<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
-------------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
------------------------- ----------------------
Commission File Number 0-21926
---------------------------------------------------------
AER ENERGY RESOURCES, INC.
--------------------------
(Exact name of registrant as specified in its charter)
Georgia 34-1621925
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4600 Highlands Parkway, Suite G, Smyrna, Georgia 30082
----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(770) 433-2127
----------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
- ------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
---- ----
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.
There were 24,791,763 shares of Common Stock outstanding as of October 31, 1997.
<PAGE> 2
AER ENERGY RESOURCES, INC.
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1997
INDEX
<TABLE>
<CAPTION>
Page
----
PART I - FINANCIAL INFORMATION
<S> <C>
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
- ------- --------------------------------
Condensed Balance Sheets - September 30, 1997 and December 31, 1996. 3
Condensed Statements of Operations - Three Months Ended September 30, 4
1997 and 1996, Nine Months Ended September 30, 1997 and 1996, and Period From July
17, 1989 (Date of Inception) to September 30, 1997.
Condensed Statements of Cash Flows - Nine Months Ended September 30, 5
1997 and 1996 and Period From July 17, 1989 (Date of Inception)
to September 30, 1997.
Notes to Condensed Financial Statements - September 30, 1997. 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 8
- ------- ---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 13
- ------- --------------------------------
</TABLE>
Page 2
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
AER ENERGY RESOURCES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------ -------------
ASSETS (Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents ........................................... $ 12,250,411 $ 18,728,427
Trade accounts receivable (less allowances of $2,500 at September 30,
1997 and $2,411 at December 31, 1996) ............................. 79,987 3,475
Inventories ......................................................... 210,251 100,399
Prepaid expenses .................................................... 137,965 178,137
------------ ------------
Total current assets ................................................... 12,678,614 19,010,438
Equipment and improvements:
Machinery and equipment ............................................. 3,241,621 2,993,555
Office equipment .................................................... 463,956 445,926
Leasehold improvements .............................................. 254,766 254,766
------------ ------------
3,960,343 3,694,247
Less accumulated depreciation ....................................... 2,427,836 2,033,392
------------ ------------
1,532,507 1,660,855
Other long term assets ................................................. 16,841 16,841
------------ ------------
Total assets ........................................................... $ 14,227,962 $ 20,688,134
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable .................................................... $ 175,158 $ 168,911
Accrued royalties - related party ................................... 25,000 30,000
Other accrued expenses .............................................. 358,642 309,855
------------ ------------
Total current liabilities .............................................. 558,800 508,766
Deferred rental expense ................................................ 2,914 2,957
Stockholders' equity:
Convertible debentures .............................................. -- 909,198
Preferred stock, no par value:
Authorized - 10,000,000 shares; no shares issued and outstanding . -- --
Common Stock, no par value:
Authorized - 100,000,000 shares; issued and outstanding -
24,791,763 shares at September 30, 1997 and 24,276,080 shares at
December 31, 1996 .............................................. 66,519,347 65,675,743
Notes receivable from common stock sales ............................ (71,875) (71,875)
Unearned stock compensation ......................................... (155,227) (328,455)
Deficit accumulated during the development stage .................... (52,625,997) (46,008,200)
------------ ------------
Total stockholders' equity ............................................. 13,666,248 20,176,411
------------ ------------
Total liabilities and stockholders' equity ............................. $ 14,227,962 $ 20,688,134
============ ============
</TABLE>
Note: The condensed balance sheet at December 31, 1996 has been derived from the
audited financial statements of AER Energy Resources, Inc. at that date but does
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements.
See notes to condensed financial statements.
Page 3
<PAGE> 4
AER ENERGY RESOURCES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
PERIOD FROM
JULY 17, 1989
THREE MONTHS ENDED NINE MONTHS ENDED (DATE OF
SEPTEMBER 30, SEPTEMBER 30, INCEPTION) TO
---------------------------- ----------------------------- SEPTEMBER 30,
1997 1996 1997 1996 1997
------------ ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues ................. $ 82,090 $ 1,463 $ 105,808 $ 21,554 $ 335,583
Cost of sales ............ 988,187 214,008 1,961,304 1,146,389 6,045,191
------------ ------------ ------------ ------------ ------------
Gross margin ............. (906,097) (212,545) (1,855,496) (1,124,835) (5,709,608)
Costs and expenses:
Research and development
- related party ....... -- -- -- -- 1,145,913
- other ............... 943,916 1,186,416 3,168,390 2,891,076 28,715,257
Marketing, general and
administrative
- related party ....... 21,717 24,953 70,767 124,350 1,213,868
- other ............... 705,926 670,377 2,161,112 2,149,111 18,586,151
------------ ------------ ------------ ------------ ------------
Total costs and expenses . 1,671,559 1,881,746 5,400,269 5,164,537 49,661,189
------------ ------------ ------------ ------------ ------------
Operating loss ........... (2,577,656) (2,094,291) (7,255,765) (6,289,372) (55,370,797)
Interest income .......... 190,798 299,024 659,405 788,848 3,345,803
Interest expense
- related parties ..... -- -- -- -- (264,445)
------------ ------------ ------------ ------------ ------------
Net loss ................. $ (2,386,858) $ (1,795,267) $ (6,596,360) $ (5,500,524) $(52,289,439)
============ ============ ============ ============ ============
Net loss per share ....... $ (0.10) $ (0.07) $ (0.27) $ (0.25) $ (3.79)
============ ============ ============ ============ ============
Weighted average shares
outstanding ............ 24,791,763 24,058,133 24,573,637 22,178,701 13,781,109
</TABLE>
See notes to condensed financial statements.
Page 4
<PAGE> 5
AER ENERGY RESOURCES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
PERIOD FROM
JULY 17, 1989
(DATE OF
NINE MONTHS ENDED SEPTEMBER 30, INCEPTION) TO
------------------------------ SEPTEMBER 30,
1997 1996 1997
------------- ------------- -------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net loss ................................................ $ (6,596,360) $ (5,500,524) $(52,289,439)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization ......................... 394,444 414,583 2,823,843
Amortization of unearned stock compensation ........... 86,197 112,170 597,664
Grant of compensatory stock options ................... -- -- 14,063
Loss on disposal of equipment ......................... -- 7,890 38,591
Deferred rental expense ............................... (43) (3,456) 2,914
Accretion of discount on marketable securities ........ -- -- (187,407)
Changes in operating assets and liabilities:
Trade accounts receivable ........................... (76,512) 6,748 (79,987)
Inventories ......................................... (109,852) 72,411 (210,251)
Prepaid expenses and other current assets ........... 40,172 (62,167) (138,275)
Accounts payable .................................... 6,247 (203,149) 175,158
Accrued royalties payable-related party ............. (5,000) (35,000) 25,000
Other current liabilities ........................... 48,787 (7,362) 517,576
------------ ------------ ------------
Net cash used in operating activities ................... (6,211,920) (5,197,856) (48,710,550)
INVESTING ACTIVITIES:
Purchases of equipment and improvements ................. (266,096) (101,120) (4,021,268)
Purchase of marketable securities ....................... -- -- (11,512,296)
Purchase of license agreement ........................... -- -- (250,000)
Proceeds from marketable securities ..................... -- -- 11,700,000
Changes in other assets ................................. -- -- (140,501)
------------ ------------ ------------
Net cash used in investing activities ................... (266,096) (101,120) (4,224,065)
FINANCING ACTIVITIES:
Proceeds from revolving credit note to related parties .. -- -- 5,430,000
Issuance of convertible debentures, net of issuance costs -- -- 9,834,500
Payments on notes payable to related parties ............ -- -- (1,150,000)
Payments received on promissory notes ................... -- -- 57,425
Issuance of common stock, exercise of stock options ..... -- 12,440 133,546
Issuance of common stock, net of issuance costs ......... -- 9,365,217 50,879,555
------------ ------------ ------------
Net cash provided by financing activities ............... -- 9,377,657 65,185,026
------------ ------------ ------------
(Decrease) increase in cash and cash equivalents ........ (6,478,016) 4,078,681 12,250,411
Cash and cash equivalents at beginning of period ........ 18,728,427 16,417,152 --
------------ ------------ ------------
Cash and cash equivalents at end of period .............. $ 12,250,411 $ 20,495,833 $ 12,250,411
============ ============ ============
</TABLE>
See notes to condensed financial statements.
Page 5
<PAGE> 6
AER ENERGY RESOURCES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 1997
1. BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. These financial statements should be read in conjunction with the
Company's audited financial statements included in the Company's Annual Report
on Form 10-K filed with the Securities and Exchange Commission for the year
ended December 31, 1996. Operating results for the three and nine month periods
ended September 30, 1997 are not necessarily indicative of the results that may
be expected for the year ended December 31, 1997 or any interim period.
2. SIGNIFICANT ACCOUNTING POLICIES
Description of Business
AER Energy Resources, Inc. was incorporated on July 17, 1989 and since
inception has engaged in the development and commercialization of high energy
density, rechargeable zinc-air batteries. The Company's operations to date have
primarily been focused on developing and updating the technology, setting up the
manufacturing process, testing and selling zinc-air batteries, recruiting
personnel and similar activities. The Company began selling its first product in
August 1994. Sales from August 1994 through September 30, 1997 have been
minimal. Until significant product sales occur, the Company is considered to be
a development stage company for financial reporting purposes.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash, bank deposits and highly
liquid investments with maturities of three months or less when purchased and
are stated at cost, which approximates market.
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<PAGE> 7
Inventories
The Company's inventory has been valued at the lower of cost or market,
using the first in, first out method. The components of inventory are listed
below.
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- ------------
<S> <C> <C>
Raw material $176,207 $ 95,814
Work in process 34,044 4,585
-------- --------
Total $210,251 $100,399
======== ========
</TABLE>
Use of Estimates
In accordance with FASB Statement No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,"
the Company records impairment losses on long-lived assets used in operations
when events and circumstances indicate that the assets might be impaired and the
undiscounted cash flows estimated to be generated by those assets are less than
the carrying amounts of those assets. Based on the Company's estimate of future
undiscounted cash flows, the Company expects to recover the carrying amounts of
its fixed assets. Nonetheless, it is reasonably possible that the estimate of
undiscounted cash flows may change in the near term resulting in the need to
write-down those assets to fair value. During the three and nine months ended
September 30, 1996, the Company recorded a write-off of obsolete equipment with
a net book value of $0 and $7,890, respectively, which was included in
marketing, general and administrative expenses.
Page 7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
Since its inception, the Company has been a development stage company
primarily engaged in developing rechargeable zinc-air battery technology,
establishing the manufacturing process, defining and developing market
opportunities, testing and selling rechargeable zinc-air batteries and
recruiting and training personnel. Much of the Company's marketing focus over
the last few years has been to seek a commitment from one or more original
equipment manufacturers (OEMs) of portable computers to design a product that is
electrically and mechanically compatible with an AER Energy rechargeable
zinc-air battery. Management now believes it will be more difficult than
originally anticipated to obtain such a commitment from a portable computer OEM
due in large part to the growth in the power demands of portable computers. As a
result, the Company has begun to expand its marketing focus to include
additional electronic products that could benefit from the key attributes of AER
Energy's zinc-air technology but require less power. During the second and
fourth quarters of 1997, the Company announced two such products: satellite
telephones and data acquisition devices.
The Company's AER Energy PowerSlice Pro(TM) accessory battery is
currently being supplied to end-users as a satellite telephone accessory by
Alegna, Inc. under private label as the PowerLink(TM). The PowerLink battery is
designed for the OmniQuestTM satellite telephone system manufactured by
Mitsubishi Electric Corporation.
In October 1997, the Company announced a new application of its
PowerSlice Pro battery -- powering a remote data acquisition device. Bartizan
Data Systems LLC selected the PowerSlice Pro to use with its Expo! The Database
Builder(TM), a remote data acquisition device used at tradeshows to scan
attendee badges and compile lead information.
The AER Energy PowerSlice LX(TM) battery, an accessory battery designed
for the Hewlett-Packard OmniBook 600 and 800 portable computers, will no longer
be offered for sale as of November 1997. The PowerSlice LX has an older cell
design and is not compatible with the most current, more powerful version of the
OmniBook 800 portable computer.
The Company has recorded minimal revenues from the sales PowerSlice
Pro and PowerSlice LX batteries for the three and nine-month periods ended
September 30, 1997. The Company has incurred cumulative losses of $52.3 million
since inception to September 30, 1997 and expects to continue to incur
operating losses at least through the end of 1998.
The Company was formed to develop and commercialize rechargeable
zinc-air batteries for portable electronic products using technology licensed
from Dreisbach Electromotive, Inc. ("DEMI"). DEMI was formed in 1982 to conduct
research and development on electric vehicles and battery systems utilizing,
among others, zinc-air technology. DEMI's zinc-air development programs included
applications for electric vehicles and portable products. The Company has
Page 8
<PAGE> 9
licensed, through DEMI (the "DEMI License"), the rights to use certain DEMI
technology including zinc-air, in non-motor vehicle applications, while DEMI has
retained the rights to zinc-air technology for motor vehicle applications and to
its other technologies for motor vehicle applications and batteries producing
over 500 watts continuous power output. Effective October 15, 1993, the DEMI
License was amended so that, under certain circumstances, some or all of the
royalties due under the DEMI License are payable to the shareholders of DEMI
rather than to DEMI.
RESULTS OF OPERATIONS
Three Months Ended September 30, 1997 and 1996
The Company generated net revenues of $82,000 for the three months
ended September 30, 1997, compared to $1,000 for the three months ended
September 30, 1996. The revenues for the quarter ended September 30, 1997
resulted primarily from the sales of PowerLink batteries.
The Company's cost of sales for the three months ended September 30,
1997 increased to $988,000 from $214,000 for the three months ended September
30, 1996. The high cost of sales relative to revenues is primarily due to the
manufacturing inefficiencies and high material costs resulting from low
production volumes.
Research and development expenses decreased to $944,000 for the three
months ended September 30, 1997 from $1,186,000 for the same period in 1996.
This decrease was due in part to a $368,000 reduction in the manufacturing
overhead costs allocated to research and development during the quarter ended
September 30, 1997 as compared to the same period in 1996. This allocation in
1996 reflected the use of manufacturing facilities for technology development
and product testing. The Company also experienced a $30,000 decrease in
material, design and tooling costs. These decreases were partially offset by
increases of $83,000 in personnel-related costs and $68,000 in legal costs
related to the Company's patent activity.
Marketing, general and administrative expenses increased to $728,000
for the quarter ended September 30, 1997 from $695,000 for the same period in
1996. In the quarter ended September 30, 1997, the Company experienced a $58,000
increase in personnel-related expenses and a $28,000 increase in marketing,
advertising and public relations costs compared to the same quarter in 1996.
These increases were partially offset by a $26,000 decrease in facility expenses
and a $24,000 reduction in the write-off of obsolete inventory.
Nine Months Ended September 30, 1997 and 1996
The Company generated net revenues of $106,000 for the nine months
ended September 30, 1997 as compared to $22,000 for the same period in 1996.
The Company's cost of sales for the nine months ended September 30,
1997 was
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<PAGE> 10
$1,961,000 as compared to $1,146,000 for the same period in 1996. The high cost
of sales relative to revenues is primarily due to low production volumes.
Research and development expenses increased to $3,168,000 for the
nine months ended September 30, 1997 from $2,891,000 for the same period in
1996. This increase was due in part to a $136,000 increase in personnel-related
costs, a $74,000 increase in legal fees related to patent activity, a $47,000
increase in material, design, and tooling costs and a $37,000 increase in
allocated facility costs. These increases were partially offset by a $12,000
decrease in depreciation expense and an $11,000 reduction in travel costs.
Marketing, general and administrative expenses decreased to
$2,232,000 for the nine months ended September 30, 1997 from $2,273,000 for the
same period in 1996. This decrease was due primarily to a $63,000 reduction in
allocated facility costs, a $74,000 decrease in warranty expense, a $64,000
decrease in the write-off of obsolete inventory, and a $54,000 decrease in
minimum royalty expense pursuant to the DEMI License. These decreases were
partially offset by a $175,000 increase in personnel-related costs and a $34,000
credit to bad debt expense in the nine-month period ended September 30, 1996
resulting from the collection of a receivable that had been written off.
LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION
As of September 30, 1997, the Company had cash and cash equivalents of
$12.3 million. The Company anticipates using these funds as needed to fund
capital equipment purchases, research and development efforts, sales and
marketing activities, production of commercial and prototype zinc-air battery
products, development of relationships with OEMs, working capital and general
corporate purposes as determined by management. In the interim, the Company
invests any excess funds in government securities and other short-term,
investment grade, interest-bearing instruments.
Net cash used in operating activities increased to $6.2 million for the
nine months ended September 30, 1997 from $5.2 million for the same period in
1996, primarily due to the increases in costs and expenses discussed above in
"Results of Operations".
For the nine months ended September 30, 1997, the Company used net cash
of $266,000 for equipment purchases as compared to $101,000 for equipment
purchases for the same period in 1996.
During 1997, the remaining $900,000 in principal of the Company's 8%
convertible debentures plus accrued interest were converted into 518,683 shares
of the Company's common stock at an average conversion price of $1.93 per share.
Pursuant to the DEMI License, the Company has agreed to pay DEMI
royalties of 4% of net sales, subject to certain minimum amounts and to possible
increases or decreases to a maximum of 4% and a minimum of 2%, as specified in
the DEMI License. The applicable percentage of royalties is currently 4% of net
sales. The Company recorded royalty expense for
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the nine-month periods ended September 30, 1997 and 1996 of $75,000 and
$125,000, respectively. Minimum royalty expenses are included in marketing,
general and administrative expenses in the statements of operations. Actual
royalties due as a percentage of sales under the DEMI License are recorded in
cost of sales. As of September 30, 1997 and December 31, 1996, $25,000 and
$30,000, respectively, of these royalty payments remained unpaid. The future
minimum royalty payments specified by the DEMI License consist of the following:
Year Ending December 31,
<TABLE>
<S> <C>
1997................................................. $100,000
1998................................................. $100,000
1999................................................. $ 50,000
</TABLE>
The Company currently anticipates that its existing cash balances will
fund operations and continue technology development at the current level of
activity through at least the middle of 1998. However, it may be necessary for
the Company to increase its research and development and marketing expenses as
it continues to work to improve its zinc-air technology, to expand its markets
for its rechargeable zinc-air batteries and to pursue its relationships with
OEMs of portable electronic devices. It may also be necessary for the Company to
expand its manufacturing capacity in order to meet anticipated future sales
requirements. The Company will need working capital beyond its current levels,
and depending on the Company's results of operations, the Company may find it
necessary to obtain additional working capital on an accelerated basis or in
amounts greater than currently anticipated. There can be no assurance that
additional equity or debt financing will be available when needed or on terms
acceptable to the Company. To date, both costs and development times have
substantially exceeded the Company's forecasts. In addition, the battery
business is a chemical processing business and, as such, the Company will
require specialized equipment to manufacture its zinc-air batteries. Future
equipment additions could exceed current Company estimates in cost, complexity
and development time.
The market price of the Company's common stock has fluctuated
significantly since it began to be publicly traded on July 1, 1993 and may
continue to be highly volatile. Factors such as delays by the Company in
achieving development goals, inability of the Company to commercialize or
manufacture its products, fluctuation in the Company's operating results,
changes in earning estimates by analysts, announcements of technological
innovations or new products by the Company or its competitors, perceived changes
in the markets for various OEM applications incorporating the Company's
products, the announcement or termination of relationships with OEMs, and
general market conditions may cause significant fluctuations in the market price
of the Company's common stock. The market prices of the stock of many high
technology companies have fluctuated substantially, often unrelated to the
operating or research and development performance of the specific companies.
Such market fluctuations could adversely affect the market price for the
Company's common stock.
This report contains statements which to the extent that they are not
recitations of historical fact, may constitute "forward looking statements"
within the meaning of applicable federal securities laws and are based on the
Company's current expectations and assumptions.
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<PAGE> 12
These expectations and assumptions are subject to a number of risks and
uncertainties which could cause actual results to differ materially from those
anticipated, which include but are not limited to the following: ability of the
Company to achieve development goals, ability of the Company to commercialize
its battery technology, development of competing battery technologies, ability
of the Company to protect its proprietary rights to its technology, improvements
in conventional battery technologies, demand for and acceptance of the Company's
products in the marketplace, ability to obtain commitments from OEMs, ability of
the Company to ramp up production to meet anticipated sales, impact of any
future governmental regulations, impact of pricing, costs of materials, ability
of the Company to raise additional funds and other factors affecting the
Company's business that are beyond the Company's control.
AER Energy, AER Energy PowerSlice Pro and AER Energy PowerSlice LX are
trademarks of AER Energy Resources, Inc.; PowerLink is a trademark of Alegna,
Inc.; OmniQuest is a trademark of Mitsubishi Electronics America, Inc.; Expo!
The Database Builder is a trademark of Bartizan Data Systems LLC.
Page 12
<PAGE> 13
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS:
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
11 Statement of Computation of Earnings per Share.
27 Financial Data Schedule (for SEC use only).
(B) REPORTS ON FORM 8-K:
The registrant did not file any reports on Form 8-K during the three
months ended September 30, 1997.
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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.
AER ENERGY RESOURCES, INC.
Date: November 11, 1997 By: /s/ David W. Dorheim
------------------------------
David W. Dorheim, President and
Chief Executive Officer
Date: November 11, 1997 By: /s/ M. Beth Donley
----------------------------
M. Beth Donley, Vice President,
Chief Financial Officer, Secretary
and Treasurer
(Principal Financial Officer and
Principal Accounting Officer)
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<PAGE> 15
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIALLY
NUMBER DESCRIPTION NUMBERED PAGE
- ------ ----------- -------------
<S> <C> <C>
11 Statement of Computation of Earnings per Share. 16
27 Financial Data Schedule (for SEC use only).
</TABLE>
Page 15
<PAGE> 1
EXHIBIT 11
AER ENERGY RESOURCES, INC.
(A DEVELOPMENT STAGE COMPANY)
COMPUTATION OF EARNINGS PER SHARE (UNAUDITED)
<TABLE>
<CAPTION>
PERIOD FROM
JULY 17, 1989
THREE MONTHS ENDED NINE MONTHS ENDED (DATE OF
SEPTEMBER 30, SEPTEMBER 30, INCEPTION) TO
------------------------------ ------------------------------ SEPTEMBER 30,
1997 1996 1997 1996 1997
------------ -------------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Weighted average
common stock
outstanding ............... 24,791,763 24,058,133 24,573,637 22,178,701 12,443,197
Common stock issued and
stock options granted in
accordance with SAB
No. 83 ................... -- -- -- -- 1,337,912
---------- -------------- -------------- ------------- ------------
Total ...................... 24,791,763 24,058,133 24,573,637 22,178,701 13,781,109
========== ============== ============== ============= ============
Net loss................... $(2,386,858) $ (1,795,267) $ (6,596,360) $ (5,500,524) $(52,289,439)
========== ============== ============== ============= ============
Per share amount........... $ (0.10) $ (0.07) $ (0.27) $ (0.25) $ (3.79)
========== ============== ============== ============= ============
</TABLE>
Page 16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONDENSED
BALANCE SHEETS AND SUMMARY OF OPERATIONS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1997.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 12,250,411
<SECURITIES> 0
<RECEIVABLES> 82,487
<ALLOWANCES> (2,500)
<INVENTORY> 210,251
<CURRENT-ASSETS> 12,678,614
<PP&E> 3,960,343
<DEPRECIATION> 2,427,836
<TOTAL-ASSETS> 14,227,962
<CURRENT-LIABILITIES> 558,800
<BONDS> 0
0
0
<COMMON> 66,519,347
<OTHER-SE> (52,853,099)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 82,090
<TOTAL-REVENUES> 82,090
<CGS> 988,187
<TOTAL-COSTS> 988,187
<OTHER-EXPENSES> 1,671,559
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,386,858)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,386,858)
<EPS-PRIMARY> (.10)
<EPS-DILUTED> 0
</TABLE>
