-----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, N6nSGKyXb/vaE1EzldiQ8X35JN4QvfHiVM8HaVHpT82+KhZbuG1nq0Ork932Ky3T bIXfDW7K2A1bxPiLlnyPaA== 0000315449-96-000010.txt : 19960917 0000315449-96-000010.hdr.sgml : 19960917 ACCESSION NUMBER: 0000315449-96-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960731 FILED AS OF DATE: 19960916 SROS: AMEX SROS: BSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNIQUE MOBILITY INC CENTRAL INDEX KEY: 0000315449 STANDARD INDUSTRIAL CLASSIFICATION: MOTORS & GENERATORS [3621] IRS NUMBER: 840579156 STATE OF INCORPORATION: CO FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-53376 FILM NUMBER: 96630302 BUSINESS ADDRESS: STREET 1: 425 CORPORATE CIRCLE CITY: GOLDEN STATE: CO ZIP: 80401 BUSINESS PHONE: 3032782002 MAIL ADDRESS: STREET 1: 425 CORPORATE CIRCLE CITY: GOLDEN STATE: CO ZIP: 80401 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 31, 1996 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 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) (303) 278-2002 (Registrant's telephone number, including area code) 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 . The number of shares outstanding (including shares held by affiliates) of the registrant's common stock, par value $0.01 per share at September 11, 1996 was 11,243,092. PART I - FINANCIAL INFORMATION UNIQUE MOBILITY, INC. AND SUBSIDIARIES Consolidated Balance Sheets July 31, October 31, Assets 1996 1995 (unaudited) Current assets Cash and cash equivalents $ 1,974,492 1,796,392 Certificates of deposit - 319,107 Accounts receivable 547,325 337,849 Costs and estimated earnings in excess of billings on uncompleted contracts 165,911 262,414 Inventories (note 3) 426,905 404,701 Prepaid expenses 76,507 35,397 Other current assets 82,080 70,203 Total current assets 3,273,220 3,226,063 Property and equipment, at cost: Land 335,500 335,500 Building 1,364,500 1,364,500 Molds 102,113 102,113 Transportation equipment 258,675 251,175 Machinery and equipment 1,859,138 1,763,818 3,919,926 3,817,106 Less accumulated depreciation (1,521,013) (1,275,530) Net property and equipment 2,398,913 2,541,576 Investment in Taiwan joint venture 1,402,181 1,432,735 Patent and trademark costs, net of accumulated amortization of $36,757 and $25,491 515,174 450,394 Other assets 8,873 27,831 $ 7,598,361 7,678,599 (Continued) UNIQUE MOBILITY, INC. AND SUBSIDIARIES Consolidated Balance Sheets, Continued July 31, October 31, Liabilities and Stockholders' Equity 1996 1995 (unaudited) Current liabilities: Accounts payable $ 225,481 83,859 Other current liabilities (note 4) 414,530 464,186 Note payable to Taiwan joint venture participant 1,403,493 1,403,493 Current portion of long-term debt 72,183 81,525 Total current liabilities 2,115,687 2,033,063 Long-term debt, less current portion 758,945 807,003 Total liabilities 2,874,632 2,840,066 Minority interest in consolidated subsidiary 390,039 389,065 Stockholders' equity (note 5): Common stock, $.01 par value, 50,000,000 shares authorized; 11,125,178 and 10,571,953 shares issued 111,252 105,720 Additional paid-in capital 20,942,425 18,887,886 Accumulated deficit (16,592,135) (14,426,536) 4,461,542 4,567,070 Less cost of 39,341 and 37,341 shares of treasury stock 127,852 117,602 Total stockholders' equity 4,333,690 4,449,468 Commitment (note 8) $ 7,598,361 7,678,599 See accompanying notes to consolidated financial statements. UNIQUE MOBILITY, INC. AND SUBSIDIARIES Consolidated Statements of Operations (unaudited) Quarter Ended July 31, Nine Months Ended July 31, 1996 1995 1996 1995 Revenue: Contract services (note 7) $ 598,746 1,464,089 1,117,410 3,555,682 Product sales 177,249 165,730 456,142 634,151 775,995 1,629,819 1,573,552 4,189,833 Operating costs and expenses: Costs of revenue 520,629 1,102,576 1,283,890 2,778,635 Research and development 405,106 140,393 1,152,197 959,603 General and administrative 251,090 267,252 896,776 778,954 Depreciation and amortization 94,857 89,774 278,225 255,016 Royalty 3,687 7,258 7,518 19,938 1,275,369 1,607,253 3,618,606 4,792,146 Operating earnings (loss) (499,374) 22,566 (2,045,054) (602,313) Other income (expense): Minority interest share of earnings of consolidated subsidiary (17,146) (15,613) (51,482) (48,451) Interest income 26,171 10,593 80,301 25,845 Interest expense (54,582) (24,139) (164,449) (66,971) Equity in loss of Taiwan joint venture (9,212) (1,665) (30,553) (7,283) Other 8,357 9,486 45,638 18,859 Net earnings (loss) $ (545,786) 1,228 (2,165,599) (680,314) Net earnings (loss) per common share (note 6) $ (.05) - (.20) (.07) Weighted average number of shares of common stock outstanding (note 6) 11,081,455 10,013,125 10,860,679 9,955,653 See accompanying notes to consolidated financial statements.
UNIQUE MOBILITY, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (unaudited) Nine Months Ended July 31, 1996 1995 Cash flows from operating activities: Net loss $ (2,165,599) (680,314) Adjustments to reconcile net loss to net cash used by operating activities: Depreciation and amortization 278,225 255,016 Minority interest share of earnings of consolidated subsidiary, net of cash distributions 974 (2,060) Noncash compensation expense for common stock issued for services 37,436 12,500 Equity in loss of Taiwan joint venture 30,554 2,244 Gain on sale of assets (37,623) (3,534) Change in operating assets and liabilities: Accounts receivable and costs and estimated earnings in excess of billings on uncompleted contracts (112,973) (209,334) Inventories (22,204) 65,937 Prepaid expenses and other current assets (52,987) 4,216 Billings in excess of costs and estimated earnings on uncompleted contracts - (137,247) Accounts payable and other current liabilities 91,966 141,363 Other - 374 Net cash used by operating activities (1,952,231) (550,839) Cash provided (used) by investing activities: Acquisition of property and equipment (123,021) (433,374) Increase in patent and trademark costs (76,046) (49,147) Proceeds from sale of property and equipment 62,860 17,110 Proceeds from sale of certificates of deposit 319,107 419,107 Purchase of certificates of deposits - (319,107) Net cash provided (used) by investing activities $ 182,900 (365,411) (Continued) UNIQUE MOBILITY, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (unaudited) Nine Months Ended July 31, 1996 1995 Cash flows provided by financing activities: Proceeds from borrowings $ - 212,337 Repayment of debt (57,400) (187,881) Proceeds from sale of common stock, net 1,905,816 1,437,333 Issuance of common stock upon exercise of employee options 81,984 15,565 Issuance of common stock under employee stock purchase plan 17,031 2,526 Net cash provided by financing activities 1,947,431 1,479,880 Increase in cash and cash equivalents 178,100 563,630 Cash and cash equivalents at beginning of period 1,796,392 1,201,008 Cash and cash equivalents at end of period $ 1,974,49 1,764,638 Supplemental disclosures to the consolidated statements of cash flows: Cash paid for interest was $60,865 and $66,971 for the nine months ended July 31, 1996 and 1995, respectively. 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. During the nine months ended July 31, 1996, the Company issued 13,666 shares of common stock with an exercise price of $10,250 for which the Company received 2,000 shares of common stock. See accompanying notes to Consolidated Financial Statements. UNIQUE MOBILITY, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (1) The accompanying financial statements are unaudited; however, in the opinion of management, all adjustments which were solely of a normal recurring nature, necessary to a fair statement of the results for the interim period, have been made. The results for the interim period are not necessarily indicative of results to be expected for the fiscal year. (2) Certain fiscal 1995 amounts have been reclassified for comparative purposes. (3) Inventories are stated at the lower of cost or market. Cost is determined by the first-in, first-out method and consists of materials, direct labor and production overhead. Inventories consist of the following: July 31, 1996 October 31, 1995 (unaudited) Raw materials $ 283,071 247,225 Work in process 84,439 31,525 Finished products 59,395 125,951 $ 426,905 404,701 (4) The following table summarizes the composition of the Company's other current liabilities: July 31, 1996 October 31, 1995 (unaudited) Accrued subcontractor expense $ - 174,781 Accrued interest 196,555 93,698 Accrued legal and accounting fees 39,217 48,611 Accrued payroll, consulting, personal property and real estate taxes 45,379 44,882 Unearned revenue 62,460 22,096 Other 70,919 80,118 $ 414,530 464,186 UNIQUE MOBILITY, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements, Continued (unaudited) (5) 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 ten 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 the Company's common stock. The following table summarizes activity under the plans: Shares Under Per Share Option Exercise Price 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 Granted 540,000 4.13 - 4.75 Exercised (70,572) .50 - 3.50 Forfeited (307,465) 3.50 - 8.13 Outstanding at July 31, 1996 2,014,195 .50 - 8.13 Exercisable at July 31, 1996 1,398,750 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 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 ten 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, 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 Granted 32,000 4.38 Outstanding at July 31, 1996 141,333 4.38 - 6.25 Exercisable at July 31, 1996 47,111 UNIQUE MOBILITY, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements, Continued (unaudited) 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 July 31, 1996. The Company has reserved 300,000 shares of common stock for issuance pursuant to a warrant agreement with an investment banking company. The warrants are exercisable at a price of $6.00 per share and expire in January 1999. 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 July 31, 1996. In connection with the 1995 common stock issuance, the placement agent was issued warrants expiring July 1998, to acquire 150,000 shares of the Company's common stock at $5.75 per share. All of these warrants remain outstanding at July 31, 1996. In connection with the first 1996 common stock issuance, the placement agent was issued warrants expiring February 1999, to acquire 50,000 shares of the Company's common stock at $4.75 per share. All of these warrants remain outstanding at July 31, 1996. In connection with the second 1996 common stock issuance, the investor was issued warrants expiring May 1998, to acquire 38,100 shares of the Company's common stock at $5.00 per share. All of these warrants remain outstanding at July 31, 1996. (6) Loss per common share amounts are based on the weighted average number of common shares outstanding during the third quarter and first nine months of each fiscal year presented. Outstanding common stock options and warrants were not included in the computation because the effect of such inclusion would be antidilutive. Fully diluted earning per share are considered equivalent to primary earnings per share. (7) The Company has historically derived significant revenue from contract services from a few key customers. For the quarter and nine months ended July 31, 1996, the Company derived revenue of $542,179 and $911,594 representing 91 percent and 84 percent of contract services revenue from five customers, respectively. For the quarter and nine months ended July 31, 1995, the Company derived revenue of $1,328,542 and $3,311,293 representing 91 percent and 93 percent of contract services revenue from four and five customers, respectively. (8) The Company has entered into employment agreements with three of its officers which expire December 31, 1996. The aggregate annual future compensation under these agreements from July 31, 1996, through the expiration date is $167,816. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Except for historical information, the discussion in this report contains forward-looking statements that involve risks and uncertainties. The Company wishes to caution readers that the Company's actual results could differ materially from those discussed in this report. The Company has filed a Registration Statement on Form S-3 with the Securities and Exchange Commission which contains additional information concerning important factors that could cause the Company's actual results to differ materially from the discussion in this report. Financial Condition During the third quarter the Company continued to invest in manufacturing engineering activities directed toward the commercialization of its proprietary products in existing and developing markets for low voltage (24v to 48v) applications. Principal among these activities are the development of manufacturing processes for high efficiency motors for application in Invacare Corporation's family of motorized wheelchair products; production engineering of the electric motor scooter power system for Kwang Yang Motor Co., Ltd.(KYMCO); and the development of a fully functional purpose built prototype electric vehicle with Pininfarina. As a result of these activities, which were primarily internally funded, research and development expense rose over three-fold to $405,106 during the third quarter from the comparable prior year expenditure of $140,393. Net loss for the third quarter was $545,786 or $0.05 per share compared to net earnings of $1,228 for the comparable quarter last year. Operations for the first nine months of fiscal 1996 resulted in a net loss of $2,165,599 or $0.20 per share compared to a net loss of $680,314 or $0.07 per share for the comparable prior year period. Operations for the quarter ended July 31, 1996 were financed through the sale of 156,300 shares of common stock at the then prevailing market price pursuant to Regulation S and from existing cash resources. Net proceeds from the offering amounted to $598,197. See also "Liquidity and Capital Resources" below. The Company intends to continue to invest similar amounts of cash during the remainder of fiscal 1996 on the commercialization of its proprietary technology, including the launch of expanded manufacturing operations at its Golden, Colorado facility. The Company, however, does not currently possess the financial resources to fully fund these activities. See "Liquidity and Capital Resources" below. Cash balances at July 31, 1996, was $1,974,492 compared to $2,115,499 at the end of fiscal 1995. Operating losses throughout fiscal 1996 have been funded primarily from cash raised from the sale of the Company's common stock. Accounts receivable rose $209,476 to $547,325 at July 31, 1996, and costs and estimated earnings in excess of billings on uncompleted contracts declined $96,503 from the fiscal 1995 year end level due to progress billings under certain development contracts during the period. Inventories rose $22,204 during the first nine months of fiscal 1996, reflecting higher levels of raw material and work in process inventories which were offset, in part, by lower levels of finished goods inventory. Prepaid expenses rose to $76,507 at July 31, 1996, compared to $35,397 at the beginning of the fiscal year due to the prepayment of annual premiums on the Company's insurance coverages which are amortized ratably over the fiscal year. The Company invested $123,021 for the acquisition of machinery and equipment and $76,046 for the prosecution of patent and trademark applications covering its proprietary technologies during the first nine months of fiscal 1996. Management expects that the level of capital expenditures for machinery and equipment will rise substantially during the fourth quarter of fiscal 1996 continuing through the first half of fiscal 1997 coincident with the Company's plan to establish an expanded manufacturing capability at its Golden, Colorado facility. Accounts payable rose to $225,481 at July 31, 1996, from $83,859 at October 31, 1995, reflecting higher levels of purchased parts for raw material and work in process inventories. Other current liabilities declined $49,656 to $414,530 July 31, 1996, primarily due to the payment of subcontractor costs during the period which was partially offset by increases in accrued interest on the note payable to KYMCO financing the Company's investment in Taiwan UQM Electric Co., Ltd., and higher levels of deposits from customers for the purchase of UQM products. Long-term debt declined $48,058 during the nine months ended July 31, 1996, to $758,945 due to scheduled principal payments on the Company's mortgage debt for its Golden, Colorado facility and scheduled collections on a lease contract held by UQM Leasing, Inc. Common stock and additional paid-in capital increased to $111,252 and $20,942,425 at July 31, 1996, respectively, compared to $105,720 and $18,887,886 at the end of fiscal 1995, respectively. The increase is attributable to the sale of common stock to Invacare Corporation in the first quarter; the sale of common stock to overseas institutional investors in various offerings under Regulation S; and the purchase of common stock upon the exercise of stock options by the Company's employees and consultants. Results of Operations Operations for the third quarter of fiscal 1996 resulted in lower levels of operating losses compared to the previous two fiscal 1996 quarters. The lower level of operating losses is attributable to higher levels of contract services revenue during the third quarter. Operations for the fiscal 1996 third quarter resulted in a net loss of $545,786 or $0.05 per share on total revenue of $775,995 compared to net earnings of $1,228 on total revenue of $1,629,819 for the comparable prior year quarter. Operations for the nine months ended July 31, 1996, resulted in a net loss of $2,165,599 or $0.20 per share on total revenue of $1,573,552 compared to a net loss of $680,314 or $0.07 per share on total revenue of $4,189,833 for the comparable prior year period. Contract services revenue for the third quarter and nine months ended July 31, 1996, declined $865,343 or 59 percent and $2,438,272 or 69 percent, respectively. The decrease is attributable to a reduction in the scope of the Company's contract with the U.S. Department of Energy (DOE) and Ford Motor Company and the reassignment of the Company's personnel to internally-funded product launch activities during fiscal 1996. Product sales for the third quarter and first nine months of fiscal 1996 rose nominally to $177,249 and declined $178,009 or 28 percent, respectively, reflecting lower sales levels of high voltage drive systems. Gross profit margins for the third quarter improved to 33 percent while gross profit margins for the nine months ended July 31, 1996 declined to 18 percent compared to 32 percent and 34 percent for the comparable prior year periods. Gross profit margins for the nine months ended July 31, 1996, were generally lower than the comparable prior year period due to higher material costs on purchased parts used in the Company's products and the write down of certain raw material components costs to current market values during the fiscal 1996 first quarter. Research and development expenditures rose to $405,106 during the third quarter and $1,152,197 for the nine months ended July 31, 1996, compared to $140,393 and $959,603 during the comparable prior year periods, respectively. The fiscal 1996 expenditures were primarily attributable to internally funded engineering activities associated with the launch of products for Invacare Corporation and KYMCO and vehicle integration activities for the Ethos 3 EV demonstration vehicle. Substantially all of the research and development expenditures during the third quarter and nine months period of the prior fiscal year were attributable to cost sharing investments under the contract with the DOE and Ford Motor Company. General and administrative costs declined to $251,090 for the third quarter versus $267,252 for the comparable prior year quarter and rose to $896,776 for the nine months ended July 31, 1996, versus $778,954 for the comparable prior year period. The increase in the year to date expense is primarily attributable to an arbitration award compensating a consultant for unauthorized work performed on the Ford/DOE program for which the company was unable to seek reimbursement under the contract. Depreciation and amortization expense increased to $94,857 and $278,225 for the quarter and nine months ended July 31, 1996, compared to $89,774 and $255,016 for the comparable prior year periods, reflecting generally higher levels of depreciable assets and amortizable patents and trademark expenditures in fiscal 1996. Interest income for the third quarter and first nine months of fiscal 1996 rose from the comparable fiscal 1995 levels due to higher balances of cash available for investment during the fiscal 1996 period. Interest expense rose $54,582 and $164,449 for the quarter and nine months ended July 31, 1996, compared to the prior year, reflecting interest accrual on the Company's note payable to its Taiwan joint venture partner. Liquidity and Capital Resources The Company's cash balances and liquidity were adequate to meet operating requirements throughout the first nine months of fiscal 1996. During the first quarter of fiscal 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. 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 the then prevailing market price. The additional investment, if completed, will be in the approximate amount of 50 percent of the mutually agreed capital costs for the manufacture of products to be sold to Invacare. The proceeds from the additional investment by Invacare will be restricted to such mutually agreed costs. The Company believes that the second investment by Invacare will be completed during the fourth quarter at which time the Company intends to dedicate approximately $1 million of its existing cash resources to meet its obligations with respect to the Invacare product launch. During the third quarter of fiscal 1996 the Company completed the sale of 156,300 of its common stock with an institutional fund and a private investor in Europe pursuant to an offering under Regulation S of the Securities and Exchange Act. Of the shares placed, 114,300 shares were at the market price on the date of purchase acceptance or $4.38 per common share and included two year warrants to acquire an additional 38,100 shares at an exercise price of $5.00 per share. The remaining 42,000 shares were placed at the market price for the five trading days preceding the date of purchase acceptance or $3.60 per share. Net proceeds to the Company after deducting the expenses of the sales amounted to $598,197. During fiscal 1995, the Company, KYMCO and Turn-Luckily Technology Co., Ltd. (TLT) entered into a Waiver and Option Agreement whereby KYMCO agreed to fund Unique's capital call obligations pursuant to the Joint Venture Agreement giving Unique the right to purchase a 39 percent equity in Taiwan UQM Electric Co., Ltd. (Taiwan UQM). Pursuant to the Agreement, KYMCO contributed $1,403,493 to Taiwan UQM and acquired ownership of the shares of Taiwan UQM issued in exchange therefore. Further, the Agreement granted Unique the option to repurchase these shares from KYMCO at any time prior to May 31, 1996, for $1,403,493 plus interest at 10 percent per annum. The purchase of the shares by KYMCO has been accounted for as a financing arrangement. Accordingly, for financial reporting purposes the Company has recorded an investment in joint venture equal to 39 percent of the current net assets of Taiwan UQM and a note payable to Taiwan joint venture participant equal to the amount payable to KYMCO under the Waiver and Option Agreement excluding accrued interest thereon. On May 6, 1996, the Company, KYMCO and TLT completed an amendment to the Waiver and Option Agreement. Under the amendment, the Company's option to repurchase the shares was extended from May 31, 1996, to October 21, 1996, and certain provisions relating to the minimum number of shares subject to repurchase by the Company were eliminated. The Company does not currently possess the financial resources to meet its obligation under the amended Waiver and Option Agreement, although the Company intends to secure capital to meet this obligation should such capital be available on terms acceptable to the Company. In the event the Company is unable to secure the capital necessary to meet its existing obligation under the amended Waiver and Option Agreement, the Company may seek an additional extension of time to preserve its ownership interest in Taiwan UQM. However, there can be no assurance that such an extension can be obtained, or if obtained 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 obligation under the Joint Venture Agreement and the amended 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. The Company plans to continue to pursue the commercialization of its proprietary technologies directly, if financing can be obtained, or indirectly by means of strategic alliances or licensing arrangements with leading companies in the field, or a combination of both. PART II - OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K (a) Exhibits None. 27 Financial Data Schedule (b) Reports on Form 8-K None. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Unique Mobility, Inc. Registrant Date: September 13, 1996 By:/s/ Donald A. French Donald A. French Treasurer and Controller Accounting Officer) EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEETS OF UNIQUE MOBILITY, INC. AND CONSOLIDATED SUBSIDIARIES AS OF JULY 31, 1996, AND THE CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE NINE MONTHS ENDED JULY 31, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS OCT-31-1996 JUL-31-1996 1,974,492 0 547,325 0 592,816 3,273,220 3,919,926 1,521,013 7,598,361 2,115,687 758,945 0 0 21,053,677 (16,719,987) 7,598,361 456,142 1,573,552 1,283,890 3,618,606 1,734 0 164,449 (2,165,599) 0 (2,165,599) 0 0 0 (2,165,599) (.20) (.20)
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