U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended December 31, 1999
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 333-70437
Cardinal Airlines, Inc.
(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 59-3492127
(State of incorporation) (I.R.S. Employer Identification No.)
1380 Sarno Road, Suite B
Melbourne, FL 32935
(Address of principal executive offices)
Registrant's telephone number: 407-757-7388
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. Yes X No
The number of shares of the registrant's common stock, par value $0.01 per
share, outstanding as of December 31, 1999 was 2,033,900.
<PAGE>
Cardinal Airlines, Inc.
Index to Form 10QSB
Part I - Financial Information Page
Item 1. Financial Statements (unaudited)
Condensed Balance Sheet - December 31, 1999...............................1
Condensed Statements of Operations - Three Months
and Six Months Ended December 31, 1999 and 1998
and for the period February 10, 1997 (Date of
Inception) through December 31, 1999......................................2
Condensed Statements of Cash Flows - Six Months Ended
December 31, 1999 and 1998 and for the period
February 10, 1997 (Date of Inception) through December 31, 1999...........3
Notes to Condensed Financial Statements...................................5
Item 2. Management's Discussion and Analysis or Plan of Operations.........12
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K...................................15
Signatures..................................................................16
Exhibit Index...............................................................17
<PAGE>
Part I Financial Information
Item 1. Financial Statements
CARDINAL AIRLINES, INC.
(A Development Stage Company)
BALANCE SHEETS
<TABLE>
<CAPTION>
For the three months ended
December 31
1999 1998
------------ ------------
CURRENT ASSETS
<S> <C> <C>
Cash $ 1,933 $ 30,351
Interest Receivable 11,427 3,872
------------- --------------
TOTAL CURRENT ASSETS 13,360 34,223
PROPERTY AND EQUIPMENT, net 6,566 7,249
DEPOSITS 4,200 3,830
------------- --------------
TOTAL ASSETS $ 24,126 $ 45,302
============= ==============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 41,277 $ -
-
------------- --------------
TOTAL LIABILITIES $ 41,277 -
COMMITMENTS 0 0
------------- --------------
TOTAL LIABILITIES AND COMMITMENTS $ 41,277 $ -
============= ==============
TOTAL STOCKHOLDERS' EQUITY, (DEFICIT)
including deficit accumulated during the
development stage of $333,705 (17,151) 45,302
------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 24,126 $ 45,302
============= ==============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
- 1 -
<PAGE>
CARDINAL AIRLINES, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
FEBRUARY 10, 1997 FOR THE THREE MONTHS ENDED
(INCEPTION) TO DECEMBER 31
DECEMBER 31, 1999 1999 1998
<S> <C> <C> <C>
-------------- ---------------- ------------------
REVENUES $ - $ - $ -
-------------- ---------------- ------------------
EXPENSES
Consulting Fees 194,869 4,600 24,300
Professional Fees 172,638 16,401 10,314
Rent 37,365 4,770 2,915
Supplies 20,398 300 488
Utilities 17,581 3,750 1,639
Depreciation and amortization 5,090 512 1,197
Miscellaneous 10,938 833 2,808
Taxes 366 125 -
-------------- ---------------- -----------------
459,245 31,291 43,660
OTHER INCOME
Interest Income 11,427 1,331 1,936
-------------- ---------------- -----------------
NET (LOSS) before provision for
income taxes $ (447,818) $ (29,960) $ (41,724)
Provision for Income Taxes - - -
-------------- ---------------- -----------------
NET (LOSS) $ (447,818) $ (29,960) $ (41,724)
============== ================ =================
Net loss per share $ (0.22) $ (0.01) $ (0.02)
============== ================ =================
Shares used in computing net
loss per share 2,033,900 2,033,900 1,712,400
============== ================ =================
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 2 -
<PAGE>
CARDINAL AIRLINES, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOW
<TABLE>
<CAPTION>
FEBRUARY 10, 1997 FOR THE THREE MONTHS ENDED
(INCEPTION) TO DECEMBER 31
DECEMBER 31, 1999 1999 1998
-------------------- ----------------- ----------------
<S> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Cash paid for operating expenses $ (447,818) $ (29,960) $ (42,464)
--------------- --------------- ----------------
NET CASH USED IN OPERATING
ACTIVITIES: (447,818) (29,960) (42,464)
--------------- --------------- ----------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of property and equipment (11,664) 0 0
Increase in security deposits (4,200) 0 0
--------------- --------------- ----------------
NET CASH USED IN INVESTING
ACTIVITIES (15,864) 0 0
--------------- --------------- ----------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Issuance of common stock 375,079 57,536
Increase in notes receivable -
related parties 37,077 1,000
Payments on notes receivable -
related parties 53,459 30,859 -
--------------- --------------- ----------------
NET CASH PROVIDED BY FINANCING
ACTIVITIES 465,615 30,859 58,536
--------------- --------------- ----------------
NET INCREASE (DECREASE) IN CASH 1,933 899 16,072
CASH AT BEGINNING OF PERIOD - 1,034 14,279
--------------- --------------- ----------------
CASH AT END OF PERIOD $ 1,933 $ 1,933 $ 30,351
=============== =============== ================
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 3 -
<PAGE>
CARDINAL AIRLINES, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOW
<TABLE>
<CAPTION>
FEBRUARY 10, 1997 FOR THE THREE MONTHS ENDED
(INCEPTION) TO DECEMBER 31
DECEMBER 31, 1999 1999 1998
-------------------- ----------------- -----------------
RECONCILIATION OF NET LOSS TO NET
CASH USED IN OPERATING ACTIVITIES:
<S> <C> <C> <C>
Net loss $ (454,155) $ (30,779) $ (42,463)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Depreciation and amortization 5,090 512 1,197
Increase in receivables (11,427) (1,331) (1,936)
--------------- --------------- ----------------
NET CASH USED IN
OPERATING ACTIVITIES $ (447,818) $ (29,960) $ (41,724)
=============== =============== ================
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 4 -
<PAGE>
CARDINAL AIRLINES
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A) NATURE OF OPERATIONS
The planned principal business activity of Cardinal Airlines,
Inc. ("Company") is to provide commercial airline service to
and from major airports throughout the eastern United States
with operations based in Melbourne, Florida.
B) CASH AND CASH EQUIVALENTS
For purposes of the statements of cash flows, the Company
considers all highly liquid debt instruments purchased with
an original maturity of three months or less to be cash
and/or cash equivalents.
C) PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation
computed using the straight-line method over the assets'
expected useful lives. Leasehold improvements are amortized
over the lessor of the term of the lease or the assets'
expected useful lives.
D) MANAGEMENT ESTIMATES
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
assets and liabilities. Actual results could differ from
these estimates.
E) INCOME TAXES
Deferred income taxes arise from the expected tax consequence
of temporary differences between the carrying amounts and the
tax basis of certain assets and liabilities. The differences
result primarily from different depreciation methods on
property and equipment.
F) ORGANIZATION COSTS
Organization costs consist of expenses related to the
start-up of the Company. These costs are expensed as incurred
in accordance with Statement of Position 98-5, "Reporting on
the Costs of Start-Up Activities" (SOP 98-5).
- 5 -
<PAGE>
CARDINAL AIRLINES
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT.
G) EARNINGS PER SHARE
The Company adopted Statement of Financial Accounting
Standards (SFAS) No. 128, "Earnings Per Share" (SFAS 128)
effective February 10, 1997 (Inception). As such, net loss
per share is computed using the weighted average number of
common shares outstanding during the period. Pursuant to the
Securities and Exchange Commission Staff Accounting Bulletins
and Staff Policy, such computations include all common and
equivalent shares issued as if they were outstanding for all
periods presented. Common equivalent shares consist of the
incremental common shares issuable upon the conversion of the
convertible preferred stock (using the if converted method).
The Series A Preferred Stock issued has no preferences other
than voting rights over the common stock and no dividend
payment arrangements. The preferred stock has no effect in
arriving at income available to common shareholders in
computing earnings per share.
H) NEW ACCOUNTING STANDARDS
There have been no new significant accounting pronouncements
issued for the three month period ended Sept 30, 1999 that
would have a direct material effect on the financial
statements, except for Statement of Position 98-5, "Reporting
on the Costs of Start-Up Activities" (SOP 98-5) which is
addressed in NOTE 1F.
NOTE 2 - DEVELOPMENT STAGE OPERATIONS
The Company was formed February 10, 1997, and began
operations April 1, 1997. Through December 31, 1999,
operations have been devoted primarily to raising capital,
negotiating leasing of airplanes, related equipment, and
related facilities as well as the performance of general
administrative functions. As of December 31, 1999, the
Company has Sixty-Two Stockholders.
- 6 -
<PAGE>
CARDINAL AIRLINES
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 3 - PROPERTY AND EQUIPMENT
Feburary 10, 1997
(inception) to
<TABLE>
<CAPTION>
December 31, 1999 December 31,1998
--------------- ---------------
<S> <C> <C>
Computers and equipment $ 9,955 $ 9,955
Furniture and fixtures 159 159
Leasehold Improvements 1,550 1,550
--------------- ---------------
11,664 11,664
Less accumulated depreciation
and amortization (5,098) (4,415)
--------------- ---------------
$ 6,566 $ 7,249
=============== ===============
</TABLE>
Depreciation and amortization expense was $512 for the three
month period ended Dec 31, 1999; and $2,531 for the period
from February 10, 1997 (Inception) to December 31, 1998.
NOTE 4 - RELATED PARTIES
The Company has made loans to four of its stockholders in
exchange for issuance of shares of common stock and preferred
stock (NOTE 7). As of June 30, 1999, these four stockholders
own 56% of the outstanding common shares of stock.
The loans are unsecured, are due June 30, 2003 and bear
interest at 8% annually. Notes receivable due from related
parties were $109,321 as of June 30, 1999, and $96,671 as of
June 30, 1998. A summary of Notes receivable due from related
parties is as follows:
<TABLE>
<CAPTION>
<S> <C>
Common stock issued during the year ended June 30, 1998 $ 92,179
Common stock issued from March 1, 1997 to June 30, 1997 4,492
Preferred stock issued during the year ended June 30, 1999 1,000
Conversion of stock subscriptions to notes receivable
during the year ended June 30, 1999 (NOTE 7) 25,650
Repayment of notes receivable through Dec 31, 1999 (75,001)
--------------
$ 48,320
==============
</TABLE>
- 7 -
<PAGE>
CARDINAL AIRLINES
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 4 - RELATED PARTIES CONT.
The Notes receivable due from related parties are reported as
a reduction in stockholders' equity (deficit).
NOTE 5 - COMMITMENTS AND CONTINGENCIES
The Company leases its facilities from an unrelated third
party under an operating lease expiring July, 2000. Rent
expense was $4,770 and $2,915 for the three month period
ended December 31, 1999 and 1998 respectively.
Future minimum lease payments are as follows:
Year ending June 30,
2000 $ 19,080
2001 1,590
-----
$ 20,670
During the period January through March, 1999, the Company
issued shares of stock to raise capital to fund its
operations. The sales may be in violation of Section 5 of the
Securities Act of 1933 and accordingly, those who purchased
may have the right to rescind their shares. The potential
liability to the company is $253,100 plus interst.
NOTE 6 - INCOME TAXES
The Company's effective tax rate differs from the expected
federal income tax rate as follows:
Year Ended Year Ended
June 30, 1999 June 30, 1998
------------- -------------
Income tax benefit at statutory Rate $ (113,460) $ (8,068)
Increase in valuation Allowance 113,460 8,068
------- -----
Actual income taxes $ - $ -
= = = =
- 8 -
<PAGE>
CARDINAL AIRLINES
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 6 - INCOME TAXES CONT.
The components of the deferred tax assets and liabilities are
as follows:
June 30, 1999 June 30, 1998
------------- -------------
Deferred tax assets:
Net operating loss carryforwards $ 113,460 $ 8,068
------- -----
Total deferred tax assets 113,460 8,068
Less valuation allowance (113,460) (8,068)
Deferred tax assets, net of
valuation allowance - -
Deferred tax liabilities - -
- -
Net deferred tax asset (liability) $ - $ -
= =
A summary of the net operating loss carryforwards is as follows:
Generated June 30, 1997 $ 3,168 Expires June 30, 2012
Generated June 30, 1998 20,561 Expires June 30, 2013
Generated June 30, 1999 309,976 Expires June 30, 2014
------------------------------
$333,705
As of December 31, 1999, the Company is still in development
stage. As such, all income and deductions for tax purposes are
deferred until the Company's planned principal operations have
commenced.
NOTE 7 - STOCKHOLDERS' EQUITY
A summary of issuance of common stock involving non-cash
consideration is as follows:
On April 1, 1997, the Company issued 449,200 shares of
stock in consideration for notes receivable due from
related parties (NOTE 4) of $4,492. The shares were
sold at $.01 par value per share.
- 9 -
<PAGE>
CARDINAL AIRLINES
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 7 - STOCKHOLDERS' EQUITY CONT.
On July 1, 1997, the Company issued 184,358 shares of
stock in consideration for notes receivable due from
related parties (NOTE 4) of $92,179. The shares were
sold at $.01 par value per share, with $.50 per share
consideration. Through Dec 31, 1999, $75,001 was
received in payment of these notes (NOTE 4).
During the year ended June 30,1999, the Company
issued 83,300 shares of stock in consideration for
stock subscriptions of $41,650. The shares were sold
at $.01 par value per share, with $.50 per share
consideration. These subscriptions were converted to
a note receivable (NOTE 4).
As of June 30, 1997, the Company's common stock had a par
value $.01 per share with 50,000,000 shares authorized and
940,000 shares issued and outstanding.
As of Dec 31, 1998, the Company's common stock had a par
value $.01 per share with 50,000,000 shares authorized and
1,712,400 shares issued and outstanding.
As of Dec 31, 1999, the Company's common stock had a par
value $.01 per share with 50,000,000 shares authorized and
2,033,900 shares issued and outstanding.
A summary of issuance of preferred stock involving non-cash
consideration is as follows:
On October 16, 1998, the Company issued 100,000
shares of $.01 par value "Series A" preferred stock
in consideration for notes receivable due from
related parties (NOTE 4) of $1,000.
As of Dec 31, 1999, the Company's preferred stock had a par
value $.01 per share with 1,000,000 shares authorized. There
are 100,000 shares issued and outstanding as "Series A"
preferred stock. The 900,000 unissued shares have not been
designated.
The shares of "Series A" preferred stock have super voting
rights at the multiple of 100 votes per share. In the event
of liquidation, the preferred stock has preference over the
common stock. The shares are not convertible into common
stock and do not have any other rights or preferences.
- 10 -
<PAGE>
CARDINAL AIRLINES
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 8 - OFFERING
On July 21, 1999, the Company issued its initial S-1 filing
with the Securities and Exchanges Commission. This is an
initial public offering of 2,000,000 shares of common stock
for $10 per share.
- 11 -
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operations.
Results of Operations
Cardinal is a development stage, airline company. Cardinal is
considered to be in the development stage because we have
devoted substantially all of our efforts to establishing the
business plan, organization and raising capital.
Since inception in February 1997 our efforts have principally
been devoted to organization, development and raising capital.
Cardinal has not received any revenues from flight services, and
does not expect any of its flights to be commercially available
until one month after 600,000 units are sold. From inception
through December 31, 1999, we have sustained cumulative losses
of $447,818 of which $194,869 was for consulting fees, $172,638
was for professional fees, $37,365 for rent, $20,398 for
supplies, $17,581 for utilities, $5,090 in depreciation, $10,938
for miscellaneous expenses, and $366 in taxes. For the three
months ended December 31, 1999, we sustained a cumulative loss
of $29,960 of which $4,600 was for consulting fees, $16,401 was
for professional fees, $4,770 for rent, $300 for supplies,
$3,750 for utilities, $512 in depreciation, $833 for
miscellaneous expenses, and $125 in taxes. These losses have
resulted primarily from expenditures incurred in connection with
general and administrative activities, organization and
development, trademark registration and offering costs.
Between June 10, 1998, and March 23, 1999, Cardinal sold 506,200
common shares for $0.50 per share to 34 purchasers in a private
placement. We received a total of $253,100 in the private
placement.
We expect to incur substantial costs in the future resulting
from the acquisition of aircraft, equipment, agreements with
airport service providers such as baggage handling, and fuel
service. Additional expenses will include airport facilities,
maintenance costs, and marketing. There can be no assurance that
Cardinal will ever achieve profitable operations.
To date, Cardinal has not marketed or generated revenues from
the commercialization of any service. Our current planned
flights will not begin until at least one month after 600,000
units of this offering are sold. During this period following
the sale of 600,000 units, we expect to hire additional
personnel. Depending on how rapidly units are sold, we may also
be finalizing arrangements for aircraft which could increase the
time in which scheduled operations would begin.
Our operating expenses will depend on several factors, including
the level of aircraft maintenance and repair expenses.
Development of Cardinal's planned flights will depend upon
economic factors which we cannot predict. Management may, in
some cases, be able to control the timing of developmental
expenses, in part, by controlling growth. As a result of these
factors, we believe that period-to-period comparisons are not
necessarily meaningful and should not be relied upon as an
indicator of future performance. Due to all of the foregoing
factors, it is possible that our operating results will be below
the expectations of market
12
<PAGE>
analysts, if any, and investors. In such event, the prevailing
market price, if any, of the common stock would likely be
materially adversely affected.
Cardinal entered into negotiations with Capstone Partners, Inc.,
for selling agent and investment banking services. Cardinal has
signed an agreement with Capstone which will provide for the
formation of a selling group and will solicit subscriptions on a
best efforts bases. Under that Agreement, Capstone shall receive
10% compensation equal to 10% commissions on sales.
Liquidity and Capital Resources
Until such time that Cardinal receives the proceeds of its
public offering (File number 333-70437) or other financing, it
will continue to operate on a limited basis. Our approximate
monthly expenditures during this interim development period are
approximately $17,000 per month. Without additional funding,
Cardinal can maintain its present operating level through the
end of April 1, 2000.
Cardinal can delay the majority of the expenditures which are
necessary to carry out its business plan until adequate funds
are on hand or appear to be available. Put another way, Cardinal
will delay incurring significantly greater costs than its
present expenditures of $17,000 per month, such as additional
personnel and the purchase or lease of aircraft, until funds
are available from its public offering. The bulk of FAA
certification expenses will be incurred when sufficient funds
are available.
Cardinal has incurred negative cash flows from operations since
its inception. We have expended and expect to continue to expend
in the future, substantial funds to complete our planned service
development efforts. Our future capital requirements and the
adequacy of available funds will depend on numerous factors
including:
o the successful commercialization of planned flights
o obtaining sufficient funding to acquire aircraft and equipment
o fuel price and availability
o hiring qualified personnel
o keeping pace with government regulation
o obtaining adequate insurance
o the development of contractual agreements with airports
o the use of airport service providers
Expenditures relating to aircraft and certification will be made
prior to crew and maintenance salaries being incurred. If
Cardinal determines that the offering is not likely to raise at
least $5.35 million, it will defer flight-related and
certification expenses to seek additional financing or revise
its business plan to provide for the use of less expensive
aircraft.
At such time as Cardinal raises at least $6,000,000 in its
public offering (600,000 Units), the proceeds of the offering
would be used to commence operations by purchasing one MD-80
Aircraft. $540,000 would be used for aircraft deposit. Over a
period of three to nine months from the date of commencement,
$1,037,902 would be used to staff operations at both Melbourne
International Airport and Baltimore Washington International
Airport. Approximately $1,140,459 would be used to finance
flight operations beginning in the fifth month of operations.
Fuel and maintenance expense totaling approximately $846,204
for the six month period would begin in the fifth month of
operations. Beginning in the third month of operations, Cardinal
would expend a total of $702,417 for advertising and initial
promotions. During this period, Cardinal anticipates expending
approximately $659,018 on general and administrative expenses,
$50,000 for computer leases and software and $24,000 for key
man insurance. FAA and DOT certification expenses are expected
to be approximately $350,000 during the period of three to six
months following commencement of operations.
In the event our plans change or our assumptions change or prove
to be inaccurate or the proceeds of our public offering prove to
be insufficient to fund operations, we could be required to seek
additional financing. The terms and prices of any additional
financing may be significantly more favorable than those of the
units sold in our public offering. Cardinal does not have any
material committed sources of additional financing, and there
can be no assurance that additional funding, if necessary, will
be available on acceptable terms, if at all. If adequate funds
are not available, we may be required to delay, scale back, or
eliminate certain aspects of our operations. If adequate
additional funds are not available, Cardinal's business,
financial condition, and results of operations will be
materially and adversely affected
13
<PAGE>
Cardinal may receive additional funding under the provisions
pertaining to the exercise of the warrants which are part of the
units offered in its public offering.
Currently, we have no plans to sell or issue any additional
preferred stock.
The net proceeds from the sale of 600,000 units in our public
offering is estimated to be the minimum amount necessary to
begin operations. If fewer than 600,000 units are sold, then we
would use the proceeds to pay the offering expenses and possibly
commissions. Any remaining proceeds would be used to secure
additional funding to implement Cardinal's business plan or to
amend the plan and operate with less expensive aircraft or
contract services.
If less than 600,000 units are sold in our public offering, as
an alternative until we are able to receive our own certificate,
Cardinal could contract its flight services to another company
which holds a FAA Operators Certificate. If this occurs,
Cardinal may be required to make certain deposits and bonds and
would contract actual flight operations. The usual cost per
aircraft operating hour is $3,000 to $5,000. Assuming average
operating hours of 240 per month, the estimated monthly cost of
using contracted flight services would range from approximately
$720,000 to $ 1,200,000 per month. Costs vary widely depending
on operating requirements, including the time of day and time
of year. Contract flight service fees typically include flight
crew, fuel, insurance and maintenance. This option could be
accomplished with substantially fewer capital resources than
required to begin independent flight operations with our own
operating certificate.
14
<PAGE>
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit Description Page
(2) Plan of Acquisition, Reorganization, Arrangement,
Liquidation or Succession None
(3) Articles and By-Laws None
(4) Instruments defining the Rights of Security Holders None
(10) Material Contracts None
(11)* Statement re: Computation of Per Share Earnings Note 1(G)
to Financial
Statements
(15) Letter re: Unaudited Interim Financial Information None
(18) Letter re: Change in Accounting Principles None
(19) Report Furnished to Security Holders None
(22) Published Report re: Matters Submitted to Vote of
Security Holders None
(23) Consents of Experts and Counsel None
(24) Power of Attorney None
(27)* Financial Data Schedule
(99) Additional Exhibits None
*Filed herewith
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
CARDINAL AIRLINES, INC.
SIGNATURE TITLE DATE
/S/ Lawrence A. Watson
_________________________ President, Chairman of the Board February 14, 2000
LAWRENCE A. WATSON Chief Executive Officer
/S/ H. Lawrence Mason
________________________ Secretary Treasurer, February 14, 2000
H. LAWRENCE MASON Chief Financial Officer
<PAGE>
Exhibit Index
Exhibit Description Page
(2) Plan of Acquisition, Reorganization, Arrangement,
Liquidation or Succession None
(3.5) Articles and By-Laws
(4) Instruments defining the Rights of Security Holders None
(10) Material Contracts None
(11)* Statement re: Computation of Per Share Earnings Note 1(G)
to Financial
Statements
(15) Letter re: Unaudited Interim Financial Information None
(18) Letter re: Change in Accounting Principles None
(19) Report Furnished to Security Holders None
(23) Published Report re: Matters Submitted to Vote of
Security Holders None
(23) Consents of Experts and Counsel None
(24) Power of Attorney None
(27)* Financial Data Schedule
(99) Additional Exhibits None
*Filed herewith
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Financial Statements for the three (3) months ended December 31, 1999, and
is qualified in its entirety by reference to such form 10-QSB for quarterly
period ended December 31, 1999.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Jun-30-1999
<PERIOD-END> Dec-31-1999
<CASH> 1,933
<SECURITIES> 0
<RECEIVABLES> 1,331
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 13,360
<PP&E> 6,566
<DEPRECIATION> 5,090
<TOTAL-ASSETS> 24,126
<CURRENT-LIABILITIES> 41,277
<BONDS> 0
<COMMON> 2,033,900
0
1000
<OTHER-SE> (17,151)
<TOTAL-LIABILITY-AND-EQUITY> 24,126
<SALES> 0
<TOTAL-REVENUES> 1,331
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 31,291
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,331
<INCOME-TAX> 0
<INCOME-CONTINUING> (29,960)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (29,960)
<EPS-BASIC> (.01)
<EPS-DILUTED> (.22)
</TABLE>
