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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 17, 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)
<TABLE>
<S> <C> <C>
Delaware 0-22302 36-3688459
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(State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.)
</TABLE>
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 17, 2000, Illinois Superconductor Corporation (Company)
issued a press release announcing that the Company has agreed to acquire
Spectral Solutions, Inc. (SSI) for 3.5 million shares of the Company's common
stock. SSI is a privately owned company located in Louisville, Colorado, that
develops and manufactures cryogenic superconducting RF front-end systems for the
wireless industry. Closing the transaction is subject to standard closing
conditions and is anticipated to occur in June or July. Among the closing
conditions is approval of the transaction by SSI's stockholders. The holders of
more than 80% of the outstanding SSI shares have committed to vote for the
transaction. As a result of the closing, SSI will become a wholly owned
subsidiary of the Company. The Company has agreed to add to its board of
directors either Dr. Richard Herring, President of SSI or another person chosen
by the principal SSI stockholders and approved by the Company. Closing the
merger is also conditioned upon the Company's shareholders approving the pending
proposal to authorize more shares of the Company. Furthermore, in connection
with the transaction, holders of in excess of 85% of the outstanding shares of
SSI have granted the Company options to purchase their shares of SSI under
certain circumstances. The exercise price of those options is the same number of
shares of the Company's common stock as would be issuable to those stockholders
were the merger to close. If the Company exercises those options, SSI would
become a subsidiary of the Company, however, SSI stockholders who did not grant
the Company an option and did not hereafter otherwise agree to sell their
securities in SSI to the Company would continue to be stockholders of SSI along
with the Company. A copy of the May 17, 2000 press release is attached hereto
and incorporated herein as Exhibit 99.1.
On May 18, 2000, the Company issued a press release announcing the
adjournment of the Company's May 17, 2000 annual stockholders' meeting to June
15, 2000. A copy of the May 18, 2000 press release is attached hereto and
incorporated herein as Exhibit 99.2.
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
17, 2000 announcing that the Company has agreed to acquire
Spectral Solutions, Inc. (SSI) for 3.5 million shares of the
Company's common stock.
99.2 Press Release issued by Illinois Superconductor Corporation on May
18, 2000 announcing the adjournment of the Company's May 17, 2000
annual stockholders' meeting to June 15, 2000.
2
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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 18, 2000
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EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
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99.1 Press Release issued by Illinois Superconductor Corporation on
May 17, 2000 announcing that the Company has agreed to acquire
Spectral Solutions, Inc. (SSI) for 3.5 million shares of the
Company's common stock.
99.2 Press Release issued by Illinois Superconductor Corporation on
May 18, 2000 announcing the adjournment of the Company's May
17, 2000 annual stockholders' meeting to June 15, 2000.
4
<PAGE> 1
EXHIBIT 99.1
[ILLINOIS SUPERCONDUCTOR CORPORATION LOGO]
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News |
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|RELEASE
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FOR IMMEDIATE RELEASE CONTACT: Maureen Murnane
PHONE: 847-391-9426
INTERNET: [email protected]
ILLINOIS SUPERCONDUCTOR TO ACQUIRE SPECTRAL SOLUTIONS
Mt. Prospect, IL (May 17, 2000) - Illinois Superconductor Corporation (OTC:
ISCO), a leading supplier of superconducting radio-frequency (RF) products for
the wireless industry, announced today that it has agreed to acquire Spectral
Solutions, Inc. (SSI) for 3.5 million shares of Illinois Superconductor
Corporation (ISC) common stock. SSI is a privately owned company located in
Louisville, Colorado, that develops and manufactures cryogenic superconducting
RF front-end systems for the wireless industry. SSI has recently introduced the
industry's first commercial tower-mounted superconducting system incorporating a
superconducting receiver filter and a cryogenic low-noise amplifier (LNA).
Dr. George Calhoun, Chief Executive Officer of ISC, said: "There are four
principal reasons for this transaction.
"First, we like the SSI product, and we think it enhances our current
product portfolio for the wireless industry. We believe that the tower-mounted
configuration is in line with one important trend in the wireless industry,
where we see more and more of the `base station' being repackaged into compact,
outdoor applications. In the case of filter-plus-LNA front end systems in
particular, tower-mounted systems are designed to be placed near the antenna at
the top of the tower structure to minimize the losses in received signal caused
by long coaxial cable lines. In many cases, half or more of the signal is lost
simply connecting the antenna to the base-station. Tower-mounting can solve this
problem, and thus gain range and improve signal quality. To do this, however,
the entire system has to be ruggedized for all-weather performance, which is a
significant engineering challenge for cryogenic systems. SSI has solved the
problem of re-packaging the superconducting front end very effectively, and we
think their product will be quite attractive for use in high-tower sites in
rural areas.
"Second, SSI has a strong patent portfolio covering the tower-mount
configuration for superconducting filter systems. Some of the specifications we
are discussing with 3G equipment manufacturers in Japan may require
tower-mounted configurations as an option. We believe that the SSI intellectual
property will strengthen our overall position for the use of superconducting
front-end technology in 3G systems.
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"Third, we think that SSI brings a strong management core and excellent
technical talent, which will help us build the ISC organization to address our
strategic opportunities more effectively. Dr. Richard Herring, President of SSI,
brings nearly 40 years of high-tech technical and management experience in
cryogenics, superconducting applications, and aerospace. He served for several
years as the Chief Operating Officer of Ball Aerospace, and will add a depth of
executive experience to ISC. Dr. Michael Cromar, the Technical Leader at SSI, is
one of the leading technologists in the field of superconducting applications
for wireless networks, with considerable experience in thin-film materials
technology as well as filter design and cryogenic applications. Michael leads a
technical team that has been working together for several years, developing
wireless superconducting RF front-end products. Shawn Doyle, SSI's
Sales/Marketing Leader, was formerly Vice-President of Sales for Wireless
Networks at Nortel, and later held the same position at Triton Network Systems
(a broadband wireless start-up). He has an established record of sales success
in our industry. I expect all the SSI executives to play key roles in our
company going forward.
"Finally, the SSI acquisition brings to ISC a nucleus of talent and many
years' experience with thin-film superconducting technology, which will expand
our options for addressing a variety of 2G and 3G requirements. We are
developing an expanded RF front-end system, based on superconducting materials
and Stirling cryogenic technology, encompassing elements of both the transmit
chain and the receive chain, including filters, amplifiers, duplexers,
combiners, and other components. Some elements, such as receiver filter systems,
will be based principally upon thick-film solutions (which ISC already
dominates), because of thick film's proven performance superiority. Others may
use thin-film in certain applications or combinations.
"In sum, with this acquisition, ISC becomes the only superconducting
company in the world possessing both thick-film and thin-film technology. Based
upon our strong intellectual property position (nearly fifty patents and patent
applications after giving effect to this acquisition), I am confident that we
will be the only company in this position for the foreseeable future."
Dr. Richard Herring, Chief Executive Officer of Spectral Solutions, stated:
"The company resulting from this merger will be uniquely positioned to offer a
broad range of product solutions for the wireless industry. I and my associates
at SSI are very excited about the transaction and look forward to working with
George and his team in positioning ISC to be the world-wide leader in
superconducting radio frequency products for the wireless industry. We believe
the integration of the two companies will be significantly greater than the sum
of the parts in management, sales, and technical leadership."
Closing of the transaction is subject to standard closing conditions and is
anticipated to occur in June or July. Among the closing conditions is approval
of the transaction by SSI's stockholders. The holders of more than 80% of the
outstanding SSI shares have committed to vote for the transaction. As a result
of the closing, SSI will become a wholly owned subsidiary of ISC. ISC has agreed
to add to its board of directors either Dr. Herring or another person chosen by
the principal SSI stockholders and approved by ISC.
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Closing of the merger is also conditioned upon ISC's shareholders approving
the pending proposal to authorize more ISC shares. This proposal was to have
been considered at ISC's Annual Stockholders Meeting to be held on May 17 in
Chicago. Although ISC's management will make a business presentation at that
meeting as originally planned, the voting portion of the meeting will then be
adjourned to a later date, to be announced, in order to afford ISC time to
distribute to its stockholders supplementary materials describing SSI and the
proposed acquisition.
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.
Statements contained in this news release that are not historical facts are
forward-looking statements. Such forward-looking statements are made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995 and 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 for 2000 and beyond to differ materially from those expressed in,
or implied by, such statements. These important factors include, without
limitation, the failure of the SSI transaction to close, the ability to
integrate SSI's and ISC's businesses in the event that the SSI transaction is
completed, 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 and restrictions imposed on the
Company under its existing debt instruments 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; the adverse
effects on liquidity of the Company's common stock because of its de-listing
from the NASDAQ National Market in June 1999; continued downward pressure on the
prices charged for the Company's products due to the competition of rival
manufacturers of front end systems 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 update or revise these forward-looking statements to reflect new
events or uncertainties.
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EXHIBIT 99.2
[ILLINOIS SUPERCONDUCTOR CORPORATION LOGO]
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News |
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|RELEASE
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FOR IMMEDIATE RELEASE CONTACT: Maureen Murnane
PHONE: 847-391-9426
INTERNET: [email protected]
ILLINOIS SUPERCONDUCTOR MEETING ADJOURNED
Mt. Prospect, IL (May 18, 2000) - Illinois Superconductor Corporation (OTC:
ISCO) announced today that its annual stockholders meeting has been adjourned to
June 15, 2000, when voting on the outstanding proposals is scheduled to be
conducted. The adjournment will allow the Company time to send stockholders
supplemental proxy material concerning the Company's pending acquisition of
Spectral Solutions, Inc. The adjournment will also afford the Company additional
time to obtain proxies on the two proposals (dealing with the charter amendment
and the stock option plan) on which brokers cannot vote without specific
instructions from their customers. The voting to date on those proposals has
been overwhelmingly positive, but more proxies are needed for the proposals to
pass. At yesterday's originally scheduled meeting time, management made a
business presentation and responded to questions, so it is anticipated that the
June 15 meeting will be used exclusively to conduct voting.
Proxy cards previously submitted will continue to be effective at the
adjourned meeting, unless revoked by stockholders. Stockholders who have not yet
voted are urged to do so by submitting the proxy cards previously sent to them.
The supplemental proxy material mentioned above will provide stockholders with
an opportunity to revoke or replace any previously delivered proxy.
Stockholders who have questions about the annual meeting or would like
additional copies of the proxy statement or the proxy card should contact the
Company's proxy solicitor:
MACKENZIE PARTNERS, INC.
156 Fifth Avenue
New York, New York 10010
By telephone: (212) 929-5500
By facsimile: (212) 929-0308
By email: [email protected]
or
Call toll free: (800) 322-2885
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 serv-
<PAGE> 2
ices 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.
Statements contained in this news release that are not historical facts are
forward-looking statements. Such forward-looking statements are made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995 and 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 for 2000 and beyond to differ materially from those expressed in,
or implied by, such statements. These important factors include, without
limitation, the failure of the SSI transaction to close, the ability to
integrate SSI's and ISC's businesses in the event that the SSI transaction is
completed, 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 and restrictions imposed on the
Company under its existing debt instruments 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; the adverse
effects on liquidity of the Company's common stock because of its de-listing
from the NASDAQ National Market in June 1999; continued downward pressure on the
prices charged for the Company's products due to the competition of rival
manufacturers of front end systems 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 update or revise these forward-looking statements to reflect new
events or uncertainties.
