<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  Form 10-QSB

----
 x    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
----  ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30,1999


----
      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
----  ACT OF 1934 FOR THE TRANSITION PERIOD FROM _________ TO __________


                           Commission File No. 0-28102

                              BONDED MOTORS, INC.
                              -------------------

                 (Name of small business issuer in its charter)


              California                                95-2698520
 -----------------------------------               --------------------
  (State or other jurisdiction of                    (I.R.S. Employer
   incorporation or organization)                    Identification No.)

7522 South Maie Avenue, Los Angeles, CA                      90001
---------------------------------------                    --------
(Address of principal executive offices)                   Zip Code

Issuer's telephone number:                (323) 583-8631
                                          --------------

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
                             ---                          ---


There were 3,067,140 shares of common stock outstanding at November 15, 1999.

<PAGE>





                              BONDED MOTORS, INC.

                                     INDEX

Part I - Financial Information                                           Page

         Item 1.  Financial Statements

         Condensed Balance Sheet as of September 30, 1999                  3

         Condensed Statements of Operations for the three and nine month
                  periods ended September 30, 1999, and 1998               4

         Condensed Statements of Cash Flows for the nine month periods
                  ended September 30, 1999, and 1998                       5

         Notes to Condensed Financial Statements                          6-9

         Item 2.  Management's Discussion and Analysis or
                  Plan of Operation                                      10-12

Part II- Other Information


         Item 6.  Exhibits and Reports                                     13

         Signature                                                         14

                                      -2-

<PAGE>

                               BONDED MOTORS, INC.
                            Condensed Balance Sheet
                               September 30, 1999
                                  (Unaudited)

                                     Assets
Current assets:
     Cash                                                         $    110,168
     Trade accounts receivable (less allowance for doubtful
        accounts of $502,029)                                        3,766,402
     Inventories:
        Parts                                                        2,649,316
        Work in process                                              1,398,171
        Finished goods                                               6,275,832
                                                                 -------------
                                                                    10,323,319
                                                                 -------------

     Prepaid expenses and other current assets                         320,631
     Prepaid income taxes                                               13,216
                                                                 -------------
        Total current assets                                        14,533,736
                                                                 -------------

Restricted investment, IDB (note B)                                  4,596,904
Property and equipment, at cost:
     Machinery and equipment                                         3,779,282
     Furniture and fixtures                                            650,076
                                                                 -------------
                                                                     4,429,358
     Less accumulated depreciation                                   1,859,886
                                                                 -------------
        Net property and equipment                                   2,569,472
                                                                 -------------

Goodwill, less accumulated amortization of $ 45,024                    166,855
Cost of issuance, IDB less accumulated amortization
   of $ 3,315 (note B)                                                 247,911
                                                                 -------------
                                                                  $ 22,114,878
                                                                 =============

                      Liabilities and Shareholders' Equity
Current liabilities:
     Notes payable to bank (note C)                               $    464,844
     Short-term debt (note C)                                        7,025,793
     Accounts payable                                                3,142,546
     Accrued expenses                                                  517,819
     Accrued warranty obligations                                      961,813
     Current installments of capital lease obligations                   9,160
                                                                 -------------
        Total current liabilities                                   12,121,975
                                                                 -------------

IDB obligation (note B)                                              5,130,000
Capital lease obligations, excluding current installments                7,749

Shareholders' equity:  (note E)
     Preferred stock, no par value.  Authorized 1,000,000
       shares; none issued and outstanding                                -
     Common stock, no par value.  Authorized 10,000,000
       shares; issued and outstanding
        3,067,140 shares                                             5,040,719
     Additional paid-in capital                                        104,000
     Retained deficit                                                 (189,565)
     Notes receivable from exercise of stock options                  (100,000)
                                                                 -------------
        Total shareholders' equity                                   4,855,154
                                                                 -------------
                                                                  $ 22,114,878
                                                                 =============
See accompanying notes to condensed financial statements.


                                      -3-

<PAGE>
<TABLE>
<CAPTION>


                                            BONDED MOTORS, INC.

                                       Condensed Statement of Operations

                                                (Unaudited)


                                                  For the Three Months Ended      For the Nine Months Ended
                                                          September 30                   September 30
                                                  ---------------------------    ---------------------------
                                                     1999           1998              1999           1998
                                                     ----           ----              ----           ----

<S>                                                    <C>           <C>            <C>             <C>

Net sales                                        $  8,140,658    10,807,015     $27,536,117      30,617,667
Cost of sales                                       7,253,721     8,622,708      23,426,494      24,440,356
                                                  -----------    ----------     -----------     -----------
     Gross profit                                     886,937     2,184,307       4,109,623       6,177,311


Selling, general and administrative expenses        1,208,700     1,336,788       4,172,483       4,203,289
                                                  -----------    ----------     -----------     -----------
     Earnings (loss) from operations                 (321,763)      847,519         (62,860)      1,974,022


Other (expense) income:
     Interest expense                                (206,071)     (108,903)       (541,847)       (364,582)
     Interest income                                   43,733         2,088          53,741           6,259
     Other                                               -             -               -             (1,896)
                                                  -----------    ----------     -----------     -----------
     Earnings (loss) before income taxes             (484,101)      740,704        (550,966)      1,613,803


Income tax benefit (expense)                       (2,076,805)     (262,501)     (2,054,071)       (531,064)
                                                  -----------    ----------     -----------     -----------
     Net earnings (loss)                         $ (2,560,906)      478,203     $(2,605,037)      1,082,739
                                                  ===========    ==========     ===========     ===========

Basic earnings (loss) per share                  $      (0.83)         0.16     $     (0.85)           0.35

Diluted earnings (loss) per share                       (0.83)         0.15           (0.85)           0.34

                                                  ===========    ==========     ===========     ===========
Weighted average common shares outstanding - basic  3,067,000     3,062,000       3,067,000       3,052,000
                                                  ===========    ==========     ===========     ===========
Weighted average common and common equivalent
  shares outstanding - diluted                      3,067,000     3,133,000       3,067,000       3,168,000
                                                  ===========    ==========     ===========     ===========

</TABLE>


See accompanying notes to condensed financial statements.

                                                       -4-

<PAGE>
<TABLE>
<CAPTION>


                               BONDED MOTORS, INC.

          Condensed Statements of Cash Flows for the Nine Months Ended September 30

                                   (Unaudited)



                                                                            1999               1998
                                                                            ----               ----
<S>                                                                         <C>                <C>

Cash flows from operating activities:

     Net earnings (loss)                                                $ (2,605,037)        1,082,739
                                                                          -----------       -----------
     Adjustments to reconcile net earnings (loss) to net cash provided by
         operating activities:
           Depreciation and amortization                                     296,796           217,930
           Expense on grant of options                                          -               99,000
           Loss on sale of property and equipment                               -                1,896
           (Increase) decrease in assets:
                Accounts receivable                                          152,097        (1,429,632)
                Inventories                                                 (417,333)       (2,618,998)
                Prepaid expenses and other assets                            130,980          (316,038)
                Deferred tax assets                                        2,365,640          (366,987)
                Prepaid income taxes                                         541,216           415,227

           Increase (decrease) in liabilities:
                Accounts payable                                             (36,430)        1,171,066
                Accrued expenses                                              14,365           151,765
                Accrued warranty obligations                                 (61,411)          247,000
                                                                          -----------       -----------
                       Net cash provided by (used in) operating activities   380,883        (1,345,032)
                                                                          -----------       -----------
Cash flows from investing activities:

     Purchases of equipment                                                 (504,710)         (772,917)
     Proceeds from sale of equipment                                            -                  500
     Restricted investment, IDB                                           (4,596,904)             -
                                                                          -----------       -----------
                       Net cash used in investing activities              (5,101,614)         (772,417)
                                                                          -----------       -----------
Cash flows from financing activities:

     Proceeds from IDB issue                                               5,130,000              -
     Cost of issuance, IDB                                                  (251,226)             -
     Net proceeds from exercise of stock options                                -              157,000
     Borrowings from bank                                                 16,958,608        16,750,665
     Repayments of bank borrowings                                       (17,175,830)      (14,872,270)
     Repayment of notes payable to related parties                              -             (100,000)
     Payment of capital lease obligations                                     (8,898)           31,153
                                                                          -----------       -----------
                       Net cash provided by financing activities           4,652,654         1,966,548
                                                                          -----------       -----------
                       Net decrease in cash                                  (68,077)         (150,901)

Cash at beginning of period                                                  178,245           297,043
                                                                          -----------       -----------
Cash at end of period                                                   $    110,168           146,142
                                                                          ===========       ===========

Supplemental disclosure of cash flow information:

     Cash paid for:
         Interest                                                       $    541,847           364,582
         Income taxes                                                          3,700           482,824
                                                                          ===========       ===========

</TABLE>


See accompanying notes to condensed financial statements.

                                      -5-
<PAGE>


                              BONDED MOTORS, INC.
                    NOTES TO CONDENSED FINANCIAL STATEMENTS
                                  (UNAUDITED)


(NOTE A)  THE COMPANY AND ITS SIGNIFICANT ACCOUNTING POLICIES:

Bonded Motors (the Company),  remanufactures  automobile  engines primarily for
domestic and Japanese  imported  cars and light trucks in the United States for
resale to automotive retailers, end users and installers.

BASIS OF PRESENTATION

The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting  principles for interim financial
information and with the instructions to Form 10-QSB. Accordingly,  they do not
include all of the  information  and footnotes  required by generally  accepted
accounting  principles  for complete  financial  statements.  In the opinion of
Management,  all  adjustments  (consisting  of  normal  recurring  adjustments)
considered  necessary for a fair  presentation  have been  included.  Operating
results for the nine and three month periods  ended  September 30, 1999 are not
necessarily  indicative  of the results that may be expected for the year ended
December 31, 1999. For further  information,  refer to the financial statements
and footnotes  thereto  included in the Company's  annual report on Form 10-KSB
for the year ended December 31, 1998.

REVENUE RECOGNITION AND CORE ACCOUNTING

Revenue is  recognized  upon  shipment of product,  net of a provision for core
returns.   The  Company's   customers  are  encouraged  to  return  their  old,
rebuildable  core as a credit  against  the  identical  engine  purchased.  The
Company  identifies  the  returned  core to the original  customer  invoice and
issues  a  credit  memo  equal to the core  charge  reflected  on the  original
invoice.  These core  returns,  recorded  as a  reduction  to net  sales,  were
$9,738,312 and $9,116,010  during the nine months ended  September 30, 1999 and
1998 respectively,  and $3,009,449 and $3,797,576 during the three months ended
September 30, 1999 and 1998 respectively.

Cores  returned from customers are recorded into inventory on the same basis as
the Company  purchases cores from  independent  core  suppliers.  Customer core
returns  provide  approximately  70% of the Company's  core  requirements,  and
independent  core  suppliers  provide the remaining  30% of the Company's  core
requirements.

EARNINGS (LOSS)PER SHARE

The  weighted average common shares  outstanding  for the three and nine  month
periods  ended  September 30, 1999 and 1998 were  3,067,000 and  3,062,000, and
3,067,000  and  3,052,000, respectively.  For the three and nine month  periods

                                      -6-
<PAGE>

ended September 30, 1999 and 1998 approximately zero and 8,000, and 71,000  and
116,000, respectively of potentially dilutive common shares,  were not included
in the  calculation  of diluted net  loss per  share  as they are antidilutive.
No adjustments to net income  were  made for the  purpose  of computing diluted
earnings (loss) per share.

(NOTE B) RESTRICTED INVESTMENT, IDB:

During May, 1999 the Company  received  $5,130,000,  representing  the proceeds
from  Industrial  Development  Revenue  Bonds (the Bonds)  which were issued on
behalf of the Company by the California Infrastructure and Economic Development
Bank. The proceeds can be used only for certain qualified types of expenditure,
such as the  acquisition  of the  property  adjacent to Bonded's  existing  Los
Angeles  facility;   new  building  construction  on  such  adjacent  property;
refurbishment  of existing  structures at the existing Los Angeles site and the
adjacent  site;  and  purchases of  manufacturing  equipment,  data  processing
equipment, furniture, fixtures, and the like.

The  Bonds are  collateralized  by a standby  letter of credit  for  $5,205,896
issued by Comerica Bank which  expires on May 1, 2004.  Proceeds from the Bonds
are  currently  restricted.  The proceeds are available to the Company upon the
submission of invoices representing qualifying purchases.

The Bonds are due on May 1, 2024 and bear  interest at a weekly  variable  rate
determined by comparison  to  comparable   bonds  priced  or  traded under then
prevailing market conditions (3.45% on September 30, 1999). Interest is payable
monthly  and  principal  payments  will  be due  on a  payment  schedule  to be
determined once the Company draws down funds from the trust account.

At September 30, 1999  the  Company  had  drawn  down  $ 554,788  for equipment
acquisition and $ 102,600 cost of issuance  reimbursement  from  the investment
account.

The trust funds are invested in short term,  highly  liquid  investments  which
earn interest income.  The Company must remit any net interest income,  if any,
as a result of the interest earned on the investment fund and the interest paid
on the Bonds to U.S. Bank Trust National Association.

The Company  incurred  $248,631 of debt issue costs,  which are being amortized
over the 25 year life of the bond.

(NOTE C) LONG-TERM DEBT:

On April 1, 1999,  the  Company  entered  into an amended and  restated  credit
agreement (the Credit  Agreement)  providing for a revolving line of credit for
borrowings through May 1, 2000 based on a formula equal to the lesser of either
$10,000,000  or the  sum of  (a)  fifty-five  percent  (55%)  of the  aggregate
outstanding  principal  balance  of  eligible  receivables;  (b) the  lesser of
$5,000,000 or thirty-five percent (35%) of eligible inventory;  plus $2,500,000
which shall be subject to reduction to $1,500,000 by June 30, 1999, $500,000 by
September  30, 1999 and $0 by December 31, 1999.  The  reduction to $500,000 by
September  30,  1999 was not met, however, the bank agreed to allow the Company

                                      -7-
<PAGE>

to continue to use the $1,500,000  overformula  through  October 29, 1999.  The
above calculated  revolving line  of credit  provided  for a  borrowing base of
$6,680,065 at September 30, 1999. On August 31, 1999,  the Company  amended the
Credit  Agreement  to provide for a  revolving  line of credit with an interest
rate of prime (8.25% on September 30, 1999) plus 1%.  Borrowings under the line
of credit are secured by the Company's assets.  Total amounts outstanding under
the revolving line of credit at September 30, 1999 were $7,025,793. The Company
had no available borrowings under the line of credit at September 30, 1999.

The  Credit  Agreement  also  provides  for a term  loan for  borrowings  up to
$1,500,000  for a period of five years from the date of funding.  This facility
is to be used for general corporate  purposes.  On August 31, 1999, the Company
amended the Credit  Agreement to provide for a term loan with an interest  rate
of prime (8.25% on September 30, 1999) plus 1.25% and is secured by the  assets
of the  Company.  At September 30,  1999,  $ 464,844  had been  drawn  down and
was  outstanding  under  this facility.   The Company had  available borrowings
under  this  facility  of $1,035,156 at September 30, 1999.

The Credit Agreement includes various financial covenants, the more significant
of which are tangible net worth, debt coverage ratio, quick ratio and cash flow
coverage ratio.  The Company was not in compliance with the tangible net worth,
debt coverage  ratio,  quick ratio and cash flow coverage ratio covenants as of
September 30, 1999. The Company has classified  all amounts  outstanding  under
the Credit Agreement as a current liability due to the Company's non-compliance
with its debt covenants.

As stated in its  announcement  of October  14,  1999,  the  Company is working
diligently with its bank to remedy this situation. The Company has been working
closely with its major trade suppliers  through Motor Equipment  Manufacturers'
Association  (MEMA)  and  Comerica  Bank-California  ("the  Bank")  in order to
formulate a plan for reduction of the Company's  indebtedness  to the Bank. The
proposed plan includes  converting certain existing current accounts payable to
a long term note with  principal  repayments to begin after the first  quarter,
2000.  The proposed  plan also calls for extended  payment  terms on new orders
placed with the Company's largest trade suppliers.

The additional  cash flow expected to be generated as a result of this proposed
plan  will  be  used  to  reduce  the   Company's   indebtedness   to  Comerica
Bank-California,  in exchange for which the Bank has been requested to forebear
from taking any action on these defaults.  Details of the plan are still  being
negotiated  between the Company,  the Bank, and MEMA.

(NOTE D)  INCOME TAXES:

During the  three months  ended  September 30, 1999,  the  Company  recorded  a
valuation  allowance of   $ 2,388,375 to reduce the Company's net deferred  tax
asset to its estimated net realizable value.

                                      -8-
<PAGE>


(NOTE E)  STOCKHOLDERS' EQUITY AND STOCK OPTIONS:

The Company  adopted a stock option plan in January 1996 which provides for the
issuance of options to  employees,  officers  and  directors  of the Company to
purchase up to an aggregate of 400,000  shares of common  stock.  In 1997,  the
plan was amended to increase the number of shares of common stock that could be
purchased to an  aggregate of 600,000  shares.  In February  1998,  the Company
granted stock options for 70,000 shares at an exercise price of $9.50, the fair
market value as of the date of the grant,  to the officers.  In July 1998,  the
Company  granted stock options for 4,000 shares at an exercise price of $9.625,
the fair market value as of the date of the grant, to employees. In March 1999,
the Company  granted stock  options for 70,000  shares at an exercise  price of
$2.75, the fair market value as of the date of the grant, to management. During
1998,  29,600  options were exercised for total proceeds of $167,400 and 10,000
options were canceled upon  termination  of employment by one employee.  During
1999,   162,000  options  were  canceled  upon  termination  of  employment  by
employees. No options were exercised during the nine months of 1999.

Under the  Company's  1996  Incentive  Stock Plan, in  June,  1998 the  Company
granted stock options for  25,000 shares  with an  exercise price of  $7.75, to
consultants for services rendered.

The Company also adopted a directors'  plan in January 1996 which  provides for
the  issuance of options to outside  directors of the Company to purchase up to
an aggregate of 50,000 shares of common  stock.  No options have been issued or
exercised to outside directors since 1998.

During 1996, the Company issued  100,000  warrants to purchase  common stock to
the  Company's  underwriters  on completion  of the  Company's  initial  public
offering.  These  warrants  have exercise  prices of $7.05 per share,  the then
estimated fair market value,  vesting over one year,  with a five-year term. No
warrants have been issued or exercised since 1998.

                                      -9-
<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 2.                MANAGEMENT'S DISCUSSION AND ANALYSIS
                              OR PLAN OF OPERATION

The following  discussion and analysis  should be read in conjunction  with the
condensed financial statements and notes thereto appearing elsewhere herein.

RESULTS OF OPERATIONS:

Net sales for the nine  months  and  three  months  ended  September  30,  1999
decreased  $3,081,550 or 10.1% and 2,666,357 or 24.7%,  respectively,  over the
comparable periods a year earlier. For such nine month periods the decrease was
from  $30,617,667 to $27,536,117  and for such three month periods the decrease
was from  $10,807,015 to $8,140,658.  The decreases in sales were primarily the
result of decreased  sales volume to a major  national customer.

Cost of goods  sold for the nine and three  months  ended  September  30,  1999
decreased $1,013,862 or 4.1% and decreased  $1,368,987 or 15.9%,  respectively,
over the  comparable  periods a year  earlier.  For such nine month periods the
decrease was from  $24,440,356 to $23,426,494  and for such three month periods
the decrease was from $8,622,708 to $7,253,721.  The decreases in cost of goods
were attributable to decreased sales. Cost of goods sold as a percentage of net
sales  increased  over the nine month periods from 79.8% to 85.1% and increased
over the three  months  periods from 79.8% to 89.1%.  The  increases in cost of
goods  sold as a  percentage  of net sales are  attributable  to the  increased
warranty  returns and costs per engine.  Notwithstanding  the decline in sales,
warranty  expenses  increased  $166,590 and $1,863 for the nine and three month
periods ended September 30, 1999 over the comparable periods a year earlier.

Selling,  general and administrative  expenses consist primarily of management,
clerical  and   administrative   salaries  and  costs  of  additional   outside
salespersons,   professional  services  and  freight.   Selling,   general  and
administrative  expenses for the nine and three months ended September 30, 1999
decreased  $30,806 or 0.7% and decreased  $128,088 or 9.6% over the  comparable
periods a year  earlier.  Selling,  general  and  administrative  expenses as a
percentage of sales increased from 13.7% to 15.2% for the comparable nine month
periods and increased from 12.4% to 14.8% for  comparable  three month periods.
The decreases in selling,  general and  administrative  expenses were primarily
attributable  to reduced  freight cost during the recent  periods in connection
with the decreased level of sales.

Earnings  from  operations  for the nine and three months ended  September  30,
1998 were $1,974,022 and $847,519,respectively,  and the loss  from  operations
for the nine  and  three  months  ended  Sepetmber 30, 1999  were $(62,860) and
$(321,763).

                                     -10-
<PAGE>

Interest  expense  for the nine and  three  months  ended  September  30,  1999
increased $177,265 and $97,168, respectively, over the comparable period a year
earlier. The increase was primarily attributable to increased borrowings.

During the  three  months  ended September  30,  1999,  the  Company recorded a
valuation  allowance of $2,388,375  to reduce  the  Company's net  deferred tax
asset to its estimated net realizable value.  After tax earnings  for the  nine
and three  months ended  September  30, 1998  were  $1,082,739  and   $478,203,
respectively, and after tax loss for the nine and three months ended  September
30, 1999 were $2,605,037 and 2,560,906, respectively.

LIQUIDITY AND CAPITAL RESOURCES:

The Company's  operations have been financed  principally by borrowings under a
bank credit facility and cash flows from operations. At September 30, 1999, the
Company's working capital was $2,411,761.

Net  cash  provided  by operating  activities  during  the  nine  months  ended
September 30, 1999 of $380,883 was primarily due to reduction in prepaid income
taxes.

Net cash used in investing  activities for the nine months ended  September 30,
1999 of  $5,101,614  was  primarily to invest the proceeds from the issuance of
the Bond and to purchase new equipment during the period.

Net cash provided by financing  activities  for the nine months ended September
30, 1999 of $4,652,654 was primarily from the issuance of the Bond  during  the
period.

The Company's  accounts  receivable as of  September  30, 1999 was  $3,766,402.
This  represents a decrease of $ 152,097 or  3.9% over accounts  receivable  on
December 31, 1998, and is due to decreased sales.

The  Company's  inventory  as of  September  30,  1999  was  $10,323,319  which
represents  a increase of $417,333 or 4.2% over  inventory  as of December  31,
1998.  The  increase is  primarily  attributable  to the  Company's  increasing
finished goods inventory at all distribution centers.

We are  currently in  violation  of our working  capital line of credit and are
working  with the lender and our trade  suppliers  to develop a plan to provide
the Company with working capital to continue to fund the Company's  operations.
See Note (C) to the condensed financial  statements.  If we are unable to reach
an  agreement  with  the  bank and or  trade  suppliers  on a plan,  we will be
required to seek additional financing alternatives.  If we are unable to obtain
the necessary  additional  financing,  our business,  financial,  and operating
results may be materially adversely affected.

                                     -11-
<PAGE>

YEAR 2000

Many computer systems experience  problems handling dates beyond the year 1999.
Therefore,  some computer  hardware and software will need to be modified prior
to the year 2000 in order to remain  functional.  The Company has  assessed the
internal readiness of its computer systems for handling the year 2000  and  has
sucessfully implemented  the system  programming changes  necessary to  address
year 2000 issues.

Review of the Company's hardware and software is complete. The Company retained
the services of an outside  consultant  to examine,  modify  and/or  update all
hardware and software. The Company has completed on site testing of all systems
in June, 1999, and found that mission  critical  systems  continued to function
normally when the system's calendar was changed to January, 2000.

The Company has initiated  communications with all of its key business partners
to determine their extent and plans for Year 2000  compliance.  This process is
ongoing and is expected to continue throughout 1999.

Where  needed,  the  Company  will  establish  contingency  plans  based on the
Company's actual testing  experience and assessment of outside risks.  However,
to the extent outside support systems, such as suppliers,  may not be Year 2000
compliant by the end of 1999, such noncompliance  could result in circumstances
which could have a material adverse effect on the Company's business, financial
condition, and operating results.

                                     -12-
<PAGE>

                          PART II - OTHER INFORMATION



Item 6. Exhibits and Reports on Form 8-K

     (a)   Exhibits:
             None

     (b)   Reports on Form 8-K
             None

                                     -13-

<PAGE>

                                   SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the
registrants  caused this report to be signed on its behalf by the  undersigned,
thereunder duly authorized.


                                             Bonded Motors, Inc.




Dated: November 15, 1999                     By:/S/PAUL SULLIVAN
                                             Paul Sullivan
                                             Chief Financial Officer
                                     -14-

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