UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549 
 FORM 10-QSB/A(Amendment No. 1) 
 (Mark One)|X|
     QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
 For the Quarterly Period ended March 31, 2007 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 
 U.S. HELICOPTER CORPORATION
 (Name of Small Business Issuer in Its Charter)
 
 DELAWARE(State or Other Jurisdiction ofIncorporation or Organization)
     27-0096927(I.R.S. EmployerIdentification 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) 
 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 June 1, 2007, 35,641,882 shares of common stock. Transitional Small Business Disclosure Format (check one):   Yes o   No þ  
 U.S. HELICOPTER CORPORATIONFORM 10-QSBFOR THE PERIOD ENDED MARCH 31, 2007 INDEX PAGEPART 1FINANCIAL INFORMATIONITEM 1.
     FINANCIAL
STATEMENTSBalance
Sheet (Unaudited)
     1Statements
of Operations (Unaudited)
     3Statements
of Stockholders Equity (Unaudited)
     4Statements
of Cash Flows (Unaudited)
     5Notes to
Financial Statements (Unaudited)
     6ITEM
2.
     MANAGEMENTS
DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
     21ITEM
3.
     CONTROLS
AND PROCEDURES
     39PART IIOTHER INFORMATIONITEM 5.
     OTHER INFORMATION
     39ITEM 6.
     EXHIBITS AND REPORTS ON FORM 8-K
     39
  
 PART I - FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTS U.S. HELICOPTER CORPORATION BALANCE SHEET AS OF MARCH 31,
2007
 Assets:Current Assets:Cash
     $
     1,012,206Restricted Cash
     
     180,539Accounts Receivable
     
     73,484Inventory
     
     41,993Prepaid Expenses
     
     233,801Other Current Assets
     
     341,558Total Current Assets
     
     1,883,581Property and Equipment:Leasehold Improvements
     
     1,230,002Office Equipment
     
     150,376Less: Accumulated Depreciation
     
     (360,762
     )Property and Equipment  Net
     
     1,019,616Other Assets:Deferred
Financing Costs, Net of Accumulated Amortizationof $281,674
     
     1,427,234Deferred Offering Costs
     
     220,806Deposits
     
     893,506Total Other Assets
     
     2,541,546Total Assets
     $
     5,444,743
 The Accompanying Notes Are An Integral Part of These
Financial Statements.  
 U.S.
HELICOPTER CORPORATION
 BALANCE
SHEET AS OF MARCH 31, 2007
 Liabilities and Stockholders [Deficit]:Current Liabilities:Accounts Payable and Accrued Expenses
     
     
     $
     2,620,526Note Payable
     
     
     
     1,100,000Current Maturities of Long-Term Debt
     
     
     
     494,505Deferred Salary and Taxes Payable
     
     
     
     10,121Accrued Salary and Taxes Payable
     
     
     
     148,521Air Traffic Liability
     
     
     
     119,9814,493,654Total Current LiabilitiesLong-Term Debt - Net of Discount of $2,841,401
     
     
     
     5,808,599Long-Term Derivative Liability
     
     
     
     233,276Deferred Charges
     
     
     
     468,930Total Liabilities
     
     
     
     11,004,459Commitments and Contingencies
     
     
     
     Stockholders [Deficit]:Convertible Series A Preferred Stock, $0.001 Par Value; 1,500,000Shares Authorized; 47,000 Shares Issued and Outstanding
     
     
     
     47Common Stock, $0.001 Par Value; 95,000,000 Shares Authorized;35,524,931 Issued and Outstanding
     
     
     
     35,525Additional Paid In Capital
     
     
     
     11,631,301Deferred Equity Compensation
     
     
     
     (633,293
     )Accumulated Deficit
     
     
     
     (16,593,296
     )Total Stockholders [Deficit]
     
     
     
     (5,559,716
     )Total Liabilities and Stockholders [Deficit]
     
     
     $
     5,444,743
 The Accompanying Notes Are An Integral Part of These
Financial Statements.  
 U.S. HELICOPTER CORPORATION
 STATEMENTS OF OPERATIONS
 Three Months endedMarch 31,2007
     
     2006Revenues
     $
     296,726
     
     $
     13,876Expenses:Payroll
     
     975,021
     
     
     356,643Payroll Taxes and Benefits
     
     146,442
     
     
     54,157Crew Costs and Other
     
     177,510
     
     
     27,981Substitute Service/Interrupted Passenger
     
     867
     
     
     Maintenance
     
     342,999
     
     
     75,579Fuel
     
     122,518
     
     
     34,295Aircraft and Traffic Servicing
     
     153,195
     
     
     10,758Other Taxes
     
     3,846
     
     
     650Professional Fees
     
     383,357
     
     
     227,464Insurance
     
     213,580
     
     
     67,200Office Expense
     
     60,009
     
     
     31,811Website and Website Design
     
     4,930
     
     
     7,638Travel
     
     11,012
     
     
     21,525Rent
     
     131,241
     
     
     35,280Lease Expense - equipment
     
     474,773
     
     
     240,361Reservation Expense
     
     61,061
     
     
     45,739Advertising
     
     292,918
     
     
     448,426Licenses and Fees
     
     5,465
     
     
     5,185Depreciation and Amortization
     
     110,227
     
     
     12,861Total Expenses
     
     3,670,971
     
     
     1,703,553Operating (Loss)
     
     (3,374,245
     )
     
     (1,689,677
     )Other Income (Expense):Interest Income
     
     11,632
     
     
     27,337Interest Expense
     
     (190,888
     )
     
     (21,074
     )Amortization of Deferred Financing Costs
     
     (100,992
     )
     
     (173,438
     )Change in Fair Value of Derivative
     
     23,927
     
     
     (242,745
     )Amortization of Debt Discount
     
     (228,853
     )
     
     (2,079
     )Net Other Income (Expense)
     
     (485,174)
     
     
     (411,999
     )Net (Loss)
     $
     (3,859,419
     )
     $
     (2,101,676
     )Net (Loss) Per Common Share:Basic and Diluted
     $
     (.11
     )
     $
     (.07
     )Weighted Average Number of Shares
     
     35,467,431
     
     
     30,795,784
 The Accompanying Notes Are An Integral Part of These
Financial Statements.  
 U.S. HELICOPTER CORPORATION
 STATEMENTS OF STOCKHOLDERS EQUITY
[DEFICIT]
 Additional
     
     Deferred
     
     AccumulatedPreferred Stock
     
     Common Stock
     
     Paid-in
     
     Equity
     
     DeficitShares
     
     Amount
     
     Shares
     
     Amount
     
     Capital
     
     Compensation
     
     Accumulated
     
     TotalBalance at January 1, 2006
     316,000
     
     316
     
     30,795,723
     
     30,796
     
     6,167,184
     
     
     
     (3,114,117
     )
     3,084,180Conversion of Amir Elbazs stock to convertible note - February 23, 2006
     
     
     
     
     (494,505
     )
     (495
     )
     (494,010
     )
     
     
     
     
     (494,505
     )Conversion of Portfolio
Lenders promissory note - March 26, 2006
     
     
     
     
     500,000
     
     500
     
     249,500
     
     
     
     
     
     250,000Net loss
     
     
     
     
     
     
     
     
     
     
     
     
     (2,101,676
     )
     (2,101,676
     )Balance at March 31, 2006
     316,000
     
     316
     
     30,801,218
     
     30,801
     
     5,922,674
     
     
     
     (5,215,793
     )
     737,998Balance at January 1, 2007
     47,000
     
     47
     
     35,449,931
     
     35,450
     
     11,531,008
     
     (912,449
     )
     (12,733,877
     )
     (2,079,821
     )Amortization of deferred equity compensation
     
     
     
     
     
     
     
     
     
     
     279,156
     
     
     
     279,156Issuance of common stock to IGAS for services
     
     
     
     
     75,000
     
     75
     
     52,425
     
     
     
     
     
     52,500Issuance of options for
payment of services
     
     
     
     
     
     
     
     
     23,934
     
     
     
     
     
     23,934Issuance of options for payment of services
     
     
     
     
     
     
     
     
     23,934
     
     
     
     
     
     23,934Net Loss
     
     
     
     
     
     
     
     
     
     
     
     
     (3,859,419
     )
     (3,859,419
     )Balance at March 31, 2007
     47,000
     
     47
     
     35,524,931
     
     35,525
     
     11,631,301
     
     (633,293
     )
     (16,593,296
     )
     (5,559,716
     )
 The Accompanying Notes Are An Integral Part of These
Financial Statements.  
 U.S. HELICOPTER CORPORATION
 STATEMENTS OF CASH FLOWS
 Quarters ended December 31,2007
   
   2006Operating Activities:Net (Loss)
   $
   (3,859,419
   )
   $
   (2,101,676
   )Adjustments to Reconcile Net (Loss)to Net Cash (Used for) Operating Activities:Depreciation Expense
   
   110,227
   
   
   12,861Amortization of Deferred Financing Costs
   
   100,992
   
   
   173,438Recognition of Deferred Income
   
   (30,169
   )
   
   (15,392)Change in Fair Value of Derivative Liability
   
   (18,478
   )
   
   242,745Amortization of Debt Discount
   
   223,404
   
   
   2,079Amortization of Deferred Equity Compensation
   
   279,156
   
   
   Fees paid for Services  Noncash
   
   100,368
   
   
   Changes in Assets and Liabilities:(Increase) Decrease in:Accounts Receivable
   
   (32,890
   )
   
   (19,739)Prepaid Expenses and Other Current Assets
   
   (40,068
   )
   
   (289,391
   )Restricted Cash
   
   (1,097
   )
   
   (53,022)Increase (Decrease) in:Accounts Payable and Accrued Liabilities
   
   732,922
   
   
   639,226Deposits
   
   (60,467
   )
   
   (471,668
   )Deferred Charges
   
   
   
   
   400,000Net Cash - Operating Activities
   
   (2,495,519
   )
   
   (1,480,539
   )Investing Activities:Acquisition of Property and Equipment
   
   (153,815
   )
   
   (672,648
   )Financing Activities:Proceeds From Long-Term Debt
   
   
   
   
   6,000,000Proceeds From Short-Term Debt
   
   1,100,000
   
   
   Payment of Debt
   
   
   
   
   (1,507,834)Release of Restricted Cash
   
   
   
   
   250,000Payment of Financing Costs
   
   (59,000
   )
   
   (1,020,693
   )Net Cash - Financing Activities
   
   1,041,000
   
   
   3,721,473Net (Decrease) Increase in Cash
   
   (1,608,334
   )
   
   1,568,286Cash - Beginning of Periods
   
   2,620,540
   
   
   4,459,397Cash - End of Periods
   $
   1,012,206
   
   $
   6,027,683Supplemental Disclosures of Cash Flow Information:Cash paid during the periods for:Interest
   $
   2,630
   
   $
   1,586Income 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 10]. The Accompanying Notes Are An Integral Part of These
Financial Statements.  
 U.S. HELICOPTER CORPORATIONNOTES TO FINANCIAL
STATEMENTS (1) Basis of Presentation U.S. Helicopter Corporation (U.S. Helicopter, the Company, we or
us) began flight operations on March 27, 2006 between the Downtown Manhattan Heliport and John F. Kennedy
International Airport (Kennedy). Prior to that date we were a development stage company that devoted most of our
efforts to activities such as financial planning, capital raising, and the development of a business plan. The Companys core
business will be providing regularly scheduled helicopter shuttle service between many of the nations larger metropolitan
airports and surrounding city-based heliports. U.S. Helicopter was incorporated in the State of Delaware on March 4, 2003. We have
introduced, and intend to expand our service, which we call Metro-hop Airport Shuttle Service (MASS), in
the New York City market. When fully implemented, our plan in the New York City-area market is to offer 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 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, 2007 are not necessarily indicative of the results that may be expected for the year
ending December 31, 2007. 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, 2006. (2) Going Concern The accompanying consolidated financial statements have been prepared assuming that we will continue as
a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of
business. We have incurred substantial net operating losses and used substantial amounts of cash in our operating activities.
Since our inception, we have incurred losses, have an accumulated deficit, and have experienced negative cash flows from
operations. The expansion and development of our business will likely require additional capital. This condition raises
substantial doubt about our ability to continue as a going concern. We expect cash flows from operating activities to improve,
primarily as a result of an increase in revenue, although there can be no assurance thereof. The accompanying consolidated
financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern. If
we fail to generate positive cash flows or obtain additional financing when required, we may have to modify, delay or abandon some
or all of our business and expansion plans. Our operating plan seeks to minimize our capital requirements, but expansion of our flight services in
the New York market, and other markets will require additional capital. As of March 31, 2007, we had $1,012,206 in cash. We believe
that additional capital is required to satisfy our cash requirements for the following 12 months with our current cash and
expected revenues from operations. We have recently entered into a number of financing transactions (see Notes 10 and 11 to our
Financial Statements), and we are continuing to seek other financing initiatives and have had, and continue to have, discussions
with a number of potential investors concerning investments in our securities. We are presently working to raise additional capital to meet our working capital needs, for the
repayment of debt and for capital expenditures. During the next twelve months, we anticipate that we will need approximately $4.0
million of working capital (inclusive of capital expenditures), $12.0 million of lease financing, and $1.6 million to repay
debt.  
 U.S. HELICOPTER CORPORATIONNOTES TO FINANCIAL
STATEMENTS  (2) Going Concern
(Continued)  Such capital is expected to come from helicopter lease financing and the sale of equity
or debt securities, which may include the sale of common stock under our existing $11 million SEDA. As of the date of this report,
we are in discussions with financing sources for helicopter operating lease financing on one helicopter. We believe that if we
complete this helicopter lease financing and raise the remaining approximately $13.1 million through $8 million of operating lease
financing and $5.1 million of some combination of debt, equity or SEDA draws, we would have sufficient funds to meet our needs for
working capital, repayment of debt and for capital improvements over the next 12 months. There can be no assurances, however, that
we will be able to complete such financings on terms favorable to us or at all. (3) Summary of Significant Accounting Policies Use of Estimates  The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of
the financial statements, as well as reported amounts of revenues and expenses during the reporting period. Actual results could
differ from those estimates. 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, 2007 we had approximately $152,650, in deposits subjected to such risk. We have not
experienced any losses on our deposits of cash and cash equivalents. We generally do not require collateral related to our financial instruments. Concentrations of credit risk with respect to trade accounts receivable are limited due to the fact
that most customers pay for the flights in advance of the flights. The allowance for doubtful accounts as of March 31, 2007 was
$0. We routinely assess the financial strength of customers and, based upon factors concerning credit risk, we establish an
allowance for doubtful accounts. Management believes that accounts receivable credit risk exposure beyond such allowance is
limited. Fair Value of Financial Instruments  Statement of Financial Accounting Standards
(SFAS) No. 107, Disclosure about Fair Value of Financial Instruments, require the disclosure of fair
values for all financial statements, both on- and off-balance-sheet, for which it is practicable to estimate fair value. We
estimate that there are no material variations between fair value and book value of our financial assets or liabilities as of
March 31, 2007. 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, 2007. Restricted Cash - We had restricted cash of $180,539 at March 31, 2007. Our restricted
cash at March 31, 2007 related to a cash deposit securing a letter of credit we were required to post. Property and Equipment  We record our property and equipment at cost less
accumulated depreciation. For financial reporting purposes, we use the straight-line method to compute depreciation based upon
estimated useful lives of two to five years for flight equipment and one to seven years for other equipment. Leasehold
improvements are amortized over the shorter of the related lease term or the estimated life of the improvements. Equipment under
capital leases are amortized over the lease term and such amortization is included in the depreciation of property and  
 U.S. HELICOPTER CORPORATIONNOTES TO FINANCIAL
STATEMENTS (3) Summary of Significant Accounting Policies (Continued) equipment. Upon selling or otherwise disposing of property and equipment, we remove cost and
accumulated depreciation from the accounts and reflect any resulting gain or loss in earnings. Depreciation and amortization
totaled $110,227 and $12,861 for the three months ended March 31 2007 and 2006, respectively. Impairment of Long-Lived Assets We review our long-lived assets and identifiable
intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be
recoverable. When such factors and circumstances exist, we compare the projected undiscounted future cash flows associated with
the future use and disposal of the related asset or group of assets to their respective carrying amounts. Impairment, if any, is
measured as the excess of the carrying amount over the 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. 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. Revenue Recognition  We recognize revenue when transportation has been provided,
including scheduled passenger and charter services. We had revenue for the three months ended March 31, 2007 and March 31, 2006 as follows: 2007
     
     2006Scheduled Passenger
     $
     179,964
     
     13,876Charter
     
     111,873
     
     Miscellaneous
     
     4,889
     
     Total
     $
     296,726
     
     13,876
 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. Recent Accounting Pronouncements  In December 2006, the Financial Accounting
Standards Board (FASB) issued FASB Staff Position EITF 00-19-2 (FSP ETF 00-19-2) that addresses an
issuers accounting for registration payment arrangements. EITF 00-19-2 specifies that the contingent obligation to make
future payments or otherwise transfer consideration under a registration payment arrangement, whether issued as a separate
agreement or included as a provision of a financial instrument or other agreement, should be separately recognized and measured in
accordance with FASB Statement No. 5, Accounting for Contingencies. The guidance in EITF 00-19-2 amends FASB
Statements No. 133, Accounting for Derivative Instruments and Hedging Activities, No. 150, Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and Equity, and FASB Interpretation No. 45, Guarantors
Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, to include
scope exceptions for registration payment arrangements. This pronouncement further clarifies that a financial instrument subject
to a registration payment arrangement should be accounted for in accordance with other applicable generally accepted accounting
principles (GAAP) without regard to the contingent obligation to transfer consideration pursuant to the registration payment
arrangement. Under FSP 00-19-2, the contingent obligation to make future payments or otherwise transfer consideration under a
registration payment arrangement shall be recognized and measured separately in accordance with Statement 5 and FASB
Interpretation No. 14, Reasonable Estimation of the Amount of a Loss. FSP EITF 00-19-2 is effective immediately for
registration payment arrangements entered into after December 21, 2006 and for financial statements issued for fiscal years
beginning after December 15, 2006, and interim periods within those fiscal years. Adoption of this standard on January 1, 2007, did not have a material effect on our financial position, operations, or cash flows.  
 U.S. HELICOPTER CORPORATIONNOTES TO FINANCIAL STATEMENTS (3) Summary of Significant Accounting Policies (Continued) In September 2006, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 108,
Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial
Statements (SAB 108), which provides interpretive guidance on the consideration of the effects of prior year
misstatements in quantifying current year misstatements for the purpose of a materiality assessment. SAB 108 is effective for us
as of December 31, 2007. We do not expect that the adoption of this standard will have a material effect on our financial position, operations, or cash flows. In September 2006, the FASB issued SFAS No. 157, Fair Value Measures (SFAS
157). FAS 157 defines fair value and establishes a framework for measuring fair value in accordance with generally accepted
accounting principles. This Statement also applies to other accounting pronouncements that require or permit a fair value measure.
As defined by this Statement, the fair value of an Asset or Liability would be based on an exit price basis rather
than an entry price basis. Additionally, the fair value should be market-based and not an entity-based measurement.
SFAS 157 is effective for fiscal years beginning after November 15, 2007. We are still evaluating the effects, if any, SFAS No.
157 may have on our financial position, results of operations or cash flows. In July 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income
Taxes - an interpretation of FASB Statement No. 109 (FIN 48), which clarifies the accounting for uncertainty in
income taxes recognized in an enterprises financial statements. This Interpretation prescribes a recognition threshold and
measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a
tax return. Specifically, FIN 48 requires the recognition in financial statements of the impact of a tax position, if that
position is more likely than not of being sustained on audit, based on the technical merits of the position. Additionally, FIN 48
provides guidance on the de-recognition of previously recognized deferred tax items, classification, accounting for interest and
penalties, and accounting in interim periods related to uncertain tax positions, as well as, requires expanded disclosures. FIN 48
is effective for fiscal years beginning after December 15, 2006, with the cumulative effect of the change in accounting principle
recorded as an adjustment to opening retained earnings. We do not expect that the adoption of this standard will have a material effect on our financial position, operations, or cash flows. In March 2006, the FASB issued SFAS No. 156, Accounting for Servicing of Financial Assets - an
amendment of FASB Statement No. 140 (SFAS 156). This Statement amends FASB Statement No. 140, Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, with respect to accounting for
separately recognized servicing assets and servicing liabilities. This Statement clarifies when servicing rights should be
separately accounted for, requires companies to account for separately recognized servicing rights initially at fair value, and
gives companies the option of subsequently accounting for those servicing rights at either fair value or under the amortization
method. SFAS 156 is effective for fiscal years beginning after September 15, 2006. The effects of this standard are not
anticipated to have a material impact on our financial position, results of operations or cash flows. In February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial
Instruments - an amendment to FASB Statements No. 133 and 140 (SFAS 155). SFAS155 simplifies the accounting for
certain hybrid financial instruments containing embedded derivatives. SFAS 155 allows fair value measurement for any hybrid
financial instrument that contains an embedded derivative that otherwise would require bifurcation under SFAS 133. In addition, it
amends SFAS 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. SFAS 155 is effective for all financial
instruments acquired, issued, or subject to a re-measurement (new basis) event occurring after the beginning of an entitys
first fiscal year that begins after September 15, 2006. The effects of this standard are not anticipated to have a material impact
on our financial position, results of operations or cash flows.  
 U.S. HELICOPTER CORPORATIONNOTES TO FINANCIAL STATEMENTS (3) Summary of Significant Accounting Policies (Continued) In October 2006 the FASB issued FSB No. FAS 123(R)-5, Amendment of FASB Staff Position FAS
123(R)-1. This FSP concluded that for instruments that were originally issued as employee compensation and then modified,
and for which such modification is made to the terms of the instrument solely to reflect an equity restructuring that occurs when
the holders are no longer employees, no change in the recognition or the measurement (due to a change in classification) of those
instruments will result if certain conditions are met. The FSP is to be applied in the first reporting period beginning after
October 10, 2006. The effects of this standard are not anticipated to have a material impact on our financial position, results of
operations or cash flows. In October 2006 the FASB issued FSB No 123(R)-6, Technical Corrections of FASB Statement No.
123(R). This FSP made four technical corrections to eliminate certain inconsistencies in FASB Statement No. 123(R),
Share-Based Payment. This FSP should be applied in the first reporting period beginning after October 20, 2006. The effects of
this standard are not anticipated to have a material impact on our financial position, results of operations or cash flows. In December 2006 the FASB issued FSB No. AUG AIR-1, Accounting for Major Maintenance
Activities. This FSP prohibits the use of the accrue-in-advance method of accounting for planned major maintenance
activities in annual and interim financial reporting periods. The guidance in the FSP is applicable to entities in all industries
and must be applied to the first fiscal year beginning after December 15, 2006. In January 2007 the FASB issued Derivatives Implementation Group Statement 133 Implementation Issue No.
B40, Embedded Derivatives: Application of Paragraph 13(b) to Securitized Interested in Prepayable Financial Assets.
This Issue provides a narrow scope exception from paragraph 13(b) of Statement No. 133 for securitized interests that contain only
an embedded derivative that is tied to the prepayment risk of the underlying prepayable financial assets. The guidance in this
Issue is generally effective upon initial adoption of Statement No. 155. The effects of these standards are not anticipated to
have a material impact on our financial position, results of operations or cash flows. (4) Deposits We had deposits of $893,506 at March 31, 2007. Deposits are principally related to our leasing of four helicopters and a
deposit we placed with a manufacturer for the purchase of four new helicopters. (5) Accounts Payable and Accrued Expenses We had accounts payable and accrued expenses of $2,606,538 at March 31, 2007, broken down as follows: Professional Fees
     $
     196,100Reservations Services
     
     102,751Advertising/Marketing
     
     175,551Maintenance
     
     592,337Insurance
     
     263,540Interest
     
     605,474Deferred Financing Costs
     
     199,970Training
  
  143,250Other Accounts Payable and Accrued Expenses
     
     341,552Totals
     $
     2,620,526
  
 U.S. HELICOPTER CORPORATIONNOTES TO FINANCIAL STATEMENTS (6) Air Traffic Liability We had air traffic liability of $119,981 at March 31, 2007. Air traffic liability refers to tickets we
have sold where the passenger has not yet used the ticket to fly. (7) Officers Payroll 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. 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. 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. 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. 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. (8) Stock-Based Compensation In December 2004, the FASB issued SFAS No. 123R, Share-Based Payment. SFAS No. 123R is a
revision of SFAS No. 123, Accounting for Stock Based Compensation, and supersedes Accounting Principles Boards
(APB)s 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 (the Black-Scholes-Merton Model) 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. On March 30, 2006 we issued a total of 1,000,000 shares of common stock to various directors, officers,
employees and consultants of the Company in connection with our 2004 Stock Incentive Plan (Restricted Stock Awards) as
Deferred Equity Compensation. The Restricted Stock Awards have a restriction on transferability and sale for a period of 18 months
from and after the issuance date. We expensed $241,667 for these Restricted Stock Awards in the first quarter of 2007 and will
expense $483,333 ratably over the second and third quarters of 2007.  
 U.S. HELICOPTER CORPORATIONNOTES TO FINANCIAL STATEMENTS (8) Stock-Based Compensation (Continued) In 2006, we issued an additional 226,000 shares of common stock and options to purchase an additional
576,000 shares of common stock to employees, officers and directors, which have various restrictions on transferability and sale
for periods after the issuance date. In the first quarter of 2007, we issued an additional 600,000 options to purchase shares of common
stock to non-employees for services, which have various restrictions on transferability and sale for periods after the issuance
date. (9) 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 all periods presented, 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. (10) 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, 2007, we had net deferred financing costs of $1,427,234. These costs were related to the
placement of the March 2006 Debenture [Note 11], the November 2006 Debenture, and the March 2007 Debenture [Note 11], and are being amortized over the lives of
the debentures. The balances of the New Debenture and the August 2005 Debenture were converted on September 11, 2006 and all
deferred financing costs related to that issuance were written off at that time. We recorded amortization expense related to
deferred financing totaling $100,992 and $173,438 for the three month periods ended March 31, 2007 and March 31, 2006,
respectively. At March 31, 2007, we had net deferred offering costs of $220,806. These costs were primarily related
to our Standby Equity Distribution Agreement [Note 12] and will be offset against the proceeds of the offering, when
consummated. (11) Convertible Debt Long-Term Convertible Debt  In February 2006 we issued a convertible note (the
February 2006 Note) in the amount of $494,505 to an investor in exchange for 494,505 shares of our common stock held
by the investor. This investor had previously acquired such shares in a private transaction with Cornell Capital Partners, LP
(Cornell Capital). The February 2006 Note bears interest at 10% per annum, is repayable on February 23, 2007, and may be
extended to February 23, 2008. The February 2006 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 registered shares equal to the amount of shares which may be
converted under the February 2006 Note pursuant to an amended registration statement declared effective by the SEC on May 14,
2007. The investor has indicated they would like to extend the term of the note for one year and we anticipate completing the
documentation in the near future. On March 30, 2006 we issued a $6,000,000 8% interest convertible debenture maturing March 31, 2009 (the
March 2006 Debenture) to Cornell Capital. Proceeds from the March 2006 Debenture were used to repay prior loans from
Cornell Capital such that a combined $113,497 was still outstanding. This amount was converted on September 11, 2006 at a price of
$0.20 per share. We registered shares equal to the amount of shares which may be converted under the March 2006 Debenture pursuant
to an amended registration statement declared effective by the SEC on May 14, 2007. 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. To date, we have issued a total of 100,473 shares to Cornell Capital pursuant to conversion
notices of a total of $100,000 under 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.  
 U.S. HELICOPTER CORPORATIONNOTES TO FINANCIAL STATEMENTS (11) Convertible Debt (Continued) On November 10, 2006, we entered into a Securities Purchase Agreement (the November SPA)
with Cornell Capital pursuant to which we issued a secured convertible debenture to Cornell Capital in the principal amount of
$2,750,000 (the November 2006 Debenture). The November 2006 Debenture matures 36 months after issuance and accrues
interest at 8% per year which is payable in shares of our common stock at the lower of $1.45 per share or 95% of the lowest daily
volume weighted average price of our common stock (Fair Market Value) for the 30-day period prior to the interest
payment due date. The November 2006 Debenture is convertible at Cornell Capitals option into shares of our common
stock at a price per share equal to the lower of $1.45 per share or 95% of the fair market value of our common stock for the 30
days prior to the notice of exercise, as adjusted in accordance with the terms of the November 2006 Debenture. We are required to
register the shares issuable upon conversion of the November 2006 Debenture and the warrants issued in connection therewith within
45 days of our receipt of a written request from Cornell Capital to register such shares. Cornell Capitals conversion right
under the November 2006 Debenture is subject to certain limitations including that Cornell Capital may not convert the November
2006 Debenture for a number of shares in excess of that number of shares which, upon giving effect to such conversion, would cause
the aggregate number of shares of our common stock beneficially held by Cornell Capital to exceed 4.99% of our then outstanding
common stock. Effective May 10, 2007, Cornell Capital agreed to limit its resales of our common stock acquired under the November
2006 Debenture to no more than $250,000 for a period of 30 days if our common stock falls below $1.45 per share for five
consecutive trading days (the Resale Limitation). The Resale Limitation would not apply upon an event of default as
defined in the November 2006 Debenture, if waived in writing by us, or to private resales by Cornell Capital. We are required
pursuant to the November 2006 Debenture to reserve a total of 20% of the maximum number of shares that may be owned by persons who
are not U.S. citizens as determined in accordance with U.S. Department of Transportation regulations for issuance pursuant to the
November 2006 Debenture. Pursuant to the November SPA, we issued to Cornell Capital warrants to purchase a total of 2,000,000
shares of our common stock with the following exercise prices: $1.20 per share (as to 500,000 warrants); $1.35 per share (as to
500,000 warrants); $1.50 per share (as to 500,000 warrants); and $1.65 per share (as to 500,000 warrants). In addition, in the event we close on any
debt or equity financing after the issuance date of the November 2006 Debenture, we will be required to use 50% of the net
proceeds of such financings to prepay outstanding amounts outstanding under the November 2006 Debenture or any other debenture
issued by us to Cornell Capital. If amounts to be prepaid by us do not total at least the equivalent of $70,000 per month
beginning on April 1, 2007, we must prepay the difference to match such amount up to $2,000,000. No further prepayments will be
required once we prepay a total of $2,000,000. We agreed to grant a security interest to Cornell Capital covering substantially all of our assets to
secure our obligations under the November 2006 Debenture and the March 2006 Debenture pursuant to an Amended and Restated Security
Agreement. Pursuant to the November SPA, we also agreed to issue to Cornell Capital warrants (the New Warrants) to
purchase a total of 2,000,000 shares of our common stock with the following exercise prices: $1.20 per share (as to 500,000
warrants); $1.35 per share (as to 500,000 warrants); $1.50 per share (as to 500,000 warrants); and $1.65 per share (as to 500,000
warrants).  
 U.S. HELICOPTER CORPORATIONNOTES TO FINANCIAL STATEMENTS (11) Convertible Debt (Continued) 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. On March 30, 2007, we entered into a Securities Purchase Agreement (the March 2007 SPA)
with Cornell Capital pursuant to which we issued convertible debentures in the principal amount of $1,100,000 (the March 2007
Debenture). The March 2007 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 2007 Debenture is repayable as of June 30, 2007; however, if we are not successful in
completing a financing of at least $1.1 million at such time and no event of default occurs under the debentures, the maturity
date will be extended until September 30, 2007. The debentures accrue interest at 12% 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. In the event that the maturity date for
the March 2007 Debenture is extended, the interest rate under the debentures will increase by two percent per month through and
until September 30, 2007. We plan to use the proceeds received in this financing for working capital. Pursuant to the March 2007 SPA, we issued warrants to Cornell Capital to purchase a total of 155,481
shares of our common stock with the following exercise prices: $1.15 per share (as to 47,827 warrants); $1.35 per share (as to
40,741 warrants); $1.55 per share (as to 35,484 warrants); and $1.75 per share (as to 31,429 warrants). The warrants are
exercisable for a period of five years. 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 debentures
issued by us to Cornell Capital. In valuing the terms of the March 2006 Debenture, the November 2006 Debenture and the March 2007
Debenture in accordance with SFAS No. 133, we elected to value the debenture using the Black Scholes-Merton model. The effect of
this valuation was the creation of a long-term derivative liability of $3,724,718 for the March 2006 Debenture, $80,140 for the
November 2006 Debenture and $5,449 for the March 2007 Debenture, which were also recorded as discounts to each of the debentures.
These discounts are being amortized over the respective 36 month lives of the March 2006 Debenture and the November 2006 Debenture
and the 6 month life of the March 2007 Debenture. The long-term derivative liability is periodically revalued using the
Black-Scholes-Merton model. For the three month periods ended March 31, 2007 and 2006, we recorded changes in fair value of
derivative liability of $23,927 and $(242,745), respectively, in the Statement of Operations.  
 U.S. HELICOPTER CORPORATIONNOTES TO FINANCIAL STATEMENTS (11) Convertible Debt (Continued) Short-Term Convertible Debt  In February 2006 we issued the
February 2006 Note in the amount of $494,505 to an investor in exchange for 494,505 shares of our common stock
held by the investor. This investor had previously acquired such shares in a private transaction with Cornell
Capital. The February 2006 Note bears interest at 10% per annum is repayable on February 23, 2007, and may be
extended to February 23, 2008. The investor has indicated they would like to extend the term of the note for
one year and we anticipate completing the documentation in the near future. The February 2006 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 registered shares equal to the estimated maximum amount of shares
which may be converted under the February 2006 Note pursuant to a registration statement declared effective by
the SEC on June 13, 2006. On March 30, 2007, we entered into a Securities Purchase Agreement with Cornell Capital pursuant to
which we issued convertible debentures in the principal amount of $1,100,000 (see above). Principal repayment for each of the five succeeding fiscal years and thereafter as of March 31, 2007 is
as follows: Year ending2007
     $
     1,594,5052008
     
     2009
     
     8,650,0002010
     
     2011
     
     Thereafter
     
     Total Annual Debt Repayments
     $
     10,244,505
 (12) Securities Offerings Exercise of Warrants by Cornell Capital - On October 20, 2006, the Company and Cornell
Capital amended the terms of two warrant agreements (the Warrants) relating to the issuance of 1,250,000 shares of the
Companys common stock each. The Warrants contained exercise prices of $1.00 and $1.15, respectively. To induce Cornell
Capital to make an additional investment in the Company via the cash exercise of the Warrants, the Company agreed to reduce the
exercise price of each Warrant to $0.70 per share. We received proceeds of $1,750,000 from the exercise of these warrants on
October 20, 2006. On October 20, 2006, the Company issued a total of 2,500,000 shares of common stock in connection with
a notice of exercise of the Warrants received from Cornell Capital on such date. In connection with this agreement, the Company
issued additional warrants to purchase up to 500,000 shares of the Companys common stock with the following exercise prices:
$1.20 per share (as to 125,000 warrants); $1.35 per share (as to 125,000 warrants); $1.50 per share (as to 125,000 warrants); and
$1.65 per share (as to 125,000 warrants). Private Placement - On October 27, 2004, we authorized for issuance up to 1,500,000
shares of our Series A Preferred Stock. We completed a private placement offering of our equity securities at the end of December
2004. The private placement offering was through the sale of equity units (Units), each Unit consisting of five shares
of our Series A Preferred Stock and two warrants, each warrant exercisable to purchase one share of our common stock. The purchase
price per Unit was $5.00. We issued a total of 63,200 of our Units. Holders received a total of 316,000 shares of our Series A
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.  
 U.S. HELICOPTER CORPORATIONNOTES TO FINANCIAL STATEMENTS (12) Securities Offerings (Continued) During 2006, holders of 53,800 Units converted their preferred shares into 269,000
of our common shares. At March 31, 2007, 9,400 Units representing 47,000 shares of preferred stock were
outstanding. Our Series A Preferred Stock is the only class of preferred stock authorized for issuance by us
as of March 31, 2007. The Series A Preferred Stock ranks prior to our common stock and is subordinate to and
ranks junior to all of our indebtedness now or hereafter outstanding. Our Series A Preferred Stock is
convertible into shares of our common stock at a price equal to 80% of the average closing price of our common
stock on the OTC-BB for the 20 trading days immediately preceding the day upon which we receive a notice of
conversion from a Series A Preferred Stockholder. In the event that our shares are not traded on the OTC-BB,
the conversion price shall be equal to 80% of the average bid price of our common stock posted in the Pink
Sheets for the 20 trading days immediately preceding the day upon which we receive a notice of conversion from
a Series A Preferred Stockholder. Holders of our Series A Preferred Stock are entitled to receive, out of any funds legally available
therefore, non-cumulative annual dividends at the rate of 6% at such times and as declared by our Board of Directors. In addition,
Series A Preferred Stockholders have voting rights equivalent to common stockholders (i.e., one share of Series A Preferred Stock
has the same voting rights as one share of common stock for voting purposes only). 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 are required to
register the SEDA shares under the Securities Act of 1933 prior to any sales of our common stock under the SEDA. Proceeds of the
SEDA will be offset against deferred offering costs [Note 10] 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. (13) 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. Effective February 1, 2006, we entered into an agreement 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 of
$8,333 per month, which may increase based on the gross receipts we earn from DMH departing flights. We do not anticipate any
additional fee payments over the next 12 months.  
 U.S. HELICOPTER CORPORATIONNOTES TO FINANCIAL STATEMENTS (13) Commitments and Contingencies (Continued) On February 8, 2006, we entered into a one year lease agreement for office and hangar space for our
operations base. Monthly rent is approximately $16,000. We are accounting for this rent expense as paid, since the difference in
accounting on a straight-line basis is immaterial. We also agreed to issue 20,000 shares of our common stock to the lessor. We are
in discussions with the lessor of this facility for a new agreement. While there can be no assurances, we do expect that a new
agreement will be signed in the near future. Total rental expense was $131,241 and $35,280 for the three months ended March 31, 2007 and 2006,
respectively. On February 27, 2006, we entered into a three year lease agreement for office space in Cranford,
New Jersey. Monthly rent for this facility is $4,732 for the first year of the lease, $4,845 for the second
year of the lease and $4,957 for the third year of the lease. 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. In 2005 and 2006, we entered into separate five year operating leases for three 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 two of the helicopters is payable at the monthly rate of $35,834 per month and at a monthly rate of $45,417 for
the third helicopter. Each lease provides that the lessor will finance up to $200,000 per helicopter towards the costs of shipping
and modification; the amortization of this amount is included in the lease payment. The net effect of this is Deferred Charges of
$499,100, which amount will be amortized as a reduction in the rental expense over the life of each lease. 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 rent payments as of December 31, 2006 were: Year endingDecember 31,2007
     $
     1,938,0922008
     
     1,809,6602009
     
     1,459,5472010
     
     1,405,0202011
     
     253,336Thereafter
     
     Total Minimum Future Lease Payments
     $
     6,865,655
 On or about July 29, 2006, Textron Innovations, Inc. (Textron) instituted a trademark
cancellation proceeding against us before the U.S. Patent and Trademark Office, Trademark Trial and Appeal Board. In the
cancellation proceeding, Textron seeks to cancel our trademark registration for the mark U.S. HELICOPTER®, Trademark
Registration No. 3,072,323, as used by us for our scheduled airline services (the Mark). We registered the Mark on
March 21, 2006 on the Supplemental Register of the U.S. Patent and Trademark Office. Textron contends in the Cancellation
Proceeding that a subsidiary of Textron was named U.S. Helicopter and used that business entity name for
helicopter repair services in Texas prior to the use of the Mark by us. On or about September 7, 2006, we filed an
answer to the petition to cancel, generally denying the allegations of Textron, and seeking dismissal of the cancellation
proceeding. We are vigorously defending this claim. The case is currently in a discovery phase.  
 U.S. HELICOPTER CORPORATIONNOTES TO FINANCIAL STATEMENTS (14) 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 had an agreement with the Company (the Marketing Services
Agreement) 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 $832,500 of the proceeds of the transactions with Cornell Capital and
certain other investors plus warrants to purchase up to 600,000 shares of the Companys common stock. On January 17, 2007, we
entered into a Settlement Agreement and Release with respect to the Marketing Services Agreement. In exchange for a full
termination of the Marketing Services Agreement, we agreed to the following: (i) a payment of $50,000 to each of Mr. Capozzi and
Mr. McSullivan upon the signing of the settlement agreement; (ii) a payment of $99,985 to each of Mr. Capozzi and Mr. McSullivan
as of March 15, 2007; and (iii) the issuance of warrants to purchase 300,000 and 200,000 shares to Mr. Capozzi and Mr. McSullivan,
respectively, with an exercise price of $0.05 per share and a term of five years. 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. (15) Income Taxes We have approximately $4,340,000 of unamortized capitalized pre-operating costs that have not been
deducted for tax purposes at December 31, 2006. These deductions are being 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 $1,736,000 at
December 31, 2006. As the effective utilization of this deferred tax asset is dependant on future taxable profits, a valuation
allowance of approximately $1,736,000 was recorded at December 31, 2006, leaving a net deferred tax asset of $-0- for all periods
presented. The valuation allowance decreased by $306,000 in 2006. We have approximately $8,394,000 of net operating losses (NOLS) that have not been used for
tax purposes as of December 31, 2006. These NOLS expire twenty years following the year in which the loss occurred. Our NOLS begin
expiring in 2023. (16) Stock Options Issued Under 2004 Stock Incentive Plan On July 23, 2004, we issued an option to acquire 231,000 shares of our common stock for $0.50 per
share. On October 27, 2004, we issued options to acquire 581,000 shares of our common stock for $0.50 per share. On May 25,
2005, we issued an option to acquire 70,000 shares of our common stock for $0.50 per share. On April 3, 2006 we issued options to
acquire 150,000 shares of our common stock for $0.50 per share. On October 26, 2006 we issued options for 351,000 shares at $1.40
per share. On December 21, 2006 we issued options for 75,000 shares at $1.25 per share. On March 10, 2007 we issued options for
600,000 shares at $1.05 per share. We recorded $47,868 and $-0- in the periods ending March 31, 2007 and 2006, respectively, in recognition of the cost of the
options issued.  
 U.S. HELICOPTER CORPORATIONNOTES TO FINANCIAL STATEMENTS (16) Stock Options Issued Under 2004 Stock Incentive Plan (Continued)  The following is a summary of options outstanding:  Weighted AverageNumber of Shares
     
     Exercise PriceOutstanding at December 31, 2004
     
     812,000
     
     $
     0.50Granted
     
     70,000
     
     
     0.50Exercised
     
     
     
     
     Forfeited
     
     
     
     
     Outstanding at December 31, 2005
     
     882,000
     
     $
     0.50Granted
     
     576,000
     
     $
     0.50 - $1.40Exercised
     
     
     
     
     Forfeited
     
     (70,000
     )
     
     0.50Outstanding at December 31, 2006
     
     1,388,000
     
     $
     0.50 - $1.40Granted
     
     600,000
     
     $
     1.05Exercised
     
     
     
     
     Forfeited
     
     
     
     
     Outstanding at March 31, 2007
     
     1,988,000
     
     $
     0.50 - $1.40AtMarch 31, 2007
     
     AtDecember 31, 2006Options Exercisable
     
     1,425,500
     
     
     1,225,500Quarter EndedMarch 31, 2007
     
     Year EndedDecember 31, 2006Weighted Average Fair Value of OptionsGranted During the Periods
     $
     47,868
     
     $
     170,559
 As of March 31, 2007 the weighted average exercise price of all of our employee stock options is
$0.853. The weighted average remaining contractual life is approximately 7.32 years. As of March 31, 2007, the weighted average exercise price for our employee stock options which have
vested is $0.736. The weighted average contractual life is approximately 7.73 years. The fair value of each option granted is estimated on the grant date using the Black-Scholes Model. The
following assumptions were made in estimating fair value: Years ended December 31,2006
     
     2005Dividend Yield
     %
     
     %Risk-Free Interest Rate
     4.75%
     
     4.75%Expected Life
     10 years
     
     N/AExpected Volatility
     N/A
     
     N/A
 (17) Subsequent Events On May 14, 2007, we entered into a Securities Purchase Agreement with Cornell Capital pursuant to which
we issued convertible debentures in the principal amount of $500,000. The debentures are convertible at the option of  
 U.S. HELICOPTER CORPORATIONNOTES TO FINANCIAL STATEMENTS (17) Subsequent Events (Continued) 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
debentures are repayable as of July 14, 2007. The debentures accrue interest at 18% 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. We plan to use the proceeds received in
this financing for working capital. Pursuant to the Securities Purchase Agreement, we issued warrants to Cornell Capital to purchase a
total of 99,144 shares of our common stock with the following exercise prices: $1.00 per share (as to 31,250 warrants); $1.20 per
share (as to 26,042 warrants); $1.40 per share (as to 22,321 warrants); and $1.60 per share (as to 19,531 warrants). The warrants
are exercisable for a period of five years. 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
debentures issued by us to Cornell Capital. On April 2, 2007 we signed an Offer Letter with Electronic Data Systems Corporation (EDS)
for the purchase of a Sikorsky S-76B helicopter. We paid a refundable deposit (under certain circumstances) to EDS on April 9,
2007 pursuant to an Escrow Agreement dated April 9, 2007 We are in discussions with financing sources to provide operating lease
financing for the purchase and lease the helicopter to us. There can be no guarantee of the discussions with financing sources
will be successful.  
 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 Metro-hop Airport Shuttle Service. Our MASS service
will provide regular, scheduled passenger helicopter service between many of the nations larger metropolitan airports and
surrounding city-based heliports. On March 27, 2006, we commenced regularly scheduled flight operations between the Downtown
Manhattan Heliport and JFK International Airport. We expanded service to Newark Liberty Airport in December 2006. We further
expanded service from the East 34th Street Heliport to Kennedy Airport
and Newark Liberty Airport in February 2007. 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 $169. 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 stands 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 is available to the general public including corporate CEOs and affluent leisure travelers, we
believe our service has the greatest appeal to the segment of the business traveler market (like managers, directors, etc.) 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 is highly attractive (for personal reasons as well as business reasons)
compared to ground-based travel when the helicopter connection is reasonably and moderately priced in the range that U.S.
Helicopter offers. During 2006, we introduced our MASS service in the Metro New York City market with service between
Kennedy Airport and Newark Liberty Airport and the Downtown Manhattan Heliport. In June 2006, we also commenced service between
Sikorsky Memorial Airport in Stratford, Connecticut and the Downtown Manhattan Heliport. Beginning in February 2007 we expanded
our service between Kennedy Airport and Newark Liberty Airport to the East 34th Street Heliport. We intend to expand our service
to LaGuardia International Airport and the West 30th Street Heliport
in Manhattan during the next 12 months. Subsequently we intend to introduce our airport shuttle service in the metropolitan
Washington DC, Chicago and Los Angeles markets, with further expansion into other major U.S. metro-markets. The number of
passengers who originate or terminate their travel from within close proximity to one of these cities heliports is estimated
at over 200 million annually. Over 29 million passengers originate or terminate their trips from the island of Manhattan.  
 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 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 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. As of March 31, 2007, we had an
accumulated deficit of $(16,593,296). We did not receive any revenues from inception until the start of operations on March 27,
2006. Our operations have been financed primarily through the sale of secured convertible debentures, the cash exercise of
outstanding warrants, 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. The terms of these
debt and equity financings are set forth below. May 2007 Convertible Debenture Financing On May 14, 2007, we entered into a Securities Purchase Agreement (the May 2007 SPA) with
Cornell Capital pursuant to which we agreed to issue a secured convertible debenture to Cornell Capital in the principal amount of
$500,000 (the May 2007 Debenture), which was funded on May 16, 2007. The May 2007 Debenture is repayable as of July
14, 2007. The May 2007 Debenture accrues interest at 18% per year payable in our common stock at the rate equal to the conversion
price of the debenture in effect at the time of payment. The May 2007 Debenture is convertible at Cornell Capitals option into shares of our common stock
at a price per share equal to the lower of $1.45 per share or 95% of the lowest daily volume weighted average price of our common
stock (Fair Market Value) for the 30 days prior to the notice of exercise, as adjusted in accordance with the terms of
the May 2007 Debenture. Cornell Capitals conversion right under the May 2007 Debenture is subject to certain limitations
including that Cornell Capital may not convert the May 2007 Debenture for a number of shares in excess of that number of shares
which, upon giving effect to such conversion, would cause the aggregate number of shares of our common stock beneficially held by
Cornell Capital to exceed 4.99% of our then outstanding common stock. In addition, Cornell Capital has agreed to not sell any
shares that may be acquired under the May 2007 Debenture until May 14, 2008; provided, however, that such limitation does not
apply in the event that the closing bid price of our common stock is greater than $1.75 for five consecutive trading days, upon
the occurrence of an event of default under the May 2007 Debenture, if waived by Cornell Capital or to private resales by Cornell
Capital.  
 In addition, in the event we close on any debt or equity financing after the issuance date of the May
2007 Debenture, we are required to use 100% of the net proceeds of such financings to prepay outstanding amounts under the May
2007 Debenture until the May 2007 Debenture is repaid in full. We have agreed to grant a security interest to Cornell Capital covering substantially all of our
assets to secure our obligations under the May 2007 Debenture pursuant to an Amendment No. 1 to Amended and Restated Security
Agreement. Pursuant to the May 2007 SPA, we also agreed to issue to Cornell Capital warrants to purchase a total of 99,144 shares
of our common stock with the following exercise prices: $1.00 per share (as to 31,250 warrants); $1.20 per share (as to 26,042
warrants); $1.40 per share (as to 22,321 warrants); and $1.60 per share (as to 19,531 warrants). The warrants are exercisable for
a period of five years. In connection with the May 2007 SPA, we also agreed to register upon written request from Cornell
Capital the shares that may be acquired under the May 2007 Debenture and the 99,144 shares that may be issued pursuant to the
warrants. March 2007 Convertible Debenture Financing On March 30, 2007, we entered into a Securities Purchase Agreement (the March 2007 SPA)
with Cornell Capital pursuant to which we agreed to issue a secured convertible debenture to Cornell Capital in the principal
amount of $1,100,000 (the March 2007 Debenture), which was funded on April 2, 2007. The March 2007 Debenture is
repayable as of June 30, 2007; however, if we are not successful in completing a financing of at least $1.1 million at such time
and no event of default occurs under the March 2007 Debenture, the maturity date will be extended until September 30, 2007. The
March 2007 Debenture accrues interest at 12% per year payable in our common stock at the rate equal to the conversion price of the
debenture in effect at the time of payment. In the event that the maturity date for the debenture is extended, the interest rate
under the debenture will increase by two percent per month through and until September 30, 2007. The March 2007 Debenture is convertible at Cornell Capitals option into shares of our common
stock upon the same terms and conditions as the May 2007 Debenture. In addition, Cornell Capital has agreed to not sell any shares
that may be acquired under the March 2007 Debenture until March 31, 2008; provided, however, that such limitation does not apply
in the event that the closing bid price of our common stock is greater than $1.75 for five consecutive trading days, upon the
occurrence of an event of default under the March 2007 Debenture, if waived by Cornell Capital or to private resales by Cornell
Capital. In addition, in the event we close on any debt or equity financing after the issuance date of the
March 2007 Debenture, we are required to use 100% of the net proceeds of such financings to prepay outstanding amounts under the
March 2007 Debenture until the March 2007 Debenture is repaid in full. In connection with this financing, we also agreed to repay
up to a total of $5 million owed to Cornell Capital pursuant to the March 2007, November 2006 and March 2006 Debentures in the
event we are successful in raising $5.0 million in two separate private placement transactions. We have agreed to grant a security interest to Cornell Capital covering substantially all of our
assets to secure our obligations under the March 2007 Debenture pursuant to an Amended and Restated Security Agreement. Pursuant
to the March 2007 SPA, we also agreed to issue to Cornell Capital warrants to purchase a total of 155,481 shares of our common
stock with the following exercise prices: $1.15 per share (as to 47,827 warrants); $1.35 per share (as to 40,741 warrants); $1.55
per share (as to 35,484 warrants); and $1.75 per share (as to 31,429 warrants). The warrants are exercisable for a period of five
years. In connection with the March 2007 SPA, we also agreed to register upon written request from Cornell
Capital the shares that may be acquired under the March 2007 Debenture and the 155,481 shares that may be issued pursuant to the
warrants.  
 November 2006 Convertible Debenture Financing On November 10, 2006, we entered into a Securities Purchase Agreement (the November SPA)
with Cornell Capital pursuant to which we agreed to issue a secured convertible debenture to Cornell Capital in the principal
amount of $2,750,000 (the November 2006 Debenture), which was funded on November 28, 2006. The November 2006 Debenture
will mature 36 months after issuance and accrues interest at 8% per year which will be payable in shares of our common stock at
the lower of $1.45 per share or 95% of the Fair Market Value for the 30-day period prior to the interest payment due date. The November 2006 Debenture is convertible at Cornell Capitals option into shares of our common
stock upon the same terms and conditions as the May 2007 and March 2007 Debentures. Commencing May 10, 2007, Cornell Capital will
limit its resales of our common stock acquired under the November 2006 Debenture to $250,000 worth for a period of 30 days if our
common stock falls below $1.45 per share for five consecutive trading days (the Resale Limitation). The Resale
Limitation would not apply upon an event of default as defined in the November 2006 Debenture, if waived in writing by us, or to
private resales by Cornell Capital. We are required pursuant to the November 2006 Debenture to reserve a total of 20% of the
maximum number of shares that may be owned by persons who are not U.S. citizens as determined in accordance with U.S. Department
of Transportation regulations for issuance pursuant to the November 2006 Debenture. In addition, in the event we close on any debt or equity financing after the issuance date of the
November 2006 Debenture, we are required to use 50% of the net proceeds of such financings to prepay outstanding amounts under the
November 2006 Debenture or any other debenture issued by us to Cornell Capital. If amounts to be prepaid by us do not total at
least the equivalent of $70,000 per month beginning on April 1, 2007, we must prepay the difference to match such amount up to
$2,000,000. No further prepayments are required once we prepay a total of $2,000,000. We have agreed to grant a security interest to Cornell Capital covering substantially all of our
assets to secure our obligations under the November 2006 Debenture pursuant to an Amended and Restated Security Agreement.
Pursuant to the November SPA, we also agreed to issue to Cornell Capital warrants to purchase a total of 2,000,000 shares of our
common stock with the following exercise prices: $1.20 per share (as to 500,000 warrants); $1.35 per share (as to 500,000
warrants); $1.50 per share (as to 500,000 warrants); and $1.65 per share (as to 500,000 warrants). In connection with the November SPA, we also entered into an Investor Registration Rights Agreement
whereby we have agreed to register upon written request from Cornell Capital up to 6,875,000 shares that may be acquired under the
November 2006 Debenture and the 2,000,000 shares that may be issued pursuant to the warrants. October 2006 Warrant Amendments and Exercise On October 20, 2006, Cornell Capital and we amended the terms of two warrant agreements (the
Cornell Warrants) relating to the issuance of 1,250,000 shares of common stock each that were issued in connection
with the March 2006 Debenture (defined below). The Cornell Warrants contained exercise prices of $1.00 and $1.15, respectively. To
induce Cornell Capital to make an additional investment in us via the cash exercise of the Cornell Warrants, the Company agreed to
reduce the exercise price of each Cornell Warrant to $0.70 per share. On October 20, 2006, we issued a total of 2,500,000 shares
of common stock in connection with a notice of exercise of the Cornell Warrants received from Cornell Capital on such date. In
connection with this agreement, we also agreed to issue additional warrants to purchase up to 500,000 shares of our common stock
with the following exercise prices: $1.20 per share (as to 125,000 warrants); $1.35 per share (as to 125,000 warrants); $1.50 per
share (as to 125,000 warrants); and $1.65 per share (as to 125,000 warrants). March 2006 Convertible Debenture Financing 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 upon the same terms as the May 2007, March
2007 and November 2006 Debentures. 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 4.99% 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. 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. To date, we have issued a total of 100,473 shares to Cornell Capital pursuant to conversion notices of a
total of $100,000 under the March 2006 Debenture.  
 We entered into an Amended and Restated Security Agreement with Cornell Capital in connection with the
March 2006 Debenture 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 in August 2004. We were 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 registered a total of 10,802,179 shares of
common stock underlying the March 2006 Debenture pursuant to a registration statement declared effective by the SEC on May 14,
2007 (the May 2007 Registration Statement). 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. The
warrants containing exercise prices of $1.15 and $1.00 were amended in October 2006 as described above. We registered the shares
issuable upon conversion of the remaining 2,500,000 warrants (as well as the 2,500,000 shares issued upon exercise of the amended
warrants, as described above) in the May 2007 Registration Statement. October 2005 Convertible Note Financing 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
accrued 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, was 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 registered the resale of these shares, along with the 100,000 shares of common stock issuable upon
exercise of the Portfolio Lenders Warrant in the May 2007 Registration Statement. October 2005 Private Placements 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 registered these shares of common stock and the shares of common stock issuable upon
exercise of the warrant in the May 2007 Registration Statement. 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. 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 registered these shares of common stock in the May 2007 Registration
Statement. 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 registered the shares of common stock issuable upon exercise of these warrants in the May 2007 Registration
Statement. 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 registered these shares of common stock in the May 2007 Registration
Statement. 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 registered the shares of common stock issuable upon exercise of these warrants in the May 2007 registration
statement. Prior Cornell Capital Financings In addition to the November 2006 and March 2006 Debentures, 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) (the August 2005
Debenture). 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 debentures issued in August
2004 and February 2005 as of such date. We repaid all but $114,900 under the April 2005 Debenture and the August 2005 Debenture
with proceeds received in the March 2006 Debenture transaction. On September 11, 2006, Cornell Capital converted all remaining
amounts due and owing under the April 2005 Debenture and the August 2005 Debenture into a total of 584,588 shares of our common
stock. We registered a total of 7,344,830 shares of our common stock issuable upon conversion of the April
2005 Debenture in a registration statement declared effective by the SEC on September 2, 2005, which was later amended via
post-effective amendments declared effective by the SEC on June 27, 2006 and May 14, 2007, respectively. We registering a total of
74,608 shares issued upon conversion of the August 2005 Debenture in the May 2007 Registration Statement. 2004 Private Placement In addition, 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 a private placement offering during 2004 (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 registered the shares of common stock issued and issuable upon the conversion of the Series A
Preferred Stock and the warrants issued in the 2004 Private Placement in the May 2007 Registration Statement.  
 RESULTS OF OPERATIONS From inception on March 4, 2003 through March 27, 2006, the Company had no revenues from operations
and did not generate any revenues from operations until March 27, 2006. For the three months ended March 31, 2007, total revenues
were $296,726. For the three months ended March 31, 2007, the Company has incurred professional fees totaling
$383,357. These fees are comprised of legal fees for general matters, 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, 2007, our accumulated
deficit was $(16,593,296). 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 March 2006, we closed on an
additional $6.0 million convertible debenture financing with Cornell Capital. In October 2006, we received $1,750,000 in
connection with the cash exercise of two amended warrant agreements issued to Cornell Capital. In November 2006, we closed on an
additional $2.75 million convertible debenture financing with Cornell Capital. In March 2007, we closed on an additional $1.1
million convertible debenture financing with Cornell Capital. In May 2007, we closed on an additional $500,000 convertible
debenture financing with Cornell Capital. 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 investor has indicated they would like to extend the
term of this note and we anticipate completing the documentation in the near future. 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 acquired through lease, and put into service, four (4) 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. 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, as
amended, for the purchase of four aircraft to be delivered in late 2008. The Company has made a deposit with Sikorsky in the
amount of $400,000, or $100,000 per aircraft. The Company and Sikorsky will need to negotiate 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. We plan to acquire, through lease or mortgage, and put into service, three (3) additional helicopters
during 2007. We will need approximately $12.0 million of helicopter lease/debt financing for our next three
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 three aircraft will be approximately $0.2 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, the engine manufacturer or a third party
source 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 will be required to place deposits with the aircraft manufacturers for new aircraft to be delivered in late 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 by June 30, 2007 for delivery in late 2008 of four new aircraft at an average purchase price of $8.0 million, and
an additional fourteen (14) aircraft after 2008. The current anticipated delivery schedule for the initial and additional aircraft
for the balance of 2007 as follows: 
     November
2, 2005: Received one Sikorsky S-76B aircraft
     December
1, 2005: Received one Sikorsky S-76B aircraft
     February
14, 2006: Received one Sikorsky S-76B aircraft
     May
15, 2006: Received one Sikorsky S-76B aircraft
     June,
2007: Anticipated delivery of one Sikorsky S-76B  aircraft
     July,
2007: Anticipated Delivery of one Sikorsky S-76B  aircraft
     November,
2007: Anticipated delivery of one Sikorsky  S-76B 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 60 days
per 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 $10.77 million of convertible debentures, $1.75
million of warrant exercises, $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 in 2005. We also have
the ability to sell up to $11 million of our common stock to Cornell Capital pursuant to an Amended and Restated Standby Equity
Distribution Agreement with Cornell Capital in April 2005 (the SEDA). MANAGEMENTS PLAN TO OVERCOME OPERATING AND LIQUIDITY MATTERS Our operating plan seeks to minimize our capital requirements, but expansion of our flight services in
the New York market and other markets will require additional capital. As of March 31, 2007, we had $1,012,206 in cash. We believe
that additional capital is required to satisfy our cash requirements for the following 12 months with our current cash and
expected revenues from operations. We have recently entered into a number of financing transactions (see Notes 11 and 12 to our
Financial Statements), and we are continuing to seek other financing initiatives and have had, and continue to have, discussions
with a number of potential investors concerning investments in our securities.  
 We are presently working to raise additional capital to meet our working capital needs, for the
repayment of debt and for capital expenditures. During the next twelve months, we anticipate that we will need approximately $4.0
million of working capital (inclusive of capital expenditures), $12.0 million of lease financing, and $1.6 million to repay
debt. Such capital is expected to come from helicopter lease financing and the sale of equity or debt
securities, which may include the sale of common stock under our existing $11 million SEDA. As of the date of this report, we are
in discussions with financing sources for helicopter operating lease financing on one helicopter. We believe that if we complete
this helicopter lease financing and raise the remaining approximately $13.1 million through $8 million of operating lease
financing and $5.1 million of some combination of debt, equity or SEDA draws, we would have sufficient funds to meet our needs for
working capital, repayment of debt and for capital improvements over the next 12 months. There can be no assurances, however, that
we will be able to complete such financings on terms favorable to us or at all. GOING CONCERN MATTERS The accompanying consolidated financial statements have been prepared assuming that we will continue
as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of
business. We have incurred substantial net operating losses and used substantial amounts of cash in our operating activities.
Since our inception, we have incurred losses, have an accumulated deficit, and have experienced negative cash flows from
operations. The expansion and development of our business will likely require additional capital. This condition raises
substantial doubt about our ability to continue as a going concern. We expect cash flows from operating activities to improve,
primarily as a result of an increase in revenue, although there can be no assurance thereof. The accompanying consolidated
financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern. If
we fail to generate positive cash flows or obtain additional financing when required, we may have to modify, delay or abandon some
or all of our business and expansion plans. RECENT ACCOUNTING PRONOUNCEMENTS FASB STAFF POSITION EITF 00-19-2: In December 2006, the Financial Accounting
Standards Board (FASB) issued FASB Staff Position EITF 00-19-2 (FSP ETF 00-19-2) that
addresses an issuers accounting for registration payment arrangements. EITF 00-19-2 specifies that the
contingent obligation to make future payments or otherwise transfer consideration under a registration payment
arrangement, whether issued as a separate agreement or included as a provision of a financial instrument or
other agreement, should be separately recognized and measured in accordance with FASB Statement No. 5,
ACCOUNTING FOR CONTINGENCIES. The guidance in EITF 00-19-2 amends FASB Statements No. 133,
ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES, No. 150, ACCOUNTING FOR CERTAIN FINANCIAL
INSTRUMENTS WITH CHARACTERISTICS OF BOTH LIABILITIES AND EQUITY, and FASB Interpretation No. 45,
GUARANTORS ACCOUNTING AND DISCLOSURE REQUIREMENTS FOR GUARANTEES, INCLUDING INDIRECT GUARANTEES OF
INDEBTEDNESS OF OTHERS, to include scope exceptions for registration payment arrangements. This pronouncement
further clarifies that a financial instrument subject to a registration payment arrangement should be
accounted for in accordance with other applicable generally accepted accounting principles (GAAP) without
regard to the contingent obligation to transfer consideration pursuant to the registration payment
arrangement. Under FSP 00-19-2, the contingent obligation to make future payments or otherwise transfer
consideration under a registration payment arrangement shall be recognized and measured separately in
accordance with Statement 5 and FASB Interpretation No. 14, REASONABLE ESTIMATION OF THE AMOUNT OF A LOSS. FSP
EITF 00-19-2 is effective immediately for registration payment arrangements entered into after December 21,
2006 and for financial statements issued for fiscal years beginning after December 15, 2006, and interim
periods within those fiscal years. Adoption of this standard on January 1, 2007, did not have a material
effect on our financial position, operations, or cash flows.  
 STAFF ACCOUNTING BULLETIN NO. 108, CONSIDERING THE EFFECTS OF PRIOR YEAR
MISSTATEMENTS WHEN QUANTIFYING MISSTATEMENTS IN CURRENT YEAR FINANCIAL STATEMENTS: In September 2006,
the Securities and Exchange Commission issued Staff Accounting Bulletin No. 108, Considering the Effects
of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements
(SAB 108), which provides interpretive guidance on the consideration of the effects of prior year
misstatements in quantifying current year misstatements for the purpose of a materiality assessment. SAB 108
is effective for us as of December 31, 2007. We do not expect that the adoption of this standard will have a
material effect on our financial position, operations, or cash flows. SFAS NO. 157, FAIR VALUE MEASURES: In September 2006, the FASB issued SFAS No. 157,
Fair Value Measures (SFAS 157). FAS 157 defines fair value and establishes a framework for measuring fair
value in accordance with generally accepted accounting principles. This Statement also applies to other accounting pronouncements
that require or permit a fair value measure. As defined by this Statement, the fair value of an Asset or Liability would be based
on an exit price basis rather than an entry price basis. Additionally, the fair value should be
market-based and not an entity-based measurement. SFAS 157 is effective for fiscal years beginning after November 15, 2007. We are
still evaluating the effects, if any, SFAS No. 157 may have on our financial position, results of operations or cash flows. FASB INTERPRETATION NO. 48, ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES - AN
INTERPRETATION OF FASB STATEMENT NO. 109: In July 2006, the FASB issued FASB Interpretation No. 48,
Accounting for Uncertainty in Income Taxes  an interpretation of FASB Statement No. 109
(FIN 48), which clarifies the accounting for uncertainty in income taxes recognized in an
enterprises financial statements. This Interpretation prescribes a recognition threshold and measurement
attribute for the financial statement recognition and measurement of a tax position taken or expected to be
taken in a tax return. Specifically, FIN 48 requires the recognition in financial statements of the impact of
a tax position, if that position is more likely than not of being sustained on audit, based on the technical
merits of the position. Additionally, FIN 48 provides guidance on the de-recognition of previously recognized
deferred tax items, classification, accounting for interest and penalties, and accounting in interim periods
related to uncertain tax positions, as well as, requires expanded disclosures. FIN 48 is effective for fiscal
years beginning after December 15, 2006, with the cumulative effect of the change in accounting principle
recorded as an adjustment to opening retained earnings. We do not expect that the adoption of this standard
will have a material effect on our financial position, operations, or cash flows. SFAS NO. 156, ACCOUNTING FOR SERVICING OF FINANCIAL ASSETS - AN AMENDMENT OF FASB STATEMENT NO.
140: In March 2006, the FASB issued SFAS No. 156, Accounting for Servicing of Financial Assets - an amendment of FASB
Statement No. 140 (SFAS 156). This Statement amends FASB Statement No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities, with respect to accounting for separately recognized
servicing assets and servicing liabilities. This Statement clarifies when servicing rights should be separately accounted for,
requires companies to account for separately recognized servicing rights initially at fair value, and gives companies the option
of subsequently accounting for those servicing rights at either fair value or under the amortization method. SFAS 156 is effective
for fiscal years beginning after September 15, 2006. SFAS No. 156 is not expected to have a material impact on our financial
position, results of operations or cash flows. SFAS NO. 155, ACCOUNTING FOR CERTAIN HYBRID FINANCIAL INSTRUMENTS  AN AMENDMENT TO FASB
STATEMENTS NO. 133 AND 140: In February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial
Instruments  an amendment to FASB Statements No. 133 and 140 (SFAS 155). SFAS 155 simplifies the
accounting for certain hybrid financial instruments containing embedded derivatives. SFAS 155 allows fair value measurement for
any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation under SFAS 133. In
addition, it amends SFAS 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. SFAS 155 is
effective for all financial instruments acquired, issued, or subject to a re-measurement (new basis) event occurring after the
beginning of an entitys first fiscal year that begins after September 15, 2006. SFAS No. 155 is not expected to have a
material impact on our financial position, results of operations or cash flows. FSP NO. FAS 123(R)-5, AMENDMENT OF FASB STAFF POSITION FAS 123 (R)-1: This FSP concluded that for
instruments that were originally issued as employee compensation and then modified, and for which such modification is made to the
terms of the instrument solely to reflect an equity restructuring that occurs when the holders are no longer employees, no change
in the recognition or the measurement (due to a change in classification) of those instruments will result if certain conditions
are met. The FSP should be applied in the first reporting period beginning after October 10, 2006. The effects of this standard
are not anticipated to have a material impact on our financial position, results of operations or cash flows.  
 FSP NO. FAS 123(R)-6, TECHNICAL CORRECTIONS OF FASB STATEMENT NO. 123 (R): This FSP made four
technical corrections to eliminate certain inconsistencies in FASB Statement No. 123(R), Share-Based Payment. This FSP should be
applied in the first reporting period beginning after October 20, 2006. The effects of this standard are not anticipated to have a
material impact on our financial position, results of operations or cash flows. FSP NO. AUG AIR-1, ACCOUNTING FOR PLANNED MAJOR MAINTENANCE ACTIVITIES This FSP prohibits the use of
the accrue-in-advance method of accounting for planned major maintenance activities in annual and interim financial reporting
periods. The guidance in the FSP is applicable to entities in all industries and must be applied to the first fiscal year
beginning after December 15, 2006. The effects of this standard are not anticipated to have a material impact on our financial
position, results of operations or cash flows. DERIVATIVES IMPLEMENTATION GROUP STATEMENT 133 IMPLEMENTATION ISSUE NO. B40, EMBEDDED DERIVATIVES:
Application of Paragraph 13(b) to Securitized Interests in Prepayable Financial Assets: This Issue provides a narrow scope
exception from paragraph 13(b) of Statement No. 133 for securitized interests that contain only an embedded derivative that is
tied to the prepayment risk of the underlying prepayable financial assets. The guidance in this Issue is generally effective upon
initial adoption of Statement No. 155. 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.  
 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, 2007 and 2006. 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
three additional used, low-time helicopters roughly through and including fourth quarter 2007. 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 $2.63 million). With respect to changes in number of employees, we have 50 full time employees and 22
part-time employees as of March 31, 2007 and expect to have approximately 60 full-time and 30 part-time employees at the end of
2007. Off-Balance Sheet Arrangements. U.S. Helicopter has no off-balance sheet arrangements. PLAN OF OPERATION. OVERVIEW U.S. Helicopter Corporations 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
has introduced, and intends to expand its service, called Metro-hop Airport Shuttle Service (MASS), in the
New York City market. When fully implemented, the Companys plan in the New York City market is to offer 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 18 months 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 three additional helicopters during the Companys next
12 months of operations, for which approximately $12 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, respectively.
The Company is currently in negotiations with a number of potential financing sources for its aircraft acquisition costs; however,
there can be no assurances that a transaction with any of these potential financing sources will be completed.  
 The Company has 50 full-time employees and 22 part-time employees as of March 31, 2007. As of the end
of fourth quarter 2007, the Company expects to have approximately 60 full time and 30 part-time employees. None of our employees
are represented by a labor union. We consider our employee relations to be good. 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 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 entitled 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. We used the proceeds from these transactions for general working capital purposes and
startup costs. We repaid approximately $897,000 due under the April 2005 Debenture with proceeds received in connection with the
March 2006 Debenture transaction on March 31, 2006. On September 11, 2006, Cornell Capital converted all amounts that remained due
and owing under the April 2005 Debenture into a total of 509,980 shares of our common stock. 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. 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). The August 2005 Debenture bore
interest at 5% per annum and was 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 were convertible 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 were identical to the April 2005 Debenture. We repaid approximately $131,200 due under the August 2005
Debenture with proceeds received in connection with the March 2006 Debenture transaction on March 31, 2006. On September 11, 2006,
Cornell Capital converted all amounts that remained due and owing under the August 2005 Debenture into a total of 74,608 shares of
our common stock. 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. To date, we have issued a total of 100,473 shares to Cornell Capital pursuant to conversion notices of a
total of $100,000 under the March 2006 Debenture. On October 20, 2006, Cornell Capital and we amended the terms of the Cornell Warrants relating to the
issuance of 1,250,000 shares of common stock each. The Cornell Warrants contained exercise prices of $1.00 and $1.15,
respectively. To induce Cornell Capital to make an additional investment in us via the cash exercise of the Cornell Warrants, the
Company agreed to reduce the exercise price of each Warrant to $0.70 per share. On October 20, 2006, we issued a total of
2,500,000 shares of common stock in connection with a notice of exercise of the Cornell Warrants received from Cornell Capital on
such date. In connection with this agreement, we also agreed to issue additional warrants within 30 days to purchase up to 500,000
shares of our common stock with the following exercise prices: $1.20 per share (as to 125,000 warrants); $1.35 per share (as to
125,000 warrants); $1.50 per share (as to 125,000 warrants); and $1.65 per share (as to 125,000 warrants).  
 On November 10, 2006, we entered into the November SPA with Cornell Capital pursuant to which we
agreed to issue the November 2006 Debenture, which was funded on November 28, 2006. In connection with this transaction, we issued
to Cornell Capital warrants to purchase up to 2,000,000 shares of our common stock with the following exercise prices: $1.20 per
share (as to 500,000 warrants); $1.35 per share (as to 500,000 warrants); $1.50 per share (as to 500,000 warrants); and $1.65 per
share (as to 500,000 warrants). On March 30, 2007, we entered into the March 2007 SPA pursuant to which we agreed to issue the March
2007 Debenture, which was funded on April 2, 2007. In connection with this transaction, we issued to Cornell Capital warrants to
purchase up to 155,481 shares of our common stock with the following exercise prices: $1.15 per share (as to 47,827 warrants);
$1.35 per share (as to 40,741 warrants); $1.55 per share (as to 35,484 warrants); and $1.75 per share (as to 31,429 warrants). On May 14, 2007, we entered into the May 2007 SPA pursuant to which we agreed to issue the May 2007
Debenture, which was funded on May 16, 2007. In connection with this transaction, we issued to Cornell Capital warrants to
purchase up to 99,144 shares of our common stock with the following exercise prices: $1.00 per share (as to 31,250 warrants);
$1.20 per share (as to 26,042 warrants); $1.40 per share (as to 22,321 warrants); and $1.60 per share (as to 19,531 warrants). We began operations on March 27, 2006 and will ramp up our New York operations throughout 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 600 Great Meadow
Road, Suite 200, Sikorsky Memorial Airport, Stratford, Connecticut 06615; telephone number 203-378-2002. 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. Passengers are screened prior to boarding our helicopter at the heliport (where passenger volumes are significantly
lower than at major airports), and are 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 major 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 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. 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 a fare between $139-$169, U.S. Helicopters
helicopter services 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. 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)TravelMethod
     
     DepartureZone
     
     Destination
     
     Average Travel TimeDeparture Zone toDestination
     
     TravelTimeCheck-in &Security
     
     TotalElapsedTravelTime
     
     USHelicopterTimeSavingsIn Manhattan
     
     OutsideManhattanGround
     
     Downtown
     
     JFK
     
     20 min
     
     90 min
     
     45 min
     
     155 min
     
     120 minGround
     
     Downtown
     
     EWR
     
     15 min
     
     75 min
     
     45 min
     
     135 min
     
     100 minGround
     
     Downtown
     
     LGA
     
     20 min
     
     60 min
     
     45 min
     
     125 min
     
     90 minHelicopter
     
     Downtown
     
     All
     
     10 min
     
     10 min
     
     15 min
     
     35 minGround
     
     East Side
     
     JFK
     
     15 min
     
     90 min
     
     45 min
     
     150 min
     
     110 minGround
     
     East Side
     
     EWR
     
     25 min
     
     75 min
     
     45 min
     
     145 min
     
     105 minGround
     
     East Side
     
     LGA
     
     15 min
     
     60 min
     
     45 min
     
     120 min
     
     80 minHelicopter
     
     East Side
     
     All
     
     15 min
     
     10 min
     
     15 min
     
     40 minGround
     
     West Side
     
     JFK
     
     25 min
     
     90 min
     
     45 min
     
     160 min
     
     115 minGround
     
     West Side
     
     EWR
     
     15 min
     
     75 min
     
     45 min
     
     135 min
     
     90 minGround
     
     West Side
     
     LGA
     
     25 min
     
     60 min
     
     45 min
     
     130 min
     
     85 minHelicopter
     
     West Side
     
     All
     
     20 min
     
     10 min
     
     15 min
     
     45 min
 (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 separate occasions. In all scenarios, the
elapsed time of ground based travel is significantly higher than that of the helicopter. We anticipate that by the end of 2007, we will have completed initiation of the Metro-hop Airport
Shuttle Service in the New York 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. We plan to acquire through lease or mortgage and put into service three additional helicopters in
2007. 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 $12 million of helicopter debt/lease financing for our three
additional aircraft in 2007. We have not completed the financing arrangements necessary for the leasing of these aircraft. We
anticipate entering into a five-to-seven-year lease with monthly payments. We also anticipate that the lessor will pay or
reimburse the Company for the cost of transporting the aircraft and all necessary maintenance and inspection work. The lessor will
likely require a security deposit at the time the lease is entered into. In addition, the Company intends to contract with a
provider of 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. 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. IN ADDITION TO THE RISK FACTORS SET FORTH IN OUR REPORT ON FORM 10-KSB FOR THE
YEAR ENDED DECEMBER 31, 2006, INVESTORS SHOULD BE AWARE OF THE FOLLOWING RISKS: RISKS RELATED TO OUR BUSINESS AND AVIATION INDUSTRY We Have Limited Revenue from Operations and May Need to Raise Additional Capital To Finance
Operations. Our Operations since Inception have not Generated a Profit. We began operations on March 27, 2006 but had 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 $10.77 million of convertible debentures, $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 will be available to us
under a standby equity distribution agreement (the SEDA funds) upon the effectiveness of a related registration
statement. We anticipate that we will not need to raise additional capital to finance operations through year-end 2006 but will
need to raise additional capital to finance operations through 2007, assuming that our results of operations reasonably correspond
to our business plan. We must also raise $12 million for the leasing of aircraft. 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 $(9,619,760) for the
12 months ended December 31, 2006 and a net loss of $(3,859,419) for the three months ended March 31, 2007. 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.  
 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 seven aircraft through December 2007 is as follows: 
     November
2, 2005: Received one Sikorsky S-76B aircraft
     December
1, 2005: Received one Sikorsky S-76B aircraft
     February
14, 2006: Received one Sikorsky S-76B aircraft
     May
15, 2006: Received one Sikorsky S-76B aircraft
     June,
2007: Anticipated delivery of one Sikorsky S-76B  aircraft
     July,
2007: Anticipated delivery of one Sikorsky S-76B  aircraft
     November,
2007: Anticipated delivery of one Sikorsky  S-76B 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 60 days
per aircraft. These acquisitions would require financing in the amount of $12 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. RISKS RELATED TO CORNELL CAPITAL FINANCING We are party to certain agreements with Cornell Capital relating to the issuance of approximately
$10.77 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. Cornell Capital Could Acquire a Significant Amount of Our Common Stock and, if it Does So, Could
Exercise Significant Influence Over Us. As of March 31, 2007, Cornell Capital held 3,153,935 shares of common stock and, based upon the
conversion rights under the March 2006, November 2006, March 2007 and May 2007 Convertible Debentures, could acquire up to
approximately 24.87% of our common stock based on a conversion price of $1.45 per share, or an estimated 30.38% 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 4.99% of our
issued and outstanding common stock. If Cornell Capital acquired such 24.87%-30.38% 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.  
 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, 2007. 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 2007 or subsequent to the date of
the evaluation by its management thereof. PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS On or about July 29, 2006, Textron Innovations, Inc. (Textron) instituted a trademark
cancellation proceeding against us before the U.S. Patent and Trademark Office, Trademark Trial and Appeal Board. In the
cancellation proceeding, Textron seeks to cancel our trademark registration for the mark U.S. HELICOPTER®, Trademark
Registration No. 3,072,323, as used by us for our scheduled airline services (the Mark). We registered the Mark on
March 21, 2006 on the Supplemental Register of the U.S. Patent and Trademark Office. Textron contends in the Cancellation
Proceeding that a subsidiary of Textron was named U.S. Helicopter and used that business entity name for
helicopter repair services in Texas prior to the use of the Mark by us. On or about September 7, 2006, we filed an
answer to the petition to cancel, generally denying the allegations of Textron, and seeking dismissal of the cancellation
proceeding. We are vigorously defending this claim. The case is currently in a discovery phase. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. The following Exhibits are filed as part of this report or incorporated herein by
reference: Exhibit No.
     
     Document Description
     Location31.1
     
     Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002
     (1)31.2
     
     Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
     (1)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
     (1)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
     (1)
 (1) Exhibit filed herewith.  
 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 CORPORATIONDate: June 1, 2007
     By:
     /s/ John G. MurphyJohn G. MurphyChief Executive Officer and President(Principal Executive Officer)By:
     /s/ George J. Mehm, Jr.George J. Mehm, Jr.Chief Financial Officer and Senior Vice President(Principal Financial and Accounting
Officer)