UITA Utilicraft Aerospace Industries Inc (CE)

Item 2.01 Completion of Acquisition or Disposition of Assets

On December 12, 2007, Utilicraft Aerospace Industries, Inc. (the "Company"), with approval by majority shareholders consent of 15 shareholders owning approximately 62.53% of the Company's outstanding common stock and by approval of its Board of Directors, entered into an Asset Purchase Agreement with Freight Feeder Aircraft Corporation ("FFAC") to sell all of its assets for a purchase price consisting of the following;

(a) Common stock. Fifteen Million Two Hundred Fifty Thousand (15,250,000) restricted shares (the "Shares") of FFAC common stock (representing approximately 25% of FFAC's initial capitalization),

(b) Warrants. Warrants for 30,500,000 restricted shares of FFAC's Common Stock, with a strike price of US$1.00 per share of Common Stock and with a term of 5 (five) years from first-flight.

(c) Royalty. Subject to the provisions of this Section, FFAC agrees to pay UITA a 1% Royalty of the Gross Aircraft Sales recorded by FFAC in accordance with generally accepted accounting principles, less profit, commissions, royalties and mark-up on Freight Feeder Aircraft number 51 to Aircraft number 2051 sold by FFAC.

(d) Assumed liabilities. FFAC agrees to assume liabilities of the Company in the amount of $2,755,907.85.

(e) Public Company Assistance. FFAC agrees to assist UITA with its public company filing requirements (including audit and legal expenses), to provide for the Company's continued reporting under the Securities and Exchange Act of 1934 until the later of first flight of the Freight Feeder Aircraft, or two years from the date of the Agreement.

The foregoing summary of the Purchase Agreement does not purport to be complete and is qualified in its entirety by the Asset Purchase Agreement, which is attached as Exhibit 10.1 to this current report on Form 8-K, and is incorporated herein by reference.

The Company's funding has been hindered since the beginning of the year as PacifiCorp Funding Partners Trust ("PacifiCorp"), operating under a Master Financing Agreement entered into on September 12, 2005 for a total funding of $80,000,000 over a two year period, has been unsuccessful in providing funding to the Company. PacifiCorp's lack of success has been due primarily to undisciplined shareholders causing a decreasing share price since the Company began trading in December 2006 which, in turn, has hindered PacifiCorp's ability to attract the capital to exercise warrants at $.50, $1.50 and $2.50 per share. On December 6, 2007, the Board of Directors of Utilicraft Aerospace Industries, Inc. (the "Company") terminated a Master Financing Agreement with PacifiCorp and clawed-back 49,223,003 of the Company's shares of common stock previously issued to PacifiCorp. This termination was reported in a Form 8k filed by the Company on December 7, 2007. The lack of performance by PacifiCorp has moved the Company to seek other options to fund the development of the Freight Feeder aircraft.