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USHP SEC Suspension for Financials / Filings delinquencies:
http://www.sec.gov/litigation/suspensions/2016/34-76963.pdf
Order:
http://www.sec.gov/litigation/suspensions/2016/34-76963-o.pdf
Admin Proceeding:
http://www.sec.gov/litigation/admin/2016/34-76964.pdf
Form 10-Q for U.S. HELICOPTER CORP
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19-Aug-2008
Quarterly Report
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
Information included in this Form 10-Q may contain forward-looking statements. This information may involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words "may," "will," "should," "expect," "anticipate," "estimate," "believe," "intend" or "project" or the negative of these words or other variations on these words or comparable terminology.
This Form 10-Q contains forward-looking statements, including statements regarding, among other things, (a) our projected sales and profitability, (b) our growth strategies, (c) anticipated trends in our industry, (d) our future financing plans and (e) our anticipated needs for working capital. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the risks outlined under "Risk Factors" and matters described in this Form 10-Q generally. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this Form 10-Q will in fact occur.
The following discussion and analysis should be read together with the financial statements and the accompanying notes thereto included elsewhere in this Form 10-Q.
GENERAL
We are a provider of scheduled and charter passenger helicopter services and are, at present, the only certificated United States based airline focused on scheduled helicopter flight service. Our operations currently center on scheduled flights connecting midtown and downtown Manhattan with Newark Liberty International Airport ("Newark") and John F. Kennedy International Airport ("Kennedy Airport"). We are currently the only operator offering regularly scheduled helicopter service in the New York market.
We believe the timing is favorable, particularly in light of traffic congestion problems affecting many of the nation's highways serving major metropolitan areas during peak traffic hours (especially direct and connecting routes to major airports where gridlock has become the norm), to introduce our new Metro-hop Airport Shuttle Service. Our MASS service will provide regular, scheduled passenger helicopter service between many of the nation's larger metropolitan airports and surrounding city-based heliports. On March 27, 2006, we commenced regularly scheduled flight operations between the Downtown Manhattan Heliport and Kennedy Airport. We estimate that there are annually over 29 million air passengers traveling in and out of Manhattan who could utilize a regularly scheduled helicopter service to access major airports, when it becomes available.
Our principal target market is the business traveler who, we believe, is willing to pay fares between $139 and $169. Individual travelers purchase tickets at the higher end of the price range. Large corporate travel management companies or corporations purchase volume sales, which are negotiated at a "per-ticket-price" at the lower end of the price range and are based upon large ticket commitments. Our regularly scheduled U.S. Helicopter flights between Manhattan and Newark and Kennedy Airports take approximately eight minutes and stand in contrast to paying $850 to $2,770 for the same flights offered by a charter helicopter service or paying fares from $75-$125 plus tolls and tips for 65-125 minutes of travel time (or longer) via taxi or limousine airport ride. While our service is available to the general public including corporate CEOs and affluent leisure travelers, we believe our service has the greatest appeal to the segment of the business traveler market (like managers, directors, etc.) that currently uses town car/executive car services, limos or taxi transportation, travels 2-3 times per month and recognizes the true time-saving value offered via helicopter. We believe our service is highly attractive (for personal reasons as well as business reasons) compared to ground-based travel when the helicopter connection is reasonably and moderately priced in the range that we offer.
During 2006, we introduced our MASS service in the Metro New York City market with service between Kennedy Airport and Newark Airport and the Downtown Manhattan Heliport. In February 2007 we expanded our service between Kennedy Airport and Newark Airport to the East 34th Street Heliport. In June 2006, we also commenced service between Sikorsky Memorial Airport in Stratford, Connecticut and the Downtown Manhattan Heliport. We intend to expand our service to LaGuardia International Airport and the West 30th Street Heliport in Manhattan during the next 12 months. Subsequently we intend to introduce our airport shuttle service in the metropolitan Washington DC, Chicago and Los Angeles markets, with further expansion into other major U.S. metro-markets. The number of passengers who originate or terminate their travel from within close proximity to one of these cities' heliports is estimated at over 200 million annually. In addition to our regularly scheduled flight services to and from New York City metropolitan-area airports from Manhattan, we also provide on-demand charter services and limited scheduled service between Manhattan and Sikorsky Memorial Airport (Stratford, Connecticut), and limited seasonal service between Manhattan and East Hampton Airport (East Hampton, New York) and Monmouth Executive Airport (Belmar, New Jersey).
Many of the same factors (population growth, economic expansion and airline deregulation), which drove the growth in air passenger travel during the years since 1975, are also responsible for the demand which currently exists for reliable, scheduled "Metro-hop" airport shuttle services. Even so, as traffic congestion intensified and systemic gridlock became the norm (while corporate charter helicopter usage expanded), the demand for scheduled helicopter services to and from airports to serve the general public, especially regular business travelers, has remained largely ignored and un-served in the United States.
We believe that there is significant unfulfilled demand for scheduled, "Metro-Hop" airport helicopter shuttle services in the U.S., especially in our initial target market of the New York City metropolitan area. This demand has been largely unfulfilled since the late 1970s, when New York Airways' scheduled helicopter service carried over 400,000 passengers annually. During this period the market size was approximately 35 million passengers as compared to today, where the market size has grown to over 96 million passengers.
Due to significant growth in many U.S. cities, the need for ground-based infrastructure servicing metropolitan areas, and roadways servicing major airports in particular, has outpaced capacity. Only so many subways, bus lines, and taxis can be added to service these high demand routes before each city runs out of space and capability. Adding more limousine and taxi services will not help the situation either because the bottleneck is in the infrastructure itself. U.S. Helicopter believes that the future of transportation for short distances into and out of these densely populated urban areas is by helicopter. By using the vertical take off and landing capabilities of the helicopter, passengers will be able to travel through the city and to local destinations without suffering through hours of gridlock. People will be able to quickly travel across town, to the local airport, or to a neighboring city in minutes instead of hours.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 2008 COMPARED TO
THREE MONTHS ENDED JUNE 30, 2007
REVENUES For the three months ended June 30, 2008, total revenues increased to $1,099,199. For the three months ended June 30, 2007, our total revenues were $883,202. The increase in total revenues is attributable to increased passenger counts in 2008 versus 2007 and a higher net fare.
PAYROLL EXPENSES Payroll expenses decreased to $676,229 for the three months ended June 30, 2008 from $1,010,513 for the three months ended June 30, 2007. The decrease in payroll expense is due to a slightly smaller number of employees and reimbursement of certain payroll expenses by third parties.
PROFESSIONAL FEES For the three months ended June 30, 2008, we incurred professional fees totaling $468,371, compared to $594,150 for the three months ended June 30, 2007. These fees are comprised of legal fees for general matters, accounting and audit fees, other consulting fees, transfer agent fees, registered agent fees, security fees and Board of Directors fees.
EQUIPMENT EXPENSES Equipment lease expenses decreased to $473,917 for the three months ended June 30, 2008 from $478,215 for the three months ended June 30, 2007.
ADVERTISING EXPENSES Advertising expenses decreased to $33,432 for the three months ended June 30, 2008 from $66,468 for the three months ended June 30, 2007.
OPERATING LOSS We reported an operating loss of $(2,107,333) for the three months ended June 30, 2008 compared to an operating loss of $(2,808,311) for the three months ended June 30, 2007. The decrease in operating loss is due to higher revenue levels and a decrease in expenses as described above.
NET LOSS We reported a net loss of $(3,208,038) for the three months ended June 30, 2008 compared to a net loss of $(3,449,050) for the three months ended June 30, 2007. The decrease in loss is due to lower expense levels and an increase in revenue as we expanded our operation. Net loss was negatively impacted by higher other income and (expenses) of $(1,085,889) for the three months ended June 30, 2008 compared to other income/(expenses) of $(640,739) for the three months ended June 30, 2007. The difference in other income expense is due to higher interest expense, a gain from derivative liability calculation in the second quarter of 2008, a significantly higher amortization of debt discount in the second quarter of 2008 and a lower amortization of deferred financing costs.
NET LOSS PER COMMON SHARE Basic and diluted net loss per common share was $(.07) for the three months ended June 30, 2008 compared to a $(.10) loss for the three months ended June 30, 2007.
SIX MONTHS ENDED JUNE 30, 2008 COMPARED TO
SIX MONTHS ENDED JUNE 30, 2007
REVENUES For the six months ended June 30, 2008, total revenues increased to $1,909,525. For the six months ended June 30, 2007, our total revenues were $1,179,928. The increase in total revenues is attributable to increased passenger counts in 2008 versus 2007 and a higher net fare.
PAYROLL EXPENSES Payroll expenses decreased to $1,540,366 for the six months ended June 30, 2008 from $1,985,533 for the six months ended June 30, 2007. The decrease in payroll expense is due to a slightly smaller number of employees and reimbursement of certain payroll expenses by third parties.
PROFESSIONAL FEES For the six months ended June 30, 2008, we incurred professional fees totaling $819,748, compared to $977,507 for the six months ended June 30, 2007. These fees are comprised of legal fees for general matters, accounting and audit fees, other consulting fees, transfer agent fees, registered agent fees, security fees and Board of Directors fees.
EQUIPMENT EXPENSES Equipment lease expenses decreased to $941,620 for the six months ended June 30, 2008 from $952,988 for the six months ended June 30, 2007.
ADVERTISING EXPENSES Advertising expenses decreased to $68,455 for the six months ended June 30, 2008 from $359,386 for the six months ended June 30, 2007.
OPERATING LOSS We reported an operating loss of $(4,257,782) for the six months ended June 30, 2008 compared to an operating loss of $(6,182,555) for the six months ended June 30, 2007. The decrease in operating loss is due to higher revenue levels and a decrease in expenses as described above.
NET LOSS We reported a net loss of $(5,751,273) for the six months ended June 30, 2008 compared to a net loss of $(7,308,469) for the six months ended June 30, 2007. The decrease in loss is due to lower expense levels and an increase in revenue as we expanded our operation. Net loss was negatively impacted by higher other income and (expenses) of $(1,493,491) for the six months ended June 30, 2008 compared to other income/(expenses) of $(1,125,914) for the six months ended June 30, 2007. The difference in other income expense is due to higher interest expense, a gain from derivative liability calculation in the first six months of 2008, a higher amortization of debt discount in the first six months of 2008 and a lower amortization of deferred financing costs.
NET LOSS PER COMMON SHARE Basic and diluted net loss per common share was $(.13) for the six months ended June 30, 2008 compared to a $(.21) loss for the six months ended June 30, 2007.
Results of the second quarter are not necessarily indicative of the results for the full year of 2008. Certain of our operations (particularly charter flights and certain seasonal services) will have the effect of increasing our total revenue during the second and third quarters.
LIQUIDITY AND FINANCIAL CONDITION
GENERAL
At June 30, 2008, cash and cash equivalents were $203,719. Total liabilities at June 30, 2008 were $16,049,464, consisting of current liabilities in the aggregate amount of $12,001,353 and long-term liabilities in the amount of $4,048,111. At June 30, 2008, assets included $65,028 in prepaid expenses, $756,114 in furniture and equipment, net of depreciation; $199,996 in debt issuance costs, net of amortization; and other assets of $1,099,631. As of June 30, 2008, our working capital deficit was $(10,697,978) as compared to $(3,313,797) at June 30, 2007. We expect to incur additional operating losses as we continue our commercialization efforts.
Our debt before discount at June 30, 2008 and December 31, 2007 were as follows:
JUNE 30, 2008 DECEMBER 31, 2007
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Short-term notes $ 7,994,838 $ 844,838
Short-term bridge loans 700,000 --
Long Term Convertible notes 2,750,000 8,650,000
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Total $ 11,444,838 $ 9,494,838
============= =============
For more detailed information on long-term liabilities, see Note 7 to our financial statements contained herein.
FINANCING TRANSACTIONS
Since inception, we have incurred substantial operating losses. As of June 30, 2008, we had an accumulated deficit of $(34,128,637). We did not receive any revenues from inception until the start of operations on March 27, 2006. Our operations have been financed primarily through the private placement of our debt and equity securities and the cash exercise of outstanding warrants. The terms of these debt and equity financings are set forth below.
JULY 2008 CONVERTIBLE NOTE FINANCING
On July 15, 2008, we closed on a $1,500,000 bridge loan financing pursuant to a Note Purchase Agreement dated July 3, 2008 with one investor (the "July 2008 Investor"), pursuant to which we issued a total of $1,500,000 in principal amount of convertible notes (the "July 2008 Note"). The July 2008 Note is repayable on the earlier of (a) the first closing of a private placement of our debt or equity securities to institutional investors in an institutional capital raise (the "Institutional Private Placement") or (b) December 31, 2008. To secure repayment of the July 2008 Note, certain third parties agreed to pledge a total of 375,000 shares of common stock (the "July 2008 Collateral") of an unrelated, privately held third party corporation pursuant to the terms and provisions of a Pledge and Escrow Agreement.
The July 2008 Note bears interest at the rate of 15% per annum based on a 360-day year, of which 60 days' worth of interest, equal to $37,500, was prepaid on the closing of the July 2008 Note. As additional consideration, we paid the July 2008 Investor upon the closing of the July 2008 Note an origination fee of five percent (5%) of the amount of the loan, equal to $75,000. We received net proceeds of approximately $585,000 after deducting prepaid interest and fees and expenses of the offering, and after repayment of certain debt and other obligations owed by us. We plan to use the remaining net proceeds received in this financing for working capital.
The July 2008 Note, together with accrued but unpaid interest, is convertible at the option of the July 2008 Investor, into shares of our common stock at a price equal to the lower of (a) the conversion price for convertible debt issued in the first closing of the Institutional Private Placement or (b) $0.20 per share. The shares issuable upon conversion of the July 2008 Note are entitled to piggyback registration rights.
In connection with the July 2008 Note financing, we agreed to issue to the July 2008 Investor warrants to purchase up to 3,000,000 shares of our common stock, which have an exercise price of $0.20 per share and a term of five years from the date of issuance. The shares of common stock issuable upon exercise of such warrant are entitled to piggyback registration rights.
Certain members of our management agreed to transfer 525,000 shares of U.S. Helicopter common stock to the July 2008 Investor as an inducement to purchase the July 2008 Note. Such shares are also entitled to piggyback registration rights. In addition, certain members of our management have agreed to transfer a total of 1,225,000 shares of U.S. Helicopter common stock to the pledgors and certain third parties as an inducement to the pledgors to pledge the July 2008 Collateral, in consideration of an existing lender's agreement to forbear from exercising its rights under its outstanding note agreement, and other consideration.
Commissions paid by us in connection with this transaction consisted of an 8% placement fee to certain third parties. In addition, we agreed to pay to the pledgors fees totaling $195,000 as an inducement to pledge the July 2008 Collateral securing the repayment of the July 2008 Note.
MAY 2008 NOTE FINANCING
On May 30, 2008, we closed on a $250,000 convertible bridge loan financing with an existing bridge lender in accordance with a Convertible Note Purchase Agreement, pursuant to which we issued a total of $250,000 in principal amount of convertible notes (the "May 2008 Notes"). Such notes accrue interest at the rate of 15% per annum and are repayable on or before the earlier of the earlier of (a) the next closing of a private placement of our debt or equity securities, or (b) 60 days after the date of the loan. We repaid this loan in full with proceeds received in the July 2008 Note financing as described above.
MARCH 2008 CONVERTIBLE DEBENTURE FINANCING
We received gross proceeds totaling $1,250,000 from YA Global Investments, L.P., formerly known as Cornell Capital Partners, L.P. ("YA") pursuant to a Securities Purchase Agreement dated March 31, 2008 (the "March 2008 SPA"). Pursuant to the March 2008 SPA, we issued convertible debentures in the principal amount of $1,250,000 (the "March 2008 Debenture"). The March 2008 Debenture bears interest at a rate of 18% per annum and is convertible into shares of our common stock at the option of YA any time up to maturity at a conversion price equal to the lesser of $0.30 or 80% of the lowest closing bid price of our common stock during the 15 trading days immediately preceding the conversion date. The March 2008 Debenture is repayable as of the earlier of September 30, 2008 or (b) on the closing date of the next equity financing completed by us resulting in not less than $5.0 million in gross proceeds. We used approximately $613,000 of the proceeds received in connection with the March 2008 Debenture to repay all amounts due and owing under a debenture issued to YA on March 14, 2008. We used the remaining proceeds received in this financing for working capital.
Pursuant to the March 2008 SPA, we also issued warrants to YA to purchase a total of 2,783,333 shares of our common stock with an exercise price of $0.01 per share. The warrants are exercisable for a period of five years after issuance.
We entered into an amended security agreement with YA pursuant to which we continued the security interest of YA in all our assets which we granted in connection with debentures issued by us to YA in August 2004.
We have agreed to include the shares of common stock issuable upon conversion of the debentures and upon exercise of the warrants issued in this transaction in the event we determine to file a registration statement other than on Form S-4 or Form S-8 and YA elects to include the shares issuable upon conversion of the debentures and upon exercise of the warrants in such registration statement.
Fees and expenses paid in connection with this transaction included a monitoring fee of $78,750 to Yorkville Advisors, LLC. We also paid structuring fees to Yorkville Advisors, LLC in the amount of $25,000.
As a condition to closing the March 2008 Debenture transaction, YA and certain of our bridge lenders (the "Bridge Lenders") were required to enter into a Subordination Agreement providing that payment by us of the bridge loans made by the Bridge Lenders in the aggregate amount of $350,000 shall be subordinate to our repayment of a total of $6,250,000 of indebtedness owed to YA.
As an additional condition to closing the March 2008 Debenture transaction, our five most senior executive officers (collectively, "Management") agreed to continue pre-existing reductions of their salaries by 20% until such time as we repaid a total of $6,250,000 from proceeds to be received by us in an institutional private placement (the "YA Repayment"). After we make such repayments, Management's salaries may be reinstated in full, and all unpaid salary amounts may be issued to Management in the form of shares of our common stock at a price equal to the greater of the volume weighted average price of our common stock as quoted by Bloomberg, LP on the day prior to the YA Repayment or $0.50 per share. Each Management member has the option, however, to receive payment of such unpaid salary in cash to the extent of such Management member's contribution to the Common Stock Purchase once the total indebtedness owed by us to YA is reduced by $6.25 million or more.
MARCH 2008 AMENDMENT OF PRIOR YA DEBENTURES AND WARRANTS
On March 31, 2008, we amended the terms of three secured convertible debentures previously issued to YA on March 31, 2006 (in the remaining principal amount of $5.9 million), November 3, 2006 (in the principal amount of $2.75 million) and March 30, 2007 (in the remaining principal amount of $844,836) (collectively, the "Prior Debentures"). The Prior Debentures contained conversion prices equal to the lesser of $0.50 per share or 95% of the lowest daily volume weighted average price of our common stock for the 30 days prior to the notice of exercise ("Fair Market Value"), and provided for an adjustment in the conversion price in the event that we completed a financing whereby the price per share of our common stock (or its equivalent on an as-converted basis) was less than the conversion price of the Prior Debentures. As required by the terms of the Prior Debentures and in light of prior financings completed by us, we amended the terms of the Prior Debentures to provide for a conversion price equal to the lesser of $0.30 per share or 95% of the Fair Market Value of our common stock.
In addition, on March 31, 2008, we amended certain warrants previously issued to YA in connection with certain convertible debenture financings to purchase up to an aggregate of 9,452,774 shares of our common stock (the "Prior Warrants"). The Prior Warrants contained an exercise price of $0.50 per share. The Prior Warrants provided for an adjustment in the exercise price and the number of shares issuable under the Prior Warrants in the event that we completed a financing whereby the price per share of our common stock (or its equivalent on an as-converted basis) was less than the exercise price of the applicable Prior Warrant. In light of prior financings completed by us and in accordance with the terms of the Prior Warrants, we amended the Prior Warrants to provide for an exercise price of $0.30 per share.
MARCH 2008 $1,250,000 WARRANT FINANCING
On March 31, 2008, we received gross proceeds totaling $1,250,000 from Kuwait Holding, KSC ("KH") pursuant to a Securities Purchase Agreement dated March 25, 2008 (the "KH SPA"). Pursuant to the KH SPA, we issued two warrants to purchase an aggregate of 6,950,000 shares of our common stock, which have an exercise price of $0.01 per share and a term of five years from the date of issuance (the "KH Warrants"). KH also received piggyback registration rights in connection with the shares of common stock issuable upon exercise of the KH Warrants.
We did not pay any commissions on this transaction.
MARCH 2008 DEBENTURE FINANCING
On March 14, 2008, we entered into a Securities Purchase Agreement (the "March 14, 2008 SPA") with YA pursuant to which we issued secured debentures in the principal amount of $608,000 (the "March Debenture"). The March Debenture was repaid in full with proceeds received by us in connection with the March 2008 Debenture.
In connection with the March Debenture, we entered into an amended security agreement with YA pursuant to which we continued the security interest of YA in all our assets which we granted in connection with debentures issued by us to YA in August 2004.
Commissions to YA in connection with this transaction included monitoring, structuring and legal fees in the total amount of $30,000.
FEBRUARY 2008 BRIDGE LOAN FINANCINGS
On February 21, 2008, we closed on a $300,000 bridge loan financing pursuant to a Convertible Note Purchase Agreement dated February 20, 2008 with one investor, pursuant to which we issued a total of $300,000 in principal amount of convertible notes (the "Notes"). Such notes accrue interest at the rate of 10% per annum and are convertible, together with accrued interest, at the option of the holder into shares of our common stock at a conversion price equal to $0.25 per share. Such notes are repayable on or before the earlier of the date of the next financing completed by us other than a bridge loan financing, or the one year anniversary of the closing date of such notes.
On February 11, 2008, we entered into Convertible Note Purchase Agreements with two investors, pursuant to which we issued a total of $50,000 in principal amount of convertible notes. In connection with these financings, we also issued to such investors warrants to purchase an aggregate of 30,000 shares of our common stock as an inducement to enter into the transactions. Such warrants contain an exercise price of $0.50 per share and are exercisable for a period of five years. The notes accrue interest at the rate of 15% per annum and are convertible, together with accrued and unpaid interest, at the option of the holders into shares of our common stock at a conversion price equal to $0.25 per share. Such notes are repayable on or before the earlier of the date of the next financing completed by us other than a bridge loan financing, or the six month anniversary of the closing date of the Notes.
OCTOBER 2007 PRIVATE PLACEMENT
On October 17, 2007, we received gross proceeds of $6,600,000 in a private placement transaction with International Financial Advisors, K.S.C.C. ("IFA") pursuant to a Securities Purchase Agreement dated October 15, 2007 (the "IFA SPA") and entered into on October 17, 2007. In accordance with the terms of the . . .
U.S. Helicopter Corp - Notification that Quarterly Report will be submitted late (NT 10-Q)
Date : 08/14/2008 @ 4:22PM
Source : Edgar (US Regulatory)
Stock : U.S. Helicopter Corp (USHP)
Quote : 0.2 0.0 (0.00%) @ 10:39AM
U.S. Helicopter Corp - Current report filing (8-K)
Date : 07/21/2008 @ 2:40PM
Source : Edgar (US Regulatory)
Stock : U.S. Helicopter Corp (USHP)
Quote : 0.1 0.0 (0.00%) @ 11:53AM
U.S. Helicopter Corp - Current report filing (8-K)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): July 15, 2008
U.S. HELICOPTER CORPORATION (Exact
Name of Registrant as Specified in Charter)
Delaware 001-32580 27-0096927
------------------------------- ------------- ------------------
(State or Other Jurisdiction of (Commission (IRS Employer
Incorporation or Organization) File Number) Identification No.)6 East River Piers, Suite 216, Downtown Manhattan Heliport, New York, NY 10004
------------------------------------------------------------------------ -----
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (212) 248-2002
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of us under any of the following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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SECTION 1 - REGISTRANT'S BUSINESS AND OPERATIONS
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On July 15, 2008, U.S. Helicopter Corporation ("we", "us" or the "Company") closed on a $1,500,000 bridge loan financing pursuant to a Note Purchase Agreement dated July 3, 2008 with one investor (the "Investor"), pursuant to which we issued a total of $1,500,000 in principal amount of convertible notes (the "Note"). The Note is repayable on the earlier of (a) the first closing of a private placement of our debt or equity securities to institutional investors in an institutional capital raise (the "Institutional Private Placement") or (b) December 31, 2008. To secure repayment of the Note, certain third parties agreed to pledge a total of 375,000 shares of common stock (the "Collateral") of an unrelated, privately held third party corporation pursuant to the terms and provisions of a Pledge and Escrow Agreement.
The Note bears interest at the rate of 15% per annum based on a 360-day year, of which 60 days' worth of interest, equal to $37,500, was prepaid on the closing of the Note. As additional consideration, we paid the Investor upon the closing of the Note an origination fee of five percent (5%) of the amount of the loan, equal to $75,000. We received net proceeds of approximately $585,000 after deducting prepaid interest and fees and expenses of the offering, and after repayment of certain debt and other obligations owed by us. We plan to use the remaining net proceeds received in this financing for working capital.
The Note, together with accrued but unpaid interest, is convertible at the option of the Investor, into shares of our common stock, par value $0.001 per share (the "Common Stock"), at a price equal to the lower of (a) the conversion price for convertible debt issued in the first closing of the Institutional Private Placement or (b) $0.20 per share. The shares issuable upon conversion of the Note are entitled to piggyback registration rights.
In connection with the Note financing, we agreed to issue to the Investor warrants to purchase up to 3,000,000 shares of Common Stock, which have an exercise price of $0.20 per share and a term of five years from the date of issuance. The shares of Common Stock issuable upon exercise of such warrant are entitled to piggyback registration rights.
Certain members of our management agreed to transfer 525,000 shares of Common Stock to the Investor as an inducement to purchase the Note. Such shares are also entitled to piggyback registration rights. In addition, certain members of our management have agreed to transfer a total of 1,225,000 shares of Common Stock to the Pledgors and certain third parties as an inducement to the Pledgors to pledge the Collateral, in consideration of an existing lender's agreement to forbear from exercising its rights under its outstanding note agreement, and other consideration.
Commissions paid by us in connection with this transaction consisted of an 8% placement fee to certain third parties. In addition, we agreed to pay to the Pledgors fees totaling $195,000 as an inducement to pledge the Collateral securing the repayment of the Note.
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The purpose of the Note financing was to provide working capital to us pending completion of an institutional financing. We are also in the process of seeking additional bridge financing of up to $3.0 million. We have been seeking $20.0 million of long term equity financing during the past several months. We have met with a number of strategic investors who have experience in long term aviation finance. We believe that we will conclude such a financing on or before November 1, 2008. We cannot provide assurance, however, that we will be successful in obtaining the required short-term bridge financing or long-term equity financing that we are seeking on a timely basis or at all.
Issuance of the securities sold was exempt from registration pursuant to Rule 506 of Regulation D promulgated under Section 4(2) of the Securities Act. The securities were sold to an accredited investor in private transactions without the use of any form of general solicitation or advertising. The underlying securities are "restricted securities" subject to applicable limitations on resale.
SECTION 2 - FINANCIAL INFORMATION
ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT
See Item 1.01 above.
SECTION 3 - SECURITIES AND TRADING MARKETS
ITEM 3.02. UNREGISTERED SALES OF EQUITY SECURITIES.
See Item 1.01 above.
SECTION 8 - OTHER EVENTS
ITEM 8.01. OTHER EVENTS.
The Company reached an agreement (the "Agreement") as of July 10, 2008 with its primary equipment lessor and maintenance provider (the "Lessor") providing for a 60 day standstill and forbearance period whereby each party has agreed to refrain from seeking to enforce its respective rights under certain lease agreements (the "Lease Agreements") and technical support agreements (the "Support Agreements") relating to three of the Company's aircraft. As part of the Agreement, the Company and the Lessor agreed to a revised payment schedule under the Lease Agreements and the Support Agreements, and the Company preserved its claims against the Lessor up to the amounts paid to the Lessor under such agreements between January 1, 2008 and the commencement of the standstill period. The Company and the Lessor are currently in the process of negotiating a global settlement of their respective claims as they pertain to payment and other obligations under the Lease Agreements and the Support Agreements, including the repair of one aircraft by the Lessor and the possibility of a revised lease agreement for such aircraft. There can be no assurances, however, that the Company and the Lessor will be able to reach a settlement agreement prior to the termination of the standstill and forbearance period on terms favorable to the Company or at all.
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SIGNATURES
Pursuant to the requirements 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.
Date: July 21, 2008
U.S. HELICOPTER CORPORATION
(Registrant)
By: /s/ George J. Mehm, Jr. -------------------------------
George J. Mehm, Jr. Chief Financial Officer and
Sr. Vice President
U.S. HELICOPTER CORPORATION
6 East River Piers, Suite 216
Downtown Manhattan Heliport
New York, New York 10004
http://ih.advfn.com/p.php?pid=nmona&cb=1211755390&article=26477417&symbol=NB%5EUSHP
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Dear Fellow Stockholder:
You are invited to attend the 2008 Annual Meeting of Stockholders of U.S. Helicopter Corporation ("USH" or the "Company"). The meeting will be held at 9:00 AM local time on Thursday, June 19, 2008, at Jasna Polana, 4519 Province Line Road, Princeton, New Jersey 08540. At the meeting, shareholders will vote on the following matters:
o Election of directors;
o Ratification of the appointment of Moore Stephens, P.C. as the Company's independent auditors;
o A proposed amendment to the Company's Certificate of Incorporation to increase its authorized common stock from 95 million to 500 million shares and to increase its authorized preferred stock from 5 million to 25 million shares;
o Approval of the Company's 2007 Stock Incentive Plan; and
o Any other business that may properly come before the meeting.
If you were a record holder of the Company's common stock at the close of business on May 15, 2008, the record date for the annual meeting, you will be entitled to vote at the meeting. A list of shareholders entitled to vote at the meeting will be available for examination by any stockholder, for any purpose germane to the meeting, during normal business hours for ten (10) days prior to the meeting at the law offices of Gallagher, Briody & Butler, 155 Village Boulevard, Suite 201, Princeton, New Jersey 08540. The shareholder list will also be available for examination by any stockholder at the meeting. Space in the meeting will be limited, and admission will be on a first-come, first served basis. To attend the meeting, you will need to show evidence that you are a USH shareholder, or hold a valid proxy from a USH shareholder, as of the record date.
Please read the attached proxy statement carefully and submit your vote as soon as possible. Your vote is important. You can ensure that your shares are voted at the meeting by using our Internet or telephone voting system, or by completing, signing and returning the enclosed proxy/voting instruction card.
Sincerely yours,
/s/ John G. Murphy
-------------------
John G. Murphy
Chief Executive Officer & President
Dated: June 3, 2008
US Helicopter and Delta Air Lines Announce Codeshare Agreement
DL code now available on all US Helicopter 8 Minute Shuttle Flights to JFK
NEW YORK, April 21 /PRNewswire-FirstCall/ -- US Helicopter Corporation ('US Helicopter') (OTC Bulletin Board: USHP) and Delta Air Lines (NYSE: DAL) today announced a codeshare agreement to expedite the process for customers connecting between two New York City heliports and Delta's flights at its New York hub at JFK International Airport.
Effective immediately, Delta has placed its code (DL) on US Helicopter 8 Minute flights that operate between the Downtown Manhattan or the Atlantic Metroport at East 34th Street Heliport's to or from Delta's global connecting flights at New York's JFK International Airport.
US Helicopter transportation is complimentary with the purchase of an applicable Delta international BusinessElite(R) ticket to and from Africa, Brazil, Europe, India, and Israel and is valid for travel through Dec. 31, 2008.
In addition, Delta's passengers will enjoy the benefits of US Helicopter service including:
-- Eight-minute flight between New York City Heliports in midtown and
downtown Manhattan and JFK's Gate 11 in Terminal 3;
-- TSA security clearance at NYC Heliports. Delta passengers remain on the
'secure side' upon arrival at JFK. TSA security screening is not
required again at JFK;
-- Convenient check-in and boarding passes to final destinations (for both
domestic and international travelers departing from and arriving in
Manhattan);
-- Baggage check to final destination on Delta flights -- for passengers
traveling both to and from Manhattan
Codeshare itineraries are eligible for check in at delta.com, airport kiosks or with a US Helicopter or Delta Air Lines ticket agent. Members of Delta's frequent flyer program also earn 500 OnePass miles when traveling on codeshare flights operated by US Helicopter.
'US Helicopter and Delta offer a superior product by working together on program benefits that maximize our 'Eight Minute Airport Shuttle' service for time-sensitive global business travelers,' comments Jerry Murphy, Chief Executive Officer and President of US Helicopter. 'Now, we not only offer a hassle-free airport commute, but also simple methods of booking travel as well.'
US Helicopter and Delta Air Lines have also partnered to provide eight-minute shuttle service between Manhattan and New York JFK International Airport. US Helicopter customers traveling on Delta flights complete passenger and baggage check-in and security screening at the heliport allowing customers upon arrival to proceed directly to their departure gate at JFK Terminal 3. Delta Air Lines plans to offer customers a total of 204 daily departures to 93 destinations from New York-JFK by June 2008. Since 2006, Delta has invested more than $50 million in facility improvements and product enhancements at its JFK hub. A one-way ticket aboard US Helicopter starts at $159, plus applicable security fees and can be purchased by visiting http://www.delta.com or http://www.flyush.com. US Helicopter's flights between New York JFK International Airport and two New York City heliports operate from 7:30 a.m. to 7.40 p.m.
You saw that Middle East connection?......that is interesting isn't it?
cornell sit in the boot by USHP, or ???
investor from Kuwait ??
This is part of it.........and the company does need to raise capital..........its an interesting company. I love what it represents.........and the service they provide.........luxury helicopters with first class transportation........I hope its sucessful but they will need time........
REGDEX Notification of a private placement. The form is not electronically filed with SEC EDGAR System and is available only in paper form 1 02/25/08
mmh, i think i buy same shares.
one question.
Why USHP go down from Dez. 07 - today ?
This is an interesting business operation, and no doubt a very much needed and demanding service for many who want a quick way out of the airport, Mahattan is approx 40 miles from JFK. If your building has a heliport better yet! :))). As that may be things to consider before taking on an investment with this company. Its 2 years old, and relatively new, it will take time to see if this develops into a really profitable enterprise.
U.S. HELICOPTER CORPORATION
NOTES TO FINANCIAL STATEMENTS
(2) GOING CONCERN (CONTINUED)
$22 million through $12 million of operating lease financing and $10 million
of some combination of debt, equity or SEDA draws, we would have sufficient
funds to meet our needs for working capital, repayment of debt and for capital
improvements over the next 12 months. There can be no assurances, however, that
we will be able to complete such financings on terms favorable to us or at all.
(3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements, as well as reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
CASH EQUIVALENTS - We consider all highly liquid investments with original
maturities of three months or less when purchased to be cash equivalents. We had
no cash equivalents at September 30, 2007.
RESTRICTED CASH - We had restricted cash of $180,071 at September 30, 2007. Our
restricted cash at September 30, 2007 related to a cash deposit securing a
letter of credit we were required to post.
CONCENTRATIONS OF CREDIT RISK - Financial instruments that potentially subject
us to significant concentrations of credit risk consist principally of cash and
cash equivalents and accounts receivable.
We maintain our cash and cash equivalents in accounts with major financial
institutions in the United States in the form of demand deposits and money
market accounts. Deposits in these banks may exceed the amounts of insurance
provided on such deposits. As of September 30, 2007, we had approximately
$147,880, in deposits subjected to such risk. We have not experienced any losses
on our deposits of cash and cash equivalents.
We generally do not require collateral related to our financial instruments.
Concentrations of credit risk with respect to trade accounts receivable are
limited due to the fact that most customers pay for the flights in advance of
the flights. The allowance for doubtful accounts as of September 30, 2007 was
$0. We routinely assess the financial strength of customers and, based upon
factors concerning credit risk, we establish an allowance for doubtful accounts.
Management believes that accounts receivable credit risk exposure beyond such
allowance is limited.
FAIR VALUE OF FINANCIAL INSTRUMENTS - Statement of Financial Accounting
Standards ("SFAS") No. 107, "Disclosure about Fair Value of Financial
Instruments," require the disclosure of fair values for all financial
statements, both on- and off-balance-sheet, for which it is practicable to
estimate fair value. We estimate that there are no material variations between
fair value and book value of our financial assets or liabilities as of September
30, 2007.
PROPERTY AND EQUIPMENT - We record our property and equipment at cost less
accumulated depreciation. For financial reporting purposes, we use the
straight-line method to compute depreciation based upon estimated useful lives
of two to five years for flight equipment and one to seven years for other
equipment. Leasehold improvements are amortized over the shorter of the related
lease term or the estimated life of the improvements. Equipment under capital
leases are amortized over the lease term and such amortization is included in
the depreciation of property and equipment. Upon selling or otherwise disposing
of property and equipment, we remove cost and accumulated depreciation from the
accounts and reflect any resulting gain or loss in earnings. Depreciation and
amortization totaled $311,592 and $161,081 for the nine months ended September
30, 2007 and 2006 and $96,553 and $82,012 for the three months ended September
30, 2007 and 2006, respectively.
IMPAIRMENT OF LONG-LIVED ASSETS -We review our long-lived assets and
identifiable intangibles for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. When such factors and circumstances exist, we compare the projected
undiscounted future cash flows associated with the future use and disposal of
the related asset or group of assets to their respective carrying amounts.
Impairment, if any, is measured as the excess of the carrying amount over the
NT 10-K Notification that form 10-K will be submitted late 4 03/31/08
10Q ~ 3rd quarter 2007
http://sec.gov/Archives/edgar/data/1309140/000090901207001446/t303846.txt
US Helicopter Signs Agreement with Delta Air Lines to Extend JFK 8 Minute Airport Shuttle Service
US Helicopter service continues to support & feed Delta's expanded global routes
NEW YORK, April 7, 2008 /PRNewswire-FirstCall/ -- On the heels of a first successful year of partnership, Delta today signed an agreement to extend its partnership with US Helicopter (OTC Bulletin Board: USHP). Customers traveling to or from Delta's hub at New York's John F. Kennedy International airport will continue to enjoy the only eight-minute airport shuttle service, through the partnership between Delta and US Helicopter Corporation. The service operates from two New York City heliports exclusively to Gate 11 at Delta's JFK Terminal 3.
Delta's global travelers will continue to enjoy unrivaled benefits from US Helicopter service including:
-- Eight-minute travel time between New York City Heliports and JFK;
-- Federally regulated TSA security clearance at NYC Heliports before
arriving at JFK for departing flights;
-- Convenient check-in and boarding passes to final destinations and
-- Baggage check to final destination.
'We are delighted to continue and expand our partnership and to support Delta's global route network; by offering business travelers unparalleled service during their airport commute to and from JFK and Manhattan's heliports,' said Jerry Murphy, chief executive officer and president of US Helicopter.
US Helicopter operates 27 daily flights, Monday through Friday, to and from the Downtown Manhattan Heliport, near Wall Street, the Atlantic Metroport at East 34th Street in Midtown Manhattan and Delta's Terminal 3, Gate 11 at JFK. Additional service is offered between Manhattan and Bridgeport, CT. The ticket prices for US Helicopter begin at $159 one-way, plus additional taxes and fees and may be purchased via www.flyush.com or by calling (877) 262-7676.
About US Helicopter
US Helicopter (OTC Bulletin Board: USHP) is the first scheduled airline helicopter service between Manhattan, JFK and Newark Airports in more than two decades. Presently, US Helicopter operates 325 weekly flights to and from the Downtown Manhattan Heliport, Atlantic Metroport at East 34th Street, JFK International Airport and Newark Liberty International Airport, as well as service to/from Downtown Manhattan Heliport and Bridgeport Sikorsky Memorial Airport serving Fairfield and New Haven counties.
Founded in 2003, US Helicopter provides scheduled, reliable, fast and affordable helicopter transportation designed to meet the needs of time-sensitive business travelers. All flights utilize state-of-the-art Sikorsky S-76 helicopters configured for eight passengers and staffed with two pilots. US Helicopter Scheduled Airline Service is designed for business travelers ... 'because you're too important to wait.'
That is one ugly chart........!
I think it goes lower. Lots of stock issuances over the last year.
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