Thank you, Tom. Good morning and thank you for joining us for STI’s 2015 first quarter conference call.

If anyone has not yet received the earnings press release, it is now available at the company’s website. If you would like to be added to our distribution list or if you would like additional information about STI, you may call LHA at 415-433-3777.

With us from management today are Jeff Quiram, President and Chief Executive Officer and Bill Buchanan, Chief Financial Officer. I will review the Safe Harbor provisions of this conference call and then I will turn the call over to Jeff.

Various comments regarding management’s beliefs, expectations and plans for the future are forward-looking statements and are made in reliance upon the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of future performance and are subject to various risks, uncertainties and assumptions that are difficult to predict.

Therefore, actual results may differ from those expressed in the forward-looking statements and those differences could be material. Forward-looking statements can be affected by many other factors, including those described in the risk factors and the MD&A sections of STI’s 2014 Annual Report on Form 10-K.

These documents are available 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.

Jeff will begin with an update on our Conductus wire program and then turn the call over to Bill for a review of the financials. And now, I would like to turn the call over to Jeff.

Thank you, Cathy and good morning everyone. I will begin with an update on our Conductus wire program.

In the first quarter, we made significant progress fulfilling many qualification requirements for our customers. Currently, our Conductus HTS wire is being evaluated and tested for numerous products within three basic categories: power transmission cabling, superconducting fault current limiters and magnets, which are used in science, nuclear magnetic resonance, or NMR, and motor applications.

STI’s customer pipeline for qualification and testing continues to grow. During the first quarter, STI shipped Conductus wire to 10 customers, 7 existing and 3 new, bringing our total customer count to 34 at quarter end.

Of the customers we shipped to this quarter, 6 are in stage 1 evaluation, which includes wire characterization and performance testing and 4 are in stage 2, which involves significantly more rigorous qualification testing to simulate devices for commercial deployment. These shipments include the Conductus wire for the assembly of the superconducting cable demonstration project.

The customer received the wire near the end of the first quarter. We still expect to have the initial test results from the customer during the second quarter.

In the first quarter, we focused on our efforts on meeting customer’s detailed specification requirements for what we believe are the most attractive opportunities. We improved wire performance during the quarter and also made very significant progress in the finishing layer process.

In particular, we made important process improvements that address the required thermal and electrical properties or the superconducting fault current limiter application. These improvements are primarily with finishing layers of the wire.

We have developed a method for depositing copper evenly around the entire surface, the front, back and sides. This finishing layer of process is applicable for several of our current customers.

Our customers are pleased with the improvement we have recently demonstrated in wire performance. The test results provide us with a clear path forward to our ongoing process development efforts.

Based on the advances made this quarter, we remain optimistic that we will be able to meet the required specifications from one or more of our customers in the coming months. In other customer developments, our strategic agreement with Robinson Institute is moving forward as planned.

In the first quarter, we have received our first order for qualification purposes from a new customer introduced to us by Robinson. We plan to fulfill the order in the second quarter.

We believe we are well positioned to expedite testing and assist our end customer as it commercializes our new product into the market. We plan to jointly pursue new and existing customers to offer a compelling value proposition to device manufacturers.

Customers benefit from Robinson’s expertise in testing, implementation and design, while at the same time leveraging the enhanced performance of STI’s Conductus wire. We have jointly engaged multiple customers across Asia with a mutual goal, being to assist leading device manufacturers in the rapid commercialization of superconducting products.

In the marketplace, many new products solutions have been launched, that utilize the benefits provided by HTS superconducting wire. These solutions are solving problems that often cannot be addressed with conventional alternatives.

We believe that the pace of new product releases highlight the attractive market that exist for our Conductus wire. Alternative energy generating sources and other advanced network technologies are being added to our power grid making it more complex and creating reliability challenges.

As costly power outages continue to grow, utilities are increasing deployments of superconducting for kilometers to cost effectively improve the grid’s reliability. We are positioning STI to be a wire supplier to the global electrical equipment companies that are aggressively introducing superconducting fault current limiters to address this need.

We continue to make progress on our Conductus wire production system, whether it being produced over the entire deposition area, which is necessary to produce long lengths of wire, a pilot system remains active and is producing high quality Conductus wire that is being shipped to customers for qualification testing. In the second quarter, we expect to begin using the production system to increase capacity for fulfilling existing stage two qualification orders.

Our focus for 2015 continues to be quickly complete Conductus wire qualification activities and become the improved wire supplier for one or more customers. At that point, our primary focus will be to ramp production to fulfill forecasted wire demand.

Now, I will hand the call over to Bill for a review of the financials. Bill?

Thank you, Jeff. During the developmental stage of our HTS wire program, we have continued to sell wireless products.

In the first quarter, we again recorded revenue from our Conductus wire sales. However, our revenue was primarily from our wireless products.

In our first quarter, revenue was $55,000 compared to $389,000 in the year ago quarter. Commercial gross margins were negative in the first quarter.

As we bring our wire production equipment up the capacity, we expect significant gross margin improvements. Total R&D expenses amounted to $1.5 million for both the current and prior year quarter.

SG&A expenses were $1.5 million, up from the $1.3 million in the year ago quarter. The increase was from the non-cash expense of stock awards during the quarter.

We have recognized the non-cash gain of $2.6 million from the fair value adjustment of our warrants issued in August 2013. This amount will fluctuate quarterly based on several factors including our stock price.

Net loss for the first quarter was $1.4 million or a loss of $0.10 per share compared to a net loss of $2.9 million or a loss of $0.25 per share in the prior year’s quarter. The total number of common shares outstanding at March 28, 2015 was 18.2 million shares.

Under the balance sheet, on March 28, 2015, cash and cash equivalents totaled $5.3 million. In March, we received net proceeds of $4.6 million from a registered direct offering of our common shares.

During the quarter, investors exercised more than 900,000 warrants resulting in net cash proceeds of the company of an additional $1.7 million. In the first quarter, $2.3 million was used to fund our operations and $100,000 was provided by changes in our working capital.

Capital expenditures for the first quarter were $46,000. We expect to spend less than $400,000 in capital equipment in 2015 now that our Conductus wire production suite is completed.

Based on our current forecast, we expect our existing cash resources will be sufficient to fund our planned operations into the fourth quarter of 2015. At the end of the first quarter of 2015, accounts receivable was $36,000.

Current and non-current liabilities totaled $3.8 billion at March 28 and included $2.3 million for the fair value of our warrant derivatives. And now operator, please open the call for questions.

Hello.

Yes, hello, Jon. Good morning.

I got a couple of questions here. The first one this cable demonstration project that you mentioned on your prepared remarks, is that the second cable demonstration project or is that some continuation of the one we have invested?

No, we have talked about the cable demonstration project in the past, Jon. And this was a project – this is a project that requires multiple strands of wire, high-performance wire, all very consistent in performance and that is the wire that has now been shipped to that customer and that customer is at this time assembling the cable using the Conductus wire.

And so we have talked about this project in the past. This is the fulfillment of that demand that was necessary to build it.

I thought you had already shipped that, I am sorry. So, you shipped it in Q1 of 2015?

We shifted in Q1. We did mention it in our year end call, because we have just shifted right before that call, Jon.

So, that maybe where the compute and grew up resides, but what we have concluded in this conversation, because we truly did ship it during the first quarter.

Okay, got that. And then what everybody wants to know, Jeff is your improvements for the finishing layer, the thermal and electrical conductor and it’s – do you believe that you have met the requirements for qualification and the customer is just testing it or is there still more work to do?

We are very close. There is one more round that is scheduled to go to the customer shortly.

That the one customer is the customer that’s probably furthest along and we believe that those samples will meet the needs, and but I guess, we won’t really know until they get there and they test it. We do the assessment that we don’t have ourselves.

So, we can’t test it before it goes and no, but we have had very, very close communications with them. They have provided us a ton of information we have gone in business with other sides, where they do the testing to really understand it.

So, I think we have as good a handle on it as we can without duplicating the testing set up ourselves. So, we were closer last time?

And we knew some things that we believe that by changing will address the short comings. And so, we are very – we are optimistic that we are very, very cost side ahead I think to say with 100% certainty that they will pass all the tests, because I guess, I don’t know.

We haven’t been able to test ourselves, but...

How long does an iteration take, is it a...

It doesn’t take very long to get the test results, so once we ship to them...

No, I mean that how long does it take, like if you don’t pass this time, like how long does it take to do the next one?

Well, that depends. I mean, it depends on what you saw.

So, why didn’t it pass? So, there is the analysis of why didn’t it pass, what are the shortcomings, what are the things that need to be fixed.

And especially as it relates to some of these furnishing layers, it’s been working with that supplier to say okay, here is what we need to do different and then we need to set it up and do it, but it’s hard to answer that question, Jon, because unless we know exactly what problem is, I cannot know what the problem might be ahead of time, I can’t say how long it would take to solve it. It may take weeks though.

What?

It may take weeks.

So you did two or three of these iterations in the first quarter?

I think we did two of them in the first quarter.

Okay. And then my last question is the commercial machine, so you are – I think your comments were geared to lead us to believe that wire that’s good enough to ship to customers is coming of that machine in the quarter you are in now and you are going to use that to fulfill customer requirements for the testing part, is that accurate?

Yes. So it is accurate for some customers, I would say that it’s not – we haven’t gotten the long lengths at the real high performance that we would like to see at.

So there is still improvement being made there. But yes we are getting – we are getting superconducting wire off of the machine.

Can you give us some idea of what current capacity that you are able to produce on that machine?

300 to 400 is what?

And you are able to get it to 500?

Yes. And again, remember the difference between 400 and 500 is, it’s really a matter of the composition of the wire and the materials on the wire.

So the fact that you can run a deposition process and get a superconducting wire and get it performing at a good level, so 300 amps to 400 amps is actually pretty good. It’s better than some of the competitors in the field can do on any production system.

And now it’s just a matter of tweaking the composition to get it where you want it and we are confident that we will do that.

Okay. Thanks.

That’s it for me.

Thank you, Jon.

Good morning Jeff.

Good morning Bill.

Jon asked a lot of the questions I had, but first of all with respect to the machine, the big machine and delivering it to the fault meter customer who is the most advanced customer you have, are you delivering it off that machine or the pilot machine, the stuff that you are sending to him?

Well, the majority of the wire we are sending to him is 500 amps plus, so it’s coming off of pilot machine.

So if you wanted to order and you said you met the process then you would have to make sure you could do it in the big machine, right?

Well, that’s absolutely. But again, as I have stated that’s – it’s a process that is well known on the pilot machine.

And we really just need to get the big machine to sort of exactly how we wanted to do it. It’s I mentioned it as I described it as a tweak and that truly is what it is.

So I don’t have any concerns, Bill that we can’t give that recipe working on the big machine.

Okay. So, this new – what are you sending to the fault meter customer, who says you have done all the hard stuff, this is the same guy but now you got to get this done where it affects going from Superconductor to non-Superconductor technology, when are you sending this next generation, this week, next week, when are you sending that to be tested?

It’s in the next couple of weeks, Bill. I am not – I don’t know the exact date on when it comes back from the outside processing on the finishing layer, but it’s in the next couple of weeks.

Okay. So you have to send it out and then get it setup and then reship it to the fault meter customer, right?

Well, right. It’s kind of come in, we have got to look at we got to make sure it’s running.

So there is a little bit of time required there, but it’s not an extended period of time.

So what is your belief once this – if this passes this test and based on your conversations with this fault meter customer that they are ready to really sit down and cut a deal, would you say, I mean are you more optimistic than ever with him now that you are almost there?

Well, we had a long meeting with them a couple of weeks ago, where we were onsite with him and there the comment to us is that, they believe our wire is a very legitimate source and they need more, they need more supply and they want to qualify – they want our wire to succeed. And I would say their actions and their responsiveness and all that definitely shows us that they truly aren’t interested in getting it qualified in a proven demand.

And I guess, I would say, I don’t believe that they would be doing that unless they are probably not buying so.

Okay. And if you do come back, I mean, is it – everybody has been waiting for years like you to get some order.

I mean, do you think it’s a 60, 90-day window or 180 days, I mean, I am not trying to pin you, I am just trying to say you are into negotiation and you are seeing what they need. Are we talking about a 3-month window that we may get some light at the end of the tunnel here?

I would say that once the wire is qualified, I don’t expect that the – I don’t expect that the negotiations for the terms around an order will take a long time, but it still needs to be qualified. So, I mean, that is the – that is the – well, that’s the milestone that needs to be accomplished and then we can move from there, but I think you do measure it in.

You don’t measure it in quarters, you measure it in weeks or months, it won’t take much longer than that, I don’t believe.

Well, that’s good. So, you are hoping this next shipment will meet that test, but you don’t know because you can’t pre-test it, right?

That’s correct.

Okay. So, now that’s number one, what do you got for backup?

Well, we are doing other qualification work with other consumers of the wire and we got cable demonstration project that’s being worked on and we continue to ship. So, when I said the other guys that are doing fault current limiters and then we continue to shift the applications for magnet for other, I would say there are smaller applications, but those are the backlogs.

But they are farther away, I mean, they are not right, I mean...

Well, I mean, everybody is further away than the leader, but I won’t say that they are far away.

Okay. So, it’s the backup to this first fault meter guy and other fault meter guy or somebody else.

In other words, if you say then in the order of priority, who we get the most – who would we have a chance to get an order from? How would you rank it fault meter one and who is next, another fault meter guy or somebody else?

Yes, I would say it’s close between another magnet consumer and another fault current limiter customer.

And what do you have to produce, does the magnet consumer have the same problem we are switching from different currents or is that more straightforward?

No, the magnet doesn’t have – the magnet doesn’t have that quenching requirement where you need a wire that can kind of withstand those massive turnoff – turn on and turnoff cycles. So, it’s different that way.

The magnet applications tend to be more focused on performance in the presence of a magnetic field. And so, it’s different as far as what the actual demands on the wire are.

Right. Are the wire shorter in length than higher amps or is it the same length?

I would say, it depends on the application. Most of the wires are longer than the fault current limiter applications, but the amount of current that needs to be carried in general is less.

Okay. So, it wouldn’t be too difficult to produce, right?

No, we have been providing them wire samples that meet most of the technical requirements. That’s the part that we need to continue to – we need to hit all of the requirements and get approved with them just like anybody else and that’s work in process and I think we are making good progress.

Is this from – can you say what your application would be, it is just sort of like imaging machines or what would it be used in?

The primary applications that are closer to completion of our imaging machine.

So it could be like GE, right?

I am not going to say the existing customer.

No. But I am just saying those are the big manufacturers of those.

Okay. And you got – and I heard Bill say, he has got enough cash to go through the fourth quarter, right?

Bill said he has got enough cash to get into the fourth quarter, that’s correct.

So what is your quarterly burn rate now, is it about $1.07 million?

It’s a little bit more than that, but less than $2 million.

Okay, alright. I am looking forward to some good news.

Thank you, Jeff.

Alright. Thank you, Bill.

Thank you for the questions.

Okay.

Thank you very much. I would like to thank all of you for joining us today.

And we look forward to providing you additional updates when we talk next. Thank you very much.