VECTOR AEROMOTIVE CORPORATION

   FINANCIAL STATEMENTS

   As of December 31, 1997 and 1996
   And For The Years Ended December 31, 1997, 1996 and 1995













   Index

   Report of
   Independent Certified Public Accountants             F-2

   Financial Statements
     Balance Sheets                                     F-3
     Statements of Operations                           F-4
     Statements of Shareholders' Equity (Deficit)       F-5
     Statements of Cash Flows                           F-6

   Notes to Financial Statements                 F-7 - F-25

   Report of Independent Certified Public
     Accountants on Financial Statement Schedule       S-1

   Financial Statement Schedule
     Schedule II Valuation and Qualifying Accounts     S-2


   All other schedules have been omitted because they are
   either not required, not applicable or the information has
   otherwise been supplied.

                           F-1


   Report of Independent Certified Public Accountants

   Board of Directors
   Vector Aeromotive Corporation
   Green Cove Springs, Florida

   We have audited the accompanying balance sheets of Vector
   Aeromotive Corporation as of December 31, 1997 and 1996 and
   the related statements of operations, shareholders' equity
   (deficit) and cash flows for each of the three years in the
   period ended December 31, 1997. 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 generally
   accepted auditing standards. Those standards require that
   we plan and perform the audits to obtain reasonable
   assurance about whether the financial statements are free
   of material misstatement. An audit includes examining, on a
   test basis, evidence supporting the amounts and disclosures
   in the financial statements. An audit also includes
   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 financial statements referred to above
   present fairly, in all material respects, the financial
   position of Vector Aeromotive Corporation at December 31,
   1997 and 1996 and the results of its operations and its
   cash flows for each of the three years in the period ended
   December 31, 1997 in conformity with generally accepted
   accounting principles.

   The accompanying financial statements have been prepared
   assuming that the Company will continue as a going concern.
   As described in Note 3 to the financial statements, the
   Company has experienced significant operating losses, has a
   working capital deficit and has a shareholders' deficit as
   of December 31, 1997. These conditions raise substantial
   doubt about the Company's ability to continue as a going
   concern. Management's plans in regard to these matters are
   also described in Note 3. The financial statements do not
   include any adjustments that might result from the outcome
   of this uncertainty.

   BDO SEIDMAN, LLP
   Orlando, Florida
   February 28, 1998

                           F-2


   VECTOR AEROMOTIVE CORPORATION

   BALANCE SHEETS


                               December 31,      December 31,
                                       1997              1996
   ----------------------------------------------------------
   Assets (Note 4)

   Current assets:

   Cash and cash equivalents    $         -      $     33,864
     Accounts receivable -
     trade                                -           155,000
     Inventories (Note 5)           439,637           556,612
     Prepaid expenses and other           -            15,628
   ----------------------------------------------------------
       Total current assets         439,637           761,104

   Property and equipment,
     net (Note 6)                   107,914           123,999

   Other                              1,850             1,850
   ----------------------------------------------------------
                                $   549,401       $   886,953
   ==========================================================

   Liabilities and Shareholders' Deficit

   Current liabilities:
     Note payable (Note 8)     $   250,000       $   250,000
     Accounts payable:
     Trade                         677,905           710,212
     Related parties                     -         1,416,107
     Accrued expenses (Note 7)     521,709           501,505
     Loans payable to related
       parties (Note 4)            310,974                 -
     Customer deposits              25,000            25,000
   ----------------------------------------------------------
   Total current liabilities     1,785,588         2,902,824
   ----------------------------------------------------------
   Debt to related party (Note 10) 992,700                 -
   ----------------------------------------------------------
   Commitments and contingencies
     (Notes 3, 12, 15, 16 and 17)        -                 -
   ----------------------------------------------------------
   Shareholders' deficit:
     Preferred stock, par value
     $.10 per share;
       5,000,000 shares authorized;
       none issued (Note 9)             -                  -
     Common stock, par value
     $.01 per share;
       600,000,000 shares authorized;
       issued and outstanding 53,639,599
       (Note 12)                  536,396            536,396
     Capital in excess of
     par value                36,786,109          36,786,109
     Accumulated deficit      39,551,392)        (39,338,376)
   ----------------------------------------------------------
   Total shareholders' deficit (2,228,887)        (2,015,871)
   ----------------------------------------------------------
                                 $549,401            $886,953
   ==========================================================

   See accompanying notes to financial statements.

                           F-3



   VECTOR AEROMOTIVE CORPORATION

   STATEMENTS OF OPERATIONS


   Year ended December 31,  1997           1996         1995
   -----------------------------------------------------------
   Sales, net      $     331,900   $    838,678   $        -
   -----------------------------------------------------------
   Operating costs and expenses:
     Manufacturing, research
       and development   228,181      4,512,869    4,535,463
     General and
     administrative      779,325      1,800,958    2,978,871
   -----------------------------------------------------------
   Total operating costs
     and expenses      1,007,506      6,313,827    7,514,334
   -----------------------------------------------------------
   Operating loss       (675,606)    (5,475,149)  (7,514,334)
   -----------------------------------------------------------
   Other income (expense):
     Sale of technology
     rights              500,000              -            -
     Interest expense    (37,410)       (16,324)           -
     Other                     -       (103,460)    (138,231)
   -----------------------------------------------------------
                         462,590       (119,784)    (138,231)
   -----------------------------------------------------------
   Net loss             (213,016)    (5,594,933)  (7,652,565)
   -----------------------------------------------------------
   Net loss per share
     (Note 14)         $    (.01)    $     (.11) $      (.19)
   ===========================================================
   Weighted average common
   shares outstanding  53,639,599    52,589,257   40,919,421
   ===========================================================

   See accompanying notes to financial statements


                           F-4




   VECTOR AEROMOTIVE CORPORATION

   STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)


                              Capital in
             Common Stock     Excess of      Accumulated
           shares     Amount  Par Value   Deficit     Total
   ---------------------------------------------------------
   Balance,
   January  1,
   1995  24,046,366 $240,463 $26,211,740(26,090,878) 361,325

   Forfeiture
     of shares
             (5,000)     (50)         50          -        -
   Issuance of
     common stock
         18,333,333  183,333   4,922,144          -5,105,477
   Issuance of
     stock option
     for cash
                  -        -     464,134          -  464,134
   Issuance of
     common stock as
     payment of
     consulting
     fees
            290,000    2,900     142,100          -  145,000
   Issuance of
     common stock
     options
     as compensation
                  -        -     133,440          -  133,440
   Net loss for
     the year
                  -      -          - (7,652,565) (7,652,565)
   -----------------------------------------------------------
   Balance,
   December 31,
   1995
         42,664,699 426,646 31,873,608(33,743,443)(1,443,189)

   Issuance of
     common stock
         10,000,000 100,000  4,104,733          -  4,204,733
   Issuance of
     stock option
     for cash
                  -       -    500,000          -    500,000
   Issuance of
     common stock
     as payment of
     consulting fees
            350,000   3,500    171,500          -      175,000
   Exercise of
     common stock
     options
            102,400   1,024     27,246          -  28,270
   Exercise of
     common stock
     warrants
            522,500   5,226    109,022          -    114,248
   Net loss for
     the year     -       -         - (5,594,933) (5,594,933)
   ----------------------------------------------------------
   Balance,
   December 31,
   1996  53,639,599 536,396 36,786,109 (39,338,376)(2,015,871)

   Net loss for
     the year     -       -          -    (213,016)  (213,016)
   -----------------------------------------------------------
   Balance,
   December 31,
   1997
     53,639,599 536,396 $36,786,109 $(39,551,392) $(2,228,887)
   ===========================================================
   See accompanying notes to financial statements.


                           F-5


   VECTOR AEROMOTIVE CORPORATION

   STATEMENTS OF CASH FLOWS


   Year ended December 31,    1997         1996         1995
   ---------------------------------------------------------

   Cash flows from operating
    activities
   Net loss              $(213,016) $(5,594,933) $(7,652,565)
   Adjustments to reconcile
   net loss to net cash used
   in operating activities:
   Depreciation & amortization
                            16,085       153,670      165,546
   Abandonment of property and
    equipment
                                 -       352,631      394,482
   Issuance of common stock
    for services                 -       175,000      145,000
   Issuance of common stock
   warrants and options for
   services                      -             -      133,440
   Loss on litigation
     settlement                  -        18,479            -
   Related party debt
     converted to
     consideration for sale of
     technology rights    (451,104)            -            -
   Increase (decrease) from
   changes in:
   Related party account
   receivable                    -             -       50,000
   Accounts
     receivable - trade    155,000      (155,000)           -
   Inventories             116,975       (10,548)    (515,213)
   Prepaid expenses and
   other assets             15,628       263,678     (262,170)
   Court bond receivable         -             -      232,803
   Accounts payable         (4,610)      627,652      970,497
   Accrued expenses         20,204       (72,569)     470,798
   Customer deposits             -       (15,000)     (25,000)
   -----------------------------------------------------------
   Net cash used in operating
   activities             (344,838)   (4,256,940)  (5,892,382)
   -----------------------------------------------------------
   Cash flows from investing activities
   Acquisition of property
   and equipment                 -       (12,217)    (610,251)
   (Increase) decrease in other
    assets                       -       180,900      (62,417)
   -----------------------------------------------------------
   Net cash provided by (used in)
   investing activities          -       168,683     (672,668)
   -----------------------------------------------------------
   Cash flows from financing activities
   Proceeds from issuance of
    note payable                 -       250,000            -
   Proceeds from loans payable to
     related party         310,974             -    1,000,000
   Exercise of stock options     -        28,270            -
   Exercise of stock warrants    -       114,248            -
   Net proceeds from the issuance
     of  common stock options    -       500,000      464,134
   Net proceeds from the issuance of
     common stock                -     3,217,233    5,105,477
   ----------------------------------------------------------
   Net cash provided by
    financing activities   310,974     4,109,751    6,569,611
   ----------------------------------------------------------
   Net increase (decrease) in
     cash and cash equivalents
                           (33,864)       21,494        4,561

   Cash and cash equivalents,
     beginning of year      33,864        12,370        7,809
   ----------------------------------------------------------
   Cash and cash equivalents
    end of year           $      -       $33,864      $12,370
   ==========================================================

   See accompanying notes to financial statements.

                           F-6









   VECTOR AEROMOTIVE CORPORATION

   Notes to Financial Statements

   1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

   Inventories
   -----------

   Inventories are stated at the lower of cost or market.
   Cost is determined by the first-in, first-out method.

   Property and Equipment
   ----------------------

   Property and equipment is stated at cost.  Depreciation is
   provided over the estimated useful asset lives using the
   straight-line method.

   Revenue Recognition
   -------------------

   Revenues resulting from automobile sales are recognized
   when the automobiles are delivered.  Customer deposits
   received in advance of delivery are recorded as a liability
   until revenue is recognized.

   Income Taxes
   ------------

   The Company accounts for income taxes in accordance with
   Statement of Financial Accounting Standards No. 109,
   "Accounting for Income Taxes," which requires recognition
   of estimated income taxes payable or refundable on income
   tax returns for the current year and for the estimated
   future tax effect attributable to temporary differences and
   carryforwards.  Measurement of deferred income tax is based
   on enacted tax laws including tax rates, with the
   measurement of deferred income tax assets being reduced by
   available tax benefits not expected to be realized.

   Research and Development Costs
   ------------------------------

   Research and development costs are expensed as incurred.
   During the years ended December 31, 1997, 1996 and 1995,
   research and development costs were approximately $-0-,
   $976,000 and $4,427,000, respectively.

                           F-7


   Warranty Expense
   ----------------

   The Company offers a limited 24-month warranty covering
   defects in material and workmanship on its Vector M12.
   Costs related to product warranty are estimated and
   included in cost of sales at time of sale.

   Financial Instruments
   ---------------------

   Statement of Financial Accounting Standards No. 107,
   "Disclosures about Fair Value of Financial Instruments,"
   requires disclosure of fair value information about
   financial instruments. Fair value estimates discussed
   herein are based upon certain market assumptions and
   pertinent information available to management as of
   December 31, 1997.

   The respective carrying value of certain on-balance-sheet
   financial instruments approximated their fair values. These
   financial instruments include cash and equivalents, trade
   receivables, accounts payable and accrued expenses.  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.

   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 period reported. Actual
   results could differ from those estimates.

   Impairment of Long-Lived Assets
   -------------------------------

   Statement of Financial Accounting Standards No. 121,
   "Accounting for the Impairment of Long-Lived Assets and for
   Long-Lived Assets to be Disposed Of," issued by the
   Financial Accounting Standards Board

                           F-8


   establishes new guidelines regarding when impairment losses
   on long-lived assets, which include property and equipment
   and certain identifiable intangible assets and goodwill,
   should be recognized and how impairment losses should be
   measured. The adoption of this standard had no material
   effect on the Company's financial position or results of
   operations.

   Recent Pronouncements
   ---------------------

   In June 1997, the Financial Accounting Standards Board
   issued Statement of Financial Accounting Standards No. 130,
   "Reporting Comprehensive Income" (SFAS 130), and No. 131,
   "Disclosure about Segments of an Enterprise and Related
   Information" (SFAS 131). SFAS 130 establishes standards for
   reporting and displaying comprehensive income, its
   components and accumulated balances. SFAS 131 establishes
   standards for the way that public companies report
   information about operating segments in annual financial
   statements and requires reporting of selected information
   about operating segments in interim financial statements
   issued to the public. Both SFAS 130 and SFAS 131 are
   effective for periods beginning after December 15, 1997.
   The Company has not determined the impact that the adoption
   of these new accounting standards will have on its future
   financial statements and disclosures.

   Reclassification
   ----------------

   Certain items have been reclassified in the 1996 and 1995
   financial statements to conform to the 1997 presentation.

                           F-9


   2.  NATURE OF BUSINESS

   Vector Aeromotive Corporation (the "Company") is engaged in
   the design, development, manufacturing and marketing of
   exotic sports cars. The Company has been engineering,
   developing and testing the Vector M12 automobile since
   1994. Limited production of the first M12s commenced in
   October 1995. Production of the Vector W8, the Company's
   first production model, ceased in 1993. The Company's
   vehicles are sold to dealers in the United States.

   The Company suspended operations in November 1996. On July
   22, 1997, the Company entered into a restructuring
   agreement (see Note 4) which resulted in the Company
   resuming operations on a limited basis.

   3.  GOING CONCERN CONSIDERATION

   As shown in the accompanying financial statements, the
   Company has experienced significant operating losses since
   inception. The Company's net loss for 1997 was
   approximately $213,000, the accumulated deficit was
   $39,551,000 and current liabilities exceed current assets
   by $1,346,000 as of December 31, 1997. The Company
   suspended operations in November 1996 and resumed limited
   operations in September 1997. These conditions raise
   substantial doubt about the Company's ability to continue
   as a going concern.

   The Company believes that the following actions and plans
   will allow it to resume operations on a profitable basis
   and meet its obligations:

   As described in Note 4, the Company has entered into an
   agreement with American Dream International Limited
   ("American"), formerly known as Tradelink International
   Limited, whereby that company can invest and loan over
   $5,000,000 to the Company. American has options to acquire
   other companies whose operations may be complimentary to
   the Company.

   All Company activities have been consolidated into the
   plant in Green Cove Springs, Florida.

   As described in Note 15 to the financial statements, the
   Company has settled litigation which it has endured for
   several years. The significant

                           F-10

   effort and expense which management expended on that matter
   can now be directed to restoring and stabilizing
   operations.

   As described in Notes 9 and 10 to the financial statements,
   the Company has agreements to restructure its debt to a
   formerly affiliated company by exchanging it for preferred
   stock.

   The Company resumed operations with a small group of part-time employees
   and consultants. The Company sold three
   vehicles to customers as of December 31, 1997. Operating
   costs have been reduced significantly from 1996 levels and
   are anticipated to grow at a level commensurate with
   production and sales.

   The financial statements do not include any adjustments to
   reflect the possible future effects on the recoverability
   of assets and classification of liabilities that would
   result if the Company is unable to continue as a going
   concern.

   4.  RESTRUCTURING AGREEMENT

   On July 22, 1997, the Company entered into an agreement
   with American whereby the Company granted an option to
   American to purchase 60,000,000 shares of the Company's
   unissued common stock for $1,250,000 ($.0208 per share).
   The 60,000,000 shares have demand registration rights.
   American also agreed to loan the Company up to $3,750,000
   under two lending agreements. Exercise of the option is
   contingent upon several factors, including the successful
   resolution of the litigation with the Company's former
   President (see Note 15) and obtaining clear title to the
   loan collateral. As of February 28, 1998, American has not
   exercised its options.  The Company valued these options
   based on their estimated fair market value as of July 22,
   1997.

   Line of Credit "1" provides for advances up to $1,250,000
   and bear interest at 2% over the prime rate. Advances can
   be used by the lender as part of its purchase price of the
   Company's common stock as described in the preceding
   paragraph and, in certain circumstances, can be converted
   to a ten-year term loan with interest at 10%. Unconverted
   balances ($310,974 at December 31, 1997) are due on demand.

                           F-11


   Line of Credit "2" provides for advances up to $2,500,000
   with interest at 2% over the prime rate and is due on
   demand.

   Both lines are collateralized by substantially all of the
   Company's assets.

   At the same time, the Company, American and V'Power entered
   into an option agreement whereby V'Power has agreed to vote
   their shares (37,333,333 shares) for directors designated
   by American comprising a majority of the Board of Directors
   of the Company for a period of ten years after July 22,
   1997, or if the option is not exercised, for as long as any
   unpaid amounts under the loan agreements noted above remain
   outstanding.  The Company valued these options based on
   their estimated fair market value as of July 22, 1997.

   Subject to various terms and conditions, V'Power has
   granted an option to American to purchase any and all
   Vector shares owned by V'Power or its affiliates. The
   option is exercisable beginning six months from the date
   that American exercises its option to purchase the
   Company's stock for a period of four years. American may
   purchase any or all of the V'Power common stock at 70% of
   the market price, as defined, of the shares.

   As of February 28, 1998, American has not exercised its
   option.

                           F-12


   5.  INVENTORIES

   Inventories are summarized as follows:

   December 31,                         1997        1996
   ------------------------------------------------------

   Raw materials                     $162,573    $223,666
   Work-in-process                    112,963      48,666
   Finished goods                     164,101     284,280
   ------------------------------------------------------
                                     $439,637    $556,612
   ======================================================

   During 1996, replacement parts with a carrying value of
   approximately $255,500 were transferred to the former
   President as part of a settlement of a lawsuit with the
   former President (see Note 15). During 1995, a discontinued
   Vector W8, included in finished goods inventory, and
   related replacement parts were written down to estimated
   fair market value.

   6.  PROPERTY AND EQUIPMENT

   Property and equipment are summarized as follows:

                              Useful
   December 31,               Lives        1997      1996
   ------------------------------------------------------

   Leasehold improvements    5 years   $22,260    $22,260
   Tooling                   5 years    75,000     75,000
   Machinery and equipment   5 years   328,359    328,359
   Office equipment          5 years     8,263      8,263
   Computers                 3 years    27,536     27,536
   ------------------------------------------------------
                                       461,418    461,418
   Less accumulated depreciation       353,504    337,419
   ------------------------------------------------------
                                     $107,914    $123,999
   ======================================================

   The Company recorded an impairment loss of $330,371 related
   to capitalized tooling in December 1996. The impairment
   resulted from the suspension of operations of the Company
   in November 1996 and the related reduction in expected
   future cash flows for which capitalized tooling costs would
   be recovered. In determining the amount of the impairment,
   management estimated the fair value of the tooling upon the
   resumption of operations in 1997 by considering replacement
   costs and expected future cash flows.

                           F-13


   7.  ACCRUED EXPENSES

   Accrued expenses consist of the following:

   December 31,                            1997         1996
   ---------------------------------------------------------
   Compensation and employee benefits   $106,205     $151,920
   Interest                               36,126        6,975
   Legal settlement                      218,000      218,000
   Warranty                               35,000       20,000
   Other                                 126,378      104,610
   ----------------------------------------------------------
                                        $521,709     $501,505
   ==========================================================


   8.  NOTES PAYABLE

   Notes payable consist of following:

   December 31,                            1997    1996

   Unsecured convertible note payable
   to an individual bearing interest
   at 9%, due currently. Convertible
   into shares of common stock at the
   option of the holder at a conversion
   rate of 90% of the fair market value
   of the Company's common stock at
   the date of conversion.             $250,000  $250,000


   Total notes payable                 $250,000  $250,000

                           F-14


   9. PREFERRED STOCK

   During 1997, the Company designated 9,927 shares of its
   preferred stock as Series A cumulative preferred stock
   (Series A Stock). Upon issuance, Series A Stock will be
   redeemable at a redemption price of $100 per share plus any
   accumulated and unpaid dividends beginning nine months
   after the stock is issued. The Company may redeem the
   Series A stock at any time at the redemption price plus any
   accumulated unpaid dividends. The Series A Stock will have
   rights senior to any other security currently issued by the
   Company and will be classified as a liability on the
   Company's balance sheet. Dividends will be cumulative and
   are payable on a quarterly basis. The dividend rate is
   based on the current LIBOR rate as defined in the
   agreement. As of December 31, 1997, no preferred stock has
   been issued by the Company.

   So long as any Series A is outstanding, the Company may not
   declare any dividend, make a distribution, or purchase,
   acquire or set aside any money for the purchase or
   redemption of any shares of stock with rights junior to the
   Series A Stock unless all Series A dividends have been paid
   or duly provided for and all amounts with respect to the
   mandatory redemption provisions of the Series A stock have
   been paid or duly provided for.

   Upon liquidation of the Company for any reason, the holders
   of the Series A Stock are entitled to be paid out of the
   assets available for distribution to its shareholders
   before any payment to other security holders are made. The
   amounts to be paid to the Series A stockholders shall
   include all unredeemed shares at $100 per share plus all
   accumulated and unpaid dividends.

   Under certain circumstances generally related to the sale
   of all of the Company's assets or merger or consolidation
   of the Company, the holders of the Series A securities may
   require the Company to redeem all or any portion of the
   outstanding Series A Stock.

   The holders of the Series A Stock have no voting power
   unless dividends remain unpaid for a period of one and one-half years,
   at which time the Series A holders may vote for
   the election of up to two directors.

                           F-15


   10.  RELATED PARTY TRANSACTIONS

   Technology Rights
   -----------------

   On July 22, 1997, the Company agreed to sell V'Power
   certain technology rights for $500,000, comprised of
   $451,104 owed to V'Power by the Company and a cash payment
   of $48,896 by V'Power to the Company.

   Debt to Related Party
   ---------------------

   As part of the July 22, 1997 restructuring, the Company
   entered into a debt conversion and preferred stock
   agreement with Lamborghini S.p.A. and Lamborghini U.S.A.
   (collectively Lamborghini). Under the terms of the
   agreement, Lamborghini agreed to forbear any action to
   collect Vector's indebtedness of $992,700 and would convert
   the indebtedness to Series A preferred stock upon
   American's execution of its option to acquire 60,000,000
   shares of Vector's common stock. The Series A preferred
   stock would be redeemable beginning nine months after the
   stock is issued at $10,000 per month for eight months and
   12 substantially equal monthly installments thereafter.

                           F-17


   11.  STOCK OFFERINGS

   The Company has entered into share purchase agreements with
   V'Power Corporation ("V'Power") as follows:

                                January 24,      January 6,
                                      1996             1995
   --------------------------------------------------------
   Shares purchased             10,000,000       18,333,333

   Price per share                    $.45             $.30

   Options granted:
   Shares                       50,000,000       50,000,000

   Exercise price per share           $.45             $.43

   Payment for option             $500,000         $500,000

   Offering costs
   netted with proceeds           $295,267         $430,389
   ========================================================

   All common stock options expired one year after the date of
   issuance. The 1996 option expired on January 24, 1997.

   V'Power purchased the 1996 stock and stock option for
   $5,000,000 ($4,000,000 in cash and a $1,000,000 offset of a
   note payable by the Company to V'Power).

   12.  STOCK OPTIONS AND WARRANTS

   The Company has three incentive stock option plans for key
   officers and employees, three nonqualified stock option
   plans for officers, employees, directors and consultants
   and an omnibus stock plan for employees, consultants and
   directors that has issued stock options and is authorized
   to issue restricted and unrestricted common stock and stock
   appreciation rights. The Company applies APB Opinion 25,
   "Accounting for Stock Issued to Employees," and related
   interpretations in accounting for the options and stock
   appreciation rights. Under APB Opinion 25, if options are
   granted or extended at exercise prices less than fair
   market value, compensation expense is recorded for the
   difference between the grant price and the fair market
   value.

   The options are generally exercisable over nine years
   beginning one year from the date of grant. The plans at
   December 31, 1997 are summarized as follows:

                                        Options
                             Options  Available     Options
   Plan Description         Approved  for Grant Exercisable
   --------------------------------------------------------
   1988 incentive plan        40,000     40,000          -
   1988 nonqualified         120,000    106,000          -
   1990 incentive plan       100,000    100,000          -
   1990 nonqualified         100,000       -             -
   1992 incentive plan       150,000    150,000          -
   1992 nonqualified         150,000    150,000          -
   1994 omnibus plan       2,500,000  2,368,600     95,000
   --------------------------------------------------------
                           3,160,000  2,914,600     95,000
   ========================================================

   Statement of Financial Accounting Standards No. 123 (FAS
   123) "Accounting for Stock-Based Compensation," requires
   the Company to provide pro forma information regarding net
   income and earnings per share as if compensation cost for
   the Company's stock options had been determined in
   accordance with the fair value based method prescribed in
   FAS 123. The Company estimates the fair value of each stock
   option at the grant date by using the Black-Scholes option-pricing model
   with the following weighted-average
   assumptions used for grants: no dividend yield, volatility
   ranging

                           F-18

   from 55% to 73%, risk-free interest rates ranging from 4.2%
   to 6.4% and expected lives ranging from one to three years.

   Under the accounting provisions of FASB Statement 123, the
   Company's net loss and loss per share would have been
   increased to the pro forma amounts indicated below:

   December 31,            1997         1996       1995

   Net loss
   As reported        $(213,016) ($5,594,933)$(7,652,565)
   Pro forma           (213,016)  (5,594,933) (7,677,585)

   Loss per common share

   As reported            $(.01)       $(.11)      $(.19)
   Pro forma               (.01)        (.11)       (.19)

   Changes in stock options outstanding within the above plans
   and nonplan options (see Note 17) are summarized as
   follows:

                           Weighted-Average Weighted-Average
                             Exercise Price  Fair Value of
                        Shares   Per Share Options Granted
   --------------------------------------------------------
   Outstanding,
   December 31, 1994    288,000      $.22            $ -

   Granted -
   less than market     834,000       .38             .19
   Granted -
   over market          500,000      1.11               -
   --------------------------------------------------------
   Outstanding,
   December 31, 1995  1,622,000      $.76            $ -

   Exercised           (102,400)      .30              -
   Expired             (850,000)      .49              -
   -------------------------------------------------------
   Outstanding,
   December 31, 1996    669,600       .61              -

   Expired             (574,600)      .85              -
   -------------------------------------------------------
   Outstanding,
   December 31, 1997     95,000      $.38             $ -
   =======================================================

   The remaining options are held by a director of the Company
   and expire in 2004.

                           F-19


   The following table summarizes information about fixed
   stock options outstanding at December 31, 1997:


              Options Outstanding         Options Exercisable
         -------------------------------- -------------------
                     Weighted

                     Average     Weighted-           Weighted-
         Number      Remaining   Average    Number    Average
   Range Outstanding Contractual Exercise Exercisable Exercise
   of    at 12/31/97 Life        Price    at 12/31/97 Price
   Exercise
   Prices
   -----------------------------------------------------------
   $.38      95,000      7.6         $.38      95,000     $.38
   ===========================================================
   Common Stock Options Issued as Compensation

   During the years ended December 31, 1995 and September 30,
   1994, compensation expense of $133,440 and $37,188,
   respectively, was recognized on common stock options
   granted at less than fair market value. All such vested
   options were recorded as additional paid-in capital. No
   compensation expense related to stock options was recorded
   for the year ended December 31, 1996 since no options were
   granted.

   Stock Warrants
   --------------

   At December 31, 1997, the Company had common stock warrants
   exercisable and outstanding summarized as follows:

                            Number of     Exercise
   Expiration Date           Warrants        Price
   -----------------------------------------------
   November 18, 1998          477,500        $.22
   ===============================================

   During 1996, the expiration date for 6,150,000 warrants was
   extended to November 12, 1997, at which time they expired.
   In addition, 522,500 common stock warrants were exercised
   in 1996 at $.22 per share and 1,800,000 common stock
   warrants with exercise prices ranging from $1.00 to $1.50
   expired in 1996.

                           F-20


   Common Shares Reserved
   ----------------------

   At December 31, 1997, the Company had reserved common stock
   for the following purposes:


   ------------------------------------------
   Stock option plans               3,009,600
   American Dream stock options    60,000,000
   Warrants                           477,500
   ------------------------------------------
   Total common shares reserved    63,487,100
   ==========================================

                           F-21


   13.  INCOME TAXES

   Financial Accounting Standards No. 109 (FAS 109),
   "Accounting for Income Taxes," requires an assets and
   liability approach that requires the recognition of
   deferred tax assets and liabilities for the expected future
   tax consequences of events that have been recognized in the
   Company's financial statements or tax returns.  The
   components of the net deferred tax assets consist of the
   following:

                                    1997            1996
   -----------------------------------------------------
   Deferred tax assets:
   Net operating loss
    carry forwards           $13,164,000     $12,954,000
   Tax credit carry forwards     777,000         777,000
   Bad debts                           -         179,000
   Litigation accrual             82,000          82,000
   Asset write-offs                    -          76,000
   Inventory overhead                  -          71,000
   Compensation from
    stock options                 50,000          50,000
   Depreciation                        -          49,000
   -----------------------------------------------------
   Gross deferred
    income tax assets         14,373,000      14,238,000
   Valuation allowance       (14,373,000)    (14,238,000)
   ------------------------------------------------------
   Total deferred
    income tax assets        $         -     $         -
   ======================================================

   The Company had unused net operating losses for income tax
   purposes, expiring in various amounts from 2003 through
   2012, of approximately $35,800,000 at December 31, 1997 for
   carry forward against future years' taxable income. The
   Company has research and development tax credit carry
   forwards of approximately $777,000 which expire between
   2005 and 2008. However, as a result of the Company's stock
   offerings (see Note 11), these NOLs will be limited each
   year under the provisions of Sections 382 and 383 of the
   Internal Revenue Code of 1986, as amended.

   The tax benefit of these losses has been offset by a
   valuation allowance since management cannot determine that
   it is more likely than not it will be realized. The
   valuation allowance decreased by $164,000 and increased by
   $1,463,000 during the years ended December 31, 1997, and
   1996, respectively.


                           F-22

   14.  NET LOSS PER SHARE

   The Company adopted Financial Accounting Standards Board
   Statement of Financial Accounting Standards No. 128,
   "Earnings per Share" (SFAS 128). SFAS 128 simplifies the
   standards for computing earnings per share ("EPS") and
   makes them comparable to international earnings-per-share
   standards. This statement replaces the presentation of
   primary EPS and fully diluted EPS with a presentation of
   basic EPS and diluted EPS, respectively. Basic EPS excludes
   dilution and is computed by dividing earnings available to
   common stockholders by the weighted average number of
   common shares outstanding for the period. Similar to fully
   diluted EPS, diluted EPS reflects the potential dilution of
   securities that could share in the earnings. The adoption
   of this standard had no effect on the financial statements.

   Net loss per share was calculated based on the weighted
   average shares outstanding during the year. The effect of
   outstanding stock options representing 95,000; 669,600; and
   288,000 shares and warrants representing 477,500;
   6,627,500; and 8,950,000 shares as of December 31, 1997,
   1996 and 1995 and 500,000 units representing 1,000,000
   shares of common stock as of December 31, 1995 was not
   included in the calculations as their effect was
   antidilutive.

   15.  LITIGATION

   Since 1993, the Company has been involved in lawsuits with
   its former President. Both sides filed various claims for
   monetary damages.

   Effective December 19, 1996, the lawsuits were settled.
   Vector exchanged various assets for a note payable to the
   former President. This settlement was recorded at the
   following approximate book values:

   ---------------------------------------------------
   Parts inventory for W8                     $440,700
   Loss valuation allowance                   (185,204)
   Note payable and accrued interest          (237,017)
   ---------------------------------------------------
   Net charge to 1996 operations               $18,479
   ===================================================

   All claims for unpaid notes, rent, compensation, etc. have
   been dropped by both the Company and the former President.

                           F-23

   The Company faces several lawsuits primarily related to
   unpaid vendors. Additionally, complaints have been filed by
   two former automotive dealers for the Company. The Company
   believes adequate provision has been made for any judgments
   that may be awarded against the Company.

   Legal fees totaled $122,168, $179,078 and $546,101 for the
   years ended December 31, 1997, 1996 and 1995, respectively.
   The 1996 and 1995 fees were paid primarily to a director or
   his law firm.

   16.  LEASES

   Leases
   ------

   Prior to suspending operations, the Company had leased
   facilities from related parties. Rental expense incurred
   under related party leasing arrangements totaled $-0-,
   $78,936 and $93,546 for the years ended December 31, 1997,
   1996 and 1995, respectively. The Company presently leases
   office space and its manufacturing facility from an
   unrelated party in Green Cove Springs, Florida under a
   month-to-month lease at a cost of $6,075 per month.

   17.  COMMITMENTS

   Consulting Agreements
   ---------------------

   The Company entered into an agreement in 1995 with a
   consulting firm to perform certain services for the Company
   in exchange for i) $30,000 in cash, ii) 640,000 shares of
   Company common stock (290,000 of which were issued in 1995
   and 350,000 of which were issued in April 1996) and iii)
   options to purchase 500,000 shares of common stock at
   prices ranging from $.50 to $1.75 per share. The options
   issued under the agreement have expired. The fair market
   value of the common stock issued was recorded as consulting
   expense.

   The Company paid $150,000 to a related company for
   consulting services performed during 1995.

   The Company resumed operations subsequent to the July 22,
   1997 restructuring agreement. The Company was operated
   primarily by consultants during 1997. These consultants did
   not have written contracts with the Company and were
   retained on a month-to-month basis.

                           F-24


   18.  SUPPLEMENTAL CASH FLOW INFORMATION

   For purposes of the statement of cash flows, all highly
   liquid investments with a maturity date of three months or
   less are considered to be cash equivalents.

   December 31,                    1997        1996   1995
   -------------------------------------------------------
   Cash paid for interest       $     - $    23,907     $-
   Cash paid for income taxes         -           -      -

   Noncash operating, financing and investing activities:

   Increase in accounts payable
   related party subsequently
   included in consideration for
   technology sale               27,697           -      -
   Payment of notes payable through
   issuance of common stock
   (see Note 11)                      -   1,000,000      -
   Write-off of assets and
   liabilities associated
   with the settlement of
   litigation with the Company's
   former President (see Note 15)     -     237,017      -
   ========================================================
                           F-25



   Report of Independent Certified Public Accountants
   on Financial Statement Schedule

   Board of Directors
   Vector Aeromotive Corporation
   Green Cove Springs, Florida
   The audits referred to in our report to Vector Aeromotive
   Corporation dated February 28, 1998, which is contained in
   Item 14(a)(1) of this Form 10-K included the audits of the
   schedule listed under Item 14(a)(2) for each of the years
   ended December 31, 1997, 1996 and 1995. This financial
   statement schedule is the responsibility of the Company's
   management. Our responsibility is to express an opinion on
   this financial statement schedule based upon our audits.

   In our opinion, such schedule presents fairly, in all
   material respects, the information set forth therein.



   BDO SEIDMAN, LLP

   Orlando, Florida
   February 28, 1998

                           S-1


   VECTOR AEROMOTIVE CORPORATION
   SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS

     Column A   Column B    Column C   Column D  Column E
     --------   --------    --------   --------  --------
                            Additions
               Balance at  Charged to           Balance at
                Beginning   Costs and              End of
   Description    of Year    Expenses Deductions     Year
   ------------------------------------------------------
   Year ended
   December 31, 1997
   Reserve for loss
   contingency       $ -     $      -      $  -      $  -
   ------------------------------------------------------
   Year ended
   December 31, 1996
   Reserve for loss
   contingency  $185,024(A)  $      -  $185,024      $  -
   ------------------------------------------------------
   Year ended
   December 31, 1995
   Reserve for loss
   contingency  $154,187     $ 30,837  $      -  $185,024(A)
   ======================================================

   Represents a reserve for inventory obsolescence.


                           S-2