Superconductor Technologies, Inc.
Investor Presentation
September 2016
© 2016 Superconductor Technologies Inc. Proprietary and All Rights Reserved
1
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; the
steps 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 compliance
with 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.
© 2016 Superconductor Technologies Inc. Proprietary and All Rights Reserved
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Superconducting Wire Innovation
Superconducting wire is to power, as fiber optics was to telecom.
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
© 2016 Superconductor Technologies Inc. Proprietary and All Rights Reserved
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Changing the Paradigm for Future Electrical Devices
Greater
Replacing legacy copper
wire with ultra-high
performance Conductus®
wire
© 2016 Superconductor Technologies Inc. Proprietary and All Rights Reserved
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Multi-Billion Dollar Smart Grid Market
Conductus® can be used across all phases of Smart Grid
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 protection
o Increases reliability
survivability
o Minimizes power
recovery time
o ~ 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
© 2016 Superconductor Technologies Inc. Proprietary and All Rights Reserved
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Conductus® Proprietary Wire Process
Simple, Repeatable, Commercially Proven
$200M + investment to develop STI’s
proprietary manufacturing process
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
© 2016 Superconductor Technologies Inc. Proprietary and All Rights Reserved
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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
© 2016 Superconductor Technologies Inc. Proprietary and All Rights Reserved
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Customers Signal Strong Demand for HTS Wire
STI estimates customers’ needs will exceed initial STI
production capacity more than 10X
km
7780
3736
338
Represents km of 4mm wide wire
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2x Product Performance = Increase price per meter
Conductus® performance superiority expected to
command premium price
$60
140A
Competitive
Market
Today
$ / meter
Amps / 4mm
240A
$35
$/meter and Amps is represented
by 4mm wide wire equivalent
70% Improvement in sales price
o Performance in early 2014 on pilot machine to production machine in 2016
o Price assumes $250/kA-m
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Production Ramp to Meet Demand
o Facilities are in place to scale capacity 5X
o Modular production process
Space to
expand
2500
2000
2300
Production roadmap to meet demand
1540
1500
Additional Projected Production
840
1000
338
500
0
Planned Production
Represents km of
4mm wide wire
4km - PILOT
2017
2018
2019
2020
© 2016 Superconductor Technologies Inc. Proprietary and All Rights Reserved
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STI’s Customers Path to Commercialization
Engagement Process to Commercial Purchase
New
Company
Relationship
Product
Qualification
Capacity Needs
Order Types
Communication
R&D
• Small Scale Testing
• Awareness
• Product Improvement
Qualified
Commercial
Acceptance
• Complete Testing
• Initial Factory /
Quality Review
• Qualified Supplier
• Operations Quality
Review
• Product Launch
• Interest
• Design Criteria
• Opportunity
• Specification Review
• Complete Design
Review
• Meets Specification
• Low Volume
• Medium Volume
• High Volume
• Small Orders
• Contracts
• Supply Agreement
• Project Plan
• Product Match
• Available
• Samples
• Demo Project
• Open Discussions
• NDA
• Alignment of
Commercial Goals
• Acceptance Testing
• Follow On Projects
STI Moving into Qualified Commercial
© 2016 Superconductor Technologies Inc. Proprietary and All Rights Reserved
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Transition Plan from R&D to Production
Partnered with industry leaders who have requested confidentiality
Positioned to complete the customer approval process
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
© 2016 Superconductor Technologies Inc. Proprietary and All Rights Reserved
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Leadership
Jeff Quiram
President & CEO
11 Years at STI
Bill Buchanan
CFO
17 Years at STI
Bob Johnson
SVP, Operations
15 Years at STI
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 profitability
o Deliver value to our shareholders and
customers
Adam Shelton
VP, Product Management & Marketing
10 Years at STI
Ken Pfeiffer
VP, Engineering
3 Years at STI
© 2016 Superconductor Technologies Inc. Proprietary and All Rights Reserved
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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 inprocess 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
© 2016 Superconductor Technologies Inc. Proprietary and All Rights Reserved
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Financial Highlights
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
dollars in millions
July 2, 2016
Cash*
$3.4
Working Capital
$2.6
Total Assets
$9.2
Debt
0
*Raised $2.2M in funds Q3/2016
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
© 2016 Superconductor Technologies Inc. Proprietary and All Rights Reserved
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Pathway to Conductus® Success
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.
© 2016 Superconductor Technologies Inc. Proprietary and All Rights Reserved
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Superconductor Technologies, Inc.
© 2016 Superconductor Technologies Inc. Proprietary and All Rights Reserved
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