1 1998 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-QSB ( Mark One) [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 1998. or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ________________ to __________________ Commission file number: 0-12742 SPIRE CORPORATION - -------------------------------------------------------------------------------- (Exact Name of Small Business Issuer as Specified in Its Charter) MASSACHUSETTS 04-2457335 - -------------------------------------------------------------------------------- (State or Other Jurisdiction (I.R.S. Employer of Incorporation or Organization Identification No.) ONE PATRIOTS PARK, BEDFORD, MASSACHUSETTS 01730-2396 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) 781-275-6000 - -------------------------------------------------------------------------------- (Issuer's Telephone Number, Including Area Code) Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. There were 3,243,766 outstanding shares of the issuer's only class of common equity, Common Stock, $.01 par value, on July 31, 1998. Transitional Small Business Disclosure Format (Check One): Yes No X ----- ----- 2 SPIRE CORPORATION INDEX PAGE NUMBER ----------- PART I - FINANCIAL INFORMATION - ------------------------------ Condensed Consolidated Balance Sheets at June 30, 1998 (unaudited) and December 31, 1997 3 Condensed Consolidated Statements of Operations For the Three Months Ended June 30, 1998 and 1997 and For the Six Months Ended June 30, 1998 and 1997 (unaudited) 4 Condensed Consolidated Statements of Cash Flows For the Six Months Ended June 30, 1998 and 1997 (unaudited) 5 Notes to Condensed Consolidated Financial Statements 6 Management's Discussion and Analysis of Financial 7 - 11 Condition and Results of Operations PART II - OTHER INFORMATION - --------------------------- Item 1. Legal Proceedings 11 Item 4. Submission of Matters to a Vote of Security Holders 11 Item 6. Exhibits and Reports on Form 8-K 11 3 SPIRE CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS JUNE 30, DECEMBER 31, 1998 1997 ------------ ------------ ASSETS CURRENT ASSETS Cash and cash equivalents $ 523,050 $ 1,695,727 Accounts receivable, trade: Amounts billed 2,631,099 3,012,701 Retainage 57,874 69,772 Unbilled costs 502,162 621,760 ----------- ----------- 3,191,135 3,704,233 Less allowance for doubtful accounts 225,000 40,000 ----------- ----------- Net accounts receivable 2,966,135 3,664,233 ----------- ----------- Inventories (Note 2) 1,749,941 988,580 Deferred income taxes 300,000 300,000 Prepaid expenses and other current assets 595,692 501,650 ----------- ----------- Total current assets 6,134,818 7,150,190 ----------- ----------- Property and equipment 24,614,915 24,015,445 Less accumulated depreciation and amortization 19,690,663 19,242,437 ----------- ----------- Net property and equipment 4,924,252 4,773,008 ----------- ----------- Computer software costs (less accumulated amortization, $817,567 in 1998 and $810,466 in 1997) 44,034 51,135 Patents (less accumulated amortization, $570,110 in 1998 and $542,344 in 1997) 259,526 274,810 Other assets 17,221 19,679 ----------- ----------- 320,781 345,624 ----------- ----------- $11,379,851 $12,268,822 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 835,775 $ 903,581 Accrued liabilities 1,503,117 859,093 Advances on contracts in progress 567,952 410,370 ----------- ----------- Total current liabilities 2,906,844 2,173,044 ----------- ----------- STOCKHOLDERS' EQUITY Common stock, $.01 par value; shares authorized 20,000,000; issued 3,795,926 shares in 1998 and 3,757,082 shares in 1997 37,959 37,571 Additional paid-in capital 9,780,494 9,645,468 Retained earnings (accumulated deficit) (125,758) 1,632,427 ----------- ----------- 9,692,695 11,315,466 Treasury stock at cost, 552,160 shares (1,219,688) (1,219,688) ----------- ----------- Total stockholders' equity 8,473,007 10,095,778 ----------- ----------- $11,379,851 $12,268,822 =========== =========== See accompanying notes to condensed consolidated financial statements. 4 SPIRE CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30, ------------------------------- ------------------------------- 1998 1997 1998 1997 ----------- ----------- ----------- ----------- NET SALES AND REVENUES Contract research, service and license revenues $ 2,619,588 $ 3,807,185 $ 5,735,474 $ 6,940,676 Sales of manufacturing equipment 825,703 2,625,663 2,152,343 3,942,871 ----------- ----------- ----------- ----------- Total sales and revenues 3,445,291 6,432,848 7,887,817 10,883,547 ----------- ----------- ----------- ----------- COSTS AND EXPENSES Cost of contract research, services and licenses 2,328,026 2,447,852 4,535,204 4,521,958 Cost of manufacturing equipment 763,599 1,759,344 1,567,360 2,615,452 Selling, general and administrative expenses 2,135,160 1,424,004 3,552,925 2,797,812 ----------- ----------- ----------- ----------- Total costs and expenses 5,226,785 5,631,200 9,655,489 9,935,222 ----------- ----------- ----------- ----------- EARNINGS (LOSS) FROM OPERATIONS (1,781,494) 801,648 (1,767,672) 948,325 Interest income, net 6,150 29 18,487 3,646 ----------- ----------- ----------- ----------- Earnings (loss) before income taxes (1,775,344) 801,677 (1,749,185) 951,971 Income tax expense -- 100,000 9,000 100,000 ----------- ----------- ----------- ----------- NET EARNINGS (LOSS) $(1,775,344) $ 701,677 $(1,758,185) $ 851,971 =========== =========== =========== =========== EARNINGS (LOSS) PER SHARE OF COMMON STOCK - BASIC $ (0.55) $ 0.23 $ (0.54) $ 0.28 =========== =========== =========== =========== EARNINGS (LOSS) PER SHARE OF COMMON STOCK - DILUTED $ (0.55) $ 0.22 $ (0.54) $ 0.27 =========== =========== =========== =========== Weighted average number of common shares outstanding - basic 3,241,291 3,031,294 3,227,989 3,026,464 =========== =========== =========== =========== Weighted average number of common and common equivalent shares outstanding - diluted 3,241,291 3,148,554 3,227,989 3,143,724 =========== =========== =========== =========== See accompanying notes to condensed consolidated financial statements. 5 SPIRE CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS SIX MONTHS ENDED JUNE 30, ------------------------------- 1998 1997 ----------- ----------- Cash flows from operating activities: Net earnings (loss) $(1,758,185) $ 851,971 Adjustments to reconcile net earnings (loss) to net cash used in operating activities: Depreciation and amortization 483,093 583,471 Changes in assets and liabilities: Accounts receivable 698,098 (506,608) Inventories (761,361) (706,756) Prepaid expenses and other current assets (94,042) (17,887) Accounts payable and accrued liabilities 576,218 65,387 Advances on contracts in progress 157,582 (1,076,876) ----------- ----------- Net cash used in operating activities (698,597) (807,298) ----------- ----------- Cash flows from investing activities: Additions to property and equipment (599,470) (231,468) Increase in patent costs (12,482) (18,986) Increase in software production costs -- (34,229) Other assets 2,458 208,167 ----------- ----------- Net cash used in investing activities (609,494) (76,516) ----------- ----------- Cash flows from financing activities: Exercise of stock options 135,414 89,733 Repurchase of common stock -- (20,625) ----------- ----------- Net cash provided by financing activities 135,414 69,108 ----------- ----------- Net decrease in cash and cash equivalents (1,172,677) (814,706) Cash and cash equivalents, beginning of period 1,695,727 970,997 ----------- ----------- Cash and cash equivalents, end of period $ 523,050 $ 156,291 =========== =========== Supplemental disclosures of cash flow information: Cash paid during the year for: Interest expense $ 723 $ 5,118 =========== =========== Income taxes $ 44,400 $ 4,000 =========== =========== See accompanying notes to condensed consolidated financial statements. 6 SPIRE CORPORATION AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 1998 (1) INTERIM FINANCIAL STATEMENTS In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to fairly present the Company's financial position as of June 30, 1998 and the results of operations and changes in cash flows for the six months ended June 30, 1998 and 1997. The results of operations for the six months ended June 30, 1998 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 1998. Certain amounts from the second quarter 1997 financial statements have been reclassified to conform to the second quarter 1998 presentation. The accounting policies followed by the Company are set forth in Note 2 to the Company's consolidated financial statements in its annual report on Form 10-KSB for the year ended December 31, 1997. The financial statements, with the exception of the December 31, 1997 balance sheet, are unaudited and have not been examined by independent public accountants. (2) INVENTORIES Inventories consist of the following: June 30, December 31, 1998 1997 ---------- ---------- Raw materials $ 832,323 $ 736,930 Work in process 917,618 251,650 ---------- ---------- $1,749,941 $ 988,580 ========== ========== (3) EARNINGS PER SHARE The reconciliation of the denominators of the basic and diluted earnings (loss) per share computations for the Company's reported earnings (loss) is as follows: Three Months Ended June 30, Six Months Ended June 30, --------------------------- -------------------------- 1998 1997 1998 1997 --------- --------- --------- --------- Weighted average number of shares outstanding - basic 3,241,291 3,031,294 3,227,989 3,026,464 Incremental shares from the assumed exercise of stock options -- 117,260 -- 117,260 --------- --------- --------- --------- Weighted average number of shares outstanding - diluted 3,241,291 3,148,554 3,227,989 3,143,724 ========= ========= ========= ========= 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW Spire develops, manufactures and markets highly-engineered photovoltaic module manufacturing equipment and optoelectronic products and provides biomedical processing services. Spire is the world's leader in the design and manufacture of specialized equipment for the production of terrestrial photovoltaic modules from solar cells, with its equipment installed in 140 factories and in 38 countries. The Company also offers certain optoelectronic products and is continuing to develop additional advanced optoelectronic products for telecommunications, biomedical and electronics applications, including solar cells used to power satellites. Spire's value-added biomedical processing services offer surface treatments to enhance the durability or the antimicrobial characteristics of orthopedic and other medical devices. The Company's net sales and revenues for the quarter ended June 30, 1998 declined, compared to the quarter ended June 30, 1997. RESULTS OF OPERATIONS The following table sets forth certain items as a percentage of net sales and revenues for the periods presented: Three Months Ended June 30, Six Months Ended June 30, --------------------------- ------------------------- 1998 1997 1998 1997 ----- ----- ----- ----- Net sales and revenues 100.0% 100.0% 100.0% 100.0% Cost of sales and revenues 89.7 65.4 77.4 65.6 ----- ----- ----- ----- Gross profit 10.3 34.6 22.6 34.4 Selling, general and administrative expenses 62.0 22.1 45.0 25.7 ----- ----- ----- ----- Earnings (loss) from operations (51.7) 12.5 (22.4) 8.7 Earnings (loss) before income taxes (51.5) 12.5 (22.2) 8.7 Income tax expense -- 1.6 0.1 0.9 ----- ----- ----- ----- Net (loss) earnings (51.5)% 10.9% (22.3)% 7.8% ===== ===== ===== ===== THREE AND SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO THREE AND SIX MONTHS ENDED JUNE 30, 1997 Net Sales and Revenues Net sales and revenues decreased $2,988,000 or 46% for the three months ended June 30, 1998 to $3,445,000, compared to $6,433,000 for the three months ended June 30, 1997. Contract research, service and license revenues decreased $1,188,000 or 31% to $2,619,000 for the three months ended June 30, 1998 compared to $3,807,000 for 1997. Manufacturing equipment sales decreased $1,800,000 or 69% to $826,000 for 1998, compared to $2,626,000 for 1997. The following table categorizes the Company's net sales and revenues for the periods presented: Three Months Ended June 30, ---------------------------------------------- 1998 1997 Change ---------- ---------- ---------- Contract research, service and license revenues $2,619,000 $3,807,000 (31%) Manufacturing equipment sales 826,000 2,626,000 (69%) ---------- ---------- Net sales and revenues $3,445,000 $6,433,000 (46%) ========== ========== 8 Net sales and revenues decreased $2,996,000 or 28% for the six months ended June 30, 1998 to $7,888,000, compared to $10,884,000 for the six months ended June 30, 1997. Contract research, service and license revenues decreased $1,205,000 or 17% to $5,736,000 for the six months ended June 30, 1998 compared to $6,941,000 for 1997. Manufacturing equipment sales decreased $1,791,000 or 45% to $2,152,000 for 1998, compared to $3,943,000 for 1997. The following table categorizes the Company's net sales and revenues for the periods presented: Six Months Ended June 30, ----------------------------------------------- 1998 1997 Change ----------- ---------- ---------- Contract research, service and license revenues $ 5,736,000 $ 6,941,000 (17%) Manufacturing equipment sales 2,152,000 3,943,000 (45%) ---------- ----------- Net sales and revenues $ 7,888,000 $10,884,000 (28%) ---------- ----------- The decline in manufacturing equipment sales for the three and six month periods ended June 30, 1998 is primarily due to a decline in shipments to the Far East in 1998. The decline in contract research, service and license revenues for the three and six month periods ended June 30, 1998 is primarily due to revenue of $600,000 associated with a one-time technology transfer in the second quarter of 1997, a decline in revenues from United States government contracts in 1998, and a revision to government contract overhead rates for 1997 and 1998, which came in lower than billed rates and resulted in a reserve of $70,000. Cost of Sales and Revenues The cost of sales and revenues decreased $1,115,000 to $3,092,000, but increased to 90% of net sales and revenues, for the quarter ended June 30, 1998, compared to $4,207,000 or 65% of net sales and revenues for the quarter ended June 30, 1997. The cost of contract research, service and license revenues decreased $120,000 to $2,328,000, but increased to 89% of related revenues, for the quarter ended June 30, 1998, compared to $2,448,000 or 64% of related revenues for the quarter ended June 30, 1997. Cost of manufacturing equipment sales decreased $995,000 to $764,000, but increased to 92% of related sales, for the quarter ended June 30, 1998, compared to $1,759,000 or 67% of related sales, for the quarter ended June 30, 1997. The following table categorizes the Company's cost of sales and revenues for the periods presented, stated in dollars and as a percentage of related sales and revenues: Three Months Ended June 30, ------------------------------------------------------- 1998 % 1997 % ---------- --------- ---------- -------- Contract research, service and license revenues $2,328,000 89% $2,448,000 64% Manufacturing equipment sales 764,000 92% 1,759,000 67% ---------- ---------- Total cost of sales and revenues $3,092,000 90% $4,207,000 65% ========== ========== The cost of sales and revenues decreased $1,034,000 to $6,103,000, but increased to 77% of net sales and revenues, for the six months ended June 30, 1998, compared to $7,137,000 or 66% of net sales and revenues for the six months ended June 30, 1997. The cost of contract research, service and license revenues increased $13,000 to $4,535,000, and increased to 79% of related revenues, for the six months ended June 30, 1998, compared to $4,522,000 or 65% of related revenues for the six months ended June 30, 1997. Cost of manufacturing equipment sales decreased $1,047,000 to $1,568,000, but increased to 73% of related sales, for the six months ended June 30, 1998, compared to $2,615,000 or 66% of related sales, for the six months ended June 30, 1997. 9 The following table categorizes the Company's cost of sales and revenues for the periods presented, stated in dollars and as a percentage of related sales and revenues: Six Months Ended June 30, ------------------------------------------------------- 1998 % 1997 % ---------- --------- ---------- -------- Contract research, service and license revenues $4,535,000 79% $4,522,000 65% Manufacturing equipment sales 1,568,000 73% 2,615,000 66% ---------- ---------- Total cost of sales and revenues $6,103,000 77% $7,137,000 66% ========== ========== For both the three and six month periods ended June 30, 1998, the increase in total cost of sales and revenues as a percentage of related sales and revenues is due to lower sales volume in 1998 available to spread fixed cost of sales over, the booking of $200,000 for the possibility that final payment from a customer on a particular photovoltaic machine would not be received, and a change in product mix from 1997, particularly related to a technology transfer in the second quarter of 1997 for which revenue of $600,000 was recognized. Selling, General and Administrative Expenses Selling, general and administrative expenses for the quarter ended June 30, 1998 increased $711,000 to $2,135,000, and increased to 62% of sales and revenues, compared to $1,424,000 or 22% of sales and revenues for the quarter ended June 30, 1997. Selling, general and administrative expenses increased due to the accrual of $547,000 of non-recurring costs related to the settlement with the government (See Part II, Item 1. Legal Proceedings). Also impacting selling, general and administrative expenses were legal costs in this matter amounting to nearly $250,000. Depreciation and Amortization Expenses Depreciation and amortization expenses for the six months ended June 30, 1998 decreased $100,000 or 17% to $483,000, compared to $583,000 for the six months ended June 30, 1997. Capital expenditures increased $368,000 or 159% to $599,000 for the six months ended June 30, 1998, compared to $231,000 for the six months ended June 30, 1997. Interest The Company earned $6,000 in interest income for the quarter ended June 30, 1998, compared to an insignificant amount for the quarter ended June 30, 1997. The Company incurred insignificant interest expense in both periods. Income Taxes The Company recorded no income tax expense for the quarter ended June 30, 1998 and income tax expense of $100,000 for the quarter ended June 30, 1997. At June 30, 1998, the Company had gross deferred tax assets of $300,000, which represents the amount of tax benefits of existing deductible temporary differences or carryforwards that are more likely than not to be realized through the generation of sufficient future taxable income within the carryforward period. Net Earnings (Loss) The Company reported a net loss for the quarter ended June 30, 1998 of $1,775,000, compared to net earnings of $702,000 for the quarter ended June 30, 1997. The decline in the Company's profitability resulted in large part from non-recurring charges accrued in the second quarter of 1998 associated with the settlement (See Part II, Item 1. Legal Proceedings), and approximately a $3,000,000 decrease in net sales and revenues when compared with the prior period, including $600,000 of revenues associated with a technology transfer in the second quarter of 1997. LIQUIDITY AND CAPITAL RESOURCES To date the Company has been able to fund its liquidity requirements using cash from operations and available lines of credit. On April 7, 1998, the Company amended and extended its revolving credit agreement with Silicon Valley Bank. This agreement provides for a $2 million revolving credit facility, based upon eligible accounts receivable requirements. 10 This line of credit has been established to provide the Company with resources for general working capital purposes and Standby Letter of Credit Guarantees for foreign customers. The line is secured by all assets of the Company. Interest on the line is at the Bank's prime rate plus one-half of one percent. The line contains covenants including provisions relating to profitability and net worth. As of June 30, 1998, the Company was in default of certain financial covenants; however the Company anticipates receiving a waiver of these defaults from the Bank. As of June 30, 1998, the Company had no outstanding debt under this revolving credit facility. The Company has also entered into a $1 million equipment leasing line with Silicon Valley Bank. The Company believes it has sufficient resources to finance its current operations for the foreseeable future through working capital, its existing line of credit and available lease arrangements. Cash and cash equivalents decreased $1,173,000 to $523,000 at June 30, 1998, from $1,696,000 at December 31, 1997. To date there are no material commitments by the Company for capital expenditures. At June 30, 1998, the Company's accumulated deficit was $126,000, compared to retained earnings of $1,632,000 as of December 31, 1997. Working capital as of June 30, 1998 decreased 35% to $3,228,000, compared to $4,977,000 as of December 31, 1997. RECENT ACCOUNTING PRONOUNCEMENTS In June 1997, the Financial Accounting Standards Board issued SFAS 131, "Disclosures about Segments of an Enterprise and Related Information," which establishes standards for the way that public business enterprises report selected information about operating segments in annual financial statements and requires that those enterprises report selected information about operating segments in interim financial reports to stockholders. It also establishes standards for related disclosures about products and services, geographic areas and major customers. SFAS 131, which becomes effective for the Company in its year ending December 31, 1998, is not expected to have a material impact on the Company's results of operations. The Company is in the process of determining the impact of SFAS 131 on its footnote disclosures. In March 1998, the American Institute of Certified Public Accountants issued Statement of Position 98-1, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use" (SOP 98-1), which establishes guidelines for the accounting for the costs of all computer software developed or obtained for internal use. SOP 98-1 is effective for the Company in 1999 and is not expected to have a material effect on the Company's financial statements. In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 133, Accounting for Derivative Instruments and Hedging Activities, which establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as "derivatives") and for hedging activities. This statement requires that an entity recognize all derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value. The statement also sets forth the criteria for determining whether a derivative may be specifically designed as a hedge of a particular exposure with the intent of measuring the effectiveness of that hedge in the statement of operations. SFAS No. 133 is effective for all fiscal quarters of fiscal years beginning after June 15, 1999. Management does not believe that the adoption of this statement will have a material impact on the Company's consolidated financial position, results of operations or cash flows. IMPACT OF THE YEAR 2000 ISSUE The Year 2000 Issue refers to potential problems with computer systems or any equipment with computer chips or software that use dates where the date has been stored as just two digits (e.g., 98 for 1998). On January 1, 2000, any clock or date recording mechanism incorporating date sensitive software which uses only two digits to represent the year may recognize a date using 00 as the year 1900 rather than the year 2000. This could result in a system failure or miscalculations causing disruption of operations, including, among other things, a temporary inability to process transactions, send invoices, or engage in similar business activities. The Company is in the process of conducting a review of its internal information systems to determine the extent of any Year 2000 problem. The Company is still gathering information, but based on such review to date, the Company does not believe that the impact of any Year 2000 problem will be material, because its principal information systems appear to correctly define the year 2000. Although there exists the possibility that Year 2000 issues will be identified, based on 11 such review to date, the Company does not currently expect that any such problems will have a material adverse effect on the Company's future operating results or financial condition. THE FOREGOING STATEMENTS MAY INCLUDE FORWARD-LOOKING STATEMENTS SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED IN THE FORWARD-LOOKING STATEMENTS. FACTORS THAT MIGHT CAUSE SUCH A DIFFERENCE INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED OR REFERRED TO IN THIS REPORT AND IN ITEM 6 OF THE ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED DECEMBER 31, 1997. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS On March 2, 1998 the Company received a letter from the Office of the United States Attorney for the Eastern District of Virginia stating that it was considering the commencement of a civil action concerning seven research initiatives undertaken by the Company in the period from 1990 to the present. The letter alleged that, in certain instances, the Company had failed to inform the government of pending or previously submitted proposals for work the government alleges was related to proposals which were funded. Rather than continuing to incur the legal costs and expend management resources in litigating this matter the Company settled with the government for $547,000. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS On May 21, 1998, the Company held a Special Meeting in Lieu of Annual Meeting of Stockholders to vote on the following proposal: To fix the number of directors at six and to elect six members of the Board of Directors. Nominees for Director were: (a) Michael T. Eckhart, (b) A. John Gale, (c) Udo Henseler, (d) Roger G. Little, (e) Roger W. Redmond, (f) John A. Tarello. Shares Shares Voting Against Shares Broker Proposal Voting For or Authority Withheld Abstaining Non-Votes ----------------------- ------------------ --------------------------- ------------------- -------------------- Michael T. Eckhart 3,136,498 34,055 0 66,163 A. John Gale 3,137,898 32,655 0 66,163 Udo Henseler 3,136,898 33,655 0 66,163 Roger G. Little 3,137,898 32,655 0 66,163 Roger W. Redmond 3,136,898 33,655 0 66,163 John A. Tarello 3,136,898 33,655 0 66,163 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K A. The following exhibits are filed herewith: 27 Financial Data Schedule B. During the quarter ended June 30, 1998, the Company filed no reports on Form 8-K. 12 SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SPIRE CORPORATION (Registrant) 14 August 1998 By: /s/ Roger G. Little - --------------------------- ---------------------------------- Date Roger G. Little President, Chief Executive Officer and Chairman of the Board 14 August 1998 By: /s/ Richard S. Gregorio - --------------------------- ---------------------------------- Date Richard S. Gregorio Vice President and Chief Financial Officer, Treasurer, Clerk and Principal Accounting Officer