|
Page
|
|||
Prospectus
Summary
|
1
|
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|
||||
Risk
Factors
|
5
|
|||
|
||||
A
Note About Forward-Looking Statements
|
11
|
|||
|
||||
Use
of Proceeds
|
11
|
|||
|
||||
Market
for Common Equity and Related Stockholder Matters
|
12
|
|||
|
||||
Selected
Consolidated Financial Data
|
13
|
|||
|
||||
Supplementary
Financial Information - Selected Quarterly Financial Data
|
14
|
|||
|
||||
Selling
Shareholders
|
15
|
|||
|
||||
Plan
of Distribution
|
21
|
|||
|
||||
Business
|
23
|
|||
|
||||
Management’s
Discussion and Analysis and Results of Operations
|
29
|
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|
||||
Management
|
39
|
|||
|
||||
Executive
Compensation
|
41
|
|||
Certain
Relationships and Related Transactions
|
42
|
|||
|
||||
Security
Ownership of Certain Beneficial Owners and Management
|
43
|
|||
|
||||
Description
of Securities
|
44
|
|||
|
||||
Legal
Matters
|
50
|
|||
Experts
|
50
|
|||
|
||||
Where
You Can Find More Information
|
51
|
·
|
$1,250,000
on the date of closing; and
|
·
|
$1,675,000
through the issuance to King's Motorsports of a 6% $1,675,000 aggregate
principal amount note (the "King's
Note").
|
|
|
Total Number of
Common Shares into
which Convertible
or Exercisable
|
|
Total Number of
Shares upon
issuance of
Additional Stock at
$0.375 per share
|
|
Total Number of
Shares upon
issuance of
Additional Stock at
$0.25 per share
|
|
Total Number of
Shares upon
issuance of
Additional Stock at
$0.175 per share
|
|
||||
|
|
|
|
||||||||||
Series
A Shares
|
4,900,000
|
7,300,000
|
10,948,000
|
21,896,000
|
|||||||||
|
|||||||||||||
Series
A Warrants
|
6,314,000
|
8,400,000
|
12,628,000
|
25,256,000
|
|||||||||
|
|||||||||||||
Total
|
11,214,000
|
15,700,000
|
23,576,000
|
47,152,000
|
|
Three
Months Ended
March
31,
|
Year
Ended
December
31,
|
|||||||||||
|
2008
(Unaudited)
|
2007
(Unaudited)
|
2007
|
2006
|
|||||||||
Consolidated
Statements of Income
|
|||||||||||||
Sales
|
$
|
18,832,426
|
$
|
20,034,116
|
$
|
95,699,650
|
$
|
97,637,103
|
|||||
Operating
Expenses
|
2,948,908
|
2,792,780
|
12,190,626
|
13,294,060
|
|||||||||
Net
Income (Loss) attributable to Common Stockholders
|
(629,001
|
)
|
(566,436
|
)
|
581,157
|
(454,724
|
)
|
||||||
Basic
Earnings (Loss) per share
|
(0.05
|
)
|
(0.05
|
)
|
0.05
|
(0.04
|
)
|
||||||
Diluted
Earnings (Loss) per share
|
(0.05
|
)
|
(0.05
|
)
|
0.02
|
(0.04
|
)
|
||||||
Weighted
Average Shares Outstanding
|
|||||||||||||
-
Basic
|
12,621,504
|
11,936,889
|
12,225,073
|
11,090,020
|
|||||||||
-
Diluted
|
12,621,504
|
11,936,889
|
28,904,647
|
11,090,020
|
|
As
of March 31,
|
As
of December 31,
|
|||||||||||
|
2008
(Unaudited)
|
2007
(Unaudited)
|
2007
|
2006
|
|||||||||
Balance
Sheet Data
|
|||||||||||||
Cash
and cash equivalents
|
$
|
483,351
|
$
|
817,595
|
$
|
919,784
|
$
|
156,530
|
|||||
Accounts
receivable, net
|
3,727,613
|
3,580,012
|
3,421,107
|
3,803,718
|
|||||||||
Inventories
|
24,242,500
|
20,656,889
|
25,626,033
|
21,267,135
|
|||||||||
Deferred
tax assets
|
280,000
|
361,000
|
22,000
|
113,900
|
|||||||||
Prepaid
expenses
|
14,078
|
33,831
|
28,069
|
10,131
|
|||||||||
Fixed
Assets, net
|
1,559,015
|
1,904,693
|
1,666,828
|
2,004,274
|
|||||||||
Total
other Assets
|
1,734,550
|
1,729,950
|
1,734,550
|
1,729,950
|
|||||||||
Total
Assets
|
32,041,107
|
29,098,852
|
33,418,371
|
29,085,638
|
|||||||||
Total
Liabilities
|
28,178,795
|
25,936,936
|
29,016,278
|
25,449,989
|
|||||||||
Total
Stockholders’ Equity
|
3,862,312
|
3,161,916
|
4,402,093
|
3,635,649
|
|
·
|
quarterly
variations in our operating
results;
|
|
·
|
large
purchases or sales of common stock;
|
|
|
|
|
·
|
actual
or anticipated announcements of new products or services by us or
competitors;
|
|
|
|
|
·
|
acquisitions
of new dealerships;
|
|
|
|
|
·
|
investor
perception of our business prospects or the motorcycle/power sports
industry in general;
|
|
|
|
|
·
|
general
conditions in the markets in which we compete; and
|
|
|
|
|
·
|
economic
and financial conditions.
|
|
BID
|
ASK
|
|||||||||||
Quarter
Ended
|
High
|
Low
|
High
|
Low
|
|||||||||
|
|
|
|
||||||||||
3/31/06
|
.94
|
.90
|
.75
|
.62
|
|||||||||
6/30/06
|
.63
|
.45
|
.62
|
.35
|
|||||||||
9/30/06
|
.63
|
.38
|
.60
|
.38
|
|||||||||
12/31/06
|
.60
|
.17
|
.60
|
.17
|
|||||||||
3/31/07
|
.16
|
.16
|
.24
|
.24
|
|||||||||
6/30/07
|
.30
|
.30
|
.33
|
.33
|
|||||||||
9/30/07
|
.25
|
.25
|
.40
|
.40
|
|||||||||
12/31/07
|
.28
|
.25
|
.29
|
.29
|
|||||||||
3/31/08
|
.23
|
.23
|
.23
|
.23
|
|
2003
|
2004
|
2005
|
2006
|
2007
|
|||||||||||
Net
Sales (1)
|
$
|
45,217,270
|
$
|
77,615,237
|
$
|
103,117,471
|
$
|
97,637,103
|
$
|
95,699,650
|
||||||
Income
from Continuing Operations
|
852,831
|
2,168,256
|
631,526
|
1,117,702
|
2,396,404
|
|||||||||||
Income
from Continuing Operations Per Share
|
0.11
|
0.21
|
0.06
|
0.10
|
0.19
|
|||||||||||
Total
Assets
|
14,303,028
|
24,017,727
|
25,832,117
|
29,085,638
|
33,418,371
|
|||||||||||
Long-term
Debt Obligations
|
547,073
|
2,636,027
|
1,498,479
|
1,513,665
|
796,510
|
|||||||||||
Preferred
Stock
|
—
|
—
|
2,870
|
2,450
|
2,450
|
|||||||||||
Cash
Dividends Declared per Common
|
—
|
—
|
—
|
—
|
—
|
Quarter
ending:
|
Total
Revenues
|
Gross
Profit
|
Net
Income (Loss)
|
Earnings
(Loss)
per
share
|
|||||||||
3/31/2006
|
18,389,637
|
2,547,420
|
(1,067,874
|
)
|
(0.11
|
)
|
|||||||
6/30/2006
|
39,370,426
|
5,999,793
|
1,143,956
|
0.11
|
|||||||||
9/30/2006
|
24,866,822
|
3,717,076
|
(248,673
|
)
|
(0.02
|
)
|
|||||||
12/31/2006
|
18,124,901
|
2,147,473
|
(282,133
|
)
|
(0.02
|
)
|
|||||||
3/31/2007
|
20,905,904
|
2,477,268
|
(566,436
|
)
|
(0.05
|
)
|
|||||||
6/30/2007
|
35,307,143
|
6,207,384
|
1,387,934
|
0.11
|
|||||||||
9/30/2007
|
23,098,906
|
3,854,961
|
458,093
|
0.04
|
|||||||||
12/31/2007
|
19,384,739
|
2,047,417
|
(698,434
|
)
|
(0.06
|
)
|
|||||||
3/31/2008
|
19,286,899
|
2,382,400
|
(629,001
|
)
|
(0.05
|
)
|
Selling Shareholders
|
|
Shares Beneficially
Owned Prior to Offering
(1)(2)
|
|
Number of
Warrants
Offered by
this
Prospectus
|
|
Number of
Shares
Offered by
this
Prospectus
(4)
|
|
Shares Beneficially owned
After the Offering (5)
|
|
||||||||||
Number
|
|
Percent(3)
|
|
|
|
|
|
Number
|
|
Percent
|
|
||||||||
Shirley
Stone Koffman
|
634,467
|
(6)
|
4.9
|
%
|
100,000
|
400,000
|
—
|
—
|
|||||||||||
Meadowbrook
Opportunity Fund LLC
|
646,120
|
(7)
|
4.99
|
%
|
300,000
|
1,200,000
|
(7)
|
—
|
—
|
||||||||||
Vestal
Venture Capital
|
634,467
|
(8)
|
4.9
|
%
|
1,740,000
|
6,764,300
|
(8)
|
—
|
—
|
||||||||||
Richard
Molinsky
|
100,000
|
*
|
100,000
|
100,000
|
(9)
|
—
|
—
|
||||||||||||
Robert
A. Melnick
|
100,000
|
*
|
100,000
|
100,000
|
(10)
|
—
|
—
|
||||||||||||
Milton
Koffman
|
634,467
|
(11)
|
4.9
|
%
|
400,000
|
1,600,000
|
(11)
|
—
|
—
|
||||||||||
Israel
Feit
|
200,000
|
1.5
|
%
|
100,000
|
373,696
|
(12)
|
—
|
—
|
|||||||||||
Edward
J. Gutman
|
200,000
|
1.7
|
%
|
200,000
|
200,000
|
(13)
|
—
|
—
|
|||||||||||
Burton
I. Koffman and Ruthanne Koffman,
as
joint tenants with a right of survivorship
|
634,467
|
(14)
|
4.9
|
%
|
1,000,000
|
4,000,000
|
(14)
|
—
|
—
|
||||||||||
Durban
Investment Group, LLC
|
455,413
|
3.4
|
%
|
200,000
|
793,418
|
(15)
|
—
|
—
|
|||||||||||
Tech-Aerofoam
Products, Inc.
|
634,467
|
(16)
|
4.9
|
%
|
1,000,000
|
4,000,000
|
(16)
|
—
|
—
|
||||||||||
James
Scibelli
|
461,996
|
3.5
|
%
|
200,000
|
800,000
|
(17)
|
—
|
—
|
|||||||||||
Dov
Schwartz
|
230,998
|
1.7
|
%
|
100,000
|
400,000
|
(18)
|
—
|
—
|
|||||||||||
Albert
Nocciolino
|
461,995
|
3.5
|
%
|
200,000
|
800,000
|
(19)
|
—
|
—
|
|||||||||||
HCFP/Brenner
Securities LLC
|
634,467
|
(20)
|
4.9
|
%
|
574,000
|
2,296,000
|
(20)
|
—
|
—
|
||||||||||
Thomas
A. Gallo
|
460,000
|
3.7
|
%
|
—
|
250,000
|
(21)
|
—
|
—
|
John
S. Arnone
|
350,000
|
2.7
|
%
|
—
|
250,000
|
(22)
|
—
|
—
|
|||||||||||
Brendan
C. Rempel
|
360,000
|
2.7
|
%
|
—
|
250,000
|
(23)
|
—
|
—
|
|||||||||||
Moneta
Capital Advisors, Inc.
|
220,000
|
1.7
|
%
|
—
|
220,000
|
(24)
|
—
|
—
|
|||||||||||
HSK
Funding, Inc.
|
100,000
|
*
|
—
|
100,000
|
(25)
|
—
|
—
|
||||||||||||
Moira
Stodden
|
10,000
|
*
|
—
|
10,000
|
(26)
|
—
|
—
|
||||||||||||
Douglas
Gass
|
10,000
|
*
|
—
|
10,000
|
(27)
|
—
|
—
|
||||||||||||
Albert
A. Auer
|
10,000
|
*
|
—
|
10,000
|
(28)
|
—
|
—
|
(1)
|
Includes
(i) all shares issued or to be issued pursuant to the conversion
of Series
A Shares, Series A Warrants and/or Other Warrants held by the Selling
Shareholders, which may be converted or exercised within 60 days
after
June 16, 2008 less (ii) all shares sold by Selling Shareholders prior
to
June 16, 2008.
|
(2)
|
The
actual number of shares of common stock issuable upon conversion
of the
Series A Shares, the exercise of the Series A Warrants and the exercise
of
the Other Warrants is subject to certain anti-dilution and other
adjustments.
|
(3)
|
Percentage
is based upon 12,948,316 shares of common stock outstanding on June
16,
2008, plus, with respect to that Selling Shareholder only, all shares
of
common stock that are issuable to it within 60 days after that date,
upon
conversion of its Series A Shares, exercise of its Series A Warrants
and/or exercise of its Other
Warrants.
|
(4)
|
The
Selling Shareholders are also offering hereunder such indeterminate
number
of additional shares of common stock as may be issued to them because
of
any future stock distributions, stock splits, similar capital
readjustments or other anti-dilution adjustments, relating to the
Series A
Shares, the Series A Warrants and the Other
Warrants.
|
(5) |
Assumes
the sale of all shares of common stock and Series A Warrants that
may be
sold in the offering.
|
(6)
|
Represents
Mrs. Koffman's beneficial ownership of 4.9% of the Company's issued
and
outstanding shares of common stock. Mrs. Koffman and her husband,
Milton
Koffman, have agreed to restrict their rights to convert the Series
A
Shares and exercise Series A Warrants so that their combined beneficial
ownership of the Company's common stock is less than five percent.
Notwithstanding any restrictions on her beneficial ownership, the
number
of shares offered by Mrs. Koffman by this prospectus includes an
aggregate
of (i) 100,000 shares issuable upon the conversion of Series A Shares;
(ii) 100,000 shares issuable upon the exercise of Series A Warrants;
(iii)
30,998 shares of common stock issued as dividends on the Series A
Shares;
and (iv) 169,002 potential reserve shares.
|
(7)
|
Represents
Meadowbrook Opportunity Fund LLC's beneficial ownership of 4.99%
of the
Company's issued and outstanding shares of common stock. Meadowbrook
Opportunity Fund has agreed to restrict its right to convert the
Series A
Shares and exercise Series A Warrants so that its beneficial ownership
of
the Company's common stock is less than five percent. Notwithstanding
any
restrictions on its beneficial ownership, the number of shares offered
by
Meadowbrook Opportunity Fund by this prospectus includes an aggregate
of
(i) 300,000 shares issuable upon the conversion of Series A Shares;
(ii)
300,000 shares issuable upon the exercise of Series A Warrants; (iii)
93,013 shares of common stock issued as dividends on the Series A
Shares;
and (iv) 506,987 potential reserve shares. Michael Ragins is a managing
member of MYR Partners LLC, the manager of Meadowbrook Opportunity
Fund,
and has sole voting power with respect to the securities being offered
for
resale by Meadowbrook Opportunity Fund in this
prospectus.
|
(8)
|
Represents
Vestal Venture Capital's beneficial ownership of 4.9% of the Company's
issued and outstanding shares of common stock. Vestal Venture Capital
has
agreed to restrict its right to convert the Series A Shares and exercise
Series A Warrants so that its beneficial ownership of the Company's
common
stock is less than five percent. Notwithstanding any restrictions
on its
beneficial ownership, the number of shares offered by Vestal Venture
Capital by this prospectus includes an aggregate of (i) 1,300,000
shares
issuable upon the conversion of Series A Shares; (ii) 1,740,000 shares
issuable upon the exercise of Series A Warrants; (iii) 244,300 shares
of
common stock issued upon conversion of Series A Shares; (iv) 435,585
shares of common stock issued as dividends on Series A Shares; and
(iii)
3,044,415 potential reserve shares. Allan R. Lyons is the sole owner
and
managing member of 21st Century Strategic Investment Planning, LC,
the
general partner of Vestal Venture Capital, and has sole voting power
with
respect to the securities offered for resale by Vestal Venture Capital
in
this prospectus.
|
(9)
|
Represents
100,000 shares issuable upon the exercise of Series A
Warrants.
|
(10)
|
Represents
100,000 shares issuable upon the exercise of Series A
Warrants.
|
(11)
|
Represents
Mr. Koffman's beneficial ownership of 4.9% of the Company's issued
and
outstanding shares of Common Stock. Mr. Koffman and his wife, Shirley
Stone Koffman, have agreed to restrict their rights to convert the
Series
A Shares and exercise Series A Warrants so that their combined beneficial
ownership of the Company's Common Stock is less than five percent.
Notwithstanding any restrictions on his beneficial ownership, the
number
of shares offered by Mr. Koffman by this prospectus includes (i)
400,000
shares issuable upon the conversion of Series A Shares; (ii) 400,000
shares issuable upon the exercise of Series A Warrants; (iii) 124,009
shares of common stock issued as dividends on Series A Shares; and
(iv)
675,991 potential reserve shares.
|
(12)
|
Represents
an aggregate of (i) 100,000 shares issuable upon the conversion of
Series
A Shares; (ii) 100,000 shares issuable upon the exercise of Series
A
Warrants; and (iii) 173,696 potential reserve
shares.
|
(13)
|
Represents
an aggregate of 200,000 shares issuable upon the exercise of Series
A
Warrants.
|
(14)
|
Represents
Mr. Koffman's beneficial ownership of 4.9% of the Company's issued
and
outstanding shares of common stock. Mr. Koffman and Tech-Aerofoam
Products, Inc., a corporation with which he is affiliated, have agreed
to
restrict their rights to convert the Series A Shares and exercise
Series A
Warrants so that their combined beneficial ownership of the Company's
common stock is less than five percent. Notwithstanding any restrictions
on his beneficial ownership, the number of shares offered by Mr.
and Mrs.
Koffman by this prospectus includes an aggregate of (i) 1,000,000
shares
issuable upon conversion of Series A Shares; (ii) 1,000,000 shares
issuable upon the exercise of Series A Warrants; (iii) 310,033 shares
of
common stock issued as dividends on the Series Shares and (iii) 1,689,967
potential reserve shares. Mr. Koffman is also deemed to be the beneficial
owner of 100,000 shares issuable upon the exercise of Other Warrants
by
HSK Funding, Inc., which may be exercised until January 2010 at an
exercise price of $1.00 per share.
|
(15)
|
Represents
an aggregate of (i) 200,000 shares issuable upon the conversion of
Series
A Shares; (ii) 200,000 shares issuable upon the exercise of Series
A
Warrants; (iii) 55,413 shares of common stock issued as dividends
on the
Series A Shares; and (iv) 338,005 potential reserve shares. J. Leon
Ellman, Neil Ellman, Lance Ellman and Kevin Sirop, are each managers
of
JLE Investment Managers, LLC, the manager of Durban Investment Group,
LLC,
and each has sole voting power over the securities being offered
for
resale by Durban Investment Group in this
prospectus.
|
(16)
|
Represents
Tech-Aerofoam Products' beneficial ownership of 4.9% of the Company's
issued and outstanding shares of common stock. Tech-Aerofoam Products
and
Burton Koffman, who is an affiliate of Tech-Aerofoam Products, have
agreed
to restrict their rights to convert Series A Shares and exercise
Series A
Warrants so that their combined beneficial ownership of the Company's
common stock is less than five percent. Notwithstanding any restrictions
on its beneficial ownership, the number of shares offered by Tech-Aerofoam
Products by this prospectus includes an aggregate of (i) 1,000,000
shares
issuable upon conversion of Series A Shares; (ii) 1,000,000 shares
issuable upon the exercise of Series A Warrants; (iii) 310,033 shares
of
common stock issued as dividends on the Series A Shares; and (iv)
1,689,967 potential reserve shares. Burton I. Koffman, President,
David L.
Koffman, Vice President, and Jeffrey Koffman, Vice President, each
has
sole voting power over the securities being offered for resale by
Tech
Aerofoam Products in this
prospectus.
|
(17)
|
Represents
an aggregate of (i) 100,000 shares issuable upon the conversion of
Series
A Shares; (ii) 100,000 shares issuable upon the exercise of Series
A
Warrants; (iii) 100,000 shares issuable upon the conversion of Series
A
Shares under Mr. Scibelli's IRA; (iv) 100,000 shares issuable upon
the
exercise of Series A Warrants under Mr. Scibelli's IRA; (v) 30,998
shares
of common stock issued as dividends on the Series A Shares initially
held
by Mr. Scibelli; (vi) 30,998 shares of common stock issued as dividends
on
the Series A Shares initially held by Mr. Scibelli’s IRA; and (vii)
338,004 potential reserve shares. Mr. Scibelli was a registered
representative with RG Securities, LLC, a registered broker-dealer.
Additionally, Mr. Scibelli has represented to us that he purchased
his
Series A Shares and Series A Warrants as an investment for his own
account
without a view to resell. Mr. Scibelli has further represented that
he
does not have any agreements or understandings, directly or indirectly,
with any person to distribute the securities purchased by him. Mr.
Scibelli died subsequent to the initial offer and sale of his securities
under this prospectus. As a result, the securities offered hereby
may be
held by (i) the Estate of James Scibelli, Carol Scibelli as Executrix;
(ii) Carol Scibelli IRA; (iii) Carol Scibelli; or (iv) such other
person
entitled to receive such securities by testamentary
distribution.
|
(18)
|
Represents
an aggregate of (i) 100,000 shares issuable upon the conversion of
Series
A Shares; (ii) 100,000 shares issuable upon the exercise of Series
A
Warrants; (iii) 30,998 shares of common stock issued as dividends
on the
Series A Shares and (iii) 169,002 potential reserve
shares.
|
(19)
|
Represents
an aggregate of (i) 200,000 shares issuable upon the conversion of
Series
A Shares; (ii) 200,000 shares issuable upon the exercise of Series
A
Warrants; (iii) 61,995 shares of common stock issued as dividends
on the
Series A Shares and (iii) 338,005 potential reserve
shares.
|
(20)
|
Represents
HCFP/Brenner Securities' beneficial ownership of 4.9% of the Company's
issued and outstanding shares of common stock. HCFP/Brenner Securities
has
agreed to restrict its right to convert the Series A Shares and exercise
Series A Warrants so that its beneficial ownership of the Company's
common
stock is less than five percent. Notwithstanding any restrictions
on its
beneficial ownership, the number of shares offered by HCFP/Brenner
Securities by this prospectus includes an aggregate of (i) (1) 574,000
shares issuable upon the conversion of Series A Shares and (2) 574,000
shares issuable upon the exercise of Series A Warrants, all of which
are
issuable pursuant to the placement agent's purchase option; and (ii)
1,148,000 potential reserve shares. Steven D. Shaffer, a member of
HCFP/Brenner Securities' Board, has sole voting power with respect
to the
securities offered for resale by HCFP/Brenner Securities in this
prospectus. HCFP/Brenner Securities, the placement agent for the
September
2005 Private Placement, is a registered broker-dealer.
|
(21)
|
Represents
beneficial ownership of (i) 250,000 shares issuable upon the exercise
of
Other Warrants which may be exercised until January 2010 at an exercise
price of $1.00 per share; and (ii) 100,000 shares of common stock
owned by
Mr. Gallo directly or by his children. Additionally, Mr. Gallo is
a
principal of Moneta Capital Advisors, Inc. ("Moneta") and may therefore
be
deemed to have beneficial ownership of the 220,000 shares underlying
Other
Warrants, held by Moneta, although Mr. Gallo disclaims beneficial
ownership of 110,000 of such
shares.
|
(22)
|
Represents
beneficial ownership of (i) 250,000 shares issuable upon the exercise
of
Other Warrants which may be exercised until January 2010 at an exercise
price of $1.00 per share and (ii) 248,300 shares of common stock
owned by
Mr. Arnone directly or by his
children.
|
(23)
|
Represents
beneficial ownership of (i) 250,000 shares issuable upon the exercise
of
Other Warrants which may be exercised until January 2010 at an exercise
price of $1.00 per share and (ii) 110,000 shares of common stock
owned by
Mr. Rempel. Additionally, Mr. Rempel is a principal of Moneta and
may
therefore be deemed to have beneficial ownership of the 220,000 shares
underlying Other Warrants held by Moneta, although Mr. Rempel disclaims
beneficial ownership of 110,000 of such
shares.
|
(24)
|
Represents
(i) 120,000 shares issuable upon the exercise of Other Warrants which
may
be exercised until January 2010 at an exercise price of $1.00 per
share
and (ii)100,000 shares issuable upon the exercise of Other Warrants
which
may be exercised until April 2009 at an exercise price of $2.25 per
share.
Thomas A. Gallo and Brenda C. Rempel are the officers, directors
and
shareholders of Moneta Capital Advisors, Inc. and have shared voting
power
with respect to the securities of Moneta Capital Advisors being offered
for resale in this prospectus.
|
(25)
|
Represents
100,000 shares issuable upon the exercise of Other Warrants which
may be
exercised until January 2010 at an exercise price of $1.00 per share.
Burton I. Koffman, David L. Koffman and Jeffrey Koffman are the officers
of HSK Funding, and each has sole voting power over the securities
being
offered for resale by HSK Funding in this
prospectus.
|
(26)
|
Represents
10,000 shares issuable upon the exercise of Other Warrants which
may be
exercised until January 2010 at an exercise price of $1.00 per
share.
|
(27)
|
Represents
10,000 shares issuable upon the exercise of Other Warrants which
may be
exercised until January 2010 at an exercise price of $1.00 per
share.
|
(28)
|
Represents
10,000 shares issuable upon the exercise of Other Warrants which
may be
exercised until January 2010 at an exercise price of $1.00 per
share.
|
·
|
ordinary
brokerage transactions and transactions in which a broker/dealer
solicits
purchasers;
|
·
|
block
trades in which a broker/dealer will attempt to sell the shares and/or
Series A Warrants as agent but may position and resell a portion
of the
block as principal to facilitate the
transaction;
|
·
|
purchases
by a broker/dealer as principal and resale by the broker/dealer for
its
account;
|
·
|
an
exchange distribution in accordance with the rules of any applicable
exchange;
|
·
|
privately
negotiated transactions;
|
·
|
settlement
of short sales;
|
·
|
broker/dealers
may agree with the Selling Shareholders to sell a specified number
of such
shares of common stock and/or Series A Warrants at a stipulated price
per
share or per warrant, as
applicable;
|
·
|
a
combination of any such methods of sale;
and
|
·
|
any
other method permitted pursuant to applicable
law.
|
·
|
$1,250,000
on the date of closing; and
|
·
|
$1,675,000
through the issuance to King’s Motorsports of a 6% $1,675,000 aggregate
principal amount note (the
"King's Note").
|
·
|
American
Honda Motor Company, Inc.;
|
·
|
Yamaha
Motor Corporation;
|
·
|
American
Suzuki Motor Corporation;
|
·
|
Kawasaki
Motors Corp. U.S.A., Inc.;
|
·
|
Ducati
North America; and
|
·
|
Polaris
Industries, Inc.
|
·
|
accounting;
|
·
|
finance;
|
·
|
insurance;
|
·
|
employee
benefits;
|
·
|
strategic
planning;
|
·
|
marketing;
|
·
|
purchasing;
and
|
|
|
·
|
management
information systems (MIS).
|
·
|
Super
Store Concept.
The "Super Store" has proven to be an effective strategy in the successful
consolidation of many other retail industries. Super Stores are the
choice
of consumers nationwide. These large stores represent and imply the
widest
offerings, the lowest prices, and, we believe, will contribute to
the
development of a more mainstream motorsports
marketplace.
|
·
|
Sales
and Service Effectiveness.
Consumers have become more sophisticated in evaluating and purchasing
products, as a result of the wide-spread availability of the internet
and
greater access to information, and, as a result, require a more
comprehensive offering, as well as intelligent and informative
presentations. Our superstore selling space provides a larger display
of
products, with a greater choice of brands and styles. We believe
that a
greater choice of products, under one roof, will lead to a more satisfying
shopping experience for customers and, in turn, increase product
sales.
|
·
|
Competitive
Workforce Development.
A
significant portion of the compensation we pay to our sales staff
is
commission based. We believe that commission-based compensation
provides
incentive for our salespersons to expend their greatest efforts
to sell
our products and services. Since their compensation is directly
related to
sales, our ability to hire successful salespersons is conditioned
upon
their belief that our dealerships will generate significant traffic
and
provide the inventory levels necessary to maximize sales opportunities.
Our goal to build a “market leader” presence, proper inventory levels and
an overall aggressive yet tactful approach, we believe, will attract
the
successful salespersons we need to sell our products and
services.
|
·
|
Inventory
Utilization.
We believe that by housing our inventory in one large central facility,
and distributing products from that facility to each of our dealerships
on
an as-needed basis, we will be able to deliver products to our
customers
faster than other dealerships, which are required to wait for delivery
of
out-of-stock products.
|
·
|
Marketing
Efficiencies.
With a regional presence, and the use of single creative themes,
tested
for effectiveness, we believe that we will be able to take advantage
of
semi-national and possibly national marketing opportunities which
typically offer reduced advertising rates based on the utilization
of
economies of scale. We also plan to maximize our use of cooperative
advertising.
|
·
|
E-Commerce
and Mail Order Opportunities.
We have developed e-commerce and mail order strategies for the
sale of
parts and accessories that will expand our customer base outside
of our
dealership territories. We believe that the expansion of our business,
over the internet and through mail order business, will assist
us in the
development of a national presence and create customer interest
to visit
one of our “Super Stores,” although no assurance can be given that it will
have such effect. We believe that increased efforts on internet
and
mail-order sales will increase revenues and also create additional
opportunities for strategic business relationships with dealerships
outside of the territories where our dealerships are located, although
no
assurance can be given.
|
|
2007
|
2006
|
Increase
(Decrease)
|
%
Change
|
|||||||||
Total
Revenues
|
$
|
98,696,692
|
$
|
100,751,786
|
(2,055,094
|
)
|
(2.0
|
)%
|
|||||
Cost
of Sales
|
$
|
84,109,662
|
$
|
86,340,024
|
(2,230,362
|
)
|
(2.6
|
)%
|
|||||
Operating
Expenses
|
$
|
12,190,626
|
$
|
13,294,060
|
$
|
(1,103,434
|
)
|
(8.3
|
)%
|
||||
Income
from Operations
|
$
|
2,396,404
|
$
|
1,117,702
|
$
|
1,278,702
|
114.4
|
%
|
|||||
Other
Income and (Expense)
|
$
|
(1,098,960
|
)
|
$
|
(1,371,000
|
)
|
$
|
(272,040
|
)
|
(19.8
|
)%
|
||
Income
(Loss) before Provision (Benefit) for Income Taxes
|
$
|
1,297,444
|
$
|
(253,298
|
)
|
$
|
1,550,742
|
NM
1
|
|||||
Net
Income (Loss) before Preferred Dividends
|
$
|
766,444
|
$
|
(181,198
|
)
|
$
|
947,642
|
NM
1
|
|
March
31,
2008
|
March
31,
2007
|
Increase
(Decrease)
|
%
Change
|
|||||||||
Total
Revenues
|
$
|
19,286,899
|
$
|
20,905,904
|
$
|
(1,619,005
|
)
|
(7.74
|
)%
|
||||
Cost
of Sales
|
$
|
16,904,499
|
$
|
18,428,636
|
$
|
(1,524,137
|
)
|
(8.27
|
)%
|
||||
Operating
Expenses
|
$
|
2,948,908
|
$
|
2,792,780
|
$
|
156,128
|
5.59
|
%
|
|||||
Income
(Loss) from Operations
|
$
|
(566,508
|
)
|
$
|
(315,512
|
)
|
$
|
250,996
|
79.55
|
%
|
|||
Other
Income and (Expense)
|
$
|
(231,273
|
)
|
$
|
(411,721
|
)
|
$
|
(180,448
|
)
|
(43.83
|
)%
|
||
Income
(Loss) before Provision (Benefit) for Income Taxes
|
$
|
(797,781
|
)
|
$
|
(727,233
|
)
|
$
|
70,548
|
9.70
|
%
|
|||
Net
Income (Loss) before Preferred Dividends
|
$
|
(539,781
|
)
|
$
|
(473,733
|
)
|
$
|
66,048
|
13.94
|
%
|
|
AGE
|
|
POSITIONS
HELD AND TENURE
|
|
Russell
A. Haehn
|
|
60
|
|
Chairman,
Chief Executive Officer, and Director since January
2004
|
Gregory
A. Haehn
|
|
62
|
|
President,
Chief Operating Officer, and Director since January
2004
|
Name and Positions
|
Fiscal
Year
|
Salary ($)
|
Bonus ($)
|
Option
Awards ($)
|
All Other
Compensation
($)
|
Total ($)
|
|||||||||||||
Russell A. Haehn,
|
2007
|
$
|
106,000
|
-0-
|
-0-
|
220,715(1
|
)
|
$
|
326,715
|
||||||||||
Chairman
and
|
2006
|
101,500
|
-0-
|
-0-
|
175,335(1
|
)
|
276,835
|
||||||||||||
Chief
Executive Officer
|
|||||||||||||||||||
|
|||||||||||||||||||
Gregory
A. Haehn,
|
2007
|
$
|
71,700
|
-0-
|
-0-
|
$
|
21,200(2
|
)
|
$
|
92,900
|
|||||||||
President
and
|
2006
|
71,600
|
-0-
|
-0-
|
34,430(2
|
)
|
106,030
|
||||||||||||
Chief
Operating Officer
|
(1)
|
Other
compensation payable to Russell Haehn includes amounts payable
to Mr.
Haehn directly from manufacturers of certain of the products we
sell, as
an incentive to sell these products. The total amounts paid to Mr.
Haehn during the years set forth in the above table were $208,715
in 2007
and $163,335 in 2006. Mr. Haehn also received an automobile allowance
of
$12,000 per year in each of those
years.
|
(2)
|
Other
compensation payable to Gregory Haehn reflects an automobile allowance
of
$12,000 in each of 2007 and 2006 and an aggregate of $9,200 paid
to Mr.
Haehn in 2007 and $22,430 in 2006 directly from manufacturers of
certain
of the products we sell, as an incentive to sell these
products.
|
|
Option
Awards
|
||||||||||||
Name
|
Number of
Securities
Underlying
Unexercised
Options
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
|
Option
Exercise
Price
|
Option
Expiration
Date
|
|||||||||
|
|
|
|
||||||||||
Russell
A. Haehn
|
1,000,000
|
—
|
$
|
1.25
|
8/16/2009
|
||||||||
|
|||||||||||||
Gregory
A. Haehn
|
500,000
|
—
|
$
|
1.25
|
8/16/2009
|
Name
|
|
Number of
Shares Owned
Beneficially (1)
|
|
Approximate
Percent of Class
Owned (1)(2)(3)
|
|||
Russell A.
Haehn (4)(6)
|
5,785,000
|
41.5
|
%
|
||||
Gregory
A. Haehn (5)(6)
|
3,235,000
|
24.1
|
%
|
||||
|
|||||||
All
Executive Officers and Directors, as a Group (two persons)
|
9,020,000
|
62.4
|
%
|
(1)
|
Beneficial
ownership information is based on information provided to the Company.
Except as indicated, and subject to community property laws when
applicable, the persons named in the table above have sole voting
and
investment power with respect to all shares of common stock shown
as
beneficially owned by them. Except as otherwise indicated, the
address of
such persons is the Company's offices at 13134 State Route 62,
Salem, Ohio
44460.
|
(2)
|
The
percentages shown are calculated based upon 12,948,316 shares of
common
stock outstanding on June 16, 2008. The numbers and percentages
shown
include the shares of common stock actually owned as of June 16,
2008 and
the shares of common stock that the person or group had the right
to
acquire within 60 days of June 16, 2008. In calculating the percentage
of
ownership, all shares of common stock that the identified person
or group
had the right to acquire within 60 days of June 16, 2008 upon the
exercise
of options and warrants are deemed to be outstanding for the purpose
of
computing the percentage of the shares of common stock owned by
such
person or group, but are not deemed to be outstanding for the purpose
of
computing the percentage of the shares of common stock owned by
any other
person.
|
(3)
|
Notwithstanding
each person or group's beneficial ownership of the Company's common
stock,
since the Series A Shares are entitled to vote together with the
common
stock on all matters submitted to shareholders for their approval,
each
person's or groups percentage voting interest (assuming exercise
of all
options) is: Russell A. Haehn - 30.7%; Gregory A. Haehn - 17.6%;
and all
executive officers and directors as a group -
46.7%.
|
(4)
|
Includes
a five-year non-qualified stock option, granted to Mr. Russell
Haehn on
August 16, 2004, to purchase up to 1,000,000 shares of common stock
at an
exercise price of $1.25 per share.
|
(5)
|
Includes
(i) 2,655,000 shares of common stock owned directly by Mr. Gregory
Haehn
and (ii) 80,000 shares of common stock owned by Mr. Haehn's minor
children. Does not include an additional 80,000 shares of common
stock
owned by two other of Mr. Gregory Haehn's children for which he
disclaims
any beneficial ownership. Also includes a five-year non-qualified
stock
option, granted to Mr. Gregory Haehn on August 16, 2004, to purchase
up to
500,000 shares of common stock at an exercise price of $1.25 per
share.
|
|
|
(6)
|
Russell
Haehn and Gregory Haehn are
brothers.
|
Audited
Consolidated Financial Statements:
|
|
|
|
Report
of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated
Balance Sheets as of December 31, 2007 and 2006
|
F-3
|
Consolidated
Statements of Income (Loss) for the years ended December 31, 2007
and
2006
|
F-5
|
Consolidated
Statements of Stockholders' Equity for the years ended December 31,
2007
and 2006
|
F-6
|
Consolidated
Statements of Cash Flows for the years ended December 31, 2007 and
2006
|
F-7
|
Notes
to Consolidated Financial Statements
|
F-9
|
|
|
Unaudited
Condensed Consolidated Financial Statements:
|
|
|
|
Condensed
Consolidated Balance Sheet as of March 31, 2008 (Unaudited) and December
31, 2007 (Audited)
|
F-29
|
Condensed
Consolidated Statements of Income for the Three Months ended March
31,
2008 (Unaudited) and 2007 (Unaudited)
|
F-31
|
Condensed
Consolidated Statements of Cash Flows for the Three Months ended
March 31,
2008 (Unaudited) and 2007 (Unaudited)
|
F-32
|
Notes
to Condensed Consolidated Unaudited Financial Statements
|
F-33
|
/s/
BAGELL, JOSPEHS, LEVINE & COMPANY, LLC
|
BAGELL,
JOSEPHS, LEVINE & COMPANY, LLC
|
Marlton,
New Jersey
April
2, 2008
|
|
2007
|
|
2006
|
||||
ASSETS
|
|||||||
CURRENT
ASSETS
|
|||||||
Cash
and cash equivalents
|
$
|
919,784
|
$
|
156,530
|
|||
Accounts
receivable, net
|
3,421,107
|
3,803,718
|
|||||
Inventories
|
25,626,033
|
21,267,135
|
|||||
Deferred
tax assets
|
22,000
|
113,900
|
|||||
Prepaid
expenses
|
28,069
|
10,131
|
|||||
TOTAL
CURRENT ASSETS
|
30,016,993
|
25,351,414
|
|||||
|
|||||||
FIXED
ASSETS, NET
|
1,666,828
|
2,004,274
|
|||||
|
|||||||
OTHER
ASSETS
|
|||||||
Intangibles,
net
|
1,688,950
|
1,688,950
|
|||||
Deposits
|
45,600
|
41,000
|
|||||
TOTAL
OTHER ASSETS
|
1,734,550
|
1,729,950
|
|||||
|
$
|
33,418,371
|
$
|
29,085,638
|
|
2007
|
|
2006
|
||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
|
|||||||
CURRENT
LIABILITIES
|
|||||||
Current
portion of long-term debt
|
$
|
796,510
|
$
|
1,513,665
|
|||
Notes
payable, floor plans
|
24,748,401
|
20,885,887
|
|||||
Note
payable, officer
|
119,551
|
352,500
|
|||||
Accounts
payable, trade
|
1,055,932
|
1,987,152
|
|||||
Accrued
expenses
|
583,102
|
493,939
|
|||||
Accrued
income taxes
|
436,200
|
-
|
|||||
Customer
deposits
|
834,594
|
196,246
|
|||||
TOTAL
CURRENT LIABILITIES
|
28,574,290
|
25,429,389
|
|||||
|
|||||||
DEFERRED
TAX LIABILITIES
|
13,500
|
20,600
|
|||||
|
|||||||
LONG-TERM
DEBT, Net of current portion
|
428,488
|
-
|
|||||
TOTAL
LIABILITIES
|
29,016,278
|
25,449,989
|
|||||
|
|||||||
COMMITMENTS
|
|||||||
|
|||||||
STOCKHOLDERS'
EQUITY
|
|||||||
Preferred
Stock, $.001 par value, authorized 5,000,000 shares 5,000 shares
designated Series A Convertible, $1,000 stated value 2,450 shares
issued
and outstanding at December 31, 2007 and 2006
|
2,450,000
|
2,450,000
|
|||||
Common
Stock, $.001 par value, authorized 75,000,000 shares 12,452,651 and
11,791,747 shares issued and outstanding at December 31, 2007 and
2006,
respectively
|
12,453
|
11,792
|
|||||
Additional
paid-in capital
|
2,053,218
|
1,868,592
|
|||||
Additional
paid-in capital - Options
|
93,426
|
93,426
|
|||||
Additional
paid-in capital - Warrants
|
1,724,800
|
1,724,800
|
|||||
Additional
paid-in capital - Beneficial conversions
|
1,303,400
|
1,303,400
|
|||||
Issuance
cost on Preferred Series A convertible
|
(786,762
|
)
|
(786,762
|
)
|
|||
Retained
earnings (deficit)
|
(2,448,442
|
)
|
(3,029,599
|
)
|
|||
TOTAL
STOCKHOLDERS' EQUITY
|
4,402,093
|
3,635,649
|
|||||
|
$
|
33,418,371
|
$
|
29,085,638
|
|
2007
|
|
2006
|
||||
REVENUES
|
|||||||
Sales
|
$
|
95,699,650
|
$
|
97,637,103
|
|||
Finance,
insurance and extended service revenues
|
2,997,042
|
3,114,683
|
|||||
TOTAL
REVENUES
|
98,696,692
|
100,751,786
|
|||||
|
|||||||
COST
OF SALES
|
84,109,662
|
86,340,024
|
|||||
GROSS
PROFIT
|
14,587,030
|
14,411,762
|
|||||
|
|||||||
OPERATING
EXPENSES
|
|||||||
Selling
expenses
|
7,973,104
|
8,313,676
|
|||||
General
and administrative expenses
|
4,217,522
|
4,980,384
|
|||||
|
12,190,626
|
13,294,060
|
|||||
INCOME
FROM OPERATIONS
|
2,396,404
|
1,117,702
|
|||||
|
|||||||
OTHER
INCOME AND (EXPENSE)
|
|||||||
Other
income, net
|
193,464
|
20,883
|
|||||
Interest
expense, net
|
(1,272,885
|
)
|
(1,413,383
|
)
|
|||
Gain
(loss) on sale of assets
|
(19,539
|
)
|
21,500
|
||||
|
(1,098,960
|
)
|
(1,371,000
|
)
|
|||
|
|||||||
INCOME
(LOSS) BEFORE PROVISION (BENEFITS) FOR TAXES
|
1,297,444
|
(253,298
|
)
|
||||
|
|||||||
PROVISION
(BENEFIT) FOR TAXES
|
531,000
|
(72,100
|
)
|
||||
INCOME
(LOSS) BEFORE PREFERRED DIVIDENDS
|
766,444
|
(181,198
|
)
|
||||
|
|||||||
PREFERRED
DIVIDENDS
|
(185,287
|
)
|
(273,526
|
)
|
|||
|
|||||||
NET
INCOME (LOSS) ATTRIBUTABLE TO
|
|||||||
COMMON
SHAREHOLDERS
|
$
|
581,157
|
$
|
(454,724
|
)
|
||
|
|||||||
BASIC
INCOME (LOSS) PER SHARE
|
0.05
|
$
|
(0.04
|
)
|
|||
|
|||||||
DILUTED
INCOME (LOSS) PER SHARE
|
$
|
0.02
|
$
|
(0.04
|
)
|
||
|
|||||||
WEIGHTED
AVERAGE SHARES OUTSTANDING
|
|||||||
BASIC
|
12,225,073
|
11,090,020
|
|||||
DILUTED
|
28,904,647
|
11,090,020
|
|
|
Preferred
Stock
|
|
Common
Stock
|
|
Paid-in
|
|
Paid-in
capital
-
|
|
Paid-in
capital
-
|
|
Paid-in
capital
-
Beneficial
|
|
Issuance
costs
preferred
|
|
Retained
earnings
|
|
|
|
|||||||||||||||
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
capital
|
|
Options
|
|
Warrants
|
|
conversion
|
|
series
A
|
|
(Deficit)
|
|
Total
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Balance,
December 31, 2005
|
2,870
|
2,870,000
|
10,445,000
|
10,445
|
641,277
|
109,442
|
2,020,480
|
1,526,840
|
(786,762
|
)
|
(2,574,875
|
)
|
3,816,847
|
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Conversion
of Series A preferred stock
|
(420
|
)
|
(420,000
|
)
|
938,500
|
939
|
954,197
|
(16,016
|
)
|
(295,680
|
)
|
(223,440
|
)
|
-
|
-
|
-
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Common
shares dividends issued
|
-
|
-
|
408,247
|
408
|
273,118
|
-
|
-
|
-
|
-
|
(273,526
|
)
|
-
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Net
loss for the year ended December 31, 2006
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(181,198
|
)
|
(181,198
|
)
|
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Balance,
December 31, 2006
|
2,450
|
2,450,000
|
11,791,747
|
11,792
|
1,868,592
|
93,426
|
1,724,800
|
1,303,400
|
(786,762
|
)
|
(3,029,599
|
)
|
3,635,649
|
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Common
shares dividends issued
|
-
|
-
|
660,904
|
661
|
184,626
|
-
|
-
|
-
|
-
|
(185,287
|
)
|
-
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Net
income for the year ended December 31, 2007
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
766,444
|
766,444
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Balance,
December 31, 2007
|
2,450
|
$
|
2,450,000
|
12,452,651
|
$
|
12,453
|
$
|
2,053,218
|
$
|
93,426
|
$
|
1,724,800
|
$
|
1,303,400
|
$
|
(786,762
|
)
|
$
|
(2,448,442
|
)
|
$
|
4,402,093
|
|
2007
|
|
2006
|
||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|||||||
Net
income (loss)
|
$
|
766,444
|
$
|
(181,198
|
)
|
||
Adjustments
to reconcile net income (loss) to net cash provided by operating
activities:
|
|||||||
Depreciation
|
441,481
|
432,558
|
|||||
Provision
for doubtful accounts
|
35,373
|
48,977
|
|||||
Deferred
federal income taxes (credit)
|
84,800
|
(145,400
|
)
|
||||
(Gain)
on sale of fixed assets
|
(184
|
)
|
(21,500
|
)
|
|||
Loss
on disposal of fixed assets
|
19,723
|
-
|
|||||
Decrease
in accounts receivable, net
|
347,238
|
992,938
|
|||||
Increase
in accounts receivable, employees
|
-
|
4,775
|
|||||
(Increase)
in inventories
|
(4,358,898
|
)
|
(4,492,066
|
)
|
|||
Decrease
in income taxes receivable
|
-
|
119,500
|
|||||
(Increase)
decrease in prepaid expenses
|
(17,938
|
)
|
64,124
|
||||
Increase
in customer deposits
|
638,348
|
109,195
|
|||||
Increase
in floor plan liability
|
3,862,514
|
3,726,168
|
|||||
(Decrease)
in accounts payable trade
|
(931,220
|
)
|
(383,217
|
)
|
|||
Increase
(decrease) in accrued expenses
|
525,363
|
(160,478
|
)
|
||||
NET
CASH PROVIDED BY OPERATING ACTIVITIES
|
1,413,044
|
114,376
|
|||||
|
|||||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|||||||
Purchase
of fixed assets
|
(73,482
|
)
|
(542,865
|
)
|
|||
Proceeds
from sale of fixed assets
|
7,000
|
21,500
|
|||||
Decrease
in accounts receivable affiliates
|
-
|
261,667
|
|||||
(Increase)
in deposits
|
(4,600
|
)
|
-
|
||||
NET
CASH (USED IN) INVESTING ACTIVITIES
|
(71,082
|
)
|
(259,698
|
)
|
|||
|
|||||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|||||||
Short-term
borrowings on note
|
-
|
200,000
|
|||||
Payments
on long-term debt
|
(345,759
|
)
|
(284,814
|
)
|
|||
Payments
received from officer loan
|
(232,949
|
)
|
159,365
|
||||
NET
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
|
(578,708
|
)
|
74,551
|
||||
NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
763,254
|
(70,771
|
)
|
||||
CASH
AND CASH EQUIVALENTS, beginning of Year
|
156,530
|
227,301
|
|||||
CASH
AND CASH EQUIVALENTS, end of Year
|
$
|
919,784
|
$
|
156,530
|
|
2007
|
|
2006
|
||||
OTHER
SUPPLEMENTARY CASH FLOW INFORMATION
|
|||||||
Debt
incurred for acquisition of sales agreement
|
$
|
-
|
$
|
100,000
|
|||
Debt
incurred for acquisition of vehicles and equipment
|
$
|
57,092
|
$
|
-
|
|||
Interest
paid
|
$
|
1,272,885
|
$
|
1,445,662
|
|||
Income
taxes paid
|
$
|
10,000
|
$
|
-
|
|||
Preferred
stock dividends paid in common stock
|
$
|
185,287
|
$
|
273,526
|
Fixtures,
and equipment
|
|
|
3-7
years
|
|
Vehicles
|
|
|
5
years
|
|
Leasehold
Improvements
|
|
|
10-39
years
|
|
|
|
Gross Carrying
|
|
|
|
|
Amount
|
|
|
Goodwill
|
$
|
1,588,950
|
||
Licensing
Agreement
|
100,000
|
|||
TOTAL
|
$
|
1,688,950
|
|
Years
Ended December
|
|
|||||
|
|
2007
|
|
2006
|
|
||
|
|
|
|||||
Net
income (loss) attributed to common shares
|
$
|
581,157
|
$
|
(454,724
|
)
|
||
|
|||||||
Weighted-average
common shares outstanding (Basic)
|
12,225,073
|
11,090,020
|
|||||
|
|||||||
Weighted-average
common stock equivalents:
|
|||||||
Warrants
|
16,114,000
|
0
|
|||||
Options
|
565,574
|
0
|
|||||
|
|||||||
Weighted-average
common shares outstanding (diluted)
|
28,904,647
|
11,090,020
|
|
2007
|
|
2006
|
||||
A/R-Customers
and dealers
|
$
|
1,771,686
|
$
|
2,129,416
|
|||
A/R-Manufacturers
|
787,201
|
805,279
|
|||||
A/R-Employees
|
25,994
|
4,649
|
|||||
Contracts
in transit
|
861,226
|
889,374
|
|||||
|
3,446,107
|
3,828,717
|
|||||
Allowance
for doubtful accounts
|
25,000
|
25,000
|
|||||
|
$
|
3,421,107
|
$
|
3,803,718
|
|
2007
|
|
2006
|
||||
Parts
and accessories
|
$
|
2,188,250
|
$
|
1,974,482
|
|||
Vehicles
|
23,437,783
|
19,292,653
|
|||||
TOTALS
|
$
|
25,626,033
|
$
|
21,267,135
|
|
2007
|
|
2006
|
||||
Fixtures
and equipment
|
$
|
2,132,504
|
$
|
2,151,547
|
|||
Vehicles
|
619,002
|
429,195
|
|||||
Leasehold
improvements
|
813,150
|
572,776
|
|||||
|
3,564,656
|
3,153,518
|
|||||
Less
accumulated depreciation
|
(1,505,658
|
)
|
(1,149,244
|
)
|
|||
NET
FIXED ASSETS
|
$
|
1,666,828
|
$
|
2,004,274
|
|
2007
|
|
2006
|
||||
Kawasaki
Motors Finance Company floor plan agreement provides for borrowings
up to
$2,300,000. Interest is payable monthly and fluctuates with prime
and
varies based on the type of unit financed and the length of time
the unit
remains on the floor plan (ranging from 8.5% to 9.5% at December
31, 2007
and 11.25% to 12.75% at December 31, 2006). Principal payments are
due
upon the sale of the specific units financed.
|
$
|
2,291,608
|
$
|
2,187,507
|
|||
GE
Commercial Distribution Finance floor plan agreement for Yamaha units
provides for borrowings up to $1,900,000. Interest is payable monthly
and
fluctuates with prime and varies based on the type of unit financed
and
the length of time the unit remains on the floor plan (ranging from
7.5%
at December 31, 2007 and 6% to 11.25% at December 31, 2006). Principal
payments are due upon the sale of the specific units financed.
|
2,595,894
|
2,715,618
|
|||||
GE
Commercial Distribution finance floor plan agreement for Suzuki units
provides for borrowings up to $150,000. The manufacturer at its discretion
may increase the borrowings. Interest is payable monthly and fluctuates
with prime and varies based on the type of unit financed and the
length of
time the unit remains on the floor plan (ranging from 7.5% to 15%
at
December 31, 2007 and 8.25% to 9.25% at December 31, 2006). Principal
payments are due upon the sale of the specific units financed.
|
6,448,146
|
4,719,465
|
|||||
Polaris
Acceptance floor plan agreement provides for borrowings up to $600,000.
The manufacturer at its discretion may increase the borrowings. The
agreement is collateralized by specific units financed. Interest
is
payable monthly and fluctuates with prime and varies based on the
type of
unit financed and the length of time the unit remains on the floor
plan
(ranging from 12% to 16.5% at December 31, 2007 and 13% to 17.25%
at
December 31, 2006). Principal payments are due the earlier of date
of sale
or one year after financing.
|
413,700
|
289,338
|
Fifth
Third Bank floor plan agreement provides for borrowings up to $2,500,000.
Interest is payable monthly and fluctuates with prime and varies
based on
the type of unit financed and the length of time the unit remains
on the
floor plan (7.25% at December 31, 2007 and 8.53% at December 31,
2006,
respectively). Principal payments are due upon the sale of the specific
units financed.
|
2,725,631
|
2,041,303
|
|||||
American
Honda Finance floor plan agreement provides for borrowings up to
$200,000.
The manufacturer at its discretion may increase the borrowings. Interest
is payable monthly and fluctuates with prime and varies based on
the type
of unit financed and the length of time the unit remains on the floor
plan. (9.33% at December 31, 2007 and 9.25% at December 31, 2006,
respectively). Principal payments are due upon the sale of the specific
units financed.
|
856,782
|
1,232,277
|
|||||
GE
Commercial Distribution Finance floor plan agreement for Ducati units
provides for borrowings up to $800,000. Interest is payable monthly
and
fluctuates with prime and varies based on the type of unit financed
and
the length of time the unit remains on the floor plan (ranging from
9.5%
to 10.50% at December 31, 2007, and 4.8% to 12.25% at December 31,
2006).
Principal payments are due upon the sale of the specific units financed.
|
798,764
|
356,021
|
|||||
GE
Commercial Distribution Finance floor plan agreement for Yamaha units
provides for borrowings up to $2,100,000. Interest is payable monthly
and
fluctuates with prime and varies based on the type of unit financed
and
the length of time the unit remains on the floor plan (ranging from
7.5%
to 10.5% at December 31, 2007 and 8.25% to 11.25% at December 31,
2006).
Principal payments are due upon the sale of the specific units financed.
|
1,210,118
|
1,824,710
|
|||||
GE
Commercial Distribution Finance floor plan agreement for Suzuki units
provides for borrowings up to $150,000. The manufacturer at its discretion
may increase the borrowings. Interest is payable monthly and fluctuates
with prime and varies based on the type of unit financed and the
length of
time the unit remains on the floor plan (ranging from 7.5% to 8.5%
at
December 31, 2007 and 3.6% to 9.25% at December 31, 2006). Principal
payments are due upon the sale of the specific units financed.
|
3,545,557
|
3,400,375
|
Fifth
Third Bank floor plan agreement provides for borrowing up to $2,500,000.
Interest is payable monthly and fluctuates with prime and varies
based on
the type of unit financed and the length of time the unit remains
on the
floor plan (7.25% at December 31, 2007 and 8.53% at December 31,
2006).
Principal payments are due upon the sale of the specific units
financed.
|
2,062,177
|
728,883
|
|||||
Kawasaki
Motors Finance Company floor plan agreement provides for borrowings
up to
$1,500,000. Interest is payable monthly and fluctuates with prime
and
varies based on the type of unit financed and the length of time
the unit
remains on the floor plan (ranging from 10.5% to 18% at December
31, 2007
and 18% at December 31, 2006). Principal payments are due upon the
sale of
the specific units financed.
|
1,494,424
|
1,358,910
|
|||||
GE
Commercial Distribution Finance floor plan agreement for Special
Product
units provides for borrowings up to $150,000. The manufacturer at
its
discretion may increase the borrowings. Interest is payable monthly
and
fluctuates with prime and varies based on the type of unit financed
and
the length of time the unit remains on the floor plan (10.5% at December
31, 2007). Principal payments are due upon the sale of the specific
units
financed.
|
45,015
|
-0-
|
|||||
GE
Commercial Distribution Finance floor plan agreement for CPI units
provides for borrowings up to $250,000. Interest is payable monthly
and
fluctuates with prime and varies based on the type of unit financed
and
the length of time the unit remains on the floor plan (ranging from
9% to
10.5% at December 31, 2007 and 10.25% at December 31, 2006 ). Principal
payments are due upon the sale of the specific units
financed.
|
260,585
|
31,480
|
|||||
TOTALS
|
$
|
24,748,401
|
$
|
20,885,887
|
|
2007
|
|
2006
|
||||
|
|
|
|||||
A
$450,000 note payable with HSK Funding bearing interest at 15% at
December
31, 2006.
|
$
|
-0-
|
$
|
450,000
|
A
$330,000 note payable with HSK Funding bearing interest at 15.5%
at
December 31, 2007.
|
$
|
320,000
|
$
|
-0-
|
|||
|
|||||||
Note
payable to bank bearing interest at 9.96%, payable in monthly installments
of $929, through May 2011, collateralized by vehicle.
|
32,170
|
-0-
|
|||||
|
|||||||
Note
payable to bank bearing interest at 6.95%, payable in monthly installments
of $897, through June 2009, collateralized by vehicle.
|
15,285
|
-0-
|
|||||
|
|||||||
A
$250,000 revolving line of credit at a bank bearing interest at a
variable
rate of prime plus 1% (8.25% and 9.25% at December 31, 2007 and 2006,
respectively). The loan is collateralized by substantially all the
Company’s assets and the building owned personally by an officer.
|
249,863
|
249,863
|
|||||
|
|||||||
Note
payable to bank bearing interest at prime plus 1% payable in monthly
principal installments of $17,360 plus interest, through August 2010.
The
note is collateralized by substantially all Company’s assets, and
shareholder guarantees.
|
607,680
|
781,280
|
|||||
|
|||||||
Note
payable to bank bearing interest at 8.6%, payable in monthly installments
of $537, through May 2007, collateralized by vehicle.
|
-0-
|
2,522
|
|||||
|
|||||||
Note
payable to Champion Cycle for the purchase of their Kawasaki license
bearing interest at 5%, payable in monthly installments of $10,000
plus
interest through June 2007.
|
-0-
|
30,000
|
|||||
|
1,224,998
|
1,513,665
|
|||||
Less
current maturities
|
796,510
|
1,513,665
|
|||||
TOTALS
|
$
|
428,488
|
$
|
-0-
|
YEAR
ENDING
|
AMOUNT
|
|||
2008
|
$
|
796,510
|
||
2009
|
222,776
|
|||
2010
|
201,181
|
|||
2011
|
4,531
|
|||
2012
|
-0-
|
|||
TOTAL
|
$
|
1,224,998
|
Income
taxes (credit) consisted of the following:
|
2007
|
|
2006
|
||||
Federal:
|
|||||||
Current
|
$
|
492,750
|
$
|
(92,700
|
)
|
||
Deferred
|
38,250
|
20,600
|
|||||
|
|||||||
TOTALS
|
$
|
531,000
|
$
|
(72,100
|
)
|
|
|
2007
|
|
2006
|
|||
Deferred
tax assets - current and long-term:
|
|||||||
Allowance
for doubtful accounts and net operating loss carryforward
|
$
|
22,000
|
$
|
113,900
|
|||
|
|||||||
Deferred
tax liabilities - long-term:
|
|||||||
Depreciation
|
(38,250
|
)
|
(20,600
|
)
|
|||
TOTALS
|
$
|
(16,250
|
)
|
$
|
(93,300
|
)
|
YEAR
ENDING
|
AMOUNT
|
|||
2008
|
$
|
1,031,548
|
||
2009
|
1,055,441
|
|||
2010
|
1,078,464
|
|||
2011
|
1,102,176
|
|||
2012
|
1,126,601
|
|||
|
$
|
5,394,230
|
|
March 31,
2008
|
December 31,
2007
|
|||||
|
Unaudited
|
Audited
|
|||||
CURRENT ASSETS
|
|||||||
Cash
and cash equivalents
|
$
|
483,351
|
$
|
919,784
|
|||
Accounts
receivable, net
|
3,727,613
|
3,421,107
|
|||||
Inventories
|
24,242,500
|
25,626,033
|
|||||
Deferred
tax assets
|
280,000
|
22,000
|
|||||
Prepaid
expenses
|
14,078
|
28,069
|
|||||
TOTAL
CURRENT ASSETS
|
28,747,542
|
30,016,993
|
|||||
|
|||||||
FIXED
ASSETS, NET
|
1,559,015
|
1,666,828
|
|||||
|
|||||||
OTHER
ASSETS
|
|||||||
Intangibles,
net
|
1,688,950
|
1,688,950
|
|||||
Deposits
|
45,600
|
45,600
|
|||||
TOTAL
OTHER ASSETS
|
1,734,550
|
1,734,550
|
|||||
TOTAL
ASSETS
|
$
|
32,041,107
|
$
|
33,418,371
|
|
March 31,
2008
|
December 31,
2007
|
|||||
|
Unaudited
|
Audited
|
|||||
CURRENT LIABILITIES
|
|||||||
Current
portion of long-term debt
|
$
|
751,896
|
$
|
796,510
|
|||
Notes
payable, floor plans
|
23,354,779
|
24,748,401
|
|||||
Note
payable, officer
|
312,435
|
119,551
|
|||||
Accounts
payable, trade
|
1,391,528
|
1,055,932
|
|||||
Accrued
expenses
|
654,956
|
583,102
|
|||||
Accrued
tax provision
|
426,200
|
436,200
|
|||||
Customer
deposits
|
881,919
|
834,594
|
|||||
TOTAL
CURRENT LIABILITIES
|
27,773,713
|
28,574,290
|
|||||
|
|||||||
DEFERRED
TAX LIABILITIES
|
13,500
|
13,500
|
|||||
|
|||||||
LONG-TERM
DEBT, NET
|
391,582
|
428,488
|
|||||
TOTAL
LIABILITIES
|
28,178,795
|
29,016,278
|
|||||
|
|||||||
COMMITMENTS
AND CONTINGENCIES
|
|||||||
|
|||||||
STOCKHOLDERS'
EQUITY
|
|||||||
Preferred
stock, $.001 par value, authorized 5,000,000 shares 5,000 shares
designated Series A Convertible, $1,000 stated value 2,450 shares
issued
and outstanding at March 31, 2008 and December 31, 2007.
|
2,450,000
|
2,450,000
|
|||||
Common
stock, $.001 par value, authorized 75,000,000 shares 12,948,316 and
12,452,651 shares issued and outstanding at March 31, 2008 and December
31, 2007, respectively
|
12,949
|
12,453
|
|||||
Additional
paid-in capital
|
2,141,942
|
2,053,218
|
|||||
Additional
paid-in capital - Options
|
93,426
|
93,426
|
|||||
Additional
paid-in capital - Warrants
|
1,724,800
|
1,724,800
|
|||||
Additional
paid-in capital - Beneficial conversions
|
1,303,400
|
1,303,400
|
|||||
Issuance
cost on preferred series A shares convertible
|
(786,762
|
)
|
(786,762
|
)
|
|||
Accumulated
deficit
|
(3,077,443
|
)
|
(2,448,442
|
)
|
|||
TOTAL
STOCKHOLDERS' EQUITY
|
3,862,312
|
4,402,093
|
|||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
32,041,107
|
$
|
33,418,371
|
|
2008
|
2007
|
|||||
|
(Unaudited)
|
(Unaudited)
|
|||||
REVENUES
|
|||||||
Sales
|
$
|
18,832,426
|
$
|
20,034,116
|
|||
Finance,
insurance and extended service revenues
|
454,473
|
871,788
|
|||||
TOTAL
REVENUES
|
19,286,899
|
20,905,904
|
|||||
|
|||||||
COST
OF SALES
|
16,904,499
|
18,428,636
|
|||||
GROSS
PROFIT
|
2,382,400
|
2,477,268
|
|||||
|
|||||||
OPERATING
EXPENSES
|
|||||||
Selling
expenses
|
1,871,343
|
1,790,171
|
|||||
General
and administrative expenses
|
1,077,565
|
1,002,609
|
|||||
|
2,948,908
|
2,792,780
|
|||||
LOSS
FROM OPERATIONS
|
(566,508
|
)
|
(315,512
|
)
|
|||
|
|||||||
OTHER
INCOME AND (EXPENSE)
|
|||||||
Other
income, net
|
35,593
|
4,706
|
|||||
Gain
on sale of asset
|
-
|
184
|
|||||
Interest
expense, net
|
(266,866
|
)
|
(416,611
|
)
|
|||
|
(231,273
|
)
|
(411,721
|
)
|
|||
|
|||||||
LOSS
BEFORE BENEFIT FOR TAXES
|
(797,781
|
)
|
(727,233
|
)
|
|||
|
|||||||
BENEFIT
FOR INCOME TAXES
|
(258,000
|
)
|
(253,500
|
)
|
|||
|
|||||||
LOSS
BEFORE PREFERRED DIVIDENDS
|
(539,781
|
)
|
(473,733
|
)
|
|||
|
|||||||
PREFERRED
DIVIDENDS
|
89,220
|
92,703
|
|||||
NET
LOSS ATTRIBUTABLE TO
|
|||||||
COMMON
SHAREHOLDERS
|
$
|
(629,001
|
)
|
$
|
(566,436
|
)
|
|
|
|||||||
BASIC
AND DILUTED LOSS PER SHARE
|
$
|
(0.05
|
)
|
$
|
(0.05
|
)
|
|
|
|||||||
WEIGHTED
AVERAGE SHARES OUTSTANDING
|
|||||||
|
|||||||
BASIC
AND DILUTED
|
12,621,504
|
11,936,889
|
2008
|
2007
|
||||||
|
|
||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|||||||
Net
loss
|
$
|
(539,781
|
)
|
$
|
(473,733
|
)
|
|
Adjustments
to reconcile net loss to net cash
|
|||||||
provided
by (used in) operating activities:
|
|||||||
Depreciation
|
108,653
|
109,487
|
|||||
Deferred
federal income tax credit (net)
|
(258,000
|
)
|
(253,500
|
)
|
|||
Bad
debt expense
|
-
|
21,831
|
|||||
(Gain)
on sale of asset
|
-
|
(184
|
)
|
||||
(Increase)
decrease in accounts receivable, net
|
(306,506
|
)
|
201,875
|
||||
(Increase)
in accounts receivable, employees
|
-
|
(14,882
|
)
|
||||
Decrease
in inventories
|
1,383,533
|
610,246
|
|||||
(Increase)
decrease in prepaid expenses
|
13,991
|
(23,700
|
)
|
||||
Increase
in customer deposits
|
47,325
|
419,491
|
|||||
Increase
in accounts payable trade
|
335,596
|
1,127,012
|
|||||
(Decrease)
in floor plan liability
|
(1,393,622
|
)
|
(1,040,509
|
)
|
|||
(Decrease)
in accrued income taxes
|
(10,000
|
)
|
-
|
||||
Increase
in accrued expenses
|
71,854
|
133,346
|
|||||
NET
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
|
(546,957
|
)
|
816,780
|
||||
|
|||||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|||||||
Acquisition
of fixed assets
|
(840
|
)
|
(16,722
|
)
|
|||
Proceeds
from sale of property and equipment
|
-
|
7,000
|
|||||
NET
CASH (USED IN) INVESTING ACTIVITIES
|
(840
|
)
|
(9,722
|
)
|
|||
|
|||||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|||||||
Payments
on long-term debt
|
(81,520
|
)
|
(63,716
|
)
|
|||
Proceeds
from note payable - officer
|
202,884
|
-
|
|||||
Payments
on note payable to officer
|
(10,000
|
)
|
(82,277
|
)
|
|||
NET
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
|
111,364
|
(145,993
|
)
|
||||
NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
(436,433
|
)
|
661,065
|
||||
|
|||||||
CASH
AND CASH EQUIVALENTS, beginning of Period
|
919,784
|
156,530
|
|||||
CASH
AND CASH EQUIVALENTS, end of Period
|
$
|
483,351
|
$
|
817,595
|
|||
|
|||||||
OTHER
SUPPLEMENTARY CASH FLOW INFORMATION
|
|||||||
Income
taxes paid
|
$
|
10,000
|
$
|
-
|
|||
Interest
paid
|
$
|
266,866
|
$
|
416,611
|
|||
Preferred
stock dividends paid in common stock
|
$
|
89,220
|
$
|
92,703
|
Fixtures
and equipment
|
3-7
years
|
Vehicles
|
5
years
|
Leasehold
Improvements
|
39
years
|
|
Gross Carrying
|
|||
|
Amount
|
|||
|
|
|||
Goodwill
|
$
|
1,588,950
|
||
Licensing
Agreement
|
$
|
100,000
|
||
TOTAL
|
$
|
1,688,950
|
|
Three Months Ended
|
||||||
|
March 31,
|
March 31,
|
|||||
|
2008
|
2007
|
|||||
|
|
|
|||||
Net
income (loss) attributed to common shares
|
$
|
(629,001
|
)
|
$
|
(566,436
|
)
|
|
|
|||||||
Weighted-average
common shares outstanding (Basic)
|
12,621,504
|
11,936,889
|
|||||
|
|||||||
Weighted-average
common stock equivalents:
|
|||||||
Warrants
|
-
|
-
|
|||||
Options
|
-
|
-
|
|||||
Weighted-average
common shares outstanding
|
12,651,504
|
11,936,889
|
|
March 31,
|
|||
|
2008
|
|||
|
|
|||
Fixtures
and equipment
|
$
|
2,133,344
|
||
Vehicles
|
422,917
|
|||
Leasehold
improvements
|
617,065
|
|||
3,173,326
|
||||
Less
accumulated depreciation
|
1,614,311
|
|||
NET
FIXED ASSETS
|
$
|
1,559,015
|
Year
Ending
|
Amount
|
|||
|
|
|||
2009
|
$
|
1,037,967
|
||
2010
|
1,061,101
|
|||
2011
|
1,084,294
|
|||
2012
|
1,108,180
|
|||
2013
|
1,132,787
|
|||
|
$
|
5,424,329
|
|
March 31,
|
March 31,
|
|||||
|
2008
|
2007
|
|||||
|
|
|
|||||
Current
|
$
|
(258,000
|
)
|
$
|
(247,100
|
)
|
|
Deferred
|
0
|
(6,400
|
)
|
||||
|
$
|
(258,000
|
)
|
$
|
(253,500
|
)
|
|
March 31,
|
December 31,
|
|||||
|
2008
|
2007
|
|||||
Deferred tax assets
- current and long term:
|
|||||||
Allowance
for doubtful account and net operating loss
carryforward
|
$
|
280,000
|
$
|
22,000
|
|||
|
|||||||
Deferred
tax liabilities - long term
|
(426,200
|
)
|
(38,250
|
)
|
|||
TOTALS
|
$
|
(146,200
|
)
|
$
|
(16,250
|
)
|