Superconductor Technologies Inc. Announces Revised Accounting Treatment for Non-cash Warrants.Business Editors SANTA BARBARA Santa Barbara (săn'tə bär`brə, –bərə), city (1990 pop. 85,571), seat of Santa Barbara co., S Calif., on the Pacific Ocean; inc. 1850. , Calif.--(BUSINESS WIRE)--Nov. 13, 2000 Previously Announced Fiscal 2000 Three and Nine Month Results Revised in 10-Q Filing to Reflect Revised Accounting Treatment Superconductor A material that has little resistance to the flow of electricity. Traditional superconductors operate at absolute zero (-459.67 degrees Fahrenheit or -273.15 degrees Celsius). Experiments in the 1980s raised the temperature to -321 degrees Fahrenheit. Technologies, Inc. (Nasdaq: SCON SCON Server CONsolidation SCON Serial Port Control Register (Intel 8051 Microcontroller) SCON Scheme Contracted-Out Number (UK) SCON Student Consultant (University of New Mexico) ) today announced that, based on discussions with its auditors AUDITORS, practice. Persons lawfully appointed to examine and digest accounts referred to them, take down the evidence in writing, which may be lawfully offered in relation to such accounts, and prepare materials on which a decree or judgment may be made; and to report the whole, together , it has revised its accounting treatment of the warrants vested vested adj. referring to having an absolute right or title, when previously the holder of the right or title only had an expectation. Examples: after 20 years of employment Larry Loyal's pension rights are now vested. (See: vest, vested remainder) in the third quarter upon receipt of the previously announced $7.8 million noncancellable purchase order from U.S. Cellular U.S. Cellular (NYSE: USM) is a super-regional cellular telephone provider, serving 5.8 million customers in 189 markets in 26 U.S. states. The company was created in 1983 as a subsidiary of Telephone and Data Systems, Inc. Since April 2000, John E. . The revised accounting does not affect cash flows for the current or future periods and does not impact the reported results of operations for any prior periods. In connection with the revised accounting, the Company determined that the cost of providing products under the purchase order, plus the non-cash $5.6 million fair value of the 312,000 vested warrants, exceeds contract revenues by $5.3 million and, accordingly, has accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. a loss for the excess amount as a charge to cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold in the 2000 third quarter. In the October October: see month. 25, 2000 press release, the loss on the purchase order from U.S. Cellular, resulting primarily from the non-cash value of the warrant, was not reflected in the results of operations for the periods because the warrant charge was to be amortized as the systems were delivered over future quarters. As a result of the revised accounting treatment, the Company's net loss increased to $9.3 million, or $0.53 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to the previously reported loss of $4.1 million, or $0.23 per diluted share for the 2000 third quarter. The revised accounting does not affect cash flows for the current or future periods and does not impact the reported results of operations for any prior periods. The $5.6 million estimated value of the warrant, which represents future sales discounts, will be reflected as a reduction to revenues recognized from U.S. Cellular over the next nine quarters. It will not affect future operating results because the entire loss is being accrued in the current quarter. On October 25, 2000, the Company announced its results of operations for the three and nine months ended September September: see month. 30, 2000 based upon a preliminary accounting treatment for the vesting Vesting The process by which employees accrue non-forfeitable rights over employer contributions that are made to the employee's qualified retirement plan account. Notes: of the warrants issued under the August 1999 U.S. Cellular supply and warrant agreement. The revised accounting treatment has been reflected in the financial statements included in the Company's Third Quarter Report on Form 10-Q Form 10-Q See 10-Q. , which was filed today with the Securities and Exchange Commission. As previously reported, U.S. Cellular's aggressive implementation of SuperFilter(R) Systems further validates STI's technology as a critical element for current and future generation wireless networks. The Company's total backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. is now $8.8 million, of which $1.0 million is shippable in the fourth quarter of 2000, with more shippable orders still expected before quarter end. During the third quarter of 2000, STI STI systolic time intervals. raised $37.5 million in a private equity investment by RGC RGC Royal Government of Cambodia RGC Retinal Ganglion Cell RGC Responsible Gambling Council RGC Rio Grande City (Texas) RGC Routing Group Connector (Microsoft) International Investors LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control with Chase Securities Inc. acting as financial advisor and placement agent in the transaction. During the quarter, STI also continued to focus on the development of new products to meet the evolving needs of its customers and the wireless market. The Company announced the new SuperFilter PCS (1) (Personal Communications Services) Refers to wireless services that emerged after the U.S. government auctioned commercial licenses in 1994 and 1995. This radio spectrum in the 1. family of products at the PCIA PCIA Personal Communications Industry Association PCIA Personal Care Ingredients Asia PCIA Parent-Child Interaction Assessment (structured direct observation procedure) PCIA Professional Concepts Insurance Agency, Inc. show in Chicago. The PCS product family is another important step in the product strategy of serving all major mobile wireless markets, capitalizing on the demanding spectrum robustness needed for upcoming 3G (broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). ) networks. STI's SuperFilter(R) system utilizes high-temperature superconducting su·per·con·duct·ing adj. Having, exhibiting, or capable of superconductivity: "a revolutionary superconducting magnetic propulsion system" Colin Nickerson. technology, along with proprietary cryogenic cryogenic /cry·o·gen·ic/ (-jen´ik) producing low temperatures. cry·o·gen·ic adj. 1. Relating to or producing low temperatures. 2. cooling, to create a front-end filter and amplifier system utilized in wireless base stations to enhance their performance. These enhancements include extending the range of the base station, lowering dropped calls Dropped call is the common term for a wireless mobile phone call that is terminated unexpectedly as a result of technical reasons. Areas where users experience a large number of dropped calls are commonly referred to as dead zones. , enabling otherwise difficult handoffs, improving call quality and, in general, improving customer service and cell site traffic for the wireless service provider. Superconductor Technologies Inc. (NASDAQ: SCON) is a leading developer and manufacturer of superconducting products for wireless communications wireless communications System using radio-frequency, infrared, microwave, or other types of electromagnetic or acoustic waves in place of wires, cables, or fibre optics to transmit signals or data. and wireless Internet access See how to access the Internet. . The Company has additional applications in government communications and cryogenic markets. With headquarters in Santa Barbara, CA, Superconductor Technologies Inc. designs and manufactures systems for high-performance wireless applications. Additional information on Superconductor Technologies may be obtained by visiting the Company's web site at http://www.suptech.com. SuperFilter(R) is a registered trademark of Superconductor Technologies Inc. All other marks are properties of their respective owners.
SUPERCONDUCTOR TECHNOLOGIES INC.
STATEMENT OF OPERATIONS
3 Months Results
(Unaudited)
September 30, September 30, October 2,
2000 2000 1999
Revised Originally Reported
Net revenues:
Commercial product
revenues $1,561,000 $1,561,000 $659,000
Government
contract
revenues 1,040,000 1,040,000 1,381,000
Less non-cash charge
for warrants
and other
discounts (316,000) (316,000) (70,000)
Sub license
royalties - - -
---------- -------- ---------
Total net
revenues 2,285,000 2,285,000 1,970,000
---------- --------- ----------
Costs and expenses:
Cost of commercial
product revenues 7,862,000 2,625,000 1,953,000
Contract research
and development 913,000 913,000 897,000
Other research and
development 749,000 749,000 392,000
Selling, general and
administrative 2,053,000 2,053,000 1,541,000
Non-cash warrant
and other
non-recurring
charges - - -
---------- ---------- ----------
Total costs and
expenses 11,577,000 6,340,000 4,783,000
---------- ---------- ----------
Loss from
operations (9,292,000) (4,055,000) (2,813,000)
Interest income 41,000 41,000 12,000
Interest expense (67,000) (67,000) (59,000)
---------- ---------- -----------
Net loss (9,318,000) (4,081,000) (2,860,000)
Less:
Redeemable
preferred stock
dividends - - (264,000)
Deemed distribution
attributable to the
inducement to
convert preferred
stock and
beneficial
conversion feature - - (241,000)
---------- ---------- -----------
Net loss available
to common
stockholders ($9,318,000) ($4,081,000) ($3,365,000)
=========== =========== ===========
Basic and diluted
loss per common
share ($0.53) ($0.23) ($0.43)
=========== =========== ===========
Weighted average
number of common
shares
outstanding 17,692,751 17,692,751 7,750,749
=========== =========== ===========
SUPERCONDUCTOR TECHNOLOGIES INC.
STATEMENT OF OPERATIONS
9 Months Results
(Unaudited)
September 30, September 30, October 2,
2000 2000 1999
Revised Originally Reported
Net revenues:
Commercial product
revenues $4,166,000 $4,166,000 $1,325,000
Government contract
revenues 3,308,000 3,308,000 3,674,000
Less non-cash
charge for
warrants and
other
discounts (1,294,000) (1,294,000) (70,000)
Sub license
royalties 10,000 10,000 10,000
---------- ----------- -----------
Total net
revenues 6,190,000 6,190,000 4,939,000
---------- ----------- -----------
Costs and expenses:
Cost of commercial
product revenues 12,007,000 6,770,000 4,655,000
Contract research
and development 2,676,000 2,676,000 2,425,000
Other research and
development 1,873,000 1,873,000 1,324,000
Selling, general
and
administrative 5,946,000 5,946,000 4,223,000
Non-cash warrant
and other
non-recurring
charges 609,000 609,000 -
---------- ---------- ----------
Total costs and
expenses 23,111,000 17,874,000 12,627,000
---------- ---------- -----------
Loss from
operations (16,921,000) (11,684,000) (7,688,000)
Interest income 215,000 215,000 13,000
Interest expense (453,000) (453,000) (213,000)
---------- ---------- -----------
Net loss (17,159,000) (11,922,000) (7,888,000)
Less:
Redeemable
preferred
stock dividends - - (634,000)
Deemed distribution
attributable to the
inducement to convert
preferred stock
and beneficial
conversion
feature (1,548,000) (1,548,000) (366,000)
---------- ----------- ----------
Net loss available
to common
stockholders ($18,707,000) ($13,470,000) ($8,888,000)
============ ============ ============
Basic and diluted
loss per common
share ($1.20) ($0.87) ($1.15)
============ ============ ============
Weighted average
number of common
Shares
outstanding 15,525,933 15,525,933 7,741,425
============ ============ ============
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