SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2003
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OF 15(D) OF THE EXCHANGE ACT OF 1934
From the transition period from to
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Commission File Number 000-49698
AERO MARINE ENGINE, INC.
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(Exact name of registrant as specified in its charter)
Nevada 98-0353007
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(State or other jurisdiction of incorporation or organization)(IRS Employer
Identification No.)
23960 Madison Street, Torrance, California 90505
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(Address of principal executive offices)
(310)791-4642
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(Issuer's telephone number)
N/A
---
(Former name, if changed since last report)
Indicate by check mark whether the registrant (1) filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act during the past
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 November 19, 2003, 49,994,922 shares of Common Stock of the issuer were
outstanding.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AERO MARINE ENGINE, INC.
CONSOLIDATED FINANCIAL STATEMENTS FOR THE
QUARTER ENDED SEPTEMBER 30, 2003
AERO MARINE ENGINE, INC.
TABLE OF CONTENTS
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PAGE
CONSOLIDATED FINANCIAL STATEMENTS:
Consolidated Balance Sheet at September 30, 2003 A-3
Consolidated Statement of Operations for the Three Months Ended
September 30, 2003 and the period of December 30, 2002
(date of inception) to September 30, 2003 A-4
Consolidated Statement of Cash Flows for the Three Months Ended
September 30, 2003 and the period of December 30, 2002
(date of inception) to September 30, 2003 A-5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS A-6
AERO MARINE ENGINE, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED BALANCE SHEETAS OFSEPTEMBER 30, 2003 (UNAUDITED)
-------------------------------------------------------------
ASSETS:
CURRENT ASSETS
Cash and cash equivalents $ 7,035
Cash held in trust 23,000
Inventories 266,519
===========
Total current assets 296,554
PROPERTY AND EQUIPMENT, net of accumulated
depreciation of $5,765 121,002
INTANGIBLE ASSETS, net of accumulated amortization of $6,679 188,321
GOODWILL 526,384
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TOTAL ASSETS $1,132,261
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LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
Accounts payable $ 43,659
Accrued expenses 29,175
Advances from shareholders 218,684
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Total current liabilities 291,518
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STOCKHOLDERS' EQUITY:
Preferred stock, $0.001 par value, 100,000,000 shares authorized,
none issued and outstanding -
Common stock, $0.001 par value, 100,000,000 shares authorized,
49,994,922 issued and outstanding 49,995
Paid in capital 1,146,982
Deficit accumulated during the development stage (356,234)
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Total stockholders' equity 840,743
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,132,261
===========
The accompanying notes are an integral part of these consolidated financial
statements.
A-3
AERO MARINE ENGINE, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
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Period of
December 30, 2002
Three Months (date of inception)
Ended through
September 30, 2003 September 30, 2003
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REVENUES $ - $ -
------------ ------------
OPERATING EXPENSES:
Selling, general and administrative 112,459 112,459
Consulting 279 1,404
Professional fees 93,770 229,927
Depreciation and amortization 12,444 12,444
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Total operating expenses 218,952 356,234
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OPERATING LOSS (218,952) (356,234)
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LOSS BEFORE INCOME TAXES (218,952) (356,234)
INCOME TAX PROVISION (BENEFIT) - -
------------ ------------
NET LOSS $ (218,952) $ (356,234)
============ ============
NET LOSS PER SHARE:
Basic $ * $ (0.01)
============ ============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic 49,994,922 43,244,006
============ ============
* - less than $0.01
The accompanying notes are an integral part of these consolidated financial
statements.
A-4
AERO MARINE ENGINE, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
------------------------------------------------
Period of
December 30, 2002
Three Months (date of inception)
Ended through
September 30, 2003 September 30, 2003
-------------------- --------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (218,952) $ (356,234)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 12,444 12,444
Changes in assets and liabilities (net of business acquisition):
Inventory 70 70
Prepaid expenses 15,582 23,199
Accounts payable (32,935) (41,145)
-------------------- --------------------
Net cash used by operating activities (223,791) (361,666)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets (26,767) (26,767)
Purchase of business - (1,018,814)
-------------------- --------------------
Net cash (used in) investing activities (26,767) (1,045,581)
-------------------- --------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from debt 218,684 218,684
Proceeds from sale of common stock and contributed capital - 1,218,598
-------------------- --------------------
Net cash provided by financing activities 218,684 1,437,282
-------------------- --------------------
(DECREASE)/INCREASE IN CASH (31,874) 30,035
CASH, BEGINNING OF PERIOD 61,909 -
-------------------- --------------------
CASH, END OF PERIOD $ 30,035 $ 30,035
==================== ====================
The accompanying notes are an integral part of these consolidated financial
statements.
A-5
AERO MARINE ENGINE, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2003
---------------------------------------------
1. ORGANIZATION AND BASIS OF PRESENTATION
Princeton Ventures, Inc. (the "Company") was incorporated in the State of Nevada
on May 10, 2001. The Company had not commenced operations. On May 30, 2003,
the Company exchanged 37,944,922 shares of its common stock for all of the
issued and outstanding shares of Aero Marine Engine Corp. ("Aero"). Aero was
formed on December 30, 2002. Aero had no operations and was formed to acquire
the assets of Dyna-Cam Engine Corporation. The Company changed its name from
Princeton Ventures, Inc. to Aero Marine Engine, Inc.
At the time that the transaction was agreed to, the Company had 20,337,860
common shares issued and outstanding. In contemplation of the transaction with
Aero, the Company's two primary shareholders cancelled 9,337,860 shares of the
Company's common stock held by them, leaving 11,000,000 shares issued and
outstanding. As a result of the acquisition of Aero, there were 48,944,922
common shares outstanding, and the former Aero stockholders held approximately
78% of the Company's voting stock. For financial accounting purposes, the
acquisition was a reverse acquisition of the Company by Aero, under the purchase
method of accounting, and was treated as a recapitalization with Aero as the
acquirer. Accordingly, the historical financial statements have been restated
after giving effect to the May 30, 2003, acquisition of the Company. The
financial statements have been prepared to give retroactive effect to December
30, 2002, the date of inception of Aero, of the reverse acquisition completed on
May 30, 2003, and represent the operations of Aero. Consistent with reverse
acquisition accounting: (i) all of Aero's assets, liabilities, and accumulated
deficit, are reflected at their combined historical cost (as the accounting
acquirer) and (ii) the preexisting outstanding shares of the Company (the
accounting acquiree) are reflected at their net asset value as if issued on May
30, 2003.
Additionally, on June 30, 2003, the Company acquired the operating assets of
Dyna-Cam Engine Corp. ("Dyna-Cam"). Dyna-Cam was a development stage enterprise
developing a unique, axial cam-drive, free piston, internal combustion engine.
Dyna Cam intended to produce and sell the engine primarily for aircraft and
marine applications. Dyna-Cam had not generated significant revenues at the
time of the Company's acquisition.
The accompanying financial statements represent the consolidated financial
position and results of operations of the Company and include the accounts and
results of operations of the Company and Aero, its wholly owned subsidiary, for
the period December 30, 2002, date of inception, to September 30, 2003. The
purchase of the operating assets of Dyna-Cam occurred on June 30, 2003, and the
effect of that purchase is included in the accompanying balance sheet at June
30, 2003. There were no material results of operations of Dyna-Cam for the
period ended September 30, 2003. The consolidated entity is considered a
development stage enterprise as of September 30, 2003.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of business.
The Company faces many operating and industry challenges. The Company intends
to do business in a highly competitive industry. Future operating losses for
the Company are anticipated and the proposed plan of operations, even if
successful, may not result in cash flow sufficient to finance the initiation and
continued expansion of its business. These factors raise substantial doubt
about the Company's ability to continue as a going concern. Realization of
assets is dependent upon continued operations of the Company, which in turn is
dependent upon management's plans to meet its financing requirements, as
discussed below, and the success of its future operations. The financial
statements do not include any adjustments that might result from this
uncertainty.
A-6
The Company, under its new management, has raised over $1,000,000 in cash to
effect the acquisition of Dyna-Cam. Management believes that it has the ability
to raise additional capital adequate to complete the development of the Dyna-Cam
engine and begin revenue generating operations. In the three months ended
September 30, 2003, the Company raised debt capital of approximately $219,000.
Management believes the Company's capital restructuring and financing plans
along with the expected sale of engines will allow the Company to obtain
sufficient capital for operations and to continue as a going concern.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash includes all short-term highly liquid investments that are readily
----
convertible to known amounts of cash and have original maturities of three
months or less. At June 30, 2003, the Company had not yet established its own
bank accounts. The Company's cash was held in a trust account with its
attorney's office.
Principles of Consolidation: The consolidated financial statements include the
----------------------------
accounts of the Company and its wholly owned subsidiary, Aero Marine Engine
Corp. All significant intercompany accounts and transactions are eliminated.
Inventories consist of raw materials and purchased parts used in the
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manufacturing of engines. The Company records its inventory at the lower of
cost (first-in, first-out) or market.
Property and equipment is stated at cost less accumulated depreciation.
----------------------
Depreciation is recorded on a straight-line basis over the estimated useful
lives of the assets ranging from three to seven years. There was no depreciation
expense for the period ended June 30, 2003.
Income taxes: The Company provides for income taxes based on the provisions of
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Statement of Financial Accounting Standards No. 109, Accounting for Income
Taxes, which, among other things, requires that recognition of deferred income
taxes be measured by the provisions of enacted tax laws in effect at the date of
financial statements.
Financial Instruments: Financial instruments consist primarily of cash and
---------------------
obligations under accounts payable and accrued expenses. The carrying amounts
of cash, accounts payable and accrued expenses approximate fair value because of
the short maturity of those instruments. The Company has applied certain
assumptions in estimating these fair values. The use of different assumptions or
methodologies may have a material effect on the estimates of fair values.
A-7
Net loss per share is calculated using the weighted average number of shares of
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common stock outstanding during the year as prescribed by the provisions of SFAS
No. 128 Earnings Per Share.
Use of Estimates: The preparation of financial statements in conformity with
------------------
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 could differ from those estimates.
Intangible Assets: Intangible assets are comprised of goodwill and certain
------------------
finite life intangible assets purchased in the acquisition of the Dyna-Cam
operating assets. These assets represent the value of the difference between
the purchase price of the acquired business and the fair value of the
identifiable tangible net assets. The Company adopted Statement of Financial
Accounting Standard ("SFAS") No. 142, Goodwill and Other Intangible Assets. The
Company does not amortize goodwill but rather annually evaluates the carrying
value of goodwill for impairment, in accordance with the provisions of SFAS No.
142. The finite life of the intangibles will be amortized over 7 to 10 years.
There was no amortization expense for the period ended June 30, 2003 due to the
intangible assets being acquired on June 30, 2003.
Recently Issued Accounting Pronouncements:
-----------------------------------------
In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
With Exit or Disposal Activities". This Standard requires costs associated with
exit or disposal activities to be recognized when they are incurred. The
requirements of SFAS No. 146 apply prospectively after June 30, 2003, and as
such, the Company cannot reasonably estimate the impact of adopting these new
rules.
In October 2002, the FASB issued SFAS No. 147, "Acquisitions of Certain
Financial Institutions." SFAS No. 147 is effective October 1, 2002. The adoption
of SFAS No. 147 did not have a material effect on the Company's financial
statements.
In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities," effective for contracts entered
into or modified after June 30, 2003. This amendment clarifies when a contract
meets the characteristics of a derivative, clarifies when a derivate contains a
financing component and amends certain other existing pronouncements. The
Company believes the adoption of SFAS No. 149 will not have a material effect on
the Company's financial statements.
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." SFAS No. 150
is effective for financial instruments entered into or modified after May 31,
2003, and otherwise is effective at the beginning of the first interim period
beginning after June 15, 2003. SFAS No. 150 requires the classification as a
liability of any financial instruments with a mandatory redemption feature, an
obligation to repurchase equity shares, or a conditional obligation based on the
issuance of a variable number of its equity shares. The Company does not have
any authorized preferred shares or other financial instruments with a mandatory
redemption feature. The Company believes the adoption of SFAS No. 150 will not
have a material effect on the Company's financial statements.
A-8
In November 2002, the FASB issued FASB Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others" (FIN 45). FIN 45 clarifies the
requirements for a guarantor's accounting for and disclosure of certain
guarantees issued and outstanding. The initial recognition and initial
measurement provisions of FIN 45 are applicable to guarantees issued or modified
after December 31, 2002. The disclosure requirements of FIN 45 are effective
for financial statements for periods ending after December 15, 2002. The
adoption of FIN 45 did not impact the Company's financial statements.
In January 2003, the FASB issued FIN No. 46, "Consolidation of Variable Interest
Entities" (FIN 46). FIN No. 46 states that companies that have exposure to the
economic risks and potential rewards from another entity's assets and activities
have a controlling financial interest in a variable interest entity and should
consolidate the entity, despite the absence of clear control through a voting
equity interest. The consolidation requirements apply to all variable interest
entities created after January 31, 2003. For variable interest entities that
existed prior to February 1, 2003, the consolidation requirements are effective
for annual or interim periods beginning after June 15, 2003. Disclosure of
significant variable interest entities is required in all financial statements
issued after January 31, 2003, regardless of when the variable interest was
created. The adoption of FIN No. 46 did not have a material impact on the
Company's financial statements.
Impairment of long-lived assets is assessed by the Company for impairment
-------------------------------
whenever there is an indication that the carrying amount of the asset may not be
recoverable. Recoverability of these assets is determined by comparing the
forecasted undiscounted cash flows generated by those assets to the assets' net
carrying value. The amount of impairment loss, if any, is measured as the
difference between the net book value of the assets and the estimated fair value
of the related assets.
3. STOCKHOLDERS' EQUITY
The Company declared a 3.1126202 for 1 stock split effective June 30, 2003. The
number of shares presented in these financial statements has been retroactively
restated for all periods to reflect this stock split.
The Company issued 37,944,922 shares of its common stock in connection with the
acquisition of Aero Marine Engine Corp. Under reverse acquisition accounting,
these shares are reflected as issued on the date of inception and valued at the
book value of the net assets of as of the date of the transaction.
Aero was incorporated in contemplation of the reverse acquisition of the Company
as well as the Dyna-Cam acquisition. A total of 38,944,922 common shares were
issued in the reverse merger transaction. However, 1,000,000 of those shares
were designated for the Dyna-Cam acquisition. The Company raised $1,218,598 as
part of its initial capitalization. This capital was raised among four
individuals in contemplation of their receiving the 37,944,922 shares of the
Company's common stock in connection with the acquisition of Aero Marine Engine
Corp. The value of the 1,000,000 shares issued in connection with the Dyna-Cam
purchase was determined to be $0.032 per share, which is the price per share
paid by the investors that acquired the 37,944,922 shares for cash.
A-9
In connection with the reverse acquisition transaction with Aero, the Company's
two controlling shareholders at that time cancelled 9,337,860 shares of common
stock held by them. Upon completion of this cancellation, the Company had
11,000,000 shares of common stock remaining outstanding prior to the reverse
acquisition transaction.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
THIS REPORT CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF SECTION
27A OF THE SECURITIES ACT OF 1933, AS AMENDED AND SECTION 21E OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED. THE COMPANY'S ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THOSE SET FORTH ON THE FORWARD LOOKING STATEMENTS AS A RESULT OF
THE RISKS SET FORTH IN THE COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION, GENERAL ECONOMIC CONDITIONS, AND CHANGES IN THE ASSUMPTIONS USED IN
MAKING SUCH FORWARD LOOKING STATEMENTS.
OVERVIEW
The Company was incorporated in the State of Nevada on May 10, 2001 under the
name Princeton Ventures, Inc. The Company owns 100% of the issued and
outstanding stock of Aero Marine Engine Corp., incorporated in the State of
Nevada on December 30, 2002 (hereinafter "Aero"). The Company acquired Aero in
a reverse merger during the fiscal year ended June 30, 2003. The Company has
not generated any revenues and is considered a development stage enterprise, as
defined in Financial Accounting Standards Board No. 7.
During the 2003 fiscal year, Aero acquired all of the tangible and intangible
assets regarding a proprietary internal combustion, gasoline powered engine (the
"Dyna-Cam Engine"). These assets, included, but were not limited to, three
Dyna-Cam Engines, all engineering plans, designs and drawings, system maps,
abstracts, blueprints, surveys and drawings relating thereto, materials to
assemble approximately twenty Dyna-Cam Engines, the tooling to manufacture the
Dyna-Cam Engine, the www.dynacam.com Web site and all interest in and to the
trade name and trademarks and all other rights related to the use of the name
"Dyna-Cam" or any combination or variation thereof. The Company, through Aero,
is currently engaged in the development, manufacture and distribution of the
Dyna-Cam Engine.
PLAN OF OPERATIONS
The Company has obtained financing to satisfy its cash requirements for the next
twelve months at current operating levels and to commence production of the
Dyna-Cam Engine.
Currently, the Company is developing a spark-assisted version of the Dyna-Cam
Engine and researching a full diesel version. The Company intends to conduct
further research and development on the Dyna-Cam Engine regarding its chamber
design, cylinder heads, fuel delivery system and exhaust removal system.
The Company will need to acquire additional milling and machining equipment to
achieve commercial levels of production. At this time, the Company cannot
determine with reasonable certainty the amount of equipment that it will need.
The Company intends to move production of the Dyna-Cam Engine to Long Island,
New York in 2004 to a 25,000 square foot facility.
The Company anticipates that it will need to hire several additional skilled
machinists to achieve commercial levels of production of the Dyna-Cam Engine.
The number of machinists hired will depend on the volume of production.
The Company will have its first public showing of the Dyna-Cam Engine at the
Miami Boat Show from February 12th through February 17th of 2004.
The Company has been invited to meet with representatives of several consulting
and engineering firms in the Middle East in December of 2003.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2003
REVENUES
The Company had no revenues for the three months ended September 30, 2003.
COSTS AND EXPENSES
For the three months ended September 30, 2003, the Company had costs and
expenses of $218,952 consisting of selling, general and administrative ("SG&A")
expenses of $112,459, consulting expenses of $279, professional fees of $93,770
and depreciation and amortization of $12,444.
LOSS FROM OPERATION AND NET LOSS
Loss from operations increased $212,512 from $6,440 for the three months ended
September 30, 2002 to $218,952 for the three months ended September 30, 2003.
The significant increase in loss from operations is due to an increase in SG&A,
professional fees and depreciation and amortization offset by a decrease in
consulting expense. These increases are a result of the development,
manufacture and distribution of the Dyna-Cam Engine that the Company began
during the fiscal year ended June 30, 2003.
Net Loss
Net loss was $218,952 for the three months ended September 30, 2003 as the
Company did not recognize a deferred income tax provision or benefit.
Net Loss Per Share
The Company had a net loss per share of $0.00 for the three months ended
September 30, 2003 and $0.01 for the three months ended September 30, 2002.
Liquidity and Capital Resources
For the three months ended September 30, 2003, the Company did not generate cash
flow from its operations. As a result, the Company requires additional working
capital to develop its business until the Company either achieves a level of
revenues adequate to generate sufficient cash flows from operations or obtains
additional financing necessary to support its working capital requirements.
As of September 30, 2003, the Company had accounts payable of $43,659, accrued
expenses of $29,175, and notes payable to related parties of $218,684.
As of September 30, 2003, the Company had cash and cash equivalents of $7,035,
cash held in trust of $23,000, and inventories of $266,519. The Company has
working capital of $5,036.
The Company received financing from its majority shareholders in the amount of
$1,218,598 during the period from inception (December 30, 2002) through
September 30, 2003. In addition, the Company secured financing in
the amount of $2,500,000 from existing shareholders, to be advanced to the
Company as unsecured shareholder loans, of which $218,684 had been loaned as
of September 30, 2003. The advances will bear interest at the Federal
Reserve prime rate plus 1.25% and interest will be payable annually. There is
no repayment schedule at this time. In addition, Perma-Tune Electronics, Inc.
has agreed to extend to the Company a $1.5 million credit line to provide
products and services to the Company as discussed below in Part II, Item 5.
ITEM 3. EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures. Our chief executive
officer and our chief financial officer, after evaluating the effectiveness of
the Company's "disclosure controls and procedures" (as defined in the Securities
Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period
covered by this quarterly report (the "Evaluation Date"), has concluded that as
of the Evaluation Date, our disclosure controls and procedures were adequate and
designed to ensure that material information relating to us and our consolidated
subsidiaries would be made known to him by others within those entities.
(b) Changes in internal control over financial reporting. There were no
significant changes in our internal control over financial reporting during our
most recent fiscal quarter that materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
None.
ITEM 5. OTHER INFORMATION
Robert E. Fyn, Murray H. Stark, Garth S. Bailey and Peter Mergenthaler own
majority control of Perma-Tune Electronics, Inc. as well as majority control of
the Registrant. Messrs. Fyn and Stark each own approximately 30% of Perma-Tune
Electronics, Inc. and Messrs. Bailey and Mergenthaler own approximately 13% of
Perma-Tune Electronics, Inc.
In August 2003, the Company secured financing in the amount of $2,500,000
from existing shareholders, to be advanced to the Company as unsecured
shareholder loans, of which $218,684 had been loaned as of September 30,
2003. The advances bear interest at the Federal Reserve prime rate plus
1.25% and interest will be payable annually
In November 2003, Perma-Tune Electronics, Inc. agreed to provide a $1.5 million
line of credit to provide products and services to the Company. Pursuant to the
agreement between the Company and Perma-Tune Electronics, Inc., for every $2
paid to Perma-Tune Electronics, Inc. by the Company, Perma-Tune Electronics,
Inc. will extend $1 of credit, up to a maximum of $1.5 million dollars.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
Exhibit No. Description
2.1 Exchange Agreement (1)
2.2 Disposition of Collateral and Settlement
Agreement (1)
3.1 Amendment to Articles of Incorporation (2)
3.2 Amended Bylaws (1)
31 Certificate of the Chief Executive
Officer and Chief Financial Officer
pursuant Section 302 of the Sarbanes-
Oxley Act of 2002 (3)
32 Certificate of the Chief Executive
Officer and Chief Financial Officer
pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002 (3)
(1) Filed as an exhibit to the Company's Form 8-K filed with the Securities and
Exchange Commission on July 8, 2003, and incorporated herein by reference.
(2) Filed as an exhibit to the Company's Form 8-K filed with the Securities and
Exchange Commission on July 10, 2003, and incorporated herein by reference.
(3) Filed herewith as an exhibit.
b) Reports on Form 8-K
The Company filed the following four reports on Form 8-K during the first
quarter of the fiscal period covered by this report and one report thereafter:
(1) Form 8-K filed on July 8, 2003, to report a reverse merger, the resignation
and appointment of officers and directors, amended bylaws, and the intent
of a name change.
(2) Form 8-K filed on July 10, 2003, to report an Amendment to Articles of
Incorporation regarding a name change and a forward stock split.
(3) Form 8-K filed on August 6, 2003, to dismiss the former accountant and
appoint a new principal independent public accountant.
(4) Form 8-K filed on September 18, 2003, to report unaudited financial
information of Aero marine Engine Corporation, a wholly-owned subsidiary.
Aero Marine provided an unaudited balance sheet of Aero Marine Engine
Corporation as of June 30, 2003, as well as a pro-forma unaudited balance
sheet of Aero Marine Engine Corporation as of June 30, 2003, as if the
Dyna-Cam transaction, which was not completed until July 2003, had been
completed and all payments obligations had been assumed as of June 30,
2003.
(5) Form 8-K/A Amendment No. 1 filed on October 1, 2003, to amend the Form 8-K
filed on July 8, 2003.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
AERO MARINE ENGINE, INC.
Date: November 19, 2003
By: /s/ Garth S. Bailey
----------------------
Garth S. Bailey
Chief Executive Officer
EXHIBIT 31
CERTIFICATION
I, Garth S. Bailey, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Aero Marine
Engine, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the small business
issuer as of, and for, the periods presented in this report;
4. I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
small business issuer and have:
a) Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under my supervision, to ensure that
material information relating to the small business issuer, including its
consolidated subsidiaries, is made known to me by others within those
entities, particularly during the period in which this report is being
prepared;
b) Paragraph omitted in accordance with SEC transition instructions contained
in SEC Release No. 33-8238;
c) Evaluated the effectiveness of the small business issuer's disclosure
controls and procedures and presented in this report my conclusions about
the effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the small business issuer's internal
control over financial reporting that occurred during the small business
issuer's most recent fiscal quarter (the small business issuer's fourth
fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the small business
issuer's internal control over financial reporting; and
5. I have disclosed, based on my most recent evaluation of internal control
over financial reporting, to the small business issuer's auditors and the audit
committee of the small business issuer's board of directors (or persons
performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the small business issuer's ability to record,
process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the small business issuer's
internal control over financial reporting.
Date: November 19, 2003
By: /s/Garth S. Bailey
-------------------------------
Garth S. Bailey,
Chief Executive Officer,
President and Chief
Financial Officer
EXHIBIT 32
CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Garth S. Bailey, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly
Report of Aero Marine Engine, Inc. on Form 10-QSB for the quarterly period ended
September 30, 2003 fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934 and that information contained in
such Form 10-QSB fairly presents in all material respects the financial
condition and results of operations of Aero Marine Engine, Inc.
By:/s/ Garth S. Bailey
--------------------------
Name: Garth S. Bailey
Title: Chief Executive Officer,
President and Chief
Financial Officer
November 19, 2003