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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q







|x | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended: December 31, 2007



| ̈ | 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 000-51115





Avantair, Inc.

(Exact Name of registrant as specified in its charter)







|                         |  |                              
|------------------------ |  | -----------------------------
|Delaware                 |  | 20-1635240                   
|(State of Incorporation) |  | (I.R.S. Employer I.D. Number)



|                                              |  |           
|--------------------------------------------- |  | ----------
|4311 General Howard Drive Clearwater, Florida |  | 33762     
|(Address of principal executive offices)      |  | (zip code)

(727) 539- 0071

(Registrants Telephone Number, Including Area Code)





Securities registered
pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

Units consisting of one share of
Common Stock, par value $.0001 per share, and two Warrants

Common Stock, $.0001 par value per share

Warrants to purchase shares of Common Stock





Indicate by check mark whether
the registrant: (1) has 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   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See
definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.

Large Accelerated
Filer   ̈    Accelerated Filer   ̈    Non-Accelerated Filer  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).    Yes   ̈    No  x









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As of February 14, 2008 there were 15,220,817 shares of Common Stock, $.0001 par value per share,
outstanding.

CERTAIN DEFINITIONS

Unless the context indicates otherwise, the terms Avantair, the Company, Ardent, we, our, and us refer to Avantair, Inc. and, where appropriate, its subsidiary, or its
predecessor, Ardent Acquisition Corporation.

FORWARD-LOOKING STATEMENTS

We believe that some of the information in this document constitutes forward-looking statements. You may identify these statements by forward-looking
words such as may, expect, anticipate, contemplate, believe, estimate, intends, and continue or similar words. You should read such statements carefully
because they discuss future expectations; contain information which could impact future results of operations or financial condition; or state other forward-looking information.

We believe it is important to communicate our expectations to the Avantair stockholders. However, you should be aware that there are risks, uncertainties
and events that may cause actual results to differ materially from our expectations, including among other things: negative cash flow and losses; reliance on a limited number of suppliers; continued compliance with government regulations and changes
in government regulations; legislation or regulatory environments, requirements or changes affecting the businesses in which Avantair is engaged; actions by competitors; Avantairs dependence on its key management personnel; fluctuations in
fuel costs; and general economic conditions.

You are cautioned not to place undue reliance on these forward-looking statements.



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Table of Contents



|        |  |                                                                                                                              |  |            
|------- |  | ---------------------------------------------------------------------------------------------------------------------------- |  | -----------
|        |  |                                                                                                                              |  | PageNumbers
|PART I  |  | FINANCIAL INFORMATION                                                                                                        |  |            
|        |  |                                                                                                                             
|ITEM 1: |  | Financial Statements                                                                                                         |  |            
|        |  |                                                                                                                             
|        |  | Condensed Consolidated Balance Sheets at December 31, 2007 (unaudited) and June 30, 2007                                     |  | 2          
|        |  |                                                                                                                             
|        |  | Condensed Consolidated Statements of Operations for the three months and six months ended December 31, 2007 (unaudited)      |  | 4          
|        |  |                                                                                                                             
|        |  | Condensed Consolidated Statements of Changes in Stockholders Deficit for the six months ended December 31, 2007 (unaudited) |  | 5          
|        |  |                                                                                                                             
|        |  | Condensed Consolidated Statements of Cash Flows for the six months ended December 31, 2007 and 2006 (unaudited)              |  | 6          
|        |  |                                                                                                                             
|        |  | Notes to Condensed Consolidated Financial Statements (unaudited)                                                             |  | 8          
|        |  |                                                                                                                             
|Item 2. |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                        |  | 13         
|        |  |                                                                                                                             
|Item 3  |  | Quantitative and Qualitative Disclosures about Market Risk                                                                   |  | 17         
|        |  |                                                                                                                             
|Item 4. |  | Controls and Procedures                                                                                                      |  | 17         
|        |  |                                                                                                                             
|PART II |  | OTHER INFORMATION                                                                                                            |  | 18         
|        |  |                                                                                                                             
|Item 6. |  | Exhibits                                                                                                                     |  | 18         
|        |  |                                                                                                                             
|        |  | Signatures                                                                                                                   |  | 19         



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##### Table of Contents

PART I  FINANCIAL INFORMATION



|Item 1. | Financial Statements.
|------- | ---------------------

AVANTAIR, INC. AND SUBSIDIARIES

(Formerly Ardent Acquisition Corporation)

Condensed Consolidated Balance Sheets



|                                                                                                                                                     |  |                  |             |                 |   |            
|---------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------- | ----------- | --------------- | - | -----------
|                                                                                                                                                     |  | December 31,2007 |             | June 30,2007   
|                                                                                                                                                     |  | (unaudited)      |             | (Notes 2 and 6)
|ASSETS                                                                                                                                               |  |                  |             |                 |   |            
|CURRENT ASSETS                                                                                                                                       |  |                  |             |                 |   |            
|Cash and cash equivalents                                                                                                                            |  | $                | 2,943,220   |                 | $ | 12,577,468 
|Accounts receivable, net of allowance for doubtful accounts of $340,899 at December 31, 2007 and $460,377 at June 30,
2007                           |  |                  | 7,753,041   |                 |   | 5,087,491  
|Inventory                                                                                                                                            |  |                  | 490,957     |                 |   | 579,517    
|Current portion of aircraft costs related to fractional sales                                                                                        |  |                  | 36,875,785  |                 |   | 31,895,085 
|Current portion of notes receivable                                                                                                                  |  |                  | 1,213,711   |                 |   | 1,015,163  
|Prepaid expenses and other current assets                                                                                                            |  |                  | 363,303     |                 |   | 378,394    
|                                                                                                                                                     |  |                  |             |                 |   |            
|Total current assets                                                                                                                                 |  |                  | 49,640,017  |                 |   | 51,533,118 
|                                                                                                                                                     |  |                  |             |                 |   |            
|AIRCRAFT COSTS RELATED TO FRACTIONAL SHARE SALES- net of current portion                                                                             |  |                  | 98,152,781  |                 |   | 74,870,704 
|                                                                                                                                                     |  |                  |             |                 |   |            
|PROPERTY AND EQUIPMENT, at cost, net of accumulated depreciation and amortization of $7,400,419 at December 31, 2007 and
$5,654,306 at June 30, 2007 |  |                  | 25,159,049  |                 |   | 15,380,698 
|                                                                                                                                                     |  |                  |             |                 |   |            
|OTHER ASSETS                                                                                                                                         |  |                  |             |                 |   |            
|Cash - restricted                                                                                                                                    |  |                  | 2,529,552   |                 |   | 2,942,983  
|Deposits                                                                                                                                             |  |                  | 11,967,488  |                 |   | 9,904,054  
|Deferred maintenance agreement                                                                                                                       |  |                  | 2,430,574   |                 |   | 2,691,539  
|Notes receivable- net of current portion                                                                                                             |  |                  | 766,986     |                 |   | 1,327,552  
|Goodwill                                                                                                                                             |  |                  | 1,141,159   |                 |   | 1,141,159  
|Other assets                                                                                                                                         |  |                  | 976,945     |                 |   | 698,453    
|                                                                                                                                                     |  |                  |             |                 |   |            
|Total other assets                                                                                                                                   |  |                  | 19,812,704  |                 |   | 18,705,740 
|                                                                                                                                                     |  |                  |             |                 |   |            
|Total assets                                                                                                                                         |  | $                | 192,764,551 |                 | $ | 160,490,260
|                                                                                                                                                     |  |                  |             |                 |   |            

See Notes to Condensed Consolidated Financial Statements.



2



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AVANTAIR, INC. AND SUBSIDIARIES

(Formerly Ardent Acquisition Corporation)

Condensed Consolidated Balance
Sheets



|                                                                                                                           |  |                  |             |   |                 |   |             |  
|-------------------------------------------------------------------------------------------------------------------------- |  | ---------------- | ----------- | - | --------------- | - | ----------- | -
|                                                                                                                           |  | December 31,2007 |             |   | June 30,2007    |  
|                                                                                                                           |  | (unaudited)      |             |   | (Notes 2 and 6) |  
|LIABILITIES AND STOCKHOLDERS DEFICIT                                                                                      |  |                  |             |   |                 |   |             |  
|CURRENT LIABILITIES                                                                                                        |  |                  |             |   |                 |   |             |  
|Accounts payable                                                                                                           |  | $                | 8,507,007   |   |                 | $ | 5,765,189   |  
|Accrued liabilities                                                                                                        |  |                  | 2,238,046   |   |                 |   | 3,141,061   |  
|Customer deposits                                                                                                          |  |                  | 507,421     |   |                 |   | 612,500     |  
|Current portion of deferred revenue related to fractional aircraft share sales                                             |  |                  | 43,879,282  |   |                 |   | 38,058,547  |  
|Current portion of notes payable                                                                                           |  |                  | 10,770,269  |   |                 |   | 4,412,288   |  
|Unearned management fee and charter card revenues                                                                          |  |                  | 11,712,048  |   |                 |   | 7,950,636   |  
|                                                                                                                           |  |                  |             |   |                 |   |             |  
|Total current liabilities                                                                                                  |  |                  | 77,614,073  |   |                 |   | 59,940,221  |  
|                                                                                                                           |  |                  |             |   |                 |   |             |  
|Notes payable, net of current portion                                                                                      |  |                  | 23,887,084  |   |                 |   | 18,560,570  |  
|Deferred revenue related to fractional aircraft share sales, net of current portion                                        |  |                  | 96,755,350  |   |                 |   | 92,186,334  |  
|Other liabilities                                                                                                          |  |                  | 2,454,781   |   |                 |   | 1,762,159   |  
|                                                                                                                           |  |                  |             |   |                 |   |             |  
|Total long-term liabilities                                                                                                |  |                  | 123,097,215 |   |                 |   | 112,509,063 |  
|                                                                                                                           |  |                  |             |   |                 |   |             |  
|Total liabilities                                                                                                          |  |                  | 200,711,288 |   |                 |   | 172,449,284 |  
|                                                                                                                           |  |                  |             |   |                 |   |             |  
|COMMITMENTS AND CONTINGENCIES                                                                                              |  |                  |             |   |                 |   |             |  
|Preferred stock series A convertible, $.0001 par value, authorized 300,000 shares; 152,000 shares issued and
outstanding |  |                  | 14,395,170  |   |                 |   |            |  
|                                                                                                                           |  |                  |             |   |                 |   |             |  
|STOCKHOLDERS DEFICIT                                                                                                      |  |                  |             |   |                 |   |             |  
|Preferred stock, $.0001 par value, authorized 700,000 shares; none issued                                                  |  |                  |            |   |                 |   |            |  
|Common stock, Class A, $.0001 par value, 75,000,000 shares authorized, 15,220,817 shares issued and outstanding            |  |                  | 1,522       |   |                 |   | 1,522       |  
|Additional paid-in capital                                                                                                 |  |                  | 45,846,935  |   |                 |   | 46,124,857  |  
|Accumulated deficit                                                                                                        |  |                  | (68,190,364 | ) |                 |   | (58,085,403 | )
|                                                                                                                           |  |                  |             |   |                 |   |             |  
|Total stockholders deficit                                                                                                |  |                  | (22,341,907 | ) |                 |   | (11,959,024 | )
|                                                                                                                           |  |                  |             |   |                 |   |             |  
|Total liabilities and stockholders deficit                                                                                |  | $                | 192,764,551 |   |                 | $ | 160,490,260 |  
|                                                                                                                           |  |                  |             |   |                 |   |             |  

See Notes to Condensed Consolidated Financial Statements.



3



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AVANTAIR, INC. AND SUBSIDIARIES

(Formerly Ardent Acquisition Corporation)

Condensed Consolidated Statements of Operations

(Unaudited)



|                                                                                                                                                                                                 |  |                    |            |   |                  |   |            |                  |  |   |                  |   |  |   |             |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------ | ---------- | - | ---------------- | - | ---------- | ---------------- |  | - | ---------------- | - |  | - | ----------- | -
|                                                                                                                                                                                                 |  | Three Months Ended |            |   | Six Months Ended |  
|                                                                                                                                                                                                 |  | December 31,2007   |            |   | December 31,2006 |   |            | December 31,2007 |  |   | December 31,2006 |  
|Revenues                                                                                                                                                                                         |  |                    |            |   |                  |   |            |                  |  |   |                  |   |  |   |             |  
|Fractional aircraft sold                                                                                                                                                                         |  | $                  | 10,646,457 |   |                  | $ | 7,051,298  |                  |  | $ | 20,450,250       |   |  | $ | 14,544,106  |  
|Maintenance and management fees                                                                                                                                                                  |  |                    | 14,148,217 |   |                  |   | 9,218,257  |                  |  |   | 27,122,813       |   |  |   | 17,247,335  |  
|Charter card revenue                                                                                                                                                                             |  |                    | 2,123,003  |   |                  |   | 690,019    |                  |  |   | 3,524,086        |   |  |   | 1,081,539   |  
|Demonstration fees and other revenues                                                                                                                                                            |  |                    | 1,712,588  |   |                  |   | 941,348    |                  |  |   | 3,187,616        |   |  |   | 1,804,659   |  
|                                                                                                                                                                                                 |  |                    |            |   |                  |   |            |                  |  |   |                  |   |  |   |             |  
|Total revenue                                                                                                                                                                                    |  |                    | 28,630,265 |   |                  |   | 17,900,922 |                  |  |   | 54,284,765       |   |  |   | 34,677,639  |  
|                                                                                                                                                                                                 |  |                    |            |   |                  |   |            |                  |  |   |                  |   |  |   |             |  
|Operating Expenses                                                                                                                                                                               |  |                    |            |   |                  |   |            |                  |  |   |                  |   |  |   |             |  
|Cost of fractional aircraft shares sold                                                                                                                                                          |  |                    | 8,921,684  |   |                  |   | 6,421,219  |                  |  |   | 16,969,110       |   |  |   | 10,784,485  |  
|Cost of flight operations                                                                                                                                                                        |  |                    | 13,389,081 |   |                  |   | 8,306,025  |                  |  |   | 25,486,596       |   |  |   | 15,946,910  |  
|Cost of fuel                                                                                                                                                                                     |  |                    | 3,915,240  |   |                  |   | 2,392,199  |                  |  |   | 7,606,661        |   |  |   | 4,603,820   |  
|General and administrative expenses (including share based compensation of $115,920 and $231,275 for the three and six months ended 2007 and
$2,542,400 for the three and six months ended 2006) |  |                    | 4,819,886  |   |                  |   | 5,569,384  |                  |  |   | 9,352,942        |   |  |   | 10,131,336  |  
|Depreciation and amortization                                                                                                                                                                    |  |                    | 984,673    |   |                  |   | 177,990    |                  |  |   | 1,746,113        |   |  |   | 366,099     |  
|Selling expenses                                                                                                                                                                                 |  |                    | 1,389,470  |   |                  |   | 1,033,873  |                  |  |   | 2,413,326        |   |  |   | 1,858,230   |  
|                                                                                                                                                                                                 |  |                    |            |   |                  |   |            |                  |  |   |                  |   |  |   |             |  
|Total operating expenses                                                                                                                                                                         |  |                    | 33,420,034 |   |                  |   | 23,900,690 |                  |  |   | 63,574,748       |   |  |   | 43,690,880  |  
|                                                                                                                                                                                                 |  |                    |            |   |                  |   |            |                  |  |   |                  |   |  |   |             |  
|Loss from operations before interest                                                                                                                                                             |  |                    | (4,789,769 | ) |                  |   | (5,999,768 | )                |  |   | (9,289,983       | ) |  |   | (9,013,241  | )
|                                                                                                                                                                                                 |  |                    |            |   |                  |   |            |                  |  |   |                  |   |  |   |             |  
|Other income (expenses)                                                                                                                                                                          |  |                    |            |   |                  |   |            |                  |  |   |                  |   |  |   |             |  
|Interest income                                                                                                                                                                                  |  |                    | 142,131    |   |                  |   | 74,848     |                  |  |   | 334,853          |   |  |   | 154,096     |  
|Interest expense                                                                                                                                                                                 |  |                    | (664,625   | ) |                  |   | (670,201   | )                |  |   | (1,149,831       | ) |  |   | (1,514,333  | )
|                                                                                                                                                                                                 |  |                    |            |   |                  |   |            |                  |  |   |                  |   |  |   |             |  
|Total other expenses                                                                                                                                                                             |  |                    | (522,494   | ) |                  |   | (595,353   | )                |  |   | (814,978         | ) |  |   | (1,360,237  | )
|                                                                                                                                                                                                 |  |                    |            |   |                  |   |            |                  |  |   |                  |   |  |   |             |  
|Net loss                                                                                                                                                                                         |  | $                  | (5,312,263 | ) |                  | $ | (6,595,121 | )                |  | $ | (10,104,961      | ) |  | $ | (10,373,478 | )
|Preferred stock dividend                                                                                                                                                                         |  |                    | (157,600   | ) |                  |   |           |                  |  |   | 157,600          |   |  |   |            |  
|Accretion of convertible preferred stock                                                                                                                                                         |  |                    | (10,276    | ) |                  |   |           |                  |  |   | (10,276          | ) |  |   |            |  
|                                                                                                                                                                                                 |  |                    |            |   |                  |   |            |                  |  |   |                  |   |  |   |             |  
|Net loss attributed to common stockholders                                                                                                                                                       |  | $                  | (5,480,139 | ) |                  | $ | (6,595,121 | )                |  | $ | (9,957,637       | ) |  | $ | (10,373,478 | )
|                                                                                                                                                                                                 |  |                    |            |   |                  |   |            |                  |  |   |                  |   |  |   |             |  
|Loss per common share:                                                                                                                                                                           |  |                    |            |   |                  |   |            |                  |  |   |                  |   |  |   |             |  
|Basic and Diluted                                                                                                                                                                                |  | $                  | (0.35      | ) |                  | $ | (1.00      | )                |  | $ | (0.66            | ) |  | $ | (2.10       | )
|                                                                                                                                                                                                 |  |                    |            |   |                  |   |            |                  |  |   |                  |   |  |   |             |  
|Weighted-average common shares outstanding:                                                                                                                                                      |  |                    |            |   |                  |   |            |                  |  |   |                  |   |  |   |             |  
|Basic and diluted                                                                                                                                                                                |  |                    | 15,220,817 |   |                  |   | 6,610,991  |                  |  |   | 15,220,817       |   |  |   | 4,949,790   |  
|                                                                                                                                                                                                 |  |                    |            |   |                  |   |            |                  |  |   |                  |   |  |   |             |  

See Notes to Condensed Consolidated Financial Statements.



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AVANTAIR, INC. AND SUBSIDIARIES

(Formerly Ardent Acquisition Corporation)

Condensed Consolidated Statements of Changes in Stockholders Deficit

For the six months ended December 31, 2007

(Unaudited)



|                                                                                              |  |              |  |            |       |         |             |            |         |          |   |             |               |  |         |            |   |  |   |             |  
|--------------------------------------------------------------------------------------------- |  | ------------ |  | ---------- | ----- | ------- | ----------- | ---------- | ------- | -------- | - | ----------- | ------------- |  | ------- | ---------- | - |  | - | ----------- | -
|                                                                                              |  | Class A      |  | Additional |       |         |             |            |         |          |   |             | Total         | 
|                                                                                              |  | Common Stock |  | Paid-In    |       |         | Accumulated |            |         | Treasury |   |             | Stockholders | 
|                                                                                              |  | Shares       |  | Amount     |       | Capital |             |            | Deficit |          |   | Stock       |               |  | Deficit |           
|Balance, June 30, 2007, as previously reported                                                |  | 15,220,817   |  | $          | 1,522 |         | $           | 46,124,857 |         |          | $ | (56,198,527 | )             |  | $       | (1,886,876 | ) |  | $ | (11,959,024 | )
|                                                                                              |  |              |  |            |       |        
|Restatement for retirement of treasury stock                                                  |  |              |  |            |       |         |             |            |         |          |   | (1,886,876  | )             |  |         | 1,886,876  |   |  |   |            |  
|                                                                                              |  |              |  |            |       |         |             |            |         |          |   |             |               |  |         |            |   |  |   |             |  
|Balance, June 30, 2007, as restated                                                           |  | 15,220,817   |  |            | 1,522 |         |             | 46,124,857 |         |          |   | (58,085,403 | )             |  |         |           |   |  |   | (11,959,024 | )
|                                                                                              |  |              |  |            |       |        
|Expenses associated with registration of shares sold in private placement                     |  |              |  |            |       |         |             | (341,321   | )       |          |   |             |               |  |         |            |   |  |   | (341,321    | )
|                                                                                              |  |              |  |            |       |        
|Accretion of expenses associated with issuance of Preferred Stock                             |  |              |  |            |       |         |             | (10,276    | )       |          |   |             |               |  |         |            |   |  |   | (10,276     | )
|                                                                                              |  |              |  |            |       |        
|Share based compensation                                                                      |  |              |  |            |       |         |             | 231,275    |         |          |   |             |               |  |         |            |   |  |   | 231,275     |  
|                                                                                              |  |              |  |            |       |        
|Accrued dividend on class A convertible preferred stock, $1.18 per share and $.65 per share |  |              |  |            |       |         |             | (157,600   | )       |          |   |             |               |  |         |            |   |  |   | (157,600    | )
|                                                                                              |  |              |  |            |       |        
|Net Loss                                                                                      |  |              |  |            |       |         |             |            |         |          |   | (10,104,961 | )             |  |         |            |   |  |   | (10,104,961 | )
|                                                                                              |  |              |  |            |       |         |             |            |         |          |   |             |               |  |         |            |   |  |   |             |  
|Balance, December 31, 2007                                                                    |  | 15,220,817   |  | $          | 1,522 |         | $           | 45,846,935 |         |          | $ | (68,190,364 | )             |  | $       |           |   |  | $ | (22,341,907 | )
|                                                                                              |  |              |  |            |       |         |             |            |         |          |   |             |               |  |         |            |   |  |   |             |  

See Notes to Condensed Consolidated Financial Statements.



5



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##### Table of Contents

AVANTAIR, INC. AND SUBSIDIARIES

(Formerly Ardent Acquisition Corporation)

Condensed Consolidated Statements of Cash Flows

(Unaudited)



|                                                                            |  |                  |             |   |                  |   |             |  
|--------------------------------------------------------------------------- |  | ---------------- | ----------- | - | ---------------- | - | ----------- | -
|                                                                            |  | Six Months Ended |            
|                                                                            |  | December 31,2007 |             |   | December 31,2006 |  
|OPERATING ACTIVITIES:                                                       |  |                  |             |   |                  |   |             |  
|Net loss                                                                    |  | $                | (10,104,961 | ) |                  | $ | (10,373,478 | )
|Adjustments to reconcile net loss to net cash used in operating activities: |  |                  |             |   |                  |   |             |  
|Depreciation and amortization                                               |  |                  | 1,746,113   |   |                  |   | 366,099     |  
|Share-based compensation                                                    |  |                  | 231,275     |   |                  |   | 2,542,400   |  
|Decrease in allowance for doubtful accounts                                 |  |                  | (119,478    | ) |                  |   |            |  
|Changes in operating assets and liabilities:                                |  |                  |             |   |                  |   |             |  
|Accounts receivable                                                         |  |                  | (2,546,072  | ) |                  |   | (1,157,233  | )
|Inventory                                                                   |  |                  | 88,560      |   |                  |   | (4,748,153  | )
|Prepaid expenses and other current assets                                   |  |                  | 15,091      |   |                  |   | (302,983    | )
|Aircraft costs related to fractional share sales                            |  |                  | (28,262,777 | ) |                  |   | (30,536,525 | )
|Restricted cash                                                             |  |                  | 413,431     |   |                  |   |            |  
|Deposits                                                                    |  |                  | (2,063,434  | ) |                  |   | 1,911,354   |  
|Deferred maintenance agreement                                              |  |                  | 260,965     |   |                  |   | 211,695     |  
|Unearned management fee and charter card revenue                            |  |                  | 3,665,812   |   |                  |   | 2,498,052   |  
|Notes receivable                                                            |  |                  | 362,018     |   |                  |   | 961,007     |  
|Other assets                                                                |  |                  | (278,492    | ) |                  |   | (524,512    | )
|Accounts payable                                                            |  |                  | 2,741,818   |   |                  |   | (1,009,417  | )
|Accrued liabilities                                                         |  |                  | (903,015    | ) |                  |   | 1,487,649   |  
|Deferred revenue related to fractional aircraft share sales                 |  |                  | 10,389,751  |   |                  |   | 15,915,770  |  
|Customer deposits                                                           |  |                  | (105,079    | ) |                  |   | (352,073    | )
|Other liabilities                                                           |  |                  | 692,622     |   |                  |   | (101,514    | )
|                                                                            |  |                  |             |   |                  |   |             |  
|Net cash used in operating activities                                       |  |                  | (23,775,852 | ) |                  |   | (23,211,862 | )
|                                                                            |  |                  |             |   |                  |   |             |  
|                                                                            |  |                 
|INVESTING ACTIVITIES:                                                       |  |                  |             |   |                  |   |             |  
|Proceeds from sale of property and equipment                                |  |                  |            |   |                  |   | 4,200,000   |  
|Capital expenditures                                                        |  |                  | (2,693,322  | ) |                  |   | (414,027    | )
|                                                                            |  |                  |             |   |                  |   |             |  
|Net cash (used in) provided by investing activities                         |  |                  | (2,693,322  | ) |                  |   | 3,785,973   |  
|                                                                            |  |                  |             |   |                  |   |             |  

See Notes to Condensed Consolidated Financial Statements



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AVANTAIR, INC. AND SUBSIDIARIES

(Formerly Ardent Acquisition Corporation)

Condensed Consolidated Statements
of Cash Flows

(Unaudited)



|                                                                  |  |                  |            |   |                  |   |            |  
|----------------------------------------------------------------- |  | ---------------- | ---------- | - | ---------------- | - | ---------- | -
|                                                                  |  | Six Months Ended |           
|                                                                  |  | December 31,2007 |            |   | December 31,2006 |  
|FINANCING ACTIVITIES:                                             |  |                  |            |   |                  |   |            |  
|Borrowings under long-term notes payable                          |  |                  | 2,200,000  |   |                  |   | 10,703,204 |  
|Borrowings under line of credit                                   |  |                  |           |   |                  |   | 7,581,365  |  
|Borrowings under floor plan agreement                             |  |                  | 5,067,791  |   |                  |   |           |  
|Principal payments on long-term notes payable                     |  |                  | (4,318,838 | ) |                  |   | (2,453,675 | )
|Principal payments on line of credit                              |  |                  |           |   |                  |   | (3,780,000 | )
|Proceeds from issuance of stock                                   |  |                  |           |   |                  |   | 8,550,000  |  
|Proceeds from issuance of preferred stock-net                     |  |                  | 14,227,294 |   |                  |   |           |  
|Cost of registration of private placement shares                  |  |                  | (341,321   | ) |                  |   |           |  
|Advances to stockholder                                           |  |                  |           |   |                  |   | (118,339   | )
|Cost of repurchase of class B common stock                        |  |                  |           |   |                  |   | (735,583   | )
|                                                                  |  |                  |            |   |                  |   |            |  
|Net cash provided by financing activities                         |  |                  | 16,834,926 |   |                  |   | 19,746,972 |  
|                                                                  |  |                  |            |   |                  |   |            |  
|Net (decrease) increase in cash and cash equivalents              |  |                  | (9,634,248 | ) |                  |   | 321,083    |  
|Cash and cash equivalents, beginning of the period                |  |                  | 12,577,468 |   |                  |   | 2,175,734  |  
|                                                                  |  |                  |            |   |                  |   |            |  
|Cash and cash equivalents, end of the period                      |  | $                | 2,943,220  |   |                  | $ | 2,496,817  |  
|                                                                  |  |                  |            |   |                  |   |            |  
|                                                                  |  |                 
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                 |  |                  |            |   |                  |   |            |  
|Interest paid (net of amounts capitalized)                        |  | $                | 1,023,588  |   |                  | $ | 1,028,494  |  
|                                                                  |  |                  |            |   |                  |   |            |  
|                                                                  |  |                 
|SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES          |  |                  |            |   |                  |   |            |  
|Accretion of Series A convertible preferred stock                 |  | $                | 10,276     |   |                  | $ |           |  
|                                                                  |  |                  |            |   |                  |   |            |  
|Aircraft purchased under capital lease obligation                 |  | $                | 4,828,642  |   |                  | $ |           |  
|                                                                  |  |                  |            |   |                  |   |            |  
|Aircraft purchased under long-term notes payable                  |  | $                | 3,906,900  |   |                  | $ |           |  
|                                                                  |  |                  |            |   |                  |   |            |  
|Dividends payable on series A convertible preferred stock         |  | $                | 157,600    |   |                  | $ |           |  
|                                                                  |  |                  |            |   |                  |   |            |  
|Charter card issued as partial consideration of aircraft purchase |  | $                | 95,600     |   |                  | $ |           |  
|                                                                  |  |                  |            |   |                  |   |            |  

See Notes to Condensed Consolidated Financial Statements.



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AVANTAIR, INC. AND SUBSIDIARIES

(Formerly Ardent Acquisition Corporation)

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 1  BUSINESS OPERATIONS

General

Avantair, Inc. (formerly known as Ardent Acquisition Corporation) (Avantair or
the Company), was organized on September 14, 2004 as a blank check company whose objective was to acquire an operating business.

On October 2, 2006, the Company signed a definitive stock purchase agreement with Avantair Inc. (Old Avantair). The agreement, as amended on December 15, 2006, provided for Avantair to issue 6,684,822 shares of common
stock to the stockholders of Old Avantair in exchange for all of the issued and outstanding shares of Old Avantair (the Share Exchange or Reverse Merger). On February 22, 2007, the stockholders of Avantair voted in favor
of the Reverse Merger. On February 22, 2007, upon the closing of the reverse acquisition of Ardent Acquisition Corp., the Company received approximately $36.3 million. For further details on this reverse acquisition, refer to the audited
consolidated financial statements and the notes to the consolidated financial statements included in the Companys Annual report on Form 10-K/A for the fiscal year ended June 30, 2007.

The Company is engaged in the sale and management of fractional ownership of professionally piloted aircraft for personal and business use. The Company
operates a fixed flight based operation in Camarillo, California, as well as aircraft maintenance and concierge services to customers from hangars and office locations in Clearwater, Florida.

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Interim
Reporting

The accompanying unaudited interim condensed consolidated financial statements were prepared in accordance with accounting
principles generally accepted in the United States of America and the interim condensed financial statement rules and regulations of the Securities and Exchange Commission (SEC). In the opinion of management, these statements included
all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the condensed consolidated financial statements. The interim condensed operating results are not necessarily indicative of the results for a full
year or any interim period. The June 30, 2007 consolidated balance sheet has been derived from the audited consolidated financial statements included in the Companys Annual Report on Form 10-K/A for the fiscal year ended June 30,
2007.

Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations relating to interim financial statements. These condensed consolidated financial statements should be read in
conjunction with the Companys Annual Report on Form 10-K/A for the fiscal year ended June 30, 2007.

Basis of Presentation

All material intercompany accounts and transactions have been eliminated in the consolidated financial statements.

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. This basis of
accounting contemplates the recovery of the Companys assets and the satisfaction of its liabilities in the normal course of business. The Company has suffered recurring losses resulting in an accumulated deficit of $68 million and a working
capital deficiency of $28 million as of December 31, 2007. Successful transition to profitable operations is dependent upon obtaining a level of sales adequate to support the Companys cost structure and an uninterrupted delivery of
aircraft. Management intends to continue to finance the operations of the Company through future cash flows from operations and future financings and borrowings.



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As discussed in Note 5, on November 14, 2007 and December 5, 2007, the Company completed the
sale of 152,000 shares of its Series A convertible preferred stock and raised approximately $14 million in net proceeds which has provided the Company additional cash to continue its operations. However, there can be no assurance that the Company
will be able to continue to obtain such financing or internally generate cash flows from operations, which may impact the Companys ability to continue as a going concern. The accompanying condensed consolidated balance sheets do not include
any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the potential inability of the Company to continue as a going concern.

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 certain estimates and assumptions that affect the amounts reported in the consolidated and combined
financial statements and accompanying notes. The Company is subject to uncertainties such as the impact of future events, economic, environmental and political factors and changes in the Companys business environment; therefore, actual results
could differ from these estimates. Accordingly, the accounting estimates used in the preparation of the Companys financial statements will change as new events occur, as more experience is acquired, as additional information is obtained and as
the Companys operating environment changes. Changes in estimates are made when circumstances warrant. Such changes in estimates and refinements in estimation methodologies are reflected in reported results of operations; if material, the
effects of changes in estimates are disclosed in the notes to the consolidated and combined financial statements. Significant estimates and assumptions by management affect: the proper recording of revenue arrangements with multiple deliverables,
the allowance for doubtful accounts, the carrying value of long-lived assets, the amortization period of long-lived assets, the provision for income taxes and related deferred tax accounts, certain accrued expenses and contingencies.

Revenue Recognition

The Company sells fractional
shares of aircraft and the related maintenance and management services that accompany aircraft ownership. The minimum share size sold in an aircraft by the Company is a 1/16th share, which equates to 50 flight hours per year. The purchase agreement
grants the customer ownership rights in a specified aircraft and allows them the right to use any program aircraft operated by the Company for a specified number of hours each year. When a customer purchases a fractional share, they are also
required to enter into a five-year management agreement with the Company. Under the terms of the management agreement, the Company agrees to manage, operate and maintain the aircraft on behalf of the customer in exchange for a fixed monthly fee,
which varies depending on the size of the share purchased.

Fractional Aircraft Shares

The Company does not have vendor specific objective evidence to determine the fair value of each element and, as a result, has adopted the provisions of
the Emerging Issues Task Force (EITF) Issue No. 00-21 Accounting for Revenue Arrangements with Multiple Deliverables (EITF 00-21) to account for the sale of fractional shares of aircraft. Accordingly, if the sales
of the fractional shares cannot be separated from the underlying maintenance agreement, the revenue is recognized ratably over the life of the maintenance agreement. The sales of the fractional shares of the aircraft are recognized as income over a
five-year period. The period in which revenue is recognized will be evaluated on a periodic basis. Factors that will impact managements assessment of the most appropriate period of revenue recognition will include, but not be limited to,
customer turnover, terms and conditions of the related fractional share sale, maintenance arrangements as well as any other factor that could impact revenue.

Management and Maintenance Agreement

Revenue earned in connection with the management and maintenance agreements is
recognized ratably over the term of the agreement or five years. At times a customer will prepay its management and maintenance fee for a period of one year or longer. This is recorded as unearned revenue and amortized into revenue on a monthly
basis in accordance with the schedule provided for within each agreement.

Demonstration and Charter Card Revenues

Demonstration revenues. The Company charges prospective new aircraft share owners $3,000 per hour for each hour the prospective share owners are
flown to demonstrate the quality and capabilities of the aircraft. The Company recognizes revenue related to these demonstration flights when the flight is completed.



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Charter Card revenues. The Company sells access to its aircraft fleet for a 25 hour per year time
card for flight time without the requirement to purchase an ownership share in an aircraft. The card holder pays the Company the entire amount in advance of access to the aircraft fleet. The Company defers the entire amount paid and recognizes
revenue as aircraft are flown on an incremental basis. In prior years the Company sold a 15 hour time card which was discontinued on December 31, 2007.

Aircraft Costs Related To Fractional Sales

The Company reflects aircraft costs related to the sale of fractional aircraft
shares. As a result of the adoption of EITF 00-21 the Company recognizes the sales of the fractional shares of aircraft as income over the five-year period. The aircraft costs related to sales of fractional shares consist of the cost of the aircraft
and are recorded as an asset and recognized as cost of aircraft shares sold over the five-year period.

Maintenance Policy

The Company uses the direct method of accounting for scheduled non-refurbishment maintenance checks. The refurbishment portion of the maintenance check is capitalized
since the interior of the aircraft is substantially refurbished and the life of the aircraft is extended. The cost of refurbishment is amortized over a three-year period. The direct method of accounting for overhaul costs is also used and these
costs are expensed as incurred.

Income Taxes

Income taxes are accounted for under the asset and liability method in accordance with Statement of Financial Accounting Standard (SFAS) No. 109, Accounting for Income Taxes (SFAS 109). Deferred tax
assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit
carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets
and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established to reduce deferred tax assets to the amounts expected to be realized.

Share-Based Compensation

The Company accounts for share-based compensation to employees and directors in accordance with SFAS 123(R) which requires the recognition of compensation expense for employee stock options and other share-based
payments. Under SFAS 123(R), expense related to employee stock options and other share-based payments is recognized over the relevant service period based on the fair value of each stock option grant. The cost for stock option compensation was
approximately $37,000 and $79,000 for the three months and six months ended December 31, 2007 and $2,542,300 for the three and six months ended December 31, 2006, respectively. The Company issued 214,000 shares of restricted common stock
in May 2007. One-third (1/3) of the awarded shares will vest on the first anniversary date of grant and then one-twelfth
(1/12) on the date three months after the first anniversary date of the grant and on such date every three months
thereafter, such that 100% of the shares will be vested on the third anniversary date so long as employment with the Company is continuous. Compensation expense related to this restricted stock is recognized ratably over the three years based on the
fair value of the shares at date of grant, which was $4.90. The compensation expense from restricted stock was approximately $79,000 and $152,000 for the three months and six months ended December 31, 2007 respectively. There were no stock
options granted during the three and six months ended December 31, 2007.

Accounting for Derivative Instruments

The Company accounts for derivative instruments in accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities, as amended, (SFAS No. 133) which establishes accounting and reporting standards for derivative instruments and hedging activities, including certain derivative instruments imbedded in other financial instruments or
contracts. The Company also considers the Emerging Issues Task Force (EITF) 00-19, Accounting for Derivative Financial Instruments Indexed to and Potentially Settled in, a Companys Own Stock
(EITF 00-19), which provides criteria for determining whether freestanding contracts that are settled in a companys own stock, including common stock warrants, should be designated as either an equity instrument, an asset or
as a liability under SFAS No. 133. The Company evaluates the conversion feature embedded in its Series A Convertible Preferred Stock (see Note 5) at each reporting period based on the criteria of SFAS No. 133 and EITF 00-19
to determine whether the conversion feature would be required to be bifurcated from the Preferred Stock and accounted for separately as a derivative. Based on managements evaluation, the embedded conversion feature did not require bifurcation
and derivative accounting as of December 31, 2007.

Loss Per Share

Basic loss per share is computed by dividing loss available to common stockholders by the weighted average common shares outstanding for the period. Diluted earnings per
share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity.
Since the effect of outstanding options and warrants is antidilutive due to the losses incurred by the Company, they have been excluded from the Companys computation of net loss per share for all periods presented. The total number of
potentially dilutive securities excluded from the calculation of diluted loss per share for the three and six months ended December 31, 2007 was 14,510,000 which were comprised of 14,146,000 warrants to purchase one share of the Companys
common stock, 214,000 shares of restricted stock and 150,000 outstanding options. There were no potentially dilutive securities outstanding during the three and six months ended December 31, 2006. Per share amounts for the three and six month
period ended December 31, 2006 have been restated to reflect the recapitalization of the Company stock on October 2, 2006.



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Recently Issued Pronouncements

In September 2006, the Financial Accounting Standards Board (FASB) issued SFAS No. 157, Fair Value Measurements (SFAS No. 157). This statement establishes a single
authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair-value measurements. SFAS No. 157 defines fair value as the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between market participants at the measurement date. For the Company, SFAS No. 157 is effective for the fiscal year beginning July 1, 2008. Management is currently evaluating
this standard to determine its impact, if any, on its consolidated financial statements.

In February 2007, the FASB issued Statement
of Financial Accounting Standards No. 159, The Fair Value Option for Financial Assets and Financial Liabilities  Including an Amendment of FASB Statement No. 115 (SFAS No. 159). This standard permits an
entity to measure financial instruments and certain other items at estimated fair value. Most of the provisions of SFAS No. 159 are elective; however, the amendment to FASB No. 115, Accounting for Certain Investments in Debt and
Equity Securities, applies to all entities that own trading and available-for-sale securities. The fair value option created by SFAS No. 159 permits an entity to measure eligible items at fair value as of specified election dates. The
fair value option (a) may generally be applied instrument by instrument, (b) is irrevocable unless a new election date occurs, and (c) must be applied to the entire instrument and not to only a portion of the instrument. SFAS
No. 159 is effective as of the beginning of the first fiscal year that begins after November 15, 2007. Management is currently evaluating the impact of SFAS No. 159, if any, on its consolidated financial statements.

NOTE 3  COMMITMENTS AND CONTINGENCIES

Lease Commitments

The Company conducts a major part of its operations from leased facilities, which include airplane hangars and administrative offices.
The 15 year hangar lease in Clearwater, Florida expiring in 2020 is classified as an operating lease. The lease provides for rent allocation credits for the first three years. These credits have been netted in rental expense on a straight line basis
over the term of the lease. The Company also has a 15 year lease for its fixed based operation in Camarillo, California expiring in 2021, which is classified as an operating lease.

Purchase Commitments

Avantairs primary growth strategy is to increase the number of available
aircraft and fractional share owners. Avantair presently sources all of its aircraft from Piaggio America and has contractual commitments to purchase these aircraft at wholesale pricing for an aggregate of approximately $357 million through 2012 for
the delivery of 63 additional aircraft. This includes the November 13, 2007 board of directors approval to an agreement with Piaggio America, Inc. to purchase an additional 22 aircraft to be delivered in the years 2011 and 2012. The
agreement includes a standard price for each aircraft, subject to a price escalation based on the Consumer Price Index, for a total commitment on this new contract of $148.5 million. In addition, it has also entered into an agreement with Embraer to
buy 20 additional aircraft for a total purchase price of $54.0 million. The total combined aircraft commitment of Piaggio America and Embraer is $411 million to be delivered through fiscal 2011 and 2012. The cost of these aircraft is expected to be
funded by pre-selling the fractional shares of each plane prior to such planes delivery or by Avantair raising additional capital to acquire aircraft when they have not been pre-sold.

From time to time, we may lease aircraft that require purchase commitments. Please see Financing Commitments below.

Financing Commitments

In February 2005, the Company
made financing arrangements for the purchase of three aircraft under various notes payable with Wells Fargo Equipment Finance, Inc. The notes in the amount of $4,260,666 are payable in monthly installments ranging from $4,550 to $38,480 with
interest ranging from 5.96% to 6.12% per annum, through 2012. The notes are collateralized by the aircraft.



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On April 24, 2006, Avantair financed an aircraft maintenance program contract with Jet Support
Services, Inc. in the amount of $3.3 million. The promissory note provides for seven monthly installments of $145,867 and 53 monthly installments of $45,867, respectively including interest at 7% per year.

In August 2007, the Company and CNM, Inc. (CNM) executed a new note agreement which converted an outstanding note obligation of approximately
$7 million into a term loan payable monthly over three years and bearing interest at 10% per annum. CNM also assumed a promissory note due to Wells Fargo Bank for $2,900,000 which was included as part of this new note agreement. CNM, Inc paid
off the $2,900,000 promissory note to Wells Fargo Bank on December 7, 2007. The Company accounted for this conversion in accordance with EITF Issue No. 98-14, Debtors Accounting for Changes in Line-of-Credit or Revolving-Debt
Arrangements. No adjustments to the financial statements were necessary as a result of such modification.

On October 3, 2007,
the Company entered into a floor plan agreement with Midsouth Services, Inc. which provides for up to approximately $5.1 million of financing for the next twelve aircraft to be acquired from Piaggio America, Inc. through April 2008. The agreement
requires a $75,000 monthly facility fee with payment of any outstanding borrowings due in full prior to taking delivery of additional aircraft. Borrowings outstanding under this arrangement at December 31, 2007 totaled approximately $5.1
million.

On October 10, 2007, the Company entered into a five year lease agreement for one Piaggio Avanti P-180 aircraft. The
aircraft will be used as a core aircraft and not fractionalized. The obligation is accounted for as a capital lease with lease payments of $89,000 per month. Upon expiration of the term, the Company will be required to purchase the aircraft from the
lessor for $2.3 million.

On October 31, 2007, the Company entered into a financing arrangement for the purchase of one used aircraft
at a total purchase price of approximately $4.5 million (inclusive of the value of a charter card of 100 hours). Financing was obtained from a lending institution through a note payable of $3.9 million. This debt will be repaid monthly over 7 years
at an interest rate of the LIBOR rate plus 4.0%.

On November 14 and December 5, 2007, the Company sold 152,000 shares of
preferred stock. For further details on the Preferred Stock Agreement, see Note 5, below.

Litigation

From time to time the Company is party to various legal proceedings in the normal course of business involving principally commercial charter party
disputes. It is expected that these claims would be covered by insurance if they involve liabilities that arise from collision, other casualty, death or personal injuries to crew, subject to customary deductibles. Those claims, even if lacking
merit, could result in the expenditure of significant financial and managerial resources. At December 31, 2007, there were no legal proceedings which outside counsel anticipates would have a material adverse effect on the Companys
financial position, results of operations or cash flows.

NOTE 4  REGISTRATION OF SHARES

The Companys registration statement on Form S-1 to register 4,540,381 shares sold in connection with a private placement raising $9 million in
proceeds and 346,000 warrants and 346,000 shares underlying the warrants issued in connection with the reverse merger, went effective in October 2007. Costs associated with that registration statement in the amount of $341,321 were charged to
paid-in capital.



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NOTE 5  SALE OF SERIES A CONVERTIBLE PREFERRED STOCK

On November 14, 2007, the Company entered into a Preferred Stock Purchase Agreement (the Preferred Stock Agreement) with certain
investors. Under the Preferred Stock Agreement, the Company agreed to issue 152,000 shares of its newly-created Series A Convertible Preferred Stock to the Investors for an aggregate purchase price of $15.2 million, which was received in two
tranches of $11.2 million and $4 million on November 14, 2007 and December 5, 2007, respectively. The proceeds were used predominantly to fund business operations and to acquire fractional shares in two aircraft delivered on
December 28, 2007. The Series A Convertible Preferred Stock will not be registered under the Securities Act of 1933, but the Investors will have registration rights (including an obligation by the Company to have a shelf
registration statement declared effective with the Securities and Exchange Commission within nine months of the issuance of the shares of Series A Convertible Preferred Stock) with respect to shares of Common Stock issuable upon conversion of the
shares of Series A Convertible Preferred Stock (Conversion Shares). The Investors will be subject to restrictions on the number of Conversion Shares they may sell in the open market within six months and one year of such issuance. The
terms of the Series A Convertible Preferred Stock are set forth in a Certificate of Designations filed November 14, 2007 with the State of Delaware. Pursuant to such Certificate of Designations, the shares of Series A Convertible Preferred
Stock (a) will rank senior to all currently outstanding classes of stock of the Company with respect to liquidation and dividends, (b) will be entitled to receive a cash dividend at the annual rate of 9.0%, payable quarterly (with such
rate being subject to increase up to a maximum of 12% if such dividends are not timely paid), (c) will be convertible into shares of the Companys common stock at any time at the option of the Investors based on a conversion price of $5.15
per share (subject to adjustment), (d) may be redeemed by the Company following the seventh anniversary of the issuance of the shares of Series A Convertible Preferred Stock, (e) may be redeemed by the Company in connection with certain
change of control or acquisition transactions, (f) will be redeemed by the Company following the ninth anniversary of the issuance of the shares of Series A Convertible Preferred Stock, upon receipt of the written consent of the holders of a
majority of the then outstanding shares of Series A Convertible Preferred Stock (g) will vote on an as-converted basis with the Companys Common Stock and (h) will have a separate vote over certain material transactions or changes
which the Company may wish to effect. The Company paid its investment adviser 5% of the cash raised on this preferred financing.

NOTE 6 
RESTATEMENT

During fiscal 2007, the Company bought back shares of its Class A Common Stock and Class B Common Stock costing
approximately $1.9 million. Those shares were retired and cancelled in connection with the reverse merger on February 22, 2007. The accompanying condensed consolidated financial statements as of June 30, 2007, have been restated to reflect
this retirement of treasury stock.



|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

Overview

Avantair is engaged in the sale and management of fractional ownerships of professionally
piloted aircraft for personal and business use. According to AvData, Avantair is the fifth largest company in the North American fractional aircraft industry. As of December 31, 2007, Avantair operated 46 aircraft with 83 additional aircraft on
order. Avantair operates a fixed flight based operation in Camarillo, California. The Company also provides aircraft maintenance, concierge and other services to customers and services to the Avantair fleet from hangars and office locations in
Clearwater, Florida and Camarillo, California.

Results of Operations

Three Months Ended December 31, 2007 Compared with Three Months Ended December 31, 2006

Revenues for the three months ended December 31, 2007 were $28.6 million, an increase of 60% from $17.9 million for the same period last year. This increase was the result of a 49% increase in the revenue generated from the sale of
fractional aircraft shares to $10.6 million for the second quarter ended December 31, 2007 from $7.1 million for the same period last year, an increase of 53% in maintenance and management fees to $14.1 million for the second quarter ended
December 31, 2007 from $9.2 million for the same period last year, an increase of 200% in charter card revenue to $2.1 million in the second quarter ended December 31, 2007 from $0.7 million in the same period last year and an increase of
89% in demonstration and other revenue to $1.7 million for the second quarter ended December 31, 2007 from $0.9 million for the same period last year. Revenue from the sale of fractional aircraft shares increased due to a 40% increase in the
number of fractional shares sold to 590 through December 31, 2007 from 421.5 fractional shares sold through December 31, 2006. The increase in revenue from maintenance and management fees increased primarily due to the increase in the
number of fractional shares sold, as previously mentioned.



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Charter card revenue increased $1.4 million primarily due to an increase in hours flown, to 421.7 hours
in the three months ended December 31, 2007 from 153.2 hours in the three months of the same period last year.

Demonstration and
other revenue increased primarily due to (i) an increase in fuel sales by $0.5 million in the three months ended December 31, 2007; (ii) an increase in rent revenue of $0.1 million and; (iii) an increase in remarketing revenue of
$0.2 million.

Operating expenses for the three months ended December 31, 2007 were 40% higher than the same period last year, with
total expenses of $33.4 million compared to $23.9 million. The cost of fractional aircraft shares sold increased to $8.9 million for the three months ended December 31, 2007 from $6.4 million for the same period last year, due to an increase of
40. %in the number of fractional shares sold to 590 fractional shares sold through December 31, 2007 from 421.5 fractional shares sold through December 31, 2006. The cost of flight operations, along with the cost of fuel,
increased 62% to $17.3 million for the three months ended December 31, 2007 from $10.7 million for the second quarter ended December 31, 2006, primarily due to:



| |  |  | an increase of $3.0 million in maintenance expenses, comprised primarily of an increase in parts expense and maintenance insurance coverage due to an increase in
fleet size;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | an increase of $1.9 million in fuel prices and flight fees (which includes landing fees, airport fees and ground transportation fees) borne by Avantair for
repositioning flights, demonstration flights and pilot training flights;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | an increase of $2.3 million in pilot expenses , including salaries and related pilot expenses, hotel expenses, pilot airfare and living expenses due to the increase
in the fleet size which requires an increase of four pilots per aircraft.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a decrease of $0.6 million in chartering and other expenses.
| | - |  | ------------------------------------------------------------

General and administrative expenses decreased to $4.8 million for the three months ended December 31, 2007 from $5.6 million for the same period last year, primarily due to a decrease in compensation expense
related to equity transactions of $2.3 million offset by an increase of $0.9 million in expenses related to fixed-based operations in Clearwater, Florida and Camarillo, California and costs of $0.2 million related to being a public company.

Depreciation and amortization expenses was $1.0 million for the three months ended December 31, 2007 compared to $0.2 million for the
same period last year, primarily due to two aircraft being reclassified from available for sale to fixed assets during the fourth quarter of fiscal year 2007. Depreciation expense for the entire year on those assets was booked in the fourth quarter
of fiscal year 2007 which was when management made the decision to retain the aircraft for internal use.

Selling expenses increased to
$1.4 million for the three months ended December 31, 2007 from $1.0 million for the same period last year primarily due to an increase in advertising expense and selling salaries as well as commissions due to increased sales.

Loss from operations was $4.8 million for the three months ended December 31, 2007, a decrease of 20% from $6.0 million for the three months ended
December 31, 2006 for the reasons set forth above.

Total other income and expense was ($0.5) million for the three months ended
December 31, 2007 compared to $(0.6) million for the same period last year, primarily due to the write-off of a debt private placement fee in the current quarter that were previously recorded as a deferred financing cost.

Net loss decreased to $5.3 million for the three months ended December 31, 2007 compared to $6.6 million for the same period last year. The primary
reason for the decrease in the net loss is the decrease in the loss from operations and the decrease in compensation expense discussed above.

Six Months Ended December 31, 2007 Compared with Six Months Ended December 31, 2006

Revenues for the six
months ended December 31, 2007 were $54.3 million, an increase of 57% from $34.7 million for the



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same period last year. This increase was the result of a 41% increase in the revenue generated from the sale of fractional aircraft shares to $20.5 million
for the six months ended December 31, 2007 from $14.5 million for the same period last year, an increase of 58% in maintenance and management fees to $27.1 million for the six months ended December 31, 2007 from $17.2 million for the same
period last year, an increase of 218% in charter card revenue to $3.5 million in the six months ended December 31, 2007 from $1.1 million in the same period last year and an increase of 78% in demonstration and other revenue to $3.2 million for
the six months ended December 31, 2007 from $1.8 million for the same period last year. Revenue from the sale of fractional aircraft shares increased due to a 40% increase in the number of fractional shares sold to 590 through December 31,
2007 from 421.5 fractional shares sold through December 31, 2006. The increase in revenue from maintenance and management fees increased primarily due to the increase in the number of fractional shares sold, as previously mentioned.

Charter card revenue increased $2.4 million primarily due to an increase in hours flown, to 737.5 hours in the six months ended December 31, 2007
from 222.5 hours in the six months ended December 31, 2006.

Demonstration and other revenue increased primarily due to (i) an
increase in fuel sales by $0.8 million in the six months ended December 31, 2007; (ii) an increase in remarketing revenue of $0.3 million and ; (iii) an increase in rent and other revenues of $0.3 million.

Operating expenses for the six months ended December 31, 2007 were 46% higher than the same period last year, with total expenses of $63.6 million
compared to $43.7 million. The cost of fractional aircraft shares sold increased to $17.0 million for the six months ended December 31, 2007 from $10.8 million for the same period last year, due to an increase of 40%in the number of
fractional shares sold to 590 fractional shares sold through December 31, 2007 from 421.5 fractional shares sold through December 31, 2006. The cost of flight operations, together with the cost of fuel increased 61% to $33.1 million for
the six months ended December 31, 2007 from $20.6 million for the three months ended December 31, 2006, primarily due to:



| |  |  | an increase of $5.1 million in maintenance expenses, comprised primarily of an increase in parts expense and maintenance insurance coverage due to an increase in
fleet size and the addition of engine reserves for engines not previously included in the insurance coverage;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | an increase of $3.5 million in fuel prices and flight fees (which includes landing fees, airport fees and ground transportation fees) borne by Avantair for
repositioning flights, demonstration flights and pilot training flights;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | an increase of $4.0 million in pilot expenses , including salaries and related pilot expenses, hotel expenses, pilot airfare and living expenses due to the increase
in the fleet size which requires an increase of four pilots per aircraft.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a decrease of $0.1 million in other aircraft expenses.
| | - |  | ------------------------------------------------------

General and administrative expenses decreased to $9.4 million for the six months ended December 31, 2007 from $10.1 million for the same period last year, primarily due to a decrease of $2.3 million in
compensation expense related to stock awarded to certain executives which was offset by an increase of $1.7 million in fixed-based operations both in Clearwater, Florida and Camarillo, California. Depreciation and amortization expenses was $1.7
million for the six months ended December 31, 2007 compared to $0.4 million for the same period last year, primarily due to aircraft being reclassified from available for sale to fixed assets during the fourth quarter of fiscal year 2007.
Depreciation expense for the entire year on those assets was booked in the fourth quarter of fiscal year 2007 which was when management decided to retain the aircraft for internal use.

Selling expenses increased to $2.4 million for the six months ended December 31, 2007 from $1.9 million for the same period last year primarily due
to an increase in advertising expenses and sales salaries as well as commissions and selling bonus due to increased sales.

Loss from
operations was $9.3 million for the six months ended December 31, 2007, an increase of 3% from $9.0 million for the six months ended December 31, 2006 for the reasons set forth above.

Total other income and expense was ($1.0) million for the six months ended December 31, 2007 compared to $(1.4) million for the same period last
year, primarily due to the write-off of a debt private placement fee in the current fiscal year.

Net loss decreased to $10.1 million for
the six months ended December 31, 2007 compared to $10.4 million for the same period last year. The primary reason for the decrease in the net loss is the decrease in the loss from operations discussed above.



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Liquidity and Capital Resources

Avantairs primary sources of liquidity have been cash provided by operations, cash raised from its equity offering (see Note 5) with Ardent Acquisition Corp., cash provided from its debt facility with CNM, Inc.,
cash raised in the recent preferred stock offering, and other asset based borrowing. See Note 3 to the condensed consolidated financial statements included elsewhere in this Form 10-Q for details on all Avantairs financing commitments.
Principal uses of cash are to fund losses from operations, deposits made on fractional aircraft, leasehold improvements, and to fund the purchase of core aircraft and aircraft which are to be fractionalized but which have not yet been presold. Cash
generated from operations has not been sufficient to provide for all the working capital needed to meet Avantairs present requirements. At December 31, 2007 and June 30, 2007, Avantair had a working capital deficit of $28 and $8.4
million, respectively, and an accumulated deficit of $68.2 million and $58.1 million, respectively. As of December 31, 2007, cash and cash equivalents amounted to approximately $2.9 million and total assets of $192.8 million. The cash and cash
equivalent balance decreased $9.6 million from June 30, 2007 while total assets increased $32.0 million. The decrease in cash and cash equivalents occurred primarily as a result of the Company taking possession of five aircraft during the
quarter and selling 40.5 shares out of 80 available shares relating to these 5 aircraft.

Avantairs primary growth strategy is to
continue to increase the number of available aircraft and fractional share owners and to increase the monthly management fees derived from the maintenance of such aircraft. Avantair anticipates that cash provided from operations will continue to be
insufficient to fund this growth, and that the Company will continue to seek additional funds, through either a sale of equity, or by debt financing. These additional funds may be used to fund continuing losses from operations, deposits made on
fractional aircraft, leasehold improvements, and to fund the purchase of core aircraft and aircraft which are to be fractionalized but which have not yet been presold. The commitment (delivery schedule) for delivery of aircraft from Piaggio America
is adjusted periodically during the year and we expect adjustments to continue to occur. The current schedule provides for delivery of 12 aircraft over the next 12 months. The cost of these aircraft is expected to be funded by pre-selling the
fractional shares of each plane prior to such planes delivery or, when necessary, by Avantair raising additional capital to acquire aircraft when they have not been pre-sold.

Net cash used in operating activities was $23.8 million for the six months ended December 31, 2007 compared to cash used in operating activities of
$23.2 million for the same period last year. The decrease in working capital used in the business is primarily attributable to the five planes delivered to the Company during the six months ended December 31, 2007 since a portion of such planes
were not fully fractionalized upon the company taking possession. For the six months ended December 31, 2006, the Company took possession of six aircraft.

Net cash used in investing activities was $2.7 million for the six months ended December 31, 2007 compared to cash provided by investing activities of $3.8 million for the same period last year. The cash provided
by investing activities during the six months ended December 31, 2006 resulted from the sale of property and equipment, while the cash used in investing activities for the six months ended December 31, 2007 resulted from capital
expenditures on leasehold improvements at its Florida and California facilities.

Net cash provided by financing activities for the six
months ended December 31, 2007 results primarily from net proceeds from the issuance of a new class A convertible preferred stock of $14.4 million. On November 14, 2007, the Company entered into a Preferred Stock Purchase Agreement (the
Preferred Stock Agreement) with certain investors. Under the Preferred Stock Agreement, the Company agreed to issue 152,000 shares of its newly-created Series A Convertible Preferred Stock to the Investors for an aggregate purchase price
of $15.2 million, The transaction is discussed in greater detail in Note 5 to the condensed consolidated financial statements included elsewhere in this Form 10-Q. The quarter ended December 31, 2006 primarily relates to proceeds from the
issuance of stock of $8.5 million in a private placement and borrowings under long-term notes payable of $10.7 million.

The Company has
incurred recurring losses resulting in an accumulated deficit of $68 million and a working capital deficiency of $28 million as of December 31, 2007. Successful transition to profitable operations is dependent upon obtaining a level of sales
adequate to support the Companys cost structure. Management intends to continue to finance the operations of the Company through future cash flows from operations and future financings and borrowings. The Company believes it will be successful
in preselling the aircrafts or by selling additional equity or raising funds through debt financing. There can be no assurance, however, that such financing will be successfully completed.



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|Item 3 | Quantitative and Qualitative Disclosures about Market Risk
|------ | ----------------------------------------------------------

Quantitative and Qualitative Disclosures about Market Risk

Avantair is exposed to various market risks, including changes
in interest rates. Market risk is the potential loss arising from adverse changes in market rates and prices, such as interest rates and foreign currency exchange rates. Avantair does not enter into derivatives or other financial instruments for
trading or speculative purposes. Avantair has also not entered into financial instruments to manage and reduce the impact of changes in interest rates and foreign currency exchange rates, although Avantair may enter into such transactions in the
future.

Interest Rate Risk

Avantair is subject to market risk from exposure to changes in interest rates associated with its debt facility with Century Bank and Wachovia Bank. The current liability, pursuant to which Avantair is obligated to pay Century Bank, is 1.0%
above prime. The current liability, pursuant to which Avantair is obligated to pay Wachovia Bank, is the Libor rate plus 4.0%. At December 31, 2007, the liabilities of Avantair with exposure to interest rate risk were approximately $6.0
million.

Off-Balance Sheet Arrangements

Avantair has neither off-balance sheet obligations nor guarantees and has not historically used special purpose entities for any transactions.



|Item 4. | Controls and Procedures
|------- | -----------------------

As of the end of the
period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation
of the Companys disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act). Based upon that evaluation, we concluded that our disclosure controls and procedures were not effective, based on
the material weaknesses in our internal controls over financial reporting.

Management has made its evaluation of our disclosure controls
and procedures as of December 31, 2007. Avantair is aware of the existence of a material weakness in the design and operation of Avantairs internal controls over financial reporting that could adversely affect its ability to record,
process, and report financial information consistent with the assertions of management in the financial statements. A material weakness is defined as a deficiency, or a combination of deficiencies, in internal control over financial reporting, such
that there is a reasonable possibility that a material misstatement of the companys annual or interim financial statements will not be prevented or detected on a timely basis.

The material weakness first began with the independent audit of the fiscal years June 2004, 2005 and 2006. The auditors letter on material weakness
states the following:



| |  |  | Avantairs accounting files for fiscal 2004 were incomplete, which required significant modifications of accounting data for that period.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Costs of fractional shares and revenue on certain contracts during the years ended June 30, 2006, 2005 and 2004 were not recognized properly due to errors made
on the electronic worksheets for reporting this information.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The accounting staff had an inappropriate level of knowledge, which contributed to errors and deficiencies in financial reporting and disclosures.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------

Avantair is addressing the concerns stated in the auditors letter on internal controls and making appropriate
changes to



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remedy concerns over internal controls and reduce the possibility of a misstatement of Avantairs financial statements. The actions taken to date
include the hiring of a Chief Financial Officer, Vice President of Finance, Assistant Controller and a Director of Financial Transactions. In addition, Avantair has modified its business processes to include enhanced controls over its core
processes, the more significant of which are described below. Avantair continues to educate the senior accounting staff on the requirements of Section 404 of the Sarbanes-Oxley Act.

During fiscal 2007, Avantair:



| |  |  | designed a process to record the sale of fractional shares and implement a monthly and quarterly review of its calculation for recognizing revenue on fractional
shares;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | implemented a new expenditure and authorization process and a cash receipts process that will improve accuracy of recording cash receipts and disbursements;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | utilized the services of a consulting company which assists the Company in accounting and disclosure of complex transactions; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------

During fiscal 2008, Avantair intends to:



| |  |  | hire additional accounting personnel with the appropriate level of knowledge to properly record transactions in the general ledger and prepare financial statements
in accordance with accounting principles generally accepted in the United States of America;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | and has engaged consultants who are assisting the company in implementation of a new back-office accounting software package which will further improve the
accounting process and related internal controls.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Because Avantair has not completed its remediation plan, management
has concluded that a material weakness in the operation of our disclosure controls and procedures continues to exist at December 31, 2007. Any failure to effectively address a material weakness or other control deficiency of Avantair or
implement required new or improved controls, or difficulties encountered in their implementation, could disrupt Avantairs ability to process key components of its results of operations and financial condition timely and accurately and cause
Avantair to fail to meet its reporting obligations under rules of the Securities and Exchange Commission.

There has been no change in the
our internal control over financial reporting during the fiscal quarter ended December 31, 2007 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II  OTHER INFORMATION



|Item 6. | Exhibits
|------- | --------

See Exhibit Index.



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SIGNATURES

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

February 14, 2008



Avantair, Inc.By:

/s/ Steven SantoSteven SantoChief Executive Officer




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EXHIBIT INDEX



|              |  |                                                                                                                     
|------------- |  | --------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                         
|31.1          |  | Chief Executive Officer Certification pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934
|              | 
|31.2          |  | Chief Financial Officer Certification pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934
|              | 
|32.1          |  | Chief Executive Officer Certification pursuant to 18 U.S.C. Section 1350                                            
|              | 
|32.2          |  | Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350                                            



20