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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-K/A

Amendment No. 1

(Mark One)

|x |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- |  | ------------------------------------------------------------------------------------



For the fiscal year ended April 30, 2002



or



| ̈ |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- |  | ----------------------------------------------------------------------------------------



For the transition period
from                 to



Commission File No.: 001-15143



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IMPCO TECHNOLOGIES, INC.

(Exact name of
Registrant as specified in its charter)

|Delaware                                                      |  | 91-1039211                          
|------------------------------------------------------------- |  | ------------------------------------
|(State or other jurisdictionof incorporation or organization) |  | (IRS Employer Identification Number)



16804
Gridley Place Cerritos, California 90703

(Address of principal executive offices, including zip code)



(562) 860-6666

(Registrants telephone number, including area code)



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Securities registered pursuant to Section 12(b) of the Act:



None



|(Title of each class) |  | (Name of exchange on which registered)
|--------------------- |  | --------------------------------------



Securities registered pursuant to Section 12(g) of the Act:



Common Stock, $.001 par value per share



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Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes x    No ̈



Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrants knowledge, in
definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x



The aggregate market value of the Common Stock held by non-affiliates of the Registrant as of July 24, 2002
was approximately $71,741,969 based upon the closing sale price of the Registrants Common Stock on such date, as reported on the Nasdaq National Market. Shares of Common Stock held by each executive officer and director and each person owning
more than 5% of the outstanding Common Stock of the Registrant have been excluded in that such persons may be deemed to be affiliates of the Registrant. This determination of affiliate status is not necessarily a conclusive determination for other
purposes.



As of July 24, 2002, the Registrant
had 14,142,036 shares of Common Stock, $.001 par value per share, outstanding.



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FORWARD-LOOKING STATEMENTS



This Annual Report on Form 10-K contains forward-looking
statements that involve risks and uncertainties. These forward-looking statements are not historical facts but rather are based on current expectations, estimates and projections about our industry, our beliefs and assumptions. We use words such as
anticipate, expect, intend, plan, believe, seek, estimate and variations of these words and similar expressions to identify forward-looking statements. These
statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those
expressed or forecasted in the forward-looking statements. These risks and uncertainties include those described in Risk Factors and elsewhere in this Annual Report. You should not place undue reliance on these forward-looking
statements, which reflect our view only as of the date of this Annual Report.



PART I



Item 1.Business.



Overview



We
design, manufacture and supply advanced systems that store gaseous fuels and monitor and control the pressure and flow of those fuels for use in internal combustion engines. Our components and systems enable internal combustion engines to operate on
natural gas or propane. Our products improve efficiency, enhance power output, and reduce emissions by electronically sensing and regulating the proper proportion of fuel and air required by the internal combustion engine. Additionally, we have
extensive engineering, design and systems integration experience with respect to our customers requirements for product performance, durability and physical configuration. Based on over 43 years of technology development and expertise in
producing cost-effective, safe and durable fuel technology systems for engines, we believe that we are positioned to provide enabling products and technologies in the rapidly expanding alternative fuel industry.



Our customers use our components and systems on engines
ranging from one to 4,000 horsepower. We provide gaseous fuel components and systems for the mobile vehicle aftermarket, material handling, stationary and portable power generation and industrial markets.



A number of automotive, industrial and power generation
manufacturers, who are our customers, are developing alternative clean power systems using clean burning gaseous fuels, which decrease fuel costs, lessen dependence on crude oil and reduce harmful emissions in internal combustion engines. We offer
the following products, kits and systems to these customers:



| |  |  | fuel deliverypressure regulators, fuel injectors, flow control valves, and other components and systems designed to control the pressure, flow and/or
metering of gaseous fuels;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | electronic controlssolid-state components and proprietary software that monitor and optimize fuel pressure and flow to meet manufacturers engine
requirements; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | systems integrationservices to integrate the gaseous fuel storage, fuel delivery and/or electronic control components and sub-systems to meet OEM and
aftermarket requirements.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



We have
been producing and selling gaseous fuel systems and components for over 40 years. We sell these systems and components directly to end users, OEMs and the aftermarket through more than 400 distributors and dealers worldwide.



We were incorporated in Delaware in 1985.



Recent Development



Historically, we organized our business into two operating
divisions: the Gaseous Fuel Products division and the Quantum Technologies Worldwide division. On July 23, 2002, we completed the distribution and spin-



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off of our Quantum division by distributing one share of Quantum common stock for every share of IMPCO common stock held on the record date,
July 5, 2002. As a result of this spin-off we no longer hold any continuing interest in Quantum and we are no longer involved in developing and marketing fuel cell enabling technologies. However, we have entered into a strategic alliance with
Quantum to use jointly developed technologies in our respective markets.



A strategic alliance between General Motors and Quantum became effective on the spin-off of Quantum. General Motors acquired Quantum Series A common stock representing 19.9% of Quantums equity in
consideration of a nominal cash contribution and access to certain General Motors proprietary information. Quantum has committed to provide minimum amounts of annual funding to projects approved under the alliance. Each party will retain the
ownership of its existing technology and will jointly own technology that is jointly created under the alliance. Quantum will be free to use jointly created technologies in certain aspects of its business but will be required to share revenues with
General Motors on fuel cell system-related products that are sold to General Motors or third parties.



Several business purposes underlie the spin-off of Quantum. In particular, Quantum desires to enhance access to the capital markets by,
among other things, allowing the financial community to focus separately on Quantum. We believe the separation of our businesses and the establishment of Quantum as an independent company facilitates opportunities for Quantum to seek capital in the
future. We believe that the spin-off enables each entity to best realize its growth strategies as a separate, stand-alone entity, based on its prospective capitalization and financing requirements, acquisition strategies, working capital
requirements, projected cash flows from operations and desired credit ratings.



We have included a discussion on the Quantum reporting segment in the Management Discussion and Analysis section since the financial results of Quantum were included in the April 30, 2000, 2001 and
2002 consolidated results of operations. As a result of the spin-off of Quantum, we will report Quantum as a discontinued operation in fiscal year 2003. During fiscal year 2002, the Quantum division revenues represented 25.7% of the consolidation
revenues and the Quantum division operating loss during fiscal year 2002 was approximately $39.7 million.



Alternative Fuel Industry



Overview.    Our focus is on the alternative fuel industry. Three independent market factorseconomics, energy independence and environmental concernsare driving
the development of alternative fuel industry technology and markets. We believe the price differential between propane or natural gas and gasoline drives the economics of the alternative fuel market. The price of traditional liquid fuels such as
gasoline is typically two to three times that of natural gas or propane. By converting an internal combustion engine to run on propane or natural gas through the installation of alternative fuel enabling products, customers can capitalize on the
price differential and reduce harmful vehicle emissions.



End users are typically able to recoup the cost of the conversion in six to eighteen months, depending on the fuel cost spread in favor of alternative fuel versus gasoline. Transportation companies in various countries, including
Australia, Mexico, India and China, are also taking advantage of these economics.



Among the most active are taxi companies, transit and shuttle bus companies, and delivery fleets, such as Coca Cola, Frito-Lay, Pepsi Cola and United Parcel Service. Small and large industrial engine
users in the power generation market wish to capitalize on the cost benefits of using alternative fuels and their low-pollutant capabilities. For example, forklift users often operate equipment indoors where toxic emissions are a concern. In all
these situations, it is relatively easy to establish centralized fueling stations. Because of the global price differential in favor of gaseous fuels compared to gasoline, their availability in third-world markets and their lower pollutants, the
alternative fuel industry market potential is growing rapidly.



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In addition to
economics, energy independence is a significant driver for the alternative fuel market. Many countries have significant natural gas reserves and seek to use alternative fuels to reduce their dependence on imported oil and reduce their unfavorable
balance of payments. Natural gas is generally consumed domestically since it is difficult to transport internationally in a gaseous state and liquefying natural gas tends to be costly. Implementing OEM alternative fuel vehicles that operate on
natural gas or propane can lessen the demand for gasoline. For example, the Egyptian and Chinese governments realized that rather than relying solely on petroleum for its transportation needs, it could use natural gas in vehicles to free some of its
oil production for export.



Governmental emission
regulations, which support the use of clean burning alternative fuels, are also expanding industry growth. The negative environmental impact associated with liquid fuels further increases the demand for systems that use clean burning fuels. Internal
combustion engines are a major source of air pollution, which has led to increased government regulation and oversight on vehicle and industrial engine emissions. The U.S. Department of Energy estimates that OEM vehicles fueled with natural gas emit
80% less carbon monoxide and nitrogen oxide than vehicles fueled by reformulated gasoline. Most major international cities are experiencing significant pollution from gasoline and diesel emissions. These cities also have the largest concentrations
of fleet operators, and many of these cities are taking steps to reduce emissions, typically by implementing natural gas or propane-fueled vehicles. For example, in Mexico City the government has taken steps such as prohibiting the use of certain
vehicles on designated days of the week.



In the
United States, legislation such as the Comprehensive National Energy Strategy, the Clean Air Act Amendments of 1990 and the Energy Policy Act of 1992 provide goals for energy and efficiency and strict emission standards and promote the development
and implementation of alternative fuels and related technologies. Several states, including California, Massachusetts, New York and Vermont, have also adopted legislation targeted at reducing harmful vehicle emissions. In addition, several
countries, including Argentina, Canada, China, Colombia, Egypt, France, Germany, Greece, India, Italy, Mexico, Russia and the United Kingdom, have enacted air pollution regulations or programs favoring the use of alternative fuels.



Markets.    According to the World
LP Gas Association and the European Natural Gas Association, there are over 5.6 million gaseous fuel vehicles worldwide, consisting of approximately 4.1 million propane vehicles and approximately 1.5 million natural gas vehicles. In 1999, Frost
& Sullivan estimated that the number of propane vehicles in the United States will continue to grow at the historical rate of 1.7 to 1.9% per year through 2005 and that the number of natural gas vehicles in the United States would grow at a
compounded annual growth rate of 14.6% per year.



In its International Energy Outlook 2001, the Energy Information Administration of the U.S. Department of Energy has found that interest in expanding the use of alternative fuel vehicles is growing in many parts of the world. Growth
projections, reported by the Energy Information Administration and the International Association for Natural Gas Vehicles in comparison with current data available from the European Natural Gas Vehicle Association, indicate that over 2 million
additional alternative fuel vehicles will be introduced worldwide by 2010. In Europe, alternative fuel vehicles have rapidly penetrated the transportation market. The European Unions four largest natural gas-consuming members, the United
Kingdom, Germany, France, and Italy, have all introduced incentives for gaseous fueled vehicles. The European Union has established a target to replace 20% of their liquid fueled vehicles with gaseous fuels by 2020. The Mexican Regulatory Commission
of Energy estimates that it will be able to increase the penetration of natural gas vehicles from 2,000 in 2000 to 100,000 by 2008.



The Asia-Pacific region is emerging as a significant growth market for alternative fuel vehicles. The International Association for
Natural Gas Vehicles in its journal NGV Worldwidereports that in 1999, the Japanese government established a target of introducing 3.4 million Clean Energy Vehicles by 2010, of which 1 million would be natural gas vehicles. The
Australian Natural Gas Vehicles Council forecast that the number of natural gas vehicles in Australia would increase from approximately 2,000 in 2000 to 70,000 by 2010 to



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complement its growing propane vehicle fleet of over 515,000. South Korea is expected to spend $610 million to put 20,000 natural gas-powered
buses in service by 2007. This is in addition to South Koreas aggressive implementation of propane-fueled vehicles, which comprise over eight percent of the registered motor vehicles in South Korea.



Competitive Advantages



We believe our future technological leadership position in
the alternative fuel industry will result from our continued success in the design, manufacturing and commercialization of advanced fuel delivery systems and components, our relationships with leading companies in our targeted transportation,
material handling and industrial and power generation markets, our financial commitment to research and development and our proven ability to develop and commercialize new products. We believe our competitive strengths include the following:



Industry
Leader.    We have derived a technology and product leadership position from the broad application and integration of our technologies and enabling systems into the established and expanding alternative fuel industry. Over
the past nine years we have invested approximately $130 million in research and development. This investment, coupled with our history and experience in this industry, has provided us with a strong technology base for new product innovation for
internal combustion engines.



Proven
Manufacturing Methods.    We have more than four decades of experience in the manufacture, development and integration of alternative fuel technologies and products. We currently maintain manufacturing and production
facilities in the United States, Europe, Mexico and Australia, which produce a broad range of products and services, including components, systems and specialty vehicle assembly. Our U.S., Australian and European facilities have achieved ISO-9000 or
QS-9000 certification. QS-9000 is the common supplier quality standard for Chrysler Corporation, Ford Motor Company and General Motors. QS-9000 applies to suppliers of production materials, production and service parts, heat treating, painting and
plating and other finishing services. ISO-9000 is a set of three individual, but related, international standards on quality management and quality assurance. These standards were developed to effectively document the quality system elements to be
implemented in order to maintain efficient quality systems.



Strong OEM Customer Relationships.    We currently sell products to over 100 OEM customers in domestic and international alternative fuel markets. To date, we have sold over 4 million fuel systems or
sub-systems globally to our customers. We believe that the successful historic use of our products and our reputation as a leader in our industry provides a strong competitive position.



Established Systems Integration Expertise.    As more OEMs seek to reduce costs by
outsourcing key tasks and reducing the number of suppliers, we have increasingly focused on capturing additional revenue opportunities by expanding our systems integration capabilities. In 1998, we established our Industrial Engine Systems business
in Sterling Heights, Michigan, which provides systems integration of our low-emission products for engines that are subsequently sold to industrial OEMs. We believe that our systems integration expertise, together with our proprietary and patented
technologies, give us a significant advantage in the alternative fuel markets.



Positioned for Global Growth.    With ten foreign facilities and over 400 distributors and dealers in more than 30 countries outside the United States, we believe that we are
positioned to capitalize on global growth opportunities. We believe that the alternative fuel markets will grow dramatically internationally, particularly in China, India, Japan, Mexico and Southeast Asia, because of the existing urban pollution
problems and economics that favor alternative fuels versus gasoline.



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Business Strategy



We believe that the successful execution of
the following strategic objectives will enable us to maintain and expand our leadership position in the advanced fuel technologies industry.



Capitalize on our Strong Technology Leadership Position.    We are a leading developer and manufacturer of fuel
metering and electronic control systems for the alternative fuel industry. We believe that this position results from our current technology advantage and our investment in research and development in this rapidly expanding industry. Our investment
has and is expected to continue to permit us to develop and supply new technology and products to our target markets, which are transitioning to gaseous fueled internal combustion engines. We also plan to develop new technologies and expand our
product and system integration capabilities to an increasingly larger and more diversified customer base.



Focus on Advanced Fuel Technologies and Products.    We intend to focus on advanced electronic and fuel
metering technologies and products. We plan to continue our research and product development in fuel delivery and electronic control systems for alternative fuels. We will actively seek to establish joint development programs and strategic alliances
with the major engine designers, manufacturers and industry leaders in these markets.



Develop and Expand Key Industry Relationships.    We plan to utilize the successful technical and business relationships and reputation we have established worldwide with
major industry leaders using alternative fuel products to enable us to establish and maintain strategic alliances, joint product development programs and joint ventures with these companies in our target markets. We plan to concentrate our efforts
on broadening our OEM relationships in an effort to establish strong top-tier supplier positions based on our belief that OEMs will drive industry growth in the alternative fuel industry.



Expand and Broaden Systems Integration Expertise.    We plan to continue to
broaden our capabilities to provide the integration, testing, validation and manufacturing of our products and systems into the transportation, material handling, stationary and portable power generation and general industrial markets. As more OEMs
seek to reduce costs and shorten time to market by outsourcing key tasks and reducing numbers of suppliers, we are increasingly focused on capturing additional revenue opportunities by expanding into value-added services, such as systems
integration. For example, we have established an industrial systems unit in Michigan to provide systems integration for our products in engines that will be sold to industrial OEMs that then install these engines into end products.



Increase Bases of Business Operations and
Distributor Network in High-Growth Global Regions.    We plan to expand our operating network in high-growth regions, such as Asia, Europe and Latin America, to take advantage of significant growth opportunities that we
believe exist in those areas. We intend to capitalize on these growth opportunities through acquisitions and joint ventures, strengthening of our distributor network and developing key local business and governmental support and recognition. In
particular, we are developing working relationships with several foreign governments. We believe that working with local governments and establishing joint ventures with local business leaders is essential to expanding into international markets.
For example, our discussions with government officials have led to our involvement in developing regulations in Mexico.



Expand our Global Manufacturing Operations.    We plan to expand our current QS-9000 manufacturing operations
in the United States and Mexico by establishing manufacturing sites in low-cost locations with a continued focus on quality, timely delivery and operating efficiency.



Customers and Strategic Relationships



Our customers include some of the worlds largest OEMs and engine manufacturers, including Ashok
Leyland, Boss Manufacturing, Caterpillar, Clark, Cummins, Daewoo, Detroit Diesel, Ford Australia, GM



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Holden, Kohler, Komatsu, Mazda, Mitsubishi, Onan, Still and Toyota. During fiscal year 2000, 2001 and 2002, General Motors Corporation, and
customers associated with the General Motors program, accounted for approximately 16%, 20% and 23%, respectively, of consolidated revenues.



We are working with a number of these customers to address their future product and application requirements as they integrate more
advanced, certified gaseous fuel systems into their business strategies. Additionally, we continually survey and evaluate the benefits of joint ventures, acquisitions and strategic alliances with our customers and other participants in the
alternative fuel industry to strengthen our global business position.



We have focused our strategic alliances on our marketing strategy and/or on our development strategy. Our marketing strategy seeks to expand the distribution channels for our gaseous fuel system technologies. Our development
strategy is to advance the state of technology and its application.



IMPCO-Quantum.    Our three-year agreement with Quantum, established in connection with the spinoff, provides that we will collaborate with Quantum to identify and conduct research and development
programs of mutual interest. As part of those research and development activities, we may develop technology and products separately or jointly with Quantum. The agreement also allows us to acquire and sell into our alternative fuel markets
Quantums advanced technology products, including CNG storage tanks, fuel injectors, in-tank regulators and other products, for use in automotive, bus and truck and industrial aftermarket applications and in the bus and truck and industrial OEM
markets. For jointly developed products, we and Quantum will jointly own any intellectual property rights and will issue royalty-free cross licenses covering our respective markets. For separately developed products, each party will grant the other
a right to sell the affected products in their respective markets, while the developing party will retain sole intellectual property ownership.



We believe the Quantum spinoff and the ongoing alliance will expedite the commercialization and integration of advanced gaseous storage
and handling systems and products into our broader global alternative fuel markets, including automotive after-market, material handling, portable and stationary internal combustion engine-based power generation, and general industrial markets. In
addition, we believe that the spinoff will enable each company to optimize its growth strategies as a separate, stand-alone entity, based on their respective capitalization and financing requirements, acquisition strategies, working capital
requirements, projected cash flows from operations and credit ratings.



We intend to establish similar relationships with leading industry OEMs by using our systems integration capabilities and our leading technology position in gaseous fuel products and systems.



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Products and Services



Our products include gaseous fuel
regulators, fuel shut-off valves, fuel delivery systems, complete engine systems, and electronic controls for use in internal combustion engines for the transportation, material handling, stationary and portable power generator and general
industrial markets. In addition to these core products, which we manufacture, we also design, assemble and market ancillary components required for complete systems operation on alternative fuels.



All of our products are designed, tested and validated in
accordance with our own internal requirements, as well as tested and certified with major regulatory and safety agencies throughout the world, including Underwriters Laboratories (UL) in North America and TÜV in Europe. The following table
describes the features of our products:



|Products               |  |   |  | Features                                                                                                                                             
|---------------------- |  | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------
|Fuel Metering          |  |  |  | Designed to operate on propane, natural gas or digester gas fuels                                                                                    
|                       |  |  |  | Electronic control overlays allow integration with modern emissions monitoring systems for full emissions compliance
capability                      
|                       |  |  |  | Designed for high resistance to poor fuel quality                                                                                                    
|                      
|Fuel Regulation        |  |  |  | Reduces pressure of gaseous and liquid fuels                                                                                                         
|                       |  |  |  | Vaporizes liquid fuels                                                                                                                               
|                       |  |  |  | Handles a wide range of inlet pressures                                                                                                              
|                      
|Fuel Shut-Off          |  |  |  | Mechanically or electronically shuts off fuel supply to the regulator and engine                                                                     
|                       |  |  |  | Available for low-pressure vapor natural gas and high-pressure liquid propane                                                                        
|                       |  |  |  | Designs also incorporate standard fuel filtration to ensure system reliability                                                                       
|                      
|Electronics & Controls |  |  |  | Provides closed loop fuel control, allowing integration with existing sensors to ensure low
emissions                                                
|                       |  |  |  | Integrates gaseous fuel systems with existing engine management functions                                                                            
|                      
|Engine Systems         |  |  |  | Turnkey kits for a variety of engine sizes and applications                                                                                          
|                       |  |  |  | Customized applications interface per customer requirements                                                                                          
|                      
|Full Systems           |  |  |  | Complete vehicle and equipment systems for aftermarket conversion                                                                                    
|                       |  |  |  | Complete engine and vehicle management systems for heavy-duty engine on-highway truck and bus operation on natural
gas                               
|                       |  |  |  | Complete engine and vehicle management systems for off-highway and industrial engines used for material handling,
pumping and industrial applications



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Services.    We provide a broad range of services to both our product customer base and the broader service marketplace. These services fall into the following key areas:



|Services                           |  |   |  | Capabilities                                                                                                                                                         
|---------------------------------- |  | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Design and Systems Integration     |  |  |  | Strong team of applications engineers for component, system and engine level exercises providing support to customers
in the application of our gaseous fuel products
|                                   |  |  |  | Applications engineering services for whole vehicle/machine integration outside of our products                                                                      
|                                   |  |  |  | Full three dimensional design modeling and component rapid prototyping services                                                                                      
|                                  
|Certification                      |  |  |  | Certification of component products and services in line with the requirements of California Air Resources Board for
off-highway engines                             
|                                   |  |  |  | Provide customers with the required tools to manage in-field traceability and other requirements beyond initial
emission compliance                                  
|                                  
|Testing and Validation             |  |  |  | Component endurance testing                                                                                                                                          
|                                   |  |  |  | Component thermal and flow performance cycling                                                                                                                       
|                                   |  |  |  | Engine and vehicle testing and evaluation for performance and emissions                                                                                              
|                                  
|Sub-System Assembly                |  |  |  | Pre-assembled modules for direct delivery to customers production lines                                                                                             
|                                   |  |  |  | Sourcing and integrating second and third tier supplier components                                                                                                   
|                                  
|Training and Technical Service     |  |  |  | Complete technical service support, including technical literature, web-based information, direct telephone interface
(in all major countries) and on-site support   
|                                   |  |  |  | Training services through sponsored programs at approved colleges, at our facilities worldwide and on-site at
customer facilities                                    
|                                  
|Service Parts and Warranty Support |  |  |  | Access to service parts network, along with direct support in development of customers own internal service
parts programs and procedures                           
|                                   |  |  |  | Warranty and replacement services for our customers worldwide                                                                                                        



Sales and
Distribution



We sell products through a
worldwide network encompassing more than 400 distributors and dealers in over 30 countries and through a sales force that develops sales with OEMs and large end-users. We focus on three markets: material handling OEMs and aftermarket, stationary and
portable power generation OEMs and aftermarket, and the mobile vehicle aftermarket. Of these markets, we believe that the automotive vehicle aftermarket, primarily outside of North America, has the greatest potential for immediate growth and that
the power generation markets have potential for growth over the next one to five years.



For fiscal year 2002, excluding the Quantum division, sales to distributors (including company-owned distributors) accounted for 46% of our net revenue and sales to OEM customers accounted for
approximately 54% of our net revenue. During fiscal year 2002, OEM customers accounted for a higher percent of total sales as compared to fiscal years 2001 and 2000. This increase is driven by the need for complete certified systems for use on OEM
applications. Distributors primarily service the aftermarket conversion business and small-volume OEMs, and are generally specialized and privately owned enterprises. Many domestic distributors have been our



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customers for more than 30 years, and many of our export distributors have been our customers for more than 20 years.



Our company-owned distributors are included in our
International Operations segment and consist of our subsidiaries located in Europe, Australia, Mexico, Japan, and India, which are responsible for sales, application and market development and technical service. Additionally, these subsidiaries
provide sales support, application development and technical support to aftermarket and OEM customers.



Manufacturing



We manufacture and assemble products at our facilities in Cerritos, California, Sterling Heights, Michigan and at our international facilities. Current manufacturing operations consist primarily of mechanical assembly and
light machining. We rely on outside suppliers for parts and components and obtain components for products from a variety of domestic and foreign automotive and electronics suppliers, die casters, stamping operations, specialized diaphragm
manufacturers and machine shops. For fiscal year 2002, excluding the Quantum division, ten suppliers accounted for approximately 28% of our raw material purchases.



Material costs, die cast aluminum parts and diaphragms in particular, represent the major components of cost
of sales. Coordination with suppliers for quality control and timely shipments is a high priority to maximize inventory management. We use a computerized material requirement planning system to schedule material flow and balance the competing
demands of timely shipments, productivity and inventory management. All the Gaseous Fuel Products divisions manufacturing facilities are ISO-9001 or QS-9001 certified.



Research and Development



In 2002, we opened a new research and development facility in Seattle, Washington, which is dedicated to the research and development of
systems and products that support the use of gaseous fuels in internal combustion engines. This facility has sophisticated, state-of-the-art research laboratories, emissions control equipment, and testing equipment. Our research and development is
focused on fuel delivery and electronic control systems and products for motor vehicles, engines, forklifts, stationary engines and small industrial engines.



We have the following technical capabilities:



| |  |  | Electronic Control Systems.    Specialization in hardware design and selection, engine modeling, calibration and software design
for engine and emission controls.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Mechanical Design and Development.    Specialization in pneumatic, kinematics, hydraulic components and systems and advanced
materials, structural, flow and thermal analysis.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Advanced Catalysts.    Catalyst and emission testing.
| | - |  | -----------------------------------------------------



| |  |  | Advanced Products.    Injectors, pressure sensors and bi-directional mass flow sensors, fuel management, mass flow sensors for
natural gas measurement and smart sensors using 8-bit micro-controllers.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Component and Subsystem Test Facilities.    Extended vibrations, shock loads and accelerations, flow simulations and pneumatic
leak checks.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------



We believe this
facility is a critical component in our ability to maintain our technological leadership position in alternative fuel enabling systems.



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We conduct
alternative fuel application development at the following facilities:



| |  |  | Cerritos, California for the power generation market;
| | - |  | -----------------------------------------------------



| |  |  | Seattle, Washington for the transportation market; and
| | - |  | ------------------------------------------------------



| |  |  | Sterling Heights, Michigan for the industrial market.
| | - |  | -----------------------------------------------------



| |  |  | Rijswijk, Holland for the industrial and transportation market; and
| | - |  | -------------------------------------------------------------------



| |  |  | Cheltenham, Australia for the transportation market.
| | - |  | ----------------------------------------------------



These facilities encompass approximately 100,000 square feet of laboratory space, and we have over 65 employees at these facilities.



Competition



We are a leading provider of alternative fuel systems. We
provide products and integrated services for all gaseous fuels in our target markets for use in all end user applications in the alternative fuel industry.



Our key competitors in gaseous fuel delivery products, accessory components and engine conversions markets include Aisan, BRC, GFI,
Koltec, Landi, Lovato, OMVL and Tartarini, which together with us account for a majority of the world market for alternative fuel products and services. In the future, we may face competition from traditional automotive component suppliers, such as
Bosch, Delphi, Siemens and Visteon, and from motor vehicle OEMs that develop fuel systems internally.



We believe that our competitive advantage over current and future competitors is our technology leadership derived from many years of
experience with alternative gaseous fuels. Our current competitors typically focus on fuel injection and individual components. We are unique in being able to offer complete integrated fuel systems based on our own advanced technologies, including
gaseous fuel storage, fuel metering, and electronic controls.



Product Certification



We
must obtain emission compliance certification from the Environmental Protection Agency to sell certain of our products in the United States and from the California Air Resources Board to sell certain products in California. Each car, truck or van
sold in the U.S. market must be certified by the Environmental Protection Agency before it can be introduced into commerce and its products must meet component, subsystem and system level durability, emission, refueling and various idle tests. In
California, both on-road and off-road vehicles have emission compliance regulation. We have also obtained international emissions compliance certification in Argentina, Australia, Brazil, Canada, Chile, Europe and Mexico.



We strive to meet stringent industry standards set by various
regulatory bodies, including the Federal Motor Vehicle Safety Standards of the United States, the National Highway and Transportation Safety Administration, the National Fire Protection Association, Underwriters Laboratories and American Gas.
Approvals enhance the acceptability of our products in the domestic marketplace. Many foreign countries also accept these agency approvals as satisfying the approval for sale requirements in their markets.



Backlog



As of July 1, 2002, our backlog for our products was $15.9 million. We measure backlog for our product sales
from the time orders become irrevocable, which generally occurs 90 days prior to the date of delivery.



10



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Employees



As of May 31, 2002, we employed approximately 510 persons. Of
these employees, approximately 156 were employed by our Quantum division and 399 were employed by our Gaseous Fuel Products division, including 103 employees internationally. None of our employees are represented in a collective bargaining
agreement. We consider our relations with our employees to be good.



Intellectual Property



We
currently rely primarily on patent and trade secret laws to protect our intellectual property. We currently have U.S. patents and foreign patents issued. The U.S. patents expire between October 2002 and May 2020. We also have U.S. and foreign patent
applications pending. Our pending patent applications may not be allowed. Even if they are allowed, these patents may not provide us a competitive advantage. Competitors may successfully challenge the validity and scope of our patents and
trademarks.



We also rely on a combination of
trademark, trade secret and other intellectual property laws and various contract rights to protect our proprietary rights. However, we do not believe our intellectual property provides significant protection from competition. We believe that
patent, copyright, trademark and trade secret protection are less significant and that our growth and future success will be more dependent on factors such as the knowledge, ability and experience of our personnel, new product introductions and
continued emphasis on research and development. We believe that establishing and maintaining strong strategic relationships with valued customers and OEMs are the most significant factors protecting us from new competitors.



11



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Item
7.Managements Discussion and Analysis of Financial Condition and Results of Operations.



You should read this discussion together with the financial statements and other financial information included in this Annual Report
on Form 10-K.



Overview



We design, manufacture and supply components that store
gaseous fuels and monitor and control the pressure and flow of those fuels for use in internal combustion engines. Historically, most of our revenues have been derived from the sale of the products that enable traditional internal combustion engines
to run on clean burning alternative fuels such as propane and natural gas instead of gasoline. Based on over 43 years of technology development and expertise in producing cost-effective, safe, and durable fuel technology systems for engines, we
believe that we are positioned to provide enabling products and technologies in the rapidly expanding alternative fuel industry.



Prior to the spin-off of Quantum, we classified our business operations into three reporting segments: our Quantum division, the Gaseous
Fuel Products division and International Operations. Our Quantum division generates revenues through the sale of fuel storage, fuel delivery and electronic control systems to OEMs, primarily General Motors, and the installation of our products into
OEM vehicles. Quantum also generates contract revenue by providing engineering design and support to the OEMs so that our fuel storage, fuel delivery and electronic control systems integrate and operate with certain of their alternative fuel
vehicles. The Gaseous Fuel Products division sells products, including parts and conversion systems, for applications in the transportation, material handling, stationary and portable power generator and general industrial markets. Our International
Operations in Asia, Australia, Europe, India, Japan and Mexico provide distribution for our products, predominantly from our Gaseous Fuel Products division and some product assembly on engines.



We recognize revenue for product sales when title is
transferred, ordinarily when products are shipped, and when collectability is reasonably assured. Contract revenues are recognized based on the percentage of completion method. Corporate expenses represent a sub-category of selling, general and
administrative expense. Corporate expenses consist of general and administrative expense incurred at the corporate level and includes the amortization of goodwill and other intangible assets. Intersegment eliminations are primarily the result of
intercompany sales from the Gaseous Fuel Products division to the International Operations. End markets for our products include the transportation, material handling and industrial and power generation industries.



We expense all research and development when incurred.
Research and development expense includes both customer-funded research and development and company-sponsored research and development. Customer funded research and development consists primarily of expenses associated with contract revenue. These
expenses include application development costs at Quantum funded under customer contracts.



Recent Developments



Quantum Spin-off.    On July 23, 2002, we completed the distribution and spin-off of our Quantum subsidiary by distributing one share of Quantum common stock for every share
of IMPCO common stock held on the record date, which was July 5, 2002. A strategic alliance with General Motors became effective on the date of our spin-off of Quantum. General Motors has acquired Quantum Series A common stock representing 19.9% of
Quantums equity in consideration of a nominal cash contribution and access to certain General Motors proprietary information.



Several business purposes underlie the spin-off of Quantum. In particular, Quantum desires to enhance access to the capital markets by,
among other things, allowing the financial community to focus separately on



12



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Quantum. We believe the separation of our businesses and the establishment of Quantum as an independent company facilitates opportunities for
Quantum to seek capital in the future. We believe that the spin-off enables each entity to best realize its growth strategies as a separate, stand-alone entity, based on its prospective capitalization and financing requirements, acquisition
strategies, working capital requirements, projected cash flows from operations and desired credit ratings. The spin-off is subject to various risks described in Managements Discussion and Analysis of Financial Condition and Results of
OperationRisk Factors included in Item 7 of this Annual Report.



We have included a discussion on the Quantum reporting segment since the financial results of Quantum were included in the April 30, 2000, 2001 and 2002 consolidated results of operations. As a result
of the spin-off of Quantum, we will report Quantum as a discontinued operation in fiscal year 2003. We expect the spin-off of Quantum to have a favorable effect on our results of operations and cash flows from operations.



Private Placement.    On May 8,
2002, we completed the sale of an aggregate of 1.5 million shares of our common stock to institutional and accredited investors at a purchase price of $12.50 per share, for gross proceeds of $18.75 million. The proceeds are expected to be used for
potential acquisitions, debt repayment, and general corporate purposes.



Critical Accounting Policies and Estimates



The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in
the United States. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and
liabilities. On an on-going basis, we evaluate our estimates, including those related to bad debts, goodwill, taxes, inventories, warranty obligations, long-term service contracts, and contingencies and litigation. We base our estimates on
historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.



We believe the following critical accounting policies affect the more significant judgments and estimates used in the preparation of our
consolidated financial statements:



We recognize
revenue and profit as work progresses on long-term, fixed price contracts for product application development using the percentage-of-completion method, which relies on estimates of total expected, contract revenue and costs. We follow this method
because we can make reasonably dependable estimates of the revenue and costs applicable to various stages of a contract. Recognized revenues and profit are subject to revisions as the contract progresses to completion. Revisions in profit estimates
are charged to income in the period in which the facts that give rise to the revision become known.



We provide for the estimated cost of product warranties at the time revenue is recognized. While we engage in product quality programs and
processes, including actively monitoring and evaluating the quality of our component suppliers, our warranty obligation is affected by product failure rates, material usage and service delivery costs incurred in correcting a product failure. Should
actual product failure rates, material usage or service delivery costs differ from our estimates, revisions to the estimated warranty liability would be required.



We write down our inventory for estimated obsolescence or unmarketable inventory equal to the difference
between the cost of inventory and the estimated market value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional inventory write-downs may be
required.



13



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We maintain
allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make
payments, additional allowances may be required.



We operate wholly owned and majority owned subsidiaries. We recorded goodwill at the time of purchase for the amount of the purchase price over book value. Future adverse changes in market conditions or poor operating results of
underlying investments could result in losses or an inability to recover the carrying value of the goodwill, thereby possibly requiring an impairment charge in the future.



We recorded a deferred tax asset and believe that it is more likely than not to be realized. While we
consider future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for the valuation allowance, in the event we were to determine that we would not be able to realize all or part of our net deferred tax
asset in the future, an adjustment to the deferred tax asset would be charged to income in the period such determination was made.



Results of Operations



Years Ended April 30, 2001 and 2002



Net revenues and operating income for our reporting segments for the fiscal years ended April 30, 2001 and 2002 are as follows:



|                         |  | Revenues             |         |   | Operating Income (Loss) |  
|------------------------ |  | -------------------- | ------- | - | ----------------------- | -
|                         |  | Year Ended April 30, |         |   | Year Ended April 30,    |  
|                         |  | 2001                 |         |   | 2002                    |  
|                         |  | (in thousands)       |        
|Gaseous Fuel Products    |  | $                    | 66,925  |   |                         | $
|International Operations |  |                      | 31,132  |   |                         |  
|Quantum                  |  |                      | 23,358  |   |                         |  
|Corporate expenses(1)    |  |                      |        |   |                         |  
|Intersegment elimination |  |                      | (17,518 | ) |                         |  
|                         |  |                      |         |   |                         |  
|Total                    |  | $                    | 103,897 |   |                         | $
|                         |  |                      |         |   |                         |  

---

|(1) |  | Represents corporate expenses not allocated to any of the reporting segments.
|--- |  | -----------------------------------------------------------------------------



Net revenue decreased $12.8 million, or 12.3%, from $103.9 million in fiscal year 2001 to $91.1 million in
fiscal year 2002. This decrease was primarily due to the decline in sales of conversion kits and components to the material handling market, which is attributable to unfavorable economic conditions.



The following table sets forth our product revenues by
application across all reporting segments:



|                                                |  | Year Ended April 30,
|----------------------------------------------- |  | --------------------
|                                                |  | 2001                
|                                                |  | (in thousands)      
|Motor vehicle products                          |  | $                   
|Forklifts and other material handling equipment |  |                     
|Small portable to large stationary engines      |  |                     
|                                                |  |                     
|Total product sales                             |  | $                   
|                                                |  |                     



14



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During fiscal
years 2001 and 2002, our product revenue was generated in the following geographic regions:



|                         |  | Year Ended April 30, |  
|------------------------ |  | -------------------- | -
|                         |  | 2001                 |  
|United States and Canada |  | 62.2                 | %
|Pacific Rim              |  | 10.9                 | %
|Europe                   |  | 17.0                 | %
|Latin America            |  | 9.9                  | %



Gaseous Fuel Products.    Net revenues in this segment decreased $14.8 million, or 22.2%, from $66.9 million in fiscal year 2001 to $52.1 million in fiscal year 2002. Revenues were lower primarily due to
the decline in sales of our products to the material handling market. We believe this decline in sales was caused by the current economic slowdown. The increase in our large stationary engine market was largely offset by the decline in our small
industrial engine market. Assuming the rebound in motor vehicle conversions in Mexico continues and our expectations for increasing international motor vehicle sales due to our expansion in India and Latin America, we anticipate that overall
revenues in fiscal year 2003 will be higher than fiscal year 2002.



Gross profit in this segment decreased $8.0 million, or 36.1%, from $22.3 million in fiscal year 2001 to $14.3 million in fiscal year 2002. The decline in revenues negatively impacted gross profit by $5.0 million. The
remaining $3.0 million decline in gross profit was due to product mix consisting of a higher percentage of lower margin complete engine systems sales and lower margin sales to our foreign subsidiaries.



Operating income in this segment decreased $7.7 million, or
69.3%, from $11.1 million in fiscal year 2001 to $3.4 million in fiscal year 2002. This decrease was due to lower gross profits offset by a $0.3 million reduction in operating expenses. Assuming growth in overall revenues and gross profits, we
anticipate that operating income for this segment for fiscal year 2003 will be higher than fiscal year 2002.



International Operations.    Net revenues in this segment increased by $1.7 million, or 5.3%, from $31.1
million in fiscal year 2001 to $32.8 million in fiscal year 2002. In fiscal year 2002, net revenues increased $4.1 million at our Mexico subsidiary, $0.7 million in Asia and $0.4 million at our European subsidiary. These increases were partially
offset by decreases of $2.5 million at our Australian subsidiary and $1.0 million at our Japan subsidiary. In fiscal year 2002, revenues for our International Operations segment would have increased an additional $0.4 million if not for the
strengthening of the U.S. Dollar. A strong U.S. Dollar has a negative effect on the conversion of foreign currency denominated sales. Assuming the fundamentals of our international markets remain strong in terms of government regulations, pollution
control and economics, we anticipate continuing market growth and increasing revenues for this segment next fiscal year.



Operating income for this segment decreased $0.8 million, or 56.8%, from $1.4 million in fiscal year 2001 to $0.6 million in fiscal year
2002 as all foreign subsidiaries except Mexico experienced lower operating income. This was primarily a result of lower gross margins due to the higher cost of U.S. goods purchased with their weakening local currencies. Additionally, we added
marketing and technical personnel to support new and expanding markets in Asia, which resulted in increased operating expenses compared to the prior fiscal year. Assuming higher revenues and gross profits, we anticipate that operating income levels
in our International Operations segment will be higher in fiscal year 2003 than in fiscal year 2002.



Quantum.    Net revenues remained relatively unchanged at $23.4 million in fiscal year 2002, increasing only
$0.05 million, or 0.2%. Product sales remained at $15.5 million in fiscal year 2002. Product sales consist of those associated with General Motors mid-size automobiles, pick-up trucks and van platforms equipped with our bi-fuel and compressed
natural gas fuel systems and General Motors medium duty trucks equipped with dedicated liquid propane gas kits. For fiscal year 2002, higher service parts sales and higher sales of GM van platforms were offset by lower sales of pick-up trucks,
midsize automobiles and medium duty truck platforms.



15



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Cost of
product sales increased $6.1 million, or 31.5%, from $19.5 million in fiscal year 2001 to $25.6 million in fiscal year 2002. The increase in cost of product sales was due to a $1.4 million increase in inventory reserves, of which $0.6 million was
related to a lower of cost-or-market reserve for the General Motors pick-up truck application and $0.5 million related to increases in the provision for obsolescence, $1.4 million in higher material cost related to product mix, a
$1.0 million increase in warranty reserves due to increased vehicle sales and higher warranty claims experienced, primarily in our medium duty applications, a $1.8 million increase in labor and manufacturing overhead mainly due to pre-production
efforts associated with our fuel storage tanks, a $0.2 million increase in freight charges, and a $0.2 million increase in production related scrap. The lower of cost-or-market reserve on the General Motors pick-up truck
application is due to a fixed sales price and a higher than expected material cost. The higher expected material cost is due to lower anticipated volumes and no firm sales commitment from General Motors. As such, once product is received for this
application, we immediately reduce our inventory value to reflect the selling price of the application. We expect the level of the lower of cost-or-market adjustment to be lower in the future as a result of pricing increases for the
pick-up truck application.



Gross profits on
product sales were $6.1 million, or 152.9%, lower in fiscal year 2002 as compared to fiscal year 2001, due to the $6.1 million increase in cost of product sales.



Contract revenues remained relatively unchanged, increasing 0.4% to $7.9 million in fiscal year 2002. The
increase is primarily due to new fuel cell contracts which were offset by a $3.5 million decline in General Motors alternative fuel model year program revenues. Contract revenue is primarily for system development and application engineering
of our products under funded General Motors and other OEM contracts and other funded contract work with state and federal agencies.



For the fiscal year 2002, research and development associated with cost of contract revenues increased $0.8 million, or 14.7%, to $6.3
million as compared to the $5.5 million reported in fiscal year 2001. The increase for fiscal year 2002 is due to a margin decrease from 30.2% to 20.2%. The decrease in margin is primarily due to $1.3 million in cost overruns on the CNG pick-up
truck development programs and the cancellation of the GM LPG pick-up truck development program.



Research and development expense increased by $6.0 million, or 22.4%, to $32.7 million for fiscal year 2002, from the $26.7 million reported in fiscal year 2001. The increase in research and
development primarily relates to a $4.2 million increase attributable to additional facilities and additional research and development support activities, a $1.0 million increase for fuel storage, fuel delivery systems, and vehicle integration for
fuel cell and CNG-related OEM programs for internally funded fuel cell and alternate fuel system and component application development work and a $0.8 million increase in research and development associated with cost of contract revenues.



General and administrative expenses increased by
$0.5 million, or 11.8%, to $4.8 million for fiscal year 2002 from $4.3 million for fiscal year 2001. The increase for fiscal year 2002 was mainly due to non-recurring charges of $2.0 million for legal and consulting services associated with the
spin-off transaction, the strategic alliance with General Motors and legal proceedings related to patent infringement described in BusinessLegal Proceedings. These expenses were partially offset by cost reduction efforts executed
in the second and third quarter of fiscal year 2002.



Operating losses increased by $12.6 million, or 46.3%, from $27.1 million in fiscal year 2001 to $39.7 million in fiscal year 2002. The increase in loss was attributable to a $6.1 million increase in negative gross profits on product
sales, a $6.0 million increase in research and development expenses and a $0.5 million increase in general and administrative expenses. For the fiscal year 2002, operating losses include $1.2 million in restructuring charges for the closure of our
Mexico assembly operation, the closure of a Michigan facility and associated personnel severance costs.



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Corporate
Expenses.    Corporate expenses consists of general and administrative expenses at the corporate level to support our operating segments in areas such as executive management, finance, human resources, management information
systems, legal services and investor relations. Additionally, amortization of goodwill and other intangible assets is recorded as a corporate expense. Corporate expenses increased $1.3 million, or 18.7%, from $7.0 million in fiscal year 2001 to $8.3
million in fiscal year 2002. During fiscal year 2002, increases in corporate expenses were attributable to $1.2 million in legal fees and consulting services primarily related to Quantum spin-off costs and our Form S-3 filing in connection with a
follow-on equity offering, which was withdrawn on September 20, 2001. We anticipate that corporate expenses will be lower in 2003.



Interest Expense(Net).    Net interest expense increased $1.3 million, or 1,199.0%, from $0.1 million
in fiscal year 2001 to $1.4 million in fiscal year 2002. The increases were primarily due to a higher outstanding balance on our line of credit with Bank of America, as compared to the interest income generated from the proceeds from the July 2000
equity offering in the first quarter of the prior fiscal year. We anticipate that interest expense for fiscal year 2003 will be lower than that of fiscal year 2002 due to lower outstanding balances on the line of credit and term loans.



Provision for Income Taxes.    The
estimated effective annual tax benefit rate of 40% for fiscal year 2002 approximates the previous years tax benefit rate of 41%. The effective tax benefit rate represents the federal statutory income tax rate, state income taxes and foreign
income taxes increased by research and development credits. For the fiscal year ended April 30, 2002 we have incurred a $43.6 million operating loss. Also, we have federal and state research and development credit carryforwards aggregating
approximately $10.6 million. Federal research and development credits totaling $6.4 million expire from 2010 to 2022. State research and development credits of $4.2 million have no expiration date. As of April 30, 2002, the net deferred tax asset
was $31.9 million. We believe that, based on our history of prior operating earnings, our completed spin-off of Quantum and our expectations for the future, our operating income will more likely than not be sufficient to recognize fully the deferred
tax assets and that the estimated effective annual tax rate in the future years will approximate the statutory rate.



Years Ended April 30, 2000 and 2001



Net revenues and operating income for our reporting segments for the fiscal years ended April 30, 2000 and 2001 are as follows:



|                         |  | Revenues             |         |   | Operating Income (Loss) |  
|------------------------ |  | -------------------- | ------- | - | ----------------------- | -
|                         |  | Year Ended April 30, |         |   | Year Ended April 30,    |  
|                         |  | 2000                 |         |   | 2001                    |  
|                         |  | (in thousands)       |        
|Gaseous Fuel Products    |  | $                    | 76,831  |   |                         | $
|International Operations |  |                      | 29,991  |   |                         |  
|Quantum                  |  |                      | 22,341  |   |                         |  
|Corporate expenses(1)    |  |                      |        |   |                         |  
|Intersegment elimination |  |                      | (16,347 | ) |                         |  
|                         |  |                      |         |   |                         |  
|Total                    |  | $                    | 112,816 |   |                         | $
|                         |  |                      |         |   |                         |  

---

|(1) |  | Represents corporate expenses not allocated to any of the reporting segments.
|--- |  | -----------------------------------------------------------------------------



Net revenue decreased $8.9 million, or 7.9%, from $112.8 million in fiscal year 2000 to $103.9 million in
fiscal year 2001. This decrease was primarily due to short-term declines in the automotive aftermarket end use



17



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due to less favorable alternative fuel prices and the declines in small industrial engine sales related to year 2000 preparedness. The
following table sets forth our product revenues by application across all reporting segments:



|                                                |  | Year Ended April 30,
|----------------------------------------------- |  | --------------------
|                                                |  | 2000                
|                                                |  | (in thousands)      
|Motor vehicle products                          |  | $                   
|Forklifts and other material handling equipment |  |                     
|Small portable to large stationary engines      |  |                     
|                                                |  |                     
|Total product sales                             |  | $                   
|                                                |  |                     



During
fiscal years 2000 and 2001, our product revenue was generated in the following geographic regions:



|                         |  | Year Ended April 30, |  
|------------------------ |  | -------------------- | -
|                         |  | 2000                 |  
|United States and Canada |  | 60.2                 | %
|Pacific Rim              |  | 9.3                  | %
|Europe                   |  | 13.7                 | %
|Latin America            |  | 16.8                 | %



Gaseous Fuel Products.    Net revenues in this segment decreased $9.9 million, or 12.9%, from $76.8 million in fiscal year 2000 to $66.9 million in fiscal year 2001. Revenues were lower primarily due to a
$8.1 million slowdown in sales to distributors in Mexico for automotive aftermarket sales. These lower shipments were caused primarily by reduced volumes in aftermarket public transportation programs, a reduction in prices due to increased
competition and a reduction in demand in the Mexican market primarily due to higher propane prices. Additionally, revenues were lower due to a $4.5 million decline in small engine sales related to year 2000 preparedness. These decreases were
partially offset by $4.5 million in higher sales of material handling engine systems and for large industrial engine end uses at our engine systems business.



Gross profit in this segment decreased $4.2 million, or 16.0%, from $26.5 million in fiscal year 2000 to $22.3 million in fiscal year
2001. The decline in revenues negatively impacted gross profit by $4.0 million. The higher percentage of sales to our foreign subsidiaries, which involve lower margins, adversely affected gross profit by approximately $1.1 million. Additionally,
discounts on sales in the Mexico marketplace negatively affected gross profits by $0.2 million. These declines were partially offset by a $0.7 million increase in gross profit for material handling and large industrial engines due mainly to lower
per unit overhead costs as a result of higher volumes.



Operating income in this segment decreased $8.4 million, or 42.7%, from $19.5 million in fiscal year 2000 to $11.1 million in fiscal year 2001. This decrease was primarily due to lower gross profits and higher application development
expenses of $4.0 million as compared to the prior fiscal year. The increase in product application development expenses are primarily related to the development of the next generation fuel/engine management systems for the material handling and
industrial engine market.



International
Operations.    Net revenues in this segment increased by $1.1 million, or 3.8%, from $30.0 million in fiscal year 2000 to $31.1 million in fiscal year 2001. In fiscal year 2001, revenues for our International Operations
segment would have increased an additional $3.2 million, if not for the strengthening of the U.S. Dollar. A strong U.S. Dollar has a negative effect on the conversion of foreign currency denominated sales.



Operating income for this segment decreased $1.2 million, or
47.1%, from $2.6 million in fiscal year 2000 to $1.4 million in fiscal year 2001 as all foreign subsidiaries experienced lower operating income. This was primarily a result of lower gross margins due to the higher cost of U.S. goods purchased with
their weakening local currencies. Additionally, we added marketing and technical personnel to support these aspects of the business, which resulted in increasing operating expenses compared to the prior fiscal year.



18



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Quantum.    Net revenues in this segment increased $1.0 million, or 4.6%, from $22.3 million in fiscal year 2000 to $23.3 million in fiscal year 2001.



Product sales increased $2.3 million, or 18.3%, from $13.1
million in fiscal year 2000 to $15.4 million in fiscal year 2001. This increase was primarily due to an increase in unit sales to General Motors. Product sales consists of those associated with General Motors mid-size automobiles, pick-up trucks and
van platforms equipped with our bi-fuel compressed natural gas fuel system and General Motors medium-duty trucks equipped with dedicated liquid propane gas kits.



Cost of product sales increased $4.4 million, or 29.0%, from $15.1 million in fiscal year 2000 to $19.5
million in fiscal year 2001. This increase in cost of product sales was due to $1.4 million in higher material cost related to higher production volume, a $1.3 million increase in manufacturing overhead mainly due to pre-production efforts
associated with our fuel storage tanks, a $0.5 million increase in production related scrap, a $0.4 million increase in additions to the provision for inventory obsolescence, a $0.3 million in additional direct labor for assembled products and a
$0.2 million increase in freight charges. Warranty reserves increased by $0.4 million during the year due to the increased number of vehicles placed into service. Provision for inventory obsolescence is made for each model year based on inventory
levels necessary to provide for future warranty and service parts, as well as for parts that cannot be transferred to the next model year program.



Gross margins on product sales were $2.0 million lower in fiscal year 2001 as compared to fiscal year 2000, primarily due to a $4.4
million increase in cost of product sales, offset partially by a $2.4 million increase in product sales.



Contract revenue decreased $1.4 million, or 14.8%, from $9.3 million in fiscal year 2000 to $7.9 million in fiscal year 2001. This
decrease was primarily due to lower contract levels, which reflect efficiencies that result from our ability to transfer knowledge between prior model year and current model year contracts. Additionally, the contract revenues recognized on pick-up
truck platforms declined due to an expanded scope of the 2001 program to include the 2002 model year, which includes higher engineering costs to complete without a commensurate increase in the contract value.



For the fiscal year 2001, research and development associated
with the cost of contract revenues decreased $0.3 million, or 4.6%, to $5.5 million as compared to the $5.8 million reported in fiscal year 2000. The decrease for the fiscal year 2001 is due to reduced revenue of $1.4 million partially offset by a
decrease in margin from 37.7% to 30.2%. The decrease in margin is primarily due to $0.6 million in cost overruns on the CNG and LPG pick-up truck development programs.



Research and development expense increased by $13.7 million, or 106.0%, from $13.0 million in fiscal year
2000 to $26.7 million in fiscal year 2001. The increase in research and development primarily relates to our $1.7 million increase in application development support costs and a $9.9 million increase for fuel storage, fuel delivery systems and
vehicle integration for fuel cell OEM programs with the remaining $2.4 million attributable to additional facilities and additional research and development activities to support the fuel cell OEM programs. In order to satisfy the anticipated
increased OEM demand, we opened four additional facilities to expand our testing capabilities and vehicle integration capacity. These increases were offset by a $0.3 million decrease in research and development associated with the cost of contract
revenue.



General and administrative expenses
increased by $2.4 million, or 126.7%, from $1.9 million in fiscal year 2000 to $4.3 million in fiscal year 2001. The increase was primarily due to a $1.8 million increase in employment fees and relocation related to our headcount increase.



Operating losses increased $18.6 million, or
218.7%, from $8.5 million in fiscal year 2000 to $27.1 million in fiscal year 2001. This increase was primarily attributable to a $13.7 million increase in research and development expenses, a $2.4 million increase in general and administrative
expenses, a $2.0 million decrease in product gross margins and a $1.4 million decrease in contract revenues.



19



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Corporate
Expenses.    Corporate expenses consists of general and administrative expenses at the corporate level to support our operating segments in areas such as executive management, finance, human resources, management information
systems, legal services and investor relations. Additionally, amortization of goodwill and other intangible assets is recorded as a corporate expense. Corporate expenses remained flat from fiscal year 2000 to fiscal year 2001. Higher legal expenses
of $0.6 million relating to our patent infringement lawsuit against GFI Control Systems, Inc., higher costs pertaining to investor relations of $0.2 million and higher personnel costs of $0.2 million relating to European business development
activities were offset by high one-time legal expenses incurred in the previous year.



Interest Expense.    Interest expense decreased $0.1 million, or 6.9%, from $1.5 million in fiscal year 2000 to $1.4 million in fiscal year 2001. Interest expense in fiscal
year 2001 was offset by $1.3 million in interest income, which was attributable to the proceeds from our July 2000 equity offering that provided us with net proceeds equal to $53.5 million. We paid off the Bank of America working capital line of
credit at the end of the first quarter and we invested the remaining amount in short-term investments and money market accounts.



Provision for Income Taxes.    We have recorded an effective annual tax benefit rate of 41% for fiscal year
2001. The effective tax benefit rate represents the federal statutory income tax rate, state income taxes and foreign income taxes increased by research and development credits. For fiscal year 2001, we incurred nearly a $21.8 million net operating
loss, or NOL. We carried a portion of this NOL back to the prior two taxable years resulting in $1.5 million in tax refunds. Research and development credits, freed up by the NOL carryback, may be carried forward to future taxable years. At the end
of fiscal year 2001, federal and state research and development credit carryforwards were $6.6 million. Federal research and development credits totaling $4.7 million expire between 2009 and 2021. State research and development credits of $1.9
million have no expiration. At the end of fiscal year 2001, our net deferred tax assets were $12.8 million.



Liquidity and Capital Resources



We use cash generated from our operations, equity capital, bank financings and sales of our equity securities to fund capital expenditures and research and development, as well as to invest in and
operate our existing operations and new businesses. In January 2002, we completed a private placement of common stock and warrants in which we received $22.5 million in gross proceeds. In May 2002, subsequent to our fiscal year end, we completed a
private placement of common stock in which we received $18.8 million in gross proceeds. On the distribution date, we contributed $15 million in cash to Quantum to supply liquidity to meet their short-term operational needs. While these sources of
funds have been sufficient in the past, we currently anticipate that we will require additional sources of financing in order to capitalize on opportunities that we believe to exist in the alternative fuel market and to invest in long-term business
opportunities. In addition to the $15 million contributed to Quantum, in the short-term we may require additional sources of financing in order to fund capital and operating commitments of $4 million, Bank of America debt reduction obligations
of $7.6 million, and general working capital requirements. These additional sources of financing may include bank borrowings or public or private offerings of equity or debt securities. We cannot assure you that such additional sources of
financing will be available on acceptable terms, if at all. If additional sources of financing are not available, we plan to implement measures to conserve cash and reduce costs, which may affect our ability to capitalize on strategic growth
opportunities and to pursue our research and development plans.



The ratio of current assets to current liabilities was 1.9:1 at the end of fiscal year 2002 and 2.8:1 at the end of fiscal year 2001. During fiscal year 2002, our total working capital decreased by $22.2 million from
$51.5 million at the end of fiscal year 2001 to $29.3 million at the end of fiscal year 2002. Net cash used in operating activities was $27.8 million in fiscal year 2002 as compared to $13.7 million for fiscal year 2001. The increase in cash
used in operating activities during fiscal year 2002 resulted primarily from the net operating loss of $43.6 million as compared to the net operating loss of $21.7 million the previous year. For fiscal year 2002, $2.0 million in taxes and interest
paid increased the cash used in operating activities. These increases were partially offset by a $6.9 million decrease in accounts receivable, $5.7 million in depreciation and amortization, a



20



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$3.5 million decrease in inventory and a $1.5 million decrease in other assets. Excluding the funds used in Quantums operating
activities, we would have generated cash from operations during fiscal year 2002. As a result of the spin-off of Quantum and our deferred tax asset position, we anticipate generating cash from operations in the future.



Net cash used in investing activities in fiscal year 2002 was
$6.7 million, a decrease of $6.0 million from fiscal year 2001. This decrease is primarily a result of lower purchases of equipment and leasehold improvements.



Net cash provided by financing activities for fiscal year 2002 was $28.3 million or a decrease of $11.4 million from the $39.7
million reported the previous year. The cash provided by financing activities during the current year resulted primarily from the proceeds of our private placement of $22.5 million, option exercises of $0.9 million, the repayment of officer loans of
$3.9 million, an increase in our operating line of credit of $3.6 million and an increase in our term debt by $1.8 million; however, this was partially offset by term loan principal payments of $3.0 million.



In June 2002, the credit facility with Bank of America was
amended to reduce the line of credit availability from $9.5 million to $8.0 million and extend the maturity date of the Companys line of credit and term loans to May 31, 2003. The credit facility was also amended to remove Quantum as a
subsidiary borrower and to release the pledge on the assets transferred to Quantum as of the distribution date. The amended facility also provides for a $1.0 million non-revolving line of credit for future capital expenditures. The Bank of America
facility contains covenants that require us to satisfy certain financial tests, including a minimum EBITDA and a total debt leverage ratio, beginning with the fiscal quarter ending July 31, 2002. While our non-revolving capital expenditure line
expires on May 31, 2003, we have the option to convert it to a term loan, requiring quarterly principal reductions, which would extend the maturity date to March 31, 2005. In addition, our subsidiary in the Netherlands has a Euro 2.3 million (US$2.1
million at April 30, 2002) credit facility with Fortis Bank. At April 30, 2002, there was an outstanding balance under this credit facility of US$1.1 million.



Our subsidiary in Japan has a ¥64 million (US$0.5 million at April 30, 2002) short-term loan facility
with the Hong Kong and Shanghai Banking Corporation Ltd., Osaka Branch. At April 30, 2002, a balance of US$0.5 million was outstanding.



The following table contains supplemental information regarding total contractual obligations as of April 30, 2002. The capital lease
obligations are undiscounted and represent total minimum lease payments. The term loan payable includes an amount of $0.2 million classified as a derivative instrument and due in the current period (see note 3(d) of the Notes to Consolidated
Financial Statements).



|                            |  | Total |            | Less 1 Yr. |   | 1-3 Yrs.   |  | 4-5 Yrs. |            | After 5 Yrs.
|--------------------------- |  | ----- | ---------- | ---------- | - | ---------- |  | -------- | ---------- | ------------
|Contractual Obligations:    |  |       |            |            |   |            |  |          |            |             
|Revolving line of credit    |  | $     | 8,625,000  |            | $ | 8,625,000  |  |          |           |             
|Term loan payable           |  |       | 9,631,349  |            |   | 4,741,387  |  |          | 4,889,962  |             
|Capital lease obligations   |  |       | 1,497,576  |            |   | 962,658    |  |          | 534,918    |             
|Operating lease obligations |  |       | 12,594,668 |            |   | 3,018,027  |  |          | 4,899,850  |             
|Employment agreements       |  |       | 1,401,773  |            |   | 731,360    |  |          | 670,413    |             
|                            |  |       |            |            |   |            |  |          |            |             
|Totals                      |  | $     | 33,750,366 |            | $ | 18,078,432 |  | $        | 10,995,143 |             
|                            |  |       |            |            |   |            |  |          |            |             



Derivative Financial
Instruments



We use derivative financial
instruments for the purpose of reducing our exposure to adverse fluctuations in interest and foreign exchange rates. While these hedging instruments are subject to fluctuations in value, such fluctuations are generally offset by the value of the
underlying exposures being hedged. We are not a party to leveraged derivatives and do not hold or issue financial instruments for speculative purposes.



21



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Foreign
Currency Management.    The results and financial condition of our international operations are affected by changes in exchange rates between certain foreign currencies and the U.S. Dollar. Our exposure to fluctuations in
currency exchange rates has increased as a result of the growth of our international subsidiaries. The functional currency for all of our international subsidiaries is the local currency of the subsidiary. An increase in the value of the U.S. Dollar
increases the costs incurred by our subsidiaries because most of our international subsidiaries inventory purchases are U.S. Dollar denominated. We monitor this risk and attempt to minimize the exposure through forward currency contracts and
the management of cash disbursements in local currencies. At April 30, 2002, we had no forward currency contracts. We seek to manage our foreign currency economic risk by minimizing our U.S. Dollar investment in foreign operations using foreign
currency term-loans to finance the operations of our foreign subsidiaries.



Interest Rate Management.    We use interest rate swap agreements with Bank of America to manage our exposure to interest rate changes and to stabilize the cost of borrowed
funds. When this type of agreement is executed, the swap is generally linked to a specific debt instrument. At April 30, 2002 we had approximately $6.4 million in a fixed interest rate agreement. One loan totaling $6.4 million at April 30, 2002 had
a fixed interest rate of 10.6%. Absent this fixed rate agreement the variable rate for this debt at April 30, 2002 would have been 6.9%. At April 30, 2002 the fair value of the interest rate swap agreement was $(0.2) million.



Debt Obligations.    The following
table summarizes our debt obligations at April 30, 2002. The interest rates represent weighted average rates, with the period end rate used for the variable rate debt obligations. The fair value of the debt obligations approximated the recorded
value as of April 30, 2002.



|                                                  |  | 2003                  |     |   | 2004 |   |     | 2005 |  |   | 2006 |   |  | Thereafter |     | Total |  | Fair Value 4/30/02
|------------------------------------------------- |  | --------------------- | --- | - | ---- | - | --- | ---- |  | - | ---- | - |  | ---------- | --- | ----- |  | ------------------
|                                                  |  | (Dollars in millions)
|Long term debt denominated in US dollars:         |  |                       |     |   |      |   |     |      |  |   |      |   |  |            |     |       |  |                   
|Line of credit                                    |  | $                     |    |   |      | $ | 8.6 |      |  | $ |     |   |  | $          |    |       |  | $                 
|Term loans, including current portion:            |  |                       |     |   |      |   |     |      |  |   |      |   |  |            |     |       |  |                   
|Variable rate                                     |  | $                     | 3.1 |   |      | $ | 3.0 |      |  | $ | 1.8  |   |  | $          |    |       |  | $                 
|Average interest rate                             |  |                       | 9.9 | % |      |   | 9.8 | %    |  |   | 9.6  | % |  |            | 7.0 | %     |  |                   
|Long term debt denominated in foreign currencies: |  |                       |     |   |      |   |     |      |  |   |      |   |  |            |     |       |  |                   
|Euros                                             |  |                       |     |   |      |   |     |      |  |   |      |   |  |            |     |       |  |                   
|Line of Credit                                    |  | $                     | 1.1 |   |      | $ |    |      |  | $ |     |   |  | $          |    |       |  | $                 
|Japanese Yen                                      |  |                       |     |   |      |   |     |      |  |   |      |   |  |            |     |       |  |                   
|Line of credit                                    |  | $                     | 0.5 |   |      | $ |    |      |  | $ |     |   |  | $          |    |       |  | $                 
|Interest rate derivative financial instruments:   |  |                       |     |   |      |   |     |      |  |   |      |   |  |            |     |       |  |                   
|Pay fixed/receive variable                        |  | $                     | 2.6 |   |      | $ | 2.5 |      |  | $ | 1.3  |   |  | $          |    |       |  | $                 
|Average pay rate                                  |  |                       | 5.6 | % |      |   | 5.6 | %    |  |   | 5.6  | % |  |            |    |       |  |                   
|Average receive rate                              |  |                       | 1.9 | % |      |   | 1.9 | %    |  |   | 1.9  | % |  |            |    |       |  |                   



Recent Accounting
Pronouncements



In August 2001, the
Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (FAS 144), which addresses financial accounting and reporting for the impairment or
disposal of long-lived assets and supersedes SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of, and the accounting and reporting provisions of APB Opinion No. 30, Reporting the Results of
Operations for a disposal of a segment of a business. FAS 144 is effective for fiscal years beginning after December 15, 2001, with earlier application encouraged. We expect to adopt FAS 144 as of May 1, 2002 and do not expect that the adoption of
the Statement will have a significant impact on our financial position and results of operations, except that the Quantum operations will be presented as a discontinued operation.



22



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In June 2001,
the Financial Accounting Standards Board issued Statements of Financial Accounting Standards No. 141, Business Combinations, and No. 142, Goodwill and Other Intangible Assets, effective for fiscal years beginning after
December 15, 2001. Under the new rules, goodwill will no longer be amortized but will be subject to annual impairment tests in accordance with the Statements. Other intangible assets will continue to be amortized over their useful lives.



We will apply the new rules on accounting for
goodwill and other intangible assets beginning in the first quarter of fiscal year 2003. Application of the nonamortization provisions of the Statement is expected to result in an increase in net income of approximately $0.5 million ($.04 per share)
per year. We will perform the first of the required impairment tests of goodwill and indefinite lived intangible assets as of May 1, 2002 and have not yet determined what the effect, if any, these tests will have on our earnings and financial
position.



Risk Factors



The preceding discussion contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. We face a number of risks and uncertainties in any forward-looking statement. Factors that could cause or contribute
to such differences include, but are not limited to, the following:



The recent spin-off of our Quantum subsidiary is subject to tax risks for us and our stockholders, including restrictions on our issuance of equity securities in order to maintain the tax-free status of the spin-off.



If the spin-off qualifies under Section 355
of the Internal Revenue Code, it will be tax-free to our stockholders for federal income tax purposes. No ruling has been or will be sought from the Internal Revenue Service with respect to the federal income tax consequences of the spin-off.
Although Morrison & Foerster LLP issued an opinion to the effect that the spin-off will qualify under Section 355 of the Internal Revenue Code, their opinion is not binding on the Internal Revenue Service. The opinion is also subject to specific
assumptions and the accuracy and completeness of specific factual representations and statements made by us and Quantum, including that Quantum will complete an initial public offering of its stock within one year following the spin-off. If these
assumptions, representations or statements are incorrect or incomplete in any material respect, the conclusions set forth in the opinion may not be correct. Although we are not aware of any facts or circumstances which would cause such
representations or assumptions to be untrue, we cannot assure that the spin-off will be tax-free to our stockholders. Neither we nor Quantum will indemnify any of our stockholders who received shares of Quantum common stock in the spin-off for any
tax liabilities.



Even if the spin-off qualifies
under Section 355 of the Internal Revenue Code, it will be taxable to us (but not our stockholders) if Section 355(e) of the Internal Revenue Code applies to the spin-off. Section 355(e) of the Internal Revenue Code will apply if 50% or more of our
stock or Quantum stock, by vote or value, is acquired by one or more persons, other than our historic stockholders who received our common stock in the spin-off, acting pursuant to a plan or a series of related transactions that include the
spin-off. Substantial uncertainty exists on the scope of Section 355(e) of the Internal Revenue Code, and we, our stockholders, Quantum and its stockholders have undertaken, contemplate undertaking or may otherwise undertake in the future
transactions which may cause Section 355(e) to apply. These transactions include but are not limited to private placements of our stock, any offerings of Quantum stock, and any issuances of our or Quantum stock in connection with the acquisition of
other companies. Accordingly, we cannot assure you that Section 355(e) of the Internal Revenue Code will not apply to the spin-off.



Although Quantum has contractually agreed to indemnify us for taxes arising if its actions cause Section 355(e) of the Internal Revenue
Code to apply to the spin-off, we cannot provide you any assurance that Quantum will have the financial ability to satisfy this obligation or that our own or another partys actions will not cause Section 355(e) to apply. In the event that we
were liable for any taxes resulting from the application of Section 355(e) of the Internal Revenue Code, the payment would have a substantial and material adverse effect on our business, financial position and results of operations. The potential
applicability of Section 355(e) of the Internal Revenue Code may also discourage, delay or prevent a merger, change of control, or other strategic or capital raising transactions involving our outstanding equity or issuance of new equity.





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The growth of the alternative fuel market will have a significant impact on our business.



Our future success depends on the continued
expansion of the alternative fuel industry, which has not yet gained broad acceptance. In the United States and certain of our other target markets, alternative fuel such as natural gas currently cannot be readily obtained by consumers for motor
vehicle use and only a small percentage of motor vehicles manufactured in 2000 was equipped to use alternative fuels. We cannot assure you that the market for gaseous alternative fuel engines will gain broad acceptance or, if it does, that it will
result in increased sales of our advanced fuel system products. In addition, we have designed many of our products for alternative fuel vehicles powered by both fuel cells and internal combustion engines, but not currently for alternative power
sources, such as electricity or alternate forms of existing fuels. If the major growth in the alternative fuel market relates solely to existing fuels, our revenues may not increase and may decline.



Users of gaseous alternative fueled vehicles may not be able to obtain fuel
conveniently and affordably, which may adversely affect the demand for our products.



Vehicles and equipment powered by gaseous alternative fuels run primarily on natural gas or propane. The construction of a distribution system to deliver natural gas and propane will require investment
by third parties. An adequate fuel distribution infrastructure may not be adopted. We are relying on third parties, some of which are committed to the existing gasoline infrastructure, to build this infrastructure. If these parties build a fuel
distribution infrastructure, the fuel delivered through it, both due to the cost of the delivery system and the cost of the fuel itself, may have a higher price than users are willing to pay. If users cannot obtain fuel conveniently or affordably, a
mass market for vehicles and equipment powered by gaseous alternative fuels or fuel cells is unlikely to develop. Our ability to attract customers and sell products successfully in the alternative fuel industry also depends on a price differential
between liquid fuels, such as petroleum and gasoline, and gaseous fuels, such as propane and natural gas. This price differential may not continue. Should this differential narrow or disappear, it could adversely affect the demand of our products.



We currently face and will continue to face significant
competition, which could result in a decrease in our revenue.



We currently compete with companies that manufacture products to convert internal combustion engines operating on liquid fuels to gaseous fuels. Increases in the market for alternative fueled vehicles may cause OEMs to find
it advantageous to develop and produce their own fuel conversion or fuel management equipment rather than purchasing the equipment from suppliers such as us. In addition, greater acceptance of alternative fuel engines may result in new competitors.
Should any of these events occur, the total potential demand for our products could be adversely affected and cause us to lose existing business.



We face risks associated with marketing, distributing and servicing our products internationally.



We currently operate in Australia, Europe, India, Japan and
Mexico and market our products and technologies in other international markets, including both industrialized and developing countries. Our international operations are subject to various risks common to international activities, such as the
following:



| |  |  | exposure to currency fluctuations;
| | - |  | ----------------------------------



| |  |  | managing potential difficulties in enforcing contractual obligations and intellectual property rights;
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | the burden of complying with a wide variety of laws and regulations, including product certification, environmental and import and export laws;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | political instability; and
| | - |  | --------------------------



| |  |  | difficulties collecting international accounts receivable.
| | - |  | ----------------------------------------------------------



Any significant increase in the value of the dollar against currencies in foreign markets in which we do business may impact negatively
our competitiveness in international markets.



24



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Our business may be subject
to product liability claims, which could be expensive and could result in a diversion of managements attention.



The automotive industry experiences significant product liability claims. As a supplier, we face an inherent business risk of exposure to
product liability claims in the event that our products or the equipment into which our products are incorporated malfunction, resulting in personal injury or death. We may be named in product liability claims even if there is no evidence that our
systems or components caused the accident. Product liability claims could result in significant losses as a result of expenses incurred in defending claims or the award of damages. The sale of systems and components for the transportation industry
entails a high risk of these claims. In addition, we may be required to participate in a recall involving these systems if any of our systems prove to be defective, or we may voluntarily initiate a recall or make payments related to such claims as a
result of various industry or business practices or the need to maintain good customer relationships. We cannot assure you that our product liability insurance will be sufficient to cover all product liability claims, that such claims will not
exceed our insurance coverage limits or that such insurance will continue to be available on commercially reasonable terms, if at all. Any product liability claim brought against us could have a material adverse effect on our reputation and
business.



Our business may become subject to future product
certification regulations which may impair our ability to market our products.



We must obtain product certification from governmental agencies, such as the Environmental Protection Agency and the California Air Resources Board, to sell certain of our products in the United
States. A significant portion of our future sales will depend upon sales of fuel management products that are certified to meet existing and future air quality and energy standards. We cannot assure you that our products will continue to meet these
standards. The failure to comply with these certification requirements could result in the recall of our products, civil penalties or criminal penalties. Any new government regulation that affects our advanced fuel technologies, whether at the
foreign, federal, state or local level, including any regulations relating to installation and servicing of these systems, may increase our costs and the price of our systems. As a result, these regulations may have a negative impact on our revenues
and profitability and thereby harm our business, prospects, results of operations or financial condition.



New technologies could render our existing products obsolete.



New developments in technology may negatively affect the development or sale of some or all of our products or make our products obsolete.
There is a range of other technologies that could compete with alternative fuel technologies, including electric and hybrid vehicles and methanol vehicles. Our success depends upon our ability to design, develop and market new or modified, fuel
delivery and electronic control products for internal combustion engines. Our inability to enhance existing products in a timely manner or to develop and introduce new products that incorporate new technologies, conform to increasingly stringent
emission standards and performance requirements, and achieve market acceptance in a timely manner could negatively impact our competitive and financial position. New product development or modification is costly; involves significant research,
development, time and expense; and may not necessarily result in the successful commercialization of any new products.



We depend on our intellectual property, and our failure to protect that intellectual property could adversely affect our future growth and success.



We rely on patent, trademark and copyright
law, trade secret protection, and confidentiality and other agreements with our employees, customers, partners and others to protect our intellectual property for our fuel cell enabling and alternative fuel technologies. However, some of our
intellectual property is not covered by any patent or patent application and, despite our precautions, it may be possible for third parties to obtain and use our intellectual property without authorization. We do not know whether any patents will be
issued or whether issued



25



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patents will be sufficiently broad to protect our technology or processes. Patent applications and issued patents may be challenged or
invalidated. We could incur substantial costs in prosecuting or defending patent infringement suits.



Furthermore, the laws of some foreign countries may not protect intellectual property rights to the same extent as do the laws of the
United States. It may be difficult for us to enforce certain of our intellectual property rights against third parties that may have acquired intellectual property rights by filing unauthorized applications in foreign countries to register the marks
that we use because of their familiarity with our worldwide operations.



We cannot assure you that we will be successful in protecting our proprietary rights. Any infringement on any of our intellectual rights could have an adverse effect on our ability to develop and sell successfully
commercially competitive systems and components.



We depend on
third-party suppliers for the supply of key materials and components for our products.



We have established relationships with third-party suppliers, which provide materials and components for our products. A suppliers failure to supply materials or components in a timely manner or
to supply materials and components that meet our quality, quantity or cost requirements, combined with a delay in our ability to obtain substitute sources for these materials and components in a timely manner or on terms acceptable to us, would harm
our ability to manufacture our products or would significantly increase our production costs.



If the May 2002 offer and sale of our common stock were to be found not to be exempt from Section 5 of the Securities Act, then the selling stockholders as well as investors in the January private
placement may be able to sue to recover the consideration paid for their shares or for damages.



In May 2002 we made a private offer and sale of our common stock to certain accredited investors. This offering occurred less than six
months from the completion of the private placement transaction we conducted in January 2002 and the resale registration statement on Form S-3 relating to the shares and warrants issued in the January private placement was still effective when the
May 2002 offering was consummated. As a result, the two private placements do not fall within the six month safe-harbor provided by Regulation D promulgated under the Securities Act and there is a risk that investors in either offering may claim
that the current transaction should be integrated with the January private placement. We do not believe that the offer and sale of our common stock to the selling stockholders should be integrated or treated as a single offering with the January
private placement or the resale registration statement that related to the shares and warrants in that transaction, and we believe that the offer and sale of our common stock to the selling stockholders is exempt from registration under the
Securities Act. However, if a court were to determine otherwise, and the offer and sale of our common stock to the selling stockholders were found not to be a valid private placement, then the selling stockholders as well as investors in the January
private placement may be entitled to recover the consideration paid for the shares they purchased with interest thereon, or for damages (if the investor no longer owns the shares).



Potential fluctuations in our financial results could cause our stock price to decline.



Our revenue and operating results are subject to annual and
quarterly fluctuations as a result of a variety of factors, including the following:



| |  |  | purchasing cycles of fleet operators and other customers;
| | - |  | ---------------------------------------------------------



| |  |  | the uncertainty of timing of deliveries of vehicles and other equipment on which our products are installed;
| | - |  | ------------------------------------------------------------------------------------------------------------



| |  |  | the timing of implementation of government regulations promoting the use of our products; and
| | - |  | ---------------------------------------------------------------------------------------------



| |  |  | general economic factors.
| | - |  | -------------------------



26



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It is possible
that our operating results in one or more future quarters may fall below the expectations of securities analysts and investors. If this occurs, the trading price of our common stock might be materially and adversely affected.



We could lose or fail to attract the personnel necessary to run our
business.



Our success depends in large part
on our ability to attract and retain key management, engineering, scientific, manufacturing and operating personnel. Recruiting personnel for the industries in which we engage is highly competitive, and the failure to attract or retain qualified
personnel could have a material adverse effect on our business.



Our business could be harmed if we fail to meet OEM specifications.



We offer integrated alternative fuel systems, which include tanks, brackets, electronics, software and other components required to allow these products to operate in other alternative fuel
applications. Customers for these systems require that these products meet strict OEM standards. Our compliance with these requirements has resulted in increased development, manufacturing, warranty and administrative costs. A significant increase
in these costs could adversely affect our profitability. If we fail to meet OEM specifications on a timely basis, our relationships with OEMs may be harmed.



We may be subject to increased warranty claims.



In response to consumer demand, vehicle manufacturers have been providing, and may continue to provide, increasingly longer warranty
periods for their products. As a consequence, these manufacturers require their suppliers, such as us, to provide correspondingly longer product warranties. As a result, we could incur substantially greater warranty claims in the future.



We may experience unionized labor disputes at OEM facilities.



Vehicle conversion programs with OEMs are
dependent on OEM production and the associated labor forces at OEM sites. Labor unions represent most of the labor forces at OEM facilities. Labor disputes could occur at OEM facilities, which could adversely impact our direct OEM product sales.



Changes in environmental policies could hurt the market for
our products.



The market for alternative
fueled vehicles and equipment, and the demand for products are driven, to a significant degree, by local, state and federal regulations in the United States that relate to air quality and require the purchase of motor vehicles and equipment
operating on alternative fuels. Similarly, foreign governmental regulations also affect our international business. These laws and regulations may change, which could result in transportation or equipment manufacturers abandoning their interest in
alternative fueled vehicles. In addition, a failure by authorities to enforce current domestic and foreign laws or to adopt additional environmental laws could limit the demand for our products. Although many governments have identified as a
significant priority the development of alternative energy sources, we cannot assure you that governments will not change their priorities or that any change they make would not materially affect our revenue or the development of our products.



We may be subject to litigation if our stock price is
volatile.



Our common stock has experienced
in the past, and may experience in the future, price and volume fluctuations. Many factors may cause the market price for our common stock to decline, perhaps substantially, following this offering, including the following:



| |  |  | failure to meet our product development and commercialization milestones;
| | - |  | -------------------------------------------------------------------------



| |  |  | demand for our common stock;
| | - |  | ----------------------------



27



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| |  |  | failure of our revenue and operating results to meet the expectations of securities analysts or investors in any quarter;
| | - |  | -------------------------------------------------------------------------------------------------------------------------



| |  |  | downward revisions in securities analysts estimates or changes in general market conditions;
| | - |  | ---------------------------------------------------------------------------------------------



| |  |  | technological innovations by competitors or in competing technologies;
| | - |  | ----------------------------------------------------------------------



| |  |  | investor perception of our industry or our prospects; or
| | - |  | --------------------------------------------------------



| |  |  | general technology or economic or regulatory trends.
| | - |  | ----------------------------------------------------



In the past, companies that have experienced declines in the market price of their stock have been the subject of securities class action
litigation. We may become involved in a securities class action litigation in the future. Litigation of this type often results in substantial costs and a diversion of managements attention and resources, which could harm our business,
prospects, results of operations or financial condition.



Provisions of Delaware law and of our charter and bylaws may make a takeover more difficult.



Provisions in our certificate of incorporation and bylaws and in the Delaware corporate law may make it difficult and expensive for a
third party to pursue a tender offer, change in control or takeover attempt that our management and Board of Directors oppose. Public stockholders that might desire to participate in one of these transactions may not have an opportunity to do so. We
also have a staggered Board of Directors, which makes it difficult for stockholders to change the composition of the Board of Directors in any one year. These anti-takeover provisions could substantially impede the ability of public stockholders to
benefit from a change in control or to change our management and Board of Directors.



We have a Stockholder Protection Rights Agreement that provides for a dividend of one right for each outstanding share of our common stock. Upon the occurrence of some events, including a person or
entitys acquisition of 15% or more of our common stock, each right will entitle the holder to purchase, at an exercise price of $45 per share, common stock with a value equal to twice the exercise price, which could cause substantial dilution.
The rights agreement may have the effect of deterring, delaying or preventing a change in control that might otherwise be in the best interests of our stockholders.



Item 8.Financial Statements and Supplementary Data.



See pages F-1 through F-25 of this Annual Report on Form
10-K.



28



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Item
13.Certain Relationships and Related Transactions



Options Granted by Certain Stockholders



On June 5, 1998, Questor Partners Fund, L.P. and its affiliate, Questor Side-by-Side Partners, L.P. (together, Questor), purchased shares of the Companys Common Stock and 1993 Series
1 Preferred Stock from the estate and family of a deceased stockholder and on the same day granted separate options (the Questor Options) to certain officers of the Company to purchase shares of the Companys Common Stock as
follows:



|Robert M. Stemmler |  | 113,858
|------------------ |  | -------
|Syed Hussain       |  | 113,858
|Dale L. Rasmussen  |  | 56,928 



Each of
the Questor Options had an exercise price of $13.75 per share. The options vested at the rate of 25% annually commencing June 30, 1999. The options would become exercisable upon the earlier of (i) June 5, 2003 or (ii) the sale by Questor of 50% or
more of the shares of Common Stock owned by it as of June 5, 1998 (including 614,250 shares of Common Stock into which the Companys 1993 Series 1 Preferred Stock owned by Questor was then convertible). In February 2001, Questor notified the
officers that Questor had sold 50% or more of the shares of Common Stock that it had owned as of June 5, 1998, and in March 2001 each of the officers exercised the Questor Options as described below.



Loans



On March 15, 2001, each of Mr. Stemmler (the Companys President and Chief Executive Officer),
Mr. Rasmussen (the Companys Senior Vice President and Secretary) and Mr. Hussain (the Companys former Vice President of Technology and Quantum division) exercised his respective Questor Options to purchase IMPCO Common Stock from
Questor at $13.75 per share in the following amounts: Mr. Stemmler, 113,858 shares; Mr. Rasmussen, 56,928 shares; and Mr. Hussain, 113,858 shares. To finance the exercise of the Questor Options, the Company extended loans to the officers for the
full purchase price of an aggregate of $3,913,854 ($1,565,547 each to Messrs. Stemmler and Hussain and $782,760 to Mr. Rasmussen). The loans were secured by (i) a pledge to the Company of a security interest in and lien upon shares of common stock
of the Company (the Pledged Shares) and certain vested Company nonqualified stock options issued to each such person pursuant to various Company stock option plans (the NQ Options) and (ii) an agreement not to exercise any
vested Company incentive stock options issued to the Reporting Person pursuant to various Company stock option plans (ISOPs) or to grant any third party any interest in such ISOPs. Additionally, Mr. Rasmussen pledged the equity value of
his personal residence as collateral to secure his loan and Messrs. Stemmler and Rasmussen provided collateral to secure Mr. Hussains loan. Each loan bore interest at 9% per annum with a one year maturity. Each of these loans was repaid in
full in July 2001.



The Company loaned Mr.
Hussain $58,000 in June 1999 and an additional $90,000 in December 2000. The loans bore interest at a rate of 5% per annum. The purpose of these loan was for general personal reasons. Mr. Hussains loans, plus accrued interest, was paid in
full in July 2001.



In December 2000, the Company
loaned Mr. Rasmussen $100,000 for general personal reasons. The loan initially bore interest at a rate of 5% per annum (through June 30, 2001) and currently bears interest at a rate of 9% per annum. On September 7, 2001, the Company loaned Mr.
Rasmussen an additional $175,000 for general personal reasons. The loan bears interest at a rate of 9% per annum. Both loans to Mr. Rasmussen mature July 31, 2002. At June 30, 2002, the total outstanding amounts of the loans were $300,091.



The Company cannot make assurances that one or
more of these related party loans are on terms no less favorable to the Company than might be obtained in arms length transactions. Because of the prohibitions arising under the Sarbanes-Oxley Act of 2002, the Company will not modify any
outstanding loans nor will it enter into new related party transactions other than as permitted by applicable law at the time of the transaction.



29



---

PART IV



Item 14.Exhibits, Financial Statement Schedules, and Reports on Form 8-K.



(a)    Documents filed as part of
this report:



(1) Consolidated Financial
Statements:



Report of
independent auditors.

Consolidated balance sheets as of April 30, 2001 and 2002.

Consolidated statements of operations for the years ended April 30, 2000, 2001, and 2002.

Consolidated statements of stockholders equity for the years ended April 30, 2000, 2001, and 2002.

Consolidated statements of cash flows for the years ended April 30, 2000, 2001, and 2002.

Notes to consolidated financial statements.

Unaudited Pro Forma Condensed Consolidated Financial Statements

Unaudited Pro Forma Condensed Consolidated Balance Sheets

Unaudited Pro Forma Condensed Consolidated Statements of Operations

Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements



(2) Supplemental Financial Statement Schedules:



Schedule IIValuation
and Qualifying Accounts



SCHEDULE
IIVALUATION ACCOUNTS



|                                                      |  | Balance at beginning of period |           | Additions charged (credited) to costs and expenses |   | Write-offs and other adjustments |  |   | Balance at end of period
|----------------------------------------------------- |  | ------------------------------ | --------- | -------------------------------------------------- | - | -------------------------------- |  | - | ------------------------
|Allowance for doubtful accounts for the period ended: |  |                                |           |                                                    |   |                                  |  |   |                         
|April 30, 2002                                        |  | $                              | 1,021,353 |                                                    | $ | 372,653                          |  | $ | (478,717                
|April 30, 2001                                        |  |                                | 565,597   |                                                    |   | 654,932                          |  |   | (199,176                
|April 30, 2000                                        |  |                                | 535,824   |                                                    |   | 561,679                          |  |   | (531,906                
|                                                     
|Inventory valuation reserve for the period ended:     |  |                                |           |                                                    |   |                                  |  |   |                         
|April 30, 2002                                        |  |                                | 2,795,757 |                                                    |   | 2,596,930                        |  |   | (1,279,802              
|April 30, 2001                                        |  |                                | 1,943,320 |                                                    |   | 1,259,403                        |  |   | (406,966                
|April 30, 2000                                        |  |                                | 1,543,474 |                                                    |   | 540,310                          |  |   | (140,464                
|                                                     
|Warranty reserve for the period ended:                |  |                                |           |                                                    |   |                                  |  |   |                         
|April 30, 2002                                        |  |                                | 642,146   |                                                    |   | 1,645,270                        |  |   | (776,673                
|April 30, 2001                                        |  |                                | 640,354   |                                                    |   | 500,056                          |  |   | (498,264                
|April 30, 2000                                        |  |                                | 488,811   |                                                    |   | 693,281                          |  |   | (541,738                
|                                                     
|Product liability reserve for the period ended:       |  |                                |           |                                                    |   |                                  |  |   |                         
|April 30, 2002                                        |  |                                | 1,000     |                                                    |   |                                 |  |   |                        
|April 30, 2001                                        |  |                                | 1,000     |                                                    |   |                                 |  |   |                        
|April 30, 2000                                        |  |                                | 1,000     |                                                    |   |                                 |  |   |                        



All other schedules are omitted because the information is not applicable or is not material, or because the information is included in the consolidated financial statements or the notes thereto.



30



---



(3)
Exhibits:



|Exhibit No. |  | Description                                                                                                                                                                                      |  | Note No. |  
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------- | -
|2.1         |  | Deed of Sale of Business by and among IMPCO Technologies Pty. Limited, as buyer, and
Ateco Automotive Pty Limited, as seller, dated as of July 1, 1996.                                          |  | (7       | )
|           
|2.2         |  | Deed of Release by and among IMPCO Technologies, Inc. and Ateco Automotive Pty
Limited dated as of July 1, 1996.                                                                                 |  | (7       | )
|           
|2.3         |  | Shareholders Agreement for Gas Parts (NSW) Pty Limited by and among IMPCO
Technologies Pty. Limited, Gas Parts Pty Limited and Gas Parts (NSW) Pty. Limited, dated as of July 4, 1996.           |  | (7       | )
|           
|3.1         |  | Certificate of Incorporation, as currently in effect.                                                                                                                                            |  | (28      | )
|           
|3.2         |  | Bylaws adopted July 22, 1998.                                                                                                                                                                    |  | (13      | )
|           
|4.1         |  | Stockholders Protection Rights Agreement dated as of June 30, 1999 between
IMPCO Technologies, Inc. and ChaseMellon Stockholder Services, L.L.C., as Rights Agent.                              |  | (12      | )
|           
|10.1        |  | Lease between L-W Income Properties and IMPCO Technologies, Inc. dated May 10,
1989.                                                                                                             |  | (2       | )
|           
|10.2+       |  | 1989 Incentive Stock Option Plan.                                                                                                                                                                |  | (3       | )
|           
|10.3+       |  | 1991 Executive Stock Option Plan dated November 5, 1991, among AirSensors, Inc., as
the Company, and Bertram R. Martin, James J. Mantras and Dale L. Rasmussen, as Optionees.                    |  | (4       | )
|           
|10.4        |  | First Amendment to Lease dated April 19, 1993, between L-W Income Properties and
IMPCO Technologies, Inc.                                                                                        |  | (5       | )
|           
|10.5+       |  | 1993 Stock Option Plan for Non-employee Directors.                                                                                                                                               |  | (6       | )
|           
|10.6+       |  | Amendment to 1989 Incentive Stock Option Plan.                                                                                                                                                   |  | (6       | )
|           
|10.7+       |  | 1996 Incentive Stock Option Plan.                                                                                                                                                                |  | (8       | )
|           
|10.8+       |  | 1997 Incentive Stock Option Plan.                                                                                                                                                                |  | (9       | )
|           
|10.9        |  | Lease between Klein Investments, Family Limited Partnership, as lessor, and IMPCO
Technologies, Inc., as lessee, dated August 18, 1997.                                                          |  | (10      | )
|           
|10.10       |  | Amendment dated March 18, 1998 to Loan agreement dated October 7, 1998 between Bank
of America National Trust and Savings, as lender, and IMPCO Technologies, Inc., as the borrower.             |  | (10      | )
|           
|10.11       |  | Amendment dated April 29, 1998 to Loan agreement dated October 7, 1998 between Bank
of America National Trust and Savings, as lender, and IMPCO Technologies, Inc., as the borrower.             |  | (10      | )
|           
|10.12       |  | Loan Agreement for IMPCO Technologies, B.V. as borrower, and Bank of America
National Trust and Savings Association, acting through its Amsterdam branch, as lender, dated as of April 27, 1998. |  | (10      | )
|           
|10.13       |  | Loan Agreement dated September 11, 1998 between Bank of America National Trust and
Savings Association, as lender, and IMPCO Technologies, Inc., as the borrower.                                |  | (11      | )
|           
|10.14       |  | Intentionally Omitted.                                                                                                                                                                           |  |          |  
|           
|10.15       |  | Loan Agreement between IMPCO Tech Japan KK, as borrower, and, Hongkong and Shanghai
Banking Corporation Ltd., Osaka Branch., as lender, dated as of March 29, 1999.                              |  | (13      | )
|           
|10.16+      |  | Employment Agreement dated April 1, 1999, between IMPCO Technologies, Inc., as the
Company, and Robert M. Stemmler, as the Employee.                                                             |  | (13      | )



31



---

|Exhibit No. |  | Description                                                                                                                                                               |  | Note No. |  
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------- | -
|10.17       |  | Amended Loan Agreement between IMPCO Technologies, Inc., as borrower and Bank of
America N.A. as lender, dated September 13, 1999.                                        |  | (14      | )
|           
|10.18       |  | Intentionally Omitted.                                                                                                                                                    |  |          |  
|           
|10.19       |  | Amendment No. 3 to Business Loan Agreement by and between Bank of America, N.A. and
IMPCO Technologies, Inc. dated as of June 13, 2000.                                   |  | (15      | )
|           
|10.20       |  | Lease dated as of March 31, 2000, by and between Braden Court Associates and IMPCO
Technologies, Inc.                                                                     |  | (16      | )
|           
|10.21       |  | Amendment No. 4 to Business Loan Agreement by and between Bank of America, N.A. and
IMPCO Technologies, Inc. dated as of September 12, 2000.                              |  | (18      | )
|           
|10.22       |  | Amendment No. 5 to Business Loan Agreement between Bank of America, N.A. and IMPCO
Technologies, Inc. dated as of December 13, 2000.                                      |  | (18      | )
|           
|10.23       |  | Amendment No. 6 to Business Loan Agreement between Bank of America, N.A. and IMPCO
Technologies, Inc. dated as of March 12, 2001.                                         |  | (19      | )
|           
|10.24       |  | Promissory Note Issued by Robert Stemmler to Registrant dated March 15,
2001.                                                                                             |  | (17      | )
|           
|10.25       |  | Promissory Note Issued by Dale Rasmussen to Registrant dated March 15,
2001.                                                                                              |  | (17      | )
|           
|10.26       |  | Promissory Note Issued by Syed Hussain to Registrant dated March 15,
2001.                                                                                                |  | (17      | )
|           
|10.27       |  | Security Agreement and Agreement Not to Exercise Options entered into between Robert
Stemmler and Registrant dated March 15, 2001.                                        |  | (17      | )
|           
|10.28       |  | Security Agreement and Agreement Not to Exercise Options entered into between Dale
Rasmussen and Registrant dated March 15, 2001.                                         |  | (17      | )
|           
|10.29       |  | Security Agreement and Agreement Not to Exercise Options entered into between Syed
Hussain and Registrant dated March 15, 2001.                                           |  | (17      | )
|           
|10.30       |  | Deed of Trust Executed by Dale Rasmussen regarding personal
residence.                                                                                                    |  | (17      | )
|           
|10.31      |  | Corporate Alliance Agreement dated June 12, 2001 between Quantum Technologies
Worldwide, Inc. and General Motors Corporation.                                             |  | (21      | )
|           
|10.32       |  | Master Technical Agreement dated June 12, 2001 between Quantum Technologies
Worldwide, Inc. and General Motors Corporation.                                               |  | (21      | )
|           
|10.33       |  | Stock Transfer Agreement dated June 12, 2001 between Quantum Technologies Worldwide,
Inc. and General Motors Corporation.                                                 |  | (21      | )
|           
|10.34       |  | Registration Rights Agreement dated June 12, 2001 between Quantum Technologies
Worldwide, Inc. and General Motors Corporation.                                            |  | (21      | )
|           
|10.35       |  | Amended and Restated Business Loan Agreement dated as of April 30, 2001 among the
Registrant, Quantum Technologies, Inc. and Bank of America, N.A.                        |  | (28      | )
|           
|10.36+      |  | 2000 Incentive Stock Option Plan.                                                                                                                                         |  | (20      | )
|           
|10.37       |  | IMPCO and GM Teaming Agreement dated July 30, 1997 by the Registrant and General
Motors Corporation.                                                                      |  | (22      | )
|           
|10.38       |  | Amendment No. 1 to Amended and Related Business Loan Agreement, dated as of
September 5, 2001, among Bank of America, N.A., the Registrant and Quantum Technologies, Inc. |  | (23      | )
|           
|10.39       |  | Amendment No. 2 to Amended and Restated Business Loan Agreement, dated as of October
8, 2001, among Bank of America, N.A., the Registrant and Quantum Technologies, Inc.  |  | (24      | )



32



---

|Exhibit No. |  | Description                                                                                                                                                                                       |  | Note No. |  
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------- | -
|10.40       |  | Amendment No. 3 to Amended and Restated Business Loan Agreement, dated as of
November 9, 2001, among Bank of America, N.A., the Registrant and Quantum Technologies, Inc.                         |  | (24      | )
|           
|10.41       |  | Amendment No. 4 to Amended and Restated Business Loan Agreement, dated as of
December 12, 2001, among Bank of America, N.A., the Registrant and Quantum Technologies, Inc.                        |  | (24      | )
|           
|10.42       |  | Common Stock and Warrants Purchase Agreement, dated January 11,
2002.                                                                                                                             |  | (25      | )
|           
|10.43       |  | Registration Rights Agreement, Dated January 11, 2002.                                                                                                                                            |  | (25      | )
|           
|10.44       |  | Form of Stock Purchase Warrant, Dated January 11, 2002.                                                                                                                                           |  | (25      | )
|           
|10.45       |  | Amendment No. 5 to Amended and Restated Business Loan Agreement, dated as of
January, 2002, among Bank of America, N.A., the Registrant and Quantum Technologies, Inc.                            |  | (26      | )
|           
|10.46       |  | Amendment No. 6 to Amended and Restated Business Loan Agreement, dated as of
January 31, 2002, among Bank of America, N.A., the Registrant and Quantum Technologies, Inc.                         |  | (26      | )
|           
|10.47       |  | Amendment No. 7 to Amended and Restated Business Loan Agreement, dated as of
February 28, 2002, among Bank of America, N.A., the Registrant and Quantum Fuel Systems Technologies Worldwide, Inc. |  | (26      | )
|           
|10.48       |  | Stock Purchase Agreement, dated May 3, 2002.                                                                                                                                                      |  | (27      | )
|           
|10.49       |  | Amendment No. 8 to Amended and Restated Business Loan Agreement, dated as of
March 31, 2002, among Bank of America, N.A., the Registrant and Quantum Fuel Systems Technologies Worldwide, Inc.    |  | (1       | )
|           
|10.50       |  | Amendment No. 9 to Amended and Restated Business Loan Agreement, dated as of
April 30, 2002, among Bank of America, N.A., the Registrant and Quantum Fuel Systems Technologies Worldwide, Inc.    |  | (1       | )
|           
|10.51       |  | Second Amended and Restated Business Loan Agreement, dated June 24, 2002, between
Bank of America, N.A., and the Registrant.                                                                      |  | (1       | )
|           
|10.52       |  | Employment Agreement dated April 1, 2002, between the Registrant and Robert M.
Stemmler.                                                                                                          |  | (1       | )
|           
|10.53       |  | Employment Agreement dated April 1, 2002, between the Registrant and W. Brian
Olson.                                                                                                              |  | (1       | )
|           
|10.54       |  | Employment Agreement dated April 1, 2002, between the Registrant and Dale L.
Rasmussen.                                                                                                           |  | (1       | )
|           
|10.55       |  | Contribution and Distribution Agreement between the Registrant and Quantum Fuel
Systems Technologies Worldwide, Inc., dated July 23, 2002.                                                        |  | (29      | )
|           
|10.56       |  | Tax Allocation and Indemnification Agreement between the Registrant and Quantum Fuel
Systems Technologies Worldwide Inc., dated July 23, 2002.                                                    |  | (29      | )
|           
|10.57       |  | Transition Services Agreement between the Registrant and Quantum Fuel Systems
Technologies Worldwide, Inc., dated July 23, 2002.                                                                  |  | (29      | )
|           
|10.58       |  | Employee Benefit Matters Agreement between the Registrant and Quantum Fuel Systems
Technologies Worldwide, Inc., dated July 23, 2002.                                                             |  | (29      | )
|           
|10.59       |  | Lease dated July 18, 2001 by and between Property Reserve, Inc. and the
Registrant.                                                                                                               |  | (1       | )



33



---

|Exhibit No. |  | Description                                                                  |  | Note No. |  
|----------- |  | ---------------------------------------------------------------------------- |  | -------- | -
|21.1        |  | Subsidiaries of the Company.                                                 |  | (1       | )
|           
|23.1        |  | Consent of Ernst & Young LLP.                                                |  | (1       | )
|           
|99.1        |  | Certification of Chief Executive Officer pursuant to 18 U.S.C.
§1350.        |  | (1       | )
|           
|99.2        |  | Certification of Acting Chief Financial Officer pursuant to 18 U.S.C.
§1350. |  | (1       | )

---

|(1) |  | Filed herewith.
|--- |  | ---------------

|(2) |  | Intentionally omitted.
|--- |  | ----------------------

|(3) |  | Incorporated by reference to the Registrants Form 10-K for fiscal year 1989.
|--- |  | -----------------------------------------------------------------------------

|(4) |  | Incorporated by reference to the Registrants Form 10-K for fiscal year 1990.
|--- |  | -----------------------------------------------------------------------------

|(5) |  | Incorporated by reference to the Registrants Form 10-K for fiscal year 1992.
|--- |  | -----------------------------------------------------------------------------

|(6) |  | Incorporated by reference to the Registrants Form 10-K for fiscal year 1993.
|--- |  | -----------------------------------------------------------------------------

|(7) |  | Incorporated by reference to the Registrants Form 10-K for fiscal year 1994.
|--- |  | -----------------------------------------------------------------------------

|(8) |  | Incorporated by reference to the Registrants Form 8-K/A dated July 1, 1996.
|--- |  | ----------------------------------------------------------------------------

|(9) |  | Incorporated by reference to the Registrants Form 10-K for fiscal year 1997.
|--- |  | -----------------------------------------------------------------------------

|(10) |  | Incorporated by reference to the Registrants Proxy Statement for fiscal year 1997.
|---- |  | -----------------------------------------------------------------------------------

|(11) |  | Incorporated by reference to the Registrants Form 10-K for fiscal year 1998.
|---- |  | -----------------------------------------------------------------------------

|(12) |  | Incorporated by reference to the Registrants Form 10-Q for the period ended October 31, 1998.
|---- |  | ----------------------------------------------------------------------------------------------

|(13) |  | Incorporated by reference to the Registrants Form 8-K dated June 30, 1999.
|---- |  | ---------------------------------------------------------------------------

|(14) |  | Incorporated by reference to the Registrants Form 10-K for fiscal year 1999.
|---- |  | -----------------------------------------------------------------------------

|(15) |  | Incorporated by reference to the Registrants Form 10-Q for the period ended December 7, 1999.
|---- |  | ----------------------------------------------------------------------------------------------

|(16) |  | Incorporated by reference to the Registrants Form S-3/A (File No. 333-34366), filed with the Commission on June 14, 2000.
|---- |  | --------------------------------------------------------------------------------------------------------------------------

|(17) |  | Incorporated by reference to the Registrants Form 10-K for fiscal year 2000.
|---- |  | -----------------------------------------------------------------------------

|(18) |  | Incorporated by reference to the Registrants Form 8-K dated March 26, 2001.
|---- |  | ----------------------------------------------------------------------------

|(19) |  | Incorporated by reference to the Registrants Form 10-Q for the period ended October 31, 2000.
|---- |  | ----------------------------------------------------------------------------------------------

|(20) |  | Incorporated by reference to the Registrants Form 10-Q for the period ended January 31, 2001.
|---- |  | ----------------------------------------------------------------------------------------------

|(21) |  | Incorporated by reference to the Registrants Proxy Statement for fiscal year 2000.
|---- |  | -----------------------------------------------------------------------------------

|(22) |  | Incorporated by reference to the Registrants Form S-3/A (File No. 333-63726), filed with the Commission on July 9, 2001.
|---- |  | -------------------------------------------------------------------------------------------------------------------------

|(23) |  | Incorporated by reference to the Registrants Form S-3 (File No. 333-34366), filed with the Commission on April 7, 2000.
|---- |  | ------------------------------------------------------------------------------------------------------------------------

|(24) |  | Incorporated by reference to the Registrants Form 10-Q for the period ended July 31, 2001.
|---- |  | -------------------------------------------------------------------------------------------

|(25) |  | Incorporated by reference to the Registrants Form 10-Q for the period ended October 31, 2001.
|---- |  | ----------------------------------------------------------------------------------------------

|(26) |  | Incorporated by reference to the Registrants Form 8-K filed on January 11, 2002.
|---- |  | ---------------------------------------------------------------------------------

|(27) |  | Incorporated by reference to the Registrants Form 10-Q for the period ended January 31, 2001.
|---- |  | ----------------------------------------------------------------------------------------------

|(28) |  | Incorporated by reference to the Registrants Form 8-K filed on May 10, 2002.
|---- |  | -----------------------------------------------------------------------------

|(29) |  | Incorporated by reference to the Registrants Form 10-K for fiscal year 2001.
|---- |  | -----------------------------------------------------------------------------

|(30) |  | Incorporated by reference to the Form 10-K filed by Quantum Fuel Systems Technologies, Inc., for fiscal year 2002.
|---- |  | ------------------------------------------------------------------------------------------------------------------

|+ |  | Management contract or compensatory plan or arrangement.
|- |  | --------------------------------------------------------

| |  | Certain information in this exhibit has been omitted and filed separately with The Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



34



---



(b)    Reports on Form 8-K:



| | (1) |  | The Company filed a report on Form 8-K on January 11, 2002 during the third quarter ended January 31, 2002. Information regarding the items reported on is as
follows:
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



Item Reported on



| |  |  | Common Stock and Warrants Purchase Agreement, dated January 11, 2002.
| | - |  | ---------------------------------------------------------------------



| |  |  | Registration Rights Agreement, dated January 11, 2002.
| | - |  | ------------------------------------------------------



| |  |  | Form of Stock Purchase Warrant, dated January 11, 2002.
| | - |  | -------------------------------------------------------



| | (2) |  | The Company filed a report on Form 8-K on May 10, 2002 during the fourth quarter ended April 31, 2002. Information regarding the items reported on is as follows:
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------



Item Reported on



| |  |  | Stock Purchase Agreement, dated May 3, 2002.
| | - |  | --------------------------------------------



| | (3) |  | The Company filed a report on Form 8-K on June 20, 2002 during the first quarter ended July 31, 2002. Information regarding the items reported on is as follows:
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



Item Reported on



| |  |  | Special dividend to IMPCO stockholders, effective after the close of business on July 23, 2002, to distribute all of the shares of Quantum owned by IMPCO to
IMPCOs stockholders of record on July 5, 2002.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



35



---

IMPCO TECHNOLOGIES, INC.



INDEX TO FINANCIAL STATEMENTS



|                                                                         |  | Page
|------------------------------------------------------------------------ |  | ----
|CONSOLIDATED FINANCIAL STATEMENTS                                        |  |     
|                                                                        
|Report of Independent Auditors                                           |  | F-2 
|                                                                        
|Consolidated Balance Sheets                                              |  | F-3 
|                                                                        
|Consolidated Statements of Operations                                    |  | F-4 
|                                                                        
|Consolidated Statements of Stockholders Equity                          |  | F-5 
|                                                                        
|Consolidated Statements of Cash Flows                                    |  | F-6 
|                                                                        
|Notes to Consolidated Financial Statements                               |  | F-7 
|                                                                        
|UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS          |  |     
|                                                                        
|Unaudited Pro Forma Condensed Consolidated Financial Statements          |  | F-22
|                                                                        
|Unaudited Pro Forma Condensed Consolidated Balance Sheet                 |  | F-23
|                                                                        
|Unaudited Pro Forma Condensed Consolidated Statement of Operations       |  | F-24
|                                                                        
|Notes to Unaudited Pro Forma Condensed Consolidated Financial
Statements |  | F-25





F-1



---

REPORT OF INDEPENDENT AUDITORS



The Board of Directors and Stockholders

IMPCO Technologies, Inc.



We have audited the accompanying consolidated balance sheets of IMPCO Technologies, Inc. and subsidiaries as
of April 30, 2001 and 2002, and the related consolidated statements of operations, shareholders equity, and cash flows for each of the three years in the period ended April 30, 2002. Our audits also included the financial statement schedule
listed in the Index at Item 14(a). These financial statements and schedule are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.



We conducted our audits in accordance with
auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.



In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position
of IMPCO Technologies, Inc. and subsidiaries at April 30, 2001 and 2002, and the consolidated results of their operations and their cash flows for each of the three years in the period ended April 30, 2002, in conformity with accounting principles
generally accepted in the United States. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set
forth herein.



/s/    ERNST & YOUNG LLP



Long Beach, California

July 18, except for

the 3rd paragraph of Note 1 and Note 13

as to
which the date is July 23, 2002



F-2



---

IMPCO TECHNOLOGIES, INC.



CONSOLIDATED BALANCE SHEETS



|                                                                                                                                                                       |  | April 30, 2001 |             |   | April 30, 2002 |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ----------- | - | -------------- | -
|ASSETS                                                                                                                                                                 |  |                |             |   |                |  
|Current assets:                                                                                                                                                        |  |                |             |   |                |  
|Cash and cash equivalents                                                                                                                                              |  | $              | 16,591,415  |   |                | $
|Restricted cash                                                                                                                                                        |  |                |            |   |                |  
|Accounts receivable                                                                                                                                                    |  |                | 25,486,324  |   |                |  
|Less allowance for doubtful accounts                                                                                                                                   |  |                | 1,021,353   |   |                |  
|                                                                                                                                                                       |  |                |             |   |                |  
|Net accounts receivable                                                                                                                                                |  |                | 24,464,971  |   |                |  
|Inventories:                                                                                                                                                           |  |                |             |   |                |  
|Raw materials and parts                                                                                                                                                |  |                | 20,675,003  |   |                |  
|Work-in-process                                                                                                                                                        |  |                | 740,972     |   |                |  
|Finished goods                                                                                                                                                         |  |                | 9,935,020   |   |                |  
|                                                                                                                                                                       |  |                |             |   |                |  
|Total inventories                                                                                                                                                      |  |                | 31,350,995  |   |                |  
|Deferred tax assets                                                                                                                                                    |  |                | 2,168,679   |   |                |  
|Other current assets                                                                                                                                                   |  |                | 5,060,028   |   |                |  
|                                                                                                                                                                       |  |                |             |   |                |  
|Total current assets                                                                                                                                                   |  |                | 79,636,088  |   |                |  
|Equipment and leasehold improvements:                                                                                                                                  |  |                |             |   |                |  
|Dies, molds and patterns                                                                                                                                               |  |                | 7,140,156   |   |                |  
|Machinery and equipment                                                                                                                                                |  |                | 12,388,246  |   |                |  
|Office furnishings and equipment                                                                                                                                       |  |                | 14,207,561  |   |                |  
|Automobiles and trucks                                                                                                                                                 |  |                | 528,917     |   |                |  
|Leasehold improvements                                                                                                                                                 |  |                | 4,478,685   |   |                |  
|                                                                                                                                                                       |  |                |             |   |                |  
|                                                                                                                                                                       |  |                | 38,743,565  |   |                |  
|Less accumulated depreciation and amortization                                                                                                                         |  |                | 18,690,053  |   |                |  
|                                                                                                                                                                       |  |                |             |   |                |  
|Net equipment and leasehold improvements                                                                                                                               |  |                | 20,053,512  |   |                |  
|Intangibles arising from acquisitions                                                                                                                                  |  |                | 15,413,476  |   |                |  
|Less accumulated amortization                                                                                                                                          |  |                | 5,878,482   |   |                |  
|                                                                                                                                                                       |  |                |             |   |                |  
|Net intangibles arising from acquisitions                                                                                                                              |  |                | 9,534,994   |   |                |  
|Deferred tax assets                                                                                                                                                    |  |                | 10,601,227  |   |                |  
|Other assets                                                                                                                                                           |  |                | 936,843     |   |                |  
|                                                                                                                                                                       |  |                |             |   |                |  
|                                                                                                                                                                       |  | $              | 120,762,664 |   |                | $
|                                                                                                                                                                       |  |                |             |   |                |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                   |  |                |             |   |                |  
|Current liabilities:                                                                                                                                                   |  |                |             |   |                |  
|Accounts payable                                                                                                                                                       |  | $              | 11,713,680  |   |                | $
|Accrued payroll obligations                                                                                                                                            |  |                | 3,881,500   |   |                |  
|Other accrued expenses                                                                                                                                                 |  |                | 2,735,528   |   |                |  
|Current lines of credit                                                                                                                                                |  |                | 6,078,205   |   |                |  
|Current maturities of long-term debt and capital leases                                                                                                                |  |                | 3,680,158   |   |                |  
|                                                                                                                                                                       |  |                |             |   |                |  
|Total current liabilities                                                                                                                                              |  |                | 28,089,071  |   |                |  
|Term loans                                                                                                                                                             |  |                | 6,870,693   |   |                |  
|Capital leases                                                                                                                                                         |  |                | 1,127,583   |   |                |  
|Minority interest                                                                                                                                                      |  |                | 2,044,122   |   |                |  
|Commitments and contingencies                                                                                                                                          |  |                |             |   |                |  
|Stockholders equity:                                                                                                                                                  |  |                |             |   |                |  
|Preferred stock, $.001 par value, authorized 500,000 shares; none issued and
outstanding at April 30, 2002 and 2001                                                    |  |                |            |   |                |  
|Common stock, $.001 par value, authorized 100,000,000 shares; 12,622,836 issued and
outstanding at April 30, 2002, 10,294,377 issued and outstanding at April 30, 2001 |  |                | 10,294      |   |                |  
|Additional paid-in capital relating to common stock                                                                                                                    |  |                | 102,831,566 |   |                |  
|Shares held in trust                                                                                                                                                   |  |                | (142,710    | ) |                |  
|Notes receivable from officers                                                                                                                                         |  |                | (3,913,854  | ) |                |  
|Retained earnings (accumulated deficit)                                                                                                                                |  |                | (12,434,966 | ) |                |  
|Accumulated other comprehensive income                                                                                                                                 |  |                | (3,719,135  | ) |                |  
|                                                                                                                                                                       |  |                |             |   |                |  
|Total stockholders equity                                                                                                                                             |  |                | 82,631,195  |   |                |  
|                                                                                                                                                                       |  |                |             |   |                |  
|                                                                                                                                                                       |  | $              | 120,762,664 |   |                | $
|                                                                                                                                                                       |  |                |             |   |                |  



See
accompanying notes to consolidated financial statements.



F-3



---

IMPCO TECHNOLOGIES, INC.



CONSOLIDATED STATEMENTS OF OPERATIONS



|                                                                                                          |  | Fiscal Year Ended April 30 |            
|--------------------------------------------------------------------------------------------------------- |  | -------------------------- | -----------
|                                                                                                          |  | 2000                       |            
|Revenue:                                                                                                  |  |                            |            
|Product sales                                                                                             |  | $                          | 103,417,448
|Contract revenue                                                                                          |  |                            | 9,398,305  
|                                                                                                          |  |                            |            
|Net revenue                                                                                               |  |                            | 112,815,753
|Costs and expenses:                                                                                       |  |                            |            
|Cost of product sales                                                                                     |  |                            | 69,798,833 
|Research and development expense                                                                          |  |                            | 15,576,475 
|Selling, general and administrative expense                                                               |  |                            | 21,343,333 
|                                                                                                          |  |                            |            
|Total costs and expenses                                                                                  |  |                            | 106,718,641
|Operating income (loss)                                                                                   |  |                            | 6,097,112  
|Interest expense                                                                                          |  |                            | 1,523,648  
|Interest income                                                                                           |  |                            | (81,504    
|                                                                                                          |  |                            |            
|Income (loss) before income taxes, minority interest in income of consolidated
subsidiaries and dividends |  |                            | 4,654,968  
|Income tax expense (benefit)                                                                              |  |                            | 1,126,239  
|Minority interest in income of consolidated subsidiaries                                                  |  |                            | 463,233    
|                                                                                                          |  |                            |            
|Net income (loss) applicable to common stock                                                              |  | $                          | 3,065,496  
|                                                                                                          |  |                            |            
|Net income (loss) per share:                                                                              |  |                            |            
|Basic                                                                                                     |  | $                          | 0.36       
|                                                                                                          |  |                            |            
|Diluted                                                                                                   |  | $                          | 0.33       
|                                                                                                          |  |                            |            
|Number of shares used in per share calculation:                                                           |  |                            |            
|Basic                                                                                                     |  |                            | 8,489,229  
|                                                                                                          |  |                            |            
|Diluted                                                                                                   |  |                            | 9,232,299  
|                                                                                                          |  |                            |            



See
accompanying notes to consolidated financial statements.



F-4



---



IMPCO
TECHNOLOGIES, INC.



CONSOLIDATED
STATEMENTS OF STOCKHOLDERS EQUITY



|                                                                                                                          |  | Fiscal Year Ended April 30 |           
|------------------------------------------------------------------------------------------------------------------------- |  | -------------------------- | ----------
|                                                                                                                          |  | 2000                       |           
|Common Stock:                                                                                                             |  |                            |           
|Beginning balance                                                                                                         |  |                            | 8,408     
|Issuance of common stock (163,326, 97,572, and 328,459 shares, respectively) resulting
from the exercise of stock options |  |                            | 164       
|Issuance of common stock (0, 1,625,000, 2,000,000 shares, respectively) resulting from
equity offering                    |  |                            |          
|                                                                                                                          |  |                            |           
|Ending balance                                                                                                            |  |                            | 8,572     
|Additional paid-in capital relating to common stock:                                                                      |  |                            |           
|Beginning balance                                                                                                         |  |                            | 45,375,995
|Issuance of common stock resulting from the exercise of stock options                                                     |  |                            | 1,173,088 
|Issuance of common stock resulting from equity offering                                                                   |  |                            |          
|Reduction in current tax liability related to stock options                                                               |  |                            | 989,954   
|Other                                                                                                                     |  |                            |          
|                                                                                                                          |  |                            |           
|Ending balance                                                                                                            |  |                            | 47,539,037
|Shares held in trust for deferred compensation plan, at cost (2,878, 4,137 and 15,870
shares, respectively)               |  |                            | (110,320  
|Notes receivable from officers                                                                                            |  |                            |          
|Retained earnings (accumulated deficit)                                                                                   |  |                            |           
|Beginning balance                                                                                                         |  |                            | (2,397,813
|Net income (loss) income applicable to common stock                                                                       |  |                            | 3,065,496 
|                                                                                                                          |  |                            |           
|Ending balance                                                                                                            |  |                            | 667,683   
|Accumulated other comprehensive income:                                                                                   |  |                            |           
|Beginning balance                                                                                                         |  |                            | (1,468,525
|Foreign currency translation adjustment                                                                                   |  |                            | (1,257,104
|Unrealized loss on derivative instrument                                                                                  |  |                            |          
|                                                                                                                          |  |                            |           
|Ending balance                                                                                                            |  |                            | (2,725,629
|                                                                                                                          |  |                            |           
|Total stockholders equity                                                                                                |  | $                          | 45,379,343
|                                                                                                                          |  |                            |           
|Comprehensive Income:                                                                                                     |  |                            |           
|Net income (loss)                                                                                                         |  | $                          | 3,065,496 
|Foreign currency translation adjustment                                                                                   |  |                            | (1,257,104
|Unrealized loss on derivative instrument                                                                                  |  |                            |          
|                                                                                                                          |  |                            |           
|Comprehensive income (loss)                                                                                               |  | $                          | 1,808,392 
|                                                                                                                          |  |                            |           



See
accompanying notes to consolidated financial statements.



F-5



---



IMPCO
TECHNOLOGIES, INC.



CONSOLIDATED
STATEMENTS OF CASH FLOWS



|                                                                                            |  | Year Ended April 30 |            
|------------------------------------------------------------------------------------------- |  | ------------------- | -----------
|                                                                                            |  | 2000                |            
|Cash flows from operating activities:                                                       |  |                     |            
|Net income (loss)                                                                           |  | $                   | 3,065,496  
|Adjustments to reconcile net income to net cash provided by (used in) operating
activities: |  |                     |            
|Amortization of intangibles arising from acquisition                                        |  |                     | 736,937    
|Depreciation and other amortization                                                         |  |                     | 3,047,342  
|(Gain) loss on disposal of assets                                                           |  |                     | (74,343    
|Gain from sale of available-for-sale securities                                             |  |                     |           
|Deferred income taxes                                                                       |  |                     | (846,882   
|(Increase) decrease in accounts receivable                                                  |  |                     | (9,452,278 
|(Increase) decrease in inventories                                                          |  |                     | (11,195,075
|Increase (decrease) in accounts payable                                                     |  |                     | 5,862,387  
|Increase in accrued expenses                                                                |  |                     | 2,377,404  
|Minority interests in income of consolidated subsidiaries                                   |  |                     | 463,233    
|Other, net                                                                                  |  |                     | (624,158   
|                                                                                            |  |                     |            
|Net cash used in operating activities                                                       |  |                     | (6,639,937 
|                                                                                           
|Cash flows from investing activities:                                                       |  |                     |            
|Purchases of equipment and leasehold improvements                                           |  |                     | (3,682,595 
|Purchases of businesses                                                                     |  |                     | (410,927   
|Proceeds from sales of equipment                                                            |  |                     | 102,802    
|Purchase of available-for-sale securities                                                   |  |                     |           
|Sale of available-for-sale securities                                                       |  |                     |           
|                                                                                            |  |                     |            
|Net cash used in investing activities                                                       |  |                     | (3,990,720 
|                                                                                           
|Cash flows from financing activities:                                                       |  |                     |            
|Increase (decrease) in borrowings under lines of credit                                     |  |                     | 14,264,949 
|Payments on term loans                                                                      |  |                     | (2,733,967 
|Proceeds from issuance of bank term loans                                                   |  |                     |           
|Payments of capital lease obligation                                                        |  |                     | (769,395   
|Proceeds from issuance of common stock                                                      |  |                     | 1,131,878  
|Increase (decrease) on notes receivable from officers                                       |  |                     |           
|Increase in restricted cash                                                                 |  |                     |           
|                                                                                            |  |                     |            
|Net cash provided by financing activities                                                   |  |                     | 11,893,465 
|Translation adjustment                                                                      |  |                     | (259,780   
|Net increase (decrease) in cash and cash equivalents                                        |  |                     | 1,003,028  
|Cash at beginning of period                                                                 |  |                     | 2,009,208  
|                                                                                            |  |                     |            
|Cash and cash equivalents at end of period                                                  |  | $                   | 3,012,236  
|                                                                                            |  |                     |            



See
accompanying notes to consolidated financial statements.



F-6



---



NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS



1.    Summary of Significant Accounting Policies



(a)Basis of presentation and description of the businessThe consolidated financial statements of IMPCO Technologies, Inc. (IMPCO or the
Company) include the accounts of the Company and its majority owned subsidiary IMPCO-BERU Technologies B.V. (IMPCO BV), its majority owned subsidiary Grupo I.M.P.C.O. Mexicano, S. de R.L. de C.V. (IMPCO Mexicano)
and its wholly owned subsidiaries IMPCO Technologies, Pty. Limited (IMPCO Pty), IMPCO Tech Japan K.K. (IMPCO Japan), Quantum Technologies Worldwide, Inc. (Quantum), and its joint ventures Minda IMPCO Technologies
Limited, and Minda IMPCO Limited. All significant intercompany accounts and transactions have been eliminated in consolidation.



The Company is a designer, manufacturer and supplier of components and systems that store gaseous fuels and monitor and control the
pressure and flow of those fuels for use in fuel cells and internal combustion engines.



On July 23, 2002, the Company completed the distribution and spin-off of its Quantum subsidiary by distributing one share of Quantum common stock for every share of IMPCO common stock held on the
record date, which was July 5, 2002. As a result of the spin-off, the Company no longer holds any continuing interest in Quantum and will report Quantum as a discontinued operation in fiscal year 2003.



(b)    Cash and Cash
EquivalentsThe Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Restricted cash, which is separately presented, represents deposits held as collateral under
existing debt arrangements.



(c)InventoriesInventories are valued at the lower of cost or market. Cost is determined by the first-in, first-out (FIFO) method while market is determined by replacement cost for raw materials
and parts and net realizable value for work-in-process and finished goods.



(d)Equipment and leasehold improvementsEquipment and leasehold improvements are stated on the basis of historical cost. Depreciation of equipment is provided using
the straight-line method over the assets estimated useful lives, ranging from three to seven years. Amortization of leasehold improvements and equipment under capital leases is provided using the straight-line method over the shorter of the
assets estimated useful lives or the lease terms.



(e)Intangibles arising from acquisitionsIntangibles arising from acquisitions, primarily goodwill, are recorded based on the excess of the cost of the acquisition over amounts assigned to tangible
assets and liabilities. Intangible assets arising from acquisitions are amortized using the straight-line method over their estimated lives of twenty years.



(f)Warranty costsEstimated future warranty obligations related to certain products are provided by
charges to operations in the period in which the related revenue is recognized. Estimates are based, in part, on historical experience.



(g)Research and development costsResearch and development costs are charged to expense as incurred.
Equipment used in research and development with alternative future uses is capitalized.



(h)Revenue recognitionRevenue is recognized on product sales when title is transferred, ordinarily when goods are shipped in accordance with the Companys
shipping terms, and collectibility is reasonably assured. Contract revenue for customer-funded research and development is principally recognized by the percentage of completion method. Amounts expected to be realized on contracts are based on the
Companys estimates of total contract value and costs at completion. These estimates are reviewed and revised periodically throughout the lives of the contracts.



F-7



---



The Company
routinely sells products to a broad base of domestic and international customers, which includes distributors and original equipment manufacturers. Based on the nature of these customers, credit is generally granted without collateral being
required. The Company does not anticipate that a significant credit risk exists as a result of these customer relationships.



Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements, or SAB 101 summarizes certain of the Security
and Exchange Commission Staffs views in applying generally accepted accounting principles to revenue recognition in financial statements. The Company evaluated the effect of SAB 101, which did not result in any material change to its
revenue recognition policies. Also, in accordance with Emerging Issues Task Force No. 00-10, the Company includes the costs of shipping and handling, when incurred, in cost of goods sold.



(i)Minority interests in subsidiariesThe balance sheet amounts in
minority interest at April 30, 2002 represent 49% of the equity held by the single minority stockholder in IMPCO BV, 10% of the equity held by the single minority stockholder in IMPCO Mexicano and 49% of the equity held by a single minority
stockholder in IMPCO Fuel Systems, a subsidiary of IMPCO Pty, 40% of the equity held by a joint venture partner in Minda Impco Technologies, Ltd., . Minority interest represents the minority stockholders proportionate share of equity in those
subsidiaries.



(j)Net
income per shareBasic income per share is computed by dividing net income applicable to common stock by the weighted average shares of common stock outstanding during the period. Diluted earnings per share is computed based on the weighted
average number of shares of common stock outstanding, and if dilutive, all common stock equivalents.



(k)Stock based compensationIn October 1995, the Financial Accounting Standards Board issued SFAS No.
123 Accounting of Stock Based Compensation, which established accounting and reporting standards for stock based employee compensation plans effective after fiscal year 1996. SFAS 123 encourages entities to adopt the fair value based
method of accounting; however, it also allows an entity to continue to measure compensation cost using the intrinsic value based method prescribed by Accounting Principles Board No. 25. Entities electing to remain on the intrinsic value
based method must make certain pro forma disclosures as if the new fair value method had been applied. At this time, the Company has not adopted the recognition provision of SFAS 123, but has provided pro forma disclosures (see note 6).



The Financial Accounting Standards Board has
also issued Interpretation No. 44, Accounting for Certain Transactions Involving Stock Compensation. The Interpretation addresses implementation practice issues in accounting for compensation costs under existing rules prescribed by
Accounting Principles Board No. 25. The new rules are applied prospectively to all new awards, modifications to outstanding awards and changes in grantee status after July 1, 2000, with certain exceptions. The Company considers the impact of these
rules when adopting new stock option plans and when granting any options.



(l)Impairment of long-lived assets and long-lived assets to be disposed ofImpairment losses are recorded on long-lived assets used in operations when an indicator of impairment
(significant decrease in market value of an asset, significant change in extent or manner in which the asset is used or significant physical change to the asset) is present and the undiscounted cash flows estimated to be generated by those assets
are less than the assets carrying amount. The Company has not experienced any significant changes in the business climate or in the use of assets that would require the Company to write down the value of the assets recorded in the balance
sheet.



(m)Use of
estimatesThe preparation of financial statements in conformity with accounting principles generally accepted in the United States requires that management make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.



F-8



---



(n)ReclassificationsCertain prior year amounts have been reclassified to conform to current presentations.



(o)Foreign currency translationAssets and liabilities of the Companys foreign subsidiaries are
generally translated at current exchange rates, and related revenues and expenses are translated at average exchange rates in effect during the period. Resulting translation adjustments are recorded as a foreign currency component of other
comprehensive income in stockholders equity. The results and financial condition of the Companys international operations are affected by changes in exchange rates between certain foreign currencies and the U.S. Dollar. The functional
currency for all of the Companys international subsidiaries is the local currency of the subsidiary. An increase in the value of the U.S. Dollar increases costs incurred by the subsidiaries because most of its international subsidiaries
inventory purchases are U.S. Dollar denominated. The Company seeks to manage its foreign currency economic risk by minimizing its U.S. Dollar investment in foreign operations using foreign currency term loans and lines of credit to finance the
operations of its foreign subsidiaries.



Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency, except those transactions that operate as a hedge of an identifiable foreign
currency commitment, are included in the results of operations as incurred.



(p)Financial instrumentsAt April 30, 2002, the Companys financial instruments recorded on the balance sheet include cash equivalents, capital lease
obligations, short-term bank debt and long-term bank debt. Because of the short maturity, short-term bank debt approximates fair value. The fair value of the Companys long-term debt and capital lease obligations is estimated using discounted
cash flows based on the Companys incremental borrowing rates for similar types of borrowings. At April 30, 2002, the fair value of the Companys long-term debt and capital lease obligations approximated carrying value.



The Company periodically enters into foreign currency forward
contracts and interest rate swap agreements. When the Company enters into foreign currency forward contracts, it does so to hedge identifiable foreign currency commitments. Foreign currency contracts reduce the Companys exposure to unfavorable
fluctuations in foreign currencies versus the U.S. dollar. Realized gains and losses on these contracts are included in the measurement of the related foreign currency transaction. The Company, from time to time, uses interest rate swap agreements
to manage interest rate risk on its floating rate debt portfolio. Each interest rate swap is matched as a hedge against a specific debt instrument and has the same notional amount and tenor as the related debt instrument principle.



The Financial Accounting Standards Board has issued SFAS 133,
Accounting for Derivative Instruments and for Hedging Activities, as amended by SFAS No. 138 Accounting for Certain Derivative Instruments and Certain Hedging Activities-An Amendment of FASB 133, which require the Company to
recognize all derivatives on the balance sheet at fair market value. Derivatives that are not designated as hedges must be adjusted to fair value though income. If the derivative is a hedge, depending on the nature of the hedge, changes in the fair
value of derivatives will either be offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the hedged item in recognized in earnings. The
ineffective portion of a derivatives change in fair value will be immediately recognized in earnings.



It is the Companys policy to enter into interest rate swap contracts only to the extent necessary to reduce exposure to fluctuations
in interest rates. The Company does not enter into interest rate swap contracts for speculative purposes. In the unlikely event that a counter party to a swap agreement fails to meet the terms of an interest rate swap contract, the Companys
exposure is limited to the interest rate differential on the notional amount. The Company does not anticipate non-performance by the counter party. At April 30, 2002, the Company has entered into one interest rate swap contract, which matures on
September 30, 2004. See Note 3.



F-9



---



(q)    Future accounting requirementsIn August 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets (FAS 144), which addresses financial accounting and reporting for the impairment or disposal of long-lived assets and supersedes SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed Of, and the accounting and reporting provisions of APB Opinion No. 30, Reporting the Results of Operations for a disposal of a segment of a business. FAS 144 is effective for fiscal years beginning after December 15, 2001, with earlier
application encouraged. The Company expects to adopt FAS 144 as of May 1, 2002 and does not expect that the adoption of the Statement will have a significant impact on its financial position and results of operations, except that the Quantum
operations will be presented as a discontinued operation.



In June 2001, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards No. 141, Business Combinations, and No. 142, Goodwill and Other Intangible Assets, effective for
fiscal years beginning after December 15, 2001. Under the new rules, goodwill will no longer be amortized but will be subject to annual impairment tests in accordance with the Statements. Other intangible assets will continue to be amortized over
their useful lives.



The Company will apply the
new rules on accounting for goodwill and other intangible assets beginning in the first quarter of fiscal year 2003. Application of the nonamortization provisions of the Statement is expected to result in an increase in net income of approximately
$0.5 million ($.04 per share) per year. The Company will perform the first of the required impairment tests of goodwill and indefinite lived intangible assets as of May 1, 2002 and it has not yet determined what the effect, if any, these tests will
have on its earnings and financial position.



2.    Acquisitions



IMPCO Fuel Systems.    In March 2000, the Companys subsidiary, IMPCO Technologies, Pty Ltd, and LPM Corporation Pty Ltd, a corporation incorporated under the laws of the state of New South Wales,
Australia, established IMPCO Fuel Systems, a corporation incorporated under the laws of the state of New South Wales, Australia. IMPCO Technologies, Pty Ltd has a 51% ownership interest in IMPCO Fuel Systems and paid $300,000 in the purchase of
goodwill of LPMs gaseous fuel equipment business and $110,000 in certain assets, inventory and equipment of LPM. This acquisition was accounted for under the purchase method of accounting and has been included in the consolidated financial
statements since the date of acquisition.



3.    Debt Payable



The Companys debt payable is summarized as follows:



|                                                        |  | April 30 2001 |            | April 30 2002
|------------------------------------------------------- |  | ------------- | ---------- | -------------
|(a) Bank of America NT&SA                               |  |               |            |              
|Revolving line of credit                                |  | $             | 3,914,000  |              
|Mexican peso line of credit                             |  |               | 541,000    |              
|Term loan for acquisitions and capital expenditures     |  |               | 8,894,000  |              
|Capital lease and expenditure facilities                |  |               | 1,436,000  |              
|(b) Credit facilityFortis Bank (formerly Mees Pierson) |  |               | 1,461,000  |              
|(c) The Hong Kong and Shanghai Banking Corporation Ltd. |  |               |            |              
|Term loan for acquisition of Mikuni                     |  |               | 776,000    |              
|Line of credit                                          |  |               | 162,000    |              
|(d) Derivative instruments                              |  |               |           |              
|Other capital leases                                    |  |               | 572,000    |              
|                                                        |  |               |            |              
|                                                        |  |               | 17,756,000 |              
|Less current portion                                    |  |               | 9,758,000  |              
|                                                        |  |               |            |              
|                                                        |  | $             | 7,998,000  |              
|                                                        |  |               |            |              





F-10



---

(a) Bank of America NT&SA



Loan Covenants and
Collateral.    The Bank of America credit facility, as amended June 2002, contains certain restrictions, as well as limitations on other indebtedness, and is secured by substantially all of the Companys assets. In June
2002, the credit facility with Bank of America was amended to reduce the line of credit availability from $9.5 million to $8.0 million and extend the maturity date of the Companys line of credit and term loans to May 31, 2003. The assets
transferred to Quantum as part of the spin-off do not secure this loan. The Company was in compliance with loan covenants at April 30, 2002.



Including the revolving line of credit, the term loan, the capital expenditures facilities, and the capital lease facilities, the total
Bank of America NT&SA credit facility was approximately $18,172,000 at April 30, 2002. Details about each of the components of the Companys credit facility at April 30, 2002 follows.



Revolving Line of Credit.    The
$8.0 million revolving line of credit bears interest, payable monthly, at a fluctuating rate per annum equal to the Banks reference rate plus up to three-quarters of one percentage point, depending on certain financial ratios. Alternatively,
the Company may elect to have all or portions of the line based on an offshore rate, which may also vary depending on certain financial ratios. At April 30, 2002, the outstanding line of credit balance was $8,625,000, which was subject to a prime
plus margin rate of 7.0%.



Mexican Peso Line
of Credit.    The Mexican peso line of credit expired on December 31, 2001.



Term Loans for Acquisitions and Capital Expenditures.    The term loan bears interest, payable on a monthly
basis, at the Banks reference rate plus up to three-quarters of one percentage point and matures September 30, 2004. The Company may elect to have all or portions of the term loan bear interest at an alternative interest rate agreed upon by
the Bank and IMPCO for periods of not less than 30 days nor more than one year. The alternative interest rate is based on the offshore rate plus 5.0%, which was 6.9% at April 30, 2002. Each alternative rate portion must be for an amount not less
than $500,000 and may not include any portion of principal that is scheduled to be repaid before the last day of the applicable interest period.



Capital Lease and Expenditure Facilities.    This facility bears interest, payable on a monthly basis, at the
Banks reference rate plus up to three-quarters of one percentage point and matures June 30, 2005. The Company may elect to have all or portions of the term loan bear interest at an alternative interest rate agreed upon by the Bank and IMPCO
for periods of not less than 30 days nor more than one year. The alternative interest rate is based on the prime rate plus 2.25%, which was 7.0% at April 30, 2002. At April 30, 2002, approximately $1,516,000 was outstanding under this facility, at
an interest rate of 7.0%.



The June 2002 credit
facility amendment provides the Company with a $1,000,000 non-revolving line of credit. This line of credit bears interest at the Banks reference rate or an optional offshore rate. The line matures on May 31, 2003 and can be converted to a
term loan due in two years and may be prepaid, in whole or in part, at any time. At June 30, 2002, no borrowings were outstanding under this facility.



(b) Credit FacilityFortis Bank



IMPCO BV has secured a  2,300,000 (US$2,100,000) revocable credit facility with Fortis Bank in the Netherlands. The interest rate is
determined weekly based on a weighted average of several money market indices. IMPCO BVs borrowings under this facility may not exceed the combined total of a specified amount of its accounts receivable (70% of book value) and inventory (50%
of book value). At April 30, 2002, the interest rate was 4.9% and the outstanding balance was $1,068,000.



(c) The Hong Kong and Shanghai Banking Corporation Ltd.



Term Loan for the Acquisition of Mikuni.    In April 2002, IMPCO Japan secured a
¥64,000,000 (US$500,000) term loan facility with the Hong Kong and Shanghai Banking Corporation Ltd., Osaka Branch.



F-11



---

This term loan bears interest, payable on a quarterly basis, at the Euroyen London Interbank Offer Rate plus 160 basis points and matures in
fiscal year 2004. The Company may elect to lock the interest rate on the loan for periods of not less than 30 days nor more than six months. At April 30, 2002, the outstanding loan balance of ¥64,000,000 (US$500,000) bore an interest rate of
1.694%.



Line of
Credit.    The Hong Kong and Shanghai Bank line of credit expired on April 30, 2002.



(d) Derivative Instruments



It is the Companys policy to enter into interest rate swap contracts only to the extent necessary to reduce exposure to fluctuations
in interest rates. The Company does not enter into interest rate swap contracts for speculative purposes. In the unlikely event that a counter party to a swap agreement fails to meet the terms of an interest rate swap contract, the Companys
exposure is limited to the interest rate differential on the notional amount. The Company does not anticipate non-performance by the counter party. On May 2, 2001, the Company entered into one interest rate swap contract with Bank of America
NT&SA, which matures on September 30, 2004. This swap has payment dates and amortization identical to the term loan for acquisitions and capital expenditures. At April 30, 2002, the notional amount of the swap was approximately $6.4 million with
a fixed payment rate of 5.6% and a fluctuating receiving rate based upon LIBOR. At April 30, 2002 the carrying value of the interest rate swap was $(195,000) and is recorded as a liability. During the current fiscal year ended April 30, 2002, the
Company recorded a loss of $117,000 net of an applicable income tax benefit of $78,000 in comprehensive income in order to account for the change in fair value. There is no impact for the change in fair value of the derivative to current earnings
due to hedge ineffectiveness. The Companys weighted-average cost of funds was 7.2%, absent this swap agreement the weighted-average cost of funds would have been 6.0%.



At April 30, 2001, the weighted average interest rate for all of the Companys debt was 7.2%.



Annual maturities of long-term debt, excluding
capital leases (see Note 5) for the five years subsequent to May 1, 2002 are as follows: 2003$3,041,224; 2004$3,041,224; 2005$1,770,612; 2006$15,625; thereafter$0.



4.    Income Taxes



The provision for (benefit from) income taxes consists of the
following:



|                                           |  | Fiscal years ended April 30 |          
|------------------------------------------ |  | --------------------------- | ---------
|                                           |  | 2000                        |          
|Current:                                   |  |                             |          
|Federal                                    |  | $                           | 715,274  
|State                                      |  |                             | 258,787  
|Foreign                                    |  |                             | 999,060  
|                                           |  |                             |          
|                                           |  |                             | 1,973,121
|Deferred:                                  |  |                             |          
|Federal & State                            |  |                             | (846,882 
|                                           |  |                             |          
|Total provision (benefit) for income taxes |  | $                           | 1,126,239
|                                           |  |                             |          





F-12



---

Income (loss) before income taxes and minority interest of consolidated subsidiaries and
dividends for U.S. and foreign-based operations is shown below:



|        |  | Fiscal years ended April 30 |          
|------- |  | --------------------------- | ---------
|        |  | 2000                        |          
|U.S.    |  | $                           | 2,581,780
|Foreign |  |                             | 2,073,188
|        |  |                             |          
|        |  | $                           | 4,654,968
|        |  |                             |          



Deferred
income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes. The Company believes, based on its history of prior operating earnings, its spin-off of the
Quantum division and its expectations of future earnings, that operating income of the Company will more likely than not be sufficient to recognize fully these net deferred tax assets.



A reconciliation of income taxes computed at the federal statutory income tax rate to income taxes reported
in the consolidated statements of operations is as follows:



|                                  |  | Fiscal years ended April 30 |  
|--------------------------------- |  | --------------------------- | -
|                                  |  | 2000                        |  
|Federal statutory income tax rate |  | 34.0                        | %
|Permanent differences             |  | 1.8                         |  
|State tax, net                    |  | 4.9                         |  
|Foreign tax, net                  |  | 6.3                         |  
|Research and development credit   |  | (22.8                       | )
|                                  |  |                             |  
|Effective tax rate                |  | 24.2                        | %
|                                  |  |                             |  



The
components of the Companys deferred tax liabilities and assets is as follows:



|                                        |  | Fiscal years ended April 30 |           
|--------------------------------------- |  | --------------------------- | ----------
|                                        |  | 2001                        |           
|Deferred tax liabilities:               |  |                             |           
|Tax over book depreciation              |  | $                           | (1,203,278
|Other                                   |  |                             | (1,791,365
|                                        |  |                             |           
|                                        |  |                             | (2,994,643
|                                        |  |                             |           
|Deferred tax assets:                    |  |                             |           
|Tax credit carryforwards                |  |                             | 7,944,427 
|Net operating loss carryforwards        |  |                             | 5,117,935 
|Inventory reserves                      |  |                             | 961,488   
|Other provisions for estimated expenses |  |                             | 1,740,699 
|                                        |  |                             |           
|                                        |  | $                           | 15,764,549
|                                        |  |                             |           



For the
fiscal year ended April 30, 2002, the Company has a general business tax credit carryforward available for federal income tax purposes of approximately $6,437,000 that, if not used, expires between 2010 to 2022. Additionally, the Company has an
alternative minimum tax credit carryforward available for federal income tax purposes of approximately $173,000 and a foreign tax credit of $666,000. The Company also has research and development credit carryforwards for state income tax purposes of
approximately $4,161,000, which do not expire for tax reporting purposes. Federal net operating loss carryforwards expire between 2021 and 2022.



F-13



---



5.    Commitments and Contingencies



(a)    Leases



The Company has certain non-cancelable operating leases for facilities and equipment, and non-cancelable capital leases for machinery, equipment and motor vehicles. Future minimum lease commitments
under non-cancelable leases at April 30, 2002 are as follows:



|                                               |  | Lease Obligations
|---------------------------------------------- |  | -----------------
|Fiscal years ending April 30,                  |  | Capital          
|2003                                           |  | $                
|2004                                           |  |                  
|2005                                           |  |                  
|2006                                           |  |                  
|2007                                           |  |                  
|Thereafter                                     |  |                  
|                                               |  |                  
|Total minimum lease payments                   |  |                  
|                                               |  |                  
|Less imputed interest                          |  |                  
|                                               |  |                  
|Present value of future minimum lease payments |  |                  
|Less current portion                           |  |                  
|                                               |  |                  
|Long-term capital lease obligation             |  | $                
|                                               |  |                  



Total
rental expense under the operating leases for fiscal years ended April 30, 2000, 2001, and 2002 was approximately $1,846,000, $3,401,000 and $4,122,000, respectively. These leases are non-cancelable and certain leases have renewal options and
escalation clauses.



At April 30, 2000, 2001, and
2002, approximately $2,168,000, $1,930,000 and $1,328,000 was outstanding under the Companys capital lease facility, respectively. At April 30, 2002, the gross and net assets acquired under the capital lease facility was approximately
$4,556,000 and $1,327,000, respectively. At April 30, 2002, the gross and net assets acquired under the capital lease facility was approximately $ 4,925,000 and $1,750,000, respectively. Amortization of these assets is included in depreciation
expense.



(b) Contingencies



The Company is currently subject to certain legal proceedings
and claims arising in the ordinary course of business. Based on discussions with legal counsel, management does not believe that the outcome of any of these matters will have a material adverse effect on the Companys consolidated financial
statements.



In August 2000, the Company
initiated legal action in federal court (Eastern District of Michigan) against GFI Control Systems Inc. and Dynetek Industries Ltd. claiming that those entities infringed the Companys patent covering a compressed gas fuel system that includes
a tank with an internal pressure regulator. GFI Control Systems Inc. and Dynetek Industries Ltd. filed a counter-suit for patent infringement. The Company intends to enforce vigorously the Companys intellectual property rights.



(c) Investment and Tax Savings Plan



The Companys Investment and Tax Savings Plan (the
Plan) is a defined contribution plan, which is qualified under Internal Revenue Service Code Section 401(k). The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974. All employees who are at least age
twenty-one or older are eligible to participate in the Plan on the first day of employment with the Company. Employees of the Company



F-14



---

who elect to participate in the Plan may contribute into the Plan not less than 1% nor more than 15% of compensation. The Companys
matching contributions are discretionary and match elective salary deferrals up to 3.0% of compensation. Approximately 72% of eligible employees were enrolled in the 401(k) plan at April 30, 2002. Employer contributions approximated $482,000,
$593,000 and $632,000 for fiscal years ended 2000, 2001, and 2002 respectively.



(d)    Employment Agreements



The Company has entered into employment agreements with three executive officers for a term of two consecutive 12-month periods commencing
on April 1, 2002. The agreements require payments of annual base salaries aggregating $690,000, payment of incentive compensation under the Companys Bonus Incentive Plan, and certain benefits including term life insurance, disability
insurance, and car allowances. The agreements also cover payments required under termination events.



6.    Stockholders Equity



(a)    Stockholder Protection Rights Agreement



On June 30, 1999, the Companys Board of Directors adopted a Stockholder Protection Rights
Agreement and declared a dividend of one right on each outstanding share of IMPCO common stock. Each right entitles the holder, upon certain events, to purchase, at an exercise price of $45 per share, shares of common stock with a value equal to
twice the exercise price. The dividend was paid on July 26, 1999 to stockholders of record on July 12, 1999.



(b)    Stock options



The Company has six stock option plans that provide for the issuance of options to key employees and directors of the Company at the fair
market value at the time of grant. Options under the plans generally vest in four or five years and are generally exercisable while the individual is an employee or a director, or ordinarily within one month following termination of employment. In
no event may options be exercised more than ten years after date of grant.



|                                      |  | Number of Shares |   |  | Weighted Average Exercise Price
|------------------------------------- |  | ---------------- | - |  | -------------------------------
|Outstanding at April 30, 1999         |  | 1,502,658        |   |  | $                              
|Granted                               |  | 104,974          |   |  |                                
|Exercised                             |  | (163,326         | ) |  |                                
|Forfeited                             |  | (122,375         | ) |  |                                
|                                      |  |                  |   |  |                                
|Options outstanding at April 30, 2000 |  | 1,321,931        |   |  | $                              
|Granted                               |  | 416,453          |   |  |                                
|Exercised                             |  | (97,572          | ) |  |                                
|Forfeited                             |  | (46,047          | ) |  |                                
|                                      |  |                  |   |  |                                
|Options outstanding at April 30, 2001 |  | 1,594,765        |   |  | $                              
|Granted                               |  | 232,000          |   |  |                                
|Exercised                             |  | (328,459         | ) |  |                                
|Forfeited                             |  | (120,826         | ) |  |                                
|                                      |  |                  |   |  |                                
|Options outstanding at April 30, 2002 |  | 1,377,480        |   |  | $                              
|                                      |  |                  |   |  |                                
|Shares exercisable at April 30, 2000  |  | 685,334          |   |  | $                              
|                                      |  |                  |   |  |                                
|Shares exercisable at April 30, 2001  |  | 774,889          |   |  | $                              
|                                      |  |                  |   |  |                                
|Shares exercisable at April 30, 2002  |  | 666,623          |   |  | $                              
|                                      |  |                  |   |  |                                



F-15



---



The following
table sets forth summarized information with respect to stock options outstanding and exercisable at April 30, 2002:



|                     |  | Outstanding      |  | Exercisable 
|-------------------- |  | ---------------- |  | ------------
|Exercise Price Range |  | Number of Shares |  | Average Life
|$4.46 to $6.70       |  | 93,111           |  | 3.2         
|$6.70 to $8.93       |  | 486,796          |  | 4.9         
|$8.93 to $11.16      |  | 548,416          |  | 8.5         
|$11.16 to $13.39     |  | 151,152          |  | 4.5         
|$13.39 to $15.62     |  | 69,405           |  | 8.9         
|$15.62 to $17.86     |  | 10,000           |  | 0.0         
|$20.09 to $22.32     |  | 18,600           |  | 8.3         
|                     |  |                  |  |             
|                     |  | 1,377,480        |  |             
|                     |  |                  |  |             



At
April 30, 2002, there were 66,315 shares available for grant.



The Company has elected to account for its employee stock options under Accounting Principles Board Opinion 25, Accounting for Stock Issued to Employees (APB 25) and related interpretations in accounting for employee
stock options. No compensation expense is recorded under APB 25 because the exercise price of the Companys employee common stock options equals the market price of the underlying common stock on the grant date.



SFAS 123 requires as adjusted information
regarding net income and net income per share to be disclosed for new options granted after fiscal year 1996. The fair value of these options was determined at the date of grant using the Black-Scholes option pricing model with the following
weighted-average assumptions:



|                                     |  | Year Ended April 30 |  
|------------------------------------ |  | ------------------- | -
|                                     |  | 2000                |  
|Expected dividend yield              |  | 0.0                 | %
|Calculated volatility                |  | 0.729               |  
|Risk-free interest rate              |  | 3                   | %
|Expected life of the option in years |  | 8.82                |  



The
estimated fair value of the options is amortized to expense over the options vesting period for as adjusted disclosures. The net income per share as adjusted for the effects of SFAS 123 is not indicative of the effects
on reported net income/loss for future years. The Companys reported as adjusted information at April 30 is as follows (in thousands, except per share amounts):



|                                                 |  | Year Ended April 30 |      
|------------------------------------------------ |  | ------------------- | -----
|                                                 |  | 2000                |      
|Net income (loss)                                |  | $                   | 3,065
|As adjusted                                      |  | $                   | 2,893
|Net income (loss) per share as reportedbasic    |  | $                   | 0.36 
|Net income (loss) per share as adjustedbasic    |  | $                   | 0.34 
|Net income (loss) per share as reporteddilutive |  | $                   | 0.33 
|Net income (loss) per share as adjusteddilutive |  | $                   | 0.31 



(c)
Warrants



On January 11, 2002, the Company
completed a private placement of 2,000,000 shares of common stock at a price of $11.25 per share for $22.5 million. The Company also issued to the investors warrants to purchase an



F-16



---

aggregate of 200,000 shares of common stock at an exercise price of $13.25 per share. Each purchaser was issued a warrant to purchase
one-tenth of a share of common stock for each share of common stock purchased under the agreement. In addition, the Company issued warrants to purchase an aggregate of 100,000 shares of common stock to the placement agent in connection with the
transaction. The warrants are exercisable at any time until January 11, 2006.



(d)    Notes receivable from officers



On March 2, 2001, the Board of Directors authorized loans to three officers of the Company for the exercise of options to purchase Company
stock from former stockholders. The loans accrued interest at 9% and were fully collateralized by a security interest in and lien upon shares of common stock of the Company and certain vested Company nonqualified stock options issued to the
officers. Additionally, the loans were secured by the personal residence of one of the officers and were cross-collateralized. Each of these loans was repaid in full in July 2001.



7.    Earnings Per Share



The following table sets forth the computation of basic and diluted earnings per share:



|                                                                                                    |  | Fiscal Year Ended April 30 |          
|--------------------------------------------------------------------------------------------------- |  | -------------------------- | ---------
|                                                                                                    |  | 2000                       |          
|Numerator:                                                                                          |  |                            |          
|Net income (loss)                                                                                   |  | $                          | 3,528,729
|Minority interest                                                                                   |  |                            | (463,233 
|                                                                                                    |  |                            |          
|Numerator for basic earnings per shareincome (loss) available to common
stockholders               |  | $                          | 3,065,496
|Denominator:                                                                                        |  |                            |          
|Denominator for basic earnings per shareweighted-average shares                                    |  |                            | 8,489,229
|Effect of dilutive securities:                                                                      |  |                            |          
|Employee stock options                                                                              |  |                            | 743,070  
|                                                                                                    |  |                            |          
|Dilutive potential common shares                                                                    |  |                            | 743,070  
|Denominator for diluted earnings per shareadjusted weighted-average shares and
assumed conversions |  |                            | 9,232,299
|                                                                                                    |  |                            |          
|Basic earnings (loss) per share                                                                     |  | $                          | 0.36     
|                                                                                                    |  |                            |          
|Diluted earnings (loss) per share.                                                                  |  | $                          | 0.33     
|                                                                                                    |  |                            |          



Options
and warrants to purchase 1,677,480 and 1,594,765 shares of common stock were excluded in the computation of diluted loss per share for the years ended April 30, 2002 and 2001, respectively as the effect would have been antidilutive. Options to
purchase 636,597 shares were excluded in the computation of diluted earnings per share in the fiscal year ended April 30, 2000 because the market price was less than the exercise price.



8.    Revenues



During fiscal year 2000, the IMPCO BV, IMPCO Pty, Grupo IMPCO Mexicano and IMPCO Japan subsidiaries accounted
for approximately 12%, 6%, 6% and less than 3% of total consolidated revenues, respectively, and contract revenue accounted for approximately 8% of consolidated revenues. During fiscal year 2001, the IMPCO BV, IMPCO Pty, Grupo IMPCO Mexicano and
IMPCO Japan subsidiaries accounted for approximately 14%, 6%, 7% and 3% of total consolidated revenues, respectively, and contract revenue accounted for approximately 8% of consolidated revenues. During fiscal year 2002, the IMPCO BV, IMPCO Pty,
Grupo IMPCO Mexicano and IMPCO Japan subsidiaries accounted for approximately 17%, 4%, 12%, and 2% of total



F-17



---

consolidated revenues, respectively, and contract revenue accounted for approximately 9% of consolidated revenues. During fiscal year 2000,
2001, and 2002, General Motors Corporation, and customers associated with the General Motors program, accounted for approximately 16%, 20% and 23%, respectively, of consolidated revenues.



The Company routinely sells products to a broad base of domestic and international customers, which includes
distributors and original equipment manufacturers. Based on the nature of these customers, credit is generally granted without collateral being required. The Company does not anticipate that a significant credit risk exists as a result of these
customer relationships.



9.    Business
Segment and Geographic Information



Business Segments.    The Company currently has three reporting segments: the Quantum division, the Gaseous Fuel Products division and International Operations. Quantum generates revenues through the sale
of fuel storage, fuel delivery and electronic control systems to original equipment manufacturers (OEMs) and the installation of products into OEM vehicles. The division also generates contract revenue by providing engineering design and support to
the OEMs so that fuel systems will fit into a variety of their vehicles as they upgrade their models each year. The Gaseous Fuel Products division sells products including parts and conversion systems to OEMs and the aftermarket. The Companys
International Operations in Australia, Europe, Japan and Mexico provide distribution for the Companys products, predominantly from its Gaseous Fuel Products division and some product assembly.



Corporate expenses consist of general and administrative
expenses at the corporate level and include the amortization of goodwill and other intangible assets. Intersegment eliminations are primarily the result of intercompany sales from our Gaseous Fuel Products division to our International Operations.



All research and development is expensed as
incurred. Research and development expense includes both customer-funded research and development and Company sponsored research and development. Customer-funded research and development consists primarily of expenses associated with contract
revenue. These expenses include applications development costs in the Quantum division funded under customer contracts.



The Company evaluates performance based on profit or loss from operations before interest and income taxes. The accounting policies of the
reportable segments are the same as those described in the Summary of Significant Accounting Policies.



F-18



---



Financial
Information by Business Segment.    Financial information by business segment for continuing operations follows:



|                         |  | Fiscal Year Ended April 30 |        
|------------------------ |  | -------------------------- | -------
|Revenues                 |  | 2000                       |        
|                         |  | (in thousands)             |        
|Quantum                  |  | $                          | 22,341 
|Gaseous Fuels Products   |  |                            | 76,831 
|International Operations |  |                            | 29,991 
|Intersegment Elimination |  |                            | (16,347
|                         |  |                            |        
|Total                    |  | $                          | 112,816
|                         |  |                            |        
|                        
|                         |  | Fiscal Year Ended April 30 |        
|Operating Income (Loss)  |  | 2000                       |        
|                         |  | (in thousands)             |        
|Quantum                  |  | $                          | (8,510 
|Gaseous Fuels Products   |  |                            | 19,451 
|International Operations |  |                            | 2,623  
|Corporate Expenses       |  |                            | (7,042 
|Intersegment Elimination |  |                            | (425   
|                         |  |                            |        
|Total                    |  | $                          | 6,097  
|                         |  |                            |        

|                             
|-----------------------------
|                             
|Identifiable Assets          
|                             
|Quantum                      
|Gaseous Fuels Products       
|International Operations     
|Corporate                    
|                             
|Total                        
|                             
|                             
|                             
|Capital Expenditures         
|                             
|Quantum                      
|Gaseous Fuels Products       
|International Operations     
|Corporate                    
|                             
|Total                        
|                             
|                             
|                             
|Depreciation and Amortization
|                             
|Quantum                      
|Gaseous Fuels Products       
|International Operations     
|Corporate                    
|                             
|Total.                       
|                             



F-19



---



Product
Revenues by Application.    The Companys product revenues by application across all business segments follows (in thousands):



|                                                |  | Fiscal Year Ended April 30
|----------------------------------------------- |  | --------------------------
|                                                |  | 2000                      
|                                                |  | (in thousands)            
|Motor vehicle products                          |  | $                         
|Forklifts and other material handling equipment |  |                           
|Small portable to large stationary engines      |  |                           
|                                                |  |                           
|Total product sales                             |  | $                         
|                                                |  |                           



Geographic Information.    The Companys geographic information for revenues to unaffiliated customers and long-lived assets is shown below. The basis for determining revenues is the geographic point
of shipment. Long-lived assets represent long-term tangible assets and are physically located in the region as indicated.



|                                   |  | Fiscal Year Ended April 30
|---------------------------------- |  | --------------------------
|Revenues to Unaffiliated Customers |  | 2000                      
|                                   |  | (in thousands)            
|United States                      |  | $                         
|Europe                             |  |                           
|Pacific Rim                        |  |                           
|Latin America                      |  |                           
|                                   |  |                           
|Total                              |  | $                         
|                                   |  |                           

|                 
|-----------------
|                 
|Long-Lived Assets
|                 
|United States    
|Europe           
|Pacific Rim      
|Latin America    
|                 
|Total            
|                 



10.    Purchases



During fiscal years 2000, 2001 and 2002, purchases from one vendor constituted approximately 10%, 5% and 8% of consolidated net inventory purchases, respectively. In fiscal year 2001 and 2002, 10 suppliers accounted for approximately
21% and 28%, respectively, of consolidated net inventory purchases.



11.    Supplementary Cash Flow Information



For fiscal years 2000, 2001 and 2002, the Company incurred capital lease obligations of approximately $100,000, $550,000 and $367,000, respectively.



Interest and taxes paid for fiscal year 2000, 2001, and 2002
are as follows:



|              |  | Fiscal year ended April 30
|------------- |  | --------------------------
|              |  | 2000                      
|Interest paid |  | $                         
|Taxes paid    |  |                           



F-20



---



12.    Quarterly Results Of Operations (Unaudited)



A summary of the unaudited quarterly results of operations follows (in thousands, except per share amounts):



|                                 |  | First Quarter |        |   | Second Quarter |   |        | Third Quarter |  |   | Fourth Quarter |  
|-------------------------------- |  | ------------- | ------ | - | -------------- | - | ------ | ------------- |  | - | -------------- | -
|Fiscal Year 2001                 |  |               |        |   |                |   |        |               |  |   |                |  
|Product sales                    |  | $             | 26,599 |   |                | $ | 22,656 |               |  | $ | 20,928         |  
|Contract revenue                 |  |               | 2,669  |   |                |   | 2,695  |               |  |   | 1,116          |  
|Net revenue                      |  |               | 29,268 |   |                |   | 25,351 |               |  |   | 22,044         |  
|Cost of product sales            |  |               | 17,995 |   |                |   | 15,866 |               |  |   | 14,918         |  
|Gross profit on product sales    |  |               | 8,604  |   |                |   | 6,790  |               |  |   | 6,010          |  
|Research and development expense |  |               | 5,998  |   |                |   | 7,243  |               |  |   | 8,979          |  
|Net loss                         |  |               | (609   | ) |                |   | (1,382 | )             |  |   | (4,351         | )
|Net loss per share: (1)          |  |               |        |   |                |   |        |               |  |   |                |  
|Basic                            |  | $             | (0.07  | ) |                | $ | (0.13  | )             |  | $ | (0.42          | )
|Diluted                          |  | $             | (0.07  | ) |                | $ | (0.13  | )             |  | $ | (0.42          | )

|                                 |  | First Quarter |        |   | Second Quarter |   |        | Third Quarter |  |   | Fourth Quarter |  
|-------------------------------- |  | ------------- | ------ | - | -------------- | - | ------ | ------------- |  | - | -------------- | -
|Fiscal Year 2002                 |  |               |        |   |                |   |        |               |  |   |                |  
|Product sales                    |  | $             | 23,512 |   |                | $ | 22,816 |               |  | $ | 15,948         |  
|Contract revenue                 |  |               | 2,338  |   |                |   | 1,247  |               |  |   | 1,368          |  
|Net revenue                      |  |               | 25,850 |   |                |   | 24,063 |               |  |   | 17,316         |  
|Cost of product sales            |  |               | 17,712 |   |                |   | 19,731 |               |  |   | 13,978         |  
|Gross profit on product sales    |  |               | 5,800  |   |                |   | 3,085  |               |  |   | 1,970          |  
|Research and development expense |  |               | 11,229 |   |                |   | 10,731 |               |  |   | 8,683          |  
|Net loss                         |  |               | (5,596 | ) |                |   | (8,732 | )             |  |   | (7,020         | )
|Net loss per share: (1)          |  |               |        |   |                |   |        |               |  |   |                |  
|Basic                            |  | $             | (0.54  | ) |                | $ | (0.83  | )             |  | $ | (0.64          | )
|Diluted                          |  | $             | (0.54  | ) |                | $ | (0.83  | )             |  | $ | (0.64          | )

---

|(1) |  | Per common share amounts for the quarters and full years have each been calculated separately. Accordingly, quarterly amounts may not add to the annual amounts
because of differences in the average common shares outstanding during each period and, with regard to diluted per common share amounts only, because of the effect of potentially dilutive securities only in the periods in which the effect would have
been dilutive.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



13.    Subsequent Events



Quantum Spin-off.    On July 23, 2002, the Company completed the distribution and spin-off of its Quantum subsidiary by distributing one share of Quantum common stock for every share of IMPCO
common stock held on the record date, which was July 5, 2002. As a result of the spin-off of Quantum, the Company no longer holds any continuing interest in Quantum and will report Quantum as a discontinued operation in fiscal year 2003.
Additionally, the exercise prices of stock options and warrants will be adjusted in accordance with FASB Interpretation No. 44, Accounting for Certain Transactions Involving Stock Compensation, an interpretation of APB Opinion No. 25.
Accordingly, the exercise prices of the options and warrants will be adjusted to approximately 56% of their pre-distribution amounts.



Private Placement.    On May 8, 2002, the Company completed the sale of an aggregate of 1.5 million shares of
our common stock to institutional and accredited investors at a purchase price of $12.50 per share, for gross proceeds of $18.75 million. The proceeds are expected to be used for potential acquisitions in the alternative fuels business, debt
repayment, and general corporate purposes.



F-21



---

IMPCO TECHNOLOGIES, INC.



UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS



On July 23, 2002, the Company
completed the distribution and spin-off of its Quantum subsidiary by distributing one share of Quantum common stock for every share of IMPCO common stock held on the record date, which was July 5, 2002. As a result of the spin-off, the Company no
longer holds any interest in Quantum and will report it as a discontinued operation in fiscal year 2003.



The following unaudited pro forma condensed consolidated financial statements have been prepared to illustrate the effect of the intended
spin-off of Quantum in accordance with Article 11 of Regulation S-X. The unaudited pro forma condensed consolidated balance sheet illustrates the post spin-off balance sheet of IMPCO Technologies, Inc. as of April 30, 2002. The unaudited pro forma
condensed consolidated statement of operations illustrates the post spin-off statement of income of IMPCO Technologies, Inc. for the year ended April 30, 2002 as if the spin-off had occurred on May 1, 2001.



The pro forma adjustments are based upon available information
and upon certain assumptions that management believes are reasonable under the circumstances. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the historical financial statements of IMPCO
Technologies, Inc., and the notes thereto. The unaudited pro forma condensed consolidated financial statements do not purport to represent what our actual results of operations or actual financial position would have been if the spin-off of Quantum
in fact occurred on such dates or to project our results of operations or financial position for any such future period or date.



F-22



---



IMPCO
TECHNOLOGIES, INC.



UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED BALANCE SHEET

April 30, 2002



|                                                          |  | IMPCO |             |   | Historical Quantum(1) |   | Pro Forma Adjustments |  |   | Pro forma IMPCO excluding Quantum |     
|--------------------------------------------------------- |  | ----- | ----------- | - | --------------------- | - | --------------------- |  | - | --------------------------------- | ----
|ASSETS                                                    |  |       |             |   |                       |   |                       |  |   |                                   |     
|Current Assets:                                           |  |       |             |   |                       |   |                       |  |   |                                   |     
|Cash                                                      |  | $     | 10,590,913  |   |                       | $ | 177,414               |  | $ | 15,000,000                        | (2) 
|Restricted cash                                           |  |       | 814,782     |   |                       |   |                      |  |   |                                  |     
|Accounts receivable, less allowance for doubtful accounts |  |       | 17,598,668  |   |                       |   | 4,494,328             |  |   |                                  |     
|Inventories                                               |  |       | 28,282,575  |   |                       |   | 9,626,616             |  |   |                                  |     
|Deferred tax assets                                       |  |       | 2,807,677   |   |                       |   |                       |  |   |                                  |     
|Other current assets                                      |  |       | 2,322,404   |   |                       |   | 87,713                |  |   |                                  |     
|                                                          |  |       |             |   |                       |   |                       |  |   |                                   |     
|Total current assets                                      |  |       | 62,417,019  |   |                       |   | 14,386,071            |  |   | 15,000,000                        |     
|Equipment & leasehold improvements:                       |  |       |             |   |                       |   |                       |  |   |                                   |     
|Dies, molds and patterns                                  |  |       | 8,737,763   |   |                       |   | 2,676,537             |  |   |                                  |     
|Machinery and equipment                                   |  |       | 14,413,896  |   |                       |   | 6,381,335             |  |   |                                  |     
|Office furnishings and equipment                          |  |       | 16,589,511  |   |                       |   | 7,791,009             |  |   |                                  |     
|Automobiles and trucks                                    |  |       | 596,758     |   |                       |   | 181,173               |  |   |                                  |     
|Leasehold improvements                                    |  |       | 4,808,286   |   |                       |   | 4,428,449             |  |   |                                  |     
|                                                          |  |       |             |   |                       |   |                       |  |   |                                   |     
|                                                          |  |       | 45,146,214  |   |                       |   | 21,458,503            |  |   |                                  |     
|Less accumulated depreciation and amortization            |  |       | 23,281,881  |   |                       |   | 8,039,150             |  |   |                                  |     
|                                                          |  |       |             |   |                       |   |                       |  |   |                                   |     
|Net equipment and leasehold improvements                  |  |       | 21,864,333  |   |                       |   | 13,419,353            |  |   |                                  |     
|Intangibles arising from acquisitions, net                |  |       | 9,078,745   |   |                       |   |                      |  |   |                                  |     
|Deferred tax assets                                       |  |       | 29,128,539  |   |                       |   |                      |  |   |                                  |     
|Other assets                                              |  |       | 960,289     |   |                       |   | 354,000               |  |   |                                  |     
|                                                          |  |       |             |   |                       |   |                       |  |   |                                   |     
|                                                          |  | $     | 123,448,925 |   |                       | $ | 28,159,424            |  | $ | 15,000,000                        |     
|                                                          |  |       |             |   |                       |   |                       |  |   |                                   |     
|                                                         
|LIABILITIES AND STOCKHOLDERS EQUITY                      |  |       |             |   |                       |   |                       |  |   |                                   |     
|Current liabilities:                                      |  |       |             |   |                       |   |                       |  |   |                                   |     
|Accounts payable                                          |  | $     | 12,001,673  |   |                       | $ | 6,761,294             |  | $ |                                  |     
|Accrued payroll obligations                               |  |       | 3,545,817   |   |                       |   | 660,165               |  |   |                                  |     
|Other accrued expenses                                    |  |       | 3,276,237   |   |                       |   | 1,526,231             |  |   |                                  |     
|Current lines of credit                                   |  |       | 8,625,000   |   |                       |   | 8,625,000             |  |   | (8,625,000                        | )(2)
|Current maturities of long-term debt and capital leases   |  |       | 5,661,632   |   |                       |   | 188,832               |  |   |                                  |     
|                                                          |  |       |             |   |                       |   |                       |  |   |                                   |     
|Total current liabilities                                 |  |       | 33,110,359  |   |                       |   | 17,761,522            |  |   | (8,625,000                        | )   
|Lines of credit                                           |  |       |            |   |                       |   |                      |  |   |                                  |     
|Term loans                                                |  |       | 4,889,962   |   |                       |   |                      |  |   |                                  |     
|Capital leases                                            |  |       | 503,381     |   |                       |   | 127,355               |  |   |                                  |     
|Minority interest                                         |  |       | 2,268,093   |   |                       |   |                      |  |   |                                  |     
|Stockholders equity:                                     |  |       |             |   |                       |   |                       |  |   |                                   |     
|Preferred stock                                           |  |       |            |   |                       |   |                      |  |   |                                  |     
|Common stock                                              |  |       | 12,622      |   |                       |   |                      |  |   |                                  |     
|Additional paid-in capital relating to common stock       |  |       | 126,315,507 |   |                       |   | 10,270,547            |  |   | 23,625,000                        | (2) 
|Shares held in trust                                      |  |       | (321,858    | ) |                       |   |                      |  |   |                                  |     
|Notes receivable from officers                            |  |       |            |   |                       |   |                      |  |   |                                  |     
|Retained earnings (accumulated deficit)                   |  |       | (39,671,014 | ) |                       |   |                      |  |   |                                  |     
|Accumulated other comprehensive income                    |  |       | (3,658,127  | ) |                       |   |                      |  |   |                                  |     
|                                                          |  |       |             |   |                       |   |                       |  |   |                                   |     
|Total stockholders equity                                |  |       | 82,677,130  |   |                       |   | 10,270,547            |  |   | 23,625,000                        |     
|                                                          |  |       |             |   |                       |   |                       |  |   |                                   |     
|                                                          |  | $     | 123,448,925 |   |                       | $ | 28,159,424            |  | $ | 15,000,000                        |     
|                                                          |  |       |             |   |                       |   |                       |  |   |                                   |     



F-23



---



IMPCO
TECHNOLOGIES, INC.



UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

Fiscal Year Ended April 30, 2002



|                                                                                                 |  | IMPCO |             |   | Historical Quantum (1) |   |             | Pro Forma Adjustments |  |   | Pro Forma IMPCO excluding Quantum |     
|------------------------------------------------------------------------------------------------ |  | ----- | ----------- | - | ---------------------- | - | ----------- | --------------------- |  | - | --------------------------------- | ----
|Revenue:                                                                                         |  |       |             |   |                        |   |             |                       |  |   |                                   |     
|Product sales                                                                                    |  | $     | 83,062,040  |   |                        | $ | 15,458,529  |                       |  | $ |                                  |     
|Contract revenue                                                                                 |  |       | 8,016,777   |   |                        |   | 7,944,766   |                       |  |   |                                  |     
|                                                                                                 |  |       |             |   |                        |   |             |                       |  |   |                                   |     
|Net revenue                                                                                      |  |       | 91,078,817  |   |                        |   | 23,403,295  |                       |  |   |                                  |     
|                                                                                                 |  |       |             |   |                        |   |             |                       |  |   |                                   |     
|Costs and expenses:                                                                              |  |       |             |   |                        |   |             |                       |  |   |                                   |     
|Cost of product sales                                                                            |  |       | 70,123,128  |   |                        |   | 25,581,284  |                       |  |   |                                  |     
|Research and development expense                                                                 |  |       | 38,512,814  |   |                        |   | 32,656,683  |                       |  |   |                                  |     
|Selling, general and administrative expense                                                      |  |       | 26,055,228  |   |                        |   | 4,854,656   |                       |  |   | 1,524,364                         | (2) 
|                                                                                                 |  |       |             |   |                        |   |             |                       |  |   |                                   |     
|Total costs and expenses                                                                         |  |       | 134,691,170 |   |                        |   | 63,092,623  |                       |  |   | 1,524,364                         |     
|                                                                                                 |  |       |             |   |                        |   |             |                       |  |   |                                   |     
|                                                                                                
|Operating loss                                                                                   |  |       | (43,612,353 | ) |                        |   | (39,689,328 | )                     |  |   | (1,524,364                        | )   
|Interest expense                                                                                 |  |       | 1,652,817   |   |                        |   | 488,444     |                       |  |   |                                  |     
|Interest income                                                                                  |  |       | (245,188    | ) |                        |   | (9,555      | )                     |  |   |                                  |     
|                                                                                                 |  |       |             |   |                        |   |             |                       |  |   |                                   |     
|Loss before income taxes, minority interest in income of consolidated subsidiaries and dividends |  |       | (45,019,982 | ) |                        |   | (40,168,217 | )                     |  |   | (1,524,364                        | )   
|Income tax expense (benefit)                                                                     |  |       | (18,007,905 | ) |                        |   | 800         |                       |  |   | (16,676,144                       | )(3)
|Minority interest in income of consolidated subsidiaries                                         |  |       | 223,971     |   |                        |   |            |                       |  |   |                                  |     
|                                                                                                 |  |       |             |   |                        |   |             |                       |  |   |                                   |     
|Net loss applicable to common stock                                                              |  | $     | (27,236,048 | ) |                        | $ | (40,169,017 | )                     |  | $ | (15,151,781                       | )   
|                                                                                                
|Net loss per share:                                                                              |  |       |             |   |                        |   |             |                       |  |   |                                   |     
|Basic                                                                                            |  | $     | (2.45       | ) |                        |   |             |                       |  |   |                                   |     
|Diluted                                                                                          |  | $     | (2.45       | ) |                        |   |             |                       |  |   |                                   |     
|                                                                                                
|Number of shares used in per share computation:                                                  |  |       |             |   |                        |   |             |                       |  |   |                                   |     
|Basic                                                                                            |  |       | 11,097,815  |   |                        |   |             |                       |  |   |                                   |     
|Diluted                                                                                          |  |       | 11,097,815  |   |                        |   |             |                       |  |   |                                   |     



F-24



---

NOTES TO UNAUDITED PRO FORMA CONDENSED



CONSOLIDATED FINANCIAL STATEMENTS



Pro Forma Balance Sheet



| | 1) |  | Assets and liabilities directly attributable to Quantum at April 30, 2002. Additional paid-in capital represents the net book value of Quantum.
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------



| | 2) |  | The adjustment to cash represents a $15.0 million cash transfer from IMPCO to Quantum and the adjustment to current lines of credit represents the assumption by
IMPCO of the $8.6 million outstanding under the debt facility.
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Pro Forma Statement of Operations



| | 1) |  | Quantum historical operating results for the fiscal year ended April 30, 2002.
| | -- |  | ------------------------------------------------------------------------------



| | 2) |  | Specifically identified portion of corporate general and administrative expense directly attributable to Quantum for the fiscal year ended April 30, 2002. The
adjusted amount does not include any portion of expected on-going expenses of IMPCO.
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3) |  | The adjustment to income taxes represents the effect of Quantum research and development credits and operating losses. The effective income tax rate for IMPCO
primarily represents the federal statutory rate plus state and foreign income taxes.
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-25



---



CERTIFICATION



I, Robert M. Stemmler,
certify that:



|1. |  | I have reviewed this annual report on Form 10-K of IMPCO Technologies, Inc. (IMPCO);
|-- |  | --------------------------------------------------------------------------------------



|2. |  | Based on my knowledge, this annual 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 quarterly report;
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3. |  | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the
financial condition, results of operations and cash flows of IMPCO as of, and for, the periods presented in this quarterly report.
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Date: February 5, 2003

/s/    ROBERTM. STEMMLERRobert M. Stemmler President and Chief Executive Officer




---



CERTIFICATION



I, Timothy S. Stone,
certify that:



|1. |  | I have reviewed this annual report on Form 10-K of IMPCO Technologies, Inc. (IMPCO);
|-- |  | --------------------------------------------------------------------------------------



|2. |  | Based on my knowledge, this annual 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 quarterly report;
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3. |  | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the
financial condition, results of operations and cash flows of IMPCO as of, and for, the periods presented in this quarterly report.
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Date: |  | February 5, 2003
|----- |  | ----------------

/s/    TIMOTHY S.
STONETimothy S. Stone Acting Chief Financial Officer and Treasurer




---

SIGNATURES



Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on February 5, 2003.



IMPCO TECHNOLOGIES, INC.By:

/s/    ROBERT M. STEMMLER


Name:

Robert M. StemmlerTitle:

Chief Executive Officer and Chairman of the Board




Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.



|Signature                                     |  | Title                                                                           |  | Date            
|--------------------------------------------- |  | ------------------------------------------------------------------------------- |  | ----------------
|                                             
|/s/    ROBERT M.
STEMMLERRobert M. Stemmler   |  | Chief Executive Officer and Chairman of the Board
(Principal Executive Officer) |  | February 5, 2003
|                                             
|/s/    TIMOTHY S.
STONETimothy S. Stone       |  | Acting Chief Financial Officer (Principal Accounting Officer)                   |  | February 5, 2003
|                                             
|/s/    NORMAN L.
BRYANNorman L. Bryan         |  | Director                                                                        |  | February 5, 2003
|                                             
|/s/    PAUL
MLOTOKPaul Mlotok                 |  | Director                                                                        |  | February 5, 2003
|                                             
|/s/    J. DAVID POWERS
IIIJ. David Powers
III |  | Director                                                                        |  | February 5, 2003
|                                             
|/s/    DON J.
SIMPLOTDon J. Simplot           |  | Director                                                                        |  | February 5, 2003





---



EXHIBIT
INDEX



|Exhibit No. |  | Description                                                                                                                                                                                      |  | Note No. |  
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------- | -
|2.1         |  | Deed of Sale of Business by and among IMPCO Technologies Pty. Limited, as buyer, and
Ateco Automotive Pty Limited, as seller, dated as of July 1, 1996.                                          |  | (7       | )
|           
|2.2         |  | Deed of Release by and among IMPCO Technologies, Inc. and Ateco Automotive Pty
Limited dated as of July 1, 1996.                                                                                 |  | (7       | )
|           
|2.3         |  | Shareholders Agreement for Gas Parts (NSW) Pty Limited by and among IMPCO
Technologies Pty. Limited, Gas Parts Pty Limited and Gas Parts (NSW) Pty. Limited, dated as of July 4, 1996.           |  | (7       | )
|           
|3.1         |  | Certificate of Incorporation, as currently in effect.                                                                                                                                            |  | (28      | )
|           
|3.2         |  | Bylaws adopted July 22, 1998.                                                                                                                                                                    |  | (13      | )
|           
|4.1         |  | Stockholders Protection Rights Agreement dated as of June 30, 1999 between
IMPCO Technologies, Inc. and ChaseMellon Stockholder Services, L.L.C., as Rights Agent.                              |  | (12      | )
|           
|10.1        |  | Lease between L-W Income Properties and IMPCO Technologies, Inc. dated May 10,
1989.                                                                                                             |  | (2       | )
|           
|10.2+       |  | 1989 Incentive Stock Option Plan.                                                                                                                                                                |  | (3       | )
|           
|10.3+       |  | 1991 Executive Stock Option Plan dated November 5, 1991, among AirSensors, Inc., as
the Company, and Bertram R. Martin, James J. Mantras and Dale L. Rasmussen, as Optionees.                    |  | (4       | )
|           
|10.4        |  | First Amendment to Lease dated April 19, 1993, between L-W Income Properties and
IMPCO Technologies, Inc.                                                                                        |  | (5       | )
|           
|10.5+       |  | 1993 Stock Option Plan for Non-employee Directors.                                                                                                                                               |  | (6       | )
|           
|10.6+       |  | Amendment to 1989 Incentive Stock Option Plan.                                                                                                                                                   |  | (6       | )
|           
|10.7+       |  | 1996 Incentive Stock Option Plan.                                                                                                                                                                |  | (8       | )
|           
|10.8+       |  | 1997 Incentive Stock Option Plan.                                                                                                                                                                |  | (9       | )
|           
|10.9        |  | Lease between Klein Investments, Family Limited Partnership, as lessor, and IMPCO
Technologies, Inc., as lessee, dated August 18, 1997.                                                          |  | (10      | )
|           
|10.10       |  | Amendment dated March 18, 1998 to Loan agreement dated October 7, 1998 between Bank
of America National Trust and Savings, as lender, and IMPCO Technologies, Inc., as the borrower.             |  | (10      | )
|           
|10.11       |  | Amendment dated April 29, 1998 to Loan agreement dated October 7, 1998 between Bank
of America National Trust and Savings, as lender, and IMPCO Technologies, Inc., as the borrower.             |  | (10      | )
|           
|10.12       |  | Loan Agreement for IMPCO Technologies, B.V. as borrower, and Bank of America
National Trust and Savings Association, acting through its Amsterdam branch, as lender, dated as of April 27, 1998. |  | (10      | )
|           
|10.13       |  | Loan Agreement dated September 11, 1998 between Bank of America National Trust and
Savings Association, as lender, and IMPCO Technologies, Inc., as the borrower.                                |  | (11      | )
|           
|10.14       |  | Intentionally Omitted.                                                                                                                                                                           |  |          |  
|           
|10.15       |  | Loan Agreement between IMPCO Tech Japan KK, as borrower, and, Hongkong and Shanghai
Banking Corporation Ltd., Osaka Branch., as lender, dated as of March 29, 1999.                              |  | (13      | )
|           
|10.16+      |  | Employment Agreement dated April 1, 1999, between IMPCO Technologies, Inc., as the
Company, and Robert M. Stemmler, as the Employee.                                                             |  | (13      | )





---

|Exhibit No. |  | Description                                                                                                                                                               |  | Note No. |  
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------- | -
|10.17       |  | Amended Loan Agreement between IMPCO Technologies, Inc., as borrower and Bank of
America N.A. as lender, dated September 13, 1999.                                        |  | (14      | )
|           
|10.18       |  | Intentionally Omitted.                                                                                                                                                    |  |          |  
|           
|10.19       |  | Amendment No. 3 to Business Loan Agreement by and between Bank of America, N.A. and
IMPCO Technologies, Inc. dated as of June 13, 2000.                                   |  | (15      | )
|           
|10.20       |  | Lease dated as of March 31, 2000, by and between Braden Court Associates and IMPCO
Technologies, Inc.                                                                     |  | (16      | )
|           
|10.21       |  | Amendment No. 4 to Business Loan Agreement by and between Bank of America, N.A. and
IMPCO Technologies, Inc. dated as of September 12, 2000.                              |  | (18      | )
|           
|10.22       |  | Amendment No. 5 to Business Loan Agreement between Bank of America, N.A. and IMPCO
Technologies, Inc. dated as of December 13, 2000.                                      |  | (18      | )
|           
|10.23       |  | Amendment No. 6 to Business Loan Agreement between Bank of America, N.A. and IMPCO
Technologies, Inc. dated as of March 12, 2001.                                         |  | (19      | )
|           
|10.24       |  | Promissory Note Issued by Robert Stemmler to Registrant dated March 15,
2001.                                                                                             |  | (17      | )
|           
|10.25       |  | Promissory Note Issued by Dale Rasmussen to Registrant dated March 15,
2001.                                                                                              |  | (17      | )
|           
|10.26       |  | Promissory Note Issued by Syed Hussain to Registrant dated March 15,
2001.                                                                                                |  | (17      | )
|           
|10.27       |  | Security Agreement and Agreement Not to Exercise Options entered into between Robert
Stemmler and Registrant dated March 15, 2001.                                        |  | (17      | )
|           
|10.28       |  | Security Agreement and Agreement Not to Exercise Options entered into between Dale
Rasmussen and Registrant dated March 15, 2001.                                         |  | (17      | )
|           
|10.29       |  | Security Agreement and Agreement Not to Exercise Options entered into between Syed
Hussain and Registrant dated March 15, 2001.                                           |  | (17      | )
|           
|10.30       |  | Deed of Trust Executed by Dale Rasmussen regarding personal
residence.                                                                                                    |  | (17      | )
|           
|10.31      |  | Corporate Alliance Agreement dated June 12, 2001 between Quantum Technologies
Worldwide, Inc. and General Motors Corporation.                                             |  | (21      | )
|           
|10.32       |  | Master Technical Agreement dated June 12, 2001 between Quantum Technologies
Worldwide, Inc. and General Motors Corporation.                                               |  | (21      | )
|           
|10.33       |  | Stock Transfer Agreement dated June 12, 2001 between Quantum Technologies Worldwide,
Inc. and General Motors Corporation.                                                 |  | (21      | )
|           
|10.34       |  | Registration Rights Agreement dated June 12, 2001 between Quantum Technologies
Worldwide, Inc. and General Motors Corporation.                                            |  | (21      | )
|           
|10.35       |  | Amended and Restated Business Loan Agreement dated as of April 30, 2001 among the
Registrant, Quantum Technologies, Inc. and Bank of America, N.A.                        |  | (28      | )
|           
|10.36+      |  | 2000 Incentive Stock Option Plan.                                                                                                                                         |  | (20      | )
|           
|10.37       |  | IMPCO and GM Teaming Agreement dated July 30, 1997 by the Registrant and General
Motors Corporation.                                                                      |  | (22      | )
|           
|10.38       |  | Amendment No. 1 to Amended and Related Business Loan Agreement, dated as of
September 5, 2001, among Bank of America, N.A., the Registrant and Quantum Technologies, Inc. |  | (23      | )
|           
|10.39       |  | Amendment No. 2 to Amended and Restated Business Loan Agreement, dated as of October
8, 2001, among Bank of America, N.A., the Registrant and Quantum Technologies, Inc.  |  | (24      | )





---

|Exhibit No. |  | Description                                                                                                                                                                                       |  | Note No. |  
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------- | -
|10.40       |  | Amendment No. 3 to Amended and Restated Business Loan Agreement, dated as of
November 9, 2001, among Bank of America, N.A., the Registrant and Quantum Technologies, Inc.                         |  | (24      | )
|           
|10.41       |  | Amendment No. 4 to Amended and Restated Business Loan Agreement, dated as of
December 12, 2001, among Bank of America, N.A., the Registrant and Quantum Technologies, Inc.                        |  | (24      | )
|           
|10.42       |  | Common Stock and Warrants Purchase Agreement, dated January 11,
2002.                                                                                                                             |  | (25      | )
|           
|10.43       |  | Registration Rights Agreement, Dated January 11, 2002.                                                                                                                                            |  | (25      | )
|           
|10.44       |  | Form of Stock Purchase Warrant, Dated January 11, 2002.                                                                                                                                           |  | (25      | )
|           
|10.45       |  | Amendment No. 5 to Amended and Restated Business Loan Agreement, dated as of
January, 2002, among Bank of America, N.A., the Registrant and Quantum Technologies, Inc.                            |  | (26      | )
|           
|10.46       |  | Amendment No. 6 to Amended and Restated Business Loan Agreement, dated as of
January 31, 2002, among Bank of America, N.A., the Registrant and Quantum Technologies, Inc.                         |  | (26      | )
|           
|10.47       |  | Amendment No. 7 to Amended and Restated Business Loan Agreement, dated as of
February 28, 2002, among Bank of America, N.A., the Registrant and Quantum Fuel Systems Technologies Worldwide, Inc. |  | (26      | )
|           
|10.48       |  | Stock Purchase Agreement, dated May 3, 2002.                                                                                                                                                      |  | (27      | )
|           
|10.49       |  | Amendment No. 8 to Amended and Restated Business Loan Agreement, dated as of
March 31, 2002, among Bank of America, N.A., the Registrant and Quantum Fuel Systems Technologies Worldwide, Inc.    |  | (1       | )
|           
|10.50       |  | Amendment No. 9 to Amended and Restated Business Loan Agreement, dated as of
April 30, 2002, among Bank of America, N.A., the Registrant and Quantum Fuel Systems Technologies Worldwide, Inc.    |  | (1       | )
|           
|10.51       |  | Second Amended and Restated Business Loan Agreement, dated June 24, 2002, between
Bank of America, N.A., and the Registrant.                                                                      |  | (1       | )
|           
|10.52       |  | Employment Agreement dated April 1, 2002, between the Registrant and Robert M.
Stemmler.                                                                                                          |  | (1       | )
|           
|10.53       |  | Employment Agreement dated April 1, 2002, between the Registrant and W. Brian
Olson.                                                                                                              |  | (1       | )
|           
|10.54       |  | Employment Agreement dated April 1, 2002, between the Registrant and Dale L.
Rasmussen.                                                                                                           |  | (1       | )
|           
|10.55       |  | Contribution and Distribution Agreement between the Registrant and Quantum Fuel
Systems Technologies Worldwide, Inc., dated July 23, 2002.                                                        |  | (29      | )
|           
|10.56       |  | Tax Allocation and Indemnification Agreement between the Registrant and Quantum Fuel
Systems Technologies Worldwide Inc., dated July 23, 2002.                                                    |  | (29      | )
|           
|10.57       |  | Transition Services Agreement between the Registrant and Quantum Fuel Systems
Technologies Worldwide, Inc., dated July 23, 2002.                                                                  |  | (29      | )
|           
|10.58       |  | Employee Benefit Matters Agreement between the Registrant and Quantum Fuel Systems
Technologies Worldwide, Inc., dated July 23, 2002.                                                             |  | (29      | )
|           
|10.59       |  | Lease dated July 18, 2001 by and between Property Reserve, Inc. and the
Registrant.                                                                                                               |  | (1       | )





---

|Exhibit No. |  | Description                                                                  |  | Note No. |  
|----------- |  | ---------------------------------------------------------------------------- |  | -------- | -
|21.1        |  | Subsidiaries of the Company.                                                 |  | (1       | )
|           
|23.1        |  | Consent of Ernst & Young LLP.                                                |  | (1       | )
|           
|99.1        |  | Certification of Chief Executive Officer pursuant to 18 U.S.C.
§1350.        |  | (1       | )
|           
|99.2        |  | Certification of Acting Chief Financial Officer pursuant to 18 U.S.C.
§1350. |  | (1       | )

---

|(1) |  | Filed herewith.
|--- |  | ---------------

|(2) |  | Intentionally omitted.
|--- |  | ----------------------

|(3) |  | Incorporated by reference to the Registrants Form 10-K for fiscal year 1989.
|--- |  | -----------------------------------------------------------------------------

|(4) |  | Incorporated by reference to the Registrants Form 10-K for fiscal year 1990.
|--- |  | -----------------------------------------------------------------------------

|(5) |  | Incorporated by reference to the Registrants Form 10-K for fiscal year 1992.
|--- |  | -----------------------------------------------------------------------------

|(6) |  | Incorporated by reference to the Registrants Form 10-K for fiscal year 1993.
|--- |  | -----------------------------------------------------------------------------

|(7) |  | Incorporated by reference to the Registrants Form 10-K for fiscal year 1994.
|--- |  | -----------------------------------------------------------------------------

|(8) |  | Incorporated by reference to the Registrants Form 8-K/A dated July 1, 1996.
|--- |  | ----------------------------------------------------------------------------

|(9) |  | Incorporated by reference to the Registrants Form 10-K for fiscal year 1997.
|--- |  | -----------------------------------------------------------------------------

|(10) |  | Incorporated by reference to the Registrants Proxy Statement for fiscal year 1997.
|---- |  | -----------------------------------------------------------------------------------

|(11) |  | Incorporated by reference to the Registrants Form 10-K for fiscal year 1998.
|---- |  | -----------------------------------------------------------------------------

|(12) |  | Incorporated by reference to the Registrants Form 10-Q for the period ended October 31, 1998.
|---- |  | ----------------------------------------------------------------------------------------------

|(13) |  | Incorporated by reference to the Registrants Form 8-K dated June 30, 1999.
|---- |  | ---------------------------------------------------------------------------

|(14) |  | Incorporated by reference to the Registrants Form 10-K for fiscal year 1999.
|---- |  | -----------------------------------------------------------------------------

|(15) |  | Incorporated by reference to the Registrants Form 10-Q for the period ended December 7, 1999.
|---- |  | ----------------------------------------------------------------------------------------------

|(16) |  | Incorporated by reference to the Registrants Form S-3/A (File No. 333-34366), filed with the Commission on June 14, 2000.
|---- |  | --------------------------------------------------------------------------------------------------------------------------

|(17) |  | Incorporated by reference to the Registrants Form 10-K for fiscal year 2000.
|---- |  | -----------------------------------------------------------------------------

|(18) |  | Incorporated by reference to the Registrants Form 8-K dated March 26, 2001.
|---- |  | ----------------------------------------------------------------------------

|(19) |  | Incorporated by reference to the Registrants Form 10-Q for the period ended October 31, 2000.
|---- |  | ----------------------------------------------------------------------------------------------

|(20) |  | Incorporated by reference to the Registrants Form 10-Q for the period ended January 31, 2001.
|---- |  | ----------------------------------------------------------------------------------------------

|(21) |  | Incorporated by reference to the Registrants Proxy Statement for fiscal year 2000.
|---- |  | -----------------------------------------------------------------------------------

|(22) |  | Incorporated by reference to the Registrants Form S-3/A (File No. 333-63726), filed with the Commission on July 9, 2001.
|---- |  | -------------------------------------------------------------------------------------------------------------------------

|(23) |  | Incorporated by reference to the Registrants Form S-3 (File No. 333-34366), filed with the Commission on April 7, 2000.
|---- |  | ------------------------------------------------------------------------------------------------------------------------

|(24) |  | Incorporated by reference to the Registrants Form 10-Q for the period ended July 31, 2001.
|---- |  | -------------------------------------------------------------------------------------------

|(25) |  | Incorporated by reference to the Registrants Form 10-Q for the period ended October 31, 2001.
|---- |  | ----------------------------------------------------------------------------------------------

|(26) |  | Incorporated by reference to the Registrants Form 8-K filed on January 11, 2002.
|---- |  | ---------------------------------------------------------------------------------

|(27) |  | Incorporated by reference to the Registrants Form 10-Q for the period ended January 31, 2001.
|---- |  | ----------------------------------------------------------------------------------------------

|(28) |  | Incorporated by reference to the Registrants Form 8-K filed on May 10, 2002.
|---- |  | -----------------------------------------------------------------------------

|(29) |  | Incorporated by reference to the Registrants Form 10-K for fiscal year 2001.
|---- |  | -----------------------------------------------------------------------------

|(30) |  | Incorporated by reference to the Form 10-K filed by Quantum Fuel Systems Technologies, Inc., for fiscal year 2002.
|---- |  | ------------------------------------------------------------------------------------------------------------------

|+ |  | Management contract or compensatory plan or arrangement.
|- |  | --------------------------------------------------------

| |  | Certain information in this exhibit has been omitted and filed separately with The Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------