SAKER AVIATION SERVICES, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

See accompanying notes to consolidated financial statements.

See accompanying notes to consolidated financial statements.

See accompanying notes to consolidated financial statements.

See accompanying notes to consolidated financial statements.

SAKER AVIATION SERVICES, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

The following discussion should be read together with the accompanying unaudited condensed consolidated financial statements and related notes in this report. This Item 2 contains forward-looking statements that involve risks and uncertainties. Undue reliance should not be placed on these forward-looking statements, which speak only as of the date of this report. Actual results may differ materially from those expressed or implied in such forward-looking statements. Factors which could cause actual results to differ materially are discussed throughout this report and include, but are not limited to, those set forth at the end of this Item 2 under the heading "Cautionary Statement Regarding Forward Looking Statements." Additional factors are under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

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

Overview

Saker Aviation Services, Inc. (“we,” “us,” “our” or the “Company”) is a Nevada corporation. Our common stock, $0.03 par value per share (the “common stock”), is quoted on the OTCQB Marketplace (“OTCQB”) under the symbol “SKAS”. We previously served as the operator of a heliport and currently provide strategic financial advisory services to clients.

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.

As discussed throughout this document, we previously were the operator of the Downtown Manhattan (New York) Heliport until March 29, 2025. Our business activities at the Downtown Manhattan (New York) Heliport facility (the “Downtown Manhattan Heliport”) commenced in November 2008 when we were awarded the Concession Agreement by the City of New York to operate the Downtown Manhattan Heliport, which we assigned to our subsidiary, FirstFlight Heliports, LLC d/b/a Saker Aviation Services. As described in greater detail below, we no longer operate the Downtown Manhattan Heliport.

Beginning in December 2025, we commenced providing strategic financial advisory services to clients.

REVENUE AND OPERATING RESULTS

Comparison of Operations for the Three Months Ended March 31, 2026 and March 31, 2025.

REVENUE

For the three months ended March 31, 2026, revenue from operations associated with providing financial advisory services was $15,000. For the three months ended March 31, 2025, revenue from operations at the Downtown Manhattan Heliport was $1,260,756, consisting of approximately $297,000 from the sale of jet fuel, approximately $937,000 associated with services and supply items, and $27,000 relating to all other revenue. The change in a year-over-year basis is due to the Company ceasing operations at the Downtown Manhattan Heliport on March 29, 2025.

COST OF REVENUE

For the three months ended March 31, 2026, cost of revenue from providing financial advisory services was $21,875. For the three months ended March 31, 2025, cost of revenue from operating the Downtown Manhattan Heliport was $749,396. The change in a year-over-year basis is due to the Company ceasing operations at the Downtown Manhattan Heliport on March 29, 2025.

GROSS PROFIT

Total gross profit from operations decreased by 101.3 percent in the three months ended March 31, 2026 as compared with the three months ended March 31, 2025. For the three months ended March 31, 2026, the Company had a net loss from operations of $(6,875) compared to a gross profit of $511,360 for the three months ended March 31, 2025. Gross margin was (45.8) percent in the three months ended March 31, 2026 as compared to 40.6 percent in the same period in the prior year. The change in a year-over-year basis is due to the Company ceasing operating the Downtown Manhattan Heliport on March 29, 2025.

OPERATING EXPENSE

Selling, General and Administrative

Total selling, general and administrative expenses, (“SG&A”), from operations were $296,449 in the three months ended March 31, 2026, representing a decrease of $711,015 or 70.6 percent, as compared to the same period in 2025.

SG&A expenses associated with our operations were approximately $220,000 in the three months ended March 31, 2026, representing a decrease of approximately $633,000, or 74.2 percent, as compared to the three months ended March 31, 2025. SG&A associated with our operations, as a percentage of revenue, was 1,467 percent for the three months ended March 31, 2026, as compared with 67.7 percent in the corresponding prior year period. The decrease in SG&A on a year-over-year basis is primarily attributable to a one-time charge in the first quarter of 2025 to record deferred compensation expense relating to a Covenant to Compete Agreement as well as decreased professional fees in 2026 relating to the Company’s ongoing challenge, and pending litigation, of the NYCEDC selection of the heliport’s new operator.

Corporate SG&A from operations was approximately $76,000 for the three months ended March 31, 2026, representing a decrease of approximately $78,000 as compared with the corresponding prior year period. The decrease in corporate expenses was primarily attributable to a decrease in services provided by various service providers.

OPERATING LOSS

Operating loss from operations for the three months ended March 31, 2026 was $303,324 as compared to $496,104 in the three months ended March 31, 2025. The change on a year-over-year basis was largely attributable to the items discussed above.

Interest Income

Interest income for the three months ended March 31, 2026 and 2025 was $79,303 and $78,671, respectively.

Income Tax

Income tax expense for the three months ended March 31, 2026 and 2025 was $0.

Net Loss Per Share

Net loss was $223,227 and $514,765 for the three months ended March 31, 2026 and 2025, respectively. The change on a year-over-year basis was largely attributed to the items discussed above.

Basic net loss per share for the three months ended March 31, 2026 and 2025 was $0.22 and $0.52, respectively. Diluted net loss per share for the three months ended March 31, 2026 and 2025 was $0.22 and $0.51, respectively.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2026, we had cash and cash equivalents of $4,539,940 and a working capital surplus of $8,509,684. In the three months ended March 31, 2026, we generated revenue from operations of $15,000 and had a net loss of $223,227. For the three months ended March 31, 2026, cash flows included net cash used in operating activities of $57,772, which included net loss of $223,227, and net cash used in investing activities of $33,954.

On March 15, 2018, the Company entered into a loan agreement for a $1,000,000 revolving line of credit (the “Key Bank Revolver Note”) which, at the discretion of the Bank, provides for the Company to borrow up to $1,000,000 for working capital and general corporate purposes. On November 22, 2023, the Bank reduced the amount available under the Key Bank Revolver Note to $500,000. This revolving line of credit is a demand note with no stated maturity date. Borrowings under the Key Bank Revolver Note will bear interest at a rate per annum equal to Daily Simple SOFR plus 2.75%. The Company is required to make monthly payments of interest on any outstanding principal under the Key Bank Revolver Note and is required to pay the entire balance, including principal and all accrued and unpaid interest and fees, upon demand by the Bank. Any proceeds from the Key Bank Revolver Note would be secured by substantially all of the Company’s assets. There were no amounts due under the Key Bank Revolver Note at March 31, 2026 or 2025.

The Company has invested its excess working capital reserves in a high yield savings account and government backed securities with UBS Financial Services Inc. (“UBS”).

On February 10, 2025, the Company entered into a Covenant Not To Compete agreement (the “Covenant Agreement”) with Brian Tolbert, the manager of the Downtown Manhattan Heliport (the “Receiving Party”). The Covenant Agreement provides for payments beginning in April 2025 totaling $276,923 over the next 18 months, provided the Receiving Party does not disclose any confidential information to, or accept employment with, the new operator of the Heliport or any of its subsidiaries. The Company has recorded the liability and expense in the Company’s Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Operation as of March 31, 2026.

During the three months ended March 31, 2026, we had a net decrease in cash of $91,726. Our sources and uses of funds during this period were as follows:

Cash from Operating Activities

For the three months ended March 31, 2026, net cash used in operating activities was $57,772. This amount included a decrease in operating cash related to net loss of $223,227 and additions for the following items: (i) stock-based compensation, $5,666; (ii) prepaid expenses, $49,979; and (iii) accrued expenses, $174,576. These increases in operating activities were offset by (i) realized gain on investments of $794; (ii) accounts receivable, $10,000; (iii) deferred liabilities, $46,154; and (iv) accounts payable, $7,818.

For the three months ended March 31, 2025, net cash provided by operating activities was $34,789. This amount included an increase in operating cash related to net loss of $514,765 and additions for the following items: (i) depreciation and amortization, $3,879; (ii) stock-based compensation, $27,097; (iii) write-off of relinquished assets, net of depreciation, $104,339; (iv) accounts receivable, $128,422; (v) inventory, $6,647; (vi) prepaid expenses, $519,194; (vii) deferred liabilities, $276,923; (viii) customer deposits, $2,852; and (ix) accounts payable, $105,644. These increases in operating activities were offset by a decrease in accrued expenses of $618,436 and realized gain on investments of $7,007.

Cash Used in Investing Activities

For the three months ended March 31, 2026, net cash used in investing activities was $33,954. This amount included purchases of investments of $1,054,954 offset by the sale of investments of $1,021,000.

For the three months ended March 31, 2025, net cash used in investing activities was $29,743. This amount included purchases of investments of $732,598 and the purchase of property and equipment of $6,145, offset by the sale of investments of $709,000.

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 "approximately," "believes," could," "estimated," "expects," "may," "should," "will," and similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors, are described in greater detail in our Annual Report on Form 10-K for the year ended December 31, 2025.

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 placed on any such forward-looking statements, which speak only as of the date they were made. Subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above and elsewhere in our reports filed with the SEC. We expressly disclaim any intent or obligation to update any forward-looking statements, except as may be required by law.

Item 3 – Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

Item 4 – Controls and Procedures

Evaluation of Disclosure Controls and Procedures

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

Under the supervision, and with the participation of management, including our Chief Executive Officer (principal executive officer) and President (principal financial officer), we conducted an assessment of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of March 31, 2026 concluded that it was not effective at the reasonable assurance level due to a material weakness.

This material weakness relates to the Company’s governance and staffing structure, including the absence of an audit committee and limited segregation of duties due to limited personnel. These conditions could adversely affect the Company’s ability to prevent or detect material misstatements to the financial statements on a timely basis.

No material misstatements were identified in the financial statements as a result of this condition.

The Company is implementing remediation measures, including enhancing oversight and establishing an audit committee.

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-1 – Legal Proceedings

On November 20, 2024 the Company was notified by the NYCEDC that NYCEDC intends to award the Concession Agreement for the operation of the Downtown Manhattan Heliport to another company (“Skyport”). On March 31, 2025, the Company filed a petition with the Supreme Court of the State of New York County of New York requesting among other things, an order directing the City of New York to produce non-privileged documentation related to its decision to award the Concession Agreement to Skyport, which the Company has already requested, and a judgement annulling the award of the Concession Agreement to Skyport and directing the city to award the Concession Agreement to another company. The petition alleges a number of misrepresentations made by Skyport to the city which the Company believes helped Skyport secure the Concession Agreement. As of May 15, 2026, this litigation is still ongoing. The Company can make no assurance that we will be successful in the annulment of the Concession Agreement to Skyport.

Item–1A – Risk Factors

For a discussion of the Company’s potential risks or uncertainties, please see: (i) “Part I—Item 1A—Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC.

Item 6 - Exhibits

* 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.