# Connect Air

Mr. 

## David Christofano DOT/Office oflntemational Aviation 202

- 366-0584 5414 11th Street NE Calgary Alberta T2E 7E9 P: 403-291

-3227 F: 403

- 291-3295 info@connectair.ca



## Jan 30, 2015

Please find attached with this letter copies ofthe financial information you requested. Connect Air has operated solely in Canadian funds and only generates revenue from passenger flights at j is time. Ifyou require anythirW further or have a questions please do not hesitate to contact us . We are very interested in providing flights to the United States and have had client requests to do so as early as this March.

Best Regards, (") i .,.../



## c~~. **,tt~--~-=-=-)** 

# ___

**--~·4 -rn-~**  Gord Peariso

## -------------- -- ----+-- --.

CONNECT AIR LTD. FINANCIAL STATEMENTS (Unaudited -See Notice To Reader) DECEMBER 31, 2013



## . .

# Michael Peter Smith CHARTERED ACCOUNTANT
4951 Vantage Crescent N.W. 

### Calgary, Alberta · T3A IX6 Telephone (403) 286-5149 Cellular (403) 540-0355 Fax (403) 286-5149



### To: The Shareholders of CONNECT

# AI LTD. 

## NOTICE TO READER

On the basis of information provided by management I have compiled the balance sheet of Connect



# Ai~ Ltd as at December 31, 2013 and the statements of income and deficit and cash ! flows for the year then ended. 

### I have not performed an audit or review engagement 

### m respect of these financial statements and rcordingly I express no assurance thereon
. Readers are cautioned that these statements may not be appropriate for their purposes.

Calgary, Alberta 

### July 28,2014 

### Michael Peter Smith 

## CHARTERED ACCOUNTANT



## .·

### CONNECT AIR LTO. BALANCE SHEET AS AT DECEMBER 31,2013 (Unaudited- See Notice To Reade r ) 2013 2012 ASSETS CURRENT ASSETS Cash 

### $ 4 , 015 

### $ 4,0 52 Accounts receivable 69,964 105,472 GST recoverable 746 Inventory 68,600 68 ,600 Prepaid expenses 14,951 14 3 , 3 2 5 

### $ 193,075 PROPERTY, PLANT A Office furniture and eq 41, 9 07 41,907 Computer equ ipm ent 12 ,72 3 12,723 Computer software 630 630 55 , 2 60 55 ,260 Less accum ul ated amorti 2 9 , 63 4 22,3 9 0 25 , 626 3 2, 870 

### $ 168,951 

### $ 225 ,945 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and li abilities 

### $ 20 5 ,977 

### $ 223,065 GST payabl e I , 322 Due to shareholders 4 56 ,894 4 74,724 6 62, 8 71 699, Il l
SHAREHOLDERS' EQU SHARE CAPI T AL 101 10 1 DEFICIT (494, 021 ) (473 ,267) (493 ,9 20) (473, 16 6) 

### $ 16 8, 951 

### $ 225, 94 5 APPROVED BY: Director

D irectorSALES EXPENSES Advertising and Aircraft charter Amortization Bank charges and interest Crew and comissary Fuel Insurance Landing fees Licences Miscellaneous Office supplies Professional fees Rent and utilities Repairs and maintenance Salaries, wages and benefits Telephone Training Travel and entertainment CONNECT AIR LTD. STATEMENT OF INCOME AND DEFICIT FOR THE YEAR ENDED DECEMBER 31 , 2013 (Unaudited

- See Notice To Reader)

NET INCOME (LOSS) FOR THE YEAR DEFICIT- Beginning of the year DEFICIT- End of the year 

### $

$ 2013 2012
287,472 

### $ 977,950
137 274 , 370 773 , 856 7 , 244 8 , 762 8 , 8 11 8 ,360 2 , 235 2 5 , 5 95 28 9 2,075 1,029 65 382 4 , 083 2 ,2 9 9

370 4, 55 2 3,800 12,632 210 190 2,598 1 , 130 1 , 035 2 , 672 1 ,092 1 , 336 3 , 902 13 , 115 3 08,226 860 , 000 ( 20 ,7 54 ) 1 17,9 50 (4 73,2 67) ( 59 1 ,2 1 7 ) (4 9 4 ,02 1) $ (4 73,267)CONNECT AIR LTD. CASH FLOWS S ATEMENT FOR THE YEAR ENDED D ECE MBER 31,2013 (Unaudited- See Nolice To Reader)

CASH FLOWS FROM OPERATIONS Net income (loss) for the ear Adjustment for :

Amortization C hanges in non-cash work "ng capital

Accounts receivable GS T recoverable Inve ntory Prepaid expenses and de osits GST payable Accounts payab le . 

### Cosh flows pmvided by 

### opf ting adiviti" CASH FLOWS FROM INV I STING ACTIVITIES Shareholders Property, plant and equip ent 

### Cash flows pmvided by 

# (user in) investing activities Net increase (decrease) in cas Cash at the beginning of the year Cash at the end of the yea r 

### '·

2013 2012

$ (20,754) $ 1 17,950 7,244 8,762 ( 13 ,5 10) 126,712 35,508 55 ,084

(746) 124 (42, I00) 1 4,951 ( 13 ,922 ) ( I ,322) I , 3 22 ( 17,088 ) ( 126,920 ) 31,303 (126,41 2) 17,793 30 0 (17,831) 5, 5 16 (3 ,039 ) (17,831) 2,477 (38) 2 ,77 7 4 ,052 I , 2 75 $ 4 ,014 $ 4,0 52- ----

**.=___=:._-~--=-** --



### CONNECT AIR LTD. FINANCIAL STATEMENTS (Unaudited -See Notice To Reader) DECEMBER 31 2012
' •

•'

### STATEMENT OF STATEMENT OF CONNECT FINANCIAL



# co

•'

### 4951 Vantage Calgary, Alberta T3A IX6 

### CHARTERED A

NOTICE TO 

## UNTANT

DER 

### Telephone (403) 286-5149 Cellular (403) 540-0355 Fax (403) 286-5149



### On the basis · infonnation provided by 

## in '""'"'"'"""' I have compiled the balance sheet and the statements of income and r 

### Ltd 

### as at December 

### 31,
I have not
that these statements m

Calgary, June 30,2014 t in respect of these financial

not be appropriate for their purposes.

Michael Peter Smith CHARTERED ACCOUNTANT



# . .**-- --**  **-- ------~~~----~**  **--~-- -----~** 



### CONNECT AIR LTD. BALANCE SHEET AS AT dECEMBER 31,2012 (Unaudited

- See Notice ! To Reader

_

) ____ _ 2012 2011 ASSETS

Director 

# ------------------+-----------

### SALES EXPENSES 

### Advertising and promotion Aircraft charter Aircraft lease Airport improvement fees Airport security fees Amortization Bank charges and interest Credit card charges Crew and comissary Fuel Ground handling Insurance Landing fees Licences Misce ll aneous Nav Canada fees Offi ce supplies Professional fees Rent and uti lities Repairs and maintenance Sal aries, wages and benefits Telephone Training Travel and entertainment CONNECT A STATEMENT OF FOR THE YEAR ENDED

**u.I!.~LJ1'J**



### NET INCOME (LOSS) FOR THE YEAR DEFICIT- 

### Beginning of the year DEFICIT- 

### End of the year **~** 

### .

**;;..·.··~** 

### .. - -=--- - - -· . ·--- 4 •



### 31,2012

2012 2011 $ 977,950 

### $ 1 ' 113 , 131
137 2,399 773,856 377 ,221 114 , 000

2,773 4 , 735 8,762 8 ,007 8,360 11,062 7,159 25,595 30,099 289 155,428 2 1,103 2 ,075 27, 7 3 8 17,9 60 382 2 ,299 3, 860 37, 18 4 4 ,55 2 2,3 98 12,632 19,179 210 3 5 , 104 2, 598 108 , 602 1,130 207,438 2,672 3,595 1, 336 13 , 115 13, 2 50 860,000 1 ,210,294 117 , 950 (97 , 16 3 ) (591,217) (494 , 054) 

### $ (4 73, 267 ) $ (591 ,2 17)

### CONNECT AIR LTD . CASH FLOWS ST 

# 1 TEMENT FOR THE YEAR ENDED DECEMBER 31,2012 (Unaudited- See

## Notic**~** To Reader)

CASH FLOWS FROM OPERATIONS Net income (loss) for the year $ 

### Adjustment for:

Amo rti zation Changes in non-cash worki ng capital Accoun ts receivable GST recoverab l e Inventory Prepaid expenses and deposits GSTpayable Accounts payable
Cash flows provided by (used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES Shareholders Property, plant and equipme nt Cash flows provided by investing activities CASH FLOWS FROM FINANCING ACTIVITIES Bank loan Cash flows provided by financing activities Net increase in cash Cash at the beginning of the year Cash at the end of the year $


### See accompanying no tes 2012 2011

1 17,950 $ 

### (97 , 163 )

8,762 8,007 126,712 ( 89, 156 ) 55,084 11 1,79 1 124 ( 124 ) (42, 100) (26 , 500) ( 13,922 ) 37 , 107

1,322 (47 1) (126,920) (101,233) (126,412) 20,570 300 (68,586) 5,516 81,319 (3,039 ) (21 ,867) 2,477 59 ,452
9 ,7 65 9,765 2,777 631 1,275 644 4,052 $ 

### 1,275

### onnect Air Ltd. a lance Sheet As at Dec 31, 2014
)SET**~urrent** Assets

Bank of Montreal TD Bank Scotiabank Petty Cash TD USD Bank Account Scotia Bank Total Cash Accounts Receivable Allowance for Doubtful Accounts Payroll Advances Total Receivable Purchase Prepayments Prepaid Expenses Inventory Inventory Deposit C -TWK Deposit Rent Total Current Assets Capital Assets Leasehold Imp rovements Computer Equipment Accum
. Amort
. Computer Equip
... Computer Software Accum
. Amort. Computer Softw
. . . Office Furniture & Equipment Accum. Amort. -Furn. & Equip
. Net- Furniture & Equipment Vehicle Accum
. Amort
. -Vehicle Net - Vehicle Building Accum. Amort
. - Building Net - Building Total Capital Assets Other Non-Current Assets Computer Software Goodwill Incorporation Cost Total other Non-Current Assets TOTAL ASSET LIABILITY

Current Liabilities

Accounts Payable Accrued liabilities Bank Loan - Current Portion Bank Advances V i sa Payable MasterCard Payable American Express Payable Other Credit Card Payable Total Credit Card Payables Corpo r ate Taxes payable Vacation payable Vacation Payable correction El Payable Printed On: Jan 26, 2015 0.00 0
. 00 0.00 0.00 0.00 15 , 801.70 0
. 00 0.00 0
. 00

0.00 12,723.37 -8,037.76 629.97 -629.97 41 , 907.45 -20 ,966.50 0.00 0.00 0.00 0
.00

0.00 0.00 0.00 0
.00

0.00 15,801.70

0.00 0.00 0.00 0.00 68 ,600.00 0.00 0
. 00 84,401.70

25 ,626.56
0
. 00
0.00 25 ,626.56
0.00 0
. 00 0.00 0.00 110 ,028.26

80 , 783.49

4 ,000
. 00 0.00 0
. 00

0.00 0.00 8 ,068
. 57 -8,068
. 57 Page 1

### Connect Air Ltd. B.alance Sheet As at Dec 31, 2014

CPP Payable Federal Income Tax Payable Total Receiver General WCB Payable GST Charged on Sales GST Paid on Purchases lTC Adjustments GST Owing ( Refund) Prepaid Sales/Deposits Total Current Liabilities Long Term Liabilities Bank Loans Scotiaban k Mortgage Payable Loan s from Owners Total Long Term Liabilities TOTAL LIABILITY EQUITY

Owners Equity Gordon Peari so Shareholders Integra Air as per agree AP POt
... Mike Peariso Shareholders Share Cap ital Retained Earn i ngs- Previous Year Current Earnings Total Owners Equity TOTAL EQUITY LIABILITIES AND EQUITY

Printed On: Jan 26, 2015 0 . 00 0 .00
0 .00 0 .00 0 .00 0 .00 0 . 00

0 . 00 0 . 00

--- 8(783:49
225 ,891.01 0 .00 0 .00 225 , 891.01 310 ,674.50

183 ,729.43 50 , 209 . 38 23 , 110 .24 101 . 00 -494 , 021 .27

36 , 224.98 -200, 646. 24 -200 ,646 .24

110 ,028 .26 Page 2

### ConneGt Air Ltd. Income Statement Jan 01, 2014 to Dec 31, 2014

REVENUE

Sales Revenue

Sales Schedule F l ights Sales Charters Sales Cou rier Sales Maintenance Sal es Other Net S ales Other Revenue Interest Re venue Mis ce llane o us Revenue Total Other R evenue TOTAL REVENUE EXPENSE

Cost of Goods Sold Fue l Landing Fee Ground Handling Airport Security Fee A irport Imp rovemen t Fee Red De ... Airport Improvement Fee Ca lga ry A i rport Imp rovem e nt Fee Edmo n ... A i rport Impr ovement Fee Fort Me Commission T ra vel Agents ECMP engine Cost cancel flight S ub C harter E x pe nse s for crew AOG C h arter Initial Low Utilizati o n 4 y r Ma in t Nav Canad a Fees Aircraft S u pplies Landing gear Maintenance ren t Lice nci ng Le ase Aircraft GTWK Parts Saab 340 B P ropeller Maintenance r e nt H a ngar Rent Shop Supplies T ranswest P i lots expenses Tra ining Saab I nsurance C-TW K Wear and T ear may change thi.
.. M a intenan ce Exp e ns es N et P ur chases Comissary Total Cost of Goods Sold Payroll Expenses

Wages & Sa l aries Co ntract wage El Expense CPP Expense WCB Expen se Employee Benefits Total Payroll Expense General & Administrative Expe
. . . Accou ntin g & Lega l P rinte d On : Jan 26 , 2015 0.00 0 .00 0.00 0.00 2 06 , 445.30 0.00 0
.00 0.00 206,445.30
0.00 0
.00 0
.00 206,445 .30

0
. 00 0.00 0 .00 0.00 0.00 0.00 0
. 00 0
. 00 0.00 0.00 0.00 150 , 812.45 0.00 0
. 00 0
. 00 0 .00 0.00 0
. 00 0.00 0
. 00 0 .00 0.00 0.00 0.00 0
. 00 540.7 1

0.00 589
. 62 151 , 942
. 78
0
. 00 0.00 0.00 0.00 0.00 0
. 00 

### 0.00
3 , 168.00 Page 1

## Connect Air Ltd. lricome Statement Jan 01, 2014 to Dec 31, 2014
Advertising & P romotions Bad Debts Business Fees & Licenses Cash ShorUOver Courier & Postage Credit Card Charges Cleaning Consulting Prog rams Com pute r Amortization Expe nse Income Taxes Insurance Interes t & Bank Charges Office Supplies Property Taxes Motor Vehicle Expenses Miscellaneous Expenses Realized Exchange Gain/Loss Rent Repair & Maintenance Shop Suppl ies Telepho ne Travel & Entertainment Travel & Ent:Non - Reimbursable Utilities Total General & Admin
. Expen
... TOTAL EXPENSE NET INCOME

Printed On: Jan 26, 2015 0
.00 0
.00 0
.00 0.00 0.00 0
.00 0
.00 0
. 00 0
. 00 0
. 00 730
. 00 9 ,389.82

870
. 09

0
. 00 2 , 1 33
. 30 0
. 00 0
. 00 0
. 00 0
.00 0
.00 227
. 60 1 ,758
. 73 0
.00 0
. 00 18,277
. 54 170, 220 .3 2

36 , 224
.98 Page 2