August23,2012 

Mr. Damon Walker 

U.S. Department of Transportation 

1200 New Jersey Ave., S.E. 

Washington, DC 20590 

Dear Mr. Walker: 

PACIFIC 

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Please be advised that Carlsbad Palomar Airlines Inc. dba California Pacific Airlines 

does not object to the removal of Exhibits 8, 12, 16, and 17 from our prior request 

for confidential treatment under 14 CFR 302.12 (Rule 12) .. 

We would appreciate it if you can handle this request for us. See attached. 

· Sincerely, 

~c-J Ted Vallas 

President and CEO 

Carlsbad Palomar Airlines 

5670 El Camino Real, Suite D 

Carlsbad, CA 92008 

Enclosure 

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Yearl 

Expenses 

Scheduled Flights 

Opearted Flights 

EMB-170 Block Hours 

Block Hours 

Passenger Segments Federal Excise Tax 

Excise Tax (7.5%) 

carlsbad 

Station Expenses 

Wages 

Executive/Palomar + Crew + Ground 

Aircraft 

EMB-170 Lease (1% Value/month) 

Aircraft Expenses 

Non Carlsbad Station Expenses 

CP Airline • Year 1 

280 275 282 286 420 456 444 456 716 736 742 

277 272 279 283 416 451 440 451 709 729 735 

319 313 320 325 507 550 535 550 831 853 861 319 313 320 325 507 550 535 550 831 853 861 

10798 11795 12366 12587 18103 22224 22030 22691 36684 38808 39037 

$ 68,017 $ 82,754 $ 86,714 $ 90,884 $ 138,222 $ 172,568 $ 174,940 $ 182,537 $ 289,997 $ 305,778 $ 307,433 

$ 38,273 $ 38,532 $ 38,853 $ 40,002 $ 52,320 $ 54,404 $ 55,123 $ 55,568 $ 73,098 $ 74,198 $ 74,386 

$ 394,402 $ 394,893 $ 395,174 $ 445,239 $ 503,712 $ 505,740 $ 505,644 $ 505,970 $ 568,614 $ 569,659 $ 569,772 

$ 160.000 $ 160.000 $ 160,000 $ 160,000 $ 320,000 $ 320.000 $ 320,000 $ 320,000 $ 480,000 $ 480,000 $ 480.000 

$ 160,000 $ 160,000 $ 160,000 $ 160,000 $ 320,000 $ 320,000 $ 320,000 $ 320,000 $ 480,000 $ 480,000 $ 480,000 

Landing fee, gate, office space ($525/flig $ 72,823 $ 71,516 $ 73,285 $ 74,324 $ 109,148 $ 118,503 $ 115,385 $ 118,503 $ 186,071 $ 191,268 $ 192,827 

Ground Handling/Gate Agents ($250/ftigl $ 35,371 $ 34,736 $ 35,595 $ 36,100 $ 53,015 $ 57,559 $ 56.044 $ 57,559 $ 90,377 $ 92,902 $ 93,659 

Non carlsbad Station Expenses $ 108,194 $ 106,252 $ 108,880 $ 110,425 $ 162,162 $ 176,062 $ 171,428 $ 176,062 $ 276,448 $ 284,170 $ 286,486 

Sales 

$40 entertainment per day 

$20 per diem 

$ 2,500 $ 2,500 $ 2,500 $ 4,000 $ 4,000 $ 4,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 

$ 1.000 $ 1,000 $ 1,000 $ 2.000 $ 2,000 $ 2,000 $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ 2,500 

Sales per diem (mileage, ent, lodging) $ 3,500 $ 3,500 $ 3,500 $ 6,000 $ 6,000 $ 6,000 $ 7,500 $ 7,500 $ 7,500 $ 7,500 $ 7,500 

Fuel 

Fueling ground expense (8 cents/gallon) $ 12,236 

EMS 170 Fuel Usage $ 379,651 

$2.62 per gallon ( $90 per barrel) 

Fuel Cost $ 391,887 

12,023 

373,056 385,079 $ 

12,298 

381,581 393,879 

12,488 

387,479 399,967 

19,471 

604,120 

21,105 $ 

654,840 $ 

623,590 $ 675,945 

20,560 $ 21,105 $ 31,895 $ 32,770 $ 33,055 

637,933 $ 654,840 $ 989,633 $ 1,016,762 $1,025,608 

658,494 $ 675,945 $ 1,021,528 $ 1,049,532 $ 1,058,663 

8/3/2012 
• 

Human Resources 

Desktop PCs 

ADP PayroiVWeb Services 

Software Updates 

California Chamber 

HR Seminars on CA Labor Laws Resource Materials 

Handbooks/ID Badges 

Office Supplies 

Insurance 

170 Insurance 

Monthly Insurance 

Marketing/Distribution 

Advertising (TV, Print) 

Promotions Promotional Materials 

Website Costs 

Software/App Development 

CRM/Sales software 

Revenue Management System 

Computer Systems 

Marketing Effort 

Crew Expense 

Training - Pilots 

Training - Flight Attendents 

Training - Lodging and meals 

Training - Travel 

Uniform - Pilots/FA's 

-Crew expense 

Maintenance 

$225 per block hour 

Warranty Benefit ($225 benefit) 

Maintanance Expense 

Distribution Expenses 

Credit card (85% of sales) 

Debit card fee (20 cents per sale) 

GDS ($3.15 per segment) 

Navitalre Host fee 

Beverages/Snacks ($.2 per Y pax) 

General and Administrative 

Fuel Price 

OU per barrel 

8/3/2012 

CP Airline • Year 1 

\'z; ;'lie%; i:M<Ii'z.z *'' ;•i><S ;,?lc ;;;:Mo<.t!. :';k;i 

$ $ $ $ $ $ $ $ - $ $ - $ - $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 

$ 500 $ $ $ $ $ $ - $ $ $ $ 

$ $ $ $ $ $ $ $ $ $ $ 

$ $ $ $ $ $ $ $ $ $ $ 

$ 100 $ $ $ $ $ $ - $ $ $ $ 

$ 300 $ 300 $ 300 $ 300 $ 300 $ 300 $ 300 $ 300 $ 300 $ 300 $ 300 

200 200 200 200 200 200 200 200 200 200 200 

$ 1,600 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 28,000 $ 28,000 $ 28,000 $ 28,000 $ 56,000 t 56,000 $ 56,000 $ 56,000 $ 84,000 $ 84,000 $ 84,000 

$ 28,000 $ 28,000 $ 28,000 $ 28,000 $ 56,000 $ 56,000 $ 56,000 $ 56,000 $ 84,000 $ 84,000 $ 84,000 $ 30,000 $ 16,551 $ 17,343 $ 18,177 $ 27,644 $ 34,514 $ 34,988 $ 36,507 $ 57,999 $ 61,156 $ 61,487 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 

$ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 

$ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 

2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 i 2,000 

$ 45,000 $ 31,551 $ 32,343 $ 33,177 $ 42,644 $ 49,514 $ 49,988 $ 51,507 $ 72,999 $ 76,156 $ 76,487 

$ $ $ $ 80,000 $ 10,000 $ $ $ 80,000 $ $ 10,000 

33,600 $ 2,000 $ 2,000 $ 2,000 $ 33,600 $ 2,000 $ 2,000 $ 33,600 $ 2,000 $ 2,000 $ 2,000 

9,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 

$ 1,650 $ 1,650 $ 1,650 $ 1,650 $ 1,650 $ 1,650 $ 1,650 $ 1,650 $ 1,650 $ 1,650 $ 1,650 

1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 

$ 45,250 $ 5,650 $ 5,650 $ 5,650 $ 117,250 $ 15,650 $ 5,650 $ 37,250 $ 85,650 $ 5,650 $ 15,650 

$ 20,695 $ 19,450 $ 21,060 $ 22,173 $ 63,085 $ 72,663 $ 69,471 $ 72,663 $ 135,887 $ 141,010 $ 142,681 

$ - $ $ $ - $ $ $ $ $ - $ - $ ___ - _

$ 20,695 $ 19,450 $ 21,060 $ 22,173 $ 63,085 $ 72,663 $ 69,471 $ 72,663 $ 135,887 $ 141,010 $ 142,681 

15,417 $ 18,758 $ 19,655 $ 20,600 $ 31,330 $ 39,115 $ 39,653 $ 41,375 $ 65,733 $ 69,310 $ 69,685 

140 $ 153 $ 161 $ 164 $ 235 $ 289 $ 286 $ 295 $ 477 $ 505 $ 507 

$ 10,204 $ 11,146 $ 11,686 $ 11,895 $ 17,107 $ 21,002 $ 20,818 $ 21,443 $ 34,666 $ 36,674 $ 36,890 

$ 66,500 $ 66,500 $ 66,500 $ 66,500 $ 66,500 $ 66,500 $ 66,500 $ 66,500 $ 66,500 $ 66,500 $ 66,500 

$ 92,262 $ 96,557 $ 98,002 $ 99,158 $ 115,173 $ 126,906 $ 127,258 $ 129,613 $ 167,376 $ 172,988 $ 173,583 

1,944 2,123 2,226 2,266 $ 3,259 4,000 3,965 4,084 6,603 6,985 7,027 

$ 42,038 42,532 42,669 42,824 44,496 45,680 $ 45,756 $ 46,021 49,794 50,342 $ 50,403 

90 
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Carlsbad Pacific Airlines 9:12AM 

07126/12 

Accrual Basis Start-up Costs for Development Stage Company 

July 2009 through June 2012 

Jui'09 • Jun 12 

Ordinary Income/Expense 

Income 

Interest Income-Money Market 186.32 

Rental Income ·Condo 23,970.00 

Corporate Apartment Rent 3,936.57 

In-Flight Magazine 7,330.00 

Interest Income 700.27 

Uncategorlzed Income 60.00 

Total Income 36,183.16 

Expense 

Rent Expense Aircraft 12,530.00 

Environmental Assessment Fees 25,853.22 

Rental Expenses • Condo 16,095.73 

Property Tax 1.199.65 

Relocation Expense 1,275.00 

Software·Res and Flight Ops 125,000.00 

Recruiting Expense 6,591.47 

Ac~rued Prof Fees-Lakeview 16,117.50 

Accounting 63,028.34 

Auditing 4,000.00 

AdVertising and Promotion 43.061.50 

Automobile Expense 3,055.30 

Bank Service Charges 9,536.28 

Board of Director Fees 

Victor Ramirez-Soard Member 2.400.00 

Tom Morrow-Board Member 2,400.00 

Ted Vallas-Soard Member 4,800.00 

TG Vallas-Soard Member 1.500.00 

John Polchin-Board Member 900.00 

John Penant Jones-Board Member 2,400.00 

Jim Buntz·Board Member 2,400.00 

Frank Goldberg·Board Member 900.00 

Femando lriarte·Board Member 900.00 

Chuck Hansen-Board Member 1,800.00 

Andy Smith-Board Member 2,100.00 

Board of Director Fees • Other 13,545.00 

Total Board of Director Fees 36,045.00 

Business Licenses and Permits 50.00 

Car Rental 1.060.74 

Cash 40.00 

Exhibit 2 

Page1 of4 
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Carlsbad Pacific Airlines 9:12AM 

07/25112 

Accrual Basis Start-up Costs for Development Stage Company 

July 2009 through June 2012 

Jui'09 • Jun 12 

Charitable Contributions 7,575.00 

Computer and Internet Expenses 42,711.11 

Credit Card Fees 30.00 

Dues and Subscriptions 59,934.91 

Employee Baneflts 6,129.73 

Employment Expense 7,407.10 

Equipment Rental 3,467.98 

Finance Charge 4.859.28 

Fuei·Auto 2,001.49 

Insurance Expense 

Dental 4,131.28 

Director/Officer's Insurance 11,687.80 

Gonaralllablllty Insurance 6,689.00 

Health lnsuran~;e 79,481.45 

Unemployment Insurance 2,145.96 

VIsion Insurance 804.11 

Worker's Compensation 20,514.48 

Total insurance ExpensEt 125,454.08 

Interest Expense 71,318.92 

Janitorial and other 114.66 

Late Fees and Service Charges 568.32 

Legal and Accounting 

Legal • General Corporate 35.?.85.47 

Legal· Aircraft Lease 39.596.00 

Logal and Accounting • Other 83,572.97 

Total legal and Accounting 158,454.44 

Licenses and Permlta 2.126.00 

Lodging 5,070.01 

Management Fees 252,000.00 

Manuals and Publications 145,896.73 

Meals and Lodging 28,748.41 

Meals and Entertainment 22,465.55 

Memberships and Oues 9,713.50 

Mileage 125.15 

Miscellaneous EKpense 19,464.20 

Office fumiture ·624.34 

Office Supplies 27,749.65 

Parking 1,041.68 

Payroll Expense· Admlnistratio 1 ,341 ,442.65 

Payroll Expenses 03,101.79 

Page2of4 
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9:12AM 

07125/12 

Accrual Basis 

Carlsbad Pacific Airlines 

Startwup Costs for Development Stage Company 

July 2009 through June 2012 

Payroll Foes 

Payroll Taxes 

Political Contributions 

Postage anct Delivery 

. Printing and Reproduction 

Professional Fees 

Promotion 

Reconciliation Discrepancies 

Rent Expense 

June Vallas Condo 

Palomar Airport Board Room 

6621 Palmer Way 

Common area maintenance 

Total 5621 Palmer Way 

5670 El Camino Real 

Corporate Condo 

Palomar Airport 

Rent Expense • OU1er 

Total Rent Expense 

Repairs and Maintenance 

Safety Expanses 

Slgnage 

Tax Preparation 

Taxes • Property 

Taxes • Late Fee 

Taxes • Income 

Telephone Expense 

Conference Call Software 

Collular·CPAir 

Cellular-Ductz 

Cellular 

CP Air HQ Telephone 

Puctz/Hoodz Telephone 

Fax 

Palomar T1 Service 

Telephone Expense • Other 

Total Tel&phone Expense 

Training 

Training· Travel 

Jul'09 • Jun 12 

829,449.28 

215,918.96 

200.00 

6,519.87 

13,694.16 

695,942.30 

33,495.61 

·6.00 

3,456.83 

12,000.00 

4,101.43 

4,101.43 

69,196.91 

12,000.00 

89,138.00 

105,856.94 

315,750.11 

6,007.67 

461.74 

596.46 

1,700.00 

771.56 

13.00 

2,251.00 

343.75 

66.93 

477.90 

3,046.88 

24,977.20 

169.27 

1,509.90 

9,017.12 

13,117.22 

52,726.17 

543.20 

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Carlsbad Pacific Airlines 9:12AM 

07126/12 

Accrual Basis Startwup Costs for Development Stage Company 

July 2009 through June 2012 

Training-Rental car 

Trainlng-Qfflc~ Supplies 

Training-Meals 

Training • Lodging 

Training • Oth~tr 

Total Training 

Travel Expense 

Utilities 

236&Snead 

5670 Ef Camino Real 

Utilities • Other 

Total Utilities 

Total Expense 

Net Ordinary Income 

Other Income/Expense 

Other Income 

Reimbursement 

Misc. Income 

Total Other Income 

Other Expense 

Siate Income Tax 

Total Other Expense 

Net Other Income 

Net Income 

Jul '09 • Jun 12 

785.68 

172.56 

1.456.50 

2,615.85 

12,007.00 

17,782.79 

50,833.59 

2,941.26 

7,208.25 

14,253.33 

24,402.64 

5,063,499.26 

·5,027,316.10 

2,468.00 

881.69 

3,349.69 

630.00 

630.00 

2,519.69 

·5,024,796.41 

Page4 of4 
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Operating Forecas • , Day_l of Service 

I Jul-12 I I Sep-12 I Oct-12 I Nov-12 I 

OPERATING REVENUES 

Passenger $0 $0 $0 $0 $0 

Cargo 

Other $0 $0 $0 $0 $0 

Total operating revenues $0 $0 $0 $0 $0 

OPERATING EXPENSES 

Federal Excise tax 7-5% $0 $0 $0 $0 $0 

Aircraft fuel $0 so $0 $0 $0 

Salaries, wages and benefits $110,000 $135,000 $150,000 $400,000 $400,000 

Aircraft rent $175,000 $175,000 $175,000 $175,000 $175,000 

Maintenance, materials and repairs $64,254 $64,254 $74,254 $64,254 $64,254 

Training Costs $0 $0 $0 $0 $0 

Landing fees and other rents $0 so $0 $0 $0 

Diversion Costs $0 $0 $0 $0 $0 

Aircraft insurance $17,500 $17,500 $17,500 $17,500 $17,500 

Marketing and advertising $0 $0 $0 $0 $20,000 

Distribution $0 $0 $0 $0 $0 

Other operating $20,000 $20,000 $20,000 $20,000 $20,000 

Total operating expenses $386,754 $411,754 $436,754 $676,754 $696,754 

OPERATING INCOME {LOSS) $386,754 $411,754 $436,754 $676,754 $696,754 

7/24/2012 

""--·.;.-::.:. 
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7:39AM 

07/27/12 

Aecruat Basis 

Carlsbad Pacific Airlines 

Balance Sheet 

As of June 30, 2012 

ASSETS 

Current Assets 

Checking/Savings 

Torrey Pines Money Market 

Torrey Pines Bank Escrow 

Torrey Pines Bank 

Total Checking/Savings 

Other Current Assets 

Stockholder Receiv • Frank Gold 

Note Receivable· Ted Vallas 

Total Other Current Assets 

Total Current Assets 

Fixed Assets 

Real Estate 

Computer Equipment 

Furniture and Equipment 

Tenant Improvements 

Total Fixed Assets 

Other Assets 

Deposit • Navataire 

Deposit on Aircraft 

Socurlty Deposit • Board Room 

2004 Jaguar 

Security Deposit-Corp Apt 

Total Other Assets 

TOTAL ASSETS 

l.IASILITIES & EQUITY 

Liabilities 

Current Liabifities 

Other Current Liabilities 

Accrued Vacation 

Accrued Consulting-Lakeview 

Accrued Payroll 

Total Other Current Liabilities 

Total Current Liabilities 

Long Term Liabilities 

Note Payable • ORH 

Total Long Term Liabilities 

Total Llab.ilitles 

Equity 

Bill King -Common Stock 

Common Stock- Lloyd ProS$er 

Jun 30,12 

274,865.69 

56,495.36 

77,517.86 

406,878.91 

1,840,000.00 

22,000.00 

1,862,000.00 

2,270,878.91 

400,000.00 

37,282.07 

44,817.42 

6,267.66 

488.367.17 

25,000.00 

824,329.90 

~.000.00 

18.595.01 

2.000.00 

1,361,292.08 

4,120,638.16 

1,282.96 

16,312.50 

62,227.50 

79,822.96 

79,822.96 

5,000.00 

5,000.00 

84,822.96 

100,000.00 

12,000.00 

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Carlsbad-Palomar Airlines, Inc. 

dba California Pacific Airlines 

(A Development Stage Company) 

Report on Financial Statements 

For the Years Ended December 31, 2011 and 2010 

and the Period From July 2, 2009 (Date of Inception) 

Through December 31, 2011 
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CARLSBAD-PALOMAR AIRLINES, INC. 

DBA CALIFORNIA PACIFIC AIRLINES 

(A Development Stage Company) 

PagQ 

Report of Independent Public Accountants 2 

Balance Sheets 

December 31, 2011 and 2010 3 

Statements of Operations 

Years Ended December 31, 2011 and 2010 and the Period From 

July 2, 2009 {Date of Inception) Through December 31, 2011 (Unaudited) 4 

Statements of Stockholders' Equity 

For the Period From July 2, 2009 (Date of Inception) Through 

December 31, 2011 (Unaudited) 5 

Statements of Cash Flows 

For the Years Ended December 31, 2011 and 2010 and the Period From 

July 2, 2009 (Date of Inception) Through December 31, 2011 (Unaudited) 6 

Notes to Financial Statements 7 ~ 12 

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-•••R•••••"••k ... oho,,,,, ''''" ~'''"'''"''~'' ,,~,.~ •••• •·•••••< ...... ~ ,, , 0 , ,,,, ., •• , ,, 0 , , 0 ·-•••• , , 0 , • • o '' " oo •Y-o••-·---·vo-., oo ''' ''~''''"-"'•'-'' •••• ·-••••••-• o -••••••••-' ,,,_, ,,,,,,,_, ... ,, ___ oooooo, "~' '"·' o< 0 ''' o •n<oo • ,,,,,,,_.,_ 0 ooOoO,OoO '"'' ,,,, • 0 

II J.H. COHN LU' 

AfrouniJnl.l,mtf Co11suiMnts 5:r.c~ I'J; 'J 

Report of Independent Public Accountants 

To the Board of Directors 

Carlsbad·Palomar Airlines, Inc. 

dba California Pacific Airlines 

(A Development Stage Company) 

·····•·· ••• , ... ,,_.,, <¥•••••-•··---·••••••---• 

We have audited the accompanying balance sheet of Carlsbad-Palomar Airlines, Inc., dba California 

Pacific Airlines (A Development Stage Company) as of December 31, 2011, and the related statements 

of operations, stockholders' equity and cash flows for the year then ended.· These financial statements 

are the responsibility of the Company's management. Our responsibility is to express an opinion on 

these financial statements based on our audit. Tlie financial statements of Carlsbad-Palomar Airlines, 

Inc. dba California Pacific Airlines as of December 31, 2010 and for the year then ended, were audited 

by other auditors whose report dated January 4, 2012, expressed an unqualified opinion on those 

statements. 

. . 

Except as discussed in the following paragraph, 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 the financial statements. An audit also includes assessing the accounting 

principles used and significant estimates 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 accordance with the terms of our engagement, we have not applied audit procedures necessary to 

satisfy ourselves about the classifications and amounts comprising the statements of operations, 

stockholders' equity and cash flows for the period from July 2, 2009 (date of inception) through 

December 31, 2011. 

Because of the matter discussed in the preceding paragraph, the scope of our work was not sufficient 

to enable us to express, and we do not express, an opinion on the results of operations and cash flows 

for the period from July 2, 2009 (date of inception) through December 31, 2011, and stockholders' 

equity for the period from July 2, 2009 (date of inception) through December 31, 2011. 

In our opinion, the 2011 financial statements referred to in the first paragraph present fairly, in all 

material respects, the financial position of Carlsbad-Palomar Airlines, Inc. dba California Pacific Airlines 

as of December 31, 2011, and its results of operations and cash flows for the year then ended. in 

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

San Diego, California 

June 20, 2012 

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CARLSBADNPALOMAR AIRLINES, INC . 

DBA CALIFORNIA PAClFIC AIRLINES 

(A Development Stage Company} 

BALANCE SHEETS 

DECEMBER 31, 2011 AND 2010 

ASSETS 2011 

Current assets: 

Cash and cash equivalents $ 151,643 

Stockholder receivable 

Common stock subscription receivable 1,000,00() 

Total current assets 1,151,543 

Property and equipment, net . 445,665 

Other assets 231,200 

Totals assets $ 1,828,408 

= 

LIABILITIES AND STOCKHOLDERS' EQUITY 

Current liabilities: 

Accounts payable $· 48,437 

Accrued liabilities 79,629 

Total current liabilities 128,066 

Deferred rent 4,961 

Total liabilities t33,02l 

Commitments 

Stockholders' equity: 

Series A common stock, no par value; 98,800,000 shares 

authorized; 655,652 shares issued and outstanding 

in 2011 6,032,000 

Series B common stock, no par value; 1,200,000 shares 

authorized; 1,200,000 and 1,000,000 shares issued 2,958,031 

and outstanding in 2011 and 2010, respectively 

Common stock subscription receivable (2,840,000) 

Deficit accumulated during the development stage (4,454,650) 

· Total stockholders' equity 1,695,381 

Totals liabilities and stockholders' equity $ 1,8'28,408 

See Notes to Financial Statements. 

3 

2010 

$ 20,243 

161,733 

181,976 

472,771 

26,300 

$ 681,047 

$ 22,194 

263,869 

286,063 

286,063 

2,590,332 

(2,195,348) 

394,984 

$ 681,047 
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CARLSBAD~PALOMAR AIRLINES, INC. 

DBA C~LIFORNIA PACIFIC AIRLINES 

(A Development Stage Company} 

STATEMENTS OF OPERATIONS 

FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010 AND THE PERIOD 

FROM JULY 2, 2009 (DATE OF INCEPTION) THROUGH DECEMBER 31,2011 

Period from July 2, 2009 

(date of inception) through 

December 31, 2011 

2011 2010 (Unaudited) 

Operating expenses .J...2, 194,525 $ 1,612,585 $ 4,379,785 

Other income (expense): 

Interest income 125 462 

Interest expense (63,926) (9,720) (73,646) 

Total other expense (63,926) (9,595). (73, 184) 

Loss before provision for taxes (2,258,451) (1,622,180) .. (4,452,969) 

' 

Provision for taxes 851 830 1,681 

Net loss $ {2,259,302) $ (1 ,623,010) $ (4,454,650) 

See Notes to Financial Statements . 

4 
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Issuance of common stock on 

July 2, 2009 (date of inception) 

Net loss 

Baiance, December 31, 2009- unaudited 

Capital contributions for the year ended 

December 31, 2010 

Net loss 

Balance, December 31, 2010 

Issuance of common stoel< 

Net loss 

Balance, December 31, 2011 

CARLSBAD-PALOMAR AIRLINES, INC. 

DBA CALIFORNIA PACIFIC AIRLINES 

(A Development Stage Company) 

STATEMENTS OF STOCKHOLDERS' EQUITY 

FOR THE PERIOD FROM JULY 2009 (DATE OF INCEPTJON) 

. THROUGH DECEMBER 31,2011 

Common Stock Common Stock 

Shares Shares Subscription 

Class A Amount Class 8 Amount Receivable 

$ - 1,000.000 $ 622.706 $ -

- - -

1,000,000 622,706 -

- 1,967,626 

- - - - -

. 1,000,000 2,590.332 . 

655,652 6,032,000 200,000 367,699 (2,840,000) 

- - - . -

655,652 $ 6,032,000 1,200,000 $ 2,958,03_1__ $ {2,840,000) 

See Notes to Financial Statements. 

5 

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• 

CARLSBAD-PALOMAR AIRLINES, INC. 

DBA CALIFORNIA PACIFIC AIRLINES 

(A Development Stage Company) 

STATEMENTS OF CASH FLOWS 

FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010 AND THE PERIOD 

FROM JULY 2, 2009 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2011 

Operating activities: 

Net loss 

Adjustments to reconcile net loss to net cash 

used in operating activities: 

Depreciation and amortization 

Deferred rent 

Changes in operaling assets and liabilities: 

Stockholder receivable 

Other assets 

Accounts payable 

Accrued liabilities 

Net cash used in operating activities 

Investing activities: 

Purchase of property and equipment 

Net cash used in investing a9tivities 

Financing activities: 

Proceeds from issuance or common stock 

Net cash provided by financing activities 

Net increase (decrease) in cash and cash equivalents 

Cash and cash equivalents, beginning of period 

Cash and cash equivalents, end of period 

Supplementary disclosure of cash flow data: 

Interest patd 

Income taxes 

Supplementary disclosure of noncash investing and 

financing activilies: 

Property acquired through capital contribution 

made by stockholder 

Common stock subscription receivable 

See Notes to Financial Statements. 

2011 

$ (2,259,302) 

61,297 

4,961 

161,733 

(204,900) 

29,243 

(184,240)_ 

(2,394,208) 

(34,191) 

(34,191) 

2,659,699 

2,559,699. 

131,300 

20,243 

$ 151,543 

$ 61,599 

$ 861 =:;;;';:;'.:~:.~.::.~a."ro" .. "'-:u:a;:lo.~ 

$ 

$ 3,840,000 

6 

Period from July 2, 2009 

(date of inception) through 

December31, 2011 

2010 (Unaudited) 

$ (1,623,010) $ (4,454,650) 

61,297 

4,961 

(112,429) 

(26,300) (231,200) 

(111,751) 48,437 

179,869 79,629 

(1,693,621) (4,491,526) 

(44,499) (106,962) 

(44,499) (106,962) 

1,567,626 4,750,031 

1,567,626 4,750,031 

(170,494) 151,543 

190,737 

$ 20,243 $ 151,543 

~ 

$ 9,720 $ 71,319 ., ....... =ee:e::::e.=e~ 

.!. 830 $ 1,681 ·--

~--=·-~ ==$======4=-oo=·=oo..,o= 

$ $ 3!.840,000 ='========== 
• • 

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II 

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II 

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Ill 

Ill 

Ill 

Ill 

Ill 

Ill 

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' 

CARLSBAD-PALOMAR AIRLINES, INC . 

DBA CALIFORNIA PACIFIC AIRLINES 

(A Development Stage Company) 

NOTES TO FtNANCIAL STATEMENTS 

Note 1 - Business organization and summary of significant accounting policies: 

Organization: 

Carlsbad-Palomar Airlines, Inc. dba California Pacific Airlines (A Development 

Stage Company) (the "Company"/, a California corporation headquartered in 

Carlsbad, California, plans to provide non-stop flights to business and leisure 

travelers from McClellan-Palomar Airport in Carlsbad, CA to five Western cities 

including Sacramento, CA; San Jose, CA; Oakland, CA; Las Vegas, NV; and 

Phoenix, AZ, and later plans to extend services to Cabo San Lucas and Puerto 

Vallarta in Mexico. The Company is considered to be in the development stage 

and is subject to all of the risks associated with development stage companies. 

Liquidity and management plans: 

The Company is in the development stage and has experienced losses and 

negative cash flow since inception. The Company expects this trend to continue 

at least through 2012. The Company also expects to continue to be able to fund 

operations on an uninterrupted basis throLigh at least 2012 through proceeds of 

debt and/or equity financings. To the extent proce·eds are not sufficient, certain 

of the owners are committed to providing any working capital required. In 2012, 

the Company is seeking to obtain Federal Aviation Administration approval and 

enter into airport and additional airplane lease agreements. The Company 

expects to obtain approval and obtain new leases; however, there are risks and 

uncertainty of not executing these plans. 

Concentrations of credit risks: 

Financial instruments which potentially subject the Company to concentrations 

of credit risk consist primarily of cash and cash equivalents. The Company 

considers all highly liquid debt instruments with an original maturity of three 

months or less when purchased to be cash equivalents. The Company 

maintains its cash and cash equivalents with high-credit quality financial 

institutions. At times, such amounts may exceed Federally insured limits. 

Use of estimates: 

The preparation of financial statements in conformity with accounting principles 

generally accepted in the United States of America requires management to 

make estimates and assumptions that affect certain reported amounts and 

disclosures. Accordingly, actual results could differ from those estimates. 

Property and equipment: 

Property and equipment are stated at cost less accumulated depreciation. 

Depreciation of equipment is provided over estimated useful lives of 3 to 20 years 

on a straight-line basis. Leasehold improvements are amortized over their 

estimated useful lives or the terms of tile respective leases, whichever is less. 

7 
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I 

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II 

Ill 

Ill 

Ill 

• 

II 

It' 

\ 

·---·-····---··--····---······· .. ······· '-----·-----

CARLSBAD-PALOMAR AIRLINES, INC . 

DBA CALIFORNIA PACIFIC AIRLINES 

(A Development Stage Company) 

NOTES TO FINANCIAL STATEMENTS 

Note 1 - B.usiness organization and summary of significant accounting policies 

(concluded}: 

Advertising: 

. Advertising costs are expensed as incurred. Advertising costs were $37,199 and 

$36,195 for the years ended December 31, 2011 and 2010, respectively . 

Leases: 

Deferred rent represents the excess of recognized rent expense over scheduled 

lease payments . 

Income taxes: 

The Company accounts for income taxes pursuant to the asset and liability 

method which requires deferred tax assets and liabilities be recognized annually 

for differences between the financial statement and tax bases of assets and 

liabilities resulting in taxable or deductible amounts in the future based on 

enacted tax laws and rates applicable to the periods in which the differences are 

expected to affect taxable income. The Company recognizes the effect of the 

change in the tax rates on deferred tax assets and liabilities in income in the 

period that includes the enactment date. Valuation allowances are established 

when it is more likely than not that the future realization of all or some of the 

deferred tax assets will not be achieved. As of December 31, 2011 and 2010, a 

full valuation allowance has been provided against the net deferred tax assets. 

Income tax expense is the tax payable or refundable for the period plus or minus 

the change during the period in deferred tax assets and liabilities. 

The Company has no unrecognized tax benefits at December 31, 2011 and 

2010. None of the Company's previously filed U.S. Federal and state income tax 

returns are closed and management continually· evaluates expiring statutes of 

limitations, audits, proposed settlements, changes in tax law and new 

authoritative rulings. 

The Company recognizes interest and penalties associated with tax matters as 

part of the income tax provision and includes accrued interest and penalties 

within accrued liabilities in the balance sheet. No such amounts are included in 

the financial statements for the years ended December 31, 2011 and 201 0 and 

the period from July 2, 2009 (date of inception) through December 31, 2011. 

Subsequent events: 

The Company has evaluated events and transactions for potential recognition or 

disclosure through June 20, 2012, which is the date the financial statements 

were available to be issued. 

8 
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• 

• 

, 

• 

• 

• 

• 

• • • 

' 

CARLSBAD-PALOMAR AIRLINES, INC . 

DBA CALIFORNIA PACIFIC AIRLINES 

(A Development Stage Company) 

NOTES TO FINANCIAL STATEMENTS 

Note 2 ft Property and equipment: 

Property and equipment consist of the following at December 31, 2011 and 2010: 

2011 2010 

Computer software and equipment $ 37,282 $ 37,282 

Furniture and equipment 44,817 29,221 

Tenant Improvements 6,268 6,268 

Automobile 18,595 

Real estate 400,000 400,000 

506,962 472,771 

Less accumulated depreciation and 

amortization 61,297 

Totals $ 445,665 $ 472,771 

Depreciation expense totaled $61 ,297 for the year ended December 31, 2011. No 

depreciation or amortization expense was recognized for the year ended 

December 31, 2010 as the assets had not been placed in service . 

Note 3- Accrued liabilities: 

Accrued liabilities at December 31, 2011 and 2010 consist of the following: 

2011 201.0 

Interest $ $ 1,167 

Management fees . 228,000 

Salaries and wages 62,228 33,445 

Consulting 16,118 

Vacation 1,283 1,257 

$ 79,629 $ 263,869 

9 
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• • • • • 

II 

II 

I( 

, 

Note 4 • Income taxes: 

CARLSBAD-PALOMAR AIRLINES, INC. 

DBA CALIFORNIA PACIFIC AIRLINES 

(A Development Stage Company) 

NOTES TO FINANCIAL STATEMENTS 

As a result of net operating losses, the Company has not recorded a provision for 

income taxes. The Company's deferred tax assets consist of the following at 

December 31, 2011 and 2010: 

2011 2010 

Deferred tax assets: 

Start up costs $ 1,752,630 $ 875,490 

Other (21,630) (163,925) 

Total gross deferred tax asset 1,731,000 711,565 

Valuation allowance (1,731,000) . (711,565) 

Total net deferred tax assets $ $ 

In assessing the net carrying value of deferred tax assets, management considers 

whether it is more likely than not that some portion or all of the deferred tax assets 

will not be realized. Among other items factored, management consider:,; projected 

future taxable income and tax planning strategies in making the assessment. Due 

to uncertainty surrounding the realization of deferred tax benefits in the future, the 

Company has recorded a full valuation allowance against its deferred tax assets as 

of December 31, 2011 and 2010 . 

As of December 31, 2011, the Company has Federal and state net operating loss 

carryforwards of approximately $11,000 and .$9,000, respectively. The Federal net 

operating loss carryforwards will begin to expire in 2030. The state net operating 

loss carryforwards will begin to expire in 2030. The Company's ability to utilize net 

operating loss carryforwards may be limited in the event that a change in 

ownership, as defined in the Internal Revenue Code, occurs in the future. 

Pursuant to section 382 of the Internal Revenue Code, annual use of the 

Company's net operating loss may be limited in the event that a cumulative change 

in ownership of more than 50% has occurred within a three-year period. Any such 

annual limitation may significantly reduce the utilization of the net operating losses 

before they expire. 

As of December 31, 2011, the Company completed a Section 382/383 analysis 

regarding the ·limitation of the net operating loss carryforwards and determined that 

no such limitation exists. 

The Company's effective tax rate of 0% differs from the Federal statutory rate of 

34% due mainly to the Company's recording of a full valuation allowance on its net 

deferred tax assets. 

10 
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• • • • • • I 

l I 

I 

I 

I 

I 

I 

I 

I 

41 

CARLSBAD-PALOMAR AIRLINES, INC. 

DBA CALIFORNIA PACIFIC AIRLINES 

(A Development Stage Company) 

NOTES TO.FINANCIAL STATEMENTS 

Note 5 ~ Common and preferred stock: 

Common and preferred stock at December 31, 2011 and 2010 consist of the 

following: 

2011 2010 

Series A common stock, no par value; 98,800,000 shares 

authorized in 2011; 655,652 shares issued and outstanding 

in 2011 $ 6,032,000 $ 

Series B common stock. no par value; 1,200,000 shares .. 

authorized in 2011; 1,200,000 and 1 ,000,000 shares 

issued and outstanding in 2011 and 2010, respectively 2,958,031 2,590,332 

Preferred stock, no par value; 100,000,000 shares 

authorized; no shares issued and outstanding 

Total $ 8,990,031 $ 2,590,332 

In October 2011, the Company's Articles of Incorporation were amended and the 

total number of common shares authorized to be issued increased from 5,000,000 

in 2010 to 100,000,000, of which 98,800,000 are designated to Series A common 

stock and 1,200,000 are designated to Series B common stock. Total number of 

preferred shares authorized to be issued increased from 4,000,000 in 2010 to 

100,000,000 in 2011. 

The stock subscription receivable is due upon demand; for financial reporting 

purposes the receivable is considered as contra equity until collected. The amount 

collected after year end but before June 15, 2012 has been recorded as a common 

stock subscription receivable as of December 31, 2011. 

Note 6 ~ Lease commitments: 

The Company leases space under noncancelable operating leases expiring in 

August 2013. Rent expense for the years ended December 31, 2011 and 201 0 

amounted to $134,335 and $105,857, net of sub~lease income of $23,820 and 

$0, respectively. 

Future minimum lease payments in each of the years subsequent to December 

31, 2011 are as follows: 

Year Ending 

December 31, 

2012 

2013 

Total 

11 

Amount 

$ 107,004 

---41,237 

$ 148,241 
• 

.. 

• 

• 

• II 

II 

• 

• I' 

• I 

I 

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I 

• t-

' 

CARLSBADHPALOMAR AIRLINES, INC . 

DBA CALIFORNIA PACIFIC AIRLINES 

(A Development Stage Company) 

NOTES TO FINANCIAL STATEMENTS 

Note 6 ~ L~ase commitments (concluded): 

In 2012, the Company expects to take delivery of at least one airplane which will 

be leased. The Company anticipates that this will be an operating lease. The 

!ease term is for six years and payments are expected to approximate $175,000 

per month. 

At December 31, 2011, the Company made $200,000 of deposits toward two 

aircraft leases, one of which was subsequently canceled in January 2012. The 

deposits are included in other assets in the accompanying balance sheet. 

12 
• 

Cl-U'<LSHl\L.",- P/U,ot-.·if.\F J\1 RLJNES JNC 

DBA CALIFORNIA P!£JFIC AIRLINE 

5670 I.'.:L C:Af1HNC' F.I:~AL SUITE D 

CARLSBAD CA 92008 

IJ\:'j ,~. :J/.:U.t,.'. 

30 

0 

=~=•=====================~======~===~=======~••==~====•====•======•a====~=•====~ 

CARLSBl~D TELEPHONE:760-444-8400 

-~760 GATEWAY ROAD 

CARLSBAD CA 92009 

E.LITE BUSINE:Ss rvlONE:Y N.ARKWI' ACCOU 

==•••~==========~=======•~===•==~=======m=====~==================~========~~m~== 

AVG l-WAILABLE: BALANCE 

l\VERAGE BALANCE 

922,833.39 LAST STATEMENT 05/31/12 

922,833.39 1 CREDITS 

12 DE:i3ITS 

THIS STATEMENT 06/29/12 

- - - - - - - - OTHER CREDITS - - - - - -

1,166, f32'7. 'j6 

146.22 

l,06l,f-J2B.55 

105,145.23 

• 

DESCRIPTION 

" Il-l'l'ERE:ST 

DNl'l:: 

06/29 

AHOUNT 

146.22 

- - - - - - - - - O~HER DEBITS - - - - - -

DESCRIP'l'ION 

700039133 Online 'I'ransfeJ:' to ---on 6/11/12 at 8: 4H 

(rHRE FEE-201216600156;0U'I'l3D i~E'EE-DOM BR-0'7 

rHR8/0lJT-2012166001b 6; BNF AVPl-\C INSURANCl~ ~)Ef.WICES INC 

TRUST 

700042912 Online Transfer to 4110410165 on 6/21/12 at 16:15 

700042876 Online Transfer to 4110368499 on 6/21/12 at 16:14 

WIRE FEE-201217900076;0UTBD DD-10 WIRE FEE-DOM BR-07 

WIRE FEE-20121790008l;OUTBD DD-10 WIRE FEE-DOM BR-07 

WIRE FEE-201217900082;0UTBD DD-10 WIRE FEE-DOM BR-07 

£tJIRE:/OUT-2012179000tl1;BNF !viCAFEE & TAFT E:SCR0\'\1 ACCOUNT;OBI 

REF: INVOICE #ECC-235 

Dli'I'E.: 

06/11. 

06/14 

06/14 

06/:Zl 

06/21 

06/27 

06/27 

06! 2"l 

06/27 

tH RE/OtJT- 2 01217 90007 6; BNF lvJCAE'EE: E< TAFT E:SC:f{()W ACCOUNT; OBI 0 6/27 

HEE': INVOICE #ECC-236 

WIRE/OUT-201217900082; BNF.' l'1CAFEE & TAfT f,SCROW ACCOUNT ; OBI 06/2"7 

REF: INVOJCEM ECC-24 

SEHVICI:: CHARGE 06/29 

* * * C 0 N T I N U E D * * ~ 

.\(ember Ft.'tfe,.al l.kpm.li /mmwu.c·; (.(nptti"!!Umt 

AlvJOUNT 

60,000.00 

30.00 

170,000.00 

~)() 1 CJOO • ()() 

70,000.00 

30.00 

30.00 

30.00 

12,500.00 

124,193.5~.) 

57~), 000.00 

L'l. 00 
• 

• 

• 

DBA CALif'ORNii\ Pl-\CI P.IC J.UHLIHE 

OPERATING ACCPW~T 

5670 EL Cru1INO REAL SCITE D 

CARLSBAD CA 92008 

ACCOUNT: 

DC1CUJ'-1EN'rS; 

1 

3. 

06/29/2012 

30 

0 

===~===~=====~a===•=•=~•======a===============~==========~====~=~~========•====• 

CARLSBAD 

27 60 GATE:IiJAY ROAD 

CARLSBAD CA 92009 

TELEPHONE:760-444-B400 

==========••==~•=========~••=•==m====================================~•=====~=== 

PINES BUSINESS CHECKING ACCOUNT 

====================-·=========•===·====~--=============================~-====·= 

AVG l~VAILABLE BALANCE; 

AVERAGE~ BALAJ1CE 

94,989.07 

94~ 989.:07 

LAST STNrEMENT 05/31/12 

2 CREDITS 

104 DEBITS 

THIS ST~TEMENT 06/29/12 

170, 606. 3tJ 

50,056.83 

156, 81.5.84. 

"63, 847.33 

- - - - - - - - OTHER CREDITS - - -

DESCRIPTION 

Return DELTA AIR 0062145517882 DENVER CO 4178 

700042912 Online Transfer from on 6/21/12 at 

16:15 

- - - - CHECKS - - - - - CHECI'\ 4f • • DATE ••..•• AMOUNT CHJ:;C£'\ # .. DATE ...... AMOUNT 

1358*06/04 160.14 1442 06/06 1,431.18 

1421*06/07 8,000.00 1443 06/06 542.40 

142'7 7.-0G/01 ·:]t>,~).()() 1444 06/06 1,43~'1."71 

1429 06/04 3,013.59 1445 06/06 1,800.00 

14.30 06/04 3,742.87 144 6 06/06 4,652.00 

1431 06/04 1.75.89 1447 06/06 534.90 

1432 06/04 261.01 1448 06/06 568. 70 

1433~'06/01 H3.11 1449 06/04 11.,098.34 

1435 06/04 ~:,ooo.oo 1450 06/05 633.23 

1436 06/04 2,313.45 l45<l 06/04 1,000.00 

1437 06/05 2,575.00 1452 06/13 900.00 

1438 06/05 56.52 1453 06/11 25.98 

1439 06/05 5,315.47 1454 06/04 1,000.00 

1440 06/05 b 94 . 41 1455 06/13 245.07 

1441 06/06 25,000.00 1456 06/05 1,303.25 

* +~ +. c 0 N T I N u E: D ~' * ~' 

DATE 

OE/18 

OE/2:L 

A1.'10tJNT 

56.83 

50,000.00 

CHECI.< # .. DATE •....• Al'-10UNT 

1457 06/06 1,208.18 

1458 06/11 78.04 

14~:::~.?. 06/12 20. oc~ 

1460 7•06/18 5, 855.60 

1462 06/14 166.60 

14 63 06/21 200.00 

14 64 06/11 350.00 

14 65 06/14 5,000.00 

1466 7•06/13 3,000.00 

1468 06/12 42.5q 

1469 06/13 918.50 

1470 06/12 999.48 

1471 06/14 17.22 

147:C~*06/25 10.12 

1475*.06/18 4,000.00 
• 

• 

• 

I\c:c: ()iJt-rr : 

D.~<-·:r.__:r~,JEt··1T S: 

====================•••====•======~============~====~======m~~==~=============~= 

Pl~i,IE;S PUSINESS CEECI{It-.!G ~D,.CC:c~UI~-IT 

=========•E•••••~m~=•==============================z======z======~=~=•==~•=====~ 

- - - - - - - - - - CHECKS - - - - - - - - - -

CHECI'\ # .. Di\'l'E: . ..... f\t~~lC)iJNT 

J..:]'"?"j 06/29 

Jll78 ()f_:/29 

14'79 06/2~j 

1480 06/18 

1481 06/22 

1482~'06/18 

1484 06/20 

14 85 06/18 

1486 06/20 

1487 06/20 

27.0C 

27. oc 

8,000.0() 

145.13 

1,920.00 

882.01 

89.70 

3,250.00 

950.00 

950.00 

CHEC:K ~i· .. DA:rE . .... . l\Jv!()Ul\fT 

1483 06/20 1,525.12 

1489 06/25 2,300.00 

1490 06/25 8,240.00 

1491 06/28 140.60 

1492 06/28 207.99 

1493 06/22 2,614.05 

1494 06/27 112.83 

1495*06/22 3,050.00 

1497 06/26 2,500.00 

1498 06/26 745.46 

(*) INDICATES A GAP IN CHECK NUMBER SEQUENCE 

- - - - - - - OTHER DEBITS 

DESCRIPTION 

Purchas'~ DELTA AIH 0062145328962 SAN DIEGO CA 4J7fl 

Purchase D J*WALL ST. JOURNAL 800-568-7625 MA 2057 

1499 06/2~1 

1500~'06/28 

1502 06/29 

1 :~03 ., 06/29 

1506 7'06/29 

1508 06/2B 

1509 06/28 

151.0 06/28 

1511 "'06/2f.l 

1513 06(;?.6 

1ERCHAl'-l1' P.AYr-1ENT StapJes, Inc Palomar Airport Blvd CARLSBADDATE 

06/0:t 

06/04 

06/05 

CA 4160 

Purchase SHERATON SD 1'1AlUNI-\ VALET SAN DIEGO CA 4178 

Purchase SOUTHWESTAIR5262445324721 DAI .. LAS TX 4178 

Purchase TWENTY/20 GRILL & WINE CARLSBAD CA 4178 

Purchase THE L.l\NDINGS .T.I.T CARLSB CAP.LSBAD CJ\ 4100 

Purchase Sl-10 ATLANTIC .~!ANTI'. l'10NICA 310-3966770 CA 4178 

MERCHANT PAYJ:.1ENT COSTCO i<nlSE; #0 951 PALOMAR AI RPOR CARI,SBAD 

CA 4160 

Purchase SQ * SCO'rT SHANI{LAND Albuquerque Nl'1 417 8 

Purchase PICKLES CAFE & DELI Cll.RLSBAD C?. 4160 

Purchase HOTEL l~LBUQUEHQUE: OLD 'f\"'N l-\LBUQUERQUE; Nl'1 4 17 8 

Purchase DCLTA AIR 0062145854310 ALROQUCRQUE NM 4118 

Purchase DUN Al\lD BRADSTREET CREDIB 800-3330505 CJ;, 4160 

IRS USATAXPYMT 270256642678366 

Purchase DEL'rA AIR 0062145864202 Jl,LBUQUERQlJI•: NM 4178 

Purchase FRONTIER AI 4222172211733 E'AREE'Al,HLIE::-1 0!<: 4178 

Purchase PAYPAL *PAPERLESSCO 402-935-7733 CA 4178 

MERCHANT PAYMENT Staples, Inc. Palomar Airport Blvd 

CARI,SBAD CA 4160 

Purchase DELTA AIR 0062145517882 DENVER CO 4178 

Purchase DELTA AIR 0062145537708 DENVER CO 4178 

Purchase FRONTII~R iU 4222172245667 f:'AREE'AMILH:s OK 4178 

Purchase WESTERN FLIGHT INC, TRUE CARLSBAD CA 4178 

Purchase SAN DIEGO BUSINESS JOURNA 858-2776359 CA 4160 

Purchase SOUTHWESTAIR5262450051451 DALLAS TX 4178 

* * * C 0 N T I N U E D * * * 

06/06 

06/07 

06/0B 

06/1] 

06/11 

06/12 

06/13 

06/1.3 

06/L~ 

06/14 

06/14 

06/14 

06/1.4 

06/18 

06/1.8 

06/.1.8 

06/18 

06/Hl 

06/18 

06/21 

06/26 

2,44?.#!:) 

3,065.01 

520.~:.9 

134-25 

375.66 

2 1 l-/4 • 2::} 

4'72. 50 

?,730.()0 

:n:). oo 

l\.l'·iOUNT 

113. 65 

17.29 

~) 9. '7f3 

150. 00 

299.80 

"60.26 

31.40 

233. "10 

97.09 

28.00 

30.40 

263 . .2:) 

69.00 

100.00 

113. 65 

2T7. 80 

10.00 

54. 93 

56.83 

56.83 

22~. 80 

259. 38 

69. 00 

225. 00 
• 

• 

• 

,,--~---·· 

::: ·:. .. ; ', . : . . .. .! . 

. ............. _ .. ___ .................. ~ ... ~ ........................... -·-h··· .. ··-··----~- .. ··-----.. ---..-···---··-··--~-~----~~-~-~--·-------· .. ··~------····- .. -··------.. -~---------··-- ..... ._. .... ___ _ 

CARLSBAD CA 020~8 

ClU\I.SB'lW 

2760 G.Z\TE:I;vAY RO/W 

CARLSBAD CA 92009 

PINES BUSINESS CHECKING ACCOUNT 

============================~~=~=====~~=~~:=~=~==~=~~==============~==~==~====== 

1\VG Atll-\Il.:liBLE BJ.\I.d~iNCI~ 

~, VE:l~AGE: BALANCE ~:>0,91:;.].2 

50,919.12 

LAST.STATEMENT 05/31/12 

? CREDITS 

7 DEBITS 

THIS STATEMENT 06/29/12 

OTHER CREDITS - - - DESCRIP'.T'ION 

700039133 Online Transfer from on 

e : ~1e 

-7()0042B"7'~ __ ~ 0 n .. l. lne ']' .rans-er f' j" :rom - on 

16: 14 

6/11/12 at. 

6/21!12 at 

- - - - - - - - - OTH8R DSBITS - - - - - - DESCRIP'I'ION 

ADP TX/fiNCL SVC ADP - TAX 195036J58773RGi 

ADP TX/FINCL SVC ADP - TAX A0RG7 060523V01 

ADP PAYF.OL:f.; FE;E;S l.i,.DP - n;r~S 53RG7 2Het::12 

ADP TX/FINCL SVC ADP - TAX A0RG7 062025A01 

ADP TX/FINCL SVC ADP - TAX 696042338055RG7 

ADP TX/FINCL SVC ADP - TAX AORG7 062025V01 

* * * C 0 N T I N U E D ~ * * 

D.'-\TE 

06/.1.1 

06/21 

DATE 

c 6 ,..· (] .~1 

06_/ ::)4 

06/07 

06/11 

06/19 

06!19 

'06/?2 

~18,3"!2.99 

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77,!:117.86 

AHOUNT 

60,000.00 

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Ai:'IOUNT 

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35,;:.~13 . .25 

240.00 

1, 22"i. 03 

17,8:.):5.05 

40,974.43 

240.00 
• 

• 

• 

J'nnt 

PINES BUSINESS CHECKING 

4110440165 

Printed by: CHERISH BEACH 

TORREY PINES BANK 

Page I of2 

7/23/2012 1:40:13 PM 

Reporting Institution: 4 

Demand Deposit--- CARLSBAD-PALOMAR AIRLINES INC 

Rei Birthdate Phone Tax 

Identification 

[01] CARLSBAD-PALOMAR AIRLINES INC 

[02] DBA CALIFORNIA PACIFIC AIRLINE 

OPERATING ACCOUNT 

,~ · 5670 EL CAMINO REAL SUITE D 

CARLSBAD CA 92008 

Additional Relationships 

Tax Name: [lJ CARLSBAD-PALOMAR AIRLINES INC 

Summary 

Memo Ledger Balance: $32.4,916.66 

Memo Available Balance: $324,916.66 

Current ledger Balance: $26,133.14 

Current Available Balance: $26,133.14 

Previous Ledger Balance: $29,052.07 

Previous Available Balance: $29,052.07 

Overdraft Limit: $0.00 

ATM/POS Overdraft Balance: $0.00 

Memo Balances 

Current Ledger Balance: $26,133.14 

Plus Presentments: $298,783.52 

Memo Ledger Balance: $324,916.66 

Projected Float 

* 

Projected Date Available Float 

Projected Balances do not include Presentments 

Jul 23, 2012 Monday 

Jul 24, 2012 Tuesday 

Jul 25, 2012 Wednesday 

Jul 26, 2012 Thursday 

Service Charge 

Date Last Service Charge: Jun 29, 2012 

Average Ledger Balance; $50,677.31 

Average Available Balance: $50,677.31 

Days Into This Period: 23 

Date Minimum Balance: Jul 20, 2012 

Minimum Balance: $26,133.14 

Amount of Cash In: $0.00 

Amount of Cash Out: $0.00 

Number of CHECKS: 62 

Number of DEBITS: 98 

Number of CREDITS: 1 

Number of REG D TRAN: 98 

********** 

Last Deposit Jul 18, 2012: 

Last Check Jul 20, 2012: 

Date Opened: 

Current Available Balance: 

Plus Presentments: 

Memo Available Balance: 

Expiring Holds 

Service Charge Cycle: 

Maintenance Method: 

Activity Method: 

Credit Back Method: 

DDA Credit Back 

Identification: 

Waiver Service Charge Code: 

Waiver Sales Tax: 

*********:t: 

$1,050.00 

$55.82 

Sep 14, 2011 

$26,133.14 

$298,783.52 

$324,916.6.6 

Projected Balance 

$26,133.14 ... _,., 

$26,133.i4 

$26,133.14 

$26,133.14 

[30] Month-End 

1 

1 

1 

0 

[0] 

Waive Sales Tax 

http:/1192.168.30.34/DDA_DDA Il5liDDAll51.ASPX?ActimF-"QUJCKPRINT&XMLGu ... 7/23/2012 
• California 

Stock • Ownership fie Airlines 

Date Certificates Issued 

Cost per 

Name of Stock Holder Address Became Cash Received 

Owner Share 

Cert. No. No. Shares 

Ted Vallas 246 Sth St. Encinitas, CA 92024 

Ted Vallas 3/15/2011 s 3,500,000 B-1 1,000,000 s 3.50 

246 5th St. Encinitas, CA 92024 

Goldberg Family Trust utd 7/6/2011 $ 700,000 8·2 200,000 $ 3.50 

PO Sox 300 Rancho Sante Fe, CA 92007 

Goldberg Irrevocable Trust #2 10/28/2011 $ 766,664 A-1 83,333 s 9.20 

PO Box 300 Rancho Sante Fe, CA 92068 

Pennant-Jones Family Trust 10/28/2011 $ 153,336 A-2 16,667 $ 9.20 

2040 lincoln St. Oceanside, CA 92054 

Bill Scripps 10/28/2011 $ 92,000 A-3 10,000 $ 9.20 

PO Box 2322 Rancho Sante Fe, CA 92067 

Suntz Family Trust 10/28/2011 s 125,000 A-4 13,587 s 9.20 

1349 Cassins St Carlsbad, CA 92011 

Thomas Morrow 10/28/2011 $ 50,000 A-S 5,434 $ 9.20 

276 N. El Camino Real #250 Oceanside, CA 92058 

Theodore L. Vallas for Golf 11/28/2011 s 5,000 A·6 543 $ 9.20 

Course Hotels Inc. 246 5th St. Encinitas, CA 92024 

Thomas Morrow 12/20/2011 s 1,000,000 A·7 108,696 $ 9.20 

276 N. El Camino Real #250 Oceanside, CA 92058 

Todd Family Trust 2/12/2012 $ 4,000 A-8 435 $ 9.20 

5142 Via Madrid, Oceanside, CA 92057 

King Family Investments, 4/4/2012 $ 50,000 A-9 5,434 $ 9.20 

lLC 1520 Rancho Encinitas Dr. Encinitas, CA 92024 

Lloyd H. Prosser 4/26/2012 s 100,000 A·10 10,870 $ 9.20 

1618 Kurt:a St Oceanside, CA 92054 

Golf Course Hotels by Theodore 4/17/2012 s 12,000 A-11 1,304 $ 9.;20 

L. Vallas 246 5th St. Encinitas, CA 92024 

Total 

5/15/2012 $ 1,000,000 A-12 108,696 $ 9.20 

$ 7,558,000 1,564,998 $ 4.83 

Subscribed not 2aid Date 

Goldberg Family Trust utd PO Sox 300 Rancho Sante Fe, CA 92067 10/28/2011 $ 1,533,333 Goldberg 166,667 s 9.20 Irrevocable Trust #2 PO Box 300 Rancho Sante Fe, CA 92068 10/28/2011 s 306,667 33,333 s 9.20 Total $ 1,840,000 200,000 s 9.20 

s 9,398,000 

7/23/2012 
• 

• 

STATEMENTS AND SUPPLEMENT TO FINANCIAL INFORMATION 

1. CP Airlines' financial plans have been prepared by Jim Buntz, Vice President of Finance 

and Business Development. Jim has been employed with CP Airlines since July 2009 and 

reports to the President and CEO, Ted Vallas. Mr. Buntz' resume is included in the 

Management section. 

2. There are no liens or encumbrances against CP Airlines or its assets and no collateral has 

been pledged for outstanding obligations. 

3. CP Airlines has not entered into any major commitments over the last 6 months. 

However, CP Airlines has or intends to enter into the following major commitments: 

a. Purchase or lease of 2 aircraft in the next 6 months and is in discussions with a 

leasing company. 

b. Purchase of Dispatch Flight Operations Workstations and Equipment 

c. Aircraft fueling contract; in discussions with MercFuels 

d. Flight Control and Administrative office space at Palomar Airport, Carlsbad 

e. Flight Planning, Crew Scheduling and Airline Reservation System; contract 

entered into with NavTech and proposal received from lntelisys; 

4. CP Airlines has not sold or exchanged any major assets (aircraft, land, buildings, etc.) in 

the last 6 months, nor does it have plans to do so. 

5. CP Airlines has no liabilities that are more than 60 days past due. 

6. CP Airlines has no contingent liabilities that affect the corporation's financial posture. 

7. No events have occurred since the preparation of the most recent financial statements 

that may have a significant impact on the financial position or the operations of the 

company. 

8. CP Airlines service proposal, forecast balance sheets, and profit and loss statements for 

the first 12 months of operations is included with the application, as well as pertinent 

notes supporting the information. 

9. The revenue forecast includes each proposed market, number of daily flights, aircraft 

type, model, seating capacity, fares to be charged, gross revenue, revenue block hours, 

revenue miles, and seasonal traffic peaks. 

10. There are no pending enforcement actions, formal complaints, criminal or civil charges, 

or aviation-related accidents or incidents agafnst the company or its key personnel. 
• 

• 

• 

Jim Buntz 

From: 

Sent: 

To: 

Subject: 

Colleen Sweeney [CSweeney@torreypinesbank.com] 

Monday, July 23, 2012 10:36 AM 

Jim Buntz 

FW: Approval 

Jim I don't think you received this e~mail. I think I misunderstood your e-mail address. Please respond that you received 

this e~mail. 

Thanks. 

Colleen Sweeney I Commercial Loan Administrative Officer 1 MLO: 902848 

2760 Gateway Road, Carlsbad, CA 92009 

· V760-444-8444l ~~Zhso-444-ssoo 1 f•··'760-444-84oo 

~sweenev@torreypjnesbank.com I TORREYPINESBANK.COM 

From: Colleen Sweeney 

Sent: Monday, July 23, 2012 9:26AM 

To: 'jbuntz@flyctalr.com' 

Cc: Don Schempp 

SUbject: Approval 

Mr. Buntz, 

Carlsbad-Palomar Airlines, Inc., dba California Pacific Airlines has been approved for a $1,000,000 Revolving Line of 

Credit . 

Should you need additional Information please let me know. 

Thank you. 

Colleen Sweeney I Commercial Loan Administrative Officer I MLO: 902848 

2760 Gateway Road, Carlsbad, CA 92009 

a 760-444~84441 ,k 760~444-ssoo 1 : .... 7so-444-a4oo 

csweeney@torreypinesbank.com I TORREYPINESBANK.COM 

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