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 JUNE 30, 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 JUNE 30, 2000
ASSETS
Current Assets
Cash $ 3,280
Total Current Assets 3,280
Fixed Assets
Property, Plant and Equipment
Property, Plant and Equipment 89,656
Less Accumulated Depreciation 25,616
Net Property, Plant and Equipment 64,040
Other Assets
Premedia Costs 211,248
Total Other Assets 211,248
TOTAL ASSETS $ 278,568
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities
Accounts Payable $ 48,068
Total Current Liabilities 48,068
Other Liabilities
Officers Loan 119,500
Total Other Liabilities 119,500
Stockholders Equity
Common Stock 399
Preferred Stock 2,753
Paid-in-Capital 7,960,288
Retained Earnings (7,852,340)
Treasury Stock (100)
Total Stockholders Equity 111,000
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 278,568
BALTIA AIR LINES INC.
STATEMENTS OF CHANGES OF SHAREHOLDERS EQUITY
SIX MONTHS ENDED JUNE 30, 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 26,463
Balance - June 30, 2000 275,250 2,753 3,982,552 399 7,960,288
STATEMENT OF OPERATIONS
Six months Ended August 24, 1989
June 30, (Inception) to
2000 1999 June 30, 2000
(Unaudited) (Unaudited)
Revenues 0 0 0
Expenses
Depreciation 6,404 6,404 25,616
Interest Expense 0 0 1,242,363
General and
Administrative 8,371 82,480 2,400,214
Professional fees 3,748 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 52,812 66,015 151,835
Abandoned fixed assets 0 0 205,162
Total expenses 71,335 154,899 7,815,584
Net loss (71,335) (154,899) (7,815,584)
STATEMENT OF CASH FLOWS
Cash flows from Operations Six months Ended Aug 24, 1989
June 30 (inception) to
2000 1999 June 30, 2000
(Unaudited) (Unaudited)
Net Income (71,335) (154,899) (7,852,339)
Adjustments to reconcile net
loss to net cash provided by
operations:
Depreciation 6,404 6,404 245,026
Change in Property, Plant and
Equipment 0 0 (309,066)
Interest paid by stock 0 0 63,500
Change in Premedia costs 52,812 116,016 184,842
Change in Accounts Payable (11,500) 0 1,852,512
Change in Officers Loan (2,500) 0 (249,390)
Service Contributions 0 0 1,352,516
Total Adjustments 45,216 122,420 3,139,940
Net Cash Provided by Operations (26,119) (32,479) (4,712,399)
Cash flows from Financing
Activities:
Shareholder Loans 0 0 1,351,573
Paid In Capital 26,464 31,922 2,728,044
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 345 1,396 3,280
Equivs
Cash and Cash Equivalents - Beginning 2,935 2,202 0
CASH AND CASH EQUIVALENTS - ENDING 3,280 3,598 3,280
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 June 30, 2000 (Unaudited)
consisted of the following;
Office Equipment $53,406
Furniture & Fixtures 6,782
Automobiles 29,465
Total 89,656
Less, Accumulated Depreciation (25,616)
Total Property and Equipment $64,040
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 S57,000.
6. INCOME TAXES
At June 30, 2000 the Company has a net operating loss carry
forward of $7,852,340 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 June 30, 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 June 30, 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.
On June 8, 2000, the Supreme Court of New York, Appellate Division,
First Department affirmed but stated it lacked jurisdiction to
consider violations of the Securities Exchange Act. The Company
requested Reargument.
On February 1, 2000, the Company sued on securities violations
and RICO in the US District Court for the Southern District of New
York. Respondents answered with a Motion to Dismiss which was
summarily granted on June 16, 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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