Might want to read Saleen's most recent financial statements to support opinions:
CPA's Going Concern Statement:
Recap:
Operating loss of $625,731
Working capital deficit of $9,200,677
Company owed $716,356 in past unpaid payroll and other taxes,
$605,986 of outstanding notes payable were in default;
$837,721 of accounts payable was greater than 90 days past due; and
$333,913 is owed on past due rent.
Saleen has collected $1.3M from customer deposits and spent all but $85K
Not enough cash or inventory to build their customer's cars.
In addition, in May 2015, the Company received a complaint from a bank alleging breach of the loan agreement and breach of a commercial guaranty by Steve Saleen and demanding full payment of principal, interest and fees of $369,302
Also Saleen does not have Workman's Compensation, General Liability or Product Liability Insurances
The Company’s condensed consolidated financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. During the three months ended June 30, 2015, the Company incurred an operating loss of $625,731 and utilized $31,366 of cash in operations. The Company also had a stockholders’ deficit and working capital deficit of $9,200,677 and $6,412,557, respectively, as of June 30, 2015, and as of that date, the Company owed $716,356 in past unpaid payroll and other taxes, which the Company has an installment agreement with the IRS whereby the Company is paying $10,000 a month; $605,986 of outstanding notes payable were in default; $837,721 of accounts payable was greater than 90 days past due; and $333,913 is owed on past due rent. In addition, in May 2015, the Company received a complaint from a bank alleging breach of the loan agreement and breach of a commercial guaranty by Steve Saleen and demanding full payment of principal, interest and fees of $369,302. A default under the loan agreement triggers a cross default under the Company’s 3% Senior Secured Convertible Notes and 7% Convertible Notes (see Note 5) enabling the holders thereof to, at their election until the later of 30 days after such default is cured or otherwise resolved or the holder becomes aware of such cure or resolution, accelerate the maturity of the Company’s indebtedness. Further, as of the date of this Form 10-Q filing, the Company was in default with certain unsecured notes payable (see Note 5) due to insufficient availability of authorized shares to fulfill the note holders’ reserve and conversion requests. In addition, the Company does not currently maintain workers’ compensation, product liability and other general insurance.
These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s independent auditors, in their audit report for the year ended March 31, 2015, expressed substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.
The Company’s ability to continue as a going concern is dependent upon its ability to raise additional capital and to ultimately achieve sustainable revenues and profit from operations. At June 30, 2015, the Company had cash on hand in the amount of $85,406 and is not generating sufficient funds to cover operations. The Company has utilized funding to operate the business during the three months ended June 30, 2015 with advance royalty payments of $500,000 obtained from an Intellectual Property License Agreement entered into in June 2015. However, the Company will need and is currently seeking additional funds, primarily through the issuance of debt or equity securities to operate its business through and beyond the date of this Form 10-Q filing. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions and covenants on its operations, in the case of debt financing or cause substantial dilution for its stockholders in the case of convertible debt and equity financing.
These comments are my opinion and Saleen's CPA's Going Concern Statement . Invest based on your own research and conclusions.
