<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

[X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934

        For the quarterly period ended March 31, 1999

[ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1937

        For the transition period from _______________ to _______________


                        Commission file number: 000-22273

                           SONIC JET PERFORMANCE, INC.
        (Exact Name of Small Business Issuer as Specified in Its Charter)

        COLORADO                                         84-1383888
(State of Incorporation)                    (I.R.S. Employer Identification No.)


                               15662 COMMERCE LANE
                       HUNTINGTON BEACH, CALIFORNIA 92649
                    (Address of Principal Executive Offices)

                                 (714) 895-0944
                (Issuer's Telephone Number, Including Area Code)

                                 NOT APPLICABLE
     (Former Name, Former Address and Former fiscal Year, if Changed Since
                                  Last Report)

Check whether the issuer: (1) has filed all reports required to be filed by
Section 13 or 15(d) of the 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  [ ]


As of May 10, 1999, the Issuer had 12,620,000 shares of Common Stock,no par
value, outstanding.


<PAGE>   2
                           SONIC JET PERFORMANCE, INC.
                                   FORM 10-QSB
                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999

                                Table of Contents


<TABLE>
<CAPTION>
                                                                                           Page
                                                                                           ----
<S>                                                                                        <C>

                          PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

         Balance Sheet at March 31, 1999 (unaudited)

         Statements of Operations for the three months
         ended March 31, 1999 and 1998 (unaudited)

         Statements of Cash Flows for the three months
         ended March 31, 1999 and 1998 (unaudited)

         Notes to Consolidated Financial Statements (unaudited)

Item 2.  Management's Discussion and Analysis or Plan of Operations

         General

         Results of Operations

         Liquidity and Capital Resources

                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

Item 2.  Changes in Securities

Item 3.  Defaults upon Senior Securities

Item 4.  Submission of Matters to a Vote of Security Holders

Item 5.  Other Information

Item 6.  Exhibits and Reports on Form 8-K

Signature

Exhibit Index
</TABLE>


                                       1
<PAGE>   3
                                    SONIC JET PERFORMANCE, INC. AND SUBSIDIARIES
                                                      CONSOLIDATED BALANCE SHEET
                                                      MARCH 31, 1999 (UNAUDITED)

--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                     ASSETS

<S>                                                                     <C>
CURRENT ASSETS
     Cash                                                               $   145,185
     Accounts receivable - trade                                             86,297
     Inventories                                                          2,748,434
     Due from related parties                                               398,922
     Prepaid inventories                                                    202,514
     Other receivables                                                       48,128
     Other current assets                                                     6,070
                                                                        -----------

         Total current assets                                             3,635,550

PROPERTY AND EQUIPMENT, net                                               3,210,698

OTHER ASSETS
     Organization cost, net                                                  25,000
     Other                                                                   28,042
                                                                        -----------
                  TOTAL ASSETS                                          $ 6,899,290
                                                                        ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
     Accounts payable                                                   $   272,622
     Other accrued liabilities                                               23,543
     Loans payable - bank                                                   500,000
                                                                        -----------

         Total current liabilities                                          796,165

NOTE PAYABLE - STOCKHOLDER                                                  600,000
ACCRUED INTEREST PAYABLE                                                    103,872
                                                                        -----------
              Total liabilities                                           1,500,037

MINORITY INTEREST                                                           679,510

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
     Preferred stock, no par value
         10,000,000 shares authorized
         Series A Convertible Preferred stock
         1,600 shares issued and outstanding                              1,500,000
     Common stock, no par value
         100,000,000 shares authorized
         12,620,000 shares issued and outstanding                         3,599,694
     Accumulated comprehensive income                                       (10,157)
     Accumulated deficit                                                   (369,794)
                                                                        -----------

              Total stockholders' equity                                  4,719,743
                                                                        -----------
                  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY            $ 6,899,290
                                                                        ===========
</TABLE>


   The accompanying notes are an integral part of these financial statements.



                                       2
<PAGE>   4
                                    SONIC JET PERFORMANCE, INC. AND SUBSIDIARIES
                                           CONSOLIDATED STATEMENTS OF OPERATIONS
                                            FOR THE THREE MONTHS ENDED MARCH 31,

--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                                          1999                     1998
                                                       (unaudited)              (unaudited)
                                                      ------------             ------------
<S>                                                   <C>                      <C>
SALES                                                 $    569,700             $     76,065

COST OF SALES                                              272,114                   23,268
                                                      ------------             ------------

GROSS PROFIT                                               297,586                   52,797

GENERAL AND ADMINISTRATIVE EXPENSES                        180,942                  187,820
                                                      ------------             ------------

INCOME (LOSS) FROM OPERATIONS                              116,644                 (135,023)
                                                      ------------             ------------

OTHER INCOME (EXPENSE)
     Other income                                               --                    4,897
     Other expense                                         (15,000)                  (6,000)
     Interest income                                           893                       --
                                                      ------------             ------------

         Total other income (expense)                      (14,107)                  (1,103)
                                                      ------------             ------------

INCOME (LOSS) BEFORE MINORITY INTEREST                     102,537                 (136,126)

MINORITY INTEREST                                              760                    6,298
                                                      ------------             ------------

NET INCOME (LOSS) $                                        103,297             $   (129,828)
                                                      ============             ============

BASIC EARNINGS (LOSS) PER SHARE                       $       0.01             $      (0.13)
                                                      ============             ============

DILUTED EARNINGS (LOSS) PER SHARE                     $       0.01             $      (0.13)
                                                      ============             ============

WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING
     BASIC                                              12,620,000               10,000,000
                                                      ============             ============

     FULLY DILUTED                                      13,420,000               10,000,000
                                                      ============             ============
</TABLE>


   The accompanying notes are an integral part of these financial statements.



                                       3
<PAGE>   5
                                    SONIC JET PERFORMANCE, INC. AND SUBSIDIARIES
                                  CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                        FOR THE THREE MONTHS ENDED DECEMBER 31, 1999 (UNAUDITED)

--------------------------------------------------------------------------------


<TABLE>
<CAPTION>

                                                                                         Accumulated
                                              Preferred Stock         Common Stock         Compre-
                                          ----------------------  ----------------------   hensive     Accumulated
                                            Shares      Amount      Shares      Amount      Income       Deficit      Total
                                          ----------  ----------  ----------  ---------- -----------   -----------  ----------
<S>                                       <C>         <C>         <C>         <C>         <C>          <C>          <C>
BALANCE, DECEMBER 31, 1998                     1,600  $1,500,000  12,620,000  $3,599,694  $  (10,157)  $ (473,091)  $4,616,446

NET INCOME (unaudited)                                                                                    103,297      103,297
                                          ----------  ----------  ----------  ----------  ----------   ----------   ----------

     BALANCE, MARCH 31, 1999 (UNAUDITED)       1,600  $1,500,000  12,620,000  $3,599,694  $  (10,157)  $ (369,794)  $4,719,743
                                          ==========  ==========  ==========  ==========  ==========   ==========   ==========
</TABLE>


   The accompanying notes are an integral part of these financial statements.



                                       4
<PAGE>   6
                                    SONIC JET PERFORMANCE, INC. AND SUBSIDIARIES
                                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                                            FOR THE THREE MONTHS ENDED MARCH 31,

--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                                                          1999                1998
                                                                      ------------        ------------
<S>                                                                   <C>                 <C>
                                                                       (unaudited)         (unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
   Net income (loss)                                                  $    103,297        $   (129,828)
   Adjustments to reconcile net income (loss) to net cash
     provided by (used in) operating activities
       Depreciation and amortization                                        13,699                  --
       Minority interest                                                    (1,396)             (6,573)
       Common stock issued for services
   (Increase) decrease in
     Inventories                                                          (280,848)           (131,565)
     Due from related parties                                               73,614             (15,316)
     Accounts receivable                                                   (47,344)             58,817
     Other receivables                                                     (14,714)              8,413
     Other current assets                                                    8,607               1,200
   Increase (decrease) in
     Accounts payable                                                      142,168             (77,779)
     Accrued payroll taxes                                                  (9,627)              2,020
     Other accrued liabilities                                              19,543             (65,568)
     Due to related parties                                                (20,589)                 --
     Accrued interest payable                                               15,000                  --
     Accrued income tax                                                         --                 800
     Other long-term accrued liabilities                                        --              73,500
                                                                      ------------        ------------

         Net cash provided by (used in) operating activities                 1,410            (281,879)
                                                                      ------------        ------------

CASH FLOWS FROM INVESTING ACTIVITIES
   Purchase of property and equipment                                     (502,277)                 --
   Proceeds from the sale of property and equipment                             --               6,615
   Purchase of other assets                                                     --             (65,746)
   Proceeds from the sale of other assets                                   12,917                  --
                                                                      ------------        ------------

         Net cash used in investing activities                            (489,360)            (59,131)
                                                                      ------------        ------------

CASH FLOWS FROM FINANCING ACTIVITIES
   Proceeds from bank loan                                                 500,000                  --
                                                                      ------------        ------------

         Net cash provided by financing activities                         500,000                  --
                                                                      ------------        ------------

           Net increase (decrease) in cash                                  12,050            (341,010)

CASH, BEGINNING OF PERIOD                                                  133,135             729,506
                                                                      ------------        ------------

CASH, END OF PERIOD                                                   $    145,185        $    388,496
                                                                      ============        ============
</TABLE>


   The accompanying notes are an integral part of these financial statements.



                                       5
<PAGE>   7
                                    SONIC JET PERFORMANCE, INC. AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998 (UNAUDITED)

--------------------------------------------------------------------------------


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Nature of Business
         Sonic Jet Performance, Inc. ("SJPI"), a Colorado corporation, and
         subsidiaries (collectively, the "Company") are engaged in the design
         and production of personal watercrafts, jet boats, trailers, and
         accessories. The principal executive office is located in Huntington
         Beach, California.

         Sonic Jet Performance, LLC (the "Predecessor Company") was organized in
         California on May 8, 1997 as a limited liability company.

         In June 1998, Boulder Capital Opportunities III, Inc. ("BCO"), a
         Colorado Corporation organized on November 27, 1996, entered into a
         Share Exchange Agreement with the Predecessor Company to acquire all of
         the assets and business of the Predecessor Company and assume the
         liabilities. The acquisition was consummated and effective as of June
         30, 1998. The transaction was treated as a "purchase transaction" and
         has been accounted as a reverse acquisition of BCO by Sonic Jet
         Performance, LLC, resulting in a recapitalization of Sonic Jet
         Performance, LLC. Subsequently, the name of the new entity became Sonic
         Jet Performance, Inc.

         On August 9, 1997, SJPI entered into a joint venture agreement with
         China Guangxi Nanning Shipyard of Nanning, Guangxi, China to form the
         Nanning Sonic Jet, LLC, a contractual limited liability company
         organized under the laws of the People's Republic of China. The joint
         venture was formed to design, manufacture, and sell a series of
         watercraft jet products internationally and in China. The Company is
         responsible for providing technical personnel and training. The Company
         shall receive 70% of the profits and shall share 70% of the risks and
         losses under the venture.

         Principles of Consolidation
         The consolidated financial statements include the accounts of SJPI and
         its subsidiaries, Nanning Sonic Jet, LLC and Sonic Jet Performance, Inc
         - Florida ("SJPF"), a wholly-owned subsidiary of SJPI. All intercompany
         balances and transactions are eliminated in consolidation. Minority
         interest represents the minority's share of the initial capital
         contribution in Nanning Sonic Jet, LLC and 30% of the results of its
         operations. SJPI manages the day-to-day operations of the subsidiary
         and is represented by three of the five directors of the subsidiary.

         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, as well as the reported amounts of
         revenues and expenses during the reporting period. Actual results could
         differ from those estimates.



                                       6
<PAGE>   8
                                    SONIC JET PERFORMANCE, INC. AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998 (UNAUDITED)

--------------------------------------------------------------------------------


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         Loss per Share
         Loss per share is computed by dividing income available to common
         stockholders by the weighted-average number of common shares
         outstanding. Diluted earnings per share is computed similar to basic
         earnings per share except that the denominator is increased to include
         the number of additional common shares that would have been outstanding
         if the potential common shares had been issued and if the additional
         common shares were dilutive. Potentially dilutive securities included
         in the computation of fully diluted earnings per share for the three
         months ended March 31, 1999 consist of 800,000 shares of common stock
         reserved for conversion of the Series A Preferred Stock. Because the
         Company has incurred net losses, basic and diluted loss per share are
         the same for the three months ended March 31, 1998.


NOTE 2 - INVENTORIES

         Inventories at March 31, 1999 consisted of the following:

<TABLE>
<CAPTION>
                                                                     (unaudited)
                                                                    ------------
<S>                                                                 <C>
         Raw materials and supplies                                 $  1,638,599
         Work in process                                                 521,524
         Finished goods                                                  588,311
                                                                    ------------

             TOTAL                                                  $  2,748,434
                                                                    ============
</TABLE>


NOTE 3 - PROPERTY AND EQUIPMENT

         Property and equipment at March 31, 1999 consisted of the following:

<TABLE>
<CAPTION>
                                                                  (unaudited)
                                                                 ------------
<S>                                                              <C>
         Building and improvements                               $  1,185,175
         Furniture and fixtures                                        18,576
         Machinery and equipment                                      492,784
         Tooling and molds                                            268,452
         Tooling - new products                                       464,936
         Molds - watercrafts                                          878,071
         Vehicles                                                      32,403
         Leasehold improvements                                        11,059
                                                                 ------------
                                                                    3,351,456
         Less accumulated depreciation and amortization               140,758
                                                                 ------------
             TOTAL                                               $  3,210,698
                                                                 ============
</TABLE>


                                       7
<PAGE>   9
                                    SONIC JET PERFORMANCE, INC. AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998 (UNAUDITED)

--------------------------------------------------------------------------------


NOTE 3 - PROPERTY AND EQUIPMENT (CONTINUED)

         Tooling for new product and molds for watercrafts have not been
         depreciated during the three months ended March 31, 1999 as these will
         be used in production in the following year.


NOTE 4 - NOTE PAYABLE - STOCKHOLDER

         Note payable - stockholder at March 31, 1999 consisted of the
         following:

<TABLE>
<CAPTION>
                                                                                             (unaudited)
                                                                                            ------------
<S>                                                                                         <C>
         Notepayable, bearing interest at 10% per annum. Annual
             payments are to commence July 18, 2000 in an amount equal
             to 60% of cash available for distribution, as defined, for
             the nearest preceding accounting period. All unpaid
             principal is due
             July 18, 2001.  The note is secured by Company assets                          $    600,000
                                                                                            ============
</TABLE>


NOTE 5 - LOANS PAYABLE - BANK

         On February 8, 1999, SJPF entered into a $375,000 commercial loan
         agreement with a financial institution. The loan bears interest at 7.5%
         per annum and is payable on demand. The loan is collateralized by
         substantially all of SJPF's tangible property.

         On February 26, 1999, SJPF also entered into a mortgage loan agreement
         in the amount of $125,000. The loan is collateralized by SJPF's land
         and building and a pledge of 15,000 shares of SJPI's common stock. The
         loan bears interest at 8.5% per annum and is due on February 26, 2000.


NOTE 6 - COMMITMENTS AND CONTINGENCIES

         Lease
         The Company leases its facility under an operating lease agreement.
         Future minimum lease payments are as follows:

<TABLE>
<CAPTION>
           Year Ending
           December 31,                                          (unaudited)
           ------------                                         ------------
<S>                                                             <C>
               1999                                             $     60,750
               2000                                                   81,000
               2001                                                   81,000
               2002                                                   81,000
                                                                ------------
                   TOTAL                                        $    303,750
                                                                ============
</TABLE>


                                       8
<PAGE>   10
                                    SONIC JET PERFORMANCE, INC. AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998 (UNAUDITED)

--------------------------------------------------------------------------------


NOTE 6 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

         Lease (Continued)
         Rent expense was $18,350 (unaudited) for the three months ended March
         31, 1999.

         Investment in Joint Venture - Dalian
         The Company has entered into an agreement to invest in a joint venture
         in Dalian, China for the design, manufacture, and selling of watercraft
         jet products. The Company is committed to invest $1,000,000 in the form
         of molds, tooling, and know-how. The Company will share 45% of the
         profits or loss from this venture.

         Employment Agreement
         On June 19, 1998, the Company amended an employment agreement with its
         Design Director and Chairman/Chief Executive Officer of International
         Operations that originated with the Predecessor Company. The agreement
         calls for the Vice President to be paid on a bimonthly basis the
         following annual salary:

<TABLE>
<CAPTION>
                   Year Ending
                  December 31,
                  ------------
<S>                                                                   <C>
                      1999                                            $ 120,000
                      2000                                            $ 140,000
                      2001                                            $ 175,000
                      2002                                            $ 200,000
</TABLE>

         Royalty Agreement
         On August 3, 1998, the Company assumed royalty agreements with its
         Design Director and Chairman/Chief Executive Officer of International
         Operations that originated with the Predecessor Company. The royalty is
         for a maximum amount of 2% of Company sales for a period of five years
         commencing November 18, 1998. Royalty amounts are to be paid on a
         quarterly basis with a minimum royalty of $4,167 per month for the
         twelve-month period commencing January 18, 1999 and increasing to
         $8,333 per month thereafter.


                                       9
<PAGE>   11
                                    SONIC JET PERFORMANCE, INC. AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998 (UNAUDITED)

--------------------------------------------------------------------------------


NOTE 7 - RELATED PARTY TRANSACTIONS

         Included in due from related parties are amounts due from the following
         related parties as of March 31, 1999:

<TABLE>
<CAPTION>
                                                      (unaudited)
                                                     ------------
<S>                                                  <C>
         Dalian Sonic Jet, Ltd.                      $    244,741
         Sonic Marketing International, LLC                35,172
         Sonic Jet International, Inc.                     78,341
         Majed Al Rashid                                   40,512
         Michel Attias                                        156
                                                     ------------
             TOTAL                                   $    398,922
                                                     ============
</TABLE>

         Dalian Sonic Jet, Ltd. is a joint venture partner with SJPI, in which
         SJPI shares 45% of the profit or loss of the joint venture. Sonic
         Marketing International, LLC is owned by a stockholder of the Company.
         It used to market the Company's products and has since ceased doing
         business. Sonic Jet International, Inc. is owned by a stockholder and
         markets the Company's products exclusively. Majed Al Rashid is a
         stockholder of the Company, and Michel Attias is a stockholder of the
         Company.


NOTE 8 - SERIES A CONVERTIBLE PREFERRED STOCK

         On June 17, 1998, the Company issued 1,600 shares of Series A
         Convertible Preferred Stock ("Series A Preferred Stock") for
         $1,500,000, net of a discount of $100,000. The holders of Series A
         Preferred Stock are not entitled to receive dividends. The Series A
         Preferred Stock is convertible to common stock at the option of the
         holders, subject to certain limitations, and is limited to a formula of
         either a fixed conversion price of $4.00 per share or a variable
         conversion price, as defined, not to exceed the fixed conversion price
         or at a price that includes an unpaid premium if the said premium is
         not paid in cash prior to conversion. For conversion purposes, the
         Series A Preferred Stock stockholders are entitled to an 8% premium
         from the day following the date of issuance to the conversion date. If
         the said premium is not paid in cash, the premium is added to the face
         amount of $1,000 per share to determine the number of common shares to
         be received on conversion. A total of 800,000 shares of common stock
         have been reserved for the conversion of the Series A Preferred Stock.

         The Series A Preferred Stock is automatically convertible into common
         stock on the fifth anniversary of the issuance date. If such conversion
         does not take place at maturity, then the holders of the Series A
         Preferred Stock can require the Company to purchase the shares for cash
         at a redemption amount as defined.


                                       10
<PAGE>   12
                           SONIC JET PERFORMANCE, INC.
                                   FORM 10-QSB
                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999


           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

COMPARISON OF THE THREE MONTHS ENDED 3/31/99 VS. THE THREE MONTHS ENDED 3/31/98

        The following table sets forth the Company's consolidated statements of
operations and the percentages that such items bear to net sales:


<TABLE>
<CAPTION>
                                                                 1999                                         1998
                                                                 ----                                         ----
<S>                                              <C>                        <C>              <C>                         <C>
Sales                                            $ 569,700                  100.0%           $  76,065                   100.0%
Cost of Sales                                    $ 272,114                   47.8%           $  23,268                    30.6%
Gross Profit                                     $ 297,586                   52.2%           $  52,797                    69.4%
Selling, general and administrative              $ 180,942                   31.8%           $ 187,820                   246.9%
Gain/(Loss) from Operations                      $ 116,644                   20.5%           $(135,023)                  177.5%
Interest Income                                  $     893                   0.16%           $       0                     0.0%
Interest Expenses                                $  15,000                   2.63%           $   6,000                    7.89%
Other Income                                     $       0                    0.0%           $   4,897                    6.44%
Net Income/(Loss)                                $ 103,297                   18.1%           $(129,828)                  170.7%
</TABLE>


NET SALES

        Net sales for the first quarter of 1999 increased by $493,635 or 649% to
$569,700 compared to $76,065 for the first quarter of 1998. Management
attributes this increase to the sales of parts to Dalian Sonic Jet, a joint
venture partner of Sonic Jet Performance, Inc. ("the Company"). Sales of parts
amounted to $238,000 in the first quarter of 1999 as compared to none in the
first quarter of 1998. Sales of rescue jets increased by $275,234 or 509% from
$54,075 in the first quarter of 1998 to $329,309 in the first quarter of 1999.
Sales of trailers decreased by $2,849 or 100% in the first quarter of 1999.
Sales of Delta Jets also decreased by $15,300 or 100% in the first quarter of
1999.

COST OF SALES

        Cost of Sales for the first quarter of 1999 increased by $248,846 or
1,069% to $272,114 compared to $23,268 for the first quarter of 1998. This is
mainly attributed to the increase of the raw material costs together with
increased labor costs. Further, operations in the first quarter of 1998 were at
an early stage compared to the scale of operations in the first quarter of 1999.

GROSS PROFIT

        Gross profit for the first quarter of 1999 increased by $244,789 or 464%
to $297,586 compared to $52,797 for the first quarter of 1998. Sales in the
first quarter of 1999 included the sales of parts to Dalian Sonic Jet Ltd. The
profit margin on sale of parts is smaller than the profit margin on sales of the
finished goods. Further, the



                                       11
<PAGE>   13
Company is mainly engaged in the production of personal watercraft and jet boats
on which the gross profit margin is higher.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

        Selling, general and administrative expenses for the first quarter of
1999 decreased by $6,878 or 3.7% to $180,942 compared to $187,820 for the first
quarter of 1998.

        Insurance expenses increased by $16,186 or 276% from $5,861 in the first
quarter of 1998 to $22,047 in the first quarter of 1999. This was due to the
increase in workers' compensation expenses resulting from an increased workforce
as compared to the first quarter of 1998. Royalty expenses amounted to $12,500
in the first quarter of 1999 compared to none in the first quarter of 1998. No
royalty was payable in the first quarter of 1998 as there were no sales of
personal watercrafts. Marketing wages for the first quarter of 1999 decreased by
$10,541 or 100% to 0 compared to $10,541 for the first quarter of 1998.
Marketing salaries were paid to the salesmen for their efforts to initiate sales
in the first quarter of 1998. However, the sales were on track in 1999 and
therefore no marketing salaries were incurred in the first quarter of 1999.
Research and development expenses for the first quarter of 1999 decreased by
$61,005 or 100% in the first quarter of 1999 compared to the first quarter of
1998. This was because research and development of products was completed during
the first quarter of 1998. Travel expenses for the first quarter of 1999
decreased by $8,427 or 68% to $2,922 compared to $12,349 for the first quarter
of 1998. Travel expenses were incurred for the Miami Boat show in the first
quarter of 1998 to promote the Company's products. No such extensive promotional
activities took place in the first quarter of 1999.

NET INCOME

        Net income for the first quarter of 1999 was $103,297 as compared to a
loss of ($129,828) for the first quarter of 1998, or an increase of $233,125.
This increase is mainly attributable to increased sales and the fact that
selling, general and administrative expenses were relatively the same for the
two periods, thereby causing such expenses to be amortized over a greater sales
base in the first quarter of 1999 as compared to the first quarter of 1998.

LIQUIDITY AND CAPITAL RESOURCES

        The Company's principal sources of capital have been cash flow from its
operations, the sale of Series A Convertible Preferred Stock and loans on an
as-needed basis.

        On June 17, 1998, the Company issued 1,600 shares of Series A
Convertible Preferred Stock ("Series A Preferred Stock") for $1,500,000, net of
a discount of $100,000. The holders of Series A Preferred Stock are not entitled
to receive dividends. The Series A Preferred Stock is convertible to common
stock at the option


<PAGE>   14
of the holders, subject to certain limitations, and is limited to a formula of
either a fixed conversion price of $4.00 per share or a variable conversion
price, as defined, not to exceed the fixed conversion price or at a price that
includes an unpaid premium if said premium is not paid in cash prior to
conversion. For conversion purposes, the holders of Series A Preferred Stock
stockholders are entitled to an 8% premium from the day following the day of
issuance to the conversion date. If said premium is not paid in cash, the
premium is added to the face amount of $1,000 per share to determine the number
of common shares to be received on conversion. A total of 800,000 shares of
common stock have been reserved for the conversion of the Series A Preferred
Stock.

        The Series A Preferred Stock is automatically convertible into common
stock on the fifth anniversary of the issuance date. If such conversion does not
take place at maturity, then the holders of the Series A Preferred Stock can
require the Company to purchase the shares for cash at a redemption amount as
defined.

        Subsequent to December 31, 1998, Sonic Jet International, Inc., which
currently has exclusive rights to market the Company's products in North and
South America, Europe, some Pacific Rim countries and the Middle East, loaned
the company approximately $400,000. The Company expects to collect on its
receivable from Sonic Jet International, Inc., which stood at $366,123 as of
December 31, 1998, and pay off substantially all of the loan balance or settle
the amount by set-off.

        Based on its current operating plan, the Company anticipates that
additional financing will be required to finance its operations and capital
expenditures. The Company's currently anticipated levels of revenues and cash
flow are subject to many uncertainties and cannot be assured. Further,
unforeseen events may occur causing the Company to raise additional funds. The
amount of funds required by the Company will depend upon many factors, including
without limitation, the extent and timing of sales of the Company's products,
future product costs, the timing and costs associated with the establishment
and/or expansion, as appropriate, of the Company's manufacturing, development,
engineering and customer support capabilities, the timing and cost of the
Company's product development and enhancement activities and the Company's
operating results. Until the Company generates cash flow from operations which
will be sufficient to satisfy its cash requirements, the Company will need to
seek alternative means for financing its operations and capital expenditures
and/or postpone or eliminate certain investments or expenditures. Potential
alternative means for financing may include leasing capital equipment, obtaining
a line of credit, or obtaining additional debt or equity financing. There can be
no assurance that, if and when needed, additional financing will be available,
or available on acceptable terms. The inability to obtain additional financing
or generate sufficient cash from operations could require the Company to reduce
or eliminate expenditures for capital equipment, research and development,
production or marketing of its products, or otherwise curtail or discontinue its
operations, which could have a material adverse effect on the Company's
business, financial condition and results of operations. Furthermore, if the
Company raises funds through the sale of additional equity securities, the
Common Stock currently outstanding may be further diluted.


<PAGE>   15
                           PART II. OTHER INFORMATION


Item 1.      Legal Proceedings.

             None.

Item 2.      Changes in Securities.

             None.

Item 3.      Defaults Upon Senior Securities.

             None.

Item 4.      Submission of Matters to a Vote of Security Holders.

             None.

Item 5.      Other Information.

             None.

Item 6.      Exhibits and Reports on Form 8-K.

             (a) Exhibits:

                  None.

             (b) Reports on Form 8-K.

                  None.



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<PAGE>   16
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.

Date: May 24, 1999                   SONIC JET PERFORMANCE, INC.


                                        By:  /s/ VATCHE KHEDESIAN
                                            ------------------------------------
                                        Name:  Vatche Khedesian
                                        Title: Treasurer



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