Attached files
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| EX-31 - GISSER AUTOMOTIVE CONCEPTS INC | v178510_ex31.htm |
| EX-32 - GISSER AUTOMOTIVE CONCEPTS INC | v178510_ex32.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-Q
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x
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QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 FOR THE QUARTERLY PERIOD ENDED JANUARY 31,
2010
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OR
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o
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For the
transition period from___________, to _____________
Commission
file number: 333-145181
Gisser Automotive
Concepts, Inc.
(Name of
Small Business Issuer in Its Charter)
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NEW YORK
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13-3948927
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(State or Other jurisdiction of Incorporation or
Organization)
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(I.R.S. Employer Identification No.)
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52 Edison Court, Monsey, New York
10952
(Address
of Principal Executive Offices, including zip code.)
(845)
356-8008
(Registrant’s
Telephone Number, Including Area Code)
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes ¨ No x
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Act: Yes ¨
No x
Indicate
by check mark whether the registrant (1) has filed all reports required by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 day. Yes x No ¨
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulations S-K is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-Q or any amendment to this
Form 10-Q. ¨
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 if the Exchange Act.
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Large Accelerated filer
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¨
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Accelerated filer ¨
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Non-accelerated filer
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¨
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Smaller reporting company x
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(Do not check if a smaller reporting company)
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||
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act). Yes
o No x
The
aggregate market value of the registrant’s voting common stock held by
non-affiliates as of January 31, 2010 based upon the closing price reported for
such date on the OTC Bulletin Board was US$ 0.
The
company had a total of 13,659,333 shares
outstanding as of January 31, 2010.
Transitional
Small Business Disclosure Format (Check One): Yes o No x
TABLE
OF CONTENTS
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PAGE
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PART
I
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ITEM
1.
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BUSINESS.
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1
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ITEM
1A.
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RISK
FACTORS
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2
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ITEM
1B.
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UNRESOLVED
STAFF COMMENTS
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2
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ITEM
2.
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PROPERTIES.
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2
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ITEM
3.
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LEGAL
PROCEEDINGS.
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3
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ITEM
4.
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SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS.
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3
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PART
II
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ITEM
5.
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MARKET
FOR COMMON STOCK AND RELATED STOCKHOLDER MATTERS.
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3
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ITEM
6.
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SELECTED
FINANCIAL DATA.
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4
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ITEM
7.
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MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
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4
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ITEM
7A.
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QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
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5
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ITEM
8.
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FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA.
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5
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ITEM
9.
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CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
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5
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ITEM
9B.
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OTHER
INFORMATION.
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5
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PART
III
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ITEM
10.
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DIRECTORS,
EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE.
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6
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ITEM
11.
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EXECUTIVE
COMPENSATION.
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7
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ITEM
12.
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SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS.
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8
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ITEM
13.
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CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE.
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9
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ITEM
14.
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PRINCIPAL
ACCOUNTANT FEES AND SERVICES.
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9
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PART
IV.
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ITEM
15.
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EXHIBITS,
FINANCIAL STATEMENT SCHEDULES
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10
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Forward-Looking
Statements
We have
included and from time to time may make in our public filings, press releases or
other public statements, certain statements, including, without limitation,
those under “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” in Part II, Item 7. In some cases these statements are
identifiable through the use of words such as “anticipate,” “believe,”
“estimate,” “expect,” “intend,” “plan,” “project,” “target,” “can,” “could,”
“may,” “should,” “will,” “would,” and similar expressions. You are cautioned not
to place undue reliance on these forward-looking statements. In addition, our
management may make forward-looking statements to analysts, investors,
representatives of the media and others. These forward-looking statements are
not historical facts and represent only our beliefs regarding future events,
many of which, by their nature, are inherently uncertain and beyond our
control.
PART
I
ITEM 1. BUSINESS
Business
Overview
Our
corporate name is Gisser Automotive Concepts, Inc. (“We”, “Our”,
“Gisser”, “GAC,” or the “Company”). We were incorporated in New York on May 22,
1997 by our founder, Daryl K. Gisser. Mr. Gisser formed Gisser
Automotive Concepts to capitalize on the increase in market demand in the luxury
automobile market that began in 1997.
We build
the MEC4. The MEC4 is a hand-built, high-performance, mid-engine,
superexotic sports coupe. Our mission is to design, engineer and manufacture the
MEC4 superexotic luxury sports coupes to be highly marketable while satisfying
the on-going demands of discriminating and affluent sophisticated sports car
enthusiasts.
Our
principal executive offices are located at 52 Edison Court, Monsey, N.Y. 10952
and our telephone number is (845) 356-8008.
We are in
the development stage and have no operating history. No representation is made
or implied that we will be able to carry on our activities profitably. Our
subsistence is dependent initially upon sufficient proceeds being realized by us
from this offering, of which there is no assurance. Proceeds of this offering
may be insufficient to enable us to conduct potentially profitable operations or
otherwise to engage in any business endeavors. The likelihood of our success
must be considered in light of the expenses, difficulties and delays frequently
encountered in connection with the formation of any new business.
Since the
incorporation of Gisser Automotive Concepts, Inc., we have not generated any
revenue. With limited financial resources, we may not be able to continue as a
going concern.
We
currently have limited business operations including day to day operations,
ongoing filings with the SEC relating to our Registration Statement, some
research and development for planned products and maintaining prototypes and
inventory. For the near future and until the Company can raise funds
substantially adequate for production, the Company will continue in this
status.
On
January 13, 2009, Gisser Automotive Concepts, Inc. received a Notice of
Effectiveness from the Securities and Exchange Commission (SEC) bringing us
closer to being able to raise funds required for further research and
development, production and marketing of our products.
On July
20, 2009, Gisser Automotive Concepts, Inc., filed our Form 8-K 4.01 and changed
its principal independent accountants. On such date, Ross & Company CPA,
PLLC, 636 Veterans Memorial Hwy, Hauppauge, NY 11788, 631-979-3141, notified the
Registrant that he declined to stand for re-appointment as the Independent
Auditor of the Registrant and was terminated. Previous to this date of
termination, Ross & Company CPA, PLLC, has audited our financial statements
for the years ended April 30, 2007, April 30, 2008 and has reviewed our interim
financial statements for the period ended October 31, 2008.
On July
20, 2009, the management of the Registrant engaged Frumkin, Lukin & Zaidman,
CPAs P.C., located at 100 North Village Avenue Suite 21, Rockville Centre, NY
11570, 516-766-6635, as its independent auditors to audit its financial
statements for the fiscal year ended April 30, 2009 and six months ended October
31, 2009. The decision to change auditors was approved by the Registrant's Board
of Directors.
The
Company has authorized two classes of stock: Common stock authorized 200,000,000
shares; par value $0.01; issued and outstanding 13,659,333 as of January 31,
2010 and Cumulative 5% preferred stock, stated value $2.00 authorized 20,000,000
shares, 550,000 shares issued and outstanding as of January 31, 2010. The
Company is only offering common stock through its registration with the SEC and
does not anticipate offering preferred shares for sale to the
public.
Employees
Currently,
the Company has four employees two of whom are part time. All employees have
deferred their current salaries until such time as it is practical for the
Company to compensate them in cash. Our President was the only employee to
receive a portion of his salary. As in the past, the Company may agree to pay
employees cash salaries that have accrued to them in equity.
1
ITEM
1A. RISK FACTORS
The
securities offered by the Company’s Initial Public Offering are highly
speculative and involve substantial risks. Investors should carefully consider
the risks and uncertainties described below and the other information available
from the Company before deciding whether to invest in shares of our common
stock. Any of the following risks could cause the value of our common stock to
decline. Our financial status creates a doubt whether we will continue as a
going concern for more than 12 months from the date of this filing, and, if we
do not continue as a going concern, investors may lose their entire investment.
We have nominal assets and limited operations with which to create operating
capital. We seek to raise additional capital to promote and advertise
our services in an offering of our common stock on Form S-1. If all the shares
offered are sold, we will receive up to $10,000,000 proceeds net of expenses to
purchase material and equipment to build Company and its products. There can be
no assurance that such offering will be successful.
1) We are
a development stage company that has a very limited operating history; we never
earned any revenues and we may never achieve or sustain
profitability.
2) We
only have a very limited amount of cash as of January 31, 2010 and if we are
unable to raise more money, we will be required to delay, scale back or
eliminate key elements of our business plan.
3) We may
experience significant returns or warranty claims on our products, which would
damage our brand, increase our costs and impair our ability to achieve
profitability.
4) The
marketing and sale of our products will be subject to significant competition
and most if not all of our competitors are better capitalized and much more
experienced than us.
5) We do
not currently have a distribution channel for the sales of our vehicles and we
may not be able to obtain a good distribution channel in the
future.
6) Our
operations may become subject to significant governmental regulations in the
future.
7)
Existing governmental regulations and/or the adoption of new, laws, regulations
or policies relating to the environment, safety, emissions and/or fuel economy
may have a significant impact on how we do business as well as possible higher
costs, cash expenditures, and/or sales restrictions.
8) Our
Chief Executive Officer has the power to make all major decisions regarding the
company without the need to get consent from any stockholder or other
person. He is also the only person knowledgeable about our business,
affairs and history and the loss of his services would likely result in the
indefinite cessation of our operations and the complete failure of our current
business plan. We do, however, currently maintain key man life insurance
coverage on our CEO’s life in the amount of $1,000,000. We do not
maintain insurance on the life of our other executives. The proceeds
from any payout on the insurance may not be sufficient to allow us to continue
operations in the event of his death.
9) No
market exists for the trading of our securities and no market may ever
develop. Accordingly, you may not have any means of trading the
shares you acquire in this offering.
10) The
application of the "penny stock" rules could adversely affect the market for our
stock.
ITEM
1B. UNRESOLVED STAFF COMMENTS
None
ITEM 2. PROPERTIES.
We do not
own any land and buildings.
2
ITEM 3. LEGAL
PROCEEDINGS.
Neither
the Company nor its property is a party to any pending legal proceeding. The
Company’s management does not believe that there are any proceedings to which
any Director, officer, or affiliate of the Company, any owner of record of
beneficially held or owner of more than five percent (5%) of the Company’s
common stock, or any associate of any such Director, officer, affiliate of the
Company, or security holder is a party adverse to the Company, or has a material
interest adverse to the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS.
The only
recent matter requiring the vote of our stockholders was the change of our
principal independent accountants from our previous accountants, Ross &
Company CPA, PLLC to Frumkin, Lukin & Zaidman, CPAs P.C.
This was
voted upon with an action with no meeting and by consent of a majority of our
shareholders amongst who were our CEO and President holding 58.10% of the outstanding
common and preferred stock of the Company.
An 8-K
was filed with the SEC relating to this change of accountants on July 20, 2009
and then amended on July 30, 2009 as Form 8-K/A Amendment No. 2.
The was
also a vote to remove one of our Directors which was voted upon with an action
with no meeting and by consent of a majority of our shareholders amongst who
were our CEO and President holding 58.10% of the outstanding
common and preferred stock of the Company. An 8-K 5.01was filed with the
SEC on March 23, 2010 relating to the dismissal of this Director, Thomas G.
Haff, on January 7, 2010.
An 8-K
5.01was filed with the SEC on March 22, 2010 relating to the passing of one of
our Directors, John J. Schramm, on January 13, 2009.
PART
II
ITEM 5. MARKET FOR COMMON STOCK AND RELATED
STOCKHOLDER MATTERS AND PURCHASES OF EQUITY SECURITIES.
There
have not been any sales of our shares of Common Stock during the period covered
by this report.
Stockholders
As of the
close of business on January 31, 2010, there were 255 holders of record of the
Company’s common stock.
Dividends
We have
not declared or paid dividends on our Common Stock since our formation, and we
do not anticipate paying dividends in the foreseeable future. Declaration or
payment of dividends, if any, in the future, will be at the discretion of our
Board of Directors and will depend on our then current financial condition,
results of operations, capital requirements, and other factors deemed relevant
by the Board of Directors. There are no contractual restrictions on our ability
to declare or pay dividends.
Securities
authorized for issuance under equity compensation plans
During
the period covered by this Report, none of our equity securities were authorized
to be issued under any compensation plans (including individual compensation
arrangements).
Repurchase
of Securities
We did
not repurchase any of shares of our common stock during the period covered by
this report.
Recent
Sales of Unregistered Securities
There
have not been any sales of our shares of Common Stock during the period covered
by this report.
3
Forward-Looking
Statements
We have
included and from time to time may make in our public filings, press releases or
other public statements, certain statements, including, without limitation,
those under “Management’s Discussion and Analysis or Plan of Operations” in Part
II, Item 7. In some cases these statements are identifiable through the use of
words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,”
“project,” “target,” “can,” “could,” “may,” “should,” “will,” “would,” and
similar expressions. You are cautioned not to place undue reliance on these
forward-looking statements. In addition, our management may make forward-looking
statements to analysts, investors, representatives of the media and others.
These forward-looking statements are not historical facts and represent only our
beliefs regarding future events, many of which, by their nature, are inherently
uncertain and beyond our control.
ITEM 6. SELECTED FINANCIAL
DATA
We are a
smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are
not required to provide the information under this item.
ITEM
7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The
following discussion should be read in conjunction with the Financial Statements
and Notes thereto appearing elsewhere in this Form 10-Q. The following
discussion contains forward-looking statements. Our actual results may differ
significantly from those projected in the forward-looking statements. Factors
that may cause future results to differ materially from those projected in the
forward-looking statements include, but are not limited to, those discussed in
“Risk Factors” and elsewhere in this Form 10-Q.
Revenue
We are a
development company, and have not generated any revenues since the date of
incorporation of May 22, 1997.
Operating
Income
We have
had no revenues but have incurred general and administrative expenses and total
operating expenses of $(1,475,990) and $(1,485,619) for the periods ended
January 31, 2010, and 2009. A large portion being stock based compensation in
the amount of $525,000 for each period.
Net
(Loss)
During
the periods ended January 31, 2010, and 2009, the Company had net losses of
$(2,453,251) and $(2,267,719) respectively.
Financial
Condition
The
Company does not have enough cash resources or revenues to cover expenses for
the foreseeable future. Without increased revenues or additional capital, it is
extremely likely that our production, sales and marketing plan will not be able
to be completed. This would significantly affect out efforts to enter into sales
operations as and when we would like.
Liquidity
and Capital Resources
During
the periods ended January 31, 2010, and 2009, net cash provided by financing
activities amounted to $1,484,094 and $1,383,507 respectively. The net cash
provided resulted primarily from ongoing loans from related parties in the
amount of $126,969 and $71,007 respectively for the same periods. Of these
amounts, most, if not all was from our CEO and President. The balance was
primarily stock to be issued for other reasons in the amounts of $1,357,125 and
$1,312,500 respectively.
As of
January 31, 2010, and 2009, our cash resources amounted to $25,799 and $25,748,
respectively. Current liabilities exceed current assets by $1,771,543 and $ 1,257,340
respectively, and as of January 31, 2010, our prior accumulated deficit and
deficit accumulated since inception amounted to $21,818,468 and $24,271,720,
respectively.
Plan
of Operations
The rate
of growth of the Company is somewhat dependent upon the successful completion of
the Company’s offering to commence its proposed plan of operation, and the
Company may need additional financing to fund our corporate activities. Such
financing may come from a variety of sources, including additional equity or
debt offerings. Proceeds of this offering may be insufficient to enable us to
conduct potentially profitable operations or otherwise to engage in any business
endeavors. The likelihood of our success must be considered in light of the
expenses, difficulties and delays frequently encountered in connection with the
formation of any new business. We are in the development stage and have no
operating history or revenues.
Immediately
upon obtaining a considerable portion of proceeds from our offering, the Company
will finalize all research and development, and will simultaneously go through
all state and government regulation certifications that may be required for our
products. We plan to commence marketing and sales activities to obtain pre-build
orders for our vehicles.
There are
no known trends, events or uncertainties that have or are reasonably likely to
have a material impact on the Company’s short-term or long-term liquidity, other
than the inability to sell our products.
The
Company does not expect to significantly increase its employees in the next
fiscal year unless our capital formation resulting from the sale of our
securities is considerably adequate to do so.
The
Company has never filed for Bankruptcy protection.
Off-Balance
Sheet Arrangements
We do not
have any off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that are material to
investors.
4
ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not
required.
ITEM 8. FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA.
The
financial statements of the Company are included following the signature page to
this Form 10-Q.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
Frumkin,
Lukin & Zaidman, CPAs P.C. is our registered independent auditor. During the
period covered by this report there have not been any changes in or
disagreements with accountants on accounting and financial disclosure or any
other matter.
ITEM
9A.(T) CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls
and Procedures
We
maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our reports filed or submitted under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission’s rules and forms
and that such information is accumulated and communicated to our management,
including our President, who serves as our principal executive officer and
principal financial officer, as appropriate, to allow timely decisions regarding
required disclosure.
Our CEO
reviewed and evaluated the effectiveness of the design and operation of our
disclosure controls and procedures (as defined by Rule 240.13a-15(e) or
15d-15(e)) of the Exchange Act Rule 13a-15 as of the end of the period covered
by this report. Based upon this evaluation, our President concluded that,
as of the end of such period, our disclosure controls and procedures were
effective as of the end of the fiscal year covered by this Form
10-Q.
(b)
Management’s Annual Report on Internal Control over Financial
Reporting
The
Company’s management is responsible for establishing and maintaining adequate
internal control over financial reporting as defined in Rules 13a-15(f) and
15d-15(f) of the Exchange Act and for assessing the effectiveness of internal
control over financial reporting.
Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. In addition, projections of any evaluation of
effectiveness of internal control over financial reporting to future periods are
subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
Management
has assessed the effectiveness of the Company’s internal control over financial
reporting as of January 31, 2010. Based on the results of this
assessment, management has concluded that the Company’s internal control over
financial reporting was effective as of January 31, 2010.
This
Report on Form 10-Q does not include an attestation report of the Company’s
registered public accounting firm regarding internal control over financial
reporting. Management’s report was not subject to attestation by the
Company’s registered public accounting firm pursuant to temporary rules of the
SEC that permit the Company to provide only management’s report in this Report
on Form 10-Q.
(c)
Changes in Internal Control over Financial Reporting
There
were no changes in the Company’s internal control over financial reporting that
occurred as of January 31, 2010 and for the year ended April 30, 2009 that have
materially affected, or that are reasonably likely to materially affect, the
Company’s internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
There is
no information required to be disclosed in a report on Form 8-K other than the
ones filed with the Commission during the nine months covered by this Form 10-Q
but not reported.
5
PART
III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND
CORPORATE GOVERNANCE.
The
following table sets forth the name, age and position of each of our officers
and Directors as of January 31, 2010.
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NAME
|
AGE
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OFFICE,
SERVICE
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DATE
COMMENCED
|
|||
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Daryl
K. Gisser*
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46
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President,
Chief Executive Officer, and Director
|
1997
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Nolan
M. Gisser*
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49
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Vice-President
and Director
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1998
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Rivkah
Nachmias*
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72
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Treasurer
and Director
|
1997
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|||
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Herman
G. Gisser*
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76
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Secretary
and Director
|
1997
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|||
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Richard
Brown*
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77
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|
Director
|
|
2000
|
*
Indicates Board Member
Involvement
in Certain Legal Proceedings
To our
knowledge, during the past five years, our officers and directors: has not filed
a petition under the federal bankruptcy laws or any state insolvency law, nor
had a receiver, fiscal agent or similar officer appointed by a court for the
business or present of such a person, or any partnership in which (s)he was a
general partner at or within two years before the time of such filing, or any
corporation or business association of which (s)he was an executive officer
within two years before the time of such filing; were not convicted in a
criminal proceeding or named subject of a pending criminal proceeding (excluding
traffic violations and other minor offenses); were not the subject of any order,
judgment or decree, not subsequently reversed, suspended or vacated, of any
court of competent jurisdiction, permanently or temporarily enjoining him from
or otherwise limiting their respective activities.
Compliance
with Section 16 (a) of the Exchange Act
Based
solely upon a review of Forms 3 and 4 and amendments thereto furnished to us
pursuant to Rule 16a-3(e) under the Securities Exchange Act of 1934 during our
most recent fiscal year and Forms 5 and amendments thereto furnished to us with
respect to our most recent fiscal year, all officers, directors and owners of
10% or more of our outstanding shares have filed all Forms 3, 4 and 5 required
by Section 16(a) of the Securities Exchange Act of 1934, as
amended.
Code
of Ethics
The
Company has not yet adopted a code of ethics to apply to its principal executive
officer, principal financial officer, principal accounting officer and
controller, or persons performing similar functions. The Company expects to
prepare a Code of Ethics in the near future.
Meetings
of Our Board of Directors
Our Board
of Directors did not hold any meetings during the period covered by this Report.
Various matters were approved by consent resolution, which in each case was
signed by each of the members of the Board then serving.
Committees of the Board Compensation
Committee
We do not
currently have a compensation committee. Our common stock is not quoted on the
OTC Bulletin Board or any other exchange. Our Board has not made any plans or
need to establish a compensation committee to determine guidelines for
determining the compensation of its executive officers or directors. Four of our
officers or directors do have employment agreements and currently serve with
deferred compensation.
Audit
Committee
We do not
have a separately-designated standing audit committee. The entire Board of
Directors performs the functions of an audit committee, but no written charter
governs the actions of the Board when performing the functions of what would
generally be performed by an audit committee. The Board approves the selection
of our independent accountants and meets and interacts with the independent
accountants to discuss issues related to financial reporting. In addition, the
Board reviews the scope and results of the audit with the registered independent
auditors, reviews with management and the registered independent auditors our
annual operating results, considers the adequacy of our internal accounting
procedures and considers other auditing and accounting matters including fees to
be paid to the registered independent auditor and the performance of the
registered independent auditor.
We intend
to establish an Audit Committee and such other committees as may be required
when sufficient members and resources are available, and at such time the
Company's Board of Directors will establish the Audit Committee. The Audit
Committee will have a designated Audit Committee Financial Expert who will be
responsible for reviewing the results and scope of the audit, and other services
provided by the independent auditors, and review and evaluate the system of
internal controls. No final determination has yet been made as to the
memberships of these committees or when we will have sufficient members to
establish the committees.
Nomination
Committee
Our Board
of Directors does not maintain a nominating committee. As a result, no written
charter governs the director nomination process. Our size and the size of our
Board, at this time, do not require a separate nominating
committee.
6
ITEM 11. EXECUTIVE
COMPENSATION.
Executive
Compensation
Shown on
the table below is information on the annual and long-term compensation for
services rendered to the Company in all capacities, for the three most recent
fiscal years ended April 30, 2008, April 30, 2009 and April 30, 2010. None of
this compensation has been paid by the Company to any individuals listed below
and serving the Company in the specified capacity. All compensation has been
deferred and in previous years taken as equity in lieu of salary or is due in
the form of stock to be issued.
|
Annual Compensation
|
Long-Term Compensation
|
|||||||||||||||||||||||||||||
|
Awards
|
Payouts
|
|||||||||||||||||||||||||||||
|
Name
And Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Other
Annual
Comp-
ensation
($)
|
Restrict-
ed
Stock
Awards
($)
|
Securities
Under-
lying
Options/
SARs
(#)
|
LTIP
Payouts
($)
|
All
Other
Compen-
sation
(Shares)
|
||||||||||||||||||||||
|
Daryl
K. Gisser
|
2010
|
145,000 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
|
President/CEO
|
2009
|
140,000 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
|
2008
|
135,000 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
|
Nolan
M. Gisser
|
2010
|
74,000 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
|
Vice
President
|
2009
|
70,000 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
|
2008
|
67,000 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
|
Rivkah
Nachmias
|
2010
|
74,000 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
|
Treasurer
|
2009
|
70,000 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
|
2008
|
67,000 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
|
Herman
G. Gisser
|
2010
|
74,000 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
|
Director
of Sales and
|
2009
|
70,000 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
|
Marketing
& Secretary
|
2008
|
67,000 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
Option/SAR
Grants
No
individual grants of stock options, whether or not in tandem with stock
appreciation rights (“SARs”) and freestanding SARs have been made to any
executive officer or any director during the period covered by this
Report.
Long-Term
Incentive Plan Awards
We do not
have any long-term incentive plans that provide compensation intended to serve
as incentive for performance to occur over a period longer than one fiscal year,
whether such performance is measured by reference to our financial performance,
our stock price, or any other measure.
Compensation
of Directors
During
the period covered by this Report, the Directors of the Company have not
received compensation for serving as Directors or have been reimbursed for
expenses incurred in attending board meetings.
Employment
contracts and termination of employment and change-in-control
arrangements
We do
have employment contracts with four of our Directors and
officers.
7
ITEM 12. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS.
Security Ownership of Certain
Beneficial Owners and Management
The
following table sets forth certain information, as of January 31, 2010,
concerning shares of common stock and preferred stock of the Company being the
only securities that are issued and outstanding, held by (1) each
shareholder known by the Company to own beneficially more than five percent of
the common stock, (2) each Director of the Company, (3) each executive
officer of the Company, and (4) all Directors and executive officers of the
Company as a group:
|
Name and Address of Beneficial Owner
|
Beneficial Ownership
Common Stock
|
Percent
Common
|
Beneficial
Ownership
Preferred Stock
|
Percent
Preferred
|
Total Percent
Owned In
Company
|
|||||||||||||||
|
Daryl
K. Gisser
52
Edison Court
Monsey,
NY 10952
|
5,982,066 | 31.22 | % | 515,000 | 93.64 | % | 58.10 | % | ||||||||||||
|
Nolan
M. Gisser
52
Edison Court
Monsey,
NY 10952
|
1,028,449 | 5.37 | % | 15,000 | 2.73 | % | 6.15 | % | ||||||||||||
|
Herman
G. Gisser
52
Edison Court
Monsey,
NY 10952
|
1,734,472 | 9.05 | % | 10,000 | 1.82 | % | 9.57 | % | ||||||||||||
|
Rivkah
Nachmias
52
Edison Court
Monsey,
NY 10952
|
1,869,793 | 9.76 | % | 10,000 | 1.82 | % | 10.28 | % | ||||||||||||
|
Richard
Brown
245
Egret Run Lane
Pawleys
Island, SC 29585
|
100,000 | 0.52 | % | 0 | 0.00 | % | 0.52 | % | ||||||||||||
|
All
directors and executive officers
as
a group (5 persons)
|
10,714,780 | 55.92 | % | 550,000 | 100 | % | 84.62 | % | ||||||||||||
8
ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Related
Transactions
Except as
otherwise disclosed herein or incorporated herein by reference, there have not
been any transactions, or proposed transactions, during the last two years, to
which the Company was or is to be a party, in which any Director or executive
officer of the Company, any nominee for election as a Director, any security
holder owning beneficially more than five percent of the common stock of the
Company, or any member of the immediate family of the aforementioned persons had
or is to have a direct or indirect material interest.
Independent
Directors
None.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND
SERVICES.
The
following represents fees for professional audit services rendered by Frumkin,
Lukin & Zaidman, CPAs P.C. for the review of our annual financial statements
for the period from May 1, 2009, to January 31, 2010.
Audit
Fees
The
aggregate fees billed by our registered independent auditors, Frumkin, Lukin
& Zaidman, CPAs P.C., for professional services rendered for the review of
our financial statements for the nine months ended January 31, 2010, were
$3,000.
Audit
Related Fees
The
aggregate fees billed by our registered independent auditors, Frumkin, Lukin
& Zaidman, CPAs P.C., for assurance and related services that are reasonably
related to the performance of the audit or review of our financial statements
were $3,000 for the nine months ended January 31, 2010.
Tax
Fees
Our
registered independent auditors did not render any services for tax compliance,
tax advice and tax planning during the nine months ended January 31,
2010.
All
Other Fees
Our
registered independent auditors did not bill us any additional fees that are not
disclosed under audit fees, audit related fees, or tax fees in each of the last
two calendar years.
Audit
Committee Pre-Approval Process, Policies and Procedures
We do not
have an Audit Committee. Our registered independent auditors have performed
their audit procedures in accordance with pre-approved policies and procedures
established by our Board of Directors.
ITEM
13. EXHIBITS.
|
Exhibit
No.
|
Document
Description
|
|
|
31.1
|
Certification
of the Chief Executive Officer Pursuant to Rule 13a-14(a) under the
Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
|
32.1
|
Certification
of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
9
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
|
GISSER AUTOMOTIVE CONCEPTS,
INC.
|
||
|
Date:
March 22, 2010
|
By:
|
/s/
Daryl K. Gisser
|
|
Daryl
K. Gisser
|
||
|
Chief
Executive Officer, President
|
||
Pursuant
to the requirements of the Securities Exchange Act of 1934 the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
Date:
March 22, 2010
|
By:
|
/s/
Daryl K. Gisser
|
|
Name:
Daryl K. Gisser
|
||
|
Title:
Chief Executive Officer, President
|
10
GISSER
AUTOMOTIVE CONCEPTS, INC.
(A
Development Stage Enterprise)
AUDITED
FINANCIAL STATEMENTS
FOR THE
PERIOD ENDED JANUARY 31, 2010 and YEAR ENDED APRIL 30, 2009
|
CONTENTS
|
PAGE
|
|
|
Balance
Sheets
|
F
1
|
|
|
Statements
of Operations
|
F
2
|
|
|
Statements
of Cash Flows
|
F
3
|
|
|
Statement
of Stockholders’ Equity
|
F 4 – F 10
|
|
|
Notes
to Financial Statements
|
F 11 – F 23
|
GISSER
AUTOMOTIVE CONCEPTS, INC.
(A
Development Stage Enterprise)
BALANCE
SHEETS
|
January 31,
|
April 30,
|
|||||||
|
2010
|
2009
|
|||||||
|
(unaudited)
|
(audited)
|
|||||||
|
Current
Assets
|
||||||||
|
Cash
(Note A)
|
$ | 25,799 | $ | 26,342 | ||||
|
Inventory
|
130,185 | 130,185 | ||||||
|
Total
Current Assets
|
155,984 | 156,527 | ||||||
|
EQUIPMENT
AND PROTOTYPE, net of accumulated depreciation of $828,941 and $774,445,
respectively (Note B)
|
532,592 | 587,088 | ||||||
|
OTHER
ASSETS
|
||||||||
|
Deposits
|
1,358 | 1,358 | ||||||
|
INTANGIBLE
ASSETS
|
||||||||
|
Patent,
net of amortization of $41,247 and $38,821, respectively
|
13,753 | 16,179 | ||||||
|
TOTAL
ASSETS
|
$ | 703,685 | $ | 761,152 | ||||
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
|
Current
Liabilities
|
||||||||
|
Accounts
payable and accrued expenses
|
$ | 42,680 | $ | 35,532 | ||||
|
Interest
payable to related parties
|
664,261 | 468,070 | ||||||
|
Loans
payable to related parties
|
698,985 | 431,265 | ||||||
|
Accrued
salaries to related parties
|
521,602 | 479,000 | ||||||
|
Total
Current Liabilities
|
1,927,527 | 1,413,867 | ||||||
|
Stockholders’
Equity
|
||||||||
|
Cumulative
5% preferred stock, stated value $2.00 authorized 20,000,000 shares,
550,000 shares issued and outstanding (holding a preference of involuntary
liquidation of $1.1 million)
|
990,000 | 990,000 | ||||||
|
Common
stock authorized 200,000,000 shares; par value $0.01; issued and
outstanding 13,659,333 and 13,659,333 shares at at October 31, 2009 and
April 30, 2009, respectively
|
136,593 | 136,593 | ||||||
|
Paid-in
capital
|
11,940,660 | 11,940,660 | ||||||
|
Common
stock to be issued; 2,994,500 and 2,636,000 shares at October 31, 2009 and
April 30, 2009, respectively
|
9,980,625 | 8,098,500 | ||||||
|
Deficit
accumulated during the development stage
|
(24,271,720 | ) | (21,818,468 | ) | ||||
|
Total
Stockholders’ Equity (Deficit)
|
(1,223,836 | ) | (652,715 | ) | ||||
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$ | 703,685 | $ | 761,152 | ||||
See
accompanying notes to financial statements.
F-1
GISSER
AUTOMOTIVE CONCEPTS, INC.
(A
Development Stage Enterprise)
STATEMENTS
OF OPERATIONS
|
|
For the Period
|
|||||||||||
|
|
May 22, 1997
|
|||||||||||
|
January 31,
|
January 31,
|
(Inception) to
|
||||||||||
|
2010
|
2009
|
January 31, 2010
|
||||||||||
|
(unaudited)
|
(unaudited)
|
(unaudited &
|
||||||||||
|
derived from
|
||||||||||||
|
restated)
|
||||||||||||
|
OPERATING
EXPENSES
|
||||||||||||
|
Selling,
general and administrative
|
$ | 1,675,142 | $ | 1,603,401 | $ | 12,730,980 | ||||||
|
SG&A
- Stock-based compensation
|
525,000 | 525,000 | 9,778,763 | |||||||||
|
Depreciation
and amortization
|
56,922 | 57,671 | 870,188 | |||||||||
|
Total
Operating Expenses
|
$ | 2,257,064 | $ | 2,186,072 | $ | 23,379,931 | ||||||
|
OTHER
EXPENSE (INCOME)
|
||||||||||||
|
Interest
earned
|
(3 | ) | (282 | ) | (22,472 | ) | ||||||
|
Interest
expense
|
196,191 | 81,929 | 912,199 | |||||||||
|
Taxes
|
0 | 0 | 2,055 | |||||||||
|
Total
Other Expense (Income)
|
$ | 196,187 | $ | 81,647 | $ | 891,782 | ||||||
|
NET
LOSS
|
$ | (2,453,251 | ) | $ | (2,267,719 | ) | $ | (24,271,720 | ) | |||
|
DIVIDENDS
TO PREFERRED STOCK HOLDERS (IN ARREARS)
|
$ | (41,250 | ) | $ | (41,250 | ) | ||||||
|
NET
LOSS AVAILABLE TO COMMON STOCKHOLDERS
|
$ | (2,494,501 | ) | $ | (2,308,969 | ) | ||||||
|
NET
LOSS PER COMMON SHARE (BASIC AND DILUTED)
|
$ | (.18 | ) | $ | (.17 | ) | ||||||
|
WEIGHTED
AVERAGE COMMON SHARES OUTSTANDING
|
13,659,333 | 13,659,333 | ||||||||||
See
accompanying notes to financial statements.
F-2
GISSER
AUTOMOTIVE CONCEPTS, INC.
(A
Development Stage Enterprise)
STATEMENT
OF CASH FLOWS
|
For the Period
|
||||||||||||
|
May 22, 1997
|
||||||||||||
|
January 31,
|
January 31,
|
(Inception) to
|
||||||||||
|
2010
|
2009
|
January 31, 2010
|
||||||||||
|
(unaudited)
|
(unaudited)
|
(unaudited &
|
||||||||||
|
derived from
|
||||||||||||
|
restated)
|
||||||||||||
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||||||
|
Net
loss
|
$ | (2,453,251 | ) | $ | (2,267,719 | ) | $ | (24,271,720 | ) | |||
|
Adjustments
to reconcile net loss to cash flows used in operating
activities:
|
||||||||||||
|
Stock
based compensation
|
525,000 | 525,000 | 9,778,763 | |||||||||
|
Depreciation
and amortization
|
56,922 | 57,671 | 870,188 | |||||||||
|
Increase
(decrease) in operating assets:
|
||||||||||||
|
Accounts
payable and accrued expenses
|
7,148 | - | 42,680 | |||||||||
|
Deposits
|
- | - | (1,358 | ) | ||||||||
|
Inventory
|
- | - | (130,184 | ) | ||||||||
|
Interest
payable
|
196,191 | 81,929 | 664,254 | |||||||||
|
Accrued
salaries
|
192,000 | 117,500 | 521,602 | |||||||||
|
Net
Cash Flows Used In Operating Activities
|
$ | (1,475,990 | ) | $ | (1,485,619 | ) | $ | (12,525,768 | ) | |||
|
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||||||||||||
|
Expenditures
for equipment and prototype
|
- | - | (1,361,534 | ) | ||||||||
|
Expenditures
for patent
|
- | - | (55,000 | ) | ||||||||
|
Net
Cash Used in Investing Activities
|
- | - | $ | (1,416,534 | ) | |||||||
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||
|
Borrowings
from related parties
|
126,969 | 71,007 | 1,074,378 | |||||||||
|
Sale
of common stock
|
- | - | 2,096,762 | |||||||||
|
Stock
to be issued for other reasons
|
1,357,125 | 1,312,500 | 10,136,569 | |||||||||
|
Net
Cash Flows from Financing Activities
|
$ | 1,484,094 | $ | 1,383,507 | $ | 13,307,709 | ||||||
|
INCREASE
(DECREASE) IN CASH
|
(544 | ) | (102,111 | ) | 25,799 | |||||||
|
CASH,
BEGINNING OF PERIOD
|
26,342 | 127,859 | 0 | |||||||||
|
CASH,
END OF PERIOD
|
$ | 25,799 | $ | 25,748 | $ | 25,799 | ||||||
|
SUPPLEMENTAL
CASH FLOW
INFORMATION
|
||||||||||||
|
Issuance
of common stock for non cash transactions
|
$ | - | $ | - | $ | 9,036,769 | ||||||
|
Common
Stock to be Issued (for Options)
|
963,375 | 963,375 | 4,161,875 | |||||||||
|
Common
Stock to be Issued (for Other Reasons)
|
918,750 | 918,750 | 5,818,750 | |||||||||
| $ | 1,882,125 | $ | 1,882,125 | $ | 19,017,394 | |||||||
|
Cash
paid for income taxes
|
$ | - | $ | - | $ | 2,055 | ||||||
|
Cash
paid for interest
|
$ | - | $ | - | $ | - | ||||||
See
accompanying notes to financial statements.
F-3
GISSER
AUTOMOTIVE CONCEPTS, INC.
(A
Development Stage Enterprise)
For the
Period May 22, 1997 (Inception) to January 31, 2010
STATEMENT
OF STOCKHOLDERS’ EQUITY
|
Preferred
Stock
|
Common Stock
|
Additional
|
Common
Stock
|
Subscription
|
Accumulated
|
Total
Stockholders'
|
|||||||||||||||||||||||||
|
(As
Restated)
|
(As
Restated)
|
Paid
In Capital
|
To
Be Issued
|
Receivable
|
Deficit
|
Equity
(Deficit)
|
|||||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
(As
Restated)
|
(As
Restated)
|
(As
Restated)
|
(As
Restated)
|
(As
Restated)
|
|||||||||||||||||||||||
|
Issuance
of stock for patent, equipment and prototype @$1.80 per
share
|
500,000 | $ | 900,000 | $ | 900,000 | ||||||||||||||||||||||||||
|
Issuance
of stock for labor @$1.80 per share
|
50,000 | 90,000 | 90,000 | ||||||||||||||||||||||||||||
|
Issuance
of stock for labor @$0.10 to $0.50 per share
|
112,500 | $ | 1,125 | $ | 23,625 | 24,750 | |||||||||||||||||||||||||
|
Issuance
of stock for patent, equipment and prototype @ $0.01 per
share
|
1,200,000 | 12,000 | 12,000 | ||||||||||||||||||||||||||||
|
Issuance
of stock for deferral of salary and loan payments, and preferred dividends
in lieu of cash @$1.00 per share
|
535,000 | 5,350 | 529,650 | 535,000 | |||||||||||||||||||||||||||
|
Issuance
of stock for cash @$0.50 per share
|
172,000 | 1,720 | 84,280 | 86,000 | |||||||||||||||||||||||||||
|
Net
loss for year ended April 30, 1998
|
$ | (709,282 | ) | (709,282 | ) | ||||||||||||||||||||||||||
|
Balance
April 30, 1998
|
550,000 | 990,000 | 2,019,500 | 20,195 | 637,555 | (709,282 | ) | 938,468 | |||||||||||||||||||||||
|
Issuance
of stock for labor @$0.10 to $0.50 per share
|
245,730 | 2,457 | 51,604 | 54,061 | |||||||||||||||||||||||||||
|
Issuance
of stock for cash @$1.00 per share
|
2,500 | 25 | 2,475 | 2,500 | |||||||||||||||||||||||||||
|
Issuance
of stock for deferral of salary and loan payments,and preferred dividends
in lieu of cash @$0.50 per share
|
720,000 | 7,200 | 352,800 | 360,000 | |||||||||||||||||||||||||||
See
accompanying notes to financial statements.
F-4
GISSER
AUTOMOTIVE CONCEPTS, INC.
(A
Development Stage Enterprise)
For the
Period May 22, 1997 (Inception) to January 31, 2010
STATEMENT
OF STOCKHOLDERS’ EQUITY
|
Preferred
Stock
|
Common
Stock
|
Additional
|
Common
Stock
|
|
Subscription
|
Accumulated
|
Total
Stockholders'
|
||||||||||||||||||||||||
|
(As
Restated)
|
(As
Restated)
|
Paid
In Capital
|
To
Be Issued
|
Receivable
|
Deficit
|
Equity
(Deficit)
|
|||||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
(As
Restated)
|
(As
Restated)
|
(As
Restated)
|
(As
Restated)
|
(As
Restated)
|
|||||||||||||||||||||||
|
Issuance
of stock for labor @$0.50 per share
|
691,775 | 6,918 | 338,969 | 345,887 | |||||||||||||||||||||||||||
|
Net
loss for year ended April 30, 1999
|
(646,606 | ) | (646,606 | ) | |||||||||||||||||||||||||||
|
Balance
April 30, 1999
|
550,000 | 990,000 | 3,679,505 | 36,795 | 1,383,403 | (1,355,888 | ) | 1,054,310 | |||||||||||||||||||||||
|
Issuance
of stock for labor @ $0.25 to $1.00 per share
|
20,000 | 200 | 7,800 | 8,000 | |||||||||||||||||||||||||||
|
Issuance
of stock for equipment @1.00 per share
|
10,000 | 100 | 9,900 | 10,000 | |||||||||||||||||||||||||||
|
Issuance
of stock for deferral of salary and loan payments, and preferred dividends
in lieu of cash @$1.00 per share
|
570,000 | 5,700 | 564,300 | 570,000 | |||||||||||||||||||||||||||
|
Issuance
of stock for salaries @$1.00 per share
|
49,000 | 490 | 48,510 | 49,000 | |||||||||||||||||||||||||||
|
Net
loss for year ended April 30, 2000
|
(1,179,342 | ) | (1,179,342 | ) | |||||||||||||||||||||||||||
|
Balance
April 30, 2000
|
550,000 | 990,000 | 4,328,505 | 43,285 | 2,013,913 | (2,535,230 | ) | 511,968 | |||||||||||||||||||||||
|
Issuance
of stock for labor @ $1.00 per share
|
5,000 | 50 | 4,950 | 5,000 | |||||||||||||||||||||||||||
|
Issuance
of stock for deferral of salary and loan payments, and preferred dividends
in lieu of cash @$1.00 per share
|
525,000 | 5,250 | 519,750 | 525,000 | |||||||||||||||||||||||||||
|
Net
loss for year ended April 30, 2001
|
(730,716 | ) | (730,716 | ) | |||||||||||||||||||||||||||
|
Balance
April 30, 2001
|
550,000 | 990,000 | 4,858,505 | 48,585 | 2,538,613 | (3,265,946 | ) | 311,252 | |||||||||||||||||||||||
|
Issuance
of stock for labor @$1.00 per share
|
1,000 | 10 | 990 | 1,000 | |||||||||||||||||||||||||||
See
accompanying notes to financial statements.
F-5
GISSER
AUTOMOTIVE CONCEPTS, INC.
(A
Development Stage Enterprise)
For the
Period May 22, 1997 (Inception) to January 31, 2010
STATEMENT
OF STOCKHOLDERS’ EQUITY
|
Preferred
Stock
|
Common
Stock
|
Additional
|
Common
Stock
|
Subscription
|
Accumulated
|
Total
Stockholders'
|
|||||||||||||||||||||||||
|
(As
Restated)
|
(As
Restated)
|
Paid
In Capital
|
To
Be Issued
|
Receivable
|
Deficit
|
Equity
(Deficit)
|
|||||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
(As
Restated)
|
(As
Restated)
|
(As
Restated)
|
(As
Restated)
|
(As
Restated)
|
|||||||||||||||||||||||
|
Issuance
of stock for deferral of salary and loan payments,and preferred dividends
in lieu of cash @$0.50 per share
|
520,000 | 5,200 | 254,800 | 260,000 | |||||||||||||||||||||||||||
|
Net
loss for the year ended April 30, 2002
|
(492,532 | ) | (492,532 | ) | |||||||||||||||||||||||||||
|
Balance
April 30, 2002
|
550,000 | 990,000 | 5,379,505 | 53,795 | 2,794,403 | (3,758,478 | ) | 79,720 | |||||||||||||||||||||||
|
Issuance
of stock for labor @ $0.50 per share
|
325,826 | 3,258 | 159,655 | 162,913 | |||||||||||||||||||||||||||
|
Issuance
of stock for salaries @$1.00 per share
|
2,675,751 | 26,757 | 2,648,994 | 2,675,751 | |||||||||||||||||||||||||||
|
Issuance
of stock for assets @ $1.00 per share
|
32,924 | 329 | 32,595 | 32,924 | |||||||||||||||||||||||||||
|
Issuance
of stock for deferral of salary and loan payments, and preferred dividends
in lieu of cash @$1.00 per share
|
470,000 | 4,700 | 465,300 | 470,000 | |||||||||||||||||||||||||||
|
Issuance
of stock for deferral of interest payment @$1.00 per share
|
759,380 | 7,594 | 751,786 | 759,380 | |||||||||||||||||||||||||||
|
Issuance
of stock for debt @$1.00 per share
|
493,867 | 4,939 | 428,642 | 433,581 | |||||||||||||||||||||||||||
|
Net
loss for year ended April 30, 2003
|
(4,290,807 | ) | (4,290,807 | ) | |||||||||||||||||||||||||||
|
Balance
April 30, 2003
|
550,000 | 990,000 | 10,137,253 | 101,372 | 7,281,375 | (8,049,285 | ) | 323,462 | |||||||||||||||||||||||
|
Issuance
of stock for labor @$1.00 per share
|
190,500 | 1,905 | 188,595 | 190,500 | |||||||||||||||||||||||||||
See
accompanying notes to financial statements.
F-6
GISSER
AUTOMOTIVE CONCEPTS, INC.
(A
Development Stage Enterprise)
For the
Period May 22, 1997 (Inception) to January 31, 2010
STATEMENT
OF STOCKHOLDERS’ EQUITY
|
Preferred Stock
|
Common Stock
|
Additional
|
Common Stock
|
Subscription
|
Accumulated
|
Total Stockholders'
|
|||||||||||||||||||||||||||
|
(As Restated)
|
(As Restated)
|
Paid In Capital
|
To Be Issued
|
Receivable
|
Deficit
|
Equity (Deficit)
|
|||||||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
(As Restated)
|
(As Restated)
|
(As Restated)
|
(As Restated)
|
(As Restated)
|
|||||||||||||||||||||||||
|
Issuance
of stock for cash @$1.33 per share
|
255,000 | 2,550 | 335,520 | 338,070 | |||||||||||||||||||||||||||||
|
Issuance
of stock for salaries @$1.00 per share
|
200,000 | 2,000 | 198,000 | 200,000 | |||||||||||||||||||||||||||||
|
Issuance
of stock for deferral of salary and loan payments,and preferred dividends
in lieu of cash @$1.00 per share
|
520,000 | 5,200 | 514,800 | 520,000 | |||||||||||||||||||||||||||||
|
Issuance
of stock for cash not collected
|
(5,000 | ) | (5,000 | ) | |||||||||||||||||||||||||||||
|
Net
loss for year ended April 30, 2004
|
(1,121,740 | ) | (1,121,740 | ) | |||||||||||||||||||||||||||||
|
Balance
April 30, 2004
|
550,000 | 990,000 | 11,302,753 | 113,027 | 8,518,290 | (5,000 | ) | (9,171,025 | ) | 445,292 | |||||||||||||||||||||||
|
Issuance
of stock for deferral of salary and loan payments,and preferred dividends
in lieu of cash @$1.00 per share
|
421,000 | 4,210 | 416,790 | 421,000 | |||||||||||||||||||||||||||||
|
Cash
received for subscriptions receivable
|
5,000 | 5,000 | |||||||||||||||||||||||||||||||
|
Issuance
of stock for cash $2.00 to $2.50 per share
|
515,287 | 5,153 | 1,009,933 | 1,015,086 | |||||||||||||||||||||||||||||
|
Issuance
of stock for deferral of salary and loan payments,and preferred dividends
in lieu of cash @$1.00 per share
|
130,000 | 1,300 | 128,700 | 130,000 | |||||||||||||||||||||||||||||
|
Issuance
of stock for deferred interest payments @$1.00per share
|
5,000 | 50 | 4,950 | 5,000 | |||||||||||||||||||||||||||||
See
accompanying notes to financial statements
F-7
GISSER
AUTOMOTIVE CONCEPTS, INC.
(A
Development Stage Enterprise)
For the
Period May 22, 1997 (Inception) to January 31, 2010
STATEMENT
OF STOCKHOLDERS’ EQUITY
|
Preferred Stock
|
Common Stock
|
Additional
|
Common Stock
|
Subscription
|
Accumulated
|
Total Stockholders'
|
||||||||||||||||||||||||||||||
|
(As Restated)
|
(As Restated)
|
Paid In Capital
|
To Be Issued
|
Receivable
|
Deficit
|
Equity (Deficit)
|
||||||||||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
(As Restated)
|
(As Restated)
|
(As Restated)
|
(As Restated)
|
(As Restated)
|
||||||||||||||||||||||||||||
|
Issuance
of stock for labor @$1.00 per share
|
212,021
|
2,120 | 209,901 | 212,021 | ||||||||||||||||||||||||||||||||
|
Net
loss for year ended April 30, 2005
|
(1,884,917 | ) | (1,884,917 | ) | ||||||||||||||||||||||||||||||||
|
Balance
April 30, 2005
|
550,000 | 990,000 | 12,586,061 | 125,861 | 10,288,564 | (11,055,942 | ) | 348,482 | ||||||||||||||||||||||||||||
|
Issuance
of stock for cash @ $2.50 to $3.50 per share
|
241,751 | 2,418 | 642,688 | 645,106 | ||||||||||||||||||||||||||||||||
|
Issuance
of stock for labor @$2.50 to $3.50 per share
|
19,000 | 190 | 63,810 | 64,000 | ||||||||||||||||||||||||||||||||
|
Common stock to be
issued for deferral of salary (1)
|
700,000 | 700,000 | ||||||||||||||||||||||||||||||||||
|
Common stock to be
issued for deferral of loan payments (1)
|
525,000 | 525,000 | ||||||||||||||||||||||||||||||||||
|
Common stock to be
issued for options (1)
|
605,000 | 605,000 | ||||||||||||||||||||||||||||||||||
|
Net
loss for year ended April 30, 2006
|
(2,781,859 | ) | (2,781,859 | ) | ||||||||||||||||||||||||||||||||
|
Balance
April 30, 2006
|
550,000 | 990,000 | 12,846,812 | 128,469 | 10,995,062 | 1,830,000 | (13,837,801 | ) | 105,729 | |||||||||||||||||||||||||||
|
Issuance
of stock for cash $3.50 per share
|
2,857 | 29 | 9971 | 10,000 | ||||||||||||||||||||||||||||||||
|
Issuance
of stock for labor @$1.00 per share
|
5,000 | 50 | 4,950 | 5,000 | ||||||||||||||||||||||||||||||||
|
Common stock to be
issued for deferral of salary (1)
|
700,000 | 700,000 | ||||||||||||||||||||||||||||||||||
|
Common stock to be
issued for deferral of loan payments (1)
|
525,000 | 525,000 | ||||||||||||||||||||||||||||||||||
|
Common stock to be
issued for options (1)
|
192,500 | 192,500 | ||||||||||||||||||||||||||||||||||
See
accompanying notes to financial statements.
F-8
GISSER
AUTOMOTIVE CONCEPTS, INC.
(A
Development Stage Enterprise)
For the
Period May 22, 1997 (Inception) to January 31, 2010
STATEMENT
OF STOCKHOLDERS’ EQUITY
|
Preferred
Stock
|
Common
Stock
|
Additional
|
Common
Stock
|
Subscription
|
Accumulated
|
Total
Stockholders'
|
||||||||||||||||||||||||||||||
|
(As
Restated)
|
(As
Restated)
|
Paid
In Capital
|
To
Be Issued
|
Receivable
|
Deficit
|
Equity
(Deficit)
|
||||||||||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
(As
Restated)
|
(As
Restated)
|
(As
Restated)
|
(As
Restated)
|
(As
Restated)
|
||||||||||||||||||||||||||||
|
Net
loss for year ended April 30, 2007
|
(1,975,767 | ) | (1,975,767 | ) | ||||||||||||||||||||||||||||||||
|
Balance
April 30, 2007
|
550,000 | 990,000 | 12,854,669 | 128,547 | 11,009,983 | 3,247,500 | (15,813,568 | ) | (437,538 | ) | ||||||||||||||||||||||||||
|
Issuance
of stock for salaries @$1.17 per share
|
804,664 | 8,046 | 930,676 | 938,722 | ||||||||||||||||||||||||||||||||
|
Common stock to be
issued for deferral of salary (1)
|
700,000 | 700,000 | ||||||||||||||||||||||||||||||||||
|
Common stock to be
issued for deferral of loan payments (1)
|
525,000 | 525,000 | ||||||||||||||||||||||||||||||||||
|
Common stock to be
issued for options (1)
|
1,176,000 | 1,176,000 | ||||||||||||||||||||||||||||||||||
|
Net
Loss for year ended April 30, 2008
|
(2,974,161 | ) | (2,974,161 | ) | ||||||||||||||||||||||||||||||||
|
Balance
April 30, 2008
|
550,000 | 990,000 | 13,659,333 | 136,593 | 11,940,659 | 5,648,500 | (18,787,728 | ) | (71,977 | ) | ||||||||||||||||||||||||||
|
Common stock to be
issued for deferral of salary (1)
|
700,000 | 700,000 | ||||||||||||||||||||||||||||||||||
|
Common stock to be
issued for deferral of loan payments (1)
|
525,000 | 525,000 | ||||||||||||||||||||||||||||||||||
|
Common stock to be
issued for options (1)
|
1,225,000 | 1,225,000 | ||||||||||||||||||||||||||||||||||
|
Net
Loss for period ended April 30, 2009
|
(3,030,740 | ) | (3,030,740 | ) | ||||||||||||||||||||||||||||||||
|
Balance
April 30, 2009
|
550,000 | $ | 990,000 | 13,659,333 | $ | 136,593 | $ | 11,940,659 | 8,098,500 | $ | (21,818,468 | ) | $ | (652,715 | ) | |||||||||||||||||||||
See
accompanying notes to financial statements.
F-9
GISSER
AUTOMOTIVE CONCEPTS, INC.
(A
Development Stage Enterprise)
For the
Period May 22, 1997 (Inception) to January 31, 2010
STATEMENT
OF STOCKHOLDERS’ EQUITY
|
Preferred
Stock
|
Common
Stock
|
Additional
|
Common Stock
|
Subscription
|
Accumulated
|
Total
Stockholders'
|
||||||||||||||||||||||||||
|
(As
Restated)
|
(As
Restated)
|
Paid
In
Capital
|
To Be Issued
|
Receivable
|
Deficit
|
Equity
(Deficit)
|
||||||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
(As
Restated)
|
(As
Restated)
|
(As
Restated)
|
(As
Restated)
|
(As
Restated)
|
||||||||||||||||||||||||
|
Common stock to be
issued for deferral of salary (1)
|
525,000
|
525,000 | ||||||||||||||||||||||||||||||
|
Common stock to be
issued for deferral of loan payments (1)
|
393,750
|
393,750 | ||||||||||||||||||||||||||||||
|
Common stock to be
issued for options (1)
|
963,375
|
963,375 | ||||||||||||||||||||||||||||||
|
Net
Loss for period ended January 31, 2010
|
(2,453,251 | ) | (2,453,251 | ) | ||||||||||||||||||||||||||||
|
Balance
January 31, 2010
|
550,000
|
$ |
990,000
|
13,659,333
|
$ |
136,593
|
$ |
11,940,659
|
9,980,625
|
$ | (24,271,720 | ) | $ | (1,223,836 | ) | |||||||||||||||||
(1)
Please refer to the table in Note G “Common Stock to be Issued” for the actual
number of shares to be issued which corresponds to each line item.
See
accompanying notes to financial statements.
F-10
GISSER
AUTOMOTIVE CONCEPTS, INC.
(A
Development Stage Enterprise)
NOTES TO
FINANCIAL STATEMENTS
January
31, 2010
NOTE A
- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of
Business
Gisser
Automotive Concepts, Inc. (the “Company”) (A Development Stage Enterprise) was
incorporated May 22, 1997 in the State of New York. The Company
designs automobiles and has developed a prototype for future
production. The prototype is a high performance, mid-engine sports
coupe.
Going
Concern
As shown
in the accompanying financial statements, the Company has incurred cumulative
net operating losses of $24,271,714 through January 31, 2010 since inception,
has a stockholders’ deficit, negative working capital, and is considered a
company in the development stage. Management’s plans include the raising of
capital through the equity markets to fund future operations and the generating
of revenue through its business. Failure to raise adequate capital and generate
adequate sales revenues could result in the Company having to curtail or cease
operations. Additionally, even if the Company does raise sufficient
capital to support its operating expenses and generate adequate revenues, there
can be no assurances that the revenue will be sufficient to enable it to develop
business to a level where it will generate profits and cash flows from
operations. These matters raise substantial doubt about the Company’s ability to
continue as a going concern. However, the accompanying financial
statements have been prepared on a going concern basis, which contemplates the
realization of assets and satisfaction of liabilities in the normal course of
business. These financial statements do not include any adjustments
relating to the recovery of the recorded assets or the classification of the
liabilities that might be necessary should the Company be unable to continue as
a going concern.
These
financial statements include all adjustments which in the opinion of management
are necessary in order to make the financial statements not misleading. The
cumulative balances included in these statements have not been audited because
it would be impracticable to do so at this time.
Cash
Equivalents
For
purposes of reporting cash flows, cash equivalents include investment
instruments purchased with a maturity of three months or less. There
were no cash equivalents in 2010 or 2009.
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
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those
estimates.
Research and
Development
The
Company’s policy is to expense all research and development costs incurred. The
amount of Research and Development, classified within General and Administrative
expenses, that has been expensed for the nine months ended January 31, 2010 and
April 30, 2009 was $1,055 and $901 respectively. Costs that have an alternative
future use, such as tools, molds and prototype automobile are capitalized and
depreciated as per ASC Topic 730.
F-11
GISSER
AUTOMOTIVE CONCEPTS, INC.
(A
Development Stage Enterprise)
NOTES TO
FINANCIAL STATEMENTS
January
31, 2010
NOTE A -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Research and Development
(continued)
Other
costs that have an alternative future use connected solely to the inventory
automobile are capitalized and not depreciated as per ASC Topic 730, and have
been included within the balance sheet caption “Current Assets -
Inventory.”
The
Company has two vehicles that were referred to in the filing either within the
editorial or Financial Statements of our S-1 filing. The first
vehicle is referred to as the prototype which was acquired from our president on
the day of incorporation. The Company’s policy was to depreciate this
vehicle. As of July 31, 2007 this asset has been depreciated to its
full value of approximately $170,675. The second vehicle noted in the
Financial Statements is referred to as inventory which has a future or
alternative use. This second vehicle is being held in Inventory
for future sale. It is the Company’s policy to capitalize all
expenses related to the production of this asset and has been noted on our
balance sheet as approximately $130,185. Unlike other capitalized
assets, it is the Company’s policy not to depreciate this asset.
Property and Equipment and
Depreciation
Property
and equipment is stated at cost and is depreciated using the straight line
method over the estimated useful lives of the respective
assets. Routine maintenance, repairs and replacement costs are
expensed as incurred and improvements that extend the useful life of the assets
are capitalized. When property and equipment is sold or otherwise
disposed of, the cost and related accumulated depreciation are eliminated from
the accounts and any resulting gain or loss is recognized in
operations.
Net Loss Per Common
Share
The
Company computes per share amounts in accordance with Statement of Financial
Accounting Standards (“SFAS”) ASC Topic 260, “Earnings per
Share”. ASC Topic 260 requires presentation of basic and diluted
EPS. Basic EPS is computed by dividing the income (loss) available to
Common Stockholders by the weighted-average number of common shares outstanding
for the period. Diluted EPS is based on the weighted-average number
of shares of Common Stock and Common Stock equivalents outstanding during the
periods.
Stock-Based
Compensation
ASC Topic
718, “Accounting for Stock-Based Compensation” prescribes accounting and
reporting standards for all stock-based compensation plans, including employee
stock options, restricted stock, employee stock purchase plans and stock
appreciation rights.
ASC Topic
718 requires employee compensation expense to be recorded using the fair value
method. This standard was effective as of the first interim or annual
fiscal period that began after December 15, 2005. The Company accounts for
employee stock based compensation in accordance with the provisions of ASC Topic
718, and has since its adoption. For non-employee options and warrants, the
company uses the fair value method as prescribed in ASC Topic 718, and has done
so since inception.
F-12
GISSER
AUTOMOTIVE CONCEPTS, INC.
(A
Development Stage Enterprise)
NOTES TO
FINANCIAL STATEMENTS
January
31, 2010
NOTE A -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Recent Accounting
Pronouncements
In June
2009, the FASB issued ASC Topic 105, Generally Accepted Principles, which
establishes the FASB Accounting Standards Codification as the sole source of
authoritative generally accepted accounting principles (“GAAP”). The
codification did not change GAAP but recognizes the
literature. Pursuant to the provisions of ASC Topic 105,
we have updated references to GAAP in our financial statements issued for the
period ended September 30, 2009. The adoption of ASC Topic
105 did not impact our financial position or results of operations.
On
January 1, 2009, the Company adopted the new provisions of ASC Topic 350,
“Intangibles - Goodwill and Other” (“ASC Topic 350”) relating to the
determination of the useful life of intangible assets. This new provision amends
the factors that should be considered in developing renewal or extension
assumptions used to determine the useful life of a recognized intangible asset,
the objective is to improve the consistency between the useful life of a
recognized intangible asset and the period of expected cash flows used to
measure the fair value of the asset under ASC Topic 805. ASC Topic 350 applies
to all intangible assets, whether acquired in a business combination or
otherwise and is applied prospectively to intangible assets acquired after
December 15, 2008.
In June
2009, the FASB issued ASC Topic 855 “Subsequent Events” (“ASC Topic 855”). The
objective of this Statement is to establish general standards of accounting for
disclosure of events that occur after the balance sheet date but before
financial statements are issued or are available to be issued. In particular,
this Statement sets forth the period after the balance sheet date during which
management should evaluate events or transactions that may occur for potential
recognition or disclosure in the financial statements, the circumstances under
which an entity should recognize events or transactions occurring after the
balance sheet date in its financial statements and the disclosures that an
entity should make about events or transactions that occurred after the balance
sheet date. ASC Topic 855 was adopted on April 5, 2009.
The
Company evaluated all events or transactions that occurred after January 31,
2010, through March 25, 2010, the date this quarterly report on Form 10-Q was
filed with the Securities and Exchange Commission. During this period the
Company did not have any material recognizable subsequent events that required
recognition in our disclosures to the January 31, 2010 financial statements as a
result of this subsequent evaluation.
On April
5, 2009, the Company adopted the new provisions of ASC Topic 820 “Fair Value
Measurements and Disclosures” (“ASC Topic 820”). These new provisions amend ASC
Topic 820, to provide additional guidance on estimating fair value when the
volume and level of activity for an asset or liability have significantly
decreased in relation to normal market activity for the asset or liability. This
new provision also provides additional guidance on circumstances that may
indicate that a transaction is not orderly, and requires additional disclosures
about fair value measurements in annual and interim reporting periods. The
adoption of these new provisions did not have a significant impact on the
Company’s financial statements.
F-13
GISSER
AUTOMOTIVE CONCEPTS, INC.
(A
Development Stage Enterprise)
NOTES TO
FINANCIAL STATEMENTS
January
31, 2010
NOTE A -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
On
April 5, 2009, the Company adopted the new provisions of ASC Topic 825
“Financial Instruments” (“ASC Topic 825”), These new provisions require
disclosures about fair value of financial instruments in financial statements
for interim reporting periods and in annual financial statements of
publicly-traded companies. This also requires entities to disclose the methods
and significant assumptions used to estimate the fair value of financial
instruments in financial statements on an interim and annual basis and to
highlight any changes from prior periods. The adoption of these new provisions
did not have a significant impact on the Company’s financial
statements.
Inventory
Inventory
consists of a completed automobile and parts and supplies utilized in the
production of the automobile. The inventory is valued at cost on a
first in, first out basis.
NOTE B –
EQUIPMENT
Equipment
consists of the following at:
|
January 31,
|
April 30,
|
Average Useful
|
||||||||||
|
2010
|
2009
|
Life in Years
|
||||||||||
|
Machinery
and equipment
|
$ | 38,381 | $ | 38,381 | 7 | |||||||
|
Prototype
automobile
|
170,675 | 170,675 | 5 | |||||||||
|
Tools
and molds
|
1,052,500 | 1,052,500 | 15 | |||||||||
|
Web
site
|
73,150 | 73,150 | 3 | |||||||||
|
Furniture
and fixtures
|
26,827 | 26,827 | 5 | |||||||||
| 1,361,533 | 1,361,533 | |||||||||||
|
Less:
accumulated depreciation
|
828,941 | 774,445 | ||||||||||
| $ | 532,592 | $ | 587,088 | |||||||||
NOTE C -
RELATED PARTY TRANSACTIONS
The
Company has loans from individuals who are related to the Chief Executive
Officer of the Company or who are stockholders of the Company. The
loans are secured by the Company’s assets and bear interest at the rate of 10%
to 15% per annum. The total loans outstanding at January 31, 2010 and
April 30, 2009 aggregated $698,985 and $572,015, respectively. The
total loan balance outstanding due to the President and Chief Executive Officer
at January 31, 2010 and April 30, 2009 was $592,113 and $447,144
respectively.
During
the nine months ended January 31, 2010, the President advanced the Company an
additional $149,969 and was repaid $5,503.
F-14
GISSER
AUTOMOTIVE CONCEPTS, INC.
(A
Development Stage Enterprise)
NOTES TO
FINANCIAL STATEMENTS
January
31, 2010
NOTE C -
RELATED PARTY TRANSACTIONS (CONTINUED)
The
company also has agreements with the note holders to issue shares of the
Company’s common stock for loans or interest which are not repaid timely and if
the note holders agree to defer the payments. In addition, the
Company has agreements with its employees to issue shares of the Company’s
common stock for salaries which are not paid timely and if the employees agree
to defer salaries. During the nine months ended January 31, 2010 and
the year ended April 30, 2009; no shares were issued for the deferrals of
salaries or the deferral of loans but are due in the amount of 100,000 and
75,000 and 200,000 and 150,000 common shares respectively solely pertaining to
the fiscal year 2010 deferrals. Please refer to Note F “Commitments and
Contingencies“, for the number of shares due to be issued for these and other
reasons as well as the corresponding fair value of such common shares to be
issued for previous periods. The fair value of such shares are reflected in the
balance sheet line item “Common Stock to be Issued” and have a corresponding
debit entry to SG&A expense. During the same period ended January 31, 2010,
an additional 35,357 common shares are due to be issued for preferred dividends
to related parties holding preferred shares. Please refer to Note H “Dividend
Policy” for the number of shares due to be issued for this reason as well as the
corresponding fair value of such common shares to be issued for previous
periods.
Expenses
related to the upkeep of the Company’s website were paid to a party related to
the President.
NOTE D -
INCOME TAXES
The
Company has adopted Financial Accounting Statement ASC Topic 740, Accounting for
Income Taxes. Under this method, the Company recognizes a deferred
tax liability or asset for temporary differences between the tax basis of an
asset or liability and the related amount reported on the financial
statements. The principal types of differences, which are measured at
the current tax rates, are net operating loss carry forwards. At January 31,
2010 and April 30, 2009, these differences resulted in a deferred tax asset of
approximately $ 8,395,102 and $7,536,464, respectively.
ASC Topic
750 requires the establishment of a valuation allowance to reflect the
likelihood of realization of deferred tax assets. Since realization
is not assured,
the Company has recorded a valuation allowance for the
entire deferred tax asset, and the
accompanying financial statements do not reflect any net asset for deferred
taxes at January 31, 2010 and April 30, 2009.
Any
amounts listed on the income statement for the payment of taxes refers only to
the New York State minimum tax based upon the Capital Base of the company. This
amount was $0 and $325 for January 31, 2010 and April 30, 2009.
The
Company’s net operating loss carry forwards amounted to approximately
$24,271,720 at January 31, 2010 which will expire through 2026.
NOTE E -
STOCKHOLDERS’ EQUITY
During
the year ended April 30, 1998, the Company issued 500,000 shares of its
preferred stock to the President and Chief Executive Officer for a patent,
equipment and prototype automobile. The shares were valued at $1.80 per share
and were recorded under the caption patent, equipment and prototype on the
balance sheet.
F-15
GISSER
AUTOMOTIVE CONCEPTS, INC.
(A
Development Stage Enterprise)
NOTES TO
FINANCIAL STATEMENTS
January
31, 2010
NOTE E -
STOCKHOLDERS’ EQUITY (CONTINUED)
During
the year ended April 30, 1998, the Company issued 50,000 shares of its preferred
stock to the President and Chief Executive officer for labor
services. The shares were valued at $1.80 per share and were recorded
as stock based compensation having an aggregate value of $90,000.
During
the year ended April 30, 1998, the Company issued 112,500 shares of its common
stock valued at $0.10 to $0.50 per share for labor services. The
shares had a value of $24,750 and were recorded as stock based
compensation.
During
the year ended April 30, 1998, the Company issued 1,200,000 shares of its common
stock valued at $0.01 per share to the President and Chief Executive Officer for
a patent, equipment and prototype automobile contributed. The
shares had a value of $12,000 and were recorded under the caption of patent,
equipment and prototype on the balance sheet.
During
the year ended April 30, 1998, the Company issued 535,000 shares of the common
stock valued at $1.00 per share for the deferral of salary and loan payments in
consideration of late payments, and preferred stock dividends in lieu of
cash. The aggregate consideration of $535,000 was recorded as stock
based compensation.
During
the year ended April 30, 1998, the Company issued 172,000 shares of its common
stock to unrelated third parties valued at $0.50 per share for cash except for
4,000 shares issued to a related party.
During
the year ended April 30, 1999, the Company issued 245,730 shares of its common
stock for labor services valued at $0.10 to $0.50 per share. The aggregate
consideration of $54,061 was recorded as stock based compensation.
During
the year ended April 30, 1999, the Company issued 2,500 shares of its common
stock to unrelated third parties valued at $1.00 per share for
cash.
During
the year ended April 30, 1999, the Company issued 720,000 shares of the common
stock valued at $0.50 per share for the deferral of salary and loan payments in
consideration of late payments, and preferred stock dividends in lieu of cash.
The aggregate consideration of $360,000 was recorded as stock based
compensation.
During
the year ended April 30, 1999, the Company issued 691,775 shares of its common
stock for labor services valued at $0.50 per share. The aggregate
consideration of $345,887 was recorded as stock based compensation.
During
the year ended April 30, 2000, the Company issued 20,000 shares of its common
stock for labor services valued at $0.25 to $1.00 per share. The aggregate
consideration of $8,000 was recorded as stock based compensation.
During
the year ended April 30, 2000, the Company issued 10,000 shares of its common
stock for equipment to the President and Chief Executive officer at $1.00 per
share. The aggregate consideration of $10,000 was recorded under the
caption equipment and prototype.
F-16
GISSER
AUTOMOTIVE CONCEPTS, INC.
(A
Development Stage Enterprise)
NOTES TO
FINANCIAL STATEMENTS
January
31, 2010
NOTE E -
STOCKHOLDERS’ EQUITY (CONTINUED)
During
the year ended April 30, 2000 the Company issued 570,000 shares of the common
stock valued at $0.50 per share for the deferral of salary and loan payments in
consideration of late payments, and preferred stock dividends in lieu of cash.
The aggregate consideration of $570,000 was recorded as stock based
compensation.
During
the year ended April 30, 2000 the Company issued 49,000 shares of its common
stock for salaries valued at $1.00 per share. The aggregate consideration of
$49,000 was recorded as stock based compensation.
During
the year ended April 30, 2001, the Company issued 5,000 shares of its common
stock for labor services valued at $1.00 per share. The aggregate consideration
of $5,000 was recorded as stock based compensation.
During
the year ended April 30, 2001, the Company issued 525,000 shares of the common
stock valued at $1.00 per share for the deferral of salary and loan payments in
consideration of late payments, and preferred stock dividends in lieu of cash.
The aggregate consideration of $525,000 was recorded as stock based
compensation.
During
the year ended April 30, 2002, the Company issued 1,000 shares of its common
stock for labor services valued at $1.00 per share. The aggregate consideration
of $1,000 was recorded as stock based compensation.
During
the year ended April 30, 2002, the Company issued 520,000 shares of the common
stock valued at $1.00 per share for the deferral of salary and loan payments in
consideration of late payments, and preferred stock dividends in lieu of cash.
The aggregate consideration of $520,000 was recorded as stock based
compensation.
During
the year ended April 30, 2003 the Company issued 325,826 shares of its common
stock for labor services valued at $0.50 per share. The aggregate consideration
of $162,913 was recorded as stock based compensation.
During
the year ended April 30, 2003, the Company issued 2,675,751 shares of its common
stock for salaries valued at $1.00. The aggregate consideration of
$2,675,751 was recorded as stock based compensation.
During
the year ended April 30, 2003, the Company issued 32,924 shares of its common
stock for equipment to the President and Chief Executive officer at $1.00 per
share. The aggregate consideration of $32,924 was recorded under the
caption equipment and prototype.
During
the year ended April 30, 2003, the Company issued 470,000 shares of the common
stock valued at $1.00 per share for the deferral of salary and loan payments in
consideration of late payments, and preferred stock dividends in lieu of cash.
The aggregate consideration of $470,000 was recorded as stock based
compensation.
F-17
GISSER
AUTOMOTIVE CONCEPTS, INC.
(A
Development Stage Enterprise)
NOTES TO
FINANCIAL STATEMENTS
January
31, 2010
NOTE E –
STOCKHOLDERS’ EQUITY (CONTINUED)
During
the year ended April 30, 2003 the Company issued 759,380 shares of its common
stock for the deferral of interest payments valued at $1.00 per share. The
aggregate consideration of $759,380 was recorded as stock based
compensation.
During
the year ended April 30, 2003, the Company issued 493,867 shares of its common
stock at $1.00 per share to liquidate debt to related parties.
During
the year ended April 30, 2004 the Company issued 190,500 shares of its common
stock for labor services valued at $1.00 per share. The $190,500 of
consideration was recorded as stock based compensation.
During
the year ended April 30, 2004, the Company issued 255,000 shares of its common
stock to unrelated third parties at an average price of $1.33 per share for
cash.
During
the year ended April 30, 2004, the Company issued 200,000 shares of its common
stock for salaries valued at $1.00 per share. The aggregate
consideration of $200,000 was recorded as stock based compensation.
During
the year ended April 30, 2004, the Company issued 520,000 shares of the common
stock valued at $1.00 per share for the deferral of salary and loan payments in
consideration of late payments, and preferred stock dividends in lieu of cash.
The aggregate consideration of $520,000 was recorded as stock based
compensation.
During
the year ended April 30, 2005, the Company issued 421,000 shares of the common
stock valued at $1.00 per share for the deferral of salary and loan payments in
consideration of late payments, and preferred stock dividends in lieu of cash.
The aggregate consideration of $421,000 was recorded as stock based
compensation.
During
the year ended April 30, 2005, the Company issued 515,287 shares of common stock
to unrelated third parties valued at $2.00 to $2.50 per share for
cash.
During
the year ended April 30, 2005, the Company issued 130,000 shares of the common
stock valued at $1.00 per share for the deferral of salary and loan payments in
consideration of late payments, and preferred stock dividends in lieu of cash.
The aggregate consideration of $130,000 was recorded as stock based
compensation.
During
the year ended April 30, 2005, the Company issued 5,000 shares of its common
stock for the deferral of interest payments valued at $1.00 per share. The
aggregate consideration of $5,000 was recorded as stock based
compensation.
During
the year ended April 30, 2005, the Company issued 212,021 shares of its common
stock for labor valued at $1.00 per share. The aggregate consideration of
$212,021 was recorded as stock based compensation.
During
the year ended April 30, 2006, the Company issued 241,751 shares of common stock
to unrelated third parties valued at $2.50 to $3.50 per share for
cash.
F-18
GISSER
AUTOMOTIVE CONCEPTS, INC.
(A
Development Stage Enterprise)
NOTES TO
FINANCIAL STATEMENTS
January
31, 2010
NOTE E –
STOCKHOLDERS’ EQUITY (CONTINUED)
During
the year ended April 30, 2006, the Company issued 19,000 shares of its common
stock for labor valued at $2.50 to $3.50 per share. The aggregate consideration
of $19,000 was recorded as stock based compensation.
During
the year ended April 30, 2006, the Company was due to issue 200,000 shares of
its common stock for the deferral of salary valued at $3.50 per share. The
aggregate consideration of $700,000 was recorded as common stock to be
issued.
During
the year ended April 30, 2006, the Company was due to issue 150,000 shares of
its common stock for the deferral of loans valued at $3.50 per share. The
aggregate consideration of $525,000 was recorded as common stock to be
issued.
During
the year ended April 30, 2006, the Company was due to issue 495,000 shares of
its common stock for employee options valued at $0.50 to $3.50 per share. The
aggregate consideration of $605,000 was recorded as common stock to be
issued.
During
the year ended April 30, 2007, the Company issued 2,857 shares of its common
stock to unrelated third parties valued at $3.50 per share for
cash.
During
the year ended April 30, 2007, the Company issued 5,000 shares of its common
stock for labor services valued at $1.00 per share. The aggregate consideration
of $5,000 was recorded as salary expense and subsequently reclassified as stock
based compensation.
During
the year ended April 30, 2007, the Company was due to issue 200,000 shares of
its common stock for the deferral of salary valued at $3.50 per share. The
aggregate consideration of $700,000 was recorded as common stock to be
issued.
During
the year ended April 30, 2007, the Company was due to issue 150,000 shares of
its common stock for the deferral of loans valued at $3.50 per share. The
aggregate consideration of $525,000 was recorded as common stock to be
issued.
During
the year ended April 30, 2007, the Company was due to issue 55,000 shares of its
common stock for employee options valued at $3.50 per share. The aggregate
consideration of $192,500 was recorded as common stock to be
issued.
During
the year ended April 30, 2008, the Company issued 804,664 shares of its common
stock for labor services valued at $1.17 per share. The aggregate consideration
of 938,722 was recorded as salary expense.
During
the year ended April 30, 2008, the Company was due to issue 200,000 shares of
its common stock for the deferral of salary valued at $3.50 per share. The
aggregate consideration of $700,000 was recorded as common stock to be
issued.
During
the year ended April 30, 2008, the Company was due to issue 150,000 shares of
its common stock for the deferral of loans valued at $3.50 per share. The
aggregate consideration of $525,000 was recorded as common stock to be
issued.
F-19
GISSER
AUTOMOTIVE CONCEPTS, INC.
(A
Development Stage Enterprise)
NOTES TO
FINANCIAL STATEMENTS
January
31, 2010
NOTE E –
STOCKHOLDERS’ EQUITY (CONTINUED)
During
the year ended April 30, 2008, the Company was due to issue 336,000 shares of
its common stock for employee options valued at $3.50 per share. The aggregate
consideration of $1,176,000 was recorded as common stock to be
issued.
During
the year ended April 30, 2009, the Company was due to issue 200,000 shares of
its common stock for the deferral of salary valued at $3.50 per share. The
aggregate consideration of $700,000 was recorded as common stock to be
issued.
During
the year ended April 30, 2009, the Company was due to issue 150,000 shares of
its common stock for the deferral of loans valued at $3.50 per share. The
aggregate consideration of $525,000 was recorded as common stock to be
issued.
During
the year ended April 30, 2009, the Company was due to issue 350,000 shares of
its common stock for employee options valued at $3.50 per share. The aggregate
consideration of $1,225,000 was recorded as common stock to be
issued.
During
the nine months ended January 31, 2010, the Company was due to issue 150,000
shares of its common stock for the deferral of salary valued at $3.50 per share.
The aggregate consideration of $525,000 was recorded as common stock to be
issued.
During
the nine months ended January 31, 2010, the Company was due to issue 112,500
shares of its common stock for the deferral of loans valued at $3.50 per share.
The aggregate consideration of $393,750 was recorded as common stock to be
issued.
During
the nine months ended January 31, 2010, the Company was due to issue 275,250
shares of its common stock for employee options valued at $3.50 per share. The
aggregate consideration of $963,375 was recorded as common stock to be
issued.
The
Company has an informal stock option plan. The plan is non-qualified and the
options vest and are immediately exercisable.
NOTE F -
COMMITMENTS AND CONTINGENCIES
On May 1,
2007, the Company entered into a 10 year employment contract with the President
and Chief Executive Officer. The annual salary for the year ended
April 30, 2010 is $145,000. As of January 31, 2010, the Company has a liability
to the President for the deferment of salary payable in the amount of $383,750.
The Company is contingently liable under the remainder of the contract for a
total of approximately $1,191,250.
The
Company has entered into additional employment contracts with key employees
which expire in April 2017. As of January 31, 2010, the Company has a
liability to these key employees for the deferment of salary payable of
$577,500. The total contingent liabilities under the remainder of these
contracts aggregate $1,945,500. Additionally, if the salary is not
paid, the employees will receive an additional 50,000 shares of the Company’s
common stock per year for deferring payments.
F-20
GISSER
AUTOMOTIVE CONCEPTS, INC.
(A
Development Stage Enterprise)
NOTES TO
FINANCIAL STATEMENTS
January
31, 2010
NOTE F -
COMMITMENTS AND CONTINGENCIES (CONTINUED)
During
the nine months ended January 31, 2010 and the year ended April 30, 2009, the
Company did not issue any shares of the common stock to its employees for the
deferral of salary. Please refer to Note G “Common Stock to be Issued” for the
details of the shares due and their fair value.
During
the nine months ended January 31, 2010 and the year ended April 30, 2009, the
Company did not issue any shares of the common stock to the note holders who
made loans to the Company. These note holders are the President and
individuals related to the President. The shares were to be issued
under agreements whereby if the loans were not timely paid or if the note
holders agreed to payment deferrals, shares would be issued. Please refer to
Note G “Common Stock to be Issued” for the details of the shares due and their
fair value.
During
the nine months ended January 31, 2010 and the year ended April 30, 2009, the
Company did not issue any shares of its common stock to note holders for the
deferment of interest payments as no provisions in any agreement exist for any
such issuance of shares for interest payment deferral only loan payment
deferrals.
During
the nine months ended January 31, 2010 and the year ended April 30, 2009, the
Company did not issue any shares of its common stock to employees for Common
Stock Options which are due to be issued to the four directors as part of their
employment contracts. Please refer to Note G “Common Stock to be
Issued” for the details of the shares due and their fair value.
Additionally,
during the nine months ended January 31, 2010 and the year ended April 30, 2009,
the Company did not issue any shares of its common stock to stockholders of
preferred shares as part of our dividends policy. Please refer to Note H
“Dividend Policy” for the details of the shares due and their fair
value.
Any
amounts of “Common Stock to be Issued” for the deferral of loans payable,
salaries payable, employee options and preferred stock dividends will be issued
in subsequent year(s). Should the fair value of our shares decrease prior to
payment, we will not be required to increase the number of shares issued for
prior periods.
As of the
date of Incorporation, the Company had a common share repurchase provision as
follows:
Employees
may take salary in the form of Company shares at the rate of one third the
current share value in lieu of the dollars payable. Shares that have been
previously issued under this provision could have been sold back to the Company
at the current share price if funds were available. As of April 30, 2008, the
Company amended all employee agreements so that shares are no longer subject to
this provision. Further, the Company anticipates that it will not enact this
provision in the foreseeable future.
F-21
GISSER
AUTOMOTIVE CONCEPTS, INC.
(A
Development Stage Enterprise)
NOTES TO
FINANCIAL STATEMENTS
January
31, 2010
NOTE G –
COMMON STOCK TO BE ISSUED
During
the time period of application, the Company has refrained from issuing Common
Stock for deferral of salary and the deferral of loan payments. In
order to comply with GAAP, the Company has implemented an additional equity
category to account for these stocks that have been earned but not yet issued.
For January 31, 2010 and April 30, 2009 it was $918,750 and $1,225,000
respectively. Additionally, this account covers Common Stock Options
earned but not yet exercised. These amounts for January 31, 2010 and
April 30, 2009 were $963,375 and $1,225,000 respectively.
The
following is a cumulative roll forward table in this stockholders’ equity
account:
|
Number of
|
Fair Value of
|
|||||||
|
Common Shares
|
Common Shares
|
|||||||
|
To Be Issued
|
To Be Issued
|
|||||||
|
Deferral of Salary
|
||||||||
|
Balance
earned as of April 30, 2006
|
200,000 | $ | 700,000 | |||||
|
Balance
earned as of April 30, 2007
|
200,000 | 700,000 | ||||||
|
Balance
earned as of April 30, 2008
|
200,000 | 700,000 | ||||||
|
Balance
earned as of April 30, 2009
|
200,000 | 700,000 | ||||||
|
Nine
months ended January 31, 2010
|
150,000 | 525,000 | ||||||
|
Ending
Balance as of January 31, 2010
|
950,000 | $ | 3,325,000 | |||||
|
Deferral of Loans
|
||||||||
|
Balance
earned as of April 30, 2006
|
150,000 | $ | 525,000 | |||||
|
Balance
earned as of April 30, 2007
|
150,000 | 525,000 | ||||||
|
Balance
earned as of April 30, 2008
|
150,000 | 525,000 | ||||||
|
Balance
earned as of April 30, 2009
|
150,000 | 525,000 | ||||||
|
Nine
months ended January 31, 2010
|
112,500 | 393,750 | ||||||
|
Ending
Balance as of January 31, 2010
|
712,500 | $ | 2,493,750 | |||||
|
Employee Options
|
||||||||
|
Balance
earned as of April 30, 2006
|
495,000 | $ | 605,000 | |||||
|
Balance
earned as of April 30, 2007
|
55,000 | 192,500 | ||||||
|
Balance
earned as of April 30, 2008
|
336,000 | 1,176,000 | ||||||
|
Balance
earned as of April 30, 2009
|
350,000 | 1,225,000 | ||||||
|
Nine
months ended January 31, 2010
|
272,500 | 963,375 | ||||||
|
Ending
Balance as of January 31, 2010
|
1,508,500 | $ | 4,161,875 | |||||
|
Total
Common Shares to be issued
|
||||||||
|
As
of January 31, 2010
|
3,171,000 | $ | 9,980,625 | |||||
The
common stock options in the financial statements have been restated to record
the cumulative impact for such fair value of options for the years April 30,
1998 through April 30, 2006 in the statements of stockholders’ equity as the
amounts for these individual years had not been previously
recorded.
F-22
GISSER
AUTOMOTIVE CONCEPTS, INC.
(A
Development Stage Enterprise)
NOTES TO
FINANCIAL STATEMENTS
January
31, 2010
NOTE H –
DIVIDEND POLICY
We have
never declared or paid cash dividends on our common stock and anticipate that
all future earnings will be retained for development of our business. The
payment of any future dividends will be at the discretion of our Board of
Directors and will depend upon, among other things, future earnings, capital
requirements, our financial conditions and general business
conditions.
Our
Series A Preferred Stock carries a dividend equal to 5% of the original purchase
price of such preferred stock. This dividend may be paid, at our
option, in cash or in shares of our common stock. This dividend
accrues to the extent it is not declared and paid each year. If we
elect to pay the dividend in cash, it must be paid out of our earnings, after
taxes. If we elect to pay the dividend in common stock we may do so
and our board of directors determines the price at which such dividend
distribution occurs, however, the most recent or current share value, which is
determined by the last private sale of our common shares, is divided by
one-third and the resulting number is used to determine the number of common
shares to be issued in lieu of cash.
As of
January 31, 2010, the following outlines the arrearages in preferred stock
dividends to our four directors and officers who are the only holders of such
stock that have not been issued. These dividends can be taken in common stock in
lieu of cash and have been outlined below as if they will be taken in lieu of
cash:
|
Period
|
Dividend Due
|
Per Share Amount
|
Common Shares Issued
|
|||||||||
|
(Year Ended)
|
(if taken in cash)
|
(1/3 last share price)
|
(in lieu of cash dividend)
|
|||||||||
|
April
30, 2006
|
$ | 55,000 | $ | 1.167 | 47,143 | |||||||
|
April
30, 2007
|
$ | 55,000 | $ | 1.167 | 47,143 | |||||||
|
April
30, 2008
|
$ | 55,000 | $ | 1.167 | 47,143 | |||||||
|
April
30, 2009
|
$ | 55,000 | $ | 1.167 | 47,143 | |||||||
|
January
31, 2010
|
$ | 41,250 | $ | 1.167 | 35,357 | |||||||
|
Total
|
$ | 261,250 |
Total
|
223,929 | ||||||||
The
aggregate number of common shares we would have to issue in lieu of cash if we
elected to pay dividends in common shares for fiscal 2006, 2007, 2008 and 2009
and the nine months ended January 31, 2010 would be
223,929.
F-23