MIRA INFORM REPORT

Report Date :

19.10.2013

IDENTIFICATION DETAILS

Name :	SPIRE CORPORATION

Registered Office :	One Patriots Park, Bedford, MA 01730-2396

Country :	United States

Financials (as on) :	31.12.2012

Date of Incorporation :	24.09.1969

Legal Form :	Public Parent Company

Line of Business :	· developer, manufacturer and marketer of customized turn-key solutions for the solar industry, including individual pieces of manufacturing equipment and turn-key lines for cell and module production and testing. supplier of the manufacturing equipment and technology needed to produce solar photovoltaic modules.

No. of Employees :	113

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear

NOTES:

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – March 31^st 2013

Country Name

Previous Rating

(31.12.2012)

Current Rating

(31.03.2013)

United States

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

united StaTes ECONOMIC OVERVIEW

The US has the largest and most technologically powerful economy in the world, with a per capita GDP of $49,800. In this market-oriented economy, private individuals and business firms make most of the decisions, and the federal and state governments buy needed goods and services predominantly in the private marketplace. US business firms enjoy greater flexibility than their counterparts in Western Europe and Japan in decisions to expand capital plant, to lay off surplus workers, and to develop new products. At the same time, they face higher barriers to enter their rivals' home markets than foreign firms face entering US markets. US firms are at or near the forefront in technological advances, especially in computers and in medical, aerospace, and military equipment; their advantage has narrowed since the end of World War II. The onrush of technology largely explains the gradual development of a "two-tier labor market" in which those at the bottom lack the education and the professional/technical skills of those at the top and, more and more, fail to get comparable pay raises, health insurance coverage, and other benefits. Since 1975, practically all the gains in household income have gone to the top 20% of households. Since 1996, dividends and capital gains have grown faster than wages or any other category of after-tax income. Imported oil accounts for nearly 55% of US consumption. Crude oil prices doubled between 2001 and 2006, the year home prices peaked; higher gasoline prices ate into consumers' budgets and many individuals fell behind in their mortgage payments. Oil prices climbed another 50% between 2006 and 2008, and bank foreclosures more than doubled in the same period. Besides dampening the housing market, soaring oil prices caused a drop in the value of the dollar and a deterioration in the US merchandise trade deficit, which peaked at $840 billion in 2008. The sub-prime mortgage crisis, falling home prices, investment bank failures, tight credit, and the global economic downturn pushed the United States into a recession by mid-2008. GDP contracted until the third quarter of 2009, making this the deepest and longest downturn since the Great Depression. To help stabilize financial markets, in October 2008 the US Congress established a $700 billion Troubled Asset Relief Program (TARP). The government used some of these funds to purchase equity in US banks and industrial corporations, much of which had been returned to the government by early 2011. In January 2009 the US Congress passed and President Barack OBAMA signed a bill providing an additional $787 billion fiscal stimulus to be used over 10 years - two-thirds on additional spending and one-third on tax cuts - to create jobs and to help the economy recover. In 2010 and 2011, the federal budget deficit reached nearly 9% of GDP. In 2012 the federal government reduced the growth of spending and the deficit shrank to 7.6% of GDP. Wars in Iraq and Afghanistan required major shifts in national resources from civilian to military purposes and contributed to the growth of the budget deficit and public debt. Through 2011, the direct costs of the wars totaled nearly $900 billion, according to US government figures. US revenues from taxes and other sources are lower, as a percentage of GDP, than those of most other countries. In March 2010, President OBAMA signed into law the Patient Protection and Affordable Care Act, a health insurance reform that will extend coverage to an additional 32 million American citizens by 2016, through private health insurance for the general population and Medicaid for the impoverished. Total spending on health care - public plus private - rose from 9.0% of GDP in 1980 to 17.9% in 2010. In July 2010, the president signed the DODD-FRANK Wall Street Reform and Consumer Protection Act, a law designed to promote financial stability by protecting consumers from financial abuses, ending taxpayer bailouts of financial firms, dealing with troubled banks that are "too big to fail," and improving accountability and transparency in the financial system - in particular, by requiring certain financial derivatives to be traded in markets that are subject to government regulation and oversight. In December 2012, the Federal Reserve Board announced plans to purchase $85 billion per month of mortgage-backed and Treasury securities in an effort to hold down long-term interest rates, and to keep short term rates near zero until unemployment drops to 6.5% from the December rate of 7.8%, or until inflation rises above 2.5%. Long-term problems include stagnation of wages for lower-income families, inadequate investment in deteriorating infrastructure, rapidly rising medical and pension costs of an aging population, energy shortages, and sizable current account and budget deficits - including significant budget shortages for state governments.

Source : CIA

Company name & address

Spire Corporation

One Patriots Park

Bedford, MA 01730-2396

United States

Tel: 781-275-6000

Fax: 781-275-7470

Toll Free: 800-510-4815

Web: www.spirecorp.com

Synthesis

Employees: 113

Company Type: Public Parent

Corporate Family: 4 Companies

Traded: Over The Counter:SPIR

Incorporation Date: 24-Sep-1969

Auditor: McGladrey LLP

Financials in: USD (Millions)

Fiscal Year End: 31-Dec-2012

Reporting Currency: US Dollar

Annual Sales: 22.1 1

Net Income: (1.9)

Total Assets: 16.6 2

Market Value: 4.2 (27-Sep-2013)

Business Description

Spire Corporation (Spire), develops , manufacture and markets customized turn-key solutions for the solar industry, including individual pieces of manufacturing equipment and turn-key lines for cell and module production and testing. The Company is a supplier of the manufacturing equipment and technology needed to produce solar photovoltaic modules. In addition, Spire provides photovoltaic systems for grid connected applications in the commercial markets. The Company's biomedical business provides value-added surface treatments to manufacturers of orthopedic and other medical devices and performs sponsored research programs into practical applications of biomedical and biophotonic technologies. On March 9, 2012, the Company completed the sale of its semiconductor business. For the six months ended 30 June 2013, Spire Corporation revenues decreased 52% to $6.8M. Net loss before extraordinary items increased from $1.5M to $4.4M. Revenues reflect Sales of goods decrease of 75% to $2.4M. Higher net loss reflects Foreign exchange gain (loss) decrease from $3K (income) to $9K (expense). Basic Earnings per Share excluding Extraordinary Items decreased from -$0.17 to -$0.48.

Industry

Industry Semiconductor and Other Electronic Component Manufacturing

ANZSIC 2006: 2429 - Other Electronic Equipment Manufacturing

ISIC Rev 4: 2610 - Manufacture of electronic components and boards

NACE Rev 2: 2611 - Manufacture of electronic components

NAICS 2012: 333242 - Semiconductor Machinery Manufacturing

UK SIC 2007: 2611 - Manufacture of electronic components

US SIC 1987: 3674 - Semiconductors and Related Devices

Key Executives

(Emails Available)

Name	Title
Roger G. Little	Chairman of the Board, President, Chief Executive Officer
Robert Lieberman	Chief Financial Officer and Treasurer
Rodger W. LaFavre	Chief Operating Officer
Jeffrey Chasse	Controller
Mark C Willingham	Chief Marketing Officer, Vice President

Financial Summary

As of 30-Jun-2013

Key Ratios	Company	Industry
Current Ratio (MRQ)	1.42	3.16
Quick Ratio (MRQ)	0.62	1.74
Debt to Equity (MRQ)	0.18	0.29
Sales 5 Year Growth	-9.82	6.76
Net Profit Margin (TTM) %	-52.07	8.43
Return on Assets (TTM) %	-44.62	7.34
Return on Equity (TTM) %	-112.01	12.34

Stock Snapshot

Traded: Over The Counter: SPIR

As of 27-Sep-2013

Financials in: USD

Recent Price	0.45	EPS	-0.56
52 Week High	0.99	Price/Sales	0.19
52 Week Low	0.11	Price/Book	0.55
Avg. Volume (mil)	0.02	Beta	1.57
Market Value (mil)	4.15

	Price % Change	Rel S&P 500%
4 Week	67.04%	61.24%
13 Week	-19.45%	-23.52%
52 Week	-14.91%	-27.21%
Year to Date	-9.98%	-24.11%

1 - Profit & Loss Item Exchange Rate: USD 1 = USD 1

2 - Balance Sheet Item Exchange Rate: USD 1 = USD 1

Corporate Overview

Location

One Patriots Park

Bedford, MA, 01730-2396

Middlesex County

United States

Tel: 781-275-6000

Fax: 781-275-7470

Toll Free Tel: 800-510-4815

Web: www.spirecorp.com

Quote Symbol - Exchange

SPIR - Over The Counter

Sales USD(mil): 22.1

Assets USD(mil): 16.6

Employees: 113

Fiscal Year End: 31-Dec-2012

Industry: Semiconductors

Incorporation Date: 24-Sep-1969

Company Type: Public Parent

Quoted Status: Quoted

Chairman of the Board, President, Chief Executive Officer:

Roger G. Little

Industry Codes

ANZSIC 2006 Codes:

2429 - Other Electronic Equipment Manufacturing

2293 - Metal Coating and Finishing

6910 - Scientific Research Services

2469 - Other Specialised Machinery and Equipment Manufacturing

ISIC Rev 4 Codes:

2610 - Manufacture of electronic components and boards

2819 - Manufacture of other general-purpose machinery

7210 - Research and experimental development on natural sciences and engineering

2592 - Treatment and coating of metals; machining

NACE Rev 2 Codes:

2611 - Manufacture of electronic components

7219 - Other research and experimental development on natural sciences and engineering

2829 - Manufacture of other general-purpose machinery n.e.c.

2561 - Treatment and coating of metals

NAICS 2012 Codes:

333242 - Semiconductor Machinery Manufacturing

333249 - Other Industrial Machinery Manufacturing

541712 - Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)

332812 - Metal Coating, Engraving (except Jewelry and Silverware), and Allied Services to Manufacturers

US SIC 1987:

3674 - Semiconductors and Related Devices

8731 - Commercial Physical and Biological Research

3559 - Special Industry Machinery, Not Elsewhere Classified

3479 - Coating, Engraving, and Allied Services, Not Elsewhere Classified

UK SIC 2007:

2611 - Manufacture of electronic components

7219 - Other research and experimental development on natural sciences and engineering

2829 - Manufacture of other general-purpose machinery n.e.c.

2561 - Treatment and coating of metals

Business Description

Spire Corporation (Spire), incorporated on September 24, 1969, develops , manufacture and markets customized turn-key solutions for the solar industry, including individual pieces of manufacturing equipment and turn-key lines for cell and module production and testing. The Company is a supplier of the manufacturing equipment and technology needed to produce solar photovoltaic modules. In addition, Spire provides photovoltaic systems for grid connected applications in the commercial markets. The Company's biomedical business provides value-added surface treatments to manufacturers of orthopedic and other medical devices and performs sponsored research programs into practical applications of biomedical and biophotonic technologies. On March 9, 2012, the Company completed the sale of its semiconductor business.

The Company's core business is in the solar market, where the Company provides individual pieces of manufacturing equipment, turn-key cell and module lines, cell supply, solar factory management services, and solar systems. The Company's solar business accounted 83% of the Company's revenues during the year ended December 31, 2011. The Company's solar systems business provides clients with grid-connected distributed photovoltaic systems and custom modules to meet their demand for solar electricity. The business is primarily a system design and engineering service. Through the Company's Spire Biomedical subsidiary, the Company provides medical device surface treatment processes for performance improvement of orthopedic and cardiovascular devices, enhancing properties, such as wears resistance, infection resistance and thromboresistance.

More Business Descriptions

Establishments primarily engaged in manufacturing heating equipment, except electric and warm air furnaces, including gas, oil, and stoker coal fired equipment for the automatic utilization of gaseous, liquid, and solid fuels.

Spire Corporation (Spire) is a diversified technology company. It is one of the leading global solar companies providing capital equipment to manufacture PV modules and cells, turnkey solar manufacturing lines and PV systems. It also carries out biomedical business, which provides value-added surface treatments to manufacturers of orthopedic and other medical devices. The company divided its operations into three reportable segments, namely, Solar (Spire Solar), Biomedical (Spire Biomedical) and Corporate. Spire Solar segment offers capital equipment and turnkey solar solutions to manufacture photovoltaic modules and cells. It develops manufacturing equipment and turnkey lines for cell and module production and testing, concentrator cell and LED fabrication, and PV system integration. Its major solar equipment products include One-Sun solar cell tester, automated PV module laminators; automated solar cell assembly; and solar simulators and PV module QA testers. The companyâ€™s solar production lines are Spi-Line turnkey module lines; fully automated high efficiency cell lines; and Spi-Line turnkey solar manufacturing lines. The company offers capital equipment and turnkey solar solutions to manufacture photovoltaic modules and cells. Major Spire solar equipment products include One-Sun solar cell tester, automated PV module laminators; automated solar cell assembly; and solar simulators and PV module QA testers. The companyâ€™s solar production lines are Spi-Line turnkey module lines; fully automated high efficiency cell lines; and Spi-Line turnkey solar manufacturing lines. Spire Biomedical provides advanced medical device surface treatment processes. The company provides these processes for the performance improvement of orthopedic and cardiovascular devices. It enhances properties such as wear resistance, infection resistance and thromboresistance. It improves radiopacity and provides conductive pathways. Its major processes include Spi-Argent, A nanocrystalline silver-based antimicrobial coating that can be applied to polymeric, ceramic or metallic medical devices; Spi-Ceramic, a state-of-the-art ceramic film that is applied to polymers, metals, and ceramics; Spi-Met, a uniform, adherent, thin metal film applied at low temperature to polymers, metals, or ceramics; Spi-Sight, metallic coatings applied to polymers, metals, and ceramics to provide radiopaque markers; and IonTite hydroxyapatite coatings for orthopedic and dental applications. Spire Solar offers individual equipment to existing silicon module manufacturers, lamination and testing equipment to thin film manufacturers. Solar segment of the company contributed approximately 69% of the companyâ€™s total revenue for the fiscal year ended 2012. Spire Biomedical provides advanced medical device surface treatment processes. These processes are provided for the performance improvement of orthopedic and cardiovascular devices, enhancing properties such as wear resistance, infection resistance and thromboresistance. Spireâ€™s advanced medical device coatings enhance tissue and bone growth. It improves radiopacity and provides conductive pathways. Spire utilizes advanced ion beam assisted deposition (IBAD) technology to treat products including catheters, guide wires, stents, grafts and other specialty medical devices. Biomedical segment of the company contributed approximately 31% of the companyâ€™s total revenue for the fiscal year ended 2012. Spireâ€™s (R&D) activities focus on the development of new products and technologies with the help of its scientific and technological expertise. The company protects its technology with the help of patents and trademarks. It holds about 10 issued US patents, 9 pending patents and 2 pending foreign patents. The company spent $0.23m on itâ€™s the R&D activity, which accounted for 1% of the total revenue of the company of fiscal year ended 2012. Spireâ€™s expertise designed the platform for the development of manufacturing equipment and turkey lines. The companyâ€™s equipment has been installed in approximately 200 factories in 50 countries across the world. Spire holds many of the leading solar manufacturers as its customers including First Solar, Suntech, JA Solar, Trina Solar Energy, Solar Frontier, Samsung, Martifer Solar S.A. and LDK Solar. Spire sells its products and services in the worldwide market with the help of independent sales representatives and independent distributors. The company also enters into various supply agreements with other companies for selling its products. Geographically, the company divided its revenue into four regions, namely, the US, Europe/ N. Africa, Asia and Rest of the world. The US region contributed 47.2% of total revenue of the company for the fiscal year ended 2012, followed by Europe/ N. Africa (16.4%), Asia (36.1%) and rest of the world (0.3%).

Spire Corporation (Spire) is a solar company that develops, manufactures, and markets customized turn-key solutions for the solar industry. Its major products include photovoltaic (PV) modules and cells, solar manufacturing lines and PV systems. The company also undertakes biomedical business through its subsidiary Spire Biomedical, which provides advanced medical device surface treatment processes to manufacturers of orthopedic and other medical devices. The company's solar systems are deployed in more than 50 countries around the world. Spire also provides photovoltaic systems for grid connected applications in the commercial markets. The company is headquartered in Massachusetts, the US.Spire focuses on sturdy R&D activities that help it in cost reduction and process improvement, quality assurance, and process control. Its R&D initiatives revolve around developing new manufacturing methods, improving existing manufacturing methods, developing new products, and improving the existing products.The company reported revenues of (U.S. Dollars) USD 22.11 million during the fiscal year ended December 2012, a decrease of 62.36% from 2011. The operating loss of the company was USD 6.60 million during the fiscal year 2012, as compared to an operating loss of USD 0.84 million during 2011. The net loss of the company was USD 1.86 million during the fiscal year 2012, as compared to a net loss of USD 1.48 million during 2011.

Spire Corporation is a diversified technology company that produces solar energy systems, biomedical devices and optoelectronic components. The company also serves telecommunications and defense industries worldwide with innovative products and services based upon a common technology platform. Its applies science and research to develop products that generate renewable energy, improve health care, enhance security and deliver advanced solutions to businesses. Spire Corporation produces photovoltaic systems, custom modules, hemodialysis products, wafer design and circuit fabrication. One of the company's subsidiaries, Spire Biomedical, manufactures medical devices and provides advanced medical device surface treatment processes. Spire Biomedical has been in the business of surface engineering services for improving the performance of orthopedic and cardiovascular medical devices. The company was founded in 1969 and is headquartered in Bedford, Mass.

Product Codes

Product Code	Product Description
ZZZ-HC	Parent/Holding company

Brand/Trade Names

Solar Breeder - Machinery

Financial Data

Financials in:	USD(mil)

Revenue:	22.1
Net Income:	-1.9
Assets:	16.6
Long Term Debt:	0.0
Total Liabilities:	9.2
Working Capital:	0.0

Date of Financial Data:	31-Dec-2012

1 Year Growth

-62.4%

-31.2%

Market Data

Quote Symbol:	SPIR
Exchange:	Over The Counter
Currency:	USD
Stock Price:	0.5
Stock Price Date:	09-27-2013
52 Week Price Change %:	-14.9
Market Value (mil):	4,152.8

SEDOL:	2834597
ISIN:	US8485651074

Equity and Dept Distribution:
Common Stock $.01 Par, 03/11, 20M auth., 8,360,133 issd. & O/S. Insiders 26.94%.

Key Corporate Relationships

Auditor:	McGladrey LLP

Auditor:	McGladrey LLP

Additional Information
ABI Number:	003523230

Strengths/Weaknesses

(SWOT)

Helpful
to achieving the objective

Harmful
to achieving the objective

Internal Origin
(attributes of the organization)

Strengths

· Industry Recognitions

· Strong Research and Development Activities

· Wide Range of Markets Served

Weaknesses

· Dependence on a Few Customers

· History of Operating Losses

External Origin
(attributes of the environment)

Opportunities

· Expansion in the Emerging Markets

· Strategic Divestiture

· Growing Solar PV Market

Threats

· Technological Changes

· Stiff Competition

Overview

Spire Corporation (Spire) is one of the leading global solar companies, which develops manufactures and markets highly engineered products and services in two business areas, namely, solar energy and biomedical processing services. Through its broad product portfolio it serves a diverse range of markets, ensuring its position and brand image in its operating market. The focused research and development capabilities of the company enable it delivering leading products, solutions and services. However, the strict regulatory environment might hider its growth, if the company is fails to comply with applicable laws and regulations.

Strengths

Industry Recognitions

Spire has received numerous awards and recognitions in the past, which improve the brand identity of the company. In 2011, the company won the Solar Industry Award for "Best Turnkey Solar Factory Provider" by Solar, a PV Management Magazine. In February 2010, Spire was ranked number nine on the Boston Business Journal's Book of Lists 2010 as one of the fastest-growing public companies in Massachusetts over the last three years. Earlier, Spire has won the SOLAR PV Management Magazine's Turnkey Company of the Year award as recognition of its whole value chain. It was also ranked 4th of the top 50 companies on The Boston Globeâ€™s Globe 100. These awards and recognition enhance company's image and offers a strong customer base.

Strong Research and Development Activities

The focused research and development (R&D) activities enabled Spire to deliver some of the leading products, solutions and services that meet its customers' critical needs. Spire has well-equipped labs and highly developed manufacturing facilities complimented by a team of skilled scientists and engineers. The R&D cost incurred was $0.23m, $0.77m, and $1.2m in 2012, 2011 and 2010, respectively. As of December 31, 2012, the company has developed an intellectual property assets portfolio of about 19 patents, which contains 10 issued US patents, 7 patents pending in the US and two pending foreign patents. In August 2011, the US Patent and Trademark Office issued the company US patent number 7,955,965 entitled 'Nanophotovoltaic Devicesâ€™. The device is designed to be utilized on biological cells (cancer) and can control their growth. Such activities provide a competitive edge for the company over its competitors.

Wide Range of Markets Served

Spire serves various markets that diversify its risk related to a particular market, ensuring its position and brand image in the market. The company carries out the development, manufacture and marketing of highly engineered products and services for a wide range of customers and commercial markets. The company offers capital equipment and turnkey solar solutions to manufacture photovoltaic modules and cells. Major Spire Solar Equipment products include One-Sun solar cell tester, automated PV module laminators; automated solar cell assembly; and solar simulators and PV module QA testers. The companyâ€™s solar production lines are Spi-Line turnkey module lines; fully automated high efficiency cell lines; and Spi-Line turnkey solar manufacturing lines. Spire Biomedical provides advanced medical device surface treatment processes. The company provides these processes for the performance improvement of orthopedic and cardiovascular devices. It enhances properties such as wear resistance, infection resistance and thromboresistance. It improves radiopacity and provides conductive pathways. Its major processes include Spi-Argent, a nanocrystalline silver-based antimicrobial coating that can be applied to polymeric, ceramic or metallic medical devices; Spi-Ceramic, a state-of-the-art ceramic film that is applied to polymers, metals, and ceramics; Spi-Met, a uniform, adherent, thin metal film applied at low temperature to polymers, metals, or ceramics; Spi-Sight, metallic coatings applied to polymers, metals, and ceramics to provide radiopaque markers; and IonTite hydroxyapatite coatings for orthopedic and dental applications. The Solar segment of the company contributed approximately 69% of the companyâ€™s total revenue for the fiscal year ended 2012 followed by Biomedical segment (31%). This diversification across the end markets served limits the negative effects of concentration in any particular economy.

Weaknesses

Dependence on a Few Customers

The company depends on a limited number of customers for a substantial portion of its net sales, which makes it vulnerable to associated market risks. In 2012, revenues from the delivery of solar equipment to First Solar, Inc. and revenues from the delivery of biomedical services to Stryker Orthopedics accounted for 12% and 14%, respectively, of total net sales and revenues. The companyâ€™s financial performance could fluctuate from quarter to quarter depending on the timing of its customersâ€™ purchases. The loss of any of its major customers could hamper its business, as it depends on a relatively small number of customers for a high percentage of its net sales.

History of Operating Losses

Spire reported a decline in its financial performance in the last four years. The company sustained losses since 2009. In the fiscal year ended December 2012, the operating loss of the company was $6.6m in 2012, as compared to an operating loss of $0.84m in the previous fiscal year. Its net loss was $1.86m in 2012, as compared to net loss of $1.48m in 2011. These losses have contributed to an accumulated deficit of $15.9m of December 31, 2012. The company expects to increase its expenses considerably if revenues do not increase. These losses will have an adverse effect on its stockholdersâ€™ equity and the company might never achieve or sustain profitability.

Opportunities

Expansion in the Emerging Markets

Emerging markets offer a strong growth opportunity for the company, enabling it to leverage its strong brand and product portfolio. The demand in core markets is falling; hence, in order to sustain their revenue, companies are looking at tapping new markets, especially the emerging economies. In April 2012, the company decided to establish a module assembly line in Addis Ababa, Ethiopia. The facility will be the first state-of-the-art module manufacturing line in Ethiopia. In August 2011, the company established a wholly owned subsidiary, Spire Solar Technologies Private Limited with an office in Bangalore, India. Also, Spire Corporation and JEIS Holdings Co., Ltd. (JEIS) of Ansan-City, Gyeonggi-do, South Korea entered into a treaty, according to which JEIS will represent Spire Corporation's solar products and services throughout South Korea. In June 2011, Spire Corporation received a contract for a 12 megawatt (MW) PV semi-automated module manufacturing line from Rajasthan Electronics & Instruments Ltd. (REIL) located in Jaipur, India.

Strategic Divestiture

Through the planned disposal of its semiconductor business, the company is evaluating new business opportunities to expand its service offering and to more focus on its solar and biomedical businesses. In March 2012, the company divested its semiconductor business to Masimo Semiconductor, Inc., a wholly owned subsidiary of Masimo Corporation. Its semiconductor business provides semiconductor foundry services, operates a semiconductor foundry and fabrication facility and carries out the business of wafer epitaxy, foundry services, and device fabrication for the defense, medical, telecommunications and consumer products markets. With the divestiture of its semiconductor business to Masimo, Spire strengthened its financial position and seeks to pursue more opportunities in its solar and biomedical businesses.

Growing Solar PV Market

The company could benefit from the rapidly growing solar photovoltaics (PV) market, fueled by various effective supporting policies and sharp cost reduction in the recent past. The prices of solar PV systems have reduced by 40% between 2008 and 2009. This, along with factors, resulted in exponential growth in the global PV market due to the application of good solar resource and highly conventional electricity retail prices. The global cumulative installed solar PV power capacity has led to substantial growth, reaching 14 GW in 2008 from 0.1 GW in 1992, recording average annual growth rate of 40% for the period. The global cumulative installed solar PV power capacity is expected to reach 200 GW by 2020, growing at an average annual growth rate of 17%. The annual solar power system installations and the solar power industry revenue are expected to increase to 14,800 MW and $53.6 billion by 2013, respectively. The solar PV market in Europe is expected to reach a cumulative installed capacity of 158 GW by 2020, growing at a CAGR of 30.7% during the period 2016-20. The long-term growth potential for the solar PV industry opens several new growth avenues for Spire.

Threats

Technological Changes

Spire must anticipate industry trends and develop advanced products ahead of its competitors. Many of its existing products and those under development are technologically innovative and require significant planning, design, development and testing at the technological, product and manufacturing-process levels. These activities require the company to make significant investments. Products in its markets undergo rapid and significant technological change because of quickly changing industry standards and the introduction of new products and technologies that make existing products and technologies uncompetitive or obsolete. Its competitors may adapt more quickly to new technologies and changes in customersâ€™ requirements than the company. The products that are currently being developed, or those that it will develop in the future, may not be technologically feasible or accepted by the marketplace, and its products or technologies could become uncompetitive or obsolete.

Stiff Competition

The company faces intense competition in the market for solar PV products. The companyâ€™s performance could be affected by the competitive environment prevailing in the solar energy sector and customer preferences. The companyâ€™s competitors will continue to enhance their products or develop new products. Technological advances by any player in the market could render its present or future products obsolete or uneconomical. The demand for its products depends on the competitive atmosphere, including the timely development and introduction of new and competitive products and the companyâ€™s response to downward pricing to sustain competition. Factors including changes in customer order patterns, changing incentive programs or competitorsâ€™ new products can impact the companyâ€™s competitive ability. The company might not achieve future growth projections, if it fails to successfully compete against its competitors or develop new technologies.

Credit Report as of 07/01/2013

Location
1 Patriots Park Bedford, MA 01730-2396 United States

County:	Middlesex
MSA:	Boston, MA

Phone:	781-275-6000
Fax:	781-275-7470
Toll Free:	800-510-4815
URL:	http://spirecorp.com

ABI^©:	003523230

Annual Sales:	$22,110,000 (USD)
Employees:	113

Facility Size(ft²):	40,000+
Facility Own/Lease:	Own

Business Type:	Public
Location Type:	Headquarter

Ticker:	SPIR
Exchange:	OTHER
Primary Line of Business:
SIC:	3433-05 - Solar Energy Equipment-Manufacturers
NAICS:	333414 - Heating Equip, Except Warm Air Furnaces
Secondary Lines of Business:
NAICS:	541613 - Marketing Consulting Svcs
SICs:	8742-13 - Marketing Programs & Services
	9999-66 - Federal Government Contractors

Corporate Family	Corporate Structure News:
	Spire Corporation
Spire Corporation Total Corporate Family Members: 4

Company name	Company Type	Location	Country	Industry	Sales (USD mil)	Employees
Spire Corporation	Parent	Bedford, MA	United States	Semiconductor and Other Electronic Component Manufacturing	22.1	113
Spire Biomedical Inc	Subsidiary	Bedford, MA	United States	Professional and Commercial Equipment Wholesale		200
Spire R&D	Subsidiary	Bedford, MA	United States	Research and Development Services		94
Spire Solar Inc	Subsidiary	Bedford, MA	United States	Machinery and Equipment Manufacturing		7

Competitors Report

Company Name	Location	Employees	Ownership
Alter Nrg Corp.	Calgary, Alberta, Canada	32	Public
Ascent Solar Technologies, Inc.	Thornton, Colorado, United States	94	Public
DayStar Technologies Inc.	Union City, California, United States	3	Public
Eging Photovoltaic Technology Co Ltd	Changzhou, China	3,162	Public
GT Advanced Technologies Inc	Nashua, New Hampshire, United States	531	Public
SatCon Technology Corporation	Boston, Massachusetts, United States	246	Public
SunPower Corporation	San Jose, California, United States	5,020	Public

Executive report

Board of Directors

Name

Title

Function

Roger G. Little

Chairman of the Board, President, Chief Executive Officer

Chairman

Biography:

Mr. Roger G. Little serves as Chairman of the Board, President and Chief Executive Officer of Spire Corporation. He was the founder of Spire Corporation in 1969, and since its formation has been Chairman of the Board of Directors, Chief Executive Officer and President of the Company. He has served on many committees and advisory boards related to small business innovative research, the transfer and commercialization of technology, the worldwide growth of the photovoltaics industry, and the development of sound renewable energy policies. Mr. Little holds a B.A. in Physics from Colgate University and a M.S. in Physics from the Massachusetts Institute of Technology.

Age: 71

Education:

Massachusetts Institute of Technology, MS (Physics)
Colgate University, BA (Physics)

Compensation/Salary:$486,869

Compensation Currency: USD

Udo Henseler

Independent Director

Director/Board Member

Biography:

Dr. Udo Henseler, Ph.D., serves as Independent Director of Spire Corporation since 1992. He is currently the President and proprietor of Management Services International (â€œMSIâ€), a private business initiated in 1994. MSI provides business development services for biotechnology, life sciences and other industrial firms at various stages of their corporate evolution. Dr. Henseler has over forty years of combined global public and private company financial and operations leadership experiences mainly in the biopharmaceutical and life sciences sectors. His responsibilities encompassed positions as Director, Board Chairman, Chief Executive Officer, Chief Financial Officer, Executive Vice President, and memberships and/or Chairman of Audit, Compensation and Governance Board committees. He also taught at the now Peter F. Drucker and Masatoshi Ito Graduate School of Management, Claremont Graduate University. Dr. Henseler earned a B.A. in Germany, an M.B.A. from Fairleigh Dickinson University in New Jersey, and Masters and Ph.D. degrees from the Claremont Graduate University in Claremont, California. He also holds professional designations, in good standing, of Certified Public Accountant, Certified Management Accountant and Chartered Global Management Accountant. He served as Director and member of the Audit Committee of RTI Biologics, Inc. (formerly Regeneration Technologies, Inc.) through May 2011. Prior to it being acquired by RTI Biologics, Inc. in February 2008, Dr. Henseler served as a Director and Chairman of the Audit Committee of Tutogen Medical, Inc.

Age: 73

Education:

Claremont Graduate University, PHD
Fairleigh Dickinson University, MBA
Claremont Graduate University, M

David R. Lipinski

Independent Director

Director/Board Member

Biography:

Mr. David R. Lipinski serves as an Independent Director of Spire Corporation since May 2004. He is currently Executive Vice President and Chief Financial Officer of KMS Solutions, LLC, a defense professional services enterprise where he has served since that company's inception. From 2006 to June 2010, Mr. Lipinski was a consulting engineer with WorleyParsons Limited, a provider of professional services to the energy and resource industries, practicing in fields relating to electric power production and power facility life-cycle management. Since 2002, he has been an independent consultant in management and finance. From September 2004 to October 2005, he was Assistant Vice President, Business Development Group of Fifth Third Bank. Previously from August 2003 to May 2004, Mr. Lipinski was Vice President of Corporate Development of Spire Corporation and from August 2003 until November 2003, he was Chief Financial Officer. From 2000 to 2002, he was the Vice President for Corporate Development of Stratos Lightwave, Inc., a manufacturer of optoelectronic components and interconnection products used in optical communications and data networking. From 2000 until the adoption of a merger in January 2011, Mr. Lipinski was a director of Optelecom-NKF, Inc., a manufacturer of voice, video and data communications modules where he chaired the Compensation Committee and served on the Audit Committee and the Governance Committee. He holds a B.S. in Physics from the United States Naval Academy and an M.B.A. from the University of New Haven. He is a candidate for the Master of Engineering from the University of Illinois. Mr. Lipinski is a retired Captain of the United States Naval Reserve.

Age: 60

Education:

University of New Haven, MBA
U.S. Naval Academy, BS (Physics)

Compensation/Salary:$87,933

Compensation Currency: USD

Social:

Mark C. Little

Chief Executive Officer of Spire Biomedical; Director

Director/Board Member

Biography:

Mr. Mark C. Little serves as Director of Spire Corporation and Chief Executive Officer - Spire Biomedical, a subsidiary of the Comapny since 2004. He joined the Company in 1994 as a Medical Device Engineer. He was named Assistant General Manager, Biomedical, in March 1999; General Manager, Spire Biomedical, in January 2000; Vice President and General Manager, Spire Biomedical in November 2000; and Chief Executive Officer, Spire Biomedical in June 2001. He holds a B.A. from Flagler College.

Age: 50

Education:

Flagler College, BA

Compensation/Salary:$160,000

Compensation Currency: USD

Social:

Michael J. Magliochetti

Independent Director

Director/Board Member

Biography:

Dr. Michael J. Magliochetti, Ph.D., serves as an Independent Director of Spire Corporation since August 30, 2002. He is currently serving as an Operating Partner with Riverside Partners, LLC, a private equity firm focused on investing in middle market healthcare and technology companies. Dr. Magliochetti previously served as Chief Executive Officer of OPKO Diagnostics, LLC, a point-of-care in-vitro diagnostics firm and wholly owned subsidiary of OPKO Health, Inc. (OPK:NYSE). Dr. Magliochetti executed the sales transaction of Claros Diagnostics, where he was serving as Chief Executive Officer, to OPKO in 2011. He previously served as Entrepreneur-in-Residence with Oxford Bioscience Partners LP, a life science venture capital firm. Dr. Magliochetti previously served as Chief Executive Officer of Rehab Medical Holdings, Inc., an orthopedics company, which was acquired, Chief Executive Officer of HemaMetrics Corporation, a dialysis blood monitoring/diagnostic technology company, and UroSurge Corporation, a company specializing in products for the urology market of which a sale transaction was executed. He has held senior positions with the medical device company Haemonetics Corporation; the polymer products company Delta Surprenant, and an assignment with the U.S. Army Research Command. Dr. Magliochetti has served as Advisory Board Chairman for the Sophia Gordon Cancer Center and Robert E. Wise Science Foundation at Lahey Clinic. He has served on the Pediatric Angels Advisory Group at Boston Children's Hospital, The Institute for Pediatric Innovation, and as an Adjunct Professor of Biomedical Engineering at the University of Iowa. Dr. Magliochetti holds B.S. and Ph.D. degrees in Chemical Engineering from Northeastern University and the University of Massachusetts at Amherst, respectively, and a High Technology M.B.A. from Northeastern University.

Age: 48

Education:

University of Massachusetts, PHD (Chemical Engineering)
Northeastern University, MBA
Northeastern University, BS (Chemical Engineering)

Roger W. Redmond

Independent Director

Director/Board Member

Biography:

Mr. Roger W. Redmond serves as an Independent Director of Spire Corporation since 1991. He is currently Senior Vice President for Marquette Asset Management, Inc., an investment management and trust services firm. From 2006 to June 2011, Mr. Redmond was Vice President and Senior Investment Manager for Wells Fargo & Company, a financial services firm. Previously from July 2004 to July 2006, Mr. Redmond was a Partner, Chief Investment Officer of Stillwater Investment Management, LLC, an independent, registered investment advisory firm. From January 2002 to July 2004, Mr. Redmond was Senior Vice President of Windsor Financial Group, LLC, an investment advisor firm. He was designated a Chartered Financial Analyst in 1988. Mr. Redmond holds a B.S. in Chemistry from the University of Arizona and an M.B.A. in Finance from the University of Minnesota.

Age: 58

Education:

University of Minnesota, MBA (Finance)
University of Arizona, BS (Chemistry)

Executives

Name

Title

Function

Roger G. Little

Chairman of the Board, President, Chief Executive Officer

Chief Executive Officer

Biography:

Age: 71

Education:

Massachusetts Institute of Technology, MS (Physics)
Colgate University, BA (Physics)

Compensation/Salary:$486,869

Compensation Currency: USD

Stephen J. Hogan

Executive Vice President, General Manager - Spire Solar

Division Head Executive

Biography:

Mr. Stephen J. Hogan serves as Executive Vice President, General Manager - Spire Solar of Spire Corporation since November 2000. He joined the Company in 1984 as Manager, Process Development. He was named Sales Manager, Photovoltaic Equipment, in 1988; Manager of Engineering and Manufacturing in 1990; Director of Photovoltaic Business Development in March 1997; Vice President and General Manager, Photovoltaics, in November 1997; and Executive Vice President and General Manager, Spire Solar in November 2000.

Age: 60

Compensation/Salary:$140,526

Compensation Currency: USD

Social:

Mark C. Little

Chief Executive Officer of Spire Biomedical; Director

Division Head Executive

Biography:

Age: 50

Education:

Flagler College, BA

Compensation/Salary:$160,000

Compensation Currency: USD

Social:

Rodger W. LaFavre

Chief Operating Officer

Operations Executive

Biography:

Mr. Rodger W. LaFavre serves as Chief Operating Officer of Spire Corporation since February 11, 2005. He joined the Company in 2000 as Vice President, Utility Marketing of Spire Solar Operations. He was named Vice President and Chief Financial Officer of Spire Solar in June 2002, and Chief Operating Officer of Spire Solar in November 2002 and Chief Operating Officer of Spire Corporation in February 2005. Prior to joining Spire, Mr. LaFavre was Vice President of Stone & Webster Engineering Corporation, a worldwide engineering and construction company, where he was responsible for business development, corporate planning and the Asia subsidiary.

Age: 62

Compensation/Salary:$186,583

Compensation Currency: USD

Martin Stein

Business Development, Engineering/Technical, Operations, Vice President

Operations Executive

Education:

Pennsylvania State University, BS (Physics And Philosophy)

Social:

Jim Curran

Safety Manager

Environment/Safety Executive

Sheryl Einarson

Corporate Business Manager

Administration Executive

Social:

Robert Lieberman

Chief Financial Officer and Treasurer

Finance Executive

Biography:

Mr. Robert S.Lieberman, CPA, serves as Chief Financial Officer, Treasurer of Spire Corporation since April 20, 2010. He joined the Company in April 2009 as the Corporate Controller. He was named Chief Accounting Officer in December 2009 and Chief Financial Officer and Treasurer in April 2010. Prior to joining Spire, from May 2004 to January 2008, Mr. Lieberman was Senior Vice President and Chief Financial Officer for Millbrook Distribution Services, Inc., a division of United Natural Foods. Previously, from April 1999 to December 2003, he was Chief Financial Officer and Treasurer for Saleslink Corporation, a global supply chain management and eCommerce subsidiary of CMGI.

Age: 60

Education:

Baruch College, City University of New York

Compensation/Salary:$178,762

Compensation Currency: USD

Social:

Jeffrey Chasse

Controller

Education:

Central Connecticut State University

Social:

Stephanie Pappas

Human Resources Manager

Human Resources Executive

Pete Frost

Manager Customer Service

Customer Service Executive

Esther Hughs

Sales Executive

Social:

Peter Disessa

Vice President Global Sales

International Sales Executive

Social:

Michael O'Dougherty

Marketing

Marketing Executive

Stephanie Tironi

Marketing

Marketing Executive

Mark C Willingham

Chief Marketing Officer, Vice President

Marketing Executive

Education:

Boston College, Masters (Business Administration)
Worcester Polytechnic Institute, BS (Mechanical Engineering)

Chris Burgess

Information Technology Manager

Information Executive

Social:

Stephanie Sussman

Information Technology

Information Executive

Jason Burns

Staff Engineer

Engineering/Technical Executive

Ward Halverson

Principal Engineer

Engineering/Technical Executive

Shaun Montminy

Advanced Technology Center (Atc) Manager

Engineering/Technical Executive

Mike Nowlan

Manager Advanced Technology

Engineering/Technical Executive

Social:

Arash Aslani

Staff Scientist

Research & Development Executive

Robert Bradford

Product Development Manager

Product Management Executive

Jae-Bok Young

Business Development, International, Vice President

Business Development Executive

Social:

Barbara Crowley

Regulatory Compliance Manager

Legal Executive

Jonathan Nilsen

Counsel

Legal Executive

Robert Gedney

Purchasing Manager

Purchasing Executive

Tim Egge

Manager

Other

Guy L Mayer

Director

Other

Age: 61

Education:

University of Ottawa, BA (History And Political Science)

Social:

William Neal

Senior Physicist

Other

Stuart Stott

Vice President

Other

Scott Sutherland

Enginer

Other

Significant Developments

N2 Biomedical LLC Announces Acquisition Of Spire Corp's Biomedical Business-Form 8-K Sep 24, 2013

Spire Corp reported in its Form 8-K that on September 18, 2013, Spire Corporation (Company), Spire Biomedical, Inc. (Subsidiary and together with the Company, Spire) entered into an Asset Purchase Agreement with N2 Biomedical LLC (N2) pursuant to which N2 agreed to acquire substantially all of the assets of Spire's biomedical business and assume and pay certain liabilities related to the purchased assets as set forth in the Purchase Agreement. The Transaction closed on September 18, 2013. The purchase price for the Business was $10.5 million plus the assumption of liabilities of approximately $0.1 million, with $6.0 million paid in cash at closing, a $2.4 million subordinated convertible promissory note, and 310,549 Series A Preferred Units of N2 valued at approximately $2.1 million ($6.72 per share). The parties determined the purchase price through negotiation, as well as the parties' determination of fair market value of, and solicitation of third party bids on, the Business.

Annual Income Statement

Financials in: USD (mil)

Except for share items (millions) and per share items (actual units)

	31-Dec-2012	31-Dec-2011	31-Dec-2010	31-Dec-2009	31-Dec-2008
Period Length	12 Months	12 Months	12 Months	12 Months	12 Months
UpdateType/Date	Updated Normal 31-Dec-2012	Restated Normal 31-Dec-2012	Updated Normal 31-Dec-2010	Updated Normal 31-Dec-2009	Restated Normal 31-Dec-2009
Filed Currency	USD	USD	USD	USD	USD
Exchange Rate (Period Average)	1	1	1	1	1
Auditor	McGladrey LLP	McGladrey LLP	McGladrey & Pullen, LLP	Caturano & Co., P.C.	Vitale, Caturano and Company, P.C.
Auditor Opinion	Unqualified with Explanation	Unqualified with Explanation	Unqualified	Unqualified	Unqualified

Net Sales	22.1	58.7	79.8	69.9	65.0
Revenue	22.1	58.7	79.8	69.9	65.0
Total Revenue	22.1	58.7	79.8	69.9	65.0

Cost of Revenue	16.8	44.8	65.2	63.4	45.6
Cost of Revenue, Total	16.8	44.8	65.2	63.4	45.6
Gross Profit	5.3	14.0	14.7	6.5	19.4

Selling/General/Administrative Expense	11.5	14.2	18.1	17.8	18.2
Labor & Related Expense	0.2	0.3	-	-	-
Total Selling/General/Administrative Expenses	11.7	14.5	18.1	17.8	18.2
Research & Development	0.2	0.8	1.3	1.1	0.8
Other Unusual Expense (Income)	0.0	-0.4	-1.9	-3.1	-6.8
Unusual Expense (Income)	0.0	-0.4	-1.9	-3.1	-6.8
Total Operating Expense	28.7	59.6	82.7	79.2	57.8

Operating Income	-6.6	-0.8	-2.8	-9.3	7.2

Interest Expense - Non-Operating	-0.1	-0.1	-0.2	-0.3	-0.2
Interest Expense, Net Non-Operating	-0.1	-0.1	-0.2	-0.3	-0.2
Interest Income - Non-Operating	-	-	0.0	0.0	0.0
Investment Income - Non-Operating	0.0	0.0	0.0	-1.0	-0.8
Interest/Investment Income - Non-Operating	0.0	0.0	0.0	-1.0	-0.8
Interest Income (Expense) - Net Non-Operating Total	-0.1	-0.1	-0.2	-1.3	-1.0
Other Non-Operating Income (Expense)	-	-	-	-0.3	-0.4
Other, Net	-	-	-	-0.3	-0.4
Income Before Tax	-6.7	-1.0	-3.0	-10.9	5.7

Total Income Tax	-2.0	-0.9	-1.1	-2.2	0.3
Income After Tax	-4.8	-0.1	-1.9	-8.7	5.5

Net Income Before Extraord Items	-4.8	-0.1	-1.9	-8.7	5.5
Discontinued Operations	2.9	-1.4	1.5	3.4	-0.7
Total Extraord Items	2.9	-1.4	1.5	3.4	-0.7
Net Income	-1.9	-1.5	-0.4	-5.3	4.8

Income Available to Common Excl Extraord Items	-4.8	-0.1	-1.9	-8.7	5.5

Income Available to Common Incl Extraord Items	-1.9	-1.5	-0.4	-5.3	4.8

Basic/Primary Weighted Average Shares	8.6	8.4	8.3	8.3	8.3
Basic EPS Excl Extraord Items	-0.56	-0.01	-0.23	-1.04	0.66
Basic/Primary EPS Incl Extraord Items	-0.22	-0.18	-0.05	-0.63	0.57
Dilution Adjustment	0.0	0.0	0.0	0.0	0.0
Diluted Net Income	-1.9	-1.5	-0.4	-5.3	4.8
Diluted Weighted Average Shares	8.6	8.4	8.3	8.3	8.5
Diluted EPS Excl Extraord Items	-0.56	-0.01	-0.23	-1.04	0.64
Diluted EPS Incl Extraord Items	-0.22	-0.18	-0.05	-0.63	0.56
Dividends per Share - Common Stock Primary Issue	0.00	0.00	0.00	0.00	0.00
Gross Dividends - Common Stock	0.0	0.0	0.0	0.0	0.0
Interest Expense, Supplemental	0.1	0.1	0.2	0.3	0.2
Depreciation, Supplemental	0.8	1.0	1.6	1.5	1.8
Total Special Items	0.0	-0.2	-1.9	-3.1	-6.8
Normalized Income Before Tax	-6.7	-1.2	-4.9	-14.0	-1.0

Effect of Special Items on Income Taxes	0.0	-0.1	-0.7	-1.1	-2.4
Inc Tax Ex Impact of Sp Items	-1.9	-1.0	-1.8	-3.3	-2.1
Normalized Income After Tax	-4.8	-0.2	-3.1	-10.7	1.1

Normalized Inc. Avail to Com.	-4.8	-0.2	-3.1	-10.7	1.1

Basic Normalized EPS	-0.56	-0.03	-0.37	-1.28	0.13
Diluted Normalized EPS	-0.56	-0.03	-0.37	-1.28	0.13
Amort of Intangibles, Supplemental	-	0.1	0.1	0.0	0.0
Rental Expenses	2.4	2.9	-	-	-
Research & Development Exp, Supplemental	0.2	0.8	1.3	1.1	0.8
Normalized EBIT	-6.6	-1.1	-4.7	-12.5	0.4
Normalized EBITDA	-5.8	0.0	-3.0	-10.9	2.2
Defined Contribution Expense Retirement	0.2	-	0.2	0.2	0.1
Total Pension Expense	0.2	-	0.2	0.2	0.1

Annual Balance Sheet

Financials in: USD (mil)

	31-Dec-2012	31-Dec-2011	31-Dec-2010	31-Dec-2009	31-Dec-2008
UpdateType/Date	Updated Normal 31-Dec-2012	Reclassified Normal 31-Dec-2012	Updated Normal 31-Dec-2010	Updated Normal 31-Dec-2009	Reclassified Normal 31-Dec-2009
Filed Currency	USD	USD	USD	USD	USD
Exchange Rate	1	1	1	1	1
Auditor	McGladrey LLP	McGladrey LLP	McGladrey & Pullen, LLP	Caturano & Co., P.C.	Vitale, Caturano and Company, P.C.
Auditor Opinion	Unqualified with Explanation	Unqualified with Explanation	Unqualified	Unqualified	Unqualified

Cash & Equivalents	3.0	4.8	6.3	9.0	6.0
Cash and Short Term Investments	3.0	4.8	6.3	9.0	6.0
Accounts Receivable - Trade, Gross	2.2	3.5	7.5	6.4	8.5
Provision for Doubtful Accounts	0.0	0.0	-0.1	-0.5	-0.4
Trade Accounts Receivable - Net	2.1	3.5	7.3	5.9	8.1
Total Receivables, Net	2.1	3.5	7.3	5.9	8.1
Inventories - Finished Goods	1.4	1.0	3.8	9.9	6.0
Inventories - Work In Progress	2.1	3.9	4.3	8.2	7.4
Inventories - Raw Materials	1.8	2.3	2.9	2.4	3.5
Total Inventory	5.3	7.2	10.9	20.5	16.9
Prepaid Expenses	0.6	0.8	0.8	0.8	0.4
Restricted Cash - Current	0.0	0.0	0.0	1.5	4.2
Discontinued Operations - Current Asset	0.7	0.7	0.0	0.2	1.9
Other Current Assets	0.3	0.8	1.1	7.2	20.5
Other Current Assets, Total	1.0	1.5	1.1	8.8	26.5
Total Current Assets	12.1	17.6	26.5	45.0	57.9

Buildings	3.9	3.8	3.6	3.5	3.3
Machinery/Equipment	16.4	16.1	23.8	23.0	22.3
Construction in Progress	0.1	0.1	0.2	0.2	0.3
Property/Plant/Equipment - Gross	20.4	19.9	27.7	26.7	26.0
Accumulated Depreciation	-19.2	-18.6	-23.1	-21.4	-19.9
Property/Plant/Equipment - Net	1.2	1.4	4.6	5.4	6.1
Intangibles - Gross	1.0	1.0	1.6	1.5	1.2
Accumulated Intangible Amortization	-0.8	-0.8	-0.8	-0.7	-0.7
Intangibles, Net	0.2	0.2	0.8	0.7	0.5
LT Investment - Affiliate Companies	-	-	-	0.0	1.5
LT Investments - Other	3.0	2.7	2.7	2.2	1.7
Long Term Investments	3.0	2.7	2.7	2.2	3.2
Discontinued Operations - Long Term Asset	0.0	2.0	0.0	0.1	0.4
Other Long Term Assets	0.2	0.3	-	-	-
Other Long Term Assets, Total	0.2	2.3	0.0	0.1	0.4
Total Assets	16.6	24.2	34.6	53.4	68.0

Accounts Payable	1.4	3.4	6.5	8.7	4.8
Accrued Expenses	2.2	3.5	4.2	7.2	8.2
Notes Payable/Short Term Debt	0.0	0.0	0.0	0.0	0.0
Current Portion - Long Term Debt/Capital Leases	0.6	1.2	1.2	2.0	2.7
Customer Advances	1.0	2.2	9.0	21.7	34.5
Discontinued Operations - Current Liability	0.2	1.7	0.4	1.7	0.9
Other Current liabilities, Total	1.2	3.9	9.4	23.4	35.4
Total Current Liabilities	5.5	11.9	21.3	41.3	51.0

Long Term Debt	-	-	-	0.0	0.6
Capital Lease Obligations	0.0	0.0	0.1	0.1	0.0
Total Long Term Debt	0.0	0.0	0.1	0.1	0.6
Total Debt	0.6	1.2	1.3	2.1	3.3

Other Long Term Liabilities	3.7	3.3	3.3	2.5	2.9
Discontinued Operations - Liabilities	0.0	0.2	-	-	-
Other Liabilities, Total	3.7	3.5	3.3	2.5	2.9
Total Liabilities	9.2	15.5	24.7	43.9	54.5

Common Stock	0.1	0.1	0.1	0.1	0.1
Common Stock	0.1	0.1	0.1	0.1	0.1
Additional Paid-In Capital	23.1	22.5	22.0	21.4	20.8
Retained Earnings (Accumulated Deficit)	-15.9	-14.1	-12.6	-12.2	-6.9
Other Comprehensive Income	0.2	0.2	0.4	0.2	-0.4
Other Equity, Total	0.2	0.2	0.4	0.2	-0.4
Total Equity	7.5	8.7	9.9	9.5	13.5

Total Liabilities & Shareholdersâ€™ Equity	16.6	24.2	34.6	53.4	68.0

Shares Outstanding - Common Stock Primary Issue	9.1	8.6	8.4	8.3	8.3
Total Common Shares Outstanding	9.1	8.6	8.4	8.3	8.3
Treasury Shares - Common Stock Primary Issue	0.0	0.0	0.0	0.0	0.0
Employees	113	-	188	200	217
Number of Common Shareholders	245	-	161	164	179
Accumulated Intangible Amort, Suppl.	0.8	0.8	0.8	0.7	0.7
Deferred Revenue - Current	1.0	2.2	9.0	21.7	34.5
Deferred Revenue - Long Term	-	-	0.0	0.0	1.1
Total Long Term Debt, Supplemental	-	-	0.8	0.6	3.3
Long Term Debt Maturing within 1 Year	-	-	0.8	0.6	2.7
Long Term Debt Maturing in Year 2	-	-	-	-	0.6
Long Term Debt Maturing in 2-3 Years	-	-	-	-	0.6
Long Term Debt Matur. in Year 6 & Beyond	-	-	0.0	0.0	0.0
Interest Costs	0.0	-	-	-	-
Total Capital Leases, Supplemental	0.0	-	0.1	0.2	-
Capital Lease Payments Due in Year 1	0.0	-	0.1	0.1	-
Capital Lease Payments Due in Year 2	0.0	-	0.0	0.1	-
Capital Lease Payments Due in Year 3	0.0	-	0.0	0.0	-
Capital Lease Payments Due in Year 4	0.0	-	0.0	0.0	-
Capital Lease Payments Due in Year 5	0.0	-	0.0	0.0	-
Capital Lease Payments Due in 2-3 Years	0.0	-	0.1	0.1	-
Capital Lease Payments Due in 4-5 Years	0.0	-	0.0	0.0	-
Total Operating Leases, Supplemental	12.3	-	23.3	14.3	17.3
Operating Lease Payments Due in Year 1	2.4	-	3.5	3.4	3.2
Operating Lease Payments Due in Year 2	2.4	-	3.7	3.5	3.4
Operating Lease Payments Due in Year 3	2.5	-	3.8	3.5	3.4
Operating Lease Payments Due in Year 4	2.5	-	3.9	1.5	3.4
Operating Lease Payments Due in Year 5	2.4	-	3.5	1.5	2.9
Operating Lease Pymts. Due in 2-3 Years	4.9	-	7.5	7.0	6.8
Operating Lease Pymts. Due in 4-5 Years	4.9	-	7.3	2.9	6.3
Oper. Lse. Pymts. Due in Year 6 & Beyond	0.0	-	4.9	1.0	1.0

Annual Cash Flows

Financials in: USD (mil)

	31-Dec-2012	31-Dec-2011	31-Dec-2010	31-Dec-2009	31-Dec-2008
Period Length	12 Months	12 Months	12 Months	12 Months	12 Months
UpdateType/Date	Updated Normal 31-Dec-2012	Reclassified Normal 31-Dec-2012	Updated Normal 31-Dec-2010	Updated Normal 31-Dec-2009	Reclassified Normal 31-Dec-2009
Filed Currency	USD	USD	USD	USD	USD
Exchange Rate (Period Average)	1	1	1	1	1
Auditor	McGladrey LLP	McGladrey LLP	McGladrey & Pullen, LLP	Caturano & Co., P.C.	Vitale, Caturano and Company, P.C.
Auditor Opinion	Unqualified with Explanation	Unqualified with Explanation	Unqualified	Unqualified	Unqualified

Net Income/Starting Line	-1.9	-1.5	-0.4	-5.3	4.8
Depreciation	0.8	1.0	1.7	1.5	1.9
Depreciation/Depletion	0.8	1.0	1.7	1.5	1.9
Deferred Taxes	-1.9	-0.9	-1.0	-2.3	0.0
Discontinued Operations	-4.6	2.2	-2.8	-3.5	0.7
Unusual Items	-	-	-	0.0	-0.1
Equity in Net Earnings (Loss)	-	-	0.0	1.0	0.8
Other Non-Cash Items	0.6	0.8	0.9	1.7	0.6
Non-Cash Items	-4.1	3.0	-1.9	-0.8	2.1
Accounts Receivable	1.3	3.4	-1.3	2.1	2.5
Inventories	1.1	2.7	9.3	-4.0	-6.7
Other Assets	1.0	0.4	7.5	15.6	-13.8
Payable/Accrued	-3.0	-2.7	-4.9	3.2	5.0
Other Liabilities	-1.2	-6.6	-12.7	-13.9	9.7
Changes in Working Capital	-0.8	-2.7	-2.1	3.0	-3.2
Cash from Operating Activities	-7.8	-1.1	-3.7	-3.8	5.5

Purchase of Fixed Assets	-0.1	-0.2	-0.8	-0.6	-1.7
Capital Expenditures	-0.1	-0.2	-0.8	-0.6	-1.7
Sale of Business	-	-	0.0	0.5	0.0
Sale of Intangible Assets	-	-	-	0.0	0.1
Intangible, Net	0.0	-0.1	-0.2	-0.3	-0.1
Other Investing Cash Flow	6.9	-0.1	2.6	8.6	0.0
Other Investing Cash Flow Items, Total	6.9	-0.2	2.5	8.8	0.0
Cash from Investing Activities	6.7	-0.4	1.7	8.2	-1.8

Options Exercised	0.0	0.0	0.1	0.0	0.0
Issuance (Retirement) of Stock, Net	0.0	0.0	0.1	0.0	0.0
Long Term Debt Reduction	-0.6	0.0	-0.6	-1.2	-1.7
Long Term Debt, Net	-0.6	0.0	-0.8	-1.3	-0.2
Issuance (Retirement) of Debt, Net	-0.6	0.0	-0.8	-1.3	-0.2
Cash from Financing Activities	-0.6	0.0	-0.7	-1.3	-0.1

Net Change in Cash	-1.7	-1.5	-2.7	3.0	3.6

Net Cash - Beginning Balance	4.8	6.3	9.0	6.0	2.4
Net Cash - Ending Balance	3.0	4.8	6.3	9.0	6.0
Cash Interest Paid	0.1	0.1	0.2	0.3	0.2
Cash Taxes Paid	0.0	0.0	-0.2	0.1	0.0

Annual Income Statement

Financials in: USD (mil)

Except for share items (millions) and per share items (actual units)

	31-Dec-2012	31-Dec-2011	31-Dec-2010	31-Dec-2009	31-Dec-2008
Period Length	12 Months	12 Months	12 Months	12 Months	12 Months
UpdateType/Date	Updated Normal 31-Dec-2012	Restated Normal 31-Dec-2012	Updated Normal 31-Dec-2010	Updated Normal 31-Dec-2009	Restated Normal 31-Dec-2009
Filed Currency	USD	USD	USD	USD	USD
Exchange Rate (Period Average)	1	1	1	1	1
Auditor	McGladrey LLP	McGladrey & Pullen, LLP	McGladrey & Pullen, LLP	Caturano & Co., P.C.	Caturano & Co., P.C.
Auditor Opinion	Unqualified with Explanation	Unqualified	Unqualified	Unqualified	Unqualified

Sales of goods	13.0	50.7	66.7	57.8	50.3
Contract research and service revenues	9.1	8.0	13.1	12.1	14.6
Total Revenue	22.1	58.7	79.8	69.9	65.0

Stock-based Compensation in SGA	0.2	0.3	-	-	-
Stock-based Compensation in COR/COGS	0.0	0.1	-	-	-
Stock-based Compensation in COR/COGS	0.0	0.0	-	-	-
other cost of contract research and serv	4.9	4.6	-	-	-
Other Cost of goods sold	11.9	40.1	-	-	-
Cost of contract research and services	-	-	10.0	9.2	10.0
Cost of goods sold	-	-	55.2	54.2	35.6
other selling and general expnense	11.5	14.2	-	-	-
Selling, general and administrative expe	-	-	18.1	17.8	18.2
Internal research and development expens	0.2	0.8	1.3	1.1	0.8
Gain on termination of contracts	0.0	-0.4	-1.9	-3.1	-6.8
Total Operating Expense	28.7	59.6	82.7	79.2	57.8

Interest Income	-	-	0.0	0.0	0.0
Interest expense, net	-0.1	-0.1	-0.2	-0.3	-0.2
Loss on equity investment in joint ventu	-	-	0.0	-1.0	-0.8
Foreign exchange gain (loss))	0.0	0.0	0.0	-	-
Other expense	-	-	-	-0.3	-0.4
Net Income Before Taxes	-6.7	-1.0	-3.0	-10.9	5.7

Provision for Income Taxes	-2.0	-0.9	-1.1	-2.2	0.3
Net Income After Taxes	-4.8	-0.1	-1.9	-8.7	5.5

Net Income Before Extra. Items	-4.8	-0.1	-1.9	-8.7	5.5
Loss from discontinued operations before	-0.6	-2.8	-0.1	-2.1	-0.7
Gain on legal settlement, net of transac	0.0	2.3	0.0	-	-
Gain on sale of business unit, net of tr	5.4	0.0	2.6	7.7	0.0
Income tax provision - discontinued oper	-1.9	-0.9	-1.0	-2.3	0.0
Net Income	-1.9	-1.5	-0.4	-5.3	4.8

Income Available to Com Excl ExtraOrd	-4.8	-0.1	-1.9	-8.7	5.5

Income Available to Com Incl ExtraOrd	-1.9	-1.5	-0.4	-5.3	4.8

Basic Weighted Average Shares	8.6	8.4	8.3	8.3	8.3
Basic EPS Excluding ExtraOrdinary Items	-0.56	-0.01	-0.23	-1.04	0.65
Basic EPS Including ExtraOrdinary Items	-0.22	-0.18	-0.05	-0.63	0.57
Dilution Adjustment	0.0	0.0	0.0	0.0	0.0
Diluted Net Income	-1.9	-1.5	-0.4	-5.3	4.8
Diluted Weighted Average Shares	8.6	8.4	8.3	8.3	8.5
Diluted EPS Excluding ExtraOrd Items	-0.56	-0.01	-0.23	-1.04	0.64
Diluted EPS Including ExtraOrd Items	-0.22	-0.18	-0.05	-0.63	0.56
DPS-Ordinary Shares	0.00	0.00	0.00	0.00	0.00
Gross Dividends - Common Stock	0.0	0.0	0.0	0.0	0.0
Normalized Income Before Taxes	-6.7	-1.2	-4.9	-14.0	-1.0

Inc Tax Ex Impact of Sp Items	-1.9	-1.0	-1.8	-3.3	-2.1
Normalized Income After Taxes	-4.8	-0.2	-3.1	-10.7	1.1

Normalized Inc. Avail to Com.	-4.8	-0.2	-3.1	-10.7	1.1

Basic Normalized EPS	-0.56	-0.03	-0.37	-1.28	0.13
Diluted Normalized EPS	-0.56	-0.03	-0.37	-1.28	0.13
Internal research and development expens	0.2	0.8	1.3	1.1	0.8
Rental Expense	2.4	2.9	-	-	-
Depreciation	0.8	1.0	1.6	1.5	1.8
Interest expense, net	0.1	0.1	-	-	-
Interest Expense	-	-	0.2	0.3	0.2
Amortization of Intangible	-	0.1	0.1	0.0	0.0
Defined Contribution Expense Retirement	0.2	-	0.2	0.2	0.1
Total Pension Expense	0.2	-	0.2	0.2	0.1

Annual Balance Sheet

Financials in: USD (mil)

	31-Dec-2012	31-Dec-2011	31-Dec-2010	31-Dec-2009	31-Dec-2008
UpdateType/Date	Updated Normal 31-Dec-2012	Reclassified Normal 31-Dec-2012	Updated Normal 31-Dec-2010	Updated Normal 31-Dec-2009	Reclassified Normal 31-Dec-2009
Filed Currency	USD	USD	USD	USD	USD
Exchange Rate	1	1	1	1	1
Auditor	McGladrey LLP	McGladrey & Pullen, LLP	McGladrey & Pullen, LLP	Caturano & Co., P.C.	Caturano & Co., P.C.
Auditor Opinion	Unqualified with Explanation	Unqualified	Unqualified	Unqualified	Unqualified

Cash and cash equivalents	3.0	4.8	6.3	9.0	6.0
Restricted Cash	0.0	0.0	0.0	1.5	4.2
Amounts Billed	1.9	3.3	7.2	5.6	6.7
Unbilled Costs/Accrued revenue	0.2	0.2	0.3	0.7	1.8
Doubtful Account	0.0	0.0	-0.1	-0.5	-0.4
Raw Materials	1.8	2.3	2.9	2.4	3.5
Work in Process	2.1	3.9	4.3	8.2	7.4
Finished Goods	1.4	1.0	3.8	9.9	6.0
Deferred cost of goods sold	0.2	0.2	1.0	6.6	17.1
Deposits on equipment for inventory	0.1	0.6	0.1	0.6	3.4
Current assets of discontinued operation	0.7	0.7	0.0	0.2	1.9
Prepaid expenses and other current asset	0.6	0.8	0.8	0.8	0.4
Total Current Assets	12.1	17.6	26.5	45.0	57.9

Machin./Equip.	11.7	11.3	18.9	18.2	17.9
Furn./Fixtures	4.7	4.7	4.9	4.8	4.4
Leasehold Imprv.	3.9	3.8	3.6	3.5	3.3
Constr. in Prog.	0.1	0.1	0.2	0.2	0.3
Depreciation	-19.2	-18.6	-23.1	-21.4	-19.9
Patents	-	-	1.6	1.5	1.2
Amort. Patents	-	-	-0.8	-0.7	-0.7
Available-for-sale investments, at quote	3.0	2.4	2.4	1.9	1.4
Equity investment in joint venture	-	-	-	0.0	1.5
Non-current assets of discontinued opera	0.0	2.0	0.0	0.1	0.4
Deposit related party	0.0	0.3	0.3	0.3	0.3
Other Intangible and other assets, net	0.2	0.3	-	-	-
Brands/Patents - Gross	0.9	0.9	-	-	-
Licenses/Franchises/Rights,Gross	0.1	0.1	-	-	-
AccAmort Brand/Patent/Market/Art Intang.	-0.8	-0.8	-	-	-
AccAmortLicen.Franc.RightContr.Mod.Desig	0.0	0.0	-	-	-
Total Assets	16.6	24.2	34.6	53.4	68.0

Accounts Payable	1.4	3.4	6.5	8.7	4.8
Accrued liabilities	2.2	3.5	4.2	7.2	8.2
Revolving line of credit	0.6	1.2	1.2	1.9	2.7
Current portion of capital lease obligat	0.0	0.0	0.0	0.0	0.0
Liabilities of discontinued operations	0.2	1.7	0.4	1.7	0.9
Advances on contracts in progress	1.0	2.2	9.0	21.7	34.5
Total Current Liabilities	5.5	11.9	21.3	41.3	51.0

Long term portion of equipment line of c	-	-	-	0.0	0.6
Long-term portion of capital lease oblig	0.0	0.0	0.1	0.1	0.0
Total Long Term Debt	0.0	0.0	0.1	0.1	0.6

Long term portion of advances on contrac	-	-	0.0	0.0	1.1
Other long-term liabilities	0.7	0.9	0.9	0.6	0.3
Deferred compensation	3.0	2.4	2.4	1.9	1.4
Non-current liabilities of discontinued	0.0	0.2	-	-	-
Total Liabilities	9.2	15.5	24.7	43.9	54.5

Common stock, $0.01 par value; 20,000,00	0.1	0.1	0.1	0.1	0.1
Additional paid-in capital	23.1	22.5	22.0	21.4	20.8
Accumulated deficit	-15.9	-14.1	-12.6	-12.2	-6.9
Accumulated other comprehensive income	0.2	0.2	0.4	0.2	-0.4
Total Equity	7.5	8.7	9.9	9.5	13.5

Total Liabilities & Shareholders' Equity	16.6	24.2	34.6	53.4	68.0

S/O-Ordinary Shares	9.1	8.6	8.4	8.3	8.3
Total Common Shares Outstanding	9.1	8.6	8.4	8.3	8.3
T/S-Ordinary Shares	0.0	0.0	0.0	0.0	0.0
Advances on contracts in progress	1.0	2.2	9.0	21.7	34.5
AccAmort Brand/Patent/Market/Art Intang.	0.8	0.8	-	-	-
AccAmortLicen.Franc.RightContr.Mod.Desig	0.0	0.0	-	-	-
Accumulated Intangible Amortization	-	-	0.8	0.7	0.7
Deferred Revenue - Long Term	-	-	0.0	0.0	1.1
Full-Time Employees	113	-	188	200	217
Number of Common Shareholders	245	-	161	164	179
Long-Term Debt Maturing within 1 Year	-	-	0.8	0.6	2.7
Long-Term Debt Maturing within 2 Years	-	-	-	-	0.6
Total Long Term Debt, Supplemental	-	-	0.8	0.6	3.3
Capital Leases Maturing within 1 Year	0.0	-	0.1	0.1	-
Capital Leases Maturing within 2 Years	0.0	-	0.0	0.1	-
Capital Leases Maturing within 3 Years	0.0	-	0.0	0.0	-
Capital Leases Maturing within 4 Years	0.0	-	0.0	0.0	-
Capital Leases Maturing within 5 Years	0.0	-	0.0	0.0	-
Interest Costs	0.0	-	-	-	-
Total Capital Leases, Supplemental	0.0	-	0.1	0.2	-
Operating Leases Maturing within 1 Year	2.4	-	3.5	3.4	3.2
Operating Leases Maturing within 2 Years	2.4	-	3.7	3.5	3.4
Operating Leases Maturing within 3 Years	2.5	-	3.8	3.5	3.4
Operating Leases Maturing within 4 Years	2.5	-	3.9	1.5	3.4
Operating Leases Maturing within 5 Years	2.4	-	3.5	1.5	2.9
Operating Leases Remaining Years	-	-	4.9	1.0	1.0
Total Operating Leases, Supplemental	12.3	-	23.3	14.3	17.3

Annual Cash Flows

Financials in: USD (mil)

	31-Dec-2012	31-Dec-2011	31-Dec-2010	31-Dec-2009	31-Dec-2008
Period Length	12 Months	12 Months	12 Months	12 Months	12 Months
UpdateType/Date	Updated Normal 31-Dec-2012	Reclassified Normal 31-Dec-2012	Updated Normal 31-Dec-2010	Updated Normal 31-Dec-2009	Reclassified Normal 31-Dec-2009
Filed Currency	USD	USD	USD	USD	USD
Exchange Rate (Period Average)	1	1	1	1	1
Auditor	McGladrey LLP	McGladrey & Pullen, LLP	McGladrey & Pullen, LLP	Caturano & Co., P.C.	Caturano & Co., P.C.
Auditor Opinion	Unqualified with Explanation	Unqualified	Unqualified	Unqualified	Unqualified

Net Income	-1.9	-1.5	-0.4	-5.3	4.8
Depreciation	0.8	1.0	1.7	1.5	1.9
Gain on sale of asset	-	-	-	0.0	-0.1
Net cash (used in) provided by operating	-1.7	0.8	-	-	-
Net income (loss) from discontinued	-2.9	1.4	-1.5	-3.4	0.7
Loss on equity investment in joint ventu	-	-	0.0	1.0	0.8
Deferred tax benefit	-1.9	-0.9	-1.0	-2.3	0.0
Deferred compensation(1)	0.0	-0.2	0.2	0.7	-0.5
Provision for inventory reserve	0.3	0.7	0.3	0.3	0.1
Provision for accounts receivable reserv	0.0	0.0	-0.1	0.1	0.3
Stock based compensation	0.2	0.3	0.5	0.6	0.8
Restricted Cash	0.0	0.0	1.5	2.7	-3.8
Accounts receivable	1.3	3.4	-1.3	2.1	2.5
Deposits, prepaid expenses and other cur	0.7	-0.4	0.5	2.5	-1.0
Inventories	1.1	2.7	9.3	-4.0	-6.7
Deferred cost of goods sold	0.0	0.8	5.6	10.5	-9.0
Accounts payable, accrued liabilities an	-3.0	-2.7	-4.9	3.2	5.0
Net cash (used in) provided by operating	-	-	-1.3	-0.2	0.0
Advances on contracts in progress	-1.2	-6.6	-12.7	-13.9	9.7
Deposit related party	0.3	0.0	-	0.0	0.0
Cash from Operating Activities	-7.8	-1.1	-3.7	-3.8	5.5

Purchase of property and equipment	-0.1	-0.2	-0.8	-0.6	-1.7
Proceeds from dissolution of joint ventu	-	-	0.0	0.5	0.0
Net cash provided by (used in) investing	6.9	-0.1	-	-	-
Net cash provided by (used in) investing	-	-	2.6	8.6	0.0
Additions to intangible and other assets	0.0	-0.1	-0.2	-0.3	-0.1
Proceeds from sale of asset	-	-	-	0.0	0.1
Cash from Investing Activities	6.7	-0.4	1.7	8.2	-1.8

Proceeds from exercise of stock options	0.0	0.0	0.1	0.0	0.0
Borrowings from revolving line of credit	-	-	-0.2	-0.2	1.5
Principal payments on capital lease obli	0.0	0.0	0.0	0.0	0.0
Payments on Capital Leases-Related Party	-	-	-	0.0	-0.5
Principal payments on equipment and revo	-0.6	0.0	-0.6	-1.2	-1.2
Cash from Financing Activities	-0.6	0.0	-0.7	-1.3	-0.1

Net Change in Cash	-1.7	-1.5	-2.7	3.0	3.6

Net Cash - Beginning Balance	4.8	6.3	9.0	6.0	2.4
Net Cash - Ending Balance	3.0	4.8	6.3	9.0	6.0
Cash Interest Paid	0.1	0.1	0.2	0.3	0.2
Cash Taxes Paid	0.0	0.0	-0.2	0.1	0.0

Financial Health

Financials in: USD (mil)

Except for share items (millions) and per share items (actual units)

Key IndicatorsÂ USD (mil)
Â	Quarter Ending 30-Jun-2013	Quarter Ending Yr Ago	Annual Year End 31-Dec-2012	1 Year Growth	3 Year Growth	5 Year Growth
Total Revenue	3.6	-46.01%	22.1	-62.36%	-31.86%	-9.82%
Research & Development	0.0	-89.25%	0.2	-69.97%	-40.17%	-5.73%
Operating Income	-1.8	-	-6.6	-	-	-
Income Available to Common Excl Extraord Items	-1.8	-	-4.8	-	-	-
Basic EPS Excl Extraord Items	-0.19	-	-0.56	-	-	-
Capital Expenditures	0.1	-42.00%	0.1	-27.41%	-38.74%	-39.26%
Cash from Operating Activities	-1.9	-	-7.8	-	-	-
Free Cash Flow	-2.0	-	-8.0	-	-	-
Total Assets	13.5	-36.35%	16.6	-31.24%	-32.22%	-19.34%
Total Liabilities	10.2	-4.88%	9.2	-40.70%	-40.65%	-25.60%
Total Long Term Debt	0.0	-93.33%	0.0	-61.90%	-57.19%	-65.96%
Employees	-	-	113	-	-17.33%	-8.79%
Total Common Shares Outstanding	9.2	7.54%	9.1	5.84%	2.83%	1.72%
Market Cap	5.2	1.21%	4.5	-15.83%	-53.33%	-52.94%

Key Ratios
Â	31-Dec-2012	31-Dec-2011	31-Dec-2010	31-Dec-2009	31-Dec-2008
Profitability
Gross Margin	23.84%	23.82%	18.39%	9.25%	29.82%
Operating Margin	-29.86%	-1.44%	-3.55%	-13.37%	11.04%
Pretax Margin	-30.44%	-1.66%	-3.81%	-15.61%	8.81%
Net Profit Margin	-21.61%	-0.15%	-2.38%	-12.40%	8.40%
Financial Strength
Current Ratio	2.21	1.48	1.24	1.09	1.13
Long Term Debt/Equity	0.00	0.00	0.01	0.01	0.04
Total Debt/Equity	0.08	0.14	0.13	0.22	0.24
Management Effectiveness
Return on Assets	-23.42%	-0.29%	-4.31%	-14.27%	9.35%
Return on Equity	-59.14%	-0.92%	-19.55%	-75.27%	49.65%
Efficiency
Receivables Turnover	7.90	10.89	12.08	9.99	6.51
Inventory Turnover	2.70	4.95	4.15	3.40	3.21
Asset Turnover	1.08	2.00	1.82	1.15	1.11

Market ValuationÂ USD (mil)
Enterprise Value	3.0	.	Price/Sales (TTM)	0.28
Enterprise Value/Revenue (TTM)	0.20	.	Price/Book (MRQ)	1.25
Market Cap as of 27-Sep-2013	4.2	.

Ratio Comparisons

Traded: Over The Counter: SPIR	Financials in: USD (actual units)
Industry: Misc. Fabricated Products	As of 27-Sep-2013
Sector: Basic Materials

	Company	Industry	Sector	S&P 500
Valuation Ratios
P/E Excluding Extraordinary (TTM)	-	27.86	24.91	19.68
P/E High Excluding Extraordinary - Last 5 Yrs	7.98	38.88	40.00	32.79
P/E Low Excluding Extraordinary - Last 5 Yrs	7.98	6.62	8.69	10.71
Beta	1.57	1.53	1.47	1.00
Price/Revenue (TTM)	0.28	1.99	2.38	2.57
Price/Book (MRQ)	1.25	2.68	3.90	3.67
Price to Tangible Book (MRQ)	1.43	6.83	5.81	5.21
Price to Cash Flow Per Share (TTM)	-	16.42	13.98	14.22
Price to Free Cash Flow Per Share (TTM)	-	29.60	37.21	26.26

Dividends
Dividend Yield	-	0.88%	1.75%	2.26%
Dividend Per Share - 5 Yr Avg	0.00	0.99	2.50	1.99
Dividend 5 Yr Growth	-	4.54%	1.06%	0.08%
Payout Ratio (TTM)	-	20.70%	29.68%	25.98%

Growth Rates (%)
Revenue (MRQ) vs Qtr 1 Yr Ago	-46.01%	21.35%	20.15%	15.58%
Revenue (TTM) vs TTM 1 Yr Ago	-64.05%	19.14%	23.47%	17.69%
Revenue 5 Yr Growth	-9.82%	6.76%	7.38%	8.97%
EPS (MRQ) vs Qtr 1 Yr Ago	9.05%	33.62%	13.63%	19.49%
EPS (TTM) vs TTM 1 Yr Ago	-413.84%	124.73%	42.74%	32.55%
EPS 5 Yr Growth	-	5.77%	8.05%	9.86%
Capital Spending 5 Yr Growth	-39.26%	8.85%	9.93%	-2.04%

Financial Strength
Quick Ratio (MRQ)	0.62	1.74	1.78	1.24
Current Ratio (MRQ)	1.42	3.16	2.73	1.79
LT Debt/Equity (MRQ)	0.00	0.26	0.81	0.64
Total Debt/Equity (MRQ)	0.18	0.29	0.88	0.73
Interest Coverage (TTM)	-75.37	10.05	11.21	13.80

Profitability Ratios (%)
Gross Margin (TTM)	18.95%	26.58%	32.32%	45.21%
Gross Margin - 5 Yr Avg	20.23%	25.52%	31.54%	44.91%
EBITD Margin (TTM)	-47.04%	16.26%	22.23%	24.43%
EBITD Margin - 5 Yr Avg	-5.92%	15.46%	18.43%	22.84%
Operating Margin (TTM)	-51.10%	12.93%	16.99%	20.63%
Operating Margin - 5 Yr Avg	-4.21%	12.28%	13.64%	18.28%
Pretax Margin (TTM)	-51.78%	12.37%	15.86%	17.95%
Pretax Margin - 5 Yr Avg	-5.39%	11.83%	12.57%	17.10%
Net Profit Margin (TTM)	-52.07%	8.43%	11.55%	13.65%
Net Profit Margin - 5 Yr Avg	-3.37%	7.88%	8.64%	12.10%
Effective Tax Rate (TTM)	-	31.50%	28.04%	28.45%
Effective Tax rate - 5 Yr Avg	-	32.54%	29.65%	29.92%

Management Effectiveness (%)
Return on Assets (TTM)	-44.62%	7.34%	8.05%	8.54%
Return on Assets - 5 Yr Avg	-4.68%	8.99%	7.49%	8.40%
Return on Investment (TTM)	-73.41%	6.14%	5.86%	7.90%
Return on Investment - 5 Yr Avg	-14.83%	7.32%	5.78%	8.27%
Return on Equity (TTM)	-112.01%	12.34%	18.78%	19.72%
Return on Equity - 5 Yr Avg	-20.11%	16.56%	17.45%	20.06%

Efficiency
Revenue/Employee (TTM)	131,212.40	330,250.78	613,510.56	927,613.77
Net Income/Employee (TTM)	-68,327.44	26,934.95	82,492.56	116,121.92
Receivables Turnover (TTM)	7.88	7.02	8.71	13.25
Inventory Turnover (TTM)	2.18	4.69	8.16	14.53
Asset Turnover (TTM)	0.86	0.96	0.82	0.93

Annual Ratios

Financials in: USD (mil)

Except for share items (millions) and per share items (actual units)

	31-Dec-2012	31-Dec-2011	31-Dec-2010	31-Dec-2009	31-Dec-2008
Financial Strength
Current Ratio	2.21	1.48	1.24	1.09	1.13
Quick/Acid Test Ratio	0.95	0.69	0.64	0.36	0.28
Working Capital	6.6	5.7	5.2	3.7	6.8
Long Term Debt/Equity	0.00	0.00	0.01	0.01	0.04
Total Debt/Equity	0.08	0.14	0.13	0.22	0.24
Long Term Debt/Total Capital	0.00	0.00	0.01	0.01	0.03
Total Debt/Total Capital	0.08	0.12	0.11	0.18	0.19
Payout Ratio	0.00%	0.00%	0.00%	0.00%	0.00%
Effective Tax Rate	-	-	-	-	4.72%
Total Capital	8.1	9.9	11.2	11.6	16.8

Efficiency
Asset Turnover	1.08	2.00	1.82	1.15	1.11
Inventory Turnover	2.70	4.95	4.15	3.40	3.21
Days In Inventory	135.14	73.75	88.00	107.48	113.78
Receivables Turnover	7.90	10.89	12.08	9.99	6.51
Days Receivables Outstanding	46.23	33.52	30.20	36.54	56.08
Revenue/Employee	195,664	-	424,691	349,355	299,373
Operating Income/Employee	-58,434	-	-15,080	-46,700	33,060
EBITDA/Employee	-51,319	-	-6,096	-39,040	41,507

Profitability
Gross Margin	23.84%	23.82%	18.39%	9.25%	29.82%
Operating Margin	-29.86%	-1.44%	-3.55%	-13.37%	11.04%
EBITDA Margin	-26.23%	0.45%	-1.44%	-11.17%	13.86%
EBIT Margin	-29.86%	-1.44%	-3.55%	-13.37%	11.04%
Pretax Margin	-30.44%	-1.66%	-3.81%	-15.61%	8.81%
Net Profit Margin	-21.61%	-0.15%	-2.38%	-12.40%	8.40%
R&D Expense/Revenue	1.05%	1.32%	1.61%	1.56%	1.24%
COGS/Revenue	76.16%	76.18%	81.61%	90.75%	70.18%
SG&A Expense/Revenue	52.81%	24.63%	22.69%	25.53%	27.95%

Management Effectiveness
Return on Assets	-23.42%	-0.29%	-4.31%	-14.27%	9.35%
Return on Equity	-59.14%	-0.92%	-19.55%	-75.27%	49.65%

Valuation
Free Cash Flow/Share	-0.88	-0.15	-0.54	-0.53	0.45
Operating Cash Flow/Share	-0.86	-0.13	-0.44	-0.46	0.66

Current Market Multiples
Market Cap/Earnings (TTM)	-0.52
Market Cap/Equity (MRQ)	1.25
Market Cap/Revenue (TTM)	0.28
Market Cap/EBIT (TTM)	-0.55
Market Cap/EBITDA (TTM)	-0.60
Enterprise Value/Earnings (TTM)	-0.38
Enterprise Value/Equity (MRQ)	0.91
Enterprise Value/Revenue (TTM)	0.20
Enterprise Value/EBIT (TTM)	-0.40
Enterprise Value/EBITDA (TTM)	-0.43

Stock Report

Stock Snapshot

Traded: Over The Counter: SPIR

As of 27-Sep-2013 US Dollars

Recent Price	$0.45	EPS	$-0.56
52 Week High	$0.99	Price/Sales	0.19
52 Week Low	$0.11	Price/Book	0.55
Avg. Volume (mil)	0.02	Beta	1.57
Market Value (mil)	$4.15

	Price % Change	Rel S&P 500%
4 Week	67.04%	61.24%
13 Week	-19.45%	-23.52%
52 Week	-14.91%	-27.21%
Year to Date	-9.98%	-24.11%

Stock History

Market Cap History
	30-Jun-13	% Chg	31-Mar-13	% Chg	31-Dec-12	% Chg	30-Sep-12	% Chg	30-Jun-12	% Chg
Total Common Shares Outstanding	9	0.0	9	1.6	9	5.8	9	0.0	9	0.0
Market Cap	5.2	-18.8	6.4	39.9	4.5	0.0	4.5	-10.9	5.1	-49.1

Yearly Price History
	2013	% Chg	2012	% Chg	2011	% Chg	2010	% Chg	2009	% Chg
High Price	0.99	-41.8	1.70	-72.6	6.20	-8.6	6.78	-24.7	9.00	-65.1
Low Price	0.11	-66.5	0.33	-38.1	0.53	-83.3	3.17	-3.4	3.28	11.6
Year End Price	0.45	-10.0	0.50	-20.5	0.63	-87.9	5.21	-2.8	5.36	4.3

Monthly Price History
Price Ending Date	Open	High	Low	Close	Volume
27-Sep-13	0.27	0.52	0.25	0.45	379,156
30-Aug-13	0.30	0.36	0.24	0.27	290,231
31-Jul-13	0.53	0.54	0.11	0.27	556,006
28-Jun-13	0.62	0.62	0.52	0.56	93,647
31-May-13	0.64	0.85	0.50	0.62	703,880
30-Apr-13	0.65	0.75	0.57	0.62	80,449
28-Mar-13	0.88	0.89	0.59	0.69	178,645
28-Feb-13	0.55	0.99	0.48	0.75	292,295
31-Jan-13	0.55	0.72	0.52	0.57	272,669
31-Dec-12	0.46	0.58	0.40	0.50	353,113
30-Nov-12	0.52	0.56	0.33	0.48	239,516
31-Oct-12	0.50	0.60	0.49	0.52	173,992
28-Sep-12	0.50	0.61	0.50	0.53	170,192

Standard & Poor’s

United States of America Long-Term Rating Lowered To 'AA+' Due To Political Risks, Rising Debt Burden; Outlook Negative

Publication date: 05-Aug-2011 20:13:14 EST

· We have lowered our long-term sovereign credit rating on the United States of America to 'AA+' from 'AAA' and affirmed the 'A-1+' short-term rating.

· We have also removed both the short- and long-term ratings from CreditWatch negative.

· The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics.

· More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.

· Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government's debt dynamics any time soon.

· The outlook on the long-term rating is negative. We could lower the long-term rating to 'AA' within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.

TORONTO (Standard & Poor's) Aug. 5, 2011--Standard & Poor's Ratings Services said today that it lowered its long-term sovereign credit rating on the United States of America to 'AA+' from 'AAA'. Standard & Poor's also said that the outlook on the long-term rating is negative. At the same time, Standard & Poor's affirmed its 'A-1+' short-term rating on the U.S. In addition, Standard & Poor's removed both ratings from CreditWatch, where they were placed on July 14, 2011, with negative implications.

The transfer and convertibility (T&C) assessment of the U.S.--our assessment of the likelihood of official interference in the ability of U.S.-based public- and private-sector issuers to secure foreign exchange for

debt service--remains 'AAA'.

We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade.

Our lowering of the rating was prompted by our view on the rising public debt burden and our perception of greater policymaking uncertainty, consistent with our criteria (see "Sovereign Government Rating Methodology and Assumptions ," June 30, 2011, especially Paragraphs 36-41). Nevertheless, we view the U.S. federal government's other economic, external, and monetary credit attributes, which form the basis for the sovereign rating, as broadly unchanged.

We have taken the ratings off CreditWatch because the Aug. 2 passage of the Budget Control Act Amendment of 2011 has removed any perceived immediate threat of payment default posed by delays to raising the government's debt ceiling. In addition, we believe that the act provides sufficient clarity to allow us to evaluate the likely course of U.S. fiscal policy for the next few years.

The political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year's wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements,

the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.

Our opinion is that elected officials remain wary of tackling the structural issues required to effectively address the rising U.S. public debt burden in a manner consistent with a 'AAA' rating and with 'AAA' rated sovereign peers (see Sovereign Government Rating Methodology and Assumptions," June 30, 2011, especially Paragraphs 36-41). In our view, the difficulty in framing a consensus on fiscal policy weakens the government's ability to manage public finances and diverts attention from the debate over how to achieve more balanced and dynamic economic growth in an era of fiscal stringency and private-sector deleveraging (ibid). A new political consensus might (or might not) emerge after the 2012 elections, but we believe that by then, the government debt burden will likely be higher, the needed medium-term fiscal adjustment potentially greater, and the inflection point on the U.S. population's demographics and other age-related spending drivers closer at hand (see "Global Aging 2011: In The U.S., Going Gray Will Likely Cost Even More Green, Now," June 21, 2011).

Standard & Poor's takes no position on the mix of spending and revenue measures that Congress and the Administration might conclude is appropriate for putting the U.S.'s finances on a sustainable footing.

The act calls for as much as $2.4 trillion of reductions in expenditure growth over the 10 years through 2021. These cuts will be implemented in two steps: the $917 billion agreed to initially, followed by an additional $1.5 trillion that the newly formed Congressional Joint Select Committee on Deficit Reduction is supposed to recommend by November 2011. The act contains no measures to raise taxes or otherwise enhance revenues, though the committee could recommend them.

The act further provides that if Congress does not enact the committee's recommendations, cuts of $1.2 trillion will be implemented over the same time period. The reductions would mainly affect outlays for civilian discretionary spending, defense, and Medicare. We understand that this fall-back mechanism is designed to encourage Congress to embrace a more balanced mix of expenditure savings, as the committee might recommend.

We note that in a letter to Congress on Aug. 1, 2011, the Congressional Budget Office (CBO) estimated total budgetary savings under the act to be at least $2.1 trillion over the next 10 years relative to its baseline assumptions. In updating our own fiscal projections, with certain modifications outlined below, we have relied on the CBO's latest "Alternate Fiscal Scenario" of June 2011, updated to include the CBO assumptions contained in its Aug. 1 letter to Congress. In general, the CBO's "Alternate Fiscal Scenario" assumes a continuation of recent Congressional action overriding existing law.

We view the act's measures as a step toward fiscal consolidation. However, this is within the framework of a legislative mechanism that leaves open the details of what is finally agreed to until the end of 2011, and Congress and the Administration could modify any agreement in the future. Even assuming that at least $2.1 trillion of the spending reductions the act envisages are implemented, we maintain our view that the U.S. net general government debt burden (all levels of government combined, excluding liquid financial assets) will likely continue to grow. Under our revised base case fiscal scenario--which we consider to be consistent with a 'AA+' long-term rating and a negative outlook--we now project that net general government debt would rise from an estimated 74% of GDP by the end of 2011 to 79% in 2015 and 85% by 2021. Even the projected 2015 ratio of sovereign indebtedness is high in relation to those of peer credits and, as noted, would continue to rise under the act's revised policy settings.

Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act. Key macroeconomic assumptions in the base case scenario include trend real GDP growth of 3% and consumer price inflation near 2% annually over the decade.

Our revised upside scenario--which, other things being equal, we view as consistent with the outlook on the 'AA+' long-term rating being revised to stable--retains these same macroeconomic assumptions. In addition, it incorporates $950 billion of new revenues on the assumption that the 2001 and 2003 tax cuts for high earners lapse from 2013 onwards, as the Administration is advocating. In this scenario, we project that the net general government debt would rise from an estimated 74% of GDP by the end of 2011 to 77% in 2015 and to 78% by 2021.

Our revised downside scenario--which, other things being equal, we view as being consistent with a possible further downgrade to a 'AA' long-term rating--features less-favorable macroeconomic assumptions, as outlined below and also assumes that the second round of spending cuts (at least $1.2 trillion) that the act calls for does not occur. This scenario also assumes somewhat higher nominal interest rates for U.S. Treasuries. We still believe that the role of the U.S. dollar as the key reserve currency confers a government funding advantage, one that could change only slowly over time, and that Fed policy might lean toward continued loose monetary policy at a time of fiscal tightening. Nonetheless, it is possible that interest rates could rise if investors re-price relative risks. As a result, our alternate scenario factors in a 50 basis point (bp)-75 bp rise in 10-year bond yields relative to the base and upside cases from 2013 onwards. In this scenario, we project the net public debt burden would rise from 74% of GDP in 2011 to 90% in 2015 and to 101% by 2021.

Our revised scenarios also take into account the significant negative revisions to historical GDP data that the Bureau of Economic Analysis announced on July 29. From our perspective, the effect of these revisions underscores two related points when evaluating the likely debt trajectory of the U.S. government. First, the revisions show that the recent recession was deeper than previously assumed, so the GDP this year is lower than previously thought in both nominal and real terms. Consequently, the debt burden is slightly higher. Second, the revised data highlight the sub-par path of the current economic recovery when compared with rebounds following previous post-war recessions. We believe the sluggish pace of the current economic recovery could be consistent with the experiences of countries that have had financial crises in which the slow process of debt deleveraging in the private sector leads to a persistent drag on demand. As a result, our downside case scenario assumes relatively modest real trend GDP growth of 2.5% and inflation of near 1.5% annually going forward.

When comparing the U.S. to sovereigns with 'AAA' long-term ratings that we view as relevant peers--Canada, France, Germany, and the U.K.--we also observe, based on our base case scenarios for each, that the trajectory of the U.S.'s net public debt is diverging from the others. Including the U.S., we estimate that these five sovereigns will have net general government debt to GDP ratios this year ranging from 34% (Canada) to 80% (the U.K.), with the U.S. debt burden at 74%. By 2015, we project that their net public debt to GDP ratios will range between 30% (lowest, Canada) and 83% (highest, France), with the U.S. debt burden at 79%. However, in contrast with the U.S., we project that the net public debt burdens of these other sovereigns will begin to decline, either before or by 2015.

Standard & Poor's transfer T&C assessment of the U.S. remains 'AAA'. Our T&C assessment reflects our view of the likelihood of the sovereign restricting other public and private issuers' access to foreign exchange needed to meet debt service. Although in our view the credit standing of the U.S. government has deteriorated modestly, we see little indication that official interference of this kind is entering onto the policy agenda of either Congress or the Administration. Consequently, we continue to view this risk as being highly remote.

The outlook on the long-term rating is negative. As our downside alternate fiscal scenario illustrates, a higher public debt trajectory than we currently assume could lead us to lower the long-term rating again. On the other hand, as our upside scenario highlights, if the recommendations of the Congressional Joint Select Committee on Deficit Reduction--independently or coupled with other initiatives, such as the lapsing of the 2001 and 2003 tax cuts for high earners--lead to fiscal consolidation measures beyond the minimum mandated, and we believe they are likely to slow the deterioration of the government's debt dynamics, the long-term rating could stabilize at 'AA+'.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.61.28
UK Pound	1	Rs.99.03
Euro	1	Rs.83.80

INFORMATION DETAILS

Report Prepared by :

MNL

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
----	NB	New Business	----

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.