"Working To Close Songbird/Airways Acquisition On_Or_Before September 15"
WE ARE WORKING TO CLOSE THIS ACQUISITION ON OR BEFORE SEPTEMBER 15, 2017
FOR IMMEDIATE RELEASE
USGlobal Airways Provides Second Quarter 2017 Update in a Letter from its Chairman & President
NEW YORK, NY – July 24, 2017 – Baltia Air Lines, Inc., doing business as USGlobal Airways, today announced that Anthony D. Koulouris, Chairman of the Board and President, issued a letter to company shareholders providing an update on recent corporate developments. The full text of the shareholder letter is provided below.
Dear Fellow Shareholder:
In keeping with my commitment to provide you with quarterly updates on our progress, I am happy to report several accomplishments we have made since last quarter, continuing USGlobal’s transformation and our work to fulfill our goal of being fully operational by the end of 2017. Under our current management team, our priority will be that all material information, good, bad or indifferent, will be disclosed in a timely and legally compliant manner. Towards that end, I hope you find this update informative and helpful.
On May 11, 2017, our board and executive management team members had the privilege of meeting many of you at our special meeting of stockholders and press conference at our new home at Stewart International Airport in Orange County, NY. Many of you voted in person to amend our certificate of incorporation to change our corporate name to “USGlobal Airways, Inc.” and also to effect a reverse stock split of our company’s capital stock. At this time, I am happy to announce that both resolutions were passed with your support. Thank you! We hope to formally change our corporate name and implement the reverse stock split when we obtain regulatory approval to list our common stock on the OTCQB Market, which we hope will occur during the current fiscal quarter.
At the meeting we also announced that we entered into an engagement agreement with GBH CPAs, PC, pursuant to which GBH will serve as our company’s registered independent public accounting firm and will conduct audits for our 2015 and 2016 fiscal years. Getting these audits done and providing the related information to the market is also a major priority for us as this, along with the reverse stock split, when implemented, will set the stage for our becoming a fully reporting, fully trading public company.
In June, our board concluded that the audited financial statements for the fiscal year ended December 31, 2015 should no longer be relied upon. This was following an extensive review by our new management team and its advisors of the company’s corporate and financial reporting processes. Through this process, we became aware of numerous discrepancies, including, for example, an aircraft engine lease agreement the old Baltia had entered into with Logistic Air, Inc. in 2010. We also determined that the company’s previous independent auditors failed to properly account for the payments purportedly due to Logistic Air. As such, and as part of our overall turnaround, we have concluded to restate our financial statements for 2015 and 2016 to correct all accounting and disclosure errors and along with our advisors and new auditors are working as expeditiously as we can to complete this review. Taking the time to do this properly has caused unfortunate and frustrating delays, for many of you and for us, but we want you to know that we are committed to getting this right, putting the past behind us, and moving forward with correct historical financial statements as well as improved accounting and financial systems and controls which will be the bedrock of our operations.
As we have worked to fix the challenges of the past, we have also worked to move towards the future with our business plan of becoming an international passenger airline with cargo, mail and charter capabilities. Obtaining FAA carrier certification is the key to our plans, and on June 15, 2017, we entered into a non-binding letter of intent with AerLine Holdings, LLC for the exclusive right to acquire Songbird Airways, Inc. for an aggregate purchase price of $6,200,000. We made a good-faith deposit of $1,000,000 and we recently signed and submitted a formal, definitive purchase agreement to complete the acquisition. Songbird currently has FAA certification, and in addition, a lease agreement for the existing Boeing 737-400 aircraft previously operated by Songbird is currently being negotiated. We have concluded our due diligence review of Songbird and have already confirmed the current status of Songbird’s FAA and DOT certificates. Members of our executive management have had several meetings as well as continued communications with representatives from Songbird and the FAA.
We are working to close this acquisition on or before September 15, 2017.
This acquisition would be important because it would allow our company to initiate revenue operations immediately by utilizing the same aircraft and air carrier certificate previously operated by Songbird. It also adjusts our business plan to have an initial focus on the Caribbean Islands as well as various domestic and international charter opportunities. Our longer term goal remains a vision to serve unserved and underserved markets between the United States and prospective destinations in the EU and the Middle East, and we plan on phasing in the Boeing 767-300ER aircraft to accommodate this strategy.
In an effort to expand our fleet, in May, we entered into an Aircraft Lease Agreement with Kalitta Air, LLC. to lease a Boeing 767-300ER aircraft which will be equipped for worldwide geographical operations. Although the original plan was to take delivery of the aircraft no later than July 30, 2017, we have made a business decision to delay delivery of this aircraft due to the Songbird acquisition. It is our intent to bring the 767 online sometime in 2018 and commence service to Europe and the Middle-East.
Also in June, we appointed Ambassador Ned L. Siegel as a Director of our company. Ambassador Siegel, has had a long and distinguished career as a senior U.S. government official and over 30 years of business experience. He was appointed by then President George W. Bush as the U.S. Ambassador to the Commonwealth of the Bahamas from October 2007 to January 2009. Ambassador Siegel’s vast experience and his unique set of skills set him apart as a trusted and respected advisor and we are honored to have him on our team.
As you can see, our team has been busy executing on our plan to deliver value to our shareholders. I am excited about USGlobal’s bright future! We look forward to providing you with further updates as our progress continues.
As always, thank you for your continued support.
Respectfully,
Anthony D. Koulouris Chairman of the Board, President & CEO Baltia Air Lines, Inc. d/b/a USGlobal Airways
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