OMB
APPROVAL
|
OMB
Number:
3235-0070
Expires:
January
31, 2008
Estimated
average burden
hours
per
response
192.00
|
AROTECH
CORPORATION
|
(Exact
name of registrant as specified in its charter)
|
Delaware
|
95-4302784
|
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer
Identification
No.)
|
1229
Oak Valley Drive, Ann Arbor, Michigan
|
48108
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
(800)
281-0356
|
(Registrant’s
telephone number, including area
code)
|
|
(Former
address, if changed since last
report)
|
Potential
persons who are to respond to the collection of
information
contained in this form are not required to respond
unless
the form displays a currently valid OMB control
number.
|
PART
I - FINANCIAL INFORMATION
|
|
Item
1 – Financial Statements (Unaudited):
|
|
Condensed Consolidated Balance Sheets at September 30, 2007 and
December
31, 2006
|
2
|
Condensed Consolidated Statements of Operations for the Nine and
Three
Months Ended September 30, 2007 and 2006
|
4
|
Condensed Consolidated Statements of Cash Flows for the Nine and
Three
Months Ended September 30, 2007 and 2006
|
5
|
Notes to the Interim Condensed Consolidated Financial
Statements
|
7
|
Item
2 – Management’s Discussion and Analysis of Financial Condition and
Results of Operations
|
14
|
Item
3 – Quantitative and Qualitative Disclosures about Market
Risk
|
23
|
Item
4T – Controls and Procedures
|
24
|
PART
II - OTHER INFORMATION
|
|
Item
1 – Legal Proceedings
|
25
|
Item
1A – Risk Factors
|
25
|
Item 4
– Submission of Matters to a Vote of Security Holders
|
26
|
Item 6 – Exhibits |
26
|
SIGNATURES
|
27
|
ITEM
1.
|
FINANCIAL
STATEMENTS (UNAUDITED)
|
September
30, 2007
|
December
31, 2006
|
|||||||
ASSETS
|
(Unaudited)
|
|||||||
CURRENT
ASSETS:
|
||||||||
Cash
and cash equivalents
|
$ |
1,657,974
|
$ |
2,368,872
|
||||
Restricted
collateral deposits and restricted held-to-maturity
securities
|
248,116
|
648,975
|
||||||
Escrow
receivable
|
1,479,826
|
1,479,826
|
||||||
Available-for-sale
marketable securities
|
44,562
|
41,166
|
||||||
Trade
receivables (net of allowance for doubtful accounts in the amount
of
$159,000 as of September 30, 2007 and December 31, 2006)
|
10,112,872
|
7,780,965
|
||||||
Unbilled
receivables
|
6,658,155
|
6,902,533
|
||||||
Other
accounts receivable and prepaid expenses
|
1,082,843
|
1,134,622
|
||||||
Inventories
|
9,196,035
|
7,851,820
|
||||||
Total
current assets
|
30,480,383
|
28,208,779
|
||||||
SEVERANCE
PAY FUND
|
2,446,538
|
2,246,457
|
||||||
OTHER
LONG-TERM RECEIVABLES
|
225,033
|
262,608
|
||||||
PROPERTY
AND EQUIPMENT, NET
|
4,595,806
|
3,740,593
|
||||||
INVESTMENT
IN AFFILIATED COMPANY
|
252,673
|
392,398
|
||||||
OTHER
INTANGIBLE ASSETS, NET
|
8,043,179
|
9,502,214
|
||||||
GOODWILL
|
30,806,288
|
30,715,225
|
||||||
$ |
76,849,900
|
$ |
75,068,274
|
September
30, 2007
|
December
31, 2006
|
|||||||
(Unaudited)
|
||||||||
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
||||||||
CURRENT
LIABILITIES:
|
||||||||
Trade
payables
|
$ |
4,531,906
|
$ |
2,808,131
|
||||
Other
accounts payable and accrued expenses
|
4,573,285
|
5,171,055
|
||||||
Current
portion of capitalized leases
|
89,697
|
55,263
|
||||||
Current
portion of promissory notes due to purchase of
subsidiaries
|
227,175
|
302,900
|
||||||
Short-term
bank loans and current portion of long-term loans
|
4,707,890
|
3,496,008
|
||||||
Deferred
revenues
|
1,560,664
|
1,321,311
|
||||||
Convertible
debenture
|
–
|
2,583,629
|
||||||
Total
current liabilities
|
15,690,617
|
15,738,297
|
||||||
Accrued
severance pay
|
4,498,531
|
4,039,049
|
||||||
Long-term
portion of mortgage loans
|
1,101,106
|
–
|
||||||
Long-term
portion of promissory notes due to purchase of
subsidiaries
|
–
|
151,450
|
||||||
Long-term
portion of capitalized leases
|
100,949
|
158,120
|
||||||
Other
long term liabilities
|
138,944
|
–
|
||||||
Total
long-term liabilities
|
5,839,530
|
4,348,619
|
||||||
MINORITY
INTEREST
|
48,922
|
21,520
|
||||||
SHAREHOLDERS’
EQUITY:
|
||||||||
Share
capital –
|
||||||||
Common
stock – $0.01 par value each;
|
||||||||
Authorized:
250,000,000 shares as of September 30, 2007 and December 31, 2006;
Issued:
12,913,701 and 12,023,242 shares as of September 30, 2007 and December
31,
2006, respectively; Outstanding: 12,913,701 and 11,983,576 shares
as of
September 30, 2007 and December 31, 2006, respectively
|
129,137
|
120,232
|
||||||
Preferred
shares – $0.01 par value each;
|
||||||||
Authorized:
1,000,000 shares as of September 30, 2007 and December 31, 2006;
No shares
issued and outstanding as of September 30, 2007 and December 31,
2006
|
–
|
–
|
||||||
Additional
paid-in capital
|
218,392,007
|
217,735,860
|
||||||
Accumulated
deficit
|
(162,532,571 | ) | (158,566,123 | ) | ||||
Treasury
stock, at cost (common stock – no shares and 39,666 shares as of September
30, 2007 and December 31, 2006, respectively)
|
–
|
(3,537,106 | ) | |||||
Notes
receivable from shareholders
|
(1,321,292 | ) | (1,304,179 | ) | ||||
Accumulated
other comprehensive loss
|
603,550
|
511,154
|
||||||
Total
shareholders’ equity
|
55,270,830
|
54,959,838
|
||||||
$ |
76,849,900
|
$ |
75,068,274
|
Nine
months ended September 30,
|
Three
months ended September 30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Revenues
|
$ |
40,011,014
|
$ |
29,033,433
|
$ |
15,453,124
|
$ |
12,722,686
|
||||||||
Cost
of revenues
|
27,764,509
|
21,396,283
|
11,079,269
|
8,654,154
|
||||||||||||
Amortization
of intangible assets
|
1,044,042
|
1,404,056
|
307,871
|
433,171
|
||||||||||||
Research
and development
|
1,413,852
|
1,235,000
|
491,597
|
714,371
|
||||||||||||
Selling
and marketing
|
2,999,226
|
2,600,477
|
905,725
|
852,345
|
||||||||||||
General
and administrative
|
9,659,032
|
9,124,758
|
3,309,628
|
2,883,950
|
||||||||||||
Impairment
of goodwill and other intangible assets
|
–
|
204,059
|
–
|
–
|
||||||||||||
Total
operating costs
|
42,880,661
|
35,964,633
|
16,094,090
|
13,537,991
|
||||||||||||
Operating
loss
|
(2,869,647 | ) | (6,931,200 | ) | (640,966 | ) | (815,305 | ) | ||||||||
Other
income (expense)
|
75,452
|
(16,766 | ) |
6,333
|
(52,754 | ) | ||||||||||
Financial
expenses, net
|
(707,225 | ) | (6,833,740 | ) | (80,412 | ) | (374,944 | ) | ||||||||
Loss
before minority interest in earnings of subsidiaries, earnings from
affiliated company and tax expenses
|
(3,501,420 | ) | (13,781,706 | ) | (715,045 | ) | (1,243,003 | ) | ||||||||
Income
tax credits (expenses)
|
(298,193 | ) | (19,418 | ) | (123,287 | ) |
34,635
|
|||||||||
Minority
interest in loss (earnings) of subsidiaries
|
(27,402 | ) |
25,943
|
82,929
|
–
|
|||||||||||
Gain
(loss) from affiliated company
|
(139,725 | ) |
281,175
|
(27,546 | ) |
143,145
|
||||||||||
Net
loss
|
$ | (3,966,740 | ) | $ | (13,494,006 | ) | $ | (782,949 | ) | $ | (1,065,223 | ) | ||||
Deemed
dividend to certain shareholders
|
–
|
(434,185 | ) |
–
|
–
|
|||||||||||
Net
loss attributable to common shareholders
|
$ | (3,966,740 | ) | $ | (13,928,191 | ) | $ | (782,949 | ) | $ | (1,065,223 | ) | ||||
Basic
and diluted net loss per share1
|
$ | (0.35 | ) | $ | (1.77 | ) | $ | (0.06 | ) | $ | (0.12 | ) | ||||
Weighted
average number of shares used in computing basic and diluted net
loss per
share
|
11,315,676
|
7,841,428
|
12,161,564
|
8,596,782
|
_______________________ |
1
|
Includes
$434,185 and $0 deemed dividend in the calculation of the loss per
share
for the respective nine- and three-month periods ended September
30,
2006.
|
Nine
months ended September 30,
|
||||||||
|
2007
|
2006
|
||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net
loss for the period before deemed dividend to certain stockholders
of
common stock
|
$ | (3,966,740 | ) | $ | (13,494,006 | ) | ||
Adjustments
required to reconcile net loss to net cash used in operating
activities:
|
||||||||
Depreciation
|
1,495,194
|
986,543
|
||||||
Amortization
of intangible assets, and impairment of intangible assets
|
1,044,042
|
1,404,056
|
||||||
Impairment
of goodwill and other intangible assets
|
–
|
204,059
|
||||||
Amortization
relating to warrants issued to the holders of convertible debentures
and
beneficial conversion feature
|
–
|
1,217,213
|
||||||
Financial
expenses in connection with convertible debenture principal
repayment
|
280,382
|
5,395,338
|
||||||
Amortization
of deferred expenses related to convertible debenture
issuance
|
62,999
|
744,875
|
||||||
Amortization
of capitalized research and development projects
|
437,722
|
115,172
|
||||||
Remeasurement
of liability in connection with warrants granted
|
–
|
(700,113 | ) | |||||
Earnings
(loss) to minority
|
27,402
|
(25,943 | ) | |||||
Share
in earnings (loss) of affiliated company
|
139,725
|
(281,175 | ) | |||||
Liability
for employee rights upon retirement, net
|
259,402
|
155,737
|
||||||
Stock
based compensation related to shares granted and to be granted to
employees, directors, consultants and shares granted as a
donation
|
1,258,464
|
408,570
|
||||||
Write-off
of inventory
|
–
|
292,864
|
||||||
Impairment
of fixed assets
|
–
|
32,485
|
||||||
Decrease
in deferred tax assets
|
12,772
|
25,440
|
||||||
Changes
in operating asset and liability items:
|
||||||||
Capital
loss from sale of property and equipment
|
–
|
(1,842 | ) | |||||
Decrease
(increase) in trade receivables and notes receivable
|
(2,217,231 | ) |
4,101,873
|
|||||
Decrease
(increase) in unbilled receivables
|
244,378
|
(1,587,424 | ) | |||||
Decrease
(increase) in other accounts receivable and prepaid
expenses
|
(82,348 | ) |
4,566
|
|||||
Increase
in inventories
|
(1,344,215 | ) | (569,559 | ) | ||||
Decrease
(increase) in trade payables
|
1,723,774
|
(2,272,518 | ) | |||||
Decrease
in deferred revenues
|
239,353
|
932,676
|
||||||
Decrease
(increase) in accounts payable and accruals
|
(499,603 | ) |
477,358
|
|||||
Net
cash used in operating activities from continuing
operations
|
(884,528 | ) | (2,433,755 | ) | ||||
Net
cash used in operating activities from discontinuing
operations
|
–
|
(120,000 | ) | |||||
Net
cash used in operating activities
|
(884,528 | ) | (2,553,755 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Repayment
of promissory note related to purchase of
subsidiary
|
(227,175 | ) | (245,183 |
)
|
||||
Purchase
of property and equipment
|
(2,350,407 | ) | (551,376 | ) | ||||
Payment
of transactions expenses in relation to previous year investment
in
subsidiary
|
–
|
(590,350 |
)
|
|||||
Increase
in capitalized research and development projects
|
–
|
(379,496 | ) | |||||
Decrease
in restricted securities and deposits, net
|
397,464
|
3,562,381
|
||||||
Net
cash provided (used) by investing
activities
|
(2,180,118 | ) |
1,795,976
|
) | ||||
FORWARD | $ | (3,064,646 | ) | $ | (757,779 | ) |
Nine
months ended September 30,
|
||||||||
2007
|
2006
|
|||||||
FORWARD
|
$ | (3,064,646 | ) | $ | (757,779 | ) | ||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Increase
(decrease) in short-term credit from banks
|
1,236,396
|
(357,037 | ) | |||||
Repayment
of debentures
|
–
|
(4,537,500 | ) | |||||
Proceeds
from exercise of warrants
|
–
|
4,350,635
|
||||||
Proceeds
from exercise of options to employees and consultants
|
37,642
|
–
|
||||||
Increase
in long term debt
|
1,115,000
|
–
|
||||||
Repayment
of long-term loans
|
(13,894 | ) | (19,552 | ) | ||||
Net
cash provided by (used in) financing
activities
|
2,375,144
|
(563,454 | ) | |||||
DECREASE
IN CASH AND CASH EQUIVALENTS
|
(689,502 | ) | (1,321,233 | ) | ||||
CASH
ACCRETION DUE TO EXCHANGE RATE DIFFERENCES
|
(21,396 | ) | (106,887 | ) | ||||
BALANCE
OF CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE
PERIOD
|
2,368,872
|
6,150,652
|
||||||
BALANCE
OF CASH AND CASH EQUIVALENTS AT THE END OF THE
PERIOD
|
$ |
1,657,974
|
$ |
4,722,532
|
||||
SUPPLEMENTARY
INFORMATION ON NON-CASH TRANSACTIONS:
|
||||||||
Payment
of principal installment of convertible debenture in
shares
|
$ |
2,601,097
|
$ |
17,473,824
|
September
30, 2007
|
December
31, 2006
|
|||||||
(Unaudited)
|
||||||||
Raw
and packaging materials
|
$ |
6,373,371
|
$ |
4,556,250
|
||||
Work-in-progress
|
2,676,443
|
3,186,843
|
||||||
Finished
goods
|
146,221
|
108,727
|
||||||
$ |
9,196,035
|
$ |
7,851,820
|
Simulation
and Training
|
Battery
and
Power
Systems
|
Armor
|
All
Others
|
Total
|
||||||||||||||||
Nine
months ended September 30, 2007
|
||||||||||||||||||||
Revenues
from outside customers
|
$ |
17,836,204
|
$ |
8,118,285
|
$ |
14,056,525
|
$ |
–
|
$ |
40,011,014
|
||||||||||
Depreciation,
amortization and impairment expenses (1)
|
(1,225,971 | ) | (717,189 | ) | (413,093 | ) | (182,983 | ) | (2,539,236 | ) | ||||||||||
Direct
expenses (2)
|
(14,750,941 | ) | (7,688,329 | ) | (12,995,643 | ) | (5,296,380 | ) | (40,731,293 | ) | ||||||||||
Segment
income (loss)
|
$ |
1,859,292
|
$ | (287,233 | ) | $ |
647,789
|
$ | (5,479,363 | ) | (3,259,515 | ) | ||||||||
Financial
expense
|
(707,225 | ) | ||||||||||||||||||
Loss
from continuing operations
|
$ | (3,966,740 | ) | |||||||||||||||||
Segment
assets (3),
(4)
|
$ |
44,383,057
|
$ |
19,725,033
|
$ |
10,835,160
|
$ |
2,148,703
|
$ |
77,091,953
|
||||||||||
Nine
months ended September 30, 2006
|
||||||||||||||||||||
Revenues
from outside customers
|
$ |
16,395,627
|
$ |
5,943,319
|
$ |
6,694,487
|
$ |
–
|
$ |
29,033,433
|
||||||||||
Depreciation,
amortization and impairment expenses (1)
|
(1,165,628 | ) | (701,026 | ) | (770,718 | ) | (185,537 | ) | (2,822,909 | ) | ||||||||||
Direct
expenses (2)
|
(13,619,617 | ) | (6,219,157 | ) | (7,716,423 | ) | (5,315,593 | ) | (32,870,790 | ) | ||||||||||
Segment
income (loss)
|
$ |
1,610,382
|
$ | (976,864 | ) | $ | (1,792,654 | ) | $ | (5,501,130 | ) | (6,660,266 | ) | |||||||
Financial
expense
|
(6,833,740 | ) | ||||||||||||||||||
Loss
from continuing operations
|
$ | (13,494,006 | ) | |||||||||||||||||
Segment
assets (3),
(4)
|
$ |
45,022,403
|
$ |
17,476,829
|
$ |
9,562,793
|
$ |
4,892,723
|
$ |
76,954,748
|
||||||||||
Three
months ended September 30, 2007
|
||||||||||||||||||||
Revenues
from outside customers
|
$ |
8,440,458
|
$ |
3,033,757
|
$ |
3,978,908
|
$ |
–
|
$ |
15,453,123
|
||||||||||
Depreciation,
amortization and impairment expenses (1)
|
(230,272 | ) | (237,402 | ) | (86,638 | ) | (64,805 | ) | (619,117 | ) | ||||||||||
Direct
expenses (2)
|
(6,669,473 | ) | (2,969,914 | ) | (4,539,103 | ) | (1,358,053 | ) | (15,536,543 | ) | ||||||||||
Segment
income (loss)
|
$ |
1,540,713
|
$ | (173,559 | ) | $ | (646,833 | ) | $ | (1,422,858 | ) | (702,537 | ) | |||||||
Financial
expense
|
(80,412 | ) | ||||||||||||||||||
Loss
from continuing operations
|
$ | (782,949 | ) | |||||||||||||||||
Three
months ended September 30, 2006
|
||||||||||||||||||||
Revenues
from outside customers
|
$ |
6,950,826
|
$ |
1,802,665
|
$ |
3,969,195
|
$ |
–
|
$ |
12,722,686
|
||||||||||
Depreciation,
amortization and impairment expenses (1)
|
(386,647 | ) | (234,588 | ) | (173,807 | ) | (57,944 | ) | (852,986 | ) | ||||||||||
Direct
expenses (2)
|
(5,236,307 | ) | (1,989,037 | ) | (3,593,301 | ) | (1,741,334 | ) | (12,559,979 | ) | ||||||||||
Segment
income (loss)
|
$ |
1,327,872
|
$ | (420,960 | ) | $ |
202,087
|
$ | (1,799,278 | ) | (690,279 | ) | ||||||||
Financial
expense
|
(374,944 | ) | ||||||||||||||||||
Loss
from continuing operations
|
$ | (1,065,223 | ) |
(1)
|
Includes
depreciation of property and equipment, amortization expenses of
intangible assets and impairment of goodwill and other intangible
assets.
|
(2)
|
Including,
inter alia, sales and marketing, general and administrative and
tax expenses.
|
(3)
|
Consisting
of all assets.
|
(4)
|
Out
of those amounts, goodwill in our Simulation and Training, Battery
and
Power Systems and Armor Divisions stood at $24,235,419, $5,485,923
and
$1,084,946, respectively, as of September 30, 2007 and $24,195,419,
$5,316,320 and $1,048,902, respectively, as of September 30,
2006.
|
Nine
Months Ended September 30,
|
Three
Months Ended September 30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Net
loss
|
$ | (3,966,740 | ) | $ | (13,928,191 | ) | $ | (782,949 | ) | $ | (1,065,223 | ) | ||||
Foreign
currency translation
|
92,396
|
705,013
|
299,287
|
323,612
|
||||||||||||
Total
comprehensive loss
|
$ | (3,874,344 | ) | $ | (13,223,178 | ) | $ | (463,662 | ) | $ | (741,611 | ) |
ITEM
2.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
|
Ø
|
Our
Simulation and Training Division, consisting
of:
|
|
·
|
FAAC
Incorporated, located in Ann Arbor, Michigan, which provides simulators,
systems engineering and software products to the United States military,
government and private industry (“FAAC”);
and
|
|
·
|
IES
Interactive Training, Inc., located in Ann Arbor, Michigan, which
provides
specialized “use of force” training for police, security personnel and the
military (“IES”).
|
|
Ø
|
Our
Armor Division, consisting
of:
|
|
·
|
Armour
of America, located in Auburn, Alabama, which manufactures ballistic
and
fragmentation armor kits for rotary and fixed wing aircraft, marine
armor,
personnel armor, military vehicles and architectural applications,
including both the LEGUARD Tactical Leg Armor and the Armourfloat
Ballistic Floatation Device, which is a unique vest that is certified
by
the U.S. Coast Guard (“AoA”);
|
|
·
|
MDT
Protective Industries, Ltd., located in Lod, Israel, which specializes
in
using state-of-the-art lightweight ceramic materials, special ballistic
glass and advanced engineering processes to fully armor vans and
SUVs, and
is a leading supplier to the Israeli military, Israeli special forces
and
special services (“MDT”) (75.5% owned);
and
|
|
·
|
MDT
Armor Corporation, located in Auburn, Alabama, which conducts MDT’s United
States activities (“MDT Armor”) (88%
owned).
|
|
Ø
|
Our
Battery and Power Systems Division, consisting
of:
|
|
·
|
Epsilor
Electronic Industries, Ltd., located in Dimona, Israel (in Israel’s Negev
desert area), which develops and sells rechargeable and primary lithium
batteries and smart chargers to the military and to private industry
in
the Middle East, Europe and Asia
(“Epsilor”);
|
|
·
|
Electric
Fuel Battery Corporation, located in Auburn, Alabama, which manufactures
and sells Zinc-Air fuel cells, batteries and chargers for the military,
focusing on applications that demand high energy and light weight
(“EFB”);
and
|
|
·
|
Electric
Fuel (E.F.L.) Ltd., located in Beit Shemesh, Israel, which produces
water-activated battery (“WAB”) lifejacket lights for commercial aviation
and marine applications, and which conducts our Electric Vehicle
effort,
focusing on obtaining and implementing demonstration projects in
the U.S.
and Europe, and on building broad industry partnerships that can
lead to
eventual commercialization of our Zinc-Air energy system for electric
vehicles (“EFL”).
|
|
Ø
|
IES
and FAAC recognized revenues from the sale of interactive use-of-force
training systems, simulators, and maintenance services in connection
with
such systems.
|
|
Ø
|
MDT,
MDT Armor and AoA recognized revenues from payments under vehicle
armoring
contracts, for service and repair of armored vehicles, and on sale
of
armoring products.
|
|
Ø
|
EFB
and Epsilor recognized revenues from the sale of batteries, chargers
and
adapters to the military, and under certain development contracts
with the
U.S. Army.
|
|
Ø
|
EFL
recognized revenues from the sale of water-activated battery (WAB)
lifejacket lights.
|
|
Ø
|
Increased
revenues from our Battery and Power Systems Division ($1.2 million
more in
the three months ended September 30, 2007 versus the three months
ended
September 30, 2006); and
|
|
Ø
|
Increased
revenues from our Simulation and Training Division ($1.5 million
more in
the three months ended September 30, 2007 versus the three months
ended
September 30, 2006).
|
|
Ø
|
IES
and FAAC recognized revenues from the sale of interactive use-of-force
training systems, simulators, and from the provision of maintenance
services in connection with such
systems.
|
|
Ø
|
MDT,
MDT Armor and AoA recognized revenues from payments under vehicle
armoring
contracts, for service and repair of armored vehicles, and on sale
of
armoring products.
|
|
Ø
|
EFB
and Epsilor recognized revenues from the sale of batteries, chargers
and
adapters to the military, and under certain development contracts
with the
U.S. Army.
|
|
Ø
|
EFL
recognized revenues from the sale of water-activated battery (WAB)
lifejacket lights.
|
|
Ø
|
Increased
revenues from our Armor Division ($7.4 million more in the nine months
ended September 30, 2007 versus the nine months ended September 30,
2006);
|
|
Ø
|
Increased
revenues from our Battery and Power Systems Division ($2.2 million
more in
the nine months ended September 30, 2007 versus the nine months ended
September 30, 2006); and
|
|
Ø
|
Increased
revenues from our Simulation and Training Division ($1.4 million
more in
the nine months ended September 30, 2007 versus the nine months ended
September 30, 2006).
|
ITEM
3.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.
|
ITEM
4T.
|
CONTROLS
AND PROCEDURES.
|
ITEM
1.
|
LEGAL PROCEEDINGS.
|
ITEM
1A.
|
RISK
FACTORS.
|
ITEM
6.
|
EXHIBITS.
|
Exhibit
Number
|
Description
|
|
31.1
|
Certification
of Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
|
31.2
|
Certification
of Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
|
32.1
|
Certification
of Chief Executive Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
|
|
32.2
|
Certification
of Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
|
AROTECH
CORPORATION
|
||||
By:
|
/s/
Robert S. Ehrlich
|
|||
Name:
|
Robert
S. Ehrlich
|
|||
Title:
|
Chairman
and CEO
|
|||
(Principal
Executive Officer)
|
By:
|
/s/
Thomas J. Paup
|
||
Name:
|
Thomas
J. Paup
|
||
Title:
|
Vice
President – Finance and CFO
|
||
(Principal
Financial Officer)
|
Exhibit
Number
|
Description
|
|
31.1
|
Certification
of Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
|
31.2
|
Certification
of Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
|
32.1
|
Certification
of Chief Executive Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
|
|
32.2
|
Certification
of Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
|