UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] Quarterly report pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
[ ] Transition Report pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended December 31, 1999
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)
(303) 278-2002
(Registrant's telephone number, including area code)
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 January 26, 2000, was 16,577,082.
<PAGE>
PART I - FINANCIAL INFORMATION
UNIQUE MOBILITY, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, March 31,
Assets 1999 1999
(unaudited)
Current assets:
Cash and cash equivalents $ 1,004,572 1,537,453
Accounts receivable (note 11) 2,427,562 2,601,994
Costs and estimated earnings in excess
of billings on uncompleted contracts
(note 3) 171,853 173,457
Inventories (note 4) 2,893,524 2,787,994
Prepaid expenses 95,121 248,441
Other 519,190 340,658
Total current assets 7,111,822 7,689,997
Property and equipment, at cost:
Land (note 9) 517,080 444,480
Building (note 9) 2,678,525 2,675,763
Molds 102,113 102,113
Transportation equipment 146,386 195,890
Machinery and equipment (note 9) 10,410,794 10,098,430
13,854,898 13,516,676
Less accumulated depreciation (4,944,104) (3,643,341)
Net property and equipment 8,910,794 9,873,335
Investment in Taiwan joint venture (note 5) - 1,595,432
Investment in EV Global (note 6) - 1,000,000
Patent and trademark costs, net of
accumulated amortization of $116,365
and $90,869 705,899 686,195
Goodwill, net of accumulated amortization
of $573,530 and $324,318 6,078,629 6,327,841
Other assets 36,881 33,778
$ 22,844,025 27,206,578
(Continued)
<PAGE>
UNIQUE MOBILITY, INC. AND SUBSIDIARIES
Consolidated Balance Sheets, Continued
December 31, March 31,
Liabilities and Stockholders' Equity 1999 1999
(unaudited)
Current liabilities:
Accounts payable $ 2,045,436 2,244,144
Other current liabilities (note 8) 1,206,917 952,498
Current portion of long-term
debt (note 9) 958,589 928,701
Revolving line-of-credit (note 9) 1,750,000 1,100,000
Billings in excess of costs and
estimated earnings on uncompleted
contracts (note 3) 150,888 69,393
Total current liabilities 6,111,830 5,294,736
Long-term debt, less current portion
(note 9) 3,671,526 4,396,127
Total liabilities 9,783,356 9,690,863
Minority interest in consolidated
subsidiary 404,769 399,591
Stockholders' equity (note 10):
Common stock, $.01 par value, 50,000,000
shares authorized; 16,574,769 and
16,222,932 shares issued 165,747 162,230
Additional paid-in capital 45,319,531 43,412,390
Accumulated deficit (32,038,467) (25,552,794)
Accumulated other comprehensive loss (384,300) (451,639)
Notes receivable from officers (406,611) (454,063)
Total stockholders' equity 12,655,900 17,116,124
Commitments (notes 9 and 15)
$ 22,844,025 27,206,578
See accompanying notes to consolidated financial statements.
<PAGE>
UNIQUE MOBILITY, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(unaudited)
Quarter Ended Nine Months Ended
December 31, December 31,
1999 1998 1999 1998
Revenue (note 11):
Contract services $ 343,226 384,301 1,158,649 1,129,629
Product sales 3,324,616 3,982,503 13,607,767 9,477,750
3,667,842 4,366,804 14,766,416 10,607,379
Operating costs and expenses:
Costs of contract services 168,173 315,631 905,617 1,013,701
Costs of product sales 3,121,035 3,677,497 11,746,959 8,828,014
Research and development 203,023 138,937 337,469 589,659
General and administrative 902,473 925,674 3,258,001 2,782,564
Write-down of investments - - 4,104,628 -
Amortization of goodwill 83,166 84,445 249,211 225,318
4,477,870 5,142,184 20,601,885 13,439,256
Operating loss (810,028) (775,380)(5,835,469)(2,831,877)
Other income (expense):
Interest income 9,448 12,095 47,600 92,680
Interest expense (120,558) (83,735) (360,497) (238,985)
Equity in loss of Taiwan joint
venture (note 5) - (108,616) (186,538) (308,905)
Equity in loss of Germany joint
venture (note 7) - - (93,632) -
Minority interest share of earnings
of consolidated subsidiary (18,796) (18,118) (55,689) (54,112)
Other (3,782) 3,086 (1,448) 5,475
(133,688) (195,288) (650,204) (503,847)
Net loss $ (943,716) (970,668)(6,485,673)(3,335,724)
Net loss per common share
basic and diluted $ (.06) (.06) (.39) (.21)
Weighted average number of shares
of common stock outstanding
(note 12) 16,574,409 15,979,473 16,514,551 15,883,242
See accompanying notes to consolidated financial statements.
<PAGE>
UNIQUE MOBILITY, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(unaudited)
Nine Months Ended December 31,
1999 1998
Cash flows used by operating activities:
Net loss $(6,485,673) (3,335,724)
Adjustments to reconcile net loss to net
cash used by operating activities:
Write-down of investments 4,104,628 -
Depreciation and amortization 1,596,830 1,296,513
Minority interest share of earnings of
consolidated subsidiary 55,689 54,112
Noncash compensation expense for common stock
issued for services 29,743 83,215
Equity in loss of Taiwan joint venture 186,538 308,905
Equity in loss of Germany joint venture 93,632 -
Loss (gain) on sale of property and equipment 3,785 (2,900)
Change in operating assets and liabilities:
Accounts receivable and costs and estimated
earnings in excess of billings on
uncompleted contracts 176,036 613,564
Inventories (105,530) (961,992)
Prepaid expenses and other current assets (84,740) 32,697
Accounts payable and other current
liabilities 55,711 (167,373)
Billings in excess of costs and estimated
earnings on uncompleted contracts 81,495 123,481
Net cash used by operating
activities (291,856) (1,955,502)
Cash used by investing activities:
Cash paid for acquisition of subsidiary, net - (3,848,640)
Acquisition of property and equipment (404,366) (3,056,117)
Proceeds from sale of assets 41,000 2,900
Increase in patent and trademark costs (45,200) (80,297)
Investment in other long-term assets (515,708) -
Net cash used by investing
activities $ (924,274) (6,982,154)
(Continued)
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UNIQUE MOBILITY, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows, Continued
(unaudited)
Nine Months Ended
December 31,
1999 1998
Cash provided by financing activities:
Proceeds from borrowings $ 57,166 6,444,399
Repayment of debt (751,879) (4,946,263)
Net borrowings on revolving line-of-credit 650,000 956,329
Repayment of notes receivable from officers 47,452 10,744
Proceeds from sale of common stock, net 488,828 -
Issuance of common stock upon exercise of
employee options, net of repayments 135,335 149,866
Issuance of common stock under employee stock
purchase plan 25,957 5,430
Issuance of common stock upon exercise of warrants 80,901 193,375
Distributions paid to holders of minority interest (50,511) (50,511)
Net cash provided by financing
activities 683,249 2,763,369
Decrease in cash and cash equivalents (532,881) (6,174,287)
Cash and cash equivalents at beginning of period 1,537,453 7,005,533
Cash and cash equivalents at end of period $ 1,004,572 831,246
Interest paid in cash during the period $ 363,030 222,258
Non-cash investing and financing transactions:
Cumulative translation adjustments of $67,339 and $16,882 were recorded for the
nine months ended December 31, 1999 and 1998, respectively.
In May 1999, the Company acquired a 33.6 percent ownership interest in a German
company. Pursuant to this transaction the Company issued 208,333 shares of
common stock with an aggregate value of $1,149,894 in exchange for its ownership
interest.
In April 1998, the Company purchased all of the outstanding stock of Franklin
Manufacturing Company for $4,000,000 cash and 286,282 shares of the Company's
common stock with a value of $2,247,316.
In accordance with the provisions of the Company's stock option plans, the
Company accepts as payment of the exercise price, mature shares of the Company's
common stock held by the option holder for a period of six months prior to the
date of the option exercise. For the nine months ended December 31, 1998, the
Company issued 15,870 shares of common stock for options exercised for an
aggregate exercise price of $15,870, for which the Company received 2,308 shares
of common stock as payment for the exercise price. The shares received were
recorded at cost as treasury stock and were subsequently retired.
In accordance with the provisions of the Company's stock option 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. For the nine months ended December 31, 1998, the Company
issued 250,362 shares of common stock for an aggregate exercise price of
$731,788 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 consolidated financial statements are unaudited; however,
in the opinion of management, all adjustments which were solely of a normal
recurring nature, necessary to a fair presentation 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 financial statement amounts have been reclassified for comparative
purposes.
(3) The estimated period to complete contracts in process ranged from one to
nineteen months at December 31, 1999, and from one to seven months at March
31, 1999. The Company expects to collect substantially all related accounts
receivable and costs and estimated earnings in excess of billings on
uncompleted contracts within twenty-one months. Contracts in process
consist of the following:
December 31, 1999 March 31, 1999
(unaudited)
Costs incurred on uncompleted
contracts $ 475,836 1,457,955
Estimated earnings 126,137 285,804
601,973 1,743,759
Less billings to date (581,008) (1,639,695)
$ 20,965 104,064
Included in the accompanying
balance sheets as follows:
Costs and estimated earnings
in excess of billings on
uncompleted contracts $ 171,853 173,457
Billings in excess of costs
and estimated earnings on
uncompleted contracts (150,888) (69,393)
$ (20,965) 104,064
(4) Inventories consist of:
December 31, 1999 March 31, 1999
(unaudited)
Raw materials $ 2,289,900 2,205,042
Work in process 455,897 452,653
Finished products 147,727 130,299
$ 2,893,524 2,787,994
<PAGE>
UNIQUE MOBILITY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(unaudited)
(5) Investment in Taiwan Joint Venture
On January 29, 1994, the Company, Kwang Yang Motor Co., Ltd., and
Turn-Luckily Technology Co., Ltd., entered into a joint venture agreement
providing for the formation, funding and operation of Taiwan UQM Electric
Co., Ltd., a company organized under the laws of the Republic of China.
Taiwan UQM was incorporated in April 1995. The Company owns a 38-1/4
percent interest in Taiwan UQM which was acquired through an initial
investment of $45,082. In 1995 and 1996 the Company invested an additional
$2,748,778 pursuant to capital calls by Taiwan UQM's Board of Directors,
raising its aggregate investment since inception to $2,793,860.
Since inception, Taiwan UQM has incurred substantial operating losses and
the Company has reported its proportionate share of such losses and foreign
exchange rate fluctuations as a reduction in the recorded value of its
investment in Taiwan UQM under the equity method of accounting. Because of
continued operating losses at September 30, 1999 the Company evaluated this
investment relative to its potential to achieve profitable operations over
the near-term and the Company's potential to recover the recorded value of
its investment. Based on its assessment of these factors and the
uncertainty of recovering its investment, on September 30, 1999 the Company
wrote down the carrying value of this investment from $1,476,233 to zero.
The Company does not intend to make any further investments in Taiwan UQM
and through its participation on Taiwan UQM's Board of Directors has the
ability to restrict or prevent future capital calls by Taiwan UQM.
(6) Investment in EV Global
In June of 1997, the Company acquired 400,000 shares of EV Global Motors
Company (EVG) common stock in exchange for 200,000 shares of the Company's
common stock which was valued at $1,000,000. The Company's investment in
EVG is accounted for under the cost method.
In June 1999, Unique acquired an approximately 9.5 percent participation in
a $5.225 million convertible note receivable from Windermere Eco
Development Limited, a Bahamian company ("WED") held by EVG, for $500,000
in cash. WED is an environmentally sensitive development of Windermere
Island in the Bahamas. The entire loan is convertible into approximately
50.4 percent of the total outstanding equity of WED. Therefore, if EVG
converts the loan, Unique will have the right to receive approximately 4.82
percent of the equity of WED.
Because of continuing operating losses reported by these investees at
September 30, 1999 the Company evaluated these investments relative to
their potential to achieve profitable operations over the near-term and the
Company's potential to recover the carrying value of each asset. Based on
its assessment of these factors, on September 30, 1999 the Company wrote
down the carrying value of EV Global from $1,000,000 to zero and the
carrying value of its interest in the WED note receivable from $515,708 to
zero.
<PAGE>
UNIQUE MOBILITY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(unaudited)
(7) Investment in Germany Joint Venture
In May, 1999, the Company and three other entities formed a German private
company, Unique Mobility Europa GmbH (Europa), to develop and manufacture a
battery-electric cargo and passenger vehicle. Europa was initially
capitalized with DM50,000 cash (US $9,572) and a contribution to surplus of
625,000 shares of Unique Mobility, Inc. common stock, of which 208,333 were
newly issued shares contributed by the Company in exchange for 33.6 percent
ownership interest in Europa.
On October 8, 1999 the Company entered into an agreement with the
Shareholder's of Europa providing for the reduction of its ownership
percentage to 5.9 percent in exchange for a funding commitment from one of
the shareholders in the amount of DM 3 million (USA $1,630,200) and the
reimbursement of $400,000 of organization costs incurred by the Company on
behalf of Europa. As a result of this agreement and the Company's
assessment of the potential for Europa to achieve profitable operations
over the near-term and the Company's potential to recover the carrying
value of its investment at September 30, 1999 the Company wrote down the
carrying value of its investment from $1,112,687 to zero.
(8) Other current liabilities consist of:
December 31, March 31,
1999 1999
(unaudited)
Accrued interest $ 25,256 28,623
Accrued legal and accounting fees 59,850 66,205
Accrued payroll, consulting, personal
property taxes and real estate taxes 440,539 268,729
Accrued executive compensation 324,866 -
Accrued material purchases 213,365 285,722
Other 143,041 303,219
$ 1,206,917 952,498
<PAGE>
UNIQUE MOBILITY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(unaudited)
(9) Long-term debt consists of:
December 31, March 31,
1999 1999
(unaudited)
Note payable to bank, payable in monthly
installments with interest at 8.65%; matures
July 2003; secured by land and building $ 880,469 903,338
Note payable to bank, payable in monthly
installments with interest at 9.1%; matures
October 2007; secured by land and building 636,577 676,652
Note payable to bank, payable in monthly
installments with interest at 8.5%; matures
October 2001; April, May, October and
December 2005; secured by equipment 1,257,884 1,451,242
Note payable to bank, payable in monthly
installments with interest at 8.125%; matures
July 2001; secured by accounts receivable,
inventory and equipment 494,792 729,167
Note payable to bank, payable in monthly
installments with interest at 7.70%; matures
March 2004; secured by equipment 1,306,235 1,500,000
Note payable to bank, payable in monthly
installments with interest at 9.50%;
matures June 2006; secured by equipment 54,158 -
Note payable to commercial lender, payable in
monthly installments with interest at 6.38%;
matures October 1999 - 50,648
Capital lease obligation - 13,781
Total long-term debt 4,630,115 5,324,828
Less current portion 958,589 928,701
Long-term debt, less current portion $ 3,671,526 4,396,127
Certain of the above loan agreements require the Company to achieve
specific financial and operating requirements. As of December 31, 1999, the
Company was in compliance with all covenants.
The annual aggregate maturities of long-term debt for the reminder of this
fiscal year and for each of the next five fiscal years and thereafter are
as follows:
2000 $ 233,988
2001 965,656
2002 762,854
2003 609,482
2004 661,616
Thereafter 1,396,519
$ 4,630,115
<PAGE>
UNIQUE MOBILITY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(unaudited)
Lines of credit
At December 31, 1999, the Company has lines of credit of $.75 million and
$2.5 million with available borrowing capacity of $.65 million and $.85
million, respectively. The $.75 million line of credit expires in October
2000. The $2.5 million line of credit is due on demand, but if no demand is
made, it is due August 15, 2000. Interest on the lines of credit is payable
monthly at prime plus .75% (9.25% at December 31, 1999) and prime less .50%
(8.00% at December 31, 1999), respectively. Both lines have various
covenants which limit the Company's ability to dispose of assets, merge
with another entity, and pledge trade receivables and inventories as
collateral. The Company is also required to maintain certain financial
ratios as defined in the agreements. Outstanding borrowings under both
lines of credit are secured by accounts receivable, inventory and general
intangibles, and are limited to certain percentages of eligible accounts
receivable and inventory.
(10) Common Stock Options and Warrants
Incentive and Non-Qualified Option Plans
The Company has reserved 6,104,000 shares of common stock for key
employees, consultants and key suppliers under its Incentive and
Non-Qualified Option Plans of 1992 and 1982. Under these option plans the
exercise price of each option is set at the fair market value of the common
stock on the date of grant and the maximum term of the options is 10 years
from the date of grant. Options granted to employees vest ratably over a
three-year period. The maximum number of options that may be granted to any
eligible employee during the term of the 1982 and 1992 plans is 1,000,000
options. Options granted under the Company's plans to employees require the
option holder to abide by certain Company policies which restrict their
ability to sell the underlying common stock.
The following table summarizes activity under the plans for the nine months
ended December 31, 1999:
Shares Under Weighted-Average
Option Exercise Price
Outstanding at March 31, 1999 3,037,554 5.49
Granted 50,000 4.38
Exercised (34,845) 3.88
Forfeited (76,519) 6.16
Outstanding at December 31, 1999 2,976,190 $ 5.48
Exercisable at December 31, 1999 1,914,164 $ 5.43
<PAGE>
UNIQUE MOBILITY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(unaudited)
The following table presents summarized information about stock options
outstanding at December 31, 1999:
Options Outstanding Options Exercisable
Weighted Weighted Weighted
Number Average Average Number Average
Range of Outstanding Remaining Exercise Exercisable Exercise
Exercise Prices at 12/31/99 Contractual Life Price at 12/31/99 Price
$0.50 - 1.00 23,959 1.2 years $0.75 23,959 $0.75
$2.25 - 3.31 528,473 5.9 years $3.06 393,649 $2.98
$3.50 - 5.00 1,135,275 6.6 years $4.23 601,097 $4.10
$5.38 - 8.13 1,288,483 6.1 years $7.65 895,459 $7.53
$0.50 - 8.13 2,976,190 6.2 years $5.48 1,914,164 $5.43
Non-Employee Director Stock Option Plan
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. Directors electing options grants in lieu of cash compensation
may elect option periods ranging from three years to ten years, and must
elect to receive options at least six months prior to the anticipated grant
date. The Company has reserved 500,000 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.
Option prices are equal to the fair market value of common shares at the
date of grant.
The following table presents summarized activity under the plan for the
nine months ended December 31, 1999:
Weighted
Shares Under Average
Option Exercise Price
Outstanding at March 31, 1999 253,333 5.66
Granted 9,275 4.25
Forfeited (221,333) 5.59
Outstanding at December 31, 1999 41,275 $ 5.68
Exercisable at December 31, 1999 16,000 $ 6.44
The following table presents summarized information about stock options
outstanding for non-employee directors:
Options Outstanding Options Exercisable
Weighted Weighted Weighted
Number Average Average Number Average
Range of Outstanding Remaining Exercise Exercisable Exercise
Exercise Prices at 12/31/99 Contractual Life Price at 12/31/99 Price
$4.25 - 5.13 25,275 9.1 years $4.76 5,333 $5.06
$7.13 16,000 7.7 years $7.13 10,667 $7.13
$4.25 - 7.13 41,275 8.5 years $5.68 16,000 $6.44
<PAGE>
UNIQUE MOBILITY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(unaudited)
The Company accounts for stock options granted to employees and directors
of the Company under the intrinsic value method. Stock options granted to
non-employees under the Company's 1992 Stock Option Plan are accounted for
under the fair value method. Had the Company reported compensation costs as
determined by the fair value method of accounting for option grants to
employees and directors, net loss and net loss per common share would have
been the pro forma amounts indicated in the following table:
Quarter Ended Nine Months Ended
December 31, December 31,
1999 1998 1999 1998
Net loss - as reported $ (943,716) (970,668)(6,485,673)(3,335,724)
Compensation expense - current
option grants (1,250) - (2,500) (120,283)
Compensation expense - prior
period option grants (248,971) (367,203)(1,065,626) (998,656)
Net loss - pro forma $(1,193,937)(1,337,871)(7,553,799)(4,454,663)
Net loss per common share -
as reported $ (.06) (.06) (.39) (.21)
Net loss per common share -
pro forma $ (.07) (.08) (.46) (.28)
The fair value of stock options granted was calculated using the Black
Scholes option pricing model based on the following weighted average
assumptions:
Quarter Ended Nine Months Ended
December 31, December 31,
1999 1998 1999 1998
Expected volatility - - 4.65% 48.5%
Expected dividend yield - - 0.0% 0.0%
Risk free interest rate - - 6.3% 5.8%
Expected life of option granted - - 3 years 6 years
Fair value of options granted as
computed under the Black
Scholes option pricing model - - $ 1.62 per $ 4.26 per
share share
Future pro forma compensation cost for the remainder of the current fiscal
year and each fiscal year thereafter, assuming no additional grants by the
Company to employees and directors, is as follows:
Pro Forma
Compensation
Expense
2000 $ 351,650
2001 $ 584,800
2002 $ 452,567
2003 $ 1,250
<PAGE>
UNIQUE MOBILITY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(unaudited)
During June 1999, the Company completed a private placement of 88,900
shares of common stock with an institutional investor. Cash proceeds to the
Company, net of offering costs was $488,828.
The Company completed a private placement in fiscal 1998 of 750,000 units
consisting of one common share and a warrant to purchase a common share at
an exercise price of $8.00 per share for a term of two years. Of the
750,000 units privately placed, 626,875 were issued in March 1998 and the
remaining 123,125 were issued in April 1998. Also in connection with the
1998 private placement, the placement agents were issued warrants in March
1998, to acquire 176,588 shares of the Company's common stock at an
exercise price of $8.00 per share. In December 1999, the Company offered
the warrant holders the opportunity to extend the expiration date of their
warrants by eighteen months, at any time prior to the expiration, upon
payment of the fair market value of the extension as determined by the
Black-Scholes option pricing model on the date of acceptance. At December
31, 1999, warrants to purchase 149,375 shares of common stock at the
exercise price of $8.00 per share had been extended resulting in cash
proceeds to the Company of $25,651. All of the warrants issued remain
outstanding as of December 31, 1999.
In connection with the 1997 private placement, the placement agents were
issued warrants in February 1997, to acquire 225,625 shares of the
Company's stock at an exercise price of $3.50 per share and warrants to
acquire 50,000 shares at an exercise price of $4.20 per share. The warrants
expire three years from the date of issuance. Warrants to acquire 43,875
shares of the Company's common stock at $3.50 per share remain outstanding
as of December 31, 1999.
In connection with the 1996 private placements, the placement agents were
issued warrants to acquire 50,000 shares of the Company's common stock at
$4.75 per share in February, 1996, 38,100 shares of the Company's common
stock at $5.00 per share in May, 1996, and 50,000 shares at $4.25 per share
in September, 1996. The warrants expire three years from the date of
issuance. During May 1999, warrants to acquire 13,000 shares of the
Company's common stock at $4.25 per share were exercised resulting in cash
proceeds to the Company of $55,250. The remaining 32,000 shares at $4.25
per share expired unexercised during the quarter ended September 30, 1999.
(11) The Company has historically derived significant revenue from one key
customer. The customer from which this revenue has been derived and the
percentage of total revenue for the quarter ended December 31, 1999 and
1998 was $856,053 or 23%, and $895,742 or 21%, respectively, and $3,235,202
or 22% and $2,058,003 or 19% for the nine months ended December 31, 1999
and 1998, respectively.
This customer also represented 13% and 15% of total accounts receivable at
December 31, 1999 and 1998, respectively.
Contract services revenue derived from contracts with agencies of the U.S.
Government and from sub-contracts with U.S. Government prime contractors
totaled $260,641 and $259,079 for the quarter ended December 31, 1999 and
1998, respectively, and $653,847 and $592,042 for the nine months ended
December 31, 1999 and 1998, respectively.
<PAGE>
UNIQUE MOBILITY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(unaudited)
(12) Net loss per common share amounts are based on the weighted average number
of common shares outstanding during the quarter and nine months ended
December 31, 1999 and 1998. Outstanding common stock options and warrants
were not included in the computation because the effect of such inclusion
would be antidilutive.
(13) Segments
The Company has three reportable segments: technology, mechanical products
and electronic products. The technology segment encompasses the Company's
technology-based operations including core research to advance its
technology, application engineering and product development and job shop
production of prototype components. The mechanical products segment
encompasses the manufacture and sale of permanent magnet motors, precision
gears, gear assemblies and related mechanical products. The electronic
products segment encompasses the manufacture and sale of wire harness
assemblies, electronic circuit board assemblies and electronic products.
During the quarter and nine months ended December 31, 1999, intersegment
sales were $90,542 and were eliminated in consolidation. The salaries of
the executive officers and corporate general and administrative expense is
allocated entirely to the technology segment.
The Company's reportable segments are strategic business units that offer
different products and services. They are managed separately because each
business requires different business strategies.
The following table summarizes significant financial statement information
for each of the reportable segments for the quarter ended December 31,
1999:
Mechanical Electronic
Technology Products Products Total
Revenue $ 507,842 451,748 2,708,252 3,667,842
Interest income 9,878 (430) - 9,448
Interest expense (23,212) (48,965) (48,381) (120,558)
Depreciation and
amortization (96,258) (232,547) (130,253) (459,058)
Goodwill amortization - (15,580) (67,586) (83,166)
Equity in loss of
Taiwan joint venture - - - -
Segment loss (412,813) (371,478) (159,425) (943,716)
Segment assets 4,482,627 6,464,793 11,896,605 22,844,025
Expenditures for
segment assets $ (58,340) (106,132) (42,186) (206,658)
<PAGE>
UNIQUE MOBILITY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(unaudited)
The following table summarizes significant financial statement information
for each of the reportable segments for the quarter ended December 31,
1998:
Mechanical Electronic
Technology Products Products Total
Revenue $ 415,719 1,219,307 2,731,778 4,366,804
Interest income 10,568 1,527 - 12,095
Interest expense (17,733) (44,339) (21,663) (83,735)
Depreciation and
amortization (98,599) (218,875) (86,581) (404,055)
Write-down of
investments - - - -
Goodwill amortization - (15,579) (68,866) (84,445)
Equity in loss of
Taiwan joint venture (108,616) - - (108,616)
Equity in loss of
Germany joint venture - - - -
Segment earnings (loss) (708,140) (268,027) 5,499 (970,668)
Segment assets 7,130,502 7,899,374 9,489,100 24,518,976
Expenditures for
segment assets $ (67,305) (281,932) (266,926) (616,163)
The following table summarizes significant financial statement information
for each of the reportable segments for the nine months ended December 31,
1999:
Mechanical Electronic
Technology Products Products Total
Revenue $ 1,557,705 2,881,152 10,327,559 14,766,416
Interest income 45,755 1,845 - 47,600
Interest expense (46,338) (148,866) (165,293) (360,497)
Depreciation and
amortization (277,367) (695,731) (374,521)(1,347,619)
Write-down of
investments (4,104,628) - - (4,104,628)
Goodwill amortization - (46,738) (202,473) (249,211)
Equity in loss of
Taiwan joint venture (186,538) - - (186,538)
Equity in loss of
Germany joint venture (93,632) - - (93,632)
Segment loss (6,083,520) (746,284) 344,131 (6,485,673)
Segment assets 4,482,627 6,464,793 11,896,605 22,844,025
Expenditures for
segment assets $ (210,401) (123,194) (115,971) (449,566)
<PAGE>
UNIQUE MOBILITY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(unaudited)
The following table summarizes significant financial statement information
for each of the reportable segments for the nine months ended December 31,
1998:
Mechanical Electronic
Technology Products Products Total
Revenue $ 1,555,404 2,422,553 6,629,422 10,607,379
Interest income 69,775 22,905 - 92,680
Interest expense (50,682) (114,109) (74,194) (238,985)
Depreciation and
amortization (298,632) (576,286) (196,277)(1,071,195)
Write-down of
investments - - - -
Goodwill amortization - (46,102) (179,216) (225,318)
Equity in loss of
Taiwan joint venture (308,905) - - (308,905)
Equity in loss of
Germany joint venture - - - -
Segment loss (2,194,000) (936,757) (204,967)(3,335,724)
Segment assets 7,130,502 7,899,374 9,489,100 24,518,976
Expenditures for
segment assets $ (424,163) (2,307,323) (404,928)(3,136,414)
(14) Fair Value of Financial Instruments
The following methods and assumptions were used to estimate the fair value
of each class of financial instruments:
Cash and cash equivalents, accounts receivable and accounts payable and
revolving line of credit:
The carrying amounts approximate fair value because of the short maturity
of these instruments.
Long-term debt:
The carrying amount of the Company's long-term debt approximates fair value
since the interest rate on this debt represents the current market rate for
similar financing available to the Company providing comparable security to
the lender.
(15) Commitments and Contingencies
Employment Agreements
The Company has entered into employment agreement with three of its
officers which expired on December 31, 1999 and with one officer which
expires April 30, 2001. The employment agreements for two of the officers
are expected to be renewed for another three years expiring December 31,
2002. One of the officers retired at December 31, 1999. The compensation
due this officer upon retirement
<PAGE>
UNIQUE MOBILITY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(unaudited)
under the provisions of his employment agreement is $324,866 which was
recorded in the Company's operating results during the quarter ended
September 30, 1999. The aggregate annual future compensation under these
agreements based on current salary levels, excluding the aforementioned
retirement payment, is $1,258,342.
Lease Commitments
The Company has entered into operating lease agreements for office space
and equipment which expire at various times through 2007. As of December
31, 1999, the future minimum lease payments under operating leases with
initial noncancelable terms in excess of one year for the remainder of the
fiscal year and for each of the next five fiscal years and thereafter are
as follows:
2000 $ 75,040
2001 279,937
2002 265,364
2003 251,444
2004 253,961
2005 252,144
Thereafter 504,276
$ 1,882,166
Rental expense under these leases totaled $71,793 and $63,543 for the
quarter ended December 31, 1999 and 1998, respectively and $215,379 and
$169,448 for the nine months ended December 31, 1999 and 1998,
respectively.
Uncertainty due to Year 2000 Issue
The Year 2000 issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize
the Year 2000 as 1900 or some other date, resulting in errors when
information using Year 2000 dates is processed. In addition, similar
problems may arise in some systems which use certain dates in 1999 to
represent something other than a date. The effects of the Year 2000 issue
may be experienced before, on, or after January 1, 2000, and, if not
addressed, the impact on operations and financial reporting may range from
minor errors to significant systems failures which could affect the
Company's ability to conduct normal business operations. There can be no
assurance that all aspects of the Year 2000 issue affecting the Company,
including those related to the efforts of customers, suppliers or other
third parties, will be fully resolved. Through the date of this report, the
Company has not experienced any problems arising from the effects of the
Year 2000 issue.
<PAGE>
UNIQUE MOBILITY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(unaudited)
(16) Reporting Comprehensive Income
The following table summarizes the Company's comprehensive loss for the
quarter and nine months ended December 31, 1999 and 1998:
Quarter Ended Nine Months Ended
December 31, December 31,
1999 1998 1999 1998
Net loss $(943,716) (970,668) (6,485,673)(3,335,724)
Other comprehensive
earnings - translation
adjustment - 116,402 67,339 16,882
Income tax effect - - - -
Comprehensive loss $(943,716) (854,266) (6,418,334)(3,318,842)
(17) Acquisition of Franklin Manufacturing Company
On April 30, 1998, the Company acquired all of the outstanding common stock
of Franklin Manufacturing Company (Franklin) for cash and shares of the
Company's common stock.
The acquisition was accounted for using the purchase method of accounting.
The unaudited revenue, net loss and loss per common share for the nine
months ended December 31, 1999 and the unaudited proforma comparable
information for the nine months ended December 31, 1998, assuming the
acquisition occurred on April 1, 1998, is as follows:
Nine Months Ended December 31,
1999 1998
Revenue $ 14,766,416 11,567,092
Net loss (6,485,673) (3,301,493)
Basic and diluted loss
per common share $ (.39) (.21)
The pro forma information does not necessarily represent the results that
would have occurred if the acquisition had been consummated on April 1,
1998.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This press release contains forward-looking statements that involve risks and
uncertainties. These statements may differ materially from actual future events
or results. Readers are referred to the Risk Factors section of the Registration
Statement on Form S-3 (File No. 333-78525) filed by the Company with the SEC,
which identifies important risk factors that could cause actual results to
differ from those contained in the forward-looking statements, including the
Company's ability to become profitable and its ability to obtain additional
financing, the Company's reliance on major customers and suppliers, and the
possibility that product liability insurance may become unavailable. These
forward-looking statements represent the Company's judgment as of the date of
the press release. The Company disclaims, however, any intent or obligation to
update these forward-looking statements.
Financial Condition
The Company's financial condition remained strong at December 31, 1999. Cash and
cash equivalents was $1,004,572 and working capital (the excess of current
assets over current liabilities) was $999,992 at December 31, 1999 compared with
$1,537,453 and $2,395,261,respectively, at March 31, 1999.
Accounts receivable declined $174,432 to $2,427,562 at December 31, 1999 from
$2,601,994 at March 31, 1999. The decrease is primarily attributable to the
lower levels of revenue during the third quarter ended December 31, 1999.
Inventories rose $105,530 to $2,893,524 at December 31, 1999 from $2,787,994 at
March 31, 1999 reflecting increases in raw material and finished good
inventories associated with higher sales levels for the year-to-date period and
the effect of certain customers reduced production requirements in the third
quarter.
Prepaid expenses declined to $95,121 at December 31, 1999 from $248,441 at March
31, 1999 reflecting the periodic expensing of prepaid insurance premium costs on
the Compan's commercial insurance coverages.
Other current assets rose $178,532 to $519,190 at December 31, 1999 from
$340,658 at March 31, 1999 reflecting amounts due from Haco Trading Ltd. arising
from the Company's reduction in its ownership interest in Unique Mobility Europa
GmbH.
The Company invested $193,596 and $404,366 for the acquisition of property and
equipment during the quarter and nine months ended December 31, 1999,
respectively, compared to $597,866 and $3,056,117 for the quarter and nine
months ended December 31, 1998. The decrease reflects higher levels of capital
expenditures in the comparable prior year periods arising from investments in
manufacturing equipment and the construction of a manufacturing plant by the
mechanical products segment, investments in manufacturing equipment and tooling
by the electronic products segment, and investments in equipment by the
technology segment.
During the second quarter, the Company evaluated its investments in three
long-term investments, Taiwan UQM Electric Co., Ltd., Unique Mobility Europa
GmbH and EV Global Motors Company and their related operations relative to each
investments potential to achieve profitable operations over the near term and
the Company's ability to recover the carrying value of its investment in each
entity.
Based on this evaluation, investment in Taiwan joint venture declined $1,595,432
to zero at December 31, 1999 reflecting the Company's proportionate share of
operating losses during the six months ended September 30, 1999 of $186,538 and
the Company's impairment of the remaining carrying value of this investment of
$1,476,233. Similarly, investment in EV Global declined $1,000,000 to zero at
December 31, 1999. The Company also impaired its approximately 9.5 percent
participation interest in a $5.225 million convertible note receivable from
Windermere Eco Development, Ltd. ("WED") held by EV Global reducing its carrying
value of the note receivable from $515,708 to zero at December 31, 1999.
On October 8, 1999, the Company entered into an agreement with the shareholder's
of Europa providing for the reduction of its ownership interest to 5.9 percent
in exchange for a funding commitment from one of the shareholders in the amount
of DM 3,000,000 (USD$1,630,200) and the reimbursement of $400,000 of
organization costs incurred by the Company on behalf of Europa. As a result of
this transaction and the Company's evaluation of this investment described
above, the Company reduced the carrying value of its investment from $1,112,687
to zero.
Patent and trademark costs rose $19,704 to $705,899 at December 31, 1999
reflecting expenditures for the filing of patents during the nine months ended
December 31, 1999.
Goodwill, net of accumulated amortization, declined to $6,078,629 at December
31, 1999 from $6,327,841 at March 31, 1999 due to the amortization of this asset
over its 20 year useful life.
Accounts payable declined $198,708 to $2,045,436 at December 31, 1999 from
$2,244,144 at March 31, 1999. The decrease is primarily attributable to lower
sales levels for the third quarter.
Other current liabilities increased $254,419 to $1,206,917 at December 31, 1999
from $952,498 at March 31, 1999. The increase is primarily attributable to the
accrual of compensation payable to the Company's former Chief Executive Officer.
Revolving line-of-credit rose to $1,750,000 at December 31, 1999 due to expanded
working capital requirements during the nine months ended December 31, 1999
arising from higher revenue and inventory levels at the Company's Franklin
Manufacturing unit and higher inventory levels at the Company's Unique Power
Products unit.
Billings in excess of costs and estimated earnings on uncompleted contracts rose
$81,495 to $150,888 at December 31, 1999 from $69,393 at March 31, 1999
reflecting the prepayments by customers for engineering services commenced
during the nine months ended December 31, 1999.
Long-term debt declined $724,601 to $3,671,526 at December 31, 1999 primarily
due to principal repayments on the Company's term bank debt during the nine
month period.
Common stock and additional paid-in capital increased to $165,748 and
$45,319,531 at December 31, 1999, respectively, compared to $162,230 and
$43,412,390 at March 31, 1999. The increases were due to the sale of common
stock to investors in the amount of $488,828; the issuance of common stock in
exchange for an ownership interest in Europa of $1,149,894; proceeds received
upon the exercise of warrants of $80,901; and sales of common stock to employees
and consultants through the Company's benefit plans and the exercise of options
of $161,293.
Results of Operations
Operations for the quarter ended December 31, 1999, resulted in a net loss of
$943,716 or $.06 per share compared to a net loss of $970,668 or $0.06 per share
for the quarter ended December 31, 1998. Operations for the nine months ended
December 31, 1999 resulted in a net loss of $6,485,673 or $0.39 per share
compared to a net loss of $3,335,724 or $0.21 per share for the nine months
ended December 31, 1998.
Operations for the nine months ended December 31, 1999 were adversely impacted
by the write-off of the Company's investments in Taiwan UQM, Europa, EV Global
and WED which resulted in a charge to earnings of $4,104,628 or $0.25 per share.
Total revenue for the quarter ended December 31, 1999 declined 16 percent to
$3,667,842 from $4,366,804 for the comparable quarter last year. For the nine
months ended December 31, 1999 total revenue rose 39 percent to $14,766,416
compared to $10,607,379 for the comparable period last year.
Product sales for the quarter and nine months ended December 31, 1999 were
$3,324,616 and $13,607,767, respectively, compared to $3,982,503 and $9,477,750
for the comparable periods last year. The decline in product sales for the
quarter was primarily attributable to a 63 percent decline in revenue in the
Company's mechanical product segment due to sharply lower product shipments to
agricultural sector customers. Revenue growth for the nine months ended December
31, 1999 was fueled by growth in the Company's mechanical products and
electronic products segments. Mechanical product segment revenue for the nine
months ended December 31, 1999 rose to $2,881,152 compared to $2,422,553 for the
comparable period last year. The increase in product sales versus the prior year
comparable amount is primarily due to the launch of motor production operations
earlier this year which was offset, in part, by weaker sales to agricultural
sector customers. Electronic product segment revenue for the nine months ended
December 31, 1999 rose to $10,327,559 compared to $6,629,422 for the comparable
period last year. The increase is primarily attributable to growth in the
automotive sector with existing customers and the addition of new customers in
the automotive and industrial sectors.
Contract services revenue declined $41,075 or 11 percent to $343,226 during the
third quarter and rose $29,020 or 3 percent to $1,158,649 for the nine months
ended December 31, 1999. The increase for the third quarter and year-to-date
period is primarily attributable to the launch of two multi-year government
sponsored development programs and generally stronger demand for sponsored
engineering programs.
Gross profit margins for the third quarter and nine months ended December 31,
1999 were 10.3 percent and 14.3 percent, respectively, compared to a gross
profit margin of 8.6 percent for the comparable quarter last year and gross
profit margin of 7.2 percent for the comparable nine month period last year.
Gross profit margins on contract services during the quarter and nine months
ended December 31, 1999 were 51.0 percent and 21.8 percent, respectively,
compared to 17.9 percent and 10.3 percent for the comparable periods last year.
The improvement in contract services margins is attributable to reduced levels
of cost overruns on development programs and improved pricing on development
projects in process. Gross profit margins on product sales for the third quarter
and year-to-date period were 6.1 percent and 13.7 percent, respectively,
compared to a gross profit margin of 7.7 percent for the comparable quarter last
year and a gross profit margin of 6.9 percent for the comparable nine month
period last year. The decline in gross profit margins on product sales for the
quarter is attributable to less favorable overhead absorption arising from lower
revenue levels for the quarter. The increase in gross profit margins on product
sales for the nine month period is attributable to improved overhead absorption
and production cost improvements at the Company's Franklin Manufacturing unit as
well as improved pricing on motor products and a more favorable product mix on
gearing products at the Company's Unique Power Products unit.
Research and development expenditures during the third quarter rose $64,086 to
$203,023 and declined $252,190 to $337,469 for the nine month period ended
December 31, 1999. The increase for the quarter is attributable to a focused
product development effort during the quarter. The decrease for the nine month
period is generally attributable to internally-funded development expenditures
on the product launch for Invacare Corporation during the comparable prior year
period which have decreased substantially since the launch of production during
the fourth quarter last year.
General and administrative expense for the third quarter declined $23,201 to
$902,473 compared to $925,674 for the comparable quarter last year and rose
$475,437 to $3,258,001 for the nine months ended December 31, 1999 compared to
$2,782,564 for the comparable nine month period last year. The increase for the
nine month period is primarily attributable to the accrual of retirement
compensation payable to the Company's former Chief Executive Officer under the
terms of his employment agreement and the write-off of an uncollectible account
receivable from a customer.
Write-down of investments for the nine months ended December 31, 1999 represents
charges resulting from the Company's impairment of its investment in EV Global
Motors Company, Unique Mobility Europa GmbH and Taiwan UQM Electric Co., Ltd.
See also "Financial Condition" above.
Interest expense rose $36,823 to $120,558 for the quarter ended December 31,
1999 and $121,512 to $360,497 for the nine months ended December 31, 1999,
respectively. The increase for the quarter is attributable to higher borrowing
levels on the Company's line-of-credit associated with higher levels of revenue
and associated accounts receivable. The increase for the nine month period is
attributable to higher levels of short-term and long-term debt during the
current period versus the same period last year.
Equity in loss of Taiwan joint venture declined to $186,538 for the nine months
ended December 31, 1999 compared to $308,905, respectively, for the comparable
period last year. The decrease is due to the Company's writedown of its
investment in Taiwan UQM during the second quarter, at which time it ceased
recording its pro rata share of the operating losses of Taiwan UQM after
September 30, 1999.
Equity in loss of Germany joint venture was $93,632 for the nine months ended
December 31, 1999. The increase is attributable to the Company's recording of
its proportionate share of the losses incurred by Unique Mobility Europa GmbH
prior to reducing its ownership interest early in the third quarter.
Liquidity and Capital Resources
The Company's cash balances and liquidity throughout the quarter and nine months
ended December 31, 1999 were adequate to meet operating needs. For the quarter
ended December 31, 1999 net cash provided by operations was $108,543 compared to
net cash used by operations in the same quarter of the prior year of $502,875.
For the nine months ended December 31, 1999 net cash used by operations was
$291,856 compared to $1,955,502 for the prior year. The increase for the quarter
is primarily attributable to the collection of accounts receivable and a
reduction in the level of costs in excess of billings on uncompleted contracts.
The decrease for the nine month period is primarily attributable to reduced
levels of cash used to fund operating losses, improved collection of accounts
receivable and lower levels of inventory. Cash used by investing activities for
the quarter and nine month period amounted to $165,658 and $924,274,
respectively. The decrease for the nine month period is attributable to the
acquisition of Franklin Manufacturing Company, the construction of a
manufacturing plant in Frederick, Colorado and related equipment purchases
during the comparable nine month period last year. The Company's cash
requirements for the nine months ended December 31, 1999 were funded primarily
through the sale of common stock to investors and borrowings on the Company's
line-of-credit.
During the second quarter the Company wrote-down its investments in EV Global
Motors Company and its related investment in Winderemere ECO Development, Ltd.,
Unique Mobility Europa GmbH and Taiwan UQM Electric Co., Ltd. as a result of its
evaluation of each investment's potential to achieve profitable operations over
the near term and the Company's ability to recover the carrying value of its
investment. Pursuant to the terms of the agreement governing the future
operations of Unique Mobility Europa GmbH the Company reduced its ownership
stake to 5.8 percent and has no obligation to fund the future operations of this
entity. Similarly, the Company has no future funding obligations to either EV
Global Motors Company or Windermere ECO Development, Ltd. Pursuant to the terms
of the Joint Venture Agreement governing the operations of Taiwan UQM Electric
Co., Ltd. upon the unanimous vote of the directors of Taiwan UQM the
shareholders of Taiwan UQM may be obligated to contribute additional capital.
The Company holds two seats on the board of directors of Taiwan UQM and
therefore has the ability to restrict or eliminate future capital calls by
Taiwan UQM. However, in the event the other shareholders of Taiwan UQM elect to
contribute additional capital to fund Taiwan UQM's future operations the Company
will suffer a dilution of its ownership interest.
The Company expects to fund its future working capital requirement through a
combination of existing cash resources, cash flow generated from operations, if
any, and borrowings on short-term bank lines-of-credit. The Company believes its
existing cash resources and bank lines-of-credit are sufficient to fund its
operations for the forseeable future.
For the longer-term, the Company expects to continue its strategy of growing its
business through expanding its product line of permanent magnet motors and
controllers, securing production orders from new and existing customers for gear
and component assemblies, manufacture design and introduce new products for
manufacture, seek strategic alliances to accelerate the commercialization of its
technology and pursue synergistic and accretive acquisitions. The Company
expects to finance its future growth from existing cash resources, cash flow
from operations, if any, and through the issuance of equity or debt securities
or a combination thereof. There can, however, be no assurance that such
financing or capital will be available on terms acceptable to the Company. In
the event financing or capital for future growth as envisioned under the
Company's strategy is not available, the Company believes it can configure its
operations such that existing cash balances and cash flow from operations will
be sufficient to meet its operating requirements.
Year 2000 Issue
The Year 2000 presents issues because many computer hardware and software
systems use only the last two digits to refer to a calendar year. Consequently,
these systems may fail to process dates correctly after December 31, 1999, which
may cause systems failures. Through the date of this report the Company has not
experienced any problems arising from the effects of the Year 2000 issue.
PART II - OTHER INFORMATION
Item 3. Quantitative and Qualitative Disclosure About Market Risks
Market risk is the potential loss arising from adverse changes in market rates
and prices, such as foreign exchange and interest rates. The Company does not
use financial instruments to any degree to manage these risks and does not hold
or issue financial instruments for trading purposes. Subsequently, all of the
Company's product sales, and related receivables are payable in U.S. dollars.
The Company is subject to interest rate risk on its debt obligations and notes
receivable, all of which have fixed interest rates. Interest rates on these
instruments approximate current market rates as of December 31, 1999.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial data schedule
(b) Reports on Form 8-K
Current Report dated October 14, 1999 regarding the writedown of
the Company's investment in certain joint ventures.
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: January 31, 2000 By: /s/Donald A. French
Donald A. French
Treasurer
(Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS OF UNIQUE MOBILITY, INC. AND CONSOLIDATED
SUBSIDIARIES AS OF DECEMBER 31, 1999, AND THE CONSOLIDATED STATEMENTS OF
OPERATIONS FOR THE QUARTER AND NINE MONTHS ENDED DECEMBER 31, 1999, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-END> DEC-31-1999
<CASH> 1,004,572
<SECURITIES> 0
<RECEIVABLES> 2,427,562
<ALLOWANCES> 0
<INVENTORY> 3,065,377
<CURRENT-ASSETS> 7,111,822
<PP&E> 13,854,898
<DEPRECIATION> 4,944,104
<TOTAL-ASSETS> 22,844,025
<CURRENT-LIABILITIES> 6,111,830
<BONDS> 3,671,526
0
0
<COMMON> 45,485,278
<OTHER-SE> (32,829,378)
<TOTAL-LIABILITY-AND-EQUITY> 22,844,025
<SALES> 3,324,616
<TOTAL-REVENUES> 3,667,842
<CGS> 3,289,208
<TOTAL-COSTS> 4,477,870
<OTHER-EXPENSES> 13,130
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 120,558
<INCOME-PRETAX> (943,716)
<INCOME-TAX> 0
<INCOME-CONTINUING> (943,716)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (943,716)
<EPS-BASIC> (.06)
<EPS-DILUTED> (.06)
</TABLE>
