Investor Presentation September 2016

1© 2016 Superconductor Technologies Inc. Proprietary and All Rights Reserved

Superconductor Technologies, Inc.Investor PresentationSeptember 2016


Safe Harbor Provisions

Statements in this presentation regarding our business that are not historical facts are "forward-looking statements" that involve risks and uncertainties. Forward-looking statements are not guarantees of future performance and are inherently subject to uncertainties and other factors, which could cause actual results to differ materially from the forward-looking statements. These factors and uncertainties include, but are not limited to: our limited cash and a history of losses; our need to materially grow our revenues from commercial operations and/or to raise additional capital (which financing may not be available on acceptable terms or at all) in the very near future, before cash reserves are depleted (which reserves are expected to be sufficient into the first quarter of 2017), to implement our current business plan and maintain our viability;the performance and use of our equipment to produce wire in accordance with our timetable; overcoming technical challenges in attaining milestones to develop and manufacture commercial lengths of our HTS wire; the possibility of delays in customer evaluation and acceptance of our HTS wire; the limited number of potential customers and customer pressures on the selling prices of our products; the limited number of suppliers for some of our components and our HTS wire; there being no significant backlog from quarter to quarter; our market being characterized by rapidly advancing technology; the impact of competitive products, technologies and pricing; manufacturing capacity constraints and difficulties; the impact of any financing activity on the level of our stock price; the dilutive impact of any issuances of securities to raise capital; thesteps required to maintain the listing of our common stock with a U.S. national securities exchange and the impact on the liquidity and trading price of our common stock if we fail to maintain such listing; the cost and uncertainty from compliancewith environmental regulations; and local, regional, and national and international economic conditions and events and the impact they may have on us and our customers.

Forward-looking statements can be affected by many other factors, including, those described in the "Business" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of STI's Annual Report on Form 10-K for the year ended December 31, 2015 and in STI's other public filings. These documents are available online at STI's website, www.suptech.com, or through the SEC's website, www.sec.gov. Forward-looking statements are based on information presently available to senior management, and STI has not assumed any duty to update any forward-looking statements.


o Focused on Smart Grid market opportunity:

o Grid reliability - Outages are increasing, costing billions of dollars

o NEW renewable energy sources - Distributed power requires interconnection

o Growing demand for power - Aging grid must be transformed to support growth

o Sustainable production advantages - Technological superiority and trade secrets

o Commercial scale production now operational

o State of the art factory, expandable by 5X

o Growing customer demand for product qualification and approval

o Multiple orders from large, multi-national industrial companies for certification testing

o Active partnership with industry leader in Asia

o Focused on Fault Current Limiters, Magnets, Cables and Next Generation Machines

o Submitted proposal to DOE in June 2016: “Enabling Technologies for Next Generation Machines”

o Expanding IP portfolio - Awarded U.S. Patent on Core Technology in June 2016

Superconducting wire is to power, as fiber optics was to telecom.

Superconducting Wire Innovation


Replacing legacy copper wire with ultra-high performance Conductus® wire

Changing the Paradigm for Future Electrical Devices

Greater


o Significant size reduction, increased performance

o 10X power capacity of conventional cable

o Enhances the capacity and reliability of stability-constrained utility grids

o Superior protectiono Increases reliability

survivabilityo Minimizes power

recovery timeo ~ 250,000 power

substations globally

o Enhances imaging performance for high field devices utilizing HTS wire

Established relationships with global industry leaders -across all market segments

Multi-Billion Dollar Smart Grid MarketConductus® can be used across all phases of Smart Grid


o Utilizes simplified wire architecture

o High performance

o Configurable to meet all Smart Grid applications

o Leverages STI assets

o $200M+ investment

o $37M on Conductus wire development

o NEW manufacturing facility - $11M in CapEx

o Extensive IP portfolio - Developed over 100 patents

o Provides sustainable production advantage

o Increased performance - Robust and flexible design

o Low Cost - Simplicity of manufacturing process

$200M + investment to develop STI’s proprietary manufacturing process

Conductus® Proprietary Wire ProcessSimple, Repeatable, Commercially Proven


Conductus® High Volume Production System

Tape Product Width: 3mm 4mm 10mm 12mm

Batch Size: (meters) 3000 2150 1000 850

Annual Capacity: (Km) 950 750 300 250


STI estimates customers’ needs will exceed initial STI production capacity more than 10X

Customers Signal Strong Demand for HTS Wire

338

3736

7780

km

Represents km of 4mm wide wire


o Performance in early 2014 on pilot machine to production machine in 2016o Price assumes $250/kA-m

Competitive MarketToday

2x Product Performance = Increase price per meter

Conductus® performance superiority expected to command premium price

Am

ps

/ 4

mm

$ /

met

er

$/meter and Amps is represented by 4mm wide wire equivalent

240A$60

$35140A

70% Improvement in sales price


338

840

1540

2300

0

500

1000

1500

2000

2500

Additional Projected Production

Planned Production

o Facilities are in place to scale capacity 5X

o Modular production process

4km - PILOT

Production Ramp to Meet Demand

Production roadmap to meet demand

Represents km of 4mm wide wire

2017 2018 2019 2020

Space to expand


Engagement Process to Commercial Purchase

STI’s Customers Path to Commercialization

Company Relationship

Product Qualification

Capacity Needs

Order Types

Communication

• Awareness

• Interest

• Opportunity

• Product Match

• Available

• Open Discussions

• Small Scale Testing

• Product Improvement

• Design Criteria

• Specification Review

• Low Volume

• Samples

• NDA

• Complete Testing

• Initial Factory / Quality Review

• Complete Design Review

• Meets Specification

• Medium Volume

• Small Orders

• Demo Project

• Alignment of Commercial Goals

• Qualified Supplier

• Operations Quality Review

• Product Launch

• Acceptance Testing

• High Volume

• Contracts• Supply Agreement• Project Plan

• Follow On Projects

STI Moving into Qualified Commercial

New R&D AcceptanceQualified

Commercial


Partnered with industry leaders who have requested confidentiality

Transition Plan from R&D to Production

o Achieved required wire strength in testing

o Focused on reestablishing STI’s standard critical current using new template architecture

o Implementing architecture enhancements on existing production equipment

o Utilizing design that prioritizes the ability to scale quickly and economically

o System modifications expected to be operational in Q4’16

o Plan to ship wire to key customers to complete existing qualification orders shortly after

modified system is operational

Positioned to complete the customer approval process


Jeff QuiramPresident & CEO11 Years at STI

Bill BuchananCFO17 Years at STI

Bob JohnsonSVP, Operations15 Years at STI

Adam SheltonVP, Product Management & Marketing10 Years at STI

Ken PfeifferVP, Engineering3 Years at STI

Leadership

Goals:o Provide the world’s most efficient,

high-performance and cost effective superconducting wire for power applications

o Improve our long-term competitiveness o Reach profitabilityo Deliver value to our shareholders and

customers


Reducing Time-to-Market for Next Gen Electrical Machines

Department of Energy (DOE) Proposal:Next Generation Electrical Machines; Enabling Technologies

Opportunity $8.058M over 3 years ($6.446M plus cost share $1.612M)

Prime Recipient

Superconductor Technologies Inc.

Project Partners

Industry leading manufacturer of motors and generators, along with renowned academic partners

DOE Objectives

1) Improve 2G HTS wire current-carrying performance to 1440A/cm-width at 77 Kelvin and 1.5 Tesla

2) Reduce 2G HTS wire manufacturing costs by improving in-process yield in kilometer long lengths and/or reducing cost of major components by 50%

Technology Impact

Enabling technology to be rapidly introduced into Next Generation Electrical Machines utilizing high performance/low cost HTS wire


Key Metrics:

o 95% of CapEx for initial production of Conductus wire has been invested

o 750km capacity

o Additional production suites – 1500km increments

o $12.5M in CapEx expected to deliver $75M in estimated revenue at current market prices

Balance Sheet Highlights

Financial Highlights

*Raised $2.2M in funds Q3/2016

dollars in millions July 2, 2016

Cash* $3.4

Working Capital $2.6

Total Assets $9.2

Debt 0

o Average trailing 12-month cash used to fund operations: $1.98M per QTR

o As of 8/11/16, cash reserves are expected to be sufficient into Q1’17


o Addressing a large Smart Grid opportunity with disruptive technology

o Delivering market leading current handling product performance

o Obtaining customer validation of high performance compared to competitors

o Leveraging proprietary manufacturing process

o Utilizing scalable modular production plan

o Driving down production cost with manufacturing experience

Conductus® wire is to power, as fiber optics was to telecom.

Pathway to Conductus® Success


Superconductor Technologies, Inc.

Documents

Investor Presentation September 2016