Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Mar. 31, 2019 | Jun. 06, 2019 | Sep. 30, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | CAPSTONE TURBINE Corp | ||
Entity Central Index Key | 0001009759 | ||
Document Type | 10-K | ||
Document Period End Date | Mar. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --03-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 67.6 | ||
Entity Common Stock, Shares Outstanding | 72,661,104 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2019 | Mar. 31, 2018 |
Current Assets: | ||
Cash and cash equivalents | $ 29,727 | $ 14,408 |
Restricted cash | 5,000 | |
Accounts receivable, net of allowances of $5,298 at March 31, 2019 and $5,744 at March 31, 2018 | 16,222 | 15,968 |
Inventories, net | 20,343 | 15,633 |
Prepaid expenses and other current assets | 3,818 | 2,803 |
Total current assets | 70,110 | 53,812 |
Property, plant, equipment and rental assets, net | 5,291 | 2,859 |
Non-current portion of inventories | 1,403 | 1,041 |
Intangible assets, net | 187 | 411 |
Other assets | 2,972 | 250 |
Total assets | 79,963 | 58,373 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 16,638 | 13,503 |
Accrued salaries and wages | 1,637 | 1,588 |
Accrued warranty reserve | 2,614 | 1,682 |
Deferred revenue | 7,167 | 6,596 |
Revolving credit facility | 8,527 | |
Current portion of notes payable and capital lease obligations | 31 | 192 |
Total current liabilities | 28,087 | 32,088 |
Deferred revenue - non-current | 1,069 | |
Term note payable, net | 27,099 | |
Long-term portion of notes payable and capital lease obligations | 212 | 130 |
Other long-term liabilities | 342 | 396 |
Total liabilities | 56,809 | 32,614 |
Commitments and contingencies (Note 13) | ||
Stockholders' Equity: | ||
Preferred stock, $.001 par value; 10,000,000 shares authorized; none issued | ||
Common stock, $.001 par value; 515,000,000 shares authorized, 71,971,586 shares issued and 71,709,203 shares outstanding at March 31, 2019; 57,062,598 shares issued and 56,916,646 shares outstanding at March 31, 2018 | 72 | 57 |
Additional paid-in capital | 903,738 | 889,585 |
Accumulated deficit | (878,884) | (862,225) |
Treasury stock, at cost; 262,383 shares at March 31, 2019 and 145,952 shares at March 31, 2018 | (1,772) | (1,658) |
Total stockholders' equity | 23,154 | 25,759 |
Total liabilities and stockholders' equity | $ 79,963 | $ 58,373 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2019 | Mar. 31, 2018 |
CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowances (in dollars) | $ 5,298 | $ 5,744 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 515,000,000 | 515,000,000 |
Common stock, shares issued | 71,971,586 | 57,062,598 |
Common stock, shares outstanding | 71,709,203 | 56,916,646 |
Treasury stock, shares | 262,383 | 145,952 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue: | ||
Total revenue | $ 83,412 | $ 82,837 |
Cost of goods sold: | ||
Total cost of goods sold | 73,960 | 67,856 |
Gross margin | 9,452 | 14,981 |
Operating expenses: | ||
Research and development | 3,600 | 4,040 |
Selling, general and administrative | 20,958 | 19,609 |
Total operating expenses | 24,558 | 23,649 |
Loss from operations | (15,106) | (8,668) |
Other income (expense) | (43) | (2) |
Interest income | 9 | |
Interest expense | (1,502) | (606) |
Change in warrant valuation | (741) | |
Loss before provision for income taxes | (16,651) | (10,008) |
Provision for income taxes | 8 | 18 |
Net loss | $ (16,659) | $ (10,026) |
Net loss per common share-basic and diluted (in dollars per share) | $ (0.25) | $ (0.20) |
Weighted average shares used to calculate basic and diluted net loss per common share (in shares) | 66,994 | 51,339 |
Product, accessories and parts | ||
Revenue: | ||
Total revenue | $ 66,303 | $ 66,754 |
Cost of goods sold: | ||
Total cost of goods sold | 60,149 | 56,590 |
Service | ||
Revenue: | ||
Total revenue | 17,109 | 16,083 |
Cost of goods sold: | ||
Total cost of goods sold | $ 13,811 | $ 11,266 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Treasury Stock | Total |
Balance at Mar. 31, 2017 | $ 39 | $ 874,697 | $ (852,199) | $ (1,639) | $ 20,898 |
Balance (in shares) at Mar. 31, 2017 | 38,920,174 | 116,544 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Purchase of treasury stock | $ (19) | (19) | |||
Purchase of treasury stock (in shares) | 29,408 | ||||
Vested restricted stock awards | 17 | 17 | |||
Vested restricted stock awards (in shares) | 239,742 | ||||
Stock-based compensation | 586 | 586 | |||
Exercise of stock options and employee stock purchases | 4 | 4 | |||
Exercise of stock options and employee stock purchases (in shares) | 5,836 | ||||
Stock awards to Board of Directors | (14) | (14) | |||
Stock awards to Board of Directors (in shares) | 3,969 | ||||
Issuance of common stock, net of issuance costs | $ 16 | 11,820 | 11,836 | ||
Issuance of common stock, net of issuance costs (in shares) | 15,964,127 | ||||
Warrants exercised | $ 2 | 1,734 | 1,736 | ||
Warrants exercised (in shares) | 1,928,750 | ||||
Change in warrants valuation | 741 | 741 | |||
Net loss | (10,026) | (10,026) | |||
Balance at Mar. 31, 2018 | $ 57 | 889,585 | (862,225) | $ (1,658) | 25,759 |
Balance (in shares) at Mar. 31, 2018 | 57,062,598 | 145,952 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Purchase of treasury stock | $ (114) | (114) | |||
Purchase of treasury stock (in shares) | 116,431 | ||||
Vested restricted stock awards | 113 | 113 | |||
Vested restricted stock awards (in shares) | 296,991 | ||||
Stock-based compensation | 907 | 907 | |||
Exercise of stock options and employee stock purchases | 1 | 1 | |||
Exercise of stock options and employee stock purchases (in shares) | 1,012 | ||||
Stock awards to Board of Directors | (70) | (70) | |||
Stock awards to Board of Directors (in shares) | 457,183 | ||||
Issuance of common stock, net of issuance costs | $ 11 | 10,934 | 10,945 | ||
Issuance of common stock, net of issuance costs (in shares) | 10,347,559 | ||||
Warrants exercised | $ 4 | (4) | |||
Warrants exercised (in shares) | 3,806,243 | ||||
Warrants issued | 2,272 | 2,272 | |||
Net loss | (16,659) | (16,659) | |||
Balance at Mar. 31, 2019 | $ 72 | $ 903,738 | $ (878,884) | $ (1,772) | $ 23,154 |
Balance (in shares) at Mar. 31, 2019 | 71,971,586 | 262,383 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (16,659) | $ (10,026) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 1,261 | 1,170 |
Amortization of deferred financing costs | 311 | 202 |
Reduction in accounts receivable allowances | (345) | (1,099) |
Inventory provision | 778 | 1,420 |
Provision for warranty expenses | 2,201 | 942 |
Loss on disposal of equipment | 2 | 210 |
Stock-based compensation | 907 | 586 |
Change in warrant valuation | 741 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 91 | 3,222 |
Inventories | (5,850) | (2,595) |
Prepaid expenses, other current assets and other assets | (3,813) | 10 |
Accounts payable and accrued expenses | 3,048 | (866) |
Accrued salaries and wages and long term liabilities | (6) | 9 |
Accrued warranty reserve | (1,269) | (3,026) |
Deferred revenue | 1,640 | 459 |
Net cash used in operating activities | (17,703) | (8,641) |
Cash Flows from Investing Activities: | ||
Expenditures for property, equipment and rental assets | (3,360) | (1,752) |
Net cash used in investing activities | (3,360) | (1,752) |
Cash Flows from Financing Activities: | ||
Net repayments of revolving credit facility | (8,527) | (3,006) |
Net proceeds from term note payable | 29,262 | |
Repayment of notes payable and capital lease obligations | (337) | (457) |
Cash used in employee stock-based transactions | (114) | (22) |
Net proceeds from issuance of common stock and warrants | 11,098 | 13,581 |
Net cash provided by financing activities | 31,382 | 10,096 |
Net increase (decrease) in Cash, Cash Equivalents and Restricted Cash | 10,319 | (297) |
Cash, Cash Equivalents and Restricted Cash, Beginning of Year | 19,408 | 19,705 |
Cash, Cash Equivalents and Restricted Cash, End of Year | 29,727 | 19,408 |
Supplemental Disclosures of Cash Flow Information: | ||
Cash paid during the period for: Interest | 453 | 414 |
Cash paid during the period for: Income taxes | $ 6 | 30 |
Supplemental Disclosures of Non-Cash Information: | ||
Renewal of insurance contracts which was financed by notes payable | $ 422 |
Description of the Company and
Description of the Company and Basis of Presentation | 12 Months Ended |
Mar. 31, 2019 | |
Description of the Company and Basis of Presentation | |
Description of the Company and Basis of Presentation | 1. Description of the Company and Basis of Presentation Capstone Turbine Corporation (the “Company”) develops, manufactures, markets and services microturbine technology solutions for use in stationary distributed power generation applications and distribution networks, including cogeneration (combined heat and power (“CHP”), integrated combined heat and power (“ICHP”), and combined cooling, heat and power (“CCHP”)), renewable energy, natural resources, and critical power supply. The Company also remanufactures microturbine engines and provides aftermarket parts and services, which includes our Factory Protection Plan (“FPP”), Distributor Support System program (“DSS program”), and long-term microturbine rentals. The Company was organized in 1988 and has been commercially producing its microturbine generators since 1998. This Annual Report on Form 10‑K (this “Form 10‑K”) refers to the Company’s fiscal years ended March 31 as its “Fiscal” years. The consolidated financial statements include the accounts of the Company, Capstone Turbine International, Inc., its wholly owned subsidiary that was formed in June 2004, Capstone Turbine Singapore Pte., Ltd., its wholly owned subsidiary that was formed in February 2011, and Capstone Turbine Financial Services, LLC, its wholly owned subsidiary that was formed in October 2015, after elimination of inter-company transactions. The Company closed its wholly owned subsidiary, Capstone Turbine Singapore Pte., Ltd and the corporate structure related to this entity was dissolved in September 2018. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Mar. 31, 2019 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Cash Equivalents The Company considers only those investments that are highly liquid and readily convertible to cash with original maturities of three months or less at date of purchase as cash equivalents. Fair Value of Financial Instruments The carrying value of certain financial instruments, including cash equivalents, accounts receivable, accounts payable, revolving credit facility and notes payable approximate fair market value based on their short‑term nature. See Note 10—Fair Value Measurements, for disclosure regarding the fair value of other financial instruments. Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and are typically non‑interest bearing. The Company maintains allowances for estimated losses resulting from the inability of customers to make required payments and other accounts receivable allowances. Changes in the accounts receivable allowances are as follows as of March 31, 2019 and 2018 (in thousands): Balance, March 31, 2017 $ 6,845 Additions charged to costs and expenses (1,099) Bad debt write-off (2) Balance, March 31, 2018 $ 5,744 Additions charged to costs and expenses (345) Bad debt write-off (101) Balance, March 31, 2019 $ 5,298 Inventories The Company values inventories at the lower of cost (determined on a first in first out (“FIFO”) basis) or net realizable value. The composition of inventory is routinely evaluated to identify slow-moving, excess, obsolete or otherwise impaired inventories. Inventories identified as impaired are evaluated to determine if write-downs are required. Included in the assessment is a review for obsolescence as a result of engineering changes in the Company’s products. All inventories expected to be used in more than one year are classified as long-term. Depreciation and Amortization Depreciation and amortization are provided for using the straight-line method over the estimated useful lives of the related assets, ranging from two to ten years. Leasehold improvements are amortized over the lease term or the estimated useful lives of the assets, whichever is shorter. Intangible assets that have finite useful lives are amortized over their estimated useful lives using the straight-line method. Long-Lived Assets The Company reviews the recoverability of long-lived assets, including intangible assets with finite lives, whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. If the expected future cash flows from the use of such assets (undiscounted and without interest charges) are less than the carrying value, the Company may be required to record a write‑down, which is determined based on the difference between the carrying value of the assets and their estimated fair value. The Company performed an analysis as of March 31, 2019 and determined that no impairment was necessary. See Note 5—Intangible Assets. Deferred Revenue Deferred revenue consists of deferred product and service revenue and customer deposits. Deferred revenue will be recognized when earned in accordance with the Company’s revenue recognition policy. The Company has the right to retain all or part of customer deposits under certain conditions. Revenue On April 1, 2018, the Company adopted the new revenue standard ASU 2014-09 and applied it to all contracts using the modified retrospective method. The Company determined there was no change in applying the new revenue standard, therefore no adjustment to the opening balance of accumulated deficit was needed. The Company derives its revenues primarily from system sales, service contracts and professional services. Revenues are recognized when control of the systems and services is transferred to the Company’s customers in an amount that reflects the consideration it expects to be entitled to in exchange for those services. The Company determines revenue recognition through the following steps: · Identification of the contract, or contracts, with a customer · Identification of the performance obligations in the contract · Determination of the transaction price · Allocation of the transaction price to the performance obligations in the contract · Recognition of revenue when, or as, the Company satisfies a performance obligation The Company recognizes revenue when performance obligations identified under the terms of contracts with its customers are satisfied, which generally occurs, for systems, upon the transfer of control in accordance with the contractual terms and conditions of the sale. The majority of the Company’s revenue associated with systems is recognized at a point in time when the system is shipped to the customer. Revenue from service contracts and post-shipment performance obligations is recognized when or as those obligations are satisfied. The Company primarily offers assurance-type standard warranties that do not represent separate performance obligations and will separately offer and price extended warranties that are separate performance obligations for which the associated revenue is recognized over-time based on the extended warranty period. The Company records amounts billed to customers for reimbursement of shipping and handling costs within revenue. Shipping and handling costs associated with outbound freight after control over a system has transferred to a customer are accounted for as fulfillment costs and are included in cost of goods sold. Sales taxes and other usage-based taxes are excluded from revenue. Comprehensive Factory Protection Plan (“FPP”) service contracts require payment at the beginning of the contract period. Advance payments are not considered a significant financing component as they are typically received less than one year before the related performance obligations are satisfied. These payments are treated as a contract liability and are classified in deferred revenue in the Condensed Consolidated Balance Sheets. Once control transfers to the customer and the Company meets the revenue recognition criteria, the deferred revenue is recognized in the Condensed Consolidated Statement of Operations. The deferred revenue relating to the annual maintenance service contracts is recognized in the Condensed Consolidated Statement of Operations on a straight line basis over the expected term of the contract. Significant Judgments - Contracts with Multiple Performance Obligations The Company enters into contracts with its customers that often include promises to transfer multiple products, parts, accessories, FPP and services. A performance obligation is a promise in a contract with a customer to transfer products or services that are distinct. Determining whether products and services are distinct performance obligations that should be accounted for separately or combined as one unit of accounting may require significant judgment. Products, parts and accessories are distinct as such services are often sold separately. In determining whether FPP and service contracts are distinct, the Company considers the following factors for each FPP and services agreement: availability of the services from other vendors, the nature of the services, the timing of when the services contract was signed in comparison to the product delivery date and the contractual dependence of the product on the customer’s satisfaction with the professional services work. To date, the Company has concluded that all of the FPP and services contracts included in contracts with multiple performance obligations are distinct. The Company allocates the transaction price to each performance obligation on a relative standalone selling price (“SSP”) basis. The SSP is the price at which the Company would sell a promised product or service separately to a customer. Judgment is required to determine the SSP for each distinct performance obligation. The Company determines SSP by considering its overall pricing objectives and market conditions. Significant pricing practices taken into consideration include the Company’s discounting practices, the size and volume of the Company’s transactions, the customer demographic, the geographic area where systems and services are sold, price lists, its go-to-market strategy, historical sales and contract prices. The determination of SSP is made through consultation with and approval by the Company’s management, taking into consideration the go-to-market strategy. As the Company’s go-to-market strategies evolve, the Company may modify its pricing practices in the future, which could result in changes to SSP. In certain cases, the Company is able to establish SSP based on observable prices of products or services sold separately in comparable circumstances to similar customers. The Company uses a single amount to estimate SSP when it has observable prices. If SSP is not directly observable, for example when pricing is highly variable, the Company uses a range of SSP. The Company determines the SSP range using information that may include market conditions or other observable inputs. The Company typically has more than one SSP for individual products and services due to the stratification of those products and services by customer size and geography. Unsatisfied Performance Obligations The Company has elected the practical expedient to disclose only the value of unsatisfied performance obligations for contracts with an original expected length greater than one year. The majority of the Company’s revenues resulted from sales of inventoried systems with short periods of manufacture and delivery and thus are excluded from this disclosure. Practical Expedients We apply a practical expedient to expense costs as incurred for costs to obtain a contract when the amortization period would have been one year or less. These costs are recorded within sales and marketing expenses. Warranty The Company provides for the estimated costs of warranties at the time revenue is recognized. The specific terms and conditions of those warranties vary depending upon the product sold and geography of sale. The Company’s product warranties generally start from the delivery date and continue for up to twenty-four months. Factors that affect the Company’s warranty obligation include product failure rates, anticipated hours of product operations and costs of repair or replacement in correcting product failures. These factors are estimates that may change based on new information that becomes available each period. Similarly, the Company also accrues the estimated costs to address reliability repairs on products no longer in warranty when, in the Company’s judgment, and in accordance with a specific plan developed by the Company, it is prudent to provide such repairs. The Company assesses the adequacy of recorded warranty liabilities quarterly and makes adjustments to the liability as necessary. When the Company has sufficient evidence that product changes are altering the historical failure occurrence rates, the impact of such changes is then taken into account in estimating future warranty liabilities. Research and Development (“R&D”) The Company accounts for grant distributions and development funding as offsets to R&D expenses and both are recorded as the related costs are incurred. There were no offsets to R&D during the fiscal year ended March 31, 2019 and 2018. Income Taxes Deferred income tax assets and liabilities are computed for differences between the consolidated financial statement and income tax basis of assets and liabilities. Such deferred income tax asset and liability computations are based on enacted tax laws and rates applicable to periods in which the differences are expected to reverse. Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amounts expected to be realized. ASC Topic 740-10, Income Taxes , clarifies the accounting for uncertainty in income taxes recognized in our financial statements in accordance with accounting principles generally accepted in the United States of America, or GAAP. Income tax positions must meet a more-likely-than-not recognition threshold to be recognized. Income tax positions that previously failed to meet the more-likely-than-not threshold are recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax potions that no longer meet the more-likely-than-not threshold are derecognized in the first subsequent financial reporting period in which that threshold is not longer met. Our policy is to recognize interest and penalties accrued on any unrecognized tax benefits as interest and other expense, net in the statements of operations. Contingencies The Company records an estimated loss from a loss contingency when information available prior to issuance of its financial statements indicates that it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Risk Concentrations Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. At March 31, 2019, the majority of our cash balances were held at financial institutions located in California. The accounts at these institutions are insured by the Federal Deposit Insurance Corporation up to certain limits. Balances that exceed the insurance coverage aggregate to approximately $29.1 million as of March 31, 2019. The Company places its cash and cash equivalents with high credit quality institutions. The Company performs ongoing credit evaluations of its customers and maintains an allowance for potential credit losses. Sales to E‑Finity Distributed Generation, LLC (“E‑Finity”), one of the Company’s domestic distributors, accounted for 13% and 16% of the Company’s revenue for the fiscal years ended March 31, 2019 and 2018, respectively. Sales to Cal Microturbine (“CAL”), one of the Company’s domestic distributors, accounted for 12% of the Company’s revenue for the year ended March 31, 2019. Additionally, Reliable Secure Power Systems, (“RSP”), one of our domestic distributors and E-Finity, accounted for 14% and 10%, respectively, of net accounts receivable as of March 31, 2019. Serba Dinamik Sdn Bhd (“Serba”), one of the Company’s Malaysian distributors, E-Finity, and Supernova Energy Services SAS (“Supernova”), one of the Company’s Colombian distributors, accounted for 20%, 18% and 10%, respectively, of net accounts receivable as of March 31, 2018. On October 13, 2017, the Company entered into an Accounts Receivable Assignment Agreement (the “Assignment Agreement”) and Promissory Note (the “Note”) with Turbine International, LLC (“TI”). Pursuant to the terms of the Assignment Agreement, the Company agreed to assign to TI the right, title and interest to receivables owed to the Company from BPC Engineering, its former Russian distributor (“BPC”), upon TI’s payment to the Company of $2.5 million in three payments by February 1, 2018. The Company received payments from TI of approximately $1.0 million under the Assignment Agreement during Fiscal 2018, which was recorded as bad debt recovery. The receivables owed to the Company from BPC had a balance of $4.8 million as of March 31, 2019, and this balance was fully reserved. On October 13, 2017, the Company and Hispania Petroleum, S.A. (the “Guarantor”), entered into a Guaranty Agreement (the “Guaranty Agreement”) whereby the Guarantor guarantees TI’s obligations under the Agreement and Note. However, due to the Company’s limited business relationship with TI and the missed payments on the Assignment Agreement, the Company deferred recognition of the Assignment Agreement and Note until collectability is reasonably assured. In connection with the terms of the Note, the Company granted TI the sole distribution rights for its products and services in the Russian oil and gas sector. As a result of this appointment, TI agreed to pay the Company $3.8 million over a three-year period in 35 equal monthly installments starting in August 2018. On June 5, 2018, the Company entered into an amendment to the Assignment Agreement (the “Amended Assignment Agreement”) and the Note (the “Amended Note”) with TI. Pursuant to the terms of the Amended Assignment Agreement, the right, title and interest to receivables owed to the Company from BPC will be contingent upon TI’s payment to the Company of the remaining approximately $1.5 million in five payments by September 20, 2019. Under the terms of the Amended Note, TI agreed to pay the Company $3.8 million over a three-year period in 13 equal quarterly installments starting in December 20, 2019. As of March 31, 2019, the right, title and interest to the accounts receivables owed to the Company from BPC had not been assigned to TI, as TI had not yet made all payments as required under the Amended Assignment Agreement. The payment of $0.4 million, due March 20, 2019 under the Amended Assignment Agreement, has not been received at the date of this filing. The Company recorded bad debt recoveries of approximately $0.3 million and $1.1 million for the fiscal years ended March 31, 2019 and 2018, respectively. As of March 31, 2019, the Company collected cumulatively approximately $1.8 million from BPC on their previously reserved accounts receivable. Additionally, the Company collected approximately $1.5 million from TI, under the terms of the Assignment Agreement. The remaining balance is $4.8 million as of March 31, 2019 and this balance was fully reserved. Certain components of the Company’s products are available from a limited number of suppliers. An interruption in supply could cause a delay in manufacturing, which would affect operating results adversely. Estimates and Assumptions The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates include accounting for accounts receivable allowances, stock‑based compensation, inventory write‑downs, valuation of long‑lived assets including intangible assets with finite lives, product warranties, income taxes and other contingencies. Actual results could differ from those estimates. Net Loss Per Common Share Basic loss per common share is computed using the weighted‑average number of common shares outstanding for the period. Diluted loss per share is also computed without consideration to potentially dilutive instruments because the Company incurred losses which would make such instruments antidilutive. Outstanding stock options at March 31, 2019 and 2018 were 0.2 million. Outstanding restricted stock units at March 31, 2019 and 2018 were 2.4 million and 2.0 million, respectively. As of March 31, 2019 and 2018, the number of warrants excluded from diluted net loss per common share computations was approximately 6.8 million and 8.5 million, respectively. Stock‑Based Compensation Options or stock awards are recorded at their estimated fair value at the measurement date. The Company recognizes compensation cost for options and stock awards that have a graded vesting schedule on a straight‑line basis over the requisite service period for the entire award. Evaluation of Ability to Maintain Current Level of Operations In connection with preparing the consolidated financial statements for the fiscal year ended March 31, 2019, management evaluated whether there were conditions and events, considered in the aggregate, that raised substantial doubt about our ability to meet our obligations as they became due for the next twelve months from the date of issuance of our Fiscal 2019 financial statements. Management assessed that there were such conditions and events, including a history of recurring operating losses, negative cash flows from operating activities, the continued negative impact by the volatility of the global oil and gas markets, a strong U.S. dollar in certain markets making the Company’s products more expensive in such markets and ongoing global geopolitical tensions. The Company incurred a net loss of $16.7 million and used cash in operating activities of $17.7 million during the fiscal year ended March 31, 2019. The Company’s working capital requirements during the fiscal year ended March 31, 2019 were in line with management’s expectations, which included higher raw materials inventory, prepayments for certain raw materials, royalty settlement payment and higher warranty payments. Our net loss expanded during the year ended March 31, 2019 primarily because of an approximate increase of $0.7 million in our warranty provision and $3.0 million higher FPP scheduled and unscheduled maintenance costs primarily as a result of a supplier defect identified during the first quarter of Fiscal 2019. Additionally, we did not recognize revenue on certain service contracts because of the reassignment of those service contracts from Capstone’s legacy California distributor to Cal Microturbine. As of March 31, 2019, the Company had cash and cash equivalents of $29.7 million, and outstanding borrowings under its credit facility of $30.0 million. Management evaluated these conditions in relation to the Company’s ability to meet its obligations as they become due. The Company’s ability to continue current operations and to execute on management’s plans is dependent on its ability to generate cash flows from operations. Management believes that the Company will continue to make progress on its path to profitability by continuing to lower its operating costs and to develop its geographical and vertical markets. The Company may seek to raise funds by selling additional securities (through the at-the-market offering or otherwise) to the public or to selected investors. There is no assurance that the Company will be able to obtain additional funds on commercially favorable terms or at all. If the Company raises additional funds by issuing additional equity, the fully diluted ownership percentages of existing stockholders will be reduced. In addition, any equity that the Company would issue may have rights, preferences or privileges senior to those of the holders of its common stock. On February 4, 2019, the Company, entered into Note Purchase Agreements with Goldman Sachs Specialty Lending Holdings, Inc. (“Goldman Sachs”). Under the Note Purchase Agreement, the Company sold to the Purchaser $30.0 million aggregate principal amount of senior secured notes. The entire principal amount of the Notes is due and payable on February 4, 2022. See Note 12—Term Note Payable, for discussion of the three-year term note with Goldman Sachs. Under the three-year term note with Goldman Sachs we are not permitted to allow our cash and cash equivalents to be less than $12.0 million through the first anniversary date of February 4, 2020, and $9.0 million thereafter. The Company maintained two secured credit facilities (the “Bridge Bank Credit Agreements”) with Western Alliance Bank through its Bridge Bank division (“Bridge Bank”), with credit support provided by the Export-Import Bank of the United States through its working capital guarantee program, which provided the Company with a credit facility up to $15.0 million in the aggregate. Upon closing with Goldman Sachs, the Company’s Bridge Bank Credit Agreements with Bridge Bank were paid off in full. Based on the Company’s current operating plan, management anticipates that, given current working capital levels, current financial projections , the new term note with Goldman Sachs, and the funds raised by selling additional securities through the at-the-market offering as of the date of issuance of its Fiscal 2019 financial statements , the Company will be able to meet its financial obligations as they become due over the next twelve months from the date of issuance of its Fiscal 2019 financial statements. Segment Reporting The Company is considered to be a single reporting segment. The business activities of this reporting segment are the development, manufacture and sale of turbine generator sets and their related parts and service. Following is the geographic revenue information based on the primary operating location of the Company’s customers (in thousands): Year Ended Year Ended March 31, 2019 March 31, 2018 United States $ 45,480 $ 39,100 Mexico 5,005 2,007 All other North America 791 158 Total North America 51,276 41,265 Russia 3,176 2,824 All other Europe 12,886 12,762 Total Europe 16,062 15,586 Asia 5,229 8,378 Australia 3,874 5,443 All other 6,971 12,165 Total Revenue $ 83,412 $ 82,837 The following table summarizes the Company’s revenue by product (in thousands): Year Ended Year Ended March 31, 2019 March 31, 2018 C30 $ 1,810 $ 1,694 C65 11,719 12,740 C200 5,218 2,832 C600 6,286 9,057 C800 5,846 6,461 C1000 20,538 17,886 Unit upgrades — 143 Microturbine Products $ 51,417 $ 50,813 Accessories and Parts 14,886 15,941 Total Product, Accessories and Parts 66,303 66,754 Service 17,109 16,083 Total Revenue $ 83,412 $ 82,837 Substantially all of the Company’s operating assets are in the United States. Recent Accounting Pronouncements On December 22, 2017, the SEC issued guidance under Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”) directing taxpayers to consider the impact of the U.S. legislation as “provisional” when it does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting for the change in tax law. As of March 31, 2019, upon completing its analysis, we believe that the amount recorded as provisional in our financial statements as of March 31, 2018 under SAB 118 is final. In July 2017, the FASB issued a two-part ASU No. 2017-11, I. Accounting for Certain Financial Instruments With Down Round Features and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests With a Scope Exception (“ASU 2017-11”). ASU 2017-11 amends guidance in FASB ASC 260, Earnings Per Share, FASB ASC 480, Distinguishing Liabilities from Equity, and FASB ASC 815, Derivatives and Hedging. The amendments in Part I of ASU 2017-11 change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. The amendments in Part II of ASU 2017-11 re-characterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. ASU 2017-11 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The Company adopted ASU 2017-11 for the three months ended June 30, 2017, and retrospectively applied ASU 2017-11 as required. See Note 10—Fair Value Measurements for further discussion on changes as a result of the adoption of ASU 2017-11. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), (“ASU 2016-02”). The purpose of ASU 2016-02 is to provide financial statement users a better understanding of the amount, timing, and uncertainty of cash flows arising from leases. The adoption of ASU 2016-02 will result in the recognition of a right-of-use asset and a lease liability for most operating leases. New disclosure requirements include qualitative and quantitative information about the amounts recorded in the financial statements. In September 2017, the FASB issued ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842), which provides additional implementation guidance on the previously issued ASU 2016-02 Leases (Topic 842). ASU 2016-02 requires a lessee to recognize assets and liabilities on the balance sheet for leases with lease terms greater than 12 months. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018. ASU 2016-02 requires a modified retrospective transition by means of a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year in which the guidance is effective with the option to elect certain practical expedients. Early adoption is permitted. We adopted ASU 2016-02 on April 1, 2019 and it did not have a material impact on our consolidated financial position and results of operations. In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU, 2014-09, Revenue from Contracts with Customers (Topic 606), (“ASU 2014-09”). ASU 2014-09 outlines a single, comprehensive model for accounting for revenue from contracts with customers and requires more detailed disclosure to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from such contracts. ASU 2014-09 provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. On April 1, 2018, we adopted ASU 2014-09 under the modified retrospective transition method. This method was applied to contracts that were not complete as of the date of initial application of ASU 2014-09. During Fiscal 2019, we recognized revenue based on ASU 2014-09, however revenue for Fiscal 2018 was recognized based on Accounting Standards Codification, Topic 605, Revenue Recognition. See Note 7—Revenue Recognition for additional discussion of the impact of the adoption of ASU 2014-09. |
Inventories
Inventories | 12 Months Ended |
Mar. 31, 2019 | |
Inventories | |
Inventories | 3. Inventories Inventories are valued at the lower of cost (determined on a first in first out (“FIFO”) basis) or net realizable value and consisted of the following as of March 31, 2019 and 2018 (in thousands): March 31, March 31, 2019 2018 Raw materials $ 24,426 $ 17,981 Work in process — 111 Finished goods 1,207 4,076 Total 25,633 22,168 Less inventory reserve (3,887) (5,494) Less non-current portion (1,403) (1,041) Current portion $ 20,343 $ 15,633 The non‑current portion of inventories represents that portion of the inventories in excess of amounts expected to be used in the next twelve months. The non‑current inventories are primarily comprised of repair parts for older generation products that are still in operation, but are not technologically compatible with current configurations. The weighted average age of the non‑current portion of inventories on hand as of March 31, 2019 is 1.0 years. The Company expects to use the non‑current portion of the inventories on hand as of March 31, 2019 over the periods presented in the following table (in thousands): Non-current Inventory Balance Expected Expected Period of Use to be Used 13 to 24 months $ 727 25 to 36 months 676 Total $ 1,403 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment | |
Property, Plant, Equipment and Rental Assets | 4. Property, Plant and Equipment Property, plant and equipment as of March 31, 2019 and 2018 consisted of the following (in thousands): March 31, March 31, 2019 2018 Machinery, equipment, automobiles and furniture $ 15,344 $ 15,302 Leasehold improvements 11,074 10,949 Molds and tooling 2,893 2,904 Rental assets 2,818 179 32,129 29,334 Less, accumulated depreciation (26,838) (26,475) Total property, plant, equipment and rental assets, net $ 5,291 $ 2,859 The Company regularly reassesses the useful lives of property and equipment and retires assets no longer in service. Depreciation expense for property, plant and equipment was $1.0 million and $0.9 million for the fiscal years ended March 31, 2019 and 2018, respectively. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Mar. 31, 2019 | |
Intangible Assets | |
Intangible Assets | 5. Intangible Assets Intangible assets consisted of the following (in thousands): March 31, 2019 Weighted Average Intangible Amortization Assets, Accumulated Intangible Period Gross Amortization Assets, Net Manufacturing license 17 years $ 3,700 $ 3,700 $ — Technology 10 years 2,240 2,053 187 Trade name & parts, service and TA100 customer relationships 1.2 to 5 years 1,766 1,766 — Total $ 7,706 $ 7,519 $ 187 March 31, 2018 Weighted Average Intangible Amortization Assets, Accumulated Intangible Period Gross Amortization Assets, Net Manufacturing license 17 years $ 3,700 $ 3,700 $ — Technology 10 years 2,240 1,829 411 Trade name & parts, service and TA100 customer relationships 1.2 to 5 years 1,766 1,766 — Total $ 7,706 $ 7,295 $ 411 Amortization expense for the intangible assets was $0.2 million and $0.3 million for the fiscal years ended March 31, 2019 and 2018, respectively. Expected future amortization expense of intangible assets as of March 31, 2019 is as follows (in thousands): Amortization Year Ending March 31, Expense 2020 $ 187 Total expected future amortization $ 187 The manufacturing license provides the Company with the ability to manufacture recuperator cores previously purchased from Solar Turbines Incorporated (“Solar”). The Company is required to pay a per‑unit royalty fee for the life of Capstone’s patents for cores manufactured and sold by the Company using the technology. Royalties of approximately $33,200 and $30,900 were earned by Solar for the fiscal years ended March 31, 2019 and 2018, respectively. Earned royalties of approximately $26,100 and $8,000 were unpaid as of March 31, 2019 and 2018, respectively, and are included in accrued expenses in the accompanying balance sheets. |
Accrued Warranty Reserve
Accrued Warranty Reserve | 12 Months Ended |
Mar. 31, 2019 | |
Accrued Warranty Reserve | |
Accrued Warranty Reserve | 6. Accrued Warranty Reserve During the fiscal year ended March 31, 2017, the Company recorded a one-time non-cash warranty provision of approximately $5.2 million to proactively retrofit selected non-Signature Series C200 microturbines with the more robust new Signature Series generator components to improve product performance and reliability. The remaining non-cash warranty provision of approximately $0.6 million for this reliability repair program was reversed during the fiscal year ended March 31, 2018 because the program was completed. Changes in the accrued warranty reserve are as follows as of March 31, 2019 and 2018 (in thousands): 2019 2018 Balance, beginning of the period $ 1,682 $ 3,766 Standard warranty provision 2,200 1,702 Accrual related to reliability repair programs — (760) Deductions for warranty claims (1,268) (3,026) Balance, end of the period $ 2,614 $ 1,682 |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Mar. 31, 2019 | |
Revenue Recognition | |
Revenue Recognition | 7. Revenue Recognition The following table presents disaggregated revenue by business group for the fiscal year ended March 31, 2019 (in thousands): Fiscal Year Ended March 31, 2019 Microturbine Products $ 51,417 Accessories and Parts Total Product, Accessories and Parts 66,303 Service 17,109 Total Revenue $ 83,412 Following is the geographic revenue information based on the primary operating location of the Company’s customers for the fiscal year ended March 31, 2019 (in thousands): Fiscal Year Ended March 31, 2019 United States $ 45,480 Mexico 5,005 All other North America 791 Total North America 51,276 Europe 3,176 All other Europe 12,886 Total Europe Asia 5,229 Australia 3,874 All other 6,971 Total Revenue $ 83,412 Contract Balances Our contract liabilities consist of advance payments for systems as well as deferred revenue on service obligations and extended warranties. The current portion of deferred revenue is included in current liabilities under deferred revenue and the non-current portion of deferred revenue is included in other non-current liabilities in the Consolidated Balance Sheets. As of March 31, 2019 the balance of deferred revenue was approximately $8.2 million compared to $6.6 million as of March 31, 2018. This overall increase in the balance of deferred revenue of $1.6 million during the fiscal year ended March 31, 2019 was comprised of increases in deferred revenue attributable to FPP contracts of $1.3 million, increases in deferred revenue attributable to the DSS program of $0.6 million, offset by a decrease in deferred revenue attributable to deposits of $0.3 million. Changes in deferred revenue during the fiscal year ended March 31, 2019 and 2018 are as follows (in thousands): 2019 2018 FPP Balance, beginning of the period $ 3,549 $ 3,414 FPP Billings 15,650 15,138 FPP Revenue recognized (14,318) (15,003) Balance attributed to FPP contracts 4,881 3,549 DSS program 1,689 1,087 Deposits 1,666 1,960 Deferred revenue balance, end of the period $ 8,236 $ 6,596 Deferred revenue attributed to FPP contracts represents the unearned portion of our agreements. FPP agreements are generally paid quarterly in advance with revenue recognized on a straight line basis over the contract period. Deposits are primarily non-refundable cash payments from distributors for future orders. As of March 31, 2019, approximately $4.9 million of revenue is expected to be recognized from remaining performance obligations for FPP service contracts. The Company expects to recognize revenue on approximately $3.8 million of these remaining performance obligations over the next 12 months and the balance of $1.1 million will be recognized thereafter. Revenue from remaining performance obligations for professional services contracts as of March 31, 2019 was not material. |
Income Taxes
Income Taxes | 12 Months Ended |
Mar. 31, 2019 | |
Income Taxes | |
Income Taxes | 8. Income Taxes Loss before provision for income taxes consisted of the following for the years ended March 31, 2019 and 2018 (in thousands): Year Ended March 31, 2019 2018 United States $ (16,678) $ (10,041) Foreign 27 33 Loss before provision for income taxes $ (16,651) $ (10,008) Current income tax provision is the amount of income taxes reported or expected to be reported on our income tax return. The provision for current income taxes was $8,000 and $18,000 for the years ended March 31, 2019 and March 31, 2018, respectively. The current income taxes were related to state income and foreign taxes. The Company did not have current federal income taxes for the fiscal year ended March 31, 2019. The Tax Cuts and Jobs Act (the "Act") was enacted in December 2017. The Act reduces the U.S. federal corporate tax rate from 34% to 21%. As of March 31, 2019, upon completing its analysis of tax reform, the Company believes that the amount recorded as provisional in its financial statements as of March 31, 2018 under SAB 118 is accurate and can now be considered finalized. Actual income tax expense differed from the amount computed by applying statutory corporate income tax rates to loss from operations before income taxes. A reconciliation of income tax (benefit) expense to the federal statutory rate follows (in thousands): Year Ended March 31, 2019 2018 Federal income tax benefit at the statutory rate $ (3,497) $ (3,082) State taxes, net of federal effect (583) (376) Foreign taxes 3 10 Expiring NOLs and tax credits 6,137 12,115 Impact of state rate change (67) — Valuation allowance (2,135) (95,547) Enactment of Tax Cuts and Jobs Act — 87,697 Shortfall in tax benefit—stock compensation 111 11 True-up 2 (1,217) Other 37 407 Income tax expense $ 8 $ 18 The Company’s deferred tax assets and liabilities consisted of the following at March 31, 2019 and 2018 (in thousands): Year Ended March 31, 2019 2018 Deferred tax assets: Inventories $ 1,842 $ 1,893 Warranty reserve 630 402 Bad debt reserve 1,245 1,373 Deferred revenue 1,584 1,108 Net operating loss (“NOL”) carryforwards 145,835 148,405 Tax credit carryforwards 16,021 16,627 Depreciation, amortization and impairment loss 2,734 2,673 Other 1,726 1,271 Deferred tax assets 171,617 173,752 Valuation allowance for deferred tax assets (171,617) (173,752) Deferred tax assets, net of valuation allowance — — Deferred tax liabilities: Federal benefit of state taxes — — Net deferred tax assets $ — $ — Because of the uncertainty surrounding the timing of realizing the benefits of favorable tax attributes in future income tax returns, the Company has placed a valuation allowance against its net deferred income tax assets. The change in valuation allowance for fiscal years ended March 31, 2019 and 2018 was $2.1 million and $95.5 million, respectively. The Company’s NOL and tax credit carryforwards for federal and state income tax purposes at March 31, 2019 were as follows (in thousands): Expiration Amount Period Federal NOL generated before April 1, 2018 $ 631,046 2020 - 2038 Federal NOL generated after March 31, 2018 $ 12,200 Indefinite State NOL $ 153,585 2028 - 2039 Federal tax credit carryforwards $ 8,365 2020 - 2038 State tax credit carryforwards $ 9,692 Indefinite The NOLs and federal and state tax credits can be carried forward to offset future taxable income, if any. Utilization of the NOLs and tax credits are subject to an annual limitation of approximately $57.3 million due to the ownership change limitations provided by the Internal Revenue Code of 1986 and similar state provisions. The federal tax credit carryforward is a research and development credit, which may be carried forward. The state tax credits consist of a research and development credit can be carried forward indefinitely. Accounting Standards Codification (“ASC”) 740, Income Taxes clarifies the accounting for income taxes by prescribing a minimum recognition threshold that a tax position is required to meet before being recognized in the financial statements. ASC 740 also provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. Based on management’s evaluation, the total amount of unrecognized tax benefits related to research and development credits as of March 31, 2019 and 2018 was $2.4 million and $2.5 million, respectively. There were no interest or penalties related to unrecognized tax benefits as of March 31, 2019 or March 31, 2018. The amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate as of March 31, 2019 and March 31, 2018 was $2.4 million and $2.5 million, respectively. However, this impact would be offset by an equal increase in the deferred tax valuation allowance as the Company has recorded a full valuation allowance against its deferred tax assets because of uncertainty as to future realization. The fully reserved recognized federal and state deferred tax assets related to research and development credits balance as of March 31, 2019 and 2018 was $8.4 million and $9.0 million, and $9.0 million and $10.2 million, respectively. A reconciliation of the beginning and ending amount of total gross unrecognized tax benefits is as follows (in thousands): Balance at March 31, 2017 $ 2,825 Gross increase related to prior year tax positions — Gross increase related to current year tax positions — Lapse of statute of limitations (358) Balance at March 31, 2018 $ 2,467 Gross increase related to prior year tax positions — Gross increase related to current year tax positions — Lapse of statute of limitations (77) Balance at March 31, 2019 $ 2,390 The Company files income tax returns in the U.S. federal jurisdiction and various state, local and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state, local or non-U.S. income tax examinations by tax authorities for the years before 2013. However, net operating loss carryforwards remain subject to examination to the extent they are carried forward and impact a year that is open to examination by tax authorities. The Company’s evaluation was performed for the tax years which remain subject to examination by major tax jurisdictions as of March 31, 2019. When applicable, the Company accounts for interest and penalties generated by tax contingencies as interest and other expense, net in the statements of operations. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Mar. 31, 2019 | |
Stockholders' Equity. | |
Stockholders' Equity | 9. Stockholders’ Equity The following table summarizes, by statement of operations line item, stock-based compensation expense for the fiscal years ended March 31, 2019 and 2018 (in thousands): Year Ended March 31, 2019 2018 Cost of goods sold $ 51 $ 52 Research and development 32 21 Selling, general and administrative 824 513 Stock-based compensation expense $ 907 $ 586 2000 and 2017 Equity Incentive Plans In June 2000, the Company adopted the 2000 Equity Incentive Plan (“2000 Plan”). The 2000 Plan provides for a total maximum aggregate number of shares which may be issued of 1,849,000 shares. In June 2017, the Company’s Board of Directors (the “Board”) adopted the Capstone Turbine Corporation 2017 Equity Incentive Plan (the “2017 Plan”) which was approved by the stockholders at the Company’s 2017 annual meeting of stockholders on August 31, 2017 (the “2017 Annual Meeting”). The 2017 Plan provides for awards of up to 3,000,000 shares of common stock. The 2017 Plan is administered by the Compensation Committee designated by the Board (the “Compensation Committee”). The Compensation Committee’s authority includes determining the number of incentive awards and vesting provisions. On June 5, 2018, the Company’s Board of Directors adopted an amendment of the 2017 Plan to increase the aggregate number of shares of common stock authorized for issuance under the 2017 Plan by 3,000,000 shares of common stock. The amendment of the 2017 Plan was approved by the Company’s stockholders at the 2018 annual meeting of stockholders on August 30, 2018. As of March 31, 2019, there were 3,085,347 shares available for future grants under the 2017 Plan. Stock Options The Company issued stock options under the 2000 Plan and issues stock options under the 2017 Plan to employees, non-employee directors and consultants that vest and become exercisable over a four-year period and expire 10 years after the grant date. The Company uses a Black-Scholes valuation model to estimate the fair value of the options at the grant date, and compensation cost is recorded on a straight-line basis over the vesting period. All options are subject to the following vesting provisions: one-fourth vest one year after the issuance date and 1/48th vest on the first day of each full month thereafter, so that all options will be vested on the first day of the 48th month after the grant date. Information relating to stock options for fiscal year ended March 31, 2019, is as follows: Weighted- Average Weighted- Remaining Aggregate Average Contractual Intrinsic Shares Exercise Price Term Value (in years) Options outstanding at March 31, 2018 212,392 $ 20.71 Granted — $ — Exercised — $ — Forfeited, cancelled or expired (37,448) $ 19.64 Options outstanding at March 31, 2019 174,944 $ 20.94 — Options fully vested at March 31, 2019 and those expected to vest beyond March 31, 2019 174,944 $ 20.94 — Options exercisable at March 31, 2019 174,944 $ 20.94 — Black-Scholes Model Valuation Assumptions There were no stock options granted during the fiscal year ended March 31, 2019 or 2018. There was no expense associated with stock options during the fiscal year ended March 31, 2019. The Company recorded expense of approximately $16,900 fiscal year ended March 31, 2018. There were no unvested stock option awards as of March 31, 2019. Restricted Stock Units The Company issued restricted stock units under the 2000 Plan and issues restricted stock units under the 2017 Plan to employees, non-employee directors and consultants. The restricted stock units are valued based on the closing price of the Company’s common stock on the date of issuance, and compensation cost is recorded on a straight-line basis over the vesting period. During the fiscal year ended March 31, 2017, the Company established an accounting policy election to assume zero forfeiture for restricted stock units and account for forfeitures when they occur through the adoption of ASU 2016-09. The restricted stock units vest in equal installments over a period of four years. For restricted stock units with four year vesting, one-fourth vest annually beginning one year after the issuance date. The restricted stock units issued to non-employee directors vest one year after the issuance date. The following table outlines the restricted stock unit activity: Weighted Average Grant Date Fair Restricted Stock Units and Performance Restricted Stock Units Shares Value Nonvested restricted stock units outstanding at March 31, 2018 2,011,611 $ 0.90 Granted 1.16 Vested and issued (754,174) 0.90 Forfeited (51,360) 0.93 Nonvested restricted stock units outstanding at March 31, 2019 2,217,433 1.02 Restricted stock units expected to vest beyond March 31, 2019 2,217,410 $ 1.02 The following table provides additional information on restricted stock units for the Company’s fiscal years ended March 31, 2019 and 2018: Year Ended March 31, 2019 2018 Restricted stock compensation expense (in thousands) $ 907 $ 566 Aggregate fair value of restricted stock units vested and issued (in thousands) $ 748 $ 157 Weighted average grant date fair value of restricted stock units granted during the period $ 0.98 $ 0.83 As of March 31, 2019, there was approximately $1.2 million of total compensation cost related to unvested restricted stock units that is expected to be recognized as expense over a weighted average period of 1.8 years. Restricted Stock Awards The Company issued restricted stock awards under the 2000 Plan to employees and non-employee directors. There were no restricted stock awards granted during the fiscal year ended March 31, 2019. During the fiscal year ended March 31, 2018, the Company issued a total of 3,969 shares of stock, to non-employee directors who elected to take payment of all or any part of the directors’ fees in stock in lieu of cash. The weighted average per share grant date fair value of shares of stock issued during the fiscal year ended March 31, 2018 was $0.63. No expense was recorded associated with its restricted stock awards during the fiscal year ended March 31, 2019. The Company recorded expense of approximately $3,000 associated with its restricted stock awards during the fiscal year ended March 31, 2018. For each term of the Board of Directors (beginning on the date of an annual meeting of stockholders and ending on the date immediately preceding the next annual meeting of stockholders), a non-employee director may elect to receive a stock award in lieu of all or any portion of their annual retainer or committee fee cash payment. The shares of stock were valued based on the closing price of the Company’s common stock on the date of grant. Employee Stock Purchase Plan In June 2000, the Company adopted the Employee Stock Purchase Plan (the “ESPP”). The ESPP provides for the granting of rights to purchase common stock to regular full and part-time employees or officers of the Company and its subsidiaries. In June 2017, the Board unanimously approved an amendment and restatement to the ESPP which was approved by the stockholders at the Company’s annual meeting of stockholders on August 31, 2017. Prior to the current amendment, 70,000 shares of the Company’s common stock had been reserved for issuance. As amended, the ESPP continued by its terms and the number of shares of the Company’s common stock available increased by 500,000 shares which reserved for issuance a total of 570,000 shares of common stock. Under the ESPP, shares of the Company’s common stock are issued upon exercise of the purchase rights. The ESPP will continue by its terms through June 30, 2020, unless terminated sooner. The maximum amount that an employee can contribute during a purchase right period is $25,000 or 15% of the employee’s regular compensation. Under the ESPP, the exercise price of a purchase right is 95% of the fair market value of such shares on the last day of the purchase right period. The fair market value of the stock is its closing price as reported on the Nasdaq Capital Market on the day in question. During the fiscal years ended March 31, 2019 and 2018, the Company issued a total of 1,012 shares and 5,836 shares of stock, respectively, to regular full and part-time employees or officers of the Company who elected to participate in the ESPP. As of March 31, 2019, there were 497,909 shares available for future grant under the ESPP. Stockholder Rights Plan On May 6, 2019, the Company’s Board of Directors (the “Board”), declared a dividend of one right (a “New Right”) for each of the Company’s issued and outstanding shares of common stock, $0.001 par value per share (“Common Stock”). The dividend will be paid to the stockholders of record at the close of business on May 16, 2019 (the “Record Date”). Each New Right entitles the registered holder, subject to the terms of the NOL Rights Agreement (as defined below), to purchase from the Company one one-thousandth of a share of the Company’s Series B Junior Participating Preferred Stock (the “Preferred Stock”) at a price of $5.22 (the “Exercise Price”), subject to certain adjustments. The description and terms of the New Rights are set forth in the Rights Agreement dated as of May 6, 2019 (the “NOL Rights Agreement”) between the Company and Broadridge Financial Solutions, Inc., as Rights Agent (the “Rights Agent”). The NOL Rights Agreement replaces the Company’s Rights Agreement, dated May 6, 2016, by and between the Company and Broadridge Financial Solutions, Inc., as successor-in-interest to Computershare Inc., as rights agent (the “Original Rights Agreement”). The Original Rights Agreement, and the rights thereunder to purchase fractional shares of Preferred Stock, expired at 5:00 p.m., New York City time, on May 6, 2019 and the NOL Rights Agreement was entered into immediately thereafter. The purpose of the NOL Rights Agreement is to diminish the risk that the Company’s ability to use its net operating losses and certain other tax assets (collectively, “Tax Benefits”) to reduce potential future federal income tax obligations would become subject to limitations by reason of the Company’s experiencing an “ownership change,” as defined in Section 382 of the Internal Revenue Code of 1986, as amended (the “Tax Code”). A company generally experiences such an ownership change if the percentage of its stock owned by its “5-percent shareholders,” as defined in Section 382 of the Tax Code, increases by more than 50 percentage points over a rolling three-year period. The NOL Rights Agreement is designed to reduce the likelihood that the Company will experience an ownership change under Section 382 of the Tax Code by (i) discouraging any person or group from becoming a 4.9% shareholder and (ii) discouraging any existing 4.9% shareholder from acquiring additional shares of the Company’s stock. The New Rights will not be exercisable until the earlier to occur of (i) the close of business on the tenth business day after a public announcement or filing that a person has, or group of affiliated or associated persons have, become an “Acquiring Person,” which is defined as a person or group of affiliated or associated persons who, at any time after the date of the NOL Rights Agreement, have acquired, or obtained the right to acquire, beneficial ownership of 4.9% or more of the Company’s outstanding shares of Common Stock, subject to certain exceptions or (ii) the close of business on the tenth business day after the commencement of, or announcement of an intention to commence, a tender offer or exchange offer the consummation of which would result in any person becoming an Acquiring Person (the earlier of such dates being called the “Distribution Date”). Certain synthetic interests in securities created by derivative positions, whether or not such interests are considered to be ownership of the underlying Common Stock or are reportable for purposes of Regulation 13D of the Securities Exchange Act, are treated as beneficial ownership of the number of shares of Common Stock equivalent to the economic exposure created by the derivative position, to the extent actual shares of the Common Stock are directly or indirectly held by counterparties to the derivatives contracts. With respect to certificates representing shares of Common Stock outstanding as of the Record Date, until the Distribution Date, the New Rights will be evidenced by such certificates for shares of Common Stock registered in the names of the holders thereof, and not by separate Rights Certificates, as described further below. With respect to book entry shares of Common Stock outstanding as of the Record Date, until the Distribution Date, the New Rights will be evidenced by the balances indicated in the book entry account system of the transfer agent for the Common Stock. Until the earlier of the Distribution Date and the Expiration Date, as described below, the transfer of any shares of Common Stock outstanding on the Record Date will also constitute the transfer of the New Rights associated with such shares of Common Stock. As soon as practicable after the Distribution Date, separate certificates evidencing the New Rights (“Right Certificates”) will be mailed to holders of record of the Common Stock as of the close of business on the Distribution Date, and such Right Certificates alone will evidence the New Rights. The New Rights, which are not exercisable until the Distribution Date, will expire prior to the earliest of (i) May 6, 2022 or such later day as may be established by the Board prior to the expiration of the New Rights, provided that the extension is submitted to the Company’s stockholders for ratification at the next annual meeting of stockholders of the Company succeeding such extension; (ii) the time at which the New Rights are redeemed pursuant to the NOL Rights Agreement; (iii) the time at which the New Rights are exchanged pursuant to the NOL Rights Agreement; (iv) the time at which the New Rights are terminated upon the occurrence of certain transactions; (v) the close of business on the first day after the Company’s 2019 annual meeting of stockholders, if approval by the stockholders of the Company of the NOL Rights Agreement has not been obtained on or prior to the close of business on the first day after the Company’s 2019 annual meeting of stockholders; (vi) the close of business on the effective date of the repeal of Section 382 of the Tax Code, if the Board determines that the NOL Rights Agreement is no longer necessary or desirable for the preservation of Tax Benefits; and (vii) the close of business on the first day of a taxable year of the Company to which the Board determines that no Tax Benefits are available to be carried forward, (the earliest of (i), (ii), (iii), (iv), (v), (vi) and (vii) is referred to as the “Expiration Date”). Each share of Preferred Stock will be entitled, when, as and if declared, to a preferential per share quarterly dividend payment equal to the greater of (i) $1.00 per share or (ii) an amount equal to 1,000 times the aggregate quarterly dividend declared per share of Common Stock since the immediately preceding quarterly dividend payment date for the Common Stock (or, with respect to the first quarterly dividend payment on the Common Stock, since the first issuance of the Preferred Stock). Each share of Preferred Stock will entitle the holder thereof to 1,000 votes on all matters submitted to a vote of the stockholders of the Company. In the event of any merger, consolidation or other transaction in which shares of Common Stock are converted or exchanged, each share of Preferred Stock will be entitled to receive 1,000 times the amount received per one share of Common Stock. Offerings of Common Stock and Warrants and At-the-Market Offering Program At-the-Market Offering Effective August 28, 2015, the Company entered into a sales agreement with Cowen and Company, LLC with respect to an at-the-market offering program pursuant to which the Company offered and sold, from time to time at its sole discretion, shares of its common stock, having an aggregate offering price of up to $30.0 million. During the fiscal year ended March 31, 2019, the Company issued 2.8 million shares of the Company’s common stock under this at-the-market offering program and the net proceeds to the Company from the sale of the Company’s common stock were approximately $4.0 million after deducting commissions paid of approximately $0.1 million. As of March 31, 2019, 26.0 million shares of the Company’s common stock were cumulatively sold pursuant to the at-the-market offering program and the net proceeds to the Company from the sale of the common stock were approximately $28.6 million after deducting commissions paid of approximately $0.8 million. This at-the-market offering program expired on May 29, 2018. On June 7, 2018, the Company entered into a sales agreement with H.C. Wainwright & Co., LLC with respect to an at-the-market offering program pursuant to which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock, having an aggregate offering price of up to $25.0 million. The Company will set the parameters for sales of the shares, including the number to be sold, the time period during which sales are requested to be made, any limitation on the number that may be sold in one trading day and any minimum price below which sales may not be made. During the fiscal year ended March 31, 2019, the Company issued 7.6 million shares of the Company’s common stock under the at-the-market offering program and the net proceeds to the Company from the sale of the Company’s common stock were approximately $6.9 million after deducting commissions paid of approximately $0.2 million. As of March 31, 2019, approximately $17.8 million remained available for issuance with respect to this at-the-market offering program. Warrants On April 13, 2018, a warrant holder exercised its rights to the warrant agreement to exercise on a cashless basis 5,760,000 Series A warrants at an exercise price of $0.60 per share under the warrant agreement. In accordance with terms of the warrant agreement, after taking into account the shares withheld to satisfy the cashless exercise option, the Company issued 3,806,243 shares of common stock. As of March 31, 2019, there were 2,718,750 Series A warrants outstanding and there are no Series B warrants outstanding. Of the total Series A warrants outstanding, 2,178,750 Series A warrants were issued with an exercise price of $2.55 per share of common stock, and have an expiration date of October 25, 2021, and 540,000 Series A warrants with anti-dilution provisions were issued with an initial exercise price of $1.34 per share of common stock, and have an expiration date of April 22, 2021. As of March 31, 2019, the 540,000 Series A warrants with anti-dilution provisions had an exercise price of $0.57 per share of common stock. On February 4, 2019, the Company sold to Goldman Sachs & Co. LLC (the “Holder”), a Purchase Warrant for Common Shares (the “Warrant”) pursuant to which the Holder may purchase shares of the Company’s common stock, par value $0.001 per share (the “Common Shares”) in an aggregate amount of up 4,046,337 shares (the “Warrant Shares”). The Warrant was sold to the Holder at a purchase price of $150,000, in a private placement exempt from registration under the Securities Act. The Warrant may be exercised by the Holder at any time after August 4, 2019 at an exercise price equal to $0.8859 and will expire on February 4, 2024. The Warrant contains standard adjustment provisions in the event of additional stock issuances below the exercise price of the warrant, stock splits, combinations, rights offerings and similar transactions. The value of the Warrant was $2.3 million, and has been classified as an equity instrument in additional paid in capital in our consolidated balance sheets. The value of the Warrant was determined using the Black-Scholes Option Pricing model using the following assumptions: Fiscal Year Ended March 31, 2019 Risk-free interest rate 2.5% Contractual term 5 years Expected volatility 76% |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Mar. 31, 2019 | |
Fair Value Measurements | |
Fair Value Measurements | 10. Fair Value Measurements The FASB has established a framework for measuring fair value in generally accepted accounting principles. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are described as follows: Level 1. Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets. Level 2. Inputs to the valuation methodology include: · Quoted prices for similar assets or liabilities in active markets · Quoted prices for identical or similar assets or liabilities in inactive markets · Inputs other than quoted prices that are observable for the asset or liability · Inputs that are derived principally from or corroborated by observable market data by correlation or other means If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability. Level 3. Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. The table below presents our assets and liabilities that are measured at fair value on a recurring basis during Fiscal 2018 and are categorized using the fair value hierarchy (in thousands): Fair Value Measurements at March 31, 2018 Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Restricted cash $ 5,000 $ 5,000 $ — $ — Basis for Valuation The carrying values reported in the consolidated balance sheets for cash and cash equivalents, restricted cash, accounts receivable and accounts payable approximate fair values because of the immediate or short-term maturities of these financial instruments. As the Company’s obligations under the Credit Facility are based on adjustable market interest rates, the Company has determined that the carrying value approximates the fair value. The term note payable has been recorded net of a discount based on the fair value of the associated warrant and capitalized debt issuance costs. The carrying values and estimated fair values of these obligations are as follows (in thousands): As of As of March 31, 2019 March 31, 2018 Carrying Estimated Carrying Estimated Value Fair Value Value Fair Value Term note payable $ 27,099 $ 30,000 $ — $ — Obligations under the credit facility $ — $ — $ 8,527 $ 8,527 |
Revolving Credit Facility
Revolving Credit Facility | 12 Months Ended |
Mar. 31, 2019 | |
Revolving Credit Facility | |
Revolving Credit Facility | 11. Revolving Credit Facility On June 2, 2017, the Company, entered into two secured credit facilities (the “Bridge Bank Credit Agreements”) with Western Alliance Bank through its Bridge Bank division (“Bridge Bank”), with credit support provided by the Export-Import Bank of the United States through its working capital guarantee program. Under the terms of the Bridge Bank Credit Agreements, the Company may borrow up to $12.0 million on a revolving basis depending on, among other factors, the amount of its eligible inventory and accounts receivable. The Bridge Bank Credit Agreements are for a two-year period ending June 2, 2019. Interest expense related to the former credit facility during the fiscal year ended March 31, 2018 was $0.2 million, which includes $0.1 million in amortization of deferred financing costs. Total borrowings, letter of credit obligations and the then aggregate committed amount of cash management services under the Bridge Bank Credit Agreements may not exceed 85% of the sum of unrestricted cash and the amount of cash collateral held at Bridge Bank. As a condition of the Bridge Bank Credit Agreements, the Company has restricted $5.0 million of cash equivalents as additional security for the credit facility. Borrowings under the Bridge Bank Credit Agreements will bear per annum interest at the prime rate plus 1.5 percent, subject to increase during the occurrence of an event of default. Obligations under the Bridge Bank Credit Agreements are secured by all of the Company’s assets, including intellectual property and general intangibles. The Company has incurred $0.2 million in origination fees. These fees have been recorded under the caption “Prepaid expenses and other current assets” in the accompanying condensed consolidated balance sheets and amortized to interest expense. As of March 31, 2018, $8.5 million in borrowings were outstanding and $3.5 million borrowings available under the credit facility. Interest expense related to the credit facility during the fiscal year ended March 31, 2018 was $0.4 million, which includes $0.1 million in amortization of deferred financing costs. The Company’s borrowing rate was 6.3% per annum at March 31, 2018. On June 1, 2018, the Company entered into a letter agreement (the “Letter Agreement”) with Bridge Bank. The Letter Agreement extended the maturity date under the Company’s Bridge Bank Credit Agreements from June 2, 2019 to June 2, 2021. The Letter Agreement increased the line of credit to an amount up to $15.0 million from $12.0 million. Additionally, the Letter Agreement reduced the per annum interest rate from prime rate plus 1.50 percent to 1.00 percent; the facility fee from 0.625% to 0.5%, and the cash collateral held at Bridge Bank from 42% to 40%, which is $6.0 million of the $15.0 million facility, as well as eliminated the early termination fee. On February 4, 2019, we entered into a Note Purchase Agreement (See Note 12—Term Note Payable) and at that time the Credit Facility was paid in full. There were no amounts outstanding under the Credit Facility as of March 31, 2019. Interest expense related to the credit facility during the fiscal year ended March 31, 2019 was $0.7 million, which includes $0.1 million in amortization of deferred financing costs, and $0.2 million of accelerated amortization related to the pay-off and closing of the Credit Facility. The Bridge Bank Credit Agreements include affirmative covenants as well as negative covenants that prohibit a variety of actions without Bridge Bank’s consent, including covenants that limit the Company’s ability to (a) incur or guarantee debt, (b) create liens, (c) enter into any merger, recapitalization or similar transaction or purchase all or substantially all of the assets or stock of another entity, or (d) sell, assign, transfer or otherwise dispose of the Company’s assets. The financial covenants of the domestic credit agreement with Bridge Bank (the “Domestic Facility”) requires the Company not to exceed specified levels of losses relative to its financial model and the outstanding line of credit advances may not exceed 85% of the sum of unrestricted cash and the amount of cash collateral held at Bridge Bank. The Domestic Facility also defines an event of default to include a material adverse effect on the Company’s business. An event of default for this or any other reason, if not waived, could have a material adverse effect on the Company. As of March 31, 2018 the Company was in compliance with the covenants contained in the Bridge Bank Credit Agreements. Upon closing with Goldman Sachs Specialty Lending Holdings, Inc., our Bridge Bank Credit Agreements with Bridge Bank were paid off in full. |
Term Note Payable
Term Note Payable | 12 Months Ended |
Mar. 31, 2019 | |
Term Note Payable | |
Term Note Payable | 12. Term Note Payable On February 4, 2019 (the “Closing Date”), we entered into a Note Purchase Agreement (the “Note Purchase Agreement”), by and among us, certain subsidiaries of us party thereto as guarantors, Goldman Sachs Specialty Lending Holdings, Inc. and any other purchasers party thereto from time to time (collectively, the “Purchaser”) and Goldman Sachs Specialty Lending Holdings, Inc. Under the Note Purchase Agreement, we sold to the Purchaser $30.0 million aggregate principal amount of senior secured notes (the “Notes”), which bear interest at a rate of 13.0% per annum and payable quarterly on March 31, June 30, September 30 and December 31 of each year until maturity. The first interest payment on the Notes will be on March 31, 2019. The entire principal amount of the Notes is due and payable on February 4, 2022 (the “Maturity Date”). The Notes do not amortize and the entire principal balance is due in a single payment on the Maturity Date. As of March 31, 2019, $30.0 million in borrowings were outstanding under the three-year term note. Obligations under the Note Purchase Agreement are secured by all of our assets, including intellectual property and general intangibles. The Note Purchase Agreement contains customary covenants, including, among others, covenants that restrict our ability to incur debt, grant liens, make certain investments and acquisitions, pay dividends, repurchase equity interests, repay certain debt, amend certain contracts, enter into affiliate transactions and asset sales or make certain equity issuances (including equity issuances that would cause an ownership change within the meaning of Section 382 of the Internal Revenue Code), and covenants that require us to, among other things, provide annual, quarterly and monthly financial statements, together with related compliance certificates, maintain its property in good repair, maintain insurance and comply with applicable laws. The financial covenants of the Note Purchase Agreement requires the Company not to exceed specified levels of losses relative to its financial model, beginning with the fiscal quarter ending September 30, 2020. Additionally, we shall not permit our minimum consolidated liquidity, which consists of our cash and cash equivalents, to be less than $12.0 million through February 4, 2020, and $9.0 million thereafter. As of March 31, 2019, the Company was in compliance with the covenants contained in the Note Purchase Agreement. The three-year term note has been recorded net of a discount based on the fair value of the associated common stock warrants and deferred financing costs totaling $3.2 million. Amortization of the debt discount and deferred costs was $0.2 million for the fiscal year ended March 31, 2019, based on an effective interest rate, and has been recorded as interest expense in the consolidated statements of operations. Interest expense related to the term note payable during the fiscal year ended March 31, 2019 was $0.8 million, which includes $0.2 million in amortization of deferred financing costs. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | 13. Commitments and Contingencies Purchase Commitments As of March 31, 2019, the Company had firm commitments to purchase inventories of approximately $33.4 million through Fiscal 2020. Certain inventory delivery dates and related payments are not scheduled; therefore amounts under these firm purchase commitments will be payable upon the receipt of the related inventories. Lease Commitments The Company leases offices and manufacturing facilities under various non‑cancelable operating leases expiring at various times through the fiscal year ending July 2, 2025. All of the leases require the Company to pay maintenance, insurance and property taxes. The lease agreements for primary office and manufacturing facilities provide for rent escalation over the lease term and renewal options for five‑year periods. Rent expense is recognized on a straight-line basis over the term of the lease. The difference between rent expense recorded and the amount paid is credited or charged to deferred rent, which is included in other long‑term liabilities in the accompanying consolidated balance sheets. The balance of deferred rent was approximately $0.3 million and $0.4 million as of March 31, 2019 and 2018, respectively. Rent expense was approximately $2.3 million and $2.2 million for the fiscal years ended March 31, 2019 and 2018, respectively. On July 31, 2014, the Company and Northpark Industrial (“Northpark”) entered into a Third Amendment to Lease (the “Third Amendment”) to amend the Standard Industrial/Commercial Single-Tenant Lease - Net, dated December 1, 1999, as amended (the “Lease”), pursuant to which the Company leases the premises located at 21211 Nordhoff Street, Chatsworth, California. During the fiscal year ended March 31, 2019, the Company consolidated its operations and offices into its leased premises located in Van Nuys, California. The Third Amendment extended the term of the Lease for a period of two months commencing on August 1, 2014 and ending on September 30, 2014 and set the monthly base rent payable by the Company under the Lease at $81,001 per month. On September 30, 2014, the Company and Northpark entered into a Fourth Amendment to Lease (the “Fourth Amendment”) to amend the Lease by extending the term of the Lease for a period of five years commencing on October 1, 2014 and ending on September 30, 2019. The Fourth Amendment also adjusts the monthly base rent payable by the Company under the Lease to the following: $39,500 per month from October 1, 2014 through November 30, 2014; $79,000 per month from December 1, 2014 through September 30, 2015; $81,225 per month from October 1, 2015 through September 30, 2016; $83,600 per month from October 1, 2016 through September 30, 2017; $86,000 per month from October 1, 2017 through September 30, 2018; and $88,500 per month from October 1, 2018 through September 30, 2019. The Fourth Amendment also provides the Company with an option to extend the Lease by an additional five-year term following the expiration of the term of the Lease as amended by the Fourth Amendment and provides that Northpark will perform certain capital improvements to the leased premises’ HVAC system. On March 28, 2013, the Company and Prologis, L.P., formerly known as AMB Property, L.P., entered into a third amendment (the “Van Nuys Third Amendment”) to the Lease Agreement dated September 25, 2000, for leased premises located at 16640 Stagg Street, Van Nuys, California for use as primary office space, engineering testing and manufacturing. The Van Nuys Third Amendment extends the term of the Lease Agreement from December 31, 2012 to December 31, 2017. The Van Nuys Third Amendment also adjusts the monthly base rent payable by the Company under the Lease Agreement to the following: $60,000 per month from January 1, 2013 through June 30, 2015 and $65,000 per month from July 1, 2015 through December 31, 2017. On June 7, 2017 the Company and Prologis, L.P entered into a Fourth Amendment to Lease (the “Van Nuys Fourth Amendment”) to amend the Lease by extending the term of the Lease for a period of sixty-two (62) months commencing on December 31, 2017 to February 28, 2023. The Van Nuys Fourth Amendment also adjusts the monthly base rent payable by the Company under the Lease Agreement to the following: $0 per month from January 1, 2018 through February 28, 2018; $66,846 per month from March 1, 2018 through December 31, 2018; $68,852 per month from January 1, 2019 through December 31, 2019; $70,917 per month from January 1, 2020 through December 31, 2020; $73,045 per month from January 1, 2021 through December 31, 2021; $75,236 per month from January 1, 2022 through December 31, 2022; and $77,493 per month from January 1, 2023 through February 28, 2023. The Van Nuys Fourth Amendment also provides the Company with an option to extend the Lease by an additional five year term following the expiration of the term of the Lease as amended by the Lease Amendment and provides that Prologis, L.P. will contribute a tenant improvement allowance toward the Company’s approved alterations to the premises. At March 31, 2019, the Company’s minimum commitments under non-cancelable operating leases were as follows (in thousands): Operating Year Ending March 31, Leases 2020 $ 1,464 2021 958 2022 984 2023 933 2024 101 Thereafter 126 Total minimum lease payments $ 4,566 Other Commitments The Company has agreements with certain of its distributors requiring that if the Company renders parts obsolete in inventories the distributors own and hold in support of their obligations to serve fielded microturbines, then the Company is required to replace the affected stock at no cost to the distributors. While the Company has never incurred costs or obligations for these types of replacements, it is possible that future changes in the Company’s product technology could result and yield costs to the Company if significant amounts of inventory are held at distributors. As of March 31, 2019, no significant inventories were held at distributors. Legal Matters Federal Securities Class Action Two putative securities class action complaints were filed against the Company and certain of its current and former officers in the United States District Court for the Central District of California under the following captions: David Kinney, etc. v. Capstone Turbine, et al., No. 2:15-CV-08914 on November 16, 2015 (the “Kinney Complaint”) and Kevin M. Grooms, etc. v. Capstone Turbine, et al., No. 2:15-CV-09155 on December 18, 2015 (the “Grooms Complaint”). The putative class in the Kinney Complaint is comprised of all purchasers of the Company’s securities between November 7, 2013 and November 5, 2015. The Kinney Complaint alleges material misrepresentations and omissions in public statements regarding BPC and the likelihood that BPC would not be able to fulfill many legal and financial obligations to the Company. The Kinney Complaint also alleges that the Company’s financial statements were not appropriately adjusted in light of this situation and were not maintained in accordance with GAAP, and that the Company lacked adequate internal controls over accounting. The Kinney Complaint alleges that these public statements and accounting irregularities constituted violations by all named defendants of Section 10(b) of the Exchange Act, and Rule 10b-5 thereunder, as well as violations of Section 20(a) of the Exchange Act by the individual defendants. The Grooms Complaint makes allegations and claims that are substantially identical to those in the Kinney Complaint, and both complaints seek compensatory damages of an undisclosed amount. On January 16, 2016, several shareholders filed motions to consolidate the Kinney and Grooms actions and for appointment as lead plaintiff. On February 29, 2016, the Court granted the motions to consolidate, and appointed a lead plaintiff. On May 6, 2016, a Consolidated Amended Complaint with allegations and claims substantially identical to those of the Kinney Complaint was filed in the consolidated action. The putative class period in the Consolidated Amended Complaint is June 12, 2014 to November 5, 2015. Defendants filed a motion to dismiss the Consolidated Amended Complaint on June 17, 2016. On March 10, 2017, the Court issued an order granting Defendants’ motion to dismiss in its entirety with leave to amend. Plaintiffs filed an amended complaint on April 28, 2017. On February 9, 2018, the Court issued an Order denying Defendants’ motion to dismiss. On March 30, 2018, Defendants filed an answer to the Consolidated Amended Complaint. On May 17, 2018, the Court issued a scheduling order setting a trial date of March 17, 2020. On June 26, 2018, the Court entered an order vacating all deadlines through the end of October 2018 and temporarily staying formal discovery and other proceedings to allow the parties time to conduct a mediation. The parties participated in mediation on September 24, 2018, which did not result in a settlement. On November 16, 2018, after further settlement discussions, the parties advised the Court that they had reached an agreement in principle to settle the action in its entirety. The agreement in principle is subject to several conditions, including the execution of a stipulation of settlement that is satisfactory to all parties, and preliminary and final approval from the court, among other things. Plaintiffs filed a motion seeking preliminary approval of the proposed settlement on April 12, 2019, and filed supplementary declarations in support of the motion on May 2, 2019. A hearing on the motion for preliminary approval of the settlement is scheduled for May 17, 2019. If the settlement is finalized and approved by the Court, the Company’s insurance carrier will fund the settlement amount. We have not recorded any liability as of March 31, 2019 since any potential loss is not considered material as our insurance carrier will fund the settlement amount. Federal Individual Securities Action An individual securities complaint was filed against us, our Chief Executive Officer, and additional unidentified defendants in the United States District Court for the Central District of California under the following caption: FiveT Investment Management LTD, et al., v. Capstone Turbine, et al., No. 2:18-CV-03512 on April 25, 2018. The lawsuit alleges material misrepresentations and omissions regarding our revenue, sales, and operations because of alleged improper revenue recognition and backlog calculations related to BPC. The lawsuit alleged that these statements constituted violations by all named defendants of Section 10(b) of the Exchange Act, and Rule 10b-5 thereunder, as well as violations of Section 20(a) of the Exchange Act by the individual defendants. The complaint also asserted claims against all named defendants for fraud, negligent misrepresentation, violations of California Civil Code sections 1709 and 1710, and California Corporations Code sections 25400 and 25401. Additionally, the complaint asserted a cause of action against the individual defendants for breach of fiduciary duty. It demanded compensatory damages for the amount of damages allegedly suffered, pre-judgment and post-judgment interest, and fees. On June 29, 2018, the plaintiffs filed an Amended Complaint for Common Law Fraud and Negligent Misrepresentation. The Amended Complaint asserted claims for common law fraud and negligent misrepresentation, against the Company, Mr. Jamison, and unidentified individual defendants. The Amended Complaint demanded damages in an unspecified amount, plus pre-judgment and post-judgment interest and fees. Defendants filed their answer to the Amended Complaint on August 17, 2018. The parties participated in a mediation on September 24, 2018. The mediation did not result in a settlement. On October 12, 2018, the plaintiffs filed a motion for leave to amend their complaint, seeking to reinstate the cause of action for violation of California Civil Code section 25401. On November 29, 2018, the Court granted plaintiffs’ motion for leave to amend and plaintiffs filed their Second Amended Complaint, which asserted claims for common law fraud, negligent misrepresentation, and violation of California Civil Code section 25401 against the Company, Mr. Jamison, and unidentified individual defendants. On December 20, 2018, defendants filed their answer to the Second Amended Complaint. On June 6, 2019, the parties reached a confidential settlement of the action. We have not recorded any liability as of March 31, 2019 as our insurance carrier will fund the settlement amount. State Derivative Lawsuits — California On February 18, 2016, a purported shareholder derivative action was filed in Los Angeles Superior Court in the State of California against us and certain of our current and former officers and directors under the following caption: Stesiak v. Jamison, et al., No. BC610782. The lawsuit alleges that certain of our current and former officers and directors knew or should have known that BPC would be unable to fulfill its obligations to us, but allowed us to make false and misleading statements regarding BPC and our financial condition. The complaint also alleges that the defendants failed to timely adjust our account receivables and backlog to reflect BPC’s inability to pay us. The complaint asserts causes of action for breach of fiduciary duty and unjust enrichment. It demands damages for the amount of damage sustained by us as a result of the individual defendants’ alleged breach of fiduciary duties and unjust enrichment, that we institute corporate governance reforms, and disgorgement from the individual defendants. On May 5, 2016, the parties filed a stipulation and proposed order seeking to stay this action until such time as the defendants’ motion(s) to dismiss the federal securities class action are either granted with prejudice or denied in whole or in part. On May 10, 2016, the Court entered that proposed order. On March 9, 2018, following the Court’s order denying Defendants’ motion to dismiss in the federal securities class action, the parties filed a stipulation and proposed order seeking to stay this action until the close of fact discovery in the federal securities class action. On March 20, 2018, the Court entered that proposed order. A status conference is scheduled for July 29, 2019. On June 8, 2016, a purported shareholder derivative action entitled Velma Kilpatrick v. Simon, et al., No. BC623167, was filed in Los Angeles Superior Court in the State of California against us and certain of our current and former officers and directors. The complaint alleges that certain of our current and former officers and directors knew or should have known that BPC would be unable to fulfill its obligations to us, but allowed us to make false and misleading statements regarding BPC and our financial condition. The complaint also alleges that the defendants failed to timely adjust our account receivables and backlog to reflect BPC’s inability to pay us. The complaint asserts causes of action for breach of fiduciary duty. It demands damages for the amount of damage sustained by us as a result of the individual defendants’ alleged breach of fiduciary duties, and that we institute corporate governance reforms. On August 23, 2016, the parties filed a stipulation and proposed order seeking to stay this action until such time as the defendants’ motion(s) to dismiss the federal securities class action are either granted with prejudice or denied in whole or in part. On March 9, 2018, following the Court’s order denying Defendants’ motion to dismiss in the federal securities class action, the parties filed a stipulation and proposed order seeking to stay this action until the close of fact discovery in the federal securities class action. On March 20, 2018 the Court entered that proposed order. A status conference is scheduled for July 29, 2019. The parties in both of the above state derivative lawsuits participated in a mediation held on September 24, 2018. The parties did not reach a settlement on the day of the mediation and negotiations are ongoing. Federal Derivative Lawsuits On March 7, 2016, a purported shareholder derivative action was filed in the United States District Court for the Central District of California against us and certain of our current and former officers and directors under the following caption: Haber v. Jamison, et al., No. CV16-01569-DMG (RAOx). The lawsuit alleges that certain of our current and former officers and directors knew or should have known that BPC would be unable to fulfill its obligations to us, but allowed us to make false and misleading statements regarding BPC and our financial condition. The complaint asserts a cause of action for breach of fiduciary duty. It demands damages for the amount of damage sustained by us as a result of the individual defendants’ alleged breach of fiduciary duties, and equitable relief, including that we institute appropriate corporate governance reforms. On May 11, 2016, the parties filed a stipulation and proposed order seeking to stay this action until such time as the defendants’ motion(s) to dismiss the federal securities class action are either granted with prejudice or denied in whole or in part. On May 13, 2016, the Court entered that proposed order. On July 12, 2016 and July 18, 2016, respectively, two additional purported shareholder derivative actions were filed in the United States District Court for the Central District of California against us and certain of our current and former officers and directors, under the caption Tuttle v. Atkinson, et al., No. CV16-05127, and Boll v. Jamison, et al., No. CV16-5282, respectively. The lawsuits allege that certain of our current and former officers and directors knew or should have known that BPC would be unable to fulfill its obligations to us, but allowed us to make false and misleading statements regarding BPC and our financial condition. The Tuttle complaint asserts causes of action for breach of fiduciary duty, gross mismanagement, and unjust enrichment, and the Boll complaint asserts causes of action for breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets. Both complaints demand damages sustained by us as a result of the individual defendants’ alleged breaches of fiduciary duties, and equitable relief, including that we institute appropriate corporate governance reforms. The federal derivative actions were stayed until such time as the defendants’ motion(s) to dismiss the federal securities class action are either granted with prejudice or denied in whole or in part. On March 9, 2018, following the Court’s order denying Defendants’ motion to dismiss in the federal securities class action, the parties filed a stipulation and proposed order seeking to stay this action until the close of fact discovery in the federal securities class action. On March 13, 2018, the Court granted the parties’ stipulation. The parties in both of the above federal derivative lawsuits participated in a mediation held on September 24, 2018. The parties did not reach a settlement on the day of the mediation and negotiations are ongoing. Shareholder Demand By letter dated July 7, 2017 (the “Shareholder Demand”), Andre Rosowsky demanded that the Board of Directors take action to remedy purported breaches of fiduciary duties allegedly related to the claims asserted in the above-discussed securities class action and derivative actions. On July 25, 2017, the Company acknowledged receipt of the Shareholder Demand and requested information from Mr. Rosowsky sufficient to show that he had standing to make the demand. The Board of Directors formed a committee to evaluate the Shareholder Demand in anticipation of receiving the requested information from Mr. Rosowsky. Mr. Rosowsky has failed to respond to the request for information and therefore the Company believes that Mr. Rosowsky abandoned the Shareholder Demand. Capstone Turbine Corporation v. Regatta Solutions, Inc. On August 23, 2018, we initiated arbitration proceedings against its former distributor, Regatta Solutions, Inc. (“Regatta”), with the American Arbitration Association, under the following caption: Capstone Turbine Corp. v. Regatta Solutions, Inc., Case No. 01-18-0003-0860 (the “Capstone-Regatta Arbitration”). We have alleged claims against Regatta for breach of contract and unjust enrichment relating to the parties’ prior distributor relationship, which terminated at the end of March of 2018, and the related wind-down agreement between the parties. As remedies for these claims, we are seeking compensatory, consequential, and punitive damages, along with declaratory relief and attorney’s fees, interest, and costs. On October 18, 2018, Regatta filed its answer and cross-claims in the Capstone-Regatta Arbitration. In its cross-claims, Regatta has asserted claims for breach of contract, intentional interference with prospective economic advantage, fraud, and intentional interference with contractual relations, relating to the parties’ agreement to wind-down relations and Regatta’s purported sales efforts in California. As remedies for these alleged claims, Regatta is seeking no less than $1.5 million in general and compensatory damages, along with punitive and exemplary damages, as well as attorney’s fees and costs. We have filed and served an answering statement denying Regatta’s counterclaims and asserting several affirmative defenses. Also on October 18, 2018, Regatta filed a lawsuit in the Superior Court of the State of California, County of Orange, alleging two counts of fraud, and one count of interference with contractual relations, individually against Mr. James Crouse, Executive Vice President of Sales for us, arising out of the same allegations made in Regatta’s counterclaim. As remedies for these alleged claims, Regatta again sought no less than $1.5 million in general and compensatory damages, along with punitive and exemplary damages, as well as attorney’s fees and costs. The case was filed under the caption Regatta Solutions, Inc., v. Jim Crouse, et. al., Case No. 30-2018-01026571-CU-FR-CJC. On December 14, 2018, Regatta stipulated and agreed to arbitrate its claims against Mr. James Crouse and dismissed him from the Superior Court action. On January 16, 2019, the parties participated in a mediation that did not resolve the dispute. The parties continued their settlement discussions and held a follow-on mediation on April 24, 2019 at which point the parties did come to a resolution of the matter. The parties are currently engaged in drafting a more formal settlement agreement that upon execution will require the respective matters to be dismissed. The Company has not recorded any liability as of March 31, 2019, since any potential loss is not probable or reasonably estimable given the current status of the proceedings. Capstone Turbine Corporation v. Energy Systems, Inc. On August 17, 2018 Capstone initiated arbitration proceedings against its former distributor, Energy Systems of Caribbean, Inc. (“Energy Systems”) by seeking declaratory relief that its action in terminating the distributorship was justified under the law. The claim was filed with the American Arbitration Association under the following caption: Capstone Turbine Corp. v. Energy Systems of Caribbean, Inc., Case No. 01-18-0003-1307. As remedies for these claims, we are seeking declaratory relief and attorney’s fees, interest and costs. On August 22, 2018, Energy Systems filed a claim against us in Puerto Rico alleging Breach of Distribution Contract under Law No. 75 of June 24, 1964, as amended, 10 l.p.r.a. §§ 278-278. The case was filed under the caption Energy Systems of Caribbean, Inc., v. Capstone Turbine Corporation, CIVIL NO. SJ2018cv06543 (904). As remedies for these alleged claims, Energy Systems seeks actual damages, injunctive relief, attorney’s fees and costs. This matter was subsequently removed to the United States District Court for the District of Puerto Rico based on diversity jurisdiction (Case No. 3:18-cv-01611). The parties have since stipulated to a stay of both the federal litigation and arbitration so that the parties may pursue settlement. The parties entered into settlement discussions and on April 29, 2019 participated in mediation to resolve the dispute. The mediation was successful and the parties are currently drafting a more formal settlement agreement that upon execution will require the respective matters to be dismissed. We have not recorded any liability as of March 31, 2019 since any potential loss is not considered material. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Mar. 31, 2019 | |
Employee Benefit Plans | |
Employee Benefit Plans | 14. Employee Benefit Plans The Company maintains a defined contribution 401(k) profit‑sharing plan in which all employees are eligible to participate. Employees may contribute up to Internal Revenue Service annual limits or, if less, 90% of their eligible compensation. Employees are fully vested in their contributions to the plan. The plan also provides for both Company matching and discretionary contributions, which are determined by the Board of Directors. The Company has been matching 50 cents on the dollar up to 6% of the employee’s contributions since February 2019. Prior to that date, the Company had been matching 50 cents on the dollar up to 4% of the employee’s contributions since October 2006. There were no Company contributions to the plan prior to October 2006. The Company’s match vests 25% a year over four years starting from the employee’s hire date. The Company recorded expense of approximately $0.3 million and $0.2 million for the fiscal year ended March 31, 2019 and 2018, respectively. |
Other Current Liabilities
Other Current Liabilities | 12 Months Ended |
Mar. 31, 2019 | |
Other Current Liabilities | |
Other Current Liabilities | 15. Other Current Liabilities The Company is a party to a Development and License Agreement with Carrier Corporation (“Carrier”) regarding the payment of royalties on the sale of each of the Company’s 200 kilowatt (“C200”) microturbines. During the three months ended September 30, 2013, we reached our repayment threshold level and the fixed rate royalty was reduced by 50%. On July 25, 2018, the Company and Carrier entered into a Second Amendment to the Development and License Agreement (“Second Amendment”) whereby the Company agreed to pay Carrier approximately $3.0 million to conclude the Company’s current royalty obligation under the Development and License Agreement, dated as of September 4, 2007, as amended (“Development Agreement”) and release the Company from any future royalty payment obligations. The Second Amendment also removed non-compete provisions from the Development Agreement, allowing the Company to design market or sell its C200 System in conjunction with any energy system and compete with Carrier products in the CCHP market. Carrier earned $0.4 million and $0.9 million in royalties for C200 and C1000 Series system sales during each of the fiscal years ended March 31, 2019 and 2018, respectively. There were no unpaid, earned royalties as of March 31, 2019. Earned royalties of $0.2 million were unpaid as of March 31, 2018 and are included in accrued expenses in the accompanying balance sheets. On September 19, 2018, the Company paid in full the negotiated royalty settlement of $3.0 million to Carrier, and as such, there is no further royalty obligation to Carrier. The prepaid royalty of $3.0 million has been recorded under the captions “Prepaid expenses and other current assets” and “Other assets” in the accompanying condensed consolidated balance sheets and will be amortized in the accompanying condensed consolidated statement of operations over a 15-year amortization period through September 2033 using an effective royalty rate. A 15-year amortization period is the minimum expected life cycle of the current generation of product. The effective royalty rate is calculated as the prepaid royalty settlement divided by total projected C200 System units over the 15-year amortization period. On a quarterly basis, the Company will perform a re-forecast of C200 System unit shipments, to see if a change needs to be made to the effective royalty rate. Accordingly, if the Company’s future projections change, its effective royalty rates would change, which could affect the amount and timing of royalty expense the Company recognizes. If impairment exists, then the prepaid royalty asset could be written down to fair value. Prepaid royalties are classified as current assets to the extent that such amounts will be recognized in the Company’s condensed consolidated statements of operations within the next 12 months. The current and long-term portions of prepaid royalties, included in other current assets and other assets, respectively, consisted of (in thousands): March 31, 2019 Other current assets $ 124 Other assets 2,768 Royalty-related assets $ 2,892 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Mar. 31, 2019 | |
Subsequent Events | |
Subsequent Events | 16. Subsequent Events The Company has evaluated all subsequent events through the filing date of this Form 10-K with the SEC, to ensure that this filing includes appropriate disclosure of events both recognized in the financial statements as of March 31, 2019, and events which occurred subsequently but were not recognized in the financial statements. There were no subsequent events which required recognition, adjustment to or disclosure in the financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Mar. 31, 2019 | |
Summary of Significant Accounting Policies | |
Cash Equivalents | Cash Equivalents The Company considers only those investments that are highly liquid and readily convertible to cash with original maturities of three months or less at date of purchase as cash equivalents. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying value of certain financial instruments, including cash equivalents, accounts receivable, accounts payable, revolving credit facility and notes payable approximate fair market value based on their short‑term nature. See Note 10—Fair Value Measurements, for disclosure regarding the fair value of other financial instruments. |
Accounts Receivable | Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and are typically non‑interest bearing. The Company maintains allowances for estimated losses resulting from the inability of customers to make required payments and other accounts receivable allowances. Changes in the accounts receivable allowances are as follows as of March 31, 2019 and 2018 (in thousands): Balance, March 31, 2017 $ 6,845 Additions charged to costs and expenses (1,099) Bad debt write-off (2) Balance, March 31, 2018 $ 5,744 Additions charged to costs and expenses (345) Bad debt write-off (101) Balance, March 31, 2019 $ 5,298 |
Inventories | Inventories The Company values inventories at the lower of cost (determined on a first in first out (“FIFO”) basis) or net realizable value. The composition of inventory is routinely evaluated to identify slow-moving, excess, obsolete or otherwise impaired inventories. Inventories identified as impaired are evaluated to determine if write-downs are required. Included in the assessment is a review for obsolescence as a result of engineering changes in the Company’s products. All inventories expected to be used in more than one year are classified as long-term. |
Depreciation and Amortization | Depreciation and Amortization Depreciation and amortization are provided for using the straight-line method over the estimated useful lives of the related assets, ranging from two to ten years. Leasehold improvements are amortized over the lease term or the estimated useful lives of the assets, whichever is shorter. Intangible assets that have finite useful lives are amortized over their estimated useful lives using the straight-line method. |
Long-Lived Assets | Long-Lived Assets The Company reviews the recoverability of long-lived assets, including intangible assets with finite lives, whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. If the expected future cash flows from the use of such assets (undiscounted and without interest charges) are less than the carrying value, the Company may be required to record a write‑down, which is determined based on the difference between the carrying value of the assets and their estimated fair value. The Company performed an analysis as of March 31, 2019 and determined that no impairment was necessary. See Note 5—Intangible Assets. |
Deferred Revenue | Deferred Revenue Deferred revenue consists of deferred product and service revenue and customer deposits. Deferred revenue will be recognized when earned in accordance with the Company’s revenue recognition policy. The Company has the right to retain all or part of customer deposits under certain conditions. |
Revenue | Revenue On April 1, 2018, the Company adopted the new revenue standard ASU 2014-09 and applied it to all contracts using the modified retrospective method. The Company determined there was no change in applying the new revenue standard, therefore no adjustment to the opening balance of accumulated deficit was needed. The Company derives its revenues primarily from system sales, service contracts and professional services. Revenues are recognized when control of the systems and services is transferred to the Company’s customers in an amount that reflects the consideration it expects to be entitled to in exchange for those services. The Company determines revenue recognition through the following steps: · Identification of the contract, or contracts, with a customer · Identification of the performance obligations in the contract · Determination of the transaction price · Allocation of the transaction price to the performance obligations in the contract · Recognition of revenue when, or as, the Company satisfies a performance obligation The Company recognizes revenue when performance obligations identified under the terms of contracts with its customers are satisfied, which generally occurs, for systems, upon the transfer of control in accordance with the contractual terms and conditions of the sale. The majority of the Company’s revenue associated with systems is recognized at a point in time when the system is shipped to the customer. Revenue from service contracts and post-shipment performance obligations is recognized when or as those obligations are satisfied. The Company primarily offers assurance-type standard warranties that do not represent separate performance obligations and will separately offer and price extended warranties that are separate performance obligations for which the associated revenue is recognized over-time based on the extended warranty period. The Company records amounts billed to customers for reimbursement of shipping and handling costs within revenue. Shipping and handling costs associated with outbound freight after control over a system has transferred to a customer are accounted for as fulfillment costs and are included in cost of goods sold. Sales taxes and other usage-based taxes are excluded from revenue. Comprehensive Factory Protection Plan (“FPP”) service contracts require payment at the beginning of the contract period. Advance payments are not considered a significant financing component as they are typically received less than one year before the related performance obligations are satisfied. These payments are treated as a contract liability and are classified in deferred revenue in the Condensed Consolidated Balance Sheets. Once control transfers to the customer and the Company meets the revenue recognition criteria, the deferred revenue is recognized in the Condensed Consolidated Statement of Operations. The deferred revenue relating to the annual maintenance service contracts is recognized in the Condensed Consolidated Statement of Operations on a straight line basis over the expected term of the contract. Significant Judgments - Contracts with Multiple Performance Obligations The Company enters into contracts with its customers that often include promises to transfer multiple products, parts, accessories, FPP and services. A performance obligation is a promise in a contract with a customer to transfer products or services that are distinct. Determining whether products and services are distinct performance obligations that should be accounted for separately or combined as one unit of accounting may require significant judgment. Products, parts and accessories are distinct as such services are often sold separately. In determining whether FPP and service contracts are distinct, the Company considers the following factors for each FPP and services agreement: availability of the services from other vendors, the nature of the services, the timing of when the services contract was signed in comparison to the product delivery date and the contractual dependence of the product on the customer’s satisfaction with the professional services work. To date, the Company has concluded that all of the FPP and services contracts included in contracts with multiple performance obligations are distinct. The Company allocates the transaction price to each performance obligation on a relative standalone selling price (“SSP”) basis. The SSP is the price at which the Company would sell a promised product or service separately to a customer. Judgment is required to determine the SSP for each distinct performance obligation. The Company determines SSP by considering its overall pricing objectives and market conditions. Significant pricing practices taken into consideration include the Company’s discounting practices, the size and volume of the Company’s transactions, the customer demographic, the geographic area where systems and services are sold, price lists, its go-to-market strategy, historical sales and contract prices. The determination of SSP is made through consultation with and approval by the Company’s management, taking into consideration the go-to-market strategy. As the Company’s go-to-market strategies evolve, the Company may modify its pricing practices in the future, which could result in changes to SSP. In certain cases, the Company is able to establish SSP based on observable prices of products or services sold separately in comparable circumstances to similar customers. The Company uses a single amount to estimate SSP when it has observable prices. If SSP is not directly observable, for example when pricing is highly variable, the Company uses a range of SSP. The Company determines the SSP range using information that may include market conditions or other observable inputs. The Company typically has more than one SSP for individual products and services due to the stratification of those products and services by customer size and geography. Unsatisfied Performance Obligations The Company has elected the practical expedient to disclose only the value of unsatisfied performance obligations for contracts with an original expected length greater than one year. The majority of the Company’s revenues resulted from sales of inventoried systems with short periods of manufacture and delivery and thus are excluded from this disclosure. Practical Expedients We apply a practical expedient to expense costs as incurred for costs to obtain a contract when the amortization period would have been one year or less. These costs are recorded within sales and marketing expenses. |
Warranty | Warranty The Company provides for the estimated costs of warranties at the time revenue is recognized. The specific terms and conditions of those warranties vary depending upon the product sold and geography of sale. The Company’s product warranties generally start from the delivery date and continue for up to twenty-four months. Factors that affect the Company’s warranty obligation include product failure rates, anticipated hours of product operations and costs of repair or replacement in correcting product failures. These factors are estimates that may change based on new information that becomes available each period. Similarly, the Company also accrues the estimated costs to address reliability repairs on products no longer in warranty when, in the Company’s judgment, and in accordance with a specific plan developed by the Company, it is prudent to provide such repairs. The Company assesses the adequacy of recorded warranty liabilities quarterly and makes adjustments to the liability as necessary. When the Company has sufficient evidence that product changes are altering the historical failure occurrence rates, the impact of such changes is then taken into account in estimating future warranty liabilities. |
Research and Development ("R&D") | Research and Development (“R&D”) The Company accounts for grant distributions and development funding as offsets to R&D expenses and both are recorded as the related costs are incurred. There were no offsets to R&D during the fiscal year ended March 31, 2019 and 2018. |
Income Taxes | Income Taxes Deferred income tax assets and liabilities are computed for differences between the consolidated financial statement and income tax basis of assets and liabilities. Such deferred income tax asset and liability computations are based on enacted tax laws and rates applicable to periods in which the differences are expected to reverse. Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amounts expected to be realized. ASC Topic 740-10, Income Taxes , clarifies the accounting for uncertainty in income taxes recognized in our financial statements in accordance with accounting principles generally accepted in the United States of America, or GAAP. Income tax positions must meet a more-likely-than-not recognition threshold to be recognized. Income tax positions that previously failed to meet the more-likely-than-not threshold are recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax potions that no longer meet the more-likely-than-not threshold are derecognized in the first subsequent financial reporting period in which that threshold is not longer met. Our policy is to recognize interest and penalties accrued on any unrecognized tax benefits as interest and other expense, net in the statements of operations. |
Contingencies | Contingencies The Company records an estimated loss from a loss contingency when information available prior to issuance of its financial statements indicates that it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. |
Risk Concentrations | Risk Concentrations Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. At March 31, 2019, the majority of our cash balances were held at financial institutions located in California. The accounts at these institutions are insured by the Federal Deposit Insurance Corporation up to certain limits. Balances that exceed the insurance coverage aggregate to approximately $29.1 million as of March 31, 2019. The Company places its cash and cash equivalents with high credit quality institutions. The Company performs ongoing credit evaluations of its customers and maintains an allowance for potential credit losses. Sales to E‑Finity Distributed Generation, LLC (“E‑Finity”), one of the Company’s domestic distributors, accounted for 13% and 16% of the Company’s revenue for the fiscal years ended March 31, 2019 and 2018, respectively. Sales to Cal Microturbine (“CAL”), one of the Company’s domestic distributors, accounted for 12% of the Company’s revenue for the year ended March 31, 2019. Additionally, Reliable Secure Power Systems, (“RSP”), one of our domestic distributors and E-Finity, accounted for 14% and 10%, respectively, of net accounts receivable as of March 31, 2019. Serba Dinamik Sdn Bhd (“Serba”), one of the Company’s Malaysian distributors, E-Finity, and Supernova Energy Services SAS (“Supernova”), one of the Company’s Colombian distributors, accounted for 20%, 18% and 10%, respectively, of net accounts receivable as of March 31, 2018. On October 13, 2017, the Company entered into an Accounts Receivable Assignment Agreement (the “Assignment Agreement”) and Promissory Note (the “Note”) with Turbine International, LLC (“TI”). Pursuant to the terms of the Assignment Agreement, the Company agreed to assign to TI the right, title and interest to receivables owed to the Company from BPC Engineering, its former Russian distributor (“BPC”), upon TI’s payment to the Company of $2.5 million in three payments by February 1, 2018. The Company received payments from TI of approximately $1.0 million under the Assignment Agreement during Fiscal 2018, which was recorded as bad debt recovery. The receivables owed to the Company from BPC had a balance of $4.8 million as of March 31, 2019, and this balance was fully reserved. On October 13, 2017, the Company and Hispania Petroleum, S.A. (the “Guarantor”), entered into a Guaranty Agreement (the “Guaranty Agreement”) whereby the Guarantor guarantees TI’s obligations under the Agreement and Note. However, due to the Company’s limited business relationship with TI and the missed payments on the Assignment Agreement, the Company deferred recognition of the Assignment Agreement and Note until collectability is reasonably assured. In connection with the terms of the Note, the Company granted TI the sole distribution rights for its products and services in the Russian oil and gas sector. As a result of this appointment, TI agreed to pay the Company $3.8 million over a three-year period in 35 equal monthly installments starting in August 2018. On June 5, 2018, the Company entered into an amendment to the Assignment Agreement (the “Amended Assignment Agreement”) and the Note (the “Amended Note”) with TI. Pursuant to the terms of the Amended Assignment Agreement, the right, title and interest to receivables owed to the Company from BPC will be contingent upon TI’s payment to the Company of the remaining approximately $1.5 million in five payments by September 20, 2019. Under the terms of the Amended Note, TI agreed to pay the Company $3.8 million over a three-year period in 13 equal quarterly installments starting in December 20, 2019. As of March 31, 2019, the right, title and interest to the accounts receivables owed to the Company from BPC had not been assigned to TI, as TI had not yet made all payments as required under the Amended Assignment Agreement. The payment of $0.4 million, due March 20, 2019 under the Amended Assignment Agreement, has not been received at the date of this filing. The Company recorded bad debt recoveries of approximately $0.3 million and $1.1 million for the fiscal years ended March 31, 2019 and 2018, respectively. As of March 31, 2019, the Company collected cumulatively approximately $1.8 million from BPC on their previously reserved accounts receivable. Additionally, the Company collected approximately $1.5 million from TI, under the terms of the Assignment Agreement. The remaining balance is $4.8 million as of March 31, 2019 and this balance was fully reserved. Certain components of the Company’s products are available from a limited number of suppliers. An interruption in supply could cause a delay in manufacturing, which would affect operating results adversely. |
Estimates and Assumptions | Estimates and Assumptions The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates include accounting for accounts receivable allowances, stock‑based compensation, inventory write‑downs, valuation of long‑lived assets including intangible assets with finite lives, product warranties, income taxes and other contingencies. Actual results could differ from those estimates. |
Net Loss Per Common Share | Net Loss Per Common Share Basic loss per common share is computed using the weighted‑average number of common shares outstanding for the period. Diluted loss per share is also computed without consideration to potentially dilutive instruments because the Company incurred losses which would make such instruments antidilutive. Outstanding stock options at March 31, 2019 and 2018 were 0.2 million. Outstanding restricted stock units at March 31, 2019 and 2018 were 2.4 million and 2.0 million, respectively. As of March 31, 2019 and 2018, the number of warrants excluded from diluted net loss per common share computations was approximately 6.8 million and 8.5 million, respectively. |
Stock-Based Compensation | Stock‑Based Compensation Options or stock awards are recorded at their estimated fair value at the measurement date. The Company recognizes compensation cost for options and stock awards that have a graded vesting schedule on a straight‑line basis over the requisite service period for the entire award. |
Evaluation of Ability to Maintain Current Level of Operations | Evaluation of Ability to Maintain Current Level of Operations In connection with preparing the consolidated financial statements for the fiscal year ended March 31, 2019, management evaluated whether there were conditions and events, considered in the aggregate, that raised substantial doubt about our ability to meet our obligations as they became due for the next twelve months from the date of issuance of our Fiscal 2019 financial statements. Management assessed that there were such conditions and events, including a history of recurring operating losses, negative cash flows from operating activities, the continued negative impact by the volatility of the global oil and gas markets, a strong U.S. dollar in certain markets making the Company’s products more expensive in such markets and ongoing global geopolitical tensions. The Company incurred a net loss of $16.7 million and used cash in operating activities of $17.7 million during the fiscal year ended March 31, 2019. The Company’s working capital requirements during the fiscal year ended March 31, 2019 were in line with management’s expectations, which included higher raw materials inventory, prepayments for certain raw materials, royalty settlement payment and higher warranty payments. Our net loss expanded during the year ended March 31, 2019 primarily because of an approximate increase of $0.7 million in our warranty provision and $3.0 million higher FPP scheduled and unscheduled maintenance costs primarily as a result of a supplier defect identified during the first quarter of Fiscal 2019. Additionally, we did not recognize revenue on certain service contracts because of the reassignment of those service contracts from Capstone’s legacy California distributor to Cal Microturbine. As of March 31, 2019, the Company had cash and cash equivalents of $29.7 million, and outstanding borrowings under its credit facility of $30.0 million. Management evaluated these conditions in relation to the Company’s ability to meet its obligations as they become due. The Company’s ability to continue current operations and to execute on management’s plans is dependent on its ability to generate cash flows from operations. Management believes that the Company will continue to make progress on its path to profitability by continuing to lower its operating costs and to develop its geographical and vertical markets. The Company may seek to raise funds by selling additional securities (through the at-the-market offering or otherwise) to the public or to selected investors. There is no assurance that the Company will be able to obtain additional funds on commercially favorable terms or at all. If the Company raises additional funds by issuing additional equity, the fully diluted ownership percentages of existing stockholders will be reduced. In addition, any equity that the Company would issue may have rights, preferences or privileges senior to those of the holders of its common stock. On February 4, 2019, the Company, entered into Note Purchase Agreements with Goldman Sachs Specialty Lending Holdings, Inc. (“Goldman Sachs”). Under the Note Purchase Agreement, the Company sold to the Purchaser $30.0 million aggregate principal amount of senior secured notes. The entire principal amount of the Notes is due and payable on February 4, 2022. See Note 12—Term Note Payable, for discussion of the three-year term note with Goldman Sachs. Under the three-year term note with Goldman Sachs we are not permitted to allow our cash and cash equivalents to be less than $12.0 million through the first anniversary date of February 4, 2020, and $9.0 million thereafter. The Company maintained two secured credit facilities (the “Bridge Bank Credit Agreements”) with Western Alliance Bank through its Bridge Bank division (“Bridge Bank”), with credit support provided by the Export-Import Bank of the United States through its working capital guarantee program, which provided the Company with a credit facility up to $15.0 million in the aggregate. Upon closing with Goldman Sachs, the Company’s Bridge Bank Credit Agreements with Bridge Bank were paid off in full. Based on the Company’s current operating plan, management anticipates that, given current working capital levels, current financial projections , the new term note with Goldman Sachs, and the funds raised by selling additional securities through the at-the-market offering as of the date of issuance of its Fiscal 2019 financial statements , the Company will be able to meet its financial obligations as they become due over the next twelve months from the date of issuance of its Fiscal 2019 financial statements. |
Segment Reporting | Segment Reporting The Company is considered to be a single reporting segment. The business activities of this reporting segment are the development, manufacture and sale of turbine generator sets and their related parts and service. Following is the geographic revenue information based on the primary operating location of the Company’s customers (in thousands): Year Ended Year Ended March 31, 2019 March 31, 2018 United States $ 45,480 $ 39,100 Mexico 5,005 2,007 All other North America 791 158 Total North America 51,276 41,265 Russia 3,176 2,824 All other Europe 12,886 12,762 Total Europe 16,062 15,586 Asia 5,229 8,378 Australia 3,874 5,443 All other 6,971 12,165 Total Revenue $ 83,412 $ 82,837 The following table summarizes the Company’s revenue by product (in thousands): Year Ended Year Ended March 31, 2019 March 31, 2018 C30 $ 1,810 $ 1,694 C65 11,719 12,740 C200 5,218 2,832 C600 6,286 9,057 C800 5,846 6,461 C1000 20,538 17,886 Unit upgrades — 143 Microturbine Products $ 51,417 $ 50,813 Accessories and Parts 14,886 15,941 Total Product, Accessories and Parts 66,303 66,754 Service 17,109 16,083 Total Revenue $ 83,412 $ 82,837 Substantially all of the Company’s operating assets are in the United States. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements On December 22, 2017, the SEC issued guidance under Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”) directing taxpayers to consider the impact of the U.S. legislation as “provisional” when it does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting for the change in tax law. As of March 31, 2019, upon completing its analysis, we believe that the amount recorded as provisional in our financial statements as of March 31, 2018 under SAB 118 is final. In July 2017, the FASB issued a two-part ASU No. 2017-11, I. Accounting for Certain Financial Instruments With Down Round Features and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests With a Scope Exception (“ASU 2017-11”). ASU 2017-11 amends guidance in FASB ASC 260, Earnings Per Share, FASB ASC 480, Distinguishing Liabilities from Equity, and FASB ASC 815, Derivatives and Hedging. The amendments in Part I of ASU 2017-11 change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. The amendments in Part II of ASU 2017-11 re-characterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. ASU 2017-11 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The Company adopted ASU 2017-11 for the three months ended June 30, 2017, and retrospectively applied ASU 2017-11 as required. See Note 10—Fair Value Measurements for further discussion on changes as a result of the adoption of ASU 2017-11. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), (“ASU 2016-02”). The purpose of ASU 2016-02 is to provide financial statement users a better understanding of the amount, timing, and uncertainty of cash flows arising from leases. The adoption of ASU 2016-02 will result in the recognition of a right-of-use asset and a lease liability for most operating leases. New disclosure requirements include qualitative and quantitative information about the amounts recorded in the financial statements. In September 2017, the FASB issued ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842), which provides additional implementation guidance on the previously issued ASU 2016-02 Leases (Topic 842). ASU 2016-02 requires a lessee to recognize assets and liabilities on the balance sheet for leases with lease terms greater than 12 months. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018. ASU 2016-02 requires a modified retrospective transition by means of a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year in which the guidance is effective with the option to elect certain practical expedients. Early adoption is permitted. We adopted ASU 2016-02 on April 1, 2019 and it did not have a material impact on our consolidated financial position and results of operations. In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU, 2014-09, Revenue from Contracts with Customers (Topic 606), (“ASU 2014-09”). ASU 2014-09 outlines a single, comprehensive model for accounting for revenue from contracts with customers and requires more detailed disclosure to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from such contracts. ASU 2014-09 provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. On April 1, 2018, we adopted ASU 2014-09 under the modified retrospective transition method. This method was applied to contracts that were not complete as of the date of initial application of ASU 2014-09. During Fiscal 2019, we recognized revenue based on ASU 2014-09, however revenue for Fiscal 2018 was recognized based on Accounting Standards Codification, Topic 605, Revenue Recognition. See Note 7—Revenue Recognition for additional discussion of the impact of the adoption of ASU 2014-09. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Summary of Significant Accounting Policies | |
Schedule of changes in the accounts receivable allowances | Changes in the accounts receivable allowances are as follows as of March 31, 2019 and 2018 (in thousands): Balance, March 31, 2017 $ 6,845 Additions charged to costs and expenses (1,099) Bad debt write-off (2) Balance, March 31, 2018 $ 5,744 Additions charged to costs and expenses (345) Bad debt write-off (101) Balance, March 31, 2019 $ 5,298 |
Schedule of geographic revenue information based on the primary operating location of the Company's customers | Following is the geographic revenue information based on the primary operating location of the Company’s customers (in thousands): Year Ended Year Ended March 31, 2019 March 31, 2018 United States $ 45,480 $ 39,100 Mexico 5,005 2,007 All other North America 791 158 Total North America 51,276 41,265 Russia 3,176 2,824 All other Europe 12,886 12,762 Total Europe 16,062 15,586 Asia 5,229 8,378 Australia 3,874 5,443 All other 6,971 12,165 Total Revenue $ 83,412 $ 82,837 |
Summary of Company's revenue by product | The following table summarizes the Company’s revenue by product (in thousands): Year Ended Year Ended March 31, 2019 March 31, 2018 C30 $ 1,810 $ 1,694 C65 11,719 12,740 C200 5,218 2,832 C600 6,286 9,057 C800 5,846 6,461 C1000 20,538 17,886 Unit upgrades — 143 Microturbine Products $ 51,417 $ 50,813 Accessories and Parts 14,886 15,941 Total Product, Accessories and Parts 66,303 66,754 Service 17,109 16,083 Total Revenue $ 83,412 $ 82,837 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Inventories | |
Summary of inventory | Inventories are valued at the lower of cost (determined on a first in first out (“FIFO”) basis) or net realizable value and consisted of the following as of March 31, 2019 and 2018 (in thousands): March 31, March 31, 2019 2018 Raw materials $ 24,426 $ 17,981 Work in process — 111 Finished goods 1,207 4,076 Total 25,633 22,168 Less inventory reserve (3,887) (5,494) Less non-current portion (1,403) (1,041) Current portion $ 20,343 $ 15,633 |
Schedule of expected usage for non-current inventory | The Company expects to use the non‑current portion of the inventories on hand as of March 31, 2019 over the periods presented in the following table (in thousands): Non-current Inventory Balance Expected Expected Period of Use to be Used 13 to 24 months $ 727 25 to 36 months 676 Total $ 1,403 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment | |
Schedule of property, plant and equipment | Property, plant and equipment as of March 31, 2019 and 2018 consisted of the following (in thousands): March 31, March 31, 2019 2018 Machinery, equipment, automobiles and furniture $ 15,344 $ 15,302 Leasehold improvements 11,074 10,949 Molds and tooling 2,893 2,904 Rental assets 2,818 179 32,129 29,334 Less, accumulated depreciation (26,838) (26,475) Total property, plant, equipment and rental assets, net $ 5,291 $ 2,859 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Intangible Assets | |
Schedule of intangible assets | Intangible assets consisted of the following (in thousands): March 31, 2019 Weighted Average Intangible Amortization Assets, Accumulated Intangible Period Gross Amortization Assets, Net Manufacturing license 17 years $ 3,700 $ 3,700 $ — Technology 10 years 2,240 2,053 187 Trade name & parts, service and TA100 customer relationships 1.2 to 5 years 1,766 1,766 — Total $ 7,706 $ 7,519 $ 187 March 31, 2018 Weighted Average Intangible Amortization Assets, Accumulated Intangible Period Gross Amortization Assets, Net Manufacturing license 17 years $ 3,700 $ 3,700 $ — Technology 10 years 2,240 1,829 411 Trade name & parts, service and TA100 customer relationships 1.2 to 5 years 1,766 1,766 — Total $ 7,706 $ 7,295 $ 411 |
Schedule of expected future amortization expense of intangible assets | Expected future amortization expense of intangible assets as of March 31, 2019 is as follows (in thousands): Amortization Year Ending March 31, Expense 2020 $ 187 Total expected future amortization $ 187 |
Accrued Warranty Reserve (Table
Accrued Warranty Reserve (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Accrued Warranty Reserve | |
Schedule of changes in accrued warranty reserve | Changes in the accrued warranty reserve are as follows as of March 31, 2019 and 2018 (in thousands): 2019 2018 Balance, beginning of the period $ 1,682 $ 3,766 Standard warranty provision 2,200 1,702 Accrual related to reliability repair programs — (760) Deductions for warranty claims (1,268) (3,026) Balance, end of the period $ 2,614 $ 1,682 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Revenue Recognition | |
Schedule of disaggregated revenue by business group | The following table presents disaggregated revenue by business group for the fiscal year ended March 31, 2019 (in thousands): Fiscal Year Ended March 31, 2019 Microturbine Products $ 51,417 Accessories and Parts Total Product, Accessories and Parts 66,303 Service 17,109 Total Revenue $ 83,412 |
Summary of geographic revenue information based on primary operation location of customer | Following is the geographic revenue information based on the primary operating location of the Company’s customers for the fiscal year ended March 31, 2019 (in thousands): Fiscal Year Ended March 31, 2019 United States $ 45,480 Mexico 5,005 All other North America 791 Total North America 51,276 Europe 3,176 All other Europe 12,886 Total Europe Asia 5,229 Australia 3,874 All other 6,971 Total Revenue $ 83,412 |
Schedule of changes in deferred revenue | million. Changes in deferred revenue during the fiscal year ended March 31, 2019 and 2018 are as follows (in thousands): 2019 2018 FPP Balance, beginning of the period $ 3,549 $ 3,414 FPP Billings 15,650 15,138 FPP Revenue recognized (14,318) (15,003) Balance attributed to FPP contracts 4,881 3,549 DSS program 1,689 1,087 Deposits 1,666 1,960 Deferred revenue balance, end of the period $ 8,236 $ 6,596 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Income Taxes | |
Schedule of loss before provision for income taxes | Year Ended March 31, 2019 2018 United States $ (16,678) $ (10,041) Foreign 27 33 Loss before provision for income taxes $ (16,651) $ (10,008) |
Schedule of reconciliation of income tax (benefit) expense to the federal statutory rate | A reconciliation of income tax (benefit) expense to the federal statutory rate follows (in thousands): Year Ended March 31, 2019 2018 Federal income tax benefit at the statutory rate $ (3,497) $ (3,082) State taxes, net of federal effect (583) (376) Foreign taxes 3 10 Expiring NOLs and tax credits 6,137 12,115 Impact of state rate change (67) — Valuation allowance (2,135) (95,547) Enactment of Tax Cuts and Jobs Act — 87,697 Shortfall in tax benefit—stock compensation 111 11 True-up 2 (1,217) Other 37 407 Income tax expense $ 8 $ 18 |
Schedule of the Company's deferred tax assets and liabilities | The Company’s deferred tax assets and liabilities consisted of the following at March 31, 2019 and 2018 (in thousands): Year Ended March 31, 2019 2018 Deferred tax assets: Inventories $ 1,842 $ 1,893 Warranty reserve 630 402 Bad debt reserve 1,245 1,373 Deferred revenue 1,584 1,108 Net operating loss (“NOL”) carryforwards 145,835 148,405 Tax credit carryforwards 16,021 16,627 Depreciation, amortization and impairment loss 2,734 2,673 Other 1,726 1,271 Deferred tax assets 171,617 173,752 Valuation allowance for deferred tax assets (171,617) (173,752) Deferred tax assets, net of valuation allowance — — Deferred tax liabilities: Federal benefit of state taxes — — Net deferred tax assets $ — $ — |
Schedule of the Company's NOL and tax credit carry forwards for federal and state income tax purposes | The Company’s NOL and tax credit carryforwards for federal and state income tax purposes at March 31, 2019 were as follows (in thousands): Expiration Amount Period Federal NOL generated before April 1, 2018 $ 631,046 2020 - 2038 Federal NOL generated after March 31, 2018 $ 12,200 Indefinite State NOL $ 153,585 2028 - 2039 Federal tax credit carryforwards $ 8,365 2020 - 2038 State tax credit carryforwards $ 9,692 Indefinite |
Schedule of reconciliation of the beginning and ending amount of total gross unrecognized tax benefits | A reconciliation of the beginning and ending amount of total gross unrecognized tax benefits is as follows (in thousands): Balance at March 31, 2017 $ 2,825 Gross increase related to prior year tax positions — Gross increase related to current year tax positions — Lapse of statute of limitations (358) Balance at March 31, 2018 $ 2,467 Gross increase related to prior year tax positions — Gross increase related to current year tax positions — Lapse of statute of limitations (77) Balance at March 31, 2019 $ 2,390 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Summary of stock-based compensation expense by statement of operations line item | The following table summarizes, by statement of operations line item, stock-based compensation expense for the fiscal years ended March 31, 2019 and 2018 (in thousands): Year Ended March 31, 2019 2018 Cost of goods sold $ 51 $ 52 Research and development 32 21 Selling, general and administrative 824 513 Stock-based compensation expense $ 907 $ 586 |
Summary of stock option activity | Weighted- Average Weighted- Remaining Aggregate Average Contractual Intrinsic Shares Exercise Price Term Value (in years) Options outstanding at March 31, 2018 212,392 $ 20.71 Granted — $ — Exercised — $ — Forfeited, cancelled or expired (37,448) $ 19.64 Options outstanding at March 31, 2019 174,944 $ 20.94 — Options fully vested at March 31, 2019 and those expected to vest beyond March 31, 2019 174,944 $ 20.94 — Options exercisable at March 31, 2019 174,944 $ 20.94 — |
Schedule of weighted-average assumptions used to calculate the estimated fair value of each stock option | Fiscal Year Ended March 31, 2019 Risk-free interest rate 2.5% Contractual term 5 years Expected volatility 76% |
Restricted stock units | |
Summary of restricted stock activity | Weighted Average Grant Date Fair Restricted Stock Units and Performance Restricted Stock Units Shares Value Nonvested restricted stock units outstanding at March 31, 2018 2,011,611 $ 0.90 Granted 1.16 Vested and issued (754,174) 0.90 Forfeited (51,360) 0.93 Nonvested restricted stock units outstanding at March 31, 2019 2,217,433 1.02 Restricted stock units expected to vest beyond March 31, 2019 2,217,410 $ 1.02 |
Schedule of additional information | Year Ended March 31, 2019 2018 Restricted stock compensation expense (in thousands) $ 907 $ 566 Aggregate fair value of restricted stock units vested and issued (in thousands) $ 748 $ 157 Weighted average grant date fair value of restricted stock units granted during the period $ 0.98 $ 0.83 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Fair Value Measurements | |
Schedule of assets and liabilities measured at fair value on a recurring basis | The table below presents our assets and liabilities that are measured at fair value on a recurring basis during Fiscal 2018 and are categorized using the fair value hierarchy (in thousands): Fair Value Measurements at March 31, 2018 Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Restricted cash $ 5,000 $ 5,000 $ — $ — |
Schedule of carrying values and estimated fair values of obligations under the revolving credit facility | The carrying values and estimated fair values of these obligations are as follows (in thousands): As of As of March 31, 2019 March 31, 2018 Carrying Estimated Carrying Estimated Value Fair Value Value Fair Value Term note payable $ 27,099 $ 30,000 $ — $ — Obligations under the credit facility $ — $ — $ 8,527 $ 8,527 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies | |
Schedule of minimum commitments under non-cancelable operating leases | At March 31, 2019, the Company’s minimum commitments under non-cancelable operating leases were as follows (in thousands): Operating Year Ending March 31, Leases 2020 $ 1,464 2021 958 2022 984 2023 933 2024 101 Thereafter 126 Total minimum lease payments $ 4,566 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Other Current Liabilities | |
Schedule of current and long-term portions of prepaid royalties | The current and long-term portions of prepaid royalties, included in other current assets and other assets, respectively, consisted of (in thousands): March 31, 2019 Other current assets $ 124 Other assets 2,768 Royalty-related assets $ 2,892 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - General Information (Details) | Jun. 05, 2018USD ($)payment | Oct. 13, 2017USD ($)payment | Mar. 31, 2019USD ($)shares | Mar. 31, 2018USD ($)shares |
Changes in the accounts receivable allowances | ||||
Accounts receivable allowance, beginning balance | $ 5,744,000 | $ 6,845,000 | ||
Additions charged to costs and expenses | (345,000) | (1,099,000) | ||
Bad debt write-off | (101,000) | (2,000) | ||
Accounts receivable allowance, ending balance | 5,298,000 | 5,744,000 | ||
Inventories | ||||
Inventory allowance | 3,887,000 | 5,494,000 | ||
Long-Lived Assets | ||||
Impairment | $ 0 | |||
Revenue | ||||
Practical expedient to disclose only the value of unsatisfied performance obligations for contracts with an original expected length greater than one year | true | |||
Practical expedient to expense costs as incurred for costs to obtain a contract when the amortization period would have been one year or less | true | |||
Research and Development ("R&D") | ||||
Total offsets to R&D expenses | $ 0 | |||
Risk Concentrations | ||||
Aggregate balances that exceed insurance coverage | 29,100,000 | |||
Recovery of bad debt | 345,000 | $ 1,099,000 | ||
Accounts Receivable Assignment Agreement | Turbine International, LLC. and MTE Service | ||||
Changes in the accounts receivable allowances | ||||
Additions charged to costs and expenses | (1,000,000) | |||
Risk Concentrations | ||||
Recovery of bad debt | 1,000,000 | |||
Total collections on accounts receivable allowance | 1,500,000 | |||
Total consideration receivable | $ 2,500,000 | |||
Number of payments to be received | payment | 3 | |||
Payment not yet received | $ 400,000 | |||
Promissory Note Agreement | Turbine International, LLC. and MTE Service | ||||
Risk Concentrations | ||||
Total consideration receivable | $ 3,800,000 | |||
Term of payments | 3 years | |||
Number of payments to be received | payment | 35 | |||
Amended Note Agreement | Turbine International, LLC. and MTE Service | ||||
Risk Concentrations | ||||
Total consideration receivable | $ 3,800,000 | |||
Term of payments | 3 years | |||
Number of payments to be received | payment | 13 | |||
Stock options | ||||
Net Loss Per Common Share | ||||
Options outstanding (in shares) | shares | 174,944 | 212,392 | ||
Restricted stock units | ||||
Net Loss Per Common Share | ||||
Options outstanding (in shares) | shares | 2,400,000 | 2,000,000 | ||
Warrants | ||||
Net Loss Per Common Share | ||||
Antidilutive securities excluded from diluted net loss per common share computations | shares | 6,800,000 | 8,500,000 | ||
BPC | ||||
Risk Concentrations | ||||
Total collections on accounts receivable allowance | $ 1,800,000 | |||
Number of payments to be received | payment | 5 | |||
Accounts receivable | $ 1,500,000 | $ 4,800,000 | ||
Revenue | Customer concentrations | E-Finity | ||||
Risk Concentrations | ||||
Concentration percentage | 13.00% | 16.00% | ||
Revenue | Customer concentrations | Horizon | ||||
Risk Concentrations | ||||
Concentration percentage | 12.00% | |||
Net accounts receivable | Customer concentrations | E-Finity | ||||
Risk Concentrations | ||||
Concentration percentage | 10.00% | 18.00% | ||
Net accounts receivable | Customer concentrations | Serba | ||||
Risk Concentrations | ||||
Concentration percentage | 20.00% | |||
Net accounts receivable | Customer concentrations | Supernova | ||||
Risk Concentrations | ||||
Concentration percentage | 10.00% | |||
Net accounts receivable | Customer concentrations | Reliable Secure Power Systems | ||||
Risk Concentrations | ||||
Concentration percentage | 14.00% | |||
Minimum | ||||
Depreciation and Amortization | ||||
Estimated useful lives | 2 years | |||
Maximum | ||||
Depreciation and Amortization | ||||
Estimated useful lives | 10 years | |||
Warranty | ||||
Warranty period | 24 months |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Evaluation of Ability to Maintain Current Level of Operations (Details) | Feb. 04, 2019USD ($) | Jun. 02, 2017USD ($) | Mar. 31, 2019USD ($)agreement | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) |
Net loss | $ 16,659,000 | $ 10,026,000 | ||||
Increase in warranty provision | 700,000 | |||||
Higher FPP scheduled and unscheduled maintenance costs | 3,000,000 | |||||
Cash used in operating activities | 17,703,000 | 8,641,000 | ||||
Cash, cash equivalents and restricted cash | $ 29,727,000 | 29,727,000 | 19,408,000 | $ 19,705,000 | ||
Outstanding borrowings | 8,527,000 | |||||
Bridge Bank | ||||||
Term of credit agreements | 2 years | |||||
Note Purchase Agreements | Goldman Sachs | ||||||
Maximum borrowing capacity under facility | $ 30,000,000 | |||||
Credit Facility | ||||||
Outstanding borrowings | 30,000,000 | 30,000,000 | ||||
Credit Facility | Bridge Bank | ||||||
Outstanding borrowings | $ 0 | 0 | $ 8,500,000 | |||
Maximum borrowing capacity under facility | $ 12,000,000 | |||||
Credit Facility | Bridge Bank Credit Agreements | Bridge Bank | ||||||
Number of credit and security agreements | agreement | 2 | |||||
Credit Facility | Bridge Bank Credit Agreements | Wells Fargo | ||||||
Maximum borrowing capacity under facility | $ 15,000,000 | 15,000,000 | ||||
Note Payable | Goldman Sachs | ||||||
Term of credit agreements | 3 years | |||||
Doubt about Company’s ability to meet obligations for next 12 months | ||||||
Net loss | 16,700,000 | |||||
Cash used in operating activities | 17,700,000 | |||||
Cash, cash equivalents and restricted cash | $ 29,700,000 | $ 29,700,000 | ||||
Through the first anniversary date of February 4, 2020 | Note Payable | Note Purchase Agreements | Goldman Sachs | ||||||
Cash, cash equivalents and restricted cash | $ 12,000,000 | |||||
Thereafter | Note Payable | Note Purchase Agreements | Goldman Sachs | ||||||
Cash, cash equivalents and restricted cash | $ 9,000,000 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Geographic Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Geographic revenue information | ||
Total Revenue | $ 83,412 | $ 82,837 |
Total North America | ||
Geographic revenue information | ||
Total Revenue | 51,276 | 41,265 |
United States | ||
Geographic revenue information | ||
Total Revenue | 45,480 | 39,100 |
Mexico | ||
Geographic revenue information | ||
Total Revenue | 5,005 | 2,007 |
All other North America | ||
Geographic revenue information | ||
Total Revenue | 791 | 158 |
Total Europe | ||
Geographic revenue information | ||
Total Revenue | 16,062 | 15,586 |
Russia | ||
Geographic revenue information | ||
Total Revenue | 3,176 | 2,824 |
All other Europe | ||
Geographic revenue information | ||
Total Revenue | 12,886 | 12,762 |
Asia | ||
Geographic revenue information | ||
Total Revenue | 5,229 | 8,378 |
Australia | ||
Geographic revenue information | ||
Total Revenue | 3,874 | 5,443 |
All other | ||
Geographic revenue information | ||
Total Revenue | $ 6,971 | $ 12,165 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Revenue by Product (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue by product | ||
Total Revenue | $ 83,412 | $ 82,837 |
Product, accessories and parts | ||
Revenue by product | ||
Total Revenue | 66,303 | 66,754 |
Total from Micro turbine Products | ||
Revenue by product | ||
Total Revenue | 51,417 | 50,813 |
C30 | ||
Revenue by product | ||
Total Revenue | 1,810 | 1,694 |
C65 | ||
Revenue by product | ||
Total Revenue | 11,719 | 12,740 |
C200 | ||
Revenue by product | ||
Total Revenue | 5,218 | 2,832 |
C600 | ||
Revenue by product | ||
Total Revenue | 6,286 | 9,057 |
C800 | ||
Revenue by product | ||
Total Revenue | 5,846 | 6,461 |
C1000 | ||
Revenue by product | ||
Total Revenue | 20,538 | 17,886 |
Unit upgrades | ||
Revenue by product | ||
Total Revenue | 143 | |
Accessories and parts | ||
Revenue by product | ||
Total Revenue | 14,886 | 15,941 |
Service | ||
Revenue by product | ||
Total Revenue | $ 17,109 | $ 16,083 |
Inventories - Current (Details)
Inventories - Current (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Inventories | ||
Raw materials | $ 24,426 | $ 17,981 |
Work in process | 111 | |
Finished goods | 1,207 | 4,076 |
Total | 25,633 | 22,168 |
Less inventory reserve | (3,887) | (5,494) |
Less non-current portion | (1,403) | (1,041) |
Current portion | $ 20,343 | $ 15,633 |
Weighted average age of noncurrent inventories | 1 year |
Inventories - Non-Current (Deta
Inventories - Non-Current (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Mar. 31, 2018 |
Inventories | ||
Non-current inventory, 13 to 24 Months | $ 727 | |
Non-current inventory, 25 to 36 Months | 676 | |
Total | $ 1,403 | $ 1,041 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Property, Plant and Equipment | ||
Total property, plant and equipment, gross | $ 32,129 | $ 29,334 |
Less, accumulated depreciation | (26,838) | (26,475) |
Total property, plant, equipment and rental assets, net | 5,291 | 2,859 |
Depreciation expense | 1,000 | 900 |
Machinery, equipment, automobiles and furniture | ||
Property, Plant and Equipment | ||
Total property, plant and equipment, gross | 15,344 | 15,302 |
Leasehold improvements | ||
Property, Plant and Equipment | ||
Total property, plant and equipment, gross | 11,074 | 10,949 |
Molds and tooling | ||
Property, Plant and Equipment | ||
Total property, plant and equipment, gross | 2,893 | 2,904 |
Rental assets | ||
Property, Plant and Equipment | ||
Total property, plant and equipment, gross | $ 2,818 | $ 179 |
Intangible Assets - General Inf
Intangible Assets - General Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Intangible Assets | ||
Intangible Assets, Gross | $ 7,706 | $ 7,706 |
Accumulated Amortization | 7,519 | 7,295 |
Intangible Assets, Net | 187 | 411 |
Amortization expense | 200 | 300 |
Expected future amortization expense of intangible assets | ||
2020 | 187 | |
Intangible Assets, Net | $ 187 | $ 411 |
Manufacturing license | ||
Intangible Assets | ||
Weighted Average Amortization Period | 17 years | 17 years |
Intangible Assets, Gross | $ 3,700 | $ 3,700 |
Accumulated Amortization | $ 3,700 | $ 3,700 |
Technology | ||
Intangible Assets | ||
Weighted Average Amortization Period | 10 years | 10 years |
Intangible Assets, Gross | $ 2,240 | $ 2,240 |
Accumulated Amortization | 2,053 | 1,829 |
Intangible Assets, Net | 187 | 411 |
Expected future amortization expense of intangible assets | ||
Intangible Assets, Net | 187 | 411 |
Trade Name and Parts, Service and TA100 Customer Relationships | ||
Intangible Assets | ||
Intangible Assets, Gross | 1,766 | 1,766 |
Accumulated Amortization | $ 1,766 | $ 1,766 |
Minimum | Trade Name and Parts, Service and TA100 Customer Relationships | ||
Intangible Assets | ||
Weighted Average Amortization Period | 1 year 2 months 12 days | 1 year 2 months 12 days |
Maximum | Trade Name and Parts, Service and TA100 Customer Relationships | ||
Intangible Assets | ||
Weighted Average Amortization Period | 5 years | 5 years |
Intangible Assets - Solar Turbi
Intangible Assets - Solar Turbines (Details) - Solar - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Intangible Assets | ||
Royalties earned | $ 33,200 | $ 30,900 |
Unpaid earned royalties | $ 26,100 | $ 8,000 |
Accrued Warranty Reserve (Detai
Accrued Warranty Reserve (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
Accrued Warranty Reserve | |||
Balance, beginning of the period | $ 1,682 | $ 3,766 | |
Standard warranty provision | 2,200 | 1,702 | |
Accrual related to reliability repair programs | (760) | ||
Deductions for warranty claims | (1,268) | (3,026) | |
Balance, end of the period | 2,614 | 1,682 | $ 3,766 |
Product Warranty Expense | $ 2,201 | $ 942 | |
C200 | |||
Accrued Warranty Reserve | |||
Product Warranty Expense | 5,200 | ||
Non-C200 | |||
Accrued Warranty Reserve | |||
Product Warranty Expense | $ 600 |
Revenue Recognition - Revenues
Revenue Recognition - Revenues (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 83,412 | $ 82,837 |
Product, accessories and parts | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 66,303 | 66,754 |
Total from Micro turbine Products | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 51,417 | 50,813 |
Accessories and parts | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 14,886 | 15,941 |
Service | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 17,109 | 16,083 |
Total North America | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 51,276 | 41,265 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 45,480 | 39,100 |
Mexico | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 5,005 | 2,007 |
All other North America | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 791 | 158 |
All other Europe | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 12,886 | 12,762 |
Total Europe | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 16,062 | 15,586 |
Asia | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 5,229 | 8,378 |
Australia | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 3,874 | 5,443 |
All other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 6,971 | $ 12,165 |
Revenue Recognition - Contract
Revenue Recognition - Contract Balances (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Increase (decrease) in balance of deferred revenue | $ 1,600 | |
Increase in deposits | 300 | |
Changes in deferred revenue | ||
DSS program | 1,689 | $ 1,087 |
Deposits | 1,666 | 1,960 |
Deferred revenue balance, end of the period | 8,236 | 6,596 |
Estimated revenue to be recognized thereafter | 1,100 | |
FPP agreements | ||
Disaggregation of Revenue [Line Items] | ||
Increase (decrease) in balance of deferred revenue | 1,300 | |
Changes in deferred revenue | ||
FPP Balance, beginning of the period | 3,549 | 3,414 |
FPP Billings | 15,650 | 15,138 |
FPP Revenue recognized | (14,318) | (15,003) |
Balance attributed to FPP contracts | 4,881 | $ 3,549 |
Estimated revenue to be recognized in the next 12 months | 3,800 | |
Distributor Support System | ||
Disaggregation of Revenue [Line Items] | ||
Increase (decrease) in balance of deferred revenue | $ 600 |
Income Taxes - Loss Before Prov
Income Taxes - Loss Before Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest [Abstract] | ||
United States | $ (16,678) | $ (10,041) |
Foreign | 27 | 33 |
Loss before provision for income taxes | $ (16,651) | $ (10,008) |
Income Taxes - Tax Rate (Detail
Income Taxes - Tax Rate (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2019 | |
Income Taxes | |||
U.S. federal corporate tax rate | 21.00% | 34.00% | 21.00% |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax (Benefit) Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Reconciliation of income tax (benefit) expense to the federal statutory rate | ||
Federal income tax benefit at the statutory rate | $ (3,497) | $ (3,082) |
State taxes, net of federal effect | (583) | (376) |
Foreign taxes | 3 | 10 |
Expiring NOLs and tax credits | 6,137 | 12,115 |
Impact of state rate change | (67) | |
Valuation allowance | (2,135) | (95,547) |
Enactment of Tax Cuts and Jobs Act | 87,697 | |
Shortfall in tax benefit - stock compensation | 111 | 11 |
True-up | 2 | (1,217) |
Other | 37 | 407 |
Income tax expense | $ 8 | $ 18 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Mar. 31, 2018 |
Deferred tax assets: | ||
Inventories | $ 1,842 | $ 1,893 |
Warranty reserve | 630 | 402 |
Bad debt reserve | 1,245 | 1,373 |
Deferred revenue | 1,584 | 1,108 |
Net operating loss (NOL) carryforwards | 145,835 | 148,405 |
Tax credit carryforwards | 16,021 | 16,627 |
Depreciation, amortization and impairment loss | 2,734 | 2,673 |
Other | 1,726 | 1,271 |
Deferred tax assets | 171,617 | 173,752 |
Valuation allowance for deferred tax assets | (171,617) | (173,752) |
Deferred tax assets, net of valuation allowance | 0 | 0 |
Deferred tax liabilities: | ||
Federal benefit of state taxes | 0 | 0 |
Net deferred tax assets | $ 0 | $ 0 |
Income Taxes - Change in Valuat
Income Taxes - Change in Valuation Allowance (Details) - USD ($) $ in Millions | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Valuation allowance | ||
Change in valuation allowance | $ 2.1 | $ 95.5 |
Income Taxes - Net Operating Lo
Income Taxes - Net Operating Loss Carryforwards (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Domestic Tax Authority | Earliest Tax Year | |
Operating Loss Carryforwards [Line Items] | |
NOL | $ 631,046 |
Domestic Tax Authority | Latest Tax Year | |
Operating Loss Carryforwards [Line Items] | |
NOL | 12,200 |
State and Local Jurisdiction | |
Operating Loss Carryforwards [Line Items] | |
NOL | $ 153,585 |
Income Taxes - Tax Credit Carry
Income Taxes - Tax Credit Carryforwards - Tabular Disclosure (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Domestic Tax Authority | |
Tax Credit Carryforward [Line Items] | |
Tax credit carry forwards | $ 8,365 |
State and Local Jurisdiction | |
Tax Credit Carryforward [Line Items] | |
Tax credit carry forwards | $ 9,692 |
Income Taxes - Net Operating _2
Income Taxes - Net Operating Loss and Tax Credit Carryforwards (Details) $ in Millions | Mar. 31, 2019USD ($) |
Income Taxes | |
Annual limitation amount on utilization of the NOLs and tax credits | $ 57.3 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits - General Information (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 |
Income Taxes | |||
Total amount of unrecognized tax benefits | $ 2,390 | $ 2,467 | $ 2,825 |
Interest or penalties related to unrecognized tax benefits | 0 | 0 | |
Unrecognized tax benefits, that if recognized, would affect the effective tax rate | $ 2,400 | $ 2,500 |
Income Taxes - Tax Credit Car_2
Income Taxes - Tax Credit Carryforwards - Deferred Tax Assets (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Mar. 31, 2018 |
Domestic Tax Authority | ||
Deferred Tax Assets, Tax Credit Carryforwards [Abstract] | ||
Deferred tax assets related to research and development credits | $ 8.4 | $ 9 |
State and Local Jurisdiction | ||
Deferred Tax Assets, Tax Credit Carryforwards [Abstract] | ||
Deferred tax assets related to research and development credits | $ 9 | $ 10.2 |
Income Taxes - Unrecognized T_2
Income Taxes - Unrecognized Tax Benefits - Roll Forward (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Reconciliation of the beginning and ending amount of total gross unrecognized tax benefits | ||
Balance at the beginning of the period | $ 2,467 | $ 2,825 |
Lapse of statute of limitations | (77) | (358) |
Balance at the end of the period | $ 2,390 | $ 2,467 |
Stockholders' Equity - Stock Ba
Stockholders' Equity - Stock Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Stock-based compensation expense | ||
Stock-based compensation expense | $ 907 | $ 586 |
Cost of goods sold | ||
Stock-based compensation expense | ||
Stock-based compensation expense | 51 | 52 |
Research and development | ||
Stock-based compensation expense | ||
Stock-based compensation expense | 32 | 21 |
Selling, general and administrative | ||
Stock-based compensation expense | ||
Stock-based compensation expense | $ 824 | $ 513 |
Stockholders' Equity - 2000 Equ
Stockholders' Equity - 2000 Equity Plan (Details) | 12 Months Ended |
Mar. 31, 2019shares | |
Stock options | |
Stockholders' equity | |
Vesting period | 4 years |
Expiration Term | 10 years |
Portion vesting one year after the issuance date (as a percent) | 25.00% |
Vesting period of awards after issuance date | 1 year |
Portion vesting on first day of each month after one year from the issuance date (as a percent) | 2.083% |
2000 Plan | |
Stockholders' equity | |
Number of shares of common stock reserved for issuance | 1,849,000 |
2017 Plan | |
Stockholders' equity | |
Number of shares of common stock reserved for issuance | 3,000,000 |
Number of shares available for future grant | 3,085,347 |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Options (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Shares | ||
Granted (in shares) | 0 | |
Weighted-average assumptions used to calculate estimated fair value of each warrant | ||
Risk-free interest rates (as a percent) | 2.50% | |
Contractual term (in years) | 5 years | |
Expected volatility (as a percent) | 76.00% | |
Additional disclosure | ||
Stock-based compensation expense | $ 907,000 | $ 586,000 |
Stock options | ||
Shares | ||
Outstanding at the beginning of the period (in shares) | 212,392 | |
Forfeited, cancelled or expired (in shares) | (37,448) | |
Outstanding at the end of the period (in shares) | 174,944 | 212,392 |
Options fully vested and those expected to vest (in shares) | 174,944 | |
Options exercisable | 174,944 | |
Weighted Average Exercise Price | ||
Outstanding at the beginning of the period (in dollars per share) | $ 20.71 | |
Forfeited, cancelled or expired (in dollars per share) | 19.64 | |
Outstanding at the end of the period (in dollars per share) | 20.94 | $ 20.71 |
Options fully vested and those expected to vest (in dollars per share) | 20.94 | |
Exercisable (in dollars per share) | $ 20.94 | |
Weighted Average Remaining Contractual Term (in years) | ||
Outstanding at the end of the period | 2 years 3 months 18 days | |
Options fully vested and those expected to vest | 2 years 3 months 18 days | |
Exercisable | 2 years 3 months 18 days | |
Additional disclosure | ||
Stock-based compensation expense | $ 16,900 | |
Total compensation cost related to unvested stock option awards | $ 0 |
Stockholders' Equity - Restrict
Stockholders' Equity - Restricted Stock Units and Awards (Details) - USD ($) | Aug. 31, 2017 | Mar. 31, 2019 | Mar. 31, 2018 |
Additional disclosure | |||
Stock-based compensation expense | $ 907,000 | $ 586,000 | |
ESPP | |||
Additional disclosure | |||
Number of shares of common stock reserved for issuance | 70,000 | 570,000 | |
Increase in common stock available under the plan | 500,000 | ||
Maximum amount that can be contributed by the employee | $ 25,000 | ||
Maximum percentage of regular compensation that can be contributed by the employee | 15.00% | ||
Percentage of the fair market value of common stock on the last day of the purchase right period | 95.00% | ||
Number of shares issued under purchase plan | 1,012 | 5,836 | |
Number of shares available for future grant | 497,909 | ||
Restricted stock units | |||
Weighted Average Grant-Date Fair Value | |||
Granted (in dollars per share) | $ 0.98 | $ 0.83 | |
Additional disclosure | |||
Assumed forfeiture (in shares) | 0 | ||
Stock-based compensation expense | $ 907,000 | $ 566,000 | |
Aggregate fair value of restricted stock units vested and issued | 748,000 | $ 157,000 | |
Unrecognized compensation cost | $ 1,200,000 | ||
Weighted average period for recognizing compensation cost | 1 year 9 months 18 days | ||
Restricted stock units | Awards vesting over four years with one-fourth units vesting one year after the issuance date | |||
Additional disclosure | |||
Vesting period | 4 years | ||
Awards vesting percentage | 25.00% | ||
Restricted stock units and Performance restricted stock units | |||
Shares | |||
Nonvested, balance at the beginning of the period (in shares) | 2,011,611 | ||
Granted (in shares) | 1,011,356 | ||
Vested and issued (in shares) | (754,174) | ||
Forfeited (in shares) | (51,360) | ||
Nonvested, balance at the end of the period (in shares) | 2,217,433 | 2,011,611 | |
Awards expected to vest (in shares) | 2,217,410 | ||
Weighted Average Grant-Date Fair Value | |||
Nonvested restricted stock units outstanding at the beginning of the period (in dollars per share) | $ 0.90 | ||
Granted (in dollars per share) | 1.16 | ||
Vested and issued (in dollars per share) | 0.90 | ||
Forfeited (in dollars per share) | 0.93 | ||
Nonvested restricted stock units outstanding at the end of the period (in dollars per share) | 1.02 | $ 0.90 | |
Awards expected to vest (in dollars per share) | $ 1.02 | ||
Restricted Stock Awards | |||
Shares | |||
Granted (in shares) | 0 | ||
Additional disclosure | |||
Stock-based compensation expense | $ 0 | $ 3,000,000 | |
Non-employee director | Restricted stock units | |||
Additional disclosure | |||
Vesting period | 1 year | ||
Non-employee director | Restricted Stock Awards | |||
Shares | |||
Granted (in shares) | 3,969,000 | ||
Weighted Average Grant-Date Fair Value | |||
Granted (in dollars per share) | $ 0.63 |
Stockholders' Equity - Grants O
Stockholders' Equity - Grants Outside of 2000 and 2017 Plans and Stockholder Rights Plan (Details) | May 06, 2019Vote$ / shares | Feb. 04, 2019USD ($)$ / sharesshares | Apr. 13, 2018$ / sharesshares | Mar. 31, 2019USD ($)$ / sharesshares | Mar. 31, 2018USD ($)$ / sharesshares | Mar. 31, 2019USD ($)$ / sharesshares | Jun. 07, 2018USD ($) | Aug. 28, 2015USD ($) |
Stockholder Rights Plan | ||||||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |||||
Preferred stock, par value (in dollars per share) | 0.001 | 0.001 | 0.001 | |||||
Offerings of Common Stock and Warrants and At-the-Market Offering Program | ||||||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |||||
Loss on adjustment of exercise price | $ | $ 741,000 | |||||||
Net proceeds from offering of common stock and warrants | $ | $ 11,098,000 | $ 13,581,000 | ||||||
Common stock sold (in shares) | shares | 3,806,243 | |||||||
Series A Warrants | ||||||||
Offerings of Common Stock and Warrants and At-the-Market Offering Program | ||||||||
Exercise price (in dollars per share) | $ 0.60 | |||||||
Outstanding warrants (in shares) | shares | 2,718,750 | 2,718,750 | ||||||
Warrants Exercised | shares | 5,760,000 | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.60 | |||||||
Series A Warrants, Exercise Price 2.55 | ||||||||
Offerings of Common Stock and Warrants and At-the-Market Offering Program | ||||||||
Exercise price (in dollars per share) | $ 2.55 | $ 2.55 | ||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | 2.55 | 2.55 | ||||||
Series A Warrants, Exercise Price 1.34 | ||||||||
Offerings of Common Stock and Warrants and At-the-Market Offering Program | ||||||||
Exercise price (in dollars per share) | 0.57 | 0.57 | ||||||
Initial exercise price (in dollars per share) | $ 1.34 | 1.34 | ||||||
Issued warrants (in shares) | shares | 540,000 | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.57 | $ 0.57 | ||||||
Series B Warrants | ||||||||
Offerings of Common Stock and Warrants and At-the-Market Offering Program | ||||||||
Outstanding warrants (in shares) | shares | 0 | 0 | ||||||
Warrants | ||||||||
Stockholder Rights Plan | ||||||||
Common stock, par value (in dollars per share) | $ 0.001 | |||||||
Offerings of Common Stock and Warrants and At-the-Market Offering Program | ||||||||
Warrant purchase | shares | 4,046,337 | |||||||
Exercise price (in dollars per share) | $ 0.8859 | |||||||
Common stock, par value (in dollars per share) | $ 0.001 | |||||||
Purchase price | $ | $ 150,000 | |||||||
Value of the Warrant | $ | $ 2,300,000 | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.8859 | |||||||
August 2015 Sales Agreement | ||||||||
Offerings of Common Stock and Warrants and At-the-Market Offering Program | ||||||||
Net proceeds from sale of the common stock, after deducting fees and other offering expenses (in dollars) | $ | $ 4,000,000 | $ 28,600,000 | ||||||
Common stock sold (in shares) | shares | 2,800,000 | 26,000,000 | ||||||
Common stock commissions paid | $ | $ 100,000 | $ 800,000 | ||||||
June 2018 Sales Agreement | ||||||||
Offerings of Common Stock and Warrants and At-the-Market Offering Program | ||||||||
Net proceeds from sale of the common stock, after deducting fees and other offering expenses (in dollars) | $ | 6,900,000 | |||||||
Aggregate offering price for at-the-market offering program | $ | $ 17,800,000 | $ 17,800,000 | ||||||
Common stock sold (in shares) | shares | 7,600,000 | |||||||
Common stock commissions paid | $ | $ 200,000 | |||||||
Maximum | August 2015 Sales Agreement | ||||||||
Offerings of Common Stock and Warrants and At-the-Market Offering Program | ||||||||
Aggregate offering price for at-the-market offering program | $ | $ 30,000,000 | |||||||
Maximum | June 2018 Sales Agreement | ||||||||
Offerings of Common Stock and Warrants and At-the-Market Offering Program | ||||||||
Aggregate offering price for at-the-market offering program | $ | $ 25,000,000 | |||||||
Stock options | ||||||||
Class of Stock [Line Items] | ||||||||
Options outstanding (in shares) | shares | 174,944 | 212,392 | 174,944 | |||||
Portion vesting one year after the issuance date (as a percent) | 25.00% | |||||||
Portion vesting on first day of each month after one year from the issuance date (as a percent) | 2.083% | |||||||
Expiration Term | 10 years | |||||||
Vesting period | 4 years | |||||||
Restricted stock units | ||||||||
Class of Stock [Line Items] | ||||||||
Options outstanding (in shares) | shares | 2,400,000 | 2,000,000 | 2,400,000 | |||||
Series B Junior Participating Preferred Stock | ||||||||
Stockholder Rights Plan | ||||||||
Preferred stock conversion basis | 0.001 | |||||||
Purchase price (in dollars per share) | $ 5.22 | |||||||
Preferred stock dividend minimum if declared | $ 1 | |||||||
Preferred stock rights ratio over common stock | 1,000 | |||||||
Number of votes per share | Vote | 1,000 | |||||||
Ratio of consideration received in event of conversion or exchange transaction | 1,000 | |||||||
Series B Junior Participating Preferred Stock | Minimum | ||||||||
Stockholder Rights Plan | ||||||||
Beneficial ownership of common stock (as a percent) | 4.90% |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring (Details) $ in Thousands | Mar. 31, 2018USD ($) |
Fair Value Measurements | |
Restricted cash | $ 5,000 |
Recurring | Total | |
Fair Value Measurements | |
Restricted cash | 5,000 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | |
Fair Value Measurements | |
Restricted cash | $ 5,000 |
Fair Value Measurements - Oblig
Fair Value Measurements - Obligations (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Mar. 31, 2018 |
Carrying Value | ||
Fair Value Measurements | ||
Term note payable | $ 27,099 | |
Obligations under the Credit Facility | $ 8,527 | |
Total | ||
Fair Value Measurements | ||
Term note payable | $ 30,000 | |
Obligations under the Credit Facility | $ 8,527 |
Revolving Credit Facility (Deta
Revolving Credit Facility (Details) | Jun. 02, 2017USD ($)agreement | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Jun. 01, 2018USD ($) |
Revolving Credit Facility | ||||
Outstanding borrowings | $ 8,527,000 | |||
Interest expense | $ 1,502,000 | 606,000 | ||
Amortization of deferred financing costs | 311,000 | 202,000 | ||
Bridge Bank | ||||
Revolving Credit Facility | ||||
Number of secured credit facilities | agreement | 2 | |||
Term of credit agreements | 2 years | |||
Maximum borrowings as a percent of cash held | 85.00% | |||
Bridge Bank | Prime Rate | ||||
Revolving Credit Facility | ||||
Variable base rate | prime rate | |||
Interest margin on variable rate | 1.50% | |||
Credit Facility | ||||
Revolving Credit Facility | ||||
Outstanding borrowings | 30,000,000 | |||
Credit Facility | Wells Fargo | ||||
Revolving Credit Facility | ||||
Interest expense | 200,000 | |||
Amortization of deferred financing costs | $ 100,000 | |||
Credit Facility | Bridge Bank | ||||
Revolving Credit Facility | ||||
Maximum borrowing capacity under facility | $ 12,000,000 | |||
Borrowing rate (as a percent) | 6.30% | |||
Outstanding borrowings | 0 | $ 8,500,000 | ||
Interest expense | 700,000 | 400,000 | ||
Amortization of deferred financing costs | 100,000 | 100,000 | ||
Restricted cash equivalents for credit facility | $ 5,000,000 | |||
Origination fees | 200,000 | |||
Amount available for additional borrowing | $ 3,500,000 | |||
Facility fee percentage | 0.625% | |||
Cash collateral percentage | 42.00% | |||
Accelerated amortization | $ 200,000 | |||
Letter Agreement | Bridge Bank | ||||
Revolving Credit Facility | ||||
Maximum borrowing capacity under facility | $ 15,000,000 | |||
Restricted cash | $ 6,000,000 | |||
Interest rate (as a percent) | 1.00% | |||
Facility fee percentage | 0.50% | |||
Cash collateral percentage | 40.00% | |||
Domestic Facility | Bridge Bank | ||||
Revolving Credit Facility | ||||
Maximum borrowings as a percent of cash held | 85.00% |
Term Note Payable (Details)
Term Note Payable (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Feb. 04, 2019 |
Debt Instrument [Line Items] | ||||
Interest expenses | $ 1,502 | $ 606 | ||
Amortization of deferred financing costs | 311 | $ 202 | ||
Notes | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $ 30,000 | |||
Interest rate (as a percent) | 13.00% | |||
Outstanding borrowings | $ 30,000 | 30,000 | ||
Term | 3 years | |||
Minimum consolidated liquidity through February 4, 2020 | $ 12,000 | 12,000 | ||
Minimum consolidated liquidity thereafter | 9,000 | 9,000 | ||
Deferring financing costs | $ 3,200 | 3,200 | ||
Amortization of debt discount and deferred costs | 200 | |||
Interest expenses | 800 | |||
Amortization of deferred financing costs | $ 200 |
Commitments and Contingencies -
Commitments and Contingencies - Purchase and Lease Commitments (Details) - USD ($) | Jun. 07, 2017 | Sep. 30, 2014 | Aug. 01, 2014 | Jul. 31, 2014 | Mar. 28, 2013 | Mar. 31, 2019 | Mar. 31, 2018 |
Lease Commitments | |||||||
Renewal option period | 5 years | ||||||
Deferred rent | $ 300,000 | $ 400,000 | |||||
Rent expense | 2,300,000 | $ 2,200,000 | |||||
Inventory | |||||||
Commitments and Contingencies | |||||||
Commitment to purchase inventories | $ 33,400,000 | ||||||
Third Amendment | |||||||
Lease Commitments | |||||||
Operating Lease, Extension Term | 2 months | ||||||
Operating Leases, Rent Expense, Minimum Rentals | $ 81,001 | ||||||
Fourth Amendment | |||||||
Lease Commitments | |||||||
Operating Lease, Extension Term | 5 years | ||||||
Monthly base rent payable for the first agreed period | $ 39,500 | ||||||
Monthly base rent payable for the second agreed period | 79,000 | ||||||
Monthly base rent payable for the third agreed period | 81,225 | ||||||
Monthly base rent payable for the fourth agreed period | 83,600 | ||||||
Monthly base rent payable for the fifth agreed period | 86,000 | ||||||
Monthly base rent payable for the sixth agreed period | $ 88,500 | ||||||
Operating Lease, Period Available under Options for Lease Extension | 5 years | ||||||
Van Nuys Amendment | |||||||
Lease Commitments | |||||||
Monthly base rent payable for the first agreed period | $ 60,000 | ||||||
Monthly base rent payable for the second agreed period | $ 65,000 | ||||||
Van Nuys Fourth Amendment | |||||||
Lease Commitments | |||||||
Operating Lease, Extension Term | 62 months | ||||||
Monthly base rent payable for the first agreed period | $ 0 | ||||||
Monthly base rent payable for the second agreed period | 66,846 | ||||||
Monthly base rent payable for the third agreed period | 68,852 | ||||||
Monthly base rent payable for the fourth agreed period | 70,917 | ||||||
Monthly base rent payable for the fifth agreed period | 73,045 | ||||||
Monthly base rent payable for the sixth agreed period | 75,236 | ||||||
Monthly base rent payable for the seventh agreed period | $ 77,493 | ||||||
Operating Lease, Period Available under Options for Lease Extension | 5 years |
Commitments and Contingencies_2
Commitments and Contingencies - Operating Leases (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Minimum commitments under non-cancelable operating leases | |
2019 | $ 1,464 |
2020 | 958 |
2021 | 984 |
2022 | 933 |
2023 | 101 |
Thereafter | 126 |
Total minimum lease payments | $ 4,566 |
Commitments and Contingencies_3
Commitments and Contingencies - Other Commitments and Legal Matters (Details) $ in Millions | Oct. 18, 2018USD ($)item | Jul. 18, 2018item | Dec. 31, 2015complaint |
Legal matters | |||
Number of putative securities class action complaints filed against the Company | complaint | 2 | ||
Number of additional purported shareholder derivative actions filed | 2 | ||
Regatta Against Company | |||
Legal matters | |||
Alleged number of frauds | 2 | ||
Regatta Against Executive Vice President | |||
Legal matters | |||
Alleged number of frauds | 1 | ||
Minimum | Regatta Against Company | |||
Legal matters | |||
Claim for general and compensatory damages | $ | $ 1.5 | ||
Minimum | Regatta Against Executive Vice President | |||
Legal matters | |||
Claim for general and compensatory damages | $ | $ 1.5 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) | 2 Months Ended | 10 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Jan. 31, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | |
Employee Benefit Plans | ||||
Maximum employee contribution as percentage of their eligible compensation | 90.00% | |||
Employer's matching contribution (as a percent) | 50.00% | 50.00% | ||
Maximum percentage of employee's contributions for employer's matching contribution of 50 cents for every dollar contributed by employees | 6.00% | 4.00% | ||
Employer's contributions made since the inception of the plan | $ 0 | |||
Employer's match vesting percentage | 25.00% | |||
Employer's match vesting period starting from employee's hire date | 4 years | |||
Expense recorded | $ 300,000 | $ 200,000 |
Other Current Liabilities (Deta
Other Current Liabilities (Details) - Carrier $ in Thousands | Sep. 19, 2018USD ($) | Sep. 30, 2013 | Mar. 31, 2019USD ($)kW | Mar. 31, 2018USD ($) | Jul. 25, 2018USD ($) |
Other Current Liabilities | |||||
Reduction in fixed rate royalty (as a percent) | 50.00% | ||||
Payment of royalty settlement | $ 3,000 | ||||
C200 | |||||
Other Current Liabilities | |||||
Capacity of microturbine (in kW) | kW | 200 | ||||
C200 and C1000 | |||||
Other Current Liabilities | |||||
Current royalty obligation | $ 0 | ||||
Royalties earned | 400 | $ 900 | |||
C200 and C1000 | Accrued expenses | |||||
Other Current Liabilities | |||||
Current royalty obligation | $ 200 | ||||
Second Amendment of Development and License Agreement | |||||
Other Current Liabilities | |||||
Royalty-related assets | $ 2,892 | ||||
Amortization period of prepaid royalty | 15 years | ||||
Second Amendment of Development and License Agreement | Other current assets | |||||
Other Current Liabilities | |||||
Royalty-related assets | $ 124 | ||||
Second Amendment of Development and License Agreement | Other assets | |||||
Other Current Liabilities | |||||
Royalty-related assets | $ 2,768 | ||||
Second Amendment of Development and License Agreement | C200 | |||||
Other Current Liabilities | |||||
Current royalty obligation | $ 3,000 |