CONDUCTUS INC, POS AM, 1999-06-11

CONDUCTUS INC
POS AM, 1999-06-11
ELECTRONIC COMPONENTS, NEC

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 11, 1999.

REGISTRATION NO. 333-70373

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 1
TO FORM S-1 ON

FORM S-3

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

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CONDUCTUS, INC.

(Exact Name of Registrant as Specified in its Charter)

<TABLE>
<S> <C> <C>
DELAWARE 3661 77-0162388
(State or Other Jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Incorporation or Classification Code Number) Identification
Organization) Number)
</TABLE>

969 W. MAUDE AVENUE
SUNNYVALE, CALIFORNIA 94086
(408) 523-9950

(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)

CHARLES E. SHALVOY
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CONDUCTUS, INC.
969 W. MAUDE AVENUE
SUNNYVALE, CALIFORNIA 94086
(408) 523-9950

(Name, address, including zip code, and telephone number,
including area code, of agent for service)

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COPIES TO:

BROOKS STOUGH, ESQ.
WILLIAM E. GROWNEY, JR., ESQ.
KEVIN A. LUCAS, ESQ.
Gunderson Dettmer Stough
Villeneuve Franklin & Hachigian, LLP
155 Constitution Drive
Menlo Park, California 94025
(650) 321-2400

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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.

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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/

If this Form is filed to register additional securities for an offfering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / ____________

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ____________

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SUCH SECTION 8(A), MAY DETERMINE.

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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
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SUBJECT TO COMPLETION, DATED JUNE 11, 1999

3,069,243 SHARES

[LOGO]

CONDUCTUS, INC.
COMMON STOCK

CERTAIN OF OUR STOCKHOLDERS ARE OFFERING 3,069,243 SHARES OF OUR COMMON STOCK.
THIS OFFERING IS NOT BEING UNDERWRITTEN. SEE "PLAN OF DISTRIBUTION" STARTING ON
PAGE 13.

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INVESTING IN OUR COMMON STOCK INVOLVES CONSIDERABLE RISKS. SEE "RISK FACTORS"
STARTING ON PAGE 4.

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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

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We will not receive any of the proceeds from the sale of these shares. We
have agreed to bear certain expenses in connection with the registration and
sale of these shares.

Our common stock is traded in the Nasdaq SmallCap Market under the symbol
"CDTS." On June 9, 1999, the closing sale price of our common stock in the
Nasdaq SmallCap Market was $2 per share.

PROSPECTUS DATED , 1999
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PROSPECTUS SUMMARY

CONDUCTUS, INC.

Conductus, Inc., was founded in 1987 and is based in Sunnyvale, California.
Conductus develops, manufactures and markets electronic components and systems
based on superconductors for applications in the worldwide telecommunications
market. For many applications, the unique properties of superconductors offer
significant performance advantages over products based on conventional copper
electronic components. These advantages, including improved sensitivities and
efficiencies, can lower the cost or improve the performance of electronic
components at the system level.

We are registering the common stock to comply with contractual obligations
arising under the Series B Preferred Stock and Warrant Purchase Agreement, dated
September 11, 1998, by and among Conductus and investors in our Series B
preferred stock financing. We are registering these shares of common stock so
that these investors may sell in the public market any common stock they acquire
upon the conversion of their Series B preferred stock or the exercise of their
warrants.

OUR ADDRESS:

Conductus, Inc.

969 W. Maude Avenue

Sunnyvale, California 94086

(408) 523-9950

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RISK FACTORS

THE RISKS AND UNCERTAINTIES DESCRIBED BELOW ARE NOT THE ONLY ONES FACING OUR
COMPANY. ADDITIONAL RISKS AND UNCERTAINTIES NOT PRESENTLY KNOWN TO US, OR THAT
WE CURRENTLY CONSIDER IMMATERIAL, MAY ALSO IMPAIR OUR BUSINESS OPERATIONS.

IF OUR COMMON STOCK IS DELISTED FROM THE NASDAQ SMALLCAP MARKET, OUR COMMON
STOCK WILL BECOME LESS EASILY TRADABLE AND YOU MAY FIND YOURSELF UNABLE TO
QUICKLY AND EASILY BUY OR SELL OUR COMMON STOCK

Holders of our common stock currently enjoy the substantial benefit of being
able to easily buy or sell our common stock because our common stock is listed
on the Nasdaq SmallCap Market trading system. In November 1998, Nasdaq informed
us that, on the basis of our Quarterly Report on Form 10-Q for the quarter
ending September 30, 1998, our net tangible assets had fallen below the level
required for continued listing of our common stock on the Nasdaq National Market
trading system. Subsequently, we submitted information to Nasdaq regarding our
anticipated future net tangible assets and certain financing plans. Based on
this submission, we applied to have our common stock listed on the Nasdaq
SmallCap Market. Pending approval of our application, our common stock began
trading on the Nasdaq SmallCap Market. Nasdaq subsequently informed us that our
application to be listed on the Nasdaq SmallCap Market has been denied. We
requested and were granted an oral hearing on the subject, and delisting of our
common stock has been stayed pending the results of this hearing.

Although Conductus satisfied Nasdaq's requirements for listing on the Nasdaq
SmallCap Market as of December 31, 1998, we did not satisfy these requirements
as of March 31, 1999. We are taking actions designed to help us satisfy the
listing requirements by June 30, 1999. These actions include seeking to raise
additional equity capital and seeking to reduce our operating losses. However,
we may not be successful in these efforts. In addition, even if we are
successful, Nasdaq may deny our appeal if they believe we will not satisfy the
criteria over the longer term.

If our common stock is delisted, trading in our common stock, if any, would
then be conducted in the over-the-counter market on an electronic bulletin
board, or in what are commonly referred to as the "pink sheets." You would then
find it more difficult to sell, or to quickly and accurately obtain quotations
as to the price of, our common stock.

In addition, if we fail to maintain either (a) net tangible assets, as
defined in Rule 3a51-1 of the Securities Exchange Act, of at least $2,000,000 or
(b) average revenue over a three year period of at least $6,000,000, we could
become subject to certain "penny stock" rules. These rules subject brokers and
dealers who sell or make a market in our common stock to additional trading
rules and requirements. For example, these brokers or dealers would be required
to maintain detailed records on Conductus and their own trading activities in
connection with our common stock. Consequently, this could affect the
willingness of brokers and dealers to sell or make a market in our common stock.
This, in turn, could affect your ability to quickly and easily sell our common
stock.

WE HAVE A HISTORY OF LOSSES AND MAY NEVER BECOME PROFITABLE

We cannot assure you that we will ever be profitable or, if we become
profitable, that we will continue to be profitable thereafter. As of December
31, 1998, we had accumulated net losses of approximately $44.6 million. We
expect to incur substantial additional losses at least through 1999 as we expand
our operations. Continued development of our products may require us to commit
substantial resources to:

- research and development,

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- the establishment of additional pilot and commercial-scale fabrication
processes and facilities, and

- enhanced quality control, marketing, sales and administrative
capabilities.

In order to become profitable, we must successfully develop, manufacture,
introduce and market our potential products. Our failure to become profitable or
maintain our profitability could significantly harm the value of our common
stock.

WE WILL NEED SUBSTANTIAL ADDITIONAL CAPITAL IF WE ARE TO CONTINUE OUR OPERATIONS

Our revenues from product sales have been limited. As of December 31, 1998,
we had cash reserves of approximately $2.9 million. We anticipate that our
existing sources of liquidity and anticipated revenue will satisfy our projected
working capital and other cash requirements for the foreseeable future. However,
changes in our plans or other events affecting us may result in the expenditure
of these resources before then. THE REPORT OF OUR INDEPENDENT ACCOUNTANTS
INCLUDED IN THIS PROSPECTUS INCLUDES AN EXPLANATORY PARAGRAPH RELATED TO THE
SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN.

If we are to continue our operations, we will need to raise substantial
additional funds, and these funds may not be available on favorable terms or at
all. Our failure to raise enough capital to meet our needs could force us to
reduce or cease some or all of our operations. These events could significantly
harm our results of operations and the value of our common stock.

BECAUSE OUR FUTURE OPERATING RESULTS ARE UNPREDICTABLE AND LIKELY TO FLUCTUATE
SIGNIFICANTLY, THE VALUE OF OUR COMMON STOCK IS DIFFICULT TO EVALUATE

Our operating history is limited, and our operating results are susceptible
to significant fluctuations. Thus, we cannot reliably predict future operating
results, making it difficult for you to assess the value of our common stock. We
believe that period-to-period comparisons of our operating results are not
necessarily meaningful, and you should not rely upon period-to-period
comparisons as indications of future performance.

Our future operating results may vary significantly due to factors
including:

- Demand for our products;

- The size and timing of significant orders, and their fulfillment;

- The size and timing of government funding contracts;

- Inflexible product life cycles which may affect our ability to change and
compete;

- Changes in our pricing policies, or those of our competitors;

- Changes in our operating expenses and our ability to control costs;

- Our customers' budget cycles;

- Product quality problems;

- Our ability, and our subcontractors' ability, to obtain sufficient
supplies of limited or sole-source components for our products;

- Consolidation by competitors and indirect channel partners; and

- Regulatory changes.

In addition, we may experience changes in our mix of domestic and international
revenues, our mix of direct sales and indirect sales, and the channels through
which we sell our products. For these reasons,

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our gross profit and operating margins may fluctuate significantly. These
factors make it difficult to predict our future operating results.

Another factor making our future operating results difficult to predict is
the fact that our products are typically shipped shortly after orders are
received. Accordingly, future quarterly revenues are difficult to predict since
they depend substantially on orders booked and shipped during those quarters.
Product revenues are also difficult to forecast because our sales cycle, which
may increase in the future, varies substantially from customer to customer and
by distribution channel. We base our expense levels and plans for expansion,
including our plan to significantly increase both our sales & marketing and
research & development efforts, in significant part on our expectations of
future revenues. These expenses and expansion plans are relatively fixed in the
short-term. Consequently, our operating results in any given quarter are likely
to be disproportionately harmed if revenues in that quarter fall below our
expectations.

WE MAY NOT BE ABLE TO COMPETE EFFECTIVELY IN THE HIGHLY COMPETITIVE
SUPERCONDUCTIVE ELECTRONICS
INDUSTRY OR AGAINST ALTERNATIVE TECHNOLOGIES

Although the market for superconductive electronics currently is small and
in the early stages of development, we believe this market is intensely
competitive. A number of large companies with substantially greater financial
resources and capabilities are engaged in programs to develop and commercialize
products which may compete with ours, or they may begin such programs if the
market develops. Smaller companies, including Illinois Superconductor
Corporation and Superconductor Technologies, Inc., are also developing and
commercializing superconductive electronic products. Furthermore, academic
institutions, governmental agencies and other public and private research
organizations are engaged in development programs that may lead to commercial
superconductive electronic products. Our success will depend on our ability to
develop and maintain our technological leadership while managing the various
risks described in this prospectus. Our failure to compete successfully could
significantly harm our business and financial condition and the value of our
common stock.

In addition to the products that our planned products will compete with
directly, a number of competing approaches and technologies are currently being
used to increase the capacity and improve the quality of wireless networks, some
of which may be less expensive or offer better performance. These approaches
include increasing the numbers of cellular transmission stations, increasing
tower heights, locating filters and amplifiers at the top of antennas and using
advanced antenna technology. We may not succeed in competing with these
alternate technologies, and for this reason our business, operating results and
financial condition may suffer.

WE DEPEND HEAVILY UPON GOVERNMENT CONTRACTS FOR A SUBSTANTIAL PORTION OF OUR
REVENUES, AND OUR BUSINESS, FINANCIAL CONDITION OR OPERATING RESULTS WOULD
SUFFER IF, AMONG OTHER THINGS, ANY OF THESE CONTRACTS ARE TERMINATED OR
ADVERSELY MODIFIED

A significant portion of our revenue has been derived from contracts with
the U.S. government. Although we anticipate that government contract revenues
will grow in 1999 compared to 1998, revenues from government contracts may not
grow and may fall. A reduction in, or discontinuance of, the government's
commitment to or our participation in such programs would significantly harm our
business, operating results and financial condition. Our revenue from
government-related contracts represented approximately 77% of total revenue for
fiscal years 1996 and 1997 and 79% of total revenue for fiscal 1998. Our
contracts involving the U.S. government may include various risks, including:

- Termination by the government for their own convenience;

- Reduction or modification in the event of changes in the government's
requirements or budgetary constraints;

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- Increased or unexpected costs causing losses or reduced profits under
contracts where our prices are fixed or unallowable costs under contracts
where the government reimburses us for costs and pays an additional
premium;

- Risks of potential disclosure of our confidential information to third
parties;

- The failure or inability of the main contractor to perform its contract in
circumstances where we are a subcontractor;

- The failure of the government to exercise options provided for in the
contracts;

- The government's right in certain circumstances to freely use technology
developed under contracts with it; and

- Exercise of the U.S. government's right to require us to license to third
parties patented technology developed under government contracts if we
fail to continue to develop the technology.

The programs in which we participate may extend for several years, but are
normally funded on an annual basis. The U.S. government may not continue to fund
programs to which our development projects apply, particularly in light of
recent legislative initiatives to reduce the funding of various U.S. government
agencies and programs. Even if funding is continued, we may fail to compete
successfully to obtain funding pursuant to such programs.

BECAUSE WE DEPEND ON A SMALL NUMBER OF CUSTOMERS, HARM TO, OR THE LOSS OF, ANY
OF THESE RELATIONSHIPS COULD SIGNIFICANTLY HARM OUR BUSINESS, FINANCIAL
CONDITION OR OPERATING RESULTS

To this day, a relatively small number of customers have accounted for a
significant portion of our total revenue, and we expect that this trend will
continue for the foreseeable future. Accordingly, our future operating results
will continue to substantially depend on the success of a few customers and our
relationships with them. Any reduction or delay in sales of our products to one
or more of these key customers could significantly harm our business, financial
condition and results of operations. Our operating results will also depend on
our ability to successfully develop relationships with additional key customers.
We cannot assure you that we will retain our largest customers or that we will
be able to recruit additional key customers.

Most of our customers can cease doing business with us with limited notice
and with little or no penalty. Our customer agreements typically do not require
minimum purchases. Further, many of our customers also have relationships with
our competitors. These relationships may affect the purchasing decisions of such
customers. We cannot assure you that our customers will not choose to direct
their business to our competitors.

BECAUSE THE SUPERCONDUCTIVE ELECTRONICS MARKET IS NEW AND UNCERTAIN, WE CANNOT
PREDICT WHETHER OUR PRODUCTS WILL BE COMMERCIALLY ACCEPTED

The superconductive electronics market is new, with limited product
commercialization to date. Since our inception we have been engaged principally
in research and development activities. Although we have introduced a number of
superconductive electronic products, most of our revenues to date have been
derived from research and development contracts. We may not successfully
develop, introduce and market new products or product enhancements. Any new
products or product enhancements may not be well received in the marketplace or
achieve any significant degree of commercial acceptance.

We cannot assure you that, even if our products meet performance standards
acceptable to the superconductive electronics market, we will be able to
manufacture adequate quantities of any products we introduce at costs low enough
for us to continue to operate on a timely basis, or that any such products will
offer price/performance advantages sufficient to achieve market acceptance. If
we fail to

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successfully develop, manufacture and commercialize products that offer
sufficient price/performance advantages or to achieve significant market
acceptance on a timely and cost-effective basis, our business, operating results
and financial condition could be harmed.

WE MAY NOT SUCCESSFULLY ADJUST TO THE RAPIDLY CHANGING SUPERCONDUCTIVE
ELECTRONICS MARKET

The field of superconductivity is characterized by rapidly advancing
technology. Our success depends upon our ability to keep pace with advancing
superconductive technology, including materials, processes and industry
standards. We have focused our development efforts to date principally on
yttrium barium copper oxide, a high-temperature superconductor. However, yttrium
barium copper oxide may not ultimately prove commercially competitive against
other currently known materials or materials that may be discovered in the
future.

We will have to continue to develop and integrate advances in technology for
the fabrication of electronic circuits and devices and manufacture of commercial
quantities of our products. We will also need to continue to develop and
integrate advances in complementary technologies. We cannot assure you that our
development efforts will not be rendered obsolete by research efforts and
technological advances made by others or that materials other than those
currently used by us will not prove more advantageous for the commercialization
of superconductive electronic products.

OUR SALES CYCLES ARE LONG AND UNPREDICTABLE, MAKING OUR FUTURE PERFORMANCE AND
THE VALUE OF OUR COMMON STOCK UNPREDICTABLE

Because customers who purchase our systems must commit a significant amount
of capital and other resources, sales to our customers are subject to delays
beyond our control. Our customers must consider budgetary constraints, comply
with internal procedures for approving large expenditures and complete whatever
testing is necessary for them to integrate new technologies that will affect
their key operations. While the sales cycle for an initial order of our products
is typically 6 to 12 months, we may experience longer sales cycles in the
future. Such delays or lengthened sales cycles could have a material adverse
effect on our business, operating results and financial condition.

THE YEAR 2000 COULD FORCE US TO SPEND SIGNIFICANT FUNDS TO PREPARE FOR POTENTIAL
PROBLEMS, AND WE COULD EXPERIENCE SIGNIFICANT LOSSES AT THAT TIME

Many computer systems and applications experience problems handling dates
beyond the year 1999, and will need to be modified before the year 2000 in order
to remain functional. Any of our computer programs that have date-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000. This could result in a system failure or miscalculations causing
disruptions of our key operations, including, among other things, a temporary
inability to process transactions, send invoices, or engage in similar normal
business activities. Although we are working to avoid any problems, year 2000
problems could harm our operations and cause significant losses.

In addition, as our year 2000 compliance project continues, we may discover
additional problems for which we may not be able to develop, implement, or test
possible solutions. Also, we may find that the costs of these activities
materially exceed our current expectations. Necessary expenses arising from
these additional problems would harm our results of operations.

BECAUSE THE TRADING PRICE OF OUR COMMON STOCK MAY CONTINUE TO BE VOLATILE, WE
MAY BE EXPOSED TO COSTLY SECURITIES CLASS ACTION LAWSUITS

The market price of our common stock has been and is likely to continue to
be highly volatile. Our common stock may be significantly affected by the
following factors:

- Actual or anticipated fluctuations in our operating results;

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- Announcements of technological innovations;

- New products or new contracts by us or our competitors;

- Conditions and trends in the telecommunications and other technology
industries;

- Changes in financial estimates of our future results by securities
analysts.

In addition, the stock market has from time to time experienced significant
price and volume fluctuations that have particularly affected the market prices
for the common stocks of technology companies. In the past, securities class
action lawsuits have often been brought against such companies following periods
of stock price volatility. We may be affected by similar litigation in the
future which could result in substantial costs and cause a diversion of
management's attention and resources. These events could significantly harm our
business, operating results and financial condition.

BECAUSE WE DEPEND HEAVILY ON THE SUCCESSFUL DEVELOPMENT AND SALE OF OTHER
COMPLEMENTARY TECHNOLOGIES, WE MAY NOT SUCCEED IF CERTAIN OTHER PRODUCTS AND
TECHNOLOGIES ARE NOT AVAILABLE TO US

Our success depends on the commercial availability of a number of other
technologies, such as specialized mechanical refrigeration systems, super-cooled
semiconductor technology and specialized microchip materials. Some of these
complementary technologies are in the development stage. We do not intend to
devote significant efforts or resources to developing these technologies; we
depend on the development activities of third parties in these areas. We cannot
assure you that these technologies will be successfully developed and
commercialized, or that they will achieve market acceptance.

OUR DEPENDENCE ON A SMALL NUMBER OF SUPPLIERS MAKES US PARTICULARLY VULNERABLE
TO EVENTS WHICH IMPACT OUR SUPPLIERS, MOST OF WHICH EVENTS ARE BEYOND OUR
CONTROL

Certain components of our subsystems, including cryocoolers, are currently
obtained from a single source or a limited number of suppliers. Our business,
operating results and financial condition could be significantly harmed by (a)
an inability to develop alternative sources or to meet customer demand, (b) a
prolonged interruption in supply, or (c) a significant increase in price of one
or more components.

OUR FAILURE TO SUCCESSFULLY DEVELOP COLLABORATIVE RELATIONSHIPS WITH GOVERNMENT
AGENCIES, RESEARCH INSTITUTIONS AND OTHER COMPANIES COULD HARM OUR BUSINESS,
FINANCIAL CONDITION AND OPERATING RESULTS

We have established and continue to seek collaborative arrangements with
corporate partners, government agencies and public and private research
institutions to develop, manufacture and market superconductive electronic
products. Our success depends on the development and success of these
collaborative arrangements. However, we may not be able to enter into
collaborative arrangements on commercially reasonable terms, and even if
established, these arrangements may not succeed. Even if these programs are
successful, we cannot assure you that our collaborative partners will not seek
to manufacture jointly developed products themselves or obtain them from
alternative sources. Finally, these programs (a) may require us to share control
over our development, manufacturing and marketing programs and relinquish rights
to our technology, (b) may be subject to termination at the discretion of our
collaborative partners and (c) may restrict our ability to engage in certain
areas of product development, manufacturing and marketing.

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OUR ABILITY TO PROTECT OUR PATENTS AND OTHER PROPRIETARY RIGHTS IS UNCERTAIN,
EXPOSING US TO POSSIBLE LOSSES OF COMPETITIVE ADVANTAGE

Our efforts to protect our proprietary rights may not succeed in preventing
their infringement by others or ensure that these rights will provide us with a
competitive advantage. Pending patent applications may not result in issued
patents and the validity of our issued patents may be subject to challenge.
Third parties may also be able to design around the patented aspects of our
products. Additionally, certain of the issued patents and patent applications
are jointly owned by us and third parties. The fact that any owner or co-owner
of a patent has the right to license rights under their patent or application
which could cause us to lose exclusive control over our inventions. These events
could result in losses of competitive advantage, which losses may harm our
business, financial condition and results of operation.

INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS AGAINST US IN CONNECTION WITH OUR USE
OF YTTRIUM BARIUM COPPER OXIDE COULD MATERIALLY HARM OUR RESULTS OF OPERATIONS

The patent positions of companies using high-temperature superconductor
technology, including Conductus, are uncertain and there is significant risk
that others, including our competitors, have obtained or will obtain patents
relating to our planned products or technology.

We cannot assure you that we will obtain licenses to patents covering
yttrium barium copper oxide compositions, if these patents are issued, or to any
other patents applicable to our business, on commercially reasonable terms. We
may be required to expend significant resources to develop alternatives that
would not infringe the yttrium barium copper oxide patents or to obtain licenses
to the technology that we infringe or would infringe. We may not be able to
successfully design around these patents or obtain licenses to them and may have
to defend ourselves at substantial cost against allegations of infringement of
third party patents. An adverse outcome in such a suit could subject us to
significant liabilities or require us to cease using such technology. Even the
cost of defending a patent lawsuit would constitute a major financial burden for
us, one that would significantly harm our business, operating results and
financial condition.

OUR LIMITED COMMERCIAL MANUFACTURING EXPERIENCE AND CAPABILITIES COULD HAMPER
OUR SUCCESS IN THE HIGHLY COMPETITIVE AND COMPLEX SUPERCONDUCTIVE PRODUCTS
MARKET

Our failure to develop an adequate manufacturing capacity would
significantly harm our business, operating results and financial condition. We
have established a limited production facility. To date, we have focused
primarily on developing fabrication processes and producing limited quantities
of superconducting thin films and components. Although our processing technology
derives principally from semiconductor manufacturing technology, the fabrication
of high-temperature superconductor components is especially difficult because of
specific properties unique to high-temperature superconductor materials.

We cannot assure you that we can develop the enhanced processing technology
necessary to develop more advanced superconducting devices and circuits or that
we will be able to attain commercial yields in the future. Even if we can attain
commercial yields, we may suffer recurring yield problems caused by mask
defects, impurities in materials and other factors. While we have established
limited production facilities for our electronics products, we may not be able
to expand our processing, production control, assembly, testing and quality
assurance capabilities to produce existing or planned superconductive electronic
products in adequate commercial quantities.

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OUR SUCCESS DEPENDS ON THE ATTRACTION AND RETENTION OF SENIOR MANAGEMENT AND
TECHNICAL PERSONNEL WITH EXPERTISE RELEVANT TO THE HIGH-TEMPERATURE
SUPERCONDUCTOR MARKET

As a competitor in the highly technical high-temperature superconductor
market, we depend heavily upon the efforts of our existing senior management and
technical teams. The loss of the services of one or more members of these teams
could slow our product development and commercialization objectives. Due to the
specialized nature of high-temperature superconductors, we also depend upon our
ability to attract and retain qualified technical and key management personnel.
In addition, we target our products towards markets that require substantial
industry knowledge and expertise. We currently have limited expertise in these
areas and it is essential that we attract and retain qualified personnel with
expertise in manufacturing, marketing, sales and support in each of our targeted
markets. Competition for qualified personnel in the high-temperature
superconductor market is intense and we may not be able to continue to attract
and retain qualified personnel necessary for the development of our business.

REGULATORY CHANGES NEGATIVELY AFFECTING WIRELESS COMMUNICATIONS COMPANIES COULD
SUBSTANTIALLY HARM OUR BUSINESS, FINANCIAL CONDITION AND OPERATING RESULTS

The operation of cellular and personal communications services communication
stations, or "base stations," is strictly regulated in the United States by the
Federal Communications Commission. Base stations and equipment marketed for use
in base stations must meet specific technical standards. Our ability to sell our
high-temperature superconductor filter subsystems will depend upon the rate of
deployment of personal communications services, or "PCS," the ability of base
station equipment manufacturers and of cellular base station operators to obtain
and retain the necessary approvals and licenses, and changes in regulations that
may impact the requirements for our products. Any failure or delay of base
station manufacturers or operators in obtaining necessary approvals could
significantly harm our business, operating results and financial condition.

COMPLIANCE WITH ENVIRONMENTAL REGULATIONS COULD BE ESPECIALLY COSTLY DUE TO THE
HAZARDOUS MATERIALS WE MUST USE AS A MAKER OF SEMICONDUCTORS

We are subject to a number of federal, state and local governmental
regulations related to the use, storage, discharge and disposal of toxic,
volatile or otherwise hazardous chemicals used in our business. Any failure to
comply with present or future regulations could result in fines being imposed,
suspension of production or interruption of our operations. In addition, these
regulations could restrict our ability to expand or require us to acquire costly
equipment or incur other significant expenses to comply with environmental
regulations or to clean up prior discharges.

BECAUSE OUR CORPORATE GOVERNANCE STRUCTURE MAY PREVENT OUR ACQUISITION BY
ANOTHER COMPANY, YOU MAY BE DENIED A PREMIUM OVER THE PUBLIC TRADING PRICE FOR
YOUR SHARES

It is possible that the acquisition of a majority of our outstanding voting
stock by another company could result in our shareholders receiving a premium
over the public trading price for their shares. However, we have adopted a
stockholder rights plan which, if triggered, could make it more difficult for a
third party to acquire a majority of our outstanding voting stock, even if doing
so would create an immediate benefit to our stockholders. Further, provisions of
our restated certificate of incorporation and bylaws and of Delaware corporate
law could delay or make more difficult an acquisition of Conductus by merger,
tender offer or proxy contest, even if it would create an immediate benefit to
our stockholders. For example, our restated certificate of incorporation does
not permit stockholders to act by written consent and our bylaws require advance
notice of any matters to be brought before the stockholders at the annual
meeting.

11
<PAGE>
In addition, our board of directors has the authority to issue up to
5,000,000 shares of preferred stock and to determine the terms of this preferred
stock, including voting rights of those shares, without any further vote or
action by the stockholders. The rights of the holders of common stock may be
subordinate to, and adversely affected by, the rights of holders of preferred
stock that may be issued in the future. The issuance of preferred stock could
also make it more difficult for a third party to acquire a majority of our
outstanding voting stock. These factors could result in the loss of a premium
over the public trading price for their shares of Conductus.

WE DO NOT INTEND TO PAY DIVIDENDS

We have never paid cash dividends and do not anticipate paying cash
dividends on the common stock in the foreseeable future.

THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS WHICH ARE SUBJECT TO RISKS
AND UNCERTAINTIES

This prospectus contains forward-looking statements. Forward-looking
statements involve projections based upon current expectations, and their
accuracy is subject to risks and uncertainties. You should consider any
statements that are not statements of historical fact to be forward-looking
statements. We have tried, wherever possible, to identify these forward-looking
statements by using words such as "anticipate," "believe," "estimate," "expect"
and similar expressions. Our actual results and the timing of certain events may
differ significantly from the results and events discussed in the forward-
looking statements. Factors that might cause such a discrepancy include those
discussed in "Risk Factors," "Business" and elsewhere in this prospectus. All
forward-looking statements included in this document are based on information
available to us on the date of this prospectus, and we do not assume any
obligation to update any of these forward-looking statements.

12
<PAGE>
USE OF PROCEEDS

Conductus will not receive any proceeds from the sale of these shares of
common stock.

PLAN OF DISTRIBUTION

We have filed with the Securities and Exchange Commission a registration
statement on Form S-3, of which this prospectus forms a part, in connection with
the future resale of these shares. We have agreed to use our best efforts to
keep this registration statement effective for two years, or at least until all
these shares have been sold by the selling stockholders. Although we will
receive no proceeds from this offering, we will bear all costs, expenses and
fees in connection with this offering. The selling stockholders will bear any
brokerage commissions or similar selling expenses related to their resale of
their common stock.

The common stock offered in this offering may be sold by the selling
stockholders, from time to time, in the following manners:

- in the over-the counter market,

- on the Nasdaq SmallCap Market,

- in privately negotiated transactions, or

- by a combination of the above methods.

The selling stockholders may sell at various fixed prices, at prevailing market
prices or at negotiated prices.

The selling stockholders may use broker-dealers to sell their shares. If
this happens, these broker-dealers will either receive discounts or commissions
from the selling stockholders, or they will receive commissions from purchasers
of shares for whom they acted as agents. These broker-dealers may receive
compensation in excess of customary commissions.

SELLING STOCKHOLDERS

The following table sets forth, as of February 15, 1999, information
regarding ownership of our common stock by the selling stockholders, as adjusted
to reflect the sale of the shares offered in this offering. The shares to be
offered by the selling stockholders will be acquired through the exercise of
their warrants to purchase common stock and conversion of their shares of Series
B preferred stock into shares of common stock.

The ownership figures in the table below assume the conversion of all
outstanding shares of Series B preferred stock into common stock and the
exercise of all outstanding warrants to purchase common stock. Under this
assumption, 10,213,363 shares of our common stock were outstanding as of
February 15, 1999.

The registration statement shall also cover any additional shares of common
stock which become issuable in connection with these shares by reason of any
stock dividend, stock split, recapitalization or similar transaction.

AMC Partners 1996, L.P., is the general partner of Asset Management
Associates 1996, L.P. AMC Partners 1984 is the general partner of Asset
Management Partners. Dr. Shoch, the Chairman of the Board, is a general partner
of AMC Partners 1996, L.P., and AMC Partners 1984.

Unless otherwise indicated, the mailing address of each person listed is
Conductus, Inc., 969 W. Maude Avenue, Sunnyvale California 94086. Persons whose
name is followed with a "+" symbol have a mailing address of c/o Davenport &
Company LLC, 901 East Cary Street, Richmond, VA 23219. Persons whose name is
followed with a "#" symbol have a mailing address of c/o Portola Group, 3000
Sand Hill Road, Suite 2-145, Menlo Park, CA 94025. Mr. DiBona, Asset Management
Associates 1984, Asset Management Associates 1996, L.P., and Asset Management
Partners have a mailing address of 2275 East Bayshore Road, Suite 150, Palo
Alto, CA 94303.

13
<PAGE>

<TABLE>
<CAPTION>
THE NUMBER OF SHARES OWNED
PRIOR TO THIS OFFERING ASSUMES
-----------------------------------
THE CONVERSION OF
SERIES B
NUMBER OF PREFERRED STOCK THE EXERCISE OF
SHARES INTO THE WARRANTS FOR THE
OWNED PRIOR FOLLOWING NUMBER FOLLOWING NUMBER
TO THIS OF SHARES OF OF SHARES OF
NAME AND ADDRESS OF SELLING STOCKHOLDER OFFERING COMMMON STOCK COMMON STOCK
- ----------------------------------------------------------------------- ----------- ----------------- ----------------
<S> <C> <C> <C>
Charles L. Grimes...................................................... 413,332 244,444 48,888
P.O. Box 136
Mendenhall, PA 19357-0136
Banner Partners Minaret, L.P........................................... 152,400 127,000 25,400
c/o Bryan E. Edwards
150 Isabella Avenue
Atherton, CA 94027
13,200 11,100 2,200
William H. Draper, III Revocable Trust.................................
William H. Draper
91 Tallwood Court
Atherton, CA 94027
Fred Gibbons........................................................... 26,400 22,000 4,400
11800 Murietta Lane
Los Altos Hills, CA 94022
Micro Cap Partners, L.P................................................ 134,400 112,000 22,400
c/o Palo Alto Investors, Inc.
470 University Avenue
Palo Alto, CA 94301
TIFF Investment Program, Inc........................................... 120,000 100,000 20,000
c/o Investors Bank & Trust
P.O. Box 9130
Boston, MA 02117
Asset Management Associates 1984....................................... 529,361 148,150 29,680
1,155,558 962,965 192,593
Asset Management Associates 1996, L.P..................................
Asset Management Partners.............................................. 222,222 185,185 37,037
Tony DiBona SEP-IRA.................................................... 9,620 7,600 1,520
D&S Vending, Inc.+..................................................... 13,320 11,100 2,200

NUMBER OF NUMBER OF PERCENTAGE OF
SHARES SHARES TO CONDUCTUS' COMMON
OFFERED IN BE OWNED STOCK TO BE OWNED
THIS AFTER THIS AFTER THIS
NAME AND ADDRESS OF SELLING STOCKHOLDER OFFERING OFFERING OFFERING
- ----------------------------------------------------------------------- ---------- ----------- -----------------
<S> <C> <C> <C>
Charles L. Grimes...................................................... 293,332 620,000 6.1
P.O. Box 136
Mendenhall, PA 19357-0136
Banner Partners Minaret, L.P........................................... 152,400 0 --
c/o Bryan E. Edwards
150 Isabella Avenue
Atherton, CA 94027
13,200 0 --
William H. Draper, III Revocable Trust.................................
William H. Draper
91 Tallwood Court
Atherton, CA 94027
Fred Gibbons........................................................... 26,400 0 --
11800 Murietta Lane
Los Altos Hills, CA 94022
Micro Cap Partners, L.P................................................ 134,400 0 --
c/o Palo Alto Investors, Inc.
470 University Avenue
Palo Alto, CA 94301
TIFF Investment Program, Inc........................................... 120,000 0 --
c/o Investors Bank & Trust
P.O. Box 9130
Boston, MA 02117
Asset Management Associates 1984....................................... 177,780 351,581 3.4
1,155,558 0 --
Asset Management Associates 1996, L.P..................................
Asset Management Partners.............................................. 222,222 0 --
Tony DiBona SEP-IRA.................................................... 9,120 500 *
D&S Vending, Inc.+..................................................... 13,320 0 --
</TABLE>

14
<PAGE>

<TABLE>
<CAPTION>
THE NUMBER OF SHARES OWNED
PRIOR TO THIS OFFERING ASSUMES
-----------------------------------
THE CONVERSION OF
SERIES B
NUMBER OF PREFERRED STOCK THE EXERCISE OF NUMBER OF
SHARES INTO THE WARRANTS FOR THE SHARES
OWNED PRIOR FOLLOWING NUMBER FOLLOWING NUMBER OFFERED IN
TO THIS OF SHARES OF OF SHARES OF THIS
NAME AND ADDRESS OF SELLING STOCKHOLDER OFFERING COMMMON STOCK COMMON STOCK OFFERING
- -------------------------------------------------------------- ----------- ----------------- ---------------- ----------
<S> <C> <C> <C> <C>
Eaglebrook School+............................................ 22,200 18,500 3,700 22,200
Norman Miller, M.D.+.......................................... 22,200 18,500 3,700 22,200
Joe Antrium+.................................................. 11,160 9,300 1,860 11,160
Philip Klaus, Jr.+............................................ 11,160 9,300 1,860 11,160
J. Read Branch, Jr. and Janet D. Branch+...................... 44,400 37,000 7,400 44,400
Elizabeth O. Dennis and O.D. Dennis, Jr.+..................... 55,560 46,300 9,260 55,560
Janet J. Dennis+.............................................. 11,160 9,300 1,860 11,160
Richard J. Clark and Linda S. Clark+.......................... 22,200 18,500 3,700 22,200
Martin L. Brill+.............................................. 11,160 9,300 1,860 11,160
Anthony F. Markel August 1998 GRAT+........................... 11,160 9,300 1,860 11,160
Robert F. Mizell+............................................. 11,160 9,300 1,860 11,160
George A. Trivette and Janet H. Trivette+..................... 26,640 22,200 4,440 26,640
Coleman Wortham+.............................................. 60,000 50,000 10,000 60,000
E. Bryson Powell, III+........................................ 22,200 18,500 3,700 22,200
Grace Associates+............................................. 44,400 37,000 7,400 44,400
David A. Wright and Carrie H. McAllister+..................... 15,600 13,000 2,600 15,600
Doris E. Wright+.............................................. 11,160 9,300 1,860 11,160
Gaubert Family trust dated 6/19/87#........................... 44,444 37,037 7,407 44,444
Claude J. Gaubert, Jr. Irrevocable trust dated 4/28/93#....... 22,221 18,518 3,703 22,221
Michelle Gaubert Dotterer Irrevocable trust dated 4/28/93#.... 22,221 18,518 3,703 22,221
Danielle Gaubert Irrevocable trust dated 4/28/93#............. 22,221 18,518 3,703 22,221
Susan Jackson#................................................ 111,555 46,296 9,259 55,555
Robert C. Fitzwilson trust dated 6/24/97#..................... 80,855 46,296 9,259 55,555

NUMBER OF PERCENTAGE OF
SHARES TO CONDUCTUS' COMMON
BE OWNED STOCK TO BE OWNED
AFTER THIS AFTER THIS
NAME AND ADDRESS OF SELLING STOCKHOLDER OFFERING OFFERING
- -------------------------------------------------------------- ----------- -----------------
<S> <C> <C>
Eaglebrook School+............................................ 0 --
Norman Miller, M.D.+.......................................... 0 --
Joe Antrium+.................................................. 0 --
Philip Klaus, Jr.+............................................ 0 --
J. Read Branch, Jr. and Janet D. Branch+...................... 0 --
Elizabeth O. Dennis and O.D. Dennis, Jr.+..................... 0 --
Janet J. Dennis+.............................................. 0 --
Richard J. Clark and Linda S. Clark+.......................... 0 --
Martin L. Brill+.............................................. 0 --
Anthony F. Markel August 1998 GRAT+........................... 0 --
Robert F. Mizell+............................................. 0 --
George A. Trivette and Janet H. Trivette+..................... 0 --
Coleman Wortham+.............................................. 0 --
E. Bryson Powell, III+........................................ 0 --
Grace Associates+............................................. 0 --
David A. Wright and Carrie H. McAllister+..................... 0 --
Doris E. Wright+.............................................. 0 --
Gaubert Family trust dated 6/19/87#........................... 0 --
Claude J. Gaubert, Jr. Irrevocable trust dated 4/28/93#....... 0 --
Michelle Gaubert Dotterer Irrevocable trust dated 4/28/93#.... 0 --
Danielle Gaubert Irrevocable trust dated 4/28/93#............. 0 --
Susan Jackson#................................................ 56,000 *
Robert C. Fitzwilson trust dated 6/24/97#..................... 25,300 *
</TABLE>

- ------------------------

* Indicates ownership of less than 1% of our common stock

15
<PAGE>

LEGAL MATTERS

Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP, Menlo Park,
will pass upon the validity of the common stock offered in this offering.

EXPERTS

The financial statements incorporated in this prospectus by reference to the
Annual Report on Form 10-K of Conductus, Inc. as of December 31, 1998 and 1997
and for each of the three years in the period ended December 31, 1998 have been
so incorporated in reliance on the report, which contains an explanatory
paragraph relating to Conductus' ability to continue as a going concern as
described in Note 1 to the financial statements, of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.

ADDITIONAL INFORMATION

We have filed with the Securities and Exchange Commission a registration
statement on Form S-3 under the Securities Act with respect to these shares
common stock. This prospectus does not contain all of the information set forth
in the registration statement and the exhibits and schedules to the registration
statement. We refer you to the registration statement and its exhibits and
schedules for further information. Statements contained in this prospectus
concerning the contents of any contract or any other document referred to are
not necessarily complete; reference is made in each instance to the copy of such
contract or document filed as an exhibit to the registration statement. Each
such statement is qualified by such reference to such exhibit.

The registration statement, including exhibits and schedules thereto, may be
inspected without charge at the Commission's Public Reference Room at 450 Fifth
Street, N.W., Washington D.C. 20549. You may obtain information on the operation
of the Public Reference Room by calling the Commission at 1-900-SEC-0330. You
may obtain copies of all or any part of the registration statement from the
Commission after paying the prescribed fees. The Commission maintains a web site
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission at
http://www.sec.gov.

All documents filed by Conductus pursuant to Sections 13(a), 13(c), 14 or
15(d) of the 1934 Act subsequent to the date of this prospectus but prior to the
termination of the offering to which this prospectus relates shall be deemed to
be incorporated by reference and made a part of this prospectus as of their
respective filing dates. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is
incorporated herein modifies, supersedes or replaces such statement. Any
statement so modified or superseded shall not be deemed, except as so modified,
superseded or replaced, to constitute a part of this prospectus.

The information relating to Conductus contained in this prospectus does not
purport to be comprehensive and should be read together with the information
contained in the documents incorporated by reference herein.

Upon written or oral request, Conductus will provide without charge to each
person, including any beneficial owner, to whom a copy of the prospectus is
delivered a copy of the documents incorporated by reference herein (other than
exhibits to such documents unless such exhibits are specifically incorporated by
reference herein). Requests should be submitted in writing or by telephone to
(468) 523-9950

16
<PAGE>

to Chief Financial Officer, Conductus, Inc., at our principal executive offices,
969 W. Maude Avenue, Sunnyvale, California 94086.

------------------------

This prospectus includes trademarks of Conductus and other corporations.

------------------------

INFORMATION INCORPORATED BY REFERENCE

The following documents previously filed by Conductus with the Securities
and Exchange Commission (File No. 0-20540) are hereby incorporated by reference
and made a part of this prospectus.

1. Our Annual Report on Form 10-K for the year ended December 31, 1998;

2. Our Quarterly Report on Form 10-Q for the quarter ended March 31, 1999,
filed May 17, 1999;

3. Our Quarterly Report on Form 10-Q/A for the quarter ended March 31,
1998, filed May 27, 1999; and

4. The description of our common stock contained in our registration
statement on Form S-1 as filed with the Commission on April 27, 1999.

17
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY US. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY TO ANY PERSON OR BY ANYONE IN ANY JURISDICTION IN
WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO THE DATE HEREOF.

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary........................................................ 3
Risk Factors.............................................................. 4
Use of Proceeds........................................................... 13
Plan of Distribution...................................................... 13
Selling Stockholders...................................................... 13
Legal Matters............................................................. 16
Experts................................................................... 16
Additional Information.................................................... 16
Information Incorporated by Reference..................................... 17
</TABLE>

UNTIL , 1999 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT PARTICIPATING
IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN
ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

3,069,243 SHARES

COMMON STOCK

[LOGO]

---------------------

PROSPECTUS

---------------------

, 1999

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the costs and expenses payable by Conductus,
Inc. (the "Company" or "Registrant") in connection with the sale of common stock
being registered. All amounts are estimates except the SEC registration fee.

<TABLE>
<S> <C>
SEC Registration fee............................................ $1,400.00
Printing and engraving expenses................................. 20,000.00
Legal fees and expenses......................................... 25,000.00
Accounting fees and expenses.................................... 15,000.00
Blue sky fees and expenses...................................... 10,000.00
Transfer agent fees............................................. 4,000.00
Miscellaneous fees and expenses................................. 4,600.00
---------
Total..................................................... $80,000.00
---------
---------
</TABLE>

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145 of the Delaware General Corporation Law authorizes a court to
award or a corporation's board of directors to grant indemnification to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933,
as amended (the "Securities Act"). Article VII, Section 6, of the Registrant's
bylaws provides for mandatory indemnification of its directors and officers and
permissible indemnification of employees and other agents to the maximum extent
permitted by the Delaware General Corporation Law. The Registrant's Certificate
of Incorporation provides that, pursuant to Delaware law, its directors shall
not be liable for monetary damages for breach of the directors' fiduciary duty
as directors to the Company and its stockholders. This provision in the
Certificate of Incorporation does not eliminate the directors' fiduciary duty,
and in appropriate circumstances equitable remedies such as injunctive or other
forms of non-monetary relief will remain available under Delaware law. In
addition, each director will continue to be subject to liability for breach of
the director's duty of loyalty to the Company for acts or omissions not in good
faith or involving intentional misconduct, for knowing violations of law, for
actions leading to improper personal benefit to the director, and for payment of
dividends or approval of stock repurchases or redemptions that are unlawful
under Delaware law. The provision also does not affect a director's
responsibilities under any other law, such as the federal securities laws or
state or federal environmental laws. The Registrant has entered into
Indemnification Agreements with its officers and directors, a form of which is
incorporated herein by reference. The Indemnification Agreements provide the
Registrant's officers and directors with further indemnification to the maximum
extent permitted by the Delaware General Corporation Law."

II-1
<PAGE>

ITEM 16. EXHIBITS

The exhibits listed in the index below are filed as part of this
registration statement.

<TABLE>
<CAPTION>
EXHIBIT
NO DESCRIPTION
- ----------------- -----------------------------------------------------------------------------------------------
<C> <S>

2.1(1) Stock Exchange Agreement dated as of May 28, 1993, between the Company and Tristan
Technologies, Inc.
3.1(2) Restated Certificate of Incorporation.
3.2(3) Restated Bylaws.
3.3(4) Certificate of Designation of Series B Preferred Stock.
4.1(3) Stockholder Rights Plan.
5.1* Opinion of Counsel.
10.1(1) 1987 Stock Option Plan.
10.2(1) Amended 1989 Stock Option Plan.
10.3(5) 1992 Stock Option/Stock Purchase Plan.
10.4(6) 1994 Employee Stock Purchase Plan.
10.5(1) Second Amended and Restated Registration Rights Agreement dated June 3, 1993.
10.6(4) Form of Series B Preferred Stock and Warrant Purchase Agreement, dated September, 1998, and
September 22, 1998, between the Company and Series B Investors.
10.7(4) Form of Warrant to Purchase Common Stock between the Company and Series B Investors.
10.8(7) Employment Agreement dated May 3, 1994 between Registrant and Mr. Charles E. Shalvoy.
10.9(1) Form of Indemnification Agreement between the Registrant and each of its directors and
officers.
10.10(1)+ Coordinated Research Program Agreement dated October 14, 1988 and Amendment dated May 26, 1991
between the Registrant and Hewlett-Packard Company ("H-P"), as amended by the Agreement between
Registrant and Hewlett-Packard Company dated June 2, 1993.
10.11(8) Collaboration Agreement between Registrant and CTI dated September 19, 1995.
10.12(8) High Temperature Superconductor Thin-Film Manufacturing Alliance Agreement among Registrant,
Superconductor Technologies, Inc., Stanford University, Georgia Research Corporation,
Microelectronic Control and Sensing Incorporated, IBIS, Focused Research and BDM Federal dated
November 17, 1995.
10.13(9)+ Superconducting Filter Technology Joint Development Agreement dated April 25, 1996 between the
Registrant and Lucent Technologies Inc.
10.14(4) Engagement Letter between the Company and Sutro and Co. Inc., dated March 24, 1998.
10.15(4) Amendment to Engagement Letter between the Company and Sutro and Co. Inc., dated September 2,
1998.
10.16(4) Engagement Letter between the Company and Davenport and Co., dated September 2, 1998.
10.17(4) Master Lease Agreement between the Company and Leasing Technologies International, Inc., dated
June 15, 1998.
10.18(1) Lease Agreement dated May 3, 1993 between the Registrant and Mozart-McKee Limited Partnership
for Sunnyvale facilities.
10.19(7) Lease Agreement dated December 8, 1994 between Registrant and Mozart-McKee Limited Partnership
for Sunnyvale facilities.
</TABLE>

II-2
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NO DESCRIPTION
- ----------------- -----------------------------------------------------------------------------------------------
<C> <S>
10.20(7) Business Loan Agreement dated August 15, 1994 between Registrant and Silicon Valley Bank for
working capital credit facility and term loan facility.
10.21(10) Loan Modification Agreement dated June 30, 1997, between Registration and Silicon Valley Bank
modifying the Business Loan Agreement dated August 15, 1994.
10.22(10) Loan Modification Agreement dated November 12, 1997, between Registration and Silicon Valley
Bank modifying the Business Loan Agreement dated August 15, 1994.
10.23(10) Loan Modification Agreement dated December 23, 1997, between Registration and Silicon Valley
Bank modifying the Business Loan Agreement dated August 15, 1994.
10.24(11) Business Loan Agreement dated March 8, 1996 between Registrant and Silicon Valley Bank for
working capital credit facility and term loan facility.
10.25(12) Business Loan Agreement dated December 27, 1996 between Registrant and Silicon Valley Bank for
working capital credit facility and term loan facility.
10.26(4) Master Loan and Security Agreement between the Company and Transamerica Business Credit
Corporation, dated June 26, 1998.
10.27(4) Stock Subscription Warrant Agreement between the Company and Transamerica Business Credit
Corporation, dated June 26, 1998.
10.28(13) Silicon Valley Bank Loan Agreement.
10.29(13) Collateral Assignment, Patent Mortgage and Security Agreement between the Company and Silicon
Valley Bank.
10.30(10)+ Asset Purchase Agreement dated July 9, 1997 between Registrant and Bruker Instruments, Inc. for
sale of assets of Registrant's NMR Probe business.
10.31(10) Asset Purchase Agreement dated August 15, 1997 between Registrant and Neocera, Inc. for sale of
Registrant's assets related to its temperature controller business.
10.32(10) Asset Purchase Agreement dated September 3, 1997, between Registrant and Niki Glass Ltd. for
sale of Registrant's assets related to portions of its instruments business.
10.33(14)(15)+ License Agreement between the Company and General Dynamics Information Systems, Inc., dated May
4, 1999.
10.34(14) Cross-License, Supply and Training Agreement between the Company and General Dynamics
Information Systems, Inc., dated May 4, 1999.
23.1 Consent of Independent Accountants.
24.1* Power of Attorney.
27.1* Financial Data Schedule.
</TABLE>

- ------------------------

* Previously filed.

+ Confidential treatment granted or requested as to certain portions of these
exhibits.

(1) Incorporated herein by reference to the Company's Registration Statement on
Form S-1 (Number 33-64020), filed with the SEC on May 15, 1996, as amended.

(2) Incorporated herein by reference to the Company's 1993 Annual Report on Form
10-K.

(3) Incorporated herein by reference to the Company's Registration Statement on
Form 8-K, filed with the SEC on January 22, 1998.

(4) Incorporated herein by reference to the Company's Form 10-Q, filed with the
SEC on November 16, 1998.

(5) Incorporated herein by reference to the Company's Registration Statement on
Form S-8, filed with the SEC on November 26, 1997.

II-3
<PAGE>
(6) Incorporated herein by reference to the Company's Registration Statement on
Form S-8, filed with the SEC on August 5, 1994.

(7) Incorporated herein by reference to the Company's 1994 Annual Report on Form
10-K.

(8) Incorporated herein by reference to Amendment No. 2 to the Company's
Registration Statement on Form S-1 (Number 333-3815), filed with the SEC on
June 17, 1996.

(9) Incorporated herein by reference to the Company's Registration Statement on
Form S-1 (Number 333-3815), filed with the SEC on May 10, 1996, as amended.

(10) Incorporated herein by reference to the Company's 1998 Annual Report on
Form 10-K.

(11) Incorporated herein by reference to the Company's 1995 Annual Report on
Form 10-K.

(12) Incorporated herein by reference to the Company's 1996 Annual Report on
Form 10-K.

(13) Incorporated herein by reference to the Company's Form 10-Q, filed with the
SEC on May 14, 1998.

(14) Incorporated herein by reference to the Company's Form 10-Q, filed with the
SEC on May 17, 1999.

(15) Incorporated herein by reference to the Company's Form 10-Q/A filed with
the SEC on May 27, 1999.

ITEM 17. UNDERTAKINGS

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the Delaware General Corporation Law, the Certificate of
Incorporation or the Bylaws of the Registrant, the Underwriting Agreement, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act, and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer,
or controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered hereunder, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question of whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.

The Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act, the
information omitted from the form of Prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of Prospectus shall be deemed
to be a new Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.

II-4
<PAGE>
The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;

(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.

(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.

(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.

(4) If the registrant is a foreign private issuer, to file a post-effective
amendment to the registration statement to include any financial statements
required by Rule 3-19 of this chapter at the start of any delayed offering or
throughout a continuous offering. Financial statements and information otherwise
required by Section 10(a)(3) of the Act need not be furnished, PROVIDED, that
the registrant includes in the prospectus, by means of a post-effective
amendment, financial statements required pursuant to this paragraph (a)(4) and
other information necessary to ensure that all other information in the
prospectus is at least as current as the date of those financial statements.
Notwithstanding the foregoing, with respect to registration statements on Form
F-3, a post-effective amendment need not be filed to include financial
statements and information required by Section 10(a)(3) of the Act or Rule 3-19
of this chapter if such financial statements and information are contained in
periodic reports filed with or furnished to the Commission by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the Form F-3.

The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial BONA FIDE offering thereof.

II-5
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Sunnyvale,
State of California, on this 11th day of June, 1999.

CONDUCTUS, INC.

BY: /S/ CHARLES E. SHALVOY
-----------------------------------------
Charles E. Shalvoy
PRESIDENT AND
CHIEF EXECUTIVE OFFICER

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:

SIGNATURE TITLE DATE
- ------------------------------ --------------------------- -------------------

President, Chief Executive
/s/ CHARLES E. SHALVOY Officer (Principal
- ------------------------------ Executive Officer) and June 11, 1999
Charles E. Shalvoy Director

* Chief Financial Officer
- ------------------------------ (Principal Financial and June 11, 1999
Ronald Wilderink Accounting Officer)

* Chairman of the Board
- ------------------------------ June 11, 1999
John F. Shoch, Ph.d.

* Director
- ------------------------------ June 11, 1999
Martin Cooper

Director
- ------------------------------
Robert M. Janowiak

Director
- ------------------------------
Martin J. Kaplan

<TABLE>
<S> <C> <C> <C>
*By: /s/ CHARLES E. SHALVOY
--------------------------------------
Charles E. Shalvoy
ATTORNEY-IN-FACT
</TABLE>

II-6
<PAGE>
INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NO DESCRIPTION
- ----------------- -----------------------------------------------------------------------------------------------
<C> <S>

<TABLE>
<CAPTION>
EXHIBIT
NO DESCRIPTION
- ----------------- -----------------------------------------------------------------------------------------------
<C> <S>
10.22(10) Loan Modification Agreement dated November 12, 1997, between Registration and Silicon Valley
Bank modifying the Business Loan Agreement dated August 15, 1994.
10.23(10) Loan Modification Agreement dated December 23, 1997, between Registration and Silicon Valley
Bank modifying the Business Loan Agreement dated August 15, 1994.
10.24(11) Business Loan Agreement dated March 8, 1996 between Registrant and Silicon Valley Bank for
working capital credit facility and term loan facility.
10.25(12) Business Loan Agreement dated December 27, 1996 between Registrant and Silicon Valley Bank for
working capital credit facility and term loan facility.
10.26(4) Master Loan and Security Agreement between the Company and Transamerica Business Credit
Corporation, dated June 26, 1998.
10.27(4) Stock Subscription Warrant Agreement between the Company and Transamerica Business Credit
Corporation, dated June 26, 1998.
10.28(13) Silicon Valley Bank Loan Agreement.
10.29(13) Collateral Assignment, Patent Mortgage and Security Agreement between the Company and Silicon
Valley Bank.
10.30(10)+ Asset Purchase Agreement dated July 9, 1997 between Registrant and Bruker Instruments, Inc. for
sale of assets of Registrant's NMR Probe business.
10.31(10) Asset Purchase Agreement dated August 15, 1997 between Registrant and Neocera, Inc. for sale of
Registrant's assets related to its temperature controller business.
10.32(10) Asset Purchase Agreement dated September 3, 1997, between Registrant and Niki Glass Ltd. for
sale of Registrant's assets related to portions of its instruments business.
10.33(14)(15)+ License Agreement between the Company and General Dynamics Information Systems, Inc., dated May
4, 1999.
10.34(14) Cross-License, Supply and Training Agreement between the Company and General Dynamics
Information Systems, Inc., dated May 4, 1999.
23.1 Consent of Independent Accountants.
24.1* Power of Attorney.
27.1* Financial Data Schedule.
</TABLE>

- ------------------------

* Previously filed.

+ Confidential treatment granted or requested as to certain portions of these
exhibits.

(1) Incorporated herein by reference to the Company's Registration Statement on
Form S-1 (Number 33-64020), filed with the SEC on May 15, 1996, as amended.

(2) Incorporated herein by reference to the Company's 1993 Annual Report on Form
10-K.

(3) Incorporated herein by reference to the Company's Registration Statement on
Form 8-K, filed with the SEC on January 22, 1998.

(4) Incorporated herein by reference to the Company's Form 10-Q, filed with the
SEC on November 16, 1998.

(5) Incorporated herein by reference to the Company's Registration Statement on
Form S-8, filed with the SEC on November 26, 1997.

(6) Incorporated herein by reference to the Company's Registration Statement on
Form S-8, filed with the SEC on August 5, 1994.

(7) Incorporated herein by reference to the Company's 1994 Annual Report on Form
10-K.

(8) Incorporated herein by reference to Amendment No. 2 to the Company's
Registration Statement on Form S-1 (Number 333-3815), filed with the SEC on
June 17, 1996.
<PAGE>
(9) Incorporated herein by reference to the Company's Registration Statement on
Form S-1 (Number 333-3815), filed with the SEC on May 10, 1996, as amended.

(10) Incorporated herein by reference to the Company's 1998 Annual Report on
Form 10-K.

(11) Incorporated herein by reference to the Company's 1995 Annual Report on
Form 10-K.

(12) Incorporated herein by reference to the Company's 1996 Annual Report on
Form 10-K.

(13) Incorporated herein by reference to the Company's Form 10-Q, filed with the
SEC on May 14, 1998

(14) Incorporated herein by reference to the Company's Form 10-Q, filed with the
SEC on May 17, 1999.

(15) Incorporated herein by reference to the Company's Form 10-Q/A filed with
the SEC on May 27, 1999.

<PAGE>
EXHIBIT 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in this Registration
Statement on Post effective Amendment No. 1 to Form S-1 on Form S-3 (File No.
333-70373) of our report relating to the financial statements, which includes an
explanatory paragraph related to the substantial doubt about Conductus, Inc.'s
ability to continue as a going concern, dated February 19, 1999, and our report,
dated February 19, 1999, relating to the financial statement schedule, which
appear in Conductus, Inc.'s Annual Report on Form 10-K for the year ended
December 31, 1998. We also consent to the reference to us under the heading
"Experts" in such Registration Statement.

PricewaterhouseCoopers LLP

San Jose, California
June 8, 1999