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 March 31, 1997 [ ] 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 Identification No.) incorporation or organization) 404 East Huntington Drive, Monrovia, California 91016 - ---------------------------------------- -------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (818) 932-1200 - ------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No -- -- At May 9, 1997 the registrant had 12,542,500 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. Condensed Financial Statements Condensed Balance Sheet 3 Condensed Statement of Operations 4 Condensed Statement of Shareholders' Equity 5 Condensed Statement of Cash Flows 6 Notes to Condensed Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 Part II. OTHER INFORMATION 14 Signature 15 (2)
AMERIGON INCORPORATED (A DEVELOPMENT STAGE ENTERPRISE) CONDENSED BALANCE SHEET (IN THOUSANDS, EXCEPT PER SHARE DATA) December 31, March 31, 1996 1997 ------------------------------- ASSETS (unaudited) Current Assets: Cash and cash equivalents $203 $11,741 Accounts receivable less allowance of $80 1,188 1,809 Unbilled revenue 1,157 242 Inventories, primarily raw materials 20 20 Prepaid expenses and other assets 744 215 ------------------------------- Total current assets 3,312 14,027 Property and Equipment, net 610 543 ------------------------------- Total Assets $3,922 $14,570 ------------------------------- ------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable $1,567 $509 Deferred revenue 154 239 Accrued liabilities 519 618 Note payable to shareholder 200 - Bridge Notes and debentures payable 3,000 - Bank loan payable 1,187 - ------------------------------- Total current liabilities 6,627 1,366 ------------------------------- Long Term Portion of Lease Liability 43 39 ------------------------------- Shareholders' Equity: Preferred stock, no par value; 5,000,000 shares authorized, none issued and outstanding Common stock: Class A -no par value; 40,000,000 shares authorized, 9,542,500, and 4,069,000 issued and outstanding at March 31, 1997 and December 31, 1996, respectively (An additional 3,000,000 shares held in escrow) 17,321 28,408 Class B -no par value; 3,000,000 shares authorized, none issued and outstanding Class A Warrants - 6,767 Contributed capital 3,115 3,115 Deficit accumulated during development stage (23,184) (25,125) ------------------------------- Total shareholders' equity (2,748) 13,165 ------------------------------- Total Liabilities and Shareholders' Equity $3,922 $14,570 ------------------------------- ------------------------------- See accompanying notes to the condensed financial statements. (3)
AMERIGON INCORPORATED (A DEVELOPMENT STAGE ENTERPRISE) CONDENSED STATEMENT OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) April 23, 1991 Three Months (inception) Ended March 31, to March 31, 1996 1997 1997 --------------- -------------- (unaudited) (unaudited) Revenues: Development contracts and related grants $3,054 $384 $16,313 Grants - 12 6,168 --------------- -------------- Total revenues 3,054 396 22,481 --------------- -------------- Costs And Expenses: Direct development contract and related grant costs 2,771 869 19,187 Direct grant costs - 28 4,760 Research and development 384 256 9,043 Selling, general and administrative, including reimbursable expenses 555 794 14,581 --------------- -------------- Total Costs and Expenses 3,710 1,947 47,571 Operating Loss (656) (1,551) (25,090) Interest Income 36 67 633 Interest Expense - (117) (328) --------------- -------------- Loss Before Extraordinary Item ($620) ($1,601) ($24,785) Extraordinary loss from extinguishment of indebtedness - (340) (340) --------------- -------------- Net loss ($620) ($1,941) ($25,125) --------------- -------------- --------------- -------------- Loss per share before extraordinary item ($0.15) ($0.25) --------------- --------------- Net loss per share ($0.15) ($0.30) --------------- --------------- Weighted average number of shares outstanding 4,050 6,488 --------------- --------------- See accompanying notes to the condensed financial statements. (4)
AMERIGON INCORPORATED (A DEVELOPMENT STAGE ENTERPRISE) STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT) (IN THOUSANDS) (UNAUDITED) <TABLE> <CAPTION> Common Stock Deficit Preferred --------------------------------- Accumulated Stock Class A Class B During the --------------- --------------- --------------- Class A Contributed Development Shares Amount Shares Amount Shares Amount Warrants Capital Stage Total ------ ------ ------ ------ ------ ------ -------- ----------- ----------- -------- <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> Balance at April 23, 1991 (Inception) - - 1,000 $100 - - - - - $100 Contributed capital-founders' services provided without compensation $111 111 Net loss $(616) (616) ------ ------ ------ ------- ------ ------ -------- ----------- ----------- --------- Balance at December 31, 1991 - - 1,000 100 - - - 111 (616) 405 Transfer of common stock to employee by principal shareholder for services 150 150 Contributed capital-founders' services provided without compensation 189 189 Net loss (1,459) (1,459) ------ ------ ------ ------- ------ ------ -------- ----------- ----------- --------- Balance at December 31, 1992 - - 1,000 100 - - - 450 (2,075) (1,525) Issuance of common stock (public offering) 2,300 11,534 11,534 Options granted by principal shareholder for services 549 549 Contribution of notes payable to contributed capital 2,102 2,102 Net loss (3,640) (3,640) ------ ------ ------ ------- ------ ------ -------- ----------- ----------- --------- Balance at December 31, 1993 - - 3,300 11,634 - - - 3,101 (5,715) 9,020 Compensation recorded for variable plan stock option 1 1 Net Loss (4,235) (4,235) ------ ------ ------ ------- ------ ------ -------- ----------- ----------- --------- Balance at December 31, 1994 - - 3,300 11,634 - - - 3,102 (9,950) 4,786 Private placement of common stock 750 5,636 1 5,637 Compensation recorded for variable plan stock option 12 12 Net loss (3,237) (3,237) ------ ------ ------ ------- ------ ------ -------- ----------- ----------- --------- Balance at December 31, 1995 - - 4,050 17,270 - - - 3,115 (13,187) 7,198 Exercise of stock options 20 160 160 Repurchase of common stock (1) (15) (15) Expenses of sale of stock (94) (94) Net loss (9,997) (9,997) ------ ------ ------ ------- ------ ------ -------- ----------- ----------- --------- Balance at December 31, 1996 - - 4,069 17,321 - - - 3,115 (23,184) (2,748) Follow on Public Offering 5,474 11,087 6,617 17,704 Conversion of Bridge Debeuntures into Class A Warrants 150 150 Net loss (1,941) (1,941) ------ ------ ------ ------- ------ ------ -------- ----------- ----------- --------- Balance at March 31, 1997 9,543 $28,408 $6,767 $3,115 $(25,125) $13,165 </TABLE> See accompanying notes to the condensed financial statements. (5)
AMERIGON INCORPORATED (A DEVELOPMENT STAGE ENTERPRISE) CONDENSED STATEMENT OF CASH FLOWS (IN THOUSANDS) <TABLE> <CAPTION> From April 23, 1991 Three Months (inception) To Ended March 31, March 31, 1996 1997 1997 ------------------------- ----------- (unaudited) (unaudited) <S> <C> <C> <C> Operating Activities: Net loss ($620) ($1,941) ($25,125) Adjustments to reconcile net loss to cash used in operating activites: Depreciation and amortization 90 97 1,009 Provision for doubtful accounts 190 Stock option compensation 712 Contributed capital-founders' services provided without cash compensation 300 Change in operating assets and liablilities: Accounts receivable (221) (621) (1,999) Unbilled revenue (1,816) 915 (242) Inventory 2 (20) Deferred Contract Costs (550) - Prepaid expenses and other assets 134 529 (215) Accounts payable (62) (1,058) 509 Deferred revenue (7) 85 239 Accrued liabilities (61) 99 618 ------------------------- ----------- Net cash used in operating activities (3,111) (1,895) (24,024) ------------------------- ----------- Investing Activities: Purchase of property and equipment (148) (30) (1,474) Short term investments ------------------------- ----------- Net cash used in investing activities (148) (30) (1,474) ------------------------- ----------- Financing Activities: Proceeds (expenses) from sale of common stock and warrants, net (94) 17,704 34,881 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 (4) (4) (39) Proceeds from Bridge Financing 3,000 Repayment of Bridge Financing (2,850) (2,850) Proceeds from notes payable to shareholder 250 450 Repayment of notes payable to shareholder (450) (450) Notes payable to shareholders contributed to Capital 2,102 ------------------------- ----------- Net cash (used in) provided by financing activities (98) 13,463 37,239 ------------------------- ----------- Net (decrease) increase in cash and cash equivalents (3,357) 11,538 11,741 Cash and cash equivalents at beginning of period 4,486 203 - ------------------------- ----------- Cash and cash equivalents at end of period $1,129 $11,741 $11,741 ------------------------- ----------- ------------------------- ----------- Supplemental Disclosure of Cash Flow Information: Cash paid for: Interest - $113 $271 ------------------------- ----------- ------------------------- ----------- Supplemental Disclosure of NonCash Transaction: Conversion of Bridge Debentures into warrants - $150 $150 ------------------------- ----------- ------------------------- ----------- </TABLE> See accompanying notes to the condensed financial statements. (6)
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 condensed balance sheet as of March 31, 1997 and the condensed statements of operations, shareholders' equity and cash flows for the three months ended March 31, 1997 and for the period from April 23, 1991 (inception) to March 31, 1997 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 period ended March 31, 1997 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, 1996. DEVELOPMENT CONTRACT REVENUES AND RELATED GRANTS. The Company has 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 parallel 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. (7)
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 (Note 4). 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 - ESCROW AGREEMENT: Prior to the effective date of the June 1993 initial public offering, 3,000,000 shares of the Company's Class A Common Stock ("Escrowed Contingent Shares") were deposited into escrow by the then existing shareholders in proportion to their then current holdings. These shares are not transferable (but may be voted) and will be released from escrow in the event the Company attains certain pre-tax earnings levels during the period through December 31, 1998. The Company expects that the release of the Escrowed Contingent Shares, if any, will be deemed compensatory and, accordingly, will result in charges to earnings equal to the fair market value of the Escrowed Contingent Shares recorded ratably over the period beginning on the date when management determines that any of the specified events are probable of being attained and ending on the date on which the Escrowed Contingent Shares are released. At the time a goal is attained, previously unrecognized compensation expense will be adjusted by a one-time charge based on the then fair market value of the shares released from Escrow. Such charges could substantially reduce the Company's net income or increase the Company's loss for financial reporting purposes in the periods such charges are recorded. The specified events are not considered probable of attainment at this time. On April 30, 1999, all shares that have not been released from Escrow will automatically be exchanged for shares of Class B Common Stock, which will then be released from Escrow. Any dividends or other distributions made with respect to Escrowed Contingent Shares that have not been released from Escrow as Class A Common Stock will be forfeited and contributed to the capital of the Company on April 30, 1999. NOTE 5 - 1997 PUBLIC STOCK OFFERING: On February 18, 1997, the Company completed an offering of 17,000 Units, each consisting of 280 shares of Class A Common Stock and 280 Class A Warrants to purchase, at $5.00 per share, an equal number of shares of Class A Common Stock. Proceeds to the Company, net of the underwriter's fees and commissions and expenses of the Offering, were approximately $15,300,000. In addition, on March 7, 1997, the underwriter exercised an option to purchase an additional 2,550 Units to cover over-allotments. Additional proceeds from the sale of the Units pursuant to the underwriter's exercise of the over-allotment option, net of the underwriter's fees and commissions and all expenses, were approximately $2,400,000. (Hereinafter, the Company's offering of a total of 19,550 Units as described above is collectively referred to as the "1997 Public Offering.") (8)
NOTE 6 - EXTRAORDINARY LOSS ON EXTINGUISHMENT OF INDEBTEDNESS: On October 31, 1996, the Company completed a private placement (the "1996 Bridge Financing") of 60 bridge units (each a "Bridge Unit"), each consisting of one $47,500 principal amount 10% unsecured promissory note made by the Company (each a "Bridge Note") and one $2,500 principal amount 10% convertible subordinated debenture (each a "Bridge Debenture"). Upon the completion of the 1997 Public Offering, the Bridge Notes were repaid and the Bridge Debentures were converted into a total of 1,620,000 warrants to purchase Class A Common Stock. In the First Quarter of 1997, the Company recorded a non-cash charge resulting from the elimination of the remaining unamortized portion of the deferred debt issuance costs totaling approximately $340,000. NOTE 7 - STOCK WARRANTS: In connection with the 1997 Public Offering, the Company issued 4,760,000 Class A Warrants to purchase Class A Common Stock. Each Class A Warrant entitles the registered holder thereof to purchase, at any time until February 12, 2002, one share of the Company's Class A Common Stock at an exercise price of $5.00, subject to adjustment. In addition, on March 7, 1997, the underwriter exercised an over-allotment option which resulted in the issuance of an additional 714,000 Class A Warrants. (9)
PART 1 ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS FIRST QUARTER 1997 COMPARED WITH FIRST QUARTER 1996 REVENUES. Revenues for the three months ended March 31, 1997 ("First Quarter 1997") were $396,000 as compared with revenues of $3,054,000 in the three months ended March 31, 1996 ("First Quarter 1996"). Approximately $83,000 of First Quarter 1997 revenue related to a single electric vehicle development contract and related grants, which was a decrease of approximately $2,183,000 compared to the corresponding amount attributable to such contract and grants in First Quarter 1996. The decrease in development contract and related grant revenues was due principally to the fact that the Company substantially completed its major electric vehicle development contract with Samsung Heavy Industries Co., Ltd. in 1996 and did not obtain any comparable replacement development contracts during First Quarter 1997. The percentage of completion method of accounting is used for this contract and, accordingly, revenues and gross profit are recognized as work is performed based on the relationship between actual costs incurred and total estimated costs at completion. Revenues and gross profit are recognized prospectively after taking into account revisions in estimated total contract costs and contract values, and estimated losses are recorded when identified. Grant revenue is recorded when reimbursable costs are incurred. No replacement for the Samsung contract is currently scheduled to follow or expected to be obtained. All other development contract revenue (relating to the Company's climate controlled seats, radar and IVS-TM- products) increased to $301,000 in First Quarter 1997, an increase of $19,000, or approximately 6.7%, from the $282,000 in such revenue recorded for First Quarter 1996. The increase in First Quarter 1997 principally reflects the Company's completion of work on several development contracts relating to the climate controlled seats, radar products and IVS-TM-. As of March 31, 1997, the Company had only minor development contracts in place, under which a total of not more than approximately $317,000 potentially remains to be earned by the Company (although no assurance can be given that all or any portion of such amount will ultimately be earned or received). During First Quarter 1997, development continued on the climate control seat systems and the radar systems, which was funded in part by development contracts. The revenues recognized for the development of the climate control seat and radar systems, and for the development contract and sales of interactive voice navigation systems ("IVS-TM-") in First Quarter 1997, was $301,000 compared to $282,000 in First Quarter 1996. Demand for the IVS-TM-product continues to be weak. The Company has previously announced that it has entered into a conditional letter of intent with Yazaki Corporation and Technology Strategies and Alliances to form a joint venture to develop and market the IVS-TM- product in the automotive aftermarket. (See the Company's Annual Report on Form 10-K for the year ended December 31, 1996 for further information.) Grant revenues from activities not related to development contracts totaled $12,000 in First Quarter 1997. There were no grant activities in First Quarter 1996 related to the Company's other products. The Company does not obtain grants on a regular basis, and those grants that are obtained vary as to amount and as to the nature and duration of the work (and type of product) covered. As of March 31, 1997, no more than approximately $615,000 remained to be earned under existing grants (although no assurance can be given that all or any portion will of such amount will ultimately be earned or received). The Company has previously announced its intention to reduce its efforts to obtain new grants and to focus on working toward production contracts for climate controlled seats and radar sensor systems. (10)
DIRECT DEVELOPMENT CONTRACT AND RELATED GRANT COSTS. Direct development contract and related grant costs decreased to $869,000 in First Quarter 1997 compared to $2,771,000 in First Quarter 1996. Included in these costs are costs related to commercial sales of IVS-TM- products totaling $5,000 in First Quarter 1997 and $221,000 in First Quarter 1996. Direct development contract and related grant costs decreased significantly in First Quarter 1997 relative to First Quarter 1996 due to the decreased activity in the Company's electric vehicle program, as discussed above. DIRECT GRANT COSTS. Direct grant costs were $28,000 in First Quarter 1997. There were no direct grant costs in First Quarter 1996. These costs are related to the projects for which grant revenues are reported. The Company anticipates that direct grant costs will decrease during the remainder of 1997 as the Company completes work on the remaining active grants and focuses its efforts on working toward production contracts for climate controlled seats and radar sensor systems. The Company anticipates that certain of these grant costs will be reimbursable to the Company during the remainder of 1997 as the Company achieves certain billing milestones under the respective grants. RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses decreased to $256,000 in First Quarter 1997 from $384,000 in First Quarter 1996. These expenses represent research and development expenses for which no development contract or grant funding has been obtained. Expenses of research and development projects that are specifically funded by development contracts from customers are classified under direct development contract and related grant costs of direct grant costs. Due to the Company's significant cash shortfalls at the beginning of First Quarter 1997, the Company was constrained in its ability to undertake research and development activities. Research and development activities are expected to increase in Second Quarter 1997 as the Company's ability to finance such activities has improved since the completion of the 1997 Public Offering. The Company's research and development expenses fluctuate significantly from period to period, due to both changing levels of activity and changes in the amount of such activities that are covered by customer contracts or grants. Where possible, the Company seeks funding from third parties for its research and development activities. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and administrative ("SG&A") expenses increased to $794,000 in First Quarter 1997 compared to $555,000 in First Quarter 1996. The increase in First Quarter 1997 was due principally to the fact that fewer SG&A expenses were allocated to development contracts. Direct and indirect overhead expenses included in SG&A that are associated with development contracts are allocated to such contracts. As the Company has not obtained any replacement development contracts, the Company anticipates that SG&A expenses may continue to increase in 1997. INTEREST EXPENSE. The interest expense in First Quarter 1997 was related to the bank line of credit obtained to finance work on the Samsung electric vehicle contract, the 1996 Bridge Financing, and loans from the Company's Chief Executive Officer and principal shareholder. There were no such loans in First Quarter 1996. Interest income increased to $67,000 in First Quarter 1997 from $36,000 in First Quarter 1996, reflecting higher cash balances upon the completion of the 1997 Public Offering. Net interest income (loss) during First Quarter 1997 was ($50,000) compared with $36,000 in First Quarter 1996. (11)
EXTRAORDINARY ITEM. Extraordinary loss on extinguishment of debt was $340,000 in First Quarter 1997. These expenses were related to the elimination of the remaining unamortized portion of the deferred 1996 Bridge Financing costs. LIQUIDITY AND CAPITAL RESOURCES At March 31, 1997, the Company had working capital of $12,661,000. In First Quarter 1997, the Company completed the 1997 Public Offering and raised approximately $17,700,000 of net proceeds. Approximately $4,100,000 of such proceeds were used in part to pay off most of the Company's indebtedness, including a bank line of credit, which was terminated effective February 18, 1997. 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 contacts and the sales of prototype to customers. As of March 31, 1997, the Company had approximately $11,247,000 in remaining proceeds from the 1997 Public Offering. Other than such remaining Offering proceeds, the Company has virtually no sources of liquidity. Cash and cash equivalents increased by $11,538,000 during First Quarter 1997. Operating activities used $1,895,000, which primarily as a result of the operating loss of $1,941,000. Reductions in unbilled revenues of $915,000 (related to billings under the electric vehicle program) and in prepaid expenses and other assets of $529,000, together with increases in deferred revenue and accrued liabilities of $184,000 were offset by the decrease in accounts payable of $1,058,000, the increase in accounts receivable of $621,000 and the other uses of cash for operating activities. Investing activities used $30,000 related to the purchase of property and equipment. Financing activities provided $13,463,000 of which approximately $17,704,000 was from the 1997 Public Offering. $1,187,000 was used for the repayment of the bank line of credit, $2,850,000 was used for repayment of the 1996 Bridge Financing, and $450,000 was used for repayment of loans from the Company's Chief Executive Officer and principal shareholder. The Company expects to incur losses for the foreseeable future due to the continuing cost of its product development and marketing activities. To fund its operations, the Company will continue to need cash from financing sources unless and until such time as sufficient profitable production contracts are obtained. Unless the Company obtained one or more additional significant development contracts or grants (as to which there can be no assurance), the Company would not be able to obtain bank financing to fund its operations. Moreover, even if such additional development contracts are obtained, there still cannot be any assurance that the Company would be able to obtain bank financing on terms affordable to the Company or on any terms. Cash inflows during the development and early stage production period are dependent upon achieving certain billing milestones under existing development contracts and grants, and on obtaining new production and/or development contracts. Cash outflows are dependent upon the level and timing (12)
of production and/or development work and the amount of research and development and overhead expenses. Cash inflows must be supplemented by cash from debt and/or equity financing, the availability of which can not be assured. If and when the Company is able to commence commercial production of its heated and cooled seat or radar products, the Company will incur 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. While the Company believes that the remaining proceeds from the Offering will be sufficient to meet its expected capital needs through approximately the end of 1997, no assurance can be given that unanticipated needs for capital will not develop that would exceed the Company's capital resources or that, even in the absence of any such unanticipated needs, the Company's current working capital will prove sufficient to fund its capital needs through the end of 1997 as currently anticipated. Over the long-term, the Company expects to continue to expend substantial funds to continue its development efforts. The Company has experienced negative cash flow from operating activities since its inception and has not generated, and does not expect to generate in the foreseeable future, sufficient revenues from the sales of its principal products to cover its operating expenses or to finance such further development efforts. Accordingly, the Company expects that significant additional financing will be necessary to fund the Company's long-term operations. (13)
PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. Not applicable. ITEM 2. CHANGES IN SECURITIES. Not applicable. ITEM 3. DEFAULTS UPON SENIOR SECURITIES. Not applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not applicable. ITEM 5. OTHER INFORMATION. Not applicable. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. a. Exhibits 10.1 Letter of Intent, together with Addendum thereto, among the Company, Yazaki Corporation, and Technology Strategies and Alliances 27 Financial Data Schedule b. Reports on Form 8-K The Company filed a Current Report on Form 8-K dated January 31, 1997 reporting information under Item 5. (14)
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: May 14, 1997 /s/ Lon E. Bell ---------------- Lon E. Bell Chief Executive Officer and Chairman of the Board and Acting Principal Financial and Accounting Officer