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 nine months ended September 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
<PAGE>
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;
53,609,387 shares outstanding as of September 30, 1998
<PAGE>
Vector Aeromotive Corporation
Condensed Balance Sheets
(Unaudited)
September 30, December 31,
1998 1997
Assets
Current Assets
Cash and cash equivalents $ 606 $ 783
Inventories 536,630 1,409,917
Prepaid Expenses 1,566 3,620
Accounts and other receivables 61,566 14,745
Total current assets 600,369 1,429,066
Property & Equipment 93,111 768,688
Other Assets 1,850 85,744
Total assets $ 695,330 $ 2,283,498
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable $ 553,843 $ 1,210,519
Accrued expenses 182,605 257,446
Other payables 377,647 -
Loans payable to related parties - 487,024
Customer deposits 25,000 25,000
Total current liabilities 1,139,095 2,189,988
Long term liabilities
Loans payable to related parties 1,621,836 -
Notes payable 250,000 -
Total long term liabilities 1,871,836 -
Total liabilities 3,010,932 2,189,988
Stockholders' equity
Common stock, par value $.01 per $ 536,395 $ 536,395
share, 600,000,000 shares authorized;
issued and outstanding: 53,609,387
in 1998 and 53,609,387 in 1997
Capital in excess of par value 36,786,109 36,786,109
Accumulated deficit (39,638,106) (37,228,994)
Total stockholders' equity (2,315,602) 93,510
Total liabilities and
stockholders' equity $ 695,330 $ 2,283,498
See accompanying notes to unaudited condensed financial statements.
<PAGE>
Vector Aeromotive Corporation
Condensed Statements of Operations
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
Sales $ 304,600 $ 118,500 $ 748,503 $ 118,500
Cost of sales 226,520 84,160 469,762 84,160
Gross profit (loss) 78,080 34,340 278,741 34,340
Costs and expenses
Manufacturing overhead 50,585 - 147,254 -
General and administrative 65,981 257,232 223,922 680,747
Research and development 936 - 18,177 -
Total costs and expenses 117,503 257,232 389,353 680,747
Operating profit (loss) (39,423) (222,892) (110,612) (646,407)
Other income (expense)
Interest and other income 23,051 500,000 63,200 500,000
Interest expense (5,056) (12,398) (31,121) (31,102)
Legal settlements (4,741) (8,181)
Net profit (loss) (26,169) 264,710 (86,715) (177,509)
Net profit (loss) per share ($0.0005) ($0.0049) ($0.0016) ($0.0034)
Weighted average common shares
outstanding 53,609,387 53,609,387 53,609,387 52,559,514
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 $(39,551,391) $(2,228,886)
Net Profit (loss) (86,715) (86,715)
Balance,
Sept 30,1998 53,639,599 $536,396 $36,786,109 $(39,515,886) $(2,315,601)
See accompanying notes to unaudited condensed financial statements.
<PAGE>
Vector Aeromotive Corporation
Condensed Statements of Cash Flows
(Unaudited)
Nine Months Nine Months
Ended Ended
September 30, 1998 September 30, 1997
Cash flows from operating activities:
Net profit (loss) $ (86,715) $ (177,510)
Adjustments to reconcile net profit
(loss) to net cash used in operating
activities
Depreciation and amortization 19,049 12,070
(Increase) decrease in
Accounts receivable (61,566) 155,000
Inventories (96,993) 70,338
Prepaid expenses and other assets 1,566 15,628
Increase (decrease) in
Accounts payable (124,062) (9,415)
Accrued expenses 41,400 13,185
Other payables (2,857) (14,557)
Customer deposits - -
Net cash from operating activities (313,310) 64,739
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:
Repayment of loan payable to
Related party - (423,407)
Loan payable American Dream Int'l 318,162 324,789
Net cash from financing activities 318,162 (98,618)
Net increase (decrease) in cash and
cash equivalents 606 (33,879)
Cash and cash equivalents, beginning
of period - 33,864
Cash and cash equivalents, end of
period (14) (15)
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 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 nine months ended September 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:
September 30, September 30,
1998 1997
Raw Material $ 186,355 $ 224,388
Work-in Progress 350,275 48,666
Finished Goods - 213,220
Total $ 536,630 $ 486,274
3. Payables to Related Parties
As of September 30, 1998, the Company owed a total of $424,123 to
Automobili Lamborghini S.p.A., $568,577 to Automobili Lamborghini U.S.A.,
Inc., and $629,136 to American Dream International Limited.
4. Notes Payable to Unrelated Parties
As of September 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 September 30, 1998, the Company had cash and cash
equivalents of $606, compared to $-0- at December 31, 1997; however, the Company
had accounts receivable of $14,834, compared to $-0- at 1997 year end. The
Company sold two M-12 automobiles, which generated cash flow during the quarter
of $320,000. 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 third quarter from $596,601 at June 30,
1998 to $629,136.
The amount of Company's liabilities still exceeds its assets by $2,315,602.
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.
<PAGE>
Results of Operations
The Company had revenues for the quarter ended September 30, 1998, of
$320,000, which resulted from the sale of two M-12 automobiles. After expenses
associated directly with the production of the automobile and general operating
expenses of $117,503, the Company had a net operating loss of $39,423 for the
quarter ended September 30, 1998. This compares to a $222,892 loss for the same
period in 1997 during which time the Company was not in production. For the nine
months ended September 30, 1998, the Company had a net loss of $86,715 compared
to a net loss of $177,509 loss for the comparable period of 1997. In spite of
the third quarter loss, the management of the Company is encouraged by the sale
of two M-12 automobiles and the in process production of two more M-12
automobiles.
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: December 31, 1998 By: /s/ Timothy J Enright
Timothy J Enright,
President
Date: December 31, 1998 By: /s/ Thomas Hallquest
Thomas Hallquest
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1998
<PERIOD-START> JUL-01-1998 JAN-01-1998
<PERIOD-END> SEP-30-1998 SEP-30-1998
<CASH> 606 606
<SECURITIES> 0 0
<RECEIVABLES> 61,566 61,566
<ALLOWANCES> 0 0
<INVENTORY> 536,630 536,630
<CURRENT-ASSETS> 600,369 600,369
<PP&E> 465,164 465,164
<DEPRECIATION> (372,054) (372,054)
<TOTAL-ASSETS> 695,330 695,330
<CURRENT-LIABILITIES> 1,139,095 1,139,095
<BONDS> 0 0
0 0
0 0
<COMMON> 536,396 536,396
<OTHER-SE> (2,851,997) (2,851,997)
<TOTAL-LIABILITY-AND-EQUITY> 695,330 695,330
<SALES> 304,600 748,503
<TOTAL-REVENUES> 304,600 748,503
<CGS> 226,520 469,762
<TOTAL-COSTS> 344,023 859,115
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 5,056 31,121
<INCOME-PRETAX> (26,169) (86,715)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (26,169) (86,715)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (26,169) (86,715)
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
