<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 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, 1999
Commission File Number: 000-24779
V-TWIN ACQUISITIONS, INC.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
District of Columbia 52-2110338
- --------------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
1707 H St. N.W. #200
Washington, DC 20006
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(Address of principal executive offices) (Zip Code)
(703) 471-6990
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(Issuer's telephone number)
Check whether the Issuer (1) filed all report required to be file by Section 13
or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
x YES NO
- ------ ------
State the number of shares outstanding of each of the Issuer's classes of common
equity, as of the latest practicable date: 3,700,000 common shares as of
September 30, 1999.
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Financial Statements F-1
Balance Sheets as of September 30, 1999
and June 30, 1999 F-2
Statements of Operations for the
Three Months Ended September 30, 1999 and 1998 F-3
Statements of Stockholders' Equity F-4
Statements of Cash Flows F-5
(for three months ended September 30, 1999 and 1998)
Notes To Financial Statements F-6 through F-10
2
<PAGE> 3
FINANCIAL STATEMENTS
IN THE OPINION OF THE MANAGEMENT OF V-TWIN ACQUISITIONS, INC. (THE
COMPANY), THE ACCOMPANYING UNAUDITED INTERIM COMBINED FINANCIAL
STATEMENTS CONTAIN ALL ADJUSTMENTS NECESSARY OF A FAIR PRESENTATION
OF THE COMPANY'S FINANCIAL CONDITION AS OF SEPTEMBER 30, 1999 AND
JUNE 30, 1999, AND THE RESULTS OF ITS OPERATIONS AND CASH FLOWS FOR
THE THREE MONTH PERIODS ENDED SEPTEMBER 30, 1999 AND SEPTEMBER 30,
1998.
THE ACCOMPANYING UNAUDITED COMBINED FINANCIAL STATEMENTS HAVE BEEN
PREPARED PURSUANT TO THE RULES AND REGULATIONS OF THE SECURITIES AND
EXCHANGE COMMISSION. CERTAIN INFORMATION AND NOTE DISCLOSURES
NORMALLY INCLUDED IN ANNUAL FINANCIAL STATEMENTS PREPARED IN
ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES HAVE BEEN
CONDENSED OR OMITTED PURSUANT TO THOSE RULES AND REGULATIONS,
ALTHOUGH THE COMPANY'S MANAGEMENT BELIEVES THAT THE DISCLOSURES AND
INFORMATION PRESENTED ARE ADEQUATE AND NOT MISLEADING. REFERENCE IS
MADE TO THE DETAILED FINANCIAL STATEMENT DISCLOSURES WHICH SHOULD BE
READ IN CONJUNCTION WITH THIS REPORT AND ARE CONTAINED IN THE NOTES
TO COMBINED FINANCIAL STATEMENTS INCLUDED IN THE COMPANY'S FORM
10-KSB FILED DECEMBER 2, 1999.
F-1
<PAGE> 4
V-TWIN ACQUISITIONS, INC. AND AFFILIATE
COMBINED BALANCE SHEETS
SEPTEMBER 30, 1999 AND JUNE 30, 1999
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, 1999 JUNE 30, 1999
-------------------------------- ----------------------------
CURRENT ASSETS:
<S> <C> <C>
CASH AND CASH EQUIVALENTS $ 156,400 $ 220,460
INVESTMENTS 155,170 125,000
ACCOUNTS RECEIVABLE, NET OF ALLOWANCE FOR
DOUBTFUL ACCOUNTS OF $53,158 @ JUNE 30, 1999 22,969 61,068
INVENTORY, NET 1,074,112 1,080,733
PREPAID EXPENSES 14,499 33,513
--------------------------------- -----------------------------
TOTAL CURRENT ASSETS 1,423150 1,520,744
PROPERTY AND EQUIPMENT, NET 65,059 10,966
--------------------------------- -----------------------------
TOTAL ASSETS $ 1,488,209 1,531,740
--------------------------------- -----------------------------
</TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
SEPTEMBER 30, 1999 JUNE 30, 1999
------------------ -------------
CURRENT LIABILITIES:
<S> <C> <C>
SHORT-TERM DEBT $ 745,535 $ 927,100
LEASE COMMITMENTS 41,974 --
ACCOUNTS PAYABLE 172,559 127,549
ACCRUED EXPENSES 55,454 67,823
CUSTOMER DEPOSITS 39,092 50,781
--------------------------------- ----------------------------
TOTAL CURRENT LIABILITIES 1,054,614 1,173,253
--------------------------------- ----------------------------
COMMITMENTS AND CONTINGENCIES -- --
STOCKHOLDERS' EQUITY:
COMMON STOCK 3,700 3,600
ADDITIONAL PAID-IN CAPITAL 734,900 568,000
ACCUMULATED DEFICIT (305,005) (213,113)
--------------------------------- ----------------------------
TOTAL STOCKHOLDERS' EQUITY 433,595 358,487
--------------------------------- ----------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,488,209 $ 1,531,740
--------------------------------- ----------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO COMBINED FINANCIAL STATEMENTS
F-2
<PAGE> 5
V-TWIN ACQUISITIONS, INC. AND AFFILIATE
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND SEPTEMBER 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 30, 1999 SEPTEMBER 30, 1998
--------------------------------------- ---------------------------------
REVENUES:
<S> <C> <C>
SALES INCOME $ 1,410,277 $ --
SERVICE INCOME 95,472 --
--------------------------------------- ---------------------------------
TOTAL REVENUES 1,505,749 --
COST OF GOODS SOLD (1,094,195) --
--------------------------------------- ---------------------------------
GROSS MARGIN 411,554 --
OPERATING EXPENSES (489,359) (10,000)
OPERATING LOSS (77,805) (10,000)
--------------------------------------- ---------------------------------
OTHER EXPENSES:
INTEREST EXPENSE (14,087) --
--------------------------------------- ---------------------------------
NET LOSS (91,892) (10,000)
--------------------------------------- ---------------------------------
NET LOSS PER COMMON SHARE:
BASIC AND DILUTED (.02) .00
WEIGHTED AVERAGE NUMBER
OF OUTSTANDING COMMON SHARES 3,650,000 3,000,000
</TABLE>
SEE ACCOMPANYING NOTES TO COMBINED FINANCIAL STATEMENTS
F-3
<PAGE> 6
V-TWIN ACQUISITIONS, INC. AND AFFILIATE
COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY
AT JUNE 30, 1999 AND FOR THE THREE MONTHS ENDED SEPTEMBER 30,1999
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK ADD. PAID ACCUMULATED TOTAL STOCKHOLDERS'
------------ --------- ----------- -------------------
SHARES AMOUNT IN CAPITAL DEFICIT EQUITY
------ ------ ---------- ------- ------
<S> <C> <C> <C> <C> <C>
Balance June 30, 1999 3,600,100 $ 3,600 $ 568,000 $ (213,113) $ 358,487
=================================================================================================================
Issuance of 100,000
(par $.001) common
shares at $1.67 100,000 $ 100 $ 166,900 -- $ 167,000
Net loss for the
three months ended
Sept. 30, 1999 -- -- -- (91,892) $ (91,892)
=================================================================================================================
Balance Sept. 30, 1999 3,700,100 $ 3,700 $ 734,900 $ (305,005) $ 433,595
</TABLE>
SEE ACCOMPANYING NOTES TO COMBINED FINANCIAL STATEMENTS
F-4
<PAGE> 7
V-TWIN ACQUISITIONS, INC. AND AFFILIATE
COMBINED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND SEPTEMBER 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 30, 1999 SEPTEMBER 30, 1998
-------------------------------- ------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET LOSS $ (91,892) $ (10,000)
ADJUSTMENTS TO RECONCILE NET LOSS TO
NET CASH USED IN OPERATING ACTIVITIES --
DEPRECIATION 2,690 --
CHANGES IN OPERATING ASSETS AND
LIABILITIES:
DECREASE(INCREASE) IN:
ACCOUNTS RECEIVABLE 38,099 --
INVENTORY 6,621
PREPAID EXPENSES 19,014
ACCOUNTS PAYABLE 45,010
ACCRUED EXPENSES (12,369) (10,000)
CUSTOMER DEPOSITS (11,689) --
-------------------------------- ------------------------
NET CASH USED IN OPERATING ACTIVITIES (4,516) (10,000)
-------------------------------- ------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
ADDITIONS TO PROPERTY AND EQUIPMENT (14,809) --
(NET OF $41,974 IN LEASE COMMITMENTS)
INVESTMENTS PURCHASED (30,170) --
-------------------------------- ------------------------
NET CASH USED IN INVESTING ACTIVITIES (44,979) --
-------------------------------- ------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
REPAYMENTS OF SHORT-TERM DEBT (181,565)
PROCEEDS FROM SALE OF COMMON STOCK 100 --
PROCEEDS FROM ADDITIONAL PAID IN CAPITAL 166,900 --
-------------------------------- ------------------------
NET CASH PROVIDED BY FINANCING
ACTIVITIES (14,565) --
-------------------------------- ------------------------
NET INCREASE (DECREASE) IN CASH (64,060) (10,000)
CASH AT BEGINNING OF PERIOD 220,460 50,148
-------------------------------- ------------------------
CASH AT END OF PERIOD $ 156,400 $ 40,148
================================ ========================
</TABLE>
SEE ACCOMPANYING NOTES TO COMBINED FINANCIAL STATEMENTS
F-5
<PAGE> 8
V-TWIN ACQUISITIONS, INC. AND AFFILIATE
NOTES TO COMBINED FINANCIAL STATEMENTS
(UNAUDITED)
1. Organization
V-Twin Acquisitions, Inc. (the "Company"), was organized under the laws of the
District of Columbia on July 10, 1998. On July 10, 1998, the Company completed a
merger with Commercial Indemnity Underwriters, Inc. ("CIU") with the Company as
the surviving entity. CIU, formerly known as American Solid Fuel, Inc. ("ASFI"),
was an inactive company until its merger with the Company. ASFI was formed in
August, 1988, and successfully completed a public offering through an S-18
registration. CIU had no assets, liabilities, income or expenditures from
operations and accordingly, there was no historical carry-over basis.
V-Twin Acquisitions, Inc. of Virginia (the "Affiliate") is a privately-held
corporation organized under the laws of Virginia on March 30, 1999 to own and
operate motorcycle dealerships in Virginia.
The Company intends to acquire independent motorcycle dealerships and create a
nationwide marketing, distribution and retail organization that leverages
multiple sources of sales and sales leads, including internet commerce, direct
marketing, retail sales and service.
2. Summary of Significant Accounting Policies
Basis of Presentation - The combined financial statements of the Company include
the accounts of its affiliate, V-Twin Acquisitions, Inc. of Virginia. All
significant intercompany balances and transactions have been eliminated.
Accounting Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the associated amounts
of revenues and expenses during the period reported. Actual results could differ
from the estimates.
Allowance for Doubtful Accounts - The Company uses the allowance method of
recognizing bad debts. Specifically identified uncollectible accounts are
charged against the allowance.
Inventory Valuation - Inventory is valued at the lower of cost or market using
the average cost method. Obsolete or damaged goods are reduced to estimated net
realizable values.
Cash Equivalents - For purposes of the combined statements of cash flows, the
Company considers all highly liquid debt instruments purchased with a maturity
of three months or less to be cash equivalents.
Concentrations of Credit Risk - Financial instruments that potentially subject
the Company to a concentration of credit risk consist principally of temporary
cash investments and accounts receivable. The Company has cash investment
policies that restrict placement of these investments to financial institutions
that are evaluated as highly creditworthy. The carrying amount of accounts
receivable approximate their net realizable value.
Property and Equipment - Property and equipment are recorded at cost.
Depreciation expense of property and equipment is determined using the
straight-line method over the estimated useful lives of the assets, as follows:
Computer equipment.............................. 5 years
Machinery and equipment......................... 7 years
Maintenance and repairs are charged to expense as incurred; major renewals and
improvements are capitalized. When items of property or equipment are sold or
retired, the related cost and accumulated depreciation are removed from the
accounts and any gain or loss is included in the results of operations.
Income Taxes - Income taxes are accounted for under the asset and liability
method. Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted taxes expected to apply to taxable income
in the years in which those temporary
F-6
<PAGE> 9
differences are expected to be recovered or settled. 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.
Dividend Policy - The Company has not paid any dividends since its inception.
Management does not anticipate declaring dividends in the foreseeable future.
Earnings Per Share - Basic earnings per share is computed by dividing net income
by the weighted average number of shares outstanding for the period. Diluted
earnings per share include the dilutive effect of stock options, warrants and
contingent shares.
New Accounting Standards - In April 1998, the Accounting Standards Executive
Committee (AcSEC) issued Statement of Position (SOP) 98-5, "Reporting on the
Costs of Start-Up Activities." This SOP is effective for fiscal year 2000 and
requires that start-up costs and organizational costs be expensed as incurred
and that such costs capitalized previously be expensed as a cumulative effect of
change in accounting principle. The Company does not believe that SOP 98-5 will
have a material impact on its financial position or results of operations when
such statement is adopted.
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133
"Accounting for Derivative Instruments and Hedging Activities" for fiscal years
beginning after June 15, 1999. SFAS No. 133 requires the recognition of all
derivatives in the consolidated and combined balance sheet as either assets or
liabilities measured at fair value. The Company will adopt SFAS No. 133
effective for the 2000 calendar year end. Additionally, the Company does not
expect the adoption of SFAS No. 133 to have a material impact on its financial
position or results of operations since it does not engage in hedging activities
or hold derivatives.
3. Acquisitions
In April 1999, the Affiliate began its strategic acquisition program by
purchasing the ongoing operations plus certain assets and liabilities of a
retail motorcycle dealership located in Herndon, Va. The acquisition was
accounted for as a purchase, and accordingly, the operating results of the
acquired company have been included in the accompanying combined financial
statements since the date of acquisition. The aggregate purchase price was
approximately $300,000 and has been allocated to the assets and liabilities
acquired based upon their respective fair market values. No good will was
recognized in connection with this transaction.
4. Investments
Investments consist of four certificates of deposit which serve as security for
four letters of credit required to obtain inventory floorplan financing. These
investments bear interest at 4.05% with one year terms and are expected to be
held to maturity. The carrying amounts reported in the combined balance sheet
for these financial instruments are at cost, which approximates fair market
value.
5. Inventory
Inventory consists of the following:
<TABLE>
<CAPTION>
Sept. 30, 1999 June 30, 1999
---------------------- ------------------------
<S> <C> <C>
Motorcycles and other vehicles ......... $ 775,599 858,630
Parts and accessories .................. 298,513 222,103
---------------------- ------------------------
$ 1,074,112 1,080,733
====================== ========================
</TABLE>
F-7
<PAGE> 10
6. Property and Equipment
Property and equipment consists of the following:
<TABLE>
<CAPTION>
Sept. 30, 1999 June 30, 1999
---------------------- ----------------------
<S> <C> <C>
Computer equipment .................... $ 18,613 $ 6,662
Machinery and equipment ............... 49,849 4,657
---------------------- ----------------------
68,102 11,319
Less: accumulated depreciation ........ 3,043 353
---------------------- ----------------------
$ 65,059 $ 10,966
====================== ======================
</TABLE>
Depreciation expense for property and equipment was $ 2,690 for the three months
ended September 30, 1999 and was $ 353 for the period from inception (July 10,
1998) to June 30, 1999.
7. Short-term Debt
The Affiliate finances its motorcycle inventory through floorplan financing
arrangements that are secured by the underlying motorcycle inventory and the
assets of the Affiliate. Investments held by the Affiliate have been pledged as
additional security to the finance companies along with personal guarantee's of
two officers and directors of the Affiliate. Finance terms range from prime to
prime plus five depending upon the number of days outstanding from the inception
date of the financing. Typically, the finance companies provide a 60 or 90 day
grace period before interest is charged or accrued.
8. Commitments and Contingencies
Lease Commitments
The Affiliate entered into a ten year lease agreement beginning May 1, 1999, for
office and retail space in Herndon, VA at an initial monthly rate of $8,850.
The Affiliate also assumed a lease for retail space in Springfield, VA, which
expired on June 30, 1999. Subsequent to the expiration of this lease agreement,
the Affiliate entered into a month to month lease agreement at $4,800 per month.
Future minimum lease payments as of June 30, 1999 under all operating leases
greater than one year are as follows:
<TABLE>
<CAPTION>
Year ended June 30,
-------------------------------------------------
<S> <C> <C>
2000 .................................. $ 108,210
2001 .................................. 120,462
2002 .................................. 130,148
2003 .................................. 136,602
2004 .................................. 142,805
Thereafter ............................. 752,657
----------------------
$ 1,390,884
======================
</TABLE>
Rent expense for the three months ended September 30, 1999 was $ 41,652 and for
the period from inception (July 10, 1998) to June 30, 1999 was $28,729.
Additionally, the Affiliate had commitments outstanding for capital leases of
$ 41,974 at September 30, 1999.
F-8
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9. Stockholders' Equity
Stockholders' equity is comprised of the following:
<TABLE>
<CAPTION>
Common stock 9-30-99 6-30-99
--------------------- ---------------
<S> <C> <C>
Company - .001 par; 25,000,000 shares authorized; 3,700,000
shares issued and outstanding ..................................... $ 3,700 $ 3,600
Affiliate - .001 par - 100 shares, authorized, issued and
outstanding ....................................................... - -
--------------------- ---------------
Total common stock ....................................... $ 3,700 $ 3,600
===================== ===============
Additional paid in capital
Company .............................................................. 734,800 567,900
Affiliate ............................................................ 100 100
--------------------- ---------------
Total additional paid in capital ......................... $ 734,900 $ 568,000
===================== ===============
Accumulated deficit
Company .............................................................. (35,101) (29,980)
Affiliate ............................................................ (269,904) (183,133)
--------------------- ---------------
Total accumulated deficit ................................ $ (305,005) $ (213,113)
===================== ===============
</TABLE>
Common Stock - In July, 1998, the Company merged with Commercial Indemnity
Underwriters, Inc. (CIU). In connection with this merger, all outstanding shares
of CIU were exchanged for 808,727 Class A shares and 191,273 Class B shares. In
August 1998, the Company's shareholders approved a one for three (1:3) forward
stock split and the abolishment of the existing two classes of common stock
resulting in a singular unitary class of common stock. At September 30, 1999,
the Company had 25,000,000 common shares authorized and 3,700,000 common shares
issued and outstanding at a par value of .001 per share.
In April, 1999, the Affiliate was incorporated in the state of Virginia. 100
shares of common stock were authorized and issued at par value of .001 per
share.
Warrants - In March 1999, the Company issued 600,000 shares of restricted common
stock and warrants to purchase 600,000 additional shares of restricted common
stock. The warrants are exercisable at $1.67 per share for a period of 54 months
in consideration for $400,000 in cash received. In August, 1999, 100,000 of
these warrants were exercised for $167,000 in cash.
Additional Paid in Capital - During the period ended June 30, 1999, the Company
received cash consideration of $170,500 as additional paid-in-capital from
certain officers and directors of the Company.
10. Earnings Per Share
The following data shows the amounts used in computing basic and diluted
earnings per share for the period ending September 30, 1999, and from inception
(July 10, 1998) to June 30, 1999.
<TABLE>
<CAPTION>
9-30-99 6-30-99
-------------------- -------------------
<S> <C> <C>
Net loss to common shareholders ........................... $ (91,892) $ (213,113)
Weighted average number of outstanding
common shares ........................................... 3,650,000 3,000,033
-------------------- -------------------
Net loss - basic and diluted .............................. $ (0.02) $ (0.07)
==================== ===================
</TABLE>
11. Related Party Transactions
Two officers and directors of the Affiliate also serve as officers and directors
of the Company. The two officers and directors of the Affiliate, owning
collectively 100% of the outstanding common stock of the Affiliate, have agreed
to pledge their shares pursuant to a trust agreement dated April 15, 1999, in
consideration for the purchase of key man life insurance.
F-9
<PAGE> 12
In April, 1999 the Company loaned the Affiliate $400,000 for purchase of certain
assets and liabilities of a motorcycle dealership and to provide working
capital. The loan evidenced via a promissory note is unsecured and is due and
payable in five years. Interest accrues at an annual rate of 10%. In August,
1999, the Company loaned the Affiliate $167,000 for purchase of certain assets
and liabilities of a motorcycle dealership and to provide working capital. The
loan evidenced via a promissory note is unsecured and is due and payable in five
years. Interest accrues at an annual rate of 10%.
12. Supplemental Information to Statements of Cash Flows
Interest paid during the period ended September 30, 1999 was $14,087, and from
inception (July 10, 1998) to June 30, 1999 was $14,641. No federal or state
income taxes have been paid.
In May, 1999, the Affiliate acquired motorcycle inventory with a cost basis of
$927,100 and assumed a corresponding financing liability of the same amount. At
September 30, 1999, the Affiliate had motorcycle inventory with a cost basis of
$775,599 and a corresponding financing liability of $745,535, with the
difference attributed to used motorcycles owned by the Affiliate.
In connection with the one for three (1:3) forward stock split and abolishment
of the existing two classes of common stock, $2,000 was reclassified from
additional paid-in-capital to common stock at June 30, 1999.
F-10
<PAGE> 13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following information should be read in conjunction with the audited
beginning financial statements and notes appearing elsewhere in this Form
10-QSB, as well as those relating to the Form 10-KSB filed on December 2, 1999.
The Company had no revenue from operations in each of the last two fiscal years.
The Company had expenses with regards to its business development and additional
costs related to its requirements as a public company.
The Company is primarily engaged in the research required in connection with the
acquisition of independent motorcycle dealerships and related businesses. The
Company itself has no sales revenues and has had no income from any operations.
The Company's only actions have been to complete the Company's initial
capitalization and to conduct the necessary SEC filings to achieve public
status. The Virginia entity sells motorcycles and related service, parts and
accessories. The Virginia entity initiated operations on May 1, 1999.
In combination with the Virginia entity, the total assets of the Company at June
30, 1999 were $1,531,740, and at September 30, 1999 were $1,488,209, net of an
allowance for doubtful accounts of $53,159 at September 30, 1999 and June 30,
1999, which represents a shortfall in the purchase of the assets of a motorcycle
dealership undertaken by the Virginia entity in May, 1999. Total capital in
consolidation was $358,487 at June 30, 1999, and at September 30, 1999 was
$433,585. In July, 1999, the Virginia entity placed a $30,000 letter of credit
to secure a floor plan line to support two of its motorcycle lines.
Total revenues for the period ending September 30, 1998 were $-0-, and were
$1,505,749 in 1999, and gross profit for the period ending September 30, 1998
was ($10,000), and in 1999 was $411,554. In combination, the Company has a net
loss of ($91,892) or ($0.02) per share in 1999, and the net loss for the same
period in 1998 was ($10,000), or ($0.00) per share.
At inception, July 10, 1998, the Company had no revenues.
The Company and the Virginia entity note that their financial statements are
combined pursuant to a Trust Agreement, incorporated by reference in the
previously filed Form 10-KSB filed December 2, 1999, and certain accounting
rules regarding combination, while both entities remain, and shall always
remain, separate legal entities.
Plan of Operation
The Company has sufficient funds to satisfy its cash requirements for the next
12 months, and would raise funds only to acquire additional independent
dealerships. The Virginia entity expects to have sufficient funds resulting from
continuing operations to satisfy its operating cash requirements for the next 12
months.
To the extent necessary, both Mr. Schwartzbeck, President of V-Twin
Acquisitions, Inc. and the Virginia entity, and Mr. Pignatello, Secretary of
V-Twin Acquisitions, Inc. and the Virginia entity, are willing to provide any
and all working capital necessary for V-Twin Acquisitions, Inc. and the Virginia
entity for the next twelve months, should there be any shortfall of working
capital in V-Twin Acquisitions, Inc. and the Virginia entity.
3
<PAGE> 14
Effective May 1, 1999, the Virginia entity purchased the assets of a two store
motorcycle dealership in the DC metropolitan area named Cycle Sport Unlimited,
Inc. It should be noted that the technique to effectuate that transaction was a
"bulk sale" agreement under the Uniform Commercial Code ("UCC") and the Virginia
Code. A Bulk Sale is the purchase of assets and the assumption of liabilities of
a division of a going concern, with the intent of the parties being that the
purchaser will continue in the same business that the seller operated, but as a
new business. The Virginia entity did not purchase any income or earnings. As a
result of the bulk purchase, no material undisclosed liabilities surfaced, and
no tax liabilities were carried forward.
While the Company's previous SEC filings indicate that the Company would,
itself, purchase the assets of Cycle Sport Unlimited, Inc., certain business
conditions arose through examination by management which necessitated a change
in the bulk sale purchase. These business conditions included double taxation
issues, as well as other foreign jurisdiction and state approval issues, and the
Trust Agreement listed as Exhibit 99.9 as incorporated by reference in the Form
10-KSB filed December 2, 1999 was created. Therefore, upon management resolution
of these issues, the Virginia entity was created in March, 1999.
The Virginia entity's goal is to recapitalize and advertise the dealership's
products in order to improve the profitability of it's two retail locations. The
Virginia entity also desires to bring new motorcycle lines into its locations to
increase its customer base. Additionally, the Virginia entity's goal is to
expand both of its locations to allow it to carry more products and to update
its showroom. Finally, the Company's goal is to purchase the assets and
liabilities of independent motorcycle dealerships across the country and develop
an integrated, national marketing effort that leverages retail sales, direct
marketing and the Internet.
The Virginia entity's total asset purchase cost for Cycle Sport was $300,000. To
finance future asset purchases of independent motorcycle dealerships, the
Company itself intends to raise funds from the sale of its restricted common
stock to accredited individuals. These sales may rely upon an exemption from
registration available under Section 4(2), Regulation D Section 505 and Rule 145
(a)(2).
Growth in the Motorcycle Industry
The Company found from research that the entire motorcycle industry is growing
considerably. Several sources cite information from the Motorcycle Industry
Council in supporting the statement that motorcycles are "a rising industry
growing by 20% annually". These authoritative sources include information from
the Motorcycle Industry Council, Cycle News, Harley Davidson's Securities and
Exchange Commission filings on Form 10-K, various press releases disseminated by
Reuters, Polaris Industries, Excelsior Henderson Motorcycle Co., Harley
Davidson, and the regional sales statistics from the Yamaha Motorcycle Division
of Yamaha Industries.
For more information regarding industry growth, please see the Form 10-SB/A-3
filed on February 19, 1999 at pages 7 through 9, and exhibits 99.2, 99.3, and
99.5 incorporated by reference in the Form 10-KSB filed December 2, 1999.
4
<PAGE> 15
Liquidity and Capital Resources
The Company anticipates meeting its working capital needs during the 2000 fiscal
year from capital raised through the common stock already sold to its control
shareholders. It is also investigating the possibility of other financing to
provide additional acquisition capital and to further its acquisition program.
Although it has not made any arrangements or definitive agreements, it is
contemplating both the private placements of securities and/or a public
offering.
In the opinion of management, inflation has not had a material effect on the
operations of the Company.
PRODUCTS AND MARKETS
The Virginia entity is primarily engaged in retail sales of several well-known
brands of motorcycles, as well as ATV's and personal watercraft, related parts
and accessories, and the service of these products.
As recreational products, motorcycles, ATV's and personal watercraft and related
parts and accessories are products enjoying a rising consumer market. According
to U.S. Government reports, from 1992 through 1995 spending on recreational
products grew at over five percent per year and from 1994 through 1997 grew at
three times the rate of overall consumer spending.
The motorcycle industry is large and very fragmented. This is supported by
industry data, primarily the 1998 Motorcycle Statistical Annual Report issued by
the Motorcycle Industry Council. This report states that $6.4 billion in retail
sales were generated by over 12,581 franchised and non-franchised motorcycle
retail outlets. Please see Exhibit 99.10 incorporated by reference in the Form
10-KSB filed December 2, 1999.
There are several factors and changes in the motorcycle retailing industry which
the Company believes provide attractive consolidation opportunities for groups
with significant equity capital and managers experienced in identifying,
acquiring and professionally managing dealerships. The primary factor that the
Company believes provides a consolidation opportunity is that the motorcycle
retailing industry is very fragmented, with over 12,581 retail outlets in 1998.
The majority of these dealerships are privately owned and operated. Dealership
costs are growing as capital costs of opening new dealerships are increasing and
franchising costs require a dealer to carry substantial inventories. For many
dealers there are few alternative exit strategies other than selling to a
growing dealership group, especially for larger dealerships and dealership
owners nearing retirement. The Company believes that these factors may provide
attractive consolidation opportunities.
More information regarding the control of motorcycle manufacturers over
acquisitions and dealers under the headings "Manufacturers' Consent to
Acquisitions and Market Expansion" and "Motorcycle Manufacturers' Control Over
Dealers".
5
<PAGE> 16
MANUFACTURERS' CONSENT TO ACQUISITIONS AND MARKET EXPANSION
Motorcycle manufacturers yield considerable control over the dealerships that
carry their brands through franchise agreements. If there is a change of control
in the dealership, the New Dealer must obtain consent from each manufacturer to
continue to carry that manufacturer's brand of motorcycle. In determining
whether to approve changes of control, manufacturers may consider any number of
subjective factors. These may include the financial condition and ownership
structure of the New Dealer. The manufacturers may impose conditions to the
change of control, including limiting the number of such manufacturers'
franchised dealers that may be acquired by the New Dealer. The manufacturers are
under no obligation to approve changes in control or acquisitions, to disclose
their reasons for accepting or rejecting an acquisition or by abiding by
objective and publicly disclosed measurements by which they approve changes in
control.
The ability of a future subsidiary and/or affiliate corporation to meet
manufacturers' requirements for approving future acquisitions will have a direct
bearing on the Company's ability to complete acquisitions and effect its growth
strategy. The Company can make no assurance that a manufacturer will not
terminate its dealer agreement, refuse to renew its dealer agreement, refuse to
approve future acquisitions, or take other action that could have a material
adverse effect on the Company's acquisition program.
The Company's growth strategy includes acquiring non-franchised and/or
independent motorcycle dealerships that are not restrained by manufacturers'
dealer agreements.
MOTORCYCLE MANUFACTURERS' CONTROL OVER DEALERS
The major motorcycle manufacturers exercise significant control over the
operations of their franchised dealerships. In addition to yielding control over
changes in dealer ownership, many manufacturers control the dealer's geographic
selling area. In these cases, the dealer has an exclusive right to sell the
franchised manufacturers' products within a given protected geographical area.
The dealer may not promote or sell its products to customers residing outside of
its geographical area. The manufacturers also impose customer satisfaction and
market share goals. If a dealer fails the requirements of its dealer agreement,
then the manufacturer may (i) impose additional conditions in subsequent dealer
agreements; (ii) terminate its dealer agreement (iii) limit allocations of
inventory; (iv) reduce reimbursement rates for warranty work performed by the
dealer; and/or (v) deny approval of future acquisitions.
COMPETITION
V-Twin, as a proposed consolidator of independent motorcycle dealerships, has no
direct competition. V-Twin is a public company which proposes to purchase
independent motorcycle dealerships that are traditionally held by private
owners. The Company's knows of no other publicly traded company that conducts
business in acquiring and/or consolidating the retail motorcycle market. While
the vast majority of motorcycle dealers are single store operations that are
family owned style dealership, there are several privately-owned dealerships
6
<PAGE> 17
that own multiple retail locations and seek to acquire additional locations.
Increased competition for acquisition candidates may increase purchase prices
for acquisitions to levels beyond the Company's financial capability or to
levels that would not result in the desired returns.
V-Twin's competitive position within the industry will be largely determined by
its ability to offer competitive motorcycle brands and models, and its ability
to offer value and service to its customers, both in the factory replacement
parts retail sector and in the service sector.
DISTRIBUTION
The majority of the Virginia entity's motorcycles were purchased and shipped
directly to its stores from their franchise manufacturers. In addition to
motorcycles, the Virginia entity purchases for resale after market parts and
accessories, such as side cars, wearing apparel, helmets, saddlebags, custom
exhausts, seats, handle bars, light bars, sissy bars, and touring luggage.
The Virginia entity operates pursuant to franchise agreements between each
motorcycle manufacturer or their authorized distributor. The Virginia entity is
significantly dependent on its relationship with such manufacturers for
distribution (and subsequent sales) of motorcycles and related products. The
manufacturers control many aspects of a dealer's business, as described in the
above section entitled "MOTORCYCLE MANUFACTURERS' CONTROL OVER DEALERS".
OPERATIONS
Many phases of the Virginia entity's operations are subject to influences
outside its control. Any singular factor, or combination of factors, could
materially affect its results. These factors include: the cost of goods,
competitive pressures, inflation, consumer debt levels, currency exchange
fluctuations, trade restrictions, changes in tariff and freight rates, interest
rate fluctuations and other capital market conditions.
Forward-looking statements that are made, or others make on its behalf, are
based on knowledge of the Company's business and the environment in which it
operates. However, because of the factors listed herein, actual results may
differ from those in the forward-looking statements. Consequently, all of the
forward-looking statements made are qualified by these and other cautionary
statements. The Company can make no assurance that the actual results or
developments it anticipates will be realized or, even if substantially realized,
that they will have the expected consequences to or effects on the Company or
its business or operations.
SEASONALITY
The Virginia entity will experience significant seasonal fluctuations in
motorcycle sales. Summer sales are generally twice as great as winter sales.
Weather conditions, specifically a harsh and long winter season, is likely to
adversely affect sales.
7
<PAGE> 18
GOVERNMENT REGULATION
Motorcycle sales are subject to certain government regulations. Motorcycles are
subject to the emissions and noise standards of the U.S. Environmental
Protection Agency and the more stringent emissions standards of various State
agencies. Motorcycles are also subject to the National Traffic and Motor Vehicle
Safety Act and the rules promulgated thereunder by the National Highway Traffic
Safety Administration. Federal, state and local authorities have adopted various
standards relating to air, water, helmet rules and noise pollution.
Additionally, the Federal Trade Commission applies regulations over franchised
businesses and dealerships. Any of these regulations may affect the Company's
operations as well as those of the motorcycle manufacturers. The Virginia
entity's facilities comply with all such regulations and standards, and that
current production levels of motorcycles will continue in line with the
increasing interest in motorcycles, ATVs and personal watercraft. Finally, the
Virginia entity is subject to the laws of Department of Motor Vehicle for the
Commonwealth of Virginia regarding motorcycle dealerships.
EMPLOYEES
As of September 30, 1999, the Company itself had no full-time employees. The
Holding Company anticipates adding home office supervisory, marketing and
administrative staff as the Company furthers its business. The Virginia entity
had approximately 30 employees in sales, service and administration, and the
Virginia entity provides those employees with health insurance. The Virginia
entity is not subject to any collective bargaining agreements.
CUSTOMER BASE
The Virginia entity is not dependent on any one major or any few select
customers. The Virginia entity's sales are the result of comprehensive
advertising campaigns, referrals and re-sales to old customers. The Virginia
entity enjoys the benefit of its customers who have purchased various items from
the previous owner for the past 27 years.
RESEARCH AND DEVELOPMENT
The Company has conducted specific research required in connection with the
acquisition of independent motorcycle dealerships. Research and development is
limited to a study of the retail motorcycle industry, and finding, evaluating
and negotiating the purchase of independent motorcycle dealerships to be
acquired. Research and development is a critical factor to the Company's
success. Sound business decisions in finding and closing the purchase of
acquisitions in the unconsolidated motorcycle dealership market will lead to
success for V-Twin and its shareholders.
GROWTH STRATEGY
The Company intends to acquire independent motorcycle dealerships throughout the
United States. The Company intends to initially acquire several dealerships that
will serve as regional bases of operations. The Company seeks to acquire
dealerships that have superior operating and financial managers and benefit from
their market knowledge, customer base and local reputation. By acquiring
additional dealerships the Company will increase its total consolidated sales
8
<PAGE> 19
and profits. These acquisitions should produce opportunities for additional
operating efficiencies, promote increased name recognition and provide the
Company's affiliates and itself with better opportunities for repeat and
referral business.
Once an acquisition or asset purchase has been completed, the Company intends to
review and potentially reorganize business operations, corporate infrastructure
and systems, and financial controls. Unforeseen expenses, difficulties, and
delays frequently encountered in connection with rapid expansion through
acquisitions could inhibit the Company's growth and negatively impact
profitability.
While V-Twin feels that certain segments of the motorcycle industry may be
available for consolidation, there are several factors which are inherently
problematic in acquiring independent motorcycle dealerships. Some of these
inherent problems are the fact that, typically, motorcycle dealerships have
substandard accounting practices and controls, and are typically not audited.
V-Twin, as a proposed consolidator of independent dealerships, will sustain such
problems and expenses as it conducts its assets purchases and/or acquisitions to
make such new affiliates and/or subsidiaries able to comply with standard
accounting practices.
The Company can make no assurance that suitable acquisition candidates will be
identified, that acquisitions of such candidates will be consummated, or that
the operations of any acquired businesses will be successfully integrated into
the Company's operations and managed profitably without substantial costs,
delays, or other operational or financial difficulties.
ANTI-TAKEOVER EFFECT OF ARTICLES AND BYLAW PROVISIONS
The Company's Articles of Incorporation provide that up to 50,000,000 shares of
common stock and 2,000,000 shares of preferred stock may be issued by the
Company from time to time in one or more series. On November 27, 1998, the
Board, authorized by the shareholders, merged these classes into one unitary
class with one vote per share.
V-Twin's Articles of Incorporation authorize the Board of Directors with various
rights, including the rights to (i) determine the rights, preferences,
privileges and restrictions granted to and imposed upon any unissued series of
preferred stock; (ii) fix the number of shares of any series of preferred stock
and the designation of any such series, without any vote or action by the
Company's stockholders; (iii) authorize and issue preferred stock with voting or
conversion rights that could adversely affect the voting power or other rights
of the holders of Common Stock; (iv) issue preferred stock that could have the
effect of delaying, deferring or preventing a change in control of the Company;
and (v) fix the number of directors in the Bylaws with no minimum or maximum
number of directors required. The effect of these provisions may be to delay or
prevent a tender offer or takeover attempt that a stockholder might consider to
be in his best interest, including attempts that might result in a premium over
the market price for the shares held by the stockholders.
9
<PAGE> 20
CHANGES IN CONSUMER SPENDING, ECONOMIC CONDITIONS OR TAX LAWS
The Virginia entity's operations depend upon a number of factors relating to or
affecting consumer spending for discretionary goods such as motorcycles. The
Virginia entity's operations may be adversely affected by economic developments
that reduce consumer spending in its markets. In an economic downturn, consumer
discretionary spending levels generally decline. Rising interest rates could
have a negative impact on consumers' ability or willingness to finance
motorcycle purchases. Local influences, such as corporate downsizing and
military base closings, could adversely affect the Company's operations in
certain markets. Changes in federal and state tax laws, such as an imposition of
luxury taxes on leisure time products, also could influence consumers' decisions
to purchase products offered by the Virginia entity. These factors could
adversely affect the ability of Cycle Sport or future affiliates and/or
subsidiaries to sell its products. There can be no assurance that the Company
could maintain its profitability during any such period of adverse economic
conditions or low consumer confidence could have a negative effect on the
Company's sales.
DILUTION THROUGH ISSUANCE OF STOCK
The Company's operating results may fluctuate substantially from quarter to
quarter due to the size, timing, and integration of any future acquisitions.
Consequently, operating results for any quarter may not be indicative of the
results that may be achieved for any subsequent quarter or for a full fiscal
year. These fluctuations could adversely affect the market price of the Common
Stock.
The Company's ability to grow by acquiring additional dealers will depend upon
several factors. These include (i) the availability of suitable acquisition
candidates at attractive purchase prices; (ii) its ability to compete
effectively for available acquisition opportunities; (iii) the availability of
funds or the market price of the Company's common stock; (iv) its ability to
obtain the requisite government licensing approvals; and (v) its ability to
obtain the necessary franchising agreements with manufacturers. Additionally,
one or more manufacturers may attempt to impose further restrictions on us in
connection with their approval of acquisitions.
FUTURE CAPITAL NEEDS; DEBT SERVICE REQUIREMENTS; POSSIBLE DILUTION THROUGH
ISSUANCE OF STOCK
The Company's future capital requirements will depend upon the size, timing, and
structure of future acquisitions and its working capital and general corporate
needs. To the extent that future acquisitions are wholly are partially financed
through common stock or securities convertible into or exercisable into common
stock, the voting power of existing stockholders will be diluted and earnings
per share could be reduced. The extent to which the Company will be able or
willing to use common stock for acquisitions will depend on the market value of
V-Twin's common stock from time to time. It will also depend on the willingness
of potential sellers of dealerships to accept common stock as full or partial
consideration. The Company's growth could be materially limited if the Company
is unable to use V-Twin's common stock as consideration in acquisitions, to
generate cash from operations, or to obtain additional debt or equity financing.
10
<PAGE> 21
Any borrowings made to finance future acquisitions or for operations could make
the Company more vulnerable to a downturn in its operating results, a downturn
in economic conditions, or increases in interest rates on borrowings that are
subject to interest rate fluctuations. If the Virginia entity's cash flow from
operations is insufficient to meet its debt service requirements, the Company
could be required to sell additional equity securities, refinance its
obligations, or dispose of assets in order to meet its debt service
requirements.
Additionally, it is likely that the Virginia entity and future affiliates must
comply with financial and operational covenants of their current or future
credit arrangements. These covenants are likely to include limitations on both
capital expenditures and increases in indebtedness.
There can be no assurance that such financing will be available if and when
needed or will be available on terms acceptable to V-Twin, the Virginia entity
or future affiliates and/or subsidiaries. The failure to obtain sufficient
financing on favorable terms and conditions could have a material adverse effect
on the Company's growth prospects and its business, financial condition, and
results of operations.
YEAR 2000 COMPLIANCE
V-Twin has determined that Year 2000 issues will not have a material effect on
its business. V-Twin's computer system comprises one stand-alone computer
operating Windows NT as an operating system. Embedded technology and
microcontrollers are not a part of the Company's operations. The Company, by
itself, is currently Year 2000 compliant.
Given the worldwide effect of Year 2000 problems, it is likely that some
disruption in relationship with vendors, suppliers and customers will occur,
even if such entities are Year 2000 compliant. At present, given the ongoing
nature of its assessment, V-Twin does not feel that the Year 2000 problem will
be material to business, results of operations and financial condition.
The Virginia entity is dependent upon its point-of-sale ("POS") software and
began the remediation process for Y2K in June, 1999 by upgrading its POS system
and accounting software to which it interfaces, namely Comptron and RealWorld,
respectively. It anticipates installing the new software and hardware upgrades
provided by these vendors by early December, 1999.
The Virginia entity has several third parties whose failure to be Y2K compliant
would be disruptive. These third parties include motorcycle manufacturers,
shipping companies, retail finance companies and wholesale finance companies.
Although failure of these third parties to be compliant would be disruptive, it
would not have a material adverse financial impact on the Virginia entity. At
worst, such a failure would temporarily lower service levels until compliance
was achieved, and even if all of its systems fail in the Year 2000 for any
reason, the Company would be able to conduct "business as usual" manually,
without any hindrance whatsoever.
11
<PAGE> 22
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are, at present, no legal proceedings in which the Company is involved,
either as plaintiff or defendant.
ITEM 2. CHANGES IN SECURITIES
At the Company's annual meeting on August 31, 1998, the shareholders agreed to
authorize the Board of Directors to, within their discretion, abolish the
existence of the existing two classes of stock. The Board of Directors
instituted this change at a Board meeting in November, 1998. Also, a one for
three (1:3) forward split in the common stock of the Company was authorized by
the shareholders of the corporation at the annual meeting, and this forward
split, as authorized by the shareholders, could be instituted by the Board of
Directors at its discretion, which was also done at a Board meeting in November,
1998.
The rights evidenced by any class of registered securities have not been
materially limited or qualified by the issuance or modification of any other
class of securities.
Information regarding the sales of equity securities to private accredited
investors under the 4(2) exemption can be found in the Form 10-KSB filed
December 2, 1999 at page 4 and in the Notes to Financial Statements thereto
under paragraph 14 "Subsequent Events," and in this filing under footnote 9 on
page F-9. No underwriter was utilized in that transaction.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Matters were submitted to a vote of security holders during the period covered
by this report, through the solicitation of an information statement. This
information statement is incorporated by reference in the Form 10-KSB filed
December 2, 1999 as Exhibit 99.11.
The Company's annual meeting occurred on August 31, 1999. All Directors
continued their service on the Board of Directors. The Registrant did not
solicit proxies. This Board of Directors was previously reported to the
Commission and was re-elected in its entirety. The shareholders at the meeting
also confirmed the Board's decision to utilize the services of Kaufman Davis, PC
for the audit for the period of inception through June 30, 1999.
ITEM 5. OTHER INFORMATION
Not applicable.
12
<PAGE> 23
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS. The following exhibits are filed or incorporated by reference
as part of this report.
(2) Plan of acquisition, reorganization, arrangement, liquidation or
succession.(1)
(3) Articles of Incorporation and by-laws.(1)
(10) Material contracts.(1)
(11) Statement re computation of per share earnings. Attached hereto.
(21) Subsidiaries/Affiliates of the Registrant. Attached hereto.
(27) Financial data schedule. Attached hereto.
(99) Additional Exhibits.(1)
(99.1) American Solid Fuel, Inc. S-18 effective notice dated
August 2, 1989 and Prospectus.(1)
(99.2) "The Motorcycle Industry" by Mike Paschke.(1)
(99.3) Reuters News Release-"Harley Rides Out US Motorcycle Boom".(1)
(99.4) Antitrust Law and Economic Review by Charles E. Mueller.(1)
(99.5) Cycle News - "In the Wind".(1)
(99.6) 1998 Yamaha Industry Comparison Data.(1)
(99.7) V-Twin control shareholders letters re: additional paid in
capital.(1)
(99.8) Form D - Notice of Sale of Securities Pursuant to
Regulation D, Section 4(6), and/or Uniform Limited
Offering Exemption.(1)
(99.9) Trust Agreement.(2)
(99.10) Motorcycle Industry Council 1998 Annual Report (selected
pages). (2)
(99.11) Information Statement.(2)
(1) Previously filed as an exhibit to V-Twin's Form 10-SB and amendments
thereto filed on November 12, 1998 and February 19, 1999.
(2) Previously filed as an exhibit to V-Twin's Form 10-KSB filed on
December 2, 1999.
(B) On September 8, 1999, a Form 8-K was filed with regard to the retention of
Kaufman Davis, PC as the independent accountant for the period of inception
13
<PAGE> 24
through June 30, 1999 and the resignation of the previously engaged
independent accountant.
SIGNATURE
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
December 9, 1999
V-Twin Acquisitions, Inc.
/s/ Richard Paone, Chief Financial Officer
- ------------------------------------------
Richard Paone, Chief Financial Officer
14
<PAGE> 1
EXHIBIT 11
V-TWIN ACQUISITIONS, INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Three Months
Ended Sept. 30, Sept. 30,
1999 1998
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Shares Outstanding 3,700,000 3,000,000
Weighted average shares outstanding 3,650,000 3,000,000
Net Income (Loss) $ (91,892) $ (10,000)
Total Net Income (Loss) Available for Common Stockholders' $ (91,892) $ --
=========== ===========
Basic and Diluted Earnings (Loss) Per Share:
Earnings (Loss) Per Share $ (0.02) $ 0.00
----------- -----------
</TABLE>
<PAGE> 1
EXHIBIT 21
(21) Subsidiaries/Affiliates of the Registrant.
V-Twin Acquisitions, Inc. of Virginia - Affiliate
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 156,400
<SECURITIES> 0
<RECEIVABLES> 22,969
<ALLOWANCES> 53,158
<INVENTORY> 1,074,112
<CURRENT-ASSETS> 1,423,150
<PP&E> 65,059
<DEPRECIATION> 2,690
<TOTAL-ASSETS> 1,488,209
<CURRENT-LIABILITIES> 1,054,614
<BONDS> 0
0
0
<COMMON> 3,700
<OTHER-SE> 734,900
<TOTAL-LIABILITY-AND-EQUITY> 1,488,209
<SALES> 1,410,277
<TOTAL-REVENUES> 1,505,749
<CGS> 1,094,195
<TOTAL-COSTS> 489,359
<OTHER-EXPENSES> 14,087
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (91,892)
<INCOME-TAX> 0
<INCOME-CONTINUING> (91,892)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (91,892)
<EPS-BASIC> (.02)
<EPS-DILUTED> (.02)
</TABLE>
