UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark One)
[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934
     For the quarterly period ended March 31, 2004

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934
For the transition period from                           to
                               -------------------------    --------------------

                         Commission file number: 0-31641

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

              OHIO                                              31-1210318
(State or other jurisdiction of                              (I.R.S. Employer
 incorporation or organization)                             Identification No.)

                    2839 CHARTER STREET, COLUMBUS, OHIO 43228
          (Address of principal executive offices, including zip code)

                                 (614) 486-0261
              (Registrant's telephone number, including area code)

                                 NOT APPLICABLE
              (Former name, former address and former fiscal year,
                          if changed since last report)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 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 the
filing requirements for at least the past 90 days. YES  X   NO
                                                       ---     ---

         State the number of shares outstanding of each of the registrant's
classes of common equity, as of the latest practicable date: 1,846,006 shares of
Common Stock, without par value, were outstanding at April 30, 2004.
<PAGE>


                                   FORM 10-QSB

                        SUPERCONDUCTIVE COMPONENTS, INC.

                                TABLE OF CONTENTS
                                -----------------

<TABLE>
<CAPTION>

                                                                                PAGE NO.
                                                                                --------
<S>                                                                             <C>
PART I.  FINANCIAL INFORMATION

         Item 1.  Financial Statements.

                      Balance Sheets as of March 31, 2004 (unaudited)
                           and December 31, 2003                                  3 - 4

                      Statements of Operations For the Three Months
                           Ended March 31, 2004 and 2003  (unaudited)                 5

                      Statements of Cash Flows For the Three Months
                           Ended March 31, 2004 and 2003 (unaudited)              6 - 7

                      Notes to Financial Statements (unaudited)                  8 - 11

         Item 2.  Management's Discussion and Analysis of Financial
                      Condition and Results of Operations.                      12 - 20

         Item 3.  Controls and Procedures                                            21

PART II. OTHER INFORMATION

         Item 1.  Legal Proceedings.                                                N/A

         Item 2.  Changes in Securities and Small Business Issuer
                      Purchases of Equity Securities.                                22

         Item 3.  Defaults Upon Senior Securities.                                  N/A

         Item 4.  Submission of Matters to a Vote of Security Holders.              N/A

         Item 5.  Other Information.                                                N/A

         Item 6.  Exhibits and Reports on Form 8-K.                                  22

         Signatures.                                                                 22
</TABLE>


                                       2
<PAGE>


                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                        SUPERCONDUCTIVE COMPONENTS, INC.

                                 BALANCE SHEETS

                                     ASSETS
                                     ------

<TABLE>
<CAPTION>

                                                                         MARCH 31,        DECEMBER 31,
                                                                            2004              2003
                                                                            ----              ----
                                                                        (UNAUDITED)
<S>                                                                     <C>               <C>
CURRENT ASSETS
  Cash                                                                  $   261,570           266,940
  Cash, restricted for equipment                                            299,727                --
  Accounts and notes receivable
Trade, less allowance for doubtful accounts of $19,000 and $25,000          141,052           119,566
    Employees                                                                    85             6,995
    Other                                                                        --               119
 Inventories                                                                519,443           500,533
 Prepaid expenses                                                            13,730            30,198
                                                                        -----------       -----------
       Total current assets                                               1,235,607           924,351
                                                                        -----------       -----------

PROPERTY AND EQUIPMENT,
 AT COST
  Machinery and equipment                                                 2,042,823         2,031,437
  Furniture and fixtures                                                     22,124            22,124
  Leasehold improvements                                                      5,231           347,349
  Construction in progress                                                  179,492                --
                                                                        -----------       -----------
                                                                          2,249,670         2,400,910
  Less accumulated depreciation                                          (1,496,655)       (1,827,076)
                                                                        -----------       -----------
                                                                            753,015           573,834
                                                                        -----------       -----------

OTHER ASSETS
  Deposit                                                                     7,863             7,863
  Intangibles                                                                39,387            40,159
                                                                        -----------       -----------
       Total other assets                                                    47,250            48,022
                                                                        -----------       -----------

TOTAL ASSETS                                                            $ 2,035,872         1,546,207
                                                                        ===========       ===========
</TABLE>

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


                                       3
<PAGE>


                        SUPERCONDUCTIVE COMPONENTS, INC.

                                 BALANCE SHEETS

                      LIABILITIES AND SHAREHOLDERS' DEFICIT
                      -------------------------------------

<TABLE>
<CAPTION>

                                                                                 MARCH 31,       DECEMBER 31,
                                                                                   2004              2003
                                                                                   ----              ----
                                                                               (UNAUDITED)
<S>                                                                            <C>               <C>
CURRENT LIABILITIES
  Capital lease obligation, current portion                                    $    31,309       $    31,994
  Capital lease obligation, shareholder, current portion                            68,428            68,428
  Note payable shareholders, current portion                                       142,000           130,000
  Note payable                                                                     150,000                --
  Accounts payable                                                                 438,590           222,117
  Accounts payable, shareholders                                                     7,920             7,920
  Accrued contract expenses                                                        398,209            86,049
  Accrued personal property taxes                                                   55,263            43,263
  Accrued interest, shareholders                                                    48,491            39,760
  Deferred contract revenue                                                         57,908            50,742
  Accrued expenses                                                                  87,572            72,195
                                                                               -----------       -----------
        Total current liabilities                                                1,485,690           752,468
                                                                               -----------       -----------

CAPITAL LEASE OBLIGATION, NET OF
 CURRENT PORTION                                                                    31,464            31,727
                                                                               -----------       -----------

NOTE PAYABLE SHAREHOLDERS, NET OF CURRENT
 PORTION                                                                           755,625           767,625
                                                                               -----------       -----------

COMMITMENTS AND CONTINGENCIES                                                           --                --
                                                                               -----------       -----------

SHAREHOLDERS' DEFICIT
  Convertible preferred stock, Series B, 10% cumulative,
     nonvoting, no par value, $10 stated value, optional
     redemption at 103%; 25,185 issued and outstanding                             290,887           284,591
  Common stock, no par value, authorized 15,000,000 shares;
      1,846,006 and 1,823,256 shares issued and outstanding, respectively        6,432,716         6,378,216
  Additional paid-in capital                                                        53,597            59,893
  Accumulated deficit                                                           (7,014,107)       (6,728,313)
                                                                               -----------       -----------
                                                                                  (236,907)           (5,613)
                                                                               -----------       -----------

TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT                                    $ 2,035,872       $ 1,546,207
                                                                               ===========       ===========
</TABLE>

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


                                        4
<PAGE>


                        SUPERCONDUCTIVE COMPONENTS, INC.

                            STATEMENTS OF OPERATIONS

                   THREE MONTHS ENDED MARCH 31, 2004 AND 2003
                                   (UNAUDITED)

                                                      2004              2003
                                                      ----              ----

SALES REVENUE                                     $   464,856       $   624,546
CONTRACT RESEARCH REVENUE                              44,921            33,333
                                                  -----------       -----------
                                                      509,777           657,879
                                                  -----------       -----------

COST OF SALES REVENUE                                 410,706           475,328
COST OF CONTRACT RESEARCH                              44,921            33,333
                                                  -----------       -----------
                                                      455,627           508,661
                                                  -----------       -----------

GROSS MARGIN                                           54,150           149,218

GENERAL AND ADMINISTRATIVE EXPENSES                   261,256           179,070

SALES AND PROMOTIONAL EXPENSES                         65,237            48,256
                                                  -----------       -----------

LOSS FROM OPERATIONS                                 (272,343)          (78,108)
                                                  -----------       -----------

OTHER INCOME (EXPENSE)
  Interest income                                         217               593
  Interest expense                                    (10,730)           (6,440)
  Gain (loss) on disposal of equipment                 (2,481)            3,200
  Miscellaneous, net                                     (457)             (457)
                                                  -----------       -----------
                                                      (13,451)           (3,104)
                                                  -----------       -----------

LOSS BEFORE PROVISION FOR INCOME TAX                 (285,794)          (81,212)

INCOME TAX EXPENSE                                         --                --
                                                  -----------       -----------

NET LOSS BEFORE CUMULATIVE EFFECT
 OF A CHANGE IN ACCOUNTING                           (285,794)          (81,212)

CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING                --           (15,886)
                                                  -----------       -----------

NET LOSS                                             (285,794)          (97,098)

DIVIDENDS ON PREFERRED STOCK                           (6,296)           (6,885)
                                                  -----------       -----------

LOSS APPLICABLE TO COMMON SHARES                  $  (292,090)      $  (103,983)
                                                  ===========       ===========

EARNINGS PER SHARE - BASIC AND DILUTED
 (Note 2)

NET LOSS PER COMMON SHARE BEFORE
 CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING
  Basic                                           $     (0.16)      $     (0.04)
                                                  ===========       ===========
  Diluted                                         $     (0.16)      $     (0.04)
                                                  ===========       ===========

NET LOSS PER COMMON SHARE AFTER CUMULATIVE
 EFFECT OF A CHANGE IN ACCOUNTING
  Basic                                           $     (0.16)      $     (0.06)
                                                  ===========       ===========
  Diluted                                         $     (0.16)      $     (0.06)
                                                  ===========       ===========

WEIGHTED AVERAGE SHARES OUTSTANDING
  Basic                                             1,824,924         1,823,256
                                                  ===========       ===========
  Diluted                                           1,824,924         1,823,256
                                                  ===========       ===========

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


                                        5
<PAGE>


                        SUPERCONDUCTIVE COMPONENTS, INC.

                            STATEMENTS OF CASH FLOWS

                   THREE MONTHS ENDED MARCH 31, 2004 AND 2003

                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                          2004            2003
                                                                          ----            ----
<S>                                                                    <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss                                                             $(285,794)      $ (97,098)
                                                                       ---------       ---------
  Adjustments to reconcile net loss to net cash
   provided by (used in) operating activities:
    Depreciation                                                          51,196          58,709
    Amortization and accretion                                               772           1,600
    Cumulative effect of a change in accounting                               --          15,886
    Gain (loss) on disposal of equipment                                   2,481          (3,200)
    Inventory reserve                                                     (2,760)        (19,837)
    Provision for doubtful accounts                                        6,000           3,000
    Changes in operating assets and liabilities:
      (Increase) decrease in assets:
        Accounts receivable                                              (20,457)         16,483
        Inventories                                                      (16,150)         47,999
        Prepaid expenses                                                  16,468          12,620
      Increase (decrease) in liabilities:
        Accounts payable                                                 216,472         (20,562)
        Accrued expenses and deferred revenue                            354,607          93,487
                                                                       ---------       ---------
          Total adjustments                                              608,629         206,185
                                                                       ---------       ---------
              Net cash provided by operating activities                  322,835         109,087
                                                                       ---------       ---------

CASH FLOWS FROM INVESTING ACTIVITIES
  Proceeds on sale of equipment                                            1,302           3,200
  Purchases of property and equipment                                   (225,342)        (38,790)
                                                                       ---------       ---------
              Net cash used in investing activities                     (224,040)        (35,590)
                                                                       ---------       ---------

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from note payable                                             150,000              --
  Proceeds from exercise of common stock options                           3,500              --
  Proceeds from sale of common stock                                      51,000              --
  Principal payments on capital lease obligations                         (8,938)        (10,991)
                                                                       ---------       ---------
              Net cash provided by (used in) financing activities        195,562         (10,991)
                                                                       ---------       ---------
</TABLE>

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


                                        6
<PAGE>


                        SUPERCONDUCTIVE COMPONENTS, INC.

                      STATEMENTS OF CASH FLOWS (CONTINUED)

                   THREE MONTHS ENDED MARCH 31, 2004 AND 2003
                   ------------------------------------------

<TABLE>
<CAPTION>

                                                               2004          2003
                                                               ----          ----
<S>                                                          <C>           <C>
NET INCREASE IN CASH                                          294,357        62,506

CASH - Beginning of period                                    266,940        48,908
                                                             --------      --------

CASH - End of period                                         $561,297      $111,414
                                                             ========      ========

SUPPLEMENTAL DISCLOSURES OF CASH
 FLOW INFORMATION
  Cash paid during the years for:
    Interest, net                                            $  1,310         1,552
    Income taxes                                             $     --            --

SUPPLEMENTAL DISCLOSURES OF NONCASH
 FINANCING ACTIVITIES
  Property and equipment was purchased by capital lease      $  7,990            --
</TABLE>

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


                                        7
<PAGE>


                        SUPERCONDUCTIVE COMPONENTS, INC.

                          NOTES TO FINANCIAL STATEMENTS

NOTE 1.           BUSINESS ORGANIZATION AND PURPOSE

                  Superconductive Components, Inc. (the "Company") is an Ohio
                  corporation that was incorporated in May 1987. The Company was
                  formed to develop, manufacture and sell materials using
                  superconductive principles. Operations have since been
                  expanded to include the manufacture and sale of
                  non-superconductive materials. The Company's domestic and
                  international customer base is primarily in the thin film
                  battery, high temperature superconductor, lens and optical
                  coatings, electronics, functional coatings industries and
                  research.

NOTE 2.           SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

                  The accompanying unaudited financial statements have been
                  prepared in accordance with accounting principles generally
                  accepted in the United States of America for interim financial
                  information and with instructions to Form 10-QSB and Article
                  10 of Regulation S-X. Accordingly they do not include all of
                  the information and footnotes required by accounting
                  principles generally accepted in the United States of America
                  for complete financial statements. In the opinion of
                  management, all adjustments considered necessary for fair
                  presentation of the results of operations for the periods
                  presented have been included. The financial statements should
                  be read in conjunction with the audited financial statements
                  and the notes thereto for the fiscal year ended December 31,
                  2003. Interim results are not necessarily indicative of
                  results for the full year.

                  The preparation of financial statements in conformity with
                  accounting principles generally accepted in the United States
                  of America requires management to make estimates and
                  assumptions that affect the reported amounts of assets and
                  liabilities at the date of the financial statements and the
                  reported amounts of revenues and expenses during the reporting
                  period. Actual results could differ from those estimates.

                  EQUIPMENT PURCHASED WITH GRANT/CONTRACT FUNDING

                  The Company has received a grant of $512,848 from the Ohio
                  Department of Development's Third Frontier Action Fund (TFAF)
                  for the purchase of equipment related to the grant's purpose.
                  Additionally, the Company received $27,500 as part of its
                  contract with the Department of Energy for the purchase of
                  equipment related to the contract's purpose. The Company has
                  elected to record the funds disbursed as a contra asset;
                  therefore, the assets are not reflected in the Company's
                  financial statements. As assets are purchased, the liability
                  initially created when the cash was received is reduced with
                  no revenue being recognized or fixed asset recorded on the
                  balance sheet. At March 31, 2004, the Company has disbursed
                  $240,621. Funds received and not disbursed totaling $281,688
                  are included in accrued contract expenses with $18,039 in
                  accounts payable at March 31, 2004. The grant and contract
                  both provide that as long as the Company performs in
                  compliance with the grant/contract, the Company retains the
                  rights to the equipment. Management states that the Company
                  will be in compliance with the requirements and, therefore,
                  will retain the equipment at the end of the contract/grant.


                                        8
<PAGE>


                        SUPERCONDUCTIVE COMPONENTS, INC.

                          NOTES TO FINANCIAL STATEMENTS

                  STOCK BASED COMPENSATION

                  The Company's pro forma information for the three months ended
                  March 31, 2004 and 2003 in accordance with the provisions of
                  SFAS No. 123, "Accounting for Stock-Based Compensation" is
                  provided below. For purposes of pro forma disclosures,
                  stock-based compensation is amortized to expense on a
                  straight-line basis over the vesting period. The following
                  table compares the 2004 and 2003 results as reported to the
                  results had the Company adopted the expense recognition
                  provisions of SFAS #123.

                                                          March 31,   March 31,
                                                            2004        2003
                  Net loss applicable to common shares:
                  As reported                            $ (292,090)  $(103,983)
                  Stock-based compensation, net of tax       (1,821)       (546)
                                                         ----------   ---------
                  Pro forma net loss under SFAS #123     $ (293,911)  $(104,529)

                  Basic and diluted loss per share:
                  As reported                            $    (0.16)  $   (0.06)
                  Pro forma under SFAS #123              $    (0.16)  $   (0.06)

                  For the periods ended March 31, 2004 and 2003, there was no
                  stock-based employee compensation cost included in the
                  determination of net loss as reported.

NOTE 3.           INVENTORY

                  Inventory is comprised of the following:

                                         MARCH 31,       DECEMBER 31,
                                            2004            2003
                                        ------------     ------------
                                        (unaudited)

                  Raw materials          $ 365,540       $ 361,238
                  Work-in-progress         115,305         101,274
                  Finished goods           180,291         182,474
                  Inventory reserve       (141,693)       (144,453)
                                         ---------       ---------
                                         $ 519,443       $ 500,533
                                         =========       =========


                                        9
<PAGE>


                        SUPERCONDUCTIVE COMPONENTS, INC.

                          NOTES TO FINANCIAL STATEMENTS

NOTE 4.           COMMON STOCK AND STOCK OPTIONS

                  The following options were granted under the 1995 Stock Option
                  Plan during the three months ended March 31, 2004:

                        GRANT DATE          # OPTIONS GRANTED     OPTION PRICE
                        ----------          -----------------     ------------
                     January 21, 2004             50,000              $2.60

NOTE 5.           EARNINGS PER SHARE

                  Basic income (loss) per share is calculated as income
                  available to common stockholders divided by the weighted
                  average of common shares outstanding. Diluted earnings per
                  share is calculated as diluted income (loss) available to
                  common stockholders divided by the diluted weighted average
                  number of common shares. Diluted weighted average number of
                  common shares has been calculated using the treasury stock
                  method for Common Stock equivalents, which includes Common
                  Stock issuable pursuant to stock options and Common Stock
                  warrants. At March 31, 2004 and 2003, all Common Stock options
                  and warrants are anti-dilutive due to the net loss. The
                  following is provided to reconcile the earnings per share
                  calculations:

                                              Three months ended March 31,

                                                 2004              2003
                                                 ----              ----
                  Loss applicable
                   to common shares          $  (292,090)      $  (103,983)
                                             ===========       ===========

                  Weighted average
                   common shares
                   outstanding - basic         1,824,924         1,823,256

                  Effect of dilutions -
                   stock options                      --                --
                                             -----------       -----------

                  Weighted average
                   shares outstanding -
                   diluted                     1,824,924         1,823,256
                                             ===========       ===========


                                       10
<PAGE>


                        SUPERCONDUCTIVE COMPONENTS, INC.

                          NOTES TO FINANCIAL STATEMENTS

NOTE 6.           CAPITAL REQUIREMENTS; RISK OF CURTAILMENT OF BUSINESS
                  OPERATIONS

                  The Company's accumulated deficit since inception was
                  $7,014,107 (unaudited) at March 31, 2004. The losses have been
                  financed primarily from: (i) several private offerings of debt
                  and equity securities; (ii) additional investments and loans
                  by major shareholders; and (iii) a private offering of common
                  stock and warrants to purchase common stock in October 2000.
                  The Company cannot assure you, however, that it will be able
                  to raise additional capital in the future to fund its
                  operations. The Company expects to continue to incur
                  significant operating and net losses in 2004, and it is
                  possible that we will never be able to sustain or develop the
                  revenue levels necessary to attain profitability.

                  As of March 31, 2004, cash on-hand was $561,297 with $299,727
                  restricted for equipment purchases in accordance with the TFAF
                  grant. Cash available for operations at March 31, 2004 was
                  $261,570. Management believes, based on currently available
                  financing and forecasted sales and expenses, that funding will
                  be adequate to sustain operations through December 2004.
                  During the first quarter of 2004 the Company began to raise
                  additional funds through further offerings of debt and equity.
                  The Company received additional debt financing of $150,000. In
                  March 2004 the Company received $512,848 from the State of
                  Ohio's Third Frontier Action Fund to begin purchasing capital
                  equipment required to commercialize the Company's Lithium Thin
                  Film Battery sputtering target manufacturing process. At March
                  31, 2004, $281,688 of these funds have not been expended and
                  are included on the balance sheet as accrued contract
                  expenses. Also, in March 2004 the Company was approved by the
                  Ohio Department of Development's Industrial Technology
                  Enterprise Advisory Council Committee as an eligible entity
                  for the Technology Investment Tax Credit program. The program
                  is intended to benefit small Ohio-based research and
                  development and technology-oriented companies. This approval
                  permits individuals and businesses to receive state tax
                  incentives for up to twenty-five percent of their qualified
                  investments in the Company through September 2004. The Company
                  received $51,000 in the first quarter of 2004 and $620,000 in
                  the second quarter through May 13, 2004 in qualified
                  investments and plans to raise additional equity capital in
                  the second quarter 2004. These equity investments allow the
                  promissory notes ($729,770) issued in 2003 to be automatically
                  converted to common stock at $2.40 per share.

                  The Company has incurred substantial operating losses through
                  March 31, 2004, and numerous factors make it necessary for the
                  Company to seek additional capital. In order to support the
                  initiatives envisioned in its business plan, it will need to
                  raise additional funds through the sale of assets, public or
                  private financing, collaborative relationships or other
                  arrangements. Its ability to raise additional financing
                  depends on many factors beyond its control, including the
                  state of capital markets, the market price of its common stock
                  and the development or prospects for development of
                  competitive products by others. Because the common stock is
                  not listed on a major stock exchange, many investors may not
                  be willing or allowed to purchase it or may demand steep
                  discounts. The necessary additional financing may not be
                  available or may be available only on terms that would result
                  in further dilution to the current owners of the common stock.


                                       11
<PAGE>


ITEM 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATIONS

         The following discussion should be read in conjunction with the
         Financial Statements and Notes contained herein.

         The following section contains forward-looking statements within the
         meaning of the Private Securities Litigation Reform Act of 1995. Any
         statements that express, or involve discussions as to expectations,
         beliefs, plans, objectives, assumptions or future events or performance
         (often, but not always, through the use of words or phrases such as
         will likely result, are expected to, will continue, is anticipated,
         estimated, projection, outlook) are not statements of historical fact
         and may be forward looking. Forward-looking statements involve
         estimates, assumptions and uncertainties that could cause actual
         results to differ materially from those expressed in the
         forward-looking statements. These forward-looking statements are based
         largely on the Company's expectations and are subject to a number of
         risks and uncertainties, including but not limited to economic,
         competitive, regulatory, growth strategies, available financing and
         other factors discussed elsewhere in this report and in other documents
         filed by the Company with the Securities and Exchange Commission. Many
         of these factors are beyond the Company's control. Actual results could
         differ materially from the forward-looking statements made. In light of
         these risks and uncertainties, there can be no assurance that the
         results anticipated in the forward-looking information contained in
         this report will, in fact, occur.

         Any forward-looking statement speaks only as of the date on which such
         statement is made, and the Company undertakes no obligation to update
         any forward-looking statement or statements to reflect events or
         circumstances after the date on which such statements are made or
         reflect the occurrence of unanticipated events, unless necessary to
         prevent such statements from becoming misleading. New factors emerge
         from time to time and it is not possible for management to predict all
         factors, nor can it assess the impact of each such factor on the
         business or the extent to which any factor, or combination of factors,
         may cause actual results to differ materially from those contained in
         any forward-looking statements.

         RESULTS OF OPERATIONS

         CRITICAL ACCOUNTING POLICIES

         The preparation of financial statements and related disclosures in
         conformity with accounting principles generally accepted in the United
         States of America requires management to make judgments, assumptions
         and estimates that affect the amounts reported in the Financial
         Statements and accompanying notes. Note 2 to the Financial Statements
         in the Annual Report on Form 10-KSB for the year ended December 31,
         2003 describes the significant accounting policies and methods used in
         the preparation of the Financial Statements. Estimates are used for,
         but not limited to, accounting for doubtful accounts, inventory
         allowances, property and equipment depreciable lives, patents and
         licenses useful lives, asset retirement obligations and assessing
         changes in which impairment of certain long-lived assets may occur.
         Actual results could differ from these estimates. The following
         critical accounting policies are impacted significantly by judgments,
         assumptions and estimates used in the preparation of the Financial
         Statements. The allowance for doubtful accounts is based on our
         assessment of the collectibility of specific customer accounts and the
         aging of the accounts receivable.


                                       12
<PAGE>


ITEM 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATIONS (CONTINUED)

         If there is a deterioration of a major customer's credit worthiness or
         actual defaults are higher than our historical experience, our
         estimates of the recoverability of amounts due us could be adversely
         affected. Inventory purchases and commitments are based upon future
         demand forecasts. If there is a sudden and significant decrease in
         demand for our products or there is a higher risk of inventory
         obsolescence because of rapidly changing technology and customer
         requirements, we may be required to increase our inventory allowances
         and our gross margin could be adversely affected. Depreciable and
         useful lives estimated for property and equipment, licenses and patents
         are based on initial expectations of the period of time these assets
         and intangibles will provide benefit to our Company. Cost estimates for
         removal and repair of the current leased building or a change in timing
         of the relocation could impact the estimate. Changes in circumstances
         related to a change in our business, change in technology or other
         factors could result in these assets becoming impaired, which could
         adversely affect the value of these assets.

         To date, the Company has received revenue predominantly from commercial
         sales, government research contracts and non-government research
         contracts. The Company has incurred cumulative losses of $7,014,107
         from inception to March 31, 2004.

         THREE MONTHS ENDED MARCH 31, 2004 (UNAUDITED) COMPARED TO THREE MONTHS
         ENDED MARCH 31, 2003 (UNAUDITED):

         REVENUES

         Revenues for the three months ended March 31, 2004 were $509,777
         compared to $657,879, a decrease of $148,102 or 22.5% from the three
         months ended March 31, 2003.

         Product revenues decreased to $464,856 in 2004 from $624,546 in 2003 or
         a decrease of 25.6%. The decline in revenues for the first three months
         is due to lower product shipments as a result of the weak U.S. economy
         and the relocation of the Company's facilities. The Company intends to
         intensify its marketing efforts by increasing the number of
         manufacturers representatives representing the Company. Also, a sales
         manager was added to the organization at January 1, 2004.

         Contract research revenues were $44,921 in 2004 as compared to $33,333
         in 2003. The increase was due to a Phase II Small Business Innovation
         Research grant for $523,612 from the Department of Energy that was
         awarded in 2003. This award was to develop an advanced method to
         manufacture continuous reacted lengths of High Tc Superconductor:
         Bismuth Strontium Calcium Copper Oxide - 2212 Wire. Revenues of $43,267
         from this grant are included in first quarter 2004 revenues.

         The Company became a member of a team led by Oxford Instruments
         Superconducting Technology, which was awarded a grant from the
         Department of Energy Superconductivity Partnership Initiative Program.
         Revenues of $1,654 were generated in the first quarter 2004.


                                       13
<PAGE>


ITEM 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATIONS (CONTINUED)

         GROSS MARGIN

         Total gross margin in 2004 was $54,150 or 10.6% of total revenue
         compared to $149,218 or 22.7% in 2003. Gross margin on product revenue
         was 11.6% in 2004 versus 23.9% in 2003. The decrease was due to lower
         sales as well as the product mix. Gross margin on contract research
         revenue was 0.0% for 2004 and 2003.

         SELLING EXPENSE

         Selling expense in 2004 increased to $65,237 from $48,256 in 2003, an
         increase of 35.2%. The increase was due to the addition of a sales
         manager at January 1, 2004. This was partially offset by a reduction in
         commission costs and decreased trade show attendance.

         GENERAL AND ADMINISTRATIVE EXPENSE

         General and administrative expense in 2004 increased to $261,256 from
         $179,070 in 2003, or 45.9%. The increase was due to the relocation of
         the Company's facility in the first quarter of 2004. $70,390 was
         expensed for this purpose. Also, rent expense increased from $16,649 to
         $33,076, or 98.7% due to the relocation.

         RESEARCH AND DEVELOPMENT EXPENSE

         Internal research and development costs are expensed as incurred.
         Research and development costs for 2004 were $11,648 compared to
         $17,028 in 2003. Internal research and development costs decreased due
         to a reduction in staff.

         INTEREST EXPENSE

         Interest expense was $10,730 for the three months ended March 31, 2004
         compared to $6,440 for the three months ended March 31, 2003. Interest
         expense to related parties was $8,730 and $4,294 for the three months
         ended March 31, 2004, and March 31, 2003, respectively. The increase
         was due to the accrued interest incurred as a result of the financing
         completed in June and July of 2003.

         LOSS APPLICABLE TO COMMON SHARES

         BASIC

         Net loss per common share based on the loss applicable to common shares
         for the three months ended March 31, 2004 and 2003 was $0.16 and $0.06,
         respectively. The loss applicable to common shares includes the net
         loss from operations, Series B preferred stock dividends and the
         cumulative effect of the change in accounting. The net loss per common
         share from operations was $0.16 and $0.04 for the three months ended
         March 31, 2004 and 2003, respectively. The difference between the net
         loss from operations and the loss applicable to common shares of $0.00
         and $0.02 for the three months ended March 31, 2004 and 2003,
         respectively, was a result of the preferred position that the preferred
         shareholders have in comparison to the common shareholders and the
         cumulative effect of the change in accounting.


                                       14
<PAGE>


ITEM 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATIONS (CONTINUED)

         Dividends on the Series B preferred stock accrue at 10% annually on the
         outstanding shares. Dividends on the Series B preferred stock totaled
         $6,296 for the three months ended March 31, 2004 and $6,885 for the
         three months ended March 31, 2003.

         Basic loss per common share for the three months ended March 31, 2004,
         was $0.16 per share with 1,824,924 weighted average common shares
         outstanding as compared to $0.04 per share and 1,823,256 weighted
         average common shares outstanding for the three months ended March 31,
         2003.

         DILUTED

         Diluted loss per common share for the three months ended March 31, 2004
         was $0.16 per share with 1,824,924 average common shares outstanding as
         compared to $0.04 per share and 1,823,256 weighted average common
         shares outstanding for the three months ended March 31, 2003. For the
         three months ended March 31, 2004 and 2003, all outstanding common
         stock equivalents are anti-dilutive due to the net loss.

         LIQUIDITY AND WORKING CAPITAL

         At March 31, 2004, working capital was $(250,083) compared to $235,173
         at March 31, 2003. The decrease was due to a reduction in inventory and
         accounts receivable. Also, an increase in notes payable and accounts
         payable as a result of the facility move reduced working capital. The
         Company provided cash from operations of approximately $323,000 and
         $109,000 for the three months ended March 31, 2004 and March 31, 2003,
         respectively, with the TFAF grant accounting for $282,000 of the March
         31, 2004 cash from operations. Significant non-cash items including
         depreciation, inventory reserve on excess and obsolete inventory,
         allowance for doubtful accounts and the cumulative effect of the change
         in accounting were approximately $55,000 and $59,000, respectively, for
         the three months ended March 31, 2004 and 2003. Accounts payable and
         accrued expenses increased in excess of increases in accounts
         receivable, inventory and prepaids by approximately $551,000 for the
         three months ended March 31, 2004. Accounts payable and accrued
         expenses increased in excess of decreases in accounts receivable,
         inventory and prepaids by approximately $150,000 for the three months
         ended March 31, 2003, as a result of timing of receipt of inventory
         versus required scheduled payments on this inventory and increased
         prepaid expenses.

         For investing activities, the Company used cash of approximately
         $224,000 and $36,000, for the three months ended March 31, 2004 and
         March 31, 2003, respectively. The amounts invested were used to
         purchase machinery and equipment for increased production capacity, new
         product lines and for leasehold improvements for the new facility.
         Proceeds on sale of equipment totaled $1,302 and $3,200 for the three
         months ended March 31, 2004 and March 31, 2003, respectively.

         For financing activity for the three months ended March 31, 2004, the
         Company provided cash of approximately $196,000. Cash payments to third
         parties for capital lease obligations approximated $9,000; proceeds
         from notes payable totaled $150,000. Proceeds from sale of common stock
         was $51,000 and proceeds from the exercise of stock options totaled
         $3,500. The Company incurred a new lease of $7,990 for a telephone
         system for the new facility.


                                       15

<PAGE>

ITEM 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATIONS (CONTINUED)

         For financing activity for the three months ended March 31, 2003, the
         Company utilized cash of approximately $11,000. Cash payments to third
         parties for capital lease obligations approximated $11,000.

         While certain major shareholders of the Company have advanced funds in
         the form of subordinated debt, accounts payable and guaranteeing bank
         debt in the past, there is no commitment by these individuals to
         continue funding the Company or guaranteeing bank debt in the future.
         The Company will continue to seek new financing or equity financing
         arrangements. However, the Company cannot be certain that it will be
         successful in efforts to raise additional new funds.

         The Company completed two private financing transactions in 2003
         including (i) the issuance of convertible promissory notes in the
         aggregate amount of $600,000 and 122,000 warrants to purchase shares of
         common stock in exchange for $600,000 in cash and (ii) the redemption
         of the Company's entire $129,770 obligation on its Series A redeemable
         convertible preferred stock in exchange for convertible promissory
         notes in the aggregate amount of $129,770, which represented the face
         amount of the preferred stock plus accrued and unpaid dividends and
         interest, and 26,302 warrants to purchase shares of common stock. Four
         present shareholders invested the $600,000 of new money in the Company.
         $500,000 in cash and the redemption of the Series A redeemable
         preferred stock was received and recorded on June 30, 2003. $100,000 in
         cash was received and recorded on July 1, 2003.

         The principal and interest on the $729,770 of new convertible
         promissory notes are payable June 30, 2006. Per the notes if the
         Company completes an equity financing for at least $500,000 prior to
         June 30, 2004, the notes shall automatically convert to common stock at
         the same per share price as the equity financing and thereafter the
         notes shall convert to common stock at the option of the holders at
         $2.00 per share. The Company received $51,000 in equity financing in
         the first quarter of 2004 and $620,000 in the second quarter through
         May 13, 2004 and plans to raise additional equity financing in the
         second quarter of 2004. These equity investments allow the promissory
         notes to be automatically converted to common stock at $2.40 per share.

         RISK FACTORS

         The Company desires to take advantage of the "safe harbor" provisions
         of the Private Securities Litigation Reform Act of 1995. The following
         factors have affected or could affect the Company's actual results and
         could cause such results to differ materially from those expressed in
         any forward-looking statements made by the Company. Investors should
         consider carefully the following risks and speculative factors inherent
         in and affecting the business of the Company and an investment in the
         Company's common stock.

         WE HAVE EXPERIENCED SIGNIFICANT OPERATING LOSSES IN THE PAST AND MAY
         CONTINUE TO DO SO IN THE FUTURE.

         We commenced business in May of 1987. Our accumulated deficit since
         inception was $7,014,107 (unaudited) at March 31, 2004.

         We have financed the losses primarily from: (i) several private
         offerings of debt and equity securities; (ii) additional investments
         and loans by our major shareholders; and (iii) a private offering of
         common stock and warrants to purchase common stock in October 2000. We
         cannot assure you, however, that we will be able to raise additional
         capital in the future to fund our operations. We expect to continue to
         incur significant operating and net losses in 2004, and it is possible
         that we will never be able to sustain or develop the revenue levels
         necessary to attain profitability.


                                       16
<PAGE>


         IF WE ARE UNABLE TO OBTAIN ADDITIONAL FUNDS WE MAY HAVE TO
         SIGNIFICANTLY CURTAIL THE SCOPE OF OUR OPERATIONS OR LIQUIDATE
         THE COMPANY.

         As of March 31, 2004, our cash on-hand was $561,297, with $299,727
         restricted for equipment purchased by the TFAF grant. During the first
         quarter of 2004, the Company provided $323,000 in cash to fund our
         operations, with the TFAF grant accounting for $282,000 of the March
         31, 2004 cash from operations. We believe, based on currently available
         financing and forecasted sales and expenses, that our funding will be
         adequate to sustain operations through December 2004. During the first
         quarter of 2004 we began to raise additional funds through further
         offerings of debt and equity. The Company received additional debt
         financing of $150,000. In March 2004 the Company received $512,848 from
         the State of Ohio's Third Frontier Action Fund to begin purchasing
         capital equipment required to commercialize the Company's Lithium Thin
         Film Battery sputtering target manufacturing process. Also, in March
         2004 the Company was approved by the Ohio Department of Development's
         Industrial Technology Enterprise Advisory Council Committee as an
         eligible entity for the Technology Investment Tax Credit program. The
         program is intended to benefit small Ohio-based research and
         development and technology-oriented companies. This approval permits
         individuals and businesses to receive state tax incentives for up to
         twenty-five percent of their qualified investments in the Company
         through September 2004. The Company received $51,000 in the first
         quarter of 2004 and $620,000 in the second quarter through May 13, 2004
         in qualified investments and plans to raise additional equity capital
         in the second quarter 2004. These equity investments allow the
         promissory notes ($729,770) issued in 2003 to be automatically
         converted to common stock at $2.40 per share.

         WE HAVE LIMITED MARKETING AND SALES CAPABILITIES.

         To successfully market our products, we must continue to develop
         appropriate marketing, sales, technical, customer service and
         distribution capabilities, or enter into agreements with third parties
         to provide these services. Our failure to develop these capabilities or
         obtain third-party agreements could adversely affect us.

         OUR SUCCESS DEPENDS ON OUR ABILITY TO RETAIN KEY MANAGEMENT PERSONNEL.

         Our success depends in large part on our ability to attract and retain
         highly qualified management, administrative, manufacturing, sales, and
         research and development personnel. Due to the specialized nature of
         our business, it may be difficult to locate and hire qualified
         personnel. The loss of services of one of our executive officers or
         other key personnel, or our failure to attract and retain other
         executive officers or key personnel, could have a material adverse
         effect on our business, operating results and financial condition.
         Although the Company has been successful in planning for and retaining
         highly capable and qualified successor management in the past, there
         can be no assurance that it will be able to do so in the future.

         WE NEED ADDITIONAL CAPITAL, WHICH MAY REDUCE THE VALUE OF OUR COMMON
         STOCK.

         The Company has incurred substantial operating losses through March 31,
         2004, and numerous factors make it necessary for the Company to seek
         additional capital. In order to support the initiatives envisioned in
         our business plan, we will need to raise additional funds through the
         sale of assets, public or private financing, collaborative
         relationships or other arrangements. Our ability to raise additional
         financing depends on many factors beyond our control, including the
         state of capital markets, the market price of our common stock and the
         development or prospects for development of competitive products by
         others. Because our common stock is not listed on a major stock
         exchange, many investors may not be willing or allowed to purchase it
         or may demand steep discounts. The necessary additional financing may
         not be available to us or may be available only on terms that would
         result in further dilution to the current owners of our common stock.


                                       17
<PAGE>


         OUR COMPETITORS HAVE FAR GREATER FINANCIAL AND OTHER RESOURCES THAN WE
         HAVE.

         The market for Thin Film Materials is a substantial market with
         significant competition in both ceramic and metal materials. While we
         believe that our products enjoy certain competitive advantages in
         design, function, quality, and availability, considerable competition
         exists from well-established firms such as a division of Praxair's
         Surface Science Technology group as well as MCR, Johnson Matthey, Pure
         Tech and CERAC, all of which have more resources than we have.

         In addition, a significant portion of our business is in the very
         competitive market for sputtering targets made of ceramics, metals and
         alloys. We face substantial competition in this area from companies
         with far greater financial and other resources than we have. We cannot
         assure you that developments by others will not render our products or
         technologies obsolete or less competitive.

         GOVERNMENT CONTRACTS MAY BE TERMINATED OR SUSPENDED FOR NONCOMPLIANCE
         OR OTHER EVENTS BEYOND OUR CONTROL.

         The government may cancel virtually all of our government contracts
         which are terminable at the option of the government. While we have
         complied with applicable government rules and regulations and contract
         provisions in the past, we could fail to comply in the future.
         Noncompliance with government procurement regulations or contract
         provisions could result in the termination of government contracts. The
         termination of our significant government contracts or the adoption of
         new or modified procurement regulations or practices could adversely
         affect us.

         Inventions conceived or actually reduced to practice under a government
         contract generally result in the government obtaining a royalty-free,
         non-exclusive license to practice the invention. Similarly,
         technologies developed in whole or in part at government expense
         generally result in the government obtaining unlimited rights to use,
         duplicate or disclose technical data produced under the contract. These
         licenses and rights may result in a loss of potential revenues or the
         disclosure of our proprietary information, either of which could
         adversely affect us.

         OUR REVENUES DEPEND ON PATENTS AND PROPRIETARY RIGHTS THAT MAY NOT BE
         ENFORCEABLE.

         We rely on a combination of patent and trademark law, license
         agreements, internal procedures and nondisclosure agreements to protect
         our intellectual property. These may be invalidated, circumvented or
         challenged. In addition, the laws of some foreign countries in which
         our products may be produced or sold do not protect our intellectual
         property rights to the same extent as the laws of the United States.
         Our failure to protect our proprietary information could adversely
         affect us.

         RIGHTS WE HAVE TO PATENTS AND PENDING PATENT APPLICATIONS MAY BE
         CHALLENGED.

         We have received from the United States Patent and Trademark Office a
         patent for Fine-Particle Bi-Sr-Ca-Cu-O Having High Phase Purity made by
         a Chemical Precipitation and Low-Pressure Calcination method, and have
         also received a patent for a new process to join two individual
         strongly linked super-conductors utilizing a melt processing technique.
         In addition, in the future we may submit additional patent applications
         covering various applications. The patent application we filed and
         patent applications that we may file in the future may not result in
         patents being issued, and any patents issued may not afford meaningful
         protection against competitors with similar technology, and may be
         challenged by third parties. Because U.S. patent applications are
         maintained in secret until patents are issued, and because publications
         of discoveries in the scientific or patent literature tend to lag
         behind actual discoveries by several months, we may not be the first
         creator of inventions covered by issued patents or pending patent
         applications or the first to file patent applications for such
         inventions. Moreover, other parties may independently develop similar
         technologies, duplicate our technologies or, if patents are issued to
         us or rights licensed by us, design around the patented aspects of any
         technologies we developed or licensed. We may have to participate in
         interference proceedings declared by the U.S. Patent and Trademark
         Office to determine the priority of inventions, which could result in
         substantial costs. Litigation may also be necessary to enforce any
         patents held by or issued to us or to determine the scope and validity
         of others' proprietary rights, which could result in substantial costs.


                                       18
<PAGE>


         THE RAPID RATE OF INVENTIONS AND DISCOVERIES IN THE SUPERCONDUCTIVITY
         FIELD HAS RAISED MANY UNRESOLVED PATENT ISSUES THAT MAY NEGATIVELY
         AFFECT OUR BUSINESS.

         The claims in granted patents often overlap and there are disputes
         involving rights to inventions claimed in pending patent applications.
         As a result, the patent situation in the high temperature
         superconductor field is unusually complex. It is possible that there
         will be patents held by third parties relating to our products or
         technology. We may need to acquire licenses to design around or
         successfully contest the validity or enforceability of those patents.
         It is also possible that because of the number and scope of patents
         pending or issued, we may be required to obtain multiple licenses in
         order to use a single material. If we are required to obtain multiple
         licenses, our costs will increase. Furthermore, licenses may not be
         available on commercially reasonable terms or at all. The likelihood of
         successfully contesting the validity or enforceability of those patents
         is also uncertain; and, in any event, we could incur substantial costs
         in defending the validity or scope of our patents or challenging the
         patents of others.

         THE RAPID TECHNOLOGICAL CHANGES OF OUR INDUSTRY MAY ADVERSELY AFFECT US
         IF WE DO NOT KEEP PACE WITH ADVANCING TECHNOLOGY.

         The Thin Film Market is characterized by rapidly advancing technology.
         Our success depends on our ability to keep pace with advancing
         technology, processes and industry standards. To date, we have focused
         our development efforts on powders and targets. We intend to continue
         to develop and integrate advances in the thin film coatings industry.
         However, our development efforts may be rendered obsolete by research
         efforts and technological advances made by others, and materials other
         than those we currently use may prove more advantageous.

         DEVELOPMENT STAGE OF THE COMPANY'S PRODUCTS AND UNCERTAINTY REGARDING
         DEVELOPMENT OF MARKETS

         Some of the Company's products are in the early stages of
         commercialization and the Company believes that it will be several
         years before products will have significant commercial end-use
         applications, and that significant additional development work may be
         necessary to improve the commercial feasibility and acceptance of its
         products. There can be no assurance that the Company will be able to
         commercialize any of the products currently under development.

         To date, there has been no widespread commercial use of High
         Temperature Superconductive (HTS) products. Additionally, the market
         for the Thin Film Battery materials is still in its nascent stages.

         THE MARKET FOR OUR COMMON STOCK IS LIMITED, AND AS SUCH OUR
         SHAREHOLDERS MAY HAVE DIFFICULTY RESELLING THEIR SHARES WHEN DESIRED OR
         AT ATTRACTIVE MARKET PRICES.

         Our stock price and our listing may make it more difficult for our
         shareholders to resell shares when desired or at attractive prices.
         From April 2000 until September 2001, our common stock traded on the
         National Quotation Bureau (the "pink sheets"). In September 2001, our
         stock once again began trading on The Over the Counter Bulletin Board
         ("OTC Bulletin Board"). Nevertheless, our common stock has continued to
         trade in low volumes and at low prices. Some investors view low-priced
         stocks as unduly speculative and therefore not appropriate candidates
         for investment. Many institutional investors have internal policies
         prohibiting the purchase or maintenance of positions in low-priced
         stocks. This has the effect of limiting the pool of potential
         purchasers of our common stock at present price levels. Shareholders
         may find greater percentage spreads between bid and asked prices, and
         more difficulty in completing transactions and higher transaction costs
         when buying or selling our common stock than they would if our stock
         were listed on a major stock exchange, such as The New York Stock
         Exchange or The NASDAQ National Market.


                                       19
<PAGE>


         Additionally, the market prices for securities of superconductive
         material companies have been volatile throughout the Company's
         existence. Most of the companies are traded over the counter through
         the National Quotation Bureau or National Association of Securities
         Dealers Automated Quotation System. Historical trading characteristics
         for public companies in this industry include limited market support,
         low trading volume, and wide spreads (on a percentage basis) between
         the bid and ask prices. Announcements regarding product developments,
         technological advances, significant customer orders, and financial
         results significantly influence per share prices.

         OUR COMMON STOCK IS SUBJECT TO THE SECURITIES AND EXCHANGE COMMISSION'S
         "PENNY STOCK" REGULATIONS, WHICH LIMITS THE LIQUIDITY OF COMMON STOCK
         HELD BY OUR SHAREHOLDERS.

         Based on its trading price, our common stock is considered a "penny
         stock" for purposes of federal securities laws, and therefore is
         subject to regulations, which affect the ability of broker-dealers to
         sell the Company's securities. Broker-dealers who recommend a "penny
         stock" to persons (other than established customers and accredited
         investors) must make a special written suitability determination and
         receive the purchaser's written agreement to a transaction prior to
         sale.

         As long as the penny stock regulations apply to our common stock, it
         may be difficult to trade such stock because compliance with the
         regulations can delay and/or preclude certain trading transactions.
         Broker-dealers may be discouraged from effecting transactions in our
         common stock because of the sales practice and disclosure requirements
         for penny stock. This could adversely effect the liquidity and/or price
         of our common stock, and impede the sale of our common stock in the
         secondary market.

         OUR ARTICLES OF INCORPORATION AUTHORIZE US TO ISSUE ADDITIONAL SHARES
         OF STOCK.

         We are authorized to issue up to 15,000,000 shares of common stock,
         which may be issued by our board of directors for such consideration,
         as they may consider sufficient without seeking shareholders approval.
         The issuance of additional shares of common stock in the future will
         reduce the proportionate ownership and voting power of current
         shareholders.

         Our Articles of Incorporation also authorize us to issue up to 260,000
         shares of preferred stock. The issuance of preferred stock in the
         future could create additional securities which would have dividend and
         liquidation preferences prior in right to the outstanding shares of
         common stock. These provisions could also impede a non-negotiated
         change in control.

         WE HAVE NOT PAID DIVIDENDS ON OUR COMMON STOCK IN THE PAST AND DO NOT
         EXPECT TO DO SO IN THE FUTURE.

         We cannot assure you that our operations will result in sufficient
         revenues to enable us to operate at profitable levels or to generate
         positive cash flow sufficient to pay dividends. We have never paid
         dividends on our common shares in the past and do not expect to do so
         in the foreseeable future.

         WE MAY HAVE DIFFICULTY RAISING ADDITIONAL CAPITAL, WHICH COULD DEPRIVE
         US OF NECESSARY RESOURCES.

         We require substantial capital resources to maintain existing
         operations.

         OFF BALANCE SHEET ARRANGEMENTS

         The Company has no off balance sheet arrangements including special
         purpose entities.


                                       20
<PAGE>


ITEM 3.           CONTROLS AND PROCEDURES

         As of the end of the period covered by this report, the Company's Chief
         Executive Officer and Chief Financial Officer evaluated the
         effectiveness of the design and operation of the Company's disclosure
         controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
         promulgated under the Securities Exchange Act of 1934). Based upon this
         evaluation, the Chief Executive Officer and Chief Financial Officer
         concluded that the disclosure controls and procedures were effective as
         of the period covered by this report in ensuring that information
         required to be disclosed by the Company in the reports that it files or
         submits under the Securities and Exchange Act of 1934, as amended, is
         recorded, processed, summarized and reported within the time period
         specified by the Securities and Exchange Commission's rules and forms.

         Additionally, there were no changes in the Company's internal controls
         that could materially affect the Company's disclosure controls and
         procedures subsequent to the date of their evaluation, nor were there
         any material deficiencies or material weaknesses in the Company's
         internal controls. As a result, no corrective actions were required or
         undertaken.


                                       21
<PAGE>


                           PART II. OTHER INFORMATION

ITEM 2.  CHANGES IN SECURITIES AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY
         SECURITIES.

         SALES OF UNREGISTERED SECURITIES: On March 29, 2004, the Company, in a
         private placement to an accredited investor sold 21,250 shares of its
         common stock without par value at a purchase price of $2.40 per share.
         The total offering price paid in cash was $51,000. As part of the
         private placement, the accredited investor also received 4,250 warrants
         to purchase 4,250 shares of the Company's common stock, without par
         value, at a purchase price of $2.88 per share. In our opinion, the
         issuance of these shares was exempt from registration pursuant to
         Section 4(2) of the Securities Act and Rule 506 promulgated thereunder
         due to the fact the shares were sold to less than 35 purchasers all of
         whom were accredited investors. The Company did not use a placement
         agent or underwriter for the transaction.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

         (A)      EXHIBITS.

                  10(a)    Lease Agreement between Superconductive Components,
                           Inc. and Duke Realty Ohio dated as of September 29,
                           2003 with Letter of Understanding dated February 17,
                           2004.

                  31.1     Rule 13a-14(a) Certification of Principal Executive
                           Officer.

                  31.2     Rule 13a-14(a) Certification of Principal Financial
                           Officer.

                  32.1     Section 1350 Certification of Principal Executive
                           Officer.

                  32.2     Section 1350 Certification of Principal Financial
                           Officer.


         (B)      REPORTS ON FORM 8-K.

                  None.

                                   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.


                                    SUPERCONDUCTIVE COMPONENTS, INC.


Date: May 14, 2004                  /s/ Daniel Rooney
                                    --------------------------------------------
                                    Daniel Rooney, President and Chief Executive
                                    Officer
                                    (Principal Executive Officer)


                                    /s/ Gerald S. Blaskie
                                    --------------------------------------------
                                    Gerald S. Blaskie, Chief Financial Officer
                                    (Principal Financial Officer)


                                       22