880807--5/27/2010--AMERICAN_SUPERCONDUCTOR_CORP

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{product, market, service}

{customer, product, revenue}

{regulation, government, change}

{property, intellectual, protect}

{acquisition, growth, future}

{product, candidate, development}

{gas, price, oil}

{personnel, key, retain}

{capital, credit, financial}

{product, liability, claim}

{stock, price, operating}

{operation, international, foreign}

{cost, operation, labor}

Our common stock has experienced, and may continue to experience, significant market price and volume fluctuations, which may prevent our stockholders from selling our common stock at a profit and could lead to costly litigation against us that could divert our management s attention. Risks related to our business and industry. If we fail to implement our business strategy, our financial performance and our growth could be materially and adversely affected. We may not realize all of the sales expected from our backlog of orders and contracts. Many of our revenue opportunities are dependent upon subcontractors and other business collaborators. Our products face intense competition, which could limit our ability to acquire or retain customers. Our success is dependent upon attracting and retaining qualified personnel and our inability to do so could significantly damage our business and prospects. We may acquire additional complementary businesses or technologies, which may require us to incur substantial costs for which we may never realize the anticipated benefits. Our international operations are subject to risks that we do not face in the U.S., which could have an adverse effect on our operating results. AMSC Power Systems Business Unit We have limited experience manufacturing our Power Systems products in commercial quantities overseas. We rely upon third party suppliers for the components and subassemblies of many of our products, making us vulnerable to supply shortages and price fluctuations, which could harm our business. We are becoming increasingly reliant on contracts that require the issuance of performance bonds. Problems with product quality or product performance may cause us to incur warranty expenses and may damage our market reputation and prevent us from achieving increased sales and market share. Our success in addressing the wind energy market is dependent on the manufacturers that license our designs. Growth of the wind energy market depends largely on the availability and size of government subsidies and economic incentives. There are a number of technological challenges that must be successfully addressed before our superconductor products can gain widespread commercial acceptance, and our inability to address such technological challenges could adversely affect our ability to acquire customers for our products. We have not manufactured our 344 superconductors in commercial quantities, and a failure to manufacture our 344 superconductors in commercial quantities at acceptable cost and quality levels would substantially limit our future revenue and profit potential. The commercial uses of superconductor products are limited today, and a widespread commercial market for our products may not develop. We have limited experience in marketing and selling our superconductor products and system-level solutions, and our failure to effectively market and sell our products and solutions could adversely affect our revenue and cash flow. Our contracts with the U.S. government are subject to audit, modification or termination by the U.S. government, include certain other provisions in favor of the government, and the continued funding of such contracts remains subject to annual congressional appropriation which, if not approved, could adversely affect our results of operations and financial condition. III. Risks related to our intellectual property and legal matters. Our technology and products could infringe intellectual property rights of others, which may require costly litigation and, if we are not successful, could cause us to pay substantial damages and disrupt our business.

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880807--5/27/2010--AMERICAN_SUPERCONDUCTOR_CORP_/DE/