#       !"#2@ FIS_CASH_FLOW FIS_CASH_FLOW_2 I5 Arial5! Arial5" Arial5# Arial5$ Arial5% Arial5& Arial5' Arial5(  Arial5)  Arial5*  Arial5+ Arial5, Arial5- Arial Unicode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` @  a@ @  b@  c @  d@ e@ @  f@ @  g@ @  h@ @ i @ j @ k@ @ l@ @ m@ @ n @ o @  p@ @ q@ @ r@ @ s @ u @ w @ x@ @ y @ z@ @ { @  | @ } @ ~ @ @ @ @ @ @ @ @ @ @ @ @ @ @  @ @ @ @  @ @ @ @  @  @  @ @ @ @ @ @ @  @ @ @ @ @ @ @  @  @  @ @  @@  @  @ @  @ @ @  @ @ @ @  @  @ @ @ @ @  @  @ @ @ @ @  @ @ @ @ @ @ @ @ @ @ @  @ @ @ @ @ @ @  @ @ @ @ @ @ @ @ @@  @  @  @  @ @  @@  @  @ @  @ @ @ @ @ @ @ @ @ @  @  @  @ @ @  @  @ @ @@  @@ @ @ q@' q@' q@'q0*&'SUPERCONDUCTIVE COMPONENTS, INC.'BALANCE SHEETS 'ASSETS^SEPTEMBER 30,^DECEMBER 31, ^2002 ^2001^(UNAUDITED)'CURRENT ASSETS' Cash"$ 43,654"$ 118,083(' Accounts and notes receivableF ' Trade, less allowance for doubtful accounts of $17,0003 ' and $13,000, respectively "401,043 "365,141$ ' Contracts Receivable "59,976 "--) ' Related party receivables "11,257 "4,616 ' Employees "12,876 "15,625' Other "891 "20,814'Inventories "845,142 "857,992'Prepaid expenses "49,542 "12,851)' Total current assets"1,424,381"1,395,122'PROPERTY AND EQUIPMENT,' AT COST'' Machinery and equipment"2,360,660"2,306,128&' Furniture and fixtures "22,124 "20,424&' Leasehold improvements "346,823 "346,823"2,729,607"2,673,375-' Less accumulated depreciation"(2,093,523)"(1,919,358) "636,084 "754,017'OTHER ASSETS ' Intangibles "43,990 "43,992"'TOTAL ASSETS""$ 2,104,455""$ 2,193,131P$'The accompanying notes are an integral part of these financial statements.&&'SUPERCONDUCTIVE COMPONENTS, INC.''BALANCE SHEETS*('LIABILITIES AND SHAREHOLDERS' EQUITY*^SEPTEMBER 30,*^DECEMBER 31, +^2002 +^2001,^(UNAUDITED).'CURRENT LIABILITIES4/' Capital lease obligation, current portion/"$ 42,366/"$ 41,596A0' Capital lease obligation, shareholder, current portion 0"42,289 0"25,16151' Note payable shareholders, current portion 1"70,000 1"34,0002' Accounts payable 2"422,246 2"318,954)3' Accounts payable, shareholders 3"24,116 3"7,426$4' Accrued contract expenses 4"18,548 4"179,748*5' Accrued personal property taxes 5"40,501 5"54,3846' Accrued expenses 6"75,184 6"42,450.8' Total current liabilities 8"735,250 8"703,719&:'CAPITAL LEASE OBLIGATION, NET OF;' CURRENT PORTION ;"72,249 ;"103,8653='CAPITAL LEASE OBLIGATION, SHAREHOLDER, NET OF>' CURRENT PORTION >"26,139 >"43,267/@'NOTE PAYABLE SHAREHOLDERS, NET OF CURRENTA' PORTION A"98,270 A"84,270&C'REDEEMABLE CONVERTIBLE PREFERREDD'STOCK (Series A)3E' 10% cumulative, nonvoting, no par value,/F' $1,000 stated value, liquidation and/G' mandatory redemption at stated value0H' per share plus unpaid and accumulated/I' dividends of $230.00 and $188.33 perJ' share respectively J"121,770 J"111,176#L'COMMITMENTS AND CONTINGENCIESL"--L"--N'SHAREHOLDERS' EQUITY5O' Convertible preferred stock, Series B, 10%-P' cumulative, nonvoting, no par1Q' value, $10 stated value, optional"R' redemption at 103% R"353,792 R"333,136<S' Common stock, no par value, authorized 15,000,000?T' shares; 1,823,256 shares issued and outstandingT"6,378,216T"6,366,966%U' Additional paid-in capital U"15,877 U"47,127V' Accumulated deficitV"(5,697,108)V"(5,600,395)X"1,050,777X"1,146,8340Z'TOTAL LIABILITIES AND SHAREHOLDERS' EQUITYZ"$ 2,104,455Z"$ 2,193,131P\'The accompanying notes are an integral part of these financial statements.&^'SUPERCONDUCTIVE COMPONENTS, INC._'STATEMENTS OF OPERATIONS8`'THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 AND3a'NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001c'(UNAUDITED)e^THREE MONTHS ENDEDe^THREE MONTHS ENDEDe^NINE MONTHS ENDEDe^NINE MONTHS ENDEDf^SEPTEMBER 30,f^SEPTEMBER 30,f^SEPTEMBER 30,f^SEPTEMBER 30, g^2002 g^2001 g^2002 g^2001i'SALES REVENUE i"794,803i"$ 820,044i"$ 2,151,396i"$ 2,511,154j'CONTRACT RESEARCH REVENUE j"68,376 j"71,769 j"211,909 j"345,910 l"863,179 l"891,813l"2,363,305l"2,857,064n'COST OF SALES REVENUE n"518,479 n"513,250n"1,470,482n"1,585,659o'COST OF CONTRACT RESEARCH o"71,544 o"42,369 o"210,005 o"266,055 q"590,023 q"555,619q"1,680,487q"1,851,714s'GROSS MARGIN s"273,156 s"336,194 s"682,818s"1,005,350)u'GENERAL AND ADMINISTRATIVE EXPENSES u"200,983 u"244,708 u"644,065 u"652,320$w'SALES AND PROMOTIONAL EXPENSES w"63,088 w"52,249 w"157,576 w"178,344#y'INCOME (LOSS) FROM OPERATIONS y"9,085 y"39,237y"(118,823) y"174,686{'OTHER INCOME (EXPENSE)|' Interest, net |"(6,679) |"(3,291)|"(15,689)|"(13,571)}' Insurance proceeds}"--}"-- }"39,083}"--~' Miscellaneous, net ~"(428) ~"(298) ~"(1,284) ~"(249) "(7,107) "(3,589) "22,110"(13,820)%'INCOME (LOSS) BEFORE INCOME TAX "1,978 "35,648"(96,713) "160,866'INCOME TAX EXPENSE"--"--"--"--'NET INCOME (LOSS) "1,978 "35,648"(96,713) "160,866"'DIVIDENDS ON PREFERRED STOCK "(6,061) "(9,360)"(24,781)"(28,081))'ACCRETION OF REDEEMABLE CONVERTIBLE' PREFERRED (SERIES A)"-- "(3,881) "(6,469) "(9,737)('INCOME (LOSS) APPLICABLE TO COMMON' SHARES"$ (4,083)"$ 22,407"$ (127,963)"$ 123,048-'EARNINGS PER SHARE - BASIC AND DILUTIVE' (Note 2)('NET INCOME (LOSS) PER COMMON SHARE' Basic"$ (0.00)"$ 0.01"$ (0.07)"$ 0.07' Dilutive"$ (0.00)"$ 0.01"$ (0.07)"$ 0.07)'WEIGHTED AVERAGE SHARES OUTSTANDING' Basic"1,823,256"1,821,926"1,823,256"1,820,618' Dilutive"1,823,256"1,821,926"1,823,256"1,820,618P'The accompanying notes are an integral part of these financial statements.&'SUPERCONDUCTIVE COMPONENTS, INC.'STATEMENTS OF CASH FLOWS3'NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001'(UNAUDITED) ^2002 ^2001*'CASH FLOWS FROM OPERATING ACTIVITIES' Net income (loss)"$ (96,713)"$ 160,8660'Adjustments to reconcile net income (loss)4' to net cash used in operating activities:' Depreciation "174,165 "156,171' Amortization "2,228 "1,838!' Inventory reserve"--"(20,059)/' Provision for doubtful accounts "4,000 "(9,000)<' Changes in operating assets and liabilities:3' (Increase) decrease in assets:-' Accounts receivable"(72,596)"(41,052)%' Inventories "12,850"(243,637)*' Prepaid expenses"(36,691) "28,617&' Other assets "(2,227) "(4,550)8' Increase (decrease) in liabilities:*' Accounts payable "119,982 "124,932*' Accrued expenses"(142,349) "123,9660' Total adjustments "59,362 "117,226W' Net cash provided by (used in) operating activities"(37,351) "278,092*'CASH FLOWS FROM INVESTING ACTIVITIES.' Purchases of property and equipment"(56,232)"(151,732)I' Net cash used in investing activities"(56,232)"(151,732)*'CASH FLOWS FROM FINANCING ACTIVITIES<' Proceeds (payments) on note payable, shareholders "50,000"(14,000):' Principal payments on capital lease obligations"(30,846)"(26,473)9' Proceeds from exercise of common stock options"-- "4,125W' Net cash provided by (used in) financing activities "19,154"(36,348)P'The accompanying notes are an integral part of these financial statements.&'SUPERCONDUCTIVE COMPONENTS, INC.*'STATEMENTS OF CASH FLOWS (CONTINUED)3'NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001'(UNAUDITED) ^2002 ^2001%'NET INCREASE (DECREASE) IN CASH"(74,429) "90,012 'CASH - Beginning of period "118,083 "202,406'CASH - End of period"$ 43,654"$292,418&'SUPPLEMENTAL DISCLOSURES OF CASH' FLOW INFORMATION/' Cash paid during the years for:' Interest"$ 8,699"$ 14,135' Income taxes"$ --"$ --)'SUPPLEMENTAL DISCLOSURES OF NONCASH-' INVESTING AND FINANCING ACTIVITIESJ' Common stock was issued as partial payment for accounts payable"$ --"$ 19,000@' Property and equipment was purchased by capital lease"$ --"$ 97,911O'The accompanying notes are an integral part of these financial statements 6Sheet1 6Sheet2 6Sheet3d_ Arial  O4!*d"""dFM3FM3 PropertyWK3WK3 Property  H GH HGH HCMHdrH