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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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): DECEMBER 31, 2002
ELECTRIC FUEL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 0-23336 95-4302784
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
632 BROADWAY, SUITE 301, NEW YORK, NEW YORK 10012
(Address of Principal Executive Offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 529-9200
(Former name or former address, if changed since last report)
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Page 1 of 37
Exhibit Index appears on Page 4
ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE.
In accordance with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, we note that certain statements set forth in this
Current Report on Form 8-K may constitute forward-looking statements, as
defined in the Private Securities Litigation Reform Act of 1995. These
statements are subject to various risks and uncertainties that may cause actual
results to vary significantly. These risks and uncertainties include, but are
not limited to, risks relating to: product and technology development; the
uncertainty of the market for our products; changing economic conditions; delay,
cancellation or non-renewal of purchase orders; significant future capital
requirements; our ability to quickly and smoothly execute the change in
leadership as a result of our current CEO's resignation; and other risk factors
detailed in our most recent annual report on Form 10-K for the fiscal year ended
December 31, 2001, our most recent Quarterly Report on Form 10-Q, and other
filings with the Securities and Exchange Commission. Readers should consider all
of these risk factors as well as other information contained in this report.
On January 6, 2003, we publicly disseminated a press release (the "Press
Release") announcing the following items:
1. Pursuant to the terms of a Securities Purchase Agreement dated
December 31, 2002 (the "Purchase Agreement) by and between Electric Fuel
Corporation and three institutional investors (the "Investors"), we issued and
sold to the Investors (i) an aggregate principal amount of 9% Secured
Convertible Debentures due June 30, 2005 (the "Debentures"); (ii) Series A
Warrants to purchase an aggregate of 1,166,700 shares of our common stock at any
time prior to December 31, 2007 at a price of $0.84 per share; (iii) Series B
Warrants to purchase an aggregate of 1,166,700 shares of our common stock at any
time prior to December 31, 2007 at a price of $0.89 per share; and (iv) Series C
Warrants to purchase an aggregate of 1,166,700 shares of our common stock at any
time prior to December 31, 2007 at a price of $0.93 per share (collectively, the
"Warrants").
We are required to register the shares of common stock underlying the
Debentures and the Warrants with the Securities and Exchange Commission in a
registration statement on Form S-3.
Under the terms of the Purchase Agreement, we have granted the Purchasers a
security interest in the assets connected with our U.S. operations, including
our IES subsidiary, as well as in our stock of IES and our other subsidiaries,
all pursuant to the terms of separate security agreements filed herewith. We
also committed ourselves to certain affirmative and negative covenants customary
in agreements of this kind.
We will use the net proceeds of this offering, other than the portion being
paid to I.E.S. Electronics Industries U.S.A., Inc. as described below, for
working capital purposes.
In connection with this offering, we entered into an agreement with IES,
the holder of our $1,000,000 promissory note due June 30, 2003 issued in
connection with our acquisition of substantially all the assets of IES, to
retire this note in exchange for a payment of $750,000 out of the proceeds of
this offering. We further agreed to amend IES's $400,000 promissory note due
December 31, 2003 to reflect a principal of $450,000, and to amend IES's
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$400,000 convertible promissory note due June 30, 2004 to (i) reflect a
principal of $450,000, and (ii) reset the conversion rate of the note to $0.75
as to the first $150,000 of the principal amount, to $0.80 as to the second
$150,000 of the principal amount, and to $0.85 as to the final $150,000 of the
principal amount. We also agreed to register the shares of our common stock
issuable upon conversion of this convertible note.
The foregoing description of the Securities Purchase Agreement and the
other agreements entered into in connection therewith is qualified in its
entirety by reference to the agreement itself. A copy of the Securities Purchase
Agreement (including the forms of instruments and agreements attached as
exhibits thereto) is attached to this report as Exhibits 4.1 through 4.7 hereto,
and is incorporated herein by reference.
2. In a separate transaction, the Investors purchased 1,625,000 of
our shares from IES, and acquired an option to purchase up to an additional
1,500,000 of IES's shares.
3. We also announced that we had reached a settlement with our former
CEO. The series of payments to the former executive, which stretch out over 36
months, amount to approximately of the sum that had previously been accrued in
our financial statements on behalf of the executive.
A copy of the press release is included herein as Exhibit 99.1. The
information contained in the press release is incorporated by reference into
this Item 5 and the foregoing description of such document is qualified in its
entirety by reference to this exhibit.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
(c) Exhibits. A list of exhibits required is given in the Exhibit Index
that precedes the exhibits filed with this report.
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.
ELECTRIC FUEL CORPORATION
(Registrant)
By: /s/ Robert S. Ehrlich
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Name: Robert S. Ehrlich
Title: President, Chairman of the Board
and Chief Executive Officer
Dated: January 6, 2003
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EXHIBIT INDEX
The following exhibits are filed with the Current Report on Form 8-K.
Exhibit
Number Description
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4.1 . . . . Securities Purchase Agreement dated December 31, 2002 between the
Company and the Investors
4.2 . . . . Form of 9% Secured Convertible Debenture due June 30, 2005
4.3 . . . . Form of Warrant
4.4 . . . . Form of Security Agreement
4.5 . . . . Form of Intellectual Property Security Agreement
99.1 . . . Press release dated January 6, 2003 issued in connection with
the Securities Purchase Agreement between the Company and the
Investors