President's Letter - June 18, 2007
Dear Shareholders,
It’s been a long time since my last letter to address the ‘state of affairs’ at Chariot. The lack of communication in no way reflects a lack of progress. In fact, the changes at Chariot have been monumental in scope and direction. The accomplishments have not been of a nature that has allowed us to celebrate with immediate revenue and profits. However, those significant accomplishments have helped build a profitable future. I know that that is a short term disappointment to all ….management included. Management, however, believes that every dollar and working hour spent was necessary and represents invaluable preparation for the success of the company.
I know that whatever I write in this letter, it will be criticized by some. Too positive or too negative will be heard. So, I guess I’ll just give you what I know to be a factual report and let you make the call!
We have referred to ‘tooling’ many times and referenced the completion of ‘tooling’ on several occasions. The process of ‘tooling’ has been challenging and there seems to be conflict in our statements about the completion of ‘tooling’. The reality is ‘tooling’ is a critical part of research and development. Along the way, molds that had been rebuilt were replaced with redesigns and new designs. Each modification and each new concept required countless hours of research and development, as well as substantial amounts of material and labor. The time and material spent in developing these new molds is reflected on the balance sheet. The real value of the work will be the amazing line of products that we are now able to produce. Our trailers are sleek, sturdy and stylish. Aerodynamic and light weight, our trailers are the most economical to tow and with the cost of fuel, that is no small advantage! I am proud of our new line of products and so are new Chariot customers.
We have introduced and produced both a sixteen and a twenty three foot RV equipped trailer in the last year. Although we introduced the design over a year ago, production was hindered by the complexity of the detailed interior liner. When production was actually able to begin, it was done on a very limited basis due to limited cash availability. Craig Weisiger bought one of the first produced.
Mr. Weisiger recently wrote the following:
“I am a very happy owner of a 16 ft Chariot of the new design …... I have shown my trailer to many and have had positive feedback. I hope that the news on June 18 is positive toward Chariot. Just to let you know, I have my trailer on an aluminum frame and actually have loaded a Goldwing and a Silverwing in the trailer, unhooked from my tow vehicle (2001 Honda Odyssey) and by hand pulled the trailer to the vehicle and connected it. No other trailer could you do this with.
Yes, you can use me in your marketing. I looked for years for a trailer…………. When I found Chariot and called, I discovered that the Chariot staff was retooling. I made suggestions and they listened. As a result, I now have a trailer that I can load 2 Goldwings in and they fit…. with a trailer that is light enough to pull with my Honda Odyssey van! I am able to travel in overdrive on flat land and at speeds of 70 MPH on the freeway. I had one instance when a large board flew out of a truck in front of me while traveling 70MPH and had to emergency break. The dual trailer breaks did their job and I was able to keep my vehicle straight and under control. The really important thing is the aluminum frame gives me the weight advantage to be able to use my Honda van as a tow vehicle……..just what I was looking for.
I will be at the Honda Hoot this month and will have the trailer with me. I always get people that want to look at my trailer and I will be promoting Chariot Trailers. When I find something that I like, I tell everyone about it.”
This is a typical Chariot customer reaction to our new Chariot designs. I had hoped to be able to direct you to Chariot’s new website to read this testimonial, but alas, I have been informed that we need a little more time in development of our site. I am also told that it will be well worth the wait!
We are preparing to move into full production. The research and development is complete. The tooling is ready. Our limited production has verified the quality control and satisfaction that will cause our customers to market our trailers by word of mouth and the pride show and tell.
New applications for our trailers appear routinely and we are exploring those opportunities. However, new applications will require additional tooling and our consideration is to make that process a revenue and profit center, as opposed to all expense, benefiting only the balance sheet. One such opportunity is now under consideration and negotiation. A 24 year old off-road vehicle manufacturer has commissioned Chariot to design a trailer specifically for their products. It would include the ability to carry multiple vehicles at once. The resulting single or multi-vehicle trailers will be included in the dealer package upon establishment of new dealerships. Chariot, by name is already included in their dealer literature. They have projected fourteen new dealerships within one year. These units would include our RV package and would range from $25K to $65K. We will not begin production of the tooling unless and until deposits are in place to make that process a revenue and profit center. The resulting product will also be useful in transportation of hot rod cars that we will soon begin to produce, transportation of multiple motorcycles for rallies and carrying other Chariot trailers for delivery or to set up at shows.
Currently under discussion for Chariot is a Chariot ‘Tailgator’ with endorsement from a major NFL figure. The Tailgator would be displayed and used at significant sporting and charitable events. We anticipate being able to make an announcement about this affiliation in the next couple of weeks. We expect high demand for this trailer style based upon preliminary results.
We have recently announced the establishment of our first Chariot Dealership in Pittsburgh, Pennsylvania. We expect to complete the terms and conditions soon. Mr. Celovsky sold his highly successful Harley Davidson dealership and will soon open his new BMW dealership. His motorcycle knowledge, combined with his sales and service experience will make him the ideal representative of Chariot Manufacturing.
The last piece of the puzzle for Chariot to come of age and begin to be the asset to AACS that all have anticipated is funding. American Commerce Solutions, Inc., as parent to Chariot has provided hundreds of thousands of dollars and countless hours of labor to create the proper foundation and launching pad for Chariot to reach its potential. Now it is time for Chariot to launch. However, despite the money previously spent, Chariot still needs additional working capital to ramp up production. The following steps have been taken to facilitate production. We are now established with two (2) commercial banks to provide financing for approved Chariot customers. Additionally, we expect to have Purchase Order financing in place within the next two weeks that will allow us to produce the backlog of orders now and for future bike shows. And, last but not least, upon signing of the official dealership agreements, a substantial inventory order will be placed and funded.
Additionally, we have a standing offer for our shareholders to participate in a Corporate Promissory Note bearing 10% interest per annum. The Notes are collateralized and personally guaranteed. Approximately $75K will allow a kick start to the new production. This allows us to bring in the required inventory, without waiting for dealership signing, PO financing, or new order backlog.
If anyone wishes too participate, I am available by email or phone.
Chariot is on the verge of being the company that shareholders celebrated over three and one half years ago. We have incrementally, methodically and substantially improved every facet of the company. Each of these elements give us cause to celebrate the milestones achieved by the Chariot team; Ken McCleave, General Manager; Jerry Potter, Tooling Specialist; Terry Tyree, Sales and Assistant Production Manager; Kristal Beckum, Administrative Assistant; and, Curt, DJ and Richard in fabrication and assembly. We are appreciative of their sacrifice, support and dedication to the success of the company.
I will leave you with one last thought. Management has recently come to verbal agreement on an acquisition for Chariot. A formal memorandum of understanding is expected before the end of June. If completed, this acquisition will provide immediate revenue, exposure and opportunity in fiberglass leisure products. Exciting days are ahead and I believe that soon our share price will begin to reflect the value that lies within the potential that many of you have perceived.
Thank you for your patience and support for American Commerce Solutions, Inc., IMW and Chariot. I thank God often for your loyal support.
Sincerely,
/s/Dan Hefner, President
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this release that are not historical, are forward-looking statements that are subject to risks and uncertainties that could cause results to differ materially from those expressed in the forward- looking statements, including, but not limited to, certain delays and risks detailed from time to time in the company's filings with the Securities and Exchange Commission
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