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 [FEE REQUIRED]
For the six months ended June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] 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
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 June 30, 1998
<PAGE>
Vector Aeromotive Corporation
Condensed Balance Sheets
(Unaudited)
June 30, June 30,
1998 1997
Assets
Current Assets
Cash and cash equivalents $ 351 $ 7,382
Inventories 543,837 556,612
Prepaid Expenses 2,251 -
Accounts and other receivables 67,066 -
Total current assets 613,505 563,994
Property & Equipment 101,124 115,952
Other Assets 1,850 1,850
Total assets $ 716,479 $ 681,796
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable $ 585,977 $ 728,218
Accrued expenses 173,442 198,994
Other payables 357,191 315 138
Loans payable to related parties - 423,407
Customer deposits 50,000 25,000
Total current liabilities 1,166,610 1,690,757
Long term liabilities
Loans payable to related parties 1,589,301 1,199,130
Notes payable 250,000 250,000
Total long term liabilities 1,839,301 1,449,130
Total liabilities 3,005,911 3,139,887
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 53,639,599 in 1997
Capital in excess of par value 36,786,109 36,786,109
Accumulated deficit (39,611,936) (36,780,595)
Total stockholders' equity (2,289,433) (2,458,091)
Total liabilities and
stockholders' equity $ 716,479 $ 681,796
See accompanying notes to unaudited condensed financial statements.
<PAGE>
Vector Aeromotive Corporation
Condensed Statements of Operations
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1998 1997 1998 1997
Sales $ 152,300 $ - $ 443,903 $ -
Cost of sales 125,349 - 326,687 -
Gross profit (loss) 26,951 - 117,216 -
Costs and expenses
Marketing 31,342 - 34,131 -
Race program (3,914) - (1,776) -
Research & Developemnt 8,484 - 16,880 -
Quality & Warranty 5,000 - 15,000 -
General and administrative 69,119 173,972 123,810 423,515
Total costs and expenses 110,031 173 972 188,405 423,515
Operating profit (loss) (83,080) (173,972) (71,189) (423,515)
Other income (expense)
Interest and other income 40,149 - 40,149 -
Interest expense (18,122) (9,352) (26,065) (18,705)
Other expense (3,440) - (3,440) -
Net profit (loss) (64,493) (183,325) (60,545) (442,220)
Net profit (loss) per share ($0.00) ($0.00) ($0.00) ($0.01)
Weighted average common shares
outstanding 53,639,599 53,639,599 53,639,599 53,639,599
See accompanying notes to unaudited condensed financial statements.
<PAGE>
Vector Aeromotive Corporation
Condensed Statement of Shareholders' Equity
(Unaudited)
Common Stock Capital in Excess Accumulated
Shares Amount Of Par Value Deficit Total
Balance,
December 31, 1997 53,639,599 $536,396 $36,786,109 $(39,551,392) $(2,228,887)
Net Profit (loss) (60,545) (60,545)
Balance,
June 30, 1998 53,639,599 $536,396 $36,786,109 $(39,611,936) $(2,289,433)
See accompanying notes to unaudited condensed financial statements.
<PAGE>
Vector Aeromotive Corporation
Condensed Statements of Operations
(Unaudited)
Six Months Six Months
Ended Ended
June 30, 1998 June 30, 1997
Cash flows from operating activities:
Net profit (loss) $ (60,545) $ (442,220)
Adjustments to reconcile net profit
(loss) to net cash used in operating
activities
Depreciation and amortization 11,026 8,046
(Increase) decrease in
Accounts receivable (67,076) 155,000
Inventories (104,180) -
Prepaid expenses and other assets (2,251) 15,628
Increase (decrease) in
Accounts payable (91,928) 18,007
Accrued expenses (40,241) (1,020)
Other payables 49,165 13,646
Customer deposits 25,000 -
Net cash from operating activities (281,030) (232,913)
Cash flows used in investing activities:
Acquisition of property and equipment (4,246) -
Net cash used in investing activities (4,246) -
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 285,627 206,430
Net cash from financing activities 285,627 206,430
Net increase (decrease) in cash and
cash equivalents 351 (26,483)
Cash and cash equivalents, beginning
of period - 33,864
Cash and cash equivalents, end of
period 351 7,381
See accompanying notes to unaudited condensed financial statements.
<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 pri nciples for inte
rim financial information and with the instructions t o Form 10-Q and Article 10
of the Regulation S- X. Accordi ngly, they do not include all of the information
and foo tnot es 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 six months ended June
30, 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:
June 30, June 30,
1998 1997
Raw Material $ 219,622 $ 223,666
Work in progress 221,887 48,666
Finished Goods 102,328 284,280
Total $ 543,837 $ 556,612
3. Payables to Related Parties
As of June 30, 1998, the Company owed a total of $1,589,301 to related
parties:
Automobili Lamborghini S.p.A. $424,123
Automobili Lamborghini U.S.A., Inc. 568,577
American Dream International Limited 596,601
4. Notes Payable to Unrelated Parties
As of June 30, 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>
PART 1 - FINANCIAL INFORMATION
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
General
In November, 1996, the Company ceased operations due to a 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, a
corporation organized in the Bahamas. Under the Loan Agreement cash is funded on
a discretionary basis only. The Company's Board of Directors and management also
changed at the 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 June 30, 1998, the Company had cash and cash equivalents
of $351, compared to $-0- at December 31, 1997; however, the Company had
accounts receivable of $67,066, compared to $-0- at 1997 year end. The Company
sold one M-12 automobile, which generated cash flow during the quarter of
$160,000. The sale of the automobile also resulted in an additional short-term
tax liability of $7,700. Finally the Company increased the balance of its loan
from American Dream in the second quarter from $404,896 at March 31, 1998 to
$596,601.
The amount of Company's liabilities still exceeds its assets by $2,289,433.
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 for the quarter ended June 30, 1998, of $160,000,
which resulted from the sale of one M-12 automobile. After expenses associated
directly with the production of the automobile and general operating expenses of
$110,031, the Company had a net loss of $64,493. This compares to a $183,325
loss for the same period in 1997 during which time the Company was not in
production. For the period ended June 30, 1998, the Company had a net loss of
$60,545 compared to a net loss of $442,220 loss for the comparable period of
1997. In spite of the second quarter loss, the management of the Company is
encouraged by the completion of two M-12 automobiles one of which was sold in
the second quarter, the other sold in the third quarter.
<PAGE>
PART 2 - OTHER INFORMATION
ITEM 6 EXHIBITS 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
Date: September 21, 1998 By: /s/ Timothy J Enright
Timothy J Enright,
President
Date: September 21, 1998 By: /s/ Thomas Hallquest
Thomas Hallquest
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1998
<PERIOD-START> APR-01-1998 JAN-01-1998
<PERIOD-END> JUN-30-1998 JUN-30-1998
<CASH> 351 351
<SECURITIES> 0 0
<RECEIVABLES> 67,066 67,066
<ALLOWANCES> 0 0
<INVENTORY> 543,837 543,837
<CURRENT-ASSETS> 613,505 613,505
<PP&E> 465,664 465,664
<DEPRECIATION> (364,540) (364,540)
<TOTAL-ASSETS> 716,479 716,479
<CURRENT-LIABILITIES> 1,166,610 1,166,610
<BONDS> 0 0
0 0
0 0
<COMMON> 536,396 536,396
<OTHER-SE> (2,825,828) (2,825,828)
<TOTAL-LIABILITY-AND-EQUITY> 716,479 716,479
<SALES> 152,300 443,903
<TOTAL-REVENUES> 152,300 443,903
<CGS> 125,349 326,687
<TOTAL-COSTS> 235,381 515,092
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 18,122 26,065
<INCOME-PRETAX> (64,493) (60,545)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (64,493) (60,545)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (64,493) (60,545)
<EPS-PRIMARY> (.00) (.00)
<EPS-DILUTED> (.00) (.00)
</TABLE>
