SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): July 8, 1998
ELECTROSOURCE, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-16323 74-2466304
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification Number)
incorporation)
2809 IH 35 South,
San Marcos, Texas 78666
(Address of principal (Zip code)
executive offices)
Registrant's telephone number, including area code: (512) 753-6500
Previous address:
(Former name or former address, if changed since last report)
Item 5. Other Events.
Registrant attaches as Exhibit "A" hereto a condensed
unaudited balance sheet as of June 30, 1998, which discloses net
tangible assets in excess of $3,000,000. This report is being
filed pursuant to a notification from Nasdaq dated July 1, 1998
requiring the Company to make a public filing on or before July
10, 1998 with the Securities and Exchange Commission and Nasdaq
evidencing $3,000,000 in net tangible assets.
The increase in net tangible assets from March 31, 1998 to
June 30, 1998 was primarily due to the sale of shares in June to
Kamkorp Limited ("Kamkorp") in accordance with the terms of a
Stock Purchase Agreement and the completion of an agreement with
Corning Incorporated ("Corning") to satisfy all of the
convertible debt and accrued interest owed to Corning. The sale
of 2,700,000 shares to Kamkorp for $2,700,000 resulted in a
corresponding increase in net tangible assets. The payment to
Corning of $1,500,000 in cash in full satisfaction of all
obligations owed to Corning resulted in an extraordinary gain
from the early extinguishment of debt of approximately
$3,500,000. Additionally, the Company issued options to purchase
shares of the Company's stock at agreed upon prices to Corning in
June 1998 with an estimated fair value of approximately $300,000
in full satisfaction of its obligations to Corning for services
provided by Corning under a research and development agreement
which concluded in June. The fair value of such options had been
previously expensed. The transactions with Corning resulted in
an increase in net tangible assets of approximately $3,800,000
for the quarter ended June 30, 1998. These increases were offset
by a loss from operations for the quarter ended June 30, 1998 of
approximately $2,100,000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
ELECTROSOURCE, INC.
By: /s/ Mary Beth Koenig
Mary Beth Koenig
Treasurer/Controller
Chief Accounting Officer
Date: July 8, 1998
EXHIBIT "A"
Electrosource, Inc.
Condensed Unaudited Balance Sheet
June 30, 1998
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 648,788
Trade receivables 177,842
Inventories 338,382
Prepaid expenses and other assets 47,029
TOTAL CURRENT ASSETS 1,212,041
PROPERTY AND EQUIPMENT, net 3,782,118
INTANGIBLE ASSETS, net 1,364,787
OTHER ASSETS 7,000
TOTAL ASSETS $ 6,365,946
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 462,940
Accrued liabilities 1,320,421
Deferred revenue and advance payments on batteries 1,049,210
Current portion of capital lease obligations 74,317
TOTAL CURRENT LIABILITIES 2,906,888
CAPITAL LEASE OBLIGATIONS (less current portion) 111,155
SHAREHOLDERS' EQUITY (DEFICIT)
Common Stock, par value $1.00 per share, authorized
50,000,000 shares; issued and outstanding 7,234,531 7,234,531
Preferred Stock, par value $1.00 per share; authorized
10,000,000 shares, no shares issued or outstanding _
Common Stock subscription receivable (467,663)
Warrants _
Paid in capital 51,446,508
Accumulated deficit (54,865,473)
3,347,903
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) $ 6,365,946
