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)
<PAGE>
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.
<PAGE>
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 341,814 214,848
Costs of product sales 63,765 129,317
Research and development 333,550 286,947
General and administrative 275,544 318,550
Depreciation and amortization 99,201 92,886
Royalty 2,376 1,417
1,116,250 1,043,965
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 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.
<PAGE>
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)
<PAGE>
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.
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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.
<PAGE>
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 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.
<PAGE>
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 17.6
percent compared to a negative margin of 13.1 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 18.1 percent for the quarter ended January 31, 1997
compared to a negative margin of 13.9 percent for the comparable
period last year. Gross profit on product sales was 14.7 percent for
the first quarter of fiscal 1997 compared to a negative margin of 11.8
percent for the first quarter last year.
Research and development expenditures during the first quarter of
fiscal 1997 rose $46,603 to $333,550 compared to $286,947 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 $246,189 or 86 percent of
internally-funded research and development expenditures.
General and administrative expenses for the quarter ended January 31,
1997 declined to $275,544 from the prior year level of $318,550 due to
lower levels of consulting ($18,274), legal ($15,341) and travel costs
($7,227).
Depreciation and amortization expense increased to $99,201 compared to
$92,886 in the prior year quarter. The increase is due to
depreciation on higher levels of property and equipment and the
amortization of intellectual property in an expanded number of
countries.
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.
<PAGE>
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: June 13, 1997 By:/s/ Donald A. French
Donald A. French
Treasurer and Controller
(Principal Financial and
Accounting Officer)
