UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED March 31, 2003
BALTIA AIR LINES, INC. (Baltia)
(Exact name of registrant as specified in its charter)
STATE of NEW YORK 11-2989648
(State of Incorporation) (IRS Employer Identification No.)
63-25 SAUNDERS STREET, SUITE 7 I, REGO PARK, NY 11374
(Address of principal executive offices)
Registrant's telephone number, including area code: (718) 275 5205
Check whether the issuer (1) filed all reports required to be filed by
Section 13, or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the
past 90 days. No [] Yes [x]
Class Number of Shares
Common Stock - Par Value $.0001 Per Share 48,679,757
Preferred Stock - Par Value $.01 Per Share 275,250
Transitional Small Business Disclosure Format (Check one): No [X]
PART ONE - FINANCIAL INFORMATION
Item 1. Financial Statement.
WANT & ENDER
C.P.A. P.C.
Certified Public Accountants
MARTIN ENDER CPA
STANLEY Z. WANT CPA CFP
May 15, 2003
To Whom it May Concern:
Want & Ender, CPA, P.C. grants Baltia Airlines permission to use any of the
information contained in the following signed letter. Please contact Martin
Ender with any questions or problems.
Regards,
Want & Ender, CPS, P.C.
386 PARK AVENUE SOUTH - SUITE 1618 NEW YORK, NY 10016
TEL 212.684.2414 - FAX 212 684-5433 - EMAIL: MGR@WANTENDERCPA.COM
WANT & ENDER
C.P.A. P.C.
Certified Public Accountants
MARTIN ENDER CPA
STANLEY Z. WANT CPA CFP
Baltia Airlines, Inc.
To the Board of Directors and Stockholders:
We have reviewed the accompanying balance sheets of Baltia Airlines,
Inc. as of March 31, 2003 and the related income statement for the
period then ended in accordance with standards established by the
American Institute of Certified Public Accountants. All information
in these financial statements is the representation of the
management of Baltia Airlines Inc.
A review consists principally of inquiries of company personnel and
analytical procedures applied to financial data. It is substantially
less in scope than an audit in accordance with generally accepted
opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the accompanying financial statement
in order for them to be in conformity with generally accepted
accounting principles.
Respectfully submitted,
Want & Ender P.C. (signed)
Want & Ender CPA, P.C.
Certified Public Accountants
New York, NY
May 15, 2003
386 PARK AVENUE SOUTH - SUITE 1618 NEW YORK, NY 10016
TEL 212.684.2414 - FAX 212 684-5433 - EMAIL: WECPAPC@SPRYNET.COM
BALTIA AIR LINES, INC.
BALANCE SHEETS
As At March 31, 2003
ASSETS
Current Assets
Cash $3,145
Total Current Assets 3,145
Fixed Assets
Property, Plant and Equipment
Property, Plant and Equipment 60,191
Less Accumulated Depreciation 31,373
Net Property, Plant and Equipment 28,818
TOTAL ASSETS $ 31,963
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities
Accounts Payable $ 700
Total Current Liabilities 700
Stockholders Equity
Common Stock 4,868
Preferred Stock 2,753
Paid-in-Capital 8,155,210
Retained Earnings (8,131,467)
Treasury Stock (100)
Total Stockholders Equity 31,263
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 31,963
BALTIA AIR LINES INC.
STATEMENTS OF CHANGES OF SHAREHOLDERS EQUITY
THREE MONTHS ENDED March 31, 2003
Preferred Stock Common Stock Additional
Shares Par Value Shares Par Value Paid
In Capital
Balance - Dec 31, 2001 275,250 $2,753 48,679,757 $4,868 $8,138,593
2002 Issue-Preferred Stock 0 0 - -
2002 Issue-Common Stock 0 0 - - 12,877
2003 Issue-Preferred Stock 0 0 - -
2003 Issue-Common Stock 0 0 - - 3,740
Balance - March 31, 2003 275,250 $2,753 48,679,757 $4,868 $8,155,210
STATEMENT OF OPPERATIONS
Three Months Ended August 24, 1989
March 31, (Inception) to
2003 2002 March 31, 2003
(Unaudited) (Unaudited)
Revenues 0 0 0
Expenses $3,202 $3,202 $ 264,238
Interest Expense 0 0 1,066,659
General and
Administrative 3,011 6,066 2,412,094
Professional fees 0 0 2,012,152
Service contributions 0 0 1,352,516
Training Expense 0 0 225,637
FAA Certification 0 0 206,633
Media Costs 0 52,812 310,271
Abandoned fixed assets 0 0 205,162
Total expenses 6,213 62,080 8,055,362
Net loss $ (6,213) $(62,080) $ (8,055,362)
STATEMENT OF CASH FLOWS
Cash flows from Operations Three Months Ended Aug 24, 1989
March 31, (inception) to
2002 2001 March 31, 2003
(Unaudited) (Unaudited)
Net Income $(6,213) $(62,080) $(8,055,362)
Adjustments to reconcile net
loss to net cash provided by
operations:
Depreciation 3,202 3,202 264,238
Change in Property, Plant and
Equipment 0 0 (309,066)
Interest paid by stock 0 0 63,500
Change in Premedia costs 0 52,812 347,489
Change in Accounts Payable 0 (2,379) 1,802,573
Change in Officers Loan 0 0 (368,890)
Service Contributions 0 0 1,352,516
Total Adjustments 3,202 53,635 3,152,360
Net Cash Provided by Operations (3,011) (8,445) (4,903,002)
Cash flows from Financing Activities:
Shareholder Loans 0 0 1,351,573
Paid In Capital 3,740 7,440 2,918,733
Issuance of Common Stock 0 0 1,133,705
Issuance of Preferred Stock 0 0 2,753
Issuance of Treasury Stock 0 0 (500,100)
Net Increase(Decrease) in Cash 729 (1,005) 3,662
Equivalents
Cash and Cash Equivalents - 2,416 3,204 0
Beginning
CASH AND CASH EQUIVALENTS - $ 3,145 $ 2,198 $ 3,662
ENDING
NOTES TO FINANCIAL STATEMENTS
I. ORGANIZATION, NATURE OF OPERATIONS, GOING CONCERN
CONSIDERATIONS
(A) Organization
The Company was incorporated under the laws of the state of
New York on August 24, 1989.
(B) Nature of Operations
The Company was formed to provide commercial, passenger,
cargo and mail air transportation between New York and Russia.
Since inception, the Company's primary activities have been
raising of capital, obtaining financing and obtaining Route Authority
and approval from the U.S. Department of Transportation. The Company
has not yet commenced revenue producing activities. Accordingly, the
Company is deemed to be a Development Stage Company.
2. ACCOUNTING POLICIES
(A) Cash and Cash Equivalents
The Company considers cash and cash equivalents to be all
short term investments which have an initial maturity of three months
or less.
(B) Property and Equipment
The cost of property and equipment is depreciated over the
estimated useful lives of the related assets. Leasehold improvements
are depreciated over the lesser of the term of the related lease or
the estimated lives of the assets. Depreciation is computed on the
straight-line method for financial reporting purposes and tax
purposes.
(E) Income Taxes
Deferred income tax assets and liabilities are computed
based on temporary differences between the financial statement
and the income tax bases of assets and liabilities using the
enacted marginal income tax rate in effect for the year in which
the differences are expected to reverse. Deferred income tax
expenses or credits are based on the changes in the deferred
income tax assets or liabilities from period to period.
3. PROPERTY and EQUIPMENT
Property and equipment at March 31, 2003 (Unaudited)
consisted of the following;
Office Equipment $53,406
Furniture & Fixtures 6,782
Total 60,191
Less, Accumulated Depreciation (28,171)
Total Property and Equipment $32,020
The useful lives of property and equipment for purposes of
computing depreciation are;
Office equipment 5-7 years
Automobiles 5 years
5. RELATED PARTY TRANSACTIONS
The Company's legal counsel, Steffanie Lewis, of the
International Business Law Firm, P.C. owns 5,626,250 restricted shares
of common stock at March 31, 2003 or approximately 11.56% of the
Company's issued and outstanding common stock. Ms. Lewis was issued
875,000 restricted common shares in June 1997 in exchange for $1,624,432
due her for legal work performed in connection with various
certifications, authorities and financial matters. She was previously
issued 233,331 of restricted common shares in exchange for the first
six months preparation of the 1990 application to the Department of
Transportation for Air Line Fitness Certification.
On June 23, 1997 Igor Dmitrowsky, President of the Company
and a shareholder, relinquished the amount due to him totaling
$22,142. Accordingly, the Company has recorded Contributed Capital in
the amount of $22,142.
On March 30, 1998, Various shareholders including Igor
Dmitrowsky, President of the Company relinquished the amounts due them
totaling $160,983. Accordingly, the Company recorded Contributed
Capital in the amount of $160,983.
On September 1998, Igor Dmitrowsky, President of the Company
and a shareholder, relinquished the amount due to him totaling
$45,711. Accordingly, the Company has recorded Contributed Capital in
the amount of $45,711.
On September 1998, Leonard Becker, a shareholder,
relinquished the amount due to him totaling $57,000. Accordingly, the
Company has recorded Contributed Capital in the amount of $57,000.
6. INCOME TAXES
At December 31, 2002 the Company has a net operating loss
carry forward of $7,077,292 which is available to offset future
taxable income. The Company is still liable for certain minimum state
and city taxes.
As of December 31, 2002, a net deferred tax benefit has not
been reflected to record temporary differences between the amount of
assets and liabilities recorded for financial reporting and income tax
purposes due to the establishment of a 100% valuation allowance
relating to the uncertainty of recoverability.
7. STOCKHOLDERS' DEFICIT
(A) Stock Options
In 1999, the Company granted options to purchase 11,550,000
restricted shares of common stock, at $.0001 per share, to certain
private investors including the following officers of the Company:
5,600,000 shares to Igor Dmitrowsky, President of the Company;
2,100,000 shares to Steffanie Lewis, the Company's legal counsel;
1,400,000 shares to Walter Kaplinsky, the Company's Secretary.
As of March 31, 2003, no options have been exercised.
In 2000, the Company granted options to purchase 11,760,000
restricted shares of common stock, at $.0001 per share to certain
investors, including the following officers of the Company: 6,860,000
shares to Igor Dmitrowsky, President of the Company; 1,750,000 shares
to Steffanie Lewis, the Company's legal counsel; 1,400,000 shares to
Walter Kaplinsky, the Company's Secretary. As of March 31, 2003, no
options have been exercised.
In 2001, the Company granted options to purchase 13,860,000
restricted shares of common stock, at $.0001 per share to certain
investors, including the following officers of the Company: 8,400,000
to Igor Dmitrowsky, President of the Company; 2,100,000 to Steffanie
Lewis, the Company's legal counsel; 1,400,000 to Walter Kaplinsky, the
Company's Secretary; 140,000 shares to Andre Rukmanis, the Company's
Vice President. As of March 31, 2003, no options have been exercised.
(A) Retirement or Stock
On November 4, 1992, the Company issued 10,416 restricted
shares of stock for $500,000 to a private investor. On November 24,
1992, these shares were repurchased for the same amount from the
investor and subsequently retired.
(B) Acquisition of Common Treasury Stock
On September 28, 1998 the Company purchased from Igor
Dmitrowsky, president of the Company, 5,833,333 common shares for $100
and has granted him an option to repurchase 7,000,000 common shares
from the Company at $100 upon the completion or the Company's
inaugural flight or upon the exercise of any warrants, whichever
occurs first.
(C) Reverse Stock Split and Stock Split
On August 24, 1995, the Board of Directors authorized and
the majority of the current shareholders ratified a ten for one
reverse stock split of the Company's $.0001 par value common stock.
On December 31, 1997, the Board of Directors authorized and
the majority of the current shareholders ratified a two for one
reverse stock split of the Company's $.000l par value common stock.
On September 29, 1998, the Board of Directors authorized and
the majority of the current shareholders ratified a one and two
tenths (1.2) for one reverse stock split of the Company's $.0001 par
value common stock.
On November 30, 2001 the Board of Directors authorized and
the majority of the current shareholders ratified a seven for one
stock split of the Company's $0.0001 par value common stock.
All references in the accompanying financial statements to
the number of common shares, warrants and per share amounts have been
restated to reflect the stock splits.
(D) Preferred Shares
On November 8, 2002, the Company amended its Articles of
Incorporation thereby, increasing the authorized aggregate number of
preferred stock shares from 500,000 preferred stock shares at $0.1
value to 2,000,000 preferred stock shares at $.01 par value.
(E) Contributed Capital
The Company has recorded service contributions from certain
key officers who have worked for and on behalf of the Company. The
service contribution amounts have been calculated based on an a
normal rate of compensation, on either a full or part time basis, as
based on the number of hours worked by each individual.
The Company maintains no obligation, present or future, to
pay or repay for any and all service contributions received.
Accordingly, the Company has not recorded a liability for, accrued
for, and/or accounted for any monetary reserves in connection with the
service contributions.
On June 23, 1997, certain of the Company's management
relinquished the amount due them for back-pay totaling $270,928
Accordingly, the Company has recorded Contributed Capital in the
amount of $270,928.
Item 2. Management's Discussion and Plan of Operation.
The Company has been working with consultants to refine tools and
procedures for implementing its revenue operations plan for use when
management, with the advice of consultants, determines the appropriate
time. Administrative activities have been conducted to further that
end.
The Company expects to maintain over the next twelve months. In
the absence of outside investors, management is foregoing compensation
and expects to contribute administrative costs necessarily incurred.
The Company plans no product research and development at this
time or any purchase or sale of equipment. There is no significant
change in the personnel disclosed in Registration Statement 333-37409.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. Intentionally omitted.
Item 2. Changes in Securities. Intentionally omitted.
Item 3. Default Upon Senior Securities. Intentionally omitted.
Item 4. Submission of Matters to a Vote of Security Holders.
Intentionally omitted.
Item 5. Intentionally omitted.
Item 6. Intentionally omitted.
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BALTIA AIR LINES, INC., Registrant
Date: 05-19-2003 ____ IGOR DMITROWSKY (signed) _____
By: Igor Dmitrowsky, President
Date: 05-19-2003 ____ WALTER KAPLINKSY (signed)_____
By: Walter Kaplinsky, Secretary
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