SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Mark One
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 2000
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from: _____________ to ________________
Commission File Number: 0-25411
EVERCEL, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 06-1528142
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Identification Number)
Organization)
2 LEE MAC AVENUE
DANBURY, CONNECTICUT 06810
(203) 825-3900
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
------------------------------
ROBERT L. KANODE, PRESIDENT AND CHIEF EXECUTIVE OFFICER
EVERCEL, INC.
2 LEE MAC AVENUE
DANBURY, CONNECTICUT 06810
(203) 825-3900
(Name, Address Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value per share
(Title of class)
Indicate by check mark whether the registrant (1) has filed all documents and
reports required to be filed by Section 13 or 15(d) of 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 [ ]
The number of shares outstanding of the Registrant's Common Stock, par value
$.01 as of July 25, 2000 was 7,124,338.
1
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EVERCEL, INC.
FORM 10-Q
INDEX
PART 1 - FINANCIAL INFORMATION
Item 1. Unaudited Condensed Financial Statements
Condensed Balance Sheets as of
June 30, 2000 and December 31, 1999
Condensed Statements of Operations for the
three months ended June 30, 2000 and June 30, 1999
Condensed Statements of Operations
for the six months ended June 30, 2000
and June 30, 1999
Condensed Statements of Cash Flows for the
six months ended June 30, 2000 and June 30, 1999
Notes to Unaudited Condensed
Financial Statements
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About
Market Risk
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Signatures
2
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EVERCEL, INC.
CONDENSED BALANCE SHEETS
(Dollars in thousands, except share and per share amounts)
(Unaudited)
JUNE 30, DECEMBER 31,
ASSETS 2000 1999
------- ----------------------------
Current assets:
Cash and cash equivalents $ 15,168 $ 6,117
Accounts receivable 24 193
Inventories 297 159
Other current assets 225 35
---------- ----------
Total current assets 15,714 6,504
Property, plant and equipment, net 1,990 1,703
Other assets, including deposits on new
equipment, net 2,587 603
---------- ---
TOTAL ASSETS $ 20,291 $ 8,810
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable $ 137 $ 391
Accrued liabilities 779 351
---------- ----------
Total current liabilities 916 742
Long term-debt:
Long-term obligations under capital leases 17 -
---------- ----------
Total liabilities 933 742
Shareholders' equity:
Preferred Stock ($0.01 par value); 1,000,000
shares authorized: 264,000 issued and
outstanding at June 30, 2000 and December
31, 1999 (with cumulative dividends at 8%). 3 3
Common Stock ($0.01 par value); 10,000,000
shares authorized: 7,124,338 and 5,722,090
issued and outstanding at June 30, 2000 and
December 31, 1999, respectively. 71 57
Additional paid-in-capital 29,778 14,084
Note receivable from shareholder (300) (300)
Accumulated deficit (10,194) (5,776)
----------- -----------
Total shareholders' equity 19,358 8,068
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 20,291 $ 8,810
=========== ==========
See notes to condensed financial statements.
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EVERCEL, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
THREE MONTHS ENDED
---------------------------------
JUNE 30, JUNE 30,
2000 1999
------------------ --------------
Revenues $ 59 $ -
Cost and expenses:
Cost of revenues 240 -
Administrative and selling expenses 1,753 765
Research and development 1,018 722
---------- ----------
Total operating costs and expenses 3,011 1,487
---------- ----------
Loss from operations (2,952) (1,487)
Interest income, net 171 53
License fee income 572 -
Losses of unconsolidated affiliate (43) -
Other income (expense) (99) (1)
------------ ----------
Loss before income taxes (2,351) (1,435)
Income tax expense 88 -
----------- ----------
Net loss (2,439) (1,435)
Preferred stock dividends (132) -
---------- ----------
Net loss - common shareholders $ (2,571) $ (1,435)
========== ==========
Basic and diluted loss per share $ (0.41) $ (0.26)
========== ==========
Basic and diluted shares outstanding 6,254 5,528
========== ==========
See notes to condensed financial statements.
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EVERCEL, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Dollars in thousands, except share and per share amounts)
(Unaudited)
SIX MONTHS ENDED
---------------------------------
JUNE 30, JUNE 30,
2000 1999
------------------ --------------
Revenues $ 64 $ -
Cost and expenses:
Cost of revenues 245 -
Administrative and selling expenses 3,116 1,230
Research and development 1,697 1,234
---------- ----------
Total operating costs and expenses 5,058 2,464
---------- ----------
Loss from operations (4,994) (2,464)
Interest income, net 234 38
License fee income 572 -
Losses of unconsolidated affiliate (43) -
Other income (expense) (99) (1)
---------- ----------
Loss before income taxes (4,330) (2,427)
Income tax expense (benefit) 88 (111)
----------- ----------
Net loss (4,418) (2,316)
Preferred stock dividends (264) -
---------- ----------
Net loss - common shareholders $ (4,682) $ (2,316)
========== ==========
Basic and diluted loss per share $ (0.78) $ (0.58)
========== ==========
Basic and diluted shares outstanding 6,028 3,993
========== =====
See notes to condensed financial statements.
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EVERCEL, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
------------------------------------
JUNE 30, JUNE 30,
2000 1999
----------------- -----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (4,418) $ (2,316)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization 185 62
(Increase) decrease in operating assets:
Accounts receivable 169 13
Inventories (138) (157)
Other current assets (190) -
Increase (decrease) in operating liabilities:
Accounts payable (254) (43)
Accrued liabilities 319 326
Other, net 83 254
----------- -----------
Net cash used in operating activities (4,244) (1,861)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (2,367) (849)
Investment in subsidiaries (155) -
------------- -----------
Net cash used in investing activities (2,522) (849)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings from FuelCell - (821)
Preferred stock dividends paid (155) -
Proceeds from common stock issued 15,972 7,729
Contributions from FuelCell - (340)
----------- ------------
Net cash provided by financing activities 15,817 3,858
----------- -----------
Net decrease (increase) in cash and cash equivalents 9,051 3,784
Cash and cash equivalents - beginning of period 6,117 1
----------- -----------
Cash and cash equivalents - end of period $ 15,168 $ 3,859
=========== ===========
CASH PAID DURING THE PERIOD FOR:
Income taxes $ 88 $ -
</TABLE>
See notes to condensed financial statements.
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EVERCEL, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(1) BASIS OF PRESENTATION
On October 6, 1999, the Board of Directors voted to change the fiscal year end
of Evercel, Inc. (the "Company") from October 31 to December 31. The
accompanying financial statements represent the financial position of the
Company as of June 30, 2000 and 1999, and the results of operations of the
Company for the three months ended June 30, 2000 and the period from February
22, 1999 to June 30, 1999 and the results of operations of the Battery Group of
FuelCell Energy, Inc. ("FuelCell") for the period from January 1, 1999 through
February 21, 1999.
Comparative amounts for the three and six months ended June 30 are unaudited. In
the opinion of management, the information presented in the unaudited three and
six month statements reflects all adjustments necessary for a fair presentation
of the Company's results of operations for those periods.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF BUSINESS
The Company is engaged in the design and manufacture of innovative, patented
nickel-zinc rechargeable batteries, as well as the research and design of other
advanced battery technologies. The Company believes the nickel-zinc battery has
commercial applications in markets requiring long cycle life, light weight and
relative cost efficiency.
SPIN-OFF FROM FUELCELL ENERGY, JOINT VENTURES AND LICENSE AGREEMENTS
On February 22, 1999, FuelCell effected a spin-off of the Company by
deconsolidating the financial statements of the Company and a Joint Venture from
its consolidated financial statements. As part of the spin-off of the Company,
FuelCell transferred capital assets (net), prepaid spin-off costs, accounts
receivable and short-term liabilities amounting to $1,228,000, $501,000, $36,000
and $1,096,000, respectively. FuelCell distributed to its shareholders in a
tax-free distribution one share of Evercel common stock for every three shares
of common stock of FuelCell held on the record date of February 22, 1999. On
April 5, 1999, the Company completed a rights offering of its shares at $3.00
per share and began trading.
In February 1998, FuelCell entered into the Nan Ya License Agreement with a
joint venture between Nan Ya Plastics Corporation of Taiwan, a Formosa Plastics
Group company, and Xiamen Three Circles Co., Ltd. of Xiamen, China for the use
of the Company's nickel-zinc batteries in electric and hybrid electric vehicles
in China, Taiwan, Hong Kong and Macao on an exclusive basis and for certain
other Southeast Asian countries on a non-exclusive basis. The license agreement
calls for the payment of $5.0 million in three stages and a royalty for the
exclusive and non-exclusive territories. The payments include $1.5 million
received by FuelCell in 1998, of which $1.3 million and $0.2 million,
respectively were recorded on FuelCell's financial statements in 1999 and 1998.
A further $2.0 million was to be paid to the Company based on cycle life testing
that was substantially achieved in December, 1999. Although we believe the
principal milestone conditions have been achieved and we have received $572,000,
we cannot guarantee that we will receive the remaining balance. If the Company
receives the balance of the $2.0 million payment, we may also be entitled to a
final payment of $1.5 million to be paid to the Company upon completion of
duplication of the battery at its facilities in China. The Nan Ya License
Agreement provides that the Company has the right to invest the final payment in
equity in the joint venture manufacturing and sales organization formed between
Nan Ya Plastics and Xiamen Three Circles Co., Ltd.
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In July 1998, FuelCell also entered into a Technology Transfer and License
Contract (the "Three Circles License Agreement") with Xiamen Three Circles-ERC
Battery Corp., Ltd. for the use of the Company's nickel-zinc batteries in
electric bicycles, scooters, three-wheel vehicles, off-road vehicles, and
miners' safety lamps in China on an exclusive basis and Southeast Asia on a
non-exclusive basis. The license included an initial payment to FuelCell of $3
million. In connection with the Three Circles License Agreement, FuelCell also
entered into a joint venture agreement with Xiamen Three Circles Co., Ltd., used
this $3.0 million as its initial investment in the joint venture and
subsequently contributed an additional $80,500 to receive a 50.5% share of the
joint venture called Xiamen Three Circle-ERC Battery Corp. (the "Joint
Venture"). Pursuant to the Three Circles License Agreement, the Joint Venture
must also pay the Company certain royalties based upon the net sales of
nickel-zinc batteries sold, leased or transferred in the applicable territories.
In addition the Joint Venture may sub-license the Company's technology to third
parties in China, Hong Kong, Taiwan and Macao on a non-exclusive basis.
In accordance with a License Assistance Agreement entered into between the
Company and FuelCell, the Company has agreed to provide all services and
assistance necessary for it to effectively fulfill, on behalf of FuelCell, all
of FuelCell's obligations under the Joint Venture and the related license
agreement until such time as FuelCell obtains the approval from the Chinese
partner and appropriate Chinese governmental authority for the assignment of
such agreements to the Company. In return for such assistance, FuelCell will pay
to the Company an amount equal to the sum of all money, dividends, profits,
reimbursements, distributions and payments actually paid to FuelCell pursuant to
the Joint Venture contract and related license agreement. The Company would pay
FuelCell all payments made by FuelCell pursuant to the Joint Venture contract
and related license agreement. All expenses and costs incurred by the Company in
meeting the obligations under the License Assistance Agreement shall be solely
those of the Company, and FuelCell shall not be liable for their payment. The
Company accounts for its involvement in the Joint Venture under the License
Assistance Agreement in a manner similar to the equity method of accounting as a
result of the fact that it does not have significant control over the Joint
Venture.
(3) CAPITALIZATION
The Company declared a 100% stock dividend having the effect of a 2-for-1 stock
split payable on March 22, 2000 to shareholders of record on March 7, 2000. All
share and per share data have been adjusted retroactively to give effect to the
stock dividend.
On May 12, 2000 the Company completed a stock offering of 1,250,000 common
shares at $12.50 per share, and on May 22, 2000 the underwriter, Burnham
Securities Inc., exercised an over-allotment option of 141,080 shares resulting
in total net proceeds of $15,940,000.
(4) INVENTORY
Inventories consists of the following:
June 30, December 31,
2000 1999
---- ----
Raw Materials $ 166 $ 123
Work in Progress 131 23
Finished Goods - 13
-------- --------
Total Inventories $ 297 $ 159
======== ========
(5) SUBSEQUENT EVENTS
- On July 13, 2000 Madison Capital Group, USA, LLC, acting as financial
advisor to the participating investors, announced the incorporation of
OXYGEN, S.p.A. in Italy. The Company is an initial investor and will be
the exclusive supplier of batteries to Oxygen, which has been created
to provide transportation solutions in Italy, including non-polluting
electric two-wheeled vehicles and the necessary infrastructure to make
these vehicles feasible and affordable.
- On July 17, 2000 the Company announced that it will locate its North
American manufacturing operation in a 97,600 square foot building in
Newport News, Virginia. The Company will begin installing the first
automated manufacturing line in August and the initial product to come
off this new line will be the Company's trolling motor marine battery
for the North America sport fishing market.
- On July 19, 2000 the Company introduced its Evertroll(R) battery, a
high performance battery made expressly to power electric trolling
motors in fishing boats. The battery was formally unveiled at a press
conference on July 20, 2000, at the International Convention of Allied
Sportfishing Trades (ICAST) 2000 & BASS Masters Classic Outdoor show in
Chicago.
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- On July 19, 2000 at the Company's Annual Meeting, the Company's
shareholders approved an increase in the number of common shares
authorized from 10 million to 30 million and expanded the 1998 Equity
Incentive Plan from 600,000 to 1,300,000 shares.
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EVERCEL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
This report contains forward looking statements, including statements
regarding the Company's plans and expectations regarding the development and
commercialization of its nickel-zinc battery technology. When used in this
Report, the words "expects", "anticipates", "estimates", "should", "will",
"could", "would", "may", and similar expressions are intended to identify
forward-looking statements. All forward-looking statements are subject to risks
and uncertainties that could cause actual results to differ materially from
those projected. Factors that could cause such a difference include, without
limitation, the risk that cost reduction in the manufacturing process will not
be achieved to the extent necessary to facilitate commercialization, the risk
that the company will not initiate commercial sales as currently scheduled, the
risk that the Company's manufacturing capacity will not be increased as planned,
general risks associated with product development, manufacturing and
introduction, rapid technological changes and competition as well as other risks
set forth in the Company's filings with the Securities and Exchange Commission.
The forward-looking statements contained herein speak only as of the date of
this Report. The Company expressly disclaims any obligation or undertaking to
release publicly any updates or revisions to any such statement to reflect any
change in the Company's expectations or any change in events, conditions or
circumstances on which any such statement is based.
OVERVIEW
We develop, design and have begun to manufacture high-performance
rechargeable batteries. To date, our operations have mainly consisted of
research and development activities with commercial and manufacturing operations
continuing to accelerate in year 2000. We recognize revenue on the date our
products are shipped. To date, revenues have primarily resulted from shipment of
sample products to potential customers.
FuelCell Energy, Inc. ("FuelCell") has licensed the rights to
manufacture scooter batteries through the Joint Venture. Under our license
assistance agreement with FuelCell, we have assumed the rights, benefits and
obligations of Fuel Cell's 50.5% ownership of the Joint Venture. We will account
for our involvement in the Joint Venture under the License Assistance Agreement
using the equity method of accounting, in which we record our share of earnings
or losses from the Joint Venture in our statement of operations.
On February 16, 1999, FuelCell transferred the principal assets,
intellectual property and liabilities related to its battery business group to
us. On February 22, 1999, FuelCell distributed to its shareholders shares of our
common stock in a tax-free distribution.We continue to pay FuelCell for certain
administrative services in accordance with a services agreement. Results shown
before the period of the spin-off reflect our activity as the Battery Group of
FuelCell.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 2000 COMPARED WITH THREE MONTHS ENDED JUNE 30, 1999
We had revenues of $59,000 for the three months ended June 30, 2000
compared to none for the three months ended June 30, 1999. The revenues in the
2000 period were due to consumer samples sold in our efforts to commercialize
our nickel-zinc batteries. Cost of revenues of $240,000 for the three months
ended June 30, 2000 represent the costs to produce the sample batteries, which
approximates revenues, as well as a charge to adjust inventory to net realizable
value. There were no cost of revenues for the same period in 1999.
Administrative and selling expenses increased 129% to $1,753,000 for
the three months ended June 30, 2000 from $765,000 for the three months ended
June 30, 1999. The increase is the result of staffing administrative functions
during the latter half of 1999, including executive, finance, human resources,
sales and marketing, the legal and financial costs of being an independent
publicly traded company, and selling, marketing and administrative activities to
prepare us for commercialization of our nickel-zinc battery technology.
Research and development expenses increased 41% to $1,018,000 for three
months ended June 30, 2000 from $722,000 for the three months ended June 30,
1999 due to product development activity relating to the commercialization of
our battery technology.
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Net interest income of $171,000 for the three months ended June 30,
2000 increased from $53,000 for three months ended June 30, 1999 due to interest
income on funds received from the May 2000 public offering versus the funds
received from the April 1999 rights offering. License fee income of $572,000 was
received in the three months ended June 30, 2000 related to the Nan Ya license
agreement. Our share of the Joint Venture losses in the quarter ended June 30,
2000 was $43,000. We recognized a tax expense of $88,000 in the three months
ended June 30, 2000 for taxes on the license fee payment and have not recorded
the tax benefit of operating losses in the three months ended June 30, 2000 or
1999 pursuant to Financial Accounting Standard No.109, "Accounting for Income
Taxes."
SIX MONTHS ENDED JUNE 30, 2000 COMPARED WITH SIX MONTHS ENDED JUNE 30, 1999
We had revenues of $64,000 for the six months ended June 30, 2000
compared to none for the six months ended June 30, 1999. The revenues in the
2000 period were due to consumer samples sold in our efforts to commercialize
our nickel-zinc batteries. Cost of revenues of $245,000 for the six months ended
June 30, 2000 represents the costs to produce the sample batteries, which
approximate revenues, as well as a charge to adjust inventory to net realizable
value. There were no cost of revenues for the same period in 1999.
Administrative and selling expenses increased 153% to $3,116,000 for
the six months ended June 30, 2000 from $1,230,000 for the six months ended June
30, 1999. The increase is the result of staffing administrative functions during
the latter half of 1999, including executive, finance, human resources, sales
and marketing, the legal and financial costs of being an independent publicly
traded company, and selling, marketing and administrative activities to prepare
us for commercialization of our nickel-zinc battery technology.
Research and development expenses increased 38% to $1,697,000 for six
months ended June 30, 2000 from $1,234,000 for the six months ended June 30,
1999 due to product development activity relating to the commercialization of
our battery technology.
Net interest income of $234,000 for the six months ended June 30, 2000
increased from $38,000 for the six months ended June 30, 1999 due to interest
income on funds received from the May 2000 public offering versus the funds
received from the April 1999 rights offering and interest paid to FuelCell
Energy in 1999 on short-term borrowings. License fee income of $572,000 was
received in the six months ended June 30, 2000 related to the Nan Ya license
agreement. Our share of the Joint Venture losses in the six months ended June
30, 2000 was $43,000. We recognized a tax expense of $88,000 on the license fee
payment in the six months ended June 30, 2000 and a tax benefit of $111,000 in
the six months ended June 30, 1999 due to our inclusion in the consolidated tax
return of FuelCell from January 1, 1999 through February 21, 1999. We have not
recorded the tax benefit of operating losses in the six months ended June 30,
2000 or the period from February 22, 1999 through June 30, 1999 pursuant to
Financial Accounting Standard No. 109, "Accounting for Income Taxes."
LIQUIDITY AND CAPITAL RESOURCES
We have funded our operations primarily through cash generated from
sales of equity. On May 12, 2000 we concluded a stock offering of 1.25 million
shares of our common stock and on May 22, 2000 our underwriter, Burnham
Securities Inc., exercised an over-allotment option of 141,080 shares resulting
in total net proceeds of $15,940,000.
At June 30, 2000 we had working capital of $14,798,000, including cash
and cash equivalents of $15,168,000, compared to working capital of $5,762,000,
including cash and cash equivalents of $6,117,000 at December 31, 1999. In
compliance with the terms of the Newport News, Virginia lease signed July 10,
2000 with Oakland Investors, L.C., we have designated a $1,000,000 letter of
credit as a form of rent security which will restrict our use of cash and cash
equivalents by the same amount.
Preferred stock dividends accrued on the Series A Preferred Stock
issued in December 1999 were $132,000 and $264,000 in the three and six months
ended June 30, 2000, respectively. Dividend payments for the quarter ended March
31, 2000 and the period December 16 to December 31, 1999 totaling $155,000 were
made on approximately April 15, 2000. As part of the December 1999 preferred
offering, investors and the underwriter, Burnham Securities Inc., were issued
warrants to purchase our common stock. If our common stock reaches certain price
levels on or subsequent to December 16, 2000, we may choose to redeem the
warrants. If all the warrants were exercised, we would receive $5.0 million in
gross proceeds.
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Our capital expenditures are incurred primarily to support the expected
commencement of full scale production. Capital expenditures were $877,000 and
$2,367,000 for the three and six month periods ended June 30, 2000.
We anticipate that our existing capital resources, including those
mentioned above, together with anticipated revenues will be adequate to satisfy
existing financial requirements and agreements for at least the next twelve
months.
ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our exposure to market risk for changes in interest rates relates primarily to
our investment portfolio. The investment portfolio includes money market
accounts in U.S. financial institutions. Cash is invested overnight with high
credit quality financial institutions. Based on the Company's overall interest
exposure, including all interest rate sensitive instruments, a near-term change
in interest rate movements would not materially affect the results of operations
or financial position of the Company.
PART II - OTHER INFORMATION
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
27 Financial Data Schedule
(B) REPORTS ON FORM 8-K
None
SIGNATURES
In accordance with the requirements of the Securities Exchange of 1934,
the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
EVERCEL, INC.
(Registrant)
By:/s/ Robert L. Kanode
--------------------
Date: August 14, 2000 Name: Robert L. Kanode
Title: President and Chief Executive
Officer
12
