Former Baltia Continues Transformation into USGlobal Airways

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Former Baltia Continues Transformation into USGlobal Airways

Unread post by bimjim » Sun Sep 17, 2017 ... al-airways

Former Baltia Continues Transformation into USGlobal Airways
James Shillinglaw
Jul 26, 2017

Baltia Air Lines, the long planned carrier whose goal is to serve underserved European cities from the U.S., is continuing the process of changing its name to USGlobal Airways, getting an FAA certificate and leasing aircraft. In a letter to shareholders providing a quarterly update on the company, Anthony Koulouris, chairman and president, said USGlobal remains on track to become fully operational by the end of 2017, after nearly 20 years of false starts.

On May 11, USGlobal’s board and executive management team met with stockholders at the airline’s new home at Stewart International Airport in Orange County, N.Y., to vote to amend the company’s certificate of incorporation to change its name from Baltia to USGlobal and also put into effect a reverse stock split of its capital stock. “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,” Koulouris said.

USGlobal also took a major step to obtaining an FAA carrier certification. On June 15, 2017, it entered into a non-binding letter of intent with AerLine Holdings, LLC for the exclusive right to acquire Songbird Airways, Inc. for $6.2 million. Songbird currently has FAA certification and a lease agreement for a 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,” said Koulouris, who added that USGlobal hopes to close this acquisition on or before Sept 15, 2017.

The acquisition of Songbird would allow USGlobal to initiate revenue operations immediately by using the same aircraft and FAA carrier certificate previously operated by that airline. At the same time, according to Koulouris, USGlobal’s business plan will be adjusted so the carrier will have an initial focus on the Caribbean as well as various domestic and international charter opportunities, instead of Europe. “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,” Koulouris said.

To achieve that goal, however, USGlobal will need a long-range aircraft. In May, it entered into an agreement with Kalitta Air to lease a Boeing 767-300ER aircraft. Although the original plan was to take delivery of that aircraft no later than July 30, USGlobal said it decided to delay delivery 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,” said Koulouris.

USGlobal also announced that it had entered into an agreement with GBH CPAs, PC, to serve as its independent public accounting firm and will conduct audits for the airline’s 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,” said Koulouris.

Koulouris said USGlobal’s board concluded that the audited financial statements for the fiscal year ended Dec. 31, 2015 could no longer be relied upon. Following an extensive review by the airline’s management team and advisors of corporate and financial reporting processes, the company discovered numerous discrepancies, including, for example, an aircraft engine lease agreement the old Baltia had entered into with Logistic Air in 2010.

USGlobal also determined that the company’s previous independent auditors failed to properly account for the payments purportedly due to Logistic Air. As such, the company has decided to restate its financial statements for 2015 and 2016 to correct all accounting and disclosure errors. “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,” Koulouris said.

Finally, USGlobal is ramping up its staff and board of directors, adding some higher profile heft to its team. In that vein, the airline said it has appointed Ned Siegel as a member of its board of directors. Siegel has served as a senior U.S. government official and has over 30 years of business experience. He served as U.S. ambassador to the Bahamas from October 2007 to January 2009.

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