Delaware
|
4522
|
20-1635240
|
(State
or other jurisdiction of
incorporation
or organization)
|
(Primary
Standard Industrial
Classification
Code number)
|
(I.R.S.
Employer
Identification
No.)
|
Large
accelerated filer o
|
Accelerated
filer o
|
|
Non-accelerated
filer o
|
Smaller
reporting company x
|
Title
of Each
Class
of
Securities
to
be
Registered
|
|
Amount to be
Registered(1)
|
|
Proposed Maximum
Aggregate Offering
Price (2)
|
|
Amount of
Registration Fee
|
|
|||
Common Stock, Par value
$0.0001 per share
|
2,951,457
|
$
|
5,799,613
|
$
|
227.93
|
|||||
Total
|
2,951,457
|
$
|
5,799,613
|
$
|
227.93
|
(3) |
(1) |
Pursuant
to Rule 416 under the Securities Act of 1933, as amended, the number
of
shares of common stock registered hereby is subject to adjustment
to
prevent dilution resulting from stock splits, stock dividends or
similar
transactions.
|
(2) |
Estimated
solely for the purposes of calculating the registration fee pursuant
to
Rule 457(o) under the Securities Act of 1933, as amended based upon
the average bid and asked price of the common stock on June 27,
2008.
|
(3) | Previously paid. |
Page
|
||||
PROSPECTUS
SUMMARY
|
1
|
|||
SELECTED
FINANCIAL DATA
|
6
|
|||
RISK
FACTORS
|
8
|
|||
INFORMATION
REGARDING FORWARD-LOOKING STATEMENTS
|
20
|
|||
MARKET
AND INDUSTRY DATA
|
20
|
|||
USE
OF PROCEEDS
|
21
|
|||
PRICE
RANGE OF SECURITIES AND DIVIDENDS
|
21
|
|||
DIVIDEND
POLICY
|
22
|
|||
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
23
|
|||
BUSINESS
|
38
|
|||
MANAGEMENT
|
49
|
|||
SELLING
STOCKHOLDERS
|
65
|
|||
DESCRIPTION
OF CAPITAL STOCK
|
72
|
|||
SHARES
ELIGIBLE FOR FUTURE SALE
|
78
|
|||
PLAN
OF DISTRIBUTION
|
79
|
|||
LEGAL
MATTERS
|
81
|
|||
EXPERTS
|
81
|
|||
WHERE
YOU CAN FIND MORE INFORMATION
|
81
|
|||
CONSOLIDATED
FINANCIAL STATEMENTS
|
F-1
|
·
|
price;
|
·
|
availability;
|
·
|
operating
costs;
|
·
|
reliability;
|
·
|
speed;
|
·
|
range;
|
·
|
cabin
size and features;
|
·
|
safety
features and record;
|
·
|
efficiency;
|
·
|
maintenance
cost;
|
·
|
manufacturer;
and
|
·
|
runway
requirements.
|
Common
stock offered by the selling stockholders
|
Up
to 2,951,457 shares
|
|
Use
of Proceeds
|
Proceeds
from the sale of common stock covered by this prospectus will be
received
by the selling stockholders. We will not receive any proceeds from
the
sale of the shares of common stock covered by this
prospectus.
|
|
OTC
Bulletin Board symbol for our Common Stock
|
“AAIR.OB”
|
|
OTC
Bulletin Board symbol for our Warrants
|
“AAIRW.OB”
|
|
OTC
Bulletin Board symbol for our Units
|
“AAIRU.OB”
|
Nine Months
Ended
|
Twelve
Months Ended
|
|||||||||||||||
March
31,
2008
|
June
30,
2007
|
June
30,
2006
|
June
30,
2005
|
June
30,
2004
|
||||||||||||
Consolidated
Statement of Operations Data
|
||||||||||||||||
Revenues
|
||||||||||||||||
Fractional
aircraft shares sold
|
$
|
31,633,495
|
$
|
29,695,175
|
$
|
23,756,070
|
$
|
10,580,859
|
$
|
3,226,890
|
||||||
Maintenance
and management fees
|
42,121,457
|
38,787,596
|
22,824,940
|
11,645,999
|
3,463,810
|
|||||||||||
Demonstration
and charter card revenues
|
7,756,892
|
7,910,461
|
1,814,370
|
1,167,520
|
1,027,348
|
|||||||||||
FBO
and other revenues
|
2,718,330
|
—
|
—
|
—
|
—
|
|||||||||||
Total
revenue
|
84,230,174
|
76,393,232
|
48,395,380
|
23,394,378
|
7,718,048
|
|||||||||||
Operating
expenses
|
||||||||||||||||
Cost
of fractional aircraft shares sold
|
26,373,438
|
24,370,988
|
19,166,722
|
9,318,013
|
2,925,978
|
|||||||||||
Cost
of flight operations
|
38,809,119
|
35,665,057
|
25,362,985
|
10,157,566
|
3,875,815
|
|||||||||||
Write-off
of aircraft deposit
|
—
|
300,000
|
—
|
—
|
—
|
|||||||||||
Cost
of fuel
|
12,373,941
|
10,192,406
|
6,419,835
|
4,226,802
|
1,744,270
|
|||||||||||
General
and administrative expenses (including share-based compensation
expense of
$2,784,592 in 2007 and $0 in 2006, 2005 and 2004)
|
14,852,400
|
20,554,140
|
13,406,376
|
6,885,229
|
4,224,404
|
|||||||||||
Depreciation
and amortization
|
2,878,978
|
—
|
—
|
—
|
—
|
|||||||||||
Selling
expenses
|
3,392,324
|
4,333,268
|
3,672,754
|
976,164
|
514,430
|
|||||||||||
Total
operating expenses
|
98,680,200
|
95,415,859
|
68,028,672
|
31,563,774
|
13,284,897
|
|||||||||||
Loss
from operations
|
(14,450,026
|
)
|
(19,022,627
|
)
|
(19,633,292
|
)
|
(8,169,396
|
)
|
(5,566,849
|
)
|
||||||
Other
income (expenses)
|
||||||||||||||||
Interest
income
|
418,169
|
444,179
|
557,508
|
490,591
|
237,927
|
|||||||||||
Interest
expense
|
(1,855,053
|
)
|
(3,406,181
|
)
|
(2,110,119
|
)
|
(1,194,723
|
)
|
(269,036
|
)
|
||||||
Other
income, net
|
341,370
|
284,723
|
437,982
|
167,329
|
553,457
|
|||||||||||
Total
other expenses
|
(1,095,514
|
)
|
(2,677,279
|
)
|
(1,114,629
|
)
|
(536,803
|
)
|
522,348
|
|||||||
Net
loss
|
|
(15,545,540
|
)
|
|
(21,699,906
|
)
|
|
(20,747,921
|
)
|
|
(8,706,199
|
)
|
|
(5,044,501
|
)
|
Preferred
stock dividend
|
(503,506
|
)
|
-
|
-
|
-
|
-
|
||||||||||
Accretion
of convertible preferred stock
|
(32,353
|
)
|
-
|
-
|
-
|
-
|
||||||||||
Net
loss attributed to common stockholders
|
$
|
(16,081,399
|
)
|
$
|
(21,699,906
|
)
|
$
|
(20,747,921
|
)
|
$
|
(8,706,199
|
)
|
$
|
(5,044,501
|
)
|
Loss
per common share
|
||||||||||||||||
Basic
and diluted
|
$
|
(1.02
|
)
|
$
|
(2.47
|
)
|
$
|
(6.31
|
)
|
$
|
(2.65
|
)
|
$
|
(1.53
|
)
|
|
Weighted-average
common shares outstanding:
|
||||||||||||||||
Basic
and diluted
|
15,220,817
|
8,780,234
|
3,288,590
|
3,288,590
|
3,288,590
|
Nine Months
Ended
|
As
of June 30
|
|||||||||||||||
Consolidated
Balance Sheet Data
|
March
31,
2008
|
2007
|
2006
|
2005
|
2004
|
|||||||||||
Total
Assets
|
$
|
189,833,021
|
$
|
160,490,260
|
$
|
105,154,683
|
$
|
93,640,621
|
$
|
53,186,447
|
||||||
Long-Term
Obligations
|
$
|
120,391,183
|
$
|
112,509,063
|
$
|
72,844,665
|
$
|
57,777,196
|
$
|
24,356,483
|
||||||
Stockholders’
Equity (Deficit)
|
$
|
(28,054,807
|
)
|
$
|
(11,959,024
|
)
|
$
|
(35,030,607
|
)
|
$
|
(13,748,700
|
)
|
$
|
5,042,501
|
·
|
make
a special written suitability determination for the
purchaser;
|
·
|
receive
the purchaser’s written agreement to a transaction prior to
sale;
|
·
|
provide
the purchaser with risk disclosure documents that identify certain
risks
associated with investing in “penny stocks” and that describe the market
for these “penny stocks” as well as a purchaser’s legal remedies;
and
|
·
|
obtain
a signed and dated acknowledgment from the purchaser demonstrating
that
the purchaser has actually received the required risk disclosure
document
before a transaction in a “penny stock” can be
completed.
|
·
|
Avantair’s
accounting files for fiscal 2004 were incomplete, which required
significant modifications of accounting data for that
period.
|
·
|
Costs
of fractional shares and revenue on certain contracts during the
years
ended June 30, 2006, 2005 and 2004 were not recognized properly due
to
errors made on the electronic worksheets for reporting this
information.
|
·
|
There
is insufficient number of accounting staff with the appropriate level
of
knowledge, which contributed to errors and deficiencies in financial
reporting and disclosures.
|
·
|
create
additional liens on its assets;
|
·
|
make
investments;
|
·
|
engage
in mergers or acquisitions;
|
·
|
pay
dividends; and
|
·
|
sell
any of Avantair’s aircraft or any other assets outside the ordinary course
of business.
|
·
|
changes
in the law which affect the services that can be offered by commercial
aircraft operators in particular markets and at particular
airports;
|
·
|
restrictions
on competitive practices (for example court orders, or agency regulations
or orders, that would curtail a commercial aircraft operator’s ability to
respond to a competitor);
|
·
|
the
adoption of regulations that impact customer service standards (for
example, new passenger security standards);
or
|
·
|
the
adoption of more restrictive locally-imposed noise
restrictions.
|
· |
actual
or anticipated variations in our operating
results;
|
·
|
announcements
of technological innovations, new products or product enhancements,
strategic alliances or significant agreements by us or by our
competitors;
|
·
|
changes
in recommendations by any securities analysts that elect to follow
our
common stock;
|
·
|
the
financial projections we may provide to the public, any changes in
these
projections or our failure to meet these
projections;
|
·
|
the
loss of a key customer;
|
·
|
the
loss of a key supplier;
|
·
|
the
loss of key personnel;
|
·
|
government
regulations affecting our industry;
|
·
|
lawsuits
filed against us;
|
·
|
changes
in operating performance and stock market valuations of other companies
that sell similar products;
|
·
|
price
and volume fluctuations in the overall stock
market;
|
·
|
market
conditions in our industry, the industries of our customers and the
economy as a whole; and
|
·
|
other
events or factors, including those resulting from war, incidents
of
terrorism or responses to these
events.
|
·
|
require
super-majority voting to amend some provisions in our certificate
of
incorporation and bylaws;
|
·
|
authorize
the issuance of “blank check” preferred stock that our board could issue
to increase the number of outstanding shares and to discourage a
takeover
attempt;
|
·
|
limit
the ability of our stockholders to call special meetings of
stockholders;
|
·
|
prohibit
stockholder action by written consent, which requires all stockholder
actions to be taken at a meeting of our
stockholders;
|
·
|
provide
that the board of directors is expressly authorized to make, alter
or
repeal our bylaws; and
|
·
|
establish
advance notice requirements for nominations for election to our board
or
for proposing matters that can be acted upon by stockholders at
stockholder meetings.
|
·
|
discuss
future expectations;
|
·
|
contain
information which could impact future results of operations or financial
condition; or
|
·
|
state
other “forward-looking”
information.
|
(1)
|
our
inability to generate sufficient net revenue in the
future;
|
(2)
|
our
inability to fund our operations and capital
expenditures;
|
(3)
|
our
inability to acquire additional inventory of
aircraft;
|
(4)
|
the
loss of key personnel;
|
(5)
|
our
inability to effectively manage our growth;
|
(6)
|
our
inability to generate sufficient cash flows to meet our debt service
obligations;
|
(7)
|
competitive
conditions in the fractional aircraft industry;
|
(8)
|
extensive
government regulation;
|
(9)
|
the
failure or disruption of our computer, communications or other technology
systems;
|
(10)
|
increases
in fuel costs;
|
(11)
|
changing
economic conditions; and
|
(12)
|
our
failure to attract and retain qualified pilots and other operations
personnel.
|
Common
Stock(1)
|
Warrants(1)
|
Units(2)
|
|||||||||||||||||
Quarter
Ended
|
High
|
|
|
Low
|
|
|
High
|
|
|
Low
|
|
|
High
|
|
|
Low
|
|||
2005
|
|||||||||||||||||||
First
Quarter
|
5.20
|
5.12
|
0.70
|
0.65
|
6.60
|
6.30
|
|||||||||||||
Second
Quarter
|
5.20
|
4.90
|
0.64
|
0.52
|
6.35
|
5.95
|
|||||||||||||
Third
Quarter
|
5.15
|
4.90
|
0.64
|
0.46
|
6.30
|
5.75
|
|||||||||||||
Fourth
Quarter
|
5.23
|
5.06
|
0.59
|
0.41
|
6.27
|
5.90
|
|||||||||||||
2006
|
|||||||||||||||||||
First
Quarter
|
5.48
|
5.19
|
0.78
|
0.50
|
7.06
|
6.13
|
|||||||||||||
Second
Quarter
|
5.45
|
5.30
|
0.77
|
0.43
|
6.88
|
6.20
|
|||||||||||||
Third
Quarter
|
5.37
|
5.29
|
0.48
|
0.36
|
6.20
|
6.00
|
|||||||||||||
Fourth
Quarter
|
5.51
|
5.31
|
0.70
|
0.35
|
6.70
|
6.02
|
|||||||||||||
2007(3)
|
|||||||||||||||||||
Third
Quarter(4)
|
5.60
|
4.30
|
0.80
|
0.53
|
7.15
|
6.38
|
|||||||||||||
Fourth
Quarter
|
5.30
|
4.31
|
0.82
|
0.53
|
6.85
|
5.45
|
|||||||||||||
2008
|
|||||||||||||||||||
First
Quarter
|
5.25
|
4.47
|
0.75
|
0.46
|
6.85
|
5.55
|
|||||||||||||
Second
Quarter
|
5.30
|
4.23
|
0.84
|
0.53
|
6.50
|
5.05
|
|||||||||||||
Third
Quarter
|
5.15
|
2.80
|
0.81
|
0.14
|
6.25
|
3.01
|
(1)
|
Commencing
March 8, 2005
|
(2) |
Commencing
February 25, 2005
|
(3) |
On
February 22, 2007, Avantair changed its fiscal
year
|
(4) |
Commencing
February 22, 2007, date of Reverse
Merger
|
Aircraft
|
7
years
|
Office
equipment and furniture and fixtures
|
5
-
7 years
|
Flight
management software/hardware
|
5
years
|
Vehicles
|
5
years
|
Improvements
|
Lesser
of estimated useful life or the term of the
lease
|
June
30,
|
||||||||||
2007
|
2006
|
2005
|
||||||||
Total
interest costs
|
$
|
3,952,087
|
$
|
2,610,119
|
$
|
1,594,723
|
||||
Less:
amount capitalized
|
545,907
|
500,000
|
400,000
|
|||||||
Interest
expense
|
$
|
3,406,180
|
$
|
2,110,119
|
$
|
1,194,723
|
·
|
an
increase of $5.7 million in maintenance expenses, comprised primarily
of
an increase in parts expense and maintenance insurance coverage due
to an
increase in fleet size and the addition of engine reserves for engines
not
previously included in the insurance
coverage;
|
·
|
an
increase of $5.8 million in fuel prices and flight fees (which includes
landing fees, airport fees and ground transportation fees) borne
by
Avantair for repositioning flights, demonstration flights and pilot
training flights;
|
·
|
an
increase of $5.6 million in pilot expenses , including salaries and
related pilot expenses, hotel expenses, pilot airfare and living
expenses
due to the increase in the fleet size which requires an increase
of four
pilots per aircraft; and
|
·
|
a
decrease of $0.4 million in other aircraft
expenses.
|
·
|
a
price increase in the annual maintenance and management fees from
$7,900
to $8,900; and
|
·
|
an
increase in fleet size.
|
·
|
an
increase of $2.4 million in maintenance expenses, comprised primarily
of
an increase in parts expense and maintenance insurance coverage due
to an
increase in fleet size;
|
·
|
an
increase of $4.1 million in fuel prices and flight fees (which includes
landing fees, airport fees and ground transportation fees) borne
by
Avantair for repositioning flights, demonstration flights and pilot
training flights;
|
·
|
an
increase of $4.9 million in pilot expenses due to hiring an additional
21
pilots, including salaries and related pilot expenses, including
hotel
expenses, pilot airfare and living
expenses;
|
·
|
an
increase of $1.5 million in chartering
expenses;
|
·
|
an
increase of $1.2 million in aircraft leasing expenses;
and
|
·
|
an
increase of $2.4 million in expenses related to fixed based
operations;
|
·
|
an
increase of $0.5 million in legal and accounting salaries and
expenses;
|
·
|
an
increase of $0.8 million in flight center expenses caused by an increase
in salary and purchasing expenses.
|
·
|
an
increase of $0.4 million in pilot
training:
|
·
|
an
increase of $0.3 million in employee benefits:
and
|
·
|
an
increase in share-based compensation of $2.8
million.
|
·
|
an
increase of 19% in the number of fractional aircraft shares sold
in the
fiscal year ended June 30, 2006 from the fiscal year ended June 30,
2005;
|
·
|
two
separate price increases in the maintenance and management fees beginning
in September 2005; and
|
·
|
that
43% of the fiscal year ended June 30, 2005 fractional aircraft sales
occurred in the last four months of the fiscal year ended June 30,
2005
which on an annualized basis had a favorable impact on the fiscal
year
ended June 30, 2006. Other Revenue increased $0.6 million primarily
as a
result of an increase in chartered time card revenue of $0.2 million
and
an increase in demonstration sales fees of $0.4
million.
|
·
|
an
increase of $6.3 million in maintenance expenses, comprised primarily
of
an increase of $4.5 million in parts expense and $1.4 million in
maintenance salary expense, each of which resulted from the increase
in
fleet size and usage;
|
·
|
an
increase of $3.0 million in fuel prices and flight fees (which includes
landing fees, airport fees and ground transportation fees) borne
by
Avantair for repositioning flights, demonstration flights and pilot
training flights;
|
·
|
an
increase of $2.5 million in pilot salary expense due to hiring an
additional 40 pilots;
|
·
|
an
increase of $2.4 million in related pilot expenses, including hotel
expenses, pilot airfare, living expenses and pilot training expenses
due
to hiring an additional 40 pilots and increase in fleet size of 7
planes;
|
·
|
an
increase of $0.9 million in charter expenses;
and
|
·
|
an
increase in $1.4 million in engine insurance expense due to increased
fleet size and usage.
|
·
|
an
increase of $1.5 million in depreciation expense due to the purchase
in
late fiscal 2005 of core aircraft (aircraft used by
Avantair),
|
·
|
an
increase of $2.5 million in wages and benefits due to an increase
in the
number of administrative employees;
|
·
|
$1.0
million in moving costs and related expenses due to the relocation
of
Avantair’s headquarters from New Jersey to
Florida;
|
·
|
an
increase of $0.5 million in rent expense caused by increase in the
number
of facilities, particularly the opening of Avantair’s headquarters in
Clearwater, Florida; and
|
·
|
$0.4
million in consulting fees.
|
·
|
Wells
Fargo Equipment Finance, Inc. Notes:
In
February 2005, the Company entered into financing arrangements for
the
purchase of three aircraft under various notes payable with Wells
Fargo
Equipment Finance, Inc. In January 2008, the Company sold one of
these
aircraft and repaid the outstanding balance on the related note payable.
The notes outstanding at March 31, 2008 in the amount of $3,580,240
are
payable in monthly installments ranging from $10,644 to $38,480 with
interest ranging from 5.96% to 6.12% per annum, through
2012.
|
·
|
Jet
Support Services, Inc. Note: On
April 24, 2006, Avantair financed an aircraft maintenance program
contract
with Jet Support Services, Inc. (“JSSI”) in the amount of $3.4 million.
The promissory note provided for seven monthly installments of $145,867
and 53 monthly installments of $45,867, respectively including interest
at
7% per year. On April 15, 2008, the Company entered into a payment
arrangement with JSSI by means of a $5.6 million promissory note.
The note
matures on April 1, 2011 and bears interest at the rate of
10% per annum, with 35 monthly payments of principal and interest in
an amount of $185,127 beginning on June 2, 2008. The note covers the
balance of the preexisting $3.4 million promissory note as well as
other
costs and fees to be paid by the Company under service agreements
with
JSSI.
|
·
|
CNM,
Inc. Note:
In
August 2007, the Company and CNM, Inc. (“CNM”) executed a new note
agreement which converted an outstanding note obligation of approximately
$7 million into a term loan payable monthly over three years and
bearing
interest at 10% per annum. CNM also assumed a promissory note due to
Wells Fargo Bank for $2,900,000 which was included as part of this
new
note agreement.
|
·
|
Midsouth
Services, Inc. Financing: On
October 3, 2007, the Company entered into a floor plan agreement
with
Midsouth Services, Inc. (“Midsouth”) which provides for up to
approximately $5.1 million of financing for aircraft to be acquired
from
Piaggio America, Inc. through April 2008. On March 3, 2008, the
Company entered into an second floor plan agreement with Midsouth
that
provides for up to $5.3 million of financing for aircraft to be acquired
from Piaggio America, Inc. for the six month period commencing with
the
first delivery of aircraft under the plan. Each agreement requires
a
$75,000 monthly facility fee with payment of any outstanding borrowings
due in full prior to taking delivery of additional aircraft. Midsouth
also
agreed, at the option of the Company, to provide an additional loan
in the
amount of $5.3 million, with terms and conditions of the additional
loan
substantially similar to the terms of the March 2008 loan, upon expiration
of the October 3, 2007 floor plan agreement. Borrowings outstanding
under
these arrangements at March 31, 2008 totaled approximately $5.3
million.
|
·
|
Piaggio
Lease Agreement:
On
October 10, 2007, the Company entered into a five year lease agreement
for
one Piaggio Avanti P-180 aircraft. The aircraft will be used as a
core
aircraft and not fractionalized. The obligation is accounted for
as a
capital lease with lease payments of $89,000 per month. Upon expiration
of
the term, the Company will be required to purchase the aircraft from
the
lessor for $2.3 million.
|
·
|
Additional
Financing Arrangement:
On
October 31, 2007, the Company entered into a financing arrangement
for the
purchase of one used aircraft at a total purchase price of approximately
$4.5 million (inclusive of the value of a charter card of 100 hours).
Financing was obtained from a lending institution through a note
payable
of $3.9 million. This debt will be repaid monthly over 7 years at
an
interest rate of the LIBOR rate plus
4.0%.
|
Obligations
(In
U.S. currency)(1)
|
Long-Term
Debt
Obligations
|
Operating
Leases(2)
|
Aircraft
Purchase
Commitments(3)
|
|||||||
2008
|
$
|
4,412,288
|
$
|
3,604,490
|
$
|
85,244,410
|
||||
2009
|
4,764,610
|
3,616,909
|
71,940,000
|
|||||||
2010
|
5,105,165
|
3,686,345
|
85,340,000
|
|||||||
2011
|
1,526,379
|
3,719,349
|
76,250,000
|
|||||||
2012
|
7,164,416
|
2,508,442
|
25,200,000
|
|||||||
After
2012
|
—
|
22,863,464
|
—
|
|||||||
Total
minimum payment
|
$
|
22,972,858
|
$
|
39,998,999
|
$
|
343,974,410
|
(1)
|
Amounts
shown in table are not necessarily representative of, and may vary
substantially from, amounts that will actually be paid in future
years as
Avantair may incur additional or different obligations subsequent
to the
date of this proxy statement.
|
(2)
|
Includes
hangar, office and auto leases.
|
(3)
|
Includes
purchase commitments for 49 Piaggio aircraft and 20 Embraer
aircraft.
|
Liabilities
|
2008
|
2009
|
2010
|
2011
|
2012
|
Total
|
Fair Value
|
|||||||||||||||
Long-term
Debt:
|
||||||||||||||||||||||
Fixed
Rate ($US)
|
$
|
4,289,563
|
$
|
4,647,510
|
$
|
4,990,565
|
$
|
1,411,780
|
$
|
5,446,777
|
$
|
20,786,195
|
$
|
20,317,290
|
||||||||
Average
interest rate
|
8.9
|
%
|
8.9
|
%
|
8.9
|
%
|
8.9
|
%
|
8.9
|
%
|
8.9
|
%
|
||||||||||
Variable
Rate ($US)
|
$
|
122,725
|
$
|
117,100
|
$
|
114,600
|
$
|
114,600
|
$
|
1,717,640
|
$
|
2,186,665
|
$
|
2,061,759
|
||||||||
Average
interest rate
|
7.3
|
%
|
7.3
|
%
|
7.3
|
%
|
7.3
|
%
|
7.3
|
%
|
7.3
|
%
|
|
o
|
Avantair’s
accounting files for fiscal 2004 were incomplete, which required
significant modifications of accounting data for that
period.
|
|
o
|
Costs
of fractional shares and revenue on certain contracts during the
years
ended June 30, 2006, 2005 and 2004 were not recognized properly due
to
errors made on the electronic worksheets for reporting this
information.
|
|
o
|
The
accounting staff had an inappropriate level of knowledge, which
contributed to errors and deficiencies in financial reporting and
disclosures.
|
|
o
|
hire
additional accounting personnel with the appropriate level of knowledge
to
properly record transactions in the general ledger and prepare financial
statements in accordance with accounting principles generally accepted
in
the United States of America;
|
|
o
|
and
has engaged consultants who are assisting the Company in implementation
of
a new back-office accounting software package which will further
improve
the accounting process and related internal
controls.
|
·
|
price;
|
·
|
availability;
|
·
|
operating
costs;
|
·
|
reliability;
|
·
|
speed;
|
·
|
range;
|
·
|
cabin
size and features;
|
·
|
safety
features and record;
|
·
|
efficiency;
|
·
|
maintenance
cost;
|
·
|
manufacturer;
and
|
·
|
runway
requirements.
|
·
|
Maintenance –
Reduces costs of repair and maintenance by enabling nearly every
member of
Avantair’s maintenance staff to service all of its aircraft, plus reduced
repositioning of an aircraft results in fewer flight hours and therefore
less frequent maintenance;
|
·
|
Pilot
Training
-
Pilots need to be certified for a given aircraft model, therefore
the
operation of a limited number of models means that nearly all employed
pilots are available to operate any aircraft in the fleet.
|
·
|
Inventory—
Fewer parts need to be inventoried which reduces the overall cost
of
inventory. Due to the uniformity of the fleet, Avantair is exposed
to
lower capital investment and inventory due to interchangeability
of parts
and the greater ease of
troubleshooting.
|
·
|
Stand-up
Cabin–
A
stand-up cabin and a private lavatory, which is unique in its
category.
|
·
|
Flying
Capacity–
Ability to fly 1,300 nautical miles with five passengers, luggage
and a
full fuel load.
|
·
|
Speed–
Fastest turboprop manufactured, with jet-like speed of 458
mph.
|
·
|
Runway
capability–
Ability to land on shorter runways allowing access to a greater number
of
airports.
|
·
|
Comfortable
Ride–
Sound dampening interior and rear mounted props, which help deliver
a
quiet ride.
|
·
|
Safety–
Since its introduction in 1989, there has not been a fatal accident
involving a Piaggio Avanti P-180. In addition, the Avanti’s wing design
reduces the effects of turbulence and its de-icing system reduces
the
impact of inclement weather on aircraft
operation.
|
·
|
Owner
Services
|
·
|
Pilot
Services
|
·
|
Flight
Specialist
|
·
|
Flight
Following.
|
·
|
2,500
hours of total flight time;
|
·
|
1,000
multi-engine flight hours; and
|
·
|
250
hours of flight hours within the previous 12
months.
|
·
|
Salesforce
– Customer Relationship Management Sales Force Automation;
and
|
·
|
Corridor
– Enterprise Resource Management Aviation Service Software (Maintenance,
Inventory and FBOs).
|
·
|
100
square feet of office space at 155 Passaic Avenue, Fourth Floor,
Fairfield, New Jersey under a lease that is month to
month;
|
·
|
approximately
65,258 square feet of office and hangar space at 575 Aviation Drive,
Camarillo, California under a lease that expires on August 1, 2021;
and
|
·
|
approximately
125,000 square feet of office and terminal space at 4311 General
Howard
Drive, Clearwater, FL 33762, under a lease that expires April 30,
2020.
|
Barry
J. Gordon
|
62
|
Chairman
of the Board
|
Arthur
H. Goldberg
|
66
|
Director
|
Steven
Santo
|
41
|
Chief
Executive Officer and Director
|
Richard
Pytak
|
46
|
Chief
Financial Officer
|
Kevin
Beitzel
|
39
|
Chief
Operating Officer
|
Kevin
V. McKamey
|
43
|
Executive
Vice President
|
Stephanie
A. Cuskley
|
47
|
Director
|
A.
Clinton Allen
|
64
|
Director
|
Robert
J. Lepofsky
|
63
|
Director
|
Name
|
Fees Earned or Paid in
Cash ($)(1)
|
Option Awards ($)(2)
|
Total ($)
|
|||||||
A. Clinton Allen
|
10,000
|
10,113
|
20,113
|
|||||||
Barry Gordon
|
15,000
|
10,113
|
25,113
|
|||||||
Arthur
Goldberg
|
10,000
|
10,113
|
20,113
|
|||||||
Robert
Lepofsky
|
10,000
|
10,113
|
20,113
|
|||||||
Stephanie
Cuskley
|
15,000
|
10,113
|
20,113
|
(1)
The
fees earned by the directors may be paid, at the director’s option, in
cash and/or in hours flown in Company aircraft at estimated fair
market
value per hour. Messrs. Allen, Goldberg and Lepofsky have chosen
to be
paid in hours flown in company aircraft.
|
||||||||||
(2)
The
amounts shown reflect the dollar amount recognized for financial
statement
reporting purposes for the fiscal year ended June 30, 2007, in
accordance with Statement of Financial Accounting Standards
No. 123(R).
|
Name
and Principal
Position
|
Year
|
Salary ($)
|
Bonus ($)
|
Restricted
Stock Grants
($)(1)
|
All Other
Compensation
($)
|
Total ($)
|
|||||||||||||
Steve
Santo Chief Executive Officer and Director (2)
|
2007
|
$
|
343,750
|
$
|
200,000
|
$
|
16,
190
|
$
|
55,670(3
|
)
|
$
|
615,610
|
|||||||
John
Waters Chief Financial Officer and Director (4)
|
2007
|
195,673
|
150,000
|
12,082
|
22,500(5
|
)
|
380,255
|
||||||||||||
Tracy
L. Chaplin Chief Operating Officer (6)
|
2007
|
180,709
|
53,651
|
8,216
|
—
|
242,576
|
|||||||||||||
Kevin
V. McKamey Executive Vice President
|
2007
|
150,000
|
25,000
|
4,833
|
11,280(7
|
)
|
191,113
|
Name
|
Grant Date
|
All Other Stock Awards Number
of Shares of Stock or Units ($)(1)
|
|||||
Steve
Santo
|
5/18/2007
|
67,000
|
|||||
John
Waters (2)
|
5/18/2007
|
50,000
|
|||||
Tracy
Chaplin (3)
|
5/18/2007
|
34,000
|
|||||
Kevin
McKamey
|
5/18/2007
|
20,000
|
(1)
Awards
of restricted stock granted under the 2006 Long-Term Incentive Plan.
One-third of the shares granted to each executive officer vest on
May 18, 2008, and one-twelfth of the shares vest every three months
thereafter.
(2)
Effective April 11, 2008, Mr. Waters employment ended and in connection
therewith, Mr. Waters forfeited 16,666 of these shares.
(3)
Effective February 7, 2008, Ms. Chaplin’s employment ended and in
connection therewith, these shares were
forfeited.
|
Name
|
Number of Shares or Units of
Stock
That Have Note Vested (#)
|
Market Value of Shares or Units of
Stock
That Have Note Vested ($)(1)
|
|||||
Steven Santo
|
|
|
67,000
|
|
|
345,050
|
|
John Waters
(2)
|
|
|
50,000
|
|
|
257,500
|
|
Tracy Chaplin
(3)
|
|
|
34,000
|
|
|
175,100
|
|
Kevin McKamey
|
|
|
20,000
|
|
|
103,000
|
(1)
Awards of restricted stock granted under the 2006 Long-Term Incentive
Plan. One-third of the share grated to each executive officer vest
on
May 18, 2008, and one-twelfth of the shares vest every three months
thereafter.
(2)
Effective April 11, 2008, Mr. Waters employment ended and in connection
therewith, Mr. Waters forfeited 16,666 of these
shares.
(3)
Effective February 7, 2008, Ms. Chaplin’s employment ended and in
connection therewith, these shares were
forfeited.
|
Name
of Selling Stockholder
|
Number
of Shares Beneficially Owned Prior to Offering
|
Number
of Shares Offered
|
Number
of Shares Beneficially Owned After Offering
|
%
of Common Stock Beneficially Owned After the
Offering
|
|||||||||
Jonathan
Auerbach (1)
|
4,997,148
|
1,941,748
|
3,055,400
|
17.59
|
%
|
||||||||
Paul
Sonkin (2)
|
3,247,481
|
233,010
|
3,014,471
|
18.39
|
%
|
||||||||
Paul
J. Solit (3)
|
2,320,265
|
776,699
|
1,543,566
|
9.86
|
%
|
||||||||
TOTAL
|
10,564,894
|
2,951,457
|
7,613,437
|
45.84
|
%
|
(1)
|
The
business address of Mr. Auerbach is Hound Partners, LLC, 101 Park
Avenue, 48th Floor, New York, NY 10178. The shares are held by Hound
Partners, LP and Hound Partners Offshore Fund, L.P. Mr. Auerbach is
the managing partner of Hound Performance, LLC and Hound Partners,LLC,
investment management firms that serve as the general partner and
investment manager, respectively, to Hound Partner, LP and Hound
Partners
Offshore Fund, LP. Includes 2,150,000 shares of common stock issuable
upon
exercise of warrants and 1,941,748 shares of common stock that may
be
acquired upon the conversion of Series A Convertible Preferred Stock.
|
(2)
|
The
business address of Mr. Sonkin is 460 Park Avenue, 12th Floor, New
York, New York 10022. The shares are held by Hummingbird Value Fund,
L.P.,
The Hummingbird Microcap Value Fund, L.P. and The Hummingbird Concentrated
Fund, L.P. Mr. Sonkin, as managing member and control person of
Hummingbird Management LLC, the investment manager of such entities,
has
sole voting and dispositive power over such shares. Includes 1,173,590
shares of common stock issuable upon exercise of warrants and 233,010
shares of common stock that may be acquired upon the conversion of
12,000
shares of Series A Convertible Preferred
Stock.
|
(3)
|
The
business address of Mr. Solit is Potomac Capital Management, 825
Third Avenue, 33 Floor, New York, NY 10022. Includes 430,000 shares
of
common stock issuable upon exercise of warrants and 776,699 shares
of
common stock that may be acquired upon the conversion of 40,000 shares
of
Series A Convertible Preferred Stock.
|
·
|
each
person who, to our knowledge, beneficially owns more than 5% of the
outstanding shares of the common
stock;
|
·
|
each
of our directors and named executive officers;
and
|
·
|
all
of our executive officers and directors as a
group.
|
Name
and Address of Beneficial
Owner (1)
|
Amount and Nature of
Beneficial
Ownership
|
Percent of Class
|
|||||
Jonathan
Auerbach(2)
|
4,997,148
|
(2)
|
25.9
|
%
|
|||
Steven
Santo(3)
|
1,702,362
|
11.2
|
%
|
||||
Allison
Roberto(4)
|
1,646,650
|
10.8
|
%
|
||||
Paul
Sonkin(5)
|
3,247,481
|
(6)
|
19.5
|
%
|
|||
Jeff
Feinberg(7)
|
1,000,000
|
6.6
|
%
|
||||
Jeffrey
Kirby(8)
|
864,900
|
5.6
|
%
|
||||
Paul
J Solit(9)
|
2,320,265
|
(9)
|
14.1
|
%
|
|||
Seth
Klarman(10)
|
817,000
|
5.4
|
%
|
||||
Fred
B. Barbara(11)
|
756,426
|
5.0
|
%
|
||||
Barry
J. Gordon(12)
|
1,017,066
|
(13)
|
6.5
|
%
|
|||
Richard
Pytak
|
0
|
*
|
|||||
Arthur
H. Goldberg(14)
|
327,832
|
(15)
|
2.1
|
%
|
|||
Stephanie
A. Cuskley(16)
|
13,000
|
(17)
|
*
|
||||
A.
Clinton Allen(18)
|
35,000
|
(19)
|
*
|
||||
Robert
J. Lepofsky(20)
|
23,000
|
(21)
|
*
|
||||
Kevin
McKamey
|
357,445
|
(22)
|
2.3%*
|
||||
Kevin
Beitzel
|
8,842
|
(23)
|
*
|
||||
Gilder,
Gagnon, & Howe & Co. LLC
|
1,095,111
|
7.2
|
%
|
||||
All
directors and executive officers as a group (9
individuals)
|
5,131,197
|
(24)
|
33.8
|
%
|
|||
* |
Less
than 1%.
|
(1) |
Unless
otherwise noted, the business address of each of the following
is c/o
Avantair, 4311 General Howard Drive, Clearwater FL
33762
|
(2) |
The
business address of Mr. Auerbach is Hound Partners, LLC, 101 Park
Avenue, 48th Floor, New York, NY 10178. The shares are held by
Hound
Partners, LP and Hound Partners Offshore Fund, L.P. Mr. Auerbach is
the managing partner of Hound Performance, LLC and Hound Partners,LLC,
investment management firms that serve as the general partner and
investment manager, respectively, to Hound Partner, LP and Hound
Partners
Offshore Fund, LP. Includes 2,150,000 shares of common stock issuable
upon
exercise of warrants and 1,941,748 shares of common stock that
may be
acquired upon the conversion of Series A Convertible Preferred
Stock.
|
(3) |
1,641,650
of the shares are held by Camelot 27 LLC. Each of Steven Santo
and Allison
Roberto are members of Camelot 27 LLC. Includes 60,712 shares of
restricted stock which were granted to Steven Santo individually,
which
one third vested on May 18, 2008 and one twelfth of the shares
vest every
3 months thereafter..
|
(4) |
1,641,650
of the shares are held by Camelot 27 LLC. Each of Steven Santo
and Allison
Roberto are members of Camelot 27 LLC. Includes 5,000 shares of
restricted
stock which were granted to Allison Santo individually which one
third
vested on May 18, 2008 and one twelfth of the shares vest every
3 months
thereafter.
|
(5) |
The
business address of Mr. Sonkin is 460 Park Avenue, 12th Floor, New
York, New York 10022. The shares are held by Hummingbird Value
Fund, L.P.,
The Hummingbird Microcap Value Fund, L.P. and The Hummingbird Concentrated
Fund, L.P. Mr. Sonkin, as managing member and control person of
Hummingbird Management LLC, the investment manager of such entities,
has
sole voting and dispositive power over such shares.
|
(6) |
Includes
1,173,590 shares of common stock issuable upon exercise of warrants
and
233,010 shares of common stock that may be acquired upon the conversion
of
12,000 shares of Series A Convertible Preferred Stock.
|
(7) |
The
business address of Mr. Feinberg is JLF Asset Management, LLC, 2775
Via De La Valle, Suite 204, Del Mar CA 92014.
|
(8) |
The
business address of Mr. Kirby is P.O. Box 70458, Reno, Nevada 89570.
|
(9) |
The
business address of Mr. Solit is Potomac Capital Management, 825
Third Avenue, 33 Floor, New York, NY 10022. Includes 430,000 shares
of
common stock issuable upon exercise of warrants and 776,699 shares
of
common stock that may be acquired upon the conversion of 40,000
shares of
Series A Convertible Preferred Stock.
|
(10) |
The
business address of Mr. Klarman is The Baupost Group, LLC, 10 St.
James Avenue, Suite 2000, Boston, MA 02116.
|
(11) |
The
business address of Mr. Barbara is BHP Partners LLC, 2300 South
Archer Avenue, Chicago, IL 60616.
|
(12) |
The
business address of Mr. Gordon is 7808 Talavera Place, DelRay Beach,
Florida 33446.
|
(13) |
Includes
374,626 shares of common stock issuable upon exercise of warrants.
Includes 10,000 shares of common stock issuable upon exercise of
options
which vested on February 23, 2008. Includes 3,000 shares of
restricted stock which vest one-third upon each of the next 3 successive
annual meetings of stockholders.
|
(14) |
The
business address of Mr. Goldberg is c/o Corporate Solutions Group,
175 Great Neck Road, Suite 404, Great Neck, NY 11021.
|
(15) |
Includes
125,000 shares of common stock issuable upon exercise of warrants.
Includes 10,000 shares of common stock issuable upon exercise of
options
which vested on February 23, 2008. Includes 3,000 shares of
restricted stock which vest one-third upon each of the next 3 successive
annual meetings of stockholders.
|
(16) |
The
business address of Ms. Cuskley is 180 East 79th Street, New York, NY
10021.
|
(17) |
Includes
10,000 shares of common stock issuable upon exercise of options
which
vested on February 23, 2008. Includes 3,000 shares of restricted
stock which vest one-third upon each of the next 3 successive annual
meetings of stockholders.
|
(18) |
The
business address of Mr. Allen is 710 South Street, Needham, MA 02492.
|
(19) |
Includes
10,000 shares of common stock issuable upon exercise of options
which
vested on February 23, 2008. Includes 3,000 shares of restricted
stock which vest one-third upon each of the next 3 successive annual
meetings of stockholders..
|
(20) |
The
business address of Mr. Lepofsky is c/o Westcliff Capital Group, PO
Box 81367, Wellesley Hills, MA 02461.
|
(21) |
Includes
10,000 shares of common stock issuable upon exercise of options
which
vested on February 23, 2008. Includes 3,000 shares of restricted
stock which vest one-third upon each of the next 3 successive annual
meetings of stockholders..
|
(22) |
Includes
20,000 shares of restricted stock granted to Mr. McKamey, which one
third vested on May 18, 2008 and one-twelfth of the shares vest
every 3
months thereafter.
|
(23) |
Represents
shares of restricted stock granted to Mr. Beitzel which one third
vested
on May 18,2008 and one-twelfth of the shares vest every 3 months
thereafter.
|
(24) |
Includes
499,626 shares of common stock issuable upon exercise of warrants.
Includes 94,554 shares of restricted stock. Includes 50,000 shares
of
common stock issuable upon exercise of options.
|
·
|
any
breach of the director’s duty of loyalty to the corporation or its
stockholders;
|
·
|
acts
or omissions not in good faith or which involve intentional misconduct
or
a knowing violation of law;
|
·
|
payments
of unlawful dividends or unlawful stock repurchases or redemptions;
or
|
·
|
any
transaction from which the director derived an improper personal
benefit.
|
·
|
We
will be subject to Section 203 of the Delaware General Corporation
Law
regulating corporate takeovers, which prohibits a Delaware corporation
from engaging in any business combination with an “interested
stockholder,” unless:
|
·
|
prior
to the date of the transaction, the board of directors of the corporation
approved either the business combination or the transaction which
resulted
in the stockholder becoming an interested
stockholder;
|
·
|
the
interested stockholder owned at least 85% of the voting stock of
the
corporation outstanding at the time the transaction commenced, excluding
for purposes of determining the number of shares outstanding (a)
shares
owned by persons who are directors and also officers, and (b) shares
owned
by employee stock plans in which employee participants do not have
the
right to determine confidentially whether shares held subject to
the plan
will be tendered in a tender or exchange offer;
or
|
·
|
on
or subsequent to the date of the transaction, the business combination
is
approved by our board of directors and authorized at an annual or
special
meeting of stockholders, and not by written consent, by the affirmative
vote of at least 66 2/3% of the outstanding voting stock which is
not
owned by the interested
stockholder.
|
·
|
Except
as otherwise specified in Section 203, an “interested stockholder” is
defined to include:
|
·
|
any
person that is the owner of 15% or more of the outstanding voting
securities of the corporation, or is an affiliate or associate of
the
corporation and was the owner of 15% or more of the outstanding voting
stock of the corporation at any time within three years immediately
prior
to the date of determination and
|
·
|
the
affiliates and associates of any such
person.
|
·
|
provide
for the automatic reduction in voting power of voting stock owned
or
controlled by a non-U.S. citizen if necessary to maintain Avantair’s U.S.
citizenship (as defined below);
|
·
|
permit
our Board of Directors to otherwise limit transfer and voting rights
or
redeem shares to the extent necessary to maintain Avantair’s U.S.
citizenship; and
|
·
|
permit
our Board of Directors to make such determinations as may reasonably
be
necessary to ascertain such ownership and implement such
limitations.
|
·
|
an
individual who is a citizen of the United
States;
|
·
|
a
partnership each of whose partners is an individual who is a citizen
of
the United States; or
|
·
|
a
corporation or association organized under the laws of the United
States
or a State, the District of Columbia, or a territory or possession
of the
United States, of which the president and at least two-thirds of
the board
of directors and other managing officers are citizens of the United
States, which is under the actual control of citizens of the United
States, and in which at least 75% of the voting interest is owned
or
controlled by persons that are citizens of the United
States.
|
·
|
no
action can be taken by stockholders except at an annual or special
meeting
of the stockholders called in accordance with our bylaws, and stockholders
may not act by written consent;
|
·
|
the
approval of holders of two-thirds of the shares entitled to vote
at an
election of directors will be required to adopt, amend or repeal
our
bylaws or amend or repeal the provisions of our certificate of
incorporation regarding the election and removal of directors, the
ability
of stockholders to take action and the indemnification of our
directors;
|
·
|
our
board of directors will be expressly authorized to make, alter or
repeal
our bylaws;
|
·
|
our
board of directors will be authorized to issue preferred stock without
stockholder approval; and
|
·
|
we
will indemnify officers and directors against losses that may incur
in
connection with investigations and legal proceedings resulting from
their
services to us, which may include services in connection with takeover
defense measures.
|
·
|
one
percent of the number of shares of common stock then outstanding;
or
|
·
|
the
average weekly trading volume of the common stock on Nasdaq during
the
four calendar weeks preceding the filing of a notice on Form 144
with
respect to the sale of any shares of common
stock.
|
·
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
·
|
one
or more block trades in which the broker-dealer will attempt to sell
the
shares as agent but may position and resell a portion of the block
as
principal to facilitate the
transaction;
|
·
|
purchases
by a broker-dealer as principal and resale by the broker-dealer for
its
account;
|
·
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
·
|
public
or privately negotiated
transactions;
|
·
|
on
the Over-the-Counter Bulletin Board (or through the facilities of
any
national securities exchange or U.S. inter-dealer quotation system
of a
registered national securities association, on which the shares are
then
listed, admitted to unlisted trading privileges or included for
quotation);
|
·
|
through
underwriters, brokers or dealers (who may act as agents or principals)
or
directly to one or more purchasers;
|
·
|
a
combination of any such methods of sale;
and
|
·
|
any
other method permitted pursuant to applicable
law.
|
·
|
enter into
hedging transactions with broker-dealers or other financial institutions,
which may in turn engage in short sales of the shares in the course
of
hedging the positions they assume;
|
·
|
sell
the shares short and redeliver the shares to close out such short
positions;
|
·
|
enter
into option or other transactions with broker-dealers or other financial
institutions which require the delivery to them of shares offered
by this
prospectus, which they may in turn resell;
and
|
·
|
pledge
shares to a broker-dealer or other financial institution, which,
upon a
default, they may in turn resell.
|
·
|
inspect
a copy of the Registration Statement, including the exhibits and
schedules, without charge at the public reference
room,
|
·
|
obtain
a copy from the SEC upon payment of the fees prescribed by the SEC,
or
|
·
|
obtain
a copy from the SEC web site.
|
Report
of Independent Registered Public Accounting Firm
|
F-2
|
|||
Consolidated
Balance Sheets as of June 30, 2007 and 2006
|
F-3
|
|||
Consolidated
Statements of Operations for the years ended June 30, 2007, 2006
and
2005
|
F-5
|
|||
Consolidated
Statement of Changes in Stockholders’ Deficit for the years ended June 30,
2007, 2006 and 2005
|
F-6
|
|||
Consolidated
Statements of Cash Flows for the years ended June 30, 2007, 2006
and
2005
|
F-7
|
|||
Notes
to Consolidated Financial Statements
|
F-8
|
|||
Condensed
Consolidated Balance Sheets as of March 31, 2008 and June 30,
2007
|
F-29
|
|||
Condensed
Consolidated Statements of Operations for the three months ended
March 31,
2008 and 2007 and for the nine months ended March 31, 2008 and
2007
|
F-31
|
|||
Condensed
Consolidated Statements of Changes in Stockholders’ Deficit for the
nine months ended March 31, 2008
|
F-32
|
|||
Condensed
Consolidated Statements of Cash Flows for the three months ended
March 31,
2008 and 2007 and for the nine months ended March 31, 2008 and
2007
|
F-33
|
|||
Notes
to Condensed Consolidated Financial Statements
|
F-35
|
June 30,
|
|||||||
2007
|
2006
|
||||||
ASSETS
|
|||||||
CURRENT
ASSETS
|
|||||||
Cash
and cash equivalents
|
$
|
12,577,468
|
$
|
2,175,734
|
|||
Accounts
receivable, net
|
5,087,491
|
2,792,276
|
|||||
Inventory
|
579,517
|
253,533
|
|||||
Property
held for sale
|
—
|
7,870,300
|
|||||
Current
portion of aircraft costs related to fractional sales
|
31,895,085
|
21,203,413
|
|||||
Current
portion of notes receivable
|
1,015,163
|
1,672,481
|
|||||
Prepaid
expenses and other current assets
|
378,394
|
80,419
|
|||||
Total
current assets
|
51,533,118
|
36,048,156
|
|||||
AIRCRAFT
COSTS RELATED TO FRACTIONAL SALES –
net of current portion
|
74,870,704
|
43,251,783
|
|||||
PROPERTY
AND EQUIPMENT, NET
|
15,380,698
|
4,835,743
|
|||||
OTHER
ASSETS
|
|||||||
Restricted
cash
|
2,942,983
|
—
|
|||||
Deposits
|
9,904,054
|
13,431,683
|
|||||
Deferred
maintenance agreement
|
2,691,539
|
3,329,500
|
|||||
Notes
receivable – net of current portion
|
1,327,552
|
2,921,163
|
|||||
Goodwill
|
1,141,159
|
1,141,159
|
|||||
Other
assets
|
698,453
|
195,496
|
|||||
Total
other assets
|
18,705,740
|
21,019,001
|
|||||
Total
assets
|
$
|
160,490,260
|
$
|
105,154,683
|
2007
|
2006
|
||||||
CURRENT
LIABILITIES
|
|||||||
Accounts
payable
|
$
|
5,765,189
|
$
|
9,452,291
|
|||
Accrued
liabilities
|
3,141,061
|
1,947,338
|
|||||
Borrowings
under line of credit from a related party
|
—
|
22,317,079
|
|||||
Customer
deposits
|
612,500
|
580,989
|
|||||
Current
portion of deferred revenue related to fractional aircraft share
sales
|
38,058,547
|
25,205,020
|
|||||
Current
portion of notes payable
|
4,412,288
|
4,400,293
|
|||||
Unearned
management fee and charter card revenues
|
7,950,636
|
3,437,615
|
|||||
Total
current liabilities
|
59,940,221
|
67,340,625
|
|||||
Notes
payable, net of current portion
|
18,560,570
|
6,550,138
|
|||||
Deferred
revenue related to fractional aircraft share sales, net of current
portion
|
92,186,334
|
64,993,095
|
|||||
Other
liabilities
|
1,762,159
|
1,301,432
|
|||||
Total
long-term liabilities
|
112,509,063
|
72,844,665
|
|||||
Total
liabilities
|
172,449,284
|
140,185,290
|
|||||
COMMITMENTS
AND CONTINGENCIES
|
|||||||
STOCKHOLDERS’
DEFICIT
|
|||||||
Preferred
stock, $.0001 par value, Authorized 1,000,000 shares; none
issued
|
—
|
—
|
|||||
Common
stock, Class A, $.0001 par value, 75,000,000 shares authorized, 15,220,817
and 3,288,500 shares issued and outstanding
|
1,522
|
329
|
|||||
Common
stock, Class B, non-voting, $10 par value, 1,250 shares authorized,
0 and
100 shares issued and outstanding
|
—
|
1,000
|
|||||
Additional
paid-in capital
|
46,124,857
|
671
|
|||||
Accumulated
deficit
|
(56,198,527
|
)
|
(34,498,621
|
)
|
|||
Due
from stockholder
|
—
|
(533,986
|
)
|
||||
Treasury
stock, at cost
|
(1,886,876
|
)
|
—
|
||||
Total
stockholders’ deficit
|
(11,959,024
|
)
|
(35,030,607
|
)
|
|||
Total
liabilities and stockholders’ deficit
|
$
|
160,490,260
|
$
|
105,154,683
|
2007
|
2006
|
2005
|
||||||||
Revenues
|
||||||||||
Fractional
aircraft shares sold
|
$
|
29,695,175
|
$
|
23,756,070
|
$
|
10,580,859
|
||||
Maintenance
and management fees
|
38,787,596
|
22,824,940
|
11,645,999
|
|||||||
Demonstration
and charter card revenues
|
7,910,461
|
1,814,370
|
1,167,520
|
|||||||
Total
revenue
|
76,393,232
|
48,395,380
|
23,394,378
|
|||||||
Operating
expenses
|
||||||||||
Cost
of fractional aircraft shares sold
|
24,370,988
|
19,166,722
|
9,318,013
|
|||||||
Cost
of flight operations
|
35,665,057
|
25,362,985
|
10,157,566
|
|||||||
Write-off
of aircraft deposit
|
300,000
|
—
|
—
|
|||||||
Cost of fuel | 10,192,406 | 6,419,835 | 4,226,802 | |||||||
General
and administrative expenses (including share-based compensation
expense of
$2,784,592 in 2007 and $0 in 2006 and 2005)
|
20,554,140
|
13,406,376
|
6,885,229
|
|||||||
Selling
expenses
|
4,333,268
|
3,672,754
|
976,164
|
|||||||
Total
operating expenses
|
95,415,859
|
68,028,672
|
31,563,774
|
|||||||
Loss
from operations
|
(19,022,627
|
)
|
(19,633,292
|
)
|
(8,169,396
|
)
|
||||
Other
income (expenses)
|
||||||||||
Interest
income
|
444,179
|
557,508
|
490,591
|
|||||||
Interest
expense
|
(3,406,181
|
)
|
(2,110,119
|
)
|
(1,194,723
|
)
|
||||
Other
income, net
|
284,723
|
437,982
|
167,329
|
|||||||
Total
other expenses
|
(2,677,279
|
)
|
(1,114,629
|
)
|
(536,803
|
)
|
||||
Net
loss
|
$
|
(21,699,906)
|
$
|
(20,747,921
|
)
|
$
|
(8,706,199
|
)
|
||
Loss
per common share:
|
||||||||||
Basic
and diluted
|
$
|
(2.47
|
)
|
$
|
(6.31
|
)
|
$
|
(2.65
|
)
|
|
Weighted-average
common shares outstanding:
|
||||||||||
Basic
and diluted
|
8,780,234
|
3,288,590
|
3,288,590
|
CLASS A
COMMON STOCK
|
|
CLASS B
COMMON
STOCK
|
PAID-IN
|
DUE
FROM
|
ACCUMULATED
|
TREASURY
|
TOTAL
STOCKHOLDERS’
|
|||||||||||||||||||||
SHARES
|
AMOUNT
|
SHARES
|
AMOUNT
|
CAPITAL
|
STOCKHOLDER
|
DEFICIT
|
STOCK
|
DEFICIT
|
||||||||||||||||||||
Balance,
July 1, 2004
|
3,288,590
|
$
|
329
|
100
|
$
|
1,000
|
$
|
671
|
$
|
—
|
$
|
(5,044,501
|
)
|
$
|
—
|
$
|
(5,042,501
|
)
|
||||||||||
Net
loss
|
—
|
—
|
—
|
—
|
—
|
—
|
(8,706,199
|
)
|
—
|
$
|
(8,706,199
|
)
|
||||||||||||||||
Balance,
June
30, 2005
|
3,288,590
|
329
|
100
|
1,000
|
671
|
—
|
(13,750,700
|
)
|
—
|
$
|
(13,748,700
|
)
|
||||||||||||||||
Advances
to stockholder
|
—
|
—
|
—
|
—
|
—
|
(533,986
|
)
|
—
|
—
|
(533,986
|
)
|
|||||||||||||||||
Net
loss
|
—
|
—
|
—
|
—
|
—
|
—
|
(20,747,921
|
)
|
—
|
(20,747,921
|
)
|
|||||||||||||||||
Balance,
June
30, 2006
|
3,288,590
|
329
|
100
|
1,000
|
671
|
(533,986
|
)
|
(34,498,621
|
)
|
—
|
(35,030,607
|
)
|
||||||||||||||||
Advances
to stockholder
|
—
|
—
|
—
|
—
|
—
|
(118,339
|
)
|
—
|
—
|
(118,339
|
)
|
|||||||||||||||||
Reclassification
of stockholder advances to treasury stock
|
(178,471
|
)
|
(18
|
)
|
—
|
—
|
—
|
652,325
|
(652,307
|
)
|
—
|
|||||||||||||||||
Redemption
of Class A common stock
|
(136,707
|
)
|
(14
|
)
|
—
|
—
|
—
|
—
|
(499,986
|
)
|
(500,000
|
)
|
||||||||||||||||
Redemption
of Class B shareholders
|
—
|
—
|
(100
|
)
|
(1,000
|
)
|
—
|
—
|
(734,583
|
)
|
(735,583
|
)
|
||||||||||||||||
Sale
of common stock at 2.78 per share, net of $450,000 of
costs
|
3,237,410
|
324
|
—
|
—
|
8,549,676
|
—
|
—
|
—
|
8,550,000
|
|||||||||||||||||||
Issuance
of shares to members of management at fair value of $5.36 per
share
|
474,000
|
47
|
—
|
—
|
2,542,353
|
—
|
—
|
—
|
2,542,400
|
|||||||||||||||||||
Shares
outstanding upon consummation of reverse merger
|
8,400,000
|
840
|
—
|
—
|
34,014,961
|
—
|
—
|
—
|
34,015,801
|
|||||||||||||||||||
Stock
redemption in connection with reverse merger
|
(64,550
|
)
|
(6
|
)
|
—
|
—
|
(362,126
|
)
|
—
|
—
|
—
|
(362,132
|
)
|
|||||||||||||||
Issuance
of shares to financial advisor in connection with reverse
merger
|
200,545
|
20
|
—
|
—
|
1,070,890
|
—
|
—
|
—
|
1,070,910
|
|||||||||||||||||||
Issuance
of warrants to financial advisor in connection with reverse
merger
|
—
|
—
|
—
|
—
|
64,240
|
—
|
—
|
—
|
64,240
|
|||||||||||||||||||
Issuance
of warrants at fair value of $0.77
|
—
|
—
|
—
|
—
|
156,000
|
—
|
—
|
—
|
156,000
|
|||||||||||||||||||
Issuance
of 150,000 stock options to non-employee directors.
|
—
|
—
|
—
|
—
|
44,946
|
—
|
—
|
—
|
44,946
|
|||||||||||||||||||
Issuance
of restricted stock grants to employee executives and
managers
|
—
|
—
|
—
|
—
|
43,246
|
—
|
—
|
—
|
43,246
|
|||||||||||||||||||
Net
loss
|
(21,699,906
|
)
|
(21,699,906
|
)
|
||||||||||||||||||||||||
Balance
at June
30, 2007
|
15,220,817
|
$
|
1,522
|
—
|
—
|
$
|
46,124,857
|
$
|
$(56,198,527
|
)
|
(1,886,876
|
)
|
$
|
(11,959,024
|
)
|
2007
|
2006
|
2005
|
||||||||
OPERATING
ACTIVITIES:
|
||||||||||
Net
loss
|
$
|
(21,699,906
|
)
|
$
|
(20,747,921
|
)
|
$
|
(8,706,199
|
)
|
|
Adjustments
to reconcile net loss to net cash provided by (used in) operating
activities:
|
||||||||||
Depreciation
and amortization
|
2,013,530
|
2,649,096
|
1,932,757
|
|||||||
Gain
on sale of assets
|
—
|
(207,544
|
)
|
—
|
||||||
Fair
value of warrants issued to officer
|
154,000
|
—
|
—
|
|||||||
Fair
value of stock issued to officers
|
2,542,400
|
—
|
—
|
|||||||
Fair
value of stock options issued
|
88,192
|
—
|
—
|
|||||||
Provision
for bad debts
|
—
|
200,000
|
200,000
|
|||||||
Changes
in operating assets and liabilities
|
||||||||||
Accounts
receivable
|
(2,518,189
|
)
|
(180,572
|
)
|
(2,136,033
|
)
|
||||
Accounts
receivable from vendor
|
222,974
|
(468,089
|
)
|
(388,686
|
)
|
|||||
Inventory
|
(325,984
|
)
|
1,911,853
|
8,020,487
|
||||||
Deposits
and other assets
|
2,919,969
|
(4,304,605
|
)
|
(271,078
|
)
|
|||||
Deferred
maintenance agreement
|
637,961
|
(3,329,500
|
)
|
—
|
||||||
Prepaid
expenses and other current assets
|
(297,975
|
)
|
43,376
|
(161,646
|
)
|
|||||
Note
and lease payments receivable
|
2,250,929
|
5,473,288
|
(4,725,253
|
)
|
||||||
Aircraft
costs related to fractional shares
|
(42,310,593
|
)
|
(13,890,428
|
)
|
(29,866,783
|
)
|
||||
Other
assets
|
(502,957
|
)
|
54,478
|
(224,750
|
)
|
|||||
Accounts
payable
|
(3,687,102
|
)
|
6,827,457
|
1,625,878
|
||||||
Accrued
liabilities
|
1,193,723
|
187,983
|
152,319
|
|||||||
Deferred
maintenance and management fees
|
4,513,021
|
(595,306
|
)
|
4,032,921
|
||||||
Restricted
cash
|
(2,942,983
|
)
|
—
|
—
|
||||||
Customer
deposits
|
31,511
|
(816,711
|
)
|
(74,800
|
)
|
|||||
Other
liabilities
|
661,444
|
251,811
|
45,241
|
|||||||
Deferred
gain on sale and leaseback of asset
|
(200,788
|
)
|
1,003,946
|
—
|
||||||
Deferred
revenue related to fractional aircraft share sales
|
40,046,766
|
29,568,930
|
35,862,142
|
|||||||
Net
cash provided by (used in) provided by operating
activities
|
(17,210,057
|
)
|
3,631,542
|
5,316,517
|
||||||
INVESTING
ACTIVITIES:
|
||||||||||
Proceeds
from sale of property and equipment
|
4,200,000
|
3,207,625
|
—
|
|||||||
Capital
expenditures
|
(1,654,951
|
)
|
(2,507,085
|
)
|
(12,117,319
|
)
|
||||
Net
cash provided by (used in) investing activities
|
2,545,049
|
700,540
|
(12,117,319
|
)
|
||||||
FINANCING
ACTIVITIES:
|
||||||||||
Borrowings
under long-term notes payable
|
11,312,277
|
3,272,000
|
6,148,576
|
|||||||
Borrowings
under line of credit
|
7,581,365
|
7,019,591
|
32,235,792
|
|||||||
Principal
payments on long-term notes payable
|
(12,965,653
|
)
|
(5,335,698
|
)
|
(6,395,768
|
)
|
||||
Principal
payments on line of credit
|
(22,848,144
|
)
|
(8,588,034
|
)
|
(23,844,262
|
)
|
||||
Proceeds
from issuance of stock
|
8,550,000
|
—
|
—
|
|||||||
Cost
of stock redemption
|
(362,132
|
)
|
—
|
—
|
||||||
Proceeds
from consummation of reverse merger
|
35,150,951
|
—
|
—
|
|||||||
Proceeds
from issuance of warrants to officer
|
2,000
|
—
|
—
|
|||||||
Advances
to stockholder
|
(118,339
|
)
|
(533,986
|
)
|
—
|
|||||
Cost
of treasury shares
|
(1,235,583
|
)
|
—
|
—
|
||||||
Net
cash provided by (used in) financing activities
|
25,066,742
|
(4,166,127
|
)
|
8,144,338
|
||||||
Net
increase in cash and cash equivalents
|
10,401,734
|
165,955
|
1,343,536
|
Cash
and cash equivalents, beginning of the year
|
2,175,734
|
2,009,779
|
666,243
|
|||||||
Cash
and cash equivalents, end of the year
|
$
|
12,577,468
|
$
|
2,175,734
|
$
|
2,009,779
|
||||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
||||||||||
Interest
paid (net of amounts capitalized)
|
$
|
3,610,172
|
$
|
2,120,658
|
$
|
1,082,224
|
||||
SUPPLEMENTAL DISCLOSURE
OF NON-CASH
FINANCING ACTIVITIES
|
||||||||||
Issuance
of shares in connection with reverse merger
|
$
|
1,070,910
|
$
|
—
|
$
|
—
|
||||
Issuance
of warrants in connection with reverse merger
|
$
|
64,240
|
—
|
—
|
||||||
Reclassification
of stockholder advances to treasury stock
|
$
|
652,325
|
$
|
—
|
$
|
—
|
||||
Asset
acquired under capital lease
|
$
|
4,392,163
|
$
|
—
|
$
|
—
|
||||
Deferred
gain on sale and leaseback of asset
|
$
|
860,714
|
$
|
—
|
$
|
—
|
||||
Conversion
of short-term borrow-ings to long-term notes payable
|
7,050,300
|
—
|
—
|
|||||||
Note
payable for purchase of core aircraft net of deposit
|
$
|
2,233,340
|
$
|
—
|
$
|
—
|
·
|
At
the end of the fiscal year ending June 30, 2007, if Cash Earnings
Before
Interest Taxes Depreciation and Amortization (EBITDA) (EBITDA + non
cash
expenses) is greater than $6,000,000 for the fiscal year ending June
30,
2007, the Company will issue an aggregate of 954,975 shares of its
common
stock to Old Avantair stockholders. The Company’s results did not meet the
requirement for the year ended June 30, 2007 and therefore these
shares
were not issued.
|
·
|
At
the end of the fiscal year ending June 30, 2008, the Company will
calculate (based on its annual audited consolidated financial statements
for such fiscal year) Cash EBITDA. If Cash EBITDA is greater than
$20,000,000 for the fiscal year ending June 30, 2008, the Company
will
issue an aggregate of 4,774,873 shares of its common stock to Old
Avantair
stockholders.
|
·
|
If
at any time prior to February 23, 2009, the closing trading price
on the
Over-the-Counter Bulletin Board (or on a national securities market
on
which the Company’s common stock is then quoted for trading) of the
Company’s common stock for 20 trading days within any 30 trading day
period equals or exceeds $8.50 per share, then the Company will issue
an
additional aggregate of 4,774,873 shares of its common stock to Old
Avantair stockholders.
|
June 30,
|
||||||||||
2007
|
2006
|
2005
|
||||||||
Beginning
balance
|
$
|
600,000
|
$
|
400,000
|
$
|
200,000
|
||||
Bad
debt expense
|
200,000
|
200,000
|
||||||||
Write-offs
|
(139,623
|
)
|
||||||||
Ending
balance
|
$
|
460,377
|
$
|
600,000
|
$
|
400,000
|
·
|
Market
prices. The Company had entered into negotiations in April 2006 for
a
transaction with Ardent Acquisition Corporation which placed the
fair
value of the Company at approximately $59 million (11 million shares
x
$5.40 per share based on the quoted market price of Ardent’s common stock
during April 2006). The $59 million fair value of the Company was
in
excess of the Company’s book value of approximately $(36) million at June
30, 2006. At June 30, 2007 the quoted market for Avantair’s common stock
was $5.15 a share with 15,220,817 shares outstanding giving the Company
a
total market capitalization of approximately $78
million.
|
·
|
Cash
flow projections. Certain key assumptions used in preparing the cash
flow
projections, included:
|
·
|
The
overall basis for management’s cash flow assumptions and conclusions are
based on the fact that the Company’s revenue is contractual and therefore
management can predict future management fee revenues with some certainty.
The model is based on the premise that for every plane sold the Company
will increase management fees by an agreed upon amount per plane.
When the
Company gets to a certain aircraft fleet size, the management fee
income
will then exceed all fixed and variable
costs.
|
·
|
The
Company has a commitment from its aircraft manufacturer for the delivery
of 15 planes in the next 12 months and management believes it will
fully
sell the fractional shares with respect to those planes prior to
or
contemporaneous with the receipt of the planes which would produce
a cash
flow improvement.
|
Aircraft
|
7 years
|
|||
Office
equipment and furniture and fixtures
|
5 - 7 years
|
|||
Flight
management software/hardware
|
5 years
|
|||
Vehicles
|
5 years
|
|||
Improvements
|
Lesser of estimated useful life or
the term of the lease
|
2007
|
2006
|
2005
|
||||||||
Total
interest costs
|
$
|
3,952,087
|
$
|
2,610,119
|
$
|
1,594,723
|
||||
Less:
amount capitalized
|
545,907
|
500,000
|
400,000
|
|||||||
Interest
expense
|
$
|
3,406,180
|
$
|
2,110,119
|
$
|
1,194,723
|
2007
|
2006
|
||||||
Aircraft
|
$
|
16,824,050
|
$
|
3,513,003
|
|||
Leasehold
improvements
|
2,267,451
|
1,442,873
|
|||||
Furniture,
fixtures and equipment
|
1,357,037
|
1,036,358
|
|||||
Flight
management software/hardware
|
541,649
|
349,266
|
|||||
Vehicles
|
44,817
|
44,071
|
|||||
Total
|
21,035,004
|
6,385,571
|
|||||
Less:
accumulated depreciation and amortization
|
(5,654,306
|
)
|
(1,549,828
|
)
|
|||
$
|
15,380,698
|
$
|
4,835,743
|
2007
|
2006
|
2005
|
||||||||
Income
tax benefit at statutory rate
|
$
|
8,194,626
|
$
|
7,261,774
|
$
|
2,960,108
|
||||
State
taxes, net of Federal benefit
|
648,484
|
622,438
|
—
|
|||||||
Increase
in valuation allowance
|
(8,843,110
|
)
|
(7,884,212
|
)
|
(2,960,108
|
)
|
||||
Total
|
$
|
—
|
$
|
—
|
$
|
—
|
2007
|
2006
|
||||||
Deferred
tax liability
|
|||||||
Goodwill
|
$
|
(115,637
|
)
|
$
|
(107,484
|
)
|
|
Depreciation
|
(826,738
|
)
|
(1,187,940
|
)
|
|||
(942,375
|
)
|
(1,295,424
|
)
|
||||
Deferred
tax assets
|
|||||||
Deferred
revenues, net of amortized aircraft costs related to fractional share
sales
|
6,579,939
|
9,508,882
|
|||||
Other
|
572,876
|
323,217
|
|||||
Net
operating loss carryforwards
|
15,863,155
|
4,693,810
|
|||||
23,015,970
|
14,525,909
|
||||||
Less
valuation allowance
|
(22,073,595
|
)
|
(13,230,485
|
)
|
|||
942,375
|
1,295,424
|
||||||
Net
deferred tax assets
|
$
|
—
|
$
|
—
|
June 30,
|
||||||||||
2007
|
2006
|
2005
|
||||||||
Beginning
balance
|
$
|
13,230,485
|
$
|
5,346,273
|
$
|
2,386,165
|
||||
Increase
in valuation allowance
|
8,843,110
|
7,884,212
|
2,960,108
|
|||||||
Ending
balance
|
$
|
22,073,595
|
$
|
13,230,485
|
$
|
5,346,273
|
Year
Ended June 30,
|
||||
2008
|
$
|
3,604,490
|
||
2009
|
3,616,909
|
|||
2010
|
3,686,345
|
|||
2011
|
3,719,349
|
|||
2012
|
2,508,442
|
|||
Thereafter
|
22,863,464
|
|||
$
|
39,998,999
|
2008
|
$
|
474,000
|
||
2009
|
474,000
|
|||
2010
|
474,000
|
|||
2011
|
474,000
|
|||
2012
|
4,279,000
|
|||
Total
minimum payments
|
6,175,000
|
|||
Less
amount representing interest
|
1,791,122
|
|||
Present
value of minimum lease payments
|
$
|
4,383,878
|
2007
|
2006
|
||||||
Wells
Fargo Equipment Finance, Inc.
|
$
|
7,267,244
|
$
|
7,593,212
|
|||
CNM,
Inc.
|
7,101,969
|
—
|
|||||
Jet
Support Services, Inc.
|
2,043,727
|
3,145,219
|
|||||
Bank
of America
|
2,176,040
|
—
|
|||||
JMMS,
Inc.
|
4,383,878
|
—
|
|||||
Other
|
—
|
212,000
|
|||||
22,972,858
|
10,950,431
|
||||||
Less
current portion
|
(4,412,288
|
)
|
(4,400,293
|
)
|
|||
Long-term
debt
|
$
|
18,560,570
|
$
|
6,550,138
|
Year
Ended June 30,
|
||||
2008
|
$
|
4,412,288
|
||
2009
|
4,764,610
|
|||
2010
|
5,105,165
|
|||
2011
|
1,526,379
|
|||
2012
|
7,164,416
|
|||
$
|
22,972,858
|
Shares
|
Weighted Average
Exercise Price
|
Weighted Average
Fair Value
|
||||||||
Options
Outstanding July 1, 2006
|
—
|
$
|
—
|
$
|
—
|
|||||
Granted
|
150,000
|
5.34
|
3.23
|
|||||||
Exercised
|
—
|
—
|
—
|
|||||||
Forfeited
and Expired
|
||||||||||
Options
Outstanding, June 30, 2007
|
150,000
|
$
|
5.34
|
$
|
3.23
|
|||||
Exercisable,
June 30, 2007
|
—
|
—
|
—
|
Stock
Options Outstanding
|
Stock
Options Exercisable
|
|||||||||||||||||||||||||
Exercise
Price
$
|
Shares
|
Weighted
Average
Remaining
Contractual
Value
Life
(Years)
|
Weighted
Average
Exercise
Price
|
Aggregate
Intrinsic
Value
|
Shares
|
Weighted
Average
Remaining
Contractual
Life
(Years)
|
Weighted
Average
Exercise
Price
|
Aggregate
Intrinsic
Value
|
||||||||||||||||||
$ |
5.34
|
150,000
|
9.66
|
$
|
5.34
|
—
|
—
|
—
|
$
|
—
|
$
|
—
|
||||||||||||||
Total
|
150,000
|
Year ended June 30,
2007
|
||||
Dividend
yield
|
0.00
|
%
|
||
Expected
volatility
|
60.68
|
%
|
||
Risk-free
rate
|
4.67
|
%
|
||
Expected
life of options
|
6
years
|
Restricted
Stock
|
Weighted
Average
Fair Value
|
||||||
Balance
at June 30, 2006
|
—
|
$ —
|
|||||
Issued
|
214,000
|
4.90
|
|||||
Forfeited/cancelled
|
—
|
—
|
|||||
Balance
at June 30, 2007
|
214,000
|
||||||
Vested
|
—
|
Warrants
|
Exercise Price
|
Expiration
|
||||||||
Balance
July 1, 2006
|
—
|
—
|
—
|
|||||||
Warrants
assumed in connection with Acquisition
|
13,800,000
|
$
|
5.00
|
2/23/2009
|
||||||
Warrants
issued to financial advisor in connection with Acquisition
|
146,000
|
$
|
5.00
|
2/22/2011
|
||||||
Warrants
issued to officer
|
200,000
|
$
|
5.00
|
2/22/2012
|
||||||
Total
June 30, 2007
|
14,146,000
|
Three Months Ended
|
|||||||||||||
June 30,
2007
|
March 31,
2007
|
December 31,
2006
|
September 30,
2006
|
||||||||||
Revenues
|
$
|
21,842,402
|
$
|
19,873,191
|
$
|
18,052,222
|
$
|
16,625,417
|
|||||
Net
loss
|
(3,877,476 | ) |
(7,448,952
|
)
|
(6,595,121
|
)
|
(3,778,357
|
)
|
|||||
Loss
per common share, basic and diluted
|
$
|
(0.25
|
)
|
$
|
(0.72
|
)
|
$
|
(1.02
|
)
|
$
|
(1.15
|
)
|
Three Months Ended
|
|||||||||||||
June 30,
2006
|
March 31,
2006
|
December 31,
2005
|
September 30,
2005
|
||||||||||
Revenue
|
$
|
13,867,365
|
$
|
11,843,039
|
$
|
9,710,851
|
$
|
12,974,125
|
|||||
Net
loss
|
(7,182,767 | ) |
(7,374,255
|
)
|
(4,604,956
|
)
|
(1,585,943
|
)
|
|||||
Loss
per common share, basic and diluted
|
$
|
(2.18
|
)
|
$
|
(2.24
|
)
|
$
|
(1.40
|
)
|
$
|
(0.48
|
)
|
March 31, 2008
|
June 30, 2007
|
||||||
(unaudited)
|
(Notes 2 and 6)
|
||||||
CURRENT
ASSETS
|
|||||||
Cash
and cash equivalents
|
$
|
4,437,644
|
$
|
12,577,468
|
|||
Accounts
receivable, net of allowance for doubtful accounts of $199,979 at
March
31, 2008 and $460,377 at June 30, 2007
|
5,594,532
|
5,087,491
|
|||||
Inventory
|
609,622
|
579,517
|
|||||
Current
portion of aircraft costs related to fractional sales
|
38,436,412
|
31,895,085
|
|||||
Current
portion of notes receivable
|
820,351
|
1,015,163
|
|||||
Prepaid
expenses and other current assets
|
1,809,197
|
378,394
|
|||||
Total
current assets
|
51,707,758
|
51,533,118
|
|||||
AIRCRAFT
COSTS RELATED TO FRACTIONAL SHARE SALES - net of current
portion
|
92,867,381
|
74,870,704
|
|||||
PROPERTY
AND EQUIPMENT,
at cost, net of accumulated depreciation and amortization of $7,894,364
at
March 31, 2008 and $5,654,306 at June 30, 2007
|
24,672,578
|
15,380,698
|
|||||
OTHER
ASSETS
|
|||||||
Cash
- restricted
|
2,817,829
|
2,942,983
|
|||||
Deposits
|
12,465,110
|
9,904,054
|
|||||
Deferred
maintenance agreement
|
2,513,040
|
2,691,539
|
|||||
Notes
receivable- net of current portion
|
447,807
|
1,327,552
|
|||||
Goodwill
|
1,141,159
|
1,141,159
|
|||||
Other
assets
|
1,200,359
|
698,453
|
|||||
Total
other assets
|
20,585,304
|
18,705,740
|
|||||
Total
assets
|
$
|
189,833,021
|
$
|
160,490,260
|
March
31,
2008
|
June
30,
2007
|
||||||
(unaudited)
|
(Notes 2 and 6)
|
||||||
CURRENT
LIABILITIES
|
|||||||
Accounts
payable
|
$
|
10,548,973
|
$
|
5,765,189
|
|||
Accrued
liabilities
|
2,597,749
|
3,141,061
|
|||||
Customer
deposits
|
765,193
|
612,500
|
|||||
Current
portion of deferred revenue related to fractional aircraft share
sales
|
45,718,190
|
38,058,547
|
|||||
Current
portion of notes payable
|
11,336,172
|
4,412,288
|
|||||
Unearned
management fee and charter card revenues
|
12,113,121
|
7,950,636
|
|||||
Total
current liabilities
|
83,079,398
|
59,940,221
|
|||||
Notes
payable, net of current portion
|
22,060,099
|
18,560,570
|
|||||
Deferred
revenue related to fractional aircraft share sales, net of current
portion
|
95,980,696
|
92,186,334
|
|||||
Other
liabilities
|
2,350,388
|
1,762,159
|
|||||
Total
long-term liabilities
|
120,391,183
|
112,509,063
|
|||||
Total
liabilities
|
203,470,581
|
172,449,284
|
|||||
COMMITMENTS
AND CONTINGENCIES
|
|||||||
Preferred
stock series A convertible, $.0001 par value, authorized 300,000
shares;
152,000 shares issued and outstanding
|
14,417,247
|
-
|
|||||
STOCKHOLDERS’
DEFICIT
|
|||||||
Preferred
stock, $.0001 par value, authorized 700,000 shares; none
issued
|
-
|
-
|
|||||
Common
stock, Class A, $.0001 par value, 75,000,000 shares authorized, 15,220,817
shares issued and outstanding
|
1,522
|
1,522
|
|||||
Additional
paid-in capital
|
45,574,614
|
46,124,857
|
|||||
Accumulated
deficit
|
(73,630,943
|
)
|
(58,085,403
|
)
|
|||
Total
stockholders’ deficit
|
(28,054,807
|
)
|
(11,959,024
|
)
|
|||
Total
liabilities and stockholders’ deficit
|
$
|
189,833,021
|
$
|
160,490,260
|
Three Months Ended
March 31,
|
Nine Months Ended
March 31,
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||
Revenues
|
|||||||||||||
Fractional
aircraft sold
|
$
|
11,183,245
|
$
|
7,372,979
|
$
|
31,633,495
|
$
|
21,917,085
|
|||||
Maintenance
and management fees
|
14,998,644
|
10,069,343
|
42,121,457
|
27,316,678
|
|||||||||
Charter
card and demonstration revenue
|
2,814,706
|
2,005,996
|
7,756,892
|
4,463,234
|
|||||||||
FBO
and other revenues
|
948,814
|
424,873
|
2,718,330
|
853,833
|
|||||||||
Total
revenue
|
29,945,409
|
19,873,191
|
84,230,174
|
54,550,830
|
|||||||||
Operating
expenses
|
|||||||||||||
Cost
of fractional aircraft shares sold
|
9,404,328
|
6,969,076
|
26,373,438
|
17,753,561
|
|||||||||
Cost
of flight operations
|
13,322,523
|
11,079,365
|
38,809,119
|
27,026,276
|
|||||||||
Cost
of fuel
|
4,767,280
|
2,795,756
|
12,373,941
|
7,399,575
|
|||||||||
General
and administrative expenses
|
5,499,457
|
4,032,745
|
14,852,400
|
14,164,081
|
|||||||||
Depreciation
and amortization
|
1,132,865
|
303,102
|
2,878,978
|
669,201
|
|||||||||
Selling
expenses
|
978,999
|
1,047,521
|
3,392,324
|
2,905,751
|
|||||||||
Total
operating expenses
|
35,105,452
|
26,227,565
|
98,680,200
|
69,918,445
|
|||||||||
Loss
from operations
|
(5,160,043
|
)
|
(6,354,374
|
)
|
(14,450,026
|
)
|
(15,367,615
|
)
|
|||||
Other
income (expenses)
|
|||||||||||||
Interest
income
|
83,316
|
117,740
|
418,169
|
271,836
|
|||||||||
Gain
on sale of assets
|
341,370
|
-
|
341,370
|
||||||||||
Interest
expense
|
(705,222
|
)
|
(1,212,318
|
)
|
(1,855,053
|
)
|
(2,726,651
|
)
|
|||||
Total
other expenses
|
(280,536
|
)
|
(1,094,578
|
)
|
(1,095,514
|
)
|
(2,454,815
|
)
|
|||||
Net
loss
|
(5,440,579
|
)
|
(7,448,952
|
)
|
(15,545,540
|
)
|
(17,822,430
|
)
|
|||||
Preferred
stock dividend
|
(345,905
|
)
|
-
|
(503,506
|
)
|
-
|
|||||||
Accretion
of convertible preferred stock
|
(22,077
|
)
|
-
|
(32,353
|
)
|
-
|
|||||||
Net
loss attributed to common stockholders
|
$
|
(5,808,561
|
)
|
$
|
(7,448,952
|
)
|
$
|
(16,081,399
|
)
|
$
|
(17,822,430
|
)
|
|
Loss
per common share:
|
|||||||||||||
Basic
and diluted
|
$
|
(0.36
|
)
|
$
|
(0.72
|
)
|
$
|
(1.02
|
)
|
$
|
(2.31
|
)
|
|
Weighted-average
common shares outstanding:
|
|||||||||||||
Basic
and diluted
|
15,220,817
|
10,288,909
|
15,220,817
|
7,700,505
|
Class A
Common Stock
|
|
Additional
Paid-In
|
|
Accumulated
|
|
Treasury
|
|
Total
Stockholders'
|
|
||||||||||
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit
|
|
Stock
|
|
Deficit
|
|||||||
Balance, June 30,
2007, as previously reported
|
15,220,817
|
$
|
1,522
|
$
|
46,124,857
|
$
|
(56,198,527
|
)
|
$
|
(1,886,876
|
)
|
$
|
(11,959,024
|
)
|
|||||
Restatement
for retirement of treasury stock
|
(1,886,876
|
)
|
1,886,876
|
-
|
|||||||||||||||
Balance,
June 30, 2007, as restated
|
15,220,817
|
1,522
|
46,124,857
|
(58,085,403
|
)
|
-
|
(11,959,024
|
)
|
|||||||||||
Expenses
associated with registration of shares sold in private
placement
|
(360,321
|
)
|
(360,321
|
)
|
|||||||||||||||
Accretion
of expenses associated with issuance of Preferred Stock
|
(32,353
|
)
|
(32,353
|
)
|
|||||||||||||||
Share-based
compensation
|
345,937
|
345,937
|
|||||||||||||||||
Accrued
dividend on series A convertible preferred stock, $1.18 per share
and $.65
per share
|
(503,506
|
)
|
(503,506
|
)
|
|||||||||||||||
Net
loss
|
(15,545,540
|
)
|
(15,545,540
|
)
|
|||||||||||||||
Balance,
March 31, 2008
|
15,220,817
|
$
|
1,522
|
$
|
45,574,614
|
$
|
(73,630,943
|
)
|
$
|
-
|
$
|
(28,054,807
|
)
|
Nine Months Ended
|
|||||||
March 31,
|
March 31,
|
||||||
2008
|
2007
|
||||||
OPERATING
ACTIVITIES:
|
|||||||
Net
loss
|
$
|
(15,545,540
|
)
|
$
|
(17,822,430
|
)
|
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
|||||||
Depreciation
and amortization
|
2,878,978
|
864,172
|
|||||
Gain
on sale of assets
|
(341,370
|
)
|
-
|
||||
Fair
value of warrants issued to officer
|
-
|
156,000
|
|||||
Fair
value of stock options issued
|
-
|
10,807
|
|||||
Share-based
compensation
|
345,937
|
2,542,400
|
|||||
Decrease
in allowance for doubtful accounts
|
(260,398
|
)
|
-
|
||||
Changes
in operating assets and liabilities:
|
|||||||
Accounts
receivable
|
(246,643
|
)
|
(2,590,909
|
)
|
|||
Inventory
|
(30,105
|
)
|
(49,146
|
)
|
|||
Prepaid
expenses and other current assets
|
(1,430,803
|
)
|
(362,213
|
)
|
|||
Aircraft
costs related to fractional share sales
|
(24,538,004
|
)
|
(29,128,933
|
)
|
|||
Restricted
cash
|
125,154
|
(1,632,710
|
)
|
||||
Deposits
|
(2,561,056
|
)
|
2,842,704
|
||||
Deferred
maintenance agreement
|
178,499
|
465,456
|
|||||
Unearned
management fee and charter card revenue
|
4,066,885
|
5,760,222
|
|||||
Notes
receivable
|
1,074,557
|
1,891,816
|
|||||
Other
assets
|
(501,906
|
)
|
(245,360
|
)
|
|||
Accounts
payable
|
4,783,784
|
1,276,004
|
|||||
Accrued
liabilities
|
(543,312
|
)
|
(262,998
|
)
|
|||
Deferred
revenue related to fractional aircraft share sales
|
11,454,005
|
19,467,791
|
|||||
Deferred
gain on sale and leaseback of asset
|
-
|
(150,592
|
)
|
||||
Customer
deposits
|
152,693
|
(220,939
|
)
|
||||
Other
liabilities
|
588,229
|
221,927
|
|||||
Net
cash used in operating activities
|
(20,350,416
|
)
|
(16,966,931
|
)
|
|||
INVESTING
ACTIVITIES:
|
|||||||
Proceeds
from sale of property and equipment
|
-
|
4,200,000
|
|||||
Capital
expenditures
|
(3,455,906
|
)
|
(4,140,923
|
)
|
|||
Net
cash (used in) provided by investing activities
|
(3,455,906
|
)
|
59,077
|
Nine
Months Ended
|
|||||||
March 31,
2008
|
March 31,
2007
|
||||||
FINANCING
ACTIVITIES:
|
|||||||
Borrowings
under long-term notes payable
|
$
|
2,200,000
|
$
|
13,545,617
|
|||
Borrowings
under line of credit
|
-
|
7,581,365
|
|||||
Borrowings
under floor plan agreement
|
15,415,137
|
-
|
|||||
Borrowings
under short-term notes payable
|
291,110
|
||||||
Principal
payments on long-term notes payable
|
(5,580,066
|
)
|
(12,559,318
|
)
|
|||
Principal
payments on floor plan agreement
|
(10,135,582
|
)
|
-
|
||||
Principal
payments on line of credit
|
-
|
(22,848,144
|
)
|
||||
Principal
payments on short-term notes payable
|
(45,168
|
)
|
-
|
||||
Proceeds
from issuance of stock
|
-
|
43,893,971
|
|||||
Proceeds
from issuance of preferred stock-net
|
13,881,388
|
-
|
|||||
Cost
of registration of private placement shares
|
(360,321
|
)
|
-
|
||||
Cost
of treasury shares
|
-
|
(1,353,922
|
)
|
||||
Net
cash provided by financing activities
|
15,666,498
|
28,259,569
|
|||||
Net
(decrease) increase in cash and cash equivalents
|
(8,139,824
|
)
|
11,351,715
|
||||
Cash
and cash equivalents, beginning of the period
|
12,577,468
|
2,175,734
|
|||||
Cash
and cash equivalents, end of the period
|
$
|
4,437,644
|
$
|
13,527,449
|
|||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION
|
|||||||
Interest
paid (net of amounts capitalized)
|
$
|
1,344,997
|
$
|
2,189,198
|
|||
SUPPLEMENTAL
DISCLOSURE OF NON-CASH FINANCING ACTIVITIES
|
|||||||
Accretion
of series A convertible preferred stock
|
$
|
32,353
|
$
|
-
|
|||
Aircraft
purchased under capital lease obligation
|
$
|
4,828,642
|
$
|
4,392,163
|
|||
Aircraft
purchased under long-term notes payable
|
$
|
3,906,900
|
$
|
-
|
|||
Dividends
payable on series A convertible preferred stock
|
$
|
531,478
|
$
|
-
|
|||
Charter
card issued as partial consideration of aircraft purchase
|
$
|
95,600
|
$
|
-
|
|||
Aircraft
sold through settlement of note payable
|
$
|
457,560
|
$
|
-
|
|||
Issuance
of share in connection with acquisition
|
$
|
-
|
$
|
20
|
|||
Reclassification
of stockholder advances to treasury stock
|
$
|
-
|
$
|
533,986
|
|||
Deferred
gain on sale and leaseback of asset
|
$
|
-
|
$
|
860,714
|
|||
Conversion
of short-term borrowings to long-term notes payable
|
$
|
-
|
$
|
7,050,300
|
Item
|
Amount
|
|||
SEC
registration fee
|
$
|
300
|
* | |
Legal
fees and expenses
|
$
|
20,000
|
* | |
Accounting
fees and expenses
|
$
|
15,000
|
* | |
Printing
fees and expenses
|
$
|
5,000
|
* | |
Miscellaneous
fees and expenses
|
$
|
700
|
* | |
Total
|
$
|
41,000
|
* |
(a)
|
1.
To file, during any period in which offers or sales are being made,
a
post-effective amendment to this registration
statement:
|
i.
|
To
include any prospectus required by Section 10(a)(3) of the Securities
Act
of 1933;
|
ii.
|
To
reflect in the prospectus any facts or events arising after the effective
date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent
a
fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease
in
volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation
from
the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant
to
Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than 20% change in the maximum aggregate offering
price
set forth in the “Calculation of Registration Fee” table in the effective
registration statement.
|
iii.
|
To
include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material
change to such information in the registration
statement.
|
A.
|
Paragraphs
(a)(1)(i) and (a)(1)(ii) of this section do not apply if the registration
statement is on Form S-8, and the information required to be included
in a
post-effective amendment by those paragraphs is contained in reports
filed
with or furnished to the Commission by the registrant pursuant to
section
13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement;
and
|
B.
|
Paragraphs
(a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply
if the
registration statement is on Form S-3 or Form F-3 and the information
required to be included in a post-effective amendment by those paragraphs
is contained in reports filed with or furnished to the Commission
by the
registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement, or is contained in a form of prospectus filed
pursuant to Rule 424(b) that is part of the registration
statement.
|
2. |
That,
for the purpose of determining any liability under the Securities
Act of
1933, each such post-effective amendment shall be deemed to be a
new
registration statement relating to the securities offered therein,
and the
offering of such securities at that time shall be deemed to be the
initial
bona fide offering thereof.
|
3. |
To
remove from registration by means of a post-effective amendment any
of the
securities being registered which remain unsold at the termination
of the
offering.
|
4. |
That,
for the purpose of determining liability under the Securities Act
of 1933
to any purchaser:
|
i.
|
If
the registrant is subject to Rule 430C, each prospectus filed pursuant
to
Rule 424(b) as part of a registration statement relating to an offering,
other than registration statements relying on Rule 430B or other
than
prospectuses filed in reliance on Rule 430A, shall be deemed to be
part of
and included in the registration statement as of the date it is first
used
after effectiveness. Provided, however, that no statement made in
a
registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated
by
reference into the registration statement or prospectus that is part
of
the registration statement will, as to a purchaser with a time of
contract
of sale prior to such first use, supersede or modify any statement
that
was made in the registration statement or prospectus that was part
of the
registration statement or made in any such document immediately prior
to
such date of first use.
|
(b)
|
The
undersigned Registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the
Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 that is incorporated by reference
in
the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering
of
such securities at that time shall be deemed to be the initial bona
fide
offering thereof.
|
(c)
|
Insofar
as indemnification for liabilities arising under the Securities Act
of
1933 may be permitted to directors, officers and controlling persons
of
the Registrant, the Registrant has been advised that in the opinion
of the
Securities and Exchange Commission such indemnification is against
public
policy as expressed in the Act and is, therefore, unenforceable.
In the
event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by
a
director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted
by such
director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit
to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Act and
will be governed by the final adjudication of such
issue.
|
Avantair,
Inc.
|
|
By:
|
/s/
Steven Santo
|
Steven
Santo
|
|
Chief
Executive Officer
|
|
Name
|
Title
|
Date
|
||
/s/
Steven
Santo
|
Chief
Executive Officer and
|
July
30, 2008
|
||
Steven
Santo
|
Director
(Principal
Executive Officer)
|
|||
/s/
Richard Pytak
|
Chief
Financial Officer
|
July
30, 2008
|
||
Richard
Pytak
|
(Principal
Financial and Accounting Officer)
|
|||
/s/
Barry Gordon
|
Chairman
|
July
30, 2008
|
||
Barry
Gordon
|
||||
/s/
A. Clinton Allen
|
Director
|
July
30, 2008
|
||
A.
Clinton Allen
|
||||
/s/
Robert Lepofsky
|
Director
|
July
30, 2008
|
||
Robert
Lepofsky
|
||||
/s/
Arthur H. Goldberg
|
Director
|
July
30, 2008
|
||
Arthur
H. Goldberg
|
||||
/s/
Stephanie Cuskley
|
July
30, 2008
|
|||
Stephanie
Cuskley
|
Director
|
Exhibit
Number
|
Description
|
|
2.1
|
Stock
Purchase Agreement, dated as of October 2, 2006 between Ardent Acquisition
Corporation and the Stockholders of Avantair, Inc. (1)
|
|
2.2
|
Letter
Agreement, entered into as of October 2, 2006 between Avantair, Inc.,
certain equity investors and Ardent Acquisition Corporation.
(1)
|
|
2.3
|
Amendment
to Stock Purchase Agreement, dated as of December 15, 2006 between
Ardent
Acquisition Corporation and the Stockholders of Avantair, Inc.
(2)
|
|
3.1
|
Amended
and Restated Certificate of Incorporation. (3)
|
|
3.2
|
By-laws.
(4)
|
|
3.3
|
Amended
and Restated By-laws. (8)
|
|
3.4
|
Certificate
of Designations, filed with the Secretary of State of the State of
Delaware on November 14, 2007 (9)
|
|
4.1
|
Specimen
Unit Certificate. (4)
|
|
4.2
|
Specimen
Common Stock Certificate. (4)
|
|
4.3
|
Specimen
Warrant Certificate. (4)
|
|
4.4
|
Form
of Unit Purchase Option to be granted to Representative.
(4)
|
|
4.5
|
Form
of Warrant Agreement between Continental Stock Transfer & Trust
Company and the Registrant. (4)
|
|
4.6
|
2006
Long -Term Incentive Plan (5)
|
|
5.1
|
Legal
Opinion of DLA Piper US LLP.
|
|
10.1
|
Letter
Agreement among the Registrant, EarlyBirdCapital, Inc. and Barry
J.
Gordon. (4)
|
|
10.2
|
Letter
Agreement among the Registrant, EarlyBirdCapital, Inc. and Marc H.
Klee.
(4)
|
|
10.3
|
Letter
Agreement among the Registrant, EarlyBirdCapital, Inc. and Harvey
Granat.
(4)
|
10.4
|
Letter
Agreement among the Registrant, EarlyBirdCapital, Inc. and Robert
Brill.
(4)
|
|
10.5
|
Letter
Agreement among the Registrant, EarlyBirdCapital, Inc. and Arthur
G.
Goldberg. (4)
|
|
10.6
|
Letter
Agreement among the Registrant, EarlyBirdCapital, Inc. and Philip
Goodman.
(4)
|
|
10.7
|
Letter
Agreement among the Registrant, EarlyBirdCapital, Inc. and Alan J.
Loewenstein. (4)
|
|
10.8
|
Letter
Agreement among the Registrant, EarlyBirdCapital, Inc. and Robert
Sroka.
(4)
|
|
10.9
|
Form
of Investment Management Trust Agreement between Continental Stock
Transfer & Trust Company and the Registrant. (4)
|
|
10.10
|
Form
of Stock Escrow Agreement between the Registrant, Continental Stock
Transfer & Trust Company and the Initial Stockholders.
(4)
|
|
10.11
|
Form
of Letter Agreement between American Fun Advisors, Inc. and Registrant
regarding administrative support. (4)
|
|
10.12
|
Promissory
Note, dated October 31, 2004, in the principal amount of $70,000
issued to
Barry J. Gordon. (4)
|
|
10.13
|
Registration
Rights Agreement among the Registrant and the Initial Stockholders.
(4)
|
|
10.14
|
Form
of Warrant Purchase Agreement among EarlyBirdCapital, Inc. and each
of the
Initial Stockholders. (4)
|
|
10.15
|
Investors
Rights Agreement, entered into as of October 2, 2006, between Avantair,
Inc. and certain equity investors. (1)
|
|
10.16
|
Loan
Agreement, entered into as of October 2, 2006 by and among Avantair,
Inc.,
CNM, Inc. and Ardent Acquisition Corporation. (1)
|
|
10.17
|
Amended
and Restated Promissory Note, dated June 1, 2007, made by Avantair,
Inc.
to CNM, Inc. (8)
|
|
14.1
|
Code
of Ethics for directors, officers and employees (6)
|
|
14.2
|
Code
of Ethics for senior financial officers and the principal executive
officer (6)
|
|
23.1
|
Consent
of Independent Registered Public Accounting Firm.
|
|
23.2
|
Consent
of AvData. (8)
|
|
99.1
|
Charter
for the Audit Committee of the Board. (7)
|
|
99.2
|
Charter
for the Corporate Governance and Nominating Committee of the Board.
(7)
|
|
99.3
|
Charter
for the Compensation Committee of the
Board.(7)
|
(1) |
Incorporated
by reference to the Registrant’s Current Report on Form 8-K, filed with
the Securities and Exchange Commission on October 4,
2006.
|
(2) |
Incorporated
by reference to the Registrant’s Current Report on Form 8-K, filed with
the Securities and Exchange Commission on December 20,
2006.
|
(3) |
Incorporated
by reference to Registrant’s current report on Form 8-K, filed with the
Securities and Exchange Commission on March 15,
2007.
|
(4) |
Incorporated
by reference to the Registrant’s Registration Statement on Form S-1 (SEC
File No. 333-121028).
|
(5) |
Incorporated
by reference to the Registrant’s Current Report on Form 8-K, filed with
the Securities and Exchange Commission on March 23,
2007.
|
(6) |
Incorporated
by reference to Registrant’s Current Report on form 8-K, filed with the
Securities and Exchange Commission on February 28,
2007.
|
(7) |
Incorporated
by reference to the Registrant’s Current Report on Form 10-KSB, filed with
the Securities and Exchange Commission on April 6,
2007.
|
(8) |
Incorporated
by reference to the Registrant’s Registration Statement on Form S-1 (SEC
File No. 333-142312).
|
(9) |
Incorporated
by reference to the Registrant’s Current Report on Form 8-K, filed with
the Securities and Exchange Commission on November 20,
2007.
|