UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-KSB ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999 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 Securities Registered: 12 G #O-28502, SB-2 Registration Statement No.333-20006-NY, DESCRIPTION OF SECURITIES The authorized capital stock of the Company consists of 100,000,000 shares of Common Stock, $.0001 par value per share, and 500,000 shares of Preferred Stock, $.01 par value. As of December 31, 1999, a total of 3,982,552 shares of Common Stock are issued and outstanding and held by over 100 shareholders. At total of 275,250 shares of Preferred Stock are issued and outstanding. No stock was issued under 333-21006-NY and all securities registered therein are carried forward into Registration 333-37409, a firm commitment offering. Registration 333-37409 was effective 2/12/99 and, thereafter, stock reverted back to the Company when all public purchases from the underwriter's inventory were denied clearance by the clearing agency arbitrarily and without notice or rationale. The Company brought suit. Common Stock All outstanding shares of Common Stock are, and the shares offered hereby will be, duly authorized, validly issued, fully paid and non-assessable. Holders of Common Stock are entitled to receive dividends, when and if declared by the board of directors, out of funds legally available therefor and, subject to prior rights of holders of any Preferred Stock then outstanding, if any, to share rateably in the net assets of the Company upon liquidation. Holders of Common Stock do not have preemptive or other rights to subscribe for additional shares, nor are there any redemption or sinking fund provisions associated with the Common Stock. The Certificate of Incorporation does not provide for cumulative voting. Shares of Common Stock have equal voting, dividend, liquidation and other rights, and have no preference, exchange or appraisal rights. Lack of Control by Minority Shareholders Holders of shares of Common Stock are entitled to one vote per share on all matters requiring a vote of stockholders. Since the Common Stock does not have cumulative voting rights in electing directors, the holders of a majority of the outstanding shares of Common Stock voting for the election of directors can elect all of the directors, excepting one board seat reserved for the Underwriter's nominee for three years. Stock Transfer Agent The Transfer Agent and Registrar for the shares of Common Stock is Continental Stock Transfer and Trust Company, 17 Battery Place, 8th Floor, New York, NY 10004, telephone: (212) 509-4000. Warrants The Company registered Redeemable Purchase Warrants, effective February 12, 1999. None have been issued. Purchase and Sale of Warrants No assurance can be given that a trading market for the Warrants will develop, or if one does develop, whether it will sustain or at what price the Warrants will trade. Representative's Warrants No Representative's Warrants were issued. Preferred Stock The Company has authorized 500,000 Preferred Shares which may be issued from time to time, as authorized by the board of directors. Preferred shares have $.01 par value and no voting rights. As of the present date 275,250 shares of Preferred Stock are outstanding. BALTIA IS A CORPORATE ISSUER The number of shares outstanding of each of the issuer's classes of common equity, as of December 31, 1999: Class Number of Shares Common Stock Par Value $.0001 Per Share 3,985,552 Preferred Stock Par Value $.10 Per Share 275,250 Transitional Small Business Disclosure Format (Check one): No X DOCUMENTS INCORPORATED BY REFERENCE 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 and Yes X . Required reports filed herewith. Baltia's Initial Public Offering Registration Statement became effective September 16, 1996. This is the third annual report to which Baltia is subject to filing under Section 13 or 15(d) of the Exchange Act. Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of the Form 10-KSB or any amendment to this Form 10-KSB. X Baltia has not commenced revenue operations to date. State issuer's revenues for its most recent fiscal year. $ -0- State the aggregate market value of the voting stock held by non-affiliates computed by reference to the price at which the stock was sold, or the average bid and asked prices of such stock, as of a specified date within the past 60 days. To date, Baltia stock is not publicly trading. PART I Item 1. Description of Business. The Company was organized in the State of New York, August 24, 1989 to provide air transportation to Russia and, then, Soviet Union countries. For two of the past three years, the Company was preparing authorities, licenses, personnel, equipment, and financing to commence flight operations. At the beginning of this year the Company had all variable in place and needed only working capital to meet the U.S. Department of Transportation's regulatory requirement, i.e. cash equal to an average 1/4 of total annual expenses assuming zero revenue on the proposed Boeing 747 nonstop flights between New York and St. Petersburg, Russia. This amount was to be obtained from the Company's Initial Public Offering. The underwriter had indications for the full offering and offered the full amount of the offering to his exclusive clearing agency. The tender was refused. The clearing agency, a division of CIBC Oppenheimer Corp., selectively and without rationale or notice arbitrarily refused access to clear the Company's registered stock. Without the required working capital, the Company was unable to commence revenue flights. The Company was unable to meet its monthly airplane payments, and moved its offices from its airport operations base. The US Department of Transportation terminated the Company's route authority without prejudice to reapply when financing was in hand. Twelve Month Plan The Company will proceed with obtaining alternate funds by which to effect its plan to initiate nonstop direct flights between new York and St. Petersburg, Russia, using Boeing 747 aircraft to carry three-class passengers, cargo and mail as has been fully described in Registration Statement 333-037409. If funding is obtained within the next twelve months, the Company will resume its flight operations plan. Concurrently, the company will seek resolution through the courts and/or agencies to prevent any clearing agency from selectively and arbitrarily refusing the Company access to clear trade of its registered securities. 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 incurred in developing another approach to alternate funding and in supporting the suit against CIBC. The Company plans no product research or development at this time and no equip purchases or sales. There is no significant change, and none expected, in the personnel disclosed in Registration Statement 333-37409. The change in aggregate financial data during this year reflects the relatively small administrative costs that were incurred and added to the pre-launching costs disclosed in the Registration Statement 333-37409. Item 2. Description of Property. During this year the Company terminated its contract for the lease-purchase of one Boeing 747 aircraft, obtained for the purpose of its initial revenue operations, due to the actions of CIBC Oppenheimer as described above. Without revenue flights, the Company could not maintain payments for the Boeing 747 aircraft. The Company maintains administrative equipment, desks, files, phones, fax, copier, computers, and printers. Item 3. Legal Proceedings. During this year, the Company brought suit against CIBC Oppenheimer Corp and its parent, the Canadian Imperial Bank of Commerce for damages caused when they caused their clearing agency to arbitrarily deny the Company access to clearance services in connection with the Company's Initial Public Offering. Defendants CIBC responded to the Company's complaint with a motion for summary judgment. The New York Supreme Court, First Department granted the motion and dismissed the suit with prejudice. The Company appealed and is awaiting a decision. Item 4. Submission of Matters to a Vote of security Holders. The Annual Shareholders Meeting and Meeting of the Board of Directors were held on August 24, 1999. Reports of these meeting are detailed on the Company's Form 10-QSB for the quarter ending September 30, 1999. At that meeting the Shareholders had authorized issuance of of 40,000 shares of common stock to E.S.P. Das at par value under exemption 4(6) which were subsequently issued on December 4, 1999. The Shareholders also authorized the replacement of certificates 211, 222, 236 to Walter Comer, Jr. Trust. PART II. Item 5. Market for Common Equity and Related Stockholder Matters. All stock authorized by the Shareholders at their August 24, 1999 Annual Meeting have been issued. The Company's 10-QSB report for September 1999 lists all persons receiving stock in the third quarter. The persons named in item 4 above received common stock during the 4th quarter of 1999. Item 6. Management's Discussion and Analysis or Plan of Operation. Please see Item 1. above. Item 7. Financial statements. WANT & ENDER C.P.A. P.C. Certified Public Accountants MARTIN ENDER CPA STANLEY Z. WANT CPA CFP Independent Auditor's Report To the Shareholders' and Board of Directors of: Baltia Air Lines, Inc 63 25 Saunders Street, #7I Rego Park, NY 11374 We have audited the accompanying balance sheets of Baltia Air Lines, Inc. as at December 31, 1999 and 1998 and the related statements of operations, retained earnings and cash flows for the years then ended. These financial statements are the responsibility of the management. Our responsibility is to express an opinion on these financial statements based on our audit. We have conducted our audit in accordance with generally accepted auditing standards. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit also includes examining on a test basis evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above, present fairly, in all material respects, the financial position of Baltia Air Lines, Inc. at December 31, 1999 and 1998, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. Baltia Air Lines, Inc. has not estimated the remaining lives and replacement costs of the common property and, therefore, has not presented the Supplementary Information on Future Major Repairs and Replacements that the American Institute of Certified Public Accountants has determined is required to supplement, although not required to be a part of, the basic financial statements. Martin Ender Want & Ender CPA, P.C. Certified Public Accountants New York, NY November 13, 2001 386 PARK AVENUE SOUTH - SUITE 1618 NEW YORK, NY 10016 TEL 212.684.2414 - FAX 212 684-5433 - EMAIL: WECPAPC@SPRYNET.COM BALTIA AIR LINES, INC. BALANCE SHEETS DECEMBER 31, 1999 and 1998 (Audited) 1999 1998 Current Assets Cash $ 2,935 $ 2,202 Total Current Assets $ 2,935 $ 2,202 Fixed Assets Property, Plant and Equipment Property, Plant and Equipment 89,656 89,656 Less: Accumulated Depreciation (19,212) (6,404) Net Property, Plant and Equipment 70,444 83,252 Other Assets Premedia Costs 264,060 496,090 Total Other Assets 264,060 496,090 TOTAL ASSETS $ 337,439 $ 581,544 The accompanying notes are an integral part of the financial statements. BALTIA AIR LINES, INC. BALANCE SHEETS DECEMBER 31, 1999 and 1998 (Audited) 1999 1998 Current Liabilities Accounts Payable $ 59,568 $ 571,154 Total Current Liabilities 59,568 $ 571,154 Other Liabilities Officers Loan 122,000 368,890 Total Other Liabilities 122,000 368,890 Stockholders Equity Common Stock - 399 204 (100,000,000 shares authorized, 3,982,552 issued) Preferred Stock - 2,753 800 (2,000,000 shares authorized, 275,250 shares issued) Paid-in-Capital 7,933,825 7,870,179 Prepaid Media Costs 0 0 Retained Earnings (7,481,005) (7,471,207 Less: Treasury Stock (100) 0 Total Stockholders Equity 155,871 (399,976) TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 337,439 $ 581,644 The accompanying notes are an integral part of the financial statements. BALTIA AIR LINES, INC. STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY FOR THE YEAR ENDED DECEMBER 31, 1999 (Audited) Preferred Stock Common Stock Additional Paid- Shares Par Value Shares Par Value In Capital Balance as at December 31, 1998 80,000 $ 800 2,035,416 $ 204 $ 7,870,179 1999 Issuance of Preferred Stock 195,250 1,953 - - - 1999 Issuance of Common Stock - - 1,947.136 195 63,646 Balance as at December 31, 1999 275,250 2,753 3,982,552 399 7,933,825 The accompanying notes are an integral part of the financial statements. BALTIA AIR LINES, INC. STATEMENTS OF INCOME AND EXPENSES YEARS ENDED DECEMBER 31, 1999 and 1998 (Audited) 1999 1998 Expenses Depreciation $ 12,808 $ 6,404 Interest Expense 0 850,000 General and Adm Expenses 164,960 0 Professional Fees 0 20,663 FAA Cert Fee 0 206,633 Media Costs 132,030 0 Total Expenses 309,798 1,083,700 Net Income (Loss) Before Income Taxes (309,798) (1,083,700) Income Taxes Federal Income Tax - - New Jersey Franchise Tax - - Total Income Taxes Net Income (Loss) For The Year $ (309,798) (1,083,700) The accompanying notes are an integral part of the financial statements. BALTIA AIR LINES, INC. STATEMENT OF CASH FLOW YEAR ENDED DECEMBER 31, 1999 (Audited) 1999 Cash Flows from Operations Net Income $ (309,798) Adjustments to reconcile net income to net cash provided by operations Depreciation 12,808 Change in Premedia costs 232,030 Change in Accounts Payable 0 Change in Officers Loan 0 Total Adjustments 244,838 Net Cash Provided by Operations (64,960) Cash Flows From Financing Activities Paid in Capital 63,645 Common Stock issued at par value 195 Preferred Stock issued at par value 1,953 Treasury Stock purchased (100) Net Increase (Decrease) in Cash Equivalents 733 Cash and Cash Equivalents - Beginning 2,202 CASH AND CASH EQUIVALENTS - ENDING 2,935 The accompanying notes are an integral part of the financial statements. BALTIA AIR LINES, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENT 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 assets and liabilities are computed based on temporary differences between the financial statement and income tax bases of assets and liabilities using the enacted marginal income tax rate in effect for the year in which the differences are expected to reverse. Deferred income tax expenses or credits are based on the changes in the deferred income tax assets or liabilities from period to period. 3. PROPERTY and EQUIPMENT Property and equipment at December 31, 1999 (audited) consisted of the following; Office Equipment $53,406 Furniture & Fixtures 6,782 Automobiles 29,465 Total 89,656 Less, Accumulated Depreciation (19,212) Total Property and Equipment $70,444 BALTIA AIR LINES, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENT 3. PROPERTY and EQUIPMENT (Continued) 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 December 3l, 1999 the Company has a net operating loss carry forward of $6,733,042, which is available to offset future taxable income. The Company is still liable for certain minimum state and city taxes. As of December 31, 1999, 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. BALTIA AIR LINES, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENT 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 December 3l, 1998, 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. BALTIA AIR LINES, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENT 7. STOCKHOLDERS DEFICIT - (CONTINUED) 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 8. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure. The Company had no audit performed at the close of 1998 and were resumed in fall 2001 with new accountants. The Company has no disagreements with either the accountants or financial disclosure. PART III Item 9. Directors, Executive officers, Promoters and Control Persons: Compliance With Section 16(a) of the Exchange Act. Compliance confirmed. MANAGEMENT Executive Officers and Directors The following table summarizes certain information with respect to the executive officers and directors of the board: Name Age Position Igor Dmitrowsky . . . . 44 President, CEO, Director of the Board Walter Kaplinsky . . . 60 Secretary and Director of the Board Andris Rukmanis . . . . 37 V.P. Europe and Director of the Board Anita Schiff-Spielman 44 Director of the Board Brian Glynn . . . . . . 53 Vice President Marketing Igor Dmitrowsky, President and Chief Executive Officer, founded the Company and served as Chairman of the Board from its inception in August 24, 1989 until 1998. Mr. Dmitrowsky, a US citizen, born in Riga, Latvia, attended the State University of Latvia from 1972 to 1974 and Queens College from 1976 through 1979. In 1979, he founded American Kefir Corporation, a dairy distribution company, which completed a public offering in 1986, and from which he retired in 1987. Mr. Dmitrowsky has financed aircraft and automotive projects, speaks fluent Latvian and Russian, and has traveled extensively in the republics of the former Soviet Union. In 1990, he testified before the House Aviation Subcommittee on the implementation of United States' aviation authorities by US airlines. Walter Kaplinsky, a US citizen, has been with the Company since 1990. In 1993, Mr. Kaplinsky became secretary and a director of the board. In 1979, together with Mr. Dmitrowsky, Mr. Kaplinsky was one of the co-founders of American Kefir Corporation, where from 1979 through 1982, Mr. Kaplinsky served as secretary and vice president. Mr. Kaplinsky is the owner of Globe Enterprises, Brooklyn, NY, a private company that exports to Russia. Brian Glynn, a US citizen, is V.P. of Marketing and Service. He joined the Company in 1990. Mr. Glynn has a background in marketing and public relations. From 1982 through 1989, Mr. Glynn was Vice President of American Kefir Corporation and was responsible for the introduction and marketing of the company's product in the New York market. Andris Rukmanis, a citizen of Latvia, is the Company's Vice President in Europe. Mr. Rukmanis joined the Company in 1989. In Latvia, Mr. Rukmanis has worked as an attorney specializing in business law. From 1988 through 1989, he was Senior Legal Counsel for the Town of Adazhi in Riga County, Latvia. From 1989 to 1990, he served as Deputy Mayor of Adazhi. Anita Schiff-Spielman, a US citizen, serves as a director of the board. She has been associated with the Company since its inception in 1989. Ms. Schiff-Spielman has owned Schiff Dental Labs, New York, NY, for the past fifteen years. Audit Committees The Audit Committee consists of Mr. Dmitrowsky, the Representative's Designee and Ms. Schiff-Spielman. The functions of the Audit Committee are to review with the Company's independent public auditors the scope and adequacy of the audit to be performed by such independent public auditors; the accounting practices, procedures, and policies of the Company; and all related party transactions. The Committee was formed in 1996. Audit Review by the Board New Nasdaq SmallCap standards require: 1) a minimum of 2 independent directors; and, (2) an audit committee, a majority of which are independent directors. The Company has a small Board consisting of four Directors, one of whom, Anita Schiff-Spielman, is independent and a member of the audit committee. One additional independent directorship position is reserved for the Representative's designee who will take a seat on the board and on the audit committee simultaneously with the IPO closing. Item 10. Executive Compensation. Management, Compensation. Employment Agreements The Company has no individual employment agreements. Compensation 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 the closing of financing sufficient to commence flight operations, the rate of compensation for the Company's executive officers is:(i) President $186,000, (ii) Vice President Marketing $82,000,and (iii) Vice President Europe $68,000. Pursuant to written agreement, the President's and Vice Presidents' salaries will be reduced to an amount equal to 50% of budgeted salary during the 90-day period commencing when said financing becomes available. Upon commencement of flight services 100% of respective budgeted salaries will be paid. To this date, the Company has paid officers no salaries. Board directors are not presently compensated and shall receive no compensation prior to commencement of revenue service. Item 11. Security Ownership of Certain Beneficial Owners and Management. Principal Stockholders. PRINCIPAL STOCKHOLDERS The following table sets forth, as of December 31, 1999, 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 sole voting and investment power with respect to all shares shown as beneficially owned by such person. Common Shares Beneficially Owned Percent of Total Directors and Officers Igor Dmitrowsky . . . . . . 2,092,975 53.03% 63-26 Saunders St., Suite 7I Rego Park, NY 11374 Walter Kaplinsky . . . . . 321,042 8.13% 2000 Quentin Rd. Brooklyn, NY 11229 Brian Glynn . . . . . . . . 91,666 2.32% 148 Claremont Rd. Bernardsville, NJ 07924 Andris Rukmanis . . . . . . 81,250 2.06% Kundzinsala, 8 Linija 9. Riga, Latvia LV-1005 Anita Schiff-Spielman . . . 1,874 0.05% 1149 Kensington Rd. Teaneck, NJ 07666 Counsel Steffanie J. Lewis . . . . . 558,750 14.16% 3511 North 13th St. Arlington, VA 22201 Item 12. Certain Relationships and Related transactions. Certain Transactions. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS With the exception of shares identified in the Company's Form 10-QSB for the third quarter and in Item 3. above, no officers or directors hold Company shares purchased since March 4, 1995, i.e. within one year of the Company's filing its initial registration of this Offering. All securities previously purchased by officers and directors were purchased for fair market value at the time they were purchased. Excepting Management Stock Options and the Company's renting office space from its president prior to moving to JFK, no transaction exists between officers and the Company or affiliates of either, and there are no incentive plans. Options to purchase an equal number of common shares at par value were authorized by the Shareholders on August 24, 1999 and subsequently issued to Igor Dmitrowsky - 800,000; Steffanie Lewis - 300,000; Walter Kaplinsky - 200,000; Richard Charbit - 350,000. Item 13. Intentionally omitted. SIGNATURES In accordance with Section 13 or 15(d) 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: 12-14-2001 _______ IGOR DMITROWSKY _______ By: Igor Dmitrowsky, President Date: 12-14-2001 _______ WALTER KAPLINSKY ______ By: Walter Kaplinsky, Secretary [bltk99.wpd/2001-12-14] (1) The by-laws limit the number of directors on the board to a maximum of four, with a provision that an additional seat on the board is created for the Lead- Manager's designee for a period of five years, at the option of the Representative. Officers and Directors have a one year term and are elected at, and after, the Annual Meeting in August.