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No. of Recommendations: 9
From the January 24,2000 S-1 which was filed with the SEC (edited to delete unimportant information):

Many of our products are in the early stages of commercialization and testing, while others are still under development. We do not believe any company has yet successfully developed and commercialized significant quantities of HTS wire or wire products. There are a number of technological challenges that we must successfully address to complete our development and commercialization efforts. For example, we face engineering challenges in producing HTS wire in longer lengths and commercial quantities. We also believe that several years of further development in the cable and motor industries will be necessary before a substantial number of additional commercial applications for our HTS wire in these industries can be developed and proven. We may also need to improve the quality of our HTS wire to expand the number of commercial applications for it. We may be unable to meet such technological challenges. Delays in development, as a result of technological
challenges or other factors, may result in the introduction of our products later than anticipated.

Note: The latter part is "required" in a stock prospectus...e.g. that there are potential for delays beyond their control. It might also snow, too.

The commercial uses of superconducting products are very limited today, and a widespread commercial market for our products may not develop.

To date, there has been no widespread commercial use of HTS products.Although LTS products are currently used in several commercial applications,
commercial acceptance of LTS products, other than for medical magneticresonance imaging and superconducting magnetic energy storage products, has been significantly limited by the cooling requirements of LTS materials. Even if the technological hurdles currently limiting commercial uses of HTS and LTS
products are overcome, it is uncertain whether a robust commercial market for those new and unproven products will ever develop. It is possible that the
market demands we currently anticipate for our HTS and LTS products will not develop and that superconducting products will never achieve widespread commercial acceptance.

Note: Again, this has some facts spread in with the normal SEC speak thrown in. Query: why would the management be staying with this ship?: because they believe in it!

We expect to spend significant amounts on the expansion of our manufacturing
capacity, and our expansion projects may not be successful.
Now for the important part:
We intend to spend approximately $40 million over the next two years to purchase equipment and leasehold improvements for a new manufacturing facility for our HTS wire products and a new or expanded manufacturing facility for our SMES systems. We have not yet finalized plans or executed contracts for these projects. .... we can only estimate the costs of these projects, and the actual costs may be significantly in excess of our estimates. [..]
Finally, we are expanding our manufacturing facilities in anticipation of significantly increased demand for our products.
[SEC dribble omitted}

We have historically focused on research and development activities and have limited experience in marketing and selling our products.

We have been primarily focused on research and development of our superconducting products. Consequently, our management team has limited
experience directing our commercialization efforts which are essential to our future success. To date, we only have limited experience marketing and selling
our products, and there are very few people anywhere who have significant experience marketing or selling superconducting products.

Our business strategy depends upon strategic relationships with corporate partners, which are intended to provide funding and technologies for our development efforts and assist us in marketing and distributing our products.

We have an agreement with Pirelli relating to HTS wire for cables used to transmit both electric power and control signals. In general, we are obligated
to sell our HTS cable wire exclusively to Pirelli, and Pirelli is obligated to buy this HTS wire exclusively from us or to pay us royalities for any of this
wire that it manufactures for use in these applications anywhere in the world other than Japan. Pirelli continues to provide us with substantial funding and has been critical in assisting us in the development and commercialization of HTS cable wire. Consequently, we are significantly dependent on Pirelli for the commercial success of this cable wire in these applications.

As we move toward commercialization of several of our products, we plan to use strategic alliances as an important means of marketing and selling our

Our success is dependent upon attracting and retaining qualified personnel.

Our success will depend in large part upon our ability to attract and
retain highly qualified personnel.
We are particularly dependent upon the services of Dr. Gregory J. Yurek, our co-founder and our Chairman of the Board, President and Chief Executive
Officer, and Dr. Alexis P. Malozemoff, our Chief Technical Officer.

We believe that our existing capital resources, including the anticipated proceeds of this offering, will be sufficient to fund our operations as
planned for at least the next two years. However, we may need additional funds sooner than anticipated if our performance deviates significantly from our
current business plan, if there is a significant change in competitive or other market factors or if unforeseen circumstances arise.


We intend to use the net proceeds from this offering as follows:

. approximately $30 million for leasehold improvements and equipment for a
new plant for manufacturing HTS wire;

. approximately $10 million for leasehold improvements and equipment for a
new SMES systems manufacturing facility; and

. approximately $10 million for costs, including costs of contract
manufacturers, associated with designing and manufacturing HTS motors.

We plan to use the remainder of the net proceeds for general corporate purposes, including funding our operations and acquiring capital equipment.
The amounts listed above are estimates only, and the exact amounts we spend for these purposes will depend upon a number of factors, such as the actual
costs for these projects, the progress of our commercialization and development efforts and the status of our relationships with strategic
partners. Pending the uses described above, we intend to invest the net proceeds of this offering in interest-bearing, investment-grade marketable

Final Note: Until I read this, I was unaware that the Chief Technology Officer of AMSC was Alexis Malozemoff, one the brightest guys I know. We were classmates in prep school, and he was clearly 3 standard deviations above the mean. Only student I know as a sophomore in high school to read War and Russian. If he is typical of management, we've got some bright lights guiding this ship.

Fool On!


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