Document and Entity Information
Document and Entity Information - $ / shares | 3 Months Ended | |
Jun. 30, 2022 | Aug. 10, 2022 | |
Document Information [Line Items] | ||
Entity Central Index Key | 0001009759 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-15957 | |
Entity Registrant Name | Capstone Green Energy Corporation | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 95-4180883 | |
Entity Address, Address Line One | 16640 Stagg Street | |
Entity Address, City or Town | Van Nuys | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 91406 | |
City Area Code | 818 | |
Local Phone Number | 734-5300 | |
Entity Listing, Par Value Per Share | $ 0.001 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 15,320,673 | |
Current Fiscal Year End Date | --03-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Common Stock [Member] | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Stock, par value $.001 per share | |
Trading Symbol | CGRN | |
Security Exchange Name | NASDAQ | |
Series B Junior Participating Preferred Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Series B Junior Participating Preferred Stock Purchase Rights | |
No Trading Symbol Flag | true |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2022 | Mar. 31, 2022 |
Current Assets: | ||
Cash and cash equivalents | $ 16,914 | $ 22,559 |
Accounts receivable, net of allowances of $850 at June 30, 2022 and $845 at March 31, 2022 | 24,168 | 24,665 |
Inventories, net | 18,608 | 18,465 |
Prepaid expenses and other current assets | 6,468 | 5,519 |
Total current assets | 66,158 | 71,208 |
Property, plant, equipment and rental assets, net | 21,694 | 18,038 |
Non-current portion of accounts receivable | 1,056 | 1,212 |
Non-current portion of inventories | 2,013 | 1,680 |
Other assets | 8,933 | 8,635 |
Total assets | 99,854 | 100,773 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 22,238 | 25,130 |
Accrued salaries and wages | 1,360 | 1,147 |
Accrued warranty reserve | 1,527 | 1,483 |
Deferred revenue | 9,694 | 9,185 |
Current portion of notes payable and lease obligations | 1,930 | 675 |
Total current liabilities | 36,749 | 37,620 |
Deferred revenue - non-current | 934 | 981 |
Term note payable, net | 50,957 | 50,949 |
Long-term portion of notes payable and lease obligations | 7,627 | 5,809 |
Total liabilities | 96,267 | 95,359 |
Commitments and contingencies (Note 14) | ||
Stockholders' Equity: | ||
Preferred stock, $.001 par value; 1,000,000 shares authorized; none issued | ||
Common stock, $.001 par value; 51,500,000 shares authorized, 15,431,602 shares issued and 15,320,673 shares outstanding at June 30, 2022; 15,398,368 shares issued and 15,296,735 shares outstanding at March 31, 2022 | 15 | 15 |
Additional paid-in capital | 947,237 | 946,969 |
Accumulated deficit | (941,541) | (939,482) |
Treasury stock, at cost; 110,929 shares at June 30, 2022 and 101,633 shares at March 31, 2022 | (2,124) | (2,088) |
Total stockholders' equity | 3,587 | 5,414 |
Total liabilities and stockholders' equity | $ 99,854 | $ 100,773 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2022 | Mar. 31, 2022 |
Accounts receivable, allowances | ||
Accounts receivable, allowances | $ 850 | $ 845 |
Preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 51,500,000 | 51,500,000 |
Common stock, shares issued (in shares) | 15,431,602 | 15,398,368 |
Common stock, shares outstanding (in shares) | 15,320,673 | 15,296,735 |
Treasury stock | ||
Treasury stock, shares (in shares) | 110,929 | 101,633 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Revenue: | ||
Total revenue | $ 18,652 | $ 16,082 |
Cost of goods sold: | ||
Total cost of goods sold | 13,946 | 13,434 |
Gross margin | 4,706 | 2,648 |
Operating expenses: | ||
Research and development | 490 | 883 |
Selling, general and administrative | 4,919 | 5,324 |
Total operating expenses | 5,409 | 6,207 |
Loss from operations | (703) | (3,559) |
Other income | 2 | 665 |
Interest income | 6 | 5 |
Interest expense | (1,362) | (1,235) |
Gain (loss) on debt extinguishment | 1,950 | |
Loss before provision for income taxes | (2,057) | (2,174) |
Provision for income taxes | 2 | 8 |
Net loss | $ (2,059) | $ (2,182) |
Net loss per common share attributable to common stockholders-basic (in dollars per share) | $ (0.13) | $ (0.16) |
Net loss per common share attributable to common stockholders-diluted (in dollars per share) | $ (0.13) | $ (0.16) |
Weighted average shares used to calculate basic net loss per common share attributable to common stockholders (in shares) | 15,318 | 13,226 |
Weighted average shares used to calculate diluted net loss per common share attributable to common stockholders (in shares) | 15,318 | 13,226 |
Product and accessories | ||
Revenue: | ||
Total revenue | $ 9,167 | $ 8,389 |
Cost of goods sold: | ||
Total cost of goods sold | 8,891 | 8,992 |
Parts, service and rentals | ||
Revenue: | ||
Total revenue | 9,485 | 7,693 |
Cost of goods sold: | ||
Total cost of goods sold | $ 5,055 | $ 4,442 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Treasury Stock | Total |
Balance at Mar. 31, 2021 | $ 13 | $ 934,381 | $ (919,271) | $ (1,949) | $ 13,174 |
Balance (in shares) at Mar. 31, 2021 | 12,898,144 | ||||
Balance, treasury stock (in shares) at Mar. 31, 2021 | 73,954 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Purchase of treasury stock | $ (29) | (29) | |||
Purchase of treasury stock (in shares) | 3,353 | ||||
Vested restricted stock awards | 29 | 29 | |||
Vested restricted stock awards (in shares) | 19,096 | ||||
Stock-based compensation | 305 | 305 | |||
Issuance of common stock, net of issuance costs | $ 2 | 11,203 | 11,205 | ||
Issuance of common stock, net of issuance costs (in shares) | 2,289,651 | ||||
Net loss | (2,182) | (2,182) | |||
Balance at Jun. 30, 2021 | $ 15 | 945,918 | (921,453) | $ (1,978) | 22,502 |
Balance (in shares) at Jun. 30, 2021 | 15,206,891 | ||||
Balance, treasury stock (in shares) at Jun. 30, 2021 | 77,307 | ||||
Balance at Mar. 31, 2022 | $ 15 | 946,969 | (939,482) | $ (2,088) | $ 5,414 |
Balance (in shares) at Mar. 31, 2022 | 15,398,368 | 15,398,368 | |||
Balance, treasury stock (in shares) at Mar. 31, 2022 | 101,633 | 101,633 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Purchase of treasury stock | $ (36) | $ (36) | |||
Purchase of treasury stock (in shares) | 9,296 | ||||
Vested restricted stock awards | 36 | 36 | |||
Vested restricted stock awards (in shares) | 33,234 | ||||
Stock-based compensation | 232 | 232 | |||
Net loss | (2,059) | (2,059) | |||
Balance at Jun. 30, 2022 | $ 15 | $ 947,237 | $ (941,541) | $ (2,124) | $ 3,587 |
Balance (in shares) at Jun. 30, 2022 | 15,431,602 | 15,431,602 | |||
Balance, treasury stock (in shares) at Jun. 30, 2022 | 110,929 | 110,929 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (2,059) | $ (2,182) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 661 | 386 |
Amortization of financing costs and discounts | 43 | 9 |
Amortization of right-of-use assets | 151 | 93 |
Loss (gain) on debt extinguishment | (1,950) | |
Inventory provision | 270 | 276 |
Provision for warranty expenses | 174 | 44 |
Stock-based compensation | 232 | 305 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 653 | (3,278) |
Inventories | (746) | (3,341) |
Prepaid expenses, other current assets and other assets | (253) | (107) |
Accounts payable and accrued expenses | (3,112) | 2,324 |
Accrued salaries and wages and long term liabilities | 212 | (325) |
Accrued warranty reserve | (130) | (1,990) |
Deferred revenue | 462 | (405) |
Net cash used in operating activities | (3,442) | (10,141) |
Cash Flows from Investing Activities: | ||
Expenditures for property, plant, equipment and rental assets | (1,887) | (1,200) |
Net cash used in investing activities | (1,887) | (1,200) |
Cash Flows from Financing Activities: | ||
Repayment of notes payable and lease obligations | (316) | (106) |
Cash used in employee stock-based transactions | (36) | (29) |
Net proceeds from issuance of common stock and warrants | 36 | 11,159 |
Net cash (used in) provided by financing activities | (316) | 11,024 |
Net (decrease) increase in Cash and Cash Equivalents | (5,645) | (317) |
Cash and Cash Equivalents, Beginning of Period | 22,559 | 49,533 |
Cash and Cash Equivalents, End of Period | 16,914 | 49,216 |
Supplemental Disclosures of Cash Flow Information: | ||
Interest | 1,253 | 1,324 |
Income taxes | 8 | 15 |
Supplemental Disclosures of Non-Cash Information: | ||
Acquisition of property and equipment through accounts payable and notes payable | 2,430 | 191 |
Renewal of insurance contracts financed by notes payable | 665 | 567 |
Issuance of common stock for services to be received | $ 75 | |
Right-of-use assets obtained in exchange for lease obligations | $ 512 |
Business and Organization
Business and Organization | 3 Months Ended |
Jun. 30, 2022 | |
Business and Organization | |
Business and Organization | 1. Business and Organization Capstone Green Energy Corporation (“Capstone”, or the “Company”) is a provider of customized microgrid solutions, on site resilient green Energy as a Service (Eaas) solutions, and on-site energy technology systems focused on helping customers around the globe meet their environmental, energy savings, and resiliency goals. These solutions include 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. In April 2021, the Company added additional products to its portfolio and shifted its focus to four key business lines. The Energy Conversion Products business line is driven by the Company’s industry-leading, highly efficient, low-emission, resilient microturbine energy systems, which offer scalable solutions in addition to a broad range of customer-tailored solutions, including hybrid energy systems and larger frame industrial turbines. Through the Energy as a Service business line, the Company offers rental solutions utilizing its microturbine energy systems and battery storage systems, comprehensive factory protection plan service contracts that guarantee life-cycle costs, as well as aftermarket spare parts. The Company’s two emerging business lines are Energy Storage Products and Hydrogen Energy Solutions. The Energy Storage Products business line is driven by the design and installation of microgrid storage systems creating customized solutions using a combination of battery technologies and monitoring software. Through the Company’s Hydrogen Energy Solutions business line, it offers customers a variety of hydrogen products, including the Company’s microturbine energy systems. Because these are new offerings, Energy Storage Products and Hydrogen Energy Solutions revenue has been immaterial to date. The Company was organized in 1988 and has been commercially producing its microturbine generators since 1998. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 3 Months Ended |
Jun. 30, 2022 | |
Basis of Presentation and Significant Accounting Policies | |
Basis of Presentation and Significant Accounting Policies | 2. Basis of Presentation and Significant Accounting Policies The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“generally accepted accounting principles” or “GAAP”) for interim financial information and the instructions to Form 10-Q and Regulation S-X promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). They do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The condensed consolidated balance sheet at March 31, 2022 was derived from audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the Fiscal year ended March 31, 2022. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the interim condensed consolidated financial statements include all adjustments (including normal recurring adjustments) necessary for a fair presentation of the financial condition, results of operations and cash flows for such periods. Results of operations for any interim period are not necessarily indicative of results for any other interim period or for the full year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the Fiscal Year 2022 filed with the SEC on July 13, 2022. This Quarterly Report on Form 10-Q (this “Form 10-Q”) refers to the Company’s fiscal years ending March 31 as its “Fiscal” years. Significant Accounting Policies Evaluation of Ability to Maintain Current Level of Operations the three months ended June 30, 2021. As of June 30, 2022, the Company had cash and cash equivalents of $16.9 million, outstanding debt of $51.0 million at fair value (see Note 10 – Term Note Payable 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 plan is dependent on the Company’s ability to generate cash flows from operations. Management believes that the Company will continue to make progress on its path to profitability through a cost reduction plan implemented in March 2022, expanding the EaaS revenue streams, as well as price increases on its Factory Protection Plan and certain product offerings. In March 2022, the Company implemented an expense reduction plan and announced its efforts to reduce operating costs and modify its operating model to better match its expanding EaaS business. In order to implement the expense reduction plan, the Company undertook a holistic review of its operations, taking the growing EaaS business into account. Beginning on February 28, 2022, the Company furloughed 17 employees for a period of 120 days, eliminated the position of Chief Revenue Officer, effective April 15, 2022, instituted 15% temporary pay cuts for approximately 36 employees and 25% temporary pay cuts for members of the Company’s senior leadership team, among other actions. The Company believes that the implementation of the expense reduction plan will help better align the Company’s current cost structure to support its higher margin EaaS revenues. In February 2022, the Company announced that it reached its goal of having 21.1 MW of rental units in its fleet and under contract. The EaaS rental unit timeline includes a delay between the time of manufacture and the time revenue from that unit is realized. The microturbine rental unit is built, allocated by a signed rental contract, and then commissioned at the customer site, at which point it begins to generate revenue. Management expects to have all rental units contracted, commissioned, and generating revenue by the Company’s second quarter of Fiscal 2023. Management expect rental revenue to more than double in Fiscal 2023 from the $2.8 million of rental revenue in Fiscal 2022. Additionally in March 2022, the Company announced that its increased the Distributor Support System, or DSS, program fee to 5% of prior calendar year revenue, from 3%, to support the expanding EaaS business. To help offset inflation and the rising cost of components, as well as improve our profitability, the Company implemented price increases on our Factory Protection Plan contracts effective April 1, 2022, and implemented price increases on certain of the Company’s product offerings including the C65 and C1000 products, effective May 1, 2022. The Company may seek to raise funds by selling additional securities (through the at-the-market offering program or otherwise) to the public or to selected investors or by obtaining additional debt financing. Pursuant to the A&R NPA Second Amendment (as defined below), the Company is required to use its commercially reasonable best efforts to raise at least $10 million through a sale of common stock by September 14, 2022. 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 or convertible debt securities, the fully diluted ownership percentages of existing stockholders will be reduced. In addition, any equity or debt securities that the Company would issue may have rights, preferences or privileges senior to those of the holders of the Company’s common stock. Based on the current operating plan, management anticipates that, given current working capital levels and current financial projections, including the cost reduction plan, expanding EaaS business, and price increases, 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 the Company’s first quarter of Fiscal 2023 interim condensed consolidated financial statements. Paycheck Protection Program and COVID-19 On March 27, 2020, President Trump signed the Coronavirus Aid, Relief and Economic Security (the “CARES Act”), which, among other things, outlines the provisions of the Paycheck Protection Program (the “PPP”). The Company determined that it met the criteria to be eligible to obtain a loan under the PPP because, among other reasons, in light of the COVID-19 outbreak and the uncertainty of economic conditions related thereto, the loan was necessary to support the Company’s ongoing operations. Under the PPP, the Company could obtain a U.S. Small Business Administration loan in an amount equal to the average of the Company’s monthly payroll costs (as defined under the PPP) for calendar 2019 multiplied by 2.5 (approximately 10 weeks of payroll costs). Section 1106 of the CARES Act contains provisions for the forgiveness of all or a portion of a PPP loan, subject to the satisfaction of certain requirements. The amount eligible for forgiveness is, subject to certain limitations, the sum of the Company’s payroll costs, rent and utilities paid by the Company during the eight-week period beginning on the funding date of the PPP loan. On April 24, 2020, the Company closed on a PPP loan in the amount of $2,610,200, which was transferred by the Company into an account dedicated to allowable uses of the PPP loan proceeds. On May 13, 2020, the Company repaid $660,200 of the loan in accordance with the Fourth Amendment to the Note Purchase Agreement between the Company and Goldman Sachs Specialty Lending Group, L.P. In February 2021, the Company applied for forgiveness in full of the original balance of the PPP loan and the loan was forgiven in full on June 30, 2021. The Company received a refund of $660,200 and recorded these amounts within other income on the Company’s Condensed Consolidated Statements of Operations. Despite the introduction of COVID-19 vaccines and improvements in the global economy as a whole during Fiscal 2022, the pandemic remains volatile and continues to evolve, including the emergence of variants of the virus, such as the Omicron variant. The Company will continue to assess its operations, considering the guidance of local governments and global health organizations. Basis for Consolidation |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 3 Months Ended |
Jun. 30, 2022 | |
Recently Issued Accounting Pronouncements | |
Recently Issued Accounting Pronouncements | 3. Recently Issued Accounting Pronouncements Not yet adopted In August 2020, the FASB issued ASU No. 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The amendments in this ASU reduce the number of accounting models for convertible debt instruments and convertible preferred stock in order to simplify the accounting for convertible instruments. In addition, it amends the guidance for the scope exception surrounding derivatives for contracts in an entity’s own equity. In each case, the related guidance surrounding EPS has also been amended. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2023. The Company is currently evaluating the impact of ASU 2020-06 on its consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments in this ASU provide guidance for estimating credit losses on certain types of financial instruments, including trade receivables, by introducing an approach based on expected losses. The expected loss approach will require entities to incorporate considerations of historical information, current information and reasonable forecasts. With certain exceptions, transition to the new guidance will be through a cumulative effect adjustment to opening accumulated deficit as of the beginning of the first reporting period in which the guidance is adopted. In November 2019, the FASB issued ASU 2019-10, Financial Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) (“ASU 2019-10”), which defers the adoption of ASU 2016-13 for Smaller Reporting Companies (“SRCs”) as defined by the SEC for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is currently evaluating the impact of ASU 2016-13 on its condensed consolidated financial statements and related disclosures. Management considers the applicability and impact of all Accounting Standards Updates (“ASUs”). The ASUs not listed were assessed and determined by management to be either not applicable or are expected to have minimal impact on the Company’s consolidated financial position and/or results of operations. |
Customer Concentrations and Acc
Customer Concentrations and Accounts Receivable | 3 Months Ended |
Jun. 30, 2022 | |
Customer Concentrations and Accounts Receivable | |
Customer Concentrations and Accounts Receivable | 4. Customer Concentrations and Accounts Receivable Cal Microturbine and E-Finity Distributed Generation, LLC (“E-Finity”), two of the Company’s domestic distributors, accounted for 24% and 11% of revenue for the three months ended June 30, 2022, respectively. Horizon Power Systems (“Horizon”) and E-Finity, two of the Company’s domestic distributors, accounted for 11% and 10% of revenue for the three months ended June 30, 2021, respectively. Additionally, E-Finity and Cal Microturbine accounted for 16% and 11% of net accounts receivable as of June 30, 2022. E-Finity accounted for 28% of net accounts receivable as of March 31, 2022. The Company had no bad debt expense during the three months ended June 30, 2022 and 2021. |
Inventories
Inventories | 3 Months Ended |
Jun. 30, 2022 | |
Inventories | |
Inventories | 5. 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 (in thousands): June 30, March 31, 2022 2022 Raw materials $ 22,624 $ 20,071 Work in process — — Finished goods — 1,935 Total 22,624 22,006 Less: inventory reserve (2,003) (1,861) Less: non-current portion (2,013) (1,680) Total inventory, net-current portion $ 18,608 $ 18,465 The non-current portion of inventories represent the portion of inventories in excess of amounts expected to be sold or used in the next twelve months and primarily comprise of repair parts for older generation products still in operation but not technologically compatible with current configurations. The weighted average age of the non-current portion of inventories on hand as of June 30, 2022 is 1.2 years. The Company expects to use the non-current portion of the inventories on hand as of June 30, 2022 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 $ 766 25 to 36 months 1,247 Total $ 2,013 |
Property, Plant, Equipment and
Property, Plant, Equipment and Rental Assets | 3 Months Ended |
Jun. 30, 2022 | |
Property, Plant, Equipment and Rental Assets | |
Property, Plant, Equipment and Rental Assets | 6. Property, Plant, Equipment and Rental Assets Property, plant, equipment and rental assets consisted of the following (in thousands): June 30, March 31, 2022 2022 Machinery, equipment, automobiles and furniture $ 16,156 $ 15,945 Leasehold improvements 8,868 8,848 Molds and tooling 3,499 3,469 Rental assets 21,135 17,079 49,658 45,341 Less: accumulated depreciation (27,964) (27,303) Total property, plant, equipment and rental assets, net $ 21,694 $ 18,038 During the three months ended June 30, 2022, the Company deployed an additional 4.5 megawatts (“MWs”) of microturbine systems with a book value of approximately $4.1 million under its long-term rental program, bringing the total rental fleet to 25.6 MWs. The Company regularly assesses the useful lives of property and equipment and retires assets no longer in service. Depreciation expense for property, plant, equipment and rental assets was $0.7 million and $0.4 million for the three months ended June 30, 2022 and 2021, respectively. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Jun. 30, 2022 | |
Stock-Based Compensation | |
Stock-Based Compensation | 7. Stock-Based Compensation The following table summarizes, by condensed consolidated statements of operations line item, stock-based compensation expense (in thousands): Three Months Ended June 30, 2022 2021 Cost of goods sold $ 3 $ 27 Research and development 25 17 Selling, general and administrative 204 261 Stock-based compensation expense $ 232 $ 305 Stock Plans 2000 Equity Incentive Plan and 2017 Equity Incentive Plan In June 2017, the Company’s Board adopted the Capstone Green Energy 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 initially provided for awards of up to 300,000 shares of Common Stock. The 2017 Plan is administered by the Compensation and Human Capital 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 300,000 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. Since this time, the Company’s stockholders have approved amendments to increase the aggregate number of shares authorized for issuance under the 2017 Plan by an additional 1,600,000 shares of Common Stock, including, most recently, on June 2, 2021, the Company’s Board of Directors adopted Amendment No. 4 (the “Plan Amendment”) of the 2017 Plan to increase the aggregate number of shares of Common Stock authorized for issuance under the 2017 Plan by 500,000 shares of Common Stock. The Plan amendment was approved by the Company’s stockholders at the 2021 annual meeting of stockholders on August 27, 2021. As of June 30, 2022, there were 709,995 shares available for future grants under the 2017 Plan. Restricted Stock Units and Performance Restricted Stock Units The Company issued restricted stock units under the Company’s 2000 Equity Incentive Plan, as well as issued (and may in the future issue) 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. The restricted stock units issued to employees vest over a period of two three one one one one date. The following table summarizes restricted stock unit and performance restricted stock unit (“PRSU”) activity during the three months ended June 30, 2022: Weighted Average Grant Date Fair Restricted Stock Units and Performance Restricted Stock Units Shares Value Non-vested restricted stock units outstanding at March 31, 2022 591,805 $ 5.66 Granted 200,889 2.44 Vested and issued (33,234) 8.58 Forfeited (96,176) 4.86 Non-vested restricted stock units outstanding at June 30, 2022 663,284 4.65 Restricted stock units expected to vest beyond June 30, 2022 663,284 $ 4.65 The following table provides additional information on restricted stock units and performance restricted stock units: Three Months Ended June 30, 2022 2021 Restricted stock compensation expense (in thousands) $ 232 $ 305 Aggregate fair value of restricted stock units vested and issued (in thousands) $ 129 $ 160 Weighted average grant date fair value of restricted stock units granted during the period $ 2.44 $ 6.35 As of June 30, 2022, there was approximately $2.0 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 2.1 years. The Company’s PRSU activity is included in the above restricted stock units tables. The PRSU program has a three-year performance measurement period. The performance measurement occurs in the third year (for a three-year grant) following the grant date. The program is intended to have overlapping performance measurement periods (e.g., a new three-year cycle begins each year on April 1), subject to Compensation Committee approval. The overall performance at the end of the three-year period will be defined as the average of the yearly goals to determine payout. Overall performance and payout at the end of the three-year period will be defined as the average of the three annual goals performance versus that years actual. At the end of each performance measurement period, the Compensation Committee will determine the achievement against the performance objectives. During the first quarter of Fiscal 2023, the Company granted 72,412 PRSUs with a three-year performance measurement and the criteria measured by the Company’s aftermarket sales absorption. There were no PRSUs granted during the first quarter of Fiscal 2022. The target PRSU awards for each participant, will be paid upon achievement of the target level of performance for cash flow from operations and aftermarket sale absorption, taking into account the applicable weighing for the individual metric. Achievement of a performance goal at the threshold level will result in a payment that is 50% of the target PRSU award. Achievement of a performance goal at the maximum level will result in a payment that is 150% of the target PRSU award. The Compensation Committee will use an interpolation table that weighs performance between levels for determining the portion of the Target PRSU that is earned. The weighted average per share grant date fair value of PRSUs granted during the first quarter of Fiscal 2023 was $3.80. Based on the Company’s assessment as of June 30, 2022, the Company will not meet the threshold of the performance measurements, and as a result, no compensation expense was recorded during the three months ended June 30, 2022 and 2021. Compensation expense is recognized over the corresponding requisite service period and will be adjusted in subsequent reporting periods if the Company’s assessment of the probable level of achievement of the performance goals change. The Company will continue to assess the likelihood of the PRSU threshold being met until the end of the applicable performance period. Stockholder Rights Plan On May 6, 2019, the Board declared a dividend of one right (a “New Right”) for each of the Company’s issued and outstanding shares of Common Stock. The dividend was 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 The NOL Rights Agreement replaced 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% or greater shareholder and (ii) discouraging any existing 4.9% or greater 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 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. On April 7, 2022, the Board approved an extension of the NOL Rights Agreement from May 6, 2022 to May 6, 2025, subject to obtaining stockholder approval of such extension. The Company intends to seek that approval at the 2022 annual meeting of stockholders on September 12, 2022. |
Offerings of Common Stock and W
Offerings of Common Stock and Warrants | 3 Months Ended |
Jun. 30, 2022 | |
Offerings of Common Stock and Warrants | |
Offerings of Common Stock and Warrants | 8. Offerings of Common Stock and Warrants Common Stock Offering On June 17, 2021, the Company entered into an amended and restated underwriting agreement (the “Underwriting Agreement”) with H.C. Wainwright & Co., LLC (the “Underwriter”) whereby the Company agreed to sell to the Underwriter, and the Underwriter agreed to purchase, in a firm commitment underwritten public offering 1,904,763 shares (the “Shares”) of the Company’s Common Stock, $0.001 par value per share (the “Offering”). The offering price to the public in the Offering was $5.25 per share of Common Stock, and the Underwriter agreed to purchase the Shares from the Company pursuant to the Underwriting Agreement at a price of $4.91 per share, representing an underwriting discount of 6.5%. Pursuant to the Underwriting Agreement, the Company also granted the Underwriter an option to purchase, for a period of 30 days from the date of the Underwriting Agreement, up to an additional 285,714 shares of Common Stock (the “Option Shares”). On June 21, 2021, the Underwriter exercised the option in full. The Offering of the Shares was registered pursuant to a shelf registration statement (No. 333-254290) on Form S-3 filed by the Company with the Securities and Exchange Commission on March 22, 2021, and declared effective on April 14, 2021 (the “Registration Statement”), and made pursuant to a prospectus supplement, dated June 17, 2021, and accompanying prospectus that form a part of the Registration Statement relating to the Offering. The Offering closed on June 22, 2021, and the Company received net proceeds of $10.5 million after deducting $1.0 million underwriting discounts, commissions and offering expenses paid by the Company. Warrants Goldman Warrant On February 4, 2019, the Company sold to Goldman Sachs & Co. LLC (the “Holder”), a Purchase Warrant Warrant On December 9, 2019, the Company entered into an Amendment No. 1 to the Purchase Warrant for Common Shares (the “Amendment No. 1”) with Special Situations Investing Group II, LLC (as successor in interest to Goldman Sachs & Co. LLC) (the “Warrant Holder”) that amends the Warrant. The Amendment No. 1 amended the Warrant to increase the number of Warrant Shares issuable under the Warrant (on a post-reverse split basis) and to decrease the exercise price from $8.86 per share (on a post-reverse split basis) to $3.80 per share (the “Per Share Warrant Exercise Price”). The Amendment No. 1 also amends the Warrant such that the Per Share Anti-Dilution Price is equal to the Per Share Warrant Exercise Price. As a result of the decrease in exercise price, the Company recorded the change in valuation of $0.3 million as additional debt discount with a corresponding entry to additional paid-in capital in the condensed consolidated balance sheets and statements of stockholders equity. On June 16, 2020, the Company entered into an Amendment No. 2 to the Purchase Warrant for Common Shares (“Amendment No. 2”) with the Warrant Holder to increase the number of Warrant Shares (as defined therein) issuable under the Warrant and to decrease the exercise price from $3.80 per share to $2.61 per share (the “Per Share Warrant Exercise Price”). The Company would receive aggregate gross proceeds of $1,186,313 if the outstanding Warrant is exercised at the new Per Share Warrant Exercise Price. Amendment No. 2 also amends the Warrant such that the Per Share Anti-Dilution Price (as defined therein) is equal to the Per Share Warrant Exercise Price as provided in the Amendment No. 2 to the Warrant. As a result of the decrease in exercise price, the Company recorded the change in valuation of $0.1 million as additional debt discount with a corresponding entry to additional paid in capital in the condensed consolidated balance sheets and statements of stockholders equity. All other terms and provisions in the Warrant remain in effect. Goldman “2020 Warrant” On October 1, 2020, the Company entered into an Amendment No. 3 to the Purchase Warrant for Common Shares (the “Amendment No. 3”) with Special Situations Investing Group II, LLC (as successor in interest to Goldman Sachs & Co. LLC) (the “Warrant Holder”) that amends that certain Purchase Warrant for Common Shares originally issued by the Company to Goldman Sachs & Co. LLC, dated February 4, 2019, as amended (the “Original Warrant”). Amendment No. 3 amends the Original Warrant to amend Section 2.1, Section 2.2(c) and Section 18.1 of the Warrant to, among other things, make certain changes necessitated by the issuance of a second Warrant (the “2020 Warrant”) to the Warrant Holder pursuant to the Company’s entry into the Amended & Restated (“A&R”) Note Purchase Agreement (See Note 10 – Term Note Payable On October 1, 2020, and pursuant to the Company’s entry into the A&R Note Purchase Agreement, the Company sold to the Warrant Holder the 2020 Warrant Warrant Option Pricing model Risk-free interest rate 0.2% Contractual term 3 years Expected volatility 81.0% September 2019 Pre-Funded and Series D Warrants On September 4, 2019, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with certain institutional and accredited investors pursuant to which the Company agreed to issue and sell in a registered direct offering (the “Registered Direct Offering”) an aggregate of 580,000 shares of Common Stock, at a negotiated purchase price of $5.00 per share, and pre-funded warrants to purchase up to an aggregate of 440,000 shares of Common Stock at a negotiated purchase price of $5.00 per Pre-Funded Warrant, for aggregate gross proceeds of approximately $5.1 million (580,000 shares of Common Stock plus 440,000 pre-funded warrants at a $5.00 per share purchase price), before deducting placement agent fees and other offering expenses. Net proceeds from the offering were $4.6 million. The offering closed on September 9, 2019. On October 24, 2019, a warrant holder exercised its rights to the warrant agreement to exercise on a cash basis 440,000 pre-funded warrants at an exercise price of $0.001 per share under the warrant agreement. In a concurrent private placement, the Company issued to the purchasers warrants to purchase 765,000 shares of Common Stock, which represent 75% of the number of shares of Common Stock and shares underlying the Pre-Funded Warrants purchased in the Registered Direct Offering, pursuant to the Securities Purchase Agreement. The Common Warrants will be exercisable for shares of Common Stock at an initial exercise price of $6.12 per share for a period of five years, starting on April 2, 2020 and expiring on April 2, 2025. In January 2021, three warrant holders exercised their rights to the warrant agreement to exercise on a cashless basis 690,000 Series D warrants at an exercise price of $6.12 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 352,279 shares of Common Stock. As of June 30, 2022, there were 75,000 Series D warrants outstanding. Stock to Vendors From time to time, the Company may enter into agreements with vendors for sponsorship, marketing or investor relation services whereby it may agree to compensate the vendor in cash and unregistered shares of Common Stock of the Company. The value of the unregistered shares of Common Stock is recorded as prepaid marketing cost and included in prepaid expenses and other current assets and stockholder’s equity in the Condensed Consolidated Balance Sheets and is amortized in proportion to the terms of their respective agreements. On February 17, 2021 and April 1, 2021, the Company issued 105,933 and 9,541 shares of the Company’s Common Stock, under a sponsorship agreement and an investor relations consulting agreement, respectively to vendors. The prepaid marketing cost amortization associated with the Common Stock issued were $0.5 million during the three months ended June 30, 2021 and were included in selling, general and administrative expense in the Condensed Consolidated Statements of Operations. As of June 30, 2022, there are no amounts remaining in prepaid marketing cost, prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets related to the value of shares issued under the sponsorship agreement and investor relations consulting agreement. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Jun. 30, 2022 | |
Fair Value Measurements | |
Fair Value Measurements | 9. Fair Value Measurements The FASB has established a framework for measuring fair value using 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. 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. 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 must maximize the use of observable inputs and minimize the use of unobservable inputs. Basis for Valuation The carrying values reported in the condensed consolidated balance sheets for cash and cash equivalents, accounts receivable and accounts payable approximate their fair values because of the immediate or short-term maturities of these financial instruments. 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 and as of June 30, 2022 includes the Three-Year Term Note as discussed in Note 10 – Term Note Payable As of As of June 30, 2022 March 31, 2022 Carrying Estimated Carrying Estimated Value Fair Value Value Fair Value Term note payable $ 50,957 $ 51,000 $ 50,949 $ 51,000 PPP loan — — — — Total $ 50,957 $ 51,000 $ 50,949 $ 51,000 |
Term Note Payable
Term Note Payable | 3 Months Ended |
Jun. 30, 2022 | |
Term Note Payable | |
Term Note Payable | 10. Term Note Payable Three-Year Term Note On February 4, 2019, the Company entered into a Note Purchase Agreement (as amended, the “Note Purchase Agreement”), by and among the Company, certain subsidiaries of the Company party thereto as guarantors, Goldman Sachs Specialty Lending Holdings, Inc. and any other purchasers party thereto from time to time (collectively, the “Purchaser”). Under the Note Purchase Agreement, the Company sold to the Purchaser $30.0 million aggregate principal amount of senior secured notes (the “Notes”), bearing 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. On October 1, 2020, the Company entered into an Amended & Restated Note Purchase Agreement (the “A&R Note Purchase Agreement”). The A&R Note Purchase Agreement amends and restates that certain Note Purchase Agreement, as amended, dated February 4, 2019, by and among the Company, certain of its subsidiaries as guarantors, the Collateral Agent and various purchasers party thereto. Under the A&R Note Purchase Agreement, the Company issued an additional $20 million in Notes, increasing total borrowings to $50.0 million. Following entry into the A&R Note Purchase Agreement, all outstanding Notes bear interest at the Adjusted (London Interbank Offer) LIBO Rate (as defined in the A&R Note Purchase Agreement) plus 8.75% per annum, payable on the last day of each interest period of one-, two-, three- or six-months (but, in the case of a six-month interest period, every three months). The Notes do not amortize and the entire principal balance is due in a single payment on the maturity date, October 1, 2023. As of June 30, 2022, $51.0 million in borrowings were outstanding under the Notes, which includes the accrual for an exit fee to be paid at maturity or upon pre-payment. Obligations under the A&R Note Purchase Agreement are secured by all of the Company’s assets, including intellectual property and general intangibles. The A&R Note Purchase Agreement contains customary covenants, including, among others, covenants that restrict the Company’s 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 the Company to, among other things, provide annual, quarterly and monthly financial statements, together with related compliance certificates, maintain its property in good condition, maintain insurance and comply with applicable laws. The financial covenants of the A&R Note Purchase Agreement require the Company not to exceed specified levels of Adjusted EBITDA losses relative to its financial model, beginning with the fiscal quarter ending September 30, 2021. Additionally, the Company shall not permit the Company’s minimum consolidated liquidity, which consists of its cash and cash equivalents, to be less than $9.0 million. Furthermore, the covenants require the Company to expand its Rental Fleet (as defined in the A&R Note Purchase Agreement) by (i) at least 6.25 MW by the 9-month anniversary of the Closing Date, and (ii) at least 12.50 MW by the 18-month anniversary of the Closing Date. On May 13, 2021, the Company and the collateral agent, entered into a First Amendment, dated as of May 13, 2021 (the “Amendment”), to the A&R Note Purchase Agreement. The Amendment amends certain provisions of the A&R Note Purchase Agreement, including to (a) require the Company to expand its Rental Fleet (as defined in the A&R Note Purchase Agreement) by (i) at least 2.00 MW by the 9-month anniversary of the Closing Date (instead of 6.25 MW as provided in the A&R Note Purchase Agreement prior to the Amendment), and (ii) at least 12.50 MW by the 18-month anniversary of the Closing Date (which is unchanged from the covenant set forth in in the A&R Note Purchase Agreement prior to the Amendment), and (b) increase the Company’s minimum consolidated liquidity requirement from $9.0 million to $12.2 million for the period from the Amendment Date to March 31, 2022, and $9.0 million thereafter. The financial covenants of the A&R Note Purchase Agreement require the Company not to exceed specified levels of Adjusted EBITDA losses relative to its financial model, beginning with the fiscal quarter ending September 30, 2021. As of March 31, 2022, the Company was not in compliance with the Adjusted EBITDA covenant contained in the A&R Note Purchase Agreement and did not cure such non-compliance by prepaying the Notes. As a result, the Company was in breach of the Adjusted EBITDA covenant as of May 27, 2022. On July 13, 2022 the Company entered into the A&R NPA Second Amendment with the Purchaser and the Collateral Agent, pursuant to which (i) the Purchaser and the Collateral Agent waived our breach of the Adjusted EBITDA covenant and (ii) the A&R Note Purchase Agreement has been amended to, among other things, add certain new covenants, including requirements that the Company use its commercially reasonable best efforts to raise at least $10 million through a sale of its common stock by September 14, 2022 and refinance the Notes by October 1, 2022. The Notes have been recorded net of a discount based on the debt issuance costs totaling $0.1 million. Amortization of the debt discount and debt issuance costs was $9,000 for the three months ended June 30, 2022, based on an effective interest rate, and has been recorded as interest expense in the condensed consolidated statements of operations. Interest expense related to the Notes payable during the three months ended June 30, 2022 and 2021 was $1.4 million and $1.2 million, and includes $9,000 in amortization of debt issuance costs in both periods. SBA Paycheck Protection Program Loan On April 15, 2020, the Company submitted an application to its banking partner Western Alliance Bank, an Arizona corporation (“Western Alliance”) under the Small Business Administration (the “SBA”) Paycheck Protection Program (“PPP”) enabled by the Coronavirus Aid, Relief and Economic Security Act of 2020 (the “CARES Act”). Western Alliance entered into a note on April 24, 2020 with the Company and agreed to make available to the Company a loan in the amount of $2,610,200 (the “PPP Loan”). The Company received the full amount of the PPP Loan on April 24, 2020 (the “Initial Disbursement Date) and has used the proceeds to support fixed costs such as payroll costs, rent and utilities in accordance with the relevant terms and conditions of the CARES Act. The advance under the Loan bears interest at a rate per annum of 1%. The term of the PPP Loan is two years, ending April 24, 2022. On May 13, 2020, the Company repaid $660,200 of the PPP Loan in accordance with the Fourth Amendment to the Note Purchase Agreement between the Company and Goldman Sachs Specialty Lending Group, L.P. In February 2021, the Company applied for forgiveness of the PPP Loan, and the loan was forgiven in full on June 30, 2021 (See “Gain on extinguishment of debt” below). Gain on extinguishment of debt |
Accrued Warranty Reserve
Accrued Warranty Reserve | 3 Months Ended |
Jun. 30, 2022 | |
Accrued Warranty Reserve | |
Accrued Warranty Reserve | 11. Accrued Warranty Reserve 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 microturbine product sold and the 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. Changes in the accrued warranty reserve during the three months ended June 30, 2022 are as follows (in thousands): Balance, beginning of the period $ 1,483 Standard warranty provision 174 Deductions for warranty claims (130) Balance, end of the period $ 1,527 During the fourth quarter of Fiscal 2021, the Company recorded a specific $4.9 million accrual related to a reliability repair program to account for the replacement of remaining high risk failure parts in some of the Company’s fielded units due to a supplier defect. As of June 30, 2022, the accrual related to this reliability repair program was zero as the Company has determined it replaced a sufficient quantity of high risk failure parts in its fielded units under this reliability repair program and that it should be terminated. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Jun. 30, 2022 | |
Revenue Recognition | |
Revenue Recognition | 12. Revenue Recognition 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. The following table presents disaggregated revenue by business group (in thousands): Three Months Ended June 30, 2022 2021 Microturbine Products $ 8,965 $ 8,312 Accessories 202 77 Total Product and Accessories 9,167 8,389 Parts and Service 9,485 7,693 Total Revenue $ 18,652 $ 16,082 The following table presents disaggregated revenue by geography based on the primary operating location of the Company’s customers (in thousands): Three Months Ended June 30, 2022 2021 United States $ 11,676 $ 7,343 Mexico 610 441 All other North America 631 39 Total North America 12,917 7,823 Russia 340 1,257 All other Europe 3,635 2,785 Total Europe 3,975 4,042 Asia 471 364 Australia 714 1,411 All other 575 2,442 Total Revenue $ 18,652 $ 16,082 Contract Balances The Company’s 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 deferred revenue non-current liabilities in the Condensed Consolidated Balance Sheets. As of June 30, 2022, the balance of deferred revenue was approximately $10.6 million compared to $10.2 million as of March 31, 2022. The overall increase of $0.4 million was due to increases in deferred revenue attributable to FPP contracts. As of June 30, 2022, deferred revenue consisted of the following (in thousands): FPP Balance, beginning of the period $ 4,544 FPP Billings 5,316 FPP Revenue recognized (4,812) Balance attributed to FPP contracts 5,048 DSS Program 1,993 Deposits 3,587 Deferred revenue balance, end of the period $ 10,628 Deferred revenue attributed to FPP contracts represents the unearned portion of the Company’s contracts. FPP contracts are generally paid quarterly in advance with revenue recognized on a straight line basis over the contract period. As of June 30, 2022, approximately $5.0 million of revenue is expected to be recognized from remaining performance obligations for FPP contracts. The Company expects to recognize revenue on approximately $4.1 million of these remaining performance obligations over the next 12 months and the balance of $0.9 million will be recognized thereafter. The DSS program provides additional support for distributor business development activities, customer lead generation, brand awareness and tailored marketing services for each of the Company’s major geography and market vertical. This program is funded by the Company’s distributors and was developed to provide improved worldwide distributor training, sales efficiency, website development, company branding and provide funding for increased strategic marketing activities. DSS program revenue is generally paid quarterly with revenue recognized on a straight-line basis over a calendar year period. Deposits are primarily non-refundable cash payments from distributors for future orders. 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. As of June 30, 2022, the FPP backlog was approximately $79.7 million, which represents the value of the contractual agreement for FPP services that had not been earned and extends through Fiscal 2043. Practical Expedients The Company applies 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 in the accompanying Condensed Consolidated Statements of Operations. |
Other Assets
Other Assets | 3 Months Ended |
Jun. 30, 2022 | |
Other Assets | |
Other Assets | 13. Other Assets The Company was 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. In 2013, the Company reached its 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. 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 statements 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 an annual basis, the Company performs a re-forecast of C200 System unit shipments, to determine if an adjustment to the effective royalty rate is necessary. Accordingly, if the Company’s future projections change, its effective royalty rates may also change, which could affect the amount and timing of royalty expense the Company recognizes. If impairment exists, then the prepaid royalty asset would 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): June 30, March 31, 2022 2022 Other current assets $ 124 $ 124 Other assets 2,475 2,506 Royalty-related assets $ 2,599 $ 2,630 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | 14. Commitments and Contingencies Purchase Commitments As of June 30, 2022, the Company had firm commitments to purchase inventories of approximately $48.8 million through Fiscal 2023. Certain inventory delivery dates and related payments are not firmly scheduled; therefore, amounts under these firm purchase commitments will be payable upon the receipt of the related inventories. Lease Commitments See Note 15 – Leases 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 June 30, 2022, no significant inventories of this nature were held at distributors. Legal Matters Capstone Turbine Corporation v. Turbine International, LLC. On February 3, 2020, Capstone Turbine Corporation filed suit against its former distributor, Turbine International, LLC (“Turbine Intl.”), in the Superior Court of California for the County of Los Angeles under the following caption: Capstone Turbine Corporation v. Turbine International, LLC; Case No. 20STCV04372 (“Capstone-Turbine Intl. Litigation”). The Company has alleged claims against Turbine Intl. for breach of contract and for injunctive relief relating to the parties’ prior distributor relationship, which terminated at the end of March of 2018, and Turbine Intl.’s failure to satisfy its payment obligations under certain financial agreements, namely an accounts receivable agreement and promissory note in favor of Capstone. As remedies for these claims, the Company is seeking compensatory, consequential, along with injunctive relief and attorney’s fees, interest, and costs. On March 18, 2020, Turbine Intl. filed its answer and cross-claims in the Capstone-Turbine Intl. Litigation. In its cross-claims, Turbine Intl. asserted claims against Capstone, and individually against Mr. James Crouse, Capstone’s Chief Revenue Officer, for breach of contract under the distributor agreement, accounts receivable agreement and promissory note, fraud, breach of the covenant of good faith and fair dealing, unjust enrichment and constructive trust, negligent misrepresentation, violation of the California unfair practices act, violation of racketeer influenced corrupt organizations act, and conspiracy to commit fraud. As remedies for these alleged claims, Turbine Intl. are seeking compensatory, consequential, and punitive damages along with attorney’s fees, interest, and costs. Capstone answered the cross-claims on May 7, 2020. On June 29, 2020, Capstone filed a motion to file a First Amended Complaint that would add, among other things, a claim for enforcement of a guaranty signed by an entity related to Turbine Intl., Hispania Petroleum, S.A., and personal claims against the principals of Turbine Intl. and Hispania. That motion was granted on August 19, 2020, and the First Amended Complaint (“FAC”) is now on file. All of the new defendants have been served and have filed answers. A trial date in the matter has been set for December 12, 2022. Discovery is ongoing. |
Leases
Leases | 3 Months Ended |
Jun. 30, 2022 | |
Leases | |
Leases | 15. Leases The Company leases offices and manufacturing facilities under various non-cancelable operating leases expiring at various times through Fiscal 2037. 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. Lease expense is recognized on a straight-line basis over the term of the lease. During the first quarter of Fiscal 2023, the Company has entered into several rental agreements, to rent used microturbine equipment from customers where that equipment was not currently in use. The Company is then renting this equipment to end users as part of its Energy as a Service business. These agreements totaling approximately 11.8 MW of microturbines, have an average term of 36 months, and have a total commitment value of approximately $9.5 million. The components of lease expense were as follows (in thousands): Three Months Ended June 30, 2022 2021 Operating lease cost $ 365 $ 252 Supplemental balance sheet information related to the leases was as follows (dollars in thousands): June 30, 2022 March 31, 2022 Operating lease right-of-use assets $ 6,321 $ 5,959 Total operating lease right-of-use assets $ 6,321 $ 5,959 Operating lease liability, current $ 764 $ 586 Operating lease liability, non-current 5,774 5,619 Total operating lease liabilities $ 6,538 $ 6,205 Weighted average remaining lease life 7.77 years 8.35 years Weighted average discount rate 12.00% 12.00% The Company records its right-of-use assets within other assets (non-current) and its operating lease liabilities within current and long-term portion of notes payable and lease obligations. Supplemental cash flow information related to the leases was as follows (in thousands): Three Months Ended June 30, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 393 $ 273 Right-of-use assets obtained in exchange for lease obligations Operating leases $ 512 $ — Maturities of operating lease liabilities as of June 30, 2022 were as follows (in thousands): Operating Year Ending March 31, Leases 2023 (remainder of fiscal year) $ 1,128 2024 1,529 2025 1,453 2026 1,243 2027 1,279 Thereafter 3,358 Total lease payments $ 9,990 Less: imputed interest (3,452) Present value of operating lease liabilities $ 6,538 |
Net Loss Per Common Share
Net Loss Per Common Share | 3 Months Ended |
Jun. 30, 2022 | |
Net Loss Per Common Share | |
Net Loss Per Common Share | 16. 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 anti-dilutive. Outstanding stock options and restricted stock units at June 30, 2022 and 2021 totaled 0.7 million and 0.6 million, respectively. As of June 30, 2022 and 2021, the number of warrants excluded from diluted net loss per common share computations was approximately 0.8 million and 1.0 million, respectively. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Jun. 30, 2022 | |
Subsequent Events | |
Subsequent Events | 17. Subsequent Events The Company has evaluated subsequent events through the filing date of this Form 10-Q with the SEC, to ensure that this filing includes all appropriate footnote disclosure of events both recognized in the financial statements as of June 30, 2022, and events which occurred subsequently but were not recognized in the financial statements. Except as described below, there were no other subsequent events which required recognition, adjustment to or disclosure in the financial statements. On July 13, 2022 the Company entered into the Second Amendment to the A&R Note Purchase Agreement with the Purchaser and the Collateral Agent, pursuant to which (i) the Purchaser and the Collateral Agent waived our breach of the Adjusted EBITDA covenant and (ii) the A&R Note Purchase Agreement has been amended to, among other things, add certain new covenants, including requirements that we use our commercially reasonable best efforts to raise at least $10 million through a sale of our common stock by September 14, 2022 and refinance the Notes by October 1, 2022. On August 10, 2022 the Company entered into the Third Amendment to the A&R Note Purchase Agreement with the Purchaser and the Collateral Agent, pursuant to which the Purchaser and the Collateral Agent extended to August 31, 2022 the date by which the Company is obligated to enter into an engagement agreement with an investment banking professional services firm in connection with a repayment of all of the Obligations under the Notes. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 3 Months Ended |
Jun. 30, 2022 | |
Basis of Presentation and Significant Accounting Policies | |
Evaluation of Ability to Maintain Current Level of Operations | Evaluation of Ability to Maintain Current Level of Operations the three months ended June 30, 2021. As of June 30, 2022, the Company had cash and cash equivalents of $16.9 million, outstanding debt of $51.0 million at fair value (see Note 10 – Term Note Payable 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 plan is dependent on the Company’s ability to generate cash flows from operations. Management believes that the Company will continue to make progress on its path to profitability through a cost reduction plan implemented in March 2022, expanding the EaaS revenue streams, as well as price increases on its Factory Protection Plan and certain product offerings. In March 2022, the Company implemented an expense reduction plan and announced its efforts to reduce operating costs and modify its operating model to better match its expanding EaaS business. In order to implement the expense reduction plan, the Company undertook a holistic review of its operations, taking the growing EaaS business into account. Beginning on February 28, 2022, the Company furloughed 17 employees for a period of 120 days, eliminated the position of Chief Revenue Officer, effective April 15, 2022, instituted 15% temporary pay cuts for approximately 36 employees and 25% temporary pay cuts for members of the Company’s senior leadership team, among other actions. The Company believes that the implementation of the expense reduction plan will help better align the Company’s current cost structure to support its higher margin EaaS revenues. In February 2022, the Company announced that it reached its goal of having 21.1 MW of rental units in its fleet and under contract. The EaaS rental unit timeline includes a delay between the time of manufacture and the time revenue from that unit is realized. The microturbine rental unit is built, allocated by a signed rental contract, and then commissioned at the customer site, at which point it begins to generate revenue. Management expects to have all rental units contracted, commissioned, and generating revenue by the Company’s second quarter of Fiscal 2023. Management expect rental revenue to more than double in Fiscal 2023 from the $2.8 million of rental revenue in Fiscal 2022. Additionally in March 2022, the Company announced that its increased the Distributor Support System, or DSS, program fee to 5% of prior calendar year revenue, from 3%, to support the expanding EaaS business. To help offset inflation and the rising cost of components, as well as improve our profitability, the Company implemented price increases on our Factory Protection Plan contracts effective April 1, 2022, and implemented price increases on certain of the Company’s product offerings including the C65 and C1000 products, effective May 1, 2022. The Company may seek to raise funds by selling additional securities (through the at-the-market offering program or otherwise) to the public or to selected investors or by obtaining additional debt financing. Pursuant to the A&R NPA Second Amendment (as defined below), the Company is required to use its commercially reasonable best efforts to raise at least $10 million through a sale of common stock by September 14, 2022. 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 or convertible debt securities, the fully diluted ownership percentages of existing stockholders will be reduced. In addition, any equity or debt securities that the Company would issue may have rights, preferences or privileges senior to those of the holders of the Company’s common stock. Based on the current operating plan, management anticipates that, given current working capital levels and current financial projections, including the cost reduction plan, expanding EaaS business, and price increases, 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 the Company’s first quarter of Fiscal 2023 interim condensed consolidated financial statements. |
Company Response to COVID-19 | Paycheck Protection Program and COVID-19 On March 27, 2020, President Trump signed the Coronavirus Aid, Relief and Economic Security (the “CARES Act”), which, among other things, outlines the provisions of the Paycheck Protection Program (the “PPP”). The Company determined that it met the criteria to be eligible to obtain a loan under the PPP because, among other reasons, in light of the COVID-19 outbreak and the uncertainty of economic conditions related thereto, the loan was necessary to support the Company’s ongoing operations. Under the PPP, the Company could obtain a U.S. Small Business Administration loan in an amount equal to the average of the Company’s monthly payroll costs (as defined under the PPP) for calendar 2019 multiplied by 2.5 (approximately 10 weeks of payroll costs). Section 1106 of the CARES Act contains provisions for the forgiveness of all or a portion of a PPP loan, subject to the satisfaction of certain requirements. The amount eligible for forgiveness is, subject to certain limitations, the sum of the Company’s payroll costs, rent and utilities paid by the Company during the eight-week period beginning on the funding date of the PPP loan. On April 24, 2020, the Company closed on a PPP loan in the amount of $2,610,200, which was transferred by the Company into an account dedicated to allowable uses of the PPP loan proceeds. On May 13, 2020, the Company repaid $660,200 of the loan in accordance with the Fourth Amendment to the Note Purchase Agreement between the Company and Goldman Sachs Specialty Lending Group, L.P. In February 2021, the Company applied for forgiveness in full of the original balance of the PPP loan and the loan was forgiven in full on June 30, 2021. The Company received a refund of $660,200 and recorded these amounts within other income on the Company’s Condensed Consolidated Statements of Operations. Despite the introduction of COVID-19 vaccines and improvements in the global economy as a whole during Fiscal 2022, the pandemic remains volatile and continues to evolve, including the emergence of variants of the virus, such as the Omicron variant. The Company will continue to assess its operations, considering the guidance of local governments and global health organizations. |
Basis for Consolidation | Basis for Consolidation |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Jun. 30, 2022 | |
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 (in thousands): June 30, March 31, 2022 2022 Raw materials $ 22,624 $ 20,071 Work in process — — Finished goods — 1,935 Total 22,624 22,006 Less: inventory reserve (2,003) (1,861) Less: non-current portion (2,013) (1,680) Total inventory, net-current portion $ 18,608 $ 18,465 |
Schedule of expected usage for non-current inventory | Non-current Inventory Balance Expected Expected Period of Use to be Used 13 to 24 months $ 766 25 to 36 months 1,247 Total $ 2,013 |
Property, Plant, Equipment an_2
Property, Plant, Equipment and Rental Assets (Tables) | 3 Months Ended |
Jun. 30, 2022 | |
Property, Plant, Equipment and Rental Assets | |
Schedule of property, plant, equipment and rental assets | Property, plant, equipment and rental assets consisted of the following (in thousands): June 30, March 31, 2022 2022 Machinery, equipment, automobiles and furniture $ 16,156 $ 15,945 Leasehold improvements 8,868 8,848 Molds and tooling 3,499 3,469 Rental assets 21,135 17,079 49,658 45,341 Less: accumulated depreciation (27,964) (27,303) Total property, plant, equipment and rental assets, net $ 21,694 $ 18,038 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Jun. 30, 2022 | |
Stock-Based Compensation | |
Summary of stock-based compensation expense by statement of operations line item | The following table summarizes, by condensed consolidated statements of operations line item, stock-based compensation expense (in thousands): Three Months Ended June 30, 2022 2021 Cost of goods sold $ 3 $ 27 Research and development 25 17 Selling, general and administrative 204 261 Stock-based compensation expense $ 232 $ 305 |
Summary of stock option activity | Weighted Average Grant Date Fair Restricted Stock Units and Performance Restricted Stock Units Shares Value Non-vested restricted stock units outstanding at March 31, 2022 591,805 $ 5.66 Granted 200,889 2.44 Vested and issued (33,234) 8.58 Forfeited (96,176) 4.86 Non-vested restricted stock units outstanding at June 30, 2022 663,284 4.65 Restricted stock units expected to vest beyond June 30, 2022 663,284 $ 4.65 |
Summary of restricted stock activity | Three Months Ended June 30, 2022 2021 Restricted stock compensation expense (in thousands) $ 232 $ 305 Aggregate fair value of restricted stock units vested and issued (in thousands) $ 129 $ 160 Weighted average grant date fair value of restricted stock units granted during the period $ 2.44 $ 6.35 |
Offerings of Common Stock and_2
Offerings of Common Stock and Warrants (Tables) | 3 Months Ended |
Jun. 30, 2022 | |
Offerings of Common Stock and Warrants | |
Schedule of fair value assumptions - warrants | Risk-free interest rate 0.2% Contractual term 3 years Expected volatility 81.0% |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Jun. 30, 2022 | |
Fair Value Measurements | |
Schedule of carrying values and estimated fair values of obligations under the revolving credit facility | As of As of June 30, 2022 March 31, 2022 Carrying Estimated Carrying Estimated Value Fair Value Value Fair Value Term note payable $ 50,957 $ 51,000 $ 50,949 $ 51,000 PPP loan — — — — Total $ 50,957 $ 51,000 $ 50,949 $ 51,000 |
Accrued Warranty Reserve (Table
Accrued Warranty Reserve (Tables) | 3 Months Ended |
Jun. 30, 2022 | |
Accrued Warranty Reserve | |
Schedule of changes in accrued warranty reserve | Balance, beginning of the period $ 1,483 Standard warranty provision 174 Deductions for warranty claims (130) Balance, end of the period $ 1,527 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Jun. 30, 2022 | |
Revenue Recognition | |
Schedule of disaggregated revenue by business group | The following table presents disaggregated revenue by business group (in thousands): Three Months Ended June 30, 2022 2021 Microturbine Products $ 8,965 $ 8,312 Accessories 202 77 Total Product and Accessories 9,167 8,389 Parts and Service 9,485 7,693 Total Revenue $ 18,652 $ 16,082 |
Summary of geographic revenue information based on primary operation location of customer | Three Months Ended June 30, 2022 2021 Microturbine Products $ 8,965 $ 8,312 Accessories 202 77 Total Product and Accessories 9,167 8,389 Parts and Service 9,485 7,693 Total Revenue $ 18,652 $ 16,082 |
Schedule of changes in deferred revenue | FPP Balance, beginning of the period $ 4,544 FPP Billings 5,316 FPP Revenue recognized (4,812) Balance attributed to FPP contracts 5,048 DSS Program 1,993 Deposits 3,587 Deferred revenue balance, end of the period $ 10,628 |
Other Assets (Tables)
Other Assets (Tables) | 3 Months Ended |
Jun. 30, 2022 | |
Other Assets | |
Schedule of current and long-term portions of prepaid royalties | June 30, March 31, 2022 2022 Other current assets $ 124 $ 124 Other assets 2,475 2,506 Royalty-related assets $ 2,599 $ 2,630 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Jun. 30, 2022 | |
Leases | |
Schedule of operating leases | Three Months Ended June 30, 2022 2021 Operating lease cost $ 365 $ 252 June 30, 2022 March 31, 2022 Operating lease right-of-use assets $ 6,321 $ 5,959 Total operating lease right-of-use assets $ 6,321 $ 5,959 Operating lease liability, current $ 764 $ 586 Operating lease liability, non-current 5,774 5,619 Total operating lease liabilities $ 6,538 $ 6,205 Weighted average remaining lease life 7.77 years 8.35 years Weighted average discount rate 12.00% 12.00% Three Months Ended June 30, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 393 $ 273 Right-of-use assets obtained in exchange for lease obligations Operating leases $ 512 $ — |
Schedule of maturities of operating lease liabilities | Operating Year Ending March 31, Leases 2023 (remainder of fiscal year) $ 1,128 2024 1,529 2025 1,453 2026 1,243 2027 1,279 Thereafter 3,358 Total lease payments $ 9,990 Less: imputed interest (3,452) Present value of operating lease liabilities $ 6,538 |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies - Evaluation of Ability to Maintain Current Level of Operations (Details) $ in Thousands | 3 Months Ended | ||||||
Apr. 15, 2022 employee | Feb. 28, 2022 USD ($) MWh employee | Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jul. 13, 2022 USD ($) | Mar. 31, 2022 USD ($) | Oct. 01, 2020 USD ($) | |
Net loss | $ (2,059) | $ (2,182) | |||||
Cash received (used) in operating activities | (3,442) | $ (10,141) | |||||
Cash and cash equivalents | 16,914 | $ 22,559 | |||||
Long-term debt | 51,000 | ||||||
Number of employees furloughed | employee | 17 | ||||||
Term of furlough | 120 days | ||||||
Percentage of pay cuts for employees | 15% | ||||||
Number of employees to whom pay cuts instituted | employee | 36 | ||||||
Percentage of pay cuts for members of senior leadership team | 25% | ||||||
Rental units achieved | MWh | 21.1 | ||||||
Rental revenue | $ 2,800 | ||||||
Senior Notes | Term Note Payable [Member] | |||||||
Long-term debt | 51,000 | ||||||
Senior Notes | Term Note Payable, Amended and Restated Note Purchase Agreement | |||||||
Long-term debt | $ 50,000 | ||||||
Subsequent Event [Member] | Senior Notes | Term Note Payable, Amended and Restated Note Purchase Agreement | |||||||
Requirements to use commercially reasonable best efforts to raise at least financing through a sale of common stock by September 14, 2022 | $ 10,000 | ||||||
Inventory | |||||||
Commitment to purchase inventories | $ 48,800 |
Basis of Presentation and Sig_4
Basis of Presentation and Significant Accounting Policies - Paycheck Protection Program (Details) - Loans Payable - Paycheck Protection Program, CARES Act - USD ($) | 1 Months Ended | |||
Jun. 30, 2021 | May 13, 2020 | Apr. 24, 2020 | Jun. 30, 2021 | |
Debt Instrument [Line Items] | ||||
Loan amount | $ 2,610,200 | |||
Debt instrument, issuance date | Apr. 24, 2020 | |||
Loans repaid | $ 660,200 | |||
Previously repaid debt | $ 660,200 | $ 660,200 |
Recently Issued Accounting Stan
Recently Issued Accounting Standards (Details) | Jun. 30, 2022 |
Accounting Standards Update 2020-06 | |
Recent Accounting Pronouncements | |
Change in Accounting Principle, Accounting Standards Update, Adopted | false |
Accounting Standards Update 2016-13 | |
Recent Accounting Pronouncements | |
Change in Accounting Principle, Accounting Standards Update, Adopted | false |
Customer Concentrations and A_2
Customer Concentrations and Accounts Receivable (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2022 USD ($) Distributor | Jun. 30, 2021 USD ($) Distributor | Mar. 31, 2022 | |
E-Finity | |||
Risk Concentrations | |||
Number of distributors | Distributor | 2 | 2 | |
Revenue from Contract with Customer Benchmark | Customer concentrations | |||
Risk Concentrations | |||
Provision for Doubtful Accounts | $ | $ 0 | $ 0 | |
Revenue from Contract with Customer Benchmark | Customer concentrations | Horizon | |||
Risk Concentrations | |||
Concentration percentage (as a percent) | 11% | ||
Revenue from Contract with Customer Benchmark | Customer concentrations | Cal Microturbine | |||
Risk Concentrations | |||
Concentration percentage (as a percent) | 24% | ||
Revenue from Contract with Customer Benchmark | Customer concentrations | E-Finity | |||
Risk Concentrations | |||
Concentration percentage (as a percent) | 11% | 10% | |
Net accounts receivable | Credit concentration | Cal Microturbine | |||
Risk Concentrations | |||
Concentration percentage (as a percent) | 11% | ||
Net accounts receivable | Credit concentration | E-Finity | |||
Risk Concentrations | |||
Concentration percentage (as a percent) | 16% | 28% |
Inventories - Tabular Disclosur
Inventories - Tabular Disclosure (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Mar. 31, 2022 |
Inventories | ||
Raw materials | $ 22,624 | $ 20,071 |
Finished goods | 1,935 | |
Total | 22,624 | 22,006 |
Less: inventory reserve | (2,003) | (1,861) |
Less: non-current portion | (2,013) | (1,680) |
Total inventory, net-current portion | $ 18,608 | $ 18,465 |
Inventories - Noncurrent - Gene
Inventories - Noncurrent - General Information (Details) | 3 Months Ended |
Jun. 30, 2022 | |
Inventories | |
Weighted average age of noncurrent inventories | 1 year 2 months 12 days |
Inventories - Noncurrent - Tabu
Inventories - Noncurrent - Tabular Disclosure (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Mar. 31, 2022 |
Inventories | ||
Non-current inventory, 13 to 24 Months | $ 766 | |
Non-current inventory, 25 to 36 Months | 1,247 | |
Total | $ 2,013 | $ 1,680 |
Property, Plant, Equipment an_3
Property, Plant, Equipment and Rental Assets - Tabular Disclosure (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Mar. 31, 2022 |
Property, Plant and Equipment | ||
Total property, plant and equipment, gross | $ 49,658 | $ 45,341 |
Less: accumulated depreciation | (27,964) | (27,303) |
Total property, plant, equipment and rental assets, net | 21,694 | 18,038 |
Machinery, equipment, automobiles and furniture | ||
Property, Plant and Equipment | ||
Total property, plant and equipment, gross | 16,156 | 15,945 |
Leasehold improvements | ||
Property, Plant and Equipment | ||
Total property, plant and equipment, gross | 8,868 | 8,848 |
Molds and tooling | ||
Property, Plant and Equipment | ||
Total property, plant and equipment, gross | 3,499 | 3,469 |
Rental assets | ||
Property, Plant and Equipment | ||
Total property, plant and equipment, gross | $ 21,135 | $ 17,079 |
Property, Plant, Equipment an_4
Property, Plant, Equipment and Rental Assets - Additional Information (Details) $ in Millions | 3 Months Ended | |
Jun. 30, 2022 USD ($) MW | Jun. 30, 2021 USD ($) | |
Property, Plant, Equipment and Rental Assets | ||
Capacity of fleet deployed | MW | 4.5 | |
Value of deployed under factory rental program | $ | $ 4.1 | |
Depreciation expense | $ | $ 0.7 | $ 0.4 |
Capacity of fleet | MW | 25.6 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Stock-Based Compensation | ||
Stock-based compensation expense | $ 232 | $ 305 |
Cost of goods sold | ||
Stock-Based Compensation | ||
Stock-based compensation expense | 3 | 27 |
Research and development | ||
Stock-Based Compensation | ||
Stock-based compensation expense | 25 | 17 |
Selling, general and administrative | ||
Stock-Based Compensation | ||
Stock-based compensation expense | $ 204 | $ 261 |
Stock-Based Compensation - 2000
Stock-Based Compensation - 2000 Equity Incentive Plan and 2017 Equity Incentive Plan (Details) - 2017 Plan - shares | Jun. 02, 2021 | Aug. 30, 2018 | Jun. 05, 2018 | Jun. 30, 2022 |
Stock-Based Compensation | ||||
Number of shares of common stock reserved for issuance (in shares) | 300,000 | |||
Number of shares of common stock increased under amended and restated plan (in shares) | 500,000 | 1,600,000 | 300,000 | |
Number of shares available for future grant (in shares) | 709,995 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Units and Performance Restricted Stock Units - General Information (Details) - Restricted stock units | 3 Months Ended |
Jun. 30, 2022 item | |
Share-based Payment Arrangement, Nonemployee | |
Additional disclosures | |
Vesting period | 1 year |
Share-based Payment Arrangement, Tranche One | Share-based Payment Arrangement, Employee | |
Additional disclosures | |
Vesting period | 2 years |
Vesting percentage (as a percent) | 100% |
Share-based Payment Arrangement, Tranche Two | Share-based Payment Arrangement, Employee | |
Additional disclosures | |
Vesting period | 3 years |
Vesting percentage (as a percent) | 100% |
Vesting periods | 3 |
Share-based Payment Arrangement, Tranche Two, Annual Periods | Share-based Payment Arrangement, Employee | |
Additional disclosures | |
Vesting percentage (as a percent) | 33.33% |
Share-based Payment Arrangement, Tranche Three | Share-based Payment Arrangement, Employee | |
Additional disclosures | |
Vesting period | 4 years |
Vesting percentage (as a percent) | 100% |
Vesting periods | 4 |
Share-based Payment Arrangement, Tranche Three, Annual Periods | Share-based Payment Arrangement, Employee | |
Additional disclosures | |
Vesting percentage (as a percent) | 25% |
Stock-Based Compensation - Re_2
Stock-Based Compensation - Restricted Stock Units and Performance Restricted Stock Units - Activity (Details) - $ / shares | 3 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Shares | ||
Nonvested, balance at the beginning of the period (in shares) | 591,805 | |
Granted (in shares) | 200,889 | |
Vested and issued (in shares) | (33,234) | |
Forfeited (in shares) | (96,176) | |
Nonvested, balance at the end of the period (in shares) | 663,284 | |
Awards expected to vest (in shares) | 663,284 | |
Weighted Average Grant-Date Fair Value | ||
Nonvested restricted stock units outstanding at the beginning of the period (in dollars per share) | $ 5.66 | |
Granted (in dollars per share) | 2.44 | |
Vested and issued (in dollars per share) | 8.58 | |
Forfeited (in dollars per share) | 4.86 | |
Nonvested restricted stock units outstanding at the end of the period (in dollars per share) | 4.65 | |
Awards expected to vest (in dollars per share) | 4.65 | |
Restricted stock units | ||
Weighted Average Grant-Date Fair Value | ||
Granted (in dollars per share) | $ 2.44 | $ 6.35 |
Stock-Based Compensation - Re_3
Stock-Based Compensation - Restricted Stock Units and Performance Restricted Stock Units - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Additional disclosures | ||
Stock-based compensation expense | $ 232 | $ 305 |
Weighted average grant of restricted stock units granted during the period (in dollars per share) | $ 2.44 | |
Restricted stock units | ||
Additional disclosures | ||
Stock-based compensation expense | $ 232 | 305 |
Aggregate fair value of restricted stock units vested and issued | $ 129 | $ 160 |
Weighted average grant of restricted stock units granted during the period (in dollars per share) | $ 2.44 | $ 6.35 |
Stock-Based Compensation - Re_4
Stock-Based Compensation - Restricted Stock Units and Performance Restricted Stock Units - Unvested Restricted Stock Units (Details) - Restricted stock units $ in Millions | 3 Months Ended |
Jun. 30, 2022 USD ($) | |
Stock-based Compensation | |
Unrecognized compensation cost | $ 2 |
Weighted average period for recognizing compensation cost | 2 years 1 month 6 days |
Stock-Based Compensation - Re_5
Stock-Based Compensation - Restricted Stock Units and Performance Restricted Stock Units - Performance Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Additional disclosures | ||
Granted (in shares) | 200,889 | |
Stock-based compensation expense | $ 232 | $ 305 |
Granted (in dollars per share) | $ 2.44 | |
Restricted stock units | ||
Additional disclosures | ||
Stock-based compensation expense | $ 232 | $ 305 |
Granted (in dollars per share) | $ 2.44 | $ 6.35 |
Performance Shares | ||
Additional disclosures | ||
Granted (in shares) | 72,412 | 0 |
Performance measurement period | 3 years | |
Performance goal payment as a percentage of target | 50% | |
Stock-based compensation expense | $ 0 | $ 0 |
Granted (in dollars per share) | $ 3.80 | |
Performance Shares | Share-based Payment Arrangement, Tranche Two | ||
Additional disclosures | ||
Performance measurement period | 3 years | |
Performance Shares | Maximum | ||
Additional disclosures | ||
Performance goal payment as a percentage of target | 150% |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stockholder Rights Plan (Details) | May 06, 2019 Vote $ / shares | Jun. 30, 2022 $ / shares | Mar. 31, 2022 $ / shares |
Stockholder Rights Plan | |||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Series B Junior Participating Preferred Stock | |||
Stockholder Rights Plan | |||
Preferred stock conversion basis | 0.0001 | ||
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 | ||
Beneficial ownership of common stock (as a percent) | 4.90% |
Offerings of Common Stock and_3
Offerings of Common Stock and Warrants - Common Stock Offering (Details) - USD ($) $ / shares in Units, $ in Millions | Jun. 22, 2021 | Jun. 17, 2021 | Jun. 30, 2022 | Mar. 31, 2022 |
Sale of Stock | ||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||
Over-Allotment Option | ||||
Sale of Stock | ||||
Common stock sold (in shares) | 1,904,763 | |||
Common stock, par value (in dollars per share) | $ 0.001 | |||
Offering price to public | 5.25 | |||
Underwriters, Share Price | $ 4.91 | |||
Percentage Of Underwriters Discount | 6.50% | |||
Period Of Underwriters Option To Purchase Shares | 30 days | |||
Number Of Options Shares | 285,714 | |||
Proceeds from Issuance of Common Stock | $ 10.5 | |||
Payments Of Underwriting Discounts, Commissions And Offering Expenses | $ 1 |
Offerings of Common Stock and_4
Offerings of Common Stock and Warrants - General Information (Details) | 1 Months Ended | |||||||
Oct. 01, 2020 USD ($) $ / shares shares | Jun. 16, 2020 USD ($) $ / shares | Dec. 09, 2019 USD ($) $ / shares | Oct. 24, 2019 $ / shares shares | Sep. 04, 2019 $ / shares shares | Feb. 04, 2019 USD ($) $ / shares shares | Jan. 31, 2021 item $ / shares shares | Jun. 30, 2022 USD ($) shares | |
Goldman Warrant, Purchase Warrant for Common Shares | ||||||||
Warrants | ||||||||
Issued warrants (in shares) | 1 | |||||||
Exercise price (in dollars per share) | $ / shares | $ 2.61 | $ 3.80 | $ 8.86 | |||||
Aggregate shares called by warrants (in shares) | 404,634 | 463,067 | ||||||
Aggregate shares called by each warrant (in shares) | 404,634 | |||||||
Purchase price of warrants | $ | $ 150,000 | |||||||
Date from which warrants exercisable | Aug. 04, 2019 | |||||||
Maturity date | Feb. 04, 2024 | |||||||
Expected proceeds from warrants | $ | $ 1,186,313 | |||||||
Amortization of debt discount (additional debt discount) | $ | $ (100,000) | $ (300,000) | ||||||
Value of warrants | $ | $ 2,300,000 | |||||||
Goldman 2020 Warrant, Purchase Warrant for Common Shares | ||||||||
Warrants | ||||||||
Issued warrants (in shares) | 1 | |||||||
Exercise price (in dollars per share) | $ / shares | $ 4.76 | |||||||
Aggregate shares called by warrants (in shares) | 291,295 | |||||||
Aggregate shares called by each warrant (in shares) | 291,295 | |||||||
Date from which warrants exercisable | Oct. 01, 2020 | |||||||
Maturity date | Feb. 04, 2024 | |||||||
Private placement, purchase price | $ | $ 10,000 | |||||||
Value of warrants | $ | $ 800,000 | |||||||
September 2019 Pre-Funded Common Stock Warrants | ||||||||
Warrants | ||||||||
Exercise price (in dollars per share) | $ / shares | $ 0.001 | |||||||
Aggregate shares called by warrants (in shares) | 440,000 | |||||||
Purchase price per warrant (in dollars per share) | $ / shares | $ 5 | |||||||
Warrants exercised (in shares) | 440,000 | |||||||
September 2019 Series D Common Stock Warrants | ||||||||
Warrants | ||||||||
Outstanding warrants (in shares) | 75,000 | |||||||
Exercise price (in dollars per share) | $ / shares | $ 6.12 | $ 6.12 | ||||||
Aggregate shares called by warrants (in shares) | 765,000 | |||||||
Term | 5 years | |||||||
Date from which warrants exercisable | Apr. 02, 2020 | |||||||
Maturity date | Apr. 02, 2025 | |||||||
Shares as percentage of Registered Direct Offering (as a percent) | 75% | |||||||
Number of warrant holders | item | 3 | |||||||
Warrants exercised (in shares) | 690,000 | |||||||
Warrants exercised, shares issued (in shares) | 352,279 |
Offerings of Common Stock and_5
Offerings of Common Stock and Warrants - Valuation Assumptions (Details) | Jun. 30, 2022 Y |
Fair Value Measurement Inputs and Valuation Techniques | |
Warrants and Rights Outstanding, Valuation Technique | us-gaap:ValuationTechniqueOptionPricingModelMember |
Goldman 2020 Warrant, Purchase Warrant for Common Shares | Measurement Input, Risk Free Interest Rate | |
Fair Value Measurement Inputs and Valuation Techniques | |
Warrants and Rights Outstanding, Measurement Input | 0.002 |
Goldman 2020 Warrant, Purchase Warrant for Common Shares | Measurement Input, Expected Term | |
Fair Value Measurement Inputs and Valuation Techniques | |
Warrants and Rights Outstanding, Measurement Input | 3 |
Goldman 2020 Warrant, Purchase Warrant for Common Shares | Measurement Input, Price Volatility | |
Fair Value Measurement Inputs and Valuation Techniques | |
Warrants and Rights Outstanding, Measurement Input | 0.810 |
Offerings of Common Stock and_6
Offerings of Common Stock and Warrants (Details) $ / shares in Units, $ in Millions | Sep. 04, 2019 USD ($) $ / shares shares |
Offerings of Common Stock and Warrants | |
Registered Direct Offering, common stock, aggregate shares offered, shares (in shares) | shares | 580,000 |
Registered Direct Offering, common stock, aggregate shares offered, share price (in dollars per share) | $ / shares | $ 5 |
Proceeds from issuance of common stock and warrants, Registered Direct Offering | $ 5.1 |
Proceeds from issuance of common stock and warrants, net of offering costs | $ 4.6 |
Offerings of Common Stock and_7
Offerings of Common Stock and Warrants - Stock to Vendors (Details) - Andretti Autosport 6, Inc. - USD ($) $ in Millions | 3 Months Ended | ||
Apr. 01, 2021 | Feb. 17, 2021 | Jun. 30, 2021 | |
Offerings of Common Stock and Warrants and At-the-Market Offering Program | |||
Shares issued (in shares) | 9,541 | 105,933 | |
Sponsorship agreement, sponsorship fee, amortization of prepaid marketing credit | $ 0.5 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Mar. 31, 2022 |
Carrying Value | ||
Carrying values and estimated fair values of obligations | ||
Term note payable | $ 50,957 | $ 50,949 |
Total | 50,957 | 50,949 |
Total | ||
Carrying values and estimated fair values of obligations | ||
Term note payable | 51,000 | 51,000 |
Total | $ 51,000 | $ 51,000 |
Term Note Payable - Three-Year
Term Note Payable - Three-Year Term Note - General Information (Details) $ in Thousands | 3 Months Ended | |||||||
Oct. 01, 2020 USD ($) | Feb. 04, 2019 USD ($) | Jun. 30, 2022 USD ($) MW | Jun. 30, 2021 USD ($) | Jul. 13, 2022 USD ($) | Mar. 31, 2022 USD ($) | May 13, 2021 USD ($) MW | May 12, 2021 USD ($) MW | |
Term Note Payable | ||||||||
Long-term debt | $ 51,000 | |||||||
Interest expenses | 1,362 | $ 1,235 | ||||||
Amortization of debt issuance costs | 43 | 9 | ||||||
Term Note Payable | Senior Notes | ||||||||
Term Note Payable | ||||||||
Term of loan | 3 years | |||||||
Long-term debt | 51,000 | |||||||
Debt discount and debt issuance costs, net | 100 | |||||||
Amortization of the debt discount and debt issuance costs | 9 | |||||||
Interest expenses | 1,400 | 1,200 | ||||||
Amortization of debt issuance costs | 9 | $ 9 | ||||||
Term Note Payable, Note Purchase Agreement | Senior Notes | ||||||||
Term Note Payable | ||||||||
Debt instrument, issuance date | Feb. 04, 2019 | |||||||
Aggregate principal amount | $ 30,000 | |||||||
Interest rate (as a percent) | 13% | |||||||
Debt instrument, frequency of periodic payment | quarterly | |||||||
Term Note Payable, Amended and Restated Note Purchase Agreement | Senior Notes | ||||||||
Term Note Payable | ||||||||
Debt instrument, issuance date | Oct. 01, 2020 | |||||||
Proceeds from Issuance of Debt | $ 20,000 | |||||||
Long-term debt | $ 50,000 | |||||||
Debt instrument, covenants, minimum consolidated liquidity | $ 9,000 | $ 9,000 | $ 12,200 | $ 9,000 | ||||
Debt instrument, covenants, minimum power of Rental Fleet by 9-month anniversary of Closing Date | MW | 6.25 | 2 | 6.25 | |||||
Debt instrument, covenants, minimum power of Rental Fleet by 18-month anniversary of Closing Date | MW | 12.50 | 12.50 | ||||||
Term Note Payable, Amended and Restated Note Purchase Agreement | Senior Notes | Subsequent Event [Member] | ||||||||
Term Note Payable | ||||||||
Requirements to use commercially reasonable best efforts to raise at least financing through a sale of common stock by September 14, 2022 | $ 10,000 | |||||||
Term Note Payable, Amended and Restated Note Purchase Agreement | Senior Notes | London Interbank Offered Rate (LIBOR) | ||||||||
Term Note Payable | ||||||||
Interest rate (as a percent) | 8.75% |
Term Note Payable - SBA Paychec
Term Note Payable - SBA Paycheck Protection Program Loan (Details) - USD ($) | 1 Months Ended | ||||
Jun. 30, 2021 | May 13, 2020 | Apr. 24, 2020 | Jun. 30, 2021 | Jun. 30, 2022 | |
Term Note Payable | |||||
Long-term debt | $ 51,000,000 | ||||
Paycheck Protection Program, CARES Act | Loans Payable | |||||
Term Note Payable | |||||
Loan amount | $ 2,610,200 | ||||
Debt instrument, issuance date | Apr. 24, 2020 | ||||
Loans repaid | $ 660,200 | ||||
Interest rate (as a percent) | 1% | ||||
Term of loan | 2 years | ||||
Debt instrument, maturity date | Apr. 24, 2022 | ||||
Previously repaid debt | $ 660,200 | $ 660,200 |
Term Note Payable - Three-Yea_2
Term Note Payable - Three-Year Term Note - Gain on Extinguishment of Debt (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2021 | Jun. 30, 2021 | |
Gain on extinguishment of debt | |||
Gain (loss) on extinguishment of debt | $ 1,900,000 | $ 1,950,000 | |
Paycheck Protection Program, CARES Act | Loans Payable | |||
Gain on extinguishment of debt | |||
Previously repaid debt | $ 660,200 | $ 660,200 |
Accrued Warranty Reserve (Detai
Accrued Warranty Reserve (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2022 | Mar. 31, 2021 | |
Accrued Warranty Reserve | ||
Maximum period of product warranties | 24 months | |
Balance, beginning of the period | $ 1,483 | |
Standard warranty provision | 174 | |
Accrual related to reliability repair programs | 0 | $ 4,900 |
Deductions for warranty claims | (130) | |
Balance, end of the period | $ 1,527 |
Revenue Recognition - Revenues
Revenue Recognition - Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Revenue: | ||
Total revenue | $ 18,652 | $ 16,082 |
Product and accessories | ||
Revenue: | ||
Total revenue | 9,167 | 8,389 |
Total from Micro turbine Products | ||
Revenue: | ||
Total revenue | 8,965 | 8,312 |
Accessories and parts | ||
Revenue: | ||
Total revenue | 202 | 77 |
Parts, service and rentals | ||
Revenue: | ||
Total revenue | 9,485 | 7,693 |
Total North America | ||
Revenue: | ||
Total revenue | 12,917 | 7,823 |
United States | ||
Revenue: | ||
Total revenue | 11,676 | 7,343 |
Mexico | ||
Revenue: | ||
Total revenue | 610 | 441 |
All other North America | ||
Revenue: | ||
Total revenue | 631 | 39 |
Russia | ||
Revenue: | ||
Total revenue | 340 | 1,257 |
All other Europe | ||
Revenue: | ||
Total revenue | 3,635 | 2,785 |
Total Europe | ||
Revenue: | ||
Total revenue | 3,975 | 4,042 |
Asia | ||
Revenue: | ||
Total revenue | 471 | 364 |
Australia | ||
Revenue: | ||
Total revenue | 714 | 1,411 |
All other | ||
Revenue: | ||
Total revenue | $ 575 | $ 2,442 |
Revenue Recognition - Contract
Revenue Recognition - Contract Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2022 | Mar. 31, 2022 | |
Revenue Recognition | ||
Increase (decrease) in balance of deferred revenue | $ 400 | |
Changes in deferred revenue | ||
DSS program | 1,993 | |
Deposits | 3,587 | |
Deferred revenue balance, end of the period | 10,628 | |
Estimated revenue to be recognized thereafter | 900 | |
FPP agreements | ||
Changes in deferred revenue | ||
FPP Balance, beginning of the period | 4,544 | |
FPP Billings | 5,316 | |
FPP Revenue recognized | (4,812) | |
Balance attributed to FPP contracts | 5,048 | |
Estimated revenue to be recognized in the next 12 months | 4,100 | |
Distributor Support System | ||
Changes in deferred revenue | ||
Deferred revenue balance, end of the period | $ 10,600 | $ 10,200 |
Revenue Recognition - Practical
Revenue Recognition - Practical Expedients (Details) | 3 Months Ended |
Jun. 30, 2022 | |
Practical Expedients | |
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 |
Revenue Recognition - Unsatisfi
Revenue Recognition - Unsatisfied Performance Obligations (Details) $ in Millions | Jun. 30, 2022 USD ($) |
FPP agreements | |
Unsatisfied Performance Obligations | |
Remaining performance obligation | $ 79.7 |
Other Assets - General Informat
Other Assets - General Information (Details) $ in Thousands | 3 Months Ended | |||||
Sep. 19, 2018 USD ($) | Jun. 30, 2022 USD ($) kW | Sep. 30, 2013 | Mar. 31, 2022 USD ($) | Sep. 18, 2018 USD ($) | Jul. 25, 2018 USD ($) | |
Other Assets | ||||||
Prepaid royalty | $ 2,599 | $ 2,630 | ||||
Carrier | ||||||
Other Assets | ||||||
Reduction in fixed rate royalty (as a percent) | 50% | |||||
Accrued royalties | $ 0 | $ 3,000 | ||||
Payment of royalty settlement | $ 3,000 | |||||
Prepaid royalty | $ 3,000 | |||||
Amortization period of prepaid royalty | 15 years | |||||
Carrier | C200 | ||||||
Other Assets | ||||||
Capacity of microturbine (in kW) | kW | 200 |
Other Assets - Tabular Disclosu
Other Assets - Tabular Disclosure (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Mar. 31, 2022 |
Royalty-related assets | ||
Royalty-related assets | $ 2,599 | $ 2,630 |
Other Current Assets | ||
Royalty-related assets | ||
Royalty-related assets | 124 | 124 |
Other Noncurrent Assets | ||
Royalty-related assets | ||
Royalty-related assets | $ 2,475 | $ 2,506 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Jun. 30, 2022 USD ($) |
Inventory | |
Commitments and Contingencies | |
Commitment to purchase inventories | $ 48.8 |
Leases - Rental Agreements (Det
Leases - Rental Agreements (Details) - Used Microturbine Equipment Rented to End Users $ in Millions | 3 Months Ended |
Jun. 30, 2022 USD ($) MW | |
Lessee, Lease, Description [Line Items] | |
Microturbines, power output | MW | 11.8 |
Commitment value | $ | $ 9.5 |
Arithmetic Average | |
Lessee, Lease, Description [Line Items] | |
Term of contract | 36 months |
Leases - Lease Terms (Details)
Leases - Lease Terms (Details) - Primary Office and Manufacturing Facilities | 3 Months Ended |
Jun. 30, 2022 | |
Leases | |
Renewal options | true |
Renewal options term | 5 years |
Leases - Lease Expense (Details
Leases - Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Operating Lease Cost | ||
Operating lease cost | $ 365 | $ 252 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Mar. 31, 2022 |
Leases | ||
Operating lease right-of-use assets | $ 6,321 | $ 5,959 |
Operating lease right-of-use assets, balance sheet location | Other assets | Other assets |
Operating lease liability, current | $ 764 | $ 586 |
Operating lease liability, current, balance sheet location | Current portion of notes payable and lease obligations | Current portion of notes payable and lease obligations |
Operating lease liability, non-current | $ 5,774 | $ 5,619 |
Operating lease liability, non-current, balance sheet location | Long-term portion of notes payable and lease obligations | Long-term portion of notes payable and lease obligations |
Total operating lease liabilities | $ 6,538 | $ 6,205 |
Weighted average remaining lease life | 7 years 9 months 7 days | 8 years 4 months 6 days |
Weighted average discount rate | 12% | 12% |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Leases | ||
Cash paid for amounts included in the measurement of lease liabilities, operating cash flows from operating leases | $ 393 | $ 273 |
Right-of-use assets obtained in exchange for lease obligations, operating leases | $ 512 |
Leases - Maturities (Details)
Leases - Maturities (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Maturities of operating lease liabilities: | |
2023 (remainder of fiscal year) | $ 1,128 |
2024 | 1,529 |
2025 | 1,453 |
2026 | 1,243 |
2027 | 1,279 |
Thereafter | 3,358 |
Total lease payments | $ 9,990 |
Leases - Present Value of Opera
Leases - Present Value of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Mar. 31, 2022 |
Leases | ||
Total lease payments | $ 9,990 | |
Less: imputed interest | (3,452) | |
Present value of operating lease liabilities | $ 6,538 | $ 6,205 |
Net Loss Per Common Share (Deta
Net Loss Per Common Share (Details) - shares shares in Millions | 3 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Antidilutive stock options and restricted stock units | ||
Net Loss Per Common Share | ||
Antidilutive securities excluded from diluted net loss per common share computations (in shares) | 0.7 | 0.6 |
Warrants | ||
Net Loss Per Common Share | ||
Antidilutive securities excluded from diluted net loss per common share computations (in shares) | 0.8 | 1 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | Jul. 13, 2022 USD ($) |
Subsequent Event | Term Note Payable, Amended and Restated Note Purchase Agreement | Senior Notes | |
Subsequent Event [Line Items] | |
Requirements to use commercially reasonable best efforts to raise at least financing through a sale of common stock by September 14, 2022 | $ 10 |