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THIS DOCUMENT IS A COPY OF THE ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED OCTOBER 31, 1995 FILED ON JANUARY 30, 1996 PURSUANT TO A RULE 201
TEMPORARY HARDSHIP EXEMPTION
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended October 31, 1995
Commission file number 0-9146
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
Boston 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.
The aggregate market value of the voting stock held by nonaffiliates of the
registrant (8,237,076 shares) computed by reference to the closing price of such
stock on the American Stock Exchange, as of January 24, 1996:
$30,374,218
The number of shares outstanding (including shares held by affiliates) of each
of the registrant's classes of common stock, as of January 24, 1996:
10,716,172 shares of the
registrant's common stock,
$.01 par value.
DOCUMENTS INCORPORATED BY REFERENCE
Proxy Statement for March 20, 1996 - Annual Meeting of Shareholders - Part III
ITEM 1. BUSINESS
General
Unique Mobility, Inc. ("Unique" or the "Company"), headquartered in Golden,
Colorado, is engaged in the research, development and commercialization of
electric and hybrid electric vehicles, propulsion systems for such vehicles, as
well as other nonautomotive applications of its technologies. Founded in 1967
as a research and development company, the Company has, since 1977, invested
approximately $26 million to advance state-of-the-art electric propulsion
systems based on high-power dense (small and lightweight) permanent magnet (PM)
motors and electronic controllers which the Company's research engineers believe
are among the most energy efficient in the world. Unique has incorporated this
technology into a variety of automotive and nonautomotive applications for which
management believes there are emerging commercial niche markets in the near-
term, and mass markets in the longer-term. The Company trades on the American
and Boston Stock Exchanges under the symbol "UQM".
The Company's revenue has been derived primarily from contract research and
development services. These sponsored research and development activities have
supplemented internally-funded product development programs and have added
significantly to the Company's technology base which the Company has been able
to apply to the development of products with commercial applications. The
Company intends to continue to advance its existing technologies as well as to
find additional product applications which have high potential for
commercialization.
Unique's relationships with major original equipment manufacturers (OEMs) and
other industry leaders has enabled the Company to obtain partial funding for
product development while still retaining substantially all rights to its
intellectual property. In partnership with BMW (Munich, Germany), Unique has
developed a producible 32 kW PM traction drive system having very high
efficiency and power density. With the Pininfarina Group (Turin, Italy), an
internationally acclaimed design house and manufacturer of niche market
vehicles, the Company is developing the Ethos 3 EV electric car incorporating a
53 kW version of the BMW motor. With the New York State Research and
Development Authority, the Company has developed and demonstrated a natural gas
fueled hybrid electric bus. And with Taiwan based Kwang Yang Motor Co., Ltd.
(KYMCO), one of the world's largest manufacturers of motor scooters, Unique has
developed a hub mounted PM motor and full authority digital controller, charger
and dc to dc converter for KYMCO's entry into the electric scooter market.
In July 1995, the Company commenced an offering of its common stock to four
mutual funds in Italy and Sweden under Regulation S. The sale was completed
during the fourth quarter of fiscal 1995 and resulted in the sale of 581,111
shares of common stock at $3.60 per share. Net proceeds to the Company after
deducting the expenses of the offering were approximately $1.95 million. To
date, the Company has used a portion of these proceeds to fund product
development and engineering expense and for general working capital purposes.
The Company's current products include a range of PM motors and controllers
which incorporate several innovative approaches to electronic, magnetic,
structural and thermal design. Chief among these is the Caliber EV 53
microprocessor-based brushless PM traction drive system for electric and hybrid-
electric vehicle applications. The system includes the UQM 53 kW SR218H PM
motor, CA 40-300L inverter and EVPH332 microprocessor. The Company also offers
a proprietary single stage transaxle with mechanical parking lock which allows
the drive system to be mounted in a vehicle in either a front or rear wheel
drive configuration.
Other products presently in development or available as prototypes include:
Hybrid-electric systems and components for bus and truck applications
Low voltage PM traction motors, controllers, chargers and dc to dc
converters for electric motor scooters
5-10 kW variants of the scooter traction drive system for small industrial
and recreational use vehicle applications
Direct drive (gearless) PM motors for low voltage, low speed traction
applications
Management believes that the innovative designs, carefully selected materials
and advanced manufacturing processes used in Unique products provide a number of
significant benefits. These benefits include high power density
(packageability), high efficiencies over a wide range of operation and
simplified construction which are capable of achieving cost benefits at higher
production levels. High power density and high efficiency is a critical
attribute in any application where space is at a premium and the energy supply
is limited.
Recent Developments
Ford Program. During the third quarter, the Company, in consultation with Ford,
discontinued work on the development of a motor-in-the-wheel concept and a gas
turbine alternator concept following the completion of the initial feasibility
study for each concept. The flywheel energy storage system development is
continuing and the Company expects to deliver a prototype unit to Ford during
the third quarter of fiscal 1996. As a result of these actions, the Company's
overall participation in the Ford program was reduced from an anticipated five-
year $11.2 million effort under which the Company had a cost-sharing obligation
of 50 percent or $5.6 million to a two-year $4.4 million effort with a cost
sharing obligation of $2.2 million. The Company reduced its workforce from a
peak employment level of 72 full-time employees in February 1995 to 33 full-time
employees at October 31, 1995, as a result of the reduction in the scope of this
program. See also "Liquidity and Capital Resources" below.
New Business Unit. In September 1995, the Company established a new business
unit to commercialize its proprietary line of PM motors and controls. The
motors and controls unit operates as the Power Products Division of the Company
and is headed by the Company's Executive Vice President, William G. Rankin. In
December 1995, the Company appointed James A. Bennett to the position of
Director of Manufacturing for the Power Products Division, reporting to
Mr. Rankin. Mr. Bennett has over 35 years experience in electric motor
manufacturing operations and new plant set-up with such organizations as Fasco
Industries, Marathon Electric and General Electric.
The initial focus of the Power Products Division will be directed toward
existing markets for low voltage small vehicle traction applications followed by
an expansion into the emerging markets for high voltage systems for on-road
cars, trucks and buses. Small vehicle traction applications include
wheelchairs, small industrial vehicles, golf carts and lawn care products.
Product offerings will be marketed under the UQM brand name or will be private
labeled on special order for major customers. Manufacturing operations will be
housed in the Company's present facilities in Golden, Colorado.
Strategic Alliance with Invacare. In November 1995, the Company and Invacare
Corporation entered into a Memorandum of Understanding (MOU) reflecting their
intention to enhance strategic efforts in developing world markets on an
exclusive basis through the development and manufacturing of electric motors for
motorized wheelchairs. Invacare is a leading manufacturer and distributor of
home health care and mobility products headquartered in Elyria, Ohio, with
manufacturing facilities in the United States, Canada, France, Germany, Mexico,
New Zealand, Switzerland and the United Kingdom. Invacare's products are
distributed worldwide through a network of more than 10,000 provider locations.
Pursuant to the MOU and a subsequent Stock Purchase Agreement Invacare, in
January 1996, purchased 129,032 shares of the Company's common stock at $3.88
per share for a total capital contribution to the Company of $500,000.
Contingent on development milestones, Invacare has further agreed to purchase
additional shares at market price during the 1996 fiscal year. Proceeds from
the sale of these shares will be used to fund, in part, the Company's
anticipated capital investment for the production tooling, equipment and product
launching costs required to be made by the Company for the manufacture of
products to be sold to Invacare.
Additionally, the Company has agreed that Invacare will have the right to
nominate one person to the Company's board of directors who shall be supported
by the Company's management. Accordingly, on December 8, 1995, Mr. J. B.
Richey, President of Invacare Technology was appointed to fill a vacancy on the
board and will stand for election at the Company's Annual Meeting of
Shareholders on March 20, 1996.
Research and Development Contracts. The Company was awarded several contracts
during the year by various private and governmental agencies and organizations
including:
a contract authorization from Ford Motor Company in the amount of $681,000
to build and test a prototype flywheel energy storage system. This
authorization is part of the Company's participation with Ford in the
second phase of the Hybrid Propulsion System Development Program
sponsored by the U.S. Department of Energy. The Company will cost
share an amount equal to approximately one-half of the authorization.
a contract from the U.S. Naval Sea Command to design an advanced variable
speed PM motor with gearing and associated electronics for use as a
starter motor for a ship propulsion gas turbine. This type of system
could also be used for a broad range of products in the transportation
and industrial drive marketplace where better power quality, higher
power factors and greater energy conversion efficiencies are in demand.
a contract from Chrysler Corporation's military electronics arm, Pentastar
Electronics, Inc., and Southwest Research Corporation to supply UQM PM
motors, generators and electronic controls for integration into a
prototype hybrid electric version of the High Mobility Multipurpose
Wheeled Vehicle (HMMWV), known commercially as the Hummer. A UQM
generator will function as both the starter for the diesel engine and
as the generator for motive power. The high power density of the UQM
motor/invertor will allow one such unit to be packaged at each wheel to
achieve full time four-wheel drive operation with regenerative braking
down to zero RPM.
a contract from the Defense Research Establishment of the Canadian
Department of National Defense to supply UQM PM motors, controllers,
gearing and related equipment for integration into an undisclosed
hybrid-electric powered military vehicle.
a contract amendment from KYMCO authorizing a $245,000 budget supplement
to fund the Company's further development of a PM traction drive system
for motor scooter applications.
Growth Strategy
The Company has an aggressive strategy to commercialize its technologies and to
provide for its future growth. The strategy is premised on the marketing of two
basic product and service groups: Power Products and Vehicle Systems.
The Power Products Division has been established to implement the Company's role
as a supplier to Invacare and as a manufacturer of electric propulsion systems
to OEM automakers, electric vehicle upfitters and others. The Company's in-
house manufacturing capability will be augmented by joint ventures with other
strategic partners to access key markets. To that end, the Company, KYMCO and
Turn-Luckily Technology Co., Ltd. (TLT), the Company's representatives in
Taiwan, have organized Taiwan UQM Electric Co. Ltd. (Taiwan UQM), a joint
venture company established to manufacture and market the Company's products
under license throughout Asia. It is the Company's goal to have a similar joint
venture and/or licensing arrangement in place during fiscal 1996 with a
prospective multi-national partner through which the Company's high voltage
products can be marketed to automotive OEMs in Europe and North America.
The Vehicle Systems Group, now being organized as a separate business unit, will
undertake contracts to design and develop complete vehicle systems and contracts
to integrate electric and hybrid electric propulsion systems into vehicle
platforms of all types. In collaboration with Pininfarina, the Vehicle Systems
Group will have the capability to furnish automotive OEM customers and clients
with a full menu of "clean vehicle" products and services, including the
contract supply of fully operable "badged" vehicles ready for delivery to the
customers' distribution channel. Additionally, in collaboration with Neoplan
USA Corporation (Neoplan), a major manufacturer of transit buses, the Vehicle
Systems Group will be equipped to integrate the Company's hybrid electric
propulsion systems into Neoplan's lightweight carbon fiber transit buses and
other buses on special order from transit authorities and bus fleet operators.
The Company also plans to continue an expanded program of technological
development activities in support of its power products and vehicle system
business units. One element of this effort is the ongoing development of
flywheel energy storage systems as part of the Company's participation with Ford
Motor Company in the U.S. Department of Energy sponsored Hybrid Propulsion
System Development Program. The primary objective of the Company's effort in
this program is to further enhance the understanding of flywheel system dynamics
in mobile applications. A parallel objective is to explore the market for
stationary flywheel systems which appear to have potential within the electric
utility industry for peak/off-peak load leveling applications and for assuring
uninterrupted power supplies to users who require a continuous high quality
power source.
Implementation of the Company's growth strategy is expected to require greater
financial resources than those currently possessed by the Company. There can be
no assurance that the funds required for growth will be available, or will be
available on terms acceptable to the Company. If the Company is unable to
obtain sufficient funding, management would defer, abandon or modify
implementation of its growth strategy. See also "Management Discussion and
Analysis of Financial Condition and Results of Operations" and "Competition"
below.
Product Development
The Company has initiated the following product development programs with the
goal of generating near-term revenue from the sale of electric and hybrid
electric propulsion and energy storage systems and contract services related
thereto:
Motors and Controllers. The Company has completed initial development of a
number of high voltage PM motors ranging from 20 kW to 75 kW and controllers
with nominal voltages ranging from 96 V to 400 V. It is the Company's plan to
market these products directly or in conjunction with strategic partners to
automotive OEMs and vehicle upfitters. A typical system of this type is the
Caliber EV 53 microprocessor-based brushless PM traction drive system for
electric and hybrid vehicle application.
PICTURE OF THE COMPANY'S SR 218H MOTOR AND CA 40-300L INVERTER
Fig. 1 SR 218H Motor and CA 40-300L Inverter
The system includes the UQM SR 218H PM motor and the CA 40-300L inverter with
an EVPH332 microprocessor. It can be matched to the Company's proprietary
single stage transaxle which accommodates either a front or rear wheel drive
configuration.
Key to the design of this and other UQM motors are radially positioned high-
energy permanent magnets which are mounted on a hollow rotor "cup" which is
coaxial with a relatively thin narrow-slot stator winding. The stator winding
is directly pierced by the flux field of the magnets and a high magnetic pole
count is employed. This design approach permits the use of a multiplicity of
thin narrow magnets rather than a fewer number of larger thicker magnets. This
in turn reduces the thickness of the steel in the rotor cup to which the magnets
are mounted as well as the thickness of the magnetic flux return path in the
stator. The benefit of this arrangement (upon which several of the Company's
patent claims are based) is to reduce the overall amount of iron and magnet
material in the motor when compared to conventional PM motors. The reduced
amount of iron lowers the electromagnetic losses (i.e., increases efficiency)
and also reduces the weight and size of the motor for any given power rating.
The reduced amount of magnet material results in a corresponding reduction in
cost.
Of critical importance to the system are the power electronics (amplifier)
required to deliver a high-frequency switched supply of electrical power to the
copper windings which energize the motor, and the logic controller
(microprocessor) which is the "brain" that initiates all commands to the
amplifier and provides the link between the system and the operator. The total
system (i.e., motor, amplifier and microprocessor) must be carefully matched to
achieve optimum performance and efficiency in delivering a smooth, constant
power profile from mid to high speed.
In combustion-engine vehicles constant power is achieved by progressing through
gear changes in a mechanical transmission or torque converter. PM motors are
traditionally considered to be constant torque devices due to the permanent
magnets which deliver a fixed-amplitude magnetic field. A constant torque motor
will have the inherent limitations of either insufficient torque, unacceptably
low top speed or excessive (more costly) power electronics. Through the use of
electronic manipulation of the current supplied to the motor, however, a
constant power system can be achieved where sufficient torque, high top speed
and minimal power electronics are realized. The manipulation of current to
obtain constant power can be achieved by advancing the phase-angle or vector of
input current to the stator which weakens its magnetic field. This allows the
motor to run faster and thus deliver more power. Such field weakening
techniques are typically used in AC induction motors and can be applied to PM
motors. However, the Company has developed a different way to achieve the same
result while avoiding some of the disadvantages of weakening the magnetic field.
This technique is described as "impedance-based" and employs phase advance to
"precharge" the windings prior to significant torque production. The precharge
results in a generated torque that decreases as speed increases. The Company
believes that its impedance-based phase advanced system driven by a six-step
control possesses significant cost and performance advantages over any other PM
drive system and has filed patent applications accordingly.
In addition to its high voltage product line, the Company has completed initial
development of a number of PM motors from 1 kW to 10 kW and electronic
controllers with nominal voltages from 12 V to 48 V. It is the Company's goal
to manufacture and market these products for a variety of applications including
bicycles, wheelchairs, small industrial vehicles, neighborhood vehicles, golf
carts and lawn care products. To further this objective, the Company intends to
expand manufacturing capability at its Golden facility. In parallel with its
in-house expansion, the Company may outsource low voltage products to Taiwan UQM
if and when high volume production for the KYMCO electric scooter program
provides sufficient economies of scale to lower manufacturing costs. Such low
cost outsourcing has the potential to enable the Company to offer low voltage
traction drives to several price sensitive markets in North America that it
otherwise might not be able to reach.
The Taiwan Scooter. The Company has entered into a product development and
licensing agreement with Taiwan-based KYMCO to develop an advanced electric
traction system for motor scooter applications. First prototypes of an advanced
hub-mounted PM motor and full authority digital controller have been built and
tested. Final sign-off on design specifications occurred in November 1995 and
production engineered prototypes are currently being built. The Company expects
to complete the development program in the fourth quarter of fiscal 1996.
Pursuant to the licensing agreement, KYMCO will have, subject to certain
conditions, the exclusive right to market the developed products for motor
scooter applications throughout Asia, except for India and Japan, and
nonexclusive rights throughout the rest of the world.
KYMCO is one of three major manufacturers of motor scooters in Taiwan and has a
total annual production of over 600,000 units, a substantial portion of which
are manufactured under license from Honda. It has a world class, high-quality
fully integrated manufacturing facility located in Kaohsiung, Taiwan. KYMCO
launched the electric scooter program in order to comply with Taiwanese
regulatory mandates, and the timing for KYMCO's production launch of the
electric scooter is being established to comply with such mandates. Originally,
the program was geared to a regulatory mandate that beginning in 1998,
required five percent of all scooters sold in Taiwan to be electric. Recently,
however, the mandate was relaxed to require only two percent electric beginning
in the year 2000. Battery availability and lack of charging infrastructure have
been given as reasons for this modification.
With KYMCO and TLT, the Company has established a joint venture company, Taiwan
UQM, to manufacture motors, controllers and related products under license from
the Company. The joint venture is intended to support the commercial phase of
the KYMCO electric scooter program as well as other clean vehicle programs
(including cars, trucks and buses) that the Company hopes to initiate in Taiwan,
Mainland China and throughout Southeast Asia. Based on KYMCO's financial
support, Taiwan UQM has acquired approximately three acres of prime industrial
property near Chiang Kai-Shek International Airport. Separately, KYMCO has
acquired an additional three acres on an adjacent tract. Architectural drawings
are currently being prepared for a motor and electronics manufacturing facility
to be erected on the site and construction is scheduled to begin in April 1996.
Mr. L. K. Luh has been appointed to head operations for Taiwan UQM and will
oversee construction of the new facility which is expected to be completed by
calendar year end. Mr. Luh came to Taiwan UQM from China Motor Corporation
where he was a senior executive responsible for product development and
manufacturing.
The Company and KYMCO are currently investigating other electric and electronic
products which could be launched into production prior to the start of electric
scooter component production.
The Ethos 3 EV. In November 1994, the Company announced its collaboration with
the Pininfarina Group of Turin, Italy, in a program to solicit contracts for the
design, development and manufacture of electric and hybrid electric vehicles for
automotive OEMs around the world. This collaboration brings together a set of
vehicular experiences and technologies which management believes is unparalleled
in the automotive industry. The essence of the collaboration is based on the
premise that the most cost effective and practical way to enter this emerging
new market can be achieved from a partnership of innovative companies who bring
technology, experience and commercial strength to a well conceived and
realizable product development plan.
The full menu of services offered by Unique in collaboration with Pininfarina is
exemplified by the Ethos 3 EV concept car. These services include market driven
design, styling, product and process engineering, power-train development,
lightweight structure technology, vehicle test and certification for all
countries and a complete range of contract manufacturing operations from body
build-up to component manufacture to the final assembly of complete vehicles.
PICTURE OF THE ETHOS 3 EV AUTOMOBILE
Figure 2: The Ethos 3 EV
The Ethos 3 EV is a five-passenger sedan with original styling and atypical
dimensions. Very briefly, it is an aerodynamic cube having a curb weight of 726
kg without batteries. The length is 336 cm, the width 169 cm and the height 147
cm. The wheelbase is 230 cm. The wheels are positioned at the extreme corners
of the bodywork, which results in minimal front and rear overhang. Other
features that define the Ethos 3 EV include:
Easy entrance and exit. There are four doors which open to 80 degrees,
plus a tailgate which is split into two parts. This feature simplifies
loading of luggage from above, particularly when parked bumper-to-
bumper along the curb.
Safety and comfort. Most accidents occur in urban traffic, so a car
designed for use in and around town must offer a high degree of
occupant protection. In this sense, the sturdy aluminum cage assures
outstanding safety. Impact beams are incorporated in the doors and the
front seats are fitted with dual airbags and pre-tensioned seat belts.
Modular space. Small outside and large inside is a well-known concept in
the automotive industry. The interior of the Ethos 3 EV with its
smooth, uncluttered floor, can comfortably seat five passengers and a
reasonable amount of cargo.
The architecture of the reticular frame is made up mainly of drawn aluminum
sections assembled together with a number of seam points (joints or nodes). It
creates a light cage-like structure which is extremely rigid and reliable,
effectively protecting the passengers. It also comprises the platform within
which the vehicle's power system and battery pack are housed.
PICTURE OF THE ALUMINUM SPACE FRAME (INTERNAL STRUCTURAL COMPONENTS)
OF THE ETHOS 3 EV AUTOMOBILE
Figure 3: Aluminum Space Frame
By avoiding the use of metal stamping dies, the lead time and investment in
platform tooling are considerably reduced. Construction of the space frame is
flexible and can be easily stretched into longer wheelbase configurations. With
appropriate fixtures, it is adaptable to crated knock down (CKD) assembly. Most
importantly, the light weight of aluminum (one-third less than steel) enables
secondary weight savings with a corresponding reduction in the energy required
to move the vehicle.
The fully-integrated power system of the Ethos 3 EV is based on more than
fifteen years of technological development by Unique Mobility. The system
represents the state-of-the-art in permanent magnet vehicle drives and is one of
the most compact, energy efficient systems available. A block diagram of the
full system is depicted in Figure 4:
SCHEMATIC BLOCK DIAGRAM OF THE OPERATING COMPONENT SYSTEMS OF THE
ETHOS 3 EV INCLUDING BATTERY, HVAC, BRAKE PUMP, DC/DC CONVERTER,
POWER INVERTER, SYSTEM CONTROLLER, USER INTERFACE AND MOTOR.
Figure 4: Ethos 3 EV System Block Diagram
As shown in the block diagram, the vehicle power system is comprised of eight
primary functional units, plus the heating, ventilating and air conditioning
(HVAC) system and the brake booster pump. At the very heart of the system is
the UQM SR218H permanent magnet motor and CR40-300L controller.
The Ethos 3 EV has the capability to package twelve 12 V Electrosource "Horizon"
advanced lead acid batteries or twenty-three GM Ovonic Nickel Metal Hydride
batteries. The battery charger is supplied by Delco Power Systems and is
capable of replenishing a fully depleted battery in approximately four hours on
a 220 VAC supply. The DC/DC converter provides 12 V power for such accessories
as lighting, windshield wipers, ventilation fans and audio equipment. A 12 V
backup accessory battery is provided for emergency lighting.
A significant development target for the Ethos 3 EV is to achieve unrestricted
cold-weather heating and summer time cooling without emissions being generated
or an auxiliary gas-fired heating system being required. Because electric
vehicles lack the conventional heat source (engine coolant), heat pumps that
collect heat from the outside air are widely used. An innovative dehumidifying
heat pump system is being developed for the Ethos 3 EV by Calsonic
International, an affiliate of Nissan. The system utilizes an added heat
exchanger that provides the dehumidification to permit enhanced vehicle warm up.
The Company and Pininfarina believe that the Ethos 3 EV represents a first step
towards a marketable electric vehicle. It is a realistic concept that could be
put into series production within 18 to 20 months. This presupposes (1) the
ready availability of a good performing battery with long-term reliability at
reasonable cost and (2) the installation of requisite charging infrastructure in
those areas where the vehicle is to be marketed.
Because the initial market for such vehicles is likely to be small and
inherently high-risk, it may be economically prudent for vehicle manufacturers
to share investments and technologies across several markets to reduce costs.
The Company and Pininfarina believe the Ethos 3 EV concept lends itself to such
commercial partnerships although no such commercial partnership has been
established to date.
Hybrid Bus Installations
The Company has developed a 25-ft. hybrid electric transit bus which it believes
to be one of the first of its kind to become operable in North America. The
development was funded by a consortium consisting of Alcan Aluminium Limited,
the Canadian Gas Association, the Ontario Provincial Government, San Diego Gas
and Electric Company, Bus Industries of America, and the New York State Energy
Research and Development Authority (NYSERDA). The bus is powered by two UQM
SR218 60 kW traction motors. The hybrid engine is a natural gas fueled
Chevrolet 4.3 liter V6 coupled to a third SR218 motor operating as a generator.
The 4.3 liter engine generator provides average motive power. Acceleration
is provided by 30 12V sealed lead-acid batteries. At a curb weight of 21,540
pounds, vehicle performance exceeds industry White Book specifications.
PICTURE OF UQM 60 KW TRACTION DRIVE AND BRAKE ASSEMBLY
Figure 5: UQM 60 kW Traction Drive and Brake Assembly
The hybrid electric bus was operated as an engineering test vehicle at the
Company's facility in Golden for approximately two years. In October 1994, the
Company received a contract from NYSERDA to upgrade vehicle electronics and to
prepare the bus for leased transit service in the state of New York. From June
to December 1995, the bus was made available to seven New York State transit
operators for real-world demonstration as part of an ongoing research project by
NYSERDA. The demonstration sites included Albany, New York City, Ithaca, Long
Island, Westchester County and the Buffalo/Niagra Falls area. Each transit
operation successfully ran the bus in its service territory, providing valuable
operating data and rider feedback to help determine the market potential for
hybrid electric buses of this type.
The Company has entered into a cooperative effort with Neoplan to explore
opportunities to integrate the field-tested UQM hybrid electric propulsion
system into Neoplan transit buses, including Neoplan's advanced carbon fiber
composite bus. Neoplan, an affiliate of Gottlob Auwarter GmbH (Stuttgart), is
located in Lamar, Colorado, and is currently the only North American supplier of
lightweight carbon fiber bus bodies. Composite bus bodies achieve weight
savings of up to 30 percent when compared to conventional metal frame buses. By
installing the UQM hybrid electric propulsion system in a composite-bodied bus,
it is possible to achieve significant reductions in engine emissions as well as
increased fuel savings, lower maintenance cost, accommodation for low floor
configuration and compliance with overall vehicle weight standards. Neoplan and
the Company are presently cooperating to secure contract awards from major North
America transit authorities for the integration of hybrid electric propulsion
systems into both conventional and composite buses. However, no such contract
award has been received to date.
Flywheel Energy Storage System. The Company is participating with Ford Motor
Company in the U.S. Department of Energy funded Hybrid Propulsion System
Development Program. Currently, the Company is producing an advanced prototype
flywheel energy storage system under a cost share contract authorization from
Ford. Within the second quarter of fiscal 1996, the completed prototype will
begin high speed testing. A schematic drawing of this flywheel is shown below:
Figure 6: Flywheel Energy Storage System
This flywheel design integrates the Company's permanent magnet motor/alternator
with a polar woven composite flywheel rotor and a flex-rim hub placed within a
hermetically sealed air-evacuated housing with only electric input and output.
The function of this device is to store rotational kinetic energy in the
flywheel rotor and supply electrical energy to the vehicle on command. The
stored energy is captured from regenerative braking energy, normally
dissipated as heat, and reapplied for accelerative power. Other applications
for flywheel energy storage systems include peak/off-peak load leveling for
power generating plants and uninterrupted power supplies to electric utility
customers who require a continuous high-quality power source.
Marketing/Markets
The Company's goal is to be a leading supplier of a new generation of
intelligent, electro-mechanical products for transportation, industrial, utility
and defense applications. The transition to these products is being driven by
a combination of market demand for higher performance, improved efficiency and
by the potential to satisfy these needs with new developments made possible by
advances in materials and electronics technologies. To achieve its goal, the
Company has leveraged externally-funded research and development to engineer
products which the Company believes have multiple applications across several
markets.
Power Products. Management believes that the Company's high efficiency, power-
dense motors, generators and electronic controls are ideally suited for electric
and hybrid electric cars, trucks and buses. Industrial process equipment
suppliers can use the Company's high-efficiency motors and drives for a wide
range of fractional and integral horsepower applications. These motors and
drives are particularly well suited to high-speed spindles and machine tool
positioning systems. The Company's hollow-core variable speed PM motors can be
readily adapted to provide compact, energy-efficient power for air conditioners
and coolers. Other PM motors can provide lightweight, space-saving power packs
for auxiliary power units, servo systems and electro-mechanical actuators for
many commercial, industrial and military applications.
Electric Scooter. Taiwan UQM, in which the Company has a 39 percent equity
interest, see "Management Discussion and Analysis of Financial Condition" below,
is planning to manufacture PM motors, controllers and related products for KYMCO
under license from the Company. The Taiwan Ministry of Transportation and
Communication reported that 1995 domestic sales of gasoline powered two-wheeled
vehicles totaled 1,088,000 units with approximately 500,000 additional units
produced for export to the People's Republic of China. KYMCO is Taiwan's
leading manufacturer of such vehicles and is its largest exporter. Based on
Taiwan's mandate that two percent of all scooters sold beginning in the year
2000 must be electric, these data suggest a base market in Taiwan of at least
21,760 electric scooters, with the potential of much higher levels as better
batteries and extended charging infrastructure become available.
Additionally, the Company hopes to establish a similar joint venture or license
of its products in India where the two and three wheeled vehicle market is
several times greater than that of Taiwan and where the environmental push for
clean vehicles is growing.
Vehicle Systems. The Company has teamed with Pininfarina to solicit automotive
OEM contracts to develop complete electric and hybrid electric vehicle systems
and to explore the commercial feasibility of producing complete vehicles and/or
vehicle subsystems that may result from such contracts. Neither the Company nor
Pininfarina intend to market vehicles under their own names, respectively, but
rather hope to engage one or more major automotive OEM partners who might wish
to outsource part or all of the design, development and/or "badged" manufacture
of vehicles to the Unique/Pininfarina team. At present, there are approximately
25 major automotive OEM groups in North America, Western Europe and Japan.
These OEMs, together with several newly forming companies in Asia and Eastern
Europe, constitute the global market for the products and services of the
Unique-Pininfarina team.
Flywheel Energy Storage Systems. The Company's flywheel energy storage systems
can extend the range of electrically powered vehicles by providing surge power
for acceleration and by recovering energy normally lost in braking. In
stationary applications, flywheel systems can provide uninterrupted electrical
power to critical machines and computers during lightening strikes and other
utility line faults. Also, such systems can solve quality problems caused by
modern, high-frequency switching power supplies and can provide off-peak storage
options for reducing power generating requirements to meet peak power demands.
Environmental Initiatives and Legislation
The major driving force behind the commercialization of electric vehicles in the
United States is the demand for clean urban air. The federal government has
responded with the Clean Air Act and other initiatives directed toward reducing
vehicular emissions and with programs to encourage electric and hybrid electric
vehicle development. Some state governments, California in particular, have
done likewise.
In 1990, California mandated that beginning in 1998, at least two percent of all
cars and light trucks offered for sale by each automaker with annual sales in
California of over 35,000 vehicles must be zero emission vehicles (ZEVs). The
proportion increases to five percent in 2001 and ten percent in 2003. In June
1995, the California Air Resources Board (CARB) appointed a technical advisory
board to investigate and report on the state of EV battery development and
commercialization to determine, in part, whether the availability of advanced
batteries was sufficient to support the requirements of the ZEV mandates. The
panel's November 1995 report concluded:
low performance lead-acid and nickel cadmium batteries will be available
for ZEVs in 1998, but to be competitive, EVs will have to be equipped
with more advanced batteries that will not be commercially available
until 2000/2001.
several types of advanced high energy/high power batteries are emerging
with the promise of satisfying the previously announced mid-term goals
ofthe government/industry sponsored U.S. Advanced Battery Consortium
commercial scale advanced battery production facilities will not occur,
however, until battery manufacturers receive commitments from automakers
for 10,000 to 40,000 battery packs per year.
In December 1995, the CARB staff proposed to suspend the current mandates for
ZEVs until the year 2003 when all automakers that sell more than 3,000 vehicles
in California would be required to meet the ten percent ZEV requirement. In
lieu of the earlier mandates, the CARB staff is proposing a voluntary "market-
based ZEV launch" whereby the automotive industry would agree to install the
capacity to build a total of 5,000 ZEVs in 1996 and 1997, then 14,000 ZEVs
annually from 1998-2002. Actual production within these capacity levels would
be governed by market demand (not by mandate) and, in some cases, ZEVs sold
before 2003 would receive credit toward the 2003 mandate. The CARB proposal is
being further developed for formal consideration in March 1996.
The Company views the proposed modification of the California ZEV mandates as a
positive step in the development of the EV industry. While the ZEV mandates
were instrumental in jump starting the development of several new technologies,
they have the potential of forcing manufacturers to offer poorly performing
products at prohibitive costs that, for want of a better battery, will not be
accepted in the marketplace. Such a result creates an artificial market and
could seriously damage the ultimate acceptance of electric vehicles as a viable
transportation alternative.
The Company believes that the global market for electric and hybrid electric
vehicles has significant potential once the issues of battery performance and
infrastructure are resolved. The Company further believes that Unique Mobility
is well positioned to enter this market as the industry emerges. For these
reasons, management has focused on the development of next generation vehicles
and systems rather than rushing its advanced products to a market which is
poorly conceived and characterized by underperforming products produced to meet
an artificially established market driven by mandates. In the meantime, the
Company will direct its focus toward the newly-established Power Products
Division in a near-term effort to tap existing markets for lightweight, energy-
efficient small vehicle traction applications.
Competition
The government, automotive and industrial markets into which the Company hopes
to introduce and market its developed products are all highly competitive and
characterized by rapid changes due to technological improvements and
developments. The automotive industry, in particular, is currently being driven
by legislation and other initiatives to advance the state-of-the-art, especially
with respect to low emission, fuel-efficient traction drive systems. The
Company is aware of efforts by many companies, including large automotive OEMs,
to develop electric and hybrid electric vehicles. The Company's products will
compete with existing motor and controller technologies, many of which have a
longer history of commercial production and use. The Company believes its
principal competitors in the automotive supply sector include Auxilec, Delco
Propulsion, Hughes Electronics, Kaman Electromagnetics, SatCon Technology,
Siemans and Westinghouse. Principal competitors in the industrial sector
include Advanced DC, Emerson Electric, General Electric and Reliance Electric.
The Company is aware of other companies, both large and small that may enter
the market and expects competition to intensify either though direct competition
or via alternative technologies.
Although the Company is not as well capitalized as some of its competitors and
is more limited in terms of its facilities and personnel, its strategy is to
compete with larger companies on the basis of technical skills, proprietary
know-how and its affiliation with several large and well financed strategic
partners.
Nevertheless, the industries served by the Company are highly competitive and a
number of companies are involved in extensive research and development programs
designed to address the technological challenges which the Company is seeking to
address though its product development program.
Virtually all of the Company's revenues to date have been derived in connection
with contracts for prototype development or prototype evaluation. As a result,
the Company will need to develop products which address customer needs in a
cost-effective and timely manner. There can be no assurance that the Company
will be successful in these efforts, that products developed by other companies
will not be selected or that potential customers will purchase the Company's
products in a timely matter, if at all.
Patents and Trademarks
The Company filed a motor patent application with the U.S. Patent Office in
December 1985, and similar applications are being prosecuted in numerous other
countries throughout the world. As a result of the original U.S. Application,
U.S. Patent No. 5,004,944 was issued on April 2, 1991, containing one
independent claim and three dependent claims. A Continuing Application of the
1985 application was field in October 1990 to pursue subject matter that was not
allowed in the original U.S. Patent. As a result, U.S. Patent 5,311,092 issued
on May 10, 1994, with four independent claims and one dependent claim. Of the
foreign applications, a patent has been published covering thirteen European
member countries of the European Patent Office (EPO), and an Opposition thereto
has been resolved. In addition, corresponding patents have been issued in
Australia, Brazil, Canada, India, Israel, Mexico, New Zealand, South Africa and
Taiwan. Eight other foreign applications remain pending.
In August 1989, the Company filed a separate application with the U.S. Patent
Office to cover certain proprietary aspects of its electronic control circuitry.
Additional claims were added by means of a Continuation in Part (CIP) filed in
May 1990. In April 1992, the Company was issued U.S. Patent No. 5,107,151 as a
result of the CIP Application. In August 1990, an International Patent
Application corresponding to the U.S. Application and the Continuation in Part
was filed under the provisions of the Patent Cooperation Treaty (PCT) which
includes the EPO, Japan and South Korea, among others. National applications
were also filed in eight additional countries including India, Taiwan and
Israel; patents have been granted in Mexico, Taiwan and Israel. Applications
remain pending in India, Ireland, Japan and Korea but the EPO Application has
been withdrawn.
In March 1990, a Continuing Application was filed to claim the method of
constructing the motor as disclosed in U.S. Patent No. 5,004,944. The
Continuing Application resulted in U.S. Patent 5,319,844 issued June 14, 1994.
In March 1991, the Company filed an International patent Application
corresponding to the U.S. Application; as a result, a patent has been granted in
Australia and there are eight applications pending in foreign countries and one
pending application in the European Patent Office (EPO) which designates the
European group of countries.
In September 1992, the Company filed a separate application with the U.S. Patent
Office titled "Stator and Method of Constructing same for High Power Density
Electric Motors and Generators" which has resulted in issuance of U.S. Patent
5,382,859 in January 1995. This patent embodies the Company's most recent
enhancement to its motor technology which utilizes a segmented iron powder
stator ring developed specifically for brushless permanent magnet stator cores.
A Divisional U.S. Patent Application has been filed to pursue a second invention
disclosed in the original application. Patent Applications in Canada, Europe,
Japan and Korea are pending as designated in a counterpart PCT International
Patent Application.
The Company currently holds a patent issued by the United States Patent Office,
in August 1980, which covers certain mechanical features of the ElecTrek
automobile, principally its composite unibody structure and battery trays. This
patent expires in August 1997. The Company no longer produces or markets its
ElecTrek automobile.
In July 1994, the Company filed an application in the U.S. Patent Office titled
"Brushless DC motor using Phase Timing Advance" which embodies a low cost method
of controlling the drive current to a motor to achieve operating characteristics
ideal for vehicle traction drives. This application is still pending. In June
1995, a counterpart PCT International Patent Application was filed.
During 1994, the Company acquired the assets of Everton Developments, Ltd. of
Birmingham, England, including all rights under PCT Application WO 92/22122
published December 10, 1992, and patent applications filed thereunder are still
pending in seven countries including the United States. This technology is
similar to that developed by the Company but is complementary to it, thus
broadening the Company's range of products.
The Company owns the trade mark "UM," which is registered with the United States
Patent and Trademark Office and is subject to renewal in October 2000. This
trademark is available for use in connection with the products and publications
of Unique. The Company owns three U.S. Trademark Registrations for "UNIQ"
(International Class 7 for Power Transducers, and Class 12 for Utility Land
Vehicles and Class 16 for Publications). The Class 12 trademark is subject to
renewal in June 2006; the Class 7 trademark is subject to renewal in August
2006; and the Class 16 trademark is subject to renewal in February 2007.
The Company has also initiated registration of the letters UQM and a stylized
version thereof as its new trademark in the U.S. and 26 countries throughout the
world. Two U.S. Trademark Registrations and a majority of the foreign
registrations were obtained during 1995, directed to the same trademark classes
as for the marks "UM" and "UNIQ." UQM is the American Stock Exchange code
identification for the Company. The foreign trademark registrations and
applications include major markets where the Company is doing business or
establishing business contacts.
In November 1994, the Company and Alcan completed an assignment agreement which
provided, among other things, that for so long as Alcan beneficially owns at
least five percent of the Company's common stock, it shall be obligated to pay
one-half of the patent application and maintenance fees (including reasonable
attorney's fees related thereto) associated with the Company's PM technology in
an amount not to exceed the aggregate amount of royalty revenue derived from the
PM technology.
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.
License Agreements
In January 1994, the Company entered into a Product Development and License
Agreement with KYMCO. This agreement provides for KYMCO to fund up to $1.25
million of development work by the Company on an electric propulsion system for
a purpose built motor scooter. In December 1995, KYMCO authorized an additional
$245,000 of supplemental funding for the scooter project.
After completion of the development program, KYMCO may notify the Company that
it wishes to proceed with the manufacture and sale of such motor scooters, in
which case a supply agreement will be negotiated between KYMCO and Taiwan UQM.
In that case, the Company would grant to KYMCO a royalty free license, exclusive
in Asia except Japan and India and non-exclusive elsewhere, to sell scooters
with motors and controllers manufactured by Taiwan UQM using the Company's
technology. The Company would similarly license its technology to Taiwan UQM for
its manufacture of motors and controllers for scooters.
The Company and Alcan have entered into an agreement (Assignment Agreement)
which supersedes a previous License Agreement in its entirety. The Assignment
Agreement shall remain in effect until all patents issued or applied for or with
a priority date prior to December 31, 1992, have either lapsed, expired or
otherwise terminated. Pursuant to the Assignment Agreement, Alcan assigned to
the Company all of its rights, title and interests in all technology developed,
prior to the date of the Assignment Agreement, by or on behalf of Alcan pursuant
to written contracts between Alcan and the Company.
The Assignment Agreement further provides that Unique shall pay to Alcan
royalties on revenue derived from the manufacture and sale of products or
processes embodying PM technology subject to reduction for patent expense
offsets, if any.
The Company has agreed to diligently prosecute its patents in the United States,
Canada, the European Patent Office countries and such other countries as may be
agreed upon by the parties. For so long as Alcan beneficially owns at least
five percent of the Company's common stock, it shall be obligated to pay one-
half of the patent application and maintenance fees (including reasonable
attorney's fees related thereto) associated with the PM technology in an
amount not to exceed the aggregate amount of royalty revenue derived from the PM
technology during the year. Each party has the right, but not the obligation,
to bring legal action against third party infringements.
Manufacturing
To date, the Company has manufactured all of its products at its facility in
Golden, Colorado. The Company anticipates investing in manufacturing equipment
to further develop the manufacturing capacity at this facility. If the Company
is successful in marketing its products, the Company will be required to deliver
large volumes of quality products or components to its customers on a timely
basis at reasonable costs to the Company. The Company has no experience in
delivering large volumes of its products and does not currently have the
capacity to meet high volume production requirements, although the Company
believes additional manufacturing space and equipment is readily available and
that the Company will be able to hire talented personnel with experience in
manufacturing hardware and software products.
Backlog
At October 31, 1995, the Company had unperformed service contracts from
customers which will provide payments to the Company upon completion aggregating
approximately $637,000. All such contracts are subject to amendment,
modification or cancellation.
In addition, the Company had an order backlog for motors and electronic controls
at October 31, 1995, with an aggregate sales value of $14,000.
Customers and Suppliers
A significant portion of the Company's revenue for the fiscal year ended October
31, 1995, was derived from three customers. Revenue of $3,258,097 or 81 percent
of contract services revenue was derived from these customers.
Principal raw materials purchased by the Company include iron, steel, copper
wire, neodymium boron iron alloy, fiberglass and epoxy resins. All of the above
items are available from several suppliers and the Company generally relies on
more than one for each item. Principal purchased products include power
electronic switching devices and magnet material which are available from
several suppliers.
US Government Contracts
For the year ended October 31, 1995, $2,478,350 or 62 percent of the Company's
contract service revenue was derived from contracts with agencies of the U.S.
Government and from subcontracts with U.S. Government prime contractors.
Substantially, all of the Company's business with the U.S. Government in fiscal
1995 was performed under cost plus fixed fee contracts which provide for
reimbursement of costs, to the extent allocable and allowable under applicable
regulations, and payment of a fee. The Company's contract with Ford and the
U.S. Government provides 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. On firm fixed price contracts, the Company
can incur an actual loss in the performance thereof if unreimbursable costs
exceed the fixed fee. All U.S. Government contracts with the Company are
subject to modification or cancellation at the convenience of the Government.
Employees
As of October 31, 1995, the Company had 33 full-time employees. The Company
entered into employment contacts with its four executive officers which expire
in December 1996. 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 and
technicians if so required to meet expanded research and development activities.
ITEM 2. PROPERTIES
Facilities
The Company leases a 40,000 square foot office/laboratory/warehouse building in
Golden, Colorado, from a limited liability company of which the Company and an
investor are equal owners. The Company has entered into a ten-year lease of the
building at $21,667 per month with an option for an additional five years at the
then market rate. The Company is required to pay all taxes, maintenance and
insurance. The Company currently subleases 10,000 square feet of this space at
a lease rate of $7,001 per month.
The Company owns a ten-acre unimproved tract near Castle Rock, Colorado. The
Company also owns the basic tools and equipment, including computer hardware and
software, necessary for the conduct of its limited production, research and
development and vehicle prototyping activities.
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 fourth quarter of fiscal 1995.
ITEM 5. MARKET PRICE OF COMMON STOCK
Since May 21, 1993, the Company's common stock has been traded on the American
Stock Exchange (Primary List). From March 18, 1992, to May 21, 1993, the
Company's common stock traded on the American Stock Exchange (Emerging Company
Marketplace). In addition, the Company's common stock has traded on the Boston
Stock Exchange since October 1991. The high and low closing prices, by fiscal
quarter, as reported by the American Stock Exchange for the last three years are
as follows:
1995 High Low
Fourth Quarter . . . . . . . . . . . . . . $5.38 $3.63
Third Quarter. . . . . . . . . . . . . . . $5.56 $3.83
Second Quarter . . . . . . . . . . . . . . $5.63 $3.75
First Quarter. . . . . . . . . . . . . . . $5.75 $4.75
1994
Fourth Quarter . . . . . . . . . . . . . . $7.00 $4.88
Third Quarter. . . . . . . . . . . . . . . $6.88 $4.88
Second Quarter . . . . . . . . . . . . . . $7.88 $5.75
First Quarter. . . . . . . . . . . . . . . $8.63 $7.00
1993
Fourth Quarter . . . . . . . . . . . . . . $8.88 $5.50
Third Quarter. . . . . . . . . . . . . . . $7.00 $5.63
Second Quarter . . . . . . . . . . . . . . $7.88 $5.88
First Quarter. . . . . . . . . . . . . . . $9.13 $4.00
On January 24, 1996, the closing price of the common stock as reported on the
American Stock Exchange was $3.69 per share and there were 924 holders of record
of the 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
1995 1994 1993 1992 1991
Contract services
revenue $ 4,011,951 1,643,203 1,461,568 2,306,070 3,093,117
Product sales $ 701,700 708,917 695,300 468,508 324,798
Operating loss $(1,154,338) (3,367,873) (2,446,574) (2,240,170) (671,034)
Net loss $(1,330,433) (3,395,356) (2,473,804) (2,217,207) (606,735)
Net loss per
common share $ (.13) (.35) (.28) (.33) (.13)
Total assets $ 7,678,599 5,903,551 7,791,826 4,700,507 3,301,187
Long-term
obligations $ 807,003 886,996 921,758 2,161,376 -0-
Cash dividend
declared per
common share $ -0- -0- -0- -0- -0-
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Financial Condition
The Company experienced growth in its contract services business and as a result
reported increased revenue and lower levels of operating losses for fiscal 1995.
The growth in contract services revenue was primarily attributable to the
Company's participation in the U.S. Department of Energy-sponsored Hybrid
Propulsion System Development Program with Ford Motor Company.
During the second half of fiscal 1995, the Company completed an offering of its
common stock under Regulation S. Proceeds to the Company net of offering
expenses amounted to $1,950,554. As a result, the Company's cash balances at
fiscal 1995 year end improved compared to the prior fiscal year end balances.
At October 31, 1995, cash on hand and certificates of deposit were $2,115,499
compared to $1,620,115 at October 31, 1994. Working capital (current assets
minus current liabilities) declined to $1,193,000 versus $2,061,612 reflecting
short-term borrowings to meet the Company's capital contributions to Taiwan UQM.
In fiscal 1996, the Company intends to launch expanded manufacturing operations
at its Golden, Colorado facility, continue the development of the Ethos 3 EV
demonstration vehicle in collaboration with Pininfarina and make additional
investments in its joint venture with KYMCO. The Company does not currently
possess the financial resources to fully fund these activities. See "Liquidity
and Capital Resources" below.
Accounts receivable declined to $337,849 at October 31, 1995 compared to
$405,403 at the end of fiscal 1994 reflecting accelerated collections on
engineering contracts through the utilization of progress payment provisions on
substantially all of the Company's contracts.
Costs and estimated earnings on uncompleted contracts declined $93,669 to
$262,414 at fiscal 1995 year end from the fiscal 1994 year end level of
$356,083. This decline was due to accelerated billing under the progress payment
provisions of the Company's contracts and lower levels of sponsored development
activities for Ford Motor Company during the fourth quarter of fiscal 1995.
Inventories declined to $404,701 at fiscal 1995 year end compared to the prior
year end level of $475,151. Raw material and work in process inventories
declined modestly while finished products inventories accounted for $46,688 of
the decrease. The decline in finished goods inventories is attributable to
lower stocking levels of product inventories.
Prepaid expenses were $35,397 at October 31, 1995, a decrease of $29,280 from
the fiscal 1994 year end level. The decrease is due to prepayments of trademark
application costs and construction costs during fiscal 1994, which were not of
a recurring nature.
The Company invested $440,079 for the acquisition of property and equipment
during fiscal 1995. Of this amount, $135,000 was expended for the acquisition
of the hybrid electric Orion II transit bus which was collaboratively developed
by the Company and a funding consortium of companies. Following its acquisition,
the bus was leased to NYSERDA and placed in service with various transit
operators throughout the State of New York. The Company expects to invest
additional amounts of capital for machinery and equipment in fiscal 1996
coincident to the launch of volume manufacturing operations. See also
"Liquidity and Capital Resources" below.
Patent and trademark costs, net of accumulated amortization, increased $56,270
over the prior year level reflecting patent application costs associated with
technology acquired from Everton Developments, Ltd. and trademark application
costs arising from the registration of the mark UQM in the United States and
various industrial countries around the world.
Other assets decreased to $27,831 at October 31, 1995 from $46,235 due to the
sale of marketable securities previously held for investment.
Accounts payable declined $132,831 to $83,859 at the end of fiscal 1995 from
$216,690 at the end of fiscal 1994 due to the acceleration of payments to
vendors on commercial trade accounts and an overall reduction in the Company's
operating cost base during the fourth quarter.
Other current liabilities declined to $464,186 at October 31, 1995, from
$532,058 at October 31, 1994. The decrease is generally due to lower levels of
accrued legal and accounting fees ($54,643) and lower levels of accrued payroll,
consulting, personal property and real estate taxes ($102,793) which were
partially offset by an increase in accrued interest expense($86,713) arising
from borrowings from KYMCO.
Note payable increased to $1,403,493 at October 31, 1995 reflecting amounts due
to KYMCO pursuant to a waiver and option agreement. Pursuant to the agreement
KYMCO will fund the Company's capital call obligations to Taiwan UQM under the
joint venture agreement between the Company, KYMCO and TLT arising prior to
December 31, 1995.
Billings in excess of costs and estimated earnings on uncompleted contracts
decreased to zero at fiscal 1995 year end from $137,247 at the end of fiscal
1994. At the end of fiscal 1995, no customers were billed in advance of the
performance of the associated work on sponsored development programs.
Current portion of long-term debt rose $41,425 to $81,525 at October 31, 1995,
due to increased levels of debt associated with lease financing activities
conducted by the Company's wholly owned subsidiary UQM Leasing, Inc.
Long-term debt declined $79,993 during fiscal 1995 due to scheduled principal
payments and a principal prepayment of $70,000 on the mortgage debt associated
with the Company's facilities.
Common stock and additional paid-in capital increased to $105,720 and
$18,887,886 at October 31, 1995, respectively, compared to $99,255 and
$16,790,995 at October 31, 1994. The increase is primarily attributable to a
sale of the Company's common stock and the acquisition of common stock upon the
exercise of stock options by employees and consultants which resulted in
aggregate cash proceeds to the Company, net of expenses, of $2,028,700.
Results of Operations
Operations for the year ended October 31, 1995 resulted in a net loss of
$1,330,433 or $0.13 per share compared to a net loss of $3,395,356 or $0.35 per
share for the year ended October 31, 1994, and a net loss of $2,473,804 or $0.28
per share for the year ended October 31, 1993.
Revenue derived from contract services for fiscal 1995 rose over two-fold to
$4,011,951 from the fiscal 1994 level of $1,643,203 and the fiscal 1993 level of
$1,461,568. Sales of UQM products remained flat in fiscal 1995 at $701,700
compared to the fiscal 1994 and 1993 levels of $708,917 and $695,300,
respectively. The increase in revenue from contract services is primarily
attributable to U.S. Department of Energy-sponsored work performed for Ford
Motor Company. During the fourth quarter of fiscal 1995, the Company, in
consultation with Ford, reduced its cost-share participation in the program.
The flywheel development activity, which constitutes the only ongoing work under
the Ford program, is expected to be completed during the third quarter fiscal
1996. The Company's reduced participation in the Ford program was designed to
lower its cost-share obligations and focus the Company's research and
development activities to areas of nearer rather than longer term application of
developed technologies. Total revenue for the fourth quarter of fiscal 1995
declined to $523,818 compared to total revenues of $1,629,819 for the third
quarter of fiscal 1995 as a result of these decisions. Revenues from the Ford
program constituted 24.1 percent and 36.6 percent of total revenue for the
fourth quarter and fiscal 1995, respectively.
Gross profit margins for fiscal 1995 rose to 31.4 percent versus 14.3 percent
for fiscal 1994 and 15.3 percent in fiscal 1993. The increase in gross profit
margins is primarily attributable to increased absorption of overhead costs
resulting from higher levels of contract services revenue.
Research and development expenditures declined to $1,292,803 for the year ended
October 31, 1995, from $2,088,317 for the year ended October 31, 1994, and
$1,443,631 for the year ended October 31, 1993. The decline is due to revenue
arising from the contract with Ford which offset, in part, internally funded
research activities.
General and administrative costs decreased to $972,410 for fiscal 1995 versus
$1,331,532 and $1,095,420 for fiscal 1994 and 1993, respectively. The decrease
results from lower levels of legal and business development expenditures and
reduced staffing of administrative and marketing functions during fiscal 1995.
Depreciation and amortization expense increased $74,795 during fiscal 1995 to
$346,567 reflecting increased levels of amortization associated with the
issuance of patents covering the Company's proprietary technologies and higher
levels of depreciable assets, generally.
Royalty expense was $23,423 for the year ended October 31, 1995, versus $11,458
and $39,272 for the years ended October 31, 1994 and 1993 respectively. Royalty
expense was lower in fiscal 1994 and 1995 due to completion of an assignment
agreement with Alcan which reduced the Company's royalty obligation.
Liquidity and Capital Resources
The Company's cash balances and liquidity throughout fiscal 1995 were adequate
to meet operating needs. Cash used by operations and for the purchase of
capital assets declined during fiscal 1995 compared to the fiscal 1994 and 1993
levels. Cash flows from financing activities rose during fiscal 1995 compared
to fiscal 1994. This increase is primarily attributable to the completion of an
offering of the Company's common stock under Regulation S. The offering, which
was completed during the fourth quarter of fiscal 1995, resulted in the sale of
581,111 shares of common stock at $3.60 per share. Proceeds to the company, net
of offering expenses, was $1,950,554. Principally as a result of these
activities cash and cash equivalents increased to $1,796,392 at October 31,
1995, compared to $1,201,008 at October 31, 1994. Working capital (current
assets minus current liabilities ) declined to $1,193,000 versus $2,061,612
primarily as a result of short-term borrowings to meet the Company's capital
contributions to Taiwan UQM.
During the fourth quarter of fiscal 1995, the Company established a new business
unit to commercialize low voltage traction drives and reduced its participation
in the Ford research program. As a result, the Company has redirected personnel
and financial resources toward the launch of the Power Products business unit.
Management expects the near term impact of its reduced participation in the Ford
program to result in lower levels of contract services revenue in fiscal 1996
and a corresponding reduction in the cost of those revenues. The launch of the
Power Products business unit is expected to result in operating losses which
will be financed in part from the proceeds of the 1995 offering. Management
believes the Company currently possesses sufficient cash to fund its domestic
operations for a period of at least twelve months. However, additional capital
will be required to fully implement the Company's participation in its Taiwanese
joint venture and commercialization of the Ethos 3 EV.
In January 1996, the Company sold to Invacare Corporation 129,032 shares of the
Company's common stock at a price of $3.88 per share. Net proceeds to the
Company were $500,000, the use of which is restricted principally to certain
design and production activities. Contingent upon the achievement of certain
conditions, Invacare has agreed to make an additional investment in the Company
through the purchase of common stock at market price. The additional investment
will be in the approximate amount of 50 percent of the mutually agreed
investments to be made by the Company for production tooling, equipment and
product launching costs required to be made by the Company for the manufacture
of products to be sold to Invacare. The Company does not currently possess the
financial resources to fund its 50 percent share of the costs to launch
production for Invacare; however management believes that it can acquire the
capital required to meet its obligations pursuant to the agreement through
commercial debt or lease financing, although it currently has no commitment for
such financing.
On January 29, 1994 the Company, KYMCO and TLT entered into a joint venture
agreement providing for the formation, funding and operation of Taiwan UQM, a
company organized under the laws of the Republic of China. Taiwan UQM was
incorporated in April 1995.
Under the initial provisions of the joint venture agreement the Company
purchased 39 percent of the initial capital of Taiwan UQM for $45,082 and agreed
to invest 39 percent of any additional capital calls. Pursuant to the joint
venture agreement, the venturers are required to invest additional funds in
Taiwan UQM as the board of directors of Taiwan UQM by unanimous vote determines
to be required.
During 1995, the Company was unable to make payments for additional capital call
obligations under the joint venture agreement. The Company, KYMCO and TLT
entered into a waiver and option agreement on June 12, 1995, whereby KYMCO
agreed to first purchase those shares of Taiwan UQM underlying the Company's
additional capital call obligations in the amount of $1,403,493. Under the
waiver and option agreement the Company has the option to repurchase these
shares from KYMCO for the additional capital call amount plus interest at 10
percent per annum.
It is the intent of management to repurchase the shares and maintain the
Company's equity interest in Taiwan UQM at 39 percent. The purchase by KYMCO of
the shares related to the Company's additional capital call obligations has been
accounted for as a financing arrangement. Accordingly, for financial reporting
purposes, as of October 31, 1995, the Company has recorded $1,403,493 as an
addition to its investment in joint venture and as a note payable to joint
venture. The Company does not currently possess the financial resources to meet
this obligation on a timely basis, although the Company intends to do so if
capital becomes available on terms acceptable to the Company. Accordingly, the
Company plans to seek an extension of the May 31, 1996 payment date to December
31, 1996. However, there can be no assurance that such date can be extended, or
that if it is extended, that the Company will then possess the financial
resources to maintain its ownership interest in Taiwan UQM at 39 percent.
Should the Company not meet its obligations under the joint venture agreement
and the waiver and option agreement, Taiwan UQM would nevertheless be obligated
to obtain a royalty-bearing license from the Company in order to gain
manufacturing rights to the Company's proprietary technologies.
The Company may require additional capital beyond that discussed above to
complete its long-term business plan. The Company hopes to meet future capital
requirements through the issuance of equity or debt securities or a combination
of both, although there can be no assurance that such financing can be
arranged. In the event the Company is unwilling or unable to arrange such
financing, management would defer, abandon or modify implementation of the
Company's business plan. In addition, the Company plans to continue to pursue
the commercialization of its proprietary technologies directly, if financing
can be obtained or, if financing cannot be obtained or is deemed to be too
costly, indirectly by means of strategic alliances or licensing arrangements
with leading companies in the field.
New Accounting Standards. Statement of Financial Accounting Standards No. 121,
Accounting for the Impairment of Long-Lived Assets to Be Disposed Of (SFAS 121)
was issued in March 1995 by the Financial Accounting Standards Board. It
requires that long-lived assets and certain identifiable intangibles to be held
and used by an entity be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. SFAS 121 is required to be adopted for fiscal years beginning
after December 15, 1995. Adopting this statement by the Company is not expected
to have a significant effect on the consolidated financial statements.
Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based
Compensation (SFAS 123) was issued by the Financial Accounting Standards Board
in October 1995. SFAS 123 establishes financial accounting and reporting
standards for stock-based employee compensation plans as well as transactions in
which an entity issues its equity instruments to acquire goods or services from
non-employees. This statement defines a fair value based method of accounting
for all of their employee stock compensation plans. However, it also allows an
entity to continue to measure compensation costs for those plans using the
intrinsic value based method of accounting prescribed by APB Opinion No. 25,
Accounting for Stock Issued to Employees. Entities electing to remain with the
accounting in Opinion 25 must make proforma disclosures of net income and, if
presented, earnings per share, as if the fair value based method of accounting
defined by SFAS 123 had been applied. SFAS 123 is applicable to fiscal years
beginning after December 15, 1995. The Company currently accounts for its
equity instruments using the accounting prescribed by Opinion 25. The Company
does not currently expect to adopt the accounting prescribed by SFAS 123;
however, the Company will include the disclosures required by SFAS 123 in future
consolidated financial statements.
ITEM 8. Financial Statements
Independent Auditors' Report
The Board of Directors and Stockholders
Unique Mobility, Inc.:
We have audited the accompanying consolidated balance sheets of Unique Mobility,
Inc. and subsidiaries as of October 31, 1995 and 1994, and the related
consolidated statements of operations, stockholders' equity, and cash flows for
each of the years in the three-year period ended October 31, 1995. These
consolidated financial statements are the responsibility of the Company's
management.
Our responsibility is to express an opinion on these consolidated financial
statements based on our audits.
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 financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Unique Mobility,
Inc. and subsidiaries as of October 31, 1995 and 1994, and the results of their
operations and their cash flows for each of the years in the three-year
period ended October 31, 1995 in conformity with generally accepted accounting
principles.
"KPMG Peat Marwick LLP"
KPMG Peat Marwick LLP
Denver, Colorado
December 22, 1995
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Consolidated Balance Sheets
October 31, 1995 and 1994
Assets 1995 1994
Current assets:
Cash and cash equivalents $ 1,796,392 1,201,008
Certificates of deposit 319,107 419,107
Accounts receivable (notes 5 and 10) 337,849 405,403
Costs and estimated earnings in excess of
billings on uncompleted contracts 262,414 356,083
Inventories 404,701 475,151
Prepaid expenses 35,397 64,677
Other current assets 70,203 66,278
Total current assets 3,226,063 2,987,707
Property and equipment, at cost:
Land (notes 2 and 5) 335,500 335,500
Building (notes 2 and 5) 1,364,500 1,364,500
Molds 102,113 102,113
Transportation equipment 251,175 116,175
Machinery and equipment 1,763,818 1,458,739
3,817,106 3,377,027
Less accumulated depreciation (1,275,530) (942,736)
Net property and equipment 2,541,576 2,434,291
Investment in Taiwan joint venture (note 3) 1,432,735 41,194
Patent and trademark costs, net of
accumulated amortization of $25,491
and $16,995 (note 9) 450,394 394,124
Other assets 27,831 46,235
$ 7,678,599 5,903,551
(Continued)
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Consolidated Balance Sheets, Continued
Liabilities and Stockholders' Equity 1995 1994
Current liabilities:
Accounts payable $ 83,859 216,690
Other current liabilities (note 4) 464,186 532,058
Note payable to Taiwan joint venture
participant (note 3) 1,403,493
Current portion of long-term debt (note 5) 81,525 40,100
Billings in excess of costs and estimated
earnings on uncompleted contracts 137,247
Total current liabilities 2,033,063 926,095
Long-term debt, less current portion (note 5) 807,003 886,996
Total liabilities 2,840,066 1,813,091
Minority interest in consolidated
subsidiary (note 2) 389,065 391,785
Stockholders' equity (notes 7 and 8):
Common stock, $.01 par value, 50,000,000
shares authorized; 10,571,953 and
9,925,545 shares issued 105,720 99,255
Additional paid-in capital 18,887,886 16,790,995
Accumulated deficit (14,426,536) (13,096,103)
4,567,070 3,794,147
Less cost of 37,341 and 31,976 shares
of treasury stock 117,602 95,472
Total stockholders' equity 4,449,468 3,698,675
Commitment (note 3)
$ 7,678,599 5,903,551
See accompanying notes to consolidated financial statements.
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Consolidated Statements of Operations
Years Ended October 31, 1995, 1994 and 1993
1995 1994 1993
Revenue:
Contract services (note 10) $ 4,011,951 1,643,203 1,461,568
Product sales 701,700 708,917 695,300
4,713,651 2,352,120 2,156,868
Operating costs and expenses:
Costs of revenue 3,232,786 2,016,914 1,827,130
Research and development 1,292,803 2,088,317 1,443,631
General and administrative 972,410 1,331,532 1,095,420
Depreciation and amortization 346,567 271,772 197,989
Royalty 23,423 11,458 39,272
5,867,989 5,719,993 4,603,442
Operating loss (1,154,338) (3,367,873) (2,446,574)
Other income (expense):
Minority interest share of earnings of
consolidated subsidiary (64,627) (69,517) (67,810)
Interest income 50,890 98,228 145,783
Interest expense (177,051) (73,813) (105,735)
Equity in loss of Taiwan joint venture (11,952) (3,888)
Other 26,645 21,507 532
Net loss $ (1,330,433) (3,395,356) (2,473,804)
Net loss per common share $(.13) (.35) (.28)
Weighted average number of shares of common
stock outstanding 10,090,778 9,763,391 8,881,643
See accompanying notes to consolidated financial statements.
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
Years Ended October 31, 1995, 1994 and 1993
Number of
common Additional Total
shares common paid-in Accumulated Treasury Stockholders'
issued stock capital deficit stock equity
Balances at October 31, 1992 7,211,784 $ 72,118 8,789,076 (7,226,943) (41,823) 1,592,428
Issuance of common stock, net of offering
costs of $744,923 1,000,000 10,000 4,245,077 4,255,077
Issuance of common stock upon
conversion of debenture and accrued
interest thereon 666,666 6,667 1,193,333 1,200,000
Issuance of common stock upon exercise
of underwriters' overallotment option 150,000 1,500 651,000 652,500
Issuance of common stock upon exercise
of Alcan preemptive right (note 7) 49,675 497 53,661 54,158
Issuance of common stock upon exercise
of underwriter warrants 120,000 1,200 278,400 279,600
Issuance of common stock upon exercise
of employee options 257,637 2,576 324,359 326,935
Issuance of common stock under
employee stock purchase plan 5,623 56 22,299 22,355
Net loss (2,473,804) (2,473,804)
Balances at October 31, 1993 9,461,385 94,614 15,557,205 (9,700,747) (41,823) 5,909,249
Issuance of common stock upon exercise
of Alcan preemptive right (note 7) 111,395 1,114 199,397 200,511
Issuance of common stock upon exercise
of underwriter warrants 20,000 200 46,400 46,600
Issuance of common stock upon exercise
of employee options 325,133 3,251 936,996 (53,649) 886,598
Issuance of common stock for directors'
compensation 6,000 60 42,490 42,550
Issuance of common stock under
employee stock purchase plan 1,632 16 8,507 8,523
Net loss (3,395,356) (3,395,356)
Balances at October 31, 1994 9,925,545 99,255 16,790,995 (13,096,103) (95,472) 3,698,675
Issuance of common stock, net of offering
costs of $141,446 581,111 5,812 1,944,742 1,950,554
Issuance of common stock upon exercise
of employee options 64,786 648 99,628 (22,130) 78,146
Issuance of common stock under
employee stock purchase plan 511 5 2,521 2,526
Issuance of warrants for services 50,000 50,000
Net loss (1,330,433) (1,330,433)
Balances at October 31, 1995 10,571,953 $ 105,720 18,887,886 (14,426,536) (117,602) 4,449,468
See accompanying notes to consolidated financial statements.
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years Ended October 31, 1995, 1994 and 1993
1995 1994 1993
Cash flows from operating activities:
Net loss $(1,330,433) (3,395,356) (2,473,804)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation and amortization 346,567 271,772 197,989
Minority interest share of earnings of
consolidated subsidiary, net of cash
distributions (2,720) 8,904 7,810
Noncash compensation expense for
common stock and warrants issued for
services 12,500 80,050
Equity in loss of Taiwan joint venture 11,952 3,888
Gain on sale of investments (3,534)
Change in operating assets and liabilities:
Accounts receivable and costs and
estimated earnings in excess of
billings on uncompleted contracts 161,223 28,995 (329,791)
Inventories 70,450 52,215 (259,515)
Prepaid expenses and other current
assets 25,355 9,933 (47,923)
Billings in excess of costs and estimated
earnings on uncompleted contracts (137,247) 74,060 63,187
Accounts payable and other current
liabilities (163,203) 238,712 2,715
Other (466) 35,919 (8,513)
Net cash used by operating activities (1,009,556) (2,590,908) (2,847,845)
Cash used by investing activities:
Acquisition of property and equipment (440,079) (413,907) (373,482)
Increase in patent and trademark costs (64,766) (131,652) (129,644)
Investment in Taiwan joint venture (45,082)
Purchase of certificates of deposit and
other investments (423,447)
Proceeds from sale of certificates of
deposit and other investments 117,127 314,479
Net cash used by investing activities (387,718) (590,641) (612,094)
(Continued)
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows, Continued
1995 1994 1993
Cash flows provided by financing activities:
Proceeds from borrowings $ 212,337
Repayment of debt (250,905) (36,077) (36,827)
Proceeds from sale of common stock, net 1,950,554 4,255,077
Issuance of common stock upon exercise of
underwriters' over allotment option 652,500
Issuance of common stock upon exercise
of employee options 78,146 886,598 326,935
Issuance of common stock upon exercise of
underwriter warrants 46,600 279,600
Issuance of common stock upon exercise of
Alcan preemptive right 200,511 54,158
Issuance of common stock under employee stock
purchase plan 2,526 8,523 22,355
Net cash provided by financing
activities 1,992,658 1,106,155 5,553,798
Increase (decrease) in cash and cash
equivalents 595,384 (2,075,394) 2,093,859
Cash and cash equivalents at beginning of year 1,201,008 3,276,402 1,182,543
Cash and cash equivalents at end of year $ 1,796,392 1,201,008 3,276,402
Supplemental disclosures to the consolidated statements of cash flows:
Cash paid for interest was $89,133, $72,638 and $113,735 in 1995, 1994 and
1993, respectively.
In 1995, the Company financed its additional investment in the Taiwan
joint venture through the issuance of a note payable in the amount of
$1,403,493 (see note 3).
In accordance with the provisions of the Company's stock option plans, the
Company accepts as payment of the exercise price, shares of the
Company's common stock held by the option holder prior to the date of
the option exercise. The shares received are recorded at cost as
treasury stock.
In fiscal 1995 and 1994 the Company issued 32,130 and 24,364 shares of
common stock with an exercise price of $22,130 and $53,649,
respectively, for which the Company received 5,365 and 6,813 shares
of common stock.
During 1993, the Company issued 666,666 shares of common stock upon the
conversion of its 8% secured convertible term notes in the amount of
$1,200,000.
See accompanying notes to consolidated financial statements.
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
October 31, 1994 and 1993
(1) Summary of Significant Accounting Policies
(a) Principles and Consolidation
The consolidated financial statements include the accounts of
Unique Mobility, Inc. and those of all majority-owned or controlled
subsidiaries (the "Company"). All significant intercompany
accounts and transactions have been eliminated in consolidation.
(b) Contract Services
Revenue relating to service contracts, the terms of which is one
year or less, is recognized using the completed-contract method.
Revenue relating to long-term fixed price contracts ios recognized
using the percentage of completion method. Revenue relating to
cost-plus type contracts is recognized as costs are incurred and
billed to the customer.
(c) Cash, Cash Equivalents and Certificates of Deposit
The Company considers cash on hand and investments with original
maturities of three months or less to be cash equivalents.
Certificates of deposit are carried at cost. The certificate of
deposit held at October 31, 1995 matures in April 1996.
(d) Investment in Taiwan Joint Venture
The Company's investment in a joint venture located in Taiwan is
accounted for under the equity method of accounting. Under this
method, the investment, originally recorded at cost, is adjusted
to recognize the Company's share of the net earnings or losses of
the joint venture as they occur. Income or loss recognition is
limited to the extent of the Company's investment in, advances
to and guarantees of the joint venture.
(e) Inventories
Inventories are stated at the lower of cost or market.
Cost is determined by the first-in, first-out method. Inventories
at October 31, consist of:
1995 1994
Raw materials $ 247,225 263,526
Work in process 31,525 38,986
Finished products 125,951 172,639
$ 404,701 475,151
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(1) Summary of Significant Accounting Policies (continued)
(f) 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 the building which is depreciated over 31 years. Maintenance
and repairs are charged to expense as incurred.
(g) 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 maintenance of
patents issued. 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.
(h) 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.
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. Under Statement 109, 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.
(i) Research and Development
Costs of researching and developing new technology or
significantly altering existing technology are charged to
operations as incurred.
(j) Loss Per Common Share
Loss per common share is based on the weighted average number of
shares of common stock outstanding during each year. Common
stock equivalents were not included in the computations because
their effect was anti-dilutive.
(k) Reclassifications
Certain prior year amounts have been reclassified to conform with
the October 31, 1995 presentation.
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(2) 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 its
management responsibilities and 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.
(3) Investment in Taiwan Joint Venture
On January 29, 1994 the Company, Kwang Yang Motor Co. Ltd.
(KYMCO), and Turn Luckily Technology Co. Ltd. (TLT), entered
into a joint venture agreement (the Joint Venture Agreement)
providing for the formation, funding, and operation of Taiwan
UQM Electric Company, Ltd., a company organized under the laws
of the Republic of China (Taiwan UQM). Taiwan UQM was
incorporated in April 1995.
Under the initial provisions of the Joint Venture Agreement for
$45,082, the Company purchased 39% of the initial equity capital
of Taiwan UQM in 1994 and agreed to invest 39% of any additional
capital calls. Pursuant to the Joint Venture Agreement, the
venturers are required to invest additional funds in Taiwan UQM,
as the board of directors of Taiwan UQM by unanimous vote
determines to be required.
During 1995, the Company was unable to make payments for
additional capital call obligations under the Joint Venture
Agreement. The Company, KYMCO and TLT entered into a Waiver and
Option Agreement (the Option Agreement) on June 12, 1995,
whereby KYMCO agreed to first purchase those shares of Taiwan
UQM underlying the Company's additional capital call obligations
in the amount of $1,403,493. Under the Option Agreement, the
Company has the option to repurchase these shares from KYMCO
for the additional capital call amount, plus interest at 10%
per annum. It is the intent of management of the Company to
repurchase the shares and maintain the Company's equity interest
in Taiwan UQM at 39%. The purchase by KYMCO of the shares
related to the Company's additional capital call obligations has
been accounted for as a financing arrangement. Accordingly, for
financial reporting purposes, as of October 31, 1995, the
Company has recorded $1,403,493 as an addition to its
investment in joint venture and as a note payable to joint
venture.
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(4) Other Current Liabilities
Other current liabilities at October 31, consist of:
1995 1994
Accrued subcontractor expense $ 174,781 150,000
Accrued interest 93,698 6,985
Accrued legal and accounting fees 48,611 103,254
Accrued payroll, consulting,
personal property and real
estate taxes 44,882 147,675
Other 102,214 124,144
$ 464,186 532,058
(5) Long-term Debt
Long-term debt at October 31, consists of:
1995 1994
Note payable to bank, in monthly
installments with interest at the
bank's prime rate plus 1.0% (9.75%
at October 31, 1995); matures
October 2007; secured by land and
building $ 829,714 927,096
Note payable to bank, in monthly
installments with interest at 12%;
matures November 1997; secured
by all of the Company's accounts
at the bank and all accounts
receivable and certain equipment 58,814
Total long-term debt 888,528 927,096
Less current portio 81,525 40,100
Long-term debt, less current portion $ 807,003 886,996
Annual maturities of long-term debt for each of the next five fiscal
years and thereafter are as follows:
1996 $ 81,525
1997 57,676
1998 46,560
1999 51,308
2000 56,541
Thereafter 594,918
$ 888,528
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(6) Income Taxes
At October 31, 1995, temporary differences that give rise to
deferred tax assets and deferred tax liabilities are principally
made up of net operating loss carryforwards and research and
development credit carryforwards for income tax purposes. Deferred
tax assets attributable to net operating loss carryforwards and
other tax credits are offset by a valuation allowance.
At October 31, 1995, the Company had net operating loss
carryforwards for income tax purposes aggregating approximately
$13.8 million. Approximately $1.2 million of the net ope rating
loss carryforwards is attributable to stock options, the benefit of
which will be credited to additional paid-in capital if realized.
Net operating loss carryforwards are subject to certain rules
limiting their annual usage. These carryforwards ex pire between
1998 and 2010.
(7) Stockholders' Equity
Alcan Aluminum Limited (Alcan) and certain affiliates of Advent
International Corporation (Advent) and Techno-Venture U.S.A., Inc.
(Techno), significant stockholders, have preemptive rights to
acquire 16.7%, 13.1% and 2.1%, respectively, of the Company's
shares of common stock offered in any offering for so long as they
hold any shares of the Company's common stock.
Additionally, Alcan has the right of first refusal to purchase any
private placement eq uity securities to be issued or sold to third
parties if such issuance would cause such parties to become the
beneficial owner of more than 5% of any class of the Company's
equity securities. Separately, the Company's Chairman, who holds
or has the right to acquire 805,512 shares of the Company's common
stock, has granted Alcan a right of first refusal to purchase any
shares to be sold or transferred by the Chairman in any public or
private sale.
(8) Common Stock Options and Warrants
The Company has reserved 4,104,000 shares of common stock for key
employees, consultants, and key suppliers under its Incentive and
Non-Qualified Option plans. Options became exercisable as
determined at the date of grant by the Board of Directors and
expire within 10 years from the date of grant. The maximum number
of shares that may be granted to any eligible employee during the
term of the Plan is 500,000 shares. The options require holders to
abide by certain Company policies on the trading of Company's
common stock.
The following table summarizes activity under the plans:
Shares under Per share
option option price
Outstanding at October 31, 1992 1,447,770 $ .375 - 4.25
Granted 612,000 6.25 - 8.00
Exercised (257,637) .375 - 3.50
Forfeited (89,268) 3.50 - 6.25
(Continued)
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(8) Common Stock Options and Warrants (continued)
Shares under Per share
option option price
Outstanding at October 31, 1993 1,712,865 $ .375 - 8.00
Granted 618,333 5.00 - 8.13
Exercised (325,133) .375 - 3.50
Forfeited (91,532) 3.50 - 6.88
Outstanding at October 31, 1994 1,914,533 .50 - 8.13
Granted 100,000 5.00
Exercised (64,786) .50 - 3.50
Forfeited (97,515) 3.50 - 6.88
Outstanding at October 31, 1995 1,852,232 .50 - 8.13
Exercisable at October 31, 1995 1,488,644
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 250,000 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 grant date.
Option prices are equal to the fair market value of common shares at the
date of grant.
The following table summarizes activity under the plan:
Shares under Per share
option exercise price
Outstanding at October 31, 1993
Granted 48,000 $ 5.38 - 6.25
Outstanding at October 31, 1994 48,000 5.38 - 6.25
Granted 61,333 5.00 - 5.13
Outstanding at October 31, 1995 109,333 5.00 - 6.25
At October 31, 1995 options for 16,000 shares were exercisable.
In connection with a 1991 common stock issuance, the underwriters were
issued warrants to acquire 140,000 shares of the Company's common stock at
$2.32 per share. During 1993, the underwriters exercised warrants for
120,000 shares of the Company's common stock. During 1994, the
underwriters exercised the remaining warrants and were issued 20,000
shares of the Company's common stock.
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
In connection with a 1992 common stock issuance, the underwriters
were issued warrants to acquire 100,000 shares of the Company's
common stock at $6.00 per share. These warrants expired
unexercised on December 2, 1995.
In connection with the original issuance of certain subordinated
convertible term notes to Advent and Techno, the Company granted
Advent and Techno warrants to acquire 790,000 shares of the
Company's common stock at the lower of $2.40 per share or the
market price of the common stock averaged over the 30 trading days
immediately preceding the date of exercise. The warrants expire
August 1997, and allow for a cashless exercise of the warrants into
common shares based on the spread between the market price of the
common stock on the date of exercise and the $2.40 exercise price.
All of these warrants remain outstanding at October 31, 1995.
The Company has reserved 300,000 shares of common stock for
issuance pursuant to a warrant agreement with an investment banking
company. Warrants to acquire 200,000 shares of common stock vested
on January 20, 1994 and the remaining 100,000 shares vested on
January 20,1995. The warrants were exercisable for a period of
five years, expiring on January 19, 1999, at a price of $7.63 per
share. Further, the warrants were redeemable on a one-time basis
only through June 30, 1994, for a like number of warrants, at the
then current fair market value of the Company's common stock with
otherwise identical terms. On April 18, 1994, the warrants were
redeemed in accordance with the above provision for a like number
of warrants which are exercisable at a price of $6.00 per share.
The warrants contain transfer restrictions and provisions for the
adjustment of the exercise price and the number and type of
securities issuable upon exercise based on the occurrence of
certain events. All of these warrants remain outstanding at
October 31, 1995.
In connection with the 1995 common stock issuance, the placement
agent was issued warrants expiring July 21, 1998, to acquire
150,000 shares of the Company's common stock at $5.75 per share.
All of these warrants remain outstanding at October 31, 1995.
(9) Alcan Agreements
The Company had previously entered into agreements with Alcan.
Under terms of the agreements, the Company's then existing motor
technology and technology resulting from development projects for
Alcan were cross-licensed between Alcan and the Company.
Royalties from the manufacture and sale of licensed products and a
portion of royalties received from the sub-licensing of technology
to third parties were payable by the licensing party to the other
if the technology was commercialized. During 1994, the Company and
Alcan executed another agreement, in which Alcan assigned to the
Company all of its rights, title and interests in all technology
developed under the original agreements between Alcan and the
Company. The 1994 agreement further provides that the Company
shall pay to Alcan royalties on revenue derived from the
manufacture and sale of products or processes embodying the
related technology. In addition, subject to certain conditions,
Alcan has agreed to reimburse the Company for 50% of its patent
application and maintenance expenditures, up to an amount not to
exceed the annual royalties from the Company. The Company paid
$39,272 in 1993 pursuant to the original agreements.
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
During 1995 and 1994, the Company recorded royalty expense of
$23,423 and $11,458, respectively, all of which was applied to the
reduction of patent application and maintenance expenditures.
(10) Significant Customers
The Company has historically derived significant contract services
revenue from a few key customers. During the year ended
October 31, 1995, the Company derived $3,258,097 of contract
services revenue from three customers, representing 81% of revenue
earned from contract services. Accounts receivable from these
three customers also represented 32% of total accounts receivable
at October 31, 1995. In the years ended October 31, 1994 and 1993,
the Company derived $966,831 and $693,592, respectively, of
contract services revenue from three and two customers,
respectively, representing 59% and 47%, respectively, of revenue
earned from contract services. These two customers also
represented 39% and 43% of total accounts receivable at October 31,
1994 and 1993, respectively.
(11) 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
including the Company's common stock. The Company matches
participant contributions on a dollar-for-dollar basis on the first
5% of the participant's contributions and 25% of participant
contributions in excess of 5%, subject to certain limitations.
These contributions vest ratably over a three year period.
Matching contributions to the Plan by the Company were $98,441,
$95,257 and $90,457 for the years ended October 31, 1995, 1994 and
1993, respectively.
Stock Purchase Plan
The Company has established a stock purchase plan which allows
eligible employees to purchase, through payroll deductions, shares
of the Company'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 October 31, 1995, 1994 and 1993, the Company issued 511,
1,632 and 5,623 shares of common stock, respectively, under the
stock purchase plan.
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(12) Subsequent Event - Stock Purchase Agreement
On December 7, 1995, the Company entered into a Stock Purchase
Agreement with Invacare Corporation (Invacare). Pursuant to the
Stock Purchase Agreement, Invacare has purchased 129,032 shares of
the Company's common stock at $3.88 per share for a total capital
contribution to the Company of $500,000. The use of these proceeds
is restricted principally to certain design and production
activities. Contingent upon the execution of a mutually acceptable
Supply Agreement with respect to the sale of products by the
Company to Invacare, Invacare has further agreed to make a second
capital contribution at such time as the production engineering of
the initial product for Invacare is completed, which event is
scheduled to occur on or before April 30, 1996. The second capital
contribution will be in the approximate amount of 50% of the
mutually agreed investments to be made by the Company for the
production tooling, capital equipment and product launching costs
required to be made by the Company for the manufacture of products
to be sold to Invacare.
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 Shareholders to be
held on March 20, 1996, to be filed on or about February 6, 1996, pursuant
to Regulation 14A.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) 1. Financial Statements:
Independent Auditors' Report.
Consolidated Balance Sheets, October 31, 1995 and 1994.
Consolidated Statements of Operations for the years ended
October 31, 1995, 1994 and 1993.
Consolidated Statements of Stockholders' Equity for the years
ended October 31, 1995, 1994 and 1993.
Consolidated Statements of Cash Flows for the years ended
October 31, 1995, 1994 and 1993.
Notes to Consolidated Financial Statements.
2. Financial Statement Schedules:
None.
(b) Reports on Form 8-K:
None.
(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 Non-Qualified Stock Option Agreement with Simon Mencher. Reference is
made to Exhibit 10.12 of the Company's Registration Statement on Form S-2
(No. 33-53376) which is incorporated herein by reference.
10.4 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.
10.5 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.
10.6 401(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.
10.7 Note and Warrant Purchase Agreement dated March 25, 1992 between Unique
Mobility, Inc. and affiliates of Advent International Corporation and
Techno-Venture U.S.A., Inc. Reference is made to Exhibit 19.1 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.
10.8 Warrant Agreements dated March 25, 1992 between Unique Mobility, Inc. and
affiliates of Advent International Corporation and Techno-Venture U.S.A.,
Inc. Reference is made to Exhibit 19.3 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.
10.9 Stock Restriction Agreement dated March 25, 1992 between Ray A. Geddes and
affiliates of Advent International Corporation and Techno-Venture U.S.A.,
Inc. Reference is made to Exhibit 19.5 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.
10.10 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.
10.11 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.
10.12 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.
10.13 Amended Warrant Agreements between Unique Mobility, Inc. and affiliates of
Advent International Corporation and Techno-Venture U.S.A., Inc.
Reference is made to exhibits 10.1 through 10.7 to the Company's Quarterly
Report on Form 10-Q for the quarter ended April 30, 1993, (No. 0-9146)
which is incorporated herein by reference.
10.14 Registration agreement between Unique Mobility, Inc. and affiliates of
Advent International Corporation and Techno-Venture U.S.A., Inc.
Reference is made to exhibit 10.8 to the Company's Quarterly Report on
Form 10-Q for the quarter ended April 30, 1993, which is incorporated
herein by reference.
10.15 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.
10.16 Warrant 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.
10.17 Assignment 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.
10.18 Amendment 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.
10.19 Employment Agreement with Ray A. Geddes. Reference is made to Exhibit
10.1 to the Company's Quarter Report on Form 10-Q for the quarter ended
July 31, 1994 (No. 0-9146) which is incorporated herein by reference.
10.20 Non-Qualified Stock Option Agreement with Ray A. Geddes. Reference is
made to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for
the quarter ended July 31, 1994 (No. 0-9146) which is incorporated herein
by reference.
10.21 Incentive Stock Option Agreement with Ray A. Geddes. Reference is made to
Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the
quarter ended July 31, 1994 (No. 0-9146) which is incorporated herein by
reference.
10.22 Employment Agreement with William G. Rankin. Reference is made to Exhibit
10.4 to the Company's Quarterly Report on Form 10-Q for the quarter ended
July 31, 1994 (No. 0-9146) which is incorporated herein by reference.
10.23 Non-Qualified Stock Option Agreement with William G. Rankin. Reference is
made to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q for
the quarter ended July 31, 1994 (No. 0-9146) which is incorporated herein
by reference.
10.24 Incentive Stock Option Agreement with William G. Rankin. Reference is
made to Exhibit 10.6 to the Company's Quarterly Report on Form 10-Q for
the quarter ended July 31, 1994 (No. 0-9146) which is incorporated herein
by reference.
10.25 Employment Agreement with Donald A. French. Reference is made to Exhibit
10.7 to the Company's Quarterly Report on Form 10-Q for the quarter ended
July 31, 1994 (No. 0-9146) which is incorporated herein by reference.
10.26 Non-Qualified Stock Option Agreement with Donald A. French. Reference is
made to Exhibit 10.8 to the Company's Quarterly Report on Form 10-Q for
the quarter ended July 31, 1994 (No. 0-9146) which is incorporated herein
by reference.
10.27 Incentive Stock Option Agreement with Donald A. French. Reference is made
to Exhibit 10.9 to the Company's Quarterly Report on Form 10-Q for the
quarter ended July 31, 1994 (No. 0-9146) which is incorporated herein by
reference.
10.28 Employment Agreement with Craig S. Cambier. Reference is made to Exhibit
10.10 to the Company's Quarterly Report on Form 10-Q for the quarter ended
July 31, 1994 (No. 0-9146) which is incorporated herein by reference.
10.29 Non-Qualified Stock Option Agreement with Craig S. Cambier. Reference is
made to Exhibit 10.11 to the Company's Quarterly Report on Form 10-Q for
the quarter ended July 31, 1994 (No. 0-9146) which is incorporated herein
by reference.
10.30 Incentive Stock Option Agreement with Craig S. Cambier. Reference is made
to Exhibit 10.12 to the Company's Quarterly Report on Form 10-Q for the
quarter ended July 31, 1994 (No. 0-9146) which is incorporated herein by
reference.
10.31 Unique Mobility, Inc. Stock Option Plan for Non-Employee Directors.
Reference is made to Exhibit 10.13 to the Company's Quarterly Report on
Form 10-Q for the quarter ended July 31, 1994 (No. 0-9146) which is
incorporated herein by reference.
10.32 Non-Qualified Stock Option Agreement with Francis S. M. Hodsoll.
Reference is made to Exhibit 10.16 to the Company's Quarterly Report on
Form 10-Q for the quarter ended July 31, 1994 (No. 0-9146) which is
incorporated herein by reference.
10.33 Amendment to the 401 (k) Savings Pan of Unique Mobility, Inc. dated
January 18, 1995. Reference is made to Exhibit 10.1 to 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.
10.34 Amendment 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.
10.35 Waiver and Option Agreement By and Between Unique Mobility, Inc, Kwang
Yang Motor Co., Ltd. and Turn-Luckily Technology Co., Ltd. dated July 31,
1995. Reference is made to Exhibit 10.1 in the Company's Quarterly Report
on Form 10-Q for the Quarter ended July 31, 1995 (No. 0-9146) which is
incorporated herein by reference.
10.36 Stock Purchase Agreement by and among Unique Mobility, Inc. and Invacare
Corporation dated December 7, 1995.
21.1 Subsidiaries of the Registrant.
24.1 Consent of KPMG Peat Marwick LLP.
(d) Financial Statement Schedules
None.
SIGNATURE
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 January, 1996.
UNIQUE MOBILITY, INC.,
a Colorado Corporation
By: "Ray A. Geddes"
Ray A. Geddes, President
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 Directors
and President (Principal Executive
"Ray A. Geddes" Officer) January 26, 1996
Ray A. Geddes
Treasurer and Controller
(Principal Financial and
"Donald A. French" Accounting Officer) January 26,1996
Donald A. French
"William G. Rankin" Executive Vice President-Operations January 26, 1996
William G. Rankin and Director
"Francis S.M. Hodsoll" Director January 25, 1995
Francis S.M. Hodsoll
"H.J. Young" Director January 26, 1995
H.J. Young
"Michel A. Bell" Director January 25, 1996
Michel A. Bell
"J.B. Richey" Director January 25, 1996
J B. Richey