PART I

General

Saker Aviation Services, Inc. (“we”, “us”, “our”) is a Nevada corporation. Our common stock, $0.03 par value per share (the “common stock”), is quoted on the OTCQB Marketplace (“OTCQB”) under the symbol “SKAS”. Through our subsidiaries, we operate in the aviation services segment of the general aviation industry, in which we serve as the operator of a heliport, a fixed base operation (“FBO”), a provider of aircraft maintenance and repair services (“MRO”), and as a consultant for a seaplane base that we do not own. FBOs provide ground-based services, such as fueling and aircraft storage for general aviation, commercial and military aircraft, and other miscellaneous services.heliport.

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

Our business activities are carried out as the operator of the Downtown Manhattan (New York) Heliport and until October 31, 2022 as an FBOa fixed base operation (“FBO”) and MROa provider of aircraft maintenance and repair services (“MRO”) at the Garden City (Kansas) Regional Airport.

The Garden City facility became part of our company FBOs provide ground-based services, such as a result of our acquisition of the FBO assets of Central Plains Aviation, Inc. in March 2005fueling and of Aircraft Services, Inc. (“Aircraft Services”) in October 2016.aircraft storage for general aviation, commercial and military aircraft, and other miscellaneous services.

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

We believe the general aviation markettourism industry has been historically cyclical, with revenue correlated to general U.S. economic conditions. Although not truly seasonal in nature, the spring and summer months tend to generate higher levels of revenue and our operations generally follow that trend. The COVID-19 pandemic has contributed to a decline in travel and tourism related businesses and general economic conditions in the United States and significantly disrupted our business and operations in the year ended December 31, 2021 and the first quarter of 2022, as well as disrupted business operations in the United States and globally. To the extent local, regionalBeginning in April 2022, sightseeing tour operators saw an increase in activity and the federal government impose restrictions on air travel and/or air tourism or consumers cease traveling, our results of operationsa much higher demand for tours. There can be no assurance that this increased activity will continue to be negatively impacted. We cannot predict with certainty the full impact thatas demand for sightseeing tours will depend on future developments of the COVID-19 pandemic, will haveincluding the duration and spread and any future related travel advisories and restrictions and associated impact on overall demand for air travel. The COVID-19 pandemic had a less substantial impact on our businessformer operations financial conditionat our Kansas FBO and results of operations, which will largely depend on the length and severity of the ongoing pandemic and any recovery will depend on consumer willingness to travel by air.MRO. Please see Item 1A. “Risk Factors” below.

Concession Agreement for New York Heliport

We are a party to a Concession Agreement, dated as of November 1, 2008, with the City of New York for the operation of the Downtown ManhattanNew York Heliport (the “Concession Agreement”). Pursuant to the terms of the Concession Agreement, we must pay the greater of 18% of the first $5,000,000 in any program year based on cash collected (“Gross Receipts”) and 25% of Gross Receipts in excess of $5,000,000, or minimum annual guaranteed payments.

We and the New York City Economic Development Corporation (the “NYCEDC”) announced new measures to reduce helicopter noise and impacts across New York City (the “Air Tour Agreement”). Under the Air Tour Agreement, we have not been allowed to permit our tenant operators to conduct tourist flights from the Downtown ManhattanNew York Heliport on Sundays since April 1, 2016. We are also required to ensure that its tenant operators reduce the total allowable number of tourist flights from 2015 levels by 20 percent beginning June 1, 2016, by 40 percent beginning October 1, 2016 and by 50 percent beginning January 1, 2017. The Air Tour Agreement also provided for the minimum annual guarantee payments we are required to pay to the City of New York under the Concession Agreement be reduced by 50%, effective January 1, 2017. Additionally, since June 1, 2016, we have been required to provide monthly written reports to the NYCEDC and the New York City Council detailing the number of tourist flights conducted out of the Downtown ManhattanNew York Heliport compared to 2015 levels, as well as information on any tour flight that flies over land and/or strays from agreed upon routes. The Air Tour Agreement also extended the Concession Agreement for 30 months resulting in a new expiration date of April 30, 2021 and gave the City of New York two one-year options to extend the term of the Concession Agreement. The term of the Concession Agreement was subsequently extended by the City of New York through April 30, 2023 by the city’s exercise of both its two one-year option renewals.renewals

On February 15, 2023, it was reported in the public record that NYCEDC would be bringing a new Concession Agreement with the Company as the operator of the Downtown Manhattan Heliport to the Franchise and Concession Review Committee meeting on March 3, 2023. The item was subsequently pulled off the agenda, with NYCEDC announcing on April 7, 2023 that the previous Request for Proposals ("RFP") had been cancelled and that it is their intention to put out a new RFP in 2023. Saker's current Concession Agreement terminates on April 30, 2023. The Company has been notified by NYCEDC that the Company will receive a new permit to operate the heliport from May 1, 2023 until a new RFP process is concluded. The Company is currently working with NYCEDC on the new agreement and expects to file a Form 8-K once the new agreement is finalized.

Lease for Garden City (Kansas) Regional Airport

We lease facilities from GardenAs disclosed in a Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC) on October 3, 2022, FBO Air-Garden City, Kansas,Inc., (“GCK”), one of our wholly owned subsidiaries entered into a FBO Transfer Agreement (the “Transfer Agreement”) with Crosby Flying Services, LLC ( “Crosby”) pursuant to which allows usGCK agreed (i) to operatesell to Crosby substantially all of its assets and none of its liabilities, and (ii) to a seven year non-competition covenant (the “Non-Compete”) whereby we, including our subsidiaries and affiliates, agreed not to engage in any business involving the operation of a fixed based operation supplying aviation fuels and lubricants or the supply of other goods or provision of services typically supplied or performed at fixed base operations at airports at any facility located within one hundred (100) miles of the Garden City Regional Airport in Garden City, Kansas, for $1.6 million.

As disclosed in a Current Report on Form 8-K filed with the SEC on November 2, 2022, on October 31, 2022 (the “Closing Date”), the transaction contemplated by the Transfer Agreement closed and provide for: (a) a 21-year lease term expiring December 31, 2030, with one five-year renewal period, and (b) a base rentwe became subject to the Non-Compete, for an aggregate purchase price of, $2,187 per month. In addition, we incur a fuel flowage fee of $0.06 per gallon of fuel received.after certain closing adjustments, approximately $1.5 million. The fuel flowage feeCrosby paid the purchase price on the Closing Date less $160,000 which is to be reviewed annually bypaid in cash upon the first anniversary of the Closing Date subject to GCK’s and our compliance with the Non-Compete, pursuant to the Transfer Agreement. Both GCK leases, which allowed us to operate at the Garden City Regional Airport, the City of Garden, and us. Flowage fees on fuel gallons purchased aggregated approximately $43,000 and $36,000 for the years ended December 31, 2021 and 2020, respectively.

We lease additional facilities fromwere terminated by Garden City Kansas, which provides for a 14 year lease term expiring Decemberas of the October 31, 2030 with a base rent of $565 a month.2022 closing date.

Suppliers and Raw Materials

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

Marketing and Sales

The main goal of our marketing and sales efforts iswas to increase traffic at both our facilities,Kansas facility and New York Heliport, which we believebelieved would then drive revenue through the incremental sale of our products and services. Our primary marketing tactic in this regard isand sales efforts at our Kansas location ceased with the sale of our Kansas operation on October 31, 2022. Going forward, our marketing and sales effort will be to focus advertising efforts in the environments (web, periodical and industry publications) where the pilot and aviation-user community might be introduced towhich we believe will increase our brand name and locations.incremental revenue from our customer’s sale of services at our New York Heliport. We intend to continue to invest in improvements to our sales and marketing strategies to drive revenue growth.

Government Approvals

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

Government Regulation

We are subject to a variety of governmental laws and regulations that apply to companies in the aviation industry. These include, among other matters, compliance with the Federal Aviation Administration (“FAA”) rules and regulations, and local, regional and national rules and regulations as they relate to environmental matters. The FAA, from time to time, issues directives and other regulations relating to the management, maintenance and operation of facilities, including the potential of emergency regulations, such as those related to the COVID-19 pandemic.public health crises including pandemics and epidemics. Additionally, we may be subject to government procurement regulations as they relate to obtaining new agreements or renewing or extending existing agreements with governmental entities. Compliance with those requirements may cause us to incur significant expenditures. The proposal and enactment of additional laws and regulations, as well as any charges that we have not complied with any such laws and regulations, could significantly increase the cost of our operations and reduce overall revenue. We believe we are in compliance with, and intend to continue to comply with, all applicable government regulations but cannot provide assurance that compliance with existing laws and regulations or that laws or regulations enacted in the future will not adversely affect our business and results of operations. The adoption of new regulations could result in increased costs and have an adverse impact on our results of operations, including, for example, regulations that restricted air travel such as reduced seating capacity or possible temporary orders to cease operations as a result of the COVID-19 pandemic.public health crises.

Customers

In 2019,2021, the Company’s accounts receivable wasprimarily comprised of fourtwo customers at our New York Heliport. DueThese customers continued to the COVID-19 pandemic, two of these customers were unable to sustain their business and ceased operating in 2020. Their receivable balances at December 31, 2020, totaling approximately $208,000, have been deemed uncollectable by the Company. The loss of these two customers has adversely affected our business and results of operations. The Company’s other two customers continue to operate throughout 2021, but at substantially reduced levels of operation.operation when compared to pre-COVID-19 levels. For the fiscal year ended December 31, 2021, these remaining two customers represented approximately $180,000, or 58.9%59.8%, of the balance of our accounts receivable andreceivable.In addition, these two customers represented approximately 27.6% of our revenue in 2021.

One of the Company’s 2021 revenue.former customers resumed operations at our New York Heliport from March 2022 through June 2022, when it ceased operation.A new tenant began operating at our New York Heliport in June 2022. Beginning in April 2022, the Company’s customers began operating at pre-pandemic levels which continued through the end of 2022. For the fiscal year ended December 31, 2022, three customers represented approximately $184,000, or 75%, of the balance of our accounts receivable.In addition, these three customers represented approximately 83 % of our revenue in 2022. The Company has a security deposit in place in connection with bothfor each of these receivables. In March 2022, one of the Company’s former customers resumed operations.The Company has a security deposit in place with this customer.customers.

Competition

The FBO segment ofOur New York location is the aviation services industry is competitive in both pricing and service because aircraft in transit are ableonly heliport authorized by New York City to choose from a number of FBO options within a 300-mile radius. The vast majority of FBO operators are independent, single location operators. We are the sole FBO at our facility in Garden City, KS. As such,perform sightseeing tours. Therefore, we face no direct on-airport competition. However,competition in servicing this line of business. There are two other New York City heliports who offer fuel and corporate charter services that we face competitive pressure on pricing and servicesdirect competition from FBO facilities at other airports, depending on aircraft travel flexibility.in providing these services.

Costs and Effects of Complying With Environmental Laws

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

Employees

As of December 31, 2021,2022, we employed 2513 persons, 2112 of whichwhom were employed on a full-time basis and 1basis. None of which wasthese employees were an executive officer. All of our personnel are employed in connection with our operations in New York and Kansas.York.

Available Information

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

ITEM 1A.          RISK FACTORS

Risks related to our business and operations:

We will need additional financingThe impact of pandemics, including the COVID-19 pandemic, or other epidemics or widespread health crises is difficult to expandpredict and could materially and adversely affect our business.business and results of operations.

We may seekOur ability to expand our business through strategic acquisitions of companies providing similar or ancillary servicesgenerate revenues is highly sensitive to the services we provide to complement and/or augment our current aviation services operations. Certain potential aviation service firmsstrength of the economies in which we may seek to acquireoperate. Any adverse public health developments in the future may accept shares of our common stock or other securitieslocations where we conduct business, as payment by us for the acquisition. However, we believe that most will likely prefer cash payments, whether paid at the closing or in post-closing installment payments. There can be no assurance that our operations will generate sufficient cash flow to meet these acquisition obligations. Accordingly, we anticipate the need to seek additional equity or debt financing to meetwell as any cash requirements for acquisitions. Any such financing will be dependent on general market conditions and the stock market’s evaluation of our performance and potential. Accordingly, we can give no assurance that we will obtain such equity or debt financing and, even if we do, that the terms would be satisfactory to us.

The rapid spread of the COVID-19 virus, the continuing spread of its variants, the persistence of the resulting pandemic andgovernmental restrictive measures implemented to combat it have had,control such outbreaks and will continueconsumer responses to such outbreaks, could have a material adverse effectimpact on our business. It is possible that there willfinancial condition. These impacts, which are highly uncertain and cannot be future negative effects that we cannot presently predict, including near-term effects.

The rapid spread of the COVID-19 virus in 2020accurately predicted, could be significant and variants of the virus in 2021, the persistence of the resulting pandemic, the measures governments and private parties have implemented in orderlong term. Further, any actions taken to stem the spread of this pandemic, and the general concern about the virus among travelers have had, and are continuingmitigate any health crises could lead to have, a material adverse effect on the demand for air travel compared to historical levels, and consequently upon our business. Among other effects of thean economic recession. For example, ." The COVID-19 pandemic affecting airhas impacted the global and United States economies. Federal, state, and local governments implemented certain travel restrictions, “stay-at-home” orders, and our business:

These effects related to the COVID-19 pandemic have negatively impacted air travel in general, which in turn has materially adversely affected our revenues, results of operations and financial condition. Although vaccines have generally proved to be effective and certainthose of the restrictions above have been eased in some places, the ongoing pandemic, including large outbreaks, resurgences of COVID-19 in various regions and appearances of new variants of the virus, has resulted, and may continue to result, in their reinstitution. The effectiveness of vaccines against future variants that may develop is also unknown. Moreover, additional currently unknown restrictions or other events dissuading air travel may occur in the future as a result of an increase in COVID-19 case levels or other factors related to the pandemic (including possibly in the near term), lengthening the negative effects of the pandemic on our business.

Our operations have been, and could in the future be, negatively affected further if our employees are quarantined or sickened as a result of exposure to COVID-19, or if they are subject to additional governmental COVID-19 curfews or “shelter in place” health orders or similar restrictions.

customers. As a result of the COVID-19 pandemic, on March 17, 2020 all sightseeing tour operations at the Downtown ManhattanNew York Heliport ceased. On July 20, 2020, New York City started Phase 4 of the city’s reopening. Sightseeing tour operators at the heliportNew York Heliport restarted operations under this phase. For the period July 20, 2020 through March 31, 2022, sightseeing tour operators experienced much lower demand for tours as compared to pre-pandemic levels of activity. Beginning in April 2022 and through the date of this report, sightseeing tour operators have experienced lowerseen an increase in activity and a much higher demand and reduced activity compared to pre-pandemic activity. To date, thefor tours. The COVID-19 pandemic has had a less substantial impact on our operations at our Kansas FBO and MRO. Although the Downtown Manhattan Heliport has been able to reopen and our Kansas FBO and MRO is operating,

Further, there can be no assurance that these facilitiescost constraint actions, if any, in response to the pandemic or any future crisis, will be able to remain open foroffset possible future impacts of the foreseeable future, depending on future developmentscrisis. While restrictions related to the COVID-19 pandemic.

The fullpandemic have eased, the ultimate impact of it or any other public health crisis on our business and results of operations will depend on, among other things, the severity and length of the health crisis, the duration, effectiveness, and extent of the impactmitigation measures and actions designed to contain the outbreak, the emergence, contagiousness, and threat of new and different strains of the disease, the availability and efficacy of vaccines and effective treatments, public acceptance of the vaccines, changes in customer and consumer behavior as a result of the crisis, as well as the resulting economic conditions and how quickly and to what extent normal economic and operating conditions resume, all of which are highly uncertain. Such extraordinary events and their aftermaths can cause investor fear and panic, which could further materially and adversely affect our operations, the economies in which we operate, and the financial markets generally in ways that cannot necessarily be predicted. The effects of the COVID-19 pandemic, on our operationalor any future public health crisis, and financial performance will depend on future developments, including the durationmitigation measures taken in response, have had and spread of the COVID-19 pandemic and related travel advisories and restrictions and the impact of the COVID-19 pandemic on overall demand for air travel, which we expect to remain low for the duration of the pandemic.

We are unable to predict how long conditions related to the pandemic will persist. The overall situation remains fluid, and it is impossible to predict the timing of future material developments and whether they will occur in the near, medium or long term. At this time, we are also not able to predict the extent to which the COVID-19 pandemic may result in permanent changes to our customers’ behavior, with such changes including but not limited to a permanent reduction in business travel as a result of increased usage of virtual meetings, and videoconferencing and teleconferencing products and more broadly, a general reluctance to travel, each of which could have a material negative impact on our business.

We expect our business and results of operations and financial condition to continue to be adversely affected by the COVID-19 pandemic.

The COVID-19 pandemic has created significant volatility, uncertainty and economic disruption. The COVID-19 pandemic has significantly and adversely affected our business, operations and financial results, and we expect these adverse effects to continue for the durationmay amplify many of the pandemic, and the full extent to which the COVID-19 pandemic impacts our business, operations and financial results will depend on numerous evolvingother risk factors that we may not be able to accurately predict. We expect our results for the fiscal year ending December 31, 2022 to be adversely affected. Factors that will determine the full extent to which the COVID-19 pandemic continues to impact our business include, but are not limited to:disclosed elsewhere in this "Item 1A. Risk Factors."

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

Our operations could be significantly affected by the availability and price of jet fuel. The price and supply of jet fuel is unpredictable and fluctuates based on events we cannot control, such as geopolitical developments, including but not limited to heightened uncertainties and impacts resulting from Russian military actions in Ukraine and associated response, supply and demand for crude oil, actions by oil and jet fuel producers, actions by jet fuel refiners, conflict, unrest or economic instability in oil producing countries and regions, regional production patterns and weather conditions. A significant increase in the price of jet fuel would most likely have a material impact on our ability to achieve and maintain profitability unless we are able to pass on such costs to our customers. Due to the competitive nature of the industry, our ability to pass on increased fuel prices by increasing our rates is uncertain. Likewise, any potential benefit of lower fuel prices may be offset by increased competition and lower revenue, in general. If there are new outbreaks of hostility or other conflicts in oil producing areas or elsewhere, there could be a reduction in the availability of jet fuel or significant increases in costs to our business, as well as to the entire aviation industry, which in turn would adversely affect our business and results of operations. While we do not currently anticipate a significant reduction in fuel availability, dependency on foreign imports of crude oil and the impacts resulting from Russian military actions in Ukraine and possibility of changes in government policy on jet fuel production, transportation and marketing make it impossible to predict the future availability of jet fuel. As a result, any increases in these prices or decrease in the availability of fuel may adversely affect our profitability and competitiveness.

We are susceptible to counter party risk in our agreements with our customers and have been adversely affected by the loss of certain key customers and the inability of such key customers to pay amounts due to us.

Due to the COVID-19 pandemic, two of the Company’s four key customers at our Ney York Heliport were unable to sustain their business and ceased operating in 2020. Their receivable balances at December 31, 2020, totaling approximately $208,000, have been deemed uncollectable by the Company. The loss of these two key customers has adversely affected our business and results of operation. In 2021, our remaining two key customers continued to operate but at substantially reduced levels of operation. For the fiscal year ended December 31, 2021, these two key customers represented approximately $180,000, or 58.9% of the balance of accounts receivable. The Company has a security deposit in place in connection with both of these receivables. If our remaining key customers continue to experience reduced operations, they may also cease operating which would materially and adversely impact our business and results of operations.

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

All of our business is conducted and reliant on the New York and our leaseHeliport. Any disruption in business at the New York Heliport or additional restrictions imposed on the operations of the Garden City, Kansas facilities.

A substantial portionNew York Heliport by the NYCEDC could adversely impact our results of operations. Additionally, our business depends on our existing material agreements including ourus remaining as the operator of the New York Heliport. Our current Concession Agreement with the City of New York and our lease of facilitiesexpires April 30, 2023.

On February 15, 2023, it was reported in Garden City, Kansas. If we were to lose these agreements, or if these agreements expired without renewal or extension, we may be unable to operate our business in our current geographic markets. Should we lose or fail to extend these agreements, there is no guaranteethe public record that we could enter into new agreements with similar terms or into new agreements at all. If we were to enter into material agreements with less favorable terms or if we were unable to enter into new agreements, our business and results of operationsNYCEDC would be materially and adversely affected.

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

Under the Air Tour Agreement, we cannot allow our tenant operators to conduct tourist flights from the Downtown Manhattan Heliport on Sundays. We were also required to ensure that our tenant operators reduced the total allowable number of tourist flights from 2015 levels by 20 percent beginning June 1, 2016, by 40 percent beginning October 1, 2016 and by 50 percent beginning January 1, 2017. Additionally, since June 1, 2016, we have been required to provide monthly written reports to the NYCEDC and the New York City Council detailing the number of tourist flights conducted outoperator of the Downtown Manhattan Heliport compared to 2015 levels, as well as informationthe Franchise and Concession Review Committee meeting on any tour flightMarch 3, 2023. The item was subsequently pulled off the agenda, with NYCEDC announcing on April 7, 2023 that flies over land or straysthe previous Request for Proposals ("RFP") had been cancelled and that it is their intention to put out a new RFP in 2023. Saker's current Concession Agreement terminates on April 30, 2023. The Company has been notified by NYCEDC that the Company will receive a new permit to operate the heliport from agreed upon routes. These provisions ofMay 1, 2023 until a new RFP process is concluded. The Company is currently working with NYCEDC on the Air Tour Agreement have,new agreement and may continueexpects to have an adverse effect on our business and results of operations.

The FBO segment offile a Form 8-K once the aviation services industry in which we operatenew agreement is fiercely competitive.

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

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

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

We must maintain and add key management and other personnel.

Our future success is heavily dependent on the performance of our managers. Our growth and future success depends, in large part, on the continued contributions of management and our ability to retain management. Our success depends to a significant extent upon the continued service of Ron Ricciardi, our President and Chief Executive Officer. Beginning on December 24, 2020 and continuing through the date of this report, Mr. Ricciardi remains on a temporary leave of absence to address health issues unrelated to the COVID-19 pandemic. As previously disclosed, effective March 26, 2021, Samuel Goldstein, one of our directors, has been appointed to serve as our acting principal executive officer. There can be no assurances that Mr. Ricciardi will be able to continue to serve as our Chief Executive Officer. Our results of operations and financial condition may be impacted by Mr. Ricciardi’s leave of absence or the loss of Mr. Goldstein.management.

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

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

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

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

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

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

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

Risks related to our securities:

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

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

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

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

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

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

Our management team currently has the ability to influence stockholder votes.

As of December 31, 2021,2022, our executive officers, directors and their family members and associates, collectively, are entitled to vote 349,004284,876 shares, or 35.8%29% of the 975,074976,330 shares of our outstanding shares of common stock. Accordingly, and because there is no cumulative voting for directors, our executive officers and directors are currently in a position to influence the election of all of our Board of Directors. The management of our company is controlled by our Board of Directors, which is currently comprised of fourtwo independent directors, one non-independent director, and one executive officer/director.

General risk factors:

Potential additional financings, the granting of additional stock options and any anti-dilution provisions in potential future derivative securities could further dilute our existing stockholders.

As of December 31, 2021,2022, there were 975,074976,330 shares of our common stock outstanding. If all of our outstanding options were exercised, there would be 1,035,0681,043,824 shares outstanding, an increase of approximately 6.1%6.9%. Any further issuances due to additional equity financings, or the granting of additional options could further dilute our existing stockholders, which could cause the value of our common stock to decline.

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

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

Not applicable.

As of March 31, 2022, we lease office2023, the Company operates the New York Heliport pursuant to the Concession Agreement and has no leased offices or hangar space at the following locations:space.

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

From time-to-time, we may be a party to, or otherwise involved in, legal proceedings arising in the ordinary course of business. As of the date of this Report, we are not aware of any proceedings, threatened or pending, against us which, if determined adversely, would have a material effect on our business, results of operations, cash flows or financial position.

Not applicable.

PART II

Market Information

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

The following table sets forth the high and low closing sale prices for common stock as reported on the OTCQB each full quarterly period within for the two most recent fiscal years.

Stock Repurchases

On November 17, 2021, the Company agreed to purchase all of the shares of the Company’s common stock owned by the Company’s former President and Chief Executive Officer, Mr. Ronald Ricciardi. The purchase price for the 53,789 shares was $204,399, or $3.80 a share, the previous day closing price of the Company’s stock. All of Mr. Ricciardi’s shares were canceled by the Company.

Holders

As of March 31, 2022,2023, there were approximately 237156 holders of record of our common stock. This number does not include beneficial owners of the common stock whose shares are held in the names of various broker-dealers, clearing agencies, banks and other fiduciaries.

Dividends

On September 30, 2019, the Company announced that its Board of Directors had declared a special cash dividend of $0.50 per share (the “Dividend”). The Dividend was paid in equal quarterly installments of $0.125 per share beginning on November 1, 2019, with the final dividend paid on August 13, 2020. The declaration and payment of any future dividend will be at the sole discretion of the Board of Directors.

Not applicable.

Forward-looking Statements

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

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

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

Overview

Saker Aviation Services, Inc. is a Nevada corporation. Our common stock, $0.03 par value per share (the “common stock”), is quoted on the OTCQB Marketplace (“OTCQB”) under the symbol “SKAS”. Through our 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”), and as a provider of aircraft maintenance and repair services (“MRO”). FBOs provide ground-based services, such as fueling and aircraft storage for general aviation, commercial and military aircraft, and other miscellaneous services.heliport.

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

Our business activities are carried out as the operator of the Downtown Manhattan (New York)New York Heliport and until October 31, 2022 as an FBO and MRO at the Garden City (Kansas) Regional Airport.

The On October 31, 2022, the Garden City facility became part of our company as a result of our acquisition offacilities were sold and we no longer maintain an FBO or MRO at the FBO assets of Central Plains Aviation, Inc. in March 2005 and of Aircraft Services, Inc. in October 2016.Garden City (Kansas) Regional Airport.

Our business activities at the Downtown Manhattan (New York)New York Heliport facility (the “Heliport”) commenced in November 2008 when we were awarded the Concession Agreement by the City of New York to operate the New York Heliport, which we assigned to our subsidiary, FirstFlight Heliports, LLC d/b/a Saker Aviation Services (“FFH”Services. On February 15, 2023, it was reported in the public record that NYCEDC would be bringing a new Concession Agreement with the Company as the operator of the Downtown Manhattan Heliport to the Franchise and Concession Review Committee meeting on March 3, 2023. The item was subsequently pulled off the agenda, with NYCEDC announcing on April 7, 2023 that the previous Request for Proposals ("RFP"). had been cancelled and that it is their intention to put out a new RFP in 2023. Saker's current Concession Agreement terminates on April 30, 2023. The Company has been notified by NYCEDC that the Company will receive a new permit to operate the heliport from May 1, 2023 until a new RFP process is concluded. The Company is currently working with NYCEDC on the new agreement and expects to file a Form 8-K once the new agreement is finalized.

Throughout 2020 and 2021, theThe COVID-19 pandemic has impacted the global and United States economies. Federal, state, and local governments implemented certain travel restrictions, “stay-at-home” orders, and social distancing initiatives which negatively impacted our operations and those of our customers. As a result of the COVID-19 pandemic, on March 17, 2020 all sightseeing tour operations at the Downtown ManhattanNew York Heliport ceased due to a drop in demand.ceased. On July 20, 2020, New York City started Phase 4 of the city’s reopening. Sightseeing tour operators at the heliportNew York Heliport restarted operations under this phase.

For the period July 20, 2020 through the date of this report,March 31, 2022, sightseeing tour operators have experienced much lower demand. To date, the COVID-19 pandemic has had a less substantial impact on our operations at our Kansas FBO and MRO.

While we expect the COVID-19 pandemic to continue to adversely impact our business and operations, the full extent of the impact of the COVID-19 pandemic on our operational and financial performance will depend on future developments, including the duration and spread of the COVID-19 pandemic and related travel advisories and restrictions and the impact of the COVID-19 pandemic on overall demand for air travel.tours as compared to pre-pandemic levels of activity. Beginning in April 2022, sightseeing tour operators had an increase in activity and a much higher demand for tours.

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

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

Summary Financial Information

The summary financial data set forth below is derived from and should be read in conjunction with the consolidated financial statements, including the notes thereto, filed as part of this Annual Report on Form 10-K.

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

Comparison of Results for the Years Ended December 31, 20212022 and December 31, 2020.2021.

REVENUE AND RESULTS OF CONTINUING OPERATIONS

DISCONTINUED OPERATIONS

As disclosed in a Current Report on Form 8-K filed with the SEC on November 2, 2022, on October 31, 2022, the Company sold its subsidiary FBO and MRO operations of FBO Air-Garden City, Inc. (“GCK”) to Crosby Flying Services, LLC (”Crosby”) for an aggregate purchase price of $1.6 million. Crosby paid the purchase price on October 31, 2022 less $160,000 (the “Installment Payment”) which is to be paid in cash upon the first anniversary of the Closing Date. The Installment Payment is subject to GCK’s and the Company’s compliance with a Non-Compete agreement. GCK results of operations have been reported as discontinued operations in the Condensed Consolidated Statements of Operations for the year ended December 31, 2022 and 2021.

Comparison of Continuing Operations from the Twelve Months Ended December 31, 2022 and December 31, 2021.

REVENUE

Revenue from continuing operations increased by 53.5216.6 percent to $5,382,565$7,598,597 for the twelve months ended December 31, 20212022 as compared with corresponding prior-year period revenue of $3,506,268.$2,400,316.

For the twelve months ended December 31, 2021,2022, revenue from continuing operations associated with services and supply items increased by 44.9240.7 percent to approximately $2,200,000$5,747,000 as compared to approximately $1,500,000$1,687,000 in the twelve months ended December 31, 2020.2021. This increase was attributable to increased demand for services at our New York location in 20212022 compared to the prior year.year, which was negatively impacted by the COVID-19 pandemic.

For the twelve months ended December 31, 2021,2022, revenue from continuing operations associated with the sale of jet fuel aviation gasoline and related items increased by 47.6261.6 percent to approximately $2,900,000$1,582,000 as compared to approximately $1,950,000$438,000 in the twelve months ended December 31, 2020.2021. This increase was attributable to the higher volume of gallons and price of aviation gasolinejet fuel sold at both our New York and Kansas locationslocation in 20212022 compared to the prior year.year, which was negatively impacted by the COVID-19 pandemic.

For the twelve months ended December 31, 2021,2022, all other revenue increasedfrom continuing operations decreased by 473.22.4 percent to approximately $334,000$269,000 as compared to approximately $58,000$276,000 in the twelve months ended December 31, 2020. This increase was attributable to an increase in non-aeronautical revenue generated at our New York location compared to last year.2021.

GROSS PROFIT

Total gross profit increased 160.3152.8 percent to $2,553,625$4,613,317 in the twelve months ended December 31, 20212022 as compared to $980,928$1,824,954 in the twelve months ended December 31, 2020.2021. Gross margin was 47.460.7 percent for the twelve months ended December 31, 20212022 as compared to 28.076.0 percent for the same period in 2020.2021. Gross profit for the year ended December 31, 2021 was positively impacted by Employee Retention Tax Credits (“ERTC”) due the Company under the CARES Act. These credits were recorded in the second and third quarters of 2021 and offset operating payroll costs by approximately $69,000.2021. The increase in gross profit is also related to higher levels of activity at both our New York and Kansas locationslocation in 20212022 as compared to the prior year. The increasedecrease in gross margin is related to the higher levelscost of revenue fromjet fuel and higher costs associated with services and supplies which generally carry a higher overall gross margin, in 20212022 as compared to the prior year.

OPERATING EXPENSE

Selling, General and Administrative

Total selling, general and administrative expenses (“SG&A”) were $1,909,132$3,880,902 in the twelve months ended December 31, 2021, a decrease2022, an increase of $563,071,$2,496,494, or 22.8180.3 percent, as compared to the same period in 2020.2021.

SG&A associated with our FBONew York operations were approximately $1,438,000$3,329,000 in the twelve months ended December 31, 2021, a decrease2022, an increase of approximately $427,000,$2,416,000, or 22.9264.6 percent, as compared to the twelve months ended December 31, 2020.2021. SG&A associated with our FBONew York operations, as a percentage of revenue, was 26.743.8 percent for the twelve months ended December 31, 2021,2022, as compared with 53.238.0 percent in the corresponding prior year period. The reductionincrease in SG&A was primarily attributable to a reductionincreased fees due under the Company’s management agreement and fees due the NYCEDC in expenses in 2020 due to the COVID-19 pandemic as2022 compared to the same periodprior year due to pre-pandemic levels of activity beginning in 2021 as well as ERTC due the Company under the CARES Act. These credits of approximately $154,000 offset SG&A payroll expenses in 2021.April, 2022.

Corporate SG&A was approximately $471,000$552,000 for the twelve months ended December 31, 2021,2022, representing a decreasean increase of approximately $136,000$81,000, or 17.2 percent, as compared with the corresponding prior year period. The decreaseincrease in Corporate SG&A on a year-over-year basis was largely attributable to a non-recurring write-off of miscellaneous receivablesexpenses in the second quarter of 2020.2022.

OPERATING INCOME (LOSS)

Operating income for the year ended December 31, 20212022 was $644,494$732,414 as compared to operating lossincome of $(1,491,276)$440,546 in the year ended December 31, 2020.2021. The increase in operating income on a year-over-year basis was driven by the factors described above.

Depreciation and Amortization

Depreciation and amortization was approximately $129,000$100,089 and $119,000$128,990 for the twelve months ended December 31, 2022 and 2021, and 2020, respectively. The decrease in depreciation expense was attributable to assets becoming fully depreciated in 2022.

Interest Income and Expense

Interest income was $3,780$3,302 and $18,109$3,780 for the twelve months ended December 31, 20212022 and 2020,2021, respectively. Interest expense for the year ended December 31, 20212022 was $24,823,$17,979, as compared to $24,025$24,823 in the same period in 2020.2021. Interest expense in both years is included in gain (loss) from discontinued operations. The decrease in interest incomeexpense on a year-over-year basis was due primarily to interest income recordedthe repayment of notes payable in 2020connection with the sale of our Kansas operation on a receivable that was no longer recorded in 2021October 31, 2022.

Impairment of Goodwill and Other Intangibles

We had $0 and $750,000 of goodwill at December 31, 2022 and 2021, and 2020.respectively. The Company’s goodwill was included in the sale of the Company’s Kansas location on October 31, 2022.

Income Tax Expense (Benefit)

Income tax expense for the twelve months ended December 31, 20212022 was approximately $202,000$300,000, as compared to income tax benefit of $(431,000)$150,000 in the same period in 2020.2021. The increase in income tax expense is attributable to higher net income in the twelve months ended December 31, 20212022 as compared to a net loss in the same period in 2020.2021.

Net Income (Loss) Per Share

Net income for the twelve months ended December 31, 20212022 was $726,184$1,246,621 as compared to net lossincome of $(1,748,928)$726,184 in the twelve months ended December 31, 2020.2021. The increase in net income was attributable to higher revenue at our New York location as well as an increase in other income in 2022 as compared to 2021.

Basic and diluted net income per share for the twelve months ended December 31, 20212022 was $0.71$1.28 as compared to basic net lossincome per share of ($1.71)$0.71 in 2020.2021. Diluted net income per share for the twelve months ended December 31, 2022 was $1.26 as compared to diluted net income per share of $0.71 in 2021.

Liquidity and Capital Resources

As of December 31, 2021,2022, we had cash and restricted cash of $2,446,906$5,977,157 and a working capital surplus of $3,442,031.$5,739,663. We generated revenue from continuing operations of $5,382,565$7,598,597 and had net income of $726,184$1,246,621 for the year ended December 31, 20212022. For the year ended December 31, 2021,2022, cash flows included net cash provided by operating activities of $813,751,$2,435,018, net cash used inprovided by investing activities of $81,544,$1,201,853, and net cash used in financing activities of $184,383.$106,620.

As disclosed in a Current Report on Form 8-K filed on March 21, 2018 with the Securities and Exchange Commission (the “SEC”),SEC, on March 15, 2018 the Company entered into a loan agreement (the “Loan Agreement”) with Key Bank National Association (the “Bank”). The Loan Agreement contains three components: (i) a $2,500,000 acquisition line of credit (the “Key Bank Acquisition Note”); (ii) a $1,000,000 revolving line of credit (the “Key Bank Revolver Note”); and (iii) a $338,481 term loan (the “Key Bank Term Note”). There are currently no amounts outstanding under the Key Bank Term Note.

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

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

On October 11, 2018, and as subsequently amended, the Company entered into a new loan agreement with the Bank (as so amended, the “Change of Terms Agreement”) which modified the original terms of the Key Bank Acquisition Note. Under the Change of Terms Agreement, the Company could have continued to, at the discretion of the Bank, borrow up to an aggregate amount of $2,500,000 through September 1, 2021 (the “Maturity Date”), to be used for the Company’s acquisition of one or more business entities. The Change of Terms Agreement required the Company to make consecutive monthly payments of interest on any outstanding principal calculated at a rate per annum equal to 4.25% and was secured by substantially all of the Company’s assets. The entire principal balance, plus all accrued interest, was due in full on the Maturity Date. The Bank notified the Company of its decision to discontinue the Key Bank Acquisition Note, effective June 30, 2021. There arewere no amounts due under the ChangesKey Bank Acquisition Note as of Terms Agreement.the date it was discontinued. All amounts due under the Key Bank Term Note have been repaid.

The Key Bank Revolver Note, at the discretion of the Bank, provides for the Company to borrow up to $1,000,000 for working capital and general corporate purposes. This revolving line of credit is a demand note with no stated maturity date. Borrowings under the Key Bank Revolver Note will bear interest at a rate per annum equal to one-day LIBOR (adjusted daily)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. As of December 31, 2021, thereThere were no amounts due under the Key Bank Revolver Note.Note at December 31, 2022 or 2021.

On August 14, 2020, the Company was granted a loan from the Bank (the “Loan”) in the amount of $304,833, pursuant to the Paycheck Protection Program (PPP) under Division, Title I of the CARES Act, which was enacted March 27, 2020. The Loan, which was in the form of a note dated August 14, 2020, was to mature in August 2025 and bore interest at a rate of 1% per annum and was payable in monthly installments commencing on, or before, October 31, 2021 if not forgiven and legally released. At December 31, 2020, in accordance with FASB ASC 470, Debt, and ASC 405-20, Liabilities – Extinguishment of Liabilities, the Company recorded the cash inflow from the Loan as a liability, and cash flows from financing, pending legal release from the obligation by the U.S. Small Business Administration (“S.B.A.”). The Company used the Loan proceeds for eligible expenses during the covered period and the Loan was forgiven and legally released by the S.B.A. in full in the second quarter of 2021. The Company recorded the forgiveness of the Loan as a gain on extinguishment of debt – PPP Loan.Loan in 2021.

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 ManhattanNew York Heliport (the “Concession Agreement”). Pursuant to the terms of the Concession Agreement, the Company must pay the greater of 18% of the first $5,000,000 in any program year based on cash collected (“Gross Receipts”) and 25% of Gross Receipts in excess of $5,000,000, or minimum annual guaranteed payments.

As disclosed in a Current Report on Form 8-K filed with the SEC on February 5, 2016, the Company and the New York City Economic Development Corporation (the “NYCEDC”) announced new measures to reduce helicopter noise and impacts across New York City (the “Air Tour Agreement”). Under the Air Tour Agreement, the Company has not been allowed to permit its tenant operators to conduct tourist flights from the Downtown ManhattanNew York Heliport on Sundays since April 1, 2016. The Company was also required to ensure that its tenant operators reduce the total allowable number of tourist flights from 2015 levels by 20 percent beginning June 1, 2016, by 40 percent beginning October 1, 2016 and by 50 percent beginning January 1, 2017. The Air Tour Agreement also provided for the minimum annual guarantee payments the Company is required to pay to the City of New York under the Concession Agreement be reduced by 50%, effective January 1, 2017. Additionally, since June 1, 2016, the Company has been required to provide monthly written reports to the NYCEDC and the New York City Council detailing the number of tourist flights conducted out of the Downtown ManhattanNew York Heliport compared to 2015 levels, as well as information on any tour flight that flies over land and/or strays from agreed upon routes. The Air Tour Agreement also extended the Concession Agreement for 30 months, resulting in a new expiration date of April 30, 2021 and gave the City of New York two one-year options to extend the term of the Concession Agreement. The term of the Concession Agreement was subsequently extended by the City through April 30, 2023 by the City’s exercise of both their two one-year option renewals.

The reductions under the Air Tour Agreement have negatively impacted the Company’s business and financial results as well as those of its management company at the New York Heliport, Empire Aviation which, as previously disclosed, is owned by two children and a grandchild of a former officer and director of the Company.Aviation. The Company incurred management fees with Empire Aviation of approximately $0$2,138,000 and $144,000$0 during the yearstwelve months ended December 31, 2022 and 2021, and 2020, respectively, which is recorded in selling, general and administrative expenses.respectively. Empire Aviation has notified the Company they believethat it believes additional fees are due under theirthe management agreement with the New York Heliport for both 2021 and 2020. If the Company is unable to come to an agreement with Empire Aviation regarding amounts due under the agreement, the Company could incur additional expense (See Note 15.as disclosed in the Company’s 2021 Annual Report on Form 10-K (Note 10. Contingent Liabilities). The Company and Empire Aviation had historically contributed to the Helicopter Tourism and Jobs Council (“HTJC”), an association that lobbies on behalf of the helicopter air tour industry, and which had engaged in discussions with the Mayor’s office.  The Company has suspended its contributions to HTJC in light of the pandemic. The Company’s former officer and director was also an active participant with HTJC, which is managed by the former officer and director’s grandson.

During the program year that began on May 1, 2020, the City of New York agreed, in recognition of the pandemic’s impact, that the Company could defer payment of minimum guaranteed payments. In April 2021, the City of New York waived the deferred fees through December 31, 2020. In May 2021, the City of New York waived the deferred fees through April 30, 2021 which coincided with the original expiration of the Concession Agreement as amended by the Air Tour Agreement. The Company has worked with the City of New York to address fees to be paid by the Company for the period May 1, 2021 through December 31, 2021. Concession fees in this Form 10-K have been accounted for based on the months abated in 2021 andIn March 2022, the City of New York’s acceptance ofYork agreed to accept 18% of monthly Gross Receipts in excess of $100,000 as Concession fees for the period May 2021 through December 2021. Due to the continued reduced activity at the Heliport,this period. In April 2022, the Company is actively working withagreed to resume paying the City of New York the total monthly amounts due under the Concession Agreement retro-active to address fees to be paid to the City of New York inJanuary 2022 and to continue paying fees due under the Concession Agreement through the remainder of the Air Tour Agreement. During the yearstwelve months ended December 31, 20212022 and 2020,2021, we incurred approximately $192,000$1,509,000 and $103,000$192,000 in concession fees, respectively, which are recorded in the cost of revenue.

On February 15, 2023, it was reported in the public record that NYCEDC would be bringing a new Concession Agreement with the Company as the operator of the Downtown Manhattan Heliport to the Franchise and Concession Review Committee meeting on March 3, 2023. The item was subsequently pulled off the agenda, with NYCEDC announcing on April 7, 2023 that the previous Request for Proposals ("RFP") had been cancelled and that it is their intention to put out a new RFP in 2023. Saker's current Concession Agreement terminates on April 30, 2023. The Company has been notified by NYCEDC that the Company will receive a new permit to operate the heliport from May 1, 2023 until a new RFP process is concluded. The Company is currently working with NYCEDC on the new agreement and expects to file a Form 8-K once the new agreement is finalized.

On April 20, 2018, the Company’s Kansas subsidiary entered into a purchase lease with Commerce Bank for a refueling truck (the “Truck Lease”). The Truck Lease commenced on May 1, 2018 and continues for 60 months with a monthly payment of $2,568 and an interest rate of LIBOR plus 416 basis points.5.5%. At the end of the Truck Lease, the Company’s subsidiary may purchase the vehicle for $1.00.

On January 15, 2019, the Company The refueling truck was issued an unsecured note by one of its customers at the Heliport. The note schedules payments of approximately $276,000 in receivables payable by such customer, had a maturity date of October 31, 2019, as amended, and carries a 7.5% rate of interest. The note payments were to be made in six monthly installments beginning May 31, 2019. The customer’s payments on the note have not met the installment plan and the Company was working on changes to the note when the customer filed for Chapter 11 Bankruptcy in October 2019. In February 2021, the bankruptcy court allowed the customer to convert from a Chapter 11 Bankruptcy to a Chapter 7 Liquidation. Under the Chapter 7 Liquidation, the note will now be treated as a general unsecured claim as opposed to a prioritized payment under the Chapter 11 Bankruptcy to cure the permit default. This change has substantially diminished the Company’s expectation to collect amounts due under the note. Therefore, the Company deemed unpaid principal and accrued interest of approximately $205,000 at December 31, 2020 as uncollectable. The $205,000 was written off to bad debt expenseincluded in the fourth quarter of 2020.

As disclosed in a Current Report on Form 8-K filed with the SEC on July 6, 2015, the Company entered into a stock purchase agreement, dated June 30, 2015, by and between the Company and Warren A. Peck, pursuant to which Mr. Peck purchased all of the capital stocksale of the Company’s wholly-ownedKansas subsidiary Phoenix Rising Aviation, Inc. The details ofand the agreement are described in such Current Report as well as in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, whichTruck Lease was filed with the SEC on April 11, 2016. The Company received $100,000 due under this agreement in September 2017 and an additional payment of $100,000 in September 2018. In 2019, the Company accepted the title to a Falcon 10 aircraft owned by Mr. Peck as satisfactionpaid in full of the remainder of the $270,000 stock purchase price. The Company intended to sell the aircraft and classified it as “Held For Sale” on the Company’s consolidated balance sheet at December 31, 2019. The Company has been unable to find a buyer due to a depressed market as well as a drop in demand for this type of aircraft. Without a market in which to sell the aircraft, the Company recorded an impairment charge in the quarter ended June 30, 2020 for the full carrying amount of the aircraft. The Company does not believe the aircraft has any value and, in December 2020, filed an application with the FAA Aircraft Registry to cancel the aircraft’s registry. closing.

On May 1, 2021, the Company’s Kansas subsidiary executed a promissory note for $76,000 with Avfuel Corporation (“Avfuel”) for the purchase of a Jet-A refueling truck (the “Truck Note”). The Truck Note requires six annual payments of $13,432.56 commencing April 30, 2022 with the entire balance of unpaid principal and interest due on, or before, April 30, 2028. Interest accrues at prime plus 3% on the outstanding principal amount. The Company is required to make prepayments against the Truck Note at the rate of $0.018 per gallon of fuel purchased under a fuel supply agreement between the Company and Avfuel.

As described throughout this Annual Report on Form 10-K, on March 17, 2020, all sightseeing tour operations at The Jet-A refueling truck was included in the Downtown Manhattan Heliport ceased as a resultsale of the COVID-19 pandemic. On July 20, 2020, New York City began Phase 4 ofCompany’s Kansas subsidiary and the city’s reopening. Sightseeing tours resumed under this phase. Sightseeing tour operators have experienced low demand and minimal activity since July 20, 2020, but sightseeing tour operators have seen an uptickTruck Note was paid in demand in the second quarter of 2021 through the date of this report. To mitigate this loss of revenue, we may need additional financing to continue operations through the issuance of equity or debt and any such financing will be dependent on general market conditions, which itself is subject to the effects of the COVID-19 pandemic. Although we have access to the Key Bank Revolver Note described above, we can make no assurance that that the Key Bank Revolver Note will be sufficient to fund our operations. Additionally, certain restrictions in the Key Bank Revolver Note may prohibit us from obtaining more attractive financing.full at closing.

During the twelve months ended December 31, 2021,2022, we had a net increase in cash of $547,824.$3,530,251. Our sources and uses of funds during this period were as follows:

Cash from Operating Activities

For the year ended December 31, 2022, net cash provided by operating activities was $1,712,556. This amount included an increase in operating cash related to net profit of $1,246,621 and additions for the following items: (i) depreciation, $100,089; (ii) stock based compensation, $71,995; (iii) accounts receivable, $60,866; (iv)inventories, $227,091; (v) income tax receivable, $573,679; (vi) prepaid expenses, $150,805; (vii) customer deposits, $123,755; (viii) accounts payable, $116,284; and (vii) accrued expenses, $192,689. The increase in cash provided by operating activities in 2022 was offset by the following item: (i) gain on sale of assets, $431,318 and life insurance proceeds (500,000). For the year ended December 31, 2021, net cash provided by operating activities was $813,751. This amount included an increase in operating cash related to net profit of $726,184 and additions for the following items: (i) depreciation, $128,990; (ii) stock based compensation, $34,392; (iii) extinguishment of debt, $304,833; (iv)income tax receivable, $261,922; (v) customer deposits, $2,512; (vi) accounts payable, $150,200; and (vii) accrued expenses, $185,266. The increase in cash provided by operating activities in 2021 was offset by the following items: (i) accounts receivable, trade, $43,308; (ii) inventories, $79,485; and (iii) prepaid expenses, $248,089.For the year ended December 31, 2020, net cash used in operating activities was $1,590,447. This amount included a decrease in operating cash related to net loss of $1,748,928 and additions for the following items: (i) depreciation, $119,039; (ii) bad debt, $396,000; (iii) impairment charge, $270,000; (iv) impairment of notes receivable, $205,730; (v) stock-based compensation expense, $74,659; (vi) deferred income taxes, $476,000; (vii) accounts receivable, trade, $19,944; and (viii) inventories, $17,585. The decrease in cash used in operating activities in 2020 was offset by the following items: (i) prepaid expenses and income tax receivable, $935,387; (ii) customer deposits, $49,517; (iii) accounts payable, $335,322; and (iv) accrued expenses, $100,250.

Cash from Investing Activities

For the year ended December 31, 2022, net cash provided by investing activities was $1,424,315. This amount included (i) net proceeds from sale of assets, $1,440,000; and (ii) the purchase of property and equipment, $15,685. For the year ended December 31, 2021, net cash used in investing activities was $81,544 for the purchases of property and equipment. For the year ended December 31, 2020, net cash used in investing activities was $4,913 for purchases of property and equipment.

Cash from Financing Activities

For the year ended December 31, 2022, net cash provided by financing activities was $393,380. This amount included proceeds from life insurance $500,000 offset by (i) repayment of notes payable, $67,045; and (ii) repayment of right of use lease payables, $39,575.For the year ended December 31, 2021, net cash used in financing activities was $184,383. This amount included an addition for the issuance of notes payable of $76,000 offset by the following items: (i) purchase and cancellation of common stock, $204,399; (ii) repayment of notes payable, $8,955; and (iii) repayment of right of use leases, $47,029.For the year ended December 31, 2020, net cash used in financing activities was $103,049. This amount included additions for the issuance of common stock of $16,196 and the issuance of notes payable of $304,833 offset by $383,909 to the payment of accrued dividends and $40,169 to the repayment of right of use leases.

Off-Balance Sheet Arrangements

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

Critical Accounting Estimates

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

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

Accounts Receivable

In 2020, the Company’s accounts receivable was comprised of four customers at our New York Heliport. Due to the COVID-19 pandemic, two of these customers were unable to sustain their business and ceased operating in 2020. Their receivable balances at December 31, 2020, totaling approximately $208,000, have been deemed uncollectable by the Company and have been written off to bad debt expense in the fourth quarter of 2020. The Company’s remaining two customers at our New York Heliport continue to operate, but at substantially reduced levels of operation. For the fiscal year ended December 31, 2020, these remaining two customers represented approximately $137,000, or 52.4% of the balance of accounts receivable. No customer represented more than 10% of revenue in 2020. The Company has a security deposit in place in connection with both of these receivables. Accounts receivable amounted to $678,045 at December 31, 2019.

In 2021, the Company’s accounts receivable was primarily comprised of its two customers at our New York Heliport. These customers continued to operate throughout 2021, but at substantially reduced levels of operation when compared to pre-pandemic levels. For the fiscal year ended December 31, 2021, these two customers represented approximately $180,000, or 59.8%, of the balance of accounts receivable. In addition, these two customers represented approximately 27.6% of our revenue in 2021. The Company has a security deposit in place in connection with both of these receivables.

In March 2022, one of the Company’s former customers resumed operations. In June 2022, this customer ceased operating. In June 2022, a new tenant began operating at our New York Heliport. Beginning in April 2022, the Company’s customers began operating at pre-pandemic levels which continued through the end of 2022. For the fiscal year ended December 31, 2022, the Company’s three customers represented approximately $184,000, or 75%, of the balance of accounts receivable.In addition, these three customers represented approximately 83 % of our revenue in 2022. The Company has a security deposit in place with this key customer.for each of these customers.

Goodwill and Intangible Assets

Goodwill and intangibles that are deemed to have indefinite lives are not amortized but, instead, are to be reviewed at each reporting period for impairment. We assessed potential impairment of goodwill using qualitative factors by considering various factors including macroeconomic conditions, industry and market conditions, cost factors, a sustained share price or market capitalization decrease and any reporting unit specific events. We performed an analysis of our goodwill and intangible assets at December 31, 2021 and 2020.2021. The Company had no goodwill recorded as of December 31, 2022 due to the sale of the Company’s Kansas location on October 31, 2022.

Income Taxes

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

Deferred tax assets are subject to a valuation allowance because it is more likely than not that certain of the deferred tax assets will not be realized in future periods. During 2020 we experienced a decrease in demand and minimal activity in our business. The extent of the impact of COVID-19 on our operational and financial performance cannot be predicted and will depend on future developments, including the duration and spread of the outbreak, related travel advisories and restrictions. Accordingly, we have established a valuation allowance on net deferred assets. We file income tax returns in the United States (federal) and in various state and local jurisdictions. In most instances, we are no longer subject to federal, state and local income tax examinations by tax authorities for years prior to 2018.2019.

Stock Based Compensation

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

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

Not applicable.

SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

See accompanying notes to consolidated financial statements.

SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES

See accompanying notes to consolidated financial statements.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

See accompanying notes to consolidated financial statements.

SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

FOR YEARS ENDED DECEMBER 31, 20212022 AND 20202021

See accompanying notes to consolidated financial statements.

See accompanying notes to consolidated financial statements.

NOTE 1 - Nature of Operations

Our business activities are carried out by FirstFlight Heliports, LLC d/b/a Saker Aviation Services Inc. (“Saker”FFH”), through its subsidiaries (collectively the “Company”), operates in the aviation services segment of the general aviation industry, in which it servesa wholly-owned subsidiary, as the operator of the New York Heliport via a heliportconcession agreement with the City of New York. FBO Air Garden City, Inc. d/b/a Saker Aviation Services (“GCK”), a wholly-owned subsidiary and, until October 31, 2022, provided services as a fixed base operationoperator (“FBO”), and as a provider of aircraft maintenance, repair and overhaul (“MRO”). FBOs provide ground-based services, such as fueling and aircraft storage for general aviation, commercial and military aircraft, and other miscellaneous services.

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

NOTE 2 – Liquidity and Material Agreements

As of December 31, 2021, 2022, we had cash and restricted cash of $2,446,906$5,977,157 and a working capital surplus of $3,442,031.$5,739,663. We generated revenue from continuing operations of $5,382,565$7,598,597 and had net income of $726,184$1,246,621 for the year ended December 31, 20212022. For the year ended December 31, 2021, 2022, cash flows included net cash provided by operating activities of $813,751,$1,712,556, net cash used inprovided by investing activities of $81,544,$1,424,315, and net cash used inprovided by financing activities of $184,383.$393,380.

As disclosed in a Current Report on Form 8-K8-K filed on March 21, 2018 with the Securities and Exchange Commission (the “SEC”),SEC, on March 15, 2018 the Company entered into a loan agreement (the “Loan Agreement”) with Key Bank National Association (the “Bank”). The Loan Agreement contains three components: (i) a $2,500,000 acquisition line of credit (the “Key Bank Acquisition Note”); (ii) a $1,000,000 revolving line of credit (the “Key Bank Revolver Note”); and (iii) a $338,481 term loan (the “Key Bank Term Note”). There are currently 0 amounts outstanding under the Key Bank Term Note.

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

At any time through and including the Conversion Date, at the Bank’s discretion, the Company had the opportunity to request that any loan made under the Key Bank Acquisition Note be converted into a term loan to be repaid in full, including accrued interest, by consecutive monthly payments over a 48 month amortization period beginning after the Conversion Date. For any loan that was not converted into a term loan on or before the Conversion Date, the Company would have been required to begin making monthly payments of principal and interest after the Conversion Date, over a 48 month amortization period, after which the remaining unpaid principal and accrued interest would have become due and payable. All loans under the Key Bank Acquisition Note would have, after the Conversion Date, accrued interest at a rate per annum equal to the Bank’s four year cost of funds rate plus 2.5%. As of the Conversion Date, there were no amounts due under the Key Bank Acquisition Note and 0 amounts had been converted to a term loan.

On October 11, 2018, and as subsequently amended, the Company entered into a new loan agreement with the Bank (as so amended, the “Change of Terms Agreement”) which modified the original terms of the Key Bank Acquisition Note. Under the Change of Terms Agreement, the Company could have continued to, at the discretion of the Bank, borrow up to an aggregate amount of $2,500,000 through September 1, 2021 (the “Maturity Date”), to be used for the Company’s acquisition of one or more business entities. The Change of Terms Agreement required the Company to make consecutive monthly payments of interest on any outstanding principal calculated at a rate per annum equal to 4.25% and was secured by substantially all of the Company’s assets. The entire principal balance, plus all accrued interest, was due in full on the Maturity Date. The Bank notified the Company of its decision to discontinue the Key Bank Acquisition Note, effective June 30, 2021. There are 0were no amounts due under the ChangesKey Bank Acquisition Note as of Terms Agreement.the date it was discontinued. All amounts due under the Key Bank Term Note have been repaid.

The Key Bank Revolver Note, at the discretion of the Bank, provides for the Company to borrow up to $1,000,000 for working capital and general corporate purposes. This revolving line of credit is a demand note with no stated maturity date. Borrowings under the Key Bank Revolver Note will bear interest at a rate per annum equal to one-day LIBOR (adjusted daily)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. As of December 31, 2021, thereThere were 0no amounts due under the Key Bank Revolver Note.

SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES

Notes To Consolidated Financial StatementsNote at December 31, 2022 or 2021.

On August 14, 2020, the Company was granted a loan from the Bank (the “Loan”) in the amount of $304,833, pursuant to the Paycheck Protection Program (PPP) under Division, Title I of the CARES Act, which was enacted March 27, 2020. The Loan, which was in the form of a note dated August 14, 2020,was to maturesmature in August 2025 and bore interest at a rate of 1% per annum and was payable in monthly installments commencing on, or before, October 31, 2021 if not forgiven and legally released. At December 31, 2020, in accordance with FASB ASC 470, Debt, and ASC 405-20,405-20, Liabilities – Extinguishment of Liabilities, the Company recorded the cash inflow from the Loan as a liability, and cash flows from financing, pending legal release from the obligation by the U.S. Small Business Administration (“S.B.A.”). The Company used the Loan proceeds for eligible expenses during the covered period and the Loan was forgiven and legally released by the S.B.A. in full in the second quarter of 2021. The Company recorded the forgiveness of the Loan as a gain on extinguishment of debt – PPP loan.Loan in 2021.

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 ManhattanNew York Heliport (the “Concession Agreement”). Pursuant to the terms of the Concession Agreement, the Company must pay the greater of 18% of the first $5,000,000 in any program year based on cash collected (“Gross Receipts”) and 25% of Gross Receipts in excess of $5,000,000,$5,000,000, or minimum annual guaranteed payments.

As disclosed in a Current Report on Form 8-K8-K filed with the SEC on February 5, 2016, the Company and the New York City Economic Development Corporation (the “NYCEDC”) announced new measures to reduce helicopter noise and impacts across New York City (the “Air Tour Agreement”). Under the Air Tour Agreement, the Company has not been allowed to permit its tenant operators to conduct tourist flights from the Downtown ManhattanNew York Heliport on Sundays since April 1, 2016. The Company was also required to ensure that its tenant operators reduce the total allowable number of tourist flights from 2015 levels by 20 percent beginning June 1, 2016, by 40 percent beginning October 1, 2016 and by 50 percent beginning January 1, 2017. The Air Tour Agreement also provided for the minimum annual guarantee payments the Company is required to pay to the City of New York under the Concession

Agreement be reduced by 50%, effective January 1, 2017. Additionally, since June 1, 2016, the Company has been required to provide monthly written reports to the NYCEDC and the New York City Council detailing the number of tourist flights conducted out of the Downtown ManhattanNew York Heliport compared to 2015 levels, as well as information on any tour flight that flies over land and/or strays from agreed upon routes. The Air Tour Agreement also extended the Concession Agreement for 30 months, resulting in a new expiration date of April 30, 2021 and gave the City of New York two one-year one-year options to extend the term of the Concession Agreement. The term of the Concession Agreement was subsequently extended by the City through April 30, 2023 by the City’s exercise of both their two one-yearone-year option renewals.

The reductions under the Air Tour Agreement have negatively impacted the Company’s business and financial results as well as those of its management company at the New York Heliport, Empire Aviation which, as previously disclosed, is owned by two children and a grandchild of a former officer and director of the Company.Aviation. The Company incurred management fees with Empire Aviation of approximately $0$2,138,000 and $144,000$0 during the yearstwelve months ended December 31, 2022 and 2021, and 2020, respectively, which is recorded in selling, general and administrative expenses.respectively. Empire Aviation has notified the Company they believethat it believes additional fees are due under theirthe management agreement with the New York Heliport for both 2021 and 2020. If the Company is unable to come to an agreement with Empire Aviation regarding amounts due under the agreement, the Company could incur additional expense (See Note 15.10. Contingent Liabilities). The Company and Empire Aviation had historically contributed to the Helicopter Tourism and Jobs Council (“HTJC”), an association that lobbies on behalf of the helicopter air tour industry, and which had engaged in discussions with the Mayor’s office.  The Company has suspended its contributions to HTJC in light of the pandemic. The Company’s former officer and director was also an active participant with HTJC, which is managed by the former officer and director’s grandson.

During the program year that began on May 1, 2020, the City of New York agreed, in recognition of the pandemic’s impact, that the Company could defer payment of minimum guaranteed payments. In April 2021, the City of New York waived the deferred fees through December 31, 2020. In May 2021, the City of New York waived the deferred fees through April 30, 2021 which coincided with the original expiration of the Concession Agreement as amended by the Air Tour Agreement. The Company has worked with the City of New York to address fees to be paid by the Company for the period May 1, 2021 through December 31, 2021. Concession fees in this Form 10-K have been accounted for based on the months abated in 2021 andIn March 2022, the City of New York’s acceptance ofYork agreed to accept 18% of monthly Gross Receipts in excess of $100,000 as Concession fees for the period May 2021 through December 2021. Due to the continued reduced activity at the Heliport,this period. In April 2022, the Company is actively working withagreed to resume paying the City of New York the total monthly amounts due under the Concession Agreement retro-active to addressJanuary 2022 and to continue paying fees to be paid todue under the City of New York in 2022 andConcession Agreement through the remainder of the Air Tour Agreement. During the yearstwelve months ended December 31, 2021 2022 and 2020,2021, we incurred approximately $192,000$1,509,000 and $103,000$192,000 in concession fees, respectively, which are recorded in the cost of revenue.

SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES

Notes To Consolidated Financial StatementsOn February 15, 2023, it was reported in the public record that NYCEDC would be bringing a new Concession Agreement with the Company as the operator of the Downtown Manhattan Heliport to the Franchise and Concession Review Committee meeting on March 3, 2023. The item was subsequently pulled off the agenda, with NYCEDC announcing on April 7, 2023 that the previous Request for Proposals ("RFP") had been cancelled and that it is their intention to put out a new RFP in 2023. Saker's current Concession Agreement terminates on April 30, 2023. The Company has been notified by NYCEDC that the Company will receive a new permit to operate the heliport from May 1, 2023 until a new RFP process is concluded. The Company is currently working with NYCEDC on the new agreement and expects to file a Form 8-K once the new agreement is finalized.

On April 20, 2018, the Company’s Kansas subsidiary entered into a purchase lease with Commerce Bank for a refueling truck (the “Truck Lease”). The Truck Lease commenced on May 1, 2018 and continues for 60 months with a monthly payment of $2,568 and an interest rate of LIBOR plus 416 basis points.5.5%. At the end of the Truck Lease, the Company’s subsidiary may purchase the vehicle for $1.00. The refueling truck was included in the sale of the Company’s Kansas subsidiary and the Truck Lease was paid in full at closing.

On January 15, 2019, the Company was issued an unsecured note by one of its customers at the Heliport. The note schedules payments of approximately $276,000 in receivables payable by such customer, had a maturity date of October 31, 2019, as amended, and carries a 7.5% rate of interest. The note payments were to be made in six monthly installments beginning May 31, 2019. The customer’s payments on the note have not met the installment plan and the Company was working on changes to the note when the customer filed for Chapter 11 Bankruptcy in October 2019. In February 2021, the bankruptcy court allowed the customer to convert from a Chapter 11 Bankruptcy to a Chapter 7 Liquidation. Under the Chapter 7 Liquidation, the note will now be treated as a general unsecured claim as opposed to a prioritized payment under the Chapter 11 Bankruptcy to cure the permit default. This change has substantially diminished the Company’s expectation to collect amounts due under the note. Therefore, the Company deemed unpaid principal and accrued interest of approximately $205,000 at December 31, 2020 as uncollectable. The $205,000 was written off to bad debt expense in the fourth quarter of 2020.

As disclosed in a Current Report on Form 8-K filed with the SEC on July 6, 2015, the Company entered into a stock purchase agreement, dated June 30, 2015, by and between the Company and Warren A. Peck, pursuant to which Mr. Peck purchased all of the capital stock of the Company’s wholly-owned subsidiary, Phoenix Rising Aviation, Inc. The details of the agreement are described in such Current Report as well as in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, which was filed with the SEC on April 11, 2016. The Company received $100,000 due under this agreement in September 2017 and an additional payment of $100,000 in September 2018. In 2019, the Company accepted the title to a Falcon 10 aircraft owned by Mr. Peck as satisfaction in full of the remainder of the $270,000 stock purchase price. The Company intended to sell the aircraft and classified it as “Held For Sale” on the Company’s consolidated balance sheet at December 31, 2019. The Company has been unable to find a buyer due to a depressed market as well as a drop in demand for this type of aircraft. Without a market in which to sell the aircraft, the Company recorded an impairment charge in the quarter ended June 30, 2020 for the full carrying amount of the aircraft. The Company does not believe the aircraft has any value and, in December 2020, filed an application with the FAA Aircraft Registry to cancel the aircraft’s registry.

On May 1, 2021, the Company’s Kansas subsidiary executed a promissory note for $76,000 with Avfuel Corporation (“Avfuel”) for the purchase of a Jet-A refueling truck (the “Truck Note”). The Truck Note requires 6six annual payments of $13,432.56 commencing April 30, 2022 with the entire balance of unpaid principal and interest due on, or before, April 30, 2028. Interest accrues at prime plus 3% on the outstanding principal amount. The Company is required to make prepayments against the Truck Note at the rate of $0.018 per gallon of fuel purchased under a fuel supply agreement between the Company and Avfuel.

As described throughout this Annual Report on Form 10-K, on March 17, 2020, all sightseeing tour operations at The Jet-A refueling truck was included in the Downtown Manhattan Heliport ceased as a resultsale of the COVID-19 pandemic. On July 20, 2020, New York City began Phase 4 ofCompany’s Kansas subsidiary and the city’s reopening. Sightseeing tours resumed under this phase. Sightseeing tour operators have experienced low demand and minimal activity since July 20, 2020, but sightseeing tour operators have seen an uptickTruck Note was paid in demand in the second quarter of 2021 through the date of this report. To mitigate this loss of revenue, we may need additional financing to continue operations through the issuance of equity or debt and any such financing will be dependent on general market conditions, which itself is subject to the effects of the COVID-19 pandemic. Although we have access to the Key Bank Revolver Note described above, we can make no assurance that that the Key Bank Revolver Note will be sufficient to fund our operations. Additionally, certain restrictions in the Key Bank Revolver Note may prohibit us from obtaining more attractive financing.full at closing.

NOTE 3 - Summary of Significant Accounting Policies

Principles of Consolidation

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

SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES

Notes To Consolidated Financial Statements

Use of Estimates

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

Cash and restricted cash

The Company maintains its cash with various financial institutions which often exceeds federally insured limits. The Company has not experienced any losses from maintaining cash accounts in excess of federally insured limits. As part of its cash management process, the Company periodically reviews the relative credit standing of these financial institutions. Amounts included in restricted cash are a deposit required by the Concession Agreement with NYEDC and aggregated $425,000 at December 31, 2021 2022 and 2020.2021.

Accounts Receivable and Revenue Concentration

In 2020,2021, the Company’s accounts receivable was primarily comprised of 4 customers at our New York Heliport. Due to the COVID-19 pandemic, 2 of these customers were unable to sustain their business and ceased operating in 2020. Their receivable balances at December 31, 2020, totaling approximately $208,000, have been deemed uncollectable by the Company and have been written off to bad debt expense in the fourth quarter of 2020. The Company’s remaining 2 customers continued to operate, but at substantially reduced levels of operation. For the fiscal year ended December 31, 2020, these remaining 2 customers represented approximately $137,000, or 52.4%, of the balance of accounts receivable. No customer represented more than 10% of revenue in 2020. The Company has a security deposit in place in connection with both of these receivables. Accounts receivable amounted to $678,045 at December 31, 2019.

In 2021, the Company’s accounts receivable was comprised of its 2two customers at our New York Heliport. These customers continued to operate throughout 2021, but at substantially reduced levels of operation when compared to pre-pandemic levels. For the fiscal year ended December 31, 2021, these 2two customers represented approximately $180,000, or 59.8%, of the balance of accounts receivable.In addition, these 2two customers represented approximately 27.6% of our revenue in 2021.

One of the Company’s former customers resumed operations at our New York Heliport from March 2022 through June 2022, when it ceased operations again. A new tenant began operating at our New York Heliport in June 2022. Beginning in April 2022, the Company’s customers began operating at pre-pandemic levels which continued through the end of 2022. For the fiscal year ended December 31, 2022, three customers represented approximately $184,000, or 75%, of the balance of accounts receivable.In addition, these three customers represented approximately 80 % of our revenue in 2022. The Company has a security deposit in place in connection with bothfor each of these receivables.In March 2022, one of the Company’s former customers resumed operations.The Company has a security deposit in place with this customer.

customers.

Inventories

Inventories consistInventory consists primarily of maintenance parts and aviation fuel and arewhich is stated at the lower of cost or net realizable valuevalve determined by the first-in, in first out method.

Property and Equipment

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

Goodwill

Goodwill that is deemed to have an indefinite life is not amortized but, instead, are to be reviewed at each reporting period for impairment. The Company assessed potential impairment of goodwill using qualitative factors by considering various factors including macroeconomic conditions, industry and market conditions, cost factors, a sustained share price or market capitalization decrease and any reporting unit specific events. The Company performed an analysis of its goodwill at December 31, 2021 and 2020and deemed 0no impairment necessary.

The Company’s goodwill was part of the Company’s sale if its Kansas subsidiary assets at a closing that occurred on October 31, 2022.

Leases

At December 31, 2021, and December 31, 2020, our consolidated balance sheets include a right of use asset of approximately $387,860 and $446,000, respectively, $387,000, a long-term lease liability of approximately $$328,000 and $377,000, respectively,, and a short-term liability of approximately $$46,000. The Company’s right of use assets and $43,000, respectively.

right of use lease liabilities were included in the sale of our Kansas location on October 31, 2022.

SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES

Notes To Consolidated Financial Statements

Revenue Recognition

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

Customer Deposits

Customer deposits consist of amounts that customers are required to remit in advance to the Company in order to secure payment for future purchases and services. Customer deposits amounted to $130,395approximately $204,000 and $81,000 at December 31, 2019.2022 and December 31, 2021, respectively.

Advertising

The Company expenses all advertising costs as incurred. Advertising expense for the years ended December 31, 2021 2022 and 20202021 was approximately $0 and $3,000, and $4,000, respectively.

The company had previously expended funds to advertise services at its Kansas location.

Income Taxes

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

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

Deferred tax assets are subject to a valuation allowance because it is more likely than not that certain of the deferred tax assets will not be realized in future periods due to the uncertainty of future taxable income and the lack thereof of taxable income in carry-back periods.income. The Company files income tax returns in the United States (federal) and in various state and local jurisdictions. In most instances, the Company is no longer subject to federal, state and local income tax examinations by tax authorities for years prior to 2018.2019.

Discontinue Operations

A component of the Company is classified as a discontinued operation when (i) the operations and cash flows of the component of the Company can be clearly distinguished and have been or will be eliminated from our ongoing operations; (ii) the component has either been disposed of or is classified as held for sale; and (iii) we will not have any significant continuing involvement in the operations of the component of the Company after the disposal transactions. Significant judgments are involved in determining whether a component meets the criteria for discontinued operations reporting and the period in which these criteria are met.

If a component of the Company is reported as a discontinued operation, the results of operations through the date of sale, including any gain or loss recognized on the disposition, are presented on a separate line of the Statements of Operations.

Fair Value of Financial Instruments

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

Net Income (Loss) Per Common Share

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

SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES

Notes To Consolidated Financial Statements

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

Stock-Based Compensation

Stock-based compensation expense for all share-based payment awards are based on the estimated grant-date fair value. The Company recognizes these compensation costs over the requisite service period of the award, which is generally the option vesting term. For each of the years ended December 31, 2021 2022 and 2020,2021, the Company incurred stock based compensation of $34,392$71,995 and $74,659,$34,392, respectively. Such amounts have been recorded as part of the Company’s selling, general and administrative expenses in the accompanying consolidated statements of operations. As of December 31, 2021, 2022, the unamortized fair value of the options totaled $45,995$76,000 and the weighted average remaining amortization period of the options approximated five years.

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

The fair value of each share-based payment award granted during the years ended December 31, 2021 2022 and 20202021 were estimated using the Black-Scholes option pricing model with the following weighted average fair values:

The weighted average fair value of the options on the date of grant,grants, using the fair value based methodology during the years ended December 31, 2022 and 2021, was $1.84 and 2020, was $0.74, and $1.14, respectively.

NOTE 4 – Inventories

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

Inventories consist of the following:

Included in fuel inventory are amounts held for third parties of $28,042 and $30,904 as of December 31, 2021 and 2020, respectively, with an offsetting liability included as part of accrued expenses.

SAKER AVIATION SERVICES, INC. AND SUBSIDIARIES

Notes To Consolidated Financial Statements

NOTE 5 – Property and Equipment, net

Property and equipment consist of the following:

Depreciation and amortization expense for the years ended December 31, 2021 2022 and 20202021 was approximately $129,000$100,089 and $119,000,$128,990, respectively.

NOTE 6 – Goodwill

The Company had $750,000 of goodwill at each of December 31, 2021 and 2020. The Company assessed potential impairment of goodwill using qualitative factors by considering various factors including macroeconomic conditions, industry and market conditions, cost factors, a sustained share price or market capitalization decrease and any reporting unit specific events. The Company performed an analysis of its goodwill at December 31, 2021 and 2020 and deemed 0 impairment necessary.