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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Enova Systems Inc (CE) | USOTC:ENVS | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.0001 | 0.00 | 01:00:00 |
[X]
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
[ ]
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
California
|
95-3056150
|
|
(State or Other Jurisdiction of
|
(I.R.S. Employer
|
|
Incorporation or Organization)
|
Identification Number)
|
Title of Each Class
|
Name of Each Exchange on Which Registered
|
|
Common Stock, no par value
|
None.
|
Large accelerated filer [ ]
|
Accelerated filer [ ]
|
Non-accelerated filer [ ]
(Do not check if a smaller reporting company)
|
Smaller reporting company [X]
|
PART I
|
|||
Item 1.
|
BUSINESS
|
1
|
|
Item 1A.
|
RISK FACTORS
|
6
|
|
Item 1B.
|
UNRESOLVED STAFF COMMENTS
|
9
|
|
Item 2.
|
PROPERTIES
|
9
|
|
Item 3.
|
LEGAL PROCEEDINGS
|
9
|
|
Item 4.
|
MINE SAFETY DISLOSURES
|
10
|
|
PART II
|
|||
Item 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
11
|
|
Item 6.
|
SELECTED FINANCIAL DATA
|
12
|
|
Item 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
12
|
|
Item 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
19
|
|
Item 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
20
|
|
Item 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
42
|
|
Item 9A.
|
CONTROLS AND PROCEDURES
|
42
|
|
Item 9B.
|
OTHER INFORMATION
|
43
|
|
PART III
|
|||
Item 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
43
|
|
Item 11.
|
EXECUTIVE COMPENSATION
|
45
|
|
Item 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
47
|
|
Item 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
48
|
|
Item 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
48
|
|
PART IV
|
|||
Item 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
|
Customer
|
Percent
|
|||
First Auto Works Group Corporation
|
76%
|
|||
Smith Electric Vehicles, N.A.
|
19%
|
•
|
First Auto Works (“FAW”)
- Enova continues to supply FAW drive systems for their hybrid buses. Since the 2008 Olympics in Beijing, Enova Systems and First Auto Works have deployed over 500 vehicles utilizing Enova’s pre-transmission hybrid drive system components. First Auto Works is one of China’s largest vehicle producers, manufacturing in excess of 1,000,000 vehicles annually. The Enova drive system is integrated and branded under the name of Jiefang CA6120URH hybrid. The Jiefang 40 ft. long hybrid city bus can carry up to 103 passengers and travel at a speeds of over 50 miles per hour. With the Enova hybrid system components, the Jiefang bus meets Euro III emission standards, consumes only 7.84 miles per gallon and achieves a reduction of 20 percent in harmful emissions.
|
•
|
Smith Electric Vehicles N.A. Inc. (“Smith”)
– Enova continues to supply Smith with electric drive system components. Smith has deployed several hundred vehicles utilizing Enova's electric drive system. Smith develops, produces and sells zero-emission commercial electric vehicles that are designed to be an alternative to traditional diesel trucks, providing higher efficiency and lower total cost of ownership. Smith has manufacturing facilities in Kansas City, Missouri, and outside of Newcastle, UK. Smith's vehicle designs leverage more than 80 years of market knowledge from selling and servicing electric vehicles in the United Kingdom. Smith produces the Newton and the Edison.
|
•
|
Providing a full product line of power management and power conversion, and supporting system integration
|
•
|
Providing products that allow the hardware to be software programmable and configurable
|
•
|
Offering a product line designed for the most advanced new fuel systems: electric, hybrid, fuel cell and solar power applications
|
•
|
Providing fully integrated, “drop-in” energy management and conversion system in “one box”
|
•
|
Offering systems with reduced footprint and weight, high functionality and low cost — characteristics essential for all market applications
|
•
|
Meeting changing and sophisticated requirements of emerging alternative power markets and applications.
|
•
|
Positioning ourselves as a strategic ally with our global customer base, manufacturers and our R&D partners.
|
ITEM 1A.
RISK FACTORS
|
•
|
perceptions about alternative fuel vehicles safety (in particular with respect to lithium-ion battery
packs), design, performance and cost, especially if adverse events or accidents occur that are
linked to the quality or safety of alternative fuel vehicles;
|
•
|
volatility in the cost of oil and gasoline;
|
•
|
consumer’s perceptions of the dependency of the United States on oil from unstable or hostile countries;
|
•
|
improvements in fuel of the internal combustion engine;
|
•
|
the environmental consciousness of consumers;
|
•
|
government regulation
|
•
|
Macroeconomics
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
For and as of the Years Ended
December 31,
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
(In thousands, except per share data)
|
||||||||||||
Statement of Operations Data
|
||||||||||||
Net revenues
|
$
|
426
|
$
|
1,103
|
$
|
6,622
|
||||||
Cost of revenues
|
2,078
|
2,407
|
6,364
|
|||||||||
Gross profit (loss)
|
(1,652
|
)
|
(1,304
|
)
|
258
|
|||||||
Operating expenses
|
||||||||||||
Research and development
|
-
|
805
|
2,039
|
|||||||||
Selling, general and administrative
|
1,081
|
3,915
|
5,075
|
|||||||||
Total operating expenses
|
1,081
|
4,720
|
7,114
|
|||||||||
Other income and (expense)
|
||||||||||||
Loss on litigation
|
-
|
(2,014
|
)
|
(41
|
)
|
|||||||
Interest and other income (expense), net
|
(171
|
)
|
(197
|
)
|
(87
|
)
|
||||||
Total other income and (expense)
|
(171
|
)
|
(2,211
|
)
|
(128
|
)
|
||||||
Net loss
|
$
|
(2,904
|
)
|
$
|
(8,235
|
)
|
$
|
(6,984
|
)
|
|||
Per common share:
|
||||||||||||
Basic and diluted loss per share
|
$
|
(0.07
|
)
|
$
|
(0.19
|
)
|
$
|
(0.22
|
)
|
|||
Weighted average number of common shares outstanding
|
44,520
|
43,952
|
31,537
|
|||||||||
Balance Sheet Data
|
||||||||||||
Total assets
|
$
|
550
|
$
|
3,055
|
$
|
9,340
|
||||||
Long-term debt
|
$
|
1,238
|
$
|
1,262
|
$
|
1,286
|
||||||
Shareholders’ equity (deficit)
|
$
|
(5,522
|
)
|
$
|
(2,634)
|
$
|
5,298
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Page
|
|||
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
21 | ||
FINANCIAL STATEMENTS
|
22 | ||
Balance Sheets
|
22 | ||
Statements of Operations
|
23 | ||
Statements of Stockholders’ Equity (Deficit)
|
24 | ||
Statements of Cash Flows
|
25 | ||
Notes to Financial Statements
|
26 |
December 31,
|
||||||||
2013
|
2012
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
1,000
|
$
|
57,000
|
||||
Accounts receivable, net
|
-
|
208,000
|
||||||
Inventories and supplies, net
|
427,000
|
2,203,000
|
||||||
Prepaid expenses and other current assets
|
42,000
|
242,000
|
||||||
Total current assets
|
470,000
|
2,710,000
|
||||||
Long term accounts receivable
|
-
|
38,000
|
||||||
Property and equipment, net
|
80,000
|
307,000
|
||||||
Total assets
|
$
|
550,000
|
$
|
3,055,000
|
||||
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
642,000
|
$
|
558,000
|
||||
Loans from employees
|
36,000
|
-
|
||||||
Deferred revenues
|
213,000
|
118,000
|
||||||
Accrued payroll and related expenses
|
194,000
|
98,000
|
||||||
Accrued loss for litigation settlement
|
2,014,000
|
2,014,000
|
||||||
Other accrued liabilities
|
294,000
|
255,000
|
||||||
Current portion of notes payable
|
40,000
|
66,000
|
||||||
Total current liabilities
|
3,433,000
|
3,109,000
|
||||||
Accrued interest payable
|
1,401,000
|
1,318,000
|
||||||
Notes payable, net of current portion
|
1,238,000
|
1,262,000
|
||||||
Total liabilities
|
6,072,000
|
5,689,000
|
||||||
Stockholders' deficit:
|
||||||||
Series A convertible preferred stock — no par value, 30,000,000 shares authorized; 0 shares issued and outstanding; liquidating preference at $0.60 per share as of December 31, 2013 and December 31, 2012
|
-
|
-
|
||||||
Series B convertible preferred stock — no par value, 5,000,000 shares authorized; 546,000 shares issued and outstanding; liquidating preference at $2 per share as of December 31, 2013 and December 31, 2012
|
1,094,000
|
1,094,000
|
||||||
Common Stock to be issued | 528,000 | 528,000 | ||||||
Common Stock — no par value, 750,000,000 shares authorized; 44,520,000 shares issued and outstanding as of December 31, 2013 and December 31, 2012
|
145,512,000
|
145,512,000
|
||||||
Additional paid-in capital
|
9,595,000
|
9,579,000
|
||||||
Accumulated deficit
|
(162,251,000
|
)
|
(159,347,000
|
)
|
||||
Total stockholders' deficit
|
(5,522,000
|
)
|
(2,634,000
|
|||||
Total liabilities and stockholders' deficit
|
$
|
550,000
|
$
|
3,055,000
|
For the Years Ended
December 31,
|
||||||||
2013
|
2012
|
|||||||
Revenues
|
$
|
426,000
|
$
|
1,103,000
|
||||
Cost of revenues
|
2,078,000
|
2,407,000
|
||||||
Gross loss
|
(1,652,000
|
)
|
(1,304,000
|
)
|
||||
Operating expenses
|
||||||||
Research and development
|
-
|
805,000
|
||||||
Selling, general & administrative
|
1,081,000
|
3,915,000
|
||||||
Total operating expenses
|
1,081,000
|
4,720,000
|
||||||
Operating loss
|
(2,733,000
|
)
|
(6,024,000
|
)
|
||||
Other income and (expense), net
|
||||||||
Loss on litigation
|
-
|
(2,014,000
|
)
|
|||||
Interest and other income (expense)
|
(171,000
|
)
|
(197,000
|
)
|
||||
Total other income and (expense), net
|
(171,000
|
)
|
(2,211,000
|
)
|
||||
Net loss
|
$
|
(2,904,000
|
)
|
$
|
(8,235,000
|
)
|
||
Basic and diluted loss per share
|
$
|
(0.07
|
)
|
$
|
(0.19
|
)
|
||
Weighted average number of common shares outstanding
|
44,520,000
|
43,952,000
|
Convertible Preferred Stock
|
Common Stock to be Issued |
Common Stock
|
Additional
Paid-in
Capital
|
Accumulated
Deficit
|
Total
Stockholders’
Equity (Deficit)
|
|||||||||||||||||||||||||||||
Series A
|
Series B
|
|||||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Shares | Amount |
Shares
|
Amount
|
|||||||||||||||||||||||||||
Balance,
December 31,
2011
|
2,642,000
|
$
|
528,000
|
546,000
|
$
|
1,094,000
|
42,765,000
|
$
|
145,380,000
|
$
|
9,408,000
|
$
|
(151,112,000
|
)
|
$
|
5,298,000
|
||||||||||||||||||
Issuance of
common
stock for
cash
|
1,755,000
|
132,000
|
132,000
|
|||||||||||||||||||||||||||||||
Stock option
expense
|
(2,642,000 | ) | (528,000 | ) |
171,000
|
171,000
|
||||||||||||||||||||||||||||
Conversion to common stock | (528,000 | ) | ||||||||||||||||||||||||||||||||
Common stock to be issued | 59,000 | 528,000 | 528,000 | |||||||||||||||||||||||||||||||
Net loss
|
(8,235,000
|
)
|
(8,235,000
|
)
|
||||||||||||||||||||||||||||||
Balance,
December 31,
2012
|
-
|
$
|
-
|
546,000
|
$
|
1,094,000
|
59,000 | 528,000 |
44,520,000
|
$
|
145,512,000
|
$
|
9,579,000
|
$
|
(159,347,000
|
)
|
$
|
(2,634,000)
|
||||||||||||||||
Stock option
expense
|
16,000
|
|
16,000
|
|||||||||||||||||||||||||||||||
Net loss
|
(2,904,000
|
)
|
(2,904,000
|
)
|
||||||||||||||||||||||||||||||
Balance,
December 31,
2013
|
-
|
$
|
-
|
546,000
|
$
|
1,094,000
|
59,000 | $ 528,000 |
44,520,000
|
$
|
145,512,000
|
$
|
9,595,000
|
$
|
(162,251,000
|
)
|
$
|
(5,522,000)
|
For the Years Ended
|
||||||||
December 31
|
||||||||
Cash flows from operating activities:
|
2013
|
2012
|
||||||
Net loss
|
$
|
(2,904,000
|
)
|
$
|
(8,235,000
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Bad debt expense
|
108,000
|
296,000
|
||||||
Inventory reserve expense
|
1,660,000
|
1,436,000
|
||||||
Depreciation and amortization
|
130,000
|
466,000
|
||||||
Loss on disposal of property and equipment
|
29,000
|
28,000
|
||||||
Loss on asset impairment
|
34,000
|
90,000
|
||||||
Loss on litigation
|
-
|
2,014,000
|
||||||
Stock option expense
|
16,000
|
171,000
|
||||||
(Increase) decrease in operating assets:
|
||||||||
Accounts receivable
|
118,000
|
255,000
|
||||||
Inventory and supplies
|
116,000
|
397,000
|
||||||
Prepaid expenses and other current assets
|
166,000
|
-
|
||||||
Long term accounts receivable
|
20,000
|
41,000
|
||||||
Increase (decrease) in operating liabilities:
|
||||||||
Accounts payable
|
84,000
|
204,000
|
||||||
Loans from employees
|
36,000
|
-
|
||||||
Deferred revenues
|
95,000
|
(202,000
|
)
|
|||||
Accrued payroll and related expense
|
96,000
|
(168,000
|
)
|
|||||
Other accrued liabilities
|
39,000
|
(262,000
|
)
|
|||||
Accrued interest payable
|
83,000
|
81,000
|
||||||
Net cash used in operating activities
|
(74,000
|
)
|
(3,388,000
|
)
|
||||
Cash flows from investing activities:
|
||||||||
Sale of certificate of deposit, restricted
|
-
|
200,000
|
||||||
Proceeds from the sale of fixed assets
|
29,000
|
53,000
|
||||||
Purchases of property and equipment
|
-
|
(16,000
|
)
|
|||||
Net cash provided by investing activities
|
29,000
|
237,000
|
||||||
Cash flows from financing activities:
|
||||||||
Payment on notes payable
|
(11,000
|
)
|
(20,000
|
)
|
||||
Net proceeds from the issuance of common stock
|
-
|
132,000
|
||||||
Net cash provided by (used in) financing activities
|
(11,000
|
) |
112,000
|
|||||
Net decrease in cash and cash equivalents
|
(56,000
|
)
|
(3,039,000
|
)
|
||||
Cash and cash equivalents, beginning of period
|
57,000
|
3,096,000
|
||||||
Cash and cash equivalents, end of period
|
$
|
1,000
|
$
|
57,000
|
||||
Supplemental disclosure of cash flow information:
|
||||||||
Interest paid
|
$
|
1,000
|
$
|
5,000
|
||||
Non-cash investing and financing activities
|
||||||||
Assets repossessed and notes payable relieved
|
$
|
39,000
|
$
|
-
|
•
|
Persuasive evidence of an arrangement exists;
|
•
|
Delivery has occurred or services have been rendered;
|
•
|
The fee for the arrangement is fixed or determinable; and
|
•
|
Collectibility is reasonably assured.
|
Fiscal Years Ended December 31,
|
||||||||
2013
|
2012
|
|||||||
Options to purchase common stock
|
5,210,000
|
810,000
|
||||||
Warrants to purchase common stock
|
11,250,000
|
11,250,000
|
||||||
Common shares to be issued | 59,000 | 59,000 | ||||||
Series B preferred shares conversion
|
24,000
|
24,000
|
||||||
Potential equivalent shares excluded
|
16,543,000
|
12,143,000
|
2013
|
2012
|
|||||||
Raw materials
|
$
|
3,098,000
|
$
|
3,988,000
|
||||
Work-in-process
|
222,000
|
2,000
|
||||||
Finished goods
|
449,000
|
587,000
|
||||||
Reserve for obsolescence
|
(3,342,000
|
)
|
(2,374,000
|
)
|
||||
$
|
427,000
|
$
|
2,203,000
|
2013
|
2012
|
|||||||
Computers and software
|
$
|
59,000
|
$
|
580,000
|
||||
Machinery and equipment
|
251,000
|
535,000
|
||||||
Furniture and office equipment
|
86,000
|
87,000
|
||||||
Demonstration vehicles and buses
|
127,000
|
675,000
|
||||||
Leasehold improvements
|
-
|
1,327,000
|
||||||
523,000
|
3,204,000
|
|||||||
Less accumulated depreciation and amortization
|
(443,000
|
)
|
(2,897,000
|
)
|
||||
Total
|
$
|
80,000
|
$
|
307,000
|
2013
|
2012
|
|||||||
Accrued inventory received
|
$
|
10,000
|
$
|
14,000
|
||||
Accrued professional services
|
161,000
|
45,000
|
||||||
Accrued warranty
|
74,000
|
117,000
|
||||||
Other
|
49,000
|
79,000
|
||||||
Total
|
$
|
294,000
|
$
|
255,000
|
2013
|
2012
|
|||||||
Balance at beginning of year
|
$
|
117,000
|
$
|
227,000
|
||||
Accruals for warranties issued during the period
|
96,000
|
141,000
|
||||||
Warranty claims
|
(139,000
|
)
|
(251,000
|
)
|
||||
Balance at end of year
|
$
|
74,000
|
$
|
117,000
|
2013
|
2012
|
|||||||
Secured note payable to Credit Managers Association of California, bearing interest at prime plus 3% (6.25% as of December 31, 2013), and is adjusted annually in April through maturity. Principal and unpaid interest due in April 2016. A sinking fund escrow may be funded with 10% of future equity financing, as defined in the Agreement
|
$
|
1,238,000
|
$
|
1,238,000
|
||||
Secured note payable to a Coca Cola Enterprises in the original amount of $40,000, bearing interest at 10% per annum. Principal and unpaid interest due on demand
|
40,000
|
40,000
|
||||||
Secured note payable to a financial institution in the original amount of $38,000, bearing interest at 8.25% per annum, payable in 60 equal monthly installments of principal and interest through February 19, 2014
|
—
|
11,000
|
||||||
Secured note payable to a financial institution in the original amount of $19,000, bearing interest at 10.50% per annum, payable in 60 equal monthly installments of principal and interest through August 25, 2014
|
—
|
8,000
|
||||||
Secured note payable to a financial institution in the original amount of $26,000, bearing interest at 7.91% per annum, payable in 60 equal monthly installments of principal and interest through April 9, 2015
|
—
|
14,000
|
||||||
Secured note payable to a financial institution in the original amount of $25,000, bearing interest at 7.24% per annum, payable in 60 equal monthly installments of principal and interest through March 10, 2016
|
—
|
17,000
|
||||||
1,278,000
|
1,328,000
|
|||||||
Less current portion of notes payable
|
(40,000
|
)
|
(66,000
|
)
|
||||
Notes payable, net of current portion
|
$
|
1,238,000
|
$
|
1,262,000
|
||||
Year Ending
December 31
|
Principal
Amounts
|
|||
2014
|
$ |
40,000
|
||
2015
|
—
|
|||
2016
|
1,238,000
|
|||
Thereafter
|
—
|
|||
Total
|
$
|
1,278,000
|
Number of
Share
Options
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Life
|
Aggregate
Intrinsic
Value (1)
|
|||||||||||||
Outstanding at December 31, 2011
|
2,529,000
|
$
|
1.07
|
6.09
|
$
|
—
|
||||||||||
Granted
|
270,000
|
$
|
0.08
|
3.96
|
$
|
—
|
||||||||||
Exercised
|
—
|
$
|
—
|
—
|
$
|
—
|
||||||||||
Forfeited or Cancelled
|
(1,989,000
|
)
|
$
|
1.11
|
—
|
$
|
—
|
|||||||||
Outstanding at December 31, 2012
|
810,000
|
$
|
0.64
|
4.06
|
$
|
—
|
||||||||||
Granted
|
4,400,000
|
$
|
0.02
|
2.66
|
$
|
—
|
||||||||||
Exercised
|
—
|
$
|
—
|
—
|
$
|
—
|
||||||||||
Forfeited or Cancelled
|
—
|
$
|
—
|
—
|
$
|
—
|
||||||||||
Outstanding at December 31, 2013
|
5,210,000
|
$
|
0.12
|
2.72
|
$
|
—
|
||||||||||
Exercisable at December 31, 2013
|
675,000
|
$
|
0.75
|
3.26
|
$
|
—
|
||||||||||
Vested and expected to vest(2)
|
5,210,000
|
$
|
0.12
|
2.72
|
$
|
—
|
(1)
|
Aggregate intrinsic value represents the value of the closing price per share of our common stock on the last trading day of the fiscal period in excess of the exercise price multiplied by the number of options outstanding or exercisable, except for the “Exercised” line, which uses the closing price on the date exercised.
|
(2)
|
Number of shares includes options vested and those expected to vest net of estimated forfeitures.
|
Unvested
Number of
Options
|
Weighted-Average
Grant Date Fair
Value
|
|||||||
Unvested balance at December 31, 2012
|
236,000
|
$
|
0.04
|
|||||
Granted
|
4,400,000
|
$
|
0.02
|
|||||
Vested
|
(101,000
|
)
|
$
|
0.11
|
||||
Forfeited
|
—
|
$
|
—
|
|||||
Unvested balance at December 31, 2013
|
4,535,000
|
$
|
0.02
|
Years Ended
December 31,
|
||||||||
2013
|
2012
|
|||||||
Total intrinsic value of stock options exercised
|
$
|
—
|
$
|
—
|
||||
Cash received from stock option exercises
|
$
|
—
|
$
|
—
|
||||
Gross income tax benefit from the exercise of stock options
|
$
|
—
|
$
|
—
|
Years Ended December 31,
|
||||||||
2013
|
2012
|
|||||||
Expected life (in years)
|
1.5
|
1.5- 6.5
|
||||||
Average risk-free interest rate
|
1.66
|
%
|
1.66
|
%
|
||||
Expected volatility
|
118
|
%
|
108% - 136
|
%
|
||||
Expected dividend yield
|
0
|
%
|
0
|
%
|
||||
Forfeiture rate
|
3
|
%
|
3
|
%
|
Number of
Share
Options
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Life
|
||||||||||
Outstanding at December 31, 2011
|
11,250,000
|
$
|
0.22
|
5.00
|
||||||||
Granted
|
—
|
$
|
—
|
—
|
||||||||
Exercised
|
—
|
$
|
—
|
—
|
||||||||
Forfeited or Cancelled
|
—
|
$
|
—
|
—
|
||||||||
Outstanding at December 31, 2012
|
11,250,000
|
$
|
0.22
|
4.00
|
||||||||
Granted
|
—
|
$
|
—
|
—
|
||||||||
Exercised
|
—
|
$
|
—
|
—
|
||||||||
Forfeited or Cancelled
|
—
|
$
|
—
|
—
|
||||||||
Outstanding at December 31, 2013
|
11,250,000
|
$
|
0.22
|
3.00
|
||||||||
Exercisable at December 31, 2013
|
11,250,000
|
$
|
0.22
|
3.00
|
2013
|
2012
|
|||||||
Deferred tax assets
|
||||||||
Net operating loss carry-forwards
|
$
|
27,516,000
|
$
|
27,079,000
|
||||
Stock based compensation
|
852,000
|
845,000
|
||||||
Other, net
|
36,000
|
(406,000
|
)
|
|||||
28,404,000
|
27,518,000
|
|||||||
Less valuation allowance
|
(28,404,000
|
)
|
(27,518,000
|
)
|
||||
Net deferred tax assets
|
$
|
—
|
$
|
—
|
December 31,
2013
|
December 31,
2012
|
|||||||
Tax benefit computed at 34%
|
$
|
(987,000
|
)
|
$
|
(2,800,000
|
)
|
||
Change in valuation allowance
|
887,000
|
1,788,000
|
||||||
State tax (net of Federal benefit)
|
(169,000
|
)
|
(480,000
|
)
|
||||
Change in carryovers and tax attributes
|
269,000
|
1,492,000
|
||||||
Net tax benefit
|
$
|
—
|
$
|
—
|
2013
|
2012
|
|||||||
United States
|
$
|
87,000
|
$
|
142,000
|
||||
China
|
324,000
|
716,000
|
||||||
United Kingdom
|
8,000
|
243,000
|
||||||
Korea
|
7,000
|
—
|
||||||
Japan
|
—
|
2,000
|
||||||
Total
|
$
|
426,000
|
$
|
1,103,000
|
19. Related Party Transactions
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
Name
|
Age
|
Position
|
||
Christopher Thunen (2)
|
36
|
Director
|
||
John Micek
|
60
|
Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and Director
|
||
Edwin O. Riddell(1)(3)(4)(6)
|
71
|
Director
|
||
James Burness(2)(4)(5)
|
65
|
Director
|
(1)
|
Audit Committee Chairman
|
|
(2)
|
Audit Committee Member
|
|
(3)
|
Compensation Committee Chairman
|
|
(4)
|
Compensation Committee Member
|
|
(5)
|
Nominating and Governance Committee Member
|
|
(6)
|
Nominating and Governance Committee Chairman
|
ITEM 11.
EXECUTIVE COMPENSATION
|
Name and Principal Position
|
Fiscal
Year
|
Salary
($)(A)
|
Bonus
($)(B)
|
Options
Awards
($)(C)
|
Non-Equity
Incentive
Plan
Compensation
($)
|
All other
Compensation
($)(D)
|
Total
($)
|
|||||||||||||||||||||
John Micek
|
2013
|
$
|
150,069
|
$
|
—
|
$
|
39,547
|
$
|
—
|
$
|
12,844
|
$
|
202,460
|
|||||||||||||||
Chief Executive Officer and Chief Financial Officer
|
2012
|
$
|
159,769
|
$
|
59,996
|
$
|
—
|
$
|
—
|
$
|
11,192
|
$
|
230,957
|
(A) | Due to the financial condition of the Company, Mr. Micek's salary in the amount of $92,205 was deferred as of December 31, 2013. | |
(B) | For the 2012 year, Mr. Micek earned bonus compensation based on the Board of Directors meeting on July 27, 2012 which established certain cash incentive bonus awards, the payment of which is dependent upon the settlement of certain account receivables and account payables. Under these guidelines, an incentive bonus of $59,996 was accrued in 2012. | |
(C)
|
The valuation of option awards issued to employees are calculated in accordance with SEC rules as the grant date fair value in accordance with FASB ASC 718 consistent with the assumptions set forth in Note 12 to the financial statements in this Annual Report on Form 10-K.
|
|
(D)
|
For Mr. Micek, the amount shown attributable to 2013 includes (i) $12,844 in medical insurance premiums paid. In 2012, the amount shown attributable for Mr. Micek includes (i) $173 value of life insurance premiums paid; (ii) $5,019 in medical insurance premiums paid; and (iii) $6,000 in office rent.
|
Option Awards
|
||||||||||||||||
Name
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
Option
Exercise
Price
|
Option
Expiration
Date
|
||||||||||||
John Micek
|
4,400,000(A)
|
4,400,000
|
$
|
0.02
|
8/27/2016
|
|||||||||||
250,000(B)
|
—
|
$
|
0.19
|
12/18/2014
|
||||||||||||
14,583(C)
|
—
|
$
|
0.86
|
5/12/2021
|
||||||||||||
34,500(D)
|
—
|
$
|
1.17
|
12/8/2019
|
(A)
|
The options were granted on August 27, 2013. The vesting of the option was made conditional upon the Board approving, and Enova entering into definitive agreements covering and thereafter consummating, (x) a sale of all or substantially all of Enova's assets or (y) the acquisition of Enova by another entity by means of a merger, share exchange, tender offer or other similar transaction or (z) the acquisition by Enova of another entity by means of a merger, share exchange, tender offer or other similar transaction.
|
(B)
|
The options were granted on December 19, 2011 and vested in January 2012 based on the attainment of the vesting requirement that the Company’s common stock had a Volume Weighted Average Price for a ten day trading period equal to or greater than twice the exercise price of the options based on the average of the closing bid and asked prices of the Company’s common stock on the NYSE MKT LLC.
|
(C)
|
The options were granted on May 13, 2011 and vest over three years on a quarterly basis on the last day of each calendar quarter provided the option holder is then an officer of Enova as of such date. The first 1/12 or 8.33% of the shares under each option vested on June 30, 2011. In the event there is a change of control of Enova, the options will become fully vested.
|
(D)
|
The options were granted on December 8, 2009 and vested over one year on a quarterly basis on the last day of each calendar quarter provided the option holder is then an officer of Enova as of such date.
|
Non-Executive
Director Name
|
Fees Earned or
Paid in Cash
($)
|
Option
Awards
($)
|
Total
($)
|
|||||||||
Christopher Thunen
|
$
|
—
|
—
|
$
|
—
|
|||||||
Edwin Riddell
|
$
|
—
|
—
|
$
|
—
|
|||||||
James Burness
|
$
|
—
|
—
|
$
|
—
|
|||||||
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
Owner
|
Number of
Shares of
Common Stock
|
Percent of
Common
Stock
|
Percent of Common Stock,
Series B
Preferred
Stock,
Common Stock to be Issued and
Voting
Together
|
||||||
Jagen, Pty., Ltd.(1)
|
3,222,222
|
7.2%
|
7.2%
|
||||||
9 Oxford Street, South Ybarra 3141 Melbourne,
Victoria Australia
|
|||||||||
Shell Asset Management BV(2)
|
6,054,960
|
13.6%
|
13.5%
|
||||||
Sir Winston Churchillaan 366H, 2285 SJ Rijswijk ZH,
The Netherlands
527 Madison Avenue, Suite 2600, New York, NY 10022
|
|||||||||
John J. Micek(3)
|
4,884,908
|
11.0%
|
11.0%
|
||||||
Edwin O. Riddell(4)
|
178,667
|
0.4%
|
0.4%
|
||||||
All Executive Officers and Directors as a group (5)
|
5,063,575
|
11.4%
|
11.4%
|
(1)
|
Jagen Pty. Ltd. (Jagen) shares beneficial ownership with Jagen’s controlling shareholder, the B. Liberman Family Trust and its trustee, Jagen Nominees, Pty. Ltd. Boris and Helen Liberman possess ultimate voting and discretionary authority over the shares.
|
||
(2)
|
Based on a Form 3 filed December 15, 2009. Shell Asset Management Company BV manages assets of The Shell Group and its subsidiaries and affiliates, including certain pension plans organized for the benefit of employees of The Shell Group. As such, The Shell Group and such subsidiaries and affiliates, including such pension plans, have the right to the receipt of dividends from, and the proceeds from the sale of, the shares of common stock.
|
||
(3)
|
Includes 307,417 shares of common stock underlying stock options that are exercisable within 60 days. | ||
(4) | Includes 99,000 shares of common stock underlying stock options that are exercisable within 60 days. | ||
(5) | Includes 406,417 shares of common stock underlying stock options that are exercisable within 60 days. |
Plan Category |
Number of Securities to
be Issued upon Exercise
of Outstanding Options,
Warrants and Rights
(a)
|
Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights
(b)
|
Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation
Plans (Excluding
Securities Reflected in
Column (a))
(c)
|
|||||||
Equity compensation plans approved by security holders
|
5,210,000
|
$
|
0.12
|
3,790,000(A)
|
||||||
Equity compensation plans not approved by security holders
|
—
|
—
|
—
|
|||||||
Total
|
5,210,000
|
$
|
0.12
|
3,790,000
|
(A)
|
While the 2006 Plan was approved by the shareholders, an August 2013 amendment to the 2006 Plan, increasing the number of shares available thereunder from 3,000,000 to 9,000,000 has not been presented to shareholders for their consideration, nor does the Company intend to present such amendment to the shareholders for approval.
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
2013
|
2012
|
|||||||
Audit Fees
|
$
|
44,000
|
$
|
54,000
|
||||
Audit-Related Fees
|
$
|
—
|
$
|
—
|
||||
Tax Fees
|
$
|
550
|
$
|
14,500
|
||||
All Other Fees
|
$
|
—
|
$
|
15,000
|
||||
Total
|
$
|
44,550
|
$
|
83,500
|
Exhibit #
|
Description
|
|
3.1 |
Our Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 of our Annual Report on Form 10-K for the fiscal year ending December 31, 2006, as filed on April 2, 2007)
|
|
3.2 |
Our Amended and Restated bylaws (incorporated by reference to Exhibit 3.2 of our Quarterly Report on Form 10-Q for the period ended September 30, 2009, as filed on November 12, 2009)
|
|
10.1 |
Form of Indemnification Agreement (incorporated by reference to Exhibit 10.26 of our Quarterly Report on Form 10-Q for the period ended June 30, 2005, as filed on August 15, 2005)
|
|
10.2 |
Form of Security Agreement entered into May 31, 1995 between us and Credit Managers Association of California, Trustee (incorporated by reference to Exhibit 10.65 of our Quarterly Report on Form 10-Q for the period ended April 30, 1996, as filed on June 14, 1996)
|
|
10.3 |
Commercial Promissory Note dated October 10, 2007 between us and Union Bank of California (incorporated by reference to Exhibit 10.3 of our Annual Report Form 10-K for the period ended December 31 2007, as filed on March 26, 2008)
|
|
10.4 |
Placing Agreement in connection with an application to join AIM dated July 19, 2005 between us and Investec Bank (UK) Limited (incorporated by reference to Exhibit 10.28 of our amended Quarterly Report on Form 10-Q for the period ended September 30, 2005, as filed November 21, 2005)
|
|
10.5 |
Placing Agreement dated July 25, 2007 between us and Investec Bank (UK) Limited (incorporated by reference to Exhibit 10 of our Current Report on Form 8-K as amended filed August 7, 2007)
|
|
10.6 |
Facility Lease Agreement entered into October 17, 2007 between us and Sunshine Distribution L.P., (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed October 23, 2007)
|
|
10.7 |
Retirement Agreement and Limited Release entered into July 12, 2007 between us and Edwin Riddell, formerly our Chief Executive Officer and President (incorporated by reference to Exhibit 10 of our Current Report on Form 8-K as amended filed July 16, 2007)+
|
|
10.8 |
Employment Agreement entered into February 11, 2008 between us and Michael Staran, our President and Chief Executive Officer (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed February 15, 2008)+
|
|
10.9 |
Placing Agreement entered into March 26, 2008 (incorporated by reference to Exhibit 10 of our Current Report on Form 8-K/A filed April 4, 2008)
|
|
10.10 |
Securities Purchase Agreement entered into April 23, 2008 (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed April 24, 2008)
|
|
10.11 |
Registration Rights Agreement entered into April 23, 2008 (incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K filed April 24, 2008)
|
|
10.12 |
Securities Purchase Agreement entered into October 29, 2009 (incorporated by reference to Exhibit 99.1 of our Current Report on Form 8-K filed October 30, 2009)
|
|
10.13 |
Placing Agreement entered into October 29, 2009 (incorporated by reference to Exhibit 99.3 of our Current Report on Form 8-K filed October 30, 2009)
|
|
10.14 |
Registration Rights Agreement entered into December 15, 2009 (incorporated by reference to Exhibit 99.1 of our Current Report on Form 8-K filed December 15, 2009)
|
|
10.15 |
Amendment to Employment Agreement between us and Michael Staran entered into on February 17, 2009 (incorporated by reference to Item 5.02 of our Current Report on Form 8-K filed February 23, 2009)+
|
|
10.16 |
Severance Agreement between us and John Mullins effective as of August 31, 2009 (incorporated by reference on our annual report on Form 10-K for the year ended December 31, 2010 filed on March 30, 2011)+
|
|
10.17 |
Agreement relating to the appointment of a Nominated Adviser and Broker dated June 20, 2011 between us and Daniel Stewart (UK) Plc (incorporated by reference to Exhibit 10.23 of on Form 10-K filed on March 29, 2012.
|
|
10.18 |
Warrant and Common Stock Purchase Agreement dated December 15, 2011 (incorporated by reference to Exhibit 99.1 of our Current Report on Form 8-K filed December 19, 2011).
|
|
10.19 |
Form of Warrant (incorporated by reference to Exhibit 99.2 of our Current Report on Form 8-K filed December 19, 2011)
|
|
10.20 |
Form of Registration Rights Agreement dated December 2011 (incorporated by reference to Exhibit 99.3 of our Current Report on Form 8-K filed December 19, 2011)
|
|
10.21 |
Purchase Agreement dated April 23, 2012 (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed April 25, 2012).
|
|
10.22 |
Purchase Agreement dated April 24, 2012 (incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K filed April 25, 2012).
|
|
10.23 |
Registration Rights Agreement dated April 23, 2012 (incorporated by reference to Exhibit 10.3 of our Current Report on Form 8-K filed April 25, 2012).
|
|
10.24 | Amendment of the 2006 Equity Compensation Plan* | |
31.1 |
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
|
|
32 |
Certification Pursuant to 18 U.S.C. Section 1350*
|
|
101.XML
|
XBRL Instance Document**
|
|
101.XSD
|
XBRL Taxonomy Extension Schema Document**
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document**
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document**
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document**
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document**
|
*
|
Filed herewith.
|
|
**
|
In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to this Annual Report on Form 10-K shall be deemed to be “furnished” and not “filed”.
|
|
+
|
Management contract or compensatory plan or arrangement.
|
|
#
|
Portions of the exhibit have been omitted pursuant to a request for confidential treatment submitted to the Securities and Exchange Commission.
|
ENOVA SYSTEMS, INC.
|
||||||
By:
|
/s/ John Micek
|
|||||
John Micek
|
||||||
Chief Executive Officer & Chief Financial Officer
|
Signature
|
Title
|
Date
|
||
/s/ John Micek
John Micek
|
Chief Executive Officer,
Chief Financial Officer, and Director
(Principal Executive Officer and Principal Accounting Officer)
|
May 2, 2014
|
||
/s/ Edwin Riddell
Edwin Riddell
|
Director, Chairman of the Board
|
May 2, 2014
|
||
/s/ James Burness
James Burness
|
Director
|
May 2, 2014
|
||
/s/ Christopher Thunen
Christopher Thunen
|
Director
|
May 2, 2014
|
1 Year Enova Systems (CE) Chart |
1 Month Enova Systems (CE) Chart |
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