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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Year Ended March 31, 2000
Commission file number 1-10869
UNIQUE MOBILITY, INC.
(Exact name of registrant as specified in its charter)
Colorado 84-0579156
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
425 Corporate Circle, Golden, Colorado 80401
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 278-2002
Securities registered pursuant to Section 12(b) of the Act:
Common stock, $.01 par value
Name of each exchange on which registered:
American Stock Exchange
Pacific Stock Exchange
Chicago Stock Exchange
Frankfurt Stock Exchange
Berlin Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
Common stock, $.01 par value
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 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. X
The aggregate market value of the voting stock held by nonaffiliates of the
registrant (16,325,359 shares) computed by reference to the closing price of
such stock on the American Stock Exchange, as of June 26, 2000:
$137,786,030
The number of shares outstanding (including shares held by affiliates) of each
of the registrant's classes of common stock, as of June 26, 2000:
17,233,345 shares of the
registrant's common stock,
$.01 par value.
DOCUMENTS INCORPORATED BY REFERENCE
In Part III certain information is incorporated by reference from the Company's
definitive Proxy Statement for the August 15, 2000 Annual Meeting of
Shareholders.
ITEM 1. BUSINESS
This Report may contain forward-looking statements that involve risks and
uncertainties. These statements may differ materially from actual future events
or results. Readers are referred to the Risk Factors section of the Registration
Statement on Form S-3 (File No. 333-78525) filed by the Company with the SEC,
which identifies important risk factors that could cause actual results to
differ from those contained in the forward-looking statements, including the
Company's ability to obtain additional financing, the Company's reliance on
major customers and suppliers and the possibility that product liability
insurance may become unavailable. These forward-looking statements represent the
Company's judgment as of the date of this Report. The Company disclaims,
however, any intent or obligation to update these forward-looking statements.
General
Unique Mobility, Inc. ("Unique" or the "Company") was incorporated in 1967. The
Company's $0.01 par value common stock trades on the American, Chicago, Pacific,
Frankfurt and Berlin stock exchanges under the symbol "UQM".
Historically, the Company's revenue has been derived from contract research and
development services performed for strategic partners and clients and the
limited production and sale of power dense, energy efficient propulsion systems.
Sponsored research and development activities have supplemented internally
funded product development programs.
Over the last two years the Company's operations have expanded to encompass
three business segments, technology, mechanical products and electronic
products. The Company has three principal operating units: Unique Mobility,
Inc., located in Golden, Colorado, which operates as the corporate headquarters
and engineering and product development center; wholly owned subsidiary Unique
Power Products, Inc. ("Unique Power"), located in Frederick, Colorado, which
manufactures permanent magnet electric motors, precision gears and gear
assemblies; and wholly owned subsidiary Franklin Manufacturing Company
("Franklin"), located in St Charles, Missouri which manufactures printed circuit
board assemblies, cable harness assemblies, complete electronic boxes and the
assembly of complete end products.
The Company's objective is to leverage its technology base and name recognition
to develop, manufacture and market products in a number of high potential niche
markets in the near term, and automotive mass markets in the longer term.
Fundamental to this strategy is maintaining high quality and competitive
manufacturing capability for products developed by the Company.
The Company also holds minority ownership positions in Taiwan UQM Electric Co.,
Ltd. ("Taiwan UQM"), EV Global Motors Company ("EV Global"), and Windemere Eco
Development Limited ("WED").
Taiwan UQM is a joint venture with Kwang Yang Motor Company, Ltd. ("KYMCO") and
Turn-Luckily Technology Co., Ltd. Taiwan UQM, located in Taipei, Taiwan, is a
licensee of the Company and manufacturer of starter motors and alternators for
gasoline scooters and electric propulsion systems for an all electric scooter.
The Company holds a 38.25 percent ownership interest in Taiwan UQM. During the
current fiscal year the Company wrote down the carrying value of this investment
to zero. See also footnote 6 to the consolidated financial statements in "Item 8
Financial Statements" below.
During the fiscal year ended March 31, 2000 the Company acquired a 33.6 percent
ownership interest in Unique Mobility Europa Gmbh ("Unique Europa"), a joint
venture with EV Global, Energy Conversion Devices and Haco Trading, Ltd. The
Company's ownership interest in Unique Europa, located in Mittweida, Germany,
was acquired for DM 50,000 (US $9,573) and a contribution to surplus of 208,333
newly issued shares of Unique common stock with a fair market value of
$1,149,894. On October 8, 1999 the Company entered into an agreement with the
shareholders of Unique Europa providing for the reduction of its ownership
interest in Unique Europa to 5.9 percent in exchange for a funding commitment
from one of the shareholders in the amount of DM 3 million (US $1,630,200). As a
result of this agreement the Company wrote down its investment to zero at
September 30, 1999. Subsequent to year end the Company sold its remaining
ownership and all other rights relating to its interest in Unique Europa for
$400,000 in cash. No gain or loss resulted from this transaction.
The Company owns 400,000 shares of EV Global common stock. EV Global, based in
Los Angeles, is a developer and distributor of electric bicycles. In June, 1999,
the Company acquired an approximately 9.5 percent participation in a $5.225
million convertible note receivable from WED, held by EV Global, for $500,000 in
cash. WED is an environmentally sensitive development of Windemere Island in the
Bahamas. The entire loan is convertible into approximately 50.4 percent of the
total outstanding equity of WED, of which the Company would receive an
approximately 4.8 percent ownership interest. At September 30, 1999 the Company
wrote down the carrying value of EV Global and WED to zero.
Technology Segment
The technology segment of the Company encompasses the operations of the
Engineering and Product Development Center and the administrative and management
functions performed by the corporate headquarters staff and senior executives.
The Company's Engineering and Product Development Center occupies a 40,000
square foot building located in Golden, Colorado equipped with research and
development laboratories, prototype build and test facilities for electric
motors, electronic controls, software, and vehicle integration activities. The
technology segment conducts sponsored and internally-funded engineering
activities directed toward the development of new products and the engineering
of motor and electronic controls to meet the requirements of our customer's
specific product application and is the source of engineering services for both
the mechanical and electronic product segments.
During the past year a number of new and important projects were executed at the
Company's Engineering and Product Development Center including:
o A Department of Energy funded project to design and build an advanced
electric traction system capable of propelling a mid-sized hybrid electric
or fuel cell electric passenger vehicle. The two year, $750,000 project, is
focused on the development and initial prototype product build of an
innovative propulsion system that integrates an energy efficient motor,
gears and differential into a complete system that can deliver up to 100
horsepower and 1,100 foot pounds of torque to the wheels of the automobile.
o A two year, $600,000 project funded by the Department of Defense to design
and build a generator system for the Marine Corps' advanced amphibious
assault vehicle.
o The design of a UQM electric motor/generator for General Motor's Precept
Technology Demonstration vehicle which was introduced at the 2000 North
American International Auto Show in Detroit. The GM Precept is a fully
functional hybrid electric five passenger family sedan designed to achieve
80 miles per gallon. The UQM motor generator product is part of the rear
drive system of the car, operating as an input to the transmission along
with the engine. The system performs numerous critical functions, including
engine starting, engine power assist, regenerative braking to capture
vehicle braking energy, battery charging and part-time driving of the
vehicle accessories.
o Design and delivery of fifty fuel cell UQM compressor drive motors to a
tier-one automotive supplier. The compressor motors are liquid cooled and
were optimized for the specialized operating characteristics of fuel cells.
Substantially all fuel cell developers require a high efficiency, small and
lightweight motor to drive the air transfer system to facilitate the
chemical reaction inside the fuel cell that leads to the production of
energy.
o Design and delivery of high efficiency UQM electronic motor controls for
use in a tier-one automotive suppliers electrically powered air
conditioning system currently under development. The project is part of the
automotive industry's initiative to replace the current 12-volt passenger
automobile electrical system with a higher capacity 42-volt system to
increase electric power availability within automobiles for such features
as power windows, power seats and seat heaters, brakes, music and phone
systems and global positioning devices.
o Design and introduction of a controller area network ("CAN") option on the
Company's product line of motors and controllers. CAN is a cost effective
two-wire serial communication system for real-time control applications
which can replace expensive, heavy and cumbersome wiring looms. It enables
the graphical visualization of the content of information sent to and
between components, as well as, the control, monitoring and updating of
components from remote locations over the internet if the components are
connected to a computer network.
o Application of the Company's proprietary electric motor and control
technology to one of a multinational equipment makers products under an
exclusive product development. Under the terms of an initial three year
agreement, Unique will apply its proprietary technology to the customer's
product on an exclusive basis during which time the companies expect to
complete a commercial supply agreement to ensure continued exclusivity for
the developed product in the markets where the product is sold.
These product developments represent the continuation of our strategy to apply
our proprietary technology to enable our customer's products to achieve a
performance advantage in the existing commercial markets they serve while we
continue to pursue the developing markets for advanced propulsion systems for
automobiles, trucks and buses and the distributed power generation market.
During fiscal 2000, the technology segment generated revenue of $2,426,152
consisting of $1,702,937 of contract services revenue and $723,215 from the sale
of low volume motor and control products. Operating losses for the technology
segment amounted to $6,293,807, including the effect of the write-downs
previously mentioned, compared to an operating loss of $2,646,442 last year.
Excluding the writedowns, the technology segment had a net loss of $2,189,179 an
improvement of $457,263 over last years net loss. The costs associated with the
operation of the corporate headquarters, including the salaries of the executive
officers and other corporate staff, general corporate overhead costs and the
earnings or losses of minority owned affiliates are absorbed by the technology
segment and are not allocated to the mechanical products or electronic products
segments.
Mechanical Products
The mechanical products segment of the Company encompasses the operations of the
Company's wholly-owned subsidiary, Unique Power Products, Inc. Unique Power
Products occupies a 25,000 square foot manufacturing plant located in Frederick,
Colorado which houses the Company's gear and motor manufacturing operations.
Gear manufacturing operations consist of the precision grinding of both
commercial and aerospace grade gears and the manufacture of complete gear
assemblies. Motor manufacturing operations consist of the high volume
manufacture of the Company's proprietary permanent magnet motors.
During fiscal 2000, the mechanical products segment generated revenue of
$4,115,557 a 17 percent increase over the prior years revenue of $3,532,871.
Operating losses for the segment amounted to $686,423 a 43 percent improvement
over the segment's prior year operating loss of $1,205,556. EBITDA for the
fiscal year ended March 31, 2000 was $503,414 compared to $(174,155) last year.
Contributing to the growth in revenue and improved financial performance was the
introduction by Invacare Corporation of its Action Arrow Storm Series power
wheelchairs with the Gearless Brushless GB motor, manufactured by Unique Power.
Also contributing to fiscal 2000 financial performance was the production launch
of a smaller model of the complex welded clutch gear assemblies we currently
supply to Funk Manufacturing Company, a wholly-owned subsidiary of Deere & Co.
Electronic Products Segment
The electronic products segment of the company encompasses the operations of the
Company's wholly-owned subsidiary Franklin Manufacturing Company and includes
the manufacture of thru-hole and surface mount printed circuit board assemblies,
wire harness assemblies, value-added component assemblies incorporating either
printed circuit board assemblies, wire harness assemblies or both, and complete
turn-key electronic product builds. In addition, the company is a wholesale
distributor of over 70 lines of passive electronic components. Franklin
Manufacturing Company conducts its operations from a 31,000 square foot
manufacturing plant located in St. Charles, Missouri. During fiscal 2000, the
electronic products segment generated revenue of $14,056,151, a 39 percent
increase over the prior year's eleven month revenue from the date of acquisition
of $10,129,729. Operating earnings for the segment improved over five-fold to
$508,423 from $97,928 last year. EBITDA for the fiscal year ended March 31, 2000
nearly doubled to $1,507,998 compared to $763,117 last year. Key to the growth
in revenue and profitability were two new customer orders. The first, a $1.1
million order for the production of wire harnesses and printed circuit board
assemblies for the North American unit of an international maker of elevators
and other people moving products. The second, an order encompassing the turn-key
production of the TRG Pro handheld computer for a licensee of Palm Computing.
Technology
The Company's technology base includes a number of proprietary technologies and
patents relating to brushless permanent magnet motors, generators and electronic
controls, together with software code and computer area network design tools
utilized to manage individual components and the flow of energy between
components in a system. During fiscal 2000 the Company received an additional
patent covering the packaging of an electromechanical brake inside a motor. A
patent application on a high accuracy method of detecting motor rotor position
using low cost electronic parts filed last year remains pending.
Attributes of the Company's permanent magnet motor technology include high
operating efficiencies (>90%), packageability (small and lightweight) and
two-way operation as either a motor or generator. High pole count
configurations, together with a relatively large air-gap dimension, creates a
higher torque, lower speed motor than possible with more conventional
architectures. Typically, the Company's motors feature high copper utilization
(which minimizes energy loss); hollow construction (for the interior packaging
of other components such as gears and electromechanical brakes); good heat
rejection; lower iron content; and low mechanical losses.
Attributes of the Company's microprocessor-based controllers include four
quadrant control (forward/reverse and power in/power out), reduced switching
losses (which minimizes energy loss) and intelligent control. Patented circuitry
and software (Phase Advance Control) dynamically adjusts the phase angle of
current into the motor windings to increase base speed by a factor of three to
four times.
Income from sponsored development projects is recorded as contract services
revenue and the associated development costs are shown as cost of contract
services in the Company's financial statements. Internally-funded research and
development expenditures amounted to $378,954 for the fiscal year ended March
31, 2000, a decline of 43.3 percent from the prior year level of $667,989. The
decline is attributable to lower levels of manufacturing engineering activities
and cost-share type sponsored development programs.
In recent years, the Company has focused the major portion of its research and
development activities on the development of commercial products, and production
engineering activities to lower the cost of manufacture of such products as
opposed to basic research in the field although, the Company has continued to
advance the capability and performance of its proprietary motor and controls
technology portfolio. Management believes that the Company's future growth is
dependent, in part, on the continued advancement of its core technology, the
extension of its technological capabilities and its ability to develop
additional products. Accordingly, the Company expects to continue to invest in
research and development at approximately the same level as in the current year.
Competition
All of the markets in which the Company operates are highly competitive. The
markets served by the technology segment are additionally characterized by rapid
changes due to technological advances that can render existing technologies and
products obsolete.
The technology segment has developed advanced electric propulsion systems and
components which it hopes to market to vehicle OEM's throughout the world for
use in electric, hybrid electric and fuel cell electric vehicles. At present,
the market for such systems is not significant, although various legislative
mandates and incentives are expected to accelerate the development of a market
for vehicles propelled by such systems. There are numerous companies developing
products that do or soon will compete with the Company's drive systems. Some of
these companies possess significantly greater financial, personnel and other
resources than the Company, including established supply arrangements and volume
manufacturing operations.
The Company believes its principal competitors include Hitachi, Matsushita,
Siemens, Delphi, EcoStar and Visteon.
The mechanical products segment competes primarily in the automotive, heavy
equipment, aerospace and medical products industries. Each of these industries
is extremely competitive. The Company will face substantial competition on a
continuing basis from numerous competitors, many of whom possess longer
operating histories, significantly greater financial resources, marketing,
distribution and manufacturing capability. The Company believes its principal
competitors include Advanced DC, Owosso Corporation, Emerson Electric, General
Electric, Rockwell International, Baldor, ABB, Fairfield Manufacturing,
Precision Gear and Fairlane Gear.
The electronic products segment competes primarily in the automotive,
telecommunications, medical, computer and industrial markets. Each of these
markets is extremely competitive. The Company will face substantial competition
on a continuing basis from numerous competitors, many of whom possess longer
operating histories, significantly greater financial resources, marketing,
distribution and manufacturing capability. The Company believes its principal
competitors include Jabil Circuit, Plexus, EFTC Corporation, Flextronics
International, Solestica Corporation and Baldwin.
Patents and Trademarks
The Company holds a motor patent, U.S. Patent No. 5,009,944 issued on April 2,
1991 covering the basic design of its permanent magnet motors and U.S. Patent
5,311,092 issued on May 10, 1994 covering subject matter that was not allowed in
the original U.S. Patent. Of the foreign applications, a patent has been issued
and validated in twelve member countries of the European Patent Office (EPO). In
addition, corresponding patents have been issued in Australia, Brazil, Canada,
China, India, Ireland, Israel, Finland, Japan, South Korea, Mexico, New Zealand,
South Africa and Taiwan.
In April 1992, the Company was issued U.S. Patent No. 5,107,151 covering certain
proprietary aspects of its electronic control circuitry. In August 1990, various
international patent applications corresponding to the U.S. Application were
filed. Patents have been granted in Mexico, Taiwan, India and Israel.
Applications remain pending in Japan and South Korea.
The Company was granted U.S. Patent No. 5,319,844 issued June 14, 1994 covering
the method of constructing the motor as disclosed in U.S. Patent No. 5,004,944.
In March 1991 the Company filed an International Patent Application
corresponding to the U.S. Application; as a result patents have been granted in
Australia, Japan, Russia, and South Korea. Patent applications are pending in a
number of other foreign countries.
The Company was granted U.S. Patent No. 5,382,859 in January, 1995 covering a
novel method of constructing a motor stator. An additional U.S. Patent No.
5,592,731 issued January 14, 1997 covering an additional invention not covered
in the original patent. Patent Applications are pending in a number of foreign
countries.
The Company was granted U.S. Patent No. 5,677,605 on October 14, 1997 which
embodies a low cost method of controlling the drive current to a motor to
achieve operating characteristics ideal for vehicle traction drives. Patent
Applications are pending in a number of foreign countries.
The Company was granted U.S. Patent No. 5,982,063 on November 9, 1999 covering
the packaging of an electro-mechanical brake inside a motor. Patent applications
are pending in a number of foreign countries.
The Company registered the letters "UQM" and a stylized version thereof as its
new trademark in the U.S. Counterpart applications have been filed in 26
countries throughout the world and 24 of those countries have granted
registrations or indicated them to be allowable. The foreign trademark
registrations and applications include major markets where the company is doing
business or establishing business contacts.
The Company uses "POWER PHASE" as a trademark to identify its modular brushless
permanent magnet electric motor drives for electric and hybrid electric vehicles
and has obtained a U.S. Trademark registration. Corresponding applications for
trademark registration have been filed in 11 countries and in the European
community, which has allowed the application. Registrations have been granted in
Mexico and Canada.
The Company's future success depends, in part, on the diligent prosecution of
its issued and pending motor and electronic patents, as well as the filing and
prosecution of patents on future technological advances, if any. There can be no
assurance that the Company will possess the financial resources necessary to
prosecute and maintain existing applications or to pursue additional patents. If
the Company is not able to prosecute and maintain its existing patent
applications, they will lapse. There can be no assurance that the Company's
patents will not be circumvented, invalidated or infringed, or that the Company
will possess the financial resources to enforce its existing patents and patent
applications in the event of an infringement. Further, new technology may be
developed by third parties or may already exist unknown to the Company causing
the Company's proprietary technology to be obsolete.
The Company also intends to rely on the unpatented proprietary know-how it has
developed and now utilizes in its products. There can be no assurance that
others will not independently develop, acquire or obtain access to the Company's
technology. Although the Company protects its proprietary rights by executing
confidentiality agreements with its management, employees and others with access
to the Company's technology, these measures may not be adequate to protect the
Company from disclosure or misappropriation of its proprietary information.
Backlog
The Company's technology segment had unperformed service contracts from
customers which will provide payments to the Company upon completion aggregating
approximately $1,215,495 at May 31, 2000. The technology segment also had an
order backlog for prototype motors and controls of approximately $930,946 at May
31, 2000. All such contracts are subject to amendment, modification or
cancellation. The Company expects to perform all unperformed service contracts
and ship motor and controller backlog products over the next twelve months.
The Company's mechanical products segment had an order backlog of approximately
$3.2 million at May 31, 2000. The Company expects to ship all backlog products
within the next twelve months.
The Company's electronic products segment had an order backlog of approximately
$13.5 million at May 31, 2000. The Company expects to ship all backlog products
within the next twelve months.
Customers and Suppliers
The Company has one significant customer in its electronic products segment,
Tyco International, Ltd., which accounted for revenue of $4,434,454, or
approximately 22 percent of consolidated revenue.
Principal raw materials and components purchased by the Company include iron,
steel, electronic components, magnet material and copper wire. Most of the above
items are available from several suppliers and the Company generally relies on
more than one supplier for each item. Certain components used by the Company are
custom designs and if the Company's current supplier no longer made them
available to the Company, the Company could experience production delays.
U.S. Government Contracts
For the year ended March 31, 2000, $910,770, or approximately 4 percent of the
Company's consolidated revenue was derived from contracts with agencies of the
U.S. Government and from subcontracts with U.S. Government prime contractors.
For the year ended March 31, 1999, $758,853, or approximately 5 percent of
consolidated revenue was derived from contracts with agencies of the U.S.
Government and from subcontracts with U.S. Government prime contractors.
Some of the Company's contracts with the U.S. Government provide for the
reimbursement of costs on a 50 percent cost sharing basis based on not-to-exceed
billing rates negotiated between the Company and the U.S. Government. Other U.S.
Government business is performed under firm fixed price contracts. On
"cost-share" and "firm fixed price" contracts, the Company can incur an actual
loss in the performance thereof if incurred costs exceed the contract amount.
All U.S. Government contracts with the Company are subject to modification or
cancellation at the convenience of the Government.
Employee and Labor Relations
As of May 31, 2000, the Company had 170 full-time employees. The Company has
entered into employment contracts with its executive officers, one of which
expires in April 2000, and the other two in December, 2002. None of the
Company's employees are covered by a collective bargaining agreement. The
Company's management believes that its relationship with its employees has been
generally satisfactory.
In addition to its full-time staff, the Company from time to time engages the
services of outside consultants and contract labor to meet peak workload or
specialized program requirements. The Company does not anticipate any difficulty
in locating additional qualified professional engineers, technicians and
production workers, if so required, to meet expanded research and development or
manufacturing operations.
ITEM 2. PROPERTIES
The Company owns or leases its offices and manufacturing facilities and believes
these facilities to be well maintained, adequately insured and suitable for
their present and intended uses. Information concerning facilities of the
Company as of May 31, 2000, is set forth in the table below:
Ownership or
Square Expiration Date
Location Feet of Lease Use
Golden, Colorado (1) 40,000 September 2002 manufacturing,
laboratories
and offices
Frederick, Colorado 25,000 Own manufacturing
and offices
St. Charles, Missouri 31,000 March 2007 manufacturing,
warehouse and
offices
(1) The Company is a fifty percent member in a limited liability company which
owns this facility.
ITEM 3. LEGAL PROCEEDINGS
There is no material litigation with respect to which the Company is a party.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted for vote by security holders of the Company
during the quarter ended March 31, 2000.
ITEM 5. MARKET PRICE OF COMMON STOCK
The Company's common stock trades on the American, Chicago, Pacific, Frankfurt
and Berlin Stock Exchanges. The high and low closing prices, by fiscal quarter,
as reported by the American Stock Exchange for the last two years are as
follows:
2000 High Low
Fourth Quarter $10.88 $3.69
Third Quarter $ 4.38 $3.50
Second Quarter $ 4.63 $4.06
First Quarter $ 6.44 $4.31
1999 High Low
Fourth Quarter $ 6.13 $4.25
Third Quarter $ 6.19 $4.39
Second Quarter $ 7.25 $4.39
First Quarter $ 8.31 $6.50
On June 26, 2000 the closing price of the Company's common stock, as reported on
the American Stock Exchange, was $8.44 per share and there were 937 holders of
record of the Company's common stock.
The Company has not paid any cash dividends on its common stock since inception
and intends for the foreseeable future to retain any earnings to finance the
growth of its business. Future dividend policy will be determined by the Board
of Directors of the Company based upon consideration of the Company's earnings,
capital needs and other factors then relevant.
ITEM 6. SELECTED FINANCIAL DATA
Unique Mobility, Inc.
Consolidated Selected Financial Data
Year Year Year Five Months
Ended Ended Ended Ended
March 31, March 31, March 31, March 31, Year Ended October 31,
2000 1999 1998 1997 1996 1995
Contract Services
Revenue $ 1,702,937 1,517,960 2,790,496 700,132 1,436,484 4,031,951
Product Sales $ 18,894,923 14,280,458 1,274,236 152,016 611,213 701,700
Operating
Loss $ (5,688,774) (3,144,592)(3,007,599)(1,120,900)(2,744,606) (1,134,338)
Net Loss $ (6,471,807) (3,754,070)(3,266,360)(1,201,085)(2,904,743) (1,330,433)
Net Loss
Per Common Share-
basic and diluted $ (.39) (.24) (.23) (.12) (.26) (.13)
Total Assets $ 24,257,843 27,206,578 19,585,551 12,370,699 8,712,649 7,626,178
Long-Term
Obligations $ 3,422,459 4,396,127 1,029,924 726,218 744,389 807,003
Cash Dividend
Declared Per
Common Share $ -0- -0- -0- -0- -0- -0-
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Financial Condition
Cash and cash equivalents at March 31, 2000 was $2,085,115 and working capital
(the excess of current assets over current liabilities) was $5,672,559 compared
with $1,537,453 and $2,395,261,respectively, at March 31, 1999.
Accounts receivable rose $219,900 to $2,821,894 at March 31, 2000 from
$2,601,994 at March 31, 1999. The increase is primarily attributable to higher
levels of revenue at Franklin.
Costs and estimated earnings on uncompleted contracts increased $155,654 to
$329,111 at March 31, 2000 from the fiscal 1999 year end level of $173,457.
Estimated earnings on contracts in process declined to $180,293 at March 31,
2000 on costs incurred on contracts in process of $645,425 compared to estimated
earnings on contracts in process of $285,804 on costs incurred on contracts in
process of $1,457,955 at March 31, 1999. The decrease is attributable to lower
levels of contracts in process at March 31, 2000.
Inventories rose $332,285 to $3,120,279 at March 31, 2000 from $2,787,994 at
March 31, 1999 reflecting increases in raw material and work in process
inventories associated with higher sales levels for the fiscal year.
Prepaid expenses and other current assets rose nominally from their beginning of
the year levels.
The Company invested $483,716 for the acquisition of property and equipment
during fiscal 2000 compared to $4,399,114 for the prior fiscal year. The
decrease is attributable to higher levels of capital expenditures in the prior
fiscal year arising from investments in manufacturing equipment and the
construction of a manufacturing plant by the mechanical products segment,
investments in manufacturing equipment and tooling by the electronic products
segment, and investments in equipment by the technology segment.
During the second quarter, the Company evaluated its investments in three
long-term investments, Taiwan UQM Electric Co., Ltd., Unique Mobility Europa
GmbH and EV Global Motors Company and their related operations. Based on these
evaluations the Company wrote down these investments to zero (see "Item 8
Financial Statements", notes 6, 7 and 8 to the Consolidated Financial
Statements.)
Patent and trademark costs, net of accumulated amortization, was $731,282 at
March 31, 2000 an increase of $45,087 from the fiscal 1999 year end level. The
increase is primarily attributable to legal and application fees which amounted
to $79,296 and $137,537 in fiscal 2000 and 1999, respectively.
Goodwill, net of accumulated amortization, declined to $5,995,463 at March 31,
2000 from $6,327,841 at March 31, 1999 due to the amortization of this asset
over its 20 year useful life.
Accounts payable declined $864,828 to $1,379,316 at March 31, 2000 from
$2,244,144 at March 31, 1999. The decrease is primarily attributable to lower
amounts due trade vendors.
Other current liabilities decreased $107,036 to $845,462 at March 31, 2000 from
$952,498 at March 31, 1999. The decrease is primarily attributable to the
payment of organization costs on behalf of Unique Europa and deferred
compensation associated with the acquisition of Aerocom, Inc.
Revolving line-of-credit declined $1,100,000 to zero at March 31, 2000
reflecting the application of cash to the reduction of short-term borrowings.
Billings in excess of costs and estimated earnings on uncompleted contracts rose
$10,106 to $79,499 at March 31, 2000 from $69,393 at March 31, 1999 reflecting
payments by customers for certain sponsored development contracts in advance of
the performance of the associated project work.
Long-term debt declined $973,668 to $3,422,459 at March 31, 2000 primarily due
to scheduled principal repayments on the Company's term bank debt during the
fiscal year.
Common stock and additional paid-in capital increased to $171,942 and
$49,382,877 at March 31, 2000, respectively, compared to $162,230 and
$43,412,390 at March 31, 1999. The increases were due to the sale of common
stock in private offerings in the amount of $488,828; the issuance of common
stock for investment in Germany joint venture of $1,149,894; proceeds received
upon the exercise of warrants of $3,776,659; and sales of common stock to
employees, directors and consultants through the Company's benefit plans and
option exercises of $807,480.
Notes receivable from officers decreased to zero at March 31, 2000 from $454,063
at March 31, 1999 reflecting the repayment of stock option loans by officers of
the Company during the fiscal year.
Results of Operations
Operations for the year ended March 31, 2000, resulted in a net loss of
$6,471,807, or $0.39 per share, compared to a net loss of $3,754,070 or $0.24
per share for the year ended March 31, 1999 and a net loss of $3,266,360 or
$0.23 per share for the year ended March 31, 1998.
Operations for the fiscal year ended March 31, 2000 included charges associated
with the write down of the Company's investments in Taiwan UQM, Unique Europa,
EV Global and WED which resulted in a charge to earnings of $4,104,628,
compensation payable to the Company's former CEO of $324,866, and the write-off
of an uncollectible customer account of $254,870. Excluding these items which
totaled $4,684,364 or $0.28 per common share, net loss for the year declined 52
percent to $1,787,443 or $0.11 per common share from the net loss of $3,754,070
or $0.24 per common share for the previous fiscal year and declined $1,478,917
or $0.09 per share from the net loss of $3,266,360 for the fiscal year ended
March 31, 1998. Earnings before interest, taxes, depreciation and amortization
("EBITDA") for the fiscal year before the foregoing charges improved by
$2,406,699 to $816,348 versus EBITDA of $(1,590,351) last year and $(2,624,992)
for the fiscal year ended March 31, 1998. EBITDA for the fiscal year ended March
31, 2000 including the foregoing charges was $(3,868,016) compared to
$(1,590,351) and $(2,624,992) for the comparable fiscal years ended March 31,
1999 and 1998, respectively.
Revenue from contract services increased 12 percent to $1,702,937 during fiscal
2000 compared to $1,517,960 for the year ended March 31, 1999. The increase in
contract services revenue in fiscal 2000 over the fiscal 1999 level is
attributable to increased levels of sponsored development activities and
improved program pricing. Revenue from contract services for fiscal 1999
declined 46 percent to $1,517,960 compared to $2,790,496 for the year ended
March 31, 1998. The decrease in contract services revenue is attributable to the
Company's focus on executing sponsored development programs that results in
commercial production opportunities.
Product sales during fiscal 2000 increased 32 percent to $18,894,923 compared to
$14,280,458 for the year ended March 31, 1999. The increase in the current
fiscal year over last fiscal year is due, to an expanded customer base at
Franklin and improved order volume from existing customers at Unique Power.
Product sales during fiscal 1999 rose eleven fold to $14,280,458 compared to
$1,274,236 for the year ended March 31, 1998. The increase in fiscal 1999
product sales over the comparable fiscal 1998 amount is attributable to the
acquisition of Aerocom Industries, Inc. and Franklin and internal revenue growth
at these entities subsequent to their acquisition.
Consolidated gross profit margins for fiscal 2000 increased to 15.4 percent
compared to a margin of 8.2 and 11.0 percent for years ended March 31, 1999 and
1998, respectively. Gross profit on contract services was 23.7 percent for
fiscal 2000 compared to 3.0 and 5.6 percent for fiscal 1999 and fiscal 1998,
respectively. The improvement in contract services margins for fiscal 2000
versus fiscal 1999 is attributable to reduced levels of cost overruns on
development programs. The decrease in contract services margins for fiscal 1999
versus fiscal 1998 is attributable to project cost overruns and lower average
billing rates. Gross profit margins on product sales were 14.6 percent compared
to 8.7 and 23.1 percent in fiscal 1999 and 1998, respectively. The increase in
margins on product sales in fiscal 2000 versus fiscal 1999 is primarily
attributable to higher levels of revenue resulting in improved absorption of
overhead costs. The decrease in product sales margins in fiscal 1999 versus
fiscal 1998 is primarily attributable to higher levels of depreciation charges
on manufacturing equipment arising from the acquisition of Aerocom and Franklin
which are charged to cost of product sales. Depreciation charged to cost of
product sales amounted to $1,435,630, $1,117,397, and $96,444 in fiscal 2000,
1999 and 1998, respectively.
Research and development expenditures in fiscal 2000 declined to $378,954
compared to $667,989 and $902,407 for fiscal 1999 and 1998, respectively. The
decrease in fiscal 2000 versus fiscal 1999 is generally attributable to lower
levels of internally-funded development activities. The decrease in fiscal 1999
versus fiscal 1998 was attributable to declining levels of development
expenditures on the product launch of wheelchair motors for Invacare
Corporation.
General and administrative expense for fiscal 2000 was $4,036,732 compared to
$3,461,161 and $2,121,340 for fiscal 1999 and 1998, respectively. The increase
in general and administrative expenses in fiscal 2000 versus fiscal 1999 is due
to the accrual of compensation payable to the Company's former CEO under the
terms of his employment agreement and the write-off of an uncollectible account
receivable from a customer. The increase in fiscal 1999 expenditures over fiscal
1998 is generally attributable to the consolidation of additional costs upon
completion of the acquisition of Franklin.
Write-down of investments for the fiscal year ended March 31, 2000 represents
charges resulting from the Company's impairment of its investment in EV Global,
Unique Europa, Taiwan UQM and a note receivable from WED. See also "Financial
Condition" above and "Item 8 Financial Statements" notes 6, 7, and 8 to the
consolidated financial statements below.
Interest income for fiscal 2000 declined to $59,369 compared to $111,365 and
$191,186 in fiscal 1999 and 1998, respectively. The decrease in fiscal 2000
versus fiscal 1999 and fiscal 1999 versus fiscal 1998 is attributable to lower
levels of cash and cash equivalents throughout each fiscal year as compared to
the prior year.
Interest expense rose to $483,298 during fiscal 2000 compared to $338,396 and
$96,073 for fiscal 1999 and 1998, respectively. The increase in fiscal 2000
versus fiscal 1999 is attributable to higher levels of borrowings throughout
fiscal 2000 on the Company's lines-of-credit. The increase in fiscal 1999 versus
fiscal 1998 is attributable to the consolidation of Franklin and Aerocom
subsequent to fiscal 1998 and higher levels of term debt at Unique Power
Products and Franklin arising from significant capital expenditures at each unit
for facility and equipment.
Equity in loss of Taiwan joint venture declined to $186,538 for the year ended
March 31, 2000 compared to $417,801 and $246,648 for the years ended March 31,
1999 and 1998, respectively. The decrease for fiscal 2000 versus fiscal 1999 is
due to the Company's write-down of its investment in Taiwan UQM at September 30,
1999 at which time it ceased recording its pro-rata shares of the operating
losses of Taiwan UQM. The increase in fiscal 1999 versus fiscal 1998 is due to
expanded staffing and operations at Taiwan UQM.
Equity in loss of Germany joint venture was $93,632 for the year ended March 31,
2000. The increase is attributable to the Company's recording of its
proportionate share of losses incurred by Unique Europa prior to the write-down
in its investment in Unique Europa at September 30, 1999.
Liquidity and Capital Resources
The Company's cash balances and liquidity throughout the fiscal year ended March
31, 2000 were adequate to meet operating needs. For the year ended March 31,
2000 net cash used by operations was $1,744,746 compared to $2,334,761 for the
comparable prior year. The improvement is primarily attributable to reduced
levels of cash used to fund operating losses. Cash used by investing activities
for the year ended March 31, 2000 amounted to $1,015,393 compared to $8,385,291
for the prior fiscal year. The decrease is attributable to the acquisition of
Franklin Manufacturing Company, the construction of a manufacturing plant in
Frederick, Colorado and related equipment purchases during the prior fiscal
year. The Company's cash requirements throughout the period were funded
primarily through the sale of common stock to investors, cash received upon the
exercise of outstanding common stock warrants and options, and borrowings on
available bank facilities.
During the second quarter the Company wrote-down its investments in EV Global
and its related investment in WED, Unique Europa and Taiwan UQM as a result of
its evaluation of each investment's potential to achieve profitable operations
over the near term and the Company's ability to recover the carrying value of
its investment. Subsequent to the end of the fiscal year the Company sold its
ownership and all other rights relating to its interest in Unique Europa for
$400,000 in cash. No gain or loss resulted from the Company's sale of its
interest in Unique Europa. The Company has no future funding obligations to
either EV Global or WED. Pursuant to the terms of the Joint Venture Agreement
governing the operations of Taiwan UQM upon the unanimous vote of the directors
of Taiwan UQM the shareholders of Taiwan UQM may be obligated to contribute
additional capital. The Company holds two seats on the board of directors of
Taiwan UQM and therefore has the ability to restrict or eliminate future capital
calls by Taiwan UQM. Although the Company cannot be required to fund future
capital calls by Taiwan UQM, it could suffer a dilution of its ownership
interest in the event of the sale of additional equity by Taiwan UQM to others.
Unique Power has a line-of-credit facility with a commercial bank in the amount
of $750,000 which is scheduled for renewal in October 2000. At March 31, 2000 no
amount was drawn against this facility. All financing of Unique Power has been
unconditionally guaranteed by Unique as the parent entity.
Franklin has a line-of-credit with a commercial bank in the amount of $2.5
million which is scheduled for renewal in August 2000. At March 31, 2000 no
amount was drawn against this facility. All financing of Franklin has been
unconditionally guaranteed by Unique as the parent entity.
The Company believes that its existing cash balances and existing bank
lines-of-credit are sufficient to meet its operating capital requirements for at
least the next twelve months, exclusive of acquisition financing requirements.
For the longer-term, the Company expects to continue its strategy of growing its
business through expanding its product line of permanent magnet motors and
controllers, seeking strategic alliances to accelerate the commercialization of
its technology and pursuing synergistic and accretive acquisitions. The Company
expects to finance its future growth from existing cash resources, cash flow
from operations, if any, and through the issuance of equity or debt securities
or a combination thereof. There can, however, be no assurance that such
financing or capital will be available on terms acceptable to the Company. In
the event financing or capital for future growth as envisioned under the
Company's strategy is not available, the Company will modify its strategy to
operate on existing cash balances, cash flow from operations, and available bank
facilities.
Quantitative and Qualitative Disclosures about Market Risk
Market risk is the potential loss arising from adverse changes in market rates
and prices, such as foreign currency exchange and interest rates. The Company
does not use financial instruments to any degree to manage these risks and does
not hold or issue financial instruments for trading purposes. All of the
Company's product sales, and related receivables are payable in U.S. dollars.
The Company is subject to interest rate risk on its bank lines-of-credit which
have variable interest rates, however, no amounts were outstanding on these
lines at March 31, 2000. Interest rates on long-term debt are fixed and
approximate current market rates as of March 31, 2000.
ITEM 8. Financial Statements
Independent Auditors' Report
The Board of Directors
Unique Mobility, Inc.:
We have audited the accompanying consolidated balance sheets of Unique Mobility,
Inc. and subsidiaries as of March 31, 2000 and 1999, and the related
consolidated statements of operations, stockholders' equity and comprehensive
income (loss), and cash flows for each of the years in the three-year period
ended March 31, 2000. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits. We did not audit the
financial statements of Taiwan UQM Electric Co., Ltd., (a 38.25 percent owned
investee company). The Company's investment at March 31, 1999 in Taiwan UQM
Electric Co., Ltd. was $1,595,432, and for the years ended March 31, 1999 and
1998 the Company recognized equity in the losses of Taiwan UQM Electric Co.,
Ltd. of $417,801 and $246,648, respectively. The financial statements of Taiwan
UQM Electric Co., Ltd. were audited by other auditors whose report has been
furnished to us, and our opinion, insofar as it relates to the amounts included
for Taiwan UQM Electric Co., Ltd. for the years ended March 31, 1999 and 1998 is
based solely on the report of the other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, based on our audits and the report of the other auditors, the
consolidated financial statements referred to above present fairly, in all
material respects, the financial position of Unique Mobility, Inc. and
subsidiaries as of March 31, 2000 and 1999, and the results of their operations
and their cash flows for each of the years in the three-year period ended March
31, 2000, in conformity with generally accepted accounting principles.
KPMG LLP
Denver, Colorado
May 8, 2000
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Consolidated Balance Sheets
March 31, March 31,
Assets 2000 1999
Current assets:
Cash and cash equivalents $ 2,085,115 1,537,453
Accounts receivable (note 15) 2,821,894 2,601,994
Costs and estimated earnings in excess
of billings on uncompleted contracts
(note 3) 329,111 173,457
Inventories (note 4) 3,120,279 2,787,994
Prepaid expenses 192,492 248,441
Other 400,068 340,658
Total current assets 8,948,959 7,689,997
Property and equipment, at cost:
Land (notes 5 and 10) 517,080 444,480
Building (notes 5 and 10) 2,678,525 2,675,763
Molds 102,113 102,113
Transportation equipment 146,386 195,890
Machinery and equipment (note 10) 10,462,893 10,098,430
13,906,997 13,516,676
Less accumulated depreciation (5,365,304) (3,643,341)
Net property and equipment 8,541,693 9,873,335
Investment in Taiwan joint venture (note 6) - 1,595,432
Investment in EV Global (note 7) - 1,000,000
Patent and trademark costs, net of
accumulated amortization of $125,078
and $90,869 731,282 686,195
Goodwill, net of accumulated amortization
of $656,696 and $324,318 (note 2) 5,995,463 6,327,841
Other assets 40,446 33,778
$ 24,257,843 27,206,578
(Continued)
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Consolidated Balance Sheets, Continued
March 31, March 31,
Liabilities and Stockholders' Equity 2000 1999
Current liabilities:
Accounts payable $ 1,379,316 2,244,144
Other current liabilities (note 9) 845,462 952,498
Current portion of long-term
debt (note 10) 972,123 928,701
Revolving line-of-credit (note 10) - 1,100,000
Billings in excess of costs and
estimated earnings on uncompleted
contracts (note 3) 79,499 69,393
Total current liabilities 3,276,400 5,294,736
Long-term debt, less current portion
(note 10) 3,422,459 4,396,127
Total liabilities 6,698,859 9,690,863
Minority interest in consolidated
subsidiary (note 5) 413,066 399,591
Stockholders' equity (notes 12 and 13):
Common stock, $.01 par value, 50,000,000
shares authorized; 17,194,192 and
16,222,932 shares issued 171,942 162,230
Additional paid-in capital 49,382,877 43,412,390
Accumulated deficit (32,024,601) (25,552,794)
Accumulated other comprehensive income (384,300) (451,639)
Notes receivable from officers - (454,063)
Total stockholders' equity 17,145,918 17,116,124
Commitments (notes 6, 10, 17, and 19)
$ 24,257,843 27,206,578
See accompanying notes to consolidated financial statements.
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Consolidated Statements of Operations
Year Year Year
Ended Ended Ended
March 31, March 31, March 31,
2000 1999 1998
Revenue (note 15):
Contract services $ 1,702,937 1,517,960 2,790,496
Product sales 18,894,923 14,280,458 1,274,236
20,597,860 15,798,418 4,064,732
Operating costs and expenses:
Costs of contract services 1,300,052 1,471,827 2,635,599
Costs of product sales 16,133,891 13,033,930 980,034
Research and development 378,954 667,989 902,407
General and administrative 4,036,732 3,461,161 2,121,340
Amortization of goodwill 332,377 308,103 16,215
Write down of investments 4,104,628 - -
Write-down of inventory - - 416,736
26,286,634 18,943,010 7,072,331
Operating loss (5,688,774) (3,144,592) (3,007,599)
Other income (expense):
Interest income 59,369 111,365 191,186
Interest expense (483,298) (338,396) (96,073)
Equity in loss of Taiwan joint
venture (note 6) (186,538) (417,801) (246,648)
Equity in loss of Germany joint
venture (note 8) (93,632) - -
Minority interest share of earnings
of consolidated subsidiary (80,823) (72,596) (70,905)
Other 1,889 107,950 (36,321)
(783,033) (609,478) (258,761)
Net loss $ (6,471,807) (3,754,070) (3,266,360)
Net loss per common share -
basic and diluted (note 1o) (.39) (.24) (.23)
Weighted average number of shares
of common stock outstanding 16,573,391 15,960,966 13,924,434
See accompanying notes to consolidated financial statements.
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity and Comprehensive Income (Loss)
Number of Accumulated Notes
common Additional Accumu- other receivable Total
shares Common paid-in lated comprehensive due from Treasury stockholders'
issued stock capital deficit loss officers stock equity
Balances at March 31, 1997 13,042,964 130,430 27,094,170 (18,532,364) (33,791) (83,646) - 8,574,799
Issuance of common stock in private
offerings, net of offering
costs of $341,202 (note 11) 626,875 6,269 4,667,528 - - - - 4,673,797
Issuance of common stock upon
exercise of employee and
directors options 226,332 2,263 1,081,888 - - - - 1,084,151
Issuance of common stock upon
exercise of warrants 918,026 9,180 1,923,195 - - - - 1,932,375
Issuance of common stock under
employee stock purchase plan 7,523 75 23,963 - - - - 24,038
Issuance of common stock for services 4,000 40 28,480 - - - - 28,520
Compensation expense accrued for
issuance of common stock options
granted for services - - 19,000 - - - - 19,000
Issuance of common stock for
acquisition of Aerocom 371,555 3,716 3,035,602 - - - - 3,039,318
Issuance of common stock for
investment in EV Global 200,000 2,000 998,000 - - - - 1,000,000
Comprehensive income (loss):
Net loss - - - (3,266,360) - - - (3,266,360)
Translation adjustment - - - - (386,689) - - (386,689)
Total comprehensive income (loss) (3,653,049)
Repayment of officers' notes (2,654) (27) (19,380) - - 27,590 - 8,183
Balances at March 31, 1998 15,394,621 153,946 38,852,446 (21,798,724) (420,480) (56,056) - 16,731,132
Issuance of common stock in private
offerings, net of offering
costs of $33,671 (note 11) 123,125 1,231 950,098 - - - - 951,329
Issuance of common stock upon
exercise of employee and directors
options 329,339 3,294 942,316 - - (794,341) - 151,269
Issuance of common stock upon
exercise of warrants 68,600 686 297,689 - - - - 298,375
Issuance of common stock under
employee stock purchase plan 3,120 31 15,089 - - - - 15,120
Issuance of common stock for services 17,845 179 91,303 - - - - 91,482
Compensation expense accrued for
issuance of common stock options
granted for services - - 19,000 - - - - 19,000
Issuance of common stock for
acquisition of Franklin 286,282 2,863 2,244,449 - - - - 2,247,312
Comprehensive income (loss):
Net loss - - - (3,754,070) - - - (3,754,070)
Translation adjustment - - - - (31,159) - - (31,159)
Total comprehensive income (loss) (3,785,229)
Repayment of officers' notes - - - - - 396,334 - 396,334
Balances at March 31, 1999 16,222,932 $162,230 43,412,390 (25,552,794) (451,639) (454,063) - 17,116,124
(Continued)
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity and Comprehensive Income,
Continued
Number of Accumulated Notes
common Additional Accumu- other receivable Total
shares Common paid-in lated comprehensive due from Treasury stockholders'
issued stock capital deficit loss officers stock equity
Issuance of common stock
in private offerings, net
of offering costs $11,235 88,900 889 487,939 - - - - 488,828
Issuance of common stock upon
exercise of employee
and directors options 204,970 2,050 774,671 - - - (3,062) 773,659
Issuance of common stock upon
exercise of warrants 493,087 4,931 3,771,728 - - - - 3,776,659
Issuance of common stock under
employee stock purchase plan 9,072 91 33,730 - - - - 33,821
Compensation expense accrued for
issuance of common stock
options granted for services - - 46,368 - - - - 46,368
Issuance of common stock for
investment in Germany joint
venture 208,333 2,083 1,147,811 - - - - 1,149,894
Adjustment in purchase price of
Franklin and Aerocom - - - - - - (167,395) (167,395)
Comprehensive income (loss):
Net loss - - - (6,471,807) - - - (6,471,807)
Translation adjustment - - - - 67,339 - - 67,339
Total comprehensive income (loss) (6,404,468)
Retirement of treasury shares (33,102) (332) (291,760) - - - 292,092 -
Repayment of officers' notes - - - - - 454,063 (121,635) 332,428
Balances at March 31, 2000 17,194,192 $171,942 49,382,877 (32,024,601) (384,300) - - 17,145,918
See accompanying notes to consolidated financial statements.
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Year Year Year
Ended Ended Ended
March 31, March 31, March 31,
2000 1999 1998
Cash flows used by operating activities:
Net loss $ (6,471,807) (3,754,070) (3,266,360)
Adjustments to reconcile net loss to
net cash used by operating activities:
Write-down of investments 4,104,628 - -
Depreciation and amortization 2,120,493 1,825,323 545,295
Minority interest share of earnings of
consolidated subsidiary 80,823 72,596 70,905
Non-cash compensation expense for
common stock, stock options and
warrants issued for services 46,368 110,482 47,520
Equity in loss of Taiwan joint venture 186,538 417,801 246,648
Equity in loss of Germany joint venture 93,632 - -
Loss (gain) on sale of property and equipment (1,875) - 32,180
Write-off of patent costs - - 18,731
Other (16,241) (8,373) -
Change in operating assets and liabilities:
Accounts receivable and costs and
estimated earnings in excess of
billings on uncompleted contracts (452,207) 231,768 (609,588)
Inventories (423,027) (1,444,538) 331,294
Prepaid expenses and other current assets (50,313) (361,498) (41,084)
Accounts payable and other current liabilities (971,864) 506,805 (395,256)
Billings in excess of costs and estimated
earnings on uncompleted contracts 10,106 68,943 (659,357)
Net cash used by operating activities (1,744,746) (2,334,761) (3,679,072)
Cash used by investing activities:
Cash paid for acquisition of subsidiary, net - (3,848,640) (337,702)
Acquisition of property and equipment (483,716) (4,399,114) (703,562)
Increase in patent and trademark costs (79,296) (137,537) (110,411)
Proceeds from sale of property and equipment 63,327 - 25,250
Investment in other long-term assets (515,708) - -
Net cash used by investing activities (1,015,393) (8,385,291) (1,126,425)
Cash flows provided by financing activities:
Proceeds from borrowings 10,898,494 10,827,358 -
Repayment of debt (12,928,740) (7,320,466) (212,440)
Repayment of note payable for investment
in Taiwan joint venture - - (1,345,285)
Proceeds from sale of common stock, net 488,828 951,329 4,673,797
Issuance of common stock upon exercise
of employee options, net of note repayments 1,106,087 547,603 1,092,334
Issuance of common stock under employee
stock purchase plan 33,821 15,120 24,038
Issuance of common stock upon exercise of warrants 3,776,659 298,375 1,932,375
Distributions paid to holders of minority interest (67,348) (67,347) (67,346)
Net cash provided by financing activities 3,307,801 5,251,972 6,097,473
Increase (decrease) in cash and cash equivalents 547,662 (5,468,080) 1,291,976
Cash and cash equivalents at beginning of period 1,537,453 7,005,533 5,713,557
Cash and cash equivalents at end of period $ 2,085,115 1,537,453 7,005,533
Interest paid in cash during the period $ 488,601 314,983 129,599
(Continued)
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows, Continued
Non-cash investing and financing transactions:
Translation adjustments of $(67,339), $31,159, $386,689, were recorded for the
years ended March 31, 2000, 1999 and 1998, respectively.
In February 2000, the Company accepted 10,675 shares of its $0.01 par value
common stock with a fair market value of $90,742 in satisfaction of purchase
price adjustments arising subsequent to the acquisition of Franklin in
accordance with the provisions of the Franklin Purchase Agreement.
In March 2000, the Company accepted 7,762 shares of its $0.01 per share common
stock with a fair market value of $76,653 in satisfaction of purchase price
adjustments arising subsequent to the acquisition of Aerocom in accordance with
the provisions of the Aerocom Purchase Agreement.
In May 1999, the Company acquired 33.6 percent ownership interest in a Germany
joint venture. Pursuant to this transaction the Company issued 208,333 shares of
common stock with an aggregate value of $1,149,894 in exchange for its ownership
interest.
In April 1998, the Company purchased all of the outstanding stock of Franklin
Manufacturing Company for $4 million cash and 286,282 shares of the Company's
common stock (see note 2).
In January 1998, the Company purchased all of the outstanding stock of Aerocom
Industries, Inc. for $337,702 cash and 371,555 shares of the Company's common
stock (see note 2).
In June 1997, the Company entered into a stock purchase agreement with EV Global
Motors Company (EVG) whereby the Company exchanged 200,000 shares of its common
stock for 400,000 shares of EVG (see note 7).
In accordance with the provisions of the Company's stock option plans, the
Company accepts as payment of the exercise price or as repayment of promissory
notes from officers issued under the option plans, mature shares of the
Company's common stock held by the option holder for a period of six months
prior to the date of the option exercise or promissory note repayment. For the
years ended March 31, 2000 and 1999, the Company issued 5,000 and 15,870 shares
of common stock for an aggregate exercise price of $3,750 and $15,870,
respectively, for which the Company received 355 and 2,308 shares of common
stock as payment for the exercise price. In addition, for the year ended March
31, 2000 the Company received 14,310 shares of common stock with a fair market
value of $121,635 in repayment of promissory notes issued under the option
plans. The shares received were recorded at cost as treasury stock and
subsequently retired.
In accordance with the provisions of the Company's stock option plans, the
Company may, and has, accepted promissory notes from officers of the Company in
satisfaction of the exercise price of options exercised. These notes receivable
are recorded as a reduction of shareholders' equity in the consolidated
financial statements. For the year ended March 31, 1999, the Company issued
267,362 shares of common stock for an aggregate exercise price of $794,341 for
which the Company received promissory notes for the same amount. There were no
notes receivable exchanged for the exercise of options during the year ended
March 31, 2000 and March 31, 1998.
See accompanying notes to consolidated financial statements.
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(1) Summary of Significant Accounting Policies
(a) Description of Business
Unique Mobility, Inc. and subsidiaries (the "Company") is engaged in
the research, development and commercialization of permanent magnet
electric motors and the electronic controls for such motors, the
grinding and manufacturing of high precision gears and the manufacture
and sale of electronic circuit board assemblies, wire harness
assemblies and other electronic products. The Company's revenue is
derived primarily from product sales to customers in the automotive,
agriculture, telecommunications, industrial, medical and aerospace
markets, and from contract research and development services. The
Company is impacted by other factors such as the continued receipt of
contracts from industrial and governmental parties, its ability to
protect and maintain the proprietary nature of its technology, its
continued product and technological advances and the ability of the
Company and its partners to commercialize its products and technology.
(b) Principles of Consolidation
The consolidated financial statements include the accounts of Unique
Mobility, Inc. and those of all majority-owned or controlled
subsidiaries. All significant intercompany accounts and transactions
have been eliminated in consolidation.
Investments in affiliated entities in which the Company has less than
a 50 percent ownership interest and the ability to exercise
significant influence are accounted for by the equity method. Under
the equity method, the investment is originally recorded at cost and
subsequently adjusted to recognize the Company's share of the net
income or losses of the affiliates. Recognition of any such losses is
generally limited to the extent of the Company's investment in,
advances to, commitments and guarantees for the investee.
Other investments, in which the Company has a minimal ownership
interest and does not exercise significant influence, are carried at
cost.
The minority interests as of March 31, 2000 and 1999, consisted of the
other stockholders' ownership interests in a subsidiary of the
Company. See Note 5.
(c) Cash and Cash Equivalents
The Company considers cash on hand and investments with original
maturities of three months or less to be cash equivalents.
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(d) Inventories
Inventories are stated at the lower of cost or market. Cost is
determined by the first-in, first-out method.
(e) Property and Equipment
Property and equipment is stated at cost. Depreciation is computed
using the straight-line method over the estimated useful lives of the
assets which range from three to five years, except for buildings,
which are depreciated over 31 years. Maintenance and repairs are
charged to expense as incurred.
(f) Patent and Trademark Costs
Patent and trademark costs consist primarily of legal expenses, and
represent those costs incurred by the Company for the filing of patent
and trademark applications and the costs to maintain the patents in
good standing. Amortization of patent and trademark costs is computed
using the straight-line method over the estimated useful life of the
asset, typically 17 years for patents, and 40 years for trademarks.
(g) Goodwill
The excess of the consideration exchanged over the fair value of the
net assets obtained in acquisitions is recorded as goodwill.
Amortization of goodwill is calculated using the straight-line method
over a period of 20 years.
(h) Long-Lived Assets
The Company accounts for long-lived assets in accordance with the
provisions of Financial Accounting Standards No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of ("SFAS 121"). SFAS 121 requires that long-lived assets and
certain identifiable intangibles be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount
of an asset may not be recoverable.
(i) Contract Services Revenue and Cost Recognition
Revenue relating to long-term fixed price contracts is recognized
using the percentage of completion method. Under the percentage of
completion method, contract revenues and related costs are recognized
based on the percentage that costs incurred to date bear to total
estimated costs.
Changes in job performance, estimated profitability and final contract
settlements may result in revisions to cost and revenue, and are
recognized in the period in which the revisions are determined.
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
Contract costs include all direct materials, subcontract and labor
costs and other indirect costs. General and administrative costs are
charged to expense as incurred. At the time a loss on a contract
becomes known, the entire amount of the estimated loss is accrued.
The aggregate of costs incurred and estimated earnings recognized on
uncompleted contracts in excess of related billings is shown as a
current asset, and billings on uncompleted contracts in excess of
costs incurred and estimated earnings is shown as a current liability.
(j) Income Taxes
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, Accounting for Income Taxes.
Under the asset and liability method of Statement 109, deferred tax
assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carryforwards. Deferred tax
assets and liabilities are measured using enacted tax rates expected
to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on
deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date.
(k) Research and Development
Costs of researching and developing new technology or significantly
altering existing technology are charged to operations as incurred.
(l) Equity Instruments Issued for Non-Employee Services
The Company periodically issues common stock or stock options to
non-employees for services rendered. The cost of these services is
recorded based upon the fair market value of the Company's common
stock on the date of issuance or the fair market value of the stock
option determined using an appropriate option pricing model.
(m) Foreign Currency Translation
The net assets of foreign investments of the Company are translated at
the appropriate period-end exchange rates. Income and expense accounts
are translated at average monthly exchange rates. Net exchange gains
or losses resulting from such translation are excluded from results of
operations and accumulated as a separate component of stockholders'
equity until realized. Gains and losses from foreign currency
transactions are included in other income (expense).
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(n) Comprehensive Loss
Comprehensive loss consists of net loss and other comprehensive loss
items which under generally accepted accounting principles are
excluded from net loss but included as a component of stockholders'
equity. For the years ended March 31, 2000 and 1999, accumulated other
comprehensive loss consisted entirely of unrealized foreign currency
losses.
(o) Loss Per Common Share
Statement of Financial Accounting Standards No. 128, Earnings per
Share ("SFAS 128"), requires presentation of both basic earnings per
share and diluted earnings per share. Basic earnings per share is
computed by dividing income or loss available to common shareholders
by the weighted average number of common shares outstanding during the
periods presented. Diluted earnings per share is computed by dividing
income or loss available to common shareholders by all outstanding and
dilutive potential shares during the periods presented, unless the
effect is antidilutive.
(p) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
(q) Reclassifications
Certain prior year amounts have been reclassified to conform to the
current period presentation.
(2) Acquisitions
On April 30, 1998, the Company acquired all of the outstanding common
stock of Franklin Manufacturing Company ("Franklin") for $4 million
cash and 286,282 shares of the Company's common stock. The total value
of the consideration exchanged was $6,247,316. The acquisition has
been accounted for using the purchase method of accounting and the
results of Franklin's operations have been included with those of the
Company since April 30, 1998.
On January 16, 1998, the Company acquired all of the outstanding
common stock of Aerocom Industries, Inc. ("Aerocom") for cash and
shares of the Company's common stock totaling $3,377,020. The
acquisition has been accounted for using the purchase method of
accounting and the results of Aerocom's operations have been included
with those of the Company since January 16, 1998.
UNIQUE MOBILITY,INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(3) Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts
and Billings in Excess of Costs and Estimated Earnings on Uncompleted
Contracts
At March 31, 2000, the estimated period to complete contracts in process
ranged from 1 to 17 months, and the Company expects to collect
substantially all related accounts receivable and costs and estimated
earnings in excess of billings on uncompleted contracts as of March 31,
2000, within eighteen months.
The following summarizes contracts in process at March 31, 2000, and 1999:
March 31, March 31,
2000 1999
Costs incurred on uncompleted
contracts $ 645,425 1,457,955
Estimated earnings 180,293 285,804
825,718 1,743,759
Less billings to date (576,106) (1,639,695)
$ 249,612 104,064
Included in the accompanying balance
sheets as follows:
Costs and estimated earnings
in excess of billings on
uncompleted contracts $ 329,111 173,457
Billings in excess of costs and
estimated earnings on
uncompleted contracts (79,499) (69,393)
$ 249,612 104,064
(4) Inventories
Inventories at March 31, 2000, and 1999 consist of:
March 31, March 31,
2000 1999
Raw materials $ 2,446,779 2,205,042
Work in process 627,131 452,653
Finished products 46,369 130,299
$ 3,120,279 2,787,994
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(5) Limited Liability Company
In September 1992, the Company and a private investor formed a Colorado
limited liability company to acquire, own and maintain a 40,000 square-foot
facility in Golden, Colorado, and the surrounding land. This facility
serves as the Company's corporate headquarters. Ownership in this limited
liability company is divided equally between the Company and the private
investor. However, the Company is deemed to have a controlling interest in
the limited liability company by virtue of the operating agreement which
authorizes the Company to make all decisions with respect to the business
of the limited liability company, subject only to certain protective rights
of the private investor, and by virtue of the lease agreement with the
limited liability company covering the entire facility. The limited
liability company is, therefore, accounted for as a consolidated
subsidiary. Minority interest in consolidated subsidiary represents the
private investor's allocable portion of the equity of the consolidated
subsidiary.
(6) Investment in Taiwan Joint Venture
The Company has a 38-1/4 percent interest in a joint venture, Taiwan UQM
Electric Co., Ltd. ("Taiwan UQM"), with Kwang Yang Motor Co., Ltd., and
Turn-Luckily Technology Co., Ltd.
Since its inception, Taiwan UQM has incurred substantial operating losses
and the Company has reported its proportionate share of such losses and
foreign exchange rate fluctuations as a reduction in the recorded value of
its investment in Taiwan UQM under the equity method of accounting. Because
of continued operating losses at September 30, 1999 the Company evaluated
this investment relative to its potential to achieve profitable operations
over the near-term and the Company's potential to recover the recorded
value of its investment. Based on its assessment of these factors and the
uncertainty of recovering its investment, on September 30, 1999 the Company
wrote down the carrying value of this investment from $1,476,233 to zero.
Consequently, the Company discontinued recording its share of the net
losses of the joint venture subsequent to the date of the write-down. Prior
to the write down the Company reported its proportionate share of the
losses of Taiwan UQM under the equity method of accounting. Due to timing
considerations, the financial position and results of operations for the
Taiwan joint venture have been included in the Company's consolidated
financial statements on a three-month time lag.
The cumulative foreign currency translation adjustments with respect to the
Taiwan joint venture were calculated using the average rates in effect
during the six months ended September 30, 1999 and the years ended December
31, 1998 and 1997, respectively, and the exchange rates in effect at the
respective September 30, 1999 and December 31, 1998 balance sheet dates.
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
Summarized unaudited financial information for Taiwan UQM is as follows:
December 31, December 31,
Financial Position 1999 1998
Current assets $ 663,362 607,889
Noncurrent assets-land, property
and equipment 6,757,107 6,647,023
Total assets 7,420,469 7,254,912
Current liabilities 1,696,809 682,073
Noncurrent liabilities 2,373,091 2,401,775
Stockholders' equity 3,350,569 4,171,064
Total liabilities and equity $ 7,420,469 7,254,912
Year Year Year
Ended Ended Ended
December 31, December 31, December 31,
Results of Operations 1999 1998 1997
Revenue $ 871,071 127,638 663
Expenses (1,905,178) (1,219,928) (597,278)
Net loss $(1,034,107) (1,092,290) (596,615)
(7) Investment in EV Global
The Company owns 400,000 shares of EV Global Motors Company (EVG) common
stock. EVG sells electric bicycles.
In June 1999, the Company acquired an approximately 9.5 percent
participation in a $5.225 million convertible note receivable from
Windermere Eco Development Limited, a Bahamian company ("WED") held by EVG,
for $500,000 in cash. WED is an environmentally sensitive development of
Windermere Island in the Bahamas. The entire loan is convertible into
approximately 50.4 percent of the total outstanding equity of WED.
Therefore, if EVG converts the loan, Unique will have the right to receive
approximately 4.82 percent of the equity of WED.
Because of continuing operating losses reported by these investees at
September 30, 1999 the Company evaluated its investment in EVG and WED
relative to their potential to achieve profitable operations over the
near-term and the Company's potential to recover the carrying value of its
investment in each Company. Based on its assessment of these factors, on
September 30, 1999 the Company wrote down the carrying value of EVG from
$1,000,000 to zero and the carrying value of its interest in the WED note
receivable from $515,708 to zero.
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(8) Investment in Germany Joint Venture
In May, 1999, the Company and three other entities formed a German private
company, Unique Mobility Europa GmbH (Europa), to develop and manufacture a
battery-electric cargo and passenger vehicle. Europa was initially
capitalized with DM50,000 cash (US $9,573) and a contribution to surplus of
625,000 shares of Unique Mobility, Inc. common stock, of which 208,333 were
newly issued shares contributed by the Company in exchange for 33.6 percent
ownership interest in Europa.
On October 8, 1999 the Company entered into an agreement with the
Shareholder's of Europa providing for the reduction of its ownership
percentage to 5.9 percent. As a result of this agreement and the Company's
assessment of the potential for Europa to achieve profitable operations
over the near-term and the Company's potential to recover the carrying
value of its investment, the Company wrote down the carrying value of its
investment from $1,112,687 to zero at September 30, 1999.
Subsequent to year end the Company sold its remaining ownership interest in
Europa for $400,000 in cash. No gain or loss was recognized on this
transaction.
(9) Other Current Liabilities
Other current liabilities at March 31, 2000 and 1999, consist of:
March 31, March 31,
2000 1999
Accrued interest $ 21,360 28,623
Accrued legal and accounting fees 71,275 66,205
Accrued payroll, consulting, personal property
taxes and real estate taxes 339,263 268,729
Accrued material purchases 327,828 285,722
Other 85,736 303,219
$ 845,462 952,498
(10) Long-term debt
Long-term debt at March 31, 2000 and 1999 consists of:
March 31, March 31,
2000 1999
Note payable to bank, payable in monthly
installments with interest at 8.65%; matures
July 2003; secured by land and building $ 871,675 903,338
Note payable to bank, payable in monthly
installments with interest at 9.1%; matures
October 2007; secured by land and building 622,486 676,652
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
Notes payable to bank, payable in monthly
installments with interest at 8.5%; matures
October 2001, April, May, October and
December 2005; secured by equipment 1,190,456 1,451,242
Note payable to bank, payable in monthly
installments with interest at 8.125%; matures
August 2001; secured by accounts receivable,
inventory and equipment 416,667 729,167
Note payable to bank, payable in monthly
installments with interest at 7.70%; matures
March 2004; secured by equipment 1,240,545 1,500,000
Note payable to bank, payable in monthly
installments with interest at 9.50%; matures
June 2006; secured by equipment 52,753 -
Note payable to commercial lender, payable in
monthly installments with interest at 6.38%;
matures October 1999 - 50,648
Capital lease obligation - 13,781
Total long-term debt 4,394,582 5,324,828
Less current portion 972,123 928,701
Long-term debt, less current portion $ 3,422,459 4,396,127
Certain of the above loan agreements require the Company to achieve
specific financial and operating requirements. As of March 31, 2000, the
Company was in compliance with all covenants.
The annual aggregate maturities of long-term debt for each of the next five
fiscal years and thereafter are as follows:
2001 $ 972,123
2002 769,990
2003 617,317
2004 666,847
2005 351,385
Thereafter 1,016,920
$ 4,394,582
Lines of credit
At March 31, 2000, the Company has lines of credit of $.75 million and $2.5
million with no amount drawn against either facility. The $.75 million line
of credit expires in October 2000. The $2.5 million line of credit is due
on demand, but if no demand is made, it is due August 15, 2000. Interest on
the lines of credit is payable monthly at prime plus .75% (9.75% at March
31, 2000) and prime less .50% (8.50% at March 31, 2000), respectively. Both
lines have various covenants which limit the Company's ability to dispose
of assets, merge with another entity, and pledge trade receivables and
inventories as collateral. The Company is also required to maintain
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
certain financial ratios as defined in the agreements. Outstanding
borrowings under both lines of credit are secured by accounts receivable,
inventory and general intangibles, and are limited to certain percentages
of eligible accounts receivable and inventory.
(11) Income Taxes
Income tax expense (benefit) attributable to income (loss) from continuing
operations differed from the amounts computed by applying the U.S. federal
income tax rate of 34% as a result of the following:
Year Ended Year Ended Year Ended
March 31, March 31, March 31,
2000 1999 1998
Computed "expected" tax benefit $(2,200,414) (1,276,384) (1,110,562)
Increase (decrease) in taxes
resulting from:
Amortization of goodwill
not deductible for tax 107,286 97,915 -
Expiration of net operating
loss carry-forwards 76,822 89,369 -
Increase in valuation
allowance for net deferred
tax assets 2,160,758 906,668 1,015,804
Other, net (144,452) 182,432 94,758
Income tax benefit $ - - -
The tax effects of temporary differences that give rise to significant
portions of the net deferred tax asset are presented below:
March 31, March 31,
2000 1999
Deferred tax assets:
Research and development credit
carryforwards $ 78,568 97,565
Net operating loss carryforwards 9,631,018 8,617,380
Write-down of investments 1,070,460 -
Total deferred tax assets 10,780,046 8,714,945
Less valuation allowance 10,686,792 8,513,003
Net deferred tax assets, net of
valuation allowance 93,254 201,942
Deferred tax
liabilities - property and
equipment 93,254 201,942
Net deferred tax
liability $ - -
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
As of March 31, 2000, the Company had net operating loss carryforwards
(NOL) of approximately $28.0 million for U.S. income tax purposes which
expire in varying amounts through 2019. Approximately $2.5 million of the
net operating loss carryforwards are attributable to stock options, the
benefit of which will be credited to additional paid-in capital if
realized. However, due to the provisions of Section 382 of the Internal
Revenue Code, the utilization of a portion of these NOLs is limited. Future
ownership changes under Section 382 could occur that would result in an
additional Section 382 limitation which would further restrict the use of
NOLs. In addition, the Section 382 limitation could be reduced to zero if
the Company fails to satisfy the continuity of business enterprise
requirement for the two-year period following an ownership change.
(12) Stockholders' Equity
During the year ended March 31, 2000, the Company completed a private
placement of 88,900 shares of common stock with an institutional investor.
Cash proceeds to the Company, net of offering costs was $488,828.
During the year ended March 31, 1998, the Company completed one private
placement with institutional and private investors of 750,000 units
consisting of one share of the Company's common stock and one warrant at a
price of $8.00 per unit. Each warrant is exercisable into one share of the
Company's common stock at $8.00 per share and expires two years from the
date of issuance. Of the 750,000 units that were privately placed, 626,875
were issued in March 1998 and the remaining 123,125 were issued in April
1998.
(13) Common Stock Options and Warrants
Incentive and Non-Qualified Option Plans
The Company has reserved 5,104,000 shares of common stock for key
employees, consultants and key suppliers under its Incentive and
Non-Qualified Option Plans of 1992 and 1982. Under these option plans the
exercise price of each option is set at the fair market value of the common
stock on the date of grant and the maximum term of the options is 10 years
from the date of grant. Options granted to employees vest ratably over a
three-year period. The maximum number of options that may be granted to any
eligible employee during the term of the 1982 and 1992 plans is 1,000,000
options. Options granted under the Company's plans to employees require the
option holder to abide by certain Company policies which restrict their
ability to sell the underlying common stock.
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
The following table summarizes activity under the plans:
Shares Under Weighted-Average
Option Exercise Price
Outstanding at March 31,1997 2,451,456 4.66
Granted 601,000 7.88
Exercised (210,332) 4.75
Forfeited (13,772) 4.80
Outstanding at March 31, 1998 2,828,352 5.34
Granted 650,000 5.20
Exercised (331,647) 2.90
Forfeited (109,151) 7.68
Outstanding at March 31, 1999 3,037,554 5.49
Granted 495,000 8.31
Exercised (204,970) 3.79
Forfeited (96,190) 6.12
Outstanding at March 31, 2000 3,231,394 $6.01
Exercisable at March 31, 2000 2,183,315 $5.54
The following table presents summarized information about stock options
outstanding at March 31, 2000:
Options Outstanding Options Exercisable
Weighted Weighted Weighted
Number Average Average Number Average
Range of Outstanding Remaining Exercise Exercisable Exercise
Exercise Prices at 3/31/00 Contractual Life Price at 3/31/00 Price
$0.50 - 1.00 18,959 0.9 years $0.75 18,959 $0.75
$2.25 - 3.31 470,360 5.5 years $3.03 470,360 $3.03
$3.50 - 5.00 1,021,756 6.5 years $4.26 651,979 $4.07
$5.38 - 8.75 1,720,319 6.9 years $7.93 1,042,017 $7.60
$0.50 - 8.75 3,231,394 6.5 years $6.01 2,183,315 $5.54
Non-Employee Director Stock Option Plan
In February 1994, the Company's Board of Directors ratified a Stock Option
Plan for Non-Employee Directors pursuant to which Directors may elect to
receive stock options in lieu of cash compensation for their services as
directors. The Company has reserved 500,000 shares of common stock for
issuance pursuant to the exercise of options under the Plan. The options
vest ratably over a three year period beginning one year from the date of
grant and are exercisable for 10 years from the date of grant. Option
prices are equal to the fair market value of common shares at the date of
grant.
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
The following table presents summarized activity under the plan:
Shares Under Weighted-Average
Option Exercise Price
Outstanding March 31, 1997 141,333 $ 5.23
Granted 64,000 7.13
Exercised (16,000) 5.38
Outstanding at March 31, 1998 189,333 5.86
Granted 64,000 5.06
Outstanding at March 31, 1999 253,333 5.66
Granted 9,275 4.25
Forfeited (221,333) 5.59
Outstanding at March 31, 2000 41,275 $ 5.68
Exercisable at March 31, 2000 16,000 $ 6.44
The following table presents summarized information about stock options
outstanding for non-employee directors:
Options Outstanding Options Exercisable
Weighted Weighted Weighted
Number Average Average Number Average
Range of Outstanding Remaining Exercise Exercisable Exercise
Exercise Prices at 3/31/00 Contractual Life Price at 3/31/00 Price
$4.25 - 6.00 25,275 8.8 years $4.76 5,333 $5.06
$6.25 - 7.13 16,000 7.4 years $7.13 10,667 $7.13
$4.25 - 7.13 41,275 8.3 years $5.68 16,000 $6.44
Statement of Financial Accounting Standards No. 123, Accounting for
Stock-Based Compensation ("FAS 123") defines a fair value method of
accounting for employee stock options and similar equity instruments. SFAS
123 permits an entity to choose to recognize compensation expense by
adopting the new fair value method of accounting or continue to measure
compensation costs using the intrinsic value methods prescribed by APB25.
The Company accounts for stock options granted to employees and directors
of the Company under the intrinsic value method. Stock options granted to
non-employees under the Company's 1992 Stock Option Plan are accounted for
under the fair value method. Had the Company reported compensation costs as
determined by the fair value method of accounting for option grants to
employees and directors, net loss and net loss per common share would have
been the pro forma amounts indicated in the following table:
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
Year Ended Year Ended Year Ended
March 31, 2000 March 31, 1999 March 31, 1998
Net loss - as reported $(6,471,807) (3,754,070) (3,266,360)
Compensation expense - current
period option grants (163,069) (129,406) (821,800)
Compensation expense - prior
period option grants (1,390,466) (1,274,213) (619,654)
Net loss - pro forma $(8,025,342) (5,157,689) (4,707,814)
Net loss per common share -
as reported $ (.39) (.24) (.23)
Net loss per common share -
pro forma $ (.48) (.32) (.34)
The fair value of stock options granted was calculated using the Black
Scholes option pricing model based on the following weighted average
assumptions:
Year Ended Year Ended Year Ended
March 31, 2000 March 31, 1999 March 31, 1998
Expected volatility 48.7% 48.3% 48.1%
Expected dividend yield 0.0% 0.0% 0.0%
Risk free interest rate 6.8% 5.4% 5.7%
Expected life of option granted 6 years 6 years 6 years
Fair value of options granted
as computed under the Black
Scholes option pricing models $4.78 per share $2.74 per share $4.15 per share
Pro forma net loss reflects only the fair value compensation expense of
options granted since November 1, 1995. Therefore, the full impact of
calculating compensation cost for stock options under SFAS 123 is not
reflected in the pro forma net loss amounts presented above because
compensation cost is reflected over the option vesting periods (ranging
from 1 to 3 years) and compensation cost for options granted prior to
November 1, 1995, is not considered. Future pro forma compensation cost by
fiscal year, assuming no additional grants by the Company to employees and
directors, is as follows:
Fiscal Year Pro Forma
Ended Compensation
March 31, Expense
2001 $1,304,217
2002 $1,171,983
2003 $ 540,812
Warrants
As discussed in Note 12, the Company completed a private placement in
fiscal 1998 of 750,000 units consisting of one common share and one
warrant. Of the 750,000 units privately placed, 626,875 were issued in
March 1998 and the remaining 123,125 were issued in April 1998. Also in
connection with the 1998 private placement, the placement agents were
issued warrants in March 1998, to acquire 176,588 shares of the Company's
common stock at an exercise price of $8.00 per share. The warrants expire
two years from the date of issuance. During March 2000, warrants
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
to acquire 436,212 shares of the Company's common stock at $8.00 per share
were exercised resulting in cash proceeds to the Company of $3,489,696.
Warrants to purchase 299,375 shares of common stock were extended for a
period of eighteen months at the fair value of such extension resulting in
cash proceeds to the Company of $78,151. In March 2000, warrants to acquire
179,000 shares expired unexercised.
In connection with the 1997 private placement, the placement agents were
issued warrants to acquire 225,625 shares of the Company's stock at an
exercise price of $3.50 per share and warrants to acquire 50,000 shares at
an exercise price of $4.20 per share. The warrants expire three years from
the date of issuance. No warrants were outstanding at March 31, 2000.
In connection with the 1996 private placements, the placement agents were
issued warrants to acquire 50,000 shares of the Company's common stock at
an exercise price of $4.75 per share, 38,100 shares of the Company's common
stock at an exercise price of $5.00 per share, and 50,000 shares at an
exercise price of $4.25 per share. The warrants expire three years from the
date of issuance. No warrants were outstanding at March 31, 2000.
In connection with a 1995 private placement, the placement agent was issued
warrants to acquire 150,000 shares of the Company's common stock at an
exercise price of $5.75 per share. The warrants expire three years from the
date of issuance. No warrants were outstanding at March 31, 2000.
The Company has reserved 300,000 shares of common stock for issuance
pursuant to a warrant agreement with an investment banking company. The
warrants were exercisable at a price of $6.00 per share over a two year
term. No warrants were outstanding at March 31, 2000.
(14) Alcan Royalty Agreement
During 1994, the Company and Alcan Aluminium Limited ("Alcan") executed an
agreement in which Alcan assigned to the Company all of its rights, title
and interests in certain motor technology developed under a program funded
by Alcan. This agreement further provides that the Company shall pay to
Alcan royalties of one-half of one percent on revenue derived from the
manufacture and sale of products or processes embodying the related
technology. For the years ended March 31, 2000, 1999 and 1998 the Company
recorded royalty expense of $23,612, $14,240 and $14,999, respectively,
under this agreement.
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(15) Significant Customers
The Company has historically derived significant revenue from a few key
customers. The customers from which more than 10% of total revenue has been
derived and the percentage of revenue is summarized as follows:
Year Ended Year Ended Year Ended
March 31, March 31, March 31,
2000 1999 1998
Customer A $ 4,434,454 - -
B - 3,108,929 -
C - - 707,771
D - - 571,924
$ 4,434,454 3,108,929 1,279,695
Percentage of revenue 22% 20% 31%
The significant customer for the years ended March 31, 2000 and 1999, were
customers in the Company's Electronic Products Segment. For the year ended
March 31, 1998 the significant customers were all customers of the
Technology Segment. These customers, in total, also represented 18%, 19%
and 0% of total accounts receivable at March 31, 2000, 1999 and 1998,
respectively.
Contract services revenue derived from contracts with agencies of the U.S.
Government and from sub-contracts with U.S. Government prime contractors,
certain portions of which are included in revenue from other key customers
above, totaled $910,770, $758,853 and $846,740 for the years ended March
31, 2000, 1999 and 1998,respectively.
(16) Fair Value of Financial Instruments
The following methods and assumptions were used to estimate the fair value
of each class of financial instruments:
Cash and cash equivalents, certificates of deposit, accounts receivable and
accounts payable:
The carrying amounts approximate fair value because of the short maturity
of these instruments.
Long-term debt:
The carrying amount of the Company's long-term debt approximates fair value
since the interest rate on this debt represents the current market rate for
similar financing available to the Company providing comparable security to
the lender.
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(17) Employee Benefit Plans
401(k) Plan
The Company has established a 401(k) Savings Plan (the Plan) under which
eligible employees may contribute up to 15% of their compensation. At the
direction of the participants, contributions are invested in several
investment options offered by the Plan. The Company currently matches 33%
of participants contributions, subject to certain limitations. These
contributions vest ratably over a three-year period. Matching contributions
to the Plan by the Company were $97,715, $107,455 and $100,212 for the
years ended March 31, 2000, 1999 and 1998, respectively.
Stock Purchase Plan
The Company has established a Stock Purchase Plan which allows eligible
employees to purchase, through payroll deductions, shares of the Compan's
common stock at 85% of the fair market value at specified dates. The
Company has reserved 200,000 shares of common stock for issuance under the
Stock Purchase Plan. During the years ended March 31, 2000, 1999 and 1998,
the Company issued 9,072, 3,120 and 7,523 shares of common stock,
respectively, under the Stock Purchase Plan.
(18) Segments
The Company has three reportable segments: technology, mechanical products
and electronic products. The technology segment encompasses the Company's
technology-based operations including core research to advance its
technology, application engineering and product development and job shop
production of prototype components as well as its corporate headquarters
and executive management. Salaries of the executive officers and corporate
general and administrative expense is allocated entirely to the technology
segment. The mechanical products segment encompasses the manufacture and
sale of permanent magnet motors, precision gears, gear assemblies and
related mechanical products. The electronic products segment encompasses
the manufacture and sale of wire harness assemblies, electronic circuit
board assemblies and electronic products.
For the year ended March 31, 2000, intersegment sales or transfers were
$96,894. During the years ended March 31, 1999 and 1998 intersegment sales
or transfers were immaterial.
The Company's reportable segments are strategic business units that offer
different products and services. They are managed separately because each
business requires different business strategies.
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
The following table summarizes significant financial statement information
for each of the reportable segments for the year ended March 31, 2000:
Mechanical Electronic
Technology Products Products Total
Revenue $ 2,426,152 4,115,557 14,056,151 20,597,860
Interest income 56,621 2,748 - 59,369
Interest expense (61,894) (194,427) (226,977) (483,298)
Depreciation and
amortization (352,485) (933,092) (502,538) (1,788,115)
Write-down of
investments (4,104,628) - - (4,104,628)
Goodwill amortization - (62,318) (270,060) (332,378)
Equity in loss of
Taiwan joint venture (186,538) - - (186,538)
Equity in loss of
German joint venture (93,632) - - (93,632)
Segment earnings (loss) (6,293,807) (686,423) 508,423 (6,471,807)
Segment assets 7,955,110 6,396,297 9,906,436 24,257,843
Expenditures for
segment assets $ (261,606) (141,912) (159,494) (563,012)
The following table summarizes significant financial statement information
for each of the reportable segments for the year ended March 31, 1999:
Mechanical Electronic
Technology Products Products Total
Revenue $ 2,135,818 3,532,871 10,129,729 15,798,418
Interest income 88,307 23,058 - 111,365
Interest expense (67,306) (165,473) (105,617) (338,396)
Depreciation and
amortization (399,823) (804,246) (313,151) (1,517,220)
Goodwill amortization - (61,682) (246,421) (308,103)
Equity in loss of
Taiwan joint venture (417,801) - - (417,801)
Segment earnings (loss) (2,646,442) (1,205,556) 97,928 (3,754,070)
Segment assets 8,032,683 7,495,481 11,678,414 27,206,578
Expenditures for
segment assets $ (487,550) (2,418,688) (1,630,413) (4,536,651)
The following table summarizes significant financial statement information
for each of the reportable segments for the year ended March 31, 1998:
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
Mechanical
Technology Products Total
Revenue $ 3,489,586 575,146 4,064,732
Interest income 155,480 35,706 191,186
Interest expense (75,473) (20,600) (96,073)
Depreciation and
amortization (383,137) (145,943) (529,080)
Goodwill amortization - (16,215) (16,215)
Equity in loss of
Taiwan joint venture (246,648) - (246,648)
Segment loss (3,243,204) (23,156) (3,266,360)
Segment assets 12,757,776 6,827,775 19,585,551
Expenditures for
segment assets $ (278,568) (535,405) (813,973)
(19) Commitments and Contingencies
Employment Agreements
The Company has entered into employment agreement with two of its officers
which expire December 31, 2002 and with one officer which expires April 30,
2001. The aggregate annual future compensation under these agreements
through the expiration date is $1,274,138.
Lease Commitments
The Company has entered into operating lease agreements for office space
and equipment which expire at various times through 2007. As of March 31,
2000, the future minimum lease payments under operating leases with initial
noncancelable terms in excess of one year are as follows:
Year ending March 31:
2001 $ 301,637
2002 272,597
2003 251,444
2004 253,961
2005 252,140
Thereafter 504,280
$ 1,836,059
Rental expense under these leases totaled approximately $377,000, $327,000
and $0 for the years ended March 31, 2000, 1999 and 1998, respectively.
Litigation
The Company is involved in various claims and legal actions arising in the
ordinary course of business. In the opinion of management, the ultimate
disposition of these matters will not have a material adverse effect on the
Company's financial position.
ITEM 9. CHANGE IN AND DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
Pursuant to instruction G(3) to Form 10-K, the information required in
Items 10-13 is hereby incorporated by reference from the Company's
definitive Proxy Statement for the Annual Meeting of Shareholder to be held
on August 15, 2000, to be filed on or about July 5, 2000, pursuant to
Regulation 14A.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) 1. Financial Statements:
Unique Mobility, Inc. (included in Part II):
Independent Auditors' Report.
Consolidated Balance Sheets, March 31, 2000 and March 31,
1999.
Consolidated Statements of Operations for the years ended
March 31, 2000, 1999 and 1998.
Consolidated Statements of Stockholders' Equity and
Comprehensive Income (Loss) for the years ended March 31,
2000, 1999 and 1998.
Consolidated Statements of Cash Flows for the years ended
March 31, 2000, 1999 and 1998.
Notes to Consolidated Financial Statements.
2. Financial Statement Schedules:
None.
(b) Reports on Form 8-K:
Report regarding the exercise of warrants to acquire common
stock dated March 20, 2000.
Report regarding the write-down of the Company's investment
in three joint ventures dated October 15, 1999.
Report regarding the Company's investment in Unique Mobility
Europa GmbH and Windermere ECO Development Limited
dated May 11, 1999.
(c) Exhibits
3.1 Articles of Incorporation and Bylaws. Reference is made to Exhibit 3.1 of
the Company's Registration Statement on Form S-1 (No. 33-42342), which is
incorporated herein by reference.
3.2 Restated Articles of Incorporation. Reference is made to Exhibit 3.2 of the
Company's Quarter Report on Form 10-K for the year ended October 31, 1993
(No. 0-9146) which is incorporated herein by reference.
4.1 Specimen Stock Certificate. Reference is made to Exhibit 3.1 of the Company
Registration Statement on Form 10, dated February 27, 1980 (No. 0-9146)
which is incorporated herein by reference.
10.1 Shareholder Agreement by and among Alcan International Limited, Ray A.
Geddes and Unique Mobility, Inc. dated June 7, 1988. Reference is made to
Exhibit 10.2 of the Company's Quarterly Report on Form 10-Q for the quarter
ended April 30, 1988 (No. 0-9146) which is incorporated herein by
reference.
10.2 Unique Mobility, Inc. Incentive and Non-qualified Stock Option Plan
(amended and restated effective January 1, 1988). Reference is made to
Exhibit 10.4 of the Company's Quarterly Report on Form 10-Q for the quarter
ended April 30, 1988 (No. 0-9146).
10.3 Unique Mobility, Inc. 1992 Stock Option Plan. Reference is made to Exhibit
4.1 to the Company's Registration Statement on Form S-8 (No. 33-47454),
which is incorporated herein by reference.
10.4 Unique Mobility, Inc. Employee Stock Purchase Plan. Reference is made to
Exhibit 4.3 to the Company's Registration Statement on Form S-8 (No.
33-34612), which is incorporated herein by reference.
10.5 401(k) Savings Plan of Unique Mobility, Inc. Reference is made to Exhibit
4.3 to the Company's Registration Statement on Form S-8 (No. 33-34613),
which is incorporated herein by reference.
10.6 Amendment to Shareholder Agreement dated March 25, 1992 between Unique
Mobility, Inc., Ray A. Geddes and Alcan International Limited. Reference is
made to Exhibit 19.7 to the Company's Quarterly Report on Form 10-Q for the
quarter ended April 30, 1992 (No. 0-9146) which is incorporated herein by
reference.
10.7 Unique Building Partners, Ltd. Liability Co. Operating Agreement dated
September 16, 1992. Reference is made to Exhibit 10.33 of the Company's
Registration Statement on Form S-2 (No. 33-53376), which is incorporated
herein by reference.
10.8 Lease between the Company and Unique Building Partners, Ltd. Liability Co.
dated September 22, 1992. Reference is made to Exhibit 10.34 of the
Company's Registration Statement on Form S-2 (No. 33-53376), which is
incorporated herein by reference.
10.9 Unique Mobility, Inc. Stock Option Plan for Non-Employee Directors.
Reference is made to Exhibit 10.39 of the Company's Quarter Report on Form
10-K (No. 0-9146) for the year ended October 31, 1993 which is incorporated
herein by reference.
10.10Warrant Agreement with Arnhold and S. Bleichroeder, Inc. Reference is made
to Exhibit 10.41 of the Company's Quarter Report on Form 10-K (No. 0-9146)
for the year ended October 31, 1993 which is incorporated herein by
reference.
10.11Assignment Agreement with Alcan International Limited. Reference is made
to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the
quarter ended April 30, 1994 (No. 0-9146) which is incorporated herein by
reference.
10.12Amendment to the 1992 Stock Option Plan of Unique Mobility, Inc. Reference
is made to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for
the quarter ended April 30, 1994 (No. 0-9146) which is incorporated herein
by reference.
10.13Amendment to the 401(k) Savings Plan of Unique Mobility, Inc. dated January
18, 1995. Reference is made to Exhibit 10.1 in the Company's Quarterly
Report on Form 10-Q for the Quarter ended January 31, 1995 (No. 0-9146)
which is incorporated herein by reference.
10.14Amendment to the 1992 Stock Option Plan of Unique Mobility, Inc. dated
December 7, 1994. Reference is made to Exhibit 10.2 in the Company's
Quarterly Report on Form 10-Q for the Quarter ended January 31, 1995 (No.
0-9146) which is incorporated herein by reference.
10.15Stock Purchase Agreement by and among Unique Mobility, Inc. and Invacare
Corporation dated December 7, 1995. Reference is made to Exhibit 10.36 in
the Company's Annual Report on Form 10-K for the fiscal year ended October
31, 1995, (No. 1-10869) which is incorporated herein for reference.
10.16Amendment to the Stock Purchase Agreement by and among Unique Mobility,
Inc. and Invacare Corporation. Reference is made to Exhibit 10.3 in the
Company's Quarterly Report on Form 10-Q for the quarter ended April 30,
1996, (No. 0-9146) which is incorporated herein by reference.
10.17Incentive Stock Option Agreement with Ray A. Geddes, Reference is made to
Exhibit 10.1 in the Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1997, (No. 0-9146) which is incorporated herein by
reference.
10.18Non-qualified Stock Option Agreement with Ray A. Geddes, Reference is made
to Exhibit 10.2 in the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1997, (No. 0-9146) which is incorporated herein
by reference.
21 Subsidiaries of the Company
23.1 Consent of KPMG Peat Marwick LLP.
27 Financial Data Schedule
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities and Exchange Act of
1934, Unique Mobility, Inc. has duly caused this Annual Report on Form 10-K to
be signed on its behalf by the undersigned, thereunto duly authorized, in
Golden, Colorado on the 26th day of June, 2000.
UNIQUE MOBILITY, INC.,
a Colorado Corporation
By: "William G. Rankin"
William G. Rankin
Chairman of the Board of Directors
Pursuant to the requirements of the Securities and Exchange Act of 1934, this
Annual Report on Form 10-K has been signed below by the following persons on
behalf of Unique Mobility, Inc., in the capacities indicted and on the date
indicated.
Signature Title Date
Chairman of the Board of
"William G. Rankin" Directors and President
William G. Rankin (Principal Executive Officer) June 26, 2000
Treasurer and Secretary
(Principal Financial and
"Donald A. French" Accounting Officer) June 26, 2000
Donald A. French
"Ray A. Geddes" Director June 26, 2000
Ray A. Geddes
Ernest H. Drew Director
"Stephen J. Roy" Director June 27, 2000
Stephen J. Roy
"J. B. Richey" Director June 28, 2000
J. B. Richey