<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 JUNE 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 July 29, 1999.

<PAGE>





                              BONDED MOTORS, INC.

                                     INDEX

Part I - Financial Information                                           Page

         Item 1.  Financial Statements

         Condensed Balance Sheet as of June 30, 1999                       3

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

         Condensed Statements of Cash Flows for the six month periods
                  ended June 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 4.  Submission of Matters to a Vote of Security Holders      13

         Item 6.  Exhibits and Reports                                     13

         Signature                                                         14

                                      -2-

<PAGE>

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

                                     Assets
Current assets:
     Cash                                                         $    342,631
     Trade accounts receivable (less allowance for doubtful
        accounts of $408,597)                                        3,423,289
     Inventories:
        Parts                                                        2,229,699
        Work in process                                              1,242,102
        Finished goods                                               6,090,613
                                                                 -------------
                                                                     9,562,414
                                                                 -------------

     Deferred tax assets                                               715,478
     Prepaid expenses and other current assets                         381,947
     Prepaid income taxes                                               13,216
                                                                 -------------
        Total current assets                                        14,438,975
                                                                 -------------

Restricted investment, IDB (note B)                                  5,200,520
Property and equipment, at cost:
     Machinery and equipment                                         3,730,200
     Furniture and fixtures                                            648,377
                                                                --------------
                                                                     4,378,577
     Less accumulated depreciation                                   1,765,537
                                                                --------------
        Net property and equipment                                   2,613,040
                                                                --------------

Goodwill, less accumulated amortization of $ 39,727                    172,151
Cost of issuance, IDB (note B)                                         251,226
Deferred tax assets                                                  1,672,897
                                                                 -------------
                                                                  $ 24,348,809
                                                                 =============

                      Liabilities and Shareholders' Equity
Current liabilities:
     Current installments of notes payable to bank (note C)       $    447,248
     Short-term debt (note C)                                        5,683,447
     Accounts payable                                                3,479,103
     Accrued expenses                                                  596,530
     Accrued warranty obligations                                      861,087
     Current installments of capital lease obligations                   9,160
                                                                 -------------
        Total current liabilities                                   11,076,575
                                                                 -------------

Notes payable to bank, excluding current installments (note C)         715,608
IDB obligation (note B)                                              5,130,000
Capital lease obligations, excluding current installments               10,566

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 earnings                                               2,371,341
     Notes receivable from exercise of stock options                  (100,000)
                                                                 -------------
        Total shareholders' equity                                   7,416,060
                                                                 -------------
                                                                  $ 24,348,809
                                                                 =============
See accompanying notes to financial statements.


                                      -3-

<PAGE>
<TABLE>
<CAPTION>


                                            BONDED MOTORS, INC.

                                       Condensed Statement of Operations

                                                (Unaudited)


                                                  For the Three Months Ended      For the Six Months Ended
                                                             June 30                       June 30
                                                  ---------------------------    ---------------------------
                                                     1999           1998              1999           1998
                                                     ----           ----              ----           ----

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

Net sales                                         $ 9,628,485    11,302,610     $19,395,459      19,810,652
Cost of sales                                       7,627,690     8,833,411      16,172,773      15,817,648
                                                  -----------   -----------     -----------     -----------
     Gross profit                                   2,000,795     2,469,199       3,222,686       3,993,004


Selling, general and administrative expenses        1,495,017     1,783,905       2,963,783       2,866,501
                                                  -----------    -----------    -----------     -----------
     Earnings from operations                         505,778       685,294         258,903       1,126,503


Other (expense) income:
     Interest expense                                (171,080)     (145,255)       (335,776)       (255,679)
     Interest income                                    7,929         2,086          10,008           4,171
     Other                                               -             -               -             (1,896)
                                                  -----------    ----------     -----------     -----------
     Earnings (loss) before income taxes              342,627       542,125         (66,865)        873,099


Income tax benefit (expense)                         (116,493)     (143,283)         22,734        (268,563)
                                                  -----------    ----------     -----------     -----------
     Net earnings (loss)                           $  226,134       398,842     $   (44,131)        604,536
                                                  ===========    ==========     ===========     ===========

Basic earnings (loss) per share                    $     0.07          0.13     $     (0.01)           0.20

Diluted earnings (loss) per share                        0.07          0.13           (0.01)           0.19

                                                  ===========    ==========     ===========     ===========
Weighted average common shares outstanding - basic  3,067,000     3,053,000       3,067,000       3,040,000
                                                  ===========    ==========     ===========     ===========
Weighted average common and common equivalent
  shares outstanding - diluted                      3,067,000     3,187,000       3,067,000       3,181,000
                                                  ===========     ==========    ===========     ===========

</TABLE>


See accompanying notes to financial statements.

                                                       -4-

<PAGE>
<TABLE>
<CAPTION>


                               BONDED MOTORS, INC.

          Condensed Statements of Cash Flows for the Six Months Ended June 30

                                   (Unaudited)



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

Cash flows from operating activities:

     Net earnings (loss)                                                 $  (44,131)          604,536
                                                                         -----------       -----------
     Adjustments to reconcile net earnings (loss) to net cash provided by
         operating activities:
           Depreciation and amortization                                    193,836           141,074
           Expense on grant of options                                         -               99,000
           Loss on sale of property and equipment                              -                1,896
           (Increase) decrease in assets:
                Accounts receivable                                         495,210        (1,939,431)
                Inventories                                                 343,572        (1,181,746)
                Prepaid expenses and other assets                            69,664          (446,768)
                Deferred tax assets                                         (22,735)         (192,145)
                Prepaid income taxes                                        541,216           152,658

           Increase (decrease) in liabilities:
                Accounts payable                                            300,127         1,494,995
                Accrued expenses                                             93,076           218,834
                Accrued warranty obligations                               (162,137)          154,000
                                                                         -----------       -----------
                         Net cash provided by operating activities        1,807,698          (893,097)
                                                                         -----------       -----------
Cash flows from investing activities:

     Purchases of equipment                                                (453,929)         (586,693)
     Proceeds from sale of equipment                                           -                  500
     Restricted investment, IDB                                          (5,200,520)             -
                                                                         -----------       -----------
                         Net cash used in investing activities           (5,654,449)         (586,193)
                                                                         -----------       -----------
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                               -               98,750
     Borrowings from bank                                                11,426,704        10,463,315
     Repayments of bank borrowings                                      (12,288,260)       (9,222,767)
     Repayment of notes payable to related parties                             -             (100,000)
     Payment of capital lease obligations                                    (6,081)             -
                                                                         -----------       -----------
                         Net cash provided by financing activities        4,011,137         1,239,298
                                                                         -----------       -----------
                         Net increase (decrease) in cash                    164,386          (239,992)

Cash at beginning of period                                                 178,245           297,043
                                                                         -----------       -----------
Cash at end of period                                                    $  342,631            57,051
                                                                         ===========       ===========

Supplemental disclosure of cash flow information:

     Cash paid for:
         Interest                                                        $  335,776           255,679
         Income taxes                                                         3,700           308,050
                                                                         ===========       ===========

</TABLE>


See accompanying notes to 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  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 six and  three  month  periods  ended  June  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
$6,728,863  and  $5,318,434  during the six months ended June 30, 1999 and 1998
respectively,  and $3,254,437 and $3,406,412 during the three months ended June
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 per Share

The weighted average common shares  outstanding for the six month periods ended
June 30, 1999 and 1998 were 3,067,000 and 3,040,000, respectively. For purposes
of diluted earnings per share, the incremental  common equivalent shares due to

                                      -6-

<PAGE>

outstanding  stock options and warrants  during the six month period ended June
30, 1998 was 141,000.  There were incremental common equivalent shares of 5,000
at June 30, 1999 due to  outstanding  stock  options and  warrants.  These were
excluded from the diluted calculation in 1999 due to their antidilutive effect.
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  currenly 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 the  comparable  bonds priced or traded under then
prevailing  market  conditions  (3.45% on June 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 June 30, 1999 the Company had not drawn down any amounts from the investment
account.  However the Company  has the  ability to submit  qualified  invoices,
dated up to six months prior to the issuance of the Bonds, for funding.

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 will be 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 based on a formula equal to the lesser of either  $10,000,000 or the
sum of (a) fifty-five (55%) of the aggregate  outstanding  principal balance of
eligible  receivables;  (b) the lesser of  $5,000,000 or  thirty-five  (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

                                      -7-
<PAGE>


31, 1999 through May 1, 2000.  Borrowings  under the Agreement bear interest at
prime plus 0.5% or LIBOR plus 2.5% through  September  29, 1999,  at prime plus
0.25% or LIBOR plus 2.25% through  December 30, 1999 and at prime or LIBOR plus
2% from December 31, 1999.  Borrowings  under the line of credit are secured by
the Company's  assets.  Total amounts  outstanding  under the revolving line of
credit at June 30, 1999 were $5,683,447.  The Company had available  borrowings
under the line of credit of $903,681 at June 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.  New advances  under the credit
agreement  shall bear  interest at prime plus 0.75% or LIBOR plus 2.75% through
September 29, 1999, at prime plus 0.5% or LIBOR plus 2.50% through December 30,
1999 and at prime plus 0.25% or LIBOR plus 2.25 % from  December  31,  1999 and
are secured by the assets of the Company. At June 30, 1999, $1,162,856 had been
drawn down and was outstanding  under this facility.  The Company had available
borrowings under this facility of $337,144 at June 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,
quick ratio and cash flow  coverage  ratio  covenants as of June 30, 1999.  The
Company has obtained a waiver of the covenants at June 30, 1999.

(NOTE D)  Income Taxes:

Income taxes for the interim periods were computed using the effective tax rate
estimated  to be  applicable  for the full  fiscal  year,  which is  subject to
ongoing review and evaluation by management.

(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 of  employees.
During 1999,  162,000  options were canceled upon  termination of employment by
employees. No options were exercised during the six months of 1999.

                                      -8-
<PAGE>

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  were  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 were 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
financial statements and notes thereto appearing elsewhere herein.

RESULTS OF OPERATIONS:

Net sales for the six months and three  months  ended June 30,  1999  decreased
$415,193 or 2.1% and  1,674,125  or 14.8%,  respectively,  over the  comparable
periods  a year  earlier.  For such six month  periods  the  decrease  was from
$19,810,652  to  $19,395,459  and for such three month periods the decrease was
from $11,302,610 to $9,628,485.  The decrease in sales was primarily the result
of  decreased  sales  volume  to  existing  national   automobile  chain  store
customers.

Cost of goods sold for the six and three months  ended June 30, 1999  increased
$355,125 or 2.2% and  decreased  $1,205,721  or 13.6%,  respectively,  over the
comparable periods a year earlier.  For such six month periods the increase was
from  $15,817,648 to $16,172,773  and for such three month periods the decrease
was from  $8,833,411 to $7,627,690.  The increase in cost of goods sold for the
six month periods was primarily  attributable to manufacturing costs associated
with the expansion of the Company's production capacity, higher than historical
return rates,  increased  warranty  costs per engine sold,  increased  warranty
experience  rate,  and  increased  inbound  freight  costs due primarily to the
return activity.  The decrease in cost of goods for the three month periods was
attributable  to decreased  sales.  Cost of goods sold as a  percentage  of net
sales  increased  over the six month  periods from 79.8% to 83.4% and increased
over the three months periods from 78.2% to 79.2%.

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 six and  three  months  ended  June 30,  1999
increased  $97,282 or 3.4% and decreased  $288,888 or 16.2% over the comparable
periods a year  earlier.  Selling,  general  and  administrative  expenses as a
percentage of sales  increased from 14.5% to 15.3% for the comparable six month
periods and decreased  from 15.8% to 15.5% for comparable  three  periods.  The
increase in  selling,  general and  administrative  expenses  for the six month
periods was primarily  attributable  to the addition of new sales personnel and
increased outbound freight costs associated with return activity.  The decrease
in selling, general and administrative expenses for the three month periods was
attributable  to reduced  freight cost during the recent  periods in connection
with decreased level of sales and the recognition of $99,000 of expense in 1998
for options  granted to consultants as compensation  for services  rendered for
the three months ended June 30, 1998.

                                     -10-
<PAGE>

Earnings  from  operations  for the six and three  months  ended June 30,  1999
decreased $867,600 and decreased  $179,516,  respectively,  over the comparable
period a year earlier.

Interest  expense for the six and three  months  ended June 30, 1999  increased
$80,097 and $25,825,  respectively,  over the comparable period a year earlier.
The increase was primarily attributable to increased borrowings.

Pre-tax  income  for the six and three  months  ended June 30,  1999  decreased
$939,964 for the six month periods and  decreased  $199,498 for the three month
periods  from  the  comparable  quarter  a year  earlier.  After  tax  earnings
decreased  $648,667 for the six month periods and decreased  $172,708 for three
month period from a year earlier, due to the items mentioned above.

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 June 30,  1999,  the
Company's working capital was $3,362,400.

Net cash provided by operating  activities during the six months ended June 30,
1999 of $1,807,698  was primarily due to a decrease in accounts  receivable and
inventory.

Net cash used in investing activities for the six months ended June 30, 1999 of
$5,654,449  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 six months ended June 30,
1999 of 4,011,137 was primarily from net borrowings  from the bank and from the
issuance of the Bond during the period.

The  Company's  accounts  receivable as of June 30, 1999 was  $3,423,289.  This
represents a decrease of $495,210 or 12.6% over accounts receivable on December
31, 1998, and is due to more prompt payment from customers.

The Company's  inventory as of June 30, 1999 was $9,562,414  which represents a
decrease of $343,572  or 3.5% over  inventory  as of  December  31,  1998.  The
decrease is  primarily  attributable  to the  Company's  planned  reduction  in
finished goods inventory.

The  Company  believes  that  internally  generated  funds  and  the  available
borrowings  under  its  existing  credit  facilities  will  provide  sufficient
liquidity  and enable it to meet its current and  foreseeable  working  capital
requirements.

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

                                     -11-
<PAGE>


to the year 2000 in order to remain  functional.  The Company is assessing  the
internal  readiness  of its computer  systems for  handling the year 2000.  The
Company  expects to  implement  successfully  the systems  programming  changes
necessary to address  year 2000  issues,  and does not believe that the cost of
such actions will have a material effect on the Company's results of operations
or financial condition. There can be no assurance, however, that there will not
be delay in, or increased  costs  associated  with the  implementation  of such
changes,  and the  inability  to implement  such changes  could have an adverse
effect on future results of operations.

Review of the  Company's  hardware  and  software is  ongoing.  The Company has
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 4. Submission of Matters to a Vote of Security Holders

     (a) The Company's annual meeting of stockholders was held on May 10, 1999.

     (b) The directors elected at the meeting were:

                                            For        Against     Abstain

         Aaron Landon                     2,326,482         -        17,482
         William Robinson                 2,326,502         -        17,462
         Cornelius P. McCarthy III        2,326,502         -        17,462
         John F. Creamer                  2,326,502         -        17,462
         Robert L. Green                  2,326,502         -        17,462


     (c) Other matters voted upon at the meeting and the results of those voted
         were as follows:

                                            For          Against     Abstain

         Ratification of Appointment of   2,339,664        3,700        600
         Independent Auditors

The foregoing  matters are described in detail in the Company's proxy statement
dated April 10, 1999 for the 1999 Annual Meeting of Stockholders.



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: July 29, 1999                      By:/S/PAUL SULLIVAN
                                             Paul Sullivan
                                             Chief Financial Officer
                                     -14-

<PAGE>