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 SEPTEMBER 30, 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 49,101,185
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.
November 18, 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.
Sincerely,
Want & Ender, CPS, P.C. (signed)
Baltia Airlines, Inc.
To the Board of Directors and Stockholders:
We have reviewed the accompanying balance sheets of Baltia Airlines,
Inc. as of September 30, 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)
November 18, 2003
BALTIA AIR LINES, INC.
BALANCE SHEETS
As At SEPTEMBER 30, 2003
ASSETS
Current Assets
Cash $ 2,023
Total Current Assets 2,023
Fixed Assets
Property, Plant and Equipment
Property, Plant and Equipment 60,191
Less Accumulated Depreciation 37,777
Net Property, Plant and Equipment 22,414
TOTAL ASSETS $ 24,437
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities
Accounts Payable $ 700
Total Current Liabilities 700
Stockholders Equity
Common Stock 4,910
Preferred Stock 2,753
Paid-in-Capital 8,206,922
Retained Earnings (8,190,748)
Treasury Stock (100)
Total Stockholders Equity 23,737
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 24,437
BALTIA AIR LINES INC.
STATEMENTS OF CHANGES OF SHAREHOLDERS EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 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 0 421,428 42 55,452
Balance - September 30, 2003 275,250 $2,753 49,101,185 $4,910 $8,206,922
STATEMENT OF OPERATIONS
Nine Months Ended August 24, 1989
September 30, (Inception) to
2003 2002 September 30, 2003
(Unaudited) (Unaudited)
Revenues 0 0 0
Expenses
Depreciation $ 9,606 $ 9,606 $ 270,642
Interest Expense 0 0 1,066,659
General and
Administrative 55,887 8,426 2,464,970
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 65,493 70,844 8,114,642
Net loss $ (65,493) (70,844) $ (8,114,642)
STATEMENT OF CASH FLOWS
Cash flows from Operations Nine Months Ended Aug 24, 1989
September 30, (inception) to
2003 2002 September 30, 2003
(Unaudited) (Unaudited)
Net Income $ (65,493) $ (70,844) $(8,190,748)
Adjustments to reconcile net
loss to net cash provided by
operations:
Depreciation 9,606 9,606 283,449
Change in Property, Plant and
Equipment 0 0 (309,066)
Interest paid by stock 0 0 63,500
Change in Premedia costs 0 52,812 400,301
Change in Accounts Payable 0 (2,379) 1,799,395
Change in Officers Loan 0 0 (368,890)
Service Contributions 0 0 1,352,516
Rounding 1 0 1
Total Adjustments 9,607 60,039 3,221,206
Net Cash Provided by Operations (55,886) (10,805) (4,969,542)
Cash flows from Financing Activities:
Shareholder Loans 0 0 1,351,573
Paid In Capital 55,451 10,022 2,983,321
Issuance of Common Stock 42 1,134,018
Issuance of Preferred Stock 0 0 2,753
Issuance of Treasury Stock 0 0 (500,100)
Net Increase(Decrease) in Cash (393) (783) 2,023
Equivalents
Cash and Cash Equivalents - 2,416 3,204 0
Beginning
CASH AND CASH EQUIVALENTS - $ 2,023 $ 2,421 $ 2,023
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 taxes arise from temporary differences
between the recording of assets and/or liabilities reported for
financial accounting and tax pruposes in different periods.
Deferred taxes are classified as current or non-current,
depending on the classification of the assets and liabilities
to which they relate. Deferred taxes arising from temporary
differences that are not related to an asset or liability are
classified as current or non-current depending on the periods
in which the temporary differences are expected to reverse.
To the extent the total of deferred tax assets are not realized,
a reserve is established.
3. PROPERTY and EQUIPMENT
Property and equipment at September 30, 2003 (Unaudited)
consisted of the following;
Office Equipment $53,406
Furniture & Fixtures 6,782
Total 60,191
Less, Accumulated Depreciation (37,777)
Total Property and Equipment $22,414
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 September 30, 2003 or approximately 11.5% 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 September 30, 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 September 30, 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 September 30, 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 and CERTIFICATIONS
I, Igor Dmitrowsky, the Registrant's Chief Executive Officer, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Baltia Air Lines,
Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;
4. The Registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared; b) evaluated the effectiveness of the Registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing
date of this quarterly report (the "Evaluation Date"); and c) presented
in this quarterly report our conclusions about the effectiveness of the
disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The Registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of Registrant's board of directors (or persons performing the
equivalent function): a) all significant deficiencies in the design or
operation of internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data and have
identified for the Registrant's auditors any material weaknesses in internal
controls; and b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the Registrant's internal
controls; and
6. The Registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
Date: November 29, 2003 ____IGOR DMITROWSKY (signed)_________
By: Igor Dmitrowsky, Chief Executive Officer
I, Igor Dmitrowsky, the Registrant's Chief Financial Officer, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Baltia Air
Lines, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The Registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared; b) evaluated the effectiveness of the Registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing
date of this quarterly report (the "Evaluation Date"); and c) presented
in this quarterly report our conclusions about the effectiveness of the
disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The Registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and
the audit committee of Registrant's board of directors (or persons
performing the equivalent function): a) all significant deficiencies
in the design or operation of internal controls which could adversely
affect the registrant's ability to record, process, summarize and report
financial data and have identified for the Registrant's auditors any
material weaknesses in internal controls; and b) any fraud, whether or
not material, that involves management or other employees who have a
significant role in the Registrant's internal controls; and
6. The Registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
Date: Novemnber 29, 2003 ______ IGOR DMITROWSKY (signed) _____
By: Igor Dmitrowsky, Chief Financial Officer
BALTIA AIR LINES, INC., Registrant
Date: 11-29-2003 ______ IGOR DMITROWSKY (signed) _____
By: Igor Dmitrowsky, President
Date: 11-29-2003 ____ WALTER KAPLINKSY (signed)_____
By: Walter Kaplinsky, Secretary
[BLTQ03-3.txt]