<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For The Quarterly Period Ended September 30, 1999
[ ] Transition report under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from ____________ to ____________
Commission file number 1-10446
LITHIUM TECHNOLOGY CORPORATION
(Exact Name of Small Business Issuer as Specified in Its Charter)
DELAWARE 13-3411148
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
5115 CAMPUS DRIVE, PLYMOUTH MEETING, PA 19462
(Address of Principal Executive Offices)
(610) 940-6090
(Issuer's Telephone Number, Including Area Code)
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
--- ---
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
Yes No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of September 30, 1999: 48,025,546
shares of Common Stock
Transitional Small Business Disclosure Format (check one):
Yes No X
--- ---
<PAGE> 2
LITHIUM TECHNOLOGY CORPORATION AND SUBSIDIARY
FORM 10-QSB
FOR THE QUARTER ENDED SEPTEMBER 30, 1999
INDEX
PAGE
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets - September 30, 1999 (Unaudited)
and December 31, 1998 3
Consolidated Statements of Operations - Three Months and Nine Months
Ended September 30, 1999 and 1998, and Period From
July 21, 1989 (Date of Inception) to September 30, 1999
(Unaudited) 4
Consolidated Statements of Changes in Stockholders'
Equity - Nine Months Ended September 30, 1999
(Unaudited) 5
Consolidated Statements of Cash Flows - Nine Months Ended
September 30, 1999 and 1998, and Period from
July 21, 1989 (Date of Inception) to September 30, 1999
(Unaudited) 6
Notes to Consolidated Financial Statements - Nine Months
Ended September 30, 1999 (Unaudited) 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 10
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 17
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 17
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 17
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 17
ITEM 5. OTHER INFORMATION 17
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 17
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<PAGE> 3
PART I - FINANCIAL INFORMATION
LITHIUM TECHNOLOGY CORPORATION AND SUBSIDIARY
(DEVELOPMENT STAGE COMPANIES)
CONSOLIDATED BALANCE SHEETS
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
September 30 December 31,
1999 1998
---- ----
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 221,000 $ 1,073,000
Accounts receivable 11,000 77,000
Other current assets 9,000 17,000
------------ ------------
Total Current Assets 241,000 1,167,000
------------ ------------
PROPERTY AND EQUIPMENT, LESS ACCUMULATED DEPRECIATION
OF $970,000 AND $799,000 292,000 463,000
OTHER ASSETS:
Debt issue costs, less accumulated amortization of
$0 and $187,000 -- 496,000
Security and equipment deposits 95,000 95,000
------------ ------------
95,000 591,000
------------ ------------
Total assets $ 628,000 $ 2,221,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
CURRENT LIABILITIES:
Accounts payable $ 420,000 $ 213,000
Accrued salaries 350,000 212,000
Other accrued expenses 100,000 229,000
------------ ------------
Total current liabilities 870,000 654,000
------------ ------------
LONG-TERM LIABILITIES:
Senior Secured Convertible Notes, due July 1, 2002 -- 5,500,000
------------ ------------
Total liabilities 870,000 6,154,000
------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIENCY):
Common stock, par value $.01 per share:
Authorized - 50,000,000 shares
Issued and outstanding - 48,025,546 and 23,052,185 shares 480,000 231,000
Additional paid-in capital 44,449,000 39,003,000
Accumulated deficit (6,865,000) (6,865,000)
Deficit accumulated during development stage (38,306,000) (36,302,000)
------------ ------------
Total stockholders' equity (deficiency) (242,000) (3,933,000)
------------ ------------
$ 628,000 $ 2,221,000
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
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<PAGE> 4
LITHIUM TECHNOLOGY CORPORATION
AND SUBSIDIARY
(DEVELOPMENT STAGE COMPANIES)
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Period From
July 31, 1989
(Date of
Three Months Ended Nine Months Ended Inception) to
September 30, September 30, September 30,
---------------------------- ---------------------------- --------------
1999 1998 1999 1998 1999
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
REVENUES:
<S> <C> <C> <C> <C> <C>
Development contracts $ 5,000 $ 32,000 $ 49,000 $ 54,000 $ 148,000
------------ ------------ ------------ ------------ ------------
COSTS AND EXPENSES:
Engineering, research and development 312,000 537,000 1,019,000 1,397,000 8,030,000
General and Administrative 313,000 414,000 1,023,000 1,351,000 11,406,000
------------ ------------ ------------ ------------ ------------
625,000 951,000 2,042,000 2,748,000 19,436,000
------------ ------------ ------------ ------------ ------------
OTHER INCOME (EXPENSE):
Interest expense, net of interest income 3,000 (89,000) (11,000) (240,000) (1,827,000)
Interest expense related to beneficial
conversion feature -- -- -- -- (17,841,000)
Other non-operating income -- -- -- 650,000 650,000
------------ ------------ ------------ ------------ ------------
3,000 (89,000) (11,000) 410,000 (19,018,000)
------------ ------------ ------------ ------------ ------------
NET LOSS $ (617,000) $ (1,008,000) $ (2,004,000) $ (2,284,000) $(38,306,000)
============ ============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING: 46,507,000 21,240,000 42,761,000 21,116,000
============ ============ ============ ============
BASIC AND DILUTED NET LOSS PER SHARE: $ (.01) $ (.05) $ (.05) $ (.11)
============ ============ ============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
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LITHIUM TECHNOLOGY CORPORATION
AND SUBSIDIARY
(DEVELOPMENT STAGE COMPANIES)
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(DEFICIENCY) - (UNAUDITED)
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Additional During
---------------------- Paid- Accumulated Development
Shares Amount In Capital Deficit Stage
------ ------ ---------- ------- -----
<S> <C> <C> <C> <C> <C>
BALANCES AT DECEMBER 31, 1998 23,052,185 $ 231,000 $ 39,003,000 $ (6,865,000) $(36,302,000)
NINE MONTHS ENDED SEPTEMBER 30, 1999:
Issuance of Common Stock:
Upon conversion of the Senior
Secured Convertible Notes 19,642,857 196,000 4,816,000 -- --
In lieu of interest 562,647 6,000 152,000
In payment of accounts payable 267,857 2,000 73,000
For cash 4,500,000 45,000 405,000 -- --
Net loss -- -- -- -- (2,004,000)
------------ ------------ ------------ ------------ ------------
BALANCES AT SEPTEMBER 30, 1999 48,025,546 $ 480,000 $ 44,449,000 $ (6,865,000) $(38,306,000)
============ ============ ============ ============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
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<PAGE> 6
LITHIUM TECHNOLOGY CORPORATION
AND SUBSIDIARY
(DEVELOPMENT STAGE COMPANIES)
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended Period From
September 30, July 21, 1989
(Date of Inception)
September 30, 1999
1999 1998
---- ----
<S> <C> <C> <C>
(Unaudited) (Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss (2,004,000) $ (2,284,000) $(38,306,000)
Adjustments to reconcile net loss to net cash flows from operating
activities:
Interest expense relating to the beneficial conversion feature of the
Senior Secured Convertible Note -- -- 17,841,000
Depreciation 171,000 149,000 970,000
Amortization of debt issue costs 8,000 107,000 1,070,000
Reduction of accrued expenses -- (270,000) (270,000)
Common stock issued in lieu of interest 158,000 -- 1,914,000
Fair value of warrants and option granted for services rendered -- -- 209,000
Common stock issued for services provided 75,000 -- 281,000
Common stock issued upon settlement of litigation -- 125,000 125,000
Expenses paid by shareholder on behalf of Company -- -- 79,000
Changes in operating assets and liabilities:
Accounts receivable 66,000 -- (11,000)
Other current assets 8,000 (38,000) 7,000
Security and equipment deposits -- (46,000) (95,000)
Accounts payable, accrued expenses and customer deposits 216,000 356,000 2,249,000
Due to related parties -- -- (129,000)
------------ ------------ ------------
Net cash used in operating activities (1,302,000) (1,901,000) (14,066,000)
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment -- (276,000) (1,012,000)
Other -- -- 94,000
------------ ------------ ------------
Net cash provided by (used in) investing activities -- (276,000) (918,000)
------------ ------------ ------------
CASH FLOW FROM FINANCING ACTIVITIES:
Net advance repayable only out of proceeds of public offering -- -- 471,000
Proceeds received upon issuance of common stock 450,000 -- 3,789,000
Proceeds received from issuance of preferred stock, net of related costs -- -- 100,000
Proceeds received upon exercise of options and warrants, net of costs -- 54,000 637,000
Net advances by former principal stockholder -- -- 321,000
Proceeds from sale of convertible debt -- 3,330,000 10,874,000
Debt issue costs -- (51,000) (887,000)
Repayment of convertible debt -- -- (100,000)
------------ ------------ ------------
Net cash provided by financing activities 450,000 3,333,000 15,205,000
------------ ------------ ------------
NET CHANGE IN CASH AND CASH EQUIVALENTS (852,000) 1,156,000 221,000
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 1,073,000 506,000 --
------------ ------------ ------------
CASE AND CASH EQUIVALENTS, END OF PERIOD $ 221,000 $ 1,662,000 $ 221,000
============ ============ ============
</TABLE>
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<PAGE> 7
LITHIUM TECHNOLOGY CORPORATION
AND SUBSIDIARY
(DEVELOPMENT STAGE COMPANIES)
CONSOLIDATED STATEMENTS OF CASH FLOWS -- CONTINUED
<TABLE>
<CAPTION>
Period From
July 21, 1989
Nine Months Ended (Date of
September 30, Inception)
1999 1998 September 30, 1999
---- ---- ------------------
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C>
SUPPLEMENTAL CASH FLOW INFORMATION:
Contribution to capital by former principal stockholder -- -- 3,659,000
Related party debt exchanged for convertible debt -- -- 321,000
Exchange of indebtedness to former principal stockholder for common stock -- -- 445,000
Issuance of common stock for services and accrued salaries -- -- 352,000
Exchange of equipment and accrued rent for common stock -- -- 271,000
Subordinated notes and related accrued interest -- -- 3,300,000
Exchange of convertible debt for convertible preferred stock -- -- 356,000
Conversion of convertible debt and accrued interest into common stock, net of
unamortized debt discount -- -- 4,776,000
Exchange of advances repayable only out of proceeds of public offering for
common stock -- -- 471,000
Deferred offering costs on warrants exercised -- -- 88,000
Issuance of warrants in settlement of litigation for debt issue costs and for
services rendered -- -- 364,000
Common stock issued for costs related to 10% promissory notes -- -- 525,000
</TABLE>
See accompanying notes to consolidated financial statements.
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<PAGE> 8
LITHIUM TECHNOLOGY CORPORATION
AND SUBSIDIARY
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 1999
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting
principles applicable to interim periods. In the opinion of
management, all adjustments (consisting only of normal recurring
accruals) considered necessary for a fair presentation have been
included. These financial statements should be read in conjunction
with the Company's audited financial statements included in the
Company's Annual Report on Form 10-KSB filed with the Securities
and Exchange Commission for the year ended December 31, 1998.
Operating results for the three and nine months ended September
30, 1999 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1999 or any interim
period.
2. DESCRIPTION OF BUSINESS
Lithium Technology Corporation ("LTC") together with its
wholly-owned subsidiary, Lithion Corporation ("Lithion"),
collectively referred to as the "Company", are development stage
companies in the process of commercializing a unique, solid-state,
lithium polymer rechargeable battery. The Company is engaged in
research and development and pilot line manufacturing activities
to further develop and exploit this battery technology and also
holds various patents relating to such batteries. The Company's
commercialization focus is on the rapidly growing portable
electronics market segment (notebook computers and wireless
communications handset devices) and other applications such as the
rapidly emerging Hybrid Electric Vehicle (HEV) market.
3. LIQUIDITY AND CONTINUATION OF BUSINESS
The accompanying consolidated financial statements of the Company
have been prepared on a going concern basis, which contemplates
the continuation of operations, realization of assets and
liquidation of liabilities in the ordinary course of business.
Since its inception, the Company has incurred substantial
operating losses and expects to incur additional operating losses.
The Company had cash of $221,000 at September 30, 1999. The
Company does not expect to generate any significant revenues from
operations during the fiscal year ending December 31, 1999. Since
December 1993, operations have been financed primarily through the
use of proceeds from the sale of convertible debt and private
placements of common and preferred stock. Continuation of the
Company's operations is dependent upon its ability to secure
additional financing. These conditions raise substantial doubt
about the Company's ability to continue as a going concern. The
accompanying consolidated financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.
On September 29, 1999, the Company and Pacific Lithium Limited
("PLL"), an unlisted publicly-held New Zealand corporation, signed
a Memorandum of Agreement (the "MOA") to merge their respective
lithium battery technologies and operations (the "Business
Merger"), and ultimately form a new U.S. corporation. Under the
terms of the Business Merger, the Company's technology, assets and
operations would be transferred to PLL in exchange for the
issuance to the Company of 3 million shares of PLL Class B common
stock (which constitutes approximately 15% of PLL's outstanding
shares) and warrants to purchase 1.5 million additional shares of
PLL stock at $2.50 per share. As additional consideration, PLL
will assume responsibility for all of the Company's operating cash
requirements. Beginning in October 1999 and until shareholder
approval, PLL will provide working capital for the Company. PLL
has agreed to advance a total of U.S. $1,100,000 as follows: (1)
U.S. $125,000 to enable the Company to purchase its packaging
machine on demand of the Company provided PLL is granted a
security interest in the machine; and (2) U.S. $225,000 on October
1 and $250,000 on November 1 and December 1, 1999, and on January
1, 2000 to cover operating expenses, regulatory requirements
(including registration of unregistered shares), creditors and
costs associated with the Business Merger. Through November 1,
1999, PLL has advanced a total of $475,000 to the Company.
Following shareholder approval, and up to the time of the Ilion
IPO (See below), the Company's capital equipment and operating
cash flow requirements will be an integral part of PLL's capital
raising program. Upon completion of the Business Merger, the
Company would become a "shell" holding company whose sole asset
will be the shares and warrants of PLL issued in the Business
Merger. PLL intends to reincorporate in the U.S. as a private
company named Ilion Technology Corporation ("Ilion") and
consummate an initial public offering of Ilion's stock. The
Company's stock would continue to be traded in the OTC market
until the Ilion IPO at which time the common stock and warrants of
PLL owned by the Company would be distributed to the Company's
shareholders.
The consummation of the Business Merger is contingent upon certain
closing conditions being met by the parties including the
execution of definitive agreements, obtainment of applicable
regulatory approvals, and the approval of the Business
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<PAGE> 9
Merger and a definitive agreement by the shareholders and
directors of the Company and PLL. The Company expects the Business
Merger to be closed during the first quarter of 2000, however,
there can be no assurance that the Business Merger will be
consummated.
If the Business Merger is not consummated for any reason (except
the default of PLL) any advances from PLL to the Company will be
converted into the Company's common stock at $0.10 per share, PLL
will be issued warrants to purchase 7.5 million shares of the
Company's common stock exercisable at $0.15 per share, the Company
will grant PLL a non-exclusive world wide license to use the
Company's thin film technology and manufacturing methods and PLL
will have a first option to purchase the Company's technologies
and processes at market value if the Company is sold or enters
bankruptcy proceedings.
If the Company does not consummate the Business Merger, the
Company would access all available alternatives including a sale
of the assets of the Company to another party, the suspension of
operations and possibly liquidation, auction, bankruptcy, or other
measures.
4. PROPERTY AND EQUIPMENT ARE SUMMARIZED AS FOLLOWS:
<TABLE>
<S> <C>
Laboratory equipment $1,122,000
Furniture and office equipment 95,000
Leasehold improvements 45,000
----------
1,262,000
Less: Accumulated depreciation and amortization 970,000
----------
$ 292,000
==========
</TABLE>
5. STOCKHOLDERS' EQUITY
In January 1999, the Company's $5.5 million notes (the "1997
Notes") issued in September 1997 pursuant to a Senior Secured
Convertible Note Purchase Agreement (the "1997 Note Purchase
Agreement") were converted to equity by the lender in accordance
with the original terms of the 1997 Note Purchase Agreement. As a
result of the conversion, the Company issued 19,642,857 shares of
its common stock to convert the 1997 Notes and 562,647 shares of
its common stock to pay accrued interest to the conversion date.
In July and August 1999, the Company raised $450,000 in connection
with the sale of 4,500,000 shares of its restricted common stock
to various private investors including two members of the
Company's Board of Directors.
6. SUBSEQUENT EVENTS
The Company has outstanding 4,590,049 warrants (with exercise
prices ranging from $.51-$4.50) and 4,404,092 options (with
exercise prices ranging from $.28-$1.09). On October 28, 1999, the
Board of Directors has approved a reduction in the exercise price
of the warrants to $.15 for the period of November 1, 1999 -
February 29, 2000 to encourage the holders to exercise the
warrants and provide working capital to the Company.
Effective November 1, 1999, a Special Committee of the Board
approved the exchange of all outstanding stock options for new
options with an exercise price of $.22 and the issuance of
855,000 additional options under the 1999 Plan, exercisable at
$.22. The new options will have the same vesting terms as the
original options and will expire one year earlier than the
expiration of the original options. To facilitate the exchange
of the options, the Board also approved the implementation of a
new stock option plan, the 1999 Stock Incentive Plan, to replace
all of the Company's existing option plans. The 1999 Plan has
substantially the same terms as the existing 1998 Plan other
than the number of shares issuable under the plan. The 1999 Plan
authorizes the issuance of 8 million shares.
Under the MOA (see Note 3), funds raised by the Company from the
exercise of the warrants and options will be used as follows: (1)
the first $350,000 shall be used to repay advances from PLL; and
(2) the balance shall be used to subscribe for additional PLL
shares at $2.25 per share.
On October 28, 1999 the Board of Directors also approved, subject
to stockholder approval, an increase in the number of shares of
common stock authorized for issuance by the Company under the
Certificate of Incorporation from 50 million to 100 million of
authorized common stock.
Effective November 1, 1999, Mr. Thomas R. Thomsen elected to step
down as the Chairman and Chief Executive Officer of the Company
and the Board of Directors elected Mr. David J. Cade Chairman and
Chief Executive Officer of the Company
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<PAGE> 10
and Dr. George Ferment, President, Chief Operating Officer and
Chief Technical Officer of the Company. The Board of Directors
approved the payment of the $365,000 in deferred salary owed to
Mr. Thomsen through November 1, 1999 fifty percent in cash and
fifty percent in Common Stock of the Company at $.2750 per share
(the closing sale price on November 1, 1999). The Board also
approved the acceleration of the vesting of the options owned by
Mr. Thomsen as of November 1, 1999 and the acceleration of the
options owned by Mr. William Walker, the Company's former Chief
Financial Officer who resigned such position in August 1999 but
continues as a part-time consultant for the Company.
The changes in terms of the warrants and options approved by the
Company's Board of Directors noted above may result in expense
charges in the Company's statement of operations. The Company has
not completed the process of evaluating the impact that will
result from these approved changes.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion and analysis should be read in conjunction with the
financial statements and notes thereto appearing elsewhere in this report.
OVERVIEW, PLAN OF OPERATION AND RECENT DEVELOPMENTS
GENERAL
The Company is in the late stages of developing and seeking to commercialize a
new generation of high performance, solid state rechargeable lithium ion polymer
batteries for portable electronics devices and other applications such as the
rapidly emerging Hybrid Electric Vehicle (HEV) market. The Company's pilot line
production operations are regularly producing three generic sizes of thin flat
cells, including a large 9 Ah cell (4"x8"x 1/4"). The Company's patented and
proprietary technology uses high performance fibers in composite battery
structures and low cost continuous flow fiber web coating and handling processes
for manufacturing. These new batteries represent a significant benefit to the
end-user in terms of longer run times and thinner, flatter, lighter-weight form
factors.
Since its inception, the Company has required and continues to require
substantial capital to fund development and production objectives and ongoing
operations. During the first quarter of 1999, the Company was seeking to raise
gross proceeds of $4,000,000 through the private placement of redeemable
convertible preferred stock. The Company received no commitments for such
offering. Thereafter, the Company completed a private placement of restricted
shares of common stock in July and August 1999, the gross proceeds of which was
$450,000.
In addition to seeking to raise equity for its operations and growth, the
Company has explored strategic alternatives as a method to meet the Company's
business and financial needs. This strategic review included discussions with
other parties regarding joint venture arrangements and the potential sale of the
Company. No party, other than Pacific Lithium Limited presented an arrangement
to meet the financial and operational needs of the Company. The Company
determined it was in the best interest of the Company and its stockholders to
enter into a Memorandum of Agreement with Pacific Lithium Limited on September
30, 1999.
MERGER OF BUSINESS WITH PACIFIC LITHIUM LIMITED
On September 29, 1999, the Company and Pacific Lithium Limited ("PLL") of
Auckland, New Zealand signed a Memorandum of Agreement (the "MOA") to merge
their respective lithium battery technologies and operations (the "Business
Merger"), and ultimately form a new U.S. corporation as more fully described
below. The Business Merger will require the approval of shareholders of both
companies. PLL is an unlisted publicly-held New Zealand company with more than
600 shareholders and access to sources of capital in New Zealand, Australia,
Japan, Singapore and the U.S. PLL carries on research, development and
production of specialized lithium chemistries for use in the lithium battery
industry. PLL commercially produces high and ultra-high grade lithium carbonate
using proprietary processes and has developed or is the exclusive licensee of
lithium manganese cathode products, lithium polymers and their production
processes. PLL has an exclusive licensing arrangement with the Massachusetts
Institute of Technology (MIT) to commercialize MIT's proprietary electrode and
electrolyte polymers. PLL is a significant supplier of high quality
battery-specific lithium carbonate to Japanese cathode and electrolyte
suppliers.
The Company believes that the new combined entity will have a unique position in
the lithium polymer battery market, providing a proprietary vertical integration
capability that would range from ultra high grade lithium carbonate and
lithiated manganese cathode materials to reinforced composite battery
structures, with low cost, high yield thin film manufacturing processes. The
Company believes that this combination of technologies, capabilities and people
will enable the new company to become the low cost provider of high quality and
high performance lithium polymer batteries. Targeted end user applications
include the portable electronics market, particularly notebook computers and
PDAs, as well as the rapidly emerging HEV market.
Under the terms of the Business Merger, the Company's technology, assets and
operations will be transferred to PLL in exchange for the
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<PAGE> 11
issuance to the Company of 3 million shares of PLL Class B common stock (which
constitutes approximately 15% of PLL's currently outstanding shares) and
warrants to purchase 1.5 million additional shares of PLL stock at U.S. $2.50
per share. PLL will also assume the lease of the Company's premises at Plymouth
Meeting, Pennsylvania and any other obligations which are required for research
and development and manufacturing operations of the Company's thin film
technology. The current asking price for sales of PLL stock is U.S. $2.50 -
$3.00 per share. During the first half of 1999 PLL raised U.S. $5 million
through the sales of PLL common stock at U.S. $2.25 per share. As additional
consideration for the Company's assets, PLL will assume responsibility for all
of the Company's operating cash requirements.
Beginning in October 1999 and until the time of the Company's meeting of
stockholders to approve the Business Merger, which is expected to be held in
February 2000, PLL will provide working capital for the Company. PLL has agreed
to advance a total of U.S. $1.1 million as follows: (1) U.S. $125,000 to enable
the Company to complete the purchase of a packaging machine on demand of the
Company provided PLL is granted a security interest in the machine; and (2) U.S.
$225,000 on October 1 and $250,000 on November 1 and December 1, 1999, and on
January 1, 2000 to cover operating expenses, regulatory requirements (including
registration of unregistered shares), creditors and costs associated with the
Business Merger.
Following shareholder approval of the Business Merger, and up to the time of the
Ilion IPO described below, the Company's capital equipment and operating cash
flow requirements will be an integral part of PLL's capital raising program.
After the Business Merger, the Company's thin film technology and operations
will become fully merged into the operations of PLL and will be funded from
PLL's existing cash reserves, its cash flows and also from its proposed new
capital raisings. PLL will review its business plan to incorporate the
additional research and development, capital equipment and operating costs of
the Company's thin film technology, and will then seek to raise any additional
funding for capital equipment in accordance with the merged cash flow
requirements. The Company will require further financing of approximately $4.0
million for capital equipment in order to attain initial commercial viability of
the Company's battery technology. PLL has indicated that the additional required
funding for PLL and the Company combined may be up to U.S. $12.5 million prior
to the Ilion IPO and up to U.S. $50 million at the time of the Ilion IPO. PLL
has raised capital successfully in New Zealand, Australia, Singapore, Japan and
North America.
Once the Business Merger is complete, the Company would become a "shell" holding
company whose sole asset would be the shares and warrants of PLL issued in the
Business Merger. PLL intends to reincorporate in the U.S. as a private company
named Ilion Technology Corporation ("Ilion") and consummate an initial public
offering and NASDAQ listing of the shares of Ilion within 3 to 12 months of the
Business Merger depending upon market and other factors (the "Ilion IPO"). The
Company's stock would continue to be traded in the OTC market until the Ilion
IPO. All shareholders of PLL prior to the reincorporation (including the
Company) will hold the same number of shares of Ilion after the reincorporation.
There can be no assurance that the funds required by PLL for operational and
capital needs of the combined companies will be available, or if available that
the terms thereof will be acceptable to PLL. In addition, there can be no
assurance that the combined companies will be able to meet the technological
objectives and/or satisfy the capital requirements that are necessary to convert
battery technology into successful commercial products. There can be no
assurance that the combined companies products will generate any revenues, will
not encounter technical problems when used, will be successfully marketed, will
be produced at a competitive cost, or will achieve customer acceptance or, if
commercial products are developed and revenues produced, that the combined
company will be profitable. The likelihood of the success of the combined
company must be weighed against the problems, expenses, difficulties,
complications and delays frequently encountered in developing and marketing a
new product. In addition, there can be no assurance that PLL will consummate the
Ilion IPO or NASDAQ listing or that the shares of Ilion will be distributed to
the Company or its stockholders. Until the time of the Ilion IPO, the Company's
sole asset will be the shares and warrants of PLL issued to the Company in the
Business Merger.
The consummation of the Business Merger is contingent upon certain closing
conditions being met by the parties including the execution of definitive
agreements, obtainment of applicable regulatory approvals, and the approval of
the Business Merger and a definitive agreement by the shareholders and directors
of the Company and PLL. The Company expects the Business Merger to be closed
during the first quarter of 2000, assuming the closing conditions have been met.
There can be no assurance that the Business Merger will be completed during the
first quarter of 2000 or at all and there can be no assurance that the closing
conditions will be met, including the condition of approval by the stockholders
of the Company.
If the Business Merger is not consummated for any reason (except the default of
PLL) any advances from PLL to the Company will be converted into the Company
common stock at U.S. $0.10 per share, PLL will be issued warrants to purchase
7.5 million shares of the Company common stock exercisable at U.S. $0.15 per
share, the Company will grant PLL a non-exclusive world wide license to use the
Company's thin film technology and manufacturing methods and PLL will have a
first option to purchase the Company's technologies and processes at market
value if the Company sells, goes into receivership, liquidation or the like.
PLL intends to appoint Mr. David Cade, the Company's Chairman and Chief
Executive Officer as Chief Operating Officer of the combined companies upon the
completion of Business Merger and Chief Executive Officer upon completion of the
Ilion IPO. Dr. George Ferment,
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<PAGE> 12
the Company's President, Chief Operating Officer and Chief Technical Officer,
will assume a commensurate role in the new organization. PLL will support the
appointment of one of the Company's directors to PLL's Board upon completion of
the Business Merger.
FINANCING NEEDS
The Company has been unprofitable since inception, expects to incur substantial
additional operating losses in the future, and needs significant additional
financing to continue the development and commercialization of its technology.
The Company does not expect to generate any significant revenues from operations
during the fiscal year ending December 31, 1999.
As discussed above, under the MOA beginning in October 1999 and until
shareholder approval of the Business Merger, PLL has provided and will continue
to provide working capital for the Company. The Company believes that provided
PLL advances the needed working capital to the Company until the consummation of
the Business Merger, the Company will have sufficient capital resources to meet
the Company's needs and satisfy the Company's obligations through the date of
the Company's stockholder's meeting.
The Company has outstanding 4,590,049 warrants (with exercise prices ranging
from $.51-$4.50) and 4,404,092 options (with exercise prices ranging form
$.28-$1.09). On October 28, 1999, the Board of Directors has approved a
reduction in the exercise price of the warrants to $.15 for the period of
November 1, 1999 - February 29, 2000 to encourage the holders to exercise the
warrants and provide working capital to the Company. Effective November 1,
1999, a Special Committee of the Board approved the exchange of all outstanding
stock options for new options with an exercise price of $.22 and the issuance
of 855,000 additional options under the 1999 Plan exercisable at $.22.
The new options will have the same vesting terms as the original options and
will expire one year earlier than the expiration of the original options. To
facilitate the exchange of the options, the Board also approved the
implementation of a new stock option plan, the 1999 Stock Incentive Plan, to
replace all of the Company's existing option plans. The 1999 Plan has
substantially the same terms as the existing 1998 Plan other than the number of
shares issuable under the plan. The 1999 Plan authorizes the issuance of 8
million shares. Under the MOA, funds raised by the Company from the exercise of
the warrants and options will be used as follows: (1) the first U.S. $350,000
shall be used to reduce PLL's short term funding of the Company to U.S.
$750,000; and (2) the balance shall be used to subscribe for additional PLL
shares at U.S. $2.25 per share. On October 28, 1999 the Board of Directors also
approved, subject to stockholder approval, an increase in the number of shares
of common stock authorized for issuance by the Company under the Certificate of
Incorporation from 50 million to 100 million of authorized common stock.
If the Company does not consummate the Business Merger, the Company would assess
all available alternatives including a sale of the assets of the Company to
another party, the suspension of operations and possibly liquidation, auction,
bankruptcy, or other measures.
This report is qualified in its entirety by reference to the foregoing summary
of the Company's current financial condition and the accompanying financial
statements and notes thereto inclusive of the substantial doubt expressed
therein about the Company's ability to continue as a going concern.
DEVELOPMENT AND COMMERCIALIZATION PLAN
The Company's strategy is to commercialize and produce a new generation of solid
state lithium polymer batteries based on sixteen years of research and
development and a strong patent portfolio covering both the battery construction
and manufacturing process unique to the battery industry. The proprietary
technology uses high performance fibers in composite battery structures and
low-cost web coating/handling methods for manufacturing. This technology
encompasses lithium-ion polymer batteries (market entry in 2000) and lithium
alloy polymer batteries (market entry in three to five years). The Company's
target market is hybrid electric vehicles (HEVs) and mobile computing and
communications applications which showcase the Company's thin, flat lightweight
and long run-time cells. During March 1996, a continuous flow coating/laminating
pilot line sometimes referred to as the Demonstration Manufacturing Facility
("DMF") -- was installed by the Company. This line has been used to further
define the Company's manufacturing technology and to sharpen manufacturing cost
estimates. Through equipment augmentation and upgrade, this line is in the
process of transitioning to the "Plymouth Meeting Manufacturing Plant"
(sometimes also referred to as the "PMMP") which the Company expects will serve
as the production facility for battery cells which will be assembled into
battery packs for Original Equipment Manufacturer ("OEM") customers. Subject to
the uncertainties discussed in this report and the availability of capital, it
is anticipated that the PMMP will cost approximately $4.0 million to complete in
the 1999-2000 time frame including manufacturing equipment meeting applicable
environmental regulatory standards. The PMMP according to the Company's current
plan will be located within the Company's existing facility in Plymouth Meeting,
Pennsylvania. There can be no assurance, however, that the Company will be able
to achieve the technological breakthroughs that will be necessary in order to
ultimately achieve commercialization and/or obtain financings or generate
revenues in order to sustain the Company's on-going research and development
phase or to complete the equipment augmentation at the PMMP.
As of September 30, 1999, the Company had not generated any significant product
revenues and had no commercial operations. To date, the Company has delivered
limited quantities of its battery cells to selected Original Equipment
Manufacturers ("OEMs") for evaluation. Based upon the performance of the
Company's battery cells and its unique manufacturing technology, a top ten
personal computer
-12-
<PAGE> 13
manufacturer (the "PC OEM") is working with the Company to incorporate the
Company's lithium-ion polymer batteries into an advanced notebook computer.
Subject to successful qualification of the Company's battery and the ability to
meet the OEM's volume production needs, the Company anticipates entering into a
definitive supply agreement with the PC OEM or a comparable OEM.
The Company's development and commercialization plan currently has the
following milestones:
(i) hand-made call samples tested by potential strategic
partners in 1995 (accomplished);
(ii) installation of a pilot line continuous flow coating
laminating unit in QJ 1996 (accomplished);
(iii) upgrade of the pilot line and distribution of
lithium-ion polymer call samples produced on the
pilot line to selected OEMs beginning in early 1997
(accomplished);
(iv) distribution of prototype battery packs to selected
OEMs in early 1998 (on-going);
(v) installation of packaging equipment and environmental
control equipment to achieve EPA compliance at the
Plymouth Meeting plant (fourth quarter 1999 - second
quarter 2000);
(vi) initial commercial production at PMMP in 2000; and
(vii) joint venture manufacturing or technology licensing
arrangements in Asia, the United States and Europe in
the 2001-2002 timeframe, with revenue sharing or
licensing royalties based on the use of the combined
technologies of the Company and PLL.
The Company estimates that completion of phases (v) and (vi) will cost the
Company approximately $4.0 million in capital expenditures. There can be no
assurances that the Company will meet these development milestones on the time
schedule outlined above.
Until shareholder approval of the Business Merger in the February-March 2000
time frame, the Company and PLL are working together as partners in leveraging
their combined vertical integration capabilities encompassing advanced
materials, composite fiber web cell structures and web handling manufacturing
processes to pursue global market opportunities involving portable electronics
and HEV battery applications. The two companies intend to establish JV
manufacturing or technology licensing relationships at selected locations
worldwide.
MANAGEMENT
Effective November 1, 1999, Mr. Thomas R. Thomsen elected to step down as the
Chairman and Chief Executive Officer of the Company and the Board of Directors
elected Mr. David J. Cade Chairman and Chief Executive Officer of the Company
and Dr. George Ferment, President, Chief Operating Officer and Chief Technical
Officer of the Company. Mr. Cade had served as President and Chief Operating
Officer of the Company and Dr. Ferment had served as Executive Vice President of
Operations and Chief Technical Officer of the Company.
LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION
The Company has financed its operations since inception with convertible debt
and private placements of common and preferred stock and has raised
approximately $15.2 million.
At September 30, 1999, the Company had cash and cash equivalents of $221,000,
fixed assets of $292,000 and other assets of $95,000. The Company's total
liabilities were $870,000 consisting of accounts payable, accrued salaries, and
accrued expenses. The Company had a net working capital deficit of $629,000 on
September 30, 1999.
The Company's net working capital decreased by approximately $1,142,000 from
December 31, 1998 to September 30, 1999. The Company's cash and cash equivalents
decreased by approximately $852,000 from December 31, 1998 to September 30,
1999. The decrease in net working capital and in cash and cash equivalents is
attributable to operating expenses.
The Company's stockholders deficit was $242,000 at September 30, 1999, after
giving effect to an accumulated deficit of $45,171,000 which consisted of
$38,306,000 accumulated deficit during the development stage from July 21, 1989
through September 30, 1999 and $6,865,000 accumulated deficit from prior
periods. The Company expects to incur substantial operating losses as it
continues its commercialization efforts.
In September 1997, the Company entered into a Senior Secured Convertible Note
Purchase Agreement (the "1997 Note Purchase Agreement") with Lithium Link LLC
for the sale of $5.5 million of the Company's Senior Secured Convertible Notes
(the "1997 Notes"). In January 1999, the 1997 Notes were converted into
19,642,857 shares of the Company's common stock and 562,647 shares of the
Company's common stock were issued to pay accrued interest to the conversion
date. Interest accrued at 8.5% and was payable annually, at the Company's
election in cash or the Company's common stock. The principal of the 1997 Notes
was payable on or before July 1, 2002. The 1997 Notes were convertible into the
Company's common stock at a conversion price of $.28 per share. In 1997, the
Company recorded the intrinsic value of the beneficial conversion feature of the
1997 Notes as a charge to interest expense of $9,821,000.
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<PAGE> 14
In July and August 1999, the Company raised $450,000 in connection with the sale
of 4,500,000 shares of its restricted common stock to various private investors
including several members of the Company's Board of Directors.
As described above, the Company and PLL have signed a Memorandum of Agreement to
merge their respective lithium battery technologies and operations, and
ultimately form a new U.S. corporation. Under the terms of the Business Merger,
the Company's technology, assets and operations would be transferred to PLL in
exchange for the issuance to the Company of 3 million shares of PLL Class B
common stock (which constitutes approximately 15% of PLL's outstanding shares)
and warrants to purchase 1.5 million additional shares of PLL stock at U.S.
$2.50 per share. The current asking price for sales of PLL stock is U.S. $2.50
per share. During the first half of 1999 PLL raised U.S. $5 million through the
sales of PLL common stock at U.S. $2.25 per share. As an additional
consideration, PLL will assume responsibility for all of the Company's operating
cash requirements. Beginning in October 1999 and until shareholder approval, PLL
will provide working capital for the Company. PLL has advanced $475,000 to the
Company through November 1, 1999 in accordance with the terms of the MOA.
Following shareholder approval, and up to the time of the Ilion IPO, the
Company's capital equipment and operating cash flow requirements will be an
integral part of PLL's capital raising program. Once the Business Merger is
complete, the Company would become a "shell" holding company whose sole asset
will be the shares and warrants of PLL issued in the Business Merger. PLL
intends to reincorporate in the U.S. as a private company named Ilion Technology
Corporation and consummate an IPO and NASDAQ listing of Ilion. The Company's
stock would continue to be traded in the OTC market until the Ilion IPO.
The consummation of the Business Merger is contingent upon certain closing
conditions being met by the parties including the execution of definitive
agreements, obtainment of applicable regulatory approvals, and the approval of
the Business Merger and a definitive agreement by the shareholders and directors
of the Company and PLL. The Company expects the Business Merger to be closed
during the first quarter of 2000, assuming the closing conditions have been met.
If the Business Merger is not consummated for any reason (except the default of
PLL) any advances from PLL to the Company will be converted into the Company's
common stock at $0.10 per share, PLL will be issued warrants to purchase 7.5
million shares of the Company common stock exercisable at $0.15 per share, the
Company will grant PLL a non-exclusive world wide license to use the Company's
thin film technology and manufacturing methods and PLL will have a first option
to purchase the Company's technologies and processes at market value if the
Company sells, goes into receivership, liquidation or the like.
The Company does not currently have sufficient cash to achieve all its
development and production objectives, including the completion of the Plymouth
Meeting manufacturing plant as more fully described above, See "Overview, Plan
of Operation and Recent Developments."
As a method to conserve cash, Mr. Thomas Thomsen, the Chairman and Chief
Executive Officer of the Company until his resignation on November 1, 1999, had
voluntarily deferred the payment of his salary. As of November 1, 1999, the
deferred unpaid salary owed to Mr. Thomsen was approximately $365,000. Upon the
resignation of Mr. Thomsen from his position as Chairman and Chief Executive
Officer of the Company effective November 1, 1999, the Board of Directors
approved the payment of the deferred salary owed to Mr. Thomsen fifty percent in
cash and fifty percent in Common Stock of the Company at $.2750 per share (the
Closing price on November 1, 1999). The Board also approved the acceleration of
the vesting of the options owned by Mr. Thomsen as of November 1, 1999 and the
acceleration of the options owned by Mr. William Walker, the Company's former
Chief Financial Officer who resigned such position in August 1999 but continues
as a part-time consultant for the Company.
RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND SEPTEMBER 30, 1998
Revenues
The Company had $49,000 in research and development contract revenues as a
subcontractor to Yardney Technical Products for a NASA battery research and
development contract and as a supplier of lithium ion polymer cells to
NASA/Lewis Research Center for the nine months ended September 30, 1999.
The Company had no revenues from commercial operations for the nine months ended
September 30, 1999 and 1998.
Engineering, Research and Development Expenses
Engineering, research and development expenses were $1,019,000 for the nine
months ended September 30, 1999 compared to $1,397,000 for the same period in
1998. The decrease of $378,000 was due primarily to decreased lab supplies and
consulting expenses.
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<PAGE> 15
General and Administrative Expenses
General and administrative expenses were $1,023,000 for the nine months ended
September 30, 1999 compared to $1,351,000 for the same period in 1998. The
decrease of $328,000 was due primarily to decreased consulting fees, accounting
fees, legal fees and amortization of debt issue costs.
Interest Expense
Interest expense was $11,000 (net of interest income of $17,000) for the nine
months ended September 30, 1999 compared to $240,000 (net of interest income of
$110,000) for the same period in 1998. The decrease in interest expense is
primarily attributable to the convertible notes issued in 1997, which were paid
during January 1999.
THREE MONTHS ENDED SEPTEMBER 30, 1999 AND SEPTEMBER 30, 1998
Revenues
The Company had $5,000 in Research and Development contract revenues as a
subcontractor to Yardney Technical Products for a NASA battery Research and
Development contract and as a supplier of lithium ion polymer cells to
NASA/Lewis Research Center for the three months ended September 30, 1999.
The Company had no revenues from commercial operations for the three months
ended September 30, 1999 and 1998.
Engineering, Research and Development Expenses
Engineering, research and development expenses were $312,000 for the three
months ended September 30, 1999 compared to $537,000 for the same period in
1998. The decrease of $225,000 was due primarily to decreased lab supplies,
consulting expenses and salaries.
General and Administrative Expenses
General and administrative expenses were $313,000 for the three months ended
September 30, 1999 compared to $414,000 for the same period in 1998. The
decrease of $101,000 was due primarily to decreased accounting fees, legal fees
and amortization of debt issue costs.
Interest Expense
Interest expense was $(3,000) (net of interest income of $3,000) for the three
months ended September 30, 1999 compared to $89,000 (net of interest income of
$29,000) for the same period in 1998. The decrease in interest expense is
primarily attributable to the convertible notes issued in 1997, which were paid
during January 1999.
YEAR 2000
The Company is a late development stage company in the process of
commercializing and productizing a unique, solid-state lithium-ion polymer
rechargeable battery. The Company has conducted a review of its computer and
business systems to identify and address any problems that the systems may have
with correctly interpreting and processing date information as the year 2000
approaches. The Company's review included a series of initiatives to ensure that
all of the Company's computer equipment and software will function properly into
the next millennium. Computer hardware and software includes systems generally
thought of as information-technology dependent, such as accounting, data
processing, and telephone equipment ("IT systems"), as well as systems not
obviously information-technology dependent, such as battery manufacturing and
testing equipment, telecopier machines and securities systems ("non-IT
systems"). These systems may contain embedded technology, which required that
the Company's review include broad identification, assessment, remediation and
testing efforts.
The Company has retained a Y2K consultant to review its IT systems. The Y2K
consultant has issued its report which recommended that modifications be made to
the telephone voicemail system and to certain computer hardware and software to
achieve Year 2000 compliance. The estimated cost of these recommendations is
approximately $10,000. Due to the Company's current financial condition as
discussed elsewhere in this report the Company has determined not to implement
at present the Y2K consultant's recommendations. In addition, the Company has
examined its security system and found it to be compliant.
As a development stage enterprise, the Company has not yet established any
significant customer relationships, whereby year 2000 compliance or
non-compliance might materially affect the Company's operations. As and when the
Company transitions from the development stage to significant commercial
manufacturing operations, the Company plans to determine the year 2000 readiness
of its
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<PAGE> 16
then key suppliers, identify alternative sources for materials and services in
the event that lack of year 2000 compliance is indicated, and make inquires
regarding the year 2000 readiness of any potential strategic partners.
Management is continuing to examine the year 2000 issues as they potentially
impact the Company, and will be developing contingency plans as necessary.
There can be no assurance that the failure of the Company or any third parties
to achieve year 2000 compliance would not have a material adverse effect on the
Company. A contingency plan has not yet been developed for dealing with the most
reasonably likely worst case scenario, and such scenario has not yet been
clearly identified.
SAFE HARBOR STATEMENT
The Private Securities Litigation Reform Act of 1995 provides a new "safe
harbor" for certain forward-looking statements. Statements contained in this
report that are not historical facts are forward-looking statements that involve
risks and uncertainties that could cause actual results to differ materially
from those stated in the forward-looking statements. Factors that could cause
actual results to differ materially include, among others: general economic
conditions, changes in laws and government regulations, fluctuations in demand
for the Company's products, the Company's ability to consummate strategic
alliances, technology development problems, and the Company's ability to
successfully finance future plant and equipment plans, as well as its current
ongoing operations.
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<PAGE> 17
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
None.
b) Form 8-K Reports during the Quarter Ended September
30, 1999
Form 8-K dated October 8, 1999 announcing the
Memorandum of Agreement between the Company and
Pacific Lithium Limited.
SIGNATURE
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
LITHIUM TECHNOLOGY CORPORATION
By: /s/ David J. Cade
---------------------------------------------
David J. Cade, Chairman and
Chief Executive Officer
(Chief Executive Officer and Acting Principal
Financial Officer)
November 15, 1999
-17-
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THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
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QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
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