Ohio 31-0121318
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
|
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: 1,821,727 shares of Common Stock, without par value, were outstanding at July 31, 2001.
Page No.
--------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets as of June 30, 2001 (unaudited)
and December 31, 2000 3 - 4
Statements of Operations For the Three Months and Six
Months Ended June 30, 2001 and 2000 (unaudited) 5
Statements of Cash Flows For the Six Months
Ended June 30, 2001 and 2000 (unaudited) 6 - 7
Notes to Financial Statements (unaudited) 8 - 12
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. 13 - 17
Item 3. Quantitative and Qualitative Disclosures About Market Risk N/A
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. N/A
Item 2. Changes in Securities and Use of Proceeds. 18
Item 3. Defaults Upon Senior Securities. N/A
Item 4. Submission of Matters to a Vote of Security Holders. 18
Item 5. Other Information. N/A
Item 6. Exhibits and Reports on Form 8-K. 19
Signatures. 20
|
June 30, December 31,
ASSETS 2001 2000
------ ---- ----
(Unaudited)
CURRENT ASSETS
Cash $ 26,760 $ 202,406
Accounts and notes receivable
Trade, less allowance for doubtful accounts of $17,000 and
$26,000, respectively 392,390 386,567
Related party receivables 3,439 4,283
Contract research receivables, current 113,306 -
Employees 11,747 -
Inventories 904,880 617,468
Prepaid expenses 23,320 39,766
----------------- ------------------
Total current assets 1,475,842 1,250,490
----------------- ------------------
PROPERTY AND EQUIPMENT,
AT COST
Machinery and equipment 2,148,853 1,959,086
Furniture and fixtures 17,170 15,250
Leasehold improvements 319,675 305,586
----------------- ------------------
2,485,698 2,279,922
Less accumulated depreciation 1,801,886 1,701,150
----------------- ------------------
683,812 578,772
----------------- ------------------
OTHER ASSETS
Intangibles 39,534 38,688
Contract research receivables, long-term 43,315 -
----------------- ------------------
82,849 38,688
----------------- ------------------
TOTAL ASSETS $ 2,242,503 $ 1,867,950
================= ==================
|
The accompanying notes are an integral part of these financial statements.
June 30, December 31,
LIABILITIES AND SHAREHOLDERS' EQUITY 2001 2000
------------------------------------ ---- ----
(Unaudited)
CURRENT LIABILITIES
Capital lease obligation, current portion $ 41,687 $ 26,279
Note payable shareholders, current portion 24,000 10,869
Accounts payable 478,067 294,028
Accounts payable, shareholders 5,983 1,803
Accrued expenses 126,382 156,916
----------------- -----------------
Total current liabilities 676,119 489,895
----------------- -----------------
CAPITAL LEASE OBLIGATION, NET OF
CURRENT PORTION 124,928 57,965
----------------- -----------------
NOTE PAYABLE SHAREHOLDERS, NET OF CURRENT
PORTION 96,270 121,401
----------------- -----------------
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 $100.00 and $260.96, respectively 98,464 87,658
----------------- -----------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Convertible preferred stock, Series B, 10% cumulative, nonvoting, no par
value, $10 stated value, optional
redemption at 103% 351,200 338,424
Common stock, no par value, authorized 15,000,000
shares; 1,821,727 and 1,816,977 shares issued and outstanding,
respectively 6,356,970 6,334,696
Additional paid-in capital 73,610 98,187
Accumulated deficit (5,535,058) (5,660,276)
----------------- -----------------
1,246,722 1,111,031
----------------- -----------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 2,242,503 $ 1,867,950
================= =================
|
The accompanying notes are an integral part of these financial statements.
Three Months
Ended Six Months Ended
June 30, June 30, June 30, June 30,
2001 2000 2001 2000
---- ---- ---- ----
(Restated) (Restated)
SALES REVENUE $ 801,366 $ 525,470 $ 1,691,110 $ 1,197,678
CONTRACT RESEARCH REVENUE 103,705 177,899 274,141 302,037
----------------- ---------------- ----------------- ----------------
905,071 703,369 1,965,251 1,499,715
----------------- ---------------- ----------------- ----------------
COST OF SALES REVENUE 471,134 428,524 1,072,409 959,605
COST OF CONTRACT RESEARCH REVENUE 100,769 118,983 223,686 238,428
----------------- ---------------- ----------------- ----------------
571,903 547,507 1,296,095 1,198,033
----------------- ---------------- ----------------- ----------------
GROSS MARGIN 333,168 155,862 669,156 301,682
GENERAL AND ADMINISTRATIVE EXPENSES 262,360 113,316 407,612 223,211
SALES AND PROMOTIONAL EXPENSES 60,127 57,855 126,095 132,235
----------------- ---------------- ----------------- ----------------
INCOME (LOSS) FROM OPERATIONS 10,681 (15,309) 135,449 (53,764)
----------------- ---------------- ----------------- ----------------
OTHER INCOME (EXPENSE)
Interest, net (3,275) (21,260) (10,280) (33,633)
Miscellaneous, net (838) 4,109 49 5,704
----------------- ---------------- ----------------- ----------------
(4,113) (17,151) (10,231) (27,929)
----------------- ---------------- ----------------- ----------------
INCOME (LOSS) BEFORE INCOME TAX 6,568 (32,460) 125,218 (81,693)
INCOME TAX EXPENSE - - - -
----------------- ---------------- ----------------- ----------------
NET INCOME (LOSS ) 6,568 (32,460) 125,218 (81,693)
DIVIDENDS ON PREFERRED STOCK (9,360) (30,747) (18,721) (51,671)
ACCRETION OF REDEEMABLE CONVERTIBLE
PREFERRED (SERIES A) (2,928) (2,928) (5,856) (5,856)
----------------- ---------------- ----------------- ----------------
INCOME (LOSS) APPLICABLE TO COMMON
SHARES $ (5,720) $ (66,135) $ 100,641 $ (139,220)
================= ================ ================= ================
EARNINGS PER SHARE - BASIC AND DILUTIVE (Note 2)
NET INCOME (LOSS) PER COMMON SHARE
Basic $ 0.00 $ (0.05) $ 0.06 $ (0.10)
Diluted ================= ================ ================= ================
$ 0.00 $ (0.05) $ 0.06 $ (0.10)
================= ================ ================= ================
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 1,821,858 1,397,398 1,819,963 1,344,030
================= ================ ================= ================
Diluted 1,821,858 1,397,398 1,819,963 1,344,030
================= ================ ================= ================
|
The accompanying notes are an integral part of these financial statements.
June 30, June 30,
2001 2000
---- ----
(Restated)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 125,218 $ (81,693)
---------------- -----------------
Adjustments to reconcile net income (loss) to net cash provided by operating
activities:
Depreciation 100,737 148,802
Amortization 1,226 700
Inventory reserve (21,000) 40,074
Provision for doubtful accounts (9,000) 19,947
Changes in operating assets and liabilities:
(Increase) decrease in assets:
Accounts receivable (164,347) (83,274)
Inventories (266,412) (92,813)
Prepaid expenses 16,446 (46,196)
Other assets (2,072) (2,870)
Increase (decrease) in liabilities:
Accounts payable 207,219 146,436
Accrued expenses (30,534) (2,133)
---------------- -----------------
Total adjustments (167,737) 128,673
---------------- -----------------
Net cash provided by (used in) operating activities (42,519) 46,980
---------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (107,866) (38,114)
---------------- -----------------
Net cash used in investing activities (107,866) (38,114)
---------------- -----------------
CASH FLOWS FROM FINANCING ACTIVITIES
Bank overdraft - 31,030
Principal repayments on notes payable, bank - (95,025)
Proceeds from subordinated notes payable - 89,408
Principal repayments on long-term debt, shareholder (12,000) -
Principal payments on capital lease obligation (15,540) (43,954)
Proceeds from exercise of common stock options 2,279 79,800
Payment of cumulative dividends - (15,675)
Redemption of Series A preferred stock - (54,450)
---------------- -----------------
Net cash used in financing activities (25,261) (8,866)
---------------- -----------------
|
The accompanying notes are an integral part of these financial statements.
June 30, June 30,
2001 2000
---- ----
(Restated)
NET DECREASE IN CASH (175,646) -
CASH - Beginning of period 202,406 -
------------------ -----------------
CASH - End of period $ 26,760 $ -
================== =================
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION
Cash paid during the period for:
Interest $ 11,059 $ 33,633
Income taxes $ - $ -
SUPPLEMENTAL DISCLOSURES OF NONCASH
INVESTING AND FINANCING ACTIVITIES
Common stock was issued as partial payment for accounts payable $ 19,000 $ -
Preferred stock, series A converted to common stock $ - $ 8,275
Subordinate debt was issued to a shareholder as reimbursement for the
shareholder paying a note payable to the Company $ - $ 89,408
Property and equipment was purchased by capital lease 97,911 -
|
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 research, education, electronics and functional coatings industries.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles 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 generally accepted accounting principles 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, 2000. Interim results are not necessarily indicative of results for the full year.
The preparation of financial statements in conformity with generally accepted accounting principles 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 expense during the reporting period. Actual results could differ from those estimates.
NOTE 3. CHANGE IN ACCOUNTING
Pursuant to a review of the Company's previously filed Form
10-SB, the Company has changed its accounting for Series A and
B preferred stock and debt forgiveness of subordinated notes
payable. Therefore, the June 30, 2000 balance sheet, statement
of operations and statement of cash flows for the six months
ended June 30, 2000 have been restated. For additional
information regarding the restatement, see Note 15 in Form
10-SB, Amendment No. 4. The following summarizes information
as originally reported and as restated for the six months
ended June 30, 2000:
Six Months Ended
June 30, 2000
-------------
As Originally As
Reported Restated
-------- --------
Revenues $ 1,499,715 $ 1,499,715
Net loss $ (94,147) $ (81,693)
Net loss applicable to common
shares $ (94,147) $ (139,220)
Earnings per shares - basic and
diluted $ (0.07) $ (0.10)
Weighted average common shares
outstanding - basic and diluted 1,344,030 1,344,030
|
Inventory is comprised of the following:
June 30, December 31,
2001 2000
---- ----
(unaudited)
Raw materials $ 577,930 $ 413,657
Work-in-progress 141,365 111,978
Finished goods 225,582 152,833
Inventory reserve (39,997) (61,000)
---------------- ---------------
$ 904,880 $ 617,468
================ ===============
|
NOTE 5. COMMON STOCK AND STOCK OPTIONS
During the six months ended June 30, 2001, the Company paid cash of $12,500 and issued 19,000 shares of common stock of the Company at a subscription price of $1.00 per share to Taratec Corporation for services rendered to the Company. The President of Taratec, Mr. Ungar, is a director of the Company. The fair market value of the common stock issued at the date of issuance was $1.34 per share, or a discount of 25%. The Company issued the shares at a discounted price as the shares are unregistered and, therefore, limited as to marketability for sale until the securities are registered under the Securities Act of 1933 or an applicable exemption from registration thereunder.
During the six months ended June 30, 2001, common stock options totaling 750 shares were converted to common stock at a price of $2.50 for total cash proceeds of $1,875. Additionally, 199 shares of common stock were converted from Series B preferred stock.
The following options were granted under the 1995 Stock Option plan during the period:
GRANT DATE # OPTIONS GRANTED OPTION PRICE ---------- ----------------- ------------ January 15, 2001 5,000 $ 1.34 March 7, 2001 25,000 $ 1.88 April 23, 2001 15,000 $ 2.00 |
On April 2, 2000 options totaling 10,000 shares at $1.30 per share were granted under the 1995 Non-Statutory Stock Option Plan to the Company President in connection with his guarantee of certain lease financing to the Company.
NOTE 6. EARNINGS PER SHARE
Basic income 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 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:
Note 6. Earnings Per Share (continued)
Three Months Ended June 30, Six Months Ended June 30,
2001 2000 2001 2000
---- ---- ---- ----
(Restated) (Restated)
Income (loss) applicable to
common shares $ (5,720) $ (66,135) $ 100,641 $ (139,220)
=============== ================ ================ ================
Weighted average common
shares outstanding - basic 1,821,858 1,397,398 1,819,963 1,344,030
Effect of dilutive stock
options - - - -
--------------- ---------------- ---------------- ----------------
Weighted average shares
outstanding - diluted 1,821,858 1,397,398 1,819,963 1,344,030
=============== ================ ================ ================
|
NOTE 7. SEGMENT INFORMATION
The Company is managed in two operating segments: Target Materials, Inc. ("TMI") and the SCI Division ("SCI"). While the Company has international sales, in the past management did not separately identify and evaluate financial information pertaining to sales outside the U.S.; therefore, revenue by geographic location is not available for 2000. For 2001, management has implemented processes to track this data.
Corporate operations include administrative and sales functions. Corporate assets include cash and general fixed assets.
NOTE 7. SEGMENT INFORMATION (CONTINUED)
The following is a summary of key segment information for the six months ended June 30, 2001. As noted previously, international sales data is not available for the six months ended June 30, 2000.
Six Months Ended June 30, 2001
------------------------------
SCI TMI Corporate Total
--- --- --------- -----
Revenues:
U.S. $ 515,057 $ 1,169,423 $ - $ 1,684,480
International 80,715 200,056 - 280,771
-------------- -------------- --------------- --------------
Total 595,772 1,369,479 - 1,965,251
Segment profit
(loss) 89,197 372,919 (336,898) 125,218
Interest expense - -
11,861 11,861
Depreciation and
amortization 31,434 19,595 50,934 101,963
Segment assets 463,517 1,346,897 432,089 2,242,503
Expenditures for
segment assets 47,352 109,375 49,050 205,777
Six Months Ended June 30, 2000
------------------------------
Revenues $ 612,008 $ 887,707 $ - $ 1,499,715
Segment profit
(loss) 95,719 54,162 (231,574) (81,693)
Interest expense - -
33,633 33,633
Depreciation and
amortization 25,608 13,633 110,261 149,502
Segment assets 322,830 961,452 421,701 1,705,983
Expenditures for
segment assets 25,110 8,935 4,069 38,114
|
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 SEC, including in the Company's 10-KSB for the year ended December 31, 2000, at pages 22 through 25. 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.
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 $5,535,058 from inception to June 30, 2001.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Revenues for the six months ended June 30, 2001 were $1,965,251 compared to $1,499,715 last year, an increase of $465,536 or 31.0%.
TMI division revenues increased 54.3% to $1,369,479 in 2001 from $887,707 in 2000. The increase is partially due to $280,000 in sales of tantalum and increases related to additional sales and marketing.
SCI division product revenues increased 21.9% to $321,631 from $263,800 the prior year. The increase is due to continued growth of its ceramic sputtering target business.
SCI division contract research revenues were $274,141 in 2001 compared to $302,037 in 2000. The research contract for NASA expired in 2001. This contact generated $70,454 in revenues in the first quarter of this year. The Company was awarded a Phase I SBIR grant from the National Science Foundation in January 2001 and $100,000 of the grant is included in revenues for the first half of 2001. Overall, the amount of sponsored research contracts that expired during the six months ended June 30, 2001 was not matched by grants received during the same period.
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.
Gross margin in 2001 was $669,156 or 34.0% of total revenues compared to $301,682 or 20.1% of total revenue in 2000.
Gross margin, expressed as a percentage of sales revenues for TMI division was 39.3% in 2001 versus 22.8% in 2000. The improvement in gross margin is due primarily to increased sales as the gross margin benefited from better utilization of production capacity.
Gross margin on sales revenue for SCI division product sales was 24.9% in 2001 compared to 20.7% in 2000.
Gross margin on SCI division contract research revenue was 18.4% for 2001 compared to 21.0% in 2000.
Selling expense in 2001 declined to $126,095 from $132,235 in 2000, a decrease of 4.6%. The lower selling costs compared to the increase in sales is due to a reduction of sales staff.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
General and administrative expense in 2001 increased 82.6% to $407,612 from $223,211. The increase is principally due to additional expenses for preparing filings for regulatory agencies and increased payroll costs.
Internal research and development costs are expensed as incurred. Research and development costs, including testing, for 2001 were $76,617 compared to $70,742 in 2000. Internal research and development costs increased due to addition in staff.
Interest expense was $11,861 for the six months ended June 30, 2001 compared to $33,633 the prior year, a reduction of 64.7% due to lower bank borrowings.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Net income (loss) per common share based on the income (loss) applicable to common shares for the six months ended June 30, 2001 and 2000 was $0.06 and $ (0.10), 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 $0.07 and $(0.06), respectively. The difference between the net income (loss) from operations and the loss applicable to common shares of ($0.01) and ($0.04), respectively, is a result of the position that the preferred shareholders have in comparison to the common shareholders.
Dividends on the Series A and Series B preferred stock accrue at 10% annually on the outstanding shares. Dividends on the Series A preferred stock totaled $4,950 for six months of 2001 and $4,596 for the comparable period last year. Dividends on the Series B preferred stock totaled $13,771 in 2001 and $47,075 last year.
The accretion of Series A preferred stock represents issuance costs of $70,277 that were netted against the proceeds of Series A preferred stock. The issuance costs are being amortized on a straight-line basis over the payout period of seven years of income (loss) applicable to common shares and additional paid-in capital. The accretion for each period totaled $5,856.
For the six months ended June 30, 2001, basic and diluted earnings per common share were $0.06. Weighted average common shares outstanding totaled 1,819,963 for the basic and diluted methods.
For the six months ended June 30, 2000, basic and diluted loss per common share was $(0.10) per share. Weighted average common shares outstanding totaled 1,344,030 for the basic and diluted methods.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
At June 30, 2001, working capital was $799,723 compared to $173,399 at June 30, 2000. The Company utilized cash from operations for the six months ended June 30, 2001 of approximately $(42,000) and provided approximately $47,000 for the same period last year. Significant non-cash items including depreciation and inventory reserve on excess and obsolete inventory were approximately $80,000 and $189,000, respectively, for the six months ended June 30, 2001 and 2000. Overall, accounts receivable, inventory, and prepaids increased (decreased) in excess of accounts payable and accrued expenses by approximately $238,000 and $80,000 at June 30, 2001 and 2000, respectively, as a result of timing of receipt of inventory versus required scheduled payments on this inventory and increased accounts receivable due to the significant increase in sales.
For investing activities, the Company used cash of approximately $108,000 and $38,000 for the first six months of 2001 and 2000, respectively. The amounts invested were used to purchase machinery and equipment for increased production capacity.
The Company used cash of approximately $25,000 for financing activities during the six months ended June 30, 2001. Cash payments to third parties for capital lease obligations approximated $16,000; cash payments on shareholder notes totaled $12,000; and cash proceeds from the exercise of stock options totaled $2,279.
The Company used cash of approximately $9,000 for financing activities during the six months ended June 30, 2000. Due to tight cash flow in the prior year, the Company used $31,000 to decrease the amount of overdrawn cash. Cash payments to third parties for debt and capital lease obligations approximated $139,000. Proceeds from the sale of common stock options totaled $79,800. Payments for principal and cumulative dividends on Series A Preferred Shares totaled $70,125.
Officers of the Company have advanced funds in the form of notes payable and accounts payable and have guaranteed bank debt. There is no commitment by these individuals to continue funding the Company or to guarantee bank debt in the future. However, the Company believes that its current operations and pursuit of new financing arrangements will allow management to continue 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 FORM 10-KSB FOR THE YEAR ENDED DECEMBER 31, 2000, AT PAGES 22 THROUGH 25.
ITEM 2. CHANGES IN SECURITIES.
The following incentive stock options were granted to employees of the Company under the Company's 1995 Stock Option Plan during the period ended June 30, 2001:
--------------------------- ------------------------ -----------------
Grant Date # of Options Granted Option Price
--------------------------- ------------------------ -----------------
January 15, 2001 5,000 $1.34
--------------------------- ------------------------ -----------------
March 7, 2001 25,000 $1.88
--------------------------- ------------------------ -----------------
April 23, 2001 15,000 $2.00
--------------------------- ------------------------ -----------------
|
The options vest 20% per year beginning on the first anniversary of the date of grant, and expire on the tenth anniversary of the date of grant.
In addition, on April 2, 2001, non-statutory stock options to purchase 10,000 shares at $1.30 per share were granted under the 1995 Stock Option Plan to the Company President in connection with his guarantee of certain lease financing to the Company. These options vested fully on the date of grant, and expire on the tenth anniversary of the date of grant.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
(a) Superconductive Components, Inc. held its annual meeting of shareholders on June 21, 2001, for the purpose of electing eight directors to the board of directors of the Company.
(b) At the annual meeting of shareholders, all directors nominated were elected.
(c) The table shows the voting tabulation for each matter voted upon at the annual meeting of shareholders:
Proposal 1: The election of eight directors, each to serve for terms expiring at the next annual meeting of shareholders.
NUMBER OF SHARES
----------------
WITHHOLD
NOMINEES FOR AUTHORITY
-------- --- ---------
Robert J. Baker 1,420,896 1,020
Edward R. Funk 1,420,836 1,080
James R. Gaines, Jr. 1,420,296 1,620
Lloyd E. Hackman 1,420,796 1,120
Curtis A. Loveland 1,419,136 2,780
Robert H. Pietz 1,420,196 1,720
Charles E. Washbush 1,420,796 1,120
Edward W. Ungar 1,420,736 1,180
|
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
EXHIBIT EXHIBIT
NUMBER DESCRIPTION
-------- -----------
3(a) * Amended and Restated Articles of Incorporation of Superconductive Components, Inc.
3(b) * Restated Code of Regulations of Superconductive Components, Inc.
10(a) * Lease Agreement between Superconductive Components, Inc. and University Area
Rentals dated as of February 7, 1997.
10(b) * Subcontract Agreement between Superconductive Components, Inc. and The Ohio State
University effective as of April 1, 2000.
10(c) * 1987 Incentive Stock Option Plan.
10(d) * 1991 Non-Statutory Stock Option Plan.
10(e) * 1995 Stock Option Plan.
10(f) ** License Agreement with Sandia Corporation dated February 26, 1996.
10(g) ** Nonexclusive License with The University of Chicago (as Operator of Argonne National
Laboratory) dated October 12, 1995.
10(h) ** Nonexclusive License with The University of Chicago (as Operator of Argonne National
Laboratory) dated October 12, 1995.
10(i) ** Sales Distribution Agreement with Earth Chemical Co., Ltd.
10(j) ** National Aeronautics Space Administration Contract dated April 8, 1999.
10(k) ** National Science Foundation award dated August 26, 1999.
10(l) ** National Science Foundation award dated November 27, 2000.
10(m) ** 10% Subordinated Promissory Note dated March 1, 1993.
|
* Filed with the Company's initial Form 10-SB on September 28, 2000.
** Filed with the Company's Form 10-SB Amendment No. 1 on January 3, 2001.
(b) REPORTS ON FORM 8-K.
None.
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this amended report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: August 8, 2001 /s/ Edward R. Funk
-----------------------------------------------
Edward R. Funk, President
and Chief Executive Officer
(Principal Executive Officer and
Principal Financial Officer)
|