BEFORE THE 

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

WASHINGTON, D.C. 

nFPABTMENTOF, 

•,;, -r] I 5 P U: 10 

Application of 

Air Charter, Inc. dba Air Flamenco 

for authority to conduct scheduled passenger operations as a 

commuter air carrier under 49 U.S.C. 41738 

DOCKET 

APPLICATION OF 

Air Charter, Inc. dba Air Flamenco 

Communications with rcspect to tliis document should be sent to: 

Francisco Torres 

PO Box 810352 

Carolina, PR 00981 

Telephone(s): (787)724-1105 office 

(787) 405-1592 cell 

Fax: (787) 724-6345 

Email; airflamenco@yahoo.com 

Date of Application: October 15, 2010 

Notice: Any person who wishes to support or oppose this application must file an answer within 

21 days after receipt of the application by the Department of Transportation and serve that 

answer on all persons served with this application. 
CERTIFICATE OF SERVICE 

I hereby certify that I have on this day served the foregoing application for commuter air carrier 

authority by first class mail, postage prepaid, upon the persons shown in the following service 

list. 

Air Charter, Inc. dba Air Flamenco 

Francisco Torres 

President 

Date of Service: November 30,2010 

SERVICE LIST 

FAA Flight Standard District OfTice 

POI: Radames Naveira 

Address; La Torre de Plaza las Ameritas 

525FD Roosevelt Ave. 

Suite 901 

San Juan, P.R. 00918 

Puerto Rico Ports Authorithy 

P.O. Box 362829 

San Juan, P.R. 00936-2829 

Isla Grande Airport (SIG) 

Manager: Jose O. Gandia 

Phone: (787) 729-8790 

Ceiba Airport (CBA) 

Managaer: Sigfredo Rivera 

Phone:(787)534-4101 

Vieques Airport (VQS) 

Manager: Domingo Rivera 

Phone: (787) 741-8358 or (787) 741-0515 

Culebra Airport (CPX) 

Manager: Sigfredo Rivera 

Phone: (787) 742-0022 
Table of Content 

Table of Content 2 

I. Aplication Form 3 

II. General Information 4 

A. Applicant's Information 4 

1. Address and Contact information 4 

2. Applicant's History 5 

3. Applicant's Fleet 6 

4. Applicant's Authorities History 7 

Ill.Corporate Structure and Ownership 8 

A. Applicant's organization 8 

IV.Management Expertise and Technical Ability 9 

A. Organization Chart 9 

B. Key Personnel Information 10 

V. Financial Position and Operating Plans 15 

Vl.Compliance Disposition 16 

VII. Certification 17 

VIII. Other Requirements 18 

A. Insurance and Limits of Liability 18 

B, Name/Tradename Registration 18 

IX.Exhibits 19 

Exhibit I - Safety Standard Affidavit 20 

Exhibit 2 Air Cam'er Certificate 21 

Exhibit 3 FAA Pre-Application Statement of Intent 22 

Exhibit 4 Corporate Good Standing Certification 23 

Exhibit 5 Sworn Affidavit of Citizenship for Francisco Torres 24 

Exhibit 6 Sworn Affidavit of Citizenship for Ruben Torres 25 

Exhibit 7 Sworn Affidavit of Citizenship for Cayetano Rodriguez 26 

Exhibit 8 Resumes of Francisco Torres, Ruben Torres, and Cayetano Rodriguez 27 

Exhibit 9 Financial Statemente as ofDecember 31,2007 28 

Exhibit 10 Financial Statements as ofDecember 31,2008 29 

Exhibit 11 Financial Statements as of December 31,2009 30 

Exhibit 12 Financial Statements as of August 31,2010 31 

Exhibit 13 Forecast Financial Statements for the Month Ending November 30,2010-October 31,2011 32 

Exhibit 14 Certificate of Insurance 33 

Exhibit 15 Interim Agreement 34 

Exhibit 16 State Department Certification for Air Flamenco 35 

Exhibit 17 Proposed Schedule Flights 36 
I. Aplication Form 

See attachment Application form GST 4507. 
II. General Information 

A. Applicant's Information 

1. Address and Contact Information 

Air Charter, Inc. dyT)/a Air 

Flamenco 

Physical Address: Mailing Address: 

Lindbergh Street Lot 7, South PO Box 224 

Ramp Culebra, PR 00775 

Isla Grande, PR 00907 

Company phone (787) 724-1105 

Company fax (787) 724-6345 

Contact Person: Francisco Toires 

Position: President 

Phone:(787)405-1592 

Email: airflamenco(S),yahoo.com 
11. General Information (continued) 

A. Applicant Information (continued) 

2. Applicant's History 

Air Charier, Inc. d/b/a Air Flamenco (hereinafter refen-ed as Air Flamenco) was incorporated under the 

laws of the commonwealth of Puerto Rico on June 1,1987 by Mr. Edwin Tabales and Ms. Noemi Gonzalez. 

Mr. Tabales was then elected President and Ms. Gonzalez was elected Vice-President each acquiring 50% 

of the shares. On August 25, 1993, Air Flamenco was certified as an Air Carrier under the Federal Air 

Regulations Part 135 ON- Demand Passenger and On-Demand Cargo Operations. Air Flamenco had a fleet 

of six (6) aircraft consisting of Douglas DC-3, Britten-Nomian BN-2 Islander and Piper Cherokee Six PA32. These aircrafts were used for charters and on-demand flights. On May 19,1998 Ms. Gonzalez acquired 

Mr. Tabales shares of Air Charter, Inc. corporate shares. In May 19, 1998 Ms. Gonzalez donated her Air 

Charter, Inc. corporate shares to her sons Ruben Torres and Francisco Torres, with 50% of the shares each 

and with one aircraft, a Piper Cherokee Six PA-32. Under the by-laws of the corporation a meeting was 

held and Mr. Francisco Torres was elected President-Treasurer and also Resident Agent, Mr. Ruben Torres 

was elected Vice-President- Secretary of the corporation. In March 15, 2000 and by corporate resolution 

resolved that the Corporation will also do business under the commercial name of Air Flamenco. 

Soon after the transfer of Air Flamenco a contract was negotiated with UPS to fly their cargo to the islands 

of Vieques and Culebra. That same year (1999) the United States Postal Service put out bids in which Air 

Flamenco was awarded a contract to transport the U.S. mail from the San Juan, Puerto Rico hub to the 

islands of Vieques and Culebra which are located eleven and eighteen nautical miles fioni the eastern part 

of the main land of Puerto Rico, respectively. Due to the lack of a reliable ferry system (which is operated 

by the Puerto Rico Port Authority) to Vieques and Culebra Islands, in the subsequent years the volume of 

passengers and cargo has increased to a level that the company has had to acquired additional aircrafts of a 

higlier capacity (such as the Britten-Norman BN-2 Islander) to support the demands of the region 

particularly the San Juan, Vieques, Culebra and now Ceiba formerly Roosevelt Roads Naval Air Station. 

During the months of November thru February and May thru August the volume of passengers and cargo 

also increases. Therefore, during these high seasons the numbers of flints also increases. A continued and 

reliable service from Air Flamenco has connected the resident, businesses, government agencies, 

tourism(internal and external) making it an essential and much needed services which provide for the 

residents to commute to attend medical appointments and treatments(such as dialysis, chemotherapy and 

military veterans that attend the Veterans Hospital which is located on the main land in San Juan, Puerto 

Rico), government transactions and other family matters. Tourism is one of the primary sources of 

employment and economic impact in these islands of Vieques and Culebra. Our services is an important 

link to the economy of the islands since it is the feeder for hotels, guest houses, restaurants, taxis, car 

rentals, weekend rental houses and many other areas. These activities will be covered with 8 flights on 

schedule daily from Isla Grande to Culebra and 9 flights on schedule daily from Ceiba and Culebra. 

To meet the business requirements Air Flamenco cun-ent facilities include a 22,665.32 sq/ft hangar with 

24,197.18 sq/ft of ramp space in Isla Grande Airport at San Juan, Puerto Rico. All corporate and 

management offices are located within the hangar. All aircraft heavy maintenance and inspections are 

performed by qualified FAA Certified Airframe and Power Plant Mechanics with the exception of tlie 

avionics, engine overhauls and propellers which are subcontracted to FAA Certified Repair Stations. A 

stock of common and frequently used maintenance components and parts are maintained in a stockroom 

inside the hangar. 
II. General Information (continued) 

1. Applicant Information (continued) 

3. Applicant's Fleet 

Air Flamenco is conducting operations under 14 CFR Part 135 using the fleet listed in the following table: 

AIRCRAFT § 

moiGD 

m03GD 

N904GD 

N90SGD 

N906GD 

m07GD 

N908GD 

N909GD 

N913GD 

N82JRR 

SEATTim 

9 Seats 

9 Seats 

9 Seats 

9 Seats 

9 Seats 

9 Seats 

9 Seats 

9 Seats 

9 Seats 

9 Seats 

CAPACITY 

CARGO(POVNDS) 

AVGISOO 

AVGISOO 

AVGISOO 

AVGISOO 

AVGISOO 

AVGISOO 

AVGISOO 

AVGISOO 

AVGISOO 

AVGISOO 

TYPE 

Islander 

Islander 

Islander 

Islander 

Islander 

Islander 

Islander 

Islander 

Islander 

Islander 

MODEL 

BN-2A 

BN-2A 

BN~2A 

BN-2A 

BN-2A 

BN-2A 

BN'2A 

BN-2A 

BN-2A 

BN-2B 

OWNED 

OR 

LEASE 

Owned 

Owned 

Owned 

Owned 

Owned 

Owned 

Owned 

Owned 

Owned 

Owned 

IF 

LEASED 

LESSOR 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

Exliibit I is the sworn affidavit stating that the aircrafts listed as current fleet comply with the FAA safefy 

standards. 
II. General Information (continued) 

B. Applicant Information (continued) 

4. Applicant's Authorities History 

Air Flamenco is authorized to conduct operations under the provisions of Title 14 CFR Part 135. The 

following is the descriptions of special authorizations and limitations; 

• Conduct Part 135 aircraft operations without a deicing/anti-icing procedure. 

• Accept, handle, and carry materials regulated as Hazardous Materials (HazMat). 

• Use only actual passenger and baggage weight (no combinations of average and actual weights) for all 

its aircrafts. 

• Issue an International Civil Aviation Organization (ICAO) air operator certificate (AOC) through the 

Operation Safety System (OPSS). 

• Use an approved Minimum Equipment List (MEL). 

• Use an aircraft witli nine passenger seats witli the additional maintenance requirements of 14 CFR 

Section 135.421 applicable for aircraft engine, propeller and propeller control (governor). 

• Use an aircraft with nine passenger seats with the additional maintenance requirements of 14 CFR 

Section 135.421 applicable emergency equipment. 

• Use weight and balance control procedures. 

Air Flamenco is authorized to conduct en route operations in the areas specified in the following list: 

• Caribbean - Islands and Countries of the Caribbean Sea in the Eastern Caribbean (Lesser Antilles). 

• Caribbean - Islands and Countries of the Caribbean Sea in the Greater Antilles Area, except the island 

of Cuba. 

• Caribbean - Islands and Countries of the Caribbean Sea in the Northern Caribbean Sea, except the 

island of Cuba, 

• Caribbean - Islands and Countries of the Caribbean Sea in the Southern Cai'ibbean area. 

• USA - The 48 contiguous United States and the District of Colombia. 

The FAA Air Carrier Certificate number UOIA83IU reissued in April 16, 2009; refer to Exhibh 2 Air 

Carrier Certificate. 

Air Flamenco has already sent a Pre-Application Statement of Intent (Exhibit 3) to FAA to change current 

registration to Commuter Air Carrier as per FAR 119.3. The request was issued to FAA Principal 

Operations Inspector Mr. Radames Naveira on October 6, 2010. Mr. Naveira reports to FAA/South 

Florida FSDO-19 Office which offices are located at 525 FD Roosevelt Ave., La Torre de Plaza Las 

Americas, Suite - 901, San Juan, PR 00918; telephone number (787) 764-6345, extension 254. Air 

Flamenco is also registered as approved effective date April 21, 2010 to perform air taxi operation ondemand passenger/ on demand caigo under the Pait 298 of tlie United States Department of 

Transportation. 
III. Corporate Structure and Ownership 

A. Applicant's organization 

Air Flamenco is a closed corporation formed in the Commonwealth of Puerto Rico on June 6, 1987. The 

Exhibit 4 is a statement from the Office of the Secretaiy of State where the agency states that Air Flamenco is a 

company in good standing. 

Air Flamenco partners (Francisco Torres and Ruben Torres) are citizen of the United States as shown in the 

sworn affidavits Exhibits 5 and 6 respectively. 

Air Flamenco has authorized the issue of 1, 000,0000 common stocks with a par value of $1.00. Air Flamenco 

has issued 1,000 common stocks to Francisco Torres and Ruben Torres (shareholders) in equal portions $500.00 

each. 

The following table is the information of the Air Flamenco shareholders: 

Name and Address 

Francisco Tones 

Address: 

400 Bo. Tortugo 

Apt #36 

San Juan, PR 00926 

Ruben Torres 

Address: 

Urb. Mansiones Reales 

Calle Principe de Asturias 

Guaynabo, PR 00969 

Voting Shares 

500 

500 

% of Total Shares 

OutstandinR 

50% 

50% 

The blood relationship of brothers of Francisco Torres and Ruben Tories was established in the Section 11(A)(2) 

of this document. 
IV. Management Expertise and Technical Ability 

A. Organization Chart 

AIR FLAMENCO 

ORGANIZATION CHART 

legal Depstmenl 

! 

'i 

VfcePreskteil 

OptfafonsOliMtorof 

::.• • 

I 

Accninting 

Oopaitmeni 

Administrate | 

Asttstail 1 

Gensral Manager 

SateslMaMing 

AirCogo 

f!e»ivatian$ 

CaiflOHmdler 

^ r 

^?r 

FSghlCVMiation 

OiiorPilot 

PiMs 

Station Manager 

«sss 

Uedhm s 

Helpert 

PuUicRalatlon 

tela Grande 

SIQ 

CeAie 

CBA 

COMKB 

CPX 

1. ONE MECHANIC FOR EVERY TWO (2) AIRCRAFTS 

2, ONEANDHALFd.SjCRGWKERAlRCRArT 

). ONE (1) AGENT 1T.R COUNTER, ONE (]) BAGGAGE HANDLEIt ?ER 

COUNTER AGENT 
IV. Management Expertise and Technical Abilit}' (continued) 

B. Key Personnel Information 

This section contains information of the key personnel positions and responsibilities such as Director of 

Operations, Chief Pilot, and Director of Maintenance of Air Flamenco. The key pereonnel performing these 

positions are Fi-ancisco Torres, Ruben Torres and Cayetano Rodriguez respectively who are US citizens. Please 

refer to Exhibit 5, 6, 7 for the sworn affidavits of citizenship. Furthermore, the Director of Operations and 

Director of Maintenance qualifications meet the requirement set forth in the sections 119.69 and 119.71 of the 

Federal Aviation Regulation (14 CFR 119.69 and 119.71), the Chief Pilot currently meets the requirement of 

sections 119.69 and the 119.71(d) and 119.71(d)(1) of the Federal Aviation Regulation (14 CFR 119.69, 

119.71(d), 119.71(d)(1). However, it is expected that the Chief Pilot completes die FAA requirements for Air 

Transport Pilot within the course of evaluation of this application. Air Flamenco will notify the Department of 

Transportation upon completion. Their resumes are included in the Exhibit 8. 

Francisco Torres 

Position: President Hired Date July 1,1998 

Stocks: 50% Citizenship: USA 

Responsibilities: 

1. Responsible for the total company operation. Management personnel which prior to the Company conduct 

a flight or a series of flights, must deteitnine if the flight can be conducted safely and in accordance with the 

regulations, the operations specifications, and Air Flamenco Standards, procedures and policies contauied 

in this Company Operations Manual (C.O.M.) and supported by the Training Manual. Although he may 

delegate this responsibility to other personnel, the ultimate responsibility is his. 

2. If an emergency involving the safety of passengers and a pilot deviates from any rule in FAR Part 135, it 

will be the responsibility of the President to send to the nearest FAA District Office a complete report of the 

aircraft operation involved within 10 days, including a description of the deviation and the reasons for it. 

The President will be responsible for notification of overdue aircraft as outline in this manual and he will 

also be responsible for accident notification as per NTSB 830. 

3. The President shall be responsible for recruiting and terminating all company personnel. He may delegate 

this responsibility to other persons with management responsibilities. The President will be highly 

knowledgeable of the company manual, FAA Regulations, state and government laws and regulations 

pertaining to tiie duties of his position. 

4. The President shall be responsible for: 

• Safe employees environment, training 

• Good Business practice 

• Equipments (aircraft) availability us business. Needs or development 

• Investment & Expansion 

• Marketing 

5. Interaction with local Government Agency Port Authority, Health Dpt. Municipals, etc. 

6. Establish current and long range goals, objective, plan and policies. 

10 
IV. Management Expertise and Technical Ability (continued) 

B. Key Personnel Information 

7. Review Activity Reports and Financial Statements to determine progress and status in attaining objective 

and revise objectives and plans in accordance with current conditions. 

8. Plans, coordinates and controls the Daily Operations of tlie Organizations manager. 

9. Plans and develops market, labor and public relations policies designed to improve Company's image and 

relations witli Customer, Employees, Government Agencies and Public. 

10. Evaluate performance of subordinate for compliance with regulatory agencies, policies and objectives. 

11. Establish and maintain an effective system of communication throughout the organization 

12. Ensures a safe working throughout the environment for all level 

13. Will establish and supervise Training Program for Regulation Compliance and tliose related general 

business activities. 

Francisco Torres 

Position: Director of Operations Date Hired: September I'", 2003 

Stocks: 0% Citizenship: USA 

Responsibilities: 

1. Responsible for overall operational functions of tlie Company. 

2. Prior to conducting a part 135 Flight, must determine that the Flight or series of flight can be initiated, 

conducted or terminates safely in accordance with regulations, operations specifications, C.O.M. and supported 

by the training program. 

3. Maintaining liaison with the FAA, coordinating and implementing additions, renewals and amendments to 

the Operation Specifications, and directing and coordinating the writing and revisions of the Operation Manual. 

4. Operational responsibility for Company Aircraft accident reporting to appropriate government, industry and 

community groups, 

5. Constantly being on alert for discrepancies and hazaixis of any nature observed or reported which might have 

an adverse effect on safe operations, 

6. Shall formulate policies and practices for maintaining a high degree of proficiency and professionalism to 

ensure flight and ground safety are never jeopardized. 

7. Will establish and supervise a ground and flight training program for the initial, recurrent and others type of 

training on company documentation of flight Crew Personnel. 

8. Will be responsible for the correct maintaining of records reports and check rides under the current FARs are 

including all company documentation of flight Crew Personnel. 

9. Qualifications and training of all crewmembers, including check rides and ascertains that Flight Crew 

Members maintaining proficiency, and maintaining all Fliglit Crew Record. 

11 
IV. Management Expertise and Technical Ability (continued) 

B. Key Personnel Information 

10. Furnishing all aircrafts with navigational aids, Route Charts and any necessaiy manual to conduct a safe 

flight. 

11. Furnishing flight personnel witli information or instructions on flight procedures and pmctice. 

Position: Pilot in Command Date Hired: September 1"', 2003 

Stocks: 0% Citizenship: USA 

1. Use good Judgment in any situations 

2. Keep his medical certificate current and funiish a copy to the President 

3. Report fully prepared for any ground and flight training schedule by the Company 

4. Not consume any alcohol beverages including beer for a period of at least 8 hours before the time he/she is 

to report for duty 

5. Comply with all duty and flight limitations of FAR's 

Ruben Torres 

Position: Vice-President Date Hired: September 1**, 2003 

Stocks: 50% Citizenship: USA 

Responsibilities: 

1. Coordinates Operational Policies and Procedures with the President and assist in executing those policies 

and procedures. 

2. Ensures proper report structure within the Company. 

3. Help identify opportunities and areas for improvements within the Company. 

4. Advise the President of the Company on Strategic Business Development and key Corporate planning 

issues that relate and impact the operations. 

• Determine resources allocation. 

• Keep the President informed about Business activities, performance, opportunities and recommended 

course of action. 

5. Set performance goals tai lored to each activity. 

• Maintenance Schedules 

6. Implements productivity / quality metrics designed to minimize costs and enhance safety and efficiency. 

7. Plan layouts workflow aircraft maintenance procedures. 

8. Recruits, hires, coaches and develops staff. 

12 
IV. Management Expertise and Technical Ability (continued) 

B. Key Personnel Information 

9. Assist tlie President of the Company in budget preparation, short term and long term goals with overall 

corporate objective. 

10. Ensures that working areas comply with OSHA, PROSHA, EPA and any otlier regulation agency. 

11. Ensures that operations are conducted under FAR 13 5/119 for commuter Air Charter, 

12. Performs additional assignments as required by the needs of the Company, or as Directed by the President. 

Ruben Torres 

Position: Chief Pilot Date Hired: September 1% 2003 

Stocks: 0% Citizenship: USA 

Responsibilities: 

1. Maintains familiarity with the operation of ail stations and report's findings and recommendations to the 

Director of Operations/ President. 

2. Will be responsible for the Correct Maintaining of Pilot Records and check rides under the current FAR are 

including all company documentation of Flight Crew Personnel. 

3. Review reports on pilots performance and reports to Federal Aviations Administration any circumstantial of 

non-conformances to FAR's. 

4. Conducts Company crew member training and standardization and pilot training. 

5. Monitors airplane flight manual crew activities, track crew cunency and ensures "AFM" currency, 

6. Furnishing Flight Personnel witli navigational aids, Route Charts and issuing instruction, bulletin on flight 

procedures and practices. 

7. As one of the management personnel he must determine and have sufficient knowledge of the following: 

8. Whether a part 135 flight or series of flights can be initiated, conducted, or terminates safely and procedures 

approved in Air Flamenco operations specifications, company operations manual and the appropriate 

regulations. 

9. Pilot in Command 

10. Use good Judgment in any situations 

11. Keep his medical certificate current and furnish a copy to the Director of Operation 

Position: Pilot in Command Date Hired: September l'^, 2003 

Stocks: 0% Citizenship: USA 

Responsibilities: 

1. Use good Judgment in any situations 

13 
IV. Management Expertise and Technical Ability (continued) 

B. Key Personnel Information 

2. Keep his medical certificate current and furnish a copy to the President 

3. Report fully prepared for any ground and flight training schedule by the Company 

4. Not consume any alcohol beverages including beer for a period of at least 8 hours before tlie time he/she is 

to report for duty 

5. Comply with all dufy and flight limitations of FAR's 

Cayetano Rodriguez 

Position: Director of Maintenance Date Hired: July 15,2002 

Stocks: 0% Citizenship: USA 

Responsibilities: 

1. Responsibility to see that the Company's aircraft are maintained in accordance with airworthiness standards 

prescribed by applicable regulations. Airworthiness Directive (AD's) and standard aviation practice. Will 

be responsible to complete all required reports. 

2. His duties consist of ensuring that the approved aircraft inspection program is current for all aircraft; 

ensuring tliat all applicable AD's are complied within the specified time, and retaining a chronological 

listing, devising a system for retaining the aircraft's time in service, ensuring compliance with reweighing 

multiengine aircraft for every 36 months, and certifying list of equipment installed for establishing empty 

weight and balance. 

3. He monitors aircraft empty weight and balance revising the equipment list and empty weight and balance 

data when required. He ensures that an accurate record is retained for all maintenance performed on 

company aircraft. He ensures that all discrepancies area corrected or deferred by appropriately certified 

persons. 

4. He may delegate the authority to perform his duties, but retains the responsibility. 

5. The Director of Maintenance shall be an employee of the company. If maintenance is contracted out, the 

Director of maintenance shall provide the person(s) performing maintenance and inspections with 

appropriate company forms and manual. The Director of maintenance reports to the President. 

Position: Mechanic Date Hired: September 1'*, 2003 

Stocks: 0% Citizenship: USA 

Responsibilities: 

1. Perform 50, 100, 500 and 1000 hrs inspection and line checks including troubles hooting 

2. Perform line maintenance 

3. MEL Management Program 

4. Weigli and Balance Program 

5. Suspect Unapproved Parts 

14 
V. Financial Position and Operating Plans 

Air Flamenco financial statements for the years 2007,2008, and 2009 are part of .Exhibit 9,10, and 11 respectively. 

Statements corresponding 2010 are part of Exhibit 12. The forecast financial statements are shown in Exhibit 13 

which contains Air Flamenco Forecast financial information under the commuter air carrier operations. 

15 
VI. Compliance Disposition 

Air Flamenco has an excellent compliance records with the law, rales, and regulations of the FAA, DOT and local 

government agencies. Tliere is neither pending enforcement action nor formal complaints on file that involves Air 

Flamenco it Statures or Directive. However, the FAA has issued an investigation letter dated August 23, 2010 

stating FAA discovered that Air Flamenco may have been conducting scheduled, or a commuter operation which is 

outside the scope of their carrier certificate and authority contrary to Federal Aviation Regulation (FAR) 14 CFR 

135.3 (a) 1,135.243 (a). 119.3, 119.5 (g), (i), (k), (1). The investigation is ongoing, at the present time, the FAA has 

not taken legal actions to revoke or cancel Air Flamenco certificate. 

However, Air Flamenco directives are taking actions to request both the FAA and Department of Transportation for 

a new certificate and autliority respectively to comply with FAR 135,119 and DOT Part 298. 

16 
VII. Certification 

Pursuant to Title 18 United States Code Section 1001,1 [Francisco Torres], 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 fraudulent statement or knowingly used any 

documents which contains such statements in connection with preparation, filing or prosecution of the application. 

I understand that an individual who is found to have violated the provisions of 18 USC section 1001 shall be fined 

or imprisoned not more than five years, or both. 

'^!t<&9^LiSk..<0^ y^^-'-Q-- yc>l/ ' l^oi o 

Francisco Torres 

President 

Air Flamenco 

17 
VIII. Other Requirements 

A. Insurance and Limits of Liability 

See Exhibit 14 and 15 for Certificate of Insurance (OST Form 6410) and the Interim Agreement (OST Fonn 

4523). 

B. Name/Tradename Registration 

In March 15, 2000 and by corporate resolution resolved "That the Corporation will also do business under die 

commercial name of Air Flamenco. Air Flamenco will not be a separate entity from Air Charter, Inc. The use 

of the commercial name will only be for the purpose of marketing and publicity". The registration of Air 

Flamenco was certified by the Government of Puerto Rico Department of State in San Juan on April 3,2000 as 

stated in the certificate shown in Exhibit 16. 

In addition, the Federal Aviation Administration had issued and approved the Operations Specification to Air 

Flamenco 

18 
IX. Exhibits 

All Exhibits start in next page. 

19 
Exhibit 1- Safety Standard Affidavit 

20 
AFFIDAVIT OF SAFETY COMPLIANCE 

STATE OF PUERTO RICO 

COUNTY OF SAN JUAN 

Francisco Torres, being first duly sv^rom, deposes and says: 

1. That he is duly elected, qualified and serving as President, of Air Charter. Inc. d/b/a Air 

Flamenco, and that he is authorized to and does make this affidavit for it. 

2. That all aircraft owned by Air Charter, Inc., d/b/a Air Flamenco have been certified by the 

Federal Aviation Administration and currently comply with all applicable Federal Aviation and 

Administration safety standards imder parts [ 121 ] [ 135], as well as the noise standards of Part 36 of 

the Federal Aviation regulations. 

".^•l-'tCtHsS^^ 

AfFidavit:529 

Subscribed and sworn to before me by Francisco Torres, of legal age, single and resident of 

San Juan, Puerto Rico. In San Juan, Puerto Rico, this 28* day of September, 2010. 

\^^ -

:X 
Exhibit 2 Air Carrier Certificate 

21 
USOeponment 

CTronsportOtion 

Air Carrier Certificate 

This certifies that 

Air Charter, Inc. 

Lindberg Street South Ramp Lot 7 

Fernando Luis Ribas Dominicci Airport 

San Juan, P.R. 00907 

has met the requirements of the Federal Aviation Act of 1958. as amended, and ttw rules. 

regulations, and standards prescribed thereunder for the issuance of this certificate and is 

hereby authorized to operate as an air carrier and conduct common carriage operations in 

accordance with said Act and the rules, regulations, and standards prescribed thereunder 

and the terms, conditions, and limitations contained in the approved operations specifications. 

This certlticate is not transferable and, unless sooner surrendered, suspended, or revoked, 

shall continue in effect indefinitely. 

By Direction of the Admini^rator 

Certificate number: UOIASSIU ^ t*- Sergio Lopez 

Effective date: August 25 . 1993 

Reissued : Apri l 16, 2009 

Issued at. SO-19 

(Signature) 

Manager SF FSDO 

(Tiile) 

Southern Region/FSDO-19 

(Region/Office) 

FAA Form 843018 (6S7) 
Exhibit 3 FAA Pre-Application Statement of Intent 

22 
Foriri Approved 

0MB No. 2120-0593 

01/31/2008 

^ PREAPPLICATION STATEMENT OF INTENT 

u s Department of Transportation 

Federal Aviation Adn^inistratlon 

Piftmot k Reduction Ac t Stalemant; Tllle 49 U.S.C., Section 44702 empowers the Secrel«jy of Transportaiion to isiue air carter opereting certificates and to »tat>lteh minimum eafety standards for liie 

operation of the air caitiar (o whom sucli certiticatos are issued. The eompleted Proapplicalion Stalemom of Intent (PASI) denotes an Intent tiy the applicanl lo continue tfte cortirffiallon process. Ttie local 

FAA Ftisiil Standards Oistticl Office (FSDO) uses Die PASI ID eialuate the compiexity of the proposed operation. The FAA will use the Infomatlon it oolleots arsi reviews to ensure complianoe and 

adherence to regulallans and. if necessary, take enloroemenl action on violntois of the regulations. Ttie FAA estimates the average tHiiden for this oeniricale application process, to include pnxessing of 

this form, is 96 hours. Respondents have been given no assurance of ccmttdentlalily. An agency may mjt conduct or sponsor, and a person Is not required to respon to a collection of information unless It 

displays a curaentiy valid 0M B control number. Tlie OMD control number associated with this collection is 2120-0593. Comments oonoemino the accuracy of this bunlen and sugassliofts tor reducing the 

burden should De dirapted to the FAA at: 800 Irrieoendence Ave SW. Washinoton. DC 205^1. Attn: Information ColiedJon Clearance OHie^. ABA-20. 

Section 1A. To Be Completed By All Applicants 

1. Name and mailing address of company 

Air Charter, Inc dba Air Flamenco 

P.O. Box 810352 

Caroiina, P.R. 00981-0352 

2. Address of principal base iwhere operations will be conducted 

(do not USB post office box) 

Lindberght street south ramp lot 7 

Isla Grande Airport 

San Juan. P.R. 00907 

3. proposed Startup d^te 

November 15. 2010 

A. Requested three-letter company Identifier In order of preference 

1. W 2. A 3. F 

5. flilanagement Personnel 

Name (Last, first, middle) Title Telephone (including area code) 

Torres. Francisco 

Torres, Ruljen 

Rodriguez. Cayetano 

Director of Operatio'i 

Chief Pilot 

Director of IMaintenance 

787-405-1592 

787-403-6231 

787-923-3911 

Section IB. To Be Completed By Air Operators 

6. Proposed type of operation (check as many as 

S I Air terrier Ceitificate D Part 121 

C J Operatins Certificate O Part 125 

E Part 135 

applicable) 

u i l PassertgNs and Cargo 

O Cargo Only 

l £ l Scheduled Operatioi^ 

iHi Non$cheduled Operations 

Q Single Pilot Operator 

L J Single Pilot4n-ConDmand Operator 

O Basic part 135 Openator 

Section 10. To Be Completed By Air Agencies 

7. Proposed type of agency and ratlng(s) 

O Part 145 Impair Station 

L i Domestic 

L H Foreign L J ^e w L J Renew 

D Satellite 

G Airfranie Q Inatniment 

L J Powerplant 

L J Propeller 

D Radio 

Siwi Junn Facility LJ Part 147 Maintenance Technical School 

LJ Airframe 

LJ PowBiplant 

Death OCT 0 6 2010 

L J Accassory 

L J Specialized Service 

Part 149 Parachute Loft 'rime:. 

/if : r 

INT ^ 

Sectio ^ n ID. To fie Completed By Air Opwatars 

8. Aircraft Data 

Numbers and types of aircraft 

(t>y make, model, and 

NQOIGD Islander 

N903GD Islander 

N904GD Islander 

N905GD Islander 

Ng06GD Islander 

N9076O Islander 

NdOSGD Islander 

N909GO Islander 

tvt913G0 Islander 

N821RR Islander 

BN-2A-26 

BN-2A-8 

BN-2B-26 

BN-2A-9 

BN-2A-26 

BN-2A-26 

BN-2A-26 

BN-2A-8 

aN-2A-8 

BN-2A-9 

S/N 855 

S/N 625 

S/N 2128 

S/N 339 

S/N 3008 

S/N 340 

S/N 2040 

S/N 239 

S/N 198 

S/N 338 

Number of passenger seats or 

cargo payload caoacity 

9 seat or ISOOIbs 

9 seat or ISOOIbs 

9 seat or ISOOIbs 

9 seat or 1500lbs 

9 seat or ISOOIbs 

9 seat or ISOOIbs 

9 seat or ISOOIbs 

9 seat or ISOOIbs 

9 seat or ISOOIbs 

9 seat or ISOOIbs 

9. Geographic area of Intended operations 

Caribbean- islands and Countries of the Caribbean Sea 

in the Eastern CarJbbean(Lesser Antilles) area. 

Caribbean- Islands and Countries of the Caribbean Sea 

in the Grater Antilles area.except the island of Cuba. 

Caribbean- Islands and Countries of the Caribbean Sea 

in the Northern Caribbean area, except the island of 

Cuba. 

Caribbean- islands and Countries of the Caribbean Sea 

in ttie Southern Cartt>bean area. 

JSA- The 48 contiguous United State and the District of 

Columbia. 

FAA Form 8400-6 <6-95) Supen»tlee Pravloue Edition NSN00S2-00ree9-4002 
Sectiffn tF, To Be Complete By All Applicants 

10. Additional information that provides a t)etter understanding of the proposed operation or business (attach additional s/>eefs, if necessaiy) 

Air Charter, Inc. is applying for the FAR 135 Commuter Air Carrier to support the demand of passengers and cargo to/from the region of 

San Juan, Vieques, Culebra and Ceiba. The increase in demand is due to an unreliable ferfy system operated by the Puerto Rico Port 

Authority and the need of the population of Vieques and Culebra lo access to medical services, appointments, and treatments (including 

and not limited to cancer and diabetes patients and veterans); universities and colleges; and government agencies. 

In addition, tourism is one of the primary sources of employment in Vieques and Culebra. Areas such as hotels, guess houses, 

restaurants, taxis, car rentals, weel<end rental houses, and many more business are fed by Air Charter, Inc dba Air Flamenco. 

11. The statements and information contained on this form denote an Intent to apply for FAA certification. 

Signature 3^ - ^ Date 

October 06 ,2010 

Natne and Title 

Francisco Torres Director of Operations 

Section 2. To Be Completed By FAA District Office 

Received by (district office): Date forwarded to Region: 

Date: For: Q Action D Infotmation only 

Remarks 

San Juan Facility 

OCT ft 6 2010 

Time: 

INT_ 

J ^ 

Mf 

Section 3. To Be Completed By Regional Office 

Received i>y: Precertlfication Number: 

Date: Date coordinated with AVN-120: 

District office assigned responsibility: Date fonwanied to district oftice; 

Rennarks 

F AA For m 6400-6 <S.9S) supersedes Previous Edition N8N: 0052-00-889.4002 
Exhibit 4 Corporate Good Standing Certiflcation 

23 
Gobierno de Puerto Rico 

DEPARTAMENTO DE ESTADO 

San Juan, Puerto Rico 

CERTIFICADO DE CUMPLIMIENTO 

("GOOD STANDING") 

Yo, KENNETH McCLINTOCK HERNANDEZ, Secretario de Estado del Estado Libre 

Asociado de Puerto Rico, 

CERTIFICO: Que, a tenor con las disposiciones de la Ley General de Corporaciones, 

"AIR CHARTER, INC.", registro 66559 una corporacion con fines de lucro organizada 

bajo las leyes del Estado Libre Asociado de Puerto Rico ha cumplido con la radicacion 

de Informes Anuales. 

EN TESTIMONIO DE LO CUAL, firmo la 

presente y hago estampar en ella el Gran Sello 

del Estado Libre Asociado de Puerto Rico, en 

la ciudad de San Juan, hoy 6 de octubre de 

2010. 

^-QALQiuAoi^ 

KENNETH McCLINTOCK HERNANDEZ 

Seoretario de Estado 

KfAH/mara 

0830643/0711 ^ $30.00 
Exhibit 5 Sworn Affidavit of Citizenship for Francisco Torres 

24 
AFFIDAVIT OF CITIZENSHIP 

STATE OF PUERTO RICO 

COUNTY OF SAN JUAN 

Francisco Torres, being first duly sworn, deposes and says: 

1. That hg/she is duly elected, qualified and serving as Director of Operations, of Air 

Charter. Inc. d/b/a Air Flamenco, and that jjp/she is authorized to and does make this affidavit for 

it. 

2, That Francisco Torres, is a citizen of the United States within the meaning of 49 U.S.C. 

4012(a)(15). 

Affidavit:527 

Subscribed and sworn to before me by Francisco Torres, of legal age,single and resident of 

San Juan, Puerto Rico. In San Juan, Puerto Rico, this 28* day of September, 2010. 

•w./// . 
Exhibit 6 Sworn Affidavit of Citizenship for Ruben Torres 

25 
AFFIDAVIT OF CITIZENSHIP 

STATE OF PUERTO RICO 

COUNTY OF SAN JUAN 

Rub^n Torres, being first duly sworn, deposes and says: 

1. That iie/she is duly elected, qualified and serving as Chief Pilot, of Air Charter. Inc d/ba 

Air Flamenco, and thatijg/she is authorized to and does make this affidavit for it. 

2. That Ruben Torres, is a citizen of the United States within the meaning of 49 U.S.C. 

4012(a)(15). 

./^ ^ 

AfGdavit:528 

Subscribed and sworn to before me by Ruben Torres, of legal age, married and resident of 

San Juan, Puerto Rico. In San Juan, Puerto Rico, this 28* day of September, 2010. 
Exhibit 7 Sworn Affidavit of Citizenship for Cayetano Rodriguez 

26 
AFFIDAVIT OF CITIZENSHIP 

STATE OF PUERTO RICO 

COUNTY OF SAN JUAN 

Cayetano Rodriguez, being first duly sworn, deposes and says: 

1. That hg/she is duly elected, qualified and serving as Director of Maintenance, of Air 

Charter Inc. d/b/a Air Flamenco, and that Jie/she is authorized to and does make this affidavit for it. 

2. That Cayetano Rodriguez, is a citizen of the United States withm the meaning of 49 

U.S.C.4012(a)(15). 

$ ^ < ^ ^ 

Affidavit:526 

Subscribed and sworn to before me by Cayetano Rodriguez, of legal age, single and resident 

of Toa Alta, Puerto Rico. In San Juan, Puerto Rico, this 28* day of September, 2010. 

mM. .r - '!:\ 
Exhibit 8 Resumes of Francisco Torres, Ruben Torres, and Cayetano Rodriguez 

27 
400 BO. Tortugo Apt. 36 

San Juan, PR 00926 

761.787-724-1106 

Gel. 787-405-1562 

FRANCISCO TORRES GONZALEZ 

Objective 

Accomplishm^its: 

To obtain my professional skill as President and Director of Operations on 

the Company. 

• Increase aircraft fleet since acquired the position as a President 

• Increase revenues acquired by cargo contact. 

" Expanding Charter routes throughout different destinations. 

• Develop business relationship, with Government Municipalities of Vieques 

and Culebra 

Experience Jiily 1,1998-Present 

Air Line San Juan, PR 

President 

Air Cliarter, inc 

July 1,1998-Present Air Charter, Inc Air Line San Juan, PR 

Pilot in Command 

• Air (barter, Inc d/b/a Air Flamenco is part 135 on demand operator. 

• The Caribbean FSDO 21 holds the Air Canier Certificate. 

October 25.1996 to April 1,1998 Flamenco Airways San Juan, PR 

Airline 

LdOader Supervisor 

" Flamenco Airways {no longer in existence), was apart 135 commuter Air 

Carrier whose certificate was held by the Caribbean FSDO 21. 

November 20,1995 to March 10,1996 West Atlantic Air San Juan, PR 

Airline 

Station IWanager 

• West Atlantic (on longer in existence), was a part 125 Mr Cam'er whose 

certificate was held by the Caribbean FSDO 21. 

Education 1993-1997 Universidad Metnspolitan San Juan, PR 

« B.A., Business Administration. 

1994-1994 Caribe Aviation 

• Private Aviation 

San Juan, PR 

1995-1995 Caribbean Flight Training 

• Instalment Pilot 

San Juan, PR 

1996-1996 CaribeAwation 

• Commercia! and Mutfi-Engine 

San Juan, PR 
400 Bo. Tortugo Apt. 36 Tel. 787-724-1105 

San Juan, PR 00926 Ce). 787-405-1592 

FRANCISCO TORRES GONZALEZ 

Filght Qualifications Airline Transport Pilot Total Time: 2515.3 

P.I.C: 2467.2 

Single Engine: 573.7 

Airplane Multiengine Land Muiti-Engine: 1893.5 

Commercial Privilege Night Flight: 280.4 

Airplane Single Engine land & Sea Cross Country: 2212.7 

Reference Upon Request. 

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Ruben Torres Gonzalez 

P.O. Box 810352, Carolina, PR 00981-0352 

Mobile Phone: (787)403-6231 email: rtorresn901 @gmail.com 

FLIGHT TIME TOTAL 4,560 Multi Engine 3,220 

PIC 4,445 Single Engine 1,340 

Cross Country 3,290 NightFIight 418 

Flight Simulator 21.9 Totallnstrument (Hood) 86 

RATINGS & CERTIFICATES 

• Commercia! Pilot: Instrument Airplane, Single Engine Land 

and Sea and Multi Engine Land. 

• FAA Second Class Medical 

• FCC Radio Operator Certificate 

EMPLOYMENT EXPERIENCE 

2004 to Present 

August 1998 

October 1997 

February 1997 

September 1994 

EDUCATION 

December 1997 

July 1997 

April] 997 

September 1994 

Air Charter, Inc. 

Chief Pilot, Vice President 

Air Charter, Inc. 

Pilot, Vice President 

Aerial Imagine 

Pilot 

Aerial Architectural Photography, Inc. 

Pilot 

Flamenco Airways, Inc. 

Loader 

Caribbean FlightTrainmig 

• Instrument Pilot(ASFJ AMEL) 

Jack Brown's Seaplanes Base 

• Single Engine Sea Rating 

Caribe Aviation 

• Commercial Pilot 

Caribe Aviation 

San Juan, PR 

San Juan, PR 

Bayam6n, PR 

San Juan, PR 

San Juan, PR 

San Juan, PR 

Winter Haven, FL 

San Juan, PR 

San Juan, PR 

• Private Pilot 

SKILLS Pilot Expirience in C-150/C>210/C-206/Pa-32-260/Pa-28-140/ 

Pa-23-160/Pa-23-I50/Pa-23-150/Pa-23-300/BN-2A/PJ3-S. 
AMERICA » J>% 

JWMniMABNMMMiMM yj ^ 

'^iaSisiSfs,-.,;, ' 
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CAYETANO RODRIGUEZ DIAZ 

OBJECTIVE 

EXPERIENCE 

To offer the best of my knowledge and experience in a challenging position in a 

progressive enterprise where the opportunity of professional gro-wing, human 

enhancement and a attractive working environment motivate me every day to work 

toward tlie goals of die institution, marking it through my dedication and ability to be 

successful. 

July 15,2002-PresentAir Charter, Inc dba Air Flamenco San Juan, PR 

Director ofMaitiUtJance 

• Provide gridance, direction and training to personnel under my supervision. 

• Ensure all maintenance inspections, part handlings and record keeping is coarried out 

in accordance with die procedures set forth in Company Manuals and Appropriates 

fars. 

• Monitor Aircraft empty weight and balance revise the equitpment list and empty or 

operate weight and balance data when required. 

• Approved ale inspection program is current for aB aircraft ensuring that all applicable 

AD'S are complied witiiin the specified time, and retaining a chronological listing. 

Jan 17, 2001 to July 13,2002 (Part Time) 

Aircraft Mechanic 

• Perform 50 and 100 hrs inspection 

• Perform line maintenance 

June 3,1998 to July 22,2002 Isla Nena Air Service, Inc Vieques, PR 

Aircraft Mechanic. Airline 

« Perform 50 and 100 hrs mspecrion 

• Perform line maintenance. 

May 10,1992 to Jun 14,1998 Tol Air, International Airport of Puerto Rico San Juan, PR 

Aircraft Mechanic Airline 

• Perform 100 hrs inspection and line checks including trebles hooding. 

Aug 29,1987 to May 11,1992 Flamenco Air Ways 

Aircraft Mechanic Airline 

• Perform 50-100-500-1,000 hrs inspections 

• Perform line maintenance 

San juan, PR 
ADITINAL EXPERIENCE 

EDUCATION 

Piper Cheroike, PA-300, Piper A:^ecPA-23-250, Cessna 152, 172, Cessna 402, 

Cesna Caraban, Britten Norman Islander, Beech Craft Super 18 Twin 

Engine (Twin Beech), Douglas DC-3, Convair 240,340,440. 

1987-1989 Miguel Such. Vocational School 

• Airframe, Power Plant, curriculum certificates and ratings 

« FAA Airframe / PP certificate 

» FAA Inspection Certificate authorization (lA). 

San juan, PR 

OVERVIEW 

Highly motivate individual with a special talent for working with people from all walks of 

life. Quick to learn new tasks and adapt to dynamic environments. Disciplined in the 

procedural aspects of a job, while independent minded in order to ensure die flexibiltity 

to understand and apply new concepts and ideas. Effective in the set-up of priorities and 

establishing objectives, excellent interpersonal relations within the organization and with 

outsiders alike. Strong leadership and communication skills. Computer oriented. Good 

presentation skills. 

REFERENCES 

Will be fiitnished upon request. 

FAX (123) 098-7fi54 -E-MAIL ME@MYCOMPANy.COM 

BO. Onri Z SECTOR VELILL A 'TO A ALTA , P R 0095.^ • PHON E (787) 92.')-.'i911 
mpp^m!fr'.J:^'^WM 

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:e^. . l^l'Slv! -'rife- ! •:.J-?v.J)'j'J...-'-.'^.-"j|.4 I = 
Exhibit 9 Financial Statements as ofDecember 31,2007 

28 
AIR CHARTER, INC. 

FINANCUL STATEMENTS 

DECEMBER 31,2007 

TOGETHER WITH INDEPENDENT 

AUDITOR'S REPORT 
DiAZ BERCNES/ H M.\fniL\ DiA/ |ill!<;Nti. (:.P.A. 

JACOB O iJB m PiDRo F. M<(>oo. c:.PA., CKP. 

CON2ALE2 /M m (una OONXAU/, CPA 

w,^.f. ij^^m MANimvioTA, c.f'.A., c.v.A. 

xCo. 

'CBlTinBlFtlBlG 

ACCOUNTANrs 

INDEPENDENT AUDITOR'S REPORT 

To: The Board of Directors of Air Charter, Inc. 

Carolina, Puerto Rico 

We have audited the accompanying balance sheet of Air Charter, I|tic. as ofDecember 31,2007, and 

the related statements of income and retained ^mings, and cash flows for the year then ended. 

These financial statements are the responsibility of the Company'smanagement. Our responsibility 

is to express and opinion on these financial statements based on our audit. 

We conducted our audit in accordance with auditing standards generally accepted in the United 

States of America. Those standards require that we plan and perform the audit to obtain reasonable 

assurance about whe&er die financial statements are free of material misstatement. An audh 

includes examining, on a test basis, evidence supporting the amouttts and disclosures in the fmancial 

statements. An audit also includes assessing the acoountmg principles used and significiant estimates 

made by management, as well as evaluating the overall financial staitement presentation. We believe 

that our audit provides a reasonable basis for our opinion. 

In our opinion, the financial statements referred to in the first par^rpph present fairly, in all material 

respects, the financial position of Air Charter, Inc. as of Decembeij 31,2007, and the results of its 

operations and its cash flows for the year then ended in confornjity with accountmg principles 

generally accepted in the United States of America. ^^^^ ^ 

Januaiy 31,2008 . ..^K«S^CO"^'Si&^^ StN*^ 

San Juan, Pit&0^^\^'^fi• '" ': • ,,.x.v' 

License #22 

Expiring cg^i^t^'i\7p3&^ 

\)&(Ti V y o 

POBOX 361401, SANIUAN, PUERTO RICO 00M6-1401 • TEL. 787 77.3 0101 • FAX 787 77:10115 
CURRENT ASSETS 

AIR CHARTER, INC. 

BALANCE SHEET 

DECEMBER 31,2007 

ASSETS 

Cash 

Accounts receivable 

Prepaid income tax 

Prepayments 

125,220 

825 

10,459 

82.143 

218,647 

PROPERTY AND EQUIPMENT 

Aircraft 

Leasehold improvements 

Vehicles 

Office 

OfBce equipment 

Computers 

Accumulated depreciation and amortizatHnfob.«f"^fet^Wi^ ''^ji?^/^,. 

1,976,904 

54,490 

42,515 

450,000 

58,842 

15,995 

2,598,746 

(1>400,571) 

198,175 

"^^^ ^ 

16,822 

The accompanying notes are an integral part of this balance sheet. 
CURRENT LIABILITIES 

Current portion of: 

Loans payable 

Notes payable 

Accrued interest payable 

Accounts payable 

Accrued expenses payable 

LONG TERM DEBT 

Loans payable 

Notes payable 

Accrued interest payable 

AIR CHARTER, INC. 

BALANCE SHEET 

DECEMBER 31,2007 

LIABILITIES 

STOCKHOLDERS' EQUITY J ^ 

Common stock of $ 1 par valu§ iMjsg^k^lljg ^ ^^^Tter^ 

authorized; 1000 shares issued a&tej^|^9^'a<?>4^JV?s ^ 

Additional paid in capital Pn^y^^^A?¥^^& 

Retained earnings 

6, 

$ 

'''^^^?2^^ -

51,015 

88,900 

55,438 

25,475 

12,703 

233,531 

572,729 

305,800 

72,264 

950,793 

IJH324 

1,000 

110,000 

121,498 

$ 1,416.822 

The accompanying notes are an integral part of this balance sheet. 
AIR CHARTER, INC. 

STATEMENT OF INCOME AND RETAINED EARNINGS 

FOR THE YEAR ENDED DECEMBER 31,2007 

REVENUES 

Service income $ 3,001.503 

OPERATING EXPENSES 

Salaries and payroll taxes 516,727 

Gasoline and oil 595,766 

Depreciation and amortization 330,652 

Repairs and maintenance 536,377 

Professional fees 250,552 

Insurance 175,180 

Landing and passenger fees 204,536 

Rent 88,574 

Utilities 46,545 

Credit card commissions 28,662 

Office expenses 32,511 

Vehicles 15,734 

Representation and travel 1,770 

Other taxes 14,525 

Advertising 4,745 

Other expenses Tftpot, 237 

Income fmm operations ^Qk^^'^Ss^^^^^^^ ^ 

The accompanying notes are an integral part of this financial statement. 
AIR CHARTER, INC. 

STATEMENT OF INCOME AND RETAINED EARNINGS 

FOR THE YEAR ENDED DECEMBER 31,2007 

OTHER INCOME (EXPENSES) 

Interest income 

Gain on disposal of property and equipment 

Interest expense and bank charges 

Income before income tax 

Income tax 

NET INCOME 

Retained earnings, beginning of the year 

1,578 

(114.942) 

(113,364) 

45,046 

(11,381) 

33,665 

R«.ta«)«.TMi,.g,,«ioftoyca, tBESEWW^^^';^^^^! ^ 

««>-SSv^fef^ 'S^TOAl^O 

vos 

The accompanying notes are an integral part of this financial statement. 
AIR CHARTER, INC. 

STATEMENT OF CASH FLOWS 

FOR THE YEAR ENDED DECEMBER 31,2007 

Increase (Decrease) in Cash and Cash Equivalents 

CASH FLOWS FROM OPERATING ACTIVITIES 

Net income 

Adjustments to reconcile net income to net 

cash provided by operating activities: 

Depreciation and amortization 

Change in assets and liabilities: 

Increase in: 

Prepayments 

Accounts payable 

Accrued expenses 

Decrease in: 

Accounts receivable 

Accrued interest payable 

Due to officers 

Income tax paid 

Income tax expense 

Total adjustments 

33,665 

330,652 

(704) 

3.085 

4,897 

8,277 

(10,254) 

(29,970) 

(27,604) 

11.381 

289.760 

Net cash provided by operating activities Sd^^iF-STATBMENTX J »....-• 323.425 

CASH FLOWS FROM INVESTING J^CTiyiTJ^^'^^J^rH^i^f^^^i^^CBSSA^^,^ ^ 

Purchase of property and equipment THB?JERrox) UND£ 

The accompanying notes are an integral part of this financial statement. 
AIR CHARTER, INC. 

STATEMENT OF CASH FLOWS 

FOR THE YEAR ENDED DECEMBER 31,2007 

Increase (Decrease) in Cash and Cash l^quivalents 

CASH FLOWS FROM FINANCING ACTIVITIES 

Proceeds from loans payable 

Principal payments of loans payable 

Payments of notes payable 

36,250 

(84,018) 

(140.400) 

Net cash used by financing activities 

Net increase in cash 

Cash, at beginning of year 

Cash, at end of year 

A1V^> s 

n^^.'or-

(188,168) 

'--*^g^^g.. 

The accompanying notes are an integral part of this financial statement. 
AIR CHARTER, INC. 

NOTES TO FINANCUL STATEMENTS 

DECEMBER 31,2007 

NOTE A - OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

OPERATIONS 

Air Charter, Inc. was incorporated on June 1,1987, in the Commonwealth of Puerto Rico. 

SIGNIFICANT ACCOUNTING POLICIES 

A summary of the significant accountii^ policies consistently applied in the preparation of the 

accompanying financial statements follows. 

i) Use of estimates -

In preparing the Company's financial statements, management is required to make 

estimates and assumptions that affect the reportediamounts of assets and liabilities, 

the disclosure of contingent assets and liabih'ties at the date of the financial 

statements, and the reported amounts of revenues ^ d expenses during the reporting 

period. Actual results could differ from those estimates. 

ii) Property and equipment -

Property and equipment are stated at cost, less; accumulated depreciation and 

amortization. Depreciation and amortization are computed using the straight-line 

method over the estimated useful lives of the assetjs. 

As of December 31,2007, e^^JImated useful live of property and equipment was as 

follows: ^ ^^"S^^^lAT ^rU 

Leasehold improvements 5 years 

Vehicles 3 to 5 years 

Office 30 years ; 

Office equipment 3 to 5 years i 

Computers 3 years i 

i 

( 
At the time property and equipment are sold or otherwise disposed of, the cost and 

related accumulated depreciation and amortization are removed from the books and 

the resulting gain or loss, if any, is credited or charged to operations. 

ill) Cash and cash equivalents -

The Company considers all highly liquid debt instruments purchased with a maturity 

of three months or less to be casli equivalents. 

NOTE B - LOANS PAYABLE 

As ofDecember 31,2007, the Company had the following loans payable: 

Description Amount 

8.25% loan payable to bank, secured with office, 

due in monthly installments of $3,881 through June, 2021 $ 385,368 

7.50% unsecured loan payable due in yearly installments 

of $42,682 through August 1,2014 226,068 

7.80% vinsecured loan payable to financing institution, 

due in monthly installments of %6fi 18 through May, 2007 12.308 

Total 623,744 

Less current portion (51,015) 

Long term portion $ 572.729 

Principal payments of loans payable for the next five and later years following December 31,2007 

are as follows: 

Year Amount 

2008 $67,027 

Later years 416.972 

Total $671.152 
NOTE C - NOTES PAYABLE 

At December 31,2007 the Company had the following notes payable: 

Description „______ „ Amoqnt 

9.75 % note payable secured with aircraft due in annual principal 

installments of $30,000 due in August 1,2007 through 2010. 

Interest is paid on a yearly basis every August 1 as follows: $ 90,000 

Year Amount , 

2008 $ 14.625 

2009 . 17,550 

2010 20,475 

9.75 % note payable secured with aircraft due in annual principal 

installments of $ $20,000 due in May 1,2007 through 2009. hiterest 

is paid on a yearly basis every May 1 as follows: 40,000 

Year Amount 

2009 $11,700 

2010 13,650 

9.75 % note payable secured with aircraft due in annual principal 

installments of $ $21,400 due in June 1,2007 through 2012, 

Interest is paid on a yearly basis every June 1 as follows: 107,200 

Year Amount 

THiiSB 3?rNANClA.L STA'nSMENTS HAVE BEEN PREPARED 

-inMO^'A THE COMPANY (CX)MRAMeS) BOOKS 

AND RKrM" « AFTER UAKMO ALLNB(3jg8XRY .ADJfUSTMENTS 

rnHmHT^a-© msYBEP^SENi'THffi-3i!tfoL. STAI:EMENTS 

2010 FORTKBf!E»i)ODUNDBieW83ilT. 

2011 12,519 

2012 14,742 
JDescm !tion 

i^ffifiunt 

9.75 % note payable secured with aircraft due in annual principal 

installments of $ $17,500 due in Februaiy 1,2007 through 2016. 

Interest is paid on a yearly basis every February I as follows: 

Year 

2008 

2009 

2010 

2011 

2012 

2013 

2014 

2015 

2016 

$3,413 

5,119 

6,825 

8,531 

iO.238 

n,944 

13,650 

15,356 

17,063 

NOTE D - RELATED PARTY TRANSACTION! 

THESE FIN/*" During the year ended December 3ir®0i $47,700. 

rs 

iS7,S00 

THESE FINANCIAL STATEMENTS HAVE BEEN PREPARED 

iber 3 Ifg0i|SMHRCOMPANy (COMlVJffliS) BOOKS 

AM-} RTJCOitDS AMmEcu!SS^jaaid>!«(atejrMW *. 

TtmiiETO AND Tl-ffiY KBPRESK^' 'Hf I ., ^ .MAL STA 

FOR r m PERIOD UNDSR AUDIT, 

'Anting to 
Exhibit 10 Financial Statements as ofDecember 31,2008 

29 
AIR CHARTER, INC. 

FINANCIAL STATEMENTS 

DECEMBER 31, 2008 

TOGETHER WITH INDEPENDENT 

AUDITOR'S REPORT 
DiAZ BERGMEy 

jACOBO 

GONZALEZ 

ViOTA 

&Co. 

MANUEI DI « BERCNES, C.P.A. 

PfORO E JACOBO, CPA , C.F.P. 

J0RCEGbNZAli2,CPA. 

MANUEI VioyA, C.P.A., C.V.A. 

INDEPENDENT AUDITOR'S REPORT 

To: The Board of Directors of Air Charter, Inc. 

Carolina, Puerto Rico 

We have audited the accompanying balance sheet of Air Charter, Inc. as ofDecember 31,2008, and 

the related statements of income and retained earnings, and cash flows for the year then ended. 

These fmancial statements are the responsibility of the Company's management. Our responsibility 

is to express and opinion on these financial statements based on our audit. 

We conducted our audit in accordance with auditing standards generally accepted in the United 

States of America. Those standards require that we plan and perform the audit to obtain reasonable 

assurance about whether the financial statements are free of material misstatement. An audit 

includes examining, on a test basis, evidence supporting the amounts and disclosures in tiie financial 

statements. An audit also includes assessing the accounting principles used and significant ^Ptimates 

made by management, as well as evaluating the overall financial statement presentation. We believe 

that our audit provides a reasonable basis for our opinion. 

In our opinion, the financial statements refeired to in the first paragraph present fairly, in all material 

respects, the fmancial position of Air Charter, Inc. as of December 31,2008, and the results of its 

operations and its cash flows for the year then ended in conformity with accounting principles 

generally accepted in the United States of America. 

Januaiy 31,2009 

San Juan, Puerto Rico 

License ?^20 

Expiring on December 1,2010 

536257_1 

'v^fo^ 

PO BOX 361401, SAN JUAN, PUERTO RiCO 00936-1401 • TEL. 787 773 0101 • FAX 787 773 0115 
CURRENT ASSETS 

AIR CHARTER, INC. 

BALANCE SHEET 

DECEMBER 31,2008 

ASSETS 

Cash 

Accounts receivable 

Prepayments 

111,251 

825 

69.305 

RECEIVABLE FROM RELATED PARTY 

181,381 

90,000 

PROPERTY AND EQUIPMENT 

Aircraft 

Leaiichold improvements 

Vehicles 

Hangar 

Office equipment 

Computers 

2,113,950 

56,990 

74,139 

450.000 

68,801 

17.330 

Accumulated depreciation and amortization 

2,731,210 

(1,691.797) 

1.089.413 

$ 1,360,794 

The accompanying notes are an integral part of this balance sheet. 
AIR CHARTER, INC. 

BALANCE SHEET 

DECEMBER 31,2008 

LIABILITIES AND STOCKHOLDERS' EQUITY 

CURRENT LIABILITIES 

Current portion of: 

Loans payable 

Notes payable 

Accrued interest payable 

Accounts payable 

Accrued expenses payable 

Due to related party 

Income tax payable 

28,729 

li6,556 

44,841 

34,354 

22,607 

12,610 

581 

LONG TERM DEBT 

260.278 

Loans payable 

Notes payable 

Accrued interest payable 

366.548 

389,586 

79,334 

The accompanying notes are an integral part of this balance sheet. 

335.468 

STOCKHOLDERS' EQUITY 

1,095,746 

Common stock of $1 par value 1,000,000 shares 

authorized; 1000 shares issued and outstanding 

Additional paid in capital 

Retained earnings 

1,000 

110,000 

154,048 

265,048 

$ 1,360,794 
AIR CHARTER, INC. 

STATEMENT OF INCOME AND RETAINED EARNINGS 

FOR THE YEAR ENDED DECEMBER 31, 2008 

REVENUES 

Service income $ 2,594,724 

OPERATING EXPENSES 

Salaries and payroll taxes 

Gasoline and oil 

Repairs and maintenance 

Depreciation and amortization 

Professional fees 

Landing and passenger fees 

Insurance 

Rent 

Utilities 

Office expenses 

Credit card commissions 

Representation and travel 

Vehicles 

Other taxes 

Advertising 

Other expenses 

503,643 

561,586 

310,592 

291,224 

175,984 

158,843 

151.753 

114,043 

56.400 

43,884 

37,723 

20,293 

i 7,575 

17,201 

5,219 

754 

(2,466,717) 

Income from operations 128.007 

The accompanying notes are an integral part of this financial statement. 
AIR CHARTER, INC. 

STATEMENT OF INCOME AND RETAINED EARNINGS 

FOR THE YEAR ENDED DECEMBER 31,2008 

OTHER INCOME (EXPENSES) 

Interest income 

Interest expense and bank charges 

479 

(83,371) 

Tlie accompanying notes are an integral part of this financial statement. 

(82,892) 

Income before income tax 

Income tax 

45,115 

(12.565) 

NET INCOME 32,550 

Retained earnings, beginning of the year 121,498 

Retained earnings, end of the year $ 154,048 
AIR CHARTER, INC. 

STATEMENT OF CASH FLOWS 

FOR THE YEAR ENDED DECEMBER 31, 2008 

Increase (Decrease) in Cash and Cash Equivalents 

CASH FLOWS FROM OPERATING ACTIVITIES 

Net income 

Adjustments to reconcile net income to net 

cash provided by operating activities: 

Depreciation and amortization 

Change in assets and liabilities: 

Increase in; 

Receivable from related party 

Accounts payable 

Accrued expenses payable 

Decrease in: 

Accounts receivable 

Prepayments 

Prepaid income tax 

Accrued interest payable 

Income tax paid 

Income tax expense 

32,550 

291,224 

(90,000) 

8,879 

19,514 

12.838 

10,459 

(3,527) 

(11,984) 

12,565 

Total adjustments 249.968 

Net cash provided by operating activities 282,518 

CASH FLOWS FROM INVESTING ACTIVITIES 

Purchase of property and equipment (164,679) 

The accompanying notes are an integral part of this financial statement. 
AIR CHARTER, INC. 

STATEMENT OF CASH FLOWS 

FOR THE YEAR ENDED DECEMBER 31, 2008 

Increase (Decrease) in Cash and Cash Equivalents 

CASH FLOWS FROM FINANCING ACTIVITIES 

Proceeds from loans payable 

Principal payments of loans payable 

Payments of notes payable 

25,963 

(43,145) 

(114,626) 

Net cash used by financing activities (131.808) 

Net decrease in cash 

Cash, at beginning of year 

(13.969) 

125.220 

Cash, at end of year $ 111,251 

The accompanying notes are an integral part of this financial statement. 
AIR CHARTER, INC. 

NOTES TO FINANCIAL STATEMENTS 

DECEMBER 31,2008 

(1) Operations and summary of significant accounting policies -

(A) Operations -

Air Charter, Inc. was incorporated on June 1,1987, in the Comrnonwealth of Puerto 

Rico. 

(B) Summary of significant accounting policies -

A summary of the significant accounting policies consistently applied in the 

preparation of the accompanying financial statements follows. 

0 Property and equipment -

Property and equipment are stated at cost, less accumulated depreciation and 

amortization. Depreciation and amortization are computed using the straightline method over the estimated useful lives of the assets. 

As ofDecember 31,2008, estunated useful live of property and equipment 

was as follows; 

Estimated 

Description Useful Live 

Aircraft 5 years 

Leasehold improvements 5 years 

Vehicles 3 to 5 years 

Hangar 30 years 

Office equipment 3 to 5 years 

Computers 3 years 

At the time property and equipment are sold or otherwise disposed of, the 

cost and related accumulated depreciation and amortization are removed 

fi*om the books and the resulting gain or loss, if any, is credited or charged to 

operations. 

ii) Cash and cash equivalents -

The Company considers all highly liquid debt instruments purchased with a 

maturity of three months or less to be cash equivalents. 
iii) Use of estimates -

In preparing the Company's financial statements, management is required to 

make estimates and assumptions that affect the reported amounts of assets 

and liabilities, the disclosure of contingent assets and liabilities at the date of 

the financial statements, and the reported amounts of revenues and expenses 

during the reporting period. Actual results could differ from those estimates. 

(2) Loans payable -

As of December 31,2008, the Company had the following loans payable: 

Description Amount 

8.25% loan payable to bank, secured with office, 

due in monthly installments of $3,881 through July, 2011 $ 370,224 

1.99% loan payable to financing institution, secured with 

vehicle, due in monthly installments of $259 through 

June, 2013 13,369 

7.46% unsecured loan payable to financing institution, 

due in monthly installments of $2,967 through April. 2009 11.684 

Total 395,277 

Less current portion (28.729) 

Long term portion $ 366.548 

Principal payments of loans payable for the next five years following December 31,2008 are 

as follows; 

Year Amount 

2009 $28,729 

2010 18,638 

2011 342,998 

2012 3,045 

2013 1.867 

Total £ 395.277 
(3) Notes payable -

At December 31, 2008, the Company had the following notes payable: 

Description Amount 

7,50% unsecured note payable due in yearly installments 

of $42,682 through August 1.2014 $ 200.342 

9.75 % note payable secured with aircraft due in annual principal 

installments of $30,000 due in August 1, 2O07 through 2010. 

Interest is paid on a yearly basis every August 1 as follows: 60,000 

Year Amount 

2009 $ 17,550 

2010 20,475 

9.75 % note payable secured with aircraft due in annual principal 

installments of $ $20,000 due in May 1.2007 through 2009. Interest 

is paid on a yearly basis every May 1 as follows: 20,000 

Year Amount 

2009 $ 13,650 

9.75 % note payable secured with aircraft due in annual principal 

installments of $ $21,400 due in June 1,2007 through 2012. 

Interest is paid on a yearly basis every June 1 as follows: 85,800 

Year Amount 

2008 $ 8,346 

2009 10,433 

2010 12,519 

2011 14.742 
Description Amount 

9.75 % note payable secured with aircraft due in annual principal 

installments of $ $17,500 due in February 1,2007 through 2016. 

Interest is paid on a yearly basis every February 1 as follows; 140,000 

Year Amount 

2009 $5,119 

2010 6,825 

2011 8.531 

2012 10.238 

2013 11.944 

2014 13.650 

2015 " 15.356 

2016 17.063 

S! 506.142 

(4) Related party transactions -

During the year ended December 31,2008, the Company paid salaries to officers an.o?:nting 

to $54,092. 
Exhibit 11 Financial Statements as ofDecember 31,2009 

30 
AIR CHARTER, INC. 

FINANCIAL STATEMENTS 

DECEMBER 31, 2009 

TOGETHER WITH INDEPENDENT 

AUDITOR'S REPORT 
DfAZ BEkCNES 1 

JACOUO 

CONZALE/. 

ViCTA 

&Co. 

• > -

MANUfl DIA;; lifKCNdb, C.P.A. 

I'|;DI»!:. JACOliO, C.P.A., C.F.P. 

lOKCi CONZAlti, CP.A. 

MANU B VIOTA, C,P.A,, C.V.A. 

INDEPENDENT AUDITOR'S REPORT 

To: TheBoardofDirectorsof Air Charter, Inc.' 

Carolina, Puerto Rico 

We have audited the accompanying balance sheet of Air Charter, Inc., as ofDecember 31, 2009, 

and the related statements of loss and retained earnings, and cash flows for the year then ended. 

These financial statements are the responsibility of the Company's management. Our responsibility 

is to express and opinion on these financial statements based on our audit. 

We conducted our audit in accordance witli auditing standards generally accepted in the United 

States of America. Those standards require that we plan and perform the audit to obtain reasonable 

assurance about whether the financial statements are free of material misstatement. An audit 

includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial 

statements. An audit also includes assessing the accounting principles used and significant estimates 

made by management, as well as evaluating the overall fmancial statement presentation. We beheve 

that our audit provides a reasonable basis for our opinion. 

In our opinion, the financial statements referred to in the first paragiaph present fairly, in a? material 

respects, the fmancial position of Air Charter, Inc., as of December 31, 2009, and the results of its 

operations and its cash flows for the year then ended in conformity with accounting principles 

generally accepted in the United States of America. 

Januaiy 31, 2010 

San Juan, Puerto Rico 

License #220 

Expiring on December 1, 2010 

E5D7S7E 

MJ^[/ yw 

!-'0 (sOX ^iVUJyi ':.v.f.i m.^:-.; r';.![;l?1<t KlC O i);|t;36-1'^01 ' 11:1 ?B7 773 0101 » FAX 787 773tn'|K 
CURRENT ASSETS 

AIR CHARTER, INC. 

BALANCE SHEET 

DECEMBER 31, 2009 

ASSETS 

Cash 

Accounts receivable 

Prepaid income tax 

Prepayments 

92,640 

825 

12,564 

73,561 

PROPERTY AND EQUIPMENT 

The accompanying notes are an integral part of this balance sheet. 

17^590 

RECEIVABLE FROM RELATED PARTY 90,000 

Aircraft 

Leasehold improvements 

Vehicles 

Hangar 

Office equipment 

Comptiters 

2,408,145 

56,990 

74,139 

450,000 

69,428 

17,331 

Accumulated depreciation and amortization 

3,076,033 

(l,9g7,943) 

1,088,090 

$ 1,357,680 
AIR CHARTER, INC. 

BALANCE SHEET 

DECEMBER 31, 2009 

LIABILITIES AND STOCKHOLDERS' EQUITY 

CURRENT LIABILITIES 

Cun-ent portion of: 

Loans payable 

Notes payable 

Accrued interest payable 

Accounts payable 

Accrued expenses payable 

Due to related party 

24',860 

120,971 

34,219 

2,820 

19,069 

12,610 

LONG TERM DEBT 

214,549 

Loans payable 

Notes payable 

Accrued interest payable 

345,751 

558,615 

68,876 

STOCICHOLDERS' EQUITY 

97:\242 

l,lb'7,791 

Common stock of $1 par value 1,000,000 shares 

authorized; 1000 shares issued and outstanding 

Additional paid in capital 

Retained earnings 

1,000 

110,000 

58,889 

The accompanying notes are an integral part of this balance sheet. 

169,889 

$ 1,357,680 
AIR CHARTER, INC. 

STATEMENT OP LOSS AND RETAINED EARNINGS 

FOR THE YEAR ENDED DECEMBER 31,2009 

REVENUES 

Service income $ 2,720,275 

OPERATING EXPENSES 

Salaries and payroll taxes 

Gasoline and oil 

Repairs and maintenance 

Depreciation and amortization 

Professional fees 

Landing and passenger fees 

Insurance 

Rent 

Utilities 

Office expenses 

Credit card commissions 

Representation and travel 

Vehicles 

Other taxes 

Advertising 

Other expenses 

620,633 

668,575 

330,544 

296,146 

217,361 

134,692 

142,203 

116,804 

47,989 

48,269 

44,872 

4:,571 

12,440 

1.4,980 

5,890 

190 

(2,745,159) 

Loss from operations (24,884) 

The accompanying notes are an integral part of this fmancial statement. 
AIR CHARTER, INC. 

STATEMENT OF LOSS AND RETAINED EARNINGS 

FOR THE YEAR ENDED DECEMBER 31, 2009 

OTHER INCOME (EXPENSES) 

Interest income 

Interest expense and bank chai-ges 

515 

(70,790) 

The accompanying notes ai-e an integral part of this fmancial statement. 

(70,275) 

NET LOSS 

Retained earnings, beginning of the year 

(95,159) 

154,048 

Retained earnings, end of the year 58,889 
AIR CHARTER, INC. 

STATEMENT OF CASH FLOWS 

FOR THE YEAR ENDED DECEMBER 31, 2009 

Increase (Decrease) in Cash aad Cash Equivalents 

CASH FLOWS FROM OPERATING ACTIVITIES 

Net loss 

Adjustments to reconcile net loss to net 

cash provided by operating activities: 

Depreciation and amortization 

Change in assets and liabiHties: 

Inci'ease in: 

Prepayments 

Prepaid income tax 

Decrease in: 

Accrued interest payable 

Accounts payable 

Accrued expenses payable 

Income tax paid 

$ (95,159) 

296,146 

(;.256) 

(12,564) 

(21,080) 

(31,534) 

(3,538) 

(581) 

Total adjustments 222,593 

Net cash provided by operating activities 127,434 

CASH FLOWS FROM INVESTING ACTIVITIES 

Purchase of property and equipment il^?23} 

The accompanying notes are an integral part of this financial statement. 
AIR CHARTER, INC. 

STATEMENT OF CASH FLOWS 

FOR THE YEAR ENDED DECEMBER 31, 2009 

Increase (Decrease) in Cash aad Cash Equivalents 

CASH FLOWS FROM FINANCING ACTIVITIES 

Proceeds from loan payable 13,564 

Principal payments of loans payable (38,230) 

Payments of notes payable (116,556) 

Net cash used by financing activities (141,222) 

Net decrease in cash (13,611) 

Cash, at beginning of year IU,2S1 

Cash, at end of year $ 92,640 

Supplemental schedule of non-cash investing and financing activities: 

Aircrafts purchased with note payable $ 290,000 

The accompanying notes are an integral part of this financial statement. 
AIR CHARTER, INC. 

NOTES TO FINANCIAL STATEMENTS 

DECEMBER 31, 2009 

(1) Operations and summary of significant accounting policies -

(A) Operations -

Air Chaiter, Inc. was incoiporated on June 1,1987, in the Commonwealth of Puerto 

Rico. 

(B) Summary of significant accounting policies -

A summary of the significant accounting policies consistently applied in the 

preparation of the accompanying financial statements follows. 

i) Property and equipment -

Property and equipment are stated at cost, less accumulated depreciation and 

amortization. Depreciation and amortization are computed using the sti'aightline method over the estimated useful lives of the assets. 

As of December 31.2009, estimated useful live of property and equipment 

was as follows: 

Estimated 

Description . Useful Live 

Aircraft 5 years 

Leasehold improvements 5 years 

Vehicles 3 to 5 years 

Hangar 30 years 

Office equipment 3 to 5 years 

Computers 3 years 

At the time property and equipment are sold or otlierwise disposed of, the 

cost and related accumulated depreciation and amortization are removed from 

the books and the resulting gain or loss, if any, is credited or charged to 

operations. 
ii) Cash and cash equivalents -

Tlie Company considers all highly liquid debt instniments purchased with a 

maturity of three months or less to be cash equivalents, 

iii) Use of estimates -

In preparing the Company's financial statements, management is required to 

malce estimates and assumptions that affect the reported amounts of assets 

and liabilities, the disclosure of contingent assets and liabilities at the vlate of 

the financial statements, and the reported amounts of revenues and expenses 

during the reporting period. Actual results could differ from those ei.:iraates. 

(2) Loans payable -

As ofDecember 31,2009, the Company had the following loans payable: 

Description \ Amount 

8.25% loan payable to bank, secured with office, 

due in monthly installments of $3,881 through July, 2011 $ 354,004 

1.99% loan payable to financing institution, secured with 

vehicle, due in monthly installments of $259 through 

June, 2013 10,501 

6.21% unsecured loan payable to financing institution, 

due in niontlily installments of $1,546 through April, 2010 6.IO0 

Total 370,611 

Less cuiTcnt portion (24.860) 

Long tenn portion $ 345.751 

Principal payments of loans payable for the next four yeai's following December 31,2009 are 

as follows: 

Year Amount 

2010 $ 24,860 

2011 341,161 

2012 3,045 

2013 1.545 

Total 3; 370.611 
(3) Notes payable -

At December 3 i, 2009, the Company had the following notes payable: 

Description Amount 

7.45 % note payable secured with aircraft due in yearly 

installment of $37,133 due in May 1, 2010 and anotlier six 

yearly installments of $49,511 due in May 1, 2011 through 2016 

and final installment of $61,889 due in May 1, 2017. $ 290,000 

7.50% unsecured note payable due in yearly installments 

of $42,682 through August 1, 2014 172,686 

9.75 % note payable secured with aircraft due in annual principal 

installments of $30,000 due in August 1, 2O07 thi-ough 2010. 

Interest is paid on a yearly basis every August 1 as follows; 30,000 

Year Amount 

2010 $ 20,475 

9.75 % note payable secured with aircraft due in annual principal 

installments of $ $21,400 due in June 1,20O7 through 2012. 

Interest is paid on a yearly basis eveiy June 1 as follows: 64,400 

Year Amount 

2009 $ 10,433 

2010 12,519 

2011 14,742 

9.75 % note payable secured with aircraft due in annual principal 

installments of $ $17,500 due inFebmary 1, 2007 through 2016. 

Interest is paid on a yearly basis every February 1 as follows; 122,500 

Year Amount 

2010 $ 6,825 

2011 8,531 

2012 10,238 

2013 11,944 

2014 13;650 
2015 15,356 

2016 17,063 

^ 679.586 

(4) Related party transactions -

During the year ended December 31,2009, the Company paid salaiies to officers amounting 

to $62,800. 

(5) Operating loss carry forward -

At December 31, 2009, tlie Company had a net operating loss carry foi-ward availaf'le to 

offset future taxable income as follows: 

Year Amount Expiration Date 

2009 $ 80,325 2017 
Exhibit 12 Financial Statements as of August 31,2010 

31 
AIR CHARTER, INC. 

FINANCIAL STATEMENTS 

AUGUST 31,2010 

TOGETHER WITH ACCOUNTANT'S 

COMPILATION REPORT 
DfAZ BFKCNES i 

JACOBO 

GONZALEZ 

VioiA // -

&Co. 

MANUa 0(A2 BfKONtS.C.P.A. 

PtORO t. JACOSO. C.fiA, C.F.P, 

JO(!CtCON2Att2,C.P.A, 

W^W£t VlOT\ CP.A., C.V.A, 

ACCOUNTANT'S COMPILATION REPORT 

To: The Board of Directors of Air Charter, Inc. 

Carolina, Puerto Rico 

We have compiled the accompanying balance sheet of Air Charter, Inc. ("the Company") as of 

August 31,2010, and the related statement of loss and retained earnings for the eight months period 

ended August 31,2010, in accordance with Standards for Accounting and Review Services issued by 

the American Institute of Certified Public Accountants. 

A compilation is limited to presenting in the form of financial statements information that is the 

representation of management. We have not audited or reviewed the accompanying financial 

statements and, accordingly, do not express an opinion or any other form of assurance on them. 

The statement of cash flows for the eight months period ended August 31, 2010, has not been 

presented. The accounting principles generally accepted in the United States of America require that 

such a statement be presented when financial statements purport to present financial position and 

results of operations. 

September 24, 2010 

San Juan, Puerto Rico 

License #220 

Expiring on December 1,2010 

_ESSgiDS„ 

PO BOX 361401, SAN JUAN, PUERTO RICO 00936-1401 • TEL. 787 773 0101 • FAX 787 773 0115 
CURRENT ASSETS 

AIR CHARTER, INC. 

BALANCE SHEET 

AUGUST 31,2010 

ASSETS 

Cash 

Accounts receivable 

Prepaid income tax 

Prepayments 

90,146 

825 

12,564 

125,741 

PROPERTY AND EQUIPMENT 

The accompanying notes are an integral part of this balance sheet. 

229,276 

RECEIVABLE FROM RELATED PARTY 90,000 

Aircral^ 

Leasehold improvements 

Vehicles 

Hangar 

Office equipment 

Security equipment 

Computers 

2,477,617 

56,990 

81,549 

450,000 

69,428 

7,275 

17,331 

Accumulated depreciation and amortization 

3,160,190 

(2,204.136) 

956.054 

$ 1,275,330 
AIR CHARTER, INC 

BALANCE SHEET 

AUGUST 31, 2010 

LIABILITIES AND STOCKHOLDERS' EQUITY 

CURRENT LIABILITIES 

Current portion of; 

Loans payable 

Notes payable 

Accrued interest payable 

Accounts payable 

Accrued expenses payable 

Due to related party 

27,309 

97,491 

34,219 

9,494 

14,152 

12.610 

LONG TERM DEBT 

195.275 

Loans payable 

Notes payable 

Accrued interest payable 

365,785 

490,854 

68,876 

925,515 

STOCKHOLDERS' EQUITY 

1,120.790 

Common stock of $1 par value 1.000,000 shares 

authorized; 1,000 shares issued and outstanding 

Addhional paid in capital 

Retained earnings 

1,000 

110.000 

43,540 

154,540 

$ 1,275,330 

The accompanying notes are an integral part of this balance sheet. 
AIR CHARTER, INC. 

STATEMENT OF LOSS AND RETAINED EARNINGS 

FOR THE EIGHT MONTHS PERIOD ENDED AUGUST 31, 2010 

REVENUES 

Service income $ 2,309,033 

OPERATING EXPENSES 

Salaries and payroll taxes 

Gasoline and oil 

Repairs and maintenance 

Depreciation and amortization 

Professional fees 

Landing and passenger fees 

Insurance 

Rent 

Utilities 

Office expenses 

Credit card commissions 

Representation and travel 

Vehicles 

Other taxes 

Advertising 

489,279 

624,678 

257,143 

216,193 

211,943 

102,828 

95M3 

67,331 

32,687 

36,287 

43,023 

41,342 

17,562 

9,211 

6,330 

(2,251.500) 

Income fi-om operations 57,533 

The accompanying notes are an integral part of this financial statement. 
AIR CHARTER, INC. 

STATEMENT OF LOSS AND RETAINED EARNINGS 

FOR THE EIGHT MONTHS PERIOD ENDED AUGUST 31, 2010 

OTHER INCOME (EXPENSES) 

Interest income 85 

Interest expense and bank charges (72.967) 

(72,882) 

NET LOSS (15,349) 

Retained earnings, beginning of the period 58,889 

Retained earnings, end of the period $ 43,540 

The accompanying notes are an integral part of this financial statement. 
AIR CHARTER, INC. 

NOTES TO FINANCIAL STATEMENTS 

AUGUST 31, 2010 

(1) Operations and summary of significant accounting policies -

(A) Operations -

Air Charter, Inc. was incoiporated on June 1,1987, in the Commonwealth of Puerto 

Rico. 

(B) Summary of sjgnificaut accounting policies -

A summary of the significant accounting policies consistently applied in the 

preparation of the accompanying financial statements follows. 

i) Property and equipment -

Property and equipment are stated at cost, less accumulated depreciation and 

amortization. Depreciation and amortization are computed using the straightline method over the estimated useful lives of the assets. 

As of August 31,2010, estimated useful live of property and equipment was 

as follows: 

Estimated 

Useful Live 

Aircraft 

Leasehold improvements 

Vehicles 

Hangar 

Office equipment 

Security equipment 

Computers 

5 years 

5 years 

3 to 5 years 

30 years 

3 to 5 years 

5 years 

3 years 

At the time property and equipment are sold or otherwise disposed of, the 

cost and related accumulated depreciation and amortization are removed from 

the books and tlie resulting gain or loss, if any, is credited or charged to 

operations. 

ii) Cash and cash equivalents -

The Company considers all highly liquid debt instmments purchased with a 

maturity of three months or less to be cash equivalents. 
iii) Use of estimates -

In preparing the Company's financial statements, management is required to 

make estimates and assumptions that affect the reported amounts of assets 

and liabilities, the disclosure of contingent assets and liabilities at the date of 

the financial statements, and the reported amounts of revenues and expenses 

during the reporting period. Actual results could differ fi*om those estimates. 

(2) Loans payable -

As of August 31,2010, the Company had the follovwng loans payable: 

Description Amount 

8.25% loan payable to bank, secured with office, 

due in monthly installments of $3,881 tlu-ough July, 2011 

when remaining principal balance will be due. $ 342,387 

1.99% loan payable to financing institution, secured with 

vehicle, due in monthly installments of $259 through 

June, 2013 8,312 

6.21% unsecured loan payable to financing institution, 

due in monthly installments of $ 1,546 through April, 2010 42.395 

Total 393,094 

Less current portion (27.309) 

Long term portion $ 365^78^ 

Principal payments of loans payable for the current year 2010 and the next three years 

following August 31,2010 are as follows: 

Year Amount 

2010 $ 27,309 

2011 361,446 

2012 3,050 

2013 1.289 

Total $ 393.094 
(3) Notes payable -

At August 31,2010, the Company had the following notes payable; 

DescriptJop ; Amount 

7.45 % note payable secured with aircraft due in yearly 

installment of $37,133 due in May 1,2010 and another six 

yearly installments of $49,511 due in May 1,2011 through 2016 

and final installment of $61,889 due in May I, 2017. $ 267,660 

7.50% unsecured note payable due in yearly installments 

of $42,682 through August 1,2014 172,685 

9.75 % note payable secured with aircraft due in annual principal 

instalhnents of $ $21,400 due in June 1,2007 through 2012. 

Interest is paid on a yearly basis every June 1 as follows: 43,000 

Year Amount 

2010 $ 12,519 

2011 14,742 

9.75 % note payable secured with aircraft due m annxial principal 

installments of $ $17,500 due in Febmary 1,2007 through 2016. 

Interest is paid on a yearly basis every February 1 as follows; 105.000 

Year Amount 

2011 $ 8,531 

2012 10,238 

2013 11,944 

2014 13,650 

2015 15,356 

2016 17,063 

liiSJ^i 

(4) Related party transactions -

During the eight months period ended August 31,2010, the Companypaid salaries to officers 

amounting to $66,923. 
(5) Operating loss carry forward -

At August 31.2010, the Company had a net operating loss carry forward available to offset 

future taxable income as follows: 

Year Amount Expiration Date 

2009 $ 80,325 2017 
Exhibit 13 Forecast Financial Statements for the Month Ending November 30,2010 - October 31,2011 

32 
AIR CHARTER, INC. 

FORECASTED FINANCIAL STATEMENTS 

MONTHS ENDING NOVEMBER 30,2010 TO OCTOBER 31,2011 

TOGETHER WITH ACCOUNTANT'S 

COMPILATION IMPORT 
D(AZ BERCNES i 

JACOBO 

CONZAlEZ 

ViOTA 

&Co. 

MANUEI D(AZ BfRCNES, C.P.A. 

PtDRo E, JACOBO, C.P.A, C.F.P. 

JORCt GONZALtZ, C.P.A. 

MANUtl VIOTA, C.P.A., C.V.A. 

CEmiREDPUBUC 

ACCOUMTANTS 

ACCOUNTANT'S COMPILATION REPORT 

To; The Board of Directors of An- Charter, Inc. 

Carolina, Puerto Rico 

We have compiled the accompanying forecasted balance sheets and the related statements of income, 

retained earnings and cash flows of Air Charter, Inc., as of November 30,2010 to October 31,2011, 

and for the months then ending, in accordance with Statements on Standards for Accounting and 

Review Services issued by the American Institute of Certified Public Accountants. 

A compilation is limited to presenting in the form of forecast information that is the representation of 

management and does not include evaluation of the support for the assumptions underlying the 

forecast. We have not examined the forecast, and. accordingly, do not express an opinion or any 

other form of assurance on the accompanying statements or assumptions. Furthermore, there will 

usually be differences between the forecasted and actual results because events and circumstances 

fi^quently do not occur as expected, and the differences may be material. We have no responsibility 

to update this report for events and circumstances occiuring after the date of this report. 

October 5,2010 

San Juan. Puerto Rico 

License #220 

Expirmg in December 1,2010 

ESS^llE 

D6(r^i/j-Q^ 

POBOX 361401, SAN JUAN, PUERTO RICO 00936-1401 • TEL 787 773 0101 • FAX 787 773 0115 
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AIR CHARTER, INC. 

DETAIL OF ADMINISTRATIVE AND MAINTENANCE SALARIES 

Administrative 

Employee Position 

President and D. 0. 

Vice President and Chief Pilot 

Director of Maintenance 

Secretary 

Salary per Month 

$ 4,500 

4,500 

3,500 

2,000 

Subtotal 14,500 

Payroll Taxes 

Total 

2.175 

16,675 

Maintenance 

Mechanical 

Mechanic #2 

Mechanic #3 

Assistant mechanic 

Helper 

Subtotal 

Payroll Taxes 

$ 2,600 

1,647 

1,387 

1,300 

755 

7.689 

1,153 

Total 8,842 
AIR CHARTER, INC. 

NOTES TO THE FORECASTED FINANCIAL STATEMENTS 

MONTHS ENDING NOVEMBER 30,2010 TO OCTOBER 31,2011 

OPERATIONS AND SUMMARY OF SIGNIFICANT FORECAST ASSUMPTIONS 

NOTE A - OPERATIONS 

Air Charter, Inc. was incorporated on June 1,1987, in the Commonwealth of Puerto Rico. Actually 

the Company is engaged in mail, charter and cargo operations; and has contracts with the 

Municipalities of Culebra and Vieques for airline transportation services. Management is currently 

working to obtain necessaiy licenses and certifications to start commuter operations. Normally the 

Company prepares its financial statements on a calendar year basis. The accompanying forecasted 

balance sheets and statements of income and retained earnings were prepared for the twelve 

months period from November 1,2010 (expected commencement date of commuter operations) 

to October 31,2011. 

NOTE B - SUMMARY OF SIGNIFICANT FORECAST ASSUMPTIONS 

This financial forecast presents, to the best of management's knowledge and belief, the Company's 

expected financial position, results of operations for the forecast period. Accordingly, the forecast 

reflects management's judgment as of October 5, 2010, the date of this forecast, of the expected 

conditions and its expected course of action. The forecast is designed to present the forecasted 

financial position and results of operations of Air Charter, Inc., as of November 30,2010 to October 

31, 2011, and for the months then ending. The assumptions disclosed herein are those that the 

management believes are significant to the forecast. There will usually be differences between the 

forecasted and actual results, because events and circimistances fi^equently do not occur as expected, 

and those differences may be material. 

1. Revenues -

The Company operates in various business segments as explained below: 

i) Mail, Charter and Cargo Operations -

a. Charter -

The Company is mainly engaged in airline charter services in Puerto 

Rico between the Mimicipalities of Vieques and Culebra and the 

main island airports of Ceiba and Isla Grande. Also the Company 

flights to and from the above airports and Tortola, ST. Thomas and 

St. Croix. Revenue on Charter operations were estimated as follows: 
# of Flights 

Per Month 

8 

12 

8 

6 

2 

2 

2 

2 

2 

2 

Fee per 

Flight 

$1,200 

600 

1,300 

700 

1,400 

2,000 

1,400 

800 

1,300 

1,400 

Market (Round Trip) 

Isla Grande to Vieques 

Ceiba to Vieques 

Isla Grande to Culebra 

Ceiba to Culebra 

Isla Grande to St. Thomas 

Isla Grande to Tortola 

Ceiba to St. Croix 

Culebra to St. Thomas 

Vieques to St. Thomas 

Vieques to St. Croix 

b. US Mail -

The Company has a contract with US Mail for the cargo of mail to the 

Municipalities of Culebra and Vieques. The contract expires on 

April, 2012. Revenue was estimated based on prior experience to be 

$5,500 per week except for the months fi-om November through 

January for which estimated revenue per week is $ 12,000. 

c. United Farce! Service (UPS) -

The Company has an open contract with UPS for cargo services for a 

flat fee per month of $5,720. 

d. Sea World, Inc. -

The Company has an open contract with Sea World, Inc. for cargo 

transportation services which include two weekly flights to St. 

Thomas for a fee per flight of $700 and one weekly flight to Tortola 

for a fee per flight of $1.050. 

ii) Contracts with the Municipalities of Culebra and Vieques -

The Company has contracts with the Municipalities of Culebra and Vieques 

for airline transportation services. Revenue was estimated based on prior 

experience at $13,500 and $6,000 for Culebra and Vieques, respectively. 

Contracts expire on June 30, 2011 and are expected to be renewed for an 

additional year- on the same terms. 
iii) Commuter services -

Management is currently working to obtain necessary licenses and 

certifications to start commuter operations to and from Ceiba and Isla Grande 

to and from Culebra and Vieques. This operation is expected by management 

to start on November 1, 2010. Refer to Forecasted Revenue by Market 

Schedule for computation of monthly revenues from this segment of 

operations. 

2. Direct expenses -

i) Pilot salaries and payroll taxes -

a. Mail, charter and cargo operations -

Salaries were estimated at $100 per day per pilot (1 pilot per day for 

the months of February through October and 2 pilots for the months 

of November through January). Payroll taxes were estimated at 15% 

of salaries. 

b) Contracts with the Municipalities of Culebra and Vieques -

Salaries were estimated at $100 per day per pilot (1 pilot per day). 

Payroll taxes were estimated at 15% of salaries. 

c. Commuter services -

Salaries were estimated at $100 per day per pilot (2 pilots per day). 

Payroll taxes were estimated at 15% of salaries. 

ii) Gasoline and oil -

a« Mail, charter and cargo operations -

- Charter operations 

Estimated flight time per month will be 39 hours at 30 gallons per 

hour at $5 
- u s MAIL 

November through Januaiy 

51 flights per week at 1.6 hours flight time at 30 gallons 

per hour at $5 per gallon 

February through October 

31 flights per month at 1.6 flight time at 3 0 gallons per hour at 

$5 per gallon 

-UPS 

8 flights per month at 1.6 flight time at 30 gallons per horn- at $5 

- Sea World, Inc. 

2 flights per week at .8 flight time at 30 gallons per hour at $5 plus 1 

flight per week at 1.6 flight time at 30 gallons per hour at $5 

b. Contracts with the Municipalities of Culebra and Vieques -

16 flights per week at .6 block time at 30 gallons per hour at $5 

c. Commuter services -

7.8 flight time per day at 30 gallons at $5 

iii) Landing and passenger fees -

a. Mail, charter and cargo operations -

- Charter operations: 

Isia Grande to Vieques 8 flights at $48; Vieques to 

St. Thomas 2 flights at $73 

- US MAIL and UPS $37.96 per day per aircraft (1 plane fi-om 

February to October and 2 planes from November to January 

- Sea World, Inc. 

$33 in San Juan, $15 in St. Thomas and $25 in Tortola per flight 

b. Contracts with the Municipalities of Culebra and Vieques -

16 flights per month at $11.48 per flight 

c. Commuter services -

$129.32 per day 
3. Indirect expenses, other income (expenses) and income tax -

Indirect expenses, other income (expenses) and income tax were allocated to business 

segments using the gross to gross revenue method and the following percentages: 

Mail, charter and cargo operations 27% 

Contiacts with the Municipalities of Culebra and Vieques 6% 

Commuter services 67% 

i) Administrative and maintenance salaries and payroll taxes -

Refer to Detail of Administrative and Maintenance Salaries for more details. 

ii) Other indirect expenses -

Were estimated based on 2009 audited expenses adjusted to the number of 

airplanes expected to be flown during the forecast period 

iii) Other income (expenses) -

Were estimated based on 2009 income and expenses 

iv) Income tax -

Was estimated at 33% of taxable income 

NOTE C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

The Company's accounting policies conform to predominant practices followed by the industry and 

are in accordance with accounting principles generally accepted in the United States of America. 

1. Property and equipment -

Property and equipment are stated at cost, less accumulated depreciation and 

amortization. Depreciation and amortization are computed using the straight-line 

method over the estimated useful lives of the assets. 

As of October 31,2010, estimated useful live of property and equipment will be as 

follows: 
Estimated 

Description Useful Live 

Aircraft 5 years 

Leasehold improvements 5 years 

Vehicles 3 to 5 years 

Hangar 30 years 

Office equipment 3 to 5 years 

Computers 3 years 

At the time property and equipment are sold or otherwise disposed of, the cost and 

related accumulated depreciation and amortization are removed from the books and 

the resulting gain or loss, if any, is credited or charged to operations. 

2. Cash and cash equivalents -

The Company considers all highly liquid debt instruments purchased with a maturity 

of three months or less to be cash equivalents. 

3. Use of estimates -

In preparing the Company's financial statements, management is required to make 

estimates and assumptions that affect the reported amounts of assets and liabilities, 

the disclosure of contingent assets and liabilities at the date of the financial 

statements, and the reported amounts of revenues and expenses during the reporting 

period. Actual results could differ from those estimates. 

NOTE D - LOAN PAYABLE 

As of October 31.2011, the Company expects to have a 1.99% loan payable to financing institution, 

secured with vehicle, due in monthly installments of $259 through June, 2013. 

NOTE E - NOTES PAYABLE 

At October 31,2011, the Company expects to have the following notes payable: 

Description Amount 

7.45 % note payable secured with aircraft due in yearly 

installments of $49,511 due in May 1,2012 through 2016 

and final installment of $61,889 due in May 1,2017. $ 238,799 

7.50% unsecured note payable due in yearly installments 

of $42,682 through August 1,2014 110,995 
9.75 % note payable secured with aircraft due in June 1,2012 

Interest is paid on a yearly basis every June 1 as follows: 21,600 

9.75 % note payable secured with aircraft due in annual principal 

installments of $ $17,500 due in February 1. 2012 through 2016. 

Interest is paid on a yearly basis every February 1 as follows: 

Year Amount 

2012 $10,238 

2013 11,944 

2014 13,650 

2015 15,356 

2016 17,063 

87.500 

$ 458.894 

NOTE F - RELATED PARTY TRANSACTIONS 

During the twelve months period ending October 31,2011, the Company expects to pay salaries to 

officers amounting to $108,000. 
Exhibit 14 Certificate of Insurance 

33 
e AGEMCY DISPLAY OF ESTIMATED BURDEN 

l>i.- ttuiiJit.ft!(K.T)i.'Ty i>L"i])^-, f,-/ rt-.^^ ;'olriww' oi i''.*:ifffi<ih<jn 15 essnia{«i >:? ^^.^-agt? '-^n»^'j:fri r* rtsrio^se I' ytJUwsl^ ID romnient (y.ths flraJ'»ny</trM} ASbrnstt ty wake 

Acavcf'fig lo'!»: P^pe-'w-tK Ke.-d.A.iiiviAct r; i</;i:j, rir; iignsocs pre r«)u;fto toresjuTid Tya Oi.Necaor. of infiyTi\=il!0.'^ ijoioss iltf5P=ays A wBltc OMi.^cofi'.Tjin.ifrAtts 

U.S. Departmen t o f 

Transportation ' NOrC- ft-- imnfmiiKin nn AIW". IO Illt '.smpteica (SP^K of Itw tem ? « fHWG INSTRUCTIONS MOJ, 

i 

Otfice of ilie Secieiacv 

0( Transpoiiaiio.'i '• — 

(»<8 No. 210C^)03Q.Ei(Cii.iii 5-30-200? 

U.S. AIR CARRIERS - CERTIFICATE OF INSURANCE 

POLICIES OF INSURANCE FOR AIRCRAFT ACCIDENT BODILY INJURY 

AND PROPERTY DAMAGE UABILITY 

FILING IMSTRUCTIONS: Filo a sjgnecl origins! of tnis form wish (he Fedei^l Awabon AdmirestraHon. AFS-260,800 Independence Ave . SVi/., WasHreiton. DC. SaWI (See EXCEPTIONS '• 

aiKJ 2 below) 

EXCEPTtOM 1: II Block 2B on Ihe reverse is h'ted in IsecauEe ttie insuied is »iaaiT<i7n4eiair carrier. Be a signed origtnal of this form vwlh the Depanrnenl of Transportalioiv Aif Camer Fitness 

Division. X-56. 4(« '"Si.. SW, Washinglon, DC 20590. 

EXCEPTION 2: For arii insured that is located m (fie Steie of Alaska (regansess as to vvhethet Blodt 2A 2B. or 2C is tilled itil file a sigrc-d original d tins (omi wWi the Federal Awafcon 

Administraton. Alaskan Region HO.. AAL-230.222 W 7" Ave., rii. l Anchorajje. Alasl<s 99513. 

IPiiteae type inloiinaU-Ki. exani>i .^.grialurcsi 

THIS CERTIFIES THAT: Housto n Casualt y Compan y 

(Name ol Insurer) 

has issued a policy or policies of Aircraft Liability Insurance to Air Charter, Inc. dba Air Flamct^co 

A M F Facilit y P.O. So x 810352 Carolina, PR 00981-0352 FAA Certificate No : UOtA831U 

(Name and address of Insured U S Air Carner) 

effective from Jul y 14. 2010 until ten (10) days after written notice from the insurer or carrier of the intent 

to terminate coverage is received by the Department of Transportation. 

; NOTE: Part 205 of ihi; Oepartmeni s Regulalions does not allow for a predetermined termiiialiori date, and a certificate showina such a dale is unacceptable 

: 1. The Insurer (OVrprt Orte;.' 

D is licensed to issue aircraft insurance policies in the United States; 

D is licensed or approved by the government of to issue aircraft insurance policies: or 

is an approved surplus line insurer in the State(s) of Puert o Ric o fU.S. Territory) 

2 . 1 he insurer assumes, under ihe policy of policies feied below, aircraft aijcideni liabilily insured lo minimums at least equal to the following during operabons. rnaintenance, QI 

use of aiicrafi in air lisnsportsiiori' as that term is defined in ilH LJ S O 40102 

iCompieli! apfilicabtf! seaii.>ii(n} belw/j: 

A. U.S. AIR TAXI OPERATORS WITH PART 298 AUTHORITY ONLY 

The aircraft covered by this policy are SMALL AIRCRAFT (i.e., with 60 or fewer passenger seals or with a maximum payload capacity of 

18.1)00 pounds or less). lO'ook separate or cornDiiwd coverage as aftprofiriatel 

Separate Coverages: 

Hjtinimum Limit 

Policy No. Type of Liability £ach person Eacfi Occurrence 

Sodily Injury Liability 

(Excluding Passengers) $75,000 

$75,000 X 75% of 

Passenger 8oclil;^)njury ^ total number of 

' " ' ~~ passenger seats 

iristalled in aircraft 

.._ _, , Properly Damage $100,000 

Kg Combined Ci>verage: This combined coverage is a single limit of liability for each occurrence ai least equal to Hie required tninimoms stated 

' ^ above for bodily injury (excluding passengers), property damaged, and passenger tiodily injury. 

Poiicy No. Amount of Coverage *1,000,000 each occurrence I 

014667^114 $100,000 each passenger 

n This policy covers CARGO operations only and excludes passenger liability insurance 

OST Form 6410 " ' " " CERTIFICATE MO. 1 
B. U.S. COMMUTER AND CERtrRCATED AIR CARRIERS OPERATING SMALL AIRCRAFT" 

D 

The aircraft cowred by tiiis policy are SM.ML AIRCflAFr f i.e . Willi tjO or feiver passenger seats or w\h » niaximuni pf ^-foad capacily o( 18,000 rounds or less) 

{Chpck sofjarnl/i a comixneO mvemsf' 9 ' anptOf)tiat(>t. 

Separate Coverages 

Policy No 

Minimum Limil 

Type oi Liability Eacii person Each Occurrence 

Combined Bodily Injury (Excluding Passer>gers other than cargo 

atteiKfants) and Property Damage Liability 

Passeiiget Bodily Injury ___ S.300.000 

S300.000 X 75% of 

tola! number of 

passenger scats 

installed in aircraft 

r—I Ckimbined Coverage; This comtiined coverage is 3 single limit of liability for each occurrence at least equal lo Ihe required minimums slated above 

'—' for bodily injury (excluding passengers), properly damaged, and passenger bodily injury. 

Policy No. Amount of Coverage 

• This policy covers CARGO operations only and excludes passenger liability insurance. 

C. 

D 

U.S. CERTIFJCATED AIR CARRIERS OPERATING LARGE AIRCRAFT 

The aircraft covered by it 

(Criw.A SftiKViile or coirti: 

Separate Coverages 

The aircraft covered by itiis policy are LARGE AIRCRAFI (i,e . with more Ihan GO passenger seats or with a itiaxirrium payload capscny of rnore than 16,000 pounds) 

(Criw.A SftiKViile or coirtlunea covsraitvs us apittoimtitel: 

Minimum Limit 

Policy Ato. Type of Liability Eacti person Eac/) Occuirence 

Combined Bodily Injury (Excluding Passengers other ihan cargo S3OO.0D0 

attendants) and Property Damage Liability 

Passenger Bodily injury $300,000 

$20,000,000 

$300,000 X 75 % of 

total numtier ol 

passenger seats 

installed in aircraft 

p-j Combined Coverage; This combintid coverage is a single limit ol liability for each occurrence at least equal to the required rtiinimums stated above 

'—' tor bodily Injury (excluding passengers), property damaged, and passenger bodily injury. 

Policy No. Amount of Coverage 

D This policy covers CARGO operations only and Bxdudes passenger liability insurance 

the policy ai policies Hsted in ihis certificate msurcfs) (CliL'ck Ow) ' Make and li^odei 

FAA or Foreign (-lag 

Regislrstion No 

El Operalions conducted wiib all aircraft operate? by the'lnsiired 

D Operalions conducted wilb ihe following types ol aircraft 

D Operalions vnlh the following aircraft: iUst ^nniiKtimi f*ie rt necesaiy) 

4 Each policy listed in this certificjate meets or exceeds Ihe reqitirements in 14 CFR Part 205. 

Houston Casualty Company 

(Naina of Imorei) 

13403 Ivtorthwest Freeway 

(Adiitftsa) 

Houston, TX 77040 

(Name o l Btaker. if aftiilicgble) 

(Aiklrcss) 

lCity.Slnle.2ip Code) 

Christoptier D, Bennett 

(CJy. Stale. Zip Coele] 

Ctvitaa Iperson who can venty l/ie filfCK:livimg.<!S of llie ixwirags) 

713-462-1000 713-744-9666 

\Atp.H C«i^^ r-Vwri'? IJfjtritjf.ft iA'<vi Cciitt*.' r-.-tx ivtimvm] 

tOHicer or aulhonxcn rdpiesentatiwe) 

t»jea Coiic. Piione NturAter' Antit C<>f.V /.')> NuriiUfx) 

^—?" —r—-STtn——— — 

....-.-.'•.;i^.L_-—_ 

iSiifititltifv it {^.iff^airM 

(Oali'i 
ExWW 

ibit 15 interim Agreement 

34 
& Docket OST 95-236 

U.S. Department of Transportation 

Office of the Secretary of Transportation AGREEMENT 

The undersigned caniers (hereinafter referred to as 'the Carriers") hereby agree as follows: 

1. Each of «ie Carriers shall, effective May 16,1966, include the fcdiowing in its conditions of carriage, including tariffs emt)odying 

conditions of carriage filed Ijy it with any govemntent; 

"Tfie Canier shall avail itself of the limitation of liability provided in the Convention for the Unification of Certain Rules 

Relating to International Carriage by Air signed at Warsaw October 12tfi, 1929, or provided in the said Convention as amended by 

the Protocol signed at The Hague September 28th, 1955. However, in accordance with Article 22(1) of said Convention, or said 

Convention as amended by said Protocol, ttie Camer agrees that, as to all international transportation by the Canier as defined in 

the said Convention or said Convention as amended tiy said PrcAocol, wtuch, accordng to the contract of Carr»ge. includes a 

point in the United States of America as a point of origin, pdnt of destination, or agreed stopping place 

(1) The limit of liability for each passenger for death, wounding, or other bodily i^^uty shall be the sum of US $75,000 

inclusive of legal fees and costs, ^oept that, in case of a daim brought in a State where provision is made for separate 

award of legal fees and coste. the limit shall be the sum of US $58,0CX) exclusive of legal fees and costs. 

(2) The Carrier shall not with respect to any claim arising out of the death, wounding, or other bodily irijury of a passenger, 

avail itself of any defense under Article 20(1) of said Convention or said Convention as amended by said Protocol. 

Nothing herein shall be deemed to affect the rights and liabilities of the Canier with regard to any claim btou^t by, on behalf 

of, or in respect of any person wtm has willfully caused damage which resulted in death, wounding, or other bodily irijury of a 

passenger.' 

2. Each Canier shall, at the time of delivery of the ticket, furnish to each passenger whose transportation is governed by the 

Convention, or the Convention as amended by the Hague Protocol, and by the special oontitict described in paragraph 1, the following 

notice, which shall be printed in type at least as la-ge as 10 point modem type and in ink contrasting with the stock on (i) each ticket; (ii) 

a piece of paper either placed in the ticket erwetope with the ticket or attached to the ticket; or (iii) on the ticket envelope: 

"ADVICE TO irrrERNATIONAL PASSENGER ON LIMITATION OF LIABILITY 

Passengers on a Journey involving an uttimate destination or a stop in a country other than ttie country of origin are advised 

that the provistons of a treaty known as ttie Warsaw Convention may be applicable to tiie entire journey, including any portion 

entirely within the country of origin or destination. For such passengers on a journey to, from, or with an agreed stopping place in 

the IMted States of Amertea, the Convention and special conbBcts of carriage embodied in applicable tariff provide ttiat the 

liability of 

[certain J* 

[(name of canier) and certain (fther] caniers parties to such special contracts for deatti of or personal injury to passengers is 

limited in most cases to proven damages not to exceed US $75,000 per passenger, and ttiat this liability up to such limit shall not 

depend on negligence on ttie part of the canier. For such passengers traveling by a earner not a party to such special contracts or 

on a journey not to, fi-om, or having an agreed stopping place in ttie United States of America, liability of the canier for deatti or 

personal injuiy to passengers is limited in most cases to approximately US $10,000 or US $20,000. 

The names of Carriers parties to such special contracts are available at all ticket offices of such carriers and may be 

examined on request. 

Additional protection can usually be cd>tained by purchasing insurance fi-om a private company. Such insurance is not 

affected by any limitation of the carrier's Hability under ttie Warsaw Convention or such special contiacts of carriage. For further 

information please consult your airiine or insurance company representative." 

3. [TfHS Agreement was filed with ttie Civil Aeronautics Board of ttie United States. The Board approved it by Onjer E-23680. 

adopted May 13,1966. The Agreement (Agreement 18900) became effective May 16,1966. On January 1.1985, ttifs Agreement 

became the rraponsibility of ttie Department of TransportatkMi (DOT) by operation of law.] 

4. This Agreement may be signed in any numt>er of counterparts, all of which shall constitute one Agreement Any Canier may 

become a party to ttiis Agreement by signing a counterpart hereof and depositing it wnth DOT. 

5. Any Canier party hereto may wittidraw from this Agreement by giving twelve (12) moi^ ' written notice^wittidrawal to DOT 

and the other Carriers parties to ttie Agreement - ^/^ ^ ^ '•c^,^ ^ 

(Signature and Date> ^g&t^><*<»g^ y'^*^— * 

•EHheraHematlve may t)e used. Francisco Torres President 

(Pnnted Name and Title) 

Air Charter, Inc (Name and Address of Canriei) 

08TFonn4823(Form.rtyCABForm263) Lindbergh stree t south ra«p Ixit 7 

Isl a Grande Airport 

San Juan, P.R. 00907 
Exhibit 16 State Department Certification for Air Flamenco 

35 
GOVERMENIT OF PUERTO RICO 

DEPARTMENT OF STATE 

SAN JUAN, PUERTO RICO 

CERTinCATION 

I, Gricel Falgks Rodriguez, Director Acting Corporate and Trademarks 

Registries of State, of the Commonwealth of Puerto Rico. 

DO HEREBY CERTIFY: That according to the records of this Office an 

application to the tradename "AIR FLAMENCO", was filed in this Department on 

Api'il 3, 2000, belonging to Sr. Francisco Torres Gonzalez, for '*Transporte 

aereo comercial". 

AND I FURTHER CERTIFY: The document is pending for evaluation. 

IN WITNESS WHEREOF, the 

undersigned, by virtue of the 

authority vested by law, hereby issues 

this Certificate and affixes the Great 

Seal of the Commonwealth of Puerto 

Rioo at the City of San Juan, this 

third day of april, of tbe year twothousand. 

Gricel F^gas ftbdriguez - ^ 

Acting Director 

Corporate and Trademarks Registries 

12142725 - $10,00 
Exhibit 17 Proposed Schedule Flights 

36 
Proposed Flight Schedules 

ISLA GRANDE (SIG) TO CULEBRA (CPX) 

r:FlightSiBheaaie-ti' ••'»-: -;.,:^^^.: - W-^ ^ f:.fcgt Vy^^':^ ;;;...,•:.• .;^^^. •- ^ ..^.-'-ffi^tv/;*,, =:,;:-;. y'-Vi;;.. --:;;,,,.:., i,;:. ,:fy..^ :T' | ^ 

Flight 

Segment # 

1 

2 

3 

4 

5 

6 

7 

8 

Number 

101 

103 

105 

107 

Origin 

SIG 

SIG 

SIG 

SIG 

Destination 

CPX 

CPX 

CPX 

CPX 

Depart 

8:00:00 

13:00:00 

16:30:00 

18:00:00 

Arrive 

8:30:00 

13:30:00 

17:00:00 

18:30:00 

Days of Operation (1=Segment Flown, 

fVlon 

1 

1 

1 

1 

Tues 

1 

1 

1 

1 

Weds 

1 

1 

1 

1 

Thurs 

1 

1 

1 

1 

FrI 

1 

1 

1 

1 

a=Not Flown) 

Sat 

1 

1 

1 

Sun 

1 

1 

1 

Miles 

48 

48 

48 

48 

CULEBRA (CPX) TO ISLA GRANDE (SIG) 

&PlightSchedule2''^.-J^, ; : .. !\':y-l: ^ :,^.;tj j;;o •, ^,: ^v;./'^;;^^^ ,: •sf ;.^ •-^ p,:, • 

Flight Days of Operation (1=Seqment Flown, 0=Not Flown) 

Segment # 

1 

2 

3 

4 

5 

6 

7 

8 

Number 

102 

104 

106 

108 

Origin 

CPX 

CPX 

CPX 

CPX 

Destination 

SIG 

SIG 

SIG 

SIG 

Depart 

7:00:00 

11:30:00 

15:30:00 

17:20:00 

Arrive 

7:30:00 

12:00:00 

16:00:00 

17:50:00 

Mon 

1 

1 

1 

1 

Tues 

1 

1 

1 

1 

Weds 

1 

1 

1 

1 

Thurs 

1 

1 

1 

1 

Fri 

1 

1 

i 

i 

Sat 

1 

1 

1 

1 

Sun 

1 

1 

1 

Miles 

48 

48 

48 

48 

CEIBA (CBA) TO CULEBRA (CPX) 

...Fifehtseheauie i ••-•-:•; '^ "V-•• - rjc . •./<..>••,-^ s^;-,:-viv;. : ^ '-• ^ - • .•.it^vA-,:v;,./,^': ;^;-- ,:. ?-^ 

Flight 

Segment # 

1 

2 

3 

4 

5 

6 

7 

8 

Number 

201 

203 

205 

207 

Origin 

CBA 

CBA 

CBA 

CBA 

Destination 

CPX 

CPX 

CPX 

CPX 

Depart 

07:00:00 

09:00:00 

12:00:00 

16:00:00 

Arrive 

07:15:00 

09:15:00 

12:15:00 

16:15:00 

Days of Operation (1=Segment 

Mon 

1 

1 

1 

1 

Tues 

t 

1 

1 

1 

Weds 

1 

1 

1 

1 

Thurs 

1 

1 

1 

1 

Flown, 

Fri 

1 

1 

1 

1 

0=Not Flown) 

Sat 

1 

1 

1 

1 

Sun 

1 

1 

1 

1 

Miles 

22 

22 

22 

22 

CULEBRA (CPX) TO CEIBA (CBA) 

FltghtSCh«aule2^'-->-.v;:-^'=.sS,.;,- :.,*,: ^,M,«;A;vr/:;' ^ -:,:•• ••.:>% v';..^.-y:&ra;t;-;:-.v ^, :',„;>:: . •.•;,:;-.:•; B::;^ 

Flight 

Segment # 

1 

2 

3 

4 

5 

6 

7 

8 

Numtser 

202 

204 

206 

208 

Origin 

CPX 

CPX 

CPX 

CPX 

Destination 

CBA 

CBA 

CBA 

CBA 

Depart 

07:30:00 

10:00:00 

13:00:00 

17:30:00 

Arrive 

07:45:00 

10:15:00 

13:15:00 

17:45:00 

Days of Operation (1=Segment Flown, 0=Not Flown) 

Mon 

1 

1 

1 

1 

Tues 

1 

1 

1 

1 

Weds 

1 

1 

1 

1 

Thurs 

1 

1 

1 

1 

Fri Sat 

1 

1 

1 

1 

Sun 

1 

1 

1 

1 

Miles 

22 

22 

22 

22