<PAGE>
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 quarterly period ended: June 30, 1998
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 11, 1998 was 14,303,387.
<PAGE>
ELECTRIC FUEL CORPORATION
INDEX
Page
----
PART I - FINANCIAL INFORMATION:
Item 1 - INTERIM FINANCIAL STATEMENTS (UNAUDITED):
--------------------------------------------------
Consolidated Balance Sheets at June 30, 1998 and
December 31, 1997 3-4
Consolidated Statements of Operations for the Six Months and
Three Months ended June 30, 1998 and 1997 5
Consolidated Statements of Changes in Stockholders' Equity
for the Six Months ended June 30, 1998 6
Consolidated Statements of Cash Flows for the Six Months
ended June 30, 1998 and 1997 7-8
Notes to the Consolidated Financial Statements 9
Item 2 - Management's Discussion and Analysis of Financial
----------------------------------------------------------
Condition and Results of Operations 10-14
-----------------------------------
PART II - OTHER INFORMATION:
Item 5 - Other Information 15
Item 6 - Reports on Form 8-K 15
<PAGE>
ELECTRIC FUEL CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
ASSETS
December 31, June 30,
1997 1998
----------- -----------
(Audited) (Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $11,771,816 $ 5,589,595
Marketable debt securities 3,101,846 5,994,783
Accounts receivable:
Trade 801,927 225,244
Other 1,711,037 1,107,713
Inventories 538,682 464,627
----------- -----------
Total current assets 17,925,308 13,381,962
----------- -----------
MARKETABLE DEBT SECURITIES 1,843,326 1,827,522
----------- -----------
FIXED ASSETS:
Cost 7,058,716 6,796,701
Less-accumulated depreciation and amortization 2,304,327 2,558,960
----------- -----------
4,754,389 4,237,741
----------- -----------
OTHER ASSETS net of accumulated amortization 49,182 44,175
----------- -----------
$24,572,205 $19,491,400
=========== ===========
- -----------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the Financial Statements.
<PAGE>
ELECTRIC FUEL CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
=============================
December 31, June 30,
1997 1998
-------------- ------------
(Audited) (unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accruals:
Trade $ 1,169,371 $ 707,359
Other 1,786,163 1,701,310
Advances from Customers 1,014,948 40,000
-------------- ------------
Total current liabilities 3,970,482 2,448,669
LIABILITY FOR EMPLOYEE RIGHTS UPON RETIREMENT
net of amount funded 1,842,749 1,804,830
-------------- ------------
Total Liabilities 5,813,231 4,253,499
-------------- ------------
STOCKHOLDERS' EQUITY
Common stock -- $0.01 par value; authorized -- 28,000,000 shares; issued
and outstanding -- 14,218,161 shares as of December 31, 1997 and 14,293,387
shares as of June 30, 1998; 142,182 142,934
Preferred stock -- $0.01 par value; authorized -- 1,000,000 shares, no shares
outstanding
Additional paid-in capital 57,077,708 57,218,080
Accumulated deficit (36,020,457) (39,751,914)
Unrealized gain (loss) on available-for-sale securities 436 (5,635)
Notes receivable from stockholders (2,440,895) (2,365,564)
-------------- ------------
Total Stockholders' Equity 18,758,974 15,237,901
-------------- ------------
-------------- ------------
$24,572,205 $19,491,400
============== ============
</TABLE>
================================================================================
The accompanying notes are an integral part of the Financial Statements.
<PAGE>
ELECTRIC FUEL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Six months ended June 30, Three months ended June 30,
--------------------------------- ------------------------------------
1997 1998 1997 1998
--------------- --------------- ----------------- ----------------
<S> <C> <C> <C> <C>
REVENUES $2,831,556 $2,851,512 $1,807,584 $1,582,925
--------------- --------------- ----------------- ----------------
RESEARCH AND DEVELOPMENT EXPENSES AND COST OF
REVENUES
Expenses incurred 5,346,927 5,258,668 2,600,009 2,619,932
Less - royalty-bearing grants 600,000 600,000
--------------- --------------- ----------------- ----------------
4,746,927 5,258,668 2,000,009 2,619,932
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 2,050,134 1,570,478 1,123,126 755,747
--------------- --------------- ----------------- ----------------
6,797,061 6,829,146 3,123,135 3,375,679
--------------- --------------- ----------------- ----------------
OPERATING LOSS (3,965,505) (3,977,634) (1,315,551) (1,792,754)
FINANCIAL INCOME - NET 392,299 273,208 195,295 174,361
--------------- --------------- ----------------- ----------------
LOSS BEFORE TAXES ON INCOME (3,573,206) (3,704,426) (1,120,256) (1,618,393)
TAXES ON INCOME 15,000 27,031 15,000 8,049
--------------- --------------- ----------------- ----------------
LOSS FOR THE PERIOD (3,588,206) (3,731,457) (1,135,256) (1,626,442)
=============== =============== ================= ================
LOSS PER SHARE $ (0.29) ($0.30) $ (0.09) $ (0.13)
=============== =============== ================= ================
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 12,479,907 12,644,199 12,487,453 12,752,094
=============== =============== ================= ================
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the Financial Statement.
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (unaudited)
- ----------------------------------------------------------------------------------------------------------------------
Common Stock
-------------------------------- Additional
Shares Amount paid-in capital
-------------- ---------------- -----------------
<S> <C> <C> <C>
BALANCE AT JANUARY 1, 1998 14,218,161 $142,182 $57,077,708
CHANGES DURING THE SIX MONTH PERIOD ENDED
JUNE 30, 1998:
Shares issued in connection with the exercise of option 71,226 $712 $57,694
Shares issued as compensation for services rendered by
directors 4,000 $40 $10,710
Accrued Interest on notes receivable from stockholders $71,968
Payments of interest and principal on notes receivable from
stockholders
Unrealized loss on available-for-sale securities
Loss
-------------- ---------------- -----------------
BALANCE AT
JUNE 30, 1998 14,293,387 $142,934 $57,218,080
============== ================ =================
<CAPTION>
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Unrealized gain
Accumulated on available-for- Notes receivable
deficit sale securities from shareholders Total
--------------- ----------------- ----------------- ------------
<S> <C> <C> <C> <C> <C>
BALANCE AT JANUARY 1, 1998 $(36,020,457) $436 $(2,440,895) $18,758,974
CHANGES DURING THE SIX MONTH PERIOD ENDED
JUNE 30, 1998:
Shares issued in connection with the exercise of option $58,406
Shares issued as compensation for services rendered by
directors $10,750
Accrued Interest on notes receivable from stockholders $(71,968) $0
Payments of interest and principal on notes receivable from
stockholders $147,299 $147,299
Unrealized loss on available-for-sale securities $(6,071) $(6,071)
Loss $(3,731,457) $(3,731,457)
--------------- ----------------- ----------------- ------------
BALANCE AT
JUNE 30, 1998 $(39,751,914) $(5,635) $(2,365,564) $15,237,901
=============== ================= ================= ============
</TABLE>
The accompanying notes are an integral part of the Financial Statements.
page 6
<PAGE>
ELECTRIC FUEL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Six months ended June 30,
------------------------------------
1997 1998
----------------- -----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Loss for the period $ (3,588,206) $ (3,731,457)
Adjustments required to reconcile loss to net cash used in operating activities:
Depreciation and amortization 462,763 438,255
Amortization of net premium (discount) on marketable debt securities * (32,478) 17,413
Liability for employee rights upon retirement -- net 303,862 (37,919)
Shares issued as compensation for services rendered by directors 10,750
Loss on sale of marketable securities 110
Capital loss on sale of fixed assets 4,535
Writedown of fixed assets 442,154
Changes in operating asset and liability items:
Decrease (increase) in accounts receivable 117,612 1,180,007
Decrease (increase) in inventories 200,477 74,055
Increase (decrease) in accounts payable and accruals (429,285) (546,865)
Increase (decrease) in advances from customers (91,938) (974,948)
----------------- -----------------
Net cash used in operating activities $ (3,057,193) $ (3,123,910)
----------------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets (290,586) (451,948)
Proceeds from disposal of fixed assets 88,659
Sale or redemption of (purchase of) marketable debt securities - net * 6,303,804 (2,900,727)
----------------- -----------------
Net cash provided by investing activities $6,013,218 $(3,264,016)
----------------- -----------------
----------------- -----------------
FORWARD $2,956,025 $(6,387,926)
----------------- -----------------
* Reclassified
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the Financial Statements.
<PAGE>
ELECTRIC FUEL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS ( Unaudited)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Six months ended
June 30,
------------------------------------
1997 1998
----------------- -----------------
FORWARD $ 2,956,025 $(6,387,926)
----------------- -----------------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment on note receivable from Stockholders $ 14,096 $ 147,299
Proceeds from exercise of warrants and options 6,931 58,406
----------------- -----------------
Net cash provided by financing activities 21,027 205,705
----------------- -----------------
INCREASE IN CASH AND CASH EQUIVALENTS 2,977,052 (6,182,221)
BALANCE OF CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 12,662,776 11,771,816
----------------- -----------------
BALANCE OF CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 15,639,828 $ 5,589,595
================= =================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION - CASH PAID DURING THE PERIOD FOR:
Interest $ 66 $ 716
================= =================
Advances to income tax authorities $ 50,496 $ 40,371
================= =================
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the Financial Statements.
<PAGE>
ELECTRIC FUEL CORPORATION
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, 1997.
2. Effects of Recent Pronouncements
a. In February 1997, the FASB issued Statement No. 128, "Earnings per
share" ("Statement 128"), which is effective as from 1997. All
earning per share amounts for all periods have been presented and
where appropriate restated to conform to the Statement 128
requirements. Consequently, the loss per share for the quarter
ended June 30, 1997 increased from $0.08, as previously reported,
to $0.09 as reported in these financial statements, and the loss
per share for the six months ended June 30, 1997 increased from
$0.26, as previously reported, to $0.29 as reported in these
financial statements.
b. In June 1997, the FASB issued Statement No. 130 "Reporting
Comprehensive Income" (Statement 130), which is effective for
fiscal years beginning after December 15, 1997. Except for
unrealized gains on available-for-sale securities in immaterial
amounts, the provisions of Statement 130 require no additional
reporting by the Company.
<PAGE>
ELECTRIC FUEL CORPORATION
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, unless
such amounts are more than 1.0 million, in which event such amounts have been
rounded to the nearest hundred 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, 1997 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.
General
From its inception, the Company has been engaged principally in the research,
design, development and commercialization of an innovative, advanced zinc-air
battery. To date, the main application for the Company's technology has been a
system for powering zero emission electric vehicles. In part, because the market
for electric vehicles has not demonstrated previously anticipated levels of
growth in 1997, the Company began a strategic shift to actively expand its
activities into additional applications for its zinc-air battery technology. In
January 1998, the Company announced the creation of three market-related
divisions to expand its zinc-air battery technology for wider applications. The
three divisions are Electric Vehicle, Consumer Batteries, and Defense and Safety
Products.
Results of Operations:
Three months ended June 30, 1998 compared to the three months ended June 30,
1997.
Revenues:
Revenues for the second quarter of 1998 totaled $1.6 million compared with $1.8
million in the comparable period in 1997, a decrease of $200,000. During 1998,
the Deutsche Post AG ("Deutsche Post") and the Company agreed to extend the
<PAGE>
operations of the Field Test through May, 1998. Following the completion of the
Field Test, the Deutsche Post and the Company agreed to mutually release each
other from any financial claims regarding the Field Test, including additional
funding due the Company or repaying advances made by the Deutsche Post to the
Company with respect to Opel batteries, which were previously subject to a
dispute. Consequently revenues for the second quarter were principally derived
from recognizing the previously deferred advances, as well as from activities
relating to the Field Test extension (reflecting coverage of expenses by the
Deutsche Post). Additionally, the Company recognized revenues from the sale of
Survivor Locator Lights. The Company also recognized revenues from the sale of
additional batteries to the Deutsche Post, and began recognizing revenues in
connection with various defense R&D contracts.
Revenues for the second quarter of 1997, were principally derived from fees
collected in relation to a preliminary license agreement completed with
Vattenfall AB ("Vattenfall"). Additionally, the Company continued to recognize
revenues relating to its activities in the Deutsche Post Field Test program. The
Company also continued to recognize revenues from Phase 2 of its agreement with
STN Atlas Elektronic GmbH ("STN") to develop a high power zinc oxygen battery
for torpedoes.
Expenses:
Research and development expenses and cost of revenues for the second quarter of
1998 were $2.6 million compared with $2.6 million for the second quarter of
1997. 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. While there was no change in the expenses from the second quarter of
1997, there was a change in the allocation of expenses. This was principally
attributable to a reduction of expenses related to Electric Vehicle battery
development. This overall reduction was offset by increases in the costs
associated with Consumer Battery development, and production of increased
quantities of Survivor Locator Lights in the Defense and Safety Division.
Expenses also included a write off of certain production equipment related to
the earlier generation Field Test version of the Electric Vehicle Battery, for a
net amount of approximately $430,000. With regard to the Company's R&D program,
since the Company's 1998 grant applications have not yet been approved by the
Research Committee of the Office of the Chief Scientist of the Ministry of
Industry and Trade, no royalty bearing grants were recognized in the second
quarter of 1998. During the second quarter of 1997, $600,000 of royalty-bearing
grants were recognized, which reduced R&D expenses during this period. As
previously announced, the Company has recently entered into an agreement to
complete development of a battery for powering transit buses, in connection with
a program to develop a new hybrid propulsion system in conjunction with General
Electric Corporate Research and Development ("General Electric"). The program
will be partially funded by the Israel - US Binational Industrial Research and
Development (BIRD) Foundation. Accordingly, the Company expects that, for the
balance of 1998 and through mid 1999, expenditures in connection with the
Electric Vehicle battery, will increase as compared to the first half of 1998.
R&D expenses and cost of operations related to Consumer Battery and Defense and
Safety applications are also
<PAGE>
expected to continue to increase for the balance of 1998, as the Company
intensifies its efforts in these new areas.
Selling, general and administrative expenses for the second quarter of 1998 were
$756,000 vs. $1.1 million in the second quarter of 1997. The decrease was
primarily attributable to reduced salaries and professional fees during the
second quarter of 1998. The Company expects further increases in selling,
general and administrative expenses, particularly with respect to marketing
expenses, as the Company expands the applications for its technology.
Results of Operations:
Six months ended June 30, 1998 compared to the six months ended June 30, 1997.
Revenues:
Revenues for the first half of 1998 increased slightly to approximately $2.9
million vs. $2.8 million in the comparable period in 1997. During 1998, the
Deutsche Post and the Company agreed to extend the operations of the Field Test
through May, 1998. Following the completion of the Field Test, the Deutsche Post
and the Company agreed to mutually release each other from any financial claims
regarding the Field Test, including additional funding due the Company or
repaying advances made by the Deutsche Post to the Company with respect to Opel
batteries, which were previously subject to a dispute. Consequently revenues for
the first half of 1998 were principally derived from recognizing the previously
deferred advances, as well as from activities relating to the Field Test
extension (reflecting coverage of expenses by the Deutsche Post). Additionally,
the Company recognized revenues from the sale of additional batteries to the
Deutsche Post as well as sales of Electric Vehicle batteries to Edison
Termoelettrica, SpA ("Edison"). The Company also recognized revenues from the
sale of Survivor Locator Lights, and began recognizing revenues in connection
with various defense R&D contracts.
Revenues for the first half of 1997, were principally derived from fees
collected in relation to a preliminary license agreement completed with
Vattenfall. Additionally, the Company continued to recognize revenues relating
to its activities in the Deutsche Post Field Test program. The Company also
continued to recognize revenues from Phase 2 of its agreement with STN to
develop a high power zinc oxygen battery for torpedoes.
Expenses
Research and development expenses and cost of revenues were $5.3 million in the
first half of 1998 vs. $5.3 million in the comparable period in 1997. 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.
While there was no change in the expenses from the first half of 1997, there was
a change in the allocation of expenses. This was principally attributable to a
reduction of expenses related to Electric Vehicle battery development. This
overall reduction was offset by
<PAGE>
increases in the costs associated with Consumer Battery development, and
production of increased quantities of Survivor Locator Lights in the Defense and
Safety Division. Expenses also included a write off of certain production
equipment related to the earlier generation Field Test version of the Electric
Vehicle Battery, for a net amount of approximately $430,000. With regard to the
Company's R&D program, since the Company's 1998 grant applications have not yet
been approved by the Research Committee of the Office of the Chief Scientist of
the Ministry of Industry and Trade, no royalty bearing grants were recognized in
the second quarter of 1998. During the first half of 1997, $600,000 of
royalty-bearing grants were recognized, which reduced R&D expenses during this
period. As previously announced, the Company has recently entered into an
agreement to complete development of a battery for powering transit buses, in
connection with a program to develop a new hybrid propulsion system in
conjunction with General Electric. The program will be partially funded by the
Israel - US Binational Industrial Research and Development (BIRD) Foundation.
Accordingly, the Company expects that, for the balance of 1998 and through mid
1999, expenditures in connection with the Electric Vehicle battery, will
increase as compared to the first half of 1998. R&D expenses and cost of
operations related to Consumer Battery and Defense and Safety applications are
also expected to continue to increase for the balance of 1998, as the Company
intensifies its efforts in these new areas.
Selling, general and administrative expenses decreased in the first half of 1998
to $1.6 million vs. $2.1 million in the comparable period in 1997. This decrease
was primarily attributable to reduced salaries and professional fees during the
first half of 1998. The Company expects further increases in selling, general
and administrative expenses, particularly with respect to marketing expenses, as
the Company expands the applications for its technology.
Impact of Year 2000
The Company has instituted a program to analyze all computer software and
hardware, as well as other operating equipment that are reliant on date related
functions, to ensure year 2000 compliance. This program is expected to be
completed prior to December 31, 1998. At the present time, the Company does not
expect to incur material expenditures to resolve year 2000 issues.
Liquidity and Capital Resources
As of June 30, 1998, the Company had cash, cash equivalents and financial
investments of approximately $13.4 million compared with $16.7 million as of
December 31, 1997.
The Company used available funds during the first half of 1998 primarily for
continued research and development expenditures, and other working capital
needs. The Company increased its net investment in fixed assets by approximately
$360,000 during the six months ended June 30, 1998. However, fixed assets were
adjusted downward to reflect a write off of certain production equipment related
to the earlier
<PAGE>
generation Field Test version of the Electric Vehicle Battery. As a result, the
balance of fixed assets as at June 30, 1998 was $6.8 million.
Under an existing line of credit with the First International Bank of Israel
Ltd., the Company had outstanding issued letters of credit and bank guarantees
totaling approximately $447,000 as of June 30, 1998.
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 the second quarter of 1999. However, additional strategic
alliances may 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 Electric Vehicle System. The Company is also using its resources
to research and develop other applications exploiting its proprietary
technology, including batteries for consumer electronic devices. Accordingly,
the Company may be required to seek additional funding or pursue other options,
such as joint ventures or other strategic relationships. The Company continues
to consider financing alternatives when presented and, if financing becomes
available on satisfactory terms, including prices, the Company may obtain
additional funding, including through the issuance of equity securities.
<PAGE>
ELECTRIC FUEL CORPORATION
Part II
Item 2
1. On June 8, 1998, the Company issued 2,000 shares to each of Lawrence M.
Miller and Jack E. Rosenfeld, directors of the Company, at a price of
$2.6875 per share, for services performed on behalf of the Company. The
shares were not registered under the Securities Act of 1933, as amended
(the "Act"), and were issued in reliance on the exemption from registration
under Section 4(2) of the Act as a transaction not involving a public
offering. The recipients, by virtue of their relationship with the Company,
had access to information about the Company.
Item 5
1. Under recent changes to the Federal Proxy rules, if a stockholder who
wishes to present a proposal at the Company's 1999 Annual Meeting that will
not be included in the Company's proxy statement, fails to notify the
Company by June 1, 1999, then the proxies that management solicits for the
1999 Annual meeting will include discretionary authority to vote on the
stockholder's proposal if it is properly brought before the meeting.
Item 6.
1. No reports on Form 8-K were filed during the second quarter of 1998.
<PAGE>
ELECTRIC FUEL CORPORATION
- --------------------------------------------------------------------------------
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: Chairman of the Board and
Chief Financial Officer
Dated: August 11, 1998
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 5,589,595
<SECURITIES> 5,994,783
<RECEIVABLES> 225,244
<ALLOWANCES> 0
<INVENTORY> 464,627
<CURRENT-ASSETS> 13,381,962
<PP&E> 6,796,701
<DEPRECIATION> 2,558,960
<TOTAL-ASSETS> 19,491,400
<CURRENT-LIABILITIES> 2,448,669
<BONDS> 0
0
0
<COMMON> 142,934
<OTHER-SE> 15,094,967
<TOTAL-LIABILITY-AND-EQUITY> 19,491,000
<SALES> 0
<TOTAL-REVENUES> 2,851,512
<CGS> 0
<TOTAL-COSTS> 5,258,668<F1>
<OTHER-EXPENSES> 0<F1>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (273,208)
<INCOME-PRETAX> (3,704,426)
<INCOME-TAX> 27,031
<INCOME-CONTINUING> (3,731,457)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,731,457)
<EPS-PRIMARY> (0.30)
<EPS-DILUTED> (0.30)
<FN>
<F1>Total costs includes research and development expenses and cost 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>
</TABLE>
