-----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, QrmqrGseldclLc4DFmSlu7FbstUNUQQgWyXZw7GZbJdbPwkXYGooVg3C19DssXF0 rigyJtTfNrEyYtu9k9M0zw== 0000950005-96-000963.txt : 19961217 0000950005-96-000963.hdr.sgml : 19961217 ACCESSION NUMBER: 0000950005-96-000963 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961031 FILED AS OF DATE: 19961216 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: US ELECTRICAR INC CENTRAL INDEX KEY: 0000922237 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLES & PASSENGER CAR BODIES [3711] IRS NUMBER: 953056150 STATE OF INCORPORATION: CA FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-79542 FILM NUMBER: 96681542 BUSINESS ADDRESS: STREET 1: 5 THOMAS MELLON CIRCLE STREET 2: SUITE 305 CITY: SAN FRANCISCO STATE: CA ZIP: 94134 BUSINESS PHONE: 4156562400 MAIL ADDRESS: STREET 1: 5 THOMAS MELLON CIRCLE STREET 2: SUITE 305 CITY: SAN FRANCISCO STATE: CA ZIP: 94134 10-Q 1 FORM 10-Q 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 October 31, 1996 ---------------- 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 No. 0-25184 ------- U.S. ELECTRICAR, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) CALIFORNIA 95-3056150 - ------------------------------- ----------------------------------- (State of other jurisdiction of (IRS employer identification number) incorporation or organization) 5 Thomas Mellon Circle, Suite 305 San Francisco, CA 94134 ---------------------------------------------------- (Address of Principal Executive Offices and Zip Code) Indicate by check mark whether he 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 periods 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 ( ) ----- ----- As of December 12, 1996, there were 127,194,477 shares of Common Stock, no par value, outstanding. 1 INDEX U.S. ELECTRICAR, INC. Page No. -------- PART 1. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) ........................... 3 Consolidated Balance Sheets: October 31, 1996 and July 31, 1996 ........................ 3 Consolidated Statements of Operations: Three months ended October 31, 1996 and 1995 ............... 4 Consolidated Statements of Cash Flows: Three months ended October 31, 1996 and 1995 ............... 5 Notes to Consolidated Financial Statements: for the Three months ended October 31, 1996 and 1995 ....... 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ........................ 11 PART II. OTHER INFORMATION Item 1. Legal Proceedings .......................................... 14 Item 2. Changes in Securities ...................................... 14 Item 3. Defaults upon Senior Securities ............................ 14 Item 4. Submission of Matters to a Vote of Security Holders ........ 15 Item 5. Other Information .......................................... 15 Item 6. Exhibits and Reports on Form 8-K ........................... 15 SIGNATURE ............................................................ 16 2 PART 1. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS U.S. ELECTRICAR, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except for share and per share data) - ------------------------------------------------------------------------------------------------------------------------------------
As of As of October 31, 1996 July 31, 1996 ---------------- ------------- (Unaudited) ASSETS CURRENT ASSETS: Cash $ 51 $ 13 Accounts receivable, net of allowances of $434 and $596 771 856 Inventory 2,210 2,387 Prepaids and other current assets 184 184 -------- -------- Total Current Assets 3,216 3,440 PROPERTY, PLANT AND EQUIPMENT - NET 953 835 OTHER ASSETS 67 88 -------- -------- TOTAL ASSETS $ 4,236 $ 4,363 ======== ======== LIABILITIES AND SHAREHOLDERS' (DEFICIT) CURRENT LIABILITES: Accounts payable $ 2,857 $ 2,868 Accrued payroll and related expense 490 441 Accrued warranty expense 978 1,156 Reserve for lease obligations 91 112 Accrued Interest 257 208 Other accrued expenses 1,098 721 Customer deposits and deferred revenue 497 323 Bonds and notes payable 7,747 7,283 -------- -------- Total Current Liabilities 14,015 13,112 LONG TERM DEBT 3,987 3,987 SHAREHOLDERS' (DEFICIT): Series A preferred stock - No par value; 30,000,000 shares authorized; 3,861,000 and 4,010,000 shares issued and outstanding at 10/31/96 and 7/31/96 2,843 2,983 Series B preferred stock - No par value; 5,000,000 shares authorized; 1,587,000 shares issued and outstanding 3,175 3,175 Stock notes receivable (1,080) (1,061) Common Stock - No par value; 300,000,000 shares authorized; 127,169,000 and 120,220,000 shares issued and outstanding at 10/31/96 and 7/31/96 60,957 59,157 Accumulated deficit (79,661) (76,990) -------- -------- Total Shareholders' (Deficit) (13,766) (12,736) -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' (DEFICIT) $ 4,236 $ 4,363 ======== ======== Note: The balance sheet at July 31, 1996 has been derived from the audited financial statements at that date. See notes to consolidated financial statements.
3 U.S. ELECTRICAR, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In thousands, except for per share and share data) - -------------------------------------------------------------------------------- Three Months Ended October 31, ------------------------------- 1996 1995 ------------- ------------- NET SALES $ 527 $ 2,094 COST OF SALES 763 2,321 ------------- ------------- GROSS MARGIN (236) (227) ------------- ------------- OTHER COSTS AND EXPENSES: Research & development 166 336 Selling, general & administrative 600 1,237 Interest and financing fees 39 427 Acquisition of research company 1,630 ------------- ------------- Total other costs and expenses 2,435 2,000 ------------- ------------- LOSS BEFORE GAIN ON DEBT RESTRUCTURING (2,671) (2,227) GAIN ON DEBT RESTRUCTURING 283 ------------- ------------- NET LOSS $ (2,671) $ (1,944) ============= ============= PER COMMON SHARE: Loss before gain on debt restructuring $ (0.022) $ (0.040) Gain on debt restructuring 0.005 ------------- ------------- Net loss per common share $ (0.022) $ (0.035) ============= ============= WEIGHTED AVERAGE SHARES OUTSTANDING 121,421,529 55,559,303 4 U.S. ELECTRICAR, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands) - --------------------------------------------------------------------------------------------------
Three Months Ended October 31 ------------------------------- 1996 1995 ------- ------- OPERATIONS Net loss $(2,671) $(1,944) Adjustments to reconcile net loss to net cash used by operating activities: Depreciation and Amortization 164 356 Change in allowance for doubtful accounts 0 (10) Provision to reduce inventory values 5 (44) Debt restructuring 0 (283) Purchase of a research company 1,630 0 Stock option compensation 0 26 Interest income on stock notes receivable (19) (15) Change in operating assets and liabilities: Accounts Receivable (280) (989) Inventory 201 1,142 Prepaids and other assets 94 (293) Accounts payable and accrued expenses 76 463 Customer deposits and deferred revenue 29 (349) ------- ------- Net cash used by operating activities (771) (1,940) ------- ------- INVESTING: Repayments on advances to Systronix Corporation 209 Purchases of property, plant and equipment, net of disposals 0 90 ------- ------- Net cash provided by investing activities 209 90 ------- ------- FINANCING: Payments on notes payable (172) (41) Borrowings on notes payable 472 2,288 Proceeds from issuance of common stock 300 ------- ------- Net cash provided by financing activities 600 2,247 ------- ------- NET INCREASE IN CASH AND EQUIVALENTS 38 397 CASH AND EQUIVALENTS: Beginning of period 13 319 ------- ------- End of period $ 51 $ 716 ======= =======
5 U.S. ELECTRICAR, INC, AND SUBSIDIARIES CONSOLIDATED STSTEMENTS OF CASH FLOWS (Continued) (UNAUDITED) (In thousands) - ---------------------------------------------------------------------------------------------------------------------------
Three Months Ended October 31, ----------------------------- 1996 1995 ------- ------- NONCASH INVESTING AND FINANCING ACTIVITIES: Conversion of Series A preferred stock to common stock $ 140 $ 837 Conversion of convertible notes to common stock 500 Assumption of notes payable in connection with acquisition 800 Note issued in connection with acquisition 830 Note assumed by buyer in connection with divestiture (1,013) Conversion of accrued interest to notes payable 147 Decrease in accounts receivable from divestiture of IEV 365 Decrease in inventory from divestiture of IEV 470 Decrease in accounts payable and accrued expenses from divestiture of IEV (172) Increase in inventory from acquisition of Systronix Corporation (499) Increase in prepaids from acquisition of Systronix (94) Increase in accounts payable and accrued expenses from acquisition of Systronix 361 Increase in customer deposits from acquisition of Systronix 135
6 U. S. ELECTRICAR, INC. AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS For the Three Months Ended October 31, 1996 and 1995 NOTE 1 - Basis of Presentation The accompanying unaudited financial statements have been prepared from the records of the Company without audit, and in the opinion of management, include all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position at October 31, 1996 and the interim results of operations and cash flows for the three month periods ended October 31, 1996 and 1995. The balance sheet at July 31, 1996, presented herein, has been prepared from the audited financial statements of the Company for the fiscal year then ended. The preparation of financial statements in conformity with generally accepted accounting principles requires the Company to make estimates and assumptions affecting the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. The July 31, 1996 and October 31, 1996 inventories are reported at market value. The inventory valuation adjustments are estimates based on sales of inventory subsequent to July 31, 1996, and the projected impact of certain economic, marketing and business factors. Warranty reserves and certain accrual expenses are based upon an analysis of future costs expected to be incurred in meeting contracted obligations. The amounts estimated for the above, in addition to other estimates not specifically addressed, could differ from actual results; and the difference could have a significant impact on the financial statements. Accounting policies followed by the Company are described in Note 1 to the audited financial statements for the fiscal year ended July 31, 1996. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted for purposes of the interim financial statements. The financial statements should be read in conjunction with the audited financial statements, including the notes thereto, for the year ended July 31, 1996, which are included in the Company's Form 10-K Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 as filed with the Securities and Exchange Commission. The results of operations for the three month periods presented herein are not necessarily indicative of the results to be expected for the full year. NOTE 2 - Going Concern The Company has experienced recurring losses from operations and use of cash from operations and had an accumulated deficit of $76,990,000 at July 31, 1996 and $79,661,000 at October 31, 1996. A substantial portion of the losses are attributable to research, development and other start-up costs associated with the Company's focus on the development and manufacture of electric vehicles, including electric powered buses, the conversion of gas powered cars and light trucks to electric power and off-road electric powered industrial vehicles. During the three years ended July 31, 1996, the Company obtained approximately $45 million (net of debt repayments) in cash from financial activities through private placements of common stock and Series A preferred stock, the exercise of options and warrants, and the issuance of convertible subordinated notes payable and secured convertible bonds and notes. During the three months ended October 31, 1996, the Company raised an additional $600,000, net of 7 repayments, through the issuance of secured convertible debt and the sale of unregistered common stock. It is management's intention to complete its debt restructuring and to seek additional financing through private placements as well as other means. As of December 12, 1996, however, the Company had no commitments to provide significant additional financing to the Company. The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. Cash flows from operations for the foreseeable future may not be sufficient to enable the Company to meet its obligations. Market conditions and the Company's financial position may inhibit its ability to achieve profitable operations. These factors as well as the future availability or inadequacy of financing to meet future needs, could force the Company to delay, modify, suspend or cease some or all aspects of its planned operations, and/or seek protection under applicable state and federal bankruptcy and insolvency laws. NOTE 3 - Inventories Inventories are comprised of the following (in thousands): October 31, 1996 July 31, 1996 ---------------- ------------- (unaudited) Finished Goods $1,172 $1,000 Work-in-process 452 710 Raw materials 931 1,450 Valuation adjustment (345) (773) -------- ------- $2,210 $2,387 ======== ======= 8 U.S. ELECTRICAR, INC. AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (Continued) NOTE 4 - Notes and Bonds Payable, Long-Term Debt and Other Financing Notes and bonds payable and long-term debt are comprised of the following (in thousands):
October 31, 1996 July 31, 1996 ---------------- ------------- Series S secured convertible bonds, interest at 10; principal and interest due March 1997, secured by the personal property of the parent company $3,000 $3,000 Convertible secured notes under a Supplemental Loan Agreement with ITOCHU Corporation; interest at 10, principal and interest due April 1997, secured by the personal property of the parent company 3,000 3,000 Convertible secured note (acquisition of Nordskog); due January 1997, with interest at 9% payable quarterly; secured by certain machinery and equipment of the subsidiary; in September 1996, the assets associated with the previous acquisition of Nordskog were sold in exchange for the assumption of this note -- 1,013 Secured promissory note - Credit Managers Association of California ("CMAC") as exclusive agent for Non-Qualified Creditors; interest at 3%, with principal and interest due April 1999; secured with an interest in a sinking fund escrow consisting of 10% of any financing received ubsequent to April 1996; the Board of Directors may waive the sinking fund set aside on a case-by-case basis 95 95 Secured subordinated promissory note - CMAC as exclusive agent for Qualified Creditors; interest at 3%, with principal and interest due April 1999; secured with an interest in a sinking fund escrow as noted above 560 560 Secured subordinated promissory note - CMAC as exclusive agent for Non-Qualified Creditors; interest at 3% for the first 5 years, 6% for years 6 and 7, and then at prime plus 3% through date of maturity; interest payments are made upon payment of principal, with principal and interest due no later than April 2016; secured with an interest in a sinking fund escrow as noted above; payments on this note are subordinated to payment in full on all principal and accrued interest owed on the above 3-year non-qualified and qualified notes 3,332 3,332 Promissory note - accrued interest on Nordskog convertible secured note converted to a new note; due upon receipt of additional financing by the Company, with interest at 9% 147 -- 9 NOTE 4 - LONG-TERM DEBT (Continued) October 31, 1996 July 31, 1996 ---------------- ------------- Promissory note payable to principals of Systronix Corporation in connection with the acquisition of Systronix; interest at 10%, due November 25, 1996 830 -- Convertible secured promissory note; interest at 10%, due November 1996; convertible into common stock at $0.30 a share 600 100 Other 170 170 ------- ------- 11,734 11,270 Less current maturities 7,747 7,283 ------- ------- $3,987 $ 3,987 ======= =======
10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The matters addressed below, with the exception of the historical information presented, may incorporate certain forward-looking statements involving risks and uncertainties, including the risks discussed under the heading "Certain Factors That May Affect Future Results", as reported by the Company in the Form 10-K filed with the Commission on November 12, 1996. GENERAL U.S. Electricar, Inc. and Subsidiaries (the "Company") develops, converts, assembles, manufactures and distributes battery-powered electric vehicles, including on-road pick-up trucks, passenger cars, buses and delivery vehicles, and a variety of off-road industrial vehicles. The Company's product lines included converted vehicles (originally built to be powered by internal combustion engines) and vehicles that are built specifically to be battery powered. The Company's fiscal year ends July 31. All year references refer to fiscal years. During 1994 and the first half of 1995, the Company's approach to its business was to establish manufacturing, marketing and support functions of a large scale company so that the transition from development and prototype activities to volume production of on-road electric vehicles could be made as quickly as possible once component parts design, systems integration and assembly processes were developed. The Company raised approximately $38 million to fund its activities during this period. However, the Company was not able to achieve volume production primarily because the development of such designs and processes were not completed prior to the company's capital becoming severely depleted which occurred in the second half of 1995. The Company incurred losses totaling $62,586,000 during 1994 and 1995. The Company was forced to severely curtail its activities in the second half of 1995 due to a lack of funds. Certain facilities were closed and operations were consolidated, and the Company initiated programs to restructure its debt and raise interim funding. During 1996, the Company restructured a significant portion of its debt and raised approximately $5 million in interim funding. However, its operations continued to be impacted by an insufficient amount of funds to adequately support its planned sales volumes and product development programs. The Company curtailed the manufacture and sale of off-road industrial vehicles in the third and fourth quarters of 1996 and reduced the carrying values of the assets associated with this product line. In 1996, the Company incurred a loss of $9,354,000. In September 1996, a substantial portion of the assets of Industrial Electric Vehicles, Inc., (formerly Nordskog Electric Vehicles, Inc. (Nordskog), prior to its acquisition by the Company) were sold. Consideration for this sale included the assumption of, and release of liability for, the note payable that totaled $1,013,000 at July 31, 1996 to Nordskog. On October 25, 1996, the Company acquired substantially all the tangible and intangible assets, and assumed certain liabilities, of Systronix Corporation (Systronix). LIQUIDITY AND CAPITAL RESOURCES The Company has experienced significant recurring cash flow shortages due to operating losses primarily attributable to research, development ,administrative and other expenses associated with the Company's efforts to become an international manufacturer and distributor of electric vehicles. Cash flows from operations have been extremely negative and have not been sufficient to meet the Company's obligations as they came due. The Company has therefore had to raise funds through numerous financial transactions and from various resources. At least until the Company reaches break-even volume in sales and develops and/or acquires the capability and technology necessary to manufacture and sell its electric vehicles profitably, it will need to continue to rely extensively on cash from debt and equity financing. The Company anticipates that it will require substantial additional outside financing for at least two more years. 11 During the three months ended October 31, 1996, the Company spent $771,000 in cash on operating activities to fund the net loss of $2, 671,000 resulting from factors explained in the following section of this discussion and analysis. Accounts receivable, exclusive of the divestiture of the industrial electric vehicles business, increased by $280,000. The reduction of accounts receivable attributable to this divestiture was $365,000, net of allowances. Inventory, net of the divestiture of the industrial electric vehicles business, which reduced inventory by $470,000, and the acquisition of Systronix Corporation, which increased inventory by $499,000, decreased by $201,000. The operations of the Company during the three months ended October 31, 1996 were financed primarily by $472,000 received from the issuance of promissory notes and an additional $300,000 received from Fontal International, Ltd., for sales of unregistered common stock under Regulation S. IF THE COMPANY IS UNABLE TO COMPLETE THE VOLUNTARY RESTRUCTURING OF ITS DEBT OR OTHERWISE REFINANCE OR CONVERT SUCH DEBT, AND ADDITIONAL FUNDING IS NOT AVAILABLE, THE COMPANY WOULD BE FORCED TO SEEK PROTECTION UNDER APPLICABLE STATE AND FEDERAL BANKRUPTCY AND INSOLVENCY LAWS. SIGNIFICANT ADDITIONAL FUNDING WILL BE NEEDED DURING THE REMAINDER OF 1997 AND IN 1998. AS OF DECEMBER 12, 1996, THE COMPANY HAD NO COMMITMENTS FROM ANY PERSON OR ENTITY TO PROVIDE CAPITAL AND THERE CAN BE NO ASSURANCE THAT ADDITIONAL FUNDS WILL BE AVAILABLE FROM ANY SOURCE AT THE TIME THE COMPANY WILL NEED SUCH FUNDS. THE INABILITY OF THE COMPANY TO OBTAIN ADDITIONAL FUNDING ON TERMS ACCEPTABLE TO THE COMPANY WILL HAVE A MATERIAL ADVERSE EFFECT ON ITS BUSINESS. THE FUTURE AVAILABILITY OR INADEQUACY OF FINANCING TO MEET FUTURE NEEDS COULD FORCE THE COMPANY TO DELAY, MODIFY, SUSPEND OR CEASE SOME OR ALL ASPECTS OF ITS PLANNED OPERATIONS, AND/OR SEEK PROTECTION UNDER APPLICABLE STATE AND FEDERAL BANKRUPTCY AND INSOLVENCY LAWS. RESULTS OF OPERATIONS Net sales declined $1,567,000, or 74.8%, in the first quarter of 1997 from the first quarter of 1996. The decline in sales was primarily due to the Company's inability to raise the funds necessary to continue its operations at the same levels as the first quarter of 1996. Significant declines occurred in all product lines. Sales of converted sedans and light trucks declined from 34 units in the first quarter of 1996 to 12 units in the first quarter of 1997. Total revenue from this product line was $409,000 in the first quarter of 1997, down 66.2% from the corresponding quarter of 1996. Sales of industrial vehicles and associated parts and service were only $27,000 in the first quarter of 1997, since this business was sold on September 5, 1996. Cost of sales as a percent of sales increased to 144.7% in the first quarter of 1997 from 110.8% in the first quarter of 1996. The increase in costs was primarily due to the low levels of production and high costs from purchasing parts in small quantities. 12 Research and development expense decreased in the first quarter of 1997 by $170,000, or 50.6%, from the first quarter of 1996 primarily as a result of a significant reduction by the Company of its technical resources. The Company reduced its technical staff and curtailed purchasing engineering services due to a severe lack of funds. Selling, general and administrative expense in the first quarter of 1997 declined $637,000, or 51.5%, primarily as a result of a significant reduction in staff and outside services due to the aforementioned lack of funds. Interest and financing fees in the first quarter of 1997 declined $ 388,000, or 90.9%, from the first quarter of 1996. During 1996, the Company converted $15,548,000 of principal and accrued interest to common stock, resulting in a significant decrease in interest expense. In October 1996, the Company acquired most of the assets and certain liabilities of Systronix Corporation, a research company involved in the design and development of drive trains for electric powered vehicles. The tangible assets were recorded at their fair market value at the time of the acquisition. The intangible assets were recorded as research and development expense. As a result of the foregoing changes in net sales, cost of sales, other costs and expenses, the acquisition of a research company and the gain on debt restructuring, the net loss increased $727,000, or 37.4%, from $1,944,000 in the first quarter of 1996 to $ 2,671,000 in the first quarter of 1997. 13 PART II. OTHER INFORMATION Item 1. Legal Proceedings: The Company reported in Form 10-K filed with the Commission on November 12, 1996, that on October 15, 1996, San Francisco Superior Court sustained without leave to amend a demurrer filed by the Company and a previous officer to an amended complaint originally filed by a shareholder on May 20, 1996. The Company also reported in Form 10-K that on October 29, 1996, the shareholder filed a motion for reconsideration. On November 27, 1996, the motion for reconsideration was denied. Item 2. Changes in Securities: None. Item 3. Defaults Upon Senior Securities: Nordskog: In connection with the acquisition of Nordskog Electric Vehicles, Inc., renamed Industrial Electric Vehicles, Inc. ("IEV"), in July 1993, the Company issued a $1,000,000 secured convertible promissory note due in January 1997, with interest at 9% annually and payable quarterly. This note was secured by machinery and equipment owned by IEV. During 1995, the Company sold some of the machinery and equipment used to secure the note and used the proceeds of $18,000 to pay down the principal. Quarterly interest payments have not been paid, causing an event of default. The note holder did not exercise any of its remedies with respect to the acceleration of the principal and interest nor the collateral securing this note. The full amount of the note was classified as a current liability in 1995, due to the event of default. In September 1996, the Company sold the assets of IEV to a group headed by former employees of the Company. The buyers assumed the liability for the note, and the Company was released from this liability. A new promissory note was issued to Nordskog for the accrued unpaid interest of $147,000 that was outstanding on the secured convertible promissory note at the time the sale of the IEV business was completed. Series S Bonds: In March 1995, the Company defaulted on the payment of principal and interest totaling $12,600,000 originally due March 23, 1995 on its Series S Bonds. In May 1995, the Company and the holders of more than 75% of the holders of the Series S Bonds entered into agreements to restructure the convertible debt held pursuant to such bonds such that the unpaid interest be added to principal, the maturity dates be reset for March 1996, and the conversion rate to common stock for most of the debt thereunder was established at $0.30 per share. The holders of the debt also agreed that a conversion shall occur upon (1) a restructuring/repayment plan accepted by the Company's unsecured creditors holding 80% or more of the Company's unsecured trade debt, or (2) the election by Itochu Corporation to cause conversion of the debt. Systronix: In connection with the acquisition on October 25, 1996, of all of the assets and certain liabilities of Systronix Corporation, the Company issued an $829,978.39 Promissory Note due November 25, 1996, secured by the acquired assets pursuant to a security agreement ("the Note"). The terms of the transaction and the Note are more fully reported in the Company's Form 10-K 14 filed with the Commission on November 12, 1996. The principal and accrued interest due under the Note have not been paid, causing an event of default under the terms of the Note. As of December 12, 1996, the holder of the Note has not yet exercised any of its remedies with respect to the collateral securing the Note. Item 4. Submission of Matters to a Vote of Securities Holders: None. Item 5. Other Information: None. Item 6. Exhibits and Reports on Firm 8-K: (a) Exhibits: None. (b) Reports on Form 8-K The Company filed a report on Form 8-K with the Commission on September 19, 1996 reporting the sale of substantially all of the assets of its wholly-owned subsidiary, Industrial Electric Vehicles, Inc. The Company filed a report on Form 8-K with the Commission on August 20, 1996 reporting the execution of a Memorandum of Understanding with Systronix Corporation for the purchase by the Company of the assets of Systronix. [This space intentionally left blank.] 15 SIGNATURE Pursuant to the requirements of Section 13 or 15 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 on December 12, 1996. U.S. ELECTRICAR, INC. (Registrant) /s/ Roy Y. Kusumoto - -------------------------------------------------------------------------------- By: Roy Y. Kusumoto, Chief Executive Officer, President and Acting Chief Financial Officer (Principal executive officer and principal financial and accounting officer) 16 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS IN THE ANNUAL REPORT ON FORM 10-Q OF U.S. ELECTRICAR, INC. FOR THE QUARTER ENDED OCTOBER 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS JUL-31-1997 AUG-01-1996 OCT-31-1996 51 0 771 0 2,210 3,216 953 0 4,236 14,015 3,987 60,957 0 6,018 (79,661) 4,236 527 527 763 1,529 1,630 0 39 (2,671) 0 (2,671) 0 0 0 (2,671) (0.02) (0.02)
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