Nope, N417XA is an asset of Aerline, Songbird leased it from them.
As you have copied and pasted, it clearly states in the LOI, the agreement was to acquire all of the issued and outstanding shares of capital stock of Songbird Airways, Inc. for $6.2 million, no plane, no office furniture, no employees or Crab Shack coupons, only the shares and certificates.
It should also be noted that the $1 million purchase deposit was still refundable at that time.
Item 8.01 Other Events
On June 15, 2017, Baltia Air Lines, Inc. dba USGlobal Airways (the “Company”) entered into a non-binding letter of intent with AerLine Holdings LLC (the “LOI”) for the exclusive right to acquire of all of the (“Songbird”) for an aggregate purchase price of $6,200,000 (the “Acquisition”). Pursuant to the terms of the LOI, at the time of closing, Songbird shall be debt free, it shall hold a valid and current air carrier certificate issued by the Federal Aviation Administration (the “FAA”), and it shall hold a valid certificate of public convenience and necessity issued by the Department of Transportation (the “DOT”) to conduct interstate and foreign charter air transportation with up to ten large aircraft. As of June 23, 2017, the Company has made a good-faith deposit of $1,000,000 with a third party escrow agent, which funds shall be fully refundable to the Company in the event that the Company and Songbird do not enter into a formal, definitive purchase agreement.
The Company is currently in the process of conducting its due diligence review of Songbird and has already confirmed the current status of Songbird’s FAA and DOT certificates. Pursuant to the terms of the LOI, the closing of the Acquisition shall be no later than 90 days from the date of execution of the LOI. Each of the parties will bear its own costs and expenses incurred or to be incurred in connection with the negotiation and execution of the Acquisition documents.
There can be no assurances that the Company will enter into a definitive agreement with Songbird, and even if the Company does enter into such agreement, we may not consummate this purchase at all or on the terms discussed in the LOI.
Then on August 30, 2017 comes the formal agreement where Baltia's really sharp dude has agreed to buy Songbird's shares and certificates for $6.5 million, nothing else was being bought. N417XA is introduced in a lease agreement. And to sweeten the deal, the Purchase Deposit became non-refundable and given to Aerline.
Item 1.01 Entry into a Material Definitive Agreement
On August 30, 2017, Baltia Air Lines, Inc. dba USGlobal Airways (the “Company”) entered into a stock purchase agreement (the “Agreement”) with AerLine Holdings Inc. (“AerLine”) for the purchase of all of the issued and outstanding shares of capital stock of Songbird Airways, Inc. (“Songbird”), a wholly owned subsidiary of AerLine, for an aggregate purchase price of $6,500,000 (the “Acquisition”) to be paid in cash, plus any amounts related to certain pre-paid assets of Songbird. The Acquisition is scheduled to close on October 15, 2017 (the “Scheduled Closing Date”), but in no event later than October 31, 2017, and the Company is required to present proof of sufficiency of funds to AerLine fifteen days prior to such Scheduled Closing Date. The Company previously made a good-faith deposit of $1,000,000 with a third party escrow agent, which funds were released to AerLine on September 1, 2017.
Pursuant to the terms of the Agreement, until the closing of the Acquisition or until the Agreement is terminated, AerLine covenants to (i) use its reasonable best efforts to preserve the assets of Songbird in all material respects and (ii) not cause Songbird to sell, lease, transfer or otherwise dispose of any assets or permit such assets to become subject to any lien, or make or rescind any material election relating to taxes or settle any material claim, action suit or proceeding with respect thereto, or enter into any material agreement without prior written consent of the Company.
Pursuant to the terms of the Agreement, prior to the date of the closing, the Company shall also enter into an aircraft lease agreement (the “Lease Agreement”) with AerSale 25417 LLC (“AerSale”) for the lease of one B737-400 aircraft. Prior to the closing of the Acquisition, the Company shall pay to AerSale the cost of the inspection of the aircraft.
