UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QT/A
[ ] Quarterly report pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
[X] Transition Report pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended January 31, 1997
Commission file number 1-10869
UNIQUE MOBILITY, INC.
(Exact name of registrant as specified in its charter)
Colorado 84-0579156
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
425 Corporate Circle Golden, Colorado 80401
(Address of principal executive offices) (zip code)
(Registrant's telephone number, including area code) (303) 278-2002
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 .
The number of shares outstanding (including shares held by affiliates) of the
registrant's common stock, par value $0.01 per share at March 11, 1997 was
13,081,603.
PART I - FINANCIAL INFORMATION
UNIQUE MOBILITY, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
January 31, October 31
Assets 1997 1996
(unaudited)
Current assets:
Cash and cash equivalents $ 1,082,582 3,230,246
Accounts receivable (note 9) 639,486 569,562
Costs and estimated earnings in excess of
billings on uncompleted contracts (note 3) 268,593 179,483
Inventories (note 4) 378,272 408,145
Prepaid expenses 153,913 37,848
Other current assets 19,447 28,177
Total current assets 2,542,293 4,453,461
Property and equipment, at cost:
Land 335,500 335,500
Building 1,438,090 1,364,500
Molds 102,113 102,113
Transportation equipment 258,675 258,675
Machinery and equipment 1,935,400 1,918,128
4,069,778 3,978,916
Less accumulated depreciation (1,707,973) (1,613,786)
Net property and equipment 2,361,805 2,365,130
Investment in Taiwan joint venture (note 5) 2,695,379 1,366,540
Patent and trademark costs, net of accumulated
amortization of $43,724 and $40,030 530,250 519,966
Other assets 5,233 7,552
$ 8,134,960 8,712,649
(Continued)
UNIQUE MOBILITY, INC. AND SUBSIDIARIES
Consolidated Balance Sheets, Continued
January 31, October 31,
Liabilities and Stockholders' Equity 1997 1996
(unaudited)
Current liabilities:
Accounts payable $ 209,528 121,790
Note payable to Taiwan joint venture 1,350,472 1,375,121
Other current liabilities (note 6) 292,341 400,574
Current portion of long-term debt 124,004 61,094
Billings in excess of costs and estimated earnings
on uncompleted contracts (note 3) 145,951 25,685
Total current liabilities 2,122,296 1,984,264
Long-term debt, less current portion 734,377 744,389
Total liabilities 2,856,673 2,728,653
Minority interest in consolidated subsidiary 390,514 391,120
Stockholders' equity (notes 7 and 11):
Common stock, $.01 par value, 50,000,000 shares
authorized; 11,772,315 and 11,751,365
shares issued 117,723 117,514
Additional paid-in capital 23,040,409 23,021,339
Accumulated deficit (18,035,564)(17,331,279)
Notes receivable from officers (83,646) (65,816)
Cumulative translation adjustment (23,297) (21,030)
Treasury stock at cost, 39,341 shares (127,852) (127,852)
Total stockholders' equity 4,887,773 5,592,876
Commitments (notes 5 and 10)
$ 8,134,960 8,712,649
See accompanying notes to consolidated financial statements.
UNIQUE MOBILITY, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(unaudited)
Quarter Ended January 31,
1997 1996
Revenue:
Contract services (note 9) $ 417,275 188,679
Product sales 74,790 115,633
492,065 304,312
Operating costs and expenses:
Costs of contract services 362,669 234,930
Costs of product sales 67,429 135,879
Research and development 351,786 300,337
General and administrative 334,366 372,819
=================
Operating loss (624,185) (739,653)
Other income (expense):
Minority interest share of earnings of
consolidated subsidiary (16,231) (17,147)
Interest income 27,230 25,703
Interest expense (61,920) (55,574)
Equity in loss of Taiwan joint venture (note 5) (16,773) (8,885)
Other (12,406) 186
(80,100) (55,717)
Net loss $ (704,285) (795,370)
=========
Net loss attributable to common stockholders
(note 8) $ (905,285) (795,370)
Net loss per common share (note 8) $ (.08) (.07)
Weighted average number of shares of common
stock outstanding (note 8) 11,755,692 10,609,761
See accompanying notes to consolidated financial statements.
UNIQUE MOBILITY, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(unaudited)
Quarter Ended January 31,
1997 1996
Cash flows from (used by) operating activities:
Net loss (704,285) (795,370)
Adjustments to reconcile net loss to net cash used
by operating activities:
Depreciation and amortization 99,201 92,886
Minority interest share of earnings of
consolidated subsidiary 16,231 17,148
Noncash compensation expense for common stock
issued for services 1,449 3,750
Equity in loss of Taiwan joint venture 16,773 8,885
Gain on sale of property and equipment - (411)
Other 9,381 -
Change in operating assets and liabilities:
Accounts receivable and costs and estimated
earnings in excess of billings on
uncompleted contracts (159,034) 129,771
Inventories 29,873 59,961
Prepaid expenses and other current assets (107,335) (99,575)
Accounts payable and other current
liabilities (20,495) 91,545
Billings in excess of costs and estimated
earnings on uncompleted contracts 120,266 -
Net cash used by operating activities (697,975) (491,410)
Cash from (used by) investing activities:
Acquisition of property and equipment (90,862) (12,497)
Increase in patent and trademark costs (13,979) (13,223)
Proceeds from sale of property and equipment - 3,094
Net cash used by investing activities (104,841) (22,626)
(Continued)
UNIQUE MOBILITY, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows, Continued
(unaudited)
Quarter Ended January 31,
1997 1996
Cash flows provided (used) by financing activities:
Proceeds from borrowings 94,330 -
Repayment of debt (41,432) (18,844)
Repayment of note payable to Taiwan joint
venture participant (1,380,909) -
Proceeds from sale of common stock, net - 500,000
Issuance of common stock under employee stock
purchase plan - 2,693
Distribution paid to holders of minority interest (16,837) (16,837)
Net cash provided (used) by financing activities (1,344,848) 467,012
Decrease in cash and cash equivalents (2,147,664) (47,024)
Cash and cash equivalents at beginning of quarter 3,230,246 1,796,392
Cash and cash equivalents at end of quarter $ 1,082,582 1,749,368
Interest paid in cash during quarter $ 261,164 20,750
Non-cash investing and financing transactions:
In December 1996, the Company financed its additional investment in the Taiwan
joint venture through the issuance of a note payable in the amount of $1,347,879
(see note 5).
In accordance with the provisions of the Company's stock options plans, the
Company may, and has, accepted promissory notes from officers of the Company in
satisfaction of the exercise price of options exercised. These notes receivable
are recorded as a reduction of shareholders' equity in the consolidated
financial statements. In the first quarter of fiscal 1997 and 1996, the Company
issued 20,105 and 13,395 shares of common stock with an aggregate exercise price
of $17,830 and $13,395, respectively, for which the Company received promissory
notes for the same amount.
See accompanying notes to consolidated financial statements.
UNIQUE MOBILITY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(unaudited)
(1) The accompanying financial statements are unaudited; however, in the opinion
of management, all adjustments which were solely of a normal recurring
nature, necessary to a fair statement of the results for the interim period,
have been made. The results for the interim period are not necessarily
indicative of results to be expected for the fiscal year.
(2) Certain fiscal 1996 amounts have been reclassified for comparative purposes.
(3) The estimated period to complete contracts in process ranged from one to
sixteen months at January 31, 1997, and from one to eight months at October
31, 1996. The Company expects to collect substantially all related accounts
receivable and costs and estimated earnings in excess of billings
on uncompleted contracts within one year. Contracts in process consist of
the following:
January 31, 1997 October 31, 1996
(unaudited)
Costs incurred on uncompleted
contracts $ 1,394,723 1,081,352
Estimated earnings 695,752 596,765
2,090,475 1,678,117
Less billings to date 1,967,833 1,524,319
$ 122,642 153,798
Included in the accompanying balance sheets as follows:
Costs and estimated earnings
in excess of billings on
uncompleted contracts $ 268,593 179,483
Billings in excess of costs
estimated earnings on
uncompleted contracts (145,951) (25,685)
$ 122,642 153,798
(4) Inventories are stated at the lower of cost or market. Cost is determined by
the first-in, first-out method and consists of materials, direct labor and
production overhead. Inventories consist of the following:
January 31, 1997 October 31, 1996
(unaudited)
Raw materials $ 235,353 273,527
Work in process 80,364 55,996
Finished products 62,555 78,622
$ 378,272 408,145
UNIQUE MOBILITY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(unaudited)
(5) On January 29, 1994, the Company, Kwang Yang Motor Co. Ltd. ("KYMCO"), and
Turn Luckily Technology Co. Ltd. ("TLT"), entered into a joint venture
agreement (the "Joint Venture Agreement") providing for the formation,
funding, and operation of Taiwan UQM Electric Company, Ltd., a company
organized under the laws of the Republic of China ("Taiwan UQM"). Taiwan
UQM was incorporated in April 1995.
In 1994, the Company purchased 39 percent of the initial equity capital of
Taiwan UQM and agreed to invest 39 percent of any additional capital calls.
Pursuant to the Joint Venture Agreement, the venturers are required to
invest additional funds in Taiwan UQM, as the board of directors of Taiwan
UQM by unanimous vote determines to be required.
In November 1996, the Board of Directors of Taiwan UQM resolved to make an
additional capital call on all joint venture partners due December 1, 1996.
The Company's additional capital call obligation approximates $1.35 million
as of January 31, 1997. The Company has reached an agreement with the joint
venture partners to meet this call obligation by paying 50 percent of the
obligation by March 1, 1997, and the remaining 50 percent by June 1, 1997.
The Company will pay interest at 10 percent per annum to Taiwan UQM on the
outstanding capital call obligation. It is the intent of management of the
Company to maintain the Company's equity interest in Taiwan UQM at 39
percent. The additional capital call obligation has been accounted for as a
financing arrangement. Accordingly, for financial reporting purposes, the
Company recorded $1,347,879 as an addition to its investment in the joint
venture and as a note payable to the joint venture. The note payable
remained outstanding at January 31, 1997, with the increase in its recorded
value to $1,350,472 due to exchange rate fluctuations.
Summarized unaudited financial information for Taiwan UQM is as follows:
Financial Position January 31, 1997 October 31, 1996
Current assets $ 2,166,393 330,826
Noncurrent assets:
Property and equipment-net 4,956,687 3,160,467
Other 141,474 35,833
Total assets 7,264,554 3,527,126
Current liabilities 350,850 19,816
Noncurrent liabilities 2,476 3,361
Stockholders' equity 6,911,228 3,503,949
Total liabilities
and equity $ 7,264,554 3,527,126
UNIQUE MOBILITY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(unaudited)
Quarter Ended Quarter Ended
Results of Operations January 31, 1997 January 31, 1996
Revenue $ - -
Expenses 43,008 22,782
Net loss $ (43,008) (22,782)
(6) The following table summarizes the composition of the Company's other
current liabilities:
January 31, 1997 October 31, 1996
(unaudited)
Accrued interest $ 29,078 214,002
Accrued legal and accounting fees 70,254 45,237
Accrued payroll, consulting,
personal property and real
estate taxes 45,529 52,585
Other 147,480 88,750
$ 292,341 400,574
(7) The Company has reserved 4,104,000 shares of common stock for key
employees, consultants, and key suppliers under its Incentive and
Non-Qualified Option plans. Options become exercisable as determined
by the Board of Directors and expire within 10 years from the date of
grant. The maximum number of shares that may be granted to any
eligible employee during the term of the Plan is 500,000 shares. The
options require holders to abide by certain Company policies on the
trading of Company's common stock.
The following table summarizes activity under the plans:
Shares Under Per Share
Option Option Price
Outstanding at October 31, 1995 1,852,232 $ .50 - 8.13
Granted 590,000 4.13 - 4.75
Exercised (100,542) .50 - 3.50
Forfeited (315,978) 3.50 - 8.13
Outstanding at October 31, 1996 2,025,712 .50 - 8.13
Granted 500,000 3.31
Exercised (20,105) .75 - 1.00
Forfeited -
Outstanding at January 31, 1997 2,505,607 .50 - 8.13
Exercisable at January 31, 1997 1,606,715
UNIQUE MOBILITY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(unaudited)
In February 1994, the Company's Board of Directors ratified a Stock Option
Plan for Non-Employee Directors pursuant to which Directors may elect to
receive stock options in lieu of cash compensation for their services as
directors. The Company has reserved 250,000 shares of common stock for
issuance pursuant to the exercise of options under the Plan. The options
vest ratably over a three-year period beginning one year from the date of
grant and are exercisable for 10 years from the date of grant. Option
prices are equal to the fair market value of common shares at the date of
grant.
The following table summarizes activity under the plan:
Shares Under Per Share
Option Exercise Price
Outstanding at October 31, 1995 109,333 $ 5.00 - 6.25
Granted 32,000 4.38
Outstanding at October 31, 1996 141,333 4.38 - 6.25
Granted -
Outstanding at January 31, 1997 141,333 4.38 - 6.25
Exercisable at January 31, 1997 56,889
In connection with the original issuance of certain subordinated
convertible term notes to Advent and Techno, the Company granted Advent and
Techno warrants to acquire 790,000 shares of the Company's common stock at
the lower $2.40 per share, being the market value of the Company's stock at
the time of issuance, or the market price of the common stock averaged over
the 30 trading days immediately preceding the date of exercise. The
warrants expire August 1997, and allow for a cashless exercise of the
warrants into common shares based on the spread between the market price of
the common stock on the date of exercise and the $2.40 exercise price. All
of these warrants remain outstanding at January 31, 1997.
The Company has reserved 300,000 shares of common stock for issuance
pursuant to a warrant agreement with an investment banking company. The
warrants are exercisable at $6.00 per share and expire January 1999. The
warrants contain transfer restrictions and provisions for the adjustment of
the exercise price and the number and type of securities issuable upon
exercise based on the occurrence of certain events. All of these warrants
remain outstanding at January 31, 1997. The estimated fair value of the
warrants issued of $50,000 was recorded as compensation for the investment
banking services rendered in 1995.
In connection with the 1995 common stock issuance, the placement agent was
issued warrants expiring July 1998, to acquire 150,000 shares of the
Company's common stock at $5.75 per share. All of these warrants remain
outstanding at January 31, 1997.
In connection with the first 1996 common stock issuance, the placement
agent was issued warrants expiring February 1999 to acquire 50,000 shares
of the Company's common stock at $4.75 per share. All of these warrants
remain outstanding at January 31, 1997.
UNIQUE MOBILITY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(unaudited)
In connection with the second 1996 common stock issuance, an investor was
issued warrants expiring May 1998, to acquire 38,100 shares of the
Company's common stock at $5.00 per share. All of these warrants remain
outstanding at January 31, 1997.
In connection with the third 1996 common stock issuance, the placement
agent was issued warrants expiring September 1999 to acquire 50,000 shares
of the Company's common stock at $4.25 per share. All of these warrants
remain outstanding at January 31, 1997.
(8) Net loss per common share amounts are based on the weighted average number
of common shares outstanding during the first quarter of each fiscal year
presented. Outstanding common stock options and warrants were not included
in the computation because the effect of such inclusion would be
antidilutive. The fair value of the preemptive rights arising from the
issuance of employee stock options during the first quarter of fiscal 1997
has been treated in a manner similar to a preferred stock dividend in the
calculation of net loss per common share. The estimated aggregate fair
value of these rights, determined using the Black-Scholes option pricing
model, was $201,000.
(9) The Company has historically derived significant revenue from contract
services from a few key customers. For the first quarter of fiscal 1997,
the Company derived $244,588 of contract services revenue from two
customers, representing 59 percent of revenue earned from contract
services. These two customers also represented 61 percent of the total
accounts receivable balance at January 31, 1997. For the quarter ended
January 31, 1996, the Company derived $170,633 of contract services revenue
from three customers, representing 90 percent of revenue earned from
contract services. These three customers also represented 56 percent of the
total accounts receivable balance at January 31, 1996.
(10) The Company has entered into employment agreements with three of its
officers which expire December 31, 1999. The aggregate annual future
compensation under these agreements through the expiration date is
$1,247,847.
(11) In March 1997, the Company completed the placement of 1,289,288 shares of
its $0.01 par value common stock at $3.50 per share pursuant to offerings
under Regulation S and Regulation D. Net proceeds to the Company amounted
to $4,241,758.
In connection with the offering, the placement agents were issued warrants
to acquire 225,625 shares of the Company's stock at $3.50 per share and
warrants to acquire 50,000 shares of common stock at $4.20 per share. The
warrants expire in March 2000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
This Report contains forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from those
discussed in this report. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed in this report and
any documents incorporated herein by reference, as well as, in the Company's
Registration Statement on Form S-3 dated October 10, 1996. These forward-looking
statements
represent the Company's judgment as of the date of this Report. The Company
disclaims, however, any intent or obligation to update these forward-looking
statements.
The Company has changed its fiscal year end from October 31 to March 31. This
change results in a five month transition period for financial reporting
purposes which commenced on November 1, 1996 and ends on March 31, 1997. This
Report covers the quarterly period from November 1, 1996 through January 31,
1997. This quarterly report will be followed by a transition period report on
Form 10-K for the five month period ending March 31, 1997.
Financial Condition
The Company's financial condition remained satisfactory throughout the quarter
although liquidity during the quarter decreased due to the investment of $1.4
million of available cash resources in its Taiwan based joint venture company.
Cash and cash equivalents declined $2,147,664 to $1,082,582 at January 31, 1997
from $3,230,246 at October 31, 1996 and working capital ( the excess of current
assets
over current liabilities) declined from $2,469,197 at the beginning of the
quarter to $419,997 at the end of the quarter.
Accounts receivable rose to $639,486 at January 31, 1997 from $569,562 at
October 31, 1996 reflecting slower than expected collection on certain
international trade receivables.
Costs and estimated earnings on uncompleted contracts rose $89,110 to $268,593
at the end of the first quarter due to milestone billing arrangements on certain
commercial and government projects. Estimated earnings on contracts in process
rose to $695,752 at January 31, 1997 on total contracts in process of $2,090,475
compared to estimated earnings on contracts in process of $596,765 on total
contracts in process of $1,678,117. The increase is attributable to the
performance of substantially all of the contracts in process at January 31, 1997
within budget and the performance of one contract in process at above budgeted
margins.
Raw material and finished product inventories declined while work in process
inventory rose during the quarter resulting in an overall decline in inventory
levels from $408,145 at the beginning of the quarter to $378,272 at January 31,
1997. The decrease in raw material and finished products inventories is
attributable to transfers to work in process and product sales, respectively,
during the quarter.
During the first quarter of fiscal 1997 the Company invested $90,862 for the
acquisition of property and equipment and $13,979 in the prosecution of its
trademarks and patent applications throughout the world. Capital expenditures
during the quarter were primarily directed toward improvements to the Company's
Golden, Colorado facility.
Investment in Taiwan joint venture rose to $2,695,379 at January 31, 1997
compared to $1,366,540 at October 31, 1996 reflecting the recording of future
capital call obligations associated with Taiwan UQM. See also "Liquidity and
Capital Resources" below.
Accounts payable rose to $209,528 at the end of the first quarter compared to
$121,790 at fiscal 1996 year end. The increase is primarily attributable to
increased component purchases for an internally funded development program
throughout the quarter.
Note payable to Taiwan joint venture was $1,350,472 at January 31, 1997 compared
to $1,375,121 at October 31, 1996. In November 1996 the Company exercised its
option and subsequently tendered cash in the amount of $1,380,909 to a joint
venture participant. The exercise of the option to repurchase the shares and the
payment of the amount due allowed the Company to maintain its 39 percent equity
interest in
Taiwan UQM. Also in November, 1996 the board of directors of Taiwan UQM venture
issued an additional capital call to the Company in the amount of NT$37,050,000
(U.S.D. $1,350,472 at January 31, 1997) which is due in two equal installments
on March 1, 1997 and June 1, 1997 plus accrued interest of 10 percent per annum
from December 1, 1996 until the date of payment.
Other current liabilities declined to $292,341 at the end of the first quarter
compared to $400,574 at fiscal 1996 year end. The decrease was primarily
attributable to the payment of accrued interest arising on the note payable to
Taiwan UQM which was paid in December of 1996.
Billings in excess of costs and estimated earnings on uncompleted contracts rose
to $145,951 at January 31, 1997 from $25,685 at October 31, 1996 due to billings
in advance of the performance of the associated work on certain sponsored
development programs.
Long-term debt declined $10,012 during the first quarter due to scheduled
principal payments on the mortgage debt associated with the Company's facility.
Common stock and additional paid-in capital increased to $117,723 and
$23,040,409 at January 31, 1997, respectively, compared to $117,514 and
$23,021,339 at October 31, 1996. The increases were due to the issuance of
common stock upon the exercise of stock options by employees and consultants of
the company and the issuance of common stock to a consulting firm for services.
Results of Operations
Operations for the quarter ended January 31, 1997, resulted in a net loss of
$704,285 or $0.06 per share compared to a net loss of $795,370 or $0.07 per
share for the comparable quarter last year.
Revenue derived from contract services was $417,275 for the fiscal 1997 first
quarter versus $188,679 for the comparable prior year quarter. The increase is
attributable to increased levels of sponsored development activities.
Product sales declined to $74,790 during the first quarter of fiscal 1997 from
$115,633 for the prior year quarter. The decrease is primarily attributable to
decreased product sales to the solar racing market.
Gross profit margins for the first quarter of fiscal 1997 rose to 12.6 percent
compared to a negative margin of 21.9 percent for the first quarter of fiscal
1996. The improvement in margins is attributable to improved absorption of
overhead costs. Gross profit on contract services was 13.1 percent for the
quarter ended January 31, 1997 compared to a negative margin of 24.5 percent for
the comparable period last year. Gross profit on product sales was 9.8 percent
for the first quarter of fiscal 1997 compared to a negative margin of
17.5 percent for the first quarter last year.
Research and development expenditures during the first quarter of fiscal 1997
rose $51,449 to $351,786 compared to $300,337 for the comparable period last
year. The increase is attributable primarily to production and facilitization
engineering activities associated with the planned launch of volume
manufacturing operations for Invacare which accounted for approximately $261,872
or 75 percent of internally-funded research and development expenditures.
General and administrative expenses for the quarter ended January 31, 1997
declined to $334,366 from the prior year level of $372,819 due to lower levels
of consulting ($18,274), legal ($15,341) and travel costs ($7,227).
Equity in loss of Taiwan joint venture rose to $16,773 for the quarter ended
January 31, 1997 compared to $8,885 during the comparable quarter last year. The
increase is attributable to expanded staffing and operations at Taiwan UQM
preparatory to the launch of manufacturing operations.
Liquidity and Capital Resources
The Company's cash balances and liquidity throughout the first quarter of fiscal
1997 were adequate to meet operating needs. Net cash used by operating
activities rose to $697,975 during the first quarter of fiscal 1997, compared to
$491,410 in the comparable prior year quarter, due primarily to higher levels of
accounts receivable and other current assets. Cash requirements during the
quarter were funded primarily from existing cash balances.
In January 1996, Invacare purchased 129,032 shares of common stock at a price of
$3.88 per share. Net proceeds to the Company were $500,000, all of which were
applied to fund the development of a wheelchair motor for Invacare. Contingent
on development milestones, Invacare has further agreed to purchase additional
shares at market price the proceeds of which would be used, in part, to
fund the Company's anticipated capital investment in motor manufacturing tools
and equipment. The Company is currently negotiating with Invacare to manufacture
motors for its wheelchairs; however, there can be no assurance that such
negotiations will be successful.
On March 12, 1997 the Company completed the placement of 1,289,288 shares of its
common stock with various institutional investors and an individual investor in
Europe and Canada in offerings under Regulation S and Regulation D of the
Securities and Exchange Act. The common stock was sold at $3.50 per share which
was the average closing price of the common stock on the American Stock Exchange
for the ten days prior to the pricing date of February 24, 1997. Net proceeds to
the Company after deducting placement agent fees of $270,750 was $4,241,758.
In fiscal 1994, the Company, KYMCO and TLT entered into a joint venture
agreement which provided for the formation, capitalization and operation of
Taiwan UQM, a company organized under the laws of the Republic of China. The
Company purchased 39 percent of the initial stock of Taiwan UQM for NT$1,170,000
(US$45,082 on the transaction date). Pursuant to the joint venture agreement,
the venture partners are obligated to meet future capital calls as the Board of
Directors of Taiwan UQM, by unanimous vote, determines. During fiscal 1995,
the company was unable to fund its capital call obligations. In June 1995,
the Company, KYMCO and TLT entered into a waiver and option agreement pursuant
to which KYMCO agreed to purchase those shares of Taiwan UQM underlying the
Company's capital call obligations. The purchase price of such shares
was NT$37,830,000 (U.S.$1,403,493 at October 31, 1995). The Company was
granted the option to repurchase the shares for the original capital call amount
plus 10 percent interest and associated transfer taxes. In November 1996,
the Company exercised its option and subsequently repurchased the shares from
KYMCO, thus maintaining the Company's ownership position at 39 percent of the
then outstanding shares of Taiwan UQM. The repurchase price plus interest and
taxes totaled NT$44,175,505 (US$1,612,539 on the transaction date).
In November 1996, the Board of Directors of Taiwan UQM announced an additional
capital call to provide cash to fund facility construction and the launch of
electric component production. The Company's capital call obligation pursuant
thereto is NT$37,050,000 (US$1,350,472 as of January 31, 1997), plus interest at
the rate of 10 percent per annum on the outstanding amount from December 1,
1996, through the due date. The obligation is due and payable in two
equal installments on March 1, 1997 and June 1, 1997. At the date of this
report the Company has not yet funded its March 1, 1997 capital call
obligation, although it anticipates doing so in the next several weeks from
existing cash balances.
Over the next several months, the Company expects to invest substantially
greater amounts of capital to launch manufacturing operations for Invacare,
should Invacare elect to purchase motors from the Company. Anticipated
capital expenditures for production tooling and fixtures, production machinery,
equipment, computer hardware and software are expected to exceed $1.5 million.
There can be no assurance, however, that the Company will launch volume
manufacturing operations for Invacare or others. The Company expects to
fund any such investment requirements from existing cash balances and bank
facilities.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.1* Employment Agreement with Ray A. Geddes.
10.2* Amendment to 401 (k) Savings Plan of Unique Mobility, Inc.
10.3* Amendment to the Unique Mobility, Inc. 1992 Stock Option Plan
27* Financial Data Schedule
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Filed with original filing of Form 10-Q.
(b) Reports on Form 8-K
Current Report dated March 13, 1997 regarding completion of offerings
of common stock pursuant to Regulation S and Regulation D.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Unique Mobility, Inc.
Registrant
Date: September 8, 1997 By:/s/ Donald A. French
Donald A. French
Treasurer and Controller
(Principal Financial and
Accounting Officer)
