UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(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, 1998
--------
[ ] TRANSITION REPORT PURSUANT TO 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
------- -------
Commission file number 333-05744-LA
------------------------------------
ZAP POWER SYSTEMS
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
CALIFORNIA 94-3210624
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
117 Morris Street, Sebastopol, California 95472
- --------------------------------------------------------------------------------
(Address of principal executive offices)
(707) 824-4150
- ---------------------------
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No
---
(APPLICABLE ONLY TO CORPORATE ISSUERS)
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date. 2,639,622 shares of common
stock as of October 27, 1998
Transitional Small Business Disclosure Format Yes [ ] No [x]
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
ZAP POWER SYSTEMS
CONDENSED BALANCE SHEET
September 30,
1998
- --------------------------------------------------------------------------------
ASSETS
CURRENT ASSETS
Cash $ 556,400
Receivables 467,700
Inventories 606,400
Prepaid expenses and other assets 106,000
-----------
Total current assets 1,736,500
-----------
PROPERTY AND EQUIPMENT 188,400
-----------
OTHER ASSETS
Intangibles, net of accumulated amortization
of $6,100 44,800
Deposits 11,900
-----------
Total other assets 56,700
-----------
Total assets $ 1,981,600
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 408,800
Accrued liabilities and other expenses 43,000
Customer Deposits 37,600
Notes payable 533,400
Current maturities of long-term debt 1,200
Current maturities of obligations under capital leases 4,200
-----------
Total current liabilities 1,028,200
-----------
OTHER LIABILITIES
Obligations under capital leases, less current maturities 10,900
Long-Term Debt, less current maturities 16,200
Notes Payable, less current maturities 60,000
-----------
Total other liabilities 87,100
-----------
STOCKHOLDERS' EQUITY
Common stock, no par value; 10,000,000 shares
authorized, 2,639,422 shares issued and
outstanding 3,733,800
Accumulated deficit (2,867,500)
-----------
Total stockholders' equity 866,300
-----------
Total liabilities and stockholders' equity $ 1,981,600
===========
The accompanying notes are an integral part of these financial statements
2
<PAGE>
<TABLE>
ZAP POWER SYSTEMS
CONDENSED STATEMENTS OF OPERATIONS
<CAPTION>
Quarter ended September 30, Nine Months ended September 30,
1998 1997 1998 1997
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET SALES $ 1,229,700 $ 501,000 $ 2,554,600 $ 1,327,100
COST OF GOODS SOLD 778,500 328,400 1,684,900 1,035,100
----------- ----------- ----------- -----------
GROSS PROFIT 451,200 172,600 869,700 292,000
----------- ----------- ----------- -----------
OPERATING EXPENSES
Selling 255,700 159,500 665,400 424,900
General and administrative 225,600 136,700 608,000 500,900
Research and development 51,500 66,500 131,400 185,000
----------- ----------- ----------- -----------
532,800 362,700 1,404,800 1,110,800
----------- ----------- ----------- -----------
LOSS FROM OPERATIONS (81,600) (190,100) (535,100) (818,800)
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE)
Interest expense (4,500) (6,400) (10,800) (22,200)
Other (5,000) 4,200 (4,600) 9,500
----------- ----------- ----------- -----------
(9,500) (2,200) (15,400) (12,700)
----------- ----------- ----------- -----------
NET LOSS $ (91,100) $ (192,300) $ (550,500) $ (831,500)
=========== =========== =========== ===========
NET LOSS PER COMMON SHARE,
BASIC AND DILUTED $ (0.03) $ (0.08) $ (0.21) $ (0.37)
=========== =========== =========== ===========
WEIGHTED AVERAGE OF COMMON
SHARES OUTSTANDING 2,633,500 2,319,300 2,592,400 2,233,400
=========== =========== =========== ===========
<FN>
The accompanying notes are an integral part of these financial statements
</FN>
</TABLE>
3
<PAGE>
<TABLE>
ZAP POWER SYSTEMS
CONDENSED STATEMENTS OF CASH FLOWS
<CAPTION>
Nine months ended September 30,
1998 1997
- --------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (550,600) $ (831,400)
Adjustments to reconcile net loss to net cash
used by operating activities
Depreciation and amortization 58,300 46,000
Allowance for doubtful accounts (2,500)
Issuance of common stock for services rendered 3,000 67,800
Changes in:
Receivables (346,000) (140,300)
Inventories (339,900) (23,600)
Prepaid expenses (40,400) 29,200
Deposits (67,300) 166,000
Accounts payable 245,700 (107,800)
Accrued liabilities and other expenses (35,200) (27,500)
----------- -----------
Net cash used by operating activities (1,072,400) (824,100)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of equipment (80,100) (80,600)
Investment in subsidiaries (13,900)
Patent Defense (27,100) (13,100)
----------- -----------
Net cash used by investing activities (107,200) (107,600)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable 30,000
Increase in loans payable 517,500
Decrease in restricted cash 10,000
Sale of common stock, net of stock offering costs 558,000 1,000,400
Principal repayments on long-term debt (4,700) (9,400)
Payments on obligations under capital leases (11,800) (9,500)
Principal repayments on note payable (13,500) (122,000)
----------- -----------
Net cash provided by financing activities 1,045,500 899,500
----------- -----------
NET INCREASE/(DECREASE) IN CASH (134,100) (32,200)
CASH, beginning of period 690,500 161,600
----------- -----------
CASH, end of period $ 556,400 $ 129,400
=========== ===========
<FN>
The accompanying notes are an integral part of these financial statements
</FN>
</TABLE>
4
<PAGE>
ZAP POWER SYSTEMS
NOTES TO THE INTERIM UNAUDITED CONDENSED FINANCIAL STATEMENTS
(1) Basis of Presentation
The financial statements included in this Form 10-QSB have been prepared by the
Company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. 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 such rules and
regulations, although management believes the disclosures are adequate to make
the information presented not misleading. The results of operations for any
interim period are not necessarily indicative of results for a full year. These
statements should be read in conjunction with the financial statements and
related notes included in the Company's Annual Report on Form 10-KSB for the
year ended December 31, 1997.
The financial statements presented herein as of September 30, 1998, and for the
three months and nine months ended September 30, 1998 and September 30, 1997
reflect, in the opinion of management, all material adjustments consisting only
of normal recurring adjustments necessary for a fair presentation of the
financial position, results of operations and cash flow for the interim periods.
The net loss per common share is based on the weighted average number of common
shares outstanding in each period. Common stock equivalents associated with
stock options have been excluded from the weighted average shares outstanding
since the effect of these securities would be anti-dilutive.
(2) - RECEIVABLES
September 30, 1998
------------------
Trade accounts receivable $ 472,700
Less allowance for doubtful accounts (5,000)
-------------
$ 467,700
=============
(3) - INVENTORIES
September 30, 1998
------------------
Raw materials $ 445,500
Work-in-process 95,100
Finished goods 65,800
-------------
$ 606,400
=============
(4) - PROPERTY AND EQUIPMENT
September 30, 1998
------------------
Demonstration items $ 91,700
Machinery and equipment 72,900
Equipment under capital leases 45,900
Office furniture and fixtures 38,900
Computers 34,900
Leasehold improvements 25,400
Vehicle 56,200
-------------
365,900
Less accumulated depreciation and amortization (177,500)
-------------
$ 188,400
=============
5
<PAGE>
(5) - NOTES PAYABLE
September 30, 1998
------------------
Notes to stockholders, with interest at 10%; interest and
principal due when the notes mature in December
1999. The note holders have been issued warrants to
purchase, in the aggregate, 21,800 shares of common
stock at $5.25 per share through October, 1999. $ 93,600
Convertible secured promissory notes, with interest at 12%,
principal and interest is due when the notes mature
in March 1999. The note holders have the right,
upon completion of the term, to convert the notes
and any accrued interest into shares of the maker's
common stock at the average bid and ask price for
the ten (10) trading days immediately preceding the
completion of the Term; or $4.00 per share,
whichever is lower. $ 500,000
-----------
$ 593,600
===========
(6) - COMMON STOCK
In November of 1996 the Company commenced a direct public offering of its Common
Stock, offering for sale 500,000 shares at $5.25. During 1996, the Company sold
3,800 shares and received $19,900 in proceeds. In 1997, the Company sold an
additional 415,100 shares in connection with the direct public offering and
realized net proceeds of $1,990,900, net of offering related expenses of
$188,400. In total, the Company sold 84% of the shares offered for sale and
realized net proceeds of $2,010,600. The offering was completed in November
1997.
The Company has in process a second direct public offering of its Common stock
for sale 500,000 shares at $6.00 per share. The Company commenced this offering
in January 1998 and as of October 27, 1998 has sold 84,747 shares and realized
gross proceeds of $508,482. On February 27, 1998, the Company's Common stock
commenced trading on the OTC Bulletin Board under the stock symbol "ZAPP".
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Special Note Regarding Forward-Looking Statements
Certain statements in this Form 10-QSB, including information set forth
under this Item 2. "Management's Discussion and Analysis of Financial Condition
and Results of Operations" constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 (the "ACT"). ZAP
Power Systems (the "Company") desires to avail itself of certain "safe harbor"
provisions of the Act and is therefore including this special note to enable the
Company to do so. Forward-looking statements included in this Form 10-QSB or
hereafter included in other publicly available documents filed with the
Securities and Exchange Commission, reports to the Company's stockholders and
other publicly available statements issued or released by the Company involve
known and unknown risks, uncertainties, and other factors which could cause the
Company's actual results, performance (financial or operating) or achievements
to differ from the future results, performance (financial or operating) or
achievements expressed or implied by such forward looking statements. Such
future results are based upon management's best estimates based upon current
conditions and the most recent results of operations.
Overview
The Company designs, assembles, manufactures and distributes electric
bicycle power kits, electric bicycles and tricycles, and other low-power
electric transportation vehicles. Historically, unit sales have been
approximately 50% kits, 30% electric bicycles, and 20% electric scooters. Dollar
sales have been 30% kits, 35% electric bicycles, and 35% electric scooters.
6
<PAGE>
The Company sells its electric bicycles, kits, and scooters to retail
customers, international distributors, law enforcement agencies, electric
utility companies, bicycle dealerships and mail order catalogs. Net revenue is
net of returns. The Company sells to the mail order catalogs and selected
customers on credit with net 30-day terms. Many of the bicycle dealerships are
sold cash on delivery. The retail sales are primarily paid for with a credit
card or personal check before shipment of the product.
The Company manufactures an electric motor system that is sold as a kit
to be installed by the customer on their own bicycle. The Company also installs
the motor system on bicycles that the Company buys. The Company then sells the
complete electric bicycle to the customer. The Company purchases complete
bicycles from various bicycle manufacturers for use with the Company's electric
motor system from U.S. and Taiwan sources. The Company manufactures the electric
motor kit, which has approximately 62 unique parts. The manufacturing of the
electric motor kit and the installation of the motor systems to the bicycles are
done at its Sebastopol location. The electric motors are purchased from an
original equipment manufacturer (OEM) in the auto and air-conditioning industry.
The Company is using one vendor for its motors, although there are other
companies that could be used with slight modifications to the motor support
brackets. The batteries are standard batteries used in the computer and security
industries for power interrupt systems. The electronic system uses standard
electronic components. Additionally, the Company produces a scooter, known as
the ZAPPY(TM), which is manufactured by the Company, using parts manufactured by
various subcontractors. The Company is also a U.S. distributor of the
Electricycle(TM) scooter that is imported from China.
The Company as of September 30, 1998 had a $309,166 sales backlog. The
company expects to fill these orders within the next 45 days. Additionally, the
Company received a contract to purchase one million dollars of ZAP products from
Central & Southwest Services, Inc. Of the total order, $275,000 has been
fulfilled and the remaining $725,000, which is not included in the backlog
amount, is intended to be fulfilled over the next year. The products to be
shipped will vary based upon the requests of the customer during each month.
The Company's growth strategy is to increase net sales by augmenting its
marketing and sales force, and by increasing distribution channels through
retail organizations and wholesale distributors both domestically and overseas.
The company is also working on setting up franchise stores to assist in the
retail sales arena. The Company will continue to increase its production
capability to meet the increasing demand for its product. The Company will
continue to develop the product so that it is the low cost leader in the
industry. Product improvements and new product introductions will continue to
enlarge ZAP's presence in the electric vehicle industry.
Results of Operations
<TABLE>
The following table sets forth, as a percentage of net sales, certain
items included in the Company's Income Statements (see Financial Statements and
Notes) for the periods indicated:
<CAPTION>
Quarter ended September 30, Nine months ended September 30,
1998 1997 1998 1997
----- ----- ----- -----
Statements of Income Data:
<S> <C> <C> <C> <C>
Net sales........................................ 100.0% 100.0% 100.0% 100.0%
Cost of sales.................................... 63.3 65.6 66.0 78.0
Gross profit (Loss).............................. 36.7 34.4 34.0 22.0
Operating expenses.............................. 43.3 72.4 55.0 83.7
Loss from operations............................. (6.6) (38.0) (21.0) (61.7)
Other income (expense).......................... (0.8) (0.4) (0.6) (1.0)
Loss before income taxes......................... (7.4) (38.4) (21.6) (62.7)
Provision for income taxes....................... 0.0 0.0 0.0 0.0
Net loss......................................... (7.4) (38.4) (21.6) (62.7)
</TABLE>
Quarter Ended September 30, 1998 Compared to Quarter Ended September 30, 1997
Net sales for the quarter ended September 30, 1998, were $1,229,700
compared to $501,000 in the prior year, an increase of $728,700 or 145%. The
increase in sales in 1998 over the same period in 1997 was due to increased
7
<PAGE>
international sales together with the production and demand of the new ZAPPY(TM)
scooter. Sales of the ZAPPY(TM) scooter were $435,200 or 36% of total sales for
the quarter. This product was introduced into the marketplace in the beginning
of 1998. Additionally, international sales rose to over $210,000 for the 3rd
quarter of 1998 compared to $15,000 for the 3rd quarter of 1997.
Gross profit increased as a percentage of net sales to 37% from 34%. The
total gross profit increased $278,600 or 161%. The increase in gross margin
dollars can be attributed to margins generated from the sales of the new
ZAPPY(TM) scooter. The increase in gross margin percentage is primarily due to
reductions in cost of raw materials to produce the products and efficiency
increases in the manufacturing in the current quarter as compared to the quarter
ended September 30, 1997. Direct Materials were 52% of net sales in the 3rd
quarter of 1998 as compared to 64% of net sales in the 3rd quarter of 1997. This
is mainly due to improved control of material costs in 1998. Direct labor and
overhead were 11% of net sales in the 3rd quarter of 1998 as compared to 2% in
the 2nd quarter of 1997. This is mainly due to increased labor effort in
producing the new ZAPPY(TM) Scooter.
Selling expenses in the quarter ended September 30, 1998 were $255,700 as
compared to $159,500 for the quarter ended September 30, 1997. This was an
increase of $96,200 or 60% from 1997 to 1998. As a percentage of sales, selling
expenses decreased from 32% of sales to 21% of sales. The increase in selling
expenses was a result of increased promotional activity to enhance customer
demand and travel costs incurred for sales activity.
General and administrative expenses for the quarter ended September 30,
1998 were $225,600. This was an increase of $88,900 or 65% from 1997. As a
percentage of sales, general and administrative expense decreased to 18% from
27% of net sales. Expense increases during the 3rd quarter of 1998 as compared
to the 3rd quarter of 1997 resulted from increased personnel costs of $33,000
and the cumulative increased amount of $45,000 for supplies, consulting fees,
printing, insurance, and rent.
Research and development decreased $15,000 or 23% from the 3rd quarter of
1997 as compared to the 3rd quarter of 1998. As a percentage of net sales it
decreased to 4% of sales in the 3rd quarter of 1998 as compared to 13% of sales
in the 3rd quarter of 1997. Extensive efforts in developing the ZAPPY(TM)
scooter and single speed low-cost motor system resulted in higher costs in the
3rd quarter of 1997 that were not duplicated in the 3rd quarter of 1998.
Nine Months Ended September 30, 1998 Compared to Nine Months Ending September
30, 1997
Net sales for the nine months ended September 30, 1998 were $2,554,600
compared with $1,327,100 in the nine months ended September 30, 1997, an
increase of $1,227,500 or 92%. The increase in sales is attributed to sales of
the new ZAPPY(TM) scooter and a greater acceptance of the Company's products in
the marketplace. ZAPPY(TM) scooters accounted for $742,300 of sales in the first
nine months of 1998.
Gross profit increased as a percentage of net sales, to 34% from 22%. The
total gross profit increased $577,700 or 198%. The increase in gross margin
dollars can be attributed to the gross margins realized on the sales of the new
ZAPPY(TM) scooters. The increase in gross margin percentage was the result of
greater cost controls and improved efficiencies in the manufacturing process of
all products in the current nine months as compared to the nine months ended
September 30, 1997. Direct materials were 57% of net sales in the first nine
months of 1998 as compared to 70% of net sales in the first nine months of 1997.
Selling expenses for the nine months ended September 30, 1998 were $665,400
as compared to $424,900 for the nine months ended September 30, 1997. This was
an increase of $240,500 or 57% from 1997 to 1998. As a percentage of sales,
selling expenses decreased from 32% of sales to 26% of sales. Increased
promotion of the products to enhance demand caused these increases.
General and administrative expenses for the nine months ended September 30,
1998 were $608,000. This is an increase of $107,100 or 21% from 1997. As a
percentage of sales, general and administrative expense decreased to 24% from
38% of net sales. Expense increases during the first nine months of 1998 as
compared to the first nine months of 1997 occurred due to increased personnel
needs, insurance costs, and additional use of outside consultants for business
purposes.
8
<PAGE>
Research and development decreased $53,600 or 29% from the first nine
months of 1997 as compared to the first nine months of 1998. As a percentage of
net sales, research and development decreased to 5% of sales in the first nine
months of 1998 as compared to 14% of sales in the first nine months of 1997.
Extensive efforts in developing the ZAPPY(TM) scooter and single speed low-cost
motor system resulted in higher costs in the first nine months of 1997 that were
not duplicated in the first nine months of 1998.
Liquidity and Capital Resources
The Company used cash from operations of $1,072,400 and $824,100 during the
nine months ended September 30, 1998 and 1997 respectively. Cash used in
operations in the first nine months of 1998 was the result of the net loss
incurred for the period of $550,600, offset by net non cash expenses of $61,300,
and the net change in operating assets and liabilities resulting in a further
use of cash of $583,100. Cash used in operations for the first nine months of
1997 was the result of the net loss incurred for the first nine months of
$831,400, offset by net non cash expenses of $111,300, and the net change in
operating assets and liabilities resulting in further use of cash of $104,000.
Investing activities used cash of $107,200 and $107,600 during the first
nine months ended September 30, 1998 and 1997 respectively. The uses of cash
were for the purchase of fixed assets and defense of the company's patents.
Financing activities provided cash of $1,045,500 and $899,500 during the
first nine months ended September 30, 1998 and 1997 respectively. In 1998, the
cash provided by financing activities included an increase in loans payable of
$517,500 and the sales of common stock, $558,000 offset by principal payments on
outstanding debt. In 1997, the cash provided by financing activities resulted
from the sales of common stock, $1,000,400 for the first nine months ended
September 30, 1997 offset by principal payments on outstanding debt.
At September 30, 1998, the Company had cash and cash equivalents of
$556,400 as compared to $129,400 at September 30, 1997. At September 30, 1998,
the Company had working capital of $708,300 as compared to working capital of
$128,900 at September 30, 1997. The increase in both cash and cash equivalents
and working capital in the first nine months of 1998 over the first nine months
of 1997 are primarily due to the proceeds received from the Company's direct
public offering and the secured promissory notes which more than offset the
Company's net losses during the same period. The Company, at present, does not
have a credit facility in place with a bank or other financial institution. The
Company does have in process a second direct public offering for the nine months
ended September 30, 1998 of its common stock with maximum potential gross
proceeds of $3,000,000 before expenses. The Company believes that the cash and
cash equivalents on hand at September 30, 1998 along with the expected proceeds
from the Company's direct public offering, will be sufficient to allow the
Company to continue its expected level of operations for the remainder of the
year.
The Company's primary capital needs are to fund its growth strategy,
which includes increasing its net sales, increasing distribution channels,
improving existing product lines and development of strong corporate
infrastructure.
Dates following December 31, 1999 and beyond (the "Year 2000 Problem")
Many existing computer systems and applications, and other devices, use
only two digits to identify a year in the date field, without considering the
impact of the upcoming change in the century. Such systems and applications
could fail or create erroneous results unless corrected. The Company relies on
its internal financial systems and external systems of business enterprises such
as customers, suppliers, creditors, and financial organizations both
domestically and globally, directly and indirectly for accurate exchange of
data. The Company has evaluated such systems and believes the cost of addressing
the Year 2000 Problem will not have a material adverse affect on the result of
operations or financial position of the Company. However, even though the
internal systems of the Company are not materially affected by the Year 2000
issue the Company could be affected through disruption in the operation of the
enterprises with which the Company interacts.
9
<PAGE>
Seasonality and Quarterly Results
The Company's business is subject to seasonal influences. Sales volumes in
the bicycle industry typically slow down during the winter months, November to
March, in the U.S. The Company is selling worldwide and is not impacted 100% by
the U.S. seasonality in the bicycle industry.
Inflation
The Company's raw materials are sourced from stable cost competitive
industries. As such, the Company does not foresee any material inflationary
trends for its raw material sources.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The company has become aware that a company named Omni under the
leadership of an individual named Joseph Stevenson has been advertising and
selling an electric system for bicycles called EROS (electric regenerative
operating system). The Company's management, in consultation with patent
counsel, has determined after analysis that the EROS system infringes the
Company's patents and has filed suit against Omni for such infringement.
Although the Company believes its claims are meritorious and the patents for the
ZAP system are valid, it is possible, as in any suit, that the Company may be
unable to prove infringement or that Mr. Stevenson may establish, either in
litigation or in a re-examination proceeding before the Patent Office that the
Company's patents are not valid. If the Company's patents are held to be
invalid, the Company's ability to prevent competitors from manufacturing or
selling bicycles with the patented system will be significantly reduced. The
loss of the patents or a significant damage award against the Company could have
a material adverse effect upon the business and financial condition and
prospects of the Company.
Item 2. Changes in Securities
There were no changes in rights of securities holders.
Item 3. Defaults Upon Senior Securities
There were no defaults upon senior securities.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to the vote of security holders.
Item 5. Other Information
There were no major contracts signed during the period.
Item 6. Exhibits and Reports on Form 8-K
No reports on Form 8-K were filed during the quarter.
10
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ZAP POWER SYSTEMS
- ----------------------------------------------------
(Registrant)
Date
------------------ ----------------------------------------------
James McGreen - President and Director
Date
------------------ ----------------------------------------------
Gary Starr - Managing Director
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF ZAP POWER SYSTEMS FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1998, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 556,400
<SECURITIES> 0
<RECEIVABLES> 472,700
<ALLOWANCES> (5,000)
<INVENTORY> 606,400
<CURRENT-ASSETS> 1,736,500
<PP&E> 365,900
<DEPRECIATION> (177,500)
<TOTAL-ASSETS> 1,981,600
<CURRENT-LIABILITIES> 1,028,200
<BONDS> 1,200
0
0
<COMMON> 3,733,800
<OTHER-SE> (2,867,500)
<TOTAL-LIABILITY-AND-EQUITY> 1,981,600
<SALES> 2,554,600
<TOTAL-REVENUES> 2,550,000
<CGS> 1,684,900
<TOTAL-COSTS> 1,404,800
<OTHER-EXPENSES> 0
<LOSS-PROVISION> (5,000)
<INTEREST-EXPENSE> 10,800
<INCOME-PRETAX> (550,500)
<INCOME-TAX> 0
<INCOME-CONTINUING> (550,500)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (550,000)
<EPS-PRIMARY> (0.21)
<EPS-DILUTED> (0.21)
</TABLE>
