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Aimrite Holdings Corp – ‘10KSB’ for 12/31/00 – EX-99.1

On: Friday, 11/23/01 · For: 12/31/00 · Accession #: 1019687-1-501221 · File #: 0-26237

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

11/23/01  Aimrite Holdings Corp             10KSB      12/31/00    2:77K                                    Publicease Inc/FA

Annual Report — Small Business — Form 10-KSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10KSB       Annual Report -- Small Business                       13     71K 
 2: EX-99.1     Miscellaneous Exhibit                                 19     88K

EX-99.1 — Miscellaneous Exhibit

EX-99.1 1st Page of 19 TOC ↑Top Previous Next ↓Bottom Just 1st
 
AIMRITE HOLDINGS CORPORATION
 (A DEVELOPMENT STAGE COMPANY)

FINANCIAL STATEMENTS

 DECEMBER 31, 2000

F-1 

EX-99.1 2nd Page of 19 TOC 1st Previous Next ↓Bottom Just 2nd
 C O N T E N T S

Independent Auditors' Report................................................F-3 

Balance Sheet...............................................................F-4 

Statements of Operations....................................................F-6 

Statements of Stockholders' Equity (Deficit)................................F-7 

Statements of Cash Flows....................................................F-11

Notes to the Financial Statements...........................................F-13

F-2 

EX-99.1 3rd Page of 19 TOC 1st Previous Next ↓Bottom Just 3rd
INDEPENDENT AUDITORS' REPORT
----------------------------

Board of Directors                                                              
Aimrite Holdings Corporation                                                    
(A Development Stage Company)                                                   
Solana Beach, California                                                        

We have audited the accompanying balance sheet of Aimrite Holdings Corporation  
(a development stage company) as of December 31, 2000 and the related statements
of operations, stockholders' equity (deficit) and cash flows for the years ended
December 31, 2000 and 1999 and from the inception of the development stage on   
January 1, 1997 through December 31, 2000. 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 auditing standards generally accepted
in the United States of America. Those 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 Aimrite Holdings Corporation (a
development stage company) as of December 31, 2000 and the results of its       
operations and its cash flows for the years ended December 31, 2000 and 1999 and
from the inception of the development stage on January 1, 1997 through December 
31, 2000 in conformity with accounting principles generally accepted in the     
United States of America.                                                       

The accompanying financial statements have been prepared assuming the Company   
will continue as a going concern. As discussed in Note 4 to the financial       
statements, the Company has suffered recurring losses from operations and has no
established source of revenue which raises substantial doubt about its ability  
to continue as a going concern. Management's plan in regard to these matters is 
also described in Note 4. The financial statements do not include any           
adjustments that might result from the outcome of this uncertainty.             

HJ & Associates, LLC                                                            
Salt Lake City, Utah                                                            
October 15, 2001                                                                

F-3 

EX-99.1 4th Page of 19 TOC 1st Previous Next ↓Bottom Just 4th
AIMRITE HOLDINGS CORPORATION
 (A Development Stage Company)
 Balance Sheet

ASSETS
------

                                                                    December 31,
                                                                    2000
                                                                      ----------
CURRENT ASSETS                                                                  

  Cash                                                               $   6,842
                                                                      ----------

    Total Current Assets                                                 6,842
                                                                      ----------

PROPERTY AND EQUIPMENT                                                          

  Leasehold improvements                                                39,724
  Equipment                                                             38,135
  Furniture and office equipment                                        48,254
   Less accumulated depreciation                                        (31,299)
                                                                      ----------

    Total Property and Equipment                                        94,814
                                                                      ----------

OTHER ASSETS                                                                    

  Deposits                                                               6,547
                                                                      ----------

    Total Other Assets                                                   6,547
                                                                      ----------

    TOTAL ASSETS                                                     $ 108,203
                                                                      ==========

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

F-4 

EX-99.1 5th Page of 19 TOC 1st Previous Next ↓Bottom Just 5th
AIMRITE HOLDINGS CORPORATION
 (A Development Stage Company)
 Balance Sheet (Continued)

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------

                                                                  December 31,
                                                                    2000
                                                                   -------------

CURRENT LIABILITIES                                                             

  Accounts payable                                                $     63,795
  Accrued interest (Note 5)                                             51,117
  Note payable - related party (Note 5)                                763,095
                                                                   -------------

    Total Current Liabilities                                          878,007
                                                                   -------------

STOCKHOLDERS' EQUITY (DEFICIT)                                                  

Preferred stock, $0.001 par value; authorized 50,000,000                  
   shares; 73,000 shares issued and outstanding                             72
Common stock, $0.001 par value: authorized 100,000,000                    
   shares; 38,852,964 shares issued and outstanding                     38,855
  Additional paid-in capital                                        18,057,204
   Accumulated deficit                                                  (49,484)
   Deficit accumulated during the development stage                 (18,816,451)
                                                                   -------------

     Total Stockholders' Equity (Deficit)                              (769,804)
                                                                   -------------

    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)          $    108,203
                                                                   =============

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

F-5 

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                                                        [Enlarge/Download Table]

                                    AIMRITE HOLDINGS CORPORATION                                  
                                    (A Development Stage Company)                                 
                                      Statements of Operations                                    



                                                                                    From the      
                                                                                 Beginning of the 
                                                                                   Development    
                                                     For the                        Stage on      
                                                    Years Ended                     January 1,    
                                                    December 31,                   1997 Through   
                                      ----------------------------------------     December 31,   
                                              2000                1999                  2000      
                                      -------------------  -------------------  ------------------
                                                                                                  
REVENUE                               $                -   $                -   $               - 
                                      -------------------  -------------------  ------------------

EXPENSES                                                                                          

   General and administrative                  1,392,011            4,018,743          10,126,422 
   Research and development                      467,120              660,688           1,271,350 
   Depreciation expense                           25,056                6,243              31,299 
                                      -------------------  -------------------  ------------------

     Total Expenses                            1,884,187            4,685,674          11,429,071 
                                      -------------------  -------------------  ------------------

LOSS BEFORE OTHER INCOME                                                                          
 (EXPENSES)                                   (1,884,187)          (4,685,674)        (11,429,071)
                                      -------------------  -------------------  ------------------

OTHER INCOME (EXPENSES)                                                                           

   Interest income                                   713               13,475              14,188 
   Interest expense                             (178,972)              (6,085)         (1,439.278)
   Loss on valuation of assets                         -                    -          (6,202,308)
                                      -------------------  -------------------  ------------------

     Total Other Income (Expenses)              (178,259)               7,390          (7,516,287)
                                      -------------------  -------------------  ------------------

LOSS BEFORE EXTRAORDINARY                                                                         
 INCOME                                       (2,062,446)          (4,678,284)        (18,945,358)
                                      -------------------  -------------------  ------------------

EXTRAORDINARY INCOME                                                                              

   Gain on debt release                                -                    -             128,907 
                                      -------------------  -------------------  ------------------

     Total Extraordinary Income                        -                    -             128,907 
                                      -------------------  -------------------  ------------------

NET LOSS                              $       (2,062,446)  $       (4,678,284)  $     (18,816,451)
                                      ===================  ===================  ==================

BASIC LOSS PER SHARE (Note 2)         $            (0.06)  $            (0.16)                    
                                      ===================  ===================                    

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

                                                F-6                                               

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                                                        [Enlarge/Download Table]

                                                   AIMRITE HOLDINGS CORPORATION                                                     
                                                   (A Development Stage Company)                                                    
                                           Statements of Stockholders' Equity (Deficit)                                             


                                              Preferred Stock          Common Stock         Additional      Stock                   
                                            --------------------- ------------------------    Paid-In    Subscription   Accumulated 
                                              Shares     Amount      Shares       Amount      Capital     Receivable      Deficit   
                                            ---------- ---------- ------------ ----------- ------------- ------------  -------------
                                                                                                                                    
Balance, December 31, 1996                          -  $       -    8,926,001  $    8,926  $    692,551  $         -   $    (49,484)

February 12, 1997 common stock issued                                                                                               
 for Licensing Agreement at $0.63 per share         -          -    2,000,000       2,000     1,252,643            -              - 

February 12, 1997 common stock issued                                                                                               
 for cash at $0.07 per share                        -          -       27,773          28        14,972            -              - 

February 24, 1997 common stock issued                                                                                               
 for cash at $0.07 per share                        -          -       14,546          15         7,985            -              - 

June 5, 1997 common stock issued                                                                                                    
 for cash at $0.07 per share                        -          -      400,000         400         7,600            -              - 

Cancellation of investment in subsidiary            -          -            -           -     4,633,918            -              - 

Common stock issued for consulting                                                                                                  
 fees at $0.10 per share                            -          -    1,054,275       1,054       104,373            -              - 

Net loss for the year ended                                                                                                         
 December 31, 1997                                  -          -            -           -             -            -       (892,913)
                                            ---------- ---------- ------------ ----------- ------------- ------------  -------------

Balance, December 31, 1997                          -          -   12,422,595      12,423     6,714,042            -       (942,397)

January 2, 1998 common stock issued                                                                                                 
 for services  at $0.18 per share                   -          -    3,500,000       3,500       626,500            -              - 

March 2, 1998 common stock issued                                                                                                   
 for services at $1.50 per share                    -          -    2,000,000       2,000     2,998,000            -              - 

April 30, 1998 common stock issued for                                                                                              
 consulting fees at $1.00 per share                 -          -      120,010         120       119,890            -              - 

September 11, 1998 common stock issued                                                                                              
 for consulting fees at $0.25 per share             -          -       40,000          40         9,960            -              - 
                                            ---------- ---------- ------------ ----------- ------------- ------------  -------------
Balance Forward                                     -  $       -   18,082,605  $   18,083  $ 10,468,392  $         -   $   (942,397)
                                            ---------- ---------- ------------ ----------- ------------- ------------  -------------

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

                                                     F-7                                                                            

EX-99.1 8th Page of 19 TOC 1st Previous Next ↓Bottom Just 8th
                                                   AIMRITE HOLDINGS CORPORATION                                                     
                                                   (A Development Stage Company)                                                    
                                     Statements of Stockholders' Equity (Deficit) (Continued)                                       

                                               Preferred Stock          Common Stock        Additional      Stock                   
                                            --------------------- ------------------------    Paid-In    Subscription   Accumulated 
                                              Shares     Amount      Shares       Amount      Capital     Receivable      Deficit   
                                            ---------- ---------- ------------ ----------- ------------- ------------  -------------

Balance Forward                                     -  $       -   18,082,605  $   18,083  $ 10,468,392  $         -   $   (942,397)

September 11, 1998 common stock issued                                                                                              
 for loan and interest conversion at $0.25                                                                                          
 per share                                          -          -    6,000,000       6,000     1,494,000            -              - 

October 16, 1998 common stock issued                                                                                                
 for consulting fees at $0.19 per share             -          -      375,000         375        70,875            -              - 

November 3, 1998 common stock issued                                                                                                
 for subscription receivable at $0.10                                                                                               
 per share                                          -          -    2,500,000       2,500       247,500    (250,000)              - 

Net loss for the year ended                                                                                                         
 December 31, 1998                                  -          -            -           -             -            -    (11,182,808)
                                            ---------- ---------- ------------ ----------- ------------- ------------  -------------

Balance, December 31, 1998                          -          -   26,957,605      26,958    12,280,767     (250,000)   (12,125,205)

March 4, 1999 common stock issued                                                                                                   
 for cash at $0.25 per share                        -          -    2,000,000       2,000       498,000            -              - 

May 27, 1999 payment received on stock                                                                                              
 subscription receivable                            -          -            -           -             -      250,000              - 

June 16, 1999 preferred stock issued                                                                                                
 for cash at $2.00 per share                   38,000         38            -           -        75,962            -              - 

July 30, 1999 preferred stock issued                                                                                                
 for cash at $1.89 per share                  211,640        212            -           -       399,789            -              - 

July 30, 1999 preferred stock issued                                                                                                
 for cash at $2.00 per share                   35,000         35            -           -        69,965            -              - 

July 30, 1999 preferred stock issued                                                                                                
 for cash at $2.00 per share                  159,936        160            -           -       319,712            -              - 

Net loss for the year ended                                                                                                         
 December 31, 1999                                  -          -            -           -             -            -     (4,678,284)
                                            ---------- ---------- ------------ ----------- ------------- ------------  -------------

Balance, December 31, 1999                    444,576  $     444   28,957,605  $   28,958  $ 13,644,195  $         -   $(16,803,489)
                                            ---------- ---------- ------------ ----------- ------------- ------------  -------------

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

                                                     F-8                                                                            

EX-99.1 9th Page of 19 TOC 1st Previous Next ↓Bottom Just 9th
                                                   AIMRITE HOLDINGS CORPORATION                                                     
                                                   (A Development Stage Company)                                                    
                                     Statements of Stockholders' Equity (Deficit) (Continued)                                       

                                               Preferred Stock          Common Stock        Additional      Stock                   
                                            --------------------- ------------------------    Paid-In    Subscription   Accumulated 
                                              Shares     Amount      Shares       Amount      Capital     Receivable      Deficit   
                                            ---------- ---------- ------------ ----------- ------------- ------------  -------------

Balance, December 31, 1999                    444,576  $     444   28,957,605  $   28,958  $ 13,644,195  $         -   $(16,803,489)

February 24, 2000 common stock issued                                                                                               
 for debt at $1.39 per share                        -          -    2,175,000       2,175     3,021,075            -              - 

February 24, 2000 common stock issued                                                                                               
 for services at $1.39 per share                    -          -       80,000          80       111,120            -              - 

March 31, 2000 common stock issued                                                                                                  
 for debt at $1.33 per share                        -          -       15,000          15        19,935            -              - 

March 31, 2000 common stock issued                                                                                                  
 for services at $1.33 per share                    -          -      537,000         537       713,673            -               -

May 22, 2000 common stock issued                                                                                                    
 for debt at $1.94 per share                        -          -        9,995          10        19,379            -              - 

July 30, 2000 preferred stock canceled                                                                                              
 and converted to common stock               (211,640)      (212)     211,640         212             -            -              - 

September 2000 common stock issued for                                                                                              
 convertible debenture at $0.2025 to                                                                                                
 $0.21 per share                                    -          -      482,716         483        99,517            -              - 

September 2000 common stock issued                                                                                                  
 for interest at $0.76 to $1.37 per share           -          -          291           -           302            -              - 

September 2000 expense for discount                                                                                                 
on convertible debenture                            -          -            -           -        66,666            -              - 

October 2000 common stock issued for                                                                                                
 convertible debenture at $0.12 to $0.15                                                                                            
 per share                                          -          -      752,084         752        99,248            -              - 
                                            ---------- ---------- ------------ ----------- ------------- ------------  -------------

Balance Forward                               232,936  $     232   33,221,331  $   33,222  $ 17,785,110  $         -   $(16,803,489)
                                            ---------- ---------- ------------ ----------- ------------- ------------  -------------

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

                                                     F-9                                                                            

EX-99.1 10th Page of 19 TOC 1st Previous Next ↓Bottom Just 10th
                                                   AIMRITE HOLDINGS CORPORATION                                                     
                                                   (A Development Stage Company)                                                    
                                     Statements of Stockholders' Equity (Deficit) (Continued)                                       

                                               Preferred Stock          Common Stock        Additional      Stock                   
                                            --------------------- ------------------------    Paid-In    Subscription   Accumulated 
                                              Shares     Amount      Shares       Amount      Capital     Receivable      Deficit   
                                            ---------- ---------- ------------ ----------- ------------- ------------  -------------

Balance Forward                               232,936  $     232   33,221,331  $   33,222  $ 17,785,110  $         -   $(16,803,489)

October 2000 common stock issued for                                                                                                
 interest at $0.24 to $0.35 per share               -          -        1,047           1           283            -              - 

October 25, 2000 expense for discount                                                                                               
 on convertible debenture                           -          -            -           -        33,333            -              - 

November 2000 common stock issued for                                                                                               
 convertible debenture at $0.03 to                                                                                                  
 $0.1125 per share                                  -          -    2,472,551       2,474       117,526            -              - 

November 2000 common stock issued for                                                                                               
 interest at $0.04 to $0.12 per share               -          -        5,085           5           274            -              - 

November 22, 2000 expense for discount                                                                                              
 on convertible debenture                           -          -            -           -        33,333            -              - 

November 30, 2000 preferred stock canceled                                                                                          
 and converted to common stock               (159,936)      (160)     159,936         160             -            -              - 

December 2000 common stock issued for                                                                                               
 convertible debenture at $0.0165 to                                                                                                
 $0.03 per share                                    -          -    2,984,201       2,984         77,016           -              - 

December 2000 common stock issued for                                                                                               
 interest at $0.02 to $0.09 per share               -          -        8,813           9           329            -              - 

Net loss for the year ended                                                                                                         
 December 31, 2000                                  -          -            -           -             -            -     (2,062,446)
                                            ---------- ---------- ------------ ----------- ------------- ------------  -------------

Balance, December 31, 2000                     73,000  $      72   38,852,964  $   38,855  $ 18,057,204  $         -   $(18,865,935)
                                            ========== ========== ============ =========== ============= ============  =============

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

                                                     F-10                                                                           

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                                                        [Enlarge/Download Table]

                                     AIMRITE HOLDINGS CORPORATION                                      
                                     (A Development Stage Company)                                     
                                       Statements of Cash Flows                                        


                                                                                          From the     
                                                                                       Beginning of the
                                                                                         Development   
                                                               For the                     Stage on    
                                                              Years Ended                 January 1,   
                                                              December 31,               1997 Through  
                                                      ------------------------------      December 31, 
                                                          2000              1999              2000     
                                                      ------------      ------------      ------------ 
                                                                                                       
CASH FLOWS FROM OPERATING ACTIVITIES                                                                   

   Net loss                                           $(2,062,446)      $(4,678,284)      $(18,816,451)
   Adjustment to reconcile net loss to net                                                             
    cash used in operating activities:                                                                 
     Stock issued for services and interest                                                            
      expense                                             825,411                 -         5,872,098  
     Debt forgiveness                                           -                 -          (128,907) 
     Write-off of subsidiary receivable                         -                 -           651,980  
     Depreciation                                          25,056             6,243            31,299  
     Loss on valuation of assets                                -                 -         6,202,308  
     Beneficial conversion feature                        133,332                 -           133,332  
   Changes in operating assets and liabilities:                                                        
     Increase (decrease) in accounts payable              (43,791)        3,167,651         3,128,830  
     Increase (decrease) in accrued liabilities            46,234            (4,685)         (153,796) 
     (Increase) in deposits                                     -            (6,547)           (6,547) 
                                                      ------------      ------------      ------------ 

       Net Cash  Used In Operating Activities          (1,076,204)       (1,515,622)       (3,085,854) 
                                                      ------------      ------------      ------------ 

CASH FLOWS FROM INVESTING ACTIVITIES                                                                   

   Purchase of property and equipment                     (44,034)          (82,079)         (126,113) 
                                                      ------------      ------------      ------------ 

       Net Cash Used in Investing Activities              (44,034)          (82,079)         (126,113) 
                                                      ------------      ------------      ------------ 

CASH FLOWS FROM FINANCING ACTIVITIES                                                                   

   Payment on notes payable                               (14,985)          (39,229)          (54,214) 
   Proceeds from notes payable                                  -                 -           471,043  
   Payments on notes payable - related party              (76,119)                -           (76,119) 
   Proceeds from notes payable - related party            629,345           209,869           839,214  
   Proceeds from issuance of preferred stock                    -           865,872           865,872  
   Proceeds from issuance of common stock                 400,000           500,000           923,000  
   Proceeds from stock subscription receivable                  -           250,000           250,000  
                                                      ------------      ------------      ------------ 

       Net Cash Provided by Financing Activities          938,241         1,786,512         3,218,796  
                                                      ------------      ------------      ------------ 

NET INCREASE (DECREASE) IN CASH                          (181,997)          188,811             6,829  

CASH, BEGINNING OF PERIOD                                 188,839                28                13  
                                                      ------------      ------------      ------------ 

CASH, END OF PERIOD                                   $     6,842       $   188,839       $     6,842  
                                                      ============      ============       ============

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

                                                F-11                                                   

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                                              AIMRITE HOLDINGS CORPORATION                             
                                             (A Development Stage Company)                             
                                          Statements of Cash Flows (Continued)                         

                                                                                          From the     
                                                                                       Beginning of the
                                                                                         Development   
                                                               For the                     Stage on    
                                                              Years Ended                 January 1,   
                                                              December 31,               1997 Through  
                                                      ------------------------------      December 31, 
                                                          2000              1999              2000     
                                                      ------------      ------------      ------------ 
CASH PAID FOR:                                                                                         

   Interest                                           $     9,000       $     1,400       $    10,400  
   Income taxes                                       $         -       $         -       $         -  

NON-CASH FINANCING ACTIVITIES:                                                                         

   Stock issued for services and interest expense     $   825,411       $         -       $ 5,872,098  
   Stock issued for debt conversion and interest      $   401,202       $         -       $   801,202  
   Stock issued for debt                              $ 3,062,589       $         -       $ 3,062,589  

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

                                                F-12                                                   

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AIMRITE HOLDINGS CORPORATION
 (A Development Stage Company)
 Notes to the Financial Statements
December 31, 2000 and 1999

NOTE 1 -      ORGANIZATION AND HISTORY                                          

              The Company was organized September 6, 1888 as a Q-Com Corp. under
            the laws of the State of Nevada. On March 31, 1995, its name was
              changed to Drink World, Inc. On July 21, 1995, the Company changed
its name to Aimrite Holdings Corporation (AHC).     

         On July 24, 1995, the stockholders approved a 2-for-1 forward
         stock split and approved changing the par value from $0.01 to
          $0.001. The Company changed the authorized number of shares of
          common stock to 50,000,000 and authorized 10,000,000 shares of
preferred stock at $0.001 par value.                

           On July 25, 1995, the Company issued 8,000,000 shares of common
              stock to acquire an 80% interest in Aimrite Systems International,
Inc. (ASI)                                          

         During 1996, AHC issued 676,000 shares of common stock to pay
            debts of ASI. The Company also approved a 1-for-20 reverse stock
split.                                              

             On February 5, 1997, the stockholders approved "spinning-off" the
             subsidiary, ASI, effective February 12, 1997. AHC acquired all of
            the assets, except patents, and all of the liabilities of ASI by
              returning 1,105,080 shares of ASI common stock to ASI. The Company
       also gave 1,753,400 shares of ASI stock to acquire a master
              marketing agreement and 426,548 shares for a master license to use
             the patents. An additional 2,000,000 shares of AHC stock was used
            to acquire the license and marketing agreements. Under the terms
            of the license and marketing agreements, AHC will also pay an 8%
        royalty for the right to manufacture and market the computer
          controlled shock absorber system and a computer controlled air
suspension system developed by ASI.                 

   On October 9, 1999, the Company amended the articles of
        incorporation to increase the authorized number of shares of
           common stock and preferred stock to 100,000,000 and 50,000,000,
   respectively, while maintaining their $0.001 par value.

NOTE 2 -      SIGNIFICANT ACCOUNTING POLICIES AND PROCEDURES                    

Accounting Method                                   
-----------------                                   

             The Company uses the accrual method of accounting and has adopted
a December 31 year end.                             

Basic Loss Per Share                                
--------------------                                

              The computations of basic loss per share of common stock are based
              on the weighted average number of common shares outstanding during
the period of the financial statements as follows:  

                                                                [Download Table]

                                                       For the Years Ended        
                                                           December 31,           
                                                  ------------------------------- 
                                                       2000              1999     
                                                  -------------     ------------- 
                                                                                  
Basic loss per share from continuing operations:                                  

Loss (numerator)                                  $  (2,062,446)    $  (4,678,284)
Shares (denominator)                                 32,312,148        28,612,400 
Per share amount                                  $       (0.06)    $       (0.16)

F-13

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AIMRITE HOLDINGS CORPORATION
 (A Development Stage Company)
 Notes to the Financial Statements
December 31, 2000 and 1999

NOTE 2 -      SIGNIFICANT ACCOUNTING POLICIES AND PROCEDURES (Continued)        

Provision for Taxes                                 
-------------------                                 

              No provision for income taxes has been accrued because the Company
           has net operating losses from inception. The net operating loss
          carryforwards of approximately $6,871,000 at December 31, 2000
            expire in 2002 through 2020. No tax benefit has been reported in
            the financial statements because the Company is uncertain if the
            carryforwards will expire unused. Accordingly, the potential tax
          benefits are offset by a valuation account of the same amount.

              The income tax benefit differs from the amount computed at federal
statutory rates of approximately 38% as follows:    

                                                   For the Years Ended
                                                    December 31,
                                                  ----------------------------
                                                   2000           1999
                                                   -------------- --------------

              Income tax benefit at statutory rate $    (783,729) $    (574,041)
             Change in valuation allowance              783,729        574,041
                                                   -------------- --------------

                                             $      -       $      -
                                                   ============== ==============

             Deferred tax assets (liabilities) are comprised of the following:

                                                   For the Years Ended
                                                    December 31,
                                                  ----------------------------
                                                   2000           1999
                                                   -------------- --------------

              Income tax benefit at statutory rate $  (2,610,962) $  (1,827,233)
             Change in valuation allowance            2,610,962      1,827,233
                                                   -------------- --------------

                                             $      -       $      -
                                                   ============== ==============

              Due to the change in ownership provisions of the Tax Reform Act of
         1986, net operating loss carryforwards for Federal income tax
          reporting purposes are subject to annual limitations. Should a
              change in ownership occur, net operating loss carryforwards may be
limited as to use in future years.                  

Cash and Cash Equivalents                           
-------------------------                           

         For purposes of financial statement presentation, the Company
            considers all highly liquid investments with a maturity of three
             months or less, from the date of purchase to be cash equivalents.

Use of Estimates                                    
----------------                                    

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

F-14

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AIMRITE HOLDINGS CORPORATION
 (A Development Stage Company)
 Notes to the Financial Statements
December 31, 2000 and 1999

NOTE 2 -      SIGNIFICANT ACCOUNTING POLICIES AND PROCEDURES (Continued)        

Valuation Allowance                                 
-------------------                                 

     The Company evaluates the recoverability of the marketing
        agreement and other intangible assets such as technology and
             drawings, and reviews the amortization period on an annual basis.
            Several factors are used to evaluate their assets, including but
            not limited to: management's plans for future operations, recent
         operating results and projected, undiscounted cash flows. The
             Company has established a valuation allowance of $6,202,308 which
             relates to the recoverability of the Company's intangible assets.

Advertising                                         
-----------                                         

   The Company follows the policy of charging the costs of
      advertising to expense as incurred. During the years ended
        December 31, 2000 and 1999, the Company expensed $10,981 and
$64,758, respectively, for advertising costs.       

Property and Equipment                              
----------------------                              

             Property and equipment are stated at cost. Expenditures for small
             tools, ordinary maintenance and repairs are charged to operations
          as incurred. Major additions and improvements are capitalized.
       Depreciation is computed using the straight-line and double
            declining balance method over estimated useful lives as follows:

            Leasehold improvements                  10 years
              Furniture and office equipment          5-10 years

          Depreciation expense for the years ended December 31, 2000 and
1999 was $25,056 and $6,243, respectively.          

Revenue Recognition                                 
-------------------                                 

    The Company currently has no source of revenues. Revenue
             recognition policies will be determined when principal operations
begin.                                              

Research and Development                            
------------------------                            

   The Company follows the policy of charging research and
development costs to expense as incurred.           

Change in Accounting Principle                      
------------------------------                      

            The Company has adopted the provisions of FASB Statement No. 138
      "Accounting for Certain Derivative Instruments and Hedging
              Activities, (an amendment of FASB Statement No. 133.)" Because the
          Companies had adopted the provisions of FASB No. 133, prior to
              June 15, 2000, this statement is effective for all fiscal quarters
             beginning after June 30, 2000. The adoption of this principle had
     no material effect on the Company's financial statements.

F-15

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AIMRITE HOLDINGS CORPORATION
 (A Development Stage Company)
 Notes to the Financial Statements
December 31, 2000 and 1999

NOTE 2 -      SIGNIFICANT ACCOUNTING POLICIES AND PROCEDURES (Continued)        

Change in Accounting Principle (Continued)          
------------------------------                      

            The Company has adopted the provisions of FASB Statement No. 140
           "Accounting for Transfers and Servicing of Financial Assets and
           Extinguishments of Liabilities (a replacement of FASB Statement
       No. 125.)" This statement provides accounting and reporting
        standard for transfers and servicing of financial assets and
        extinguishments of liabilities. Those standards are based on
          consistent application of a financial-components approach that
              focuses on control. Under that approach, the transfer of financial
             assets, the Company recognized the financial and servicing assets
         it controls and the liabilities it has incurred, derecognizes
   financial assets when control has been surrendered, and
      derecognizes liabilities when extinguished. This statement
         provides consistent standards for distinguishing transfers of
           financial assets that are sales from transfers that are secured
     borrowings. This statement is effective for transfers and
            servicing of financial assets and extinguishments of liabilities
           occurring after March 31, 2001. This statement is effective for
              recognition and reclassification of collateral and for disclosures
             relating to securitization transactions and collateral for fiscal
      years ending after December 15, 2000. The adoption of this
       principle had no material effect on the Company's financial
statements.                                         

            The Company has adopted the provisions of FIN 44 "Accounting for
 Certain Transactions Involving Stock Compensation (an
          interpretation of APB Opinion No. 25.)" This interpretation is
       effective July 1, 2000. FIN 44 clarifies the application of
           Opinion No. 25 for only certain issues. It does not address any
         issues related to the application of the fair value method in
       Statement No. 123. Among other issues, FIN 44 clarifies the
           definition of employee for purposes of applying Opinion 25, the
  criteria for determining whether a plan qualifies as a
       noncompensatory plan, the accounting consequence of various
            modifications to the terms of a previously fixed stock option or
              award, and accounting for an exchange of stock compensation awards
            in a business combination. The adoption of this principle had no
  material effect on the Company's financial statements.

Pronouncements Issued Not Yet Adopted               
-------------------------------------               

              In July, 2001, the Financial Accounting Standards Board issued two
            statements - Statement 141, BUSINESS COMBINATIONS, and Statement
             142, GOODWILL AND OTHER INTANGIBLE ASSETS, which will potentially
         impact the Company's accounting for its reported goodwill and
other intangible assets.                            

Statement 141:                                      

           o     Eliminates the pooling method for accounting for business
combinations.                           

            o     Requires that intangible assets that meet certain criteria
be reported separately from goodwill.   

    o     Requires negative goodwill arising from a business
            combination to be recorded as an extraordinary gain.

Statement 142:                                      

   o     Eliminates the amortization of goodwill and other
                   intangibles that are determined to have an indefinite life.

             o      Requires, at a minimum, annual impairment tests for goodwill
                  and other intangible assets that are determined to have an
indefinite life.                        

F-16

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AIMRITE HOLDINGS CORPORATION
 (A Development Stage Company)
 Notes to the Financial Statements
 December 31, 2000

NOTE 2 -      SIGNIFICANT ACCOUNTING POLICIES AND PROCEDURES (Continued)        

Pronouncements Issued Not Yet Adopted (Continued)   
-------------------------------------               

          Upon adoption of these Statements, the Company is required to:

             o     Re-evaluate goodwill and other intangible assets that arose
                    from business combinations entered into before July 1, 2001.
                If the recorded other intangibles assets do not meet the
                criteria for recognition, they should be reclassified to
                 goodwill. Similarly, if there are other intangible assets
           that meet the criteria for recognition but were not
         separately recorded from goodwill, they should be
reclassified from goodwill.             

           o     Reassess the useful lives of intangible assets and adjust
       the remaining amortization periods accordingly.

o      Write-off any remaining negative goodwill.     

        The Company has not yet completed its full assessment of the
           effects of these new pronouncements on its financial statements
             and so is uncertain as to the impact. The standards generally are
           required to be implemented by the Company in its 2002 financial
statements.                                         

Concentrations of Risk                              
----------------------                              

           The Company maintains its cash in bank deposit accounts at high
              credit quality financial institutions. The balances, at times, may
exceed federally insured limits.                    

NOTE 3 -      WARRANTS AND OPTIONS                                              

       There are no warrants or options outstanding to acquire any
additional shares of common stock of the Company.   

NOTE 4 -      GOING CONCERN                                                     

        The Company has had no operations since the beginning of the
       development stage. The Company has not established revenues
            sufficient to cover its operating costs and allow it to continue
          as a going concern. The Company is currently seeking to obtain
         additional financing opportunities. The Company is working to
              become current with all filings. Efforts will continue during 2001
             towards introducing the COAST technology to industry partners for
further development and distribution.               

NOTE 5 -      NOTE PAYABLE - RELATED PARTY                                      

              From time to time, the Company borrows funds from its Director and
           President. At December 31, 2000, the Company had a note payable
             due to this related party of $763,095. This note is unsecured and
             due upon demand. Interest of $51,117 has been accrued on the note
through December 31, 2000 at 8% per annum.          

NOTE 6 -      PREFERRED STOCK                                                   

             The shareholders of the Company have authorized 50,000,000 shares
        of preferred stock with a par value of $0.001, consisting of
           1,000,000 shares of Series A, 2,000,000 shares of Series B, and
        47,000,000 shares of Series C. The terms of the Series A and
          Series B preferred stock are described below. The terms of the
         Series C preferred stock will be set by the Board at a future
time.                                               

F-17

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AIMRITE HOLDINGS CORPORATION
 (A Development Stage Company)
 Notes to the Financial Statements
December 31, 2000 and 1999

NOTE 6 -      PREFERRED STOCK (Continued)                                       

Series A                                            
--------                                            

            At December 31, 2000, there are -0- shares of Series A preferred
              stock issued and outstanding. Each share of the preferred stock is
          voting stock and is entitled to 100 votes for each share held.
          These shares are not convertible to shares of common stock. No
            sale of assets, dissolution, merger, acquisition or amendment of
             the articles of incorporation shall occur without the approval of
  a majority of the holders of preferred Series A stock.

Series B                                            
--------                                            

     At December 31, 2000, there are 73,000 shares of Series B
       preferred stock issued and outstanding. Holders of Series B
             preferred shares can not transfer, sell, pledge, encumber or give
             away any of the shares transferred to them for one year following
     their acquisition. The Series B preferred shares shall be
            convertible to shares of common stock after one year at the rate
            of one share of common stock for one share of Series B preferred
            shares. After one year, holders of Series B preferred shares (or
            shares of common stock which are held pursuant to the conversion
            rights) shall offer the Company the right to purchase the shares
          at a price which is one half of the average of the bid and ask
           price over the 10 days prior to the sale to the Company and the
           Company shall purchase at that price. If the holder of Series B
            preferred shares receives a higher offer, the Company shall have
             the right of first refusal to purchase all of the shares that the
              holder would transfer at the offered price. The holder of Series B
           preferred shares shall obtain the reasonable business advice of
            the Company before encumbering, selling, pledging or giving away
any of the shares.                                  

NOTE 7 -      COMMITMENTS AND CONTINGENCIES                                     

            On June 20, 1999, the Company entered into a lease agreement for
              the premises in which they operate. The agreement specifies a term
             of 10 years, commencing on June 21, 1999 and continuing until May
     31, 2009, with a monthly payment of $6,547. Minimum lease
              commitments for the years ended December 31, 2000 through December
31, 2005 are $78,564 per year.                      

NOTE 8 -      CONVERTIBLE DEBENTURES                                            

                   During 2000, the Company issued four convertible debentures
             for $100,000 each as part of note purchase agreements
              entered into on September 7, 2000, September 27, 2000,
          October 25, 2000, and November 22, 2000 . All four
                 convertible debentures were due on October 1, 2001 if not
                   converted and accrue interest at 8% per annum from the date
               of issuance. The holders of the debentures retained the
                   option to convert the note for all or any lesser portion of
                  the principal amount into common stock of the Company at a
                    conversion price equal to the lesser of 75% of the lowest of
             the closing bid prices for the common stock for the 5
                  trading days immediately prior to the conversion date, 75%
               of the lowest of the "last trade" prices for the common
             stock for the 5 trading days immediately prior to the
                    conversion date, or 100% of the lowest closing bid price for
                    the common stock for the 5 trading days prior to the date of
                   the note. Interest expense associated with these debentures
         amounted to $1,202 at December 31, 2000. All four
                  convertible debentures were converted in full during 2000.

F-18

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AIMRITE HOLDINGS CORPORATION
 (A Development Stage Company)
 Notes to the Financial Statements
December 31, 2000 and 1999

NOTE 8 -      CONVERTIBLE DEBENTURES (Continued)                                

             The Company has adopted the provisions of EITF 00-27 "Application
  of Issue No. 98-5 to Certain Convertible Instruments."
           Accordingly, the Company recorded a discount of $133,332 on the
             convertible debentures in order to allocate to additional paid-in
          capital the value of the beneficial conversion features of the
         debentures. The beneficial conversion features consist of the
           debenture holder's rights to convert the debentures into common
      stock. The value of the beneficial conversion features was
              computed as the fair value of the beneficial conversion feature on
        the date the debenture was issued. The discount was expensed
immediately upon conversion.                        

NOTE 9 -      SUBSEQUENT EVENTS                                                 

    Subsequent to December 31, 2000, the Company issued five
             convertible debentures for $100,000 each as part of note purchase
          agreements entered into on January 4, 2001, February 15, 2001,
      March 7, 2001, March 21, 2001, and April 9, 2001. All five
     convertible debentures were due on October 1, 2001 if not
          converted and accrue interest at 8% per annum from the date of
          issuance. The holders of the debentures retained the option to
           convert the note for all or any lesser portion of the principal
         amount into common stock of the Company at a conversion price
              equal to the lesser of 75% of the lowest of the closing bid prices
            for the common stock for the 5 trading days immediately prior to
             the conversion date, 75% of the lowest of the "last trade" prices
            for the common stock for the 5 trading days immediately prior to
            the conversion date, or 100% of the lowest closing bid price for
            the common stock for the 5 trading days prior to the date of the
            note. Interest expense associated with these debentures amounted
           to $1,407. All five convertible debentures were converted as of
June 30, 2001.                                      

          The Company recorded a discount of $166,665 on the convertible
             debentures in order to allocate to additional paid-in capital the
              value of the beneficial conversion features of the debentures. The
            beneficial conversion features consist of the debenture holder's
            rights to convert the debentures into common stock. The value of
             the beneficial conversion features was computed as the fair value
              of the beneficial conversion feature on the date the debenture was
              issued. The discount was expensed immediately upon conversion. The
             number of shares and interest relating to the conversion of these
debentures is detailed below.                       

              During January 2001, the Company issued 2,800,000 shares of common
         stock for proceeds of $56,000 for conversion of debenture and
interest in the amount of $272.                     

        During February 2001, the Company issued 4,485,715 shares of
             common stock for proceeds of $104,000 for conversion of debenture
and interest in the amount of $335.                 

            During March 2001, the Company issued 9,837,238 shares of common
          stock for proceeds of $240,000 for conversion of debenture and
interest in the amount of $456.                     

            During April 2001, the Company issued 3,222,223 shares of common
         stock for proceeds of $72,500 for conversion of debenture and
interest in the amount of $154.                     

          During May 2001, the Company issued 1,092,593 shares of common
         stock for proceeds of $27,500 for conversion of debenture and
interest in the amount of $190.                     

F-19

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘10KSB’ Filing	Date	First	Last	Other Filings

	5/31/09	18
	12/31/05	18
Filed on:	11/23/01
	10/15/01	3
	10/1/01	18	19
	7/1/01	17
	6/30/01	19		10QSB
	4/9/01	19
	3/31/01	16		10QSB
	3/21/01	19
	3/7/01	19
	2/15/01	19
	1/4/01	19
For Period End:	12/31/00	1	19	NTN 10K
	12/15/00	16
	11/30/00	10
	11/22/00	10	18
	10/25/00	10	18
	9/27/00	18
	9/7/00	18
	7/30/00	9
	7/1/00	16
	6/30/00	15		10QSB, NT 10-Q
	6/15/00	15
	5/22/00	9
	3/31/00	9		10QSB
	2/24/00	9
	12/31/99	3	19	10KSB, NT 10-K
	10/9/99	13
	7/30/99	8		10SB12G/A
	6/21/99	18
	6/20/99	18
	6/16/99	8
	5/27/99	8
	3/4/99	8
	12/31/98	8
	11/3/98	8
	10/16/98	8
	9/11/98	7	8
	4/30/98	7
	3/2/98	7
	1/2/98	7
	12/31/97	6	12
	6/5/97	7
	2/24/97	7
	2/12/97	7	13
	2/5/97	13
	1/1/97	3
	12/31/96	7
	7/25/95	13
	7/24/95	13
	7/21/95	13
	3/31/95	13
				List all Filings

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Filing Submission 0001019687-01-501221 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Aimrite Holdings Corp – ‘10KSB’ for 12/31/00 – EX-99.1

On: Friday, 11/23/01 · For: 12/31/00 · Accession #: 1019687-1-501221 · File #: 0-26237

Previous ‘10KSB’: ‘10KSB’ on 2/14/01 for 12/31/99 · Latest ‘10KSB’: This Filing

Annual Report — Small Business — Form 10-KSBFiling Table of Contents

EX-99.1 — Miscellaneous Exhibit

Dates Referenced Herein and Documents Incorporated by Reference

Annual Report — Small Business — Form 10-KSB
Filing Table of Contents