Quarterly Report (10-q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For The Quarterly Period Ended March 31, 2015

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

For the transition period from _______________ to ________________

Commission File Number: 000-52593

SAKER AVIATION SERVICES, INC.

(Exact Name of Registrant as Specified in Its Charter)

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

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

(212) 776-4046

(Registrant’s telephone number, including area code)

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

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 May 15, 2015, the registrant had 33,107,610 shares of its common stock, $0.001 par value, issued and outstanding.

SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES

Form 10-Q

March 31, 2015

Index

			Page

PART I - FINANCIAL INFORMATION

	ITEM 1.	CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

		Balance Sheets as of March 31, 2015 (unaudited) and December 31, 2014	1

		Statements of Operations for the Three Months Ended March 31, 2015 and 2014 (unaudited)	2

		Statements of Cash Flows for the Three Months Ended March 31, 2015 and 2014 (unaudited)	3

		Notes to Financial Statements (unaudited)	4

	ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	7

	ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	11

	ITEM 4.	CONTROLS AND PROCEDURES	11

PART II - OTHER INFORMATION

	ITEM 6.	EXHIBITS	12

SIGNATURES			13

SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31, 2015			December 31, 2014
	(unaudited)
ASSETS
CURRENT ASSETS
Cash	$	460,245		$	531,003
Accounts receivable		1,457,978			2,049,842
Inventories		283,939			299,339
Prepaid expenses and other current assets		286,952			524,942
Total current assets		2,489,114			3,405,126

PROPERTY AND EQUIPMENT, net of accumulated depreciation and amortization of $1,855,253 and $1,711,543 respectively		1,957,332			2,086,794

OTHER ASSETS
Deposits		178,524			178,524
Intangible assets		135,000			142,500
Goodwill		530,000			530,000
Deferred income taxes		363,000			363,000
Total other assets		1,206,524			1,214,024
TOTAL ASSETS	$	5,652,970		$	6,705,944

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable	$	488,767		$	996,431
Line of credit		550,000			550,000
Customer deposits		129,014			134,761
Accrued expenses		187,930			505,070
Notes payable – current portion		370,880			372,457
Total current liabilities		1,726,591			2,558,719

LONG-TERM LIABILITIES
Notes payable - less current portion		864,225			956,979
Deferred income taxes		—			—
Total liabilities		2,590,816			3,515,698

STOCKHOLDERS’ EQUITY
Preferred stock - $.001 par value; authorized 9,999,154; none issued and outstanding		—			—
Common stock - $.001 par value; authorized 100,000,000; 33,107,610 shares issued and outstanding as of March 31, 2015 and December 31, 2014		33,107			33,107
Additional paid-in capital		19,970,982			19,962,482
Accumulated deficit		(16,941,935	)		(16,805,343	)
TOTAL STOCKHOLDERS’ EQUITY		3,062,154			3,190,246
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	5,652,970		$	6,705,944

See notes to condensed consolidated financial statements.

SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the Three Months Ended March 31,
	2015			2014

REVENUE	$	2,710,142		$	3,045,439

COST OF REVENUE		1,493,724			1,791,234

GROSS PROFIT		1,216,418			1,254,205

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		1,338,714			1,212,695

OPERATING (LOSS) INCOME FROM OPERATIONS		(122,296	)		41,510

OTHER (EXPENSE) INCOME:
OTHER (EXPENSE) INCOME, net		(290	)		6,195
INTEREST INCOME		—			3,201
INTEREST EXPENSE		(14,006	)		(25,037	)

TOTAL OTHER EXPENSE, net		(14,296	)		(15,641	)

(LOSS) INCOME FROM OPERATIONS, before income taxes		(136,592	)		25,869

INCOME TAX EXPENSE
CURRENT		—			5,000
DEFERRED		—			9,000

INCOME TAX EXPENSE		—			14,000

NET (LOSS) INCOME	$	(136,592	)	$	11,869

Basic and Diluted Net (Loss) Income Per Common Share	$	(0.00	)	$	0.00

Weighted Average Number of Common Shares – Basic		33,107,610			33,104,277

Weighted Average Number of Common Shares – Diluted		33,858,518			34,904,380

See notes to condensed consolidated financial statements.

SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Three Months Ended March 31,
	2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income	$	(136,592	)	$	11,869
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		151,210			130,820
Stock based compensation		8,500			7,689
Changes in operating assets and liabilities:
Accounts receivable, trade		591,864			252,569
Inventories		15,400			15,488
Prepaid expenses and other current assets		237,990			(272,469	)
Deposits		—			1,500
Deferred income taxes		—			9,000
Accounts payable		(507,664	)		(70,714	)
Customer deposits		(5,747	)		33,210
Accrued expenses		(317,140	)		(151,346	)
TOTAL ADJUSTMENTS		174,413			(44,453	)

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		37,821			(32,384	)

CASH FLOWS FROM INVESTING ACTIVITIES
Payment of note receivable		—			28,299
Purchase of property and equipment		(14,248	)		(19,078	)
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES		(14,248	)		9,221

CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of notes payable		(94,331	)		(153,778	)
Proceeds from line of credit		—			125,000
NET CASH USED IN FINANCING ACTIVITIES		(94,331	)		(28,778	)

NET CHANGE IN CASH		(70,758	)		(51,941	)

CASH – Beginning		531,003			146,405
CASH – Ending	$	460,245		$	94,464

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the periods for:
Interest	$	14,006		$	25,037

See notes to condensed consolidated financial statements.

SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 - Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Saker Aviation Services, Inc. (the “Company”) and its subsidiaries have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial statements and in accordance with the instructions to Form 10-Q. Accordingly, they do not include all of the information and disclosures required by GAAP for annual financial statements and should be read in conjunction with the financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

The condensed consolidated balance sheet as of March 31, 2015 and the condensed consolidated statements of operations and cash flows for the three months ended March 31, 2015 and 2014 have been prepared by the Company without audit. In the opinion of the Company’s management, all necessary adjustments (consisting of normal recurring accruals) have been included to make the Company’s financial position as of March 31, 2015 and its results of operations and cash flows for the three months ended March 31, 2015 not misleading. The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the results to be expected for any full year or any other interim period.

The Company has evaluated events which have occurred subsequent to March 31, 2015, and through the date of the filing of this Quarterly Report on Form 10-Q with the SEC, and has determined that no subsequent events have occurred after the current reporting period.

NOTE 2 – Liquidity

As of March 31, 2015, the Company had cash of $460,245 and had a working capital surplus of $762,523. The Company generated revenue of $2,710,142 and net losses of $136,592 for the three months ended March 31, 2015.

On May 17, 2013, the Company entered into a loan agreement with PNC Bank (the “PNC Loan Agreement”). The PNC Loan Agreement contained three components: (i) a $2,500,000 non-revolving acquisition line of credit (the “PNC Acquisition Line”); (ii) a $1,150,000 working capital line (the “PNC Working Capital Line”); and (iii) a $280,920 term loan (the “PNC Term Loan”). Substantially all assets of the Company are pledged as collateral under the PNC Loan Agreement.

Proceeds of the PNC Acquisition Line were able to be dispersed, based on parameters defined in the PNC Loan Agreement, until May 17, 2014 (the “Conversion Date”). As of the Conversion Date, there was $1,350,000 outstanding under the PNC Acquisition Line. The payment terms provide that 30 days following the Conversion Date, and continuing on the same day of each month thereafter, the Company is required to make equal payments of principal over a 60 month period. Interest on the outstanding principal continues to accrue at a rate equal to one-month LIBOR plus 275 basis points (2.93% as of March 31, 2015). As of March 31, 2015, the outstanding balance of the PNC Acquisition Line was $1,125,000.

The PNC Working Capital Line may be dispersed for working capital and general corporate purposes. Interest on outstanding principal accrues at a rate equal to daily LIBOR plus 250 basis points (2.68 % as of March 31, 2015) and the PNC Working Capital Line is annually renewable at PNC Bank’s option. As of March 31, 2015, the outstanding balance of the PNC Working Capital Line was $550,000.

The PNC Term Loan was dispersed to settle miscellaneous Company debt of the same amount. Interest on outstanding principal accrues at a rate equal to one-month LIBOR plus 275 basis points (2.93% as of March 31, 2015) with principal and interest payments shall be made over a 34 month period. At March 31, 2015, $104,342 was outstanding.

The Company is party to a concession agreement, dated as of November 1, 2008, with the City of New York for the operation of the Downtown Manhattan Heliport (the “Concession Agreement”). Pursuant to the terms of the Concession Agreement, the Company must pay the greater of 18% of the first $5,000,000 in program year gross receipts and 25% of gross receipts in excess of $5 million or minimum annual guaranteed payments. The Company paid the City of New York $1,200,000 in the first year of the term and minimum payments are scheduled to increase to approximately $1,700,000 in the final year of Concession Agreement, which expires on October 31, 2018. During the three months ended March 31, 2015 and 2014, the Company incurred approximately $403,000 and $334,000 in concession fees, respectively, which is recorded in the cost of revenue.

SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 3 - Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and our wholly-owned subsidiaries, FirstFlight Heliports, LLC (“FFH”), our FBO at Garden City (Kansas) Regional Airport (“FBOGC”) and Phoenix Rising Aviation, Inc. (“PRA”). All significant inter-company accounts and transactions have been eliminated in consolidation.

Net Income Per Common Share

Net (loss)/income was $(136,592) and $11,869 for the three months ended March 31, 2015 and 2014, respectively. 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 net income per share:

	For the Three Months Ended March 31,
	2015		2014(1)
Weighted average common shares outstanding, basic		33,107,610		33,104,277
Common shares upon exercise of options		711,187		430,381
Common shares upon exercise of warrants		39,721		1,369,723
Weighted average common shares outstanding, diluted		33,858,518		34,904,380

(1) Potential common shares of 750,000 for the three months ended March 31, 2014 were excluded from the computation of diluted earnings as their exercise prices were greater than the average market price of the common stock during the period.

Stock Based Compensation

Stock-based compensation expense for all share-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 three months ended March 31, 2015 and 2014, the Company incurred stock-based compensation costs of $8,500 and $7,689 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 March 31, 2015, the unamortized fair value of the options totaled $12,750.

Option valuation models require the input of highly subjective assumptions, including the expected life of the option. In management's opinion, the use of such option valuation models does not necessarily provide a reliable single measure of the fair value of the Company’s employee stock options. Management holds this view partly because the Company's employee stock options have characteristics significantly different from those of traded options and also because changes in the subjective input assumptions can materially affect the fair value estimate.

Recently Issued Accounting Pronouncements

In April 2014, the FASB issued Accounting Standards Update No. 2014-08 “Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360) – Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity” (ASU 2014-08) which requires entities to change the criteria for reporting discontinued operations and enhance convergence of the FASB’s and International Accounting Standard Board’s (IASB) reporting requirements for discontinued operations so as not to be overly complex or difficult to apply to stakeholders. Only those disposals of components of an entity that represent a strategic shift that has (or will have) a major effect on the entity’s operations and financial results will be reported as discontinued operations in the financial statements. ASU 2014-08 is effective for fiscal years beginning on or after December 15, 2014 and interim periods thereafter. ASU 2014-08 will be effective for the Company’s financial statements for fiscal years beginning January 1, 2015. Based on the Company’s evaluation of ASU 2014-08, the adoption of this statement on January 1, 2015 will not have a material impact on the Company’s financial statements.

SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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 March 31, 2015 and December 31, 2014 is set forth in the table below:

	March 31, 2015		December 31, 2014
Parts inventory	$	215,762	$	219,374
Fuel inventory		56,670		68,891
Other inventory		11,507		11,074
Total inventory	$	283,939	$	299,339

Included in inventories are amounts held for third parties of $82,245 and $76,021 as of March 31, 2015 and December 31, 2014, respectively, with an offsetting liability included as part of accrued expenses.

NOTE 5 – 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 such firm. During the three months ended March 31, 2015 and 2014, no services were provided to the Company by Wachtel & Missry, LLP.

NOTE 6 - Litigation

From time to time, the Company and /or its subsidiaries 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.

Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read together with the accompanying consolidated condensed financial statements and related notes in this report. This Item 2 contains forward-looking statements that involve risks and uncertainties. Undue reliance should not be placed on these forward-looking statements, which speak only as of the date of this report. Actual results may differ materially from those expressed or implied in such forward-looking statements. Factors which could cause actual results to differ materially are discussed throughout this report and include, but are not limited to, those set forth at the end of this Item 2 under the heading "Cautionary Statement Regarding Forward Looking Statements." Additional factors are under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

The terms “we,” “us,” and “our” are used below to refer collectively to the Company and the subsidiaries through which our various businesses are actually conducted.

OVERVIEW

Saker Aviation Services, Inc. (“we”, “us”, “our”) is a Nevada corporation. Our common stock, $0.001 par value per share (the “common stock”), is publicly traded on the OTCQB Marketplace (“OTCQB”) under the symbol “SKAS”. Through our subsidiaries, we operate in the aviation services segment of the general aviation industry, in which we serve as the operator of a heliport, a fixed base operation (“FBO”), as a provider of aircraft maintenance, repair and overhaul (“MRO”) services, and as a consultant for a seaplane base that we do not own. FBOs provide ground-based services, such as fueling and aircraft storage for general aviation, commercial and military aircraft, and other miscellaneous services.

We were formed on January 17, 2003 as a proprietorship and were incorporated in Arizona on January 2, 2004. We became a public company as a result of a reverse merger transaction on August 20, 2004 with Shadows Bend Development, Inc., an inactive public Nevada corporation, and subsequently changed our name to FBO Air, Inc. On December 12, 2006, we changed our name to FirstFlight, Inc. On September 2, 2009, we changed our name to Saker Aviation Services, Inc.

Our business activities are carried out as the operator of the Downtown Manhattan (New York) Heliport, as an FBO at the Garden City (Kansas) Regional Airport, as an MRO at the Bartlesville (Oklahoma) Municipal Airport, and as a consultant to the operator of a seaplane base in New York City.

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

Our business activities at the Downtown Manhattan (New York) Heliport facility (the “Heliport”) commenced as a result of the Company’s award of 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”). See Note 2 to the condensed consolidated financial statements included in Item 1. of this report.

The Bartlesville facility became part of our company as a result of our acquisition of all of the outstanding stock of Phoenix Rising Aviation, Inc. (“PRA”) on August 15, 2013.

The FBO segment of the general aviation industry is highly fragmented. According to the National Air Transportation Association (“NATA”), there are over 3,000 FBOs that serve customers at one or more of over 3,000 airport facilities across the country that have at least one paved 3,000-foot runway. The vast majority of these entities 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 country is considered a “national” chain while an operation with FBOs in multiple locations within a single region is considered a “regional” chain.

REVENUE AND OPERATING RESULTS

Comparison of the Three Months Ended March 31, 2015 and March 31, 2014.

REVENUE

Revenue decreased by 11.0 percent to $2,710,142 for the three months ended March 31, 2015 as compared with corresponding prior-year period revenue of $3,045,439.

For the three months ended March 31, 2015, revenue associated with the sale of jet fuel, aviation gasoline and related items decreased by 21.3 percent to approximately $1,015,000 as compared to approximately $1,300,000 in the three months ended March 31, 2014. The decrease was largely attributable to a lower volume of gallons, particularly gallons associated with our general aviation fueling operations. The general aviation category experienced a significantly higher demand in the quarter ended March 31, 2014, which demand did not recur during the same period in 2015.

For the three months ended March 31, 2015, revenue associated with services and supply items decreased by 5.0 percent to approximately $1,650,000 as compared to approximately $1,700,000 in the three months ended March 31, 2014. The decrease was largely attributable to higher levels of activity and related revenue in our Heliport operations offset by a decline in demand for maintenance services at our Oklahoma MRO, as compared to the same period last year.

For the three months ended March 31, 2015, all other revenue increased by 89.7 percent to approximately $53,000 as compared to approximately $28,000 in the three months ended March 31, 2014. The increase was largely attributable to miscellaneous revenue recorded in the three months ended March 31, 2015 that did not occur in the same period last year.

GROSS PROFIT

Total gross profit decreased 3.0 percent to $1,216,418 in the three months ended March 31, 2015 as compared with the three months ended March 31, 2014. Gross margin increased to 44.9 percent in the three months ended March 31, 2015 as compared to 41.2% percent in the same period in the prior year. The decrease in gross profit related to a decline in demand for maintenance services at our Oklahoma MRO as compared to the same period last year.

OPERATING EXPENSE

Selling, General and Administrative

Total selling, general and administrative expenses, or SG&A, were $1,338,714 in the three months ended March 31, 2015, representing an increase of approximately $126,019 or 9.4 percent, as compared to the same period in 2014. The overall increase in SG&A was largely attributable to additional costs related to the higher levels of activity in our Heliport operations.

SG&A associated with our aviation services operations were approximately $1,250,000 in the three months ended March 31, 2015, representing an increase of approximately $100,000, or 10.2 percent, as compared to the three months ended March 31, 2014. SG&A associated with our FBO operations, as a percentage of revenue, was 46.1 percent for the three months ended March 31, 2015, as compared with 37.2 percent in the corresponding prior year period. The increased operating expenses were largely attributable to additional costs related to the higher levels of activity in our Heliport operations.

Corporate SG&A was approximately $90,000 for the three months ended March 31, 2015, representing a decrease of approximately $1,000 as compared with the corresponding prior year period.

OPERATING INCOME

Operating loss for the three months ended March 31, 2015 was $(122,296) as compared to operating income of $41,510 in the three months ended March 31, 2014. The decline on a year-over-year basis was driven by a decrease in demand for maintenance services at our Oklahoma MRO and other factors as identified above.

Depreciation and Amortization

Depreciation and amortization was approximately $151,000 and $131,000 for the three months ended March 31, 2015 and 2014, respectively.

Interest Income/Expense

Interest income for the three months ended March 31, 2015 was $0 as compared to $3,200 in the three months ended March 31, 2014. Interest expense for the three months ended March 31, 2015 was approximately $14,000 as compared to $25,000 in the same period in 2014.

Income Tax

Income tax expense for the three months ended March 31, 2015 was $0 as compared to approximately $14,000 during the same period in 2014. The change on a year-over-year basis is due to a loss in the three months ended March 31, 2015 as compared to income in the same period in 2014.

Net (Loss) Income Per Share

Net (loss) income was $(136,592) and $11,869 for the three months ended March 31, 2015 and 2014, respectively. The decline in results is an outcome of the factors described above.

Basic and diluted net (loss) income per share for each of the three month periods ended March 31, 2015 and 2014 was $0.00.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2015, we had cash and cash equivalents of $460,245 and a working capital surplus of $762,523. We generated revenue of $2,710,142 and net losses of $136,592 for the three months ended March 31, 2015. For the three months ended March 31, 2015, cash flows included net cash provided by operating activities of $37,821, net cash used in investing activities of $14,248, and net cash used in financing activities of $94,331.

Proceeds of the PNC Acquisition Line were able to be dispersed, based on parameters defined in the PNC Loan Agreement, until May 17, 2014 (the “Conversion Date”). As of the Conversion Date, there was $1,350,000 outstanding under the PNC Acquisition Line. The payment terms provide that 30 days following the Conversion Date, and continuing on the same day of each month thereafter, the Company is required to make equal payments of principal over a 60 month period. Interest on the outstanding principal continues to accrue at a rate equal to one-month LIBOR plus 275 basis points (2.93% as of March 31, 2015). As of March 31, 2015, there was $1,125,000 outstanding under the PNC Acquisition Line.

The PNC Working Capital Line may be dispersed for working capital and general corporate purposes. Interest on outstanding principal accrues at a rate equal to daily LIBOR plus 250 basis points (2.68% as of March 31, 2015) and the PNC Working Capital Line is annually renewable at PNC Bank’s option. As of March 31, 2015, the outstanding balance of the PNC Working Capital Line was $550,000.

The PNC Term Loan was dispersed to settle miscellaneous Company debt of the same amount. Interest on outstanding principal accrues at a rate equal to one-month LIBOR plus 275 basis points (2.93% as of March 31, 2015) and principal and interest payments shall be made over a 34 month period. At March 31, 2015, $ 104,342 was outstanding.

During the three months ended March 31, 2015, we had a net decrease in cash of $70,758. Our sources and uses of funds during this period were as follows:

Cash from Operating Activities

For the three months ended March 31, 2015, net cash provided by operating activities was $37,821. This amount included a decrease in operating cash related to net loss of $(136,592) and additions for the following items: (i) depreciation and amortization, $151,210 ; (ii) stock based compensation, $8,500 ; (iii) accounts receivable, trade, $591,864; (iv) inventories, $15,400; and (v) prepaid expenses and other current assets, $237,990. These increases in operating activities were offset by the following decreases: (i) accounts payable, $507,664; (ii) customer deposits, $5,747; and (iii) accrued expenses, $317,140.

For the three months ended March 31, 2014, net cash used in operating activities was $32,384. This amount included an increase in operating cash related to net income of $11,869 and additions for the following items: (i) depreciation and amortization, $130,820; (ii) stock based compensation, $7,689; (iii) accounts receivable, trade, $252,569; (iv) inventories, $15,488; (v) deposits, $1,500; (vi) deferred income taxes, $9,000; and (vii) customer, deposits, $33,210. These increases in operating activities were offset by the following decreases: (i) prepaid expenses and other current assets, $272,469; (ii) accounts payable, $70,714; and (iii) accrued expenses, $151,346.

Cash from Investing Activities

For the three months ended March 31, 2015, net cash of $14,248 was used in investing activities for the purchase of property and equipment. For the three months ended March 31, 2014, net cash of $9,221 was provided by investing activities for the payment of note receivable of $28,299; offset by the purchase of $19,078 in property and equipment.

Cash from Financing Activities

For the three months ended March 31, 2015, net cash used in financing activities was $94,331 for the repayment of notes payable. For the three months ended March 31, 2014, net cash used in financing activities was $28,778, consisting of a drawdown from the line of credit of $125,000 offset by the repayment of notes payable of $153,778.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Recent Accounting Pronouncements

In April 2014, the FASB issued Accounting Standards Update No. 2014-08 “Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360) – Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity” (ASU 2014-08) which requires entities to change the criteria for reporting discontinued operations and enhance convergence of the FASB’s and International Accounting Standard Board’s (IASB) reporting requirements for discontinued operations so as not to be overly complex or difficult to apply to stakeholders. Only those disposals of components of an entity that represent a strategic shift that has (or will have) a major effect on the entity’s operations and financial results will be reported as discontinued operations in the financial statements. ASU 2014-08 is effective for fiscal years beginning on or after December 15, 2014 and interim periods thereafter. ASU 2014-08 will be effective for the Company’s financial statements for fiscal years beginning January 1, 2015. Based on the Company’s evaluation of ASU 2014-08, the adoption of this statement on January 1, 2015 did not have a material impact on the Company’s financial statements.

CAUTIONARY STATEMENT FOR FORWARD-LOOKING STATEMENTS

Statements contained in this report may contain information that includes or is based upon "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent management's current judgment and assumptions, and can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements are frequently accompanied by the use of such words as "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:

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

our ability to identify, negotiate and complete the acquisition of targeted operators and/or other businesses, 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 made by the Company may cause actual results to be materially different from those described herein or elsewhere by us. Undue reliance should not be 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, 2014 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, except as may be required by law.

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 our principal financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon, and as of the date of that evaluation, our President, Chief Executive Officer and principal financial officer concluded that our 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 Securities Exchange Act of 1934, as amended, is (i) recorded, processed, summarized and reported as and when required, and (ii) is accumulated and communicated to our management, including our President, Chief Executive Officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

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 6. Exhibits

Exhibit No.		Description of Exhibit

31.1		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer (principal executive officer). *

31.2		Rule 13a-14(a)/15d-14(a) Certification of President (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

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:	May 15, 2015	By:	/s/ Ronald J. Ricciardi
			Ronald J. Ricciardi
			President

EXHIBIT 31.1

Certification of Chief Executive Officer

(principal executive officer)

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

I, Alvin S. Trenk, certify that:

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

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

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

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

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

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

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

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

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

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

Date: May 15, 2015

By: /s/ Alvin S. Trenk

Alvin S. Trenk
Chief Executive Officer (principal executive officer)

EXHIBIT 31.2

Certification of President

(principal financial officer)

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

I, Ronald J. Ricciardi, certify that:

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

(a)

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

(b)

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

(c)

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

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

(a)

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

(b)

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

Date: May 15, 2015

By: /s/ Ronald J. Ricciardi

Ronald J. Ricciardi
President (principal financial officer)

EXHIBIT 32.1

Section 1350 Certification

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

The Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015 (the “Report”) of Saker Aviation Services, Inc. fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

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

Date: May 15, 2015	By:	/s/ Alvin S. Trenk
		Alvin S. Trenk
		Chief Executive Officer
		(principal executive officer)

Date: May 15, 2015	By:	/s/ Ronald J. Ricciardi
		Ronald J. Ricciardi
		President
		(principal financial officer)

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

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