Condensed Combined Debtor-in-Possession Financial Information

6 Months Ended

Jun. 30, 2021

Condensed Combined Debtor-in-Possession Financial Information

NOTE 12 - Condensed Combined Debtor-in-Possession Financial Information

12. 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

June 30, 2021

(Unaudited)

Assets:
Cash and cash equivalents	$	2,224,500
Accounts receivable		91,900
Due from non-debtor affiliates		351,500
Finance leases receivable, net of allowance for doubtful accounts of $1,190,000		700,000
Assets held for sale		53,409,400
Property, equipment and furnishings, net of accumulated depreciation of $13,800		10,200
Office lease right of use, net of accumulated amortization of $43,900		109,200
Investment in non-debtor subsidiaries		3,716,700
Prepaid expenses and other assets		367,900
Total assets	$	60,981,300
Liabilities:
Accounts payable	$	655,700
Payable to non-debtor subsidiaries		2,425,600
Accrued payroll		225,300
Lease liability		137,300
Maintenance reserves		2,028,000
Security deposits		466,000
Accrued maintenance costs		19,500
Unearned revenues		966,400
Taxes payable		2,300
Total liabilities not subject to compromise		6,926,100
Liabilities subject to compromise		80,277,600
Total liabilities		87,203,700
Total stockholders’ deficit attributable to the Debtors		(26,222,400	)
Total liabilities and stockholders’ deficit	$	60,981,300

The Debtors

Condensed Combined Statements of Operations

(Unaudited)

	For the Six Months Ended June 30, 2021			For the Three Months Ended June 30, 2021
Revenues and other income:
Operating lease revenue	$	3,457,600		$	1,470,300
Net (loss)/gain on disposal of assets		(2,463,700	)		6,800
Other (loss)/income		(1,400	)		3,100
		992,500			1,480,200
Expenses:
Impairment in value of aircraft		4,204,400			2,264,000
Professional fees, general and administrative and other		1,900,700			268,300
Interest		1,845,800			1,100
Depreciation		1,165,800			466,600
Bad debt expense		1,147,000			326,000
Reorganization costs		952,800			952,800
Salaries and employee benefits		910,200			445,900
Insurance		464,100			216,300
PPP Loan forgiveness		(279,200	)		(279,200	)
Maintenance		239,500			94,500
Other taxes		51,100			25,600
		12,602,200			4,781,900
Loss before income taxes and equity in earnings of non-debtor entities		(11,609,700	)		(3,301,700	)
Income tax provision		52,900			3,700
Equity in earnings of non-debtor entities		3,054,500			107,600
Net loss	$	(8,608,100	)	$	(3,197,800	)

The Debtors

Condensed Combined Statements of Cash Flows

For the Six Months Ended June 30, 2021

(Unaudited)

Net cash provided by operating activities	$	745,900
Investing activity-
Proceeds from sale of aircraft and aircraft engines held for sale, net of re-sale fees		13,591,400
Net cash provided by investing activity
Financing activities:
Repayment of notes payable – MUFG Credit Facility and Drake Indebtedness		(14,210,700	)
Issuance of notes payable – PPP Loan		170,000
Net cash used in financing activities		(14,040,700	)
Net increase in cash, cash equivalents and restricted cash		296,600
Cash, cash equivalents and restricted cash, beginning of period		1,927,900
Cash, cash equivalents and restricted cash, end of period	$	2,224,500