SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934.
For the quarter ended: June 30, 1996
Commission file No. 0-23336
ELECTRIC FUEL CORPORATION
Exact name of registrant as specified in its
charter
Delaware 95-4302784
(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification No.)
885 Third Avenue, New York, New York 10022 - Suite 2900
(Address of principal executive
offices)
(Zip Code)
(212) 230-2172
(Registrant's telephone number, including area code)
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
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares outstanding of the issuer's common stock
as at August 9, 1996 was 12,425,947.
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<PAGE>
INDEX
Page
PART I - FINANCIAL INFORMATION:
Item 1 - INTERIM FINANCIAL STATEMENTS (UNAUDITED):
Consolidated Balance Sheets at June 30, 1996 and
December 31, 1995 3-4
Consolidated Statements of Operations for the Six Months
Ended June 30, 1996 and 1995 5
Consolidated Statements of Changes in Stockholders' Equity
for the Six Months Ended June 30, 1996 6
Consolidated Statements of Cash Flows for the Six Months
Ended June 30, 1996 and 1995 7
Notes to the Consolidated Financial Statements 8
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations 10-12
PART II - OTHER INFORMATION 13
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<TABLE>
ELECTRIC FUEL CORPORATION
CONSOLIDATED BALANCE SHEETS
<CAPTION>
<S> <C> <C>
December 31, June 30,
1995 1996
---------------------- -----------------
ASSETS (Audited) (Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $5,364,867 $9,153,996
Marketable debt securities (at fair market value) 4,215,518 12,026,858
Accounts receivable:
Trade 398,535 359,927
Other 2,421,804 1,816,374
Inventories 535,208 813,864
---------------------- -----------------
TOTAL CURRENT ASSETS 12,935,932 24,171,019
---------------------- -----------------
INVESTMENTS:
Investee company 35,849 35,849
---------------------- -----------------
FIXED ASSETS:
Cost 6,639,926 8,074,866
Less - accumulated depreciation and amortization 654,391 1,041,323
---------------------- -----------------
5,985,535 7,033,543
---------------------- -----------------
OTHER ASSETS AND DEFERRED CHARGES net of accumulated amortization 743,885 28,326
---------------------- -----------------
$19,701,201 31,268,737
====================== =================
</TABLE>
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<TABLE>
ELECTRIC FUEL CORPORATION
CONSOLIDATED BALANCE SHEETS
<CAPTION>
<S> <C> <C>
December 31, June 30,
1995 1996
---------------------- ----------------
(Audited) (Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accruals:
Trade $2,743,539 $2,513,564
Other 6,357,706 4,914,320
Advances from Customers 4,223,066 1,784,854
---------------------- ----------------
Total current liabilities 13,324,311 9,212,738
LIABILITY FOR EMPLOYEE RIGHTS UPON RETIREMENT
net of amount funded 555,908 744,644
---------------------- ----------------
Total Liabilities 13,880,219 9,957,382
---------------------- ----------------
STOCKHOLDERS' EQUITY:
Common stock - $0.01 par value; authorized - 28,000,000 shares; issued -
11,328,110 shares as of December 31, 1995 and 12,425,947 as of June 30, 1996;
outstanding - 8,675,947 shares as of December 31, 1995 and 12,425,947 as of June
30, 1996. 113,282 124,260
Preferred stock - $0.01 par value; authorized - 1,000,000 shares, no shares outstanding
Additional paid-in capital 24,168,108 45,564,103
Accumulated deficit (16,873,340) (22,920,662)
Unrealized gain on available-for-sale securities 29,048 11,029
Treasury stock, at cost (common stock 2,652,163 shares as of December 31, 1995 ) (193,174)
Notes receivable from stockholders (1,422,942) (1,467,375)
---------------------- ----------------
TOTAL STOCKHOLDERS' EQUITY 5,820,982 21,311,355
---------------------- ----------------
$19,701,201 $31,268,737
====================== ================
</TABLE>
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<TABLE>
ELECTRIC FUEL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JUNE 30, THREE MONTHS ENDED JUNE 30,
-------------------------------------- --------------------------------------
1995 1996 1995 1996
----------------- ------------------ ----------------- -----------------
REVENUES $1,147,710 $2,494,607 $865,048 $1,228,752
----------------- ------------------ ----------------- -----------------
RESEARCH AND DEVELOPMENT EXPENSES AND COST OF REVENUES
Expenses incurred 4,032,295 7,356,202 2,377,958 3,606,555
Less - royalty-bearing grants 716,463 492,790
----------------- ------------------ ----------------- -----------------
3,315,832 7,356,202 1,885,168 3,606,555
PROVISION FOR ANTICIPATED PROGRAM LOSSES 2,100,000 600,000
SELLING, GENERAL AND ADMINISTRATIVE 1,218,012 1,514,055 615,093 886,133
EXPENSES
----------------- ------------------ ----------------- -----------------
6,633,844 8,870,257 3,100,261 4,492,688
----------------- ------------------ ----------------- -----------------
OPERATING LOSS (5,486,134) (6,375,650) (2,235,213) (3,263,936)
FINANCIAL INCOME - NET 392,312 379,904 193,807 249,871
----------------- ------------------ ----------------- -----------------
LOSS BEFORE TAXES ON INCOME (5,093,822) (5,995,746) (2,041,406) (3,014,065)
TAXES ON INCOME 51,576 36,836
----------------- ------------------ ----------------- -----------------
LOSS FROM THE OPERATION OF THE COMPANY & (5,093,822) (6,047,322) (2,041,406) (3,050,901)
ITS CONSOLIDATED SUBSIDIARIES
SHARE IN LOSS OF ASSOCIATED COMPANY (33,000) (15,000)
----------------- ------------------ ----------------- -----------------
LOSS FOR THE PERIOD ($5,126,822) ($6,047,322) ($2,056,406) ($3,050,901)
================= ================== ================= =================
LOSS PER SHARE ($0.61) ($0.53) ($0.24) ($0.25)
================= ================== ================= =================
WEIGHTED AVERAGE NUMBER OF SHARES 8,454,130 11,375,494 8,472,763 12,213,155
OUTSTANDING
================= ================== ================= =================
</TABLE>
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<TABLE>
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (unaudited)
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
COMMON STOCK UNREALIZED
GAIN
----------------------
Shares Amount Additional Accumulated on Treasury Notes Total
paid-in deficit available-for Stock receivable
capital -sale securi- from
rities shareholders
----------- --------- ------------- ------------ ------------- ----------- ------------- ------------
BALANCE AT JANUARY 1, 11,328,110 $113,282 $24,168,108 ($16,873,340) $29,048 ($193,174) ($1,422,942) $5,820,982
1996
CHANGES DURING THE SIX MONTH PERIOD ENDED JUNE 30, 1996:
Shares issued in a 3,750,000 37,500 21,562,647 * 21,600,147
public offering
Treasury stock retired (2,652,163) (26,522) (166,652) 193,174 0
Accrued Interest on notes receivable from stockholders (44,433) (44,433)
Unrealized loss on available-for-sale securities (18,019) (18,019)
Loss (6,047,322) (6,047,322)
------------- --------- -------------- ------------ ------------- ----------- ------------- -------------
BALANCE AT 12,425,947 $124,260 $45,564,103 ($22,920,662) $11,029 $0 ($1,467,375) $21,311,355
JUNE 30, 1996 ============= ========= ============= ============ ============= =========== ============= =============
* Net of $ 2,774,853 - offering expenses
</TABLE>
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<TABLE>
ELECTRIC FUEL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED
JUNE 30,
1995 1996
--------------- -----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Loss for the period ($5,126,822) ($6,047,322)
Adjustments required to reconcile loss to net cash used in operating activities:
Loss relating to investment in investee company 33,000
Depreciation and amortization 148,698 470,387
Amortization of premium net of accrued interest and gain from sale of marketable
debt securities 40,438 34,370
Capital loss from disposal of fixed assets 777
Liability for employee rights upon retirement - net 113,916 188,736
Interest accrued on notes and loan to stockholders (43,754) (44,433)
Changes in operating asset and liability items:
Decrease in accounts receivable 703,613 407,351
Increase in inventories (116,590) (278,656)
Increase (Decrease) in accounts payable and accruals 2,695,884 (1,673,361)
Changes in related parties = net 10,141
Increase (Decrease) in advances from customers 808,349 (2,438,212)
----------- -----------------
Net cash used in operating activities ($733,127) ($9,380,363)
------------ -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets (2,077,330) (1,596,572)
Investment grant relating to fixed assets 317,723
Purchase of marketable debt securities-net (8,900,729)
Proceeds from disposal of fixed assets 1,371
Proceeds from sale of marketable debt securities 4,227,128 1,037,000
------------ -----------------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES $2,149,798 ($9,141,207)
------------ -----------------
FORWARD $1,416,671 ($18,521,570)
------------ -----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issue of share capital (including additional paid in capital),
net of offering expenses 22,310,699
Payment on note receivable from Stockholders 22,912
Proceeds from exercise of warants and options 101,679
Purchase of treasury stock (46,987)
------------- ---------------
Net cash provided by financing activities 77,604 22,310,699
------------- ---------------
INCREASE IN CASH AND CASH EQUIVALENTS 1,494,275 3,789,129
BALANCE OF CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 1,307,855 5,364,867
------------ ----------------
BALANCE OF CASH AND CASH EQUIVALENTS AT END OF PERIOD $2,802,130 $9,153,996
============ ================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION - CASH PAID DURING THE PERIOD FOR:
Interest 1,154 3,759
============= ===============
Advances to income tax authorities 25,728 65,675
------------- ---------------
------------- ---------------
</TABLE>
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<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. The interim financial statements of Electric Fuel Corporation ("the
Company") reflect all adjustments, consisting only of normal recurring
accruals, which are, in the opinion of the Company's management, necessary
for a fair statement of results for the periods presented.
Operating revenue and expenses for any interim period are not necessarily
indicative of results for a full year.
For the purpose of these interim financial statements, certain information
and disclosures normally included in the financial statements have been
condensed or omitted. These unaudited statements should be read in
conjunction with the audited financial statements and notes thereto for
the year ended December 31, 1995.
2. In February 1996, the Company completed a public offering of 3,750,000
shares of its common stock of par value of $0.01 per share, at an offering
price of $6.50 per share.
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<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the
financial statements and notes thereto appearing elsewhere in this Quarterly
Report. Amounts reported here have been rounded to the nearest thousand.
FORWARD LOOKING STATEMENTS
When used in this discussion, the words "believes", "anticipated" and similar
expressions are intended to identify forward looking statements. Such statements
are subject to certain risks and uncertainties which could cause actual results
to differ materially from those projected. See "Important Factors Regarding
Forward-Looking Statements" attached as Exhibit 99 to the Company's Annual
Report for the year ended December 31, 1995 on Form 10-K and incorporated herein
by reference . Readers are cautioned not to place undue reliance on these
forward-looking statements which speak only as of the date hereof. The Company
undertakes no obligation to publicly release the result of any revisions to
these forward-looking statements which may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
RESULTS OF OPERATIONS:
THREE MONTHS ENDED JUNE 30, 1996 COMPARED TO THE THREE MONTHS ENDED JUNE 30,
1995.
REVENUES:
Revenues for the second quarter of 1996 amounted to $1,229,000 vs. $865,000 in
the comparable period in 1995, an increase of $364,000. Revenues for the second
quarter of 1996 were principally derived from activities relating to the
Deutsche Post AG (Deutsche Post) field test program. Additionally, the Company
completed recognition of revenues related to phase 1 of its development program
with STN Atlas Elektronic GmbH (STN) to develop a high power zinc oxygen battery
for torpedoes. The Company is presently negotiating the details of the next
phase of its program with STN. In the second quarter of 1995 revenues were
primarily related to the Deutsche Post field test, as well as certain revenues
related to marketing rights and the sale of equipment in the contract signed
with Vattenfall AB. The Company anticipates a significant portion of the
remaining expected revenues related to the field test to be recognized in 1996
and into 1997, as batteries continue to be delivered, the regeneration plant
becomes fully operational, and the field test fleet is serviced.
EXPENSES:
For the second quarter of 1996, research and development expenses and cost of
revenues were $3,607,000 compared with $2,378,000 for the second quarter of
1995. The Company believes that, given the Company's stage of development, it is
not, at this time, meaningful to distinguish between R&D expenses and cost of
revenues. The increase in expenses of $1,229,000 from the first quarter of 1995
is principally attributable to: expenses in connection with the Deutsche Post
field test, including battery production costs primarily related to batteries
for the Mercedes-Benz vehicles; costs associated with the continued growth of
the Company, including the operation of the Company's production and development
facilities in Israel and its new facility in Bremen, Germany; and increased
personnel costs relating to the foregoing. For the second quarter of 1995,
$493,000 of royalty bearing grants were recognized, which reduced R&D expenses
during this period. The Company's 1996 grant application has not yet been
approved by the Research Committee of the Office of the Chief Scientist of the
Ministry of Industry and Trade. Therefore no royalty bearing grants have been
recognized in the second quarter of 1996. Expenses related to the field test are
expected to continue through the rest of 1996 and into 1997 as the Company
continues to deliver batteries and operates the Bremen regeneration plant.
In the second quarter of 1995, the Company increased its provision for
anticipated program losses on the Deutsche Post field test by $0.6 million.
Management believes that the provision for anticipated program losses previously
recorded by the Company reflects the program losses currently estimated by
management and accordingly no increase to the provision was recorded in the
second quarter of 1996. In the future, however, the provision may be offset by
additional revenues or increased to reflect any revised estimates of project
costs. At June 30, 1996, the costs of the field test incurred by the Company had
exceeded the related program budgeted amounts, thereby
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<PAGE>
allowing the Company, pursuant to the terms of the field test Partners
Agreement, to enter into discussions to obtain additional funding from the
Deutsche Post. There can be, however, no assurance that the Company will be able
to obtain any such funding. As a result, the Company might have to modify or
reduce its participation in the field test. The balance of the provision for the
uncompleted portions of the program amounts to $2.9 million as at June 30, 1996.
The overall provision includes cost estimates based on the Company's production
experience to date for the supply of batteries and battery-vehicle interface
equipment, the estimated service expenses for the field test fleet and costs
related to the 100 kg/hour regeneration plant, in Bremen, Germany which is
supporting the Mercedes-Benz field test vehicles in service at June 1996. Since
the plant is currently dedicated to the field test, the cost of the plant (net
of anticipated residual value) is reflected as a current expense.
Selling, general and administrative expenses for the second quarter of 1996 were
$886,000 vs. $615,000 in the second quarter of 1995. This increase was primarily
attributable to increased salaries, fees and allocated overhead expenses with
respect to the Company's expanded activities, particularly in Germany. As the
Company further expands its activities it expects increases in selling, general
and administrative expenses, particularly with respect to marketing expenses, as
well as administrative expenses in Germany.
SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO SIX MONTHS ENDED JUNE 30, 1995.
REVENUES:
Revenues for the first half of 1996 amounted to $2,495,000 vs. $1,148,000 in the
comparable period in 1995, an increase of $1,347,000. Revenues for the first
half of 1996 were principally derived from activities relating to the Deutsche
Post field test program. Additionally, the Company completed recognition of
revenues related to phase 1 of its development program with STN to develop a
high power zinc oxygen battery for torpedoes. The Company is presently
negotiating the details of the next phase of its program with STN. In the first
half of 1995 the revenues were primarily related to the Deutsche Post field
test, as well as certain revenues related to marketing rights and the sale of
equipment in the contract signed with Vattenfall AB. Also included in the first
half of 1995 were revenues related to the completion and delivery of certain
outstanding orders from Edison Termoelettrica, SpA (Edison). The Company
anticipates a significant portion of the remaining expected revenues related to
the field test to be recognized in 1996 and into 1997, as batteries continue to
be delivered, the regeneration plant becomes fully operational, and the field
test fleet is serviced.
EXPENSES
Research and development expenses and cost of revenues were $7,356,000 in the
first half of 1996 vs. $4,032,000 in the comparable period in 1995. The Company
believes that, given the Company's stage of development, it is not, at this
time, meaningful to distinguish between R&D expenses and cost of revenues. The
increase in expenses of $3,324,000 from the first half of 1995 was principally
attributable to: expenses in connection with the Deutsche Post field test,
including battery production costs primarily related to batteries for the
Mercedes-Benz vehicles; costs associated with the continued growth of the
Company, including the operation of the Company's production and development
facilities in Israel and its new facility in Bremen, Germany; and increased
personnel costs relating to the foregoing. For the first half of 1995, $716,000
of royalty bearing grants were recognized, which reduced R&D expenses during
this period. The Company's 1996 grant application has not yet been approved by
the Research Committee of the Office of the Chief Scientist of the Ministry of
Industry and Trade. Therefore no royalty bearing grants have been recognized in
the second quarter of 1996. Expenses related to the field test are expected to
continue through the rest of 1996 and into 1997 as the Company continues to
deliver batteries and operates the Bremen regeneration plant.
During the first half of 1995, the Company increased its provision for
anticipated program losses related to the Deutsche Post field test by $2.1
million. Management believes that the provision for anticipated program losses
previously recorded by the Company reflects the program losses currently
estimated by management and accordingly no increase to the provision was
recorded in the first half of 1996. In the future, however, the provision may be
offset by additional revenues or increased to reflect any revised estimates of
project costs. At June 30, 1996, the costs of the field test incurred by the
Company had exceeded the related program budgeted amounts, thereby allowing the
Company, pursuant to the terms of the field test Partners Agreement, to enter
into discussions to obtain additional funding from the Deutsche Post. There can
be, however, no assurance that the Company will be able to obtain any such
funding. As a result, the Company might have to modify or reduce its
participation in the field test.
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<PAGE>
The balance of the provision for the uncompleted portions of the program amounts
to $2.9 million as at June 30, 1996. The overall provision includes cost
estimates based on the Company's production experience to date for the supply of
batteries and battery-vehicle interface equipment, the estimated service
expenses for the field test fleet and costs related to the 100 kg/hour
regeneration plant, in Bremen, Germany which is supporting the Mercedes-Benz
field test vehicles in service at June 1996. Since the plant is currently
dedicated to the field test, the cost of the plant (net of anticipated residual
value) is reflected as a current expense.
Selling, general and administrative expenses rose in the first half of 1996 to
$1,514,000 vs. $1,218,000 in the comparable period in 1995. This increase was
primarily attributable to increased salaries, fees and allocated overhead
expenses with respect to the Company's expanded activities, particularly in
Germany. As the Company further expands its activities it expects increases in
selling, general and administrative expenses, particularly with respect to
marketing expenses, as well as administrative expenses in Germany.
LIQUIDITY AND CAPITAL RESOURCES
Battery and vehicle deliveries for Mercedes-Benz' participation in the field
test are expected to continue through 1996. It is anticipated by the Company
that deliveries of Opel batteries and vehicles will commence beginning December
1996 and will be integrated into the field test in 1997. The Company has
recognized to date approximately 53% of the field test revenues. Most of the
remaining revenues and expenses related to the field test are expected to be
recognized during the remainder of 1996 and into 1997. Total consideration to
the Company for the batteries, equipment and services to be supplied in
connection with the field test (including DM 1.0 million from Vattenfall AB) is
expected to be DM 22.0 million (approximately $15.2 million), less a
contribution to the costs of the field test by the Company of DM 7.0 million
(approximately $4.8 million), leaving a net balance of approximately DM 15.0
million (approximately $10.4 million), which the Company does not believe will
be sufficient to offset its related expenses.
In the first quarter of 1996, the Company completed a public offering of
3,750,000 shares of its Common Stock at an offering price of $6.50 per share.
The offering resulted in net proceeds to the Company of approximately $21.6
million. As of June 30, 1996, the Company had cash, cash equivalents and
investments of approximately $21.2 million compared with $9.6 million as of
December 31, 1995.
The Company used available funds in the first half of 1996 primarily for the
advancement of its commitments with regard to the field test, continued R&D
expenditures, and other working capital needs. The Company increased its
investment in fixed assets by $1.5 million to $8.1 million during the six months
ended June 30, 1996. Fixed assets include $2.9 million related to the value of
the Bremen facility after its use in the field test, based on construction costs
to date. The Company currently anticipates that the total residual value of the
Bremen facility will be approximately $3.4 million.
Also during the first quarter of 1996, the Company's Israeli subsidiary,
Electric Fuel Ltd. ("EFL"), established a line of credit with the First
International Bank of Israel Ltd. ("FIBI") (the "Credit Facility"). Borrowings
under the Credit Facility will bear interest at FIBI's prime rate + 2% per
annum, be unconditionally guaranteed by Electric Fuel Corporation ("EFC") and be
secured by a pledge of foreign currency deposits in the amount of NIS 750,000
(approximately $234,000). Additionally the Credit Facility imposes financial and
other covenants on EFC and EFL and presently expires on December 31, 1996, at
which time the Credit Facility will be reviewed for renewal by FIBI. The Credit
Facility provides EFL with a line of credit in the maximum principal amount of
NIS 3.8 million (approximately $1.2 million), which is expected to be used as
credit support for various obligations of the Company, and will enable EFL to
enter into up to U.S. $ 4.0 million in currency hedging forward contracts with a
5% collateral requirement. As of June 30, 1996 the bank had issued letters of
credit and bank guarantees totaling approximately $209,000. At the present time,
the Company is not engaged in any hedging activities.
The Company has no long term debt outstanding and expects that its cash flow
from operations together with present cash reserves and amounts available under
the Credit Facility will be sufficient to fund the Company's projected
activities through 1997. However, costs related to the field test have exceeded,
and may continue to exceed, budgeted amounts. During the second quarter of 1996,
the Company, in accordance with the terms of the Partners Agreement which
permits parties whose costs exceed 20% of budgeted costs to renegotiate their
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obligations, entered into discussions to obtain additional funding from the
Deutsche Post. There can be, however, no assurance that the Company will obtain
any such additional funding. As a result, the Company might have to modify,
reduce, defer or eliminate certain of its anticipated future commitments and
field test obligations. Furthermore, if the field test is successful and
Deutsche Post, or any other participant in the field test, begins to convert all
or a portion of their fleets, to the Electric Fuel System, the Company could be
required to produce batteries in increased quantities as well as to construct
new regeneration and refueling facilities or expand its existing facility to
commercial capacity. Moreover, additional strategic alliances may also require
the establishment or expansion of facilities in Israel or elsewhere. In
addition, the Company may determine that it should invest in certain programs,
such as additional electric vehicle demonstration programs, which it believes
will advance the development and commercialization of the Electric Fuel System.
The Company also intends to use its resources to research and develop other
applications exploiting the proprietary technology related to the Electric Fuel
System and other advanced battery technologies. Accordingly, the Company may be
required to seek additional funding during this period. The Company continues to
consider financing alternatives when presented and, if financing becomes
available on satisfactory terms, including price, the Company may obtain
additional funding, including through the issuance of equity securities.
Actual cash requirements will depend in part upon actual and anticipated sales
and licenses. The Company may also be able to finance some portion of its fixed
asset and equipment needs through Approved Enterprise grants from the Government
of Israel.
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<PAGE>
PART II
ITEM 4.
1. Annual meeting took place on June 24, 1996
2. Directors elected (Class II) - Jack E. Rosenfeld
3. Directors whose term of office continued after meeting (Class I
and III) - Yehuda Harats, Dr. Jay M. Eastman, Robert S. Ehrlich
and Harvey M. Krueger
1. ELECTION OF ONE CLASS II DIRECTOR
For Withheld
Jack E. Rosenfeld 8,117,924 113,140
2. PROPOSAL TO FIX THE NUMBER OF CLASS II DIRECTORS AT ONE
For Against Abstain Broker Non-Votes
7,997,656 20,950 72,461 140,000
3. PROPOSAL TO APPROVE AMENDMENT TO ARTICLE FOUR OF THE COMPANY'S AMENDED
AND RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE AUTHORIZED
COMMON STOCK OF THE COMPANY FROM 14,000,000 SHARES TO 28,000,000 SHARES
For Against Abstain Broker Non-Votes
7,831,259 206,105 53,700 140,000
4. PROPOSAL TO APPROVE THE AMENDED AND RESTATED NON-EMPLOYEE DIRECTOR
STOCK OPTION PLAN
For Against Abstain Broker Non-Votes
7,564,196 391,428 135,440 140,000
5. RATIFICATION OF THE APPOINTMENT OF KESSELMAN & KESSELMAN, A MEMBER OF
COOPERS & LYBRAND (INTERNATIONAL), AS INDEPENDENT ACCOUNTANTS OF THE
COMPANY
For Against Abstain
8,153,774 66,490 10,800
ITEM 6.
1. No reports on Form 8-K were filed during the second quarter of 1996.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ELECTRIC FUEL CORPORATION
(Registrant)
By:/s/Robert S. Ehrlich
Name: Robert S. Ehrlich
Title: Chief Financial Officer
Dated: August 13, 1996
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<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 9,153,996
<SECURITIES> 12,026,858
<RECEIVABLES> 359,927
<ALLOWANCES> 0
<INVENTORY> 813,864
<CURRENT-ASSETS> 24,171,019
<PP&E> 8,074,866
<DEPRECIATION> 1,041,323
<TOTAL-ASSETS> 31,268,737
<CURRENT-LIABILITIES> 9,212,738
<BONDS> 0
0
0
<COMMON> 124,260
<OTHER-SE> 1,187,095
<TOTAL-LIABILITY-AND-EQUITY> 31,268,737
<SALES> 0
<TOTAL-REVENUES> 2,494,607
<CGS> 0
<TOTAL-COSTS> 7,356,202 <F1>
<OTHER-EXPENSES> 0 <F1>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (379,904)
<INCOME-PRETAX> (5,995,746)
<INCOME-TAX> 51,576
<INCOME-CONTINUING> (6,047,322)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,047,322)
<EPS-PRIMARY> (0.53)
<EPS-DILUTED> (0.53)
<FN>
<F1>
Total costs includes research and development expenses and costs of revenues.
Because of the nature of the company's operations, management is of the opinion
that it is not meaningful to segregate these costs.
</FN>
<PAGE>
</TABLE>
