-----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, AES2Qoyjf+DrlSH3KXU+qa9THo1/dw/Qx92+lnF8Pr5GpXpfnG/Sd6wA1FUtO5Kg EeRcMy17Qa7PQ0UCgChJwA== 0000950134-00-002679.txt : 20000331 0000950134-00-002679.hdr.sgml : 20000331 ACCESSION NUMBER: 0000950134-00-002679 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000330 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BOLDER TECHNOLOGIES CORP CENTRAL INDEX KEY: 0001011108 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES [3690] IRS NUMBER: 841166231 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 000-28060 FILM NUMBER: 584438 BUSINESS ADDRESS: STREET 1: 4403 TABLE MOUNTAIN PARKWAY CITY: GOLDEN STATE: CO ZIP: 80403 BUSINESS PHONE: 3032157200 MAIL ADDRESS: STREET 1: 4403 TABLE MOUNTAIN DRIVE STREET 2: ST 103 CITY: GOLDEN STATE: CO ZIP: 80403 10-K 1 FORM 10-K FOR FISCAL YEAR END DECEMBER 31, 1999 1 =============================================================================== UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999, OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NUMBER 0-28060 BOLDER TECHNOLOGIES CORPORATION (Exact name of Registrant as specified in its charter) DELAWARE 84-1166231 (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 4403 TABLE MOUNTAIN DRIVE GOLDEN, CO 80403 (Address of principal executive offices) (Zip Code) (303) 215-7200 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: NONE Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK, PAR VALUE $.001 PER SHARE (TITLE OF CLASS) 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 and 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 [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] The aggregate market value of the Common Stock held by non-affiliates of the Registrant, based upon the closing price of the Common Stock reported on the Nasdaq Stock Market (National Market) on February 29, 2000 was $124,074,000. The number of shares of Common Stock outstanding as of February 29, 2000 was 14,565,168. DOCUMENTS INCORPORATED BY REFERENCE Certain portions of the Registrant's definitive proxy statement to be filed not later than 120 days after December 31, 1999, in connection with the Registrant's 2000 Annual Meeting of Stockholders is incorporated by reference into Part III of this Form 10-K. =============================================================================== 2 TABLE OF CONTENTS
PAGE ---- PART I Item 1. Business........................................................................................3 Item 2. Properties.....................................................................................10 Item 3. Legal Proceedings..............................................................................11 Item 4. Submission of Matters to a Vote of Security Holders............................................11 PART II Item 5. Market for Registrants' Common Equity and Related Stockholder Matters..........................12 Item 6. Selected Financial Data........................................................................13 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations..........15 Item 7A. Quantitative and Qualitative Disclosures about Market Risk.....................................20 Item 8. Financial Statements and Supplementary Data....................................................20 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure...........20 PART III Item 10. Directors and Executive Officers of the Registrant.............................................21 Item 11. Executive Compensation.........................................................................21 Item 12. Security Ownership of Certain Beneficial Owners and Management.................................21 Item 13. Certain Relationships and Related Transactions.................................................22 PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K ...............................23
2 3 PART I ITEM 1. BUSINESS This Annual Report contains various forward-looking statements and information that are based on management's beliefs as well as assumptions made by and information currently available to management. When used in this document, the words "anticipate," "estimate," "project," "expect" and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated, projected or expected. Key factors that may have a direct bearing on our results include, but are not limited to, those discussed in the sections entitled "Business" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" as well as those discussed in the section entitled "Risk Factors" in our Registration Statement on Form S-3 filed on August 31, 1999 and the prospectus supplement filed November 8, 1999. INTRODUCTION We manufacture and market innovative battery cell powered products for the consumer and other aftermarkets based on our patented thin metal film ("TMF(R)") technology. Our small size, light weight, high power density batteries discharge and recharge very rapidly, possess no memory effect and provide superior performance in cold temperatures. On a specific power (watts per kilogram) basis, our TMF cells perform at 8 to 10 times the level of traditional lead acid batteries that currently provide power for automobiles and boats. We are currently manufacturing TMF cells at the rate of 30,000 to 35,000 per week. We anticipate increasing production as we add production equipment and labor shifts during 2000. In September 1999, we introduced our first commercial product, SECURESTART(TM), a light-weight (less than five pounds) portable jump starter that utilizes our TMF battery technology, six of our 1 Ah cells and built-in cables to quickly jump start cars with dead batteries. This jump-start unit stays charged for up to one year and can be recharged in less than five minutes. It also includes a halogen flashlight. Our SECURESTART Portable Jump Starter is now available through Sears stores, Orchard Supply Hardware stores, and several catalogs including SkyMall, Herringtons, Sears and West Marine. We recently launched our e-commerce website (www.securestartnow.com) to sell SECURESTART directly to consumers. In April 2000, we plan to commence shipments of our recently announced marine version of the SECURESTART Portable Jump Starter which incorporates all of the performance and ease-of-use characteristics of our SECURESTART Portable Jump Starter for auto and truck applications, but also includes corrosion proofing of the control electronics, cables and tin-plated clamp jaws. Our high power density TMF cells are designed to quickly and efficiently deliver large bursts of power. This contrasts with high energy density batteries, which are designed to provide low amounts of power over an extended period of time for applications such as laptop computers, cellular telephone and other electronic devices. We believe our TMF batteries are attractive for use in a variety of applications, including engine starting of all types, standby power and industrial power quality maintenance. MARKET AND PRODUCTS We are developing products for engine starting applications in the automobile, motorsports and marine markets. There are two major categories of engine starting applications - jump starting and primary starting. * JUMP STARTING. Our jump-starting products are portable and are used to provide a quick engine start. SECURESTART is our first commercial jump-starting product. SECURESTART is self-contained and does not require the use of separate jumper cables, additional batteries or another vehicle. SECURESTART weighs only five pounds, holds its charge for up to one year and can be recharged in as little as five minutes. In the fourth quarter 1999, we shipped over 28,000 SECURESTART units to customers. We are also currently developing jump-starting products for the automobile professional and fleet markets. 3 4 o PRIMARY STARTING. We are designing 12V primary starting batteries, both for use in aftermarket applications and for use by OEM's in products they manufacture. We plan to introduce several primary starting products for the automobile, motorsports and marine markets over the next several years. We granted Johnson Controls, Inc. ("JCI") a limited duration, worldwide exclusive royalty-bearing license with respect to the automotive primary starting market. JCI is a major supplier of batteries to the automobile industry. Recently, JCI announced plans to offer engine-starting batteries, based upon our TMF technology, for dual-battery and 36-volt systems under development by major automotive manufacturers. We plan to introduce a line of automobile and truck primary starting batteries for both automotive manufacturers and the automotive aftermarket after JCI's exclusivity ends in July 2001. In addition to engine starting applications, we plan to address other applications by selling our batteries to OEM customers that possess application-specific expertise in areas such as standby power systems, portable generators and power quality applications. STRATEGY Our objective is to become a major supplier of high power density rechargeable batteries and innovative battery-powered products. Our strategies for achieving this objective include the following: o DEVELOP PRODUCTS THAT EXPLOIT THE UNIQUE CAPABILITIES OF TMF BATTERIES. We intend to develop and market our own products, primarily in the engine starting market, where we believe our TMF battery technology is particularly well suited and there is a significant opportunity to redefine the product category. The first example of this is SECURESTART, an easy-to-use, instant engine starter. We also plan to develop and introduce several products in the automobile and motorsports and marine markets over the next several years. o CREATE BRAND RECOGNITION FOR OUR TRADEMARKS, INCLUDING SECURESTART AND BOLDERTECH(TM). We intend to promote the SECURESTART and "BOLDERTECH" trademarks to help create awareness of the capabilities of our technology and permit premium pricing. o USING PRECISION PROCESS CONTROL AND ADVANCED ANALYTICAL TOOLS TO IMPROVE PERFORMANCE AND REDUCE COSTS. We are committed to improving process efficiency, enhancing product quality and performance, and reducing manufacturing costs through the use of advanced process controls and analytical tools. We use sophisticated process controls to capture multiple data points throughout the manufacturing process. We use this data to evaluate, control and improve the cell manufacturing process, optimize and improve product performance and reduce product cost. o PROTECTING AND ENHANCING OUR PROPRIETARY TECHNOLOGY BASE. We consider our product and process technology to be one of our most valuable assets. We believe our technology is applicable to a wide range of products. We intend to exploit this technology by developing new products to meet market needs. We intend to protect our technology base through our established program for intellectual property documentation and protection. TMF TECHNOLOGY We believe that our TMF technology represents a significant advance over existing rechargeable battery technologies for applications that require high power in a small package. TMF rechargeable cells employ a proprietary configuration of traditional lead acid electrochemistry -- the same electrochemistry that has been used in battery systems for over a century and that is currently used in batteries for cars and many electronic applications. We believe that the combination of the following characteristics of our TMF cells offer advantages over other commercially available rechargeable batteries in a broad range of current and future applications: 4 5 o HIGH POWER. TMF batteries are designed to quickly and efficiently deliver high bursts of power. This is important in existing applications such as standby power systems, industrial power quality maintenance and engine starting, and may enable new applications such as high performance hybrid electric vehicles. o COST EFFECTIVE. TMF batteries are manufactured using inexpensive, readily available raw materials. We believe our manufacturing process will be cost effective at high production volumes. o NO MEMORY EFFECT. TMF batteries do not suffer from the memory effect that reduces the capacity of nickel cadmium ("NiCd") batteries if they are discharged and recharged repeatedly. o SMALL SIZE. In high power applications, such as high power/pulse power tools, engine starting and standby power systems, TMF batteries can do the same amount of work as much larger, commercially available rechargeable batteries. Since the battery system typically accounts for a significant part of the physical volume and weight of products, we believe TMF technology can make products smaller and lighter. o FASTER RECHARGE. TMF batteries can be recharged rapidly, allowing them to be back to work quickly, thus increasing the "up time" of devices employing TMF batteries. o STABLE DISCHARGE VOLTAGE. In some applications, notably standby power, electronic circuits must be used to compensate for the voltage drop during discharge of other types of rechargeable batteries. TMF batteries have very stable voltage, even during high rate discharge, which provides more consistent performance and potentially reduces the need for voltage regulation. o COOL OPERATION. High power operation of other commercially available batteries typically generates significant heat, which must be accommodated in the design of products. The low impedance of TMF batteries greatly reduces the amount of heat generated by the battery, thus simplifying product design. o SUPERIOR COLD TEMPERATURE PERFORMANCE. All batteries lose capacity as the temperature drops. TMF batteries lose significantly less of their room temperature capacity at lower temperatures than do other commercially available batteries. o EXTREMELY RAPID RESPONSE. TMF batteries deliver energy much more rapidly than other commercially available batteries. o EASY TO RECYCLE. Environmental concerns have made recycling of batteries increasingly important. Unlike many existing and emerging battery technologies, TMF batteries are readily handled through the well-developed recycling process, which is currently used to recycle approximately 90 percent of the lead acid batteries in the United States. A variety of combinations of chemical and metallurgical materials can be used to form a rechargeable battery system. For example, rechargeable lead acid batteries that are used in automobiles include a negative and positive plate made of lead and lead oxide compounds and an electrolyte of sulfuric acid. A rechargeable NiCd battery incorporates a positive and negative plate made of nickel and cadmium compounds with a potassium hydroxide electrolyte. TMF batteries use the same components as traditional lead acid batteries. This provides a cost advantage over NiCd batteries because the raw materials for lead acid batteries are less expensive than those used in NiCd batteries. The primary structural innovations of our TMF batteries are an increased plate surface area within the battery, a short path through the active material between the negative and positive plates, and patented end cap connectors. As in a traditional lead acid battery, the TMF battery cell has a negative and positive plate. However, the TMF plates are unique because they are comprised of very thin lead foil substrates that are coated with a very thin, uniform layer of active material (lead oxide paste) (see Figure 1). The negative and positive plates of the TMF battery are interleaved with a fiberglass separator. In the spiral wound form factor of the TMF battery, the combination of the negative and positive plates and the fiberglass separator are wound so that the negative and positive plates are slightly offset at opposite ends of the cell. A connector is cast on to each end of the cell (see 5 6 Figure 2). We designed our patented connector to cap the ends of the spiral wound TMF battery so that it is in continuous contact with the exposed edge of both the negative and positive plates. TMF technology can be implemented in spiral wound or prismatic (or flat) batteries. While we have built prototype prismatic TMF batteries, essentially all of our development work has been on spiral wound TMF batteries.
FIGURE 1 FIGURE 2 [A picture of one of our battery cells [A picture of the connector cap appears and its component parts, including the here] positive plate, the negative plate and the separator appears here. The picture illustrates the slight offset of the negative and positive plates at opposite ends of the cell.]
The use of thin lead foil substrates significantly increases the surface area of the lead, thus lowering the impedance of the cell and greatly increasing the rate at which the cell can be charged and discharged. In addition, the use of the thin lead foil substrates in combination with the fiberglass separator provides for a short path through the active material between the negative and positive plates, allowing for more rapid delivery of the current, increasing the responsiveness of the cell. The patented end cap provides a continuous, uniform and dispersed connection between the negative and positive plates and the device being powered. TMF batteries have been made in sizes ranging from 0.5-inch diameter (0.4 Ah) cells up to approximately three-inch diameter (12 Ah) cells. OTHER BATTERY TECHNOLOGIES Rechargeable battery systems utilize a number of different electrochemistries, the most common of which include lead acid, nickel cadmium, nickel metal hydride and lithium ion. The performance characteristics of battery systems are interdependent and all battery systems involve trade-offs between various performance characteristics, such as power density and energy density. For example, battery systems that are designed to maximize energy density may not have a good power density, and vice versa. Therefore, different electrochemistries have advantages in different applications. Although there have been significant advances in the design of rechargeable batteries over recent years, the primary focus of those efforts has been to increase energy density. Increases in energy density allow longer periods of use between recharges, but do not increase the sustained power that a battery system can deliver. For example, as shown in Figure 3, lithium-ion batteries have higher energy density (i.e., can store and deliver higher amounts of energy) than other battery electrochemistries in low power applications. By contrast, our TMF technology has been designed for high power density. Increases in power density allow more high power work to be done with a battery of a given size or weight. As Figure 3 indicates, we believe TMF batteries are capable of five to six times the power delivery of any other battery system. TMF batteries have the same advantage in power delivery as lithium-ion batteries have in energy delivery. In addition, TMF batteries deliver significantly more energy than other electrochemical systems when the energy is provided at high power rates. Certain products with short duty cycles, which require very high levels of power to operate, can be made portable by utilizing TMF batteries. FIGURE 3 [CHART] [A graphic appears here plotting the power density and energy density characteristics of existing battery systems. The graphic illustrates that Lead Acid batteries have power density ranging from approximately 40-400 W/kg and an energy density of approximately 40 to 15 Wh/kg; Nickel Cadmium batteries have a power density ranging from approximately 50-900 W/kg and an energy density of approximately 40 to 1 Wh/kg; Nickel Metal Hydride batteries have power density ranging from approximately 40-800 W/kg and an energy density of approximately 45 to 20 Wh/kg; Lithium Ion batteries have power density ranging from approximately 50-1500 W/kg and an energy density of approximately 90 to 1 Wh/kg; and; our TMF batteries have power density ranging from approximately 40-6000 W/kg and an energy density of approximately 30 to 5 Wh/kg. All battery systems except TMF exhibit rapidly declining energy density with increasing power density.] 6 7 TRADITIONAL LEAD ACID. Traditional lead acid batteries have been in commercial production for over a century. Traditional lead acid batteries come in two types: flooded and valve regulated. Flooded lead acid batteries are typically used as automobile batteries or for large standby power systems. These batteries use a liquid electrolyte and must be stored and used upright. Valve regulated lead acid batteries are used in security, medical and electronics applications, and they can be used in any position. Lead acid batteries are generally the least expensive of any battery system, provide moderate energy and power density and have a nominal voltage of two volts per cell. NICKEL CADMIUM. NiCd batteries were first introduced in the 1960s and have enabled a wide range of portable products, including electronics and portable power tools. NiCd batteries cost more to produce than lead acid batteries, in part because of the high cost of nickel and cadmium. While they deliver good energy density and moderately good power density, NiCd batteries have relatively low cell voltage (1.2 volts) and lose capacity if they are repeatedly partially discharged and then recharged (this is referred to as the memory effect). In addition, there are growing environmental concerns regarding NiCd batteries, including the potential for harmful release of highly toxic cadmium. NICKEL METAL HYDRIDE. Nickel metal hydride ("NiMH") batteries, first introduced in the mid-1980s, provide significantly higher energy density than NiCd batteries. NiMH batteries are typically used in applications that require low to moderate power output and long run times, such as camcorders and laptop computers. NiMH batteries are more expensive than NiCd batteries and generally less suitable for high power applications such as power tools. LITHIUM. Both lithium ion batteries, which are now available commercially, and lithium polymer batteries, which are becoming commercially available, can provide substantially greater energy density than other available battery systems for low rate applications, such as laptop computers. Existing lithium systems, however, have low sustained power density and are generally unsuitable for applications that require high power output. In addition, they are significantly more expensive than other commercial batteries, require relatively complex monitoring and charging circuitry and raise safety issues due to the volatility of lithium metal. STRATEGIC RELATIONSHIPS We use strategic relationships from time to time as a means of accessing funding, R&D, marketing and other resources, and to develop specific markets. For example, we have a license relationship with JCI relating to the commercialization of TMF batteries. In June 1995, we established a Joint Venture with JCI to develop high-volume manufacturing technology for TMF batteries, manufacture TMF batteries for sale by both JCI and ourselves, and pursue hybrid electric vehicle battery development opportunities for TMF batteries. In 1996, having substantially completed the primary objective of developing the high-volume manufacturing technology, the Joint Venture was terminated and we entered into a new relationship with JCI. Under the new relationship, JCI and we are separately developing TMF battery-manufacturing facilities. We granted royalty-bearing licenses to JCI, certain of which are subject to minimum royalties and minimum performance criteria. These licenses give JCI the sole and exclusive worldwide right to sell TMF batteries for use as primary engine starting batteries in automobiles and trucks until July 2001. We have also entered into a cross supply agreement with JCI pursuant to which each of us has committed to supply the other with minimum quantities of TMF battery products for several years. MANUFACTURING We completed commercial qualification of our first production line for 1 Ah cells during 1998. The production line is operating 12 hours per day, seven days per week. We are currently producing an average of 30,000 to 35,000 1 Ah cells per week and intend to continuously enhance our manufacturing equipment, processes and capability. 7 8 [A flowchart of the manufacturing process for the spiral wound TMF battery is shown below.] [A flowchart appears here summarizing the manufacturing process of the Company's spiral wound TMF battery. The flowchart illustrates that lead oxide paste is applied to thin lead foil to form the positive and negative plates of the cell, the separator is placed between the plates, the plates are then wound together, the molten lead connectors are formed on each end of the cell, the cell is assembled into a plastic case and filled with electrolyte, and the cell is then formed into a 1 Ah cell.] The manufacturing process starts with the application of active material (lead oxide paste) to very thin lead foil to form the positive and negative plates of the cell. The plates, separated by a thin fiberglass separator, are wound together using a process similar to that used to wind capacitors. Each end of the wound cell is immersed in molten lead, which forms the positive and negative end connectors of the cell. The cell is assembled into a plastic case and filled with liquid electrolyte. The cell undergoes a process known as "formation," whereby a proprietary sequence of charges, discharges, and rests are used to electrochemically make the negative and positive plates functional. The completed cell is tested to verify that it meets our specifications. We use sophisticated process controls to capture multiple data points throughout the manufacturing process which we use to evaluate, control and improve the manufacturing process, to optimize and improve product performance, and to reduce product cost. In addition, we employ an extensive validation program that measures performance criteria critical to customer applications. Certain elements of the manufacturing process are proprietary, and we own the designs to certain equipment used in the process. The principal raw materials used to produce TMF batteries are lead foil and lead oxide. While these materials are available from multiple sources, the TMF manufacturing process requires levels of consistency and purity in excess of those required for many other applications. We have developed a vendor qualification and partnering program and an incoming material inspection system to evaluate the quality of raw materials. MARKETING AND SALES Currently, we are focused on maximizing sales of our SECURESTART line of instant engine starters. We intend to market SECURESTART products through automotive and marine specialty stores, catalog and specialty retailers, and major mass merchandisers. In addition, we intend that SECURESTART will be available directly from us through our e-commerce website and through television shopping networks. We are marketing SECURESTART directly and through several independent sales representatives. The majority of our fourth quarter 1999 SECURESTART shipments were to Sears, our first major customer upon the commercial launch of SECURESTART in September 1999. The loss of Sears as a customer could have a material adverse effect upon our revenues. We are developing a nationwide advertising and public relations campaign. As part of this effort, we contacted more than 50 consumer and trade publications, providing information about SECURESTART and our TMF technology. We intend to expand this effort to include television and radio advertising. It is our intention to significantly broaden the retail distribution for SECURESTART during the year 2000 to the point where this new and unique product is available to the majority of United States and Canadian consumers. It is also our intention to seek out international markets beyond the United States and Canada. RESEARCH AND DEVELOPMENT We have invested a significant amount of time and capital to develop our TMF technology and the associated manufacturing processes. In addition, through the use of sophisticated process controls, we have collected large amounts of data regarding the characteristics and performance of our TMF batteries. We have utilized this information to substantially refine our TMF battery technology and manufacturing process. Based on our experience, we believe it would take a significant amount of time, in addition to a substantial capital investment, to develop a competing battery technology. 8 9 We continue to direct our primary R&D efforts toward improving the 1 Ah cell and our manufacturing processes. In addition, we have developed and tested prototypes of various form factors, including larger and smaller spiral wound cells and very thin (1/16-inch) prismatic batteries. While we believe that each of these products may have market opportunities, there can be no assurance that any of these prototypes will result in a commercial product. PATENTS, TRADE SECRETS AND TRADEMARKS We hold eight issued United States patents that expire beginning in 2008 and ending in 2019. Our issued patents cover a number of inventions including thin non-perforated plates used in lead acid batteries and an end connector for establishing electrical continuity between thin plates and a battery terminal. We also have 21 issued foreign patents. In addition, we have 10 pending patents in the United States, as well as 13 pending foreign patents. We have registered our BOLDER, TMF, and SECURESTART trademarks on the principal federal trademark register. In addition to patent and trademark protection, we rely on the law of unfair competition and trade secrets to protect our proprietary rights. We consider several elements of the TMF manufacturing process to be trade secrets. We attempt to protect our trade secrets and other proprietary information through agreements with customers and suppliers, proprietary information agreements with employees and consultants and other security measures. Although we believe that our issued and pending patents and additional intellectual property rights provide significant protection for our proprietary designs and processes, there can be no assurance that these measures will be successful. COMPETITION Competition in the battery and instant engine starting industries is, and is expected to remain, intense. The competitors range from development stage companies to major domestic and international companies. Many of our competitors have significant financial resources, established market positions, longstanding relationships with OEMs and other customers, and significantly greater name recognition, technical, marketing, sales, manufacturing, distribution and other resources than we do. No assurance can be given that we will be able to compete successfully with those companies, including with JCI in the markets where JCI has a license from us, or with other competitors. The market for engine jumpstarting devices has traditionally been targeted at garages, tow truck operators and other professional users. Our primary competitors in this market are Prestone Products Corporation (a subsidiary of Allied Signal Corporation), Century Mfg. Co. and K&K Jump Start/Chargers, Inc. Prestone Products Corporation, Century Mfg. Co. and others are marketing portable jump starters for automotive, marine and other applications, some of which are priced materially lower than SECURESTART, and offer a variety of features. Some of these products, with a power inverter, can also power computers and other small appliances. While we believe SECURESTART is superior to these other products in several respects, including its significantly lighter weight, much faster recharging and ability to hold its charge for a substantially longer period, no assurance can be given that we will market SECURESTART successfully against the products of these other companies. In applications such as portable tools and appliances and certain electronic and medical products, our primary competitors are suppliers of NiCd batteries, including: o SANYO Energy (USA) Corporation; o Panasonic Industrial Company, a division of Matsushita Electric Corporation of America; o Energizer Power Systems, a division of Eveready Battery Company; and o SAFT America, Inc. 9 10 In applications such as car starting, standby power and certain medical and electronics applications, our primary competitors are suppliers of lead acid batteries: o Suppliers of automotive batteries include JCI (which has a license to use our TMF technology), Exide Corporation, GNB Inc. and Delphi Automotive Systems Corporation, formerly a division of General Motors Corporation; and o Suppliers of small lead acid batteries used in non-automotive applications include Yuasa Exide, Inc., Exide Corporation, Matsushita Electric Corporation of America, Hawker Energy Products, Inc., CSB Battery of America Corp. and GS Battery USA, Inc., a division of Japan Storage Battery Co., Limited. SAFETY AND ENVIRONMENTAL ISSUES Our operations involve the storage, use and disposal of a number of toxic and hazardous materials, including lead, lead oxide, sulfuric acid, solvents and adhesives. As a result, we are required to maintain our research and manufacturing operations in compliance with United States federal, state and local standards that govern the storage, use and disposal of various chemicals used in and waste materials produced by the manufacture of our TMF batteries. Our new manufacturing facility includes an enclosed area specifically for the mixing of lead oxide paste, the pasting of the lead foil and the winding of the cells. Employees operating in these areas are instructed in the use of safety equipment such as gloves, protective clothing and respirators and are required under OSHA guidelines to submit to blood monitoring tests on a periodic basis. The supervision and analysis of these tests are undertaken by an outside, independent agency and the results thereof are communicated to our employees. Our activities are also subject to federal, state and local environmental and safety laws and regulations, including but not limited to regulations issued and laws enforced by the Colorado Labor and Employment Department, the United States Department of Transportation, the United States Department of Commerce, the United States Environmental Protection Agency, the United States Department of Labor and state and county health and safety agencies. United States and foreign agencies are considering more stringent regulation of the disposal of all rechargeable batteries. There can be no assurance that we will be able to operate in conformity with such laws and regulations, or that changes in such laws or regulations will not require us to incur substantial capital or operating costs to achieve and maintain compliance. Any failure by us to adequately control the discharge of our hazardous materials and wastes could also subject us to future liabilities, which could be significant. Lead acid batteries, including our TMF battery, may develop significant internal pressures during severe overcharge conditions due to the release of gases as a byproduct of the chemical reaction occurring in the cell. In order to prevent potential pressure build up, our batteries incorporate a Bunsen pressure relief valve that, under normal overcharge conditions, will allow the venting of small amounts of gases, primarily hydrogen and oxygen. If the batteries are subjected to abusive overcharge or overdischarge conditions, larger amounts of these gases may be vented, which when mixed with air, can cause explosions. In addition, under these conditions, toxic gases and/or sulfuric acid spray may be released. Sulfuric acid can cause burns. While we maintain product liability insurance in amounts which we believe are reasonable given the associated risks, there is no assurance that such insurance will be adequate to cover any potential liability relating to one or more claims of product liability. We have tested our batteries under a variety of conditions and plans to continue to test our products for safety. HUMAN RESOURCES As of February 29, 2000, the Company had 183 full-time employees. Of the total, 15 employees were engaged in product research and development, 124 in operations, 9 in marketing and sales, and 26 in general and administrative functions. Our success will depend in a large part on our ability to attract and retain skilled and experienced employees. None of our employees are covered by a collective bargaining agreement, and we consider our relation with our employees to be satisfactory. ITEM 2. PROPERTIES The Company is located in a 127,000 square foot leased facility in Golden, Colorado (approximately 15 miles northwest of Denver) that was built-to-suit in 1997 for the Company. The Company has an eleven-year lease for the facility with two five-year renewal options. This facility includes all of the Company's offices and 10 11 laboratories as well as the Company's first high volume production line. The facility is designed to accommodate multiple high volume production lines and two development lines. ITEM 3. LEGAL PROCEEDINGS From time to time we are subject to legal proceedings arising out of our operations. In September 1999, Century Mfg. Co., a subsidiary of Pentair, Inc., filed a complaint against us in the United States District Court for the District of Minnesota. Century, which manufactures a line of portable power and jump-starting products, alleges among other things that we have misappropriated Century's trade secrets and breached a confidentiality agreement in producing and manufacturing SECURESTART. Century later filed a separate lawsuit alleging that the SECURESTART product infringes a patent issued to Century in November 1999. That suit was consolidated with the first action, and now all of Century's claims are pending in the first action. We have answered Century's complaint and asserted counterclaims for Century's misappropriation for our own trade secrets and confidential information. We believe that Century's claims are without merit, intend to defend against them vigorously, and intend to press vigorously our counterclaims. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS During the fourth quarter of 1999, there were no matters requiring a vote of security holders. 11 12 PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. MARKET INFORMATION The Company's Common Stock, par value $.001 per share, (Nasdaq Stock Market (National Market) Symbol "BOLD") began trading publicly on the Nasdaq National Market effective May 1, 1996. Prior to that date, there was no public market for the Company's Common Stock. The following table presents quarterly information on the price range of the Company's Common Stock. This information indicates the high and low sale prices reported by the Nasdaq Stock Market (National Market). 1996 HIGH LOW ---- ------ ------ Second Quarter (from May 1) .... $15.38 $10.50 Third Quarter .................. $14.38 $10.75 Fourth Quarter ................. $17.13 $13.13
1997 HIGH LOW ---- ------ ------ First Quarter .................. $17.25 $11.25 Second Quarter ................. $14.25 $11.00 Third Quarter .................. $15.50 $12.13 Fourth Quarter ................. $14.00 $ 8.50
1998 HIGH LOW ---- ------ ------ First Quarter .................. $11.75 $ 7.88 Second Quarter ................. $14.00 $ 8.50 Third Quarter .................. $14.31 $ 8.50 Fourth Quarter ................. $13.75 $ 8.13
1999 HIGH LOW ---- ------ ------ First Quarter .................. $14.50 $ 8.25 Second Quarter ................. $10.25 $ 7.25 Third Quarter .................. $11.75 $ 6.88 Fourth Quarter ................. $13.63 $ 9.00
HOLDERS As of February 29, 2000, there were approximately 289 holders of record of the Common Stock. DIVIDENDS The Company has not paid any dividends on its Common Stock since its inception and does not intend to pay any dividends on its Common Stock in the foreseeable future. 12 13 ITEM 6. SELECTED FINANCIAL DATA The selected financial data set forth below with respect to the Company's statements of operations for the years ended December 31, 1999, 1998, 1997, 1996 and 1995, and balance sheets as of December 31, 1999, 1998, 1997, 1996 and 1995 are derived from audited financial statements of the Company. Such financial statements were audited by Arthur Andersen LLP, independent public accountants, whose report with respect to the years ended December 31, 1999, 1998 and 1997 and as of December 31, 1999 and 1998 appears elsewhere herein. The data set forth below should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the Financial Statements and the Notes related thereto included elsewhere in this document.
YEARS ENDED DECEMBER 31, ------------------------------------------------------------------------------ 1999 1998 1997 1996 1995 ------------ ------------ ------------ ------------ ------------ STATEMENTS OF OPERATIONS DATA: Revenues Product sales ............................... $ 1,859,992 $ 49,264 $ 84,716 $ 35,580 $ 39,006 Research and development services ........... 169,324 2,410,605 2,466,377 440,324 66,667 ------------ ------------ ------------ ------------ ------------ Total revenues ........................ 2,029,316 2,459,869 2,551,093 475,904 105,673 Cost of revenues 5,566,697 332,919 707,606 171,486 49,647 ------------ ------------ ------------ ------------ ------------ (3,537,381) 2,126,950 1,843,487 304,418 56,026 ------------ ------------ ------------ ------------ ------------ Operating expenses: Research and development ....................... 6,553,973 7,677,787 7,092,534 2,863,552 2,479,428 General and administrative ..................... 5,268,822 3,286,783 3,348,061 2,132,565 808,724 Selling and marketing .......................... 2,845,277 665,573 357,716 212,960 163,771 Loss on asset disposals ........................ 1,408,814 -- -- -- -- ------------ ------------ ------------ ------------ ------------ Total operating expenses ................. 16,076,886 11,630,143 10,798,311 5,209,077 3,451,923 ------------ ------------ ------------ ------------ ------------ Loss from operations ............................. (19,614,267) (9,503,193) (8,954,824) (4,904,659) (3,395,897) Other income (expense): Interest income ................................ 542,192 905,735 839,025 798,846 126,546 Interest expense ............................... (1,307,317) (1,346,511) (633,625) (54,277) (72,633) ------------ ------------ ------------ ------------ ------------ Net loss ......................................... (20,379,392) (9,943,969) (8,749,424) (4,160,090) (3,341,984) ------------ ------------ ------------ ------------ ------------ Dividend on preferred stock .................... (1,487,700) (1,512,900) (352,320) -- -- Accretion of preferred stock offering costs .... (215,076) (214,217) (50,000) -- -- ------------ ------------ ------------ ------------ ------------ Net loss allocable to common stockholders ........ $(22,082,168) $ (11,671,086) $ (9,151,744) $ (4,160,090) $ (3,341,984) ============ ============ ============ ============ ============ Basic and diluted net loss per share (1) ......... $ (1.97) $ (1.22) $ (0.97) $ (0.64) $ (3.07) ============ ============ ============ ============ ============ Shares used in computing basic and diluted net loss per share (1) ............... 11,221,354 9,560,660 9,446,930 6,465,281 1,087,554 ============ ============ ============ ============ ============ Unaudited, pro forma basic net loss per share .... $ (0.49) ============ Shares used in computing unaudited, pro forma basic net loss per share ............ 8,437,817 ============
13 14
DECEMBER 31, ------------------------------------------------------------------------ 1999 1998 1997 1996 1995 ------------ ------------ ------------ ------------ ------------ BALANCE SHEET DATA: Cash, cash equivalents and available-for-sale securities .............. $ 22,630,223 $ 11,119,734 $ 20,394,777 $ 16,070,677 $ 2,799,697 Working capital .............................. 19,809,297 8,060,606 15,016,605 12,403,356 2,532,911 Total assets.................................. 48,113,877 32,591,747 41,275,589 27,146,116 4,748,347 Notes and capital leases payable ............. 8,858,831 10,381,045 6,404,903 486,537 558,687 Mandatorily Redeemable Preferred stock(2) .... -- -- -- -- 13,433,482 Convertible, Redeemable Preferred stock ..... 15,653,939 15,998,863 16,205,046 -- -- Total stockholders' equity (deficit) ......... 34,814,718 20,388,338 30,286,815 23,070,901 (9,538,565)
(1) See Note 2 of Notes to Financial Statements for information concerning the computation of basic net loss per share. (2) Each share of the Company's Mandatorily Redeemable Preferred Stock automatically converted into one share of the Common Stock on May 6, 1996 upon the closing of the Company's initial public offering. 14 15 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Except for the historical information contained herein, this report may contain forward-looking statements that involve risks and uncertainties, including manufacturing risks associated with implementing new process technology, achieving commercial-scale manufacturing levels, achieving consistent yields and quality, uncertainty of market acceptance and the timing of market acceptance, as well as other risks detailed from time to time in our filings with the Securities and Exchange Commission, including our registration statement on Form S-3 filed on August 31, 1999 and the prospectus supplement filed November 8, 1999. These risks (i) have materially and adversely affected, and may in the future materially and adversely affect, our results and (ii) have caused and may in the future cause such results to differ materially from those expressed in any forward-looking statements made by us . GENERAL From our inception in March 1991 until the launch of our first commercial product in the second half of 1999, we were a development stage company, principally engaged in the research and development of our TMF battery technology, to which we devoted significant resources. In May 1997, we moved to a new 127,000 square foot leased manufacturing facility and corporate headquarters in Golden, Colorado. We believe this facility will accommodate multiple production lines, two research and development ("R&D") lines, and all of our other operations. In the third quarter of 1997, we installed our first high-volume manufacturing line, designed to annually produce approximately four million 1 Ah cells. For approximately the next year, we focused most of our resources on qualifying the line for commercial production. In the fourth quarter of 1998, we qualified our production line and introduced our 1 Ah cell, which can be a modular building block for various battery packs. Upon qualifying the production line and introducing our 1 Ah cell, our focus shifted to the design, manufacture and introduction of products based on our TMF technology. On August 5, 1999, we introduced SECURESTART, an instant engine starter which employs our TMF technology and, specifically, the 1 Ah cell. In August 1999, we entered into an agreement with Sears to supply SECURESTART to approximately 2,000 Sears stores. We began commercial shipments of SECURESTART in October 1999 and shipped over 28,000 units in the fourth quarter 1999, with the majority going to Sears. SECURESTART is currently available in Sears stores and Orchard Supply Hardware stores, as well as through a variety of catalogs, including SkyMall, Herringtons, West Marine and Sears. We believe that the majority of our near-term revenues will be generated from sales of SecureStart. Our fourth quarter shipments to Sears included stocking orders in anticipation of the holiday gift-giving period and the winter driving season. In addition, we purposely delayed adding other major retailers to be assured of meeting our product obligations to Sears. For both of these reasons, we expect lower first quarter 2000 revenues than in the fourth quarter 1999 period. Beyond the first quarter 2000, we expect increasing sales from the addition of new retailers to the SECURESTART distribution base and from the introduction of the marine version of SECURESTART in the second quarter of 2000. We are working with potential OEM customers who are testing and evaluating our TMF batteries for potential design into their products. We believe that the task of improving the yield of our first production line, the efficiency of the overall manufacturing process and the performance of our TMF products will be an ongoing activity. Additional modifications will be required from time to time to improve the production capability of our production line. Similarly, changes in the design of our products will be required from time to time in order to improve product performance. In June 1995, we established a joint venture with JCI (the "Joint Venture") to develop high-volume manufacturing technology for TMF batteries, manufacture TMF batteries for sale by both JCI and ourselves, and pursue hybrid electric vehicle battery development opportunities for TMF batteries. In 1996, having substantially completed the primary objective of developing the high-volume manufacturing technology, the Joint Venture was 15 16 terminated and we entered into a new relationship with JCI. Under the new relationship, JCI and we are separately developing TMF battery-manufacturing facilities. We granted royalty-bearing licenses to JCI, certain of which are subject to minimum royalties and minimum performance criteria. These licenses give JCI the sole and exclusive right to sell TMF batteries for use as primary starting batteries in automobiles and trucks until July 2001. We have also entered into a cross supply agreement with JCI pursuant to which each of us has committed to supply the other with minimum quantities of TMF battery products for several years. RESULTS OF OPERATIONS Year Ended December 31, 1999 Compared to Year Ended December 31, 1998 As the company transitioned in the second half of 1999 from primarily development activities to manufacturing and sales activities, the classification of certain costs have changed in the Company's statement of operations. For example, activities which were previously performed prior to the third quarter 1999 in support of the Company's research and development ("R&D") efforts (and therefore classified as R&D expense), now support the Company's manufacturing efforts and are classified as cost of revenues. Additionally, because the Company's production volume of batteries and other products is not yet sufficient to allow absorption of the manufacturing overhead, the Company has incurred a loss on gross margin, which can be expected to continue until production volumes are at significantly higher levels. Revenues from product sales increased to $1,860,000 in 1999 from $49,000 in 1998. Most of the 1999 revenues consisted of sales of our new jumpstart product, SECURESTART, which was launched during the fourth quarter. R&D revenues declined to $169,000 in 1999 from $2,411,000 in 1998. The 1998 period included $1,760,000 of R&D revenues recognized for services provided in connection with our technology transfer arrangement with JCI, which was completed at the end of 1998. R&D revenues from a customer-funded product development program decreased to $29,000 in 1999 from $367,000 in 1998. This program was completed in the first quarter 1999. We consider R&D revenues as insignificant to the future of our business. Cost of revenues increased to $5,567,000 in 1999 from $333,000 in 1998. The increase in 1999 resulted from the ramp-up of 1 Ah cell production in the second half of 1999 to support the launch of SECURESTART, which contains six 1 Ah cells. Associated with the manufacturing ramp-up, certain start-up manufacturing costs were incurred that were attributable to inefficiencies from training an additional production shift and from associated higher yield losses than would be expected in the future. In addition, our initial production levels do not allow full absorption of fixed manufacturing overhead expenses. Unit product costs are expected to decrease as we increase production levels and realize added economies of scale during 2000. R&D expenses decreased to $6,554,000 in 1999 from $7,678,000 in 1998. The decrease was due to the change in classification of certain production line functions and associated expenses from R&D expenses to cost of revenues in the second half of 1999. Of the $7,678,000 of R&D expenses in 1998, only $5,457,000 would have been treated as R&D expenses were they incurred in 1999. The increase in R&D expenses in 1999, compared to the expenses in 1998 that would have been treated as R&D expenses were they incurred in 1999, was primarily due to additional technical staff and product development expenses associated with our new jumpstart product. General and administrative expenses increased to $5,269,000 in 1999 from $3,287,000 in 1998. The increase in 1999 resulted primarily from funding start-up vendor costs for components needed in the assembly and launch of SECURESTART, from higher legal fees and business insurance costs, and from increased staffing and related compensation expenses. Selling and marketing expenses increased to $2,845,000 in 1999 from $666,000 in 1998. The increase in 1999 was primarily due to increased staffing levels, business development activities and advertising and promotional expenses associated with the commercial introduction of SECURESTART. In the fourth quarter 1999, we recorded a non-cash write-off of $1,409,000 to remove obsolete equipment no longer usable in our manufacturing process. This equipment became obsolete due to changes made in the manufacturing process during the fourth quarter of 1999. 16 17 Interest income decreased to $542,000 in 1999 from $906,000 in 1998. The decrease was due to smaller average invested cash balances in 1999 than in 1998. Interest expense decreased slightly to $1,307,000 in 1999 from $1,347,000 in 1998. The decrease in 1999 was due to slightly lower average debt balances in 1999 than in 1998. Year Ended December 31, 1998 Compared to Year Ended December 31, 1997 Total revenues decreased to $2,459,869 in 1998 from $2,551,093 in 1997. As in previous reporting periods, the majority of revenues resulted from R&D services. Revenues from product sales decreased to $49,264 in 1998 from $84,716 in 1997. Approximately 73 and 71 percent of the $2,410,605 and $2,466,377 of R&D revenues in 1998 and 1997, respectively, resulted from our recognition of revenue from services performed in connection with the technology transfer arrangement with JCI. The remainder of the R&D revenues in 1998 and 1997 resulted from customer-funded research and development programs. The R&D revenues associated with the JCI agreement were non-cash items in 1998. The technology transfer agreement with JCI was completed in 1998, and no additional R&D revenues were recognized beyond 1998 from this agreement. Cost of revenues decreased to $332,919 in 1998 from $707,606 in 1997. Most of the decrease in 1998 was due to lower levels of customer funded product development programs compared to 1997. R&D expenses increased to $7,678,000 in 1998 from $7,092,534 in 1997. The increase in 1998 was primarily due to additional technical staff and associated expenses and new manufacturing facility and production line expenses related to our expanded efforts to commercialize our 1 Ah cell and to implement high-volume manufacturing. General and administrative expenses decreased to $3,287,000 in 1998 compared to $3,348,061 in 1997. The small decrease in 1998 reflected slightly lower expenses for legal, recruiting and relocation than in the prior year. Selling and marketing expenses increased to $666,000 in 1998 compared to $357,716 in 1997. The increases in 1998 were primarily due to increased staffing levels and small amounts of advertising expenses associated with the commercial introduction of our products. Interest income increased to $905,735 in 1998 from $839,025 in 1997. This increase was due to larger invested cash balances in 1998, primarily resulting from our private placement of Series A Preferred Stock in October 1997 and proceeds from debt financing in March 1998. Interest expense increased to $1,346,511 in 1998, compared to $633,625 in 1997. The increases in 1998 were due to increased levels of debt financing. Year Ended December 31, 1997 Compared to Year Ended December 31, 1996. During 1997, we received revenues from services provided under a technology transfer agreement with JCI, from a Small Business Innovation Research ("SBIR") research and development agreement, from a customer-funded development program and from the sale of batteries for testing and evaluation by customers. R&D revenues increased to $2,466,377 in 1997 from $440,324 in 1996. Approximately 71 percent of the 1997 R&D revenues resulted from the technology transfer agreement with JCI, which did not exist in 1996. The remaining 29 percent of the R&D revenues in 1997 and all of the 1996 R&D revenues resulted from a combination of both private customer-funded and the SBIR product development programs. Product sales revenues increased to $84,716 in 1997 from $35,580 in 1996. Cost of revenues increased to $707,606 in 1997 from $171,486 in 1996. The increase was a result of higher costs directly related to commercial and government funded product development programs. 17 18 R&D expenses increased to $7,092,534 in 1997 from $2,863,552 in 1996, primarily due to additional technical staff and associated expenses and new manufacturing facility expenses related to our increased efforts to commercialize our 1 Ah cell and to implement high-volume manufacturing. General and administrative expenses increased to $3,348,061 in 1997 from $2,132,565 in 1996. The increase was due to additional administrative staffing and added expenses for insurance, legal and investor relations. Also, included in the 1997 expenses were $210,000 of costs (printing, legal and accounting) associated with a registration statement that was filed in February 1997 and withdrawn in May 1997. Selling and marketing expenses increased to $357,716 in 1997 from $212,960 in 1996. The increase was primarily due to increased marketing and business development activities related to our efforts to obtain new customers for future delivery of product. Interest income increased to $839,025 in 1997 from $798,846 in 1996. The increase resulted primarily from slightly higher average cash balances invested during 1997 than in 1996. Interest expense increased to $633,625 in 1997 from $54,277 in 1996. The increase resulted primarily from increased levels of lease and debt financing in 1997. LIQUIDITY AND CAPITAL RESOURCES From our inception, we have financed our operations and met our capital requirements primarily through private and public offerings of our equity securities, raising net proceeds of approximately $86 million from sales of these securities. Included in this amount are net proceeds of approximately $21.1 million received from a secondary public offering of equity securities on November 11, 1999, and the exercise of the underwriter's overallotment option in December 1999. Also, included in this amount are net proceeds of approximately $12.7 million received from private offerings of equity securities on May 18, 1999 and July 9, 1999. In 1997 and 1998, we received net proceeds of approximately $12.3 million from a loan agreement with Transamerica Business Credit Corporation ("TBCC"). The remaining loan balance was approximately $8.9 million as of December 31, 1999. At December 31, 1999, our balances of cash, cash equivalents, and available-for-sale securities totaled approximately $22.6 million, compared to approximately $11.1 million at December 31, 1998. We believe that our cash, cash equivalents and short-term investments at December 31, 1999 will be sufficient to fund our operations through at least December 31, 2000. Beyond 2000, we will require substantial capital resources in the future in order to increase our production capacity and to fund our operations until we achieve profitability. We have no additional availability under the TBCC loan agreement or other capital resources. Our inability to obtain required capital resources when needed would have a material adverse effect on our business, results of operations and financial condition. INCOME TAXES We have not paid income taxes since our inception. As of December 31, 1999, we had net operating loss ("NOL") carry-forwards totaling approximately $51.9 million available to reduce any future taxable income. Our private placement of Series A Convertible, Redeemable Preferred Stock in October 1997 and the Secondary Common Stock Offering in November 1999 resulted in a change of ownership under the Tax Reform Act of 1986, which would limit the annual utilization of NOL carry-forwards. As a result, we are limited to using approximately $7.0 million of NOL carry-forwards in each future year. Our NOL carry-forwards expire from 2005 through 2014. YEAR 2000 We rely on software in our information systems and manufacturing equipment, most of which was installed and written within the past three years. Prior to December 31, 1999, we completed an inventory of our critical control systems, computers and application software, and validated our internal systems for Year 2000 compliance. The validation of our internal systems was implemented through a combination of written vendor confirmations and specific validation testing. In connection with our validation process, we either found our equipment and software to be Year 2000 compliant, applied applicable supplier fixes and, in some instances, replaced equipment. In 18 19 addition, we implemented processes to identify and evaluate the Year 2000 status of newly acquired equipment and to evaluate supplier and customer Year 2000 compliance. The cost of testing and validation did not exceed $50,000, including consulting and internal resources. Thus far, we have had no significant problems related to Year 2000 issues. However, we cannot guarantee that the Year 2000 problem will not adversely affect our business, operating results or financial condition at some point in the future. We believe that the remaining risks of Year 2000 issues are primarily external, due to the difficulty of validating key third parties' readiness for Year 2000 issues. We have sought confirmation of such compliance and seek relationships with third parties that are compliant. However, even if we obtain Year 2000 compliance assurances from third parties, there is still a risk that a major supplier of raw materials or an OEM customer could become unreliable due to Year 2000 problems. Therefore, we intend to maintain contingency plans for each of these key relationships as they arise, such as second sourcing, purchasing additional inventory and creating contingency plans for Year 2000 situations with each relationship. 19 20 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable, because the Company has only fixed rate debt and no derivatives. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The financial statements and supplementary data of the Company are provided at the pages indicated in Item 14(a). ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE There has not been any change of accountants or any disagreements with the Company's accountants on any matter of accounting practice or financial disclosure during the reporting periods. 20 21 PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Information with respect to executive officers and directors of the Company appearing in the Proxy Statement under the captions "Election of Class I Directors," "Executive Officers and Key Employees" and "Section 16(a) Beneficial Ownership Reporting Compliance" is incorporated herein by reference. ITEM 11. EXECUTIVE COMPENSATION Information with respect to executive compensation appearing in the Proxy Statement under the caption "Executive Compensation" is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The information required by this item is incorporated herein by reference to the information in the Proxy Statement labeled "Security Ownership of Certain Beneficial Owners and Management." ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The information required by this item is incorporated herein by reference to the section in the Proxy Statement labeled "Certain Transactions." 21 22 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K a) FINANCIAL STATEMENTS The financial statements required by this item are submitted in a separate section beginning on Page F-1 of this report. FINANCIAL STATEMENTS OF BOLDER TECHNOLOGIES CORPORATION Report of Independent Public Accountants........................................................ F-1 Balance Sheets as of December 31, 1999 and 1998................................................. F-2 Statements of Operations for the three years ended December 31, 1999, 1998, and 1997...................................................................... F-4 Statements of Stockholders' Equity (Deficit) for the three years ended December 31, 1999............................................................................. F-5 Statements of Cash Flows for the three years ended December 31, 1999, 1998 and 1997........................................................................... F-9 Notes to Financial Statements.................................................................. F-11
b) REPORTS ON FORM 8-K During the last quarter of its fiscal year ended December 31, 1999, the Company filed two Reports on Form 8-K, dated October 14, 1999 and November 10, 1999, pursuant to Item 5 of such Form. c) EXHIBITS
EXHIBIT NUMBER DESCRIPTION -------------- ----------- 3(i).1* Amended and Restated Certificate of Incorporation of the Company. 3(i).2** Certificate of Designation of the Series A Preferred Stock of the Company. 3(i).3** Amendment to the Certificate of Designation of the Series A Preferred Stock of the Company. 3(i).4*** Certificate of Designation of the Series B Junior Participating Preferred Stock of the Company. 3(ii).1* Amended and Restated Bylaws of the Company. 3(ii).2** Amendment to the Amended and Restated Bylaws of the Company. 4.1 Reference is made to Exhibits 3(i).1 through 3(ii).2. 4.2* Specimen stock certificate representing shares of Common Stock of the Company. 4.3** Specimen stock certificate representing shares of Series A Preferred Stock of the Company. 4.4*** Rights Agreement between the Company and American Stock Transfer & Trust Company, dated January 23, 1998. 4.5*** Form of Rights Certificate. 10.1*+ Form of Indemnity Agreement between the Company and each of its directors and executive officers. 10.2 1996 Equity Incentive Plan of the Company, as amended through March 26, 1999 (previously filed as an exhibit to the Company's Registration Statement on Form S-8 (Registration No. 333-08968) and incorporated herein by reference). 10.3* 1996 Employee Stock Purchase Plan of the Company, as amended through March 26, 1999. 10.4*+ Employment Agreement between the Company and Daniel S. Lankford, dated July 11, 1994. 10.5*+ Employment Agreement between the Company and Joseph F. Fojtasek, dated February 13, 1996.
22 23 10.6+ Employment Agreement between the Company and Arthur S. Homa, dated September 25, 1997 (previously filed as an exhibit to the Company's Form 10-K for the year ended December 31, 1997 and incorporated herein by reference). 10.7+ Employment Agreement between the Company and Daniel A. Schwob, dated September 16, 1998 (previously filed as an exhibit to the Company's Form 10-K for the year ended December 31, 1998 and incorporated herein by reference). 10.8+ Employment Agreement between the Company and Roger Warren, dated as of September 17, 1999. 10.9+ Nonstatutory Stock Option Agreement between the Company and Roger Warren, dated October 1, 1999. 10.10+ Nonstatutory Stock Option Agreement between the Company and Roger Warren, dated October 1, 1999. 10.11+ Nonstatutory Stock Option Agreement between the Company and Roger Warren, dated October 1, 1999. 10.12+ Nonstatutory Stock Option Agreement between the Company and Roger Warren, dated October 1, 1999. 10.13+ Incentive Stock Option Agreement between the Company and Roger Warren, dated October 1, 1999. 10.14* Series C Preferred Stock Purchase Agreement between the Company and the purchasers named therein, dated July 19, 1994. 10.15* Supplemental Agreement to Series C Preferred Stock Purchase Agreement between the Company and the purchasers named therein, dated September 30, 1994. 10.16* First Amendment to Purchase Agreement among the Company, the stockholders of the Company named therein and Phoenix Leasing Incorporated, dated July 29, 1994. 10.17* Amendment to Purchase Agreement among the Company, the stockholders of the Company named therein and Phoenix Leasing Incorporated, dated March 21, 1996. 10.18* Note and Warrant Purchase Agreement between the Company and the purchasers named therein, dated March 14, 1995. 10.19* Preferred Stock and Warrant Purchase Agreement between the Company and the purchasers named therein, dated May 24, 1995. 10.20* Letter Agreement among the Company, Harold Scott and the stockholders of the Company named therein, dated January 18, 1996. 10.21* Series E Preferred Stock and Warrant Purchase Agreement among the Company, Johnson Controls Battery Group, Inc. and the stockholders of the Company named therein, dated June 26, 1995. 10.22** Purchase Agreement between the Company and BT Alex. Brown Incorporated, dated October 3, 1997. 10.23** Registration Rights Agreement between the Company and BT Alex. Brown Incorporated, dated October 8, 1997. 10.24* Senior Loan and Security Agreement between the Company and Phoenix Leasing Incorporated, dated July 29, 1994, including forms of Promissory Notes and Warrants to Purchase Shares of Series C Preferred Stock issued thereunder. 10.25 Security Agreement between the Company and Transamerica Business Credit Corporation, dated March 4, 1997, including form of Promissory Notes issued thereunder (previously filed as an exhibit to the Company's Form 10-KSB for the year ended December 31, 1996 and incorporated herein by reference). 10.26* Agreement between the Company and Wright Industries, Inc., dated March 11, 1996. 10.27 Agreement among the Company, Johnson Controls Battery Group, Inc. and Johnson Controls/Bolder LLC, dated July 31, 1996 (previously filed as an exhibit to the Company's February 5, 1997 Form 8-K and incorporated herein by reference). 10.28 Cross Supply Agreement between the Company and Johnson Controls Battery Group, Inc., dated January 22, 1997 (previously filed as an exhibit to the Company's February 5, 1997 Form 8-K and incorporated herein by reference). 10.29 Common Stock Purchase Agreement, dated May 14, 1999, between the Company and certain stockholders (previously filed as an exhibit to the Company's July 12, 1999 Registration Statement of Form S-3 and incorporated herein by reference). 10.30 Common Stock Purchase Agreement, dated May 18, 1999, between the Company and certain stockholders (previously filed as an exhibit to the Company's July 12, 1999 Registration Statement of Form S-3 and incorporated herein by reference). 10.31 Common Stock Purchase Agreement, dated July 9, 1999, between the Company and certain stockholders (previously filed as an exhibit to the Company's July 12, 1999 Registration Statement of Form S-3 and incorporated herein by reference).
23 24 10.32 Registration Rights Agreement, dated May 14, 1999, between the Company and certain stockholders (previously filed as an exhibit to the Company's July 12, 1999 Registration Statement of Form S-3 and incorporated herein by reference). 10.33 Registration Rights Agreement, dated May 18, 1999, between the Company and certain stockholders (previously filed as an exhibit to the Company's July 12, 1999 Registration Statement of Form S-3 and incorporated herein by reference). 10.34 Registration Rights Agreement, dated July 9, 1999, between the Company and certain stockholders (previously filed as an exhibit to the Company's July 12, 1999 Registration Statement of Form S-3 and incorporated herein by reference). 10.35 Warrant Agreement between the Company and First Security Van Kasper Inc. dated November 8, 1999 (previously filed as an exhibit to the Company's November 10, 1999 Form 8-K and incorporated herein by reference). 10.36 Warrant issued by the Company to First Security Van Kasper Inc. (previously filed as an exhibit to the Company's November 10, 1999 Form 8-K and incorporated herein by reference). 10.37 Underwriting Agreement between the Company and First Security Van Kasper Inc. (previously filed as an exhibit to the Company's November 10, 1999 Form 8-K and incorporated herein by reference). 23.1 Consent of Arthur Andersen LLP, independent auditors. 27.1 Financial Data Schedule.
- ----------------- * Previously filed as an exhibit to the Company's Registration Statement on Form SB-2 (Registration No. 333-2500-D) and incorporated herein by reference. ** Previously filed as an exhibit to the Company's Registration Statement on Form S-3 (Registration No. 333-41625) and incorporated herein by reference. *** Previously filed as an exhibit to the Company's January 23, 1998 Form 8-K and incorporated herein by reference. + Management contract or compensatory plan or arrangement. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. BOLDER TECHNOLOGIES CORPORATION Date: March 29, 2000 By: /s/ ROGER F. WARREN ----------------------------- Roger F. Warren Chief Executive Officer, President and Chairman of the Board Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE /s/ ROGER F. WARREN Chief Executive Officer, March 29, 2000 - ------------------- President and Chairman of (Roger F. Warren) the Board (Principal Executive Officer) /s/ JOSEPH F. FOJTASEK Chief Financial Officer, Vice March 29, 2000 - ---------------------- President of Finance and (Joseph F. Fojtasek) Administration, Treasurer, and Secretary (Principal Financial and Accounting Officer)
24 25 /s/ DANIEL S. LANKFORD Director March 29, 2000 - ---------------------- (Daniel S. Lankford) /s/ WILMER R. BOTTOMS Director March 29, 2000 - ---------------------- (Wilmer R. Bottoms) /s/ WILLIAM D. CONNOR Director March 29, 2000 - ---------------------- (William D. Connor) /s/ DONOVAN B. HICKS Director March 29, 2000 - ---------------------- (Donovan B. Hicks) /s/ DAVID L. RIEGEL Director March 29, 2000 - ---------------------- (David L. Riegel) /s/ CARL S. STUTTS Director March 29, 2000 - ---------------------- (Carl S. Stutts)
25 26 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To BOLDER Technologies Corporation: We have audited the accompanying balance sheets of BOLDER Technologies Corporation (a Delaware corporation) as of December 31, 1999 and 1998, and the related statements of operations, stockholders' equity and cash flows for each year in the three-year period ended December 31, 1999. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of BOLDER Technologies Corporation as of December 31, 1999 and 1998, and the results of its operations and its cash flows for each year in the three-year period ended December 31, 1999, in conformity with accounting principles generally accepted in the United States. /S/ ARTHUR ANDERSEN LLP ARTHUR ANDERSEN LLP Denver, Colorado, February 17, 2000. F-1 27 BOLDER TECHNOLOGIES CORPORATION BALANCE SHEETS December 31, 1999 and 1998 ASSETS
1999 1998 -------------- -------------- CURRENT ASSETS: Cash and cash equivalents $ 17,651,373 $ 962,453 Available-for-sale securities 4,978,850 10,157,281 Trade accounts receivable, net 1,833,261 46,151 Inventory, net 1,656,539 129,887 Prepaid expenses 251,710 109,040 -------------- -------------- Total current assets 26,371,733 11,404,812 -------------- -------------- PROPERTY AND EQUIPMENT, at cost: Furniture, fixtures and equipment 17,014,890 16,916,057 Leasehold improvements 5,335,354 5,303,058 Construction in progress 2,308,634 908,840 -------------- -------------- 24,658,878 23,127,955 Less- Accumulated depreciation and amortization (3,496,275) (2,312,955) -------------- -------------- Property and equipment, net 21,162,603 20,815,000 PATENTS, net of accumulated amortization of $109,768 and $61,041 in 1999 and 1998, respectively 523,345 335,113 OTHER ASSETS 56,196 36,822 -------------- -------------- Total assets $ 48,113,877 $ 32,591,747 ============== ==============
The accompanying notes to financial statements are an integral part of these balance sheets. F-2 28 BOLDER TECHNOLOGIES CORPORATION BALANCE SHEETS December 31, 1999 and 1998 LIABILITIES AND STOCKHOLDERS' EQUITY
1999 1998 -------------- -------------- CURRENT LIABILITIES: Accounts payable $ 1,468,618 $ 384,256 Accrued compensation and other accrued liabilities (Note 8) 2,936,710 1,403,108 Deferred revenue (Note 5) 35,000 35,000 Current portion of notes payable (Note 6) 2,122,108 1,521,842 -------------- -------------- Total current liabilities 6,562,436 3,344,206 -------------- -------------- LONG-TERM LIABILITIES: Notes payable (Note 6) 6,736,723 8,859,203 -------------- -------------- Total long-term liabilities 6,736,723 8,859,203 -------------- -------------- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY: Convertible, redeemable preferred stock, $0.001 par value, 5,000,000 shares authorized; 325,000 and 336,200 issued and outstanding at December 31, 1999 and 1998, with a liquidation and redemption value of $16,250,000 and $16,810,000, respectively 15,653,939 15,998,863 Common stock, $0.001 par value, 25,000,000 shares authorized; 14,577,826 and 9,713,376 issued at December 31, 1999 and 1998, respectively 14,578 9,713 Treasury stock, $0.001 par common stock, 33,333 shares at December 31, 1999 and 1998 (50,000) (50,000) Deferred compensation (1,069,887) -- Additional paid-in capital 72,989,247 36,773,529 Accumulated deficit (52,723,159) (32,343,767) -------------- -------------- Total stockholders' equity 34,814,718 20,388,338 -------------- -------------- Total liabilities and stockholders' equity $ 48,113,877 $ 32,591,747 ============== ==============
The accompanying notes to financial statements are an integral part of these balance sheets. F-3 29 BOLDER TECHNOLOGIES CORPORATION STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, -------------------------------------------------- 1999 1998 1997 -------------- -------------- -------------- REVENUES (Note 10): Net product sales $ 1,859,992 $ 49,264 $ 84,716 Research and development services and royalties 169,324 2,410,605 2,466,377 -------------- -------------- -------------- Total revenues 2,029,316 2,459,869 2,551,093 -------------- -------------- -------------- COST OF REVENUES 5,566,697 332,919 707,606 -------------- -------------- -------------- (3,537,381) 2,126,950 1,843,487 -------------- -------------- -------------- OPERATING EXPENSES: Research and development 6,553,973 7,677,787 7,092,534 General and administrative 5,268,822 3,286,783 3,348,061 Selling and marketing 2,845,277 665,573 357,716 Loss on asset disposals 1,408,814 -- -- -------------- -------------- -------------- Total operating expenses 16,076,886 11,630,143 10,798,311 -------------- -------------- -------------- LOSS FROM OPERATIONS (19,614,267) (9,503,193) (8,954,824) OTHER INCOME (EXPENSE): Interest income 542,192 905,735 839,025 Interest expense (1,307,317) (1,346,511) (633,625) -------------- -------------- -------------- NET LOSS (20,379,392) (9,943,969) (8,749,424) -------------- -------------- -------------- Dividend on preferred stock (1,487,700) (1,512,900) (352,320) Accretion of preferred stock offering costs (215,076) (214,217) (50,000) -------------- -------------- -------------- NET LOSS ALLOCABLE TO COMMON STOCKHOLDERS $ (22,082,168) $ (11,671,086) $ (9,151,744) ============== ============== ============== Basic and diluted net loss per share (Note 2) $ (1.97) $ (1.22) $ (0.97) ============== ============== ============== Shares used in computing basic and diluted net loss per share (Note 2) 11,221,354 9,560,660 9,446,930 ============== ============== ==============
The accompanying notes to financial statements are an integral part of these statements. F-4 30 BOLDER TECHNOLOGIES CORPORATION STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
REDEEMABLE CONVERTIBLE PREFERRED STOCK COMMON STOCK OPTIONS AND WARRANTS --------------------- -------------------- -------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT --------- ----------- --------- -------- ------- ------ BALANCES, December 31, 1996 -- $ -- 9,447,622 $ 9,448 19,125 $ -- Issuance of common stock under the Employee Stock Purchase Plan ($8.93 - $11.90 per share) -- -- 15,375 15 -- -- Issuance of common stock to employees for options exercised ($0.09 - $6.00 per share) -- -- 35,443 35 -- -- Issuance of Series A Convertible, Redeemable Preferred Stock as part of a Private Placement, net of offering costs of $1,007,274 in October 336,200 15,802,726 -- -- -- -- Issuance of warrants to purchase 30,641 shares of common stock exercisable at $14.50 per share for five years, in connection with the issuance of the Series A Convertible, Redeemable Preferred Stock -- -- -- -- 30,641 -- Accretion of preferred stock offering costs -- 50,000 -- -- -- -- Accrual of Series A Preferred Stock dividend -- 352,320 -- -- -- -- Net loss -- -- -- -- -- -- ------- ----------- --------- ------- ------ ------ BALANCES, December 31, 1997 336,200 $16,205,046 9,498,440 $ 9,498 49,766 $ -- ======= =========== ========= ======= ====== ======
ADDITIONAL TREASURY STOCK PAID-IN DEFERRED ------------------- ACCUMULATED CAPITAL COMPENSATION SHARES AMOUNT DEFICIT ------------ ------------ -------- -------- ------------ BALANCES, December 31, 1996 $ 36,761,827 $ -- (33,333) $(50,000) $(13,650,374) Issuance of common stock under the Employee Stock Purchase Plan ($8.93 - $11.90 per share) 152,985 -- -- -- -- Issuance of common stock to employees for options exercised ($0.09 - $6.00 per share) 9,577 -- -- -- -- Issuance of Series A Convertible, Redeemable Preferred Stock as part of a Private Placement, net of offering costs of $1,007,274 in October -- -- -- -- -- Issuance of warrants to purchase 30,641 shares of common stock exercisable at $14.50 per share for five years, in connection with the issuance of the Series A Convertible, Redeemable Preferred Stock -- -- -- -- -- Accretion of preferred stock offering costs (50,000) -- -- -- -- Accrual of Series A Preferred Stock dividend (352,320) -- -- -- -- Net loss -- -- -- -- (8,749,424) ------------ ------ -------- -------- ------------ BALANCES, December 31, 1997 $ 36,522,069 $ -- (33,333) $(50,000) $(22,399,798) ============ ====== ======== ======== ============
The accompanying notes to financial statements are an integral part of these statements. F-5 31 BOLDER TECHNOLOGIES CORPORATION STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
REDEEMABLE CONVERTIBLE PREFERRED STOCK COMMON STOCK OPTIONS AND WARRANTS ----------------------- ------------------ -------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ---------- --------- --------- ------ ------ ------------ BALANCES, December 31, 1997 336,200 $ 16,205,046 9,498,440 $9,498 49,766 $ -- Issuance of common stock under the Employee Stock Purchase Plan (at $8.18 per share) -- -- 13,661 14 -- -- Issuance of common stock to employees for options exercised ($0.15 - $11.75 per share) -- -- 5,684 6 -- -- Offering costs incurred in connection with the issuance of Series A Convertible, Redeemable Preferred Stock -- (68,080) -- -- -- -- Accretion of preferred stock offering costs -- 214,217 -- -- -- -- Accrual of Series A Preferred Stock dividend -- 1,512,900 -- -- -- -- Issuance of common shares in payment of dividend on Series A Convertible, Redeemable Preferred Stock (includes $86 of cash payment due to fractional shares) -- (1,865,220) 195,591 195 -- -- Net loss -- -- -- -- -- -- ---------- ------------ --------- ------ ------ ------------ BALANCES, December 31, 1998 336,200 $ 15,998,863 9,713,376 $9,713 49,766 $ -- ========== ============ ========= ====== ====== ============
ADDITIONAL TREASURY STOCK PAID-IN DEFERRED ------------------- ACCUMULATED CAPITAL COMPENSATION SHARES AMOUNT DEFICIT ----------- ------------ -------- -------- ------------ BALANCES, December 31, 1997 $36,522,069 $ -- (33,333) $(50,000) $(22,399,798) Issuance of common stock under the Employee Stock Purchase Plan (at $8.18 per share) 111,734 -- -- -- -- Issuance of common stock to employees for options exercised ($0.15 - $11.75 per share) 1,904 -- -- -- -- Offering costs incurred in connection with the issuance of Series A Convertible, Redeemable Preferred Stock -- -- -- -- -- Accretion of preferred stock offering costs (214,217) -- -- -- -- Accrual of Series A Preferred Stock dividend (1,512,900) -- -- -- -- Issuance of common shares in payment of dividend on Series A Convertible, Redeemable Preferred Stock (includes $86 of cash payment due to fractional shares) 1,864,939 -- -- -- -- Net loss -- -- -- -- (9,943,969) ----------- ------------ ------- -------- ----------- BALANCES, December 31, 1998 $36,773,529 $ -- (33,333) $(50,000) $(32,343,767) =========== ============ ======= ======== ===========
The accompanying notes to financial statements are an integral part of these statements. F-6 32 BOLDER TECHNOLOGIES CORPORATION STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 and 1997
REDEEMABLE CONVERTIBLE PREFERRED STOCK COMMON STOCK OPTIONS AND WARRANTS -------------------- --------------------- --------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ------- ----------- --------- -------- ------- --------- BALANCES, December 31, 1998 336,200 $15,998,863 9,713,376 $ 9,713 49,766 $ -- Issuance of common stock under the Employee Stock Purchase Plan (at $7.67 to $8.50 per share) -- -- 15,639 16 -- -- Issuance of common stock to employees for options exercised ($0.09 - $1.50 per share) -- -- 64,052 64 -- -- Proceeds from private common stock offering, at $6 per share -- -- 1,289,967 1,290 -- -- Proceeds from private common stock offering, at $7 per share -- -- 763,215 763 -- -- Offering costs associated with private common stock offering -- -- -- -- -- -- Stock issued to vendor in payment for services rendered -- -- 12,500 13 -- -- Proceeds from secondary common stock offering, at $9.00 per share less underwriter's discount of $1,366,200 -- -- 2,530,000 2,530 -- -- Offering cost associated with secondary common stock offering -- -- -- -- -- -- Issuance of warrants to consultant for services rendered -- -- -- -- 195,000 550,000 Issuance of warrants to underwriter -- -- -- -- 66,000 593,340 Issuance of options to executive at less than fair market value -- -- -- -- -- 1,167,150 Amortization of deferred compensation -- -- -- -- -- -- Issuance of shares upon exercise of warrants, net -- -- 10,676 11 (19,125) -- Conversion of Series A Preferred Stock to common stock, including payment of accrued dividend in common stock (11,200) (560,000) 39,245 39 -- --
ADDITIONAL TREASURY STOCK PAID-IN DEFERRED ------------------- ACCUMULATED CAPITAL COMPENSATION SHARES AMOUNT DEFICIT ------------ ------------- ------- -------- ------------- BALANCES, December 31, 1998 $36,773,529 $ -- (33,333) $(50,000) $(32,343,767) Issuance of common stock under the Employee Stock Purchase Plan (at $7.67 to $8.50 per share) 125,827 -- -- -- -- Issuance of common stock to employees for options exercised ($0.09 - $1.50 per share) 46,234 -- -- -- -- Proceeds from private common stock offering, at $6 per share 7,738,512 -- -- -- -- Proceeds from private common stock offering, at $7 per share 5,341,737 -- -- -- -- Offering costs associated with private common stock offering (349,487) -- -- -- -- Stock issued to vendor in payment for services rendered 120,691 -- -- -- -- Proceeds from secondary common stock offering, at $9.00 per share less underwriter's discount of 21,401,270 -- -- -- -- $1,366,200 Offering cost associated with secondary common (271,557) -- -- -- -- stock offering Issuance of warrants to consultant for services -- (550,000) -- -- -- rendered (592,680) -- -- -- -- Issuance of warrants to underwriter Issuance of options to executive at less than fair -- (1,167,150) -- -- -- market value -- 647,263 -- -- -- Amortization of deferred compensation (23) -- -- -- -- Issuance of shares upon exercise of warrants, net Conversion of Series A Preferred Stock to common stock, including payment of accrued dividend in common stock 559,961 -- -- -- --
The accompanying notes to financial statements are an integral part of these statements. F-7 33 BOLDER TECHNOLOGIES CORPORATION STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
REDEEMABLE CONVERTIBLE PREFERRED STOCK COMMON STOCK OPTIONS AND WARRANTS ADDITIONAL --------------------- ------------------- -------------------- PAID-IN SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT CAPITAL ------- ---------- ------- ------- ------- ------ ----------- Accretion of preferred stock offering costs -- 215,076 -- -- -- -- (215,076) Accrual of Series A Preferred Stock dividend -- 1,487,700 -- -- -- -- (1,487,700) Issuance of common shares in payment of dividends on Series A Convertible, Redeemable Preferred Stock (includes $42 cash payment due to fractional shares) -- (1,487,700) 139,156 139 -- -- 1,487,519 Net loss -- -- -- -- -- -- -- ------- ------------ ---------- ------- ------- ---------- ------------ BALANCES, December 31, 1999 325,000 $ 15,653,939 14,577,826 $14,578 291,641 $2,310,490 $ 70,678,757 ======= ============ ========== ======= ======= ========== ============
TREASURY STOCK DEFERRED --------------------------- ACCUMULATED COMPENSATION SHARES AMOUNT DEFICIT -------------- ---------- -------- -------------- Accretion of preferred stock offering costs -- -- -- -- Accrual of Series A Preferred Stock dividend -- -- -- -- Issuance of common shares in payment of dividends on Series A Convertible, Redeemable Preferred Stock (includes $42 cash payment due to fractional shares) -- -- -- -- Net loss -- -- -- (20,379,392) ----------- ------- -------- ------------ BALANCES, December 31, 1999 $(1,069,887) (33,333) $(50,000) $(52,723,159) =========== ======= ======== ============
The accompanying notes to financial statements are an integral part of these statements. F-8 34 BOLDER TECHNOLOGIES CORPORATION STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, ----------------------------------------------- 1999 1998 1997 ---------------- ------------- ------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $(20,379,392) $ (9,943,969) $ (8,749,424) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 1,505,451 1,109,850 670,672 Amortization of deferred compensation 647,263 -- -- Stock issuance in payment for services rendered 120,704 -- -- Loss on asset disposals 1,408,814 -- -- Provision for doubtful accounts 219,000 -- -- Provision for returns and warranty 75,175 -- -- Changes in Trade accounts receivable (2,006,110) 32,302 13,263 Inventory (1,526,652) 32,941 (127,032) Prepaid expenses and other assets (142,670) 12,967 (41,439) Accounts payable 1,084,362 (677,641) 817,004 Accrued liabilities 1,458,427 449,317 399,643 Deferred revenue -- (1,786,924) 1,075,581 ------------ ------------ ------------ Net cash used in operating activities (17,535,628) (10,771,157) (5,941,732) ------------ ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of available-for-sale securities (6,932,154) (7,091,027) (12,894,062) Sale of available-for-sale securities 12,110,585 11,914,193 13,015,995 Purchases of property and equipment (3,213,141) (1,624,354) (10,247,985) Construction in progress payables -- (746,259) (1,297,035) Patent costs and other long-term assets (256,333) (154,907) (72,851) ------------ ------------ ------------ Net cash provided by (used in) investing activities 1,708,957 2,297,646 (11,495,938) ------------ ------------ ------------
The accompanying notes to financial statements are an integral part of these statements. F-9 35 BOLDER TECHNOLOGIES CORPORATION STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, -------------------------------------------- 1999 1998 1997 ------------ ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of preferred stock $ -- $ -- $ 15,921,400 Proceeds from issuance of common stock 34,658,243 113,658 162,621 Proceeds from issuance of notes payable -- 5,119,951 7,019,749 Payments on notes payable (1,522,214) (1,143,809) (1,101,383) Stock issuance costs (621,044) (68,080) (118,684) Other 606 (86) -- ------------ ------------ ------------ Net cash provided by financing activities 32,515,591 4,021,634 21,883,703 ------------ ------------ ------------ NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 16,688,920 (4,451,877) 4,446,033 CASH AND CASH EQUIVALENTS, beginning of period 962,453 5,414,330 968,297 ------------ ------------ ------------ CASH AND CASH EQUIVALENTS, end of period $ 17,651,373 $ 962,453 $ 5,414,330 ============ ============ ============ SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for interest $ 1,326,438 $ 1,307,113 $ 552,875 ============ ============ ============
The accompanying notes to financial statements are an integral part of these statements. F-10 36 BOLDER TECHNOLOGIES CORPORATION NOTES TO FINANCIAL STATEMENTS (1) ORGANIZATION BOLDER Technologies Corporation (the "Company") is an energy technology company that is currently involved in the design, development and marketing of advanced, high power, rechargeable lead acid-based batteries and battery-powered products based on its patented Thin Metal Film ("TMF") technology. During the fourth quarter 1999, the Company ceased being a development stage company. The Company was incorporated in the state of Colorado on March 22, 1991 ("Inception") as Bolder Battery, Inc., and reincorporated as a Delaware corporation on November 19, 1993 and was subsequently renamed BOLDER Technologies Corporation. In May 1996, the Company successfully completed an Initial Public Offering ("IPO") of 2,200,000 shares of stock at $10.50 per share. The Company is located in Golden, Colorado, and its customers have been primarily United States companies and the United States government. Revenue recognized in 1998 and 1997 relates primarily to a technology transfer agreement with a strategic partner, Johnson Controls, Inc. ("Johnson Controls"), Small Business Innovation Research research and development agreements, a customer-funded research and development agreement, and sales of demonstration and evaluation units of the Company's product. The Company's business plan does not contemplate that research and development services will continue to a significant degree after the Company commences sales of its product in commercial quantities. Accordingly, such revenue from research and development services are not considered as recurring or indicative of the Company's future revenue, if any, from the sale of its battery products in commercial quantities. During the fourth quarter of 1999, the Company began volume shipments of its first commercial product, SECURESTART, a portable jump-starting unit. The Company has incurred losses since its inception, and has an accumulated deficit of $52,723,159 at December 31, 1999. The Company's operations are subject to certain risks and uncertainties, some of which follow. The Company has now demonstrated the ability to produce its Sub-C cell in large volumes on a one-shift basis. The Company must be able to produce its product in commercial quantities on a 24-hour per day basis, and commercial acceptance of the Company's products will have to occur in the marketplace before the Company can sustain successful operations. The Company expects to incur additional losses in the future as it continues to improve its manufacturing process and improve product performance, expand commercial sales and seeks to improve its manufacturing, sales and marketing capability. There can be no assurance that the Company will achieve significant revenues or profitability in the future. Further, during the period required to achieve successful operations, the Company may require additional capital which may not be available to it. If capital is not available, or the terms of available capital are not acceptable to the Company, the Company would have to delay planned expenditures and/or cut back on its current level of operations, among other actions. The Company believes that its available cash and cash equivalents, investments and interest income will be sufficient to satisfy its funding needs at least through December 31, 2000. Further, the recovery of the carrying amount of the Company's long-lived assets, primarily assets for the high-volume production of batteries, is dependent on generating revenue from sales of the Company's products in commercial quantities. F-11 37 (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions may affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents include highly liquid investments with original maturities of three months or less. Available-for-Sale Securities Debt and equity securities that the Company has both the positive intent and ability to hold to maturity are classified as held-to-maturity and are reported at amortized cost. Debt and equity securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and reported at fair value, with the unrealized gains and losses included in earnings. Debt and equity securities not classified as either held-to-maturity securities or trading securities are classified as available-for-sale securities and reported at fair value, with unrealized gains or losses excluded from earnings and reported as a separate component of stockholders' equity. The Company's available-for-sale securities at December 31, 1999 and 1998, consist of United States Treasury bills and debt securities of United States government agencies and are reported at fair value. The fair market value of these securities approximates their amortized cost. Inventory Inventories are stated at the lower of cost (first-in, first-out basis) or market. Inventories, net of provisions, consist of the following as of December 31:
1999 1998 ---------- ---------- Raw materials ........... $ 946,180 68,661 Work in process ......... 435,747 35,938 Finished goods .......... 274,612 25,288 ---------- ---------- $1,656,539 $ 129,887 ========== ==========
Property and Equipment Property and equipment, excluding production line equipment, are stated at cost and depreciation is provided using the straight-line method over the estimated useful lives of the respective assets, which are three to seven years. Production line property and equipment are stated at cost and depreciated based on units expected to be produced over the estimated lives of the assets, which are five to ten years. Depreciation and amortization expense related to property and equipment for the years ended December 31, 1999, 1998 and 1997 was $1,456,724, $1,082,286, and $654,591, respectively. Leasehold improvements are capitalized and amortized over the shorter of the lease term or their estimated useful life. Maintenance and repairs that do not improve or extend the life of assets and expenditures for research and development equipment for which there is no future alternative use are expensed as incurred. Expenditures which F-12 38 improve or extend the life of assets are capitalized. During 1999, the Company disposed of obsolete production equipment with a net book value of approximately $1.4 million. Patents The Company capitalizes direct, external costs associated with patent applications and filings. Costs associated with successful applications are amortized over fourteen years beginning with the date of issue. Capitalized costs are written off at such time as it becomes known that an application will not be successful or when a particular patent is deemed to no longer be of value. Product Revenue Revenue from sales of products are recognized when the product ships and title passes to the customer. Revenue is net of allowances for estimated returns. Advertising Expense Advertising costs are charged to expense as incurred and amounted to $456,275, $20,189 and $16,470 for the years ended December 31,1999, 1998 and 1997, respectively. Research and Development Revenue and Royalties Revenues for research and development services performed under the Company's technology transfer arrangement with Johnson Controls were recognized using the percentage of completion method, based on the actual effort expended for a particular period relative to the total expected effort to perform the Company's obligations under this arrangement. Revenues recognized under this agreement totaled $0, $1,748,174, and $1,748,169, for the years ended December 1999, 1998, and 1997, respectively. The Company completed all of its obligations under the technology transfer agreement in October 1998 and accordingly recognized all remaining revenue associated with this arrangement. Research and development revenues and royalties in 1999 relate primarily to minimum royalties received from Johnson Controls. For other research and development arrangements, the Company generally recognizes revenue upon the completion of established milestones or upon project completion. Basic and Diluted Net Loss Per Share The Company presents basic and diluted earnings or loss per share in accordance with SFAS No. 128, Earnings Per Share, which establishes standards for computing and presenting basic and diluted earnings per share. Under this statement, basic earnings or loss per share is computed by dividing the net earnings or loss by the weighted average number of shares of common stock outstanding. Diluted earnings or loss per share is determined by dividing the net earnings or loss by the sum of 1) the weighted average number of shares of common stock outstanding, 2) if not antidilutive, the number of shares of convertible preferred stock as if converted upon issuance, and 3) if not antidilutive, the effect of outstanding stock options and warrants determined using the treasury stock method. Accordingly, the Company has presented basic earnings per share for each period presented. For all periods presented, the effects of the convertible preferred stock, stock options and warrants were excluded from the calculation of diluted loss per share since the result would have been antidilutive. At December 31, 1999, securities that have been excluded from basic and diluted net loss per share because they would be antidilutive, without regard to the treasury stock method, are outstanding options to purchase 2,501,430 shares of the Company's common stock, outstanding warrants to purchase 291,641 shares of the Company's common stock and 325,000 shares of Convertible, Redeemable Preferred Stock, which are convertible into 1,083,333 shares of common stock. F-13 39 At December 31, 1998, securities that have been excluded from basic and diluted net loss per share because they would be antidilutive, without regard to the treasury stock method, are outstanding options to purchase 1,528,814 shares of the Company's common stock, outstanding warrants to purchase 49,766 shares of the Company's common stock and 336,200 shares of Convertible, Redeemable Preferred Stock, which are convertible into 1,120,667 shares of common stock. At December 31, 1997, securities that have been excluded from basic and diluted net loss per share because they would be antidilutive, without regard to the treasury stock method, are outstanding options to purchase 1,139,240 shares of the Company's common stock, outstanding warrants to purchase 49,766 shares of the Company's common stock and 336,200 shares of Convertible, Redeemable Preferred Stock, which are convertible into 1,120,667 shares of common stock. Concentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents, available for sale securities and accounts receivable. The Company maintains the majority of its cash, cash equivalents and short-term investment balances with financial institutions that management believes are creditworthy in the form of demand deposits and United States Treasury notes, Treasury bills, and debt securities of agencies of the United States government. The Company has no significant off-balance sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. The Company performs ongoing credit evaluations of its customers' financial condition and generally does not require collateral. Its accounts receivable balances are primarily domestic. The Company had two principal customers that accounted for approximately 90% and 99% of its total revenue for the years ended December 31, 1999 and 1998, respectively. Accounts receivable from these customers represented 85% and 88% of the accounts receivable balance at December 31, 1999 and 1998, respectively. Fair Value of Financial Instruments The Company's financial instruments consist of cash and cash equivalents, short-term trade receivables and payables and notes payable. The carrying values of cash and cash equivalents and short-term trade receivables and payables approximate fair value. The fair value of notes payable is estimated based on current rates available for similar debt with similar maturities and collateral, and at December 31, 1999, approximates the carrying value. Impairment of Long-lived Assets The Company continually evaluates whether events and circumstances have occurred which may indicate that its long-lived assets may be impaired. The Company evaluates impairment based upon estimated undiscounted cash flows over the remaining life of the long-lived assets. Management believes the carrying value of all long-lived assets at December 31, 1999 and 1998 are recoverable through normal operations. Stock-based Compensation The Company accounts for stock-based employee compensation arrangements in accordance with the provisions of Accounting Principles Board ("APB") Opinion Number 25, "Accounting for Stock Issued to Employees" and related interpretations and complies with the disclosure provisions of Statement of Financial Accounting Standards ("SFAS") Number 123, "Accounting for Stock-Based Compensation." Under APB 25, compensation expense is based on the difference, if any, on the date of the grant, between the fair value of the Company's stock and the exercise price of the option. The Company accounts for equity instruments issued to nonemployees in accordance with the provisions of SFAS No. 123 and related interpretations. F-14 40 Income Taxes The current provision for income taxes represents actual or estimated amounts payable or refundable on tax returns filed or to be filed each year. Deferred tax assets and liabilities are recorded for the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in the accompanying balance sheets. Deferred tax assets are also recognized for net operating loss and tax credit carryovers. The overall change in deferred tax assets and liabilities for the period measures the deferred tax expense for the period. Effects of changes in enacted tax laws on deferred tax assets and liabilities are reflected as adjustments to tax expense in the period of enactment. The measurement of deferred tax assets may be reduced by a valuation allowance based on judgmental assessment of available evidence if deemed more likely than not that some or all of the deferred tax assets will not be realized. Comprehensive Income Effective January 1, 1998, the Company adopted the provisions of SFAS No. 130, "Reporting Comprehensive Income." SFAS No. 130 establishes standards for reporting comprehensive income and its components in financial statements. Comprehensive income, as defined, includes all changes in equity (net assets) during a period from non-owner sources. From Inception, the Company has not had any material transactions that are required to be reported in comprehensive income as compared to its net loss. Segment Information In June 1997, the Financial Accounting Standards Board issued SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information." This statement establishes standards for the way companies report information about operating segments in annual financial statements. It also establishes standards for related disclosures about products and services, geographic areas and major customers. In accordance with the provisions of SFAS No. 131, the Company has determined that it does not have separately reportable operating segments. Recent Accounting Pronouncements In March 1998, the American Institute of Certified Public Accountants ("AICPA") issued Statement of Position ("SOP") No. 98-1, "Software for Internal Use," which provides guidance on accounting for the cost of computer software developed or obtained for internal use. SOP No. 98-1 is effective for financial statements for fiscal years beginning after December 15, 1998. The adoption of SOP No. 98-1 did not have a material impact on the Company's financial statements. The AICPA has issued SOP No. 98-5, "Reporting on the Costs of Start-up Activities." SOP No. 98-5 requires that all non-governmental entities expense the costs of start-up activities, including organizational costs, as these costs are incurred, and is effective for fiscal years beginning after December 15, 1998. The adoption of SOP No. 98-5 did not have a material impact on the Company's financial statements. In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities". The Company is required to adopt SFAS 133 in fiscal 2001. SFAS No. 133 established methods of accounting for derivative financial instruments and hedging activities related to those instruments as well as other hedging activities. To date, the Company has not entered into any derivative financial instruments or hedging activities. In December 1999, the SEC issued SAB No. 101, "Revenue Recognition" ("SAB 101"). SAB 101 clarifies the SEC Staff's views in applying generally accepted accounting principles to selected revenue recognition issues. The guidance in SAB 101 must be implemented by the Company during its first quarter of fiscal 2000. The Company is currently evaluating the impact, if any, of SAB 101 on its financial reporting. F-15 41 Reclassifications Certain reclassifications have been made to the prior period financial statements to conform to the current period presentation. (3) AVAILABLE-FOR-SALE SECURITIES The following is a summary of available-for-sale securities as of December 31, 1999 and 1998:
1999 1998 ----------- ----------- U.S. government agency debt securities ...... $ 4,978,850 $ 9,138,509 U.S. Treasury notes ......................... -- 1,018,772 ----------- ----------- $ 4,978,850 $10,157,281 =========== ===========
Unrealized gains and losses on available-for-sale securities were immaterial as of December 31, 1999 and 1998 and for each of the three years ended December 31, 1999. The amortized cost of debt securities at December 31, 1999, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities. Less than 1 year.................... $ 4,978,850 ===========
(4) STOCKHOLDERS' EQUITY Preferred Stock In October 1997, the Company completed a private placement sale of 336,200 shares of Series A Convertible, Redeemable Preferred Stock, $0.001 par value per share ("1997 Series A"), for $50 per share. The net proceeds from the offering were approximately $15.8 million. The placement agents for the 1997 Series A received warrants to purchase an aggregate of 30,641 shares of the Company's common stock at an exercise price of $14.50 per share, in addition to customary commissions. Cash offering costs related to this private placement totaled $1,075,354. Dividends on the 1997 Series A are cumulative and payable semi-annually on June 30 and December 31, beginning October 8, 1997, at an annual rate equal to $4 per share if paid in cash and $4.50 per share if paid in shares of the Company's common stock. The shares of 1997 Series A are convertible into common stock at the option of the holder at a conversion price equal to $15 per share subject to adjustment in certain circumstances. The 1997 Series A, if not earlier redeemed, must be redeemed on October 8, 2002 at the redemption price. The redemption price, which is equal to $50 per share plus accrued and unpaid dividends, may be paid in shares of the Company's common stock or cash or in a combination of common stock and cash, at the Company's option. It is the Company's intent, however, to redeem the 1997 Series A for shares of the Company's common stock. Accordingly, the 1997 Series A is included as a component of stockholders' equity. F-16 42 Dividends paid on the 1997 Series A have been paid in shares of the Company's common stock (with cash payments for fractional shares) as follows:
Dividend Payment Date Cash Amount Paid Common Shares Issued --------------------- ---------------- -------------------- March 1998 $ 26 77,985 June 1998 $ 43 36,704 December 1998 $ 17 80,902 June 1999 $ 26 82,444 December 1999 $ 16 56,712
The carrying amount of the 1997 Series A is increased for accrued and unpaid dividends plus periodic accretion of offering costs, using the effective interest method, such that the carrying amount will equal the redemption amount on October 8, 2002. The carrying amount includes accreted offering costs of $479,293 and $264,217 at December 31, 1999 and 1998, respectively. 1996 Equity Incentive Plan In March 1996, the Company adopted the 1996 Equity Incentive Plan, as amended (the "Equity Incentive Plan"). The Equity Incentive Plan is a successor to, and restatement of, the Company's 1992 Incentive Stock Option Plan and its 1992 Non-Qualified Stock Option Plan (the "1992 Plans"). The Equity Incentive Plan provides for the following types of stock-based awards: incentive stock options for employees (including officers and employee directors); nonstatutory stock options for employees (including officers and non-employee directors), directors and consultants; and restricted stock purchase awards, stock bonuses and stock appreciation rights to employees (including officers and employee directors) and consultants. As of December 31, 1999, no grants of stock bonuses, restricted stock purchase awards or stock appreciation rights have been made. The Company has reserved 2,308,973 shares of its Common Stock for future issuance under the Equity Incentive Plan at December 31, 1999. At December 31, 1999, options for 400,629 shares of common stock are available for grant under the terms of the Equity Incentive Plan. Employee Stock Purchase Plan In March 1996, the Company adopted the Employee Stock Purchase Plan, as amended, (the "Purchase Plan"), which covers an aggregate of 80,000 shares of Common Stock. The Purchase Plan is intended to qualify as an employee stock purchase plan within the meaning of Section 423 of the Internal Revenue Code. Under the Purchase Plan, the Board of Directors may authorize participation by eligible employees, including officers, in periodic offerings following the adoption of the Purchase Plan. The offering period for any offering will be no more than 27 months. Employees are eligible to participate if they are employed by the Company or an affiliate of the Company designated by the Board of Directors for at least 20 hours of service per week and are employed by the Company or a subsidiary of the Company designated by the Board for at least five months of service per calendar year. Employees who participate in an offering can have up to 10% of their earnings withheld pursuant to the Purchase Plan. The amount withheld will then be used to purchase shares of Common Stock on specified dates determined by the Board of Directors. The price of Common Stock purchased under the Purchase Plan will be equal to 85% of the lower of the fair market value of the Common Stock on the commencement date of each offering period or the relevant purchase date. Employees may end their participation in the offering at any time during the offering period, and participation ends automatically on termination of employment with the Company. At December 31, 1999, 44,675 shares of common stock had been issued under the Purchase Plan. Subsequent to December 31, 1999, 12,754 shares were issued related to employee participation in 1999. At December 31, 1999, 35,325 shares of common stock were available for future offerings, which amount was reduced to 22,571 with the issuance subsequent to December 31, 1999. F-17 43 Rights Agreement In January 1998, the Board of Directors of the Company declared a dividend distribution of one preferred share purchase right (a "Right") for each outstanding share of common stock. Upon certain events, including events which could result in a change in control of the Company, each Right entitles the registered holder to purchase from the Company one one-hundredth of a share of Series B Junior Participating Preferred Stock at a price of $100, subject to adjustment. Statement of Financial Accounting Standards No. 123 SFAS 123 defines a fair value based method of accounting for employee stock options or similar equity instruments. However, SFAS 123 allows the continued measurement of compensation cost for such plans using the intrinsic value based method prescribed by APB 25, provided that pro forma disclosures are made of net income or loss and net income or loss per share, assuming the fair value based method of SFAS 123 had been applied. The Company has elected to account for its stock-based compensation plans for employees and directors under APB 25. During 1999, the Company recognized $97,263 in compensation expense for options granted at less than market value. During 1998 and 1997, all options were granted at fair value, and accordingly, the Company recorded no compensation expense during 1998 and 1997 under the provisions of APB 25. For purposes of the pro forma disclosures presented below, the Company has computed the fair values of all options granted during 1999, 1998 and 1997, using the Black-Scholes pricing model and the following weighted average assumptions:
1999 1998 1997 -------- -------- --------- Risk-free interest rate............ 5.7% 5.3% 6.1% Expected dividend yield............ 0.0% 0.0% 0.0% Expected lives outstanding......... 3.6 yrs. 6.1 yrs. 5.3 yrs. Expected volatility................ 55.8% 26.0% 22.3%
To estimate lives of options for this valuation, it was assumed options will be exercised upon becoming fully vested. All options are initially assumed to vest. Cumulative compensation costs recognized in pro forma net income or loss with respect to options that are forfeited prior to vesting is reflected as a reduction of pro forma compensation expense in the period of forfeiture. The expected volatility was based on the Company's volatility since its IPO. Actual volatility of the Company's common stock varies. Fair value computations are highly sensitive to the volatility factor assumed; the greater the volatility, the higher the computed fair value of options granted. The total fair value of options granted was computed to be approximately $5,283,000, $1,773,000, and $1,684,000 for the years ended December 31, 1999, 1998 and 1997, respectively. These amounts are amortized ratably over the vesting periods of the options or recognized at date of grant if no vesting period is required. Pro forma stock-based compensation, net of the effect of forfeitures, was $1,433,887, $904,376, and $619,497 for 1999, 1998 and 1997, respectively. Because the fair value method of accounting prescribed by SFAS 123 has not been applied to options granted prior to January 1, 1996, the resulting pro forma compensation cost may not be representative of that to be expected in future years. F-18 44 In addition to the options, there was approximately $53,000, $58,000, and $38,500 of pro forma compensation related to the Purchase Plan for 1999, 1998 and 1997, respectively. The shares were valued assuming a 55.8%, 26.0%, and 22.3% volatility factor, and a 5.1%, 4.8%, and 5.2% risk free interest rate for 1999, 1998 and 1997, respectively. If the Company had accounted for its stock-based compensation plans in accordance with SFAS 123, the Company's net loss and pro forma net loss per common share would have been reported as follows:
1999 1998 1997 ------------ ------------ ------------ Net loss: As reported ................... $(20,379,392) $ (9,943,969) $ (8,749,424) ============ ============ ============ Pro forma ..................... $(21,866,089) $(10,906,558) $ (9,407,421) ============ ============ ============ Net loss allocable to common As reported .................. $(22,082,168) $(11,671,086) $ (9,151,744) shareholders ============ ============ ============ Pro forma .................... $(23,568,865) $(12,633,675) $ (9,809,741) ============ ============ ============ Basic and As reported (Note 2) ......... $ (1.97) $ (1.22) $ (0.97) ============ ============ ============ Diluted EPS Pro forma (Note 2) ........... $ (2.10) $ (1.32) $ (1.04) ============ ============ ============
A summary of stock options for the years ended December 31, 1999, 1998 and 1997 is presented below:
WEIGHTED AVERAGE EXERCISE SHARES PRICE --------- ----------- BALANCES, as of December 31, 1996 ...... 887,750 $ 6.07 Granted .............................. 362,916 $ 14.22 Canceled ............................. (75,983) $ 8.19 Exercised ............................ (35,443) $ 0.27 --------- BALANCES, as of December 31, 1997 ...... 1,139,240 $ 8.71 --------- Granted .............................. 518,130 $ 9.22 Canceled ............................. (122,872) $ 13.48 Exercised ............................ (5,684) $ 0.34 --------- BALANCES, as of December 31, 1998 ...... 1,528,814 $ 8.53 --------- Granted .............................. 1,095,358 $ 8.48 Canceled ............................. (58,690) $ 11.95 Exercised ............................ (64,052) $ 0.72 --------- BALANCES, as of December 31, 1999 ...... 2,501,430 $ 8.63 =========
The weighted average exercise prices and weighted average fair value of options granted during the years ended December 31, 1999, 1998 and 1997 were as follows:
WEIGHTED AVERAGE WEIGHTED YEAR ENDED DECEMBER 31, NUMBER OF ESTIMATED FAIR AVERAGE 1999 OPTIONS VALUE EXERCISE PRICE --------- ---------------- -------------- Exercise price equal to estimated fair value ......... 945,358 $ 4.31 $ 9.42 Exercise price less than estimated fair value ......... 150,000 8.05 2.59 --------- --------- --------- Total ........................ 1,095,358 $ 4.82 $ 8.48 ========= ========= =========
F-19 45
WEIGHTED AVERAGE WEIGHTED YEAR ENDED DECEMBER 31, NUMBER OF ESTIMATED FAIR AVERAGE 1998: OPTIONS VALUE EXERCISE PRICE --------- ---------------- -------------- Exercise price equal to estimated fair value ......... 518,130 $ 3.45 $ 9.22 Exercise price less than estimated fair value ......... -- -- -- ------- ------- ------- Total ........................ 518,130 $ 3.45 $ 9.22 ======= ======= =======
WEIGHTED AVERAGE WEIGHTED YEAR ENDED DECEMBER 31, NUMBER OF ESTIMATED FAIR AVERAGE 1997: OPTIONS VALUE EXERCISE PRICE --------- ---------------- -------------- Exercise price equal to estimated fair value ......... 362,916 $ 4.77 $ 14.22 Exercise price less than estimated fair value ......... -- -- -- ------- ------- ------- Total ........................ 362,916 $ 4.77 $ 14.22 ======= ======= =======
The following table summarizes information about the options outstanding at December 31, 1999:
OUTSTANDING AT EXCERCISABLE AT DECEMBER 31, 1999 DECEMBER 31, 1999 ------------------------------------------------ ----------------------------- WEIGHTED AVERAGE WEIGHTED WEIGHTED REMAINING AVERAGE NUMBER AVERAGE RANGE OF EXERCISE PRICES NUMBER CONTRACTUAL EXERCISE EXERCISE LIFE PRICE PRICE - ------------------------- --------------- -------------- ------------ -------------- ------------ $0.15 .................... 45,887 4.2 0.15 45,850 0.15 $0.38 .................... 149,331 4.5 0.38 149,208 0.38 $0.75 .................... 10,241 5.1 0.75 10,062 0.75 $1.50 .................... 59,392 5.5 1.50 54,874 1.50 $2.59 .................... 150,000 9.8 2.59 12,500 2.59 $6.00 .................... 155,362 6.1 6.00 106,938 6.00 $8.00 - $9.31 ............ 584,819 8.6 8.84 119,720 8.47 $9.50 - $10.50 ........... 700,336 9.4 10.24 229,061 10.31 $11.75 - $15.50 .......... 646,062 8.5 13.32 273,483 14.37 --------- --------- TOTAL ............. 2,501,430 8.1 8.63 1,001,696 7.99 ========= =========
Stock Warrants The Company issued warrants to a consultant in exchange for services to purchase 195,000 shares of common stock at an exercise price of $8.00. The total fair value of the warrants was $550,000, which was recorded as consulting expense in 1999. In connection with the common stock offering in November 1999, the Company issued warrants to the underwriter to purchase 66,000 shares of common stock. The fair value of the warrants was $593,340, which offsets the proceeds from the common stock offering. F-20 46 (5) JOINT VENTURE AND LICENSE AGREEMENTS In June 1995, the Company and Johnson Controls formed a joint venture, Johnson Controls/Bolder LLC (the "Joint Venture"), to develop high volume manufacturing technology for TMF batteries, to commercialize the TMF technology and to promote the TMF technology in the hybrid electric vehicle market. In July 1996, having substantially completed its primary objective of developing the high volume manufacturing technology, the Company and Johnson Controls agreed to discontinue the Joint Venture and separately implement TMF battery manufacturing facilities to best meet the unique requirements of the markets addressed by each. This agreement to discontinue the Joint Venture was formalized on January 22, 1997, but made effective as of July 31, 1996. From inception until it was terminated, the Joint Venture was primarily engaged in the research and development of the manufacturing process for TMF batteries and did not generate any significant revenues. Assets and liabilities of the Joint Venture at the date of termination were considered to be the property of the Company, and the net assets attributable to Johnson Controls' ownership interest were considered to be advance payments on the technology transfer agreement entered into between the Company and Johnson Controls. In connection with the termination of the Joint Venture and the restructuring of the relationship between the Company and Johnson Controls, the Company agreed to engage in technology transfer services which will allow Johnson Controls to deploy TMF technology in specified markets in commercial quantities. In exchange for services to be performed under the technology transfer agreement, the Company received Johnson Controls' interest in the net assets of the Joint Venture in the amount of $746,343 during 1996, and a cash payment of $2,750,000 from Johnson Controls during 1997. The Company recognized $1,748,174 and $1,748,169 of revenue related to this agreement during the years ended December 31, 1998 and 1997, respectively. In October 1998 the Company completed the technology transfer and recognized the remaining revenue relating to the agreement. In addition, the Company granted Johnson Controls, Inc. a license to make and sell TMF batteries in markets related to auto/truck primary starting, hybrid electric vehicles, lawn and garden equipment starting, motorcycle starting and uninterruptible power supplies. The Company will receive royalties on all units sold by Johnson Controls into these markets which incorporate the Company's TMF technology, subject to certain minimum royalties payable each year. In 1999 and 1998, the Company received $140,000 and $295,000, respectively, in minimum royalties. The Company and Johnson Controls also entered into a cross supply agreement pursuant to which they will supply each other with TMF battery products. (6) NOTES PAYABLE The Company has entered into a senior loan and security agreement (the "Agreement") whereby the Company may borrow, in one or more borrowings, an amount not to exceed $1,500,000 in the aggregate. At December 31, 1999, cumulative borrowings under the Agreement totaled $862,915. No further borrowings are allowed under the terms of this Agreement. The Company has granted a first perfected security interest in certain of its equipment, machinery and fixtures as collateral to these borrowings. At December 31, 1999, $22,697 is outstanding under the Agreement. The notes payable under the Agreement at December 31, 1999 and 1998, bear interest at rates varying from 9.1% to 10.0% (weighted average interest rate of 9.11% at December 31, 1999), due on varying dates through July 2000 and require monthly payments of principal and interest totaling $3,341. In connection with the Agreement, the Company issued warrants to the lender. Under the terms of the warrants, the lender could acquire up to 10,500 shares and 8,625 shares of the Company's Common Stock for $3.00 and $6.00 per share, respectively. During 1999, the lender exercised these warrants, resulting in the issuance of 10,676 shares, net. F-21 47 In March 1997, the Company entered into a senior loan and security agreement ("the Loan Agreement"), whereby the Company may borrow, in one or more borrowings, an amount not to exceed $13 million in the aggregate. At December 31, 1999, cumulative borrowings under the Loan Agreement totaled $12.26 million. The Company gave the lender a first perfected security interest in certain of its tenant improvements in its Golden, Colorado facility and in its commercial production line as collateral. At December 31, 1999, $8,836,134 is outstanding under the Loan Agreement. The notes payable under the Loan Agreement at December 31, 1999 and 1998 bear interest at rates varying from 12.8% to 17.2% (weighted average interest rate of 13.5% at December 31, 1999), are due on varying dates through February 2004 and require monthly payments of principal and interest totaling $239,085. The aggregate maturities of the notes payable are as follows: 2000 .................... $2,122,108 2001 .................... 2,247,600 2002 .................... 1,835,261 2003 .................... 1,899,337 2004 .................... 754,525 ---------- $8,858,831 ==========
(7) COMMITMENTS AND CONTINGENCIES The Company leases its office space and production facility under an eleven-year lease with two five-year renewal options. The Company also leases certain office equipment under lease agreements which terminate in 2002. Future minimum commitments under these leases are as follows: 2000 .................... $ 646,150 2001 .................... 622,081 2002 .................... 552,417 2003 .................... 548,262 2004 .................... 540,876 Thereafter .............. 1,778,122 ---------- $4,687,908 ==========
Monthly rental payments for the Company's office and manufacturing space are approximately $45,000. Rent expense for the years ended December 31, 1999, 1998 and 1997 was $533,490, $461,119, and $482,584, respectively. The Company has entered into employment agreements with certain executives that provide for specified severance payments should the Company terminate the executive's employment with the Company, other than for cause. The amount to be paid is subject to reduction in certain circumstances. The Company has a 401(k) plan under which eligible employees may defer up to 20% of their compensation. The Company may make matching contributions and discretionary contributions if approved by the Board of Directors. For 1999, 1998 and 1997, no employer matching or discretionary contributions were made to the Plan. The Company is subject to certain environmental and other regulations primarily administered by the United States Environmental Protection Agency and various state agencies. Management of the Company believes it has complied with all material aspects associated with these regulations. F-22 48 From time to time the Company is subject to legal proceedings arising out of operations. In September 1999, Century Mfg. Co. ("Century"), a subsidiary of Pentair, Inc., filed a complaint against the Company in the United States District court for the District of Minnesota. Century, which manufactures a line of portable power and jump-starting products, alleges among other things that the Company has misappropriated Century's trade secrets and breached a confidentiality agreement in producing and manufacturing SECURESTART. Century later filed a separate lawsuit alleging that the SECURESTART product infringes a patent issued to Century in November 1999. That suit was consolidated with the first action, and now all of Century's claims are pending in the first action. The Company has answered Century's complaint and asserted counterclaims for Century's misappropriation for the Company's trade secrets and confidential information. The Company believes that Century's claims are without merit, intend to defend against them vigorously, and intend to press vigorously our counterclaims. In December 1999, Mueller Electric Company ("Mueller"), a manufacturer of cable assemblies, filed an arbitration demand in Denver, Colorado against the Company alleging breach of a supply contract and demanding payment of $443,000 plus interest. The Company has denied the claims, believes that Mueller failed to perform under the contract and has filed a breach of contract counter claim and is seeking damages of at least $40,000 plus interest and fees. An arbitration hearing has been set for May 2000. It is probable that a settlement cost will occur, the amount of which is uncertain. (8) ACCRUED COMPENSATION AND OTHER ACCRUED LIABILITIES The components of accrued compensation and other accrued liabilities are as follows:
1999 1998 ---------- ---------- Accrued vacation ....................... $ 390,493 $ 250,676 Employee stock purchase plan payable ... 95,011 60,523 Property taxes payable ................. 533,227 218,016 Accrued commissions and bonuses ........ 674,390 344,400 Compensation payable ................... 264,710 178,386 Accrued interest ....................... 101,028 120,149 Warranty and returns allowance ......... 75,175 -- Advertising costs ...................... 185,000 -- Professional services .................. 247,257 -- Other .................................. 370,419 230,958 ---------- ---------- $2,936,710 $1,403,108 ========== ==========
(9) INCOME TAXES The Company has had losses since Inception, and therefore has not been subject to federal or state income taxes. As of December 31, 1999, the Company had an accumulated net operating loss ("NOL") carryforward for income tax purposes of approximately $51.9 million. The carryforward is subject to examination by the tax authorities and expires at various dates through the year 2014. The Tax Reform Act of 1986 contains provisions that may limit the NOL carryforwards available for use in any given year upon the occurrence of certain events, including significant changes in ownership interest. A change of ownership of a company greater than 50% within a three-year period results in an annual limitation on the Company's ability to utilize its NOL carryforwards from tax periods prior to the ownership change. The private placement sale of the 1997 Series A in October 1997 and the secondary common stock offering in November 1999 resulted in such a change of ownership, limiting the annual utilization of the NOL carryforward. As a result, the Company estimates that the NOL carryforward limitation will be approximately $7.0 million in each future year. The Company does not believe that this limitation will affect the eventual utilization of its total NOL carryforwards. Deferred tax assets and liabilities consist of the following: F-23 49
DECEMBER 31, ---------------------------- 1999 1998 ------------ ------------ Deferred tax assets: Net operating loss carryforwards ....... $ 19,839,554 $ 13,459,592 Warrants issued ........................ 210,375 -- Deferred revenue ....................... 13,388 13,388 Warranty reserve ....................... 28,751 -- Accounts receivable .................... 83,768 -- Inventory .............................. 545,552 67,264 Accrued compensation ................... 386,514 251,264 Other .................................. 95,623 21,994 ------------ ------------ 21,203,525 13,813,502 Less valuation allowance ............... (20,086,465) (12,297,020) ------------ ------------ 1,117,060 1,516,482 Deferred tax liability: Depreciation differences ............... (916,881) (1,388,301) Capitalized patent costs ............... (200,179) (128,181) ------------ ------------ (1,117,060) (1,516,482) ------------ ------------ Net deferred taxes ..................... $ 0 $ 0 ============ ============
The Company's net deferred tax assets represent a previously unrecognized tax benefit. Recognition of these benefits requires future taxable income, the attainment of which is uncertain, and therefore, a valuation allowance has been established for the entire tax benefit and no benefit for income taxes has been recognized in the accompanying statements of operations. The differences in income taxes provided and the amounts determined by applying the federal statutory rate to income taxes result from the following:
1999 1998 1997 ----------- ----------- ----------- Income tax benefit using federal statutory rate $(7,132,787) $(3,480,389) $(3,062,298) State income tax benefit (662,330) (323,179) (284,356) Meals and entertainment and other 5,672 2,883 12,371 Change in valuation allowance 7,789,445 3,800,685 3,334,284 ----------- ----------- ----------- $ 0 $ 0 $ 0 =========== =========== ===========
F-24 50 (10) BUSINESS SEGMENT INFORMATION In accordance with the provisions of SFAS No. 131, the Company has determined that it does not have separately reportable operating segments. Below is a listing of major customers, each of which comprised more than 10% of revenues:
1999 1998 1997 -------------------------- ---------------------- ----------------------- AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT ------ ------ ------ ------- ------ ------- Sears, Roebuck & Company .............. $1,659,667 82% -- -- -- -- Johnson Controls ...................... $ 140,000 7% $2,055,810 84% $1,952,367 77% United States Government SBIR Contract .............................. $ 29,324 1% $ 367,436 15% $ 280,786 11% Customer 2............................. -- -- -- -- $ 277,500 11%
F-25 51 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION 3(i).1* Amended and Restated Certificate of Incorporation of the Company. 3(i).2** Certificate of Designation of the Series A Preferred Stock of the Company. 3(i).3** Amendment to the Certificate of Designation of the Series A Preferred Stock of the Company. 3(i).4*** Certificate of Designation of the Series B Junior Participating Preferred Stock of the Company. 3(ii).1* Amended and Restated Bylaws of the Company. 3(ii).2** Amendment to the Amended and Restated Bylaws of the Company. 4.1 Reference is made to Exhibits 3(i).1 through 3(ii).2. 4.2* Specimen stock certificate representing shares of Common Stock of the Company. 4.3** Specimen stock certificate representing shares of Series A Preferred Stock of the Company. 4.4*** Rights Agreement between the Company and American Stock Transfer & Trust Company, dated January 23, 1998. 4.5*** Form of Rights Certificate. 10.1*+ Form of Indemnity Agreement between the Company and each of its directors and executive officers. 10.2 1996 Equity Incentive Plan of the Company, as amended through March 26, 1999 (previously filed as an exhibit to the Company's Registration Statement on Form S-8 (Registration No. 333-08968) and incorporated herein by reference). 10.3* 1996 Employee Stock Purchase Plan of the Company, as amended through March 26, 1999. 10.4*+ Employment Agreement between the Company and Daniel S. Lankford, dated July 11, 1994. 10.5*+ Employment Agreement between the Company and Joseph F. Fojtasek, dated February 13, 1996. 10.6+ Employment Agreement between the Company and Arthur S. Homa, dated September 25, 1997 (previously filed as an exhibit to the Company's Form 10-K for the year ended December 31, 1997 and incorporated herein by reference). 10.7+ Employment Agreement between the Company and Daniel A. Schwob, dated September 16, 1998 (previously filed as an exhibit to the Company's Form 10-K for the year ended December 31, 1998 and incorporated herein by reference). 10.8+ Employment Agreement between the Company and Roger Warren, dated as of September 17, 1999. 10.9+ Nonstatutory Stock Option Agreement between the Company and Roger Warren, dated October 1, 1999. 10.10+ Nonstatutory Stock Option Agreement between the Company and Roger Warren, dated October 1, 1999. 10.11+ Nonstatutory Stock Option Agreement between the Company and Roger Warren, dated October 1, 1999. 10.12+ Nonstatutory Stock Option Agreement between the Company and Roger Warren, dated October 1, 1999. 10.13+ Incentive Stock Option Agreement between the Company and Roger Warren, dated October 1, 1999. 10.14* Series C Preferred Stock Purchase Agreement between the Company and the purchasers named therein, dated July 19, 1994. 10.15* Supplemental Agreement to Series C Preferred Stock Purchase Agreement between the Company and the purchasers named therein, dated September 30, 1994. 10.16* First Amendment to Purchase Agreement among the Company, the stockholders of the Company named therein and Phoenix Leasing Incorporated, dated July 29, 1994. 10.17* Amendment to Purchase Agreement among the Company, the stockholders of the Company named therein and Phoenix Leasing Incorporated, dated March 21, 1996. 10.18* Note and Warrant Purchase Agreement between the Company and the purchasers named therein, dated March 14, 1995. 10.19* Preferred Stock and Warrant Purchase Agreement between the Company and the purchasers named therein, dated May 24, 1995. 10.20* Letter Agreement among the Company, Harold Scott and the stockholders of the Company named therein, dated January 18, 1996.
52 10.21* Series E Preferred Stock and Warrant Purchase Agreement among the Company, Johnson Controls Battery Group, Inc. and the stockholders of the Company named therein, dated June 26, 1995. 10.22** Purchase Agreement between the Company and BT Alex. Brown Incorporated, dated October 3, 1997. 10.23** Registration Rights Agreement between the Company and BT Alex. Brown Incorporated, dated October 8, 1997. 10.24* Senior Loan and Security Agreement between the Company and Phoenix Leasing Incorporated, dated July 29, 1994, including forms of Promissory Notes and Warrants to Purchase Shares of Series C Preferred Stock issued thereunder. 10.25 Security Agreement between the Company and Transamerica Business Credit Corporation, dated March 4, 1997, including form of Promissory Notes issued thereunder (previously filed as an exhibit to the Company's Form 10-KSB for the year ended December 31, 1996 and incorporated herein by reference). 10.26* Agreement between the Company and Wright Industries, Inc., dated March 11, 1996. 10.27 Agreement among the Company, Johnson Controls Battery Group, Inc. and Johnson Controls/Bolder LLC, dated July 31, 1996 (previously filed as an exhibit to the Company's February 5, 1997 Form 8-K and incorporated herein by reference). 10.28 Cross Supply Agreement between the Company and Johnson Controls Battery Group, Inc., dated January 22, 1997 (previously filed as an exhibit to the Company's February 5, 1997 Form 8-K and incorporated herein by reference). 10.29 Common Stock Purchase Agreement, dated May 14, 1999, between the Company and certain stockholders (previously filed as an exhibit to the Company's July 12, 1999 Registration Statement of Form S-3 and incorporated herein by reference). 10.30 Common Stock Purchase Agreement, dated May 18, 1999, between the Company and certain stockholders (previously filed as an exhibit to the Company's July 12, 1999 Registration Statement of Form S-3 and incorporated herein by reference). 10.31 Common Stock Purchase Agreement, dated July 9, 1999, between the Company and certain stockholders (previously filed as an exhibit to the Company's July 12, 1999 Registration Statement of Form S-3 and incorporated herein by reference). 10.32 Registration Rights Agreement, dated May 14, 1999, between the Company and certain stockholders (previously filed as an exhibit to the Company's July 12, 1999 Registration Statement of Form S-3 and incorporated herein by reference). 10.33 Registration Rights Agreement, dated May 18, 1999, between the Company and certain stockholders (previously filed as an exhibit to the Company's July 12, 1999 Registration Statement of Form S-3 and incorporated herein by reference). 10.34 Registration Rights Agreement, dated July 9, 1999, between the Company and certain stockholders (previously filed as an exhibit to the Company's July 12, 1999 Registration Statement of Form S-3 and incorporated herein by reference). 10.35 Warrant Agreement between the Company and First Security Van Kasper Inc. dated November 8, 1999 (previously filed as an exhibit to the Company's November 10, 1999 Form 8-K and incorporated herein by reference). 10.36 Warrant issued by the Company to First Security Van Kasper Inc. (previously filed as an exhibit to the Company's November 10, 1999 Form 8-K and incorporated herein by reference). 10.37 Underwriting Agreement between the Company and First Security Van Kasper Inc. (previously filed as an exhibit to the Company's November 10, 1999 Form 8-K and incorporated herein by reference). 23.1 Consent of Arthur Andersen LLP, independent auditors. 27.1 Financial Data Schedule.
- ----------------- * Previously filed as an exhibit to the Company's Registration Statement on Form SB-2 (Registration No. 333-2500-D) and incorporated herein by reference. ** Previously filed as an exhibit to the Company's Registration Statement on Form S-3 (Registration No. 333-41625) and incorporated herein by reference. *** Previously filed as an exhibit to the Company's January 23, 1998 Form 8-K and incorporated herein by reference. + Management contract or compensatory plan or arrangement. EX-10.8 2 EMPLOYMENT AGREEMENT - WOMEN 1 EXHIBIT 10.8 BOLDER TECHNOLOGY CORPORATION KEY EMPLOYEE AGREEMENT FOR ROGER WARREN This Employment Agreement ("Agreement") is entered into as of the 17th day of September 1999, by and between Roger Warren ("Executive") and Bolder Technology Corporation, a Delaware corporation (the "Company"). WHEREAS, the Company desires to employ Executive to provide personal services to the Company, and wishes to provide Executive with certain compensation and benefits in return for his services; and WHEREAS, Executive wishes to be employed by the Company and provide personal services to the Company in return for certain compensation and benefits; NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, it is hereby agreed by and between the parties hereto as follows: 1. EMPLOYMENT BY THE COMPANY. 1.1 Subject to the terms set forth herein, the Company agrees to employ Executive in the position of President and Chief Executive Officer, and Executive hereby accepts such employment effective as of October 1, 1999 (the "Employment Date"). As of January 1, 2000, Executive shall also become Chairman of the Board and shall serve as such so long as he is President and Chief Executive Officer. During the term of his employment with the Company, Executive will devote his best efforts and substantially all of his business time and attention (except for vacation periods as set forth herein and reasonable periods of illness or other incapacities permitted by the Company's general employment policies) to the business of the Company. 1.2 Executive shall serve in an executive capacity and shall perform such duties as are customarily associated with his then current title, consistent with the Bylaws of the Company and as required by the Company's Board of Directors (the "Board"). 1.3 The employment relationship between the parties shall also be governed by the general employment policies and practices of the Company, including those relating to protection of confidential information and assignment of inventions, except that when the terms of this Agreement differ from or are in conflict with the Company's general employment policies or practices, this Agreement shall control. 2 2. COMPENSATION. 2.1 SALARY. Executive shall receive for services to be rendered hereunder an annualized base salary of $100,000 during the first year of this Agreement, $125,000 during the second year of this Agreement and $150,000 during the third year of this Agreement. Such salary shall be payable on the Company's payroll schedule. 2.2 DISCRETIONARY BONUS. Executive will be eligible for a discretionary bonus, in an amount of up to 80% of his base salary for the year for which the bonus is being paid. The bonus will be payable upon achievement of criteria determined by the Company's Board of Directors. The Board of Directors shall determine in its sole discretion whether such criteria have been met. . For the quarter ending December 31, 1999, Executive shall receive a bonus of $15,000. 2.3 STOCK OPTIONS. On the Employment Date, the Company shall grant Executive five stock options as follows:
Exercise Option Shares Price Vesting Term Type Post-Termination Exercise - ------ ------ --------- ------- ---- ---- ------------------------- 1. 150,000 FMV Vested immediately 10 years ISO/NSO 12 months for death or disability 3 months for all other terminations - ----------------------------------------------------------------------------------------------------------------- 2. 150,000 FMV Vested pro rata 10 years ISO/NSO 12 months for death or monthly over 36 months disability 3 months for all other terminations - ----------------------------------------------------------------------------------------------------------------- 3. 150,000 FMV Vested pro rata 10 years ISO/NSO 24 months following any monthly over 36 months termination - ----------------------------------------------------------------------------------------------------------------- 4. 150,000 25% of FMV Vested pro rata 10 years NSO Exerciseable for full 10 monthly over 36 months year term, regardless of termination - ----------------------------------------------------------------------------------------------------------------- 5. 22,000 FMV Lump sum in 7 years, 10 years NSO 12 months for death or subject to disability performance-based acceleration 3 months for all other terminations - -----------------------------------------------------------------------------------------------------------------
2. 3 "FMV" means the Fair Market Value of the Company's Common Stock on the Employment Date, determined pursuant to the Company's Stock Option Plan. Options No. 1, 2 and 3 will be incentive stock options to the extent permitted under the Internal Revenue Code. Each option will be evidenced by an option agreement in the form attached as Exhibits A, B, C, D, and E. As more fully set forth in such Exhibits, Options 1, 2, 3, 4 and 5 will each become fully vested and exercisable in the event of a "Sale of the Company", as defined below. Option 5 shall vest seven years from the date of grant, subject to acceleration upon achievement of performance objectives to be established at the beginning of each year by the Company's Board of Directors. A similar option shall be granted at the beginning of each of years two and three under this Agreement, and will be subject to accelerated vesting based upon performance criteria defined by the Board of Directors for such year. Executive shall retain all previously granted director options, which shall continue to vest in accordance with their terms. 2.4 STANDARD COMPANY BENEFITS. Executive shall be entitled to all rights and benefits for which he is eligible under the terms and conditions of the standard Company benefits and compensation practices which may be in effect from time to time and provided by the Company to its employees generally. 2.5 RELOCATION ALLOWANCE. The Company will pay Executive a lump sum relocation allowance of $50,000. The Company will also pay reasonable relocation expenses and temporary living expenses. 2.6 SPECIAL BONUS UPON SALE OF COMPANY. If, during the term of this Agreement, the Company consummates the Sale of the Company, Executive will be entitled to receive a special bonus in an amount equal to one percent (1%) of the Equity Value of the Company minus Executive's Option Value. For purposes of this Section 2.6: (i) "Sale of the Company" means a sale of all or substantially all of the Company's assets, or a merger of the Company with or into another company if, as a result of such merger, the holders of the Company's voting securities immediately prior to the closing of such transaction own less than fifty percent of the voting securities of the surviving company in such merger. (ii) "Equity Value" means the value of all cash, securities and other consideration received by the holders of the Company's capital stock in connection with the Sale of the Company. The Equity Value shall include the consideration received or receivable by holders of the Company's common stock, preferred stock and vested stock options (less the exercise price of such options), but shall not include the value of consideration receivable upon exercise of unvested stock options. Any consideration in the form of marketable securities shall be valued at the closing sale price of such securities on the business day immediately prior to the closing date of the Sale of the Company. Any consideration in the form of 3. 4 securities for which there is no established trading market shall be valued at their fair market value as of the closing date by the Company's Board of Directors. (iii) "Option Value" shall mean the aggregate value of the Common Stock issuable upon exercise of Executive's stock options (based on the closing sale price of the Company's Common Stock as of the business day prior to the closing of the Sale of the Company), minus the aggregate exercise price of such stock options. The bonus shall be paid at the same time and in the same form as the consideration payable to the holders of the Company's capital stock. 2.7 ADDITIONAL PAYMENT. (a) Notwithstanding any other provision of this Agreement, if any portion of any payment under this Agreement, or under any other agreement with or plan of the Company or its affiliates (in the aggregate "Total Payments"), would constitute an "excess parachute payment", Executive shall be paid an additional amount (the "Gross-Up Payment") such that the net amount retained by Executive after deduction of any excise tax imposed under Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), any interest charges or penalties in respect of the imposition of such excise tax (but not any federal, state or local income tax, or employment tax ) on the Total Payments, and any federal, state and local income tax, employment tax, and excise tax upon the payment provided for by this Section shall be equal to the Total Payments. The Gross-Up Payment shall be made by the Company to the Executive as soon as practicable, but in no event beyond thirty (30) days from the later of (i) the date of the determination of the Gross-Up Payment or (ii) the date of the payments triggering the application of this Section 2.7(a) are made. For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to pay federal income tax and employment taxes at the highest marginal rate of federal income and employment taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive's domicile for income tax purposes on the date the Gross-Up Payment is made, net of the maximum reduction in federal income taxes that may be obtained from the deduction of such state and local taxes. (b) For purposes of this Agreement, the terms "excess parachute payment" and "parachute payments" shall have the meanings assigned to them in Section 280G of the Code and such "parachute payments" shall be valued as provided therein. Present value for purposes of this Agreement shall be calculated in accordance with Section 1274(b)(2) of the Code (or any successor provision). Within fifteen (15) days following the date of notice by the Company to the Executive, or of the Executive to the Company, of its or his belief that there is a payment or benefit due the Executive which will result in an excess parachute payment as defined in Section 280G of the Code, the Executive and the Company, at the Company's expense, shall obtain the opinion (which need not be unqualified) of nationally recognized tax counsel ("National Tax Counsel") selected by the Company's independent auditors and reasonably acceptable to the 4. 5 Executive (which may be regular outside counsel to the Company), which opinion sets forth (i) the amount of the Base Period Income, (ii) the amount and present value of Total Payments and (iii) the amount and present value of any excess parachute payments. As used in this Agreement, the term "Base Period Income" means an amount equal to the Executive's "annualized includable compensation for the base period" as defined in Section 280G(d)(1) of the Code. For purposes of such opinion, the value of any noncash benefits or any deferred payment or benefit shall be determined by the Company's independent auditors in accordance with the principles of Section 280G(d)(3) and (4) of the Code (or any successor provisions), which determination shall be evidenced in a certificate of such auditors addressed to the Company and the Executive. The opinion of National Tax Counsel shall be dated as of the date of determination and addressed to the Company and the Executive and shall be binding upon the Company and the Executive. If such National Tax Counsel so requests in connection with the opinion required by this paragraph (b) of Section 2.7, the Executive and the Company shall obtain the advice of a firm of recognized executive compensation consultants as to the reasonableness of any item of compensation to be received by the Executive solely with respect to its status under Section 280G of the Code and the regulations thereunder. Subject to the second sentence of Section 2.7(a) above, within five (5) days after the National Tax Counsel's opinion is received by the Company and the Executive, the Company shall pay (or cause to be paid) or distribute (or cause to distribute) to or for the benefit of Executive such amounts as are then due to Executive under this Agreement. (c) In the event that upon any audit by the Internal Revenue Service, or by a state or local taxing authority, of the Total Payments or Gross-Up Payment, a change is finally determined to be required in the amount of taxes paid by Executive, appropriate adjustments shall be made under this Agreement such that the net amount which is payable to the Executive after taking into account the provisions of Section 4999 of the Code shall reflect the intent of the parties as expressed in paragraph (a) above, in the manner determined by the National Tax Counsel. (d) The Company agrees to bear all costs associated with, and to indemnify and hold harmless, the National Tax Counsel of and from any and all claims, damages, and expenses resulting from or relating to its determinations pursuant to paragraphs (b) and (c) above, except for claims, damages or expenses resulting from the gross negligence or willful misconduct of such firm. 3. PROPRIETARY INFORMATION OBLIGATIONS. 3.1 AGREEMENT. Executive agrees to execute and abide by the Proprietary Information and Inventions Agreement attached hereto as Exhibit D. 3.2 REMEDIES. Executive's duties under the Proprietary Information and Inventions Agreement shall survive termination of his employment with the Company. Executive acknowledges that a remedy at law for any breach or threatened breach by him of the provisions of the Proprietary Information and Inventions Agreement would be inadequate, and he therefore agrees that the Company shall be entitled to injunctive relief in case of any such breach or threatened breach. 5. 6 4. OUTSIDE ACTIVITIES. 4.1 Except with the prior written consent of the Company's Board of Directors, Executive will not during the term of this Agreement undertake or engage in any other employment, occupation or business enterprise, other than ones in which Executive is a passive investor. Executive may engage in civic and not-for-profit activities so long as such activities do not materially interfere with the performance of his duties hereunder. 4.2 Except as permitted by Section 4.3, Executive agrees not to acquire, assume or participate in, directly or indirectly, any position, investment or interest known by him to be adverse or antagonistic to the Company, its business or prospects, financial or otherwise. 4.3 During the term of his employment by the Company, except on behalf of the Company, Executive will not directly or indirectly, whether as an officer, director, stockholder, partner, proprietor, associate, representative, consultant, or in any capacity whatsoever engage in, become financially interested in, be employed by or have any business connection with any other person, corporation, firm, partnership or other entity whatsoever which were known by him to compete directly with the Company, throughout the world, in any line of business engaged in (or planned to be engaged in) by the Company; provided, however, that anything above to the contrary notwithstanding, he may own, as a passive investor, securities of any competitor corporation, so long as his direct holdings in any one such corporation shall not in the aggregate constitute more than 1% of the voting stock of such corporation. 5. TERMINATION OF EMPLOYMENT. 5.1 TERMINATION WITHOUT CAUSE. (a) The Company shall have the right to terminate Executive's employment with the Company at any time without cause. (b) In the event Executive's employment is terminated without cause before November 1, 2002, the Company shall pay Executive an amount equivalent to his base salary for a period of 12 months. Such severance pay will be paid in 12 equal monthly installments. (c) In the event Executive's employment is terminated without cause on or after November 1, 2002, he will not be entitled to severance pay, pay in lieu of notice or any other such compensation, except as provided in Section 5.3(a) hereof. 5.2 TERMINATION FOR CAUSE. (a) The Company shall have the right to terminate Executive's employment with the Company at any time for cause. (b) "Cause" for termination shall mean: (a) indictment or conviction of any felony or of any crime involving dishonesty; (b) participation in any 6. 7 fraud against the Company; (c) intentional damage to any property of the Company; or (d) conduct by Executive which in the good faith and reasonable determination of the Board demonstrates gross unfitness to serve. (c) In the event Executive's employment is terminated at any time with cause, he will not be entitled to severance pay, pay in lieu of notice or any other such compensation. 5.3 VOLUNTARY OR MUTUAL TERMINATION. (a) Executive may voluntarily terminate his employment with the Company at any time, after which no further compensation will be paid to Executive. In order to allow the Company time to hire a replacement, Executive shall give the Company at least six months written notice of his resignation. The Company may elect to terminate Executive's employment at any time before the end of such notice period, provided that severance compensation equal to Executive's then current base salary shall be paid during any portion of the such notice period remaining after any such accelerated employment termination date. (b) In the event Executive voluntarily terminates his employment, he will not be entitled to severance pay, pay in lieu of notice or any other such compensation. 6. RESTRICTIVE COVENANT. In the event Executive voluntarily terminates his employment with the Company, or his employment is terminated for cause, then for one (1) year immediately following the termination date, Executive shall not, without first obtaining the prior written approval of the Company, directly or indirectly engage or prepare to engage, in any activities in competition with the Company, or accept employment or establish a business relationship with a business engaged in or preparing to engage in competition with the Company, in any geographical location in which the Company as of the termination date either conducts or plans to conduct business. 7. NONINTERFERENCE. While employed by the Company, and for three (3) years immediately following the Termination Date, Executive agrees not to interfere with the business of the Company by: (a) soliciting, attempting to solicit, inducing, or otherwise causing any employee of the Company to terminate his or her employment in order to become an employee, consultant or independent contractor to or for any competitor of the Company; or (b) directly or indirectly soliciting the business of any customer of the Company which at the time of termination or one year immediately prior thereto was listed on the Company's customer list. 7. 8 8. GENERAL PROVISIONS. 8.1 NOTICES. Any notices provided hereunder must be in writing and shall be deemed effective upon the earlier of personal delivery (including personal delivery by telex) or the third day after mailing by first class mail, to the Company at its primary office location and to Executive at his address as listed on the Company payroll. 8.2 SEVERABILITY. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provisions had never been contained herein. 8.3 WAIVER. If either party should waive any breach of any provisions of this Agreement, he or it shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement. 8.4 COMPLETE AGREEMENT. This Agreement and its Exhibits constitute the entire agreement between Executive and the Company and it is the complete, final, and exclusive embodiment of their agreement with regard to this subject matter. It is entered into without reliance on any promise or representation other than those expressly contained herein, and it cannot be modified or amended except in a writing signed by an officer of the Company. 8.5 COUNTERPARTS. This Agreement may be executed in separate counterparts, any one of which need not contain signatures of more than one party, but all of which taken together will constitute one and the same Agreement. 8.6 HEADINGS. The headings of the sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof nor to affect the meaning thereof. 8.7 SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive and the Company, and their respective successors, assigns, heirs, executors and administrators, except that Executive may not assign any of his duties hereunder and he may not assign any of his rights hereunder without the written consent of the Company, which shall not be withheld unreasonably. 8.8 DISPUTE RESOLUTION. The parties hereby agree that, in order to obtain prompt and expeditious resolution of any disputes under this Agreement, each claim, dispute or controversy of whatever nature, arising out of, in connection with, or in relation to the interpretation, performance or breach of this Agreement (or any other agreement contemplated by or related to this Agreement or any other agreement between the Company and Executive), including without limitation, any claim based on contract, tort or statute, or the arbitrability of any claim hereunder (a "Claim"), shall be settled, at the request of any party to this Agreement, by final and binding arbitration conducted in 8. 9 Denver, Colorado. All such Claims shall be settled by one arbitrator in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association. Each party hereto expressly consents to, and waives any future objection to, such forum and arbitration rules. Judgment upon any award may be entered by any state or federal court having jurisdiction thereof. Except as required by law (including, without limitation, the rules and regulations of the Securities and Exchange Commission and the Nasdaq Stock Market, if applicable), neither party nor the arbitrator shall disclose the existence, content, or results of any arbitration hereunder without the prior written consent of all parties. Adherence to this dispute resolution process shall not limit the right of the Company or Executive to obtain any provisional remedy, including without limitation, injunctive or similar relief from any court of competent jurisdiction as may be necessary to protect their respective rights and interests pending arbitration. Notwithstanding the foregoing sentence, this dispute resolution procedure is intended to be the exclusive method of resolving any Claims arising out of or relating to this Agreement. The arbitration procedures shall follow the substantive law of the State of Colorado, including the provisions of statutory law dealing with arbitration, as it may exist at the time of the demand for arbitration, insofar as said provisions are not in conflict with this Agreement and specifically excepting therefrom sections of any such statute dealing with discovery and sections requiring notice of the hearing date by registered or certified mail. If either party hereto brings any action to enforce his or its rights hereunder, the prevailing party in any such action shall be entitled to recover his or its reasonable attorneys' fees and costs incurred in connection with such action to the extent that the other party's claims or defenses are found to be frivolous. 8.9 CHOICE OF LAW. All questions concerning the construction, validity and interpretation of this Agreement will be governed by the law of the State of Colorado. IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first above written. BOLDER TECHNOLOGY CORPORATION By: ---------------------------- [NAME] [TITLE] Date: -------------------------- Accepted and agreed this ___ day of _________, 1999. - ---------------------------- Roger Warren 9. EX-10.9 3 NON-STATUTORY STOCK OPTION AGREEMENT 1 EXHIBIT 10.9 NONSTATUTORY STOCK OPTION Roger Warren, Optionee: Bolder Technologies Corporation (the "Company") has granted to you, the optionee named above, an option to purchase shares of the Common Stock of the Company ("Common Stock"). This option is not intended to qualify and will not be treated as an "incentive stock option" within the meaning of Section 422 of the Code. The details of your option are as follows: 1. TOTAL NUMBER OF SHARES SUBJECT TO THIS OPTION. The total number of shares of Common Stock subject to this option is twenty-two thousand (22,000). 2. VESTING. Subject to the limitations contained herein, all of the shares granted hereunder will vest (become exercisable) on September 30, 2006, subject to acceleration upon achievement of performance objectives to be established at the beginning of each year by the Company's Board of Directors, unless and until you cease to provide services to the Company for any reason. 3. EXERCISE PRICE AND METHOD OF PAYMENT. (a) EXERCISE PRICE. The exercise price of this option is $10.375 per share. (b) METHOD OF PAYMENT. Payment of the exercise price per share is due in full upon exercise of all or any part of each installment which has accrued to you. You may elect, to the extent permitted by applicable statutes and regulations, to make payment of the exercise price under one of the following alternatives: (i) Payment of the exercise price per share in cash (including check) at the time of exercise; or (ii) Payment pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board which, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds. 4. WHOLE SHARES. This option may not be exercised for any number of shares which would require the issuance of anything other than whole shares. 5. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary contained herein, this option may not be exercised unless the shares issuable upon exercise of this option are then registered under the Securities Act, or, if such shares are not then so registered, the Company has determined that such exercise and issuance would be exempt from the registration requirements of the Securities Act. 6. TERM. The term of this option commences on October 1, 1999, the date of grant, and expires on September 30, 2009 (the "Expiration Date"), unless this option expires sooner as 1. 2 set forth below. In no event may this option be exercised on or after the Expiration Date. Notwithstanding the foregoing, this option shall terminate three (3) months after the termination of your Continuous Status as an Employee, Director or Consultant for any reason and for no reason unless: (a) such termination of Continuous Status as an Employee, Director or Consultant is due to your disability (within the meaning of Section 422(c)(6) of the Code), in which event the option shall expire on the earlier of the Expiration Date set forth above or twelve (12) months following such termination of Continuous Status as an Employee, Director or Consultant; or (b) such termination of Continuous Status as an Employee, Director or Consultant is due to your death or your death occurs within three (3) months following your termination for any other reason, in which event the option shall expire on the earlier of the Expiration Date set forth above or twelve (12) months after your death; or (c) during any part of such three (3) month period the option is not exercisable solely because of the condition set forth in paragraph 5 above, in which event the option shall not expire until the earlier of the Expiration Date set forth above or until it shall have been exercisable for an aggregate period of three (3) months after the termination of Continuous Status as an Employee, Director or Consultant; or (d) exercise of the option within three (3) months after termination of your Continuous Status as an Employee, Director or Consultant would result in liability under Section 16(b) of the Exchange Act, in which case the option will expire on the earlier of (i) the Expiration Date set forth above, (ii) the tenth (10th) day after the last date upon which exercise would result in such liability or (iii) six (6) months and ten (10) days after the termination of your Continuous Status as an Employee, Director or Consultant. However, this option may be exercised following termination of Continuous Status as an Employee, Director or Consultant only as to that number of shares as to which it was exercisable on the date of termination of Continuous Status as an Employee, Director or Consultant under the provisions of paragraph 2 of this option. 7. EXERCISE. (a) This option may be exercised, to the extent specified above, by delivering a notice of exercise (in a form designated by the Company) together with the exercise price to the Secretary of the Company, or to such other person as the Company may designate, during regular business hours, together with such additional documents as the Company may then require pursuant to paragraph 7(b) below. (b) The Company may require you, as a condition of exercising this option: (i) to give written assurances satisfactory to the Company as to your knowledge and experience in financial and business matters, and that you are capable of evaluating the merits and risks of exercising this option; and (ii) to give written assurances satisfactory to the Company that you are acquiring the shares subject to the option for your own account and not with any present 2. 3 intention of selling or otherwise distributing such shares. The foregoing requirements, and any assurances given pursuant to such requirements, shall be inoperative if (x) the issuance of the shares upon the exercise of this option has been registered under a then currently effective registration statement under the Securities Act, or (y) as to any particular requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances under the then applicable securities laws. The Company may, upon advice of counsel to the Company, place legends on stock certificates issued upon exercise of this option as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the stock. (c) By exercising this option, you agree that as a precondition to the completion of any exercise of this option, the Company may require you to enter an arrangement providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason of: (i) the exercise of this option; (ii) the lapse of any substantial risk of forfeiture to which the shares are subject at the time of exercise; or (iii) the disposition of shares acquired upon such exercise. You also agree that any exercise of this option has not been completed and that the Company is under no obligation to issue any Common Stock to you until such an arrangement is established or the Company's tax withholding obligations are satisfied, as determined by the Company. 8. TRANSFERABILITY. This option is not transferable, except by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order satisfying the requirements of Rule 16b-3 of the Exchange Act (a "QDRO"), and is exercisable during your life only by you or a transferee pursuant to a QDRO. Notwithstanding the foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, you may designate a third party who, in the event of your death, shall thereafter be entitled to exercise this option. 9. ADJUSTMENTS UPON CHANGES IN STOCK. (a) If any change is made in the shares subject to this option without the receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by the Company), the option will be appropriately adjusted in the class(es) and number of shares and price per share of the stock subject thereto. Such adjustments shall be made by the Board of Directors of the Company, the determination of which shall be final, binding and conclusive. The conversion of any convertible securities of the Company shall not be treated as a "transaction not involving the receipt of consideration by the Company". (b) In the event of: (i) a dissolution, liquidation or sale of substantially all of the assets of the Company; (ii) a merger or consolidation in which the Company is not the surviving corporation; or (iii) a reverse merger in which the Company is the surviving corporation but the shares of Common Stock of the Company outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise, then to the extent permitted by applicable law: (x) any surviving corporation or an Affiliate of such surviving corporation shall 3. 4 assume this option or shall substitute a similar option therefor, or (y) this option shall continue in full force and effect. In the event any surviving corporation and its Affiliates refuse to assume or continue this option, or to substitute a similar option therefor, then the time during which this option may be exercised shall be accelerated and the option terminated if not exercised prior to such event. 10. OPTION NOT A SERVICE CONTRACT. This option is not an employment contract and nothing in this option shall be deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company, or of the Company to continue your employment with the Company. In addition, nothing in this option shall obligate the Company or any Affiliate, or their respective stockholders, Boards of Directors, officers or employees to continue any relationship which you might have as a Director or Consultant for the Company or Affiliate. 11. NOTICES. Any notices provided for in this option shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the address specified below or at such other address as you hereafter designate by written notice to the Company. 12. MISCELLANEOUS. The Board shall have the power to accelerate the time at which this stock option may first be exercised or the time during which this stock option or any part thereof will vest pursuant to section 2, notwithstanding the provisions in this stock option stating the time at which it may first be exercised or the time during which it will vest. Neither an Employee, a Director, a Consultant nor any person to whom this stock option is transferred in accordance with the terms hereof shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares subject to this stock option unless and until such person has satisfied all requirements for exercise of this stock option pursuant to the terms hereof. The Board of Directors at any time, and from time to time, may amend the terms of this stock option; provided, however, that the rights and obligations under this stock option shall not be impaired by any such amendment unless (i) the Company requests the consent of the person to whom this stock option was granted and (ii) such person consents in writing. 13. DEFINITIONS. (a) "AFFILIATE" means any parent corporation or subsidiary corporation, whether now or hereafter existing, as those terms are defined in Sections 424(e) and (f) respectively, of the Code. (b) "CODE" means the Internal Revenue Code of 1986, as amended. (c) "CONSULTANT" means any person, including an advisor, engaged by the Company or an Affiliate to render consulting services and who is compensated for such services, provided that the term "Consultant" shall not include Directors who are paid only directors' fee by the Company or who are not compensated by the Company for their services as Directors. (d) "CONTINUOUS STATUS AS AN EMPLOYEE, DIRECTOR OR CONSULTANT" means the employment or relationship as a Director or Consultant is not interrupted or terminated. The Board of Directors of the Company, in its sole discretion, may determine whether Continuous 4. 5 Status as an Employee, Director or Consultant shall be considered interrupted in the case of: (i) any leave of absence approved by the Board of Directors, including sick leave, military leave, or any other personal leave; or (ii) transfers between locations of the Company or between the Company, Affiliates or their successors. (e) "DIRECTOR" means a member of the Board of Directors of the Company. (f) "EMPLOYEE" means any person, including Officers and Directors, employed by the Company or any Affiliate of the Company. Neither service as a Director nor payment of a director's fee by the Company shall be sufficient to constitute "employment" by the Company. (g) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended. (h) "SECURITIES ACT" means the Securities Act of 1933, as amended. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.] 5. 6 Dated the 1st day of October, 1999. Very truly yours, BOLDER TECHNOLOGIES CORPORATION By: ----------------------------- Name: Title: ATTACHMENTS: Notice of Exercise 6. 7 The undersigned: 1. Acknowledges receipt of the foregoing option and understands that all rights and liabilities with respect to this option are set forth in the option; and 2. Acknowledges that as of the date of grant of this option, it sets forth the entire understanding between the undersigned optionee and the Company and its Affiliates regarding the acquisition of stock in the Company and supersedes all prior oral and written agreements on that subject with the exception of (i) the options previously granted and delivered to the undersigned under stock option plans of the Company, and (ii) the following agreements only: None ------------------------ (Initial) Other: ------------------------ ------------------------ ------------------------ ------------------------------------ OPTIONEE Address: ------------------------------------ ------------------------------------ 7. EX-10.10 4 NON-STATUTORY STOCK OPTION AGREEMENT 1 EXHIBIT 10.10 NONSTATUTORY STOCK OPTION Roger Warren, Optionee: Bolder Technologies Corporation (the "Company") has granted to you, the optionee named above, an option to purchase shares of the Common Stock of the Company ("Common Stock"). This option is not intended to qualify and will not be treated as an "incentive stock option" within the meaning of Section 422 of the Code. The details of your option are as follows: 1. TOTAL NUMBER OF SHARES SUBJECT TO THIS OPTION. The total number of shares of Common Stock subject to this option is one hundred fifty thousand (150,000). 2. VESTING. Subject to the limitations contained herein, 1/36th of the shares will vest (become exercisable) on first day of each month hereafter until either (i) you cease to provide services to the Company for any reason, or (ii) this option becomes fully vested. 3. EXERCISE PRICE AND METHOD OF PAYMENT. (a) EXERCISE PRICE. The exercise price of this option is $2.594 per share. (b) METHOD OF PAYMENT. Payment of the exercise price per share is due in full upon exercise of all or any part of each installment which has accrued to you. You may elect, to the extent permitted by applicable statutes and regulations, to make payment of the exercise price under one of the following alternatives: (i) Payment of the exercise price per share in cash (including check) at the time of exercise; or (ii) Payment pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board which, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds. 4. WHOLE SHARES. This option may not be exercised for any number of shares which would require the issuance of anything other than whole shares. 5. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary contained herein, this option may not be exercised unless the shares issuable upon exercise of this option are then registered under the Securities Act, or, if such shares are not then so registered, the Company has determined that such exercise and issuance would be exempt from the registration requirements of the Securities Act. 6. TERM. The term of this option commences on October 1, 1999, the date of grant, and expires on September 30, 2009 (the "Expiration Date"), regardless of any termination of your Continuous Status as an Employee, Director or Consultant for any reason and for no reason. In no event may this option be exercised on or after the Expiration Date. 1. 2 7. EXERCISE. (a) This option may be exercised, to the extent specified above, by delivering a notice of exercise (in a form designated by the Company) together with the exercise price to the Secretary of the Company, or to such other person as the Company may designate, during regular business hours, together with such additional documents as the Company may then require pursuant to paragraph 7(b) below. (b) The Company may require you, as a condition of exercising this option: (i) to give written assurances satisfactory to the Company as to your knowledge and experience in financial and business matters, and that you are capable of evaluating the merits and risks of exercising this option; and (ii) to give written assurances satisfactory to the Company that you are acquiring the shares subject to the option for your own account and not with any present intention of selling or otherwise distributing such shares. The foregoing requirements, and any assurances given pursuant to such requirements, shall be inoperative if (x) the issuance of the shares upon the exercise of this option has been registered under a then currently effective registration statement under the Securities Act, or (y) as to any particular requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances under the then applicable securities laws. The Company may, upon advice of counsel to the Company, place legends on stock certificates issued upon exercise of this option as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the stock. (c) By exercising this option, you agree that as a precondition to the completion of any exercise of this option, the Company may require you to enter an arrangement providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason of: (i) the exercise of this option; (ii) the lapse of any substantial risk of forfeiture to which the shares are subject at the time of exercise; or (iii) the disposition of shares acquired upon such exercise. You also agree that any exercise of this option has not been completed and that the Company is under no obligation to issue any Common Stock to you until such an arrangement is established or the Company's tax withholding obligations are satisfied, as determined by the Company. 8. TRANSFERABILITY. This option is not transferable, except by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order satisfying the requirements of Rule 16b-3 of the Exchange Act (a "QDRO"), and is exercisable during your life only by you or a transferee pursuant to a QDRO. Notwithstanding the foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, you may designate a third party who, in the event of your death, shall thereafter be entitled to exercise this option. 9. ADJUSTMENTS UPON CHANGES IN STOCK. (a) If any change is made in the shares subject to this option without the receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by the Company), the option will be 9. 3 appropriately adjusted in the class(es) and number of shares and price per share of the stock subject thereto. Such adjustments shall be made by the Board of Directors of the Company, the determination of which shall be final, binding and conclusive. The conversion of any convertible securities of the Company shall not be treated as a "transaction not involving the receipt of consideration by the Company". (b) In the event of: (i) a dissolution, liquidation or sale of substantially all of the assets of the Company; (ii) a merger or consolidation in which the Company is not the surviving corporation; or (iii) a reverse merger in which the Company is the surviving corporation but the shares of Common Stock of the Company outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise, then to the extent permitted by applicable law: (x) any surviving corporation or an Affiliate of such surviving corporation shall assume this option or shall substitute a similar option therefor, or (y) this option shall continue in full force and effect. In the event any surviving corporation and its Affiliates refuse to assume or continue this option, or to substitute a similar option therefor, then the time during which this option may be exercised shall be accelerated and the option terminated if not exercised prior to such event. 10. OPTION NOT A SERVICE CONTRACT. This option is not an employment contract and nothing in this option shall be deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company, or of the Company to continue your employment with the Company. In addition, nothing in this option shall obligate the Company or any Affiliate, or their respective stockholders, Boards of Directors, officers or employees to continue any relationship which you might have as a Director or Consultant for the Company or Affiliate. 11. NOTICES. Any notices provided for in this option shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the address specified below or at such other address as you hereafter designate by written notice to the Company. 12. MISCELLANEOUS. The Board shall have the power to accelerate the time at which this stock option may first be exercised or the time during which this stock option or any part thereof will vest pursuant to section 2, notwithstanding the provisions in this stock option stating the time at which it may first be exercised or the time during which it will vest. Neither an Employee, a Director, a Consultant nor any person to whom this stock option is transferred in accordance with the terms hereof shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares subject to this stock option unless and until such person has satisfied all requirements for exercise of this stock option pursuant to the terms hereof. The Board of Directors at any time, and from time to time, may amend the terms of this stock option; provided, however, that the rights and obligations under this stock option shall not be impaired by any such amendment unless (i) the Company requests the consent of the person to whom this stock option was granted and (ii) such person consents in writing. 3. 4 13. DEFINITIONS. (a) "AFFILIATE" means any parent corporation or subsidiary corporation, whether now or hereafter existing, as those terms are defined in Sections 424(e) and (f) respectively, of the Code. (b) "CODE" means the Internal Revenue Code of 1986, as amended. (c) "CONSULTANT" means any person, including an advisor, engaged by the Company or an Affiliate to render consulting services and who is compensated for such services, provided that the term "Consultant" shall not include Directors who are paid only directors' fee by the Company or who are not compensated by the Company for their services as Directors. (d) "CONTINUOUS STATUS AS AN EMPLOYEE, DIRECTOR OR CONSULTANT" means the employment or relationship as a Director or Consultant is not interrupted or terminated. The Board of Directors of the Company, in its sole discretion, may determine whether Continuous Status as an Employee, Director or Consultant shall be considered interrupted in the case of: (i) any leave of absence approved by the Board of Directors, including sick leave, military leave, or any other personal leave; or (ii) transfers between locations of the Company or between the Company, Affiliates or their successors. (e) "DIRECTOR" means a member of the Board of Directors of the Company. (f) "EMPLOYEE" means any person, including Officers and Directors, employed by the Company or any Affiliate of the Company. Neither service as a Director nor payment of a director's fee by the Company shall be sufficient to constitute "employment" by the Company. (g) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended. (h) "SECURITIES ACT" means the Securities Act of 1933, as amended. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.] 4. 5 Dated the 1st day of October, 1999. Very truly yours, BOLDER TECHNOLOGIES CORPORATION By: ------------------------------ Name: Title: ATTACHMENTS: Notice of Exercise 5. 6 The undersigned: 1. Acknowledges receipt of the foregoing option and understands that all rights and liabilities with respect to this option are set forth in the option; and 2. Acknowledges that as of the date of grant of this option, it sets forth the entire understanding between the undersigned optionee and the Company and its Affiliates regarding the acquisition of stock in the Company and supersedes all prior oral and written agreements on that subject with the exception of (i) the options previously granted and delivered to the undersigned under stock option plans of the Company, and (ii) the following agreements only: None --------------------------- (Initial) Other: ------------------------------------- ------------------------------------- ------------------------------------- ------------------------------------- OPTIONEE Address: ------------------------------------- ------------------------------------- 6. EX-10.11 5 NON-STATUTORY STOCK OPTION AGREEMENT 1 EXHIBIT 10.11 NONSTATUTORY STOCK OPTION Roger Warren, Optionee: Bolder Technologies Corporation (the "Company") has granted to you, the optionee named above, an option to purchase shares of the Common Stock of the Company ("Common Stock"). This option is not intended to qualify and will not be treated as an "incentive stock option" within the meaning of Section 422 of the Code. The details of your option are as follows: 1. TOTAL NUMBER OF SHARES SUBJECT TO THIS OPTION. The total number of shares of Common Stock subject to this option is one hundred fifty thousand (150,000). 2. VESTING. Subject to the limitations contained herein, 1/36th of the shares will vest (become exercisable) on the first day of each month hereafter until either (i) you cease to provide services to the Company for any reason, or (ii) this option becomes fully vested. 3. EXERCISE PRICE AND METHOD OF PAYMENT. (a) EXERCISE PRICE. The exercise price of this option is $10.375 per share. (b) METHOD OF PAYMENT. Payment of the exercise price per share is due in full upon exercise of all or any part of each installment which has accrued to you. You may elect, to the extent permitted by applicable statutes and regulations, to make payment of the exercise price under one of the following alternatives: (i) Payment of the exercise price per share in cash (including check) at the time of exercise; or (ii) Payment pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board which, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds. 4. WHOLE SHARES. This option may not be exercised for any number of shares which would require the issuance of anything other than whole shares. 5. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary contained herein, this option may not be exercised unless the shares issuable upon exercise of this option are then registered under the Securities Act, or, if such shares are not then so registered, the Company has determined that such exercise and issuance would be exempt from the registration requirements of the Securities Act. 6. TERM. The term of this option commences on October 1, 1999, the date of grant, and expires on September 30, 2009 (the "Expiration Date"), unless this option expires sooner as set forth below. In no event may this option be exercised on or after the Expiration Date. Notwithstanding the foregoing, this option shall terminate twenty-four (24) months following 1. 2 any termination of your Continuous Status as an Employee, Director or Consultant for any reason and for no reason. However, this option may be exercised following termination of Continuous Status as an Employee, Director or Consultant only as to that number of shares as to which it was exercisable on the date of termination of Continuous Status as an Employee, Director or Consultant under the provisions of paragraph 2 of this option. 7. EXERCISE. (a) This option may be exercised, to the extent specified above, by delivering a notice of exercise (in a form designated by the Company) together with the exercise price to the Secretary of the Company, or to such other person as the Company may designate, during regular business hours, together with such additional documents as the Company may then require pursuant to paragraph 7(b) below. (b) The Company may require you, as a condition of exercising this option: (i) to give written assurances satisfactory to the Company as to your knowledge and experience in financial and business matters, and that you are capable of evaluating the merits and risks of exercising this option; and (ii) to give written assurances satisfactory to the Company that you are acquiring the shares subject to the option for your own account and not with any present intention of selling or otherwise distributing such shares. The foregoing requirements, and any assurances given pursuant to such requirements, shall be inoperative if (x) the issuance of the shares upon the exercise of this option has been registered under a then currently effective registration statement under the Securities Act, or (y) as to any particular requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances under the then applicable securities laws. The Company may, upon advice of counsel to the Company, place legends on stock certificates issued upon exercise of this option as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the stock. (c) By exercising this option, you agree that as a precondition to the completion of any exercise of this option, the Company may require you to enter an arrangement providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason of: (i) the exercise of this option; (ii) the lapse of any substantial risk of forfeiture to which the shares are subject at the time of exercise; or (iii) the disposition of shares acquired upon such exercise. You also agree that any exercise of this option has not been completed and that the Company is under no obligation to issue any Common Stock to you until such an arrangement is established or the Company's tax withholding obligations are satisfied, as determined by the Company. 8. TRANSFERABILITY. This option is not transferable, except by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order satisfying the requirements of Rule 16b-3 of the Exchange Act (a "QDRO"), and is exercisable during your life only by you or a transferee pursuant to a QDRO. Notwithstanding the foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, you may designate a third party who, in the event of your death, shall thereafter be entitled to exercise this option. 2. 3 9. ADJUSTMENTS UPON CHANGES IN STOCK. (a) If any change is made in the shares subject to this option without the receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by the Company), the option will be appropriately adjusted in the class(es) and number of shares and price per share of the stock subject thereto. Such adjustments shall be made by the Board of Directors of the Company, the determination of which shall be final, binding and conclusive. The conversion of any convertible securities of the Company shall not be treated as a "transaction not involving the receipt of consideration by the Company". (b) In the event of: (i) a dissolution, liquidation or sale of substantially all of the assets of the Company; (ii) a merger or consolidation in which the Company is not the surviving corporation; or (iii) a reverse merger in which the Company is the surviving corporation but the shares of Common Stock of the Company outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise, then to the extent permitted by applicable law: (x) any surviving corporation or an Affiliate of such surviving corporation shall assume this option or shall substitute a similar option therefor, or (y) this option shall continue in full force and effect. In the event any surviving corporation and its Affiliates refuse to assume or continue this option, or to substitute a similar option therefor, then the time during which this option may be exercised shall be accelerated and the option terminated if not exercised prior to such event. 10. OPTION NOT A SERVICE CONTRACT. This option is not an employment contract and nothing in this option shall be deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company, or of the Company to continue your employment with the Company. In addition, nothing in this option shall obligate the Company or any Affiliate, or their respective stockholders, Boards of Directors, officers or employees to continue any relationship which you might have as a Director or Consultant for the Company or Affiliate. 11. NOTICES. Any notices provided for in this option shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the address specified below or at such other address as you hereafter designate by written notice to the Company. 12. MISCELLANEOUS. The Board shall have the power to accelerate the time at which this stock option may first be exercised or the time during which this stock option or any part thereof will vest pursuant to section 2, notwithstanding the provisions in this stock option stating the time at which it may first be exercised or the time during which it will vest. Neither an Employee, a Director, a Consultant nor any person to whom this stock option is transferred in accordance with the terms hereof shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares subject to this stock option unless and until such person has satisfied all requirements for exercise of this stock option pursuant to the terms hereof. The 3. 4 Board of Directors at any time, and from time to time, may amend the terms of this stock option; provided, however, that the rights and obligations under this stock option shall not be impaired by any such amendment unless (i) the Company requests the consent of the person to whom this stock option was granted and (ii) such person consents in writing. 13. DEFINITIONS. (a) "AFFILIATE" means any parent corporation or subsidiary corporation, whether now or hereafter existing, as those terms are defined in Sections 424(e) and (f) respectively, of the Code. (b) "CODE" means the Internal Revenue Code of 1986, as amended. (c) "CONSULTANT" means any person, including an advisor, engaged by the Company or an Affiliate to render consulting services and who is compensated for such services, provided that the term "Consultant" shall not include Directors who are paid only directors' fee by the Company or who are not compensated by the Company for their services as Directors. (d) "CONTINUOUS STATUS AS AN EMPLOYEE, DIRECTOR OR CONSULTANT" means the employment or relationship as a Director or Consultant is not interrupted or terminated. The Board of Directors of the Company, in its sole discretion, may determine whether Continuous Status as an Employee, Director or Consultant shall be considered interrupted in the case of: (i) any leave of absence approved by the Board of Directors, including sick leave, military leave, or any other personal leave; or (ii) transfers between locations of the Company or between the Company, Affiliates or their successors. (e) "DIRECTOR" means a member of the Board of Directors of the Company. (f) "EMPLOYEE" means any person, including Officers and Directors, employed by the Company or any Affiliate of the Company. Neither service as a Director nor payment of a director's fee by the Company shall be sufficient to constitute "employment" by the Company. (g) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended. (h) "SECURITIES ACT" means the Securities Act of 1933, as amended. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.] 4. 5 Dated the 1st day of October, 1999. Very truly yours, BOLDER TECHNOLOGIES CORPORATION By: ------------------------------ Name: Title: ATTACHMENTS: Notice of Exercise 5. 6 The undersigned: 1. Acknowledges receipt of the foregoing option and understands that all rights and liabilities with respect to this option are set forth in the option; and 2. Acknowledges that as of the date of grant of this option, it sets forth the entire understanding between the undersigned optionee and the Company and its Affiliates regarding the acquisition of stock in the Company and supersedes all prior oral and written agreements on that subject with the exception of (i) the options previously granted and delivered to the undersigned under stock option plans of the Company, and (ii) the following agreements only: None --------------------------- (Initial) Other: ------------------------------------- ------------------------------------- ------------------------------------- ------------------------------------- OPTIONEE Address: ------------------------------------- ------------------------------------- 6. EX-10.12 6 NON-STATUTORY STOCK OPTION AGREEMENT 1 EXHIBIT 10.12 NONSTATUTORY STOCK OPTION Roger Warren, Optionee: BOLDER Technologies Corporation (the "Company") has granted to you, the optionee named above, an option to purchase shares of the Common Stock of the Company ("Common Stock"). This option is not intended to qualify and will not be treated as an "incentive stock option" within the meaning of Section 422 of the Code. The details of your option are as follows: 1. TOTAL NUMBER OF SHARES SUBJECT TO THIS OPTION. The total number of shares of Common Stock subject to this option is two hundred sixty-three thousand eight hundred and fifty-eight (263,858). 2. VESTING. Subject to the limitations contained herein, one hundred forty-two thousand seven hundred and seventy-two (142,772) of the shares will vest (become exercisable) on October 1, 1999 and 1/36th of the remaining shares will vest on the first day of each month hereafter until either (i) you cease to provide services to the Company for any reason, or (ii) this option becomes fully vested. 3. EXERCISE PRICE AND METHOD OF PAYMENT. (a) EXERCISE PRICE. The exercise price of this option is $10.375 per share. (b) METHOD OF PAYMENT. Payment of the exercise price per share is due in full upon exercise of all or any part of each installment which has accrued to you. You may elect, to the extent permitted by applicable statutes and regulations, to make payment of the exercise price under one of the following alternatives: (i) Payment of the exercise price per share in cash (including check) at the time of exercise; or (ii) Payment pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board which, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds. 4. WHOLE SHARES. This option may not be exercised for any number of shares which would require the issuance of anything other than whole shares. 5. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary contained herein, this option may not be exercised unless the shares issuable upon exercise of this option are then registered under the Securities Act, or, if such shares are not then so registered, the Company has determined that such exercise and issuance would be exempt from the registration requirements of the Securities Act. 1. 2 6. TERM. The term of this option commences on October 1, 1999, the date of grant, and expires on September 30, 2009 (the "Expiration Date"), unless this option expires sooner as set forth below. In no event may this option be exercised on or after the Expiration Date. Notwithstanding the foregoing, this option shall terminate prior to the Expiration Date three (3) months after the termination of your Continuous Status as an Employee, Director or Consultant for any reason and for no reason unless: (a) such termination of Continuous Status as an Employee, Director or Consultant is due to your disability (within the meaning of Section 422(c)(6) of the Code), in which event the option shall expire on the earlier of the Expiration Date set forth above or twelve (12) months following such termination of Continuous Status as an Employee, Director or Consultant; or (b) such termination of Continuous Status as an Employee, Director or Consultant is due to your death or your death occurs within three (3) months following your termination for any other reason, in which event the option shall expire on the earlier of the Expiration Date set forth above or twelve (12) months after your death; or (c) during any part of such three (3) month period the option is not exercisable solely because of the condition set forth in paragraph 5 above, in which event the option shall not expire until the earlier of the Expiration Date set forth above or until it shall have been exercisable for an aggregate period of three (3) months after the termination of Continuous Status as an Employee, Director or Consultant; or (d) exercise of the option within three (3) months after termination of your Continuous Status as an Employee, Director or Consultant would result in liability under Section 16(b) of the Exchange Act, in which case the option will expire on the earlier of (i) the Expiration Date set forth above, (ii) the tenth (10th) day after the last date upon which exercise would result in such liability or (iii) six (6) months and ten (10) days after the termination of your Continuous Status as an Employee, Director or Consultant. However, this option may be exercised following termination of Continuous Status as an Employee, Director or Consultant only as to that number of shares as to which it was exercisable on the date of termination of Continuous Status as an Employee, Director or Consultant under the provisions of paragraph 2 of this option. 7. EXERCISE. (a) This option may be exercised, to the extent specified above, by delivering a notice of exercise (in a form designated by the Company) together with the exercise price to the Secretary of the Company, or to such other person as the Company may designate, during regular business hours, together with such additional documents as the Company may then require pursuant to paragraph 7(b) below. (b) The Company may require you, as a condition of exercising this option: (i) to give written assurances satisfactory to the Company as to your knowledge and experience in financial and business matters, and that you are capable of evaluating the merits and risks of 2. 3 exercising this option; and (ii) to give written assurances satisfactory to the Company that you are acquiring the shares subject to the option for your own account and not with any present intention of selling or otherwise distributing such shares. The foregoing requirements, and any assurances given pursuant to such requirements, shall be inoperative if (x) the issuance of the shares upon the exercise of this option has been registered under a then currently effective registration statement under the Securities Act, or (y) as to any particular requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances under the then applicable securities laws. The Company may, upon advice of counsel to the Company, place legends on stock certificates issued upon exercise of this option as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the stock. (c) By exercising this option, you agree that as a precondition to the completion of any exercise of this option, the Company may require you to enter an arrangement providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason of: (i) the exercise of this option; (ii) the lapse of any substantial risk of forfeiture to which the shares are subject at the time of exercise; or (iii) the disposition of shares acquired upon such exercise. You also agree that any exercise of this option has not been completed and that the Company is under no obligation to issue any Common Stock to you until such an arrangement is established or the Company's tax withholding obligations are satisfied, as determined by the Company. 8. TRANSFERABILITY. This option is not transferable, except by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order satisfying the requirements of Rule 16b-3 of the Exchange Act (a "QDRO"), and is exercisable during your life only by you or a transferee pursuant to a QDRO. Notwithstanding the foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, you may designate a third party who, in the event of your death, shall thereafter be entitled to exercise this option. 9. ADJUSTMENTS UPON CHANGES IN STOCK. (a) If any change is made in the shares subject to this option without the receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by the Company), the option will be appropriately adjusted in the class(es) and number of shares and price per share of the stock subject thereto. Such adjustments shall be made by the Board of Directors of the Company, the determination of which shall be final, binding and conclusive. The conversion of any convertible securities of the Company shall not be treated as a "transaction not involving the receipt of consideration by the Company". (b) In the event of: (i) a dissolution, liquidation or sale of substantially all of the assets of the Company; (ii) a merger or consolidation in which the Company is not the surviving corporation; or (iii) a reverse merger in which the Company is the surviving corporation but the shares of Common Stock of the Company outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of 3. 4 securities, cash or otherwise, then to the extent permitted by applicable law: (x) any surviving corporation or an Affiliate of such surviving corporation shall assume this option or shall substitute a similar option therefor, or (y) this option shall continue in full force and effect. In the event any surviving corporation and its Affiliates refuse to assume or continue this option, or to substitute a similar option therefor, then the time during which this option may be exercised shall be accelerated and the option terminated if not exercised prior to such event. 10. OPTION NOT A SERVICE CONTRACT. This option is not an employment contract and nothing in this option shall be deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company, or of the Company to continue your employment with the Company. In addition, nothing in this option shall obligate the Company or any Affiliate, or their respective stockholders, Boards of Directors, officers or employees to continue any relationship which you might have as a Director or Consultant for the Company or Affiliate. 11. NOTICES. Any notices provided for in this option shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the address specified below or at such other address as you hereafter designate by written notice to the Company. 12. MISCELLANEOUS. The Board shall have the power to accelerate the time at which this stock option may first be exercised or the time during which this stock option or any part thereof will vest pursuant to section 2, notwithstanding the provisions in this stock option stating the time at which it may first be exercised or the time during which it will vest. Neither an Employee, a Director, a Consultant nor any person to whom this stock option is transferred in accordance with the terms hereof shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares subject to this stock option unless and until such person has satisfied all requirements for exercise of this stock option pursuant to the terms hereof. The Board of Directors at any time, and from time to time, may amend the terms of this stock option; provided, however, that the rights and obligations under this stock option shall not be impaired by any such amendment unless (i) the Company requests the consent of the person to whom this stock option was granted and (ii) such person consents in writing. 13. DEFINITIONS. (a) "AFFILIATE" means any parent corporation or subsidiary corporation, whether now or hereafter existing, as those terms are defined in Sections 424(e) and (f) respectively, of the Code. (b) "CODE" means the Internal Revenue Code of 1986, as amended. (c) "CONSULTANT" means any person, including an advisor, engaged by the Company or an Affiliate to render consulting services and who is compensated for such services, provided that the term "Consultant" shall not include Directors who are paid only directors' fee by the Company or who are not compensated by the Company for their services as Directors. 4. 5 (d) "CONTINUOUS STATUS AS AN EMPLOYEE, DIRECTOR OR CONSULTANT" means the employment or relationship as a Director or Consultant is not interrupted or terminated. The Board of Directors of the Company, in its sole discretion, may determine whether Continuous Status as an Employee, Director or Consultant shall be considered interrupted in the case of: (i) any leave of absence approved by the Board of Directors, including sick leave, military leave, or any other personal leave; or (ii) transfers between locations of the Company or between the Company, Affiliates or their successors. (e) "DIRECTOR" means a member of the Board of Directors of the Company. (f) "EMPLOYEE" means any person, including Officers and Directors, employed by the Company or any Affiliate of the Company. Neither service as a Director nor payment of a director's fee by the Company shall be sufficient to constitute "employment" by the Company. (g) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended. (h) "SECURITIES ACT" means the Securities Act of 1933, as amended. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.] 5. 6 Dated the 1st day of October, 1999. Very truly yours, BOLDER TECHNOLOGIES CORPORATION By: ------------------------------ Name: Title: ATTACHMENTS: Notice of Exercise 6. 7 The undersigned: 1. Acknowledges receipt of the foregoing option and understands that all rights and liabilities with respect to this option are set forth in the option; and 2. Acknowledges that as of the date of grant of this option, it sets forth the entire understanding between the undersigned optionee and the Company and its Affiliates regarding the acquisition of stock in the Company and supersedes all prior oral and written agreements on that subject with the exception of (i) the options previously granted and delivered to the undersigned under stock option plans of the Company, and (ii) the following agreements only: None --------------------------- (Initial) Other: ------------------------------------- ------------------------------------- ------------------------------------- ------------------------------------- OPTIONEE Address: ------------------------------------- ------------------------------------- 6. EX-10.13 7 INCENTIVE STOCK OPTION AGREEMENT 1 EXHIBIT 10.13 INCENTIVE STOCK OPTION Roger Warren, Optionee: BOLDER Technologies Corporation (the "Company"), pursuant to its 1996 Equity Incentive Plan (as amended from time to time, the "Plan"), has granted to you, the optionee named above, an option to purchase shares of the common stock of the Company ("Common Stock"). This option is intended to qualify as an "incentive stock option" within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"). The grant hereunder is in connection with and in furtherance of the Company's compensatory benefit plan for participation of the Company's employees (including officers). Defined terms not explicitly defined in this agreement but defined in the Plan shall have the same definitions as in the Plan. The details of your option are as follows: 1. TOTAL NUMBER OF SHARES SUBJECT TO THIS OPTION. The total number of shares of Common Stock subject to this option is thirty six thousand one hundred and forty-two (36,142). 2. VESTING. Subject to the limitations contained herein, seven thousand two hundred and twenty-eight (7,228) shares will vest (become exercisable) on October 1, 1999 and 1/36th of the remaining shares will vest (become exercisable) on the first day of each month hereafter until either (i) you cease to provide services to the Company for any reason, or (ii) this option becomes fully vested. 3. EXERCISE PRICE AND METHOD OF PAYMENT. (a) EXERCISE PRICE. The exercise price of this option is $10.375 per share, being not less than the fair market value of the Common Stock on the date of grant of this option. (b) METHOD OF PAYMENT. Payment of the exercise price per share is due in full upon exercise of all or any part of each installment which has accrued to you. You may elect, to the extent permitted by applicable statutes and regulations, to make payment of the exercise price under one of the following alternatives: (i) Payment of the exercise price per share in cash (including check) at the time of exercise; or (ii) Payment pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board which, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds. 4. WHOLE SHARES. This option may not be exercised for any number of shares which would require the issuance of anything other than whole shares. 1. 2 5. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary contained herein, this option may not be exercised unless the shares issuable upon exercise of this option are then registered under the Act or, if such shares are not then so registered, the Company has determined that such exercise and issuance would be exempt from the registration requirements of the Act. 6. TERM. The term of this option commences on October 1, 1999, the date of grant, and expires on September 30, 2009 (the "Expiration Date," which date shall be no more than ten (10) years from the date this option is granted), unless this option expires sooner as set forth below or in the Plan. In no event may this option be exercised on or after the Expiration Date. Notwithstanding the foregoing, this option shall terminate prior to the Expiration Date three (3) months after the termination of your Continuous Status as an Employee, Director or Consultant unless one of the following circumstances exists: (a) Your termination of Continuous Status as an Employee, Director or Consultant is due to your disability (within the meaning of Section 422(c)(6) of the Code). This option will then expire on the earlier of the Expiration Date set forth above or twelve (12) months following such termination of Continuous Status as an Employee, Director or Consultant. (b) Your termination of Continuous Status as an Employee, Director or Consultant is due to your death or your death occurs within three (3) months following your termination of Continuous Status as an Employee, Director or Consultant for any other reason. This option will then expire on the earlier of the Expiration Date set forth above or twelve (12) months after your death. (c) If during any part of such three (3) month period you may not exercise your option solely because of the condition set forth in paragraph 5 above, then your option will not expire until the earlier of the Expiration Date set forth above or until this option shall have been exercisable for an aggregate period of three (3) months after your termination of Continuous Status as an Employee, Director or Consultant. (d) If your exercise of the option within three (3) months after termination of your Continuous Status as an Employee, Director or Consultant would result in liability under section 16(b) of the Securities Exchange Act of 1934, then your option will expire on the earlier of (i) the Expiration Date set forth above, (ii) the tenth (10th) day after the last date upon which exercise would result in such liability or (iii) six (6) months and ten (10) days after the termination of your Continuous Status as an Employee, Director or Consultant. However, this option may be exercised following termination of Continuous Status as an Employee, Director or Consultant only as to that number of shares as to which it was exercisable on the date of termination of Continuous Status of an Employee, Director or Consultant under the provisions of paragraph 2 of this option. In order to obtain the federal income tax advantages associated with an "incentive stock option," the Code requires that at all times beginning on the date of grant of the option and ending on the day three (3) months before the date of the option's exercise, you must be an employee of the Company or an Affiliate of the Company, except in the event of your death or 2. 3 permanent and total disability. The Company has provided for continued vesting or extended exercisability of your option under certain circumstances for your benefit, but cannot guarantee that your option will necessarily be treated as an "incentive stock option" if you provide services to the Company or an Affiliate of the Company as a consultant or exercise your option more than three (3) months after the date your employment with the Company and all Affiliates of the Company terminates. 7. EXERCISE. (a) This option may be exercised, to the extent specified above, by delivering a notice of exercise (in a form designated by the Company) together with the exercise price to the Secretary of the Company, or to such other person as the Company may designate, during regular business hours, together with such additional documents as the Company may then require pursuant to subsection 13(e) of the Plan. (b) By exercising this option you agree that: (i) as a precondition to the completion of any exercise of this option, the Company may require you to enter an arrangement providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason of (A) the exercise of this option; (B) the lapse of any substantial risk of forfeiture to which the shares are subject at the time of exercise; or (C) the disposition of shares acquired upon such exercise; and (ii) you will notify the Company in writing within fifteen (15) days after the date of any disposition of any of the shares of the Common Stock issued upon exercise of this option that occurs within two (2) years after the date of this option grant or within one (1) year after such shares of Common Stock are transferred upon exercise of this option. 8. TRANSFERABILITY. This option is not transferable, except by will or by the laws of descent and distribution, and is exercisable during your life only by you. Notwithstanding the foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, you may designate a third party who, in the event of your death, shall thereafter be entitled to exercise this option. 9. OPTION NOT A SERVICE CONTRACT. This option is not an employment contract and nothing in this option shall be deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company, or of the Company to continue your employment with the Company. In addition, nothing in this option shall obligate the Company or any Affiliate of the Company, or their respective stockholders, Board of Directors, officers or employees to continue any relationship which you might have as a Director or Consultant for the Company or Affiliate of the Company. 10. NOTICES. Any notices provided for in this option or the Plan shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the address specified below or at such other address as you hereafter designate by written notice to the Company. 3. 4 11. GOVERNING PLAN DOCUMENT. This option is subject to all the provisions of the Plan, a copy of which is attached hereto and its provisions are hereby made a part of this option, including without limitation the provisions of Section 6 of the Plan relating to option provisions, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of this option and those of the Plan, the provisions of the Plan shall control. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.] 4. 5 Dated the 1st day of October, 1999. Very truly yours, By: ------------------------------- Duly authorized on behalf of the Board of Directors ATTACHMENTS: Bolder Technologies Corporation 1996 Equity Incentive Plan, as amended Notice of Exercise 5. 6 The undersigned: (a) Acknowledges receipt of the foregoing option and the attachments referenced therein and understands that all rights and liabilities with respect to this option are set forth in the option and the Plan; and (b) Acknowledges that as of the date of grant of this option, it sets forth the entire understanding between the undersigned optionee and the Company and its Affiliates regarding the acquisition of stock in the Company and supersedes all prior oral and written agreements on that subject with the exception of (i) the options previously granted and delivered to the undersigned under stock option plans of the Company, and (ii) the following agreements only: None --------------------------- (Initial) Other: ------------------------------------- ------------------------------------- ------------------------------------- ------------------------------------- OPTIONEE Address: ------------------------------------- ------------------------------------- 6. EX-23.1 8 CONSENT OF ARTHUR ANDERSEN 1 EXHIBIT 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report included in this Annual Report on Form 10-K, into BOLDER Technologies Corporation's previously filed Registration Statement on Form S-3 (File No. 333-41625), Registration Statement on Form S-8 (File No. 333-20989), Registration Statement on Form S-8 (File No. 333-08968), Registration Statement on Form S-3 (File No. 333-82635), Registration Statement on Form S-3 (File No. 333-86235) and Registration Statement on Form S-3 (File No. 333-94077). /s/ Arthur Andersen LLP Denver, Colorado, March 29, 2000. EX-27.1 9 FINANCIAL DATA SCHEDULE
5 YEAR DEC-31-1999 JAN-01-1999 DEC-31-1999 17,651,373 4,978,850 1,833,261 (219,000) 1,656,539 26,371,733 24,658,878 (3,496,275) 48,113,877 6,652,436 8,858,831 0 15,653,939 14,578 19,146,201 48,113,877 1,859,992 2,029,316 5,551,178 5,566,697 16,076,886 219,000 1,307,317 (20,379,392) 0 (20,379,392) 0 0 0 (20,379,392) (1.97) 0
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