Medis Technologies Ltd. reported financial results for the third quarter and nine months ended September 30, 2006. The net loss during both the quarter and nine months ended September 30, 2006 was impacted by non-cash expenses of approximately $1,150,000 related to stock options accounted for in accordance with SFAS 123® "Share Based Payment." For the quarter ended September 30, 2006, the net loss was $6,676,000 or $.21 per share based on 32,108,884 weighted average shares, compared to a net loss of $4,595,000 or $.17 per share based on 27,582,802 weighted average shares for the quarter ended September 30, 2005.
For the nine months ended September 30, 2006, the net loss was $26,294,000, or $.86 per share, based on 30,470,534 weighted average shares, compared to a net loss of $13,308,000, or $.49 per share, based on 27,327,022 weighted average shares for the nine months ended September 30, 2005. Additionally, during the nine months ended September 30, 2006, the company incurred costs aggregating $8,491,000 (including $8,266,000 as the value of shares issued in lieu of future interest payments) related to the April and May 2006 exchanges of its common stock for all $49,000,000 of its then outstanding senior convertible notes. During the periods, the company continued to move forward with its production and marketing programs of its fuel cell Power Packs including operating its semi automated production line, distributing its Power Pack to potential customers and making progress in constructing its fully automated high volume production line.
"Consistent with our expectations, the net cash used in operating activities during the quarter was about $5.1 million," said Robert K. Lifton, Chairman & CEO of Medis Technologies. "Furthermore, our capital expenditures during the quarter of about $7.1 million reflect the increasing payments to Ismeca and other contractors for construction of our fully automated production line capable of producing up to 1.5 million Power Packs a month together with the supporting lines such as the fuel line and electrode framing which are capable of supporting another two lines. Our schedule for constructing the automated line continues on target. As we have previously reported, the line is expected to be operational and ready for validation by our team and that of our contract manufacturer, Celestica, by the end of December. Then it will be disassembled and shipped to Celestica's facilities in Galway, Ireland where it will be reassembled and, after testing, begin operations. Our schedule calls for starting production on this line by the second quarter of 2007."
