UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

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FORM 10-QSB

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|(Mark One)
|----------
||X|       

For the Quarterly Period
ended March 31, 2006

OR

||_| | 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 001-32580

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U.S. HELICOPTER CORPORATION(Name of Small Business Issuer in Its Charter)

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|DELAWARE(State or Other Jurisdiction of
Incorporation or Organization) | 27-0096927(I.R.S. Employer
Identification No.)
|---------------------------------------------------------------------- | ----------------------------------------------

6 East River Piers, Suite 216,
Downtown Manhattan HeliportNew York, NY 10004(Address of Principal Executive Offices) (Zip Code)

(212) 248-2002(Issuers Telephone Number, Including Area Code)

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Check whether the issuer (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 þ   No o

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

APPLICABLE ONLY TO ISSUERS INVOLVED IN
BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS

Check whether the issuer has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.   Yes o
   No o

APPLICABLE ONLY TO CORPORATE
ISSUERS

State the number of shares
outstanding of each of the issuers classes of common equity, as of the latest
practicable date: As of May 9, 2006, 32,185,799 shares of common stock.

Transitional Small Business Disclosure Format (check
one):   Yes o   No þ

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U.S. HELICOPTER CORPORATIONFORM
10-QSBFOR THE QUARTER ENDED MARCH 31, 2006

INDEX

|                             |  |                                                                                                  |  | PAGE
|---------------------------- |  | ------------------------------------------------------------------------------------------------ |  | ----
|                            
|PART 1FINANCIAL INFORMATION
|                            
|ITEM 1.                      |  | FINANCIAL STATEMENTS                                                                             |  |     
|                            
|                             |  | Balance Sheets                                                                                   |  | 1   
|                            
|                             |  | Statements of Operations                                                                         |  | 2   
|                            
|                             |  | Statements of Stockholders Equity (Deficit)                                                     |  | 3   
|                            
|                             |  | Statements of Cash Flows                                                                         |  | 5   
|                            
|                             |  | Notes to Financial Statements                                                                    |  | 6   
|                            
|ITEM 2.                      |  | MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS                                       |  | 14  
|                            
|ITEM 3.                      |  | CONTROLS AND PROCEDURES                                                                          |  | 39  
|                            
|PART IIOTHER INFORMATION   
|                            
|ITEM 1.                      |  | LEGAL PROCEEDINGS                                                                                |  | 39  
|                            
|ITEM 2.                      |  | UNREGISTERED SALES OF SECURITIES AND USE OF PROCEEDS; USE OF PROCEEDS FROM REGISTERED SECURITIES |  | 39  
|                            
|ITEM 3.                      |  | DEFAULTS UPON SENIOR SECURITIES                                                                  |  | 39  
|                            
|ITEM 4.                      |  | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                              |  | 39  
|                            
|ITEM 5.                      |  | OTHER INFORMATION                                                                                |  | 40  
|                            
|ITEM 6.                      |  | EXHIBITS AND REPORTS ON FORM 8-K                                                                 |  | 40  

|
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PART I - FINANCIAL
INFORMATIONITEM 1. FINANCIAL STATEMENTS

U.S. HELICOPTER CORPORATION(A
DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS

|                                                                    | March 31,2006 |  | December 31,2005 |           
|------------------------------------------------------------------- | ------------- |  | ---------------- | ----------
|
|Assets:                                                             |               |  |                  |           
|Current Assets:                                                     |               | 
|Cash                                                                |               |  | $                | 6,027,683 
|Restricted Cash                                                     |               |  |                  | 53,022    
|Accounts Receivable                                                 |               |  |                  | 19,739    
|Prepaid Expenses                                                    |               |  |                  | 134,030   
|Other Current Assets                                                |               |  |                  | 301,765   
|                                                                    |               |  |                  |           
|Total Current Assets                                                |               |  |                  | 6,536,239 
|                                                                    |               |  |                  |           
|Property and Equipment:                                             |               | 
|Leasehold Improvements                                              |               |  |                  | 661,708   
|Office Equipment                                                    |               |  |                  | 136,528   
|Less: Accumulated Depreciation                                      |               |  |                  | (15,830   
|                                                                    |               |  |                  |           
|Property and Equipment - Net                                        |               |  |                  | 782,406   
|                                                                    |               |  |                  |           
|Other Assets:                                                       |               | 
|Deferred Financing Costs, Net of Accumulated Amortization           |               | 
|of $-0- and $186,562                                                |               |  |                  | 975,000   
|Deferred Offering Costs                                             |               |  |                  | 213,315   
|Deposits                                                            |               |  |                  | 674,433   
|                                                                    |               |  |                  |           
|Total Other Assets                                                  |               |  |                  | 1,862,748 
|                                                                    |               |  |                  |           
|Total Assets                                                        |               |  | $                | 9,181,393 
|                                                                    |               |  |                  |           
|Liabilities and Stockholders Equity:                               |               | 
|Current Liabilities:                                                |               | 
|Note Payable                                                        |               |  | $                |          
|Current Maturities of Long-Term Debt, Net of Discount of $22,867   
|at March 31, 2006                                                   |               |  |                  | 585,135   
|Accounts Payable and Accrued Expenses                               |               |  |                  | 1,028,897 
|Deferred Salary and Taxes Payable                                   |               |  |                  | 89,672    
|Accrued Salary and Taxes Payable                                    |               |  |                  | 76,401    
|Air Traffic Liability                                               |               |  |                  | 10,991    
|Derivative Liability                                                |               |  |                  | 267,691   
|                                                                    |               |  |                  |           
|Total Current Liabilities                                           |               |  |                  | 2,058,787 
|                                                                    |               | 
|Long-Term Debt  Net of Discount of $3,724,718 and $-0-             |               |  |                  | 2,275,282 
|                                                                    |               | 
|Long-Term Derivative Liability                                      |               |  |                  | 3,724,718 
|                                                                    |               | 
|Deferred Charges                                                    |               |  |                  | 384,608   
|                                                                    |               |  |                  |           
|Total Liabilities                                                   |               |  |                  | 8,443,395 
|                                                                    |               |  |                  |           
|Commitments and Contingencies                                       |               |  |                  |          
|                                                                    |               |  |                  |           
|Stockholders Equity (Deficit):                                     |               | 
|Convertible Series A Preferred Stock, $0.001 Par Value; 1,500,000   |               | 
|Shares Authorized; 316,000 Shares Issued and Outstanding            |               |  |                  | 316       
|                                                                    |               | 
|Common Stock, $0.001 Par Value; 95,000,000 Shares Authorized;       |               | 
|30,801,218 and 30,795,723 Issued and Outstanding, at March 31, 2006 |               | 
|and December 31, 2005, respectively                                 |               |  |                  | 30,801    
|                                                                    |               | 
|Additional Paid In Capital                                          |               |  |                  | 5,922,674 
|                                                                    |               | 
|Deficit Accumulated During the Development Stage                    |               |  |                  | (5,215,793
|                                                                    |               |  |                  |           
|Total Stockholders Equity (Deficit)                                |               |  |                  | 737,998   
|                                                                    |               |  |                  |           
|Total Liabilities and Stockholders Equity (Deficit)                |               |  | $                | 9,181,393 
|                                                                    |               |  |                  |           

The Accompanying
Notes Are An Integral Part of These Financial Statements.

| 
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|1
| 

U.S. HELICOPTER CORPORATION(A
DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS[UNAUDITED]

|                                             | Cumulativefrom Inception(March 4, 2003) toMarch 31, |  | Three months endedMarch 31, |  
|-------------------------------------------- | --------------------------------------------------- |  | --------------------------- | -
|
|                                            
|Revenues                                     |                                                     |  |                             | $
|                                             |                                                     |  |                             |  
|Expenses:                                    |                                                     | 
|Payroll                                      |                                                     |  |                             |  
|Payroll Taxes and Benefits                   |                                                     |  |                             |  
|Crew Costs and Other                         |                                                     |  |                             |  
|Maintenance                                  |                                                     |  |                             |  
|Fuel                                         |                                                     |  |                             |  
|Aircraft and Traffic Servicing               |                                                     |  |                             |  
|State Minimum Taxes                          |                                                     |  |                             |  
|Professional Fees                            |                                                     |  |                             |  
|Insurance                                    |                                                     |  |                             |  
|Office Expense                               |                                                     |  |                             |  
|Website and Website Design                   |                                                     |  |                             |  
|Travel                                       |                                                     |  |                             |  
|Rent                                         |                                                     |  |                             |  
|Lease Expense  equipment                    |                                                     |  |                             |  
|Reservation Expense                          |                                                     |  |                             |  
|Advertising                                  |                                                     |  |                             |  
|Licenses and Fees                            |                                                     |  |                             |  
|Depreciation and Amortization                |                                                     |  |                             |  
|                                             |                                                     |  |                             |  
|Total Expenses                               |                                                     |  |                             |  
|                                             |                                                     |  |                             |  
|Net (Loss) before Interest Income and        |                                                     | 
|Financing Expense                            |                                                     |  |                             |  
|                                             |                                                     | 
|Interest Income                              |                                                     |  |                             |  
|Interest Expense                             |                                                     |  |                             |  
|Amortization of Beneficial Conversion        |                                                     | 
|Feature of Long-Term Debt                    |                                                     |  |                             |  
|Amortization of Deferred Financing Costs     |                                                     |  |                             |  
|Amortization of Derivative                   |                                                     |  |                             |  
|Amortization of Debt Discount                |                                                     |  |                             |  
|                                             |                                                     | 
|Deduct: Preferred Stock Dividend             |                                                     |  |                             |  
|                                             |                                                     |  |                             |  
|Net (Loss) Applicable to Common Shareholders |                                                     |  |                             | $
|                                             |                                                     |  |                             |  
|Net (Loss) Per Common Share:                 |                                                     | 
|Basic and Diluted                            |                                                     |  |                             |  
|                                             |                                                     |  |                             |  
|Weighted Average Number of Shares            |                                                     |  |                             |  
|                                             |                                                     |  |                             |  

The Accompanying
Notes Are An Integral Part of These Financial Statements.

| 
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|2
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U.S. HELICOPTER CORPORATION(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF STOCKHOLDERS EQUITY[UNAUDITED]

|                                                       | Preferred Stock |  | Common Stock |         | AdditionalPaid-in- |  | StockSubscription |  |  |            |  | 
|------------------------------------------------------ | --------------- |  | ------------ | ------- | ------------------ |  | ----------------- |  |  | ---------- |  | 
|
|                                                       |                 | 
|Issuance of common stock at inception - March 4, 2003  |                 |  |              |        |                    |  |                  |  |  | 21,300,000 |  | 
|                                                       |                 | 
|Common Stock Split (21,300:1) - July 22, 2004          |                 |  |              |        |                    |  |                  |  |  |           |  | 
|                                                       |                 | 
|Net loss                                               |                 |  |              |        |                    |  |                  |  |  |           |  | 
|                                                       |                 | 
|Balance at December 31, 2003                           |                 |  |              |        |                    |  |                  |  |  | 21,300,000 |  | 
|                                                       |                 | 
|Issuance of Common Shares for financing costs at par   |                 | 
|of $0.001 per share - August 4, 2004                   |                 |  |              |        |                    |  |                  |  |  | 3,245,723  |  | 
|Intrinsic value of beneficial conversion feature of    |                 | 
|debenture - August 4, 2004                             |                 |  |              |        |                    |  |                  |  |  |           |  | 
|                                                       |                 | 
|Stock subscription payment received - October 15, 2004 |                 |  |              |        |                    |  |                  |  |  |           |  | 
|Issuance of Preferred Shares from private placement at |                 | 
|par of $0.001 per share - November 23, 2004            |                 |  |              | 105,000 |                    |  | 105               |  |  |           |  | 
|Offering costs associated with private placement of    |                 | 
|preferred shares - November 23, 2004                   |                 |  |              |        |                    |  |                  |  |  |           |  | 
|                                                       |                 | 
|Issuance of Preferred Shares from private placement at |                 | 
|par of $0.001 per share - December 14, 2004            |                 |  |              | 191,000 |                    |  | 191               |  |  |           |  | 
|                                                       |                 | 
|Offering costs associated with private placement of    |                 | 
|preferred shares - December 14, 2004                   |                 |  |              |        |                    |  |                  |  |  |           |  | 
|                                                       |                 | 
|Issuance of Preferred Shares from private placement at |                 | 
|par of $0.001 per share - December 22, 2004            |                 |  |              | 20,000  |                    |  | 20                |  |  |           |  | 
|Offering costs associated with private placement of    |                 | 
|preferred shares - December 22, 2004                   |                 |  |              |        |                    |  |                  |  |  |           |  | 
|                                                       |                 | 
|Net loss                                               |                 |  |              |        |                    |  |                  |  |  |           |  | 
|                                                       |                 | 
|Balance at December 31, 2004 - Forwarded               |                 |  |              | 316,000 |                    |  | 316               |  |  | 24,545,723 |  | 

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|3
| 

U.S. HELICOPTER CORPORATION(A
DEVELOPMENT STAGE COMPANY)

STATEMENTS OF STOCKHOLDERS EQUITY[UNAUDITED]

|                                                    | Preferred Stock |  | Common Stock |         | AdditionalPaid-in- |  | StockSubscription |  |  |            |   | 
|--------------------------------------------------- | --------------- |  | ------------ | ------- | ------------------ |  | ----------------- |  |  | ---------- | - | 
|
|                                                    |                 | 
|Balance at December 31, 2004 - Forwarded            |                 |  |              | 316,000 |                    |  | 316               |  |  | 24,545,723 |   | 
|                                                    |                 | 
|Intrinsic value of beneficial conversion feature of |                 | 
|debenture - February 25, 2005                       |                 |  |              |        |                    |  |                  |  |  |           |   | 
|Intrinsic value of beneficial conversion feature of |                 | 
|debenture - August 24, 2005                         |                 |  |              |        |                    |  |                  |  |  |           |   | 
|                                                    |                 | 
|Issuance of Common Shares - November 1, 2005        |                 |  |              |        |                    |  |                  |  |  | 6,250,000  |   | 
|Offering costs associated with common stock sale -  |                 | 
|November 1, 2005                                    |                 |  |              |        |                    |  |                  |  |  |           |   | 
|Net loss                                            |                 |  |              |         |                    |  |                   |  |  |            |   | 
|                                                    |                 | 
|Balance at December 31, 2005                        |                 |  |              | 316,000 |                    |  | 316               |  |  | 30,795,723 |   | 
|Conversion of Amir Elbazs stock to convertible     |                 | 
|note - February 23, 2006                            |                 |  |              |        |                    |  |                  |  |  | (494,505   | ) | 
|Conversion of Portfolio Lenders promissary note -   |                 | 
|March 26, 2006                                      |                 |  |              |        |                    |  |                  |  |  | 500,000    |   | 
|                                                    |                 | 
|Net loss                                            |                 |  |              |         |                    |  |                   |  |  |            |   | 
|                                                    |                 | 
|Balance at March 31, 2006                           |                 |  |              | 316,000 |                    |  | 316               |  |  | 30,801,218 |   | 
|                                                    |                 | 

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|4
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U.S. HELICOPTER CORPORATION(A
DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS[UNAUDITED]

|                                                                                                                                                                                                                                                                                  | Cumulativefrom Inception(March 4, 2003) toMarch 31, |  | Three months endedMarch 31, |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------- |  | --------------------------- | -
|
|                                                                                                                                                                                                                                                                                 
|Operating Activities:                                                                                                                                                                                                                                                             |                                                     |  |                             |  
|Net (Loss)                                                                                                                                                                                                                                                                        |                                                     |  |                             | $
|Adjustments to Reconcile Net (Loss)                                                                                                                                                                                                                                               |                                                     | 
|to Net Cash Provided By (Used for)                                                                                                                                                                                                                                                |                                                     | 
|Operating Activities:                                                                                                                                                                                                                                                             |                                                     | 
|Depreciation Expense                                                                                                                                                                                                                                                              |                                                     |  |                             |  
|Amortization of Deferred Financing                                                                                                                                                                                                                                                |                                                     |  |                             |  
|Accrued Interest on Convertible Debenture                                                                                                                                                                                                                                         |                                                     |  |                             |  
|Amortization of Beneficial Conversion                                                                                                                                                                                                                                             |                                                     | 
|Feature of Long-Term Debt                                                                                                                                                                                                                                                         |                                                     |  |                             |  
|Amortization of Deferred Income                                                                                                                                                                                                                                                   |                                                     |  |                             |  
|Amortization of Derivative                                                                                                                                                                                                                                                        |                                                     |  |                             |  
|Amortization of Debt Discount                                                                                                                                                                                                                                                     |                                                     |  |                             |  
|Increase in Restricted Cash                                                                                                                                                                                                                                                       |                                                     |  |                             |  
|Changes in Assets and Liabilities:                                                                                                                                                                                                                                                |                                                     | 
|Increase (Decrease) in                                                                                                                                                                                                                                                            |                                                     | 
|Accounts Receivable                                                                                                                                                                                                                                                               |                                                     |  |                             |  
|Prepaid Expenses and Other Current Assets                                                                                                                                                                                                                                         |                                                     |  |                             |  
|Accounts Payable and Accrued Liabilities                                                                                                                                                                                                                                          |                                                     |  |                             |  
|Deposits                                                                                                                                                                                                                                                                          |                                                     |  |                             |  
|Deferred Charges                                                                                                                                                                                                                                                                  |                                                     |  |                             |  
|                                                                                                                                                                                                                                                                                  |                                                     |  |                             |  
|Net Cash - Operating Activities                                                                                                                                                                                                                                                   |                                                     |  |                             |  
|                                                                                                                                                                                                                                                                                  |                                                     |  |                             |  
|Investing Activities:                                                                                                                                                                                                                                                             |                                                     | 
|Acquisition of Property and Equipment                                                                                                                                                                                                                                             |                                                     |  |                             |  
|                                                                                                                                                                                                                                                                                  |                                                     |  |                             |  
|Financing Activities:                                                                                                                                                                                                                                                             |                                                     | 
|Proceeds From Long-Term Debt                                                                                                                                                                                                                                                      |                                                     |  |                             |  
|Proceeds From Short-Term Debt                                                                                                                                                                                                                                                     |                                                     |  |                             |  
|Payment of Short-Term Debt                                                                                                                                                                                                                                                        |                                                     |  |                             |  
|Proceeds From Sale of Preferred Stock                                                                                                                                                                                                                                             |                                                     |  |                             |  
|Proceeds from Sale of Common Stock                                                                                                                                                                                                                                                |                                                     |  |                             |  
|Release of Restricted Cash                                                                                                                                                                                                                                                        |                                                     |  |                             |  
|Payment of Financing Costs                                                                                                                                                                                                                                                        |                                                     |  |                             |  
|                                                                                                                                                                                                                                                                                  |                                                     |  |                             |  
|Net Cash - Financing Activities                                                                                                                                                                                                                                                   |                                                     |  |                             |  
|                                                                                                                                                                                                                                                                                  |                                                     |  |                             |  
|Net Increase (Decrease) in Cash                                                                                                                                                                                                                                                   |                                                     |  |                             |  
|                                                                                                                                                                                                                                                                                  |                                                     | 
|Cash - Beginning of Periods                                                                                                                                                                                                                                                       |                                                     |  |                             |  
|                                                                                                                                                                                                                                                                                  |                                                     |  |                             |  
|Cash - End of Periods                                                                                                                                                                                                                                                             |                                                     |  |                             | $
|                                                                                                                                                                                                                                                                                  |                                                     |  |                             |  
|Supplemental Disclosures of Cash Flow Information:                                                                                                                                                                                                                                |                                                     | 
|Cash paid during the periods for:                                                                                                                                                                                                                                                 |                                                     | 
|Interest                                                                                                                                                                                                                                                                          |                                                     |  |                             | $
|Income Taxes                                                                                                                                                                                                                                                                      |                                                     |  |                             | $
|                                                                                                                                                                                                                                                                                 
|Supplemental Disclosures of Non-Cash Investing and Financing Activities:
Since inception, the Company has entered into certain agreements whereby it issued convertible debentures and
amended the existing debentures and commitments to purchase its common stock [See Note 4]. |                                                    

The Accompanying
Notes Are An Integral Part of These Financial Statements.

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|5
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U.S. HELICOPTER CORPORATION(A
DEVELOPMENT STAGE COMPANY)NOTES TO FINANCIAL STATEMENTS [UNAUDITED]

(1) Basis of
Presentation

U.S. Helicopter Corporation, (U.S.
Helicopter, the Company, we or us) is a development stage company
that has devoted most of its efforts to activities such as financial planning, capital raising, and the
development of a business plan. Its core business will be providing regularly scheduled helicopter shuttle
service between many of the nations larger metropolitan airports and surrounding city-based heliports.
On March 27, 2006, the Companys flight operations commenced between the Downtown Manhattan Heliport and
John F. Kennedy International Airport ("Kennedy"). U.S. Helicopter was incorporated in the State of Delaware on March 4,
2003. We intend to introduce our service, which we call Metro-hop Airport Shuttle Service
(MASS), in the New York City market with frequent service between Kennedy, Newark Liberty and
LaGuardia airports and the New York metropolitan area heliports located at Wall Street, East 34
th Street, and West 30 th Street.

The accompanying unaudited consolidated financial
statements of U.S. Helicopter have been prepared in accordance with generally accepted accounting principles
for interim financial information and the instructions to Form 10-QSB and Item 310(b) of Regulation S-B.
Accordingly, they do not include all information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary in order to make the interim financial statements not
misleading have been included. Results for the three months ended March 31, 2006 are not necessarily
indicative of the results that may be expected for the year ending December 31, 2006. These interim
consolidated financial statements should be read in conjunction with the consolidated financial statements and
footnotes thereto of the Company and managements discussion and analysis of financial condition and
results of operations included in the Companys annual report on Form 10-KSB for the year ended December
31, 2005.

(2) Summary of Significant
Accounting Policies

Use of Estimates  The
preparation of financial statements in conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial
statements, as well as reported amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.

Concentrations of
Credit Risk  Financial instruments that potentially subject
us to significant concentrations of credit risk consist principally of cash and
cash equivalents and accounts receivable. We maintain our cash and cash
equivalents in accounts with a major financial institution in the United States
in the form of demand deposits and money market accounts. Deposits in these
banks may exceed the amounts of insurance provided on such deposits. As of March
31, 2006 and December 31, 2005, we had approximately $1,374,000 and $4,505,000,
respectively, in deposits subjected to such risk. We have not experienced any
losses on our deposits of cash and cash equivalents.

We generally do not
require collateral related to our financial instruments.

Fair Value of Financial
Instruments  Statement of Financial Accounting Standards
(SFAS) No. 107, Disclosure about Fair Value of Financial
Instruments, require the disclosure of fair values for all financial
statements, both on- and off-balance-sheet, for which it is practicable to
estimate fair value. We estimate that there are no material variations between
fair value and book value of our financial assets or liabilities as of March 31,
2006 and December 31, 2005.

Cash
Equivalents  We consider all highly liquid investments with
original maturities of three months or less when purchased to be cash
equivalents. We had no cash equivalents at March 31, 2006 and December 31, 2005.

| 
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|6
| 

U.S. HELICOPTER CORPORATION(A
DEVELOPMENT STAGE COMPANY)NOTES TO FINANCIAL STATEMENTS [UNAUDITED]

(2) Summary of
Significant Accounting Policies (Continued)

Restricted Cash
 We had restricted cash of $53,022 and $250,000 at March
31, 2006 and December 31, 2005. Our restricted cash at March 31, 2006 related to
a cash deposit required to secure a letter of credit we were required to post.
The restricted cash at December 31, 2005 related to funds held in an escrow
account to prepay a short-term payable [Note 4].

Property and
Equipment  We record our property and equipment at cost
less accumulated depreciation. For financial reporting purposes, we use the
straight-line method to compute depreciation based upon estimated useful lives
of five to fifteen years for flight equipment and three to ten years for other
equipment. We use a 30% residual value in the calculation of depreciation for
our owned flight equipment. Leasehold improvements are amortized over the
shorter of the related lease term or the estimated life of the improvements.
Equipment under capital leases are amortized over the lease term and such
amortization is included in the depreciation of property and equipment. Upon
selling or otherwise disposing of property and equipment, we remove cost and
accumulated depreciation from the accounts and reflect any resulting gain or
loss in earnings. Depreciation and amortization expense totaled $15,830, $12,861
and $588 for the cumulative period from inception (March 4, 2003) to March 31,
2006, and the three months ended March 31, 2006 and 2005, respectively.

Impairment of
Long-Lived Assets We review our long-lived assets and
identifiable intangibles for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. When such factors and circumstances exist, we compare the projected
undiscounted future cash flows associated with the future use and disposal of
the related asset or group of assets to their respective carrying amounts.
Impairment, if any, is measured as the excess of the carrying amount over the
fair value based on market value (when available) or discounted expected cash
flows of those assets, and is recorded in the period in which the determination
is made.

Deposits  We
had deposits of $674,433 and $202,765 at March 31, 2006 and December 31, 2005.
Deposits are principally related to our leasing of three helicopters and a
deposit we placed with a manufacturer for the purchase of four new helicopters.

Accounts Payable
 We had accounts payable and accrued expenses of $1,028,897
and $430,260 at March 31, 2006 and December 31, 2005, respectively, broken down
as follows:

|                                            |  | March 31,2006 |   |           | December 31,2005 |  
|------------------------------------------- |  | ------------- | - | --------- | ---------------- | -
|Professional Fees                           |  |               | $ | 254,904   |                  | $
|Finders Fees                               |  |               |   | 480,000   |                  |  
|Reservations Service                        |  |               |   | 60,000    |                  |  
|Advertising                                 |  |               |   | 50,000    |                  |  
|Other Accounts Payable and Accrued Expenses |  |               |   | 183,993   |                  |  
|                                            |  |               |   |          
|Totals                                      |  |               | $ | 1,028,897 |                  | $
|                                            |  |               |   |          

Air Traffic
Liability  We had air traffic liability of $10,991 at March
31, 2006 and $-0- at December 31, 2005. Air traffic liability refers to tickets
we have sold where the passenger has not yet used the ticket to fly.

| 
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|7
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U.S. HELICOPTER CORPORATION(A
DEVELOPMENT STAGE COMPANY)NOTES TO FINANCIAL STATEMENTS [UNAUDITED]

(2) Summary of Significant
Accounting Policies (Continued)

Deferred Salary and Taxes Payable -
Effective April 16, 2004, U.S. Helicopter entered into a five-year employment agreement with John G. Murphy.
Mr. Murphy is employed as the President and Chief Executive Officer of U.S. Helicopter. Mr. Murphys
annual salary is $225,000. Payment of Mr. Murphys salary commenced on August 9, 2004. Mr. Murphy
deferred payment of 40% of his salary until 60 days after the effectiveness of the Registration Statement for
the New Debenture (November 2, 2005). [Note 4]. One-third of the deferred amount of Mr. Murphys salary
was paid to him in December 2005 and an additional one-third was paid to him in March 2006.

Effective July 14, 2004, U.S. Helicopter entered into a
three-year employment agreement with George J. Mehm, Jr. Mr. Mehm is employed as the Senior Vice President,
Treasurer and Chief Financial Officer of U.S. Helicopter. Mr. Mehms annual salary is $130,000. Payment
of Mr. Mehms salary commenced on August 9, 2004. Mr. Mehm deferred payment of 20% of his salary until 60
days after the effectiveness of the Registration Statement for the New Debenture (November 2, 2005) [Note 4].
One-third of the deferred amount of Mr. Mehms salary was paid to him in December 2005 and an additional
one-third was paid to him in March 2006.

Effective July 14, 2004, U.S. Helicopter entered into a
two-year employment agreement with Donal McSullivan. Mr. McSullivan is employed as the Senior Vice President
and Chief Marketing Officer of U.S. Helicopter. Mr. McSullivans annual salary is $130,000. Payment of
Mr. McSullivans salary began on August 9, 2004. Mr. McSullivan deferred payment of 40% of his salary
until 60 days after the effectiveness of the Registration Statement for the New Debenture [Note 4]. One-third
of the deferred amount of Mr. McSullivans salary was paid to him in December 2005 and an additional
one-third was paid to him in March 2006.

Effective July 18, 2004, U.S. Helicopter entered into a
five-year employment agreement with Gabriel Roberts. Mr. Roberts is employed as the Vice President of Finance
and Administration of U.S. Helicopter. Mr. Roberts is currently being paid at the annual rate of $95,000.
Payment of Mr. Roberts salary commenced on August 9, 2004. Mr. Roberts deferred payment of 20% of his
salary until 60 days after effectiveness of the Registration Statement for the New Debenture (November 2,
2005) [Note 4]. One-third of the deferred amount of Mr. Roberts salary was paid to him in December 2005
and an additional one-third was paid to him in March 2006. Prior to the commencement of operations, Mr.
Roberts was paid at the annual rate of $90,000.

Effective August 24, 2004, U.S. Helicopter entered into
a two-year employment agreement with Terence O. Dennison. Mr. Dennison is employed as the Senior Vice
President and Chief Operating Officer of U.S. Helicopter. Mr. Dennison is currently being paid at the annual
rate of $130,000. Payment of Mr. Dennisons salary commenced on September 1, 2004. Mr. Dennison deferred
payment of 20% of his salary until 60 days after effectiveness of the Registration Statement for the New
Debenture (November 2, 2005) [Note 4]. One-third of the deferred amount of Mr. Dennisons salary was paid
to him in December 2005 and an additional one-third was paid to him in March 2006. Prior to the commencement
of operations, Mr. Dennison was paid at the annual rate of $90,000.

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|8
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U.S. HELICOPTER CORPORATION(A
DEVELOPMENT STAGE COMPANY)NOTES TO FINANCIAL STATEMENTS [UNAUDITED]

(2) Summary of
Significant Accounting Policies (Continued)

Stock-Based
Compensation  In December 2004, the Financial Accounting
Standards Board (FASB) issued Statement of Financial Accounting
Standards (SFAS) No. 123R, Share-Based Payment. SFAS No.
123R is a revision of SFAS No. 123, Accounting for Stock Based
Compensation, and supersedes APB 25. Among other items, SFAS 123R
eliminated the use of APB 25 and the intrinsic value method of accounting, and
requires companies to recognize the cost of employee services received in
exchange for awards of equity instruments, based on the grant date fair value of
those awards, in the financial statements. We adopted SFAS 123R effective
January 1, 2006. We currently utilize a standard option pricing model (i.e.,
Black-Scholes) to measure the fair value of stock options granted to employees.
Under the modified prospective method, which the Company has chosen
to use, compensation cost is recognized in the financial statements beginning
with the effective date, based on the requirements of SFAS 123R for all
share-based payments granted after that date, and based on the requirements of
SFAS 123 for all unvested awards granted prior to the effective date of SFAS
123R.

SFAS 123R also requires
that the benefits associated with the tax deductions in excess of recognized
compensation cost be reported as a financing cash flow, rather than as an
operating cash flow as required under current literature. We have not yet
determined what effect, if any, this change will have on future periods.

Stockholders
Equity  During July 2004, the Board of Directors and
Stockholders effectuated an amendment to our Certificate of Incorporation which
provided for a 21,300 for 1 stock split. We also filed an amendment to the
Certificate of Incorporation which increased the number of authorized shares of
our common stock to 95,000,000 and authorized 5,000,000 shares of blank check
Preferred Stock. During October 2004, the Company authorized the issuance of up
to 1,500,000 shares of Series A Preferred Stock to investors in a private
placement (See Note 5). Shares of Series A Preferred Stock are convertible into
Common Stock in certain situations (See Note 5). All share and per share data
has been retroactively adjusted to reflect the share split.

Revenue Recognition  We
recognize revenue when transportation has been provided, including scheduled passenger and charter
services.

Income Taxes  We account for
income taxes under the provisions of Statement 109, Accounting for Income Taxes. Under this
method, deferred tax assets and liabilities are determined based on the difference between the financial
statement and tax bases of assets and liabilities using enacted tax rates in effect for the years in which the
differences are expected to affect taxable income. Valuation allowances will be established when necessary to
reduce deferred tax assets to the amounts expected to be realized.

Earnings (Loss) Per Share 
Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted-average number of
common shares outstanding for the period. Diluted earnings (loss) per share is computed giving effect to all
potential dilutive common stock, including options and convertible debentures. For the period from inception
(March 4, 2003) to March 31, 2006, options, convertible shares of Series A Preferred Stock, and convertible
debentures were not included in the computation of diluted loss per share because the effect would be
antidilutive. These items could be dilutive in the future.

| 
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|9
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U.S. HELICOPTER CORPORATION(A
DEVELOPMENT STAGE COMPANY)NOTES TO FINANCIAL STATEMENTS [UNAUDITED]

(2) Summary of
Significant Accounting Policies (Continued)

Deferred Offering
Costs  Amounts paid or accrued for costs associated with an
anticipated public offering will be expensed and not recorded as a reduction of
the net proceeds, if the offering is not consummated. Upon successful completion
of such an offering, these expenses will be recorded as a reduction of the net
proceeds.

Advertising
Costs  We expense advertising costs as incurred.

(3) Deferred
Offering Costs and Deferred Financing Costs

We have incurred certain
costs related to financing activities since inception. These costs consisted
primarily of legal fees, placement agent fees and commissions which are related
to the placement of debt securities (deferred financing costs) and equity
securities (deferred offering costs).

At March 31, 2006 and
December 31, 2005, we had net deferred financing costs of $975,000 and $173,438,
respectively. These costs were related to the placement of an 8% convertible
debenture [Note 4] and a 5% convertible debenture [Note 4] and are being
amortized on a straight-line basis over the life of the debenture. We recorded
amortization expense related to deferred financing totaling $360,000, $173,438
and $28,685 for the cumulative period from inception (March 4, 2003) to March
31, 2006 and the three months ended March 31, 2006 and 2005, respectively.

At March 31, 2006 and
December 31, 2005, we had net deferred offering costs of $213,315 and $167,622,
respectively. These costs were primarily related to a Standby Equity
Distribution Agreement [Note 5] and will be offset against the proceeds of the
offering, when consummated.

(4) Convertible
Debt

Long-Term
Convertible Debt On April 8, 2005, we entered into an
Amended and Restated Secured Debenture (the New Debenture). The New
Debenture was issued in the face amount of $1,335,424 in exchange for the
previously issued debentures, which totaled $1,300,000, and accumulated interest
through the date of the revision to the agreement. The New Debenture accrues
interest at a rate of 5%. Up to 10% of the debentures principal, plus
interest, may be converted at a price equal to $0.20 per share and we registered
shares equal to the amount of shares which may be converted under this
agreement, pursuant to a registration statement declared effective by the
Securities and Exchange Commission on September 2, 2005.

On August 23, 2005, we
issued a $220,000 5% interest convertible debenture to the same investor to whom
we sold the $1,335,424 New Debenture described in exchange for $220,000 in cash
(the August 2005 Debenture). The August 2005 Debenture accrues
interest at a rate of 5%. Up to 10% of the debentures principal, plus
interest, may be converted at a price equal to $0.20 per share and we are
committed to register shares equal to the amount of shares which may be
converted under this agreement.

On March 31, 2006 we issued a $6,000,000 8% interest
convertible debenture maturing March 31, 2009 (the 2006 Debenture) to the same investor we sold
the New Debenture and the August 2005 Debenture described above. Proceeds from the 2006 Debenture were used to
repay a majority of the New Debenture and the August 2005 Debenture such that a combined $113,497 was still
outstanding at March 31, 2006 and is eligible in full for conversion at a price of $0.20 per share. The
balance after repayment of the debentures and the payment of fees is being used for general working capital
purposes.

The above issued convertible notes and warrants (in
addition to the Short-Term Convertible Debt described below) require the Company to register the resale of the
shares of common stock upon conversion or exercise of these securities. The Company accounts for the fair
value of these outstanding warrants to purchase common stock and conversion feature of its convertible notes
in accordance with SFAS No. 133 Accounting For Derivative Instruments And Hedging Activities and
EITF Issue No. 00-19 Accounting For Derivative Financial Instruments Indexed To And Potentially Settled
In A Companys Own Stock which requires the Company to bifurcate and separately account for the
conversion feature and warrants as embedded derivatives contained in the Companys convertible notes.
Pursuant to SFAS No. 133, the Company bifurcated the fair value of the conversion feature from the convertible
notes, since the conversion features were determined to not be clearly and closely related to the debt host.
In addition, since the effective registration of the securities underlying the conversion feature and warrants
is an event outside of the control of the Company, pursuant to EITF Issue No. 00-19, the Company recorded the
fair value of the conversion feature and warrants as either short-term or long-term liabilities (based on the
underlying term of the notes) as it was assumed that the Company would be required to net-cash settle the
underlying securities. The Company is required to carry these embedded derivatives on its balance sheet at
fair value and unrealized changes in the values of these embedded derivatives are reflected in the
consolidated statement of operations.

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|10
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U.S. HELICOPTER CORPORATION(A
DEVELOPMENT STAGE COMPANY)NOTES TO FINANCIAL STATEMENTS [UNAUDITED]

(4) Convertible
Debt (Continued)

Short-Term
Convertible Debt  On October 26, 2005, we entered into a
definitive convertible note purchase agreement (Short-Term Convertible
Debt) with Portfolio Lenders II, LLC, pursuant to which we issued $250,000
in principal amount of convertible notes, convertible by the holder into our
common stock at the price of $0.50 per share. The Short-Term Convertible Debt
has an interest rate of 15% per annum, 120 days of which was paid at the time of
the closing. Additional consideration of $12,500 was paid at the time of
closing. The Short-Term Convertible Debt is not collateralized. We also issued
Portfolio Lenders II, LLC a warrant to purchase up to 100,000 shares of our
common stock as an inducement to enter into the transaction. The warrant is
exercisable at a price of $0.50 per share for a period of five years from its
date of issuance. The Short-Term Convertible Debt converted into 500,000 shares
effective March 26, 2006.

(5) Securities
Offerings

Standby Equity
Distribution Agreement  On August 4, 2004, we entered into
a Standby Equity Distribution Agreement (SEDA) with an investor.
Under the original terms of the SEDA, we could, at our discretion, periodically
issue and sell to the investor shares of common stock for a total purchase price
of $10.0 million. These placements could occur, as elected by us, in increments
not to exceed $250,000 every seven business days. There is no minimum placement
under the SEDA. These placements of common stock will be at a 1% discount to the
volume weighted average price of our common stock for the 5 days immediately
following the notice date.

Under the terms of the
SEDA, the investor will receive a fee equal to 5% of the gross proceeds received
by us pursuant to the SEDA. The SEDA has a term of 2 years from the
Effectiveness of the SEDA registration. We committed to registering the SEDA
shares under the Securities Act of 1933. Proceeds of the SEDA will be offset
against deferred offering costs [Note 3] until those amounts are extinguished.

On April 8, 2005, we
entered into an Amended and Restated Standby Equity Distribution Agreement (the
New SEDA). The New SEDA increased the total amount of stock
available for purchase from $10 million to $11 million and the maximum size of
each advance was increased from $250,000 to $300,000. Under the New SEDA the
maximum advances over each period of 30 days is $1,200,000.

(6) Commitments
and Contingencies

Operating
Leases  To establish our executive offices, we entered into
a three year operating lease for real property, which expires on August 16, 2007
(as amended), at a rate of approximately $780 per month. We lease additional
space on a $500 month-to-month basis for our operations base.

Effective February 1,
2006, we entered into an agreement with the same entity to use an additional
1,590 square feet of space at the Downtown Manhattan Heliport (DMH)
as our passenger facility. The term of the agreement expires August 16, 2007,
which corresponds to the expiration of the Port Authoritys agreement with
the City of New York for the DMH. The monthly rental for the space is $6,360. In
addition, we agreed to pay the Port Authority an additional fee, based on the
Gross Receipts we earn from DMH departing flights

On February 8, 2006, we
entered into a one year lease agreement for office and hangar space. Monthly
rent will increase steadily through the term of the lease from approximately
$6,300 at inception to approximately $16,000 after July 2006. We also agreed to
issue 20,000 shares of our common stock to the lessor.

Total rental expense was
$35,280 and $4,910 for the periods ended March 31, 2006 and 2005, respectively.

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|11
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U.S. HELICOPTER CORPORATION(A
DEVELOPMENT STAGE COMPANY)NOTES TO FINANCIAL STATEMENTS [UNAUDITED]

(6) Commitments
and Contingencies (Continued)

We entered into a three
year operating lease for a helicopter, which expires on October 31, 2008, at a
monthly lease rate of $31,500 per month. There are no purchase or renewal
options. Effective November 1, 2005, we secured a Technical Support Agreement to
provide us with certain exchange components, spare parts, and technical support
for the equipment for the length of the lease term. We are in discussions with
the lessor of this helicopter to extend the lease for an additional two years
[Note 10]

In 2005 and 2006, we
entered into separate five year operating leases for two Sikorsky S-76
helicopters with a different lessor. These leases expire five years after the
commencement of the leases or redelivery to the lessor. Rent on each helicopter
is payable at the monthly rate of $35,834 per month. Each lease provides that
the lessor will pay up to $200,000 per helicopter towards the costs of shipping
and modification; the amortization of this amount is included in the lease
payment. There are no purchase or renewal options. In connection with these
leases, we entered into a Technical Support Agreement (Support
Agreement) where we will pay a set rate per flight hour, subject to price
escalation, to cover all of the helicopters major maintenance costs.

Minimum future lease
payments as of December 31, 2005 were:

|Year endingDecember 31,             | 
|----------------------------------- | 
|2006                                | 
|2007                                | 
|2008                                | 
|2009                                | 
|2010                                | 
|Thereafter                          | 
|                                    | 
|Total Minimum Future Lease Payments | 
|                                    | 

Related Party
Transactions Donal McSullivan, Senior Vice President and
Chief Marketing Officer, and John Capozzi, Marketing and Business Development
Advisor and Director, have provided certain consulting services to the Company
from its inception. In connection with the provision of such consulting
services, they have an agreement with the Company to jointly receive 10% of the
proceeds of any financings arranged with Cornell Capital and certain other
investors. As of the date of this report, they have received $732,500 of the
proceeds of the transactions with Cornell Capital and certain other investors
plus warrants to purchase up to 80,000 shares of the Companys common
stock. In addition, Mr. McSullivan and Mr. Capozzi are to receive 10%
commissions relating to commuter flight pre-sell seats and scheduled service
pre-sell seats pursuant to an agreement dated April 15, 2004. In addition, Mr.
Capozzi also has an agreement to provide ongoing marketing consulting services
to the Company at a cost of $5,000 per month, at a time when the Company
required such services.

We are a party to an
agreement dated October 28, 2005 with William Street Advisors, LLC
(William Street) which provides for payment to William Street of a
cash fee equal to five percent of the consideration paid by investors introduced
to us by William Street, as well as warrants to purchase up to five percent of
the stock purchased by such investors. William Street is a subsidiary of The
Chart Group, LP, of which Christopher Brady, one of our directors, is founder
and Chairman. In October, 2005, we entered into common stock purchase agreements
with six separate purchasers for a total of $6,250,000 whereby we issued
6,250,000 shares and warrants to purchase up to 750,000 shares. In connection
with these transactions, we paid William Street a cash fee of $312,500 and
warrants to purchase a total of 312,500 shares of our common stock, of which
156,250 warrants were issued in the name of Univest Group Limited.

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U.S. HELICOPTER CORPORATION(A
DEVELOPMENT STAGE COMPANY)NOTES TO FINANCIAL STATEMENTS [UNAUDITED]

(7) Income Taxes

We have approximately $2,414,000 of capitalized
preoperating costs that have not been deducted for tax purposes at December 31, 2005. These deductions may be
applied against future taxable income in the sixty month period following the commencement of
operations.

These future deductions were recorded by us as deferred
tax assets totaling approximately $754,000 and $212,000 at December 31, 2005 and December 31, 2004. As the
effective utilization of this deferred tax asset is dependant on future taxable profits, a valuation allowance
of approximately $754,000 and $212,000 was recorded at December 31, 2005 and December 31, 2004, respectively,
leaving a net deferred tax asset of $-0- for all periods presented.

(8) Other Events

Issuance of U.S. Certificates
 On February 13, 2006, the U.S. Federal Aviation Administration issued our Air Carrier Certificate. On
February 17, 2006, we were advised by the U.S. Department of Transportation that our Certificate of Public
Convenience and Necessity, which was issued November 1, 2005, was effective. These two certificates allow us
to begin scheduled operations. We began scheduled operations on March 27, 2006, between the Downtown Manhattan
Heliport and JFK International Airport.

Term-Sheet for Leasing of Five
Helicopters  On February 26, 2006, we executed a non-binding term sheet for the leasing
of five additional helicopters and the provision of a Support Agreement for major maintenance items. Terms of
both agreements are substantially similar to our existing agreements.

(9)
Subsequent Events

Lease of One Additional Helicopter
 Effective April 25, 2006, we executed a lease agreement for the leasing of one helicopter and the
provision of a Support Agreement for major maintenance items. Terms of this agreement are similar to our
existing agreements, with the exception of a higher monthly rent and security deposit based on the cost of the
lessor to acquire the helicopter. We will take delivery of this helicopter on May 15, 2006.

Recent Sale of Unregistered
Securities  In April, we issued a total of 1,000,000 shares of common stock and options
to purchase an additional 150,000 shares of common stock to employees, officers and directors in connection
with our 2004 Stock Incentive Plan (the Restricted Stock Awards). The Restricted Stock Awards have
a restriction on transferability and sale for a period of 18 months from and after the issuance
date.

. . . . . . .

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ITEM 2.  MANAGEMENTS
DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

The
following discussion and analysis should be read together with the financial
statements and the accompanying notes thereto included elsewhere in this report.

This
report contains certain forward-looking statements and information that are
based on the beliefs of management as well as assumptions made by and
information currently available to management. The statements contained in this
report relating to matters that are not historical facts are forward-looking
statements that involve risks and uncertainties including the Company,
including, but not limited to, the successful commercialization of our services,
future demand for our services, general economic conditions, government
regulation, competition and potential competitors strategies,
technological innovations in the helicopter industry, changes in our business
strategy or development plans, capital deployment, business disruptions, our
ability to consummate future financings and other risks and uncertainties,
certain of which are beyond our control. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may differ materially from those described herein as anticipated,
believed, estimated or expected. Additional factors that could affect the
Companys forward-looking statements include, among other things: the
impact and result of any litigation (included private litigation), or of any
investigation by the Securities and Exchange Commission or any investigation by
any other governmental agency related to the Company; and the Companys
ability to successfully implement internal controls and procedures that
remediate any material weakness in controls and ensure timely, effective and
accurate financial reporting. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual results
may differ materially from those described herein as anticipated, believed,
estimated or expected.

General

We
believe the timing is favorable, particularly in light of traffic congestion
problems affecting many of the nations highways serving major metropolitan
areas during peak traffic hours (especially direct and connecting routes to
major airports where gridlock has become the norm), to introduce our new
Metro-hop Airport Shuttle Service. Our MASS service will provide regular,
scheduled passenger helicopter service between many of the nations larger
metropolitan airports and surrounding city-based heliports. We estimate that
there are annually over 29 million air passengers traveling in and out of
Manhattan who could utilize a regularly scheduled helicopter service to access
major airports, when it becomes available.

Our
principal target market is the business traveler who, we believe, will be
willing to pay fares between $139 and $159. Individual travelers will purchase
tickets at the higher price range. Large corporate travel management companies
or corporations will purchase volume sales, which will be negotiated at a
per-ticket-price at the lower price range and will be based upon
large ticket commitments. Our approximate 8-minute regularly scheduled U.S.
Helicopter flight from Manhattan to Kennedy Airport will stand in contrast to
paying $850 to $2,770 for the same flight offered by a charter helicopter
service or paying fares from $75-$125 plus tolls and tips for 65-125 minutes of
travel time (or longer) via taxi or limousine airport ride. While our service
will be available to the general public including corporate CEOs and affluent
leisure travelers, we believe our service will have the greatest appeal to the
segment of the business traveler market (like managers, directors, etc.) who use
town car/executive car services, limos or taxi transportation, travel 2-3 times
per month and recognize the true time-saving value offered via helicopter. We
believe our service will be highly attractive (for personal reasons as well as
business reasons) compared to ground-based travel when the helicopter connection
is reasonably and moderately priced in the range that U.S. Helicopter expects to
offer and achieve.

We
intend to introduce our MASS service initially in the Metro New York City market
with service between John F. Kennedy, Newark Liberty, and La Guardia Airports
and the Downtown Manhattan, East 34thStreet, and West
30th Street Heliports. Our flight operations commenced on March 27,
2006 between the Downtown Manhattan Heliport and Kennedy Airport. Subsequently
we intend to introduce our airport shuttle service in the metropolitan
Washington DC, Chicago and Los Angeles markets, with further expansion into
other major U.S. metro-markets. The number of passengers who originate or
terminate their travel from within close proximity to one of these cities
heliports is estimated at over 200 million annually. Over 29 million passengers
originate or terminate their trips in the island of Manhattan.

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|14
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Many
of the same factors (population growth, economic expansion and airline
deregulation), which drove the growth in air passenger travel during the years
since 1975, are also responsible for the demand which currently exists for
reliable, scheduled Metro-hop airport shuttle services. Even so, as
traffic congestion intensified and systemic gridlock became the norm (while
corporate charter helicopter usage expanded), the demand for scheduled
helicopter services to and from airports to serve the general public,
especially regular business travelers, has remained largely ignored and
un-served in the United States.

U.S.
Helicopter believes that there is significant unfulfilled demand for scheduled,
Metro-Hop airport helicopter shuttle services in the U.S.,
especially in its initial target market comprised of the New York City
metropolitan area. This demand has been largely unfulfilled since the late
1970s, when New York Airways scheduled helicopter service carried over
400,000 passengers annually. During this period the market size was
approximately 35 million passengers as compared to todays, where the
market size has grown to over 96 million passengers.

Due to significant growth in
many U.S. cities, the need for ground-based infrastructure servicing metropolitan areas, and roadways
servicing major airports in particular, has outpaced capacity. Only so many subways, bus lines, and taxi
routes can be added to service these high demand routes before each city runs out of space and capability.
Adding more limousine and taxi services will not help the situation either because the bottleneck is in the
infrastructure itself. U.S. Helicopter believes that the future of transportation for short distances into and
out of these densely populated urban areas is by helicopter. By using the unique vertical take off and landing
capabilities of the helicopter, passengers will be able to travel through the city and to local destinations
without suffering through hours of gridlock. People will be able to quickly travel across town, to the local
airport, or to a neighboring city in minutes instead of hours.

Since inception, we have
incurred substantial operating losses and expect to incur additional operating losses over the remainder of
the pre-operating period and the first full year of operations. As of March 31, 2006, we had an accumulated
deficit of $(5,215,793). We have not received any revenues from inception until the start of operations on
March 27, 2006. Our operations have been financed primarily through the sale of 5% secured convertible
debentures, the private placement of Common Stock, the private placement of convertible notes, and a sale of
equity securities comprising 63,200 Units consisting of Series A Preferred Stock and common stock purchase
warrants and the sale of 8% convertible debentures. The terms of these debt and equity financings are set
forth below.

On October 26, 2005, we entered
into an agreement with Portfolio Lenders II, LLC whereby we issued a note (the Portfolio Lenders
Note) in the principal amount of $250,000. We also issued to the investor a warrant to purchase up to
100,000 shares of our common stock as an inducement to enter into the transaction. The Portfolio Lenders Note
accrues interest at the rate of 15% per annum, of which 120 days worth of interest was paid in advance on the
closing date. An additional $12,500 origination fee was also paid to the investor at closing. Interest at the
rate of 20% per annum was payable upon the occurrence of an event of default under the Portfolio Lenders Note.
The Portfolio Lenders Note, together with accrued and unpaid interest, were convertible at the option of the
holder into shares of our common stock at a conversion price equal to $0.50 per share. The investor converted
all sums due and payable under the Portfolio Lenders Note as of March 26, 2006 into 500,000 shares of common
stock. We have separately filed a registration statement including these shares, along with the 100,000 shares
of common stock issuable upon exercise of the Portfolio Lenders Warrant.

On October 26, 2005, we entered
into a Common Stock Purchase Agreement with International Financial Advisors, K.S.C. pursuant to which, on
November 1, 2005 we issued 3,000,000 shares of our common stock at a purchase price of $1.00 per share for a
total purchase price of $3 million. We also issued to this investor on November 1, 2005 a warrant to purchase
up to 750,000 shares of our common stock. The warrant is exercisable at an exercise price of $1.00 per share
for a period of three years from its date of issuance. We have separately filed a registration statement
including the shares of common stock issued and the shares of common stock issuable upon exercise of the
warrant.

The
Common Stock Purchase Agreement provides the investor with (1) the right to
participate in future equity or debt securities offerings conducted by us for a
period of two years so long as the investor holds at least five percent of our
outstanding common stock and (2) the exclusive right to develop with us a joint
venture, partnership or any other commercial arrangement involving the
establishment of aviation operations in the Middle East (as defined in the
agreement) for a period of three years.

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We also
agreed to appoint Christopher D. Brady to our Board of Directors pursuant to the Common
Stock Purchase Agreement effective on the closing date. Mr. Brady was appointed to the
Board of Directors on  November 1, 2005.

On
October 26, 2005, we also entered into separate Common Stock Purchase Agreements
with four individual investors pursuant to which we agreed to issue an aggregate
of 250,000 shares of our common stock at a purchase price of $1.00 per share for
a total purchase price of $250,000. We have separately filed a registration
statement including the resale of these shares by such stockholders.

We
paid commissions of $325,000 in cash and warrants to purchase up to 162,500
shares of our common stock exercisable at an exercise price of $1.00 per share
for a period of three years from its date of issuance in connection with this
financing. Of these commissions, a total of $162,500 in cash and warrants to
purchase 162,500 shares were paid to broker dealers. We have separately filed a
registration statement including the resale of the shares of common stock
issuable upon exercise of these warrants by such persons.

On
October 26, 2005, we entered into a Common Stock Purchase Agreement with Samama
Global Corporation (Samama) pursuant to which on November 1, 2005 we
issued 3,000,000 shares of our common stock at a purchase price of $1.00 per
share for a total purchase price of $3 million. We have separately filed a
registration statement including the resale of such shares by such stockholder.

We
also agreed to appoint a nominee of Samama to our Board of Directors in
connection with this financing. Effective February 8, 2006, we appointed George
A. Fechter to the Board in satisfaction of this obligation. Samama also agreed
that its voting rights may be automatically suspended as to any shares held by
Samama which exceed an aggregate of 24.99% of our outstanding voting securities
when taken together with shares held by all other non-U.S. citizens.

We
paid commissions of $300,000 in cash and warrants to purchase up to 150,000
shares of our common stock exercisable at an exercise price of $1.00 per share
for a period of three years from its date of issuance in connection with this
financing. Of these commissions, a total of $150,000 in cash and the warrants to
purchase 150,000 shares were paid to broker dealers. We have separately filed a
registration statement including the resale of the shares of common stock
issuable upon the exercise of these warrants by such persons.

In November and December 2004,
U.S. Helicopter issued a total of 63,200 of our Units to a limited number of accredited investors pursuant to
the 2004 Private Placement in which we received $316,000 before payment of expenses associated with the
offering. In connection with the 2004 Private Placement, 20 persons have received a total of 316,000 shares of
our Series A Convertible Preferred Stock and 126,400 warrants to purchase our common stock, of which 63,200
warrants have an exercise price equal to 125% of the conversion price of the Series A Preferred Stock and the
remaining 63,200 warrants have an exercise price equal to 150% of the conversion price of the Series A
Preferred Stock. We have separately filed a registration statement including the resale of shares issuable
upon the conversion of the Series A Preferred Stock and upon the exercise of the warrants issued in the 2004
Private Placement.

In addition to the transactions
described above, we sold a total of $7.52 million of our convertible debentures pursuant to three Securities
Purchase Agreements with Cornell Capital Partners, LP (Cornell Capital) in August, 2004, August,
2005, and March, 2006, respectively. We have filed a separate registration statement including the resale of a
total of 11,929,689 shares issuable in connection with the August 2005 Debenture and the March 2006 Debenture,
as well as the 5,150,000 shares of common stock issuable upon the exercise of warrants issued to Cornell
Capital in connection with the March 2006 Debenture.

On March
31, 2006, we entered into a Securities Purchase Agreement with Cornell Capital pursuant
to which we issued convertible debentures in the principal amount of $6,000,000 (the
March 2006 Debenture). The March 2006  Debenture is convertible at the option
of Cornell Capital any time up to maturity at a conversion price equal to the lesser of
$1.45 or 95% of the lowest volume weighted average price of our common stock during the
thirty  trading days immediately preceding the conversion date or the interest payment
date, as applicable, as quoted by Bloomberg, LP, but in no event less than $.001. We are
not permitted to issue such number of shares to Cornell  Capital upon conversion that
would result in Cornell Capital owning in excess of 4.9% of our outstanding common stock,
which may only be waived by Cornell Capital either in its sole discretion with 60 days notice
or without  notice upon an event of default. This restriction may significantly limit and
delay our ability to access funds under the SEDA. The debentures have a three-year term
and accrue interest at 8% per year payable in our common  stock at the rate equal to the
conversion price of the debentures in effect at the time of payment. Interest and
principal payments on the March 2006 Debenture are due on the maturity date of March 31,
2009.

We entered
into an amended security agreement with Cornell Capital pursuant to which we continued
the security interest of Cornell Capital in all our assets which we granted in connection
with the original  debenture issued by us to Cornell Capital.

We are
required to register all shares issuable pursuant to the March 2006 Debenture pursuant to
the terms of an Investor Registration Rights Agreement between Cornell Capital and us. We
have separately  filed a registration statement including a total of 10,802,179 shares of
common stock underlying the March 2006 Debenture.

In
connection with this financing, we issued to Cornell Capital five year warrants with the
following exercise prices: 1,250,000 at $1.00 per share, 1,250,000 at $1.15 per share,
1,250,000 at $1.30 and  1,250,000 at $1.45. We have separately filed a registration
statement including these shares with the Securities and Exchange Commission.

In addition
to the March 2006 Debenture, we have also entered into Securities Purchase Agreements
with Cornell Capital whereby we previously issued a total of $1.52 million in principal
of secured  convertible debentures in August 2004 ($1,000,000), February 2005 ($300,000)
and August 2005 ($220,000).  As of the date of this Report, a total of $114,500 remained
due under these debentures combined after repayments of  approximately $1,028,000 made by
the Company on March 31, 2006.

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RESULTS OF OPERATIONS

Since inception on March 4, 2003
through March 27, 2006, the Company has had no revenues from operations and did not generate any revenues from
operations until March 27, 2006. For the three months ended March 31, 2006 and for the period from inception
(March 4, 2003 through March 31, 2006, total revenues were $13,876.

From inception to March 31,
2006, the Company has incurred professional fees totaling $865,814. These fees are comprised of legal fees for
general matters, negotiation/closing of the Convertible Debenture transactions, accounting and audit fees,
other consulting fees, transfer agent fees and registered agent fees.

Since inception, the Company has
incurred operating losses. As of March 31, 2006, our accumulated deficit was $(5,215,793).

LIQUIDITY AND FINANCIAL CONDITION

We have financed our operations
since inception primarily through private placement financings with Cornell Capital, a private placement of a
convertible note with Portfolio Lenders II, LLC, private placements of common stock conducted in October and
November 2005 and the 2004 Private Placement. In August 2004, the Company closed on a $1.3 million convertible
debenture financing with Cornell Capital, of which the Company has received gross proceeds of $1.3 million to
date. In November and December of 2004, the Company closed on a private placement offering of 63,200 Units to
a limited number of accredited investors, pursuant to which we received $316,000 before payment of expenses
associated with the offering. U.S. Helicopter received net proceeds of $206,300 in the 2004 Private Placement,
which was used for general working capital purposes and startup costs. The Company closed on an additional
$220,000 convertible debenture financing with Cornell Capital in August, 2005. On October 26, 2005, the
Company closed on a $250,000 convertible note offering with Portfolio Lenders II, LLC. In addition, in
November, 2005, the Company closed on six common stock private placement transactions with six investors for a
total of $6,250,000, pursuant to which the Company issued a total of 6,250,000 shares of its common
stock.

In addition, in February 2006,
we issued a convertible note in the amount of $494,505 to one investor in exchange for 494,505 shares of our
common stock held by this investor. This note bears interest at 10% per annum and is repayable on February 23,
2007 and may be extended to February 23, 2008. The note is convertible into shares of our common stock at the
lesser of $1.00 per share or 100% of the fair market value of our common stock for the ten trading days prior
to the conversion date, provided that the conversion price shall not be less than $0.50 per share.

We plan to acquire through lease
or mortgage, and put into service, up to eight (8) helicopters during our first year of flight operations
which commenced on March 27, 2006. On November 2, 2005, we took delivery of our first helicopter pursuant to a
lease dated as of November 1, 2005. At the time of entering into the lease, we paid the lessor the first
months rent, in advance, and a security deposit, as defined in the lease. Future rent payments are due
on the first of each month and continue during the term. The lease term is for three years with no renewals or
purchase options. However, we hope to be in a position to negotiate a renewal at the end of the term of the
lease.

On December 1, 2005, February
14, 2006 and May 15, 2006, respectively, we took delivery of three additional aircraft pursuant to respective
lease agreements dated December 1, 2005, February 10, 2006 and April 26, 2006. The lease terms are for five
years each. At the time of entering into the leases, we paid the lessor the first months rent, in
advance, and a security deposit, as defined in the lease. Future rent payments are due on the first of each
month and continue during the term.

In addition, the Company has
entered into a Deposit and Advance Order Agreement with Sikorsky for the purchase of four aircraft to be
delivered between September 2007 and February 2008. The Company has made a deposit with Sikorsky in the amount
of $400,000, or $100,000 per aircraft. The Company and Sikorsky are in the process of negotiating a formal
sales agreement for the aircraft. No assurances can be given that a formal sales agreement with Sikorsky will
be completed on terms favorable to us or at all.

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We will need approximately $16.0
million of helicopter lease/debt financing for our next four helicopters, inclusive of deposits required in
connection with any financing transaction. It is anticipated that the purchase price per aircraft for the next
five used aircraft, including the cost of refurbishment and re-configuration of interiors, will be
approximately $3.8 million, which amount is included in the overall purchase price described herein. It is
anticipated that the security deposit for these five aircraft will be approximately $0.3 million, with the
balance of the purchase price to be in the form of lease financing. It is anticipated that the manufacturers
of these aircraft or the financing source, along with the engine manufacturer, will enter into
power-by-the-hour (PBH) arrangements, whereby the Company would be allowed to cover
the cost of major maintenance items over a period of time, rather than as the maintenance costs are
specifically incurred. The Company has been required to place deposits with the aircraft manufacturers for new
aircraft to be delivered between September 2007 and February 2008. Accounting for PBH arrangements will be
accomplished through our Statement of Operations, where we will expense in full the amount of such costs at
the rates in accordance with any contracts we have in place. We will record deposits made to the
manufacturer(s) as Deposits on our Balance Sheet. These deposits could be used by the manufacturer(s) if there
is an event of default by us.

In addition to the lease
financing described above, it is currently anticipated that the Company would place an order in 2006 for
delivery in early 2008 of an additional four new aircraft at an average purchase price of $8.0 million, and an
additional fourteen (14) aircraft after 2007 at the same average purchase price. The current anticipated
delivery schedule for the initial and additional aircraft for the first year of operations is as
follows:

| |  | November 2, 2005: Received Delivery of one
S76B aircraft
| | - | --------------------------------------------------------

| |  | December 1, 2005: Received Delivery of one
S76B aircraft
| | - | --------------------------------------------------------

| |  | February 14, 2006: Received Delivery of
one S76B aircraft
| | - | ---------------------------------------------------------

| |  | May 15, 2006: Received Delivery of one
S76B aircraft
| | - | ----------------------------------------------------

| |  | July 2006: Delivery of one S76B
aircraft
| | - | ----------------------------------------

| |  | September 2006: Delivery of one S76B
aircraft
| | - | ---------------------------------------------

| |  | November 2006: Delivery of two S76B
aircraft
| | - | --------------------------------------------

The
above dates for delivery of aircraft we have not yet received represent the
anticipated delivery to us. The aircraft will require modifications to bring
them to our standards, which we estimate will take approximately 45 days per
aircraft. The Company signed a term sheet on February 26, 2006 for the financing
of five aircraft.

There
can be no assurance that the Company will be successful in entering into
financing agreements for these aircraft. If these financings cannot be
consummated, the Company will assess all available alternatives.

To
date our financing has come from the sale of $7.52 million of convertible
debentures, $0.3 million in private placement proceeds in the 2004 Private
Placement, $0.25 million from the sale of a convertible note and $6.25 million
in private placement proceeds from the sale of our common stock. We also have
the ability to sell up to $11 million of our common stock to Cornell Capital
pursuant to the SEDA. We anticipate that we will not need to raise additional
capital to finance operations through year-end 2006, assuming that our results
of operations reasonably correspond to our business plan. If results of
operations fail to meet our reasonable expectations, we may need to raise
additional capital to finance operations.

RECENT ACCOUNTING PRONOUNCEMENTS.

In
December 2004, the Financial Accounting Standards Board, or FASB, issued SFAS
No. 153, Exchanges of Nonmonetary Assets, (SFAS No. 153). SFAS No.
153 amends Accounting Principles Board (APB) Opinion No. 29,
Accounting for Nonmonetary Transactions, to require exchanges of
nonmonetary assets be accounted for at fair value, rather than carryover basis.
Nonmonetary exchanges that lack commercial substance are exempt from this
requirement. SFAS 153 is effective for nonmonetary exchanges entered into in
fiscal years beginning after June 15, 2005. We do not routinely enter into
exchanges that could be considered nonmonetary, accordingly we do not expect the
adoption of SFAS 153 to have a material impact on our financial statements.

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In
December 2004, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards (SFAS) No. 123R,
Share-Based Payment. SFAS No. 123R is a revision of SFAS No. 123,
Accounting for Stock Based Compensation, and supersedes APB 25.
Among other items, SFAS 123R eliminates the use of APB 25 and the intrinsic
value method of accounting, and requires companies to recognize the cost of
employee services received in exchange for awards of equity instruments, based
on the grant date fair value of those awards, in the financial statements. The
effective date of SFAS 123R is the first reporting period beginning after
December 15, 2005, although early adoption is allowed. SFAS 123R requires
companies to adopt its requirements using a modified prospective
method. Under the modified prospective method, compensation cost is
recognized in the financial statements beginning with the effective date, based
on the requirements of SFAS 123R for all share-based payments granted after that
date, and based on the requirements of SFAS 123 for all unvested awards granted
prior to the effective date of SFAS 123R. The modified retrospective
method also permits entities to restate financial statements of previous periods
based on proforma disclosures made in accordance with SFAS 123.

We
will adopt SFAS 123R effective January 1, 2006. We currently utilize a standard
option pricing model (i.e., Black-Scholes) to measure the fair value of stock
options granted to employees. SFAS 123R permits us to continue to use such a
model.

SFAS
123R also requires that the benefits associated with the tax deductions in
excess of recognized compensation cost be reported as a financing cash flow,
rather than as an operating cash flow as required under current literature. We
have not yet determined what effect, if any, this change will have on future
periods.

In
March 2005, the FASB issued Interpretation No. 47 (FIN 47), Accounting for
Conditional Asset Retirement Obligationsan interpretation of FASB
Statement No. 143. FIN 47 clarifies that an entity is required to
recognize a liability for the fair value of a conditional asset retirement
obligation when incurred if the liabilitys fair value can be reasonably
estimated. FIN 47 also clarifies when an entity would have sufficient
information to reasonably estimate the fair value of an asset retirement
obligation. FIN 47 was adopted in the fourth quarter of 2005 and has had no
significant impact on our financial position, results of operations or cash
flows.

In May
2005, the FASB issued SFAS No. 154, Accounting Changes and Error Correctionsa
replacement  of APB Opinion No. 20 and FASB Statement No. 3 (SFAS No. 154).
SFAS No. 154 requires retrospective  application as the required method for reporting a
change in accounting principle, unless impracticable or a  pronouncement includes
specific transition provisions. SFAS No. 154 also requires that a change in
depreciation, amortization or depletion method for long-lived, nonfinancial assets be
accounted for as a  change in accounting estimate effected by a change in accounting
principle. This statement carries forward  the guidance in APB Opinion No. 20, Accounting
Changes, for the reporting of the correction of an error and  a change in
accounting estimate. SFAS No. 154 is effective beginning January 1, 2006. SFAS No. 154 is
not  expected to have a significant impact on our financial position, results of
operations or cash flows.

In
June 2005, the Emerging Issues Task Force (EITF) reached a consensus
on EITF Issue No. 05-6, Determining the Amortization Period for Leasehold
Improvements Purchased after Lease Inception or Acquired in a Business
Combination (EITF 05-6). EITF 05-6 requires that leasehold
improvements that are placed in service significantly after and not contemplated
at or near the beginning of the lease term be amortized over the shorter of the
useful life of the assets or a term that includes required lease periods and
renewals that are deemed to be reasonably assured at the date the leasehold
improvements are purchased. EITF 05-6 was adopted in the fourth quarter of 2005.
EITF 05-6 did not have a significant impact on our financial position, results
of operations or cash flows.

In
February 2006, FASB issued FASB 155, Accounting for Certain Hybrid Financial
Instruments an amendment of FASB 133, Accounting for Derivative
Instruments and Hedging Activities, and FASB 140, Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities. FASB 155, provides the framework for fair value remeasurement
of any hybrid financial instrument that contains an embedded derivative that
otherwise would require bifurcation as well as establishes a requirement to
evaluate interests in securitized financial assets to identify interests. FASB
155 further amends FASB 140 to eliminate the prohibition on a qualifying
special-purpose entity from holding a derivative financial instrument that
pertains to a beneficial interest other than another derivative financial
instrument. The guidance FASB 155 also clarifies which interest-only strips and
principal-only strips are not subject to the requirements of FASB 133 and
concentrations of credit risk in the form of subordination are not embedded
derivatives. This Statement is effective for all financial instruments acquired
or issued after the beginning of an entitys first fiscal year that begins
September 15, 2006. FASB 155 is not expected to have a material impact on the
Companys consolidated financial statements.

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In
March 2006, FASB issued FASB 156, Accounting for Servicing of Financial
Assetsan amendment of FASB Statement No. 140. FASB 156 requires the
recognition of a servicing asset or servicing liability under certain
circumstances when an obligation to service a financial asset by entering into a
servicing contract. FASB 156 also requires all separately recognized servicing
assets and servicing liabilities to be initially measured at fair value
utilizing the amortization method or fair market value method. FASB 156
is effective at the beginning of the first fiscal year that begins after
September 15, 2006. FASB 156 is not expected to have a material impact on the
Companys consolidated financial statements.

CRITICAL ACCOUNTING POLICIES.

U.S.
Helicopters consolidated financial statements and related public financial
information are based on the application of accounting principles generally
accepted in the United States (GAAP). GAAP requires the use of
estimates, assumptions, judgments and subjective interpretations of accounting
principles that have an impact on the assets, liabilities, revenue and expense
amounts reported. These estimates can also affect supplemental information
contained in our external disclosures including information regarding
contingencies, risk and financial condition. We believe our use of estimates and
underlying accounting assumptions adhere to GAAP and are consistently and
conservatively applied. We base our estimates on various assumptions that we
believe to be reasonable under the circumstances. Actual results may differ
materially from these estimates under different assumptions or conditions. We
continue to monitor significant estimates made during the preparation of our
financial statements.

Our
significant accounting policies are summarized in the Notes of our consolidated
financial statements. While all these significant accounting policies impact its
financial condition and results of operations, U.S. Helicopter views certain of
these policies as critical. Policies determined to be critical are those
policies that have the most significant impact on U.S. Helicopters
consolidated financial statements (or are anticipated to have such impact when
operations commence) and require management to use a greater degree of judgment
and estimates. Actual results may differ from those estimates. Our management
believes that given current facts and circumstances, it is unlikely that
applying any other reasonable judgments or estimate methodologies would cause a
material effect on our consolidated results of operations, financial position or
liquidity for the periods presented in this report. Our critical accounting
policies are useful lives of assets, impairment testing of assets, revenue
recognition, and deferred offering costs.

USEFUL
LIVES OF TANGIBLE AND INTANGIBLE ASSETS. Depreciation and amortization of
tangible and intangible assets are based on estimates of the useful lives of the
assets. We regularly review the useful life estimates established to determine
their propriety. Changes in estimated useful lives could result in increased
depreciation or amortization expense in the period of the change in estimate and
in future periods that could materially impact our financial condition and
results of operations.

IMPAIRMENT
OF LONG-LIVED ASSETS. We adopted Statement of Financial Accounting Standards
(SFAS) No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets (SFAS No. 144) SFAS No. 144 requires that
long-lived assets and certain identifiable intangibles be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets to
be held and used is measured by a comparison of the carrying amount of an asset
to future net cash flows expected to be generated by the asset. If such assets
are considered to be impaired, the impairment to be recognized is measured by
the amount by which the carrying amount of the assets exceeds the fair value of
the assets. An impairment charge could materially impact our financial condition
and results of operations.

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REVENUE
RECOGNITION. We recognize revenue when transportation has been provided, including
scheduled  passenger and charter services.

DEFERRED OFFERING COSTS AND
DEFERRED FINANCING COSTS. We incurred certain costs related to financing activities during the three-month
periods ended March 31, 2006 and 2005. These costs consisted primarily of legal fees, placement agent fees and
commissions which are related to the placement of debt securities (deferred financing costs) and equity
securities (deferred offering costs).

Additional Information.
With respect to our cash requirements and sources during the next 12 months, see Managements Discussion
and AnalysisLiquidity and Financial Condition. We will lease or purchase approximately four additional
12-seat used, low-time helicopters roughly through and including fourth quarter 2006. During that time period,
we expect that our most significant equipment-related and plant-related expenses will be a combination of
helicopter lease and/or debt payments (approximately $1.75 million). With respect to changes in number of
employees, we have 34 full time employees and five part-time employees as of May 5, 2006 and expect to have
approximately 85 full-time and 20 part-time employees at the end of fourth quarter 2006.

Off-Balance
Sheet Arrangements. U.S. Helicopter has no off-balance sheet arrangements.

PLAN OF
OPERATION.

Overview

U.S. Helicopter Corporation is a
development stage company whose core business will be providing regularly scheduled helicopter shuttle service
between many of the nations larger metropolitan airports and surrounding city-based heliports. The
Company intends to introduce its service  called Metro-hop Airport Shuttle Service or
MASS  in the New York City market with frequent service between Kennedy, Newark Liberty, and
LaGuardia airports and the New York metropolitan area heliports located at Wall Street, East 34th Street, and
West 30th Street. The Companys MASS service is intended to provide a fast, reliable, and safe
alternative for airline passengers who wish to avoid the uncertainties and frequent delays associated with
depending upon surface-based transportation to and from airports.

As the Company completes its
first year of operations and the introduction of its MASS service in New York City, it intends to phase-in
similar service during the following four years in other major U.S. metropolitan markets such as Washington,
D.C., Chicago and Los Angeles.

In addition to the
airport-focused MASS shuttle service, the Company also intends to develop and introduce other regularly
scheduled helicopter services (as differentiated from charter flights) including: commuter service between
suburban helipads and New York City metropolitan heliports; weekend service between New York City metropolitan
heliports and weekend/vacation retreat destinations such as the Hamptons, Cape Code and Marthas
Vineyard; scheduled service to and from entertainment and resort destinations such as casinos based in
Atlantic City and Connecticut; and utilizing aircraft at night or on weekends when aircraft are not flying the
MASS shuttle service.

U.S. Helicopter must raise
additional capital in the next 12 months in order to purchase aircraft. Management currently plans to acquire
through lease or mortgage up to four additional helicopters during the Companys first year of
operations, for which approximately $16 million in lease/debt financing will be needed. The Company acquired
its first four aircraft pursuant to leases on November 1, 2005, December 1, 2005, February 14, 2006 and May 15, 2006. The
Company is currently in negotiations with a number of potential financing sources for its startup and aircraft
acquisition costs; however, there can be no assurances that a transaction with any of these potential
financing sources will be completed.

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The
Company has 34 full-time employees and five part-time employees as of May 5,
2006 and expects to have a total of approximately 85 full-time and 20 part-time
employees as of the end of fourth quarter 2006. As of the end of fourth quarter
2007, the Company expects to have approximately 170 full time and 40 part-time
employees.

In
August 2004, we received our first tranche of $1.0 million ($772,500 net of
expenses) from a financing transaction with Cornell Capital pursuant to the
terms of a Securities Purchase Agreement (the SPA). In February
2005, we received our second tranche of $300,000 ($270,000 net of expenses)
pursuant to the SPA. In exchange for financing under the SPA, we agreed to issue
to Cornell Capital $1,300,000 of our 5% secured, convertible debentures. On
April 8, 2005, we entered into an Amended and Restated Secured Debenture (the
April 2005 Debenture) in the amount of $1,335,424, representing the
principal and interest due under the prior debentures as of such date. The April
2005 Debentures conversion provision entitles Cornell Capital at any time,
and from time to time, to convert up to 10% of the principal plus accrued
interest into U.S. Helicopters $0.001 par value common stock, at a price
of $0.20 per share. In the event of a default under the April 2005 Debenture,
Cornell Capital may convert up to 100% of all sums due and payable under the
Convertible Debenture. To date, we have used the proceeds from these
transactions for general working capital purposes and startup costs.

In
addition, we entered into an Amended and Restated Standby Equity Distribution
Agreement with Cornell Capital in April 2005 (the SEDA) whereby we
may, at our discretion, periodically sell to Cornell Capital shares of our
common stock for a total purchase price of $11.0 million. For each share of
common stock purchased under the SEDA, Cornell Capital will pay U.S. Helicopter
99% of the volume weighted average price on the Over-the-Counter Bulletin Board
or other principal market on which our common stock is traded for the 5 days
immediately following the notice date. Further, Cornell Capital will retain a
fee of 5% of each advance under the SEDA. In connection with the SEDA, Cornell
Capital received a commitment fee of 2,472,527 shares of our common stock. We
are not registering the shares issuable pursuant to the SEDA in this offering.

In
addition, on August 23, 2005, we received net proceeds of $190,000 from an
additional financing transaction with Cornell Capital pursuant to the terms of a
new Securities Purchase Agreement with Cornell Capital, whereby $220,000 of 5%
secured convertible debentures were issued (the August 2005
Debenture). Since January 1, 2006, we have been required to make monthly
payments of $40,000 until all amounts under the August 2005 Debenture are repaid
in full. The August 2005 Debenture bears interest at 5% per annum and is secured
by the Amended and Restated Security Agreement under identical terms as the
April 2005 Debenture. Up to 10% of all sums due and payable under the August
2005 Convertible Debenture may be converted at Cornell Capitals option,
into shares of our common stock at a price of $0.20 per share. All other
material terms of the August 2005 Convertible Debenture are identical to the
Convertible Debenture.

On
March 31, 2006, we received net proceeds of $5,505,000 from an additional
financing with Cornell Capital pursuant to the terms of a new Securities
Purchase Agreement with Cornell Capital, whereby $6,000,000 of 8% secured
convertible debentures were issued (the March 2006 Debenture). The
March 2006 Debenture is convertible at the option of Cornell Capital any time up
to maturity at a conversion price equal to the lesser of $1.45 or 95% of the
lowest volume weighted average price of our common stock during the thirty
trading days immediately preceding the conversion date or the interest payment
date, as applicable, as quoted by Bloomberg, LP, but in no event less than
$.001. The March 2006 Debenture has a three-year term and accrues interest at 8%
per year payable in our common stock at the rate equal to the conversion price
of the March 2006 Debenture in effect at the time of payment. Interest and
principal payments on the March 2006 Debenture are due on the maturity date of
March 31, 2009.

We
began operations on March 27, 2006 and will ramp up our New York operations
throughout 2006 and the first half of 2007. On November 2, 2005, we took
delivery of our first helicopter pursuant to a lease dated as of November 1,
2005. On December 1, 2005, February 14, 2006 and May 15, 2006, respectively, we
took delivery of three additional aircraft pursuant to respective lease
agreements dated December 1, 2005, February 10, 2006 and April 26, 2006,
respectively.

The
executive offices of U.S. Helicopter are located at the 6 East River Piers,
Suite 216, Downtown Manhattan Heliport, New York, New York 10004; telephone
number 212-248-2002. Our operations base is located at 1000 Great Meadow Road,
Suite 200, Sikorsky Memorial Airport, Stratford, Connecticut 06615; telephone
number 203-378-2002.

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Business Strategy

U.S.
Helicopter was founded to provide the most efficient and cost effective
alternative to existing transportation problems, by initiating scheduled
short-hop helicopter service into and around metropolitan areas
utilizing new, dual engine, dual pilot helicopters. We believe this type of
service represents the future of transportation in major metropolitan areas.
Currently there is no scheduled helicopter service in any of our targeted
markets. The sole competition comes from surface-based transportation
alternatives such as rail, bus, taxi, and limo allowing U.S. Helicopter to gain
the first mover advantage in each of its target markets.

In
addition to continued ground-based traffic congestion problems and delays, there
have been significant increases in crowds and wait times associated with
check-in and security at airports due to the terrorist attacks of September 11,
2001. Airlines have been trying to find new and better ways to attract business
travelers back to flying. They have spent significant time and money figuring
out ways to get passengers through this process in less time. U.S.
Helicopters service will offer our passengers an alternative solution
because we will provide check-in and full security screening at each heliport.
After passengers are cleared for boarding our helicopter at the heliport (where
crowds are significantly fewer than at major airports), they will be delivered
by U.S. Helicopter to the secure side of their destination airport. The overall
process time for passengers will be greatly reduced as they will move through
security with just six to twelve people on their helicopter flight instead of
the crowds of hundreds or thousands at the airport.

Roll-Out Plan

While
there are numerous metropolitan areas throughout the world that currently need
U.S. Helicopters service, management of U.S. Helicopter has made the
decision to launch our service in New York City. New York is one of the
countrys most densely populated metropolitan areas, with a highly
congested ground-based transportation system. It is almost impossible to travel
into, out of, and throughout the city without encountering major time-consuming
traffic. New York has also reached its limit in infrastructure development
because of the restriction on real estate due to the waterways surrounding the
city. This traffic congestion problem has even spread to many of New York
Citys access highways and throughout the northeast corridor, spanning from
Boston to Washington DC. U.S. Helicopter has identified the need for a
helicopter based transportation service, which would directly target several of
the citys high demand travel routes thereby alleviating some of the
congestion.

Currently
New York has the most developed helicopter infrastructure in the world with
three strategically located public access heliports, a published and certified
network of helicopter navigational routes, and a mayor who has expressed an
understanding of helicopters and the value they offer corporations. Other cities
such as Washington DC, Chicago and Los Angeles are not far behind. Management
believes that by executing a strategy to provide the first scheduled helicopter
service in each of its target markets, U.S. Helicopter will be able to leverage
its first mover advantage to maintain a strong-hold in each market.

Getting
from Manhattan to Kennedy, LaGuardia, or Newark Liberty airports can be
inefficient from a travel time perspective, and in many cases, can take hours
door to door. This is due to traffic congestion in the city as well as on each
of the roadways that service the airports. This is especially true during peak
flight hours, which happen to coincide with rush hour traffic. For each airport,
peak flight times occur in the morning between 7:00 am and 10:00 am and in the
afternoon between 3:00 pm and 7:00 pm. The cost of a corporate limo service to
the airport can cost between $75 and $125 and take anywhere from 1 to 2 plus
hours travel time. At an average flight time of 10 minutes and an initial fare
between $139-159, U.S. Helicopters helicopter services will provide a
quick and cost effective alternative to ground transportation. The
Companys travel time estimates are derived from a number of sources
including travel data from the Port Authority of New York and New Jersey,
surveys of business persons working and/or traveling to/from Manhattan via the
airports, and management team experience. Recently, the Company confirmed
helicopter travel times through actual flights conducted by United Technologies,
an entity affiliated with Sikorsky Aircraft, on two separate occasions.

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The
highest demand in the New York City market is expected to come from the Downtown
Wall Street and East 34th Street Heliports and from Kennedy and
LaGuardia or Newark Liberty Airports. Each of these destinations currently
supports the highest amount of traffic, making success at these locations the
easiest to achieve. U.S. Helicopters initial service will support this
high demand for scheduled helicopter service, and we believe will provide the
quickest acceptance and commensurate growth rates. As our services gain
acceptance, we intend to acquire additional aircraft and larger aircraft to
support flights between each Manhattan heliport and all three major New York
City airports.

The
best way to demonstrate the time savings that U.S. Helicopters service
will provide is to compare the total Elapsed Time that passengers
would experience from the moment they step out of their front door until the
time they reach their airport departure gate using each transportation
alternative. This comparison is shown in the following table:

|Elapsed Travel Time Comparison Sheet (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
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|TravelMethod                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
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|Ground                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Ground                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Helicopter                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
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|Ground                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Ground                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Ground                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Helicopter                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
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|Ground                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Ground                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Ground                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Helicopter                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
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|(1) The travel time estimates used
in this table were taken from several different reliable sources. First,  travel data
from the Port Authority of New York and New Jersey was used to establish the existing
methods of  travel and the published elapsed time for each of those travel methods. This
included the amount of time a  passenger would have to plan to travel to/from each
airport. Second, informal management surveys were taken  of business persons working
and/or traveling to/from Manhattan via the airports, which data correlated very  well
with Port Authority data. Third, the Companys management team has thorough knowledge of
the New York  City area with respect to transportation and airline service, which was
relied upon to separate the data into  the different segments as shown in the above
table. In addition, the Company has confirmed travel times  through actual flights
provided by United Technologies (an entity affiliated with Sikorsky Aircraft) on two
recent occasions. In all scenarios, the elapsed time of ground based travel is
significantly higher than that  of the helicopter.

We anticipate that within
approximately 12 months after launching our shuttle service in New York, we will have completed initiation of
the Metro-hop Airport Shuttle Service in that market and established the platform for optimum development of
our business model. We will then position the company for expansion into other markets both domestically and
internationally. Management plans to enter three additional markets after the initial introduction of services
in New York, within the five-year timeframe which commenced on March 27, 2006. Washington DC, Chicago, and Los
Angeles, along with New York represent the top four markets that we plan to service in the United States. The
Washington DC, Chicago, and Los Angeles markets have been identified because they have transportation and
congestion problems similar in scope to New York Citys.

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We plan to acquire through lease
or mortgage and put into service up to four additional helicopters during our first year of flight operations
which commenced on March 27, 2006. We received delivery of our initial aircraft on November 2, 2005 pursuant
to a lease agreement dated November 1, 2005 for the lease of one Sikorsky S-76B Helicopter. The lease term is
for three years with no renewals. At the time of entering into the lease, we paid the lessor the first
months rent, in advance, and a security deposit, as defined in the lease. Future rent payments are due
on the first of each month during the Term. On December 1, 2005, February 14, 2006 and May 15, 2006,
respectively, we took delivery of three additional aircraft pursuant to respective lease agreements with a
third party dated December 1, 2005, February 10, 2006 and April 26, 2006.

We will need to secure
approximately $16 million of helicopter debt/lease financing for our additional aircraft. We have also signed
a term sheet on February 26, 2006 for the lease of the next three helicopters and a first right of refusal on
the next ten helicopters. We have not completed the financing arrangements necessary for the leasing of these
aircraft. Pursuant to the term sheet, we anticipate entering into a five-year lease with monthly payments. The
lessor has proposed to pay or reimburse the Company for the cost of transporting the aircraft and all
necessary maintenance and inspection work up to $200,000 per aircraft. The lessor will require a security
deposit of two months of monthly rent at the time the lease is entered into. In addition, the Company will
contract with the lessor for standard power by the hour (PBH) arrangements covering
all major airframe and engine components and parts. The Company will be required to insure the aircraft hull
value and passenger liability. The lessor will have a right of first refusal for the next ten helicopters
which must be offered at competitive market rates for rent and PBH charges.

We need to obtain financing in
order to pay owners or the aircraft manufacturers for the acquisition of the helicopters that we will operate.
In connection with these financing arrangements potential financers have advised us that they may require the
aircraft manufacturer to provide financial and performance guarantees. We may be required to issue some
combination of our common stock, options and/or warrants to one or more financiers for our additional
helicopters. Notwithstanding a successful grant of our common stock, options and/or warrants, we may not be
able to obtain the necessary helicopter financing on favorable terms and we may not be able to get our
aircraft manufacturer to provide the necessary guarantees. We are in negotiations with a number of potential
financing sources; however, there can be no assurance that a transaction with any of these lenders will be
completed.

RISK FACTORS

WE ARE SUBJECT TO VARIOUS RISKS
THAT MAY MATERIALLY HARM OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS. IF ANY OF THESE RISKS OR
UNCERTAINTIES ACTUALLY OCCURS, OUR BUSINESS, FINANCIAL CONDITION OR OPERATING RESULTS COULD BE MATERIALLY
HARMED. IN THAT CASE, THE TRADING PRICE OF OUR COMMON STOCK COULD DECLINE AND YOU COULD LOSE ALL OR PART OF
YOUR INVESTMENT.

RISKS RELATED TO OUR BUSINESS AND
AVIATION INDUSTRY

We Need to Maintain
Numerous Regulatory Permits, Certificates, Licenses, etc. from Governmental Authorities. Our Ability to
Continue Operations Will Be Adversely Affected if Any of Our Authorizations are Suspended or
Revoked.

We are subject to a wide range
of governmental regulation by U.S. Federal, regional, state and local governmental agencies. Our ability to
continue operations will be adversely affected if any of the entities described below modifies, suspends or
revokes our authorizations for failure to maintain compliance with applicable rules and regulations. Our
business requires permits, licenses, operating approvals, and various other authorizations by, among others,
the following authorities:

| |  | U.S. Department of Transportation
(DOT): We filed our application for a Certificate of Public Convenience and Necessity with the DOT
on February 14, 2005. On October 17, 2005, we received an Order to Show Cause from the DOT, which permitted us
to commence promotion of our scheduled services. On November 1, 2005 we received a Final Order
from the DOT. We received an Effective certificate from the DOT on February 17, 2006.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| |  | U.S. Federal Aviation Administration
(FAA): We filed a Pre-Application Statement of Intent with the FAA on February 14, 2005. On March
14, 2005, we filed a formal application with supporting manuals and documentation to obtain a FAR Part-135 Air
Carrier Certificate. The FAA has conducted a conformity check of our first helicopter. We received an Air
Carrier Certificate from the FAA on February 13, 2006.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | U.S. Transportation Security
Administration (TSA): We have been working with personnel of the TSA in Washington, D.C. and New
York City to meet TSA guidelines for security operations at the New York City heliports in connection with TSA
Part-1542 Airport/Heliport Facility policies and Part-1544 Air Carrier/Aircraft Operator regulations. On June
1, 2005, the TSA issued and approved our security plan under TSA Part-1544. The TSA had assigned a Principal
Security Inspector to facilitate the TSA compliance process. The TSA has agreed to conduct all security
procedures at New York City-owned heliports (Downtown Manhattan Heliport where TSA security is already being
performed and East 34th Street Heliport).
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | U.S. Federal Communication Commission
(FCC): We have received FCC approval to establish radio frequencies and communications between our
operating helicopters and operations facilities.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Port Authority of New York and New Jersey:
We have signed agreements with the Port Authority for operation and fees at JFK International Airport. We
signed agreements for space and bulk take-off fees with the Port Authority for the Downtown Manhattan
Heliport. We will need to sign agreements with the Port Authority for LaGuardia and Newark
airports.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

We Need to Obtain
Equipment and Equipment Financing in a Compressed Timeframe with Limited Manpower and Limited Resources. We
Could Fail. Certain Financiers May Require an Equity Position in Us in Exchange for Providing Financial and
Performance Guarantees.

We plan to acquire through lease
or mortgage and put into service up to five additional helicopters during our first year of flight operations
which commenced on March 27, 2006. To accomplish this we will need to secure approximately $16 million of
helicopter debt/lease or mortgage financing. We have entered into an aircraft lease for our first helicopter
on November 1, 2005 and received delivery of the aircraft on November 2, 2005. On December 1, 2005, February
14, 2006 and May 15, 2006, respectively, we took delivery of three additional aircraft pursuant to
respective lease agreements dated December 1, 2005, February 10, 2006 and April 26, 2006. On January 9, 2006,
we executed a Deposit Agreement with Sikorsky Aircraft Corporation for the purchase of four Sikorsky S76 C++
helicopters in late 2007 and early 2008. In accordance with the Deposit Agreement, we paid Sikorsky a $400,000
deposit, which became non-refundable upon our Board of Directors approval. In addition, we have signed two
term sheets (see below); however, there can be no assurances that a transaction with this or any other
potential sources will be completed at all, or on terms favorable to us.

We need to obtain financing in
order to pay the aircraft manufacturers or owners for the acquisition and/or construction of the helicopters
that we will operate beginning in late 2007. In connection with these financing arrangements, there is a
potential that we may require the aircraft manufacturer to provide financial and performance guarantees. In
addition, potential financiers may require an equity position in us if such guarantees are required.
Accordingly, we may be required to issue some combination of our common stock, options and/or warrants to one
or more financiers for our helicopters. On February 26, 2006, we signed a term sheet with a potential lessor
to lease us helicopters in 2006. Notwithstanding a successful grant of our common stock, options and/or
warrants, we may not be able to obtain the necessary helicopter financing on favorable terms and we may not be
able to get our aircraft manufacturer to provide the necessary guarantees.

We Have Limited Revenue
from Operations and Must Raise Additional Capital To Finance Operations. Our Operations since Inception have
not Generated a Profit.

We began operations on March 27,
2006 but have no revenue from operations prior to that date. We have relied on and will continue to rely on
significant external financing to fund our operations. To date our financing has come from the sale of $7.52
million of convertible debentures ($7.52 million funded to date), $6.25 million in private placement proceeds
from the sale of our common stock, $0.3 million in private placement proceeds from the 2004 Private Placement
and $11.0 million that is available to us under a standby equity distribution agreement (the SEDA
funds). We anticipate that we will not need to raise additional capital to finance operations through
year-end 2006, assuming that our results of operations reasonably correspond to our business plan. If results
of operations fail to meet our reasonable expectations, we may need to raise additional capital to finance
operations. We must also raise $20 million for the leasing of aircraft.

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|26
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Our operations since inception
in March 2003 have not generated a profit. We generated a net loss of ($17,865) during the period from
inception in March 2003 to December 31, 2003, a net loss of ($549,961) during the twelve months ended December
31, 2004, a net loss of $(2,546,291) for the 12 months ended December 31, 2005, a net loss of $(3,114,117)
during the period from inception through December 31, 2005, a net loss of $(2,101,676) for the three months
ended March 31, 2006 and a net loss of $(5,215,793) during the period from inception through March 31,
2006.

We
cannot assure you that financing, whether from external sources or related
parties, will be available on favorable terms. Our inability to obtain adequate
financing will result in the need to reduce or curtail business operations. Any
of these events would be materially harmful to our business and may result in a
lower stock price. We may need to raise additional capital to fund our
anticipated future expansion. No financing commitments for future capital needs
have been obtained as of the date of this Report, although discussions are being
held.

We
Need to Obtain Contracts for Operating and Landing Facilities.

During
the balance of 2006, we must enter into operating/rental agreements with one
remaining heliport facility in New York City, and two of the three major
airports servicing the New York area. Beginning in 2007, we must enter into
operating agreements with facilities of other cities as our operations expand
into other target markets throughout the United States. We have obtained
operating agreements with the Port Authority of New York and New Jersey for the
Downtown Manhattan Heliport and John F. Kennedy Airport. We will need to enter
into agreements with the Port Authority with respect to operations at LaGuardia
and Newark Liberty Airports. We have entered into an agreement with the FAA-Air
Traffic Control Manager for Kennedy, La Guardia and Newark/Liberty Airports. In
addition, we must enter into an operating agreement with the East 34th Street
Heliport which is currently owned by the City of New York and operated by
MacQuery Aviation North America. A similar arrangement will be needed later in
the first year of operations for the West 30th Street Heliport owned
by the State of New York and operated by Air Pegasus. There can be no guarantee
that we will be able to obtain such agreements.

We
Need to Obtain Contracts with Major Airlines.

In
order to conduct our business, we need to enter into contracts with major
airlines regarding airport services and processing for our passengers,
cross-marketing, airline interline and, in some cases, code sharing. We have
entered into an Interline Agreement and ground handling agreement with American
Airlines as of the date of this report. The Interline Agreement governs the
procedures for passenger traffic handling and settlement of fees between the
parties.

The
Air Transportation Industry has Changed Fundamentally Since the Terrorist
Attacks on September 11, 2001, and our Business, Financial Condition And
Operating Results could be Materially Adversely Affected as a Result.

Since
the terrorist attacks of September 11, 2001, the air transportation industry has
experienced fundamental and lasting changes, including substantial revenue
declines and cost increases, which have resulted in industry-wide liquidity
issues. The terrorist attacks significantly reduced the demand for air travel,
and additional terrorist activity involving the airline industry could have an
equal or greater impact. Although global economic conditions have improved from
their depressed levels after September 11, 2001, the airline industry has
continued to experience a reduction in high-yield business travel and increased
price sensitivity in customers purchasing behavior. In addition, aircraft
fuel prices are at or near historically high levels. The airline industry has
continued to add or restore capacity despite these conditions. We expect all of
these conditions will continue.

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|27
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Our
Business is Dependent on the Availability and Price of Aircraft Fuel.
Significant Disruptions in the Supply of Aircraft Fuel or Continued Periods of
Historically High Fuel Costs Could Materially Adversely Affect our Operating
Results.

Our
operating results will be significantly impacted by changes in the availability
and to a lesser extent by increases in the price of aircraft fuel. Fuel prices
increased substantially in 2004 and 2005. Aircraft fuel prices remain at near
historically high levels. Due to the competitive nature of the air
transportation industry, we may not be able to pass on any increases in fuel
prices to our customers by increasing our fares. Political disruptions or wars
involving oil-producing countries, changes in government policy concerning
aircraft fuel production, transportation or marketing, changes in aircraft fuel
production capacity, environmental concerns, natural events such as hurricanes
and other unpredictable events may result in fuel supply shortages and
additional fuel price increases in the future.

Our
Failure to Successfully Implement our Growth Strategy Could Harm our Business.

Our
growth strategy involves the initial launch of our service on March 27, 2006, a
gradual phase-in of expanded service in our first market, and expanding the
number of markets served. Achieving our growth strategy is critical in order for
our business to achieve economies of scale and to achieve profitability.
Increasing the number of markets we serve depends on our ability to access
suitable heliport and airports located in our targeted geographic markets in a
manner that is consistent with our cost strategy. Any condition that would deny,
limit or delay our access to heliport and airports we seek to serve in the
future will constrain our ability to grow. Opening new markets requires us to
commit a substantial amount of resources, even before the new services commence.
Expansion is also dependent upon our ability to maintain a safe and secure
operation and will require additional personnel, equipment and facilities as
well as obtaining approval from the applicable regulatory agencies.

An
inability to hire and retain personnel, timely secure the required equipment and
facilities in a cost-effective manner, efficiently operate our expanded
facilities, or obtain the necessary regulatory approvals may adversely affect
our ability to achieve our growth strategy. We cannot assure you that we will be
able to successfully establish new markets and our failure to do so could harm
our business.

Expansion
of our markets and services may also strain our existing management resources
and operational, financial and management information systems to the point that
they may no longer be adequate to support our operations, requiring us to make
significant expenditures in these areas. We expect that we will need to develop
further financial, operational and management controls, reporting systems and
procedures to accommodate future growth. We cannot assure you that we will be
able to develop these controls, systems or procedures on a timely basis, and the
failure to do so could harm our business.

We
Have a Lack of Operating History.

U.S.
Helicopter is a start-up company. Our business plan is focused on entry into the
regularly scheduled passenger helicopter industry. Our company had no operating
history prior to March 27, 2006. This industry has been dormant in New York
since the 1980s. Our efforts in this regard are recent and in varying stages of
development. There can be no assurance that successful entry into the regularly
scheduled passenger helicopter industry will occur or that we will be able to
develop our business plan as a new line of business. Moreover, our lack of an
operating history in the passenger helicopter industry makes it impossible to
predict whether or not the company will operate profitably. While our management
collectively possesses substantial experience in the aviation industry, and
certain experience in taking start-up companies from formation to an operational
stage, there can be no assurances that U.S. Helicopter will be able to locate,
hire and retain the necessary personnel to manage and operate the business,
develop and implement necessary systems, obtain contracts and obtain financing
as contemplated in our business plan.

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|28
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The
Air Transportation Industry is Subject to Extensive Government Regulation, and
Changes in or New Regulations may Increase our Operating Costs.

Air
carriers are subject to extensive regulatory and legal compliance requirements
that result in significant costs. For instance, the FAA from time to time issues
directives and other regulations relating to the maintenance and operation of
aircraft that necessitate significant expenditures. We expect to continue
incurring expenses to comply with the FAAs regulations. In addition,
Congress has passed laws in the past several years, and the DOT and the TSA have
issued regulations relating to the operation of airlines that have required
significant expenditures. We have not yet received approvals from these
governmental agencies; however, we will be obligated to comply with the
regulations established by these agencies if and when we do receive such
authorizations.

Other
laws, regulations, taxes and airport rates and charges have also been imposed
from time to time that significantly increase the cost of air transportation
operations or reduce revenues. For example, the Aviation and Transportation
Security Act, which became law in November 2001, mandates the federalization of
certain airport security procedures and imposes additional security requirements
on airports and airlines, most of which are funded by a per-ticket tax on
passengers and a tax on airlines.

We
expect to continue to incur expenses in connection with complying with
government regulations. Federal agencies other than the FAA, DOT and TSA also
govern other aspects of airline operations, which may require changes to current
operating procedures and thereby impact our future economic or operating
performance. Additional laws, regulations, taxes and airport rates and charges
have been proposed from time to time that could significantly increase the cost
of airline operations or reduce the demand for air travel. If adopted, these
measures could have the effect of raising ticket prices, reducing revenue and
increasing costs. We may not be able to increase our fares to pass these fees on
to our customers. We cannot assure you that these and other laws or regulations
enacted in the future will not harm our business.

Risk
of Competition Could Impact our Growth Potential Within a Market or In Expansion Cities.

If
our business is successful in the New York market, our success may prompt a
helicopter operator (sightseeing or charter) to inaugurate scheduled service in
New York or another city. Our projected passenger load factors in our first year
of operations will be readily available to helicopter operators in cities across
the US. Should potential competitors decide to start scheduled service, such
providers could upgrade their operating certification with the FAA and DOT and
potentially become operators of scheduled service within a minimal timeframe.
Such a development could impact our operations or expansion timetable.

The
Market we Anticipate for our Helicopter Service Might Not Develop or Take Longer
to Develop or be More Costly to Develop than we Anticipate or the Market May be
Unreceptive to our Service.

The
New York market for our business has not been served on a scheduled basis since
Pan Am or New York Airways offered scheduled helicopter service in the 1980s.
The success of our passenger service in a market that was exited by all carriers
in the 1980s cannot be guaranteed or accurately predicted. The number of
potential passengers cannot be predicted with any degree of certainty and there
can be no assurance that we will operate in a profitable manner.

Former
helicopter operators exited the market for a number of reasons that included:
higher maintenance costs on old helicopter technologies; lack of maintenance
reliability; lack of subsidies; poor overall financial conditions of the
operators and their accordant inability to support such an operation; lack of
helicopter availability at affordable prices; poor schedule reliability; adverse
publicity stemming from a helicopter accident on top of the Pan Am Building in
New York City in 1977; less than adequate heliports and facilities; lack of
back-up helicopters to support performance reliability; and lack of dedicated
helicopter route networks to avoid inclement weather holding patterns with fixed
wing aircraft. These prior operators operated in an era prior to helicopter GPS
enabled navigation. Having such technology available would have allowed such
operators to operate flights to and from New York City airports independent of
the arrival and departure activities of fixed wing aircraft.

|  
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In
January 2005, we received full approval from the FAA  Air Traffic Control
for a series of helicopter-only Special Visual Flight (SVFR) routes between
Manhattan and each of the three New York City-area airports. We developed these
routes for use with the aircrafts Global Positioning System (GPS)
navigation system. Each route makes use of the helicopters flight
capability, including hover-and-hold and low level of speed approaches, which
fixed wing aircraft cannot do. By making use of the helicopters
flexibility, we were able to develop these routes, which do not intersect or
interfere with any of the active fixed wing flight routes at the airports, and
thus are not subject to delays associated with the fixed wing flight patterns.

Interruptions
or Disruptions in Service at One of our Hub Heliports and/or Hub Airports Could
Have a Material Adverse Impact on our Operations.

Our
business during our first year of flight operations will be heavily dependent on
our operations at the Downtown Manhattan and East 34th Street
Heliports and at Kennedy, Newark and LaGuardia airports. Each of these hub
operations includes flights that gather and distribute traffic from markets in
the geographic region surrounding the hub to other major cities. A significant
interruption or disruption in service at any of these airports could have a
serious impact on our business, financial condition and operating results. We
will have facility lease and operating agreements permitting us to use the
landing facilities at the various heliports in our markets, however, the owners
and operators of these heliports are subject to the risks inherent in their own
businesses which could in turn adversely impact on us including the risks that
the heliports could close, reduce operating hours or services, increase their
fees, or be adversely affected by litigation or regulatory matters.

Helicopter
Operations Involve Risk that may not be Covered by our Insurance or may Increase
the Cost of our Insurance.

The
operation of helicopters inherently involves a degree of risk. Hazards such as
aircraft incidents (including incidents due to mechanical failure, human error,
and other causes), collisions, fire and adverse weather and marine conditions
are part of the business of providing helicopter services and may result in
personal injury, loss of life, damage to property and equipment and suspension
or reduction of operations. Any loss of our liability insurance coverage, once
obtained, or the loss, expropriation or confiscation of, or severe damage to, a
material number of our helicopters could adversely affect our operations or
financial condition. We cannot assure you that we will be able to maintain
adequate insurance coverage in the future at commercially reasonable rates or
that it will be available to us.

In
addition, as a result of the terrorist attacks on September 11, 2001, aviation
insurers significantly reduced the maximum amount of insurance coverage
available to commercial air carriers for liability to persons (other than
employees or passengers) for claims resulting from acts of terrorism, war or
similar events. At the same time, aviation insurers significantly increased the
premiums for such coverage and for aviation insurance in general. Without
governmental support, we will have to obtain insurance coverage commercially,
which could have substantially less desirable coverage, may not be adequate or
available to protect our risk of loss from future acts of terrorism and may
result in a material increase to our operating expenses.

We
are at Risk of Losses and Adverse Publicity Stemming from Any Accident Involving
our Helicopters.

If
one of our helicopters were to be involved in an accident, we could be exposed
to significant tort liability. The insurance we plan to carry to cover damages
arising from any accidents may be inadequate. In the event that our insurance is
not adequate, we may be forced to bear substantial losses from an accident. In
addition, any accident involving a helicopter that we operate could create a
public perception that our helicopters are not safe or reliable, which could
harm our reputation, result in air travelers being reluctant to fly on our
helicopters and harm our business. Customers consider safety and reliability as
primary concerns in selecting a provider of helicopter transportation services.
If we fail to maintain a record of safety and reliability that is satisfactory
to our customers, our ability to retain customers and attract new customers may
be adversely affected.

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|  

Seasonality
and other Factors Impact Demand for Air Travel.

Demand
for air travel is affected by factors such as seasonality, economic conditions,
war or the threat of war, fare levels and weather conditions. In addition,
demand for air travel at particular airlines may be impacted from time to time
by, among other things, actual or threatened disruptions to operations due to
labor issues. Due to these and other factors, operating results for an interim
period are not necessarily indicative of operating results for an entire year.

We
will have a Significant Amount of Debt and Fixed Obligations which could Harm
Our Ability to Meet our Growth Strategy and Impair our Ability to Service our
Fixed Obligations.

We
will have a significant amount of fixed obligations under leases/mortgages
related to our aircraft, heliport space, airport terminal space, other
facilities and office space. Our debt and fixed obligations could:

| |  | impact our ability to obtain additional
financing to support capital expansion plans and for working capital and other purposes on acceptable terms or
at all;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | divert substantial cash flow from our
operations and expansion plans in order to service our fixed obligations;
| | - | ---------------------------------------------------------------------------------------------------------------

| |  | require us to incur significantly more
interest or rent expense than we currently do; and
| | - | -----------------------------------------------------------------------------------------

| |  | place us at a possible competitive
disadvantage compared to less leveraged competitors and competitors that have better access to capital
resources.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------

Our
ability to make scheduled payments on our debt and fixed obligations will depend
on our future operating performance and cash flow, which in turn will depend on
prevailing economic and political conditions and financial, competitive,
regulatory, business and other factors, many of which are beyond our control. We
cannot assure you that we will be able to generate sufficient cash flow from our
operations to pay our debt and fixed obligations as they become due, and our
failure to do so could harm our business. If we are unable to make payments on
our debt and fixed obligations, we could be forced to renegotiate those
obligations or obtain additional equity or debt financing. To the extent we
finance our activities with additional debt, we may become subject to financial
and other covenants that may restrict our ability to pursue our growth strategy.
We cannot assure you that our efforts would be successful or timely or that we
could refinance our obligations on acceptable terms, if at all.

Our
Maintenance Costs will Increase as our Fleet Ages.

History
has shown that maintenance costs will increase over time. We will incur lower
maintenance expenses during the first few years of operations. As equipment
ages, the cost to maintain it naturally increases. For example, it costs more to
maintain an aircraft that is 15 to 20 years old than one that is five years old.
In addition, the costs of maintenance increase each year due to increases in
parts prices from manufacturers and increases in labor rates for mechanics.
Ongoing manufacturer and FAA directives also increase maintenance costs. We are
negotiating multi-year maintenance contracts which anticipate cost increases of
approximately four percent per year. Our maintenance costs will increase both on
an absolute basis and as a percentage of our operating expenses, as our fleet
ages.

If
We are Unable to Attract and Retain Qualified Personnel at Reasonable Costs or
Fail to Maintain our Company Culture, our Business Could be Harmed.

Our
business plan is labor intensive, with labor costs representing a significant
percentage of our anticipated operating expenses. We expect salaries, wages and
benefits to increase on a gross basis and these costs could increase as a
percentage of our overall costs. Since we will compete against the major U.S.
airlines and other helicopter operators for pilots, mechanics and other skilled
labor and many of them offer wage and benefit packages that will exceed ours, we
may be required to increase wages and/or benefits in order to attract and retain
qualified personnel or risk considerable employee turnover. If we are unable to
hire, train and retain qualified employees at a reasonable cost, our business
could be harmed and we may be unable to complete our expansion plans.

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Our
Failure to Successfully take Delivery of, Place into Service and Integrate into
our Operations the Aircraft we Intend to Lease/Purchase could Harm our Business.

We
have received our initial four aircraft between November 2005 and May 2006. Our
estimated delivery of eight aircraft over the first 12 months as follows:

| |  | November 2, 2005: Received Delivery of one
S76B aircraft
| | - | --------------------------------------------------------

| |  | December 1, 2005: Received Delivery of one
S76B aircraft
| | - | --------------------------------------------------------

| |  | February 14, 2006: Received Delivery of
one S76B aircraft
| | - | ---------------------------------------------------------

| |  | May 15, 2006: Received Delivery of one
S76B aircraft
| | - | ----------------------------------------------------

| |  | July 2006: Delivery of one S76B
aircraft
| | - | ----------------------------------------

| |  | September 2006: Delivery of one S76B
aircraft
| | - | ---------------------------------------------

| |  | November 2006: Delivery of two S76B
aircraft
| | - | --------------------------------------------

The
above dates for delivery of aircraft we have not yet received represent the
anticipated delivery to us. The aircraft will require modifications to bring
them to our standards, which we estimate will take approximately 45 days per
aircraft. These acquisitions would require financing in the amount of $16
million. Acquisition of aircraft involves a variety of risks relating to its
ability to be successfully placed into service, including:

| |  | difficulties or delays in obtaining the
necessary certification from aviation regulatory authorities and validation from the FAA as to the
aircrafts airworthiness;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | delays in meeting the aircraft delivery
schedule;
| | - | -------------------------------------------------

| |  | difficulties in obtaining financing on
acceptable terms; and
| | - | ------------------------------------------------------------

| |  | inability of the aircraft and all of its
components to comply with agreed upon specifications and performance standards.
| | - | ------------------------------------------------------------------------------------------------------------------------

In
addition, we also face risks in integrating this aircraft into our
infrastructure and operations, including, among other things, the costs,
resources and time needed to hire and train pilots, technicians and other
skilled support personnel. Our failure to successfully take delivery of, place
into service and integrate into our operations our new aircraft could harm our
business.

We
will Rely on Maintaining a High Daily Aircraft Utilization Rate to Keep our
Costs Low, which Makes us Especially Vulnerable to Delays.

One
of our key competitive strengths will be maintaining a high daily aircraft
utilization rate, which is the amount of time that our aircraft will spend in
the air carrying passengers. High daily aircraft utilization will allow us to
generate more revenue from our aircraft and will be achieved in part by reducing
turnaround times at heliports and airports so we can fly more hours on average
in a day. The expansion of our business to include new markets and destinations,
more frequent flights on current routes and expanded facilities could increase
the risk of delays. Aircraft utilization is reduced by delays and cancellations
from various factors, many of which are beyond our control, including adverse
weather conditions, security requirements, air traffic congestion and
unscheduled maintenance. Reduced aircraft utilization may limit our ability to
achieve and maintain profitability as well as lead to customer dissatisfaction.

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Our
Business is Highly Dependent on the New York Market and Increases in Competition
or a Reduction in Demand for Air Travel in this Market would Harm our Business.

Our
plan for market entry contemplates phased-in growth focused on adding flights in
New York City at the Downtown Manhattan Heliport, East 34th Street
Heliport and the West 30th Street Heliport following our initial
launch of New York service out of the Downtown Manhattan and East
34th Street Heliports.

Our
business would also be harmed by any circumstances causing a reduction in demand
for air transportation in the New York metropolitan area, such as adverse
changes in local economic conditions, negative public perception of the city,
additional terrorist attacks, security concerns or significant price increases
linked to increases in airport access costs and fees imposed on passengers.

We
May be Subject to Unionization, Work Stoppages, Slowdowns or Increased Labor Costs.

Unlike
most airlines, we have a non-union workforce. Not all established airlines are
unionized, such as JetBlue Airways. Without extraordinary efforts between
management and all levels of employees to provide consistent two-way
communications, employees have a tendency to seek union representation so that
their needs and quality of life issues are being addressed.

Startup
to mid-size airlines are less likely to be unionized primarily because of two
main factors: (1) such companies are more capable than larger airlines of
properly managing communications between management and employees and attend to
quality of life issues; and (2) employee groups remain comparatively small,
which makes union representation less economically beneficial from the
standpoint of both the employee groups and the applicable unions.

We
do not anticipate that our employees will seek union representation because we
maintain a philosophy of open communication and integrity, and we anticipate
having a comparatively small number of employees during our first few years of
operations. However, there can be no assurances that once we hire more
employees, any of our different employee groups will not unionize and require
separate collective bargaining agreements. If any group of our employees were to
unionize and we were unable to reach agreement on terms of their collective
bargaining agreement, or if we were to experience widespread employee
dissatisfaction, we could be subject to difficulties encountered by other air
carriers such as work slowdowns or stoppages. In addition, we may be subject to
disruption by organized labor groups protesting our non-union status. Any of
these events would be disruptive to our operation and could harm our business.

Our
Results of Operations will Depend in part on Factors Beyond our Immediate
Control, such as the Price of Fuel, Weather and Seasonality.

We
expect our quarterly operating results to fluctuate due to changes in aircraft
fuel and security costs as well as to the timing and amount of maintenance and
advertising expenditures. Seasonality will also impact our operations. We are
susceptible to adverse weather conditions, including snow storms and hurricanes,
as a result of our operations being concentrated on the East Coast. As we enter
new markets, we could be subject to additional seasonal variations along with
any potential competitive responses to our entry. As a result of these factors,
quarter-to-quarter comparisons of our operating results may not be a good
indicator of our future performance. In addition, it is possible that in any
future quarter our operating results could be below the expectations of
investors and any published reports or analyses regarding U.S. Helicopter. In
that event, the price of our common stock could decline, perhaps substantially.

We
are Subject to the Risks of Having a Limited Number of Suppliers for our
Aircraft and Engines.

One
of the elements of our business strategy is to operate only one general type of
aircraft equipped with one or possibly two types of engines. Our dependence on a
single type of aircraft and engine for all of our flights makes us particularly
vulnerable to any problems associated with the manufacturers airframe and
engines, including design defects, mechanical problems, contractual performance
by the manufacturers, or adverse perception by the public that would result in
customer avoidance or in actions by the FAA resulting in an inability to operate
our aircraft. Even though a single-manufacturer fleet is easier and more cost
effective to maintain since employees will only have to be trained to service
one type of engine, a more diversified fleet would make us better positioned
than we will be to manage such events.

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|  

We
Rely Heavily on Automated Systems to Operate our Business and Any Failure of
These Systems could Harm our Business.

We
will depend on automated systems to operate our business, including a
computerized reservation system, a telecommunication systems and a website. Our
website and reservation system must be able to accommodate a substantial volume
of traffic and deliver important flight information. Substantial or repeated
website, reservations system or telecommunication systems failures could reduce
the attractiveness of our services and could cause customers dissatisfaction.
Any disruption in these systems could result in the loss of important data,
increase our expenses and generally harm our business.

Our
Business could be Harmed if We Lose the Service of our Key Personnel.

Our
business depends upon the efforts of our Chief Executive Officer, John G.
Murphy, and Chief Operating Officer, Terence O. Dennison and a number of
management and operating personnel. We do not maintain key-man life insurance on
Messrs. Murphy and Dennison. The loss of the services of any of these executives
could materially harm our business because of the cost and time necessary to
replace and train a replacement. Such a loss would also divert management
attention away from operational issues. We may have difficulty replacing
management or other key personnel who leave and, therefore, the loss of the
services of any of these individuals could harm our business.

Other
Companies may have Difficulty Acquiring Us, Even if Doing So would Benefit our
Stockholders, due to Provisions under our Corporate Charter and Bylaws, as well
as Delaware Law.

Provisions
in our amended certificate of incorporation, our bylaws, and under Delaware law
could make it more difficult for other companies to acquire us, even if doing so
would benefit our stockholders. Our certificate of incorporation and bylaws
contain the following provisions, among others, which may inhibit an acquisition
of our company by a third party:

| |  | advance notification procedures for
matters to be brought before stockholder meetings;
| | - | --------------------------------------------------------------------------------------

| |  | a limitation on who may call stockholder
meetings; and
| | - | ------------------------------------------------------

| |  | the ability of our board of directors to
issue up to 5,000,000 shares of preferred stock without a stockholder vote.
| | - | --------------------------------------------------------------------------------------------------------------------

We
are also subject to provisions of Delaware law that prohibit us from engaging in
any business combination with any interested stockholder, meaning
generally that a stockholder who beneficially owns more than 15% of our stock
cannot acquire us for a period of three years from the date this person became
an interested stockholder, unless various conditions are met, such as approval
of the transaction by our board of directors. In addition, United States laws
and the regulations of the DOT will require that United States citizens must
effectively control us. As a result, our president and at least two-thirds of
our board of directors must be United States citizens and not more than 24.9% of
our voting stock may be owned by non-U.S. citizens (although subject to DOT
approval, the percent of foreign economic ownership may be as high as 49%). Any
of these restrictions could have the effect of delaying or preventing a change
in control.

We
may be Unable to Protect our Intellectual Property Against Unauthorized Use by Third
Parties.

Our
success and ability to compete depends in part upon our proprietary rights and
intellectual property. On March 21, 2006, we obtained registration of the mark
U.S. Helicopter from the United States Patent and Trademark Office.
However, existing laws afford only limited protection for our intellectual
property. Despite our efforts to protect our intellectual property, a third
party could utilize our corporate name without authorization. Our means of
protecting our proprietary rights may not be adequate and our competitors may
use our corporate name to our disadvantage. If we are unable to adequately
protect our intellectual property or become subject to intellectual property
infringement claims, we could incur costly and time-consuming litigation.

|  
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|  

If
We were to Determine that our Aircraft, Parts or Inventory were Impaired, it
would have a Significant Adverse Effect on our Operating Results.

We
plan to periodically perform impairment reviews in order to determine whether we
need to reduce the carrying value of our aircraft and related assets with a
related charge to earnings. In addition to the fact that the value of our fleet
will decline as it ages, the potential for industry excess capacity could evolve
and other factors beyond our control, may further contribute to the decline of
the fair market value of our aircraft and related parts and inventory. If such
an impairment does occur, Statement of Financial Accounting Standards No. 144
(FAS 144), Accounting for the Impairment or Disposal of Long-Lived
Assets, would require us to write down these assets to their estimated fair
market value through a charge to earnings. A significant charge to earnings
would adversely affect our financial condition and operating results.

Because
the Airline Industry is Characterized by Low Gross Profit Margins and High Fixed
Costs, a Minor Shortfall from Expected Revenue could have a Significant Impact
on Earnings.

The
airline industry as a whole, and scheduled service in particular, are
characterized by low gross profit margins and high fixed costs. Fixed costs
include, but are not limited to, aircraft, facilities, flight crews, fuel and
customer service staff. Existing shuttle services between cities provided by
established airlines such as Delta and US Air have demonstrated a broad range of
occupancy on their flights based on the time of day.

Shuttle
service airlines believe the marketing benefits of operating hourly flights
provide an airline with the maximum potential of revenue recognition. However,
the fixed costs of dedicating specific resources do not vary significantly with
the number of passengers carried. Therefore, the risk of a relatively small
change in the number of passengers, or in fare pricing, or traffic mix could, in
the aggregate, have a significant effect on operating and financial results.

We
May Need Agreements with a Clearinghouse Settlement Plan.

If
we enter into an agreement with an airline that requires it, we may need
agreements with one of several airline clearinghouses to facilitate the
processing of our tickets issued by such airline on their ticket stock and paid
to such airline for travel provided by us. If we fail to obtain such an
agreement, our overall ticket sales may be adversely affected, since the vast
majority of our passengers will be traveling to an airport to make a connecting
flight. An airline clearinghouse agreement will facilitate ticket purchases with
passengers who buy tickets for an airline on the airlines website. There
can be no assurance these agreements will be reached or what deposits may be
required by the clearinghouses.

Significant
Foreign Ownership may Affect our Ability to Retain our Air Carrier Certificate
and will Constitute a Default under our Loan Agreements.

Federal
law requires that United States air carriers be citizens of the United States.
For a corporation to qualify as a United States citizen, the President and at
least two-thirds of the directors and other managing officers of the corporation
must be United States citizens and at least 75% of the voting interest of the
corporation must be owned or controlled by United States citizens. Voting
interest is represented by direct ownership of our common stock. If we are
unable to satisfy these requirements, our operating authority from the
Department of Transportation may be revoked. Because we are unable to control
the transfer of our stock, we are unable to assure that we can remain in
compliance with these requirements in the future. In October, 2005, we amended
our Bylaws to provide for the automatic suspension of voting rights of foreign
stockholders who hold shares of our common stock in excess of 24.99% of the
issued and outstanding shares of our common stock. We may in the future seek to
adopt additional measures that will provide some protection against a foreign
person acquiring more than a 25% voting interest. Such could require stockholder
approval and there is no assurance that such approval can be obtained.

|  
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|35
|  

We
will be Dependent on Third Party Suppliers for Helicopter Parts and Components.

Frequent
maintenance will be required for our aircraft, and maintenance costs will likely
comprise a significant portion of our operating costs. Failure or significant
delay by potential vendors in providing necessary parts could, in the absence of
alternative sources of supply, have a material adverse effect on our operations.
If we are dependent on a small number of suppliers for helicopter parts, we may
also be subject to adverse impacts from unusually high price increases which are
greater than overall inflationary trends.

Our
Common Stock May be Affected by Limited Trading Volume and May Fluctuate Significantly.

There
can be no assurance that an active trading market for our common stock will
develop. An absence of an active trading market could adversely affect our
shareholders ability to sell our common stock in short time periods, or
possibly at all. Our common stock may experience in the future significant price
and volume fluctuations that could adversely affect the market price of our
common stock without regard to our operating performance. In addition, we
believe that factors such as quarterly fluctuations in our financial results and
changes in the overall economy or the condition of the financial markets could
cause the price of our common stock to fluctuate substantially.

Our
Common Stock is Deemed to be Penny Stock, which May Make it More
Difficult for Investors to Sell their Shares due to Suitability Requirements.

Our
common stock is deemed to be penny stock as that term is defined in
Rule 3a51-1 promulgated under the Securities Exchange Act of 1934. These
requirements may reduce the potential market for our common stock by reducing
the number of potential investors. This may make it more difficult for investors
in our common stock to sell shares to third parties or to otherwise dispose of
them. This could cause our stock price to decline. Penny stocks are stock:

| |  | With a price of less than $5.00 per
share;
| | - | ------------------------------------------

| |  | That are not traded on a
recognized national exchange;
| | - | --------------------------------------------------------

| |  | Whose prices are not quoted on the NASDAQ
automated quotation system (NASDAQ listed stock must still have a price of not less than $5.00 per share);
or
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | In issuers with net tangible assets less
than $2.0 million (if the issuer has been in continuous operation for at least three years) or $5.0 million
(if in continuous operation for less than three years), or with average revenues of less than $6.0 million for
the last three years.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Broker/dealers
dealing in penny stocks are required to provide potential investors with a
document disclosing the risks of penny stocks. Moreover, broker/dealers are
required to determine whether an investment in a penny stock is a suitable
investment for a prospective investor.

|  
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|36
|  

RISKS RELATED TO
CORNELL CAPITAL FINANCING

We are party to certain
agreements with Cornell Capital relating to the issuance of approximately $7.52 million in convertible
debentures and the sale of up to $11.0 million worth of our common stock pursuant to the SEDA (as defined
below). Investors should be aware that there are certain risks and uncertainties associated with such
agreements. In addition, while the Company entered into the SEDA in August, 2004, in light of the successful
financings that the Company has closed in the past 12 months, it does not currently intend to file a
registration statement to register the shares issuable under the SEDA. The decision in this regard is
anticipated by the end of 2006. Investors should take this into account when considering the following risk
factors.

The Convertible Debentures
and the SEDA Contain Certain Covenants Prohibiting Us from Raising Capital at Less than the Market Price or
Pledging Assets to Other Lenders.

In addition to the Convertible
Debentures, the Company has entered into a Standby Equity Distribution Agreement with Cornell Capital on
August 4, 2004, which was amended and restated on April 8, 2005 (the SEDA). The SEDA and
Convertible Debenture contain covenants that restrict the following activities:

| |  | Raising capital from the sale of stock or
other securities convertible into stock at a price less than the market price of U.S. Helicopters common
stock on the date of issuance; or
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Granting a security interest in U.S.
Helicopters assets, which security interest may be needed in order to obtain borrowings or capital from
a lender, except that the secured party is obligated to subordinate the priority of its security interest
under certain circumstances.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The
existence of these covenants may severely limit U.S. Helicopters ability
to borrow money or raise capital from the sale of stock or convertible
securities because any potential lender will likely require collateral in the
form of a security interest on U.S. Helicopters assets to secure a loan
and purchasers of our stock or convertible securities may want to pay a discount
to the market price of our stock.

Cornell
Capital Could Acquire a Significant Amount of Our Common Stock and, if it Does
So, Could Exercise Significant Influence Over Us.

Cornell
Capital currently owns 1,674,936 shares of common stock and, based upon the
conversion rights under the March 2006 Convertible Debenture, could acquire up
to 18.2% of our common stock based on a conversion price of $1.45 per share, or
an estimated 22.9% if the conversion price is assumed to be $1.00 per share. The
acquisition of such interest would be dependent upon the occurrence of an event
of default under the Convertible Debentures and a waiver of Cornell
Capitals restriction on owning more than 4.9% of our issued and
outstanding common stock. If Cornell Capital acquired such 18.2%-22.9% of our
common stock, it could exercise significant influence over the election of
directors, determination of policies, appointing the persons constituting
management, and determining the outcome of corporate actions requiring
stockholder approval, including mergers, consolidations, and the sale of all or
substantially all of our assets. The interests of Cornell Capital may differ
from the interests of other stockholders.

There
may be No Remaining Proceeds for Stockholders in the Event of Our Dissolution.

In
the event of our dissolution, the proceeds from the liquidation of our assets,
if any, will be first used to satisfy the claims of creditors. Only after all
outstanding debts are satisfied will the remaining proceeds, if any, be
distributed to our stockholders. Accordingly, the ability of any investor to
recover all or any portion of an investment in our securities under such
circumstances will depend on the amount of funds so realized and claims to be
satisfied therefrom.

If
We Default under the Convertible Debentures, Cornell Capital may Convert All
Amounts Due into Shares of Our Common Stock.

Cornell
Capital is restricted from converting more than 10% of all amounts due and owing
under the Convertible Debentures issued in April 2005 (in the total remaining
principal amount of approximately $100,000) and August 2005 (in the total
remaining principal amount of approximately $15,000) into shares of our common
stock. In addition, Cornell Capital is restricted from converting more than 4.9%
of all amounts due and owing under the Convertible Debenture issued in March,
2006 (in the principal amount of $6,000,000) into shares of our common stock. In
the event of a default under the terms of the Convertible Debentures, however,
Cornell Capital may convert all amounts due and owing thereunder without regard
to such restrictions and may sell or transfer any such shares without any
contractual restriction whatsoever. The issuance of shares pursuant to the
Convertible Debentures under such circumstances and the subsequent sale could
lower the market price of our common stock.

|  
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|37
|  

Existing
Shareholders will Experience Significant Dilution from our Sale of Shares under
the Standby Equity Distribution Agreement.

The
sale of shares pursuant to the Standby Equity Distribution Agreement will have a
dilutive impact on our stockholders. As a result, our net income per share could
decrease in future periods, and the market price of our common stock could
decline. In addition, the lower our stock price is, the more shares of common
stock we will have to issue under the SEDA to draw down the full amount. If our
stock price is lower, then our existing stockholders would experience greater
dilution. We are obligated to file a registration statement for the shares
issuable pursuant to the SEDA.

The
Investor under the SEDA Will Pay One Percent Less than the Then-Prevailing
Market Price of our Common Stock.

The
common stock to be issued under the SEDA will be issued at a 1% discount to the
volume weighted average price for the 5 days immediately following the notice
date of an advance. These discounted sales could cause the price of our common
stock to decline.

The
Sale of our Stock under our SEDA Could Encourage Short Sales by Third Parties,
which could Contribute to the Future Decline of our Stock Price.

The
significant downward pressure on the price of our common stock caused by the
sale of material amounts of common stock under the SEDA could encourage short
sales by third parties. In a short sale, a prospective seller borrows stock from
a shareholder or broker and sells the borrowed stock. The prospective seller
hopes that the stock price will decline, at which time the seller can purchase
shares at a lower price to repay the lender. The seller profits when the stock
price declines because it is purchasing shares at a price lower than the sale
price of the borrowed stock. Such sales could place further downward pressure on
the price of our common stock by increasing the number of shares being sold.

Restrictions
Under the Convertible Debentures and the SEDA Could Significantly Limit Our
Ability to Access Funds Under the SEDA.

We
are prohibited from issuing shares to Cornell Capital upon conversion of the
Convertible Debenture issued in March, 2006 which would result in Cornell
Capital holding in excess of 4.9% of our common stock, or pursuant to the SEDA
and the April 2005 and August 2005 Debentures which would result in Cornell
Capital holding in excess of 9.9% and 9.99%, respectively, of our issued and
outstanding common stock. Pursuant to the terms of the Convertible Debentures,
this restriction may only be waived by Cornell Capital either in its sole
discretion with 60 days notice or without notice upon an event of default.
This restriction may significantly limit and delay our ability to access funds
under the SEDA and, accordingly, may affect our ability to implement our
business plan.

|  
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|38
|  

ITEM 3.  CONTROLS
AND PROCEDURES

The
Companys Chief Executive Officer and Chief Financial Officer have
evaluated the effectiveness of the Companys disclosure controls and
procedures as of March 31, 2006. Based on that evaluation, the Chief Executive
Officer and Chief Financial Officer have concluded that disclosure controls and
procedures are effective to ensure that information required to be disclosed by
the Company in reports that the Company file or submit under the Securities
Exchange Act of 1934 is recorded, processed, summarized and reported within the
time periods specified in SEC rules and forms. No changes in the Companys
internal control over financial reporting that have materially affected, or are
reasonably likely to materially affect, its internal control over financial
reporting, including any corrective actions with regard to significant
deficiencies and material weaknesses, occurred during the first quarter of
fiscal 2006 or subsequent to the date of the evaluation by its management
thereof.

PART IIOTHER
INFORMATION

ITEM 1.  LEGAL
PROCEEDINGS

None.

ITEM 2. UNREGISTERED SALES OF
SECURITIES AND USE OF PROCEEDS; USE OF PROCEEDS FROM REGISTERED SECURITIES

In April, 2006, we entered into
a Consulting Agreement dated March 1, 2006 with IGAS Enterprises, LLC (IGAS). In consideration for
the consulting services rendered to us during the 24-month term of the agreement, we agreed to issue 200,000
shares of our common stock to IGAS. We have filed a registration statement including these shares with the
Securities and Exchange Commission on May 12, 2006.

On February 8, 2006, we entered
into a one-year Lease Agreement with Three Wing Flying Service, Inc. (Three Wing) for lease of
office and hangar space at Sikorsky Memorial Airport in Stratford, Connecticut. The agreement provides for
monthly payments of $6,334 for the month of February 2006, $10,268 for the months of March and April, 2006,
$13,800 for the months of May through July 2006 and $16,000 per month for the balance of the lease. In
connection with this lease, we agreed to issue 20,000 shares of our common stock to Three Wing. We have filed
a registration statement including these shares with the Securities and Exchange Commission on May 12,
2006.

In February 2006, we issued a
convertible note (the Elbaz Note) in the amount of $494,505 to Mr. Elbaz in exchange for 494,505
shares of our common stock held by Mr. Elbaz. Mr. Elbaz had previously acquired such shares in a private
transaction with Cornell Capital. The Elbaz Note bears interest at 10% per annum and is repayable on February
23, 2007 and may be extended to February 23, 2008. The Elbaz Note is convertible into shares of our common
stock at the lesser of $1.00 per share or 100% of the fair market value of our common stock for the ten
trading days prior to the conversion date, provided that the conversion price shall not be less than $0.50 per
share. We have filed a registration statement with the Securities and Exchange Commission on May 12, 2006 that
includes up to 1,186,812 shares of our common stock issuable upon conversion of the Elbaz Note.

All
other unregistered equity securities sold during the quarter ended March 31,
2006 have previously been reported in a Current Report on Form 8-K.

ITEM 3.  DEFAULTS
UPON SENIOR SECURITIES

None.

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

None.

|  
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|39
|  

ITEM 5. OTHER
INFORMATION

(a)  Aircraft Lease

On May 10, 2006, we entered into
an Aircraft Specific Lease Agreement with an unrelated third party (Lessor) dated April 26, 2006
(the Aircraft Lease), pursuant to which we took delivery on May 15, 2006 of a Sikorsky S76B Aircraft
(S76B), in accordance with the terms and conditions of the Aircraft Lease and a General Terms
Agreement entered into between Lessor and us on December 19, 2005 (the General Terms Agreement).
The term of the Aircraft Lease shall commence on the date the S76B is delivered (which is anticipated to be
May 12, 2006) and shall terminate May 5, 2011 or when the S76B is returned to Lessor, whichever is later. At
the time of entering into the Aircraft Lease, we paid Lessor the rental payment and a deposit as defined in
the Aircraft Lease. Lessor has agreed to make all necessary arrangements to obtain a certificate of
airworthiness to allow us to operate the S76B under U.S. FAA Part 135. To date, we have leased a total of
three aircraft from Lessor pursuant to the General Terms Agreement and three aircraft lease
agreements.

We have agreed to redeliver the
S76B at the end of the Term in accordance with certain redelivery conditions set forth in the Aircraft Lease
and the General Terms Agreement. We have also agreed to enter into a Technical Support Agreement with a party
affiliated with the Lessor for technical maintenance and support of the S76B.

(b) Technical Support
Agreement

On May 10, 2006, we also entered
into a Technical Support Agreement Amendment (Support Agreement Amendment) with a party affiliated
with Lessor (the Other Party) pursuant to which the Other Party has agreed to provide us with
exchange components as described in the agreement, spare parts, and technical support for the S76B. The
Support Agreement Amendment amends the Technical Support Agreement (the Support Agreement) entered
into between the Other Party and us dated December 1, 2005 to add the additional aircraft leased by us from
the Lessor. The term of the Support Agreement is from December 1, 2005 until December 1, 2010. After the
expiration of the five year term, the Support Agreement may be renewed for periods of one year.

ITEM 6. EXHIBITS AND REPORTS ON FORM
8-K

(a) The following Exhibits are filed as part of this
Report or incorporated herein by reference:

|Exhibit No. |  | Document Description                                                                                                            |  | Location
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------- |  | --------
|           
|3.1         |  | Certificate of Incorporation                                                                                                    |  | (1)     
|           
|3.2         |  | Certificate of Amendment to Certificate of Incorporation                                                                        |  | (1)     
|           
|3.3         |  | Certificate of Designation                                                                                                      |  | (1)     
|           
|3.4         |  | Amended & Restated Bylaws                                                                                                       |  | (2)     
|           
|4.1         |  | Specimen of Common Stock Certificate                                                                                            |  | (1)     
|           
|4.2         |  | Specimen of Series A Preferred Stock Certificate                                                                                |  | (1)     
|           
|4.3         |  | Form of Common Stock Purchase Warrant                                                                                           |  | (1)     
|           
|4.4         |  | Form of Common Stock Purchase Warrant                                                                                           |  | (1)     
|           
|10.1        |  | Amended and Restated Standby Equity Distribution Agreement between U.S. Helicopter Corporation and Cornell Capital Partners, LP |  | (1)     
|           
|10.2        |  | Registration Rights Agreement between U.S. Helicopter Corporation and Cornell Capital Partners, LP                              |  | (1)     
|           
|10.3        |  | Escrow Agreement between U.S. Helicopter Corporation and Butler, Gonzalez, LLP                                                  |  | (1)     

|  
|--
|40
|  

|10.4  |  | Placement Agent Agreement between U.S. Helicopter Corporation and Newbridge Securities Corporation           |  | (1)
|----- |  | ------------------------------------------------------------------------------------------------------------ |  | ---
|     
|10.5  |  | Securities Purchase Agreement between U.S. Helicopter Corporation and Cornell Capital Partners, LP           |  | (1)
|     
|10.6  |  | 5% Secured Convertible Debenture in the principal amount of $1,000,000                                       |  | (1)
|     
|10.7  |  | Amended and Restated Security Agreement between U.S. Helicopter Corporation and Cornell Capital Partners, LP |  | (6)
|     
|10.8  |  | Investor Registration Rights Agreement between U.S. Helicopter Corporation and Cornell Capital Partners, LP  |  | (1)
|     
|10.9  |  | Escrow Agreement between U.S. Helicopter Corporation and Butler, Gonzalez, LLP                               |  | (1)
|     
|10.10 |  | Lock-Up Agreement between U.S. Helicopter Corporation and John G. Murphy                                     |  | (1)
|     
|10.11 |  | Lock-Up Agreement between U.S. Helicopter Corporation and Gabriel Roberts                                    |  | (1)
|     
|10.12 |  | Lock-Up Agreement between U.S. Helicopter Corporation and Rue Reynolds                                       |  | (1)
|     
|10.13 |  | Lock-Up Agreement between U.S. Helicopter Corporation and Clinton L. Pagano                                  |  | (1)
|     
|10.14 |  | Lock-Up Agreement between U.S. Helicopter Corporation and George J. Mehm, Jr.                                |  | (1)
|     
|10.15 |  | Lock-Up Agreement between U.S. Helicopter Corporation and Donal McSullivan                                   |  | (1)
|     
|10.16 |  | Stock Subscription Agreement between U.S. Helicopter Corporation and John G. Murphy                          |  | (1)
|     
|10.17 |  | Stock Subscription Agreement between U.S. Helicopter Corporation and Gabriel Roberts                         |  | (1)
|     
|10.18 |  | Stock Subscription Agreement between U.S. Helicopter Corporation and Rue Reynolds                            |  | (1)
|     
|10.19 |  | Stock Subscription Agreement between U.S. Helicopter Corporation and John Capozzi                            |  | (1)
|     
|10.20 |  | Stock Subscription Agreement between U.S. Helicopter Corporation and Donal McSullivan                        |  | (1)
|     
|10.21 |  | Stock Subscription Agreement between U.S. Helicopter Corporation and George J. Mehm, Jr.                     |  | (1)
|     
|10.22 |  | Stock Subscription Agreement between U.S. Helicopter Corporation and Gallagher, Briody & Butler              |  | (1)
|     
|10.23 |  | Stock Subscription Agreement between U.S. Helicopter Corporation and Clinton L. Pagano                       |  | (1)
|     
|10.24 |  | Stock Subscription Agreement between U.S. Helicopter Corporation and 3B Group, Inc.                          |  | (1)
|     
|10.25 |  | Employment Agreement between U.S. Helicopter Corporation and John G. Murphy                                  |  | (3)

|  
|--
|41
|  

|10.26 |  | Employment Agreement between U.S. Helicopter Corporation and George J. Mehm, Jr.                                                                       |  | (3)
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---
|     
|10.27 |  | Employment Agreement between U.S. Helicopter Corporation and Donal McSullivan                                                                          |  | (3)
|     
|10.28 |  | Employment Agreement between U.S. Helicopter Corporation and Gabriel Roberts                                                                           |  | (3)
|     
|10.29 |  | Employment Agreement between U.S. Helicopter Corporation and Terence O. Dennison                                                                       |  | (1)
|     
|10.30 |  | Employment Agreement between U.S. Helicopter Corporation and Sandy Goldstein                                                                           |  | (1)
|     
|10.31 |  | Consulting Agreement between U.S. Helicopter Corporation and Phoenix Ventures, LLC                                                                     |  | (1)
|     
|10.32 |  | Marketing Services Agreement among U.S. Helicopter Corporation, JMC Marketing Services LLC and Donal McSullivan                                        |  | (1)
|     
|10.33 |  | Lease between U.S. Helicopter Corporation and City of Bridgeport, Connecticut                                                                          |  | (1)
|     
|10.34 |  | Agreement between U.S. Helicopter Corporation and the Port Authority of New York and New Jersey                                                        |  | (1)
|     
|10.35 |  | U.S. Helicopter Corporation Stockholders Agreement                                                                                                     |  | (1)
|     
|10.36 |  | U.S. Helicopter Corporation 2004 Stock Incentive Plan                                                                                                  |  | (1)
|     
|10.37 |  | Placement Agent Agreement between U.S. Helicopter Corporation and North Coast Securities Corporation                                                   |  | (1)
|     
|10.38 |  | Employment Agreement between U.S. Helicopter Corporation and John W. Galligan                                                                          |  | (1)
|     
|10.39 |  | Financial Advisory and Investment Banking Agreement between U.S. Helicopter Corporation and North Coast Securities Corporation                         |  | (1)
|     
|10.40 |  | Securities Purchase Agreement dated August 23, 2005 between U.S. Helicopter Corporation and Cornell Capital Partners, LP                               |  | (4)
|     
|10.41 |  | 5% Secured Convertible Debenture in the Principal Amount of $220,000                                                                                   |  | (4)
|     
|10.42 |  | Investor Registration Rights Agreement dated August 23, 2005 between U.S. Helicopter Corporation and Cornell Capital Partners, LP                      |  | (4)
|     
|10.43 |  | Escrow Agreement between U.S. Helicopter Corporation and David Gonzalez, Esq.                                                                          |  | (4)
|     
|10.44 |  | Letter Amendment to Investor Registration Rights Agreement between U.S. Helicopter Corporation and Cornell Capital Partners, LP                        |  | (5)
|     
|10.45 |  | Helicopter Lease Agreement dated as of November 1, 2005 (Portions of this exhibit have been omitted pursuant to a request for confidential treatment.) |  | (2)
|     
|10.46 |  | Employment Agreement between U.S. Helicopter Corporation and John Fagan dated September 16, 2005                                                       |  | (2)
|     
|10.47 |  | Convertible Note Purchase Agreement dated October 26, 2005 between U.S. Helicopter Corporation and Portfolio Lenders II, LLC                           |  | (2)
|     
|10.48 |  | Convertible Promissory Note in the amount of $250,000 dated October 26, 2005 payable to Portfolio Lenders II, LLC                                      |  | (2)

|  
|--
|42
|  

|10.49 |  | Warrant to Purchase up to 100,000 shares of Common Stock issued to Portfolio Lenders II, LLC                                                                             |  | (2)
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---
|     
|10.50 |  | Common Stock Purchase Agreement dated October 26, 2005 between U.S. Helicopter Corporation and International Financial Advisors, K.S.C. (exhibits and schedules omitted) |  | (2)
|     
|10.51 |  | Warrant to Purchase up to 750,000 shares of Common Stock issued to International Financial Advisors, K.S.C.                                                              |  | (2)
|     
|10.52 |  | Common Stock Purchase Agreement dated October 26, 2005 between U.S. Helicopter Corporation and Ahmad Abdulwahab Al-Nakib (exhibits and schedules omitted)                |  | (2)
|     
|10.53 |  | Common Stock Purchase Agreement dated October 26, 2005 between U.S. Helicopter Corporation and Abdulwahab A. Al-Nakib (exhibits and schedules omitted)                   |  | (2)
|     
|10.54 |  | Common Stock Purchase Agreement dated October 26, 2005 between U.S. Helicopter Corporation and Peter Londa (exhibits and schedules omitted)                              |  | (2)
|     
|10.55 |  | Common Stock Purchase Agreement dated October 26, 2005 between U.S. Helicopter Corporation and Khaled Magdy El-Marsafy (exhibits and schedules omitted)                  |  | (2)
|     
|10.56 |  | Common Stock Purchase Agreement dated October 26, 2005 between U.S. Helicopter Corporation and Samama Global Corporation (exhibits and schedules omitted)                |  | (2)
|     
|10.57 |  | Securities Purchase Agreement dated March 31, 2006 between U.S. Helicopter Corporation and Cornell Capital Partners, LP (exhibits and schedules omitted)                 |  | (6)
|     
|10.58 |  | 8% Secured Convertible Debenture in the Principal Amount of $6,000,000                                                                                                   |  | (6)
|     
|10.59 |  | Investor Registration Rights Agreement dated March 31, 2006 between U.S. Helicopter Corporation and Cornell Capital Partners, LP                                         |  | (6)
|     
|10.60 |  | Lock-Up Agreement dated March 31, 2006 between U.S. Helicopter Corporation and Donal McSullivan                                                                          |  | (6)
|     
|10.61 |  | Lock-Up Agreement dated March 31, 2006 between U.S. Helicopter Corporation and Terence O. Dennison                                                                       |  | (6)
|     
|10.62 |  | Lock-Up Agreement dated March 31, 2006 between U.S. Helicopter Corporation and John G. Murphy                                                                            |  | (6)
|     
|10.63 |  | Lock-Up Agreement dated March 31, 2006 between U.S. Helicopter Corporation and George J. Mehm, Jr.                                                                       |  | (6)
|     
|10.64 |  | Lock-Up Agreement dated March 31, 2006 between U.S. Helicopter Corporation and Gabriel S. Roberts                                                                        |  | (6)
|     
|10.65 |  | Warrant CCP-01 to Purchase up to 1,250,000 shares of Common Stock issued to Cornell Capital Partners, LP                                                                 |  | (6)
|     
|10.66 |  | Warrant CCP-02 to Purchase up to 1,250,000 shares of Common Stock issued to Cornell Capital Partners, LP                                                                 |  | (6)

|  
|--
|43
|  

|10.67 |  | Warrant CCP-03 to Purchase up to 1,250,000 shares of Common Stock issued to
Cornell Capital Partners, LP                                                 |  | (6)
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---
|     
|10.68 |  | Warrant CCP-04 to Purchase up to 1,250,000 shares of Common Stock issued to Cornell Capital
Partners, LP                                                 |  | (6)
|     
|10.69 |  | Warrant CCP-05 to Purchase up to 150,000 shares of Common Stock issued to Cornell Capital
Partners, LP                                                   |  | (6)
|     
|10.70 |  | Consulting Agreement dated as of March 1, 2006 between U.S. Helicopter Corporation and IGAS
Enterprises, LLC                                             |  | (6)
|     
|10.71 |  | Financial Advisory and Investment Banking Agreement dated as of April 1, 2006 between U.S.
Helicopter Corporation and North Coast Securities Corporation |  | (6)
|     
|10.72 |  | Form of Restricted Stock Award                                                                                                                           |  | (6)
|     
|31.1  |  | Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley Act of
2002+                                                          |  |    
|     
|31.2  |  | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002+                                                      |  |    
|     
|32.1  |  | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002+       |  |    
|     
|32.2  |  | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002+       |  |    

|+ | Exhibit
filed herewith.
|- | -----------------------

|(1) | Incorporated
herein by reference to U.S. Helicopters Registration Statement on Form SB-2 dated April
22,  2005.
|--- | ----------------------------------------------------------------------------------------------------------------

|(2) | Incorporated
herein by reference to U.S. Helicopters Quarterly Report on Form 10-QSB for the quarter
ended  September 30, 2005.
|--- | --------------------------------------------------------------------------------------------------------------------------------

|(3) | Incorporated
herein by reference to U.S. Helicopters Amendment No. 1 to Registration Statement on
Form SB-2  dated June 27, 2005.
|--- | ----------------------------------------------------------------------------------------------------------------------------------

|(4) | Incorporated
herein by reference to U.S. Helicopters Amendment No. 4 to Registration Statement on
Form SB-2  dated August 31, 2005.
|--- | ------------------------------------------------------------------------------------------------------------------------------------

|(5) | Incorporated
herein by reference to U.S. Helicopters Amendment No. 5 to Registration Statement on
Form SB-2  dated September 2, 2005.
|--- | --------------------------------------------------------------------------------------------------------------------------------------

|(6) | Incorporated
herein by reference to U.S. Helicopters Registration Statement on Form SB-2 dated May
12, 2006.
|--- | -------------------------------------------------------------------------------------------------------------

(b) Reports on Form 8-K.
During the quarter ended March 31, 2006, the Company filed the following Reports
on Form 8-K:

On
February 13, 2006, the Company filed a Report on Form 8-K regarding the
appointment of George A. Fechter and Edward J. Sherman to the Companys
Board of Directors.

On
February 23, 2006, the Company filed a Report on Form 8-K regarding the entry
into an aircraft lease agreement with an unrelated third party lessor and the
entry into a technical support agreement with a party affiliated with such
lessor.

|  
|--
|44
|  

SIGNATURES

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

|                   | U.S. HELICOPTER CORPORATION                                                                                          
|------------------ | ---------------------------------------------------------------------------------------------------------------------
|Date: May 15, 2006 | BY:                                                                                                                  
|                   | John G. MurphyChief Executive Officer and
     President(Principal Executive Officer)                                
|                  
|                   | BY:                                                                                                                  
|                   | George J. Mehm, Jr.Chief Financial Officer
     and Senior Vice President(Principal Financial and Accounting Officer)

|  
|--
|45
|