10-Q 1 g3537.txt QTRLY REPORT FOR THE QTR ENDED 7-31-09 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended July 31, 2009 [ ] Transition report under Section 13 or 15(d) of the Exchange Act For the transition period from __________ to __________ Commission File Number: 333-151350 AIR TRANSPORT GROUP HOLDINGS, INC. (Exact name of Registrant as specified in its charter) Nevada 98-0491567 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 7453 Woodruff Way Stone Mountain Ga 30087 Telephone: 404-671-9253 (Address of principal executive offices) (Registrant's telephone number, including area code) Former Name, Address and Fiscal Year, If Changed Since Last Report 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. Yes [ ] No [X] 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 (ss.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). Yes [ ] 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 the definition of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b of the Exchange Act. Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X] (Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X] APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [ ] No [ ] Indicate the number of shares outstanding of each of the issuer's class of common stock, as of the latest practicable date: As of October 12, 2009, the issuer had 56,620,000 shares of its common stock issued and outstanding. PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS. The interim financial statements included herein are unaudited but reflect, in management's opinion, all adjustments, consisting only of normal recurring adjustments, that are necessary for a fair presentation of our financial position and the results of our operations for the interim periods presented. Because of the nature of our business, the results of operations for the quarterly period ended July 31, 2009 are not necessarily indicative of the results that may be expected for the full fiscal year. 2 Air Transport Group Holdings, Inc. (fka Azure International, Inc.) (A Development Stage Company) Balance Sheets (Stated in US Dollars)

As of July 31, April 30, 2009 2009 --------- --------- (Unaudited) (Audited) Assets Current assets Cash $ -- $ -- --------- --------- Total current assets -- -- --------- --------- Total Assets $ -- $ -- ========= ========= Liabilities Current liabilities Accounts payable $ 10,200 $ 8,575 --------- --------- Total current liabilities 10,200 8,575 Long term liabilities Loan from Director 6,316 2,776 --------- --------- Total Liabilities $ 16,516 $ 11,351 --------- --------- Stockholders' Equity 75,000,000 Common Shares Authorized, 56,620,000 (April 30, 2009 - 53,600,000) at $0.001 Per Share Issued and Outstanding 56,620 53,600 Additional paid-in capital 28,630 6,400 Deficit accumulated during development stage (101,766) (71,351) --------- --------- Total stockholders equity (16,516) (11,351) --------- --------- Total liabilites and stockholders equity $ -- $ -- ========= =========

The accompanying notes are an integral part of these financial statements. 3 Air Transport Group Holdings, Inc. (fka Azure International, Inc.) (A Development Stage Company) Statements of Operations (Stated in US Dollars)

For the three For the three From Inception months ended months ended (November 26, 2007) to July 31, July 31, July 31, 2009 2008 2009 ------------ ------------ ------------ Revenue $ -- $ -- $ -- ------------ ------------ ------------ Expenses General and Adminstrative Expenses 30,415 11,124 101,766 ------------ ------------ ------------ Total Expenses 30,415 11,124 101,766 Provision for Income Tax -- -- -- ------------ ------------ ------------ Net Income (Loss) $ (30,415) $ (11,124) $ (101,766) ============ ============ ============ Basic & Diluted (Loss) per Common Share (0.001) (0.000) ------------ ------------ Weighted Average Number of Common Shares 56,160,435 52,500,000 ------------ ------------

The accompanying notes are an integral part of these financial statements. 4 Air Transport Group Holdings, Inc. (fka Azure International, Inc.) (A Development Stage Company) STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) From Inception (November 26, 2007) to July 31, 2009 (Stated in US Dollars)

Deficit Accumulated Additional During Common Stock Paid in Development Total Shares Amount Capital Stage Equity ------ ------ ------- ----- ------ Balance at Inception, November 26, 2007 0 $ -- $ -- $ -- $ -- Shares issued for cash - February 4, 2008 at $0.0001 per share 30,000,000 30,000 (27,000) -- 3,000 Shares issued for cash - February 12, 2008 at 0.01 per share 21,000,000 21,000 -- -- 21,000 Shares issued for cash - March 11, 2008 at 0.05 per share 1,500,000 1,500 6,000 -- 7,500 Net (Loss) for period from inception (November 26, 2007) to April 30, 2008 -- -- -- (1,669) (1,669) ----------- -------- -------- ---------- --------- Balance, April 30, 2008 52,500,000 52,500 (21,000) (1,669) 29,831 =========== ======== ======== ========== ========= Shares issued from Treasury, February 1, 2009 at $0.021 per share 1,000,000 1,000 20,000 -- 21,000 Shares issued from Treasury, March 15, 2009 at $0.075 per share 100,000 100 7,400 -- 7,500 Net (Loss) for period ended April 30, 2009 -- -- -- (69,682) (69,682) ----------- -------- -------- ---------- --------- Balance, April 30, 2009 53,600,000 53,600 6,400 (71,351) (11,351) =========== ======== ======== ========== ========= Shares issued for services, May 15, 2009 at $0.0075 per share 2,000,000 2,000 13,000 -- 15,000 Shares issued for services, May 15, 2009 at $0.01 per share 1,000,000 1,000 9,000 -- 10,000 Shares issued for services, May 15, 2009 at $0.0125 per share 20,000 20 230 -- 250 Net (Loss) for period ended July 31, 2009 -- -- -- (30,415) (30,415) ----------- -------- -------- ---------- --------- Balance, July 31, 2009 56,620,000 $ 56,620 $ 28,630 $ (101,766) $ (16,516) =========== ======== ======== ========== =========

The accompanying notes are an integral part of these financial statements. 5 Air Transport Group Holdings, Inc. (fka Azure International, Inc.) (A Development Stage Company) Statements of Cash Flows (Stated in US Dollars)

For the three For the three From Inception months ended months ended (November 26, 2007) to July 31, July 31, July 31, 2009 2008 2009 ---------- ---------- ---------- OPERATING ACTIVITIES Net income (loss) $ (30,415) $ (11,124) $ (101,766) Non-cash adjustments Shares issued for services 25,250 -- 25,250 Accounts Payable 1,625 -- 10,200 ---------- ---------- ---------- Net cash used in operating activities (3,540) (11,124) (66,316) ---------- ---------- ---------- INVESTING ACTIVITIES -- -- -- ---------- ---------- ---------- Net cash used in investing activities -- -- -- ---------- ---------- ---------- FINANCING ACTIVITIES Common shares issued @ $0.001 per share -- -- 53,600 Additional paid-in capital -- -- 6,400 Loans From Director 3,540 -- 6,316 ---------- ---------- ---------- Net cash provided by financing activities 3,540 -- 66,316 ---------- ---------- ---------- Incease (decrese) in cash during the period -- (11,124) -- Cash at beginning of period -- 30,619 -- ---------- ---------- ---------- CASH AT END OF PERIOD $ -- $ 19,495 $ -- ========== ========== ========== Cash Paid For: Interest $ -- $ -- $ -- ========== ========== ========== Income Tax $ -- $ -- $ -- ========== ========== ========== Non-Cash Activities Shares issued in Lieu of Payment for Service $ -- $ -- $ -- ========== ========== ========== Stock issued for accounts payable $ -- $ -- $ -- ========== ========== ========== Stock issued for notes payable and interest $ -- $ -- $ -- ========== ========== ========== Stock issued for convertible debentures and interest $ -- $ -- $ -- ========== ========== ========== Convertible debentures issued for services $ -- $ -- $ -- ========== ========== ========== Warrants issued $ -- $ -- $ -- ========== ========== ========== Stock issued for penalty on default of convertible debentures $ -- $ -- $ -- ========== ========== ========== Note payable issued for finance charges $ -- $ -- $ -- ========== ========== ========== Forgiveness of note payable and accrued interest $ -- $ -- $ -- ========== ========== ==========

The accompanying notes are an integral part of these financial statements. 6 AIR TRANSPORT GROUP HOLDINGS INC. (fka Azure International, Inc.) (A Development Stage Company) Footnotes to the Financial Statements From Inception to July 31, 2009 (Stated in US Dollars) NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS Air Transport Group Holdings, Inc (the "Company") was incorporated under the laws of the State of Nevada, U.S. on November 26, 2007 under the name Azure International, Inc. On October 30, 2008, and effective as of the same date, the Company filed Articles of Merger ("Articles") with the Secretary of State of the State of Nevada, to effect a merger by and between Air Transport Group Holdings, Inc., a Nevada corporation and Azure International, Inc. As a result of the merger, the Company changed its name to Air Transport Group Holdings, Inc. On March 10, 2009, the Company completed a forward stock split of its common stock on a ratio of ten shares for every one share of the Company. The record date of the forward stock split was February 27, 2009, the payment date of the forward split was March 9, 2009, and the ex-dividend date of the forward split was March 10, 2009. The forward split was payable as a dividend, thereby requiring no action by shareholders, nor any amendment to the articles of incorporation of the Company. The Company is in the development stage as defined under Statement on Financial Accounting Standards No. 7, Development Stage Enterprises ("SFAS No.7"). The Company has not generated any revenue to date and consequently its operations are subject to all risks inherent in the establishment of a new business enterprise. For the period from inception, November 26, 2007 through July 31, 2009 the Company has accumulated losses of $101,766. The company is in the airline business as an independent consultant and contractor. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. Accounting Method The Company's financial statements are prepared using the accrual method of accounting. The Company has elected an April 30 year-end. b. Revenue Recognition The Company recognizes revenue when persuasive evidence of an arrangement exists, goods delivered, the contract price is fixed or determinable, and collectability is reasonably assured. c. Income Taxes The Company prepares its tax returns on the accrual basis. The Company accounts for income taxes under the Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("Statement 109"). Under Statement 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial 7 statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under Statement 109, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. d. Use of Estimates The preparation of the financial statements in conformity with generally accepted accounting principles 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 period. Actual results could differ from those estimates. e. Assets The company has no cash as of July 31, 2009. f. Income Income represents all of the Company's revenue less all its expenses in the period incurred. The Company has no revenues as of July 31, 2009 and has paid expenses of $101,766 since inception. For the period ended July 31, 2009 it has incurred expenses of $30,415. g. Recent Account Pronouncements June 2009, the FASB issued SFAS No. 166, "Accounting for Transfers of Financial Assets--an amendment of FASB Statement No. 140" ("SFAS 166"). The provisions of SFAS 166, in part, amend the derecognition guidance in FASB Statement No. 140, eliminate the exemption from consolidation for qualifying special-purpose entities and require additional disclosures. SFAS 166 is effective for financial asset transfers occurring after the beginning of an entity's first fiscal year that begins after November 15, 2009. The Company does not expect the provisions of SFAS 166 to have a material effect on the financial position, results of operations or cash flows of the Company. In June 2009, the FASB issued SFAS No. 167, "Amendments to FASB Interpretation No. 46(R) ("SFAS 167"). SFAS 167 amends the consolidation guidance applicable to variable interest entities. The provisions of SFAS 167 significantly affect the overall consolidation analysis under FASB Interpretation No. 46(R). SFAS 167 is effective as of the beginning of the first fiscal year that begins after November 15, 2009. SFAS 167 will be effective for the Company beginning in 2010. The Company does not expect the provisions of SFAS 167 to have a material effect on the financial position, results of operations or cash flows of the Company. In June 2009, the FASB issued SFAS No. 168, "The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles - a replacement of FASB Statement No. 162" ("SFAS No. 168"). Under SFAS No. 168 the "FASB Accounting Standards Codification" ("Codification") will become the source of authoritative U. S. GAAP to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission ("SEC") under authority of federal securities laws 8 are also sources of authoritative GAAP for SEC registrants. SFAS No. 168 is effective for financial statements issued for interim and annual periods ending after September 15, 2009. On the effective date, the Codification will supersede all then-existing non-SEC accounting and reporting standards. All other non-grandfathered non-SEC accounting literature not included in the Codification will become non-authoritative. SFAS No. 168 is effective for the Company's interim quarterly period beginning July 1, 2009. The Company does not expect the adoption of SFAS No. 168 to have an impact on the financial statements. In June 2009, the Securities and Exchange Commission's Office of the Chief Accountant and Division of Corporation Finance announced the release of Staff Accounting Bulletin (SAB) No. 112. This staff accounting bulletin amends or rescinds portions of the interpretive guidance included in the Staff Accounting Bulletin Series in order to make the relevant interpretive guidance consistent with current authoritative accounting and auditing guidance and Securities and Exchange Commission rules and regulations. Specifically, the staff is updating the Series in order to bring existing guidance into conformity with recent pronouncements by the Financial Accounting Standards Board, namely, Statement of Financial Accounting Standards No. 141 (revised 2007), Business Combinations, and Statement of Financial Accounting Standards No. 160, Non-controlling Interests in Consolidated Financial Statements. The statements in staff accounting bulletins are not rules or interpretations of the Commission, nor are they published as bearing the Commission's official approval. They represent interpretations and practices followed by the Division of Corporation Finance and the Office of the Chief Accountant in administering the disclosure requirements of the Federal securities laws. In April 2009, the FASB issued FSP No. FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments. This FSP amends FASB Statement No. 107, Disclosures about Fair Value of Financial Instruments, to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This FSP also amends APB Opinion No. 28, Interim Financial Reporting, to require those disclosures in summarized financial information at interim reporting periods. This FSP shall be effective for interim reporting periods ending after June 15, 2009. The Company does not have any fair value of financial instruments to disclose. In April 2009, the FASB issued FSP No. FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments. This FSP amends the other-than-temporary impairment guidance in U.S. GAAP for debt securities to make the guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. The FSP does not amend existing recognition and measurement guidance related to other-than-temporary impairments of equity securities. The FSP shall be effective for interim and annual reporting periods ending after June 15, 2009. The Company currently does not have any financial assets that are other-than-temporarily impaired. In April 2009, the FASB issued FSP No. FAS 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies, to address some of the application issues under SFAS 141(R). The FSP deals with the initial recognition and measurement of an asset acquired or a liability assumed in a business combination that arises from a contingency provided the asset or liability's fair value on the date of 9 acquisition can be determined. When the fair value can-not be determined, the FSP requires using the guidance under SFAS No. 5, Accounting for Contingencies, and FASB Interpretation (FIN) No. 14, Reasonable Estimation of the Amount of a Loss. This FSP was effective for assets or liabilities arising from contingencies in business combinations for which the acquisition date is on or after January 1, 2009. The adoption of this FSP has not had a material impact on our financial position, results of operations, or cash flows during the six months ended June 30, 2009. In April 2009, the FASB issued FSP No. FAS 157-4, "Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly" ("FSP FAS 157-4"). FSP FAS 157-4 provides guidance on estimating fair value when market activity has decreased and on identifying transactions that are not orderly. Additionally, entities are required to disclose in interim and annual periods the inputs and valuation techniques used to measure fair value. This FSP is effective for interim and annual periods ending after June 15, 2009. The Company does not expect the adoption of FSP FAS 157-4 will have a material impact on its financial condition or results of operation. In October 2008, the FASB issued FSP No. FAS 157-3, "Determining the Fair Value of a Financial Asset When the Market for That Asset is Not Active," ("FSP FAS 157-3"), which clarifies application of SFAS 157 in a market that is not active. FSP FAS 157-3 was effective upon issuance, including prior periods for which financial statements have not been issued. The adoption of FSP FAS 157-3 had no impact on the Company's results of operations, financial condition or cash flows. In December 2008, the FASB issued FSP No. FAS 140-4 and FIN 46(R)-8, "Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities." This disclosure-only FSP improves the transparency of transfers of financial assets and an enterprise's involvement with variable interest entities, including qualifying special-purpose entities. This FSP is effective for the first reporting period (interim or annual) ending after December 15, 2008, with earlier application encouraged. The Company adopted this FSP effective January 1, 2009. The adoption of the FSP had no impact on the Company's results of operations, financial condition or cash flows. In December 2008, the FASB issued FSP No. FAS 132(R)-1, "Employers' Disclosures about Postretirement Benefit Plan Assets" ("FSP FAS 132(R)-1"). FSP FAS 132(R)-1 requires additional fair value disclosures about employers' pension and postretirement benefit plan assets consistent with guidance contained in SFAS 157. Specifically, employers will be required to disclose information about how investment allocation decisions are made, the fair value of each major category of plan assets and information about the inputs and valuation techniques used to develop the fair value measurements of plan assets. This FSP is effective for fiscal years ending after December 15, 2009. The Company does not expect the adoption of FSP FAS 132(R)-1 will have a material impact on its financial condition or results of operation. In September 2008, the FASB issued exposure drafts that eliminate qualifying special purpose entities from the guidance of SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities," and FASB Interpretation 46 (revised December 2003), "Consolidation of Variable Interest Entities - an interpretation of ARB No. 51," as well as other modifications. While the 10 proposed revised pronouncements have not been finalized and the proposals are subject to further public comment, the Company anticipates the changes will not have a significant impact on the Company's financial statements. The changes would be effective March 1, 2010, on a prospective basis. In June 2008, the FASB issued FASB Staff Position EITF 03-6-1, determining whether instruments granted in share-based payment transactions are participating securities, ("FSP EITF 03-6-1"). FSP EITF 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting, and therefore need to be included in the computation of earnings per share under the two-class method as described in FASB Statement of Financial Accounting Standards No. 128, "Earnings per Share." FSP EITF 03-6-1 is effective for financial statements issued for fiscal years beginning on or after December 15, 2008 and earlier adoption is prohibited. We are not required to adopt FSP EITF 03-6-1; neither do we believe that FSP EITF 03-6-1 would have material effect on our consolidated financial position and results of operations if adopted. In May 2008, the Financial Accounting Standards Board ("FASB") issued SFAS No. 163, "Accounting for Financial Guarantee Insurance Contracts-and interpretation of FASB Statement No. 60". SFAS No. 163 clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement of premium revenue and claims liabilities. This statement also requires expanded disclosures about financial guarantee insurance contracts. SFAS No. 163 is effective for fiscal years beginning on or after December 15, 2008, and interim periods within those years. SFAS No. 163 has no effect on the Company's financial position, statements of operations, or cash flows at this time. In May 2008, the Financial Accounting Standards Board ("FASB") issued SFAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles". SFAS No. 162 sets forth the level of authority to a given accounting pronouncement or document by category. Where there might be conflicting guidance between two categories, the more authoritative category will prevail. SFAS No. 162 will become effective 60 days after the SEC approves the PCAOB's amendments to AU Section 411 of the AICPA Professional Standards. SFAS No. 162 has no effect on the Company's financial position, statements of operations, or cash flows at this time. In March 2008, the Financial Accounting Standards Board, or FASB, issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities--an amendment of FASB Statement No. 133. This standard requires companies to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. This Statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company has not yet adopted the provisions of SFAS No. 161, but does not expect it to have a material impact on its consolidated financial position, results of operations or cash flows. 11 h. Basic Income (Loss) Per Share In accordance with SFAS No. 128-"Earnings Per Share", the basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. At July 31, 2009, the Company has no stock equivalents that were anti-dilutive and excluded in the earnings per share computation. i. Cash and Cash Equivalents For purposes of the statement of cash flows, the company considers all highly liquid investments purchased with maturity of three months or less to be cash equivalents. As of July 31, 2009 the company had no cash. j. Liabilities Liabilities are made up of current liabilities and long-term liabilities. Current liabilities include accounts payable of $10,200. There is a long term liability of $6,316 outstanding for the company. The loan of $6,316 is a related part loan as it is lent from a director. The loan is non-interest bearing loan with no fixed due date. Share Capital a) Authorized: 75,000,000 common shares with a par value of $0.001 b) Issued: The authorized capital of the Company is 75,000,000 common shares with a par value of $0.001 per share. In February 2008, the Company issued 30,000,000 shares of common stock at a price of $0.0001 per share for total cash proceeds of $3,000. In February 2008, the Company issued 21,000,000 shares of common stock at a price of $0.001 per share for total cash proceeds of $21,000. In March 2008, the Company also issued 1,500,000 shares of common stock at a price of $0.005 per share for total cash proceeds of $7,500. On February 1, 2009, the Company issued 1,000,000 shares of common stock at a price of $0.021 per share for total cash proceeds of $21,000. On March 15, 2009, the Company also issued 100,000 shares of common stock at a price of $0.075 per share for total cash proceeds of $7,500. On March 10, 2009, the Company completed a forward stock split of its common stock on a ratio of ten shares for every one share of the Company. The record date of the forward stock split was February 27, 2009, the payment date of the forward split was March 9, 2009, and the ex-dividend 12 date of the forward split was March 10, 2009. The forward split was payable as a dividend, thereby requiring no action by shareholders, nor any amendment to the articles of incorporation of the Company. On May 15, 2009, the Company issued a total of 3,020,000 shares of common stock at an average price of $0.01 per share for the services provided to the Company during the three months ended July 31, 2009. There are no preferred shares authorized. The Company has issued no preferred shares. The Company has no stock option plan, warrants or other dilutive securities. k. Advertising The Company expenses advertising as incurred. To this date, the Company has incurred no advertising expenses. l. Property Note The Company does not own or rent any property. The office space is contributed by a director at no charge. NOTE 3 - REALATED PARTY As of July 31, 2009 the Company owes a director $6,316 for expenses paid on behalf of the Company. The amount is non interest bearing and due upon demand. Imputed interest is not considered to material. NOTE 4 - GOING CONCERN The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. However, the Company has accumulated a loss and is new. 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 this uncertainty. As shown in the accompanying financial statements, the Company has incurred a net loss of $101,766 for the period from inception to July 31, 2009 and has not generated any revenues. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of acquisitions. Management has plans to seek additional capital through a private placement and public offering of its common stock. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence. 13 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION. FORWARD LOOKING STATEMENTS The information in this discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements involve risks and uncertainties, including statements regarding Air Transport Group Holdings, Inc (the "Company") capital needs, business strategy and expectations. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential" or "continue", the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks outlined below, and, from time to time, in other reports the Company files with the SEC. These factors may cause the Company's actual results to differ materially from any forward-looking statement. The Company disclaims any obligation to publicly update these statements, or disclose any difference between its actual results and those reflected in these statements. The information constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. As used in this quarterly report, the terms "we," "us," "our," and "our company" mean Air Transport Group Holdings, Inc. unless otherwise indicated. All dollar amounts in this quarterly report are in U.S. dollars unless otherwise stated. OVERVIEW Air Transport Group Holdings, Inc ("the Company") was incorporated under the laws of the State of Nevada, U.S. on November 26, 2007 under the name Azure International, Inc. On October 30, 2008, and effective as of the same date, the Company filed Articles of Merger ("Articles") with the Secretary of State of the State of Nevada, to effect a merger by and between Air Transport Group Holdings, Inc., a Nevada corporation and Azure International, Inc. As a result of the merger, the Company changed its name to Air Transport Group Holdings, Inc. STRATEGY Air Transport Group Holdings is in the business of acquiring aviation, travel, and leisure companies. By acquiring multiple small to mid size companies AITG plans to increase its efficiencies by consolidate management expenses, negotiate preferred rates with vendors, and increasing its asset base. RESULTS OF OPERATIONS FOR THE PERIOD ENDED JULY 31, 2009 The accompanying financial statements show that the Company has incurred a net loss of $30,415 for the three month period ended July 31, 2009 and has not yet generated any revenues that can offset operating expenses. We anticipate that we will not earn revenues until such time as we have further advanced the development of our company. We are presently in the development stage of our business and we can provide no assurance of our ability to obtain future profitable operation of our cooperation. 14 LIQUIDITY AND FINANCIAL CONDITION Based on our current operating plan, we do not expect to generate revenue that is sufficient to cover our expenses for at least the next year. In addition, we do not have sufficient cash and cash equivalents to execute our operations for the next year. We will need to obtain additional financing to operate our business for the next twelve months. We will raise the capital necessary to fund our business through a private placement and public offering of our common stock. Additional financing, whether through public or private equity or debt financing, arrangements with shareholders or other sources to fund operations, may not be available, or if available, may be on terms unacceptable to us. Our ability to maintain sufficient liquidity is dependent on our ability to raise additional capital. If we issue additional equity securities to raise funds, the ownership percentage of our existing shareholders would be reduced. New investors may demand rights, preferences or privileges senior to those of existing holders of our common stock. Debt incurred by us would be senior to equity in the ability of debt holders to make claims on our assets. The terms of any debt issued could impose restrictions on our operations. If adequate funds are not available to satisfy either short or long-term capital requirements, our operations and liquidity could be materially adversely affected and we could be forced to cease operations. OFF-BALANCE SHEET ARRANGEMENTS We have no significant off-balance sheet arrangements that have or are 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 is material to stockholders. INFLATION In the opinion of management, inflation has not had a material effect on our operations. RESEARCH AND DEVELOPMENT EXPENDITURES We have not incurred any research or development expenditures since our incorporation. PATENTS AND TRADEMARKS We do not own, either legally or beneficially, any patent or trademark. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Not applicable. ITEM 4. CONTROLS AND PROCEDURES. EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES We evaluated the effectiveness of our disclosure controls and procedures as of the date of this report. This evaluation was conducted by our President and Chief Executive Officer, Arnold Leonora. Disclosure controls are controls and other procedures that are designed to ensure that information that we are required to disclose in the reports we file pursuant to the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported. 15 Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934, as amended, as a process designed by, or under the supervision of, the company's principal executive and principal financial officers and effected by the company's board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that: - Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company; - Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and - Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk. As of July 31, 2009 management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") and SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses. The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; and (3) ineffective controls over period end financial disclosure 16 and reporting processes. The aforementioned material weaknesses were identified by our Chief Executive Officer in connection with the review of our financial statements as of July 31, 2009. Management believes that the material weaknesses set forth in items (2) and (3) above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods. MANAGEMENT'S REMEDIATION INITIATIVES In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated, or plan to initiate, the following series of measures: We will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. And, we plan to appoint one or more outside directors to our board of directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us. Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on our Board. We anticipate that these initiatives will be at least partially, if not fully, implemented by December 31, 2009. Additionally, we plan to test our updated controls and remediate our deficiencies by December 31, 2009. CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING There was no change in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. We are not a party to any material legal proceedings and to our knowledge, no such proceedings are threatened or contemplated. ITEM 1A. RISK FACTORS. Not applicable. 17 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. Not applicable. ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. No matters were submitted to our security holders for a vote during the period ending January 31, 2009. ITEM 5. OTHER INFORMATION. None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. Exhibit Number Description of Exhibit -------------- ---------------------- 31.1 Certification by Chief Executive Officer and Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act, promulgated pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith 32.1 Certification by Chief Executive Officer and Chief Financial Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code, promulgated pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 filed herewith 18 SIGNATURES In accordance with the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: October 15, 2009 SIGNATURE TITLE DATE --------- ----- ---- By: /s/ Arnold Leonora President and Director October 15, 2009 ----------------------------- Arnold Leonora 19