 is set forth in the following table:

   
September 30, 2011
   
December 31, 2010
 
Parts inventory
  $ 103,910     $ 105,675  
Fuel inventory
    100,128       90,969  
Other inventory
    10,848       11,303  
Total inventory
  $ 214,886     $ 207,947  

Included in inventories are amounts held for third parties of $57,137 and $106,547 as of September 30, 2011 and December 31, 2010, respectively, with an offsetting liability included as part of accrued expenses.
 
 
6

 

NOTE 5 - Stockholders’ Equity

Stock Options
Details of all options outstanding are presented in the table below:

   
 
Number of
Options
   
Weighted Average
Exercise Price
 
   
           
Balance, January 1, 2011
    1,525,000     $ 0.22  
Granted
           
Exercised
           
Forfeited
    (250,000 )     (0.50 )
Balance, September 30, 2011
    1,275,000     $ 0.16  
Exercisable at September 30, 2011
    675,000     $ 0.14  

On March 31, 2011, an option for 250,000 shares expired.

Warrants
Details of all warrants outstanding are presented in the table below:

   
 
Number of
Warrants
   
Weighted Average
Exercise Price
 
   
           
Balance, January 1, 2011
    7,325,000     $ 0.80  
Granted
    350,000       0.10  
Exercised
           
Forfeited
    (4,425,000 )     (1.00 )
Balance, September 30, 2011
    3,250,000     $ 0.06  
Exercisable at September 30, 2011
    3,250,000     $ 0.06  

On September 1, 2011, warrants collectively representing 4,425,000 shares expired.

On August 29, 2011, 350,000 warrants were issued in connection with the Company’s consummation of the Redemption Agreement described in Note 2 – Management’s Liquidity Plan.

NOTE 6 – Related Parties

The law firm of Wachtel & Masyr, LLP provides certain legal services to the Company. William B. Wachtel, a member of the Company’s Board of Directors, is a managing partner of this firm. During the nine months ended September 30, 2011 and 2010, the Company was billed approximately $1,000 and $77,300, respectively, for legal services.  At September 30, 2011 and December 31, 2010, the Company has recorded in accounts payable an obligation for legal fees to such firm of approximately $4,200 and $52,000, respectively, related to legal services provided by such firm.

Effective November 2008, the Company executed a management agreement with a company which had a non-controlling interest in a subsidiary of the Company.  The owners of this company include the children of a member of the Company’s Board of Directors.  The agreement requires a management fee of 10% of gross receipts of the subsidiary and a “success fee” of 50% of pre-tax profits; as such term is defined in the management agreement.  Total fees in the nine months ended September 30, 2011 and 2010 aggregated approximately $1,758,000 and $1,300,000, respectively.

On August 29, 2011, the Company entered into a Redemption Agreement with the non-controlling interest in a subsidiary of the Company.  As part of this agreement, the non-controlling interest relinquished its membership interest in the subsidiary in return for earn-out payments of the non-controlling interest’s capital account.  Such earn-out shall be paid on monthly basis in an amount equal to (i) five percent (5%) of the subsidiary’s gross receipts plus (ii) five percent (5%) of the subsidiary’s pre-tax profit.

 
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On August 29, 2011, the Company entered into an Assignment Agreement with William B. Wachtel, a member of the Company’s Board of Directors, in connection with the Redemption Agreement.  Mr. Wachtel provided a cash payment of $444,000 and was assigned the commensurate security interests, previously held by the non-controlling interest, in a security deposit made on behalf of one of the Company’s subsidiaries.  Mr. Wachtel was also issued a warrant as described in Note 5 – Stockholder’s Equity.

NOTE 7 - Litigation

From time to time, the Company may be a party to one or more claims or disputes which may result in litigation. The Company's management does not, however, presently expect that any such matters will have a material adverse effect on the Company's business, financial condition or results of operations.
 
 
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Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read together with the consolidated condensed financial statements and related notes appearing elsewhere in this report. This Item 2 contains forward-looking statements that involve risks and uncertainties. Undue reliance should not be placed on these forward-looking statements, which speak only as of the date of this report. Actual results may differ materially from those included in such forward-looking statements. Factors which could cause actual results to differ materially include those set forth at the end of this Item 2 under the heading "Cautionary Statement Regarding Forward Looking Statements," as well as those discussed elsewhere in this report and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010, as filed with the Securities and Exchange Commission.

OVERVIEW

Saker Aviation Services, Inc. (“we”, “us”, “our”) is a Nevada corporation, the common stock, $0.001 par value (the “common stock”), of which is publicly traded on the over the counter bulletin board system under the symbol “SKAS.OB”.  Through our subsidiaries, we operate in the fixed base operation (“FBO”) segment of the general aviation industry, in which we serve as the operator of a heliport FBO, two primarily fixed-wing aircraft FBOs and provide consulting services for a non-owned FBO facility.  FBOs provide ground-based services such as fueling and hangaring for general aviation, commercial, and military aircraft; aircraft maintenance; and other miscellaneous services.

We were formed on January 17, 2003 (date of inception) 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 which changed its name to FBO Air, Inc.  On December 13, 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 at the Wilkes-Barre/Scranton (Pennsylvania) International Airport, the Garden City (Kansas) Regional Airport, the Downtown Manhattan (New York) Heliport, and at Niagara Falls (New York) International Airport where we provide consulting services to the operator.

The FBO segment of the industry is highly fragmented and is populated by, according to the National Air Transportation Association (“NATA”), over 3,000 operators who serve customers at one or more of the over 3,000 airport facilities across the country that have at least one paved 3,000-foot runway. The vast majority of these companies are single location operators. NATA characterizes companies with operations at three or more airports as “chains.” An operation with FBOs in at least two distinctive regions of the United States is considered a “national” chain while multiple locations within a single region are “regional” chains.

REVENUE AND OPERATING RESULTS

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

Comparison of the Three and Nine months ended September 30, 2011 and September 30, 2010.

REVENUE

Revenue increased by 58.9 percent to approximately $4,644,0000 for the three months ended September 30, 2011 as compared with corresponding prior-year period revenue of approximately $2,922,000.  For the nine months ended September 30, 2011, revenue increased by 41.9 percent to approximately $11,994,000 as compared with revenue of approximately $8,454,000 in the same period in the prior year.

For the three months ended September 30, 2011, revenue associated with the operation of the Downtown Manhattan Heliport (“Heliport”) increased by 71.7 percent to approximately $2,739,000 as compared to approximately $1,596,000 in the prior year period.  Revenue associated with the sale of jet fuel, aviation gasoline and related items increased by 48.7 percent to approximately $1,786,000 as compared to the same period in the prior year.  Revenue associated with maintenance activities decreased by 1.9 percent to approximately $109,000 as compared to the same period in the prior year.  Revenue associated with the leasing of aircraft and office space along with the management of non-owned FBO facilities decreased by 34.4 percent to approximately $9,800 in the three months ended September 30, 2011 as compared to the same period in the prior year.
 
 
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For the nine months ended September 30, 2011, revenue associated with the operation of the Heliport increased 56.3 percent to approximately $6,871,000 as compared to the same period in the prior year.  Revenue associated with the sale of jet fuel, aviation gasoline and related items increased by 29.0 percent to approximately $4,689,000 as compared to the same period in the prior year.  Revenue associated with maintenance activities increased by 0.7 percent to approximately $379,000 as compared to the same period in the prior year.  Revenue associated with the leasing of aircraft and office space along with the management of non-owned FBO facilities increased by 11.7 percent to approximately $55,000 in the nine months ended September 30, 2011 as compared to the same period in the prior year.

The increase in revenue associated with the operation of the Heliport was primarily related to the introduction of fuel services, which commenced in September 2010.  Fuel revenue at the Heliport was approximately $833,000 and $1,973,000 for the three months and nine months ended September 30, 2011, respectively, as compared to approximately $33,000 in the three and nine months ended September 30, 2010.

The increases in revenue associated with the sale of jet fuel, aviation gasoline and related items were related to a combination of comparable volume along with higher average fuel prices as compared with the prior year.  We generally price our fuel products on a fixed dollar margin basis.  As the cost of fuel increases, the corresponding customer price increases as well.  If volume is constant, this methodology yields higher revenue but at comparable gross profit.

The changes in maintenance revenue were due to differing levels of both charges for labor services and for parts as compared to each respective period in the prior year.  The primary reason for the decreases in the three month period ending September 30, 2011, was a generally lower level of activity associated with jet aircraft domiciled at the Pennsylvania facility.

The increases in revenue associated with the leasing of aircraft and office space along with the management on non-owned FBO facilities was primarily related to a one-time project executed on behalf of our non-owned FBO consulting client.

GROSS PROFIT

Total gross profit increased 16.0 percent to approximately $1,869,000 in the three months ended September 30, 2011 as compared with approximately $1,611,000 in the three months ended September 30, 2010.  Gross margin decreased to 40.2 percent in the three months ended September 30, 2011 as compared to 55.1 percent in the same period in the prior year.  The impact of fuel services at the Heliport operation was a major factor in both the increase in gross profit and on the decrease in gross margin.  Heliport fuel service gross margin was lower than the remaining Heliport gross margin and, therefore, had a negative effect on overall gross margin.

Total gross profit increased 21.5 percent to approximately $5,346,000 in the nine months ended September 30, 2011 as compared with approximately $4,399,000 in the nine months ended September 30, 2010.  Gross margin decreased to 44.6 percent in the nine months ended September 30, 2011 as compared to 52.0 percent in the same period in the prior year.  The impact of fuel services at the Heliport operation was a major factor in both the increase in gross profit and on the decrease in gross margin.  Heliport fuel service gross margin was lower than the remaining Heliport gross margin and, therefore, had a negative effect on overall gross margin.

OPERATING EXPENSE

Selling, General and Administrative

Total selling, general and administrative (“SG&A”) expenses were approximately $1,458,000 in the three months ended September 30, 2011, an increase of approximately $203,700 or 16.2 percent as compared to the same period in 2010.

SG&A associated with our FBO operations were approximately $1,399,000 in the three months ended September 30, 2011, an increase of approximately $181,000 or 14.8 percent as compared to the three months ended September 30, 2010.  SG&A increased at the Heliport as a result of the fuel services during the three months ended September 30, 2011 as compared to minimal comparable activity in the same period during the prior year.  SG&A associated with our FBO operations, as a percentage of revenue, was 30.1 percent for the three months ended September 30, 2011 as compared with 41.7 percent in the corresponding prior year period.

Corporate SG&A was approximately $59,000 for the three months ended September 30, 2011, representing a decrease of approximately $23,000 as compared with the corresponding prior year period.   The decrease in the three months ended September 30, 2011, was driven largely by the elimination of certain litigation-related settlement fees and expenses as compared to the prior year period.

For the nine months ended September 30, 2011, total SG&A expenses were approximately $4,383,000, an increase of approximately $709,000 or 19.3 percent as compared to the same period in 2010.

 
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SG&A associated with our FBO operations were approximately $4,203,000, an increase of approximately $725,000 or 20.8 percent as compared to the nine months ended September 30, 2010.  SG&A increased at the Heliport as a result of the fuel services during the three months ended September 30, 2011 as compared to minimal comparable activity in the same period during the prior year.  For the nine months ended September 30, 2011, SG&A associated with our FBO operations, as a percentage of revenue, was 35.0 percent as compared with 41.1 percent in the corresponding prior year period.

Corporate SG&A was approximately $180,000 for the nine months ended September 30, 2011, representing a decrease of approximately $15,000 as compared with the corresponding prior year period.   The decrease in the nine months ended September 30, 2011, was driven largely by the elimination of certain litigation-related settlement fees and expenses as compared to the prior period.

OPERATING INCOME

Operating income in the three and nine months ended September 30, 2011 was approximately $410,000 and $963,000, respectively, as compared to operating income of approximately $356,000 and $725,000 in the same periods in 2010.  Improvements to operating income were driven by a combination of greater levels of levels of revenue and gross profit, which counterbalanced higher non-corporate operating expenses, as described above.

Depreciation and Amortization

Depreciation and amortization was approximately $260,000 and $123,000 for the nine months ended September 30, 2011 and 2010, respectively.  The increase was largely attributed to the depreciation recorded in connection with the capital improvement program at the Heliport as described in Note 2 to the Condensed Consolidated Financial Statements included in Part 1, Item 1 of the report.

Interest Income/Expense

Interest income for the three and nine months ended September 30, 2011 was approximately $5,600 and $24,500, respectively, as compared to $800 and $1,400 in three and nine months ended September 30, 2010, respectively.  Interest expense for the three and nine months ended September 30, 2011 was approximately $40,000 and $118,000, respectively, as compared to approximately $43,000 and $131,000, respectively, in the same periods in 2010.

Other Income
Other income for the three and nine months ended September 30, 2011 was approximately $4,300 and $20,000, respectively and is attributed largely to the forgiveness of debt associated with a financing agreement in connection with an acquisition made in 2009.

Income Tax
Income tax expense for the three and nine months ended September 30, 2011 was approximately $236,000 and $504,000, respectively.  Included in these amounts are paid actual or estimated federal, state, and local income taxes along with a charge for deferred income tax at our estimated blended effective tax rate of 39 percent.  Paid actual or estimated taxes were approximately $161,000 and $253,000 and deferred income taxes were approximately were $86,000 and $262,000 for the three and nine months ended September 30, 2011.

Net Income Per Share
 
Net income for the three and nine months ended September 30, 2011 was approximately $145,000 and $385,000, respectively, as compared to net income of approximately $311,000 and $500,000 for the three and nine months ended September 30, 2010, respectively.  The decreases are related to charges for income tax expense of approximately $236,000 and $504,000 in the three and nine months ended September 30, 2011, respectively, as compared to $0 and approximately $89,000 in the three and nine months ended September 30, 2010.
 
Basic and diluted net income per share for the three and nine months ended September 30, 2011 was $0.00 and $0.01, respectively.  Basic and diluted net income per share for the three and nine months ended September 30, 2010 was $0.01 and $0.02, respectively.
 
 
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LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2011, we had cash of $291,406 and a working capital surplus of $584,493. We generated revenue of approximately $11,994,000 and net income of approximately $385,000 for the nine months ended September 30, 2011.  For the nine months ended September 30, 2011, cash flows included net cash provided by operating activities of $680,264, net cash used in investing activities of $782,561, and net cash used in financing activities of $1,148,289.

On September 21, 2011, we entered into an agreement with Bank of America whereby the bank established an equipment line of credit for up to $130,000.  As of May 1, 2012, the principal amount drawn against the line of credit will be converted into a term loan (the “B of A Equipment Loan”).  The B of A Equipment Loan shall be amortized over five years and shall bear interest at a rate equal to the bank’s prime rate plus 1.5 percentage points.

On July 20, 2011, we entered into a loan agreement (the “Loan Agreement”) with Bank of America.  The Loan Agreement provides us with (i) a revolving line of credit agreement (the “B of A Credit Facility”) in the amount of $650,000, and (ii) a $318,198 term loan facility (the “B of A Term Loan).

The B of A Credit Facility, which was fully extended at the filing of this report, requires interest payments based on outstanding balances at an interest rate of 30-day LIBOR plus 300 basis points, and is annually renewable at Bank of America’s option.  An annual fee of 0.50% is incurred against the total availability of the B of A Credit Facility.  The B of A Term Loan is amortized over 48 months at an interest rate of 4.2%.  A one-time origination fee of 1.0% was incurred at the commencement of the B of A Term Loan.

We used $500,000 of the proceeds from the B of A Credit Facility to repay the revolving line of credit agreement (the “Prior Credit Facility”) dated March 3, 2009 and made jointly and severally by us and Airborne, Inc., a former subsidiary that was divested in March of 2009 (“Airborne”), in favor of Birch Hill Capital, LLC (“Birch Hill”).  The Prior Credit Facility required interest payments based on outstanding balances at an interest rate of prime plus 350 basis points (6.75% as of July 20, 2011) and was payable upon demand by Birch Hill.

The use of proceeds of the B of A Term Loan was the repayment of the remaining principal that resulted when, on May 7, 2010, the Prior Credit Facility was modified to reduce the maximum line of credit to $500,000 and to reclassify the remaining $500,000 into a promissory note that provided for a 36-month amortization with a 24-month balloon payment of outstanding principal and interest at 7% per year.

We used $150,000 of the proceeds from the B of A Credit Facility, along with $600,000 in cash on hand, to repay a Loan Agreement with EuroAmerican Investment Corp. (“EuroAmerican”), pursuant to which EuroAmerican loaned the Company an aggregate of $750,000. The EuroAmerican loan required interest-only payments at a rate of 12%.

As a result of our repayment of the Prior Credit Facility and EuroAmerican loan, such arrangements have been terminated and Airborne is no longer a co-borrower.  The warrants originally issued to Birch Hill in connection with the Prior Credit Facility remain in place.

We are party to a concession agreement with the City of New York for the operation of the Downtown Manhattan Heliport (the “Heliport”).  Under the concession agreement, we must pay the greater of 18% of the first $5 million in program year gross receipts and 25% of gross receipts in excess of $5 million or minimum annual guaranteed payments that began at $1.2 million in Year 1 of the agreement, which commenced on November 1, 2008, and increase to approximately $1.7 million in Year 10 of the agreement, which expires on October 31, 2018.  During the nine months ended September 30, 2011, we incurred with the City of New York approximately $1,370,000 in concession fees, which is included in the cost of revenue.  We also agreed, pursuant to this agreement, to make certain capital improvements and safety code compliance upgrades to the Heliport in the amount of $1,000,000 within two years following the receipt of building permits for the capital improvements and another $1,000,000 by the end of the fifth year of the Agreement. At September 30, 2011, we had made approximately $1,975,000 in capital improvements at the Heliport pursuant to the concession agreement.

On August 29, 2011, we entered into a Redemption Agreement with the non-controlling interest in one of our subsidiaries.  As part of this agreement, the non-controlling interest relinquished its membership interest in the subsidiary in return for earn-out payments of the non-controlling interest’s capital account.  Such earn-out shall be paid on monthly basis in an amount equal to (i) five percent (5%) of the subsidiary’s gross receipts plus (ii) five percent (5%) of the subsidiary’s pre-tax profit.
 
 
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Cash from Operating Activities
 
For the nine months ended September 30, 2011, net cash provided by operating activities was $680,264. This amount included an increase in operating cash related to net income of $384,713 and additions for the following items: (i) depreciation and amortization, $259,551; (ii) management fees recorded through additional paid in capital, $745,669; (iii) stock-based compensation expense, $5,247; (iv) accounts payable, $407,205; (v) deposits, $275,105; (vi) deferred income taxes, $250,631; (vii) prepaid expenses, $41,828; and (viii) loss on disposition of equipment, $2,799.  The increase in cash used in operating activities in 2011 was offset by the following decreases: (i) accounts receivable, $376,158; (ii) inventories, $6,939; (iii) customer deposits, $53,696; and (v) accrued expenses, $1,255,691.  For the nine months ended September 30, 2010, net cash provided by operating activities was $497,742. This amount included an increase in operating cash related to net income of $500,327 and additions for the following items: (i) depreciation and amortization, $122,787; (ii) stock-based compensation expense, $10,783; (iii) inventories, $27,652; (iv) customer deposits, $9,930; (v) accrued expenses, $396,402; (vi) security deposits, $25,224; and (vii) management fees recorded through additional paid in capital, $796,887.  The increase in cash used in operating activities in 2010 was offset by the following decreases: (i) accounts receivable, $471,673; (ii) prepaid expenses, $64,204; (iii) accounts payable, $32,816; and (iv) deposits, $26,670.

Cash from Investing Activities
 
For the nine months ended September 30, 2011, net cash used in investing activities was $782,561 and was attributable to the purchase of property and equipment, $917,885 offset by the payment of notes receivable of $70,077; and (iv) proceeds from the disposition of equipment of $65,247.  For the nine months ended September 30, 2010, net cash used in investing activities was $807,184 and was attributable to the purchase of property and equipment of $893,829, principally capital expenditures associated with the Heliport, offset by the payment of notes receivable of $86,645.

Cash from Financing Activities
 
For the nine months ended September 30, 2011, net cash used in financing activities was $1,148,289, consisting of (i) the redemption of non-controlling interest, $476,995; (ii) the repayment of notes payable, $809,305; offset by (iii) line of credit, net, $150,000; and (iv) purchase of common stock, retired, $11,989.  For the nine months ended September 30, 2010, net cash provided by financing activities was $143,088, consisting of the payment of notes payable.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Recent Accounting Pronouncements

During 2009, the FASB launched the FASB ASC as the single source of authoritative nongovernmental GAAP.  The ASC was effective for interim and annual periods ending September 15, 2009.  The ASC does not change GAAP.  Instead, it takes all individual pronouncements that currently comprise GAAP and reorganizes them into approximately 90 accounting Topics, and displays all Topics using a consistent structure.  Changes to the ASC subsequent to September 30, 2009, are referred to as Accounting Standards Updates (“ASUs”).

On June 30, 2009, the FASB issued ASU 2009-01, “Topic 105 – Generally Accepted Accounting Principles, amendments based on Statement of Financial Accounting Standards No. 168 – The FASB Accounting Standard Codification and the Hierarchy of Generally Accepted Accounting Principles.”  This ASU amends the FASB ASC for the issuance of FASB Statement of Financial Accounting Standards (SFAS”) No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles.”  This ASU includes FASB SFAS No. 168 in its entirety.  ASU 2009-01 was effective for interim and annual periods ending after September 15, 2009.  The adoption of ASU 2009-01 had no effect on our operating results or financial condition.

The FASB issued ASC 810, “Non-Controlling Interests in Consolidated Financial Statements – an amendment of ARB No. 51).  ASC 810 established accounting and reporting standards for the non-controlling interest in a subsidiary (previously referred to as minority interests). ASC 810 also requires that a retained non-controlling interest upon the deconsolidation of a subsidiary be initially measured at its fair value. Upon adoption of ASC 810, we were required to report any non-controlling interests as a separate component of consolidated stockholders’ equity. We were also required to present any net income or loss allocable to non-controlling interests and net income or loss attributable to our stockholders separately in its consolidated statements of operations, if significant. ASC 810 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after January 1, 2009. ASC 810 requires retroactive adoption of the presentation and disclosure requirements for existing minority interests. All other requirements of ASC 810 are applied prospectively. We adopted ASC 810 and reclassified the non-controlling interest in our Heliport subsidiary as a separate component of consolidated stockholders’ equity on January 1, 2009.   The adoption of ASC 810 did not have a material impact on our results of operation or financial condition.

CAUTIONARY STATEMENT FOR FORWARD-LOOKING STATEMENTS

Statements contained in this report may contain information that includes or is based upon "forward-looking statements" relating to our business. These forward-looking statements represent management's current judgment and assumptions, and can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements are frequently accompanied by the use of such words as "anticipates," "plans," "believes," "expects," "projects," "intends," and similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors, including, but not limited to, those relating to:

 
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·
our ability to secure additional debt or equity financing, if required, to execute our business plan;

 
·
our ability to identify, negotiate and complete the acquisition of targeted operators, consistent with our business plan;

 
·
existing or new competitors consolidating operators ahead of us;

 
·
our ability to attract new personnel or retain existing personnel, which would adversely affect implementation of our overall business strategy.

Any one of these or other risks, uncertainties, other factors, or any inaccurate assumptions may cause actual results to be materially different from those described herein or elsewhere by us. Undue reliance should not be replaced on any such forward-looking statements, which speak only as of the date they were made. Certain of these risks, uncertainties, and other factors are described in greater detail in our Annual Report on Form 10-K for the year ended December 31, 2010 under the heading “Risk Factors” and in other filings we make with the Securities and Exchange Commission. Subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above and elsewhere in our reports filed with the Securities and Exchange Commission. We expressly disclaim any intent or obligation to update any forward-looking statements.

Item 3 – Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

Item 4 – Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Management, including our President, Chief Executive Officer and principal financial officer (the same executive is both our principal executive officer and principal financial officer), has evaluated 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 Quarterly Report on Form 10-Q.  Based on this evaluation, our President and Chief Executive concluded that our disclosure controls and procedures were effective as of such date.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting that occurred during the fiscal quarter covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 5 – Other Information

On August 29, 2011, we entered into a Redemption Agreement with the non-controlling interest in one of our subsidiaries.  As part of this agreement, the non-controlling interest relinquished its membership interest in the subsidiary in return for earn-out payments of the non-controlling interest’s capital account.  Such earn-out shall be paid on monthly basis in an amount equal to (i) five percent (5%) of the subsidiary’s gross receipts plus (ii) five percent (5%) of the subsidiary’s pre-tax profit.
 
 
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Item 6 - Exhibits

Exhibit No.
 
Description of Exhibit
     
10.1
 
Bank of America Loan Agreement covering $650,000 Line of Credit and $318,198 Term Loan
     
10.2
 
Bank of America Equipment Line of Credit/Term Loan Agreement
     
10.3
 
Empire Aviation Redemption Agreement
     
10.4
 
Wachtel Assignment Agreement
     
31.1
 
Rule 13a-14(a)/15d-14(a) Certification of President and Chief Executive Officer (principal executive and principal financial officer). *
     
32.1
 
Section 1350 Certification. *
     
** 101.INS
 
 XBRL Instance Document
     
** 101.SCH
 
  XBRL Taxonomy Extension Schema Document
     
** 101.CAL
 
  XBRL Taxonomy Extension Calculation Linkbase Document
     
** 101.DEF
 
  XBRL Taxonomy Extension Definition Linkbase Document
     
** 101.LAB
 
  XBRL Taxonomy Extension Label Linkbase Document
     
** 101.PRE
 
  XBRL Taxonomy Extension Presentation Linkbase Document
 
  * Filed herewith
     
 
**
Pursuant to Rule 406T of Regulation S-T, the information in this exhibit shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement, prospectus or other document filed under the Securities Act of 1933, or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference in such filings.
 
 
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SIGNATURES
 
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
Saker Aviation Services, Inc.
     
Date:  November 14, 2011
By:  
/s/ Ronald J. Ricciardi
 
Ronald J. Ricciardi,
 
President & Chief Executive Officer
 
(principal financial officer)
 
 
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