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, 2000
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 "x" Yes "x" Required report
filed herewith.
Class Number of Shares
Common Stock - Par Value $.0001 Per Share 3,982,552
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.
BALTIA AIR LINES, INC.
BALANCE SHEETS
As At MARCH 31, 2000
ASSETS
Current Assets
Cash $ 3,318
Total Current Assets 3,318
Fixed Assets
Property, Plant and Equipment
Property, Plant and Equipment 89,656
Less Accumulated Depreciation 22,414
Net Property, Plant and Equipment 67,242
Other Assets
Premedia Costs 237,654
Total Other Assets 237,654
TOTAL ASSETS $308,214
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities
Accounts Payable $ 53,818
Total Current Liabilities 53,818
Other Liabilities
Officers Loan 120,750
Total Other Liabilities 120,750
Stockholders Equity
Common Stock 399
Preferred Stock 2,753
Paid-in-Capital 7,947,057
Retained Earnings (7,816,672)
Treasury Stock (100)
Total Stockholders Equity 133,437
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $308,005
BALTIA AIR LINES INC.
STATEMENTS OF CHANGES OF SHAREHOLDERS EQUITY
THREE MONTHS ENDED MARCH 31, 2000
Preferred Stock Common Stock Additional
Shares Par Value Shares Par Value Paid In Capital
Balance - Dec 31, 1999 275,250 $2,753 3,982,552 399 $ 7,933,825
2000 Issue-Preferred Stock 0 0 - -
2000 Issue-Common Stock - - 0 0 13,232
Balance - March 31, 2000 275,250 2,753 3,982,552 399 7,947,057
STATEMENT OF OPERATIONS
Three months Ended August 24, 1989
March 31, (Inception) to
2000 1999 March 31, 2000
(Unaudited) (Unaudited)
Revenues 0 0 0
Expenses
Depreciation 3,202 3,202 22,414
Interest Expense 0 0 1,242,363
General and
Administrative 4,185 41,240 2,396,028
Professional fees 1,874 0 2,005,608
Service contributions 0 0 1,352,516
Training Expense 0 0 225,637
FAA Certification 0 0 206,633
Media Costs 26,406 33,008 125,429
Abandoned fixed assets 0 0 205,162
Total expenses 35,667 77,450 7,781,790
Net loss (35,667) (77,450) (7,781,790)
STATEMENT OF CASH FLOWS
Cash flows from Operations Three months Ended Aug 24, 1989
March 31, (inception)to
2000 1999 Mar 31, 2000
(Unaudited) (Unaudited)
Net Income (35,667) (77,450) (7,816,671)
Adjustments to reconcile net loss to
net cash provided by operations:
Depreciation 3,202 3,202 241,824
Change in Property, Plant and Equipment 0 0 (309,066)
Interest paid by stock 0 0 63,500
Change in Premedia costs 26,406 58,008 158,436
Change in Accounts Payable (5,750) 0 1,858,262
Change in Officers Loan (1,250) 0 (248,140)
Service Contributions 0 0 1,352,516
Total Adjustments 22,608 61,210 3,117,332
Net Cash Provided by Operations (13,059) (16,240) (4,699,339)
Cash flows from Financing Activities:
Shareholder Loans 0 0 1,351,573
Paid In Capital 13,232 15,961 2,714,812
Issuance of Common Stock 0 0 1,133,409
Issuance of Preferred Stock 0 0 2,753
Issuance of Treasury Stock 0 1,953 (500,100)
Net Increase(Decrease) in Cash Equivs 173 1,674 3,108
Cash and Cash Equivalents - Beginning 2,935 2,202 0
CASH AND CASH EQUIVALENTS - ENDING 3,108 3,876 3,108
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 purposes 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 that the total
of deferred tax assets are not realized, a reserve is established.
3. PROPERTY and EQUIPMENT
Property and equipment at March 31, 2000 (Unaudited)
consisted of the following;
Office Equipment $53,406
Furniture & Fixtures 6,782
Automobiles 29,465
Total 89,656
Less, Accumulated Depreciation (22,414)
Total Property and Equipment $67,242
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
On June 30, 1997 Steffanie Lewis was issued 125,000
restricted common shares, as negotiated with the management of
the Company, in exchange for the total due to her, in the amount
of $ 1,624,432.
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 March 31, 2000 the Company has a net operating loss
carry forward of $7,816,672 which is available to offset future
taxable income. The carry forwards start to expire between the
year 2006 and 2013. The Company is still liable for certain
minimum state and city taxes.
As of March 31, 2000, 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 1992, the Company granted options to purchase 43,583
restricted shares of common stock, at $80.00 per share, to certain
private investors. These options expire upon the passing of thirty
full calendar months after the Company has made a public sale of
securities in compliance with the Securities Act of 1933, as
amended, or the passing of twenty years from date of said
agreements, whichever is earlier. As of March 31, 2000, no options
have been exercised.
(B) 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.
(C) Acquisition of Common Treasury Stock
On September 28, 1998 the Company purchased from Igor
Dmitrowsky, president of the Company, 833,333 common shares for
$100 and has granted him an option to repurchase 1,000,000 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.
(D) Reverse 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.
All references in the accompanying financial statements
to the number of common shares, warrants and per share amounts
have been restated to reflect the reverse stock splits.
(E) Preferred Shares
On December 7, 1998, the Company amended its Articles of
Incorporation thereby, increasing the authorized aggregate number
of preferred stock shares from 15,000 preferred stock shares at
no par value to 500,000 preferred stock shares at $.01 par value.
(F) 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 and to pursue the suit identified
above.
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.
On February 8, 1999 the Company brought suit in the New York
Supreme Court, First Department against the Canadian Imperial Bank
of Commerce and its wholly-owned subsidiary to compel access to
clearance or for damages if access were not timely provided to
preserve the Company's public offering. The action was dismissed
on May 13, 1999 and appeal was made to the Appellate Division of
that court where a decision is pending. On February 1, 2000, the
Company sued on Securities violations and RICO in the US District
Court for the Southern District of New York. On March 13, 2000
time for defendants' answer was extended to April 20, 2000.
Item 2. Intentionally omitted.
Item 3. Intentionally omitted.
Item 4. 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: 12-15-2001 ____ IGOR DMITROWSKY (signed) _____
By: Igor Dmitrowsky, President
Date: 12-15-2001 ____ WALTER KAPLINKSY (signed)_____
By: Walter Kaplinsky, Secretary
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