NOTES TO FINANCIAL STATEMENTS
June 30, 2000 and December 31, 1998

NOTE 1 - ORGANIZATION HISTORY

The Company was organized September 6, 1988 as Q-Com Corp. under the laws of the State of Nevada. On March 31, 1995, its name was changed to Drink World, Inc. On July 21, 1995, the Company changed its name to Aimrite Holdings Corporation (AHC).

On July 24, 1995, the stockholders approved a 2-for-1 forward stock split and approved changing the par value from $0.01 to $0.001. The Company changed the authorized number of shares of common stock 50,000,000 and authorized 10,000,000 shares of preferred stock at $0.001 par value.

On July 25, 1995, the Company issued 8,000,000 shares of common stock to acquire an 80% interest in Aimrite Systems International, Inc. (ASI).

During 1996, AHC issued 676,000 shares of common stock to pay debts of ASI. The Company also approved a 1-for- 20 reverse stock split.

On February 5, 1997, the stockholders approved "spinning- off" the subsidiary, ASI, effective February 12, 1997. AHC acquired all of the assets, except patents, and all of the liabilities of ASI by returning 1,105,080 shares of ASI common stock to ASI. The Company also gave 1,753,400 shares of ASI stock to acquire a master marketing agreement and 426,548 shares for a master license to use the patents. An additional 2,000,000 shares of AHC stock was used to acquire the license and marketing agreements. Under the terms of the license and marketing agreements, AHC will also pay an 8% royalty for the right to manufacture and market the computer controlled shock absorber system and a computer controlled air suspension system developed by ASI.

On October 9, 1999, the Company amended the articles of incorporation to increase the authorized number of shares of common stock and preferred stock to 100,000,000 and 50,000,000, respectively, while maintaining their $0.001 par value.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND PROCEDURES

Accounting Method

The Company uses the accrual method of accounting and has adopted a December 31 year end.

                                      For the
                                  Six Months Ended
                                      June 30,
                                2000            1999
                              --------       ---------


Net (loss) (numerator)      $ (1,406,419)      $(302,854)
Weighted average shares        30,809,291      28,261,472
outstanding (denominator)
                            -------------    ------------
Basic loss per share          $    (0.05)     $    (0.01)
                            =============    ============

AIMRITE HOLDINGS CORPORATION
(A Development Stage Company)

Notes to the Financial Statements June 30, 2000 and December 31, 1999

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND PROCEDURES
(Continued)

Common stock equivalents, consisting of warrants and options, have not been included in the calculations as their effect is antifilutive.

Provision for Taxes

At June 30, 2000, the company has a net operating loss carryforward available to offset future taxable income of approximately $17,600,000, which will expire in 2020. If substantial changes in the Company's ownership should occur, there would also be an annual limitation of the amount of NOL carryforwards which could be utilized. No tax benefit had been reported in the financial statements, because the Company believes there is a 50% or greater change the carryforwards will expire unused. The tax benefits of the loss carryforwards are offset by a valuation allowance of the same amount.

The income tax benefit differs from the amount computed at federal statutory rates of approximately 38% as follows:

                                     For the Six Months Ended
                                             June 30,
                                        2000          1999

Income  tax  benefit at  statutory       $534,440     $ 115,085
rate
Change in valuation allowance           (534,440)     (115,085)
                                      -----------   -----------
                                          $     -       $     -
                                      ===========   ===========

Deferred tax assets (liabilities) are comprised of the following:

                                     For the Six Months Ended
                                             June 30,
                                        2000          1999

Income  tax  benefit at  statutory     $6,900,960    $4,703,860
rate
Change in valuation allowance         (6,900,960)   (4,703,860)
                                      -----------   -----------
                                          $     -       $     -
                                      ===========   ===========

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carryforwards may be limited as to use in the future.

Cash and Cash Equivalents

For purposes of financial statement presentation, the Company considers all highly liquid investments with a maturity of three months or less, from the date of purchase to be cash equivalents.

AIMRITE HOLDINGS CORPORATION
(A Development Stage Company)

Notes to the Financial Statements June 30, 2000 and December 31, 1999

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND PROCEDURES
(Continued)

Use of Estimates

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

Valuation Allowance

The Company evaluates the recoverability of the marketing agreement and other intangible assets such as technology and drawings, and reviews the amortization period on an annual basis. Several factors are used to evaluate their assets, including but not limited to:
management's plans for future operations, recent operating results and projected, undiscounted cash flows. The Company has established a valuation allowance of $6,034,433 which will be evaluated whenever events or circumstances indicate a possible impairment.

Advertising

The Company follows the policy of charging the costs of advertising to expense as incurred.

Leasehold improvements        10 years    Straight-line
Furniture and office          5-10 years  Double declining balance
equipment

Depreciation expense for the six months ended June 30, 2000 and for the year ended December 31, 1999 was $7,118 amd $6,243, respectively.

Revenue Recognition

The Company currently has no source of revenues. Revenue recognition policies will be determined when principal operations begin.

Research and Development

The Company follows the policy of charging research and development costs to expense as incurred.

AIMRITE HOLDINGS CORPORATION
(A Development Stage Company)

Notes to the Financial Statements June 30, 2000 and December 31, 1999

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND PROCEDURES
(Continued)

Change in Accounting Principle

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" which requires companies to record derivatives as assets or liabilities, measured at fair market value. Gains or losses resulting from changes in the values of those derivatives would be accounted for depending on the use of the derivative and whether it qualifies for hedge accounting. The key criterion for hedge accounting is that the hedging relationship must be highly effective in achieving offsetting changes in fair value or cash flows. SFAS No. 133 is effective for all fiscal quarters of fiscal years beginning after June 15, 1999. The adoption of this statement had no material impact on the Company's financial statements.

Concentration of Risk

The Company maintains its cash in bank deposit accounts at high credit quality financial institutions. The balances, at times, may exceed federally insured limits.

Unaudited Financial Statements

The accompanying unaudited financial statements include all of the adjustments which, in the opinion of management, are necessary for a fair presentation. Such adjustments are of a normal recurring nature.

NOTE 3 - WARRANTS AND OPTIONS

There are no warrants or options outstanding to acquire any additional shares of common stock of the Company.

NOTE 4 - GOING CONCERN

The Company has had no operations since the beginning of the development stage. The Company has not established revenues sufficient to cover its operating costs and allow it to continue as a going concern. The Company is currently seeking to obtain funds to begin manufacturing. The Company is in negotiations with various automobile manufacturers to license their computerized controlled automotive suspension systems.

NOTE 5 - NOTE PAYABLE

June 30, 2000 and December 31, 1999, the Company had a note payable due to its patent attorney of $-0- and$14,985, respectively. This note is unsecured and bears interest at the rate of 8% per annum. This amount, along with the accrued interest of $-0- and $355, respectively, is delinquent.

AIMRITE HOLDINGS CORPORATION
(A Development Stage Company)

Notes to the Financial Statements June 30, 2000 and December 31, 1999

NOTE 6 - NOTE PAYABLE - RELATED PARTY

From time to time the Company borrows funds from its Director and President. At June 30, 2000 and December 31, 1999, the Company had a note payable due to this related party of $641,449 and $209,869, respectively. This note is unsecured and due upon demand. Interest has been accrued on the note at 8% per annum.

NOTE 7 - PREFERRED STOCK

The shareholders of the Company have authorized 50,000,000 shares of preferred stock with a par value of $0.001, consisting of 1,000,000 shares of Series A, 2,000,000 shares of Series B, and 47,000,000 shares of Series C. The terms of the Series A and Series B preferred stock are described below. The terms of the Series C preferred stock will be set by the Board at a future time.

Series A

At June 30, 2000 and December 31, 1999, there are -0- and-0- shares of Series A preferred stock issued and outstanding, respectively. Each share of the preferred stock is voting stock and is entitled to 100 votes for each share held. These shares are not convertible to shares of common stock. No sale of assets, dissolution, merger, acquisition or amendment of the articles of incorporation shall occur without the approval of a majority of the holders of preferred Series A stock.

NOTE 7 - PREFERRED STOCK (Continued)

Series B

At June 30, 2000 and December 31, 1999, there are 444,576 and 444,576 shares of Series B preferred stock issued and outstanding, respectively. Holders of Series B preferred shares will not transfer, sell, pledge, encumber or give away any of the shares transferred to them for one year following their acquisition. The Series B preferred shares shall be convertible to shares of common stock after one year at the rate of one share of common stock for one share of Series B preferred shares. After one year, holders of Series B preferred shares (or shares of common stock which are held pursuant to the conversion rights) shall offer the Company the right to purchase the shares at a price which is one half of the average of the bid and ask price over the 10 days prior to the sale to the Company and the Company shall purchase at that price. If the holder of Series B preferred shares receives a higher offer, the Company shall have the right of first refusal to purchase all of the shares that the holder would transfer at the offered price. The holder of Series B preferred shares shall obtain the reasonable business advice of the Company before encumbering, selling, pledging or giving away any of the shares.

AIMRITE HOLDINGS CORPORATION
(A Development Stage Company)

Notes to the Financial Statements June 30, 2000 and December 31, 1999

NOTE 8 - COMMITMENTS AND CONTINGENCIES

On June 20, 1999, the Company entered into a lease agreement for the premises in which they will operate. The agreeement specifies a term of 10 years, commencing on June 21, 1999 and continuing until May 31, 2009, with a monthly pay of $6,547. Minimum lease commitments for the years ended December 31, 2000 through December 31, 2005 are $78,564 per year.