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Turbine Truck Engines Inc – ‘424B2’ on 10/4/04

On:  Monday, 10/4/04, at 4:33pm ET   ·   Accession #:  1193125-4-166278   ·   File #:  333-109118

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

10/04/04  Turbine Truck Engines Inc         424B2                  1:499K                                   RR Donnelley/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 424B2       Final Prospectus                                    HTML    456K 

Table of Contents

Filed Pursuant to Rule 424(b)(2)

Registration No. 333-109118

PROSPECTUS

TURBINE TRUCK ENGINES, INC.

1200 Flightline Boulevard, Suite 5

Deland, Florida 32724

1,000,000 Shares

Common Stock

We are going to offer up to 1,000,000 shares of our common stock for $2,000,000 in proceeds from the offering. Prior to this offering, there has been no public trading market for our securities. The public offering price will be $2.00 per share and will be offered on a self-underwritten basis. This offering will expire one year from the date of this Prospectus. We must sell a minimum of 25,000 shares in order to receive proceeds of $50,000 from the offering. The proceeds from the sale of the securities will be placed in an escrow account opened at SouthTrust Bank, 100 E. New York Avenue, Deland, Florida 32724, until a minimum of 25,000 shares in the primary offering are sold.

This offer is being made on a 25,000 share minimum, 1,000,000 share maximum basis. In the event that the minimum amount of 25,000 shares is not sold by the end of the 12 month period commencing on the date of the Prospectus (the “Termination Date”), all funds will be promptly returned to the investors, without interest. Once the minimum offering amount has been raised, the proceeds will be utilized by management as set forth herein.

THE COMMON STOCK BEING OFFERED INVOLVES A HIGH DEGREE OF RISK. SEE “RISK FACTORS” COMMENCING ON PAGE 5 FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS. THE COMMON STOCK BEING OFFERED IS NOT LISTED ON ANY NATIONAL SECURITIES MARKET.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

The date of this Prospectus is August 12, 2004

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TABLE OF CONTENTS

You should rely only on the information contained in or incorporated by reference in this Prospectus. We have not authorized anyone to provide you with different information. We are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information provided by this Prospectus is accurate as of any date other than the date on the front of this Prospectus.

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PROSPECTUS SUMMARY

The Company

We are a Delaware corporation organized on November 27, 2000, for the purpose of acquiring, on an exclusive basis, certain proprietary technology license rights (the “License”) from Alpha Engines Corporation (“Alpha”). Alpha has developed and patented a new turbine engine technology that consists of an electromagnetic isothermal combustion (“EIC”) process which we believe to be a favorable alternative to the combustion technology currently used in diesel, gasoline and gas turbine engines. EIC is a high-energy pulse arc that is utilized to ignite fuel-air mixtures at low pressure, which is an isothermal reaction. This eliminates the need to pre-heat and compress the fuel. We believe the lower emissions and increased fuel savings resulting from the use of the Alpha Engines will appeal to our target market of highway truck engines initially in use in the United States and then internationally. (See “Business of the Company.”)

We incorporated with the objective of raising capital and exercising an option to acquire an exclusive license from Alpha for manufacturing and marketing heavy duty highway truck engines utilizing Alphas’ Detonation Cycle Gas Turbine Engine technology embodied in U.S. Patent #6,000,214, and other proprietary technology and rights owned by Alpha including marketing survey data in the highway trucking industry.

On December 15, 2000, we acquired the option rights to the above Alpha License and marketing survey data from our founder and principal, Michael Rouse, in exchange for 10,000,000 shares of our common stock and his promotional services and out-of-pocket expenses over the past 18 months in acquiring the option from Alpha. We reserved 10,000,000 shares of our restricted common stock for Alpha to acquire the license. In July 2002, Alpha modified the agreement to allow us to acquire the license agreement in advance of completing our registration statement and accepted a note as payment for the licensing fee and for the issuance of 5,000,000 shares of common stock in lieu of the original 10,000,000 shares. We exercised our option and acquired the licensing rights on July 22, 2002 with a $250,000 promissory note payable to Alpha and the stock on July 22, 2003. The note has been extended until the earlier of August 23, 2005 or completion of funding this offering. Michael Rouse, our CEO, and Alpha each returned 5,000,000 shares to our treasury, reducing the outstanding shares to 11,197,000.

We utilized a private placement pursuant to Rule 506 of Regulation D offering to raise operating capital and we currently intend to raise $2 million in capital from this SB-2 registration.

To date, we have received no revenue from operations and ($3,037,635) represents our net losses since inception.

The Offering

We are offering our shares of common stock at $2.00 per share on a self-underwritten basis. All funds received will be deposited into an Escrow Account established at SouthTrust Bank. At such time as the minimum offering amount has been received and accepted, the funds may be paid and used by us in accordance with the use of proceeds table set forth herein. (See “Use of Proceeds.”) In the event that the minimum amount of 25,000 shares is not sold by the end of the 12 month period commencing on the date of the Prospectus (the “Termination Date”), all funds shall be promptly returned to the investors, without interest.

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Affiliates of our Company may not purchase shares of our stock in order to achieve the minimum amount of our offering. Once the minimum offering amount has been subscribed for, Officers, Directors and their affiliates will be permitted to purchase no more than 20% of shares being sold and such purchases will be held for investment and not for resale.

SUMMARY FINANCIAL DATA

The following summary financial and other data should be read in conjunction with “Management’s Discussion and Analysis or Plan of Operation,” “Capitalization,” the statistical information set forth under the heading “Business,” and the financial statements and related notes of Turbine Truck Engines, Inc., appearing in this Prospectus beginning on page F-1. The selected financial data for the periods ended December 31, 2003, and 2002 were derived from our audited financial statements for the respective periods.

Selected Statements of Operations Data

Selected Balance Sheet Data

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RISK FACTORS

You should carefully consider the risks described below before making an investment decision. The risks and uncertainties described below are material risks facing our contemplated operations. All material risks will be discussed in this section.

If any of the following risks occur, our business financial condition or results of operations could be materially harmed. In such case, the trading price of our common stock could decline, and you may lose all or part of your investment.

You could lose all of your investment if we do not remain a going concern.

Business Risks

We are in the development stage and have no operating history which means we may never generate revenues

We were organized on November 27, 2000 and must accomplish several objectives prior to being in a position to generate revenue. We must raise significant additional capital, either through a public offering or second private offering, to design an experimental engineering prototype engine using the acquired technology that can be utilized in the heavy duty trucking industry. Only after such an engine is designed and successfully tested will we be in a position to pursue revenue generating activities. Accordingly, we have no record upon which investors may base an evaluation of its performance or any assumption that we will be profitable. We are likely to incur losses from startup operations as a result of, among other things, organization expenses, design and testing expenses, marketing and expansion costs. Therefore, our prospect for success must be considered in light of the risks, expenses and difficulties frequently encountered by a new small business attempting to exploit a new technology.

Our product may not be accepted by the trucking industry, which means we would have no business

Although we have an exclusive license, there can be no assurance that we will be able to successfully design a heavy duty truck engine using the acquired technology, or that any engine designed will be accepted by the trucking industry. Acceptance of our engine in the trucking industry will depend upon many factors beyond our control, including without limitation, the dependability, amount of fuel savings and other benefits demonstrated by the engine.

If we fail to design an engine that is accepted by the trucking industry, for whatever reason, the return to investors in this offering will be significantly impacted and such investors may lose all of their investment.

Our proposed product is dependent upon Alpha to develop the prototype engine

Alpha has designed, constructed and tested four experimental prototype engines to acquire engineering parameters which provides final data for the construction manufacturing of marketable engine. However, Alpha has not designed, constructed and tested a heavy duty highway truck engine. Substantial engineering will be required to design, construct and test a heavy duty truck engine using the acquired technology. There can be no assurance that such an engine can be successfully designed.

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We are dependent on Alpha to design, construct and test our prototype engine otherwise we will not be able to develop a prototype engine and we will cease doing business

In order to put ourselves in the position to develop a prototype engine, we are dependent on Alpha to design, construct and test our final prototype engine. In the event Alpha does not perform, we will not be able to develop the prototype engine and will not be able to continue as a going concern.

We will require additional financing and if we fail we will not be able to continue as a going concern

While our management believes the proceeds from this offering will be sufficient to implement the first step of its business plan, which entails designing a prototype engine for highway trucks, unexpected contingencies could occur which would require us to secure additional financing, possibly in the form of loans secured by our assets. There can be no assurance that we could raise such additional capital to pay for any unanticipated expenses. Failure to raise such capital will not allow us to continue as a going concern.

Indemnification of our management protects officers and directors for making poor decisions

Under most conditions, our officers and directors may not be held liable for errors in judgment or other acts or omissions not amounting to fraud, gross negligence or malfeasance because provision has been made in the respective Articles of Incorporation holding them harmless and providing to them indemnification against liabilities or losses that arise from such acts or omissions. To the extent that such indemnification provisions are invoked, our assets could be reduced and our business could be impaired.

Intellectual property infringement could affect our market share if a competitor wrongfully acquired and utilized our licensed technology

The technology which is licensed by us is covered by a patent. While this will afford us some protection, there can be no assurance that we or Alpha will be able to adequately protect the proprietary rights comprising the acquired technology. If we are successful in developing a commercially viable engine for the trucking industry, it can be expected that both existing and new engine manufacturers will be motivated to utilize the acquired technology to develop competitive products. It may be difficult for us and/or Alpha to prevent misappropriation of the acquired technology or the independent development by others of similar technology, especially in view of their limited resources and the potential cost of any legal action to enforce such rights. The cost of, and time dedicated to, enforcement by us of our rights, if any, could be significant. Regardless of the outcome of such enforcement proceedings, there can be no assurance that such proceedings will be effective. In addition, although we believe that there are no infringement or trade secret misappropriation claims against us and no grounds for the assertion of any such claims, the cost of responding to any such assertion, should it be made, could be significant and there is no assurance that we would prevail. We may not have the funds to enforce our rights and as a result may lose our right to utilize the patent or maintain any exclusivity to its use.

Limited experience will require additional staff with specific expertise or we will be unable to develop our technology or business model

We have limited experience in engine technology and product testing and development, and almost no experience with the acquired technology to be utilized in connection with our contemplated operations. We will require additional personnel in the future. There can be no assurance that we will be able to build an adequate staff. Without experienced staff we may not be able to complete our business operations.

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If our license is terminated, our business will cease to exist

Our entire business plan will be based on our License of the acquired technology. The License will be perpetual in duration, subject to the payment of annual royalty fees which are based on our net sales. The royalty fee is a minimum of $250,000 annually once operations commence and increased royalties will be based on increased sales. No royalties will be paid until manufacturing commences. The termination of the License, for any reason, could terminate our business and result in a total loss to all investors. In addition, our limited experience with the acquired technology will make us very dependent upon the technological and manufacturing support of Alpha. The license may be terminated by Alpha if the $250,000 promissory note is not paid by August 23, 2005 or upon completion of the SB-2 public stock offering. Without the license, our business operations will cease.

We do not intend to pay dividends and will use any earnings to finance our growth

We have never paid any dividends on our common stock and do not intend to pay dividends on our common stock in the foreseeable future. Any earnings which we may realize in the foreseeable future are anticipated to be retained to finance our growth. This means shareholders will not receive dividends on their shares but instead will rely on value added transactions completed by our management, if any.

Our Auditors have raised substantial doubts as to our ability to continue as a going concern

As reflected in our financial statements for the period ended December 31, 2003, we incurred a net loss of $190,567 and an accumulated deficit of $3,023,153 since our inception. Since we have not yet emerged from the developmental stage, our ability to continue as a going concern is dependent upon our ability to raise capital from this offering so we may begin operations. Should we be unable to raise adequate funding, we will not be able to continue as a going concern.

Offering Risks

There is no assurance that a public market will develop which means that you may not be able to liquidate your investment

Our common stock is not presently traded on any established market. There is no prior trading market for our common stock and there can be no assurance that a trading market for the common stock will develop, or if developed, that it will continue. If no market develops, it may be difficult or impossible for holders of the common stock to sell their shares if they should so desire. In addition, there are substantial restrictions on the sale or transfer of the common stock imposed by Federal and State securities laws. There are no assurances that holders will be able to sell their shares of the common stock or that sufficient shares will be sold to create a public market for the common stock. This means that holders may not be able to receive funds for the shares previously purchased.

Investors may lose their entire investment

There can be no assurance that our offering will raise operating capital for our initial 12 months of operations. Should the minimum amount of the offering be the only amount raised in the offering, we could not operate for our initial 12 months and amounts contributed by investors in reaching the minimum would not be returned to the investors. If we fail to raise additional equity or debt financing, it would impair our operations and investors may lose the total amount of their investment.

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Investors will suffer immediate dilution

Following the purchase of the common stock, investors will experience immediate and substantial dilution of their investment. Assuming the sale of the maximum, investors will suffer an immediate dilution of $1.86 per share. Should only the minimum be sold, investors will be diluted by $2.02 per share.

Arbitrary offering price means we have no information to support the market price of our shares

We have determined the number of shares to be offered based upon our estimate of the amount of proceeds necessary for planned uses. The offering price, which was determined by our board of directors, is based on our capital requirements and current market conditions, the capital structure of our company and our prospects for success. Accordingly, the offering price should not be considered an indication of the actual fair market value of the common stock as if appraised by a qualified third party.

Funds will not be returned to investors which means your investment could be in an undercapitalized company

We are offering a minimum amount of common stock which will result in proceeds of $50,000 to us. Once the minimum offering amount has been subscribed for, we will utilize those funds for our business operations and investors will not receive a return of their investment. You should be aware that receipt of the minimum offering amount would severely impair our business operations. In addition, we would require additional financing and there can be no assurance that such financing would be available on reasonable terms. Without obtaining such financing, we will not be able to continue our business operations.

Future sales of our common stock by our existing stockholders could decrease the trading price of the common stock

Assuming a public market for our shares develops at some future date, of which there can be no assurance, sales of a large number of shares of our common stock in the public markets after this offering, or the potential for such sales, could decrease the trading price of our common stock and could impair our ability to raise capital through future sales of our common stock. Upon completion of this offering, there will be 12,197,000 shares of our common stock outstanding. Of these shares, the 1,000,000 shares of common stock included in the shares sold in this offering will be freely tradable without restrictions or further registration under the Securities Act of 1933, unless such shares are purchased by our “affiliates,” as that term is defined in Rule 144 of the Securities Act of 1933.

All of the rest of our outstanding shares will be “restricted securities” for purposes of Rule 144 of the Securities Act and may not be resold unless registered under the Securities Act or sold pursuant to an applicable exemption from registration, including the exemption contained in Rule 144. All of these securities are eligible for sale on the open market under Rule 144 (subject to the volume, holding period and manner of sale limitations of that rule), except for shares which are subject to lockup agreements which prohibit their sale for periods of six months from completion of the offering and sales of 10% of share holdings each month thereafter.

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DILUTION

Purchasers of our Common Stock in this offering will experience dilution in net tangible book value per share. Dilution in net tangible book value per share represents the difference between the offering price of our Common Stock in this offering and the net tangible book value of our Common Stock (the difference between our tangible assets and our liabilities, divided by the number of shares of Common Stock outstanding) immediately after the sum of all of the shares offered hereby.

As of March 31, 2004, our negative net tangible book value was ($348,355), or ($0.03) per share of our outstanding Common Stock. After giving effect to the sale of a maximum number of shares of Common Stock in this offering, and our net tangible book value as of March 31, 2004 would have been $1,651,645, or $0.15 per share of our outstanding Common Stock. This represents an immediate increase in our net tangible book value of $0.18 per share to current stockholders and an immediate dilution of a $1.85 per share to new investors purchasing the shares in this offering. After giving effect to the sale of a minimum number of shares of Common Stock sold in this offering, our net tangible book value as of March 31, 2004 would have been ($298,355), or ($0.03) per share of our outstanding Common Stock. This represents an immediate increase in our net tangible book value of $0.00 per share to current stockholders.

The following table illustrates the foregoing information as of March 31, 2004 with respect to dilution to new investors:

DETERMINATION OF OFFERING PRICE

The offering price of the 1,000,000 common shares being offered has been determined primarily by our capital requirements, current market conditions and our capital structure and has no relationship to any established criteria of value, such as book value or earnings per share. Additionally, because we have no operating history and have not generated any revenues to date, the price of the shares is not based on past earnings nor is it indicative of current market value for the assets owned by us. The board of directors based the $2.00 price on a weak market combined with the number of shares issued to maintain a reasonable market cap and company valuation.

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Forward-Looking Statements

Some of the information contained in this Prospectus involves forward-looking statements. These statements include, but are not limited to, statements about our industry, plans, objectives, expectations and other statements that are not historical facts. Forward-looking statements by their nature involve risks and uncertainties. Therefore, actual results may differ materially from those implied or expressed by these statements. Accordingly, you should not place undue reliance on these forward-looking statements.

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USE OF PROCEEDS

The net proceeds to the Company range from $50,000 (the “Minimum”) to $2,000,000 (the “Maximum”). Management will have discretion to allocate the proceeds of the offering in terms of timing and priorities in keeping with the business plan. Should only the Minimum be raised, we anticipate operating capital for three months. Assuming 100% of the offering is successfully sold, we anticipate 12 months of capital requirements.

It is possible that no proceeds may be raised from this offering. If fewer than all of the shares are sold, we will have to delay or modify our current plans. There can be no assurance that any delay or modification will not adversely affect our development. If we require additional funds to develop our plan, such funds may not be available on terms acceptable to us.

Use of Proceeds Summary Table

The foregoing represents our best estimate of allocation of the proceeds of this offering, based upon the current state of our business operations and our current plans. Pending application of the net proceeds of this offering, we may temporarily invest such funds in interest-bearing accounts, certificates of deposit, government obligations, short-term interest bearing obligations, and similar short-term investments.

Sale of the minimum offering amount

In the event we raise only the minimum, we will only be able to pay off the expenses incurred to date and investors will lose their entire investment in our company.

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BUSINESS OF THE COMPANY

Background

We are a Delaware corporation, incorporated on November 27, 2000. Our authorized capital stock consists of 100,000,000 shares of common stock, $.001 par value.

On December 15, 2000, we acquired the option rights to the Alpha License and marketing survey data from our founder and principal, Michael Rouse, in exchange for 10,000,000 shares of our common stock and his promotional services and out-of-pocket expenses over the past 18 months in acquiring the option from Alpha. We reserved 10,000,000 shares of our restricted common stock for Alpha to acquire the license. In July 2002, Alpha modified the agreement to allow us to acquire the license agreement in advance of completing our registration statement and accepted a note as payment for the licensing fee and for the issuance of 5,000,000 shares of common stock in lieu of the original 10,000,000 shares. We exercised our option and acquired the licensing rights on July 22, 2002 with a $250,000 promissory note payable to Alpha and the stock on July 22, 2002. The note has been extended until the earlier of August 23, 2005 or completion of funding this offering. Michael Rouse, our CEO, and Alpha each returned 5,000,000 shares to our treasury, reducing the outstanding shares to 11,197,000.Alpha held the core rights to the licensed technology which was licensed to us. The novel patents are registered in the name of Robert L. Scragg, the majority shareholder of Alpha.

We utilized a Regulation D, Rule 506 offering to raise a total of $258,500 from the sale of 500,000 shares of common stock. We currently intend to raise $2 million in capital from this SB-2 registration followed by a private placement for a minimum of $10 million to meet the terms and conditions of the option agreement which will not be pursued until completion of this offering. There is no assurance that we will be able to raise $10 million in the future. Failure to raise these funds would adversely affect us by causing delays in developing an engineered prototype which is necessary to secure a manufacturing partner for our engine. Alpha designs, constructs and tests prototypes derived from their core technology and license the technology to companies that have potential ability to commercialize the different applications. To date, Alpha has not licensed its technology to any company other than us, and there are no products on the market utilizing the Alpha technology. Our license is exclusive only as to manufacture, marketing and sales of heavy duty highway truck engines with power ranges from 300 to 1000 horsepower. Alpha is not precluded from licensing for other uses such as marine or in other horsepower ranges.

Our major asset is the ownership of an exclusive License from Alpha for manufacturing and marketing heavy duty highway truck engines utilizing Alpha’s “Detonation Cycle Gas Turbine Engine” (“DCGT”) technology embodied in U.S. Patent No. 6,000,214 and other proprietary technology and rights owned by Alpha including Marketing Survey Data in the highway trucking industry. Detonation refers to an instant burning of a fuel-air mixture producing an explosion. Cycle refers to the explosion happening in one chamber and then in another chamber, repeating over and over again. Gas is the fuel which is in a gaseous state. Turbine is a rotating wheel or disk connected to a shaft spinning in one direction. This combined process along with the EIC process creates the high efficiency, low emission engine that we intend to bring to market. The License was granted in exchange for shares of our restricted common stock and other considerations. If we do not pay the $250,000 note by August 23, 2005 or upon completion of the SB-2 public stock offering, we will be in default and lose the acquired license.

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Our Product

Our product will be a new energy-efficient, Detonation Cycle Gas Turbine Engine (“DCGT”) for heavy-duty highway trucks. To date, we have no marketable product and will rely on Alpha to design, construct and test a 540 horsepower prototype that will conform to our licensed application. Since our inception, we have continued to raise capital to bring this patented technology closer to where it can be utilized in a common market. The application demanding the most change is the highway trucking market.

Alpha is in the process of designing a 540 hp engine for use in highway trucks. Therefore compliance with state and federal regulators will not be a factor until we have an engineered prototype in a test vehicle, which is anticipated to be approximately three years from the completion of the funding of this offering. Alpha completed all research and development in 1997, which resulted in a patent being issued in 1999. Alpha has been at work drawing the design for the truck engine. We need only to design and test an engine that meets our needs using the existing proven technology, however, this takes a considerable amount of money.

Alpha will perform all design, construction, and testing of a 540 horsepower DCGT highway truck engine prototype at their facilities at Deland Industrial Center, 1601 Old Daytona Street, Deland, Florida 32724. Our primary role in this process is to ensure that Alpha complies with its contractual obligations to complete the design, construction and testing of the engine. Our use of proceeds has allocated funds to pay Alpha for its contractual obligations. All machine work is contracted out by Alpha while all component parts are purchased off the shelf or fabricated by Alpha at their facilities. Our company will be involved in this process only to the extent that we will receive ongoing status reports of Alphas’ progress. We will not participate in the design, construction and testing of the engine. Alpha may use independent contractors as it deems necessary to complete these functions. We are completely dependent on Alpha to complete this process (see “Risk Factors”.)

This offering is specifically limited to completing the design, construction and testing of the engine, therefore we will not focus on generating revenues from the marketing and distribution of the engine at this stage of the Company’s development. We have entered into an agreement with Alpha setting forth the contractual obligation to complete this process. In the event Alpha fails to complete this process, we will have to hire outside engineers to complete this process or we will cease business operations.

The patent is a novel patent with a 20-year life from the filing date of December 16, 1997. The patent was based on research and development beginning in 1984, which included the design, construction, and testing of four working prototypes. The patent attorneys were Schoemaker & Mattare Ltd. The inventor will file additional patents to protect any new developments in the engine technology. We will have access to any new patent filings on the highway truck engines as provided for in our licensing agreement.

This patent is impossible to describe in layman terms as to how it works; however, its simplicity makes it very unique. A detonation cycle gas turbine engine includes a turbine rotor contained in a housing. The exhaust ports of respective valveless combustion chambers are located on opposite sides of the rotor directing combustion gases toward the turbine. The chambers are connected by a valveless manifold fed with fuel and oxidizer. When combustible gases are detonated by an igniter in one of the combustion chambers, the back pressure from the detonation shuts off the fuel and oxidizer flow to that chamber and redirects the fuel and oxidizer to the opposite chamber, where detonation occurs. The process repeats cyclically. Power is taken off the rotor shaft mechanically or electrically.

The invention utilizes a water wheel as the turbine wheel which has blades that are positively displaced through a blade race by the rapid expansion of gases exiting from combustion chambers via nozzles, rather than pistons or gas turbines.

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Our engine has a blower, rather than a compressor, to supply less air per horsepower hour than required by existing gas turbines or piston engines, thereby producing less exhaust gases per horsepower hour.

The blower supplies low pressure air via a single manifold to two combustion chambers simultaneously thereby requiring less work to complete a detonation cycle, resulting in higher thermo mechanical efficiencies than gas turbines or piston engines.

The engine manifolds, combustion chambers, and ignition system has the capability of cyclically detonating fuel-air mixtures without using valves. The engine uses a fuel pump and vaporizers to gasify wet fuels prior to mixing with combustion air in the manifolds to produce complete combustion of all fuel-air mixtures in the detonation process. The engine uses a plasma arc ignition, a visibly constant illuminating plasma flame between two electrodes to detonate fuel-air mixtures and does not require critical ignition timing.

Low pressure air and fuel mixtures are detonated instantaneously–in less than one millisecond–producing high velocity shock waves that kinetically compress inert gases resulting in higher working pressures than the pressures produced in constant pressure heating utilized in gas turbine engines, and Otto and Diesel cycle piston engines.

The detonation cycle engine uses less working fluid and produces less exhaust gas per horsepower hour than Brayton cycle turbines and Otto or Diesel cycle piston engines.

Alpha has developed four working prototypes as described below:

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The DCGT includes an Electromagnetic Isothermal Combustion (“EIC”) process that powers the engine. The EIC process produces complete combustion of fuel-oxidizer mixtures in cyclic detonations that negate unwanted nitrogen oxide and carbon monoxide emissions. The high pressure gases produced by the detonations drive a unique turbine producing shaft horsepower.

The EIC process enables the DCGT to operate with blower air at low static pressure, negating the necessity of compressing and preheating fuel-oxidizer mixtures prior to combustion. By eliminating the compression of fuel-oxidizer mixtures, the DCGT achieves higher thermal efficiencies in a simplified mechanical structure. The DCGT has the following proprietary and competitive advantages over current diesel, gasoline and gas turbine engines:

Alpha has completed basic research, exploratory development, and advanced development with the design, construction and testing of four experimental prototype engines.

Our new energy efficient detonation cycle gas turbine can be designed and manufactured as a new or replacement engine for all heavy duty trucks that utilize engines ranging from 300 to 1,000 horsepower.

We intend to target 18 wheel class 8 vehicles commonly used for transporting goods throughout the United States for distribution of our engine. We will not require governmental approval until such time as the engine is placed in vehicles for use. Our engine will meet the new more stringent tailpipe emission requirements set forth by the Environmental Protection Agency (“EPA”).

Research and development of our engine was completed in 1998 with patents obtained in 1999. Through testing, we hope to be able to comply with existing and future environmental laws. We intend to supply our fuel efficient, lower emission engine to a marketplace that must comply with more stringent governmental regulations.

We acquired our license from Alpha on July 22, 2002. The term of the license agreement shall extend so long as the licensee is diligently developing or fully promoting, marketing, offering for sale or selling, using the licensed technology in the licensed field on a commercial basis or until the expiration of

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the licensed patents on December 16, 2017, whichever occurs first. In the event of breach, the license agreement can be terminated earlier. The material terms of the license agreement are as follows:

Other than being the licensor and a principal shareholder, we have no affiliation with Alpha.

Our Business Strategy

We plan to develop a prototype engine as soon as possible:

We are seeking an initial public offering of $2,000,000 to complete the following transactions:

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Alpha will own all developments, works or authorship, discoveries, inventions, mask works, improvements, and trade secrets, whether or not patentable or copyrightable, that are conceived, developed or reduced to practice, alone or jointly with others, and all associated intellectual property rights, in connection with the development of the DCGT engine prior to the formation of any potential joint venture (“Core Technology”), but will grant the joint venture a perpetual, worldwide, royalty-free, fully paid and exclusive license, with full rights to sublicense and assign, to utilize the Core Technology in the heavy duty truck industry. Alpha will own the Core Technology in other fields of use.

The Market

There is an unmet need for a new energy efficient detonation cycle gas turbine engine for heavy duty highway trucks in the first quarter of the 21^st Century. The following articles show the need and also show that current manufacturers do not have a new engine. For any of the current manufacturers to develop a new engine will cost them an estimated $3 billion.

Wall Street Journal, January 21, 2000: “Emissions standards governing diesel engine makers were tightened in 1998 and will be tightened further in 2002. Although diesel engines passed federal tests regarding emission of nitrogen oxide, highway tests found emission levels in actual use to be as much as three times the legal limit. Overall, it could cost the industry at least $3 billion to design a new engine able to strictly meet pollution requirements, according to Frost & Sullivan, a Mountain View, California consulting firm. Subroto Banerjee, director of Frost & Sullivan’s automotive group, said cleaner fuels alone won’t solve the basic problem. “The truck’s owner is going to pay for this, either up-front in the cost of the truck, or in the form of higher truck fuel costs.”

Wall Street Journal, October 1998: “Diesel-Engine Makers Agree to Penalty Over $1 Billion in EPA Pollution Case.” “The biggest makers of heavy diesel engines, Caterpillar, Cummins, Detroit Diesel, Mack Trucks, Navistar International and Volvo Truck agreed to pay a total of more than $1 billion to cover fines, investments in cleaner engines and other corrective actions to settle federal claims that they violated the federal Clean Air Act.”

Another major problem facing transcontinental trucking by the year 2010 is the potential absence of a single fuel source across the U.S. In an effort to clean up our air and reduce our dependency on foreign oil, the Department of Energy (“DOE”), Department of Transportation (“DOT”), and EPA are funding alternative fuels programs of all types: Compressed Natural Gas (“CNG”), Liquid Natural Gas (“LNG”), Liquid Petroleum Gas (“LPG”), Methanol-Gasoline (“M85”), and Ethanol-Gasoline (“E85”). These alternative fuel sources are being implemented nationwide.

Commercial transport vehicle operators are seeking new clean air engine technology for their specific needs. In the absence of a new energy efficient engine technology in the marketplace, major fleet operators are forced to switch to alternative fuels.

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In order to expedite our getting into the market, we must first demonstrate our engine’s capabilities through the design, construction and testing of our 540 horsepower prototype by Alpha.

Our Target Market

We will target heavy-duty highway trucks requiring 300 to 1000 horsepower engines. The DCGT truck engines will sell at an estimated price of $25,000.

Once the engine has been tested in a highway truck, it is our intention to sub-license our engine for manufacturing to current engine manufacturers in Europe and Asia and other parts of the world.

Current Competition

Seven major engine manufacturers, including Ford, Caterpillar, Cummins, Detroit Diesel, Mack Trucks, Navistar International and Volvo Truck manufacture heavy duty truck engines, both gasoline and diesel, which are the major competitors to our company.

Operations

To date, the Company has not commenced operations other than entering into agreements with Alpha and maintaining an office. The Company will utilize proceeds from this offering to fund its contractual obligation to Alpha and to continue to pay its administrative and manpower expenses.

On August 30, 2001, we entered into a consulting agreement with Bradford Capital, Inc. (“Bradford”), whereby Bradford would provide general advisory services to us for the purpose of strategic planning and assistance with mergers and acquisitions. Bradford Capital, Inc. is not a registered broker-dealer under Section 15 of the Securities Exchange Act of 1934. Mr. Simon is an investment banking consultant. His job was to introduce us to potential sources of debt or equity investment. The decision was made to file an SB-2 public offering to raise the capital needed. We paid Bradford an initial fee of $15,000 upon the execution of the agreement. As of the date of termination as hereinafter set forth, Bradford has not raised any funds nor located any merger or acquisition targets for us. As of May 5, 2004, both parties have terminated the consulting agreement and released each other from liability.

Vladan Ivankovic was given the position of Vice President of Sales and Marketing in Europe. Mr. Ivankovic has made many initial contacts for us, such as Volvo, Mercedes-Benz and many others. They all expressed interest once we were further along. Mr. Ivankovic will be compensated on funds raised. Based on a sliding scale starting at six percent of the first $25,000,000; five percent of the next $25,000,000; four percent of the next $25,000,000; and three percent of the remaining enterprise value. Mr. Ivankovic has been authorized to choose potential partners and to conduct negotiations on our behalf. As of December 31, 2003, Mr. Ivankovic has not raised any funds nor has he located any partners or mergers or acquisition targets for us.

On July 1, 2002, we entered into a consulting agreement with the inventor of the Detonation Cycle Gas Turbine engine and majority stockholder of Alpha. In connection with the license agreement, a $2,500 retainer per month is due for consulting services rendered. In addition, we agreed to pay the inventor $1,000 per day plus all out-of-pocket expenses for design and engineering services rendered. The inventor has not performed any design or engineering services for us. Alpha has been and continues to work on design drawings for a 540 horsepower engine.

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Employees

We presently have two full time employees. Staffing levels will be determined as we progress and grow. We also plan to add several employees to our staff. The level of employees is primarily contingent on the level of success of this offering. Our board of directors will determine the compensation of all new employees based upon job description.

Management’s Discussion and Analysis or Plan of Operation

The following discussion and analysis of our financial condition and plan of operations should be read in conjunction with our financial statements and related notes appearing elsewhere herein. This discussion and analysis contains forward-looking statements including information about possible or assumed results of our financial conditions, operations, plans, objectives and performance that involve risk, uncertainties and assumptions. The actual results may differ materially from those anticipated in such forward-looking statements. For example, when we indicate that we expect to increase our product sales and potentially establish additional license relationships, these are forward-looking statements. The words expect, anticipate, estimate or similar expressions are also used to indicate forward-looking statements.

Background of our company

We are a development-stage company and not yet generating any revenues. Although we will not generate any revenues at this stage of our development, we intend to generate future revenues from the sale of engines and taking purchase orders from different trucking companies. This, however, will not happen during this stage of the Company’s development. We expect to continue the commercialization of our Detonation Cycle Gas Turbine Engine (“DCGT”) technology. The licensor of the acquired technology has passed the research and development phase and has designed a working prototype. We need to redesign an engine for our application based on this proven Core Technology. We are relying on Alpha to design, construct and test a 540 horsepower engine prototype for our licensed application (see “Business of the Company”, “Our Product.”). Our primary focus is to complete this public offering of our securities for the purpose of funding initial stages of operations.

The financing for our development activities to date has come from the sale of common stock. We intend to finance our future development activities and working capital needs largely from the sale of public equity securities with additional funding from a private placement or secondary offering of up to $10 million or through other traditional financing sources, including term notes and proceeds from sub-licensing agreements until such time that funds provided by operations are sufficient to fund working capital requirements which will not be pursued until after the completion of this offering.

Since we have had a limited history of operations, we anticipate that our quarterly results of operations will fluctuate significantly for the foreseeable future. We believe that period-to-period comparisons of our operating results should not be relied upon as predictive of future performance. Our prospects must be considered in light of the risks, expenses and difficulties encountered by companies at an early stage of development, particularly companies commercializing new and evolving technologies such as the DCGT. In July 2002, we acquired the license for the DCGT technology for the manufacture and marketing of heavy-duty highway truck engine.

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The following steps are required to demonstrate the viability of a final prototype engine:

Step 1 of this process will be completed by Alpha in connection with performing the design and construction of the prototype engine at their facilities at Deland Industrial Center, 1601 Old Daytona Street, Deland, FL 32724. In Step 2, we will also rely on Alpha to test the prototype engine at their facilities. Alpha will conduct test demonstrations to show the viability and function of the engine. In Step 3, we intend to construct our own office and demonstration facilities. We will design a facility and hire a licensed general contractor to complete the project. All of these steps are intended to be funded from the proceeds of this Offering.

At this stage of our development, we have not developed a marketing plan to bring our product to market. No proceeds from this offering are being allocated to develop such a marketing plan and we are only focusing on completing this stage of our development. In the event we are unable to raise the funds from this offering or future offerings, we will be unable to continue any business operations.

These initial steps are intended to be completed with the funds from this Offering. Should we be unable to raise the funds from this Offering, we may attempt a private placement or other form of debt financing which would have to be obtained in order to continue as a going concern.

For the year ended December 31, 2003 compared to the year ended December 31, 2002

Operating Costs – During the years ended December 31, 2003 and 2002, operating costs totaled $178,944 and $55,975, respectively. The increase of $122,969 was attributable principally to salaries and wages and payroll taxes related to the addition of one officer, consulting expenses paid, insurance expense, and office space and other expenses.

Research and development costs – During the years ended December 31, 2003 and 2002, research and development costs totaled $0 and $2,735,649, respectively. The decrease of $2,735,649 was principally attributable to the acquisition of a license agreement in July 2002 in the amount of $2,735,649 which was expensed to research and development.

Interest Expense—Net—During the years ended December 1, 2003 and 2002 net interest expense totaled $11,623 and $5,144, respectively. The increase was due principally to additional interest expense in connection with the a note issued for the acquisition of the license agreement in July 2002.

The net loss for the years ended December 31, 2003 and 2002 of $(190,567) and $(2,796,768), respectively, decreased from the prior year by $2,606,201. The decrease in the net loss was mainly attributable to decrease in research and development costs during 2003.

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For the three months ended March 31, 2004 compared to the three months ended March 31, 2003

Operating Costs—During the three months ended March 31, 2004 and 2003, operating costs totaled $11,576 and $25,500, respectively. The decrease of $13,924 was attributable principally to a decrease in consulting expenses.

Interest Expense—Net—During the three months ended March 31, 2004 and 2003 net interest expense totaled $2,906 in each period.

The net loss for the three months ended March 31, 2004 of ($14,482) as compared to the three months ended March 31, 2003 of ($28,106) decreased by $13,624. The decrease in the net loss was mainly attributable to the decrease in consulting expenses.

Liquidity and capital resources

As previously mentioned, since inception, we have financed our operations largely from the sale of common stock. From inception through December 31, 2003 we raised cash of $224,726 net of issuance costs, through private placements of common stock financings. At December 31, 2003 and March 31, 2004 we had cash and cash equivalents totaling $2,513 and $6,531, respectively.

Since our inception through March 31, 2004 we have incurred approximately $3,017,962 of research and development costs and operating expenses. These expenses were principally related to the acquisition of a license agreement in July 2002 in the amount of $2,735,649, which was expensed to research and development costs for the DCGT technology and general and administrative expenses.

We have incurred significant net losses and negative cash flows from operations since our inception. As of December 31, 2003 and March 31, 2004, we had an accumulated deficit of approximately $3,023,153 and $3,037,635 and a working capital deficit of $312,868 and $351,752, respectively.

We anticipate that cash used in product development and operations, especially in the marketing, production and sale of our products, will increase significantly in the future.

We will be dependent upon our existing cash, together with anticipated net proceeds from this public offering and future debt issuances and private placements of common stock and potential license fees, to finance our planned operations through the next 12 months. Without receiving proceeds from this offering, we can satisfy our current cash requirements for approximately eight months. We will continue to proceed in the design and testing phase of the DCGT engine during the next 12 months and will require additional funding to continue operations. Also, with proceeds from this offering, we intend to secure a larger office, manufacturing and testing facility. Based on our anticipated growth, we plan to add several employees to our staff. The level of employees is primarily contingent on the level of success of this offering. The Report of Independent Certified Public Accountants included elsewhere in this Registration Statement includes a going concern modification.

Additional capital may not be available when required or on favorable terms. If adequate funds are not available, we may be required to significantly reduce or refocus our operations or to obtain funds through arrangements that may require us to relinquish rights to certain or potential markets, either of which could have a material adverse effect on our business, financial condition and results of operations. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of such securities would result in ownership dilution to our existing stockholders.

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New accounting pronouncements

In May 2003, FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. This statement addresses the accounting for certain financial instruments that, under previous guidance, could be accounted for as equity. SFAS 150 requires that those instruments be classified as liabilities in the statement of financial position. In addition, SFAS 150 also requires disclosures about alternative ways of settling the instruments and the capital structure of certain entities. Most of the guidance in SFAS 150 is effective for all financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. The adoption of this statement has had no material effect on the Company’s financial statements.

In January 2003, the FASB issued FIN 46, Consolidation of Variable Interest Entities (FIN 46). This interpretation of Accounting Research Bulletin No.51, “Consolidated Financial Statements,” addresses consolidation by business enterprises of certain variable interest entities where there is a controlling financial interest in a variable interest entity or where the variable interest entity does not have sufficient equity at risk to finance its activities without additional subordinated financial support from other parties. The interpretation applies immediately to variable interest entities created after January 31, 2003 and applies in the first year or interim period beginning after June 15, 2003 to variable interest entities in which an enterprise holds a variable interest that it acquired before February 1, 2003. We do not have any ownership in any variable interest entities as of December 31, 2003 or June 30, 2003. We will apply the consolidation requirement of FIN 46 in future periods if we should own any interest in any variable interest entity.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

We believe that the following critical policies affect our more significant judgments and estimates used in preparation of our financial statements.

The Company’s financial instruments include cash and cash equivalents, notes receivable and accounts payable. The carrying amounts of these financial instruments approximate their fair value, due to the short-term nature of these items. The carrying amount of the note payable approximates its fair value due to the use of market rates of interest.

Furniture and equipment are recorded at cost and depreciated on a declining balance and straight-line basis over their estimated useful lives, principally five to seven years. Accelerated methods are used for tax depreciation. Maintenance and repairs are charged to operations when incurred. Betterments and renewals are capitalized. When furniture and equipment are sold or otherwise disposed of, the asset account and related accumulated depreciation account are relieved, and any gain or loss is included in operations.

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The Company has incurred deferred offering costs in connection with raising additional capital through the sale of its common stock. These costs have been capitalized and will be charged against additional paid-in capital should common stock be issued. If there is no issuance of common stock, the costs incurred will be charged to operations.

Research and development costs are charged to operations when incurred and are included in operating expenses.

Description of Property

The Company’s executive offices are located at 1200 Flightline Boulevard, Suite 5, Deland, Florida 32724, where it currently leases space on a one-year lease for $5,112 per year. The property is new and is leased by an unrelated third party. We intend to use a portion of the proceeds from this offering to secure an office, manufacturing and testing facility.

Dividend Policy

We have not paid cash dividends on our common stock since inception. We currently intend to retain any future earnings for use in the expansion of the business, however, we do not intend to pay shareholder dividends. The declaration and payment of cash dividends, if any, will be at the discretion of the Board of Directors of the Company and will depend, among other things, upon our earnings, capital requirements, and financial condition.

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MANAGEMENT

Set forth below is certain information concerning the directors and executive officers of the Company.

Biographies

Michael Rouse is the founder of the Company and currently serves as its Chairman and Chief Executive Officer. Mr. Rouse is Vice President of Cox-Rouse Construction & Development Corporation, a commercial real estate developer located in Deland, Florida. Mr. Rouse is a commercial building contractor and developer, and licensed commercial aircraft pilot. Mr. Rouse was President of M&D Aircraft Leasing and Skydive Palatka, a successful parachute center, from October 1995 to June 2002, until he sold Skydive Palatka. He received his schooling in Management Training at United States Steel Corporation in 1975; Computer Programming at Daytona Beach Community College in 1993; and Science, Art and Drafting at Valpraiso Industrial Arts School in 1973. He is a former Production Manager for United States Steel, and General Manager of Freefall Express, Inc., an airplane leasing company, from 1989 to 1990.

Jay G. Hilden serves as the President, Chief Operating Officer and Director. Currently, he is the President of Sky Supplies, Inc., a designer and manufacturer of aircraft cargo nets and military parachute products and is an active vendor for the Defense Logistics Agency. He received a BS in Business Administration from the University of Central Florida in 1975 and has been involved in management for most of his business career. In addition, he has been involved in various aviation activities and exploration of coal, oil and gas properties personally owned in Kentucky.

James A. Teters, Jr. serves as a Director. Currently, Mr. Teters is Vice President and Regional Sales Manager for Aurum Technology, Orlando, Florida, responsible for identifying, qualifying, and sales for a complete line of products to financial institutions from December 2002 to present. Mr. Teters was President of Turbine Truck Engines where he developed, implemented and executed marketing and sales strategy for VC presentations from May 2002 to November 2002. Mr. Teters was Vice President, Sales for Incurrent Solutions, Inc., Orlando, Florida, responsible for identifying, strategizing and closing sales for ASP and in-house Internet based customer care from January 2001 to April 2002. Mr. Teters started as Regional Manager, Strategic Business Development responsible for specialty sales generated to target banks with $1-$10 billion in assets with a focus on outsourced core processing and was promoted to National Sales, Senior Sales Executive responsible for identifying, qualifying, strategizing and managing in-house and service bureau sales from December 1999—July 2000. Director of Business Development for Phoenix International, Inc., Heathrow, Florida, responsible for creating new sales opportunities and closing fourth generation client/server based banking software from January 1998—December 1999.

Phyllis J. Rouse serves as the Company’s Vice President, Secretary, Treasurer and as a Director. From 1997 to present, Mrs. Rouse is a public school administrator at Yulee Elementary School in Yulee,

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Florida. She has extensive administrative experience and training in accountability for all budgets, curriculum, student performance, personnel, facilities, discipline, while supervising over 70 personnel and 650 students on a daily basis. Mrs. Rouse is the sister-in-law of Michael Rouse.

Robert Adamo serves as a Director. Mr. Adamo is currently President of TAB Express International which was founded in 1992. TAB has become one of the premier flight schools in the country. TAB operates a fleet of turbine powered aircraft. TAB is currently in the start up phase of a new airline which will be flying city to city in Florida and to the Bahamas. The start up date is January 1, 2004. Mr. Adamo is a commercial rated pilot and mechanic with extensive background in the workings of turbine engines, having completed Pratt and Whitney Turbine School in 1998. He is a current Airframe and Powerplant mechanic and Inspection Authority, the highest rating you can receive from the Federal Aviation Administration.

Summary Compensation Table

The following table sets forth information concerning the aggregate compensation paid or to be paid by the Company to its executive officers.

We may hire additional executive employees and/or change the compensation paid to and benefits received by our current executive employees, as our Board of Directors deems advisable or necessary. We plan to reimburse our executive employees for all travel expenses incurred in connection with the business of the Company. To date, the Company’s Board of Directors has not adopted any retirement, pension, profit sharing or other similar programs for our executive employees.

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Future Compensation

Upon approval of our Board of Directors, we may increase the current levels of compensation to employees, officers, or directors either through the use of additional wages, incentive programs, restricted stock awards, or otherwise.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On October 31, 2000, the Company’s Chief Executive Officer, Michael Rouse, personally entered into a transaction whereby he was granted an option to acquire the exclusive use of the Alpha Technology for $250,000, 10,000,000 shares of our common stock and a royalty payment. On November 27, 2000, Mr. Rouse assigned his rights in the Option Agreement to the Company for 10,000,000 shares of common stock. The Option Agreement had no tangible value. 10,000,000 shares were issued at par value in exchange for the option. As of the date hereof, Mr. Rouse has returned 5,000,000 shares to the Company’s treasury for purposes of reducing dilution and strengthening the Company’s capital structure to help complete this offering. No consideration was provided. As of the date of this Prospectus, there are 11,197,000 shares issued and outstanding. Certain family members of Michael Rouse, our CEO, own shares of the Company.

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth certain information as of December 31, 2003, with respect to the beneficial ownership of our common stock by each beneficial owner of more than 5% of the outstanding shares of common stock of the Company, each director, each executive officer named in the “Summary Compensation Table” and all executive officers and directors of the Company as a group, and sets forth the number of shares of common stock owned by each such person and group. Unless otherwise indicated, the owners have sole voting and investment power with respect to their respective shares.

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DESCRIPTION OF SECURITIES

Common Stock

The authorized common stock of the Company consists of 100,000,000 shares, with each share having a par value of $.001. As of December 31, 2003 and March 31, 2004, there were 11,197,000 common shares issued and outstanding. There were approximately 51 holders of common stock as of December 31, 2003 and March 31, 2004.

Holders of common stock are entitled to one vote per share on all matters submitted to a vote of our shareholders and may not cumulate votes for the election of directors. Holders of the common stock have the right to receive dividends when, as, and if declared by the board of directors from funds legally available. Upon liquidation of the Company, holders of the common stock are entitled to share pro rata in any assets available for distribution to shareholders after payment of all obligations of the Company. Holders of common stock have no preemptive rights and have no rights to convert their common stock into any other securities. All shares of common stock have equal rights and preferences.

Other Securities

There are currently no preferred shares or other debt or equity securities issued, outstanding, or authorized.

Transfer Agent and Registrar

The Transfer Agent for the common stock is: Florida Atlantic Stock Transfer, Inc., 7130 Nob Hill Road, Tamarac, Florida 33321.

Where You Can Find Additional Information

For further information with respect to the Company and the shares offered hereby, reference is made to such registration statement, exhibits and schedules. A copy of the registration statement may be inspected by anyone without charge at the Commission’s principal office location at 450 Fifth Street, N.W., Washington, D.C. 20549 and copies of all or any part thereof may be obtained from the Public Reference Branch of the Commission upon the payment of certain fees prescribed by the Commission. You may also obtain information on the Public Reference Room by calling the SEC at 1-800-SEC-0330. The Commission also maintains a site at http://www.sec.gov that contains information regarding registrants that file electronically with the Commission.

PLAN OF DISTRIBUTION

We are offering 1,000,000 shares of common stock through our officers and directors on a “best efforts” basis at a purchase price of $2.00 per share. This offering will begin as of the date of this Prospectus and will expire whenever all of the shares are sold, or 12 months after the date of the Prospectus, whichever comes first. We are managing this offering without an underwriter. The shares will be offered and sold by our officers. These officers will not receive a sales commission or other compensation, except for reimbursement of expenses actually incurred on behalf of Turbine Truck Engines for such activities. In connection with their efforts, they will rely on the safe harbor provisions of Rule 3a4-1 of the Securities and Exchange Act of 1934. Generally speaking, Rule 3a4-1 provides an exemption from the broker/dealer registration requirements of the 1934 act for associated persons of an issuer. No one has made any commitment to purchase any or all of the shares. Rather, the officers and directors will use their best efforts to find purchasers for the shares. We cannot state how many shares will successfully be sold.

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We anticipate selling the shares to persons with whom we have pre-existing relationships and whom we believe may be interested or who have contacted us with interest in purchasing the securities. We may sell shares to such persons if they reside in a state in which the shares legally may be sold and in which we are permitted to sell the shares. We are not obligated to sell shares to any such persons. None of our officers or directors are subject to statutory disqualifications at the time of this offering as defined in Section 3(a)(39) of the Act. We have identified Georgia, Illinois, New York and Colorado as the initial states in which our securities may be sold. Sales in any additional states will be made in compliance with either the registration or exemption provision of each respective state’s blue sky laws.

We have agreed to establish an escrow account at SouthTrust Bank wherein funds will be held until such time as the minimum offering amount has been subscribed for. At that time, the funds will be disbursed to be used for our business operations. If we fail to raise the minimum, funds will be promptly returned to investors.

No person has been authorized to give any information or to make any representations in connection with this offering other than those contained in this Prospectus and if given or made, that information or representation must not be relied on as having been authorized by Turbine Truck Engines. This prospectus is not an offer to sell or a solicitation of an offer to buy any of the securities to any person in any jurisdiction in which that offer or solicitation is unlawful. Neither the delivery of this Prospectus nor any sale hereunder shall under any circumstances, create any implication that the information in this Prospectus is correct as of any date later than the date of this Prospectus.

Purchasers of shares either in this offering or in any subsequent trading market that may develop must be residents of states in which the securities are registered or exempt from registration. Some of the exemptions are self-executing, that is to say that there are no notice or filing requirements, and compliance with the conditions of the exemption render exemption applicable.

We reserve the right to reject any subscription in full or in part and to terminate this offering at any time. Once the minimum offering amount has been subscribed for, officers, directors, present stockholders of the Company and persons associated with them may purchase some of the shares. Officers and directors may not purchase shares to meet the minimum offering requirement. However, officers, directors, and their affiliates shall not be permitted to purchase more than 20% of the shares being sold and such purchases will be held for investment and not for resale. In addition, no proceeds from this offering will be used to finance any such purchases.

Disclosure of Commission Position On Indemnification For Securities Act Liabilities

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the small business issuer pursuant to the foregoing provisions, or otherwise, the small business issuer has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the small business issuer of expenses incurred or paid by a director, officer or controlling person of the small business issuer 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 small business issuer 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 the final adjudication of such issue.

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Market for Common Equity and Related Stockholder Matters

Prior to this offering, there has been no public market for our common stock. At the present time neither any National Securities Exchange nor the NASDAQ stock market lists the securities offered. There is no public trading market for the common stock of the Company. There are outstanding 11,197,000 common shares as of December 31, 2003. We are currently offering 1,000,000 common shares through this offering. There are no outstanding options, warrants to purchase or securities convertible into any of our common stock. We have registered no shares in this offering for any selling security holder. No additional shares will be eligible for sale which could have a material adverse effect on the market price of our securities.

LITIGATION

As of the date of this Prospectus, neither we nor any of our officers or directors is involved in any litigation either as plaintiffs or defendants. As of this date, there is not any threatened or pending litigation against us or any of our officers or directors.

LEGAL OPINIONS

The Law Offices of Mark C. Perry, P.A., located in Fort Lauderdale, Florida, has passed upon the validity of the issuance of our shares of common stock being offered.

EXPERTS

Our financial statements as of December 31, 2003 and the years ended December 31, 2003 and 2002, appearing in this Prospectus have been included in reliance on the report (which contains an explanatory paragraph relating to our ability to continue as a going concern as described in Note 2 to the 2003 financial statements) of Pender Newkirk & Company, independent auditors, given upon the authority of said firm as experts in auditing and accounting.

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Financial Statements

Turbine Truck Engines, Inc.

(A Development Stage Enterprise)

For the Years Ended December 31, 2003 and 2002,

the three months ended March 31, 2004 and 2003 (unaudited)

and the Period November 27, 2000 (Date of Inception)

through March 31, 2004 (unaudited)

Report of Independent Registered Public Accounting Firm

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Turbine Truck Engines, Inc.

(A Development Stage Enterprise)

Financial Statements

For the Years Ended December 31, 2003 and 2002,

the three months ended March 31, 2004 and 2003 (unaudited)

and the Period November 27, 2000 (Date of Inception)

through March 31, 2004 (unaudited)

Contents

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Report of Independent Registered Public Accounting Firm

Board of Directors

Turbine Truck Engines, Inc.

(A Development Stage Enterprise)

DeLand, Florida

We have audited the accompanying balance sheet of Turbine Truck Engines, Inc. (a development stage enterprise) as of December 31, 2003 and the related statements of operations, changes in stockholders’ deficit, and cash flows for the years ended December 31, 2003 and 2002. These financial statements are the responsibility of the management of Turbine Truck Engines, Inc. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). These standards require that we plan and perform the audits 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 financial position of Turbine Truck Engines, Inc. as of December 31, 2003 and the results of its operations and its cash flows for the years ended December 31, 2003 and 2002 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2, the Company incurred a net loss of $190,567 during the year ended December 31, 2003 and has an accumulated deficit of $3,023,153 from inception to December 31, 2003. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Pender Newkirk & Company

Certified Public Accountants

Tampa, Florida

March 12, 2004

F-1

Table of Contents

Turbine Truck Engines, Inc.

(A Development Stage Enterprise)

Balance Sheets

Liabilities and Stockholders’ Deficit

The accompanying notes are an integral part of the financial statements.

F-2

Table of Contents

Turbine Truck Engines, Inc.

(A Development Stage Enterprise)

Statements of Operations

The accompanying notes are an integral part of the financial statements.

F-3

Table of Contents

Turbine Truck Engines, Inc.

(A Development Stage Enterprise)

Statements of Changes in Stockholders’ Deficit

For the Years Ended December 31, 2003 and 2002,

the Three Months Ended March 31, 2004 (unaudited)

and the Period November 27, 2000 (Date of Inception)

through March 31, 2004 (unaudited)