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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______.
Commission File Number 0-28060
BOLDER TECHNOLOGIES CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 84-1166231
--------------------------------------------------------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
4403 Table Mountain Drive, Golden, CO 80403
(Address of principal executive offices including zip code)
(303) 215-7200
(Registrant's telephone number, including area code)
---------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock $.001 par Value 17,208,003
---------------------------- -------------------------------
(Class) (Outstanding at August 1, 2000)
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BOLDER TECHNOLOGIES CORPORATION
TABLE OF CONTENTS
<TABLE>
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PAGE NUMBER
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COVER PAGE 1
TABLE OF CONTENTS 2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
Condensed Balance Sheets as of June 30, 2000 and December 31, 1999 3
Condensed Statements of Operations for the three and six-month periods ended
June 30, 2000 and 1999 4
Condensed Statements of Cash Flows for the six-month periods ended June 30,
2000 and 1999 5
Notes to Condensed Financial Statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS 8
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 11
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 12
ITEM 2. CHANGES IN SECURITIES 12
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 12
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 12
ITEM 5. OTHER INFORMATION 14
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 14
SIGNATURES 15
</TABLE>
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BOLDER TECHNOLOGIES CORPORATION
CONDENSED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
2000 1999
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<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 9,958,583 $ 17,651,373
Available-for-sale securities 6,841,632 4,978,850
Trade accounts receivable, net 867,787 1,833,261
Inventories:
Raw materials 1,624,404 946,180
Work-in-process 389,586 435,747
Finished Goods 4,805,740 274,612
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6,819,730 1,656,539
Other current assets 128,578 251,710
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TOTAL CURRENT ASSETS 24,616,310 26,371,733
Property and equipment, at cost, net 22,182,969 21,162,603
Other assets, net 582,978 579,541
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TOTAL ASSETS $ 47,382,257 $ 48,113,877
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LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued liabilities $ 4,952,878 $ 4,405,328
Deferred revenue 43,750 35,000
Notes and capital leases, current portion 2,582,937 2,122,108
------------ ------------
TOTAL CURRENT LIABILITIES 7,579,565 6,562,436
Notes and capital leases, net of current portion 5,321,871 6,736,723
Commitments and contingencies
Stockholders' equity:
Convertible, redeemable preferred stock, $0.001 par value, 5,000,000
shares authorized; 325,000 issued and outstanding at June 30, 2000 and
December 31, 1999, with a liquidation and redemption value of
$16,250,000 15,761,477 15,653,939
Common Stock, $.001 par value, 25,000,000 shares authorized; 17,234,757
and 14,577,826 shares issued at June 30, 2000 and December 31, 1999,
respectively 17,235 14,578
Treasury stock, $.001 par common stock, 33,333
shares at June 30, 2000 and December 31, 1999 (50,000) (50,000)
Deferred compensation (875,356) (1,069,887)
Additional paid-in capital 82,481,777 72,989,247
Accumulated deficit (62,854,312) (52,723,159)
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TOTAL STOCKHOLDERS' EQUITY 34,480,821 34,814,718
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 47,382,257 $ 48,113,877
============ ============
</TABLE>
See accompanying notes
3
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BOLDER TECHNOLOGIES CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------------ ------------------------------
2000 1999 2000 1999
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<S> <C> <C> <C> <C>
REVENUES
Product sales, net $ 641,311 $ 53,562 $ 861,108 $ 70,682
Research and development services and royalties 43,749 35,001 78,750 99,325
------------ ------------ ------------ ------------
685,060 88,563 939,858 170,007
COST OF REVENUES 2,397,562 132,524 4,397,059 195,139
------------ ------------ ------------ ------------
(1,712,502) (43,961) (3,457,201) (25,132)
------------ ------------ ------------ ------------
OPERATING EXPENSES
Research and development 711,022 2,276,551 1,457,930 4,318,573
General and administrative 1,311,053 941,235 2,940,277 1,695,658
Selling and marketing 1,132,407 555,571 2,128,845 933,277
------------ ------------ ------------ ------------
3,154,482 3,773,357 6,527,052 6,947,508
------------ ------------ ------------ ------------
LOSS FROM OPERATIONS (4,866,984) (3,817,318) (9,984,253) (6,972,640)
OTHER INCOME (EXPENSE)
Interest income 189,375 94,249 418,349 209,428
Interest expense (277,685) (335,589) (565,249) (679,754)
------------ ------------ ------------ ------------
NET LOSS (4,955,294) (4,058,658) (10,131,153) (7,442,966)
------------ ------------ ------------ ------------
Dividend on preferred stock (365,625) (378,225) (731,250) (756,450)
Accretion of preferred stock offering costs (53,769) (53,769) (107,538) (107,538)
------------ ------------ ------------ ------------
NET LOSS ALLOCABLE TO COMMON STOCKHOLDERS $ (5,374,688) $ (4,490,652) $(10,969,941) $ (8,306,954)
============ ============ ============ ============
Basic and diluted net loss per share $ (0.37) $ (0.43) $ (0.75) $ (0.83)
============ ============ ============ ============
Shares used in computing basic and diluted
net loss per share 14,647,979 10,340,043 14,603,610 10,016,418
============ ============ ============ ============
</TABLE>
See accompanying notes.
4
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BOLDER TECHNOLOGIES CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
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2000 1999
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OPERATING ACTIVITIES
Net loss $(10,131,153) $ (7,442,966)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization 966,368 639,948
Recognition of deferred compensation 194,532 --
Changes in deferred revenue 8,749 --
Changes in operating assets and liabilities (3,525,933) 104,254
------------ ------------
NET CASH USED IN OPERATING ACTIVITIES (12,487,437) (6,698,764)
------------ ------------
INVESTING ACTIVITIES
Purchase of short term investments (2,831,595) (2,922,116)
Sale of short term investments 968,813 6,055,456
Purchases of property and equipment (1,940,548) (1,501,744)
Patent costs (50,727) (110,248)
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NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (3,854,057) 1,521,348
------------ ------------
FINANCING ACTIVITIES
Proceeds from issuance of common stock 10,202,742 7,803,811
Stock issuance costs (600,016) (275,241)
Payments on notes payable and capital leases payable (954,022) (705,133)
------------ ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 8,648,704 6,823,437
------------ ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (7,692,790) 1,646,021
Cash and cash equivalents, beginning of period 17,651,373 962,453
------------ ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 9,958,583 $ 2,608,474
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest $ 574,867 $ 688,240
============ ============
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING
AND FINANCING ACTIVITIES
Accretion of preferred stock offering costs $ 107,538 $ 107,538
============ ============
Preferred stock dividend accrual $ 731,250 $ 756,450
============ ============
Preferred stock dividends paid in common stock $ 731,250 $ 756,450
============ ============
</TABLE>
See accompanying notes.
5
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BOLDER TECHNOLOGIES CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999 (UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The interim financial information of BOLDER Technologies Corporation (the
"Company" or "BOLDER") as of and for the three and six-month periods ended June
30, 2000 and 1999 is unaudited, but includes all adjustments (consisting only of
normal recurring entries) which the Company's management believes to be
necessary for the fair presentation of financial position, results of operations
and cash flows for the periods presented. The accompanying interim financial
statements should be read in conjunction with the financial statements and notes
thereto for the year ended December 31, 1999 included in the Company's Annual
Report on Form 10-K. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to the Securities
and Exchange Commission rules and regulations. Interim results of operations for
the three and six-month periods ended June 30, 2000 and 1999 are not necessarily
indicative of operating results to be expected for the full year.
At June 30, 2000, securities that have been excluded from basic and diluted net
loss per share because they would be antidilutive include 2,586,128 outstanding
options to purchase the Company's common stock, 390,102 outstanding warrants to
purchase the Company's common stock and 325,000 shares of convertible,
redeemable preferred stock, which are convertible into 1,083,333 shares of
common stock.
In December 1999, the Securities and Exchange Commission staff released Staff
Accounting Bulletin No. 101, "Revenue Recognition" ("SAB 101"). SAB 101 provides
interpretive guidance on the recognition, presentation and disclosure of revenue
in financial statements. The accounting impact of SAB 101 is required to be
determined no later than the Company's fourth fiscal quarter of 2000. If the
Company determines that its revenue recognition policies must change to be in
compliance with SAB 101, the implementation of SAB 101 will require the Company
to report the impact of this change as a cumulative effect of a change in
accounting principle as if SAB 101 had been implemented on January 1, 2000. The
Company is currently reviewing SAB 101 to determine what impact, if any, the
adoption of SAB 101 will have on its financial position and results of
operations. Implementation guidelines for this standard could lead to
unanticipated changes in the Company's current revenue recognition policies.
Such changes could affect the timing of the Company's future revenue and results
of operations.
In March 2000, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 44, "Accounting for Certain Transactions Involving Stock
Compensation" ("FIN No. 44"). FIN No. 44 clarifies the application of APB No. 25
for certain issues related to equity based instruments issued to employees. FIN
No. 44 is effective on July 1, 2000, except for certain transactions, and will
be applied on a prospective basis. Management believes that FIN No. 44 will not
have a significant impact on its financial statements.
In May 2000, the Emerging Issues Task Force ("EITF") issued EITF Issue No. 00-10
"Accounting for Shipping and Handling Fees and Costs" ("EITF No. 00-10"). EITF
No. 00-10 provides guidance on the classification of amounts billed to a
customer in a sale transaction related to shipping and handling. The consensus
is required to be applied no later than the Company's fourth fiscal quarter of
2000. Upon application, comparative financial statements for prior periods will
be reclassified to comply with the classification guidelines of EITF No. 00-10.
Management believes that EITF No. 00-10 will not have a significant impact on
its financial statements.
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In May 2000, the EITF issued EITF Issue No. 00-14 "Accounting for Certain Sales
Incentives" ("EITF No. 00-14"). EITF No. 00-14 provides guidance on the
recognition, measurement, and income statement classification for sales
incentives offered to customers that can be used in, or that are exercisable by
a customer as a result of, a single exchange transaction. The consensus is
required to be applied no later than the Company's fourth fiscal quarter of
2000. Upon application, comparative financial statements for prior periods will
be reclassified to comply with the classification guidelines of EITF No. 00-14.
Management believes that EITF No. 00-14 will not have a significant impact on
its financial statements.
7
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BOLDER TECHNOLOGIES CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Except for the historical information contained herein, this report may contain
forward-looking statements that involve risks and uncertainties, including
manufacturing risks associated with implementing new process technology,
achieving and maintaining commercial-scale manufacturing levels, achieving
consistent yields and quality, uncertainty of market acceptance and the timing
of market acceptance, as well as other risks detailed from time to time in our
filings with the Securities and Exchange Commission, including our registration
statement on Form S-3 filed on July 28, 2000 and the Form 10-K filed March 29,
2000. These risks (i) have materially and adversely affected, and may in the
future materially and adversely affect, our results and (ii) have caused and may
in the future cause such results to differ materially from those expressed in
any forward-looking statements made by us.
OVERVIEW
Since our inception in March 1991 until the launch of our first commercial
product in the second half of 1999, we were a development stage company,
principally engaged in the research and development of our Thin Metal Film
("TMF(R)") battery technology, to which we have devoted significant resources.
In May 1997, we moved to a new 127,000 square foot leased manufacturing facility
and corporate headquarters in Golden, Colorado. We believe this facility will
accommodate multiple production lines and all of our other operations. In the
third quarter of 1997, we installed our first high-volume manufacturing line,
designed to annually produce approximately four million 1 Ah cells. For
approximately the next year, we focused most of our resources on qualifying the
line for commercial production. In the fourth quarter of 1998, we qualified our
production line and introduced our 1 Ah cell, which can be a modular building
block for various battery packs.
Upon qualifying the production line and introducing our 1 Ah cell, our focus
shifted to the design, manufacture, and introduction of products based on our
TMF technology. On August 5, 1999, we introduced SECURESTART(TM), An instant
engine starter which employs our TMF technology and, specifically, the 1 Ah
cell. In August 1999, we entered into an agreement with Sears, Roebuck to supply
SECURESTART(TM) to approximately 2,000 Sears' stores. We began commercial
shipments of SECURESTART(TM) in October 1999, and SECURESTART(TM) is currently
available in the majority of Wal-Mart stores, Target stores, Sears Mall, Sears
Dealer and Sears Hardware stores, G. I. Joe Auto and Sporting Goods, The
Hardware Stores in Michigan and Home Hardware, the largest hardware chain in
Canada. In April, we introduced SECURESTART(TM) Marine, which targets the
consumer boat market and offers special corrosion-proof features.
SECURESTART(TM) Marine is currently available in West Marine, Barclay Marine
Distributor and Land N' Sea. Our two SECURESTART(TM) products are also available
through a variety of catalogs, including Sears Craftsman, Overton's, and West
Marine. We believe that the majority of our near-term revenues will be generated
from sales of these two SECURESTART(TM) products.
Our fourth quarter 1999 shipments to Sears included stocking orders in
anticipation of the holiday gift-giving period and the winter driving season. In
addition, we purposely delayed adding other major retailers to be assured of
meeting our product obligations to Sears. For both of these reasons, we expected
and realized lower first quarter 2000 revenues than in the fourth quarter 1999
period. Second quarter 2000 revenues were approximately three times the level of
first quarter 2000, but still less than fourth quarter 1999 revenues.
Because of the seasonality factors influencing consumer demand for
SECURESTART(TM) Portable Jump Starter for autos, we expect considerably higher
sales of this product in the second half of 2000 than in the first half. Also,
we expect
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second half 2000 revenues to be considerably above second half 1999 revenues of
$1.8 million, as more distribution outlets come on line.
Inventories increased to $6.8 million at June 30, 2000 from $4.3 million at
March 31, 2000. Some additional increase in inventories will likely occur in the
early part of the third quarter as we continue manufacturing SECURESTART(TM)
units to meet anticipated demand in the second half of 2000. If sales volumes
and/or average selling prices during the second half of 2000 are too low to
allow us to substantially recover our investment in inventories, we may be
required to revalue certain inventories and incur associated charges, which
could be material, in the statement of operations.
We believe that the task of improving the yield of our first production line,
the efficiency of the overall manufacturing process and the performance of our
TMF products will be an ongoing activity. Additional modifications will be
required from time to time to improve the production capability of our
production line. Similarly, changes in the design of our products will be
required from time to time in order to improve product performance.
In June 1995, we established a joint venture (the "Joint Venture") with Johnson
Controls, Inc. ("JCI") to develop high-volume manufacturing technology for TMF
batteries, manufacture TMF batteries for sale by both JCI and ourselves, and
pursue hybrid electric vehicle battery development opportunities for TMF
batteries. In 1997, having substantially completed the primary objective of
developing the high-volume manufacturing technology, the Joint Venture was
terminated and we entered into a new relationship with JCI. Under the new
relationship, JCI and we are separately developing TMF battery-manufacturing
facilities. We granted royalty-bearing licenses to JCI, certain of which are
subject to minimum royalties and minimum performance criteria. These licenses
give JCI the sole and exclusive right to sell TMF batteries for use as primary
starting batteries in automobiles and trucks until July 2001. We have also
entered into a cross supply agreement with JCI pursuant to which each of us has
committed to supply the other with minimum quantities of TMF battery products
for several years.
We believe that our results of operations to date may not be indicative of
results in future periods. Future operating results may be affected by a wide
range of factors and may fluctuate significantly from period to period.
RESULTS OF OPERATIONS
As we transitioned in the second half of 1999 from primarily development
activities to manufacturing and sales activities, the classification of certain
functions has changed in our statement of operations. For example, activities
which were previously performed prior to the third quarter 1999 in support of
our research and development ("R&D") efforts (and therefore classified as R&D
expenses) have now evolved to support our manufacturing effort and are thus now
classified as cost of revenues. Additionally, because our production volume of
batteries and other products is not yet sufficient to allow absorption of the
manufacturing overhead, we have incurred a loss on gross margin, which can be
expected to continue until production volumes are at significantly higher
levels.
Revenues from product sales increased to $641,311 and $861,108 from $53,562 and
$70,682 for the three and six-months ended June 30, 2000 and 1999, respectively.
Product sales increased due to the introduction of SECURESTART(TM), the instant
engine starter product, in the second half of 1999 and the introduction of the
marine version of SECURESTART(TM) at the end of the first quarter 2000.
R&D services revenues and royalties increased to $43,749 from $35,001 for the
three-month periods ended June 30, 2000 and 1999, respectively, due to an
increase in the royalty received from JCI, which has licensed our TMF technology
for automotive applications. For the six-month periods ended June 30, 2000 and
1999, R&D services revenue and royalties decreased to $78,750 from $99,325,
respectively. The decrease is due to revenues of $29,324 from a customer-funded
product development program which was completed during the first quarter of
1999.
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Cost of revenues increased to $2,397,562 and $4,397,059 from $132,524 and
$195,139 for the three and six-month periods ended June 30, 2000 and 1999,
respectively. Certain production line functions and associated expenses that
were previously related to R&D activities in the 1999 periods were involved in
supporting the commercial manufacture of the 1 Ah cell in 2000. The 1 Ah cells
produced in 2000 were primarily used for assembly into SECURESTART(TM) units,
which were shipped to customers or are classified at June 30, 2000 as inventory.
Also, cost of revenues increased in the 2000 period due to higher production
volumes, which resulted in increases in labor, supplies and equipment expenses
as compared to the previous year. In addition, the 2000 production levels do not
allow full absorption of fixed manufacturing overhead expenses, and the
unabsorbed portion is included in cost of revenues in the current period.
R&D expenses decreased to $711,022 and $1,457,930 from $2,276,551 and $4,318,573
for the three and six-month periods ended June 30, 2000 and 1999, respectively.
The decreases in 2000 were mainly due to the change in classification of certain
production line functions and associated expenses from R&D expenses to cost of
revenues, as explained previously above. Absent similar production line
functions and associated expenses of $1,180,637 and $2,204,943 in the three and
six-month 1999 periods, respectively, that were properly classified as R&D
expenses, the remaining R&D expenses for product improvement and new product
development were $1,095,914 and $2,113,630 for the three and six-month periods,
respectively. The decreases to $711,022 and $1,457,930 in the 2000 periods were
primarily due to reductions in staffing levels and related expenses in the 2000
periods, as well as non-recurring expenses incurred in the 1999 periods relating
to the development of the SECURESTART(TM) unit.
General and administrative expenses increased to $1,311,053 and $2,940,277 for
the three and six-month periods ended June 30, 2000, respectively, from $941,235
and $1,695,658 for the same periods in the prior year. Most of the increases in
the 2000 periods resulted from increases in legal fees, compensation, recruiting
and business insurance expenses compared to the prior year periods.
Selling and marketing expenses increased to $1,132,407 and $2,128,845 for the
three and six-month periods ended June 30, 2000, respectively, from $555,571 and
$933,277 for the same periods in the prior year. The increases in 2000 were
primarily due to increased staffing levels, as well as advertising and
promotional activities associated with the Company's new SECURESTART(TM)
products.
Interest income increased to $189,375 and $418,349 from $94,249 and $209,428 for
the three and six-month periods ended June 30, 2000 and 1999, respectively. The
increases were due to higher average invested cash balances in the 2000 periods
than in the 1999 periods. In addition, interest rates earned were slightly
higher during the 2000 periods than in the prior year periods.
Interest expense decreased to $277,685 and $565,249 from $335,589 and $679,754
for the three and six-month periods ended June 30, 2000 and 1999, respectively.
The decreases in 2000 were due to lower average debt balances in the 2000
periods than in the prior year periods.
LIQUIDITY AND CAPITAL RESOURCES
From our inception, we have financed our operations and met our capital
requirements primarily through private and public offerings of our equity
securities, raising net proceeds of approximately $96 million from sales of
these securities. Included in this amount are net proceeds of approximately $9.4
million received from a private placement of 2,461,539 shares of BOLDER's common
stock with the State of Wisconsin Investment Board in June 2000. In 1997 and
1998, we received net proceeds of approximately $12.3 million from a loan
agreement with Transamerica Business Credit Corporation. The remaining loan
balance was approximately $7.9 million as of June 30, 2000. At June 30, 2000,
our balances of cash, cash equivalents, and available-for-sale securities
totaled approximately $16.8 million, compared to approximately $22.6 million at
December 31, 1999.
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We believe that our current balances of cash and cash equivalents provide
adequate capital resources to fund our operations and working capital needs at
least through the end of 2000. We will require substantial additional capital
resources beyond 2000 to provide funds for anticipated manufacturing capacity
expansion, product development, working capital, to fund operations until we
achieve profitability and other general corporate purposes. Our inability to
obtain required capital when needed would have a material adverse effect on our
business, results of operations and financial condition, as we could be required
to reduce our levels of operations, delay product development or other actions
to diminish the amount of cash used in our business.
YEAR 2000
We rely on software in our information systems and manufacturing equipment. Most
of this equipment and software was installed and written within the past three
years. The Company has completed an inventory and tested its critical control
systems, computers, and application software. Prior to December 31, 1999, we
tested and validated each of the internal systems, equipment and software. The
Company has found these to be compliant, has applied supplier fixes, or replaced
the equipment. The Company implemented processes to identify and evaluate the
Y2K status of newly acquired equipment, and evaluated supplier and customer Y2K
compliance.
To date, we have had no significant problems related to Year 2000 issues. We
believe the remaining risks of Year 2000 issues are primarily external, due to
the difficulty of validating key third parties' readiness for Year 2000. The
Company has sought confirmation of such compliance and seeks relationships that
are compliant. The Company maintains contingency plans for each of these key
relationships as they arise, such as second sourcing, purchasing additional
inventory, and creating joint contingency plans for Year 2000 situations with
each relationship.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable because the Company has only fixed rate debt and no derivatives.
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BOLDER TECHNOLOGIES CORPORATION
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
From time to time we are subject to legal proceedings arising
out of our operations. In September 1999, Century Mfg. Co.
("Century"), an affiliate of Pentair, Inc., filed a complaint
against us in the United States District Court for the
District of Minnesota. Century, which manufactures a line of
portable power and jump-starting products, alleges among other
things that we have misappropriated Century's trade secrets
and breached a confidentiality agreement in producing and
manufacturing SECURESTART(TM).
Century later filed a separate lawsuit alleging that the
SECURESTART(TM) product infringes upon a patent issued to
Century in December 1999. That suit was consolidated with the
first action, and now all of Century's claims are pending in
the first action. We have answered Century's complaint and
asserted counterclaims for Century's misappropriation of our
own trade secrets and confidential information. We believe
that Century's claims are without merit, intend to defend
against them vigorously, and intend to press vigorously our
counterclaims.
ITEM 2. CHANGES IN SECURITIES.
In June 2000, the Company issued 2,461,539 shares of common
stock in a private placement to the State of Wisconsin
Investment Board at a price per share of $4.0625, payable in
cash. The sale and issuance of these shares were exempt from
registration pursuant to Rule 506 of Regulation D promulgated
under the Securities Act of 1933, as amended.
In June 2000, the Company issued a warrant to Donaldson,
Lufkin & Jenrette Securities Corporation to purchase 98,461
shares of BOLDER's common stock at an exercise price of
$4.0625 per share. The warrant expires on June 27, 2005.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Annual Meeting of Stockholders was held on June 1, 2000.
Proxies for the meeting were solicited by management; there
was no solicitation in opposition to management's nominees for
Class I Directors set forth in the Proxy Statement and all
such nominees were elected. The stockholders approved the
Company's 1996 Employee Stock Purchase Plan, as amended. The
stockholders also approved management's proposal to ratify the
selection of Arthur Andersen LLP as independent accountants of
the Company for the fiscal year ending December 31, 2000.
Each holder of record of common stock was entitled to one vote
per share, and each holder of record of Series A Preferred
Stock was entitled to 3.33 votes per share. All voting
tabulations below include the effect of both the common stock
and Series A Preferred Stock, based on the relative voting
rights as noted.
a) The following details the voting results with respect
to each nominee for office, including the number of
shares not voted at all ("not present") and the
proxies that brokers did not vote in full ("broker
non-voted").
12
<PAGE> 13
<TABLE>
<CAPTION>
NOMINEE COMMON STOCK
------- ------------
<S> <C>
Daniel S. Lankford
For 12,175,824
Against -0-
Withhold 35,945
Not Present 3,437,152
Broker non-voted -0-
----------
Total Eligible Shares 15,648,921
==========
</TABLE>
<TABLE>
<CAPTION>
NOMINEE COMMON STOCK
------- ------------
<S> <C>
Carl S. Stutts
For 12,175,824
Against -0-
Withhold 35,945
Not Present 3,437,152
Broker non-voted -0-
----------
Total Eligible Shares 15,648,921
==========
</TABLE>
b) The following details the voting results with respect
to the proposal to approve the Company's 1996
Employee Stock Purchase Plan, as amended, to increase
the aggregate number of shares of common stock
authorized for issuance thereunder by 40,000 shares.
<TABLE>
<S> <C>
For 11,606,966
Against 583,290
Abstain 21,513
Broker non-voted -0-
Not present 3,437,152
----------
Total Eligible Shares 15,648,921
==========
</TABLE>
c) The following details the voting results with respect
to ratifying the selection of Arthur Andersen LLP as
independent accountants for the fiscal year ending
December 31, 2000.
<TABLE>
<S> <C>
For 12,191,577
Against 14,109
Abstain 6,083
Not present 3,437,152
Broker non-voted -0-
----------
Total Eligible Shares 15,648,921
==========
</TABLE>
13
<PAGE> 14
ITEM 5. OTHER INFORMATION.
Notice of Deadlines for Stockholder Proposals for 2001 Proxy
Statement.
The deadlines for submitting a stockholder proposal for
inclusion in the Company's proxy statement and form of proxy
for the Company's 2001 Annual Meeting of Stockholders pursuant
to Rule 14a-8, "Shareholder Proposals," of the Securities and
Exchange Commission's Regulation 14A is January 1, 2001.
The date after which notice of a stockholder proposal or a
stockholder nomination for a director submitted outside the
procedures of Rule 14a-8 is considered untimely is April 2,
2001.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBIT DESCRIPTIONS OF DOCUMENTS
27 -- Financial Data Schedule.
(b) There were no reports on Form 8-K for the three
months ended June 30, 2000.
14
<PAGE> 15
BOLDER TECHNOLOGIES CORPORATION
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
BOLDER Technologies Corporation
Date: August 4, 2000 By: /s/ Roger F. Warren
-------------------- --------------------
Roger F. Warren
Chief Executive Officer, President and
Chairman of the Board
By: /s/ Joseph F. Fojtasek
----------------------
Joseph F. Fojtasek
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
15
<PAGE> 16
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
