SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-KA
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): October 4, 2002
LITHIUM TECHNOLOGY CORPORATION
(Exact Name of Registrant as Specified in Charter)
Delaware 1-10446 13-3411148
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(State or Other Jurisdiction of (Commission (IRS Employer
Incorporation or Organization) File Number) Identification No.)
5115 Campus Drive, Plymouth Meeting, PA 19462
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (610) 940-6090
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(Former Name or Former Address, if Changed Since Last Report)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
GENERAL
On October 4, 2002 we closed a share exchange (the "First Share Exchange")
pursuant to which we acquired a 60% interest in GAIA Akkumulatorenwerke GmbH
("GAIA"), through our acquisition of 60% of the outstanding shares of GAIA
Holding B.V. ("GAIA Holding"), a lithium polymer battery company, headquartered
in Nordhausen/Thuringia, Germany. On October 16, 2002 we filed a Current Report
on Form 8-K (the "October 16 Form 8-K") reporting on the closing of the First
Share Exchange. On December 13, 2002, we closed a second share exchange (the
"Second Share Exchange") pursuant to which we now hold 100% of the outstanding
shares of GAIA Holding and a 100% beneficial ownership interest in GAIA.
We are filing this Amendment to the October 16 Form 8-K to disclose (1) the
financial statements of GAIA Holding required under Item 7(a) of Form 8-K and
(2) pro forma financial information required under Item 7(b) of Form 8-K,
including unaudited pro forma financial information required under Item 7(b) of
Form 8-K, including the unaudited pro forma balance sheet of LTC as of September
30, 2002 and the unaudited pro forma results of operations of LTC giving effect
to the acquisition of GAIA Holding as though the First Share Exchange and the
Second Share Exchange (together, the "Share Exchange") had occurred on January
1, 2001 (the "Financial Information").
We are also disclosing herein, the acquisition of 40% of GAIA Holding in the
Second Share Exchange.
SECOND SHARE EXCHANGE
The Second Share Exchange was consummated pursuant to the terms of a Share
Exchange Agreement (the "Share Exchange Agreement") that we entered into on
October 4, 2002 with Arch Hill Ventures, N.V., a private company limited by
shares, incorporated under the laws of the Netherlands ("Arch Hill Ventures").
Arch Hill Capital N.V., a private company limited by shares, incorporated under
the laws of the Netherlands ("Arch Hill Capital"), controls Arch Hill Ventures.
GAIA Holding, a private limited liability company incorporated under the laws of
the Netherlands, is the 100% beneficial owner of GAIA. GAIA is a private limited
liability company incorporated under the laws of Germany.
In the Second Share Exchange, Arch Hill Ventures transferred to us shares of
GAIA Holding that constitute 40% of the outstanding shares of GAIA Holding, and
we issued to Arch Hill Ventures 40,000 shares of LTC Series A Preferred Stock
convertible into 44,536,210 shares of LTC common stock.
LTC SERIES A PREFERRED STOCK ISSUED IN THE SECOND SHARE EXCHANGE
Each share of the Series A Preferred Stock is convertible at the option of the
holder thereof into 1,113.40524 shares of our common stock at any time following
the authorization and reservation of a sufficient number of shares of our common
stock by all requisite action, including action by our Board of Directors and by
our shareholders, to provide for the conversion of all outstanding shares of
Series A Preferred Stock into shares of our common stock.
Each share of the Series A Preferred Stock will automatically be converted into
1,113.40524 shares of our common stock one year following the authorization and
reservation of a sufficient number of shares of our common stock to provide for
the conversion of all outstanding shares of Series A Preferred Stock into shares
of our common stock.
The shares of Series A Preferred Stock are entitled to vote together with the
common stock on all matters submitted to a vote of the holders of the common
stock. On all matters as to which shares of common stock or shares of Series A
Preferred Stock are entitled to vote or consent, each share of Series A
Preferred Stock is entitled to the number of votes (rounded up to the nearest
whole number) that the common stock into which it is convertible would have if
such Series A Preferred Stock had been so converted into common stock as of the
record date established for determining holders entitled to vote, or if no such
record date is established, as of the time of any vote on such matters. Each
share of Series A Preferred Stock is initially entitled to the number of votes
that 1,114 shares of common stock would have.
In addition to the voting rights provided above, as long as any shares of Series
A Preferred Stock are outstanding, the affirmative vote or consent of the
holders of two-thirds of the then-outstanding shares of Series A Preferred
Stock, voting as a separate class, will be required in order for us to:
(i) amend, alter or repeal, whether by merger, consolidation or
otherwise, the terms of the Series A Preferred Stock or any other
provision of our Charter or By-laws, in any way that adversely
affects any of the powers, designations, preferences and relative,
participating, optional and other special rights of the Series A
Preferred Stock;
(ii) issue any shares of capital stock ranking prior or superior to, or
on parity with, the Series A Preferred Stock; or
(iii) subdivide or otherwise change shares of Series A Preferred Stock
into a different number of shares whether in a merger,
consolidation, combination, recapitalization, reorganization or
otherwise.
The Series A Preferred Stock ranks on a parity with our common stock as to any
dividends, distributions or upon liquidation, dissolution or winding up, in an
amount per share equal to the amount per share that the shares of common stock
into which such Series A Preferred Stock are convertible would have been
entitled to receive if such Series A Preferred Stock had been so converted into
common stock prior to such distribution.
OWNERSHIP OF SHARES BY ARCH HILL CAPITAL AND ARCH HILL VENTURES
Including the Series A Preferred Stock issued in the Second Share Exchange, Arch
Hill Capital is the beneficial owner of 174,762,611 shares of LTC common stock
consisting of:
(1) 23,932,087 shares of LTC common stock;
(2) 39,490,000 shares of LTC common stock issuable upon conversion of
$3.94 million in principal of LTC convertible notes at $.10 per
share; and
(3) 111,340,524 shares of LTC common stock issuable upon conversion of
100,000 shares of Series A Preferred Stock held by Arch Hill
Ventures (which is controlled by arch Hill Capital).
The 174,762,611 shares of LTC common stock beneficially owned by Arch Hill
Capital constitutes approximately 73% of LTC common stock on as converted basis.
Accordingly, Arch Hill Capital is a controlling stockholder and is able to
control the outcome of most matters submitted to our stockholders for approval,
including the election of our directors, any amendments to the Certificate of
Incorporation or a merger, sale of assets or other significant transaction
without the approval of other stockholders. In addition, Arch Hill Capital
controls a majority of the voting power of GAIA Holding and GAIA by virtue of
its ownership of a controlling interest in us. As a result, Arch Hill Capital
has an effective veto power over corporate transactions by us, GAIA Holding or
GAIA which management or non-control stockholders of such entities might desire.
The calculation of percentage of LTC common stock beneficially owned by Arch
Hill Capital is based on the number of shares of LTC common stock outstanding as
of December 13, 2002 (88,235,392 shares) plus the number of shares of LTC common
stock issuable to Arch Hill Capital upon conversion of convertible securities
held by such entity.
AUTHORIZED AND OUTSTANDING LTC SHARES
As of December 13, 2002, we have outstanding (i) 88,235,392 shares of common
stock with one vote per share and, (ii) 100,000 shares of Series A Preferred
Stock, with 1,114 votes per share.
We currently have authorized (i) 125,000,000 shares of common stock and (ii)
100,000 shares of preferred stock, all of which have been designated Series A
Preferred Stock pursuant to the Amended Certificate of Designation filed with
the Delaware Secretary of State on August 27, 2002 (See Exhibit 3.5). We do not
have enough authorized shares of common stock to issue shares of common stock to
all holders of our convertible securities upon conversion of such securities. As
of December 13, 2002, we had outstanding (i) 88,235,392 shares of common stock
and (ii) options (3,175,000), warrants (19,686,000), notes (convertible into
39,490,000 shares of common stock) and Series A Preferred Stock (convertible
into 111,340,524 shares of common stock) convertible into an aggregate of
173,691,524 shares of common stock.
We plan to seek stockholder approval of an increase in the authorized number of
shares of our common stock to make available that number of shares of our common
stock as will be required for the conversion of the Series A Preferred Stock,
all outstanding convertible securities and any equity securities to be issued as
part of a new financing.
REGISTRATION RIGHTS
Arch Hill Ventures has the following registration rights, at our expense, with
respect to the common stock issuable upon conversion of the Series A Preferred
Stock issued in the Second Share Exchange: (i) upon the request of the holders
of at least 50% of the convertible notes or Preferred Stock, one demand
registration, (ii) unlimited piggyback rights, and (iii) rights to register
shares in up to three shelf offerings pursuant to Form S-3. All registration
rights will terminate when the underlying common stock may be sold under Rule
144(k).
(C) WARRANTS ISSUED
As compensation for services in connection with the Second Share Exchange, on
December 13, 2002, we issued to principals of Colebrooke Capital, Inc. warrants
to purchase 1,200,000 shares of our common stock at an exercise price of $0.185
per share. The warrants are immediately exercisable and have a five year term. A
copy of the form of warrant is attached as Exhibit 10.47 and incorporated herein
by reference.
ITEM 7. FINANCIAL STATEMENT PRO FORMA INFORMATION AND EXHIBITS.
(A) FINANCIAL STATEMENTS OF THE BUSINESS ACQUIRED ...................... F-1
(B) PROFORMA FINANCIAL INFORMATION ..................................... F-15
(C) EXHIBITS
3.5 Amended Certificate of Designation of Lithium Technology Corporation (1)
10.47 Form of Warrant dated December 13, 2002 issued to principals of Colebrooke
Capital, Inc.
23.1 Consent of Independent Accountants
99.13 Press Release dated December 17, 2002
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(1) Incorporated herein by reference to LTC's Report on a Form 8-K dated
October 16, 2002
GAIA Holding B.V.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page(s)
Report of independent accountants ............................................................. F-2
Consolidated Balance Sheets at September 30, 2002 (unaudited) and December 31, 2001 ........... F-3
Consolidated Statements of Operations for the years ended December 31, 2001 and 2000 and the
nine months ended September 30, 2002 (unaudited) and the period from February 12, 1999 (date of
acquisition) to September 30, 2002 (unaudited) ................................................ F-4
Consolidated Statements of Changes in Stockholders' Equity (Deficit) for the
period from December 31, 2000 (date of acquisition) to September 30, 2002 (unaudited) ......... F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2001 and 2000 and
the nine months ended September 30, 2002 (unaudited) .......................................... F-6
Notes to Consolidated Financial Statements .................................................... F-7
F-1
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of GAIA Holding B.V.
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income, stockholders' equity (deficit) and cash flows
present fairly, in all material respects, the financial position of GAIA Holding
B.V. and its subsidiaries (a development stage enterprise) at December 31, 2001,
and the results of their operations and their cash flows for the years ended
December 31, 2001 and 2000 in conformity with accounting principles generally
accepted in the United States of America. 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 of these statements in accordance with auditing standards generally
accepted in the United States of America, which 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,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to the
consolidated financial statements, the Company's operating losses since
inception and lack of adequate financing to fund its operations raise
substantial doubt about its ability to continue as a going concern. Management's
plans concerning these matters are also described in Note 1. The consolidated
financial statements do not include any adjustments that might result from the
outcome of these uncertainties.
/s/ PricewaterhouseCoopers Accountants N.V.
PricewaterhouseCoopers Accountants N.V.
The Hague, The Netherlands
December 20, 2002
F-2
GAIA HOLDING B.V. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, DECEMBER 31,
2002 2001
----------- -----------
(unaudited)
EUR EUR
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 77,854 362,315
Inventories 55,865 76,527
Prepaid expenses and other current assets 450,261 672,932
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Total current assets 583,980 1,111,774
Due from related parties 2,436,000 2,331,000
Property and equipment, net 4,342,950 3,762,500
Intangibles, net 144,562 5,219
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Total assets 7,507,492 7,210,493
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LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable 675,668 421,004
Due to related parties - 1,524,200
Other current liabilities and accrued expenses 473,813 778,728
----------- -----------
Total current liabilities 1,149,481 2,723,932
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LONG-TERM LIABILITIES:
Long-term liabilities, less current portion 26,319,929 22,833,613
COMMITMENTS AND CONTINGENCIES - -
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock, EUR 1 par value (2001: NLG 100), 250,000 shares 100,000 18,151
authorised (2001: 2000); 100,000 shares issued and outstanding
(2001: 400)
Additional paid-in capital 1,575,771 -
Other comprehensive income 1,031 -
Accumulated deficit (177,051) (177,051)
Deficit accumulated during development stage (21,461,669) (18,188,152)
----------- -----------
Total stockholders' equity (deficit) (19,961,918) (18,347,052)
----------- -----------
Total liabilities and stockholders' equity (deficit) 7,507,492 7,210,493
----------- -----------
The accompanying notes are an integral part of these financial statements.
F-3
GAIA HOLDING B.V. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED STATEMENTS OF OPERATIONS
PERIOD FROM
FEBRUARY 12, 1999
NINE MONTHS (DATE OF
ENDED ACQUISITION) TO
YEAR ENDED DECEMBER 31, SEPTEMBER SEPTEMBER
2001 2000 30, 2002 30, 2002
--------- --------- --------- ----------
EUR EUR EUR EUR
(unaudited) (unaudited)
REVENUES:
Development contracts and research grants 457,942 - 612,761 1,070,703
COSTS AND EXPENSES:
Engineering, research and development 2,399,908 2,248,775 1,855,935 8,609,383
General and administrative 1,200,363 919,769 847,426 4,247,353
Depreciation and amortisation 364,226 932,001 318,795 6,261,671
--------- --------- --------- ----------
3,964,497 4,100,545 3,022,156 19,118,407
OTHER (INCOME) EXPENSE:
Interest expense, net of interest income 1,181,773 853,507 864,122 3,580,176
Gain on sale of subsidiary (166,211) - (166,211)
--------- --------- --------- ----------
NET LOSS 4,522,117 4,954,052 3,273,517 21,461,669
========= ========= ========= ==========
The accompanying notes are an integral part of these financial statements.
F-4
GAIA HOLDING B.V. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED STATEMENTS OF
STOCKHOLDERS' EQUITY (DEFICIT)
DEFICIT
ACCUMULATED
COMMON STOCK ADDITIONAL DURING OTHER TOTAL
------------ PAID-IN ACCUMULATED DEVELOPMENT COMPREHENSIVE STOCKHOLDERS'
SHARES AMOUNT CAPITAL DEFICIT STAGE INCOME EQUITY (DEFICIT)
EUR EUR EUR EUR EUR EUR
BALANCE DECEMBER 31, 2000 400 18,151 0 (177,051) (13,666,035) 0 (13,824,935)
Net loss (4,522,117) (4,522,117)
------- ------- --------- --------- ------------ ----- ------------
BALANCE DECEMBER 31, 2001 400 18,151 0 (177,051) (18,188,152) 0 (18,347,052)
------- ------- --------- --------- ------------ ----- ------------
Issuance of common stock
at EUR 1,031.01 per share
in June 2002 1,600 72,605 1,577,015 1,649,620
Conversion of par value
from NLG 100.00 per share
to EUR 1.00 per share 90,000 1,244 -1,244 -
Issuance of common stock at
EUR 1.00 per share in
June 2002 8,000 8,000 8,000
Translation difference of
share capital Dilo Trading A.G. 1,031 1,031
Net loss (3,273,517) (3,273,517)
------- ------- --------- --------- ------------ ----- ------------
BALANCE SEPTEMBER 30, 2002
(UNAUDITED) 100,000 100,000 1,575,771 (177,051) (21,461,669) 1,031 (19,961,918)
------- ------- --------- --------- ------------ ----- ------------
The accompanying notes are an integral part of these financial statements.
F-5
GAIA HOLDING B.V. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
2001 2000 2002
----------- ----------- ------------
(unaudited)
EUR EUR EUR
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss (4,522,117) (4,954,052) (3,273,517)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortisation 364,226 932,001 318,795
Change in assets and liabilities:
Increase/(decrease) in inventories 54,946 (131,473) 20,662
Increase/(decrease) in accounts payable and
accrued expenses (198,166) 244,671 222,671
Decrease/(increase) in prepaid expenses and other current assets (238,185) (280,574) (52,421)
----------- ----------- -----------
Net cash used in operating activities (4,539,296) (4,189,427) (2,763,810)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (695,118) (612,999) (899,245)
----------- ----------- -----------
Net cash used in investing activities (695,118) (612,999) (899,245)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of shares -- -- 81,849
Increase in long-term loans with silent partners 261,968 166,560 4,694
Repayment of bank loans (217,134) (1,569,424) (86,838)
Increase in long-term loans from related party 5,303,166 6,445,745 3,378,889
----------- ----------- -----------
Net cash provided by financing activities 5,348,000 5,042,881 3,378,594
Net increase (decrease) in cash and cash equivalents 113,586 240,455 (284,461)
Cash and cash equivalents, beginning of period 248,729 8,274 362,315
----------- ----------- -----------
Cash and cash equivalents, end of period 362,315 248,729 77,854
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest -- -- --
NON CASH INVESTING AND FINANCING ACTIVITIES
Conversion of long-term loans from related party into share capital -- -- 1,575,000
Acquisition of Lithiontech and repayment of short-term loan from
related party through increase long-term loan related party -- -- 191,741
The accompanying notes are an integral part of these financial statements.
F-6
GAIA HOLDING B.V. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND BUSINESS OF THE COMPANY
GAIA Holding B.V. (formerly known as Hill Gate Investments B.V. or the
"Company") was incorporated in 1990 and only had limited operations until the
acquisition of GAIA Akkumulatorenwerke GmbH (`GAIA GmbH) in February 1999.
GAIA GmbH develops innovative flat lithium ion batteries for large, high rate
applications including Hybrid Electric Vehicles (HEVs), other automotive
applications and energy storage devices for the distributed power/renewable
energy market. GAIA Holding and its subsidiaries are collectively referred to in
this document as GAIA Group.
Since the acquisition of GAIA GmbH, the GAIA Group qualifies as a development
stage enterprise primarily engaged in technology development activities, pilot
line manufacturing operations, recruiting personnel, and acquiring capital.
Prior to the acquisition of GAIA GmbH, the Company incurred accumulated losses
of approximately EUR 177,000.
Since the acquisition of GAIA GmbH, the GAIA Group has incurred substantial
operating losses and expects to incur additional operating losses over the next
several years. As of December 31, 2001, the Company had an accumulated deficit
of approximately EUR 18,188,152. Operations have been financed primarily through
the use of proceeds from loans from shareholders, other related parties, loans
from silent parties and bank borrowings secured by assets. The Company is
researching various alternatives to obtain funding for its operations such as
obtaining government co-financing for equipment purchases, lease equipment,
vendor financing or additional funds from existing investors. Failure to raise
sufficient capital could have a material adverse effect on the GAIA Group's
results of operations and financial condition.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
BASIS OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and
its subsidiaries. All significant intercompany accounts and transactions have
been eliminated. The results of the subsidiaries are included from their
effective dates of acquisition.
The outstanding shares of GAIA GmbH are held pursuant to certain Dutch and
German trust agreements by two Dutch entities (the "Nominal Stockholders") for
the risk and account of the Company. Based on the Dutch and German trust
agreements, the Nominal Stockholders are obliged to transfer the legal ownership
of the shares in GAIA GmbH without any further payments to the Company. Pursuant
to the trust agreements, the Company has the right to vote the shares of GAIA
held by the Nominal Stockholders. The results of GAIA GmbH are included in the
results of the Company as of the date of acquisition.
INTERIM FINANCIAL STATEMENTS
The accompanying consolidated financial statements of the Company at September
30, 2002 and for the nine months ended September 30, 2002 are unaudited and have
been prepared in accordance with accounting principles generally accepted in the
United States of America ("generally accepted accounting principles")
F-7
for interim financial information. All adjustments, consisting only of normal
recurring adjustments, have been made which, in the opinion of management, are
necessary for a fair presentation. The results of operations for the periods
presented are not necessarily indicative of the results that may be expected for
any future period.
ESTIMATES AND UNCERTAINTIES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
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 revenues and expenses during the reporting period.
Actual results, as determined at a later date, could differ from those
estimates.
FINANCIAL INSTRUMENTS
Financial instruments include cash and cash equivalents and accounts payable.
Management believes that the amounts reported for financial instruments are
reasonable approximations of their fair values due to their short-term nature.
CASH AND CASH EQUIVALENTS
GAIA considers all highly liquid investment instruments purchased with an
original maturity of three months or less to be cash equivalents.
INVENTORIES
Inventories primarily include raw materials and auxiliary materials. Inventories
are valued at the lower of cost or net realisable value. The cost of inventories
is determined by using the weighted average method. Cost elements included in
inventories comprise all costs of purchase and other costs incurred in bringing
the inventories to their present location and condition.
PROPERTY AND EQUIPMENT
Property and equipment are recorded at cost and primarily consists of land,
buildings, technical and laboratory equipment. In the period assets are retired
or otherwise disposed of, the costs and accumulated depreciation are removed
from the accounts, and any gain or loss on disposal is included in results of
operations. Property and equipment are depreciated using the straight-line
method over their estimated useful lives as follows:
Land and buildings 25 years
Technical and laboratory equipment 10 years
Other 1-5 years
INTANGIBLES
Intangibles consist of amounts capitalised for patents, which are recorded at
cost and are amortised using the straight-line method over their estimated
useful lives of 13 to 17 years. Amortisation starts at the moment of final
approval of the patent by the regulatory body.
Goodwill represents the difference between the acquisition price and the fair
value of the underlying net assets of the subsidiary acquired. Statement of
Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible
Assets" ("SFAS 142"), requires the discontinuance of amortisation related to
goodwill and indefinite lived intangible assets as from January 1, 2002. These
assets are subject to
F-8
impairment tests at least annually. At the acquisition of GAIA GmbH in February
1999, the Company recorded goodwill of EUR 4,718,810, which was primarily
allocated to in process research and development and workforce.
At the end of 2000, the Company concluded they would never achieve the desired
technical results with the existing formula used in the prototypes. Management
decided to develop a new formula and abandon the old formula. At the same time,
the Company dismissed and replaced the Chief Executive Officer and the majority
of key research and development personnel. As a result of these events above,
management concluded there was an impairment of the remaining net book value
ascribed to the workforce and as such decided to write-off the remaining value
of goodwill of EUR 112,000.
INCOME TAXES
Deferred tax assets and liabilities are computed for temporary differences
between the financial statement and tax bases of assets and liabilities that
will result in taxable or deductible amounts in the future based on enacted tax
laws and rates applicable to the periods in which the temporary differences are
expected to affect taxable income. Valuation allowances are established when
necessary to reduce deferred tax assets to the amount expected to be realized.
REVENUES
The Company performs certain research and development for other companies and
sells prototypes. Revenue is recognized as services are rendered.
LONG-LIVED ASSETS
The Company assesses the impairment of its long-lived assets whenever facts or
circumstances indicate the carrying amounts may not be recoverable in accordance
with SFAS 142 and SFAS No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets ("SFAS 144").
The Company compares the carrying value of such assets to the estimated future
undiscounted cash flows attributable to such assets. If the sum of the expected
cash flows (undiscounted and without finance charges) is less than the carrying
amount of the asset, the Company recognizes an impairment loss on the asset. In
that event, a loss is recognized for the amount by which the carrying value
exceeds the fair value of the long-lived asset. Fair value is determined by
quoted market prices in active markets, if available, or by using the
anticipated cash flows discounted at a rate commensurate with the risks
involved.
NEW ACCOUNTING PRONOUNCEMENTS
In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No.
143, "Accounting for Asset Retirement Obligations" ("SFAS 143") which is
effective for fiscal years beginning after June 15, 2002. SFAS 143 requires,
among other things, that the fair value of a liability for an asset retirement
obligation be recognized in the period in which it is incurred if a reasonable
estimate of fair value can be made. The associated asset retirement costs are
then capitalized as part of the carrying amount of the long-lived asset. SFAS
143 will be adopted no later than January 1, 2003. Management does not expect
the adoption of SFAS 143 to have a material impact on its consolidated financial
statements.
In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements No.
4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections"
("SFAS 145"). This statement eliminates the current requirement that gains and
losses on debt extinguishment must be classified as
F-9
extraordinary items in the income statement. Instead, such gains and losses will
be classified as extraordinary items only if they are deemed to be unusual and
infrequent, in accordance with the current GAAP criteria for extraordinary
classification. In addition, SFAS 145 eliminates an inconsistency in lease
accounting by requiring that modifications of capital leases that result in
reclassification as operating leases be accounted for consistent with
sale-leaseback accounting rules. SFAS 145 is effective for fiscal years
beginning after May 15, 2002 and will be adopted no later than January 1, 2003.
Management does not expect the adoption of SFAS 145 to have a material impact on
its consolidated financial statements.
In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities" ("SFAS 146"), which addresses accounting for
restructuring and similar costs. SFAS 146 supersedes previous accounting
guidance, principally Emerging Issues Task Force (EITF) Issue No. 94-3. SFAS 146
requires that the liability for costs associated with an exit or disposal
activity be recognized when the liability is incurred. Under EITF No. 94-3, a
liability for an exit cost was recognized at the date of a company's commitment
to an exit plan. SFAS 146 also establishes that the liability should initially
be measured and recorded at fair value. Accordingly, SFAS 146 may affect the
timing of recognizing future restructuring expenses as well as the amount
recognized. The Company will adopt the provisions of SFAS 146 for restructuring
activities initiated after December 31, 2002.
NOTE 3 - OPERATING AND LIQUIDITY DIFFICULTIES AND MANAGEMENT'S PLANS TO OVERCOME
The accompanying consolidated financial statements of the Company have been
prepared on a going concern basis, which contemplates the continuation of
operations, realization of assets and liquidation of liabilities in the ordinary
course of business. Since its inception, GAIA Group has incurred substantial
operating losses and expects to incur additional operating losses over the next
several years. Operations have been financed primarily through the use of
proceeds from loans from shareholders or other related parties, loans from
silent parties and bank borrowings secured by assets. Continuation of GAIA
Group's operations in 2002 and further is dependent upon obtaining further
financing from either the shareholders or other related parties or one of the
other alternatives as described in Note 1. These conditions raise substantial
doubt about GAIA Group's ability to continue as a going concern. The
accompanying consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
MANAGEMENT'S PLANS
GAIA GmbH has worked closely with selected portable electronics Original
Equipment Manufacturers ("OEMs") in the past, exploring various notebook
computer, PDA and wireless handset applications. Over the past few years GAIA
GmbH has refocused its unique extrusion technology and market activities to
concentrate on large, high rate battery applications including advanced
automotive batteries for 42-volt systems, Hybrid Electric Vehicles (HEVs) and
energy storage devices for the distributed power/renewable energy market. GAIA
GmbH is currently working on a prototype 42-volt automotive battery, which GAIA
GmbH has delivered to the European Astor programme in the third quarter of 2002.
GAIA GmbH has not yet delivered a prototype HEV, or stationary power battery for
testing by a third party.
F-10
Management's operating plan seeks to minimize GAIA Group's capital requirements,
but commercialization of GAIA Group's battery technology will require
substantial amounts of additional capital. GAIA Group expects that technology
development and operating and production expenses will increase significantly as
it continues to advance its battery technology and develop products for
commercial applications. The GAIA Group's working capital and capital
requirements will depend upon numerous factors, including, without limitation,
the progress of GAIA Group's technology development program, technological
advances, the status of competitors and the ability of LTC and GAIA Group to
collaborate.
GAIA Group does not currently have sufficient cash to achieve all of its
development and production objectives. GAIA Group needs to raise approximately
EUR 4,700,000 in order to have sufficient capital resources for its development,
production, operating and administrative needs until approximately December
2003.
There can be no assurance that funding will continue to be provided by the
shareholders in the amounts necessary to meet all of GAIA Group's obligations
until the closing of the financing. If no financing from related parties or
external parties is consummated, GAIA Group will assess all available
alternatives including a sale of its assets, the suspension of operations and
possibly liquidation, auction, bankruptcy, or other measures.
NOTE 4 - PROPERTY AND EQUIPMENT
Property and equipment is summarized as follows:
SEPTEMBER DECEMBER
30, 2002 31, 2001
--------- --------
EUR EUR
(unaudited)
Land and buildings 2,062,322 1,998,772
Technical and laboratory equipment 3,339,982 2,641,367
Asset under construction 591,242 511,480
Other 307,114 249,795
---------- ----------
6,300,660 5,401,414
Less: Accumulated depreciation and amortisation (1,957,710) (1,638,914)
---------- ----------
4,342,950 3,762,500
---------- ----------
F-11
NOTE 5 - INTANGIBLES
This pertains primarily to goodwill acquired at the acquisition of Dilo Trading
AG and Lithiontech Holding B.V. The acquisition occurred in June 6. We refer to
Note 11.
NOTE 6 - PREPAID EXPENSES AND OTHER CURRENT ASSETS
The balance as per December 31, 2001 primarily relates to a receivable with
respect to grants on investments in fixed assets of EUR 642,000 which has been
received in 2002.
NOTE 7 - INCOME TAXES
Dutch tax legislation does not permit a Dutch parent company and its foreign
subsidiaries to file a consolidated Dutch tax return. Dutch resident companies
are taxed on their worldwide income for corporate income tax purposes at a
statutory rate of 35%. No further taxes are payable on this profit unless the
profit is distributed. If certain conditions are met, income derived from
foreign subsidiaries is tax exempt in the Netherlands under the rules of the
Dutch "participation exemption". However, certain costs such as acquisition
costs and interest on loans related to foreign qualifying participations are not
deductible for Dutch corporate income tax purposes, unless those costs are
attributable to Dutch taxable income. When income derived by a Dutch company is
subject to taxation in the Netherlands as well as in other countries, generally
avoidance of double taxation can be obtained under the extensive Dutch tax
treaty network or Dutch domestic law.
For subsidiaries, local commercial and tax legislation contains provisions that
may imply more than one treatment for a transaction. Thus, management's
judgement of the companies' business activities and transactions may not
coincide with the interpretation of the tax authorities. In the event that a
particular transaction is challenged by the tax authorities the subsidiaries may
incur penalties and taxes on present and past transactions. Management believes
that the financial statements adequately reflect the activities of the
subsidiaries.
Deferred income taxes reflect the net effects of temporary differences between
the amounts of assets and liabilities for financial reporting purposes and the
amounts used for income tax purposes. The breakdown of the deferred tax asset as
at September 30, 2002 and at December 31, 2001 can be shown as follows:
SEPTEMBER DECEMBER
30, 2002 31, 2001
---------- --------
EUR EUR
(unaudited)
Tax losses carry forward
Net difference between the tax base and US GAAP book values 8,868,869 7,051,429
5,368,415 5,325,550
---------- ----------
14,237,284 12,376,979
---------- ----------
Less: valuation allowance (14,237,284) (12,376,979)
---------- ----------
-- --
---------- ----------
A valuation allowance is provided when it is more likely than not that some
portion of the deferred tax asset will not be realized. Management of the GAIA
Group has determined, based on its recurring net losses, lack of a commercially
viable product and limitations under current tax law, that a full valuation
allowance is appropriate.
F-12
NOTE 8 - OTHER CURRENT LIABILITIES AND ACCRUED EXPENSES:
SEPTEMBER DECEMBER
30, 2002 31, 2001
------- -------
EUR EUR
(unaudited)
Bank borrowings - short term 183,988 181,565
Accrued payroll - 69,688
Taxes payable 71,580 246,954
Accrued expenses 218,245 280,521
------- -------
Total other current liabilities 473,813 778,728
======= =======
NOTE 9 - LONG-TERM LIABILITIES
SEPTEMBER DECEMBER
30, 2002 31, 2001
---------- ----------
EUR EUR
(unaudited)
Loans from financial institutions 1,636,418 1,725,679
Subordinated loans from related party 20,277,040 16,706,157
Silent partnership loans - related party 2,436,000 2,331,000
Silent partnership loans 1,970,471 2,070,777
---------- ----------
26,319,929 22,833,613
========== ==========
Loans from financial institutions
The Company has two loans from financial institutions, which are collateralised
by tangible fixed assets. One loan is collateralised by land and buildings up to
an amount of EUR 945,000. For the other loan the Company has pledged machinery,
equipment and patents for an amount of EUR 2,019,000 as collateral for the
mortgage loan. The loans bear interest between 5,75 and 6,75% per annum and will
be fully repaid at December 31, 2014.
The redemption schedule of borrowings at September 30, 2002 is as follows:
September 30, 2006 and
2002 2003 2004 2005 later
------------- -------- --------- --------- -----------
EUR EUR EUR EUR EUR
Loans to financial institutions 183,988 47,619 50,188 53,400 1,483,245
F-13
Subordinated loans from related party
The Company has received subordinated loans from Hill Gate Capital N.V. (now
known as Arch Hill Real Estate N.V, who is related to one of the shareholders),
a related party. The loans bear cumulative interest at 6% per annum. Under the
contract terms, the loans can be called when the Company does not have any
further accumulated deficit.
Silent partnership loans - related party
Tamarcho GmbH, a related party, has a silent partnership participation in GAIA
GmbH amounting to EUR 1,862,125 bearing interest at 7% per annum. The amount
payable at September 30, 2002 and December 31, 2001 includes accrued interest of
EUR 572,875 and EUR 468,875, respectively. Under the existing agreement, the
principal including accumulated interest is due on December 31, 2008.
Silent partnership loans
At December 31, 2001, three other parties have provided silent partnership loans
to the Company for a total principal amount of EUR 1,992,709 bearing interest at
6% per annum. In 2002, a loan of EUR 59,310 including interest has been repaid
to one of the silent partners at the option of the Company. The amount payable
at September 30, 2002 and December 31, 2001 includes EUR 58,814 and EUR 78,068
in accrued interest, respectively. Under the existing agreements, the principal
amount is due on December 31, 2008.
NOTE 10 - COMMITMENTS AND CONTINGENCIES:
The Company leases cars under operational leases. The monthly payment amounts to
EUR 5,600 for an average remaining period of 1.5 years.
NOTE 11 - SUBSEQUENT EVENTS
On June 6, 2002 the Company acquired a 100% interest in Lithiontech B.V. from a
related party Lithiontech Holding B.V. for an amount of EUR 18,151. Lithiontech
B.V. has a 100% interest in Lithion Licensing B.V. and Dilo Trading AG. The
results of Litiontech B.V. and its subsidiaries are included in the results of
the Company as of the date of acquisition.
F-14
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
The following Unaudited Pro Forma Combined Condensed Financial Statements of
Lithium Technology Corporation (LTC) and GAIA Holding B. V. (GAIA Holding), a
private limited liability company incorporated under the laws of the
Netherlands, give effect to the share exchange between LTC and GAIA Holding
under the purchase method of accounting prescribed by SFAS 141, Business
Combinations. These pro forma statements are presented for illustrative purposes
only. The pro forma adjustments are based upon available information and
assumptions that management believes are reasonable. The Unaudited Pro Forma
Combined Condensed Financial Statements do not purport to represent what the
results of operations or financial position of LTC would actually have been if
the share exchange had in fact occurred on January 1, 2001, nor do they purport
to project the results of operations or financial position of LTC for any future
period or as of any date, respectively. Under the purchase method of accounting,
tangible and identifiable intangible assets acquired and liabilities assumed are
recorded at their estimated fair values. The estimated fair values and useful
lives of assets acquired and liabilities assumed are based on a management's
estimates and are subject to formal valuation adjustments.
These Unaudited Pro Forma Combined Condensed Financial Statements do not give
effect to any restructuring costs or to any potential cost savings or other
operating efficiencies that could result from the share exchange between LTC and
GAIA Holding. The consolidated financial statements of LTC for the year ended
December 31, 2001, are derived from audited consolidated financial statements
and are included in Form 10-KSB filed by LTC on March 28, 2002, with the
Securities and Exchange Commission. The consolidated financial statements of LTC
for the nine months ended September 30, 2002, are derived from unaudited
financial statements and are included in Form 10-QSB filed by LTC on November
14, 2002, with the Securities and Exchange Commission. The historical
consolidated financial statements of GAIA Holding for the year ended December
31, 2001 and the nine months ended September 30, 2002, are derived from certain
audited and unaudited financial statements contained in this amended Current
Report on Form 8K.
You should read the financial information in this section along with LTC's and
GAIA Holding's historical consolidated financial statements and accompanying
notes in prior Securities and Exchange Commission filings and in this amended
Current Report on Form 8K.
F-15
Lithium Technology Corporation
Unaudited Pro Forma Combined Condensed Balance Sheet
With GAIA Holding B.V.
September 30, 2002
Lithium GAIA Promissory Share
Technology Holding Note Conversion Exchange Pro Forma
Corporation B.V. Adjustment (A) Adjustments Combined
----------- ------- -------------- ----------- --------
ASSETS
Cash and cash equivalents $ 20,000 $ 77,000 $ 97,000
Inventories -- 55,000 55,000
Prepaid insurance and deferred charges 137,000 445,000 582,000
Total current assets 157,000 577,000 734,000
Due from related parties -- 2,407,000 2,407,000
Property and equipment, less
accumulated depreciation 258,000 4,292,000 4,550,000
Other assets 21,000 143,000 164,000
Intangibles, less accumulated amortization $ 5,752,000 (B) 8,191,000
2,439,000 (E)
$ 436,000 $ 7,419,000 $ - $ 8,191,000 $16,046,000
F-16
Lithium Technology Corporation
Unaudited Pro Forma Combined Condensed Balance Sheet
With GAIA Holdings B.V.
September 30, 2002
LIABILITIES AND STOCKHOLDER'S
EQUITY (DEFICIENCY)
Accounts payable $ 475,000 $ 668,000 $1,143,000
Accrued salaries 201,000 201,000
Notes payable 65,000 65,000
Convertible promissory notes 1,915,000 $ (1,915,000) -
Non-convertible promissory notes 500,000 500,000
Other current liabilities and accrued expenses 468,000 468,000
Total current liabilities 3,156,000 1,136,000 (1,915,000) - 2,377,000
LONG-TERM LIABILITIES
Convertible promissory notes 3,949,000 3,949,000
Loans from financial institutions 1,617,000 1,617,000
Subordinated loan from related party 20,039,000 20,039,000
Silent partnership loans-related party 2,407,000 2,407,000
Silent partner loans 1,947,000 1,947,000
Total long term liabilities 3,949,000 26,010,000 - 29,959,000
F-17
Lithium Technology Corporation
Unaudited Pro Forma Combined Condensed Balance Sheet
With GAIA Holding B.V.
September 30, 2002
STOCKHOLDER'S EQUITY (DEFICIENCY)
Preferred stock 1,000 (C) 1,000
Common stock 643,000 99,000 239,000 (99,000) (D) 882,000
Additional paid-in capital 70,358,000 1,557,000 1,676,000 (70,805,000) (D) 12,400,000
7,348,000 (B)
3,994,000 (B)
162,000 (B)
(6,865,000) (D)
4,008,000 (E)
761,000 (E)
108,000 (E)
99,000 (D)
(1,000) (C)
Cumulative translation adjustments 1,000 1,000
Accumulated deficit (6,865,000) (175,000) 6,865,000 (D) (8,365,000)
(5,752,000) (B)
(2,438,000) (E)
Deficit accumulated during development stage (70,805,000) (21,209,000) 70,805,000 (D) (21,209,000)
Total stockholder's equity
(deficiency) (6,669,000) (19,727,000) 1,915,000 8,191,000 (16,290,000)
Total liabilities and stockholder's
equity (deficiency) $ 436,000 $ 7,419,000 $ - $ 8,191,000 $16,046,000
See accompanying notes.
F-18
Lithium Technology Corporation
Unaudited Pro Forma Combined Condensed Statement of Operations
With GAIA Holdings B.V.
For the Nine Months Ended September 30, 2002
Lithium GAIA Promissory Share
Technology Holding Note Conversion Exchange Pro Forma
Corporation B. V. Adjustment(A) Adjustments Combined
REVENUES:
Development contracts and research grants $ 83,000 $ 567,000 $ 650,000
COSTS AND EXPENSES:
Engineering, research and development 1,314,000 1,719,000 3,033,000
General and administrative 1,183,000 785,000 1,968,000
Stock based compensation expense 2,755,000 295,000 3,050,000
Amortization of intangibles $ 2,048,000 (F) 2,048,000
5,252,000 2,799,000 2,048,000 10,099,000
OTHER INCOME (EXPENSE):
Interest expense, net of interest income (6,000) (800,000) (806,000)
Interest expense related to beneficial
conversion feature (18,714,000) (18,714,000)
Gain on insurance recovery 30,000 30,000
(18,690,000) (800,000) (19,490,000)
NET LOSS $(23,859,000) $(3,032,000) $ (2,048,000) $(28,939,000)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING 63,922,355 23,932,087 (G) 111,340,524 (G) 199,194,966
BASIC AND DILUTED NET LOSS PER SHARE $ (0.37) $ (0.15)
See accompanying notes.
F-19
Lithium Technology Corporation
Unaudited Pro Forma Combined Condensed Statement of Operations
With GAIA Holdings B. V.
For the Year Ended December 31, 2001
Lithium GAIA Promissory Share
Technology Holding Note Conversion Exchange Pro Forma
Corporation B. V. Adjustment(A) Adjustments Combined
REVENUES:
Development contracts and research grants $ 22,000 $ 410,000 $ 432,000
COSTS AND EXPENSES:
Engineering, research and development 1,060,000 2,149,000 3,209,000
General and administrative 954,000 1,075,000 2,029,000
Stock based compensation expense 469,000 326,000 795,000
Intangibles expensed
Amortization of intangibles $ 2,730,000 (F) 2,730,000
2,483,000 3,550,000 2,730,000 8,763,000
OTHER INCOME (EXPENSE):
Interest expense, net of interest income (7,000) (1,058,000) (1,065,000)
Interest expense related to beneficial
conversion feature (80,000) (80,000)
Gain on sale of subsidiary 149,000 149,000
(87,000) (909,000) (996,000)
NET LOSS $(2,548,000) $(4,049,000) $ (2,730,000) $ (9,327,000)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING 51,303,305 23,932,087 (G) 111,340,524 (G) 186,575,916
BASIC AND DILUTED NET LOSS PER SHARE $ (0.05) $ (0.05)
See accompanying notes
F-20
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
On October 4, 2002, LTC closed the Share Exchange pursuant to which LTC acquired
60% of the outstanding shares of GAIA Holding. On December 13, 2002, LTC
acquired the remaining 40% of the outstanding shares of GAIA Holding in
accordance with a Share Exchange Agreement dated November 25, 2002. The
transaction has been accounted for as a reverse acquisition whereby the total
purchase price of the share exchange has been allocated on a preliminary basis
to LTC, primarily intangibles and in process research and development.
The unaudited pro forma combined condensed balance sheet as of September 30,
2002 has been prepared as if the share exchange and the other transactions had
occurred on that date. The unaudited pro forma combined condensed statement of
operations for the nine months ended September 30, 2002 and for the year ended
December 31, 2001 assumes that the share exchange and the other transactions
were consummated on January 1, 2001.
The adjustments to the unaudited pro forma combined condensed financial
statements for the year ended December 31, 2001 and the nine months ended
September 30, 2002 are as follows:
(A) To reflect the conversion of $1,914,567 principal of LTC
non-interest bearing promissory notes into 23,932,087 shares
of LTC common stock.
(B) To reflect the issuance of 60,000 shares on October 4, 2002 of
LTC preferred stock in connection with the share exchange
which are convertible into 66,804,314 shares of LTC common
stock. The value of the shares, $7,348,475, was based on the
LTC closing price ($0.11) as of October 4, 2002. The October
4, 2002 date was used because there were significant
modifications made to the agreement through the date of
closing.
Fair value of preferred stock consideration $ 7,348,000
Proportion of LTC net liabilities
assumed (after conversion) 84% 3,994,000
Transaction costs 162,000
Estimated Excess Purchase Price $ 11,504,000
Allocation:
Intangibles $ 5,752,000
In-process research and development
(estimated at 50%) 5,752,000
Total Allocation $ 11,504,000
Deferred taxes have not been recorded on the assumption that
net operating losses will be able to be recognized to offset
the amount of deferred tax liability recognized in purchase
accounting.
F-21
(C) To reflect the issuance of 600 and 400 shares of LTC
preferred shares issued in the Share Exchange.
(D) The share exchange between LTC and GAIA Holding has been
accounted for as a reverse acquisition. These adjustments
reflect the elimination of LTC's historical additional paid in
capital, accumulated deficit and deficit accumulated during
the development stage and GAIA Holding's historical common
stock since GAIA Holding will be the acquirer for accounting
purposes.
(E) To reflect the issuance of an additional 40,000 preferred
shares on December 18, 2002 of LTC preferred stock in
connection with the November 25, 2002 Share Exchange Agreement
which are convertible into 44,536,210 common LTC shares. The
value of the shares, $4,008,259, was based on the LTC closing
price ($0.09) on November 25, 2002.
Fair value of preferred stock consideration $ 4,008,000
Proportion of LTC net liabilities
assumed (after conversion) 16% 761,000
Transaction costs 108,000
Estimated Excess Purchase Price $ 4,877,000
Allocation:
Intangibles $ 2,439,000
In-process research and development
(estimated at 50%) 2,438,000
Total Allocation $ 4,877,000
Deferred taxes have not been recorded on the assumption
that net operating losses will be able to be recognized
to offset the amount of deferred tax liability recognized
in purchase accounting.
(F) Amortization of Intangibles using an estimated useful life of
three years.
(G) The weighted average number of common shares outstanding and
the basic and diluted net loss per share have been stated to
include the conversion of $1,914,567 principal of LTC
promissory notes into 23,932,087 shares of LTC common stock
and the conversion of the LTC preferred stock issued in the
share exchange into 111,340,524 shares of LTC common stock.
(H) Conversion rates from EUR into US Dollars of GAIA Holding for
purposes of preparing the Unaudited Pro Forma Combined
Financial Statements are as follows:
Balance Sheet as of September 30, 2002. (0.9882286).
Operating results year ended December 31, 2001.
(89541222).
Operating results nine months ended September 30, 2002.
(0.926).
F-22
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: December 20, 2002
LITHIUM TECHNOLOGY CORPORATION
(Registrant)
By: /s/ David J. Cade
------------------
David J. Cade
Chairman and Chief Executive
Officer
By: /s/ Ralf Tolksdorf
------------------
Ralf Tolksdorf
Chief Financial Officer