SEC Info - Aid Auto Stores Inc/DE - ‘POS AM’ on 8/12/96

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Aid Auto Stores Inc/DE – ‘POS AM’ on 8/12/96

As of: Monday, 8/12/96 · Accession #: 937599-96-11 · File #: 33-89190

  As Of                Filer                Filing    For·On·As Docs:Size

 8/12/96  Aid Auto Stores Inc/DE            POS AM                 1:264K

Post-Effective Amendment
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: POS AM      Post-Effective Amendment                             100±   453K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Additional Information Aid Auto Stores Business Capitalization Certain Transactions Common Stock Current Business Operations Description of Securities Dilution Exhibits Experts Government Regulation Indemnification of Director's and Officers Index to Financial Statements Legal Matters Liquidity and Capital Resources Management Management's Discussion and Analysis of Financial Condition and Results of Operations Market for Securities and Related Stockholder Matters Offering, The Other Expenses of Issuance and Distribution Plan of Distribution Principal and Selling Securityholders Prospectus Summary Recent Sales of Unregistered Securities Redeemable Warrants Results of Operations Risk Factors Seasonality Selected Financial Data Shares Eligible for Future Sale Stock Option Plan Superstore Growth Program The Offering Undertakings Underwriter's Warrants Use of Proceeds Warrants
1	1st Page - Filing Submission
"	Prospectus Summary
"	The Offering
"	Use of Proceeds
"	Risk Factors
"	Capitalization
"	Dilution
"	Market for Securities and Related Stockholder Matters
"	Common Stock
"	Warrants
"	Selected Financial Data
"	Management's Discussion and Analysis of Financial Condition and Results of Operations
"	Results of Operations
"	Liquidity and Capital Resources
"	Seasonality
"	Business
"	Current Business Operations
"	Aid Auto Stores
"	Superstore Growth Program
"	Government Regulation
"	Management
"	Stock Option Plan
"	Certain Transactions
"	Principal and Selling Securityholders
"	Description of Securities
"	Redeemable Warrants
"	Underwriter's Warrants
"	Shares Eligible for Future Sale
"	Plan of Distribution
"	Legal Matters
"	Experts
"	Additional Information
"	Index to Financial Statements
"	Item 24. Indemnification of Director's and Officers
"	Item 25. Other Expenses of Issuance and Distribution
"	Item 26. Recent Sales of Unregistered Securities
"	Item 27. Exhibits
"	Item 28. Undertakings

As filed with the Securities and Exchange Commission on August 1, 1996
Registration No. 33-89190

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

POST-EFFECTIVE AMENDMENT NO. 1

FORM SB-2

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

AID AUTO STORES, INC.
(Name of small business issuer in its charter)
DELAWARE 5013 11-2254654
(State or other jurisdiction of (Primary standard (I.R.S. employer
incorporation or organization) industrial classification identification no.)
code number)

PHILIP L. STEPHEN
275 Grand Boulevard 275 Grand Boulevard
Westbury, New York 11590 Westbury, New York 11590
(516) 338-7889 (516) 338-7889
(Address and (Name, address
telephone number and telephone number
of principal of agent for service)
executive offices)

Copies of all communications, including all communications sent to the agent for
service, should be sent to:
GARY T. MOOMJIAN, ESQ.
Breslow & Walker
875 Third Avenue
New York, New York 10022
(212) 832-1930

Approximate date of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box.

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.

The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
becomes effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.

Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus which
is a part of this Registration Statement shall relate to, among other
securities, certain of the Warrants and shares of Common Stock, par value
$.001 per share, previously registered under Registration Statement on
Form SB-2 (No. 33-89190).

CALCULATION OF REGISTRATION FEE

Proposed Proposed
Maximum Maximum
Title of Each Class Amount Offering Aggregate Amount of
of Securities to be Price Per Offering Registration
Registered Registered Share Price Fee

Common Stock, par value
$.001 per share (1) 2,070,000 $4.00 $8,280,000 *
Common Stock, par value
$.001 per share (2) 180,000 $7.90 $1,422,000 *
Warrants, each to purchase
one share of Common
Stock (2) 180,000 $.158 $ 28,440 *
Common Stock, par value
$.001 per share (3) 180,000 $6.60 $1,188,000 *
Total Registration Fee . . . . . . . . . . . . . . . . . . . . . . . $ *

* Filing fee not required. Previously registered and included herein
pursuant to Rule 429.

(1) Issuable upon exercise of publicly traded redeemable Warrants.

(2) Issuable upon exercise of the Underwriter's Warrants. This
Registration Statement also relates to the resale of these
securities by the holders thereof or their transferees.

(3) Issuable upon exercise of the warrants underlying the Underwriter's
Warrants. This Registration Statement also relates to the resale of
these securities by the holders thereof or their transferees.

Pursuant to Rule 416 of the Securities Act of 1933, this Registration
Statement also relates to such additional indeterminate number of shares of
Common Stock as may become issuable by reason of stock splits, dividends and
similar adjustments, in accordance with the antidilution provisions of the
publicly traded redeemable Warrants, the Underwriter's Warrants and the
warrants underlying the Underwriter's Warrants.

Subject to Completion, Dated August 1, 1996

AID AUTO STORES, INC.

2,430,000 Shares of Common Stock and
Redeemable Warrants to Purchase
180,000 Shares of Common Stock

This Prospectus covers up to 2,070,000 shares of common stock, par value
$.001 per share ("Common Stock"), of Aid Auto Stores, Inc. (the "Company"),
issuable upon exercise of publicly-traded redeemable warrants of the Company
(the "Warrants"). Each Warrant entitles the registered holder thereof to
purchase one share of Common Stock at a price of $4.00, subject to adjustment
in certain circumstances, at any time through and including April 10, 1998.
The Warrants are redeemable by the Company, upon the consent of Whale
Securities Co., L.P. ("Whale"), the underwriter of the Company's initial public
offering of securities in April 1995 (the "Initial Public Offering"), at any
time, upon notice of not less than 30 days, at a price of $.10 per Warrant,
provided that the closing bid quotation of the Common Stock on all 20 trading
days ending on the third day prior to the day on which the Company gives notice
has been at least 150% (currently $6.00, subject to adjustment) of the then
effective price of the Warrants.

This Prospectus also relates to 180,000 shares of Common Stock and 180,000
warrants (the "Whale Warrants") underlying warrants (the "Underwriter's
Warrants") issued to Whale in connection with the Initial Public Offering, as
well as 180,000 shares of Common Stock underlying the Whale Warrants. The
Underwriter's Warrants to purchase Common Stock are exercisable, subject to
adjustment, at $7.90 per share, and the Underwriter's Warrants to purchase
the Whale Warrants are exercisable at $.158 per Warrant. The Whale Warrants
are generally on the same terms as the Warrants, except that the exercise
price is $6.60 per share. The shares of Common Stock issuable upon exercise
of the Underwriter's Warrants and Whale Warrants may be sold from time to
time by Whale or by its transferees. See "Plan of Distribution."

The Common Stock and Warrants are quoted on the Nasdaq Small-Cap Market
("Nasdaq") under the symbols "AIDA" and "AIDAW," respectively, and listed on
the Boston Stock Exchange under the symbols "AID" and "AIDW", respectively.
On July 31, 1996 the closing sales price of the Common Stock and Warrants, as
reported by Nasdaq, was $2.75 and $.3125, respectively. See "Market for
Securities and Related Stockholder Matters."

THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE
OF RISK AND IMMEDIATE SUBSTANTIAL DILUTION AND SHOULD NOT BE PURCHASED
BY INVESTORS WHO CANNOT AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. SEE
"RISK FACTORS" COMMENCING ON PAGE 7 AND "DILUTION."

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR BY ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

In the event all of the Warrants, Underwriter's Warrants and Whale
Warrants are exercised, the proceeds to the Company would be $10,918,440,
before deduction of expenses, including legal, accounting and miscellaneous
expenses payable by the Company, which are estimated to be $50,000. In
addition, a solicitation fee of 5% (up to $414,000) may be payable to Whale
in connection with any solicitation in connection with the Warrants. See "Use
of Proceeds" and "Plan of Distribution".

The date of this Prospectus is _________, 1996

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 and at the following Regional
Offices of the Commission: Chicago Regional Office, 219 South Dearborn
Street, Chicago, Illinois 60604 and New York Regional Office, 7 World Trade
Center, New York, New York 10048. Copies of such material can be obtained from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Company is listed on the
Boston Stock Exchange. Reports and other information concerning the Company can
be inspected at the office of such exchange.

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by reference to the
more detailed information and consolidated financial statements,including the
notes thereto, appearing elsewhere in this Prospectus. Each prospective
investor is urged to read this Prospectus in its entirety.

The Company

Aid Auto Stores, Inc. (the "Company") is a major metropolitan area
retailer, franchiser and wholesaler of automotive parts and accessories,
targeting both the do-it-yourself ("DIY") and commercial markets. As of
March 31, 1996, the Company sold products through 17 Company-owned Aid Auto
Stores and supplied products to an additional 43 franchised Aid Auto Stores.
The Company, through its wholly-owned subsidiary, Ames Automotive Warehouse,
Inc. ("Ames"), also supplies automotive products to hundreds of
non-automotive chain stores and independent jobbers and installers in New York,
New Jersey and Connecticut. The Aid Auto stores sell an extensive variety of
name-brand automotive parts, accessories and chemicals, as well as an assortment
of products marketed under the "Aid" brand (the "Aid Mark"), and also under
the "Perfect Choice" brand (the "Perfect Choice Mark"). Aid Auto Stores
have operated for more than 40 years and the Company believes that the Aid
Auto name is widely recognized by consumers in the New York metropolitan
area. The Company is seeking to capitalize on such name recognition, as well
as its expertise and operating history, warehouse distribution channels and
vendor relationships, to become the dominant automotive aftermarket parts
distributor and retailer in the Northeast.

The focus of the Company's growth strategy is a Company-owned mini
warehouse Superstore program, which program was instituted in 1995 following
the completion of the Company's initial public offering of securities in
April 1995 (the "Initial Public Offering"). The Company currently contemplates
the opening of up to 48 to 60 Superstores in five years from the date of the
Initial Public Offering. Each Superstore will enable consumers and
businesses to buy quality automotive products from a large inventory at the
lowest possible prices and to do so in a convenient and informed manner. The
Company will need to seek additional debt or equity financing, in addition to
the net proceeds of the Initial Public Offering, as the proceeds of such
offering and cash flow from operations will not be sufficient to fund the
continuing cost of this program. The success of the Superstore growth
strategy will be dependent upon, among other things, market acceptance of the
Company's Superstore concept, the availability of suitable store sites, the
timely development and construction of stores, the ability to hire skilled
management and other personnel, management's ability to successfully manage
growth (including monitoring stores and controlling costs), and the
availability of adequate financing to fund its future expansion plans, of
which there can be no assurance. At March 31, 1996, the Company had outstanding
indebtedness in the aggregate amount of $10,005,575, which amount could
restrict the Company's ability to raise additional debt financing in the future.

In July 1995, the Company held the Grand Opening of its first new
Company-owned Superstore, located in Long Island City, in the New York City
Borough of Queens. In March 1996, the Company opened Superstore locations
on a main thoroughfare in Brooklyn, New York and in a major shopping mall in
the New York City Borough of Staten Island. In June 1996, the Company opened
a Superstore in Jamaica, in the Borough of Queens, New York. The Company
also intends to grow its operations by means of acquiring other companies,
including Aid Auto Stores franchises, having parts and accessories retail
stores. As part of this growth strategy, in December 1995, the Company
acquired ten franchised Aid Auto Stores located in Long Island, New York.
Following the acquisition, the Company commenced converting up to nine of the
ten stores into Aid Auto Superstores. In this respect, one of the stores was
reopened as a Superstore in a new, expanded location in May 1996 and another
was expanded and reopened as a Superstore in June 1996. Seven of the eight
remaining stores have, to date, implemented the Superstore advertising,
inventory and merchandising program. For the three months ended March 31,
1996, approximately 52% of the Company operating revenues were derived from
retail sales, as compared to only approximately 14% for the three months
ended March 31, 1995. Prior to 1996, the Company had derived the majority of
its revenues from wholesale sales to franchises and through its Ames subsidiary.

The Company was originally formed in New York in 1953 and became a Delaware
corporation in 1971. The Company's executive offices are located at 275 Grand
Boulevard, Westbury, New York 11590 and its telephone number is
(516) 338-7889. Unless the context otherwise requires, all references to the
Company include its wholly-owned subsidiaries, Aid Flatlands Avenue, Inc.,
Ames Automotive Warehouse, Inc., White Plains Aid, Inc., Bellmore Aid Inc.,
Bethpage Superstore Aid Auto, Inc., North Babylon Superstore Aid Auto, Inc.,
Glen Cove Superstore Aid Auto, Inc., Oceanside Superstore Aid Auto, Inc.,
Jersey City Superstore Aid Auto, Inc., Hillside Avenue Aid, Inc. and Perfect
Choice Automotive Products, Inc.

THE OFFERING

Securities Offered: . . . . . . . . 2,070,000 shares of Common Stock issuable
upon exercise of the Warrants; 180,000
shares of Common Stock(1) and 180,000
Whale Warrants(1) underlying the
Underwriter's Warrants, as well as
180,000 shares of Common Stock(1)
underlying the 180,000 Whale Warrants.

Shares of Common Stock Outstanding

Before Offering . . . . . . . . 3,957,596(2)

After Offering . . . . . . . . 6,387,596(2)(3)

Redeemable Warrants . . . . . . . Each Warrant entitles the holder thereof
to purchase one share of Common Stock
through April 10, 1998 at a price of
$4.00, subject to adjustment in certain
circumstances. The Warrants are subject
to redemption by the Company upon the
consent of Whale, at any time upon notice
of not less than 30 days, at a price of
$.10 per Warrant, provided that the
closing bid quotation of the Common Stock
on all 20 trading days ending on the
third day prior to the day on which the
Company gives notice has been at least 150%
(currently $6.00, subject to adjustment) of
the then effective exercise price of the
Warrants. The Warrants will be
exercisable until the close of business
on the date fixed for redemption.

Whale Warrants . . . . . . . . . . The Whale Warrants are generally on the
same term as the Warrants, except that
the exercise price is $6.60 per share.

Estimated Net Proceeds . . . . . . $10,454,440

Use of Proceeds. . . . . . . . . . Opening of new Superstores, repayment of
bank indebtedness, marketing and
advertising, and working capital and
general corporate purposes. See "Use of
Proceeds."

Risk Factors . . . . . . . . . . . Investment in the securities offered
hereby involves a high degree of risk and
immediate substantial dilution and should
not be purchased by investors who cannot
afford the loss of their entire
investment. Such risk factors include,
without limitation, the uncertainty of
the Superstore growth strategy, the net
loss in 1995 incurred by the Company, the
need for additional financing and the
significant amount of outstanding
indebtedness. See "Risk Factors" and
"Dilution."

NASDAQ Symbols . . . . . . . . . . Common Stock - AIDA
Warrants - AIDAW

Boston Exchange Symbols. . . . . . Common Stock - AID
Warrants - AIDW

(1) This Prospectus also relates to the resale of these securities by the
holders thereof or their transferees.

(2) Does not include an aggregate of 400,000 shares of Common Stock issuable
under the Company's 1995 Stock Option Plan.

(3) Assumes the exercise of all of the Warrants, Underwriter's Warrants and
Whale Warrants.

Summary Consolidated Financial Information

The summary consolidated financial data set forth below is derived from
and should be read in conjunction with the consolidated financial statements,
including the notes thereto, appearing elsewhere in this Prospectus.

Consolidated Statement of Operations Data:

Three months ended March 31, Year Ended December 31,

1996 1995 1995 1994 1993

Operating
revenues (1) 6,574,037 $4,087,269 $20,263,833 $24,182,096 $24,901,794

Income (loss)
from continuing
operations (2) 41,603 (254,713) (703,881) 19,763 350,613

Net income (loss) 41,603 (254,713) (703,881) 19,763 51,153

Income (loss)
from continuing
operations per
share $.01 $(.13) $(.22) $.01 $.18

Net income
(loss) per share $.01 $(.13) $(.22) $.01 $.03

Weighted average
number of shares
outstanding 3,957,596 2,000,000 3,269,374 2,000,000 2,000,000

Consolidated Balance Sheet Data:

March 31, 1996

Actual As Adjusted(3) December 31, 1995

Working capital $ 6,572,794 $17,027,234 $ 6,552,699

Total assets 25,305,911 33,760,351 25,301,722

Long-term debt 3,560,783 3,560,783 3,613,623

Stockholders' equity 9,080,304 19,534,744 9,038,701

(1) Includes both net retail and wholesale sales, and franchise fees.

(2) Reflects income from continuing operations net of income taxes. In
December 1993, the Company ceased operation of a subsidiary conducting a
service bay operation, which subsidiary had been generating losses.

(3) Gives effect to the receipt of funds from the exercise of the Warrants, the
Underwriter's Warrants and the Whale Warrants and the anticipated
application of the estimated net proceeds therefrom. See "Use of
Proceeds."

RISK FACTORS

The following factors, in addition to those discussed elsewhere in this
Prospectus, should be carefully considered in evaluating the Company and its
business.

1. Uncertainty of Superstore Growth Strategy. In April 1995, the Company
completed its Initial Public Offering, allocating a majority of the proceeds
therefrom for implementing its mini warehouse Superstore growth strategy.
Pursuant to the Superstore program, the Company currently anticipates opening
up to 48 to 60 Superstores over a five-year period from the completion of the
Initial Public Offering. Historically, Aid Auto Stores have been
predominantly owned and operated by independent franchisees and the Company
has limited experience in operating its own stores. Prior to the Initial
Public Offering, the Company had no experience in effectuating rapid
expansion or in establishing or operating a mini warehouse Superstore style
retail chain. The success of the Superstore growth strategy will be dependent
upon, among other things, market acceptance of the Company's Superstore
concept, the availability of suitable store sites, the timely development and
construction of stores, the ability to hire skilled management and other
personnel, management's ability to successfully manage growth (including
monitoring stores and controlling costs), and the availability of adequate
financing or sufficient cash flow from operations to fund its future
expansion, of which there can be no assurance. The Company's growth strategy
may also be effected by factors not within its control, such as increased
competition, future downturns in the economy, changes in the automotive
market and weather patterns. Moreover, it is possible that the actual costs
in establishing the Superstores or the revenues generated from their operation
will not correspond to the economic models and projections upon which the
Company's Superstore growth program is based. In the event actual costs
exceed projected costs or actual revenues are less than projected revenues,
the Company may need to adjust the number of Superstores it proposes to open.
The Company opened its first Superstore in July 1995, and, in each of March and
June 1996, the Company opened one additional Superstore. In addition, the
Company acquired 10 franchised Aid Auto Stores located in Long Island,
New York, and has commenced converting nine of these stores into Superstores
(of which two have, to date, reopened as Superstores). At March 31, 1996,
there were 17 Aid Auto Stores owned and operated by the Company and 43 owned
and operated by franchisees. There can be no assurance that the Superstore
growth strategy will be successful. See "Business-Superstore Growth Program."

2. Net Loss in 1995; Decreases in Revenues in 1995 and 1994; Effect of
Superstore Growth Program on Profitability. The Company generated operating
revenues of $20,263,833, $24,182,096 and $24,901,794 during the years ended
December 31, 1995, 1994 and 1993, respectively. For 1995, the Company had a
net loss of $703,881, whereas in 1994 and 1993 it achieved income from
continuing operations of $19,763 and $350,613, respectively. For the three
months ended March 31, 1996, the Company achieved operating revenues of
$6,574,037 and net income of $41,603, as compared to operating revenues of
$4,087,269 and a net loss of $254,713 for the three months ended March 31,
1995. The Company's operating expenses have increased significantly in
connection with the Company's mini warehouse Superstore growth program and,
accordingly, the Company's profitability is dependent on corresponding
increases in revenues from the Superstore operations, of which there can be
no assurance. Moreover, future events, including unanticipated expenses,
increased competition, or extremely severe weather could have an adverse
effect on the Company's longer-term operating margins and results of
operations. There can be no assurance that the Company's Superstore growth
program will result in an increase in the profitability of the Company's
operations. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and "Consolidated Financial Statements."

3. Need for Additional Financing to Implement Superstore Growth Program. The
Company anticipates, based on currently proposed plans and assumptions relating
to its operations (including the costs associated with, and the timetable
for, its proposed expansion), the Company's working capital, its current loan
facility, together with projected cash flow from operations, will be
sufficient to satisfy its contemplated cash requirements for at least 12
months (including the contemplated conversion of nine of the stores acquired
in the recent acquisition into Superstores, and the opening of at least three
Superstore outlets during that period). In the event that the Company's cash
flow proves to be insufficient (due to unanticipated expenses, difficulties,
problems or otherwise), or the Company determines to open a greater number of
Superstores (including by opening new stores and/or by acquisitions), the
Company will be required to seek additional financing or curtail such
expansion activities. The Company will need to seek additional debt or equity
financing, as the Company does not anticipate that its current resources and
cash flow from operations will be sufficient to fund the continuing cost of
its growth program to open 48 to 60 Superstores. To the extent that the
Company seeks financing through the issuance of equity securities, any such
issuance of equity securities would result in dilution to the interests of
the Company's stockholders. Additionally, to the extent that the Company
incurs indebtedness to fund increased levels of accounts receivables or to
finance the acquisition of capital equipment or issues debt securities to fund
the Superstore growth program, the Company will be subject to risks
associated with incurring substantial indebtedness, including the risks that
interest rates may fluctuate and cash flow may be insufficient to pay
principal and interest on any such indebtedness. Other than the Company's
existing bank line of credit, the Company has no current arrangements with
respect to, or sources of, additional financing, and it is not anticipated
that the Company's current majority stockholder will provide any portion of the
Company's future financing requirements or any further personal guarantees.
There can be no assurance that any additional financing will be available to
the Company on commercially reasonable terms, or at all. See "Use of
Proceeds" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

4. Impact of Superstores on Franchisees. More recent franchise agreements,
with respect to 15 of the existing franchised Aid Auto Stores, contain a
provision granting the franchisee an exclusive territory of a radius of 1.5
miles from its location, in consideration of the franchisee purchasing
annually at least 75% of its inventory from the Company. In 1994 and 1995,
none of these franchisees purchased inventory from the Company at such level.
Thus, the Company believes that upon notice and failure by the franchisee to
cure within the appropriate time period, it will be able to terminate such
territorial exclusivity. Notwithstanding the foregoing, the Company intends
to select sites for its Superstores in areas that are not served by existing
Aid Auto Stores. However, it is possible that the opening of a cluster of
Superstores in a target market may reduce the business of existing franchised
Aid Auto Stores. While the Company believes that the opening of its
Superstores will not violate its franchise agreements or any other laws or
regulations, there can be no assurance that an independent franchisee whose
business is adversely effected by the Superstore program would not seek to
litigate its claims, the defense of which could become costly for the Company
and the outcome of which is uncertain. See "Business."

5. Significant Outstanding Demand and Other Indebtedness; Loan Covenants and
Security Interests; Personal Guaranty. The Company's operations have been
funded in part by the incurrence of significant indebtedness. Of the
Company's total indebtedness of $10,005,575 outstanding at March 31, 1996, an
aggregate of $5,749,898 was outstanding under a $6,000,000 line of credit
with Israel Discount Bank of New York (the "Bank"), $1,482,272 was
outstanding and evidenced by a promissory note issued in connection with the
purchase of 10 Long Island franchised stores, $273,405 was outstanding and
evidenced by miscellaneous promissory notes and $2,500,000 was outstanding
under a promissory note to Philip L. Stephen, Chairman of the Board, Chief
Executive Officer and President of the Company. Substantially all of the
Company's assets are pledged to the Bank as collateral under the line of credit,
and the Company is prohibited from granting a security interest to any party
other than the Bank, which could limit the Company's ability to obtain debt
financing to implement its expansion plans. In addition, the Company's
agreement with the Bank limits or prohibits the Company, subject to certain
exceptions, from merging or consolidating with another corporation or selling
all or substantially all of its assets. The Company is currently in
compliance with, or has received waivers from, all of the covenants contained
in the loan agreement with the Bank. In the event that the Company is unable
to make payment on its line of credit when due on August 31, 1997, the Bank
could foreclose on the collateral, which would have a material adverse effect
on the Company. The $1,507,396 promissory note issued in connection with the
Long Island acquisition, which had an outstanding balance of $1,482,272 at March
31, 1996, is for a period of 10 years, is subordinate to the Company's Bank
indebtedness, and bears interest at one percentage point below the prime rate
charged by the Bank in the first year and at the prime rate thereafter. The
Company's obligation to Mr. Stephen is evidenced by a promissory note, which
is subordinated to the Bank indebtedness. The note bears interest at the rate
charged by the Bank, payable monthly, with principal payable in quarterly
installments which commenced on May 1, 1996 and will continue through
February 1, 2000. The note provides for immediate payment thereof upon, among
other things, a change in a majority of the continuing directors of the
Company (as defined in the note) or a demand by the Bank of payment in full
of outstanding Bank indebtedness. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and "Certain Transactions."

6. Competition. Both the DIY and commercial portions of the Company's business
are highly competitive. Within its current market (the New York metropolitan
area), the largest share of the DIY market is held by independently owned
stores which, while principally selling to wholesale accounts, have
significant DIY sales. The Company also competes with other regional
automotive parts chains such as R&S Strauss, and general merchandise,
discount and convenience chains that carry automotive products. The Company's
major competitors in supplying the commercial market include independent
warehouse distributors and parts stores, automobile dealerships and national
warehouse distributors such as National Automotive Parts Association (NAPA).
The Company may also face competition from large regional automotive
aftermarket chains based in other areas of the country, in the event that
they enter the Company's market, such as Pep Boys which has recently opened
four stores in Long Island, New York. Competitors such as R&S Strauss and
NAPA, and potential competitors such as Pep Boys, are larger than the Company
and have greater financial, marketing, personnel and other resources than the
Company. See "Business-Competition."

7. Dependence on Suppliers. The Company is dependent on close relationships
with its suppliers of automotive parts and equipment, and its ability to
purchase products directly from these manufacturers at favorable prices and
on favorable terms. The Company views its relationships with its suppliers as
excellent, and believes that alternative sources exist for most of the
products it purchases. However, the Company does not maintain supply
contracts with any of its suppliers, and it is possible that the loss of any
significant supplier could have a material adverse effect on the Company if
not replaced in a timely manner and upon suitable terms. The Company's
principal suppliers currently provide the Company with certain incentives
such as volume purchasing discounts and cooperative advertising and market
development funds, which incentive amounts generally range from between 5%
and 10% of the listed purchase prices. A reduction or discontinuance of these
incentives could also have a material adverse effect on the Company and its
operations.

8. Dependence on Management and Key Personnel. The Company is dependent upon
the services of its senior executives, particularly Philip L. Stephen, who is
Chairman of the Board, President and Chief Executive Officer of the Company.
Although the Company has obtained a key-man life insurance policy on the life
of Mr. Stephen in the amount of $2,000,000 and has entered into an employment
contract with Mr. Stephen which expires in April 1998, the loss of his
services could have a material adverse impact on the Company. Also, the
Company's successful growth will depend upon, among other things, the
successful recruiting of other qualified Superstore personnel. There can be
no assurance that the Company will be able to retain existing employees or
that it will be able to find and retain the other personnel it requires on
acceptable terms. See "Management."

9. Impact of Seasonality. The Company's business is seasonal primarily as a
result of the impact of weather conditions on store sales. Store sales and
profits have historically been higher in the second and third quarters (April
through September) of each year than in the first and fourth quarters, for
which the Company generally achieves only nominal profits or incurs net
losses. Weather extremes tend to enhance sales by causing a higher incidence
of parts failure and increasing sales of seasonal products. However,
extremely severe winter weather or rainy conditions tend to reduce sales by
causing deferral of elective maintenance. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations-Seasonality."

10. Control by Management. Mr. Philip L. Stephen, Chairman of the Board,
President and Chief Executive Officer of the Company, owns approximately
50.5% of the currently issued and outstanding Common Stock. Accordingly,
Mr. Stephen is in a position to control the Company, including the election
of all or a majority of the directors of the Company. Even if some or all of
the securities offered hereby are issued, Mr. Stephen would likely maintain
effective control of the Company. See "Management" and "Principal and
Selling Securityholders."

11. Government Regulation. The Company is subject to federal and state laws,
rules and regulations that govern the offer and sale of franchises. To offer
and sell franchises, the Company is required by the United States Federal Trade
Commission to furnish to prospective franchisees a current franchise offering
disclosure document. The Company uses a Uniform Franchise Offering Circular
("UFOC") to satisfy this disclosure obligation, which is delivered to each
prospective franchisee in its current franchise markets (New York and New
Jersey). In addition, the Company is required to register and file a UFOC with
the appropriate New York State authority. The Company periodically updates its
UFOC to include information about new officers and directors, recent financial
information and other material events. In addition to New York, other states
require registration, special prescribed disclosure or other compliance
before the Company could offer franchises in those jurisdictions. However,
the Company has no current plans to offer franchises in any states other than
New York and New Jersey, if at all. See "Business-Current Business
Operations-Aid Auto Franchises" and "Government Regulation."

12. Immediate and Substantial Dilution. The sale of the shares offered hereby
involves an immediate and substantial dilution between the pro forma net
tangible book value per share before and after the offering and the exercise
of the Warrants, the Underwriter's Warrants and the Whale Warrants. See
"Dilution."

13. No Dividends. The Company has never paid cash dividends on its Common
Stock and does not expect to pay cash dividends in the foreseeable future.
See "Market for Securities and Related Stockholder Matters."

14. Shares Eligible for Future Sale; Registration Rights. The Company
currently has 3,957,596 shares of Common Stock outstanding. Of such shares,
2,157,596 are deemed to be "restricted securities", as that term is defined
under Rule 144 promulgated under the Securities Act, of which 2,000,000 may be
sold at any time without registration pursuant to such rule. The holders of
the balance of such shares (157,596 shares) have certain piggyback
registration rights. No prediction can be made as to the effect, if any,
that the sale of such shares of Common Stock or even the availability of such
shares for sale will have on the market prices prevailing from time to time.
The possibility that substantial amounts of Common Stock may be sold in the
public market may adversely affect prevailing market prices for the Common
Stock or the Warrants and could impair the Company's ability to raise capital
through the sale of its equity securities. See "Principal and Selling
Securityholders," "Description of Securities" and "Shares Eligible for Future
Sale."

15. Possible Inability to Exercise Warrants. Although certain exemptions in
the securities laws of certain states might permit Warrants to be transferred
to purchasers in states other than those in which the Warrants were initially
qualified, the Company will be prevented from issuing Common Stock in such
other states upon the exercise of the Warrants unless an exemption from
qualification is available or unless the issuance of Common Stock upon
exercise of the Warrants is qualified. The Company is under no obligation to
seek, and may decide not to seek or may not be able to obtain, qualification
of the issuance of such Common Stock in all of the states in which the
ultimate purchasers of the Warrants reside. In such a case, the Warrants held
will expire and have no value if such Warrants cannot be sold. Accordingly,
the market for the Warrants may be limited because of these restrictions.
Further, a current prospectus covering the Common Stock issuable upon
exercise of the Warrants must be in effect before the Company may accept
Warrant exercises. Although the Company has committed to use its best efforts
to do so, there can be no assurance that the Company will be able to maintain
an appropriate prospectus in effect. See "Description of Securities-Redeemable
Warrants."

16. Potential Adverse Effect of Redemption of Warrants. The Warrants may be
redeemed by the Company, upon the consent of Whale, at any time upon notice of
not less than 30 days, at a price of $.10 per Warrant, provided the closing
bid quotation of the Common Stock on all 20 trading days ending on the third
day prior to the day on which the Company gives notice has been at least 150%
(currently $6.00) of the then effective exercise price of the Warrants.
Redemption of the Warrants could force the holders to exercise the Warrants
and pay the exercise price at a time when it may be disadvantageous for the
holders to do so, to sell the Warrants at the then current market price when
they might otherwise wish to hold the Warrants or to accept the redemption
price, which is likely to be substantially less than the market value of the
Warrants at the time of redemption. See "Description of Securities-Redeemable
Warrants."

17. Authorization and Discretionary Issuance of Preferred Stock. The
Company's Certificate of Incorporation authorizes the issuance of 2,000,000
shares of "blank check" preferred stock with such designations, rights and
preferences as may be determined from time to time by the Board of Directors.
Accordingly, the Board of Directors is empowered, without stockholder
approval, to issue preferred stock with dividend, liquidation, conversion,
voting or other rights which could adversely affect the voting power or other
rights of the holders of the Company's Common Stock. In the event of
issuance, the preferred stock could be utilized, under certain circumstances,
as a method of discouraging, delaying or preventing a change in control of
the Company. Although the Company has no present intention to issue any
shares of its preferred stock, there can be no assurance that the Company
will not do so in the future. See "Description of Securities-Preferred Stock."

18. Possible Delisting of Securities from Nasdaq System; Risks Associated with
Low-Priced Stocks. In order to maintain listing on Nasdaq, a company must
maintain $2,000,000 in total assets, a $200,000 market value of the public
float and $1,000,000 in total capital and surplus. In addition, continued
inclusion requires two market makers and a minimum bid price of $1.00 per
share; provided, however, that if a company falls below such minimum bid
price, it will remain eligible for continued inclusion on Nasdaq if the
market value of the public float is at least $1,000,000 and the company has
$2,000,000 in capital and surplus. The failure to meet these maintenance
criteria in the future may result in the delisting of the Company's
securities from Nasdaq and trading, if any, in the Company's securities would
thereafter be conducted in the non-Nasdaq over-the-counter market. As a
result of such delisting, an investor may find it more difficult to dispose
of, or to obtain accurate quotations as to the market value of the Company's
securities. In addition, if the Common Stock was to become delisted from
trading on Nasdaq and the trading price of the Common Stock were to fall
below $5.00 per share, trading in the Common Stock would also be subject to
the requirements of certain rules promulgated under the Securities Exchange
Act of 1934, as amended, which require additional disclosure by broker-
dealers in connection with any trades involving a stock defined as a penny
stock (generally, any non-Nasdaq equity security that has a market price of
less than $5.00 per share, subject to certain exceptions). Such rules require
the delivery, prior to any penny stock transaction, of a disclosure schedule
explaining the penny stock market and the risks associated therewith, and
impose various sales practice requirements on broker-dealers who sell penny
stocks to persons other than established customers and accredited investors
(generally institutions). For these types of transactions, the broker-dealer
must make a special suitability determination for the purchaser and have
received the purchaser's written consent to the transaction prior to sale.
The additional burdens imposed upon broker-dealers by such requirements may
discourage them from effecting transactions in the Common Stock and Warrants,
which could severely limit the liquidity of the Common Stock and Warrants
and the ability of purchasers in this offering to sell the Common Stock and
Warrants in the secondary market.

USE OF PROCEEDS

In the event that all of the Warrants, Underwriter's Warrants and Whale
Warrants are exercised, the net proceeds to the Company pursuant to the
offering hereby are estimated at approximately $10,454,440, after deducting
the maximum potential solicitation fee (5%) payable to Whale ($414,000) and
other expenses estimated at $50,000. Such net proceeds are expected to be
expended for the opening of new Superstores, marketing and advertising and
working capital and general corporate purposes, approximately as follows:

Approximate
Approximate Percentage of
Application of Proceeds Dollar Amount Net Proceeds

Opening of new Superstores(1) $ 6,300,000 60.3%
Repayment of Bank indebtedness(2) 2,000,000 19.1
Marketing and advertising(3) 750,000 7.2
Working capital and general
corporate purposes 1,404,440 13.4

Total . . . . . . . . . . . . . . . $10,454,440 100.0%

(1) Represents the estimated costs associated with the opening of approximately
14 new Superstore outlets. Superstore sites may be newly leased or
subleased depending on whether the Company is acquiring and constructing
on empty space, or acquiring and expanding upon the business and
assuming the lease of an existing independent automotive parts store or
franchised Aid Auto Store. The Company believes that the cost to open
each Superstore will average approximately $450,000, including site
selection costs, lease deposits, leasehold improvements or construction
costs, acquisition of furniture, fixtures and equipment, opening
inventory, and other miscellaneous pre-opening expenses (including
salaries, training, promotion and advertising). The Company believes
that the opening costs will be approximately the same in the case of a
purchase and expansion of an existing store's business. However, all
estimates are subject to significant variation. See "Business-
Superstore Growth Program."

(2) Represents the repayment of a portion of the Company's outstanding Bank
indebtedness, which, as of March 31, 1996, aggregates $5,749,898. Such
indebtedness is in the form of a revolving credit line which expires
August 31, 1997 and bears interest at the Bank's prime rate. See
"Management's Discussion and Analysis of Financial Condition and Results
of Operations - Liquidity and Capital Resources" and "Certain
Transactions."

(3) Represents anticipated costs associated with the expansion of the Company's
marketing, sales and advertising activities relating to the promotion of
the existing and proposed Superstores and to increases in promotion with
respect to its wholesale activities through Ames. See "Business-
Superstore Growth Program" and "Business - Current Business Operations -
Ames Wholesale Operations."

The foregoing represents the Company's estimate of its use of the net
proceeds of this offering based on current planning and business, industry
and economic conditions, and the Company's future revenues and expenditures.
The proposed application of the net proceeds is subject to changes as market
and financial conditions and other opportunities that may be presented to the
Company may dictate. The costs required to open the Company's Superstores
may vary depending upon such factors as the actual selling space, the amount
of rent and security that must be paid in advance (and, in some cases, the
purchase price of an existing store's business), and the extent of
construction costs and leasehold improvements required to be paid by the
Company. Accordingly, in the event the Company's estimates as to the costs
required to open and operate its initial stores prove to be inaccurate, the
Company may reduce the number of Superstores it proposes to open and/or
utilize working capital in addition to the net proceeds of this offering
allocated for the store openings.

In the event less than the maximum proceeds are raised, the Company intends
to allocate the proceeds to the same uses in the approximate same proportions
as if the maximum proceeds were raised.

To the extent that the net proceeds are not immediately required for the
purposes described above, they may be invested principally in either U.S.
government securities, short-term certificates of deposit, money market funds
or other short-term interest-bearing investments. The Company may also use a
substantial portion of these proceeds to temporarily reduce the balance
outstanding under the Company's Bank line of credit.

CAPITALIZATION

The following table sets forth the capitalization and short-term debt of the
Company as of March 31, 1996, and as adjusted to give effect to the sale of the
2,430,000 shares of Common Stock and 180,000 Whale Warrants offered hereby and
the application of the estimated net proceeds therefrom.

March 31, 1996

Actual As Adjusted

Short-term debt. . . . . . . . . . . . . . . . . $ 6,444,792 $ 4,444,792

Long-term debt, less current portion . . . . . . $ 1,529,533 $ 1,529,533

Note payable - stockholder . . . . . . . . . . . 2,031,250 2,031,250

Stockholders' Equity:
Preferred Stock, par value $.001 per share;
2,000,000 shares authorized, no shares issued. -- --

Common Stock, par value $.001 per share,
15,000,000 shares authorized;
3,957,596 shares issued and outstanding;
6,387,596 shares issued and
outstanding as adjusted (1) . . . . . . . . . . 3,958 6,388

Additional paid-in capital. . . . . . . . . . . 9,006,809 19,458,819

Retained earnings . . . . . . . . . . . . . . . 69,537 69,537

Total stockholders' equity. . . . . . . . . . 9,080,304 19,534,744

Total capitalization. . . . . . . . . . . . $19,085,879 $27,540,319

(1) Does not include: (i) 228,500 shares of Common Stock reserved for issuance
upon the exercise of outstanding options under the Stock Option Plan and
(ii) 171,500 shares of Common Stock reserved for issuance upon exercise
of options available for future grant under the Stock Option Plan. See
"Management--Stock Option Plan," "Certain Transactions," "Description of
Securities" and "Plan of Distribution."

DILUTION

The difference between the public offering price per share of Common Stock
and the net tangible book value per share after this offering constitutes the
dilution to investors in this offering. Net tangible book value per share is
determined by dividing the net tangible book value of the Company (total
tangible assets less total liabilities) by the number of outstanding shares
of Common Stock.

At March 31, 1996 the net tangible book value of the Company was $5,160,564,
or $1.30 per share of Common Stock. After giving effect to the exercise of the
Underwriter's Warrants for 180,000 shares of Common Stock and 180,000 Whale
Warrants, and the exercise of 2,070,000 Warrants, at their respective
exercise prices (less the maximum potential solicitation fee and estimated
expenses of this offering), the net tangible book value of the Company at
March 31, 1996 would have been $15,615,004, or $2.44 per share, representing
an immediate increase in net tangible book value of $1.14 per share to the
existing stockholders of the Company and an immediate dilution of $1.56 per
share to exercising Warrant-holders. The following table illustrates the
foregoing information with respect to dilution to exercising Warrant-holders
on a per share basis:

Initial public offering price. . . . . . . . . . . . . . $4.00
Net tangible book value before offering. . . . . . . . $1.30
Increase attributable to new investors . . . . . . . . 1.14

Net tangible book value after offering . . . . . . . . 2.44

Dilution to new investors. . . . . . . . . . . . . . . 1.56

MARKET FOR SECURITIES AND RELATED STOCKHOLDER MATTERS

The Common Stock and Warrants have been traded on the over-the-counter market
with quotations reported on the National Association of Securities Dealers,
Small Cap Market, Automatic Quotation System (NASDAQ) under the symbol "AIDA"
and "AIDAW," respectively, and on the Boston Stock Exchange under the symbols
"AID" and "AIDW," respectively, since April 11, 1995, and all corresponding
prices represent high and low closing sales prices for the Common Stock on
NASDAQ for the periods indicated.

Common Stock
Price Range

High Low

Year Ended December 31, 1996

1st Quarter 4-7/8 2-2/8

2nd Quarter 4-11/32 3-1/2

3rd Quarter (to July 31, 1996) 3-7/8 2-3/8

Year Ended December 31, 1995

2nd Quarter (from April 11, 1996) 5-1/4 4-1/8

3rd Quarter 5-1/2 4-3/4

4th Quarter 4-7/8 3-3/4

Warrants

Year Ended December 31, 1996

1st Quarter 13/16 5/16

2nd Quarter 5/8 3/8

3rd Quarter (to July 31, 1996) 15/32 7/32

Year Ended December 31, 1995

2nd Quarter (from April 11, 1995) 1-1/8 23/32

3rd Quarter 1-3/8 21/32

4th Quarter 15/16 3/8

As of December 31, 1995, there were 20 holders of record of the Common
Stock, and 11 holders of record of Warrants. Such numbers do not include
shares held in "street name."

The Company has never paid cash dividends on its Common Stock. Holders of
Common Stock are entitled to receive such dividends as may be declared and
paid from time to time by the Board of Directors out of funds legally
available therefor. The Company intends to retain any earnings for the
operation and expansion of its business and does not anticipate paying cash
dividends in the foreseeable future. Any future determination as to the
payment of cash dividends will depend upon future earnings, results of
operations, capital requirements, the Company's financial condition and such
other factors as the Board of Directors may consider.

SELECTED FINANCIAL DATA

The selected financial data for the years ended December 31, 1995, 1994 and
1993 is derived from the Company's audited consolidated financial statements.
The selected financial data for the three months ended March 31, 1996 and 1995
is derived from the unaudited financial statements of the Company. The
financial data set forth below should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the consolidated financial statements, including the notes thereto, appearing
elsewhere in this Prospectus.

[Enlarge/Download Table]
Consolidated Statement of Operations Data:

March 31, Ended December 31,
1996 1995 1995 1994 1993

Operating revenues(1) $6,574,037 $4,087,629 $20,263,833 $24,182,096 $24,901,794
Cost of sales 4,010,476 2,848,606 13,594,260 16,980,220 17,346,107
Selling and shipping 1,686,688 718,261 3,411,456 3,477,350 3,490,136
General and administrative 682,057 574,865 3,476,824 3,180,210 3,049,526
Income (loss) from continuing
operations before income taxes 50,218 (214,713) (539,881) 91,763 668,613
Income (loss) from continuing
operations(2) 41,603 (254,713) (703,881) 19,763 350,613
Net income (loss) 41,603 (254,713) (703,881) 19,763 51,153
Income (loss) from continuing
operations per share $.01 $(.13) ($.22) $.01 $.18
Net income (loss) per share $.01 $(.13) ($.22) $.01 $.03
Weighted average number of
shares outstanding 3,957,596 2,000,000 3,269,374 2,000,000 2,000,000

Consolidated Balance Sheet Data:

Year Ended December 31,
March 31, 1996 1995 1994

Working capital $ 6,572,794 $ 6,552,699 $ 2,051,508
Total assets 25,305,911 25,301,722 12,860,115
Long-term debt 3,560,783 3,613,623 2,777,239
Stockholders' equity 9,080,304 9,038,701 1,695,709

(1) Includes both net wholesale and retail sales, and franchise fees.

(2) Reflects income from continuing operations net of income taxes. In
December 1993, the Company ceased operation of a subsidiary conducting
a service bay operation, which subsidiary had been generating losses.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

General

Aid Auto Stores, Inc. (the "Company"), formed in 1953, is a retailer,
franchisor and wholesaler of automotive parts and accessories. As of December
31, 1995, the Company supplied products to 62 Aid Auto Stores, including 48
franchised stores and 14 Company-owned stores, and, through its wholly-owned
subsidiary, Ames Automotive Warehouse, Inc. ("Ames"), to hundreds of
non-automotive chain stores and independent jobbers and installers in New
York, New Jersey and Connecticut. At March 31, 1996, the number of
Company-owned stores increased to 17 and the number of franchised stores
decreased to 43. During the periods 1993 to 1995, the vast majority of Aid
Auto Stores were owned by franchisees of the Company. In 1994, in
anticipation of the commencement of its Company-owned mini-warehouse
Superstore growth strategy, the Company curtailed the granting of new
franchises, so as to preserve favorable locations for Company-owned
Superstores. In April 1995, the Company consummated its Initial Public
Offering, the net proceeds of which were approximately $7,300,000. As of
March 31, 1996, the Company had opened three new Superstores and had acquired
(in December 1995) ten franchised Aid Auto Stores located in Long Island,
New York, of which it currently intends to convert nine to Superstores. It
is currently anticipated that the Company will open up to 48 to 60
Superstores in the five-year period following the date of the Initial Public
Offering. The number of stores to be opened during this period is subject to
substantial variation depending upon, among other factors, the availability
of adequate financing to fund the cost of adding the additional stores, the
level of success of the initial Superstores, the availability of suitable
store sites or acquisition candidates, and the timely development and
construction of new stores. The anticipated favorable financial performance
of the Company is tied, to a large extent, to the transition of the Company
to the Superstore program and the strong future potential of that program.
The Company's operating expenses are expected to increase significantly in
connection with the Superstore growth program and, accordingly, the Company's
future profitability will depend upon corresponding increases in revenue from
Superstore operations, of which there can be no assurance.

On July 22, 1995, the Company held the Grand Opening of its first new
Company-owned Superstore. The store is located in Long Island City, in the
New York City Borough of Queens. In March 1996, the Company opened
Superstore locations on a main thoroughfare in Brooklyn, New York and in a
major shopping mall in the New York City Borough of Staten Island.

Income from operations for the first quarter of 1996 compared to the loss
from operations in the first quarter of 1995 is primarily due to the
increased volume of high profit margin retail sales as a result of the
increased number of Company-owned stores. These increased retail sales more
than offset the reduction in sales to franchises which is attributable to the
termination of 19 franchises over the last 27 months due to their failure to
meet the standards set for franchisees and for other reasons. Except for two
additional franchises granted to existing franchisees, the Company has not
granted any new franchises over the last 27 months, consistent with its
Superstore growth strategy.

December 1995 Acquisition

On December 15, 1995, the Company completed the acquisition (the
"Acquisition") of 10 stores owned by Bethpage Aid, Inc., Copiague Aid, Inc.,
Nuby's Auto, Inc., Ken-Jen Auto, Inc., Middletown Aid, Inc., Glen Cove Aid,
Inc., and North Babylon Aid, Inc. (collectively, the "Sellers"), all of which
corporations were owned by one individual, Mr. Werner Neuburger. The
Acquisition involved the purchase of substantially all of the assets and
operating businesses of the Sellers. The Sellers operated an aggregate of 10
Aid Auto Stores, in Long Island, New York pursuant to franchise agreements
with the Company. After completion of the Acquisition, the Company commenced
conversion of nine of the ten stores into Aid Auto Superstores. The
conversion to the Superstore program is being done in two stages. The first
stage involves the almost immediate implementation of the advertising,
inventory and merchandising aspects of the program. The second stage will
involve the gradual change over of store signs and elimination of the parts
counters and storage rooms. Subsequent to March 31, 1996, one of the stores
was reopened in a new, expanded location as a Superstore and another was
expanded and reopened in the same location as a Superstore.

The Acquisition purchase price (excluding inventory) was $3,500,000 (the
"Business Purchase Price"). The purchase price for inventory was valued at
such inventory's net acquisition cost and was $1,757,396, prior to reduction
for assumed payables (the "Inventory Purchase Price"). The Company assumed
$ 1,000,000 of trade payables, which amount reduced on a dollar-for-dollar
basis the Inventory Purchase Price. The Business Purchase Price was paid as
follows: $2,000,000 in a short term promissory note paid January 2, 1996,
$750,000 in the form of a ten year note (the "Note") and $750,000 in
restricted Common Stock of the Company. The balance of the Inventory
Purchase Price in excess of the trade payables being assumed ($757,396) was
paid by an increase in the amount of the Note, bringing the total principal
amount of the Note up to $1,507,396. During the first year, the Note has an
interest rate equal to one percentage point below the prime rate charged by
the Company's primary lender and at the prime rate thereafter. The Note is
payable in 120 equal monthly installments of principal plus accrued interest,
commencing February 1, 1996. The Note provides for immediate payment thereof
upon, among other things, the failure to pay any installment when due, the
insolvency of the Company, the filing of a bankruptcy petition by the
Company, the sale of substantially all of the assets or stock of the Company
or a reduction in the stock ownership of the current majority shareholder
(Philip L. Stephen) to below 10%. The Note is subordinate to the Company's
bank loan. The $2,000,000 cash portion of the Business Purchase Price was
paid from the working capital of the Company.

Results of Operations

Three Months Ended March 31, 1996 Compared to Three Months Ended March 31, 1995.

The Company's operating revenues are primarily derived from net sales
consisting of both retail and wholesale sales. Retail sales are made from
the Company-owned Aid Auto Stores of which 17 existed at March 31, 1996 and
four at March 31, 1995. Wholesale sales include sales to the Company's
franchised Aid Auto Stores, of which 43 existed at March 31, 1996 and 54 at
March 31, 1995, and through Ames, to hundreds of other customers. Revenues
increased by $2,487,000 (or 60.8%) from $4,087,000 for the three months ended
March 31, 1995 to $6,574,000 for the three months ended March 31, 1996. The
increase in revenues in 1996 was due primarily to the increase of $2,847,000
in sales from Company-owned stores from $555,000 for the three months ended
March 31, 1995 to $3,402,000 for the three months ended March 31, 1996.
Subsequent to the first quarter of 1995, the Company acquired ten franchised
Aid Auto Stores located in Long Island, New York, and opened three new
Superstores. In addition, the seasonal cold and wet winter of 1995-1996
resulted in an increase in the sale of certain items (e.g., anti-freeze and
other winter chemicals) and an increased need for other winter maintenance
items (especially when compared to the exceptionally mild, auto-friendly winter
weather in 1994-1995 which resulted in a decrease in the sale of winter
items). Revenue increases were offset in part by a decrease in sales to
franchisees, reflecting the Company's decision consistent with its Superstore
growth strategy to generally not grant new franchises (which results in a loss
of sales to new franchisees). Furthermore, seven franchised stores were
terminated by the Company in 1995, and an additional five franchised stores
were terminated in the first quarter of 1996. In addition, there was a
slight decrease in the Ames sales in the first quarter of 1996 as compared to
the first quarter of 1995.

Cost of sales increased by $1,161,000 (40.8%) from $2,849,000 for the months
ended March 31, 1995 to $4,010,000 for the first three months of 1996. The
increase in cost of sales in absolute dollars was attributable to the
increased volume of sales in 1996. As a percentage of net sales, cost of
sales declined from 70.9% for the three months ended March 31, 1995 to 61.5%
for the comparable period in 1996, reflecting the significantly higher
margins on retail sales from the new Superstores (as compared to lower margin
on wholesale sales) and the additional number of Company-owned stores.

Selling and shipping expenses increased by $969,000 (or 135.0%) from
$718,000 (17.9% of net sales) for the three months ended March 31, 1995 to
$1,687,000 (25.9% of net sales) for the three months ended March 31, 1996.
The increase as an absolute amount and as a percentage of net sales for the
three month period was due primarily to a substantial increase of selling
expenses, reflecting a significant increase in the Company's retail
operations. Selling expenses are higher for a retail operation than for a
wholesale operation, reflecting the nature of these operations. As a result
of the Company's strong efforts to control costs, the shipping expense
dollars remained essentially constant despite the large increase in sales
volume.

General and administrative expenses increased by $107,000 (or 18.6%) from
$575,000 (14.3% of net sales) for the three months ended March 31, 1995 to
$682,000 (10.5% of net sales) for the three months ended March 31, 1996. The
increase in absolute dollars was due to the additional infrastructure needed
in connection with the increased volume of business from the additional
Company-owned stores. The significant decrease as a percentage of sales for
the first three months of 1996 was due to the increase in sales volume as
well as the Company's concentration on controlling costs.

Interest expense increased $2,000 from $194,000 for the first quarter ended
March 31, 1995 to $196,000 for the first quarter ended March 31, 1996. This
nominal increase was due to an increase in the average outstanding bank debt
balance during the first quarter of 1996 as compared to the first quarter of
1995, which was partially offset by a reduction in the interest rate charged
by the Company's Bank during the first quarter of 1996 as compared to the
same period in the prior year.

For the foregoing reasons, the net income for the first three months of 1996
was approximately $42,000 as compared to a net loss of approximately $55,000
for the three months ended March 31, 1995.

Year Ended December 31, 1995 Compared to Year Ended December 31, 1994

Revenues decreased by $3,918,263, or 16.2%, from $24,182,096 in the year
ended December 31, 1994 to $20,263,833 for the year ended December 31, 1995.
For 1995, net sales consisted of $8,646,240 of sales to franchisees,
$7,002,814 sales through Ames, and $3,803,709 of retail sales, as compared to
$10,929,263, $9,707,078, and $2,558,194, respectively in 1994. In view of the
Superstore growth program, the Company expects sales from retail operations
to increase significantly in 1996, while sales to franchised stores are
expected to decrease in view of the decreased number of franchises due to
franchise termination and/or acquisition.

The decrease in revenues was due primarily to decreased sales as a result of
exceptionally mild, auto-friendly weather during the winter of 1994-1995
(especially when compared to the cold and wet winter of 1993-1994) which
resulted in the reduction of the sale of certain low-margin items (e.g.,
anti-freeze and other winter chemicals), and a reduced need for other winter
maintenance items (see "Seasonality" below). In addition, the Company's short
term revenue growth was negatively impacted, as expected, by that part of the
planned Superstore expansion strategy, which included a decision to generally
not grant new franchises, which results in a loss of sales to new
franchisees. It was in anticipation of the Initial Public Offering, as well
as implementation of the Company's Superstore expansion program, that the
Company decided to limit the granting of new franchises. Furthermore, seven
franchised stores were terminated by the Company in 1995, and were not
replaced by new franchises (except for one franchise granted to an existing
franchisee) consistent with the Superstore growth strategy described herein.
The terminations have resulted in the loss of monthly fees and monthly sales
as discussed above. The decline in 1995 was offset in part by the sales
generated by the Company's first Superstore, which opened in July 1995. There
has also been a decrease in the Ames sales due to the same general factors
previously mentioned.

Cost of sales decreased by $3,385,960, from $16,980,220 in 1994 to
$13,594,260 in 1995. The decrease in cost of sales in absolute dollars was
attributable primarily to the reduced volume of orders during 1995 as a
result of the above-noted business conditions during the year. As a
percentage of net sales, cost of sales decreased from 1994 (71.1%)
to 1995 (68.1%). The decrease in the cost of sales percentage is due to the
increase in the retail sales as a percent of total sales, which sales have a
higher gross margin.

Selling and shipping expenses decreased by $65,894, or 1.9%, from $3,477,350
(14.6% of net sales) in 1994 to $3,411,456 (17.1% of net sales) in 1995. The
increase as a percentage of net sales was due primarily to the decrease in
orders during 1995, as these expenses did not decrease proportionally to
sales decreases.

General and administrative expenses increased by $296,614, or 9.3%, in 1995
from $3,180,210 in 1994 to $3,476,824 in 1995. As a percentage of net sales,
general and administrative expenses increased to 17.4% in 1995 from 13.3% in
1994. The increase was due primarily to an increase in personnel in
connection with the Superstore expansion program and in bad debt expense.

Interest expense increased by $23,809, or 3.5%, from $681,435 in 1994 to
$705,244 in 1995, as a result of increased borrowings from the Israel
Discount Bank of New York (the "Bank") under the Company's Bank line of credit,
which was increased in 1995. The increased borrowings offset the lower
interest rate that was in effect during most of 1995 as compared to 1994.

Income from continuing operations (before provision for income taxes)
decreased by $631,644, from a profit of $91,763 in 1994 to a loss of $539,881
in 1995. The Company incurred a net loss of $703,881 in 1995 as compared to
net income of $19,763 in 1994. The decreases were due primarily to the
decreases in revenues, and increases in general and administrative expenses
and interest expense in 1995.

Effective tax rates for 1995 and 1994 were 30.4% and 78.5%, respectively.
The variance is due primarily to the effects of the Company filing its
federal income tax return on a consolidated basis and its state tax return on
a separate basis, resulting in higher income for state tax purposes. The
effective rate for 1996 will depend largely on the profitability of the
Company for such year as well as the impact on the federal tax rate in 1995
from the net loss.

Year Ended December 31, 1994 Compared to Year Ended December 31, 1993

Revenues decreased by $719,698, or 2.9%, from $24,901,794 in the year
ended December 31, 1993 to $24,182,096 for the year ended December 31, 1994.
The decrease in revenues was due primarily to decreased sales in the first
quarter of 1994 as a result of extremely severe winter weather conditions
during that quarter (see "Seasonality" below), and a decrease in both initial
and continuing franchise fees during such period as a result of the Company
curtailing that portion of its business in anticipation of commencing its
Superstore growth program.

Cost of sales decreased by $365,887, from $17,346,107 in 1993 to
$16,980,220 in 1994. The decrease in cost of sales in absolute dollars was
attributable primarily to the reduced volume of orders during the first
quarter of 1994 as a result of the extremely severe weather during that
quarter. As a percentage of net sales, cost of sales remained relatively
constant in 1993 (70.7%) compared to 1994 (71.1%).

Selling and shipping expenses decreased by $12,786, or .4%, from $3,490,136
(14.2% of net sales) in 1993 to $3,477,350 (14.6% of net sales) in 1994. The
decrease in absolute dollars was due primarily to the decrease in orders
during 1994. The increase as a percentage of net sales was attributable to
the additional shipping expenses incurred by the Company in delivering orders
during the extremely severe weather in the first quarter of 1994.

General and administrative expenses increased by $130,684, or 4.3%, in
1994 from $3,049,526 in 1993 to $3,180,210 in 1994. As a percentage of
revenue, general and administrative expenses increased to 13.2% in 1994 from
12.2% in 1993. The increase was due primarily to an increase in personnel and
in bad debt expense.

Interest expense increased by $103,324, or 17.9%, from $578,111 in 1993 to
$681,435 in 1994, as a result of increased borrowings (from Philip L.
Stephen, the Company's Chairman of the Board, President, Chief Executive
Officer and sole stockholder) and an increase in the interest rates
applicable to such borrowings and to the Bank line of credit.

Income from continuing operations (before provision for income taxes)
decreased by $576,850, or 86.3%, from $668,613 in 1993 to $91,763 in 1994.
Income from continuing operations after taxes decreased to $19,763 in 1994 from
$350,613 in 1993. After giving effect to discontinued operations, net income
was $19,763 in 1994 and $51,153 in 1993. The decreases were due primarily to
the decreases in revenues, and increases in general and administrative
expenses and interest expense in 1994.

Effective tax rates for 1994 and 1993 were 78.5% and 47.6%, respectively.
The variance is due primarily to the effects of the Company filing its
federal income tax return on a consolidated basis and its state tax return on
a separate basis, resulting in higher income for state tax purposes.

Liquidity and Capital Resources

The Company had working capital of $6,573,000 at March 31, 1996, as
compared to $6,553,000 at December 31, 1995. Through March 31, 1996, the
Company had financed its capital requirements predominantly through a bank
loan and credit facility, currently with the Bank, through loans from one of
its officers, and through the Company's Initial Public Offering, the net
proceeds of which were approximately $7,300,000.

Net cash used in operating activities was $312,000 for the first three
months of 1995 and $898,000 for the first three months of 1996. The increase
in 1996 was attributable primarily to increases in inventories as a result of
the increase in the number of retail stores, as well as an increase in
prepaid expenses and other current assets compared to the prior comparable
period, offset in part by a decrease in accounts receivable, and increase in
accounts payable, and the generation of net income in the first quarter of
1996 as compared to a loss in the same period in the prior year. Net cash
utilized in investing activities was $11,000 and $86,000 in the first three
months of 1995 and 1996, respectively, the increase reflecting increased
capital expenditures in connection with the Superstore expansion program.
Net cash of $115,000 was provided by financing activities in the first three
months of 1995 compared to $1,340,000 used in financing activities in the
first three months of 1996. The shift was primarily attributable to the use
of a short term note in connection with the acquisition of the ten store
locations.

Net cash used in operating activities was $279,817 for the year ended
December 31, 1994 and $1,993,392 for the year ended December 31, 1995. The
increase in 1995 was attributable primarily to the net loss and the build up
in inventories. Net cash utilized in investing activities was $164,732 and
$601,400 in the years ended December 31, 1994 and 1995, respectively, the
increase reflecting increased expenditures on fixed assets in 1995 in
connection with the Superstore expansion program. Net cash provided by
financing activities was $522,843 and $7,002,101 in the years ended December
31, 1994 and 1995, respectively, the increase being attributable primarily to
the net proceeds received from the Initial Public Offering partially offset
by the net repayment in 1995 of officer's loans.

The Company receives volume purchasing discounts and cooperative advertising
and development funds from certain of its suppliers. The amounts of these
incentives generally range from 5% to 10% of the listed purchase prices.

Effective September 1, 1995, the Company entered into a new loan agreement
with the Bank for a two year revolving credit line of up to an aggregate of
$6,000,000 with an interest rate equal to the prime rate. As of March 31,
1996, $5,749,898 was outstanding under the line of credit. In connection with
the entry into the new loan agreement, the Bank released the personal
guarantee of Philip L. Stephen, the Company's Chairman, Chief Executive
Officer, President, and majority shareholder, and also released the
subordination of his loan to the Company to the loan by the Bank. In March
1996, the subordination was reinstated for $425,000, which is less than the
full amount of the loan. In addition, in May 1996, the Company temporarily
received an additional $800,000 on its credit line with the Bank in exchange
for a six-month personal guarantee from Mr. Stephen, which expires on
October 23, 1996.

Substantially all of the Company's assets are pledged to the Bank as
collateral, and the Company is prohibited from granting a security interest
to any party other than the Bank, which could limit the Company's ability to
obtain debt financing to implement its proposed expansion. In addition, the
Company's agreement with the Bank limits or prohibits the Company, subject to
certain exceptions, from merging or consolidating with another corporation or
selling all or substantially all of its assets. As of March 31, 1996, the
Company was in compliance with all of the covenants contained in the loan
agreement with the Bank. In the event that the Company is unable to make
payment on its line of credit when due on August 31, 1997, the Bank could
foreclose on the collateral, which would have a material adverse effect on the
Company.

At March 31, 1996, the Company was indebted to Mr. Stephen in the
aggregate amount of $2,500,000. The $2,500,000 loan is evidenced by a single
promissory note. The note bears interest at the interest rate charged by the
Bank, payable monthly, with principal payable in quarterly installments which
commenced on May 1, 1996 and will continue through February 1, 2000. The note
provides for immediate payment thereof upon, among other things, a change in a
majority of the continuing directors of the Company (as defined in the note)
or a demand by the Bank of payment in full of outstanding Bank indebtedness.

The Company's accounts receivable, less allowances for doubtful accounts, at
March 31, 1996, were $2,415,000, as compared to $2,991,000 at December 31,
1995. The decrease was due to a decrease in the amount of wholesale sales
on credit terms in 1996 as compared to 1995 combined with the increased
collection efforts. At March 31, 1996, the Company's allowance for doubtful
accounts was $645,000 which the Company believes is currently adequate for
the size and nature of its receivables. At March 31, 1996, notes receivable,
less allowances for doubtful accounts, were $449,000, as compared to $464,000
at December 31, 1995. The decrease in notes receivable primarily reflects
collections on the promissory notes. Currently, eight franchisees are
obligated under notes. Their inability to pay for purchases under standard
payment terms is due primarily to a downturn in their business during the
recessionary economy of 1991 to 1993 (in some cases exacerbated by road
construction making access to the stores difficult.) It is the Company's
policy to convert accounts receivable to a note when a franchisee has
demonstrated an inability to pay its account on a timely basis. Delays in
collection or uncollectability of accounts and notes receivable could have
an adverse effect on the Company's liquidity and working capital position
and could require the Company to increase its allowances for doubtful
accounts. Bad debt expense remained constant at $33,000 in the first
quarter of 1995 and 1996.

The Company's accounts receivable, less allowances for doubtful accounts,
at December 31, 1995, were $2,991,011, as compared to $3,289,566 at December
31, 1994. The decrease was due to a decrease in sales for 1995 as compared to
sales for 1994. At December 31, 1995, the Company's allowances for doubtful
accounts was $612,000, which the Company believes is currently adequate for
the size and nature of its receivables. At December 31, 1995, notes
receivable, less allowances for doubtful accounts, were $319,388, as compared
to $857,937 at December 31, 1994. The decrease in notes receivable primarily
reflects an increase in the allowances for doubtful accounts and collections on
promissory notes. Bad debt expense increased from $182,000 in 1994 to
$377,000 in 1995, the increase reflecting the recording of an allowance for
doubtful accounts with respect to franchisees who continue to experience
difficulty in making payments for the aforementioned reasons. In the fourth
quarter of 1995, in connection with notes owed by one franchisee, the Company
foreclosed on the collateral which consisted of the store inventory and the
building in which the store was located. The Company re-opened the business
operation at the location as a non-Superstore Company-owned store in January
1996. The Company has the personal guarantee of the owner of the corporate
franchisee which defaulted on the notes and is suing to collect the
collateral shortfall.

At March 31, 1996, the Company had deferred tax assets of $443,000. The
Company, after considering its previous pattern of profitability and its
anticipated future taxable income, believes that it is more likely than not
that the deferred tax assets will be realized. In this respect, the Company
estimates that $1,100,000 of future taxable income will be required to
realize the deferred tax assets, with the majority of such assets anticipated
to be recovered over the next five years.

As of the date hereof, other than in connection with the implementation of
the Superstore growth program, the Company has no material commitments for
capital expenditures. In connection with the Acquisition described above, the
Company was obligated to expend $2,000,000 in cash on January 2, 1996. In
addition, as part of the purchase price of the Acquisition and at the time of
the Acquisition, the Company assumed $1,000,000 of trade payables and issued
157,596 shares of Common Stock and the Note in the amount of $1,507,396.

The Company has used a substantial portion of the net proceeds of the
Initial Public Offering to implement its proposed Superstore growth program.
The Company anticipates, based on currently proposed plans and assumptions
relating to its operations (including the costs associated with, and the
timetable for, its proposed expansion), the Company's working capital and
current loan facility, together with projected cash flow from operations,
will be sufficient to satisfy its contemplated cash requirements for at least
twelve months (including the contemplated conversion of nine of the stores
acquired in the Acquisition into Superstores, and the opening of at least
three Superstore outlets during that period). In the event that the Company's
cash flow proves to be insufficient (due to unanticipated expenses,
difficulties, problems or otherwise), the Company may be required to seek
additional financing for the initial phase of its Superstore growth program
or curtail such expansion activities. The Company will need to seek
additional debt or equity financing, as the Company does not anticipate that
its current resources and cash flow from operations are likely to be
sufficient to fund the continuing cost of its growth program to open 48 to 60
Superstores. To the extent that the Company seeks financing through the
issuance of equity securities, any such issuance of equity securities would
result in dilution to the interests of the Company's stockholders.
Additionally, to the extent that the Company incurs indebtedness to fund
increased levels of accounts receivable or to finance the acquisition of
capital equipment or issues debt securities to fund the Superstore growth
program, the Company will be subject to risks associated with incurring
substantial indebtedness, including the risks that interest rates may
fluctuate and cash flow may be insufficient to pay principal and interest on
any such indebtedness. Other than the Company's existing line of credit with
the Bank, the Company has no current arrangements with respect to, or sources
of, additional financing and it is not anticipated that the existing majority
stockholder will provide any portion of the Company's future financing
requirements or additional personal guarantees. There can be no assurance
that additional financing will be available to the Company on acceptable
terms, or at all.

Seasonality

The Company's business is seasonal to some extent primarily as a result of
the impact of weather conditions on store sales. Store sales and profits have
historically been higher in the second and third quarters (April through
September) of each year than in the first and fourth quarters, for which the
Company generally achieves only nominal profits or incurs net losses. Weather
extremes tend to enhance sales by causing a higher incidence of parts failure
and increasing sales of seasonal products. However, extremely severe winter
weather or rainy conditions tend to reduce sales by causing deferral of
elective maintenance.

Impact of Inflation

Inflation has not had a material effect on the Company's operations.

BUSINESS

General

Aid Auto Stores, Inc. (the "Company") owns and operates, and franchises,
retail automotive parts and accessories stores under the name Aid Auto
Stores. These stores sell an extensive variety of name-brand automotive
parts, accessories and chemicals, as well as an assortment of products
marketed under the "Aid" brand (the "Aid Mark"), and also under the "Perfect
Choice" brand (the "Perfect Choice Mark"), to both do-it-yourself ("DIY") and
commercial customers. At March 31, 1996, there were 17 Company-owned and 43
franchisee-owned Aid Auto Stores. Through 1995, the Company had derived the
majority of its revenues from the wholesale sale of automotive products to
its franchisees and, through its wholly-owned subsidiary, Ames, to hundreds
of non-automotive chain stores and independent jobbers and installers in New
York, New Jersey and Connecticut. Aid Auto Stores have operated for more than
40 years and the Company believes that the Aid Auto name is widely recognized
by consumers in the New York metropolitan area. The Company is seeking to
capitalize on such name recognition, as well as its expertise and operating
history, warehouse distribution channels and vendor relationships, to become
the dominant automotive aftermarket parts distributor and retailer in the
Northeast. The focus of the Company's growth strategy is a Company-owned mini
warehouse Superstore program, which program was instituted in 1995 following
the completion of the Company's initial public offering in April 1995 (the
"Initial Public Offering"). The Company currently contemplates the opening of
up to 48 to 60 Superstores in five years from the date of the Initial Public
Offering. Each Superstore will enable consumers and businesses to buy quality
automotive products from a large inventory at the lowest possible prices and
to do so in a convenient and informed manner. The Company will need to seek
additional debt or equity financing, in addition to the net proceeds the
Initial Public Offering, as the proceeds of such offering and cash flow from
operations will not be sufficient to fund the continuing cost of this program.

In July 1995, the Company held the Grand Opening of its first new
Company-owned Superstore. The store is located in Long Island City, in the
New York City Borough of Queens. In March 1996, the Company opened two
additional Superstores, one on a main thoroughfare in Brooklyn, New York and
the other in a major shopping mall in the New York City Borough of Staten
Island. In June 1996, the Company opened a Superstore in Jamaica, in the
Borough of Queens, New York. In addition, the Company has signed leases with
respect to two new Superstores, one in Queens, New York and the other in
Jersey City, New Jersey, which are expected to open shortly. The Company also
intends to grow its operations by means of acquiring other companies,
including Aid Auto Stores franchises, having parts and accessories retail
stores. In this connection, on December 15, 1995, the Company acquired ten
franchised Aid Auto Stores located in Long Island, New York. Following the
acquisition, the Company commenced converting up to nine of the ten stores
into Aid Auto Superstores. In this respect, one of the stores was reopened
as a Superstore in a new, expanded location in May 1996 and another was
expanded and reopened as a Superstore in June 1996. Seven of the eight
remaining stores have, to date, implemented the Superstore advertising,
inventory and merchandising program. For the three months ended March 31,
1996, approximately 52% of the Company's operating revenues were derived from
retail sales, as compared to only 14% for the three months ended March 31, 1995.

Industry Overview

According to industry estimates, the size of the domestic automotive
aftermarket for replacement parts, maintenance items and accessories is
believed to have been approximately $95 billion in 1995. The Company believes
that the automobile aftermarket will grow in the future because of, among
other things, increases in the size and age of the United States' automotive
fleet, the increasing number of miles driven annually per vehicle, the higher
ost of new cars compared to historic costs and the higher cost of replacement
parts as a result of technological changes in more recent models of vehicles.
Moreover, the industry is experiencing a trend toward consolidation, with
regional automotive specialty chains gaining market share at the expense of
smaller independent operators and less specialized mass merchandisers.
Compared to most small independent retailers, automotive specialty retail
chains with multiple locations in given market areas generally enjoy
competitive advantages in purchasing, distribution, advertising and marketing.
Significant increases in the number of automotive replacement parts in recent
years due to the greater number of domestic and imported vehicle makes and
models has made it difficult for smaller, independent retailers and less
specialized mass merchandise chains to maintain inventory selection broad
enough to meet consumer demands. In view of the foregoing, the Company
believes that considerable growth opportunities exist in the New York
metropolitan area and throughout the Northeast because the region contains
one of the largest vehicle populations in the country.

Current Business Operations

Aid Auto Stores

Aid Auto Stores are generally situated in high-visibility locations, such as
strip shopping malls, and provide an expansive merchandise selection in an
attractive store environment. The Company attempts to keep the distinctive
signage and color scheme of the Aid Auto Stores consistent among both its
franchised and Company-owned locations to increase its name recognition. Aid
Auto Stores which are not Superstores typically range in size from
approximately 3,000 to 5,000 square feet of space. Aid Auto Superstores are
designed for an average of 5,000 to 8,000 square feet, although they will be
larger on occasion depending on the particular locations. All stores are
open daily, including weekends.

Company-Owned Stores. At March 31, 1996, the Company operated 17 Aid Auto
Stores, three of which were Superstores, located in Long Island (10),
Brooklyn (3), Queens (2), Staten Island (1) and White Plains (1). During the
three months ended June 30, 1996, the Company opened one new Superstore in
Queens, and reopened two expanded stores in Long Island as Superstores. The
number of Company-owned stores, as of the last day of each of the last five
quarters, is as follows:

COMPANY-OWNED STORES

6/3/95 9/30/95 12/31/95 3/31/96 6/30/96

Non-Superstore 4 4 13(1) 14 12(2)
Superstore 0 1 1 3 6
Total 4 5 15 17 18

(1) During the quarter ended December 31, 1995, the Company closed a Company-
owned non-Superstore, in Brooklyn, New York.

(2) Of these 12 stores, seven are expected to be converted to Superstores and
have, to date, implemented the Superstore advertising, inventory and
merchandising programs.

The Company selects name brand merchandise and merchandise sold under the
Aid Mark and Perfect Choice Mark for all of its Company-owned stores, which
merchandise is provided from the Company's wholesale distribution center. The
Company's stores sell their merchandise for cash and through third-party
credit cards. The Company's policy is to refund the purchase price for, or
exchange, returned merchandise. The Company believes that, to date, the amount
of refunds and exchanges to and for its retail customers has not been
material. For the years ended December 31, 1994 and 1995, the Company's
stores generated net sales of $2,613,685 and $3,969,815, respectively, which
constituted approximately 10.8% and 19.6%, respectively, of the Company's
overall operating revenues for such periods. For such periods, the Company-
owned stores reported net losses of $183,586 and $212,675, respectively. For
the three months ended March 31, 1996, Company-owned stores generated net
sales of $3,402,000 (51.7% of operating revenues) and net income of $59,613,
compared to net sales of $555,000 (13.8% of operating revenues) and a net
loss of $64,877 for the three months ended March 31, 1995. The Company does
not believe that the results of operations of its Company-owned stores is
necessarily indicative of future operating results. In view of the
commencement in 1995 of its Superstore growth program, the Company
anticipates a continued increase in revenues from Company-owned stores,
although there can be no assurance of profitable operations. In addition, the
Company-owned stores provide the Company the opportunity to supply all of
these stores' inventory needs, enhancing profit at the wholesale level.

In July 1995, the Company opened the first Company-owned mini-warehouse
Superstore in Long Island City, New York. Additionally, in December 1995, the
Company acquired ten franchised Long Island Aid Auto Stores controlled by one
individual. Nine of the stores are in the process of being converted to
Superstores. In January 1996, the Company acquired and converted a franchised
store located in Brooklyn, New York into a Company-owned non-Superstore. In
March 1996, the Company opened two additional Superstores within New York
City, one in Bensonhurst, in the New York City Borough of Brooklyn and one in
the New York City Borough of Staten Island, New York. In May 1996, one of the
Long Island stores was reopened as a Superstore and, in June 1996, a new
Superstore was opened in Queens, New York and another Long Island store was
reopened as a Superstore. See "Superstore Growth Program."

Aid Auto Franchises. At March 31, 1996 the Company had franchise agreements
with 22 franchisees who independently own and operate a total of 43 Aid Auto
Stores in New York and New Jersey. The Company's standard franchise
agreement, which grants to the franchisee the license to use the Company's
Aid Auto Stores service mark in connection with the franchisee's store, is
for an initial term of ten years, which term is subject to automatic five-year
renewals thereafter unless terminated by either party prior to six months
before the end of the initial term or renewal period, as the case may be.

Franchisees typically pay a one-time initial franchise fee (currently
$22,500 for new franchisees and $6,000 for existing franchisees opening
additional stores and for independent automotive parts stores who desire to
convert their store into a Company franchise) as well as continuing monthly
franchise fees of $400. In addition to franchise fees, the Company's current
form of franchise agreement provides that franchisees are required to
contribute $775 per month to the Company's advertising and promotion costs.
The payment obligations of most of the Company's franchisees are secured by
their inventory and equipment and all proceeds from their sale of the
foregoing, and by the personal guaranty of the franchisee. The Company
provides the franchisee with, among other things, site location assistance,
mandatory training, store layout and design assistance, and promotional and
advertising services. The franchise agreements require that the store be
operated in accordance with operating procedures established by the Company
relating to, among other things, signage, advertising (including carrying the
products advertised), store hours, cleanliness and compliance with laws. The
Company is permitted to regularly inspect the stores to regulate compliance
with the foregoing and to check inventories and books and records. In
addition, the Company's current form of franchise agreement provides that the
Company shall have the right to approve the lease of any franchisee.

More recent franchise agreements, with respect to 15 franchised stores,
contain a provision granting the franchisee an exclusive territory of a
radius of 1.5 miles from the franchisee's Aid Auto Store location, in
consideration of the franchisee purchasing annually at least 75% of its
inventory from the Company. In 1994 and 1995, none of the subject stores
purchased that level of inventory from the Company. Thus, the Company
believes that, upon notice and failure by the franchisee to cure within the
appropriate time period, it will be able to terminate such territorial
exclusivity. Such provision is expected to be eliminated from future
franchise agreements, if any. Notwithstanding the foregoing, the Company has
selected and intends to continue to select sites for its Superstores in areas
not served by existing Aid Auto Stores and believes that adequate potential
sites are available. The Company, in anticipation of opening Company-owned
mini warehouse Superstores, sold only one new franchise in 1995, which was
sold to an existing franchisee opening an additional store, and none
(to date) in 1996, and currently intends to continue to restrict the number
of franchises granted in the future so as to preserve desirable locations for
its proposed new Superstores. The Company sold two franchises
in 1994 to existing franchisees opening additional stores, one franchise in
1993 and 13 in 1992. During the first three months of 1996, and during the
entire twelve months of 1995 and 1994, five, seven and eight franchises,
respectively, were terminated by the Company due to their failure to meet
standards set for franchisees and for other reasons.

Although the Company receives franchise fees from its franchisees as
described above, the Company derives the principal portion of its franchise-
related revenues from the sale of automotive products to its franchisees in
connection with its wholesale operations. Currently all of the products
marketed on a wholesale basis under the Aid Mark are purchased by the
franchisees from the Company, as well as a substantial portion of the other
merchandise sold in their stores. While franchise fees accounted for only
approximately 1.3% of the Company's operating revenues for the year ended
December 31, 1994 and 1.5% for the year ended December 31, 1995, sales of
products to franchisees accounted for 46.4% and 41.7% of net sales,
respectively, for these periods. For the three months ended March 31, 1996,
sales to franchisees accounted for 16.1% of net sales, as compared to 49.4%
for the first quarter of 1995.

Product Line and Pricing. The Aid Auto Stores (Company-owned and franchised)
carry an extensive product line which includes new and remanufactured
automotive hard parts such as shock absorbers, front end chassis parts, exhaust
systems, brakes, alternators, starters, ignitions, automotive batteries,
belts and hoses. Product assortment includes parts for both domestic and
import cars, light trucks and vans. Aid Auto Stores also carry a complete
line of maintenance items such as oil, antifreeze, transmission, brake and
power steering fluids, engine additives, protectants and waxes and
accessories. The average Company-owned non-Superstore carries about 8,000
stock-keeping units ("SKUs") on premises, although they have, through the
Company's wholesale distribution center, access to more than 22,000
additional SKU's within 24 hours. In addition to a wide assortment of
national brands, each of the Aid Auto Stores also carry a number of products
(such as fan belts, hoses, alternators, starters, brake shoes and water
pumps) marketed under the Aid Mark. Furthermore,the Company has developed a
new private label brand name program, which is marketed under the name
Perfect ChoiceTM. The Company currently has developed 32 such private label
products, primarily maintenance items, and is seeking to develop
approximately 14 additional products over the next six months. The Company has
applied for registration of the Perfect Choice trademark with the United
States Patent and Trademark Office.

The Aid Auto Stores employ strategic pricing policies to maximize sales and
profits; overall prices compare favorably to those of their competitors'
retail stores. Such pricing strategy is supported by advertising in newspapers,
circulars, radio and television and through in-store promotional signage and
displays.

Store Operations. Aid Auto Stores are typically staffed with a manager/
owner, assistant manager and several full-time and part-time sales
associates, the number of which varies depending on store volume. Store
managers are responsible for day-to-day operations, including in-store
merchandise presentation, customer relations, store maintenance and sales
personnel relations as well as selecting and training new employees. The
store management of Company-owned stores receive compensation in the form of
salaries and performance-based bonuses and its sales associates for such stores
are paid on an hourly basis plus performance incentives. Although the Company
relies on on-the-job training to assure that employees are knowledgeable with
respect to store merchandise, both the Company-owned and franchised stores
generally hire personnel with prior automotive experience. The Company also
provides formal training programs for both its franchisees and its own
employees, which include regular store meetings on specific sales and product
issues, training manuals and special programs under which store personnel can
obtain expertise in several technical areas. The Company supplements training
with frequent store visits by management.

Customer Service. The Company believes that do-it-yourself ("DIY") and
commercial customers place a significant value on customer service.
Accordingly, the Company emphasizes customer service and knowledgeable and
courteous service. Through its training programs, the Company provides its
personnel and its franchisees with technical parts expertise, enabling them
to advise customers regarding the correct part type and application. Customer
service is enhanced by a variety of programs including in-store computerized
catalogs which assist in the selection of proper replacement of hard parts;
testing of starters, alternators and batteries; free battery charging as well
as installation assistance for batteries, windshield wipers and selected
other products.

Wholesale Operations

From its centralized purchasing and distribution center located in Westbury,
New York, the Company supplies national brand-name products such as A. C.
Delco, Moog, Wagner, Monroe, Prestone, STP, Armorall and Turtle Wax (as well
as a number of products marketed under the Aid Mark and Perfect Choice Mark
specifically for the Aid Auto Stores) to its franchised Aid Auto Stores and,
through Ames, to other wholesalers, jobbers and non-automotive retail chains,
on a wholesale basis.

Aid Auto Wholesale Operations The Company sells and distributes automotive
products from its distribution center's inventory directly to its franchised
Aid Auto Stores. The Company supplies substantially all of the merchandise
sold by Company-owned stores. It also provides its franchisees with wholesale
discounts and other pricing incentives.

Ames Wholesale Operations The Company's Ames subsidiary sells and
distributes national name-brand automotive products from the Company's
inventory directly to other wholesalers, retailers, installers and prominent
non-automotive retail chains, including supermarkets, home centers and drug
store chains. By purchasing products from Ames, non-automotive retail chains
are provided a convenient, cost-effective means of participating in the
automotive aftermarket. Ames seeks to provide its retail operations
customers with high profit margins, high sales per square foot, excellent
inventory turnover, and an extremely high in-stock position (preventing lost
sales). Ames accounted for approximately 40.6% and 35.1% of the Company's net
sales for the years ended December 31, 1994, and 1995, respectively, and
23.0% for the three months ended March 31, 1996.

As a major automotive warehouse feeder for non-automotive retail
merchandisers in the Northeast, Ames is capable of selling and distributing
thousands of different name brand products to its customers. In addition,
Ames offers a full menu of support services such a strategic planning,
merchandise packout, price ticketing, order writing and replenishment,
planogramming, advertising support and new store set-ups. Orders are
expedited through the Company's Electronic Data Interchange ("EDI") computer
link directly from the field to the Company's distribution center, which
helps keep lead time to a minimum.

Inventory Management and Distribution

The Company's Westbury distribution center contains 1,636,000 cubic feet of
warehouse space and in excess of 30,000 SKUs. It is equipped with an
automated conveyor system which expedites the movement of automotive products
to the loading area for shipment to its customers on a daily basis. Prior to
1995, the Company shipped all orders in trucks leased and operated by the
Company. Effective January 1995, the Company began shipping all of its orders
for both the Aid Auto Stores and its Ames customers via Ryder Commercial
Leasing & Services ("Ryder") dedicated carrier program pursuant to an
agreement entered into in December 1994. The agreement provides that
Ryder will, among other things, ship the Company's orders in a fleet of its
trucks (the number of which may be adjusted to accommodate changed
conditions), maintain all such trucks, provide licensed drivers, handle
shipping documents, and provide managerial information system services to the
Company, in consideration of a fee schedule (which fees may change in the
event the assumptions upon which they were established change). The agreement
is subject to termination by Ryder in the event the Company is in substantial
default of its obligations thereunder, or in the event the parties are
unable to agree upon a negotiated rate increase prior to each anniversary
date. By contracting its shipping to Ryder and utilizing their expertise and
customized services, the Company has achieved operational efficiencies;
however, there can be no assurance that such efficiencies will continue.

The Company utilizes an IBM AS/400 computer system at the distribution
center and continually modernizes and upgrades its computer capabilities to
provide more efficient distribution and inventory control. The Company believes
that its inventory management and distribution system results in lower
inventory carrying costs for the Company and improved in-stock positions for
its customers. The Company is currently enhancing and expanding its
electronically linked ordering system with the Aid Auto Stores and its Ames
customers, which is intended to improve inventory control management.
Inventory levels are monitored regularly based on sales movement and on
management's assessment of the changes and trends in the marketplace.

Manufacturing and Supply

Purchases are made by the Company for both the Aid Auto Stores and Ames
wholesale operations directly from automotive parts and accessories
manufacturers, and are based upon several criteria, including product
quality, price and brand recognition. Most of the merchandise purchased is
shipped by vendors to the Company's distribution center. Some of the
Company's suppliers provide the Company with prime purchase incentives such
as discounts, cooperative advertising and market development funds.

The manufacturers of automotive parts and products typically provide
replacement warranties, which the Company, the Aid Auto Stores and Ames, in
turn, extend to their customers. In general, the Company is able to return
to its suppliers slower moving, obsolete or overstocked items for full credit.

In 1995, the Company purchased products from over 300 suppliers. The Company
is dependent on close relationships with its suppliers of automotive parts
and equipment, and its ability to purchase products directly from these
manufacturers at favorable prices and on favorable terms. No supplier
accounted for over 10% of the Company's purchases in 1994 and 1995. The
Company views its relationships with its suppliers as excellent, and believes
that alternative sources exist for most of the products it purchases. However,
the Company does not maintain supply contracts with any of its suppliers, and
it is possible that the loss of any significant supplier could have a material
adverse effect on the Company if not replaced in a timely manner and upon
suitable terms. The Company's principal suppliers currently provide the
Company with certain incentives such as volume purchasing discounts and
cooperative advertising and market development funds. A reduction or
discontinuance of these incentives could also have a material adverse effect on
the Company and its operations.

Advertising, Promotion and Marketing

The Company employs strategic pricing policies to maximize sales and profits
and, as a result, believes that its overall prices compare favorably to those
of its competitors. Such pricing strategy is supported through the extensive
use of advertising and promotional activities including newspapers, circulars,
direct mail, radio and television, as well as in-store banners, signs,
displays and promotions. The Company believes that its advertising and
promotional activities have resulted in significant name recognition in its
marketing area. Advertising expenses are substantially offset through
franchisee advertising fees and cooperative advertising programs with the
Company's vendors. Cooperative advertising involves the sharing of costs for
advertising materials that promote both the product and the retail outlet.
The Company views its suppliers as having close and cooperative relationships
involving benefits to the Company including-volume discounts, rebates,
credits, return allowances, cooperative advertising, packaging improvements,
signage assistance programs and distribution management.

Approximately $69,000 of the Company's annual printed advertising space is
purchased by Greg Lauren Advertising Company, Inc. ("Greg Lauren"), which is
wholly-owned by Philip L. Stephen, Chairman, President, Chief Executive
Officer and majority stockholder of the Company. Greg Lauren is able to
purchase print space at discounted advertising agency rates and then bills
the Company at such rates, without any additional charge. See "Certain
Transactions."

Superstore Growth Program

General

The Company's objective is to become the dominant automotive aftermarket
parts distributor and retailer in the Northeast. To accomplish this, in 1995,
the Company instituted a Company-owned mini warehouse Superstore growth
program. The Superstores are designed to make it possible for consumers and
commercial entities to buy top quality automotive aftermarket products from a
large inventory at the lowest possible prices. The Superstore growth program
currently contemplates the opening of up to 48 to 60 Superstore outlets over
a five-year period from the date of the Initial Public Offering. The Company
will need to seek additional debt or equity financing to fund the five year
program as net proceeds of the Initial Public Offering and cash flow from
operations will not be sufficient to complete the Company's growth program.
The Superstores target both DIY and commercial customers. The Company
evaluates the results of this growth strategy on an ongoing basis and may
make such modifications thereto as it deems prudent. The Company opened its
first Superstore in July 1995 in Queens, New York. In December 1995, the
Company acquired 10 stores located in Long Island, New York, which were
controlled by a single individual. Nine of the 10 acquired stores are large
enough to be converted into Superstores and have already implemented the
Superstore advertising, inventory and merchandising program. The Company
currently intends to continue to convert these stores into Superstores in
1996, of which two were reopened as Superstores in the second quarter of
1996. In March 1996, the Company opened two additional Superstores,
one in Brooklyn, New York, and one in Staten Island, New York. In June 1996,
the Company opened another Superstore in Queens, New York. In addition, the
Company has signed leases with respect to two new Superstores, one in Queens,
New York and the other in Jersey City, New Jersey, which are expected to open
shortly.

Site Selection and Future Expansion

The Company believes that substantial growth opportunities exist in its
current marketing area (the New York metropolitan area, including New Jersey
and Connecticut), as well as throughout the Northeast. Current plans are for
future Superstores to be located in heavily populated urban areas, including
Long Island, Queens, Brooklyn, Bronx, Westchester and Putnam in New York,
north and central New Jersey and the southern tier of Connecticut.

Management believes that it will not experience any significant difficulties
in continuing to locate suitable sites for new stores or identifying suitable
acquisition candidates for conversion to Superstores. Although the outlay to
acquire a business that is operating as an independently owned parts store or
a franchised Aid Auto Store will vary depending upon the amount of inventory
and the amount of space being acquired, the Company believes the average cost
to acquire and expand an existing parts store would be the same as the average
cost required for the opening of a new store.

The Company is seeking to strategically locate store sites in clusters
within the geographic area which complements the Company's distribution
system to potentially achieve maximum distribution economies, advertising and
marketing costs and other economies of scale. Other factors considered in the
selection of sites for new stores include population density; growth
patterns; age and per capita income; vehicle traffic counts; and the number
and type of existing automotive facilities, such as auto parts stores, repair
facilities and other competitors within a pre-determined radius of the
potential new location.

The expenditures associated with the opening of a new mini warehouse
Superstore, including the cost of location acquisition, improvements,
fixtures, inventory, computer equipment and other pre-opening expenses
(including initial salaries, training, promotion and advertising), are
currently estimated to average approximately $450,000 per store, depending
upon variables such as size of location, extent of improvements, and amount
of inventory. While the cost of the six new Superstores has been in this
general range, there can be no assurance that such cost levels can be
maintained in the future. To the extent actual costs for the establishment of
future Superstores are in excess of current estimated costs, the Company may
adjust the number of stores it proposes to open and/or may seek to increase the
amount of additional financing it may require. There can be no assurance that
the Company will have adequate financing to expand the Superstore program or,
if it does, that such expansion will be successful.

Superstore Design and Operations

The design for the Company-owned mini warehouse Superstore calls for an
average of 5,000 to 8,000 square feet, which will carry between 12,000 to
15,000 SKUs (as opposed to the existing non-Superstore, Aid Auto Stores, which
carry an average of only 8,000 SKUs) plus an additional 200,000 SKUs
available by special order. The description contained in this section is
subject to change as circumstances dictate.

The Superstore includes an improved merchandise presentation with overhead
storage for high volume items, automatic restocking battery displays, and
warehouse style racks and shelving, permitting self-service selection of
automotive replacement parts that are usually stored behind a parts counter
in standard format stores.

Given their needs, the Superstores are designed to accommodate the DIY
customer. The current Superstores contain a Customer Information Section and
future Superstores are expected to do so as well. Customers are able to utilize
modern information and diagram computers within the stores to diagnose repairs
and supply answers to even the most difficult automotive problems. Repair
solutions and instructions are provided free of charge to all customers
through the Company's comprehensive Complete Car Care Manual Library. All
Superstores have an electronic parts catalog that provide parts information
based on vehicle make, model and year. Catalog display screens are available
in various locations throughout the store so that employees and customers can
take advantage of the electronic catalogs.

An easy access, open-ended Customer Service Station enables customers to
interact with the Company's automotive specialists on the open selling floor.
This technique differs from the traditional auto parts store that usually
has a parts counter separating employees from customers. All Superstores have
bold signage with the Aid Auto Stores logo and brightly lit store interiors.

Each Superstore is staffed with a Store Manager, an Assistant Manager, and
additional counter salespersons and support staff as required to meet the
specific needs of each store. The Company provides financial incentives to its
Superstore management team through an incentive compensation program.

Cost control efforts are being emphasized, including improved stock
turnaround and suggested order generation at the retail level, bar code
scanning, electronic price changes, promotions and updates, full electronic
data interchange capabilities between all locations and headquarters, and the
use of Telxon hand-held scanning computers for inventory control and
replenishment to the distribution center.

Competition

The Company competes both in the DIY and the commercial portions of the
automotive aftermarket business. The Company believes the largest share of
the DIY market is held by independently owned stores which, while principally
selling to wholesale accounts, have significant DIY sales. The Company also
competes with other automotive specialty retailing chains, such as R&S
Strauss, and in certain of its product categories (such as oil and certain
car care products) with discount and general merchandise stores. The
Company's major competitors in supplying the commercial market include
independent warehouse distributors, independently owned part stores,
automobile dealers and national warehouse distributors and associations such
as National Automotive Parts Association (NAPA). The Company may also face
competition from large regional automotive aftermarket chains based in other
areas of the country, in the event that they enter the Company's market, such
as Pep Boys which has recently opened four stores in Long Island, New York.

The principal competitive factors which effect the Company's business are
store location, customer service, product selection, quality and price. The
Company believes that it currently competes favorably with its competition with
respect to these factors. The Company has well developed warehouse
distribution channels and vendor relationships. Because of volume purchases,
the Company is able to offer its products at competitive prices. As a result of
its advertising program, the Company believes that products at the store
level are able to sell at a faster rate than those of its competitors which
do not utilize such an ad campaign. In addition, "Aid Auto Stores" is a
highly recognized name in the Company's market. The combination of the
Company's retail and distribution expertise relating to automotive
products has enabled Ames to obtain major new chain accounts, which the
Company will seek to expand in the future.

Employees

As of June 28, 1996, the Company employed approximately 280 persons
(excluding franchisees and their employees), of whom 182 were employed at its
existing Company-owned Aid Auto Stores, and 98 were employed at the Company's
Westbury, New York executive offices and distribution center (including four
executive officers, 52 warehouse personnel, 9 sales representatives, two
advertising personnel and 31 corporate and administrative personnel).
Currently 43% of the Company's warehouse employees are subject to a
collective bargaining arrangement with International Brotherhood of Teamsters
Local 239. The Company believes that its labor relations are good. The Company
has recently signed a new three-year agreement extending through January 31,
1999 with the union representing the warehouse employees, which agreement has
been ratified by the union membership.

Trademarks

The Company's "Aid" trademark used in connection with certain of the
Company's automotive products is registered in the United States Patent and
Trademark Office, as well as in the states of New York and New Jersey. There
are no infringing uses known by the Company which could materially affect the
use of such mark. In addition, the Company's "Aid Auto Stores" service mark
used in connection with retail store services is registered with the states of
New York and New Jersey, and a service mark application has been filed with
the United States Patent and Trademark Office. With regard to such
application, the Company has been notified that the service mark will be
published and that if there is no opposition filed by third parties during
the prescribed time period, such service mark will be registered. The Company
believes that its trademark and service mark have significant value and are
important to its marketing and expansion efforts. In addition, the Company
has applied for trademark registration for the Perfect Choice name and mark
utilized in connection with its private label merchandise program currently
in effect and under continued development. There can be no assurance that
the Company will be able to register such other names or service marks or any
other name or mark it may consider important, or that the Company's current or
future trademarks do not or will not violate the proprietary rights of others,
that the Company's marks could be upheld if challenged, or that the Company
may not be prevented from using its marks, any of which could have an adverse
effect on the Company. Enforcement of one's own proprietary rights or the
defense against the proprietary claims of another can be extremely costly and
there can be no assurance that the Company will have the financial resources
necessary to enforce or defend its marks.

Government Regulation

Although the Company is subject to various laws and governmental regulations
relating to its business, the Company does not believe that compliance with
such laws and regulations has a material impact on its operations. The
Company is subject to federal and state laws, rules and regulations that
govern the offer and sale of franchises. To offer and sell franchises, the
Company is required by the United States Federal Trade Commission to furnish
to prospective franchisees a current franchise offering disclosure document.
The Company uses a Uniform Franchise Offering Circular ("UFOC") to satisfy
this disclosure obligation. In addition, the Company is required to register
and file a UFOC with the appropriate New York State authority. The Company
periodically updates its UFOC to include information about new officers and
directors, recent financial information and other material events. In
addition to New York, other states require registration, special prescribed
disclosure or other compliance before the Company could offer franchises in
those jurisdictions. However, the Company has no current plans to offer
franchises in any states other than New York and New Jersey, if at all.

Properties

The Company's executive offices and distribution center are located at 275
Grand Boulevard, Westbury, New York. Such premises include approximately
1,636,000 cubic feet of warehouse space and are the subject of a lease
expiring September 13, 2000 (subject to a possible five year extension). The
annual base rental through the period ending September 13, 2000 was
re-negotiated in 1995 so that it will remain constant at $297,505. In
addition, the Company pays applicable real estate taxes. The Company believes
that its space in Westbury is sufficient to accommodate the increased
inventory and distribution demands resulting from the initial stages of the
mini-warehouse Superstore growth program.

The Company owns the building for its store located in Williamsburg,
Brooklyn, New York, which opened in January 1996. The Company took control of
the building and converted the franchised store to a Company-owned store
as a result of the franchisee's failure to pay its outstanding indebtedness
to the Company.

In addition to the above facilities, there are 16 Company-owned Aid Auto
Stores for which the Company leases space. Leases on these stores expire from
August 22, 1998 to March 31, 2008 and have annual rental rates ranging from
$19,040 to $221,425.

For the Company's new Superstores, it will lease empty space or assume the
leases of existing tenants, as required. The Company believes that adequate
facilities can be located for additional Superstores on acceptable terms.

MANAGEMENT

Directors and Executive Officers

The current directors and executive officers of the Company are as follows:

Name Age Position

Philip L. Stephen 60 Chairman of the Board, Chief Executive
Officer, President & Treasurer

Bruce Allen Ziskin 50 Vice President of Merchandising

Greg M. Stephen 31 Vice President of Sales, Secretary and
Director

Frank Mangano 30 Chief Financial Officer

Lewis R. Cowan 66 Director

Ira Scott Greenspan 37 Director

Leonard Genovese 62 Director

Werner S. Neuburger 60 Director

Philip L. Stephen has been the Chief Executive Officer, President,
Treasurer and a director (Chairman of the Board) of the Company since 1985
(when he acquired control of the Company). Prior to his acquisition of the
Company and through 1988 and 1989, respectively, Mr. Stephen was the owner
and President of Export Agencies International, an automotive export
management company, and Minthorne International Co., Inc., a company engaged
in the marketing and exporting of medical communications equipment and other
electronic industrial products.

Bruce Allen Ziskin has been Vice President of Merchandising of the Company
since January 1991. From 1981 to 1990, Mr. Ziskin was employed by Trak Auto, a
Maryland based automotive parts retail chain, including as Vice President of
Merchandising from 1988 to 1990, and from 1975 to 1980 he was employed by
E. J. Korvettes, a New York department store, including as Vice President of
Merchandising from 1978 to 1980.

Greg M. Stephen has been Vice President of the Company since 1991, Secretary
of the Company and a director of the Company since February 1995, and was
General Manager of one of the Company-owned stores during 1990. From 1988 to
1989, he held various other positions with the Company, primarily at Company-
owned stores. Mr. Stephen worked at the Retirement System for Savings
Institutions, a pension fund management firm, from 1987 to 1988.

Frank Mangano has been the Chief Financial Officer of the Company since June
1996. From 1988 through 1996, Mr. Mangano was employed by Grant Thornton LLP,
the independent certified public accountants for the Company, and most
recently held the position of audit manager of that firm.

Lewis R. Cowan has been a director of the Company since February 1995. Since
1994, Mr. Cowan has been Senior Counsel of the law firm Cowan, Liebowitz &
Latman, P.C., of which he was a founding member. Mr. Cowan held the position
of partner of such law firm for over 30 years prior to 1994.

Ira Scott Greenspan has been a director of the Company since February 1995.
From October 1994 to the present, Mr. Greenspan has been a Managing Director of
Harmonie Capital Group L.P., a private banking firm. From September 1993 to
October 1994, Mr. Greenspan was a Managing Director of Brenner Securities
Corporation, an investment banking firm. From June 1992 to September 1993,
Mr. Greenspan was Executive Vice President and Head of Investment Banking of
GKN Securities Corp., an investment banking and brokerage firm. For more than
five years prior thereto, Mr. Greenspan was a corporate and securities lawyer
at Tenzer, Greenblatt LLP, a New York law firm, and most recently was a
Partner of that firm.

Leonard Genovese has been a director of the Company since March 1995.
Mr. Genovese has been President of Genovese Drug Stores, Inc. ("Genovese
Stores"), a major drug store chain, since 1974 and has also served as
Chairman of the Board since 1978. He served as Executive Vice President of
Genovese Stores from 1968 to 1974 and as Vice President, Director of
Operations from 1966 to 1968. Mr. Genovese is a member of the Board of
Directors of TR Financial, Inc., the parent company of Roosevelt Savings
Bank, and of the National Association of Chain Drug Stores.

Werner S. Neuburger has been a director of the Company since January 1996
and was a Vice President of the Company from December 1995 to April 1996.
From 1967 to December 1995, Mr. Neuburger was Chief Executive Officer and
President of Nuby's Auto, Inc., and affiliated companies, which operated ten
Aid Auto Stores franchises until they were acquired by the Company in December
1995. Mr. Neuburger serves as a member of the Board of Directors of the Long
Island Commercial Bank.

The Company has agreed, for a period of three years from April 10, 1995, if
so requested by Whale, to nominate and use its best efforts to elect a
designee of Whale as a director of the Company or, at Whale's option, as a
non-voting adviser to the Company's Board of Directors. The Company's officers
and directors have agreed to vote their shares of Common Stock in favor of such
designee. Whale has not yet exercised its right to designate such a person.

All directors of the Company hold office until the next annual meeting of
stockholders of the Company or until their successors are elected and
qualified. Executive officers hold office until their successors are elected
and qualified, subject to earlier removal by the Board of Directors.

No family relationship exists between any director or executive officer and
any other director or executive officer of the Company except that Greg M.
Stephen, who is a Vice President and director, is the son of Philip L.
Stephen, Chairman, Chief Executive Officer and President.

Indemnification of Directors

The Company's Certificate of Incorporation eliminates the liability of a
director of the Company for monetary damages for breach of duty as a
director, subject to certain exceptions. In addition, the Certificate of
Incorporation provides for the Company to indemnify, under certain
conditions, directors, officers, employees and agents of the Company against
all expenses, liabilities and losses reasonably incurred by such persons in
connection therewith. The foregoing provisions may reduce the likelihood
of derivative litigation against directors and may discourage or deter
stockholders or management from suing directors for breaches of their duty of
care, even though such an action, if successful, might otherwise benefit the
Company and its stockholders.

Summary Compensation Table

The following table sets forth the compensation paid by the Company during
the years ended December 31, 1995, 1994 and 1993 to its Chief Executive
Officer and President and another executive officer. No other executive
officer of the Company received compensation in excess of $100,000 during
the year ended December 31, 1995.

Annual Compensation
Long-Term
Compensation
Securities
Name and Salary Underlying
Principal Postion Year ($)(1) Other($) Options (#)

Philip L. Stephen, 1995 $181,136 0 0
Chief Executive Officer 1994 $132,000 0 0
and President 1993 $134,688 0 0

Bruce Allen Ziskin, 1995 $101,923 0 0
Vice President of 1994 $ 97,403 0 50,000
Merchandising 1993 $ 90,481 0 0

(1) The columns for "Bonus," Restricted Stock Award(s)," "LTIP Payouts" and
"All Other Compensation" have been omitted because there is no
compensation of the type required to be reported in such columns.

Option Grants in 1995
(Individual Grants)

Potential
Realizable
Value at Assumed
Annual Rates of
Stock Price
No. of % of Total Appreciation for
Securities Options Option Term
Underlying Granted to Exercise
Options Employees Price Exp.
Name Granted(#) in year ($/Sh) Date 5% 10%

Philip L. Stephen -- -- -- -- -- --

Bruce Allan Ziskin 50,000 33.3% $4.00 02/29/2000 55,256 122,102

Aggregated Option Exercises During 1995 and Year End Option Values

The following table provides information related to options exercised by
each of the named executive officers during 1995 and the number and value of
options held at December 31, 1995. The Company does not have any outstanding
stock appreciation rights.

[Enlarge/Download Table]

Value of Unexercied
Shares Value Number of Unexercised The-Money Options at Yeasr
Acquired on Realized Options at Year End (#) End ($) (1)
Name Exercise(#) ($) Exercisable Unexercisable Exercisable Unexercisable

Philip L. Stephen -- -- 0 0 0 0
Bruce Allen Ziskin -- -- 0 50,000 0 0

<FN>
(1) The closing price for the Company's Common stock as reported on the
NASDAQ Small-Cap Market on December 31, 1995 was $3.75. The exercise
price of Mr. Ziskin's options exceed such price, and, accordingly, no
value is set forth in the above table.

Employment Agreements

The Company has entered into a three-year employment agreement with Philip
L. Stephen effective April 19, 1995. The agreement provides for annual base
compensation of $200,000, a cost-of-living increase in the second and third
years, and, based upon the Company's performance in the first two years, a
bonus or salary increase in the third year at the discretion of the Board of
Directors. In the event of a takeover or other acquisition of the Company,
the agreement provides that Mr. Stephen shall receive a severance payment
equal to six months of his base salary. The employment agreement requires
that Mr. Stephen devote his full time to the Company and contains a provision
that Mr. Stephen shall not compete or engage in a business competitive with
the current or anticipated business of the Company for the term of the
Agreement and for two years thereafter.

Stock Option Plan

In January 1995, the Company adopted the 1995 Stock Option Plan (the "Stock
Option Plan"), pursuant to which 400,000 shares of Common Stock are reserved
for issuance upon exercise of options. The Stock Option Plan is designed to
serve as an incentive for retaining qualified and competent employees,
directors and consultants.

The Company's Board of Directors, or a committee thereof, administer the
Stock Option Plan and is authorized, in its discretion, to grant options
thereunder to all eligible employees of the Company, including officers and
directors (whether or not employees) of, and consultants to the Company. The
Stock Option Plan provides for the granting of both "incentive stock options"
(as defined in Section 422 of the Internal Revenue Code) and nonstatutory
stock options. Options can be granted under the Stock Option Plan on such
terms and at such prices as determined by the Board of Directors, or a
committee thereof, except that, in the case of an incentive stock option, the
per share exercise price of options will not be less than the fair market
value of the Common Stock on the date of grant. In the case of an incentive
stock option granted to a 10% stockholder, the per share exercise price will
not be less than 110% of such fair market value. The aggregate fair market
value of the shares covered by incentive stock options granted under the
Stock Option Plan that become exercisable by a grantee for the first time in
any calendar year is subject to a $100,000 limit.

Options granted under the Stock Option Plan will be exercisable after the
period or periods specified in each option agreement. Options granted under
the Stock Option Plan are not exercisable after the expiration of ten years
from the date of grant and are not transferable other than by will or by the
laws of descent and distribution.

As of the date of this Prospectus, the Company has granted five-year
incentive stock options to purchase 50,000 shares of Common Stock to each of
Mr. G. Stephen and Mr. Ziskin at an exercise price equal to $4.00 per share,
and to Mr. Mangano at an exercise price of $4.13, as well as a five-year
incentive stock option to purchase 25,000 shares of Common Stock, at an
exercise price equal to $4.00 per share, to the former Chief Financial
Officer of the Company, all of which options vest to the extent of one-third
thereof on each of the first, second and third anniversary dates from the
date of grant (the first anniversary date having been achieved). In
addition, nonstatutory stock options to purchase 12,500 have been granted to
three of the Company's outside directors (i.e. Messrs. Cowan, Greenspan and
Genovese); 7,500 of which are at an exercise price of $5.00 per share and
5,000 of which are at an exercise price of $4.50.

Compensation of Directors

The Company's directors are elected at the annual meeting of stockholders
to hold office until the annual meeting of stockholders for the ensuing year
or until their successors have been duly elected and qualified. The Company
pays directors who are not employees of the Company a fee of $500 per Board
meeting, and will reimburse all directors for their expenses in connection
with their activities as directors of the Company. In February 1995, two of
the Company's outside directors (Messrs. Cowan and Greenspan) were granted a
non-incentive options to purchase 7,500 shares of Common Stock at $5.00 per
share pursuant to the Company's Stock Option Plan and in March 1995 another
outside director, Mr. Genovese, was similarly granted a non-incentive option
to purchase 7,500 shares of Common Stock at $5.00 per share. In June 1996,
such three outside directors were each granted a non-incentive option to
purchase 5,000 shares of Common Stock at $4.50 per share pursuant to the
Company's Stock Option Plan.

CERTAIN TRANSACTIONS

The Company has entered into a loan agreement with the Bank, which has been
amended from time to time, and which provides for borrowings under a two year
revolving credit line of up to an aggregate of $6,000,000. At December 31,
1995, an aggregate of $5,011,207 was outstanding under such credit line. In
January 1995, the credit line was increased from $4,500,000 to $6,000,000.
During 1995 and prior to the Initial Public Offering in April 1995,
approximately $550,000 of the available balances was utilized to repay
outstanding loans to the Company by Mr. Philip L. Stephen, Chairman of the
Board, Chief Executive Officer, President, and majority stockholder of the
Company. Interest on the line of credit is at the Bank's prime lending rate.

Mr. Stephen has loaned the Company various amounts from time to time. In
1994, Mr. Stephen loaned a total of $640,000 and was repaid a total of
$905,385, leaving an aggregate outstanding balance at December 31, 1994 of
$3,051,951. The average interest rate on the loans in 1994 was 7.72%. During
1995 and prior to the Initial Public Offering in April 1995, the Company has
repaid all but $2,500,000 of the loans by Mr. Stephen. In connection with
the execution of the new loan agreement, the Bank released the personal
guarantee of Mr. Stephen and also released the subordination of his loan to the
Company to the loan by the Bank. In March 1996, the subordination was
reinstated for $400,000, less than the full amount of the loan, in connection
with the Bank's waiver of the December 31, 1995 technical violation of one of
the financial covenants in the loan agreement. In May 1996, the Company
temporarily received an additional $800,000 on its credit line with the Bank
in exchange for a $500,000 six-month personal guarantee from Mr. Stephen,
which expires on October 23, 1996. Total loan repayments to Mr. Stephen in
1995 were $551,951. The average interest rate on the loans in 1995 was
7.08%. The remaining $2,500,000 is evidenced by a promissory note. The note
initially bore interest of 7% per annum, payable monthly, with principal
payable in quarterly installments commencing May 1, 1996 through February 1,
2000. On January 31, 1996, the interest rate converted to the interest rate
charged by the Company's bank. The note provides for immediate payment thereof
upon, among other things, a change in a majority of the continuing directors of
the Company (as defined in the note) or a demand by the Bank of payment in
full of outstanding Bank indebtedness.

Mr. Stephen is the sole stockholder of Greg Lauren Advertising Company, Inc.
("Greg Lauren"). Greg Lauren purchases print advertising space on behalf of
the Company at discounted advertising agency rates and then invoices the
Company at such rates, without any additional charge. Approximately $96,000
and $69,000 of the Company's annual printed advertising space was purchased
by Greg Lauren in 1994 and 1995, respectively.

PRINCIPAL AND SELLING SECURITYHOLDERS

The following table sets forth below, based upon information obtained from
the persons named below, certain information regarding beneficial ownership
of the Company's Common Stock as of June 15, 1996 and as adjusted to reflect
the sale of the Common Stock offered hereby by (i) each stockholder known by
the Company to be the beneficial owner of 5% or more of the outstanding
shares of Common Stock, (ii) each director of the Company, (iii) each person
named in the Summary Compensation Table above and (iv) all of the Company's
current officers and directors as a group.

[Enlarge/Download Table]

Percentage
of
Outstanding Percentages
Shares Securities Securities of
Name and Securites Owned to be Sold Owned Outstanding
Address of Owned Prior Before in Offering After Shares Owned
Beneficial Holder to Offering <F1> Offering <F2> Offering Offering After Offering

Philip L. Stephen 2,000,000 50.5% 0 2,000,000 31.3%
275 Grand Boulevard
Westbury, NY 11590

Greg M. Stephen 17,667 <F3> * 0 1,000 *

Lewis R. Cowan 12,500 <F4> * 0 12,500 *

Ira Scott Greenspan 12,500 <F4> * 0 12,500 *

Leonard Genovese 12,500 <F4> * 0 12,500 *

Werner S. Neuburger 157,596 4.0% 0 157,596 2.5%

Bruce Allen Ziskin 16,667 <F4> * 0 16,667 *

Whale Securities
Co., L.P. 360,000 <F5> <F6> 8.3% 360,000 0 0
650 Fifth Ave.
New York, NY 10019

All officers and
directors as a
group (8 persons) 2,229,430 <F7> 55.3% 0 2,229,430 34.5%

* less than 1%.

<FN>
<F1> A person is deemed to be the beneficial owner of securities that can be
acquired by such person upon the exercise of options or warrants. Each
beneficial owner's percentage ownership is determined by assuming that
options or warrants that are held by such person (but not those held by
any other person) have been exercised. Unless otherwise noted, the
Company believes that all persons named in the table have sole voting
and investment power with respect to all shares of Common Stock
beneficially owned by them.

<F2> Assumes no exercise of any of the Warrants.

<F3> Includes 16,667 shares of Common Stock underlying currently exercisable
options but does not include options to purchase 33,333 shares of
Common Stock, which options were not exercisable within 60 days of
April 30, 1996.

<F4> Represents shares of Common Stock underlying currently exercisable stock
options.

<F5> Represents 360,000 shares underlying the Underwriter's Warrant and the
Whale Warrants.

<F6> These securities are held in Whale's name for the account of certain
employees, former employees and equity owners of Whale.

<F7> Includes options to purchase an aggregate of 70,834 shares of Common
Stock. Does not include options to purchase an aggregate of 83,333 shares
of Common Stock granted to executive officers of the Company, which
options were not exercisable within 60 days of June 15, 1996.

The Selling Securityholders will be entitled to receive all of the
proceeds from the future sale of their shares of Common Stock. The Company
will not receive any proceeds from the future sale of any of the
aforementioned shares by their respective holders.

DESCRIPTION OF SECURITIES
General

The Company is authorized to issue 15,000,000 shares of Common Stock, par
value $.001 per share, and 2,000,000 shares of Preferred Stock, par value
$.001 per share. As of the date of this Prospectus, 3,957,596 shares of
Common Stock are outstanding and as of May 31, 1996 there were 25 holders of
record of the Company's Common Stock. No shares of Preferred Stock are
currently outstanding.

Common Stock

The holders of Common Stock are entitled to one vote for each share held
on all matters submitted to a vote of stockholders, including the election of
directors. Accordingly, holders of a majority of the shares of Common Stock
entitled to vote in any election of directors may elect all of the directors
standing for election if they choose to do so. The Certificate of
Incorporation does not provide for cumulative voting for the election of
directors. Holders of Common Stock will be entitled to receive ratably such
dividends, if any, as may be declared from time to time by the Board of
Directors out of funds legally available therefore, and will be entitled to
receive, pro rata, all assets of the Company available for distribution to such
holders upon liquidation. Holders of Common Stock have no preemptive,
subscription or redemption rights. All outstanding shares of Common Stock
are, and the Common Stock offered hereby, upon issuance and sale, will be,
fully paid and nonassessable.

Preferred Stock

Pursuant to the Certificate of Incorporation, the Company is authorized to
issue "blank check" preferred stock, which may be issued from time to time in
one or more series upon authorization by the Company's Board of Directors.
The Board of Directors, without further approval of the stockholders, is
authorized to fix the dividend rights and terms, conversion rights, voting
rights, redemption rights and terms, liquidation preferences, and any other
rights, preferences, privileges and restrictions applicable to each series of
preferred stock. The issuance of preferred stock, while providing
flexibility in connection with possible acquisitions and other corporate
purposes could, among other things, adversely affect the voting power of the
holders of Common Stock and, under certain circumstances, make it more
difficult for a third party to gain control of the Company, discourage bids
for the Company's Common Stock at a premium or otherwise adversely affect the
market price of the Common Stock.

Redeemable Warrants

Each Warrant entitles the registered holder thereof to purchase one share
of Common Stock, at a price of $4.00, subject to adjustment in certain
circumstances, at any time until April 10, 1998.

The Warrants are redeemable by the Company, upon the consent of Whale, at
any time upon notice of not less than 30 days, at a price of $.10 per
Warrant, provided that the closing bid price of the Common Stock on all 20 of
the trading days ending on the third day prior to the day on which the
Company gives notice has been at least 150% (currently $6.00, subject to
adjustment) of the then effective exercise price of the Warrants. All
warrantholders have exercise rights until the close of business on the date
fixed for redemption.

The Warrants were issued in registered form under a Warrant Agreement
between the Company and American Stock Transfer & Trust Company, as Warrant
Agent. Reference is made to said Warrant Agreement for a complete
description of the terms and conditions therein (the description herein
contained being qualified in its entirety by reference thereto).

The exercise price and number of shares of Common Stock or other
securities issuable on exercise of the Warrants are subject to adjustment in
certain circumstances, including in the event of a stock dividend,
recapitalization, reorganization, merger or consolidation of the Company.
However, such Warrants are not subject to adjustment for issuances of Common
Stock at a price below the exercise price of the Warrants, including the
issuance of shares of Common Stock pursuant to the Company's Stock Option Plan.

The Warrants may be exercised upon surrender of the Warrant certificate on
or prior to the expiration date at the offices of the Warrant Agent, with the
exercise form on the reverse side of the certificate completed and executed
as indicated, accompanied by full payment of the exercise price (by certified
check payable to the Company) to the Warrant Agent for the number of Warrants
being exercised. The warrantholders do not have the rights or privileges of
holders of Common Stock.

No Warrant will be exercisable unless at the time of exercise the Company
has filed a current prospectus with the Commission covering the shares of
Common Stock issuable upon exercise of such Warrant and such shares have been
registered or qualified or deemed to be exempt under the securities laws
of the state of residence of the holder of such Warrant. The Company will
use its best efforts to have all such shares so registered or qualified on or
before the exercise date and to maintain a current prospectus relating
thereto until the expiration of the Warrants, subject to the terms of the
Warrant Agreement. While it is the Company's intention to do so, there is no
assurance that it will be able to do so.

No fractional shares will be issued upon exercise of the Warrants.
However, if a warrantholder exercises all Warrants then owned of record by
him, the Company will pay to such warrantholder, in lieu of the issuance of
any fractional share which is otherwise issuable, an amount in cash based on
the market value of the Common Stock on the last trading day prior to the
exercise date.

Underwriter's Warrants

In connection with the Initial Public Offering, the Company sold to Whale
for an aggregate of $180.00, the Underwriter's Warrants to purchase up to
180,000 shares of Common Stock at a purchase price of $7.90 per share and/or
up to 180,000 Whale Warrants at a purchase price of $.158 per Warrant. The
Whale Warrants are exercisable for a three-year period that commenced on
April 10, 1995 (the "Warrant Exercise Term") each to purchase one share of
Common Stock at a purchase price of $6.60 per share. Subject to certain
limitations and exclusions, the Company has agreed, at the request of the
holders of a majority of the Underwriter's Warrants, at the Company's
expense, to register the Underwriter's Warrants, the shares of Common Stock
and Whale Warrants underlying the Underwriter's Warrants, and the shares of
Common Stock issuable upon exercise of the underlying Whale Warrants under
the Securities Act on one occasion during the Warrant Exercise Term and to
include the Underwriter's Warrants and all such underlying securities in any
appropriate Registration Statement which is filed by the Company during the
seven year period following April 10, 1995.

Statutory Provisions Affecting Stockholders

The Company is subject to the State of Delaware's "business combination"
statute, Section 203 of the Delaware General Corporation Law. In general,
such statute prohibits a publicly held Delaware corporation from engaging in
various "business combination" transactions with any "interested stockholder"
for a period of three years after the date of the transaction in which the
person became an "interested stockholder," unless (i) the transaction in
which the interested stockholder obtained such status or the business
combination is approved by the Board of Directors prior to the date the
interested stockholder obtained such status; (ii) upon consummation of the
transaction which resulted in the stockholder becoming an "interested
stockholder," the "interested stockholder" owned at least 85% of the voting
stock of the corporation outstanding at the time the transaction commenced,
excluding for purposes of determining the number of shares outstanding those
shares owned by (a) persons who are directors and also officers and (b)
employee stock plans in which employee participants do not have the right to
determine confidentially whether shares held subject to the plan will be
tendered in a tender or exchange offer; or (iii) on or subsequent to such
date the "business combination" is approved by the Board of Directors and
authorized at an annual or special meeting of stockholders by the affirmative
vote of at least 66-2/3% of the outstanding voting stock which is not owned
by the "interested stockholder." A "business combination" includes mergers,
asset sales and other transactions resulting in financial benefit to a
stockholder. An "interested stockholder" is a person who, together with
affiliates and associates, owns (or within three years, did own) 15% or more
of a corporation's voting stock. The statute could prohibit or delay mergers
or other takeover or change in control attempts with respect to the Company
and, accordingly, may discourage attempts to acquire the Company.

SHARES ELIGIBLE FOR FUTURE SALE

Upon the consummation of this offering, the Company will have 6,387,596
shares of Common Stock outstanding (assuming the exercise of the Warrants and
the Whale Warrants, but not the outstanding options and warrants). All
2,430,000 shares of Common Stock being offered hereby will be immediately
tradeable without restriction or further registration under the Securities
Act. The outstanding shares of Common Stock include 2,157,596 shares of
Common Stock outstanding deemed to be "restricted securities," as that term
is defined under Rule 144 promulgated under the Securities Act, in that such
shares were purchased by such stockholders of the Company in a transaction
not involving a public offering, and, as such, may only be sold pursuant to a
registration statement under the Securities Act, in compliance with
the exemption provisions of Rule 144, or pursuant to another exemption under
the Securities Act. 2,000,000 of the restricted shares of Common Stock are
eligible for sale under Rule 144, subject to the volume limitations
prescribed by the Rule. The holder of the balance of such shares (157,596
shares) has certain piggyback registration rights and such shares, in any
case, become saleable under Rule 144 in December 1997.

In general, under Rule 144 as currently in effect, any person (or persons
whose shares are aggregated) who has beneficially owned restricted shares for
at least two years is entitled to sell, within any three-month period, a
number of shares that does not exceed the greater of 1% of the then outstanding
shares of issuer's common stock or the average weekly trading volume during the
four calendar weeks preceding such sale, provided that certain public
information about the issuer as required by Rule 144 is then available and
the seller complies with certain other requirements. Affiliates may sell
such shares in compliance with Rule 144, other than the holding period
requirement. A person who is not an affiliate, has not been an affiliate
within three months prior to sale, and has beneficially owned the restricted
shares for at least three years is entitled to sell such shares under Rule
144 without regard to any of the limitations described above.

The possibility that substantial amounts of Common Stock may be sold in
the public market may adversely affect prevailing market prices for the
Common Stock and could impair the Company's ability to raise capital through
the sale of its equity securities.

PLAN OF DISTRIBUTION

Of the securities covered by this Prospectus, 180,000 shares of Common
Stock and 180,000 Whale Warrants are issuable upon exercise of the
Underwriter's Warrants, 2,070,000 shares are issuable upon exercise of the
Warrants, and 180,000 are issuable upon exercise of the Whale Warrants. This
Prospectus also covers the resale by the holders of the securities underlying
the Underwriter's Warrant. From time to time, one or more of the Selling
Shareholders may pledge, hypothecate or grant a security interest in some or
all of the shares of Common Stock, Warrants, Underwriter's Warrant or Whale
Warrants, and the pledgees, secured parties or persons to whom such shares
have been hypothecated shall, upon foreclosure in the event of default, be
deemed to be Selling Stockholders for purposes hereof.

The shares of Common Stock and the Whale Warrants underlying the
Underwriter's Warrant, and the shares of Common Stock underlying the Whale
Warrants, may be offered for the account of the holder or holders from time
to time, as market conditions permit on Nasdaq, or, on the Boston Stock
Exchange, or otherwise, through ordinary brokerage transactions, in
negotiated transactions, at fixed prices which may be changed, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices, or at negotiated prices. The holders may effect such
transactions by selling shares to or through broker-dealers, and all such
broker-dealers may receive compensation in the form of discounts, concessions
or commissions from the holders and/or the purchasers of the securities for
whom such broker-dealers may act as agent or to whom they sell as principal,
or both (which compensation as to a particular broker-dealer might be in
excess of customary commissions). The aforementioned methods of sale
described above may not be all-inclusive.

Any broker-dealer acquiring securities in the over-the-counter market from
the holders may sell the securities either directly, in its normal market-
making activities, through or to other brokers on a principal or agency basis
or to its customers. Any such sales may be at prices then prevailing in the
over-the-counter market, at prices related to such prevailing market prices
or at negotiated prices to its customers or a combination of such methods.
Such broker-dealers that act in connection with the sale of the shares
hereunder might be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act of 1933, as amended (the "Securities Act"); any
commissions received by them and any profit on the resale of shares as
principal might be deemed to be underwriting discounts and commissions under
the Securities Act. Any such commissions, as well as other expenses of the
holders and applicable transfer taxes, are payable by such parties, as the
case may be.

The Company will pay to Whale a fee of 5% of the exercise price of each
Warrant exercised provided however, that Whale will not be entitled to
receive such compensation if (i) the market price of the Company's Common
Stock on the date the Warrant is exercised is lower than the then Warrant
exercise price; (ii) the Warrant was held in a discretionary account; (iii)
disclosure of compensation arrangements was not made at the time of the
exercise of the Warrant; (iv) the holder of the Warrants has not confirmed in
writing that Whale solicited such exercise, or (v) the solicitation of
exercise of the Warrants was not in violation of Rule 10b-6 promulgated under
the Exchange Act.

Pursuant to the Underwriting Agreement entered in to by the Company and
Whale in connection with the Company's Initial Public Offering in April 1995,
the Company has agreed to indemnify Whale against certain liabilities,
including liabilities under the Securities Act.

The Company has entered into a two-year consulting agreement with Whale
which expires April 10, 1997 pursuant to which Whale received $60,000.

The Company also agreed that for a two-year period expiring April 10,
1997, it will pay Whale a finder's fee for certain mergers, acquisitions,
joint ventures and other transactions, in consideration for origination of
such transactions.

LEGAL MATTERS

Legal matters in connection with the securities offered hereby will be
passed upon for the Company by Breslow & Walker, 875 Third Avenue, New York,
N.Y. 10022.

EXPERTS

The consolidated financial statements of the Company as of December 31,
1995 and for the two years then ended, included in this Registration Statement,
in reliance upon the reports of Grant Thornton, LLP,independent certified
public accountants, upon the authority of said firm as experts in accounting
and auditing.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission, 450
Fifth Street, N.W., Washington, D.C., a Registration Statement on Form SB-2
under the Securities Act of 1933, as amended, for the registration of the
securities offered hereby. This Prospectus, which is part of the Registration
Statement, does not contain all of the information contained in the
Registration Statement. For further information with respect to the Company
and the securities offered hereby, reference is made to the Registration
Statement, including the exhibits thereto, which may be inspected, without
charge, at the Office of the Securities and Exchange Commission, or copies of
which may be obtained from the Commission in Washington, D.C., upon payment
of the requisite fees. Statements contained in this Prospectus as to the
content of any contract or other document referred to are not necessarily
complete, and in each instance reference is made to the copy of such contract
or other document filed as an exhibit to the Registration Statement, each such
statement being qualified in all respects by such reference.

INDEX TO FINANCIAL STATEMENTS

Page
Report of Independent Certified Public Accounts F-2

Financial Statements

Consolidated Balance Sheet as of December 31, 1995 F-3
Consolidated Statements of Operations for the years
ended December 31, 1995 and 1994 F-5
Consolidated Statements of Changes in Stockholders'
Equity for the years ended December 31, 1995 and 1994 F-6
Consolidated Statement of Cash Flows for the years
ended December 31, 1995 and 1994 F-7
Notes to Consolidated Financial Statements F-9

Interim Financial Statements

Consolidated and Condensed Balance Sheet as of March 31, 1996 F-25
Consolidated and Condensed Statements of Operations for the
three months ended March 31, 1996 and the three months ended
March 31, 1995 F-26
Consolidated and Condensed Statements of Cash Flows for the
three months ended March 31, 1996 and the three months ended
March 31, 1995 F-27
Notes to Consolidated and Condensed Interim Financial Statements F-28

Pro Forma Financial Information F-29

REPORT OF INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS

Board of Directors
Aid Auto Stores, Inc.

We have audited the accompanying consolidated balance sheet of Aid Auto
Stores, Inc. and subsidiaries as of December 31, 1995 and the related
consolidated statements of operations, stockholders' equity and cash flows
for the years ended December 31, 1995 and 1994. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Aid Auto
Stores, Inc. and subsidiaries as of December 31, 1995, the consolidated
results of their operations and their consolidated cash flows for the years
ended December 31, 1995 and 1994, in conformity with generally accepted
accounting principles.

GRANT THORNTON LLP

New York, New York
March 15, 1996

Aid Auto Stores, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS

December 31, 1995

ASSETS

CURRENT ASSETS
Cash and cash equivalents $ 4,766,893
Accounts receivable - trade, net of allowances
for doubtful accounts of $612,000 2,991,012
Notes receivable, net of allowances for
doubtful accounts of $190,00 245,014
Inventories 9,372,480
Prepaid expenses and other current asset 1,400,703
Deferred income taxes 268,000

Total current assets 19,044,102

FIXED ASSETS, NET 1,754,124

COSTS IN EXCESS OF NET ASSETS ACQUIRED, NET 3,929,376

OTHER ASSETS
Other intangibles 36,863
Notes receivable - net of current portion 218,824
Deferred income taxes 175,000
Security deposits 143,433

$25,301,722

The accompanying notes are an integral part of these statements.

Aid Auto Stores, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS

December 31, 1995

LIABILITIES AND SHAREHOLDER'S EQUITY

CURRENT LIABILITIES
Revolving credit line $ 5,011,200
Accounts payable 4,315,842
Accrued expenses 487,386
Current portion of long-term debt 2,208,225
Current portion of note payable - officer 468,750

Total current liabilities 12,491,403

LONG-TERM DEBT, NET OF CURRENT PORTION 1,582,373

DEFERRED OCCUPANCY COSTS 157,995

NOTE PAYABLE - OFFICER 2,031,250

COMMITMENTS AND CONTINGENCIES

STOCKHOLDER'S EQUITY
Preferred stock, $.001 par value; authorized,
2,000,000 shares; none issued --
Common stock, $.001 par value; authorized,
15,000,000 shares; 3,957,596 shares issued
and outstanding 3,958
Additional paid-in capital 9,006,809
Retained earnings 27,934

9,038,701

$25,301,722

The accompanying notes are an integral part of these statements.

Aid Auto Stores, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS

Year ended December 31,

1995 1994
Revenues
Net sales $19,967,652 $23,876,821
Franchise fees 296,181 305,275

20,263,833 24,182,096

Costs and expenses
Cost of sales 13,594,260 16,980,220
Selling and shipping 3,411,456 3,477,350
General and administrative 3,476,824 3,180,210

20,482,540 23,637,780

(Loss) income from operations (218,707) 544,316

Interest expense (705,244) (681,435)
Interest and other income 384,070 228,882

(Loss) income from continuing operations
before income taxes (539,881) 91,763

Provision for income taxes 164,000 72,000

NET (LOSS) INCOME $ (703,881) $ 19,763

(Loss) income per common share $(.22) $(.01)

Weighted average common shares outstanding 3,269,374 2,000,000

The accompanying notes are an integral part of these statements.

Aid Auto Stores, Inc. and Subsidiaries

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

Years ended December 31, 1995 and 1994

[Enlarge/Download Table]

Additional Total
Preferred Common Stock paid-in Retained stockholders'
stock Shares Amount capital earnings equity

Balance at January 1, 1994 $ - 2,000,000 $2,000 $ 961,894 $712,052 $1,675,946

Net Income 19,763 19,793

Balance at December 31, 1994 2,000,000 2,000 961,894 731,815 1,695,709

Issuance of common stock 1,800,000 1,800 7,295,073 7,296,873

Issuarnce of common stock in
connection with acquisition 157,596 158 749,842 750,000

Net loss (703,881) (703,881)

Balance at December 31, 1995 $ - 3,957,596 $3,958 $9,006,809 $ 27,934 $9,038,701

The accompanying notes are an integral part of this statement.

Aid Auto Stores, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

Year ended December 31,

1995 1994
Cash flows from operating activities
Net (loss) income $ (703,881) $ 19,763
Adjustments to reconcile net (loss)
income to net cash used in operating
activities
Depreciation and amortization 429,164 495,744
Provision for losses on accounts
receivable 237,000 132,000
Provision for losses on notes receivable 140,000 50,000
Deferred occupancy costs (164,176) 88,881
(Increase) decrease in operating assets
Accounts receivable 61,554 138,809
Notes receivable (132,288) (370,801)
Inventories (2,763,989) 1,057,281
Prepaid expenses and other current
assets (223,999) (197,489)
Security deposits (48,944) (182)
Deferred income taxes 126,000 (141,000)
Increase (decrease) in operating liabilities
Accounts payable 891,841 (1,461,115)
Accrued expenses 276,326 (49,699)
Income taxes payable (118,000) (42,009)

Net cash used in operating activities (1,993,392) (279,817)

Cash flows from investing activities
Purchase of fixed assets (479,209) (164,732)
Acquisition of Nuby's, net (122,191)

Net cash used in investing activities (601,400) (164,732)

Aid Auto Stores, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

Year ended December 31,

1995 1994

Cash flows from financing activities
Net borrowings under revolving credit line $ 614,156 $ 949,730
Principal payments of long-term debt (356,977) (161,502)
Loans from officers 640,000
Repayment of officer's loans (551,951) (905,385)
Net proceeds from issuance of common stock 7,296,873

Net cash provided by financing activities 7,002,101 522,843

Net increase in cash and cash equivalent 4,407,309 78,294

Cash and cash equivalents, at beginning of year 359,584 281,290

Cash and cash equivalents, at end of year $4,766,893 $ 359,584

Supplemental disclosures of cash flows information
Cash paid during the year for
Interest $ 660,451 $ 672,435
Income taxes 189,756 119,257

The accompanying notes are an integral part of these statements.

Aid Auto Stores, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 1995 and 1994

NOTE A - GENERAL

Aid Auto Stores, Inc. and subsidiaries are engaged in the sale of automotive
parts, accessories, chemicals and tools to franchised and independently owned
auto parts stores, as well as automotive centers, jobbers and chain store and
to the retail market.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant policies consistently applied in the preparation
of the accompanying consolidated financial statement follows:

1. Basis of Consolidation

The consolidated financial statements include the accounts of Aid Auto
Stores, Inc. and its wholly-owned subsidiaries (the "Company"). All
material intercompany balances and transations have been eliminated.

2. Cash and Cash Equivalents

Cash equivalents include all highly liquid investments purchased with an
original maturity of three months or less.

3. Inventory

Inventory, consisting primarily of merchandise purchased for resale, has
been valued at the lower of cost or market, using the first-in,
first-out method. Market is considered as net realizable value.

4. Fixed Assets and Depreciation

Property and equipment are recorded at cost. Depreciation and
amortization are computed using the straight-line method over the
estimated useful lives of the assets. Depreciation lives generally
range from three to five years for furniture and fixtures, computer

Aid Auto Stores, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

December 31, 1995 and 1994

NOTE B (continued)

equipment, transportation equipment and machinery and equipment.
Leasehold improvements are amortized over the useful life of the asset
or the term of the lease, whichever is shorter. Capital leases are
amortized over the term of the respective leases or the useful lives of
the related assets, whichever is shorter.

5. Revenue Recognition

The Company recognizes revenues from wholesale sales of automotive
parts when shipments are made from the warehouse. Retail sales of
automotive parts are recognized at the point of sale.

When an individual franchise is sold, the Company agrees to provide
certain services to the franchisee. Generally these services include
assistance in site selection, training personnel,design and set-up of
retail floor space and continuing advertising services for which a
monthly fee is charged. Revenue (initial franchise fee) from the sale
of an individual franchise is recognized when substantially all
services to be provided by the Company have been performed.

6. Deferred Occupancy Costs

The Company's leasing arrangements for its warehouse, office and
Company-owned franchise outlets include scheduled base rent increases
over the terms of each respective lease. The total amount of the base
rent payments is being charged to expenses using the straight-line
method over the term of the lease. The Company has recorded a
deferred credit to reflect the excess of rent expenses over cash
payments since inception of each respective lease.

7 . Income Taxes

The Company has adopted Statement of Financial Accounting Standards
No. 109, "Accounting for Income Taxes" ("SFAS No. 109"), effective
January 1, 1993. The standards for SFAS No. 109 require that the
Company utilize an asset and liability approach for financial
accounting and reporting for income taxes. The primary objectives of
accounting for income taxes under SFAS No. 109 are to (a) recognize
the amount of tax payable for the current year and (b) recognize the
amount of deferred tax liability or asset based on management's
assessment of the tax consequences of events that have been reflected
in the Company's financial statements or tax returns.

Aid Auto Stores, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

December 31, 1995 and 1994

NOTE B (continued)

8. Earnings Per Share

Earnings per share are computed by dividing net income by the weighted
average number of common shares outstanding during each period. 1995
stock options were not considered in the computation of earnings per
share since their inclusion would be antidilutive.

9. Use of Estimates in Consolidated Financial Statements

In preparing consolidated financial statements in conformity with
generally accepted accounting principles, management makes estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at
the date of the consolidated financial statements, as well as the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

10. Reclassifications

Certain reclassifications have been made to the 1994 presentation to
conform to the 1995 presentation.

11. Accounting Pronouncements Not Yet Adopted

Adoption of Statement of Financial Accounting Standards No. 121
("SFAS No. 121"), "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of," is required for fiscal
years beginning after December 15, 1995. The standards for SFAS
No. 121 require that the Company recognize and measure impairment
losses of long-lived assets and certain identifiable intangibles and
value long-lived assets to be disposed of. The primary objectives
under SFAS No. 121 are to: (a) recognize an impairment loss of an
asset whenever events or changes in circumstances indicate that its
carrying amount may not be

Aid Auto Stores, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

December 31, 1995 and 1994

NOTE B (continued)

recoverable and (b) if planning to dispose of long-lived assets or
certain identifiable intangibles, such assets have been reflected in
the Company's consolidated balance sheet at the net asset value less
cost to sell. The Company has not adopted SFAS No. 121. The impact
of adopting SFAS No. 121 on the Company's financial statements has not
yet been determined.

Adoption of Statement of Financial Accounting Standards No. 123
("SFAS No. 123"), "Accounting for Stock-Based Compensation," is
required for fiscal years beginning after December 15, 1995 and allows
for a choice of the method of accounting used for stock-based
compensation. Entities may use the "intrinsic value" method currently
based on APB No. 25 or the new fair value method contained in SFAS
No. 123. The Company intends to implement SFAS No. 123 in fiscal 1996
by continuing to account for stock-based compensation under APB No.
25. As required by SFAS No. 123, the pro forma effects on net income
and earnings per share will be determined as if the fair value-based
method had been applied and disclosed in the notes to the consolidated
financial statements.

NOTE C - FAIR VALUE OF FINANCIAL INSTRUMENTS

Statement of Financial Accounting Standards No. 107 ("SFAS No. 107"), "Fair
Value of Financial Instruments," requires disclosure of the estimated fair
value of an entity's financial instrument assets and liabilities. For the
Company, financial instruments consist principally of cash and cash
equivalents, subordinated promissory notes and long-term debt.

The following methods and assumptions were used to estimate the fair value of
each class of financial instrument for which it is practicable to estimate
that value:

1. Cash and Cash Equivalents

The carrying amount reasonably approximates fair value because of
the short maturity of those instruments.

Aid Auto Stores, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

December 31, 1995 and 1994

NOTE C (continued)

2. Long-term Debt and Note Payable - Officer

The fair value of the Company's long-term debt and note payable -
officer is estimated based upon the quoted market prices for the same
or similar issues or on the current rates offered to the Company for
debt of the same remaining maturities.

Year ended
December 31, 1995
Carrying Fair
amount amount

Cash and cash equivalents $4,767,000 $4,767,000
Long-term debt 3,790,000 3,790,000
Note payable - officer 2,500,000 2,500,000

NOTE D - COSTS IN EXCESS OF NET ASSETS ACQUIRED

In June 1985, 100% of the outstanding common stock of Aid Auto Stores, Inc.
was acquired by an officer of the Company. The acquisition was accounted
for by the purchase method and, accordingly, the purchase price was
allocated to assets acquired and liabilities assumed based upon the fair
market value at the date of acquisition. Costs in excess of net assets
acquired are being amortized over forty years.

In April 1991, the Company, through a newly formed subsidiary, White Plains
Aid, Inc., acquired certain assets and assumed certain liabilities of a
previously franchised store. The purchase price exceeded the basis of
these net assets by $285,361 and is being amortized over fifteen years.

On December 15, 1995, the Company consummated the acquisition of
substantially all of the assets and operating business of Nuby's Auto, Inc.
and Affiliates ("Nuby's"), pursuant to an Asset Purchase Agreement (the
"Agreement") dated November 9, 1995. These ten operating businesses were
franchises of the Company. The asset purchase price (excluding inventory)
was $3,500,000 and the purchase price for the inventory was $757,000 (net
of $1,000,000 of assumed trade payables

Aid Auto Stores, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

December 31, 1995 and 1994

NOTE D (continued)

relating to such inventory). The combined purchase price was paid in the
form of a $2,000,000 promissory note with principal and interest at 5-1/2%
per annum payable on January 2, 1996 (the note was fully paid), $1,507,324
in the form of ten-year subordinated promissory notes bearing interest at
one percentage point below the prime rate charged by the Company's bank in
the first year and at the prime rate thereafter, and 157,596 shares of the
Company's common stock valued at $750,000 on date of issuance. Costs in
excess of net assets acquired (excluding inventory) were $3,090,855 and are
being amortized over fifteen years. The operations of Nuby's are included
in the accompanying financial statements from the date of acquisition.
Unaudited pro forma consolidated results of operations, assuming the
acquisition took place at the beginning of the period, are presented below:

Net sales $28,950,808
Net loss (258,008)
Loss per share $(.08)

In connection with the acquisition, the sole shareholder of Nuby's has
become a director of the Company.

The Company periodically reviews the valuation and amortization of goodwill
to determine possible impairment by comparing the carrying value to the
undiscounted future cash flows of the related assets.

NOTE E - NOTES RECEIVABLE

Notes receivable of $653,838, net of allowance for doubtful accounts of
$190,000, consist of amounts due from franchisees, primarily for
merchandise purchases, which are payable in monthly principal installments
with interest charged at rates ranging from 6% to 11% per annum. Certain
of these notes are collateralized by real property and inventory and
personally guaranteed by the respective owners of the franchises.

Aid Auto Stores, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

December 31, 1995 and 1994

NOTE F - FIXED ASSETS

Fixed assets at December 31, 1995 consist of the following:

Building $ 215,000
Furniture and fixtures 1,681,464
Computer equipment 1,431,456
Transportation equipment 35,601
Machinery and equipment 822,252
Leasehold improvements 1,007,343
Assets held under capitalized leases 264,374
5,457,490
Less accumulated depreciation and amortization 3,703,366

$1,754,124

Depreciation and amortization expense relating to fixed assets was
$321,929 and $358,673 for the the years ended December 31, 1995 and 1994,
respectively.

NOTE G - NOTES PAYABLE

1. Revolving Credit Agreement

On September 1, 1995, the Company entered into a new financing agreement
with its bank, expiring August 31, 1997. The agreement, as amended,
provides for maximum outstanding borrowings of $6,000,000. Maximum
borrowings are based upon the sum of eligible inventory (the lesser of
50% of inventory or $4,500,000) and 80% of eligible accounts
receivable. The credit agreement bears interest at the bank's prime
rate. Substantially all of the Company's assets are pledged to the
bank as collateral, and the Company is prohibited from granting a
security interest to any party other than the bank, which could limit
the Company's ability to obtain debt financing to implement its
proposed expansion. In addition, the Company's.

Aid Auto Stores, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

December 31, 1995 and 1994

NOTE G (continued)

agreement with the bank limits or prohibits the Company, subject to
certain exceptions, from merging or consolidating with another
corporation or selling all or substantially all of its assets. The
agreement, as amended, contains certain financial covenants including
minimum tangible net worth and working capital requirements. The
Company did not comply with one of its financial covenants at
December 31, 1995 and, accordingly, received a waiver with
respect to such covenant from its bank. There can be no assurance
that the Company will not require additional waivers in the future
or, if required, that its bank will grant them.

2. Long-term Debt

Term notes payable at December 31, 1995 consisted of the following:

Promissory note in connection with
acquisition of Nuby's (ii) $2,000,000
Subordinated promissory notes - officer,
in connection with acquisition of Nuby's (iii) 1,507,000
10% note payable in connection with the
acquisition of White Plains Aid, Inc. (i) 236,000
Other 47,000

3,790,000
Less current maturities 2,208,000

$1,582,000

(i) This note requires interest only payments during the first year.
Monthly principal payments commenced in May 1993 and the note
matures in April 2001.

Aid Auto Stores, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

December 31, 1995 and 1994

NOTE G (continued)

(ii) The note bears interest at 5-1/2% per annum and was fully paid
on January 2, 1996 (see Note D).

(iii) The notes bear interest at one percentage point below the prime
rate in the first year and at the prime rate thereafter.
Monthly principal payments commence February 1996 and the notes
mature January 2006. The notes are subordinated to the bank
loan (see Note D).

Aggregate maturities of long-term debt as of December 31, 1995 are as
follows:

1996 $2,208,000
1997 205,000
1998 198,000
1999 199,000
2000 207,000
Thereafter 773,000
$3,790,000

3. Capitalized Lease Obligation

The Company is the lessee of computer and telephone equipment with
leases expiring in various years through 1998. The assets and
liabilities under capital leases are recorded at the lower of the
present value of the minimum lease payments or the fair market value
of the asset. The assets are depreciated over their estimated useful
lives. Depreciation of assets under capital leases for each of the
years ended December 31, 1995 and 1994 was $7,980 and $18,610,
respectively.

Minimum future lease payments under capital leases as of December 31,
1995 are as follows:

1996 $30,000
1997 20,000
1998 3,000
Total minimum lease payments 53,000
Less amount representing interest 6,000
$47,000

Aid Auto Stores, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

December 31, 1995 and 1994

NOTE G (continued)

The interest rates on the capitalized leases range from 9% to 15% and
were based upon the lower of the Company's incremental borrowing rate
at the inception of each lease or the lessors' implicit rate of
return. The capital leases provide for a bargain purchase option at
the end of each lease.

NOTE H - NOTE PAYABLE - OFFICER

At December 31, 1994, the Company was indebted to the President of the
Company in the aggregate amounts of $3,051,951. On February 1, 1995, the
Company signed a promissory note for $2,500,000, the remaining outstanding
balance. This note bears interest, payable monthly, at 7% per annum
through January 31, 1996, and thereafter the interest rate shall be equal
to the interest rate charged by the Company's bank with principal payable
in quarterly installments of $156,250, commencing May 1, 1996 through
February 1, 2000. The note provides for immediate payment upon a change in
a majority of the continuing directors of the Company, as defined, or a
demand by the Company's bank for payment in full of the outstanding bank
indebtedness. In connection with the bank's waiver of noncompliance with
the financial covenant pursuant to the Company's revolving credit
agreement, $425,000 of the promissory note is subordinated to the bank loan.

Aggregate maturities of note payable - officer as of December 31, 1995
are as follows:

1996 $ 468,750
1997 625,000
1998 625,000
1999 625,000
2000 156,250
$2,500,000

Aid Auto Stores, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

December 31, 1995 and 1994

NOTE I - INCOME TAXES

The income tax expense (benefit) is comprised of the following:

Year ended December 31,
1995 1994

Current
Federal $ 130,000
State and local $ 38,000 82,000
Deferred - Federal,
state and local 126,000 (140,000)
$164,000 $ 72,000

The components of the Company's deferred tax assets, pursuant to SFAS
No. 109, are summarized as follows:

1995 1994

Depreciation $235,000 $206,000
Allowance for doubtful accounts 321,000 178,000
Deferred occupancy costs 63,000 129,000
Inventory 68,000 56,000
Other 73,000
760,000 569,000
Valuation allowance 317,000
$443,000 $569,000

The valuation allowance pertains to uncertainties with respect to the
Company's ability to generate sufficient future taxable income.

Aid Auto Stores, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

December 31, 1995 and 1994

NOTE I (continued)

The Company's effective income tax rate differs from the Federal
statutory income tax rate as a result of the following:

Year ended December 31,
1995 1994

Federal statutory rate (34.0)% 34.0%
Loss for which no tax benefit was provided 34.0
State and local income taxes, net of
Federal income tax benefit 4.6 36.0
Change in valuation allowance 20.2
Other 5.6 8.5
30.4 % 78.5%

NOTE J - COMPANY-OWNED OUTLETS

The following is a summary of revenue (excluding initial franchise fee
revenue) and costs by Company-owned outlets:

Year ended December 31,
1995 1994

Revenue $ 3,969,815 $ 2,613,685
Costs and expenses (4,182,490) (2,797,271)
$ (212,675) $ (183,586)

NOTE K - SIGNIFICANT CUSTOMERS AND SUPPLIERS

Most of the Company's business activity is primarily with customers
located within the New York Metropolitan area. For the years ended
December 31, 1995 and 1994, no single customer or group of customers
accounted for sales in excess of 10% of the total sales of the Company.

Aid Auto Stores, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

December 31, 1995 and 1994

NOTE K (continued)

For the years ended December 31, 1995 and 1994, the Company did not
purchase more than 10% of its inventory purchases from any single vendor.

NOTE L - RELATED PARTY TRANSACTIONS

Approximately $69,000 of the Company's printed advertising space is
purchased by an affiliated entity which is owned by the majority
shareholder of the Company. This affiliate purchases advertising space on
the Company's behalf, at discounted rates, and then invoices the Company
at such rates, without any further charge.

One of the Company-owned outlets pays rent to an affiliated company which
is also owned by the majority shareholder of the Company. This affiliate
holds the lease and remits the rent to the ultimate owner of the property.
Rent expense paid to this affiliated company was $70,000 for the years
ended December 31, 1995 and 1994, respectively.

NOTE M - COMMITMENTS AND CONTINGENCIES

1. The Company is obligated under operating lease agreements for the
rental of certain office, warehouse and store facilities and other
equipment which expire at various dates through September, 2008.

Aid Auto Stores, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

December 31, 1995 and 1994

NOTE M (continued)

Future minimum base annual lease payments for such operating leases are
as follows:

Year ending December 31,
1996 $ 1,716,000
1997 1,772,000
1998 1,664,000
1999 1,495,000
2000 1,435,000
Thereafter 5,220,000
$13,302,000

Rental expense including real estate taxes for the years ended
December 31, 1995 and 1994 aggregated approximately $615,469 and
$601,231, respectively.

2. The president of the Company entered into a three-year employment
agreement effective April 1995. The agreement provides for annual
base compensation of $200,000, a cost of living increase in the
second and third years, and a bonus or salary increase in the third
year at the discretion of the Board of Directors. In the event of a
takeover or other acquisition, change in ownership of the Company, the
President shall receive a severance payment equal to six months of his
base salary.

In connection with the acquisition of Nuby's, the Company entered into
a ten-year employment agreement with the sole shareholder of Nuby's.
The agreement provided for annual base compensation of $100,000. The
agreement requires that the sole shareholder of Nuby's shall not
compete or engage in a business competitive with the Company through
December 15, 1997 or two years following termination of employment.

NOTE N - STOCKHOLDERS' EQUITY

On February 9, 1995, the Company's Board of Directors declared a
22,000-for-1 stock split, effective February 14, 1995. The consolidated
financial statements have been retroactively restated for all periods
presented to give effect to the stock split.

Aid Auto Stores, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

December 31, 1995 and 1994

NOTE N (continued)

Effective February 14, 1995, the Company amended its Certificate of
Incorporation to: (a) increase the authorized shares of common stock to
15,000,000 and (b) authorize 2,000,000 shares of preferred stock at $.001
par value, the terms of which may be fixed by the Board of Directors at the
time of issuance of such shares.

On April 6, 1995, the Company's then sole shareholder contributed back to
the Company 200,000 of his shares of common stock. The consolidated
financial statements have been retroactively restated for all periods
presented to give effect to this contribution.

In April 1995, the Company completed a public offering of 1,800,000 shares
of common stock at $5 per share and warrants to purchase 1,800,000 shares
of common stock at $.10 per warrant. Also in April 1995, pursuant to the
underwriters' overallotment option, the Company sold an additional 270,000
warrants to purchase 270,000 shares of common stock. The net proceeds
received by the Company after deducting applicable issuance costs and
expenses aggregated $7,296,873. The net proceeds are being used for the
opening of superstores, the repayment of bank indebtedness, marketing and
advertising and for working capital purposes.

Each warrant is exercisable for a period of two and one-half years
commencing October 10, 1995, each to purchase one share of common stock at
a price of $4.00 per share, subject to the antidilution provisions of the
warrants.

In December 1995, the Company issued 157,596 shares of its common stock,
valued at $750,000 on date of issuance, in connection with its acquisition
of substantially all of the assets and operating businesses of Nuby's.

NOTE O - STOCK OPTION PLAN

In February 1995, the Company adopted the 1995 Stock Option Plan (the
"Plan"). The Plan provides for the granting of both: (i) incentive stock
options to employees and/or officers of the Company and (ii) nonincentive
stock options to consultants, directors, advisors, employees or officers
of the Company. The total number of shares which may be sold pursuant to
options granted

Aid Auto Stores, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

December 31, 1995 and 1994

NOTE O (continued)

under the Plan is 400,000. Options granted under the Plan may not be
granted at a price less than the fair market value of the common stock on
the date of the grant. Options granted under the Plan will expire not
more than ten years from the date of grant.

In January 1995, the Company granted five-year incentive stock options to
purchase an aggregate of 156,000 shares of common stock at exercise prices
ranging from of $4.00 to $4.25 per share, of which 25,000 options, with an
exercise price of $4.00 per share, were subsequently cancelled in 1995.
In addition, nonstatutory stock options to purchase 7,500 shares at $5 per
share have been granted to each of three outside directors. These stock
options have not been included in the income per common share calculations
since their inclusion would be antidilutive.

AID AUTO STORES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET

ASSETS

March 31, 1996 Dec. 31, 1995
(unaudited) (audited)

CURRENT ASSETS:
Cash and cash equivalents $2,443,507 $4,766,893
Accounts receivable-trade,
net of allowances for
doubtful accounts of $645,000 2,415,291 2,991,012
Inventories 11,289,374 9,372,480
Prepaid expenses and other
current assets 2,443,405 1,400,703
Notes receivable, net of allowances
for doubtfulaccounts of $190,000 230,656 245,014
Deferred income taxes 268,000 268,000

Total current assets 19,090,233 19,044,102

FIXED ASSETS, NET 1,756,715 1,754,124

COSTS IN EXCESS OF NET ASSETS ACQUIRED, NET 3,894,320 3,929,376

OTHER ASSETS:

Intangible assets 25,420 36,863
Notes receivable - net of current portion 218,824 218,824
Deferred income taxes 175,000 175,000
Security deposits & other assets 145,399 143,433

TOTAL ASSETS: $25,305,911 $ 25,301,722

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
Note payable - bank $ 5,749,898 $ 5,011,200
Accounts payable 5,755,411 4,315,842
Accrued expenses 310,616 487,386
Current portion of long-term debt 75,404 2,208,225
Loans payable - stockholder 619,490 468,750
Income tax 6,620 -

Total current liabilities 12,517,439 12,491,403

LONG-TERM DEBT, NET OF CURRENT PORTION 1,529,533 1,582,373
DEFERRED OCCUPANCY COSTS 147,385 157,995
NOTE PAYABLE - STOCKHOLDER 2,031,250 2,031,250

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY
Preferred stock, $.001 par value;
authorized 2,000,000 shares;
none issued - -
Common stock, $.001 par value;
authorized, 15,000,000 shares;
3,957,596 shares issued and
outstanding 3,958 3,958
Additional paid-in capital 9,006,809 9,006,809
Retained earnings 69,537 27,934
9,080,304 9,038,701

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $25,305,911 $25,301,722

See Notes to Consolidated Condensed Financial Statements

AID AUTO STORES, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)

Three Months Ended March 31 1996 1995
Revenues

Net Sales $6,521,693 $4,016,069
Franchise Fees 52,344 71,200

6,574,037 4,087,269

Costs and expenses

Cost of sales 4,010,476 2,848,606
Selling and shipping 1,686,688 718,261
General and administrative 682,057 574,865

$6,379,221 $4,141,732

Income (Loss) from Operations 194,816 (54,463)

Interest Expense (196,267) (194,092)

Interest and other income 51,669 33,842

Income (Loss) from operations before
income taxes 50,218 (214,713)

Provision for income taxes 8,615 40,000

NET INCOME (LOSS) $ 41,603 $ (254,713)

Income (Loss) per common share
Income (Loss) from operations before
income taxes $.01 $(.11)

Net Income (Loss) per common share $.01 $(.13)

Weighted average common shares outstanding 3,957,596 2,000,000

See Notes to Consolidated Condensed Financial Statements

AID AUTO STORES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)

Three Months Ended March 31 1996 1995

Cash flows from operating activities
Net income (loss) $41,603 $(254,713)
Adjustments to reconcile net income
(loss) to net cash used in operating
activities
Depreciation and amortization 82,993 100,042
Provision for losses on accounts
receivable. 33,000 33,000
Deferred occupancy costs (10,610) 13,060
(Increase) decrease in operating assets
Accounts Receivable 542,721 105,933
Notes Receivable 14,358 48,242
Inventories (1,916,894) (1,144,354)
Prepaid expenses & other
current assets (996,204) (401,260)
Security deposits (1,965) 200
Deferred income taxes - 40,000
Increase (decrease) in operating
liabilities
Accounts payable 1,439,569 1,094,219
Accrued expenses (133,366) 38,625
Income taxes payable 6,620 14,932

Net cash used in operating activities (898,175) (312,074)

Cash flows from investing activities
Capital expenditures $ (85,584) $ (10,647)

Net cash used in investing activities $ (85,584) $ (10,647)

Cash flows from financing activities
Net borrowings under revolving credit line 738,698 677,453
Principal payments of long-term debt (2,031,485) (10,310)

Repayment of officers' loans (46,840) (551,951)

Net cash (used in) provided by
financing activities (1,339,627) 115,192
Net decrease in cash and
cash equivalents (2,323,386) (207,529)

Cash and cash equivalents, at beginning of year 4,766,893 359,584
Cash and cash equivalents, at end of year $ 2,443,507 $ 152,055

Supplemental disclosures of cash flow information:
Cash paid during the year for
Interest 186,048 134,839
Income Taxes 68,253 -

AID AUTO STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)

A. CONSOLIDATED FINANCIAL STATEMENTS:

The consolidated balance sheet as of March 31, 1996 and the consolidated
statements of operations and cash flows for the three month period ended
March 31, 1996 have been prepared by the Company without audit. In the
opinion of management, all adjustments (which included only normal
recurring adjustments) necessary to present fairly the financial position
at March 31, 1996, and the results of operations and cash flows for the
period presented, have been made. Results of operations for the three
month period ended March 31, 1996 are not necessarily indicative of the
operating results to be expected for the full year.

For information concerning the Company's significant accounting policies,
reference is made to the Company's audited financial statements for the
year ended December 31, 1995 contained elsewhere in this Registration
Statement. While the Company believes that the disclosures presented are
adequate to make the information contained herein not misleading, it is
suggested that these statements be read in conjunction with the
consolidated financial statements and notes included in the Form 10-K.

B. INVENTORIES

Inventories consist primarily of merchandise purchased for resale.

AID AUTO STORES, INC.

Management's Discussion and Analysis of
Financial Condition and Results of Operations
For the Three Months Ended March 31, 1996 and 1995

General:

Aid Auto Stores, Inc. (the "Company"), formed in 1953, is a franchisor,
retailer and wholesaler of automotive parts and accessories. As of March
31, 1996, the Company supplied products to 60 Aid Auto Stores, including
43 franchised stores and 17 Company-owned stores, and, through its wholly-
owned subsidiary, Ames Automotive Warehouse, Inc. ("Ames"), to hundreds of
non-automotive chain stores and independent jobbers and installers in New
York, New Jersey and Connecticut. During the periods covered under
"Results of Operations" below, the majority of Aid Auto Stores were owned
by franchisees of the Company. The Aid Auto stores sell an extensive
variety of name-brand automotive parts, accessories and chemicals, as well
as an assortment of products marketed under the "Aid" brand, and also
under the "Perfect Choice"[TM] brand to both do-it-yourself and commercial
customers. In 1994, in anticipation of commencing its Company-owned
mini-warehouse Superstore growth strategy, the Company curtailed the
granting of new franchises, so as to preserve favorable locations for
Company owned Superstores. In April, 1995, the Company consummated its
initial public offering, the net proceeds of which were approximately
$7,300,000 (the "Initial Public Offering"). As described below, as of
March 31, 1996, the Company had opened three new Superstores and had
acquired, in December 1995, ten franchised Aid Auto Stores located in Long
Island, New York, of which it currently intends to convert nine to
Superstores. The Company currently anticipates that the opening of up to
48 to 60 Superstores in the five-year period following the April, 1995
Initial Public Offering. The number of stores to be opened during this
period is subject to substantial variation depending upon, among other
factors, the availability of adequate financing to fund the cost of adding
the additional stores, the level of success of the initial Superstores, the
availability of suitable store sites or acquisition candidates, and the
timely development and construction of new stores. The anticipated
favorable financial performance of the Company is tied, to a large extent,
to the transition of the Company to the Superstore program and the
strong future potential of that program. The Company's operating expenses
are expected to increase significantly in connection with the Superstore
growth program and, accordingly, the Company's future profitability will
depend upon corresponding increases in revenue from Superstore operations,
of which there can be no assurance.

On July 22, 1995, the Company held the Grand Opening of its first new
Company-owned Superstore. The store is located in Long Island City, in
the New York City Borough of Queens. This Superstore has had average
daily sales far in excess of that generated by the Company's
non-Superstores. In March, 1996, the Company opened Superstore locations
on a main thoroughfare in Brooklyn, New York and in a major shopping mall
in the New York City Borough of Staten Island.

The Company has also sought to grow its operations by means of acquiring
other companies, including Aid franchisees, having parts and accessories
retail stores. On December 15, 1995, the Company acquired ten franchised
Aid Auto stores located in Long Island, New York. Following the
acquisition, the Company commenced converting up to nine of the ten stores
into Aid Auto Superstores.

Income from operations for the first quarter of 1996 compared to the loss
from operations in the first quarter of 1995 is primarily due to the
increased volume of high profit margin retail sales as a result of the
increased number of Company-owned stores. These increased retail sales
more than offset the reduction in sales to franchises which is
attributable to the termination of 19 franchises over the last
twenty-seven months due to their failure to meet the standards set for
franchisees and for other reasons. Except for two additional franchises
granted to existing franchisees, the Company has not granted any new
franchises over the last twenty-seven months, consistent with its
Superstore growth strategy.

Results of Operations:

Three months ended March 31, 1996 compared to three months ended
March 31, 1995.

The Company's operating revenues are primarily derived from net sales
consisting of both retail and wholesale sales. Retail sales are made from
the Company-owned Aid Auto Stores of which 17 existed at March 31, 1996
and four at March 31, 1995. Wholesale sales include sales to the
Company's franchised Aid Auto Stores, of which 43 existed at March 31,
1996 and 54 at March 31, 1995, and through Ames, to hundreds of other
customers. Revenues increased by $2,487,000 (or 60.8%) from $4,087,000 for
the three months ended March 31, 1995 to $6,574,000 for the three months
ended March 31, 1996. The increase in revenues in 1996 was due primarily
to the increase of $2,847,000 in sales from Company-owned stores from
$555,000 for the three months ended March 31, 1995 to $3,402,000 for the
three months ended March 31, 1996. Subsequent to the first quarter of
1995, the Company acquired ten franchised Aid Auto Stores located in
Long Island, New York, and opened three new Superstores. In addition, the
seasonal cold and wet winter of 1995-1996 resulted in the increase in the
sale of certain items (e.g. anti-freeze and other winter chemicals) and an
increased need for other winter maintenance items (especially when
compared to the exceptionally mild, auto-friendly winter weather in
1994-1995 which resulted in a decrease in the sale of winter items).
Revenue increases were offset in part by a decrease in sales to
franchisees, reflecting the Company's decision consistent with its
Superstore growth strategy to generally not grant new franchises (which
results in a loss of sales to new franchisees). Furthermore, seven
franchised stores were terminated by the Company in 1995, and an
additional five franchised stores were terminated in the first quarter of
1996. In addition, there was a slight decrease in the Ames sales in the
first quarter of 1996 as compared to the first quarter of 1995.

Cost of sales increased by $1,161,000 (40.8%) from $2,849,000 for the months
ended March 31, 1995 to $4,010,000 for the first three months of 1996. The
increase in cost of sales in absolute dollars was attributable to the
increased volume of sales in 1996. As a percentage of net sales, cost of
sales declined from 70.9% for the three months ended March 31, 1995 to
61.5% for the comparable period in 1996, reflecting the significantly
higher margins on retail sales from the new Superstores (as compared to
lower margin on wholesale sales) and the additional number of
Company-owned stores.

Selling and shipping expenses increased by $969,000 (or 135.0%) from
$718,000 (17.9% of net sales) for the three months ended March 31, 1995 to
$1,687,000 (25.9% of net sales) for the three months ended March 31, 1996.
The increase as an absolute amount and as a percentage of net sales for the
three month period was due primarily to a substantial increase of selling
expenses, reflecting a greater company infrastructure and a significant
increase in the Company's retail operations. Selling expenses are higher
for a retail operation than for a wholesale operation, reflecting the
nature of these operations. As a result of the Company's strong efforts
to control costs, the shipping expense dollars remained essentially
constant despite the large increase in sales volume.

General and administrative expenses increased by $107,000 (or 18.6%), from
$575,000 (14.3% of net sales) for the three months ended March 31, 1995 to
$682,000 (10.5% of net sales) for the three months ended March 31, 1996.
The increase in absolute dollars was due to the additional infrastructure
needed in connection with the increased volume of business from the
additional Company stores. The significant decrease as a percentage of
sales for the first three months of 1996 was due to the increase in sales
volume as well as the Company's concentration on controlling costs.

Interest expense increased, $2,000, from $194,000 for the first quarter
ended March 31, 1995 to $196,000 for the first quarter ended March 31,
1996. This nominal increase was due to a reduction in the interest rate
charged by the Company's Bank during the first quarter of 1996 as compared
to the same period in the prior year. The lower interest rate offset the
effect of the increase in the average outstanding bank debt balance during
the first quarter of 1996 as compared to the first quarter of 1995.

The income from operations for the first three months of 1996 was $195,000
compared to a loss from operations of $54,000 for the three months ended
March 31, 1995 as a result of the above factors.

Liquidity and Capital Resources:

The Company had working capital of $6,573,000 at March 31, 1996, as compared
to $6,553,000 at December 31, 1995, essentially maintaining its working
capital at the same level at the beginning and end of the first quarter.
Through March 31, 1996, the Company had financed its capital requirements
predominantly through a bank loan and credit facility, currently with
Israel Discount Bank of New York (the "Bank"), through loans from one of
its officers, and through the Company's Initial Public Offering, the net
proceeds of which were approximately $7,300,000.

Net cash used in operating activities was $312,000 for the first three
months of 1995 and $898,000 for the first three months of 1996. The
increase in 1996 was attributable primarily to increases in inventories as
a result of the increase in the number of retail stores, as well as an
increase in prepaid expenses and other current assets compared to the
prior comparable period, offset in part by a decrease in accounts
receivable, an increase in accounts payable, and the generation of net
income in the first quarter of 1996 as compared to a loss in the same
period in the prior year. Net cash utilized in investing activities was
$11,000 and $86,000 in the first three months of 1995 and 1996,
respectively, the increase reflecting increased capital expenditures in
connection with the Superstore expansion program. Net cash of $115,000
was provided by financing activities in the first three months of 1995
compared to $1,340,000 used in financing activities in the first three
months of 1996. The shift was primarily attributable to the use of a
short term note in connection with the acquisition of the ten store
locations.

Effective September 1, 1995, the Company entered into a loan agreement with
the Bank for a two year revolving credit line of up to an aggregate of
$6,000,000 with an interest rate equal to the prime rate. As of March 31,
1996, $5,749,898 was outstanding under the line of credit. In connection
with the entry into the loan agreement, the Bank released the personal
guarantee of Philip L. Stephen, the Company's Chairman, Chief Executive
Officer, President, and majority shareholder, and also released the
subordination of his loan to the Company to the loan by the Bank. In
March, 1996, the subordination was reinstated for $425,000, which is less
than the full amount of the loan.

Substantially all of the Company's assets are pledged to the Bank as
collateral, and the Company is prohibited from granting a security
interest to any party other than the Bank, which could limit the Company's
ability to obtain debt financing to implement its proposed expansion. In
addition, the Company's agreement with the Bank limits or prohibits the
Company, subject to certain exceptions, from merging or consolidating with
another corporation or selling all or substantially all of its assets. As
of March 31, 1996, the Company was in compliance with all of the covenants
contained in the loan agreement with the Bank. In the event that the
Company is unable to make payment on its line of credit when due on August
31, 1997, the Bank could foreclose on the collateral, which would have a
material adverse effect on the Company.

At March 31, 1996, the Company was indebted to Mr. Stephen in the aggregate
amount of $2,500,000. The $2,500,000 loan is evidenced by two promissory
notes. The notes bear interest at the interest rate charged by the
Company's bank, payable monthly, with principal payable in quarterly
installments commencing May 1, 1996 through February 1, 2000. The note
provides for immediate payment thereof upon, among other things, a change
in a majority of the continuing directors of the Company (as defined in
the note) or a demand by the Bank of payment in full of outstanding Bank
indebtedness.

The Company's accounts receivable, less allowances for doubtful accounts, at
March 31, 1996, were $2,415,000, as compared to $2,991,000 at December 31,
1995. The decrease was due to a decrease in the amount of wholesale sales
on credit terms in 1996 as compared to 1995 combined with the increased
collection efforts. At March 31, 1996, the Company's allowance for
doubtful accounts was $645,000 which the Company believes is currently
adequate for the size and nature of its receivables. At March 31, 1996,
notes receivable, less allowance for doubtful accounts, were $449,000, as
compared to $464,000 at December 31, 1995. The decrease in notes
receivable primarily reflects collections on the promissory notes.
Currently, eight franchisees are obligated under notes. Their inability
to pay for purchases under standard payment terms is due primarily to a
downturn in their business during the recessionary economy of 1991 to 1993
(in some cases exacerbated by road construction making access to the
stores difficult.) It is the Company's policy to convert accounts
receivable to a note when a franchisee has demonstrated an inability to
pay its account on a timely basis. Delays in collection or
uncollectability of accounts and notes receivable could have an adverse
effect on the Company's liquidity and working capital position and could
require the Company to increase its allowance for doubtful accounts. Bad
debt expense remained constant at $33,000 in the first quarter of 1995
and 1996.

At March 31, 1996, the Company had deferred tax assets of $443,000. The
Company, after considering its previous pattern of profitability and its
anticipated future taxable income, believes that it is more likely than
not that the deferred tax assets will be realized. In this respect, the
Company estimates that $1,100,000 of future taxable income will be
required to realize the deferred tax assets, with the majority of such
assets anticipated to be recovered over the next five years.

As of the date hereof, other than in connection with the implementation of
the Superstore growth program, the Company has no material commitments for
capital expenditures. In connection with the acquisition of the ten
stores described above, the Company was obligated to expend $2,000,000 in
cash on January 2, 1996 in repayment of short term notes. In addition as
part of the purchase price of the acquisition, at the time of the
acquisition, the Company assumed $1,000,000 of trade payables, as well as
issued 157,596 shares of common stock of the Company and a promissory note
in the amount of $1,507,396.

The Company has used a substantial portion of the net proceeds of the
Initial Public Offering to implement its proposed Superstore growth
program. The Company anticipates, based on currently proposed plans and
assumptions relating to its operations (including the costs associated
with, and the timetable for, its proposed expansion), the Company's
working capital and current loan facility, together with projected cash
flow from operations, will be sufficient to satisfy its contemplated
cash requirements for at least twelve months (including the contemplated
conversion of nine of the stores acquired in the acquisition into
Superstores, and the opening of at least three Superstores during that
period). In the event that the Company's cash flow proves to be
insufficient (due to unanticipated expenses, difficulties, problems or
otherwise), the Company may be required to seek additional financing for
the initial phase of its Superstore growth program or curtail such
expansion activities. The Company will need to seek additional debt or
equity financing, as the Company does not anticipate that its current
resources and cash flow from operations are likely to be sufficient to
fund the continuing cost of its growth program to open 48 to 60
Superstores. To the extent that the Company seeks financing through the
issuance of equity securities, any such issuance of equity securities
would result in dilution to the interests of the Company's stockholders.
Additionally, to the extent that the Company incurs indebtedness to
fund increased levels of accounts receivable or to finance the acquisition
of capital equipment or issues debt securities to fund the Superstore
growth program, the Company will be subject to risks associated with
incurring substantial indebtedness, including the risks that interest
rates may fluctuate and cash flow may be insufficient to pay principal and
interest on any such indebtedness. Other than the Company's existing line
of credit with the Bank, the Company has no current arrangements with
respect to, or sources of, additional financing and it is not anticipated
that the existing majority stockholder will provide any portion of the
Company's future financing requirements or further personal guarantees.
There can be no assurance that additional financing will be available to
the Company on acceptable terms, or at all.

Seasonality:

The Company's business is seasonal to some extent primarily as a result
of the impact of weather conditions on store sales. Store sales and
profits have historically been higher in the second and third quarters
(April through September) of each year than in the first and fourth
quarters, for which the Company generally achieves only nominal profits
or incurs net losses. Weather extremes tend to enhance sales by causing
a higher incidence of parts failure and increasing sales of seasonal
products. However, extremely severe winter weather or rainy conditions
tend to reduce sales by causing deferral of elective maintenance.

Impact of Inflation:

Inflation has not had a material effect on the Company's operations.

AID AUTO STORES, INC. AND SUBSIDIARIES
Notes to Pro Forma Consolidated Condensed Statements of Operations (unaudited)
Fiscal Year Ended December 31, 1995

INTRODUCTION

On December 15, 1995, Aid Auto Stores, Inc. ("Aid") consummated the
acquisition of substantially all of the assets and operating businesses of
Nuby's Auto, Inc. and Affiliates ("Nuby's") pursuant to an Asset Purchase
Agreement (the "Agreement") dated as of November 9, 1995. The transaction
was accounted for by the purchase method and, accordingly, the purchase price
was allocated to assets acquired and liabilities assumed based upon their
fair market value as of the date of acquisition.

The pro forma consolidated condensed statement of operations for the year ended
December 31, 1995 is presented as if the acquisition occurred on January 1,
1995.

The pro forma consolidated condensed financial statement may not be
indicative of the combined results of earnings or combined financial position
that actually would have been achieved if the acquisition had been in effect
as of the date and for the period indicated, or which may be obtained in the
future. The pro forma consolidated condensed financial statement should be
read in conjunction with the notes thereto.

1. Sales/Costs of Goods Sold

The pro forma adjustment to cost of goods sold is comprised of the following:

Elimination of purchases between Aid and Nuby's (a) $ 1,510,733
Elimination of redundant payroll costs (b) $ 72,695
$ 1,583,428

(a) This amount is also the pro forma adjustment to sales.

(b) Subsequent to the acquisition, Aid eliminated certain redundant
positions in the combined operations. This adjustment reflects the
elimination of the payroll and benefit costs of the position eliminated.

2. Selling, General and Administrative Expenses

The pro forma adjustment to selling, general and administrative expenses is
comprised of the following:

Elimination of redundant payroll costs (a) $ 326,316
Redundant plant closing costs (b) $ 303,507
Depreciation adjustment for the fair value of
property, plant and equipment $ 8,165
$ 637,988

(a) Subsequent to the acquisition, Aid eliminated certain redundant
positions in the combined operations. This adjustment reflects the
elimination of the payroll and benefit costs of the positions eliminated.

(b) In connection with the acquisition, Aid eliminated certain redundant
costs associated with the distribution center of Nuby's. The amount
reflects the elimination of those costs. These costs include rent
and utilities.

3. Amortization of the Excess of Cost Over Fair Value of Net Assets Acquired

The pro forma adjustment to the amortization of the excess of cost over fair
value of net assets acquired is comprised of the following:

Amortization Expense (a) $ 206,000

(a) The excess of cost over fair value of net assets acquired is being
amortized over the estimated life of 15 years. The amount of excess of
cost over fair value of net assets acquired was calculated as follows:

Asset Purchase Price (excluding inventory) $ 3,500,000
Acquisition Costs $ 123,000
Fair value of net assets acquired $ (532,000)
$ 3,091,000

The Asset Purchase Price (excluding inventory) was paid as follows:
$2,000,000 in the form of a short term note with principal and interest at
the rate of 5 1/2% per annum payable on January 2, 1996, $750,000 in the form
of a ten year note (the "Note") and $750,000 in restricted common stock of
Aid. The purchase price for inventory was $757,000 (net of $1,000,000 of
assumed trade payables relating to such inventory). The purchase price of
the inventory, $757,000, was paid by increasing the Note. The Note
($1,507,000) is payable in 120 equal monthly installments of principal plus
accrued interest. The Note shall bear interest at one percentage point below
the prime rate in the first year and at the prime rate thereafter.

4. Interest Expense

The pro forma adjustments to interest expense is comprised of the following:

Interest on the short term note $ 110,000
Interest on the Note $ 109,258
$ 219,258

5. Income Taxes

The pro forma adjustment to the income taxes was not considered material to
the pro forma consolidated condensed statement of operations for the year
ended December 31, 1995.

6. Common Shares Outstanding

The weighted common shares outstanding is comprised of the following:

Shares held by Aid shareholders $ 3,262,898
Shares issued in connection with acquisition $ 157,596
$ 3,420,494

7. The consolidated condensed financial information of Nuby's was primarily
derived from Nuby's September 30, 1995 audited financial statements. For the
period October 1, 1995 through December 15, 1995 ("Interim Period"), the
consolidated condensed financial information of Nuby's was determined using
actual revenues for such period and cost of sales were derived using a gross
profit percentage. In addition, selling, general and administrative expenses
for the Interim Period were determined using the same percentage to revenues
as of the September 30, 1995 audited financial statements of Nuby's. The
financial information of Nuby's for the Interim Period was not completely
avaialable.

AID AUTO STORES, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
Fiscal year ended December 31, 1995

[Enlarge/Download Table]

Aid Auto
Stores, Nuby's Auto Inc.
Inc. and Affiliates Combined Adjustments ProForma

20,263,833 30,330,212
Revenue 10,066,379 (1,510,733) 28,819,479

Cost of Sales 13,594,260 5,987,653 19,581,913 (1,583,428) 17,998,485
Selling,
general and
administrative 6,888,280 3,901,105 10,789,385 (738,869) 10,050,516
Amortization
of the excess
of cost over
the fair value
of net assets
acquired 206,000 206,000

20,482,540 9,888,758 30,371,298 28,255,000

Loss from
operations (218,707) (177,621) (41,086) 564,478
Interest
Expense (705,244) (27,200) (732,444) (219,258) (951,702)
Interest and
other income 384,070 384,070 384,070

Loss before
income taxes (539,881) (150,421) (389,460) 3,154

Provision for
income taxes 164,000 164,000 164,000

NET LOSS (703,881) (133,375) (553,460) (167,154)

Net loss per
common share (0.05)

Weighted average
common shares
outstanding 3,420,494

No dealer, salesperson, or other person has
been authorized in connection with this offering to give
any information or to make any representations other
than those contained in this Prospectus. This
Prospectus does not constitute an offer or a solicitation
in any jurisdiction to anyone to whom it is unlawful to
make such offer or solicitation. Neither the delivery of
this Prospectus, nor any sale made hereunder shall,
under any circumstances, create an implication that
there has been no change in the circumstances or the
facts herein set forth since the date hereof.

AID AUTO STORES, INC.

___________________________

TABLE OF CONTENTS
Page
Prospectus Summary. . . . . . . . . . . . . . . . . . . . . . . 3
Risk Factors. . . . . . . . . . . . . . . . . . . . . . . . . . 7
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . 12
Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . 14
Dilution. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Market for Securities and Related
Stockholder Matters . . . . . . . . . . . . . . . . . . . . . 16
Selected Financial Data . . . . . . . . . . . . . . . . . . . . 17
Management's Discussion and Analysis of
Financial Condition and Results of
Operations. . . . . . . . . . . . . . . . . . . . . . . . . . 18
Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Management. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Certain Transactions. . . . . . . . . . . . . . . . . . . . . . 38
Principal and Selling Securityholders . . . . . . . . . . . . . 39
Description of Securities . . . . . . . . . . . . . . . . . . . 40
Shares Eligible for Future Sale . . . . . . . . . . . . . . . . 42
Plan of Distribution. . . . . . . . . . . . . . . . . . . . . . 43
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . 44
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Additional Information. . . . . . . . . . . . . . . . . . . . . 44
Index to Financial Statements . . . . . . . . . . . . . . . . . F-1

________________________________________________

2,430,000 shares of Common Stock
and Redeemable Warrants to
Purchase 180,000 shares of
Common Stock

PROSPECTUS

___________________________

, 1996

_________________________________________________

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 24. Indemnification of Director's and Officers.

Under Section 145 of the Delaware General Corporation Law the registrant
may or shall, subject to various exceptions and limitations, indemnify its
directors or officers and may purchase and maintain insurance therefor.

The Company has included in its Certificate of Incorporation pursuant to
Section 102(b)(7) of the Delaware General Corporation Law a provision
eliminating the personal liability of directors to the Company or its
stockholders for damages for breach of fiduciary duty. The principal effect
of this provision in the Company's Certificate of Incorporation is to
eliminate potential monetary damage actions against any director for breach
of his duties as a director except (a) for any breach of the director's duty
of loyalty to the corporation or its stockholders, (b) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing
violation of law, (c) under Section 174 of the Delaware General Corporation
Law, which relates to a willful or negligent violation of Section 160
(regarding the illegal purchase or redemption of stock by a corporation) or
Section 173 (regarding a corporations illegal declaration or payment
of dividends) of the Delaware General Corporation Law, or (d) for any
transaction from which the director for acts or omissions occurring prior to
the date of adoption of this provision. In addition, Section 145 of the
Delaware General Corporation Law empowers a corporation (a) to grant
indemnification to any officer or director where it is determined that he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful and (b) to advance to an officer or director the expenses of
defending claims upon receipt of his undertaking to repay any amount to which
it is later determined he is not entitled. The Company's By-Laws provide
that the Company will indemnify and advance expenses of defense to its
officers and directors substantially to the full extent authorized by the
Delaware General Corporation Law.

The foregoing statement is subject to the detailed provisions of Sections
102 and 145 of the Delaware General Corporation Law.

Item 25. Other Expenses of Issuance and Distribution.

The estimated expenses of the Registrant in connection with the issuance
and distribution of the securities being registered hereby are as follows:

Accounting Fees and Expenses . . . . . . . . . . . . . . . . . $ 7,500
Legal fees and expenses. . . . . . . . . . . . . . . . . . . . 25,000
Blue Sky filing fees and expenses. . . . . . . . . . . . . . . 10,000
Solicitation fee (1) . . . . . . . . . . . . . . . . . . . . . 414,000
Miscellaneous Expenses . . . . . . . . . . . . . . . . . . . . 7,500

Total. . . . . . . . . . . . . . . . . . . . . . . . . $ 464,000

________________________
(1) Represents potential maximum solicitation fee which may be paid to Whale.

Item 26. Recent Sales of Unregistered Securities.

In connection with the December 1995 acquisition of 10 franchised Aid
Auto Stores, the Company paid $750,000 of the Purchase Price to Werner S.
Neuburger in the form of 157,596 shares of restricted Common Stock.

Item 27. Exhibits.

Exhibit
Number Documents Sequentially Numbered
Page Where Located

1.1 Form of Underwriting Agreement.(1) --
3.1 Amended and Restated Articles of
Incorporation of the Company.(1) --
3.2 Bylaws of the Company.(1) --
4.1 Form of Common Stock Certificate.(1) --
4.2 Form of Public Warrant Agreement between
the Company, American Stock Transfer &
Trust Company and Whale Securities Co., L.P.(1) --
4.3 Specimen Form of Public Warrant
Certificate (contained in Exhibit 4.4).(1) --
4.4 Form of Underwriter's Warrant Agreement
(including form of Warrant Certificate) between
the Company and Whale Securities Co., L.P.(1) --
5.1 Opinion of counsel to the Company concerning
the legality of the securities being offered. 81
10.1 Agreement between the Company and Philip L.
Stephen, dated as of March 15, 1995.(1) --
10.2 Forms of Franchise Agreements.(1) --
10.3 Form of Consulting Agreement between the Company
and Whale Securities Co., L.P.(1) --
10.4 Transportation Agreement between the Company
and Ryder Dedicated Logistics, Inc., dated
December 2, 1994.(1) --
10.5 1995 Company Stock Option Plan.(1) --
10.6 Lease Agreement between the Company and
International Cigar Company, dated October 15,
1989(1), as amended by First Amendment of Lease
dated August 1, 1995.(2) --
10.7 Bank Loan Agreement, between the Company and
Israel Discount Bank of New York dated as of
September 1, 1995(3), as amended October 27, 1995
and November 1, 1995. 82
10.8 Agreement between the Company and Local 239
of the International Brotherhood of Teamsters,
dated February 1, 1996. 84
10.9 Promissory Note by the Company in favor of
Philip L. Stephen, dated February 1, 1995.(1) --
10.10 Asset Purchase Agreement, dated November 9, 1995,
among the Company, various sellers, and Werner S.
Neuburger, relating to the agreement of the Company
to acquire 10 franchised stores in Long Island,
New York.(2) --
21.1 List of the Company's subsidiaries. 92
23.1 Consent of Independent Auditors. 93
23.2 Consent of counsel (contained in the opinion
filed as Exhibit 5.1). --
24.1 Power of Attorney.(1) --

_________________

(1) Incorporated by reference to the Company's Registration Statement
on Form SB-2 (No. 33-89190) declared effective by the Commission
on April 10, 1995.

(2) Incorporated by reference to the Company's current Report on Form 8-K
dated November 9, 1995.

(3) Incorporated by reference to the Company's Annual Report on Form 10-K,
for the year ended December 31, 1995.

Item 28. Undertakings.

The undersigned Registrant hereby undertakes: (1) to file, during any
period in which offers or sales are being made, a post-effective amendment to
this Registration Statement to (i) include any prospectus required by Section
10(a)(3) of the Securities Act, (ii) reflect in the prospectus any facts or
events which, individually or together, represent a fundamental change in the
information in the Registration Statement, and (iii) include any material
information with respect to the plan of distribution not previously disclosed
in this Registration Statement or any material change to such information in
this Registration Statement; (2) that, for the purpose of determining any
liability under the Securities Act, each such post-effective amendment shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof; and (3) to remove from
registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering.

The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnifi-
cation against such liabilities (other than payment by the Registrant of
expenses incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by final adjudication of such issue.

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form SB-2 and authorized this
Registration Statement to be signed on its behalf by the undersigned, in the
Town of Hempstead, State of New York, on July 30, 1996.

AID AUTO STORES, INC.

By: /s/ Philip L. Stephen
Philip L. Stephen,
President and Chief Executive Officer
(Principal Executive Officer)

By: /s/ Frank Mangano
Frank Mangano, Chief Financial Officer
(Principal Financial Officer)

In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates stated.

Signature Title Date

/s/ Philip L. Stephen Director July 30, 1996
Philip L. Stephen

/s/ Greg M. Stephen Director July 30, 1996
Greg M. Stephen

/s/ Lewis R. Cowan Director July 30, 1996
Lewis R. Cowan

/s/ Ira Scott Greenspan Director July 30, 1996
Ira Scott Greenspan

/s/ Leonard Genovese Director July 30, 1996
Leonard Genovese

/s/ Werner S. Neuburger Director July 30, 1996
Werner S. Neuburger

EXHIBIT 5

July 31, 1996

Board of Directors
Aid Auto Stores, Inc.
275 Grand Avenue
Westbury, New York 11590

Gentlemen:

It is our opinion that the securities being registered with the Securities and
Exchange Commission pursuant to Post-Effective Amendment No. 1 to the
Registration Statement of Aid Auto Stores, Inc. on Form SB-2 will, when sold,
be legally issued, fully paid and nonassessable.

We consent to the filing of this opinion as an exhibit to the aforesaid
Registration Statement and further consent to the reference made to us under
the caption "Legal Matters" in the Prospectus constituting part of such
Registration Statement.

Very truly yours,

/s/ Breslow & Walker

Breslow & Walker

Exhibit 10.7

October 27, 1995

Mr. Philip Stephen
Aid Auto Stores, Inc.
275 Grand Boulevard
Westbury, N.Y. 11509

Dear Mr. Stephen:

This letter will amend the Loan and Security Agreement between us dated
September 1, 1995 as follows:

Section 2: THE CREDIT

2.4. Loans and Advances (the "Advances") made to the borrower under the
Facility, shall be at the Lender's discretion, at the Borrower's request, and
based upon the following formula: up to eighty percent (80%) of Net Amount of
Eligible Accounts and up to fifty percent (50%) of the Eligible Inventory (or
such greater or lesser percentage thereof as the Lender shall in its sole
discretion determine from time to time), except that the total Advances
against eligible inventory shall not exceed $4,500,000.00.

Section 7: REPRESENTATIONS, WARRANTIES AND COVENANTS.

7.32. The Borrower shall maintain minimum Capital Funds of at least Seven
Million ($7,000,000.00) Dollars.

Nothing herein contained shall very, alter or amend said Agreement between us
except as specifically provided for herein.

Very truly yours,
ISRAEL DISCOUNT BANK OF NEW YORK

Jerry Hertzman
Vice President

Read and Agreed to:
AID AUTO STORES, INC.
By:
Title:

November 1, 1995

Mr. Philip Stephen
Aid Auto Stores, Inc.
275 Grand Boulevard
Westbury, N.Y. 11509

Dear Mr. Stephen:

This letter will amend the Loan and Security Agreement between us dated
September 1, 1995 as follows:

Section 1: DEFINITIONS.

1.4. "Capital Funds" and/or "Tangible Net Worth" shall mean net worth plus
subordinated debt less intangible assets.

Nothing herein contained shall very, alter or amend said Agreement between us
except as specifically provided for herein.

Very truly yours,
ISRAEL DISCOUNT BANK OF NEW YORK

Jerry Hertzman
Vice President

Read and Agreed to:
AID AUTO STORES, INC.
By:
Title:

Exhibit 10.8

AGREEMENT made as this 1st day of February 1996 by and between Aid Auto
Stores, Inc, and Ames Automotive Warehouse, Inc., 275 Grand Blvd., Westbury,
NY 11590, hereinafter collectively referred to as the "Employer" and Local
239, affiliated with International Brotherhood of Teamsters, hereinafter
referred to as the "Union".

W I T N E S S E T H :

WHEREAS, the Employer recognizes the Union as the only Union representing
the employees in the unit described below and agrees to deal collectively
only with the Union:

NOW, THEREFORE, in consideration of the mutual covenants, promises and
agreements herein contained, the parties DO HEREBY AGREE AS FOLLOWS:

SECTION 1: RECOGNITION.

The Employer recognizes the Union as the sole and exclusive bargaining
agent for all employees, excluding executives and supervisors (the term
"employee" and/or "worker" shall refer to this unit) and agrees to deal
collectively only with this Union for and on behalf of such employees. The
Employer agrees to recognize and deal with such representatives of the Union
as the said Union may elect or appoint. No more than one representative of
the Employer shall perform any work performed by employees within the unit.
All executives, managers, supervisors, buyers, bookkeepers, secretaries,
programmers, computer operators, and other salaried employees, as well as
drivers, shall be excluded from the bargaining unit.

SECTION 2: UNION SHOP.

(A) All employees shall be required, thirty days after the beginning of
their respective employment, or the date of signing of this contract,
whichever is later, to become and remain members in good standing of the
Union, as a condition of continued employment. The term "good standing" shall
be construed as defined in the Labor Management Relations Act as amended.

(B) The Employer will deduct from the first pay of each month, all Union
membership dues upon condition that the Union shall furnish the Employer with
a written authorization executed by the worker. Such payments are to be
remitted on or before the 5th day of each month to the Union. The Employer will
notify the Union promptly of any revocation of such authorization received by
it.

SECTION 3: NEW WORKERS.

Whenever the Employer shall require new workers, he shall first offer
employment to those of his workers who may have been laid off in accordance
with the seniority provisions of this agreement. If the Employer shall need
new workers in addition to those obtained pursuant to subdivision (A) hereof,
he shall apply for such workers to an employment office the Union undertakes
to operate, without discrimination. The Employer may engage such new workers
from any other employment office or source. The employment facilities of the
employment office to be operated by the Union shall be made available to all
persons regardless of whether they are members of the Union or not, and in
operating such employment office and making referrals to the Employer, the
Union will not discriminate against, restrain or coerce any persons because
of their non-membership in the Union.

SECTION 4: SENIORITY.

(A) All workers employed for a period exceeding sixty (60) days shall be
considered permanent employees and shall be entitled to seniority rights; on
mutual consent the trial period can be extended by thirty (30) days. All
layoffs shall be in inverse order of seniority, i.e., the last person hired
shall be the first person laid off. The Employer agrees to give five (5) days
advance notice of layoff, or five (5) days pay in lieu of notice. In the
event that additional employees shall be needed, all persons previously laid
off shall be rehired in the order of seniority, i.e., the last person laid
off shall be the first person to be rehired. Seniority shall be based on
total service with the Employer. Union stewards shall be the last to be laid
off and the first to be rehired provided, however, that the steward has two
years or more of service with the Employer.

Compliance with the foregoing as to rehiring shall be deemed sufficient
upon forwarding written notice by registered or certified mail to the
employee at his last address. Failure of reply from the employee or the Union
in writing, within one week's time shall be deemed a waiver of the conditions
of rehiring. If more than six (6) months time has elapsed after layoff of an
employee the terms and conditions of rehiring shall not apply.

(B) Employees rehired after a layoff shall have the seniority held when
they left and shall be entitled to the wages they received at the time they
were laid off plus any increases granted in the interim.

(C) Employees shall accumulate seniority for up to one (1) year when absent
for sickness, military service or leave of absence for union activity.

SECTION 5: DISCHARGE.

The Employer shall not discharge nor suspend any employee without just
cause. In all cases involving the discharge or suspension of an employee, the
Employer must immediately notify the employee in writing of his discharge or
suspension and the reason therefor. Such written notice shall also be given to
the Shop Steward, and a copy mailed to the Local Union office, within three
(3) working days from the time of the discharge or suspension.

SECTION 6: HOURS.

(A) The regular basic work week shall be forty (40) hours per week, eight
(8) hours per day, five (5) days per week, Monday through Friday inclusive.

(B) The above working hours shall be scheduled by the Employer during the
period from 6:00 A.M. through 6:00 P.M. The hours of daily employment shall
be consecutive and may be interrupted for a meal only, which shall be for a
period of no more than one-half (1/2) hour. Provided: Employees hired before
February 1, 1996 cannot be required to change starting and quitting times by
more than one-half (1/2) hour from their starting and quitting times as in
effect on February 1, 1996.

(C) Should any employee be required to work in excess of eight (8) hours
per day or forty (40) hours per week or any time on a Saturday he shall be
paid for such time at the rate of time and one-half (1-1/2). Double time shall
be paid for all work performed on Sundays and holidays. Sick leave days shall
be considered as days worked for the computation of overtime. The Union will
cooperate with the Employer in providing personnel for Saturday work.
Employees who work on Saturdays shall be guaranteed a minimum of four
(4) hours work.

(D) The foregoing notwithstanding, the Employer shall have the right to
require overtime from the employees provided same does not exceed 45 minutes
time in any one day and only on condition that the employee be given equal
time off for such work.

SECTION 7: HOLIDAYS.

(A) The Employer shall pay the employees full salary for the following
holidays, as if they worked thereon:

New Year's Day
Independence Day
Washington's Birthday
Labor Day
Good Friday
Thanksgiving Day
Memorial Day
Christmas Day

(B) In the event the Employer closes on any other day, the employees
shall be paid therefor at their single base rate of pay.

(C) If a holiday falls on a day when the employee is not scheduled to
work, but during a period when he otherwise would have been working, the
employee shall be entitled to an additional day off, or an extra day's pay,
at the option of the Employer, who must decide in two (2) weeks' time. If a
holiday falls on a day the employee is scheduled to work, then the employee
will be paid for the holiday if he works on the regular work day immediately
preceding and the regular work day immediately following the holiday, unless
his absence is excused by the Employer. All employees who have been laid off
two (2) weeks or less preceding the holiday, shall be entitled to holiday
pay, provided such employee has been employed for at least three (3) months
before said holiday.

(D) In addition to holidays enumerated in Paragraph (A) above, each
employee who has completed six (6) months of service shall receive two (2)
personal days off with pay each year. These holidays shall be taken at times
mutually convenient to the Employer and the employee, provided, however, that
the employee shall be required to request such days at least two (2) weeks in
advance. Employees may use a personal day or if none is available an unpaid
one (1) day leave of absence to celebrate Martin Luther King's Birthday on
one (1) week's notice.

SECTION 8: VACATIONS.

Employees shall have earned the right to a vacation in accordance with the
following:

(A) (1) Employees hired before February 1, 1996:

Employees in the employ of the company for at least six (6) months, and who
have actually worked no less than twenty-three (23) weeks during the
preceding six (6) months, shall be entitled to one (1) week's vacation with pay.

Employees in the employ of the company for one (1) year or more, and who
have actually worked no less than forty-five (45) weeks during the preceding
year shall be entitled to two (2) weeks' vacation with pay.

Employees in the employ of the company for four (4) years or more, and
who have actually worked no less than forty-five (45) weeks during the
preceding year shall be entitled to paid vacation as follows:

4 years of service - 2 weeks + 1 working day
5 years of service - 2 weeks + 2 working day
6 years of service - 2 weeks + 3 working days
7 years Or service - 3 weeks

Employees with eight (8) years or more of service shall be entitled to
vacation with pay in accordance with the following schedule:

8 years of service - 3 weeks + 1 working day
9 years of service - 3 weeks + 2 working days
10 years of service - 3 weeks + 3 working days
11 years of service - 3 weeks + 4 working days
12 years of service - 4 weeks

(A) (2) Employees hired on or after February 1, 1996:

Employees in the employ of the company for at least one (1) year and who
have actually worked no less than forty-five (45) weeks during the preceding
year, shall be entitled to one (1) week's vacation with pay and shall
progress according to the following schedule:

2 years of service - 2 weeks
7 years of service - 3 weeks
12 years of service - 4 weeks

(B) The date of employment, until September 1st, shall be used for purposes
of computing vacations.

(C) Seniority shall determine choice of vacation period, except, however,
the Employer shall have the right to determine the number of employees
scheduled for vacation at any one time. Employees with less than fifteen (15)
years of service shall be entitled to take one week of vacation in the period
from June 15th through September 15th. Employees with fifteen (15) and more
years of service shall be entitled to take two consecutive weeks of vacation
during this period. The balance of vacation shall be scheduled outside of this
period, or the employees may take their full vacation in consecutive weeks
outside of the summer vacation period, subject to the needs of the Employer's
business.

(D) Employees laid off or who terminate their employment prior to the
vacation period shall be paid their vacation monies on a pro-rated basis at
the time such employment is terminated. Should the laid off employees be
recalled at the time of the vacation period, they shall receive the balance
of vacation due them. No vacation credit if employee is discharged for cause.

(E) In the event one of the holidays specified herein falls within the
vacation period of an employee, such employee shall be given an additional
day's pay or an additional day off at the option of the Employer.

(F) Each employee who qualified for vacation pay as provided above shall be
paid the amount to which he is entitled not later than the last working day
preceding the vacation.

SECTION 9: SICK AND MATERNITY LEAVE.

(A) Employees shall be entitled to ten (10) days a year sick leave and all
unused sick leave shall be payable in cash at the end of each contract year.
Employees who are laid off or who quit prior to the vacation period shall be
paid their sick leave pay, if any, on a prorated basis at the time such
employment is terminated. In computing the amount to be paid, the date of
employment shall be arrived at in the same manner as if vacation time was
involved. An employee who quits his employment shall be required to
reimburse the Employer for overdrawn sick leave computed on the basis of
five-sixths (5/6) of a day per month. Employees hired after February 1, 1996
will not be entitled to any sick leave until the beginning of the contract
year after they have completed one (1) year of employment.

(B) Maternity leave shall be granted to female employees for a period not
exceeding the period of actual disability, up to a maximum of one year. On
return from maternity leave, the employee shall be required to give the
Employer 30 days advance notice of her intention to return to work and she
shall be returned to her former or similar job at the going rate of pay and
without loss or prejudice to any of her rights or privileges. A severance
bonus of one week's pay shall be paid to all employees going on maternity
leave, which shall be applicable to employees having one year or more Or
service.

SECTION 10: ADJUSTMENT OF DISPUTES.

(A) In the event of any dispute, grievance, the discharge of any employee or
any controversies arising out of, or relating to this Agreement, or the
breach thereof, it shall be settled as follows:

By negotiations first between the Employer and the Steward, if not
settled, then between the Employer and the Union. Any dispute, grievance,
charges, claims or controversies that cannot be settled between the Employer
on the one hand and the Steward and the Union on the other hand, must be
submitted in writing by the party seeking redress and forwarded to the other
party prior to arbitration. If an agreement is not reached within five (5)
days, unless extended by letter as herein provided, either party may cause the
matter to be submitted for arbitration before an arbitrator mutually
selected, in default whereof, he shall be appointed by the New York State
Board of Mediation in cases involving all disputes, etc. which do not
involve matters relating to contributions to the Local 239 Welfare Fund or
checkoff of Union dues and fees. In cases which do involve the last
enumerated matters, the arbitration shall be conducted by a staff member
of the New York State Mediation Board, or if a permanent arbitrator is
designated at the mutual agreement of the Automotive Parts Distributors
Association, Inc. ("APDA") and the Union, by such arbitrator. The decision of
the arbitrator duly appointed shall be final and binding upon both parties
and shall be fully enforceable. Anything herein to the contrary
notwithstanding, the Employer shall not be deemed to have waived any of its
rights or privileges granted to it and allowed by law.

The arbitration procedure herein set forth is the sole and exclusive
remedy of the parties hereto and the workers covered hereby, for any claimed
violations of this contract, and for any and all acts or omissions claimed to
have been committed by either party during the term of this Agreement, and
such arbitration procedure shall be (except to enforce, vacate or modify
awards) in lieu of any and all other remedies, forums at law, in equity or
otherwise which will or may be available to either of the parties. The waiver
of all other remedies and forums herein set forth shall apply to the parties
hereto, and to all of the workers covered by this contract. No individual
worker may initiate an arbitration proceeding.

(B) The Union shall require its members to comply with the terms of this
Agreement. The parties agree that the maintenance of a peaceable and
constructive relationship between them and between the employees and the
Employer requires the establishment and cooperative use of the machinery
provided for in this contract for the discussion and determination of
grievances and disputes, and it would detract from this relationship if
individual employees or groups of employees would, either as such individuals
or groups, seek to interpret or enforce the contract on their own initiative
or responsibility. It is, therefore, agreed that this contract shall not vest
or create in any employee or group of employees covered thereby any rights or
remedies which they or any of them can enforce either at law, equity or
otherwise, it being understood and agreed, on the contrary, that all of the
rights and privileges created or implied from this contract shall be
enforceable only by the parties hereto and only in the manner established in
this contract.

(D) The costs and expenses of any arbitration shall be shared equally
between the parties.

SECTION 11: NO STRIKE OR LOCKOUT.

There shall be no strike by the employees or lockout by the Employer
during the term of this Agreement. Anything to the contrary notwithstanding,
the Union shall have the right to strike if the Employer fails to abide by an
arbitrator's award.

SECTION 12: GENERAL PROVISIONS.

(A) It shall not be a violation of this Agreement or cause for discipline
or discharge if an employee refuses to go through a picket line. This
provision shall not apply to any picket line established at the premises of
the Employer by any other Union, other than a picket line established by
Local 239, I.B.T.

(B) (1) In accordance with applicable law, the Employer and the Union
agree not to discriminate against any individual with respect to hiring,
compensation, terms or conditions of employment because of such individual's
race, color, religion, sex, national origin, pregnancy, or age, nor will they
limit, segregate or classify employees in any way to deprive any individual
employee of employment opportunities because of race, color, religion, sex,
national origin, pregnancy, or age.

(2) The Employer and the Union agree that there will be no discrimination
by the Employer or the Union against any employee because of his or her
membership in the Union or because of any employee's lawful activity and/or
support of the Union.

(3) The term "he" or "his" as used in this Agreement is not meant to be
discriminatory and shall apply equally to male and female employees.

(C) The Union's representative may visit the Employer's premises for the
purpose of investigating working conditions or conferring with the Employer
or employees. The stewards shall have free movement within the plant for the
purpose of investigating working conditions or conferring with the Employer.

(D) The Employer shall provide space for a bulletin board in a reasonably
accessible place for Union notices.

(E) Each employee shall be covered by unemployment insurance which shall be
paid for by the Employer.

(F) When an employee is required to perform jury duty, the Employer shall
reimburse the employee for the difference between his regular wages and the
amount received for such Jury duty, except that during the busy season, the
employee, when requested by the Employer, is to seek an adjournment to a less
busy future date.

(G) Any employee who is drafted for military training or service in the
Armed Forces of the United States or its subdivisions, shall upon completion
of such training or services, be restored to former status, including any
general wage increase that they would have had if employment had not been
interrupted. Such employees shall upon leaving for service, receive a bonus
of one week's extra pay.

(H) It is specifically agreed that all wages, salaries and all benefits
or conditions of employment and practices of employees in effect at the date
hereof or increases hereafter shall not be reduced, nor the hours of
employment increased by the Employer, anything contained in this Agreement
to the contrary notwithstanding.

(I) All employees are to receive one (1) ten (10) minute rest period,
each morning at a time selected by the Employer.

(J) The Employer shall display the emblems furnished by the Union on all
company trucks and in the shop for public display. The Union shall have the
right to withdraw these emblems for any breach of contract.

(K) At the request of the Union, subject to the employee's consent,
leaves of absence shall be granted to any employee selected or elected to
Union office or as a delegate to any Union activities or for any activities
or missions. Employees on such leave of absence shall be returned, upon
completion of their leaves, to their former or similar positions at the
salary in effect at the time of their return without loss or prejudice to any
of their rights and privileges.

(L) The Employer shall maintain sanitary conditions, adequate lockers,
adequate toilet facilities and adequate washing facilities.

(M) Openings for better jobs both within and without the unit, shall
first be offered to the employees covered by this Agreement, provided they
are capable of performing the job.

SECTION 13: WAGES AND MINIMUM.

Effective 2/1/96 employees with one (1) year of continuous service shall
be paid at no less than $4.50 per hour.

All employees shall receive increases as follows:

Effective 2/1/96 - $.10 per hour.
Effective 2/1/97 - $.15 per hour.
Effective 2/1/98 - $.15 per hour.

SECTION 14: WELFARE FUND.

(A) The Employer shall contribute three hundred and thirty two ($332)
dollars per month by the fifth day of each current month for each employee
covered by this Agreement which payments are to be made to the Local 239
Welfare Fund and sent to the Secretary-Treasurer of the Union. With each
payment, the Employer shall submit a list showing names and addresses of each
employee for whom payment is being made and such other information as may be
required by the Welfare Fund. Where the Employer does not make the payments
as above required and the Employer does not promptly notify the Union in
writing that the employment has been terminated, and the Fund continues to
cover such persons who are no longer employed, the Employer shall be required
to make payments for such persons. In addition, the Employer shall make
payments for a period not exceeding 30 days for those on sick leave. The
Welfare Fund shall have the right to examine all records of the Employer
pertaining to said payments.

(B) Effective April 1, 1997 welfare contributions shall be increased to
$347.00 per month, per employee. Effective April 1, 1998 welfare
contributions shall be increased to $362.00 per month, per employee.

(C) The contributions shall be used by the Trustees for the purchase of
Group Insurance and other benefits for the employees and their dependents as
shall be determined by the Trustees without limitations of authority. The
contributions shall be held and managed under the terms and provisions of an
Agreement and Declaration of Trust, the original of which is on file in the
office of the said Welfare Fund, and all amendments thereto from time to time.

(D) A welfare contribution shall be made for a new employee in the
current month if he has completed his first two (2) months of employment by
the 15th day of the current month. If a new employee completes his first two
(2) months of employment after the 15th day of the current month, the
contributions shall be made on the following month.

(E) The parties hereto hereby confirm and approve the composition and
membership of the Board of Trustees of the Local 239 Welfare Fund as now and
hereafter constituted. The Union or the Welfare Fund may institute or
intervene in any proceedings at law, in arbitration, in equity, bankruptcy or
assignment for the purpose of effectuating the collection of any sums due
from the Employer.

SECTION 15: SUCCESSORS AND ASSIGNS.

This Agreement shall be binding on the parties hereto, their respective
successors or assigns. If for any reason, the Employer shall change its name
or legal status or the Union shall change its affiliation, it is agreed that
such change shall in no manner modify or affect the binding obligations of
this Agreement or the carrying out of the terms thereof.

SECTION 16: VALIDITY.

To the best knowledge and belief of the parties, this Agreement contains
provision which is contrary to Federal or State Law, or regulation. Should,
however, any provision of this Agreement, at any time during the period
provided for in said Agreement, be in conflict with Federal or State Law, or
regulation, the parties agree to negotiate with respect to such provisions,
and said provision shall continue in effect for the time being only to the
extent permitted under such Federal or State Law or regulation. In the event
that any provision of this Agreement is thus held inoperative, the remaining
provisions of this Agreement shall nevertheless remain in full force and
effect, except that if the parties cannot reach an agreement in the
aforementioned negotiations, then the same shall be submitted to arbitration
as provided herein.

In the event that any of the increases in wages and fringe benefits, or
any portion thereof provided for in this Agreement, violate or are contrary
to applicable Federal wage stabilization statutes, regulations or executive
orders, this Agreement shall otherwise remain in full force and effect in
accordance with its terms and the negotiated increases in wages and fringe
benefits hereunder shall be paid or provided for to the extent and in the
amount that same are valid or authorized under applicable Federal Law.

SECTION 17: EFFECTIVE DATE.

This Agreement shall go into effect as of the date first written and
shall continue in full force and effect until the 31st day of January, 1999
and it shall be automatically renewed from year to year thereafter, unless
notification be given in writing to either party by the other by registered
or certified mail, not less than sixty (60) days and not more than seventy-
five (75) days prior to the expiration date that it does not desire to renew.

IN WITNESS WHEREOF the parties hereto have set their respective hands and
seals the day and year above written.

AID AUTO STORES, INC. LOCAL 239 affiliated with
AMES AUTOMOTIVE WAREHOUSE, INC. International Brotherhood
of Teamsters
By: By:
Title: Title:

Local 239 Shop Committee

Exhibit 21.1

SUBSIDIARIES OF AID AUTO STORES, INC.

Corporate Name State of Incorporation

Aid Flatlands Avenue, Inc. New York
Ames Automotive Warehouse, Inc. New York
White Plains Aid, Inc. New York
Bellmore Aid Inc. New York
Bethpage Superstore Aid Auto, Inc. New York
North Babylon Superstore Aid Auto, Inc. New York
Glen Cove Superstore Aid Auto, Inc. New York
Oceanside Superstore Aid Auto, Inc. New York
Jersey City Superstore Aid Auto, Inc. New Jersey
Hillside Avenue Aid, Inc. New York
Perfect Choice Automotive Products, Inc. New York

Exhibit 23.1

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We have issued our report dated March 15, 1996, accompanying the financial
statements of Aid Auto Stores, Inc. contained in the Registration Statement
and Prospectus. We consent to the use of the aforementioned report in the
Registration Statement and Prospectus, and to the use of our name as it
appears under the caption "Experts."

/s/ GRANT THORNTON LLP

GRANT THORNTON LLP

New York, New York
August 1, 1996

Dates Referenced Herein and Documents Incorporated by Reference

This ‘POS AM’ Filing	Date	Other Filings

	3/31/08
	9/13/00
	2/1/00
	1/31/99
	8/22/98
	4/10/98
	4/1/98	NT 10-K
	12/15/97
	8/31/97
	4/10/97
	4/1/97
	12/31/96	10-K, DEF 14A, NT 10-K
	10/23/96
Filed on:	8/12/96
	8/1/96
	7/31/96
	7/30/96
	6/30/96	10-Q
	6/28/96
	6/15/96
	5/31/96
	5/1/96
	4/30/96
	4/11/96
	3/31/96	10-Q, 10-Q/A
	3/15/96
	2/1/96
	1/31/96
	1/2/96
	12/31/95
	12/15/95
	11/9/95
	11/1/95
	10/27/95
	10/10/95
	10/1/95
	9/30/95
	9/1/95
	8/1/95
	7/22/95
	4/19/95
	4/11/95
	4/10/95
	4/6/95
	3/31/95
	3/15/95
	2/14/95
	2/9/95
	2/1/95
	1/1/95
	12/31/94
	12/2/94
	1/1/94
	12/31/93
	1/1/93
		List all Filings

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Filing Submission 0000937599-96-000011 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Aid Auto Stores Inc/DE – ‘POS AM’ on 8/12/96

As of: Monday, 8/12/96 · Accession #: 937599-96-11 · File #: 33-89190

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