Note 2 - Management's Liquidity Plans

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Going Concern Disclosure [Text Block]

NOTE

2

–

Management’s Liquidity Plans

As of

December 31, 2017,

the Company had cash of

$1,724,504

and a working capital surplus of

$3,368,610.

The Company generated revenue of

$12,016,031

and had net income of

$477,628

for the

twelve

months ended

December 31, 2017.

On

May 17, 2013,

the Company entered into a loan agreement with PNC Bank (the “PNC Loan Agreement”). The PNC Loan Agreement contained

three

components: (i) a

$2,500,000

non-revolving acquisition line of credit (the “PNC Acquisition Line”); (ii) a

$1,150,000

working capital line (the “PNC Working Capital Line”); and (iii) a

$280,920

term loan (the “PNC Term Loan”).

Proceeds of the PNC Acquisition Line were able to be dispersed, based on parameters defined in the PNC Loan Agreement, until

May 17, 2014 (

the “Conversion Date”). As of the Conversion Date, there was

$1,350,000

outstanding under the PNC Acquisition Line. The payment terms provided that

30

days following the Conversion Date

, the Company is required to make equal payments of principal over a

60

month period. Interest on the outstanding principal continues to accrue at a rate equal to

one

-month LIBOR plus

275

basis points (

3.486%

as of

December 31, 2017).

An unused commitment fee had been applied at a rate of

1.5%

on the unused portion of the PNC Acquisition Line and was charged for each fiscal quarter through the Conversion Date. As of

December 31, 2017,

there was

$382,500

outstanding under the PNC Acquisition Line.

The PNC Working Capital was to have been dispersed for working capital and general corporate purposes. Interest on outstanding principal accrued at a rate equal to daily LIBOR plus

250

basis points. The PNC Working Capital Line expired on

December 31,

201

5,

with

$0

outstanding.

The PNC Term Loan was utilized to retire

the Company’s previously outstanding miscellaneous debt of the same amount. Interest on outstanding principal accrued at a rate equal to

one

-month LIBOR plus

275

basis points and principal and interest payments were to be made over a

thirty-four

month period. At

December 31, 2015,

all amounts under the PNC Term loan had been repaid.

As disclosed in a Current Report on Form

8

-K filed with the Securities and Exchange Commission (the “SEC”)

on

March 21, 2018,

the Company announced a financing agreement with Key Bank National Association. Please see Note

15

Subsequent Events

for further information.

The Company is

party to a Concession Agreement, dated as of

November 1, 2008,

with the City of New York for the operation of the Downtown Manhattan Heliport (the “Concession Agreement”). Pursuant to the terms of the Concession Agreement, the Company must pay the greater of

18%

of the

first

$5,000,000

in program year gross receipts and

25%

of gross receipts in excess of

$5

million, or minimum annual guaranteed payments. During the

twelve

months ended

December 31, 2017

and

2016,

the Company incurred approximately

$1,800,000

and

$2,700,000,

respectively, in concession fees which are recorded in the cost of revenue.

As disclosed in a Current Report on Form

8

-K filed with the SEC on

February 5, 2016,

the Company and the New York City Economic Development Corporation (the “NYCEDC”) announced new measures to reduce helicopter noise and impacts across New York City (the “Air Tour Agreement”).

Under the Air Tour Agreement, filed as an exhibit to

the Company’s Annual Report on Form

10

-K for the year ended

December 31, 2015,

the Company

may

not

allow its tenant operators to conduct tourist flights from the Downtown Manhattan Heliport on Sundays beginning

April 1, 2016.

The Company was also required to ensure the Company’s tenant operators reduce the total allowable number of tourist flights from

2015

levels by

20

percent beginning

June 1, 2016,

by

40

percent beginning

October 1, 2016

and by

50

percent beginning

January 1, 2017.

Additionally, beginning on

June 1, 2016,

the Company was required to provide monthly written reports to the NYCEDC and the New York City Council detailing the number of tourist flights conducted out of the Downtown Manhattan Heliport compared to

2015

levels, as well as information on any tour flight that flies over land and/or strays from agreed upon routes.

The Air Tour Agreement also extended

the Company’s Concession Agreement with the City of New York for

30

months, resulting in a new expiration date of

April 30, 2021.

The City of New York has

two

one

year options to further extend the Concession Agreement. The Agreement also provides that the minimum annual guarantee payments the Company is required to pay to the City of New York under the Concession Agreement be reduced by

50%,

effective

January 1, 2017.

These reductions

have negatively impacted the Company’s business and financial results as well as those of the Company’s management company at the Heliport, Empire Aviation which, as previously disclosed, is owned by the children of Alvin Trenk, the Company’s Chief Executive Officer and a member of the Company’s Board of Directors.  The Company incurred management fees with Empire Aviation of approximately

$2,500,000

and

$3,500,000

during the

twelve

months ended

December 31, 2017

and

2016,

respectively, which is recorded in administrative expenses.  The Company and Empire Aviation have also contributed to the Helicopter Tourism and Jobs Council (“HTJC”), an association that lobbies on behalf of the helicopter air tour industry, and which had engaged in discussions with the Mayor’s office.  Mr. Trenk is also an active participant with HJTC, which is managed by his grandson. 

On

February 6, 2018,

the Company was issued a Note by

one

of its customers at the Heliport. The Note schedules approximately

$731,000

otherwise due in receivables from the customer, has a maturity date of

October 31, 2018,

and carries a

7.5

percent rate of interest. The amount due under the Note remains in accounts receivable.

On

October 3, 2016,

the Company purchased all of the capital stock of Aircraft Services, Inc. (“Aircraft Services”), an aircraft maintenance services firm located in Garden City, Kansas. Under the terms of the transaction, the Company made a

$150,000

cash payment at closing, a

$75,000

installment payment in

2017,

and will make an additional installment payment of

$75,000

in

2018.

The closing cash payment and

2017

installment payment were both funded with internal resources. The Company’s purchase of Aircraft Services’ capital stock is discussed in greater detail in a Current Report on Form

8

-K filed with the SEC on

October 7, 2016

and filed as an Exhibit to the Company’s Quarterly Report on Form

10

-Q for the period ended

September 30, 2016.

As disclosed in a Current Report on Form

8

-K filed with the SEC on

July 6, 2015,

the Company entered into a stock purchase agreement, dated

June 30, 2015,

by and between the Company and Warren A. Peck, pursuant to which Mr. Peck purchased all of the capital stock of the Company’s wholly-owned subsidiary. The details of the agreement are described in such Current Report as well as in the Company’s Annual Report on Form

10

-K, which was filed with the SEC on

April 11, 2016.

In

September 2017,

the Company received

$100,000

due under this agreement and a final payment of

$100,000

is expected to be made in

September 2018.