UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

Mark One
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly Period ended September 30, 2014

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

BALTIA AIR LINES, INC.

(Exact name of Registrant as specified in its charter)

NEW YORK
(State of Incorporation)
11-2989648
(IRS Employer Identification No.)

JFK International Airport,
Building 151, Jamaica, NY 11430

(Address of principal executive offices)

(718) 244 8880
(Registrant's telephone number, including area code)
Title of each class
-None-
Name of each Exchange on which registered
-None-
Securities Registered pursuant to Section 12(g) of the Exchange Act:
Common Stock,
(Title of Class)
$.0001 Par Value
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [  ] - - No [X]
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes [   ] - - No [X]
Indicate by check mark whether the Registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 [  ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes [X] - - No [  ]
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer [   ]
Non-accelerated filer [   ]
Accelerated filer [  ]
Smaller reporting company  [X]
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act of 1934).  Yes [ ]   No [X]

  The number of shares of the registrant's common stock outstanding as of November 17, 2014 was 5,244,875,520

INDEX

Part I - Financial Information Page
Item 1 - Financial Statements: 3
Balance Sheet - September 30 2014 (Unaudited) and December 31, 2013 (Audited) 3
Statement of Operations - Nine Months Ended September 30, 2014 and 2013 (Unaudited) 4
Statement of Changes in Stockholders' Equity 5
Statement of Cash Flows - Nine Months Ended September 30, 2014 and 2013 (Unaudited) 6
Notes to Unaudited Interim Financial Statements 7 - 8
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 8
Item 3 - Quantitative and Qualitative Disclosures about Market Risk 11
Item 4T - Controls and Procedures 11
Part II - Other Information 11
Item 1 - Legal Proceedings 11
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds 11
Item 3 Default Upon Senior Securities. 11
Item 4 - Mine Safety Disclosures. 11
Item 5 - Other Information 11
Item 6 - Exhibits, Signatures, and Certifications 12-16
Exhibit 101 - XBRL Files

2

PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements:

Baltia Air Lines, Inc.

BALANCE SHEET

(A Development Stage Company)

September
2014
December 31,
2013
(Unaudited)
ASSETS
Current assets

Cash

$

29,556

$

11,549

Total current assets

29,556

11,549

Property and equipment, net

2,330,107

1,794,486

Other assets:

Security deposit and other

318,683

317,293

Total assets

$

2,678,346

$

2,123,328

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities

Short-term borrowings

$

81,000

$

-

Accounts payable and accrued expenses

1,983,447

621,208

Accrued interest

396,750

319,125

Deposits on common stock purchases

274,000

-

Total current liabilities

2,735,197

940,333

Noncurrent liabilities

Long-term debt, net of discount

1,150,000

1,150,000

Long-term accounts payable and accrued expenses

335,523

335,523

Total noncurrent liabilities

1,485,523

1,485,523

Total liabilities

4,220,720

2,425,856

Stockholders' equity (deficit)

Preferred stock, $0.01 par value; 2,000,000 shares

authorized, 66,500 issued and outstanding

665

665

Common stock, $.0001 par value; 4,986,000,000 shares

authorized, 4,931,886,341 and 3,296,126,988 issued and

outstanding at September 30, 2014 and December 31, 2013, respectively

493,189

329,612

Additional paid-in capital

104,648,122

94,507,702

Deficit accumulated during development stage

(106,684,350

)

(95,140,507

)

Total stockholders' equity (deficit)

(1,542,374

)

(302,528

)

Total liabilities and stockholders' equity (deficit)

$

2,678,346

$

2,123,328

The accompanying footnotes are an integral part of these financial statements.

3

Baltia Air Lines, Inc.

STATEMENT OF OPERATIONS

(A Development Stage Company)

(Unaudited)

From
Three Months Ended Nine Months Ended Inception to
September 30, September 30, September 30,
2014 2013 2014 2013 2014

Revenue

$

-

$

-

$

-

$

-

$

-

Cost and Expenses

General and administrative

4,361,613

889,476

9,634,461

4,200,139

96,319,873

FAA certification costs

1,025,986

129,545

1,784,492

465,057

5,745,673

Training

-

-

-

225,637

Depreciation

14,071

4,122

42,023

12,602

428,451

Other

-

568,245

Interest

26,104

26,696

82,867

80,088

1,766,270

Loss on sale of assets

-

-

1,607,183

Total costs and expenses

5,427,774

1,049,839

11,543,843

4,757,886

106,661,332

Net loss before income taxes

(5,427,774

)

(1,049,839

)

(11,543,843

)

(4,757,886

)

(106,661,332

)

Provision for income taxes

-

-

-

-

23,018

Deficit accumulated during development stage

$

(5,427,774

)

$

(1,049,839

)

$

(11,543,843

)

$

(4,757,886

)

$

(106,684,350

)

Net loss per weighted share, basic and fully diluted

$

(0.00

)

$

(0.00

)

$

(0.00

)

$

(0.00

)

Weighted average number of common shares outstanding, basic and fully diluted

4,611,259,608

2,919,146,940

3,982,218,192

2,881,654,749

The accompanying footnotes are an integral part of these financial statements.

4

Baltia Air Lines, Inc.
(A Development Stage Company)
STATEMENTS OF CHANGES IN STOCKHOLERS'S EQUTIY
(Unaudited)

Deficit
Accumulated
Additional During
Preferred Stock Common Stock Paid-in Development
Shares Amount Shares Amount Capital Stage Total
Balance, December 31, 2009 66,500 665 743,580,039 74,358 32,102,591 (30,178,413 ) 1,999,201
Stock issued and issuable for cash 115,776,464 11,578 4,365,876 4,377,454
Shares issued for services 252,658,491 25,266 14,984,584 15,009,850
Fair value of options issued as
loan incentive 92,745 92,745
Stock issued as loan incentive 6,800,000 680 201,552 202,232
Net loss (19,394,527 ) (19,394,527 )
Balance, December 31, 2010 66,500 665 1,118,814,994 111,881 51,747,348 (49,572,940 ) 2,286,954
Stock issued and issuable for cash 241,369,947 24,137 7,783,105 7,807,242
Shares issued for services 357,846,441 35,786 17,403,106 17,438,892
Net loss (25,075,498 ) (25,075,498 )
Balance, December 31, 2011 66,500 665 1,718,031,382 171,804 76,933,559 (74,648,438 ) 2,457,590
Prior period adjustment 147,987,304 14,798 (14,798 ) -
Stock issued and issuable for cash 271,270,882 27,127 3,599,755 3,626,882
Shares issued for services 329,248,482 32,925 7,653,663 7,686,588
Net loss (13,623,873 ) (13,623,873 )
Balance, December 31, 2012 66,500 665 2,466,538,050 246,654 88,172,179 (88,272,311 ) 147,187
Stock issued and issuable for cash 701,621,438 70,162 4,062,352 4,132,514
Shares issued for services 127,967,500 12,796 2,273,171 2,285,967
Net loss (6,868,196 ) (6,868,196 )
Balance, December 31, 2013 66,500 665 3,296,126,988 $ 329,612 $ 94,507,702 $ (95,140,507 ) $ (302,528 )
Stock issued and issuable for cash 1,450,613,042 145,061 6,971,977 7,117,038
Stock issued for services 190,646,311 19,065 3,228,293 3,247,358
Shares cancelled (5,500,000 ) (550 ) (59,850 ) (60,400 )
Net loss (11,543,843 ) (11,543,843 )
Balance, September 30, 2014 66,500 $ 665 4,931,886,341 $ 493,189 $ 104,648,122 $ (106,684,350 ) $ (1,542,374 )

The accompanying footnotes are an integral part of these financial statements.

5

Baltia Air Lines, Inc.
STATEMENTS OF CASH FLOWS
(A Development Stage Company)
(Unaudited)

From
Nine Months Ended Inception to
September 30, September 30,
2014 2013 2014
Cash flows from operations
Deficit accumulated during development stage $ (11,543,843 ) $ (4,757,886 ) $ (106,684,350 )
Adjustment to reconcile deficit accumulated during
development stage to cash used in operating activities:
Depreciation and amortization 42,023 12,602 428,451
Amortization of loan discount 294,977
Expenses paid issuance of common stock and options 3,186,958 1,664,050 62,622,667
Loss on sale of assets - 1,607,183
Changes in operating assets and liabilities:
Prepaid expenses - 400,301
Accounts payable and accrued expenses 1,439,864 (244,497 ) 5,867,203
Net cash used by operating activities (6,874,998 ) (3,325,731 ) (35,463,568 )
Cash flows from investing activities
Purchase of equipment (577,643 ) (40,018 ) (4,447,289 )
Proceeds from sale of assets - 144,164
Security deposit (1,390 ) - (318,683 )
Net cash used by investing activities (579,033 ) (40,018 ) (4,621,808 )
Cash flows from financiang activities
Proceeds from issuance of common stock 7,117,038 3,408,014 38,165,413
Proceeds from short-term borrowings 81,000 81,000
Cash overdraft - - -
Deposits on common stock purchases 274,000 - 274,000
Proceeds from issuance of preferred stock 2,753
Loans from related parties 1,351,573
Repayment of related party loans - (368,890 )
Principal payments on long-term debt - 1,109,183
Acquisition of treasury stock - (500,100 )
Net cash provided by financing activities 7,472,038 3,408,014 40,114,932
Net increase (decrease) in cash 18,007 42,265 29,556
Cash, beginning of period 11,549 12,326 -
Cash, end of period $ 29,556 $ 54,591 $ 29,556
Supplemental cash flow disclosures:
Cash paid during the year for interest $ 5,000

$

-

The accompanying footnotes are an integral part of these financial statements.

6