(Nasdaq:EFCX) announced that it has raised $11.13 million from a group of institutional investors.
The Special Situations Funds, a group of funds focused on investing in small public companies, acted as lead investor.
"The capital raised will allow us to increase our sales and marketing activities, as well as to accelerate new product development and increase production capacity of our Instant Power line of batteries and chargers," said Electric Fuel President and CEO Yehuda Harats.
The investor group purchased about 4 million previously-registered shares of common stock. The shares were therefore issued at $2.75 each, 7% below the current share price.
Additionally, investors are getting five-year warrants to purchase up to 2.7 million shares more. If exercised, the warrants could bring the company up to $8.7 million more.
Both the shares sold initially and the shares underlying the warrants, as well as the warrants themselves, were previously registered with the Securities and Exchange Commission.
Electric Fuel is to release its results for the first quarter of 2001 this Thursday. But based on its cash reserves of $11.6 million at the end of 2000, the current investment is vital for the company.
In November 2000, Electric Fuel filed a draft prospectus with the SEC to raise $30 million via a public or private offering.
At the time, the company had hoped to issue 3.25 million new shares at $9 each, which would have generated the company $30 million.
But the situation on the markets has soured, making the plan for a public issue unrealistic. But the company did manage to sell a bigger volume of stock than planned.
Koor invested $10 million
In March 2000, Electric Fuel was still thinking of acquiring
(NYSE:KOR) in a stock swap.
The plummeting price of shares on the markets forced the company to change its original plan. Electric Fuel and Koor signed a new agreement in May 2000. Koor acquired a million Electric Fuel shares at $10 per share, 70% higher than the current price of shares.
After the drop in the price of Electric Fuel shares in the six months following the signing of the agreement, in keeping with the agreement provisions, Electric Fuel issued another 93,000 shares to Koor.
Electric Fuel had developed an electric battery for electric cars. Given the lack of progress in developing electric cars, the company turned to manufacturing refuelable zinc-air batteries for cellphones, called Instant Power.
These disposable power sources are the company's main growth engine today. The batteries last 10 days to a month. The target market of Instant Power batteries are trekkers and businessmen.
The batteries are compatible with select models of