/2H7  d 1 FIS_CASH_FLOW$&%*''SUPERCONDUCTIVE COMPONENTS, INC.'BALANCE SHEETS 'ASSETS^MARCH 31,^DECEMBER 31, ^2002 ^2001"(UNAUDITED)'CURRENT ASSETS 'Cash"$ 86,029"$ 118,083$ 'Accounts and notes receivable= 'Trade, less allowance for doubtful accounts of $16,000 "374,005 "365,141 'Related party receivables  "6,572  "4,616 'Employees  "15,161  "15,625 'Other  "2,083  "20,814'Inventories"877,059"857,992'Prepaid expenses "46,545 "12,851'Total current assets"1,407,454"1,395,122'PROPERTY AND EQUIPMENT,'AT COST'Machinery and equipment"2,326,182"2,306,128'Furniture and fixtures "21,874 "20,424'Leasehold improvements"346,823"346,823"2,694,879"2,673,375$'Less accumulated depreciation"(1,980,281)"(1,919,358)"714,598"754,017'OTHER ASSETS'Intangibles "43,786 "43,992!'TOTAL ASSETS!"$ 2,165,839!"$ 2,193,131Q$'The accompanying notes are an integral part of these financial statements.'&'SUPERCONDUCTIVE COMPONENTS, INC.''BALANCE SHEETS+('LIABILITIES AND SHAREHOLDERS' EQUITY*^MARCH 31,*^DECEMBER 31, +^2002 +^2001,"(UNAUDITED)-'CURRENT LIABILITIES0.'Capital lease obligation, current portion."$ 42,442."$ 41,596=/'Capital lease obligation, shareholder, current portion /"30,784 /"25,16110'Note payable shareholders, current portion 0"46,000 0"34,0001'Accounts payable1"313,4591"318,954%2'Accounts payable, shareholders 2"15,060 2"7,426 3'Accrued contract expenses3"141,7873"179,748&4'Accrued personal property taxes 4"67,884 4"54,3845'Accrued expenses 5"68,375 5"42,450 7'Total current liabilities7"725,7917"703,719':'CAPITAL LEASE OBLIGATION, NET OF;'CURRENT PORTION ;"92,958;"103,8654>'CAPITAL LEASE OBLIGATION, SHAREHOLDER, NET OF?'CURRENT PORTION ?"37,644 ?"43,2670B'NOTE PAYABLE SHAREHOLDERS, NET OF CURRENTC'PORTIONC"122,270 C"84,270'F'REDEEMABLE CONVERTIBLE PREFERREDG'STOCK (Series A)TH'10% cumulative, nonvoting, no par value, $1,000 stated value, liquidation andQI'mandatory redemption at stated value per share plus unpaid and accumulated%J'dividends of $278.20 per shareJ"117,533J"111,176$M'COMMITMENTS AND CONTINGENCIESM"-M"-P'SHAREHOLDERS' EQUITYOQ'Convertible preferred stock, Series B, 10% cumulative, nonvoting, no par(R'value, $10 stated value, optionalS'redemption at 103%S"340,021S"333,1368T'Common stock, no par value, authorized 15,000,0006U'shares; 1,823,256 shares issued and outstandingU"6,368,466U"6,366,966!V'Additional paid-in capital V"33,885 V"47,127W'Accumulated deficitW"(5,672,729)W"(5,600,395)Y"1,069,643Y"1,146,8341\'TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY\"$ 2,165,839\"$ 2,193,131Q_'The accompanying notes are an integral part of these financial statements.'a'SUPERCONDUCTIVE COMPONENTS, INC.b'STATEMENTS OF OPERATIONS1c'THREE MONTHS ENDED MARCH 31, 2002 AND 2001d'(UNAUDITED) f^2002 f^2001h'SALES REVENUEh"$ 714,148h"$ 889,744 i'CONTRACT RESEARCH REVENUE i"69,231i"170,436k"783,379k"1,060,180n'COST OF SALES REVENUEn"527,778n"601,276 o'COST OF CONTRACT RESEARCH o"69,231o"122,916q"597,009q"724,192t'GROSS MARGINt"186,370t"335,988*v'GENERAL AND ADMINISTRATIVE EXPENSESv"212,607v"145,252%x'SALES AND PROMOTIONAL EXPENSES x"41,513 x"65,968${'INCOME (LOSS) FROM OPERATIONS{"(67,750){"124,768~'OTHER INCOME (EXPENSE)'Interest, net"(4,156)"(7,004)'Miscellaneous, net "(428) "886"(4,584)"(6,118)&'INCOME (LOSS) BEFORE INCOME TAX"(72,334)"118,650'INCOME TAX EXPENSE"-"-'NET INCOME (LOSS)"(72,334)"118,650#'DIVIDENDS ON PREFERRED STOCK"(9,360)"(9,360)*'ACCRETION OF REDEEMABLE CONVERTIBLE'PREFERRED (SERIES A)"(3,881)"(2,928))'INCOME (LOSS) APPLICABLE TO COMMON 'SHARES"$ (85,575)"$ 106,362.'EARNINGS PER SHARE - BASIC AND DILUTIVE'(Note 2))'NET INCOME (LOSS) PER COMMON SHARE 'Basic"$ (0.05)"$ 0.06'Dilutive"$ (0.05)"$ 0.06*'WEIGHTED AVERAGE SHARES OUTSTANDING 'Basic"1,823,256"1,818,069'Dilutive"1,823,256"1,826,140Q'The accompanying notes are an integral part of these financial statements.''SUPERCONDUCTIVE COMPONENTS, INC.'STATEMENTS OF CASH FLOWS1'THREE MONTHS ENDED MARCH 31, 2002 AND 2001'(UNAUDITED) ^2002 ^2001+'CASH FLOWS FROM OPERATING ACTIVITIES'Net income (loss)"$ (72,334)"$ 118,650='Adjustments to reconcile net income (loss) to net cash$'used in operating activities:'Depreciation "60,922 "48,302'Amortization "743 "610'Inventory reserve"-"(13,091)&'Provision for doubtful accounts"(3,000)"-3'Changes in operating assets and liabilities:%'(Increase) decrease in assets:'Accounts receivable "12,876"(70,757)'Inventories"(19,067)"(193,967)'Prepaid expenses"(33,694) "4,996'Other assets "(537)"(8,567)*'Increase (decrease) in liabilities:'Accounts payable "2,138"120,946'Accrued expenses "1,464"(39,214)'Total adjustments "21,845"(150,742),'Net cash used in operating activities"(50,489)"(32,092)+'CASH FLOWS FROM INVESTING ACTIVITIES*'Purchases of property and equipment"(21,504)"(74,025),'Net cash used in investing activities"(21,504)"(74,025)+'CASH FLOWS FROM FINANCING ACTIVITIES'Bank overdraft"-"-2'Principal repayments on notes payable, bank"-"-/'Proceeds from note payable, shareholders "50,000"(8,000)6'Principal payments on capital lease obligations"(10,061)"(5,179)E'Principal payments on capital lease obligations, related party"-"-5'Proceeds from exercise of common stock options"- "1,875-'Proceeds from the sale of common stock"-"-2'Proceeds from sale of common stock warrants"-"-''Payment of cummulative dividends"-"--'Redemption of Series A preferred stock"-"-:'Net cash provided by (used in) financing activities "39,939"(11,304)Q'The accompanying notes are an integral part of these financial statements.''SUPERCONDUCTIVE COMPONENTS, INC.+'STATEMENTS OF CASH FLOWS (CONTINUED)1'THREE MONTHS ENDED MARCH 31, 2002 AND 2001'(UNAUDITED) ^2002 ^2001&'NET INCREASE (DECREASE) IN CASH"(32,054)"(117,421)!'CASH - Beginning of period"118,083"202,406'CASH - End of period"$ 86,029"$ 84,985''SUPPLEMENTAL DISCLOSURES OF CASH'FLOW INFORMATION&'Cash paid during the years for:'Interest"$ 5,671 "6,176'Income taxes"$ -"-*'SUPPLEMENTAL DISCLOSURES OF NONCASH)'INVESTING AND FINANCING ACTIVITIESF'Common stock was issued as partial payment for accounts payable"$ - "19,000P'The accompanying notes are an integral part of these financial statements