FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 for the
transition period from
to
Commission file number 0-17303
VECTOR AEROMOTIVE CORPORATION
(Exact name of registrant as specified in its charter)
NEVADA 33-0254334
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
975 MARTIN AVENUE
GREEN COVE SPRINGS, FLORIDA 32043
(Address of principal executive offices, including Zip Code)
Registrant's telephone number, including area code
(904) 529-0092
<PAGE>
Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes No X
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed
all documents and reports required to be filed by Sections
12, 13 or 15(d) of the Securities Exchange Act of 1934
subsequent to the distribution of securities under a plan
confirmed by a court.
Yes ______ No ______
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest
practicable date.
Common Stock, $.01 par value per share;
53,639,599 shares outstanding as of February 28, 1998
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
<TABLE>
Vector Aeromotive Corporation
Condensed Balance Sheets
(Unaudited)
<CAPTION>
March 31, December 31,
1998 1997
<S> <C> <C>
Assets
Current Assets
Cash and cash equivalents $ - $ -
Inventories 333,197 439,637
Prepaid Expenses 1,729 -
Accounts and other receivables 203,000 -
Total current assets 537,926 439,637
Property & Equipment 101,391 107,914
Other Assets 1,850 1,850
Total assets $ 641,167 $ 549,401
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable $ 653,269 $ 677,905
Accrued expenses 183,871 213,683
Other payables 331,369 308,026
Customer deposits 50,000 25,000
Total current liabilities 1,218,510 1,224,614
Long term liabilities
Loans payable to related parties 1,397,596 1,303,674
Notes payable 250,000 250,000
Total long term liabilities 1,647,596 1,553,674
Total liabilities 2,866,106 2,778,288
Stockholders' equity
Common stock, par value $.01 per $ 536,395 $ 536,395
share, 600,000,000 shares authorized;
issued and outstanding: 53,639,599
in 1998 and 53,609,387 in 1997
Capital in excess of par value 36,786,109 36,786,109
Accumulated deficit (39,547,443) (39,551,392)
Total stockholders' equity (2,224,939) (2,228,887)
Total liabilities and
stockholders' equity $ 641,167 $ 549,401
See accompanying notes to unaudited condensed financial statements.
<PAGE>
Vector Aeromotive Corporation
Condensed Statements of Operations
(Unaudited)
<CAPTION>
Three Months Three Months
Ended Ended
March 31, 1998 March 31, 1997
<S> <C> <C>
Sales $ 291,602 $ -
Cost of sales 201,337 -
Gross profit (loss) 90,265 -
Costs and expenses
Marketing 2,789 -
Race program 2,138 -
Research and development 8,757 -
Quality and Warranty 10,000 -
General and administrative 54,690 249,543
Total costs and expenses 78,374 249,543
Operating profit (loss) 11,891 (249,543)
Other income (expense)
Interest and other income - -
Interest expense (7,943) (9,352)
Net profit (loss) $ 3,948 $ (258,895)
Net profit (loss) per share $ (0.000) $ (0.005)
Weighted average common shares
outstanding 53,639,599 53,609,387
See accompanying notes to unaudited condensed financial statements.
<PAGE>
Vector Aeromotive Corporation
Condensed Statement of Shareholders' Equity
(Unaudited)
<CAPTION>
Common Stock Capital in Excess Accumulated
Shares Amount Of Par Value Deficit Total
<S> <C> <C> <C> <C> <C>
Balance,
December 31, 1997 53,639,599 $536,396 $36,786,109 $(39,551,392) $(2,228,887)
Net Profit (loss) 3,948 3,948
Balance,
March 31, 1998 53,639,599 $536,396 $36,786,109 $(39,547,443) $(2,224,939)
See accompanying notes to unaudited condensed financial statements.
<PAGE>
Vector Aeromotive Corporation
Condensed Statements of Cash Flows
(Unaudited)
<CAPTION>
Three Months Three Months
Ended Ended
March 31, 1998 March 31, 1997
<S> <C> <C>
Cash flows from operating activities:
Net profit (loss) $ 3,948 $ (258,895)
Adjustments to reconcile net profit
(loss) to net cash used in operating
activities
Depreciation and amortization 6,523 4,022
(Increase) decrease in
Accounts receivable (203,000) 155,000
Inventories 106,440 -
Prepaid expenses and other assets (1,729) -
Increase (decrease) in
Accounts payable (24,635) (31,807)
Accrued expenses (29,812) 9,600
Other payables 23,343 6,480
Customer deposits 25,000 -
Net cash from operating activities (93,922) 115,600)
Cash flows used in investing activities:
Acquisition of property and equipment - -
Net cash used in investing activities - -
Cash flows from financing activities:
Proceeds from issuance of common
stock and warrants - -
Proceeds from exercise of warrants - -
Repayment of loan payable to
Related party -
Loan payable American Dream Int'l 93,922 112,353
Net cash from financing activities 93,922 112,353
Net increase (decrease) in cash and
cash equivalents - (3,247)
Cash and cash equivalents, beginning
of period - 33,864
Cash and cash equivalents, end of
period - 30,617
See accompanying notes to unaudited condensed financial statements
</TABLE>
<PAGE>
Vector Aeromotive Corporation
Notes to Financial Statements
1. Basis of Presentation
The accompanying unaudited condensed financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and
Article 10 of the Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by
generally accepted accounting principles for complete
financial statements and should be read in conjunction with
Notes to Financial Statements contained in the Company's
Annual Report on Form 10-K for the year ended December 31,
1997. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered
necessary for a fair presentation have been included.
Operating results for the three months ended March 31, 1998
are not necessarily indicative of the results that may be
expected for the year ended December 31, 1998.
2. Inventories
The components of inventory consist of the following:
<TABLE>
March 31, March 31,
1998 1997
<S> <C> <C>
Raw Material $ 162,691 $ 223,666
Work-in Progress 170,506 48,666
Finished Goods - 284,280
Total $ 333,197 $ 556,612
</TABLE>
3. Payables to Related Parties
As of March 31, 1998, the Company owed a total of
$424,123 to Automobili Lamborghini S.p.A., $568,577 to
Automobili Lamborghini U.S.A., and $404,896 to American Dream
International Limited.
4. Notes Payable to Unrelated Parties
As of March 31, 1998, the Company had borrowed a total
of $250,000 uncollateralized, from an unrelated party
accruing interest at 9%. No principle or interest payments
have been made.
<PAGE>
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
General
In November, 1996, the Company ceased operations due to
lack of funds. At year-end 1996, the Company had cash and
cash equivalents of $33,864 and current liabilities of
2,902,824. In 1997, the Company entered into, among other
agreements, a Loan Agreement with American Dream
International Limited, formerly known as Tradelink
International Limited, a corporation organized in the
Bahamas. The loan under the Loan Agreement cash is funded on
a discretionary basis only. The Company's Board of Directors
and management also changed at that time. The operating
philosophy currently in place at the Company is one of
recommencing operations in a controlled manner with minimized
operating expenses and gradually resolving the burdens of
past due liabilities.
Liquidity and Capital Resources
At the quarter end March 31,998, the Company had cash
and cash equivalents of $-0-, which is the same as at
December 31, 1997; however, the Company had accounts
receivable of $203,000, compared to $-0- at 1997 year end.
The Company sold two M12 automobiles, which also generated
cash flow during the quarter of $100,000. The sale of the
automobiles also resulted in an additional short-term tax
liability of $15,400. Finally, the Company increased the
balance of its loan from American Dream in the first quarter
from $310,974 at 1997 year end to $404,896.
The amount of Company's liabilities still exceeds its
assets by $2,224,939. The Company's only source of capital
at the present time remains a loan from American Dream, which
is provided on a discretionary basis. There can be no
assurance that this financing source will be sufficient to
provide cash necessary for the Company to recommence
production in full, to pay existing commitments such as rent
or pay all or any significant portion of the existing
creditors of the Company. The Company currently has no other
commitment from others to provide additional capital, and
there can be no assurance that such funding will be available
if or when needed, or if available, that its terms will be
favorable or acceptable to the Company. Should the Company
be unable to obtain additional capital, when and if needed.,
it could be forced to either curtail operations or again
cease business activities altogether. The lack of liquidity
and capital resources continues to raise substantial doubt
about the Company's ability to continue as a going concern.
At the same time, the Company's sales of M12 automobiles and
participation in nationally televised races offers potential
for success for the Company's current plan of operations.
Results of Operations
The Company had revenues in the quarter ended March 30,
1998, of $291,601.50, which resulted from the sale of two M12
automobiles. After expenses associated directly with the
production of the automobiles and general operating expenses
of $78,374, the Company had net income of $3,948. Although
small, the management of the Company is encouraged by the
ability to show net income. Management of the Company
attributes the net income to the implementation of its
philosophy of gradual commencement of operations while
minimizing expenses. There can be no assurance that
automobiles will be sold in the future, and the results of
operations in the first quarter 1998 should not be taken as
the beginning of a trend in earnings.
<PAGE>
PART 2 - OTHER INFORMATION
ITEM 6 EXHIBTS AND REPORTS ON FORM 8-K
Exhibit 27 attached
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly
authorized.
VECTOR AEROMOTIVE CORPORATION
By: /s/ Enright
T. J. Enright,
President
Date: April 22, 1998
By: /S/ Lily Beter
Lily Beter,
Chief Financial Officer
Date: April 22, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-30-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 203,000
<ALLOWANCES> 0
<INVENTORY> 333,197
<CURRENT-ASSETS> 537,926
<PP&E> 461,418
<DEPRECIATION> (360,027)
<TOTAL-ASSETS> 641,167
<CURRENT-LIABILITIES> 1,218,510
<BONDS> 0
0
0
<COMMON> 536,396
<OTHER-SE> (2,761,334)
<TOTAL-LIABILITY-AND-EQUITY> 641,167
<SALES> 291,602
<TOTAL-REVENUES> 291,602
<CGS> 201,337
<TOTAL-COSTS> 279,711
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,943
<INCOME-PRETAX> 3,948
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,948
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,948
<EPS-PRIMARY> .000
<EPS-DILUTED> .000
</TABLE>
