UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to __________
Commission File Number: 333-28249
PRIME AIR, INC.
(Exact name of Registrant as specified in charter)
NEVADA Applied For
State or other jurisdiction of I.R.S. Employer I.D. No.
incorporation or organization
8598 112 STREET, FT. SASKATCHEWAN, ALBERTA, CANADA T8L 3V8
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (403) 998-3400
Check whether the Issuer (1) has 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 fling requirements for the past 90 days. (1) Yes
[X] No [ ] (2) Yes [X] No [ ]
State the number of shares outstanding of each of the Issuer's classes of
common equity as of the latest practicable date: At August 17, 1999, there
were 19,647,560 shares of the Registrant's Common Stock outstanding.
PART I
ITEM 1. FINANCIAL STATEMENTS
The financial statements attached hereto and included herein have been
prepared without audit pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted.
However, in the opinion of management, all adjustments (which include only
normal recurring accruals) necessary to present fairly the financial position
and results of operations for the periods presented have been made. The
results for interim periods are not necessarily indicative of trends or of
results to be expected for the full year. These financial statements should
be read in conjunction with the financial statements and notes thereto
included in the Company's annual report on Form 10-KSB for the year ended
December 31, 1998.
<PAGE>
Koch & Associates
_________________________________________
Ste 601 - 938 Howe Street, Vancouver, B.C. V6Z 1N9 Tel (604)684-5700 Fax
(604)684-7211
NOTICE TO READER
We have compiled the consolidated balance sheets of Prime Air Inc., a
Nevada company, as at June 30, 1999 and consolidated statements of
operations, shareholders' equity and deficit and cash flows for the six month
period then ended from information provided by management. We have not
audited, reviewed or otherwise attempted to verify the accuracy or
completeness of such information. Readers are cautioned these statements may
not be appropriate for their purposes.
"Koch & Associates"
August 12, 1999 Certified Management Accountants
Vancouver, B.C.
<PAGE>
PRIME AIR INC.
(A Development Stage Company)
(A Nevada Corporation)
Consolidated Financial Statements
June 30, 1999 and 1998 and December 31, 1998
(Unaudited - See Notice to Reader)
Notice to Reader
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Shareholders' Equity and Deficit
Consolidated Statements of Cash Flows
Notes to the Consolidated Financial Statements
<PAGE>
PRIME AIR, INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
(all figures in US dollars)
(UNAUDITED - SEE NOTICE TO READER)
June 30, 1999
(Unaudited)
ASSETS
Current Assets
Cash and short-term deposits $ 536
Prepaid expenses and deposit -
GST recoverable 7,250
7,786
Capital Assets (Note 1) 582,506
$ 590,292
LIABILITIES
Current Liabilities
Accounts payable and accruals $ 135,134
Notes and advances payable 16,144
Notes and advances from related parties -
151,278
SHAREHOLDERS' EQUITY
Capital Stock
Authorized:
50,000,000 common shares with
a stated par value of $ .001/share
3,000,000 preferred cumulative
convertible shares with a stated
par value of $ .001/share
Issued:
19,647,560 common shares 19,648
(June 30, 1998 17,658,310; December 31, 1998
18,013,110)
Share subscription receivable -
Capital in excess of par value 1,507,873
1,527,521
Accumulated Deficit During
Development Stage (1,088,507)
439,014
$ 590,292
Approved on Behalf of the Board:
Director
Director
See Accompanying Notes
<PAGE>
PRIME AIR, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(all figures in US dollars)
(UNAUDITED - SEE NOTICE TO READER)
Six Six Six Six Period from
Months Months Months Months Inception
Ended Ended Ended Ended on March 10, 1989
June 30 June 30 June 30 June 30 to June 30
1999 1998 1999 1998 1999
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
(Note 1)
Direct Costs
Flight operations $ - $ - $ - $ - $ 114,720
Administrative and
General
Audit and accounting 505 1,511 (782) 1,511 78,389
Advertising - - - - 13,043
Amortization 10,337 9,958 5,169 4,310 74,728
Automotive - 1,884 - 1,884 19,164
Bad debts - - - 0 1,933
Consulting fees 24,820 6,492 21,521 6,492 129,050
Insurance 3,203 1,858 1,602 (119) 23,828
Interest and service
charges 40 307 (25) 307 10,646
Legal 58,677 5,801 37,719 2,215 128,319
Management
remuneration - - - - 77,287
Office and general 539 9,343 401 6,765 160,296
Rent - airport facility - - - 7,268 34,670
Repair and maintenance - - - - 5,047
Telephone and utilities 6,819 11,613 4,098 5,588 77,660
Transfer agent and
filing fees 4,264 13,547 4,164 10,003 42,954
Travel, promotion and
entertainment - 13,741 - 3,308 107,706
109,204 76,055 73,867 49,532 984,720
Other Income (Expense)
Gain (loss) on
foreign exchange
conversion 884 (20,443) (8,987) (20,443) 4,554
Interest income - 187 - 187 6,379
884 (20,256) (8,987) (20,256) 10,933
Net Loss $ (108,320) $ (96,311) $(82,854) $ (69,787) $1,088,507
Net Loss Per
Common Share $ (0.0057) $ (0.0059) $(0.0051) $ (0.0040)
Weighted Average
Common Shares
Outstanding 19,102,743 16,350,015 16,350,015 16,350,015
(Giving effect to 2:1 share split)
See Accompanying Notes
PRIME AIR, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(all figures in US dollars)
(UNAUDITED - SEE NOTICE TO READER)
Period from
Date of
Inception
Six Months Six Months on March 10, 1989
Ended June 30 Ended June 30 to June 30
1999 1998 1999
(Unaudited) (Unaudited) (Unaudited)
(Note 1)
NET INFLOW (OUTFLOW) OF CASH
RELATED
TO THE FOLLOWING ACTIVITIES:
OPERATING
Net loss $ (108,320) $ (96,311) (828,919)
Non-cash charge -
amortization 10,337 9,958 43,721
(97,983) (86,353) (785,198)
Change in non-cash working
capital balances relating
to operations 56,686 20,816 82,068
(41,297) (65,537) (703,130)
FINANCING
Notes and advances payable (93,610) - 3,495
Notes and advances from
related parties - - 5,400
Issue of capital stock 128,010 - 1,362,860
34,400 0 1,371,755
INVESTING
Acquisition of capital assets - - (657,237)
NET CASH INFLOW (OUTFLOW) (6,897) (60) 11,388
CASH, BEGINNING OF PERIOD 7,433 11,388 -
CASH, END OF PERIOD $ 536 $ 11,328 $ 11,388
See Accompanying Notes
<PAGE>
PRIME AIR INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1999
(Unaudited - See Notice to Reader)
1. Capital Assets June 30 June 30
1999 1998
Accumulated Net Book Net Book
Cost Amortization Value Value
Air terminal construction costs $ 652,084 $ 72,085 $ 579,998 $ 558,385
Furniture and equipment 5,153 2,646 2,508 1,044
$ 657,237 $ 74,731 $ 582,506 $ 559,428
<PAGE>
ITEM 2. MANAGEMENT'S PLAN OF OPERATION
The Company is a development stage company and conducts all operations
through its wholly owned subsidiary, Prime Air (BC). The Company has had no
material revenues in the past. Operations are expected to commence in late
1999 or early 2000.
During the last four years, the operations of the Company have been
funded from equity participation of the owners. Total cash raised from equity
funding from March 1992 to December 31, 1994 was $349,808, $131,755 for 1995
and $756,763 for 1996. No funds were raised during 1997, but the Company did
convert $130,751 of debt into common stock of the Company. No debt was
converted during 1998. In the six months ended June 30, 1999, the Company
converted debt of $128,010 into common stock of the Company.
The Company has realized a cumulative loss of $1,088,507 since March
1992, and anticipates similar losses until operations begin.
The Company presently has no cash on hand to allow operations to
commence. The Company expects to pay approximately $90,000 to cover legal,
insurance, and other essential expenses during the next 12 months whether
operations commence or not.
Prime Air (BC)'s sole fixed obligation is the payment of $100 CAD per
annum to the Village of Pemberton under the terms of its Airport Lease and
Operating Agreement.
The Company proposes to raise a minimum of $3,000,000 and a maximum of
$6,000,000 during the next year. However, there is no assurance that the
Company will be able to raise such funds during the next year. This funding
will provide sufficient cash to start operations, make capital improvements to
the Pemberton Airport and terminal building, and sustain flight operations for
some time.
An agreement dated October 30, 1998, was signed between the Company and
Chanen Painter & Company Limited, Investment Bankers to attempt to raise
capital on behalf of the Company.
Should operations commence, the Company anticipates hiring approximately
six full-time employees during the next 12 months.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
PRIME AIR, INC.
Date: August 18, 1999 By /s/ Blaine Haug, President
Date: August 18, 1999 By /s/ Greg Duffy, Principal
Financial and Accounting Officer
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<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 536
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 7,786
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 151,278
<BONDS> 0
0
0
<COMMON> 19,648
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 590,292
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 109,204
<OTHER-EXPENSES> 884
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (108,320)
<INCOME-TAX> (108,320)
<INCOME-CONTINUING> (108,320)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (108,320)
<EPS-BASIC> 0
<EPS-DILUTED> 0
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