10QSB 1 v037723_10qsb.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB [xx] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended January 31, 2006 ---------------- or [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ______________ Commission File Number: 33-9218 ------- Air Brook Airport Express, Inc. -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 22-2742564 ------------------------------- ---------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 115 West Passaic Street, Rochelle Park, New Jersey 07662 -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (201) 843-6100 -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) has filed all reports required to be filed by section 13 or 15 (d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [xx] No [_] APPLICABLE ONLY TO CORPORATE ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes [_] No [_] APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity as of the latest practicable date: 2,427,922 shares as of January 31, 2006. AIR BROOK AIRPORT EXPRESS, INC. AND SUBSIDIARY INDEX PART I - FINANCIAL INFORMATION: ITEM 1 - FINANCIAL STATEMENTS Consolidated Balance Sheets January 31, 2006 (Unaudited) and October 31, 2005 1 Consolidated Statements of Income for the Three Months Ended January 31, 2006 and 2005 (Unaudited) 2 Consolidated Statement of Changes In Stockholders' Deficit for the Three Months Ended January 31, 2006 (Unaudited) 3 Consolidated Statements of Cash Flows for the Three Months Ended January 31, 2006 and 2005 (Unaudited) 4 Notes to Consolidated Financial Statements (Unaudited) 5 ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 6 PART II - OTHER INFORMATION 7 - 8 AIR BROOK AIRPORT EXPRESS, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS January 31, October 31, 2006 2005 (Unaudited) (Audited) --------- --------- ASSETS Current assets: Cash $ 51 $ 96 Deferred Tax Asset 7,500 7,500 --------- --------- Total current assets 7,551 7,596 Deposits 650 650 --------- --------- Total assets $ 8,201 $ 8,246 ========= ========= LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable $ - 0 - $ - 0 - Accrued expenses - 0 - - 0 - Due to affiliate 398,187 414,437 --------- --------- Total current liabilities 398,187 414,437 --------- --------- Stockholders' deficit: Common stock, $.0001 par value: 98,800,000 shares authorized; 2,427,922 issued and outstanding 243 243 Preferred stock, $.0001 par value: 1,200,000 shares authorized; none issued Additional paid-in capital 425,146 425,146 Accumulated deficit (815,375) (831,580) --------- --------- Total stockholders' deficit (389,986) (406,191) --------- --------- Total liabilities and stockholders' deficit $ 8,201 $ 8,246 ========= ========= The accompanying notes are an integral part of these financial statements (unaudited). -1- AIR BROOK AIRPORT EXPRESS, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTH PERIODS ENDED JANUARY 31, (UNAUDITED) 2006 2005 ---------- ---------- Revenue $ 17,657 $ 15,729 General, administrative and operating expenses $ 1,451 $ 1,878 ---------- ---------- Net income $ 16,205 $ 13,851 ========== ========== Income per common equivalent share - basic and diluted: $ .01 $ .01 ========== ========== Weighted average number of common shares outstanding: 2,427,922 2,427,922 ========== ========== The accompanying notes are an integral part of these financial statements. -2- AIR BROOK AIRPORT EXPRESS, INC. AND SUBSIDIARY CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT FOR THE THREE MONTHS ENDED JANUARY 31, 2006 (UNAUDITED)
Common Stock Additional Total ---------------------- Paid-in Accumulated Stockholders' Shares Amount Capital Deficit Deficit --------- ------- -------- ---------- ---------- Balances at October 31, 2005 2,427,922 $ 243 $ 425,146 $(831,580) $(406,191) Net income for the three months ended January 31, 2006 16,205 16,205 --------- ------- -------- ---------- ---------- Balance at January 31, 2006 2,427,922 $ 243 $425,146 $(815,375) $(389,986) ========= ======= ======== ========== ==========
The accompanying notes are an integral part of these financial statements. - 3 - AIR BROOK AIRPORT EXPRESS, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED JANUARY 31, (UNAUDITED)
2006 2005 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 16,205 $ 13,851 Adjustments to reconcile net income to net cash consumed by operating activities: Changes in current liabilities: Decrease in accounts payable and accrued expenses -- -- Decrease in amount due to Affiliate (16,250) (13,881) -------- -------- Net cash consumed by operating activities (45) (30) CASH FLOWS FROM INVESTING ACTIVITIES -- -- CASH FLOWS FROM FINANCING ACTIVITIES -- -- -------- -------- Decrease in cash (45) (30) Cash, beginning of period 96 61 -------- -------- Cash, end of period $ 51 $ 31 ======== ========
The accompanying notes are an integral part of these financial statements. - 4 - AIR BROOK AIRPORT EXPRESS, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JANUARY 31, 2006 NOTE 1 BASIS OF PRESENTATION The unaudited interim consolidated financial statements of Air Brook Airport Express, Inc. and Subsidiary ("the Company") as of January 31, 2006 and for the three month periods ended January 31, 2006 and 2005, have been prepared in accordance with the instructions for form 10-QSB and do not include all information in footnotes for a full presentation of financial position, results of operations, and cash flows in accordance with generally accepted accounting principles. In the opinion of management, such information contains all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for such periods. The results of operations for the quarter ended January 31, 2006 are not necessarily indicative of the results to be expected for the full fiscal year ending October 31, 2006. Certain information and disclosures normally included in the notes to financial statements have been condensed or omitted as permitted by the rules and regulations of the Securities and Exchange Commission, although the Company believes the disclosure is adequate to make the information presented not misleading. The accompanying unaudited financial statements should be read in conjunction with the financial statements of the Company for the year ended October 31, 2005. NOTE 2 INCOME TAXES Under Statement of Financial Accounting Standards No. 109, recognition of deferred tax assets is permitted unless it is more likely than not that the assets will not be realized. At October 31, 2005, the Company had recorded deferred tax assets as follows: Current --------- Deferred Tax Assets $ 18,000 Realization Allowance 10,500 --------- Balance Recognized $ 7,500 ========= The provisions for current income taxes were $7,855 in the year ended October 31, 2005 and $7,382 in the year ended October 31, 2004. These provisions were offset by adjustments to the realization allowance, reducing to zero the income tax charge each year. - 5 - AIR BROOK AIRPORT EXPRESS, INC. AND SUBSIDIARY FORM 10-QSB JANUARY 31, 2006 ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Three months ended January 31, 2006 compared to three months ended January 31, 2005 Pursuant to an agreement signed on February 4, 1991, the Company transferred all of its operating activities for its satellite terminal located in Ridgewood, New Jersey and, on July 1, 1991 its transportation equipment, to Air Brook Limousine, Inc. ("Air Limo"). Air Limo in return pays the Company a fee equal to ten percent (10%) of gross Air Brook Airport Express collections from such terminal. On May 1, 1993, the Company entered into an agreement with Air Limo in which Air Limo agreed to open and operate a second satellite terminal located in the borough of Montvale, New Jersey. Pursuant to the agreement, Air Limo bears all costs of operating such terminal and pays the Company three percent (3%) of Air Limo's gross receipts from Air Brook Airport Express operations at such terminal. On August 10, 1993, the Company entered into an agreement with Air Limo which stipulates that Air Limo will fund the Company's operations for as long as Air Limo deems necessary and as long as Air Limo is financially able. Such advances are due on demand. Air Limo may terminate such agreement at any time at its own discretion. In conjunction with such agreements, the Registrant has generated revenue of $17,657 and $15,729 for the three months ended January 31, 2006 and 2005, respectively. This increase in revenue resulted from an increase in Air Brook Airport Express passenger volume. For the three months ended January 31, 2006, the Company has generated net income in the amount of $16,205, whereas for the three months ended January 31, 2005 the Company generated net income in the amount of $13,851. This increase in income occurred because of an increase in revenue. - 6 - AIR BROOK AIRPORT EXPRESS, INC. AND SUBSIDIARY FORM 10-QSB JANUARY 31, 2006 PART II - OTHER INFORMATION ITEM 1 - Legal Proceedings: None ITEM 2 - Changes in Securities: None ITEM 3 - Defaults Upon Senior Securities: None ITEM 4 - Submission of Matters to a Vote of Security Holders: None ITEM 5 - Other Information: None ITEM 6 - Exhibits and Reports on Form 8-K: None ITEM 7 - Certification of Officers Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Sections 906 and 302 of the Sorbanes - Oxley Act of 2002, the President, Chief Financial Officer and Secretary of the Company certify that: 1. Each officer has reviewed this report. 2. Based upon the knowledge of each officer, 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. 3. Based on each officer's knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition and results of operations of the issuer as of, and for, the periods presented in this report. 4. The officers signing below are responsible for internal controls, have designed controls to ensure that material information is made known to the officers on a timely basis, have evaluated the effectiveness of those controls within 90 days prior to this report, and have reported on their evaluation of the controls. - 7 - 5. The officers signing below have disclosed to the auditors all significant internal control problems and any fraud involving employees who have significant internal control responsibilities. 6. The officers signing below have indicated in this report whether there are any significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of their evaluation, including actions correcting weakness in control. 7. (a) The Company maintains controls and procedures designed to ensure that the information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Based upon their evaluation of those controls and procedures performed within 90 days of the filing date of this report, the chief executive officer and the principal financial officer of the Company concluded that the Company's disclosure controls and procedures were adequate. (b) Changes in internal controls. The Company made no significant changes in its internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation of those controls by the chief executive officer and principal financial officer. - 8 - AIR BROOK AIRPORT EXPRESS, INC. AND SUBSIDIARY FORM 10-QSB JANUARY 31, 2006 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Air Brook Airport Express, Inc. ------------------------------- (Registrant) March 14, 2006 Donald M. Petroski ----------------------- ------------------ Date Donald M. Petroski, President, Director and Chief Financial Officer - 9 -