OHIO 31-0121318
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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Indicate by check mark whether the registrant (1) has 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 the filing requirements for at least the past 90 days. YES X NO
State the number of shares outstanding of each of the registrant's classes of common equity, as of the latest practicable date: 1,823,256 shares of Common Stock, without par value, were outstanding at October 31, 2002.
PAGE NO.
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets as of September 30, 2002 (unaudited)
and December 31, 2001 3 - 4
Statements of Operations For the Three Months and Nine Months
Ended September 30, 2002 and 2001 (unaudited) 5
Statements of Cash Flows For the Nine Months
Ended September 30, 2002 and 2001(unaudited) 6 - 7
Notes to Financial Statements (unaudited) 8 - 10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. 11-15
Item 3. Controls and Procedures 15
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. N/A
Item 2. Changes in Securities and Use of Proceeds. N/A
Item 3. Defaults Upon Senior Securities. N/A
Item 4. Submission of Matters to a Vote of Security Holders. N/A
Item 5. Other Information. N/A
Item 6. Exhibits and Reports on Form 8-K. 16
Signatures. 16
Certifications of CEO and CFO. 17-18
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SEPTEMBER 30, DECEMBER 31,
2002 2001
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(UNAUDITED)
CURRENT ASSETS
Cash $ 43,654 $ 118,083
Accounts and notes receivable
Trade, less allowance for doubtful accounts of $17,000
and $13,000, respectively 401,043 365,141
Contracts Receivable 59,976 --
Related party receivables 11,257 4,616
Employees 12,876 15,625
Other 891 20,814
Inventories 845,142 857,992
Prepaid expenses 49,542 12,851
----------- -----------
Total current assets 1,424,381 1,395,122
----------- -----------
PROPERTY AND EQUIPMENT,
AT COST
Machinery and equipment 2,360,660 2,306,128
Furniture and fixtures 22,124 20,424
Leasehold improvements 346,823 346,823
----------- -----------
2,729,607 2,673,375
Less accumulated depreciation (2,093,523) (1,919,358)
----------- -----------
636,084 754,017
----------- -----------
OTHER ASSETS
Intangibles 43,990 43,992
----------- -----------
TOTAL ASSETS $ 2,104,455 $ 2,193,131
=========== ===========
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The accompanying notes are an integral part of these financial statements.
SEPTEMBER 30, DECEMBER 31,
2002 2001
------------- ------------
(UNAUDITED)
CURRENT LIABILITIES
Capital lease obligation, current portion $ 42,366 $ 41,596
Capital lease obligation, shareholder, current portion 42,289 25,161
Note payable shareholders, current portion 70,000 34,000
Accounts payable 422,246 318,954
Accounts payable, shareholders 24,116 7,426
Accrued contract expenses 18,548 179,748
Accrued personal property taxes 40,501 54,384
Accrued expenses 75,184 42,450
----------- -----------
Total current liabilities 735,250 703,719
----------- -----------
CAPITAL LEASE OBLIGATION, NET OF
CURRENT PORTION 72,249 103,865
----------- -----------
CAPITAL LEASE OBLIGATION, SHAREHOLDER, NET OF
CURRENT PORTION 26,139 43,267
----------- -----------
NOTE PAYABLE SHAREHOLDERS, NET OF CURRENT
PORTION 98,270 84,270
----------- -----------
REDEEMABLE CONVERTIBLE PREFERRED
STOCK (Series A)
10% cumulative, nonvoting, no par value,
$1,000 stated value, liquidation and
mandatory redemption at stated value
per share plus unpaid and accumulated
dividends of $230.00 and $188.33 per
share respectively 121,770 111,176
----------- -----------
COMMITMENTS AND CONTINGENCIES -- --
----------- -----------
SHAREHOLDERS' EQUITY
Convertible preferred stock, Series B, 10%
cumulative, nonvoting, no par
value, $10 stated value, optional
redemption at 103% 353,792 333,136
Common stock, no par value, authorized 15,000,000
shares; 1,823,256 shares issued and outstanding 6,378,216 6,366,966
Additional paid-in capital 15,877 47,127
Accumulated deficit (5,697,108) (5,600,395)
----------- -----------
1,050,777 1,146,834
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 2,104,455 $ 2,193,131
=========== ===========
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The accompanying notes are an integral part of these financial statements.
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------------- ---------------------------
2002 2001 2002 2001
---- ---- ---- ----
SALES REVENUE 794,803 $ 820,044 $ 2,151,396 $ 2,511,154
CONTRACT RESEARCH REVENUE 68,376 71,769 211,909 345,910
----------- ----------- ----------- -----------
863,179 891,813 2,363,305 2,857,064
----------- ----------- ----------- -----------
COST OF SALES REVENUE 518,479 513,250 1,470,482 1,585,659
COST OF CONTRACT RESEARCH 71,544 42,369 210,005 266,055
----------- ----------- ----------- -----------
590,023 555,619 1,680,487 1,851,714
----------- ----------- ----------- -----------
GROSS MARGIN 273,156 336,194 682,818 1,005,350
GENERAL AND ADMINISTRATIVE EXPENSES 200,983 244,708 644,065 652,320
SALES AND PROMOTIONAL EXPENSES 63,088 52,249 157,576 178,344
----------- ----------- ----------- -----------
INCOME (LOSS) FROM OPERATIONS 9,085 39,237 (118,823) 174,686
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE)
Interest, net (6,679) (3,291) (15,689) (13,571)
Insurance proceeds -- -- 39,083 --
Miscellaneous, net (428) (298) (1,284) (249)
----------- ----------- ----------- -----------
(7,107) (3,589) 22,110 (13,820)
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE INCOME TAX 1,978 35,648 (96,713) 160,866
INCOME TAX EXPENSE -- -- -- --
----------- ----------- ----------- -----------
NET INCOME (LOSS) 1,978 35,648 (96,713) 160,866
DIVIDENDS ON PREFERRED STOCK (6,061) (9,360) (24,781) (28,081)
ACCRETION OF REDEEMABLE CONVERTIBLE
PREFERRED (SERIES A) -- (3,881) (6,469) (9,737)
----------- ----------- ----------- -----------
INCOME (LOSS) APPLICABLE TO COMMON
SHARES $ (4,083) $ 22,407 $ (127,963) $ 123,048
=========== =========== =========== ===========
EARNINGS PER SHARE - BASIC AND DILUTIVE
(Note 2)
NET INCOME (LOSS) PER COMMON SHARE
Basic $ (0.00) $ 0.01 $ (0.07) $ 0.07
=========== =========== =========== ===========
Dilutive $ (0.00) $ 0.01 $ (0.07) $ 0.07
=========== =========== =========== ===========
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 1,823,256 1,821,926 1,823,256 1,820,618
=========== =========== =========== ===========
Dilutive 1,823,256 1,821,926 1,823,256 1,820,618
=========== =========== =========== ===========
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The accompanying notes are an integral part of these financial statements.
2002 2001
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (96,713) $ 160,866
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Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Depreciation 174,165 156,171
Amortization 2,228 1,838
Inventory reserve -- (20,059)
Provision for doubtful accounts 4,000 (9,000)
Changes in operating assets and liabilities:
(Increase) decrease in assets:
Accounts receivable (72,596) (41,052)
Inventories 12,850 (243,637)
Prepaid expenses (36,691) 28,617
Other assets (2,227) (4,550)
Increase (decrease) in liabilities:
Accounts payable 119,982 124,932
Accrued expenses (142,349) 123,966
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Total adjustments 59,362 117,226
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Net cash provided by (used in) operating activities (37,351) 278,092
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CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (56,232) (151,732)
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Net cash used in investing activities (56,232) (151,732)
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CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds (payments) on note payable, shareholders 50,000 (14,000)
Principal payments on capital lease obligations (30,846) (26,473)
Proceeds from exercise of common stock options -- 4,125
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Net cash provided by (used in) financing activities 19,154 (36,348)
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The accompanying notes are an integral part of these financial statements.
2002 2001
---- ----
NET INCREASE (DECREASE) IN CASH (74,429) 90,012
CASH - Beginning of period 118,083 202,406
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CASH - End of period $ 43,654 $292,418
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SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION
Cash paid during the years for:
Interest $ 8,699 $ 14,135
Income taxes $ -- $ --
SUPPLEMENTAL DISCLOSURES OF NONCASH
INVESTING AND FINANCING ACTIVITIES
Common stock was issued as partial payment for accounts payable $ -- $ 19,000
Property and equipment was purchased by capital lease $ -- $ 97,911
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The accompanying notes are an integral part of these financial statements
NOTE 1. BUSINESS ORGANIZATION AND PURPOSE
Superconductive Components, Inc. (the "Company") is an Ohio corporation that was incorporated in May 1987. The Company was formed to develop, manufacture and sell materials using superconductive principles. Operations have since been expanded to include the manufacture and sale of non-superconductive materials. The Company's domestic and international customer base is primarily in the thin film battery, high temperature superconductor, lens and optical coatings, research, electronics and functional coatings industries.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with instructions to Form 10-QSB and Article 10 of Regulation S-X. Accordingly they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments considered necessary for fair presentation of the results of operations for the periods presented have been included. The financial statements should be read in conjunction with the audited financial statements and the notes thereto for the fiscal year ended December 31, 2001. Interim results are not necessarily indicative of results for the full year.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
NOTE 3. INVENTORY
Inventory is comprised of the following:
SEPTEMBER 30, DECEMBER 31,
2002 2001
---- ----
(unaudited)
Raw materials $536,741 $562,327
Work-in-progress 164,248 121,908
Finished goods 181,942 211,546
Inventory reserve (37,789) (37,789)
-------- --------
$845,142 $857,992
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NOTE 4. COMMON STOCK AND STOCK OPTIONS
The following options were granted under the 1995 Stock Option Plan during the three months ended September 30, 2002:
GRANT DATE # OPTIONS GRANTED OPTION PRICE
---------- ----------------- ------------
July 15, 2002 50,000 $1.55
NOTE 5. EARNINGS PER SHARE
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Basic income (loss) per share is calculated as income available to common stockholders divided by the weighted average of common shares outstanding. Diluted earnings per share is calculated as diluted income (loss) available to common stockholders divided by the diluted weighted average number of common shares. Diluted weighted average number of common shares has been calculated using the treasury stock method for Common Stock equivalents, which includes Common Stock issuable pursuant to stock options and Common Stock warrants. The following is provided to reconcile the earnings per share calculations:
Three months ended Sept. 30, Nine months ended Sept. 30,
2002 2001 2002 2001
---- ---- ---- ----
Income (loss) applicable
to common shares $ (4,083) $ 22,407 $ (127,963) $ 123,048
========= ========= ========= =========
Weighted average
common shares
outstanding - basic 1,823,256 1,821,926 1,823,256 1,820,618
Effect of dilutions
stock options -- -- -- --
--------- --------- --------- ---------
Weighted average
shares outstanding -
diluted 1,823,256 1,821,926 1,823,256 1,820,618
========= ========= ========= =========
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NOTE 6. SEGMENT REPORTING
The Company has, in the past, reported financial results in terms of Superconductive Components Inc. (SCI) and Target Materials Inc. (TMI) segments. In the Company's Form 10-KSB for the year ended December 31, 2001, the Company announced that it would no longer operate the TMI and SCI divisions separately, but rather, would combine the divisions into a single operating unit, and therefore, would cease reporting financial results separate for the two divisions beginning in 2002. Accordingly, this report does not report financial results separate for the two divisions. It was management's opinion that a single streamlined company will benefit in the following areas: manufacturing efficiencies and manufacturing cost containment; improved sales through the merging of the strengths of the two material businesses; and improvements in quality through increased availability of analytical equipment and personnel.
The Company publicly announced its new corporate structure on July 1, 2002 and stated that SCI Engineered Materials would become the trade name of the Company.
NOTE 7. RELATED PARTY TRANSACTIONS
The Company retained a related party to provide management assistance for a fee of $14,550 per month beginning January 15, 2002. This agreement was terminated after three (3) months and all fees have been paid.
NOTE 8. REDEEMABLE CONVERTIBLE PREFERRED STOCK (SERIES A)
Effective May 31, 2002, the 99 shares of Series A redeemable convertible preferred stock ($99,000) and accrued dividends ($22,770) became fully redeemable by the Company.
The Chairman of the Board owns these shares. At September 30, 2002, the Company still owes the total outstanding balance of $121,770.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the Financial Statements and Notes contained herein.
The following section contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that express, or involve discussions as to expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as will likely result, are expected to, will continue, is anticipated, estimated, projection, outlook) are not statements of historical fact and may be forward looking. Forward-looking statements involve estimates, assumptions and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. These forward-looking statements are based largely on the Company's expectations and are subject to a number of risks and uncertainties, including but not limited to economic, competitive, regulatory, growth strategies, available financing and other factors discussed elsewhere in this report and in other documents filed by the Company with the Securities and Exchange Commission. Many of these factors are beyond the Company's control. Actual results could differ materially from the forward-looking statements made. In light of these risks and uncertainties, there can be no assurance that the results anticipated in the forward-looking information contained in this report will, in fact, occur.
Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statements are made or reflect the occurrence of unanticipated events, unless necessary to prevent such statements from becoming misleading. New factors emerge from time to time and it is not possible for management to predict all factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions and estimates that affect the amounts reported in the Financial Statements and accompanying notes. Note 2 to the Financial Statements in the Annual Report on Form 10-KSB for the year ended December 31, 2001 describes the significant accounting policies and methods used in the preparation of the Financial Statements. Estimates are used for, but not limited to, accounting for doubtful accounts, inventory allowances, property and equipment depreciable lives, patents and licenses useful lives and assessing changes in which impairment of certain long-lived assets may occur. Actual results could differ from these estimates. The following critical accounting policies are impacted significantly by judgments, assumptions and estimates used in the preparation of the Financial Statements. The allowance for doubtful accounts is based on our assessment of the collectibility of specific customer accounts and the aging of the accounts receivable.
If there is a deterioration of a major customer's credit worthiness or actual defaults are higher than our historical experience, our estimates of the recoverability of amounts due us could be adversely affected. Inventory purchases and commitments are based upon future demand forecasts. If there is a sudden and significant decrease in demand for our products or there is a higher risk of inventory obsolescence because of rapidly changing technology and customer requirements, we may be required to increase our inventory allowances and our gross margin could be adversely affected. Depreciable and useful lives estimated for property and equipment, licenses and patents are based on initial expectations of the period of time these assets and intangibles will provide benefit to our Company. Changes in circumstances related to a change in our business, change in technology or other factors could result in these assets becoming impaired, which could adversely affect the value of these assets.
To date, the Company has received revenue predominantly from commercial sales, government research contracts and non-government research contracts. The Company has incurred cumulative losses of $5,697,108 from inception to September 30, 2002.
Revenues for the nine months ended September 30, 2002 were $2,363,305 compared to $2,857,064, a decrease of $493,759 or 17.3% from the nine months ended September 30, 2001.
Product revenues decreased to $2,151,396 in 2002 from $2,511,154 in 2001 or a decrease of 14.3%. The decline in revenues for the first nine months is due to lower product shipments as a result of the weak U.S. economy and lower sales of tantalum and various scrap metals compared to the same period last year.
Contract research revenues were $211,909 in 2002 as compared to $345,910 in 2001. The decrease is due to a Phase I SBIR grant from the National Science Foundation that expired in 2001. Revenues of $100,000 from this grant are included in 2001 revenues. In addition, 2001 included revenues from a Phase II SBIR grant from the National Aeronautics and Space Administration. This grant ended March 31, 2001 and $70,454 of revenue was recognized in 2001.
The Company was awarded a $300,000 extension to a Phase II SBIR grant from the National Science Foundation in the third quarter of 2001 and $184,616 of revenue was recognized in the first nine months of 2002.
The Company was awarded a $100,000 Phase I SBIR from the Department of Energy in May 2002. This grant began in August 2002 and $22,222 of revenue was recognized in the third quarter of 2002.
The Company became a member of a team led by Oxford Instruments Superconducting Technology, that was awarded a grant from the Department of Energy Superconductivity Partnership Initiative Program. This program will begin in the fourth quarter of 2002.
Total gross margin in 2002 was $682,818 or 28.9% of total revenue compared to $1,005,350 or 35.2% in 2001. Gross margin on product revenue was 31.6% in 2002 versus 36.9% in 2001. The decrease was due to sales of scrap metal in 2001. Gross margin on contract research revenue was 0.9% for 2002 compared to 23.1% in 2001. The decrease in gross margin on contract research revenue was due to the expiration of a Phase I SBIR grant from the National Science Foundation, which began in January 2001, and lower sub-contractor costs in 2001.
Selling expense in 2002 decreased to $157,576 from $178,344 in 2001, a decrease of 11.6%. The decrease was due to a reduced staff and lower commission expense compared to 2001.
General and administrative expense in 2002 decreased to $644,065 from $652,320 or 1.3%. The decrease in these costs was due primarily to a reduction in administrative staff and a reduction in legal and accounting fees. Some of these savings are offset by consulting services for management assistance and for the use of production utilization consultants and implementation of their suggestions for lean manufacturing. These projects represented $54,821 for the first nine months of 2002.
Internal research and development costs are expensed as incurred. Research and development costs, including testing, for 2002 were $133,915 compared to $125,070 in 2001, an increase of 7.1%. Internal research and development costs increased due to an increase in research staff.
Interest expense was $19,509 for the nine months ended September 30, 2002 compared to $16,767 for the nine months ended September 30, 2001. Interest expense to related parties was $10,810 and $2,632 for the nine months ended September 30, 2002, and September 30, 2001, respectively.
Net income (loss) per common share based on the income (loss) applicable to common shares for the nine months ended September 30, 2002 and 2001 was $(0.07) and $0.07, respectively. The income (loss) applicable to common shares includes the net income (loss) from operations, Series A and B preferred stock dividends and the accretion of Series A preferred stock. The net income (loss) per common share from operations was $(0.05) and $0.09, respectively. The difference between the net loss from operations and the loss applicable to common shares of $(0.02) and $(0.02), respectively, is a result of the preferred position that the preferred shareholders have in comparison to the common shareholders.
Dividends on the Series A and B preferred stock accrue at 10% annually on the outstanding shares. Dividends on the Series A preferred stock totaled $4,125 for the nine months ended September 30, 2002 and $7,425 for the nine months ended September 30, 2001. Dividends on the Series B preferred stock totaled $20,656 for each period. The accretion of Series A preferred stock represents issue costs of $70,277 that were netted against the proceeds of Series A preferred stock. The issue costs are being amortized over the payout period of seven years of income (loss) applicable to common shares and additional paid-in capital. The accretion totaled $6,469 for the first nine months of 2002 and $9,737 for the first nine months of 2001.
Basic earnings per common share for the nine months ended September 30, 2002, were $(0.07) per share with 1,823,256 average common shares outstanding as compared to $0.07 per share and 1,820,618 weighted average common shares outstanding for the nine months ended September 30, 2001.
Diluted earnings per common share for the nine months ended September 30, 2002 were $(0.07) per share with 1,823,256 average common shares outstanding as compared to $0.07 per share and 1,820,618 weighted average common shares outstanding for the nine months ended September 30, 2001. For the nine months ended September 30, 2002, all outstanding common stock equivalents are anti-dilutive due to the net loss.
At September 30, 2002, working capital was $691,465 compared to $874,224 at September 30, 2001. The Company utilized cash from operations for the nine months ended September 30, 2002, of approximately $37,000. The Company provided cash from operations for the nine months ended September 30, 2001, of approximately $278,000. Significant non-cash items including depreciation and inventory reserve on excess and obsolete inventory were approximately $176,000 and $138,000, respectively, for the nine months ended September 30, 2002 and 2001. Overall, accounts receivable, inventory, and prepaids increased in excess of accounts payable and accrued expenses by approximately $123,000 and $12,000, respectively, as a result of timing of receipt of inventory versus required scheduled payments on this inventory and increased prepaid expenses.
For investing activities, the Company used cash of approximately $56,000 and $152,000, for the nine months ended September 30, 2002 and September 30, 2001, respectively. The amounts invested were used to purchase machinery and equipment for increased production capacity.
For financing activity for the nine months ended September 30, 2002, the Company provided cash of approximately $19,000. Cash payments to third parties for capital lease obligations approximated $31,000; proceeds from notes payable from shareholders totaled $50,000.
For financing activity for the nine months ended September 30, 2001, the Company utilized cash of approximately $36,000. Cash payments to third parties for capital lease obligations approximated $26,000; cash payments to shareholders totaled $14,000; and cash proceeds for the exercise of stock options totaled $4,125.
Series A redeemable convertible preferred stock and accrued dividends in the amount of $121,770 is outstanding at September 30, 2002 and was due May 31, 2002. Management is working with the Chairman of the Board, who owns all of the Series A redeemable convertible preferred stock, to negotiate repayment terms. Management expects to have a resolution prior to the end of the fourth quarter.
Officers of the Company have advanced funds in the form of notes payable and accounts payable and guaranteeing bank debt in the past. There is no commitment by these individuals to continue funding the Company or guaranteeing bank debt in the future. However, the Company believes that its current operations and its pursuit of new financing arrangements will allow management to continue to pursue its current plans. However, the Company cannot be certain that it will be successful in efforts to raise additional new funds.
INVESTORS ARE REFERRED TO AND SHOULD SPECIFICALLY CONSIDER THE RISKS AND SPECULATIVE FACTORS INHERENT IN AND AFFECTING THE BUSINESS OF THE COMPANY AND THE COMPANY'S COMMON STOCK AS SET FORTH IN THE COMPANY'S 10-KSB FOR THE YEAR ENDED DECEMBER 31, 2001 AT PAGES 21-24.
ITEM 3. CONTROLS AND PROCEDURES
(a) Within the 90 days prior to the date of this report, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Chief Executive Officer along with the Chief Financial Officer, of the effectiveness of the design and operation of the disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon that evaluation, the Company's Chief Executive Officer along with the Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective in timely alerting them to material information relating to the Company required to be included in the Company's periodic SEC filings.
(b) There have been no significant changes in the Company's internal controls or in other factors that could significantly affect internal controls subsequent to the date the Chief Executive Officer and the Chief Financial Officer carried out this evaluation.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(A) EXHIBITS.
99(a) Certification of CEO under Section 906 of
Sarbanes-Oxley Act of 2002.
99(b) Certification of CFO under Section 906 of
Sarbanes-Oxley Act of 2002.
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(B) REPORTS ON FORM 8-K.
None.
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.
Date: November 8, 2002 /s/ Daniel Rooney
-----------------------------------------
Daniel Rooney,
President and Chief Executive Officer
(Principal Executive Officer)
/s/ Gerald S. Blaskie
-----------------------------------------
Gerald S. Blaskie,
Chief Financial Officer
(Principal Financial Officer)
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I, Daniel Rooney, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Superconductive Components, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date: November 8, 2002
/s/ Daniel Rooney ----------------------------------- Daniel Rooney President and Chief Executive Officer |
I, Gerald S. Blaskie, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Superconductive Components, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date: November 8, 2002
/s/ Gerald S. Blaskie -------------------------------- Gerald S. Blaskie Chief Financial Officer |
EXHIBIT 99(a)
In connection with the Quarterly Report of Superconductive Components, Inc. (the "Company") on Form 10-QSB for the period ending September 30, 2002, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Daniel Rooney, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ Daniel Rooney ------------------------ Daniel Rooney Chief Executive Officer November 8, 2002 |
In connection with the Quarterly Report of Superconductive Components, Inc. (the "Company"), on Form 10-QSB for the period ending September 30, 2002, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Gerald S. Blaskie, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ Gerald S. Blaskie --------------------------- Gerald S. Blaskie Chief Financial Officer November 8, 2002 |