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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
May 12, 2000
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Date of Report (Date of earliest event reported)
Illinois Superconductor Corporation
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(Exact name of registrant as specified in its charter)
Delaware 0-22302 36-3688459
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
451 Kingston Court, Mt. Prospect, Illinois 60056
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(Address of principal executive offices) (Zip Code)
(847) 391-9400
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(Registrant's telephone number)
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ITEM 5. OTHER EVENTS.
On May 12, 2000, Illinois Superconductor Corporation issued a press
release reporting its earnings for the quarter ended March 31, 2000. A copy of
the May 12, 2000 press release is attached hereto as Exhibit 99.1.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Items (a) and (b) are inapplicable.
(c) Exhibits.
99.1 Press Release issued by Illinois Superconductor Corporation
on May 12, 2000 reporting earnings for the quarter ended
March 31, 2000.
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
ILLINOIS SUPERCONDUCTOR CORPORATION
By: /s/ CYNTHIA QUIGLEY
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Cynthia Quigley, Chief Financial Officer
Dated: May 12, 2000
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
99.1 Press Release issued by Illinois Superconductor Corporation on
May 12, 2000 reporting earnings for the quarter ended March 31,
2000.
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EXHIBIT 99.1
[ILLINOIS SUPERCONDUCTOR CORPORATION LOGO]
Contact: Cynthia Quigley
Phone: 847-391-9405
Internet:[email protected]
ILLINOIS SUPERCONDUCTOR CORPORATION REPORTS
FISCAL 2000 FIRST QUARTER RESULTS
Mt. Prospect, IL (May 12, 2000) Illinois Superconductor Corporation
(OTC: ISCO: OB) a leading supplier of superconducting radio-frequency (RF)
products for the wireless industry, today reported financial results for the
first quarter of 2000.
The Company reported net revenues of $172,363 for the first quarter of
2000 versus $511,900 during the comparable period of 1999. All revenues resulted
from commercial product sales and not from government research contracts.
The operating loss for the first quarter 2000 was $2,032,803, versus
$2,183,723 for the first quarter of 1999. This improvement was driven by
decreased cost of sales and personnel and advertising costs. These improvements
were partially offset by higher general and administrative expenses, primarily
legal and accounting expenses.
Net loss for the first quarter of 2000 was $2,431,227, including a
$28,297 extraordinary charge associated with the Company's financing
arrangements. For the first quarter of 1999, the Company reported a net loss of
$2,347,784, including an extraordinary charge of $73,000.
Included in the net loss for both quarters are non-cash charges for
interest expense on convertible notes, of $400,881 and $114,210 for 2000 and
1999, respectively. Excluding non-cash and extraordinary charges, the Company's
reported loss would be $2,002,049 for the first quarter of 2000 versus
$2,160,574 for the first quarter of 1999.
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Loss on a per-share basis improved $0.09 from $(0.19) per share for
first quarter of 1999 to $(0.10) per share for the comparable period in 2000.
The weighted average number of shares outstanding increased from 12,557,344 to
24,325,932, as a result of conversions of notes and exercises of warrants and
options.
During the first quarter of 2000, the Company received an additional
$6.8 million of cash capital, experienced the conversion of $4.1 million of debt
into equity, and brought current its payables.
George Calhoun, Chief Executive Officer of Illinois Superconductor
Corporation, stated, "Our disappointing quarterly sales primarily reflect two
factors. First, the quarter's sales still reflect the effects of last year's
turmoil at the Company. In response, we have been working hard to inform our
customers of our strengthened financial condition and management team, our new
line of innovative and smaller products, and our renewed focus on customer
support. Since inception we have sold more commercial product than either of our
competitors, and we are determined to resume our historic role as sales leader.
"Second, our sales were affected by the willingness of one of our
competitors to subsidize sales by issuing dramatically in-the-money warrants to
customers. We believe that this tactic undermines their claims of product
superiority and sales growth and is not the path to financial stability. We have
declined to join them in giving away product.
"We believe our success will be driven by the superiority of our 2G and
3G products, in which we have great confidence. In the 2G arena, we recently
introduced our ATP(TM) Classic - which not only is the smallest superconducting
filter available today, but also includes ISC's unique ATP(TM) (all-temperature
performance) technology. ATP(TM) allows a superconducting filter to perform as a
conventional filter if the cryogenic unit fails, thereby saving carriers both
the expense and the space of back-up filters and the associated circuitry. We
have already received our first order for this product, from a major wireless
carrier.
"In the 3G arena, we are honored that the Japanese have already spent
three years testing several prototypes of our product and that, as recently
reported, respected scientists from NTT Docomo have published a paper
demonstrating the superior performance of our unique thick-film technology. We
continue to receive prototype orders from Japanese carriers and their OEMs and
are working very hard to capture the 3G opportunity."
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Illinois Superconductor Corporation is a leader in the
commercialization of high temperature superconducting technology for the
wireless telecommunications industry. The Company develops, manufactures and
markets radio frequency (RF) products to enhance the quality and capacity of
cellular telephone, personal communications services and other wireless
telecommunications services. More information about Illinois Superconductor
Corporation is available on the Company's internet web site at
http://www.ilsc.com.
Because the Company wants to provide investors with more meaningful and
useful information, this news release contains, and incorporates by reference,
certain "forward-looking statements" that reflect the Company's current
expectations regarding the future results of operations, performance and
achievements of the Company. The Company has tried, wherever possible, to
identify these forward-looking statements by using words such as "anticipates,"
"believes," "estimates," "expects," "plans," "intends" and similar expressions.
These statements reflect the Company's current beliefs and are based on
information currently available to it. Accordingly, these statements are subject
to certain risks, uncertainties and contingencies, which could cause the
Company's actual results, performance or achievements to differ materially from
those expressed in, or implied by, such statements. These factors include, among
others, the following: the Company's ability to obtain additional financing in
the near future; the Company's history of net losses and the lack of assurance
that the Company's earnings will be sufficient to cover fixed charges in the
future; the degree to which the Company is leveraged, the fact that its assets
are pledged and the restrictions imposed on the Company under its existing debt
instruments, all of which may adversely affect the Company's ability to finance
its future operations; uncertainty about the Company's ability to compete
effectively against better capitalized competitors and to withstand downturns in
its business or the economy generally; decline in demand for, and acceptance of,
the Company's products; the adverse effects on the liquidity of the Company's
common stock because of its delisting from the NASDAQ National Market in June
1999; volatility of the Company's common stock price; continued downward
pressure on the prices charged for the Company's products due to competition of
rival manufacturers of radio frequency and front end products for the wireless
telecommunications market; the timing and receipt of customer orders; the
Company's ability to attract and retain key personnel; and the effects of legal
proceedings. A more complete description of these risks, uncertainties and
assumptions is included in the Company's filings with the Securities and
Exchange Commission, including those described under the heading "Risk Factors"
in the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1999. The Company undertakes no obligation to release publicly the results
of any revisions to any such forward-looking statements that may be made to
reflect events or circumstances after the date of this Report or to reflect the
occurrence of unanticipated events.
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THREE MONTHS ENDED
MARCH 31,
2000 1999
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(UNAUDITED)
Net sales $ 172,363 $ 511,900
Costs and expenses:
Cost of sales 649,083 1,009,026
Research and development 306,328 521,563
Selling and marketing 184,525 456,515
General and administrative 1,065,230 708,519
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Total costs and expenses 2,205,166 2,695,623
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Operating loss (2,032,803) (2,183,723)
Other income (expense)
Interest income 24,380 38,356
Non-cash interest expense on Senior
Convertible Notes (400,881) (114,210)
Other interest expense (1,583) (15,207)
Other income, net 7,957 -
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(370,127) (91,061)
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Loss before extraordinary item (2,402,930) (2,274,784)
Extraordinary item - debt
extinguishment (28,297) (73,000)
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Net loss $ (2,431,227) $ (2,347,784)
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Basic and diluted loss per common
share before extraordinary item $ (0.10) $ (0.18)
Extraordinary item - debt
extinguishment - (0.01)
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Basic and diluted loss per
common share $ (0.10) $ (0.19)
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Weighted average number of common
shares outstanding 24,325,932 12,557,344
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