THE IMPORTANT PART OF THE DOT REQUEST:
Based on our review, it does not appear as though Baltia
has the financial wherewithal to conduct its proposed operations. Without third-party
verification, among other things, of all lines-of-credit available, we are unable to accept
Baltia's line-of-credit guarantees from Igor Dmitrowsky, Brian Glynn, and Walter
Kaplinksy. We are also unable to accept the letter of commitment from Preston Capital
Partners because the funds will become available after Baltia commences operations.
Consequently, please provide the following information:
1. Provide a current (within three months) balance sheet and income statement,
together with their accompanying explanatory footnotes.
2. Provide more details regarding the pre-operating cost forecast included in Exhibit
33. In addition to the costs you already included, this forecast should include legal
fees, gates, and hanger space. Sufficient detail should be provided to allow us to
replicate the mathematics used. If Baltia believes these expenses will not be
incurred prior to its commencement of certificated flight operations, it should state,
in detail, the reasons why the Department should consider this forecast reasonable.
3. Please provide third-party verification of all funds currently on deposit in Baltia's
name. Copies of personal checks not deposited cannot be accepted as a part of your
available capital.
4. The personal financial statements prepared by Baltia's Certified Public Accountant
for Igor Dmitrowsky, Brian Glynn, and Walter Kaplinksy evidencing their financial
ability to provide funding to Baltia is not considered third-party verification of all
line-of-credits available. Therefore, please provide third-party verification (bank
statements, etc.) of all lines-of-credit available to support Baltia's proposed
operations. This verification should also include the total available line-of-credit,
the amount such credit line has been drawn down to date, any conditions that must
be met before funds will be advanced, the terms of repayment, and the expiration
date.
5. Regarding the equipment lines-of-credit, only the budgeted amount for equipment
included in your pre-operating expense or first-year expense forecasts will be
applied towards your total funding available. In other words, though Exhibits 43
and 44 list lines-of-credit for equipment valued at $225,000, the Department only
considers the value budgeted for equipment in Baltia's pre-operating and first-year
expense forecasts as funds available for the Hne-of-credit contribution. Therefore,
please specify which line items in your income statements are equipment. This
verification should also include the total available line-of-credit, the amount such
credit line has been drawn down to date, any conditions that must be met before
funds will be advanced, the terms of repayment, and the expiration date.
6. You state in Exhibit 45 that Baltia has 40 million warrants redeemable at $0.10, all
of which are expiring within three years from September 27, 2007. In addition,
Baltia anticipates receiving an additional $3 million in revenue from the exercise of
its warrants. Have these warrants been exercised? If so, please provide the number
of warrants exercised and the amount of money received. Also, please explain why
your additional revenue calculation for exercising the warrants is valued at $3
million.
7. Exhibit 1 states that Baltia has the authority to issue 300 million shares ($.0001 par
value) and 2 million preferred shares ($0.01 par value). Exhibit 4 states that Baltia
has issued 230,722,661 common shares and does not reference the number of
preferred shares issued. Therefore, please provide the number of preferred shares
that are issued and outstanding, to date.
8. Exhibit 27 lists the leading shareholders of Baltia. However, Cede & Co., holding
10.98 percent of shares according to Exhibit 4, is not listed as a leading
shareholder. Please explain and provide more information regarding the ownership
structure of Cede & Co, including its citizenship.
AI
