<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 8-K/A
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
April 16, 1997
Commission File Number 1-11512
______________________
SATCON TECHNOLOGY CORPORATION
(Exact name of registrant as specified in its charter)
______________________
State of Incorporation: Delaware I.R.S. Employer Identification.
No. 04-2857552
161 First Street
Cambridge, MA 02142-1221
(Address of principal executive offices)
(617) 661-0540
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
================================================================================
<PAGE>
TABLE OF CONTENTS
ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS
<TABLE>
<S> <C>
a) Financial Statements of Film Microelectronics, Inc.
Report of Independent Accountant....................................... 1
Balance Sheet at February 28, 1997..................................... 2
Statement of Operations for the year ended
February 28, 1997..................................................... 3
Statement of Stockholder's Equity for the year ended
February 28, 1997..................................................... 4
Statement of Cash Flows for the year ended February 28, 1997........... 5
Notes to Financial Statements.......................................... 6
b) Pro Forma Financial Statements.
Introduction to Unaudited Combined Condensed Pro Forma
Financial Statements.................................................. 13
Unaudited Pro Forma Combined Condensed Balance Sheet as of March
31, 1997.............................................................. 14
Notes to Unaudited Pro Forma Combined Condensed Balance Sheet.......... 15
Unaudited Pro Forma Combined Condensed Consolidated Statement of
Operations: Year Ended September 30, 1996............................. 16
Six Months Ended March 31, 1997........................................ 17
Notes to Unaudited Pro Forma Combined Condensed Statements of
Operations for the twelve and six month periods ended September 30,
1996 and March 31, 1997 respectively.................................. 17
c) Exhibits
None.
Signatures............................................................. 18
</TABLE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholder of
Film Microelectronics, Inc.:
We have audited the balance sheet of Film Microelectronics, Inc. as of February
28, 1997 and the related statement of operations, stockholder's equity, and cash
flows for the year then ended. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Film Microelectronics, Inc. as
of February 28, 1997 and the results of its operations and its cash flows for
the year then ended, in conformity with generally accepted accounting
principles.
Coopers & Lybrand L.L.P.
/s/ Coopers & Lybrand L.L.P.
Boston, Massachusetts
June 20, 1997
1
<PAGE>
FILM MICROELECTRONICS, INC.
BALANCE SHEET
February 28, 1997
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Current assets:
Cash $ 5,656
Accounts receivable, less allowance
for doubtful accounts of $35,968 660,717
Inventories (Note 3) 1,178,418
Prepaid expenses and other current assets 117,970
Deferred tax asset 139,451
----------
Total current assets 2,102,212
----------
Property and equipment, net (Note 4) 217,674
Deferred tax asset 67,890
----------
Total assets $2,387,776
==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Note payable (Note 5) 148,378
Accounts payable 671,390
Accrued expenses 301,734
Taxes payable 242,164
Customer deposits 137,747
Long-term debt - current portion (Note 6) 89,689
Note payable - stockholder current portion (Note 7) 82,537
----------
Total current liabilities 1,673,639
----------
Long-term debt (Note 6) 273,296
Note payable - stockholder (Note 7) 370,508
----------
Total liabilities 2,317,443
----------
Commitments and contingencies (Note 9)
Stockholder's equity (Note 8):
Common stock, $.01 par value, 200,000 shares authorized;
1,000 shares issued and outstanding 10
Additional paid-in capital 990
Retained earnings 69,333
----------
Total stockholder's equity 70,333
----------
Total liabilities and stockholder's equity $2,387,776
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
FILM MICROELECTRONICS, INC.
STATEMENT OF OPERATIONS
for the year ended February 28, 1997
<TABLE>
<S> <C>
Net sales $5,000,827
Cost of sales 4,188,845
----------
Gross profit 811,982
----------
Operating expenses:
General and administrative 570,703
Selling and marketing 475,320
Research and development 84,026
----------
Total operating expenses 1,130,049
----------
Loss from operations (318,067)
----------
Interest expense, net 101,934
----------
Loss before income taxes (420,001)
Benefit from income taxes (167,085)
----------
Net loss $ (252,916)
==========
Net loss per share $ (252.92)
==========
Weighted average number of common shares outstanding 1,000
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
FILM MICROELECTRONICS, INC.
STATEMENT OF STOCKHOLDER'S EQUITY
for the year ended February 28, 1997
<TABLE>
<CAPTION>
Common Stock Additional Total
-------------- Paid-In Retained Stockholder's
Shares Amount Capital Earnings Equity
------ ------ ---------- --------- -------------
<S> <C> <C> <C> <C> <C>
Balance, February 29, 1996 1,000 $ 10 $ 990 $ 322,249 $ 323,249
Net loss (252,916) (252,916)
----- ------ ---------- ---------- --------------
Balance, February 28, 1997 1,000 $ 10 $ 990 $ 69,333 $ 70,333
===== ====== ========== ========== ==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
FILM MICROELECTRONICS, INC.
STATEMENT OF CASH FLOWS
for the year ended February 28, 1997
<TABLE>
<CAPTION>
<S> <C>
Cash flows from operating activities:
Net loss $ (252,916)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization 86,854
Provision for deferred taxes (52,441)
Changes in operating assets and liabilities:
Accounts receivable (151,726)
Prepaid expenses and other assets (38,126)
Inventory (127,278)
Accounts payable 145,573
Accrued expenses 185,393
Taxes payable (114,644)
Customer deposits (13,503)
------------
Net cash used for operating activities (332,814)
------------
Cash flows used in investing activities:
Purchase of property and equipment (39,066)
------------
Cash flows from financing activities:
Proceeds from note payable 1,547,863
Payments on note payable (1,399,485)
Proceeds from long-term debt 300,000
Payments of long-term debt (10,000)
Payments on note payable - stockholder (80,342)
Payments on capital leases (51,839)
------------
Net cash provided by financing activities 306,197
------------
Net decrease in cash and cash equivalents (65,683)
Cash and cash equivalents, beginning of year 71,339
-----------
Cash and cash equivalents, end of year $ 5,656
===========
Supplemental cash flow information:
Interest paid $ 101,934
Non-cash transactions:
Equipment acquired under capitalized leases $ 58,579
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
FILM MICROELECTRONICS, INC.
NOTES TO FINANCIAL STATEMENTS
1. Nature of Business:
-------------------
Film Microelectronics, Inc. (the "Company" or "FMI") is engaged principally
in designing, manufacturing and testing custom and standard multi-chip
modules and hybrids for the avionics industry worldwide.
The Company was incorporated in 1995 and on February 28, 1995 of the assets
of the Company's predecessor also known as Film Microelectronics, Inc. ("Old
FMI") were transferred to the Company in exchange for the assumption of Old
FMI's liabilities.
Under the terms of a Settlement Agreement dated May 4, 1992 (the "Settlement
Agreement"), the Company's sole stockholder, who was a minority stockholder
of Old FMI, was awarded a liquidation preference in the net assets of Old
FMI in the amount of $2.0 million in a dispute with the majority stockholder
of Old FMI. Also, under the terms of the Settlement Agreement, the
stockholder of the Company was appointed the liquidator of Old FMI.
As liquidator, the stockholder was to liquidate the Company and after
payment of its creditors, distribute the balance of the proceeds, if any, to
the stockholders of Old FMI. The Company continued operations until February
28, 1995, at which time the stockholder transferred the net assets of Old
FMI to the Company to satisfy approximately $1.3 million of the liquidation
preference. Concurrent with this transfer, the stockholder agreed to convert
the balance of the liquidation preference to a note of $600,000 (see Note
7). Since the two entities were controlled by the same party, the transfer
was not considered a purchase under generally accepted accounting principles
and accordingly the net assets were recorded at their previous net book
value.
2. Significant Accounting Policies:
-------------------------------
Cash and Cash Equivalents
The Company considers cash and cash equivalents to include demand deposits
and investments in money market accounts.
Revenue Recognition
Revenue from product sales is recognized at the time of shipment.
Concentration of Credit Risk
Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of trade receivables.
Concentration of credit risk with respect to accounts receivable is limited
to certain customers to whom the Company makes substantial sales. One
customer accounted for approximately 12% of accounts receivable and 40% of
revenues as of and for the year ended February 28, 1997. The Company does
not require collateral from its customers. To reduce credit risk, the
Company routinely assesses the financial strength of its
Continued
6
<PAGE>
FILM MICROELECTRONICS, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
customers and, as a consequence, believes that its trade accounts receivable
credit risk exposure is limited.
Inventories
Inventories are valued at the lower of cost or market, with cost determined
under the first-in, first-out method.
Net Loss Per Common Share
Net loss per common share is computed using the weighted average number of
shares of common stock outstanding. As there are no common stock
equivalents, fully diluted net loss per common share is equal to the
reported primary net loss per share.
Property and Equipment
Property and equipment are recorded at cost. Repairs and maintenance are
charged to expense as incurred. Depreciation is provided by use of the
straight-line method over estimated useful lives of three to seven years.
Upon retirement or sale, the cost of the assets disposed of and related
accumulated depreciation are removed from the accounts and resulting gain or
loss is included in the determination of net income or loss.
Income Taxes
Income taxes are accounted for in accordance with Financial Accounting
Standard No. 109, "Accounting for Income Taxes" ("SFAS 109"). In accordance
with SFAS 109, deferred income taxes are recognized for the tax consequences
in future years of differences between the tax basis of assets and
liabilities and their financial reporting amounts. Valuation allowances are
established when necessary to reduce deferred tax assets to the amount
expected to be realized.
Use of Estimates
The Company's preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the dates
of the financial statements and the reported amounts of revenue and expenses
during the reported period. The most significant estimates included in these
financial statements include accounts receivable, allowance for doubtful
accounts and inventory valuation allowances. Actual results could differ
from those estimates.
Effect of Recent Accounting Pronouncements
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128 "Earnings Per Share," (SFAS 128),
which is effective for fiscal years ending after December 15, 1997,
including interim periods. Earlier application is not permitted. SFAS 128
specifies the computation, presentation and disclosure requirements for
Continued
7
<PAGE>
FILM MICORELECTRONICS, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
earnings per share. Management believes that the adoption of SFAS 128 would
not have a material impact on earnings per share as reported.
<TABLE>
<CAPTION>
<S> <C>
3. Inventories:
------------
Inventories consist of:
1997
----
Raw materials $ 454,166
Work in process 724,252
-----------
Total $1,178,418
===========
4. Property and Equipment:
-----------------------
Property and equipment consists of:
1997
----
Machinery and equipment $ 290,389
Capital leases 290,215
Leasehold improvements 159,020
Office furniture 15,915
Computer equipment 58,075
-----------
813,614
Accumulated depreciation and amortization (595,940)
-----------
Total $ 217,674
===========
Equipment under capital leases at February 28, 1997 included in
property, plant and equipment consists of:
Leased equipment 290,215
Less accumulated amortization (203,767)
-----------
$ 86,448
===========
</TABLE>
Depreciation and amortization was approximately $86,854 for the year ended
February 28, 1997.
Continued
8
<PAGE>
FILM MICROELECTRONICS, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
5. Note Payable:
-------------
In 1996, the Company entered into an agreement with a bank for a line of
credit totaling $200,000. Borrowings under the agreement are to be used for
general corporate purposes and incur interest at 11.75% per annum. The note
is collateralized by the Company's receivables, inventories and fixed assets.
At February 28, 1997, $148,378 was outstanding under this agreement. The line
of credit was repaid and terminated in April 1997 (see Note 12).
6. Long-Term Debt:
--------------
Long-term debt consists of the following at February 28:
<TABLE>
<CAPTION>
Term loan:
<S> <C>
Due in 1999, interest at 11.75% $290,000
Capitalized lease obligations 72,985
--------
362,985
Less current portion 89,689
--------
Total long-term debt $273,296
========
</TABLE>
In 1996, the Company entered into an agreement with a bank for a term loan
totaling $300,000. Borrowings under the agreement are to be used for general
corporate purposes and accrues interest at 11.75% per annum. The note is
collateralized by the Company's receivables, inventories and fixed assets.
The note was repaid in April 1997 (see Note 12).
7. Note Payable - Stockholder:
--------------------------
At February 28, 1997, the outstanding balance of this note was $453,045, of
which $82,537 was classified as current. The note accrues interest at 6.5%
per annum. The note is payable at $2,100 per week with a final payment of
$188,432 payable on March 1, 2000.
8. Stockholder's Equity:
--------------------
On February 17, 1995, the Company issued 1,000 shares of common stock to a
principal of the Company at $1.00 per share. The Company has not issued any
shares subsequent to February 17, 1995.
Continued
9
<PAGE>
FILM MICROELECTRONICS, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
9. Commitments and Contingencies:
-----------------------------
The Company leases office space under an operating lease agreement and leases
equipment under capital leases. Rent expense for 1997 was approximately
$94,340.
Future minimum payments under noncancelable leases at February 28, 1997 were
as follows:
<TABLE>
<CAPTION>
Capital Operating
Leases Leases
------ ---------
Year ending February 28:
<S> <C> <C>
1998 $ 38,704 $ 100,136
1999 27,102 105,052
2000 9,326 111,358
2001 9,326 112,808
2002 7,026 125,123
---------- -----------
Total minimum lease payments $ 91,484 $ 554,477
========== ===========
Less amount representing interest 18,499
Present value of net minimum capital lease payments 72,985
Less current portion 29,689
----------
Long-term obligations under capital leases,
less current portion $ 43,296
</TABLE> ==========
Litigation
The Company and its sole stockholder have been named in a civil action seeking
damages and specific performance under the terms of the Settlement Agreement
related to Old FMI (see Note 1). In April 1996, the Company provided the
plaintiff with an accounting which indicated that Old FMI had a negative net
worth, including the liquidation preference to the stockholder, on February
25, 1996 which indicated that no amounts were available to distribute to the
remaining stockholders of Old FMI. To date, the Plaintiff has taken no further
action. The Company intends to defend this claim vigorously and believes,
based on the advice of counsel, that it has meritorious defenses. A loss if
any related to the claim is not probable or estimable at this time and
accordingly, no amounts have been accrued in the financial statements.
The Company is a defendant in a case involving up to $214,000 of claims plus
accrued interest at 12% per annum since 1992 related to a health insurance
program. A loss, if any, related to the claim is not expected to have a
material impact on the financial position or results of operations of the
Company.
Continued
10
<PAGE>
FILM MICROELECTRONICS, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
10. Income Taxes:
------------
The components of the benefit for income taxes for the year ended February
28, 1997 are as follows:
<TABLE>
<CAPTION>
1997
----
<S> <C>
Current:
Federal $ (114,644)
State -
------------
Total current (114,644)
Deferred:
Federal (12,837)
State (39,604)
------------
Total deferred (52,441)
------------
$ (167,085)
============
</TABLE>
The components of the net deferred tax asset consisted of the following at
February 28, 1997:
<TABLE>
<CAPTION>
1997
----
<S> <C>
State net operating loss $ 21,142
Accounts receivable allowances 14,484
Difference in depreciation methods 67,891
Accrued expenses 98,448
Other 5,376
-----------
Net deferred tax asset $ 207,341
===========
</TABLE>
Based on expected future taxable income including the gain resulting from the
sale of the Company's assets (see Note 12), management believes sufficient
income will be generated in the future to realize the deferred tax asset.
The amount of the deferred tax asset considered realizable could be reduced
in the near term if estimates of future taxable income are reduced.
The analysis of the variance of income taxes as reported from income taxes
compiled at the U.S. statutory federal income tax rate for continuing
operations is as follows:
<TABLE>
<CAPTION>
1997
----
<S> <C>
Income taxes at U.S. statutory rate of 34% $ (142,800)
State income taxes (26,139)
Other, net 1,854
------------
$ (167,085)
============
</TABLE>
Continued
11
<PAGE>
FILM MICROELECTRONICS, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
As of February 28, 1997, the Company has net operating loss carryforwards
for state tax purposes of approximately $337,200.
11. Employee Benefit Plan:
---------------------
The Company offers a 401(k) Employee Benefit Plan (the "401(k) Plan"). Under
the 401(k) Plan, any employee who has completed three months of service and
has attained the age of 21 years is eligible to participate. Under the terms
of the 401(k) Plan, an employee may defer up to 15% of his or her
compensation through contributions to the 401(k) Plan. The Company did not
make a voluntary contribution to the Plan during fiscal 1997.
12. Subsequent Event:
----------------
On April 15, 1997, the Company sold substantially all of its assets to a
wholly-owned subsidiary of SatCon Technology Corporation in exchange for
420,000 shares of SatCon Technology Corporation common stock and the
assumption by such subsidiary of trade payable aggregating approximately
$710,000, up to $500,000 of notes payable and up to $500,000 of notes
payable to a related party. Additionally, the subsidiary of SatCon
Technology Corporation entered into a non competition agreement with
Albert R. Snider, a stockholder of the Company requiring aggregate
payments of $500,000.
12
<PAGE>
INTRODUCTION TO UNAUDITED COMBINED CONDENSED PRO FORMA FINANCIAL STATEMENTS
On April 16, 1997, SatCon Technology Corporation ("SatCon") acquired
substantially all of the assets and assumed certain of the liabilities of Film
Microelectronics, Inc. pursuant to the terms of an Amended and Restated Asset
Purchase Agreement (the "Asset Purchase Agreement"), dated as of April 13, 1997,
among SatCon Film Microelectronics, Inc., a wholly owned subsidiary of SatCon,
FMI and Albert R. Snider, FMI's principle stockholder (the "Stockholder"). The
aggregate consideration paid by SatCon for the acquired assets of FMI was (I)
420,000 shares of SatCon's common stock, par value $.01 per share, (ii) the
assumption of trade payables aggregating approximately $710,000, and (iii) the
assumption of indebtedness in an amount not to exceed $1 million. SatCon also
entered into a non-competition agreement with the Stockholder requiring
aggregate payments of $500,000. SatCon does not intend to register such stock
under the Securities Act of 1933, as amended.
The following Unaudited Pro Forma Combined Condensed Balance Sheet as of
March 31, 1997 and the Unaudited Pro Forma Combined Condensed Statements of
Operations for the twelve months ended September 30, 1996 and six months ended
March 31, 1997 give effect to the asset purchase described above accounted for
under the purchase method of accounting. The unaudited Pro Forma Combined
Condensed Financial Statements are based on the historical Consolidated
Financial Statements of SatCon and FMI under the assumptions and adjustments set
forth in the accompanying Notes to the Unaudited Pro Forma Combined Condensed
Financial Statements.
The Unaudited Pro Forma Combined Condensed Balance Sheet assumes that the
asset purchase was consummated on March 31, 1997 and the Unaudited Pro Forma
Combined Condensed Statement of Operations for the twelve month period ended
September 30, 1996 assumes the asset purchase was consummated on October 1,
1995. The Unaudited Pro Forma Combined Condensed Statement of Operations for the
six month period ended March 31, 1997 assumes the asset purchase was consummated
on October 1, 1996. The fiscal year of FMI ends on February 28. For purposes of
presenting the Unaudited Pro Forma Combined Condensed Statements of Operations
the historical statements of FMI were compiled on a fiscal year basis ended
September 30, 1996, and six months ended March 31, 1997 consistent with SatCon's
fiscal year end.
For purposes of presenting the Unaudited Pro Forma Combined Condensed
Balance Sheet, FMI's assets and liabilities have been recorded at their
estimated fair market values and the excess purchase price has been assigned to
goodwill. These fair values are based on preliminary estimates. Upon completion
of a detailed review of assets and liabilities, including intangibles, certain
adjustments may be required to finalize the purchase accounting that could be
material to SatCon's financial statements.
The Unaudited Pro Forma Combined Condensed Financial Statements may not be
indicative of the results that actually would have occurred if the asset
purchase had been consummated on the dates indicated or which may be obtained in
the future. The Unaudited Pro Forma Combined Condensed Financial Statements
should be read in conjunction with the historical Consolidated Financial
Statements and Notes for FMI and SatCon.
13
<PAGE>
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
MARCH 31, 1997
<TABLE>
<CAPTION>
SatCon FMI
Historical Historical Pro Forma Pro Forma
3/31/97 3/31/97 Adjustments Combined
-------------- ------------ ---------------- ---------------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents...................................... $3,676,287 - ($493,829)(1) $3,182,458
Marketable securities ......................................... 1,375,104 - - 1,375,104
Accounts receivable, net ...................................... 1,647,927 $ 715,877 - 2,363,804
Unbilled contract costs, net ................................. 3,459,289 - - 3,459,289
Inventory...................................................... 250,090 1,284,503 - 1,534,593
Deferred tax asset............................................. - 139,451 (139,451)(2) -
Prepaid expenses and other assets.............................. 599,500 84,149 - 683,649
-------------- ------------ ---------------- ---------------
Total current assets............................... 11,008,197 2,223,980 (633,280) 12,598,897
-------------- ------------ ---------------- ---------------
Property and equipment, net .................................... 4,767,663 204,114 775,086 (3) 5,746,863
Deferred tax asset............................................... - 67,890 (67,890)(2) -
Other assets..................................................... 621,209 - 1,944,095 (4) 2,565,304
-------------- ------------ ---------------- ---------------
Total assets....................................... $16,397,069 $2,495,984 $2,018,011 $20,911,064
============== ============ ================ ===============
LIABILITIES
Current liabilities:
Note Payable and long-term debt (current portion).............. - 225,515 (225,515)(5) -
Note Payable - stockholder current portion..................... - 81,407 - 81,407
Customer deposits.............................................. - 137,747 - 137,747
Deferred revenue............................................... 203,407 - - 203,407
Accounts payable............................................... 220,797 798,775 - 1,019,572
Taxes payable.................................................. - 242,164 (242,164)(2) -
Accrued payroll and payroll taxes.............................. 289,372 - - 289,372
Other accrued expenses......................................... 252,554 295,600 455,000 (6) 1,003,154
-------------- ------------ ---------------- ---------------
Total current liabilities.......................... 966,130 1,781,208 (12,679) 2,734,659
-------------- ------------ ---------------- ---------------
Long-term debt................................................. - 268,241 (255,914)(7) 12,327
Note payable - stockholder..................................... - 365,485 0 365,485
-------------- ------------ ---------------- ---------------
Total liabilities 966,130 2,414,934 (268,593) 3,112,471
-------------- ------------ ---------------- ---------------
Commitments...................................................... - - - -
STOCKHOLDERS' EQUITY
Preferred stock.................................................. - - - -
Common stock..................................................... 74,881 10 (10)(8) 74,881
Additional paid-in capital....................................... 18,771,369 990 2,366,664 (5) 21,139,023
Retained earnings................................................ (3,381,799) 80,050 (80,050)(8) (3,381,799)
Unrealized losses on marketable securities, net of tax effect ... (33,512) - - (33,512)
-------------- ------------ ---------------- ---------------
Total stockholders' equity......................... 15,430,939 81,050 2,286,604 17,798,593
-------------- ------------ ---------------- ---------------
Total liabilities and stockholders' equity......... $16,397,069 $2,495,984 $2,018,011 $20,911,064
============== ============ ================ ===============
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
The Unaudited Pro Forma Combined Condensed Balance Sheet gives effect to the
asset purchase, which was accounted for under the purchase method of accounting,
as if it had been consummated on March 31, 1997.
The following is a summary of adjustments reflected in the Unaudited Pro Forma
Combined Condensed Balance Sheet:
1) Represents repayment of two of FMI's liabilities by SatCon pursuant to the
asset purchase agreement.
2) Represents the elimination of tax attributes which remain with FML after
the acquisition.
3) Represents the adjustments to reflect the fair value of FMI's property,
plant and equipment.
4) Represents goodwill and intangible assets to reflect the fair value of FMI
5) Represents repayment of the current portion of two of FMI's liabilities by
SatCon pursuant to the asset purchase agreement.
6) Represents an accrual for a future payment for a non-compete agreement
($500,000), elimination of an accrual for liabilities not assumed by SatCon
($170,000), and additional direct acquisition costs to be incurred by SatCon
($125,000).
7) Represents repayment of the long-term portion of two of FMI's liabilities by
SatCon pursuant to the asset purchase agreement; $230,000 for a term loan and
$25,914 for a term lease.
8) Represents the elimination of FMI's historical equity and adjustment of
FMI's balance sheet to the purchase price.
15
<PAGE>
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTH PERIOD ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
SatCon FMI
Historical Historical Pro Forma Pro Forma
9/30/96 9/30/96 Adjustments Combined
------------ --------------- ------------- ---------------
<S> <C> <C> <C> <C>
Revenue......................................... $9,384,588 $4,409,893 - $13,794,481
------------ --------------- ------------- ---------------
Cost of sales................................... 3,940,674 3,655,383 155,018 (1) 7,751,075
Selling, general and administrative expenses.... 8,023,441 977,251 359,113 (2) 9,359,805
Research and development expenses............... 893,628 80,861 - 974,489
------------ --------------- ------------- ---------------
Total operating expenses........................ 12,857,743 4,713,495 514,131 18,085,369
------------ --------------- ------------- ---------------
Operating loss.................................. (3,473,155) (303,602) (514,131) (4,290,888)
Interest income/(expense), net.................. 463,840 (81,546) 60,000 (3) 442,294
------------ --------------- ------------- ---------------
Loss before income taxes........................ (3,009,315) (385,148) (454,131) (3,848,594)
Benefit for income taxes........................ (144,479) - (181,652)(4) (326,131)
------------ --------------- ------------- ---------------
Net loss........................................ (2,864,836) (385,148) (272,479) (3,522,463)
============ =============== ============= ===============
Loss per common and common equivalent share..... ($0.37) ($0.45)
============ ===============
Weighted average shares outstanding............. 7,705,756 7,705,756
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
FOR THE SIX MONTH PERIOD ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
SatCon FMI
Historical Historical Pro Forma Pro Forma
3/31/97 3/31/97 Adjustments Combined
---------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Revenue......................................... $5,041,672 $2,508,430 $0 $ 7,550,102
---------- ---------- ----------- -----------
Cost of sales................................... 2,053,733 2,274,498 77,509(1) 4,405,740
Selling, general and administrative expenses.... 4,045,607 612,924 112,056(2) 4,770,587
Research and development expenses............... 43,623 43,386 - 87,009
---------- ---------- ----------- -----------
Total operating expenses........................ 6,142,963 2,930,808 189,565 9,263,336
---------- ---------- ----------- -----------
Operating loss.................................. (1,101,291) (422,378) (189,565) (1,713,234)
Interest income/(expense), net.................. 141,189 (87,381) 30,000(3) 83,808
---------- ---------- ----------- -----------
Loss before income taxes........................ (960,102) (509,759) (159,565) (1,629,426)
Benefit for income taxes........................ - (203,903) (63,826)(4) (267,729)
---------- ---------- ----------- -----------
Net loss........................................ ($960,102) ($305,856) ($95,739) ($1,361,697)
========== ========== =========== ===========
Loss per common and common equivalent share..... ($0.12) ($0.17)
========== ===========
Weighted average shares outstanding............. 7,852,029 7,852,029
</TABLE>
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
The Unaudited Pro Forma Combined Condensed Statements of Operations have been
prepared to reflect the asset purchase as if it occurred on October 1, 1995. The
asset purchase has been accounted for under the purchase method of accounting.
The excess of the purchase price over the fair value of the net assets acquired
(goodwill) is being amortized on a straight-line basis over a 15-year period.
Pro Forma loss per share has been computed using the weighted average shares of
common stock outstanding adjusted for the issuance of 420,000 shares in
connection with the asset purchase.
The following is a summary of adjustments reflected in the Unaudited Pro Forma
Combined Condensed Statements of Income:
1) Represents the increase in depreciation to reflect the fair value of FMI's
property, plant and equipment.
2) Represents the elimination of an accrual for liabilities not assumed by
SatCon, the amortization of goodwill and intangibles, and an accrual for
a future payment related to a non-compete agreement ($100,000 and $50,000
for the twelve and six month periods ended September 30, 1996 and March 31,
1997, respectively).
3) Represents adjustments to interest expense for retirement of debt pursuant
to the asset purchase agreement.
4) Represents the tax effect of the Unaudited Pro Forma Combined Condensed
Statements of Income adjustments.
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
Signature
- ---------
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.
SATCON TECHNOLOGY CORPORATION
Date: June 30, 1997 By: /s/ David B. Eisenhaure
David B. Eisenhaure, President
and Chief Executive Officer
Date: June 30, 1997 By: /s/ Michael C. Turmelle
Michael C. Turmelle, Vice President,
Chief Financial Officer and Treasurer
18
