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 July 31, 1999
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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)
________________________________________________________________________________
(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 BANKRUPTCY
PROCEEDINGS 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 July 31, 1999.
<PAGE>
AIR BROOK AIRPORT EXPRESS, INC. AND SUBSIDIARY
INDEX
PART I - FINANCIAL INFORMATION:
ITEM 1 - FINANCIAL STATEMENTS
Consolidated Balance Sheets (Unaudited) July 31, 1999
and October 31, 1998 1
Consolidated Statements of Income (Unaudited) for the
Three Months Ended July 31, 1999 and 1998 2
Consolidated Statements of Income (Unaudited) for the
Nine Months Ended July 31, 1999 and 1998 3
Consolidated Statement of Changes In Stockholders'
Deficit (Unaudited) for the Nine Months Ended July 31, 1999 4
Consolidated Statements of Cash Flows (Unaudited) for the
Nine Months Ended July 31, 1999 and 1998 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
(Unaudited)
July 31, October 31,
1999 1998
----------- -----------
ASSETS
Current assets:
Cash $ 366 $ 346
----------- -----------
Total current assets 366 346
Deposits 650 650
----------- -----------
Total assets $ 1,016 $ 996
----------- -----------
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 204,913 $ 314,913
Accrued expenses 2,494 4,215
Due to affiliate 745,414 784,309
----------- -----------
Total current liabilities 952,821 1,103,437
----------- -----------
Stockholders' deficit:
Common stock, $.0001 par value:
98,800,000 shares authorized
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 (1,154,942) (1,305,578)
----------- -----------
Total stockholders' deficit (951,805) (1,102,441)
----------- -----------
Total liabilities and stockholders' deficit $ 1,016 $ 996
----------- -----------
See accompanying notes to consolidated financial statements (unaudited).
-1-
<PAGE>
AIR BROOK AIRPORT EXPRESS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED JULY 31,
(UNAUDITED)
1999 1998
---- ----
Revenue $ 18,504 $ 18,069
General, administrative and
operating expenses $ 1,882 $ 1,855
Reversal of previously expensed
accounts payable (102,500) --
----------- -----------
Net income $ 119,122 $ 16,214
=========== ===========
Income per common equivalent share:
Net income $ .06 $ .01
=========== ===========
Weighted average number of common
shares outstanding:
Primary 2,014,500 2,014,500
=========== ===========
See accompanying notes to consolidated financial statements (unaudited).
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<PAGE>
AIR BROOK AIRPORT EXPRESS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED JULY 31,
(UNAUDITED)
1999 1998
---- ----
Revenue $ 53,589 $ 51,705
General, administrative and
operating expenses $ 5,453 $ 4,624
Reversal of previously expensed
accounts payable (102,500) --
----------- -----------
Net income $ 150,636 $ 47,081
=========== ===========
Income per common equivalent share:
Net income $ .07 $ .02
=========== ===========
Weighted average number of common
shares outstanding:
Primary
2,014,500 2,014,500
=========== ===========
See accompanying notes to consolidated financial statements (unaudited).
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<PAGE>
AIR BROOK AIRPORT EXPRESS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
FOR THE NINE MONTHS ENDED JULY 31, 1999
(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, 1998 2,014,500 $ 201 $ 202,936 $(1,305,578) $(1,102,441)
Net income for the nine months ended
July 31, 1999 150,636 150,636
----------- ----------- ----------- ----------- -----------
Balance at July 31, 1999 2,014,500 $ 201 $ 202,936 $(1,154,942) $ (951,805)
=========== =========== =========== =========== ===========
</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 NINE MONTHS ENDED JULY 31,
(UNAUDITED)
1999 1998
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Cash flows from operating activities:
Net income $ 150,636 $ 47,081
Adjustments to reconcile net
income to net cash provided or
(used) by operating activities:
Earnings from settlement at less
than recorded liability (102,500) --
Other changes in assets and
liabilities:
Accounts payable and accrued
expenses (9,221) (598)
Due to affiliate (38,895) (46,610)
--------- ---------
Net cash flows provided or (used)
by operating activities 20 (127)
CASH FLOWS FROM INVESTING ACTIVITIES -- --
CASH FLOWS FROM FINANCING ACTIVITIES -- --
--------- ---------
Decrease in cash 20 (127)
Cash, beginning of period 346 516
--------- ---------
Cash, end of period $ 366 $ 389
========= =========
See accompanying notes to consolidated financial statements (unaudited).
-5-
<PAGE>
AIR BROOK AIRPORT EXPRESS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
JULY 31, 1999
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 nine months ended July 31, 1999 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 a
material working capital deficiency and an accumulated deficit at
July 31, 1999. Additionally, the Company receives significant
financial support from an affiliated entity, Air Brook Limousine,
Inc. ("Air Limo") pursuant to agreements dated February 4, 1991 and
May 1, 1993. Such support is essential to the Company's continuance.
These factors raise substantial doubt about its ability 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, 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 has 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)
JULY 31, 1999
NOTE 4 - DUE TO AFFILIATE
Air Limo has advanced a total of $745,414 and $784,309, as of July
31, 1999 and October 31, 1998, respectively, directly to or on
behalf of Abex to fund operations and/or liquidate liabilities. Such
advances bear no interest and are payable on demand.
NOTE 5 - EXTRAORDINARY EVENTS
During July, 1999 a $110,000 liability for professional services
which had been previously included in accounts payable was settled
for $7,500. This amount was paid by Air Limo on behalf of the
Company. The $102,500 reversal of previously expensed accounts
payable is included as a separate item on the statement of income
NOTE 6 - COMMITMENT AND CONTINGENCIES
a. Litigation
None
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, 1998. Termination of this lease would
eliminate this revenue stream. The lease term of Montvale facility
ends in January 2001.
-7-
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Three and nine months ended July 31, 1999 compared to three and nine
months ended July 31, 1998
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, the Company entered into an agreement with Air
Limo which stipulates that Air Limo will 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 $18,504 and $18,069 for the three months ended July 31,
1999 and 1998, respectively, and $53,589 and $51,705 for the nine
months ended July 31, 1999 and 1998, respectively.
Several years ago the Company incurred an obligation for
professional services, which it disputed. The obligation was
expensed and included in accounts payable at the $110,000 amount
which had been billed. This disputed obligation was settled in July
1999 for $7,500, which was paid on behalf of the Company by Air
Limo.
For the three and nine months ended July 31, 1999, the Company has
generated net income in the amount of $119,122 and $150,636,
respectively, including the reversal of expenses previously recorded
in accounts payable of $102,500, whereas for the three and nine
months ended July 31, 1998 the Company generated net income in the
amount of $16,214 and $47,081, respectively.
-8-
<PAGE>
AIR BROOK AIRPORT EXPRESS, INC. AND SUBSIDIARY
PART II - OTHER INFORMATION
ITEM 1 - Legal Proceedings:
None
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)
September 8, 1999 /s/ Donald M. Petroski
- - ----------------- ----------------------
Date Donald M. Petroski,
President, Director and Chief
Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> OCT-31-1999 OCT-31-1999
<PERIOD-START> MAY-01-1999 NOV-01-1998
<PERIOD-END> JUL-31-1999 JUL-31-1999
<CASH> 366 366
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 366 366
<PP&E> 650 650
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 1,016 1,016
<CURRENT-LIABILITIES> 952,821 952,821
<BONDS> 0 0
0 0
0 0
<COMMON> (951,805) (951,805)
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 1,016 1,016
<SALES> 18,504 53,589
<TOTAL-REVENUES> 18,504 53,589
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> (100,618) (97,047)
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 119,122 150,636
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 119,122 150,636
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 119,122 150,636
<EPS-BASIC> 0.06 0.07
<EPS-DILUTED> 0.06 0.07
</TABLE>
