-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, H7qLGjN+0TItX9rYqh4S5OzeLJtxg/Wp8fkZJokd4oACT7bmZo4OpGlwl6acvz1G LN0K4EIJXt8XJjs9N3cqMQ== 0000950005-98-000649.txt : 19980806 0000950005-98-000649.hdr.sgml : 19980806 ACCESSION NUMBER: 0000950005-98-000649 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980805 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ZAP POWER SYSTEMS INC CENTRAL INDEX KEY: 0001024628 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC & OTHER ELECTRICAL EQUIPMENT (NO COMPUTER EQUIP) [3600] IRS NUMBER: 943210624 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 333-05744-LA FILM NUMBER: 98677270 BUSINESS ADDRESS: STREET 1: 117 MORRIS ST CITY: SEBASTOBOL STATE: CA ZIP: 95472 BUSINESS PHONE: 7078244150 MAIL ADDRESS: STREET 1: 117 MORRIS ST CITY: STBASTOPOL STATE: CA ZIP: 95472 10QSB 1 FORM 10QSB UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1998 [ ] TRANSITION REPORT PURSUANT TO 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _________ Commission file number 333-05744-LA ----------------------------------- ZAP POWER SYSTEMS - -------------------------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) CALIFORNIA 94-3210624 - ------------------------------------- ------------------------------------ (State or other jurisdiction (I.R.S. Employer Identification No.) of incorporation or organization) 117 Morris Street, Sebastopol, California 95472 - -------------------------------------------------------------------------------- (Address of principal executive offices) (707) 824-4150 - --------------------------- (Issuer's telephone number) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 (APPLICABLE ONLY TO CORPORATE ISSUERS) State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. 2,626,887 shares of common stock as of July 22, 1998 Transitional Small Business Disclosure Format Yes [ ] No [x] Part I. FINANCIAL INFORMATION Item 1. Financial Statements ZAP POWER SYSTEMS CONDENSED BALANCE SHEET June 30, 1998 - ------------------------------------------------------------------------------- ASSETS CURRENT ASSETS Cash $ 273,000 Receivables 370,500 Inventories 393,700 Prepaid expenses and other assets 134,300 ------------ Total current assets 1,171,500 ------------ PROPERTY AND EQUIPMENT 217,100 ------------ OTHER ASSETS Intangibles, net of accumulated amortization of $4,900 36,800 Deposits 11,900 ------------ Total other assets 48,700 ------------ Total assets $ 1,437,300 ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 394,800 Accrued liabilities and other expenses 26,000 Customer Deposits 12,600 Notes payable 33,600 Current maturities of long-term debt 2,500 Current maturities of obligations under capital leases 8,400 ------------ Total current liabilities 477,900 ------------ OTHER LIABILITIES Obligations under capital leases, less current maturities 10,900 Long-Term Debt, less current maturities 16,200 Notes Payable, less current maturities 60,000 ------------ Total other liabilities 87,100 ------------ STOCKHOLDERS' EQUITY Common stock, no par value; 10,000,000 shares authorized, 2,619,617 shares issued and outstanding 3,648,700 Accumulated deficit (2,776,400) ------------ Total stockholders' equity 872,300 ------------ Total liabilities and stockholders' equity $ 1,437,300 ============ The accompanying notes are an integral part of these financial statements 2 ZAP POWER SYSTEMS CONDENSED STATEMENTS OF OPERATIONS
Quarter ended June 30, Six Months ended June 30, 1998 1997 1998 1997 - ------------------------------------------------------------------------------------------------------------ NET SALES $ 863,700 $ 568,200 $ 1,324,900 $ 826,100 COST OF GOODS SOLD 636,800 484,800 906,400 706,600 ------------ ------------ ------------ ------------ GROSS PROFIT 226,900 83,400 418,500 119,500 ------------ ------------ ------------ ------------ OPERATING EXPENSES Selling 250,700 172,600 409,700 265,400 General and administrative 219,900 188,000 382,400 364,200 Research and development 47,600 69,500 79,900 118,500 ------------ ------------ ------------ ------------ 518,200 430,100 872,000 748,100 ------------ ------------ ------------ ------------ LOSS FROM OPERATIONS (291,300) (346,700) (453,500) (628,600) ------------ ------------ ------------ ------------ OTHER INCOME (EXPENSE) Interest expense (3,600) (7,000) (6,300) (15,900) Other (4,100) 7,900 400 5,300 ------------ ------------ ------------ ------------ (7,700) 900 (5,900) (10,600) ------------ ------------ ------------ ------------ NET LOSS $ (299,000) $ (345,800) $ (459,400) $ (639,200) ============ ============ ============ ============ NET LOSS PER COMMON SHARE, BASIC AND DILUTED $ (0.12) $ (0.15) $ (0.18) $ (0.29) ============ ============ ============ ============ WEIGHTED AVERAGE OF COMMON SHARES OUTSTANDING 2,592,100 2,254,900 2,571,800 2,190,400 ============ ============ ============ ============ The accompanying notes are an integral part of these financial statements
3 ZAP POWER SYSTEMS CONDENSED STATEMENTS OF CASH FLOWS Six months ended June 30, 1998 1997 - -------------------------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $(459,400) $(639,200) Adjustments to reconcile net loss to net cash used by operating activities Depreciation and amortization 44,600 27,000 Allowance for doubtful accounts 400 Issuance of common stock for services rendered 64,600 10,600 Changes in: Receivables (248,800) (156,900) Inventories (127,200) (32,400) Prepaid expenses (68,700) 14,000 Deposits (92,300) 105,500 Accounts payable 231,800 69,400 Accrued liabilities and other expenses (52,300) (38,000) --------- --------- Net cash used by operating activities (707,700) (639,600) --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Purchases of equipment (96,300) (56,700) Investment in subsidiaries (13,900) Patent Defense (17,900) --------- --------- Net cash used by investing activities (114,200) (70,600) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from notes payable 30,000 Increase in loans payable 18,700 Decrease in restricted cash 10,000 Sale of common stock, net of stock offering costs 411,300 838,700 Principal repayments on long-term debt (4,700) (6,200) Payments on obligations under capital leases (7,700) (6,000) Principal repayments on note payable (13,200) (122,000) --------- --------- Net cash provided by financing activities 404,400 744,500 --------- --------- NET INCREASE/(DECREASE) IN CASH (417,500) 34,300 CASH, beginning of period 690,500 161,600 --------- --------- CASH, end of period $ 273,000 $ 195,900 ========= ========= The accompanying notes are an integral part of these financial statements 4 ZAP POWER SYSTEMS NOTES TO THE INTERIM UNAUDITED CONDENSED FINANCIAL STATEMENTS (1) Basis of Presentation The financial statements included in this Form 10-QSB have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted, pursuant to such rules and regulations, although management believes the disclosures are adequate to make the information presented not misleading. The results of operations for any interim period are not necessarily indicative of results for a full year. These statements should be read in conjunction with the financial statements and related notes included in the Company's Annual Report on Form 10-KSB for the year ended December 31, 1997. The financial statements presented herein as of June 30, 1998, and for the three months and six months ended June 30, 1998 and June 30, 1997 reflect, in the opinion of management, all material adjustments consisting only of normal recurring adjustments necessary for a fair presentation of the financial position, results of operations and cash flow for the interim periods. The net loss per common share is based on the weighted average number of common shares outstanding in each period. Common stock equivalents associated with stock options have been excluded from the weighted average shares outstanding since the effect of these securities would be anti-dilutive. (2) - RECEIVABLES June 30, 1998 ------------- Trade accounts receivable $ 375,500 Less allowance for doubtful accounts (5,000) --------- $ 370,500 ========= (3) - INVENTORIES June 30, 1998 ------------- Raw materials $ 261,500 Work-in-process 77,900 Finished goods 54,300 --------- $ 393,700 ========= (4) - PROPERTY AND EQUIPMENT June 30, 1998 ------------- Demonstration items $ 109,700 Machinery and equipment 72,900 Equipment under capital leases 45,900 Office furniture and fixtures 38,900 Computers 34,900 Leasehold improvements 23,600 Vehicle 56,200 --------- 382,100 Less accumulated depreciation and amortization (165,000) --------- $ 217,100 ========= 5 (5) - NOTES PAYABLE June 30, 1998 ------------- Notes to stockholders, with interest at 10%; interest and principal due when the notes mature in December 1999. The note holders have been issued warrants to purchase, in the aggregate, 21,800 shares of common stock at $5.25 per share through October, 1999. $ 93,600 =========== (6) - COMMON STOCK In November of 1996 the Company commenced a direct public offering of its Common Stock, offering for sale 500,000 shares at $5.25. During 1996, the Company sold 3,800 shares and received $19,900 in proceeds. In 1997, the Company sold an additional 415,100 shares in connection with the direct public offering and realized net proceeds of $1,990,900, net of offering related expenses of $188,400. In total, the Company sold 84% of the shares offered for sale and realized net proceeds of $2,010,600. The offering was completed in November 1997. The Company has in process a second direct public offering of its Common stock for sale 500,000 shares at $6.00 per share. The Company commenced this offering in January 1998 and as of July 22, 1998 has sold 72,759 shares and realized gross proceeds of $436,554. On February 27, 1998, the Company's Common stock commenced trading on the OTC Bulletin Board under the stock symbol "ZAPP". Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Special Note Regarding Forward-Looking Statements Certain statements in this Form 10-QSB, including information set forth under this Item 2. "Management's Discussion and Analysis of Financial Condition and Results of Operations" constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "ACT"). ZAP Power Systems (the "Company") desires to avail itself of certain "safe harbor" provisions of the Act and is therefore including this special note to enable the Company to do so. Forward-looking statements included in this Form 10-QSB or hereafter included in other publicly available documents filed with the Securities and Exchange Commission, reports to the Company's stockholders and other publicly available statements issued or released by the Company involve known and unknown risks, uncertainties, and other factors which could cause the Company's actual results, performance (financial or operating) or achievements to differ from the future results, performance (financial or operating) or achievements expressed or implied by such forward looking statements. Such future results are based upon management's best estimates based upon current conditions and the most recent results of operations. Overview The Company designs, assembles, manufactures and distributes electric bicycle power kits, electric bicycles and tricycles, and other low-power electric transportation vehicles. Historically, unit sales have been approximately 50% kits, 30% electric bicycles, and 20% electric scooters. Dollar sales have been 30% kits, 35% electric bicycles, and 35% electric scooters. The Company sells its electric bicycles, kits, and scooters to retail customers, international distributors, law enforcement agencies, electric utility companies, bicycle dealerships and mail order catalogs. Net revenue is net of returns. The Company sells to the mail order catalogs and selected customers on credit with net 30-day terms. Many of the bicycle dealerships are sold cash on delivery. The retail sales are primarily paid for with a credit card or personal check before shipment of the product. The Company manufactures an electric motor system that is sold as a kit to be installed by the customer on their own bicycle. The Company also installs the motor system on bicycles that the Company buys. The Company 6 then sells the complete electric bicycle to the customer. The Company purchases complete bicycles from various bicycle manufacturers for use with the Company's electric motor system from U.S. and Taiwan sources. The Company manufactures the electric motor kit, which has approximately 62 unique parts. The manufacturing of the electric motor kit and the installation of the motor systems to the bicycles are done at its Sebastopol location. The electric motors are purchased from an original equipment manufacturer (OEM) in the auto and air-conditioning industry. The Company is using one vendor for its motors, although there are other companies that could be used with slight modifications to the motor support brackets. The batteries are standard batteries used in the computer and security industries for power interrupt systems. The electronic system uses standard electronic components. Additionally, the Company produces a scooter, known as the ZAPPY(TM), which is manufactured by the Company, using parts manufactured by various subcontractors. The Company is also a U.S. distributor of the Electricycle(TM) scooter that is imported from China. The electric motor kits, bicycles, and scooters sold by ZAP are shipped by U.P.S. and Federal Express. Larger quantity orders to wholesale distributors are shipped by common carrier. Overseas shipments are shipped by ocean carrier or airfreight. The Company has developed long term purchase arrangements with its key vendors. The Company has no contractual relationships with any of its vendors. The Company as of June 30, 1998 had a $524,537 sales backlog. The company expects to fill these orders within the next 60 days. Additionally, the Company received a contract to purchase one million dollars of ZAP products from Central & Southwest Services, Inc. Of the total order, $150,000 has been fulfilled and the remaining $850,000, which is not included in the backlog amount, is intended to be fulfilled over the next year. The products to be shipped will vary based upon the requests of the customer during each month. The Company's growth strategy is to increase net sales by augmenting its marketing and sales force, and by increasing distribution channels through retail organizations and wholesale distributors both domestically and overseas. The company is also working on setting up franchise stores to assist in the retail sales arena. The Company will continue to increase its production capability to meet the increasing demand for its product. The Company will continue to develop the product so that it is the low cost leader in the industry. Product improvements and new product introductions will continue to enlarge ZAP's presence in the electric vehicle industry. Results of Operations The following table sets forth, as a percentage of net sales, certain items included in the Company's Income Statements (see Financial Statements and Notes) for the periods indicated: Quarter ended June 30, Six months ended June 30, 1998 1997 1998 1997 ------- ------ ------ ------ Statements of Income Data: Net sales ................... 100.0% 100.0% 100.0% 100.0% Cost of sales ............... 73.7 85.3 68.4 85.5 Gross profit (Loss) ......... 26.3 14.7 31.6 14.5 Operating expenses .......... 60.0 75.7 65.8 90.6 Loss from operations ........ (33.7) (61.0) (34.2) (76.1) Other income (expense) ...... (0.9) 0.2 (0.4) (1.2) Loss before income taxes .... (34.6) (60.8) (34.6) (77.3) Provision for income taxes .. 0.0 0.0 0.0 0.0 Net loss .................... (34.6) (60.8) (34.6) (77.3) Quarter Ended June 30, 1998 Compared to Quarter Ended June 30, 1997 Net sales for the quarter ended June 30, 1998, were $863,700 compared to $568,200 in the prior year, an increase of $295,500 or 52%. The increase in sales in 1998 over the same period in 1997 was largely due to the production and demand of the new ZAPPY(TM) scooter. Sales of the ZAPPY(TM) scooter were $302,700 or 35% of total sales for the quarter. This product was introduced into the marketplace in the beginning of 1998. 7 Gross profit increased as a percentage of net sales to 26% from 15%. The total gross profit increased $143,500 or 172%. The increase in gross margin can be attributed to 1) margins generated from the sales of the new ZAPPY(TM) scooter and 2) efficiency increases in the manufacturing of other products in the current quarter as compared to the quarter ended June 30, 1997. Direct Materials were 68% of net sales in the 2nd quarter of 1998 as compared to 75% of net sales in the 2nd quarter of 1997. This is mainly due to improved control of material costs in 1998. Direct labor and overhead were 6% of net sales in the 2nd quarter of 1998 as compared to 10% in the 2nd quarter of 1997. This is mainly due to increased efficiencies resulting from higher utilization of production personnel and facilities in 1998 as compared to 1997. Selling expenses in the quarter ended June 30, 1998 were $250,700 as compared to $172,600 for the quarter ended June 30, 1997. This was an increase of $78,100 or 45% from 1997 to 1998. As a percentage of sales, selling expenses decreased from 30% of sales to 29% of sales. The increase in selling expenses was a result of efforts to create ZAP franchise stores and increased promotional activity to enhance customer demand. Additionally, new marketing materials were developed and printed to further market the products. General and administrative expenses for the quarter ended June 30, 1998 were $219,900. This was an increase of $31,900 or 17% from 1997. As a percentage of sales, general and administrative expense decreased to 25% from 33% of net sales. Expense increases during the 2nd quarter of 1998 as compared to the 2nd quarter of 1997 resulted from increased personnel costs and the additional use of outside consultants. Research and development decreased $21,900 or 32% from the 2nd quarter of 1997 as compared to the 2nd quarter of 1998. As a percentage of net sales it decreased to 6% of sales in the 2nd quarter of 1998 as compared to 12% of sales in the 2nd quarter of 1997. Extensive efforts in developing the ZAPPY(TM) scooter and single speed low-cost motor system resulted in higher costs in the 2nd quarter of 1997. Six Months Ended June 30, 1998 Compared to Six Months Ending June 30, 1997 Net sales for the six months ended June 30, 1998 were $1,324,900 compared with $826,100 in the six months ended June 30, 1997, an increase of $498,800 or 60%. The increase in sales is attributed to sales of the new ZAPPY(TM) scooter and a greater acceptance of the Company's products in the marketplace. ZAPPY(TM) scooters accounted for $307,100 of sales in the first six months of 1998. Gross profit increased as a percentage of net sales, to 32% from 15%. The total gross profit increased $299,000 or 250%. The increase in gross margin can be attributed to 1) Gross margins realized on the sales of the new ZAPPY(TM) scooters and, 2) greater cost controls on pre-existing products in the current six months as compared to the six months ended June 30, 1997. Direct materials were 61% of net sales in the first six months of 1998 as compared to 72% of net sales in the first six months of 1997. This is mainly due to improved control of material costs in 1998. Direct labor and overhead were 7% of net sales in the first six months of 1998 as compared to 14% of net sales in the first six months of 1997. This is mainly due to increased efficiencies resulting from higher utilization of production personnel and facilities in 1998 as compared to 1997. Selling expenses for the six months ended June 30, 1998 were $409,700 as compared to $265,400 for the six months ended June 30, 1997. This was an increase of $144,300 or 54% from 1997 to 1998. As a percentage of sales, selling expenses decreased from 32% of sales to 31% of sales. The increase was a result of heightened efforts to promote the concept of franchise stores throughout the country and increased promotion activity including attendance in specific trade show tied to new designated markets. General and administrative expenses for the six months ended June 30, 1998 were $382,400. This is an increase of $18,200 or 5% from 1997. As a percentage of sales, general and administrative expense decreased to 29% from 44% of net sales. Expense increases during the first six months of 1998 as compared to the first six months of 1997 occurred due to additional use of outside consultants for business purposes. 8 Research and development decreased $38,600 or 33% from the first six months of 1997 as compared to the first six months of 1998. As a percentage of net sales, research and development decreased to 6% of sales in the first six months of 1998 as compared to 14% of sales in the first six months of 1997. Extensive efforts in developing the ZAPPY(TM) scooter and single speed low-cost motor system resulted in higher costs in the first six months of 1997. Liquidity and Capital Resources The Company used cash from operations of $707,700 and $639,600 during the six months ended June 30, 1998 and 1997 respectively. Cash used in operations in the first six months of 1998 was the result of the net loss incurred for the period of $459,400, offset by net non cash expenses of $109,200, and the net change in operating assets and liabilities resulting in a further use of cash of $357,500. Cash used in operations for the first six months of 1997 was the result of the net loss incurred for the first six months of $639,200, offset by net non cash expenses of $38,000, and the net change in operating assets and liabilities resulting in further use of cash of $38,400. Investing activities used cash of $114,200 and $70,600 during the first six months ended June 30, 1998 and 1997 respectively. The uses of cash were for the purchase of fixed assets and defense of the company's patents. Financing activities provided cash of $404,400 and $744,500 during the first six months ended June 30, 1998 and 1997 respectively. In both years, the cash provided by financing activities resulted from the sales of common stock, $411,300 and $838,700 for the first six months ended June 30, 1998 and 1997 respectively, offset by principal payments on outstanding debt At June 30, 1998, the Company had cash and cash equivalents of $273,000 as compared to $196,000 at June 30, 1997. At June 30, 1998, the Company had working capital of $693,600 as compared to working capital of $126,500 at June 30, 1997. The increase in both cash and cash equivalents and working capital in the first six months of 1998 over the first six months of 1997 are primarily due to the proceeds received from the Company's direct public offering which more than offset the Company's net losses during the same period. The Company, at present, does not have a credit facility in place with a bank or other financial institution. The Company does have in process a second direct public offering for the six months ended June 30, 1998 of its common stock with maximum potential gross proceeds of $3,000,000 before expenses. The Company believes that the cash and cash equivalents on hand at June 30, 1998 along with the expected proceeds from the Company's direct public offering, will be sufficient to allow the Company to continue its expected level of operations for the remainder of the year. The Company's primary capital needs are to fund its growth strategy, which includes increasing its net sales, increasing distribution channels, improving existing product lines and development of strong corporate infrastructure. Dates following December 31, 1999 and beyond (the "Year 2000 Problem") Many existing computer systems and applications, and other devices, use only two digits to identify a year in the date field, without considering the impact of the upcoming change in the century. Such systems and applications could fail or create erroneous results unless corrected. The Company relies on its internal financial systems and external systems of business enterprises such as customers, suppliers, creditors, and financial organizations both domestically and globally, directly and indirectly for accurate exchange of data. The Company has evaluated such systems and believes the cost of addressing the Year 2000 Problem will not have a material adverse affect on the result of operations or financial position of the Company. However, even though the internal systems of the Company are not materially affected by the Year 2000 issue the Company could be affected through disruption in the operation of the enterprises with which the Company interacts. Seasonality and Quarterly Results The Company's business is subject to seasonal influences. Sales volumes in the bicycle industry typically slow down during the winter months, November to March, in the U.S. The Company is selling worldwide and is not impacted 100% by the U.S. seasonality in the bicycle industry. 9 Inflation The Company's raw materials are sourced from stable cost competitive industries. As such, the Company does not foresee any material inflationary trends for its raw material sources. PART II - OTHER INFORMATION Item 1. Legal Proceedings The company has become aware that a company named Omni under the leadership of an individual named Joseph Stevenson has been advertising and selling an electric system for bicycles called EROS (electric regenerative operating system). The Company's management, in consultation with patent counsel, has determined after analysis that the EROS system infringes the Company's patents and has filed suit against Omni for such infringement. Although the Company believes its claims are meritorious and the patents for the ZAP system are valid, it is possible, as in any suit, that the Company may be unable to prove infringement or that Mr. Stevenson may establish, either in litigation or in a re-examination proceeding before the Patent Office that the Company's patents are not valid. If the Company's patents are held to be invalid, the Company's ability to prevent competitors from manufacturing or selling bicycles with the patented system will be significantly reduced. If the Company does not prevail, it is also possible that ZAP could be held liable for the alleged infringer's damages, including loss of profits and interference with business relations. The loss of the patents or a significant damage award against the Company could have a material adverse effect upon the business and financial condition and prospects of the Company. Item 2. Changes in Securities There were no changes in rights of securities holders. Item 3. Defaults Upon Senior Securities There were no defaults upon senior securities. Item 4. Submission of Matters to a Vote of Security Holders There were no matters submitted to the vote of security holders. Item 5. Other Information There were no major contracts signed during the period. Item 6. Exhibits and Reports on Form 8-K No reports on Form 8-K were filed during the quarter. 10 SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ZAP POWER SYSTEMS ----------------------------------------- (Registrant) Date --------------- -------------------------------------- James McGreen - President and Director Date --------------- -------------------------------------- Gary Starr - Managing Director 11 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF ZAP POWER SYSTEMS FOR THE SIX MONTHS ENDED JUNE 30, 1998, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 6-MOS DEC-31-1998 JAN-31-1998 JUN-30-1998 273,000 0 375,500 (5,000) 393,700 1,171,500 382,100 (165,000) 1,437,300 477,900 2,500 0 0 3,648,700 (2,776,400) 1,437,300 1,324,900 1,325,300 906,400 872,000 0 (5,000) 6,300 (459,400) 0 (459,400) 0 0 0 (459,400) (0.18) (0.18)
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