Quarterly Report (10-q)
November 19 2014 - 1:56PM
Edgar (US Regulatory)
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 |
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.
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.
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.
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.
Baltia Air Lines,
Inc. (A Development Stage Company)
NOTES TO UNAUDITED INTERIM
FINANCIAL STATEMENTS
Period ending September 30, 2014
1. Basis of Presentation
The Financial Statements presented
herein have been prepared by us in accordance with the accounting
policies described in our December 31, 2013 Annual Report on Form
10-K and should be read in conjunction with the notes to financial
statements which appear in that report.
The preparation of these financial
statements in conformity with accounting principles generally
accepted in the United States requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities,
revenues and expenses, and related disclosure of contingent assets
and liabilities. On an on-going basis, we evaluate our estimates,
including those related to intangible assets, income taxes, insurance
obligations and contingencies and litigation. We base our estimates
on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances, the results of
which form the basis for making judgments about the carrying values
of assets and liabilities that are not readily apparent from other
resources. Actual results may differ from these estimates under
different assumptions or conditions.
In the opinion of management, the
information furnished in this Form 10-Q reflects all adjustments
necessary for a fair statement of the financial position and results
of operations and cash flows as of and for the nine month periods
ended September 30, 2014 and 2013. All such adjustments are of a
normal recurring nature. The Financial Statements have been prepared
in accordance with the instructions to Form 10-Q and therefore do not
include some information and notes necessary to conform to annual
reporting requirements
The financial statements have been
presented in a development stage format. Since inception, our primary
activities have been raising of capital, obtaining financing and
obtaining FAA Certification from the U.S. Department of
Transportation. We have not commenced our principal revenue producing
activities. There is no assurance the Company will commence operation
in the future or that those operations will be profitable.
2. Earnings/Loss Per Share
Net loss per share is computed by
dividing income available to common shareholders (the numerator) by
the weighted-average number of common shares outstanding (the
denominator) for the period. Diluted earnings per share assumes that
any dilutive convertible securities outstanding were converted, with
related preferred stock dividend requirements and outstanding common
shares adjusted accordingly. It also assumes that outstanding common
shares were increased by shares issuable upon exercise of those stock
options for which market price exceeds the exercise price, less
shares which could have been purchased by us with the related
proceeds. In periods of losses, diluted loss per share is computed on
the same basis as basic loss per share as the inclusion of any other
potential shares outstanding would be anti-dilutive. Due to the net
losses reported dilutive common equivalent shares were excluded from
the computation of diluted loss per share, as inclusion would be
anti-dilutive for the periods presented. At September 30, 2014, there
are no outstanding common stock equivalents.
3. Stockholders' Equity
Stock Issued for Services
During the nine months ended September 30, 2014, we issued
190,646,311 shares of our common stock in
exchange for services. The shares were valued at $3,247,358, approximately $0.02
per share and reflected the share market value at the time of issuance. The
shares are not registered and are subject to restrictions as to
transferability.
Stock Issued for Cash
During the nine months
ended September 30, 2014, we issued 1,450,613,042 shares of our common stock in
exchange for cash. The shares sold for cash were subscribed at $7,117,038,
approximately $0.050 weighted average per share.
4. Note Payable
On March 31, 2013 the note payable
to Eastern Construction & Electric, Inc. was modified as to the
repayment of the note. The repayment was modified to read "Company
will repay the principal amount of $1,150,000 to lender on or before
the second anniversary of the date upon which the company commences
its revenue flight operations. The Company will pay accrued interest
to date on or before the first anniversary of the date upon which the
Company commences its revenue flight operations." All other
terms of the agreement remain the same.
Interest accrued to September 30, 2014 is $396,750.
Item 2 – Management's
Discussion and Analysis of Financial Condition and Results of
Operations
Statements that include words such
as "believe," "expect," "should,"
intend," "may," "anticipate," "likely,"
"contingent," "could," "may," or other
future-oriented statements, are forward-looking statements. Such
forward-looking statements include, but are not limited to,
statements regarding our business plans, strategies and objectives,
and, in particular, statements referring to our expectations
regarding our ability to continue as a going concern, generate
increased market awareness of, and demand for, our service, realize
profitability and positive cash flow, and timely obtain required
financing. These forward-looking statements involve risks and
uncertainties that could cause actual results to differ from
anticipated results. The forward-looking statements are based on our
current expectations and what we believe are reasonable assumptions
given our knowledge of the markets; however, our actual performance,
results and achievements could differ materially from those expressed
in, or implied by, these forward-looking statements.
OVERVIEW
Baltia Air Lines, Inc. (the
"Company" or "Baltia" or "Baltia Air Lines")
is a certifying Part 121 (heavy jet operator) start-up United States
airline with U.S. Government fitness approval and is currently in
Stage 3 of FAA Air Carrier Certification, which is the final stage
and includes demonstration flights. Upon completion, Baltia
anticipates commencing scheduled non-stop service from JFK Int'l
Airport in New York to Pulkovo II Int'l Airport of St. Petersburg,
Russia. Baltia Air Lines, Inc. was organized in the State of New
York on August 24, 1989.
On January 5, 2009, in its Order
2009-3-7, the U.S. Department of Transportation (DOT) certified
Baltia Air Lines as fit, willing and able to engage in foreign
scheduled air transportation of persons, property, and mail, subject
principally to obtaining an Air Carrier Certificate and Operations
Specifications from the Federal Aviation Administration (collectively
“FAA certification”). In the DOT certification, Baltia
was awarded route 890 from JFK International Airport, New York, New
York to Pulkovo International Airport, St. Petersburg, Russia. Upon
completing FAA certification Baltia is also authorized to operate
worldwide charter services. Baltia had filed its application with the
DOT in October 2007.
In the last quarter of 2010, we
purchased a Boeing 747 aircraft from Kalitta Air. On October 23,
2014, the final C4 check was completed and the B747 aircraft passed
inspection. Baltia carries $100,000,000 aircraft liability insurance,
generally ground only, of which $10 million is through State National
Insurance Co. and $90 million through Lloyds of London. Baltia is in
the process of adding flight risk insurance of one billion dollars US
($1,000,000,000) prior to initiating flight. The Company will carry
airline liability insurance as required for a US airline by DOT
regulation.
Baltia intends to provide full
service, i.e. passenger, cargo and mail. An agreement between the
United States and Russia controls air transport of passengers and
cargo between the two countries. Only U.S. airlines and Russian
airlines are permitted to fly nonstop between the two countries.
Currently no U.S. or Russian carrier is providing non-stop service
between New York and St. Petersburg. Connecting service is provided
mainly by third-nation carriers individually and in code shares with
U.S. carriers. Finnair, Lufthansa and SAS are the leading competitors
in the US-Russia market. KLM, British Airways, Air France, Austrian
Airlines, and Swiss International also provide service. However, as
third-nation carriers, each must make an intermediate stop in its
respective country (Helsinki, Frankfurt, Stockholm, Copenhagen,
etc.). Delta and two Russian airlines, Aeroflot and Transaero,
currently operate non-stop between JFK and Moscow. With the
exception of the JFK-Moscow route, there exists no non-stop
competitive air transportation service on the routes for which Baltia
intends to apply.
Baltia has two registered trademarks
"BALTIA" and "VOYAGER CLASS" and five trademarks
are subject to registration.
Baltia's objective is to establish
itself as the leading non-stop carrier in the market niche over the
North Atlantic with operations with profitable growth over time. In
order to accomplish this objective, we intend to establish and
maintain high quality service standards which we believe will be
competitive with the European airlines currently providing connecting
flights. Baltia does not expect to be in direct competition with deep
discount airlines, including several East European airlines and the
offspring of the former Soviet airline Aeroflot, which provide
connecting flights.
Baltia intends to provide First,
Business, and Voyager Class passenger accommodations. Baltia's
passenger market strategy is tailored to particular preferences of
the various segments of its customer base, with marketing attention
particularly focused on American business travelers with interests in
Russia who require high quality, non-stop service from the US to
Russia. Soon after the inauguration of flight service, Baltia plans
to implement its frequent flyer program. As the marketing matures,
Baltia plans to advertise to the general public throughout the US,
and in Russia. Baltia also plans to sponsor selected industry and
trade events in the US and in St. Petersburg.
Baltia intends to establish customer
service and reservations centers in New York and in St. Petersburg,
to list Baltia's schedules and tariffs in the Official Airline Guide,
and to provide world-wide access to reservations on Baltia's flights
through a major Computer Reservations and Ticketing System ("CRS").
The Company intends to activate its reservations service when the DOT
issues its order authorizing Baltia to sell tickets (expected to be
approximately 30 to 45 days before the inaugural flight). Baltia has
identified the following market segments in the U.S.-Russia market:
(i) Business Travelers, (ii) General Tourism, (iii) Ethnic Travelers,
(iv) Special Interest Groups, (v) Professional Exchanges, and (vi)
Government and Diplomatic Travel.
Baltia believes that the its
non-stop service will be superior to the stop-over service currently
offered by third-nation airlines. A comparison between the two
services with respect to passenger convenience and cargo transport
efficiency is set forth below.
BALTIA - US flag, non-stop service:
With non-stop service, a passenger can fly from JFK to St. Petersburg
in about 8 hours in a Boeing B747 wide body airplane. Cargo arrives
containerized, palletized, and secure.
Foreign, stop-over journeys: With
stop-over service, it would take a passenger 10 to 18 hours to fly
through Helsinki, Copenhagen, Moscow, or Frankfurt on a foreign
carrier. In addition, passengers must change to narrow-body aircraft
at a layover airport. Cargo is “broken up” and manually
loaded onto narrow-body aircraft, or trucked from Helsinki.
Because of the increased reliability
and comfort of a non-stop flight, the Company expects to capture a
portion of the existing traffic.
Using its Boeing 747 true wide-body
aircraft, the Company is able to provide container, pallet, and block
space cargo carriage. The Company expects to carry contract cargo for
express shippers and plans to market its own “Baltia Courier”,
“Baltia Express”, and “Baltia Priority”
express service for letters and packages. The Company also expects
revenues from diplomatic mail and cargo, under the Fly America Act.
The Company has passenger service
and ground service arrangements at JFK and at Pulkovo II Airport in
St. Petersburg. As a carrier designated under the U.S.-Russia
agreement, Baltia is eligible to receive the same benefits in St.
Petersburg that a Russian designated carrier receives when arriving
in the US.
The Company intends to start the
JFK-St. Petersburg service with one round-trip flight per week with
progressive frequency increases to ultimately providing daily round
trips. Following the commencement of service on the JFK-St.
Petersburg route, Baltia's objective is to develop its route network
to Russia, Latvia, Ukraine, and Belarus. Once established, the
Company plans to build operating modules and apply them in developing
new markets.
Additional revenues from charter
flying: Following certification, the Company plans to utilize
aircraft time available between scheduled service to earn additional
revenues from charters and may include qualifying our aircraft for
military contracts.
Since inception, the Company has
been in the business of obtaining the requisite certifications of
which FAA certification, alone, remains pending. The Company
initiated FAA certification in New York. In December 2013, the
Company terminated that process and re-initiated FAA certification in
Michigan where its Base of Operations is established. On October 10,
2014, the Company passed Gate II and is currently in the third and
final phase of FAA certification. Upon completion of FAA
certification, Baltia will be an operating airline in the business of
air transportation of passengers, cargo and mail.
As of September 30, 2014, the
Company has a staff of seventy, primarily private contractors
specializing in certification. Upon commencing the business of air
carriage, Baltia expects to employ certain of those professional
contractors who have qualified under the FAA certification procedure
and have extensive major U.S. airline experience in aircraft
maintenance, airline operations, airline regulatory compliance,
reservation, information technology, passenger service and
administration.
CRITICAL ACCOUNTING
POLICIES
There have been no material changes
to the Company's critical accounting policies and estimates as
compared to the critical accounting policies and estimates and
described in the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2013, and filed on April 15, 2014, which we
believe are the most critical to aid you in fully understanding and
evaluating our reported financial results and the effect of the more
significant judgments and estimates that we use in the preparation of
our financial statements.
RESULTS OF OPERATIONS
We had no revenues during the nine
months ended September 30, 2014 because we do cannot commence revenue
flights until we complete the FAA certification, and cannot sell
tickets until such time.
For the three month
period ended September 30, 2014 and 2013, we reported general and
administrative expenses of $4,361,613 and $889,476, respectively, an increase
of $3,472,137, or 390%. We reported a net loss of $5,427,774 and $1,049,839,
for the three months ended September 30, 2014 and 2013, respectively, an
increase of $4,377,935, or 417%. This is primarily attributable to an increase
of approximately $1,787,000 in common stock issued for services, an increase of
$349,000 in contract costs, a $401,000 increase in insurance expense, and a
$372,000 increase in compensation related expenses; these and other general
administrative expenses have increased, when compared to prior periods, because
of the need for the Company to ramp up its overall operations as it enters into
the final stages of its certification process. In addition to the increase in
general and administrative expenses, FAA certification costs increased $896,441,
for the same reason general and administrative expenses increased during the
three month period ended September 30, 2013.
For the nine month
period ended September 30, 2014 and 2013, we reported general and administrative
expenses of $9,634,461 and $4,200,139, respectively, an increase of $5,434,322,
or 129%. We reported a net loss of $11,543,843 and $4,757,886, for the nine
months ended September 30, 2014 and 2013, respectively, an increase of $6,785,957,
or 143%. This is primarily attributable
to an increase of approximately $1,533,000 in common stock issued for services,
an increase of $691,000 in contract costs, a $175,000 increase in insurance
expense, a $568,000 increase in compensation related expenses, and a $133,000
increase in professional fees; these and other general administrative expenses
have increased, when compared to prior periods, because of the need for the
Company to ramp up its overall operations as it enters into the final stages of
its certification process. In addition to the increase in general and
administrative expenses, FAA certification costs increased $1,319,000, for the
same reason general and administrative expenses increased during the nine month
period ended September 30, 2013.
Our future ability to achieve
profitability in any given future fiscal period remains highly
contingent upon our beginning flight operations. The management
believes that the Company has the necessary funding to commence
revenue flight operations, subject to completion of the FAA Air
Carrier Certification. If commenced, there can be no assurance that
such operations would be profitable.
LIQUIDITY AND CAPITAL
RESOURCES
The accompanying
financial statements have been prepared assuming that the Company will continue
as a going concern. The Company has incurred a deficit during its development
stage of approximately $ 106,684,350 million and consumed approximately $35,463,568
million of cash due to its operating activities. The Company may not have
adequate readily available resources to fund operations through December 31,
2014. This raises substantial doubt about the Company's ability to continue as
a going concern. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
Since our inception, we
have incurred substantial operating and net losses, as well as negative
operating cash flows. As of September 30, 2014, our working capital deficit was
$2,705,641 and our stockholders' deficit was $1,542,374. Our stockholders'
equity balance at September 30, 2013 was $461,365, compared to the $1,542,374
stockholders' deficit reported as of September 30, 2014, an increase in
stockholders' deficit of $2,003,739.
Our operating activities
utilized $6,874,998 in cash during the nine months ended September 30, 2014, an
increase of $3,549,267 from the $3,325,731in cash utilized in operating
activities during the nine months Ended September 30, 2013.
For the nine months
ended September 30, 2014 and 2013, our financing activities provided cash of $7,472,038
and $3,408,014, respectively, primarily from the sale of our common stock. Our
unrestricted cash balance decreased to $29,566 at September 30, 2014 from $54,591
reported at September 30, 2013.
We had no significant planned
capital expenditures, budgeted or otherwise, as of September 30, 2014
Item 3. Quantitative and
Qualitative Disclosures About Market Risk.
Baltia plans to initiate its
scheduled service with nonstop flights from New York to
St.Petersburg, Russia. The current economic sanctions on Russia may
impact the passengers, cargo and mail carried on those flights.
Item 4T. Controls and Procedures.
Our Chief Executive Officer and
Chief Financial Officer, based on evaluation of our disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
of the Securities Exchange Act of 1934, as amended) required by
paragraph (b) of Rule 13a-15 or Rule 15d-15, as of September 30,
2014, have concluded that our disclosure controls and procedures were
effective in ensuring that information required to be disclosed by us
in the reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported within the time periods
specified in the Commission's rules and forms. Our Chief Executive
Officer and Chief Financial Officer also concluded that, as of
September 30, 2014, our disclosure controls and procedures are
effective in ensuring that information required to be disclosed by us
in the reports that we file or submit under the Exchange Act is
accumulated and communicated to our management, including our Chief
Executive Officer and Chief Financial Officer, to allow timely
decisions regarding required disclosure.
There has been no change in our
internal controls and other factors, other than as reported in the
previous quarter's 10-Q and Company's Report 8K Item 4.01 on April 9,
2014. While the Company's existing controls may be adequate at
present, upon the commencement of flight revenue service, we intend
to implement controls appropriate for airline operations.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
The Company is not subject to any
material pending legal proceedings as defined in 17 CFR 229.103 (Item
103) Regulation S-K We are, however, subject to various routine legal
proceedings and claims incidental to our business which we believe
will not have a material adverse impact on our financial position to
complete FAA Certification and initiate revenue operations.
Item 2. Unregistered Sales of
Equity Securities and Use of Proceeds.
During the nine months ended September 30, 2014, we issued 1,450,613,042 shares of our common stock in exchange for cash. The shares are not registered, subject to restrictions as to transferability, were valued at $0.005 per share and reflect approximately 22% of the unrestricted share market value at the time of issuance.
All of the above issuances were
deemed to be exempt under rule 506 of Regulation D and Section 4(2)
of the Securities Act of 1933, as amended. No advertising or general
solicitation was employed in offering the securities. The offerings
and sales were made to a limited number of persons, all of whom were
accredited investors, business associates or executive officers of
the Company, and transfer was restricted by the Company in accordance
with the requirements of the Securities Act of 1933, as amended. In
addition to representations by the above-referenced persons, we have
made independent determinations that all of the above-referenced
persons were accredited or sophisticated investors, and that they
were capable of analyzing the merits and risks of their investment,
and that they understood the speculative nature of their investment.
Furthermore, all of the above-referenced persons were provided with
access to our Securities and Exchange Commission filings.
Item 3. Default Upon Senior
Securities.
None.
Item 4. Mine Safety Disclosures
Not applicable
Item 5. Other Information.
None.
Item 6.
Exhibits.
3. CORPORATE CERTIFICATES AND BYLAWS
3.1.1
Certificate of Incorporation (as amended) of Baltia Air Lines, Inc.
Incorporated by reference to Exhibit 3.1.1 to
Baltia Air Lines Inc.'s reported on Form 10-K, for the year ended December 31,
2012, as filed April 16, 2013
3.1.2
Certificate of Incorporation amendment of Baltia Air Lines, Inc. (as amended and
filed on June 24, 2011)
Incorporated by reference to Exhibit 3.1.2 to
Baltia Air Lines Inc.'s reported on Form 10-K, for the year ended December 31,
2012, as filed April 16, 2013
3.1.3
Certificate of Incorporation amendment of Baltia Air Lines, Inc. (as amended and
filed on May 24, 2012)
Incorporated by reference to Exhibit 3.1.3 to
Baltia Air Lines Inc.'s reported on Form 10-K, for the year ended December 31,
2012, as filed April 16, 2013
3.1.4
Certificate of Incorporation amendment of Baltia Air Lines, Inc. (as amended and
filed on December 27, 2012).
Incorporated by reference to Exhibit 3.1.4 to
Baltia Air Lines Inc.'s reported on Form 10-K, for the year ended December 31,
2012, as filed April 16, 2013
3.1.5
Certificate of Incorporation amendment of Baltia Air Lines, Inc. (as amended and
filed on July 29, 2013). Incorporated
by reference to Exhibit 3.1.5 as reported on Baltia Air Lines's Form Q-10 filed
21 August 2013.
3.1.6
Certificate of Incorporation amendment of Baltia Air Lines, Inc. (as amended and
filed on February 12, 2014).
Incorporated by reference to Exhibit 3.1.6 as
reported on Baltia Air Lines's Form 10-K filed April 15 2014.
3.1.7
Certificate of Incorporation amendment of Baltia Air Lines, Inc. (as amended and
filed on June 18, 2014).Incorporated by reference to Exhibit 3.1.7 as
reported on Baltia Air Lines's Form 10-Q for period ending June 30, 2014, filed August 19, 2014.
3.1.8
Certificate of Incorporation amendment of Baltia Air Lines, Inc. (as amended and
filed on July 20, 2014).Incorporated by reference to Exhibit 3.1.8 as
reported on Baltia Air Lines's Form 10-Q for period ending June 30, 2014, filed August 19, 2014.
3.2 Bylaws of
Baltia Air Lines, Inc. (amended and ratified November 7, 2011)
Incorporated by reference to Exhibit 3.2.2 to
Baltia Air Lines Inc.'s reported on Form 10-K, 21 Dec 2011 from the year ended
December 31, 2010.
10. MATERIAL CONTRACTS
10.1. - Fuel
supply Agreement between Joint Stock Company "SOVEX" and Baltia Air Lines, Inc. with Appendix I and Appendix II, valid as of 12/01/2013 to 12/31/2014.
Incorporated by reference to Exhibit 10.1 to Company's Form 10-Q for period ending June 30, 2014, filed August 19, 2014.
10.2 - Amendment II - Aircraft Engine Lease Agreement, Logistic Air Inc.,
executed May 15, 2014, effective through February 1, 2015.
Incorporated by reference to Exhibit 10.2 to Company's Form 10-Q for period ending June 30, 2014, filed August 19, 2014.
.
10.3 -
Product and Services Agreements between Navtech Systems Support Inc. and Baltia
Air Lines, Inc. Dated January 15, 2010 with confidential portion omitted and
filed separately with the Commission pursuant to a request for confidential
treatment. Incorporated by
reference to Exhibit 10.7 to Company's 10-K/A for year 2010 as filed December
21, 2011 effective to January 14, 2015.
10.4 - Ground
Handling Agreement at Pulkovo Airport between ZAO Cargo Terminal Pulkovo and
Baltia Air Lines, Inc. effective June 1, 2014 through May 31, 2016.
Incorporated by reference to Exhibit 10.4 to Company's Form 10-Q for period ending June 30, 2014, filed August 19, 2014.
10.5 -
Aircraft and/or Engine Maintenance Services Agreement between Kalitta Air, LLC
and Baltia Air Lines, Inc., and Letter Agreement to Extend Aircraft Maintenance
Service Agreement between Kalitta Air and Baltia Air Lines, Inc. effective
December 24, 2013 until December 24, 2015 with 1-year extension with 60-day
notice. Incorporated by reference to
Exhibit 10.5 to Company's 10-K for 2013 filed April 15, 2014.
10.6 - First Amendment to Product and Services Agreements between Navtech
Systems Support Inc. and Baltia Air Lines, Inc. dated January 15, 2010,
and effective to January 15, 2015.
Incorporated by reference to Exhibit 10.10 to
Company's 10-Q/A for 3rd quarter 2011, corrected and filed March 29,
2012.
10.7 Lockton Aircraft Hull, Spares and Airline Legal Liability Insurance,
Baltia Air Lines, Inc. insured, effective June 15, 2014 to June 15, 2015.
Incorporated by reference to Exhibit 10.7 to Company's Form 10-Q for period ending June 30, 2014, filed August 19, 2014.
10.8
Certificate of Insurance, The Boeing Company and Boeing Commercial Airplanes
insured, Hull, Aircraft and Airport Premises, including war perils, ground risks
only, excluding passenger liabilities, effective January 8, 2013 to April 1,
2015. Incorporated by reference
to Exhibit 10.8 to Company's 10-K for 2013 filed April 15, 2014.
10.9 Kalitta
Maintenance Agreement Certificate of Insurance, Kalitta Air, LLC insured, Hull
& Liability ground only, Airport Premises, effective April 1, 2014 to April
1, 2015. Incorporated by reference to
Exhibit 10.9 to Company's 10-K for 2013 filed April 15, 2014.
10.10
Certificate of Insurance, Port Authority of New York and New Jersey insured,
Airport Premises, effective April 1, 2014 to April 1, 2015.
Incorporated by reference to Exhibit 10.10 to
Company's 10-K for 2013 filed April 15, 2014.
10.11 Premium
Financing Agreement by Premium Assignment Corporation. Effective as of April 1,
2014 to April 1, 2015.
Incorporated by reference to Exhibit 10.11 to
Company's 10-Q for period ending March 30, 2014, filed May 20, 2014
10.12 - John
F. Kennedy Airport - Terminal 4, Lease Agreement between JFK International Air
Terminal, LLC and Baltia Air Lines, dated November 17, 2008, effective until
terminated by either party.
Incorporated by reference to Exhibit 10.12 to Baltia Air Lines Inc.'s report on
Form 10-K for the year ended December 31, 2012.
10.12.1 -
Certificate of Insurance, JFK International Air Terminal LLC insured, Terminal 4
Leased space to Baltia Air Lines, Inc., effective April 1, 2014 to April 1,
2015. Incorporated by reference to
Exhibit 10.12.1 to Company's 10-K for 2013 filed April 15, 2014.
10.13 - JFK
Airport Building 151 Lease Agreement, between Japan Airlines Management Corp.
and Baltia Air Lines, effective on September 1, 2011, valid through November 30,
2015. Incorporated by reference to
Exhibit 10.13 to Baltia Air Lines Inc.'s report on Form 10-K for the year ended
December 31, 2012 as filed April 16, 2013.
10.13.1 -
Certificate of Insurance, Japan Airlines Management Corp. insured, Building 151
Sublease Agreement, effective April 1, 2014 to April 1, 2015.
Incorporated by reference to Exhibit 10.13.1
to Company's 10-K for 2013 filed April 15, 2014.
10.14 -
Willow Run Airport facility lease between Wayne County Airport Authority and
Baltia Air Lines, effective from June 1, 2013 until May 31, 2015.
Incorporated by reference to Exhibit 10.14 to
Company's 10-Q for 3rd quarter 2013 filed November 19, 2013.
10.14.1 -
Amendment to Willow Run Airport facility lease, effective October 13, 2013 to
May 31, 2015. Incorporated by
reference to Exhibit 10.14.1 to Company's 10-Q for 3rd quarter 2013 filed
November 19, 2013.
10.14.2 -
Amendment to Willow Run Airport facility lease, effective February 2013 to May
21, 2015. Incorporated by
reference to Exhibit 10.14.2 to Company's 10-Q for 3rd quarter 2013 filed
November 19, 2013.
10.14.3 -
Certificate of Insurance, Wayne County Airport Authority insured, Airport
Premises, effective April 1, 2014 to April 1, 2015.
Incorporated by reference to Exhibit 10.14.3
to Company's 10-K for 2013 filed April 15, 2014.
10.15 -
Pulkovo Airport facility SubLease Agreement between LLC Northern Capital Gateway
and Baltia Air Lines, effective from March 1, 2013, auto renewed unless objected
to by Sublessor.
Incorporated by reference to Exhibit 10.15 to
Company's 10-Q for period ending March 30, 2014, filed May 20, 2014
10.16 -
Contract affirmed by Board resolution affirming Agreements between the Company
and its officers agreeing not to sell the shares issued to them until the
Company receives FAA Certification and commence its revenue flights.
Incorporated by reference to Exhibit 10.16 to
Baltia Air Lines Inc.'s report on Form 10-K for the year ended December 31,
2012.
10.17 - Purchase of Cessna Citation 500 aircraft N606KR.
Incorporated by reference to Form 8-K filed
May 21, 2013.
10.17.1 - Certificate of Insurance, Baltia Air Lines, Inc. insured, Cessna 500 N606KR to
July 26, 2014. Incorporated by
reference to Exhibit 10.17.1 to Company's 10-Q for 3rd quarter 2013 filed
November 19, 2013. (NOTE: Aircraft currently not being operated.)
10.18 - Loan
Agreement (amended) dated October 14, 2013 between Baltia Air Lines, Inc. and
Eastern Construction & Electric, Inc. for purchase of Boeing 747 aircraft.
Incorporated by reference to
Exhibit 10.18 to Company's 10-Q for 3rd quarter 2013 filed November 19,
2013.
10.19 -
Flight Training Agreement Aircraft Type B747-200 between Kalitta Air, LLC and
Baltia Air Lines, Inc. effective October 10, 2013 to December 31, 2014.
Incorporated by reference to Exhibit
10.19 to Company's 10-Q for 3rd quarter 2013 filed November 19, 2013.
10.20 - B747 Aircraft Hull and Liability Binder - Renewal, Registration N706BL,
Meadowbrook Insurance Group, effective April 1, 2014 to April 1, 2015.
Incorporated by reference to Exhibit 10.20 to
Company's 10-K for 2013 filed April 15, 2014.
10.21 - Purchase Report - T-500 A/C Tractor, Costal Engine Service (2013)
Incorporated by reference to Exhibit 10.21 to
Company's 10-K for 2013 filed April 15, 2014.
10.22 - Loan Agreement - Legal services rendered by International
Business Law Firm PC to Baltia Air Lines, executed June 30, 2014.
Incorporated by reference to Exhibit 10.22 to
Company's 10-K for 2013 filed April 15, 2014.
10.23 -
Workers Compensation and Employer Liability Insurance - CHUBB Group to Baltia
Air Lines, executed June 30, 2014, effective February 6, 2014 to February 6, 2015.
Incorporated by reference to Exhibit 10.23 to
Company's 10-Q for period ending March 30, 2014, filed May 20, 2014.
10.24 – Cargo Handling at JFK
– Cargo Airport Services USA and Baltia, valid to 1 January
2017 and continued annually until one party serves the other party
with written notice not to renew.
10.25 - Security Service at JFK –
FJC Security Services, Inc., valid to 9/18/15 with automatic annual
renewal unless one party serves the other party with written notice
not to renew.
10.26- Ground Handling at JFK - Swissport Agreement, Standard IATA
Agreement of 1998 Ramp and Passenger Handling valid to May 16, 2017.
10.27- Maintenance Services Agreement, Standard IATA
Agreement of 1998 with F&E Maintenance valid to May 16, 2017.
10.28 - Fuel Agreement, World Fuel Services Inc., valid to September 1, 2016.
CERTIFICATIONS
31.1 Certification by Chief
Executive Officer and Chief Financial Officer pursuant to
Sarbanes-Oxley Section 302, provided herewith.
32.1 Certification by Chief
Executive Officer and Chief Financial Officer pursuant to 18 U.S. C.
Section 1350, provided herewith.
SIGNATURES
Pursuant to the requirements of
Section 12 of the Securities Act of 1934, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned thereunto duly authorized.
DATED: November 19, 2014
BALTIA AIR LINES, INC.
/s/ Igor Dmitrowsky
------------------------
Igor Dmitrowsky
Chief Executive
Officer and
Chief Financial Officer (principal accounting
officer)
EXHIBIT 31.1
BALTIA AIR LINES, INC.
OFFICER'S CERTIFICATE PURSUANT TO
SECTION 302
I, Igor Dmitrowsky, the Chief
Executive Officer and Chief Financial Officer of Baltia Air Lines,
Inc., certify that:
1. I have reviewed this quarterly
report on Form 10-Q of Baltia Air Lines, Inc.;
2. Based on my knowledge, this
report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were made,
not misleading with respect to the period covered by this report;
3. Based on my knowledge, the
financial statements, and other financial information included in
this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the small business
issuer as of, and for, the periods presented in this report;
4. The registrant's other certifying
officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) for the registrant and have:
(a) Designed such disclosure
controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is
being prepared;
(b) Designed such internal control
over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of
the registrant's disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
(c) Disclosed in this report any
change in the registrant's internal control over financial reporting
that occurred during the registrant's most recent fiscal quarter (the
registrant's fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial reporting;
and
5. The registrant's other certifying
officer(s) and I have disclosed, based on our most recent evaluation
of internal control over financial reporting, to the registrant's
auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
(a) All significant deficiencies and
material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely
affect the registrant's ability to record, process, summarize and
report financial information; and
(b) Any fraud, whether or not
material, that involves management or other employees who have a
significant role in the registrant's internal control over financial
reporting.
/s/ Igor
Dmitrowsky
------------------------ Date: November 19, 2014
Igor
Dmitrowsky
Chief Executive Officer and
Chief Financial
Officer
(principal accounting officer)
EXHIBIT 31.2
BALTIA AIR LINES, INC.
CERTIFICATION PURSUANT TO 18 U.S.C.
SECTION 1350, AS ADOPTED PURSUANT
TO SECTION 906 OF THE SARBANES-OXLEY
ACT OF 2002
In connection with the Quarterly
Report Baltia Air Lines, Inc. ("the “Company”")
on Form 10-Q for the period ended September 30, 2014 as filed with
the Securities and Exchange Commission on the date hereof (the
Report), I, Igor Dmitrowsky, Chief Executive Officer and Chief
Financial Officer (principal accounting officer) of the Company,
certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with
the requirements of section 13(a) or 15(d) of the Securities Exchange
Act of 1934; and
(2) The information contained in the
Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.
A signed original of this written
statement required by Section 906 has been provided to Baltia Air
Lines, Inc. and will be retained by Baltia Air Lines, Inc. and
furnished to the Securities and Exchange Commission or its staff upon
request.
/s/ Igor
Dmitrowsky
------------------------ Date: November 19, 2014
Igor
Dmitrowsky
Chief Executive Officer and
Chief Financial
Officer
(principal accounting officer)
16
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lATA STANDARD GROUND HANDLING AGREEMENT
(SIMPLIFIED PROCEDURE)
Annex 8.1 .0-Locations(s), Agreed Services and Charges
to the Standard Ground Handling Agreement (SGHA) of January 2008
between: | Cargo Airport Services USA, d/b/a Consolidated Aviation Services
|
having its principal office at: | Cargo Building 261
JFK International Airport Jamaica, New York, 11430 |
and {hereinafter referred to as "the Handling Company") |
and | Baltia Air Lines Inc. |
having its principal office at: | Building 151 JFK International Airport Jamaica, New York 11430 |
and {hereinafter referred to as "the Carrier") |
|
effective from: |
January 01,2015
|
This Annex | B.1.0 |
for the locations: | JFK International Airport (JFK) Building 151
|
is valid from: | TBD |
and replaces: | Nil |
PREAMBLE: This Annex B is prepared in accordance with the simplified procedure whereby the Carrier and the Handling Company agree that the terms of the Main Agreement and Annex A of the SGHA Version 2008 as published by the International Air Transport Association shall apply as if such terms were repeated here in fulL By signing this Annex B, the parties confirm that they are familiar with the aforementioned Main Agreement and Annex A.
Annex B 1.0 WH Handling
Handling Co. Initials _ MD __
Carrier Initials __RT___
CAS/Baltia JFK
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Paragraph 1 - Services and Handling Charges
1.1. The Handling Company shall perform at its air cargo facility the Annex A items enumerated in the following sub-paragraph 1.1.1:
1.1.1 CARGO
SECTION 1 -Representation, Administration and Supervision
Sub-section 1.1 General
1.1.1, 1.1.2, 1.13, 1.1.4
Sub-section 1.2 Administrative Functions
1.2.1, 1.2.2, 1.2.3 ((f) (g) (i)
SECTION 2 - Passenger Services
Not Applicable
SECTION 3 - Ramp Services
Not Applicable
SECTION 4-Load Control, Communications and Flight Operations
Not Applicable
SECTION 5 - Cargo and Mail Services
Sub-section 5.1 Cargo and Mail Handling -General
5.1.1, (a) (1 ,2,3,4) (c) (d), 5.1.2, (a) (1 ,2,3,4), 5.1.3 (a) (1 ,2,3,5,6,7), 5.1.4 (a,), 5.1.5, 5.1.6
Sub-section 5.2 Customs Control
5.2.1, 5.2.2, 5.2.3, 5.2.4
Sub-section 5.3 Irregularities Handling
5.3.1, 5.3.2, 5.5.3, 5.3.4 (a), 5.3.5
Sub-section 5.4 Document Handling
5.4.1, 5.4.2, 5.4.3
Sub-section 5.5 Physical Handling Outbound/Inbound
5.5.1' 5.5.2, 5.5.3, 5.5.4, 5.5.5, 5.5.6
Sub-section 5.6 Transfer/Transit Cargo
5.6.1, 5.6..2, 5.6.3 (a) (1), 5.6.4
Sub-section 5. 7 Post Office Mail
5.7.1, 5.7.2, 5.7.3 (a), 5.7.4 (a), 5.7.5, 5.7.6, 5.7.7(a) (1) (2), 5.7.8, 5.7.95.7.10
Annex B 1.0 WH Handling
Handling Co. Initials _MD_
Carrier Initials __RT___
CAS/Baltia JFK
SECTION 6 - Support Services
Sub-section 6.1 Accommodation
6.1.1(a)(b)
Sub-section 6.2 Automation/Computer Systems
6.2.1 (a) (b) (c) (1,2), 6.2.2 (a) (b) (c) (1,8)
Sub-section 6.3 Unit Load (ULD) Device Control
6.3.1 (a) (2), 6.3.2 ,6.3.3, 6.3.4, 6.3.5
Sub-section 6.6 Surface Transport
Provided by ramp service company..
SECTION 7 - Security
Sub-section 7.2 Cargo and Post Office Mail
7.2.1 (a) (1 ,2 ,3, 4, 5)
1..2 For the Cargo and Mail services enumerated in sub-paragraph 1.1.1 above,and based on the submitted tonnage forecast of 2 to 3 weekly flights utilizing 8747 aircraft, the Carrier will be charged as follows:
JFK
| | Unit Cost USD | Unit Measure | COMMENT
|
|
Loose Cargo Handling | $0.1250 | Per kilo | Monthly minimum 100,000 kilos
|
| ULD Handling | $95.00 | Per unit | Monthly max 10% of total tonnaqe
|
| EU messaging fee | $1.00 and $5.00 | Per entry | $1.00 electronic and $5.00 manual entry
|
| Dry ice check | $25.00 | Per AWB |
|
| Mail Handling Export | $0.14 | Per kilo | Built and scanned
|
| Mail Handling Import | $0.12 | Per kilo | Delivered to USPS
|
|
| AWB Preparation | $20.00 | Per AWB |
|
| DG acceptance | $80.00 | Per UN |
|
| Human remains Handling | $75.00 | Per shipment |
|
| TSA cargo screening | $225,00 | Per flight | Export only
|
| Cargo transfer to OA | $0.065 | Per kilo | Min. transfer on airport $135.00
|
| AMS | NA | Included in the kilo Rate |
|
Quoted rates contained in this Annex B do not include any airport, city or state taxes which may be imposed upon the Handling Company as a result of the activities conducted for the Carrier.
1.3 No extra charge will be made for providing the services to the Carrier's off schedule operation, ground interruption and/or overnight off schedule operation provided that the services can be
covered by existing shift personnel. Any additional work resulting in additional costs must be pre- approved by the Carrier's local representative.
Annex B 1.0 WH Handling
Handling Co. Initials _ MD __
Carrier Initials __RT___
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1.4 No extra charges will be made for providing the service at night, Saturday, Sunday or legal
holidays.
1.5 Charges stated above are based on the Handling Company's current costs and shall be fixed for the first year and adjusted each anniversary date thereafter so long as this Annex Bis in effect, notwithstanding Article 11.11 and 11.12 of the Main Agreement. The Handling Company may adjust charges in an amount equal to any increases in costs over which it has no practical control , provided such adjustments are made in accordance with Article 8.1.2 and notice of any such increases is provided to Carrier in writing. All costs and cost increases will be reviewed prior to the Annex B anniversary date. Cost and any planned increases shall include but not be limited to rent, labor, insurance, fuel and security shall not exceed the annual published CPl. Increases shall not be charged to Carrier without approval however Carrier shall not unreasonably withhold approval.
PARAGRAPH 2-Additional Charges
2.1 All other additional services and facilities not mentioned in Annex A will be charged at the current published incidental handling rates of the Handling Company.
2.2 Additional man hours requested by the Carrier over and above that necessary to carry out the services set forth in Sub-Paragraph 1.1 shall be provided at the following rates:
Supervisors | $28.00 USD per man hour S/T | $42.00 USD per man hour 0/T
|
Agents | $24.00 USD per man hour S/T | $36.00 USD per man hour 0/T
|
2.3 The Handling Company will provide exclusive office space at market rate as requested.
2.4 Additional services not included in this Annex B will be provided at the published CAS Ad hoc rates.
PARAGRAPH 3 - Disbursements
3.1 Any disbursements made by the Handling Company on behalf of the Carrier will be reimbursed by the Carrier at cost plus an accounting surcharge of 10%.
PARAGRAPH 4 - Limits of Liability
4.1 Article 8of the Main Agreement in its entirety shall apply as set forth word for word herein.
4.2 The Handling Company reserves the right to object, challenge, litigate or otherwise dispute at its sole discretion, any duties, levies, taxes, assessments, liens or any other charge levied by any government or government agency or authority. Should Carrier pay any of the aforementioned charges without the written consent of the Handling Company, Carrier shall be solely liable for such charges without set-off, charge back, pass through or any deduction whatsoever to amounts due to Handling Company who shall have no liability whatsoever for charges paid by Carrier.
PARAGRAPH 5 - Areas of Responsibility
5.1 The area of responsibility as mentioned in Sub-Sections 4.3 and 4.6 of Annex A is the responsibility of the Carrier.
Annex B 1.0 WH Handling
Handling Co. Initials _MD_
Carrier Initials __RT___
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5.2 The Handling Company will provide non-exclusive office furniture, computers, telephones and other office equipment and supplies related to the handling of the Carrier's cargo work except in exclusive office areas.
5.3 The Handling Company will provide plastic pallet covers, shrink wrap and skids.
5.4 The Handling Company will provide Cargo Spot system for US Customs required AMS. Carrier will be responsible to transmit the manifest in accordance with CBP requirements.
5.5 Carrier may furnish and install, at its own cost and expense, its identification signs at the Handling Company's cargo warehouse. Such signs shall be displayed, subject to the Handling Company and Airport approval as to number, degree of permanence, design, location and size.
5.6 The Handling Company will provide scanners, chargers, hardware, and internet connection for mail handling.
5. 7 The Carrier shall provide, at its own cost and expense, at start of service only, such initial orientation or training of the Handling Company's personnel as may be required in connection with the furnishing of services hereunder.
5.8 A Service Level Agreement (SLA) mutually agreed between the Handling Company and the Carrier will determine handling standards.
PARAGRAPH 6 - Transfer of Services
6.0 All materials and outside services used in the performance of this Annex B as requested by the Carrier shall be charged to Carrier at the Handling Company's acquisition cost plus an administrative handling surcharge of five percent (5%).
6.1 The Handling Company shall have the right to sub-contract services and will obtain prior written authorization from the Carrier prior to implementing any sub-contracted or third party services.
6.2 The Handling Company will sub-contract security services to a qualified security company and will ensure such company is authorized to operate in accordance with Carrier's TSA Model Security Program. The Handling Company will obtain prior written authorization from the Carrier prior to subcontracting any such security services.
PARAGRAPH 7 - Settlement
7.1 Notwithstanding Sub-Article 7.2 of the Main Agreement, settlement of the account shall be effected in local currency. The Handling Company shall invoice the Carrier monthly at the rate of charges described in this Annex B, and the Carrier shall pay such invoice (s) within thirty (30) days of receipt. Date of receipt shall be the date of delivery to the local Cargo Manager of the Carrier. The Handling Company's wire transfer information is as follows:
Account Name: | Cargo Airport Services USA, LLC
|
Bank: | M and T Bank, P.O. Box 4607, Buffalo, NY
|
Account# | 9853000371 ABA# 022000046
|
SWIFT Code | MANTUS33
|
Annex B 1.0 WH Handling
Handling Co. Initials _MD_
Carrier Initials __RT___
CAS/Baltia JFK
[LOGO: for cargo passenger and ramp handling CAS]
Billing shall be sent to the Carrier at the following address:
Baltia Air Lines Inc.
Building 151
JFK International Airport
Jamaica, New York 11430
Attn: Mr. Russell Thal
E-mail: russ.thal@baltia.com
Phone: (718) 244-88.80
7.2 Invoices payments not received by the Handling Company within thirty (30) days of invoice date shall accrue a late charge calculated at 1.5% per month until received.
PARAGRAPH 8 - Supervision and Administration
Not Applicable
Paragraph 9 - Duration, Modification and Termination
9.1 Duration
9.1.1 Notwithstanding Article 11.4 and 11.5 of the Main Agreement, the initial term of this Annex B shall be for a period of three (3) years. Thereafter it shall continue from year to year unless either party notifies the other party in writing ninety (90) days prior to such renewal date of its intent not to renew.
9.1.2 Notwithstanding Sub-Article 11.11 of the Main Agreement the rates contained in Paragraph 1 shall be fixed for the first year and adjusted each anniversary date thereafter so long as this Annex B is in effect. The adjustment will be in the amount equal to the percentage of increase in the Consumer Price Index (CPI) published by the United States Government for the geographic region beginning from the previous anniversary date and ending on the day before the adjustment anniversary date multiplied by the prices and rates established of the previous anniversary.
9.2 Modification
9.2. 1 Any modification to this Annex Bshall be made by awritten amendment signed by both parties.
9.2.2 Notwithstanding Article 11 of the Main Agreement the Handling Company shall be permitted to assign this Annex B to its senior secured lenders, provided that, the Handling Company shall remain liable for all of its obligations following such assignment
10.3 Termination
10.3.1 Notwithstanding Sub-Paragraph 8.1 .1 of this Annex B, this Annex B may be terminated by either party at any time with ninety (90) days of written notice to the other party.
Annex B 1.0 WH Handling
Handling Co. Initials _MD_
Carrier Initials __RT___
CAS/Baltia JFK
[LOGO: for cargo passenger and ramp handling CAS]
PARAGRAPH 11 - Notification
In accordance with Sub-article 11.3 of the Main Agreement, any notice or communication to be given hereunder shall be sent via Certified Mail return receipt requested and be addressed to the respective parties as follows:
To Carrier: | To Handling Company: |
Baltia Air Lines Inc.
Building 151, JFK International Airport W
Jamaica, New York 11430
Attention: Mr. Russell Thal
Phone: (718) 244-8880
Email: russ.thal@baltia.com
|
Cargo Airport Service USA., LLC dba
Consolidated Aviation Services
Building 261, JFK International Airport
Jamaica, New York 11430
Attention: Michael A. Duffy
Phone: (718) 244-0900 mduffy@casusa.com
|
PARAGRAPH 12 - Governing Law
12.1 In accordance with Article 9 of the Main Agreement, this Annex B shall be governed by and interpreted in accordance with the laws of New York, USA.
12.2 In accordance with Article 9 of the Main Agreement, courts for the resolution of disputes shall be the Southern District Courts of New York, USA.
PARAGRAPH 13 -Insurance
13.1 The Customers and the Handling Company's General Liability Insurance Coverage shall include comprehensive general liability insurance covering bodily injury liability, including death and property damage liability, product and completed operations liability and comprehensive automobile liability insurance covering hired and non-owned vehicles operated at JFK Airport excluding any liability under applicable road traffic acts or similar law in the amount of $25,000,000.00 USD, each occurrence, or such higher limit as may be carried.
The foresaid policies of insurance shall also provide or contain an endorsement of Cargo Airport
Services USA LLC , Japan Management Company and the Port of Authority of New York and New
Jersey as additionally insured.
13.2 The Handling Company will name the Customer as additionally insured and provide copies of the insurance certificates within fifteen (15) days of the commencement of service. The Handling Company will advise the Customer of any changes in the insurance coverage policy.
Annex B 1.0 WH Handling
Handling Co. Initials _MD_
Carrier Initials __RT___
CAS/Baltia JFK
[LOGO: for cargo passenger and ramp handling CAS]
PARAGRAPH 14-ACCEPTANCE
14.1 In lieu of execution of this Annex B, acceptance of the services herein specified shall constitute the Carrier's acceptance of the terms and conditions herein specified.
Signed the _26_ of _SEP_ 2014
At _JFK,_NY___
For and on behalf of
Cargo Airport Services USA, dba
Consolidated Aviation Services
By: ___/signed/____
Michael A. Duffy
President & CEO
|
Signed the _30_ of _SEP_ 2014
At _JFK,_NY___
For and on behalf of Baltia Air Lines Inc.
By: ___/signed/____
Mr. Russell Thal
Executive Vice President
|
Annex B 1.0 WH Handling
Handling Co. Initials _MD_
Carrier Initials __RT___
CAS/Baltia JFK
FJC Aviation Services
Security. Service.
|
Aviation Services JFK Cargo Center Bldg. 75-Room 228 Jamaica, NY 11430 Phone: 718.244.1400 FAX: 718.244.7315 www.fjcsecurity.com
|
September 16, 2014
Baltia Airlines
Building 151, Room 361
JFK International Airport
Jamaica, NY 11430
Attention: Mr. Igor Dmitrowsky-President & CEO
Re: Security Services Cost Agreement for Baltia Airlines
Dear Igor:
I am pleased to submit this Cost Proposal for Security Services on behalf of FJC Security Services, Inc. ("FJC"} for your consideration.
Please be advised that our bill rates are primarily driven by the wages and benefits we intend to provide our employees. Should you find these budget estimates do not fit with your planning projections we would be happy to discuss an alternative solution.
Company Overview
As you may know, the Owner and President Frank Califano, established FJC in October of 1988 and. FJC Senior management is proud to be one of the leading security firms in the greater New York area. FJC employs over 6,500 personnel throughout the metropolitan area with annual revenues ln excess of 240 million dollars. Our services are provided to the Airline Services Industry, Property Management companies, Government Agencies and private business.
The FJC Aviation Division was developed in response to the growing need of our Airline clients to receive dedicated and cost-effective services with local support. David D. Link, Sr. Vice President oversees our Aviation Services Operations from offices located in Building 75 at JFK International Airport.
Operational Strengths
Our state-of-the-art data and voice computer system allows our.staff and clients to benefit from the efficiency of concise. scheduling, payroll and Invoicing reports.
FJC draws from the available labor market through job fairs, the ranks of the military, Law Enforcement agencies. and through employee referrals. Weekly payroll distribution, employee vacations, free uniforms, benefits and opportunity for advancement all help to attract and retain qualified personnel.
Page 1
FJC Aviation Services
Security. Service.
|
Aviation Services JFK Cargo Center Bldg. 75-Room 228 Jamaica, NY 11430 Phone: 718.244.1400 FAX: 718.244.7315 www.fjcsecurity.com
|
Experience
FJC has been successful in meeting the security needs of customer environments very similar to yours by working closely with our clients throughout the Aviation community since 1988.
FJC's Management Team is comprised of individuals with many years of experience in aviation. This includes Frank Festa a former U.S. Customs Chief, Robert Stabile our Director of Operations who was a former Customs and Border Protection Deputy Chief Inspector and other managers who were former law enforcement and security managers.
Our satisfied customers include, but are not limited to: Terminal 4 IAT, Terminal One, Terminal 5 JetBlue Construction, Egypt Air, LOT Polish, Turner Construction Company, VRH Constructions Corp., Peter Scalamandre & Sons, Inc., Air France, Korean Air, Brussels, Royal Air Maroc and Air China at JFK International Airport, Southwest and JetBlue at LaGuardia Airport.
In closing, rest assured our commitment to assisting you would be nothing less than 100%! We believe our team of management professionals, our financial stability and operational infrastructure coupled with our list of satisfied clients demonstrates our unique qualifications to become your security services provider.
Once you have had an opportunity to review the enclosed information, please feel free to contact me at 718-244-1400 x105 or E-mail: ffesta@fjcsecurity.com
Thank you again for your time and consideration, we look forward to the prospect of satisfying all of your security needs in the near future.
Very truly yours,
Frank Festa
Director of Business Development
Aviation Division
Page 2
FJC Aviation Services
Security. Service.
|
Aviation Services JFK Cargo Center Bldg. 75-Room 228 Jamaica, NY 11430 Phone: 718.244.1400 FAX: 718.244.7315 www.fjcsecurity.com
|
Security Services Proposal and Agreement for:
|
Baltia Airlines
Building 151, Room 361
JFK International Airport
Jamaica, NY 11430 Attention: Mr. Igor Dmitrowsky
President & CEO Phone: 718-244-8880 Email: igor.dmitrowsky@baltia.com
|
PROPOSED COST CONSIDERATIONS
|
| | |
Position |
Regular Bill Rate |
Overtime/Holiday Bill Rate |
Security Officer |
$13.90/hr |
$20.85/hr |
Schedule of Service: |
4 to 5 hours per day, 1 to 7 days a week as flights progress for approximately 158 hrs a. week. Tours of duty, days of operation and additional flights will be adjusted based on Increased operations.
|
-
The overtime rate will be charged for any time that exceeds the agreed upon shifts and for any additions or changes In the agreed upon schedule without 72 hours formal written notice.
-
The holiday rate would be charged for services provided on the following holidays: New Year's Day, Martin Luther King Day, President's Day, Memorial Day, Independence Day (4111 of July), Labor Day, Columbus Day, Thanksgiving Day and Christmas Day.
-
These rates include all payroll taxes & insurances. Sales tax is not included.
-
Invoices for payment would be sent on a weekly basts. Payments would be due within 15 days of invoice date. If payment schedule is compromised it may result in interruption of service.
-
Bill rate is based on an 4-hour minimum for each officer each day. Hourly rates are subject to adjustment for any change in any federal, state or municipal law, regulation, administrative ruling or collective bargaining agreement, requiring any Increase in work hours, wages, and benefits, taxes, working conditions or other costs Incurred by FJC in performance of this Agreement. Without limiting the foregoing, any and all costs (including penalties) incurred by FJC associated with the Health Care and Education Reconciliation Act of 2010 for security personnel rendering services hereunder shall result In a penny for penny increase in FJC's hourly rate.
Page 3
FJC Aviation Services
Security. Service.
|
Aviation Services JFK Cargo Center Bldg. 75-Room 228 Jamaica, NY 11430 Phone: 718.244.1400 FAX: 718.244.7315 www.fjcsecurity.com
|
QUALIFICATIONS & RESPONSIBILITIES
-
FJC will provide experienced personnel capable of performing functions as but not limited to:
- Ability to read, write and communicate clearly and concisely In the English language.
- Ability to stand and/or sit for extended periods of time (minimal8 hours)
-
All personnel will possess strong interpersonal and communications skills. It is understood the security personnel assigned will be professionally attired, as mutually agreed.
-
Specific Post Orders and responsibilities to be established prior to commencement of services, as mutually agreed as where in FJC will perform the following duties:
-
Hand wand all authorized persons entering the aircraft with the exception of Jet Airways personnel.
-
Search the cabin of the aircraft. The search will be limited to the overhead bins, closets, lavatories, storage bins, seat backs and pockets, under seats, life vests and lift and inspect under seat cushions and other accessible compartments in the passenger cabin.
-
Monitor the aircraft on the ramp. Ensure that only authOrized persons are in and around the aircraft/Check ID's. Observe the loading and unloading of baggage and cargo.
-
Search and seal the food carts at the catering facility.
Page 4
FJC Aviation Services
Security. Service.
|
Aviation Services JFK Cargo Center Bldg. 75-Room 228 Jamaica, NY 11430 Phone: 718.244.1400 FAX: 718.244.7315 www.fjcsecurity.com
|
AGREEMENT
The parties agree that FJC does not represent and cannot warrant that the services will prevent or minimize the likelihood of loss. Unless contracted separately In writing, (I) FJC's responsibility Is solely limited to providing physical security services and FJC has not been engaged as a consultant or otherwise to provide an assessment of security needs for the site(s) to be covered; and (ii) all liability arising under this agreement or the services provided shall be limited to available insurance proceeds from policies maintained by FJC. FJC services shall not give rise to or confer any rights on any third party and CLIENT agrees, to the fullest extent permitted by law, to indemnify, defend and hold harmless FJC against any claims by third parties. In the event that fines or penalties are levied against the CLIENT due to the alleged negligence or omission of FJC personnel during the course of duty/ FJC will not be held culpable unless given fair notice and time to investigate, mitigate and defend prior to any responses and/or settlements by any party. A Certificate of Insurance will be issued and these terms and conditions shall be incorporated Into a Service Agreement upon written acceptance as indicated below prior to commencement date.
CLIENT Is required to make payment to FJC within 30 days of invoice date. Any dispute or claim regarding the amount of an invoice or the underlying services rendered must be received by FJC, in writing within 10 days of invoice date, together with supporting information and documentation or it shall be deemed waived for all purposes. In the event CLIENT fails to pay any monies as and when due, FJC may suspend or terminate services at any time upon forty eight (48) hours prior written notice. Invoices not paid within 45 days of invoice date will be charged an Interest rate of 1.5% monthly. In the event of judgment for non-payment, CLIENT shall be responsible for any and all attorney's fees and costs of collection incurred by FJC.
This agreement and payment for services rendered by FJC to CLIENT is independent and exclusive from any and all of CLIENT'S other agreements with any other entity. Payment to FJC cannot be held back or delayed based on CLIENT'S non-receipt of payment from any of CLIENT's other agreements or contracts.
CLIENT is required to submit any other form of agreement or documentation 48 hours prior to the start of services. FJC will examine the other forms of agreement and advise the CLIENT of any changes or exceptions. If a resolution cannot be agreed upon, services will not be provided unless the CLIENT accepts and signs FJC's agreement as the only legal document.
This Agreement shall commence on the first day services are rendered by FJC to the CLIENT and said Agreement shall remain in effect for a period of twelve (12) months1 and shall renew automatically for one year periods unless terminated by either party upon written notice delivered by one party to the other at least thirty (30) days prior to the renewal date. Notwithstanding the above, this Agreement may be terminated by either party with or without cause at any time upon thirty (30) days written notice. CLIENT further agrees to an increase in all billing rates on each anniversary date in the amount of 3% per year.
Page 5
FJC Aviation Services
Security. Service.
|
Aviation Services JFK Cargo Center Bldg. 75-Room 228 Jamaica, NY 11430 Phone: 718.244.1400 FAX: 718.244.7315 www.fjcsecurity.com
|
CUENT HAS AGREED TO THE PRICING AND TERMS OF AGREEMENT IN THIS CONTRACT
CLIENT requested start date and time (30 days from date of contract execution):
__ ? ___ at __ ? __ hours
CLIENT Accepted: __ /signature/ __ Date: __ 9/18/2014 ___
(Signature)
Print Name & Title: ___ Russell Thal - Executive Vice President ___
This business Is licensed by the New York Department of State , Division of Licensing Services
FJC Accepted: __ /signature/ __ Date: __ 9.23.2014 ___
(Signature)
Print Name & Title: __ Mark Coffino EVP / COO __
Page 6
lATA STANDARD GROUND HANDLING AGREEMENT
(SIMPLIFIED PROCEDURE)
Annex B - LOCATIONS(S), AGREED SERVICES AND CHARGES
to the Standard
Ground Handling Agreement (SGHA) of April 2004
between: | SW1SSPORT USA, INC.
having its principal office at 45025
Aviation Drive Suite 350 Dulles, VA
20166 (hereinafter referred to as "the Handling Company") |
and | BALTIA AIRLINES
having its principal office at
(hereinafter referred to as "the Carrier") |
|
effective from: |
May 16, 2014
|
This Annex | B.1.0 (Ramp and Passenger Handling) |
the location | JOHN F. KENNEDY INTERNATIONAL AIRPORT (JFK) Jamaica, New York
|
is valid from: | May 16, 2017 |
and replaces: | n/a |
PREAMBLE: This Annex B is prepared in accordance with the simplified procedure whereby the Carrier and the Handling
Company agree that the terms of the Main Agreement and Annex A of the SGHA of April 2004 as published by the International Air
Transport Association shall apply as if such terms were repeated here in full. By signing this Annex B, the parties confirm that they
are familiar with the aforementioned Main Agreement and Annex A.
BALTIA Airlines/JFK Page 2 of 9 |
Ramp and Passenger Services 05/16/14 |
BALTIA Airlines/JFK Page 3 of 9 |
Ramp and Passenger Services 05/16/14 |
PARAGRAPH 1. GROUND HANDLING SERVICES AND CHARGES
1.1 Services
For a single ground handling consisting of the arrival and the subsequent departure at agreed timings
of the same aircraft, the Handling Company shall provide the services of Annex A listed below and charge the
rates specified in Paragraph 1.2 of this Annex.
1.1.1
Ramp Handling Services
Section 1: Representation. Administration and Supervision 1.1.2;
1.1.3; 1.1.41.2.1; 1.2.2; 1.2.41.3.1(b); 1.3.2; 1.3.3; 1.3.4
Section 3: Ramp Services
3.1.1; 3.1.2; 3.1.3; 3.1.4; 3.1.5; 3.1.6;3.1.7(a)(1); 3.1.8 3.2.1(a)
3.3.1; 3.3.2(D; 3.3.3(a)(extra charge); 3.3.3(b)(gate power) 3.4.1 (extra charge);
3.4.2(extra charge) 3.5.1; 3.5.2
3.6.1 (a)(1)(at remote parking); 3.6.3; 3.6.4; 3.6.5(a)(1.2); 3.6.6; 3.6. 7; 3.6.8 3.7.1 (extra
charge) 3.8.1 (b)(provided by I AT) 3.9.1; 3.9.2(b); 3.9.3(a)(b)(within IAT)(d)
3.11.1 (a-D; 3.11.2(a-h); 3.11.2(vacuum); 3.11.5; 3.11.7; 3.11.8; 3.11.9(a)
3.12
3.13
Section 6: Support Services
6.2.1 (c)(1.2); 6.3.1 (outside storage. up to 6 ULD ); 6.3.2; 6.3.5 (at
termina1);6.8.1
Section 7 Security
7.1.4 (4)
BALTIA Airlines/JFK Page 4 of 9 |
Ramp and Passenger Services 05/16/14 |
1.1.2
Passenger Handling Services
Section 1: Representation and Accommodation 1.1.2; 1.1.3;
1.3.2; 1.3.3; 1.3.4; 1.3.5; 1.3.7; 1.3.8
Section 2: Passengers and Baggage
2.1.1; 2.1.2; 2.1.3(a)(1)(3); 2.1.3(b)(2,6); 2.1.4; 2.1.6;
2.1.7{a){b)(c)(e)(O; 2.1.8, 2.1.9(b)(1 ,2);
2.2.2(2)(a) ;2.2.3(without liability to Handling Company); 2.2.4; 2.2.5; 2.2.6);
2.2.7; 2.2.11 ;2.2.12; 2.2.13; 2.2.14(a-b,d-i)
2.3.2
Section 3: Ramp Services
3.6.1 (b)(3){provided by I AT)
Section 4: Load Control Communications and Departure Control System
4.1.1; 4.1.2(1) 4.2.1;
4.2.2; 4.2.3 (a) 4.9.1; 4.9.4
Section 6:
6.2.1 (c)(1 ,2); 6.2.2(a,b)(3,6); 6.3.3;
6.5.1
C) Deice Services
Ramp Services
Section 3.17.2(a); 3.17.3; 3.17.4; 3.17.6;
3: Support Services
1.2 Charges
1.2.A
Ramp Handling Charges
For the services of Annex A listed in Paragraph 1.1.1 above, based on the attached schedule, the charges
shall be as follows:
B747w200 series aircraft $2,395.00/turnaround
1-2.b
Passenger Service Charges
For the services of Annex A listed in Paragraph 1.1.2 above, based on the attached schedule, the following
rates will apply.
8747-200 series aircraft $1,490.00 /turnaround
BALTIA Airlines/JFK Page 5 of 9 |
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1.2.C
Flight Operations/Dispatch Charges {provided by Swiss Intl.)
Section 4: Dispatch Services 4.3; 4.4; 4.5;
4.6
B747w200 series aircraft
$ 280.00/turnaround
C) Deice Services
Type I | (55/45 Glycol/water) | $11.50 per gallon applied |
Type IV | (100% Product) | $16.95 per gallon applied |
The billing price shall vary by season.
The Carrier agrees to inspect the aircraft upon completion of the deicing operation and will certify that the
aircraft has been de-iced according to the required safety standards and the Carrier's procedures.
A minimum callout charge of $150.00 per deice service will be applied if deicing is requested and subsequently
not utilized.
Passenger Service Pricing is based upon the following mutually agreed manning:
Position |
Number of
Staff |
Man hours |
Supervisor | 1 | 8
|
Load Control | 1 | centralized
|
Check-in/Gate B747 | 8 | 4
|
Arrivals | 3 | 4
|
Baggage Service | 1 | centralized |
1.2.1 Charges are based on flights operating within si1xty (60) minutes of scheduled arrival or departure.
1.2.2
Handling in case of technical landing for other than commercial purposes will be charged at fifty
percent (50%) of the above rates provided that a physical change of load is not involved.
1.2.3
Handling in case of return from take off point to ramp will not be charged extra, provided that a physical change
of load is not involved.
1.2.4 Handling in case of return from take-off point to ramp involving a physical change of load
BALTIA Airlines/JFK Page 6 of 9 |
Ramp and Passenger Services 05/16/14 |
will be charged as for handling in case of technical landing in accordance with Paragraph 1.2.2 of this Annex.
1-2.5 No extra charges will be made for providing the services at night, on Sundays, or on legal holidays.
1.2.6
Port Authority of NY/NJ fees of 5.25% of revenue will be billed on all services.
1-2.8
The Carrier will utilize Handing Company DCS System for check-in (inclusive of generic bag
tags/boarding cards) at a rate of $.95 per passenger.
1.2.9
For services enumerated above, based on the following schedule:
Mon/Tues!Thur/Fri/Sat ETA: 1230 L/ETD: 1600L
PARAGRAPH 2. ADDITIONAL CHARGES
2.1
When requested and authorized by the Carrier or when flights operate off-schedule per Paragraph 1.2.1, extra
labor charges shall be:
|
Straight Time | Overtime
|
Ramp/Cleaning | $17.00 per hour | $25.50 per hour
|
Pax Agent | $18.00 per hour | $27.00 per hour
|
CTX Bag Runner | $14.50 per hour | $21.75 per hour
|
Supervisor | $26.10 per hour |
|
2.2
Extra manpower may be subject to a four (4) hour
minimum if the Handling Company incurs a four (4)
hour minimum. This minimum would apply if staff is
called in from home.
2.4
Any additional facilities, equipment or services
requested that are not covered in Paragraph 1.1
above, or when flights operate off-schedule per Paragraph 1.2, 1, shall be charged for at fifty percent (50%) of the
applicable rates included in the Mutual Assistance Ground Services Agreement (MAGSA) as published by the
Airline Transportation Association of America (ATA).
2.5
Flight cancellations will be charged at fifty percent (50%) of the rates specified in Paragraph 1.2 unless twelve (12) hours prior notice is given.
2.6
Any additional facilities, equipment or services requested that are not covered in Paragraph 1 or when flights
operate off schedule, carrier shall be charged as follows:
GPU Air Start | $65.00 per hour or part thereof
|
Heater/Air Conditioner | $55,00 per start
$65.00 per hour or part thereof |
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PARAGRAPH 3. DISBURSEMENTS
3.1
Any disbursements made by the Handling Company on behalf of the Carrier will
be reimbursed by the Carrier at cost price plus an accounting surcharge of fifteen percent (15%).
PARAGRAPH 4. ACCEPTANCE
4.1
If Carrier fails to execute this Agreement but accepts the services herein
specified, this shall constitute the Carrier's acceptance of the tenns and conditions herein specified.
PARAGRAPH 5. LIABILITY AND INDEMNITY
5.1
As relates to Article 8.5 of the Main Agreement, Handling Company's liability
under this section will be limited to the following:
8747 series Aircraft
not to exceed US $1,000,000/incident
PARAGRAPH 6. ARBITRATION
6.1
Notwithstanding the provisions of Sub-Article 9.1 of the Main Agreement:
Any dispute or claim concerning the scope, meaning, construction or effect of this Agreement or arising
out of or relating to the service provided hereunder shall be referred to and finally settled by arbitration in
accordance with the procedures set forth below and, if necessary, judgment on the award rendered may be entered
in any Court having jurisdiction thereof:
1) if the Parties agree to the appointment of a single arbitrator, and if the Parties agree upon the
time, place and procedures of the arbitration, then the arbitration will be conducted in accordance with their
agreement.
2) if the Parties do not agree as provided for in 1), then the arbitration will be conducted before the
American Arbitration Association ("AAA"), in accordance with its-Rules, except that the arbitrators will be selected
as follows: The arbitration panel will consist of three (3) members, with each Party designating one arbitrator, and
the th'1rd arbitrator to be appointed by the AAA, in accordance with its selection process. In the event that one Party
selects an arbitrator, but the other does not, then the pane! will consist of solely the one arbitrator as selected by the
Party.
3) the arbitration proceeding will continue notwithstanding the default of a respondent Party to
appear or defend, and the failure of any Party to participate in the arbitration proceeding will not affect the validity of
the arbitration decision, which will be fully binding on the absent Party.
4) the arbitrator(s) will award to the prevailing Party in the arbitration proceeding all costs of the
arbitration proceeding, including reasonable attorneys' fees.
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5) in the event of a dispute arising hereunder, the law to be applied to such dispute shall be the
applicable law of the State in which the services are performed.
PARAGRAPH 7. COSTS
7.1
It is agreed and understood that the charges as set forth in this Agreement are
based on various applicable State and local taxes, existing minimum wages and statutory employer contributions
which the Handling Company must pay and over which it has no control. In the event of any increases in the
foregoing payments necessitating directly or indirectly an increase in the Handling Company's costs and/or
contributions for Health Insurance, Unemployment Insurance, Social Security, Disability Insurance, facility
charges, or the establishment of any other payroll tax, living wage, service tax of whatever kind or nature that will
be required to be paid by the Handling Company, the Handling Company will prepare a revision to the rates then
in effect at any time during the term of this agreement and increase the rates by this amount effective when the
Handling Company has to start paying the additional amount
PARAGRAPH 8. CONTRACT NOTIFICATION
8.1
Notwithstanding Sub-Article 11.3 of the Main Agreement, any notice required to be given
by either party under this Agreement shall be deemed properly given if sent by FAX followed by certified mail or
overnight delivery service to:
Carrier: |
Handling Company:
|
Baltia Airlines
JFK Inti Airport
Bldg. 151
Jamaica, NY 11430
Attn: Olga Krainova
Fax: 1 718 244 8882
Phone: 1 718 244 8880
Email: Olga.Krainova
|
Swissport USA, Inc.
45025 Aviation Drive, Suite 350
Dulles, VA 20166
Attn: Roger Larreur
Senior Vice President
Phone: 703-743-4340 Fax:
703-742-4321 |
PARAGRAPH 9. PAYMENT
9-1 For the services performed by the Handling Company for the Carrier pursuant to
this Agreement, the Carrier shall provide a prepayment of the anticipated charges. The Handling Company shall
submit an invoice to the Carrier prior to each month of service and the Carrier shall provide pre-payment of the
monthly estimated amount, based on scheduled flights, and reconcile any shortage from the prepayment against
the Handling Company's invoice within fifteen (15) days
9-2 Payments shall be sent via wire transfer in US Dollars as follows:
Bank of America ABA No.
026 009 593
Credit the Account of: Swissport North America, Inc.
BALTIA Airlines/JFK Page 9 of 9 |
Ramp and Passenger Services 05/16/14 |
Acct. No. 435007156522 Ref:
Swissport USA, Inc.
Invoice Number(s): ________ (please indicate)
or by mail to:
Swissport North America, Inc. 16540
Collections Center Drive Chicago, IL
60693
9.3
if the Carrier does not pay invoices in accordance with Paragraph 9.1, the
Handling Company may, at its discretion, place the Carrier on a cash basis or discontinue services until the account
is brought current. Such actions shall not constitute a breach or termination of the Agreement and all other terms
and conditions set forth herein shall remain in effect.
9.4
Invoices not paid in accordance with Paragraph 9.1 will accrue interest at the rate of one and one-half
percent (VA%) per month on the unpaid balance.
9.5
if the Carrier disagrees with any item(s) in the invoice submitted by the Handling Company, it may
withhold payment only on that item(s) until a resolution is reached with the remainder of the invoice due and
payable as above. The Carrier must communicate to the Handling Company its reasons for withholding payment
on an invoice item(s). The deadline for payment for any disputed item(s) will be deemed extended until ten (1 0)
days after the resolution of such dispute.
PARAGRAPH 10. DURATION. MODIFICATION AND TERMINATION
10.1
This agreement shall be effective May 16, 2014, and shall supersede any agreements
and/or provisions of service.
10.2
Notwithstanding Paragraph 11.4 of the Main Agreement, the tenn of this agreement shall be for a three (3) year
period commencing May 16, 2014 through May 16, 2017 for all of the services and scope enumerated in
Paragraphs 1 and 2.
10.3
Based on the other terms and conditions of this Agreement, the rates shown are for the first year of service.
Thereafter, the rates will be subject to an increase each anniversary date of the contract based on a Consumer
Price Index (CPI) of a minimum of
3%.
10.4
The Carrier will not offer employment to the Handling Company's employees at
any time during the term of this Agreement or for 6 months thereafter unless mutually agreed. In lieu of this, Carrier
agrees to compensate Handling Company by paying Handling Company 35% of employee's annual compensation
including salaries/wages and benefits.
PARAGRAPH 11. STANDARD OF WORK
11-1
A service level agreement (SLA) will be signed by both parties, if requested, by mutual
BALTIA Airlines/JFK Page 9 of 9 |
Ramp and Passenger Services 05/16/14 |
~~~~~ art of this Annex B.
BALTIA AIRLINES |
SWISSPOINT USA, INC.
|
By ____ /signed Igor Dmitrowsky/
Title: _PRESIDENT_
Date: __May 16, 2014
By ____ /signed/
Title: _Vice President of Operations_
Date: __May 16, 2014__
|
By ____ /signed/__
Roger Larreur
Title: Senior Vice President
Date: __________
By _________________
Title:
Date:
|
lATA STANDARD GROUND HANDLING AGREEMENT
STANDARD GROUND HANDLING AGREEMENT-SIMPLIFIED PROCEDURE
Annex B.. -Location(s), Agreed Services and Charges
to the Standard Ground Handling Agreement (SGHA) of April 1998
between: | Baltia Airlines Inc.
|
having its principal office at: | Baltia Air Lines, Inc.
JFK Int'l Airport Building 151, Room 306 Jamaica, New York, 11430 |
and {hereinafter referred to as "the Carrier") |
and | F&E Aircraft Maintenance (Miami), L.L.C. |
having its principal office at: | 657 South Drive Suite 306
Miami Springs, FL 33166 |
and {hereinafter referred to as "the Handling Company") |
effective from: |
May 15,2015
|
This Annex B for the locations:
is valid from:
and replaces: |
JFK May 15, 2014
NIL |
PREAMBLE:
This Annex B is prepared in accordance with the simplified procedure whereby the Parties agree that the terms of the Main Agreement and Annex A of the SGHA of April 1998 as published by the International Air Transport Association shall apply as if such terms were repeated herein full. By signing this Annex B, the Parties confirm that they are familiar with the aforementioned Main Agreement and Annex A.
PARAGRAPH 1. HANDLING CHARGES
1.1 F&E Aircraft Maintenance agrees to provide licensed, Airframe & Powerplant mechanics to Baltia Air. The rate for this service is $60.00 per Man-hour for A&P/Avionics and $85.00 per Man-hour for sheet-metal with a four hour minimum per mechanic. There will be no additional charges for work performed on nights and weekends; however, holiday rates at time and a half will apply for the following days: Christmas Day, New Years Day, Independence Day, Memorial Day, Labor Day, and Thanksgiving Day. F & E Aircraft Maintenance assumes no ground handling responsibilities.
PARAGRAPH 2. ADDITIONAL-CHARGES
2.1.1 All services not included in Paragraph 1 of this Annex will be charged for at current local rates. Carrier will be invoiced an additional 5.263% of invoice total for Port Authority of New York and New Jersey.
PARAGRAPH 3. DISBURSEMENTS
3.1 Any disbursements made by the Handling Company on behalf of the Carrier ~ll be reimbursed by the Carrier at cost price plus an accounting surcharge of 15%.
PARAGRAPH 4. LIMIT OF LIABILITY
4.1 The limit of liability referred to in Sub-Article 8.5 of the Main Agreement shall be as follows:
Aircraft Type | Limit (per incident) |
B747 | $1,000,000.00 U.S.D. |
PARAGRAPH 5. SETTLEMENT
5.1 Settlement of account shall be effected via company check and the terms are net 30 days.
Signed the _May 16__, 2014
At _WIllow Run Airport MI___
For and on behalf of Baltia Air Lines Inc.
By: ___/signed/____ Print Name: _Igor Dmitrowsky_
|
Signed the _16 May_ 2014
at Miami, FL
For and on behalf of F&E Aircraft Maintenance (Miami), LLC
By: ___/signed/____
Guy Tucker, CFO
|
EX-10
6
ex10_28_worldfuel.htm
EXHIBIT 10.28 WORLD FUEL SERVICES CONTRACT
FUEL SERVICES SUPPORT AGREEMENT
THIS FUEL SERVICES SUPPORT AGREEMENT (this "Agreement") is made effective as of the 1st day of September, 2013 (the "Effective Date"), by and between WORLD FUEL SERVICES, INC., a Texas corporation, through its World Fuel Management division
("World Fuel") and Baltia Air Lines, Inc., a __New York___ corporation ("Customer").
WITNESSETH:
WHEREAS, Customer is a commercial airline with flight operations throughout the Americas and Europe.
WHEREAS, World Fuel is in the business of providing comprehensive fuel management services.
WHEREAS, Customer and World Fuel desire to enter into an agreement where World Fuel will provide certain fuel management, operations and risk management services and Customer shall pay for such services, all as provided below.
NOW THEREFORE, for valuable consideration, the parties hereby agree to the following terms and conditions:
1.
Fuel Management Services.
World Fuel will assist Customer in planning, coordinating, sourcing and purchasing jet fuel to satisfy Customer's needs. In order to carry out the foregoing, World Fuel will: (a) supply fuel to Customer in accordance with the terms of this Agreement; and (b) make available to Customer reports of its fuel uplifts, including the date, location, price and quantity thereof.
2. Bidding Process; Fuel Sales. All fuel and related services sold pursuant to this Agreement will be sold by World Fuel or a World Fuel subsidiary or affiliate (each, individually, a "World Fuel Affiliate" or collectively the "World Fuel Affiliates") directly to Customer. World Fuel will arrange and contract for all fuel supply, fuel transportation and fuel storage for Customer through a competitive bid process. World Fuel will seek bids from various fuel vendors to satisfy Customer's anticipated fuel needs over a specified period. World Fuel will analyze all bids received, review the analysis of bids with Customer, and (unless otherwise instructed by Customer) select the final bid. Promptly after selection of a final bid, World Fuel will notify Customer. World Fuel will purchase fuel from the selected bidder and other sources as and when required to satisfY Customer's fuel requirements, and sell fuel to Customer at the price specified in such bid. World Fuel will be solely responsible for paying fuel vendors for all purchases made by World Fuel for the purpose of supplying Customer hereunder. Notwithstanding the foregoing, World Fuel shall have the opportunity to bid on Customer's fuel requirements for any and all locations operated by Customer in accordance with the written requirements and guidelines set forth by Customer and Customer will give equal consideration to purchasing its fuel requirements from World Fuel; provided however, that any final decision of Customer regarding fulfillment of its fuel requirements shall be at Customer's sole discretion.
3. Inventory. World Fuel may maintain fuel inventory at various locations in order to satisfy Customer's fuel purchase requirements. World Fuel assumes all risk related to price fluctuations with respect to this inventory. In certain locations, only airlines may hold title to inventory maintained in airport storage tanks. In such locations, World Fuel will purchase and pay for the inventory on behalf of Customer, and Customer will hold title to such inventory on behalf of World Fuel and, sign such assignments and other documents as may be reasonably necessary to transfer its interest in such inventory to World Fuel while such inventory is held in storage.
4. Into-plane and Supplier Agreements. Customer shall, for all locations within the United States, contract separately for any into-plane fueling services directly with the applicable into plane fueling agent. Customer acknowledges that in such cases any into-plane fueling service fees shall be separate from and in addition to the selling price of any fuel, and any agreements related thereto shall be distinct contracts for into-plane fuel delivery. To the extent that World Fuel negotiates and enters into any fuel supply, transportation and storage agreements directly with the selected suppliers and other third parties ("Third Party Suppliers") in accordance with this Agreement ("Supplier Agreements"), Customer acknowledges and agrees that all such Supplier Agreements, including any indemnification provisions contained therein, shall apply back-to-back from World Fuel to Customer as if Customer had entered into such agreements directly with the Third Party Suppliers, with World Fuel taking on the rights and responsibilities of the Third Party Supplier and Customer taking on the rights and responsibilities of World Fuel under such Supplier Agreements. World Fuel shall cooperate with Customer in the event Customer desires to pursue any claims against any Third Party Suppliers. Customer shall not accept any terms, offers or agreements on behalf of World Fuel or any of the World Fuel subsidiaries or affiliates ("World Fuel Affiliates"), or otherwise bind World Fuel or any of the World Fuel Affiliates in connection with any Supplier Agreement, unless authorized to do so in writing by World Fuel.
5. Risk Management Support. World Fuel will provide Customer the following general price risk management support as follows:
a) Provide Customer with fuel pricing trends, including but not limited to, a weekly oil market update and commentary report.
b) Provide general guidance on Customer's fuel hedging policies, strategies and procedures as requested by Customer. Specifically, World Fuel will provide guidance and support in the development and implementation of price risk management strategies that can be integrated and embedded into Customer's fuel supply arrangements.
c) Provide price risk management training as may be reasonably requested by Customer.
d) Compile and submit to Customer such other related management reports, summaries and data as may be reasonably requested by Customer.
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e) Perform such other risk management services as may be reasonably requested by Customer from time to time. Such other risk management services shall be provided on a negotiated fee basis as mutually agreed by World Fuel and Customer.
6. Term. This Agreement shall have an initial term of three (3) years, commencing on September I, 2013; provided, that after the first year, either party may terminate the Agreement with or without cause at any time upon ninety (90) days prior written notice to the other party. This Agreement shall be automatically renewed for subsequent terms of one (I) year each, unless either party provides the other written notice, no less than ninety (90) days prior to the end of the initial term or any renewal thereof, that it does not wish to renew this Agreement upon the expiration of the term for which the party has given such notice. In the event of any termination of this Agreement, all outstanding balances due and owing, plus all amounts billed after termination for fuel purchases prior to such termination, shall be paid as provided in the applicable invoice.
7. Fees and Expenses.
7.1 Management Fees. As compensation for the fuel management services provided by World Fuel, Customer will pay World Fuel the management fees ("Management Fees") set forth in Schedule "A" hereto.
7.2 Expenses. Customer shall reimburse World Fuel for all reasonable out-of-pocket expenses incurred by World Fuel directly in connection with the performance of the fuel management and risk management services; so long as such expenses are properly documented and such documentation is presented to Customer.
8. Product Specifications. All fuel sold to Customer pursuant to this Agreement will be jet fuel meeting one of the specifications set forth below ("Product"):
- ASTM D-1655, Jet-A, latest issue,
- ASTM D 1655, Jet-A-!, latest issue,
- Defense Standard 91-91, latest issue,
- Canadian specification CAN/CGSB-3.23.93, Jet-A Fuel, latest issue.
9. Payment and Credit Terms.
9 .I All payments shall be made prior to the delivery of any Products or services in U.S. Dollars electronic funds transfer of immediately available funds to the account of World Fuel shown on Schedule "B." Payments shall be made as necessary so that Customer will at all times comply with the due dates of payment for each invoice as set forth herein. Invoices will be sent to Customer electronically, by telecopier, or by U.S. mail or overnight courier services, and at such times, as may be agreed upon by World Fuel and Customer.
3
9.2 World Fuel reserves the right, in addition to all other rights and remedies available to it under applicable law, to terminate this Agreement, suspend further deliveries and/or services under the Agreement, and demand payment of all outstanding balances, if Customer fails to make any payment as herein provided. World Fuel reserves the right to apply Customer's payments to any outstanding invoices or obligations of Customer, as may be determined by World Fuel in its discretion, without regard to aging of the account.
9.3 In the event a bankruptcy or similar proceeding is filed by or against Customer, World Fuel will have the right, but not the obligation, to continue to provide fuel and/or services and credit to Customer under this Agreement; but only if Customer assumes this Agreement, pays any pre-petition obligations (either in cash or by posting payment guarantees acceptable to World Fuel in its discretion), and provides adequate assurances of future payment. Absent such assumption, payment and assurances, World Fuel is not required to continue fuel sales under this Agreement. In no event shall World Fuel be required to increase either the Payment Days or the Credit Limit (inclusive of all pre-petition and post-petition debt/obligations of Customer to World Fuel).
10. Taxes and Fees. Any tax (except for income or franchise taxes of World Fuel), license fee, inspection fee, landing fee, into-plane fee, airport fee, fee for buying, selling or loading aviation fuel, or other charges imposed by any governmental authority or other person or entity upon, any fuel sold hereunder, or on the transportation, sale, use, delivery or other handling of such fuel, or any component thereof, or on any feature or service related thereto or provided under this contract, existing at the time of any sale hereunder, shall be added to the applicable price specified herein, and shall be paid by Customer to World Fuel if such tax, fee or charge is required to be, or is paid by World Fuel. Failure to add such tax, fee or other charge to any invoice shall not relieve Customer from liability therefor. World Fuel will use commercially reasonable efforts to cause vendors to specify, in any bid submitted hereunder, whether applicable taxes are included in, or in addition to, the prices shown in the bid (although the specific amount of tax need not be shown in any bid).
11. Force Majeure. Neither party shall be liable for its failure to perform hereunder as a result of any contingency beyond its reasonable control, including but not limited to, acts of God, fires, floods, wars, sabotage, accidents, labor disputes or shortages, governmental laws, ordinances, rules and regulations, whether valid or invalid (including, but not limited to, priorities, requisitions, allocations, and price adjustment restrictions), inability to obtain product, equipment or transportation and any other similar or different contingency. Notwithstanding the foregoing, in no event shall an event of force majeure release Customer from its obligation to pay, on a timely basis, for Product already delivered and/or services already performed by World Fuel upon the occurrence of such event.
12. Interest; Attorneys' Fees and Costs for Litigation; Jurisdiction. In the event of default by Customer, World Fuel shall be entitled to prejudgment interest on the unpaid outstanding invoices at the highest rate allowable by the laws of the State of Florida. In the event of any litigation between the parties to this Agreement relating to or arising out of this Agreement, the prevailing party shall be entitled to an award of reasonable attorneys' fees and costs, including such fees and costs at trial and all appellate levels. This Agreement shall be considered as having been entered into in the State of Florida, United States of America, and shall be construed
4
and interpreted in accordance with the laws of that state. In any action or proceeding arising out of or relating to this Agreement, each of the parties hereby irrevocably submits to the non exclusive jurisdiction of any federal or state court sitting in Miami, Florida, and further agrees that any action may be heard and determined in such Florida federal court or in such state court.
13. Assignment. This Agreement shall not be assignable by either party without the prior written consent of the other party, which may be withheld in the sole and absolute discretion of the non-assigning party. Customer acknowledges that certain fuel and services provided hereunder, particularly in foreign locations, may be provided by the World Fuel Affiliates.
14. Miscellaneous.
14.1 This Agreement: (i) contains the entire Agreement between the parties and there are no oral Agreements with respect to the subject matter of this Agreement which are not fully expressed herein; (ii) is intended by the parties as a final expression of their Agreement and as a complete and exclusive statement of its terms; (iii) can only be modified by a writing signed by both parties or their duly authorized agents; and (iv) may be executed in any number of counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same instrument. Facsimile signatures herein will be effective for all purposes to the same extent as original signatures. No provision of this Agreement is to be interpreted for or against any party because that party or that party's legal representative drafted such provision. No course of prior dealings between the parties and no usage of trade shall be relevant or admissible to supplement, explain, or vary any of the terms of this Agreement. Acceptance of, or acquiescence in, a course of performance rendered under this or any prior agreement shall not be relevant or admissible to determine the meaning of this Agreement even though the accepting or acquiescing party has knowledge of the nature of the performance and an opportunity to make objection. No representations, understandings, or agreements have been made or relied upon in the making of this Agreement other than those specifically set forth herein. If any provision of this Agreement is invalid, illegal or incapable of being enforced, by reason of any rule of law, administrative order, judicial decision, or public policy, all other conditions and provisions of this Agreement nevertheless shall remain in full force. No third party dealing with World Fuel as it performs its responsibilities hereunder shall be deemed a third party beneficiary hereunder.
14.2 This Agreement is for the supply of fuel and services to Customer. Nothing contained herein is intended to create a relationship of partnership, principal-agent or any similar relationship between World Fuel and Customer, or to give rise to any duties or obligations between the parties other than those expressly set forth herein.
14.3 The parties agree that any information, data, processes, reports, and other information that the parties may share with each other that is reasonably evident by its nature to be confidential or proprietary, whether written, oral or electronic in nature, as well as the specific terms of this Agreement (collectively, the "Confidential Information"), shall be deemed to be confidential and proprietary in nature, and maintained in the strictest confidence, and that neither party hereto shall in the future, without the written consent of the other party, disclose Confidential Information to anyone who is not a party hereto, either orally or in writing, provided that such restriction shall not apply to: (i) the parties' disclosure of Confidential Information to their attorneys, advisors or accountants; or (ii) the parties' disclosure as may be
5
required by law (e.g., tax reporting, regulatory requirements, securities laws) or as may be necessary to enforce this Agreement, or (iii) information that is already generally available to the public. Nothing herein shall preclude the parties from obeying lawful process. Either party's disclosure of the existence of this Agreement and/or general description of the services provided hereunder shall not be deemed a violation of this Section 14.
15. Representations; Disclaimer of Warrantv and Liability.
15.1 Each of the parties hereby represents and warrants to the other that (i) it is duly incorporated and validly existing, in good standing in all applicable jurisdictions, and has duly authorized the execution of this Agreement, (ii) it shall comply with all laws and governmental regulations in connection with its performance of its obligations under this Agreement, and (iii) its performance of its obligations under this Agreement will not conflict with its obligations under any other binding agreement.
15.2 Customer shall cooperate with World Fuel in the performance of any services by World Fuel under this Agreement, including without limitation, providing World Fuel with timely access to data, information and personnel of Customer. Customer shall be responsible for the performance of its employees and agents and for the accuracy and completeness of all data and information provided to World Fuel for purposes of the performance by World Fuel of any services hereunder.
15.3 Customer acknowledges and agrees that any services provided by World Fuel to Customer under this Agreement may include advice, recommendations, information or work product (collectively the "Information"). Such Information shall be for the internal use of Customer. World Fuel shall have no responsibility for any decision made by Customer or any other party based on such Information. Except as otherwise required by law, Customer will not disclose or permit access to such Information to any third party or summarize or refer to Information without the prior written consent of World Fuel. In furtherance of the foregoing, Customer shall indemnifY, defend and hold harmless World Fuel from and against any and all claims, liabilities, losses, expenses (including reasonable attorneys' fees), fines, penalties or damages suffered by or asserted against World Fuel in connection with a third party claim to the extent resulting from such party's use or possession of or reliance upon the Information as a result of Customer's use or disclosure of the Information.
15.4 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN, (A) ALL FUEL PRODUCT, SERVICES AND INFORMATION PROVIDED BY WORLD FUEL HEREUNDER ARE PROVIDED "AS IS"; (B) NEITHER WORLD FUEL NOR ANY OF THE WORLD FUEL AFFILIATES HAS MADE OR MAKES ANY WARRANTIES OR REPRESENTATIONS WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE FUEL PRODUCTS, INFORMATION AND/OR SERVICES PROVIDED HEREUNDER, AND (C) WORLD FUEL AND EACH OF THE WORLD FUEL AFFILIATES EXPRESSLY DISCLAIM, AND CUSTOMER HEREBY WAIVES, ALL WARRANTIES, GUARANTEES, OBLIGATIONS AND LIABILITIES WITH RESPECT TO ANY FUEL PRODUCT, SERVICES OR INFORMATION PROVIDED HEREUNDER, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, INCLUDING BUT NOT LIMITED TO: (1) ANY IMPLIED WARRANTY OF MERCHANTABILITY, (2) ANY IMPLIED WARRANTY
6
ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE, OR (3) ANY IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE.
15.5 IN NO EVENT SHALL WORLD FUEL OR ANY OF THE WORLD FUEL AFFILIATES BE LIABLE FOR ANY ACTS OR OMISSIONS OF AGENTS AND/OR SUBCONTRACTORS OF WORLD FUEL OR ANY SUCH AFFILIATE, INCLUDING WITHOUT LIMITATION, FIELD TRANSPORTERS, INTO PLANE AGENTS OR SERVICE SUPPLIERS.
15.6 IN NO EVENT SHALL WORLD FUEL BE LIABLE TO CUSTOMER FOR ANY CLAIMS, LIABILITIES OR EXPENSES RELATING TO THE PRODUCTS OR SERVICES PROVIDED UNDER THIS AGREEMENT FOR AN AGGREGATE AMOUNT IN EXCESS OF THE TOTAL FEES PAID BY CUSTOMER TO WORLD FUEL FOR SUCH PRODUCT OR SERVICES. NEITHER PARTY, NOR ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, REPRESENTATIVES OR AFFILIATES, WILL BE LIABLE TO THE OTHER PARTY, NOR ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, REPRESENTATIVES OR AFFILIATES, FOR CLAIMS FOR PUNITIVE, SPECIAL, EXEMPLARY, TREBLE, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES, INCLUDING DAMAGES FOR LOSS OF PROFITS, LOSS OF USE OR REVENUE, OR LOSSES BY REASON OF COST OF CAPITAL, CONNECTED WITH OR RESULTING FROM ANY PERFORMANCE OR LACK OF PERFORMANCE UNDER THIS AGREEMENT, REGARDLESS OF WHETHER A CLAIM IS BASED ON CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, VIOLATION OF ANY APPLICABLE DECEPTIVE TRADE PRACTICES ACT OR ANY OTHER LEGAL OR EQUITABLE PRINCIPLE.
16. Notices. All notices, requests, demands, or other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given upon receipt if delivered in person or by facsimile transmission, or upon the expiration of three (3) days after the date sent, if sent by Federal Express (or similar overnight courier service) to the parties at the addresses and fax numbers set forth in this letter.
Notices to World Fuel shall be sent to:
9800 N.W. 41st Street, Suite 400
Miami, FL 33178
Attention: Patricia Katsanos
Fax: (305) 392-5613
Email: pkatsanos@wfscom.com
With a copy to: General Counsel Fax: (305) 392-5645
7
Notices to Customer shall be sent to:
Baltia Airlines, Inc.
JFK International Airport
Bldg. 151, Room 361
Jamaica, NY 11430
Attention: Russell Thai
Tel: (718) 244-8880
Fax: (718) 244-8882
Email: russ.thal@baltia.com
17. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTIONS OR COURSE OF DEALING HEREUNDER.
Dated to be effective as of the Effective Date.
WORLD FUEL SERVICES, INC.
By: _
Patricia Katsanos
Division President
BALTIA AIR LINES INC.
Signature: ____/signed/____
Title: __ Executive V.P.____
Name (Print): Russell Thal
Date: ___05/15/2014_______
8
SCHEDULE A - MANAGEMENT FEES
Customer shall pay World Fuel the following Management Fee for the first year of the term of the Agreement: $0.006/US gallon
The Management Fee will be invoiced, in whole or in part, as a separate line item, along with Customer's fuel purchases and will be paid in advance of any fuel delivery. The Management Fee shall be fixed for the first year during the term of the Agreement and subject to adjustment by World Fuel each year thereafter.
9
SCHEDULE B
ACCOUNT INFORMATION
All payments will be by wire transfer to the following account:
La Salle Bank
ABN AMRO North America
200 West Monroe Suite 500
Chicago, IL 60606
SWIFT: LASLUS 44
ABA: 071000505
ACCT#: 5800259219
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