<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: March 31, 2000
Commission file No. 0-23336
ELECTRIC FUEL CORPORATION
-----------------------------------------------------------
Exact name of registrant as specified in its charter
Delaware 954302784
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
120 Wood Avenue South, Suite 300, Iselin, New Jersey 08830
(Address of principal executive offices) (Zip Code)
(732) 635-7100
-----------------------------------------------------------
(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 of March 31, 2000 was 18,145,809.
<PAGE>
INDEX
PART I - FINANCIAL INFORMATION:
<TABLE>
<CAPTION>
Item 1 - Interim Financial Statements (Unaudited):
-------------------------------------------------
<S> <C>
Consolidated Balance Sheets at March 31, 2000 and
December 31, 1999 3-4
Consolidated Statements of Operations for the Three Months
Ended March 31, 2000 and 1999 5
Consolidated Statements of Changes in Stockholders' Equity
for the Three Months Ended March 31, 2000 6
Consolidated Statements of Cash Flows for the Three Months
Ended March 31, 2000 and 1999 7-8
Notes to the Consolidated Financial Statements 9
Item 2 - Management's Discussion and Analysis of Financial
----------------------------------------------------------
Condition and Results of Operations 10-13
-----------------------------------
Item 3 - Quantitative and Qualitative Disclosures About Market
-----------------------------------------------------
Risk 13
----
PART II - OTHER INFORMATION:
Item 2 - Change in Securities 13
-----------------------------
Item 4 - Submission of Matters to a Vote of Security Holders 13
------------------------------------------------------------
Item 6 - Exhibits and Reports on Form 8-K 14
-----------------------------------------
SIGNATURES 15
</TABLE>
Page 2
<PAGE>
ELECTRIC FUEL CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
March 31, December 31,
2000 1999
--------------- -----------------
ASSETS (Unaudited) (Audited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 6,352,431 $ 2,555,645
Marketable debt securities
Accounts receivable:
Trade 510,372 498,077
Other 1,081,358 950,390
Inventories 1,243,910 1,045,480
--------------- -----------------
Total current assets 9,188,071 5,049,592
--------------- -----------------
NOTES RECEIVABLE FROM STOCKHOLDERS 930,026
--------------- -----------------
FIXED ASSETS:
Cost 8,079,211 7,676,698
Less - accumulated depreciation and amortization 3,545,679 3,510,929
--------------- -----------------
4,533,532 4,165,769
--------------- -----------------
Severance Pay Fund 901,208 813,535
--------------- -----------------
$15,552,838 $10,028,896
=============== =================
- -----------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the Financial Statements.
Page 3
<PAGE>
ELECTRIC FUEL CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
March 31, December 31,
2000 1999
--------------- ----------------
(Unaudited) (Audited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accruals:
Trade $ 1,621,678 $ 2,026,175
Other 1,863,259 1,400,763
--------------- ----------------
Total current liabilities 3,484,937 3,426,938
LIABILITY FOR EMPLOYEE RIGHTS UPON RETIREMENT 2,488,159 2,359,599
--------------- ----------------
Total Liabilities 5,973,096 5,786,537
--------------- ----------------
STOCKHOLDERS' EQUITY:
Common stock - $0.01 par value; authorized -28,000,000 shares;
issued - 15,728,387 shares and 18,151,142 shares as of
December 31, 1999 and March 31, 2000 respectively; outstanding -
15,723,054 shares and 18,145,809 shares as of December 31,
1999 and March 31, 2000 respectively. 181,511 157,284 *
Preferred stock - $0.01 par value; authorized -
1,000,000 shares, no shares outstanding
Additional paid-in capital 65,034,942 58,678,015 *
Accumulated deficit (53,942,462) (51,468,715)
Treasury stock, at cost (common stock - 5,333 shares) (37,731) (37,731) *
Notes receivable from stockholders (1,656,518) (3,086,494)
--------------- ----------------
Total Stockholders' Equity 9,579,742 4,242,359
--------------- ----------------
--------------- ----------------
$ 15,552,838 $ 10,028,896
=============== ================
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
*Reclassified
The accompanying notes are an integral part of the Financial Statements.
Page 4
<PAGE>
ELECTRIC FUEL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
Three months ended March 31,
------------------------------
2000 1999
------------- -------------
<S> <C> <C>
REVENUES $ 652,946 $ 547,972
------------- -------------
RESEARCH AND DEVELOPMENT EXPENSES AND COST OF REVENUES 2,090,221 2,136,050
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 1,031,912 874,328
------------- -------------
3,122,133 3,010,378
------------- -------------
OPERATING LOSS (2,469,187) (2,462,406)
FINANCIAL INCOME (EXPENSES), NET (4,560) 75,773
------------- -------------
LOSS BEFORE TAXES ON INCOME (2,473,747) (2,386,633)
TAXES ON INCOME 8,267
------------- -------------
LOSS FOR THE PERIOD (2,473,747) (2,394,900)
============= =============
LOSS PER SHARE $ (0.14) $ (0.17)
============= ============
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 17,166,343 14,048,054
============= ============
- ---------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the Financial Statements.
Page 5
<PAGE>
ELECTRIC FUEL CORPORATION
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited)
====================================================================================================================================
Common Stock
-----------------------
Notes
Additional Accumulated Treasury receivable from
Shares Amount paid-in capital deficit stock shareholders Total
---------- ---------- --------------- ------------- -------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT JANUARY 1, 2000 15,728,387 * $ 157,284 * $58,678,015 $ (51,468,715) $(37,731) * $(3,086,494) $ 4,242,359
CHANGES DURING THE THREE
MONTH PERIOD ENDED
MARCH 31, 2000:
Accrued Interest on notes
receivable from stockholders $ (11,699) $ (11,699)
$ 1,441,675 $ 7,822,829
Issuance of shares, net 2,422,755 24,227 6,356,927
Loss $ (2,473,747) $(2,473,747)
---------- ---------- -------------- ------------- -------- ----------- -----------
BALANCE AT
MARCH 31, 2000 18,151,142 $ 181,511 $65,034,942 $ (53,942,462) $(37,731) $(1,656,518) $ 9,579,742
========== ========== ============== ============= ======== =========== ===========
====================================================================================================================================
* Reclassified
</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>
====================================================================================================================================
Three months ended March 31,
---------------------------------
2000 1999
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Loss for the period $(2,473,747) $(2,394,900)
Adjustments required to reconcile loss to net cash used in operating activities:
Depreciation and amortization 34,750 224,918
Expenses due to options granted to suppliers 107,000
Interest accrued on notes from stockholders (20,069) (9,733)
Liability for employee rights upon retirement, net 40,887 16,606
Changes in operating asset and liability items:
(Increase) Decrease in accounts receivable (143,263) 415,343
(Increase) Decrease in inventories (198,430) (32,622)
Increase (Decrease) in accounts payable and accruals 57,999 (16,289)
Decrease in advances from customers (87,964)
----------- -----------
Net cash used in operating activities $(2,594,873) $(1,884,641)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets (402,513) (460,662)
Loans granted to shareholders (921,656)
Sale of marketable debt securities, net 2,145,571
----------- -----------
Net cash (used in) provided by investing activities $(1,324,169) $ 1,684,909
----------- -----------
----------- -----------
FORWARD $(3,919,043) $ (199,732)
----------- -----------
</TABLE>
The accompanying notes are an integral part of the Financial Statements.
Page 7
<PAGE>
ELECTRIC FUEL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
<TABLE>
<CAPTION>
=======================================================================================================================
Three months ended
March 31,
---------------------------------
2000 1999
----------- -----------
<S> <C> <C>
FORWARD $(3,919,043) $ (199,732)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of share capital, net 3,062,500
Proceeds from exercise of options and warrants 4,653,329
----------- -----------
Net cash provided by financing activities 7,715,829
----------- -----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 3,796,787 (199,732)
BALANCE OF CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 2,555,645 5,242,555
----------- -----------
BALANCE OF CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 6,352,432 $ 5,042,823
=========== ===========
SUPPLEMENTARY INFORMATION ON ACTIVITIES NOT
INVOLVING CASH FLOW:
Issuance of share capital (including additional paid-in capital)
upon notes receivable $ 658,325
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION - CASH (PAID) RECEIVED DURING THE PERIOD FOR:
Interest $ 56,636 $ (548)
=========== ===========
Advances to income tax authorities $ (20,176) $ (10,040)
=========== ===========
=======================================================================================================================
</TABLE>
The accompanying notes are an integral part of the Financial Statements.
Page 8
<PAGE>
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
GENERAL
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 financial statements have been condensed or
omitted. These unaudited statements should be read in conjunction with the
Company's audited financial statements and notes thereto for the year ended
December 31, 1999.
Page 9
<PAGE>
ITEM 2. 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.
General
The Company has experienced significant fluctuations in the sources and
amounts of its revenues and expenses, and the Company believes that the
following comparisons of results of operations for the periods presented do not
provide a meaningful indication of the development of the Company. During these
periods, the Company has received periodic lump-sum payments relating to
licensing and other revenues from its strategic partners; these payments have
been based on the achievement of certain milestones, rather than ratably over
time. The Company's expenses have been based upon meeting the contractual
requirements under its agreements with various strategic partners and,
therefore, have also varied according to the timing of activities, such as the
need to provide prototype products and to establish and engineer refueling and
regeneration facilities. The Company's research and development expenses have
been offset, to a limited extent, by the periodic receipt of research grants
from the Israeli Chief Scientist. The Company expects that, because of these and
other factors, including general economic conditions and delays due to
legislation and regulatory and other processes and the development of competing
technologies, future results of operations may not be meaningfully compared with
those of current and prior periods. Thus, the Company believes that period-to-
period comparisons with its past results of operations should not be relied upon
as indications of future performance.
The Company incurred significant operating losses for the years ended
December 31, 1999, 1998 and 1997. While the Company expects to derive revenues
from the sale of batteries for portable electronic devices, components of the
Electric Fuel Electric Vehicle System, including refueling and Electric Fuel
services and defense and safety products manufactured by the Company, as well as
from licensing rights to the Electric Fuel technology to third parties, there
can be no assurance that the Company will ever derive such revenues or achieve
profitability.
Functional Currency
The Company's management considers the United States dollar to be the
currency of the primary economic environment in which the Company's Israeli
subsidiary, Electric Fuel (E.F.L.) Limited ("EFL"), operates. EFL has therefore
adopted and is using the United States dollar as its functional currency.
Further, the Company believes that the operations of EFL's subsidiaries are an
integral part of the Israeli operations. Transactions and balances originally
denominated in U.S. dollars are presented at the original amounts. Gains and
losses arising from non-dollar transactions and balances are included in net
income.
Page 10
<PAGE>
Forward-Looking Statements
When used in this discussion, the words "believes," "anticipated,"
"expects" 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, 1999 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 March 31, 2000, compared to the three months ended March
31, 1999.
Revenues. Revenues for the first quarter of 2000 totaled $653,000 compared
with $548,000 in the comparable period in 1999, an increase of $105,000. During
the first quarter of 2000, the Company recognized revenues from the sale of
Survivor Locator Lights and sale of consumer batteries.
During the first quarter of 2000, revenues were $286,000 for the Defense
and Safety division (compared to $256,000 in 1999), $0 for the Electric Vehicle
division (compared to $287,000 for 1999) and $363,000 for the Consumer Battery
division (there were no revenues for this division in 1999).
Research and development expenses and cost of revenues. Research and
development expenses and cost of revenues for the first quarter of 2000 were
$2.1 million compared with $2.1 million for the first quarter of 1999. 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.
With regard to the Company's R&D program, since the Company's 2000 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, the Chief
Scientist royalty-bearing grants have not been recognized in the first quarter
of 2000. During the first quarter of 1999, no royalty-bearing grants were
recognized, as the 1999 Chief Scientist application was not approved until later
in the year. R&D expenses and cost of operations related to Consumer Battery and
Defense and Safety applications are expected to continue to increase for 2000,
as the Company intensifies its efforts in these new areas.
Direct expenses for the Company's three divisions for the first quarter of
2000 were $0.21 million (1998: $0.36 million), $0.16 million (1998: $0.62
million), and $1.93 million (1998: $1.40 million) in the Defense and Safety,
Electric Vehicle and Consumer Battery divisions, respectively.
Selling, general and administrative expenses. Selling, general and
administrative expenses for the first quarter of 2000 were $1,032,000 compared
with $874,000 in the first quarter of 1999. 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.
Page 11
<PAGE>
Financial expenses. Financial expenses, net of interest income and exchange
differentials, totaled approximately $5,000 in the first quarter of 2000
compared to $76,000 financial income in the same quarter in 1999.
Net losses. Due to the factors cited above, the Company reported a net loss
of $2.5 million in the first quarter of 2000 compared with a net loss of $2.4
million in the first quarter of 1999.
Liquidity and Capital Resources
As of March 31, 2000, the Company had cash, cash equivalents and financial
investments of approximately $6.4 million compared with $2.6 million as of
December 31, 1999.
The Company used available funds in the first quarter of 2000 primarily for
continued research and development expenditures, and other working capital
needs. The Company increased its investment in fixed assets by $403,000,
primarily in the consumer battery division, during the quarter ended March 31,
2000.
On May 15, 2000 the Company announced that the Company and Koor Industries
Ltd. ("Koor") had entered into an agreement pursuant to which Koor will acquire
1 million shares of the Company's common stock at a price of $10 per share, for
a total cash investment of $10 million (with the number of shares being subject
to possible upwards adjustment based on sales of the Company's stock at less
than $10/share during the six months following the investment). The parties have
agreed that upon completion of this financing, the above transaction replaces
the agreements previously announced by the Company and Koor on March 15, 2000
and the Company will not proceed with the acquisition of Koor's subsidiary
Tadiran Batteries Ltd., as had been previously announced.
EFL presently has a line of credit ("the Credit Facility") with the First
International Bank of Israel Ltd. ("FIBI"). Borrowings under the Credit Facility
bear interest at FIBI's prime rate + 2% per annum, are unconditionally
guaranteed by the Company and are secured by a pledge of foreign currency
deposits in the amount of NIS 3.8 million (approximately $944,000).
Additionally, the Credit Facility imposes financial and other covenants on EFC
and EFL. The agreement establishing the Credit Facility expired on January 20,
2000, and the Company is currently negotiating the renewal by FIBI. The Credit
Facility provides EFL with a line of credit in the maximum principal amount of
NIS 3.8 million (approximately $944,000), which can be used as credit support
for various obligations of EFL. The Company has an additional credit line of up
to $750,000 guaranteed by the Company's receivables (up to 75% of the
receivables total amount as determined from time to time). As of March 31, 2000,
FIBI had issued letters of credit and bank guarantees totaling approximately
$210,000.
The Company has no long term debt outstanding, and is using its cash
reserves and revenues from operations primarily to continue development of
batteries for consumer electronic devices, as well as to participate in the BIRD
and FTA Electric Vehicle programs. Furthermore, the Company plans to establish
in 2000 a commercial production line and prepare for market penetration of its
new Zinc-Air battery for cellular telephones.
Page 12
<PAGE>
The Company believes that its present cash position and cash flows from
operations will be sufficient to satisfy the Company's estimated cash
requirements for at least 12 months. However, the Company will seek additional
funding in order to accelerate its future plans.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
The Company is exposed to the impact of interest rate changes and foreign
currency fluctuations due to its international sales, production and funding
requirements.
The Company's research, development and production activities are primarily
carried out by the Company's Israeli subsidiary EFL at the Company's facility in
Beit Shemesh, and accordingly the Company has sales and expenses in new Israeli
shekels. However, the majority of the Company's sales are made outside Israel in
U.S dollars, and a substantial portion of the Company's costs are incurred in
U.S. dollars. Therefore, the Company's functional currency is the U.S. dollar.
Although the Company has a line of credit that may be affected by interest
rate changes, given the Company's level of borrowing, the Company does not
believe the market risk from interest rate changes is material.
PART II - OTHER INFORMATION
Item 2. Changes in Securities.
In March 2000, the Company issued 3,268 and 3,914 shares of the Company's
common stock to Dov B. Ben Meir and G. S. Schwartz & Co. Inc. (the
"Consultants"), respectively, in payment of fees (totaling approximately
$15,327) for consulting services rendered by the Consultants to the Company in
1998 and 1999. The number of shares issued to the Consultants was calculated
based on the trading price of the Company's common stock at the time the
services were rendered. 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 provided by Section 4(2) of the Act as transactions by an
issuer not involving a public offering.
Item 4. Submission of Matters to a Vote of Security Holders.
The Company held its 1999 Annual Meeting of Stockholders on February 16,
2000. The following matters were voted upon at the meeting with the accompanying
results:
1. Election of Class II directors:
<TABLE>
<CAPTION>
Votes Votes
for withheld
----- --------
<S> <C> <C>
Jack E. Rosenfeld 12,043,441 9,170
Lawrence M. Miller 12,043,441 9,170
</TABLE>
Page 13
<PAGE>
2. Fixing the number of Class II directors at two.
Votes Votes Votes
for withheld abstaining
--- -------- ----------
12,000,044 27,325 25,242
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits filed herewith: Exhibit 27 - Financial Data Schedule
(b) The following reports on Form 8-K were filed during the first
quarter of 2000:
<TABLE>
<CAPTION>
Date Items Reported
---- --------------
<S> <C>
March 24, 2000 Announcement of the proposed acquisition of
Tadiran Batteries Ltd. by the Company and the
proposed investment in the Company by Koor
Industries Limited.
January 24, 2000 January 2000 private placement of 385,000
shares of the Company's common stock.
January 18, 2000 (as amended on Change in the Company's Independent
January 21, 2000) Accountants.
January 7, 2000 December 1999 private placement of 1,425,000
shares of the Company's common stock and
warrants to purchase an additional 1,425,000
shares of the Company's common stock.
</TABLE>
Page 14
<PAGE>
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 thereunto duly authorized.
ELECTRIC FUEL CORPORATION
(Registrant)
/s/ Robert S. Ehrlich
By:___________________________
Name: Robert S. Ehrlich
Title: Chairman of the Board and
Chief Financial Officer
Dated: May 15, 2000
Page 15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-2000
<CASH> 6,352,431
<SECURITIES> 0
<RECEIVABLES> 1,591,730
<ALLOWANCES> 0
<INVENTORY> 1,243,910
<CURRENT-ASSETS> 9,188,071
<PP&E> 8,079,211
<DEPRECIATION> 3,545,679
<TOTAL-ASSETS> 15,552,838
<CURRENT-LIABILITIES> 3,484,937
<BONDS> 0
0
0
<COMMON> 181,511
<OTHER-SE> 9,398,231
<TOTAL-LIABILITY-AND-EQUITY> 15,552,838
<SALES> 0
<TOTAL-REVENUES> 652,946
<CGS> 0
<TOTAL-COSTS> 2,090,221<F1>
<OTHER-EXPENSES> 0<F1>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,560
<INCOME-PRETAX> (2,473,747)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,473,747)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,473,747)
<EPS-BASIC> (0.14)
<EPS-DILUTED> (0.14)
<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>
