-----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, QEbe5DgZ6u6V7e5N8GHNK8fqkyd64pXm3rqyDMJ/+O0m2KQkhBb9ZyqthbsmliBI Z3h+a3pucBsZ5ZHQApDM6w== 0000950144-97-012001.txt : 19971113 0000950144-97-012001.hdr.sgml : 19971113 ACCESSION NUMBER: 0000950144-97-012001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971113 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AER ENERGY RESOURCES INC /GA CENTRAL INDEX KEY: 0000863872 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES [3690] IRS NUMBER: 341621925 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-21926 FILM NUMBER: 97715346 BUSINESS ADDRESS: STREET 1: 4600 HIGHLANDS PKWY STE G CITY: SMYRNA STATE: GA ZIP: 30082 BUSINESS PHONE: 4044332127 MAIL ADDRESS: STREET 1: 4600 HIGHLANDS PKWY STREET 2: SUITE G CITY: SMYRNA STATE: GA ZIP: 30082 10-Q 1 AER ENERGY RESOURCES, INC. 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1997 ------------------------------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ------------------------- ---------------------- Commission File Number 0-21926 --------------------------------------------------------- AER ENERGY RESOURCES, INC. -------------------------- (Exact name of registrant as specified in its charter) Georgia 34-1621925 ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 4600 Highlands Parkway, Suite G, Smyrna, Georgia 30082 ---------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (770) 433-2127 ---------------------------------------------------- (Registrant's telephone number, including area code) Not Applicable - ------------------------------------------------------------------------------ (Former name, former address and former fiscal year, if changed since last report) 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 ---- ---- APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of Common Stock, as of the latest practicable date. There were 24,791,763 shares of Common Stock outstanding as of October 31, 1997. 2 AER ENERGY RESOURCES, INC. FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1997 INDEX
Page ---- PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) - ------- -------------------------------- Condensed Balance Sheets - September 30, 1997 and December 31, 1996. 3 Condensed Statements of Operations - Three Months Ended September 30, 4 1997 and 1996, Nine Months Ended September 30, 1997 and 1996, and Period From July 17, 1989 (Date of Inception) to September 30, 1997. Condensed Statements of Cash Flows - Nine Months Ended September 30, 5 1997 and 1996 and Period From July 17, 1989 (Date of Inception) to September 30, 1997. Notes to Condensed Financial Statements - September 30, 1997. 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 8 - ------- --------------------------------------------------------------- RESULTS OF OPERATIONS --------------------- PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 13 - ------- --------------------------------
Page 2 3 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) AER ENERGY RESOURCES, INC. (A DEVELOPMENT STAGE COMPANY) CONDENSED BALANCE SHEETS
SEPTEMBER 30, DECEMBER 31, 1997 1996 ------------ ------------- ASSETS (Unaudited) Current assets: Cash and cash equivalents ........................................... $ 12,250,411 $ 18,728,427 Trade accounts receivable (less allowances of $2,500 at September 30, 1997 and $2,411 at December 31, 1996) ............................. 79,987 3,475 Inventories ......................................................... 210,251 100,399 Prepaid expenses .................................................... 137,965 178,137 ------------ ------------ Total current assets ................................................... 12,678,614 19,010,438 Equipment and improvements: Machinery and equipment ............................................. 3,241,621 2,993,555 Office equipment .................................................... 463,956 445,926 Leasehold improvements .............................................. 254,766 254,766 ------------ ------------ 3,960,343 3,694,247 Less accumulated depreciation ....................................... 2,427,836 2,033,392 ------------ ------------ 1,532,507 1,660,855 Other long term assets ................................................. 16,841 16,841 ------------ ------------ Total assets ........................................................... $ 14,227,962 $ 20,688,134 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable .................................................... $ 175,158 $ 168,911 Accrued royalties - related party ................................... 25,000 30,000 Other accrued expenses .............................................. 358,642 309,855 ------------ ------------ Total current liabilities .............................................. 558,800 508,766 Deferred rental expense ................................................ 2,914 2,957 Stockholders' equity: Convertible debentures .............................................. -- 909,198 Preferred stock, no par value: Authorized - 10,000,000 shares; no shares issued and outstanding . -- -- Common Stock, no par value: Authorized - 100,000,000 shares; issued and outstanding - 24,791,763 shares at September 30, 1997 and 24,276,080 shares at December 31, 1996 .............................................. 66,519,347 65,675,743 Notes receivable from common stock sales ............................ (71,875) (71,875) Unearned stock compensation ......................................... (155,227) (328,455) Deficit accumulated during the development stage .................... (52,625,997) (46,008,200) ------------ ------------ Total stockholders' equity ............................................. 13,666,248 20,176,411 ------------ ------------ Total liabilities and stockholders' equity ............................. $ 14,227,962 $ 20,688,134 ============ ============
Note: The condensed balance sheet at December 31, 1996 has been derived from the audited financial statements of AER Energy Resources, Inc. at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. See notes to condensed financial statements. Page 3 4 AER ENERGY RESOURCES, INC. (A DEVELOPMENT STAGE COMPANY) CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
PERIOD FROM JULY 17, 1989 THREE MONTHS ENDED NINE MONTHS ENDED (DATE OF SEPTEMBER 30, SEPTEMBER 30, INCEPTION) TO ---------------------------- ----------------------------- SEPTEMBER 30, 1997 1996 1997 1996 1997 ------------ ------------ ------------- ------------ ------------ Revenues ................. $ 82,090 $ 1,463 $ 105,808 $ 21,554 $ 335,583 Cost of sales ............ 988,187 214,008 1,961,304 1,146,389 6,045,191 ------------ ------------ ------------ ------------ ------------ Gross margin ............. (906,097) (212,545) (1,855,496) (1,124,835) (5,709,608) Costs and expenses: Research and development - related party ....... -- -- -- -- 1,145,913 - other ............... 943,916 1,186,416 3,168,390 2,891,076 28,715,257 Marketing, general and administrative - related party ....... 21,717 24,953 70,767 124,350 1,213,868 - other ............... 705,926 670,377 2,161,112 2,149,111 18,586,151 ------------ ------------ ------------ ------------ ------------ Total costs and expenses . 1,671,559 1,881,746 5,400,269 5,164,537 49,661,189 ------------ ------------ ------------ ------------ ------------ Operating loss ........... (2,577,656) (2,094,291) (7,255,765) (6,289,372) (55,370,797) Interest income .......... 190,798 299,024 659,405 788,848 3,345,803 Interest expense - related parties ..... -- -- -- -- (264,445) ------------ ------------ ------------ ------------ ------------ Net loss ................. $ (2,386,858) $ (1,795,267) $ (6,596,360) $ (5,500,524) $(52,289,439) ============ ============ ============ ============ ============ Net loss per share ....... $ (0.10) $ (0.07) $ (0.27) $ (0.25) $ (3.79) ============ ============ ============ ============ ============ Weighted average shares outstanding ............ 24,791,763 24,058,133 24,573,637 22,178,701 13,781,109
See notes to condensed financial statements. Page 4 5 AER ENERGY RESOURCES, INC. (A DEVELOPMENT STAGE COMPANY) CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
PERIOD FROM JULY 17, 1989 (DATE OF NINE MONTHS ENDED SEPTEMBER 30, INCEPTION) TO ------------------------------ SEPTEMBER 30, 1997 1996 1997 ------------- ------------- ------------- OPERATING ACTIVITIES: Net loss ................................................ $ (6,596,360) $ (5,500,524) $(52,289,439) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization ......................... 394,444 414,583 2,823,843 Amortization of unearned stock compensation ........... 86,197 112,170 597,664 Grant of compensatory stock options ................... -- -- 14,063 Loss on disposal of equipment ......................... -- 7,890 38,591 Deferred rental expense ............................... (43) (3,456) 2,914 Accretion of discount on marketable securities ........ -- -- (187,407) Changes in operating assets and liabilities: Trade accounts receivable ........................... (76,512) 6,748 (79,987) Inventories ......................................... (109,852) 72,411 (210,251) Prepaid expenses and other current assets ........... 40,172 (62,167) (138,275) Accounts payable .................................... 6,247 (203,149) 175,158 Accrued royalties payable-related party ............. (5,000) (35,000) 25,000 Other current liabilities ........................... 48,787 (7,362) 517,576 ------------ ------------ ------------ Net cash used in operating activities ................... (6,211,920) (5,197,856) (48,710,550) INVESTING ACTIVITIES: Purchases of equipment and improvements ................. (266,096) (101,120) (4,021,268) Purchase of marketable securities ....................... -- -- (11,512,296) Purchase of license agreement ........................... -- -- (250,000) Proceeds from marketable securities ..................... -- -- 11,700,000 Changes in other assets ................................. -- -- (140,501) ------------ ------------ ------------ Net cash used in investing activities ................... (266,096) (101,120) (4,224,065) FINANCING ACTIVITIES: Proceeds from revolving credit note to related parties .. -- -- 5,430,000 Issuance of convertible debentures, net of issuance costs -- -- 9,834,500 Payments on notes payable to related parties ............ -- -- (1,150,000) Payments received on promissory notes ................... -- -- 57,425 Issuance of common stock, exercise of stock options ..... -- 12,440 133,546 Issuance of common stock, net of issuance costs ......... -- 9,365,217 50,879,555 ------------ ------------ ------------ Net cash provided by financing activities ............... -- 9,377,657 65,185,026 ------------ ------------ ------------ (Decrease) increase in cash and cash equivalents ........ (6,478,016) 4,078,681 12,250,411 Cash and cash equivalents at beginning of period ........ 18,728,427 16,417,152 -- ------------ ------------ ------------ Cash and cash equivalents at end of period .............. $ 12,250,411 $ 20,495,833 $ 12,250,411 ============ ============ ============
See notes to condensed financial statements. Page 5 6 AER ENERGY RESOURCES, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) SEPTEMBER 30, 1997 1. BASIS OF PRESENTATION The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These financial statements should be read in conjunction with the Company's audited financial statements included in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 1996. Operating results for the three and nine month periods ended September 30, 1997 are not necessarily indicative of the results that may be expected for the year ended December 31, 1997 or any interim period. 2. SIGNIFICANT ACCOUNTING POLICIES Description of Business AER Energy Resources, Inc. was incorporated on July 17, 1989 and since inception has engaged in the development and commercialization of high energy density, rechargeable zinc-air batteries. The Company's operations to date have primarily been focused on developing and updating the technology, setting up the manufacturing process, testing and selling zinc-air batteries, recruiting personnel and similar activities. The Company began selling its first product in August 1994. Sales from August 1994 through September 30, 1997 have been minimal. Until significant product sales occur, the Company is considered to be a development stage company for financial reporting purposes. Cash and Cash Equivalents Cash and cash equivalents consist of cash, bank deposits and highly liquid investments with maturities of three months or less when purchased and are stated at cost, which approximates market. Page 6 7 Inventories The Company's inventory has been valued at the lower of cost or market, using the first in, first out method. The components of inventory are listed below.
SEPTEMBER 30, DECEMBER 31, 1997 1996 ------------- ------------ Raw material $176,207 $ 95,814 Work in process 34,044 4,585 -------- -------- Total $210,251 $100,399 ======== ========
Use of Estimates In accordance with FASB Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," the Company records impairment losses on long-lived assets used in operations when events and circumstances indicate that the assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets. Based on the Company's estimate of future undiscounted cash flows, the Company expects to recover the carrying amounts of its fixed assets. Nonetheless, it is reasonably possible that the estimate of undiscounted cash flows may change in the near term resulting in the need to write-down those assets to fair value. During the three and nine months ended September 30, 1996, the Company recorded a write-off of obsolete equipment with a net book value of $0 and $7,890, respectively, which was included in marketing, general and administrative expenses. Page 7 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL Since its inception, the Company has been a development stage company primarily engaged in developing rechargeable zinc-air battery technology, establishing the manufacturing process, defining and developing market opportunities, testing and selling rechargeable zinc-air batteries and recruiting and training personnel. Much of the Company's marketing focus over the last few years has been to seek a commitment from one or more original equipment manufacturers (OEMs) of portable computers to design a product that is electrically and mechanically compatible with an AER Energy rechargeable zinc-air battery. Management now believes it will be more difficult than originally anticipated to obtain such a commitment from a portable computer OEM due in large part to the growth in the power demands of portable computers. As a result, the Company has begun to expand its marketing focus to include additional electronic products that could benefit from the key attributes of AER Energy's zinc-air technology but require less power. During the second and fourth quarters of 1997, the Company announced two such products: satellite telephones and data acquisition devices. The Company's AER Energy PowerSlice Pro(TM) accessory battery is currently being supplied to end-users as a satellite telephone accessory by Alegna, Inc. under private label as the PowerLink(TM). The PowerLink battery is designed for the OmniQuestTM satellite telephone system manufactured by Mitsubishi Electric Corporation. In October 1997, the Company announced a new application of its PowerSlice Pro battery -- powering a remote data acquisition device. Bartizan Data Systems LLC selected the PowerSlice Pro to use with its Expo! The Database Builder(TM), a remote data acquisition device used at tradeshows to scan attendee badges and compile lead information. The AER Energy PowerSlice LX(TM) battery, an accessory battery designed for the Hewlett-Packard OmniBook 600 and 800 portable computers, will no longer be offered for sale as of November 1997. The PowerSlice LX has an older cell design and is not compatible with the most current, more powerful version of the OmniBook 800 portable computer. The Company has recorded minimal revenues from the sales PowerSlice Pro and PowerSlice LX batteries for the three and nine-month periods ended September 30, 1997. The Company has incurred cumulative losses of $52.3 million since inception to September 30, 1997 and expects to continue to incur operating losses at least through the end of 1998. The Company was formed to develop and commercialize rechargeable zinc-air batteries for portable electronic products using technology licensed from Dreisbach Electromotive, Inc. ("DEMI"). DEMI was formed in 1982 to conduct research and development on electric vehicles and battery systems utilizing, among others, zinc-air technology. DEMI's zinc-air development programs included applications for electric vehicles and portable products. The Company has Page 8 9 licensed, through DEMI (the "DEMI License"), the rights to use certain DEMI technology including zinc-air, in non-motor vehicle applications, while DEMI has retained the rights to zinc-air technology for motor vehicle applications and to its other technologies for motor vehicle applications and batteries producing over 500 watts continuous power output. Effective October 15, 1993, the DEMI License was amended so that, under certain circumstances, some or all of the royalties due under the DEMI License are payable to the shareholders of DEMI rather than to DEMI. RESULTS OF OPERATIONS Three Months Ended September 30, 1997 and 1996 The Company generated net revenues of $82,000 for the three months ended September 30, 1997, compared to $1,000 for the three months ended September 30, 1996. The revenues for the quarter ended September 30, 1997 resulted primarily from the sales of PowerLink batteries. The Company's cost of sales for the three months ended September 30, 1997 increased to $988,000 from $214,000 for the three months ended September 30, 1996. The high cost of sales relative to revenues is primarily due to the manufacturing inefficiencies and high material costs resulting from low production volumes. Research and development expenses decreased to $944,000 for the three months ended September 30, 1997 from $1,186,000 for the same period in 1996. This decrease was due in part to a $368,000 reduction in the manufacturing overhead costs allocated to research and development during the quarter ended September 30, 1997 as compared to the same period in 1996. This allocation in 1996 reflected the use of manufacturing facilities for technology development and product testing. The Company also experienced a $30,000 decrease in material, design and tooling costs. These decreases were partially offset by increases of $83,000 in personnel-related costs and $68,000 in legal costs related to the Company's patent activity. Marketing, general and administrative expenses increased to $728,000 for the quarter ended September 30, 1997 from $695,000 for the same period in 1996. In the quarter ended September 30, 1997, the Company experienced a $58,000 increase in personnel-related expenses and a $28,000 increase in marketing, advertising and public relations costs compared to the same quarter in 1996. These increases were partially offset by a $26,000 decrease in facility expenses and a $24,000 reduction in the write-off of obsolete inventory. Nine Months Ended September 30, 1997 and 1996 The Company generated net revenues of $106,000 for the nine months ended September 30, 1997 as compared to $22,000 for the same period in 1996. The Company's cost of sales for the nine months ended September 30, 1997 was Page 9 10 $1,961,000 as compared to $1,146,000 for the same period in 1996. The high cost of sales relative to revenues is primarily due to low production volumes. Research and development expenses increased to $3,168,000 for the nine months ended September 30, 1997 from $2,891,000 for the same period in 1996. This increase was due in part to a $136,000 increase in personnel-related costs, a $74,000 increase in legal fees related to patent activity, a $47,000 increase in material, design, and tooling costs and a $37,000 increase in allocated facility costs. These increases were partially offset by a $12,000 decrease in depreciation expense and an $11,000 reduction in travel costs. Marketing, general and administrative expenses decreased to $2,232,000 for the nine months ended September 30, 1997 from $2,273,000 for the same period in 1996. This decrease was due primarily to a $63,000 reduction in allocated facility costs, a $74,000 decrease in warranty expense, a $64,000 decrease in the write-off of obsolete inventory, and a $54,000 decrease in minimum royalty expense pursuant to the DEMI License. These decreases were partially offset by a $175,000 increase in personnel-related costs and a $34,000 credit to bad debt expense in the nine-month period ended September 30, 1996 resulting from the collection of a receivable that had been written off. LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION As of September 30, 1997, the Company had cash and cash equivalents of $12.3 million. The Company anticipates using these funds as needed to fund capital equipment purchases, research and development efforts, sales and marketing activities, production of commercial and prototype zinc-air battery products, development of relationships with OEMs, working capital and general corporate purposes as determined by management. In the interim, the Company invests any excess funds in government securities and other short-term, investment grade, interest-bearing instruments. Net cash used in operating activities increased to $6.2 million for the nine months ended September 30, 1997 from $5.2 million for the same period in 1996, primarily due to the increases in costs and expenses discussed above in "Results of Operations". For the nine months ended September 30, 1997, the Company used net cash of $266,000 for equipment purchases as compared to $101,000 for equipment purchases for the same period in 1996. During 1997, the remaining $900,000 in principal of the Company's 8% convertible debentures plus accrued interest were converted into 518,683 shares of the Company's common stock at an average conversion price of $1.93 per share. Pursuant to the DEMI License, the Company has agreed to pay DEMI royalties of 4% of net sales, subject to certain minimum amounts and to possible increases or decreases to a maximum of 4% and a minimum of 2%, as specified in the DEMI License. The applicable percentage of royalties is currently 4% of net sales. The Company recorded royalty expense for Page 10 11 the nine-month periods ended September 30, 1997 and 1996 of $75,000 and $125,000, respectively. Minimum royalty expenses are included in marketing, general and administrative expenses in the statements of operations. Actual royalties due as a percentage of sales under the DEMI License are recorded in cost of sales. As of September 30, 1997 and December 31, 1996, $25,000 and $30,000, respectively, of these royalty payments remained unpaid. The future minimum royalty payments specified by the DEMI License consist of the following: Year Ending December 31, 1997................................................. $100,000 1998................................................. $100,000 1999................................................. $ 50,000
The Company currently anticipates that its existing cash balances will fund operations and continue technology development at the current level of activity through at least the middle of 1998. However, it may be necessary for the Company to increase its research and development and marketing expenses as it continues to work to improve its zinc-air technology, to expand its markets for its rechargeable zinc-air batteries and to pursue its relationships with OEMs of portable electronic devices. It may also be necessary for the Company to expand its manufacturing capacity in order to meet anticipated future sales requirements. The Company will need working capital beyond its current levels, and depending on the Company's results of operations, the Company may find it necessary to obtain additional working capital on an accelerated basis or in amounts greater than currently anticipated. There can be no assurance that additional equity or debt financing will be available when needed or on terms acceptable to the Company. To date, both costs and development times have substantially exceeded the Company's forecasts. In addition, the battery business is a chemical processing business and, as such, the Company will require specialized equipment to manufacture its zinc-air batteries. Future equipment additions could exceed current Company estimates in cost, complexity and development time. The market price of the Company's common stock has fluctuated significantly since it began to be publicly traded on July 1, 1993 and may continue to be highly volatile. Factors such as delays by the Company in achieving development goals, inability of the Company to commercialize or manufacture its products, fluctuation in the Company's operating results, changes in earning estimates by analysts, announcements of technological innovations or new products by the Company or its competitors, perceived changes in the markets for various OEM applications incorporating the Company's products, the announcement or termination of relationships with OEMs, and general market conditions may cause significant fluctuations in the market price of the Company's common stock. The market prices of the stock of many high technology companies have fluctuated substantially, often unrelated to the operating or research and development performance of the specific companies. Such market fluctuations could adversely affect the market price for the Company's common stock. This report contains statements which to the extent that they are not recitations of historical fact, may constitute "forward looking statements" within the meaning of applicable federal securities laws and are based on the Company's current expectations and assumptions. Page 11 12 These expectations and assumptions are subject to a number of risks and uncertainties which could cause actual results to differ materially from those anticipated, which include but are not limited to the following: ability of the Company to achieve development goals, ability of the Company to commercialize its battery technology, development of competing battery technologies, ability of the Company to protect its proprietary rights to its technology, improvements in conventional battery technologies, demand for and acceptance of the Company's products in the marketplace, ability to obtain commitments from OEMs, ability of the Company to ramp up production to meet anticipated sales, impact of any future governmental regulations, impact of pricing, costs of materials, ability of the Company to raise additional funds and other factors affecting the Company's business that are beyond the Company's control. AER Energy, AER Energy PowerSlice Pro and AER Energy PowerSlice LX are trademarks of AER Energy Resources, Inc.; PowerLink is a trademark of Alegna, Inc.; OmniQuest is a trademark of Mitsubishi Electronics America, Inc.; Expo! The Database Builder is a trademark of Bartizan Data Systems LLC. Page 12 13 PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (A) EXHIBITS: EXHIBIT NUMBER DESCRIPTION OF EXHIBITS 11 Statement of Computation of Earnings per Share. 27 Financial Data Schedule (for SEC use only). (B) REPORTS ON FORM 8-K: The registrant did not file any reports on Form 8-K during the three months ended September 30, 1997. Page 13 14 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. AER ENERGY RESOURCES, INC. Date: November 11, 1997 By: /s/ David W. Dorheim ------------------------------ David W. Dorheim, President and Chief Executive Officer Date: November 11, 1997 By: /s/ M. Beth Donley ---------------------------- M. Beth Donley, Vice President, Chief Financial Officer, Secretary and Treasurer (Principal Financial Officer and Principal Accounting Officer) Page 14 15 INDEX TO EXHIBITS
EXHIBIT SEQUENTIALLY NUMBER DESCRIPTION NUMBERED PAGE - ------ ----------- ------------- 11 Statement of Computation of Earnings per Share. 16 27 Financial Data Schedule (for SEC use only).
Page 15 EX-11 2 COMPUTATION OF EARNINGS PER SHARE 1 EXHIBIT 11 AER ENERGY RESOURCES, INC. (A DEVELOPMENT STAGE COMPANY) COMPUTATION OF EARNINGS PER SHARE (UNAUDITED)
PERIOD FROM JULY 17, 1989 THREE MONTHS ENDED NINE MONTHS ENDED (DATE OF SEPTEMBER 30, SEPTEMBER 30, INCEPTION) TO ------------------------------ ------------------------------ SEPTEMBER 30, 1997 1996 1997 1996 1997 ------------ -------------- -------------- ------------ ------------ Weighted average common stock outstanding ............... 24,791,763 24,058,133 24,573,637 22,178,701 12,443,197 Common stock issued and stock options granted in accordance with SAB No. 83 ................... -- -- -- -- 1,337,912 ---------- -------------- -------------- ------------- ------------ Total ...................... 24,791,763 24,058,133 24,573,637 22,178,701 13,781,109 ========== ============== ============== ============= ============ Net loss................... $(2,386,858) $ (1,795,267) $ (6,596,360) $ (5,500,524) $(52,289,439) ========== ============== ============== ============= ============ Per share amount........... $ (0.10) $ (0.07) $ (0.27) $ (0.25) $ (3.79) ========== ============== ============== ============= ============
Page 16 EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONDENSED BALANCE SHEETS AND SUMMARY OF OPERATIONS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1997. 9-MOS DEC-31-1996 JAN-01-1997 SEP-30-1997 12,250,411 0 82,487 (2,500) 210,251 12,678,614 3,960,343 2,427,836 14,227,962 558,800 0 0 0 66,519,347 (52,853,099) 0 82,090 82,090 988,187 988,187 1,671,559 0 0 (2,386,858) 0 0 0 0 0 (2,386,858) (.10) 0
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