SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended September 30, 2000.
Commission file number 0-29657
American Electric Automobile Company, Inc.
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(Name of Small Business Issuer in its Charter)
Delaware 33-0727323
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
7270 Woodbine Avenue, Suite 200, Markham, Ontario L3R 4B9
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(Address of Principal Executive Offices) (ZIP Code)
(905) 947-9925
------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
Not applicable
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(Former Name, Former Address and Former 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 [X] No [ ]
There were 6,131,584 shares of Common stock issued and outstanding as of
September 30, 2000.
1
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
2
<PAGE>
AMERICAN ELECTRIC AUTOMOBILE
COMPANY, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2000
<PAGE>
AMERICAN ELECTRIC AUTOMOBILE COMPANY, INC.
AND SUBSIDIARY
CONTENTS
--------
PAGE 1 INDEPENDENT ACCOUNTANTS' REPORT
PAGE 2 CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30,
2000 (UNAUDITED)AND DECEMBER 31, 1999
PAGE 3 CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE
THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30,
2000 AND 1999 AND FROM JUNE 15, 1996 (INCEPTION)
TO SEPTEMBER 30, 2000 (UNAUDITED)
PAGE 4 CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
AND FROM JUNE 15, 1996 (INCEPTION) TO SEPTEMBER
30, 2000 (UNAUDITED)
PAGES 5 - 6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
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INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors of:
American Electric Automobile Company, Inc.
and Subsidiary
We have reviewed the accompanying consolidated balance sheet of American
Electric Automobile Company, Inc. and Subsidiary as a development stage
company of September 30, 2000 and the related consolidated statements of
operations and cash flows for the three and nine months then ended. These
financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying consolidated financial statements in order
for them to be 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 4 to
the consolidated financial statements, the Company's level of continuing
losses and the significant cash requirements for operating activities raise
substantial doubt about its ability to continue as a going concern.
Management's plans concerning this matter are also described in Note 4. The
accompanying consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
WEINBERG & COMPANY, P.A.
------------------------
WEINBERG & COMPANY, P.A.
Boca Raton, Florida
November 17, 2000
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<TABLE>
<CAPTION>
AMERICAN ELECTRIC AUTOMOBILE COMPANY, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
June 30, 2000 December 31,
(Unaudited) 1999
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 12,967 $ 1,941
Due from related party 4,267 7,212
Inventories 68,953 15,995
Prepaid rent and legal fees 3,040 -
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TOTAL CURRENT ASSETS 89,227 25,148
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PROPERTY & EQUIPMENT - NET 59,417 35,593
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OTHER ASSETS
Investments 34,750 18,750
Security deposit 3,000 -
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TOTAL OTHER ASSETS 37,750 18,750
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TOTAL ASSETS $ 186,394 $ 79,491
------------ ============= ==============
LIABILITIES
CURRENT LIABILITIES
Accounts payable $ 5,596 $ 9,910
Accounts payable - related parties 23,326 23,006
Accrued expenses - 2,138
Income tax payable - 4,340
Notes payable - related party 17,809 27,809
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TOTAL CURRENT LIABILITIES 46,731 67,203
STOCKHOLDERS' EQUITY
Preferred stock, $.0001 par value,
20,000,000 shares authorized,
none issued and outstanding - -
Common stock, $.0001 par value, 50,000,000
shares authorized, 6,131,564 and 1,191,867
shares issued and outstanding at
September 30, 2000 and
December 31, 1999, respectively 613 119
Common stock to be issued, 298,667
shares at December 31, 1999 - 30
Additional paid-in capital 1,101,758 410,321
Accumulated deficit (608,917) (394,182)
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493,454 16,288
Less subscription receivable (353,791) (4,000)
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TOTAL STOCKHOLDERS' EQUITY 139,663 12,288
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 186,394 $ 79,491
------------ ============= ==============
</TABLE>
See accompanying notes to consolidated financial statements
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AMERICAN ELECTRIC AUTOMOBILE COMPANY, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Period From
For the Three For the Three For the Nine For the Nine June 15, 1996
Months Ended Months Ended Months Ended Months Ended (Inception) to
September 30 September 30, September 30 September 30, September 30,
2000 1999, 2000 1999 2000
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
NET REVENUES $ 4,631 $ - $ 4,732 $ 3,500 $ 69,620
------------- ------------- ------------- ------------- -------------
COST OF REVENUES - 50 - 1,846 55,313
------------- ------------- ------------- ------------- -------------
GROSS MARGINS 4,631 (50) 4,732 1,654 14,307
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OPERATING EXPENSES
Compensation 24,779 - 71,871 - 276,659
Legal and professional fees 45,672 18,473 77,290 18,209 130,838
General and administrative 32,921 7,828 70,175 14,183 191,233
------------- ------------- ------------- ------------- -------------
TOTAL OPERATING EXPENSES 103,372 26,301 219,336 32,392 598,730
------------- ------------- ------------- ------------- -------------
INCOME (LOSS) FROM OPERATIONS (98,741) (26,351) (214,604) (30,738) (584,423)
------------- ------------- ------------- ------------- -------------
OTHER EXPENSES
Interest expense - - 132 - 2,269
Loss on investment - - - - 22,224
------------- ------------- ------------- ------------- -------------
TOTAL OTHER EXPENSES - - 132 - 24,493
------------- ------------- ------------- ------------- -------------
INCOME (LOSS) BEFORE
INCOME TAXES (98,741) (26,351) (214,736) (30,738) (608,916)
FEDERAL AND STATE
INCOME TAXES - - - - 5,450
============= ============= ============= ============= =============
NET INCOME (LOSS) $ (98,741) $ (26,351) $ (214,736) $ (30,738) $ (614,366)
============= ============= ============= ============= =============
Net loss per common share
- basic and diluted $ (.03) $ (.02 $ (.08) $ (.03) $ (.50)
============= ============= ============= ============= =============
Weighted average number of
common shares outstanding
- basic and diluted 3,097,718 1,080,821 2,547,167 1,021,387 1,214,700
============= ============= ============= ============= =============
</TABLE>
See accompanying notes to consolidated financial statements
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<PAGE>
AMERICAN ELECTRIC AUTOMOBILE COMPANY, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
For the
Period From
For the Nine For the Nine June 15, 1996
Months Ended Months Ended (Inception) to
September 30, September 30, September 30,
2000 1999 2000
<S> <C> <C> <C>
Cash flows from operating
Activities:
Net loss $ (214,736) $ 30,738) $(614,366)
Adjustments to reconcile net loss
to net cash used in
operating activities:
Depreciation 1,530 - 23,487
Loss from investee - - 3,474
Loss on investment - - 18,750
Stock issued for services 28,400 - 189,816
(Increase) decrease in:
Accounts and loans receivable 2,945 450 (4,741)
Stock subscriptions receivable 53,750 - 33,750
Inventory (52,958) (10,895) (60,953)
Prepaid rent (3,040) - (3,040)
Deposit (3,000) - (3,000)
Increase (decrease) in:
Accounts payable and accrued
expenses (6,451) (13,621) 15,484
Accounts payable - related parties 320 (7,996) 61,079
Income taxes payable (4,340) (2,400) 5,448
----------- ----------- ----------
Net cash used in operating
Activities (197,580) (65,200) (334,812)
----------- ----------- ----------
Cash flows from investing
activities
Purchase of property and
Equipment (25,354) - (47,903)
Investment (16,000) - (16,955)
----------- ----------- ----------
Net cash used in investing
Activities (41,354) - (64,858)
----------- ----------- ----------
Cash flows from financing
activities
Proceeds from stock issuance 259,960 66,801 422,636
Notes payable - related party (10,000) - (10,000)
----------- ----------- ----------
Net cash provided by financing
Activities 249,960 66,801 412,636
----------- ----------- ----------
NET INCREASE (DECREASE) IN CASH 11,026 1,601 12,967
CASH AND CASH EQUIVALENTS -
BEGINNING OF PERIOD 1,941 753 -
----------- ----------- ----------
CASH AND CASH EQUIVALENTS -
END OF PERIOD $ 12,967 $ 2,354 $ 12,967
=========== =========== ==========
</TABLE>
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
During the nine months ended September 30, 2000, the Company issued shares of
its common stock in exchange for subscriptions receivable aggregating $353,791
at September 30, 2000.
See accompanying notes to consolidated financial statements
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<PAGE>
AMERICAN ELECTRIC AUTOMOBILE COMPANY, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2000
------------------------
NOTE 1 BASIS OF PRESENTATION
------ ---------------------
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles and the rules and
regulations of the Securities and Exchange Commission for interim financial
information. Accordingly, they do not include all the information necessary
for a comprehensive presentation of financial position and results of
operations.
It is management's opinion, however that all material adjustments (consisting
of normal recurring adjustments) have been made which are necessary for a fair
financial statements presentation. The results for the interim period are not
necessarily indicative of the results to be expected for the year.
For further information, refer to the financial statements and footnotes for
the year ended December 31, 1999 included in the Company's Form 10-SB/A4 filed
on November 3, 2000.
NOTE 2 INVESTMENTS
------ -----------
During the nine months ended September 30, 2000, the Company contributed an
additional $16,000 to its joint venture American Electric Automobile Company
(ASIA), Inc. The Company's 45% interest in the joint venture did not change
since the 55% partner of the joint venture also contributed $16,000. No
equity method adjustment was recorded for the nine months ended September 30,
2000 since the joint venture had no activity for the period.
NOTE 3 COMMON STOCK
------ ------------
On December 13, 1999, the Board agreed to offer up to 3,000,000 shares of
common stock, pursuant to section 4(2) of the Securities Act of 1933, as
amended, at $0.375 per share (as adjusted for the one for three reverse stock
split discussed below). From January 2000 through September 30, 2000, the
Company issued 4,651,667 shares with cash receipts of $313,709 and
subscriptions receivable of $353,791.
In March 2000 the Company's Board of Directors authorized a one for three
reverse stock split without a change in par value. All share quantities,
amounts, and per share data have been retroactively restated in the
accompanying consolidated financial statements to reflect the split.
NOTE 4 GOING CONCERN
------ -------------
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The Company's financial statements for the nine months ended September 30,
2000 have been prepared on a going concern basis which contemplates the
realization of assets and the settlement of liabilities and commitments in the
normal course of business. The Company has incurred accumulated losses of
$608,917 and has substantial cash requirements for operating activities which
raises substantial doubt about its ability to continue as a going concern.
The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.
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 obtaining
additional funding through its stock offering (See Note 3) and collecting on
its subscriptions receivable.
On August 23, 2000, the Company agreed to issue 3,250,000 shares of restricted
common stock to an investor for a total purchase price of $275,000, payable in
four installments over a ninety day period following the closing. On
September 13, 2000, the Company received a payment of $75,000, and the Company
issued approximately 51% of the then issued and outstanding shares of the
Company. The shares for which payment has yet to be made are being held in
escrow and may be released to the investor pro rata in accordance with the
payments to be made at each stage.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
CERTAIN FORWARD-LOOKING INFORMATION
Information provided in this Quarterly Report on Form 10QSB may contain
forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934 that are not historical facts and information. These
statements represent the Company's expectations or beliefs, including, but not
limited to, statements concerning future and operating results, statements
concerning industry performance, the Company's operations, economic
performance, financial conditions, margins and growth in sales of the
Company's products, capital expenditures, financing needs, as well
assumptions related to the forgoing. For this purpose, any statements
contained in this Quarterly Report that are not statements of historical fact
may be deemed to be forward-looking statements. These forward-looking
statements are based on current expectations and involve various risks and
uncertainties that could cause actual results and outcomes for future
periods to differ materially from any forward-looking statement or views
expressed herein. The Company's financial performance and the forward-looking
statements contained herein are further qualified by other risks including
those set forth from time to time in the documents filed by the Company with
the Securities and Exchange Commission, including the Company's most recent
Form 10SB.
COMPANY BACKGROUND
The Company is a development stage company engaged in the business of
converting gasoline-powered vehicles to electric and hybrid power uses. The
Company accomplishes this by replacing the internal combustion engine of a
standard gasoline-powered vehicle with readily obtainable commercial electric
motors that are controlled by the Company's proprietary computerized electric
drive controllers. The Company is also working to develop a serial hybrid
electric-gasoline vehicle ("HEV").
The Company conducts its business domestically through its wholly-owned
subsidiary, California Electric Automobile Company ("CEAC"). Through its
sales office located in San Diego, California, CEAC has focused on the
conversion of customer-owned vehicles from gasoline power to electric
vehicles. To date, the Company has converted and sold five (5) such customer-
owned EVs. Additionally, in March 2000, the Company purchased a Hyundai(r)
Accent which it has converted to use as an EV. The Company intends to use the
Hyundai as a floor-model to demonstrate to prospective customers the
advantages of the EV Hyundai. While there are no federal or state testing
standards for EVs, the Company has had the Hyundai road tested by a former
two-time winner of the Indianapolis 500, who praised the vehicle's performance.
In addition to the conversion of gasoline-powered vehicles to electric
vehicles, the Company is pursuing development of a serial hybrid electric
vehicle (HEV). HEVs combine a specially modified, small gasoline or methanol
powered internal combustion engine and generator with the battery and electric
motor of an electric vehicle.
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The batteries can be recharged by the gasoline engine as the HEV is driven,
thus reducing or eliminating the need for recharging equipment or extra stops
at recharging stations, as the cars can be refueled at regular gas stations.
HEVs have substantially increased fuel economy when compared to regular
gasoline powered vehicles. They also produce significantly lower levels of
pollution.
The Company has completed the production work at its San Diego facility on the
Company's first HEV. The HEV is currently being test-driven to determine the
vehicle's performance characteristics and reliability factors.
Despite all of the foregoing, however, there are no assurances that the
Company will be able successfully to sell any of its vehicles, including the
Hyundai EVs, or any HEVs.
By Letter of Agreement dated August 23, 2000, the Company agreed to issue
3,250,000 shares of restricted common stock to Bisell Investments Inc. for a
purchase price of $275,000.00.
On September 13, 2000, Bisell Investments Inc. paid the first installment of
the purchase price in the amount of $75,000.00 to the Company at which time it
was issued over 51% of the issued and outstanding shares of the Company. The
balance of the purchase price is payable in two installments of $75,000.00
each, payable on the thirtieth and sixtieth days after closing, and one
installment of $50,000.00 payable on the ninetieth day after closing. Bisell
also has the option to purchase an additional 3,000,000 shares at a purchase
price of $0.08 per share, valid for 2 years from the closing date.
The purchase price of $275,000.00 is to be used to pay off debts and existing
loans to the Company as well as for operating expenses of California Electric
Automobile Company and administrative expenses of the Company.
Although the funding provided by this issuance is significant enough to
satisfy current debts owing as well as cover operating and administration
expenses for CEAC and the Company in the short term, this amount is not
sufficient to implement an effective marketing program, or to fund the
necessary growth in inventory and operational costs that occur when sales
expand. While the Company intends to seek funds for such marketing efforts and
operational costs, there can be no assurance that such additional financing
sources will be available at acceptable terms, if any at all. Additionally,
the Company's accountants have expressed their doubt about the Company's
ability to continue as a going concern due to its ongoing substantial cash
requirements for operating activities.
RESULTS OF OPERATIONS.
THREE MONTHS ENDED SEPTEMBER 30, 2000 AND SEPTEMBER 30, 1999
Net revenues were $4,631 for the quarter ended September 30, 2000, an increase
of $4,631 from the quarter ended September 30, 1999. The reason for this
increase is that the subsidiary earned the revenues by upgrading an electric
vehicle conversion on a Volkswagon Truck. Net sales were low due to the fact
that there was inadequate funding to carry out any significant production
along with any effective marketing campaigns.
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<PAGE>
Total operating expenses for the Company increased by $77,071 over the same
period last year, which is over 300 percent above the amount of $26,301 which
was total operating expenses for the quarter ended June 30, 1999. The
principle reason for the increase was the increase in general operating
expenses resulting from the Company becoming a reporting company under the
Securities Exchange Act of 1934, as amended, including the payment of certain
legal and professional fees as well as general and administrative expenses.
Net Loss for the quarter ended September 30, 2000 was $98,741, compared to a
net loss of $26,351 for the similar period in 1999. The principal reasons
for this are the combined impact of the factors discussed immediately above:
the substantial increase in operating, legal and administrative expenses.
However, even without these expenses, it is unlikely that the Company would
have had a profit, as revenues have been minimal.
During the nine months ended September 30, 2000, the Company issued 4,651,667
shares of common stock for cash proceeds of $313,709 and subscriptions
receivable of $353,791, aggregating $667,500. Of those total shares issued,
3,605,000 were issued in the three month period ended September 30, 2000.
The company effected a 3-for-1 reverse stock split, which had been approved by
the shareholders on March 20, 2000, during April 2000. All share amounts in
this Form 10QSB have been retroactively restated to give effect to the reverse
Stock split.
DEFAULT BY SHAREHOLDERS ON CERTAIN PROMISSORY NOTES
As was reported in the Company's Form 10QSB for the first and second quarters
of 2000, from January through April 21 2000, the Company carried out a private
placement offering to a small number of accredited investors in three states.
Of the total amount subscribed of $373,750, the Company received $186,209 in
cash and $187,541 in notes as of June 30, 2000. Installment payments on the
notes were due from five investors, with all such installments due by July 31,
2000. All of those investors are now in default on their notes. Of the total
amount due, the Company has received only $34,587 including interest as
payments against those notes, and there is a total balance due of $152,954.
The Company has sent notice to the defaulting shareholders by registered
letters dated October 5, 2000 informing them that, should the outstanding
payments plus interest not be received in full by October 22, 2000, the
Company will elect to cancel the Subscription Agreements in respect of the
number of shares for which payment and interest has not been received. The
Company has also reserved its right to pursue other remedies available under
law as a result of the breach of the Subscription Agreements. As of October
22, 2000, none of the defaulting shareholders remitted further payments under
their promissory notes and therefore, the Company is in the process of
canceling the unpaid shares.
The Company currently is holding various stock certificates as security for
the Notes representing Six Hundred And Fifty Thousand (650,000) issued and
outstanding shares of Company stock. This sum represents approximately 10% of
the Company's total of 6,131,564 shares of stock.
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<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
If the EV and/or HEV that the Company is developing appear likely to generate
substantial sales activity, the Company plans to expand its operations
by leasing additional space for production to meet sales demand. However,
such expansion efforts require large sums of cash. The Company is currently
using the funds received from Bisell Investments Inc. to finance the
operations of CEAC and the completion of the conversion of a 4-Door Hyundai
Accent to an EV. The Company had also intended to use a substantial amount of
the proceeds from the balance owing on the Notes, when collected, to help
finance such expansion, however, this is not possible due to the defaults.
RISK FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS
1. LIMITED HISTORY OF OPERATIONS. The Company was organized in May of 1996,
and has had limited operations to date. Therefore its operations are subject
to all of the risks inherent in new business enterprises. The likelihood of
the success of the Company must be considered in light of the problems,
expenses, difficulties, complications and delays frequently encountered in
connection with the start up of new businesses and the competitive environment
in which the Company will operate. The Company has had no significant
revenues to date.
2. DEVELOPMENT STAGE COMPANY. Company is a "development stage" company.
This means that it is still in the mode of developing its proposed product,
and has yet to generate market recognition or strength. Operations therefore
will depend upon the continued availability of investment capital to fully
fund subsequent Projects. If operating revenues are insufficient to continue
the Company's operations, additional funds would have to be raised through
equity or debt financing. The Company has no commitments for any additional
debt or equity financing and there can be no assurance that any such
commitments will be obtained on favorable terms, if at all.
3. COMPETITION. Competition in the electric automobile industry may be
expected to intensify. General Motors started leasing its first Electric Auto
in December 1996. Several of the other major automobile manufacturers also
have announced that they have entered or intend to enter the market.
4. FAILURE TO ATTRACT AND RETAIN MANAGEMENT COULD HARM OUR ABILITY
TO ACHIEVE PROFITABILITY. The Company's success is dependent in large part
upon its continued ability to identify, hire, retain and motivate highly
skilled management employees. These types of qualified individuals are
currently in great demand in the marketplace. Competition for these employees
is intense and the Company may not be able to hire additional qualified
personnel in a timely manner and on reasonable terms. The inability of the
Company to retain competent professional management could adversely affect our
ability to execute our business strategy.
5. INDUSTRY AND ECONOMIC FACTORS. The automobile industry in which the
Company expects to operate is subject to constant changes based upon changes
in public taste as well as the condition of the general economy. Factors
beyond the control of the Company or those on whom it intends to rely could
cause the Company to fail.
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6. CONTROL OF THE COMPANY. The Officers, Directors and Principal
Shareholder Group own more than 50% of the Common Shares of the Company.
Therefore, the Control Group will either control or significantly influence a
voting control of the Company. Pursuant to the laws of Delaware, a majority
of all shareholders entitled to vote at any regularly called shareholders
meeting, may act, as a majority, without notice or meeting, giving notice to
other shareholders only after such action may have been taken. While there
are some limits upon this right of the majority, Investors should understand
that Management commands a voting majority in control of the Company.
7. DIVIDENDS. The Company has paid no dividends on its Common Shares since
its inception. The Company does not anticipate paying any dividends on its
Common Stock unless and until the Company makes a substantial profit, and even
then may determine no to pay out any dividends.
8. UNAUDITED FINANCIAL STATEMENTS. The interim financial statements as of
September 30, 2000, and for the three, six and nine months then ended, are
unaudited.
9. GOVERNMENT REGULATION. The automobile industry in general is heavily
regulated both as to crash survival and motor emissions. The Company expects
to have no problems with the latter and, because of the use of bodies which
have already been approved for gasoline engine use, less severe problems
with the former.
10. POTENTIAL CONFLICTS OF INTEREST. The officers and directors are
associated with other firms, including others with material contractual
relationships with this Issuer, and are involved in a range of business
activities. Due to these affiliations and the fact that some officers
are expected to devote only a portion of their time to the business of the
Company, there are potential inherent conflicts of interest in their acting as
directors and as officers. Each of the officers and directors is or may
become an officer, director, controlling shareholder, partner or participant
in other entities engaged in a variety of businesses. These existing and
potential conflicts of interest are irreconcilable and could involve the
participating officers and directors in litigation brought by the Company's
shareholders or by the shareholders of other entities with which the
officers and directors are currently, or may become, affiliated. To help
alleviate this position somewhat, Management has adopted a policy of full
disclosure with respect to business transactions with any entity in which any
or all of the officers or directors are affiliated, either directly or
indirectly. An officer or director may continue any business activity in
which such officer or director engaged prior to joining the Company.
11. GOING CONCERN. As of September 30, 2000 the company had a stockholders'
equity of $139,663. The auditors issued a "going concern" opinion in the
audited consolidated financial statements for the year ended December 31, 1999,
and the Company raised a going concern issue in the unaudited consolidated
financial statements as of September 30, 2000, and for the three, six and nine
months then ended.
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PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None
ITEM 2. CHANGES IN SECURITIES.
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None
ITEM 5. OTHER INFORMATION
None
Item 6. Exhibits and Reports on Form 8-K
(a) (2) Filed by reference: Form 10SB filed February 23, 2000
(3) Filed by reference: Form 10SB filed February 23, 2000
(10) Filed by reference: Form 8K filed September 19, 2000
(27) Financial Data Schedule
(b) A report dated September 18, 2000 was filed on Form 8-K on
September 19, 2000. The items reported included Item 1, Change in Control of
Registrant wherein Bisell Investments Inc. was issued over 51% of the shares
of the Registrant.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
AMERICAN ELECTRIC AUTOMOBILE COMPANY, INC.
PIERRE QUILLIAM
---------------
Date: November 17, 2000 By Pierre Quilliam
President and CEO
15
