BEFORE THE 

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

WASHINGTON, D.C. 

Application of ) 

) 

Menagerie Enterprises, Inc. d/b/a ) DOCKET DOT -OST -2014-0192 

Monarch Air ) 

) 

For authority to conduct scheduled ) 

Passenger operations as a commuter air ) 

Carrier under 49 U.S.C. 41738 ) 

APPLICATION OF 

MENAGERIE ENTERPRISES, INC. 

DIBI A MONARCH AIR 

Response to Third Information Request 

Communications with respect to this document should be sent to: 

March 25, 2015 

Rebecca B. MacPherson 

Jones Day 

51 Louisiana Ave., NW 

Washington, DC 20001 

Telephone: 202-879-3939 

Fax: 202-626-1700 

Email: rmacpherson@jonesday.com 
Application of 

BEFORE THE 

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

WASHINGTON, D.C. 

Menagerie Enterprises, Inc. d/b/a 

Monarch Air 

) 

) 

) 

) 

) 

) 

) 

) 

DOCKET DOT-OST-2014-0192 

For authority to conduct scheduled 

Passenger operations as a commuter air 

Carrier under 49 U.S.C. 41738 

APPLICATION OF 

MENAGERIE ENTERPRISES, INC. 

D/B/A MONARCH AIR 

Response to Third Information Request 

Monarch understands DOT's position that Monarch's negative working capital balance needs to 

be considered in determining its financial fitness. In the balance sheet dated August 31, 2014 

(Exhibit 6A to Monarch's application), Monarch showed current assets of$1,074,995 and 

current liabilities of $1,495,036, resulting in a negative working capital balance of $420,040. 

Adding this capital to the financial fitness threshold based pre-operating costs and three months 

of anticipated operations results in a financial fitness threshold of $2,156,407. In addition to 

assessing its negative working capital as of December 31, 2014, Monarch has been able to secure 

an increase in its existing letter of credit ("LOC") of $1,750,000. This, combined with the LOC 

dedicated to these operations by Rise's financial institution and the written financial commitment 

by Rise to pay for pre-operating costs, guarantees Monarch dedicated financial resources for the 

contemplated commuter operations of$2,360,000. In addition, Monarch has been able to 

determine that as of December 31,2014, its current assets equaled $1,219,073.98 and its current 

liabilities equaled $1,570,832.65, resulting in a negative working capital balance of$351,758.67, 

a nearly $70,000 reduction from its August 31, 2014 balance. Monarch calculates that the 

financial fitness threshold is $2,088,126, significantly less than the $2,360,000 that it is able to 

verify is available for its Rise operations. 

Monarch notes that providing the information requested in questions 1 and 2 on Finances would 

represent an unnecessary cost and introduce additional delay in processing Monarch's 

application because of the impact of tax season on its accountants. However, Monarch does 

have its assets, liabilities and equity evaluated by its accountants on a quarterly basis. The most 

recent quarterly report calculated Monarch's current assets and liabilities using the same 

2 
accounting methodology as was used in the August 31,2014 report (Exhibit 6A to Monarch's 

application). Accordingly, Monarch believes that this documentation should be sufficient to 

allow DOT to determine Monarch's negative working capital within the past three months and 

should be sufficient to determine if Monarch has sufficient resources to meet DOT's financial 

fitness threshold. 

Finances 

I. A current balance sheet (within 3 months) along with explanatory footnotes. 

Please see Menagerie Enterprises, Inc. Unaudited Financial Statements and Accountants' 

Compilation Report, December 31, 2014, included as Exhibit 1 to this submission. Please note 

that the financial statement does not include the accountants' explanatory footnotes because of 

workload associated with filing client taxes prior to April15, 2015. However, the accounting 

practices discussed in Exhibit 7 of Monarch's application continue to apply to this financial 

statement. Monarch has not entered into any major commitments in the past six months other 

than the aircraft lease agreement with N111RZ, LLC for the amount of$38,150.00 per month for 

use of the aircraft intended to initiate the Rise operations and previously disclosed in the 

Response to Second Information Request dated January 23, 2015. The purchase of subsequent 

aircraft is dependent upon DOT granting Monarch's application for commuter authority and will 

be accomplished through a secured loan with Legacy Texas Bank, as initially outlined in the 

bank's December 18, 2014letter (Exhibit B to the Response to Information Request dated 

December 23, 2014) and as revised by Exhibit 2 to this submission. There are no new liabilities 

more than 60 days past due. The liability to Cowles and Thompson has been reduced from 

$38,604.72 to $9,386.86; the dispute with Pratt & Whitney has been resolved and there are no 

remaining liabilities; the dispute with Dallas Airmotive remains unresolved and the disputed debt 

of$19,777.07 remains the same. 

2. A current income statement (for 12 months ending the same date as date of balance sheet) 

along with explanatory footnotes. 

Please see Menagerie Enterprises, Inc. Unaudited Financial Statements and Accountants' 

Compilation Report, December 31, 2014, included as Exhibit 1 to this submission. Please note 

that the financial statement does not include the accountants' explanatory footnotes because of 

workload associated with filing client taxes prior to April15, 2015. However, the accounting 

practices discussed in Exhibit 7 of Monarch's application continue to apply to this financial 

statement. Monarch has not entered into any major commitments in the past six months other 

than the aircraft lease agreement with N111RZ, LLC for the amount of$38,150.00 per month for 

use of the aircraft intended to initiate the Rise operations and previously disclosed in the 

Response to Second Information Request dated January 23,2015. The purchase of subsequent 

aircraft is dependent upon DOT granting Monarch's application for commuter authority and will 

be accomplished through a secured loan with Legacy Texas Bank, as initially outlined in the 

bank's December 18, 2014letter (Exhibit B to the Response to Information Request dated 

December 23, 2014) and as revised by Exhibit 2 to this submission. There are no new liabilities 

more than 60 days past due. There are no new liabilities more than 60 days past due. The 

liability to Cowles and Thompson has been reduced from $38,604.72 to $9,386.86; the dispute 

3 
with Pratt & Whitney has been resolved and there are no remaining liabilities; the dispute with 

Dallas Airmotive remains unresolved and the disputed debt of$19,777.07 remains the same. 

3. Third-party verification from Monarch's financial institution of any financial resources 

available to Monarch to meet the Department's financial fitness test. 

Please see Exhibit A to Monarch's December 23, 2014 submission for verification of Rise's 

commitment to pay Monarch a set sum to cover pre-operating expenses. Please see Exhibit 4 to 

Rise's January 23, 2015 submission for verification of a LOC from Rise's financial institution 

dedicated for use in Monarch's Rise operations. Please see the letter from Legacy Texas Bank 

confirming a LOC for Rise operations in the amount of$1,750,000, included as Exhibit 2 to this 

submission. 

Operations 

The application submitted states the Rise Alpha, LLC ("Rise"), plans to charter air 

transportation from Monarch on behalf of its members, whereas the agreement between Rise and 

Monarch mentions rise as a ticket agent. Please provide additional detailed description on how 

the membership club will operate. 

Because this question relates to Rise's business model, we have asked Rise to provide a 

response. Rise's response is as follows: 

Response of Rise Alpha, LLC 

Rise is pleased to provide the following information to assist the 

Department in its review of Monarch Air's application. Rise urges the 

Department to grant Monarch Air's application expeditiously. Rise is neither an 

applicant in, nor a party to, this proceeding. Instead, Rise has a vital interest in 

the expeditious grant of Monarch Air's application because the Rise wishes to 

arrange needed services for its membership- services either that do not exist or 

are so expensive in terms of time or money that they obstruct the efficient 

performance of day-to-day business responsibilities. 

The Department's request has two parts: the first appears to suggest that 

an inconsistency exists between the statements that Rise Alpha, LLC (Rise) plans 

to charter air transportation from a certificated U.S. air carrier on behalf of its 

members, and the statement that Rise is a ticket agent. These statements are 

wholly consistent: Rise is a person other than an air carrier that, as agent for the 

Rise membership, arranges for air transportation. Rise therefore falls squarely 

within the definition ofticket agent in 49 U.S.C. § 40102(a)(45), which in its 

entirety reads as follows: 

(45) "ticket agent" means a person (except an air carrier, a foreign 

air carrier, or an employee of an air carrier or foreign air carrier) 

that as a principal or agent sells, offers for sale, negotiates for, or 

holds itself out as selling, providing, or arranging for, air 

transportation. 

4 
The remainder of this response addresses the second part of the request, which is 

to explain how the membership program will work. It draws upon and compiles 

factual material already in the docket. 

2. Description of Rise's Business! 

Rise is a Texas limited liability company, wholly owned and managed by 

Rise, LLC. Both are U.S. citizens within the meaning of 49 U.S.C. 

401 02(a)(15).Z Rise arranges door-to-door transportation on behalf of its 

members. Rise's plan is an innovative, pro-competitive advance in executive air 

travel, one that we believe will be an increasingly important part of transportation 

in this country.3 

Rise's membership program is designed to address a market failure that 

has resulted in excessively high costs of transportation for middle-to-senior level 

business executives traveling in short-haul business markets. These costs impede 

day-to-day business and are a burden on their freedom to travel. These executives 

ascribe a high value to their time, especially unproductive time in airports and 

lines. Yet, due to inefficiencies inherent in the system, existing air carrier 

services require travelers to spend three or more hours traveling over a short-haul 

segment that could be accomplished in less than an hour. Most of that time is 

unproductive, resulting in a drag on the U.S. economy. 

Similarly, driving can take four hours or more, all unproductive time, and 

is an option that is considerably less safe than flying on a U.S. air carrier such as 

Monarch. Further, current services do not adequately serve the close-in airports 

preferred by business travelers. Other options available to these travelers include 

air taxi charters, privately owned aircraft, or fractional ownership programs, all of 

which cost considerably more than the Rise membership program would. 

The Rise program reduces unproductive time to an absolute minimum. 

Not only will it operate from the smaller terminals set aside for small aircraft 

operations, but it will arrange a complete door-to-door transportation solution on 

behalf of its members. 

The Rise membership program allows members to reduce costs (both 

transportation costs and executive time) by coming together to buy a convenient 

high-quality air service in bulk. Rise conducted considerable market research, 

including polling and surveys of likely members and persons who have reserved 

membership. These data were used to determine the markets for which the 

Most of the information in this section 2 was included in the 12/23/2014 Reply of Monarch Air at 

2-3 (docketed 12/30/2014). Docket DOT-OST-2014-0192-5. 

2 Source: 12/23/2014 Reply of Monarch Air at 2-3 (docketed 12/30/2014). Docket DOT-OST2014-0192-5 

Rise's business plan appears to be very similar to that of competitor, Wheels Up, except that 

Wheels Up it does not appear to have chartered a regularly scheduled service for its members. Wheels Up has been 

operating for about two years and has thousands of members. Further information about its operation can be found 

on its website. See also, a recent interview with its founder, http:/ /pages. wheelsup.com/foxBusinessDec20 14.html. 

5 
members needed better transportation options, the number and timing of flights to 

be chartered and other services. Over time, the membership may decide to add 

more markets. From time to time, Rise members may also wish to arrange nonscheduled charters in future. 

Rise has brought together an experienced management team, 

https://iflyrise.com/about/, all ofwhom are well-regarded business leaders. 

Rise's operation presents very little (if any) risk to consumers or their funds, in 

part because Rise's members are well-educated, well-informed consumers of air 

transportation services. 

Initially, Rise will arrange for Monarch Air to provide high-frequency 

daily flights for Rise members between Dallas and Houston, and between Dallas 

and Austin. Rise will pay Monarch a contractually agreed amount for its services 

on behalf of its members. 

Rise's monthly membership fee will entitle a member to travel on any 

Monarch flight operated on behalfofRise's membership where space is available 

with no additional fees or other costs. Members will be able to reserve space on 

Rise-arranged flights, and their membership level will dictate the number of 

advanced reservations a member can make. 

2. Rise's Relationship to Members.4 

The relationship of Rise members to Rise is that of principal (members) 

and agent (Rise) and is governed by state law. Rise is not an air carrier, direct or 

indirect. Rise's membership terms and conditions, its website, and published 

marketing communications all emphasize clearly that Rise is not an air carrier and 

that it does not provide or engage in air transportation. Under the membership 

agreements, which incorporate by reference Rise's membership terms and 

conditions, 5 Rise members appoint Rise as their agent in arranging transportation. 

Rise representatives have been trained specifically to include in all oral 

marketing communications the fact that Rise is not an air carrier and that it is an 

agent on behalf of members. Rise has arranged with Monarch that all contracts of 

carriage for such transportation will be directly between Rise members and 

Monarch. Monarch's conditions of carriage are specifically linked on Rise's 

website.6 

3. How The Membership Program Works. 7 

Rise will arrange a complete transportation solution for its members, from 

door to door, arranging air and ground transportation, aircraft catering, member 

parking at airports, airport facilities, and concierge services. Each membership is 

Most material in this section is new, added in response to the 3/19 request. 

Rise's terms and conditions of membership can be viewed at https://iflyrise.com/terms/. 

Monarch's Contract of Carriage can be viewed at http://monarchair.com/section!contract-carriage. 

Most material in this section 4 was previously filed in Monarch's 12/23 response to Information 

Request, Docket DOT-OST-2014-0192-5. 

6 
subject to a monthly price that differs for each of three membership levels and a 

one-time initiation fee of $750. A membership is subject to an initial 90-day 

minimum, payable on a monthly basis. After the first 90 days, a member may 

cancel a membership on 30 days' notice. Under this arrangement, Rise will never 

hold more than 30 days' worth of consumer funds. The following table, taken 

from Rise's website, identifies the current pricing for each membership level. 

Membership Level Monthly Price Initiation Fee Minimum term Total Cost 

Express $1,650 $750 90 days $5,700 

Executive $2,150 $750 90 days $7,200 

Chairman $2,650 $750 90 days $8,700 

4. Rise's Legal Status. 

As a legal matter, Rise Alpha, LLC is an agent appointed by its membersmostly business executives -to arrange complete transportation solutions. State 

law governs the relationship. In general, the Department does not license or 

regulate ticket agents, except for certain consumer protection rules. 8 

Rise is not a common carrier, and it does not have common carrier 

obligations, such as the duty to provide safe and adequate service. 49 U.S.C. §§ 

41702, 41712; First Pennsylvania Bank, NA. v. Eastern Airlines, Inc., 731 F.2d 

1113 (3rd Cir. 1984); Nippon Fire & Marine Ins. Co. v. Skyway Freight Sys., 235 

F.3d 53 (2nd Cir. 2000) (both applying common-law duty to carry to air carriers). 

State law of agency, not tort or contract law, governs Rise's duty to its members. 

The Montreal Convention does not govern its liability for any future 

international charters or other operations, nor would Rise enjoy the benefit of the 

treaty's liability limit.9 Rise is neither a "contracting carrier" nor (obviously) a 

direct air carrier, called an "actual carrier" under the treaty. 

The ability of a transportation agent to represent either the carrier or the 

consumer is well established, especially in cargo shipping. For example, an air 

freight forwarder that is not an air carrier (direct or indirect) may act as agent 

either for the shipper or the carrier. 10 The statutory definition of a ticket agent at 

See, e.g., 14 C.F.R. §§ 257.4-5, 258.4-5, 399.80, 399.83; Order 2002-9-2, Complaint ofThe 

American Society of Travel Agents, Inc., and Joseph Galloway against United Air Lines, Inc., et al., Dockets OST99-6410, OST-02-12004, at 58 n. 27 (served Sept. 4, 2002). See also, Notice of Proposed Rulemaking, Enhanced 

Consumer Protections for Charter Air Transportation, 78 Fed. Reg. 59880, 59882 (discussing the role of a ticket 

agent) (Sept. 30, 2013). 

9 Convention for the Unification of Certain Rules for International Carriage by Air, Art. 39, opened 

for signature at Montreal, 28 May 1999 ("Montreal Convention"). Both a contracting and an actual carrier are 

presumed liable in case of a loss, but in return, they enjoy a substantial liability limit. Montreal Convention, Arts. 

39-41. 

10 14 C.F.R. § 296.5 ("An indirect cargo air carrier may act as agent of a shipper, or of a direct air 

carrier that has authorized such agency, rather than as an air carrier, if it expressly reserves the option to do so when 

the shipment is accepted."). 

7 
49 U.S.C. § 401 02(a)(45) cited above governs both agents of passengers and 

agents of shippers. Similarly, in ocean shipping, an ocean f:l·eight forwarder may 

act as agent of the shipper oi· the carrier, depending on the facts.'' 

(;ertification 

The contents of this application and the attached exhibits are true and correct to the best 

of my knowledge and belief. Pursuant to Title 18 United States code Section 1001, I, Trey 

Sawtelle, in my individual capacity and as the authorized representative of the applicant, have 

not in any manner knowingly and willfully falsified, concealed or failed to disclose any material 

fact or made any false, fictitious, or fl'audulent statement or knowingly used any documents 

which contain such statements in connection with the preparation, f:lling or prosecution of the 

application. I understand that an individual who is found to have violated the provisions of 18 

U.S.C. section 1 00 I shall be fined or imprisoned not more than five years, or both. 

Attachments: 

Verification ofNick Kennedy, manager of Rise 

Exhibits 1 and 2 

11 46 U .S.C. § 40 I 02( 18) provides: 

OCEAN FREIGHT FOR WARDER.-The term "ocean freight forwarder" means a person that-

( A) in the United States, dispatches shipments fi·om the United States via a common carrier and 

books or otherwise arranges space for those shipments 011 beha(( ofshippers; and (B) processes the 

documentation or performs related activities incident to those shipments. 

8 
VERIFICATION 

The contents of the "Operations" part of this Response to DOT Information 

Request dated March 19, 2015, are true and correct to the best of my knowledge and 

belief. Pursuant to 18 U.S.C. § 1001, I, Nick Kennedy, in my individual capacity and as 

the authorized representative of Rise Alpha, LLC, have not in any manner knowingly and 

willfully falsified, concealed or failed to disclose any material fact or made any false, 

fictitious, or fraudulent statement or knowingly used any documents which contain such 

statements in connection with the preparation, filing or prosecution of the application. I 

understand that an individual who is found to have violated the provisions of 18 U.S.C. 

§ 1001 shall be fined not more than $10,000 or imprisoned not more than five years, or 

both. 

Signed, 

Nick Kennedy 

in his individual capacity and as manager of Rise, LLC 
MENAGERIE ENTERPRISES, INC. 

UNAUDITED FINANCIAL STATEMENTS 

and 

ACCOUNTANTS' COMPILATION REPORT 

DECEMBER 31,2014 

Exhibit 1 
BEAIRD HARRIS 

& CO., P.C. 

CERTIFIED PUBLIC ACCOUNTANTS 

ACCOUNTANTS' COMPILATION REPORT 

To The Shareholders 

Menagerie Enterprises, Inc. 

Addison, Texas 

We have compiled the accompanying statement of assets, liabilities, and equityincome tax basis of Menagerie Enterprises, Inc. (an S corporation) as of December 31, 

2014, and the related statement of revenues and expenses - income tax basis for the 

twelve months then ended. We have not audited or reviewed the accompanying 

financial statements and, accordingly, do not express an opinion or provide any 

assurance about whether the financial statements are in accordance with the income tax 

basis of accounting. 

Management is responsible for the preparation and fair presentation of the financial 

statements in accordance with the income tax basis of accounting and for designing, 

implementing, and maintaining internal control relevant to the preparation and fair 

presentation of the financial statements. 

Our responsibility is to conduct the compilation in accordance with Statements on 

Standards for Accounting and Review Services issued by the American Institute of 

Certified Public Accountants. The objective of a compilation is to assist management 

in presenting financial information in the form of financial statements without 

undertaking to obtain or provide any assurance that there are no material modifications 

that should be made to the financial statements. 

Management has elected to omit substantially all of the disclosures ordinarily included 

in financial statements prepared in accordance with the income tax basis of accounting. 

If the omitted disclosures were included in the financial statements, they might 

influence the user's conclusions about the Company's assets, liabilities, equity, 

revenues, and expenses. Accordingly, these financial statements are not designed for 

those who are not informed about such matters. 

We are not independent with respect to Menagerie Enterprises, Inc .. 

Dallas, Texas 

March 24, 2015 

1222 I Merit Drive, Suite 750 

Dallas, TX 75251 

Phone: 972-503-1040 

Fax: 972-503-1120 

www.bh-co.com 

Member of American Institute of Certified Public Accountants I Member of Texas Society of Certified Public Accountants 
MENAGERIE ENTERPRISES, INC. 

STATEMENT OF ASSETS, LIABILITIES AND EQUITY 

INCOME TAX BASIS 

Current Assets 

Cash 

Accounts Receivable 

Loans to Employees 

Fuel Credit Refund Receivable 

Inventories 

Prepaid Insurance 

Total Current Assets 

Fixed Assets 

Machinery & Equipment 

Aircraft & Aircraft Equipment 

Furniture & Fixtures 

Computer Equipment 

Leasehold Improvements 

Accumulated Depreciation 

Total Fixed Assets 

Other Assets 

Aircraft Insurance Deposit 

Aircraft Escrow Deposits 

Aircraft Purchase Deposits 

Deposits 

Total Other Assets 

TOTAL ASSETS 

December 31, 2014 

UNAUDITED 

ASSETS 

$ 173,188.54 

514,231.35 

8,200.00 

86,500.00 

428,063.80 

8,890.29 

$ 110,982.62 

616,825.94 

52,448.94 

55,298.42 

90,743.70 

(750,471.41) 

$ 14,134.64 

77,491.63 

15,000.00 

15,565.00 

SEE ACCOUNTANTS' COMPILATION REPORT 

$ 1,219,073.98 

175,828.21 

122,191.27 

$ 1,517,093.46 
MENAGERIE ENTERPRISES, INC. 

STATEMENT OF ASSETS, LIABILITIES AND EQUITY 

INCOME TAX BASIS 

December 31, 2014 

UNAUDITED 

LIABILITIES AND EQUITY 

Current Liabilities 

Accounts Payable 

Payroll Tax Liability 

Sales Tax Payable 

Franchise Tax Payable 

LOC - Legacy Texas Bank 

Refundable Insurance Deposits 

Loans from Shareholder 

Current Portion of Long-Term Debt 

Total Current Liabilities 

Long-Term Liabilities 

NIP - Legacy Texas Bank- A/C 

NIP - Legacy Texas Bank- Tools 

Less: Current Portion of Long-Term Debt 

Total Long-Term Liabilities 

Equity 

Capital Stock 

Additional Paid In Capital 

Retained Earnings 

Revenues Over (Under) Expenses 

Total Equity 

TOTAL LIABILITIES & EQUITY 

$ 819,979.53 

205.02 

10,770.19 

35,518.00 

297,000.00 

13,456.19 

231,000.00 

162,903.72 

$ 656,342.33 

41,583.59 

(162,903.72) 

$ 1,000.00 

3,894.67 

(300, 134.72) 

(293,521.34) 

SEE ACCOUNTANTS' COMPILATION REPORT 

$ 1 ,570,832.65 

535,022.20 

(588, 761.39) 

$ 1,517,093.46 
MENAGERIE ENTERPRISES, INC. 

STATEMENT OF REVENUES AND EXPENSES 

INCOME TAX BASIS 

For the twelve months ended December 31, 2014 

Revenues 

Fee Revenue 

Interest Income 

UNAUDITED 

Gross Revenue 

Cost of Goods Sold 

Aircraft Operating Expense 

Aircraft Insurance 

Crew Training Costs 

Fuel 

Ground Transportation 

Lease Expense 

MX Department 

Outside Services 

Pilot Shop Supplies 

Ramp/Landing Fees 

Required Aircraft Supplies 

Trip & Crew Expenses 

Total Cost of Goods Sold 

Gross Profit 

Expenses 

Advertising 

Bank Fees 

Cash Over Short 

Charitable Contributions 

Cleaning & Landscaping 

Charter Department Expense 

Charter Department Expense - 41 C 

Computer Expense & Upgrades 

Consulting Service 

Contract Labor 

Credit Card Fees 

SEE ACCOUNTANTS' COMPILATION REPORT 

$ 6,131,464.16 

26.38 

$ 6,131,490.54 

$ 

$ 

$ 

$ 

97,545.90 

127,601.91 

116,031.04 

740,362.82 

11,364.86 

242,777.76 

826,596.64 

17,940.45 

51,945.48 

12,121.56 

9,270.77 

51,919.75 

2,305,478.94 

3,826,011.60 

33,766.25 

2,503.69 

(40.02) 

250.00 

9,734.92 

48,536.38 

53,063.67 

4,787.13 

21,293.49 

145,809.38 

50,684.32 
MENAGERIE ENTERPRISES, INC. 

STATEMENT OF REVENUES AND EXPENSES 

INCOME TAX BASIS 

For the twelve months ended December 31, 2014 

UNAUDITED 

Delivery & Freight $ 

Dues & Subscriptions 

Employee Benefits Programs 

Equipment Maintenance 

Franchise Tax 

Hangar Services 

Insurance 

Interest Expense 

Legal & Professional 

Maintenance Service Plans 

Meals & Entertainment 

Miscellaneous Expense 

Office Expense 

Office Supplies 

Payroll Taxes 

Payroll Service Fees 

Printing & Reproduction 

Reference Library 

Rent Expense 

Repairs & Maintenance 

Small Shop Tools 

Taxes 

Telephone & Communications 

Training & Education 

Travel 

Uniforms 

Utilities 

Wages & Salaries 

Total Expenses $ 

Revenues Over (Under) Expenses Before Depreciation $ 

Depreciation - Income Tax Basis 

Revenues Over (Under) Expenses After Depreciation $ 

SEE ACCOUNTANTS' COMPILATION REPORT 

25,834.73 

22,145.32 

176,450.37 

21,788.84 

74,389.76 

54,990.41 

55,583.12 

56,403.30 

170,120.81 

132,668.12 

5,226.24 

4,420.51 

853.74 

27,887.22 

168,129.39 

10,987.60 

7,543.31 

29,323.85 

292,833.54 

17,953.87 

39,381.31 

39,381.22 

65,845.03 

665.17 

17,078.06 

3,478.71 

51,077.88 

2,082,947.30 

4,025,777.94 

(199,766.34) 

93,755.00 

(293,521.34) 
LEGACYTEXAS 

March 24, 2015 

To Whom It May Concern: 

As noted in my letter dated December 18, 2014, Legacy Texas Bank has agreed to provide 

Menagerie Enterprises, Inc. d/b/a Monarch Air ("Monarch Air") the necessary financing to 

support its anticipated operations with RISE, LLC. 

We anticipate that this financing will require two parts. First; Legacy Texas Bank has agreed to 

offer a line of credit that could support short term working capital needs for Monarch in 

relation to the RISE operations. The amount of the line of credit could go up to $1,750,000 and 

would mature one year after the line is granted and could then be eligible for renewal at that 

time. Monarch Air could have access to the line of credit as long as it making regular payments 

against any outstanding balance as detailed in paragraph 3 of my December 18, 2014 letter. To 

date, Monarch Air has not made any withdrawals against this line of credit facility. 

The second part ofthe financing is associated with the acquisition of up to five (5) future 

aircraft acquisitions. Each future aircraft purchase could be placed on a separate loan that will 

be secured by the aircraft being purchased. The first aircraft has already been acquired 

(1/8/15) by N111RZ, LLC on behalf of Monarch Air. It is my understanding that a copy of the 

promissory note containing the relevant loan terms of this loan has been provided to you by 

Monarch Air. At this point in time, it is impossible to determine the terms of any future loans. 

However, we provided some basic assumptions in paragraph 2 of my letter dated December 18, 

2014. Please assume that the terms covering the recent aircraft purchase could similarly apply 

to future aircraft loans, with variations allowed for the purchase price, amortization schedule, 

and applicable interest rates. As a point of clarification, the December 18, 2014 letter provided 

an approximate monthly payment on an anticipated loan. The actual monthly payment would 

be subject to the applicable amortization schedule. 

Please let me know if I can provide any further information on this matter. 

· 

~~API Steve Young/ ~ p 

Senior Vice President 

P.O. Box 869105, Plano, TX 75086-9105 

nwin 972.578.5000 I LegacyTexas.com 

Exhibit 2