<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 10-Q/A
AMENDMENT NO. 1 TO FORM 10-Q
QUARTERLY 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 1-11512
______________________
SATCON TECHNOLOGY CORPORATION
(Exact name of registrant as specified in its charter)
______________________
State of Incorporation: DELAWARE I.R.S. Employer ID. 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)
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
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, $0.01 Par Value, 12,296,601 shares
outstanding as of January 31, 2000.
--------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
PART I: FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Page
----
<S> <C>
Item 1: Restated Financial Statements
Consolidated Balance Sheets (Unaudited).......................... 1
Consolidated Statements of Operations (As restated) (Unaudited).. 2
Consolidated Statements of Cash Flows (As restated) (Unaudited).. 3
Notes to Interim Consolidated Financial Statements (Unaudited)... 4
Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations...................... 11
Item 3: Quantitative and Qualitative Disclosures About Market
Risk..................................................... 17
PART II: OTHER INFORMATION
Item 1. Legal Proceedings....................................... 18
Item 2. Changes in Securities and Use of Proceeds............... 18
Item 3. Defaults Upon Senior Securities......................... 18
Item 4. Submission of Matters to a Vote of Security
Holders................................................. 18
Item 5. Other Information....................................... 18
Item 6. Exhibits and Reports on Form 8-K........................ 18
Signature....................................................... 19
Exhibit Index................................................... 20
</TABLE>
<PAGE>
PART I: FINANCIAL INFORMATION
Item 1: Restated Financial Statements
SATCON TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, September 30,
------------------ ------------------
1999 1999
------------------ ------------------
(Unaudited) (As restated)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ....................................... $ 3,173,619 $ 2,533,072
Accounts receivable, net of allowance of $469,119 at
December 31, 1999 and $386,686 at September 30, 1999............ 3,885,049 2,799,143
Unbilled contract costs, net of allowance of $746,121 at
December 31, 1999 and September 30, 1999........................ 1,058,150 1,462,201
Inventory ........................................................ 8,187,440 3,697,972
Prepaid expenses and other current assets......................... 502,250 349,070
------------ ------------
Total current assets............................................ 16,806,508 10,841,458
Property and equipment, net....................................... 4,542,414 3,260,632
Intangibles, net ................................................. 9,793,710 3,194,609
Other long-term assets............................................ 184,557 103,675
------------ ------------
Total assets..................................................... $ 31,327,189 $ 17,400,374
============ ============
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.................................................... $ 1,358,848 $ 1,563,605
Accrued payroll and payroll related expenses........................ 833,999 479,888
Deferred revenue.................................................... 107,725 113,179
Other accrued expenses.............................................. 1,080,130 620,874
Accrued loss in investment in Beacon Power Corporation.............. -- 333,333
Current portion of long-term debt................................... 16,535 16,226
------------ ------------
Total current liabilities......................................... 3,397,237 3,127,105
Long-term liabilities:
Long-term debt...................................................... 29,619 33,871
Other long-term liabilities......................................... 29,735 29,735
------------ ------------
Total long-term liabilities....................................... 59,354 63,606
Commitments and contingencies......................................... -- --
Redeemable convertible preferred stock ............................... 5,050,056 4,894,112
Stockholders' equity:
Preferred stock; $.01 par value, 1,000,000 shares authorized;
8,000 shares Series A redeemable convertible preferred stock
issued and outstanding at December 31, 1999 and
September 30, 1999............................................... -- --
Common stock, $.01 par value, 20,000,000 shares authorized;
11,396,570 and 9,617,009 shares issued at December 31, 1999
and September 30, 1999, respectively............................ 113,966 96,170
Additional paid-in capital......................................... 52,915,521 37,074,161
Shares held in escrow, at market; 42,860 shares at
December 31, 1999 and September 30, 1999......................... (357,615) (428,600)
Amounts receivable from exercise of stock options.................. (1,816,667) (1,816,667)
Accumulated deficit................................................ (27,772,487) (25,359,809)
Accumulated other comprehensive loss............................... (12,472) --
Treasury stock, at cost; 44,500 shares at December 31, 1999 and
September 30, 1999............................................... (249,704) (249,704)
------------ ------------
Total stockholders' equity....................................... 22,820,542 9,315,551
------------ ------------
Total liabilities, redeemable convertible preferred
stock and stockholders' equity................................. $31,327,189 $ 17,400,378
============ ============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
1
<PAGE>
SATCON TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(As restated)
(Unaudited)
<TABLE>
<CAPTION>
For the three months ended
December 31,
1999 1998
------------------ ------------------
<S> <C> <C>
Product revenue..................................................... $ 3,161,505 $ 1,994,527
Funded research and development revenue............................. 1,394,902 1,730,572
----------- -----------
Total revenue....................................................... 4,556,407 3,725,099
Cost of product revenue............................................. 3,001,178 1,523,677
----------- -----------
Gross margin........................................................ 1,555,229 2,201,422
Research and development expenses................................... 1,723,195 1,428,941
Selling, general and administrative expenses........................ 2,032,536 989,580
Amortization of intangibles......................................... 242,608 77,758
----------- -----------
Total operating expenses............................................ 3,998,339 2,496,279
----------- -----------
Operating loss...................................................... (2,443,110) (294,857)
Loss from investment in Beacon Power Corporation.................... -- (30,000)
Interest income..................................................... 34,123 20,267
Interest expense.................................................... (3,691) --
----------- -----------
Net loss............................................................ (2,412,678) (304,590)
Accretion of redeemable convertible preferred stock discount........ (155,944) --
----------- -----------
Net loss attributable to common stockholders........................ $(2,568,622) $ (304,590)
=========== ===========
Net loss per share, basic and diluted............................... $(0.24) $(0.03)
=========== ===========
Weighted average number of common shares, basic and diluted......... 10,793,030 8,980,249
=========== ===========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
2
<PAGE>
SATCON TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(As restated)
(Unaudited)
<TABLE>
<CAPTION>
For the three months ended
December 31,
1999 1998
-------------------- --------------------
<S> <C> <C>
Cash flows from operating activities:
Net loss .......................................................... $(2,412,678) $(304,590)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization.................................... 435,746 218,347
Allowance for doubtful accounts.................................. 82,433 86,207
Loss from investment in Beacon Power Corporation................. -- 30,000
Non-cash compensation expense related to issuance
of common stock options to non-employees....................... -- 56,362
Non-cash compensation expense related to common
stock held in escrow........................................... 29,801 --
Changes in operating assets and liabilities,
net of effects of acquisitions:
Accounts receivable............................................ 1,022,084 (292,291)
Prepaid expenses and other assets.............................. 107,957 145,102
Unbilled contract costs........................................ 404,051 (451,922)
Inventory...................................................... (381,366) (617,656)
Other assets................................................... (81,780) 545,488
Accounts payable............................................... (846,444) 151,753
Accrued expenses and payroll................................... (18,361) 19,435
Other liabilities.............................................. (18,954) 174,186
----------- -----------
Total adjustments................................................. 735,167 65,011
----------- -----------
Net cash used in operating activities............................... (1,677,511) (239,579)
----------- -----------
Cash flows from investing activities:
Sales and maturities of marketable securities...................... -- 12,428
Patent and intangible expenditures................................. (22,625) (30,360)
Capital expenditures............................................... (130,515) (258,101)
Cash paid for acquisition, net of cash acquired.................... (24,054) --
Investment in Beacon Power Corporation............................. (333,333) (30,000)
----------- -----------
Net cash used in investing activities............................... (510,527) (306,033)
----------- -----------
Cash flows from financing activities:
Borrowing under line of credit..................................... -- 5,000
Repayment of borrowings............................................ (3,943) --
Proceeds from issuance of common stock............................. 2,490,000 --
Proceeds from exercise of stock options............................ 355,000 --
Purchase of treasury stock......................................... -- (55,235)
----------- -----------
Net cash provided/(used) by financing activities.................... 2,841,057 (50,235)
----------- -----------
Effect of exchange rates on cash and cash equivalents............... (12,472) --
----------- -----------
Net increase/(decrease) in cash and cash equivalents................ 640,547 (595,847)
Cash and cash equivalents at beginning of period.................... 2,533,072 1,201,610
----------- -----------
Cash and cash equivalents at end of period.......................... $ 3,173,619 $ 605,763
=========== ===========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
3
<PAGE>
SATCON TECHNOLOGY CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note A. Basis of Presentation
------------------------------
The accompanying unaudited consolidated financial statements include the
accounts of SatCon Technology Corporation and its majority-owned subsidiaries
(collectively, the "Company") as of December 31, 1999 and have been prepared
by the Company in accordance with generally accepted accounting principles
for interim financial reporting and with the instructions to Form 10-Q and
Rule 10-01 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. All intercompany accounts and
transactions have been eliminated. These consolidated financial statements,
which in the opinion of management reflect all adjustments (including normal
recurring adjustments) necessary for a fair presentation, should be read in
conjunction with the financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended September 30, 1999,
as amended. Operating results for the three-month period ended December 31,
1999 are not necessarily indicative of the results that may be expected for
any future interim period or for the entire fiscal year.
The Company has restated its financial statements for the three-month
periods ended December 31, 1999 and 1998. The restatement was prompted by the
recently completed initial audit of the financial statements of its
affiliate, Beacon Power Corporation ("Beacon Power"), and reflects treating
certain costs as expenses rather than being included in the value of the net
assets of Beacon Power at December 24, 1997. The Company previously had
accounted for these costs either as fixed assets or as part of the net assets
of Beacon Power. As a result, certain costs previously capitalized in 1996,
1997 and 1998 should have been expensed as incurred, therefore reducing the
Company's investment in Beacon Power by $3.1 million as of December 24, 1997.
The adjustments to the financial statements at December 24, 1997, the date
which the Company began accounting for its investment in Beacon Power under
the equity method of accounting, consisted of a reduction of $37,000 from
current assets, a reduction of $3.0 million from property and equipment and
intangible assets and an increase of $73,000 of accrued expenses. There is no
cumulative effect of this change on the Company's stockholders' equity as of
December 31, 1999, since the Company had reduced its investment in Beacon
Power to zero. The effect of this change on the reported results for each
period is as follows:
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS:
For the three months ended
December 31, 1999
--------------------------------
(As restated) (As reported)
------------------ ------------------
<S> <C> <C>
Product revenue..................................................... $ 3,161,505 $ 3,161,505
Funded research and development revenue............................. 1,394,902 1,394,902
----------- -----------
Total revenue....................................................... 4,556,407 4,556,407
Cost of product revenue............................................. 3,001,178 3,001,178
----------- -----------
Gross margin........................................................ 1,555,229 1,555,229
Research and development expenses................................... 1,723,195 1,723,195
Selling, general and administrative expenses........................ 2,032,536 2,032,536
Amortization of intangibles......................................... 242,608 242,608
----------- -----------
Total operating expenses............................................ 3,998,339 3,998,339
----------- -----------
Operating loss...................................................... (2,443,110) (2,443,110)
Loss from investment in Beacon Power Corporation.................... -- (130,504)
Interest income..................................................... 34,123 34,123
Interest expense.................................................... (3,691) (3,691)
----------- -----------
Net loss............................................................ (2,412,678) (2,543,182)
Accretion of redeemable convertible preferred stock discount........ (155,944) (155,944)
----------- -----------
Net loss attributable to common stockholders........................ $(2,568,622) $(2,699,126)
=========== ===========
Net loss per share, basic and diluted............................... $(0.24) $(0.25)
=========== ===========
Weighted average number of common shares, basic and diluted......... 10,793,030 10,793,030
=========== ===========
</TABLE>
4
<PAGE>
SATCON TECHNOLOGY CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED):
For the three months ended
December 31, 1998
---------------------------------
(As restated) (As reported)
------------------ ------------------
<S> <C> <C>
Product revenue..................................................... $ 1,994,527 $ 1,994,527
Funded research and development revenue............................. 1,730,572 1,730,572
----------- -----------
Total revenue....................................................... 3,725,099 3,725,099
Cost of product revenue............................................. 1,523,677 1,523,677
----------- -----------
Gross margin........................................................ 2,201,422 2,201,422
Research and development expenses................................... 1,723,195 1,428,941
Selling, general and administrative expenses........................ 989,580 989,580
Amortization of intangibles......................................... 77,758 77,758
----------- -----------
Total operating expenses............................................ 2,496,279 2,496,279
----------- -----------
Operating loss...................................................... (294,857) (294,857)
Loss from investment in Beacon Power Corporation.................... (30,000) (1,064,010)
Interest income..................................................... 20,267 20,267
Interest expense.................................................... -- --
----------- -----------
Net loss attributable to common stockholders........................ $ (304,590) $(1,338,600)
=========== ===========
Net loss per share, basic and diluted............................... $(0.03) $(0.15)
=========== ===========
Weighted average number of common shares, basic and diluted......... 8,980,249 8,980,249
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEET DATA:
September 30, 1999
---------------------------
As restated As reported
------------ ------------
<S> <C> <C>
Investment in Beacon Power Corporation...... -- --
------------ ------------
Total assets................................ $ 17,400,374 $ 17,400,374
============ ============
Accrued losses from investment in
Beacon Power Corporation................... $ 333,333 $ 202,829
------------ ------------
Accumulated deficit......................... $(25,359,809) $(25,229,305)
------------ ------------
Total liabilities, redeemable convertible
preferred stock and stockholders' equity... $ 17,400,374 $ 17,400,374
============ ============
</TABLE>
5
<PAGE>
SATCON TECHNOLOGY CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)
Note B. Significant Accounting Policies
REVENUE RECOGNITION
Revenue from manufactured products is recognized upon shipment, or if the
product requires installation, then revenue is recognized upon installation
of the product. The Company provides for a warranty reserve at the time the
product revenue is recognized.
The Company performs funded research and development in collaboration with
third parties under both cost reimbursement and fixed-price contracts. Cost
reimbursement contracts provide for the reimbursement of allowable costs and,
in some situations, the payment of a fee. These contracts may contain
incentive clauses providing for increases or decreases in the fee depending
on how costs compare with budget. On fixed-price contracts, revenue is
generally recognized on the percentage of completion method based upon the
proportion of costs incurred to the total estimated costs for the contract.
Revenue from reimbursement contracts is recognized as services are performed.
In each form of contract, the Company receives periodic progress payments or
payment upon reaching interim milestones. All payments to the Company for
work performed on contracts with agencies of the U.S. government are subject
to audit and adjustment by the Defense Contract Audit Agency. Adjustments are
recognized in the period made. When the current estimates of total contract
revenue and contract costs indicate a loss, a provision for the entire loss
on the contract is recorded.
Deferred revenue consists of payments received from customers in advance of
services performed, product shipped or installation completed.
Unbilled contract costs and fees represent revenue recognized in excess of
amounts billed due to contractual provisions or deferred costs that have not
yet been recognized as revenue or billed to the customer.
RECLASSIFICATIONS
Certain prior year balances have been reclassified to conform to current
year presentations. For all periods presented, expenses associated with
funded research and development activities have been reclassified as research
and development expenses from cost of revenue.
Note C. Significant Events
---------------------------
INVESTMENT IN BEACON POWER CORPORATION
For the three months ended December 31, 1999, the Company did not record a
loss from its investment in Beacon Power. For the three months ended December
31, 1998, the Company recorded a loss of $30,000 which represented the
additional $30,000 committed investment from December 1998 and the recognition
of a portion of the suspended losses from Beacon Power. As of June 22, 1999, the
Company's investment in Beacon Power had been reduced to zero, and no additional
losses were recorded during the period from June 23, 1999 through December 31,
1999.
On January 7, 2000, the Company purchased from Beacon Power a convertible
promissory note with a principal amount of $200,000 due and payable on the
earlier of (i) the maturity date, February 12, 2000 (the "Maturity Date"), or
(ii) upon the occurrence of an event of default by Beacon Power. The note
bears interest at 12 1/2% per annum; provided, that if the note is not repaid
in full on or prior to the Maturity Date, the interest rate increases to 15%
per annum (the "January 7, 2000 Note"). Interest on the January 7, 2000 Note
is due and payable on the Maturity Date. At December 31, 1999, the Company
has recognized its share of Beacon Power's losses up to the amount of its
actual investment in Beacon Power. At December 31, 1999, the Company did not
accrue losses of $200,000 relating to its share of Beacon Power's losses
incurred through December 31, 1999, which the Company was required to fund
pursuant to the terms of the January 7, 2000 Note, as those amounts,
including interest, have been repaid as of February 14, 2000.
INVESTMENT FROM MECHANICAL TECHNOLOGY INCORPORATED
On October 21, 1999, the Company received a $7,070,000 investment from
Mechanical Technology Incorporated ("MTI"). In consideration for MTI's
investment, MTI received 1,030,000 shares of the Company's common stock, $.01
par value per share (the "Common Stock"), at a discounted price of approximately
$6.80 per share, and warrants to purchase an additional 100,000 shares of the
Company's Common Stock at an exercise price of $8.80 per share. MTI funded
$2,570,000 of its investment in the Company on October 21, 1999 and received
370,800 shares of the Company's Common Stock and a warrant to purchase 36,000
shares of the Company's Common Stock. The Company has recorded the fair market
value of this warrant, as determined by the Black-Scholes option pricing model,
of approximately $231,000 and approximately $80,000 of legal, accounting,
consultation and filing fees as transaction costs. MTI made the remaining
investment on January 31, 2000 of $4,500,000 and received 659,200 shares of the
Company's Common Stock and a warrant to purchase 64,000 shares of the Company's
Common Stock. The Company will record the fair market value of this warrant, as
determined by the Black-Scholes option pricing model, of approximately
$1,268,000 as a transaction cost. In addition, the Company received a warrant to
purchase 36,000 shares of MTI's common stock on October 21, 1999 and a warrant
to purchase 64,000 shares of MTI's common stock on January 31, 2000.
6
<PAGE>
SATCON TECHNOLOGY CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)
ACQUISITIONS
On October 21, 1999, the Company acquired Ling Electronics, Inc. and Ling
Electronics, Ltd. (collectively, "Ling Electronics") from MTI. In consideration
for the acquisition of Ling Electronics, MTI received $70,000 and 770,000 shares
of the Company's Common Stock valued at $9.8438 per share or $7,579,726. In
addition, the Company has incurred approximately $160,000 of legal, accounting,
consultation and filing fees as a cost of this transaction. The purchase price
of the acquisition has been allocated as follows:
<TABLE>
<S> <C>
Cash and cash equivalents ....................................... $ 45,946
Accounts receivable .............................................. 2,190,423
Inventory ........................................................ 2,902,102
Prepaid expenses and other assets................................. 260,239
Property and equipment............................................ 250,000
Intangibles ...................................................... 3,540,423
Accounts payable.................................................. 641,687
Accrued payroll and payroll related expenses...................... 334,129
Deferred revenue.................................................. 13,500
Other accrued expenses............................................ 390.091
</TABLE>
The following unaudited pro forma financial information combines the Company
and Ling Electronics' results of operations as if the acquisition had taken
place on October 1, 1998. The pro forma results are not necessarily indicative
of what the results of operations actually would have been if the transaction
had occurred on the applicable dates indicated and are not intended to be
indicative of future results of operations.
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
---------------------------------
DECEMBER 31,
---------------------------------
1999 1998
---------------- ---------------
<S> <C> <C>
Revenue............................................ $ 4,695,996 $ 5,662,099
Operating loss..................................... $(2,761,604) $ (542,301)
Net loss........................................... $(2,729,851) $ (553,034)
Net loss attributable to common stockholders....... $(2,885,795) $ (553,034)
Net loss per share, basic and diluted.............. $ (0.26) $ (0.06)
</TABLE>
On November 16, 1999, the Company purchased certain intellectual property,
equipment and other assets from Northrop Grumman Corporation ("NGC"). These
assets were used by NGC in connection with its power electronics products
business. The Company also entered into (i) a sublease with NGC pursuant to
which the Company agreed to a five-year sublease for approximately 14,863 square
feet of rentable space in the Baltimore, Maryland area and (ii) a three-year
Transition Services Agreement providing the Company access to certain test
facilities and personnel of NGC on a fee basis. In consideration for these
foregoing assets and agreements, NGC received 578,761 shares of the Company's
Common Stock valued at $8.3438 per share or $4,829,066. In addition, the Company
issued to NGC a warrant to purchase an additional 100,000 shares of the
Company's Common Stock at an exercise price of $9.725 per share. The Company has
recorded the fair market value of this warrant, as determined by the Black-
Scholes option pricing model, of approximately $631,000 and approximately
$119,000 of legal, accounting, consultation and filing fees as a cost of this
transaction. On February 4, 2000, the Company issued to NGC an additional
warrant to purchase 100,000 shares of the Company's Common Stock at an exercise
price of $9.725 per share. This warrant is exercisable upon the occurrence of
certain defined events. The purchase price of the asset purchase has been
allocated as follows:
<TABLE>
<S> <C>
Inventory..................................................... 1,206,000
Property and equipment........................................ 1,091,643
Intangibles................................................... 3,281,423
</TABLE>
The pro forma financial information has not been presented, as the Company
views this transaction as the purchase of assets rather than as a business
combination.
7
<PAGE>
SATCON TECHNOLOGY CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)
Note D. Loss per Share
----------------------
The following is the reconciliation of the numerators and denominators of the
basic and diluted per share computations of loss:
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
DECEMBER 31,
1999 1998
------------------ ------------------
(as restated)
<S> <C> <C>
Net loss attributable to common shareholders................................... $(2,568,622) $ (304,590)
BASIC:
Common shares outstanding, beginning of period................................. 9,529,649 8,990,249
Weighted average common shares issued during the period........................ 1,263,381 --
Weighted average shares repurchased during the period.......................... -- (10,000)
----------- -----------
Weighted average shares outstanding--basic..................................... 10,793,030 8,980,249
=========== ===========
Net loss per share, basic...................................................... $ (0.24) $ (0.03)
=========== ===========
DILUTED:
Weighted average shares outstanding--basic..................................... 10,793,030 8,980,249
Weighted average common stock equivalents (a).................................. -- --
----------- -----------
Weighted average shares outstanding--diluted................................... 10,793,030 8,980,249
=========== ===========
Net loss per share, diluted.................................................... $ (0.24) $ (0.03)
=========== ===========
</TABLE>
(a) not included if antidilutive
As of December 31, 1999 and 1998, 2,719,394 and 922,616 options and warrants,
respectively, were excluded from the weighted average common shares outstanding
as their effect would be antidilutive.
Note E. Inventory
-----------------
Inventory consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1999 1999
------------- --------------
<S> <C> <C>
Raw material................................................... $3,294,832 $1,139,064
Work-in-process................................................ 3,092,421 2,199,199
Finished goods................................................. 1,800,187 359,709
------------- -------------
$8,187,440 $3,697,972
============= =============
</TABLE>
8
<PAGE>
SATCON TECHNOLOGY CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)
Note F. Comprehensive Income
-----------------------------
The Company's total comprehensive income is as follows:
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
DECEMBER 31,
1999 1998
------------------- ------------------
(as restated)
<S> <C> <C>
Net loss.......................................................... $(2,412,678) $ (304,590)
=========== ===========
Other comprehensive loss, net of tax:
Unrealized losses on securities.............................. $ -- $ (5,666)
Foreign currency translation adjustment...................... $ (12,472) $ --
=========== ===========
Other comprehensive loss.......................................... $ (12,472) $ (5,666)
=========== ===========
Comprehensive loss................................................ $(2,425,150) $ (310,256)
=========== ===========
</TABLE>
Note G. Segment Disclosures
----------------------------
As of October 1, 1998, the Company adopted SFAS No. 131, "Disclosure about
Segments of an Enterprise and Related Information." SFAS No. 131 establishes
annual and interim reporting standards for an enterprise's operating segments
and related disclosures about its products and services, geographical areas and
major customers. Operating segments are defined as components of an enterprise
about which separate financial information is available that is evaluated
regularly by the chief operating decision maker, or decision making group, in
deciding how to allocate resources and assess their performance.
The Company's organizational structure is based on strategic business units
that offer various products to the principal markets in which the Company's
products are sold. These business units equate to three reportable segments:
research and development, power electronic products and motion-control
products.
The Company markets and provides research and development services in
collaboration with third-parties. Film Microelectronics, Inc designs and
manufactures power electronics products. The MagMotor Division and Ling
Electronics specializes in the engineering and manufacturing of
motion-control products.
The Company evaluates performance based on revenue and profit and loss from
operations before income taxes, interest income, interest expense, other income
and losses and loss from investment in Beacon, excluding the effects of
amortization of intangible assets associated with acquisitions. Common costs not
directly attributable to a particular segment are allocated among segments based
on management's estimates.
9
<PAGE>
SATCON TECHNOLOGY CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)
The following is a summary of the Company's operations by operating segment:
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
--------------------------
DECEMBER 31,
------------
1999 1998
------------------ ------------------
<S> <C> <C>
Revenue........................................................................... $ 1,394,902 $ 1,730,572
----------- -----------
Loss from operations, net of amortization of intangibles.......................... $(1,132,470) $ (232,507)
=========== ===========
Power electronic products:
Revenue........................................................................... $ 1,808,008 $ 1,218,382
----------- -----------
Loss from operations, net of amortization of intangibles.......................... $ (377,783) $ (112,395)
=========== ===========
Motion-control products:
Revenue........................................................................... $ 1,353,497 $ 776,145
----------- -----------
(Loss)/income from operations, net of amortization of intangibles................. $ (690,249) $ 127,803
=========== ===========
</TABLE>
The following is a summary of the Company's long-lived assets by operating
segment:
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
----------------- -----------------
1999 1999
----------------- -----------------
<S> <C> <C>
Contract engineering:
Long-lived assets........... $6,101,163 $1,717,228
---------- ----------
Power electronic products:
Long-lived assets........... $3,875,105 $3,978,027
---------- ----------
Motion-control products:
Long-lived assets........... $4,544,413 $ 863,661
---------- ----------
</TABLE>
The Company operates and markets its services and products on a worldwide
basis with its principal markets as follows:
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
--------------------------
DECEMBER 31,
------------
1999 1998
----------------- -----------------
<S> <C> <C>
Geographic:
United States..................................................................... $4,259,643 $3,725,099
Europe............................................................................ 161,665 --
Rest of world..................................................................... 135,099 --
---------- ----------
Total revenue................................................................ $4,556,407 $3,725,099
========== ==========
</TABLE>
10
<PAGE>
Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations
This Quarterly Report on Form 10-Q contains forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934, as
amended, and Section 27A of the Securities Act of 1933, as amended. For this
purpose, any statements contained herein that are not statements of
historical fact may be deemed to be forward-looking statements. Without
limiting the foregoing, the words "believes", "anticipates", "plans",
"expects", and similar expressions are intended to identify forward-looking
statements. There are a number of important factors that could cause the
Company's actual results to differ materially from those indicated by such
forward-looking statements. These factors include, without limitation, those
set forth under the caption "Factors Affecting Future Results" below and
those set forth in Exhibit 99 to the Company's Quarterly Report on Form 10-Q
for the period ended June 30, 2000, which are expressly incorporated by
reference herein.
The following discussion reflects restatement of our financial statements
for the three-month periods ended December 31, 1999 and 1998. The restatement
was prompted by the recently completed initial audit of the financial
statements of our affiliate, Beacon Power Corporation ("Beacon Power"), and
reflects treating certain costs as expenses rather than being included in the
value of the net assets of Beacon Power at December 24, 1997. SatCon
Technology Corporation (the "Company" or "SatCon") previously had accounted
for these costs either as fixed assets or as part of the net assets of Beacon
Power. As a result, certain costs previously capitalized in 1996, 1997 and
1998 should have been expensed as incurred, therefore reducing SatCon's
investment in Beacon Power by $3.1 million as of December 24, 1997. The
adjustments to SatCon's financial statements at December 24, 1997, which
represents the date in which the Company began accounting for its investment
in Beacon Power under the equity method, consisted of a reduction of $37,000
from current assets, a reduction of $3.0 million from property and equipment
and intangible assets and an increase of $73,000 of accrued expenses. There
is no cumulative effect of this change on SatCon's stockholders' equity as of
December 31, 1999, since SatCon had reduced its investment in Beacon Power to
zero.
In addition, for all periods presented, expenses associated with funded
research and development activities have been reclassified as research and
development expenses from cost of revenue.
OVERVIEW
SatCon develops enabling technologies for the emerging distributed power
generation and power quality markets. SatCon also manufactures power and
energy management products that convert, condition, store and manage
electricity for businesses and consumers that require high-quality,
uninterruptible power. SatCon is utilizing its engineering and manufacturing
expertise to develop products to serve the distributed power generation and
power quality markets, including products for fuel cell and microturbine
power generation systems, hybrid-electric vehicles and flywheel energy
storage systems. SatCon believes the family of products it is developing will
be integral components of distributed power generation and power quality
systems.
In the past three years, SatCon has expanded its business and capabilities
through the following acquisitions:
- K&D MagMotor Corp.--a manufacturer of custom electric motors, acquired in
January 1997.
- Film Microelectronics, Inc.--a manufacturer of hybrid microelectronics,
acquired in April 1997.
- Inductive Components, Inc.--a value-added supplier of customized electric
motors, acquired in January 1999.
- Lighthouse Software, Inc.--a supplier of control software for machine
tools, acquired in January 1999.
- HyComp, Inc.--a manufacturer of electronic multi-chip modules, acquired in
April 1999.
- Ling Electronics, Inc.--a manufacturer of test equipment, power
converters, amplifiers and converters, acquired in October 1999.
11
<PAGE>
All of these acquisitions were accounted for using the purchase method of
accounting. In addition, in November 1999, the Company acquired intellectual
property, tooling and other assets from Northrop Grumman Corporation enabling
the Company to manufacture and sell electric drivetrains.
On May 20, 1997, the Company formed Beacon Power. On October 23, 1998,
Beacon Power completed a $4.8 million private placement of its class D
preferred stock and warrants to third-party investors, and the Company
relinquished significant control of Beacon Power. From June 1999 through
March 31, 2000, Beacon Power was financed through the issuance of
approximately $4.7 million of bridge notes and warrants to its investors,
including $1.0 million from the Company. On April 7, 2000, Beacon Power
issued 1,226,141 shares of its class E preferred stock and 306,535 class E
warrants in exchange for the conversion of all of its outstanding bridge
notes of which the Company received 347,407 shares of Beacon Power's class E
preferred stock and 86,852 class E warrants. On April 21, 2000, Beacon Power
raised an additional $4.1 million through the sale of additional bridge notes
that are convertible into Beacon Power's class F preferred stock. The Company
did not participate in this financing.
The results of the Company's operations include $3.1 million loss of
Beacon Power from May 8, 1997 to December 24, 1997 under the consolidation
method of accounting. As a result of a recapitalization of Beacon Power on
December 24, 1997, the Company began accounting for its investment in Beacon
Power using the equity method and has included $1.9 million loss of Beacon
Power for the period from December 25, 1997 through June 1998, which equaled
its initial investment in Beacon Power. In connection with the additional
investment by outside third parties on October 23, 1998, the Company
committed $30,000 to Beacon Power and, accordingly, recorded a $30,000 loss
from its investment in Beacon Power representing a portion of the suspended
losses as of October 23, 1998. For the period October 24, 1998 through June
21, 1999, the Company recorded no additional losses of Beacon Power as its
investment in Beacon Power had been reduced to zero as of October 23, 1998.
In June and August 1999, Beacon Power received $3.0 million of additional
financing commitments, including $1.0 million from the Company. As a result
of this additional commitment, the Company has included $1.0 million loss
from its investment in Beacon Power representing a portion of the suspended
losses as of June 22, 1999. For the period June 23, 1999 through September
30, 1999, the Company recorded no additional losses of Beacon Power as its
investment in Beacon Power had been reduced to zero as of June 22, 1999. As
of December 31, 1999, the Company has no obligations to provide any
additional funding to Beacon Power.
The Company performs funded research and development in collaboration with
third parties under both cost reimbursement and fixed-price contracts. Cost
reimbursement contracts provide for the reimbursement of allowable costs, an in
some situations, the payment of a fee. These contracts may contain incentive
clauses providing for increases or decreases in fees depending on how costs
compare with a budget. On fixed-price contracts, revenue is recognized on the
percentage of completion method based upon the proportion of costs incurred to
the total estimated costs for the contract. Revenue from reimbursement contracts
is recognized as services are performed. Revenue from manufactured products is
recognized upon shipment, or, if the product requires installation, the revenue
is recognized upon installation of the product.
The Company has incurred significant costs to develop its technology and
products. These cost have exceeded total revenue. As a result, the Company has
incurred net losses in each of the past five fiscal years and for the six months
ended March 31, 2000. As of March 31, 2000, the Company had an accumulated
deficit of $29.7 million. The Company intends to significantly increase its
capital expenditures and operating expenses to rapidly expand its manufacturing
capabilities and for general corporate purposes, including product development
activities, sales and marketing and administrative activities. Because the
Company expects to continue to invest in its business ahead of anticipated
future revenues, the Company expects to incur operating losses for at least the
next two years.
12
<PAGE>
COMPARISON OF THREE MONTHS ENDED DECEMBER 31, 1999 (AS RESTATED) AND DECEMBER
31, 1998 (AS RESTATED)
PRODUCT REVENUE. Product revenue increased by $1.2 million or 59% from
$2.0 million to $3.2 million. This increase was attributable to $800,000 in
revenue from Ling Electronics and $590,000 increase in revenue from the
Company's microelectronics products. These increases were partially offset by
a $223,000 decrease in revenue from the Company's high performance motors and
magnetic levitation products.
FUNDED RESEARCH AND DEVELOPMENT REVENUE. Funded research and
development revenue decreased by $336,000 or 19% from $1.7 million to $1.4
million. During the three months ended December 31, 1999, the Company devoted
more resources to internally funded research and development programs
including the development of power conversion products for the distributed
power generation market.
GROSS MARGIN. Gross margin decreased by $646,000 or 29% from $2.2
million to $1.6 million. Gross margin from products decreased by $311,000 and
funded research and development decreased by $336,000. Gross margin from
product revenue as a percentage of product revenue decreased to 5% from 24%.
The decrease in gross margin from product revenue as a percentage of product
revenue is due to higher costs for facilities and staffing.
RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses
increased by $294,000 or 21% from $1.4 million to $1.7 million. The increase
was attributable to the Company's increased focus on internally funded
research and development programs including the development of power
conversion products for the distributed power generation market offset by the
decrease in funded research and development revenue.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased $1.0 million or 105% from $990,000 to $2.0
million. The increase was primarily due to the inclusion of $484,000 of costs
from Ling Electronics, $300,000 of costs for facilities and staffing in an
effort to meet expected growth and demand for our products, and in 1999, the
deferral of $300,000 of costs associated with a research and development
contract.
AMORTIZATION OF INTANGIBLES. Amortization of intangibles increased by
$165,000 or 212% from $78,000 to $243,000. The increase was the result of
amortization of intangibles recorded in connection with the acquisition of
Ling Electronics in 1999 and certain intellectual property and other
intangible assets from Northrop Grumman Corporation in November 1999.
LOSS FROM INVESTMENT IN BEACON POWER CORPORATION. For the three months
ended December 31, 1999, the Company did not record a loss from its investment
in Beacon Power. As of September 30, 1998, the Company's remaining initial
investment of $1.9 million had been reduced to zero and as of June 22, 1999,
the Company's additional $1.0 million investment in Beacon Power had been
reduced to zero as a result of the recognition of a portion of the suspended
losses in Beacon Power and no additional losses were recorded during the
period from June 23, 1999 through December 31, 1999. During December 1998,
the Company committed an additional $30,000 in financing to Beacon Power and,
accordingly, recorded a $30,000 loss from its investment in Beacon Power
representing a portion of its suspended losses from Beacon Power.
OTHER INCOME (EXPENSE), NET. Other income, net increased to $30,000 from
$20,000. The increase was the result of an increase of cash and cash
equivalents being maintained in interest bearing accounts offset by interest
expense associated with capital leases entered into during fiscal year 1999.
13
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 1999, the Company's cash and cash equivalents were $3.2
million, an increase of approximately $641,000 from September 30, 1999. Cash
used in operating activities for the three months ended December 31, 1999 was
$1.7 million as compared to $240,000 in 1998. Cash used in operating
activities during the three months ended December 31, 1999 was primarily
attributable to the Company's net loss of approximately offset by a decrease
in accounts receivable, depreciation and amortization.
Cash used in investing activities for the three months ended December 31,
1999 was $511,000 as compared to $306,000 in 1998. Net cash used in investing
activities during the three months ended December 31, 1999, included capital
and intellectual property expenditures of $153,000, an investment in Beacon
Power of $333,000 and $24,000 for cash paid for Ling Electronics, net of cash
acquired. The Company estimates that it will spend an additional $2.0
million on capital expenditures during the next 12 months primarily to expand
its capacity to manufacture power conversion products. The Company expects
these additions to be financed from cash on hand and from lease financing.
Cash provided by financing activities for the three months ended December
31, 1999 was $2.8 million. Net cash provided by financing activities during
the three months ended December 31, 1999 includes net proceeds of $2.5
million from the sale of the Company's Common Stock and $355,000 from the
exercise of common stock options and warrants.
14
<PAGE>
The Company anticipates that the existing $3.2 million in cash and cash
equivalents will be sufficient to fund operations for at least the next twelve
months. However, there can be no assurance that the Company will not require
additional financings within this time frame or that any additional financing,
if needed, will be available to the Company on terms acceptable to the Company,
if any.
EFFECTS OF INFLATION
The Company believes that inflation and changing prices over the past three
years have not had a significant impact on the Company's net sales and revenues
or on income from continuing operations.
FACTORS AFFECTING FUTURE RESULTS
The Company's future results remain difficult to predict and may be affected
by a number of factors which could cause actual results to differ materially
from forward-looking statements contained in this Quarterly Report on Form 10-Q
and presented elsewhere by management from time to time. These factors include
business conditions within the aerospace, transportation, industrial, utility,
telecommunications, silicon wafer manufacturing, factory automation, aircraft
and automotive industries and the world economies as a whole, and competitive
pressures that may impact research and development spending. The Company's
revenue growth is dependent on technology developments and contract research and
development for both the government and commercial sectors and no assurance can
be given that such investments will continue or that the Company can
successfully obtain such funds. In addition, the Company's future growth
opportunities are dependent on the introduction of new products that must
penetrate aerospace, transportation, industrial, utility, telecommunications,
silicon wafer manufacturing, factory
15
<PAGE>
automation, aircraft and automotive market segments. No assurance can be given
that new products can be developed, or if developed, will be successful; that
competitors will not force prices to an unacceptably low level or take market
share from the Company; or that the Company can achieve or maintain profits in
these markets. Because of these and other factors, past financial performances
should not be considered an indicator of future performance. Investors should
not use historical trends to anticipate future results and should be aware that
the Company's stock price frequently experiences significant volatility. These
factors also include, without limitation, those set forth in Exhibit 99 to
the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2000,
which are expressly incorporated by reference herein.
On October 23, 1998, the Company granted the purchasers of Beacon class D
preferred stock the right to cause the Company, under the circumstances
described below, to purchase all of Beacon's shares issued to those purchasers
and, upon exercise of this "put right," the Company must pay $4,750,000 (plus
interest accruing at 12 1/2% per annum from October 23, 1998) in its Common
Stock, valued at the average fair value for the fifteen trading days before and
after notice of exercise of the put right. The put right is exercisable within
sixty days of the second, third, fourth and fifth anniversary of the closing
date of the transaction, upon certain events of bankruptcy of Beacon and upon
the occurrence of certain going private transactions involving the Company. If
the put right were to be exercised, the Company would most likely recognize a
loss equal to the value of its Common Stock issued upon exercise of the put
right.
EFFECT OF RECENT ACCOUNTING PRONOUNCEMENTS
In June 1999, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 137 (SFAS No. 137), "Accounting for
Derivative Instruments and Hedging Activities-Deferral of the Effective Date of
FASB Statement No. 133," which defers the effective date of Statement of
Financial Accounting Standards No. 133 (SFAS No. 133), "Accounting for
Derivative Instruments and Hedging Activities" to all fiscal quarters of all
fiscal years beginning after June 15, 2000. SFAS No. 133 establishes a new model
for accounting for derivatives and hedging activities. It requires an entity to
recognize all derivatives as either assets or liabilities in the statement of
financial position and measure these instruments at fair value. The Company will
adopt SFAS No. 133 beginning in the first quarter of the fiscal year ending
September 30, 2001.
Adoption of SFAS No. 133 is not expected to have a material impact to the
Company's consolidated financial position, results of operations or cash flows.
EFFECTS OF YEAR 2000
The Company has assessed its software systems and internal operations. The
Company believes that it has resolved all potential Year 2000 issues and
problems and, to the best of its knowledge, its systems are Year 2000 compliant.
However, if the Company's systems do not operate properly with respect to date
calculations involving the Year 2000 and subsequent dates, the Company could
incur unanticipated expenses to remedy any problems, which could seriously harm
its business. The Company may also experience reduced sales of its products as
current or potential customers reduce their budgets due to increased
expenditures on their own Year 2000 compliance efforts.
Additionally, the Company relies on information technology supplied by third
parties and its other business partners, including third-party distributors and
consultants, who are also heavily dependent on information technology systems
and on their own and third-party vendor systems. Year 2000 problems experienced
by the Company or any of these third parties could materially adversely affect
the Company's business. Prior versions of the Company's products may contain
technology from third parties that is not Year 2000 compliant.
Given the pervasive nature of the Year 2000 problem, the Company cannot
guarantee that disruptions in other industries and market segments will not
adversely affect its business. Moreover, the Company's costs related to Year
2000 compliance, which thus far have not been material, could ultimately be
significant. In the event that the Company experiences unforeseen disruptions as
a result of the Year 2000 problem, the Company's business could be seriously
affected.
16
<PAGE>
Item 3: Quantitative and Qualitative Disclosures About Market Risk
The Company develops products in the United States and sells them worldwide.
As a result, the Company's financial results could be affected by factors such
as changes in foreign exchange rates or weak economic conditions in foreign
markets. Since the Company's sales are currently priced in U.S. dollars and are
translated to local currency amounts, a strengthening of the dollar could make
the Company's products less competitive in foreign markets. Interest income and
expense are sensitive to changes in the general level of U.S. interest rates,
particularly since the Company's investments are in short-term instruments and
the Company's available line of credit requires interest payments calculated at
variable rates. Based on the nature and current levels of the Company's
investments and debt, however, the Company has concluded that there is no
material market risk exposure.
17
<PAGE>
PART II: OTHER INFORMATION
Item 1. Legal Proceedings:
On November 6, 1999, APACE, Inc. ("APACE") commenced an action against the
Company in the Supreme Court of the State of New York claiming that the Company
had been awarded a "Prime Contract" by the Department of Energy and that the
Company had failed or refused to negotiate a subcontract with APACE. APACE is
seeking $1,000,000 in damages. The Company denies the allegations, has moved to
stay the action and has filed for arbitration with the American Arbitration
Association in Boston, Massachusetts. The American Arbitration Association has
decided that the arbitration will go forward in Boston and not New York. In the
meantime, APACE has requested that the court permit the action to go forward and
for the arbitration to be stayed. At this time, the arbitration is still going
forward in Boston, and an arbitrator has been selected. It is anticipated that a
preliminary hearing will be scheduled shortly.
Item 2. Changes in Securities and Use of Proceeds:
RECENT SALES OF UNREGISTERED SECURITIES
On October 21, 1999, in connection with its acquisition of Ling Electronics,
Inc. and Ling Electronics, Ltd., the Company issued 770,000 shares of its Common
Stock to MTI, the parent entity of the two acquired entities. The common stock
was issued in reliance upon the exemptions from registration under Section 4(2)
of the Securities Act or Regulation D promulgated thereunder, relative to sales
by an issuer not involving a public offering.
On October 21, 1999, in connection with an investment, the Company issued
370,800 shares of its Common Stock to Mechanical Technology Incorporated. In
addition, the Company issued to MTI a warrant to purchase 36,000 shares of its
Common Stock at an exercise price of $8.80 per share. This warrant expires on
October 21, 2003. On January 31, 2000, in connection with a second closing of
this investment, the Company issued 659,200 shares of its Common Stock and a
warrant to purchase 64,000 shares of its Common Stock at an exercise price of
$8.80 per share. This warrant expires on January 31, 2004. Both the common stock
and the warrants were issued in reliance upon the exemptions from registration
under Section 4(2) of the Securities Act or Regulation D promulgated thereunder,
relative to sales by an issuer not involving any public offering.
On November 16, 1999, the Company issued 578,761 shares of its Common Stock to
NGC in exchange for certain intellectual property, equipment and other assets
which were used by NGC in connection with its power electronics products
business. In addition, the Company issued to NGC a warrant to purchase 100,000
shares of its Common Stock at an exercise price of $9.725 per share. In
connection with this transaction, on February 4, 2000, the Company issued to NGC
an additional warrant to purchase 100,000 shares of its Common Stock at an
exercise price of $9.725 per share. These warrants expire on December 31, 2006.
Both the Common Stock and the warrants were issued in reliance upon the
exemptions from registration under Section 4(2) of the Securities Act or
Regulation D promulgated thereunder, relative to sales by an issuer not
involving any public offering.
Item 3. Defaults upon Senior Securities:
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders:
Not applicable.
Item 5. Other Information:
Not applicable.
Item 6 Exhibits and Reports on Form 8-K:
(a) Exhibits
10.41 Promissory Note, dated October 6, 1999, made in favor of the Registrant
by Michael C. Turmelle in the amount of $10,000, together with Promissory
Note, dated December 6, 1999, made in favor of the Registrant by Michael
C. Turmelle in the amount of $75,000 is incorporated herein by
reference to Exhibits to the Registrant's Quarterly Report on Form
10-Q for the period ended December 31, 1999.
10.42 Senior Secured Convertible Promissory Note, dated January 7, 2000, made
in favor of the Registrant by Beacon Power Corporation in the amount of
$200,000 is incorporated herein by reference to Exhibits to the
Registrant's Quarterly Report on Form 10-Q for the period ended December
31, 1999.
10.43 Stock Purchase Warrant issued on February 4, 2000 by the Registrant to
Northrop Grumman Corporation is incorporated herein by reference to
Exhibits to the Registrant's Quarterly Report on Form 10-Q for the
period ended December 31, 1999.
27 Financial Data Schedule
99 Risk Factors are incorporated herein by reference to Exhibit 99 to the
Registrant's Quarterly Report on Form 10-Q for the period ended June
30, 2000.
(b) Reports on Form 8-K
On November 5, 1999, the Registrant filed a Current Report on Form 8-K, dated
October 21, 1999, in connection with its acquisition of Ling Electronics, Inc.
and Ling Electronics, Ltd. from Mechanical Technology Incorporated and an
investment by Mechanical Technology Incorporated of approximately $7,000,000.
On November 24, 1999, the Registrant filed a Current Report on Form 8-K, dated
November 16, 1999, in connection with its purchase of certain intellectual
property, equipment and other assets from Northrop Grumman Corporation.
On January 4, 2000, the Registrant filed a Current Report on Form 8-K/A, dated
October 21, 1999, in connection with its acquisition of Ling Electronics, Inc.
and Ling Electronics, Ltd. from Mechanical Technology Incorporated.
18
<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: August 18, 2000 By: /s/ Sean F. Moran
---------------------
Sean F. Moran, Chief Financial
Officer
(Principal Financial and
Accounting Officer)
19
<PAGE>
EXHIBIT INDEX
10.41 Promissory Note, dated October 6, 1999, made in favor of the Registrant
by Michael C. Turmelle in the amount of $10,000, together with Promissory
Note, dated December 6, 1999, made in favor of the Registrant by Michael
C. Turmelle in the amount of $75,000 is incorporated herein by
reference to Exhibits to the Registrant's Quarterly Report on Form
10-Q for the period ended December 31, 1999.
10.42 Senior Secured Convertible Promissory Note, dated January 7, 2000, made
in favor of the Registrant by Beacon Power Corporation in the amount of
$200,000 is incorporated herein by reference to Exhibits to the
Registrant's Quarterly Report on Form 10-Q for the period ended December
31, 1999.
10.43 Stock Purchase Warrant issued on February 4, 2000 by the Registrant to
Northrop Grumman Corporation is incorporated herein by reference to
Exhibits to the Registrant's Quarterly Report on Form 10-Q for the
period ended December 31, 1999.
27 Financial Data Schedule
99 Risk Factors are incorporated herein by reference to Exhibit 99 to the
Registrant's Quarterly Report on Form 10-Q for the period ended June
30, 2000.
20
