SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended July 31, 1997
Commission File Number 0-25184
U. S. ELECTRICAR, INC.
(Exact name of registrant as specified in its charter)
California 95-3056150
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
5 Thomas Mellon Circle, Suite 305, San Francisco, California 94134 (Address
of principal executive offices, including zip code)
(415) 656-2400
(Registrant's telephone number, including area code)
--------------
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, no par value
(Title of class)
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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of the
registrant as of October 23, 1997 was $5,110,000. For purposes of this
calculation only, (i) shares of Common Stock and Series A Preferred Stock are
deemed to have a market value of $0.085 per share, and the Series B Convertible
Preferred Stock is deemed to have a market value of $0.57 per share, based on
the average of the high bid and low ask prices of the Common Stock on October
23, 1997, and (ii) each of the executive officers, directors and persons holding
5% or more of the outstanding Common Stock (including Series A Preferred Stock
and Series B Convertible Preferred Stock on an as converted basis) is deemed to
be an affiliate.
The number of shares of Common Stock outstanding as of October 23, 1997 was
151,205,668.
<PAGE>
EXPLANATORY NOTE
This Form 10-K/A constitutes Amendment No. 1 to the Registrant's Annual
Report on Form 10-K for the year ended July 31, 1997, originally filed by the
Registrant on October 29, 1997, and is being filed solely for the purpose of
filing the information required by Part III (Items 10, 11, 12 and 13) to the
Form 10-K.
2
<PAGE>
U.S. ELECTRICAR, INC.
FORM 10-K/A
AMENDMENT NO. 1 TO 1997 ANNUAL REPORT
TABLE OF CONTENTS
PART III
Item 10. Directors and Executive Officers of the Registrant 4
Item 11. Executive Compensation 6
Item 12. Security Ownership of Certain Beneficial Owners and Management 9
Item 13. Certain Relationships and Related Transactions 11
SIGNATURES 13
3
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
The following table sets forth certain information with respect to the
Directors and executive officers of the Company:
================================================================================
Name Age Position
- --------------------------------------------------------------------------------
Carl D. Perry 65 Chairman of the Board and
Chief Executive Officer
- --------------------------------------------------------------------------------
Don Kang 43 President, Chief Operating
Officer and Director
- --------------------------------------------------------------------------------
Malcolm R. Currie, Ph.D. (1) 70 Director
- --------------------------------------------------------------------------------
James S. Miller (1) 62 Director
- --------------------------------------------------------------------------------
Edwin O. Riddell (2) 55 Director
- --------------------------------------------------------------------------------
David A. Ishag (1) (2) 30 Director
- --------------------------------------------------------------------------------
Donald H. Dreyer 61 Director
================================================================================
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
Carl D. Perry, Chairman of the Board and Chief Executive Officer. Mr.
Perry served as a Director and as an Executive Vice President of the Company
from July 1993 until November 1997. In November 1997, Mr. Perry was elected as
Chairman of the Board and Chief Executive Officer of the Company. Prior to
joining the Company, he was an international aerospace and finanancial
consultant, from 1989 to July 1993. From 1984 until 1988, Mr. Perry served as
Executive Vice President of Canadair Ltd., Canada's largest aerospace
corporation, where he conducted strategic planning, worldwide marketing, and
international joint ventures. From 1979 to 1983, Mr. Perry served as Executive
Vice President of the Howard Hughes Summa Corporation's Helicopter Company, now
known as McDonnell Douglas Helicopters, where he was responsible for general
management, worldwide business development, and international operations.
Don C. Kang, President, Chief Operating Officer and Director. Mr. Kang
was elected as a Director of the Company in November 1997. Mr. Kang joined the
Company as Vice President of Engineering in October 1996, when the Company
acquired Systronix Corporation. From 1994 to October 1996, Mr. Kang served as
the President of Systronix Corporation. From 1979 to 1990, Mr. Kang served in
several capacities with Hughes Aircraft Company, including Technical Manager.
From 1990 to 1994, Mr. Kang served as Project Manager of Hughes Power Control
Systems.
Malcolm R. Currie, Ph.D., Director. Dr. Currie has served as a Director
of the Company since March 1995. Since 1994, he has served as Chairman of
Electric Bicycle Co., a developer of electric bicycles. From 1986 until July
1992, Dr. Currie served as Chairman and Chief Executive Officer of Hughes
Aircraft Co.
4
<PAGE>
(now Hughes Electronics), and from 1985 until 1988, he was the Chief Executive
Officer of Delco Electronics. His career in electronics and management has
included research with many patents and papers in microwave and millimeter wave
electronics, laser, space systems, and related fields. He has led major programs
in radar, commercial satellites, communication systems, and defense electronics.
He served as Undersecretary of Defense for Research and Engineering, the Defense
Science Board, and currently serves on the Boards of Directors of UNOCAL,
Investment Company of America, and LSI Logic, all of which are publicly traded
companies. He is President of the American Institute of Aeronautics and
Astronautics, and is Chairman of the Board of Trustees of the University of
Southern California.
James S. Miller, Director. Mr. Miller has served as a Director of the
Company since November 1990. From 1963 to the present, Mr. Miller has been
active in start-up and growth businesses, including the ownership of his own
vineyards. He was Director and Officer of Oxford Laboratories from 1959 to 1974,
Chemetrics Corporation from 1975 to 1979, and Grand Cru Vineyards from 1976 to
1981. Oxford Laboratories and Chemetrics Corporation are medical diagnostic
laboratory equipment companies.
Edwin O. Riddell, Director. Mr. Riddell has served as a Director of the
Company since June 1995. From January 1991 to the present, Mr. Riddell has
served as Manager of the Transportation Business Unit in the Customer Systems
Group at the Electric Power Research Institute in Palo Alto, California, and
from 1985 until November 1990, he served with the Transportation Business Unit
as Vice President, Engineering, working on electric public transportation
systems. From 1979 to 1985, he was Vice President and General Manager of Lift U,
Inc., the leading manufacturer of handicapped wheelchair lifts for the transit
industry. Mr. Riddell has also worked with Ford, Chrysler, and General Motors in
the area of auto design (styling), and has worked as a member of senior
management for a number of public transit vehicle manufacturers. Mr. Riddell has
been a member of the American Public Transit Association's ("APTA") Association
Member Board of Governors for over 15 years. He has also served on APTA's Board
of Directors.
David A. Ishag, Director. Mr. Ishag was elected a Director of the
Company in September 1995. In 1994, Mr. Ishag founded, and continues as a
general partner of the firm Hirsch & Cie, an external financial advisor to Union
Bancaire Privee (CGI-TDB) in Geneva, Switzerland, where his principal activities
are private banking and asset allocation. From 1991 to 1994, Mr. Ishag conducted
asset management and general banking duties for the Republic National Bank of
New York (Geneva), and also had marketing responsibility for building clientele
portfolios. From 1988 to 1991, Mr. Ishag was associated with European
Investments & Development Group PLC, a London property investment company,
acting as a Director of portfolio management. From 1986 to 1988, Mr. Ishag was
with Barclays de Zoete Wedd Ltd., a graduate banking program, working with
mergers and acquisitions in the Corporate Finance department.
Donald H. Dreyer. Mr. Dreyer was elected a Director of the Company in
January 1997. Mr. Dreyer is President and CEO of Dreyer & Company, Inc., a
consultancy in credit, accounts receivable and insolvency services, which was
established in 1990. Mr. Dreyer has served as Chairman of the Board of Credit
Managers Association of California during the 1994 to 1995 term and continues to
serve as a member of the Advisory Committee of that organization. Mr. Dreyer is
currently the co-Chair of the Creditors Committees' Subcommittee of the American
Bankruptcy Institute and is a member of the Western Advisory Committee of Dun &
Bradstreet, Inc.
Relationships Among Directors or Executive Officers
There are no family relationships among any of the Directors or
executive officers of the Company.
5
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's Directors,
executive officers and persons who own more than 10% of the Company's Common
Stock (collectively, "Reporting Persons") to file reports of ownership and
changes in ownership of the Company's Common Stock to the Securities and
Exchange Commission ("SEC"). Copies of these reports are also required to be
delivered to the Company.
The Company believes, based solely on its review of the copies of such
reports received or written representations from certain Reporting Persons, that
during fiscal 1997, all Reporting Persons complied with all applicable filing
requirements.
Item 11. Executive Compensation
Summary Compensation Table
<TABLE>
The following table sets forth all compensation earned by the Company's
Chief Executive Officer and former Chief Executive Officer, and each of the
other most highly compensated executive officers of the Company whose annual
salary and bonus exceeded $100,000 for the years ended July 31, 1997, 1996 and
1995 (collectively, the "Named Executive Officers"):
<CAPTION>
Summary Compensation Table
Name and Principal Position Annual Compensation
- --------------------------- --------------------------------------------------------
<S> <C> <C> <C> <C>
Long-Term
---------
Year Compensation Awards
---- ----------------------
Securities
Underlying
Salary Bonus Options/SARs
($) ($) (#)
------ ----- ------------
Roy Y. Kusumoto(1) 1997 50,000 -- --
Former Chief Executive Officer 1996 50,000 -- --
and President 1995 13,461 -- 10,002,000(2)
Carl D. Perry(3) 1997 75,000 -- --
Chief Executive Officer 1996 75,000 -- --
1995 75,000 -- --
<FN>
- -----------------------------
(1) Mr. Kusumoto became Chief Executive Officer of the Company in April
1995 and ceased to be a Director or officer of the Company in November
1997. Salary in 1995 was paid for the period from April 17, 1995
through July 31, 1995.
(2) 2,000 of such options were granted to Mr. Kusumoto in his capacity as
a nonemployee Director under the 1994 Director Stock Option Plan prior
to his appointment as an officer of the Company in April 1995.
(3) Mr. Perry was elected as Chief Executive Officer in November 1997.
Amounts paid to Mr. Perry for all periods shown were paid to Mr. Perry
as an Executive Vice President of the Company. Mr. Perry's current
salary is $50,000 per year.
</FN>
</TABLE>
6
<PAGE>
Option/SAR Grants
No grants of stock options or stock appreciation rights ("SARs") were
made during fiscal 1997 to the Named Executive Officers.
Option Exercises and Option Values
<TABLE>
The following table sets forth information concerning option exercises
during 1997, and the aggregate value of unexercised options as of July 31, 1997,
held by each of the Named Executive Officers:
<CAPTION>
Aggregated Option/SAR Exercises in 1997
and Option Values at July 31, 1997
Number of Securities
Aggregate Underlying Unexercised Value of Unexercised
Option/SAR Options/SARs at In-the-Money Options at
Exercises in 1997 July 31, 1997 July 31, 1997 (1)
----------------- ---------------------- ------------------------
Shares Value
Acquired on Realized
Name Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Roy Y. Kusumoto -- -- 2,002,000 8,000,000 (2) $ -- $ --
Carl D. Perry -- -- 852,000 348,000 $ -- $ --
<FN>
- -----------------------------
(1) Calculated on the basis of the average of the high bid and low ask prices
of the Common Stock on July 31, 1997 of $0.265 per share, minus the
exercise price.
(2) 2,000,000 options and 2,000,000 stock appreciation rights will become
exercisable at such time as the Company has achieved two consecutive
quarters of profitability and has reported such financial results on
quarterly reports filed with the Securities and Exchange Commission on
Form 10-Q or Form 10-K, if applicable (the "Date of Vesting"). An
additional 2,000,000 options and 2,000,000 stock appreciation rights will
become exercisable on the first anniversary of the Date of Vesting,
provided that Mr. Kusumoto was the Chief Executive Officer of the Company
at such time.
</FN>
</TABLE>
Compensation of Directors
Directors of the Company do not receive any compensation for their
services as Directors. All Directors are reimbursed for expenses incurred in
connection with attending Board and committee meetings.
Each nonemployee Director of the Company is entitled to participate in
the Company's 1994 Director Stock Option Plan (the "Director Option Plan"). The
Board of Directors and the shareholders have authorized a total of 150,000
shares of Common Stock for issuance under the Director Option Plan. The Director
Option Plan provides for the grant of nonstatutory options to nonemployee
Directors of the Company. The Director Option Plan is designed to work
automatically and not to require administration; however, to the extent
administration is necessary, it will be provided by the Board of Directors.
The Director Option Plan provides that each eligible Director is granted an
option to purchase 1,000 shares of Common Stock for each Board meeting attended
in person. Options granted under the Director Option Plan have a term of five
years unless terminated sooner upon termination of the optionee's status as a
Director or otherwise pursuant to the Director Option Plan. No option granted
under the Director Option Plan is transferable by the optionee other than by
will or the laws of descent and distribution, and each option is exercisable,
during
7
<PAGE>
the lifetime of the optionee, only by such optionee. The Director Option Plan
provides that the options become exercisable in full immediately upon the grant
of such options.
The exercise price of all stock options granted under the Director
Option Plan is equal to the fair market value of a share of the Company's Common
Stock on the date of grant of the option. Fair Market Value is defined under the
Director Option Plan as the average of the bid and asked prices of the Common
Stock in the over-the-counter market on the date of grant, as reported by the
National Association of Securities Dealers Automated Quotation System.
In the event of a merger of the Company with or into another
corporation or a sale of substantially all of the Company's assets, the Director
Option Plan requires that each outstanding option be assumed or an equivalent
option substituted by the successor corporation. The Director Option Plan will
terminate in December 2004. The Board of Directors may amend or terminate the
Director Option Plan; provided, however, that no such action may adversely
affect any outstanding options, and the provisions of the Director Option Plan
affecting the grant and terms of options granted thereunder may not be amended
more than once in any six-month period. Executive officers of the Company are
not eligible to participate in the Director Option Plan.
As of November 18, 1997, 20,000 options had been granted and remained
outstanding under the Director Option Plan.
Employment Agreements
Carl Perry, Chairman of the Board and Chief Executive Officer, had an
employment agreement pursuant to which he served as an Executive Vice President
of the Company, which employment agreement ended on December 31, 1996. Mr. Perry
continues as an "at will" employee with the Company.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee currently consists of Dr. Currie, as
Chairman, and Messrs. Miller and Ishag, each of whom served as members of the
Compensation Committee during all of fiscal 1997.
8
<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and Management
<TABLE>
The following table sets forth certain information regarding beneficial
ownership of the Company's stock as of October 31, 1997, (i) by each person (or
group of affiliated persons) who is known by the Company to own beneficially
more than 5% of each class of the Company's stock, (ii) by each of the Company's
Directors, (iii) by each of the Company's Named Executive Officers listed in the
Summary Compensation Table above, and (v) by the Company's Directors and
executive officers as a group. Except as indicated in the footnotes to this
table and subject to applicable community property laws, the persons named in
the table, based on information provided by such persons, have sole voting and
investment power with respect to all shares of stock beneficially owned by them.
--------------------------------------------------------------------------------------------------------------------------
<CAPTION>
5% Shareholders, Directors, Officers Common Shares Percentage of Common Shares Voting
and Directors and Officers as a Group Beneficially Owned (1) Beneficially Owned (2) Percentage (3)
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Itochu Corporation 51,789,122 (4) 31.29% 29.08%
2-5-1, Kita-Aoyama 2-chome,
Minato-ku, Tokyo
107-77, Japan
--------------------------------------------------------------------------------------------------------------------------
Gerlach & Co. 10,731,507 7.10% 6.55%
c/o Citibank N.A.
111 Wall Street, 8th Floor
New York, NY 10043
--------------------------------------------------------------------------------------------------------------------------
Citibank N.A. 43,508,314 28.77% 26.57%
111 Wall Street, 8th Floor
New York, NY 10043
--------------------------------------------------------------------------------------------------------------------------
Fontal International Ltd. 13,499,999(5) 8.20% 7.62%
9 Quai des Bergues
Geneva, Switzerland
--------------------------------------------------------------------------------------------------------------------------
Hyundai Motor Company 8,400,000 5.56% 5.13%
140-2 Kye-Dong, Chongro-Ku
Seoul, 110-793 Korea
--------------------------------------------------------------------------------------------------------------------------
Hyundai Electronics Industries 3,600,000 2.38% 2.20%
San 136-1, Ami-ri, Bubal-eub, Ichon-si
Kyoungki-do, 467-701 Korea
--------------------------------------------------------------------------------------------------------------------------
Roy Y. Kusumoto 2,002,000 (6) 1.31% 1.21%
--------------------------------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
<TABLE>
--------------------------------------------------------------------------------------------------------------------------
<CAPTION>
5% Shareholders, Directors, Officers Common Shares Percentage of Common Shares Voting
and Directors and Officers as a Group Beneficially Owned (1) Beneficially Owned (2) Percentage (3)
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
James S. Miller 111,459 (7) * *
--------------------------------------------------------------------------------------------------------------------------
Carl D. Perry 912,500 (8) * *
--------------------------------------------------------------------------------------------------------------------------
Malcolm R. Currie 3,000 (9) * *
--------------------------------------------------------------------------------------------------------------------------
Edwin O. Riddell 3,000 (10) * *
--------------------------------------------------------------------------------------------------------------------------
Don C. Kang 3,126,667(11) 2.03% 1.87%
--------------------------------------------------------------------------------------------------------------------------
David A. Ishag 1,000 (12) * *
--------------------------------------------------------------------------------------------------------------------------
Donald H. Dreyer 0 * *
--------------------------------------------------------------------------------------------------------------------------
All Directors and executive officers 10,378,626 (13) 6.42% 5.96%
as a group (11 persons)
--------------------------------------------------------------------------------------------------------------------------
<FN>
* Indicates less than 1%
(1) Number of Common Stock shares includes Series A Preferred Stock, Series B
Preferred Stock and Common Stock shares issuable pursuant to stock
options, warrants and other securities convertible into Common Stock
beneficially held by the person or class in question which may be
exercised or converted within 60 days after October 31, 1997.
(2) The percentages are based on the number of shares of Common Stock owned
by the shareholder divided by the sum of: (i) the total Common Stock
outstanding, (ii) the Series A Preferred Stock owned by such shareholder;
(iii) the Series B Preferred Stock owned by such shareholder; and (iv)
Common Stock issuable pursuant to warrants, options and other convertible
securities exercisable or convertible by such shareholder within sixty
(60) days after October 31, 1997.
(3) The percentages are based on the number of shares of Common Stock owned
by the shareholder divided by the sum of: (i) the total Common Stock
outstanding, (ii) the total Series A Preferred Stock outstanding; (iii)
the total Series B Preferred Stock outstanding; and (iv) Common Stock
issuable pursuant to warrants, options and other convertible securities
exercisable or convertible by such shareholder within sixty (60) days
after October 31, 1997. This percentage calculation has been included to
show more accurately the actual voting power of each of the shareholders,
since the calculation takes into account the fact that the outstanding
Series A Preferred Stock and Series B Preferred Stock are entitled to
vote together with the Common Stock as a single class on certain matters
to be voted upon by the shareholders.
(4) Includes 14,333,333 shares of Common Stock issuable upon conversion of
convertible debt in the amount of $4,300,000 plus accrued interest, at a
conversion price of $0.30 per share.
10
<PAGE>
(5) Includes (i) 2,666,667 shares of Common Stock issuable upon conversion of
convertible debt in the amount of $800,000 plus accrued interest, at a
conversion price of $0.30 per share, and (ii) 10,833,332 shares of Common
Stock issuable pursuant to warrants.
(6) Includes (i) 2,000,000 shares of Common Stock issuable pursuant to stock
options exercisable at a price of $0.40 per share; (ii) 1,000 shares of
Common Stock issuable pursuant to stock options exercisable at a price of
$2.97 per share; and (iii) 1,000 shares of Common Stock issuable pursuant
to stock options exercisable at a price of $6.67 per share.
(7) Includes 10,000 shares of Common Stock issuable pursuant to stock
options. Excludes 20,894 shares of Common Stock held in an irrevocable
trust for Mr. Miller's son, as to which Mr. Miller has no voting or
investment power; Mr. Miller disclaims beneficial ownership of such
shares.
(8) Includes 912,000 shares of Common Stock issuable pursuant to stock
options exercisable at a price of $0.30 per share.
(9) Includes 3,000 shares of Common Stock issuable pursuant to stock options.
Dr. Currie has declined acceptance of these options.
(10) Includes 3,000 shares of Common Stock issuable pursuant to stock options.
(11) Includes 3,126,667 shares of Common Stock issuable pursuant to stock
options.
(12) Includes 1,000 shares of Common Stock issuable pursuant to stock options.
(13) Includes 10,257,667 shares of Common Stock issuable pursuant to stock
options exercisable at prices ranging from $0.30 to $6.67 per share.
</FN>
</TABLE>
Item 13. Certain Relationships and Related Transactions
The following are certain transactions entered into between the Company
and its officers, directors and principal shareholders and their affiliates
since August 1, 1996.
Transactions with Secured Creditors and Others:
Gerlach & Co.
As of August 1996, Gerlach & Co., a principal shareholder of the
Company, held $3,000,000 in principal amount of Series S Secured Convertible
Bonds ("Series S Bonds"). The Series S Bonds were convertible at the election of
either Gerlach & Co. or Itochu Corporation ("Itochu") into shares of Common
Stock at a conversion price of $0.30 per share and had a maturity date of March
1997. In March 1997, the Series S Bonds and $219,000 of accrued interest were
converted into 10,732,000 shares of common stock at $0.30 per share, at the
election of Itochu.
Itochu Corporation
As of August 1996, there was $3,000,000 of debt outstanding to Itochu,
a principal shareholder of the Company, pursuant to a Supplemental Loan
Agreement. The debt is convertible at the election of Itochu at any
11
<PAGE>
time, or automatically upon the occurrence of certain events, into shares of
Common Stock at a conversion rate of $0.30 per share. The debt is secured by all
of the assets of the Company. The maturity date of the debt was April 1997. In
April 1997, the maturity date was extended to April 1998.
During the period from October 1996 to November 1996, the Company
borrowed $472,404 from Itochu under several short term convertible promissory
notes. During this same period, convertible promissory notes in the amount of
$322,404 were repaid, leaving convertible promissory notes payable in the amount
of $150,000.
During the period from December 1996 to February 1997, the Company
borrowed $1,300,000 from Itochu under a Supplemental Loan Agreement the terms of
which include the interest rate of 10% per annum, is due in December 1997 and is
convertible into the Common Stock of the Company at $0.30 per share.
Fontal International, Ltd. ("Fontal")
In May 1996, the Company issued 8,333,332 warrants to Fontal in
exchange for services performed. The warrants are exercisable at $0.30 per share
for an equal number of shares of Common Stock, and originally were to expire on
May 1, 1997; however, the Company has agreed to extend the term of these
warrants. If the market value of the Common Stock of the Company is equal to or
greater than $0.60 per share on the date of exercise, and if the average trading
volume was in excess of 100,000 shares per day for the preceding 20 trading
days, the warrants may be exercised without payment of cash. The warrants may
not be exercised in the United States, and the stock purchased may not be
delivered to the United States unless first registered under the Securities Act
or receive an available exemption from registration. In October 1996, an
additional 2,000,000 cashless warrants, exercisable at $0.30 per share were
issued to Fontal pursuant to a finders fee relating to the acquisition of
Systronix Corporation.
In August 1996, the Company issued 1,000,000 unregistered shares of
Common Stock to Fontal at a price of $0.30 per share, pursuant to a Regulation S
Subscription Agreement, and received proceeds of $300,000. In October 1996, the
Company issued 1,666,667 unregistered shares of Common Stock to Fontal at a
price of $0.30 per share, also pursuant to a Regulation S Subscription
Agreement. The shares were issued to convert a $500,000 convertible note assumed
as part of the acquisition of Systronix Corporation. The Company also assumed a
$300,000 promissory note as part of this acquisition.
During the period from August 1996 to April 1997, $1,350,000 was
received from Fontal for the issuance of unsecured convertible bonds. In
connection with the acquisition of Systronix Corporation in October 1996, the
Company assumed $800,000 of unsecured convertible debt to Fontal. During 1997,
$300,000 in equity was reclassified as unsecured convertible debt to Fontal.
Repayments were made to Fontal on the convertible bonds in the amount of
$1,150,000, and $500,000 of the assumed debt was converted to common stock at
the rate of $0.30 per share. The outstanding amount of unsecured convertible
bonds held by Fontal at the end of 1997 was $800,000.
The Company believes that the transactions described above were made on
terms no less favorable to the Company than could have been obtained from
unaffiliated third parties. The above referenced transactions were approved by a
majority of the disinterested members of the Board of Directors. All future
transactions between the Company and its officers directors, principal
shareholders and affiliates will be approved by a majority of the Board of
Directors, including, where appropriate, a majority of the disinterested,
nonemployee directors on the Board of Directors, and, where appropriate, will be
on terms no less favorable to the Company than could be obtained from
unaffiliated third parties.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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, on November 18, 1997.
U.S. ELECTRICAR, INC.
By: /s/ Carl D. Perry
----------------------------------
Carl D. Perry, Chief Executive Officer and Chairman of the Board
By: /s/ Barrett R. Woodruff
----------------------------------
Barrett R. Woodruff, Chief Financial Officer and
Principal Accounting Officer
<TABLE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the registrant and
in the capacities and on the date indicated.
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Carl D.Perry Chief Executive Officer and Chairman November 21, 1997
- ------------------------ of the Board (Principal Executive -----------------
Carl D. Perry Officer)
/s/ Don C. Kang President, Chief Operating Officer November 21, 1997
- ------------------------ and Director -----------------
Don C. Kang
/s/ James S. Miller Director November 21, 1997
- ------------------------ -----------------
James S. Miller
Director
- ------------------------ -----------------
Malcolm R. Currie, Ph.D.
Director
- ------------------------ -----------------
Edwin O. Riddell
/s/ David A. Ishag Director November 21, 1997
- ------------------------ -----------------
David A. Ishag
/s/ Donald H. Dreyer Director November 21, 1997
- ------------------------ -----------------
Donald H. Dreyer
</TABLE>
13
