<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549



                                    FORM 10-Q

(Mark One)

[ X ]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 2000

                                       OR

[    ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

               For the transition period from ________ to ________

                         COMMISSION FILE NUMBER 0-11915

                                 CONDUCTUS, INC.
             (Exact name of registrant as specified in its charter)

              DELAWARE                                     77-0162388
    (State or other jurisdiction of                      (I.R.S. Employer
    incorporation or organization)                     Identification No.)

                                969 W. MAUDE AVE.
                               SUNNYVALE, CA 94086
                    (Address of principal executive offices)

                                 (408) 523-9950
                         (Registrant's telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days: Yes X  No
                                      ---   ---

As of April 30, 2000 there were 11,500,056 shares of the Registrants Common
stock outstanding.



<PAGE>


                                 CONDUCTUS, INC.

                                    FORM 10-Q

                                 March 31, 2000

                                      INDEX
                                      -----

<TABLE>
<CAPTION>
PART I.           FINANCIAL INFORMATION                                                                        PAGE
---------------------------------------
<S>     <C>                                                                                                   <C>
Item 1:  Financial Statements.....................................................................................1
         --------------------
                  Condensed Balance Sheets at March 31, 2000 and December 31, 1999................................1

                  Condensed Statements of Operations for the Three Months Ended March 31, 2000 and 1999...........2

                  Condensed Statements of Cash Flows for the Three Months Ended March 31, 2000 and 1999...........3

                  Notes to Condensed Financial Statements.........................................................4

Item 2 :  Management's Discussion and Analysis of Financial Condition and Results of Operations...................7
          -------------------------------------------------------------------------------------

Item 3:  Quantitative and Qualitative Disclosures About Market Risk..............................................10
         ----------------------------------------------------------

PART II:  OTHER INFORMATION
---------------------------

Item 1:  Legal Proceedings.......................................................................................11
         -----------------

Item 2:  Changes in Securities...................................................................................11
         ---------------------

Item 3:  Default Upon Senior Securities..........................................................................11
         ------------------------------

Item 4:  Submission of Matters to a Vote of Security Holders.....................................................11
         ---------------------------------------------------

Item 5:  Other Information.......................................................................................11
         -----------------

Item 6:  Exhibits and Reports on Form 8-K........................................................................12
         --------------------------------
</TABLE>


<PAGE>

PART I:  FINANCIAL INFORMATION

Item 1:  Financial Statements
         --------------------


                                 CONDUCTUS, INC.
                            CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                 MARCH 31,          DECEMBER 31,
                                                                                   2000                 1999
                                                                             ------------------   ------------------
<S>                                                                          <C>                  <C>
ASSETS                                                                          (Unaudited)
Current assets:
   Cash and cash equivalents.............................................    $    26,718,090      $    11,956,508
   Short-term investments................................................                 --            2,121,274
   Accounts receivable ..................................................            846,404            1,381,724
   Inventories...........................................................          1,580,701            1,266,200
   Prepaid expenses and other current assets.............................             96,053              306,339
                                                                             ------------------   ------------------
     Total current assets................................................         29,241,248           17,032,045
   Property and equipment, net...........................................          1,395,066            1,374,354
   Other assets..........................................................            182,132              190,383
                                                                             ------------------   ------------------
     Total assets........................................................    $    30,818,446      $    18,596,782
                                                                             ==================   ==================

LIABILITIES
Current liabilities:
   Current portion of long-term debt.....................................    $       780,554      $       752,419
   Accounts payable......................................................          1,257,581            1,022,993
   Other accrued liabilities.............................................          1,310,780            1,572,897
                                                                             ------------------   ------------------
     Total current liabilities...........................................          3,348,915            3,348,309
   Long-term debt, net of current portion................................            390,675              595,665
                                                                             ------------------   ------------------
     Total liabilities...................................................          3,739,590            3,943,974
                                                                             ------------------   ------------------

REDEEMABLE PREFERRED STOCK
Preferred stock..........................................................          7,831,440           10,777,675

STOCKHOLDERS' EQUITY
Common stock.............................................................              1,150                  726
Additional paid-in capital...............................................         73,288,016           52,543,129
Accumulated deficit......................................................        (54,041,750)         (48,668,722)
                                                                             ------------------   ------------------
     Total stockholders' equity..........................................         19,247,416            3,875,133
                                                                             ------------------   ------------------
     Total liabilities, redeemable equity, and stockholders' equity......    $    30,818,446      $    18,596,782
                                                                             ==================   ==================
</TABLE>


     The accompanying notes are an integral part of these financial statements.

                                        1


<PAGE>


                                 CONDUCTUS, INC.
                       CONDENSED STATEMENTS OF OPERATIONS




<TABLE>
<CAPTION>
                                                                                   THREE MONTHS ENDED MARCH 31,
                                                                                ------------------------------------
                                                                                     2000                1999
                                                                                ----------------   -----------------
<S>                                                                             <C>                <C>
                                                                                  (Unaudited)        (Unaudited)
Revenues:
  Contract................................................................      $     251,154      $     917,607
  Product sales...........................................................             87,900            396,770
                                                                                ----------------   -----------------
     Total revenues.......................................................            339,054          1,314,377
                                                                                ----------------   -----------------

Costs and expenses:
   Cost of product sales..................................................            701,219            569,667
   Research and development...............................................          1,081,217          1,121,295
   Selling, general and administrative....................................          1,209,677            834,470
                                                                                ----------------   -----------------
     Total costs and expenses.............................................          2,992,113          2,525,432
                                                                                ----------------   -----------------
Loss from operations......................................................         (2,653,059)        (1,211,055)
Interest income...........................................................            358,496             25,744
Other income..............................................................                 --              2,505
Interest expense..........................................................            (63,575)           (96,880)
                                                                                ----------------   -----------------
   Net loss...............................................................         (2,358,138)        (1,279,686)
Dividend accretion and deemed dividend on preferred stock.................         (3,014,889)          (211,680)
                                                                                ----------------   -----------------
Net loss attributable to common stockholders..............................      $  (5,373,027)     $  (1,491,366)
                                                                                ================   =================
Basic and diluted net loss per share......................................      $       (0.56)     $       (0.21)
                                                                                ================   =================
Shares used in per share calculations.....................................          9,535,312          7,144,162
                                                                                ================   =================
</TABLE>


     The accompanying notes are an integral part of these financial statements.


                                        2
<PAGE>


                                 CONDUCTUS, INC.
                       CONDENSED STATEMENTS OF CASH FLOWS



<TABLE>
<CAPTION>
                                                                                        THREE MONTHS ENDED
                                                                                             MARCH 31,
                                                                                 ----------------------------------
                                                                                      2000              1999
                                                                                 ---------------   ----------------
                                                                                  (Unaudited)        (Unaudited)
<S>                                                                              <C>               <C>
Cash flows from operating activities:
   Net loss.................................................................     $  (2,358,138)    $  (1,279,686)
   Adjustments to reconcile net loss to net cash used in
     operating activities:
   Depreciation and amortization............................................           187,468           212,783
   Amortization of discount on long term debt...............................            10,098            11,348
(Increase) decrease in:
   Accounts receivable......................................................           535,320            30,169
   Inventories..............................................................          (314,501)          135,926
   Prepaid expenses and other current assets................................           210,287            28,309
   Other assets.............................................................                --            (3,331)
Increase (decrease) in:
   Accounts payable and other accrued liabilities...........................           263,943          (184,708)
                                                                                 ---------------   ----------------
       Net cash used in operating activities................................        (1,465,523)       (1,049,190)
                                                                                 ---------------   ----------------

Cash flows from investing activities:
   Maturities of short-term investments.....................................         2,142,219           783,287
   Purchases of short-term investments......................................           (20,945)               --
   Acquisition of property and equipment....................................          (199,930)           (8,338)
                                                                                 ---------------   ----------------
       Net cash provided by investing activities............................         1,921,344           774,949
                                                                                 ---------------   ----------------

Cash flows from financing activities:
   Net proceeds from issuance of common stock...............................        14,492,709           (58,263)
   Principal repayments on long-term debt...................................          (186,948)         (225,040)
                                                                                 ---------------   ----------------
       Net cash provided by (used in) financing activities..................        14,305,761          (283,303)
                                                                                 ---------------   ----------------
   Net increase (decrease) in cash and cash equivalents.....................        14,761,582          (557,544)

Cash and cash equivalents at beginning of period............................        11,956,508         1,547,169
                                                                                 ---------------   ----------------
Cash and cash equivalents at end of period..................................     $  26,718,090     $     989,625
                                                                                 ===============   ================
</TABLE>

     The accompanying notes are an integral part of these financial statements.


                                        3

<PAGE>


                                 CONDUCTUS, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS

                                   (Unaudited)



1.        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

UNAUDITED INTERIM FINANCIAL INFORMATION:

          The accompanying unaudited interim financial statements have been
prepared pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
the financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. These condensed financial statements should be read in conjunction
with the audited financial statements and notes thereto included in the
Company's Report on Form 10-K for the year ended December 31, 1999 dated March
30, 2000 and filed with the Securities and Exchange Commission. The unaudited
financial statements as of March 31, 2000 and for the three months ended March
31, 2000 and 1999 include, in the opinion of management, all adjustments,
consisting of normal recurring adjustments, necessary to present fairly the
financial information set forth herein. The results of operations for the
interim periods are not necessarily indicative of the results to be expected for
an entire year. The December 31, 1999 balance sheet was derived from audited
financial statements, but does not include all disclosures required by generally
accepted accounting principles.


RECENT PRONOUNCEMENTS:

          In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This statement establishes new standards of
accounting and reporting for derivative instruments and hedging activities. This
statement requires that all derivatives be recognized at fair value in the
statement of financial position, and that the corresponding gains or losses be
reported either in the statement of operations or as a component of
comprehensive income, depending on the type of hedging relationship that exists.
Statement No. 133 will be effective for fiscal years beginning after June 15,
2000. Conductus does not currently hold derivative instruments or engage in
hedging activities.

          In December 1999, the Securities and Exchange Commission ("SEC")
issued Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in
the Financial Statements," which provides guidance on the recognition,
presentation and disclosure of revenue in the financial statements filed with
the SEC. SAB 101 outlines the basic criteria that must be met to recognize
revenue and provide guidance for disclosures related to the revenue recognition
policies.

          Conductus is currently studying the implications of these statements
and has not yet determined the impact of their adoption.

2.        SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

<TABLE>
<CAPTION>
                                                                                    THREE MONTHS ENDED
                                                                                        MARCH 31,
                                                                          ---------------------------------------
                                                                                 2000                1999
                                                                          ------------------- -------------------
<S>                                                                       <C>                 <C>
Conversion of preferred shares to common stock..........................   $     5,736,124     $            --
Conversion of preferred dividend to common stock                                   516,472                  --
                                                                             ----------------    ----------------
       Total............................................................   $     6,252,596                  --
                                                                             ================    ================

                                                                             ----------------    ----------------
Dividend accretion and deemed dividend on preferred stock...............   $     3,014,889      $      211,680
                                                                             ================    ================
</TABLE>


                                        4

<PAGE>


                     NOTES TO CONDENSED FINANCIAL STATEMENTS

                                   (Unaudited)





3.        BASIC AND DILUTED NET LOSS PER SHARE:

          A reconciliation of the numerator and denominator of the basic and
diluted loss per share is provided as follows:

<TABLE>
<CAPTION>
                                                                                    THREE MONTHS ENDED
                                                                                        MARCH 31,
                                                                          ---------------------------------------
                                                                                 2000                1999
                                                                          ------------------- -------------------
<S>                                                                       <C>                 <C>
Numerator - basic and diluted net loss per share:
     Net loss attributable to common shareholders.......................   $    (5,373,027)    $    (1,491,366)
Denominator - basic and diluted net loss per share:
     Weighted average common shares outstanding.........................         9,535,312           7,144,162
     Basic and diluted net loss per share...............................   $         (0.56)    $         (0.21)
</TABLE>

          In the above computations, common equivalent shares are excluded from
the diluted loss per share as their effect is anti-dilutive. Common equivalent
shares including common stock options, warrants and convertible preferred stock
that could potentially dilute basic earnings per share in the future and that
were not included in the computations of diluted loss per share because of
anti-dilution were approximately 7,741,000 and 1,822,000 for the three months
ended March 31, 2000 and 1999, respectively.


4.       ACCOUNTS RECEIVABLE:

         Accounts receivable, net, consists of the following:

<TABLE>
<CAPTION>
                                                                              MARCH 31,          DECEMBER 31,
                                                                                 2000                1999
                                                                          ------------------- -------------------
<S>                                                                       <C>                 <C>
U.S. government contracts:
   Unbilled
     Recoverable costs and accrued profit on
       progress completed - not billed..................................   $       146,083     $       148,088
   Billed...............................................................           269,240             192,254
Commercial..............................................................             9,000              94,300
License Fee Receivable..................................................           525,000           1,050,000
Allowance for doubtful accounts.........................................          (102,918)           (102,918)
                                                                          ------------------- -------------------
                                                                           $       846,404     $     1,381,724
                                                                          =================== ===================
</TABLE>


                                        5

<PAGE>


                     NOTES TO CONDENSED FINANCIAL STATEMENTS

                                   (Unaudited)




5.       INVENTORIES:

         Inventories consist of the following:

<TABLE>
<CAPTION>
                                                                              MARCH 31,          DECEMBER 31,
                                                                                 2000                1999
                                                                          ------------------- -------------------
<S>                                                                        <C>                 <C>
Raw materials...........................................................   $       837,443     $       573,526
Work in process.........................................................           326,920             401,335
Finished goods..........................................................           416,338             291,339
                                                                          ------------------- -------------------
                                                                           $     1,580,701     $     1,266,200
                                                                          =================== ===================
</TABLE>




6.        STOCKHOLDERS EQUITY:

          On January 18, 2000 the Company entered into an agreement with the
Nevis Fund and Snowdon LP. Under the terms of the agreement, the Company issued
1,000,000 shares of common stock at $13.66875 per share.


                                        6
<PAGE>


Item 2 :  Management's Discussion and Analysis of Financial Condition and
          ---------------------------------------------------------------
          Results of Operations
          ---------------------

          THIS REPORT ON FORM 10-Q CONTAINS FORWARD-LOOKING STATEMENTS THAT
INVOLVE RISKS AND UNCERTAINTIES. CONDUCTUS, INC.'S (THE "COMPANY" OR
"CONDUCTUS") ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THE RESULTS DISCUSSED IN
THE FORWARD-LOOKING STATEMENTS. FACTORS THAT MIGHT CAUSE SUCH A DIFFERENCE
INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED IN "RISK FACTORS" IN PART 1 OF
THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1999.
THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL
STATEMENTS AND NOTES THERETO APPEARING ELSEWHERE IN THIS REPORT ON FORM 10-Q.

OVERVIEW

          We develop, manufacture and market electronic components and systems
based on superconductors for applications in the worldwide telecommunications
markets. As of March 31, 2000, we had accumulated losses of approximately
$54,042,000 and we expect to incur significant additional losses during the
remainder of 2000. We, alone or with collaborative partners, must successfully
develop, manufacture, introduce and market our potential products in order to
achieve profitability. We do not expect to recognize meaningful product sales
until we successfully develop and commercialize superconductive components,
systems and subsystems that address significant market needs.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999

          Total revenues consist primarily of contract revenue and, to a lesser
extent, product sales. Our total revenues decreased by 74% to $339,000 for the
quarter ended March 31, 2000 from $1,314,000 in the comparable period of 1999.
The decrease in total revenues from the prior year is primarily due to decreases
in revenues from government contracts and government product sales, which
resulted from the completion of several contracts and delays in the anticipated
start date of new contracts in 2000.

          Revenue under U.S. government research and development contracts
represented approximately 74% of total revenue for the quarter ended March 31,
2000 compared to 70% in the comparable period of 1999. Contract revenues
decreased by 73% to $251,000 for the quarter ended March 31, 2000 from $917,000
in the comparable period of 1999. This decrease in revenue is primarily
attributable to the completion of contracts related to our core wireless
business in 1999. We have submitted several proposals related to prospective
contracts associated with this core business and we expect to continue to submit
proposals as additional and appropriate programs become available. We believe we
will be able to participate in several of the contracts for which proposals have
been submitted and anticipate that government contract revenues will increase;
however, we cannot assure you that we will receive the level of awards we
anticipate or any awards at all. Additionally, the recognition of revenue and
receipt of payment pursuant to these contracts and awards are subject to
numerous risks.

          Product revenues decreased by 78% to $88,000 from $397,000 in the
comparable period of 1999. The decrease in product revenues was primarily the
result of a reduction in sales of the Company's commercial and government
wireless telecommunications products. We have several field trials in process
for our products that may result in sales; however, there can be no assurance
that the customers will purchase the products.

          Cost of product sales was primarily composed of costs of products
related to our wireless telecommunications products. Cost of product sales
was $701,000 for the period ended March 31, 2000 compared to $570,000 for the
comparable period of 1999. This increase in cost and corresponding decrease
in gross margin is primarily attributable to an increase in expenses relating
to continued development of the Company's manufacturing infrastructure to
meet future demand.

         Research and development includes both externally and internally funded
projects. Research and development expenses were $1,081,000 in the quarter ended
March 31, 2000 compared to $1,121,000 in the comparable period of the prior
year. Research and development, as a percentage of revenue, represented 319% and
85% in the quarters ended March 31, 2000 and 1999, respectively. The decrease in
research and development expense was primarily attributable to a increase in
spending on internally funded projects related to new product development
partially offset by a decrease in spending on externally funded research and
development contracts.


                                       7
<PAGE>

We expect to continue to incur significant research and development expenses on
internally funded programs as we seek to develop additional commercial products,
particularly in the wireless communications area and, as a result, anticipate
moderate increases in research and development expenses compared to the prior
year.

          Selling, general and administrative expenses include costs associated
with marketing, sales, and various administrative activities. Selling, general
and administrative expenses were $1,210,000 and $834,000 in the quarters ended
March 31, 2000 and 1999, respectively. The increase in spending was primarily
due to increases in sales, marketing and administrative headcount compared to
the prior year. We expect sales and marketing expenses to continue to increase
during 2000 to the extent we increase sales of commercial products.

          Interest expense was $64,000 and $97,000 for the periods ended March
31, 2000 and 1999, respectively. Interest charges related primarily to our loan
from a leasing company as well as our bank term loan. The decrease in interest
expense was primarily the result of lower average debt levels during the
comparison periods.

          Interest and other income was $358,000 and $28,000 for the periods
ended March 31, 2000 and 1999, respectively. The increase in interest income was
primarily the result of higher average cash balances in 2000 compared to 1999.

          The net loss recorded for the first quarter of 2000 includes $225,000
in dividends recorded for Series C Preferred Stock as well as a charge of
$2,790,000 for the beneficial conversion feature on the Series C Preferred
Stock, which is being recognized as a deemed dividend to preferred shareholders
over a six month period ending in June 2000.

          As a result of incurring losses, we have not incurred any income tax
liability. We have established a valuation allowance against our deferred tax
assets (principally the tax benefit of our net operating losses) and review this
allowance on a periodic basis. At such time that we believe that it is more
likely than not that the deferred tax asset will be realized, the valuation
allowance will be reduced.

          We do not believe that inflation has had a material effect on our
financial condition or results of operations during the past two fiscal years.
However, we cannot assure you that our business will not be affected by
inflation in the future.

LIQUIDITY AND CAPITAL RESOURCES

          We have financed our operations since inception primarily through:

          - $13,251,000 in net proceeds from our initial public offering of
            common stock in August 1993.

          - $9,892,000 in net proceeds from our follow-on public offering of
            common stock in June 1996,

          - $49,565,000 raised in private placement financings, including net
            proceeds of $14,906,000 raised in December 1999 and $13,670,000 in
            January 2000.

          - $46,136,000 from U.S. government contracts,

          - $1,171,000 in outstanding borrowings under various lease and bank
            loan arrangements, and

          - $4,231,000 in interest income.

          As of March 31, 2000 our aggregate cash and cash equivalents totaled
$26,718,000. Additionally, we have a bank line of credit under which we may
borrow up to a maximum of $2,000,000 based on a limitation of 80% of certain
eligible receivables. As of March 31, 2000, there are no amounts outstanding
under the bank line of credit facility.

                                       8
<PAGE>

          Net cash used in operations was $1,466,000 during the quarter ended
March 31, 2000. Net cash used in operations was primarily the result of the
net loss of $2,358,000 partially offset by the effect of non-cash
depreciation and amortization charges of $198,000 during the quarter and the
reduction of accounts receivable. We anticipate that we will incur
significant additional net losses during 2000 and anticipate that our
accounts receivable and inventories may increase during 2000. As a result, we
anticipate the use of additional cash in operating activities during the
remainder of 2000.

          Net cash provided by investing activities was $1,921,000 during the
quarter ended March 31, 2000. The balance was primarily related to the proceeds
from sales of short-term investments during the quarter partially offset by
investments in additional property and equipment of $200,000. We anticipate
spending approximately $1,550,000 on capital expenditures during the remainder
of 2000.

          Net cash provided by financing activities was $14,306,000 during
the quarter ended March 31, 2000 and was primarily the result of the
financing transaction completed in January 2000.

          All of our credit arrangements contain reporting and financial
covenants, which we are required to satisfy. We cannot assure you that we will
satisfy all such covenants in the future. We cannot assure you that if we
default on any of the covenants, we could obtain a waiver of the default from
the lender. In the event of default on any of these covenants, no further
amounts would be advanced to us under any facility, the entire amounts
outstanding could become due and payable immediately upon default, and those
assets that are collateral could be seized, unless such default is waived by the
lender.

          To date we have received limited revenues from product sales. The
continued development of our products will require a commitment of substantial
funds to conduct further research and development and testing, to establish
commercial-scale manufacturing and to market these products. We expect to use
significant amounts of cash for capital equipment and to support operations
until product revenues increase. Our future capital requirements will depend on
many factors, including:

          - continued progress in our research and development programs,

          - the magnitude of these programs,

          - the time and cost involved in obtaining any required regulatory
            approvals,

          - the costs involved in preparing, filing, prosecuting, maintaining
            and enforcing patents,

          - successful completion of technological, manufacturing and market
            requirements,

          - changes in existing research relationships,

          - the availability of funding under government contracts,

          - our ability to establish collaborative arrangements, and

          - the cost of manufacturing scale-up and the amount and timing of
            future revenues.

          We anticipate that existing sources of liquidity and anticipated
revenue, primarily from government contracts will satisfy our projected working
capital and other cash requirements through fiscal 2000. However, there can be
no assurance that changes in our plans or other events affecting Conductus will
not result in the expenditure of our resources before then.

RECENT ACCOUNTING PRONOUNCEMENTS

         In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This statement establishes new

                                       9
<PAGE>

standards of accounting and reporting for derivative instruments and hedging
activities. This statement requires that all derivatives be recognized at fair
value in the statement of financial position, and that the corresponding gains
or losses be reported either in the statement of operations or as a component of
comprehensive income, depending on the type of hedging relationship that exists.
Statement No. 133 will be effective for fiscal years beginning after June 15,
2000. Conductus does not currently hold derivative instruments or engage in
hedging activities.

          In December 1999, the Securities and Exchange Commission ("SEC")
issued Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in
the Financial Statements," which provides guidance on the recognition,
presentation and disclosure of revenue in the financial statements filed with
the SEC. SAB 101 outlines the basic criteria that must be met to recognize
revenue and provide guidance for disclosures related to the revenue recognition
policies.

          Conductus is currently studying the implications of these statements
and has not yet determined the impact of their adoption.



Item 3:   Quantitative and Qualitative Disclosures About Market Risk
          ----------------------------------------------------------

          Conductus' general policy is to limit the risk of principal loss and
ensure the safety of invested funds by limiting market and credit risk. Our
exposure to financial market risks relates primarily to our exposure to the
impact of changes in interest rates on our fixed income investment portfolio and
long-term debt obligations.

DEBT OBLIGATIONS

          Conductus' outstanding debt consists of term loan obligations that are
primarily based on fixed rates. Therefore, our exposure to changes in interest
rates is limited because any increase or decrease in interest rates would not
significantly increase or decrease interest expense on our debt obligations.

                                       10
<PAGE>



PART II:  OTHER INFORMATION

Item 1:   Legal Proceedings - Not Applicable
          ----------------------------------

Item 2:   Changes in Securities
          ---------------------

          On January 18, 2000, we sold and issued an aggregate of 1,000,000
shares of our Common Stock at a price of $13.66875 per share in a private
placement of our equity. The offering was not underwritten and raised
$13,668,750. Certain institutional and accredited investors purchased shares of
Common Stock in such offering, which sales were exempt from the requirements of
the Securities Act of 1933, as amended (the "Act") pursuant to Rule 506 of
Regulation D under the Act.

Item 3:   Default Upon Senior Securities - Not Applicable
          -----------------------------------------------

Item 4:   Submission of Matters to a Vote of Security Holders - Not Applicable
          --------------------------------------------------------------------

Item 5:   Other Information - Not Applicable.
          -----------------------------------

                                       11
<PAGE>


Item 6:   Exhibits and Reports on Form 8-K
          --------------------------------

(A)  Exhibits

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
     EXHIBIT
       NO.                                                    DESCRIPTION
-----------------------------------------------------------------------------------------------------------------------
<S>              <C>
    10.37         Common Stock Purchase Agreement dated January 18, 2000 between the Company and the Investors named
                  therein.
    10.38         Building Leases Amendment Letter dated January 31, 2000 between the Company and the Mozart
                  Development Company.
    27.1          Financial Data Schedule.
---------------------
</TABLE>

(B) Reports on Form 8-K.

The Company filed no reports on Form 8-K during the quarter for which this
report is filed.

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<PAGE>

SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                       CONDUCTUS, INC.



Dated:  May 12, 2000                   /S/ Ron Wilderink
                                       -----------------------------------------

                                       Ron Wilderink, Vice President of Finance
                                       and Chief Financial Officer

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