Edgar Filing: COACH INDUSTRIES GROUP INC

================================================================================

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-KSB/A

Amendment No. 1

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Year ended December 31, 2003
Commission file number: 0-19471

COACH INDUSTRIES GROUP, INC.

(Exact name of registrant as specified in its charter)

Nevada 91-1942841
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

9600 W. Sample Road, Suite 505, Coral Springs, Florida 33065
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (305) 531-1174
--------------

SearchHound.com, Inc.
12817 Woodson, Overland Park, Kansas 66209
(Former name or former address, if changed since last report)

Copies of all communications, including all communications sent to the agent for
service, should be sent to:

Joseph I. Emas, Attorney at Law

1224 Washington Avenue

Miami Beach, Florida 33139

Telephone: 305.531.1174

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act:

COMMON STOCK, $.001 PAR VALUE
(Title of Class)

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 issuer was required to file such reports, and (2) has
been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of issuer's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year: $1,068,487.

State the aggregate market value of the voting stock held by non-affiliates of
the registrant on March 15, 2004, computed by reference to the price at which
the stock was sold on that date: $9,100,000

APPLICABLE ONLY TO CORPORATE REGISTRANTS

State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.

9,785,531 shares of Common Stock, $.001 par value, as of December 31,
2003.

Transitional Small Business Disclosure Format (check one) Yes [ ] No [X]

DOCUMENTS INCORPORATED BY REFERENCE

None

COACH INDUSTRIES GROUP, INC.
Report on Form 10KSB
For the Fiscal Year Ended December 31, 2003

TABLE OF CONTENTS

PAGE

PART I

Item 1. Description of the Business..................................... 1
Item 2. Description of the Property..................................... 11
Item 3. Legal Proceedings............................................... 11
Item 4. Submission of Matters to Vote of Security Holders............... 12

PART II

Item 5. Market for Common Equity and Related Stockholder Matters........ 13
Item 6. Management's Discussion and Analysis............................ 14
Item 7. Financial Statements............................................ 18
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure........................................ 18

PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons.... 19
Item 10. Executive Compensation.......................................... 21
Item 11. Security Ownership of Certain Beneficial Owners and Management.. 23
Item 12. Certain Relationships and Related Transactions.................. 24

PART IV

Item 13. Exhibits and Reports on Form 8-K................................ 26
Item 14. Principal Accountant Fees and Services.......................... 27

Signatures................................................................ 28

PART I

THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 PROVIDES A "SAFE HARBOR"
FOR FORWARD LOOKING STATEMENTS. This Form 10-KSB contains statements that are
not historical facts. These statements are called "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. These statements involve important known
and unknown risks, uncertainties and other factors and can be identified by
phrases using "estimate," "anticipate," "believe," "project," "expect,"
"intend," "predict," "potential," "future," "may," "should" and similar
expressions or words. Our future results, performance or achievements may differ
materially from the results, performance or achievements discussed in the
forward-looking statements. There are numerous factors that could cause actual
results to differ materially from the results discussed in forward-looking
statements, including:

o Changes in existing product liability, tort or warranty laws or the
introduction of new laws, regulations or policies that could affect our
business practices: these laws, regulations or policies could impact our
industry as a whole, or could impact only those portions in which we are
currently active.

o Changes in environmental regulations: these regulations could have a
negative impact on our earnings; for example, laws mandating greater fuel
efficiency could increase our research and development costs.

o Changes in economic conditions, including changes in interest rates,
financial market performance and our industry: these types of changes can
impact the economy in general, resulting in a downward trend that impacts
not only our business, but all companies with which we compete; or, the
changes can impact only those parts of the economy upon which we rely in a
unique fashion, including, hotels, restaurants and business travel.

o Changes in relationships with major customers and/or suppliers: an adverse
change in our relationships with major customers and/or suppliers would
have a negative impact on our earnings and financial position.

o Armed conflicts and other military actions: the considerable political and
economic uncertainties resulting from these events, could adversely affect
our order intake and sales, particularly in the limousine market.

o Factors that we have discussed in previous public reports and other
documents filed with the Securities and Exchange Commission.

This list provides examples of factors that could affect the results described
by forward-looking statements contained in this Form 10-KSB. However, this list
is not intended to be exhaustive; many other factors could impact our business
and it is impossible to predict with any accuracy which factors could result in
which negative impacts. Although we believe that the forward-looking statements
contained in this Form 10-KSB are reasonable, we cannot provide you with any
guarantee that the anticipated results will be achieved. All forward-looking
statements in this Form 10-KSB are expressly qualified in their entirety by the
cautionary statements contained in this section and you are cautioned not to
place undue reliance on the forward-looking statements contained in this Form
10-KSB. In addition to the risks listed above, other risks may arise in the
future, and we disclaim any obligation to update information contained in any
forward-looking statement.

ITEM 1. DESCRIPTION OF BUSINESS

OVERVIEW

Coach is a holding company which manufactures luxury limousines, specialty
vehicles and limousine buses and sells financial services and products related
to its business through its various operating subsidiaries. We currently have
two subsidiaries. Commercial Transportation Manufacturing Corporation ("CTMC")
focuses on manufacturing specialty vehicles and limousine buses. Springfield
Coach Industries Corporation, Inc. ("SCB"), SCB focuses on manufacturing Lincoln
Town Car limousines and Ford Excursion limousines.

HISTORY

On June 1, 2000, pursuant to an Agreement and Plan of Business Combination,
dated as of April 14, 2000, PAN International Gaming, Inc., a Nevada corporation
("PAN"), purchased all of the issued and outstanding capital stock of
SearchHound.com 2000, Ltd., a Nevada corporation, from their 22 record holders
for an aggregate of 50,373 shares of its common stock, which was approximately
71% of the issued and outstanding shares of PAN International Gaming, Inc. The
amount of consideration paid and received was negotiated by the parties to the
Plan of Business Combination. On June 6, 2000, after the merger, PAN changed its
name to SearchHound.com, Inc. ("Searchhound")

Pursuant to a Stock Purchase Agreement, dated as of May 4, 2000, effective July
11, 2000, Searchhound purchased all of the issued and outstanding capital stock
of SoloSearch.com, Inc., a Missouri corporation ("SoloSearch"), from Cohen
Capital Technologies, L.L.C., a Missouri limited liability company, Kirk C.
Reivich, an individual, and October Capital, L.L.C., a Missouri limited
liability company, for an aggregate of 18,097 shares of common stock and an
aggregate of $300,000 in cash. The foregoing transaction resulted in the
issuance of 20.3% of the issued and outstanding shares of PAN. The amount of
consideration paid and received was negotiated by the parties to the Stock
Purchase Agreement.

Prior to June 1, 2000, SearchHound was not engaged in substantial operating
activities and there were no revenues or business operations. In 2002,
Searchound's Board of Directors changed its strategy due to poor operating
conditions and operating results in its primary businesses coupled with
difficulties in raising capital through debt and equity sources. The Board of
Directors adopted the new strategy during 2002, which committed to the disposal
of all of its current assets and businesses and to seek a merger or acquisition
candidate with better financial resources. By early 2003, the Board of Directors
of Searchhound had successfully disposed of all of the assets and all of the
liabilities of the company.

On August 22, 2003, the Company held its Annual Meeting of Shareholders, whereby
the shareholders voted to amend the Articles of Incorporation to change the name
of the company from Searchound.com to Coach Industries Group, Inc.

GENERAL

Through our subsidiaries, we manufacture luxury limousines, specialty vehicles
and limousine buses . Coach's principal executive offices are located in Coral
Springs, Florida. We are one of seven limousine manufacturers in the limousine
manufacturing industry operating under agreements with Ford Motor Company and
General Motors Corporation. The Company's long-term strategy is to offer and
expand our array of specialty vehicles and limousines and to offer and expand
financial services to existing customers, other limousine operators and others
outside of the limousine business. The Company will actively pursue acquisition
candidates that can support the expansion of these products and financial
services.

On September 1, 2003, we acquired CTMC through a reverse merger. Coach issued 3
million shares of common stock to CTMC in a stock for stock exchange. CTMC's
principal executive offices are located in Bohemia, New York. CTMC's operation
consists of manufacturing, selling and servicing specialty vehicles, limousine
buses and to a lesser extent, Lincoln Town Cars. The operation is housed in a
30,000 square foot manufacturing facility with approximately 27 employees
involved in the direct manufacture of the various modified chassis. CTMC
manufactures its vehicles pursuant to a Quality Vehicle Modifier Agreement with
Ford Motor Company. CTMC's New York presence allows the Company to support the
lucrative Northeastern market.

On December 31, 2003, Coach, through SCB, newly formed wholly owned subsidiary,
acquired certain assets and liabilities from Springfield Coach Builders, Inc.
("Springfield"). The acquisition was valued at $2.66 million based on 2 million
shares of common stock, at $1.33 per share, the closing market price on November
6, 2003. SCB's principal executive offices are located in Springfield, Missouri.

After our acquisition of Springfield, we determined that the production of the
various vehicles previously manufactured by Springfield and CTMC needed to be
segregated to eliminate any duplication of production processes at the CTMC and
SCB facilities. CTMC personnel have extensive depth of knowledge in prototype
development, modification and engineering of specialty vehicles, such as the
Chrysler Sprinter and the General Motors' Hummer H2. Accordingly, since January
2004, SCB manufactures the Lincoln Town Car limousines, which represent
approximately ninety percent (90%) of the limousine market and the Ford
Excursion limousines. CTMC manufactures our specialty vehicles and limousine
buses.

Management believes that the acquisition of Springfield enabled the Company's to
use its existing sales force, engineering expertise and management to enter the
Midwestern and Western United States limousine markets. Coach was able to assume
the existing lease for the manufacturing facility in Springfield, Missouri,
which increased its manufacturing capacity and reduced the cost of distribution
in those markets.

INDUSTRY

The limousine industry consists of the manufacturing of modified chassis, both
through manufacturer supported programs, such as through QVM and CMC agreements,
as well as non-conforming, non-manufacturer supported chassis modifications. The
chassis is purchased from the manufacturer under a manufacturer supported
program and modified based on the specifications provided and monitored by the
manufacturer. The modification manufacturer may provide some changes to the
design and aesthetics of the product, but not the engineering of the product.
The manufacturer closely monitors and reviews the performance of all those
modification manufacturers in their programs. In addition, there are those
vehicles that are not supported by the manufacturer. These vehicles are
manufactured based on the customer specifications or the marketplace. These
vehicles do not receive the same warranty from the manufacturer, thus require
additional support by the modification manufacturer.

Once a vehicle is manufactured and sold, it is typically sold to one of 14,000
limousine operators. These operators utilize these vehicles to provided livery
service to the end user. The livery service provides drivers and short term
rentals for airport shuttle service, weddings, business travel, proms, funerals
and various other special occasions.

Based on the Limousine and Chauffeured Transportation Industry statistic,
annually, the limousine manufacturing industry generates approximately $400
million in revenues through the sale of luxury limousines, specialty vehicles
and limousine buses to approximately 14,000 limousine operators located
throughout the United States. These limousine operators are located in the
following regions of the United States: 59% in the Northeast, 16% in the
Southeast, 11% in the Midwest and 14% in the West.

PRODUCTS AND SERVICES

LINCOLN TOWN CAR

A Lincoln Town Car is modified into a luxury limousine through a thirteen
step manufacturing process completed over a period of approximately eleven days.
The Company maintains a 35 to 45 day inventory of Lincoln Town Car limousines
and the Ford Excursion limousines to meet customer demand. The Lincoln Town Car
market makes up approximately 90% of the modified limousine chassis market.

SPECIALTY VEHICLES

The Specialty vehicles and buses include the Hummer H2, the Cadillac Escalade,
the Sprinter Bus, as well as other models that are made to order. The customer
has many more options in this market however pricing is based on the time,
materials manufacturing overhead plus profit margin. The specialty vehicles and
buses manufactured at CTMC are primarily built to order. This is a small
percentage of the limousine market, however we believe that we can sustain
higher profit margins and significant customization is available based on the
customers specifications.

COMPETITION

The Company is one of seven limousine manufacturers in the limousine
manufacturing industry operating under QVM and CMC agreements as well as the
many companies in the marketplace that do not operate under the manufacturer
sponsored programs. Operating within QVM and CMC agreements enables the Company
to provide enhanced warranty coverage to the purchasers of our vehicles, as well
as provide superior engineering design, using the resources provided by the
manufacturers. Our competition offers similar products to these limousine
operators however, we believe that our sales, design and engineering team has
focused our products on specifications that operators and end users require in
order to differentiate our products and services from our competitors. We intend
to differentiate ourselves, through our direct marketing and additional product
offerings and services, such as financing and insurance products. The business
strategy of the Company is to further diversify product lines and develop
innovative design, engineering and manufacturing expertise in order to be the
premiere luxury limousine manufacturer in the marketplace. The Company believes
that it can best carry out its long-term business plan and obtain optimal
financial flexibility by using a combination of borrowings under the Company's
credit facilities, as well as internally and externally generated equity
capital, as sources of expansion capital, which should enable us to be more
competitive than the other manufacturers that do not have access to the capital
markets.

MARKETING

The Company markets its limousines through tradeshows, print advertising and
direct marketing to limousine operators. The Company is focusing on certain
custom niches within its geographical markets and believes that opportunities
for growth remain strong for modified limousine chassis. The Company has an
innovative sales and service team focused on building lasting relationships with
its customers. This is accomplished by delivering vehicles and services that
management believes will inspire customer loyalty and enthusiasm.

The Company typically attends two tradeshows annually to exhibit their products
and services, as well as to stay abreast of current trends in the marketplace.
In addition to tradeshows, our sales team typically attends local limousine
operator association meetings on a monthly basis. This enables the sales team to
stay in front of the operators on an on-going basis. The Company and its sales
team actively call the operators in their sales market to maintain a one-on-one
relationship with the operators. The Company sends out direct mail marketing
pieces to select customers or contacts with products or services that they
believe will result in a future sale of our products.

In addition, the Company places print advertisement in various trade
publications, which are supported by QVM and CMC agreements. The Company
believes that maintaining a presence in the limousine community provides the
recognition necessary to further their other forms of advertising and marketing.

SOURCE AND AVAILABILITY OF RAW MATERIAL FOR PRODUCTION

The Company's two major suppliers are Ford Motor Company and General Motors
Corporation, which provide the chassis for the Lincoln Town Car and the Cadillac
products that the Company then manufactures into a modified vehicle under QVM
agreement with Ford and a CMC agreement with General Motors Corporation. The
Company believes that its relationship with these major suppliers is in good
standing at this time and that the supply of chassis inventory is adequate to
meet our operating needs.

AGREEMENTS WITH MAJOR SUPPLIERS

The Company manufactures luxury limousines, specialty vehicles and limousine
buses under a Quality Vehicle Modifier Agreement ("QVM") with Ford Motor Company
and a Cadillac Master CoachBuilder Agreement ("CMC") with General Motors
Corporation. These agreements are evaluated and renewed annually. The Company is
able to utilize the expertise of the supplier for engineering expertise,
warranty support, rebates for chassis purchases and a source of marketing funds.

RESEARCH AND DEVELOPMENT

The company did have any research and development expenses for the year ended
December 31, 2003. After our acquisition of Springfield in December 2003, we
determined that the production of the various vehicles needed to be segregated
as to eliminate any duplication of production processes at the CTMC and SCB
facilities. CTMC personnel have extensive depth of knowledge in prototype
development, modification and engineering of specialty vehicles, such as the
Chrysler Sprinter and the General Motors' Hummer H2. As a result, in January
2004, the Company made a strategic decision for CTMC to focus on manufacturing
specialty vehicles and limousine buses and for SCB to focus on manufacturing the
Lincoln Town Car limousines and the Ford Excursion limousines.

SEASONALITY

The limousine business is seasonal, whereby most purchases are made during the
second and fourth quarters of the fiscal year. The plants close for a week in
the summer and a week in December. The Company plans on diversifying its
business to mitigate some of the seasonality of the current operations.

SUBSIDIARIES

We own two wholly owned operating subsidiaries: (1) Springfield Coach Industries
Corporation, Inc., a Missouri corporation and (2) Commercial Transportation
Manufacturing Corporation, a New York corporation.

EMPLOYEES

As of December 31, 2003, the Company employed 80 full-time employees and two
part-time employees, four of whom are sales personnel, 12 (2 are part-time
employees) of which are managers and administrative personnel and 65 of who are
direct manufacturing personnel. Employees of the Company are not represented by
labor unions. The Company considers its relationship with its employees to be
good.

GOVERNMENT REGULATION

Our Cadillac Master CoachBuilder Agreement with General Motors Corporation and a
Quality Vehicle Modifier Agreement with Ford Motor Company require that we
maintain and adhere to strict engineering and manufacturing standards set by the
National Highway Traffic and Safety Agency ("NHTSA") for manufactured vehicles.
The National Highway Traffic Safety Administration (NHTSA), under the U.S.
Department of Transportation, was established by the Highway Safety Act of 1970,
as the successor to the National Highway Safety Bureau, to carry out safety
programs under the National Traffic and Motor Vehicle Safety Act of 1966 and the
Highway Safety Act of 1966. We purchase our vehicles directly from the original
manufacturers, such as Ford Motor Company. General Motors Corporation and
Daimler-Chrysler, then modify the vehicles based on our customer requirements or
the specific product lines. As such, we are not subject to the same regulations
as other automotive manufacturers.

ITEM 2. DESCRIPTION OF PROPERTIES

In August 2003, Coach Company relocated its corporate offices to Coral Springs,
Florida. Coach leases approximately 1,000 square feet of office space on a
month-to-month basis from Francis O'Donnell, our Chief Executive Officer. The
Company does not pay rent for this office space.

CTMC leases approximately 30,000 square feet of space located in Bohemia, New
York, from Helen Gore, the wife of the former owner of US Coachworks, Inc.
pursuant to a lease agreement which expires in December 2007. Our annual rent
under the lease is $288,000, for the remainder of the term. CTMC uses the space
as its executive offices and manufacturing plant. The lease is non-cancelable.
The lease term, as amended, expires in December 2007 with payments commencing in
July 2003.

SCB lease approximately 45,000 square feet of space located in Springfield,
Missouri, from an unrelated third party, pursuant to a lease which expires in
December 2006. SCB uses the space as its executive office, manufacturing
facility and approximately 16,000 square feet as a warehouse facility. Annual
rent under the lease is $132,000 per year for years 2004 and 2005, and $77,000
for year 2006.

ITEM 3. LEGAL PROCEEDINGS

Certain claims, suits and complaints arising in the normal course with respect
to the Company's services have been filed or are pending against the Company
including its subsidiaries. Generally, these matters are all covered by a
general liability insurance policy. In the opinion of management, the resolution
of all such matters would not have a significant effect on the financial
position, results of operations or cash flows of the Company, if disposed of
unfavorably.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On August 22, 2003, the Shareholders effected a 1-for-4 reverse stock split. The
principal effect of the reverse split will be that the number of shares of
Common Stock issued and outstanding was reduced from 1,088,159 shares as of
August 25, 2003 to approximately 272,039 shares. The number of authorized shares
of common stock was not affected.

On August 22, 2003, the Company held its Annual Meeting of Shareholders. The
Shareholders elected Mr. Francis O'Donnell to serve as director until the
Company's Annual Meeting of stockholders in 2004. The Shareholders effected a
1-for-4 reverse stock split (pro-rata reduction of outstanding shares) of the
Company's issued and outstanding shares of common stock. The Shareholders
amended the Company's Articles of Incorporation to change the name of the
Company to Coach Industries Group, Inc. A majority of the issues and outstanding
shares voted in favor of the resolutions, no votes were cast against the
resolutions, and there were no abstentions.

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

Our common shares are currently quoted on the NASDAQ OTC Bulletin Board
(OTCBB) under the symbol "CIGI." Prior to August 2003, our common shares were
quoted on the OTCBB under the symbol "SHND." The following table sets forth the
quarterly high and low bid prices for our common shares on the OTCBB for the
periods indicated, as adjusted to reflect the 1:67 reverse stock split on
December 30, 2002 and the 1:4 reverse stock split on August 25, 2003. The prices
set forth below represent inter-dealer quotations, without retail markup,
markdown or commission and may not be reflective of actual transactions.

Bid Price
-------------- --------------
Period High Low
-------------------------------------------------------------------------------

Fiscal Year 2003:
December 31, 2003 $ 1.84 $ 1.10
September 30, 2003 2.04 1.00
June 30, 2003 2.68 1.12
March 31, 2003 2.60 0.80
Fiscal Year 2002
December 31, 2002 $ 2.68 $ 0.40
September 30, 2002 2.68 .01
June 30, 2002 9.40 1.36
March 31, 2002 14.20 5.64

HOLDERS

We have approximately 250 record holders of our common stock as of December
31, 2003, according to a shareholders' list provided by our transfer agent as of
that date and our records relating to issuable shares. The number of registered
shareholders excludes any estimate by us of the number of beneficial owners of
common shares held in street name.

DIVIDEND POLICY

We have never paid any cash dividends on our common shares, and we do not
anticipate that we will pay any dividends with respect to those securities in
the foreseeable future. Our current business plan is to retain any future
earnings to finance the expansion development of our business. Any future
determination to pay cash dividends will be at the discretion of our board of
directors, and will be dependent upon our financial condition, results of
operations, capital requirements and other factors as our board may deem
relevant at that time.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

We do not have any equity compensation plans.

STAND-ALONE GRANTS

We do not currently have any outstanding stock options or stock
appreciation rights. However, in the future our board of directors may grant
common share purchase options or warrants to selected directors, officers,
employees, consultants and advisors in payment of goods or services provided by
such persons on a stand-alone basis outside of any formal stock plans. The terms
of these grants may be individually negotiated.

RECENT SALES OF UNREGISTERED SECURITIES

We have sold or issued the following securities not registered under the
Securities Act by reason of the exemption afforded under Section 4(2) of the
Securities Act of 1933, during the periods covered by this report. Except as
stated below, no underwriting discounts or commissions were payable with respect
to any of the following transactions. The offer and sale of the following
securities was exempt from the registration requirements of the Securities Act
under Rule 506 insofar as (1) except as stated below, each of the investors was
accredited within the meaning of Rule 501(a); (2) the transfer of the securities
were restricted by the company in accordance with Rule 502(d); (3) there were no
more than 35 non-accredited investors in any transaction within the meaning of
Rule 506(b), after taking into consideration all prior investors under Section
4(2) of the Securities Act within the twelve months preceding the transaction;
and (4) none of the offers and sales were effected through any general
solicitation or general advertising within the meaning of Rule 502(c).

FOR THE YEAR ENDED DECEMBER 31, 2003, THE COMPANY ISSUED 7.7 MILLION SHARES OF
ITS COMMON STOCK AS FOLLOWS:

On August 26, 2003, the Company issued 3,000,000 restricted shares of common
stock, valued at $0.45 per share, to the shareholders of CTMC in connection with
our acquisition of CTMC.

On August 26, 2003, the Company issued 433,333 restricted shares of common stock
issued to Innovative Consulting Group, a company controlled by Francis
O'Donnell, in settlement of related party payable totaling $65,000, accrued in
connection with consulting and administrative expenses paid on behalf of the
company.

On August 26, 2003, the Company issued 677,333 restricted shares of common stock
issued to International Equities and Finance, LLC in settlement of $101,000 in
related party payables accrued in connection with consulting and administrative
expenses paid on behalf of the company.

On August 26, 2003, the Company issued 1,600,000 restricted shares issued into
treasury for the consideration for a potential transaction. This transaction
related to the acquisition of Go Commercial Leasing and has been consummated on
July 9, 2004. The transaction was adjusted based on the value of the
acquisition. The company will issue to the owners of Go Commercial Leasing,
423,529 shares of restricted common stock from treasury for this transaction.
The remaining shares is treasury will be canceled.

On September 15, 2003, the Company issued 100,000 restricted shares for
consulting services, which were later cancelled effective December 31, 2003, in
connection with non-performance of the contract.

On November 13, 2003, the Company issued 2,000,000 restricted shares, valued at
$1.33 per share, to the shareholders of Springfield Coach Industries
Corporation, Inc. for the purchase of Springfield Coach Industries Corporation,
Inc.

FOR THE YEAR ENDED DECEMBER 31, 2002, THE COMPANY ISSUED 254,850 SHARES OF ITS
COMMON STOCK AS FOLLOWS:

During 2002, the Company issued 1,492 restricted shares of common stock, two
members of the Board of Directors for services rendered to the company.

During 2002, the Company issued 16,418 restricted shares of common stock to
officers of the company in lieu of cash compensation.

During 2002, the Company issued 1,120 restricted shares of common stock to
officers and consultants in lieu of cash compensation for various services
rendered.

During 2002, the Company issued 223,880 restricted shares of common stock to
treasury and as collateral for Notes payable to two executive officers
representing accrued and unpaid wages.

During 2002, the Company issued 11,940 restricted shares of common stock, to a
law firm in settlement of in indebtedness arising from the provision of legal
services rendered.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS

GENERAL

THE FOLLOWING DISCUSSION OF THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF
THE COMPANY SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND
NOTES THERETO INCLUDED ELSEWHERE IN THIS REPORT.

THIS DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES, THE COMPANY'S ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE
ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS,
INCLUDING, BUT NOT LIMITED TO COMPETITION AND OVERALL MARKET CONDITIONS.

ACCOUNTING TREATMENT CHANGE:

After careful review and consideration, the Company has elected to treat the
original transaction between Coach Industries Group, Inc., and Commercial
Transportation Manufacturing Corporation as a reverse merger and not as a
business combination from an accounting standpoint. The purpose for this filing
is to restate the financial statements to reflect the accounting treatment
change for recording this transaction.

At the time of the transaction, the Company adopted the business combination
accounting treatment to record this transaction, whereby the market value of the
common stock exchanged for the assets plus the book value of the assets acquired
were used to determine the valuation of the transaction. Employing this
accounting treatment, the Company recorded approximately $490,000 of goodwill,
an intangible asset. After considering that the Company, Coach Industries Group,
Inc., had no operations prior to the Transaction, the Company concluded that the
reverse merger accounting treatment more appropriately reflects the nature of
this transaction. Under the reverse merger accounting treatment, historical
asset values (book value of the assets) are utilized to determine the valuation
of the transaction. Accordingly, no goodwill is generated with this transaction.

Pursuant to the Company's decision to change the accounting treatment, the
financial statements have been restated and are presented within this filing, to
reflect the new treatment.

SUMMARY OVERVIEW AND OVERALL BUSINESS STRATEGY

COACH INDUSTRIES GROUP, INC. OVERVIEW AND BUSINESS STRATEGY

Coach is a holding company which, through its subsidiaries, manufactures luxury
limousines, specialty vehicles and limousine buses through its various operating
subsidiaries. The Company's long-term strategy is to offer and expand our array
of specialty vehicles and limousines and to offer financial services to existing
customers as well as other limousine operators. The Company will actively pursue
acquisition candidates that can support the expansion of these products and
financial services. We currently have three subsidiaries.

In September 2003, Coach acquired Commercial Transportation Manufacturing
Corporation ("CTMC") through a reverse merger. CTMC is a New York corporation.
Its principal executive offices are located in Bohemia, New York. CTMC focuses
on manufacturing specialty vehicles and limousine buses.

In December 2003, the Company formed Springfield Coach Industries Corporation,
Inc. ("SCB"), by acquiring certain assets and assuming certain liabilities from
Springfield Coach Builders, Inc. ("Springfield"). SCB is a Missouri corporation.
Its principal executive offices are located in Springfield, Missouri. SCB
focuses on manufacturing Lincoln Town Car limousines and Ford Excursion
limousines.

Annually, the limousine manufacturing industry generates approximately $400
million in revenues through the sale of luxury limousines, specialty vehicles
and limousine buses to approximately 14,000 limousine operators located
throughout the United States. These limousine operators are located in the
following regions of the United States: 59% in the Northeast, 16% in the
Southeast, 11% in the Midwest and 14% in the West. The Company's facilities are
strategically located to economically service the limousine market. SCB, because
of its Midwest location, provides the Company with the opportunity to
economically support customers located in the Midwestern, Southeastern and
Western region of the United States. SCB's Midwestern location also provides the
Company significant operating expense advantages due to lower labor and
occupancy costs. CTMC's New York presence allows the Company to support the
lucrative Northeastern market. CTMC personnel have extensive depth of knowledge
in prototype development, modification and engineering of specialty vehicles,
such as the Chrysler Sprinter and the General Motors Hummer H2. In January 2004,
the Company made a strategic decision to focus SCB on manufacturing the Lincoln
Town Car limousines, which represent approximately ninety percent (90%) of the
market, and the Ford Excursion limousines and for CTMC to focus on specialty
vehicles and limousine buses.

After our acquisition of Springfield in December 2003, we determined that the
production of the various vehicles needed to be segregated as to eliminate any
duplication of production processes at the CTMC and SCB facilities. CTMC
personnel have extensive depth of knowledge in prototype development,
modification and engineering of specialty vehicles, such as the Chrysler
Sprinter and the General Motors' Hummer H2. As a result, in January 2004, the
Company made a strategic decision for CTMC to focus on manufacturing specialty
vehicles and limousine buses and for SCB to focus on manufacturing the Lincoln
Town Car limousines and the Ford Excursion limousines. Based on these
manufacturing changes and focus on specialty vehicles, the Company plans on
expending $2.0 million on research and development during the next twelve
months.

The business strategy of the Company is to further diversify product lines and
develop innovative design, engineering and manufacturing expertise in order to
be the premiere luxury limousine manufacturer in the marketplace. The Company
sells its custom limousine chassis to limousine operators throughout the United
States. The Company markets its limousines through tradeshows, print advertising
and direct marketing to limousine operators. The Company is focusing on certain
custom niches within its geographical markets and believes that opportunities
for growth remain strong for modified limousine chassis. The Company's two major
suppliers are Ford Motor Company and General Motors Corporation, which provide
the chassis for the Lincoln Town Car and the Cadillac products that the Company
then manufactures into a modified vehicle under the QVM and CMC agreements. The
Company believes that their relationship with these major suppliers is in good
standing at this time and that the supply of chassis inventory is adequate to
meet our operating needs.

The Company believes that it can best carry out its long-term business plan and
obtain optimal financial flexibility by using a combination of borrowings under
the Company's credit facilities, as well as internally and externally generated
equity capital, as sources of expansion capital. We believe this gives us a
competitive advantage from other manufacturers in our industry who do not have
access to these capital markets.

The Company has secured lines of credit for funding floor plan liabilities. CTMC
secured a line of credit totaling $1.6 million for the purchase of chassis
inventory from a local dealership. The line of credit will be utilized by CTMC
to fund the purchase of chassis for production.

FINANCIAL CONDITION FOR THE YEAR ENDED DECEMBER 31, 2003 COMPARED TO DECEMBER
31, 2002

ASSETS

Cash and cash equivalents. Cash and cash equivalents increased from zero at
December 31, 2002 to $91,565 at December 31, 2003, an increase of $91,565,
primarily as a result of the Company acquiring CTMC effective September 1, 2003
through a reverse merger and SCB effective December 31, 2003.

Supply inventory. Supply inventory increased from zero at December 31, 2002 to
$1.3 million at December 31, 2003, an increase of $1.3 million, primarily as a
result of the Company acquiring SCB, effective December 31, 2003 totaling
$946,567. In addition, CTMC acquired approximately $133,000 of raw materials
inventory effective December 31, 2003 as part of a settlement with a related
party.

Total current assets. Total current assets increased from zero at December 31,
2002 to $1.5 million at December 31, 2003, an increase of $1.5 million,
primarily related to the supply inventory discussed above.

Property and equipment. Property and equipment increased from zero at December
31, 2002 to $901,865 at December 31, 2003, an increase of $901,865, related to
the acquisition of SCB effective December 31, 2003. In addition, CTMC acquired
approximately $767,000 of property and equipment, effective December 31, 2003 as
part of a settlement with a related party. No depreciation was taken relating to
either of these transactions for the year-ended December 31, 2003.

LIABILITIES

ACCRUED WAGES. Accrued wages decreased from zero at December 31, 2002 to $32,921
at December 31, 2003, primarily relating to the operations of CTMC.

ACCOUNTS PAYABLE AND OTHER ACCRUED EXPENSES. Accounts payable increased from
zero at December 31, 2002 to $367,669 at December 31, 2003, an increase of
$367,669, relating to the operations of CTMC.

RELATED PARTY PAYABLE. Related party payable increased from zero at December 31,
2002 to $305,739, specifically relating to funding cash funding requirements of
CTMC and SCB. In addition, professional fees were paid directly by a related
party.

NOTES PAYABLE-RELATED PARTIES. Notes payable-related parties increased from zero
at December 31, 2002 to $613,659 at December 31, 2003, a increase of $613,659
primarily related to notes payable - related parties totaling $613,659
pertaining to the acquisition of SCB effective December 31, 2003, specifically
relating to the chassis inventory financed.

TOTAL CURRENT LIABILITIES. Total current liabilities increased from zero at
December 31, 2002 to $1.7 million at December 31, 2003, an increase of $1.7
million, primarily as a result of the Company related to the acquisition of CTMC
and SCB. In addition, the Company funded operations through increased accounts
payable and related party accounts payable.

Management will try to maintain the Company in its current operating form
through the issuance of common stock to consultants for the Company's ongoing
administrative and reporting duties. In addition, the Company has secured lines
of credit for funding floor plan liabilities. CTMC secured a line of credit
totaling $1.6 million for the purchase of chassis inventory from a local
dealership. The line of credit will be utilized by CTMC to fund the purchase of
chassis for production.

In addition, during 2004 SCB expects to secure funding from one of the major
floor plan providers totaling $2.0 million for the purchase of chassis vehicles
for production.

RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2003 COMPARED TO DECEMBER
31, 2002

Effective September 1, 2003, the Company has restated its consolidated
balance sheet, consolidated statement of operations and consolidated statement
of cash flows in conjunction with the reverse merger with CTMC. The accompanying
financial statements include the accounts of the Company from September 1, 2003,
and its wholly owned subsidiaries CTMC from January 8, 2003 (inception) and SCB,
effective December 31, 2003. CTMC was formed on January 8, 2003 (inception),
however they did not commence operations until April 1, 2003, thus, no activity
has been presented for the three months ended March 31, 2003.

GROSS REVENUES. Gross revenues were $1.1 million for the year ended December 31,
2003, primarily as a result of the Company acquiring CTMC through a reverse
merger effective September 1, 2003 and the gross revenues for the period reflect
revenues from inception January 8, 2003 through December 31, 2003 for CTMC.

COSTS OF GOODS SOLD. Costs of goods sold increased was $1.4 million for the year
ended December 31, 2003, as a result of the Company acquiring CTMC through a
reverse merger effective September 1, 2003 and the costs of goods sold for the
period reflect costs from inception January 8, 2003 through December 31, 2003.

OPERATING EXPENSES. Operating expenses were $1.4 million for the year ended
December 31, 2003 relating to expenses associated with Coach from September 1,
2003 and CTMC from January 8, 2003 (inception).

General and administrative expenses were $462,998 for the year ended December
31, 2003, as a result of the Company acquiring CTMC effective September 1, 2003
through a reverse merger and the general and administrative expenses for the
period reflect expenses from January 8, 2003 through December 31, 2003 for CTMC
and Coach from September 1, 2003 through December 31, 2003. Depreciation and
amortization expense reflected amortization of deferred rent of $9,600 for the
year ended December 31, 2003. During the year ended December 31, 2003, the
Company issued 1.8 million shares of common stock to various related parties for
future consulting services. The Company recognized approximately $550,000 of
amortization of deferred compensation relating to this issuance. The total value
of these agreements is $810,000 to settle past services, as well as future
services to the Company which included approximately $550,000 of deferred
compensation for the year ended December 31, 2003 and approximately $260,000
which was included in the retained deficit at the time of the reverse merger
with CTMC. The $260,000 represented services rendered prior to the reverse
merger with CTMC. The shares of common stock were issued to these individuals
with a three month restriction. The agreements are for consulting services for
periods between 6 months to 2 years.

NET (LOSS). Net loss was $1.7 million for the year ended December 31, 2003,
primarily due to the operations of CTMC for the period from January 8, 2003
(inception) through December 31, 2003 and the amortization of deferred
compensation of approximately $550,000 for Coach.

ACCOUNTING POLICIES SUBJECT TO ESTIMATION AND JUDGMENT

Management's Discussion and Analysis of Financial Condition and Results of
Operations are based upon our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. When preparing our financial statements, we make estimates and
judgments that affect the reported amounts on our balance sheets and income
statements, and our related disclosure about contingent assets and liabilities.
We continually evaluate our estimates, including those related to revenue,
allowance for doubtful accounts, reserves for income taxes, and litigation. We
base our estimates on historical experience and on various other assumptions,
which we believe to be reasonable in order to form the basis for making
judgments about the carrying values of assets and liabilities that are not
readily ascertained from other sources. Actual results may deviate from these
estimates if alternative assumptions or condition are used.

ITEM 7. FINANCIAL STATEMENTS

See "Index to Financial Statements" for a description of the financial
statements included in this Form 10-KSB.

Consolidated balance sheet at December 31 December 31, 2003

Consolidated statement of operations for the period from January 8, 2003
(inception) to December 31, 2003

Consolidated statement of shareholders' equity for the period from January 8,
2003 (inception) to December 31, 2003

Consolidated statement of cash flows for the period from January 8, 2003
(inception) to December 31, 2003

Notes to consolidated financial statements for the period from January 8, 2003
(inception) to December 31, 2003

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

None.

ITEM 8A. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

As of the end of the period covered by this report, the Company carried
out an evaluation of the effectiveness of the design and operation of its
disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. This
evaluation was done under the supervision and with the participation of the
Company's Principal Executive Officer and Principal Financial Officer. Based
upon that evaluation, the Principal Executive Officer and Principal Financial
Officer concluded that the Company's disclosure controls and procedures are
effective in gathering, analyzing and disclosing information needed to satisfy
the Company's disclosure obligations under the Exchange Act.

CHANGES IN INTERNAL CONTROLS

There were no significant changes in the Company's internal controls or in
other factors that could significantly affect those controls since the most
recent evaluation of such controls.

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT

EXECUTIVE OFFICERS AND DIRECTORS

The director and executive officer as of December 31, 2003 is as follows:

NAME AGE POSITION
-------------------------------- -------- ---------------------------------------------------------------------------

Francis O'Donnell 45 Chairman of the Board, Chief Executive Officer/Chief Accounting
Officer
-------------------------------- -------- ---------------------------------------------------------------------------

FRANCIS O'DONNELL has served as Chief Executive Officer and Chairman of the
Board of Directors of the Company since July 10, 2003. Mr. O'Donnell is also the
Managing Member of International Equities and Finance, LLC, a company
specializing in recapitalizing and re-engineering entities and has held this
position since February, 2001. From November, 1996 to February, 2001, Mr.
O'Donnell was the President and Chief Executive Officer of Inorganic Recycling
Corporation. Prior to November, 1996, Mr. O'Donnell was a Group Director for
Ryder Systems (November, 1993 to November, 1996), President and Chief Executive
Officer of Business Telecom, Inc. (February, 1991 to November, 1993) and Vice
President Strategic Planning of MCI Telecommunications (January, 1987 to
February, 1991). Mr. O'Donnell holds a Business and Mathematics degree from
Rollins College, Winter Park, Florida and Masters in Business Administration
(MBA) from Columbia University, New York, NY.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
that the Company directors and executive officers, and persons who own more than
ten percent (10%) of the Company's outstanding common stock, file with the
Securities and Exchange Commission (the "Commission") initial reports of
ownership and reports of changes in ownership of Common Stock. Such persons are
required by the Commission to furnish the Company with copies of all such
reports they file. The Company's knowledge, based solely on a review of the
copies of such reports furnished to the Company and written representation, as
of December 31, 2003, all of the Section 16(a) filing requirements applicable to
its officers, directors and greater than 10% beneficial owners have been
satisfied.

CODE OF ETHICS

The Company has adopted a code of business conduct and ethics that applies to
its directors, officers, and employees, including its principal executive
officers, principal financial officer, principal accounting officer, controller
or persons performing similar functions. A copy of the code is attached to this
report as Exhibit 14.

ITEM 10. EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table shows the compensation paid over the past three fiscal years
with respect to our "named executive officers" as that term is defined by the
under SEC.

Annual Compensation Long Term Compensation
-------------------------- ----------------------------------------------------------------------
Awards Payouts
---------------------------- ----------------------------------------
Securities
Restricted Underlying
Other Annual Stock Options/ LTIP All Other
Name and Principal Position Year Salary Bonus Compensation Award(s) SARs (#) Payouts Compensation
---------------------------- ------ --------- ---------- ------------ ----------- ------------- ------- ----------------

Francis O'Donnell 2003 -- -- -- 965,450(1) -- -- --
Chief Executive Officer
2002 -- -- -- -- -- -- --

Susan Weisman 2003 -- -- -- -- -- -- --
Chief Financial Officer
2002 -- -- -- -- -- -- --

2002 $130,000 -- -- -- -- -- 20,068(2)
Dave Mullikin, 2001 $233,910 -- -- -- 6,309(3) -- --
Former Chief Executive
Officer

2002 $104,167 -- -- -- -- -- 9,800(2)
Brad Cohen, 2001 $212,500(3) -- -- -- 4,842(3) -- --
Former Chief Financial
Officer

(1) Mr. O'Donnell received 1,405,000 shares of common stock on August 26, 2003
valued at $0.45 a share, for past and future consulting services to the
Company. The value of the issuance of stock was $632,250. In addition,
companies that Mr. O'Donnell controls have settled outstanding liabilities
with the Company through the issuance of an aggregate of 1.1 million
shares of common stock, as of August 26, 2003, valued at $0.45 per share
reflecting a loss to the Company totaling $333,200.
(2) Effective January 1, 2002, the Company entered two separate lease
agreements with officers and directors of the Company to lease space to be
utilized for office purposes at a rate totaling $5,134 per month. The
initial term of the lease was one year with a two-year renewal option (at
the Company's option) at a rate totaling $10,000 per month. Rental expense
totaled $29,868 for the year ended December 31, 2002. The agreement
between the Company and Brad Cohen was terminated effective with his
resignation on May 31, 2002. The agreement between the Company and Mr.
Mullikin was terminated on January 3, 2003.
(3) The Company issued 1,493 shares of common stock to Brad Cohen and 1,493
shares of common stock to Dave Mullikin, pursuant to their employment
agreements.

OPTIONS AND STOCK APPRECIATION RIGHTS GRANT TABLE

There were no grants of stock options to the Named Executive Officers
during the fiscal year ended December 31, 2003.

AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUE TABLE

We do not have any outstanding stock options or stock appreciation rights.

LONG-TERM INCENTIVE PLAN AWARDS TABLE

We do not have any Long-Term Incentive Plans.

COMPENSATION OF DIRECTORS

We currently have one director. There are no standard arrangements
pursuant to which the Company's directors are compensated for their services as
directors. No additional amounts are payable to the Company's directors for
committee participation or special assignments. We currently do not have any
committees.

There are no other arrangements pursuant to which any director was
compensated during the Company's last completed fiscal year for any service
provided as director.

EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS

None.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding beneficial
ownership of the common stock as of December 31.2003, by (i) each person who is
known by the Company to own beneficially more than 5% of the any classes of
outstanding Stock, (ii) each director of the Company, (iii) each of the Chief
Executive Officers and the four (4) most highly compensated executive officers
who earned in excess of $100,000 for all services in all capacities
(collectively, the "Named Executive Officers") and (iv) all directors and
executive officers of the Company as a group.

The number and percentage of shares beneficially owned is determined in
accordance with Rule 13d-3 and 13d-5 of the Exchange Act, and the information is
not necessarily indicative of beneficial ownership for any other purpose. We
believe that each individual or entity named has sole investment and voting
power with respect to the securities indicated as beneficially owned by them,
subject to community property laws, where applicable, except where otherwise
noted. Unless otherwise stated, the address of each person is 9600 W. Sample
Road, Suite 505, Coral Springs, Florida 33065.

NUMBER OF
SHARES OF PERCENT OF
NAME OF BENEFICIAL OWNER COMMON STOCK CLASS
------------------------------------------------------------ --------------- -------------

Francis O'Donnell, 4,966,066 (1) 50.75(2)
Chief Executive Officer, Director

All Officers and Directors as a group (4 persons) 4,966,066 50.75

(1) Includes: 4,966,066 shares owned: 283,000 shares shares owned directly by
Francis O'Donnell; 188,333 by Innovative Consulting LLC, all of which
Francis O'Donnell may be deemed to beneficially own under Rule 13d-3;
60,533 shares owned by International Equities and Finance LLC, all of
which Francis O'Donnell may be deemed to beneficially own under Rule
13d-3; 1,800,000 shares owned by Springfield Coach Industries Corporation,
all of which Francis O'Donnell may be deemed to beneficially own under
Rule 13d-3 and 1,022,500 shares owned by investors in Elm Street Partners,
all of which Francis O'Donnell retains voting control. The voting rights
for these shares of common stock collectively are maintained by Francis
O'Donnell.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

CTMC leases approximately 30,000 square feet of space located in Bohemia,
New York, FCW Realty, a related party, pursuant to a lease agreement which
expires in December 2007. Our annual rent under the lease is $288,000, for the
remainder of the term. CTMC uses the space as its executive offices and
manufacturing plant. The lease is non-cancelable. The lease term, as amended,
expires in December 2007 with payments commencing in July 2003.

The Company maintained certain equipment used for manufacturing currently
owned by a related party in anticipation of a pending purchase agreement for
that equipment. On December 31, 2003, the Company acquired the equipment and
inventory of Springfield for $859,147. The transaction was settled through a
mortgage on property owned by FCW Realty, a related party. The mortgage is not a
liability of the Company and was considered an equity contribution from the
related party.

During the year ended December 31, 2003, the Company issued 1,405,000
shares of common stock to Francis O'Donnell for future consulting services. The
total value of these agreements is $632,250 to settle past services, as well as
future services to the Company. The shares of common stock were issued with a
three month restriction. The agreements are for consulting services for 2 years.

On August 26, 2003, the Company settled a related party payable of $65,000
with Innovative Consulting Group, a company controlled by Francis O'Donnell,
whereby the Company issued 433,333 shares of restricted common stock in
settlement of that payable.

On August 26, 2003, the Company settled a related party payable with
International Equities and Finance, LLC, a company controlled by Francis
O'Donnell, whereby the Company issued 677,333 shares of restricted common stock
in settlement of outstanding payable amounts owed of $101,600.

Related party accounts payable totaled $305,739 at December 31, 2003. The
amount pertains to amounts funded by Elm Street Partners, a company controlled
by Francis O'Donnell, for professional fees and cash flow requirements of Coach,
CTMC and SCB.

Notes payable- related parties totals $613,659 due to the John
Baumgartner, the former owner of Springfield, as of December 31, 2003. Those
balances pertain to the chassis inventory purchased at acquisition. The Company
borrowed the money to purchase chassis inventory as a part of its acquisition of
SCB.

Mr. Mullikin was a director of SearchHound.com, Inc. and was its acting
Chief Executive Officer, prior August 22, 2003. The net book value of the net
assets sold approximated $8,000 as of the date of sale. Pursuant to the asset
sale agreement the Company agreed to transfer such assets in settlement of a
portion of the then outstanding principal balance of $179,359 together with all
accrued but unpaid interest. The settlement of this note payable resulted in a
gain of $135,100 based upon the market value of the common stock at the date
issued and was classified as gain on disposal of discontinued operations in the
Statement of Operations for the year ended December 31, 2003, prior to the
reverse merger with CTMC.

Item 7. Financial Statements

Report of Independent Certified Public Accountants

Consolidated balance sheet at December 31 December 31, 2003

Consolidated statements of operations for the period from January 8, 2003
(inception) through December 31, 2003

Consolidated statements of shareholders' equity for the period from January 8,
2003 (inception) through December 31, 2003

Consolidated statements of cash flows for the period from January 8, 2003
(inception) through December 31, 2003

Notes to consolidated financial statements for period from January 8, 2003
(inception) through December 31, 2003

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To The Shareholders and Board of Directors of Coach Industries Group, Inc. and
Subsidiaries

We have audited the accompanying consolidated balance sheet of Coach
Industries Group, Inc. f/k/a SearchHound.com Inc. (a Nevada corporation) as of
December 31, 2003, and the related consolidated statements of operations,
changes in shareholders' equity and cash flows for the period from January 8,
2003 (inception) through December 31, 2003. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audit in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provided a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Coach Industries Group, Inc.
and its subsidiaries as of December 31, 2003, and the results of their
operations and their cash flows for the period from January 8, 2003 (inception)
through December 31, 2003 in conformity with accounting principles generally
accepted in the United States. The financial statements referred to above have
been restated to account for the acquisition of the Commercial Transportation
Manufacturing Corporation as a reverse merger further described in Note 2 to the
consolidated financial statements.

JEWETT, SCHWARTZ & ASSOCIATES

Hollywood, Florida
March 22, 2004 and July 1, 2004, with respect to Note 2

COACH INDUSTRIES GROUP, INC.

CONSOLIDATED BALANCE SHEET

DECEMBER 31, 2003
------------------

ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................... $ 91,565
Accounts receivable, net.................................... 12,939
Due from Related party accounts receivable.................. 31,593
Supply inventory............................................ 1,310,483
Prepaid expenses and other current assets................... 57,680
------------------
Total current assets................................ 1,504,260
------------------
PROPERTY AND EQUIPMENT, net................................... 901,865
GOODWILL...................................................... 2,186,595
------------------
$ 4,592,720
==================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses....................... $ 367,669
Related party accounts payable 305,739
Deferred rent .............................................. 115,200
Warranty reserve............................................ 20,535
Customer deposits........................................... 230,273
Accrued wages............................................... 32,921
Notes payable - related parties............................. 613,659
------------------
Total current liabilities........................... 1,685,996
------------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock $0.001 par value; 50,000,000 shares authorized
9,785,531 issued and outstanding.............................. 9,785
Additional paid in capital.................................... 5,360,228
Accumulated deficit........................................... (1,743,290)
Treasury stock, 1.6 million shares at cost.................. (720,000)
------------------
Total shareholders' equity.......................... 2,906,723
------------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 4,592,720
==================

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

COACH INDUSTRIES GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE PERIOD FROM INCEPTION (JANUARY 8, 2003) THROUGH DECEMBER 31, 2003

REVENUES $ 1,068,487
COST OF GOODS SOLD 1,411,058
--------------
GROSS LOSS (342,571)
--------------

OPERATING EXPENSES:
General and
Administrative............ 463,099
Sales and marketing ........
47,999
Rent........................ 259,200
Other....................... 80,055
Amortization of deferred
Compensation............... 550,366
--------------
Total operating expenses... 1,400,719
--------------
Loss before income taxes (1,743,290)
--------------
Income taxes................... --
--------------
NET LOSS....................... $ (1,743,290)
==============
Basic and diluted net income
(loss) per share :

Net Loss per share............. $ (0.79)
==============
Basic and diluted weighted average
common shares outstanding...... 2,219,699
==============

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

COACH INDUSTRIES GROUP, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

UNEARNED
ADDITIONAL COMPENSATION
PAID OTHER RESTRICTED
COMMON STOCK IN ACCUMULATED TREASURY COMPREHENSIVE STOCK
SHARES AMOUNT CAPITAL DEFICIT STOCK INCOME GRANTS TOTAL
---------------------------------------------------------------------------------------------------------------

BALANCE, $ $ $ $ $ $ $ $
December 31, 2002
Issuance of
common stock
capitalization
of CTMC 1,450 0 580,500 580,500
Recognition of
unearned
compensation -
restricted stock
-- -- 550,366 -- -- -- -- 550,366
Reclassification
of common stock
related to the
reverse merger
of Coach and
CTMC
3,184,081 3,185 (3,185) -- -- -- -- --
Issuance of
common stock
upon reverse
merger of CTMC
3,000,000 3,000 (3,000) -- -- -- -- --
Issuance of
common stock
into treasury
for settlement
of a pending
acquisition 1,600,000 1,600 718,400 -- (720,000) -- -- --
Issuance of
common stock
upon
acquisition of
SCB 2,000,000 2,000 2,658,000 -- -- -- -- 2,660,000
Contribution of
inventory and
raw materials -- -- 859,147 -- -- -- -- 859,147
Net loss (1,743,290) (1,743,290)
---------------------------------------------------------------------------------------------------------------
BALANCE,
DECEMBER 31, 2003 9,785,531 $ 9,785 $ 5,360,228 $(1,743,290) $ (720,000) $ -- $ -- $ 2,906,723

===============================================================================================================

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

COACH INDUSTRIES GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2003

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.............................................. $1,743,290)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization....................... (9,600)
Amortization of deferred compensation .............. 550,366
Changes in operating assets and liabilities:
Accounts receivable............................... (12,939)
Inventory......................................... (230,117)
Prepaid expenses and other........................ (57,680)
Deferred Rent .................................... 124,800
Accounts payable and accrued expenses............. 394,406
Other current assets..............................
Warranty reserve ................................ 20,535
Customer deposits................................ 223,273
-----------
Net cash provided by (used in) operating
activities................................ (740,246)
-----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment ............... (1,877)
Capitalization of CTMC ............................... 580,500
Cash received from business acquisitions, net......... 24,042
-----------
Net cash used in investing activities....... 602,665
-----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Related party accounts payable, net................... 229,146
-----------
Net cash (used in) financing
Activities................................ 229,146
-----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS.... 91,565
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR............ --
-----------
CASH AND CASH EQUIVALENTS, END OF YEAR.................. $ 91,565
===========

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

COACH INDUSTRIES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2003

1. BACKGROUND

OVERVIEW

Coach is a holding company which manufactures luxury limousines, specialty
vehicles and limousine buses through its various operating subsidiaries. We
currently have two subsidiaries. Commercial Transportation Manufacturing
Corporation ("CTMC") focuses on manufacturing specialty vehicles and limousine
buses. Springfield Coach Industries Corporation, Inc. ("SCB"), SCB focuses on
manufacturing Lincoln Town Car limousines and Ford Excursion limousines.

HISTORY

GENERAL

Through our subsidiaries, we manufacture luxury limousines, specialty vehicles
and limousine buses. Coach's principal executive offices are located in Coral
Springs, Florida. We are one of seven limousine manufacturers in the limousine
manufacturing industry operating under agreements with Ford Motor Company and
General Motors Corporation. The Company's long-term strategy is to offer and
expand our array of specialty vehicles and limousines and to offer and expand
financial services to existing customers, other limousine operators and others
outside of the limousine business. The Company will actively pursue acquisition
candidates that can support the expansion of these products and financial
services.

SCB manufactures its vehicles pursuant to a Quality Vehicle Modifier Agreement
with Ford Motor Company and a Cadillac Master CoachBuilder Agreement with
General Motors Corporation. SCB, because of its Midwest location, provides us
with the opportunity to economically support customers located in the
Midwestern, Southeastern and Western region of the United States. SCB's
Midwestern location also provides the Company significant operating expense
advantages due to lower labor and occupancy costs. SCB's operations consists of
manufacturing, selling and servicing Lincoln Town Cars and Ford Excursions
Limousines The operations is housed in a 45,000 square foot manufacturing
facility with 38 employees involved in the direct manufacture of the modified
chassis. Management believes that the acquisition of Springfield enabled the
Company's to use its existing sales force, engineering expertise and management
to enter the Midwestern and Western United States limousine markets. Coach was
able to assume the existing lease for the manufacturing facility in Springfield,
Missouri, which increased its manufacturing capacity and reduced the cost of
distribution in those markets.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

Effective September 1, 2003, the Company through a reverse merger with CTMC, has
restated its consolidated balance sheet, consolidated statement of operations
and consolidated statement of cash flows as discussed in more detail below. The
accompanying financial statements include the accounts of the Company from
September 1, 2003, and its wholly owned subsidiaries CTMC from January 8, 2003
(inception) and SCB, effective December 31, 2003. CTMC was formed on January 8,
2003 (inception), however they did not commence operations until April 1, 2003.
All significant inter-company balances and transactions have been eliminated.

RESTATEMENT OF FINANCIAL STATEMENTS

The Company, after careful consideration and review, has elected to change the
accounting treatment of the transaction between the Company and Commercial
Transportation Manufacturing, Inc. (the "Transaction") and accordingly restate
the financial statements. Originally, the Transaction was accounted for as a
business combination that resulted in recording goodwill, an intangible asset,
of approximately $490,000. After further investigation and consideration, the
Company has concluded that the accounting treatment of this Transaction as a
reverse merger more accurately reflects the nature of this transaction. The
primary factor influencing the accounting treatment change for this Transaction
is that the Company, Coach Industries Group, Inc. had no operations prior to the
Transaction. The accounting impact of treating this Transaction as a reverse
merger instead of a business combination is an elimination of approximately
$490,000 of goodwill and a reduction of Additional Paid - in Capital by the same
amount.

USE OF ESTIMATES

The preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities and disclosures at the date of the financial statements and during
the reporting period. Accordingly, actual results could differ from those
estimates.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with an original maturity of
three months or less to be cash equivalents. At December 31, 2003, cash and cash
equivalents include cash on hand and cash in the bank.

REVENUE AND COST RECOGNITION

Revenues are reported at the time the custom re-fabrication or modification is
complete and delivered to the customer. Customer deposits for partial payment of
vehicles are deferred and treated as current liabilities until the vehicle is
completed and recognized as revenue. Repairs and other services are recorded
when the service is performed. Inventory is relieved upon delivery of the
vehicle.

PROPERTY AND EQUIPMENT, NET

Property and equipment, net are stated at cost. Depreciation and amortization
are provided using the straight-line method over the estimated economic lives of
the assets, which are typically three to seven years.

Expenditures and major renewals and betterments that extend the useful lives of
property and equipment are capitalized. Expenditures for maintenance and repairs
are charged to expense as incurred.

SUPPLY INVENTORY

Supply inventory includes the cost of the unmodified vehicle chassis and parts
related to vehicles in the process of being modified and remanufactured.
Shipping and handling costs are included in inventory.

All inventories are valued at the lower of cost or market. The cost of new and
used vehicles is determined using the specific identification method. The cost
of new parts is valued using the first in first out basis.

IMPAIRMENT OF LONG-LIVED ASSETS

The Company reviews long-lived assets for impairment whenever circumstances and
situations change such that there is an indication that the carrying amounts may
not be recovered. At December 31, 2003, the Company believes that there has been
no impairment of its long-lived assets.

During 2002 the Company conducted an asset evaluation based on impairment for
long-lived assets, which included its five web site, database, and exchange
servers (asset group) and found that they no longer support revenue or income
from continuing operations. This asset group was evaluated based on fair market
value of like equipment for sale.

ADVERTISING

The Company expenses advertising production costs as they are incurred.
Advertising costs for the years ended December 31, 2003 were approximately
$6,600.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value of
each class of financial instruments for which it is practicable to estimate that
value:

Cash and cash equivalents, prepaid expenses, other assets, and accounts payable
carrying amounts approximate fair value.

WARRANTY RESERVES

The Company provides warranties to its new car customers of the earlier of three
years or fifty thousand miles, only on parts and labor performed by the Company.
Warranty reserve was $20,535 as of December 31, 2003.

INCOME TAXES

Deferred income taxes arise from timing differences resulting from income and
expense items reported for financial accounting and tax purposes in different
periods. A deferred tax asset valuation allowance is recorded when it is more
likely than not that deferred tax assets will not be realized. The financial
statements reflect a deferred tax asset of approximately $200,000 as of December
31, 2003 and a valuation allowance of the same amount, since the Company did not
have the revenue history to support the future recognition of the deferred tax
asset. It is more likely that the deferred tax asset will not be recognized. The
deferred tax asset as of December 31, 2003 was restated as part of a quasi
reorganization and presented as a $0 balance.

Utilization of the net operating loss carry-forwards may be subject to a
substantial annual limitation due to ownership change limitations provided by
the Internal Revenue Code. The annual limitation may result in the expiration of
net operating loss carry-forwards before utilization.

GOODWILL

The Company adopted SFAS No.142, "Goodwill and Other Intangible Assets," on
January 1, 2002. As of the adoption date, the Company no longer amortizes
goodwill over its useful life. Instead, goodwill is tested for impairment
annually. The impairment test consists of two steps. In the first step, the
Company determines the carrying value of each reporting unit by assigning the
assets and liabilities, including the existing goodwill and intangible assets,
to those reporting units. If the fair value of the reporting unit is greater
than its carrying value, the test is completed and goodwill assigned to the
reporting unit is not impaired. To the extent a reporting unit's carrying amount
exceeds its fair value, an indication exists that the reporting unit's goodwill
may be impaired, and the Company must perform the second step of the impairment
test. In the second step, the Company must compare the implied fair value of the
reporting unit's goodwill, determined by allocating the reporting unit's fair
value to all of its assets (recognized and unrecognized) and liabilities in a
manner similar to a purchase price allocation in accordance with SFAS No.141, to
its carrying amount. The Company will recognize a goodwill impairment charge if
the carrying amount of the goodwill assigned to the reporting unit is greater
than the implied fair value of the goodwill. At December 31, 2003, the Company
has not recognized an impairment loss.

NET INCOME (LOSS) PER SHARE

The Company has presented basic and diluted net income (loss) per share pursuant
to SFAS No. 128, "Earnings per Share," and the Securities and Exchange
Commission SAB No. 98. In accordance with SFAS No. 128, basic net income (loss)
per share has been computed by dividing net income (loss) by the
weighted-average number of shares of common stock outstanding during the period.
Diluted net income (loss) per share includes the effect, if any, from the
potential exercise or conversion of securities, such as stock options, which
would result in the issuance of shares of common stock.

STOCK SPLIT

On August 26, 2003, prior to the reverse merger, the Company effected a 1-for-4
stock split of each outstanding share of common. All share data has been
restated to reflect the stock split.

RECENT ACCOUNTING PRONOUNCEMENTS

In January 2003, the FASB issued Interpretation No. 46 ("Consolidation of
Variable Interest Entities"). The interpretation defines a variable interest
entity as corporation, partnership, trust or any other legal structure used for
business purposes that either (a) does not have equity investors with voting
rights nor (b) has equity investors that do not provide sufficient financial
resources for the equity to support its activities. A variable interest entity
often holds financial assets, including loans or receivables, real estate or
other property. A variable interest entity may be essentially passive or it may
engage in research and development or other activities on behalf of another
company. This interpretation requires a variable interest entity to be
consolidated by a company if that company is subject to a majority of the risk
of loss from the variable interest entity's activities or entitled to receive a
majority of the entity's residual returns or both. The Company would have to
consolidate any of its variable interest entities that meet the above criteria
as of July 1, 2003. The interpretation also requires disclosures about variable
interest entities that the company is not required to consolidate but in which
it has a significant variable interest. Management is in the process of
determining if its interests in unconsolidated entities qualify as variable
interest entities and, if so, whether the assets, liabilities, non-controlling
interest, and results of activities are required to be included in the Company's
consolidated financial statements.

In May 2003, the FASB issued Statement No. 150 ("Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity").
This Statement establishes standards for how an issuer classifies and measures
certain financial instruments with characteristics of both liabilities and
equity. The Statement requires that an issuer classify a financial instrument
that is within its scope as a liability (or an asset in some circumstances).
Many of those instruments were previously classified as equity. The Company is
currently classifying financial instruments within the scope of this Statement
in accordance with this Statement. This Statement is effective for financial
instruments entered into or modified after May 31, 2003, and otherwise is
effective at the beginning of the first interim period beginning after June 15,
2003. Management does not believe that this Statement will have a material
impact on the Company's financial statements.

3. CONCENTRATION OF CREDIT RISK

The amounts on deposit at December 31, 2003 did not exceed the $100,000
federally insured limit for bank deposits. The Company purchases a significant
portion of its inventory from two major suppliers. The relationships with these
suppliers are significant to the ongoing operations of the business and are
subject to licensing agreements.

4. SUPPLY INVENTORY

Supply inventory consist of the following components as of December 31, 2003:

Vehicle Chassis $ 952,948
Parts 357,535
-------------
$ 1,310,483
=============

5. RELATED PARTY TRANSACTIONS

The Company is a party to a non-cancelable operating lease pertaining to the
office and plant facilities. The lease term, as amended, expires in December
2007 with payments commencing in July 2003. The lease is to a related party.

The minimum lease commitment for the non-cancelable operating lease for the
years ended is summarized as follows:

2004 $ 288,000
2005 288,000
2006 288,000
2007 288,000

--------------------
$ 1,152,000
====================

Rental expense under all operating leases totaled approximately $259,200 for the
years ended December 31, 2003, that includes amortization of deferred rental
expense of approximately $9,600 for the years ended December 31, 2003.

As of December 31, 2003 the Company had receivable balances for approximately
$31,593 due from related parties, respectively.

The Company maintained certain equipment used for manufacturing currently owned
by a related party in anticipation of a pending purchase agreement for that
equipment. Effective December 31, 2003, the Company acquired the equipment and
inventory for $859,147. The transaction was settled through a mortgage on
property owned by a related party. The mortgage is not a liability of the
Company and was considered an equity contribution from the related party.

During the year ended December 31, 2003, the Company issued 1.8 million shares
of common stock to various related parties for future consulting services. The
Company recognized approximately $550,000 of amortization of deferred
compensation relating to this issuance. The total value of these agreements is
$810,000 to settle past services, as well as future services to the Company
which included approximately $550,000 of deferred compensation for the year
ended December 31, 2003 and approximately $260,000 which was included in the
retained deficit at the time of the reverse merger with CTMC. The $260,000
represented services rendered prior to the reverse merger with CTMC. The shares
of common stock were issued to these individuals with a three month restriction.
The agreements are for consulting services for periods between 6 months to 2
years.

Related party accounts payables totaled $305,739 at December 31, 2003 which were
due for funding professional fees and cash flow requirements of CTMC and SCB.

Notes payable - related parties totaled $613,659 at December 31, 2003 due to the
former owner of SCB at December 31, 2003, specifically relating to chassis
inventory purchased at acquisition.

6. ACQUISITIONS

On September 1, 2003, the Company acquired, through a reverse merger CTMC, a New
York corporation specializing in the manufacturing and selling of limousines,
was merged. The Company issued a stock for stock exchange of 3 million shares of
common stock.

Effective December 31, 2003 the Company acquired certain assets and liabilities
from SCB. The acquisition is valued at $2.66 million based on 2 million shares
of common stock, valued at $1.33 per share on November 6, 2003. Management
believes that the acquisition of certain assets and liabilities of SCB enabled
the entree into the Midwestern and Western Markets through the Company's
existing sales force, engineering expertise and management. The Company was able
to assume the existing lease for the manufacturing facility in Springfield,
which increased our manufacturing capacity and reduced our costs of our existing
distribution in those markets.

The following is pro forma information for the year ended December 31, 2003, as
if the reverse acquisition of Coach were consummated on January 1, 2003. The pro
forma information is not necessarily indicative of the combined financial
position or results of operations, which would have been realized had the
acquisition been consummated during the period for which the pro forma financial
information is presented.

FOR THE YEAR ENDED DECEMBER 31, 2003
------------------------------------
HISTORICAL PRO FORMA
---------- ---------

Revenue................................................... $ 1,068,487 $ 1,068,487
Net income (loss)......................................... $ (1,743,290) $ (2,148,279)
================== ===============
Basic and diluted net income (loss) per share............. $ (0.79) $ (0.41)
================== ===============
Basic and diluted weighted average shares outstanding..... 2,219,699 5,219,699
================== ===============

7. SUPPLEMENTAL CASH FLOW INFORMATION

The following table displays the net non-cash assets that were acquired during
the year ended December 31, 2003, as a result of the business acquisitions:

COACH SCB TOTAL
----- --- -----

Non-cash assets (liabilities):
Current assets............................. $ -- $ 946,567 $ 946,567
Property and equipment..................... -- 174,741 174,741
Goodwill................................... -- 2,186,595 2,186,595
Current liabilities........................ -- (671,945) (671,945)
------------------------------------------------------------------------
Net non-cash assets acquired............... -- 2,635,958 2,635,958
Less: common issued........................ -- (2,660,000) (2,660,000)
------------------------------------------------------------------------

Cash received from business acquisitions, net $ -- $ (24,042) $ (24,042)
========================================================================

As of
December 31,
Non cash financing/investing activities: 2003
--------------------
Contributed inventory and property and
equipment as contributed capital 859,147
Issuance of restricted stock related to
deferred compensation 550,366
Issuance of treasury stock 720,000

8. SHAREHOLDERS' EQUITY

STOCK TRANSACTIONS:

During the year ended December 31, 2003, the Company issued 1.8 million shares
of common stock to various related parties for future consulting services. The
Company recognized $810,000 of amortization of deferred compensation relating to
this issuance. The shares of common stock were issued to these individuals with
a three month restriction.

Effective December 31, 2003 the Company acquired certain assets and certain
liabilities from SCB. The acquisition is valued at $2.66 million based on 2
million shares of common stock, valued at $1.33 per share on November 6, 2003.

TREASURY STOCK:

As of August 26, 2003, the Company reserved 1.6 million shares, valued at $0.45
cents per share, for the purpose of using as agreed consideration for a
potential transaction. The shares shall vest on the effective date of the
aforementioned potential transaction. The shares were has been reserved in
treasury stock amounting to $720,000 as of December 31, 2003.

9. COMMITMENTS AND CONTINGENCIES

Effective December 31, 2003, the Company assumed an operating lease pertaining
to the office and plant facilities in Springfield, Missouri. The lease term,
expires in July 2006.

The minimum lease commitment, for the non-cancelable operating lease for the
years ended is summarized as follows:

2004 $ 132,000
2005 132,000
2006 77,000

--------------------
$ 341,000
====================

PART II OTHER INFORMATION

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

The following documents are filed as a part of this report or are incorporated
by reference to previous filings, if so indicated:

Exhibits

3.1 Articles of Incorporation (1)

3.2 Bylaws (1)

14.1 Code of Ethics (2)

10.1 Form of Cadillac Master CoachBuilder Agreement with General Motors
Corporation.

10.2 Quality Vehicle Modifier Agreement between Commercial Transportation
Manufacturing Corporation and Ford Motor Company, dated as of March 23,
2004.

10.3 Common Stock Purchase Agreement between Registrant and Fusion Capital Fund
II, LLC, dated as of May 19, 2004. (3)

10.4 Registration Rights Agreement between Registrant and Fusion Capital Fund
II, LLC, dated as of May 19, 2004.(3) 23.1 Consent of Independent Auditor.
31.1 Certification of Chief Executive Officer Pursuant to Section 302 of
the Sarbanes-Oxley Act.

31.2 Certification of Principal Financial and Accounting Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act.

32.1 Certification of Chief Executive Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act.

32.2 Certification of Chief Accounting Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act.

----------
(1) Previously filed as an exhibit to our Registration Statement on form
S-8 filed with the SEC on April 26, 2000, and incorporated herein by
this reference.

(2) Previously filed as an exhibit to our report on form 10-KSB filed
with the SEC on March 25, 2004, and incorporated herein by this
reference.

(3) Previously filed as an exhibit to our report on form 8-K filed with
the SEC on June 3, 2004, and incorporated herein by this reference.
B. Reports on Form 8-K

On August 25, 2003, the Registrant announced that on May 19, 2003, the Board of
Directors was notified by Pickett, Chaney & McMullen LLP, the Company's
independent auditor, that it would decline to stand for reelection as the
Company's independent auditor for the fiscal year ending December 31, 2003. At
the Annual Meeting of the Company, held on August 22, 2003, the Shareholders
ratified the appointment of Jewett, Schwartz & Associates, as the Company's
independent certified public accountants, for the fiscal year ending December
31, 2003.

On August 22, 2003, the Company held its Annual Meeting of Shareholders. The
Shareholders elected Mr. Francis O'Donnell to serve as director until the
Company's Annual Meeting of stockholders in 2004. The Shareholders effected a
1-for-4 reverse stock split (pro-rata reduction of outstanding shares) of the
Company's issued and outstanding shares of Common Stock. The Shareholders
amended the Company's Articles of Incorporation to change the name of the
Company to Coach Industries Group, Inc. The Registrant announces that effective
as of the opening of business on Monday, August 25, 2003, the 1-for-4 reverse
stock split will be effective and the Company will be trading under the name
Coach Industries Group, Inc. The new symbol for the Company shall be CIGI.OB.

On August 29, 2003, the Registrant announced, effective September 1, 2003, that
Commercial Transportation Manufacturing Corporation, a New York corporation
specializing the manufacturing and selling of limousines, was to be merged into
Coach Industries Group, Inc.

On September 15, 2003, the Registrant announced that the merger with Commercial
Transportation Manufacturing Corporation, a New York corporation specializing
the manufacturing and selling of limousines, was completed on September 1, 2003.

On November 18, 2003, the Registrant announced that the acquisition of
Springfield Coachbuilders, Inc., through its wholly owned subsidiary,
Springfield Coach Industries Corporation, Inc., a Missouri Corporation. The
Definitive Agreement underlying the acquisition of all the assets of Springfield
Coachbuilders, Inc. will formally close upon completion of an appraisal of all
the assets.

No other reports on Form 8-K were filed during the quarter ended December 31,
2003, for which this report is filed.

ITEM 14: PRINCIPAL ACCOUNTANT FEES AND SERVICES

Year ended December 31, 2003

Audit Fees: The aggregate fees, including expenses, billed by the Company's
principal accountant in connection with the audit of our consolidated financial
statements for the most recent fiscal year and for the review of our financial
information included in our Annual Report on Form 10-KSB; and our quarterly
reports on Form 10-QSB during the fiscal year ending December 31, 2003 was
$27,000.

Audit Related Fees: The aggregate fees, including expenses, billed by the
Company's principal accountant for services reasonably related to the audit for
the year ended December 31, 2003 were $27,000.

All Other Fees: The aggregate fees, including expenses, billed for all other
services rendered to the Company by its principal accountant during year 2003
was $-0-.

The Board of Directors has considered whether the provisions of the services
covered above under the captions "Financial Information Systems Design and
Implementation Fees" and "All Other Fees" is compatible with maintaining the
auditor's independence.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, Coach Industries Corporation, Inc. has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

Coach Industries Group, Inc.

By /s/ Francis O'Donnell
------------------------------
Chief Executive Officer

Date: August 13, 2004

By/s/ Susan Weisman
------------------------------------------------------------------------
Chief Accounting Officer
Date: August 13, 2004