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, 2000
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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 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, 2000.
<PAGE>
AIR BROOK AIRPORT EXPRESS, INC. AND SUBSIDIARY
INDEX
PART I - FINANCIAL INFORMATION:
ITEM 1 - FINANCIAL STATEMENTS
Consolidated Balance Sheets (Unaudited) July 31, 2000
and October 31, 1999 1
Consolidated Statements of Income (Unaudited) for the
Three Months Ended July 31, 2000 and 1999 2
Consolidated Statements of Income (Unaudited) for the
Nine Months Ended July 31, 2000 and 1999 3
Consolidated Statement of Changes In Stockholders'
Deficit (Unaudited) for the Nine Months Ended July 31, 2000 4
Consolidated Statements of Cash Flows (Unaudited) for the
Nine Months Ended July 31, 2000 and 1999 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)
July 31, October 31,
2000 1999
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash $ 191 $ 323
----------- -----------
Total current assets 191 323
Deposits 650 650
----------- -----------
Total assets $ 841 $ 973
----------- -----------
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 204,913 $ 204,913
Accrued expenses 1,593 2,214
Due to affiliate 704,958 730,473
----------- -----------
Total current liabilities 911,464 937,600
----------- -----------
Stockholders' deficit:
Common stock, $.0001 par value: 98,800,000
shares authorized; 2,014,500 issued and outstanding 201 201
Preferred stock, $.0001 par value:
1,200,000 shares authorized; none issued -- --
Additional paid-in capital 202,936 202,936
Accumulated deficit (1,113,760) (1,139,764)
----------- -----------
Total stockholders' deficit (910,623) (936,627)
----------- -----------
Total liabilities and stockholders' deficit $ 841 $ 973
----------- -----------
</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 JULY 31,
(UNAUDITED)
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Revenue $ 17,816 $ 18,504
General, administrative and operating expenses 1,347 1,882
Reversal of previously expensed accounts payable - 0 - (102,500)
----------- -----------
Net income $ 16,469 $ 119,122
=========== ===========
Income per common equivalent share:
Net income $ .01 $ .06
=========== ===========
Weighted average number of common shares outstanding:
Primary 2,014,500 2,014,500
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements (unaudited).
-2-
<PAGE>
AIR BROOK AIRPORT EXPRESS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED JULY 31,
(UNAUDITED)
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Revenue $ 51,953 $ 53,589
General, administrative and operating expenses 8,449 5,453
Non-recurring accounting expenses 17,500 (102,500)
----------- -----------
Total Expenses 25,949 (97,047)
----------- -----------
Net income $ 26,004 $ 150,636
=========== ===========
Income per common equivalent share:
Net income $ .01 $ .07
=========== ===========
Weighted average number of common shares outstanding:
Primary 2,014,500 2,014,500
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements (unaudited).
-3-
<PAGE>
AIR BROOK AIRPORT EXPRESS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
FOR THE NINE MONTHS ENDED JULY 31, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
Common Stock Additional Total
------------------------- Paid-in Accumulated Stockholders'
Shares Amount Capital deficit deficit
--------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Balances at November 1, 1999 2,014,500 $ 201 $ 202,936 $(1,139,764) $ (936,627)
Net income for the nine months
ended July 31, 2000 26,004 26,004
--------- ----------- ----------- ----------- -----------
Balance at July 31, 2000 2,014,500 $ 201 $ 202,936 $(1,113,760) $ (910,623)
========= =========== =========== =========== ===========
</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)
<TABLE>
<CAPTION>
2000 1999
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 26,004 $ 150,636
Adjustments to reconcile net income to net cash provided/
(consumed) by operating activities:
Earnings from settlement at less than recorded liability - 0 - (102,500)
Changes in assets and liabilities:
Decrease in accounts payable and accrued expenses (621) (9,221)
Decrease in amount due to affiliates (25,515) (38,895)
--------- ---------
Net cash flows provided/(consumed) by operating activities (132) 20
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES -- --
CASH FLOWS FROM FINANCING ACTIVITIES -- --
--------- ---------
Increase/(decrease) in cash (132) 20
Cash, beginning of period 323 346
--------- ---------
Cash, end of period $ 191 $ 366
========= =========
</TABLE>
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, 2000
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, 2000 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, 2000. 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 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 whereby
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.
-6-
<PAGE>
AIR BROOK AIRPORT EXPRESS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
JULY 31, 2000
NOTE 4 - DUE TO AFFILIATE
Air Limo has advanced a net total of $704,958 and $730,473, as of
July 31, 2000 and October 31, 1999, 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 - NON-RECURRING EVENTS
During January 2000 a $17,500 liability was paid by Air Limo on
behalf of the Company. This amount was incurred for professional
accounting services required to update company reporting in
compliance with SEC requirements. This non-recurring expense is
included as a separate item on the statement of income.
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 from the village of Ridgewood, New Jersey. This facility
produced 89% of Company revenue during the year ended October 31,
1999. The initial lease term expired January 1, 1999; it allows six
renewal options for one-year terms.
The lease term of the 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, 2000 compared to three and nine
months ended July 31, 1999
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 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 that 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 $17,816 and $18,504 for the three months ended July 31,
2000 and 1999, respectively, and $51,953 and $53,589 for the nine
months ended July 31, 2000 and 1999, respectively.
During January 2000 a $17,500 liability was paid by Air Limo on
behalf of the Company. This amount was incurred for professional
accounting services required to update company reporting in
compliance with SEC requirements. This non-recurring expense is
included as a separate item on the statements of income.
For the three and nine months ended July 31, 2000, the Company has
generated net income in the amounts of $16,469 and $26,004,
respectively, whereas for the three and nine months ended July 31,
1999 the Company generated net income in the amounts of $119,122 and
$150,636, respectively, including the reversal of expenses
previously recorded in accounts payable of $102,500, as discussed in
Note (5) above.
-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 1, 2000 Donald M. Petroski
----------------- ------------------------------------
(Date) Donald M. Petroski,
President, Director and Chief
Financial Officer
