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EXCEL - IDEA: XBRL DOCUMENT - BLACKPOLL FLEET INTERNATIONAL, INC.Financial_Report.xls
EX-31.1 - EXHIBIT 31.1 - BLACKPOLL FLEET INTERNATIONAL, INC.ex31_1.htm
EX-32.1 - EXHIBIT 32.1 - BLACKPOLL FLEET INTERNATIONAL, INC.ex32_1.htm
EX-31.2 - EXHIBIT 31.2 - BLACKPOLL FLEET INTERNATIONAL, INC.ex31_2.htm


United States
Securities and Exchange Commission
Washington, D.C. 20549
 
Form 10-Q
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarter ended: July 31, 2014
 
Commission file no.: 333-185572
 
BASTA HOLDINGS, CORP.
(Name of Small Business Issuer in its Charter)
     
Nevada  
99-0367603
(State or other jurisdiction of incorporation or organization)
  (I.R.S. Employer Identification No.)
     
1111 Kane Concourse, Suite 518
Bay Harbor Islands, FL
  33154
(Address of principal executive offices)
  (Zip Code)
 
Issuer's telephone number: (305) 867-1228
Securities registered under Section 12(b) of the Act:
 
Title of each class   Name of each exchange on which registered
None   None
 
Securities registered under Section 12(g) of the Act:
 
Common Stock, $0.001 par value per share
(Title of class)
 
Indicate by Check whether the issuer (1) 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. x Yes    o No
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes    o No
 
Indicate by check mark whether the registrant is an accelerated filer, a non-accelerated filer, or a smaller reporting company.
 
 
Large accelerated filer
o
Accelerated filer
o
 
Non-accelerated filer
o
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). o Yes    x 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:
 
As of September 17, 2014 there were 3,730,000 shares of voting stock of the registrant issued and outstanding.
 
 
 

 
 
BASTA HOLDINGS, CORP.
FORM 10-Q
July 31, 2014
 
TABLE OF CONTENTS
 
     
Page No.
PART I. - FINANCIAL INFORMATION
Item 1.
Financial Statements.
 
 
  Condensed Balance Sheets as of July 31, 2014 (Unaudited) and October 31, 2013 (Audited)  
4
 
 
5
 
 
6
 
 
7
 
 
8-13
 
14
 
18
 
18
       
PART II - OTHER INFORMATION
 
18
 
19
 
19
 
19
 
19
 
19
 
20
 
 
2

 
 
FORWARD LOOKING STATEMENTS
 
This report contains forward-looking statements regarding our business, financial condition, results of operations and prospects. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements, but are not deemed to represent an all inclusive means of identifying forward-looking statements as denoted in this report. Additionally, statements concerning future matters are forward-looking statements.
 
Although forward-looking statements in this report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our report on Form 10-K as filed with the Securities and Exchange Commission on January 7, 2014, in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-Q and in other reports that we file with the SEC. You are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this report.
 
We file reports with the SEC. The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us. You can also read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. You can obtain additional information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
 
We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report, except as required by law. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this quarterly report, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.
 
 
3

 
 
BASTA HOLDINGS, CORP.
CONDENSED BALANCE SHEETS
 
   
July 31,
   
October 31,
 
   
2014
   
2013
 
   
(Unaudited)
   
(Audited)
 
ASSETS
           
             
Current Assets
           
Cash
  $ 13,202     $ 3,889  
Prepaid expenses
    10,000       3,540  
                 
Total Current Assets
    23,202       7,429  
                 
Property and Equipment, net     3,570        —  
Deposits
    50,000        
                 
Total Assets
  $ 76,772     $ 7,429  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
               
                 
Current Liabilities
               
Loan payable - related party
  $     $ 14,383  
Accounts payable
    3,250        
Accrued expenses
    25,476        
Advances payable
    29,528        
                 
Total Current Liabilities
    58,254       14,383  
                 
Commitments                
                 
Stockholders' Equity (Deficit)
               
Series A Preferred Stock $0.001 par value; 5,000,000 shares authorized at July 31, 2014; no shares authorized, issued and outstanding at October 31, 2013
           
Series B Convertible Preferred Stock $0.001 par value; 5,000,000 shares authorized at July 31, 2014; 37,500 issued and outstanding at July 31, 2014; no shares authorized, issued and outstanding at October 31, 2013
    38        
Common stock $0.001 par value; 250,000,000 shares authorized; 3,730,000 shares issued and outstanding at July 31, 2014; 75,000,000 shares authorized 3,730,000 shares issued and outstanding at October 31, 2013
    3,730       3,730  
Additional paid-in-capital
    72,376       21,170  
Accumulated deficit
    (57,626 )     (31,854 )
                 
Total Stockholders' Equity (Deficit)
    18,518       (6,954 )
                 
Total Liabilities and Stockholders'  Equity (Deficit)
  $ 76,772     $ 7,429  
 
See accompanying notes to the condensed financial statements.
 
 
4

 
 
BASTA HOLDINGS, CORP.
CONDENSED STATEMENTS OF OPERATIONS
 
   
For the Three Months Ended July 31,
   
For the Nine Months Ended July 31,
 
   
2014
   
2013
   
2014
   
2013
 
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
 
                         
COMMISSION REVENUE, NET
                       
(Flight revenue arranged - $3.6 million)
  $ 406,018     $     $ 411,018     $  
                                 
COST OF COMMISSION REVENUE
    54,154             54,154        
                                 
GROSS PROFIT
    351,864             356,864        
                                 
OPERATING EXPENSES
                               
General and administrative
    219,479       18,726       382,636       27,451  
                                 
INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES
    132,385       (18,726 )     (25,772 )     (27,451 )
                                 
PROVISION FOR INCOME TAXES
                       
                                 
NET INCOME (LOSS)
  $ 132,385     $ (18,726 )   $ (25,772 )   $ (27,451 )
                                 
                                 
Net Income (Loss) per common share - Basic
  $ 0.04     $ (0.01 )   $ (0.01 )   $ (0.01 )
Net Income (Loss) per common share - Diluted
  $ 0.03     $ (0.01 )   $ (0.01 )   $ (0.01 )
                                 
Weighted Average Shares Outstanding - Basic
    3,730,000       3,730,000       3,730,000       3,456,575  
Weighted Average Shares Outstanding - Diluted
    3,842,500       3,730,000       3,730,000       3,456,575  
 
See accompanying notes to the condensed financial statements.
 
 
5

 
 
BASTA HOLDINGS, CORP.
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
For the Period from November 1, 2013
to July 31, 2014
 
    Class B Convertible                
Additional
         
Total
 
    Preferred Stock    
Common Stock
   
Paid-in
   
Accumulated
   
Stockholders’
 
    Shares
 
Amount
   
Shares
   
Amount
   
Capital
   
Deficit
   
Equity (Deficit)
 
                                           
Balance, October 31, 2013 (Audited)
 
 
$
     
3,730,000
   
$
3,730
   
$
21,170
   
$
(31,854
)
 
$
(6,954
)
                                                     
Issuance of 37,500 shares of Class B Convertible Preferred Stock
 
37,500
   
38
     
     
     
37,462
     
     
37,500
 
Shareholder loan forgiven as contributed capital
 
   
     
     
     
13,744
     
     
13,744
 
Net loss for the period
 
   
     
 
     
     
     
(25,772
)
   
(25,772
)
                                                     
Balance, July 31, 2014 (Unaudited)
 
37,500
 
$
38
     
3,730,000
   
$
3,730
   
$
72,376
   
$
(57,626
)
 
$
18,518
 
 
See accompanying notes to the condensed financial statements.
 
 
6

 
 
BASTA HOLDINGS, CORP.
CONDENSED STATEMENTS OF CASH FLOWS
 
    
Nine Months Ended
   
Nine Months Ended
 
   
July 31, 2014
   
July 31, 2013
 
             
CASH FLOWS FROM OPERATING ACTIVITIES:
           
Net loss
  $ (25,772 )   $ (27,451 )
Depreciation expense
    224        
Adjustments to reconcile net loss to net cash used in operating activities:
               
Changes in operating assets and liabilities:
               
Deposits
    (50,000 )      
Prepaid expenses
    (6,460 )     (5,540 )
Accounts payable
    3,250       200  
Accrued expenses
    25,475        
                 
NET CASH USED IN OPERATING ACTIVITIES
    (53,283 )     (32,791 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:
               
Purchase of property and equipment
    (3,794 )      
                 
NET CASH USED IN INVESTING ACTIVITIES
    (3,794 )      
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Proceeds from sale of preferred stock
    37,500        
Proceeds from sale of common stock
          21,900  
Net proceeds received from advances payable
    29,529        
Payment of related party loan
    (639 )      
Proceeds from loan from shareholder
          8,200  
                 
NET CASH PROVIDED BY FINANCING ACTIVITIES
    66,390       30,100  
                 
Net Increase (Decrease) in Cash
    9,313       (2,691 )
                 
Cash, Beginning of Period
    3,889       3,100  
                 
Cash, End of Period
  $ 13,202     $ 409  
                 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
               
Cash paid for interest
  $     $  
Cash paid for income taxes
  $     $  
NON-CASH FINANCING TRANSACTIONS:                
Shareholder loan forgiven as contributed capital   $ 13,744     $  
 
See accompanying notes to the condensed financial statements.
 
 
7

 
 
BASTA HOLDINGS, CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
July 31, 2014
 
NOTE 1 - ORGANIZATION AND BUSINESS OPERATIONS
 
Basta Holdings, Corp. (the “Company”, “us”, “we”) was incorporated under the laws of the State of Nevada on May 11, 2011 and intended to commence operations in the distribution of copper pipes and fittings for sanitary engineering. In January 2014, the Company’s majority shareholder sold 100% of her ownership representing 80.42% of the Company’s outstanding common shares to a third party in a private transaction. Coincidental with this change of ownership, the Company discontinued its previous business plan to distribute copper pipes and fittings for sanitary engineering and adopted a new business plan to provide aviation services to third parties. These services include the provision of aviation support services to Aircraft Charter Solutions, Inc. (“ACS”), a company that provides aviation support services to AECOM Technology Corporation, a subcontractor for Dyncorp International Inc., which is a contractor for the U.S. government under the U.S. Army’s Logistics Civil Augmentation Program (“LOGCAP”) in Afghanistan. The Company shall be a subcontractor for ACS, providing ACMI (aircraft, crew, maintenance, insurance) as well as war risk insurance, operational management and dispatch coordination for flights, U.S. government regulation and compliance with government mandated MOD 11 level medical examinations, visas and communication support, and other management and logistic support. The Company’s flight operations will include services such as the delivery of food, water, fuel, spare parts, personnel and other items to locations throughout Afghanistan. Additionally, the Company provides similar services to IAL International Aviation Logistics Limited (“IAL”) for services rendered in Libya.
 
The Company also provides management services to WAB International, Inc. (“WAB”), and promotion and marketing of services to Monarch Air Group, LLC (“Monarch”), which are affiliated with the Company through common management.
 
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Basis of presentation
 
Management acknowledges its responsibility for the preparation of the accompanying interim financial statements which reflect all adjustments, consisting of normal recurring adjustments, considered necessary in its opinion for a fair statement of its financial position and the results of its operations for the interim period presented. These financial statements should be read in conjunction with the summary of significant accounting policies and notes to financial statements included in the Company’s filing of Form 10-K as filed with the Securities and Exchange Commission. The accompanying unaudited financial statements for Basta Holdings, Corp. have been prepared in accordance with accounting principles generally accepted in the United States of America (the “U.S.”) for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole.
 
Development Stage Company
 
The Company was in the development stage through April 30, 2014. The quarter ended July 31, 2014 is the first reporting period during which the Company is considered an operating company and is no longer in the development stage.
 
Use of estimates
 
The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates.
 
 
8

 
 
BASTA HOLDINGS, CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
July 31, 2014
 
Fair value of financial instruments
 
The Company adopted the guidance of Accounting Standards Codification (“ASC”) 820 for fair value measurements which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:
 
*
Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.
*
Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.
*
Level 3-Inputs are unobservable inputs that reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.
 
The carrying amounts reported in the balance sheets for cash, deposits, prepaid expenses, loan payable - related party, accounts payable, accrued expenses, and advances payable approximate their fair market value based on the short-term maturity of these financial instruments. The Company did not have any non-financial assets or liabilities that are measured at fair value on a recurring basis as of July 31, 2014 and October 31, 2013.
 
ASC 825-10 “Financial Instruments”, allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments.
 
Cash and cash equivalents
 
For purposes of the statements of cash flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less and money market accounts to be cash equivalents.
 
Accounts receivable
 
The Company recognizes an allowance for losses on accounts receivable in an amount equal to the estimated probable losses net of recoveries. The allowance is based on an analysis of historical bad debt experience, current receivables aging, and expected future write-offs, as well as an assessment of specific identifiable customer accounts considered at risk or uncollectible. Management determined that an allowance was not required as of the balance sheet dates.
 
Property and equipment
 
Property and equipment are carried at cost and are depreciated on a straight-line basis over the estimated useful lives of the assets. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of fixed assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable.
 
Impairment of long-lived assets
 
In accordance with ASC 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. The Company did not record any impairment charges for the nine months ended July 31, 2014 and 2013.
 
Revenue recognition
 
The Company recognizes revenue when persuasive evidence of an arrangement exists, products are fully delivered or services have been provided, the price is fixed or determinable and collection is reasonably assured. Revenue from helicopter services on an “ad hoc” basis, which usually entails a short contract notice period and duration, is recognized as the related services are performed and is based on a monthly fixed fee plus additional fees for each hour flown. The Company works as an agent between its customers and the service providers under these “ad hoc” service arrangements. Therefore, the Company recognizes revenue under these arrangements on the net amount retained, which is the amount billed to the customer less the amount paid to the service providers.
 
 
9

 
 
BASTA HOLDINGS, CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
July 31, 2014
 
Income taxes
 
The Company is governed by the income tax laws of the United States of America. The Company accounts for income tax using the liability method prescribed by ASC 740, “Income Taxes”. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the year in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date.
 
The Company applies the provisions of ASC 740-10-50, “Accounting for Uncertainty in Income Taxes”, which provides clarification related to the process associated with accounting for uncertain tax positions recognized in our consolidated financial statements. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of July 31, 2014 and October 31, 2013, the Company had no uncertain tax positions, and will continue to evaluate for uncertain positions in the future.
 
Advertising
 
Advertising is expensed as incurred and is included in general and administrative expenses on the accompanying unaudited condensed statements of income.
 
Stock-based compensation
 
Stock-based compensation is accounted for based on the requirements of ASC 718, “Share-Based Payment”, which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.
 
Pursuant to ASC 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the service period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date. The Company issued no stock based compensation during the three and nine months ended July 31, 2014 or 2013.
 
Net income (loss) per share of common stock
 
The Company computes income (loss) per share in accordance with ASC-260, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic net loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. During the three and nine month periods ended July 31, 2014 and 2013, preferred B shares were issued, and they are potentially dilutive. Weighted average shares outstanding on a dilutive basis for the 3 months ended July 31, 2014 include 75,000 shares of common stock equivalents related to the conversion feature of Series B Convertible Preferred Stock and 37,500 shares related to the issuance of common stock warrants.
 
 
10

 
 
BASTA HOLDINGS, CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
July 31, 2014
 
Related party transactions
 
A related party is generally defined as (i) any person that holds 10% or more of the Company’s securities including such person’s immediate families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.
 
Recent accounting pronouncements
 
Accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the condensed financial statements upon adoption.
 
NOTE 3 - RELATED PARTY TRANSACTIONS
 
Loan payable - related party
 
Since Inception (May 11, 2011) through January 31, 2014, the Company’s former controlling shareholder had loaned the Company $14,383 to pay for incorporation costs and operating expenses. As of October 31, 2013, the total loan amount was $14,383. The loan was non-interest bearing, due upon demand and unsecured. In January 2014, the Company repaid $639 of such loans. Additionally, in January 2014, the former controlling shareholder sold 100% of her interest in the Company to a third party and forgave all payments due to her. Accordingly, the Company reclassified all amounts to due to the former controlling shareholder of $13,744 to additional paid-in capital as contributed capital.
 
Flight service performed by affiliated company
 
The Company paid $3,226,500 to WAB for costs related to flight services provided to our customers during the quarter ended July 31, 2014. These costs are reported as part of commission revenue, net, on the accompanying condensed statements of operations.
 
NOTE 4 - ADVANCES PAYABLE
 
During the nine months ended July 31, 2014, the Company received advances from WAB for working capital purposes. The advances bear no interest, are payable on demand and are unsecured. At July 31, 2014, the Company owes WAB $29,528.
 
NOTE 5 - STOCKHOLDERS’ DEFICIT
 
On April 10, 2014, the Company amended its articles of incorporation to increase the number of authorized common shares with a par value of $0.001 per share from 75,000,000 common shares to 250,000,000 common shares. Additional, the Company changed its capitalization to include 5,000,000 shares of Series A Preferred Stock, $0.001 par value, and 5,000,000 shares of Series B Convertible Preferred Stock, $0.001 par value which are issuable at the discretion of the board of directors.
 
Series A Preferred Stock
 
Dividends shall be paid on the Series A Preferred shares at the discretion of the Board of Directors. Each share of Series A Preferred Stock shall be entitled to ten (10) votes on all shareholder matters.
 
 
11

 
 
BASTA HOLDINGS, CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
July 31, 2014
 
Series B Convertible Preferred Stock
 
Dividends shall be paid on the Series B convertible preferred stock (“Series B Preferred Stock”) at the discretion of the Board of Directors. Upon the request of the holder, each share of Series B Preferred Stock shall be convertible into two (2) shares of Common Stock. Shares of Series B Preferred Stock shall not be entitled to vote on any shareholder matter and shall have no voting rights whatsoever.
 
As of July 31, 2014, the Company had 3,730,000 shares of common stock issued and outstanding, no Series A preferred stock issued and outstanding, and 37,500 shares of Series B preferred stock issued and outstanding.
 
NOTE 6 - COMMITMENTS
 
Material agreements
 
The Company has a one year lease whereby it pays $5,000 a month to World Wide Aviation Group (an affiliate). The lease is renewable on an annual basis.
 
On January 31, 2014, the Company entered into the following two agreements:
 
Agreement with WAB
 
On January 31, 2014, and effective January 31, 2014, the Company entered into an Exclusive Agreement for Management related to two of WAB’s aviation services contracts. As consideration for this agreement, the Company originally agreed to amend its articles of incorporation to authorize the issuance of a number of Series A Preferred Shares to be determined at a later date and each such share was to entitle the holder to a certain number of votes. As the terms of this proposed agreement had not been finalized at January 31, 2014, the proposed issuance of the undetermined number of Series A Preferred Shares was not recorded in the Company’s financial statements at January 31, 2014. On March 12, 2014, prior to the amendment of the Company’s articles of incorporation and prior to the determination of the number of Series A preferred shares to be issued or the issuance of any such shares, the Company amended the agreement while maintaining the same effective date. The amended agreement calls for the Company to provide management services which include vendor and financial management under two of WAB’s contracts. The amendment provides that the Company will be paid ten percent (10%) of the gross revenues from the two contracts and eliminated the Company’s obligation to issue any Series A Preferred Shares to WAB.
 
WAB provides airlift support, dedicated helicopters and rotary and fixed wing aircraft to international clientele. WAB services include cargo and passenger transportation, logging, mining support, offshore drilling support, relief efforts, firefighting and search-and-rescue.
 
As of July 31, 2014, the Company had not commenced any activities pursuant to the Exclusive Agreement for Management. On May 1, 2014, the Company’s management decided to amend the agreement with WAB to enable Basta to enter into its own management services agreements with customers, some of which include former customers of WAB.
 
Agreement with Monarch
 
Effective January 31, 2014, the Company entered into an Exclusive Agreement for the Promotion and Marketing of Services of Monarch Air Group, LLC (“Monarch”). Upon execution of this agreement, the Company received a one-time fee of $5,000, which has been reflected in revenues for the three months ended January 31, 2014, and Monarch agreed to pay us 10% of gross sales generated from the flight services under this agreement. No fees were paid to Basta from Monarch due to this arrangement.
 
Monarch is a Florida limited liability company that is in the business of providing aircraft, crew maintenance and insurance leases for rotary and fixed wing aircraft as well as chartering on-demand private, corporate and luxury flights.
 
 
12

 
 
BASTA HOLDINGS, CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
July 31, 2014
 
Operating lease
 
On April 20, 2014 and beginning on May 5, 2014, the Company entered into a two year Aircraft Dry Operating Lease Agreement (the Aircraft Dry Lease”) with an individual in connection with the lease of an aircraft. The Aircraft Dry Lease expires on May 6, 2016, can be renewed by agreement in writing by all parties, and can be cancelled at any time with at least 60 day notice to the other without cause. Payments due pursuant to Aircraft Dry Lease are $10,000 per month plus $700 per flight hours flown in the previous month. Upon receipt of the aircraft, it was determined that it had maintenance issues that would keep it from safely flying for a significant period, and so the lease was adjusted to start once the aircraft is deemed safe for flight. The $10,000 payment for the first month has been re-classified as a Prepaid Expense on the condensed balance sheets. The Company paid a security deposit of $50,000 for the operating lease.
 
On May 30, 2014, we entered into an Aircraft Management Agreement with Monarch. Pursuant to that Agreement, Monarch agreed to use, maintain and operate a Beechcraft 400 that the Company leases. Monarch agreed to maintain the aircraft and manage it at the Company’s expense and cost and the Company agreed to pay Monarch 10% of all funds received for Charters in any given month. Additionally, pilot salaries and benefits and other expenses, as defined, will be paid by the Company. Basta received no payments from Monarch from this agreement.
 
NOTE 7 - SUBSEQUENT EVENTS
 
Letter of Intent with Peruvian Company
 
On August 15, 2014, we entered into a Letter of Intent (“LOI”) with Heliflight Peru SAC (“Heliflight Peru”) which provides the framework for the leasing of helicopters to Heliflight Peru. Both parties have 90 days to complete due diligence and to execute a final agreement and one hundred twenty (120) days to close the transaction. The LOI requires that once a final agreement is reached, Heliflight Peru will be required to lease helicopters with certain minimum hours. The amount of revenues that the Company will generate if a final agreement is reached is to be determined. There is no assurance that a final agreement will be reached.
 
Letter of Intent with Colombian Company, ISIN Number Assigned
 
On August 19, 2014, we entered into a Letter of Intent with Heli Jet S.A.S. (“Heli Jet”) which provides the framework for us acquiring 49% of Heli Jet, which is located in Bogota, Colombia. Heli Jet is a general aviation company with two locations in Colombia that specializes in providing fixed wing aircraft leases primarily in the form of chartered jets for corporate executives. The amount of revenues which the Company will generate if a final agreement is reached is to be determined. There is no assurance that a final agreement will be reached.
 
Resignation of Chief Financial Officer
 
On August 26, 2014, Adam Wasserman tendered his written resignation as Chief Financial Officer and Director of the Company. In his letter of resignation, Mr. Wasserman stated his resignation was not the result of any disagreements with the Company on any matter relating to the Company’s operations, policies, including accounting or financial policies or practices. In the interim Jacob Gitman, the current President of the Company, was appointed as our Chief Financial Officer until a replacement can be retained.
 
Creation of a Direct Financial Obligation
 
On August 21, 2014, the Company entered into a Convertible Note in the amount of $500,000. The Note has a one year term, bears interest at 6% per annum; it is convertible into common stock at the price of $6.70 per share, which was the average closing price of our common stock on the date the loan was closed.
 
 
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
 
DESCRIPTION OF BUSINESS
 
We provide aviation services to third parties. These services include the provision of aviation support services to Aircraft Charter Solutions, Inc. (“ACS”), a company that provides aviation support services to AECOM Technology Corporation, a subcontractor for Dyncorp International Inc., which is a contractor for the U.S. government under the U.S. Army’s Logistics Civil Augmentation Program (“LOGCAP”) in Afghanistan. The Company shall be a subcontractor for ACS, providing ACMI (aircraft, crew, maintenance, insurance) as well as war risk insurance, operational management and dispatch coordination for flights, U.S. government regulation and compliance with government mandated MOD 11 level medical examinations, visas and communication support, and other management and logistic support. The Company’s flight operations will include services such as the delivery of food, water, fuel, spare parts, personnel and other items to locations throughout Afghanistan. Additionally, the Company provides similar services to IAL International Aviation Logistics Limited (“IAL”) for services rendered in Libya.
 
The Company also provides management services to WAB International, Inc. (“WAB”), and promotion and marketing of services to Monarch Air Group, LLC (“Monarch”), which are affiliated with the Company through common management.
 
On January 31, 2014, and effective January 31, 2014, we entered into an Exclusive Agreement for Management related to two of WAB’s Aviation Services Contracts. In consideration with this agreement, we originally agreed to amend its articles of incorporation to authorize the issuance of Series A Preferred Shares and each such share was to entitle the holder to a certain number of votes. On March 12, 2014, we amended that agreement while maintaining the same effective date. The amended agreement calls for us to provide management services which includes vendor and financial management under two of WAB’s contracts. The amendment provides that we will be paid ten percent (10%) of the gross revenues from the two contracts and eliminated our obligation to issue to any Series A Preferred Shares to WAB. WAB provides airlift support, dedicated helicopters and rotary and fixed wing aircraft to international clientele. WAB services include cargo and passenger transportation, logging, mining support, offshore drilling support, relief efforts, firefighting and search-and-rescue. As of April 30, 2014, the Company had not commenced any activities pursuant to Exclusive Agreement for Management. Management is in the process of developing plans and anticipates launching said services before the end of the quarter ending July 31, 2014.
 
During the quarter covered by this Report, Management reviewed the Company’s contract with WAB International, Inc. to determine its overall viability. Due to the reductions of US DOD’s operations in Afghanistan and Iraq, which have been implemented by the US Government ahead of previously anticipated schedules, Management concluded that focusing our efforts on the remainder of the respective WAB contracts was not in the best interest of the Company. Instead, with approval from WAB, we approached several customers, including, but not limited to, former customers of WAB, and offered our ACMI, maintenance, repair and overhaul and other services directly to such customers on a month to month basis. The result was that the Company was awarded direct orders from these customers and proceeded to deliver services to them on a case by case basis throughout the quarter. We anticipate that such direct engagements will continue. In addition, the Company will make efforts to expand its outreach to new customers with direct offers of ACMI, MRO and other fixed and rotary wing specialty aviation services.
 
Effective January 31, 2014, we entered into an Exclusive Agreement for the Promotion and Marketing of Services of Monarch Air Group, LLC. (“Monarch”). Monarch is a Florida limited liability company which is in the business of providing aircraft, crew maintenance and insurance leases for rotary and fixed wing aircraft as well as chartering on-demand private, corporate and luxury flights. Upon execution of this agreement, the Company received a one-time fee of $5,000 which has been reflected in revenues for the nine months ended July 31, 2104, and Monarch agreed to pay us 10% of gross sales generated from our services As of July 31, 2014, the Company had not commenced any activities pursuant to the Exclusive Agreement for the Promotion and Marketing of Services. Management is in the process of developing plans and anticipates launching said services before the end of the quarter ending October 31, 2014.
 
On April 20, 2014 and beginning on May 5, 2014, the Company entered into a two year Aircraft Dry Operating Lease Agreement (the Aircraft Dry Lease”) with an individual in connection with the lease of an aircraft. The Aircraft Dry Lease expires on May 6, 2016, can be renewed by agreement in writing by all parties, and can be cancelled at any time with at least 60 day notice to the other without cause. Payments due pursuant to Aircraft Dry Lease are $10,000 per month plus $700 per flight hours flown in the previous month. Upon receipt of the aircraft, it was determined that it had maintenance issues that would keep it from safely flying for a significant period, and so the lease was adjusted to start once the aircraft is deemed safe for flight. The $10,000 payment for the first month has been re-classified as a Prepaid Expense on the consolidated Balance Sheet. The Company paid a security deposit of $50,000 for the operating lease
 
On May 30, 2014, we entered into an Aircraft Management Agreement with Monarch. Pursuant to that Agreement, Monarch agreed to use, maintain and operate a Beechcraft 400 that the Company leases. Monarch agreed to maintain the aircraft and manage it at the Company’s expense and cost and the Company agreed to pay Monarch 10% of all funds received for Charters in any given month. Additionally, pilot salaries and benefits and other expenses, as defined, will be paid by the Company. Basta received no payments from Monarch from this agreement.
 
On May 20, 2014 we entered into an agreement with Chemoil Corporation DBA Chemoil Aviation to purchase and sell Chemoil’s jet fuel. We will act as a representative of Chemoil by introducing Chemoil to prospective customers and jet fuel suppliers. We will earn a commission on all revenues generated by corresponding agreements that we broker between our customers and Chemoil. The commission rate is to be determined. In addition, we will purchase aviation fuel from Chemoil for resale to customers at fixed based operator sites and maintenance repair overhaul facilities. As of July 31, 2014, we had not generated any purchases or sales under this agreement.
 
 
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Current Operating Environment and Outlook
 
After a decade of unprecedented defense spending to support operations in Afghanistan and throughout the Middle East, our industry is adjusting to a period of reduced funding and budget uncertainty brought about by the convergence of a variety of policy, political and fiscal realities. These factors include the ongoing draw-down of U.S. troops in Afghanistan, and governmental spending cuts. While there exists potential challenges that could adversely impact our business on a short term basis, we believe the longer term industry trends are positive and will result in continued demand in our target markets for the types of services we provide. Such trends include the realignment of the military force structure, leading to increased outsourcing of non-combat functions, including life-cycle asset management functions ranging from organizational to depot-level maintenance;
 
While determining the size and scope of the U.S. and international presence in Afghanistan is dependent on concluding a Bilateral Security Agreement (“BSA”), we still anticipate remaining issues will be resolved and that there will be opportunities to support the enduring U.S. and NATO presence. Support opportunities include the U.S. Department of State (“DoS”), which is expected to expand and include the U.S. embassy in Kabul and four consulates around the country. Additionally, we anticipate that there will be a continued need to advise, assist and help professionalize Afghan National Security Forces for many years, as specified in the U.S. Afghanistan Strategic Partnership Agreement.
 
In the Middle East, we expect instability and challenges to our customer’s regional relationships will persist. However, we believe U.S. defense ties and presence throughout the region will continue to be of vital strategic interest to the U.S. and its allies. We believe that our aviation services and support will be key enablers in this environment and we are especially well positioned to provide these services to both U.S. forces and Allied nations. Finally, the re-balance to Asia reflects the increased importance of the Asia-Pacific regions, in both security and economic terms for the U.S. As the U.S. revitalizes and reinforces its presence in this vital region, we expect to see increased demand for our services to our existing and future customer base.
 
A convergence of market factors have led us to recognize a significant opportunity to establish a super-competitive Independent Aviation Maintenance, Repair and Overhaul (MRO) service strategically located in the U.S. to satisfy soaring demands of the world’s commercial jet transport fleet. We are pursuing a strategy that not only recognizes the enormous opportunity that these factors are creating, but also introduces a market-changing business model to rapidly gain customers and control market share for sustainable long-term growth. Once established and operated domestically, we plan on replicating our MRO business model in the rapidly expanding aviation markets of China and the former Soviet Union.
 
We cannot be certain that the economic environment or other factors will not adversely impact our business, financial condition or results of operations in the future. We believe that our primary sources of liquidity of strong customer collections will enable us to continue to perform under our existing relationships and support further growth of our business. However, adverse conditions, such as a long term credit crisis or sequestration, could adversely affect our ability to obtain additional liquidity at acceptable terms or at all.
 
Critical Accounting Policies and Estimates
 
While our significant accounting policies are more fully described in Note 2 to our financial statements for the three and nine months ended July 31, 2014, we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating this management discussion and analysis.
 
Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements 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. We continually evaluate our estimates, including those related to the accounting for and recovery of long-lived assets, income taxes, and the valuation of equity transactions. We base our estimates on historical experience and on various other assumptions that we 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 sources. Any future changes to these estimates and assumptions could cause a material change to our reported amounts of revenues, expenses, assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of the financial statements.
 
Impairment of long-lived assets
 
In accordance with ASC Topic 360, we review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. We recognize an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value.
 
 
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Revenue Recognition
 
The Company recognizes revenue when persuasive evidence of an arrangement exists, products are fully delivered or services have been provided, the purchase price is fixed or determinable and collection is reasonably assured. Revenue from helicopter services on an “ad hoc” basis, which usually entails a short contract notice period and duration, is recognized as the related services are performed and is based on a monthly fixed fee plus additional fees for each hour flown. The Company works as an agent between its customers and the service providers under these “ad hoc” service arrangements. Therefore, the Company recognizes revenue under these arrangements on the net amount retained, which is the amount billed to the customer less the amount paid to the service providers.
 
Recent accounting pronouncements
 
Accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption.
 
Comparison of Operating Results for the Three Months Ended July 31, 2014 to the Three Months Ended July 31, 2013
 
Revenues
 
For the three months ended July 31, 2014, we had reportable revenues of $406,018 as compared to no revenues for the three months ended July 31, 2013. During the quarter, we received a total of approximately $3.6 million in flight arranged revenue of which we paid approximately $3.2 million to WAB for costs related to flight services provided to our customers during the quarter ended July 31, 2014. These costs are reported as part of commission revenue, net, on the accompanying condensed statements of operations. We expect our revenues to increase in future quarters as we begin providing rotary and fixed wing aircraft services to our potential customers. The increased income from the same quarter last year is attributable to the Company’s contracts revenues whereby it became a fully operating company and is no longer in the development stage.
 
Operating Expenses
 
For the three months ended July 31, 2014, we incurred operating expenses of $219,479 as compared to $18,726 for the three months ended July 31, 2013. Operating expenses comprised general and administrative expenses of salaries and related benefits and professional fees such as legal and accounting, Edgar filing fees, consulting fees, investor relations fees, and transfer agent fees. The increase in general and administrative expenses in the three months ended July 31, 2014 as compared to the three months ended July 31, 2013 is mainly attributable due to the Company’s becoming operational in the third quarter as opposed to the Company’s status as a development stage company for the three months ended July 31, 2013.
 
Net Income
 
For the three months ended July 31, 2014, we had net income of $132,385 as compared to a net loss for the three months ended July 31, 2014 of $18,726. For the three months ended July 31, 2014 we had net income per common share of $0.04 and $0.03 (basic and diluted), as compared to a net loss per common share of $0.01 and $0.01 (basic and diluted) for the three months ended July 31, 2013. The turnaround in the quarter ended July 31, 2014 from the quarter ended July 31, 2013 is again attributable to the Company becoming a fully operating company with revenues as opposed to being a development stage company.
 
Comparison of Operating Results for the Nine Months Ended July 31, 2014 to Nine Months Ended July 31, 2013
 
Revenues
 
For the nine months ended July 31, 2014, we had reportable revenues of $411,018 as compared to no revenues for the nine months ended July 31, 2013. During the nine months, we received a total of approximately $3.6 million in flight arranged revenue of which we paid approximately $3.2 million to WAB for costs related to flight services provided to our customers during the nine months July 31, 2014. These costs are reported as part of commission revenue, net, on the accompanying condensed statements of operations. We expect our revenues to increase in future quarters as we begin providing rotary and fixed wing aircraft services to our potential customers. The increased income from the same quarter last year is attributable to the Company’s contracts revenues whereby it became a fully operating company and is no longer in the development stage.
 
 
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Operating Expenses
 
For the nine months ended July 31, 2014, we incurred operating expenses of $382,636 as compared to $27,451 for the nine months ended July 31, 2013. Operating expenses comprised general and administrative expenses of salaries and related benefits and professional fees such as legal and accounting, Edgar filing fees, consulting fees, investor relations fees, and transfer agent fees. The increase in general and administrative expenses in the nine months ended July 31, 2014 as compared to the nine months ended July 31, 2013 is mainly attributable due to the Company’s becoming operational in the third quarter as opposed to being a development stage company in the nine months ended July 31, 2013.
 
Net Loss
 
For the nine months ended July 31, 2014, we had a net loss of $25,772 as compared to a net loss for the nine months ended July 31, 2013 of $27,451. For the nine months ended July 31, 2014 we had net loss per common share of $0.01 and $0.01 (basic and diluted), as compared to a net loss per common share of $0.01 and $0.01 (basic and diluted) for the nine months ended July 31, 2013.
 
Liquidity and Capital Resources
 
Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. To date, we have funded our operations through the sale of our common stock, from loans from our former controlling shareholder, and others and from working capital advances. All funds received have been expended in the furtherance of growing the business. The following trends are reasonably likely to result in a material decrease in our liquidity over the near to long term:
 
An substantial increase in working capital requirements to finance our business plan,
Addition of administrative and professional personnel as the business grows, and
The cost of being a public company.
 
At July 31, 2014 we had current assets of $23,202 and total assets of $76,772 as compared to current and total assets of $7,429 at October 31, 2013. At July 31, 2014, we had current and total liabilities of $58,254 as compared to current and total liabilities of $14,383 at October 31, 2013.
 
We currently have no material commitments for capital expenditures, however, in order to expand operations, we must raise funds through equity or debt financing. We will need to raise additional funds, particularly if we are unable to generate positive cash flow as a result of our operations. We estimate that based on current plans and assumptions, that our available cash will not be sufficient to satisfy our cash requirements under our present operating expectations, without further financing, for up to 12 months. Other than working capital and funds received from operations and from the sales of our equity instruments, we presently have no other alternative source of working capital. We began to generate cash flows from operations and expect to generate funds for management and marketing services rendered in connection with the agreements we entered into with WAB, Monarch and Chemoil. We may not have sufficient working capital to fund the expansion of our operations and to provide working capital necessary for our ongoing operations and obligations and we will need to raise significant additional capital. We do not anticipate we will be profitable in the remainder of fiscal 2014. Therefore our future operations may be dependent on our ability to secure additional financing. Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. However, the trading price of our common stock and a downturn in the U.S. equity and debt markets could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect amounts owed to us, or experience unexpected cash requirements that would force us to seek alternative financing. Furthermore, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. The inability to obtain additional capital may restrict our ability to grow and may reduce our ability to continue to conduct business operations. If we are unable to obtain additional financing, we will be required to further curtail our marketing and development plans and possibly cease our operations.
 
Our liquidity may be negatively impacted by the significant costs associated with our public company reporting requirements, costs associated with newly applicable corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002 and other rules implemented by the Securities and Exchange Commission. We expect all of these applicable rules and regulations to significantly increase our legal and financial compliance costs and to make some activities more time consuming and costly.
 
Operating activities
 
For the nine months ended July 31, 2014, net cash flows used in operating activities amounted to $(53,283) as compared to net cash flows used in operating activities of $(32,791) for the nine months ended July 31, 2013. The increase in cash used during the nine months ended July 31, 2014 as compared to the nine months ended July 31, 2013 is again attributable to the Company becoming a fully operating company with the normal expenses associated with that and the fact that it is no longer considered a development stage company.
 
 
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Investing Activities
 
For the nine months ended July 31, 2014, net cash flows used in investing activities was $(3,794) related to the purchase of property and equipment.
 
Financing activities
 
For the nine months ended July 31, 2014 and 2013, net cash flows provided by financing activities was $66,390 and $30,100 respectively. During the nine months ended July 31, 2014, we received net proceeds from the sale of preferred stock in the amount of $51,244.
 
Contractual Obligations
 
We have certain fixed contractual obligations and commitments that include future estimated payments. Changes in our business needs, cancellation provisions, changing interest rates, and other factors may result in actual payments differing from the estimates. We cannot provide certainty regarding the timing and amounts of payments.
 
Off-Balance Sheet Arrangements
 
As of the date of this report, we did not have any off-balance sheet arrangements that have, or is reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
 
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
 
Not required for smaller reporting companies.
 
ITEM 4. Controls and Procedures
 
Disclosure Controls and Procedures
 
We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) that are designed to ensure that information required to be disclosed by us in reports that we file under the Exchange Act is recorded, processed, summarized and reported as specified in the SEC’s rules and forms and that such information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer (CEO), and our Chief Financial Officer (CFO), to allow timely decisions regarding required disclosure. Management, with the participation of our CEO and CFO, performed an evaluation of the effectiveness of our disclosure controls and procedures as of July 31, 2014.
 
Based on this evaluation we concluded that as of July 31, 2014 our disclosure controls and procedures were not effective such that the information relating to our company required to be disclosed in our SEC reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure as a result of material weaknesses in our internal control over financial reporting including deficiencies in properly documenting customer and supplier relationships and revenue recognition procedures.
 
Changes in Internal Control over Financial Reporting
 
There was no change in our internal control over financial reporting during our quarter ended July 31, 2014 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
 
 
ITEM I. Legal Proceedings
 
The Company knows of no legal proceedings to which it is a party or to which any of its property is the subject which are pending, threatened or contemplated or any unsatisfied judgments against the Company.
 
 
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ITEM 1A. Risk Factors.
 
Not required for smaller reporting companies.
 
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds.
 
In May 2014, we sold to two investors (the “Investors”), an aggregate of 1.5 investment units (each a “Unit” and collectively, the “Units”) at a price of $25,000 per unit (the “Unit Price”), for aggregate offering proceeds of $37,500 (the “Offering Proceeds”). Each Unit consisted of (i) 25,000 shares of Series B Preferred Stock of the Company, par value $0.001 per share, convertible into 50,000 shares (the “Conversion Shares”) of the Company’s common stock, and (ii) one (1) Warrant to purchase 25,000 share of the Company’s common stock at a purchase price of $1.00 per share. As a result in May 2014 we issued an aggregate of 37,500 shares of Series B Preferred Stock and 1.5 Warrants to purchase an aggregate of 37,500 shares of our common stock at $1.00 per share. The issuance was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(a)(2) of that act.
 
ITEM 3. Defaults In Senior Securities
 
No senior securities were issued or outstanding during the three months ended July 31, 2014 or 2013.
 
ITEM 4. Mine Safety Disclosure
 
Not applicable.
 
ITEM 5. Other Information
 
As reported in our 8-K filed on August 18, 2014 on August 15, 2014, we entered into a Letter of Intent (“LOI”) with Heliflight Peru SAC (“Heliflight Peru”) which provides the framework for the leasing of helicopters to Heliflight Peru. Both parties have 90 days to complete due diligence and to execute a final agreement and one hundred twenty (120) days to close the transaction. The LOI requires that once a final agreement is reached, Heliflight Peru will be required to lease helicopters with certain minimum hours. The amount of revenues that the Company will generate if a final agreement is reached is to be determined. There is of no assurance that a final agreement will be reached.
 
As reported in our 8-K filed on August 25, 2104, on August 19, 2014, we entered into a Letter of Intent with Heli Jet S.A.S. (“Heli Jet”) which provides the framework for us acquiring 49% of Heli Jet, which is located in Bogota, Colombia. Heli Jet is a general aviation company with two locations in Colombia that specializes in providing fixed wing aircraft leases primarily in the form of chartered jets for corporate executives. The amount of revenues which the Company will generate if a final agreement is reached is to be determined. There is no assurance that a final agreement will be reached.
 
As reported in our 8-K filed August 27, 2014, on August 26, 2014, Adam Wasserman tendered his written resignation as Chief Financial Officer and Director of the Company. In his letter of resignation, Mr. Wasserman stated his resignation was not the result of any disagreements with the Company on any matter relating to the Company’s operations, policies, including accounting or financial policies or practices. In the interim Jacob Gitman, the current President of the Company, was appointed as our Chief Financial Officer until a replacement can be retained.
 
As reported in our 8-K filed on September 3, 2014, in August 2014 we received $500,000 from an investor and entered into a convertible note in the amount of $500,000 which has a term of one year, bears interest at the rate of 6% per annum and is convertible into common stock at a price of $6.70 which was the price of our common stock on the date we closed the loan.
 
As reported in our 8-K filed on September 8, 2014 and amended on September 11, 2014, on September 4, 2014, Mallah, Furman & Company, Certified Public Accountants was engaged as our registered independent public accountant and Cutler & Co., LLC (“C&C”) was dismissed as our registered independent public accountant.
 
All the above referenced 8-K’s are incorporated herein by reference.
 
On September 17, 2014, Andrew Logullo gave written notice of his resignation as Vice President of the Company. Mr. Logullo did not state and reason for his resignation in the email he sent resgining as an officer of the Company.
 
 
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ITEM 6.
Exhibits
 
(a)   The exhibits required to be filed herewith by Item 601 of Regulation S-K, as described in the following index of exhibits, are incorporated herein by reference, as follows:
 
Exhibit No.
Description
   
31.1*
Rule 13a-14(a)/15d-14(a) certification of Chief Executive Officer
31.2*
Rule 13a-14(a)/15d-14(a) certificate of Principal Financial Officer
 32.1**
Section 1350 certification of Chief Executive Officer and Chief Financial Officer
101.INS†
XBRL Instance Document
101.SCH †
XBRL Taxonomy Schema
101.CAL †
XBRL Taxonomy Calculation Linkbase
101.DEF †
XBRL Taxonomy Definition Linkbase
101.LAB †
XBRL Taxonomy Label Linkbase
101.PRE †
XBRL Taxonomy Presentation Linkbase
 
* Filed herewith.
** In accordance with SEC Release 33-8238, Exhibit 32.1 and 32.2 are furnished and not filed.
† Furnished herewith. XBRL (eXtensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
 
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.
 
  BASTA HOLDINGS, CORP.
     
Date: September 22, 2014
By:
/s/ Jacob Gitman
   
Jacob Gitman, Chief Executive Officer
   
(Principal Executive Officer)
     
Date: September 22, 2014
By: 
/s/ Jacob Gitman
   
Jacob Gitman, Chief Financial Officer and Principal
Accounting Officer
 
 
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