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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 September 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
incorporation or organization) Identification No.)
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 17,214,194
------------------------------ ---------------------------------
(Class) (Outstanding at November 1, 2000)
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BOLDER TECHNOLOGIES CORPORATION
TABLE OF CONTENTS
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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 September 30, 2000 and December 31, 1999 3
Condensed Statements of Operations for the three- and nine-month periods
ended September 30, 2000 and 1999 4
Condensed Statements of Cash Flows for the nine-month periods ended
September 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 13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 13
SIGNATURES 14
</TABLE>
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BOLDER TECHNOLOGIES CORPORATION
CONDENSED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
2000 1999
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<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 967,978 $ 17,651,373
Available-for-sale securities 6,887,521 4,978,850
Trade accounts receivable, net 1,441,313 1,833,261
Inventories:
Raw materials 2,476,384 946,180
Work-in-process 653,301 435,747
Finished goods 4,004,170 274,612
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7,133,855 1,656,539
Other current assets 181,651 251,710
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TOTAL CURRENT ASSETS 16,612,318 26,371,733
Property and equipment, at cost, net 22,011,526 21,162,603
Other assets, net 609,111 579,541
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TOTAL ASSETS $ 39,232,955 $ 48,113,877
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued liabilities $ 2,673,859 $ 4,405,328
Deferred revenue 52,500 35,000
Notes and capital leases, current portion 2,417,721 2,122,108
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TOTAL CURRENT LIABILITIES 5,144,080 6,562,436
Notes and capital leases, net of current portion 4,912,970 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 September 30, 2000
and December 31, 1999, with a liquidation and redemption value of
$16,250,000 16,180,871 15,653,939
Common Stock, $.001 par value, 25,000,000 shares authorized; 17,246,468
and 14,577,826 shares issued at September 30, 2000 and December 31,
1999,
respectively 17,247 14,578
Treasury stock, $.001 par common stock, 33,333
shares at September 30, 2000 and December 31, 1999 (50,000) (50,000)
Deferred compensation (778,090) (1,069,887)
Additional paid-in capital 82,074,210 72,989,247
Accumulated deficit (68,268,333) (52,723,159)
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TOTAL STOCKHOLDERS' EQUITY 29,175,905 34,814,718
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 39,232,955 $ 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 NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------------- ----------------------------
2000 1999 2000 1999
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<S> <C> <C> <C> <C>
REVENUES
Product sales, net $ 1,391,776 $ 20,803 $ 2,252,884 $ 91,485
Research and development services and royalties 43,750 35,001 122,500 134,326
------------ ------------ ------------ ------------
1,435,526 55,804 2,375,384 225,811
COST OF REVENUES 3,847,076 1,413,901 8,244,135 1,609,040
------------ ------------ ------------ ------------
(2,411,550) (1,358,097) (5,868,751) (1,383,229)
------------ ------------ ------------ ------------
OPERATING EXPENSES
Research and development 555,590 1,190,486 2,013,520 5,509,059
General and administrative 1,077,699 914,904 4,017,976 2,610,562
Selling and marketing 1,086,799 652,193 3,215,644 1,585,470
------------ ------------ ------------ ------------
2,720,088 2,757,583 9,247,140 9,705,091
------------ ------------ ------------ ------------
LOSS FROM OPERATIONS (5,131,638) (4,115,680) (15,115,891) (11,088,320)
OTHER INCOME (EXPENSE)
Interest income 181,130 142,399 599,479 351,827
Interest expense (250,667) (334,191) (815,916) (1,013,945)
Gain (loss) on disposition of fixed assets (212,846) -- (212,846) --
------------ ------------ ------------ ------------
NET LOSS (5,414,021) (4,307,472) (15,545,174) (11,750,438)
------------ ------------ ------------ ------------
Dividend on preferred stock (365,625) (378,225) (1,096,875) (1,134,675)
Accretion of preferred stock offering costs (53,769) (53,769) (161,307) (161,307)
------------ ------------ ------------ ------------
NET LOSS ALLOCABLE TO COMMON STOCKHOLDERS $ (5,833,415) $ (4,739,466) $(16,803,356) $(13,046,420)
============ ============ ============ ============
Basic and diluted net loss per share $ (0.34) $ (0.40) $ (1.09) $ (1.23)
============ ============ ============ ============
Shares used in computing basic and diluted
net loss per share 17,209,496 11,790,507 15,478,579 10,614,280
============ ============ ============ ============
</TABLE>
See accompanying notes.
4
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BOLDER TECHNOLOGIES CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
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2000 1999
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OPERATING ACTIVITIES
Net loss $(15,545,174) $(11,750,438)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization 1,419,998 1,022,536
Loss on disposition of fixed assets 212,846 --
Recognition of deferred compensation 291,797 --
Changes in deferred revenue 17,500 --
Changes in operating assets and liabilities (6,742,022) 354,531
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NET CASH USED IN OPERATING ACTIVITIES (20,345,055) (10,373,371)
------------ ------------
INVESTING ACTIVITIES
Purchase of short term investments (5,873,146) (2,922,116)
Sale of short term investments 3,964,475 9,073,850
Purchases of property and equipment (2,418,273) (2,635,937)
Patent costs (97,820) (196,513)
------------ ------------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (4,424,764) 3,319,284
------------ ------------
FINANCING ACTIVITIES
Proceeds from issuance of common stock 10,240,678 13,221,444
Payments on issuance of dividends -- (26)
Stock issuance costs (626,114) (349,487)
Payments on notes payable and capital leases payable (1,528,140) (1,163,791)
------------ ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 8,086,424 11,708,140
------------ ------------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (16,683,395) 4,654,053
Cash and cash equivalents, beginning of period 17,651,373 962,453
------------ ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 967,978 $ 5,616,506
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest $ 836,836 $ 1,017,362
============ ============
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING
AND FINANCING ACTIVITIES
Accretion of preferred stock offering costs $ 161,307 $ 161,307
============ ============
Preferred stock dividend accrual $ 1,096,875 $ 1,134,675
============ ============
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
SEPTEMBER 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 nine-month periods ended
September 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 nine-month periods ended
September 30, 2000 and 1999 are not necessarily indicative of operating results
to be expected for the full year.
At September 30, 2000, securities that have been excluded from basic and diluted
net loss per share because they would be antidilutive include 2,527,202
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. In
addition, in accordance with APB 20 such implementation could result in
previously reported interim results being restated to reflect the
implementation. 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
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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.
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, Pro Hardware, G. I. Joe's Auto and Sporting
Goods, Tool Warehouse 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 at West Marine and Bass Pro Shops
retail outlets. It is also distributed by several wholesale marine distributors
who service thousands of independent marine dealers and marinas. In the second
quarter we also introduced our SECURESTART(TM) Pro 900XLT Jump Starter to the
automotive tool and parts sector bringing on national and regional distributors
including ISN, Medco, Topline Tools and Casco Distributing. In September 2000
the company began shipping its SECURESTART(TM) jump starter under the Sears'
Craftsman label. Our 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 sale
of SECURESTART(TM) products.
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,
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we expect 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 $7.1 million at September 30, 2000 from $6.8 million at
June 30, 2000. This increase in inventory resulted from continued manufacturing
of SECURESTART(TM) units to meet anticipated demand in the fourth quarter of
2000. If sales volumes and/or average selling prices during the fourth quarter
of 2000 are below our forecasts and 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 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 $1,391,776 and $2,252,884 from $20,803
and $91,485 for the three and nine-months ended September 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,
the introduction of the marine version of SECURESTART(TM) at the end of the
first quarter 2000, the introduction of the professional version of the
SECURESTART(TM) in the second quarter 2000, and the introduction of the Sears
Craftsman Portable Jump Starter in the third quarter of 2000. We accrued a
return reserve of approximately $390,000 in the third quarter 2000 to cover
potential returns.
R&D services revenues and royalties increased to $43,750 from $35,001 for the
three-month periods ended September 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 nine-month periods ended September 30, 2000
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and 1999, R&D services revenue and royalties decreased to $122,500 from
$134,326, 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.
Cost of revenues increased to $3,847,076 and $8,244,135 from $1,413,901 and
$1,609,040 for the three and nine-month periods ended September 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 September 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. We also made charges to expense in the third quarter of 2000 of
approximately $880,000 for inventory revaluation and rework.
R&D expenses decreased to $555,590 and $2,013,520 from $1,190,486 and $5,509,059
for the three and nine-month periods ended September 30, 2000 and 1999,
respectively. These decreases were 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, as well as reductions in staffing
levels and related expenses in the 2000 periods, and non-recurring expenses
incurred in the 1999 periods relating to the development of the SECURESTART(TM)
unit.
General and administrative expenses increased to $1,077,699 and $4,017,976 for
the three and nine-month periods ended September 30, 2000, respectively, from
$914,904 and $2,610,562 for the same periods in the prior year. Most of the
increases in the 2000 periods resulted from increases in legal fees,
compensation, severance, recruiting and business insurance expenses compared to
the prior year periods.
Selling and marketing expenses increased to $1,086,799 and $3,215,644 for the
three and nine-month periods ended September 30, 2000, respectively, from
$652,193 and $1,585,470 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 $181,130 and $599,479 from $142,399 and $351,827
for the three and nine-month periods ended September 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 $250,667 and $815,916 from $334,191 and $1,013,945
for the three and nine-month periods ended September 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 net proceeds from public and private sales of
equity and debt securities and to a lesser extent through cash flow generated by
our operations. Through September 30, 2000, we have raised net proceeds of
approximately $96 million from the sales of our equity. In 1997 and 1998, we
received net proceeds of approximately $12.3 million from a loan agreement with
Transamerica Business Credit Corporation. At September 30, 2000, the remaining
loan balance was approximately $7.3 million. Our business is subject to
substantial risks associated with a rapidly evolving marketplace, including the
need for additional capital, technological change, intense competition, and
dependence on key personnel. As of September 30, 2000, we had cash, cash
equivalents and short-term investments of approximately $7.9 million, and we had
working capital of approximately $11.5 million, a decrease of $8.3 million from
$19.8 million of working capital at December 31, 1999. During the first nine
months of 2000, we recorded a net loss allocable to common stockholders of
approximately $16.8 million, and we have an accumulated deficit of $68.3 million
as of September 30, 2000.
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During the first nine months of 2000, we pursued a strategy of aggressive growth
in the number of distributors carrying our SecureStart product, as well as the
creation of new products based upon this product design. We believe that this
strategy is resulting in new customers, expanded distribution and will lead to
increased revenue in the future. To pursue this strategy, we expended
substantial funds in marketing, inventory buildup, and overall organizational
infrastructure enhancement in anticipation of growth in our revenue and customer
base. In order to deliver the products that we expect to sell in the future, we
were required to make these expenditures in advance of the resultant revenue.
During the nine months ended September 30, 2000, we used $20.3 million of cash
in operations (compared to $10.4 million used in operations in the prior year
period), $4.4 million in investing activities (compared to $3.3 million provided
by investing activities in the prior year period) and $8.1 million was provided
by financing activities (compared to $11.7 million provided by financing
activities in the prior year period).
We believe that our current balances of cash and cash equivalents provide
adequate capital resources to fund our operations and working capital needs
through at least the end of 2000. In June 2000, we raised net proceeds of
approximately $9.4 million with the State of Wisconsin Investment Board, and we
intend to raise an additional $10 to $15 million by the end of 2000 in order to
continue the execution of the Company's aggressive product rollout strategy.
Our management regularly evaluates financing alternatives for funding the
Company's growth plans. The Company has taken actions to manage its existing
cash and to provide for future cash needs. As we have previously disclosed in
prior filings, we will continue to require substantial additional funds beyond
2000 for anticipated manufacturing capacity expansion, product development,
working capital and other general corporate purposes and to fund operations
until we achieve profitability. Our inability to obtain required capital when
needed would have a material adverse effect on our business, results of
operations and financial condition, and we could be required to reduce our level
of operations, delay product development or other actions to diminish the amount
of cash used in our business.
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.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
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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
Exhibit 3(ii).1 Amended and Restated Bylaws of
the Company
Exhibit 4.1 Amendment to Rights Agreement
Exhibit 4.2 Amendment No. 2 to Rights
Agreement
Exhibit 4.3 Amendment No. 3 to Rights
Agreement
Exhibit 10.1 1996 Equity Incentive Plan of
Company, as amended through
September 30, 2000
Exhibit 10.2 1996 Employee Stock Purchase
Plan of Company, as amended
through September 30, 2000
Exhibit 27.1 Financial Data Schedule.
(b) There were no reports on Form 8-K for the three
months ended September 30, 2000.
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<PAGE> 14
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: November 13, 2000 By: /s/ Roger F. Warren
------------------- ---------------------------
Roger F. Warren
Chief Executive Officer,
President and Chairman of
the Board
By: /s/ Paul C. Kelly
--------------------------
Paul C. Kelly
Vice President and Chief
Financial Officer
(Principal Financial and
Accounting Officer)
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<PAGE> 15
INDEX TO EXHIBITS
<TABLE>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
Exhibit 3(ii).1 Amended and Restated Bylaws of the Company
Exhibit 4.1 Amendment to Rights Agreement
Exhibit 4.2 Amendment No. 2 to Rights Agreement
Exhibit 4.3 Amendment No. 3 to Rights Agreement
Exhibit 10.1 1996 Equity Incentive Plan of Company, as amended
through September 30, 2000
Exhibit 10.2 1996 Employee Stock Purchase Plan of Company, as
amended through September 30, 2000
Exhibit 27.1 Financial Data Schedule.
</TABLE>
