Exhibit 99.1
AEC, I, INC.
INTERIM FINANCIAL STATEMENTS
(Stated in United States Dollars)
March 31, 2003
AEC, I, INC.
INDEX
MARCH 31, 2003
PAGE
REVIEW ENGAGEMENT REPORT 1
INTERIM FINANCIAL STATEMENTS
Interim Balance Sheet - Statement I 2
Interim Statement of Shareholder's Deficiency and 3
Comprehensive Loss - Statement II
Interim Statement of Operations - Statement III 4
NOTES TO INTERIM FINANCIAL STATEMENTS 5 - 8
AUDITORS' REPORT
TO THE BOARD OF DIRECTORS OF
AEC, I, INC.
We have reviewed the accompanying interim balance sheet of AEC, I, INC., as at
March 31, 2003 and the interim statements of shareholders' deficiency and
comprehensive loss and operations for the nine months then ended. Our review was
made in accordance with United States generally accepted standards for review
engagements and accordingly consisted primarily of enquiry, analytical
procedures and discussions related to information supplied to us by the company.
A review does not constitute an audit, and consequently we do not express an
audit opinion on these interim financial statements.
Based on our review, nothing has come to our attention that causes us to believe
that these interim financial statements are not, in all material respects, in
accordance with United States generally accepted accounting principles.
NORTH YORK, ONTARIO
JULY 30, 2003 CHARTERED ACCOUNTANTS
Page 1
AEC, I, INC. STATEMENT I
INTERIM BALANCE SHEET
As at March 31, 2003
(Unaudited)
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(Stated in United States dollars) MARCH 31 JUNE 30
2003 2002
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ASSETS
CURRENT
Cash $ 3,385 $ 174
Due from related party (note 2) 9,358 --
Patents and technology (note 1) 62,863 62,863
Sundry 812 --
- --------------------------------------------------------------------------------
$ 76,418 $ 63,037
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LIABILITIES
CURRENT
Accounts payable and accrued liabilities $ 6,661 $ --
Due to related party -- 252
Due to shareholder (note 3) 56,152 --
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62,813 252
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SHAREHOLDER'S DEFICIENCY
CAPITAL STOCK (note 4) 67,863 62,863
(DEFICIT) - Statement II (54,258) (78)
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13,605 62,785
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$ 76,418 $ 63,037
================================================================================
ON BEHALF OF THE BOARD:
_______________________________ DIRECTOR
_______________________________ DIRECTOR
{SEE ACCOMPANYING NOTES.} Page 2
AEC, I, INC. STATEMENT II
INTERIM STATEMENT OF SHAREHOLDER'S DEFICIENCY AND COMPREHENSIVE LOSS
For the nine month period ended March 31, 2003
(Unaudited)
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(Stated in United States dollars)
COMMON SHARES DEFICIT TOTAL
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BALANCE, JULY 1, 2001
ISSUANCE OF COMMON SHARES $ 62,863 $ -- $ 62,863
NET LOSS FOR THE PERIOD -- (78) (78)
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BALANCE JUNE 30, 2002 62,863 (78) 62,789
ISSUANCE OF COMMON SHARES 5,000 -- 5,000
FOR SERVICE
NET LOSS FOR THE PERIOD -- (54,180) 54,180
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BALANCE, MARCH 31, 2003 $ 67,863 $ (54,258) $ 13,609
================================================================================
{SEE ACCOMPANYING NOTES.} Page 3
AEC, I, INC. STATEMENT II
INTERIM STATEMENT OF OPERATIONS
For the nine month period ended March 31, 2003
(Unaudited)
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(Stated in United States dollars) MARCH 31 JUNE 30
2003 2002
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REVENUE $ -- $ --
EXPENSES
Bank Charges 181 78
Office and General 8,320 --
Professional fees 45,536 --
Amortization 143 --
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(54,180) (78)
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NET (LOSS) FOR THE PERIOD $ (54,180) $ (78)
================================================================================
BASIC NET LOSS PER SHARE $ 0 $ 0
WEIGHTED AVERAGE NUMBER 104,870,715 67,583,744
OF COMMON SHARES OUTSTANDING
{SEE ACCOMPANYING NOTES.} Page 4
AEC, I, INC.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
March 31, 2003
(Unaudited)
- --------------------------------------------------------------------------------
(Stated in United States dollars)
NATURE OF BUSINESS
- ------------------
The Company was incorporated on March 22, 2000, in Wilmington, Delaware, U.S.A.
and commenced active business operations on October 26, 2001. The company
changed its name from Alternative Energy Corporation to AEC, I, INC. on March 4,
2003.
1. ACCOUNTING POLICIES
-------------------
FOREIGN CURRENCY TRANSLATION
The Company's reporting currency is the United States dollar because the
Company is a United States corporation and it is trading publicly in the
United States. The statements of operations are translated into United
States dollars using the average exchange rate for the year. The balance
sheets are translated into United States dollars using the year-end
exchange rate.
PATENTS AND TECHNOLOGY
Patents and technology are stated at cost. The company is currently not
amortizing these assets.
ACCOUNTING ESTIMATES
The preparation of financial statements in conformity with the United
States generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results may differ from these estimates.
2. DUE FROM RELATED PARTY
----------------------
The amounts due from Environmental Products Group Inc. are non-interest
bearing, unsecured, with no fixed terms of repayment.
3. DUE TO SHAREHOLDER
------------------
These amounts due to a related party, who is part of the management team
and a significant shareholder, are non-interest bearing, unsecured, and
due upon demand.
Page 5
AEC, I, INC.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
March 31, 2003
(Unaudited)
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(Stated in United States dollars)
4. CAPITAL STOCK
-------------
The number of outstanding shares of the Company as at March 31, 2003 is
computed as follows:
Outstanding shares as at June 30, 2002 99,870,715
Shares issued in exchange for services 5,000,000
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BALANCE AS AT MARCH 31, 2003 104,870,715
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The Company's authorized stock consists of 150,000,000 shares of common
stock with a par value of $0.001.
5. STATEMENT OF CASH FLOWS
-----------------------
A statement of cash flows has not been presented as it would not provide
any additional meaningful information.
6. FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES
--------------------------------------------------------
FINANCIAL INSTRUMENTS
The following table details the carrying amounts and estimated fair
values of the Company's financial instruments at March 31, 2003 and June
30, 2002. The estimated fair value of a financial instrument is the
amount at which the instrument could be exchanged in a current
transaction between willing parties, other than a forced or liquidation
sale. These estimates, although based on the relevant market information
about the financial instrument, are subjective in nature and involve
uncertainties and matters of significant judgement and, therefore,
cannot be determined with precision.
Changes in assumptions could significantly affect the estimates.
Page 6
AEC, I, INC.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
March 31, 2003
(Unaudited)
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(Stated in United States dollars) CARRYING AMOUNTS FAIR VALUE
2003 2003
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FINANCIAL ASSETS
Cash $ 3,385 $ 3,385
Due from related party 9,358 9,358
Patents and technology 62,863 62,863
Capital assets 812 812
FINANCIAL LIABILITIES
Accounts payable and accrued liabilities $ 6,661 $ 6,661
Due to shareholders 56,152 56,152
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CARRYING AMOUNTS FAIR VALUE
2002 2002
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FINANCIAL ASSETS
Cash $ 174 $ 174
Patents and technology 62,863 62,863
FINANCIAL LIABILITIES
Due to related party $ 252 $ 252
The following methods and assumptions were used to estimate the fair value of
each class of financial instruments.
(i) BANK ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
The carrying amounts approximate fair value because of the short term to
maturity of these instruments.
(ii) CAPITAL ASSETS, PATENTS AND TECHNOLOGY
The carrying amounts approximate fair value because of the sale of the
patent and technology at the beginning of the next fiscal period.
Page 7
AEC, I, INC.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
March 31, 2003
(Unaudited)
- --------------------------------------------------------------------------------
(Stated in United States dollars)
7. BASIC NET LOSS PER SHARES
-------------------------
Basic net loss per share figures are calculated using the weighted
average number of common shares outstanding computed on a daily basis.
8. SUBSEQUENT EVENTS
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On April 1, 2003, the company sold its Patents and Technology to COI
Solutions Inc. for a controlling interest in COI Solutions Inc.
Page 8