<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB/A
General Form for Registration of Securities
of Small Business Issuers Under Section 12(b)
or 12(g) of the Securities Act of 1934
American Electric Automobile Company, Inc.
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(Name of Small Business Issuer in Its Charter)
Delaware 33-0727323
- ---------------------------- -----------------------------------
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
Incorporation or Organization)
4190 Bonita Rd., Suite 105, Bonita, CA 91902
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(Address of Principal Executive Offices) (ZIP Code)
(619) 479-2809
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(Issuer's Telephone Number, Including Area Code)
Securities to be registered under Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on which to be
so Registered
Each Class is to be registered
___________________________
____________________________
Securities to be Registered under Section 12(g) of the Act:
Common Stock
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PART 1
ITEM 1 DESCRIPTION OF BUSINESS
HISTORY
American Electric Automobile Company (the "Company") was chartered as a
Delaware corporation on May 9, 1996. On June 15, 1996 the Company acquired
all of the outstanding stock of California Electric Automobile Co., Inc.,
incorporated in California on November 14, 1995, ("CEAC") from the
shareholders of CEAC in an exchange for stock in the Company. The exchange
was on the basis of one share of CEAC for ten shares of the Company for a
total of 1,050,000 shares of the Company's common stock. Of the 1,050,000
shares, 900,000 were held in escrow pending the exercise of CEAC's option to
purchase the assets and business of San Diego Electric automobile Company.
On October 17, 1996 the Company exercised its option to purchase the assets
and business of San Diego Electric Automobile Company ("SDEAC"), a sole
proprietorship. The purchase price was for 900,000 shares of AEAC's common
stock. The Company is currently comprised of American Electric Automobile
Company and its subsidiary, CEAC.
BUSINESS
A. OPERATION
The Company operates business through its subsidiary, California Electric
Automobile company; through a joint venture with China Electric Auto, Ltd.;
and through a joint venture company known as American Electric Automobile
Company (ASIA), Inc. ("EVASIA") EVASIA is owned jointly by the Company (45%)
and China Electric Auto, Ltd.(55%)
B. MISSION
The mission of the Company is to create profit through the following business
activities:
1. Sale of automobiles that have been remanufactured from gasoline to electric
power.
2. License its electric conversion technology to domestic and global
manufacturers of automobiles in exchange for royalty income.
3. Seek joint venture arrangements with manufacturers of components for
electric automobiles to design, develop and distribute these components.
C. PRESENT BUSINESS ACTIVITIES
1. The Company continues to promote its conversion business.
2. The Company markets components to individuals who wish to convert their own
automobiles.
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3. The Company is active in China through EVASIA.
D. COMPETITION
Electric passenger cars have been the latest electric vehicles to emerge on
the market. Many automobile manufacturers have developed prototypes. These
manufacturers realize the need for electric vehicles in the future to reduce
air pollution and operating costs.
Late in 1996 the electric automobile industry saw at least three multi-
national automobile manufacturers introduce their first production model.
General Motors, Ford and Toyota now have new electric automobiles in showrooms
in California and other states. Nissan currently has an electric model
available in Japan.
All of the new vehicles are priced at proximately $34,000, but are normally
only available for lease. The company's remanufactured vehicles will sell at
much lower prices and are increasingly widely accepted. The emergence of the
Hybrid-Electric concept that includes an on-board gasoline powered
charger will dramatically improve the acceptance of electric passenger
vehicles. Honda and several other major manufactures have announced these
"parallel EVs". These are basicly gasoline powered automobiles with an
electric motor boost. Mileage estimates published are approximately 70 miles
per gallon.
Currently other converters of new and used automobiles include:
California Electric Cars of Seaside, CA
Electric Vehicles of America, Inc. of Maynard, MA
Electric Vehicles, Inc. of Mountain View, CA
Elfa Automotive Company of Jamestown, NY
Green Motorworks of North Hollywood, CA
Kaylor Energy Products of Boulder Creek, CA
Mike's Auto Care of San Mateo, CA
Specialty Vehicle Manufacturing Corp., Downey, CA
Solectria, Wilmington, MA
Sun Toys of Santa Cruz, CA
Suntera of Honokaa, Hawaii
TMD Worldwide Conversions of Troy, MI
E. MARKETING
Initial Marketing Goals:
1. Develop name recognition - maximize publicity with press releases, display
advertising to target markets, articles, interviews, demos, contests, auto
show booths, etc.
2. Build backlog of orders for Company's principal remanufactured models
3. Make available custom design and fabrication for the special engineered
electric automobile based on customer specifications.
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4. Develop a new 'glider' from one or more new auto manufacturers. The Company
plans to establish a dealership in an auto park such as the National City Mile
of Cars or the Chula Vista Main Street Auto Park or possibly in downtown
San Diego. Initially an arrangement with an existing automobile dealer will be
sought. Partnering sales efforts, floor space, etc. will reduce the need for
dedicated early investment in facilities.
F. CHINA JOINT VENTURE COMPANY
On February 20, 1997 the Company formed a California corporation called
American Electric Automobile Company (ASIA), Inc. This Company is a join
venture between China Electric Automobile, Ltd., a Hong Kong company,
(55% owner) and the Company (45% owners). The purpose of the joint venture is
to promote electric automobiles in Asia. The Chair of the Company, Edward F.
Myers, is the President of EVASIA.
On February 25, 1997 EVASIA signed a contract with Guangdong Vick Wei EV Co.,
Ltd. for the joint production of electric cars in Nanhai City, China. The
contract calls for the modification of present gasoline car production lines
to electric. The contract also calls for EVASIA to be a 30% joint venture
partner in these electric auto production lines. On June 5, 1998 the joint
venture completed its first prototype. This automobile has completed a years'
testing at the new China electric automobile test center in Santou, China.
The automobile, an SUV style, in July of 1999 successfully completed a years'
testing and has been licensed for use on the roads in China.
ITEM 2: MANAGEMENTS' DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
GENERAL
The Company's business continues to be the design and conversion of
automobiles from gasoline to electric power. The company completed two
conversions in 1999. The Company continues to work through EV ASIA with its
conversions in China. The Company's conversion of an SUV model in China has
successfully completed a year of tests in Shantow, China and is now licensed
for use on the roads in China.
RESULTS OF OPERATIONS
Fiscal 1998 versus Fiscal 1997
During 1998 the Company had revenues of $25,047 compared to $36,341 for 1997.
The reduced revenues may be due to a less aggressive marketing policy in
regard to participation in environmental shows.
During 1998 the Company incurred $45,701 in Operating Expenses compared to
$139,809 in 1997. The decrease was mainly due to the Company's effort to
reduce reliance on consulting and other G & A expenses. In 1998 the Company
wrote down the value of an investment in China Electric Automobile, Ltd.
by $18,750.
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The Company recorded a loss of $54,404 in 1998 or $0.0191 per common share
compared to a loss of $142,622 in 1997 or $0.06 per share, a decrease of $0.04
per share or 66%.
Fiscal 1999 versus Fiscal 1998
During 1999 the Company had revenues of $3,500 compared to
$25,047 for the same period of 1998. During 1999 the Company lost its
principle marketing personnel. The Company was also not able to attend as many
trade shows. As of early 2000 the Company is just starting to rebuild its
marketing ability.
During 1999 the Company had $79,037 in Operating Expenses
compared to $45,701 in the same period in 1998.
The Company recorded a loss for the 1999 fiscal year of $85,898
compared to $54,404 in 1998. The Company's loss per common share for the
Fiscal year in 1999 was $0.12 per share compared to $0.02 per share in
1998.
LIQUIDITY AND CAPITAL RESOURCES - THE COMPANY
The Company has continued to reduce its expenses and reduce its annual loss.
The Company now feels that it is in a position to strongly increase marketing
and the expansion of business and revenues. The Company continues to seek
additional financing through the offering and sale of the Company's
securities. The Company has not received any indication that it will be
successful in these efforts.
ITEM 3: NATURE AND EXTENT OF ISSUER'S FACILITIES
Between 1996 and 1998 the Company rented remanufacturing facilities in
Lakeside, CA from a previous officer and employee, Mr. Ron Larrea. Mr. Larrea
lost his lease on the property in the second quarter of 1999. The Company has
leased facilities at 1055 "G" street in San Diego, CA. for its business. The
Company has a six month lease with an option to renew on the same terms for
another six months. The property has 750 square feet of industrial space and
is leased from an unaffiliated party for $3,000/Mo. This space is sufficient
for the remanufacture of two automobiles at the same time. The property also
has a large fenced area sufficient for the parking and display of up to ten
automobiles. The Company deems this sufficient for its present level of
operation.
The Company maintains its executive and sales offices at 4190 Bonita Road,
Bonita, CA
Initially the marketing functions will be carried out by telephone. The
Company plans to lease display space in an auto park as soon as financially
feasible.
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ITEM 4: SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information concerning the common stock
ownership as of January 31, 2000, of each officer, director and others known
to the Company as management or to be the beneficial owner of more than five
percent of the Company's common stock.
<TABLE>
<CAPTION>
NAME AND ADDRESS SHARE PERCENTAGE
OF BENEFICIAL OWNERSHIP OWNERSHIP
OWNER
,S. <C> <C>
Edward F. Myers 2,351,000 52.3
Chairman/Director
4190 Bonita Rd.
Bonita, CA 91902
Gary G. DeGano* 218,000 4.8
President/CEO/
Director
4190 Bonita Rd.
Bonita CA 91902
Betty N. Myers 2,351,000 52.3
Security/Director
4190 Bonita Rd.
Bonita CA 91902
Gary L. Jackson 76,000 1.7
Vice President
4190 Bonita Rd.
Bonita CA 91902
</TABLE>
Percentages based on 4,471,600 shares outstanding on February 14, 2000.
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ITEM 5: DIRECTORS, EXECUTIVE OFFICER, PROMOTERS AND
CONTROL PERSONS:
The names, ages, and respective positions of the current directors and
executive officers of the Company are:
<TABLE>
<CAPTION>
Name Age Position
<S> <C> <C>
Edward F. Myers 67 Chairman/CFO
Gary G. DeGano 56 President & CEO
Director
Gary L. Jackson 52 Vice President-
Research
Dr. Edward F. Myers has been Chairman, and a Director of the Company since May
8, 1996 and President of California Electric Automobile Company, Inc. since
November 19, 1995. Between June 1970 to September 1991 he was president of
Exten Ventures, Inc., a public company. From March 1983 to December, 1995, he
was president of EFM Venture Group, Inc., a financial syndication firm. EFM
was active between 1983 and 1985 and purchased commercial real estate for
resale to partnerships which were subsequently syndicated through broker-
dealers or their general partners. Dr. Myers was a director of William Lyon
College, San Diego from 1981-1985 and Treasurer and Trustee of Beacon
College, Washington, D.C., between 1981-1983. From 1980 to 1983 he was
President of Exchange Accommodation Corporation, a company active in real
estate exchanges, and was also Chairman of the Board of Impact International,
Inc. Prior to 1980 Dr. Myers was Special Assistant to the Vice
President, Cubic Corporation; Director of Engineering, Swan Electronics, a
subsidiary of Cubic Corp; President of EFM Financial, Inc,; Director and
Chairman of the Executive Committee of Microdyne Corporation; Director of
European Operations of Informatics, Inc.; Division Manager, Computer
Applications Inc.; manager of Applications research, Stromberg-Carlson,
Division of General Dynamics Corporation.
Mr. Gary G. DeGano was elected President, CEO and a Director of the Company on
August 1, 1997. Since March of 1997 he has also been President of Incremental
Data, Inc. Between 1995 and 1996 he was in charge of investor relations for
Exten Industries, Inc. a public company. From 1986 until 1994 he was President
and CEO of Sun Harbor Financial Resources Inc.,( a publicly traded NNOTC)
Company, President and CEO of Sun Harbor Mortgage, Inc. a full service
mortgage banking firm in which he was one of the founders. Mr. DeGano has
also been President of the following corporations; American Mortgage Network,
Sea Coast, Inc., Pacific Sun Escrow Company and Sun Coast Mortgage Company.
Dr. GARY L. JACKSON has been Vice President of Research since December 6,
1999. Between December 5, 1996 and December 6, 1999 he was a Director of the
Company. He received his Phd from the University of Arizona in 1977 in
Electrical Engineering with a Physics minor and since that time has been
employed by General Atomics, San Diego, CA. He has made numerous contributions
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to the international fusion effort, particularly in the areas of plasma wall
interactions and tokamak operations, including the commissioning of a
stationary 250 ton flywheel to provide pulsed power (up to 260 MVA) for
plasma experiments. Dr. Jackson has traveled extensively both in the U.S. and
abroad including extended collaborations in England, Japan and Germany. He is
the author of 16 refereed papers, 32 conference presentations, and a
contributing author to more than 100 papers in the field of fusion plasmas. He
has also contributed several articles on electric vehicles to the Society of
Automotive Engineers (SAE), Electric Vehicle Associations of Southern
California (EVAOSC) and San Diego (EVAOSD), and has written a column, "Nuts
and Volts" for the associations' newsletters. Dr. Jackson has been active in
the field of electric vehicles for 27 years beginning with the construction of
his first electric vehicle in 1969. Since then he has operated an electric
vehicle on an almost continuous basis and has collected extensive test data on
the operation and efficiency of electric vehicles. He is active in promoting
EV's, research in the EV field, and proving EV's in a racing environment. He
was a founding member and former vice-president of the local electric vehicle
chapter (EVAOSD) and has been interviewed for numerous newspaper stories and
TV appearances. He is also owner of Little Guy Racing and Consulting. In order
to prove the efficacy and durability of electric vehicles, Dr. Jackson has
led a team to the Solar Electric 500 at the Phoenix International Raceway for
the last 6 seasons. In the 1991 inaugural event he won third place overall,
and was the first finisher using only conventional lead-acid batteries. In
1993 the team of Little Guy Racing (LGR) placed in two events: first place in
the Stock B (commercial lead acid battery) division and third in the open
completion. Beginning in 1994, a new car was added to the LGR fleet, a 1989
Geo Metro and a quick charge capability was added to the Rabbit. The Geo Metro
has consistently placed 2nd or 3rd in the APS Electric race since that time.
The Geo Metro was also entered in the Los Angles Clean Air Rally, placing
fourth in 1994 and third in 1995 competing against all types of clean air
ehicles including natural gas. Dr. Jackson is committed to electric vehicles
and their implementation in America's transportation infrastructure.
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ITEM 6: EXECUTIVE COMPENSATION
Summary Compensation Table
</TABLE>
<TABLE>
<CAPTION>
Name & Year Salary Bonus Other Restricted Options LTIP All other
Principle ($) ($) annual stock SARs Payouts compen-
Position compen- awards ($) sation ($)
sation($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
E Myers 1996 -0- -0- -0- -0- -0- -0- -0-
Chairman/ 1997 -0- -0- -0- -0- 8333 -0- -0-
Director 1998 -0- -0- -0- -0- 8333 -0- -0-
1999 -0- -0- -0- -0- 8333 -0- -0-
G DeGano 1996 -0- -0- -0- -0- -0- -0- -0-
President/ 1997 -0- -0- -0- -0- 8333 -0- -0-
CEO/Dir 1998 -0- -0- -0- -0- 8333 -0- -0-
1999 -0- -0- -0- 1200 8333 -0- -0-
B Myers 1996 -0- -0- -0- -0- -0- -0- -0-
Secretary/ 1997 -0- -0- -0- -0- -0- -0- -0-
Director 1998 -0- -0- -0- -0- -0- -0- -0-
1999 -0- -0- -0- 5000 -0- -0- -0-
G Jackson 1996 -0- -0- -0- -0- -0- -0- -0-
Vice Pres. 1997 -0- -0- -0- -0- 8333 -0- -0-
1998 -0- -0- -0- -0- 8333 -0- -0-
1999 -0- -0- -0- 720 8333 -0- -0-
</TABLE>
Option/SAR Grants in Last Fiscal Year
(Individual Grants)
<TABLE>
<CAPTION>
Name Number of % of Total Exercise Expiration
Securities Options/SAR of Base Date
Underlying Granted to Price
Options/SAR Employees in ($/Sh)
Granted Fiscal Year
<S> <C> <C> <C> <C>
E Myers 100,000 33.3% $0.25 5/2002
Chairman/
Director
G DeGano 100,000 33.3% $0.25 5/2002
President/
CEO/Dir
G Jackson 100,000 33.3% $0.25 5/2002
Vice Pres./
Director
</TABLE>
Aggregated Option/SAR Exercises in Last Fiscal Year
And FY-End Option/SAR Values
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<TABLE>
<CAPTION>
Name Shares Value Number of Value of
Acquired Realized Unexercised Unexercised
On Exercise Securities In-the-Money
Underlying Options/SAR At FY-End
Options/SAR
At Year End
<S> <C> <C> <C> <C>
E Myers 0 0 33,333 N/A (See Note)
Chairman/
Director
G DeGano 0 0 33,333 N/A
President/
CEO/Dir
G Jackson 0 0 33,333 N/A
Vice Pres./
Director
ITEM 7: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
</TABLE>
On March 29, 1998 the Company sold 60,000 shares of common stock at $0.25 per
share to Mari Carmen Cedillo de Norby the wife of Director, Scott Norby. On
May 12, 1998 the company sold 28,000 shares of its common stock at $0.25 per
share for cash and exchanged 32,000 shares for an automobile valued at $8000
to Mari Carmen Cedillo de Norby, wife of Director Scott Norby.
On December 13, 1999 the Company issued 550,000 shares of the Company's common
stock to EFM Venture Group, Inc. for consulting services to the Company
between January 1, 1998 and December 13, 1999. EFM Venture Group, Inc. is
controlled by the Company's Chairman, Edward F. Myers. The Company's board
valued these shares at $0.02 per share.
On December 13, 1999 the Company issued 250,000 shares of its common stock to
Betty N. Myers for services to the Company between its organization in 1996
and December 13, 1999. Betty N. Myers is the wife of the Company's chairman,
Edward F. Myers. The board valued these shares at $0.02 per share.
On December 13, 1999 the Company issued 36,000 shares of its common stock to
Gary Jackson for services to the Company. Mr. Jackson is a past Director of
the Company. The board valued these shares at $0.02 per share.
On December 13, 1999 the Company issued 60,000 shares of its common stock to
Gary G. DeGano, the Company's president, in exchange for options which Mr.
DeGano held on 250,000 shares of the Company's common stock at $0.25 per
share. The Company valued these shares at $0.02 per share.
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ITEM 8: DESCRIPTION OF SECURITIES
The Company is authorized to issue 50,000,000 shares of Common Stock, par
value of $.0001 per share. As of January 20, 2000, the Company had outstanding
4,471,600 shares of Common Stock. There are 20,000,000 shares of preferred,
none of which is issued.
Special meetings of the Shareholders may be called by the Officers, Directors,
or upon request of holders of at least 10 Percent of the outstanding voting
shares.
Holders of common Stock are entitled to one vote at any meeting of the
shareholders for each Common share they own as of the record date fixed by the
Board of Directors.
At any meeting of Shareholders, a majority of the outstanding Common Shares of
the company entitled to vote, represented in person or by proxy, constitutes a
quorum. A vote of the majority of the Common Shares represented at a meeting
will govern, even if this is substantially less than a majority of the Common
Shares outstanding.
Subject to the rights of the preferred shareholders described below, holders
of shares are entitled to receive such dividends as may be declared by the
Board of Directors out of funds legally available therefore, and upon
liquidation are entitled to participate pro rata in a distribution of assets
available for such a distribution to shareholders. There are no conversion,
preemptive or other subscription rights or privileges with respect to any
share. Reference is made to the Certificate of Incorporation and Bylaws of the
Company as well as to the applicable statutes of the State of Delaware for a
more complete description of the rights and liabilities of holders of shares.
It should be noted that the Bylaws may be amended by the Board of Directors
without notice to the Shareholders.
The shares of the Company do not have cumulative voting rights, which means
that the holders of more than fifty percent of the Common shares voting for
election of directors may elect all the directors if they choose to do so. In
such event, the holders of the remaining shares aggregating less than fifty
percent will not be able to elect directors.
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PART II
ITEM 1 MARKET
From October 1998 the Company's common stock was traded on the OTC Bulletin
Board under the symbol "AEAM" During 1998 and the first quarter of 1999 there
were no quotes.
Quarter High Bid Low Bid
2nd quarter 1999 $0.25 $0.25
3rd quarter 1999 0.3125 0.01
Starting August 1, 1999 the Company's common stock was traded under the symbol
"AEAM" by the National Quotation Bureau, LLC.
Quarter High Closing Bid Low Closing Bid
3rd quarter 1999 $0.125 $0.10
4th quarter 1999 0.10 0.10
1st quarter 2000 $1.05 $0.10
THE ABOVE QUOTATIONS REPRESENT PRICES BETWEEN DEALERS AND DO NOT INCLUDE
RETAIL MARKUP, MARKDOWN OR COMMISSION, AND MAY NOT REPRESENT ACTUAL
TRANSACTIONS
On March 20, 2000 the Company's shareholders voted to consolidate the common
shares on a one for three exchange.
The Company's "new" common stock was assigned a new CUSIP number and a new
trading symbol "AEAC". Trading of the "new" shares started on April 5, 2000.
The Company had approximately 62 shareholders of record as of
March 10, 2000.
"Penny Stock"
The Securities and Exchange commission has adopted rule 15g-9 which
established the definition of a "penny stock", for the purposes relevant to
the Company, as any equity security that has a market price of less than $5.00
per share or with an exercise price of less than $5.00 per share, subject to
certain exceptions. For any transaction involving a penny stock, unless
exempt, the rules require: (1) that a broker or dealer approve a person's
account for transactions in penny stocks: and (ii) the broker or dealer
receive from the investor a written agreement to the transaction, setting
forth the identity and quantity of the penny stock to be purchased. In order
to approve a person's account for transactions in penny stocks, the broker or
dealer must (i) obtain financial information and investment experience
objectives of the person; and (ii) make a reasonable determination that the
transactions in penny stocks are suitable for that person and the person has
sufficient knowledge and experience in financial matters to be capable of
evaluating the risks of transactions in penny stocks. The broker or dealer
must also deliver, prior to any transaction in a penny stock, a disclosure
schedule prepared by the Commission relating to the penny stock market,
which, in highlight form, (i) sets forth the basis on which the broker or
dealer made the suitability determination; and (ii) that the broker or dealer
received a signed, written agreement from the investor prior to the
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transaction. Disclosure also has to be made about the risks of investing in
penny stocks in both public offerings and in secondary trading and about the
commissions payable to both the broker-dealer and the registered
representative, current quotations for the securities and the rights and
remedies available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent disclosing recent
price information for the penny stock held in the account and information on
the limited market in penny stocks.
ITEM 2: LEGAL PROCEEDINGS
None
ITEM 3: Changes in and disagreements with accounts
The Company has hired the firm of Weinberg & Company P.A.
to be the Company's auditors after Harlen and Boettger, LLP no longer did
audits for public companies.
There has been no disagreement with the Company's accountants.
ITEM 4: RECENT SALES OF UNREGISTERED SECURITIES
Between October 21, 1996 and December 31, 1997 the Company sold 150,500 common
shares at $0.25 per share. The Company sold these shares under an exemption
from registration contained in Regulation D(504).
During 1997 the Company issued 100,000 common shares for radio time. These
shares were valued by the board of directors at $25,000. The Company also
issued 39,000 shares of common stock in exchange for outside consulting
services valued at $9,750 or $0.25 a share. The Company issued these shares
under an exemption from registration contained in Regulation D(504).
Between January 1, 1998 and December 31, 1998 the Company sold 8000 common
shares at $1.00 per share. The Company sold these shares under an exemption
from registration contained in Regulation D(504).
During 1998, the Company issued 32,000 restricted shares in exchange for a
1998 VW Beetle, which the Board of Directors valued at $8,000 based on the
transferer's historical cost basis. The company sold these shares under an
exemption from registration contained in Section 4(2) of the 1933 Securities
Act as amended (non- public offering).
Between April 22, 1999 and November 19, 1999 the Company sold 422,200 shares
of restricted common stock at $0.125 per share. The company sold these shares
under an exemption from registration contained in Section 4(2) of the 1933
Securities Act as amended (non- public offering).
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In July 1999 the Company issued 100,000 shares of its common stock to David
Schuil in return for preparing a business plan for the Company. The company
issued these shares under an exemption from registration contained in Section
4(2) of the 1933 Securities Act as amended (non- public offering).
During 1999 the Company issued 56,000 restricted common shares for services
valued by the board of directors at a total of $8,000. The Company issued
these shares under an exemption from registration contained in Section 4(2) of
the 1933 Securities Act as amended (non-public offering).
On December 13, 1999 the Company issued 550,000 shares of the Company's common
stock to EFM Venture Group, Inc. for consulting services to the Company
between January 1, 1998 and December 13, 1999. The Company issued these shares
under an exemption from registration contained in Section 4(2) of the 1933
Securities Act as amended (non-public offering).
On December 13, 1999 the Company issued 250,000 shares of its common stock to
Betty N. Myers for services to the Company between its organization in 1996
and December 13, 1999. The Company issued these shares under an exemption from
registration contained in Section 4(2) of the 1933 Securities Act as amended
(non-public offering).
On December 13, 1999 the Company issued 36,000 shares of its common stock to
Gary Jackson for services to the Company. The Company issued these shares
under an exemption from registration contained in Section 4(2) of the 1933
Securities Act as amended (non-public offering).
On December 13, 1999 the Company issued 60,000 shares of its common stock to
Gary G. DeGano, the Company's president, in exchange for options which Mr.
DeGano held on 250,000 shares of the Company's common stock at $0.25 per
share. The Company issued these shares under an exemption from registration
contained in Section 4(2) of the 1933 Securities Act as amended (non-public
offering).
On December 13, 1999 the Company's board of Directors approved an offering
of 3,000,000 common shares at a price of $0,125 per share. The Company filed
a Form D for a 504 offering on February 15, 2000. The sales were to be made
only to acredited investors residing in the states of, PA. MN and TX.
During February and March 2000, the Company issued 690,000 shares of its common
stock for cash at $0.125 per share.
All cash sales were made without underwriting discounts or commissions.
ITEM 5: INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Certificate of Incorporation of the Company provides for indemnification
of Directors and Officers of the Company as follows:
ARTICLE IX
"The personal liability of the directors of the corporation is hereby
eliminated to the fullest extent permitted by the provisions of paragraph (7)
of subsection (b) of * 102 of the General Corporation Law of the State of
Delaware, as the same may be amended and supplemented."
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ARTICLE X
"The corporation shall, to the fullest extent permitted by the provisions
of * 145 of the General Corporation Law of the State of Delaware, as the same
may be amended and supplemented indemnify any and all persons whom it shall
have power to indemnify under said section from and against any and all of the
expenses, liabilities, or other matters referred to in or covered by said
section, and the indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any Bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer employee, or agent and shall inure to the benefit of the heirs,
executors, and administrators of such a person."
PART F/S
A) Audited Financial Statements for the fiscal years ended 1997 and 1998
PART III
b) 2.1 Plan of Acquisition of California Electric Automobile
Company, Inc.*
3.1(i) Articles of Incorporation*
3.1(ii) By-Laws*
4.1 Instruments defining the rights of holders*
11.1 Computation of per share earnings 12/31/1998*
11.2 Computation of per share earnings 12/31/1999
21.1 Subsidiaries of the registrant*
* Filed by reference to a Form 10SB filed on February 23, 2000.
A) Audited Financial Statements for the fiscal years ended 1998 and 1999
INDEPENDENT AUDITOR'S REPORT
<PAGE>
AMERICAN ELECTRIC AUTOMOBILE COMPANY, INC.
AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1999
<PAGE>
AMERICAN ELECTRIC AUTOMOBILE COMPANY, INC.
AND SUBSIDIARY
CONTENTS
PAGE 1 INDEPENDENT AUDITORS' REPORT
PAGE 2 CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31,
1999
PAGE 3 CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE
YEARS ENDED DECEMBER 31, 1999 AND 1998
PAGE 4 CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS' EQUITY (DEFICIENCY) FOR THE YEARS
ENDED DECEMBER 31, 1999 AND 1998
PAGE 5 CONSOLIDATED STATEMENTS OF CASH FLOWS FOR
THE YEARS ENDED DECEMBER 31, 1999 AND 1998
PAGES 6 - 16 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of:
American Electric Automobile Company, Inc. and Subsidiary
We have audited the accompanying consolidated balance sheet of American
Electric Automobile Company, Inc. and subsidiary as of December 31, 1999 and
the related consolidated statements of operations, changes in stockholders'
deficiency and cash flows for the years ended December 31, 1999 and 1998.
These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly in all material respects, the financial position of American
Electric Automobile Company, Inc. and subsidiary as of December 31, 1999, and
the results of their operations and their cash flows for the years ended
December 31, 1999 and 1998, in conformity with generally accepted accounting
principles.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 13 to
the consolidated financial statements, the Company's continuing operating
losses and working capital deficiency of $58,055 raise substantial doubt about
its ability to continue as a going concern. Management's plans concerning his
matter are also described in Note 13. The accompanying consolidated financial
statements do not include any adjustments that might result from the outcome
of this uncertainty.
//WEINBERG & COMPANY, P.A.//
Boca Raton, Florida
March 28, 2000
1
<PA<PA - 142,622
2018 - 54,404
2019 - 85,898
NOTE 11 RELATED PARTIES
- -------- ---------------
In January 1997, the Company entered into a consulting agreement with a
corporation that is one-third owned by a director of the Company. The
agreement had a twelve-month term at a rate of $2,000 per month. As of
December 31, 1998, the Company owed the corporation $24,000 under this
agreement. During 1999 the Company paid $14,000 toward the amount
owed. The Company has accrued an additional $11,000 in consulting fees
payable to this corporation for services rendered in 1999. The Company
owes this corporation a total of $21,000 in consulting fees at December
31, 1999 (See Note 7).
See Notes 2, 5, 6, 7, 8, and 12 for additional related party
transactions.
NOTE 12 COMMITMENTS AND CONTINGENCIES
- -------- -----------------------------
(A) Employment Agreements
--- ---------------------
(i) The Company entered into an employment agreement with an officer
and director of the Company to provide services related to the
conversion of electric vehicles through November 1998. The
Company did not make
14
<PAGE>
payments on this agreement due to a lack of
adequate cash flow and there was a remaining balance owed to
the individual at December 31, 1998 of $7,585. During 1999, the
payable to this officer and director was settled pursuant to a
"Settlement and Mutual Release Agreement" (See Note 7).
(ii) The Company entered into an employment agreement with an
individual to become the Company's President as of August 1, 1997.
The agreement called for payments of $1,500 per month for part-
time services once the Company completed a private placement. In
addition, the agreement granted 100,000 options to purchase the
Company's common stock at $0.25 per share, and an additional
10,000 options at $0.25 per share for each month of employment.
Further, the agreement stated that within 60 days of raising
$250,000 through the sale of common stock, compensation would
increase to $5,000 per month as a full time officer and employee.
The agreement also contained bonus clauses granting additional
stock options if certain criteria were met. The Company made no
cash payments on the employment agreement due to inadequate cash
flow. The total accrued balance payable to the individual at
December 31, 1998 was $8,775 for services rendered through
May 1998.
On October 27, 1999, the Company entered into a "Settlement
Agreement" (the "Settlement") with the President of the Company to
settle and compromise disputed claims between the Company and the
individual. The Settlement stipulated that the Company issue
48,000 shares of its common stock valued for financial reporting
purposes at its fair market value based upon recent cash issuances
to fully pay all amounts owed to said individual at October 1,
The stock was issued in December 1999 and the liability of
$8,775 was settled at that time.
(B) Consulting Agreement
--- --------------------
In January 1999, the Company hired a consultant to prepare a
professional business plan in exchange for 100,000 shares of stock
valued for financial reporting purposes at $0.125 per share based upon
the price of a concurrent offering (see Note 12(D)). The Company
recorded a consulting expense of $12,500 pursuant to SFAS 123. The
business plan was completed in June 1999 and the shares were issued to
the individual in July 1999 for services rendered.
NOTE 13 GOING CONCERN
- ------- -------------
The Company's financial statements for the year ended December 31, 1999 have
been prepared on a going concern basis which contemplates the realization of
assets and the settlement of liabilities and commitments in the normal ourse
of business. The Company incurred a net loss of $85,898 for the year ended
December 31, 1999 and has accumulated losses since inception of $298,182.
In addition, the Company's working capital deficiency of $58,055 at December
31, 1999 may not enable it to meet such objectives as presently structured.
15
<PAGE>
The ability of the Company to continue as a going concern is dependent upon
the Company's ability to attain a satisfactory level of profitability and
obtain suitable, adequate financing. Management's plans include seeking an
equity investment as detailed in Note 12(D)(ii). The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
NOTE 14 SUBSEQUENT EVENTS
- ------- -----------------
(A) Stock Issuances
--- ---------------
(i) During January 2000, the Company issued 550,000 shares of its
common stock at $0.02 per share to a corporation in partial
payment of amounts owed to the corporation (See Notes 7 and 11).
(ii) During January 2000, the Company issued 250,000 shares of its
common stock at $0.02 per share to a related party as payment for
services rendered through December 31, 1999. The $5,000 of
consulting fees is included in accounts payable - related party
at December 31, 1999.
(iii) During January 2000, the Company issued 96,000 shares of its
common stock at $0.02 per share to individuals for services
rendered in 2000.
(iv) During February and March 2000, the Company issued 690,000 shares
of its common stock for cash at $0.125 per share pursuant to an
offering under Section 4(2) of the Securities Act of 1933, as
amended (See Note 12(D)(ii)).
(B) Operating Lease
--- ---------------
During February 2000, the Company entered into a lease agreement commencing
March 1, 2000 and terminating August 31, 2000 at $3,000 per month. The
lease contains an option to renew for a six-month period at the same monthly
rate.
16
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the Company has duly caused this disclosure statement to be signed on
its behalf by the undersigned, thereunto duly authorized.
AMERICAN ELECTRIC AUTOMOBILE COMPANY, INC.
Dated: 4/18/2000
\\GARY G. DeGANO\\
<PAGE> 1
b) 11.2 Computation of per share earnings
American Electric Automobile Company, Inc.
Weighted Average Shares Outstanding
December 31, 1999
Net Loss $ 85,898
Net Loss Per Share $ (85,898 / 718,812 = $ (0.1195)
