<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QA
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended March 31, 1996.
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from __________________ to
________________.
Commission File Number: 0 - 21810
Amerigon Incorporated
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California 95-431855-4
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404 East Huntington Drive, Monrovia, California 91016
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(818) 932-1200
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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
requirement for the past 90 days. Yes X No
--- ---
At May 1, 1996 the registrant had 7,050,000 shares of Class A Common Stock; no
par value; 0 shares of Class B Common Stock, no par value; and 0 shares
Preferred Stock, no par value, issued and outstanding.
(1)
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AMERIGON INCORPORATED
TABLE OF CONTENTS
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet 3
Statement of Operations 4
Statement of Cash Flows 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Part II OTHER INFORMATION 10
Signature 10
(2)
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AMERIGON INCORPORATED
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
December 31, March 31,
1995 1996
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ASSETS (unaudited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $4,486 $1,129
Accounts receivable less allowance of $100 1,052 1,273
Unbilled revenue 1,468 3,284
Inventories, primarily raw materials 243 241
Deferred contract costs 550
Prepaid expenses and other assets 961 827
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Total current assets 8,210 7,304
Property and Equipment, net 785 843
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Total Assets $8,995 $8,147
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $1,123 $1,061
Deferred revenue 94 87
Accrued liabilities 512 451
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Total current liabilities 1,729 1,599
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Long Term Portion of Lease Liability 68 64
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Shareholders' Equity:
Preferred stock, no par value; 5,000,000 shares
authorized, none issued and outstanding
Common stock:
Class A -no par value; 17,000,000 shares authorized,
4,050,000 issued and outstanding 17,270 17,176
(An additional 3,000,000 shares held in escrow)
Class B -no par value; 3,000,000 shares authorized,
none issued and outstanding
Contributed capital 3,115 3,115
Deficit accumulated during development stage (13,187) (13,807)
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Total shareholders' equity 7,198 6,484
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Total Liabilities and Shareholders' Equity $8,995 $8,147
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</TABLE>
See accompanying notes to the financial statements.
(3)
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AMERIGON INCORPORATED
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
From
April 23, 1991
Three Months (inception)
Ended March 31, to March 31,
1995 1996 1996
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(unaudited) (unaudited)
<S> <C> <C>
Revenues:
Development contracts and
related grants $671 $3,054 $10,996
Grants 226 - 6,696
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Total revenues 897 3,054 17,692
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Costs And Expenses:
Direct development contract and
related grant costs 623 2,771 $8,857
Direct grant costs 172 - 5,221
Research and development 655 384 7,043
Selling, general and administrative,
including reimbursable expenses 789 555 10,932
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Total Costs and Expenses 2,239 3,710 32,053
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Operating Loss (1,342) (656) (14,361)
Interest Income 67 36 554
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Net Loss ($1,275) ($620) ($13,807)
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Net Loss Per Share ($0.39) ($0.15)
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Weighted Average Number
Of Shares Outstanding 3,300 4,050
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</TABLE>
See accompanying notes to the financial statements.
(4)
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AMERIGON INCORPORATED
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED STATEMENT OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
From
April 23, 1991
Three Months (inception)
Ended March 31, to March 31,
1995 1996 1996
-------------------- --------------
(unaudited) (unaudited)
<S> <C> <C>
Operating Activities:
Net loss ($1,275) ($620) ($13,807)
Adjustments to reconcile net loss to
cash used in operating acitivites:
Depreciation and amortization 84 90 644
Provision for doubtful accounts 110
Stock option compensation 712
Contributed capital -founders'
services without cash compensation 300
Change in operating assets and liablilities:
Accounts receivable (39) (221) (1,383)
Unbilled revenue 92 (1,816) (3,284)
Inventory (426) 2 (241)
Deferred contract costs (550) (550)
Prepaid expenses and other assets 32 134 (826)
Accounts payable 529 (62) 1,061
Deferred revenue (439) (7) 87
Accrued liabilities (40) (61) 451
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Net cash used in operating acitivities (1,482) (3,111) (16,726)
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Investing Activities:
Purchase of property and equipment (241) (148) (1,410)
Short term investments 996 0
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Net cash used in investing activities 755 (148) (1,410)
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Financing Activities:
Proceeds from sale of common stock, net (94) 17,176
Proceeds from sale of warrants 1
Borrowing under line of credit 1,100
Repayment of line of credit (1,100)
Repayment of capital lease (3) (4) (14)
Notes payable to shareholders contributed
to capital 2,102
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Net cash provided by (used in) financing activities (3) (98) 19,265
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Net increase (decrease) in cash (730) (3,357) 1,129
Cash and cash equivalents, beginning of period 2,405 4,486 -
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Cash and cash equivalents, end of period $1,675 $1,129 $1,129
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</TABLE>
See accompanying notes to the financial statements.
(5)
<PAGE>
AMERIGON INCORPORATED
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - THE COMPANY:
Amerigon Incorporated (the "Company") is a development stage enterprise,
which was incorporated in California on April 23, 1991 primarily to develop,
manufacture and market proprietary, high technology automotive components and
systems for gasoline-powered and electric vehicles.
NOTE 2 - BASIS OF PRESENTATION AND SUMMARY OF CERTAIN ACCOUNTING POLICIES:
The accompanying condensed balance sheet as of March 31, 1996 and the
condensed statements of operations and cash flows for the three months ended
March 31, 1996 and the period from April 23, 1991 (inception) to March 31, 1996
have been prepared by the Company without audit. In the opinion of management,
all adjustments (consisting of normal recurring adjustments) necessary for fair
presentation have been included. The results of operations for the three month
period ended March 31, 1996 are not necessarily indicative of the operating
results for the full year.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. These condensed financial statements should be
read in conjunction with the financial statements and notes thereto included in
the Company's Form 10-K for the year ended December 31, 1995.
The condensed financial statements have been restated to reflect certain
adjustments to contract cost accounting and revenue recognition. In the three
months ended March 31, 1996, these adjustments resulted in a decrease in
revenues from development and related grants of $800,000 and a decrease in
expenses related to development contract costs and related grants of $550,000
which caused an increase in the operating loss and net loss of $250,000.
Net loss per share increased by $.06.
DEVELOPMENT CONTRACT REVENUES. The Company has entered into a number of
fixed price contracts under which revenue is recognized using the percentage of
completion method, or in the case of short duration contracts, when the
prototype or services are delivered. Development contract revenues earned are
recorded on the balance sheet as unbilled revenue until billed.
GRANT REVENUES. Revenue from government agency grants and other sources
pursuant to cost-sharing arrangements is recognized when reimbursable costs have
been incurred. Grant revenues earned are recorded on the balance sheet as
unbilled revenue until billed.
(6)
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NOTE 3 - NET LOSS PER SHARE:
The Company's net loss per share calculations are based upon the weighted
average number of shares of common stock outstanding. Excluded from this
calculation are the 3,000,000 Escrowed Contingent Shares (Note 4). Common stock
equivalents (stock options and stock warrants) are anti-dilutive in both periods
and are excluded from the net loss per share calculation.
NOTE 4--ESCROW AGREEMENT
Pursuant to the Underwriting Agreement, prior to the effective date of the
June 1993 initial public offering, 3,000,000 shares of the Company's Class A
Common Stock ("Escrowed Contingent Shares") were deposited into escrow by the
then existing shareholders in proportion to their then current holdings. These
shares are not transferable (but may be voted) and will be released from escrow
in the event the Company attains certain earnings levels (which have been
adjusted for the December 29, 1995 private placement of 750,000 shares) during
the period through December 31, 1998 or the market price of the Class A Common
Stock reaches specified levels during the period through June 10, 1996.
The release of the Escrowed Contingent Shares will be deemed compensatory
and, accordingly, will result in charges to earnings equal to the fair market
value of the Escrowed Contingent Shares recorded ratably over the period
beginning on the date when management determines that any of the specified
events are probable of being attained and ending on the date on which the
Escrowed Contingent Shares are released. At the time a goal is attained,
previously unrecognized compensation expense will be adjusted by a one-time
charge based on the then fair market value of the shares released from Escrow.
Such charges could substantially reduce the Company's net income or increase the
Company's loss for financial reporting purposes in the periods such charges are
recorded. The specified events are not considered probable of attainment at
this time.
On April 30, 1999, all shares that have not been released from Escrow will
automatically be exchanged for shares of Class B Common Stock, which will then
be released from Escrow. Any dividends or other distributions made with respect
to Escrowed Contingent Shares that have not been released from Escrow as Class A
Common Stock will be forfeited and contributed to the capital of the Company on
April 30, 1999.
(7)
<PAGE>
PART 1
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
FIRST QUARTER 1996 COMPARED WITH FIRST QUARTER 1995
REVENUES. Revenues for the three months ended March 31, 1996 ("First
Quarter 1996") were $3,054,000 as compared with revenues of $897,000 in the
three months ended March 31, 1995 ("First Quarter 1995"). Product development
and grant revenue related to the Company's electric vehicle program increased
approximately $2,344,000 in the current quarter compared to the same period in
1995. These revenues are recognized on the percentage of completion basis under
the product development contract and when reimbursable costs are incurred under
the grants. A major electric vehicle project which started in the First Quarter
1995 is still in process and is expected to continue through the third fiscal
quarter of 1996. The level of activity in the project involved considerably
more labor and material expenses in the First Quarter 1996 compared to the
beginning stages of the project in the First Quarter 1995 when engineering
design was the principal activity. In the First Quarter 1996, a prototype of
the vehicle was completed and was being tested; final design changes were being
made; and tooling and parts were being ordered to make additional vehicles in
kit form for eventual shipment to the customer. As a consequence, revenues
increase as expenses increase under the percentage of completion accounting for
the development contract and under the recognition of reimbursable costs for the
related grants.
During the First Quarter 1996, development continued on the thermoelectric
seat and the ultra-wideband radar pursuant to development contracts. The
magnitude of the expenses and the revenues recognized for the development of the
seat systems and radar, and for the sale of audio navigation systems in the
First Quarter 1996 was $282,000 compared to $243,000 in the First Quarter 1995.
Grant revenues in the First Quarter 1996 of approximately $320,000 were
directly related to the electric vehicle development contracts activities and
are combined with the development contract revenues. There were no grant
activities in the First Quarter 1996 related to the Company's other products.
In the First Quarter 1995, grant revenues were $226,000 and were related to two
other electric vehicle projects and small projects in each of the other three
product areas.
DIRECT DEVELOPMENT CONTRACT AND RELATED GRANT COSTS. Direct development
contract and related grant costs increased from $623,000 in the First Quarter
1995 to $2,771,000 in the First Quarter 1996 due to the increased activity in
the Company's electric vehicle program, as discussed above.
RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses
decreased from $655,000 in First Quarter 1995 to $384,000 in the First Quarter
1996 due to the fact that more of the Company's research and development
activities are funded by grants and by development
(8)
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contracts. Furthermore, the company was continuing development of the audio
navigation system in the First Quarter 1995 which was completed in late 1995 and
therefore considerably less was expended in the First Quarter 1996.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative ("SG&A") expenses decreased from $789,000 in First Quarter 1995
to $555,000 in First Quarter 1996. Direct and indirect overhead expenses
included in SG&A which are associated with development contracts are allocated
to such contracts. As a result of the increased activity as discussed under
"Revenues," more of such expenses were allocated to development contracts in the
First Quarter 1996 than in the First Quarter 1995.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1996, the Company had net working capital of $5,705,000.
Since its inception, the Company's principal sources of operating capital have
been the proceeds of its initial public offering in June 1993 and the private
placement of common stock in December 1995, and the revenues from grants,
development contracts and the sale of prototypes to customers. To a lesser
extent the Company received capital contributions from the Company's principal
shareholders before becoming a public company.
In the First Quarter 1996 cash and cash equivalents decreased by
$3,357,000. Operating activities used $3,111,000 of which $620,000 was for the
operating loss, $1,816,000 was for the increase in unbilled revenues related to
the development contracts and grants related to the Company's electric vehicle
program, and $550,000 was for deferred contract costs related to work for the
proposed contract with an Indian joint venture company. Unbilled revenues at
the end of the First Quarter 1996 will be billed later in the fiscal year.
Investing activities used $148,000 related to the purchase of property and
equipment. Financing activities used $94,000 for expenses related to the
private common stock offering in December 1995.
The Company expects to incur losses for the foreseeable future due to the
significant cost of its product development and marketing activities and
establishing its manufacturing capabilities. The Company believes it has
sufficient cash to further its development of the audio navigation system,
electric vehicle systems, climate controlled seat and radar products for the
balance of the fiscal year and it may be able to supplement that cash with
additional development funds from customers and from grants. The Company also
has a bank line of credit to finance the cash flow requirements to complete a
major electric vehicle project. Broader or faster expansion of these
development programs may be desirable depending on customer interest and market
opportunities; furthermore, significant expenditures for capital equipment and
tooling could be required to begin volume production of electric vehicle
systems, climate controlled seats or radar products any of which would likely
require additional financing.
To the extent available, the Company will seek bank financing to support
the working capital needs of its activities. The current bank line of credit
which specifically relates to one contract, and under which up to $4,000,000
is available, extends to June 30, 1996. However, other financing may be
required depending on the circumstances of development activities and of
production preparation. There can be no assurance that adequate working
capital financing and/or other required additional financing can be obtained,
or that it will be obtained on terms favorable to the Company.
(9)
<PAGE>
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Not applicable.
ITEM 2. CHANGES IN SECURITIES.
Not applicable.
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.
Exhibits: Not applicable.
Reports on Form 8-K: January 5, 1996.
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.
Amerigon Incorporated
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Registrant
Date: October 23, 1996 /s/ R. John Hamman, Jr.
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R. John Hamman, Jr.
Vice President Finance and
Chief Financial Officer
(10)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 1,129
<SECURITIES> 0
<RECEIVABLES> 4,557
<ALLOWANCES> 100
<INVENTORY> 241
<CURRENT-ASSETS> 7,304
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 8,147
<CURRENT-LIABILITIES> 1,599
<BONDS> 0
0
0
<COMMON> 17,176
<OTHER-SE> (10,692)
<TOTAL-LIABILITY-AND-EQUITY> 8,147
<SALES> 0
<TOTAL-REVENUES> 3,054
<CGS> 0
<TOTAL-COSTS> 3,710
<OTHER-EXPENSES> (36)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (620)
<INCOME-TAX> 0
<INCOME-CONTINUING> (620)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (620)
<EPS-PRIMARY> (.15)
<EPS-DILUTED> 0
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