UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 1996
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or
|_| 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: 33-9218
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Air Brook Airport Express, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 22-2742564
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
115 West Passaic Street, Rochelle Park, New Jersey 07662
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(Address of principal executive offices) (Zip Code)
(201) 843-6100
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year,
if changed since last report)
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 filing requirements for the past 90 days.
Yes |X| No |_|
APPLICABLE ONLY TO CORPORATE ISSUERS INVOLVED IN BANKRUPTCYPROCEEDINGS DURING
THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
Yes |_| No |_|
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: 2,014,500 Shares as of April 30, 1996.
<PAGE>
AIR BROOK AIRPORT EXPRESS, INC. AND SUBSIDIARY
INDEX
PART I - FINANCIAL INFORMATION:
ITEM I - FINANCIAL STATEMENTS
Consolidated Balance Sheets (Unaudited) April 30, 1996
and October 31, 1995 1
Consolidated Statements of Income (Unaudited) for the
Three Months Ended April 30, 1996 and 1995 2
Consolidates Statements of Income (Unaudited) for the
Six Months ended April 30, 1996 and 1995 3
Consolidated Statement of Changes in Stockholders' Deficit
(Unaudited) for the Six Months Ended April 30, 1996. 4
Consolidated Statements of Cash Flows (Unaudited) for the
Six Months Ended April 30, 1996 and 1995 5
Notes to Consolidated Financial Statements (Unaudited) 6-7
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 8
PART II - OTHER INFORMATION 9
<PAGE>
AIR BROOK AIRPORT EXPRESS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Unaudited)
April 30, October 31,
1996 1995
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash $ 203 $ 232
----------- -----------
Total current assets 203 232
Deposits 650 650
----------- -----------
Total assets $ 853 $ 882
=========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 314,913 $ 408,259
Accrued expenses 5,073 5,317
Due to affiliate 950,959 902,511
----------- -----------
Total current liabilities 1,270,945 1,316,087
----------- -----------
Stockholders' deficit:
Common stock, $.0001 par value: authorized
98,800,000 shares, issued and outstanding 2,014,500 201 201
Preferred stock, $.0001 par value:
1,200,000 shares authorized; none issued -- --
Additional paid-in capital 202,936 202,936
Accumulated deficit (1,473,229) (1,518,342)
----------- -----------
Total stockholders' deficit (1,270,092) (1,315,205)
----------- -----------
Total liabilities and stockholders' deficit $ 853 $ 882
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements (unaudited).
-1-
<PAGE>
AIR BROOK AIRPORT EXPRESS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED APRIL 30,
(UNAUDITED)
1996 1995
----------- -----------
Revenue $ 21,576 $ 19,441
General, administrative and operating expenses 1,133 2,092
Gain on settlement (5,084)
----------- -----------
Net income $ 25,527 17,349
=========== ===========
Income per common equivalent share:
Net income $ .01 $ .01
=========== ===========
Weighted average number of common shares
outstanding:
Primary 2,014,500 2,014,500
=========== ===========
See accompanying notes to consolidated financial statements (unaudited).
-2-
<PAGE>
AIR BROOK AIRPORT EXPRESS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED APRIL 30
(UNAUDITED)
1996 1995
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Revenue $ 41,308 $ 37,865
General, administrative and operating expenses $ 1,279 $ 4,453
---------- ----------
Operating income before other income (expense) $ 40,029 $ 33,412
Other income (expense)
Gain on settlement of litigation 5,084 --
---------- ----------
Net income $ 45,113 $ 33,412
========== ==========
Income per common equivalent share:
Net income $ .02 $ .02
========== ==========
Weighted average number of common shares outstanding:
Primary 2,014,500 2,014,500
========== ==========
See accompanying notes to consolidated financial statements (unaudited).
-3-
<PAGE>
AIR BROOK AIRPORT EXPRESS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES OF STOCKHOLDERS' DEFICIT
FOR THE SIX MONTHS ENDED APRIL 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
Additional Total
Common Stock Paid-in Accumulated Stockholders'
Shares Amount Capital Deficit Deficit
------ ------ ------- ------- -------
<S> <C> <C> <C> <C> <C>
Balances at November 1, 1995 2,014,500 $ 201 $ 202,936 $(1,518,342) $(1,315,205)
Net income for the six months ended
April 30, 1996 45,113 45,113
--------- ----------- ----------- ----------- -----------
Balances at April 30, 1996 2,014,500 $ 201 $ 202,936 $(1,473,229) $(1,270,092)
========= =========== =========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements (unaudited).
-4-
<PAGE>
AIR BROOK AIRPORT EXPRESS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED APRIL 30,
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 45,113 $ 33,412
Adjustments to reconcile net income to net cash consumed in
operating activities:
Earnings from settlement at less than recorded liability (5,084) --
Changes in assets and liabilities:
Decrease in accounts payable and accrued expenses (88,506) (1,904)
Increase (decrease) in amount due to affiliate 48,448 (31,660)
-------- --------
Net cash flows consumed in operating activities (29) (152)
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CASH FLOWS FROM INVESTING ACTIVITIES -- --
CASH FLOWS FROM FINANCING ACTIVITIES -- --
-------- --------
Decrease in cash (29) (152)
Cash, beginning of period 232 152
-------- --------
Cash, end of period $ 203 $ --
======== ========
</TABLE>
See accompanying notes to consolidated financial statements (unaudited).
-5-
<PAGE>
AIR BROOK AIRPORT EXPRESS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
APRIL 30, 1996
NOTE 1 - GENERAL
The accompanying unaudited financial statements have been prepared
in accordance with generally accepted accounting principles for
interim financial information and with instructions to Form 10-QSB.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, the
interim financial statements include all adjustments necessary in
order to make the financial statements not misleading. The results
of operations for the three and six months ended in April 30, 1996
are not necessarily indicative of the results to be expected for the
full year. These statements should be read in conjunction with the
financial statements and notes that are included in the company's
annual report Form 10-KSB.
NOTE 2 - GOING CONCERN UNCERTAINTY
The accompanying consolidated financial statements have been
prepared assuming that the Company will continue as a going concern.
As shown in the consolidated financial statements, the Company had
material working capital deficiencies and accumulated deficits at
April 30, 1996. Additionally, the Company receives significant
financial support from an affiliated entity, Air Brook Limousine,
Inc. ("Air Limo"). Such support is essential to the Company's
continuance.
These factors raise substantial doubt about the ability of the
Company to continue as a going concern. The financial statements do
not include adjustments relating to the recoverability of assets and
classification of liabilities that might be necessary should the
Company be unable to continue in operation.
The Company's present plans, the realization of which cannot be
assured, to overcome these difficulties include but are not limited
to the continuing effort to investigate business acquisition and
merger opportunities.
NOTE 3 - RELATED PARTY TRANSACTIONS
a. Pursuant to two 1991 agreements, the Company's subsidiary, A.B. Park
and Fly, Inc. ("Abex") transferred all of its transportation
equipment and operating activities of a ground transportation
facility in Ridgewood, New Jersey to its affiliate, Air Limo. Air
Limo in return agreed to pay Abex a fee equal to ten percent (10%)
of gross collections for such facility.
b. On May 1, 1993, Abex entered into an agreement with Air Limo whereas
Air Limo opened and operates a second satellite terminal in the
Borough of Montvale. Pursuant to the agreement, Air Limo bears all
costs of operating the facility and pays Abex three percent (3%) of
the gross receipts generated by the facility.
c. On August 10, 1993, the Company entered into an agreement with Air
Limo under which Air Limo will continue to advance funds on behalf
of the Company and its subsidiary as long as Air Limo deems
necessary and as long as Air Limo is financially able. Such advances
are due on demand and Air Limo may terminate the agreement at any
time.
d. The Company's principal offices are in a building owned by its
president. The Company occupies these offices on a month to month
basis, free of charge.
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<PAGE>
AIR BROOK AIRPORT EXPRESS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
APRIL 30, 1996
NOTE 4 - DUE TO AFFILIATES
Air Limo has advanced a net total of $950,959 and $902,511, as of
April 30, 1996 and October 31, 1995, respectively, directly to or on
behalf of Abex to fund operations and liquidate liabilities. Such
advances bear no interest and are payable on demand.
NOTE 5 - COMMITMENT AND CONTINGENCIES
a. Litigation
On September 25, 1995, a judgment was placed against the Company by
a creditor related to amounts owed for the purchase of fuel. The
creditor claimed that it sold and delivered diesel fuel oil to
several affiliated entities of and including Abex between 1981 and
1992. While Abex admitted that it purchased diesel fuel oil at
certain times, it denied that it made many of the purchases claimed
by the creditor. Abex further asserted that it did not receive
credit for many of the payments made to such creditor. During March
1996, such judgment was entered in favor of the Plaintiff whereby
Abex was found liable for a total of $88,262 inclusive of legal
fees. As of October 31, 1995 Abex had included in its accounts
payable an estimated accrual of $93,346. During April 1996 such
judgement was satisfied by Air Limo on behalf of Abex. Accordingly,
Abex recorded a gain on such settlement amounting $5,084.
b. Dependence on Affiliate
Air Limo advances funds on behalf of the Company and its subsidiary
to finance day to day operations. This agreement could be terminated
at any time by Air Limo, and these advances are due on demand. In
addition, all Company revenue comes from commissions on revenue of
the two facilities operated by Air Limo.
c. Dependence on Lease Terms
The Ridgewood terminal which is operated by Air Limo is leased by
Abex on a month to month basis from the village of Ridgewood, New
Jersey. This facility produced 90% of company revenue during the
year ended October 31, 1995. Termination of this lease would
eliminate this revenue stream. The lease term of Montvale facility
ended January 31, 1996. Since than it has been leased by Air Limo on
a month to month basis.
-7-
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS
Three and six months ended April 30, 1996 compared to three and six
months ended April 30, 1995
Pursuant to an agreement signed on February 4, 1991, the Company
transferred all of its operating activities for its Satellite
Terminal located in Ridgewood, New Jersey and, on July 1, 1991 its
transportation equipment, to Air Brook Limousine, Inc. ("Air Limo").
Air Limo in return pays the Company a fee equal to ten percent (10%)
of gross collections from such terminal.
On May 1, 1993, the Company entered into an agreement with Air Limo
in which Air Limo agreed to open and operate a second Satellite
Terminal located in the borough of Montvale, New Jersey. Pursuant to
the agreement, Air Limo bears all costs of opening and operating
such terminal and pays the Company three percent (3%) of Air Limo's
gross receipts from such terminal.
On August 10, 1993, Air Limo stated its intention to fund the
Company's operations for as long as Air Limo deems necessary and as
long as Air Limo is financially able. Such advances are due on
demand. Air Limo may terminate such agreement at any time at its own
discretion.
In conjunction with such agreements, the Registrant has generated
revenue of $21,576 and $19,441 for the three months ended April 30,
1996 and 1995, respectively and $41,308 and $37,865 for the six
months ended April 30, 1996 and 1995, respectively.
For the three and six months ended April 30, 1996, the Company has
generated net income in the amounts of $25,527 and $45,113,
respectively, whereas for the three and six months ended April 30,
1995, the Company generated net income in the amounts of $17,349 and
$33,412, respectively.
Liquidity and capital resources
Abex was a defendant in a lawsuit involving fuel oil deliveries
which was settled in April, 1996. While Abex admitted that it
purchased diesel fuel oil at certain times, it denied that it made
many of the purchases claimed by the creditor. Abex further asserted
that it did not receive credit for many of the payments made to the
Plaintiff. A judgment was entered in favor of the Plaintiff in March
1996, in the amount of $88,262 inclusive of legal fees. As of
October 31, 1995 Abex had included in its accounts payable an
estimated accrual of $93,346. In April 1996 the judgment was
satisfied by Air Limo on behalf of Abex. Accordingly, Abex recorded
a gain on such settlement amounting to $5,084.
-8-
<PAGE>
AIR BROOK AIRPORT EXPRESS, INC. AND SUBSIDIARY
PART II - OTHER INFORMATION
ITEM 1 - Legal Proceedings:
Abex was a defendant in a lawsuit involving fuel oil deliveries which
was settled in April, 1996. While Abex admitted that it purchased
diesel fuel oil at certain times, it denied that it made many of the
purchases claimed by the creditor. Abex further asserted that it did
not receive credit for many of the payments made to the Plaintiff. A
judgment was entered in favor of the Plaintiff in March 1996, in the
amount of $88,262 inclusive of legal fees. As of October 31, 1995, Abex
had included in its accounts payable an estimated accrual of $93,346.
In April, 1996 the judgment was satisfied by Air Limo on behalf of
Abex. Accordingly, Abex recorded a gain on such settlement amounting to
$5,084.
ITEM 2 - Changes in Securities:
None
ITEM 3 - Defaults Upon Senior Securities:
None
ITEM 4 - Submission of Matters to a Vote of Security Holders:
None
ITEM 5 - Other Information:
None
ITEM 6 - Exhibits and Reports on Form 8-K:
None
-9-
<PAGE>
FORM 10-QSB
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Air Brook Airport Express, Inc.
-------------------------------
(Registrant)
July 22, 1999 Donald M. Petroski
- - ----------------- ------------------
Date Donald M. Petroski,
President, Director and Chief
Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> FEB-01-1996
<PERIOD-END> APR-30-1996
<CASH> 203
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 203
<PP&E> 650
<DEPRECIATION> 0
<TOTAL-ASSETS> 853
<CURRENT-LIABILITIES> 1,270,945
<BONDS> 0
0
0
<COMMON> (1,270,092)
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 853
<SALES> 21,576
<TOTAL-REVENUES> 21,576
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> (3,951)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 25,527
<INCOME-TAX> 0
<INCOME-CONTINUING> 25,527
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 25,527
<EPS-BASIC> 0.01
<EPS-DILUTED> 0.01
</TABLE>
