### August23,2012

Mr. Damon Walker U.S. Department of Transportation 1200 New Jersey Ave., S.E. Washington, DC 20590

Dear Mr. Walker: 

## PACIFIC
N 

## i I

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 [j: 

# 2 :1•YearlExpensesScheduledFlightsOpeartedFlightsEMB-170BlockHoursBlockHoursPassengerSegmentsFederalExciseTaxExciseTax(7.5%)carlsbadStationExpensesWagesExecutive/Palomar+Crew+GroundAircraftEMB-170Lease(1%Value/month)AircraftExpensesNonCarlsbadStationExpenses•CPAirlineYear1280275282286420456444 4567167367427165,809277 272279283416451440451709729 7357095,7513193133203255075505355508318538618316,7943193133203255075505355508318538618316,794107981179512366125871810322224220302269136684388083903731577278,701$68,017$82,754$86,714$90,884$138,222$172,568$174,940$182,537$289,997$305,778$307,433$254,411$2,154,255$38,273$38,532$38,853$40,002$52,320$54,404$55,123$55,568$73,098$74,198$74,386$71,311$666,069$394,402$394,893$395,174$445,239$503,712$505,740$505,644$505,970$568,614$569,659$569,772$556,1o1$5,924,919$160.000$160.000$160,000$160,000$320,000$320.000$320,000$320,000$480,000$480,000$480.000$480,000$3,840,000$160,000$160,000$160,000$160,000$320,000$320,000$320,000$320,000$480,000$480,000$480,000$480,000$3,840,000Landingfee,gate,officespace($525/flig$72,823$71,516$73,285$74,324$109,148$118,503$115,385$118,503$186,071$191,268$192,827$186,071$1,509,722GroundHandling/GateAgents($250/ftigl$35,371$34,736$35,595$36,100$53,015$57,559$56.044$57,559$90,377$92,902$93,659$90,377$733,293NoncarlsbadStationExpenses$108,194$106,252$108,880$110,425$162,162$176,062$171,428$176,062$276,448$284,170$286,486$276,448$2,243,015Sales$40entertainmentperday$20perdiem$2,500$2,500$2,500$4,000$4,000$4,000$5,000$5,000$5,000$5,000$5,000$5,000$49,500$1.000$1,000$1,000$2.000$2,000$2,000$2,500$2,500$2,500$2,500$2,500$2,500$24,000Salesperdiem(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$7,500.$73,500FuelFuelinggroundexpense(8cents/gallon)$12,236EMS170FuelUsage$379,651$2.62pergallon($90perbarrel)FuelCost$391,88712,023373,056385,079$12,298381,581393,87912,488387,479399,96719,471604,12021,105$654,840$623,590$675,94520,560$21,105$31,895$32,770$33,055637,933$654,840$989,633$1,016,762$1,025,608658,494$675,945$1,021,528$1,049,532$1,058,66331,895989,633$1,021,528260,9028,095,1358,356,037•8/3/2012DOTBudgetYear17.23.12•HumanResourcesDesktopPCsADPPayroiVWebServicesSoftwareUpdatesCaliforniaChamberHRSeminarsonCALaborLawsResourceMaterialsHandbooks/IDBadgesOfficeSuppliesInsurance170InsuranceMonthlyInsuranceMarketing/DistributionAdvertising(TV,Print)PromotionsPromotionalMaterialsWebsiteCostsSoftware/AppDevelopmentCRM/SalessoftwareRevenueManagementSystemComputerSystemsMarketingEffortCrewExpenseTraining-PilotsTraining-FlightAttendentsTraining-LodgingandmealsTraining-TravelUniform-Pilots/FA's-CrewexpenseMaintenance$225perblockhourWarrantyBenefit($225benefit)MaintananceExpenseDistributionExpensesCreditcard(85%ofsales)Debitcardfee(20centspersale)GDS($3.15persegment)NavitalreHostfeeBeverages/Snacks($.2perYpax)GeneralandAdministrativeFuelPriceOUperbarrel8/3/2012••CPAirlineYear1\'z;;'lie%;i:M<Ii'z.z*'';•i><S;,?lc;;;:Mo<.t!.:';k;i'''l$$$$$$$$-$$-$-$$$500$500$500$500$500$500$500$500$500$500$500$500$6,000$500$$$$$$-$$$$$$500$$$$$$$$$$$$$$$$$$$$$$$$$$$100$$$$$$-$$$$$$100$300$300$300$300$300$300$300$300$300$300$300$300$3,600200200200200200200200200200200200!2002,400$1,600$1,000$1,000$1,000$1,000$1,000$1,000$1,000$1,000$1,000$1,000$1,000$12,600$28,000$28,000$28,000$28,000$56,000t56,000$56,000$56,000$84,000$84,000$84,000$84,000$672,000$28,000$28,000$28,000$28,000$56,000$56,000$56,000$56,000$84,000$84,000$84,000$84,000$672,000$30,000$16,551$17,343$18,177$27,644$34,514$34,988$36,507$57,999$61,156$61,487$50,882$447,248$2,000$2,000$2,000$2,000$2,000$2,000$2,000$2,000$2,000$2,000$2,000$2,000$24,000$2,000$2,000$2,000$2,000$2,000$2,000$2,000$2,000$2,000$2,000$2,000$2,000$24,000$3,000$3,000$3,000$3,000$3,000$3,000$3,000$3,000$3,000$3,000$3,000$3,000$36,000$2,000$2,000$2,000$2,000$2,000$2,000$2,000$2,000$2,000$2,000$2,000$2,000$24,000$2,000$2,000$2,000$2,000$2,000$2,000$2,000$2,000$2,000$2,000$2,000$2,000$24,000$2,000$2,000$2,000$2,000$2,000$2,000$2,000$2,000$2,000$2,000$2,000$2,000$24,0002,0002,0002,0002,0002,0002,0002,0002,0002,0002,000i2,000i2,000i24,000$45,000$31,551$32,343$33,177$42,644$49,514$49,988$51,507$72,999$76,156$76,487$65,882$2,142,652$$$$80,000$10,000$$$80,000$$10,000$-$180,00033,600$2,000$2,000$2,000$33,600$2,000$2,000$33,600$2,000$2,000$2,000$2,000$118,8009,000$1,000$1,000$1,000$1,000$1,000$1,000$1,000$1,000$1,000$1,000$1,000$20,000$1,650$1,650$1,650$1,650$1,650$1,650$1,650$1,650$1,650$1,650$1,650$1,650$19,8001,0001,0001,0001,0001,0001,0001,0001,0001,0001,0001,0001,00012,000$45,250$5,650$5,650$5,650$117,250$15,650$5,650$37,250$85,650$5,650$15,650$5,650$350,600$20,695$19,450$21,060$22,173$63,085$72,663$69,471$72,663$135,887$141,010$142,681$135,887$916,726$ - $$$ - $$$$$ -$ -$___-_!__-_____!$20,695$19,450$21,060$22,173$63,085$72,663$69,471$72,663$135,887$141,010$142,681$135,887$916,72615,417$18,758$19,655$20,600$31,330$39,115$39,653$41,375$65,733$69,310$69,685$57,666$488,298140$153$161$164$235$289$286$295$477$505$507$411$3,623$10,204$11,146$11,686$11,895$17,107$21,002$20,818$21,443$34,666$36,674$36,890$29,841$263,372$66,500$66,500$66,500$66,500$66,500$66,500$66,500$66,500$66,500$66,500$66,500$66,500$798,000$92,262$96,557$98,002$99,158$115,173$126,906$127,258$129,613$167,376$172,988$173,583$154,418$1,553,2931,9442,123 2,2262,266$3,2594,0003,9654,0846,6036,9857,0275,68450,166$42,03842,532 42,66942,82444,49645,680$45,756$46,02149,79450,342$50,40348,592551,14790DOTBudgetYear17.23.12

# •

•

• 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

# •

•

• 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

# •

•

• 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 i i:

Page3of4

# •

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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•••OperatingForecas,Day_lofServiceIJul-12IISep-12IOct-12INov-12IDec-12ITotalIOPERATINGREVENUESPassenger$0$0$0$0$0$0$0CargoOther$0$0$0$0$0$0$0Totaloperatingrevenues$0$0$0$0$0$0$0OPERATINGEXPENSESFederalExcisetax7-5%$0$0$0$0$0$0$0Aircraftfuel$0so$0$0$0$0$0Salaries,wagesandbenefits$110,000$135,000$150,000$400,000$400,000$550,000$1,745,000Aircraftrent$175,000$175,000$175,000$175,000$175,000$175,000$1,050,000Maintenance,materialsandrepairs$64,254$64,254$74,254$64,254$64,254$64,254$395,524TrainingCosts$0$0$0$0$0$664,100$664,100Landingfeesandotherrents$0so$0$0$0$0$0DiversionCosts$0$0$0$0$0$0$0Aircraftinsurance$17,500$17,500$17,500$17,500$17,500$17,500$105,000Marketingandadvertising$0$0$0$0$20,000$450,000$470,000Distribution$0$0$0$0$0$90,450$90,450Otheroperating$20,000$20,000$20,000$20,000$20,000$20,000$120,000Totaloperatingexpenses$386,754$411,754$436,754$676,754$696,754$2,031,304$4,640,074OPERATINGINCOME{LOSS)$386,754$411,754$436,754$676,754$696,754$2,031,304$4,640,0747/24/2012DOT""--·.;.-::.:.**,.-.~** 

# •

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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 .. '

Page 1 of2

# -- • • • • II 

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II II II II I 

# ' I I

# ~ 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

# II 

# Ill II 

# II II II

rr 

# , 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

1

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### 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



### 2

# •



# ..

• •
II 

# • 

# • • •**~** 

# II 

# • II 

# II Ill 

# • II

# ~ 

# • 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

# •


# .,. • • • • 

# • • • tr II lj 

# II 

# • Ill 

# • II

# ~ 

# •**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••r••••••...••••••a..f.IssuanceofcommonstockonJuly2,2009(dateofinception)NetlossBaiance,December31,2009-unauditedCapitalcontributionsfortheyearendedDecember31,2010NetlossBalance,December31,2010Issuanceofcommonstoel<NetlossBalance,December31,2011CARLSBAD-PALOMARAIRLINES,INC.DBACALIFORNIAPACIFICAIRLINES(ADevelopmentStageCompany)STATEMENTSOFSTOCKHOLDERS'EQUITYFORTHEPERIODFROMJULY2009(DATEOFINCEPTJON).THROUGHDECEMBER31,2011CommonStockCommonStockSharesSharesSubscriptionClassAAmountClass8AmountReceivable$-1,000.000$622.706$----1,000,000622,706--1,967,626-----.1,000,0002,590.332.655,6526,032,000200,000367,699(2,840,000)-- -.-655,652$6,032,0001,200,000$2,958,03_1__${2,840,000)SeeNotestoFinancialStatements.5DeficitAccumulatedDuringtheDevelopmentStage${572.338}.(572,338)(1,623,010}(2.195.348)-(2,259,302}$(4,454,650)TotalStockholders'Equity$622,706{572.338}50,3681.987.626{1,623,010)394.9843,559,699{2,259,302)$1,695,381I.....J

# •

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.. 

# • • • 

# • • • •**~** 

# II II 

# • • Ill 

# • 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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# r 

# ' 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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# \ ·---·-····---··--····---·······

.. ······· 

# '-----·-----

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

# • 

# • • • • • • • •



# ,

• • • • • 

# • • ' 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

# • • • • • • • fT 

# • 

# • • • •
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

# •

-

• • 

# • • • • 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 

# • I 

# 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:Af 1 HNC'**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 CARLSBAD

### DATE 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

# •

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### 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 l. ']' f' j"

-


### __**~** 

### n

.. lne .rans-er :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** 

## :uo 1 (J()CJ. Q(l 110,**Bb~)** .13

77,!:117.86



### AHOUNT 60,000.00

·'J Q 1 () Q (l

, Q 0

Ai:'IOUNT

] :) I 

### 1 C' 

### 5

0 3 --:**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••CaliforniafieAirlines•StockOwnershipDateCertificatesIssuedCostper%NameofStockHolderAddressBecameCashReceivedOwnerShareOwnershipCert.No.No.SharesTedVallas246SthSt.Encinitas,CA920243/15/2011s3,500,000B-11,000,000s3.5063.90%TedVallas2465thSt.Encinitas,CA920247/6/2011$700,0008·2200,000$3.5012.78%GoldbergFamilyTrustutdPOSox300RanchoSanteFe,CA9200710/28/2011$766,664A-183,333s9.20$.32%GoldbergIrrevocableTrust#2POBox300RanchoSanteFe,CA9206810/28/2011$153,336A-216,667$9.201.06%Pennant-JonesFamilyTrust2040lincolnSt.Oceanside,CA9205410/28/2011$92,000A-310,000$9.200.64%BillScrippsPOBox2322RanchoSanteFe,CA9206710/28/2011s125,000A-413,587s9.200.87%SuntzFamilyTrust1349CassinsStCarlsbad,CA9201110/28/2011$50,000A-S5,434$9.200.3S%ThomasMorrow276N.ElCaminoReal#250Oceanside,CA9205811/28/2011s5,000A·6543$9.200.03%TheodoreL.VallasforGolfCourseHotelsInc.2465thSt.Encinitas,CA9202412/20/2011s1,000,000A·7108,696$9.206.95%ThomasMorrow276N.ElCaminoReal#250Oceanside,CA920582/12/2012$4,000A-8435$9.200.03%ToddFamilyTrust5142ViaMadrid,Oceanside,CA920574/4/2012$50,000A-95,434$9.200.35%KingFamilyInvestments,lLC1520RanchoEncinitasDr.Encinitas,CA920244/26/2012s100,000A·1010,870$9.200.69%LloydH.Prosser1618Kurt:aStOceanside,CA920544/17/2012s12,000A-111,304$9.;200.08%GolfCourseHotelsbyTheodoreL.Vallas2465thSt.Encinitas,CA920245/15/2012$1,000,000A-12108,696$9.206.95%Total$7,558,0001,564,998$4.83100.00%Subscribednot2aidDateGoldbergFamilyTrustutdPOSox300RanchoSanteFe,CA9206710/28/2011$1,533,333166,667s9.20GoldbergIrrevocableTrust#2POBox300RanchoSanteFe,CA9206810/28/2011s306,66733,333s9.20Total$1,840,000200,000s9.20s9,398,000i'-7/23/2012StockOwnership

# •

• 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



### DISCLAIMER: This e-mail and any accompanying documents contain privileged and confidential information intended only for the sole use of the recipient named in this e-mail. If 

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1