About Advanced Engine Technologies, Inc:
Mailing Address:
Advanced Engine Technologies, Inc.
11150 W. Olympic
Blvd.
Suite 1050
Los Angeles, CA 90064-1817
USA
DESCRIPTION OF BUSINESS
Advanced Engine Technologies, Inc. (the "Company") was incorporated under the laws of Colorado and began operations on September 23, 1996. The Company was formed to acquire the rights to manufacture, distribute, and market an OX2 combustion engine throughout the United States, Canada, and Mexico. On October 18, 1996, the Company entered into a sublicense agreement with OX2 Engine (Distribution) LTD, a company incorporated under the laws of the Republic of Vanuatu ("OX2D"), pursuant to which the Company acquired the rights to manufacture, distribute, and market the OX2 combustion engine in the NAFTA countries. Pursuant to the terms of said sublicense agreement, the Company issued 20,000,000 shares of its common stock to OX2D and agreed to pay a 15% royalty on the gross proceeds generated from actual sales of the OX2 engine. In addition, the sublicense agreement provided that the Company would issue an additional 19,000,000 shares of common stock to OX2D upon completion of certain emission testing. In December 1998, the parties agreed to rescind the obligation of the Company to issue such additional 19,000,000 shares of common stock to OX2D.
In May 1999, pursuant to a four-party agreement among and between the Company, OX2D, OX2 Intellectual Property Inc., and Advanced Engine Technology PTY Ltd., the Company acquired the worldwide patent rights for the OX2 combustion engine for $1,500,000. This agreement superseded and terminated the October 1996 sublicense agreement. The Company has assumed responsibility for worldwide patent maintenance and enforcement, as well as engine development, manufacturing, marketing, and sales activities.
As of September 30, 2002 the Company’s operations consisted of marketing, testing and developing the OX2 combustion engine for commercial applications and raising any necessary capital investments. Management does not expect to generate significant sales revenue during the year ending June 30, 2003. Accordingly, planned principal operations have not commenced.
Overview
Based on its design, AET believes its OX2 engine prototype will be fuel-efficient, lightweight, low-emission, multi-fueled and smaller and less expensive than conventional internal combustion engines. AET also believes that it will not have the complex manufacture/production requirements of conventional internal combustion engines.
At the present time five prototypes of the OX2 internal combustion engine, plus additional parts that can be used for engine development or for the building of additional prototypes, have been built. The development and testing of the prototypes are ongoing. No OX2 engines have been manufactured for production use, and no assurance can be given that the OX2 engine will be successfully developed or manufactured.
Plan of Operation
The Company plans to continue the research and development of its OX2 engine prototype during the 2002 fiscal year. AET has agreements with Steven Charles Manthey, the inventor of the OX2 engine, and his companies, that provide that Mr. Manthey and his companies will provide research and development and engine maintenance products and services to the Company to advance the development of the OX2 engine for commercial application. AET has an agreement with the University of California, Riverside ("UCR"), that provides that UCR will continue to provide engine testing and related services to the Company, with particular emphasis on testing related to emissions. These services are being provided under the guidance of Dr. Joseph Norbeck (of the CE-CERT program at UCR) and Dr. Roberta Nichols, one of AET's consultants. The Company is also conducting research and development and testing activities in Gardena, California at Carroll Shelby Enterprises where two dynamometer testrooms are currently installed.
Assuming the completion of the necessary research and development required to complete the product and assuming that the tests of the OX2 prototype are successful, AET will attempt to introduce the OX2 engine into the market. Marketing activities will include demonstrations to prospective original equipment manufacturers of products using internal combustion engines and the development of additional joint venture partners to assist in marketing the engine.
In the shorter term, the Company's plans are to develop an engine for stationary generator applications, and in the longer term, it plans to develop an engine for automobile, marine and/or aircraft applications.
Name Age Current Position
---- --- ----------------
Noel Holmes 53 Director
Steven Charles Manthey 41 Director
Alexandria Phillips 54 Director, Treasurer
Richard C. Ronzi 64 Director
Carroll Shelby 78 Director, President
John Luft 45 Chief Operating Officer
M. Neil Cummings 51 Secretary
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Directors will serve in such capacity until the next annual meeting of shareholders and until their successors have been elected and qualified. Officers serve at the discretion of the directors. There are not any arrangements or understandings between any director or officer or any other person pursuant to which any officer or director was or is to be selected as an officer or director.
Biographical information follows for each individual elected as director at the Annual Meeting and for each executive officer.
Carroll Shelby has over 50 years of successful experience in the engine industries. He has been inducted into a number of automotive-related Halls of Fame. Mr. Shelby has been president since May 2000 and a director since 1998.
Mr. Shelby is a founder and director of:
John Luft was the director of resorts/attractions marketing for the Walt Disney Corporation at the Walt Disney World (WDW) Resort in Orlando, Florida from 1992 to 1994. From 1985 to 1992, Mr. Luft was the corporate director of U.S. marketing for Hilton Hotels Corporation and from 1994 to 1999 he served as Hilton's director of global and strategic partnership & product development. He also served as the senior vice president of global marketing and sales and business development at SkyNet Holdings, Inc. from 1999 to 2000. Mr. Luft earned a BA degree from the University of Southern California in Marketing and Speech Communications. Mr. Luft has been chief operating officer since September 2001.
M. Neil Cummings has been a practicing lawyer in the State of California since 1977 and was a partner for many years in the Los Angeles law firm of Walker, Wright, Tyler & Ward. In July 1995, Mr. Cummings founded, and is currently the owner and president of, M. Neil Cummings and Associates, a professional law corporation that focuses on the area of business law, with an emphasis on licensing and intellectual property matters. Mr. Cummings has been secretary since 1999.
Alexandria Phillips brings to the Company her years of wide ranging experience and expertise as a tax advisor and financial consultant to Robert E. Petersen and entities controlled by Mr. Petersen. Ms. Phillips resides in Southern California and has been treasurer since 2000 and a director since 1999.
Mr. Holmes is a native of Australia, but spends a good deal of time in Southern California, while maintaining a diverse international business and accounting practice. Mr. Holmes commenced his career in 1968 while practicing in an Australian chartered accounting firm, earned certificates in Australian practicing from the Institute of Chartered Accountants in 1973 and has practiced as a senior partner in an Australian chartered accounting firm since 1974. Mr. Holmes is a director of private investment and property companies in the United States, Australia, Singapore, the United Kingdon and Malaysia. Mr. Holmes has been a director since 1999.
Steven Charles Manthey is an inventor and conducts research and development in connection with engines and related devices. Mr. Manthey has been one of our directors since 2001. He resides and works on the southeastern Gold Coast of Queensland, Australia near Burleigh Heads.
Richard C. Ronzi recently retired after 38 years with Ford Motor Company. Mr. Ronzi's positions at Ford included Director, Power Train Research; Executive Director, Engineering and Manufacturing Staff; Vice President/Chief Engineer, Ford New Holland; and Chief Engineer, Transmission/Driveline Engineering. Mr. Ronzi played a major role in Ford's work with the orbital engine, Wankel engines, advanced gas turbines, Stirling engines and commercial truck direct injection Diesel engines. Mr. Ronzi earned a BSME degree from the University of Detroit and a MSME degree from the University of Michigan. Mr. Ronzi has been a director since 2000.
PRINCIPAL SHAREHOLDERS
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* |
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Less than 1%.
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1) |
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Applicable
percentage of ownership is based on 33,705,000 shares of AET common
stock outstanding as of October 3, 2002. Shares of AET common stock
that a person has the right to acquire within 60 days of October 3, 2002
are deemed outstanding for purposes of computing the percentage ownership
of the person holding such rights, but are not deemed outstanding for
purposes of computing the percentage ownership of any other person, except
with respect to the percentage ownership of all directors and executive
officers as a group. |
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2) |
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Includes 13,195,534
shares that are directly owned by the R.E. & M. Petersen Living Trust
DTD 1/17/83 (the “Petersen Trust”). Robert E. and Margaret M. Petersen
(the “Petersens”) are the trustees of the Petersen Trust. Also includes
4,000,000 shares of AET common stock issuable upon the exercise of
outstanding options granted to Mr. Petersen which were subsequently
transferred to the Petersen Trust. The Company has been informed that the
remaining 5,791,619 shares are beneficially owned by Steven Charles
Manthey, one of AET's directors, but are subject to a voting
agreement dated as of September 27, 2001 between Mr. Manthey and the
Petersens, individually and as trustees of the Petersen Trust, pursuant to
which Mr. Manthey has agreed to vote such shares at all shareholder
meetings in the same manner that shares beneficially owned by the
Petersens and the Petersen Trust are voted at such shareholder meetings,
other than in circumstances where any proposal, resolution or issue at any
such shareholder meeting relates to Mr. Manthey personally or during any
period that Mr. Manthey ceases to be a director of the Company. The voting
agreement is for a term of 20 years, or for so long as the Company
continues to do business as a corporate entity, whichever is longer. The
Company has been informed that the Petersens and the Petersen Trust have
no economic interest in, or investment control with respect to, the shares
beneficially owned by Mr. Manthey. |
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3) |
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Includes 3,981,619
shares that are held of record by Macro Management Group, Inc. and
1,000,000 shares that are held of record by Resolution Services Ltd., all
of which the Company understands are beneficially owned by the Estate of
Paul Ebbage. |
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4) |
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Includes 3,950,000
shares that are held of record by Trinity Enterprises S.A. and 1,781,619
shares that are held of record by Goldwater Estates Inc., all of which the
Company has been informed are beneficially owned by Steven Charles
Manthey. Also includes 50,000 shares of AET common stock issuable
upon the exercise of outstanding options granted to Mr. Manthey under the
Company’s 2000 Stock Incentive Plan, as amended.
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5) |
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Includes 2,000,000
shares of AET common stock issuable upon the exercise of outstanding
options granted to Mr. Shelby under the Company’s 2000 Stock Incentive
Plan, as amended. |
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6) |
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Includes 375,000
shares of AET common stock issuable upon the exercise of outstanding
options granted to Ms. Phillips under the Company’s 2000 Stock Incentive
Plan, as amended. |
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7) |
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Includes 375,000
shares of AET common stock issuable upon the exercise of outstanding
options granted to Mr. Holmes under the Company’s 2000 Stock Incentive
Plan, as amended. |
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8) |
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Includes 275,000
shares of AET common stock issuable upon the exercise of outstanding
options granted to Mr. Cummings under the Company’s 2000 Stock Incentive
Plan, as amended. |
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9) |
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Includes 300,000
shares of AET common stock issuable upon the exercise of outstanding
options granted to Mr. Luft under the Company’s 2000 Stock Incentive Plan,
as amended. |
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10)
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Includes 225,000
shares of AET common stock issuable upon the exercise of outstanding
options granted to Mr. Ronzi under the Company’s 2000 Stock Incentive
Plan, as amended. |