<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(MARK ONE)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE THREE MONTH PERIOD ENDED SEPTEMBER 30, 1997 OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _____ TO ______
COMMISSION FILE NUMBER #0-11915
CONDUCTUS, INC.
(Exact name of registrant as specified in its charter)
Delaware 77-0162388
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
969 W. Maude Avenue, Sunnyvale, California 94086
(Address of principal executive offices) (Zip Code)
(408) 523-9950
(Registrant's Telephone Number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 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 ___
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.
Common shares outstanding at November 4, 1997: 6,955,400
Total pages: 17
Index to Exhibits to be found on page 16
<PAGE>
CONDUCTUS, INC.
Index
PART I: FINANCIAL INFORMATION PAGE
ITEM 1. FINANCIAL STATEMENTS
Condensed Balance Sheets at September 30, 1997
and December 31, 1996 3
Condensed Statements of Operations
for the Three and Nine Months Ended
September 30, 1997 and 1996 4
Condensed Statements of Cash Flows
for the Nine Months Ended
September 30, 1997 and 1996 5
Notes to Financial Statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS. 9
PART II: OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS 14
ITEM 2: CHANGES IN SECURITIES 14
ITEM 3: DEFAULTS UPON SENIOR SECURITIES 14
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS 14
ITEM 5: OTHER INFORMATION 14
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K 14
Signatures 15
Exhibit Index 16
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PART I: FINANCIAL INFORMATION
Item 1: Financial Statements
CONDUCTUS, INC.
CONDENSED BALANCE SHEETS
September 30, December 31,
1997 1996
------------- ------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $1,076,977 $1,119,991
Short-term investments 3,342,971 6,516,401
Accounts receivable, net 2,042,900 3,756,586
Inventories, net 541,279 1,220,873
Prepaid and other assets 313,830 397,556
------------- ------------
Total current assets 7,317,957 13,011,407
Property, plant and equipment, net 2,824,563 2,941,685
Other assets 87,760 127,763
------------- ------------
Total assets $10,230,280 $16,080,855
------------- ------------
------------- ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current portion of long-term debt $1,018,666 $1,119,330
Accounts payable 1,400,442 1,710,762
Other accrued liabilities 931,850 1,045,916
------------- ------------
Total current liabilities 3,350,958 3,876,008
Long-term debt, net of current portion 652,683 1,021,781
------------- ------------
Total liabilities 4,003,641 4,897,789
Stockholders' equity:
Common Stock 707 683
Additional paid-in capital 40,695,878 40,405,381
Unrealized gain on investments, net 0 3,808
Accumulated deficit (34,469,946) (29,226,806)
------------- ------------
Total stockholders' equity 6,226,639 11,183,066
------------- ------------
Total liabilities and stockholders' equity $10,230,280 $16,080,855
------------- ------------
------------- ------------
See accompanying notes.
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CONDUCTUS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Contract $1,723,182 $2,468,688 $5,834,080 $7,089,201
Product 148,560 804,355 1,662,605 1,805,947
------------ ------------ ------------ ------------
Total revenues 1,871,742 3,273,043 7,496,685 8,895,148
------------ ------------ ------------ ------------
Operating expenses:
Cost of product 82,084 552,147 1,363,130 1,215,831
Research and Development 2,339,401 3,010,620 8,215,618 8,724,483
Selling, general and adminstrative 1,026,167 1,016,553 3,172,178 2,974,267
Writedown of property, plant & equipment 0 100,000 0
Gain on product line disposals (93,135) (93,135) 0
------------ ------------ ------------ ------------
Total operating expenses 3,354,517 4,579,320 12,757,791 12,914,581
------------ ------------ ------------ ------------
Loss from operations (1,482,775) (1,306,277) (5,261,106) (4,019,433)
Interest income 50,828 108,638 226,981 157,981
Other income (expense) (37,835) 200 (63,228) 25,042
Interest expense (20,728) (46,659) (145,787) (133,337)
------------ ------------ ------------ ------------
Net loss $(1,490,510) $(1,244,098) $(5,243,140) $(3,969,747)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Net loss per common share $(0.22) $(0.18) $(0.77) $(0.65)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Shares used in computing per share amounts (000's) 6,901 6,782 6,853 6,084
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
See accompanying notes.
</TABLE>
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CONDUCTUS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
FOR THE NINE MONTHS ENDED
----------------------------
SEPTEMBER 30 SEPTEMBER 30
1997 1996
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $(5,243,140) $(3,969,747)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization 601,298 759,203
(Increase) decrease in:
Accounts receivable 1,713,686 (504,048)
Inventories 679,594 (636,139)
Prepaid expenses, other current assets,
and other assets 123,729 (167,327)
Increase (decrease) in:
Accounts payable and other accrued liabilities (424,386) 730,109
------------ ------------
Net cash used in operating activities (2,549,219) (3,787,949)
------------ ------------
Cash flows from investing activities:
Proceeds from sales of short-term investments 20,625,154 30,582,373
Purchases of short-term investments (17,455,532) (35,937,773)
Acquisition of property and equipment (652,910) (1,048,867)
Net book value of assets sold 168,734 29,195
------------ ------------
Net cash provided by investing activities 2,685,446 (6,375,072)
------------ ------------
Cash flows from financing activities:
Proceeds from borrowings 410,133 1,064,938
Net proceeds from issuance of common stock 290,521 10,165,773
Principal payments on long-term debt (879,895) (656,247)
Principal payments under capital lease obligations 0 (37,894)
------------ ------------
Net cash used in financing activities (179,241) 10,536,570
Net decrease in cash and cash equivalents (43,014) 373,549
Cash and cash equivalents at beginning of period 1,119,991 272,410
------------ ------------
Cash and cash equivalents at end of period $ 1,076,977 $645,959
------------ ------------
------------ ------------
</TABLE>
See accompanying notes.
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<PAGE>
CONDUCTUS, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
FISCAL YEAR:
The Company uses a 52-53 week fiscal year ending on the last Friday of the
year. For convenience of presentation, the accompanying financial statements
have been shown as ending on the last day of the calendar month of each
applicable period.
UNAUDITED INTERIM FINANCIAL INFORMATION:
The accompanying unaudited interim financial statements have been
prepared pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
the financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations, although management believes that the disclosures are adequate to
make the information presented not misleading. The unaudited financial
statements as of September 30, 1997 and for the three and nine months ended
September 30, 1997 and 1996 include, in the opinion of management, all
adjustments, consisting of normal recurring adjustments, necessary to present
fairly the financial information set herein. The results of operations for the
interim periods are not necessarily indicative of the results to be expected for
an entire year. The December 31, 1996 balance sheet was derived from audited
financial statements, but does not include all disclosures required by generally
accepted accounting principles.
INVENTORIES:
Inventories are stated at the lower of cost (determined on a first-in,
first-out basis) or market. Appropriate consideration is given to obsolescence,
excessive levels and other factors in evaluating net realizable value.
COMPUTATION OF NET LOSS PER COMMON SHARE:
Net loss per common share is based upon the weighted average number of
common and common equivalent shares outstanding. Common equivalent shares are
included in the per share calculations where the effect of their inclusion would
be dilutive.
RECENT PRONOUNCEMENTS:
During February of 1997, the Financial Accounting Standards Board
issued Statement No. 128 (SFAS 128) "Earnings Per Share", and in March issued
Statement No. 129 (SFAS 129) "Disclosures of Information about Capital
Structure", both of which specify the computation, presentation and disclosure
requirements for Earnings per Share. SFAS 128 and SFAS 129 will become effective
for the first quarter of fiscal 1998.
In June 1997, the Financial Accounting Standards Board issued
Statement No. 130 (SFAS 130) "Reporting Comprehensive Income". SFAS No. 130
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<PAGE>
establishes standards for the reporting and display of comprehensive income
and its components in a full set of general purpose financial statements.
Comprehensive income is defined as the change in equity of a business
enterprise during a period from transactions and other events and
circumstances from nonowner sources. SFAS 130 will become effective for the
Company's 1998 fiscal year.
In June 1997, the Financial Accounting Standards Board issued
Statement No. 131 (SFAS 131) "Disclosures about Segments of an Enterprise and
Other Information". SFAS No. 131 requires publicly-held companies to report
financial and other information about key revenue-producing segments of the
entity for which such information is available and is utilized by the chief
operation decision makers. Specific information to be reported for individual
segments includes profit and loss, certain revenue and expense items and total
assets. A reconciliation of segment financial information to amounts reported
in the financial statements would be provided. SFAS 131 will become effective
for the Company's 1998 fiscal year.
The Company is currently studying the implications of these statements
and has not yet determined the impact of their adoption.
2. INVESTMENTS:
Investments are summarized below:
SEPTEMBER 30, 1997 DECEMBER 31, 1996
------------------ -----------------
Cost Market Cost Market
Basis Value Basis Value
--------- -------- ---------- ----------
Debt securities:
Corporate bonds $500,056 $500,056 $2,356,259 $2,359,453
Preferred bonds - - 2,000,000 2,000,000
Commercial paper 2,819,316 2,819,316 2,078,596 2,079,210
Accrued interest 8,408 8,408 59,193 59,193
Other 15,191 15,191 18,545 18,545
--------- --------- --------- ----------
Total 3,342,971 3,342,971 6,512,593 6,516,401
Allowance for
unrealized gain - - 3,808 -
--------- -------- ---------- ----------
Total $3,342,971 $3,342,971 $6,516,401 $6,516,401
--------- -------- ---------- ----------
--------- -------- ---------- ----------
3. INVENTORIES:
Inventories, net of reserves of $183,845 at September 30, 1997 and $81,000
at December 31, 1996, comprise:
September 30, 1997 December 31, 1996
------------------ -----------------
Raw materials $ - $393,464
Work in process 541,279 728,603
Finished goods - 98,806
-------- ----------
$541,279 $1,220,873
-------- ----------
-------- ----------
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<PAGE>
4. LONG TERM DEBT:
The Company has a term loan credit facility with a financial
institution primarily to finance costs associated with the acquisition of
equipment. Borrowings are at the bank's prime rate plus 1.0%, (9.5% at
September 30, 1997) with interest paid monthly, and are collateralized by the
related equipment. Principal installments are scheduled over a thirty month
period. At September 30, 1997, there are no further amounts available under
that credit facility. In addition, the Company has a line of credit facility
that provides for borrowings up to the lesser of $1,000,000 or 75% of
eligible receivables. Borrowings under this agreement bear interest at the
bank's prime rate plus 1%, and are collateralized by accounts receivable,
equipment and other assets of the Company. At September 30, 1997, there were
no borrowings under this facility. The Company received a waiver in November
1997 from the institution with respect to default that occurred in the third
quarter of fiscal 1997 on certain financial covenants.
5. ASSET WRITEDOWN:
In connection with the decision to dispose of most of the
assets of its Instrument and Systems Division, the Company has recorded a
$500,000 charge in the second quarter of 1997 to writedown certain
receivables ($100,000), inventories ($300,000), and property, plant, and
equipment ($100,000) of the division to estimated net realizable value.
Certain fixed assets were transferred to the Conductus Sunnyvale, California
location. During the third quarter of 1997, the Instrument and Systems
Division has been closed, and the NMR product line was sold to Bruker.
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<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THIS REPORT ON FORM 10-Q CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE
RISKS AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS MAY DIFFER MATERIALLY
FROM THE RESULTS DISCUSSED IN THE FORWARD-LOOKING STATEMENTS. FACTORS THAT
MIGHT CAUSE SUCH A DIFFERENCE INCLUDE, BUT ARE NOT LIMITED TO, THOSE
DISCUSSED IN "RISK FACTORS" IN PART 1 OF THE COMPANY'S ANNUAL REPORT ON FORM
10K AT AND FOR THE YEAR ENDED DECEMBER 31, 1996 AND IN THE FINAL PROSPECTUS
DATED JUNE 26, 1996 INCLUDED AS PART OF THE COMPANY'S REGISTRATION STATEMENT
ON FORM S-1 (NO. 333-3815). THE FOLLOWING DISCUSSION SHOULD BE READ IN
CONJUNCTION WITH THE FINANCIAL STATEMENTS AND NOTES THERETO APPEARING
ELSEWHERE IN THIS PROSPECTUS.
OVERVIEW
Conductus develops, manufactures and markets electronic
components and systems based on superconductors for applications in the
communications and healthcare markets. As of September 30, 1997, Conductus
had accumulated losses of $34,469,946 and expects to incur additional losses
at least during 1997. Conductus, alone or with collaborative partners, must
successfully develop, manufacture, introduce and market its potential
products in order to achieve profitability. Conductus does not expect to
recognize meaningful product sales until it successfully develops and
commercializes superconductive components, systems and subsystems that
address significant market needs. In the third quarter of 1997, Conductus
completed the disposal of its Instrument and Systems Division,and NMR product
line, and realized a gain as discussed below.
RESULTS OF OPERATIONS FOR THE PERIODS ENDED SEPTEMBER 30, 1997 AND 1996
The Company's total revenues decreased to $1,872,000 for
the third quarter of 1997, a 43% decrease from $3,273,000 for the same period
in 1996. For the nine month period ended September 30, 1997, total revenues
were $7,497,000, a decrease of 16% from $8,895,000 for the same period in the
prior year. Total revenue consists primarily of contract revenue and, to a
lesser extent, product sales. Revenues under U.S. government research and
development contracts were $1,723,000 for the third quarter of 1997, a
decrease of 30% from $2,469,000 in the same period in the prior year. For
the nine months ended September 30, 1997, contract revenue was $5,834,000 a
decrease of 18% from $7,089,000 for the prior year period. These decreases
were also due to the completion of several contracts. At September 30, 1997,
Conductus had a backlog of $1,594,000 under existing U.S. Government
contracts, most of which is to be performed in the next 12 months, and
$6,445,000 in awards from U. S. Government agencies for which such agencies
had not yet entered into research contracts with the Company. The Company
does not anticipate that contract revenues for the fourth quarter of 1997
will exceed those of the third quarter of 1997, although there can be no
assurance as to the level of contract revenue in any future period. The
recognition of revenue and receipt of payment pursuant to these contracts and
awards are subject to numerous risks.
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<PAGE>
Product revenues decreased to $149,000 in the third
quarter of 1997, a 81% decrease from $804,000 of product sales in same period
in the prior year. The decrease in product revenues resulted primarily from
decreased shipments of products from the Instrument and Systems Division,
which the Company disposed of during the third quarter of 1997. For the nine
months ended September 30, 1997, product revenues were $1,663,000, a decrease
of 8% from the prior year period, due primarily to lower volume of sales from
the Instrument and Systems division and NMR product lines, offset somewhat by
increased sales of superconducting sensors in the first quarter of 1997.
Conductus does not expect to recognize significant product sales until it
successfully develops and commercializes superconductive components and
systems addressing significant markets.
Cost of product sales decreased to $82,000 for the third
quarter of 1997, an 85% decrease over the same period in 1996, primarily due
to decreased product sales. Gross margins increased to 45% in the third
quarter of 1997 from 31% in the prior year, reflecting changes in commercial
product mix for both quarters. For the nine months ended September 30, 1997,
cost of product sales was $1,363,000, an increase of 12% over the same period
in 1996. This increase was primarily due to the inventory writedown
recorded in the second quarter of 1997 related to the disposal of the
Instrument and Systems Division, offset somewhat by the lower volume of
product sales. Gross margins were 18% and 33% for the nine months ended
September 30, 1997 and 1996, respectively, with the lower gross margins
related to the inventory writedown in the second quarter of 1997, offset
somewhat by changes in the commercial product mix. Margins are expected to
improve to the extent unit volumes increase. Costs of contract revenues are
included in research and development expenses.
Research and development expenses decreased to $2,339,000
in the third quarter of 1997, a 22% decrease from $3,011,000 for the same
period in 1996. The decrease is primarily attributable to decreased headcount
and expenditures for the Instruments and Systems Division and NMR product
lines, partially offset by increases in headcount and expenditures for the
communications product areas. For the nine months ended September 30, 1997,
research and development expenses were $8,216,000, a decrease of 6% from the
same period in 1996. This decrease was primarily due to decreased headcount
and expenditures for the Instrument and Systems Division offset somewhat by
increased spending in the communications product development area. The
Company expects to continue to incur significant research and development
expenses as it seeks to develop and market additional products.
Selling, general and administrative expenses increased to
$1,026,000 for the third quarter period of 1997, a 1% increase over the same
period in 1996. For the nine months ended September 30, 1997, selling,
general, and administrative expenses were $3,172,000, an increase of 7% from
the same period in 1996. These increases were primarily due to increased
spending for sales and marketing, recruiting, and consulting costs for
business development and the receivable writedown in the second quarter of
1997, offset somewhat by lower expenditures for the Instrument and Systems
Division. Total headcount decreased to 91 at September 30, 1997 from 127 at
September 30, 1996, reflecting reductions in personnel in the Instrument and
Systems Division and the NMR product line, partially offset by increases in
the communications product area. As the Company begins to market commercial
products, there will be additional sales and marketing costs above those
incurred in 1996.
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<PAGE>
In the third quarter of 1997, the Company completed the
disposal of its Instrument and Systems Division and NMR product line. The
Company recognized a net gain of approximately $93,000 in the third quarter
of 1997 on the final shutdown and disposal of these businesses.
The Company's total operating expenses were $3,355,000
for the third quarter period in 1997, a 27% decrease from the $4,579,000 for
the same period in 1996 for the reasons described above. For the nine months
ended September 30, 1997, total operating expenses were $12,758,000 a
decrease of 1% from the same period of the prior year for the reasons
described above.
Interest income was $51,000 in the third quarter period
of 1997 compared to $109,000 during the same period in 1996. The decrease is
due to decreased amounts of cash and investments. Interest charges decreased
on the Company's debt financing to approximately $21,000 in the third quarter
period of 1997 compared to $47,000 for the same period in 1996, due to lower
interest rates and lower levels of borrowing. For the nine months ended
September 30, 1997, interest income was $227,000, a increase of 44% from the
same period in 1996. This increase was primarily due to investments
resulting from the Company's financing activities in 1996. Interest expense
for the first nine months of 1997 was $146,000, an increase of 9% from the
same period in 1996 due to higher average borrowings to finance purchases of
capital equipment.
The Company's loss from operations for the nine months ended
September 30, 1997 was substantially higher due to much higher than
anticipated losses associated with its Instrument and Systems Division. In
the nine months ended September 30, 1997, this division incurred losses of
approximately $1,463,000. The Company completed the disposal of this division
during the third quarter of 1997.
The Company has not paid income taxes since inception due
to its cumulative operating losses.
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its operations since inception primarily through
$13,251,000 in net proceeds from its initial public offering of Common Stock
in August 1993, $9,892,000 in net proceeds from its follow-on public offering
of Common Stock in June 1996, $14,645,000 raised in private placement
financings, $38,839,000 from U.S. government contracts, $6,056,000 in
aggregate borrowings under equipment lease lines of credit and equipment term
loans and $3,646,000 in interest income. As of September 30, 1997, the
Company's aggregate cash, cash equivalents and short-term investments totaled
$4,420,000.
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<PAGE>
Net cash used in operations was $2,549,000 for the first nine
months of 1997 as compared to $3,788,000 for the same period in 1996. The
decrease in net cash used in operating activities in the first nine months of
1997 was primarily due to decreases in accounts receivable and inventories,
offset partially by the increase in net loss, and the decrease in accounts
payable and other accrued liabilities. The Company anticipates that its
accounts receivable and inventories may increase during 1997 as a result of
increased working capital requirements to support communications product
areas. Such increases will result in the use of additional cash in operating
activities.
Net cash provided by investing activities was $2,685,000 for
the first nine months of 1997 compared to net cash used of ($6,375,000) for
the first nine months of 1996. In 1997, net cash was provided by net
reductions in short-term investments, offset to some extent by purchases of
property and equipment. In 1996, net cash was primarily used to purchase
short term investments from the proceeds of the Company's equity offering in
June 1996.
Net cash used in financing activities was $(179,000) for the
first nine months of 1997 compared to net cash provided of $10,537,000 in the
first nine months of the prior year. Net cash used in financing activities in
the first nine months of 1997 was primarily for principal payments on long
term debt, offset partially by net proceeds from borrowings and from the
issuance of Common Stock. In the first nine months of 1996, net cash provided
by financing activities was primarily from the Company's equity offering, and
net proceeds of borrowings.
The Company to date has received limited revenues from product
sales. The development of the Company's potential products will require a
commitment of substantial funds to conduct further research and development
and testing of its potential products, to establish commercial-scale
manufacturing and to market any resulting product. The actual amount of the
Company's future capital requirements will depend on many factors that
affects its business.
Conductus anticipates that its existing available cash should
be adequate to fund the Company's operations at least through 1997. There
can be no assurance that additional funding will be available on acceptable
terms or at all, if required.
During February of 1997, the Financial Accounting Standards
Board issued Statement No. 128 (SFAS 128) "Earnings Per Share", and in March
issued Statement No. 129 (SFAS 129) "Disclosures of Information about Capital
Structure", both of which specify the computation, presentation and
disclosure requirements for Earnings per Share. SFAS 128 and SFAS 129 will
become effective for the first quarter of fiscal 1998.
In June 1997, the Financial Accounting Standards Board issued
Statement No. 130 (SFAS 130) "Reporting Comprehensive Income". SFAS No.
130 establishes standards for the reporting and display of comprehensive
income and its components in a full set of general purpose financial
statements. Comprehensive income is defined as the change in equity of a
business enterprise during a period from transactions and other events and
circumstances from nonowner sources. SFAS 130 will become effective for the
Company's 1998 fiscal year.
In June 1997, the Financial Accounting Standards Board issued
Statement No. 131 (SFAS 131) "Disclosures about Segments of an Enterprise and
Other Information." SFAS No. 131 requires publicly-held companies to report
financial and other information about key revenue-producing segments of the
entity for which such information is available and is utilized by the chief
operation decision makers. Specific information to be reported for
individual segments includes profit and loss, certain revenue and expense
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<PAGE>
items and total assets. A reconciliation of segment financial information to
amounts reported in the financial statements would be provided. SFAS 131
will become effective for the Company's 1998 fiscal year.
The Company is currently studying the implications of
these statements and has not yet determined the impact of their adoption.
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<PAGE>
PART II: OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS - NOT APPLICABLE.
ITEM 2: CHANGES IN SECURITIES - NOT APPLICABLE.
ITEM 3: DEFAULTS UPON SENIOR SECURITIES - NOT APPLICABLE.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. - NOT APPLICABLE.
ITEM 5: OTHER INFORMATION - NOT APPLICABLE.
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K.
(A) EXHIBITS - SEE BELOW.
(B) REPORTS ON FORM 8-K - NOT APPLICABLE.
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<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.
CONDUCTUS, INC.
Registrant
Dated: November 13, 1997 /S/ Donald F. DePascal
-----------------------
Principal Accounting Officer
Donald F. DePascal
Duly Authorized Officer
/S/ Charles E. Shalvoy
-----------------------
Charles E. Shalvoy
President and Chief Executive Officer
and Duly Authorized Officer
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<PAGE>
EXHIBIT INDEX
Sequential
Exhibits Page Number
- -------- -----------
11.01 Statements of Computation of
Loss Per Share
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<PAGE>
EXHIBIT 11.01
CONDUCTUS, INC.
STATEMENTS OF COMPUTATION OF LOSS PER SHARE
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------- ------------------
1997 1996 1997 1996
---- ---- ---- ----
Net loss $(1,491) $(1,244) $(5,243) $(3,970)
------- ------- ------- -------
Weighted average number
of shares outstanding 6,901 6,782 6,853 6,084
------- ------- ------- -------
Common and common
equivalent shares used in
computing per share amounts 6,901 6,782 6,853 6,084
------- ------- ------- -------
------- ------- ------- -------
Net loss per share $(0.22) $(0.18) $(0.77) $(0.65)
------- ------- ------- -------
------- ------- ------- -------
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 1,076,977
<SECURITIES> 3,342,971
<RECEIVABLES> 2,042,900
<ALLOWANCES> 0
<INVENTORY> 541,279
<CURRENT-ASSETS> 7,317,957
<PP&E> 2,824,563
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0
0
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</TABLE>
