Saker Aviation Services 10QSB 2007 Q2 Quarterly report (small business)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-QSB

(Mark One)

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

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2007

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

For the Transition Period from _______________ to ________________

COMMISSION FILE NUMBER: 000-52593

FIRSTFLIGHT, INC.

(Exact name of Small Business Issuer as Specified in Its Charter)

Nevada	87-0617649
(State or Other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification No.)

236 Sing Sing Road

Horseheads, NY 14845

(Address of Principal Executive Offices)

(607) 739-7148

(Issuer’s telephone number)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.

Yes o No x

As of August 10, 2007, the Registrant had 36,582,987 shares of its Common Stock, $0.001 par value, issued and outstanding.

Transitional Small Business Disclosure Format

Yes o No x

FIRSTFLIGHT, INC. AND SUBSIDIARIES

Form 10-QSB

June 30, 2007

Index

PART I - FINANCIAL INFORMATION

	ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)		Page

		Balance Sheet as of June 30, 2007	1

		Statements of Operations for the Three and Six Months Ended June 30, 2007 and 2006	2

		Statements of Cash Flows for the Six Months Ended June 30, 2007 and 2006	3

		Notes to Financial Statements	5

	ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION		10

	ITEM 3. CONTROLS AND PROCEDURES		16

PART II - OTHER INFORMATION

	ITEM 1. LEGAL PROCEEDINGS		17

	ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		17

	ITEM 3. DEFAULTS UPON SENIOR SECURITIES		18

	ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS		18

	ITEM 5. OTHER INFORMATION		18

	ITEM 6. EXHIBITS		19

SIGNATURES			22

CERTIFICATIONS

FIRSTFLIGHT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

JUNE 30, 2007

(UNAUDITED)

ASSETS

CURRENT ASSETS
Cash and cash equivalents	$	1,590,449
Accounts receivable, net of allowance for
doubtful accounts of $51,094		5,175,229
Inventory		207,759
Note receivable		150,000
Prepaid expenses and other current assets		312,027
Total current assets		7,435,464

PROPERTY AND EQUIPMENT, net
of accumulated depreciation of $289,412		1,094,450


OTHER ASSETS
Deposits		29,800
Intangible assets - trade names		420,000
Other intangible assets, net of
accumulated amortization of $382,605		257,395
Goodwill		4,194,770
Total other assets		4,901,965
TOTAL ASSETS	$	13,431,879

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable	$	5,887,119
Customer deposits		283,454
Accrued expenses		648,502
Notes payable - current portion		120,353
Total current liabilities		6,939,428

LONG-TERM LIABILITIES
Notes payable - less current portion		291,920
Total liabilities		7,231,348

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
Preferred stock - $.001 par value; authorized 9,999,154;
none issued and outstanding		—
Common stock - $.001 par value; authorized 100,000,000;
36,582,987 issued and outstanding		36,583
Additional paid-in capital		18,571,087
Accumulated deficit		(12,407,139	)
TOTAL STOCKHOLDERS' EQUITY		6,200,531

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	13,431,879

See notes to condensed consolidated financial statements.

FIRSTFLIGHT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2007			2006			2007			2006

REVENUE	$	11,860,524		$	8,968,720		$	23,105,805		$	19,670,841
COST OF SALES		9,867,374			7,509,221			19,590,409			16,382,195
GROSS PROFIT		1,993,150			1,459,499			3,515,396			3,288,646

SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES (including $92,441 and $161,110; and $234,469 and $271,469 of stock based compensation for the three and six months ended June 30, 2007 and 2006, respectively)		1,867,266			2,271,655			3,619,338			4,296,537

OPERATING INCOME (LOSS)		125,884			(812,156	)		(103,942	)		(1,007,891	)

OTHER INCOME (EXPENSE)
OTHER INCOME (EXPENSE), net		—			155,700			57,055			155,700
GAIN (LOSS) ON SALE OF FIXED ASSETS		(4,050	)		—			32,756			—
INTEREST INCOME		15,308			4,641			32,681			10,093
INTEREST EXPENSE		(8,497	)		(197,027	)		(14,760	)		(373,493	)

TOTAL OTHER INCOME (EXPENSE)		2,761			(36,686	)		107,732			(207,700	)

NET INCOME (LOSS)	$	128,645		$	(848,842	)	$	3,790		$	(1,215,591	)

Deemed dividend to preferred stockholders:
Amortization of discount		—			(327,435	)		—			(1,056,348	)

Amortization of deferred financing costs		—			(141,804	)		—			(625,861	)

Preferred stock dividend		—			(63,395	)		—			(132,276	)

Net income (loss) applicable to common stockholders	$	128,645		$	(1,381,476	)	$	3,790		$	(3,030,076	)

Basic Net Income (Loss) Per Common Share
applicable to common stockholders	$	0.00		$	(0.09	)	$	0.00		$	(0.19	)
Diluted Net Income (Loss) Per Common Share
applicable to common stockholders	$	0.00		$	(0.09	)	$	0.00		$	(0.19	)
Weighted Average Number of Common Shares
Outstanding - Basic		36,587,661			16,236,834			36,587,661			15,816,809
Weighted Average Number of Common Shares
Outstanding - Diluted		36,587,661			16,236,834			36,587,661			15,816,809

See notes to condensed consolidated financial statements.

FIRSTFLIGHT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the Six Months Ended June 30,
	2007			2006
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	3,790		$	(1,215,591	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		195,290			206,338
Amortization of debt discount		—			240,049
Stock based compensation		161,110			271,469
Income from extinguishment of debt		(60,681	)		—
Gain on sale of fixed assets		(32,756	)		—
Changes in operating assets and liabilities:
Accounts receivable		(91,705	)		(618,731	)
Inventory		(14,346	)		(4,305	)
Prepaid expenses and other current assets		(31,105	)		74,319
Accounts payable		259,712			27,197
Customer deposits		(115,331	)		272,211
Accrued interest and dividends		—			68,963
Accrued expenses		144,889			285,138
TOTAL ADJUSTMENTS		415,077			822,648

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		418,867			(392,943	)

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property and equipment		298,000			—
Repayment of note receivable		—			200,000
Purchase of property and equipment		(165,240	)		(57,753	)
NET CASH PROVIDED BY INVESTING ACTIVITIES		132,760			142,247

CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of notes payable	(124,673)			(211,869)
Re-purchase of stock	(18,375)			—
NET CASH USED IN FINANCING ACTIVITIES		(143,048	)		(211,869	)

NET CHANGE IN CASH AND CASH EQUIVALENTS		408,579			(462,565	)

CASH AND CASH EQUIVALENTS - Beginning		1,181,870			1,330,450
CASH AND CASH EQUIVALENTS - Ending	$	1,590,449		$	867,885

See notes to condensed consolidated financial statements.

FIRSTFLIGHT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS

OF CASH FLOWS, CONTINUED

(UNAUDITED)

	For the Six Months Ended
	June 30,
	2007		2006
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the periods for:
Interest	$	14,760	$	79,926
Income taxes	$	525	$	—

Non-cash investing and financing activities:
Common stock issued to settle obligation	$	—	$	48,125
Cashless exercise of stock options	$	24	$	207
Redeemable convertible preferred stock converted to common stock	$	—	$	650,000
Purchase of equipment under capital lease	$	—	$	37,000
Expiration of put option	$	29,375	$	—

See notes to condensed consolidated financial statements.

FIRSTFLIGHT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2007

(UNAUDITED)

NOTE 1 - Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial statements and with the instructions to Form 10-QSB. Accordingly, they do not include all of the information and disclosures required for annual financial statements. These financial statements should be read in conjunction with the financial statements and related footnotes included in the FirstFlight, Inc. and Subsidiaries (collectively, the “Company”) Annual Report on Form 10-KSB for the year ended December 31, 2006 filed on April 17, 2007.

In the opinion of the Company’s management, all adjustments (consisting of normal recurring accruals) necessary to make the Company’s financial position as of June 30, 2007 and the results of operations and statements of cash flows for the periods shown not misleading have been included.

The results of operations for the three and six months ended June 30, 2007 are not necessarily indicative of the results to be expected for any full year or any other interim period.

NOTE 2 - Management’s Liquidity Plans

Until the three months ended June 30, 2007, the Company had incurred net losses. The Company generated revenue of $23,105,805 for the six months ended June 30, 2007. For the six months ended June 30, 2007, net cash provided by operating activities was $418,867 and net cash provided by investing activities was $132,760. As of June 30, 2007, the Company had cash and cash equivalents of $1,590,449 and had working capital of $496,036.

The Company has taken steps to reduce the level of expenditures for corporate operations by severing ties with two executives. These executives represented costs in 2006 of approximately $900,000, including severance and separation fees, and stock-based compensation. Additionally, the Company settled litigation in 2006 that, including legal and settlement related costs, represented approximately $150,000. The Company has also re-negotiated favorable terms with certain vendors that management believes will represent a savings of almost $400,000 versus levels of historical spending, in part driven by the hiring of a chief financial officer and the corresponding elimination of an outside accounting consultant.

The Company is continuing its financial and operational restructuring initiatives and will continue to implement its strategic business plan. During the six months ended June 30, 2007, the Company’s revenue has increased and selling, general and administrative expenses have decreased compared to the same period in the prior year. However, there is no assurance that the Company will be able to sustain this level of operations. Although the Company believes that it has sufficient liquidity to sustain its existing business for the next twelve months, there is no assurance that unforeseen circumstances will not have a material affect on the business that could require it to raise additional capital or take other measures to sustain operations in the event outside sources of capital are not available. The Company has not secured any commitments for new financing at this time nor can it provide any assurance that new capital (if needed) will be available to it on acceptable terms, if at all.

NOTE 3 - Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of FirstFlight, Inc. and its wholly-owned subsidiaries, FBO Air Wilkes-Barre, Inc. (“FBO Wilkes-Barre”), FBO Air Garden City, Inc. (“FBO Garden City”), Airborne, Inc. (“Airborne”), Margeson & Associates, Inc. (“Margeson”), Tech Aviation Flight School, Inc. (“TAFS”), and H24 Aviation Advisors, LLC (“H24”). All significant inter-company accounts and transactions have been eliminated in consolidation.

Net Income (Loss) Per Common Share

Basic net income (loss) per share is computed by dividing net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted net income (loss) 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 are excluded from the computation of diluted net income (loss) per share when their inclusion would be antidilutive.

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

FIRSTFLIGHT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2007

(UNAUDITED)

	For the three months ended June 30,		For the six months ended June 30,
	2007**	2006*	2007**	2006*
Weighted average common shares outstanding, basic	36,587,661	16,236,834	36,587,661	15,816,809
Common shares upon exercise of options	—	—	—	—
Common shares upon exercise of warrants	—	—	—	—
Conversion of preferred stock to common shares	—	—	—	—
Weighted average common shares outstanding, diluted	36,587,661	16,236,864	36,587,661	15,816,809

*Potential common shares of 18,320,000 for the three and six months ended June 30, 2006, were excluded from the computation of dilution earnings pre share, as their inclusion would be anti dilutive.

** Potential common shares of 12,827,121 for the three and six months ended June 30, 2007, were excluded from the computation of diluted earnings per share as their exercise prices were greater than the average market price of the common stock during that period.

Stock Based Compensation

Effective January 1, 2006, the Company adopted the fair value recognition provisions of “Share Based Payment” (“FAS 123R”), using the modified prospective transition method. Stock-based compensation expense for all share-based payment awards granted after January 1, 2006 is based on the grant-date fair value estimated in accordance with the original provisions of FAS 123R. The Company recognizes these compensation costs over the requisite service period of the award, which is generally the option vesting term. For the six months ended June 30, 2007 and 2006, the Company incurred stock based compensation of $161,110 and $271,469, respectively. As of June 30, 2007, the unamortized fair value of the options totaled $374,632. The weighted average remaining amortization period of these options is 1.25 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 awards granted during the period was estimated using the Black-Scholes option pricing model with the following weighted average fair values as follows:

		For the Six Months Ended June 30, 2007
Dividend yield		0%
Expected volatility		282%
Risk-free interest rate		4.56%
Expected lives		5 years

The weighted average fair value of the options on the date of grant, using the fair value based methodology during the six months ended June 30, 2007 was $0.38.

Inventory

Inventory consists primarily of maintenance parts and aviation fuel, which the Company dispenses to its customers. Inventory amounted to $207,759 as of June 30, 2007 and included $92,235 of inventory held for third parties.

Reclassifications

Certain accounts in the prior period financial statements have been reclassified for comparison purposes to conform with the presentation of the current period financial statements. These classifications have no effect on the previously reported loss.

Income Taxes

Although the Company has federal and state net operating losses available for income tax purposes that may be carried forward to offset future taxable income, the deferred tax assets are subject to a 100% valuation allowance because it is more likely than not that the deferred tax assets will not be realized in future periods. The Company’s ability to use its net operating loss carry forwards may be subject to an annual limitation in future periods pursuant to Section 382 of the Internal Revenue Code.

FIRSTFLIGHT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2007

(UNAUDITED)

Effective January 1, 2007, the Company adopted Financial Accounting Standards Board (“FASB”) Interpretation Number 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109,” (“FIN No. 48”), which prescribes a single, comprehensive model for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on its tax returns. Upon adoption of FIN No. 48, the Company recognized no changes in the liability for unrecognized tax benefits.

The Company records interest and penalties related to unrecognized tax benefits in income tax expense. As of January 1, 2007, the Company recognized no charges for interest and penalties related to unrecognized tax benefits in the Condensed Consolidated Balance Sheet.

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 2003.

NOTE 4 - Stockholders’ Equity

In March 2007, the Company repurchased 25,000 shares that had been issued in a settlement and for which the holder had a right to put the shares back to the Company at a cost of $18,375.

In June 2007, a put option expired that, if exercised, would have required the Company to repurchase 57,598 shares of the Common Stock at a cost of $29,375. This amount was reclassified to equity as of June 30, 2007.

Stock Options

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

	Number of Options			Weighted Average Exercise Price

Balance, January 1, 2007		2,310,000		$	0.86
Granted		425,000			0.38
Exercised		(25,000	)		0.01
Forfeited		(1,000,000	)		1.05
Balance, June 30, 2007		1,710,000		$	0.64

During the six months ended June 30, 2007, a director of the Company exercised an option to purchase 25,000 shares on a cashless basis and received 24,194 shares. In addition, the options of two former executives to purchase an aggregate of 1,000,000 shares were forfeited.

On April 19, 2007, under the terms of an employment agreement, FirstFlight granted an executive a stock option to purchase 250,000 shares of the Common Stock at $0.39 per share, the closing price of the Common Stock on March 30, 2007 (March 31 being a Saturday). The option vested immediately and is exercisable until March 31, 2012. This option is valued at $97,356 and is being amortized over the term of the employment agreement.

On April 19, 2007, FirstFlight granted to each of the seven non-employee directors a stock option to purchase 25,000 shares of the Common Stock, a total of 175,000 shares, at $0.36 per share, the closing price of the Common Stock on April 19, 2007. The options vest over one year and are exercisable until April 18, 2012. These options are valued at $62,909 and are being amortized over the vesting period.

FIRSTFLIGHT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2007

(UNAUDITED)

A summary of the Company’s stock options outstanding and exercisable at June 30, 2007 is presented in the table below:

Exercise Price	Outstanding		Weighted average remaining contractual life of options (in years)		Exercisable		Intrinsic Value
$0.36		175,000		4.75		—	$	—
$0.39		250,000		4.75		250,000	$	—
$0.40		250,000		4.25		250,000	$	—
$0.50		250,000		3.75		250,000	$	—
$0.51		160,000		1.75		160,000	$	—
$0.60		275,000		4.07		—	$	—
$0.64		100,000		3.50		100,000	$	—
$1.60		250,000		2.75		250,000	$	—

TOTALS		1,710,000				1,260,000	$	—

NOTE 5 - Related Parties

The firm of Wachtel & Masyr, LLP is corporate counsel to the Company. William B. Wachtel, FirstFlight’s Chairman of the Board, is a managing partner of this firm. During the six months ended June 30, 2007, the Company was billed for legal services of $54,322. At June 30, 2007, the Company has recorded in accounts payable an obligation for legal fees of $369,803 related to these legal services.

The charter division of the Company manages several aircraft owned by an entity in which Mr. Wachtel along with two other directors of FirstFlight, Thomas Iovino and Stephen B. Siegel, are members. During the six months ended June 30, 2007, the Company recorded direct revenue and expenses of $1,998,880 and $1,680,236, respectively, related to the Company’s management of these aircraft. At June 30, 2007 the Company had recorded in accounts receivable a balance of approximately $737,000 owed from this entity. During the six months ended June 30, 2006, the Company managed one aircraft for Mr. Wachtel and recorded direct revenue and expenses of $318,923 and $275,166, respectively, related to the management of aircraft.

On May 24, 2006, Airborne entered into an agreement to lease an aircraft from a company, of which one of its members is John H. Dow, a director and the current President and Chief Executive Officer of FirstFlight, and the other member is an employee of its charter segment. The terms of the lease provided for the payment of rent of $17,000 per month and a charge of $600 for each hour of aircraft use. The lease agreement further provided that this aircraft would be managed by FirstFlight through its charter segment, and through which the Company would retain 90% of the associated charter revenue. The Company made use of this aircraft for certain business travel needs and paid these expenses to the lessor. During the six months ended June 30, 2006, FirstFlight recorded no revenue and expenses of $17,000 in connection with the lease of this aircraft. The lease agreement was subsequently terminated in February 2007 and was replaced by the lease described in the following paragraph.

On April 26, 2007, Airborne entered into an agreement to lease an aircraft from a company, of which one of its members is John H. Dow, a director and the current President and Chief Executive Officer of FirstFlight, and the other member is an employee of its charter segment. The terms of the lease provide for the payment of rent of $20,000 per month and a charge of $500 for each hour of aircraft use. The lease agreement, which is for a period of one year, further provides that this aircraft will be managed by FirstFlight through its charter segment, and through which the Company will retain 90% of the associated charter revenue. The Company made use of this aircraft for certain business travel needs and paid these expenses to the lessor. During the six months ended June 30, 2007, the Company recorded revenue of approximately $182,000 and expenses of approximately $187,000 in conjunction with the lease of this aircraft.

NOTE 6 - Segment Data

The Company is an aviation services company with operations in the aircraft charter management (“Charter”), fixed base operations (an “FBO”), and aircraft maintenance (“Maintenance”) segments of the general aviation industry.

FIRSTFLIGHT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2007

(UNAUDITED)

Each of the Company’s three segments is operated under the FirstFlight brand name: the aircraft charter management segment is in the business of providing on-call passenger air transportation. These charter operations are implemented primarily through a fleet of managed aircraft - owned by another person or entity for which the Company provides regulatory and maintenance oversight while offering charter services. Within the FBO segment, the Company provides ground services such as the fueling and hangaring of aircraft. Within the maintenance segment, the Company offers maintenance and repair to aircraft owned or managed by general aviation aircraft operators.

The following table summarizes financial information about the Company’s business segments for the three and six months ended June 30, 2007 and 2006:


	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2007			2006			2007			2006
Revenue
Charter	$	9,328,931		$	6,895,707		$	18,838,835		$	15,509,906
FBO		1,734,713			1,396,717			2,892,226			2,755,163
Maintenance		796,880			676,296			1,374,744			1,405,772
Corporate		—			—			—			—
Consolidated Revenue		11,860,524			8,968,720			23,105,805			19,670,841
Income (Loss) from Operations
Charter	$	356,902		$	6,654		$	653,214		$	502,889
FBO		90,559			49,385			72,923			52,625
Maintenance		78,243			(54,504	)		(52,756	)		(82,153	)
Corporate		(399,820	)		(813,691	)		(777,323	)		(1,481,252	)
Consolidated Income (Loss) from Operations		125,884			(812,156	)		(103,942	)		(1,007,891	)
Depreciation and Amortization
Charter	$	56,432		$	75,870		$	118,179		$	122,759
FBO		36,281			21,309			70,501			69,218
Maintenance		3,352			14,361			6,610			14,361
Corporate		—			—			—			—
Consolidated Depreciation and Amortization		96,065			111,540			195,290			206,338
Interest Income (Expense) - Net
Charter	$	5,888		$	924		$	12,011		$	(702	)
FBO		(7,532	)		(31,384	)		(14,703	)		(32,898	)
Maintenance		—			—			—			—
Corporate		8,455			(161,926	)		20,613			(329,800	)
Consolidated Interest Income (Expense) - Net		6,811			(192,386	)		17,921			(363,400	)
Capital Expenditures
Charter	$	12,043		$	54,790		$	28,808		$	54,790
FBO		37,236			—			134,646			39,963
Maintenance		—			—			—			—
Corporate		—			—			1,786			—
Consolidated Capital Expenditures		49,279			54,790			165,240			94,753
Identifiable Assets
Charter	$	9,885,161		$	8,243,482		$	9,885,161		$	8,243,482
FBO		2,389,287			2,991,549			2,389,287			2,991,549
Maintenance		254,527			254,527			254,527			254,527
Corporate		902,904			179,495			902,904			179,495
Consolidated Identifiable Assets		13,431,879			11,669,053			13,431,879			11,669,053

Item 2 - Management’s Discussion and Analysis or Plan of Operation

Please read the following discussion together with the condensed financial statements and related notes appearing elsewhere in this Report. This Item 2 contains forward-looking statements that involve risks and uncertainties. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. Actual results may differ materially from those included in such forward-looking statements. Factors which could cause actual results to differ materially include those set forth at the end of this Item 2 of Part I under the heading "Cautionary Statement for Forward Looking Statements", as well as those discussed elsewhere in this Report.

OVERVIEW

FirstFlight, Inc. (“FirstFlight”) is a Nevada corporation, the Common Stock, $0.001 par value (the “Common Stock”), of which is publicly traded, and acts as a holding company for its operational subsidiaries (FirstFlight and its subsidiaries collectively, the "Company" or "we"). We are an aviation services company with operations in the aircraft charter management, fixed base operations (an “FBO”), and aircraft maintenance segments of the general aviation industry.

Activities by segment are carried out at the following locations:

Location	Charter	FBO	Maintenance
Elmira, New York	X	Fuel sales to managed aircraft only	X
Wilkes-Barre, Pennsylvania	X	X	X
Garden City, Kansas		X

The Elmira, New York facility became part of FirstFlight through the acquisition on September 23, 2005 of Airborne, Inc. (“Airborne”).

The Wilkes-Barre, Pennsylvania facility came as a result of the acquisition of Tech Aviation Service, Inc. (“Tech”) and the Garden City, Kansas facility as a result of the acquisition of the FBO assets of Central Plains Aviation, Inc. (“CPA”). Both transactions occurred on March 31, 2005.

On May 15, 2007, FirstFlight formed H24 Aviation Advisors, LLC (“H24”) to focus on the broker business in the charter segment.

As of June 30, 2007, the Company had cash and cash equivalents of $1,590,449 and had working capital of $496,036. The Company generated revenue of $11,860,524 and $23,105,805 for the three and six months ended June 30, 2007, respectively. Since inception, the Company has incurred, in the aggregate, net losses and net losses applicable to common stockholders of $5,925,157 and $12,511,531, respectively, for the period January 17, 2003 (date of inception) through June 30, 2007. For the six months ended June 30, 2007, net cash provided by operating activities was $418,867 and net cash provided by investing activities was $132,760.

RESULTS OF OPERATIONS

Comparison of the three and six months ended June 30, 2007 and 2006.

Revenue

We had overall revenue of $11,860,524 and $23,105,805 for the three and six months ended June 30, 2007, respectively compared to revenue of $8,968,720 and $19,670,841 for the three and six months ended June 30, 2006, respectively.

The charter segment generated $9,328,931 of total revenue for the three months ended June 30, 2007, the FBO segment generated $1,734,713 and the maintenance segment generated $796,880. For the three months ended June 30, 2006, the charter segment generated $6,895,707, the FBO segment generated $1,396,717 and the maintenance segment generated $676,296.

The charter segment generated $18,838,835 of total revenue for the six months ended June 30, 2007, the FBO segment generated $2,892,226 and the maintenance segment generated $1,374,744. For the six months ended June 30, 2006, the charter segment generated $15,509,906, the FBO segment generated $2,755,163 and the maintenance segment generated $1,405,772.

Please see below for a more detailed discussion of each segment’s revenue performance.

Cost of Revenue and Gross Profit

Overall cost of revenue for the three months ended June 30, 2007 was $9,867,374 for a gross profit of $1,993,150 or 16.8% of revenue. The charter segment generated 63.6% of the overall gross profit, the FBO segment generated 23.7% and the maintenance segment generated 12.7%. Overall cost of revenue for the three months ended June 30, 2006 was $7,509,221 for a gross profit of $1,459,499 or 16.3% of revenue. The charter segment generated 62.1% of the overall gross profit for this period, the FBO segment generated 30.1% and the maintenance segment generated 7.8%.

Overall cost of revenue for the six months ended June 30, 2007 was $19,590,409 for a gross profit of $3,515,396 or 15.2% of revenue. The charter segment generated 66.6% of the overall gross profit, the FBO segment generated 24.6% and the maintenance segment generated 8.8%. Overall cost of revenue for the six months ended June 30, 2006 was $16,382,195 for a gross profit of $3,288,646 or 16.7% of revenue. The charter segment generated 66.0% of the overall gross profit for this period, the FBO segment generated 25.3% and the maintenance segment generated 8.7%.

As discussed further below, gross profit in the six months ended June 30, 2006 was enhanced by the impact of commissions on the sale of aircraft. Excluding this item, gross profit percentage for that period would have been a more comparable 15.9%.

Please see below for a more detailed discussion of each segment’s cost of revenue and gross profit performance.

Operating Expenses

We had overall operating expenses of $1,867,266 and $3,619,338 for the three and six months ended June 30, 2007, respectively, including $96,065 and $195,290 in depreciation and amortization, respectively. In the three and six months ended June 30, 2006, we had overall operating expenses of $2,271,655 and $4,296,537, respectively, including $111,540 and $206,338 in depreciation and amortization, respectively.

Operating expenses attributable to the corporate operations amounted to $399,820 and $777,323 for the three and six months ended June 30, 2007 as compared to $813,691 and $1,481,252 for the three months ended June 30, 2006, respectively. Stock-based compensation was $92,441 and $161,110 of the respective totals in 2007, compared to $205,094 and $271,469 in 2006.

As described above, management has dedicated significant attention to cost- and infrastructure-related savings over the past several quarters. We believe that the results for the three months ended June 30, 2007 are indicative of the benefits of that focus, particularly in the corporate operations. The $703,929 (or 47.5%) reduction in corporate expenses for the six months ended June 30, 2007 is the direct result of the elimination of headcount and a decrease in professional expenses due to the addition of our chief financial officer in September 2006 and resultant limitation of expenses associated with an outsourced financial consultant. We anticipate that the benefits of both these areas will continue to register in future reporting periods throughout 2007.

Please see below for a discussion on each segment’s operating expenses.

Charter Segment

The charter segment of FirstFlight is engaged in aircraft charter management activities, providing on-call passenger air transportation. Charter services are provided through a fleet of managed aircraft for which we provide regulatory and maintenance oversight for the managed aircraft, while also offering charter services.

These aircraft are offered for charter when not in use by their owners. Fee revenue is generated from management of the aircraft - ensuring that the aircraft meets compliance with manufacturer and FAA regulations in addition to generating revenue from charter activity.

Of the $9,328,931 in charter segment revenue in the three months ended June 30, 2007, $6,883,930 (74.2%) was generated directly through the charter of aircraft. Aircraft management services produced $2,019,746 (21.8%) in revenue, and $339,207 (3.7%) was from the sale of fuel. During the three months ended June 30, 2006, the charter segment generated $6,895,707 in revenue with $4,885,520 (70.8%) being generated directly through the charter of aircraft; $1,578,309 (22.9%) related to aircraft management services; and $424,927 (6.2%) from the sale of fuel.

Of the $18,838,835 in charter segment revenue in the six months ended June 30, 2007, $14,201,659 (75.7%) was generated directly through the charter of aircraft. Aircraft management services produced $3,894,454 (20.8%) in revenue, and $620,545 (3.3%) was from the sale of fuel. During the six months ended June 30, 2006, the charter segment generated $15,509,906 in revenue with $11,277,177 (72.7%) being generated directly through the charter of aircraft; $3,339,562 (21.5%) related to aircraft management services; $702,898 (4.5%) from the sale of fuel; and $190,269 (1.2%) from aircraft sales commissions and the sale of miscellaneous items.

The increase in charter segment revenue of $2,386,594 or 34.6% in the three months ended June 30, 2007 and $3,250,158 or 21.0% in the six months ended June 30, 2007 as compared to both time periods in 2006 is attributable to a greater productivity of the collective fleet plus a more favorable mix of aircraft usage, in addition to a higher overall number of aircraft. We managed 17 aircraft for their owners at June 30, 2007 as compared to 16 at June 30, 2006.

Cost of revenue for the charter segment for the three months ended June 30, 2007 was $8,060,878, or 86.8% of revenue, for a gross profit of $1,221,422, or 13.2% of revenue. The largest dollar contributor to gross profit was the charter of aircraft under our management (54.6%), followed by management services (25.5%), fuel sales (9.2%), charter arranged outside our managed fleet (7.7%), and sale of miscellaneous items (3.0%). Cost of revenue for the three months ended June 30, 2006 was $5,989,603 for a gross profit of $906,103 or 13.1% of revenue. The largest dollar contributor to gross profit was the charter of aircraft under our management (54.5%), followed by management services (29.6%), fuel sales (11.2%), and charter arranged for trips outside our managed fleet (4.1%).

Cost of revenue for the charter segment for the six months ended June 30, 2007 was $16,494,676, or 87.9% of revenue, for a gross profit of $2,265,387, or 12.1% of revenue. The largest dollar contributor to gross profit was the charter of aircraft under our management (59.8%), followed by management services (23.0%), charter arranged outside our managed fleet (7.8%), fuel sales (7.6%), and sale of miscellaneous items (1.8%). Cost of revenue for the six months ended June 30, 2006 was $13,340,935 for a gross profit of $2,168,971 or 14.0% of revenue. The largest dollar contributor to gross profit was the charter of aircraft under our management (51.7%), followed by management services (24.8%), aircraft sales commissions and the sale of miscellaneous items (8.7%), fuel sales (8.1); and charter arranged for trips outside our managed fleet (6.6%).

The comparison of gross profit percentage in the six months ended June 30, 2007 versus 2006 was affected by the gross profit of approximately $190,000 in the 2006 period related to commissions on the sale of aircraft. These commissions, which occur periodically but not regularly, have no offset for cost of revenue and therefore make a significant contribution to gross profit in the period in which they occur. Excluding the effect of this item, the gross profit for the 2006 period would have been a more comparable 12.9%.

The charter segment represented $911,150 and $1,690,944 in operating expenses in the three and six months ended June 30, 2007, respectively versus $899,448 and $1,666,082 during the same periods in 2006.

FBO Segment

The FBO segment has its main facility in Wilkes-Barre, Pennsylvania, with an additional location in Garden City, Kansas and the management of a non-owned FBO facility in Niagara Falls, New York. The FBO segment provides services such as fueling and hangaring for general aviation, commercial and military aircraft along with the operation of a flight school in Pennsylvania and the management of a non-owned FBO facility.

During the three months ended June 30, 2007, of the $1,734,713 in FBO segment revenue, $1,626,099 (93.7%) was generated by the sale of jet fuel, aviation gasoline (“avgas”), and related items; $88,447 (5.1%) related to flight training, and $20,167 (1.2%) was generated by the management of non-owned FBO facilities and the sale of miscellaneous items. During the three months ended June 30, 2006, of the $1,396,717 in FBO segment revenue, $1,273,245 (91.2%) was generated by the sale of jet fuel, avgas and related items; $94,722 (6.8%) related to flight training, and $28,750 (2.1%) was generated by the management of non-owned FBO facilities and the sale of miscellaneous items.

During the six months ended June 30, 2007, of the $2,892,226 in FBO segment revenue, $2,674,294 (92.5%) was generated by the sale of jet fuel, aviation gasoline (“avgas”), and related items; $169,015 (5.8%) related to flight training, and $48,917 (1.7%) was generated by the management of non-owned FBO facilities and the sale of miscellaneous items. During the six months ended June 30, 2006, of the $2,755,163 in FBO segment revenue, $2,512,081 (91.2%) was generated by the sale of jet fuel, avgas and related items; $185,582 (6.7%) related to flight training, and $57,500 (2.1%) was generated by the management of non-owned FBO facilities and the sale of miscellaneous items.

As fuel is the primary driver of revenue in the FBO division, we anticipate a continued variability of pricing for jet fuel and avgas closely mirroring the crude oil marketplace. There has proven to be a fair amount of price elasticity in the segment of turbine-engine aircraft that require jet fuel. There has been, however, a direct relationship between the price of avgas, which is used in piston-engine aircraft, and the amount of leisure flying.

Cost of revenue for the FBO segment for the three months ended June 30, 2007 was $1,262,823, or 72.8% of revenue, for a gross profit of $471,890, or 27.2% of revenue. The largest contributor to gross profit was the sale of jet fuel, avgas, and related items, with a gross profit of $409,653 (86.8%), the operation of the flight school $42,070 (8.9%) and the contract management of non-owned FBO facilities $20,167 (4.3%). Cost of revenue for the three months ended June 30, 2006 was $957,528 for a gross profit of $439,190 or 31.4% of revenue.

Cost of revenue for the FBO segment for the six months ended June 30, 2007 was $2,028,628, or 70.1% of revenue, for a gross profit of $863,598, or 29.9% of revenue. The largest contributor to gross profit was the sale of jet fuel, avgas, and related items, with a gross profit of $730,635 (84.6%), the operation of the flight school $84,046 (9.7%) and the contract management of non-owned FBO facilities $48,917 (5.7%). Cost of revenue for the six months ended June 30, 2006 was $1,921,427 for a gross profit of $833,735 or 30.3% of revenue.

The FBO segment represented $381,332 and $790,675 in operating expenses in the three and six months ended June 30, 2007, respectively versus $389,805 and $781,110 during the same periods in 2006.

Maintenance Segment

The aircraft maintenance segment provides repair services for both managed and non-managed aircraft as well as specialty services on aircraft brakes and wheels.

We first reported maintenance as a separate segment in the quarter ended September 30, 2006. Management believes that this separate, dedicated emphasis will prompt a greater focus on operational efficiencies in the segment and, ultimately, lead to improved performance.

During the three months ended June 30, 2007, of the $796,880 in maintenance segment revenue, $330,862 (41.5%) was generated by labor charges; $327,299 (41.1%) was due to the sale of parts; and $115,824 (14.5%) was related to our brake and wheel shop. During the three months ended June 30, 2006, maintenance segment revenue was $676,296 with $357,607 (52.9%) related to labor charges; $192,097 (28.4%) due to the sale of parts; and $117,043 (17.3%) generated by our brake and wheel shop.

During the six months ended June 30, 2007, of the $1,374,744 in maintenance segment revenue, $503,779 (36.6%) was generated by labor charges; $503,110 (36.6%) was due to the sale of parts; and $333,424 (24.3%) was related to our brake and wheel shop. During the six months ended June 30, 2006, maintenance segment revenue was $1,405,772 with $632,664 (45.0%) related to labor charges; $448,299 (31.9%) due to the sale of parts; and $304,397 (21.7%) generated by our brake and wheel shop.

Cost of revenue for the maintenance segment for the three months ended June 30, 2007 was $543,672, or 68.2% of revenue, for a gross profit of $253,208, or 31.8% of revenue. The largest contributor to gross profit was charges for labor with a gross profit of $99,060 (39.1%), followed by the sale of parts $70,286 (27.8%), the brake and wheel operation $61,856 (24.4%), and sale of miscellaneous items $22,006 (8.7%). Cost of revenue for the three months ended June 30, 2006 was $562,091, for a gross profit of $114,206, or 16.9% of revenue.

Cost of revenue for the maintenance segment for the six months ended June 30, 2007 was $1,067,105, or 77.6% of revenue, for a gross profit of $307,640, or 22.4% of revenue. The largest contributor to gross profit was the brake and wheel operation with a gross profit of $127,204 (41.3%), followed by the sale of parts $104,385 (33.9%), charges for labor $43,653 (14.2%), and sale of miscellaneous items $32,398 (10.5%). Cost of revenue for the six months ended June 30, 2006 was $1,119,832, for a gross profit of $285,985, or 20.3% of revenue.

Management continues to focus efforts on improving the marginal, and overall, performance of the maintenance segment. Since the segment was first broken out in the three months ended September 30, 2006, an effort to fully comprehend its operating dynamics was undertaken. The effort has yielded new perspective on the metrics of good performance and led to an ongoing change to processes and procedures designed to remedy margin erosion. Management has invested in systems that, as they are fully implemented in coming quarters, believes will ultimately position the maintenance segment as a positive contributor at both the gross profit and operating income lines.

The maintenance segment represented $174,965 and $360,395 in operating expenses in the three and six months ended June 30, 2007, respectively versus $168,710 and $368,092 during the same periods in 2006.

Interest Income/Expense

Net interest income for the three and six months ended June 30, 2007 was $6,811 and $17,921, respectively, while net interest expense for the three and six months ended June 30, 2006 was $192,386 and $363,400, respectively. This year-over-year improvement is a direct result of the interest expense associated with the Senior Secured Notes that were repaid in September 2006.

Net Income/Loss Applicable to Common Stockholders

Net income applicable to common stockholders for the six months ended June 30, 2007 was $3,790 as compared to net loss applicable to common stockholders for the six months ended June 30, 2006 of $3,030,076, an improvement of $3,033,866. This change was largely driven by an improvement in the operating results of the Company and by the elimination of expenses related to preferred stock ($1,188,624 in dividend and discount amortization charges) and the recording of deferred financing costs ($625,861) in the six months ended June 30, 2006. These eliminations, in addition to the reduction of interest expense as noted above, were directly related to the conversion of preferred stock to common stock and repayment of senior debt in connection with the $5.025 million offering we completed in September 2006.

Basic net income/loss per share applicable to common stockholders is computed based on the weighted average number of shares of Common Stock outstanding during the periods presented. Common stock equivalents, consisting of options and warrants, were not included in the calculation of the diluted losses per share because their inclusion would have been anti-dilutive or in the calculation of net income per share because their exercise prices were greater than the average market price of the common stock during the period. Basic and diluted net income per share applicable to common stockholders for the six months ended June 30, 2007 was $0.00 and net loss per share applicable to common stockholders for the six months ended June 30, 2006 was $0.09.

LIQUIDITY AND CAPITAL RESOURCES

Until the three months ended June 30, 2007, the Company had incurred net losses. The Company generated revenue of $11,860,524 and $23,105,805 for the three and six months ended June 30, 2007, respectively. For the six months ended June 30, 2007, net cash provided by operating activities was $418,867 and net cash provided by investing activities was approximately $132,760. As of June 30, 2007, the Company had cash and cash equivalents of $1,590,449 and had working capital of $496,036.

During the six months ended June 30, 2007, the Company had a net increase in cash and cash equivalents of $408,579. The Company's sources and uses of funds during this period were as follows:

Cash Provided by (Used In) Operating Activities

For the six months ended June 30, 2007, net cash provided by operating activities was $418,867. The primary sources of cash for 2007 were from changes in operating assets and liabilities. For the six months ended June 30, 2006, net cash used in operating activities was $392,943. The primary decrease in cash for 2006 related to a large increase in accounts receivable that had not yet been converted to cash.

Cash Provided by Investing Activities

For the six months ended June 30, 2007, net cash provided by investing activities was $132,760 attributable to proceeds from the sale of assets of $298,000 offset by the purchase of equipment of $165,240. For the six months ended June 30, 2006, net cash provided by investing activities was $142,247 attributable to the proceeds from a note receivable of $200,000 offset by the purchase of equipment of $57,753.

Cash Used In Financing Activities

For the six months ended June 30, 2007, net cash used in financing activities was $143,048, consisting of the repayment of notes ($124,673) and the re-purchase of stock via a put option in connection with an obligation ($18,375). For the six months ended June 30, 2006, net cash used in financing activities was $211,869, consisting of the repayment of notes.

CRITICAL ACCOUNTING POLICIES & ESTIMATES

Stock Based Compensation

Effective January 1, 2006, the Company adopted the fair value recognition provisions of “Share Based Payment” (“FAS 123R”), using the modified prospective transition method. Stock-based compensation expense for all share-based payment awards granted after January 1, 2006 is based on the grant-date fair value estimated in accordance with the original provisions of FAS 123R. The Company recognizes these compensation costs over the requisite service period of the award, which is generally the option vesting term. For the six months ended June 30, 2007 and 2006, the Company incurred stock based compensation of $161,110 and $271,469, respectively. As of June 30, 2007, the unamortized fair value of the options totaled $374,632. The weighted average remining amortization period of these options is 1.25 years.

The fair value of each share-based payment awards granted during the period was estimated using the Black-Scholes option pricing model with the following weighted average fair values as follows:

		For the Six Months Ended June 30, 2007
Dividend yield		0%
Expected volatility		282%
Risk-free interest rate		4.56%
Expected lives		5 years

The weighted average fair value of the options on the date of grant, using the fair value based methodology during the six months ended June 30, 2007 was $0.38.

Income Taxes

Although we have federal and state net operating losses available for income tax purposes that may be carried forward to offset future taxable income, the deferred tax assets are subject to a 100% valuation allowance because it is more likely than not that the deferred tax assets will not be realized in future periods. The Company’s ability to use its net operating loss carry forwards may be subject to an annual limitation in future periods pursuant to Section 382 of the Internal Revenue Code.

Effective January 1, 2007, we adopted Financial Accounting Standards Board (“FASB”) Interpretation Number 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109,” (“FIN No. 48”), which prescribes a single, comprehensive model for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on its tax returns. Upon adoption of FIN No. 48, we recognized no changes in the liability for unrecognized tax benefits.

We record interest and penalties related to unrecognized tax benefits in income tax expense. As of January 1, 2007, we recognized no charges for interest and penalties related to unrecognized tax benefits in our Condensed Consolidated Balance Sheet.

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 2003.

CAUTIONARY STATEMENT FOR FORWARD-LOOKING STATEMENTS

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

§	our ability to secure the additional financing, if required, to execute our business plan;

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

§	existing or new competitors consolidating operators ahead of the Company;

§	we may be unable to attract new personnel, which would adversely affect implementation of our overall business strategy.

§	the success of our investor relations program to create and sustain interest and liquidity in our stock, which is currently thinly traded on the OTCBB;

Any one of these or other risks, uncertainties, other factors, or any inaccurate assumptions may cause actual results to be materially different from those described herein or elsewhere by us. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date they were made. Certain of these risks, uncertainties, and other factors may be described in greater detail in our filings from time to time with the Securities and Exchange Commission (the “SEC”), which we strongly urge you to read and consider. Subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above and elsewhere in our reports filed with the SEC. We expressly disclaim any intent or obligation to update any forward-looking statements.

Item 3 - Controls and Procedures

The Company evaluated the design and operation of its disclosure controls and procedures to determine whether they are effective in ensuring that it discloses the required information in a timely manner and in accordance with the Securities Exchange Act of 1934 (the “Exchange Act”) and the rules and forms of the SEC. Management, including its principal executive officer and principal financial officer, supervised and participated in the evaluation. The principal executive officer and principal financial officer concluded, based on their review, that its disclosure controls and procedures, as defined by Exchange Act Rules 13a-15(e) and 15d-15(e), are effective and ensure that (i) it discloses the required information in reports that it files under the Exchange Act and that the filings are recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) information required to be disclosed in reports that it files under the Exchange Act is accumulated and communicated to the Company's management, including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

During the three months ended June 30, 2007, no changes were made to its internal controls over financial reporting that materially affected or were reasonably likely to materially affect these controls subsequent to the date of their evaluation.

Limitations on the Effectiveness of Controls

We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Our disclosure controls and procedures are designed to provide a reasonable assurance of achieving their objectives and our principal executive officer and principal accounting officer have concluded that such controls and procedures are effective at the "reasonable assurance" level.

PART II OTHER INFORMATION

Item 1. Legal Proceedings

As of June 30, 2007, the Company was not a party to any pending legal proceeding as to which disclosure was required pursuant to Item 103 of Regulation S-B of the SEC.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) During the three months ended June 30, 2007, FirstFlight sold the following securities which were not registered under the Securities Act of 1933, as amended (the “Securities Act”), and which were not previously reported in a Current Report on Form 8-K:

1. (A) The Compensation Committee of the Board of Directors of FirstFlight granted an option to Ronald J. Ricciardi, effective April 1, 2007, to purchase 250,000 shares of the Common Stock. The Compensation Committee acted pursuant to a unanimous consent dated April 19, 2007.

(B) There was no underwriter for the grant. An incentive stock option expiring March 31, 2012 to purchase 250,000 shares of the Common Stock was granted to Ronald J. Ricciardi pursuant to the Option Plan and his employment agreement.

(C) The option was not issued for cash and there were no underwriting discounts or commissions. As indicated in subsection (B) above, this option was issued in consideration of the services to be performed by this executive officer of FirstFlight.

(D) FirstFlight claims that the grant of this option was exempt from the registration requirement of Section 5 of the Securities Act pursuant to the exemption of Section 4(2) of the Securities Act as a transaction not involving a public offering. The optionee represented to FirstFlight that he was acquiring the option, and, if not registered under the Securities Act at the time, the shares of the Common Stock issuable upon the exercise of the option, for investment, and not with a view toward, or in connection with, a distribution (as the term “distribution” is contemplated under the Securities Act).

(E) The option is exercisable at $0.39 per share which is the market price on March 30, 2007 (March 31^st was a Saturday). The option is exercisable immediately, from time to time in its entirety or in part, until March 31, 2012.

(F) Not applicable.

2. (A) The Compensation Committee of the Board of Directors of FirstFlight granted an option to the seven non-employee Directors of FirstFlight, effective April 19, 2007, for each to purchase 25,000 shares of the Common Stock, a total of 175,000 shares. The Compensation Committee acted pursuant to a unanimous consent dated April 19, 2007 providing that each option was not to become effective until the anniversary date.

(B) There was no underwriter for the grant. Incentive stock options expiring April 19, 2012 to purchase 25,000 shares of the Common Stock were granted to each of the seven non-employee Directors of FirstFlight pursuant to the Option Plan.

(C) The options were not issued for cash and there were no underwriting discounts or commissions. As indicated in subsection (B) above, this option was issued in consideration of the services to be performed by these Directors of FirstFlight.

(E) The option is exercisable at $0.36 per share which is the market price on April 19, 2007. The option is exercisable, from time to time in its entirety or in part, from April 19, 2008 until April 19, 2012.

(F) Not applicable.

(b) Not applicable

Item 3. Defaults upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security Holders

None.

Item 5. Other Information

(a) FirstFlight is not aware of any information to be disclosed in a Report on Form 8-K during the quarter ended June 30, 2007 that has not already been reported.

(b) There have been no changes to the procedures by which security holders of FirstFlight may recommend nominees to its Board of Directors since the Board set forth such policy in its proxy statement for its Annual Meeting of Stockholders held on December 12, 2006 (the “Proxy Statement”).

Item 6. Exhibits

Exhibit No.		Description of Exhibit

2		Agreement and Plan of Merger dated as of July 26, 2004 by and between FirstFlight (then named Shadows Bend Development, Inc.) and FBO Air, Inc, an Arizona corporation (without schedules). (1)

3(i)		Articles of Incorporation of FirstFlight filed on June 2, 1998 (2)

3 (i)(1)		Certificate of Amendment to Articles of Incorporation (Exhibit 3(i) filed on October 15, 1999. (2)

3 (i)(2)		Certificate of Amendment to Articles of Incorporation (Exhibit 3(i) filed on June 2, 2000. (2)

3 (i)(3)		Certificate of Amendment to FirstFlight’s Articles of Incorporation (Exhibit 3(j) filed on July 30, 2004. (1)

3 (i) (4)		Certificate of Designations. (3)

3 (i) (5)		Certificate of Amendment to Articles of Incorporation (Exhibit 3(i)) filed on December 13, 2006.(4)

3 (i) (6)		Restated Articles of Incorporation.(4)

3 (ii)		Bylaws of FirstFlight previously in effect (2)

3(ii) (1)		Bylaws of FirstFlight as currently in effect. (14)

4.1		Common Stock Certificate. (14)

4.2		Form of 10% Senior Secured Promissory Note due March 31, 2008 or April 8, 2008. (5)

4.3		Copy of General Security Agreement dated as of June 30, 2005. (5)

4.4		Form of Warrant expiring March 31, April 8 or April 15, 2010. (5)

4.5		Registration Rights Agreement (without schedule or exhibit). (5)

4.6		Form of Co-Investor Registration Rights Agreement (without schedule or exhibit). (5)

4.7		Copy of Warrant expiring September 22, 2010. (6)

4.8		Form of Subscription Agreement (including registration rights commitment). (12)

4.9		Form of Letter Agreement dated May 24, 2005 by and between FirstFlight and Laidlaw & Company, Ltd (5)

4.10		Form of Warrant expiring August 31, 2011 (15)

10.1		Copy of Employment Agreement dated as of April 1, 2005 by and between Robert J. Ettinger and FirstFlight. (5)

10.2		Copy of Business Development Agreement dated as of January 2, 2004 by and between Jeffrey M. Trenk and FBO Air (as the successor by merger to FBO Air, Inc., an Arizona corporation). (8)

10.3		Copy of Employment Agreement dated as of April 1, 2005 between Jeffrey M. Trenk and FirstFlight. (5)

10.4		Copy of First Amendment dated as of October 31, 2006 by and between Jeffrey M. Trenk and FirstFlight.(7)

10.5		Copy of Employment Agreement dated as of January 2, 2004 by and between Ronald J. Ricciardi and FirstFlight (as the successor by merger to FBO Air, Inc., an Arizona corporation). (8)

10.6		Copy of First Amendment effective April 1, 2005 to the Ricciardi Employment Agreement, a copy of which is filed as Exhibit 10.5. (5)

10.7		Copy of Second Amendment to the Ricciardi Employment Agreement, a copy of which is filed as Exhibit 10.5(14)

10.8		Copy of Asset Purchase Agreement dated March 31, 2005 among FBO Air - Garden City and John A. Crotts. (5)

10.9		Copy of Employment Agreement between FBO Air - Garden City, Inc. and John A. Crotts. (5)

10.10		Copy of Stock Purchase Agreement dated March 31, 2005 between Tech Aviation Source, Ronald D. Ertley, Frank E. Paczewski, and FBO Air Wilkes-Barre, Inc. (5)

10.11		Copy of Employment Agreement dated March 31, 2005 between Tech Aviation Service, Inc, and Frank E. Paczewski. (5)

10.12		Copy of Convertible Loan Agreement dated April 16, 2004 among FBO Air and the investors mentioned in Schedule A. (1)

10.13		Copy of the Letter Agreement dated as of July 26, 2004 to the Convertible Loan Agreement, a copy of which is filed as Exhibit 10.12. (9)

10.14		Form of Convertible Notes due April 15, 2009. (1)

10.15		Copy of Letter Agreement dated October 21, 2004 amending the Convertible Notes, the form of which is filed as Exhibit 10.14 (9)

10.16		Copy of Stock Purchase Agreement Dated as of September 22, 2005 by and among Airborne, Inc., John H. Dow, Daphne Dow and FirstFlight (without a schedule or exhibit). (10)

10.17		Copy of Employment Agreement dated as of September 23, 2005 among John Dow, Airborne, Inc. and FirstFlight. (10)

10.18		Copy of Lease dated as of September 23, 2005 between John H. Dow and Daphne Dow, as the Landlord, and Airborne, Inc., as the Tenant. (10)

10.19		Copy of Term Loan Agreement dated as of September 23, 2005 by and among FirstFlight, Airborne, Inc., and Airport Capital, LLC. (10)

10.20		Copy of the FirstFlight, Inc. Stock Option Plan of 2005 dated as of December 13, 2005 (13)

10.21		Copy of Employment Agreement dated as of September 1, 2006 between FirstFlight and Keith P. Bleier.(11)

31.1		Officer's Certification Pursuant to Rule 13a-14(a) under the Securities Exchange Act. (16)

32.1		Certification Pursuant to Section 906 of Sarbanes-Oxley Act of 2002. (16)

Footnotes:

(1) Incorporated by reference to FirstFlight's Current Report on Form 8-K filed on August 27, 2004.

(2) Incorporated by reference to FirstFlight’s Registration Statement Form SB-2, File No. 333-56046.

(3) Incorporated by reference to FirstFlight's Annual Report on Form 10-KSB for the year ended December 31, 2004.

(4) Incorporated by reference to FirstFlight’s Current Report on Form 8-K filed on December 18, 2006

(5) Incorporated by reference to FirstFlight's Current Report on Form 8-K filed on April 6, 2005.

(6) Incorporated by reference to FirstFlight's Current Report on Form 8-K/A filed on November 3, 2005.

(7) Incorporated by reference to FirstFlight’s Current Report on Form 8-K filed on November 6, 2006.

(8) Incorporated by reference to FirstFlight's Current Report on Form 8-K filed on October 5, 2004.

(9) Incorporated by reference to FirstFlight's Current Report on Form 8-K/A filed on November 4, 2004.

(10) Incorporated by reference to FirstFlight's Current Report on Form 8-K filed on September 28, 2005.

(11) Incorporated by reference to FirstFlight’s Current Report on Form 8-K filed on September 21, 2006.

(12) Incorporated by reference to FirstFlight’s Registration Statement on Form SB-2, File No. 333-138994.

(13) Incorporated by reference to FirstFlight’s Annual Report on Form 10-KSB for the fiscal year ended December 31, 2005.

(14) Incorporated by reference to FirstFlight’s Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006.

(15) Incorporated by reference to FirstFlight’s Current Report of Form 8-K filed on September 8, 2006.

(16) Filed herewith.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	FirstFlight, Inc.
		(Registrant)
Date: August 14, 2007	By:	/s/ Ronald J. Ricciardi
		Ronald J. Ricciardi,
		Vice Chairman of the Board and Authorized Officer




Date: August 14, 2007	By:	/s/ Keith P. Bleier
		Keith P. Bleier,
		Senior VP and Principal Financial and Accounting Officer

Saker Aviation Services (SKAS) 10QSB2007 Q2 Quarterly report (small business)