SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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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 28, 1999
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Electric Fuel Corporation
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-23336 95-4302784
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(State or Other Jurisdiction (Commission (IRS Employer
or Incorporation) File Number) Identification No.)
885 Third Avenue, Suite 2900, New York, New York 10022
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (212) 826-5536
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(Former Name or Former Address, if Changed Since Last Report)
Item 5. Other Events
Pursuant to a Securities Purchase Agreement dated December 28, 1999, by and
between Electric Fuel and a group of private investors, including Mr. Leon S.
Gross, a director of Electric Fuel and one of our existing shareholders, and
subject to certain conditions and limitations contained in the Agreement, we
issued 1,425,000 shares of our Common Stock, $.01 par value per share, at a
price of $2.00 per share, for a total purchase price of $2,850,000. We also
issued warrants to purchase an additional 1,425,000 shares of our Common Stock
to the purchasers. Of these, warrants to purchase 950,000 shares of Common
Stock have an exercise price of $1.25 per share and are exercisable for a period
of 6 months, and warrants to purchase 475,000 shares possess an exercise price
of $4.50 per share and are exercisable for a period of one year. The shares and
warrants were issued in a private placement under the Securities Act of 1933, as
amended, in reliance on the exemption therefrom provided by Section 4 (2) of the
Securities Act. We will use the $2,707,500 in net proceeds of this offering for
marketing and sales and commencement of initial automated production, as well as
for the of broadening our product line and other general corporate purposes.
As a result of the private placement and after giving effect to exercise in
full of the warrants, Mr. Gross beneficially owns a total of 4,276,004 shares of
Common Stock, or 26.6% of our outstanding shares. Following the private
placement, Electric Fuel has 17,153,387 shares of Common Stock outstanding
(giving effect to conversion of all the warrants), compared to 14,303,387 shares
before the offering. The average closing price on the Nasdaq National Market for
Electric Fuel Common Stock for the 20 days preceding the date of the purchase
agreement was $1.676 per share.
Pursuant to an Escrow Agreement and the terms of the Purchase Agreement,
the securities we issued and the proceeds of the offering were deposited in an
interest-bearing escrow account. The funds in the escrow account will be
released to us and the securities will be released to the purchasers when a
resale registration statement for the securities on Form S-3 is declared
effective by the Securities and Exchange Commission. We undertook to file this
registration statement promptly after the deposit of the full purchase price in
the escrow account. In the event that the Form S-3 is not declared effective by
April 30, 2000, the escrow agent will return the securities to us and release
the funds in the account to the purchasers. Mr. Gross has waived his rights to
require the escrow with respect to his shares and we currently have use of
$750,000 the aggregate purchase price.
Pursuant to the terms of the Purchase Agreement, the purchasers agreed that
until September 30, 2004, neither they nor any of their affiliates (as defined
in the Securities Act), directly or indirectly or in conjunction with or through
any Associate (as defined in Rule 12b-2 of the Securities Exchange Act of 1934,
as amended), will: (a) solicit proxies with respect to any capital stock or
other voting securities of Electric Fuel under any circumstances, or become a
"participant" in any "election contest" relating to the election of directors of
Electric Fuel (as such terms are used in Rule 14a-11 of Regulation 14A of the
Exchange Act); or (b) make an offer for the acquisition of substantially all of
the assets or capital stock of Electric Fuel or induce or assist
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any other person to make such an offer; or (c) form or join any "group" within
the meaning of Section 13(d)(3) of the Exchange Act with respect to any capital
stock or other voting securities of Electric Fuel for the purpose of
accomplishing the actions referred to in clauses (a) and (b) above, other than
pursuant to the voting rights agreement described below.
The Purchase Agreement also provides that the amount of securities issued
under the Purchase Agreement may be reduced, with a corresponding decrease in
the aggregate purchase price of the offering, if failure to do so would result
in our contravening the shareholder approval requirements of the Nasdaq National
Market.
The purchasers also entered into Amendment No. 1 to Voting Rights Agreement
dated September 30, 1996, the original parties to which were Electric Fuel, Mr.
Gross, Robert S. Ehrlich (our Chairman of the Board and Chief Financial Officer)
and Yehuda Harats (our President and Chief Executive Officer). Pursuant to this
Amendment, so long as the purchasers own an aggregate of 950,000 shares of
Electric Fuel Common Stock, they will be entitled to nominate a director to
serve on our board. As a result, our board of directors will be increased to a
total of seven members. In addition, under the Voting Rights Agreement, the
purchasers and Messrs. Ehrlich and Harats agreed to vote and take all necessary
action, so that the nominee of the purchasers, Messrs. Ehrlich, Harats, Gross
and Lawrence M. Miller, a current director of Electric Fuel, shall serve as
members of the board of directors for a period of five (5) years covering the
five (5) annual stockholder meetings following the offering.
The foregoing descriptions of the Purchase Agreement and Amendment No.1 to
the Voting Rights Agreement are qualified in their entirety by reference to the
agreements themselves. Copies of the Purchase Agreement and Amendment No.1 to
the Voting Rights Agreement are attached to this report as Exhibits 4a and 4b
respectively, and are incorporated herein by reference.
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.
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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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Robert S. Ehrlich
Chairman and Chief Financial Officer
Date: January 6, 2000
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EXHIBIT INDEX
The following exhibits are filed with the Current Report on Form 8-K.
Exhibit No. Description
4a Securities Purchase Agreement between Electric
Fuel Corporation and the Purchasers listed on
Exhibit A thereto, dated December 28, 1999.
4b Form of Warrant to purchase Common Stock issued
under the Securities Purchase Agreement.
4c Amendment No.1 to Voting Rights Agreement between
Electric Fuel Corporation, Leon S. Gross,
Robert S. Ehrlich, Yehuda Harats and the
Purchasers listed in the Securities Purchase
Agreement, dated December 28, 1999.
99a Press Release re: Securities Purchase Agreement
between Electric Fuel Corporation and the
Purchasers listed on Exhibit A thereto, issued by
Electric Fuel Corporation on December 28, 1999.