-----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, ScMMaMGvwaDFNk1NBVrBPJPHix1xmufSabB1LaxMPjgBOtpq6Vtakfb3cWrXRczr DQBHy0762muzJj78Had3aw== 0000950124-01-501290.txt : 20010516 0000950124-01-501290.hdr.sgml : 20010516 ACCESSION NUMBER: 0000950124-01-501290 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010331 FILED AS OF DATE: 20010515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: METEOR INDUSTRIES INC CENTRAL INDEX KEY: 0000912875 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-AUTO & HOME SUPPLY STORES [5531] IRS NUMBER: 841236619 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-12401 FILM NUMBER: 1640661 BUSINESS ADDRESS: STREET 1: 1401 BLAKE STREET STREET 2: SUITE 200 CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3035721135 MAIL ADDRESS: STREET 1: 1401 BLAKE STREET STREET 2: SUITE 200 CITY: DENVER STATE: CO ZIP: 80202 10-Q 1 c62500e10-q.txt FORM 10-Q FOR THE PERIOD ENDED MARCH 31, 2001 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the Quarterly Period ended March 31, 2001 Commission File Number: 0-27968 ACTIVE IQ TECHNOLOGIES, INC. -------------------------------------------------- (Exact Name of Issuer as Specified in its Charter) MINNESOTA 41-2004369 - ------------------------------ --------------------------------------- (State or Other Jurisdiction of (I.R.S. Employer Identification Number) Incorporation or Organization) 601 CARLSON PARKWAY, SUITE 1500, MINNETONKA, MN 55305 -------------------------------------------------------- (Address of Principal Executive Offices) (952) 449-5000 ---------------------------------------------------- (Registrant's Telephone Number, Including Area Code) ----------------------------------------------------- (Former Name and Address, if Changed Since Last Report) Check whether the issuer (1) has 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 [ ] There were 8,851,273 shares of the Registrant's $.01 par value common stock outstanding as of May 9, 2001. 2 Item 1: FINANCIAL STATEMENTS ACTIVE IQ TECHNOLOGIES, INC., FORMERLY KNOWN AS METEOR INDUSTRIES, INC. CONSOLIDATED BALANCE SHEETS ASSETS (Dollars in Thousands)
March 31, December 31, 2001 2000 (Unaudited) CURRENT ASSETS Cash $ 417 $ 264 Restricted cash 837 2,448 Accounts receivable-trade, net of allowance of $310 and $275, respectively 13,365 14,759 Accounts receivable, related party 1,483 1,053 Notes receivable 18 38 Notes receivable, related party 1,148 1,117 Inventory, net 3,148 3,921 Deferred tax asset 324 324 Other current assets 1,744 1,553 Total current assets 22,484 25,477 PROPERTY, PLANT AND EQUIPMENT, NET 10,020 16,437 OTHER NONCURRENT ASSETS Notes receivable, net 112 115 Notes receivable, related party 119 -0- Investments in closely held businesses 3,924 1,629 Intangibles, net 286 1,230 Other assets 272 267 Total other noncurrent assets 4,713 3,241 TOTAL ASSETS $ 37,217 $ 45,155
Continued on next page 2 3 ACTIVE IQ TECHNOLOGIES, INC., FORMERLY KNOWN AS METEOR INDUSTRIES, INC. CONSOLIDATED BALANCE SHEETS (Continued) LIABILITIES AND SHAREHOLDERS' EQUITY (Dollars in Thousands)
March 31, December 31, 2001 2000 (Unaudited) CURRENT LIABILITIES Accounts payable, trade $ 8,854 $ 11,039 Accounts payable, related party 37 40 Book overdraft 1,437 1,794 Current portion, long-term debt 1,980 3,798 Accrued expenses 1,073 1,440 Fuel taxes payable 470 574 Revolving credit facility 7,953 8,570 Total current liabilities 21,804 27,255 NONCURRENT LIABILITIES Deferred tax liability 2,556 2,556 Long-term debt 6,426 7,202 Accrued expenses 468 468 Total noncurrent liabilities 9,450 10,226 MINORITY INTEREST IN SUBSIDIARY 250 250 Total liabilities 31,504 37,731 COMMITMENTS AND CONTINGENCIES (Note 7) SHAREHOLDERS' EQUITY Preferred stock, $1.00 par value; 365,000 shares authorized, issued and outstanding, liquidation preference $730 365 365 Common stock, $.001 par value; authorized 10,000,000 shares, 4,424,379 and 3,705,903 shares issued and outstanding, respectively 4 4 Paid-in capital 8,071 5,695 Note receivable, related party (1,542) (1,686) Treasury stock, at cost, 132,098 shares held (489) (489) Retained earnings (deficit) (696) 3,535 Total shareholders' equity 5,713 7,424 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 37,217 $ 45,155
The accompanying notes are an integral part of the financial statements. 3 4 ACTIVE IQ TECHNOLOGIES, INC., FORMERLY KNOWN AS METEOR INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000 (UNAUDITED) (Dollars in Thousands except per share information)
March 31 March 31, 2001 2000 Net sales $42,067 $42,017 Cost of sales, excluding depreciation 37,325 36,379 Gross profit 4,742 5,638 Selling, general and administrative expenses 4,819 4,547 Depreciation and amortization 527 599 Impairment of long-lived assets 3,795 -0- Total operating expenses 9,141 5,146 (Loss) income from operations (4,399) 492 Other income and (expenses) Interest income 141 100 Interest expense (346) (362) Gain (loss) on sale of assets 7 (3) Equity earnings from investments in closely held businesses 158 48 Other (18) (43) Total other (expenses) (58) (260) (Loss) income before income taxes and minority interest (4,457) 232 Income tax (benefit) expense (226) 100 Minority interest -0- 123 Net (loss) income $(4,231) $ 9 (Loss) earnings per share: Basic $ (.99) $ .00 Diluted $ (.99) $ .00 Weighted average common share and common share equivalents: Basic 4,259,308 3,524,169 Diluted 4,259,308 3,528,734
The accompanying notes are an integral part of the financial statements. 4 5 ACTIVE IQ TECHNOLOGIES, INC., FORMERLY KNOWN AS METEOR INDUSTRIES, INC. CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY FOR THE YEAR TO DATE ENDED MARCH 31, 2001 (UNAUDITED) (Dollars in Thousands)
Note Re- Prefer- Addi- Receiv- tained red tional able, Trea- Earn- Stock Common Stock Paid-In Related sury ings Shares Amount Shares Amount Capital Party Stock (Deficit) Total Balance December 31, 2000 365,000 $365 3,705,903 $4 $5,695 $(1,686) $(489) $3,535 $7,424 Notes receivable payments 144 144 Stock and options issued for 401(k)/ services 67,000 545 545 Options exercised 34,809 131 131 Stock and warrants issued, net of issuance costs 616,667 1,700 1,700 Net loss (4,231) (4,231) Balance March 31, 2001 365,000 $365 4,424,379 $4 $8,071 $(1,542) $(489) $ (696) $5,713
The accompanying notes are an integral part of the financial statement 5 6 ACTIVE IQ TECHNOLOGIES, INC., FORMERLY KNOWN AS METEOR INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000 (UNAUDITED) (Dollars in Thousands)
March 31, March 31, 2001 2000 Cash flows from operating activities: Net (loss) income $ (4,231) $ 9 Adjustments to reconcile net (loss) income to net cash from operating activities: Depreciation and amortization 527 599 Equity earnings from investments in closely held businesses (158) 48 (Gain) loss on disposal of assets (7) 3 Impairment of long-lived assets 3,795 -0- Minority interest -0- 123 Stock and options issued for 401(k)/services 545 -0- Change in assets and liabilities: Decrease (increase) in: Accounts receivable, net 943 (479) Inventory, net 773 (59) Other current assets (191) 165 Other assets (5) (26) Increase (decrease) in: Accounts payable (2,188) 824 Accrued liabilities (367) (85) Fuel taxes payable (104) (3) Net cash (used in)provided by operating (668) 1,119 activities Cash flows from investing activities: Cash proceeds from sale of property, plant and equipment 78 111 Purchases of property, plant and equipment (187) (454) Purchase of investment in closely held business (1,100) -0- Sale of investment in closely held business 1,517 -0- Notes receivable payments 167 1 Net cash provided by (used in) investing 475 (342) activities
Continued on next page 6 7 ACTIVE IQ TECHNOLOGIES, INC., FORMERLY KNOWN AS METEOR INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000 (UNAUDITED) (Dollars in Thousands) (Continued)
March 31, March 31, 2001 2000 Cash flows from financing activities: Borrowings (payments) on revolving credit facilities, net (617) 3 Increase (decrease) in book overdraft (357) 201 Payments on long-term debt (2,122) (36) Proceeds from stock options exercised 131 -0- Proceeds from stock and warrants issued, net of issuance costs 1,700 -0- (Increase) decrease in restricted cash 1,611 (795) Net cash provided by (used in) financing activities 346 (627) Net increase in cash and equivalents 153 150 Cash and equivalents, beginning of period 264 288 Cash and equivalents, end of period $ 417 $ 438
The accompanying notes are an integral part of the financial statements. 7 8 ACTIVE IQ TECHNOLOGIES, INC., FORMERLY KNOWN AS METEOR INDUSTRIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 -- ORGANIZATION Active IQ Technologies, Inc. (formerly known as Meteor Industries, Inc.) (the "Company") was originally incorporated on December 22, 1992 under Colorado law as a Denver-based holding company. Effective December 31, 2000, the Company contributed substantially all of its assets, liabilities and business to Meteor Enterprises, Inc., the Company's wholly-owned subsidiary ("MEI"). The significant wholly-owned subsidiaries of MEI are Meteor Marketing, Inc., Graves Oil & Butane Co., Inc., Tri-Valley Gas Co., and Innovative Solutions and Technologies, Inc. As of December 31, 2000, MEI also owned 73% of Meteor Holdings LLC and 65% of Rocky Mountain Propane LLC, a nonconsolidated subsidiary. NOTE 2 -- MERGER WITH ACTIVEIQ TECHNOLOGIES, INC. Pursuant to an Agreement and Plan of Merger dated January 11, 2001 and amended April 27, 2001 (the "Merger Agreement") among the Company, ActiveIQ Technologies, Inc., a Minnesota corporation ("AIQ") and MI Merger, Inc., a Minnesota corporation and wholly-owned subsidiary of the Company ("Merger Sub"), on April 30, 2001 the Company reincorporated under Minnesota law and completed its merger with AIQ. The Company reincorporated under Minnesota law by merging with and into its wholly-owned subsidiary AIQ Acquisition Corp., a Minnesota corporation, and the surviving corporation changed its name to "Active IQ Technologies, Inc." On April 30, 2001, the Company also completed its merger with AIQ pursuant to which AIQ merged with and into Merger Sub and the surviving corporation was renamed "AIQ, Inc." In exchange for their shares of AIQ stock, the former shareholders of AIQ each received the same number of shares of the Company's common stock, as well as a 5-year warrant to purchase 2 additional shares of common stock at a price of $5.50 per share for every 3 shares of AIQ common stock held by such shareholder. An aggregate of 4,385,911 shares of the Company's common stock were issued to the former shareholders of AIQ. In connection with the merger transaction with AIQ, the Company completed a private placement of units of its equity securities during the first quarter of 2001. Pursuant to such private placement, the Company sold approximately 123,000 units of its securities, each unit consisting of 5 shares of common stock and a 5-year warrant to purchase 3 shares of common stock at a price of $5.50 per share. The purchase price of each unit was $15 and the Company received aggregate proceeds of $1,850,000, less $150,000 of offering expenses. A total of $1,100,000 from the offering proceeds were used to purchase approximately 10% of the outstanding common stock of AIQ, and the remaining proceeds were used for general working capital. NOTE 3 -- SALE OF ASSETS Simultaneous with the Company's merger with AIQ, the Company sold to Capco Energy, Inc., its largest shareholder, all of its interest in MEI, which represented substantially all of the Company's assets (excluding cash and the Company's shares of AIQ). The purchase price was $5,500,000, which was paid by delivering to the Company (i) cash in the amount of $4,697,501, (ii) a 9-month promissory note in the amount of $500,000 and (iii) 100,833 shares of the Company's common stock held by Capco, which the parties valued at $3.00 per share. Capco also assumed certain environmental liabilities and other indemnities. The Company's sales to Capco Energy during the quarter ending March 31, 2001 and 2000 of $1.7 million and $2.5 million, respectively. During the three months ended March 31, 2001, the Company recorded an impairment of the Meteor Enterprises' assets in the amount of $3.8 million related to the sale of these assets to Capco in April 2001. NOTE 4 -- CONTRIBUTION OF ASSETS In January 2001, Meteor Enterprises contributed substantially all of its propane assets into a new entity, RMP. Meteor Enterprises sold a 35% interest to RMP's management. Management of RMP is actively seeking 8 9 financing for other propane opportunities in its market areas. RMP is accounted for as a nonconsolidated equity interest since the Company does not control RMP. NOTE 5 -- BASIS OF PRESENTATION These financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. 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, such interim statements reflect all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position and the results of operations and cash flows for the interim periods presented. The results of operations for these interim periods are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the audited consolidated financial statements and footnotes for the year ended December 31, 2000, filed with the Company's Form 10-K. NEW ACCOUNTING PRONOUNCEMENT - In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("FAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities." This statement establishes accounting and reporting standards requiring that every derivative instrument be recorded on the balance sheet as either an asset or liability measured at its fair value. FAS No. 133 also requires that changes in the derivative's fair value be recognized currently in earnings unless specific hedge accounting criteria are met. In June 1999, the FASB issued FAS No. 137 which defers the effective date of FAS No. 133 to fiscal years beginning after June 15, 2000. The Company adopted FAS No. 133 in the first quarter of fiscal 2001, and such adoption did not materially affect its financial statement presentation. NOTE 6 - (LOSS) EARNINGS PER SHARE Basic (loss) earnings per common share are computed by dividing net (loss) income by the weighted average number of common shares outstanding. Diluted (loss) earnings per share are calculated taking into account all potentially dilutive securities. A reconciliation of the denominator used in the calculation of basic and diluted earnings per share is presented below. Antidilutive stock options and warrants of 1,275,300 and 1,337,473 for the three months ended March 31, 2001 and 2000, respectively, are omitted from the denominator. The numerator is unchanged. The shares available upon exchange of a subsidiary's preferred stock of -0- and 1,043,305 for the three months ended March 31, 2001 and 2000, respectively, are omitted as they are antidilutive.
Three Months Ended March 31, 2001 2000 ---- ---- Denominator: Average common shares outstanding 4,259,308 3,524,169 Average dilutive stock options and warrants -0- 4,565 Diluted shares 4,259,308 3,528,734
9 10 NOTE 7 -- COMMITMENTS AND CONTINGENCIES The Company is a party to certain commitments, contingencies and litigation that have arisen in the normal course of its business and that of its subsidiaries. All of these commitments, contingencies and litigation matters have been sold and an indemnity from Capco covering these items has been received. NOTE 8 -- BUSINESS SEGMENTS During the three months ended March 31, 2001, the Company operated in four business segments: gasoline, diesel, grease and lubricants, and other products (anti-freeze, chemicals, services, hardware and miscellaneous items). During the three months ended March 31, 2000, in addition to these four segments the Company also operated in the segment of propane. In January 2001 the Company contributed substantially all its propane assets into a new entity, Rocky Mountain Propane LLC (See Note 4). Senior management evaluates and makes operating decisions about each of these operating segments based on a number of factors. The most significant factors used by management in evaluating the operating performance are net sales and gross profit as presented below:
Three Months Ended March 31, 2001 2000 Net sales Gasoline $ 9,771 $ 11,109 Diesel 26,227 22,945 Propane -0- 2,197 Greases and lubricants 3,842 4,034 Other 2,227 1,732 Total net sales $ 42,067 $ 42,017 Gross profit Gasoline $ 587 $ 859 Diesel 2,056 1,899 Propane -0- 774 Greases and lubricants 680 901 Other 1,419 1,205 Total gross profit $ 4,742 $ 5,638 Reconciliation to net (loss) income: Selling, general and administrative 4,819 4,547 Depreciation and amortization 527 599 Impairment of long-lived assets 3,795 -0- (Loss) income from operations (4,399) 492 Other (expenses) (58) (260) Income tax (benefit) expense (226) 100 Minority interest -0- 123 Net (loss) income $ (4,231) $ 9
The Company does not account for assets by business segment and, therefore, depreciation and amortization are not factors used in evaluating operating performance. 10 11 ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FORWARD-LOOKING STATEMENTS This Report contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Act of 1995. Such statements are based on management's current expectations and are subject to a number of factors and uncertainties which could cause actual results to differ materially from those described in the forward-looking statements. The following discussion of the Company's financial condition and results of operations should be read in conjunction with the historical financial statements and notes thereto of the Company, included elsewhere in this document. INTRODUCTION The Company is engaged in the distribution and marketing of refined petroleum products including gasoline, diesel fuel, and lubricants. The Company's growth, since its inception in 1992, has been primarily through the acquisition of businesses in the petroleum marketing industry. RESULTS OF OPERATIONS The Company had sales of $42.0 million for the three months ended March 31, 2001 and 2000. Gross profit for the three months ended March 31, 2001 and 2000, was $4.7 million and $5.6 million, respectively. The decrease is primarily due to the contribution of the Company's propane assets to RMP in January 2001. Net income decreased for the three months ended March 31, 2001, to a net loss of $4.2 million from net income of $9,000 in 2000. The decrease is due to the contribution of the Company's propane assets to RMP in January 2001, expenses relating to the Active IQ transaction and certain non-cash expenses relating to shares of common stock issued to employees and 401(k) matching shares. Also, for the three months ended March 31, 2001, the Company recorded an impairment of the Meteor Enterprises' assets in the amount of $3.8 million related to the sale of these assets to Capco in April 2001. Gasoline Segment Gasoline volumes decreased to 9.9 million gallons for the three months ended March 31, 2001, compared to 12.0 million gallons in 2000, a decrease of 2.1 million (18%). The volume decrease is primarily due to a decrease in volume by the Company's wholesale gasoline customers. Gasoline sales decreased to $9.8 million for the three months ended March 31, 2001, compared to $11.1 million in 2000, a decrease of $1.3 million (12%) due to reduction in volume rather than price. Gross profit decreased to $0.6 million for the three months ended March 31, 2001, from $0.9 million in 2000, a decrease of $0.3 million (33%) due to the reduction in volume and an increase in cost of gasoline. Gross profit per gallon of gasoline sold decreased to $0.06 for the three months ended March 31, 2001 compared to $0.07 in 2000, a decrease of $0.01 (14%) due to an increase in cost of gasoline not passed on to the customer. 11 12 Diesel Segment Diesel volumes increased to 26.4 million gallons for the three months ended March 31, 2001, from 24.6 million in 2000, an increase of 1.8 million gallons (7%) due to increase in volume by the Company's commercial customers. Diesel sales increased to $26.2 million for the three months ended March 31, 2001, from $22.9 million in 2000, an increase of $3.3 million (14%) due to increased sales volumes and higher product prices during the current period. Gross profit increased to $2.1 million for the three months ended March 31, 2001, from $1.9 million in 2000, an increase of $0.2 million (11%). Gross profit per gallon of diesel sold remained constant at $0.08 for the three months ended March 31, 2001 and 2000. Propane Segment Sales of propane items decreased to $0.0 for the three months ended March 31, 2001, from $2.2 million in 2000, due to the contribution of propane assets to RMP in January 2001 and the fact that the activities of RMP are not accounted for on a consolidated basis. Greases and Lubricants Segment Grease and lubricant sales decreased to $3.8 million for the three months ended March 31, 2001, compared to $4.0 million in 2000, a decrease of $0.2 million (5%) due to a decrease in volume sold to the Company's commercial customers. Gross profit decreased to $0.7 million for the three months ended March 31, 2001, compared to $0.9 million, a decrease of $0.2 million (25%)due to an increase in product prices not all of which were passed on to customers. Other Items Segment Sales of other items, which consist of anti-freeze, chemicals, services, hardware, rental income and miscellaneous items, increased to $2.2 million for the three months ended March 31, 2001, compared to $1.7 million in 2000, an increase of $0.5 million (29%) due to increased services being provided to commercial customers. Gross profit increased to $1.4 million for the three months ended March 31, 2001, compared to $1.2 million in 2000, an increase of $0.2 million (17%) due to increased services. Expenses Selling, general, and administrative expenses were $4.8 million for the three months ended March 31, 2001, compared to $4.5 million for the three months ended March 31, 2000, an increase of $0.3 million (7%). The increase is primarily related to options granted and costs related to the merger and sale of assets. Depreciation and amortization for the three months ended March 31, 2001, was $0.5 million compared to $0.6 million for the three months ended March 31, 2000, a decrease of $0.1 million (17%). The decrease is attributable to propane activities being transferred to RMP and no longer consolidated. As discussed above, we recorded an impairment of $3.8 million related to the sale of the Meteor Enterprises' assets to Capco in April 2001. Other expenses decreased to $0.06 million for the three months ended March 31, 2001, compared to $0.3 million in 2000. 12 13 Income Taxes The (benefit) provision for income taxes for the three months ended March 31, 2001, was $(0.2) million compared to $0.1 million for the same period ended March 31, 2000, a decrease of $0.3 million. The decrease is due to lower taxable income for the three months ended March 31, 2001, as compared to 2000. The effective tax rate differs from the expected tax rate because the Company did not recognize any tax benefit associated with the impairment. LIQUIDITY AND CAPITAL RESOURCES At March 31, 2001, the Company had working capital of $0.7 million compared to a working capital deficit of $1.8 million at December 31, 2000. Net cash used in operating activities totaled $0.7 million for the three months ended March 31, 2001, compared to $1.1 million cash provided for the three months ended March 31, 2000. This decrease in cash provided by operating activities is principally related to the reduction in net income and increase payments on accounts payable. Net cash provided by investing activities totaled $0.5 million for the three months ended March 31, 2001, compared to cash used of $0.3 million for the three months ended March 31, 2000. The increase in cash provided by investing activities is principally related to the $1.1 million investment in Active IQ offset by $1.5 million in proceeds from the sale of the interest in RMP. Net cash provided by financing activities totaled $0.3 million for the three months ended March 31, 2001, compared to cash used of $0.6 million for the three months ended March 31, 2000. This increase in cash provided by financing activities is primarily related to sale of stock and warrants and reductions of restricted cash offset by more payments made on the revolving credit facility and on long-term debt. The Company has a revolving bank credit facility with a maximum commitment of $12,500,000, which expires on December 31, 2002. The amount available under the revolving credit facility is a function of the sum of eligible accounts receivable and inventory as defined by the revolving credit agreement up to the maximum commitment. Advances requested by the Company are subject to an interest rate of the lender's base rate plus 0.5% (8.0% and 9.0% at March 31, 2001 and March 31, 2000, respectively). Additionally, the Company pays a commitment fee of 0.25% of the maximum commitment. The revolving credit facility is collateralized by the Company's trade receivables and inventory. At March 31, 2001, the borrowing base was approximately $11.1 million. $8.0 million was borrowed against the facility and is recorded as a current liability. During the quarter the Company was out of compliance with several debt covenants and the Company obtained waivers from the lender for noncompliance. The Company has various loans with banks, suppliers and individuals which require principal payments of $2.0 million in 2001. The Company is obligated to pay lease costs of approximately $1.0 million in 2001 for land, building, facilities and equipment. The Company is responsible for any contamination of land it owns or leases. However, the Company may have limitations on any potential contamination 13 14 liabilities as well as claims for reimbursement from third parties. Included in selling, general and administrative expenses for the three months ended March 31, 2001 and 2000, is $29,000 and $46,000, respectively, for site assessment, related cleanup costs and regulatory compliance. ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company's exposure to interest rate changes is primarily related to its variable rate debt issued under its $12.5 million revolving credit facility. Because the interest rate on this facility is variable, based upon the lender's base rate, the Company's interest expense and net income are affected by interest rate fluctuations. If interest rates were to increase or decrease by 100 basis points, the result, based upon the existing outstanding debt as of March 31, 2001, would be an annual increase or decrease of approximately $84,000 in interest expense and a corresponding decrease or increase of approximately $50,000 in the Company's net income (loss) after taxes. 14 15 PART II - OTHER INFORMATION Item 1. Legal Proceedings. None. Item 2. Changes in Securities. None. Item 3. Defaults Upon Senior Securities. None. Item 4. Submission of Matters to a Vote of Security Holders. (a) On March 27, 2001, the Company held a Special Meeting of the shareholders. (b) There was no election of directors. (c) The first item voted on was the sale of substantially all of the assets of the Company. 2,257,732 voted for, 10,000 voted against, 1,127,137 abstained and there were 961,646 non-votes. The second item voted on was to reincorporate the Company under the laws of the State of Minnesota. 2,259,232 voted for, 10,000 voted against, 1,127,627 abstained and there were 961,646 non-votes. The third item voted on was to approve and adopt the Agreement and Plan of Merger with Active IQ Technologies, Inc. 2,259,232 voted for, 10,000 voted against, 1,125,627 abstained and there were 961,646 non-votes. Item 5. Other Information. None. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits 4.1 Form of Warrant to Purchase Shares of Common Stock of Meteor Industries, Inc. (b) Reports on Form 8-K. The Company filed a Current Report on Form 8-K January 11, 2001 with respect to its merger with Active IQ Technologies, Inc. and sale of its petroleum marketing businesses and assets to Capco Energy, Inc. 15 16 SIGNATURES In accordance with the requirements of the Exchange Act, the Issuer caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. ACTIVE IQ TECHNOLOGIES, INC. By s/ Kenneth W. Brimmer ---------------------------------- Kenneth W. Brimmer, Chairman of the Board, Chief Executive Officer and Chief Financial Officer Dated: May 15, 2001 16 EX-4.1 2 c62500ex4-1.txt FORM OF WARRANT TO PURCHASE SHARES OF COMMUN STOCK 1 EXHIBIT 4.1 THE WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT (THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT") OR UNDER ANY STATE SECURITIES OR BLUE SKY LAWS ("BLUE SKY LAWS"). NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THIS WARRANT OR THE SECURITIES OR ANY INTEREST THEREIN MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND ANY APPLICABLE BLUE SKY LAWS OR (B) IF THE COMPANY HAS BEEN FURNISHED WITH BOTH AN OPINION OF COUNSEL FOR THE HOLDER, WHICH OPINION AND COUNSEL SHALL BE REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT NO REGISTRATION IS REQUIRED BECAUSE OF THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE BLUE SKY LAWS, AND ASSURANCES THAT THE TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION WILL BE MADE ONLY IN COMPLIANCE WITH THE CONDITIONS OF ANY SUCH REGISTRATION OR EXEMPTION. WARRANT TO PURCHASE SHARES OF COMMON STOCK OF METEOR INDUSTRIES, INC. WARRANT NO. _________ Denver, Colorado _____________, 2001 This certifies that, for value received, _____________________________, or [its/his/her] successors or assigns (the "Holder") is entitled to purchase from Meteor Industries, Inc. (the "Company") _______________________________ (__________) fully paid and nonassessable shares (the "Shares") of the Company's Common Stock, $.001 par value (the "Common Stock"), at an exercise price of $5.50 per share (the "Exercise Price"), subject to adjustment as herein provided. This Warrant may be exercised by Holder at any time after the date hereof; provided, however, that, Holder shall in no event have the right to exercise this Warrant or any portion thereof later than the five (5) year anniversary of the date hereof, at which time all of Holder's rights hereunder shall expire. This Warrant is subject to the following provisions, terms and conditions: 1. Exercise of Warrant. The rights represented by this Warrant may be exercised by the Holder, in whole or in part (but not as to a fractional share of Common Stock), by the surrender of this Warrant (properly endorsed, if required, at the Company's principal office in Denver, Colorado, or such other office or agency of the Company as the Company may designate by notice in writing to the Holder at the address of such Holder appearing on the books of the Company at any time within the period above named), and upon payment to it by certified check, bank draft or cash of the purchase price for such Shares. The Company agrees that the Shares so purchased shall have and are deemed to be issued to the Holder as the record owner of such Shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such Shares as aforesaid. Certificates for the Shares of Common Stock so purchased shall be delivered to the Holder within a reasonable time, not exceeding ten (10) days, after the rights represented by this Warrant shall have been so exercised, and, unless this Warrant has expired, a new Warrant representing the number of Shares, if any, with respect to which this Warrant shall not then have been exercised shall also be delivered to the Holder within such time. The Company may require that any such new Warrant or any certificate for Shares purchased upon the exercise hereof bear a legend substantially similar to that which is contained on the face of this Warrant. 2 2. Transferability of this Warrant. This Warrant is issued upon the following terms, to which Holder consents and agrees: (a) Until this Warrant is transferred on the books of the Company, the Company will treat the Holder of this Warrant registered as such on the books of the Company as the absolute owner hereof for all purposes without being affected by any notice to the contrary. (b) This Warrant may not be exercised, and this Warrant and the Shares underlying this Warrant shall not be transferable, except in compliance with all applicable state and federal securities laws, regulations and orders, and with all other applicable laws, regulations and orders. (c) The Warrant may not be transferred, and the Shares underlying this Warrant may not be transferred, without the Holder obtaining an opinion of counsel satisfactory in form and substance to the Company's counsel stating that the proposed transaction will not result in a prohibited transaction under the Securities Act of 1933, as amended ("Securities Act"), and applicable Blue Sky laws. By accepting this Warrant, the Holder agrees to act in accordance with any conditions reasonably imposed on such transfer by such opinion of counsel. (d) Neither this issuance of this Warrant nor the issuance of the Shares underlying this Warrant have been registered under the Securities Act. 3. Certain Covenants of the Company. The Company covenants and agrees that all Shares which may be issued upon the exercise of the rights represented by this Warrant, upon issuance and full payment for the Shares so purchased, will be duly authorized and issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issue hereof, except those that may be created by or imposed upon the Holder or its property, and without limiting the generality of the foregoing, the Company covenants and agrees that it will from time to time take all such actions as may be requisite to assure that the par value per share of the Common Stock is at all times equal to or less than the effective purchase price per share of the Common Stock issuable pursuant to this Warrant. The Company further covenants and agrees that during the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized and reserved free of preemptive or other rights for the exclusive purpose of issue upon exercise of the purchase rights evidenced by this Warrant, a sufficient number of shares of its Common Stock to provide for the exercise of the rights represented by this Warrant. 4. Adjustment of Exercise Price and Number of Shares. The Exercise Price and number of Shares are subject to the following adjustments: (a) Adjustment of Exercise Price for Stock Dividend, Stock Split or Stock Combination. In the event that (i) any dividends on any class of stock of the Company payable in Common Stock or securities convertible into or exercisable for Common Stock ("Common Stock Equivalents") shall be paid by the Company, (ii) the Company shall subdivide its then outstanding shares of Common Stock into a greater number of shares, or (iii) the Company shall combine its outstanding shares of Common Stock, by reclassification or otherwise, then, in any such event, the Exercise Price in effect immediately prior to such event shall (until adjusted again pursuant hereto) be adjusted immediately after such event to a price (calculated to the nearest full cent) determined by dividing (a) the number of shares of Common Stock outstanding immediately prior to such event, multiplied by the then existing Exercise Price, by (b) the total number of shares of Common Stock outstanding 2 3 immediately after such event, and the resulting quotient shall be the adjusted Exercise Price per share. No adjustment of the Exercise Price shall be made if the amount of such adjustment shall be less than $.05 per share, but in such case any adjustment that would otherwise be required then to be made shall be carried forward and shall be made at the time and together with the next subsequent adjustment which, together with any adjustment or adjustments so carried forward, shall amount to not less than $.05 per share. (b) Adjustment of Number of Shares Purchasable on Exercise of Warrants. Upon each adjustment of the Exercise Price pursuant to this Section, the Holder shall thereafter (until another such adjustment) be entitled to purchase at the adjusted Exercise Price the number of shares, calculated to the nearest full share, obtained by multiplying the number of shares specified in such Warrant (as adjusted as a result of all adjustments in the Exercise Price in effect prior to such adjustment) by the Exercise Price in effect prior to such adjustment and dividing the product so obtained by the adjusted Exercise Price. (c) Notice as to Adjustment. Upon any adjustment of the Exercise Price and any increase or decrease in the number of shares of Common Stock purchasable upon the exercise of the Warrant, then, and in each such case, the Company within thirty (30) days thereafter shall give written notice thereof, by first class mail, postage prepaid, addressed to each Holder as shown on the books of the Company, which notice shall state the adjusted Exercise Price and the increased or decreased number of shares purchasable upon the exercise of the Warrants, and shall set forth in reasonable detail the method of calculation and the facts upon which such calculation is based. (d) Effect of Reorganization, Reclassification, Merger, etc. If at any time while this Warrant is outstanding there should be (i) any capital reorganization of the capital stock of the Company (other than the issuance of any shares of Common Stock in subdivision of outstanding shares of Common Stock by reclassification or otherwise and other than a combination of shares provided for in Section 4(a) hereof), (ii) any consolidation or merger of the Company with another corporation, or any sale, conveyance, lease or other transfer by the Company of all or substantially all of its property to any other corporation, which is effected in such a manner that the holders of Common Stock shall be entitled to receive cash, stock, securities, or assets with respect to or in exchange for Common Stock, or (iii) any dividend or any other distribution upon any class of stock of the Company payable in stock of the Company of a different class, other securities of the Company, or other property of the Company (other than cash), then, as a part of such transaction, lawful provision shall be made so that Holder shall have the right thereafter to receive, upon the exercise hereof, the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such consolidation or merger, or of the corporation to which the property of the Company has been sold, conveyed, leased or otherwise transferred, as the case may be, which the Holder would have been entitled to receive upon such capital reorganization, reclassification of capital stock, consolidation, merger, sale, conveyance, lease or other transfer, if this Warrant had been exercised immediately prior to such capital reorganization, reclassification of capital stock, consolidation, merger, sale, conveyance, lease or other transfer. In any such case, appropriate adjustments (as determined by the Board of Directors of the Company) shall be made in the application of the provisions set forth in this Warrant (including the adjustment of the Exercise Price and the number of Shares issuable upon the exercise of the Warrant) to the end that the provisions set forth herein shall thereafter be applicable, as near as reasonably may be, in relation to any shares or other property thereafter deliverable upon the exercise of the Warrant as if the Warrant had been exercised immediately prior to such capital reorganization, reclassification of capital stock, such consolidation, merger, sale, conveyance, lease or other transfer and the Holder had carried out the terms 3 4 of the exchange as provided for by such capital reorganization, consolidation or merger. The Company shall not effect any such capital reorganization, consolidation, merger or transfer unless, upon or prior to the consummation thereof, the successor corporation or the corporation to which the property of the Company has been sold, conveyed, leased or otherwise transferred shall assume by written instrument the obligation to deliver to the Holder such shares of stock, securities, cash or property as in accordance with the foregoing provisions such Holder shall be entitled to purchase. 5. Redemption of Warrants (a) Redemption Price. This Warrant may be redeemed at the option of the Company, at any time after the first anniversary of the date hereof following a period of fourteen (14) consecutive trading days where the per share average closing bid price of the Common Stock exceeds Seven and 50/100 Dollars ($7.50), on notice as set forth in Section 5(b) hereof, and at a redemption price equal to One Cent ($.01) for each Share purchasable under this Warrant; provided, however, that this Warrant may not be redeemed by the Company unless the Shares purchasable hereunder have been registered with the Securities and Exchange Commission or are otherwise freely tradable. For purposes of this Section, the closing bid price of the Common Stock shall be determined by the closing bid price as reported by Nasdaq so long as the Common Stock is quoted on the Nasdaq National Market or SmallCap Market Systems and, if the Common Stock is listed on a national securities exchange, shall be determined by the last reported sale price on the primary exchange on which the Common Stock is traded. (b) Notice of Redemption. In the case of any redemption of this Warrant, the Company shall give notice of such redemption to the Holder hereof as provided in this Section 5(b). Notice of redemption to the Holder of this Warrant shall be given by mailing by first-class mail, postage prepaid, a notice of such redemption not less than thirty (30) days prior to the date fixed for redemption. Any notice which is given in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the Holder receives the notice. Each such notice shall specify the date fixed for redemption, the place of redemption and the redemption price of $.01 per Share at which this Warrant is to be redeemed, and shall state that payment of the redemption price of the Warrant will be made up on surrender of this Warrant at such place of redemption, and that if not exercised by the close of business on the date fixed for redemption, the exercise rights of the Warrant shall expire unless extended by the Company. Such notice shall also state the current Exercise Price and the date on which the right to exercise the Warrant will expire unless extended by the Company. (c) Payment of Redemption Price. If notice of redemption shall have been given as provided in Section 5(b), the redemption price of $.01 per Share shall, unless the Warrant is theretofore exercised pursuant to the terms hereof, become due and payable on the date and at the place stated in such notice. On and after such date of redemption, the exercise rights of this Warrant shall expire. On presentation and surrender of this Warrant at such place of payment in such notice specified, this Warrant shall be paid and redeemed at the redemption price of $.01 per Share within tem (10) days thereafter. 6. No Rights as Shareholders. This Warrant shall not entitle the Holder as such to any voting rights or other rights as a shareholder of the Company. 7. Registration Rights. If at any time the Company shall propose to file any registration statement (other than any registration on Form S-4, S-8 or any other similarly inappropriate form, or any 4 5 successor forms thereto) under the 1933 Act covering a public offering of the Company's Common Stock (the "Registration Statement"), it will notify the Holder hereof at least thirty (30) days prior to each such filing (the "Registration Notice") and will use its best efforts to include in the Registration Statement (to the extent permitted by applicable regulation), the Shares purchased or purchasable by the Holder upon the exercise of the Warrant to the extent requested by the Holder hereof within twenty (20) days after receipt of notice of such filing (which request shall specify the interest in this Warrant or the Shares intended to be sold or disposed of by such Holder and describe the nature of any proposed sale or other disposition thereof); provided, however, that if a greater number of Shares is offered for participation in the proposed offering than in the reasonable opinion of the managing underwriter of the proposed offering can be accommodated without adversely affecting the proposed offering, then the amount of Shares proposed to be offered by such Holder for registration, as well as the number of securities of any other selling shareholders participating in the registration, shall be proportionately reduced to a number deemed satisfactory by the managing underwriter. The Company shall bear all expenses and fees incurred in connection with the preparation, filing, and amendment of the Registration Statement with the Commission, except that the Holder shall pay all fees, disbursements and expenses of any counsel or expert retained by the Holder and all underwriting discounts and commissions, filing fees and any transfer or other taxes relating to the Shares included in the Registration Statement. The Holder of this Warrant agrees to cooperate with the Company in the preparation and filing of any Registration Statement, and in the furnishing of information concerning the Holder for inclusion therein, or in any efforts by the Company to establish that the proposed sale is exempt under the 1933 Act as to any proposed distribution. The Holder understands that if the Company has not received such information requested by the Company in the Registration Notice within 20 days after Holder's receipt thereof, the Company shall have no obligation to include any of Holder's Shares in the Registration Statement. 8. Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of Colorado. 9. Amendments and Waivers. The provisions of this Warrant may not be amended, modified or supplemented, and waiver or consents to departures from the provisions hereof may not be given, unless the Company agrees in writing and has obtained the written consent of the Holder. 10. Notices. All notices or communications hereunder, except as herein otherwise specifically provided, shall be in writing and if sent to the Holder shall be mailed, delivered, or telefaxed and confirmed to the Holder at his or her address set forth on the records of the Company; or if sent to the Company shall be mailed, delivered, or telefaxed and confirmed to Meteor Industries, Inc., 1401 Blake Street, Suite 200, Denver, Colorado 80202, or to such other address as the Company or the Holder shall notify the other as provided in this Section. IN WITNESS WHEREOF, Meteor Industries, Inc. has caused this Warrant to be signed by its duly authorized officer in the date set forth above. METEOR INDUSTRIES, INC. By:_____________________________________ Edward J. Names President and Chief Executive Officer 5 6 SUBSCRIPTION FORM To be signed only upon exercise of Warrant. The undersigned, the holder of the within Warrant, hereby irrevocably elects to exercise the purchase right represented by such Warrant for, and to purchase thereunder, ____________________ of the shares of Common Stock of Meteor Industries, Inc. (the "Shares") to which such Warrant relates and herewith makes payment of $_____________ therefor in cash, certified check or bank draft and requests that a certificate evidencing the Shares be delivered to, ____________________________, the address for whom is set forth below the signature of the undersigned: Dated: ____________________ ____________________________________ (Signature) ____________________________________ ____________________________________ (Address) * * * ASSIGNMENT FORM To be signed only upon authorized transfer of Warrant. FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto _____________________________________ the right to purchase shares of Common Stock of Meteor Industries, Inc. to which the within Warrant relates and appoints ____________________ attorney, to transfer said right on the books of _________________ with full power of substitution in the premises. Dated: ____________________ ____________________________________ (Signature) ____________________________________ ____________________________________ (Address) -----END PRIVACY-ENHANCED MESSAGE-----