Executive Summary / Key Takeaways

• Saker Aviation Services (OTCMKTS:SKAS) is undergoing a profound transformation following the termination of its sole revenue-generating operation, the Downtown Manhattan Heliport, effective March 29, 2025.
• The company's financial performance reflects this cessation, with zero revenue reported for the third quarter of 2025 and a net loss of $944,870 for the nine months ended September 30, 2025.
• Despite the operational halt, SKAS maintains a robust liquidity position, holding $4.79 million in cash and cash equivalents and an $8.81 million working capital surplus as of September 30, 2025, strategically invested in high-yield savings and government-backed securities.
• The core investment thesis for SKAS now centers entirely on its ability to successfully identify and implement alternative business activities to establish new revenue streams.
• Significant risks include the potential cessation of operations if new ventures are not secured, the challenges associated with attracting and retaining personnel for a new strategic direction, and ongoing litigation related to the heliport concession.

Aviation's Crossroads: Saker Aviation Services' Defining Moment

Saker Aviation Services, Inc. (SKAS) stands at a pivotal juncture, having historically carved out a niche in urban aviation services through its operation of the Downtown Manhattan Heliport. For years, this facility, managed by its wholly-owned subsidiary FirstFlight Heliports, LLC, served as the company's singular source of revenue, providing essential services such as jet fuel sales and general aviation support. This operational focus, rather than proprietary technology, constituted SKAS's primary competitive advantage: a strategic location coupled with specialized operational expertise in a high-demand urban environment.

The landscape for SKAS dramatically shifted on March 29, 2025, when the Concession Agreement for the Downtown Manhattan Heliport was terminated by the NYCEDC. This event, following a notification on November 20, 2024, that the concession would be awarded to another company, forced SKAS to vacate the heliport and cease all related operations. Consequently, the second and third quarters of 2025 saw no operational activity for the company. This abrupt cessation has thrust SKAS into a period of strategic re-evaluation, as it actively reviews alternative business activities to establish new revenue streams.

In the broader aviation services industry, SKAS's historical positioning as a specialized regional operator contrasts sharply with larger, more diversified competitors. Companies like AAR Corp. offer comprehensive MRO and supply chain solutions on a global scale, benefiting from economies of scale and a broad customer base. Textron Inc. , with its extensive aircraft manufacturing and FBO network, leverages technological innovation and vertical integration. HEICO Corporation specializes in high-margin aerospace components and aftermarket services. Against these giants, SKAS's competitive edge was its localized efficiency and deep understanding of urban heliport operations, allowing for tailored services and strong customer loyalty in its specific market. However, without the heliport, this advantage is currently dormant.

Indirect competitors, such as evolving urban transportation solutions like ride-sharing or future electric vertical takeoff and landing (eVTOL) vehicles, also present a long-term dynamic. While not directly competing with SKAS's former heliport operations, these trends highlight a broader industry shift towards potentially more accessible and cost-efficient short-haul travel, which could influence the viability and competitive dynamics of any future aviation-related ventures SKAS might pursue. The company's smaller scale and lack of diversification inherently make it more vulnerable to such market shifts and the expansive strategies of its larger rivals.

Financial Performance: The Aftermath of a Strategic Shift

The termination of the Downtown Manhattan Heliport concession has had a profound and immediate impact on Saker Aviation Services' financial performance. For the three months ended September 30, 2025, the company reported zero revenue, a stark contrast to the $2.51 million in revenue generated during the same period in 2024. This operational void directly led to a gross profit of $0 for the quarter, compared to $1.26 million in the prior year.

Looking at the nine months ended September 30, 2025, total revenue from operations plummeted to $1.26 million, a significant decline from $6.47 million in the corresponding period of 2024. This substantial decrease is evident across all former revenue streams: jet fuel and related items generated approximately $297,000 (down from $1.60 million in 2024), services and supply items brought in approximately $937,000 (down from $4.57 million in 2024), and other revenue was approximately $27,000 (down from $295,000 in 2024). Consequently, gross profit for the nine-month period fell dramatically to $511,360 from $3.28 million in the prior year.

The shift from operational income to loss is equally striking. For the three months ended September 30, 2025, SKAS recorded an operating loss of $264,319, a sharp reversal from an operating income of $803,494 in the same period of 2024. The nine-month period saw an operating loss of $1.13 million, compared to an operating income of $1.90 million in 2024. Selling, General and Administrative (SGA) expenses for the three months ended September 30, 2025, decreased by 42.1% to $264,319 due to the cessation of heliport operations. However, for the nine months ended September 30, 2025, SGA expenses increased by 18.60% to $1.64 million. This increase was primarily driven by a one-time charge for deferred compensation related to a Covenant Not To Compete Agreement and heightened professional fees associated with ongoing litigation challenging the NYCEDC's selection of the heliport's new operator.

The company reported a net loss of $163,931 for the three months ended September 30, 2025, and a net loss of $944,870 for the nine months ended September 30, 2025, contrasting with net income in the prior year periods. Interest income, primarily from its invested reserves, provided some offset, totaling $250,505 for the nine months ended September 30, 2025, though this was lower than the $281,481 recorded in 2024 due to decreased interest rates. The latest trailing twelve-month (TTM) data further underscores the financial impact, showing annual revenue of $9.17 million, a net income of $1.25 million, and negative operating and free cash flows of -$599,580 and -$667,728, respectively. The TTM net profit margin stands at -10.77%, reflecting the current operational challenges.

Liquidity and Capital Allocation: A Foundation for Reinvention

Despite the significant operational challenges, Saker Aviation Services maintains a strong liquidity position, which is critical for its strategic pivot. As of September 30, 2025, the company held $4.79 million in cash and cash equivalents and boasted a working capital surplus of $8.81 million. This financial strength provides a crucial buffer as the company seeks new business opportunities.

SKAS has strategically invested its excess working capital in a high-yield savings account and government-backed securities with UBS Financial Services Inc. (UBS), aiming to generate returns while preserving capital. Cash flows for the nine months ended September 30, 2025, included net cash used in operating activities of $423,345 and net cash used in investing activities of $84,604. A notable financial commitment is the Covenant Not To Compete agreement entered into on February 10, 2025, with Brian Tolbert, the former manager of the Downtown Manhattan Heliport. This agreement entails payments totaling $276,923 over 18 months, commencing in April 2025, contingent on Tolbert not disclosing confidential information or accepting employment with the new heliport operator. This deferred liability reflects a strategic move to protect the company's interests during its transition.

The Path Forward: Seeking New Horizons

The immediate future for Saker Aviation Services is defined by its search for new revenue streams. Management explicitly states that the company is "currently reviewing alternative business activities as a source of revenue" following the termination of its sole operation. This strategic imperative is paramount, as the company has acknowledged that "the operation of the Downtown Manhattan Heliport was our only source of revenue, if we are unable to find alternative revenue streams we may cease operations."

Beyond the search for new business, SKAS is also engaged in "ongoing challenge, and pending litigation, of the NYCEDC selection of the heliports new operator." This legal battle, contributing to increased professional fees, indicates the company's efforts to contest the decision that led to its current predicament. However, no concrete guidance figures, specific targets, or timelines for new business ventures have been publicly disclosed, underscoring the exploratory and uncertain nature of this transitional phase. The success of this pivot will depend heavily on management's ability to identify viable opportunities and effectively deploy its existing capital and operational expertise in new markets.

Investment Risks: The Imperative of Transformation

Investing in Saker Aviation Services at this juncture carries significant risks, primarily stemming from its current lack of operational revenue and the inherent uncertainty of its future business model. The most critical risk, as highlighted by management, is the potential for the company to "cease operations" if it fails to secure alternative revenue streams. This existential threat underscores the high-stakes nature of its current strategic pivot.

Furthermore, the implementation of any new business strategy will require the company to attract and potentially retain new personnel, a challenge that "could adversely affect the implementation of any new business strategy." Without a defined path forward, attracting top talent to build and execute new ventures could prove difficult. The competitive landscape, even in new markets, will likely be robust. While SKAS historically leveraged its operational agility and strategic location, it lacks the scale, diversification, and technological differentiation of larger players like AAR (AIR), Textron (TXT), or HEICO (HEI). This could place it at a disadvantage in new competitive arenas, potentially leading to lower profitability and market share. The ongoing litigation, while a defensive measure, also represents a drain on resources and management focus, diverting attention from the critical task of business reinvention.

Conclusion

Saker Aviation Services is at a critical inflection point, transitioning from a single-asset operator to a company in search of a new identity and revenue base. The termination of its Downtown Manhattan Heliport concession has left a significant void, reflected in its recent financial results showing zero revenue and net losses. However, the company's robust liquidity, characterized by $4.79 million in cash and a substantial working capital surplus, provides a vital foundation for its strategic pivot.

The investment thesis for SKAS is now a narrative of reinvention. Its future hinges entirely on management's ability to successfully identify, develop, and execute new business activities. While the company's historical strengths lay in operational expertise and strategic location rather than proprietary technology, leveraging these non-technological differentiators will be crucial in any new venture. Investors must weigh the significant risks associated with this transformative period, particularly the uncertainty of securing new revenue streams and the challenges of building a new operational framework. SKAS represents a high-risk, high-reward proposition, where the successful execution of its strategic pivot will be the sole determinant of its long-term viability and potential for shareholder value creation.