UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Mark One | |
[ X ] | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Fiscal Year ended December 31, 2014 | |
[ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(Exact name of Registrant as specified in its charter)
NEW YORK (State of Incorporation) |
11-2989648 (IRS Employer Identification No.) |
JFK International Airport, Building 151, Jamaica, NY 11430 (Address of principal executive offices) (718) 244 8880 (Registrant's telephone number, including area code) | |
Title of each class -None- | Name of each Exchange on which registered -None- |
Securities Registered pursuant to Section 12(g) of the Exchange Act: | |
Common Stock, (Title of Class) | $.0001 Par Value |
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] - - No [X] | |
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes [ ] - - No [X] | |
Indicate by check mark whether the Registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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. Yes [X] - - No [ ] | |
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes [X] - - No [ ] | |
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one): | |
Large accelerated filer [ ] Non-accelerated filer [ ] |
Accelerated filer [ ] Smaller reporting company [X] |
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act of 1934). Yes [ ] No [X] | |
The aggregate market value of the voting common equity held by non-affiliates as of December 31, 2014 is $42,085,431 | |
The number of shares of the registrant's common stock outstanding as of March 20, 2015 was 5,806,560,449 |
PART 1 | |
Item 1. | Business |
Item 1A. | Risk Factors |
Item 1B. | Unresolved Staff Comments |
Item 2. | Properties |
Item 3. | Legal Proceedings |
PART II | |
Item 5. | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
Item 6. | Selected Financial Information |
Item 7. | Management's Discussion and Analysis of Financial Condition and Results of Operations |
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk |
Item 8. | Financial Statement Supplementary Data |
Item 9. | Changes in and Disagreements with Accountants on Accounting And Financial Disclosures |
Item 9A | Controls and Procedures |
Item 9B | Other Information - Required FD Disclosure of Nonpublic Material Information |
PART III | |
Item 10. | Directors and Executive Officers of the Registrant |
Item 11. | Executive Compensation |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
Item 13. | Certain Relationships and Related Transactions |
Item 14. | Principal Accountant Fees and Services |
PART IV | |
Item 15. | Financial Statements and Other Exhibits |
Item 1. Business.
Baltia Air Lines, Inc. (the "Company" or "Baltia" or "Baltia Air Lines"), a Part 121 (heavy jet operator) start-up United States airline with headquarters at JFK International Airport, New York, and base of operations on the Willow Run Airport, Ypsilanti, Michigan. The FAA Eastern Michigan FISDO has oversight of Baltia's Air Carrier Certification and operations. Upon completion of the Certification, Baltia will commence scheduled non-stop service from JFK Int'l Airport to Pulkovo II Int'l Airport of St. Petersburg. Baltia Air Lines, Inc. was organized in the State of New York on August 24, 1989.
In the last quarter of 2010, Baltia purchased a Boeing 747 aircraft from Kalitta Air.
Baltia carries $500,000,000 aircraft liability insurance and will carry airline liability insurance as required for a US airline by DOT regulation.
Following the commencement of service on the JFK-St. Petersburg route, Baltia's objective is to develop its route network to Russia, Latvia, Ukraine, and Belarus.
Baltia intends to provide full service, i.e. passenger, cargo and mail.
There is currently no non-stop service from JFK to St. Petersburg. Connecting service is provided mainly by foreign carriers. Finnair, Lufthansa and SAS are the leading competitors in the US-Russia market. KLM, British Airways, Air France, Austrian Airlines, Ukraine Airlines and Swiss International also provide service. United Airlines code shares with Swiss International and Lufthansa flights into St. Petersburg. Delta and two Russian airlines, Aeroflot and Transaero, currently operate between JFK and Moscow. With the exception of the JFK-Moscow route, there exists no non- stop competitive air transportation service on the routes for which Baltia intends to apply.
A comparison of direct and connecting services with respect to passenger convenience and cargo transport efficiency is set forth below.
BALTIA - US flag, non-stop service:
With non-stop service, a passenger can fly from JFK to St. Petersburg in about 8 hours in a Boeing B747 wide body airplane. Cargo arrives containerized, palletized, and secure.
Foreign, connecting service:
With connecting service, it would take a passenger 10 to 18 hours to fly through Helsinki, Copenhagen, Moscow, or Frankfurt. In addition, passengers must change to narrow-body aircraft at a layover airport. Cargo is "broken up" and manually loaded onto narrow-body aircraft, or trucked from Helsinki.
Baltia intends to initiate service with its Boeing 747 wide-body aircraft carrying three-class passengers, mail and cargo in containers, on pallets, and in block space arrangements. Baltia has passenger service and ground service arrangements at JFK and at Pulkovo II Airport in St. Petersburg. As a US carrier flying into a foreign country, Baltia will be eligible to the same degree of priority that a foreign carrier receives when arriving in the US.
Baltia intends to start the JFK-St. Petersburg service with one round- trip flight per week, then increase the frequency to three round trips, and then to five round trips.
Baltia plans to build operating modules and apply them in developing new markets. Once established, Baltia plans to duplicate its JFK-St. Petersburg standards on flights on other transatlantic routes.
Concurrently with its Part 121 Air Carrier Certification ("Part 121") for scheduled service, Baltia is certifying for world-wide charter service, opening the opportunity to earn additional revenues from charters.
As of December 31, 2014, Baltia's staff of thirty-one includes professionals with airline experience.
administration.Item 1A. Risk Factors.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
Item 1B. Unresolved Staff Comments.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
Item 2. Properties.
The Company rents space at Concourse A, Terminal 4, JFK International Airport and has headquarters at Building 151, JFK Airport. Baltia has an office space in Pulkovo Airport, St. Petersburg, Russia. In addition, in 2012, Baltia opened its operations office in at Willow Run Airport, Ypsilanti, Michigan.
Item 3. Legal Proceedings.
None.
Item 4. Reserved
PART II.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
The following table sets forth the high and low sales prices, as quoted by the OTCBB, for our common stock for each quarter during our two most recent fiscal years ended December 31, 2013 and 2014. These quotations reflect inter-dealers prices, without retail mark-ups, mark-downs or commissions, and may not represent actual transactions.
Fiscal Quarter Ended |
High |
Low |
March 31, 2013 |
.04 |
.01 |
June 30, 2013 |
.03 |
.02 |
September 30, 2013 |
.02 |
.01 |
December 31, 2013 |
.02 |
.01 |
March 31, 2014 |
.04 |
.01 |
June 30,2014 |
.03 |
.02 |
September 30, 2014 |
.02 |
.01 |
December 31, 2014 |
.02 |
.01 |
The Company currently estimates that there are approximately 5,400 holders of record of its common stock. Given its continuing need to retain any earnings to fund its future operations and desired growth, the Company has not declared or paid, nor does it currently anticipate declaring or paying for the foreseeable future, any dividends on the Company's common stock.
Baltia plans to increase its fleet of airplanes after initiating revenue service but currently has no specific equity purchase plan, written purchase, savings, option, bonus, appreciation, profit sharing, thrift, incentive, or pension.
Item 6. Selected Financial Information.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Statements in this discussion that include words such as "believe," "expect," "should," intend," "may," "anticipate," "likely," "contingent," "could," "may," or other future-oriented statements, are forward-looking statements. Such forward-looking statements include, but are not limited to, statements regarding our business plans, strategies and objectives, and, in particular, statements referring to our expectations regarding our ability to continue as a going concern, generate increased market awareness of, and demand for, our service, realize profitability and positive cash flow, and timely obtain required financing. These forward-looking statements involve risks and uncertainties that could cause actual results to differ from anticipated results. The forward-looking statements are based on our current expectations and what we believe are reasonable assumptions given our knowledge of the markets; however, our actual performance, results and achievements could differ materially from those expressed in, or implied by, these forward-looking statements.
Our fiscal year ends on December 31. References to a fiscal year refer to the calendar year in which such fiscal year ends.
OVERVIEW
The Company was organized in the State of New York on August 24, 1989. Its objective is to provide scheduled air transportation from the U.S. to Russia, and former Soviet Union countries.
Baltia is currently in Phase III of the FAA Air Carrier Certification. Upon completion of the Air Carrier Certification, Baltia intends to commence scheduled non-stop service from its Base of Operations at Terminal 4, JFK Int'l Airport in New York to Pulkovo II Int'l Airport of St. Petersburg.
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has minimum cash available for payment of ongoing operating expenses and it has incurred operating losses and experienced negative cash flows from operations since inception. The Company has funded its activities through December 31, 2014 almost exclusively from debt and equity financings. For the years ended December 31, 2014 and 2013, the Company raised approximately $9.9 and $4.1 million, respectively, from private placements, funds needed to continue with the certification process, a process that must be completed before it can commence revenue service. In addition to raising funds from private placements, the Company issued common stock to pay certain operating expenses.
The Company's operational success may be dependent upon its timely procuring significant external debt and/or equity financing to fund its immediate and nearer-term operations, and subsequently realizing operating cash flows from ticket sales sufficient to sustain its longer-term operations and growth initiatives.
PLAN OF OPERATION
As indicated above, we continued to finance our operations through the issuance of our common stock during 2013 and 2014. Until revenue operations begin, our monthly expenditures for administrative and regulatory compliance can be controlled at about $700,000-$1,000,000. At the time flight service is inaugurated, the Company plans to employee approximately 30 management and 50 crew members and staff.
While the Company believes it will be successful in obtaining the necessary financing to fund its operations, there are no assurances that such additional funding will be achieved and that it will succeed in its future operations. If adequate funds are not available or are not available on acceptable terms, we may not be able to fund operations
CRITICAL ACCOUNTING POLICIES
Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. The preparation of our financial statements requires us to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Our estimates, judgments and assumptions are continually re-evaluated based upon available information and experience. Because of the use of estimates inherent in the financial reporting process, actual results could differ from those estimates. Areas in which significant judgment and estimates are used include, but are not limited to, valuation of long-lived assets and deferred income taxes.
Valuation of Long-Lived Assets
We review the recoverability of our long- lived assets, including buildings, equipment and intangible assets, when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. Our primary measure of fair value is based on discounted cash flows. The measurement of impairment requires management to make estimates of these cash flows related to long-lived assets, as well as other fair value determinations
We amortize the costs of other intangibles (excluding goodwill) over their estimated useful lives unless such lives are deemed indefinite. Amortizable intangible assets are tested for impairment based on undiscounted cash flows and, if impaired, written down to fair value based on either discounted cash flows or appraised values. Intangible assets with indefinite lives are tested for impairment, at least annually, and written down to fair value as required
Stock-Based Compensation Plans
The Company complies with FASB ASC Topic 718 Compensation - Stock Compensation, whichestablishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity's equity instruments or that may be settled by the issuance of those equity instruments. FASB ASC Topic 718 focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. FASB ASC Topic 718 requires an entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award the requisite service period (usually the vesting period). No compensation costs are recognized for equity instruments for which employees do not render the requisite service. The grant-date fair value of employee share options and similar instruments will be estimated using option-pricing models adjusted for the unique characteristics of those instruments (unless observable market prices for the same or similar instruments are available). If an equity award is modified after the grant date, incremental compensation cost will be recognized in an amount equal to the excess of the fair value of the modified award over the fair value of the original award immediately before the modification.
Our primary type of share-based compensation consists of stock-based awards. We use the fair value method in accordance with ASC 718. We also may use stock options. We use the Black-Scholes option pricing model in valuing options. No stock options were issued during the year ended December 31, 2014. All outstanding stock options were canceled in 2012.
Income taxes
Income taxes are recorded in accordance with ASC Topic 740, Accounting for Income Taxes ("ASC 740"), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. The Company determines its deferred tax assets and liabilities based on differences between financial reporting and tax bases of assets and liabilities, which are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are provided, when necessary, to reduce the deferred income tax assets to the amount expected to be realized.
The determination of the Company's provision for income taxes requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. Significant judgment is required in assessing the timing and amounts of deductible and taxable items and the probability of sustaining uncertain tax positions. The benefits of uncertain tax positions are recorded in the Company's financial statements only after determining a more-likely-than-not probability that the uncertain tax positions will withstand challenge, if any, from tax authorities. When facts and circumstances change, the Company reassesses these probabilities and records any changes in the financial statements as appropriate.
In accordance with GAAP, The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. The Company's management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months
Generally, the tax filings are no longer subject to income tax examinations by major taxing authorities for years before 2011.
RESULTS OF OPERATIONS
We had no revenues during the fiscal years ended December 31, 2013 and 2014, because (1) we did not fly aircraft in passenger, charter, or freight service, and (2) we could not sell tickets for those services
For the years ended December 31, 2014 and 2013, general and administrative expenses were $13,820,392 and $5,910,517, respectively, an increase of $7,909,875, or 133.8%. This increase resulted from the general and administrative costs incurred in connection with aircraft maintenance.
FAA certification costs increased $585,216, or 71.8% for the year ended December 31, 2014 from $814,982 reported for the year ended December 31, 2013. This increase resulted from the additional costs incurred for FAA certification activities in connection the air certification process.
We reported net losses of $15,403,415 and $6,868,196 for the years ended December 31, 2014 and 2013, respectively, an increase of $8,535,219 or 125%. This increase is primarily attributable to the $7,909,875 increase in general and administrative expenses and the $585,216 increase in FAA certification costs.
Our future ability to achieve profitability in any given future fiscal period remains highly contingent upon our beginning flight operations. Our ability to realize revenue from flight operations in any given future fiscal period remains highly contingent upon our obtaining significant equity infusions and/or long-term debt financing sufficient to fund initial operations. Even if we were to be successful in procuring such funding, there can be no assurance that we will be successful in commencing revenue operations or, if commenced, that such operations would be profitable.
LIQUIDITY AND CAPITAL RESOURCES
Since our inception, we have incurred substantial operating and net losses, as well as negative operating cash flows. As of December 31, 2014, we had cash of $185,613 an increase of $174,064 from the cash balance of $11,549, reported at December 31, 2013. At December 31, 2014, our stockholders' deficit was $1,777,773, an increase of $1,475,245 from the stockholders' deficit balance of $302,528 reported at December 31, 2013.
Our operating activities utilized $9,140,945 in cash during the fiscal year ended December 31, 2014, an increase of $5,047,672 from the $4,093,273 in cash utilized during the fiscal year ended December 31, 2013.
Our financing activities provided $9,894,043 and $4,132,514 in cash during the fiscal year ended December 31, 2014 and 2013, respectively.
We had no significant planned capital expenditures, budgeted or otherwise, as of December 31, 2014, except continuous support in air carrier certification activities.
Off-Balance Sheet Arrangements: We do not have any off-balance sheet arrangements which have, or are reasonably likely to have, an effect on our financial condition, financial statements, revenues or expenses.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
Item 8. Financial Statement Supplementary Data.
None.
Item 9. Changes in and Disagreements with Accountants on Accounting And Financial Disclosures
As reported by Form 8-K filed April 14, 2014, the Company changed its certifying accountant as the prior certifying auditor withdrew due to time constraints created by the Company.
On April 9, 2015, Baltia's independent auditor, Mr. Terry L. Johnson, having completed his financial reports for the audit, advised the Company that he was unable to certify the filing. The Company could not complete a new audit prior to the deadline.
Item 9A(T). Controls and Procedures.
Evaluation of Disclosure Controls and Procedures. As of the end of the period covered by this report, we conducted an evaluation under the supervision and with the participation of our chief executive and financial officer of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based upon this evaluation, our chief executive and financial officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms.
Management's Annual Report on Internal Control over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes of accounting principles generally accepted in the United States.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.
Our management evaluated the effectiveness of our internal control over financial reporting as of December 31, 2014. Based on this evaluation, our management concluded that, as of December 31, 2014, our internal control over financial reporting was effective.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit the company to provide only management's report in this annual report.
Changes in Internal Control Over Financial Reporting. There was no change in our internal controls or in other factors that could affect these controls during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. While existing controls may be adequate at present, upon the commencement of flight revenue service we intend to implement controls appropriate for airline operations.
Item 9B. Other Information.
None.
PART III
Item 10. Directors and Executive Officers of the Registrant.
The following table summarizes certain information with respect to the executive officers and directors of the board :
Name | Age | Position | |
Igor Dmitrowsky | 60 | President, CEO, CFO, Chairman of the Board | |
Russell Thal | 81 | Executive Vice President | |
Barry Clare | 56 | Vice President Finance | |
Walter Kaplinsky | 77 | Secretary, Director | |
Andris Rukmanis | 53 | Vice President Europe, Director | |
Vick Luis Bolanos | 55 | Director |
Our directors serve until the next annual meeting and until their successors are elected and qualified. Our officers are appointed to serve for one year until the meeting of the board of directors following the annual meeting of stockholders and until their successors have been elected and qualified. There are no family relationships between any of our directors or officers.
A. Board of Directors:
Igor Dmitrowsky
Igor Dmitrowsky, chairman and president, chief executive officer and CFO, founded the Company in August 24, 1989. Managing daily operations of the Company has been his full-time occupation and executive profession throughout those years.
No organization to which Mr. Dmitrowsky has been associated is a parent, subsidiary or other affiliate of Baltia Air Lines.
Walter Kaplinsky
Walter Kaplinsky is a retired engineer and has been director and corporate secretary since 1993. No organization to which Mr. Kaplinsky has been associated is a parent, subsidiary or other affiliate of Baltia Air Lines.
No organization to which Mr. Kaplinsky has been associated is a parent, subsidiary or other affiliate of Baltia Air Lines.
Andris Rukmanis
Andris Rukmanis, director and vice president Europe, is and has been for more than twenty years a full-time qualified licensed attorney in Latvia, specializing in business law, and has been a Director of the Company since 1990. No organization to which Mr. Rukmanis has been associated is a parent, subsidiary or other affiliate of Baltia Air Lines.
Vick Luis Bolanos
Vick Luis Bolanos, has served as director since 2009. He is, and has been, president and chairman of Eastern Construction & Electric, Inc. throughout those years. No organization to which Mr. Bolanos has been associated is a parent, subsidiary or other affiliate of Baltia Air Lines.
B. Executive Officers In Addition to Mr. Dmitrowsky, Mr. Kaplinsky, and Mr. Rukmanis:
Russell Thal
Russell Thal, executive vice president, joined the Company in year 2000 and has since been working for Baltia. No organization to which Mr. Thal has been associated is a parent, subsidiary or other affiliate of Baltia Air Lines, Inc.
Barry Clare
Barry Clare, vice president of finance, joined the Company in 2006 and has been working with Baltia since 2006. No organization to which Mr. Clare has been associated is a parent, subsidiary or other affiliate of Baltia Air Lines, Inc.
C. Nominations for Director:
No recent nominations.
Item 11. Executive Compensation.
Minimal weekly base salaries of $500 plus bonuses have been paid to executive officers commencing the second quarter of fiscal year ended December 31, 2014. No executive officer was paid a base salary in fiscal year ended December 31, 2013. During the fiscal year ended December 31, 2014, no executive options were granted.
During the fiscal year ended December 31, 2014, no executive stock options were issued or exercised.
No shares were issued to executive officers in 2014.
In 2013, the Company issued a total of 19,000,000 of its $.0001 par value common stock to an executive officer and a member of the board of directors. These shares were awarded as bonus fully earned and non-assessable, and containing no future earned performance or forfeiture requirements. Of this, 19,000,000 total, 18,000,000 of the shares, valued at $180,000 were issued to the Company's president and CEO, Igor Dmitrowsky.
SUMMARY COMPENSATION TABLE
Name & Principal Position (a) |
Year (b) |
Salary ($) (c) |
Bonus ($) (d) |
Stock awards* ($) (e) |
Option awards* ($) (f) |
Non-equity incentive plan compensation ($) (g) |
Change in Pension Value and Non-qualified deferred compensation ($) (h) |
All Other Compensation ($)** (i) |
Total ($) (j) |
Igor Dmitrowsky President, CEO |
2014 2013 |
$ 19,600 0 |
$ 102,000 0 |
$ 0 180,000 |
$ 0 0 |
$ 0 0 |
$ 0 0 |
$ 0 27,853 |
$ 121,600 207,853 |
Barry Clare Vice-President |
2014 2013 |
$ 20,850 0 |
$ 0 0 |
$ 0 16,200 |
$ 0 0 |
$ 0 0 |
$ 0 0 |
$ 748,511 443,550 |
$ 769,361 459,730 |
Russell Thal Vice-President |
2014 2013 |
$ 83,800 0 |
$ 0 0 |
$ 0 0 |
$ 0 0 |
$ 0 0 |
$ 0 0 |
$ 24,000 46,500 |
$ 107,800 46,500 |
Walter Kaplinsky Secretary |
2014 2013 |
$ 0 0 |
$ 0 0 |
$ 0 0 |
$ 0 0 |
$ 0 0 |
$ 0 0 |
$ 11,968 15,800 |
$ 11,968 15,800 |
Andris Rukmanis VP, Europe |
2014 2013 |
$ 0 0 |
$ 0 0 |
$ 0 0 |
$ 0 0 |
$ 0 0 |
$ 0 0 |
$ 0 0 |
$ 0 0 |
* These columns represent the grant date fair value of the awards as calculated in accordance with FASB ASC Topic 718, Compensation - Stock Compensation. The fair value of these equity awards on the date of grant was approximately $0 and $196,200 for stock awards for the years ended December 31, 2014 and 2013, respectively.
** During the year ended December 31, 2013, Mr. Dmitrowsky was charged additional compensation of $15,000, which represents one-hundred percent of the rent the Company paid for its original corporate headquarters. In addition, during the years ended December 31, 2014 and 2013, Mr. Dmitrowsky received salary and other compensation of $121,600 and $12,853 respectively for services provided to the Company.
** Mr. Clare was paid salary and other compensation of $769,361 and $427,350 for the years ended December 31, 2014 and 2013, respectively, which represents amounts paid him in connection with the raise of new equity capital.
** Russell Thal earned salary and other compensation of $107,800 and $46,500 for services provided the Company during the years ended December 31, 2014 and 2013.
** Mr. Kaplinsky was paid additional compensation of $11,968 and $15,800 for services provided the Company during the years ended December 31, 2014 and 2013.
EMPLOYMENT AGREEMENTS
The Company has no individual employment agreements with any of its executive officers or employees.
Future Compensation of Executive Officers
The board of directors approves salaries for the Company's executive officers as well as the Company's overall salary structure. For year one following commencement flight operations, the rate of compensation for the Company's executive officers is expected to be: president $420,000, executive vice president $230,000, vice president-finance $270,000.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
As of December 31, 2014, there were 5,582,213,346 shares of common stock, par value $0.0001 outstanding. The following table sets forth, as of December 31, 2014, the ownership of the Company's Common Stock by (i) each director and officers of the Company, (ii) all executive officers and directors of the Company as a group, and (iii) all other persons known to the Company to own more than 5% of the Company's Common Stock. Each person named in the table has or shares voting and investment power with respect to all shares shown as beneficially owned by such person.
Directors and Officers |
Common Shares Beneficially Owned |
Percent of Total Outstanding, % |
---|---|---|
Igor Dmitrowsky |
797,662,766 |
14.29 |
Russell Thal |
26,850,000 |
0.48 |
Barry Clare |
115,849,998 |
2.08 |
Vick Luis Bolanos |
445,025,001 |
7.97 |
Walter Kaplinsky |
15,500,000 |
0.28 |
Andris Rukmanis |
6,468,750 |
0.12 |
Shares of all directors and executive officers as a group (6 persons) |
1,407,356,515 |
25.21% |
Other 5% Owners |
Common Shares Beneficially Owned |
Percent of Total Outstanding, % |
John A. Drago |
322,651,000 |
5.78 |
Item 13. Certain Relationships and Related Transactions.
Mr. Vick Luis Bolanos was elected to the Baltia board of directors while he was, and remains, president and chairman of Eastern Construction & Electric, Inc. The transaction between Baltia and Eastern was made in the ordinary course of business on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not related to the lender; and did not involve more than the normal risk of collectibility or present other unfavorable features. This transaction is discussed further in Note 8 to the Financial Statements infra.
The principal of $1.150 million remained outstanding during 2014 and accrued interest of $515,325 was outstanding as of December 31, 2014. By agreement of Parties, no interest was paid in 2014, and the rate of interest is 9% per annum. An amended, agreement was concluded and submitted in Company's 10-Q filing for 3rd quarter 2013, filed November 19, 2013, Exhibit 10.18 therein.
Item 14. Principal Accountant Fees and Services.
Services Provided | 2014 | 2013 |
Audit Fees | $ 12,000 | $ 11,500 |
Audit-Related Fees | 0 | 0 |
Tax Fees | 10,000 | 0 |
All other Fees | 0 | 0 |
Total | $ 22,000 | $ 11,500 |
Audit Fees
The aggregate fees billed for the year that ended on December 31, 2014 for professional services rendered by the independent auditor for the audit of our annual financial statements and review of financial statements included in our Form 10-Q, or services that are normally provided by the accountant in connection with the statutory and regulatory filings or engagements for such fiscal year, amount to approximately $12,000.The aggregate fees billed for the year that ended on December 31, 2013 for professional services rendered by the independent auditor for the audit of our annual financial statements and review of financial statements included in our Form 10-Q, or services that are normally provided by the accountant in connection with the statutory and regulatory filings or engagements for such fiscal year, amount to approximately $11,500.
Audit -Related Fees
For the years ended on December 31, 2014 and 2013, there were no fees billed for assurance and related services by the independent auditor that are reasonably related to the performance of the audit or review of our financial statements and are not reported under Item 9(e) (1) of Schedule 14A.
Tax Fees
The aggregate fees billed during the fiscal years ended December 31, 2014 and 2013, for professional services rendered by our principal independent accountant for tax compliance, tax advice and tax planning were $10,000 and $0 respectively.
All Other Fees
For the year ended December 31, 2014 and 2013 there were no fees billed for products and services by the principal independent accountant (other than services reported in Items 9(e)(1) through 9(e)(3) of Schedule 14A).
Item 15. Exhibits and Financial Statements.
APPENDIX A - Financial Statements for the Years Ended December 31, 2014 ad 2013
Report of Independent Registered Accounting firm | F-1 |
Balance Sheet as of December 31, 2014 and 2013 | F-2 |
Statement of Operations for the years ended December 31, 2014 and 2012, and the period August 29, 1989 (inception) to December 31, 2014 |
F-3 |
Statement of Changes of Stockholders' Equity for the years ended
December 31, 2008 through 2014 |
F-4 |
Statement of Cash Flows for the years ended December 31, 2014 and 2013,
and the period August 9, 1989 (inception) to December 31, 2014 |
F-5 |
Notes to Financial Statements | F-6 to F-15 |
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Years Ended December 31, 2014 and
2013
CURRENT REPORT IS UNAUDITED as discussed in Item 9 supra.
F-1
December 31, | ||||||||
2014
|
2013
|
|||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
Current assets
|
||||||||
Cash
|
$ | 185,613 | $ | 11,549 | ||||
Other current assets
|
24,908 | $ | - | |||||
Total current assets
|
210,521 | 11,549 | ||||||
Property and equipment, net
|
2,316,036 | 1,794,486 | ||||||
Other assets:
|
||||||||
Security deposit and other
|
318,683 | 317,293 | ||||||
Total assets
|
$ | 2,845,240 | $ | 2,123,328 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
||||||||
Current liabilities
|
||||||||
Accounts payable and accrued expenses
|
$ | 2,572,165 | $ | 621,208 | ||||
Short-term debt
|
50,000 | - | ||||||
Accrued interest
|
515,325 | 319,125 | ||||||
Total current liabilities
|
3,137,490 | 940,333 | ||||||
Noncurrent liabilities
|
||||||||
Long-term debt, net of discount
|
1,150,000 | 1,150,000 | ||||||
Long-term accounts payables and accrued expenses
|
335,523 | 335,523 | ||||||
Total noncurrent liabilities
|
1,485,523 | 1,485,523 | ||||||
Total liabilities
|
4,623,013 | 2,425,856 | ||||||
Stockholders' equity (deficit)
|
||||||||
Preferred stock, $0.01 par value; 2,000,000 shares authorized, 66,500 issued and outstanding
|
665 | 665 | ||||||
Common stock, $.0001 par value; 5,986,000,000 shares authorized, 5,582,213,346 and 3,296,126,988 issued and outstanding at December 31, 2014 and 2013, respectively
|
549,741 | 329,612 | ||||||
Additional paid-in capital
|
108,215,743 | 94,507,702 | ||||||
Deficit accumulated during development stage
|
(110,543,922 | ) | (95,140,507 | ) | ||||
Total stockholders' equity (deficit)
|
(1,777,773 | ) | (302,528 | ) | ||||
Total liabilities and stockholders' equity (deficit)
|
$ | 2,845,240 | $ | 2,123,328 |
From
|
||||||||||||
Inception to
|
||||||||||||
Years Ended December 31,
|
December 31,
|
|||||||||||
2014
|
2013
|
2014
|
||||||||||
(Unaudited)
|
(Unaudited)
|
|||||||||||
Revenue
|
$ | - | $ | - | $ | - | ||||||
Cost and Expenses
|
||||||||||||
General and admiinistrative
|
13,820,392 | 5,910,517 | 100,505,804 | |||||||||
FAA certification costs
|
1,400,198 | 814,982 | 5,361,389 | |||||||||
Training
|
- | - | 225,637 | |||||||||
Depreciation
|
56,094 | 16,488 | 442,522 | |||||||||
Other
|
- | - | 568,245 | |||||||||
Interest
|
126,731 | 122,609 | 1,810,124 | |||||||||
Loss on sale of assets
|
- | - | 1,607,183 | |||||||||
Total costs and expenses
|
15,403,415 | 6,864,596 | 110,520,904 | |||||||||
Net loss befoe income taxes
|
(15,403,415 | ) | (6,864,596 | ) | (110,520,904 | ) | ||||||
Provision for income taxes
|
- | 3,600 | 23,018 | |||||||||
Deficit accumulated during development stage
|
$ | (15,403,415 | ) | $ | (6,868,196 | ) | $ | (110,543,922 | ) | |||
Net loss per weighted share, basice and fully diluted
|
$ | (0.004 | ) | $ | (0.002 | ) | ||||||
Weighted average number of common shares outstanding, basic and fully diluted
|
4,302,033,740 | 2,984,068,462 |
Deficit
|
||||||||||||||||||||||||||||
Accumulated
|
||||||||||||||||||||||||||||
Additional
|
During
|
|||||||||||||||||||||||||||
Preferred Stock
|
Common Stock
|
Paid-in
|
Development
|
|||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Stage
|
Total
|
||||||||||||||||||||||
Balance, December 31, 2008 :
|
||||||||||||||||||||||||||||
(Unaudited)
|
66,500 | $ | 665 | 355,767,159 | $ | 35,577 | $ | 18,716,994 | $ | (18,002,863 | ) | $ | 750,375 | |||||||||||||||
Exercise of warrants and options
|
32,000,000 | 3,200 | 3,202 | |||||||||||||||||||||||||
Shares issued and issuable for cash
|
154,034,244 | 15,403 | 3,686,497 | 3,701,900 | ||||||||||||||||||||||||
Shares issued for services
|
200,778,636 | 20,078 | 9,430,413 | 9,450,491 | ||||||||||||||||||||||||
Oprions issued for services
|
243,787 | 243,787 | ||||||||||||||||||||||||||
Stock issued to purchase airplane
|
1,000,000 | 100 | 24,900 | 25,000 | ||||||||||||||||||||||||
Net loss
|
(12,175,550 | ) | (12,175,550 | ) | ||||||||||||||||||||||||
Balance, December 31, 2009
|
66,500 | 665 | 743,580,039 | 74,358 | 32,102,591 | (30,178,413 | ) | 1,999,201 | ||||||||||||||||||||
Stock issued and issuable for cash
|
115,776,464 | 11,578 | 4,365,876 | 4,377,454 | ||||||||||||||||||||||||
Shares issued for services
|
252,658,491 | 25,266 | 14,984,584 | 15,009,850 | ||||||||||||||||||||||||
Fair value of options issued as loan incentive
|
92,745 | 92,745 | ||||||||||||||||||||||||||
Stock issued as loan incentive
|
6,800,000 | 680 | 201,552 | 202,232 | ||||||||||||||||||||||||
Net loss
|
(19,394,527 | ) | (19,394,527 | ) | ||||||||||||||||||||||||
Balance, December 31, 2010
|
66,500 | 665 | 1,118,814,994 | 111,881 | 51,747,348 | (49,572,940 | ) | 2,286,954 | ||||||||||||||||||||
Stock issued and issuable for cash
|
241,369,947 | 24,137 | 7,783,105 | 7,807,242 | ||||||||||||||||||||||||
Shares issued for services
|
357,846,441 | 35,786 | 17,403,106 | 17,438,892 | ||||||||||||||||||||||||
Net loss
|
(25,075,498 | ) | (25,075,498 | ) | ||||||||||||||||||||||||
Balance, December 31, 2011
|
66,500 | 665 | 1,718,031,382 | 171,804 | 76,933,559 | (74,648,438 | ) | 2,457,590 | ||||||||||||||||||||
Prior period adjustment
|
147,987,304 | 14,798 | (14,798 | ) | - | |||||||||||||||||||||||
Stock issued and issuable for cash
|
271,270,882 | 27,127 | 3,599,755 | 3,626,882 | ||||||||||||||||||||||||
Shares issued for services
|
329,248,482 | 32,925 | 7,653,663 | 7,686,588 | ||||||||||||||||||||||||
Net loss
|
(13,623,873 | ) | (13,623,873 | ) | ||||||||||||||||||||||||
Balance, December 31, 2012
|
66,500 | 665 | 2,466,538,050 | 246,654 | 88,172,179 | (88,272,311 | ) | 147,187 | ||||||||||||||||||||
|
||||||||||||||||||||||||||||
Stock issued and issuable for cash
|
701,621,438 | 70,162 | 4,062,352 | 4,132,514 | ||||||||||||||||||||||||
Shares issued for services
|
127,967,500 | 12,796 | 2,273,171 | 2,285,967 | ||||||||||||||||||||||||
Net loss
|
(6,868,196 | ) | (6,868,196 | ) | ||||||||||||||||||||||||
Balance, December 31, 2013
|
66,500 | 665 | 3,296,126,988 | $ | 329,612 | $ | 94,507,702 | $ | (95,140,507 | ) | $ | (302,528 | ) | |||||||||||||||
Stock issued and issuable for cash
|
1,974,254,019 | 197,425 | 9,707,018 | 9,904,443 | ||||||||||||||||||||||||
Shares issued for services
|
232,534,764 | 23,254 | 4,060,873 | 4,084,127 | ||||||||||||||||||||||||
Shares cancelled
|
(5,500,000 | ) | (550 | ) | (59,850 | ) | (60,400 | ) | ||||||||||||||||||||
Net loss
|
(15,403,415 | ) | (15,403,415 | ) | ||||||||||||||||||||||||
Balance, December 31, 2014 (Unaudited)
|
66,500 | 665 | 5,497,415,771 | $ | 549,741 | $ | 108,215,743 | $ | (110,543,922 | ) | $ | (1,777,773 | ) |
From
|
||||||||||||
Inception to
|
||||||||||||
Years Ended December 31,
|
December 31,
|
|||||||||||
2014
|
2013
|
2014
|
||||||||||
(Unaudited)
|
(Unaudited)
|
|||||||||||
Cash flows from operations
|
||||||||||||
Deficit accumulated during development stage
|
$ | (15,403,415 | ) | $ | (6,868,196 | ) | $ | (110,543,922 | ) | |||
Adjustment to reconcile deficit accumlated during development stage to cash used in opeating activities:
|
||||||||||||
Depreciation and amortization
|
56,094 | 16,488 | 442,522 | |||||||||
Amortization of loan discount
|
- | - | 294,977 | |||||||||
Expenses paid issuance of common stock and options
|
4,084,127 | 2,285,967 | 100,276,956 | |||||||||
Loss on sale of assets
|
1,607,183 | |||||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Prepaid expenses and other current assets
|
(24,908 | ) | 375,393 | |||||||||
Accounts payable and accrued expenses
|
2,147,157 | 472,468 | 6,574,496 | |||||||||
Net cash used by operating activities
|
(9,140,945 | ) | (4,093,273 | ) | (972,395 | ) | ||||||
Cash flows from investing activities
|
||||||||||||
Purchase of equipment
|
(577,644 | ) | (40,018 | ) | (4,447,290 | ) | ||||||
Proceeds from sale of assets
|
- | - | 144,164 | |||||||||
Security deposit
|
(1,390 | ) | - | (318,683 | ) | |||||||
Net cash used by investing activities
|
(579,034 | ) | (40,018 | ) | (4,621,809 | ) | ||||||
Cash flows from financiang activities
|
||||||||||||
Proceeds from issuance of common stock
|
9,844,043 | 4,132,514 | 40,892,418 | |||||||||
Proceeds from issuance of prefrerred stock
|
- | - | 2,753 | |||||||||
Proceeds from short-term loans
|
50,000 | - | 50,000 | |||||||||
Loans from related parties
|
- | - | 1,351,573 | |||||||||
Repayment of related party loans
|
- | - | (368,890 | ) | ||||||||
Principal payments on long-term debt
|
- | - | 1,109,183 | |||||||||
Acquisition of treasury stock
|
- | - | (500,100 | ) | ||||||||
Net cash provided by financing activities
|
9,894,043 | 4,132,514 | 42,536,937 | |||||||||
Net increase (decrease) in cash
|
174,064 | (777 | ) | 185,613 | ||||||||
Cash, beginning of period
|
11,549 | 12,326 | - | |||||||||
Cash, end of period
|
$ | 185,613 | $ | 11,549 | $ | 185,613 | ||||||
Supplemental cash flow disclosures:
|
||||||||||||
Cash paid during the year for interest
|
$ | - | $ | - |
Level 1 - Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities.
|
|
Level 2 - Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly.
|
|
Level 3 - Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. |
Estimated Useful Life |
2014
|
2013
|
||||||||
(Unaudited)
|
||||||||||
Airplane
|
10- 15 years | $ | 2,079,135 | $ | 1,540,756 | |||||
Office equipment and other
|
5 - 7 years | 433,751 | 394,486 | |||||||
Less accumulated depreciation
|
(196,850 | ) | (140,756 | ) | ||||||
$ | 2,316,036 | $ | 1,794,486 | |||||||
Current depreciation
|
$ | 56,094 | $ | 16,500 |
Warrants Outstanding
|
Warrants Excercisable
|
|||||||||||||||||||||
Number
|
Weighted
|
Number
|
||||||||||||||||||||
Outstanding
|
Average
|
Weighted
|
Exercisable
|
Weighted
|
||||||||||||||||||
|
At
|
Remaining
|
Average
|
At
|
Average
|
|||||||||||||||||
Exercise
|
December 31,
|
Contractual
|
Exercise
|
December 31,
|
Exercise
|
|||||||||||||||||
Price |
2014
|
Life
|
Price
|
2014
|
Price
|
|||||||||||||||||
$ | 0.02 | 480,000 | 0.26 | $ | 0.02 | 480,000 | $ | 0.02 | ||||||||||||||
- | ||||||||||||||||||||||
$ | 0.05 | 20,075,000 | 0.38 | $ | 0.05 | 20,075,000 | $ | 0.05 | ||||||||||||||
- | ||||||||||||||||||||||
$ | 0.08 | 4,458,333 | 0.30 | $ | 0.08 | 4,458,333 | $ | 0.08 | ||||||||||||||
- | ||||||||||||||||||||||
$ | 0.10 | 252,500 | 0.12 | $ | 0.10 | 252,500 | $ | 0.10 | ||||||||||||||
- | ||||||||||||||||||||||
$ | 0.25 | 156,000 | 0.16 | $ | 0.25 | 156,000 | $ | 0.25 | ||||||||||||||
25,421,833 | 0.80 | $ | 0.06 | 25,421,833 |
Number of
|
Weighted
|
Remaining
|
||||||||||
Warrants
|
Average
|
Term
|
||||||||||
Outstanding
|
Price
|
(In Years)
|
||||||||||
Warrants outstanding at December 31, 2013
|
60,428,066 | $ | 0.07 | 1.19 | ||||||||
Granted in 2013
|
32,046,508 | - | ||||||||||
Exercised
|
- | - | - | |||||||||
Canceled in 2013
|
20,146,566 | |||||||||||
Warrants outstanding at December 31, 2013
|
72,328,008 | $ | 0.05 | 0.80 | ||||||||
0.05 | ||||||||||||
Granted in 2014
|
327,500 | |||||||||||
Exercised
|
- | |||||||||||
Canceled in 2014
|
47,233,675 | |||||||||||
Warrants outstanding at December 31, 2014 (Unaudited)
|
25,421,833 | $ | 0.06 | 0.80 | ||||||||
Warrants exercisable at December 31, 2014 (Unaudited)
|
25,421,833 |
3. CORPORATE CERTIFICATES AND BYLAWS
3.1.1 Certificate of Incorporation (as amended) of Baltia Air Lines, Inc. Incorporated by reference to Exhibit 3.1.1 to Baltia Air Lines Inc.'s reported on Form 10-K, for the year ended December 31, 2012, as filed April 16, 2013
3.1.2 Certificate of Incorporation amendment of Baltia Air Lines, Inc. (as amended and filed on June 24, 2011) Incorporated by reference to Exhibit 3.1.2 to Baltia Air Lines Inc.'s reported on Form 10-K, for the year ended December 31, 2012, as filed April 16, 2013
3.1.3 Certificate of Incorporation amendment of Baltia Air Lines, Inc. (as amended and filed on May 24, 2012) Incorporated by reference to Exhibit 3.1.3 to Baltia Air Lines Inc.'s reported on Form 10-K, for the year ended December 31, 2012, as filed April 16, 2013
3.1.4 Certificate of Incorporation amendment of Baltia Air Lines, Inc. (as amended and filed on December 27, 2012). Incorporated by reference to Exhibit 3.1.4 to Baltia Air Lines Inc.'s reported on Form 10-K, for the year ended December 31, 2012, as filed April 16, 2013
3.1.5 Certificate of Incorporation amendment of Baltia Air Lines, Inc. (as amended and filed on July 29, 2013). Incorporated by reference to Exhibit 3.1.5 as reported on Baltia Air Lines's Form Q-10 filed 21 August 2013.
3.1.6 Certificate of Incorporation amendment of Baltia Air Lines, Inc. (as amended and filed on February 12, 2014). Incorporated by reference to Exhibit 3.1.6 as reported on Baltia Air Lines's Form 10-K filed April 15 2014.
3.1.7 Certificate of Incorporation amendment of Baltia Air Lines, Inc. (as amended and filed on June 18, 2014).Incorporated by reference to Exhibit 3.1.7 as reported on Baltia Air Lines's Form 10-Q for period ending June 30, 2014, filed August 19, 2014.
3.1.8 Certificate of Incorporation amendment of Baltia Air Lines, Inc. (as amended and filed on July 20, 2014).Incorporated by reference to Exhibit 3.1.8 as reported on Baltia Air Lines's Form 10-Q for period ending June 30, 2014, filed August 19, 2014.
3.2 Bylaws of Baltia Air Lines, Inc. (amended and ratified November 7, 2011) Incorporated by reference to Exhibit 3.2.2 to Baltia Air Lines Inc.'s reported on Form 10-K, 21 Dec 2011 from the year ended December 31, 2010.
10. MATERIAL CONTRACTS
10.1.- Fuel Agreement, World Fuel Services Inc., initial term September 1, 2013 to September 1, 2016, automatic renewal for one year extensions unless terminated.
10.2 - Amendment II - Aircraft Engine Lease Agreement, Logistic Air Inc., executed May 15, 2014, effective through February 1, 2015. Incorporated by reference to Exhibit 10.2 to Company's Form 10-Q for period ending June 30, 2014, filed August 19, 2014.
10.3 - Product and Services Agreements between Navtech Systems Support Inc. and Baltia Air Lines, Inc. Dated January 15, 2010 with confidential portion omitted and filed separately with the Commission pursuant to a request for confidential treatment. Incorporated by reference to Exhibit 10.7 to Company's 10-K/A for year 2010 as filed December 21, 2011 effective to January 14, 2015.
10.4 - Ground Handling Agreement at Pulkovo Airport between ZAO Cargo Terminal Pulkovo and Baltia Air Lines, Inc. effective June 1, 2014 through May 31, 2016. Incorporated by reference to Exhibit 10.4 to Company's Form 10-Q for period ending June 30, 2014, filed August 19, 2014.
10.5 - Aircraft and/or Engine Maintenance Services Agreement between Kalitta Air, LLC and Baltia Air Lines, Inc., and Letter Agreement to Extend Aircraft Maintenance Service Agreement between Kalitta Air and Baltia Air Lines, Inc. effective December 24, 2013 until December 24, 2015 with 1-year extension with 60-day notice. Incorporated by reference to Exhibit 10.5 to Company's 10-K for 2013 filed April 15, 2014.
10.6 - First Amendment to Product and Services Agreements between Navtech Systems Support Inc. and Baltia Air Lines, Inc. dated January 15, 2010, and effective to January 15, 2015. Incorporated by reference to Exhibit 10.10 to Company's 10-Q/A for 3rd quarter 2011, corrected and filed March 29, 2012.
10.7 Lockton Aircraft Hull, Spares and Airline Legal Liability Insurance, Baltia Air Lines, Inc. insured, effective June 15, 2014 to June 15, 2015. Incorporated by reference to Exhibit 10.7 to Company's Form 10-Q for period ending June 30, 2014, filed August 19, 2014.
10.8 Certificate of Insurance, The Boeing Company and Boeing Commercial Airplanes insured, Hull, Aircraft and Airport Premises, including war perils, ground risks only, excluding passenger liabilities, effective January 8, 2013 to April 1, 2015. Incorporated by reference to Exhibit 10.8 to Company's 10-K for 2013 filed April 15, 2014.
10.9 Kalitta Maintenance Agreement Certificate of Insurance, Kalitta Air, LLC insured, Hull & Liability ground only, Airport Premises, effective April 1, 2014 to April 1, 2015. Incorporated by reference to Exhibit 10.9 to Company's 10-K for 2013 filed April 15, 2014.
10.10 Certificate of Insurance, Port Authority of New York and New Jersey insured, Airport Premises, effective April 1, 2014 to April 1, 2015. Incorporated by reference to Exhibit 10.10 to Company's 10-K for 2013 filed April 15, 2014.
10.11 Premium Financing Agreement by Premium Assignment Corporation. Effective as of April 1, 2014 to April 1, 2015. Incorporated by reference to Exhibit 10.11 to Company's 10-Q for period ending March 30, 2014, filed May 20, 2014
10.12 - John F. Kennedy Airport - Terminal 4, Lease Agreement between JFK International Air Terminal, LLC and Baltia Air Lines, dated November 17, 2008, effective until terminated by either party. Incorporated by reference to Exhibit 10.12 to Baltia Air Lines Inc.'s report on Form 10-K for the year ended December 31, 2012.
10.12.1 - Certificate of Insurance, JFK International Air Terminal LLC insured, Terminal 4 Leased space to Baltia Air Lines, Inc., effective April 1, 2014 to April 1, 2015. Incorporated by reference to Exhibit 10.12.1 to Company's 10-K for 2013 filed April 15, 2014.
10.13 - JFK Airport Building 151 Lease Agreement, between Japan Airlines Management Corp. and Baltia Air Lines, effective on September 1, 2011, valid through November 30, 2015. Incorporated by reference to Exhibit 10.13 to Baltia Air Lines Inc.'s report on Form 10-K for the year ended December 31, 2012 as filed April 16, 2013.
10.13.1 - Certificate of Insurance, Japan Airlines Management Corp. insured, Building 151 Sublease Agreement, effective April 1, 2014 to April 1, 2015. Incorporated by reference to Exhibit 10.13.1 to Company's 10-K for 2013 filed April 15, 2014.
10.14 - Willow Run Airport facility lease between Wayne County Airport Authority and Baltia Air Lines, effective from June 1, 2013 until May 31, 2015. Incorporated by reference to Exhibit 10.14 to Company's 10-Q for 3rd quarter 2013 filed November 19, 2013.
10.14.1 - Amendment to Willow Run Airport facility lease, effective October 13, 2013 to May 31, 2015. Incorporated by reference to Exhibit 10.14.1 to Company's 10-Q for 3rd quarter 2013 filed November 19, 2013.
10.14.2 - Amendment to Willow Run Airport facility lease, effective February 2013 to May 21, 2015. Incorporated by reference to Exhibit 10.14.2 to Company's 10-Q for 3rd quarter 2013 filed November 19, 2013.
10.14.3 - Certificate of Insurance, Wayne County Airport Authority insured, Airport Premises, effective April 1, 2014 to April 1, 2015. Incorporated by reference to Exhibit 10.14.3 to Company's 10-K for 2013 filed April 15, 2014.
10.15 - Pulkovo Airport facility SubLease Agreement between LLC Northern Capital Gateway and Baltia Air Lines, effective from March 1, 2013, auto renewed unless objected to by Sublessor. Incorporated by reference to Exhibit 10.15 to Company's 10-Q for period ending March 30, 2014, filed May 20, 2014
10.16 - Contract affirmed by Board resolution affirming Agreements between the Company and its officers agreeing not to sell the shares issued to them until the Company receives FAA Certification and commence its revenue flights. Incorporated by reference to Exhibit 10.16 to Baltia Air Lines Inc.'s report on Form 10-K for the year ended December 31, 2012.
10.17 - Purchase of Cessna Citation 500 aircraft N606KR. Incorporated by reference to Form 8-K filed May 21, 2013.
10.17.1 - Certificate of Insurance, Baltia Air Lines, Inc. insured, Cessna 500 N606KR to July 26, 2014. Incorporated by reference to Exhibit 10.17.1 to Company's 10-Q for 3rd quarter 2013 filed November 19, 2013. (NOTE: Aircraft currently not being operated.)
10.18 - Loan Agreement (amended) dated October 14, 2013 between Baltia Air Lines, Inc. and Eastern Construction & Electric, Inc. for purchase of Boeing 747 aircraft. Incorporated by reference to Exhibit 10.18 to Company's 10-Q for 3rd quarter 2013 filed November 19, 2013.
10.19 - Flight Training Agreement Aircraft Type B747-200 between Kalitta Air, LLC and Baltia Air Lines, Inc. effective October 10, 2013 to December 31, 2014. Incorporated by reference to Exhibit 10.19 to Company's 10-Q for 3rd quarter 2013 filed November 19, 2013. (NOTE: Contract completed)
10.20 - B747 Aircraft Hull and Liability Binder - Renewal, Registration N706BL, Meadowbrook Insurance Group, effective April 1, 2014 to April 1, 2015. Incorporated by reference to Exhibit 10.20 to Company's 10-K for 2013 filed April 15, 2014.
10.21 - Purchase Report - T-500 A/C Tractor, Costal Engine Service (2013) Incorporated by reference to Exhibit 10.21 to Company's 10-K for 2013 filed April 15, 2014.
10.22 - Loan Agreement - Legal services rendered by International Business Law Firm PC to Baltia Air Lines, executed June 30, 2014. Incorporated by reference to Exhibit 10.22 to Company's 10-K for 2013 filed April 15, 2014.
10.23 - Workers Compensation and Employer Liability Insurance - CHUBB Group to Baltia Air Lines, executed June 30, 2014, effective February 6, 2014 to February 6, 2015. Incorporated by reference to Exhibit 10.23 to Company's 10-Q for period ending March 30, 2014, filed May 20, 2014.
10.24 – Cargo Handling at JFK – Cargo Airport Services USA and Baltia, valid to 1 January 2017 and continued annually until one party serves the other party with written notice not to renew. Incorporated by reference to Exhibit 10.24 to Company's 10-Q for period ending June 30, 2014, filed November 19, 2014.
10.25 - Security Service at JFK – FJC Security Services, Inc., valid to 9/18/15 with automatic annual renewal unless one party serves the other party with written notice not to renew. Incorporated by reference to Exhibit 10.25 to Company's 10-Q for period ending June 30, 2014, filed November 19, 2014.
10.26- Ground Handling at JFK - Swissport Agreement, Standard IATA Agreement of 1998 Ramp and Passenger Handling valid to May 16, 2017. Incorporated by reference to Exhibit 10.26 to Company's 10-Q for period ending June 30, 2014, filed November 19, 2014.
10.27- Maintenance Services Agreement, Standard IATA Agreement of 1998 with F&E Maintenance valid to May 16, 2017. Incorporated by reference to Exhibit 10.27 to Company's 10-Q for period ending June 30, 2014, filed November 19, 2014.
10.28 - Jeppessen Sanderson, Inc. Services Agreement dated February 3, 2014 effective to February 3, 2019, automatic extension for one-year additional terms unless terminated as provided.
10.29 - 121 Inflight Catering, Inc., Services Agreement dated October 7, 2014 effective to October 7, 2015.
CERTIFICATIONS
31.1 Certification by Chief Executive Officer and Chief Financial Officer pursuant to Sarbanes-Oxley Section 302, provided herewith.
32.1 Certification by Chief Executive Officer and Chief Financial
Officer pursuant to 18 U.S. C. Section 1350, provided
herewith.
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned thereunto duly authorized.
Baltia Air Lines, Inc.
Date: April 15, 2015
/s/ Igor Dmitrowsky
By: Igor
Dmitrowsky, President, CEO and CFO
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
SIGNATURE |
TITLE |
DATE |
/s/ Igor Dmitrowsky |
Chairman, CEO and
CFO |
April 15, 2015 |
/s/ Walter Kaplinsky |
Secretary and Director |
April 15, 2015 |
/s/ Andris Rukmanis |
V.P. Europe and Director |
April 15, 2015 |
/s/ Vick Luis Bolanos |
Director |
April 15, 2015 |
Exhibit 31.1
BALTIA
AIR LINES INC.
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION
1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, Igor Dmitrowsky, certify that:
1. I have reviewed this annual report on Form 10-K of Baltia Air Lines, Inc.;
2. Based on my knowledge, this 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 report;
3. Based on my knowledge, the financial statements, and other financial information included in this 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 report;
4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a- 15(f) and 15d-15(f))for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: April 15, 2015
/s/ Igor Dmitrowsky
Chairman, CEO and CFO April 15, 2015
Igor Dmitrowsky
(Principal Executive Officer)
/s/ Igor Dmitrowsky
Chairman, CEO and CFO April 15, 2015
Igor Dmitrowsky
(Principal Accounting Officer)
EXHIBIT 32.1
BALTIA AIR LINES, INC.
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION
1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report for Baltia Air Lines, Inc. (the "Company") on Form 10-K for the period ended December 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the Report),
I, Igor Dmitrowsky, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
A signed original of this written statement required by Section 906 has been provided to Baltia Air Lines, Inc. and will be retained by Baltia Air Lines, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
Date: April 15, 2015
/s/Igor Dmitrowsky
Chairman, CEO and CFO April 15, 2015
Igor Dmitrowsky
(Principal Executive Officer)
/s/ Igor Dmitrowsky
Chairman, CEO and CFO April 15, 2015
Igor Dmitrowsky
(Principal Accounting Officer)