Will Baltia Air Lines Inc (OTCMKTS:BLTA)’s Recovery Continue?
As its name suggests Baltia Air Lines Inc (OTCMKTS:BLTA)’s goal is to become America’s newest airline. Last October the company entered Phase III of its FAA Air Carrier Certification and initially they progressed through the process rather smoothly but then BLTA reached the mini evacuation test. After several unsuccessful attempts that company still hasn’t completed the test.
Unsurprisingly the stock of the company was hit rather hard by this and from a high of around $0.02 in January BLTA registered a new 52-week low of $0.0027 on July 8. If you take a look at the chart however you will see that since then the ticker has been making a rather encouraging upwards move registering just two red sessions out of the last twelve. After making a small jump of 4.5% yesterday the stock is currently sitting at $0.0068.
The reason for the reversal is once again connected to the mini evacuation test. According to some investors the next attempt will be held late in evening today and this could explain the renewed enthusiasm towards the stock.
Before you get too excited though let’s remind you of some of the rather serious facts about BLTA. Although if the company finally passes the test the stock could surge upwards the positive momentum could very well dissipate equally as fast thanks to BLTA‘s the atrocious financial state. The latest quarterly report contained some dismal figures:
• $118 thousand cash
• $131 thousand total current assets
• $2.9 million total current liabilities
• ZERO revenues
• $2.8 million net loss
At the same time the long-term shareholders of the company have been simply drowned in dilution. Last year BLTA issued 2.2 BILLION shares and as of December 31, 2014, they had approximately 5.5 BILLION outstanding shares. As of May 4,this year, however that number had nearly reached 6 BILLION outstanding shares. BLTA had to increase their authorized common shares to 6,986,000,000 shares but if the issuances continue at the same rate even that amount may not be enough.
At the moment BLTA’s market cap of $35.6 million seems completely disconnected from the underlying fundamentals of the company. Not to mention that if the company fails the mini evacuation test once more the stock could simply crumble. On the other hand even if BLTA are successful they will still remain surrounded by red flags that demand extensive due diligence before putting your hard-earned money on the line.
