Super Conducting Wireless Communication
A technology innovator, Illinois Superconductor Corp. came up with an innovative superconducting filter for use in cellular base stations. But with mounting losses, ISCO needed its debt managed and a $100 million infusion.
Managing Debt & Funding The Future
Founded in 1989 by Arch Development Corp, an affiliate of the University of Chicago created to commercialize superconductor technologies initially developed in Chicago’s famous Argonne National Laboratory, ISCO needed money to build for the future. In the early days, ISCO received all of its revenues from government research contracts. But in1996, when it received its first commercial sales of its components utilizing its high-temperature superconducting materials technology to enhance wireless telecommunications services, everything changed.Prior to1996, the company completed several rounds of financing as it incurred cumulative losses of approximately $23 million. Early that year, our senior financial strategist helped ISCO complete a private placement of approximately 400,000 shares at $21.80 per share.
With the management of current debt and the private placement in place, total ISCO shares outstanding were approximately 4,600,000. This created a total company valuation of slightly over $100 million, not including stock options. In a few months, new ISCO shares were registered with the SEC and were ready for a public offering by June of 1996. With its debt under control and an infusion of $100 million, ISCO was ready to dramatically change the wireless communication industry.