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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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95-2390133
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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3888 Calle Fortunada, San Diego, California
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92123
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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o
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Accelerated filer
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x
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Non-accelerated filer
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o
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(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
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o
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Page
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Item 1.
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Financial Statements
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March 31,
2017 |
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December 31,
2016 |
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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20,894
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$
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25,359
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Trade and other accounts receivable, net of allowance for doubtful accounts
of
$26 at both March 31, 2017 and December 31, 2016
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24,053
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20,441
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Inventories, net
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30,416
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32,248
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Prepaid expenses and other current assets
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4,876
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4,407
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Total current assets
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80,239
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82,455
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Property and equipment, net
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24,721
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26,120
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Goodwill
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23,170
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22,799
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Pension asset
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9,154
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8,887
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Other non-current assets
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617
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613
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Total assets
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$
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137,901
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$
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140,874
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
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Accounts payable and accrued liabilities
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$
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20,633
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$
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19,181
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Accrued employee compensation
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6,173
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6,152
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Deferred revenue and customer deposits
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6,489
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3,967
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Short-term borrowings and current portion of long-term debt
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41
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40
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Total current liabilities
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33,336
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29,340
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Deferred tax liability, long-term
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8,448
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8,580
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Long-term debt, excluding current portion
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34
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43
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Other long-term liabilities
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2,008
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2,089
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Total liabilities
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43,826
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40,052
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Commitments and contingencies (Note 11)
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Stockholders’ equity:
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Common stock, $0.10 par value per share, 80,000 shares authorized at March 31, 2017 and December 31, 2016; 32,541 and 32,135 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively
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3,251
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3,210
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Additional paid-in capital
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298,586
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296,316
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Accumulated deficit
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(214,503
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)
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(204,104
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)
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Accumulated other comprehensive income
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6,741
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5,400
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Total stockholders’ equity
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94,075
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100,822
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Total liabilities and stockholders’ equity
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$
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137,901
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$
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140,874
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Three Months Ended
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March 31,
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2017
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2016
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Revenue
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$
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26,686
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$
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35,203
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Cost of revenue
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20,495
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25,550
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Gross profit
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6,191
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9,653
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Operating expenses:
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Selling, general and administrative
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9,540
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10,098
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Research and development
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4,686
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5,607
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Restructuring and exit costs
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997
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188
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Total operating expenses
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15,223
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15,893
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Loss from operations
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(9,032
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)
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(6,240
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)
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Interest expense, net
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63
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70
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Other income
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(1
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)
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(84
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)
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Foreign currency exchange loss, net
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97
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139
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Loss before income taxes
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(9,191
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)
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(6,365
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)
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Income tax provision
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1,208
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483
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Net loss
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$
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(10,399
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)
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$
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(6,848
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)
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Net loss per share
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Basic and diluted
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$
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(0.32
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)
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$
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(0.22
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)
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Weighted average common shares outstanding:
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Basic and diluted
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32,197
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31,650
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Three Months Ended March 31,
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2017
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2016
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Net loss
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$
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(10,399
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)
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$
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(6,848
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)
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Other comprehensive income, net of tax:
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Foreign currency translation adjustment
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1,312
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1,942
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Defined benefit pension plan, net of tax:
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Amortization of deferred loss, net of tax provision
of $
12 for the three months ended March 31, 2016
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—
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48
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Amortization of prior service cost, net of tax provision of
$7 for each of the three months ended March 31, 2017 and 2016
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29
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30
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Other comprehensive income, net of tax
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1,341
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2,020
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Comprehensive loss
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$
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(9,058
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)
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$
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(4,828
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)
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Three Months Ended March 31,
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2017
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2016
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OPERATING ACTIVITIES:
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Net loss
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$
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(10,399
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)
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$
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(6,848
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)
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Adjustments to reconcile net loss to net cash used in operating activities:
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Depreciation
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2,148
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2,587
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Pension cost
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86
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157
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Stock-based compensation expense
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1,538
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1,203
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Gain on sale of property and equipment
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—
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(84
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)
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Unrealized loss on foreign currency exchange rates
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26
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57
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Provision for losses on accounts receivable
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—
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51
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Provision for (recovery of) losses on inventory
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17
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(10
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)
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Provision for warranties
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189
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139
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Changes in operating assets and liabilities:
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Trade and other accounts receivable
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(3,432
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)
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13,076
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Inventories
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1,922
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(1,376
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)
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Prepaid expenses and other assets
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(453
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)
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132
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Pension asset
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(155
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)
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(139
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)
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Accounts payable and accrued liabilities
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1,571
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(10,563
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)
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Deferred revenue and customer deposits
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2,626
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304
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Accrued employee compensation
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785
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(192
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)
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Deferred tax liability
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(209
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)
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81
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Other long-term liabilities
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(85
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)
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(169
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)
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Net cash used in operating activities
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(3,825
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)
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(1,594
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)
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INVESTING ACTIVITIES:
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Purchases of property and equipment
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(945
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)
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(2,238
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)
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Proceeds from sale of property and equipment
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—
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84
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Net cash used in investing activities
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(945
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)
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(2,154
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)
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FINANCING ACTIVITIES:
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Principal payments on long-term debt and short-term borrowings
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(10
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)
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(11
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)
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Proceeds from issuance of common stock under equity compensation plans
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—
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346
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Net cash (used in) provided by financing activities
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(10
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)
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335
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Effect of exchange rate changes on cash, cash equivalents and restricted cash
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315
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|
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620
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Decrease in cash, cash equivalents and restricted cash
|
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(4,465
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)
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(2,793
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)
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Cash, cash equivalents and restricted cash, beginning of period
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25,359
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24,782
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Cash, cash equivalents and restricted cash, end of period
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$
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20,894
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$
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21,989
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•
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Ultracapacitors:
The Company’s primary focus, ultracapacitors, are energy storage devices that possess a unique combination of high power density, extremely long operational life and the ability to charge and discharge very rapidly. The Company’s ultracapacitor cells, multi-cell packs and modules provide highly reliable energy storage and power delivery solutions for applications in multiple industries, including automotive, bus, rail and truck in transportation and grid energy storage, and wind in renewable energy.
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•
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High-Voltage Capacitors:
The Company’s CONDIS
®
high-voltage capacitors are designed and manufactured to perform reliably for decades in all climates. These products include grading and coupling capacitors and capacitive voltage dividers that are used to ensure the safety and reliability of electric utility infrastructure and other applications involving transport, distribution and measurement of high-voltage electrical energy.
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Three Months Ended March 31,
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2017
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2016
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Numerator
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Net loss
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$
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(10,399
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)
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$
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(6,848
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)
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Denominator
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Weighted-average common shares outstanding
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32,197
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31,650
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Net loss per share
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Basic and diluted
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$
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(0.32
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)
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$
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(0.22
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)
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Three Months Ended March 31,
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2017
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2016
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Outstanding options to purchase common stock
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|
352
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|
907
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Unvested restricted stock awards
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58
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216
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Unvested restricted stock unit awards
|
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2,356
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|
1,773
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Employee stock purchase plan awards
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|
57
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|
|
90
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|
Bonus to be paid in stock awards
|
|
102
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|
|
104
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March 31,
2017 |
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December 31,
2016 |
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Raw materials and purchased parts
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$
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12,176
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|
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$
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12,980
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Work-in-process
|
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1,616
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|
|
858
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Finished goods
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17,737
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19,492
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Reserves
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(1,113
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)
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(1,082
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)
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Total inventories, net
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$
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30,416
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$
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32,248
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Three Months Ended March 31,
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2017
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2016
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Beginning balance
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$
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1,213
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$
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1,288
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Product warranties issued
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|
137
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|
213
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Settlement of warranties
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(104
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)
|
|
(226
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)
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Changes related to preexisting warranties
|
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52
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(69
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)
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Ending balance
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$
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1,298
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$
|
1,206
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Balance at December 31, 2016
|
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$
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22,799
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Foreign currency translation adjustments
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371
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|
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Balance at March 31, 2017
|
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$
|
23,170
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|
|
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Foreign
Currency Translation Adjustment |
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Defined Benefit
Pension Plan |
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Accumulated
Other Comprehensive Income |
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Affected Line Items in the Statement of Operations
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||||||
Balance as of December 31, 2016
|
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$
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7,826
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|
|
$
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(2,426
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)
|
|
$
|
5,400
|
|
|
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Other comprehensive income before reclassification
|
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1,312
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|
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—
|
|
|
1,312
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Amounts reclassified from accumulated other comprehensive income
|
|
—
|
|
|
29
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|
|
29
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Cost of Sales, Selling, General and Administrative and Research and Development Expense
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Net other comprehensive income for the
three months ended March 31, 2017
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1,312
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|
29
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|
|
1,341
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Balance as of March 31, 2017
|
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$
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9,138
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|
|
$
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(2,397
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)
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$
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6,741
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|
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Employee Severance Costs
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Restructuring liability as of December 31, 2016
|
|
$
|
—
|
|
Costs incurred
|
|
997
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|
|
Amounts paid
|
|
(308
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)
|
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Restructuring liability as of March 31, 2017
|
|
$
|
689
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Three Months Ended March 31, 2016
|
||
Total gain (loss)
|
|
$
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(15
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)
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|
|
Three Months Ended March 31, 2016
|
||
Total gain (loss)
|
|
$
|
(18
|
)
|
|
|
Three Months Ended March 31,
|
||||
|
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2017
|
|
2016
|
||
Expected dividend yield
|
|
—
|
%
|
|
—
|
%
|
Expected volatility
|
|
53
|
%
|
|
62
|
%
|
Risk-free interest rate
|
|
1.55
|
%
|
|
1.07
|
%
|
Expected term (in years)
|
|
2.8
|
|
|
3.0
|
|
|
|
Three Months Ended March 31,
|
||||||
RSU Type
|
|
2017
|
|
2016
|
||||
Service-based
|
|
$
|
667
|
|
|
$
|
533
|
|
Performance objectives
|
|
6
|
|
|
12
|
|
||
Market-condition
|
|
192
|
|
|
191
|
|
||
|
|
$
|
865
|
|
|
$
|
736
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Expected dividend yield
|
|
—
|
%
|
|
—
|
%
|
||
Expected volatility
|
|
29
|
%
|
|
60
|
%
|
||
Risk-free interest rate
|
|
0.62
|
%
|
|
0.49
|
%
|
||
Expected term (in years)
|
|
0.5
|
|
|
0.5
|
|
||
Fair value per share
|
|
$
|
1.19
|
|
|
$
|
2.27
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Cost of revenue
|
|
$
|
193
|
|
|
$
|
235
|
|
Selling, general and administrative
|
|
1,069
|
|
|
671
|
|
||
Research and development
|
|
276
|
|
|
297
|
|
||
Total stock-based compensation expense
|
|
$
|
1,538
|
|
|
$
|
1,203
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Service cost
|
|
$
|
241
|
|
|
$
|
290
|
|
Interest cost
|
|
56
|
|
|
61
|
|
||
Expected return on plan assets
|
|
(247
|
)
|
|
(291
|
)
|
||
Prior service cost amortization
|
|
36
|
|
|
37
|
|
||
Deferred loss amortization
|
|
—
|
|
|
60
|
|
||
Net periodic pension cost
|
|
$
|
86
|
|
|
$
|
157
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
dependence upon the sale of products to a small number of customers and vertical markets, some of which are heavily dependent on government funding or government subsidies which may or may not continue in the future;
|
•
|
uncertainties related to the global geopolitical landscape and the recent elections in the United States;
|
•
|
risks related to acquisitions and potential for unsuccessful integration of acquired businesses;
|
•
|
risk that our restructuring efforts may not be successful and that we may not be able to realize the anticipated cost savings and other benefits;
|
•
|
our ability to obtain sufficient capital to meet our operating or other needs;
|
•
|
downward pressures on product pricing from increased competition and potential shift in sales mix with respect to low margin and high margin business;
|
•
|
our ability to manage and minimize the impact of unfavorable legal proceedings;
|
•
|
risk that activist stockholders attempt to effect changes to our company which could adversely affect our corporate governance;
|
•
|
risks related to our international operations including, but not limited to, our ability to adequately comply with the changing rules and regulations in countries where our business is conducted, our ability to oversee and control our foreign subsidiaries and their operations, our ability to effectively manage foreign currency exchange rate fluctuations arising from our international operations, and our ability to continue to comply with the U.S. Foreign Corrupt Practices Act as well as the anti-bribery laws of foreign jurisdictions;
|
•
|
dependence upon the sale of products into Asia and Europe, where macroeconomic factors outside our control may adversely affect our sales;
|
•
|
our ability to remain competitive and stimulate customer demand through successful introduction of new products, and to educate our prospective customers on the products we offer;
|
•
|
successful acquisition, development and retention of key personnel;
|
•
|
our ability to effectively manage our reliance upon certain suppliers of key component parts, specialty equipment and logistical services;
|
•
|
our ability to manage product quality problems;
|
•
|
our ability to protect our intellectual property rights and to defend claims against us;
|
•
|
our ability to effectively identify, enter into, manage and benefit from strategic alliances;
|
•
|
occurrence of a catastrophic event at any of our facilities;
|
•
|
occurrence of a technology systems failure, network disruption, or breach in data security, and
|
•
|
our ability to match production volume to actual customer demand.
|
•
|
Executive Overview
|
•
|
Current Year Highlights
|
•
|
Results of Operations
|
•
|
Liquidity and Capital Resources
|
•
|
Critical Accounting Estimates
|
•
|
Recent Accounting Pronouncements
|
•
|
Off Balance Sheet Arrangements
|
•
|
In January 2017, we announced a definitive agreement with CRRC-SRI to localize manufacturing of our ultracapacitor-based modules for use in the China new energy bus market. Under the terms of the agreement, localized production of our ultracapacitor-based modules is expected to begin in China in the second half of 2017, coinciding with the peak buying season for China's new energy bus market. The production of bus modules extends our strategic partnership with CRRC-SRI and we believe will enable us to compete more effectively in the China bus market moving forward.
|
•
|
In February 2017, we announced that we entered into an agreement to acquire substantially all of the assets and business of Nesscap Energy, Inc., a developer and manufacturer of ultracapacitor products for use in transportation, renewable energy, industrial and consumer markets. On April 28, 2017, we completed this acquisition through the issuance of approximately 4.1 million shares of Maxwell common stock and the assumption of certain liabilities. The acquisition of Nesscap adds complementary businesses to our operations and expands our portfolio of products and we believe the acquisition will add value for our customers.
|
•
|
In April 2017, we announced the signing of a stock purchase agreement with SDIC Fund Management Co., Ltd. ("SDIC Fund Management"), which is expected to bring approximately $46.6 million in cash to Maxwell before transaction costs. The cash is to be used for strategic developments, including dry battery electrode development, as well as working capital and general corporate purposes. SDIC Fund Management has significant investments in China's energy storage industry, including top battery companies, major system integrators in the new energy market, as well as leading OEMs in the China auto and grid industries. Following the closing of the transaction, SDIC Fund Management's ownership stake in Maxwell's common stock is anticipated to represent approximately 19.9% of Maxwell's total issued and outstanding shares of common stock on a pre-issuance basis.
|
|
|
Three Months Ended March 31,
|
||||
|
|
2017
|
|
2016
|
||
Revenue
|
|
100
|
%
|
|
100
|
%
|
Cost of revenue
|
|
77
|
%
|
|
73
|
%
|
Gross profit
|
|
23
|
%
|
|
27
|
%
|
Operating expenses:
|
|
|
|
|
||
Selling, general and administrative
|
|
36
|
%
|
|
28
|
%
|
Research and development
|
|
17
|
%
|
|
16
|
%
|
Restructuring and exit costs
|
|
4
|
%
|
|
1
|
%
|
Total operating expenses
|
|
57
|
%
|
|
45
|
%
|
Loss before income taxes
|
|
(34
|
)%
|
|
(18
|
)%
|
Income tax provision
|
|
5
|
%
|
|
1
|
%
|
Net loss
|
|
(39
|
)%
|
|
(19
|
)%
|
|
|
Three Months Ended March 31,
|
|||||||||||||
|
|
2017
|
|
2016
|
|
Decrease
|
|
% Change
|
|||||||
Revenue
|
|
$
|
26,686
|
|
|
$
|
35,203
|
|
|
$
|
(8,517
|
)
|
|
(24
|
)%
|
Cost of revenue
|
|
20,495
|
|
|
25,550
|
|
|
(5,055
|
)
|
|
(20
|
)%
|
|||
% of Revenue
|
|
77
|
%
|
|
73
|
%
|
|
|
|
|
|||||
Gross profit
|
|
$
|
6,191
|
|
|
$
|
9,653
|
|
|
$
|
(3,462
|
)
|
|
(36
|
)%
|
% of Revenue
|
|
23
|
%
|
|
27
|
%
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|||||||||||||
|
|
2017
|
|
2016
|
|
Decrease
|
|
% Change
|
|||||||
Selling, general and administrative
|
|
$
|
9,540
|
|
|
$
|
10,098
|
|
|
$
|
(558
|
)
|
|
(6
|
)%
|
% of Revenue
|
|
36
|
%
|
|
28
|
%
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|||||||||||||
|
|
2017
|
|
2016
|
|
Decrease
|
|
% Change
|
|||||||
Research and development
|
|
$
|
4,686
|
|
|
$
|
5,607
|
|
|
$
|
(921
|
)
|
|
(16
|
)%
|
% of Revenue
|
|
17
|
%
|
|
16
|
%
|
|
|
|
|
|
|
Employee Severance Costs
|
||
Restructuring liability as of December 31, 2016
|
|
$
|
—
|
|
Costs incurred
|
|
997
|
|
|
Amounts paid
|
|
(308
|
)
|
|
Restructuring liability as of March 31, 2017
|
|
$
|
689
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Total cash provided by (used in):
|
|
|
|
|
||||
Operating activities
|
|
$
|
(3,825
|
)
|
|
$
|
(1,594
|
)
|
Investing activities
|
|
(945
|
)
|
|
(2,154
|
)
|
||
Financing activities
|
|
(10
|
)
|
|
335
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
|
315
|
|
|
620
|
|
||
Decrease in cash and cash equivalents
|
|
$
|
(4,465
|
)
|
|
$
|
(2,793
|
)
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 6.
|
Exhibits
|
Exhibit
Number |
|
|
Description of Document
|
|
|
|
|
3.1
|
|
|
Amended and Restated Bylaws of Maxwell Technologies, Inc. (incorporated herein by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on February 27, 2017 (SEC file no. 001-15477)).
|
|
|
|
|
10.1
|
|
|
Localization Agreement, dated January 25, 2017, by and between Maxwell Technologies, Inc. and CRRC Qingdao Sifang Rolling Stock Research Institute Co., Ltd. (incorporated herein by reference to Exhibit 10.25 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 (SEC file no. 001-15477)).†
|
|
|
|
|
10.2
|
|
|
Amendment No. 4 to Loan and Security Agreement between Maxwell Technologies, Inc. and East West Bank, dated March 1, 2017 (incorporated herein by reference to Exhibit 10.26 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 (SEC file no. 001-15477)).
|
|
|
|
|
10.3
|
|
|
Arrangement Agreement, dated February 28, 2017, between Maxwell Technologies, Inc. and Nesscap Energy, Inc. (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on February 28, 2017 (SEC file no. 001-15477)).
|
|
|
|
|
10.4
|
|
|
Amending Agreement to the Arrangement Agreement, dated March 21, 2017, between Maxwell Technologies, Inc. and Nesscap Energy, Inc. *
|
|
|
|
|
10.5
|
|
|
Form of Voting Agreement, dated February 28, 2017, among Maxwell Technologies, Inc., Nesscap Energy, Inc. and each of the shareholders a party thereto (incorporated herein by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on February 28, 2017 (SEC file no. 001-15477)).
|
|
|
|
|
10.6
|
|
|
Principal Shareholder Agreement, dated February 28, 2017, among Maxwell Technologies, Inc. and I2BF Energy, Limited and Arbat Capital Group Ltd. (incorporated herein by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the SEC on February 28, 2017 (SEC file no. 001-15477)).
|
|
|
|
|
10.7
|
|
|
Stock Purchase Agreement, dated April 10, 2017, between Maxwell Technologies, Inc. and SDIC Fund Management Co., Ltd. (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 10, 2017 (SEC file no. 001-15477)).
|
|
|
|
|
10.8
|
|
|
Principal Shareholder Agreement, dated April 10, 2017, between Maxwell Technologies, Inc. and SDIC Fund Management Co., Ltd. (incorporated herein by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 10, 2017 (SEC file no. 001-15477)).
|
|
|
|
|
10.9
|
|
|
Registration Rights Agreement, dated April 10, 2017, between Maxwell Technologies, Inc. and SDIC Fund Management Co., Ltd. (incorporated herein by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 10, 2017 (SEC file no. 001-15477)).
|
|
|
|
|
10.10
|
|
|
Agreement, dated as of April 10, 2017, by and among Maxwell Technologies, Inc. and Viex Capital Advisors, LLC and its affiliates (incorporated herein by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 10, 2017 (SEC file no. 001-15477)).
|
|
|
|
|
10.11
|
|
|
Form of Non-Employee Director Restricted Stock Unit Deferral Election. *
|
|
|
|
|
10.12
|
|
|
Form of Non-Employee Director Fee Election. *
|
|
|
|
|
31.1
|
|
|
Certification of Principal Executive Officer pursuant to Rule 13a-14(a) (Section 302 Certification) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *
|
|
|
|
|
31.2
|
|
|
Certification of Principal Financial Officer pursuant to Rule 13a-14(a) (Section 302 Certification) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *
|
|
|
|
|
32
|
|
|
Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350 (Section 906 Certification), as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
|
|
|
|
|
101
|
|
|
The following financial statements and footnotes from the Maxwell Technologies, Inc. Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 formatted in Extensible Business Reporting Language (XBRL): (i) Condensed Consolidated Balance Sheets; (ii) Condensed Consolidated Statements of Operations; (iii) Condensed Consolidated Statements of Comprehensive Income (Loss) (iv) Condensed Consolidated Statements of Cash Flows; and (v) the Notes to Condensed Consolidated Financial Statements. *
|
*
|
Filed herewith.
|
†
|
This Exhibit has been filed separately with the Secretary of the Securities and Exchange Commission without redaction pursuant to a Confidential Treatment Request under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
|
|
|
|
MAXWELL TECHNOLOGIES, INC.
|
|
|
|
|
|
|
Date:
|
May 10, 2017
|
|
By:
|
/s/ Franz Fink
|
|
|
|
|
Franz Fink
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
Date:
|
May 10, 2017
|
|
By:
|
/s/ David Lyle
|
|
|
|
|
David Lyle
|
|
|
|
|
Senior Vice President, Chief Financial Officer, Treasurer and Secretary
|
1.
|
the parties hereto entered into an arrangement agreement dated February 28, 2017 (the “Arrangement Agreement”) which includes a Plan of Arrangement set out in Schedule “A” thereto (the “Plan of Arrangement”); and
|
2.
|
the parties desire to amend the Plan of Arrangement as set out herein.
|
1.
|
Sections 3.1(c)(ii) is deleted;
|
2.
|
the words “including to complete the distribution of certain Consideration Shares contemplated herein” in Section 3.1(d) are deleted; and
|
3.
|
Section 3.2 is deleted and replaced in its entirety with the following:
|
|
)
) ) ) ) ) ) ) |
NESSCAP ENERGY INC.
|
|
Per:
|
/s/ James Zuidema
|
||
|
Name: James Zuidema
|
||
|
Title: Chief Executive Officer
|
||
|
|
||
|
)
) ) ) ) ) ) ) |
MAXWELL TECHNOLOGIES, INC.
|
|
Per:
|
/s/ Franz Fink
|
||
|
Name: Franz Fink
|
||
|
Title: CEO & President
|
||
|
|
Name of Recipient:
|
_______________________________________
|
Awards Covered by Deferral Election:
|
This election form applies to the annual restricted stock unit award to be granted to me pursuant to the Company’s non-employee director compensation program in [Year].
|
Election Deadline:
|
For [Year] only: [Month Day, Year]
|
1.
|
If no deferral election is made, the restricted stock unit award(s) described above will be settled promptly on or after the date when they vest but in any event by March 15
th
of the calendar year following the calendar year in which they vest.
|
2.
|
A deferral election may be made
only
prior to the election deadline specified above. The election form must be signed and must be received by the Company’s Legal Department on or before the election deadline.
|
3.
|
Once the election form has been received by the Company, the deferral election is
irrevocable
.
|
4.
|
A deferred settlement date may be elected, as described below. In the event a deferred settlement date is elected, the restricted stock unit award(s) covered by this election will be settled on the
earliest
of the events described in Paragraphs 1-3 below or Paragraphs 1-4 below, as applicable (the event described in Paragraph 4 is optional). At the time of a deferred settlement, one share of the Company’s common stock will be issued for each vested restricted stock unit. However, the Company retains discretion to substitute an equivalent amount of cash for each underlying share, determined on the basis of the Fair Market Value (as defined in the 2013 Omnibus Equity Incentive Plan) of the stock at the time a restricted stock unit is settled.
|
5.
|
If a deferred settlement date is elected, the restricted stock unit awards covered by this election will be subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). The Company has attempted in good faith to structure this deferral election in a manner that conforms to the requirements of Code Section 409A(a)(2), (3) and (4), and any ambiguities herein will be interpreted to so comply with
these requirements to the maximum extent permissible. To the extent the IRS challenges whether this award in fact complies with Code Section 409A(a)(2), (3) and (4),
|
Non-Employee Annual RSU Award Election Form
|
|
1
|
6.
|
A deferral election does
not
affect vesting of a restricted stock unit award. If your service (as defined in the applicable Restricted Stock Unit Award Agreement) terminates for any reason, then the unvested portion of the restricted stock unit award will be forfeited, as provided in the Restricted Stock Unit Award Agreement.
|
1.
|
Basic Deferral Election
. I hereby elect to have the restricted stock unit awards covered by this election (to the extent vested) settled promptly on or after February 20
th
of the following year:
|
2.
|
Death
. If I die, then the restricted stock unit awards covered by this election (to the extent vested) will be settled as soon as reasonably practicable after my death, and in any event prior to the end of the calendar year in which I die.
|
3.
|
Change in Control
. If the Company is subject to a Change in Control (as defined in the Company’s 2013 Omnibus Equity Incentive Plan on the date of this election), then the restricted stock unit awards covered by this election (to the extent vested) will be settled immediately prior to the effective time of the transaction that constitutes the Change in Control. The foregoing notwithstanding, a transaction will
not
constitute a Change in Control for purposes of this deferral election unless it also constitutes a “change in control event” as defined in the Treasury Regulation 1.409A-3(i)(5).
|
4.
|
Separation from Service
. By checking the “Yes” box, I elect to have the restricted stock unit awards covered by this election (to the extent vested) settled on an accelerated basis in the event of my “separation from service
(1)
” (as defined in the Income Tax Regulations under Code Section 409A as in effect on the date of this election). The restricted stock unit awards will be settled promptly on or after the date of my separation from service, but will in any event be settled prior to the end of the calendar year in which my separation from service occurs.
|
Non-Employee Annual RSU Award Election Form
|
|
2
|
|
o
|
Yes
|
|
o
|
No
|
|
|
|
Signature
|
|
Date
|
|
|
|
|
|
|
[Name]
|
|
Date
|
|
|
|
Non-Employee Annual RSU Award Election Form
|
|
3
|
•
|
Complete Section 1 if you wish to receive your director fees described below in the form of fully vested restricted stock unit awards.
|
•
|
Complete Sections 1
and
3 if you wish to elect a deferred settlement date for such awards.
|
1.
|
Director Fees Covered by Election
: My election applies to the following portion of all Director Fees that I may be entitled to receive for the second, third and fourth quarters of calendar year [Year] (the “
Election Period
”):
|
2.
|
Payment of Director Fees in RSUs
. I understand that, in lieu of paying my Director Fees covered by this election in cash, the Company will award me, on a quarterly basis, fully vested restricted stock unit (“
RSU
”) awards subject to the terms and conditions of the 2013 Omnibus Equity Incentive Plan and the applicable form of Restricted Stock Unit Agreement. I understand and agree that the number of vested RSUs, each representing one share of the Company’s common stock, subject to each award shall be determined by the following formula (with any resulting fractional share being disregarded):
|
Non-Employee Director Fee Election Form
|
|
1
|
3.
|
Deferred Settlement Election
.
I hereby make the following election with respect to settlement of my RSU awards granted pursuant to this election.
|
(i)
|
February 20, 20______, (
you must specify a calendar year after the Election Period or the deferral election in this Section 3 will
not
be effective
), or
|
(ii)
|
my death, or
|
(iii)
|
the occurrence of a Change in Control (as defined in the Company’s 2013 Omnibus Equity Incentive Plan on the date of this election, provided the transaction also constitutes a “change in control event” as defined in Treasury Regulation 1.409A-3(i)(5)), or
|
(iv)
|
☐ by checking this box, my “separation from service” (as defined in the Income Tax Regulations under Code Section 409A as in effect on the date of this election). In general, a “separation from service” will occur when you cease serving as a member of the Company’s board of directors for any reason not covered by paragraphs (ii) and (iii) above, unless you continue providing consulting services to the Company. (
You must check the box or a separation from service will
not
be a settlement event, however the remainder of the deferral election in this Section 3 will be effective.
)
|
4.
|
Timing of Election
. This election must be filed with the Legal Department of the Company
no later than [Month Day, Year]
. No election received after this date will be effective.
|
5.
|
Irrevocability of Election
. Once the election form has been received by the Company, the deferral election is
irrevocable
.
|
Non-Employee Director Fee Election Form
|
|
2
|
6.
|
Awards Unfunded
. I understand that the Company has not formally funded my RSU awards to be granted pursuant to this election (or any cash fees covered by this election) and that I am considered a general unsecured creditor of the Company with respect to each RSU award granted pursuant to this election (or any cash fees covered by this election).
|
7.
|
Tax Matters
. If a deferral election is selected pursuant to Section 3, the RSU awards (or cash fees) covered by this election will be subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “
Code
”). The Company has attempted in good faith to structure this deferral election in a manner that conforms to the requirements of Code Section 409A(a)(2), (3) and (4), and any ambiguities herein will be interpreted to so comply with
these requirements to the maximum extent permissible. To the extent the IRS challenges whether this award in fact complies with Code Section 409A(a)(2), (3) and (4), you will be fully responsible for any additional taxes, penalties and/or interest that might apply as a result of any adverse determination resulting from such challenge. Notwithstanding anything to the contrary in the 2013 Omnibus Equity Incentive Plan or the applicable Restricted Stock Unit Award Agreement, the Company may accelerate settlement of the RSU awards covered by this election only in accordance with Treasury Regulation Section 1.409A-3(j)(4). You are encouraged to consult a tax advisor (at your own expense) before making a deferral election.
|
|
|
|
Signature
|
|
Date
|
|
|
|
|
|
|
[Name]
|
|
Date
|
|
|
|
Non-Employee Director Fee Election Form
|
|
3
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Maxwell Technologies, Inc. for the quarter ended
March 31, 2017
.
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
May 10, 2017
|
|
MAXWELL TECHNOLOGIES, INC.
|
|
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By:
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/s/ Franz Fink
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Franz Fink
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President and Chief Executive Officer
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(Principal Executive Officer)
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1.
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I have reviewed this quarterly report on Form 10-Q of Maxwell Technologies, Inc. for the quarter ended
March 31, 2017
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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May 10, 2017
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MAXWELL TECHNOLOGIES, INC.
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By:
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/s/ David Lyle
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David Lyle
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Senior Vice President, Chief Financial Officer,
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Treasurer and Secretary
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(Principal Financial Officer)
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Date:
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May 10, 2017
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MAXWELL TECHNOLOGIES, INC.
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By:
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/s/ Franz Fink
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Franz Fink
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President and Chief Executive Officer
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(Principal Executive Officer)
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Date:
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May 10, 2017
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By:
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/s/ David Lyle
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David Lyle
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Senior Vice President, Chief Financial Officer,
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Treasurer and Secretary
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(Principal Financial Officer)
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