-----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, Gb1J+XZyNKBnhcj5NJ4rzeGZbEeUeb8JMUR/FDZw0IzqUjVjbS9mSySQmvrKEILF gEdJyr3X7Qg9JTM7zkOi1w== 0001047469-98-030416.txt : 19980812 0001047469-98-030416.hdr.sgml : 19980812 ACCESSION NUMBER: 0001047469-98-030416 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980811 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERIGON INC CENTRAL INDEX KEY: 0000903129 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLES & PASSENGER CAR BODIES [3711] IRS NUMBER: 954318554 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-21810 FILM NUMBER: 98682451 BUSINESS ADDRESS: STREET 1: 5462 IRWINDALE AVE CITY: IRWINDAL STATE: CA ZIP: 91706 BUSINESS PHONE: 8189321200 10-Q 1 10-Q 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 For the quarterly period ended June 30, 1998 [ ] 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: 0-21810 -------- AMERIGON INCORPORATED ------------------------------------------------------ (Exact name of registrant as specified in its charter) California 95-4318554 - ---------------------------------------------- ---------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 5462 Irwindale Avenue, Irwindale, California 91706 - ---------------------------------------------- ---------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (626) 815-7400 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 ----- ----- At July 31, 1998 the registrant had 12,550,445 shares of Class A Common Stock, no par value; no shares of Class B Common Stock, no par value; and no shares Preferred Stock, no par value, issued and outstanding. (1) AMERIGON INCORPORATED TABLE OF CONTENTS Part I. FINANCIAL INFORMATION Item 1. Financial Statements 2 Balance Sheets 3 Statements of Operations 4 Statements of Cash Flows 5 Notes to Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 Part II. OTHER INFORMATION 11 Item 4. Submission of Matters to a Vote of Security Holders Item 6. Exhibits and Reports on Form 8-K Signature 12
(2) PART I ITEM 1. FINANCIAL STATEMENTS AMERIGON INCORPORATED (A DEVELOPMENT STAGE ENTERPRISE) BALANCE SHEETS (IN THOUSANDS)
December 31, June 30, 1997 1998 ------------ -------- ASSETS Current assets: Cash & cash equivalents $ 6,037 $ 4,054 Short-term investments 2,400 560 Accounts receivable less allowance of $80 255 135 Receivable due from joint venture partner 1,000 1,000 Inventory 35 89 Prepaid expenses and other assets 196 133 ------- ------- Total current assets 9,923 5,971 Property and equipment, net 645 802 ------- ------- Total assets $10,568 $ 6,773 ------- ------- ------- ------- LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilites: Accounts payable $ 650 $ 293 Deferred revenue 97 97 Accrued liabilities 350 458 ------- ------- Total current liabilities 1,097 848 Long-term portion of capital lease 41 27 Shareholders' equity: Preferred stock, no par value; 5,000 shares authorized, none issued and outstanding Common stock: Class A - no par value; 40,000 shares authorized, 9,550 issued and outstanding at June 30, 1998 and December 31, 1997 (An additional 3,000 shares held in escrow) 28,149 28,149 Class B - no par value; 3,000 shares authorized, none issued and outstanding - - Contributed capital 9,882 9,882 Deficit accumulated during development stage (28,601) (32,133) ------- ------- Total shareholders' equity 9,430 5,898 ------- ------- Total liabilities and shareholders' equity $10,568 $6,773 ------- ------- ------- -------
See accompanying notes to the condensed financial statements (3) AMERIGON INCORPORATED (A DEVELOPMENT STAGE ENTERPRISES) STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
From April 23, 1991 Three Months Ended Six Months Ended (inception) June 30, June 30, to June 30, 1997 1998 1997 1998 1998 --------- --------- --------- --------- ------------- Revenues: Product $- $7 $- $7 $7 Development contracts and related grants 350 274 734 358 17,568 Grants - - 12 - 6,183 -------- -------- -------- -------- -------- Total revenues 350 281 746 365 23,758 Costs and expenses: Product - 11 - 11 11 Direct development contract and related grant costs 1,020 - 1,889 - 20,904 Direct grant costs - - 28 - 4,757 Research and development 456 1,128 712 2,152 13,011 Selling, general and administrative, including reimbursable expenses 1,395 957 2,189 1,970 20,228 -------- -------- -------- -------- -------- Total costs and expenses 2,871 2,096 4,818 4,133 58,911 -------- -------- -------- -------- -------- Operating Loss (2,521) (1,815) (4,072) (3,768) (35,153) Interest income 148 78 215 174 1,217 Interest expense - - (117) - (282) Gain on disposal of assets - 62 - 62 2,425 -------- -------- -------- -------- -------- Net loss before extraordinary items ($2,373) ($1,675) ($3,974) ($3,532) ($31,793) Extraordinary loss from extinguishment of indebtedness - - (340) - (340) -------- -------- -------- -------- -------- Net loss ($2,373) ($1,675) ($4,314) ($3,532) ($32,133) -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Basic and diluted net loss per share before extraordinary item ($0.25) ($0.18) ($0.50) ($0.37) -------- -------- -------- -------- -------- -------- -------- -------- Basic and diluted net loss per share ($0.25) ($0.18) ($0.54) ($0.37) -------- -------- -------- -------- -------- -------- -------- -------- Weighted average number of shares outstanding 9,543 9,550 8,024 9,550 -------- -------- -------- -------- -------- -------- -------- --------
See accompanying notes to the condensed financial statements (4) AMERIGON INCORPORATED (A DEVELOPMENT STAGE ENTERPRISES) STATEMENTS OF CASH FLOWS (IN THOUSANDS) (UNAUDITED)
From April 23, 1991 Six Months Ended (inception) to June 30, June 30, 1997 1998 1998 --------- --------- ------------- Operating Activities: Net loss ($4,314) ($3,532) ($32,133) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 195 241 1,315 Provision for doubtful account - - 190 Stock option compensation - - 712 Gain from sale of assets - (62) (2,425) Contributed capital-founders' services provided without cash compensation - - 300 Change in operating assets and liabilities: Accounts receivable 526 120 (325) Unbilled revenue 957 - - Inventory - (54) (109) Prepaid expenses and other assets 427 63 (133) Accounts payable (1,201) (186) 116 Deferred revenue 5 - 97 Accrued liabilities 619 (5) 382 -------- ------- -------- Net cash used in operating activities (2,786) (3,415) (32,013) Investing Activities: Purchase of property and equipment (113) (398) (2,144) Proceeds from sale of assets - - 2,800 Receivable from sale of assets - - (1,000) Short term-investments sold (purchased) (1,321) 1,840 (560) -------- ------- -------- Net cash provided (used) in investing activities (1,434) 1,442 (904) Financing Activities: Proceeds sale of common stock units, net 17,444 - 34,772 Proceeds from exercise of stock options - - 160 Repurchase of common stock - - (15) Borrowing under line of credit - - 6,280 Repayment of line of credit (1,187) - (6,280) Repayment of capital lease (9) (10) (48) Proceeds from Bridge Financing - - 3,000 Repayment of Bridge Financing (2,850) - (3,000) Proceeds of notes payable to shareholder 250 - 450 Repayment of note payable to shareholder (450) - (450) Notes payable to shareholders contributed to capital - - 2,102 -------- ------ -------- Net cash provided by financing activities 13,198 (10) 36,971 Net increase (decrease) in cash and cash equivalents 8,978 (1,983) 4,054 Cash and cash equivalents at beginning of period 203 6,037 - -------- ------- -------- Cash and cash equivalents at end of period $9,181 $4,054 $4,054 -------- ------- -------- -------- ------- -------- Supplemental Disclosure of Cash Flow Information: Cash paid for: Interest $120 - $280 ------- ------- -------- ------- ------- -------- Supplemental Disclosure of Non-Cash Transaction: Conversion of Bridge Debentures into warrants $150 - $150 ------- ------- -------- ------- ------- --------
See accompanying notes to the condensed financial statements (5) AMERIGON INCORPORATED (A DEVELOPMENT STAGE ENTERPRISE) NOTES TO UNAUDITED FINANCIAL STATEMENTS NOTE 1 - THE COMPANY: Amerigon Incorporated (the "Company") is a development stage enterprise, which was incorporated in California on April 23, 1991 primarily to develop, manufacture and market proprietary, high technology automotive components and systems for gasoline-powered and electric vehicles. NOTE 2 - BASIS OF PRESENTATION AND SUMMARY OF CERTAIN ACCOUNTING POLICIES: The accompanying balance sheet as of June 30, 1998 and the statements of operations and cash flows for the three and six months ended June 30, 1998 and for the period from April 23, 1991 (inception) to June 30, 1998 have been prepared by the Company without audit. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for fair presentation have been included. The results of operations for the three month and six month periods ended June 30, 1998 are not necessarily indicative of the operating results for the full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These condensed financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Form 10-K for the year ended December 31, 1997. DEVELOPMENT CONTRACT REVENUES AND RELATED GRANTS. Historically, the Company entered into a number of fixed price contracts under which revenue is recognized using the percentage of completion method, or in the case of short duration contracts, when the prototype or services are delivered. Development contract revenues earned are recorded on the balance sheet as Unbilled Revenue until billed. The Company has received government grants, which paralleled one of its development contracts. These grants are included in development contract and related grant revenues. GRANT REVENUES. Revenue from government agency grants and other sources pursuant to cost-sharing arrangements is recognized when reimbursable costs have been incurred. Grant revenues earned are recorded on the balance sheet as Unbilled Revenue until billed. (6) NOTE 3 - NET LOSS PER SHARE: The Company's net loss per share calculations are based upon the weighted average number of shares of common stock outstanding. Excluded from this calculation are the 3,000,000 Escrowed Contingent Shares. Common stock equivalents (stock options and stock warrants) are anti-dilutive in both periods and are excluded from the net loss per share calculation. NOTE 4 - RECEIVABLE DUE FROM JOINT VENTURE PARTNER The receivable due from IVS, Inc., a joint venture formed between Amerigon and Yazaki Corporation, was paid on July 23, 1998. (7) PART 1 ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS SECOND QUARTER 1998 COMPARED WITH SECOND QUARTER 1997 REVENUES. Revenues for the three months ended June 30, 1998 ("Second Quarter 1998") were $281,000 as compared with revenues of $350,000 in the three months ended June 30, 1997 ("Second Quarter 1997"). The decrease in development contract and related grant revenues was due principally to the completion of development contracts, somewhat offset by an increase in revenues related to prototype seat contracts. The Company does not intend to pursue any additional significant grants or development contracts. Additionally the Company made its first production shipments of its Climate Control Seat systems in Second Quarter 1998. The Company has focused its efforts on developing its core products and technologies (the Climate Control Seat system and radar-based sensing devices), developing the manufacturing capability for such products and bringing them to market as rapidly as possible. Because of the current development focus, and the decision not to pursue actively any more significant grants or development contracts, the Company expects that revenues for the foreseeable future will be significantly less than in prior periods. DIRECT DEVELOPMENT CONTRACT AND RELATED GRANT COSTS. No direct development contract and related grant costs were incurred in the Second Quarter 1998 compared to $1,020,000 in the Second Quarter 1997 primarily due to the end of activity in the Company's electric vehicle program (related to development contracts) and the divestiture of the IVS-TM- product line. Additionally, all expenses related to prototype orders from customers for seat and radar products and costs associated with the electric vehicle program are recorded as research development expense for the Second Quarter 1998. RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses increased to $1,128,000 in Second Quarter 1998 from $456,000 in Second Quarter 1997. The increase in Second Quarter 1998 was due to higher levels of research and development activity on the Company's Climate Control Seat system and radar products. As mentioned previously, all expenses related to prototype orders from customers for these two products and the electric vehicle program are now recorded as research and development expense. As the Company focuses on the development of its core products, these expenses can be expected to increase in future periods. (8) SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and administrative ("SG&A") expenses decreased to $957,000 in Second Quarter 1998 compared to $1,395,000 in Second Quarter 1997. The decrease in Second Quarter 1998 was due to a reclassification of personnel and costs incurred in 1997 for (1) fees related to a proposed joint venture for the electric vehicle business, (2) legal expenses and (3) relocation expenses. These were somewhat offset by the fact that no SG&A expenses were allocated to development contracts in 1998 as in the prior year. INTEREST INCOME. Net interest income in 1998 decreased due to a decline in invested cash. SIX MONTHS 1998 COMPARED WITH SIX MONTHS 1997 REVENUES. Revenues for the six months ended June 30, 1998 ("1998") were $365,000 as compared with revenues of $746,000 in the six months ended June 30, 1997 ("1997"). The decrease was primarily due to the same reasons as given for the Second Quarter. DIRECT DEVELOPMENT CONTRACT AND RELATED GRANT COSTS. No direct development contract and related grant costs were incurred in the 1998 compared to $1,889,000 in 1997. The decrease was primarily due to the same reasons as given for the Second Quarter. RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses increased to $2,152,000 in 1998 from $712,000 in 1997 for the same reasons given for the quarter. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and administrative ("SG&A") expenses decreased to $1,970,000 in 1998 compared to $2,189,000 in 1997. The decrease was primarily due to the same reasons as given for the Second Quarter. INTEREST INCOME. Net interest income in 1998 decreased due to a decline in invested cash. LIQUIDITY AND CAPITAL RESOURCES At June 30, 1998, the Company had working capital of $5,123,000. The Company's principal sources of operating capital have been the proceeds of its various financing transactions and, to a lesser extent, revenues from grants, development contracts and sale of prototypes to customers. Cash and cash equivalents decreased by $1,983,000 in 1998 primarily due to cash used in operating activities. Operating activities used $3,415,000, which was primarily a result of the net loss of $3,532,000. Investing activities provided $1,442,000, of which $1,840,000 was the result of the sale of short term investments. The Company expects to incur losses for the foreseeable future due to the continuing cost of its product development and marketing activities and to begin volume manufacturing operations when it is required. Current working capital is not sufficient to fund the Company's operations for (9) the next twelve months. The Company will use current cash and investments, but will need cash from financing sources to fund its near term operations and before the Company can achieve profitability from its operations. There can be no assurance that profitability can be achieved in the future. The Company is focused on bringing products to market and achieving revenues based upon its available resources. The Company will continue its program to divest assets or businesses where it does not have sufficient resources to bring the product to market and where it will enhance shareholder value. As has been previously mentioned, the Company is now striving to accomplish a strategic venture with the Company's electric vehicle program. Although the Company has begun limited production on its Climate Control Seat product, larger orders for the seat product and the ability to begin production on the radar product will require significant expenses for tooling product parts and to set up manufacturing and/or assembly processes. The Company also expects to require significant capital to fund other near-term production engineering and manufacturing, as well as research and development and marketing of these products. The Company does not intend to pursue significant grants or development contracts to fund operations and therefore is highly dependent on its current working capital sources. The Company will require additional equity and/or debt financing. There can be no assurance that either of these sources will be available in the future. Certain matters discussed or referenced in this report, including the Company's intention to develop, manufacture and market Climate Control Seats and radar products and the Company's expectation of reduced revenues and continuing losses for the foreseeable future, are forward looking statements. Other forward looking statements may be identified by the use of forward looking terminology such as "may", "will", "expect", "believe", "estimate", "anticipate", "continue", or similar terms, variations of such terms or the negative of such terms. Such statements are based upon management's current expectations and are subject to a number of risks and uncertainties which could cause actual results to differ materially from those described in the forward looking statements. Such risks and uncertainties include the market demand for and performance of the Company's products, the Company's ability to develop, market and manufacture such products successfully, the viability and protection of the Company's patents and other proprietary rights, and the Company's ability to obtain new sources of financing. Additional risks associated with the company and its business and prospects are described in the Company's Annual Report on Form 10-K for the year ended December 31, 1997. (10) PART II OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The Annual Meeting of Shareholders was held on June 16, 1998. The following summarizes each matter voted upon at the meeting and the number of votes cast for or against and the number of abstentions. As to the election of directors, the number of votes cast as to each nominee was as follows:
For Against Abstain ----------- -------- -------- Lon E. Bell 11,435,860 0 175,627 Roy A. Anderson 11,434,660 0 174,427 John W. Clark 11,436,160 0 174,127 A. Stephens Hutchcraft, Jr. 11,434,660 0 175,627 Michael R. Peevey 11,436,160 0 174,427 Richard A. Weisbart 11,433,860 0 176,427
ITEM 5. OTHER INFORMATION The company hereby advises shareholders that until further notice March 29, 1999 is the date after which notice of a shareholder sponsored proposal submitted outside the processes of Rule 14a-8 under the Securities Exchange Act of 1934 (i.e., a proposal to be presented at the next annual meeting of shareholders but not submitted for inclusion in the Company's proxy statement) will be considered untimely under the SEC's proxy rules. The Company to date has not established any advance notice provision for shareholder proposals. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits None (b) Reports on Form 8-K None (11) SIGNATURE 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. AMERIGON INCORPORATED Registrant Date: July 31, 1998 /s/ Scott O. Davis ------------------- Scott O. Davis Vice President Finance and Chief Financial Officer (12) EX-27 2 EXHIBIT 27
5 1,000 3-MOS DEC-31-1998 APR-01-1998 JUN-30-1998 4,054 560 135 0 89 5,971 2,117 (1,315) 6,773 849 0 0 0 28,149 0 6,773 0 365 0 4,133 0 0 0 (3,532) 0 (3,532) 0 0 0 (3,532) (0.37) (0.37)
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