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-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AjfrIDJBqoB4XloRLZ/ktVVBLheuigx5JXy44bOFc+qR2idbdAlGX7Sj/IvBTztH 3hx7D1whDm/ep7e2wocdUQ== 0001193125-10-084342.txt : 20100415 0001193125-10-084342.hdr.sgml : 20100415 20100415160107 ACCESSION NUMBER: 0001193125-10-084342 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20091231 FILED AS OF DATE: 20100415 DATE AS OF CHANGE: 20100415 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENERAL AUTOMOTIVE CO CENTRAL INDEX KEY: 0001376668 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE & VIDEO TAPE PRODUCTION [7812] IRS NUMBER: 203893833 FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-137755 FILM NUMBER: 10752076 BUSINESS ADDRESS: STREET 1: 50 WEST LIBERTY STREET, SUITE 880 CITY: RENO STATE: NV ZIP: 89501 BUSINESS PHONE: 970-710-1799 MAIL ADDRESS: STREET 1: 50 WEST LIBERTY STREET, SUITE 880 CITY: RENO STATE: NV ZIP: 89501 FORMER COMPANY: FORMER CONFORMED NAME: GENERAL AUTOMATIVE CO DATE OF NAME CHANGE: 20080226 FORMER COMPANY: FORMER CONFORMED NAME: UTILITY INVESTMENT RECOVERY, INC. DATE OF NAME CHANGE: 20071128 FORMER COMPANY: FORMER CONFORMED NAME: Bridgefilms, Inc. DATE OF NAME CHANGE: 20060927 10-K 1 d10k.htm FORM 10-K Form 10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

x	ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2009

¨	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

For the transition period from to

Commission file number: 333-137755

General Automotive Company

(Name of small business issuer in its charter)

Nevada

20-3893833

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)


5422 Carrier Drive, Suite 309 Orlando, FL		32819
(Address of principal executive offices)		(Zip Code)

Issuer’s telephone number: 407-363-5633

Securities registered under Section 12(b) of the Exchange Act:


Title of each class		Name of each exchange on which registered
None		not applicable

Securities registered under Section 12(g) of the Exchange Act:


Title of each class		Name of each exchange on which registered
None		not applicable

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 Section 15(d) of the Act. Yes ¨ No x

Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the past 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 days. Yes x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) 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-K or any amendment to this Form 10-K. Yes ¨ No x

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 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: $788,221 at June 30, 2009.

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 23,854,417 as of March 26, 2010.

TABLE OF CONTENTS


		Page

PART I

Item 1.	Description of Business	1
Item 2.	Description of Property	2
Item 3.	Legal Proceedings	2
Item 4.	Submission of Matters to a Vote of Security Holders	3

PART II

Item 5.	Market for Common Equity and Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities	3
Item 6.	Not Required	3
Item 7.	Management’s Discussion and Analysis or Plan of Operation	4
Item 8.	Financial Statements	6
Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	22
Item 9A.	Controls and Procedures	22

PART III

Item 10.	Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of the Exchange Act	25
Item 11.	Executive Compensation	27
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	29
Item 13.	Certain Relationships and Related Transactions, and Director Independence	30
Item 14.	Principal Accountant Fees and Services	30
Item 15.	Exhibits	31

PART I

Item 1.

Description of Business

Business Development

We were originally incorporated on October 7, 2005 in Nevada. On February 22, 2008, we completed a reverse merger (the “Merger) with a private Nevada corporation, Global Automotive Supply, Inc. (“GAS Nevada”), who was considered the accounting acquirer in the Merger. As a result of that transaction, we assumed the business operations of GAS Nevada and changed our name to “General Automotive Company” (“GAC”). We reported the Merger and the related transactions on a current report on Form 8-K, filed February 28, 2008. Our principal executive offices are located at 5422 Carrier Drive, Suite 309, Orlando, FL 32819. Prior to the disposal of our wholly-owned subsidiary, Global Parts Direct, Inc. (“GPD”) on November 14, 2008 we were in the business of providing mobile electronics, conventional auto parts, and accessories directly to auto manufacturers, vehicle processing centers, and major distributors, both domestically and internationally.

Our business model now focuses on automotive parts sales and distribution. OE Source L.C., a Florida limited liability company (“OES”), and our remaining wholly-owned subsidiary, focuses on purchasing, selling and distributing engine management products and other traditional auto parts to the largest US distributors. We acquired the operations and assets of OES a wholly-owned subsidiary in January of 2007.

Description of Business

We are a provider of Original Equipment (“OE”) and aftermarket automotive parts and related automotive products at multiple levels of distribution throughout the United States and internationally. Through our wholly-owned subsidiary, OES, we have focused our efforts on utilizing our relationships with manufacturers in China, Korea and Japan to bring state-of-the-art automotive parts, accessories and products to automobile manufacturers and major parts distributors in the U.S.

OES is selling conventional auto parts that it imports directly from manufacturers, consolidators and distributors in the Far East to major customers in the United States. OES currently offers a suite of automotive engine management parts to large US distributors. These distributors then resell our products to automakers, dealerships, automotive repair shops, and retail outlets. OES specializes in and focuses on engine management products such as oxygen sensors and throttle position sensors, as well as other key under hood and brake systems components.

OES has grown rapidly since its inception in 2004, and our plan is to promote further growth during the next three to five years. During this period, OES will attempt to expand its customer base by increasing its sourcing and supply chain capabilities, adding employees to supplier identification and qualification, auditing, and supply chain management tasks.

Industry Overviews

Original Equipment Manufacturers

The automotive OEM industry is the segment of the automotive industry that develops, manufactures, and provides parts to auto manufacturers to include in their products. The components in an automobile are rarely manufactured by the carmaker itself. Rather, they are purchased from OEMs, branded as the carmaker’s own by the OEM, and installed during the production process on automobile production assembly lines. This allows carmakers to focus on their core competencies and has created a significant industry for the manufacture of parts for the major automakers. These automakers have standards of quality, price, and service, and based upon those standards, approve a certain number of distributors and suppliers to provide parts for their vehicles. Those suppliers may, in turn, either purchase the parts they supply or manufacture the parts themselves. Either way, they must ensure that the automakers’ standards are being met, or risk losing their position as an approved supplier to the automaker.

Automotive Aftermarket

The automotive aftermarket is the segment of the automotive industry concerned with the manufacturing, remanufacturing, distribution, retailing, and installation of all vehicle parts, chemicals, tools, equipment and accessories for use with vehicles of every type after the manufacturer has completed the production process. Estimated as a $265 billion market in the United States, the aftermarket is a major US industry, encompassing parts for replacement, collision, appearance and performance. The aftermarket industry provides a wide variety of parts of varying qualities and prices for nearly all vehicle makes and models on the road and employs 4.54 million people in the United States at manufacturers, distributors, retailers and repair shops. According to the Aftermarket Automotive Industry Association, due to mandated Federal government regulations, engine management products have become and are anticipated to remain one of the fastest growing segments within the aftermarket automotive parts industry. This segment of the industry utilizes OEMs to provide replacement parts for repairs and upgrades to dealers, auto repair shops, and retail outlets.

Competition

The automotive parts supply industry is highly fragmented and extremely competitive. There are a large number of competitors in this market with significantly greater resources and experience than we have. However, the market is large, and very few competitors hold significant market share. Additionally, there are few barriers to entry for new companies entering the market and offering similar products or services. However, as a result of our direct relationship to manufacturers in Asia, we believe that we presently enjoy a competitive advantage in terms of quality and pricing that allows us to leverage these relationships into increased market share and profitability.

There are five major national competitors in OES’s engine management marketplace – Denso, NTK, Robert Bosch, AC Delco and Walker Supply. Each of these, as well as the other companies in the marketplace, focuses on a niche, as none is large enough to supply all facets of the automotive parts supply chain. We have been able to take advantage of our sourcing ability and relationships to create a demand for our products in the marketplace and cultivate a unique niche for our OES business as a specialist in procuring hard-to-find parts, particularly in the engine management segments of the industry.

As a distributor, the barriers to entry for a company to provide similar products and services are minimal, making it possible for new competitors to enter the market with relative ease. In addition, many of the existing and potential competitors have longer operating histories, greater name recognition, larger consumer bases and significantly greater financial, technical and marketing resources. However, we have developed exclusive import arrangements with our tier-one manufacturers and can sell the products to dealerships at a very competitive price.

Patents and Intellectual Property

We do not own any patent, trademark, or legally enforceable claim to proprietary intellectual property.

Governmental Regulation

We are unaware of and do not anticipate having to expend significant resources to comply with any governmental regulations of the automotive electronics and accessories industry. We are subject to the laws and regulations of those jurisdictions in which we plan to sell our product, which are generally applicable to business operations, such as business licensing requirements, income taxes and payroll taxes. In general, the sale of our Products is not subject to special regulatory and/or supervisory requirements.

Compliance with Environmental Laws

We have not incurred and do not anticipate incurring any expenses associated with environmental laws.

Employees

We have thirteen (13) employees, primarily consisting of management, administrative, and warehouse personnel. Nine of these individuals are employees of OES, and two are direct employees of GAC. We have one contract sourcing person in China whom we currently retain as an independent contractor. We also retain consultants to assist in operations on an as-needed contract basis.

Research and Development Expenditures

We have not incurred any research or development expenditures since our incorporation.

Subsidiaries

We currently have one wholly owned subsidiary, OE Source L.C, a Florida limited liability company (“OES”).

Item 2.

Description of Property

Our principal executive offices are located at our warehouse at 5422 Carrier Drive, Suite 309, Orlando, FL 32819. We pay $6,809 per month to lease this property, and the lease is scheduled to expire on November 30, 2011. We do not own or lease any other significant property.

Item 3.

Legal Proceedings

We are not a party to any pending legal proceedings where any officer, director, affiliate of owner of 5% or more of our common stock is adverse to us or where the amount of damages claimed, exclusive of interest and costs, exceeds ten percent of our current assets. Pursuant to the terms of the Merger, responsibility for any liability emerging from our pre-merger business relies wholly with our pre-merger management.

Item 4.

Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of the Company’s shareholders during the year ended December 31, 2009.

PART II

Item 5.

Market for Common Equity and Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities

Market Information

Our authorized capital stock consists of 90,000,000 shares of common stock, $0.001 par value per share and 10,000,000 shares of Preferred Stock, par value $0.001 per share. There were 23,847,417 shares of common stock issued and outstanding and 0 shares of Preferred Stock issued and outstanding as of December 31, 2009.

The Company’s common stock trades on the OTC Bulletin Board under the symbol of “GNAU.OB”. Prior to March 10, 2008, the common stock traded under on the OTC Bulletin Board under the symbol of “UIRI.OB.” As of March 26, 2010 the closing sale prices of the common stock was $0.10 per share. The following are the high and low sale prices for the common stock by quarter as reported by the OTC Bulletin Board for the last two fiscal years.


Fiscal Year Ending December 31, 2009
Quarter Ended	High $	Low $
December 31, 2009	0.16	0.04
September 30, 2009	0.51	0.07
June 30, 2009	0.12	0.05
March 30, 2009	0.40	0.12

Fiscal Year Ending December 31, 2008
Quarter Ended	High $	Low $
December 31, 2008	0.52	0.17
September 30, 2008	0.68	0.18
June 30, 2008	1.35	0.41
March 30, 2008	n/a	n/a

The quotations and ranges listed above were obtained from OTCBB. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.

Holders of Our Common Stock

As of December 31, 2009, we had 23,847,417 shares of our common stock issued and outstanding, held by110 shareholders of record.

Dividends

The Company has not declared, or paid, any cash dividends since inception and does not anticipate declaring or paying a cash dividend for the foreseeable future.

Nevada law prohibits our board from declaring or paying a dividend where, after giving effect to such a dividend, (i) we would not be able to pay our debts as they came due in the ordinary course of our business, or (ii) our total assets would be less than the sum of our total liabilities plus the amount that would be needed, if the corporation were to be dissolved at the time of distribution, to satisfy the rights of any creditors or preferred stockholders.

Securities Authorized for Issuance Under Equity Compensation Plans

We have no stock compensation plans. The board of directors has granted stock purchase options to officers and directors based on employment contracts and discretionary basis.

Item 6.

Selected Financial Data

None Required

Item 7.

Management’s Discussion and Analysis or Plan of Operation

THE FOLLOWING DISCUSSION SHOULD BE READ TOGETHER WITH THE INFORMATION CONTAINED IN THE FINANCIAL STATEMENTS AND RELATED NOTES INCLUDED ELSEWHERE IN THIS ANNUAL REPORT.

Forward-Looking Statements

The following discussion reflects our plan of operation. This discussion contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, including statements regarding our expected financial position, business and financing plans. These statements involve risks and uncertainties. Our actual results could differ materially from the results described in or implied by these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Form 10K.

This Annual Report on Form 10-K contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. To the extent that any statements made in this Report contain information that is not historical, these statements are essentially forward-looking. Forward-looking statements can be identified by the use of words such as “expects,” “plans,” “will,” “may,” “anticipates,” believes,” “should,” “intends,” “estimates,” and other words of similar meaning. These statements are subject to risks and uncertainties that cannot be predicted or quantified and, consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation:

•

Our limited and unprofitable operating history;

•

the ability to raise additional capital to finance our activities;

•

legal and regulatory risks associated with the Merger;

•

the future trading of our common stock;

•

our ability to operate as a public company;

•

general economic and business conditions;

•

the volatility of our operating results and financial condition; and

•

our ability to attract or retain qualified senior scientific and management personnel.

The foregoing factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this Annual Report on Form 10-K.

Information regarding market and industry statistics contained in this Report is included based on information available to us that we believe is accurate. It is generally based on industry and other publications that are not produced for purposes of securities offerings or economic analysis. We have not reviewed or included data from all sources, and cannot assure investors of the accuracy or completeness of the data included in this Report. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and the additional uncertainties accompanying any estimates of future market size, revenue and market acceptance of products and services. We do not undertake any obligation to publicly update any forward-looking statements. As a result, investors should not place undue reliance on these forward-looking statements.

Overview

Our business model focuses on automotive parts sales and distribution. Through our wholly-owned subsidiary, we focus on selling and distributing engine management products and other traditional auto parts to the largest US distributors. Our management intends to continue expanding the customer base of OES and its level of sales. At the same time we plan to increase the volume of our business through the acquisition of similar companies involved in the sale and distribution of automotive parts.

Discussion and Analysis

As discussed in greater detail on a current report on our Form 8-K filed February 28, 2008, we entered into a Merger Agreement on February 22, 2008, with GAS Nevada whereby GAS Nevada merged with and into UIR Sub, and we subsequently merged with UIR Sub in a short-form merger transaction under Nevada law and, in connection with this short form merger, changed our name to General Automotive Company, effective February 22, 2008. As a result of the merger, in exchange for 100% of the outstanding capital stock of GAS Nevada, the former stockholders of GAS Nevada had the right to receive 8,149,535 shares of our common stock, which represented approximately 58.70% of our outstanding common stock following the Merger and related transactions. Thus, GAS Nevada is considered the accounting acquirer in the Merger, and all references to our financial and other history in this Form 10K, and in particular in the Management’s Discussion and Analysis section, refer to the history of GAS Nevada unless the context specifically indicates that we are referencing the businesses of Bridgefilms or UIR.

Through the Merger, we also acquired 100% interest in the two wholly-owned subsidiaries of GAS Nevada, Global Parts Direct, Inc. (“GPD”) and OE Supply, LC (“OES”). OES is our sole operating subsidiary at present. During the third quarter of 2008, we decided to discontinue the operations of our wholly-owned subsidiary, GPD. During November 2008 our board of directors agreed to the disposal of GPD through a sale of selected assets. This sale was closed on November 14, 2008. The sale was fundamentally at liquidation value resulting in a loss on disposal of $946,790. The board’s decision was based on continued reductions in the demand for the type of electronic products that were being provided by GPD during the year combined with customer pricing pressures and the inability to source low product quantities at favorable pricing. All of our business operations are now conducted through the remaining subsidiary, OES as described above (see “Description of Business”). Our combined Net Loss for the Year ended December 31, 2009 was $1,177,712 compared to $3,318,765 for the prior year.

Results of Operations for the Years Ended December 31, 2009 and December 31, 2008

We generated $11,487,908 in revenues during the year ended December 31, 2009, compared to $12,383,241 during the year ended December 31, 2008. The overall contraction of the aftermarket automotive parts industry in general and specifically to a decrease in sales to a key customer contributed to the reduction in revenue for the twelve months ended December 31, 2009. The general economic conditions during the year diminished the previous realized growth to only approximately $895,000 in revenue. Although there was a decrease in revenue in for the twelve months ended December 31, 2009 when compared to the twelve months ended December 31, 2008, gross profit increased 22.29%. Gross profit increase to $1,414,800 from $1,156,958 for the year ended December 31, 2009 and December 31, 2008, respectively. The improvement in gross profit dollars of $257,842 is a result of sustained improvements in sourcing and supply-chain management. This represents a improvement in the rate of gross profit from 9.34% at December 31, 2008 to 12.32% at December 31, 2009.

Our selling, general and administrative expense was $319,566 lower for the year ending December 31, 2009 as compared to the year ending December 31, 2008. The expenses of our wholly-owned subsidiary, OES, were comparable for the years ended December 31, 2009 and 2008. The expenses related to public company costs continued to decrease during the year ended December 31, 2009. Professional services fees decreased $208,980 during the twelve month ending December 31, 2009 to $515,470 compared to $724,450 for the same period ending in 2008. Further, an approximate decrease of $208,635 in corporate payroll expense was realized for the year ending December 31, 2009 contributing to the overall decrease in expenses.

Stock-based compensation cost decreased by $388,384 during the year ended December 31, 2009 as compared to the same period in 2008 due to a reduction in the number of transactions involving the issuance of stock for services and the reduction in the price of the Company’s stock.

Interest expense increased by $198,029 during the year ended December 31, 2009 as compared to the same period in 2008. The increase in interest expense reflects a combination of both the impact of additional interest expense related to the Bridge Loan financing received from a related party on April 20, 2009 and benefit realized from lower costs associated with our asset-based line of credit.

There were no residual losses associated with discontinued operations for the year ending December 31, 2009. However, net loss from discontinued operations of $1,367,531, includes the loss on disposal in 2008 of $946,790. The result was a net loss from continuing operations of $1,177,712 for the year ended December 31, 2009 compared to a net loss from operations of $1,951.234 for the year ended December 31, 2008.

Liquidity and Capital Resources

As of December 31, 2009, we had current assets in the amount of $2,159,485, consisting primarily of accounts receivable and inventory. On the same date, we had current liabilities of $3,310,419, consisting primarily of accounts payable and a bank line of credit. Thus, as of December 31, 2009, we had a working capital deficit of $1,030,932 as compared to a working capital deficit of $979,088 at December 31, 2008. This increase in our working capital deficit during the year ended December 31, 2009 is directly related to the addition of mezzanine financing during the year, including a related party note.

The asset-based line of credit remained $2.0 million. We were not in violation of any of the financial covenants associated with the line of credit at the December 31, 2009. The available draw balance was $17,309 at December 31, 2009.

Parallel to expanding the customer base of our wholly-owned subsidiary, OES through expansion of product offerings and identification of new customers, we plan to continue our search for companies involved in the sale and distribution of automotive parts that would be available for acquisition. It is management’s belief that the return to profitability is dependent upon the ability to increase revenue volume. If we determine that we do not presently have sufficient capital to fully fund our growth and development, we will seek additional capital through the financial markets. In connection with raising this additional capital, we will incur appropriate accounting and legal fees. Management believes that it will be successful in its plans to return the Company to profitability; however there can be no assurances that we will be able to obtain additional financing, increase revenues and improve gross margins in order to be able to continue as a going concern.

Critical Accounting Estimates

Management’s discussion and analysis of our financial condition and results of operations are based upon General Automotive Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to our allowance for accounts receivable and stock-based compensation. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates given a change in conditions or assumptions that have been consistently applied.

The Company’s significant accounting policies are described in Note 1 of our financial statements. The methodology for its estimates and assumptions are as follows:

Allowance for Doubtful Accounts. The Company maintains current receivable amounts and regularly monitors and assesses its risk of not collecting amounts owed to it by customers. This evaluation is based upon an analysis of amounts currently and past due along with relevant history and facts particular to the customer. Based upon the results of this analysis, the Company records an allowance for uncollectible accounts. This analysis requires the Company to make significant estimates and as such, changes in facts and circumstances could result in material changes in the allowance for doubtful accounts. After all attempts to collect a receivable have failed, the receivable is written off against the allowance.

Stock-based compensation. Stock-based compensation represents the cost related to common stock granted to employees and related parties of the Company. The Company measures stock-based compensation cost at the date the common stock was issued, based on the quoted market price of the Company’s common stock and recognizes the cost as expense over the requisite service period. For officer and director stock purchase options we use volatility estimates based on similar public companies within the industry with readily determinable historical stock price information. In addition we used the five year treasury bond rate at time of grant for the risk free rate in the Black-Scholes fair value estimation model.

The Company records deferred tax assets for awards that result in deductions on the Company’s income tax returns, based on the amount of compensation cost recognized and the Company’s statutory tax rate in the jurisdiction in which it will receive a deduction. Differences between the deferred tax assets recognized for financial reporting purposes and the actual tax deduction reported on the Company’s income tax return are recorded in Additional Paid-In Capital.

Recent Accounting Pronouncements

In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46r,” (SFAS 167). SFAS 167 amends FASB Interpretation No. 46 (Revised December 2003), “Consolidation of Variable Interest Entities-an interpretation of ARB No. 51,” (FIN 46r) to require an enterprise to perform an analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interest in a variable interest entity; to require ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity; to eliminate the quantitative approach previously required for determining the primary beneficiary of a variable interest entity; to add an additional reconsideration event for determining whether an entity is a variable interest entity when any changes in facts and circumstances occur such that holders of the equity investment at risk, as a group, lose the power from voting rights or similar rights of those investments to direct the activities of the entity that most significantly impact the entity’s economic performance; and to require enhanced disclosures that will provide users of financial statements with more transparent information about an enterprise’s involvement in a variable interest entity. SFAS 167 becomes effective for the Company on January 1, 2010. Management is currently evaluating the potential impact of SFAS 167 on the financial statements.

Off Balance Sheet Arrangements

As of December 31, 2009, there were no off balance sheet arrangements.

Contractual Obligations

As of December 31, 2009, we were obligated for $152,100 in future lease payments through 2011for the office and warehouse space at 5422 Carrier Drive in Orlando, Florida. The amounts due over the next two years are approximately $78,600 in 2010 and $73,500 in 2011.

Item 8.

Financial Statements

Index to Financial Statements:

Audited Financial Statements:

Report of Independent Registered Public Accounting Firm

Report of Previous Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2009 and 2008

Consolidated Statements of Operations for the Years Ended December 31, 2009 and 2008

Consolidated Statement of Shareholders’ Deficit for the Years Ended December 31, 2009 and 2008

Consolidated Statements of Cash Flows for the Years Ended December 31, 2009 and 2008

Notes to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

To the Board of Directors of

General Automotive Company

Orlando, Florida

We have audited the accompanying consolidated balance sheet of General Automotive Company (the “Company”) as of December 31, 2009, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. The consolidated financial statements of General Automotive Company as of and for the year ended December 31, 2008 were audited by other auditors whose report dated April 14, 2009 on those statements included an explanatory paragraph describing conditions that raised substantial doubt about the Company’s ability to continue as a going concern.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of General Automotive Company as of December 31, 2009, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has limited working capital and has incurred losses from operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans with regard to these matters are described in Note 1. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Silberstein Ungar, PLLC

Bingham Farms, Michigan

March 28, 2010

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

General Automotive Company

We have audited the accompanying consolidated balance sheets of General Automotive Company and Subsidiaries as of December 31, 2008 and 2007 and the related consolidated statements of operations, shareholder’s deficit, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of General Automotive Company and Subsidiaries at December 31, 2008 and 2007, and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and has a working capital deficit and shareholders’ deficit at December 31, 2008 that raise substantial doubt about its ability to continue as a going concern. Management’s plan in regard to these matters is also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Cross, Fernandez & Riley, LLP

Certified Public Accountants

April 14, 2009

Orlando, FL

GENERAL AUTOMOTIVE COMPANY AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS


	Twelve months ended December 31,
	2009			2008
Assets (Note 7)

Current assets:
Cash	$	3,701		$	151,482
Accounts receivable, net		1,424,711			1,046,837
Inventories		224,333			785,310
Other current assets		506,740			160,711

Total current assets		2,159,485			2,144,340

Property and equipment, net (Note 5)		26,099			5,434
Other assets, net		188,434			19,526

	$	2,374,018		$	2,169,300


Liabilities and Shareholders’ Deficit

Current liabilities:
Accounts payable	$	1,246,666		$	1,884,334
Line of credit (Note 7)		1,177,686			795,785
Accrued expenses (Note 6)		299,168			283,309
Notes payable -current		6,897			—
Notes payable to related parties (Note 8)		460,000			160,000


Total current liabilities		3,190,417			3,123,428


Long term liabilities		120,002			—

Shareholders’ deficit (Note 10):
Preferred stock, $0.001 par value; 10,000,000 shares authorized, none issued and outstanding at 2009 and 2008		—			—
Common stock; $0.001 par value; 90,000,000 shares authorized, 23,854,417 issued and outstanding at December 31, 2009 and 15,764,417 issued and outstanding at December 31, 2008		23,854			15,764
Additional paid-in capital		10,522,312			9,334,964
Accumulated deficit		(11,482,567	)		(10,304,856	)

Total shareholders’ deficit		(936,401	)		(954,128	)

	$	2,374,018		$	2,169,300

See accompanying notes to consolidated financial statements

GENERAL AUTOMOTIVE COMPANY AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS


	Twelve months ended December 31,
	2009			2008
Revenues	$	11,487,908		$	12,383,241

Costs of goods sold		10,073,108			11,226,283


Gross profit		1,414,800			1,156,958

Expenses:
Selling, general and administrative		1,923,319			2,242,885
Stock-based compensation (Note 10)		304,296			692,680

Total expenses, net		2,227,615			2,935,565


Loss from operations		(812,815	)		(1,778,607	)

Other income (expense):
Interest expense		(370,733	)		(172,704	)
Other, net		5,836			77


Total other expense, net		(364,897	)		(172,627	)
Net loss from continuing operations		(1,177,712	)		(1,951,234	)

Net loss from discontinued operations (Including loss on disposal of $946,790 in 2008)		—			(1,367,531	)


Net loss	$	(1,177,712	)	$	(3,318,765	)

Loss per share (Note 11)
Basic and diluted:

Continuing operations	$	(0.07	)	$	(0.15	)

Discontinued operations		—			(0.11	)

	$	(0.07	)	$	(0.26	)

Weighted average number of common shares outstanding:

Basic and diluted		17,687,494			12,816,592

See accompanying notes to consolidated financial statements

GENERAL AUTOMOTIVE COMPANY AND SUBSIDIARY

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ DEFICIT


	Common Stock					Additional Paid-in Capital			Accumulated Deficit			Total
	Shares		Amount			Additional Paid-in Capital			Accumulated Deficit			Total
Balance, December 31, 2007	26,000,001		$	26,000		$	—		$	(6,986,090	)	$	(6,960,090	)

Cancellation of common stock	(179,040	)		(179.00	)		179			—			—

Reverse common stock split	(25,428,567	)		(25,429	)		25,429			—			—

Common stock and warrants issued in connection with the conversion of related party notes payable and accrued interest	8,052,385			8,052			6,560,779			—			6,568,831

Common stock issued in connection with the conversion of related party bridge note payable	333,333			333			294,667			—			295,000

Common stock issued in connection with reverse merger	3,919,789			3,920			(3,920	)		—			—

Common stock issued in connection with stock-based compensation	112,500			112			61,013			—			61,125

Recission of common stock options issued to officers and directors	(112,500	)		(112	)		(61,013	)		—			(61,125	)

Compensatory common stock option issued to officers and directors	—			—			691,480			—			691,480

Common stock issued for services	693,000			693			302,767			—			303,460

Common stock and warrants issued in connection with private placement memorandum, net of cost	2,373,516			2,374			1,463,583			—			1,465,957

Net loss										(3,318,765	)		(3,318,765	)


Balance, December 31, 2008	15,764,417			15,764			9,334,964			(10,304,856	)		(954,128	)


Common stock issued for services	8,090,000			8,090			352,410			—			360,500

Warrants issued in connection with debt	—			—			260,642			—			260,642

Common stock options issued in connection with stock-based compensation	—			—			270,000			—			270,000

Compensatory common stock options issued to officers	—			—			300,000			—			300,000

Compensatory common stock options issued to employees	—			—			4,296			—			4,296

Net loss	—			—			—			(1,177,712	)		(1,177,712	)


Balance, December 31, 2009	23,854,417		$	23,854		$	10,522,312		$	(11,482,567	)	$	(936,401	)

See accompanying notes to consolidated financial statements

GENERAL AUTOMOTIVE COMPANY AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Twelve months ended December 31,
	2009			2008
Cash flows from operating activities:
Net loss	$	(1,177,712	)	$	(3,318,765	)
Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation		14,924			8,000
Stock-based compensation		304,296			691,480
Loss from discontinued operations		—			1,367,531
Warrants issued for conversion/issuance of debt		260,642			87,000
Change in assets and liabilities from discontinued operations		—			278,506
Change in assets and liabilities of continuing operations:
Decrease (increase) in assets:
Accounts receivable		(377,874	)		357,428
Inventories		560,977			243,101
Other current assets		284,471			142,749
Increase (decrease) in liabilities:
Accounts payable		(637,668	)		157,339
Accrued expenses		15,859			193,644

Net cash used in operating activities		(752,085	)		208,013

Cash flows from investing activities:
Purchase of property, plant and equipment		(35,589	)		(11,283	)
Increase in other assets		(168,908	)		(13,362	)

Net cash used in investing activities		(204,497	)		(24,645	)

Cash flows from financing activities:
Net borrowings under lines of credit		381,901			(590,443	)
Borrowings on notes payable		26,900			57,500
Sale of common stock		—			1,465,957
Borrowings (payments) on notes payable to related parties		400,000			(965,500	)

Net cash provided by financing activities		808,801			(32,486	)

Net increase (decrease) in cash		(147,781	)		150,882
Cash, beginning of year		151,482			600

Cash, end of period	$	3,701		$	151,482

Supplemental disclosure of cash flow information:
Interest paid	$	110,090		$	96,491
Supplemental schedule of noncash financing activities:
Common stock issued for conversion of debt	$	—		$	6,776,831
Common stock issued for services		630,500			303,460

See accompanying notes to consolidated financial statements

General Automotive Company and Subsidiaries

Notes to Consolidated Financial Statements

1.	Summary of Significant Accounting Policies

Consolidated Financial Statements. The accompanying consolidated financial statements include the accounts of General Automotive Company (“the Company”) and its wholly-owned subsidiary, OE Source, LC (“OES”), (collectively, the “Company”). The net loss from discontinued operations of our wholly-owned subsidiary, Global Parts Direct, Inc. (“GPD”), which was disposed of on November 14, 2008, is included in the consolidated financial statement for the year ended December 31, 2008. All significant intercompany accounts, transactions and profits are eliminated.

Merger and Offering. As discussed further in Note 10, the Company completed a reverse merger into a publicly traded shell company on February 22, 2008 and reported the Merger and the related transactions on Form 8-K, filed February 28, 2008.

Revenue. Revenue is recognized upon shipment of products to customers.

Going Concern. The Company incurred losses of $1,177,712 and an accumulated deficit of $11,482,567 for the twelve months ended December 31, 2009. The Company’s current liabilities exceeded its current assets by $1,030,932. Additionally the Company is reporting a shareholders’ deficit of $936,401 as of December 31, 2009 as compared to a shareholders’ deficit of $954,128 as of December 31, 2008. The improvement in shareholders’ deficit reflects the sustained efforts to improve profitability through a combination of proactive purchasing strategies, supply chain management, and other operational controls. Further in its effort to eliminate current operating losses, the business plan of the Company’s new management is focused on increasing revenues through a combination of meeting the growing demand for automotive engine management replacement parts, larger scheduled customer orders, new domestic dealer and Asian product sourcing and reductions of operating expenses. New Asian suppliers are being identified and qualified to accomplish significant cost savings that will allow the Company to offer reduced prices to its current customer base for larger quantity orders while increasing gross profit margins.

The Company discontinued operation of its subsidiaries, Global Parts Direct, Inc. (“GPD”), by the sale of its assets which occurred on November 14, 2008 (see note 4 for further discussion of this discontinued operation). As disclosed in note 7, the Company’s current line of credit for GPD (the “GPD Line”) matured and was extended on a month to month basis through November 20, 2008. The GPD Line was repaid on October 31, 2008. To support the additional working capital needed for revenue growth in the Company’s wholly-owned subsidiary OE Source, LLC (“OES”), OES entered into a new $2.0 million line of credit on August 28, 2008 (the “OES Line”), which was guaranteed by the Company. Approximately 65% of this new OES Line was used to satisfy the balance on our existing line of credit. Management believes that it will be successful in its plans to return the Company to profitability; however there can be no assurances that we will be able to obtain additional financing, increase revenues and improve gross margins in order to be able to continue as a going concern. The accompanying financial statements have been prepared on a going concern basis, which assumes continuity of operations and realization of assets and liabilities in the ordinary course of business. The financial statements do not include any adjustments that might result if the Company was forced to discontinue its entire operations

Allowance for Uncollectable Accounts. The Company maintains current receivable amounts and regularly monitors and assesses its risk of not collecting amounts owed to it by customers. This evaluation is based upon an analysis of amounts currently and past due along with relevant history and facts particular to the customer. Based upon the results of this analysis, the Company records an allowance for uncollectible accounts. This analysis requires the Company to make significant estimates and as such, changes in facts and circumstances could result in material changes in the allowance for uncollectable accounts. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. At December 31, 2009, accounts receivable was net of an allowance for uncollectible accounts of $12,688 and $28,000 for the year ended December 31, 2008.

Inventories. Inventories consisting of primarily finished automotive parts are stated as the lower of cost or market, with cost being determined by the first-in, first-out (FIFO) method.

Property, Plant and Equipment. Property, plant and equipment is stated at cost, less accumulated depreciation. Expenditures for additions and improvements, which extend the life of the assets, are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. Major replacements and improvements are capitalized. Gains and losses resulting from sales or retirements are recorded as incurred, at which time the cost and accumulated depreciation are removed from the accounts. Depreciation is provided using the straight-line method over the following average estimated useful lives of the assets: Electronic data processing equipment – 5 years, Furniture and Fixtures—7 years, and Automobiles-5 years.

Impaired Long-lived Assets. In accordance with Statement of Financial Accounting Standard (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” the Company evaluates the carrying value of long-lived assets when circumstances indicate the carrying value of those assets may not be fully recoverable. The Company evaluates recoverability of long-lived assets held for use by comparing the net carrying value of an asset group to the estimated undiscounted cash flows (excluding interest) during the remaining life of the asset group. If such an evaluation indicates that the future undiscounted cash flows of certain long-lived asset groups are not sufficient to recover the carrying value of such asset groups, the assets are then adjusted to their fair values.

Stock-based compensation. Stock-based compensation represents the cost related to common stock and options to purchase common stock granted to employees and related parties of the Company. The Company determines the cost of common stock grants at the date the common stock was issued, based on the quoted market price of the Company’s common stock and recognizes the cost as expense over the requisite service period. The Company estimates the fair value of all warrants and options issued during the period using the Black-Scholes option-pricing model with the assumptions appropriate to the circumstances of the Company at the time of the transaction as disclosed in Note 10.

The expense is recorded in SG&A in the Consolidated Statement of Operations over the requisite service period required by the grant.

Income Taxes. Deferred income taxes are recognized for the tax consequences in future years for differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the period in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

Concentration of Credit Risk. The Company maintains its cash and cash equivalents in bank deposit accounts, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash and cash equivalents.

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

Financial Instruments. During the first quarter of fiscal 2009, the Company adopted FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) (formerly referenced as SFAS No. 157, Fair Value Measurements) to value its financial assets and liabilities. The adoption of ASC 820 did not have a significant impact on the Company’s results of operations, financial position or cash flows. ASC 820 defines fair value, establishes a framework for measuring fair value under GAAP and expands disclosures about fair value measurements. ASC 820 defines fair value as the exchange price that would be paid by an external party for an asset or liability (exit price). ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Three levels of inputs may be used to measure fair value:

•

Level 1 – Active market provides quoted prices for identical assets or liabilities;

•

Level 2 – Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable with market data; and

•

Level 3 – Unobservable inputs that are supported by little or no market activity, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing.

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2009. The Company uses the market approach to measure fair value for its Level 1 financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments which include cash, accounts receivables, inventories, related party notes payable, accounts payable and accrued expenses are valued using Level 1 inputs and are immediately available without market risk to principal. Fair values were assumed to approximate carrying values for these financial instruments since they are short term in nature and their carrying amounts approximate fair values or they are receivable or payable on demand. The fair value of the Company’s line of credit and notes payable is estimated based on current rates that would be available for debt of similar terms which is not significantly different from its stated value. The Company does not have any Level 2 or Level 3 assets and liabilities.

ASC 820 is effective for fiscal years beginning after November 15, 2007, except for non-financial assets and liabilities recognized or disclosed at fair value on a non-recurring basis, for which the effective date is fiscal years beginning after November 15, 2008. The Company adopted ASC 820 for non-financial assets that are recognized or disclosed on a non-recurring basis on July 1, 2009 in accordance with FASB Staff Position 157-2, “Effective Date of FASB Statement No. 157” (“FSP 157-2”). The adoption of ASC 820 for non-financial assets that are recognized or disclosed on a non-recurring did not have a significant impact on the Company’s results of operations, financial position or cash flows.

Recent accounting pronouncements. In December 2007, the FASB issued Statement 141R, “Business Combinations” (SFAS 141R), which applies to all transactions or other events in which an entity obtains control of one or more businesses, including those sometimes referred to as “true mergers” or “mergers of equals” and combinations achieved without the transfer of consideration. This statement replaces FASB Statement No. 141 and applies to all business entities, including mutual entities that previously used the pooling-of-interests method of accounting for some business combinations. SFAS 141R is effective for fiscal years beginning after December 15, 2008 and early adoption is prohibited. The Company believes that adoption of the FAS 141R will have an effect on our operating results with respect to future acquisitions, if any.

In February 2008, the FASB issued FASB Staff Position 157-1, Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13 (“FSP 157-1”). FSP 157-1 amends SFAS 157 to remove certain leasing transactions from its scope. In addition, on February 12, 2008, the FASB issued FSP FAS 157-2, Effective Date of FASB Statement No. 157, which amends SFAS 157 by delaying its effective date by one year for non-financial assets and non-financial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis. This pronouncement was effective upon issuance. We have deferred the adoption of SFAS 157 with respect to all non-financial assets and liabilities in accordance with the provisions of this pronouncement. On January 1, 2009, SFAS 157 will be applied to all other fair value measurements for which the application was deferred under FSP FAS 157-2. We are currently assessing the impact SFAS 157 will have in relation to non-financial assets and liabilities on our consolidated financial statements.

Acquisition Event. On May 5, 2009 the Company announced that it had signed a non-binding letter of intent to acquire privately held Europacific Parts International, Inc. (EPI) for four million restricted shares of its common stock. On May 5, 2009 the Company advanced EPI $150,000 of working capital against a $250,000 Secured Demand Promissory Note. Closing of the EPI transaction was subject to completion of due diligence and other considerations. On May 15, 2009 the Company announced the termination of the non-binding letter of intent to acquire Europacific Parts International. The $150,000 advance is refundable and is recorded in other assets, net on the consolidated balance sheets at December 31, 2009.

4.	Discontinued Operations. During the third quarter of 2008, it was determined to discontinue the operations of GPD through a sale of selected assets. This sale was closed on November 14, 2008. This sale is fundamentally at liquidation

value resulting in a loss on disposal of $946,790 during the year-ended December 31, 2008. Due to continued reductions in the demand for the type of electronic products that were provided by GPD during this year combined with customer pricing pressures and the inability to source low product quantities at favorable pricing resulted in this decision. The consolidated statement of operations for all prior periods has been reclassified to reflect the results of operations of this divested business as a discontinued operation.

The loss on the sale of GPD was determined by deducting the net book values of the assets and liabilities conveyed to the purchaser at the date of sale, $1,111,790, from the cash proceeds received of $165,000. All assets and liabilities of GPD not conveyed to the purchaser were transferred to GAC.

The assets and liabilities of GPD have been reclassified for prior periods so that the Consolidated Balance Sheet reflect the Asset and Liabilities of GPD as held for disposal and the Consolidated Statement of Cash Flows in all periods presented reflect the cash flow of discontinued operations.

5.	Property, Plant, and Equipment. Property, plant and equipment consist of the following:


*December 31,*	2009			2008
Electronic data processing equipment	$	21,617		$	21,617
Furniture and fixtures		21,796			21,796

Automobiles		35,590			—

		79,003			43,413
Less: accumulated depreciation		(52,904	)		(37,979	)

	$	26,099		$	5,434

For the years ended December 31, 2009 and 2008, depreciation expense totaled approximately $14,924 and $8,000, respectively.

6.	Accrued Expenses. Accrued expenses consist of the following:


*December 31,*	2009		2008
Interest	$	5,000	$	—
Other		294,168		283,309


	$	299,168	$	283,309

Line of credit. On August 28, 2008 the Company’s wholly-owned subsidiary, OES, entered into a new $2.0 million line of credit (“OES Line”). The OES Line carries an interest rate of prime plus 1.0% (4.25% at December 31, 2009). The accounts receivable, inventory and other non-secured assets of OES secure the line. In addition, the OES Line is a note payable on demand and is subject to certain financial covenant ratios and was guaranteed by the Company. At December 31, 2009, the outstanding balance of the OES Line was $1,177,686. Draws under the line are limited to 85% of eligible accounts receivable and 50% of inventory. As of December 31, 2009, $17,309 was available under the line. The Company was not in violation of one of the covenants associated with the line as of December 31, 2009.

8.	Notes Payable to Related Parties. Notes payable consist of amended loans made to the Company from a group of related parties whom are stockholders of the Company. The terms of these notes are as follows:


*December 31,*	2009		2008
Unsecured notes payable, due December 1, 2008 with various rates from 7% to 20%	$	460,000	$	160,000


Total	$	460,000	$	160,000

The Company has one remaining note issued in associated with the acquisition of OE Source, LC to a related party. The Company disburses a monthly interest-only payment. The principal of the note, $160,000 remains past due as of December 31, 2009. On April 20, 2009 the Company secured a $300,000 loan from a related party. The principal was due and payable in full on May 5, 2009. The principal amount remains outstanding as of December 31, 2009 and accrues interest at an annual rate of 20% that is calculated based upon a 360-day year. As of December 31, 2009 interest in the amount of $41,667 has been recorded associated with the outstanding principal of the loan referenced above.

9.	Income Taxes. The components of deferred tax assets consist of the following:


*December 31,*	2009			2008
Deferred tax assets:
Stock based compensation	$	300,000		$	260,000
Other items					23,000

Net operating loss carryforward		3,179,000			2,951,000

Gross deferred tax assets		3,479,000			3,234,000
Valuation allowance		(3,479,000	)		(3,234,000	)

Net deferred tax asset	$	—		$	—

Deferred tax assets resulting from the net operating loss carry forwards and the tax effects of the carrying value of assets for tax and financial reporting differences have been offset by a valuation allowance as it is more likely than not that some portion or all of the deferred tax asset will not be utilized. The valuation allowance increased by $245,000 and $1,198,000 for during the years ended 2009 and 2008.

As of December 31, 2009, the Company has a net operating loss carry-forward of approximately $8,448,000 that expires at various dates through 2029. As a result of the Company’s merger in February 2008, the use of the net operating loss carry-forward may be limited under section 382 of the Internal Revenue Code.

10.

Common Stock and Equity Securities. On February 22, 2008, Global Automotive Supply, Inc. (“GAS”), merged with and into Utility Investment Recovery, Inc. (“UIR”), a public shell company. In connection with the Merger, UIR was the surviving corporation although GAS was the surviving operating entity. As a result of the Merger, UIR changed its name to General Automotive Company. The stockholders of GAS received the right to receive two (2) shares of the Company’s common stock for each ninety-one (91) issued and outstanding shares of GAS common stock. As a result, at closing, in exchange for 100% of the outstanding capital stock of GAS, including 333,333 shares issued in connection with the conversion of a bridge loan, and 7,423,814 shares in connection with the conversion of related parties notes payable and accrued interest, the former shareholders of GAS received 8,778,112 shares of the Company’s common stock. Such holdings represent 36.80% of the outstanding common stock as of December 31, 2009.

At the time of the Merger, there were 3,919,789 shares of common stock outstanding in UIR, the shell company, after the cancellation of certain shares by several of the UIR shareholders. The certificates evidencing outstanding UIR shares were reissued as certificates for Company shares. Per board approved merger agreement each ninety-one (91) shares of GAS common stock issued and outstanding immediately prior to the closing of the merger was converted into the right to receive two (2) shares of the Company’s common stock.

Additionally, at the time of the Merger 266,667 warrants were issued to certain related parties that held $400,000 of GAS notes payable, which notes payable were converted into 533,333 shares of common stock as discussed in note 7 above. The warrants have a strike price of $2.00 per common share and expire three years from the date of issuance. The warrants also have a call feature, by which we can compel holders of the warrants to either exercise or surrender their warrants if our common stock trades at or above $3.50 for twenty (20) consecutive trading days. The fair market value of these warrants totaling $72,000 has been recorded as additional interest expense valued at the time of the grant using the Black-Scholes fair value estimation model.

During the twelve months ended December 31, 2008 the Company issued a total of 2,355,334 shares of common stock and 1,177,677 warrants to investors for net proceeds of $1,456,757 as a result of its private offerings which were exempt from registration under Rule 506 of Regulation D of the Securities Act of 1933, as amended. Each warrant has a strike price of $2.00 per common share and will expire three years from the date of issuance. The warrants also have a call feature, by which we can compel holders of the warrants to either exercise or surrender their warrants if our common stock trades at or above $3.50 for twenty (20) consecutive trading days. On July 30, 2008, the Company completed and closed an offering as reported on Form 8-K filed August 6, 2008. Pursuant to the Registration Rights Agreement executed in connection with this private placement, the Company was required to file a Registration Statement within 90 days of the closing date of the of the offering. The Company did not file this Registration Statement, and pursuant to the Registration Rights Agreement, the Company is required to pay to the stockholders party thereto liquidated damages in an amount equal to 0.5% of the stockholders’ investment, payable in cash or common stock valued at the original purchase price for the common stock, at the discretion of the Company, up to a maximum of 6% of the stockholders’ investment, for each month the Company continues to be in violation of this provision. As of December 31, 2009 the Company has not filed the Registration Statement and will be required to pay the penalty which has reached $87,822.

The Company also issued warrants to purchase 135,640 shares of common stock as commission to the broker-dealer responsible for placing the shares and warrants in connection with this private offering. Each warrant has a strike price of $2.00 per common share and is exercisable for a period of five years from the date of issuance. Also in relation to the private offering, the Company issued options to a consultant to purchase 300,000 shares of common stock at an exercise price of $0.75 per share for a period of five years from the date of issuance.

On September 9, 2008 the Company issued a total of 18,182 shares of common stock and 18,182 warrants to investors for net proceeds of $9,200 as a result of its private offerings which were exempt from registration under Rule 506 of Regulation D of the Securities Act of 1933, as amended. Each warrant has a strike price of $0.50 per common share and will expire three years from the date of issuance. The warrants also have a call feature, by which we can compel holders of the warrants to either exercise or surrender their warrants if our common stock trades at or above $3.50 for twenty (20) consecutive trading days.

On December 11, 2008, the Company issued a total of 428,571 shares of common stock and 214,285 warrants to a related party in settlement of a $150,000 outstanding note payable. The warrants carry a strike price of $2.00 and expire three years from date of grant. The fair market value of these warrants totaling $15,000 has been recorded as additional interest expense valued at the time of the grant using the Black-Scholes fair value estimation model.

In addition to the warrants described above, during the year ended December 31, 2007 the Company also granted a lender warrants to purchase 60,000 shares of the Company’s common stock at an exercise price of $0.75 per share for a period of three years. This warrant also contains a “cashless” exercise provisions under which the holder of the warrant can exercise it using shares of the Company’s common stock. In accordance with EITF 00-19, “Accounting for Derivative Financial Instruments Indexed To, and Potentially Settled in the Company’s Own Stock,” and the terms of the lender warrants, the fair value of these warrants was accounted for as a liability, with an offsetting reduction to the carrying value of the Company’s common stock. The warrant liability will be reclassified to equity upon exercise or expiration of the related warrants. The fair value of the lender warrants on the grant date was estimated at $16,800. On December 31, 2008, the fair value of the warrants was re-measured and estimated at $1,200. The decrease of $15,600 was recorded in selling, general and administrative expenses in the Consolidated Statement of Operations during the twelve months ended December 31, 2008.

Stock-Based Compensation.

During the twelve months ended December 31, 2009, the Company granted 15,115,000 options to purchase stock of the company. As disclosed in an Form 8K, filed on November 4, 2009, the Company granted the president and CEO 10,000,000 options to purchase stock of the Company at a strike price of $.04 per share over a five year period. The Chief Financial Officer was granted the option to purchase stock of the Company at a strike price of $.04 per share over a five year period. The Chief Operating Officer was granted the option to purchase stock of the Company over a five year period at a strike price of $.04 per share. The total of options granted to officers of the Company was 15,000,000 shares and were fully vested at the grant date. In accordance with FAS 123R “Accounting for Stock-Based Compensation – Revised” the company calculated the fair value of these options at grant date. Based on the circumstances of the Company at the time, a volatility rate of 146% and a risk free interest rate of 2.71% was used in the Black-Scholes model to compute a fair value of $300,000 for these options. An additional 115,000 options to purchase stock of the Company were issued in December 2009 to employees as an employment incentive. These shares were fully issued at the grant date and were issued at an exercise price of 10 day moving market average per share over a five year period.

During the twelve months ended December, 2008, the Company recognized the issuance of 112,500 shares of common stock to its president in connection with an employment agreement wherein the president would receive quarterly stock grants over a five year period for a total of 5% of the issued and outstanding common stock of the Company as of the closing of the merger and the currently ongoing private placement of securities. The total grant was estimated to be

750,000 shares, which would have vested at a rate of 5% per quarter. The compensation costs charged as operating expense for grants under the plan was $61,125 for the nine months ended September 30, 2008. During the fourth quarter of 2008, the employment agreement with the Company’s president was amended and the stock grant was replaced with stock options. Accordingly the 112,500 shares issued were returned to the company and the $61,125 expense was reversed.

On November 3, 2008 the Company’s president, as stated above, along with other officers and directors were granted options to purchase stock of the Company. These options were for a total of 2,950,000 shares at a strike price of $0.385 per share over a three year period. The options were fully vested at grant date. In accordance with FAS 123R “Accounting for Stock-Based Compensation – Revised” the company calculated the fair value of these options at grant date. Based on the circumstances of the Company at the time, a volatility rate of 113% and a risk free interest rate of 2.71% was used in the Black-Scholes model to compute a fair value of $691,480 for these options. This value was recorded in selling, general and administrative expenses in the Consolidated Statement of Operations during the final quarter of the year ended December 31, 2008.

Stock Warrants and Options. As of December 31, 2009, there were outstanding warrants, consultant options and officer and director options for the purchase of 21,262,451 shares, with a weighted average strike price of $0.27.

The Company estimates the fair value of all warrants and options issued during the period using the Black-Scholes option-pricing model with the following assumptions: no dividend yield, 90%, 129%, 113%, and 146% volatility, risk-free interest rates of 3.34% to 1.55% and expected lives of 3 and 5 years.

Stock and options issued for services. During the twelve months ended December 31, 2009 the Company issued 8,090,000 shares of common stock in connection with marketing and financial consulting services which were exempt from registration under Rule 506 of Regulation D of the Securities Act of 1933, as amended. These services are to be performed over various terms ranging from one to twelve months and have been valued at a total of $360,500 representing the quoted market price of the Company’s common stock on the date of the grant. The Company granted 13,500,000 options to purchase stock of the Company at a strike price of $.04 per share over a three year period. These service are to be performed over a three year period and have been valued at $270,000. At December 31, 2009, a $521,667 is included in other current assets and $68,333 was charged to SG&A expense for the twelve months ended December 31, 2009 for marketing and financial consulting services.

11.

Loss per Common Share. Common share equivalents of 5,753,284 and 5,122,451 representing outstanding warrants and options were not included in the computation of diluted earnings per share for the years ended December 31, 2009 and December 31, 2008, respectively, as their effect would have been anti-dilutive.

12.

Joint Venture. On July 22, 2008, as reported on Form 8-K filed, July 25, 2008, the Company and SenCer Inc., a New York corporation (“SenCer”), formed General Automotive Advanced Technology Group, LLC (the “Joint Venture”). In connection therewith, the Company and SenCer entered into an Operating Agreement which sets forth the regulations, terms and conditions under which the Joint Venture will be operated.

The Operating Agreement provides that the Company and SenCer shall initially hold 50% membership interests in the Joint Venture. Initially, the Company shall contribute such services and incur such costs and expenses as it shall deem necessary to determine the commercial viability of the Joint Venture’s business, which services have an agreed-upon value of $200,000. In the event the Company becomes satisfied that the business is commercially viable, the Company shall make additional capital contributions of up to an aggregate of $750,000, in cash, to fund the operations of the Joint Venture and SenCer shall contribute to the Joint Venture a license to use SenCer’s ceramic composite technology for any and all transportation applications, all pursuant to an exclusive license agreement by and between the Joint Venture and SenCer also dated July 22, 2008. The license has an agreed-upon value of $2,000,000. If commercial viability has not been achieved by July 15, 2009 (originally January 15, 2009), the Joint Venture will be dissolved unless the Company elects to continue its existence. At present, commercial viability has been established but financing has not been secured. While financing is being obtained, SenCer and the Company have elected to proceed with the Joint Venture on a month to month basis.

The Company shall be the sole managing member of the Joint Venture, responsible for the day-to-day operations of the Joint Venture as well as certain marketing activities of the Joint Venture. SenCer shall design and develop applications and prototype products for clients of the Joint Venture. Certain major decisions, such as entering into a change of control transaction, amending the Operating Agreement, admitting new members to the Joint Venture and dissolving the Joint Venture shall require member approval.

Effective December 7, 2009, the Company revised the Joint Venture agreement with SenCer. Formerly known as Advanced Technology Group, LLC., the Company shall now hold a 33.3% membership interest in the Joint Venture. SenCer shall initially hold 33.3% membership interest in the Joint Venture. The remaining 33.34% membership interest will be part of an initial public offering. The Company is in the process of determining whether consolidating the joint venture is necessary; however as of December 31, 2009 there was no activity in the Joint Venture to consolidate.

13.

Commitments and Contingencies. Operating Lease Obligations – The Company leases property under non-cancelable operating leases which expire at various dates through November 2011. The minimum future rental payments under all non-cancelable operating leases for 2008 are approximately $229,000 through 2011. The amounts due over the next three years are approximately $76,900 in 2009, $78,600 in 2010 and $73,500 in 2011.

Rent expense incurred under operating leases amounted to approximately $85,709 and $169,000 for the years ended December 31, 2009 and 2008, respectively.

Litigation – In the ordinary course of business, the Company is subject to certain litigation. In the opinion of management, such litigation will not have a significant adverse effect on the financial position of the Company.

14.

Concentrations. The Company sells the majority of its products to two customers. During the year ended December 31, 2009, sales to these two customers were approximately 65%, and 31% of total revenues. During the year ended December 31, 2008, sales to these two customers accounted for approximately 64% and 34% of total revenues.

The Company purchases the majority of its products from two vendors. During the year ended December 31, 2009, purchases from these two suppliers were approximately 44% and 24% of total purchases, and during the year ended December 31, 2008, purchases from two suppliers were approximately 46% and 23% of total purchases.

Item 9.

Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

As previously reported on Form 8K filed January 12, 2010, Cross, Fernandez & Riley, L.L.P, the independent registered public accounting firm who had been engaged as the principal accountant to audit the Company’s financial statements, ceased their client-auditor relationship effective January 5, 2010. Cross, Fernandez and Riley, LLP declined to stand for re-election as principal auditors of the Registrant’s financial statements.

The Cross, Fernandez and Riley, LLP Firm reports on the Registrant’s financial statements for the fiscal years ended December 31, 2007 and 2008 did not contain adverse opinions or disclaimers of opinion, nor were such reports qualified or modified as to uncertainty, audit scope or accounting principle, except as follows:

The audit reports for the years ended December 31, 2007 and December 31, 2008 contain an uncertainty about the Registrant’s ability to continue as a going concern.

During the year ended December 31, 2009 and through January 5, 2010, there have been no disagreements with Cross, Fernandez and Riley, LLP on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure which disagreements, if not resolved to the satisfaction of Cross, Fernandez & Riley, LLP, would have caused it to make a reference to the subject matter of the disagreements in its reports on the Registrant’s financial statements for such yeas. During the year ended December 31, 2009 through January 5, 2010, there were no “reportable events”, as described in Item 304(a)(1)(v) of Regulation S-K.

By action of the Company’s Audit Committee on January 29, 2010, of the Company approved the engagement of Silberstein Ungar, PLLC, as the new independent registered public accounting firm. During the two fiscal year periods ended December 31, 2008 and 2009 and subsequent interim periods until the engagement of Silberstein Ungar, PLLC, neither the Company, nor anyone on its behalf, consulted with Silberstein Ungar, PLLC on any matters described in Item 304(a)(2) of Regulation S-K. Silberstein Ungar, PLLC was engaged by the Registrant on February 9, 2010.

Item 9A.

Controls and Procedures

Management’s Report On Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. This rule defines internal control over financial reporting as a process designed by, or under the supervision of, the Company’s Chief Executive Officer and Chief Financial Officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Our internal control over financial reporting includes those policies and procedures that:

•

Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

•

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

•

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2009. Based on this evaluation, our management has concluded that our disclosure controls and procedures adequately 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 SEC’s rules and forms. The evaluation did not identify any change in our internal control over financial reporting that occurred during the fiscal year ended December 31, 2009 that has materially affected or is reasonably likely to materially affect our internal control over such reporting.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of December 31, 2009, we determined that there were control deficiencies that constituted material weaknesses, as described below.

1. There are no written accounting policies and procedures, no written authority and approval policies and procedures for the transactions of the Company and no segregation of duties in the processing of transactions within the recording cycle. This material weakness if not remediated, has the potential to cause a material misstatement in the future.

2. There are no preventative and detective IT systems in place to prevent and/or detect fraud other than password protection.

The recommendations to remediate these deficiencies are as follows:

1. Consider enhancing preventative and detective IT system controls.

2. Create and implement written accounting policies and procedures and written authority and approval policies and procedures for the transactions of the Company.

3. Implement a system of segregation of duties in the processing of transactions within the recording cycle.

Accordingly, we concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls. As a result of the material weaknesses described above, management has concluded that we did not maintain effective internal control over financial reporting as of December 31, 2009

This annual report 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 Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

Changes in Internal Controls Over Financial Reporting.

The recommendations to remediate deficiencies as reported in our 2007 Form 10-KSB, Item 8A, Management’s Annual Report on Internal Control Over Financial Reporting, filed on April 14, 2008, and the actions taken in the twelve month period ended December 31, 2009 are as follows:

1. Retain additional staff knowledgeable in U.S. GAAP for assistance in the preparation of annual and interim financial statements. The new Chief Financial Officer hired at the end of February 2008 is personally involved in the preparation of financial statements. Additionally we have hired a new controller with greater experience in GAAP accounting and process and procedural controls than the previous controller.

2. Consider enhancing preventative and detective IT system controls. Total control of IT function and computer system is now the responsibility of the Chief Financial Officer. In March of 2008 we engaged an independent IT consulting firm that has evaluated the operations of the computer systems, updated the accounting system to the most current version, eliminated unauthorized access to the computer network operating and accounting systems and has updated the password access for authorized users and eliminated any inactive individuals. This firm will be making routine inspections of these systems and control files as well as being available to correct any system issues as they occur.

3. Create and implement written accounting policies and procedures and written authority and approval policies and procedures for the transactions of the Company. Limited written policies are in place as of December 31, 2009. It is our plan to have these in place before the end of the current fiscal year.

4. Implement a system of segregation of duties in the processing of transactions within the recording cycle. Minimal segregations have been implemented however we are limited to the constraints of a very small staff. Continuing improvement here is anticipated as written policies are gradually implemented over the balance of this fiscal year.

5. Additionally we have appointed a new independent director to the board of directors of the Company. This new director is currently leading the board of directors in its relationship with outside auditors. It is our plan to have a fully documented and functioning corporate governance program in place that will include Charters for the Audit and Compensation Committees of the Company.

Limitations on the Effectiveness of Internal Controls

Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving our objectives and our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective at that reasonable assurance level. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

PART III

Item 10.

Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act

The following information sets forth the names of our current directors and executive officers, their ages as of March 26, 2010 and their positions.


Name	Age	Office(s) Held
Dan Valladao	46	President, CEO, and Director
Shawn Powell Joseph	44	Chief Financial Officer
Tim Alford	49	Chief Operating Officer and Director
Kenneth Adams	64	Director

Set forth below is a brief description of the background and business experience of our current executive officers and directors.

Dan Valladao is our President and Chief Executive Officer, as well as Chairman of our Board of Directors. Mr. Valladao is one of our founders and has over 25 years of automotive experience, including retail, wholesale, and OEM sales channels. Mr. Valladao was named President and Chief Executive Officer of the Company in October 2009 after having serviced as the Vice President of Business Development and Director. Prior to co-founding General Automotive Company, Mr. Valladao served for five years as Vice President of Sales and Marketing for APS International, a global manufacturer and distributor of automotive products. He was previously responsible for sales to OEM companies such as Ford, GM, Chrysler, Honda, and Toyota for HSG Corporation, a large manufacturer’s representatives firm. In 1988, Mr. Valladao served as Executive Vice President to Mobile Living Corporation, a retailer of vehicle accessories, building the company into a multi-store chain with sales in excess of $20 million within five years.

Shawn Powell Joseph is our Chief Financial Officer. Ms. Powell Joseph is an accomplished accounting and information systems chief with diverse industry experience and a proven track record in strategic planning and analysis, audit, financial reporting and compliance, and budgeting and forecasting at the corporate and subsidiary levels. Experienced in internal controls, inventory control, treasury support, international accounting and international financial reporting standards, Ms. Powell Joseph brings a strong background in divestitures, acquisitions, and integration planning to the Company. Prior to being named Chief Financial Officer of the Company in October 2009, Ms. Powell Joseph served the Company in the capacity of Chief Accounting Officer. Ms. Powell Joseph has significant experience as a Business Process Strategist and Business Development Manager. She served from as an Auditor for Touché Ross & Company from 1987-1989 and as a Corporate Planning Analyst from 1989-1992 with TransOhio Savings Bank. From 1989-2006 she served as Principal Consultant with a private accounting and information system consulting firm. Prior to joining General Automotive as Corporate Controller in 2008, Ms. Powell Joseph served as a Project Consultant for Resources Global Professionals, a NYSE listed consulting firm. Having earned her Bachelor of Science degree in accounting from Southern University, Ms. Powell Joseph also earned a Master of Business Administration-Global Management degree from the University of Phoenix in 2007. She is currently completing a doctorate of management degree with a concentration in information systems and technology.

Tim Alford is the Chief Operating Officer, as well as a member of the board of directors and the President of OE Source L.C., a Florida limited liability company, our wholly-owned subsidiary. Mr. Alford has over 25 years in sales and marketing with both OEM and global distribution channels. He joined General Automotive as OE Source in 2004. Mr. Alford was named to the Chief Operating Officer’s post in October 2009. Prior to joining General Automotive Mr. Alford served as Operations and Marketing Manager for multi-million dollar global electronics distributors such as Arrow Electronics (2000-2004), Future Electronics (1997-2000), and Migray Electronics (1991-1997). He also served as Regional Director of Sales for AVX Corporation, a NYSE-listed OEM manufacturer with 20 facilities in 12 countries, from 1979-1984 and 1987-1991. His primary responsibilities were to provide management direction relating to all aspects of product procurement and inventory control. In addition, he provided sales and product expertise to customers and sales force.

Kenneth Adams is an independent member of our board of directors. He is a former Chief Financial Officer and director of Saab Cars USA. Inc. of Norcross, GA and served as Chief Executive Officer of Saab Financial Services Corp.

Family Relationships

There are no family relationships between or among the directors, executive officers or persons nominated or chosen by us to become directors or executive officers.

Involvement in Certain Legal Proceedings

To the best of our knowledge, during the past five years, none of the following occurred with respect to a present or former director, executive officer, or employee: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his or her involvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

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 independent accountants, reviews with management and the independent accountants 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 independent auditor and the performance of the independent auditor.

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.

When evaluating director nominees, our directors consider the following factors:

•

The appropriate size of our Board of Directors;

•

Our needs with respect to the particular talents and experience of our directors;

•

The knowledge, skills and experience of nominees, including experience in finance, administration or public service, in light of prevailing business conditions and the knowledge, skills and experience already possessed by other members of the Board;

•

Experience in political affairs;

•

Experience with accounting rules and practices; and

•

The desire to balance the benefit of continuity with the periodic injection of the fresh perspective provided by new Board members.

Our goal is to assemble a Board that brings together a variety of perspectives and skills derived from high quality business and professional experience. In doing so, the Board will also consider candidates with appropriate non-business backgrounds.

Other than the foregoing, there are no stated minimum criteria for director nominees, although the Board may also consider such other factors as it may deem are in our best interests as well as our stockholders. In addition, the Board identifies nominees by first evaluating the current members of the Board willing to continue in service. Current members of the Board with skills and experience that are relevant to our business and who are willing to continue in service are considered for re-nomination. If any member of the Board does not wish to continue in service or if the Board decides not to re-nominate a member for re-election, the Board then identifies the desired skills and experience of a new nominee in light of the criteria above. Current members of the Board are polled for suggestions as to individuals meeting the criteria described above. The Board may also engage in research to identify qualified individuals. To date, we have not engaged third parties to identify or evaluate or assist in identifying potential nominees, although we reserve the right in the future to retain a third party search firm, if necessary. The Board does not typically consider shareholder nominees because it believes that its current nomination process is sufficient to identify directors who serve our best interests.

Section 16(a) Beneficial Ownership Reporting Compliance

To the best of our knowledge, no officer, director or beneficial owners of more than ten percent of our common stock failed to timely file reports required by Section 16(a) during the most recent fiscal year or prior years.

Code of Ethics Disclosure

On March 21, 2008, we adopted a Code of Ethics which governs all of our employees, including our principal executive officer, principal financial officer, and principal accounting officer and controller. We reported the adoption of the code and provided a copy of it in conjunction with our filing on Form 8K on March 24, 2008.

Item 11.

Executive Compensation

Summary Compensation Table

The table below summarizes all compensation awarded to, earned by, or paid to both to our officers and to our directors for all services rendered in all capacities to us for our fiscal years ended December 31, 2009 and 2008.

SUMMARY COMPENSATION TABLE


Name and principal position	Year	Salary ($)	Bonus ($)	Option Awards ($)	Nonqualified Deferred Compensation Earnings ($)	All Other Compensation ($)	Total ($)

Dan Valladao, President, CEO, Director	2009	124,616	1,000	200,000	—	—	325,616
Dan Valladao, President, CEO, Director	2008	120,000	—	93,760	—	—	213,760

Shawn Powell Joseph CFO	2009	67,500	2,500	40,000	—	—	110,000
Shawn Powell Joseph CFO	2008	24,796	—	—	—	—	24,796

Tim Alford, COO, Director	2009	122,534	1,000	60,000	—	—	183,534
Tim Alford, COO, Director	2008	117,565	—	93,760	—	—	211,325

Kenneth Adams, Director	2009	—	—		—	1,500	1,500
Kenneth Adams, Director	2008	—	—	93,760	—	—	93,760

Joe DeFrancisci Former President, CEO, Director	2009	152,308	—		—	22,500	174,808
Joe DeFrancisci Former President, CEO, Director	2008	180,976	—	269,560	20,793	—	471,329

Harry Christenson, Former CFO	2009	37,798	—	—	—	—	37,798
Harry Christenson, Former CFO	2008	141,346	—	140,640	—	—	281,986

Narrative Disclosure to the Summary Compensation Table

The Company has employment contracts Mr. Valladao, Ms. Powell Joseph and Mr. Alford. We have no written employment contract with our director. We have an employment agreement in place with Mr. Valladao that retains him through December 31, 2012. Effective October 30, 2009, this agreement provides a starting base salary of $120,000 per year. Mr. Valladao is eligible to receive cash bonuses at the discretion of the board of directors. The Company granted options to purchase 10,000,000 shares of Company stock. We also provide Mr. Valladao with a housing allowance and health insurance.

We have an employment agreement in place with Ms. Powell Joseph that retains her through December 31, 2012. Effective October 30, 2011, this agreement provides a starting salary of $65,000 per year. Ms. Powell Joseph is eligible to receive cash bonuses at the discretion of the board of directors. The Company granted options to purchase 2,000,000 shares of Company stock. We have also provided Ms. Powell Joseph with health insurance.

We have an employment agreement in place with Mr. Alford that retains him as our Chief Operating Officer through December 31, 2012. Mr. Alford will receive a base salary of $112,000 per year. The Company granted options to purchase 3,000,0000 shares of Company stock. We have also provided Mr. Alford with health insurance.

Stock Option Grants

On October 30, 2009, the board of directors granted options to purchase Company stock to the following officers:


Dan Valladao		10,000,000
Tim Alford		3,000,000
Shawn Powell Joseph		2,000,000

The fully vested options were granted at $ 0.04 per share, equal to the market price at that date, and expire after three years.

Outstanding Equity Awards at Fiscal Year-End

The table below summarizes all unexercised options, stock that has not vested, and equity incentive plan awards for each named executive officer as of December 31, 2009.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END


	Dan Valladao, DeFrancisci, President, CEO Director		Shawn Powell Joseph, CFO		Tim Alford, COO, Director		Kenneth Adams Director		Dan Valladao, VP, Director		Tim Alford, President OES Director		Joe DeFrancisci, Former President, CEO Director		Harry Christenson, Former CFO
OPTION AWARDS
Number of Securities Underlying
Unexercised Options
(#) Exercisable		10,000,000		2,000,000		300,000		400,000		400,000		400,000		1,150,000		600,000
Number of Securities Underlying
Unexercised Options
(#) Unexercisable		0		0		0		0		0		0		0		0
Equity Incentive Plan Awards:
Number of Securities Underlying
Unexercised Unearned Options (#)		0		0		0		0		0		0		0		0
Option Exercise Price	$	0.04	$	0.04	$	0.04	$	0.385	$	0.385	$	0.385	$	0.385	$	0.385
Option Expiration		10/30/2012		10/30/2012		10/30/2012		11/3/2011		11/3/2011		11/3/2011		11/3/2011		11/3/2011

STOCK AWARDS
Number of Shares or Units that
Have Not Vested (#)		0		0		0		0		0		0		0		0
Market Value of Shares or Units
That Have Not Vested ($)		0		0		0		0		0		0		0		0
Equity Incentive Plan Awards:
Number of Unearned Shares, Units or
Other Rights that Have Not Vested (#)		0		0		0		0		0		0		0		0
Equity Incentive Plan Awards:
Value of Unearned Shares, Units or
Other Rights that Have Not Vested ($)		0		0		0		0		0		0		0		0

Compensation of Directors

The table below summarizes all compensation of our directors as of December 31, 2009.

DIRECTOR COMPENSATION


Name	Fees Earned or Paid in Cash ($)	Stock Awards ($)	Option Awards ($)	Non-Equity Incentive Plan Compensation ($)	Non-Qualified Deferred Compensation Earnings ($)	All Other Compensation ($)	Total ($)

Dan Valladao President, CEO, Director	—	—	—	—	—	—	—

Tim Alford, COO, VP, Director	—	—	—	—	—	—	—

Kenneth Adams, Director	—	1,500	—	—	—	—	1,500

Narrative Disclosure to the Director Compensation Table

Commencing during the fourth quarter of 2009, we initiated the payment of cash compensation to our independent director Kenneth Adams. These options were valued at their fair value as promulgated in SFAS No.123 as revised.

Employment Agreements

We have an employment agreement in place with Mr. Valladao that retains him through December 31, 2012. Effective October 30, 2009, this agreement provides a starting base salary of $120,000 per year. Mr. Valladao is eligible to receive cash bonuses at the discretion of the board of directors. The Company granted options to purchase 10,000,000 shares of Company stock. We also provide Mr. Valladao with a housing allowance and health insurance.

We have an employment agreement in place with Mr. Alford that retains him as our Chief Operating Officer through December 31, 2012. Mr. Alford will receive a base salary of $112,000 per year. The Company granted options to purchase 3,000,000 shares of Company stock. We have also provided Mr. Alford with health insurance.

Stock Option Plans

We did not have a stock option plan in place as of December 31, 2009.

On October 30, 2009, the board of directors granted 15,000,000 options to officers to purchase shares of Company stock on a discretionary basis. These options were valued at their fair value as promulgated in SFAS No.123 as revised.

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth certain information known to us with respect to the beneficial ownership of our Common Stock as of the effective date of the Merger by (1) all persons who are beneficial owners of 5% or more of our voting securities, (2) each director, (3) each executive officer, and (4) all directors and executive officers as a group. The information regarding beneficial ownership of our common stock has been presented in accordance with the rules of the Securities and Exchange Commission. Under these rules, a person may be deemed to beneficially own any shares of capital stock as to which such person, directly or indirectly, has or shares voting power or investment power, and to beneficially own any shares of our capital stock as to which such person has the right to acquire voting or investment power within 60 days through the exercise of any stock option or other right. The percentage of beneficial ownership as to any person as of a particular date is calculated by dividing (a) (i) the number of shares beneficially owned by such person plus (ii) the number of shares as to which such person has the right to acquire voting or investment power within 60 days by (b) the total number of shares outstanding as of such date, plus any shares that such person has the right to acquire from us within 60 days. Including those shares in the tables does not, however, constitute an admission that the named stockholder is a direct or indirect beneficial owner of those shares. Unless otherwise indicated, each person or entity named in the table has sole voting power and investment power (or shares that power with that person’s spouse) with respect to all shares of capital stock listed as owned by that person or entity.

Except as otherwise indicated, all Shares are owned directly and the percentage shown is based on 23,847,417 Shares of Common Stock issued and outstanding and 5,573,284 Warrants and Options issued, outstanding and exercisable within 60 days as of December 31, 2009. Addresses for all of the individuals listed in the table below are c/o General Automotive Company, 5422 Carrier Drive, Suite 309, Orlando, FL 32819.


Title of class	Name and address of beneficial owner ⁽²⁾	Amount of beneficial ownership ⁽¹⁾	Percent of class
Current Executive Officers & Directors:
Common	Dan Valladao	2,715,751 Shares	9.23	%
Common	Tim Alford	703,560 Shares	2.39	%
Common	Kenneth Adams	400,000 Shares	1.35	%
Total of All Current Directors and Officer:		3,819,311 Shares	12.98	%
More than 5% Beneficial Owners
Common	Douglas J. Nagel, Trustee of the Douglas J. Nagel Revocable Trust	4,872,323 Shares	16.56	%
⁽¹⁾ Includes all currently issued and outstanding shares, shares underlying warrants convertible within 60 days and shares underlying options exercisable within 60 days. ⁽²⁾ As used in this table, “beneficial ownership” means the sole or shared power to vote, or to direct the voting of, a security, or the sole or shared investment power with respect to a security (i.e., the power to dispose of, or to direct the disposition of, a security). In addition, for purposes of this table, a person is deemed, as of any date, to have “beneficial ownership” of any security that such person has the right to acquire within 60 days after such date.

Item 13.

Certain Relationships and Related Transactions

Except as disclosed herein, and with the exception of the Merger, none of our directors or executive officers, nor any proposed nominee for election as a director, nor any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to all of our outstanding shares, nor any members of the immediate family (including spouse, parents, children, siblings, and in-laws) of any of the foregoing persons has any material interest, direct or indirect, in any transaction over the last two years or in any presently proposed transaction which, in either case, has or will materially affect us.

Item 14.

Principal Accountant Fees and Services

Below is the table of Audit Fees (amounts in US$) billed by our auditor in connection with the audit of the Company’s annual financial statements for the years ended:


Financial Statements for the Year Ended December 31,	Audit Services		Audit Related Fees		Tax Fees		Other Fees
2009	$	35,218	$	36,321	$	0	$	0
2008	$	77,000	$	33,600	$	1,680	$	0

Item 15.

Exhibits


Exhibit Number		Description
31.1		Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

General Automotive Company


By:		/s/ Dan Valladao
		Dan Valladao Chief Executive Officer
		April 14, 2010

In accordance with Section 13 or 15(d) of the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:


By:		/s/ Shawn Powell Joseph
		Shawn Powell Joseph Chief Financial Officer
		April 14, 2010

EX-31.1 2 dex311.htm CERTIFICATION OF CEO PURSUANT TO SECTION 302 Certification of CEO Pursuant to Section 302

Exhibit 31.1

CERTIFICATIONS

I, Dan Valladao, certify that;

1.	I have reviewed this Annual report on Form 10K for the year ended December 31, 2009 of General Automotive Company (the “registrant”);

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 14, 2010

/s/ Dan Valladao

By: Dan Valladao

Title: Chief Executive Officer

EX-31.2 3 dex312.htm CERTIFICATION OF CFO PURSUANT TO SECTION 302 Certification of CFO Pursuant to Section 302

Exhibit 31.2

CERTIFICATIONS

I, Shawn Powell Joseph, certify that;

I have reviewed this Annual report on Form 10K for the year ended December 31, 2009 of General Automotive Company (the “registrant”);

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 14, 2010

/s/ Shawn Powell Joseph

By: Shawn Powell Joseph

Title: Chief Financial Officer

EX-32.1 4 dex321.htm CERTIFICATION PURSUANT TO SECTION 906 Certification Pursuant to Section 906

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND

CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the accompanying annual Report on Form 10-K of General Automotive Company for the year ended December 31, 2009, I certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

1.	The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

2.	The information contained in the Report fairly presents, in all material respects, the consolidated financial condition of the Company as of the dates presented and the consolidated result of operations of the Company for the periods presented.


By:		/s/ Dan Valladao
Name:		Dan Valladao
Title:		Chief Executive Officer

Date:		April 14, 2010

By:		/s/ Shawn Powell Joseph
Name:		Shawn Powell Joseph
Title:		Chief Financial Officer

Date:		April 14, 2010

This certification has been furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

A signed original of this written statement required by Section 906 has been provided to General Automotive Company and will be retained by General Automotive Company and furnished to the Securities and Exchange Commission or its staff upon request.

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