UNITED STATES
SECURITIES EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
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[X] Quarterly Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended October 31, 1999
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AMAC, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-3944580
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State of Incorporation IRS Employer ID No.
3800 North Fairfax Drive - Suite 5
Arlington, Virginia 22203 22203
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Address of principal Executive Offices Zip Code
Registrant's Telephone Number (703) 243-2597
Check here whether the issuer (1) has filed all reports required
to be filed by Sections 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 __X____ No_______
As of October 31, 1999, the following shares of the Registrant's
common stock were issued and outstanding:
Voting common stock 5,038,041
INDEX
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . . . .3
CONDENSED CONSOLIDATED BALANCE SHEET . . . . . . . . .3
CONDENSED CONSOLIDATED INCOME STATEMENT. . . . . . . .4
STATEMENT OF CASH FLOWS. . . . . . . . . . . . . . . .5
Note 1. Nature of Business and Significant
Accounting Policies. . . . . . . . . . . . 7
Note 2. Use of Office Space. . . . . . . . . . . . .7
Note 3. Liquidity. . . . . . . . . . . . . . . . . .7
Note 4. Related Party Transaction. . . . . . . . . .8
Item 2. Management's Discussion And Analysis or Plan of
Operations. . . . . . . . . . . . . . . . . . . . . . 9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . 14
Item 2. Changes in Securities. . . . . . . . . . . . . . . . 14
Item 3. Defaults upon Senior Securities. . . . . . . . . . . 14
Item 4. Submission of Matters to a Vote of
Security Holders . . . . . . . . . . . . . . . . . . 14
Item 5. Other information. . . . . . . . . . . . . . . . . . 14
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . 14
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
TO THE BOARD OF DIRECTORS of AMAC, INC.
We have reviewed the accompanying balance sheet of AMAC, Inc. as
of October 31, 1999, and the related statements of loss and
accumulated deficit and cash flows for the three months then
ended, in accordance with Statements on Standards for Accounting
and Review Services issued by the American Institute of Certified
Public Accountants. All information included in these financial
statements is the representation of the management of AMAC, Inc.
A review consists principally of inquiries of Company personnel
and analytical procedures applied to financial data. It is
substantially less in scope than an audit in accordance with
generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an
opinion.
Based on our review, we are not aware of any material
modifications that should be made to the accompanying financial
statements in order for them to be in conformity with generally
accepted accounting principles.
Frank E. Hanson, CPA
Arlington, Virginia
December 20, 1999
AMAC, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
As Of As Of
October 31, 1999 April 30, 1999
(Unaudited) (Audited)
--------------------------------
ASSETS
Current Assets
Cash $ 207 $2,703
Other Current Assets 0 784
_________ ________
Total Current Assets $ 207 3,487
Other Assets 658,071 660,460
_________ ________
TOTAL ASSETS $658,278 $663,947
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable $0 $258
Accrued Expenses 16,783 17,412
Auto Lease Payable 2,832 3,777
_________ ________
Total Current Liabilities 19,615 21,447
Long Term Liabilities 848,929 792,916
_________ ________
Total Liabilities $868,544 $814,363
Stockholders' Equity
Common Stock, $.001 par value,
Authorized 25,000.000 Shares;
Issued and Outstanding
5,038,000 Shares 5,038 5,038
Additional Paid in Capital 9,000 9,000
Deficit Accumulated During the
Development Stage (224,304) (164,454)
_________ ________
Total Stockholders' Equity (210,266) (150,416)
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $658,278 $663,947
The accompanying notes and accountant's report are an integral
part of these financial statements.
AMAC, INC.
(A Development Stage Company)
CONDENSED CONSOLIDATED INCOME STATEMENT
For the 3 Mos Ended For the 3 Mos Ended
October 31 July 31
1999 1998 1999 1998
------------------------------------------
TOTAL REVENUES: $ 0 0 0 0
OPERATING EXPENSES:
Accounting 4,258 1,200 2,940 1,421
Legal 0 2,500 0 2,500
Filing Fee 0 12 0 13
Rent 0 600 0 600
Other Start
Up Costs 14,290 0 38,335 0
Other Income 0 0 0 0
________ _______ ________ ________
NET LOSS (18,548) ( 4,312) (41,275) (4,534)
NET LOSS PER SHARE (.0037) (.0004) (.082) (.0004)
Weighted Average
Number of Shares
Outstanding 5,038,000 10,000,000 5,038,000 10,000,000
The accompanying notes and accountant's report are an integral
part of these financial statements.
AMAC, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS (unaudited)
For the 3 mos For the 3 mos
Ended Ended
to to
October 31, 1999 October 31, 1998
________________________________________
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Loss $(18,548) $(4,312)
Adjustments to Reconcile Net Loss
to Net Cash Used in operating
Activities:
Changes in Assets and Liabilities
Increase in Accounts Payable and
Accrued Expenses 19,704 (2,609)
__________ __________
Total Adjustments 19,704 (2,609)
Net Cash Used in
Operating Activities (1,156) ( 6,921)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Increase in Additional Paid
In Capital 0 600
Increase in Loan Payable 0 6,321
Net Cash Provided
by Financing Activities 0 6,921
________ ________
Net Change in Cash (1,156) 0
Cash at Beginning of Period 1,363 0
Cash at End of Period $ 207 0
The accompanying notes and accountant's report are an integral
part of these financial statements.
AMAC, INC.
(A Development Stage Company)
NOTE 1. BASIS OF PRESENTATION
The financial statements are prepared on the accrual basis of
accounting. Accordingly, revenue is recognized when earned and
expenses when incurred.
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial information
and with the instructions to Form 10-QSB and Article 10 of
Regulation S-x. Accordingly, they do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financials statements. 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 and six
months ended October 31, 1999 are not necessarily indicative of
the results that may be expected for the period ending January
31, 2000. These Condensed Consolidated Financial Statements
should be read in conjunction with the Consolidated Financial
Statements and notes thereto contained in the Company's Form 10-K
for the year ended July 31, 1999.
NOTE 2. USE OF OFFICE SPACE
The Company uses 500 square feet of space for its executive
offices at 3800 N. Fairfax Drive, Arlingotn, Virginia. The rent
is being deferred until a future date.
NOTE 3. LIQUIDITY
The Company's viability as a going concern is dependent upon
raising additional capital and ultimately having net income.
The Company established its office in London, UK on November 18,
1996 when it began the initial development of its business plan.
The Company's limited operating history, including its losses and
no revenues, primarily reflect the operations of its early stage.
As a result, the Company has from time of inception to October
31, 1999 no revenue and a net loss from operations of $224,304.
As of October 31, 1999, the Company had a net capital deficiency
of $210,266.
It is not anticipated that the Company will be able to meet its
financial obligations through internal net revenue in the
foreseeable future. AMAC, Inc., does not have a working capital
line of credit with any financial institution. Therefore, future
sources of liquidity will be limited to the Company's ability to
obtain additional debt or equity funding. The Company
anticipates that its existing capital resources will enable it to
maintain its current implement operations for at least 12 months.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
RESULTS OF OPERATIONS
The Company is a development stage company. Its principal
business is to design, develop and manufacture a range of
amphibious vehicles, also known as floating trucks, that can
operate on land and in water. These vehicles will incorporate
hydraulics technology, which the Company believes is easy to
maintain and is very cost effective. The Company has developed
a prototype model which incorporates aluminum welding technology.
The Company's product is specialized and designed to operate
where a land based vehicle or a water based vehicle cannot easily
operate. The Company believes that there is a large unexploited
niche market in land/marine work vehicles similar to the niche
that was exploited with other similar products such as the
Backhoe loader.
The Company's first product is an adaptable and flexible vehicle
that can operate on land and in the water and has many different
applications, as a result the market places available are many
and varied. However, the Company intends to target the following
initial markets and uses:
Fire Fighting & emergency response
Military applications
Beach cleaning
Ecological pollution damage limitation & clean up
Fish Farming
Flood Control
Aquatic Harvesting
Of these initial markets the Floating Truck is expected to be
first used in aquatic harvesting, debris clearance and flood
relief. As part of their many civil engineering
responsibilities, the US Army Corps of Engineers has been
responsible for the design, construction and operation of the
flood controls on a number of major rivers. The best known of
these systems operate on the Mississippi, Missouri and Colorado
rivers as well as a number of dams and reservoirs which control
seasonal flooding downstream, allied to this are a complex series
of irrigation, hydro-electric power schemes, navigable waterways
and levy systems. From these areas, the Company believes it can
secure orders for the first 50 machines.
The Company's plans are by no means simple and investors are
alerted that any investment in the Company is complex and risky.
There can be no assurance that the Company will succeed in its
efforts or maintain a profitable business. The Company has no
recent operating history and no representation is made, nor is
any intended, that the Company will be able to carry on future
business activities successfully.
Due to the fact that the Company has been unable to secure
appropriate funding, it has not been in a position to negotiate
orders for its vehicles or to commence their manufacture. The
Company has received interest in its product from a U.S.
governmental agency and foreign governments however at this time
is unable to proceed further with a negotiation of a full order
since it does not have the capacity to produce the vehicles.
The Company has finalized a lease for a 25,000 square foot
premises from Bethlehem Steel's former shipyard, at Sparrow's
Point, Baltimore. The terms of the lease are for 5 years with an
option to purchase the premises after two years. The Company
expects to utilize the site to develop and manufacture its
amphibious vehicles. The facility will require work to make it
compatible for this purpose and the installation of manufacturing
equipment. Once the premises are in a satisfactory condition,
prior to manufacturing, they will have to be fully equipped with
the necessary tools to enable manufacturing. The premises will
also require fitting for a stock of spare parts and materials.
Once and when the Company is able to secure funding, then it is
anticipated that the Company may take orders for 12 vehicles
within its first year of capacity. It is noted that the Company
however has not secured funding to date.
The Company expects its costs to rise once funding is secured as
it is at this time that the Company will begin production of the
initial vehicles. In addition, the Company expects to expend
substantial amounts on marketing and advertising as well as
promotions for the coming 12 months.
The Company did not add any additional employees in the last
quarter. During the next quarter it is anticipated that, if
funding is forthcoming, then one administrative employee will
have to be employed and up to five workshop staff. This will be
added to once the manufacturing process is underway.
During the next twelve months, the Company expects to finance its
operations by obtaining short term funding from Glen Investments,
a Company wholly owned by Kevin R Leech, one of AMAC's principal
shareholders. The Company's viability as a going concern is
dependent upon raising additional capital, and ultimately, having
net income. The Company's limited operating history, including
its losses and no revenues, primarily reflect the operations of
its early stage.
The Company's viability as a going concern is dependent upon
raising additional capital and ultimately having net income.
The Company's limited operating history, including its losses and
no revenues, primarily reflect the operations of its early stage.
As a result, the Company has from time of inception to October
31, 1999 no revenue and a net loss from operations of $224,304.
As of October 31, 1999, the Company had a net capital deficiency
of $210,266.
The Company does not have any line of credit from any financial
institution at this time. However, the Company will strive to
establish a line of credit once it has secured funding through an
initial public offering of its shares in the sum of $1 million.
The infusion of such cash will enable the Company to partially
commence its operations and thereby allow it to obtain a line of
credit. There is no guarantee however that the Company will be
able to raise the sum of $1 million in a public offering or that
any financial institution will grant the Company a line of credit
in the foreseeable future.
The Company also will look to raise funds by obtaining cash
advance payments for orders of its amphibious vehicles which the
Company hopes will generate income during the next twelve months.
There is no guarantee however that the Company will obtain such
order or secure cash advance payments. Additionally, the Company
will seek to raise capital through a public offering of its
shares of common stock. The Company may also seek to obtain debt
financing from institutional lenders however at this time the
Company does not believe it has the ability or any line of credit
to do so.
There is no guarantee that the Company's plans will be
successful. Additionally, as the Company has minimal liquidity,
there is no guarantee that it will be able to sustain its
operations over the next twelve (12) months if it cannot achieve
its stated goals. In the event the Company is required to sell
its assets, it will be compelled to auction its prototype to the
highest bidder. The Company would expect such an auction to
attract the interest of tour boat operators who utilize
amphibious vehicles to attract consumers on guided tours.
The Company goal is to generate sales during the latter part of
the year 2000. The Company will market its product to
governmental agencies which may require amphibious vehicles. The
Company has held preliminary discussions with the United States
Army Corps of Engineers, the Irish Government and the Department
of Maine. No orders for the Company's vehicles have been placed
by either of these bodies. Notwithstanding this, the Company has
researched and assessed the market for amphibious vehicles and
expects to sell up to fifty (50) machines in the first two years
of activity in the United States where it has the availability
and funds to carry out production. In the event fifty (50) units
are sold over two years will generate sales of $40,000,000
excluding parts, service and training revenues. Investors are
alerted that there are no guarantees that the Company will be
able to sell any units and the Company's expectations are based
upon its own opinion and assessment of the potential demand for
amphibious vehicles.
The Company currently has a firm obligation to provide its
employees with compensation and related expenses in the sum of
approximately $13,000.00 per month.
The Company believes that it will not be severely impacted by any
changes in the economy or global environment as it is a
relatively small entity which does not generate or attract
substantial interest by the general public. Any unfavorable
events, such as environmental disasters or war, may benefit the
Company as its directors believe the opportunity to market and
attract interest in the Company's vehicle may develop. There is
no guarantee however that this will occur and that the Company
will be able to capitalize on any such opportunity.
The company believes that if inflation rises and interest rates
rise, it will be in a position to respond accordingly. The
company expects to borrow funds within the US, but it does not
expect to borrow funds to the extent that would adversely effect
the company's viability and profitability. Funding will be
provided by an initial public offering, by contracts signed, by
profitability, and by new revenues generated. As such, the
Company does not foresee that inflation will adversely affect the
Company.
The Company at this time has only one full time employee, Sean
Power who is the President and CEO, and three part-time
employees. Mr. Power is responsible for setting up the Company
in the United States. His duties include overseeing
manufacturing, production, design, facilities, equipment,
property, banking and administration. He is the most significant
employee of the Company.
The Company has an agreement with First London Securities
Corporation a company based in the State of Texas, to act as its
financial advisor and to furnish Investment Banking Services to
the Company. The Company's objective in retaining First London
is to develop contacts and relationships within the investment
community. The Company has not previously utilized any other
financial advisors or consultants. The Company utilizes the
services of First London as a market maker.
YEAR 2000 DISCLOSURE
The Company is aware of the Year 2000 issue and states that it
currently does not maintain any material active operations which
it foresees will be impacted by the Year 2000 problem. Management
therefore does not anticipate that the company will be affected
by this issue, financially or otherwise. This disclosure complies
with the directives of the Securities and Exchange Commission,
specifically Staff Legal Bulletin No. 5 (CF/IM), regarding Year
2000 issues.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are currently no pending legal proceedings against the
company.
ITEM 2. CHANGES IN SECURITIES
The instruments defining the rights of the holders of any class
of registered securities have not ben modified.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
There has been no default in the payment of principal, interest,
sinking or purchase fund installment.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter has been submitted to a vote of security holders during
the period covered by this report.
ITEM 5. OTHER INFORMATION
There is no other information to report which is material to the
company's financial condition not previously reported.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
There are no exhibits attached and no reports on Form 8-K were
filed during the quarter for which this report is filed.
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
/s/ AMAC, INC.
_______________________
Sean Power, President
Dated: December 20, 1999