Condensed Combined Debtor-in-Possession Financial Information

3 Months Ended

Mar. 31, 2021

Condensed Financial Information Disclosure [Abstract]

Condensed Combined Debtor-in-Possession Financial Information

The following financial statements represent the unaudited condensed combined financial statements of the Debtors. The results of the non-debtor entities are not included in these financial statements. Intercompany transactions among the Debtors have been eliminated in the following financial statements. Intercompany transactions among the Debtor and non-debtor entities have not been eliminated in the following financial statements.

The Debtors

Condensed Combined Balance Sheet

March 31, 2021

(Unaudited)

Assets:
Cash and cash equivalents	$	3,755,000
Accounts receivable		286,100
Due from non-debtor affiliates		350,900
Finance leases receivable, net of allowance for doubtful accounts of $2,324,000		1,626,000
Aircraft held for lease, net of accumulated depreciation of $21,699,000		56,085,400
Assets held for sale		347,400
Property, equipment and furnishings, net of accumulated depreciation of $12,300		11,700
Office lease right of use, net of accumulated amortization of $43,900		125,900
Investment in non-debtor subsidiaries		3,610,600
Prepaid expenses and other assets		562,000
Total assets	$	66,761,000
Liabilities:
Accounts payable	$	133,500
Payable to non-debtor subsidiaries		2,422,000
Accrued payroll		209,400
Lease liability		151,000
Maintenance reserves		2,099,900
Security deposits		466,000
Unearned revenues		549,000
Total liabilities not subject to compromise		6,030,800
Liabilities subject to compromise		83,754,800
Total liabilities		89,785,600
Total stockholders’ deficit attributable to the Debtors		(23,024,600	)
Total liabilities and stockholders’ deficit	$	66,761,000

The Debtors

Condensed Combined Statements of Operations

For the Three Months Ended March 31, 2021

(Unaudited)

Revenues and other income:
Operating lease revenue	$	1,987,200
Net loss on disposal of assets		(2,473,200	)
Other loss		(1,700	)
		(487,700	)
Expenses:
Impairment in value of aircraft		1,940,400
Interest		1,844,700
Professional fees, general and administrative and other		1,632,100
Bad debt expense		821,000
Depreciation		699,300
Salaries and employee benefits		464,300
Insurance		247,900
Maintenance		145,000
Other taxes		25,600
		7,820,300
Loss before income taxes and equity in earnings of non-debtor entities		(8,308,000	)
Income tax provision		49,200
Equity in earnings of non-debtor entities		2,946,900
Net loss	$	(5,410,300	)

The Debtors

Condensed Combined Statements of Cash Flows

For the Three Months Ended March 31, 2021

(Unaudited)

Net cash used in operating activities	$	(577,200	)
Investing activity-
Proceeds from sale of aircraft and aircraft engines held for lease, net of re-sale fees		13,246,000
Net cash provided by investing activity		13,246,000
Financing activities:
Repayment of notes payable – MUFG Credit Facility and Drake Loan		(11,011,700	)
Issuance of notes payable – PPP Loan		170,000
Net cash used in financing activities		(10,841,700	)
Net increase in cash, cash equivalents and restricted cash		1,827,100
Cash, cash equivalents and restricted cash, beginning of period		1,927,900
Cash, cash equivalents and restricted cash, end of period	$	3,755,000