<PAGE>


                     U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-Q/A



                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                         FOR THE QUARTERLY PERIOD ENDED
                                  JUNE 30, 2000


                         COMMISSION FILE NUMBER: 0-30391

                             MEDIS TECHNOLOGIES LTD.
             (Exact Name of Registrant as Specified in its Charter)

           DELAWARE                                        13-3669062
(State or other jurisdiction of                        (I.R.S. Employer
incorporation or organization)                      Identification Number)

                                805 THIRD AVENUE
                            NEW YORK, NEW YORK 10022
              (Address of Principal Executive Offices and Zip Code)

                                 (212) 935-8484
              (Registrant's Telephone Number, Including Area Code)

      CHECK WHETHER THE REGISTRANT: (1) FILED ALL REPORTS REQUIRED TO BE FILED
BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING THE
PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED
TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR
THE PAST 90 DAYS.
                        YES |X|                       NO | |

The number of shares of Common Stock, par value $.01 per share, outstanding as
of August 14, 2000 was 16,781,224.




<PAGE>



                             MEDIS TECHNOLOGIES LTD.

                               INDEX TO FORM 10-Q

                       FOR THE QUARTER ENDED JUNE 30, 2000


<TABLE>
<CAPTION>
PART I.  FINANCIAL INFORMATION                                             PAGE NUMBER
                                                                           -----------

<S>                                                                             <C>
Item 1.     Condensed Consolidated Financial Statements


            Condensed Consolidated Balance Sheets
            December 31, 1999 and June 30, 2000 (Unaudited)                     3

            Condensed Consolidated Statements of Operations (Unaudited)
            Three and six months ended June 30, 1999 and 2000                   4

            Condensed Consolidated Statements of Cash Flows (Unaudited)
            Six months ended June 30, 1999 and 2000                             5

            Notes to Condensed Consolidated Financial Statements (Unaudited)    6-9

Item 2.     Management's Discussion and Analysis of Financial
            Condition and Results of Operations                                 10-13


Item 3.     Quantitative and Qualitative Disclosures About Market Risk          14


PART II.  OTHER INFORMATION


Item 1.     Legal Proceedings                                                   15


Item 2.     Changes in Securities and Use of Proceeds                           15


Item 6.     Exhibits and Reports on Form 8-K                                    15
</TABLE>




                                       2
<PAGE>


                         PART I - FINANCIAL INFORMATION

ITEM 1.      FINANCIAL STATEMENTS
                    MEDIS TECHNOLOGIES LTD. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                         DECEMBER 31, 1999    JUNE 30, 2000
                                                         -----------------    -------------
              ASSETS                                              (1)         (as restated)
                                                                               (unaudited)
<S>                                                          <C>              <C>
Current assets
   Cash and cash equivalents                                 $   1,842,000    $   6,054,000
   Accounts receivable - other                                      58,000           82,000
   Prepaid expenses                                                101,000          123,000
                                                             -------------    -------------

      Total current assets                                       2,001,000        6,259,000

Property and equipment, net                                        983,000          959,000
Intangible assets, net                                           7,242,000       92,586,000
                                                             -------------    -------------

                                                             $  10,226,000    $  99,804,000
                                                             =============    =============

            LIABILITIES AND
         STOCKHOLDERS' EQUITY

Current liabilities
   Current portion of long-term debt and short-term credit   $      86,000    $      11,000
   Accounts payable                                                102,000          185,000
   Accrued expenses                                                730,000          873,000
                                                             -------------    -------------

      Total current liabilities                                    918,000        1,069,000

Long-term debt, excluding current maturities                        11,000            7,000

Other long-term liabilities                                        109,000          150,000
                                                             -------------    -------------

                                                                 1,038,000        1,226,000

Minority interest in subsidiary                                    627,000               --

Commitments and contingencies

Stockholders' equity
   Preferred stock, $.01 par value; 10,000 shares
    authorized; none issued
   Common stock, $.01 par value; 25,000,000 shares
    authorized; 9,988,619 and 16,728,724 issued
    and outstanding, at December 31, 1999, and
    June 30, 2000, respectively                                    100,000          167,000
   Additional paid-in capital                                   32,450,000      133,232,000
   Accumulated deficit                                         (23,615,000)     (33,422,000)
   Deferred compensation costs                                    (374,000)      (1,399,000)
                                                             -------------    -------------

                                                                 8,561,000       98,578,000
                                                             -------------    -------------
                                                             $  10,226,000    $  99,804,000
                                                             =============    =============
</TABLE>

The accompanying notes are an integral part of these statements.

(1) derived from audited financial statements




                                       3
<PAGE>


                    MEDIS TECHNOLOGIES LTD. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                THREE MONTHS ENDED             SIX MONTHS ENDED
                                                ------------------             ----------------
                                                     JUNE 30,                       JUNE 30,
                                                     --------                       --------
                                              1999            2000            1999            2000
                                              ----            ----            ----            ----
                                                          (as restated)                   (as restated)
<S>                                       <C>             <C>             <C>             <C>
Sales                                     $         --    $         --    $         --    $         --

Cost of sales                                       --              --              --              --
                                          ------------    ------------    ------------    ------------
        Gross profit                                --              --              --              --

Operating expenses
   Research and development costs,             872,000       1,791,000       1,256,000       2,572,000
   net
   Selling, general and administrative         457,000       1,486,000         785,000       2,316,000
   expenses
   Amortization of intangible assets           612,000       2,360,000       1,223,000       2,973,000
                                          ------------    ------------    ------------    ------------

      Total operating expenses               1,941,000       5,637,000       3,264,000       7,861,000
                                          ------------    ------------    ------------    ------------

      Loss from operations                  (1,941,000)     (5,637,000)     (3,264,000)     (7,861,000)
                                          ------------    ------------    ------------    ------------
Other income (expenses)
   Interest and other income                    48,000          34,000          76,000          74,000
   Interest expense                             (8,000)         (3,000)        (11,000)         (6,000)
                                          ------------    ------------    ------------    ------------

                                                40,000          31,000          65,000          68,000
                                          ------------    ------------    ------------    ------------


      Loss before minority interest         (1,901,000)     (5,606,000)     (3,199,000)     (7,793,000)


Minority interest in loss of subsidiary        418,000         391,000         686,000         873,000
                                          ------------    ------------    ------------    ------------

      NET LOSS                            $ (1,483,000    $ (5,215,000)   $ (2,513,000)   $ (6,920,000)

Value of warrants issued                  $         --    $ (2,887,000)   $         --    $ (2,887,000)
                                          ------------    ------------    ------------    ------------
       Net loss attributable to
        common shareholders               $ (1,483,000)   $ (8,102,000)   $ (2,513,000)   $ (9,807,000)
                                          ------------    ------------    ------------    ------------

Basic and diluted net loss per share             $(.15)          $(.63)          $(.26)          $(.84)
                                                   ===             ===             ===             ===

Weighted-average shares outstanding          9,816,531      12,869,226       9,642,059      11,649,288
                                          ============    ============    ============    ============
</TABLE>


        The accompanying notes are an integral part of these statements.




                                       4
<PAGE>


                    MEDIS TECHNOLOGIES LTD. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                              SIX MONTHS ENDED JUNE 30,
                                                                           -------------------------------
                                                                                1999            2000
                                                                                ----            ----
                                                                                            (as restated)
<S>                                                                         <C>             <C>
Cash flows from operating activities
  Net loss                                                                  $ (6,920,000)   $ (2,513,000)
  Adjustments to reconcile net loss to net
   cash used in operating activities
     Depreciation                                                                186,000         182,000
     Amortization of intangible assets                                         1,223,000       2,973,000
     Changes in other long-term liabilities                                       17,000          41,000
     Losses of minority interest                                                (686,000)       (873,000)
     Charge of inventory to research and development expense                     255,000              --
     Compensation expense                                                         63,000       1,041,000
     Write-off of acquired in-process research and development                   885,000              --
     Changes in operating assets and liabilities
      Accounts receivable - other                                                (19,000)        (24,000)
      Inventory                                                                  (47,000)             --
      Prepaid expenses                                                          (129,000)        (22,000)
      Accounts payable                                                            31,000          83,000
      Accrued expenses                                                           214,000          33,000
                                                                            ------------    ------------

        Net cash used in operating activities                                 (1,405,000)     (2,601,000)
                                                                            ------------    ------------
Cash flows from investing activities
  Purchase of property and equipment                                            (171,000)       (180,000)
  Sale of securities and short-term deposits                                     500,000              --
  Proceeds from sale of property and equipment                                        --          22,000
  Acquisition by Medis El of shares of More Energy Ltd.                               --        (320,000)
  Acquisition of shares of Medis El                                                   --        (289,000)
                                                                            ------------    ------------
        Net cash provided by (used in)
            investing activities                                                 329,000        (767,000)
                                                                            ------------    ------------

Cash flows from financing activities
  Repayment of long-term debt                                                    (98,000)        (83,000)
  Proceeds from exercise of stock options - Medis El                                  --         336,000
  Proceeds from issuance of common stock                                       2,091,000       7,323,000
  Proceeds of short-term credit                                                   14,000           4,000
                                                                            ------------    ------------

        Net cash provided by financing activities                              2,007,000       7,580,000
                                                                            ------------    ------------

        Net increase in cash and cash equivalents                                931,000       4,212,000

Cash and cash equivalents at beginning of period                               3,155,000       1,842,000
                                                                            ------------    ------------
Cash and cash equivalents at end of period                                  $  4,086,000    $  6,054,000
                                                                            ============    ============

Supplemental disclosures of cash flow information:
   Cash paid during the period for
     Interest                                                               $     12,000    $      7,000
     Income taxes                                                           $      4,000    $      4,000
   Non-cash investing and financing activities:
     Grant of stock options to employees                                    $         --    $  2,185,000
     Decrease in inventory through increase in fixed assets                 $    197,000    $         --
   Acquisition of minority interest through exchange of shares              $         --    $ 89,393,000
   Acquisition of Medis El shares through increase in accrued liabilities   $         --    $    110,000
   Value of warrants issued to exercising warrantholders                    $         --    $  2,887,000
</TABLE>

The accompanying notes are an integral part of these statements



                                       5
<PAGE>





                    MEDIS TECHNOLOGIES LTD. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE A - NATURE OF OPERATIONS AND BASIS OF PRESENTATION

      Medis Technologies Ltd., a Delaware corporation ("MTL" or the "Company"),
is a holding company, which through its wholly-owned indirect subsidiary, Medis
El Ltd. ("Medis El"), engages in research and development activities. The
Company currently indirectly owns, in whole or in part, a number of different
technologies in various stages of development. Its strategy is to become a
greenhouse for the development of technology products to license, sell, or enter
into joint ventures with large corporations. The Company's technologies include
the CellScan, fuel cells, the toroidal internal combustion engine and
compressor, stirling cycle linear system, reciprocating electric machine, direct
current regulating device and water technologies.

      The accompanying condensed consolidated financial statements should be
read in conjunction with the following notes and with the consolidated financial
statements for the year ended December 31, 1999 and related notes included in
the Company's Registration Statement, as amended, on Form S-1 filed with the
Securities and Exchange Commission (Registration No. 333-83945). Information in
the accompanying condensed consolidated financial statements for the three and
six months ended June 30, 1999 and 2000 is unaudited. The condensed consolidated
financial statements as of June 30, 2000 and for the three and six months ended
June 30, 1999 and 2000 have been prepared in accordance with generally accepted
accounting principles applicable to interim financial information and the rules
and regulations promulgated by the Securities and Exchange Commission.
Accordingly, such condensed consolidated financial statements do not include all
of the information and footnote disclosures required in annual financial
statements. In the opinion of the Company's management, the June 30, 1999 and
2000 unaudited condensed consolidated interim financial statements include all
adjustments, consisting of normal recurring adjustments necessary for a fair
presentation of such condensed consolidated financial statements. The results of
operations for the three and six months ended June 30, 2000 are not necessarily
indicative of the results to be expected for the entire year.

      Certain reclassifications have been made to the 1999 financial statements
to conform to the current year presentation.

NOTE B - CERTAIN TRANSACTIONS

      1.    ISSUANCE OF COMMON STOCK - In January and February 2000, the Company
            completed a private placement of units of its common stock, each
            unit consisting of 66,000 shares of its common stock and 25,000
            warrants. Each warrant is exercisable into one share of common stock
            and has an exercise price of $5.75 per share. An aggregate of
            637,000 shares and 240,833 warrants were issued for aggregate cash
            proceeds of approximately $2,895,000. The Company also issued common
            stock in June 2000 pursuant to the exercise of warrants (see note
            B-10).


      2.    EXERCISES OF MEDIS EL STOCK OPTIONS - During January and February
            2000, employees, including certain officers and a director of Medis
            El, exercised options to purchase an aggregate of 66,100 ordinary
            shares of Medis El. Such exercise generated aggregate cash proceeds
            to Medis El of approximately $336,000.

      3.    ACQUISITION BY MEDIS EL OF MINORITY INTEREST IN MORE ENERGY LTD. -
            In January 2000, Medis El purchased an additional 5% of its
            majority-owned subsidiary, More Energy Ltd. ("More Energy"), for an
            aggregate purchase price of $75,000. Furthermore, in April 2000,
            Medis El



                                       6
<PAGE>

            entered into an agreement to purchase an additional 6.5% of More
            Energy for an aggregate purchase price of $245,000, which was paid
            in April and June 2000. Medis El accounted for these acquisitions of
            minority interests using purchase accounting. The excess of purchase
            price over the book value of the net assets acquired aggregated
            $320,000. This excess purchase price was allocated to in-process
            research and development and, therefore, was charged to research and
            development costs as of the dates of the acquisitions. More Energy
            is developing fuel cell technology. Medis El currently owns a 93%
            interest in More Energy.

      4.    INVESTMENT IN MEDIS EL - On February 23, 2000, Medis El issued an
            additional 107,759 of its ordinary shares to the Company for a
            capital contribution of $2,500,000.

      5.    OPTION GRANTS - On February 21, 2000, the Board of Directors of the
            Company granted options to purchase an aggregate of 165,000 shares
            of common stock under the 1999 Stock Option Plan to employees,
            including an officer, director, and a consultant of the Company and
            to Medis El employees and consultants. The options, which may be
            exercised at $5.00 per share, vest after two years and expire after
            four years. Deferred compensation of approximately $1,468,000, which
            will be charged to expense ratably over the vesting period, was
            recorded for such options. During the six months ended June 30,
            2000, compensation expense of approximately $364,000 was recorded
            relating to such options.

      6.    AGREEMENT WITH PERUVIAN COMPANY - In April and May 2000, pursuant to
            the terms of a June 1999 agreement, as supplemented, with a Peruvian
            company, the Company transferred payments aggregating $110,000 to
            such Peruvian company for the repurchase of a CellScan machine.

      7.    ADDITIONAL OPTIONS ON TECHNOLOGY - Medis El has an option to
            purchase an additional 50% interest for aggregate consideration of
            $60,000, in a company that owns a patent and related applications to
            one of its technologies. Medis El currently owns 25% of such
            Company. The option, which was scheduled to expire on June 30, 2000,
            was extended through October 31, 2000.

      8.    PURCHASE OF SHARES OF MEDIS EL - During the six months ended June
            30, 2000 the Company repurchased or exercised its right to
            repurchase, pursuant to the terms of a settlement agreement entered
            into in November 1999 ("November Settlement") with an Argentinean
            company, an aggregate of 60,000 shares of Medis El from the designee
            of such Argentinean company. The Company paid aggregate cash
            consideration of approximately $289,000 in exchange for 45,000
            shares of Medis El of which 42,000 shares were tendered to the
            Company. The Company recorded a liability of $110,000 which
            represents the purchase price of 15,000 shares of Medis El shares
            pursuant to the November Settlement. The Company recorded
            approximately $379,000 of intangible assets and goodwill and $4,000
            of acquired in-process research and development costs arising from
            these transactions during the six months ended June 30, 2000. On
            June 8, 2000, the Company commenced an action entitled MEDIS
            TECHNOLOGIES LTD. V. CELLSCAN ARGENTINA, S.A., in the Supreme Court
            of the State of New York, County of New York, alleging that Cellscan
            Argentina's refusal to transfer to the Company the remaining 18,000
            shares pursuant to the option provision was a material breach of the
            settlement agreement.

      9.    EXCHANGE OFFER - On April 24, 2000, the Company commenced an offer
            for the approximately 36% of Medis El it did not already
            beneficially own, offering 1.37 of its shares of common stock for
            each ordinary share tendered (the "Exchange Offer"). At the
            expiration of the offer on June 5, 2000, shareholders of Medis El
            tendered an aggregate of 3,643,241 ordinary shares, giving the
            Company ownership of approximately 98% of Medis El's outstanding
            ordinary shares. The remaining 182,669 shares passed to the Company
            by operation of Israeli law upon the expiration of the exchange
            offer. The Company accounted for the exchange using the purchase
            method. The Company calculated the purchase price of the 3,825,910
            shares of Medis El not owned by it



                                       7
<PAGE>

            based on the market price of Medis El ordinary shares. Such purchase
            price was $89,393,000. The company allocated the excess of purchase
            price over net assets acquired to goodwill ($81,867,000), acquired
            technology assets ($6,071,000) and in-process research and
            development, which was charged to research and development expense
            on the acquisition date ($561,000). The Company intends to amortize
            the acquired technology assets over their remaining useful lives of
            three years and the goodwill over five years. During the three and
            six months ended June 30, 2000, the Company recorded amortization
            expense aggregating approximately $1,732,000 related to this
            transaction. The following unaudited pro-forma information gives
            effect to the Exchange Offer as if it had occurred at the beginning
            of each of the periods presented:

<TABLE>
<CAPTION>
                                             Six months ended   Six months ended
                                              June 30, 1999       June 30, 2000
                                              -------------       -------------
<S>                                          <C>                <C>
           Net loss                          $     12,959,000   $     15,259,000
           Net loss attributable to common
              shareholders                   $     12,959,000   $     18,146,000
           Net loss per common share         $           (.87)  $          (1.15)
</TABLE>


                  The pro forma data is for informational purposes only and may
            not necessarily reflect results of operations had the Exchange Offer
            occurred on the above dates.

      10.   EXERCISE AND ISSUANCE OF WARRANTS AND ISSUANCE OF COMMON STOCK - In
            June 2000, the Company issued 859,544 shares of its common stock and
            429,778 warrants (the "June Warrants") upon exercise of existing
            warrants for an aggregate exercise price of approximately
            $4,428,000. The June Warrants were issued as an inducement to the
            Company's existing warrant holders to exercise such warrants, at the
            rate of one June Warrant issued, exercisable at $16.42 per share
            until June 15, 2002, for every two existing warrants exercised. The
            Company estimated the value of the June Warrants and warrants issued
            in July 2000 pursuant to the same offering, in the aggregate, to be
            $2,887,000 (See Note C-3).

      11.   CONSULTING AGREEMENT - In June 2000, the Company entered into an
            agreement with CIBC World Markets Corp. ("CIBC") for capital markets
            and financial and strategic advisory services. The agreement
            commenced on July 15, 2000, has a term of one year and may be
            terminated by either party with 30 days written notice. The Company
            will pay CIBC during the term of the agreement five-year common
            stock warrants to purchase an aggregate of 250,000 shares of common
            stock, with an exercise price to be calculated based on the 30 day
            average closing price preceding delivery of the warrants. If the
            Company requests CIBC to pursue a financing transaction, an
            additional fee would be paid based on a schedule included in the
            agreement.

      12.   RESTATEMENT OF FINANCIAL STATEMENTS - The Company is restating its
            unaudited interim financial statements as of June 30, 2000 and for
            the six and three month period then ended, primarily to include the
            value of vested Medis El options in the purchase price of Medis El's
            ordinary shares in the Exchange Offer (see note B-9). The effect of
            such restatement on the Company's financial statements as of June
            30, 2000 and for the six and three month period then ended was an
            increase in both intangible assets and shareholders' equity of
            $4,170,000. Additionally, the Company is restating its unaudited
            interim financial statements as of June 30, 2000 and for the six and
            three month period then ended to reflect an increase of $487,000 in
            the value of warrants issued to a consultant, which resulted in an
            increase in net loss of a like amount for the six and three month
            periods ended June 30, 2000.



                                       8
<PAGE>

NOTE C - SUBSEQUENT EVENTS

      1.    APPOINTMENT OF ADVISORY BOARD - In July 2000, the Company appointed
            a corporate advisory board to assist it with its business strategy
            and to build relationships with third parties to assist in the
            development of its technologies. The advisory board is initially
            comprised of three individuals. As of July 12, 2000, the Company
            issued warrants to purchase an aggregate of 25,000 shares of its
            common stock to each of the members of the advisory board.

      2.    In July 2000, an existing warrantholder exercised warrants to
            purchase 33,000 shares of common stock for an aggregate exercise
            price of $165,000.

      3.    In July 2000, warrants to purchase 19,500 shares of the Company's
            common stock were exercised pursuant to the same offer to
            warrantholders described in Note B-10, for aggregate proceeds of
            $97,500. The Company issued an additional 9,750 warrants pursuant to
            such exercise.

      4.    In August 2000, the Company entered into a stipulation and order of
            settlement with Cellscan Argentina dismissing with prejudice MEDIS
            TECHNOLOGIES LTD. V. CELLSCAN ARGENTINA, S.A., which requires
            Cellscan Argentina to tender to the Company 18,000 shares of Medis
            El for aggregate cash consideration of $130,000. In return, the
            Company granted certain "piggy-back" registration rights to Cellscan
            Argentina with respect to shares underlying warrants issued to
            Cellscan Argentina pursuant to the November Settlement.

      5.    As of July 15, 2000, the Company issued warrants to purchase 100,000
            shares of common stock to CIBC (See Note B-11).

NOTE D - LIQUIDITY

      Since inception, the Company has incurred operating losses and has used
cash in its operations. Accordingly, the Company has relied on financing
activities, principally the sale of its stock, to fund its research and
development activities. The Company believes this dependence will continue
unless it is able to successfully develop and market its technologies. However,
there can be no assurance that the Company will be able to continue to obtain
financing or successfully develop and market its technologies



                                       9
<PAGE>





ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

FORWARD LOOKING STATEMENTS

      Some of the information in this quarterly report contains forward-looking
statements that involve substantial risks and uncertainties. You can identify
these statements by forward-looking words such as "may," "will," "expect,"
"anticipate," "believe," "estimate," and "continue" or similar words. You should
read statements that contain these words carefully because they:

      o     discuss our future expectations;
      o     contain projections of our future results of operations or of our
            financial condition; or
      o     state other "forward-looking" information.

We believe it is important to communicate our expectations to our investors.
However, there may be events in the future that we are not able to accurately
predict or over which we have no control. The risk factors listed in our most
recent registration statement, as well as any cautionary language in this
quarterly report, provide examples of risks, uncertainties and events that may
cause our actual results to differ materially from the expectations we describe
in our forward-looking statements. You should be aware that the occurrence of
the events described in these risk factors and elsewhere in this quarterly
report could have a material adverse effect on our business, operating results
and financial condition.

INTRODUCTION

      This presentation includes the operations of our wholly and majority owned
subsidiaries, including Medis El, unless we tell you otherwise.

RESULTS OF OPERATIONS

      From our inception in April 1992 through June 30, 2000, we have generated
a cumulative net loss of $30,535,000. We expect to incur additional operating
losses during the remainder of 2000 and perhaps beyond, principally as a result
of our continuing anticipated research and development costs, and due to
anticipated limited sales of our technologies. We do not expect to substantially
increase in the future our research and development expenses beyond current
levels until we are able to generate revenues or receive funds from third
parties for research and development. If our funds continue to decrease due to
our current spending levels and we are unable to generate revenues or receive
funds from third parties for research and development, we expect to curtail
development of one or more technologies. Furthermore, for so long as our
technologies remain in the development or testing phase, we do not expect our
selling, general and administrative expenses to increase substantially from
historical levels. If we begin to market and sell any of our technologies, we
will increase such expenses to the extent necessary, which we expect to fund out
of our revenues.

SIX MONTHS ENDED JUNE 30, 2000 COMPARED TO SIX MONTHS ENDED JUNE 30, 1999 AND
THREE MONTHS ENDED JUNE 30, 2000 COMPARED TO THREE MONTHS ENDED JUNE 30, 1999

      We sustained net losses of $6,920,000 and $5,215,000 during the six and
three months ended June 30, 2000, respectively, compared to $2,513,000 and
$1,483,000 during the six and three months ended June 30, 1999, respectively.
The increases in net losses can primarily be attributed to increases in
amortization of intangible assets acquired, research and development costs and
selling, general and administrative expenses.



                                       10
<PAGE>

      Research and development costs increased to $2,572,000 and $1,791,000 for
the six and three months ended June 30, 2000, respectively, as compared to
$1,256,000 and $872,000 during the six and three months ended June 30, 1999,
respectively. The increases in both periods can be largely attributed to
increased research and development activity pertaining to:

      o     the further refinement of the CellScan, in which we incurred costs
            of approximately $1,117,000 and $632,000 during the six and three
            months ended June 30, 2000, respectively, compared to approximately
            $840,000 and $553,000 in the same periods of 1999;
      o     development of the fuel cell technology, in which we incurred costs
            of approximately $769,000 and $626,000 during the six and three
            months ended June 30, 2000, respectively. This includes expenditures
            aggregating $320,000 and $270,000 during the six and three months
            ended June 30, 2000, respectively, to acquire additional interests
            in Medis El's majority owned subsidiary, More Energy, which
            represents acquired in-process research and development, and an
            allocation of the write-off of acquired in-process research and
            development in connection with the exchange offer to fuel cell
            technologies of approximately $182,000. This is compared to costs
            incurred during the six and three months ended June 30, 1999 of
            approximately $96,000 and $58,000; and
      o     development of the toroidal engine, in which we incurred costs of
            approximately $279,000 and $230,000 during the six months and three
            months ended June 30, 2000, including an allocation of the write-off
            of acquired in-process research and development in connection with
            the exchange offer to the toroidal engine of approximately $151,000.
            This is compared to cost incurred of approximately $96,000 and
            $43,000 during the six months and three ended June 30, 1999.

Additionally, during the six months ended June 30, 1999, we recorded as a credit
to research and development expense a payment of $200,000 received during the
first quarter of 1999 under a December 1998 technology development agreement
with The Coca-Cola Company.

      Selling, general and administrative expenses for the six and three months
ended June 30, 2000 amounted to approximately $2,316,000 and $1,486,000,
respectively, compared to approximately $785,000 and $457,000 for the six and
three months ended June 30, 1999. These increases can be primarily attributed to
additional legal, accounting and related fees relating to our registration and
tender offer in April 2000 for the approximately 36% of Medis El's outstanding
ordinary shares not owned by us, as well as non-cash charges related to stock
options and higher personnel costs.

      Amortization of intangible assets amounted to $2,973,000 and $2,360,000
during the six and three months ended June 30, 2000, compared to $1,223,000 and
$612,000 for the six and three months ended June 30, 1999. These increase were
primarily the result of amortization expense of approximately $1,732,000 during
each of the six and three month periods relating to goodwill approximating
$81,867,000 and acquired technology assets approximating $6,071,000 acquired
upon the consummation of the exchange offer. Shareholders of Medis El tendered
an aggregate of 3,643,241 ordinary shares, giving us ownership of approximately
98% of Medis El's outstanding ordinary shares. The remaining 182,669 ordinary
shares passed to us by operation of Israeli law upon the expiration of the
exchange offer.

      Management believes that, as an additional operational measurement,
earnings (loss) before interest, taxes, depreciation, and amortization or
EBITDA, is useful and meaningful to an understanding of our operating
performance. EBITDA should not be considered in isolation or as a substitution
for net income (loss) or cash flow data or as a measure of our profitability or
liquidity. Items excluded from



                                       11
<PAGE>

EBITDA, such as depreciation and amortization, are significant components in
understanding and assessing our financial performance. All companies do not
calculate EBITDA the same way.

      The computation of EBITDA for the six and three months ended June 30, 2000
and 1999 is set forth in the table below:

<TABLE>
<CAPTION>
                                        Six Months Ended             Three Months Ended
                                             June 30                       June 30
                                        1999         2000             1999        2000
                                        ----         ----             ----        ----
<S>                                <C>            <C>            <C>            <C>
Net Loss attributable to common
  shareholders                     ($2,513,000)   ($9,807,000)   ($1,483,000)   ($8,102,000)
Add: value of warrants issued               --      2,887,000             --      2,887,000
Add: interest expense                   11,000          6,000          8,000          3,000
Less: interest income                  (76,000)       (74,000)       (48,000)       (34,000)
Add: amortization                    1,223,000      2,973,000        612,000      2,360,000
Add: depreciation                      186,000        182,000        101,000         90,000
                                   -----------    -----------    -----------    -----------
     EBITDA                        ($1,169,000)   ($3,833,000)     ($810,000)   ($2,796,000)
                                   ============   ===========    ===========    ===========
</TABLE>

      EBITDA for the six months ended June 30, 2000 and 1999 includes non-cash
equity based compensation of $1,041,000 and $63,000, respectively.

      Increases in loss before interest, taxes, depreciation, and amortization,
for the six and three months ended June 30, 2000 as compared to the prior year
occurred due to increases in research and development costs, and selling,
general and administrative expenses for the reasons discussed earlier in this
section.

LIQUIDITY AND CAPITAL RESOURCES

      We have historically financed our operations primarily through the
proceeds of investor equity financing, long-term bank loans, grants from the
Chief Scientist of the Ministry of Industry and Commerce of Israel with respect
to the CellScan, initial sales of our products and fees from the granting of
exclusive distribution rights.

      In 1999, we issued a total of 581,004 shares of our common stock and
warrant to purchase 193,668 shares of common stock for an aggregate of
$2,324,000. The proceeds of such offerings were used:

      o     for research and development projects with respect to our products
            and technologies; and
      o     for selling, general and administrative expenses.

      In 2000, as of June 30, 2000, we issued a total of 1,496,544 shares of our
common stock and warrants to purchase 670,611 shares of common stock for
aggregate proceeds of approximately 7,323,000. Furthermore, in July 2000, we
issued a total of 52,500 shares of our common stock and warrants to purchase
9,750 shares of our common stock for an aggregate of $262,500. We used and
intend to use the proceeds of such offerings to fund the further research and
development of our products and technologies and for selling, general and
administrative expenses. Additionally, in the first quarter of 2000, employees,
including Medis El's executive vice president and vice president-finance, and a
director exercised options to purchase an aggregate of 66,100 ordinary shares of
Medis El, for an aggregate exercise price of approximately $336,000. The
proceeds of such option exercises are similarly being used for research and
development and selling, general and administrative expenses. We do not intend
to cause Medis El to issue any more of its shares to third parties, whether
through the exercise of



                                       12
<PAGE>

stock options or otherwise, as we intend that all future financings of Medis El
will be effected through us.

      For the six months ended June 30, 2000, we used cash of $2,601,000 in
connection with our operating activities, as compared to $1,405,000 for the six
months ended June 30, 2000. The increase was primarily attributable to increases
in research and development and selling general and administrative expenses
during the period, for the reasons discussed above.

      For the six months ended June 30, 2000, we used $767,000 of cash in our
investing activities, compared to $329,000 being provided from investing
activities during the six months ended June 30, 1999. During the six months
ended June 30, 2000 the cash used in investing activities was due to purchases
of shares of Medis El and More Energy not owned by us aggregating $609,000 and
purchases of property and equipment of $180,000, offset by proceeds from
disposals of fixed assets of $22,000. During the six months ended June 30, 1999,
the cash provided from investing activities was due principally to the maturity
of a short-term investment of $500,000, offset by purchases of property and
equipment of $171,000.

      For the six months ended June 30, 2000, we had cash provided by financing
activities of $7,580,000 compared to $2,007,000 for the six months ended June
30, 1999. The increase was due to an increase in funds raised from private
placements of our securities and the exercise of our outstanding warrants which
aggregated $7,323,000 for the six months ended June 30, 2000, as compared to
$2,091,000 for the six months ended June 30, 1999. Cash provided from financing
activities during the six months ended June 30, 2000 also included proceeds of
$336,000 from the exercise of Medis El stock options, of which there were none
during the six months ended June 30, 1999.

      As of June 30, 2000, we had approximately $6,054,000 in cash and cash
equivalents. Our working capital and capital requirements at any given time
depend upon numerous factors, including, but not limited to:

      o     the progress of research and development programs;
      o     the status of our technologies;
      o     the results of pre-clinical testing and clinical trials;
      o     the level of resources that we devote to the development of our
            technologies, patents, marketing and sales capabilities.

Another contributing factor is the status of collaborative arrangements with
businesses and institutes for research and development.

      Management expects that our present funds are sufficient to support our
present activities for at least 12 months. Beyond such time, we will require
capital infusions of cash from investors, whether private investors or through
companies or other organizations assisting in the development of our
technologies, to continue our operations. To the extent we are unable to acquire
additional funds, we will curtail research and development of one or more
technologies until such time as we acquire additional funds.




                                       13
<PAGE>


ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

DISCLOSURE ABOUT MARKET RISK

IMPACT OF INFLATION AND DEVALUATION ON RESULTS OF OPERATIONS, LIABILITIES AND
ASSETS

      In connection with our currency use, we operate in a mixed environment.
Payroll is paid in our local currency and the local currency of each of our
subsidiaries. Consideration for virtually all sales and Medis El's bank loans
are either in dollars or dollar-linked currency. As a result, not all monetary
assets and all monetary liabilities are linked to the same base in the same
amount at all points in time, which may cause currency fluctuation related
losses. In order to help minimize such losses, Medis El currently invests its
liquid funds in both dollar-linked and Shekel based assets.

      For many years prior to 1986, the Israeli economy was characterized by
high rates of inflation and devaluation of the Israeli currency against the
United States dollar and other currencies. However, since the institution of the
Israeli Economic Program in 1985, inflation, while continuing, has been
significantly reduced and the rate of devaluation has been substantially
diminished. During 1989 and 1990, the dollar declined in value relative to major
world currencies. Because governmental policies in Israel linked exchange rates
to a weighted basket of foreign currencies of Israel's major trading partners,
the exchange rate between the NIS and the dollar remained relatively stable
during this period. However, Israel effected devaluations of the NIS against the
dollar as follows:

<TABLE>
<S>                                         <C>
                    1991                    11.5%

                    1992                     21.1

                    1993                      8.0

                    1994                      1.1

                    1995                      3.9

                    1996                      3.7

                    1997                      8.8

                    1998                     17.6

                    1999                    (0.17)
</TABLE>

During the three years ended December 31, 1991 and the four years ended December
31, 1996, the rate of inflation in Israel exceeded the rate of devaluation of
the NIS against the dollar, but in 1998, 1997 and 1992, the rate of devaluation
of the NIS against the dollar exceeded the rate of inflation in Israel. In 1999,
the rate of Israeli inflation was 1.3% and the NIS appreciated by .17% against
the dollar.

IMPACT OF POLITICAL AND ECONOMIC CONDITIONS

      The state of hostility which has existed in varying degrees in Israel
since 1948, its unfavorable balance of payments and its history of inflation and
currency devaluation, all represent uncertainties which may adversely affect our
business.




                                       14
<PAGE>


PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

      Pursuant to a settlement agreement dated November 22, 1999 dismissing with
prejudice an action pending in the Supreme Court of the State of New York,
County of New York, entitled CellScan Argentina, S.A. v. Medis El Ltd., et. al.,
we commenced in January 2000 pursuant to a put/call provision in the settlement
agreement, the repurchase of 3,000 of Medis El's ordinary shares per week from a
designee of the plaintiff, initially at $6.00 per share, and increasing by $.50
per share every month thereafter beginning March 1, 2000. Pursuant to the
settlement agreement, we exercised our right to repurchase 60,000 of such
shares. Cellscan Argentina refused to transfer 18,000 of such shares.
Consequently, on June 8, 2000, we commenced an action entitled Medis
Technologies Ltd. v. Cellscan Argentina, S.A., in the Supreme Court of the State
of New York, County of New York, alleging that Cellscan Argentina's refusal to
transfer 18,000 of such shares to us pursuant to the put/call provision was a
material breach of the settlement agreement.

      In August 2000, we entered into a stipulation and order of settlement with
Cellscan Argentina dismissing the action with prejudice, which requires Cellscan
Argentina to sell to us 18,000 shares of Medis El for aggregate cash proceeds of
$109,000. In return, we granted certain "piggy-back" registration rights to
Cellscan Argentina with respect to shares of our common stock underlying
warrants owned by Cellscan Argentina.

      We are not otherwise party to any material litigation, and we are not
aware of any threatened litigation that would have a material adverse effect on
us or our business.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

      In June 2000, we issued 859,544 shares of our common stock and 429,778
warrants, exercisable at $16.42 per share until June 15, 2002, upon exercise of
existing warrants. Our net proceeds from the exercise of the existing warrants
was approximately $4,428,000.

      In July 2000, we issued 19,500 shares of our common stock and 9,750
warrants, exercisable at $16.42 per share until June 15, 2002, pursuant to the
same offer described above. Our net proceeds from the exercise of the existing
warrants was approximately $97,500. Also in July 2000, we issued 33,000 shares
of our common stock upon exercise of warrants for an aggregate exercise price of
$165,000. We also issued warrants to purchase an aggregate of 100,000 shares of
our common stock pursuant to a consulting agreement, exercisable at $20.48 per
share until July 15, 2001, and warrants to purchase an aggregate of 25,000
shares of our common stock to each member of our advisory board, exercisable at
$20.00 per share until July 11, 2003.

      Exemption from registration under the Securities Act of 1933, as amended,
in connection with the foregoing transactions, is claimed under Section 4(2) of
the Securities Act as a transaction by the issuer not involving a public
offering. Each certificate evidencing such shares of common stock bears an
appropriate restrictive legend and "stop transfer" orders are maintained on our
stock transfer records. None of these sales involved participation by an
underwriter or a broker-dealer.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)     Exhibits:
        27.1 Financial Data Schedule

(b)     Reports on Form 8-K:
        None.



                                       15
<PAGE>


                                   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 thereunto duly authorized




                                                /s/  ROBERT K. LIFTON
                                                -------------------------
                                                Robert K. Lifton
                                                Chairman and Chief
                                                Executive Officer


                                                /s/  ISRAEL FISHER
                                                -------------------------
                                                Israel Fisher
                                                Vice President Finance
                                                (Principal Financial and
                                                Accounting Officer)
Date: January 29, 2001


                                       16