<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
FORM 10-Q/A
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
September 30, 1998
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 0-26820
TERA COMPUTER COMPANY
(Exact name of registrant as specified in its charter)
WASHINGTON 93-0962605
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2815 EASTLAKE AVENUE EAST
SEATTLE, WA 98102
(206) 490-2000
(Address of principal executive offices)
(Registrant's telephone number, including area code)
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 such filing
requirements for the past 90 days.
Yes [X] No [ ]
As of November 13, 1998, 13,372,161 shares of the Company's Common
Stock, par value $0.01 per share, were outstanding.
<PAGE> 2
The Company has amended its financial statements to reclassify, beginning
with the third quarter of 1998, certain manufacturing expenses and costs
relating to inventory adjustments as Manufacturing Costs and Inventory
Adjustments. These expenses include personnel costs and allocated overhead for
its manufacturing group, manufacturing expenses not directly related to the cost
of sales for delivered systems, and inventory adjustments, such as revaluations
and cost variations arising from changes in production yields, inventory
obsolescence, inventory consumed as part of the manufacturing process and
capitalized manufacturing labor and overhead costs. These expenses had
previously been classified as Research and Development expenses. Corresponding
changes have been made to the Management's Discussion and Analysis of Financial
Condition and Results of Operations in Item 2.
TERA COMPUTER COMPANY
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements:
Balance Sheets as of December 31, 1997
and September 30, 1998 3
Statements of Operations for the Three Months and
Nine Months Ended September 30, 1997 and 1998 4
Condensed Statements of Cash Flows for the Three
Months and Nine Months Ended September 30, 1997
and 1998 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
Item 3. Quantitative and Qualitative Disclosures about
Market Risk 10
PART II OTHER INFORMATION
Item 2. Changes in Securities 11
Item 6. Exhibits and Reports on Form 8-K 12
</TABLE>
2
<PAGE> 3
TERA COMPUTER COMPANY
BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1997 1998
------------ ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 13,329,115 $ 5,277,276
Funds in transit 3,000,000
Accounts receivable 99,696 383,815
Related party receivable 368,008 302,176
Inventory 4,290,873 7,265,678
Advances to suppliers 325,385 955,300
Other assets 410,754 569,468
------------ ------------
Total current assets 18,823,831 17,753,713
PROPERTY AND EQUIPMENT, NET 1,914,925 2,533,356
LEASE DEPOSITS 120,629 163,052
------------ ------------
TOTAL $ 20,859,385 $ 20,450,121
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 2,138,343 $ 2,763,235
Accrued payroll and related expenses 1,713,553 1,612,785
Deferred revenue 34,178
Potential contract adjustments 250,000 250,000
Current portion of obligations under capital leases 379,597 476,311
------------ ------------
Total current liabilities 4,481,493 5,136,509
OBLIGATIONS UNDER CAPITAL LEASES
less current portion 532,321 610,999
REDEEMABLE SECURITIES (SEE NOTES)
Issued and outstanding, 10,000 and 3,282 shares of Series A Convertible 9,477,709
Preferred Stock, $.01 par value
SHAREHOLDERS' EQUITY (SEE NOTES)
Preferred Stock, par $.01 - Authorized, 5,000,000 shares; issued and
outstanding, 10,000 and 3,282 shares of Series A Convertible
issued and outstanding, 0 and 6,000 shares of Series B Convertible 8,784,990
Common Stock, par $.01 - Authorized, 25,000,000 shares;
issued and outstanding, 11,248,096 and 13,185,775 shares 49,168,180 64,590,707
Preferred stock dividend distributable 116,025
Accumulated deficit (42,800,318) (58,789,109)
------------ ------------
6,367,862 14,702,613
============ ============
TOTAL $ 20,859,385 $ 20,450,121
============ ============
</TABLE>
See notes to financial statements
Page 3
<PAGE> 4
TERA COMPUTER COMPANY
STATEMENT OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1998 1997 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUE $ $ 231,655 $ $ 1,779,210
OPERATING EXPENSES:
Cost of sales (209,383) (1,654,398)
Manufacturing costs and
inventory adjustments (919,843) (919,843)
Research and development (3,871,400) (2,424,720) (8,984,017) (10,299,279)
Marketing and sales (262,065) (484,165) (635,226) (1,268,554)
General and administrative (366,560) (516,316) (1,066,076) (1,496,551)
------------ ------------ ------------ ------------
(4,500,025) (4,322,772) (10,685,319) (13,859,415)
RESEARCH FUNDING 119,815 105,565 349,169 181,348
------------ ------------ ------------ ------------
Net operating expense (4,380,210) (4,217,207) (10,336,150) (13,678,067)
OTHER INCOME 104,382 63,330 79,418 163,648
------------ ------------ ------------ ------------
NET LOSS (4,275,828) (4,153,877) (10,256,732) (13,514,419)
PREFERRED STOCK DIVIDEND (14,714) (141,300) (52,214) (365,611)
AMORTIZATION OF PREFERRED
STOCK DISCOUNT (484,259) (464,733) (847,221) (464,733)
============ ============ ============ ============
LOSS FOR COMMON STOCK $ (4,774,801) $ (4,759,910) $(11,156,167) $(14,344,763)
============ ============ ============ ============
LOSS PER COMMON SHARE (0.46) $ (0.39) $ (1.38) $ (1.22)
WEIGHTED AVERAGE SHARES
OUTSTANDING 10,331,862 12,258,238 8,064,929 11,785,680
</TABLE>
See notes to financial statements
Page 4
<PAGE> 5
TERA COMPUTER COMPANY
STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1998 1997 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net loss $ (4,275,828) $ (4,153,877) $(10,256,732) $(13,514,419)
Net cash used by operating activities (5,461,944) (6,357,859) (11,962,494) (16,288,886)
INVESTING ACTIVITIES:
Net cash used by investing activities (742,103) (392,439) (1,007,473) (1,375,640)
FINANCING ACTIVITIES:
Net cash provided by financing activities 5,384,354 6,077,845 21,086,258 12,612,687
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (819,693) (672,453) 8,116,291 (5,051,839)
CASH AND CASH EQUIVALENTS
Beginning of period 9,864,744 5,949,729 928,760 10,329,115
------------ ------------ ------------ ------------
End of period $ 9,045,051 $ 5,277,276 $ 9,045,051 $ 5,277,276
============ ============ ============ ============
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
Cash paid for interest $ 22,068 $ 58,835 $ 56,882 $ 132,316
============ ============ ============ ============
</TABLE>
See notes to financial statements
Page 5
<PAGE> 6
TERA COMPUTER COMPANY
NOTES TO FINANCIAL STATEMENTS
(unaudited)
BASIS OF PRESENTATION
The accompanying balance sheets and related interim statements of
operations and cash flows have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-Q and Rule 10-01 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 have been
included. Interim results are not necessarily indicative of results for a full
year. The information included in this amended Form 10-Q/A should be read in
conjunction with Management's Discussion and Analysis and the financial
statements and notes thereto included in the Company's restated financial
statements for the years ended December 31, 1996 and 1997, and the period from
December 7, 1987 through December 31, 1997, contained in the Company's Annual
Report on Form 10-K/A for the fiscal year ended December 31, 1997.
NET LOSS PER COMMON SHARE
Net loss per common share is computed on the basis of the weighted
average number of shares of Common Stock outstanding. As outstanding stock
options, warrants and preferred stock are antidilutive, their effect has not
been included in the calculation of net loss per share.
INVENTORY
Inventory consisted of the following:
<TABLE>
<CAPTION>
As of As of
December 31,1997 September 30, 1998
---------------- ------------------
<S> <C> <C>
Components and subsystems $3,405,120 $5,452,667
Work in Process 885,753 1,813,011
---------- ----------
$4,290,873 $7,265,678
</TABLE>
MANUFACTURING COSTS AND INVENTORY ADJUSTMENTS
In the third quarter of 1998, the Company began incurring manufacturing
expenses, reflecting the Company's progress towards commercial production. These
expenses include personnel costs and allocated overhead for its manufacturing
group, production expenses not directly related to cost of sales for delivered
systems, and inventory adjustments, such as revaluations and cost variations
arising from changes in production yields, inventory obsolescence, inventory
consumed as part of the manufacturing process and capitalized manufacturing
labor and overhead costs.
CHANGES IN CAPITAL
The Company previously classified its Series A Convertible Preferred
Stock, issued in December 1997, and its Series B Convertible Preferred Stock,
issued in June 1998, as redeemable securities as the governing instruments for
both securities contained conditions for redemption which were not solely within
the control of
6
<PAGE> 7
the Company; for example a significant decline in the market value of the
Company's common stock which could lead to a delisting of the common stock from
the Nasdaq National Market System. The Company and each of the holders of these
securities have entered into agreements providing that the holders no longer may
redeem these securities if the condition otherwise giving rise to a redemption
right by the holders is not solely within the control of the Company. Therefore,
these securities are now classified as Shareholders' Equity.
The Company previously reported the issuance on June 30, 1998, of 6,000
shares of Series B Convertible Preferred Stock and 100,000 warrants, with an
exercise price of $15.00 per share. The warrants were valued at $464,733 (net of
allocated offering costs), using the Black-Scholes method. The discount arising
from the allocation of proceeds to the warrants has been amortized as a return
of capital to the preferred shareholders over the period the related Series B
Convertible Preferred was first convertible, which occurred in the three months
ended September 30, 1998.
On September 30, 1998, the Company issued 600,000 shares of Common Stock
and five year warrants to purchase 121,008 shares of Common Stock with an
exercise price of $10.04 per share, subject to adjustment, for total proceeds of
$6,000,000, less offering expenses. Of the proceeds, $3,000,000 were received on
September 30, 1998; the remaining $3,000,000 were in transit on September 30,
1998, and were received on October 1, 1998. See Item 2 under Part II, below, for
additional information regarding this financing.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
The information set forth in this Item 2 includes forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act, as amended, and is
subject to the safe harbor created by those sections. For a discussion of Risk
Factors that could affect the Company's future performance, please see "Business
- - Risk Factors" contained in the Company's Annual Report on Form 10-K/A for the
fiscal year ended December 31, 1997.
OVERVIEW
The Company had an accumulated net loss from operations of approximately
$58.8 million as of September 30, 1998. The Company's funding to date has been
primarily from the sale of approximately $70.8 million in securities, research
funding from the Defense Advanced Research Projects Agency ("DARPA"), of
approximately $19.2 million, and product sales of approximately $1.3 million.
7
<PAGE> 8
The Company has experienced net losses in each year of operations and
expects to incur further substantial losses until additional sales are made, and
possibly thereafter. In April 1998 the Company recognized its first revenue from
system sales with its delivery of a two-processor MTA system to the San Diego
Supercomputer Center ("SDSC"); through September 30, 1998, the Company had not
generated any earnings. The Company plans to upgrade the SDSC system in stages
to larger configurations as it receives production printed circuit boards,
integrated circuits and other components that are integrated into a commercially
acceptable system. See "Business - Risk Factors - Development Status of the MTA
System" and " - Manufacturing Risks; Reliance On And Capacity Of Third-Party
Sole Source Suppliers" and "Business - Strategy" in the Company's Annual Report
on Form 10-K/A for the fiscal year ended December 31, 1997.
RESULTS OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1998
Revenue. The Company recorded revenue in the first nine months of 1998
of approximately $1.8 million, of which $232,000 was recognized in the third
quarter pursuant to a subcontract with SDSC to evaluate multithreaded
architecture for certain defense applications. The Company expects to complete
this subcontract in for an additional $487,000, of which the Company's portion,
after payments to subcontractors, will be approximately $183,000; this
subcontract expires on June 30, 1999. The Company may obtain additional revenues
in 1998 from the sale of larger configurations to SDSC and from other sales to
potential customers, although it currently has no purchase orders for sales to
other customers.
Operating Expenses. Cost of revenue for the third quarter and the first
nine months of 1998, largely arising from the company's first system sales to
SDSC in the second quarter, were high as a percentage of sales due to favorable
pricing terms provided to SDSC and the inclusion of costs of system
infrastructure to support a full 16-processor MTA system.
In the third quarter of 1998, the Company began incurring
manufacturing expenses separate from its research and development efforts,
reflecting its progress to commercial production. The costs of $920,000 for the
three months ended September 30, 1998, include personnel and allocated overhead
of $672,000, production expenses of $240,000 and net inventory adjustments of
$8,000, with $1.1 million of inventory obsolescence and consumed inventory
almost entirely offset by favorable cost variations and capitalized costs.
Research and development expenses include costs associated with the
development of the MTA system, including personnel expense, depreciation and
lease expense on facilities and equipment and nonrecurring engineering, software
and hardware costs. Research and development expenses for the three and nine
months ended September 30, 1998 were $2.4 million and $10.3 million,
respectively, compared to $3.9 million and $9.0 million for the same respective
periods in 1997.
The decrease in research and development expenses in the third quarter
reflects the Company's transition to manufacturing products, including
incurring the manufacturing expenses discussed above, and lower third-party
engineering expenses in the quarter. The $1.3 million increase in research and
development expenses for the nine months ended September 30, 1998 over the
comparable 1997 period would have been higher without the incurrence of the
manufacturing expenses described above, and also reflects higher engineering
expenses earlier in 1998. Research and development expenses include engineering
charges of $291,000 and $1.5 million for the three and nine months ended
September 30, 1998, respectively.
8
<PAGE> 9
Although non-recurring hardware engineering expenses for
the current MTA implementation should continue to decrease, research and
development expenses will continue to be a major expense as the Company devotes
greater effort to future system development.
Marketing and sales expenses for the three and nine months ended
September 30, 1998 were $484,000 and $1.27 million, respectively, compared to
$262,000 and $635,000 for the same periods in 1997, representing an increase of
85% over the third quarter of 1997 and 100% over the first nine months of 1997.
General and administrative expenses for the first three and nine months ended
September 30, 1998 were $516,000 and $1.50 million, respectively, compared to
$367,000 and $1.07 million for the same periods in 1997, representing an
increase of 41% in the third quarter and 40% for the nine month period. The
increase in marketing and sales expenses was due to additional sales and
applications staff, increased marketing efforts and higher wages, while the
increase in general and administrative expenses was due largely to additional
staff, operating costs associated with being a publicly owned company and higher
wages. These expenses are expected to increase commensurate with any growth in
the Company's operations.
Research Funding. The Company currently is billing DARPA under a
research contract awarded in September 1995. Billings under this contract were
approximately $181,000 in the first nine months of 1998, with $106,000 billed in
the third quarter, and $282,000 left to be billed under this contract.
Other Income. Other income, net of other expense, increased to $164,000
in the first nine months of 1998, largely due to interest received on the
Company's increased cash balances. Other net income in the third quarter of
1998, however, was about $63,000, as compared to $104,000 for the third quarter
of 1997.
Taxes. There was no provision for federal income taxes in any period as
the Company has continued to incur net operating losses.
Preferred Stock. The Company recorded a $141,000 cumulative charge for
dividends on the Company's Series A and Series B Convertible Preferred Stock in
the third quarter, all of which has been paid by the issuance of 19,934 shares
of the Company's Common Stock. In addition, the Company amortized in the third
quarter the preferred stock discount resulting from the allocation of proceeds
to warrants issued on June 30, 1998; this resulted in a $465,000 non-cash charge
to the Loss for Common Stock.
YEAR 2000. Issues relating to the Year 2000 result from many computer
programs being written using two digits rather than four to define the
applicable year, so that the year "00" may be interpreted as the year 1900
rather than 2000. A related issue is the ability to recognize the Year 2000 as a
leap year. Software programs and embedded microcircuitry that have
date-sensitive features may have Year 2000 issues. These programs may include
software tools that we use in the development of the hardware and operating
systems of our MTA system, the software programs and embedded chips used in our
internal systems and software programs and equipment used in the normal
operation of our business. In addition, key suppliers may have issues relating
to the Year 2000 that could affect their ability to provide needed products and
services.
We have begun a formal review of our products, our internal network
system, the hardware and software tools we are using and our key suppliers
regarding the potential impact on us regarding Year 2000 issues. The review is
being conducted by representatives from our finance, manufacturing, engineering,
purchasing and systems administration departments. We believe there is no
significant exposure relating to our MTA system and its Unix-based operating
system. We expect that our formal review will be largely completed as to other
matters by the end of the second quarter of 1999.
Based upon the responses to date and informal inquiries, we believe no
significant modifications to our internal network or computer systems are
necessary to address Year 2000 issues. We installed a materials requirement
planning II system in 1998 that is Year 2000 compliant. Our review is ongoing
with respect to our internal systems and the various software development tools
we use. We are making inquiries of our suppliers and service providers to obtain
assurances concerning their Year 2000 compliance and their ability to continue
to provide products and services to us which are Year 2000 compliant. We have
assumed that basic public utilities will continue to be available to us after
January 1, 2000, and are not aware of any information to the contrary. To date
we have not identified any material deficiencies or remediation requirements and
have not budgeted for any remediation costs or costs associated with responding
to other parties' Year 2000 noncompliance. We do not separately track the
internal costs for our Year 2000 review, and current and future anticipated
costs are expected to include only payroll and related costs for the employees
engaged in the review. We are reevaluating these positions periodically as we
continue our review.
At this point we cannot predict the effect of the Year 2000 issues on
our suppliers or the resulting effect on us. We have not yet developed a
contingency plan of operating in the event that critical systems of vendors,
suppliers or other third parties are not Year 2000 compliant, or that the
software development tools, software programs and equipment we use internally
are not Year 2000 compliant. We plan on completing a contingency plan once our
inquiries are completed and to have a contingency plan in place by the end of
the third quarter of 1999. If any of our critical systems are not Year 2000
compliant or if critical suppliers from whom we obtain products and services are
not Year 2000 compliant, then Year 2000 issues could have a material adverse
effect on our business, financial condition and results of operations.
9
<PAGE> 10
LIQUIDITY AND CAPITAL RESOURCES
Since its inception through September 30, 1998, the Company's principal
sources of liquidity have been net proceeds from the sale of securities totaling
$70.8 million, DARPA research funding of approximately $19.2 million and sales
receipts of approximately $1.3 million. At September 30, 1998, the Company had
$8.3 million in cash, cash equivalents and funds in transit, $384,000 in
accounts receivable and no bank line of credit.
During the remainder of 1998 and the first half of 1999, the Company's
working capital needs will depend primarily upon its personnel costs and the
cost of inventory, as well as manufacturing startup costs and research and
development expenses related to future implementations of the MTA system. In the
first nine months of 1998, overall wages and benefits increased by about 55%
over the first nine months of 1997 to approximately $7.0 million, reflecting
both additional personnel (which increased from 75 to 102 from the end of
September 1997 to the end of September 1998) and higher wages, while total
expenditures related to inventory increased to approximately $7.6 million in the
first nine months of 1998, a $4.4 million increase over the first nine months of
1997. Personnel costs are expected to increase gradually as additional employees
are added; the level of inventory expenditures will depend upon further orders
for MTA systems and the timing of future sales and deliveries. The Company has
experienced delays in the receipt of particular components of the MTA system
that have increased the need for working capital, and the Company could
experience significant additional delays in the manufacturing process that could
further substantially increase the Company's need for working capital.
Although the Company believes its current cash resources, together with
funds anticipated from future sales of MTA systems, to be sufficient to continue
anticipated levels of business operations through 1998, the Company believes it
will need to raise additional capital by early 1999. The Company may raise
additional capital in 1998, through equity or debt financing transactions, even
if revenues are received from the sale of MTA systems when anticipated. There
can be no assurance that any additional financing will be available on
acceptable terms when needed or that such financings will not be dilutive to the
Company's shareholders.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Inapplicable.
10
<PAGE> 11
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES
On September 30, 1998, the Company raised $6,000,000 dollars through the
negotiated private sale of 600,000 shares of Common Stock and five year warrants
to purchase 121,008 shares of Common Stock, with a per share exercise price of
$10.04, subject to adjustment, to two accredited investors, Advantage Fund II
Ltd., and Koch Industries, Inc. Further information regarding the Common Stock
and the warrants is contained under "Changes in Capital" in the Notes to
Financial Statements, above. There were no sales agents or underwriters involved
in this placement. These sales were exempt from the registration provisions of
the Securities Act of 1933 pursuant to Section 4(2) thereof, based on the nature
of the offering and status of the offerees.
Pursuant to the Subscription Agreement between the Company and the
investors, the Company would be required to issue additional shares of Common
Stock to the holders if the average closing price of the Common Stock is below
$12.00 for the 15 trading days immediately prior to February 22, 1999 (or such
later date as a registration statement covering the resale of the shares of
Common Stock issued and issuable to the investors becomes effective). There are
similar adjustment periods with respect to these securities still owned by the
investors each three months thereafter through September 30, 2001.
11
<PAGE> 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<S> <C>
4.1 Waiver Agreement, dated as of December 23, 1997, between the Company
and Advantage Fund II Ltd.*
4.2 Waiver Agreement, dated as of December 23, 1997, between the Company
and Genesee Fund Limited - Portfolio B*
4.3 Waiver Agreement, dated as of June 30, 1998, between the Company and
Advantage Fund II Ltd.*
4.4 Waiver Agreement, dated as of June 30, 1998, between the Company and
Genesee Fund Limited - Portfolio B*
4.5 Subscription Agreement, dated as of September 30, 1998, by and among
the Company, Advantage Fund II Ltd. and Koch Industries, Inc.*
4.6 Amendment Agreement, dated as of September 30, 1998, by and among
the Company, Advantage Fund II Ltd. and Koch Industries, Inc.*
10.1 Agreement, dated as of October 1, 1998, by and between the Company and
Unisys Corporation.*
11. Computation of Per Share Earnings*
27. Financial Data Schedule
</TABLE>
- ----------
* Incorporated by reference to the Form 10-Q filed by the Company for the
quarter ended September 30, 1998.
(b) Reports on Form 8-K
A report on Form 8-K was filed on October 8, 1998, reporting the
Company's sale of Common Stock and warrants under "Other Events."
ITEMS 1, 3, 4 AND 5 OF PART II ARE NOT APPLICABLE AND HAVE BEEN OMITTED.
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the registrant caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TERA COMPUTER COMPANY
August 13, 1999 By: /s/ JAMES E. ROTTSOLK
-------------------------
James E. Rottsolk
Chief Executive Officer
/s/ KENNETH W. JOHNSON
-------------------------
Kenneth W. Johnson
Chief Financial Officer
/s/ PHILISSA SARGIN
-------------------------
Philissa Sargin
Chief Accounting Officer
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED FINANCIAL STATEMENTS OF TERA COMPUTER COMPANY FOR THE THREE-MONTH
PERIOD ENDED SEPTEMBER 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> SEP-30-1998
<CASH> 5,277,276
<SECURITIES> 0
<RECEIVABLES> 383,815
<ALLOWANCES> 0
<INVENTORY> 7,265,678
<CURRENT-ASSETS> 17,753,713
<PP&E> 5,946,615
<DEPRECIATION> (3,413,259)
<TOTAL-ASSETS> 20,450,121
<CURRENT-LIABILITIES> 5,136,509
<BONDS> 0
0
7,269,373
<COMMON> 66,106,324
<OTHER-SE> (58,789,109)
<TOTAL-LIABILITY-AND-EQUITY> 20,450,121
<SALES> 0
<TOTAL-REVENUES> 231,655
<CGS> 1,129,226
<TOTAL-COSTS> 1,129,226
<OTHER-EXPENSES> 3,339,599
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 30,738
<INCOME-PRETAX> (4,153,877)
<INCOME-TAX> 0
<INCOME-CONTINUING> (4,153,877)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,759,910)
<EPS-BASIC> 0.39
<EPS-DILUTED> 0.39
</TABLE>
