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What changed in ORION ENERGY SYSTEMS, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of ORION ENERGY SYSTEMS, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+321 added−264 removedSource: 10-K (2025-06-26) vs 10-K (2024-06-12)

Top changes in ORION ENERGY SYSTEMS, INC.'s 2025 10-K

321 paragraphs added · 264 removed · 181 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

20 edited+1 added−0 removed43 unchanged
Biggest changeSales and Marketing We sell our lighting products in one of three ways: (i) directly where Orion offers turnkey installation services, (ii) indirectly through independent sales agencies and broadline North American distributors; and (iii) through ESCOs. As of the end of fiscal 2024 we had 41 ESCO partners and independent lighting agencies representing us in substantially all of North America.
Biggest changeSales and Marketing We sell our lighting products in one of three ways: (i) directly as a result of Orion offering turnkey installation services; (ii) indirectly through independent sales agencies and broadline North American distributors; and (iii) through ESCOs.
These contracts are entered into in the ordinary course of business and typically provide that we will deliver products and services on a work order or purchase order basis and any purchase order may be terminated prior to shipment. Our maintenance work orders or contracts 8 may be for discrete projects or may have multi-year terms.
These contracts are entered into in the ordinary course of business and typically provide that we will deliver products and services on a work order or purchase order basis and any purchase order may be terminated prior to shipment. Our 8 maintenance work orders or contracts may be for discrete projects or may have multi-year terms.
These contracts generally do not guarantee that the customer will buy our products or services. The amount and concentration of our revenues with one or more customer may fluctuate on a year to year or quarter to quarter basis depending on the number of purchase orders issued by our customers.
These contracts generally do not guarantee that the customer will buy our products or services. The amount and concentration of our revenues with one or more customers may fluctuate on a year to year or quarter to quarter basis depending on the number of purchase orders issued by our customers.
Lighting companies such as Acuity Brands, Inc., Signify Co., Cree, Inc., LSI Industries, Inc. and Current Lighting Solutions, LLC, are some of our main competitors within the commercial office, retail and industrial markets. We are also facing increased competition from manufacturers in low-cost countries.
Lighting companies such as Acuity Brands, Inc., Signify Co., Cree Lighting, LSI Industries, Inc. and Current Lighting Solutions, LLC, are some of our main competitors within the commercial office, retail and industrial markets. We are also facing increased competition from manufacturers in low-cost countries.
Intellectual Property As of March 31, 2024, we had been issued over 100 United States patents and have applied for a number of additional United States patents. The patented and patent pending technologies cover various innovative elements of our products, including our HIF and LED fixtures.
Intellectual Property As of March 31, 2025, we had been issued over 100 United States patents and have applied for a number of additional United States patents. The patented and patent pending technologies cover various innovative elements of our products, including our HIF and LED fixtures.
As a result, a change in the total mix of our sales among higher or lower gross margin products can cause our profitability to fluctuate from period to period. Our fiscal year ends on March 31. We refer to our current fiscal year which ends on March 31, 2025 as "fiscal 2025".
As a result, a change in the total mix of our sales among higher or lower gross margin products can cause our profitability to fluctuate from period to period. Our fiscal year ends on March 31. We refer to our current fiscal year which ends on March 31, 2026 as "fiscal 2026".
Markets Segment and Orion Electric Vehicle Charging Segment (the “EV Segment”). Effective during the first quarter of fiscal 2024, we began to evaluate and report the business using three segments: Lighting Segment, Maintenance Segment and the EV Segment.
Markets Segment and Orion Electric Vehicle Charging Segment. Effective during the first quarter of fiscal 2024, we began to evaluate and report the business using three segments: lighting segment, maintenance segment and the electric vehicle charging segment (the "EV segment").
We believe that providing these services enables us to support a long-term business relationship with our customers and results in an increase in our recurring revenue. We completed the acquisition of Stay-Lite Lighting on January 1, 2022, which is intended to further expand our maintenance services capabilities.
We believe that providing these services enables us to support a long-term business relationship with our customers and results in an increase in our recurring revenue. We completed the acquisition of Stay-Lite Lighting on January 1, 2022, which further expanded our maintenance services capabilities.
Currently, a significant amount of our lighting products are manufactured at our leased production facility location in Manitowoc, Wisconsin, although as the LED market continues to evolve, we are increasing the sourcing of products and components from third parties in order to expand our product offerings.
Currently, a significant amount of our lighting products are manufactured at our leased production facility location in Manitowoc, Wisconsin, although as the LED market continues to evolve but subject to tariff impacts, we are increasing the sourcing of products and components from third parties in order to expand our product offerings.
We are not including the information contained on our website as part of, or incorporating it by reference into, this report. Human Capital As of March 31, 2024, we had approximately 260 full-time employees. We also employ temporary employees in our manufacturing facility as demand requires.
We are not including the information contained on our website as part of, or incorporating it by reference into, this report. Human Capital As of March 31, 2025, we had approximately 182 full-time employees. We also employ temporary employees in our manufacturing facility as demand requires.
As we continue to diversify our customer base by expanding our reach to national accounts, ESCOs, the agent driven distribution channel, lighting maintenance customers and the EV market, we expect to continue to derive a significant percentage of our revenue from contracts with one or a few customers.
As we continue to attempt to diversify our customer base by expanding our reach to national accounts, ESCOs, the agent-driven distribution channel, lighting maintenance customers and the EV market, we expect to continue to derive a significant percentage of our revenue from contracts with one or a limited number of customers.
Due to their size and flexibility in application, we also believe that LED lighting systems can address opportunities for retrofit applications that cannot be satisfied by other lighting technologies. We generally do not have long-term contracts with our customers for product or turnkey services that provide us with recurring annual revenue.
Due to their size and flexibility in application, we also believe that LED lighting systems can address opportunities for retrofit applications that cannot be satisfied by other lighting technologies. Other than our multi-year maintenance service contracts, we generally do not have long-term contracts with our customers for product or turnkey services that provide us with recurring annual revenue.
Backlog Backlog represents the amount of revenue that we expect to realize in the future as a result of firm, committed orders. Our backlog as of March 31, 2024 and March 31, 2023 totaled $22.0 million and $17.2 million, respectively. We generally expect our backlog to be recognized as revenue within one year.
Backlog Backlog represents the amount of revenue that we expect to realize in the future as a result of firm, committed orders. Our backlog as of March 31, 2025 and March 31, 2024 totaled $17.3 million and $22.0 million, respectively. We generally expect our backlog to be recognized as revenue within one year.
In fiscal 2025, we expect that our customer concentration will continue at the approximate level experienced in fiscal 2024.
In fiscal 2026, we expect that our customer concentration will continue at the approximate level experienced in fiscal 2025.
On October 5, 2022, we acquired Voltrek, which was intended to leverage our project management and maintenance expertise into the rapidly growing EV sector. Our lighting products consist primarily of LED lighting fixtures, many of which include IoT enabled control systems provided by third parties. We believe the market for LED lighting products continues to grow.
On October 5, 2022, we acquired Voltrek LLC ("Voltrek"), which leveraged our project management and maintenance expertise into the EV sector. Our lighting products consist primarily of LED lighting fixtures, many of which include IoT enabled control systems provided by third parties. We believe the market for LED lighting products continues to grow.
Our Customers We primarily target commercial, institutional and industrial customers who have warehousing, retail, manufacturing and office facilities. In fiscal 2024, one customer accounted for 25.2% of our total revenue. In fiscal 2023, that same customer accounted for 16.2% of our total revenue, and in fiscal 2022, this same customer accounted for 49.1% of our total revenue.
Our Customers We primarily target commercial, institutional and industrial customers who have warehousing, retail, manufacturing and office facilities. In fiscal 2025, one customer accounted for 24.3% of our total revenue. In fiscal 2024, that same customer accounted for 25.2% of our total revenue, and in fiscal 2023, this same customer accounted for 16.2% of our total revenue.
We refer to our most recently completed fiscal year, which ended on March 31, 2024, as “fiscal 2024”, and our prior fiscal year which ended on 6 March 31, 2023 as "fiscal 2023".
We refer to our most recently completed fiscal year, which ended on March 31, 2025, as “fiscal 2025”, and our prior fiscal year which ended on 6 March 31, 2024 as "fiscal 2024".
However, our maintenance services contracts usually consist of multi-year arrangements. We typically generate substantially all of our lighting revenue from sales of lighting systems and related services to governmental, commercial and industrial customers on a project-by-project basis. We also perform work under global services or product purchasing agreements with major customers with sales completed on a purchase order basis.
We typically generate substantially all of our lighting revenue from sales of lighting systems and related services to governmental, commercial and industrial customers on a project-by-project basis. We also perform work under global services or product purchasing agreements with major customers with sales completed on a purchase order basis.
We believe there are significant growth opportunities for Voltrek 7 both in its existing northeast geographic market, as well as on a national basis. We also plan to focus our growth plans on cross selling our new EV charging solutions to our historical market channels and customers and vice versa. Other Products.
We believe there are growth opportunities for Voltrek both in its 7 existing northeast geographic market, as well as on a national basis. We also plan to continue attempting to cross sell our EV charging solutions to our historical market channels and customers and vice versa. Other Products.
We work cooperatively with our indirect channels through participation in national trade organizations and by providing product and sales training. We have historically focused our marketing efforts on traditional direct advertising, as well as developing brand awareness through customer education and active participation in trade shows and energy management seminars.
We have historically focused our marketing efforts on traditional direct advertising, as well as developing brand awareness through customer education and active participation in trade shows and energy management seminars.
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As of the end of fiscal 2025 we had 36 ESCO partners and independent lighting agencies representing us in substantially all of North America. We work cooperatively with our indirect channels through participation in national trade organizations and by providing product and sales training.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

75 edited+88 added−45 removed74 unchanged
Biggest changeFactors affecting the availability to us of additional equity capital or debt financing on acceptable terms and conditions, or in sufficient amounts, include: • Our recent operating losses; 17 • Our history of operating losses prior to our fiscal 2020; • Our current and future financial results and condition; • Our limited collateral availability; • Our current customer concentration; • The market’s, investors’ and lenders' view of our company, industry and products; • The perception in the equity and debt markets of our ability to execute and sustain our business plan or achieve our operating results expectations; and • The price, volatility and trading volume and history of our common stock.
Biggest changeFactors affecting the availability to us of additional equity capital or debt financing on acceptable terms and conditions, or in sufficient amounts, include: • Our history of operating losses over the past several years; • Our frequent inability to achieve our financial results guidance or budget expectations; • Our anticipated senior debt and subordinated earn-out debt obligations and security interests in substantially all of our assets; • The use of funds to help satisfy our remaining Voltrek earn-out obligations; • Our current and future financial condition; • Our limited collateral availability; • Our current customer concentration; • The market’s, investors’ and lenders’ view of our company, industry and products; • Our ability to achieve budgeted expectations or revenue guidance and the perception in the equity and debt markets of our ability to execute and sustain our business plan or achieve our operating results expectations; • The price, volatility and trading volume and history of our common stock; • Our ability to successfully attain shareholder approval of, and complete, a reverse stock split that helps us to avoid being delisted from NASDAQ on September 25, 2025; • The impact of tariffs and other macroeconomic and geopolitical factors on our profitability. 13 Our inability to obtain the equity capital or debt financing necessary to fund our operations could force us to scale back or restructure our operations or our senior or anticipated subordinated debt obligations.
These and other provisions in our amended and restated articles of incorporation, including our staggered board of directors and our ability to issue “blank check” preferred stock, as well as the provisions of our amended and restated bylaws and Wisconsin law, could make it more difficult for shareholders or potential acquirers to obtain control of our board of directors or initiate actions that are opposed by our then-current board of directors, including to delay or impede a merger, tender offer or proxy contest involving our company or result in a lower price per share paid to our shareholders.
These and other provisions in our Amended and Restated Articles of Incorporation, including our staggered Board and our ability to issue “blank check” preferred stock, as well as the provisions of our Amended and Restated Bylaws and Wisconsin law, could make it more difficult for shareholders or potential acquirers to obtain control of our Board or initiate actions that are opposed by our then-current Board, including to delay or impede a merger, tender offer or proxy contest involving our company or result in a lower price per share paid to our shareholders.
Failure by such contractors to remove or dispose of the components containing these hazardous materials in a safe, effective and lawful manner could give rise to liability for us, or could expose our workers or other persons 22 to these hazardous materials, which could result in claims against us which may have a material adverse effect on our results of operations, financial condition and cash flows.
Failure by such contractors to remove or dispose of the components containing these hazardous materials in a safe, effective and lawful manner could give rise to liability for us, or could expose our workers or other persons to these hazardous materials, which could result in claims against us which may have a material adverse effect on our results of operations, financial condition and cash flows.
As a result, we have had, and may need to continue, to devote additional working capital to support component and raw material inventory purchases that may not be used over a reasonable period to produce saleable products, and we may be required to increase our excess and obsolete inventory reserves to account for these excess quantities, particularly if demand for our products does not meet our expectations.
As a result, we have had, and may need to continue, to devote additional working capital to support 18 component and raw material inventory purchases that may not be used over a reasonable period to produce saleable products, and we may be required to increase our excess and obsolete inventory reserves to account for these excess quantities, particularly if demand for our products does not meet our expectations.
The matters discussed in the following risk factors, and additional risks and uncertainties not currently known to us or that we currently deem immaterial, could have a material adverse effect on our business, financial condition, results of operations and future growth prospects and could cause the trading price of our common stock to decline. 1.
The matters discussed in the following risk factors, and additional risks and uncertainties not currently known to us or that we currently deem immaterial, could have a material adverse effect on our business, financial condition, results of operations and future growth prospects and could cause the trading price of our common stock to decline.
Our failure to obtain or maintain adequate protection of 23 our intellectual property rights for any reason could have a material adverse effect on our results of operations, financial condition and cash flows. We own United States patents and patent applications for some of our products, systems, business methods and technologies.
Our failure to obtain or maintain adequate protection of our intellectual property rights for any reason could have a material adverse effect on our results of operations, financial condition and cash flows. We own United States patents and patent applications for some of our products, systems, business methods and technologies.
Such an event could materially adversely affect our financial condition and liquidity. Additionally, such events of non-compliance could impact the terms of any additional borrowings and/or any credit renewal terms. Any failure to comply with such covenants may be a disclosable event and may be perceived negatively.
Such an event would materially adversely affect our financial condition and liquidity. Additionally, such events of non-compliance could impact the terms of any additional borrowings and/or any credit renewal terms. Any failure to comply with such covenants may be a disclosable event and may be perceived negatively.
In addition, because some patent applications are maintained in secrecy for a period of time, we could adopt a technology without knowledge of a pending patent application, and such technology could infringe a third party’s patent. We also rely on unpatented proprietary technology.
In addition, because some patent applications are maintained in secrecy for a period of time, we could adopt a technology without knowledge of a pending patent application, and such technology could infringe a third party’s patent. 26 We also rely on unpatented proprietary technology.
The market price of our common stock could be impacted due to a variety of factors, including: • actual or anticipated fluctuations in our operating results or our competitors’ operating results; • our ability to achieve our analyst's results of operations expectations; • actual or anticipated changes in the growth rate of the general LED lighting industry, our growth rates or our competitors’ growth rates; • conditions in the financial markets in general or changes in general economic conditions; • novel and unforeseen market forces and trading strategies; • actual or anticipated changes in governmental regulation, including taxation and tariff policies; • interest rate or currency exchange rate fluctuations; • our ability to forecast or report accurate financial results; and • changes in stock market analyst recommendations regarding our common stock, other comparable companies or our industry generally.
The market price of our common stock could be impacted due to a variety of factors, including: • actual or anticipated fluctuations in our operating results or our competitors’ operating results; • our ability to achieve our analysts’ results of operations expectations; • actual or anticipated changes in the growth rate of the general LED lighting industry, our growth rates or our competitors’ growth rates; • conditions in the financial markets in general or changes in general economic conditions; • novel and unforeseen market forces and trading strategies; • actual or anticipated changes in governmental regulation, including taxation and tariff policies; • interest rate or currency exchange rate fluctuations; • our ability to forecast or report accurate financial results; and • changes in stock market analyst recommendations regarding our common stock, other comparable companies or our industry generally.
We rely upon the knowledge, experience and skills of key employees throughout our organization, particularly our senior management team, our sales group that requires technical knowledge or contacts in, and knowledge of, the LED industry, and our innovation and engineering team.
We rely upon the knowledge, experience and skills of key employees throughout our organization, particularly our senior management team, our sales group that requires technical knowledge or contacts in, and knowledge of, the LED industry, and our 24 innovation and engineering team.
In addition, our ability to attract talented new employees, particularly in our sales group and our 15 innovation and engineering team, is also critical to our success. We also depend on our distribution channels and network of manufacturer sales representative agencies.
In addition, our ability to attract talented new employees, particularly in our sales group and our innovation and engineering team, is also critical to our success. We also depend on our distribution channels and network of manufacturer sales representative agencies.
While we do not purchase any of our significant raw materials directly from Russia or Isreal, disruption in the markets resulting from such conflicts could negatively impact the macroeconomy. The conflicts in Ukraine and the Middle East may also continue to exacerbate geopolitical tensions globally.
While we do not purchase any of our significant raw materials directly from Russia or Israel, disruption in the markets resulting from such conflicts could negatively impact the macroeconomy. The conflicts in Ukraine and the Middle East may also continue to exacerbate geopolitical tensions globally.
The reduction of revenue from our most significant customer over the past three fiscal years has had, and the potential future loss of other significant customers or a major customer would likely have, a materially adverse effect on our results of operations, financial condition and cash flows.
The reduction of revenue from our most significant customer over the past several fiscal years has had, and the potential future loss of other significant customers or a major customer would likely have, a materially adverse effect on our results of operations, financial condition and cash flows.
In prior fiscal years, one customer represented more than 40% of total revenues, which has not recurred in recent fiscal years. The reduction of revenue from this customer has had a material advent effect on our results of operations, financial condition and cash flow.
In prior fiscal years, one customer represented more than 40% of total revenues, which has not recurred in recent fiscal years. The reduction of revenue from this customer has had a material adverse effect on our results of operations, financial condition and cash flow.
ITEM 1A. RI SK FACTORS You should carefully consider the risk factors set forth below and in other reports that we file from time to time with the Securities and Exchange Commission and the other information in this Annual Report on Form 10-K.
ITEM 1A. RISK FACTORS You should carefully consider the risk factors set forth below and in other reports that we file from time to time with the Securities and Exchange Commission and the other information in this Annual Report on Form 10-K.
For example, demand and payment for our products and services may be affected by public sector budgetary cycles, funding authorizations or rebates. Funding reductions or delays, including delays caused by political gridlock, and future potential government shutdowns, could negatively impact demand and payment for our products and services.
For example, demand and payment for our products and services may be affected by public sector budgetary cycles, funding authorizations or rebates. Continued or additional future funding reductions or delays, including delays caused by political gridlock, and future potential government shutdowns, could negatively impact demand and payment for our products and services.
If we become involved in this type of litigation or are de-listed, regardless of the outcome, we could incur substantial legal costs, management’s attention could be diverted from the operation of our business, and our reputation could be damaged, which could adversely affect our results of operations, financial condition and cash flows.
If we become involved in this type of litigation or are delisted, regardless of the outcome, we could incur substantial legal costs, management’s attention could be diverted from the operation of our business, and our reputation could be damaged, which could adversely affect our results of operations, financial condition and cash flows.
The price of our common stock has been, and may continue to be, volatile. Historically, the market price of our common stock has fluctuated over a wide range, and it is likely that the price of our common stock will continue to be volatile in the future.
Historically, the market price of our common stock has fluctuated over a wide range, and it is likely that the price of our common stock will continue to be volatile in the future.
Any interruption of our information technology systems could result in decreased revenue, increased expenses, increased capital expenditures, customer dissatisfaction and potential lawsuits, any of which could have a material adverse effect on our results of operations, financial condition and cash flows. We increasingly rely on third-party manufacturers for the manufacture and development of our products and product components.
Any breach or failure of our information technology systems could result in decreased revenue, increased expenses, increased capital expenditures, customer dissatisfaction and potential lawsuits, any of which could have a material adverse effect on our results of operations, financial condition and cash flows. We increasingly rely on third-party manufacturers for the manufacture and development of our products and product components.
Our failure to comply with these covenants could cause us to be unable to borrow under the credit agreement and may constitute an event of default which, if not cured or waived, could result in the acceleration of the maturity of any indebtedness then outstanding under the credit agreement, which would require us to pay all amounts then outstanding.
Our failure to comply with these covenants could cause us to be unable to borrow under the senior credit agreement and may constitute an event of default under our senior and anticipated subordinated debt agreements, which, if not cured or waived, could result in the acceleration of the maturity of any indebtedness then outstanding under our senior and subordinated debt agreements and, which would require us to pay all amounts then outstanding.
If the market for EVs does not gain broader market acceptance or develops slower than we expect, our 16 business, prospects, financial condition and operating results will be harmed.
If the market for EVs does not gain broader market acceptance, develops slower than we expect or faces a setback, our business, prospects, financial condition and operating results will be harmed.
Anti-takeover provisions included in the Wisconsin Business Corporation Law, provisions in our amended and restated articles of incorporation or bylaws and the common share purchase rights that accompany shares of our common stock could delay or prevent a change of control of our company, which could adversely impact the value of our common stock and may prevent or frustrate attempts by our shareholders to replace or remove our current board of directors or management.
Anti-takeover provisions included in the Wisconsin Business Corporation Law, provisions in our Amended and Restated Articles of Incorporation or Bylaws could delay or prevent a change of control of our company, which could adversely impact the value of our common stock and may prevent or frustrate attempts by our shareholders to replace or remove our current Board or management.
Our ability to replace the substantially reduced revenues from our most significant customer, regain profitability and achieve our desired revenue and profitability goals depends on how effectively and timely we execute on our following key strategic initiatives: • executing and marketing our turnkey LED retrofit capabilities to large national account customers; • continuing our product innovation; • leveraging our smart lighting systems to support IoT applications; • expanding our EV charging business, including increasing cross selling our EV charging solutions to our historical sales channels and customers; • further developing our maintenance service offerings; and • supporting the success of our ESCO and distribution sales channels.
Our ability to achieve our desired revenue and profitability goals depends on our ability to effectively and timely execute on our key strategic initiatives. 20 Our ability to achieve our desired revenue and profitability goals depends on how effectively and timely we execute on our following key strategic initiatives: • executing and marketing our turnkey LED retrofit capabilities to large national account customers; • continuing our product innovation; • leveraging our smart lighting systems to support IoT applications; • expanding our EV charging business, including increasing cross selling our EV charging solutions to our historical sales channels and customers; • further developing and maintaining our maintenance service offerings; and • supporting the success of our ESCO and distribution sales channels.
For example, any economic and political uncertainty caused by the United States tariffs imposed on other countries, and any corresponding tariffs from such other countries in response, may negatively impact demand and/or increase the cost for our products and components used in our products.
Any economic and political uncertainty caused by tariffs posed by the United States on other countries, and any corresponding tariffs from such other countries in response, may negatively impact demand and/or increase the cost for our products and components used in our products and reduce our gross margins.
Factors that may influence the purchase and use of alternative fuel vehicles, specifically EVs, include: ● perceptions about EV quality, safety (in particular with respect to lithium-ion battery packs), design, performance and cost, especially if adverse events or accidents occur that are linked to the quality or safety of EVs; ● the limited range over which EVs may be driven on a single battery charge and concerns about running out of power while in use; ● concerns regarding the stability of the electrical grid; ● improvements in the fuel economy of the internal combustion engine; ● consumers’ desire and ability to purchase a luxury automobile or one that is perceived as exclusive; ● the environmental consciousness of consumers; ● volatility in the cost of oil and gasoline; ● consumers’ perceptions of the dependency of the United States on oil from unstable or hostile countries and the impact of international conflicts; ● government regulations and economic incentives promoting fuel efficiency and alternate forms of energy; ● access to charging stations, standardization of EV charging systems and consumers’ perceptions about convenience and cost to charge an EV; and ● the availability of tax and other governmental incentives to purchase and operate EVs or future regulation requiring increased use of nonpolluting vehicles.
Other factors that may influence the purchase and use of alternative fuel vehicles, specifically EVs, include: • perceptions about EV quality, safety (in particular with respect to lithium-ion battery packs), design, performance and cost, especially if adverse events or accidents occur that are linked to the quality or safety of EVs; • the limited range over which EVs may be driven on a single battery charge and concerns about running out of power while in use; • concerns regarding the stability of the electrical grid; • improvements in the fuel economy of the internal combustion engine; • consumers’ desire and ability to purchase a luxury automobile or one that is perceived as exclusive; • the environmental consciousness of consumers; • volatility in the cost of oil and gasoline; • consumers’ perceptions of the dependency of the United States on oil from unstable or hostile countries and the impact of international conflicts; • government regulations and economic incentives promoting fuel efficiency and alternate forms of energy, or the reduction or elimination thereof; • access to charging stations, standardization of EV charging systems and consumers’ perceptions about convenience and cost to charge an EV; and • the availability of tax and other governmental incentives to purchase and operate EVs or future regulation requiring increased use of nonpolluting vehicles. 19 The influence of any of the factors described above may negatively impact the widespread consumer adoption of EVs, which could materially and adversely affect our EV segment business, operating results, financial condition and prospects.
Certain government agencies purchase certain products and services directly from us. When the government changes budget priorities, such as in times of war, financial crisis, or a changed administration, or reallocates spending to areas unrelated to our business, our results of operations, financial condition and cash flows can be negatively impacted.
When the government changes budget priorities, such as in times of war, financial crisis, or a changed administration, or reallocates spending to areas unrelated to our business, our results of operations, financial condition and cash flows can be negatively impacted.
While this customer continues to be a substantial source of business for us, we continue to attempt to replace this reduced revenue by diversifying our customer base and expanding our reach to national accounts, ESCOs, the agent driven distribution channel, lighting maintenance customers and the EV market, there is no assurance we will be successful in replacing this reduced revenue.
While this customer continues to be a substantial source of business for us (24.3% of our fiscal 2025 revenue), we continue to attempt to diversify our customer base and expand our reach to national accounts, ESCOs, the agent driven distribution channel, lighting maintenance customers and the EV market, there is no assurance we will be successful in replacing this reduced revenue.
Our results of operations, financial condition and cash flows could be materially adversely affected if our third-party manufacturers were to experience problems with product quality, credit or liquidity issues, or supply chain and logistics that could cause delays in delivery of the finished products and components or the raw materials used to make such products and components. 14 Our products use components and raw materials that may be subject to price fluctuations, shortages or interruptions of supply, including semiconductor chips.
Our results of operations, financial condition and cash flows could be materially adversely affected if our third-party manufacturers were to experience problems with product quality, credit or liquidity issues, or supply chain and logistics that could cause delays in delivery of the finished products and components or the raw materials used to make such products and components.
The operation of our manufacturing facility entails risks in these areas and there can be no assurance that we will not incur material costs or liabilities in the future that could adversely affect our results of operations, financial condition and cash flows. Risks Related to Our Common Stock We expect our quarterly revenue and operating results to fluctuate.
The operation of our manufacturing facility entails risks in these areas and there can be no assurance that we will not incur material costs or liabilities in the future that could adversely affect our results of operations, financial condition and cash flows
Our credit agreement contains provisions that limit our future borrowing availability and sets forth other customary covenants, including certain restrictions on our ability to incur additional indebtedness, consolidate or merge, enter into acquisitions, make investments, pay any dividend or distribution on our stock, redeem, repurchase or retire shares of our stock, or pledge or dispose of assets.
Our senior credit agreement, and our anticipated subordinated debt agreement evidencing our Voltrek acquisition earn-out obligations, contains, and will contain, provisions that limit our future borrowing availability and sets forth other customary covenants, including certain restrictions on our ability to incur additional indebtedness, consolidate or merge, enter into acquisitions, make investments, pay any dividend or distribution on our stock, redeem, repurchase or retire shares of our stock, or pledge or dispose of assets.
If any of these events occur, our results of operations, financial condition and cash flows could be materially adversely affected. Product liability claims could adversely affect our business, results of operations and financial condition.
If any of these events occur, our results of operations, financial condition and cash flows could be materially adversely affected.
While we continue to implement our strategy of transitioning to higher-margin products and reducing the material cost of our products, a change in the total mix of our sales toward lower margin products, a decrease in the margins on our products as a result of competitive pressures driving down the average selling price of our products, lower sales volumes, and promotional programs to increase sales volumes could reduce our profitability and result in a material adverse effect on our results of operations, financial condition and cash flows.
While we continue to implement our strategy of emphasizing higher-margin products and services and reducing the material cost of our products, a change in the total mix of our sales toward lower margin products, the continued underutilization of our manufacturing facility and related under absorption of overhead costs, a decrease in the margins on our products as a result of competitive pressures driving down the average selling price of our products, lower sales volumes, and promotional programs to increase sales volumes significantly reduce our profitability and result in a material adverse effect on our results of operations, financial condition and cash flows.
We are subject to financial and operating covenants in our credit agreement and any failure to comply with such covenants, or obtain waivers in the event of non-compliance, could limit our borrowing availability under the credit agreement, resulting in our being unable to borrow under our credit agreement and materially adversely impact our liquidity.
We are subject to financial and operating covenants in our senior credit agreement, and any failure to comply with such covenants, or obtain waivers in the event of non-compliance, could limit our borrowing availability or result in a default under our senior credit agreement, materially adversely impacting our liquidity.
The revenue growth of our EV Segment ultimately depends on consumers’ willingness to adopt electric vehicles in a market which is still in its early stages. The growth of our EV Segment is highly dependent upon the adoption by consumers of EVs, and we are subject to a risk of any reduced demand for EVs.
The success of our EV segment ultimately depends on consumers’ willingness to adopt electric vehicles in an unstable and changing market. Our EV segment is highly dependent upon the adoption by consumers of EVs, and we are subject to a risk of any reduced demand for EVs.
These competitive factors have, and may continue to make it more difficult for us to attract and retain customers, or require us to lower our average selling prices in order to remain competitive, any of which could have a material adverse effect on our results of operations, financial condition and cash flows.
These competitive factors have, and may continue to, make it more difficult for us to attract and retain customers, or require us to lower our average selling prices in order to remain competitive, any of which could have a material adverse effect on our results of operations, financial condition and cash flows. 25 If we fail to establish and maintain effective internal controls over financial reporting, our business and financial results could be harmed.
We cannot predict the size or the effect, if any, that future sales of shares of our common stock by us or our executive officers and directors, or the perception of such sales, will have on the market price of our common stock. 25 We are not currently paying dividends on our common stock and will likely continue not paying dividends for the foreseeable future.
We cannot predict the size or the effect, if any, that future sales of shares of our common stock by us or our executive officers and directors, or the perception of such sales, will have on the market price of our common stock.
It is generally difficult to predict the timing of projects that will be awarded, which can impact our ability to achieve our expected financial results. • Our continued emphasis on indirect distribution channels to sell our products and services to supplement our direct distribution channels has had limited success to date. • Goodwill and other intangibles acquired through acquisitions could be impacted by net losses and low levels of liquidity, thus resulting in a valuation impairment. • Our products use components and raw materials that may be subject to price fluctuations, shortages or interruptions of supply. • Our ability to balance customer demand and production capacity and increased difficulty in obtaining permanent employee staffing could negatively impact our business. • We increasingly rely on third-party manufacturers for the manufacture and development of our products and product components. • We are subject to the risk of a cybersecurity breach. • Macroeconomic pressures in the markets in which we operate or anticipate operating in the future may adversely affect our financial results. • Adverse conditions in the global economy have negatively impacted, and could in the future negatively impact, our customers, suppliers and business. • The success of our LED lighting retrofit solutions depends, in part, on our ability to claim market share away from our competitors. • Government tariffs and other actions may adversely affect our business. 12 • The reduction or elimination of investments in, or incentives to adopt, LED lighting or the elimination of, or changes in, policies, incentives or rebates in certain states or countries that encourage the use of LEDs over some traditional lighting technologies could cause the growth in demand for our products to slow.
It is generally difficult to predict the timing of projects that will be awarded, which can impact our ability to achieve our expected financial results. • Our continued emphasis on indirect distribution channels to sell our products and services to supplement our direct distribution channels has had limited success to date. • Goodwill and other intangibles acquired through acquisitions could be impacted by our continued net losses and low levels of liquidity, thus resulting in a potential valuation impairment. • Our products use components and raw materials that may be subject to price fluctuations, shortages or interruptions of supply, particularly resulting from tariffs and other trade restrictions. • We increasingly rely on third-party manufacturers for the manufacture and development of our products and product components. • We are subject to the risk of a cybersecurity breach. • Macroeconomic pressures in the markets in which we operate may adversely affect our financial results. • Adverse conditions in the global economy have negatively impacted, and could in the future negatively impact, our customers, suppliers and business. • The success of our LED lighting retrofit solutions depends, in part, on our ability to claim market share away from our competitors.
If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our stock could decrease, which could cause our stock price and trading volume to decline.
For example, if our common stock is delisted from NASDAQ, our analysts may not continue to provide regular reports on our company. If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our stock could decrease, which could cause our stock price and trading volume to decline.
There can be no assurance that we will be able to comply with the financial and other covenants in our credit agreement.
There can be no assurance that we will be able to comply with the financial and other covenants in our senior and anticipated subordinated debt agreements.
Our business and results of operations will be adversely affected to the extent these adverse economic conditions affect our customers’ purchasing decisions.
Our business and results of operations will be adversely affected to the extent these adverse economic conditions affect our customers’ purchasing decisions. The price of our common stock has been, and may continue to be, volatile.
We currently rely on contractors to remove the components containing such hazardous materials at the customer job site. The contractors then arrange for the disposal of such components at a licensed disposal facility.
Older components may also contain trace amounts of polychlorinated biphenyls, or PCBs. We currently rely on contractors to remove the components containing such hazardous materials at the customer job site. The contractors then arrange for the disposal of such components at a licensed disposal facility.
Adverse conditions in the global economy have negatively impacted, and could in the future negatively impact, our customers, suppliers and business. Our operations and financial performance are impacted by worldwide economic conditions.
General Risk Factors Adverse conditions in the global economy, including due to changes in diplomatic and trade relationships, have negatively impacted, and could in the future negatively impact, our customers, suppliers and business. Our operations and financial performance are impacted by worldwide economic conditions.
In addition, the terms of our existing revolving credit agreement restrict the payment of cash dividends on our common stock. Any future determination to pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, contractual restrictions and other factors that our board of directors deems relevant.
Any future determination to pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of 17 operations, capital requirements, contractual restrictions and other factors that our Board deems relevant.
We have never paid or declared any cash dividends on our common stock. We currently intend to retain all available funds and any future earnings to fund the continued development and expansion of our business, and we do not anticipate paying any cash dividends on our common stock in the foreseeable future.
We currently intend to retain all available funds and any future earnings to fund the continued operation of our business and repay our senior debt and anticipated senior subordinated debt. We do not anticipate paying any cash dividends on our common stock in the foreseeable future.
Furthermore, the average selling price of our products has been, and may be further, negatively impacted by the re-normalization of the supply chain and reduction in import costs, market over-supply conditions, product feature cannibalization by competitors or component providers, low-cost non-traditional sales methods by new market entrants, and comparison of our retrofit fixture products with replacement lamp equivalents.
Furthermore, the average selling price of our products has been, and is likely to be further, negatively impacted by the impact of increasing foreign competition, the potential impact of tariffs or our component costs, product feature cannibalization by competitors or component providers, low-cost non-traditional sales methods by new market entrants, and comparison of our retrofit fixture products with replacement lamp equivalents.
Our ability to achieve our budgeted fiscal 2025 revenue expectations, and related public fiscal 2025 revenue guidance, will have a significant impact on our cash flow, financial condition and stock price. 13 If our information technology systems security measures are breached or fail, our products may be perceived as not being secure, customers may curtail or stop buying our products, we may incur significant legal and financial exposure, and our results of operations, financial condition and cash flows could be materially adversely affected.
If our information technology systems security measures are breached or fail, our products may be perceived as not being secure, customers may curtail or stop buying our products, we may incur significant legal and financial exposure, and our results of operations, financial condition and cash flows could be materially adversely affected.
If we are unable to maintain supply sources of our components and raw materials or if our sources fail to satisfy our supply requirements, we may lose sales and experience increased component costs.
Operational Risks Our products use components and raw materials that may be subject to price fluctuations, shortages or interruptions of supply, including semiconductor chips. If we are unable to maintain supply sources of our components and raw materials or if our sources fail to satisfy our supply requirements, we may lose sales and experience increased component costs.
When we retrofit a customer’s facility, we typically assume responsibility for removing and disposing of its existing lighting fixtures. Certain components of these fixtures typically contain trace amounts of mercury and other hazardous materials. Older components may also contain trace amounts of polychlorinated biphenyls, or PCBs.
Our retrofitting process frequently involves responsibility for the removal and disposal of components containing hazardous materials. When we retrofit a customer’s facility, we typically assume responsibility for removing and disposing of its existing lighting fixtures. Certain components of these fixtures typically contain trace amounts of mercury and other hazardous materials.
Changes in government budget priorities and political gridlock, and future potential government shutdown, could negatively impact our results of operations, financial condition and cash flows. Actual and perceived changes in governmental budget priorities, and future potential government shutdowns, could adversely affect our results of operations, financial condition and cash flows.
Additionally, future actual and perceived changes in governmental budget priorities, and future potential government shutdowns, could adversely affect our results of operations, financial condition and cash flows. Certain government agencies purchase certain products and services directly from us.
Financial Risks Our existing liquidity and capital resources may not be sufficient to allow us to fund or sustain our growth initiatives. Our existing liquidity and capital resources may not be sufficient to allow us to effectively fund or sustain our growth initiatives.
Risks Related to Our Business Financial Risks Our existing liquidity and capital resources may not be sufficient to allow us to fund or sustain our working capital requirements or pay our contractual or debt obligations.
Our inability to obtain the equity capital or debt financing necessary to fund our operations could force us to scale back our growth initiatives or take action to restructure or reduce our operations. If we are unable to pursue our growth initiatives, our results of operations, financial condition and cash flows could be materially adversely affected.
If we are unable to obtain any necessary additional equity capital or debt financing, our results of operations, financial condition and cash flows could be materially adversely affected.
Our competitors have, and may continue to offer energy management products and services at reduced prices in order to improve their competitive positions.
In addition, we may face competition from other products or technologies that reduce demand for electricity. Our competitors have, and may continue to, offer energy management products and services at reduced prices in order to improve their competitive positions.
Our results for any particular quarter are not an indication of our future performance. Our revenue and operating results may fall below the expectations of market analysts or investors in some future quarter or quarters. Our failure to meet these expectations could cause the market price of our common stock to further decline.
Our quarterly revenue and operating results have fluctuated in the past and will likely vary from quarter to quarter in the future. Our results for any particular quarter are not an indication of our future performance. Our revenue and operating results may fall below the expectations of market analysts or investors in some future quarter or quarters.
If we are unable to attract and retain sufficient talent, we may be unable to broaden our customer base, which will adversely affect our results of operations, financial condition and cash flows. Legal, Regulatory and Compliance Risks Our retrofitting process frequently involves responsibility for the removal and disposal of components containing hazardous materials.
If we are unable to attract and retain sufficient talent, we may be unable to broaden our customer base, which will adversely affect our results of operations, financial condition and cash flows.
We are also facing increased competition from manufacturers in low-cost countries. We compete primarily on the basis of customer relationships, price, quality, energy efficiency, customer service and marketing support. Our products are in direct competition with the expanding availability of LED products, as well as other technologies in the lighting systems retrofit market.
We are also facing increased competition from manufacturers in low-cost countries as the lighting market rapidly moves away from domestically made products toward sourced products at lower price points. We compete primarily on the basis of customer relationships, price, quality, energy efficiency, customer service and marketing support.
Risks Related to Our Business Operational Risks We do not have major sources of recurring revenue and we depend upon a limited number of customers in any given period to generate a substantial portion of our revenue.
Any of these consequences could have a material adverse effect on our results of operations, financial condition and cash flows. We do not have major sources of recurring revenue, and we depend upon a limited number of customers in any given period to generate a substantial portion of our revenue.
We face exposure to product liability claims in the event that our energy management products fail to perform as expected or cause bodily injury or property damage. Since virtually all of our products use electricity, it is possible that our products could result in injury, whether by product malfunctions, defects, improper installation or other causes.
Since virtually all of our products use electricity, it is possible that our products could result in injury, whether by product malfunctions, defects, improper installation or other causes.
The occurrence of these circumstances will likely have a material negative effect on demand for our products and services and, accordingly, on our results of operations, financial condition and cash flows.
The occurrence of these 23 circumstances will likely have a material negative effect on demand for our products and services and, accordingly, on our results of operations, financial condition and cash flows. In addition, global economic and political uncertainty has led many customers to adopt strategies for conserving cash, including limits on capital spending.
Competitors could focus their substantial resources on developing a competing business model or energy management products or services that may be potentially more attractive to customers than our products or services. In addition, we may face competition from other products or technologies that reduce demand for electricity.
In addition, the LED market has seen increased convergence in recent years, resulting in our competition gaining increased market share and resources. Competitors could focus their substantial resources on developing a competing business model or energy management products or services that may be potentially more attractive to customers than our products or services.
There can be no assurance that we will be able to successfully implement these initiatives or, even if implemented, that they will result in the anticipated benefits to our business. Our ability to achieve our budgeted fiscal 2025 revenue expectations, and related public fiscal 2025 revenue guidance, will have a significant impact on our cash flow and stock price.
There can be no assurance that we will be able to successfully implement these initiatives or, even if implemented, that they will result in the anticipated benefits to our business.
Many of our competitors are better capitalized than we are and have strong customer relationships, greater name recognition, and more extensive engineering, manufacturing, sales and marketing capabilities. In addition, the LED market has seen increased convergence in recent years, resulting in our competition gaining increased market share and resources.
Our products are in direct competition with the expanding availability of LED products, as well as other technologies in the lighting systems retrofit market. Many of our competitors are better capitalized than we are and have strong customer relationships, greater name recognition, and more extensive engineering, manufacturing, sales and marketing capabilities.
Our financial performance is dependent on our ability to achieve growth in our average selling price of our products. The gross margins of our products can vary significantly, with margins ranging from 10% to 50%.
The gross margins of our products can vary significantly, with margins ranging from 10% to 50%.
Furthermore, generally a change of more than 50% in the ownership of a company’s stock, by value, over a three-year period constitutes an ownership change for federal income tax purposes. An ownership change may limit a company’s ability to use its net operating loss carry-forwards attributable to the period prior to such change.
An ownership change may limit a company’s ability to use its net operating loss carry-forwards attributable to the period prior to such change.
Our efforts to mitigate the impact of added costs resulting from these government actions include a variety of activities, such as sourcing from non-tariff impacted countries and raising prices. If we are unable to successfully mitigate the impacts of these tariffs and other trade policies, our results of operations may be adversely affected.
Certain sourced finished products and certain of the components used in our products have been impacted by tariffs imposed on imports. Our efforts to mitigate the impact of added costs resulting from these government actions include a variety of activities, such as sourcing from non-tariff impacted countries and raising prices.
Our inability to successfully regain or sustain our profitability and positive cash flows could materially and adversely affect our ability to pursue our growth initiatives and continue our current level of operations. Our net operating loss carry-forwards provide a future benefit only if we regain sustained profitability and may be subject to limitation based upon ownership changes.
Such perception could adversely affect the market price for our common stock and our ability to obtain financing in the future. Our net operating loss carry-forwards provide a future benefit only if we regain sustained profitability and may be subject to limitation based upon ownership changes. We have significant federal net operating loss carry-forwards and state net operating loss carry-forwards.
Our efforts to mitigate the impact of added costs resulting from these tariffs include a variety of activities, such as sourcing from non-tariff impacted countries and raising 18 prices. If we are unable to successfully mitigate the impacts of these tariffs and other trade policies, our results of operations, financial condition and cash flows may be materially adversely affected.
Certain sourced finished products and certain of the components used in our products are impacted by tariffs imposed on imports as currently in effect. If we are unable to successfully mitigate the impacts of these tariffs and other trade policies, our results of operations, financial condition and cash flows may be materially adversely affected.
If the price of our common stock is volatile or falls significantly below our 24 current price, we may be the target of securities litigation or could be de-listed from NASDAQ. On April 5, 2024, we received written notice from NASDAQ that we were not in compliance with NASDAQ’s minimum bid price requirement for continued listing on NASDAQ.
On September 20, 2024, we received written notice from NASDAQ that we were not in compliance with NASDAQ’s minimum bid price requirement for continued listing on NASDAQ, as the closing bid price of our common stock had been below $1.00 per share for 30 consecutive trading days.
We have historically had difficulties in achieving our budgeted revenue expectations, and related public annual revenue guidance.
Our ability to achieve our budgeted fiscal 2026 revenue expectations, and related public fiscal 2026 revenue guidance, will have a significant impact on our cash flow and stock price and ability to fund our operations and satisfy our debt obligations. We have historically had difficulties in achieving our budgeted revenue expectations, and related public annual revenue guidance.
Uncertainty around such availability has led customers to delay their purchase decisions, which has elongated the duration of our sales cycles. Weak economic conditions in the past have adversely affected our customers’ capital budgets, purchasing decisions and facilities managers and, as a result, have adversely affected our results of operations, financial condition and cash flows.
Additionally, price increases in raw materials, including steel and aluminum, may impact non-residential new build schedules, and may reduce demand for our products and services. Weak economic conditions in the past have adversely affected our customers’ capital budgets, purchasing decisions and facilities managers and, as a result, have adversely affected our results of operations, financial condition and cash flows.
We experienced a net loss in fiscal 2024 and 2023, and prior to fiscal 2020 we experienced net losses and negative cash flows for the prior five fiscal years. There is no guarantee that we will be able to regain or sustain profitability and positive cash flows in the future.
There is no guarantee that we will be able to regain or sustain profitability and positive cash flows in the future. Our inability to successfully regain or sustain our profitability and positive cash flows will materially and adversely affect our ability continue our current level of operations and satisfy our debt obligations.
The current United States administration may pursue a wide range of monetary, regulatory and trade policies, including the continued imposition of the previous United States administration’s tariffs on certain imports. Certain sourced finished products and certain of the components used in our products are impacted by tariffs imposed on China imports.
The current United States administration is pursuing a wide range of monetary, regulatory and trade policies, including the imposition of significant tariffs on certain imports into the United States. Foreign governments, including the Chinese government, have announced their intent to implement or increase tariffs on imports from the United States in response.
If we fail to meet the expectations of market analysts or investors, the market price of our common stock could further decline, and we could become subject to securities litigation or a potential de-listing from NASDAQ. Our quarterly revenue and operating results have fluctuated in the past and will likely vary from quarter to quarter in the future.
Our failure to meet these expectations could cause the market price of our common stock to further decline. If the price of our common stock is volatile or falls significantly, including following a potential reverse stock split, we may be the target of securities litigation or could be delisted from NASDAQ.
In addition, global economic and political uncertainty has led many customers to adopt strategies for conserving cash, including limits on capital spending. Our lighting systems are often purchased as capital assets and therefore are subject to our customers’ capital availability.
Our lighting systems are often purchased as capital assets and therefore are subject to our customers’ capital availability. Uncertainty around such availability and an increasingly volatile economic outlook has led, and may continue to lead, customers to delay their purchase decisions, which has elongated the duration of our sales cycles.
The reduction of revenue from our most significant customer over the past three fiscal years has had, and the potential future loss of other significant customers or a major customer would likely have, a materially adverse effect on our results of operations, financial condition and cash flows. • Our existing liquidity and capital resources may not be sufficient to allow us to fund or sustain our growth initiatives. • A substantial portion of our revenues are derived from major project-based retrofit work that is awarded through a competitive bid process.
The reduction of revenue from our most significant customer over the past several fiscal years has had, and the potential future loss of other significant customers or a major customer would likely have, a materially adverse effect on our results of operations, financial condition and cash flows. • The reduction or elimination of investments in, or incentives to adopt, LED lighting or the elimination of, or changes in, policies, incentives or rebates in certain states or countries that encourage the use of LEDs over some traditional lighting technologies, including due to federal funding restrictions in the United States, could cause the demand for our lighting products to slow. • We are currently implementing a new ERP system, which will involve substantial cost and potential disruption to our normal operations.
We have significant federal net operating loss carry-forwards and state net operating loss carry-forwards. If we are unable to regain sustained profitability, we will not be able to fully utilize these tax benefits.
If we are unable to regain sustained profitability, we will not be able to fully utilize these tax benefits. Furthermore, generally a change of more than 50% in the ownership of a company’s stock, by value, over a three-year period constitutes an ownership change for federal income tax purposes.
Removed
Some of these risks are summarized below: • We are experiencing ongoing increasing pressures to reduce the selling price of our products driven largely by a return to a more normalized supply chain and reduction in shipping costs for imported products, coupled with the related increase in competition from foreign competitors. • We do not have major sources of recurring revenue and we depend upon a limited number of customers in any given period to generate a substantial portion of our revenue.
Added
Some of these risks are summarized below: • Our existing liquidity and capital resources may not be sufficient to allow us to fund or sustain our working capital requirements or pay our contractual or debt obligations. • Our payment of the remaining Voltrek acquisition earn-out obligations may involve either payments in cash or our issuance of our common stock, which could materially affect our liquidity and/or result in significant dilution to our shareholders.
Removed
Our ability to replace the substantially reduced revenue from our prior most significant customer, regain and sustain profitability and achieve our desired revenue and profitability goals depends on our ability to effectively and timely execute on our key strategic initiatives.
Added
In addition to the $1 million of our common stock issuable on the 14th trading day after our public announcement of our fiscal 2025 financial results, we also have the option to pay up to 20% of the then remaining earn-out obligation at maturity in shares of our outstanding common stock.
Removed
Any breach or failure of our information technology systems could result in decreased revenue, increased expenses, increased capital expenditures, customer dissatisfaction and potential lawsuits, any of which could have a material adverse effect on our results of operations, financial condition and cash flows. Some of our existing information technology systems are in need of enhancement, updating and replacement.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeITEM 1C. CYBERSECURITY Our Board of Directors and Audit Committee oversee risks from cybersecurity threats. Our Audit Committee of the board on a quarterly basis reviews cybersecurity risks and our board periodically reviews cybersecurity risks as part of its overall risk management oversight and specifically reviews cybersecurity in detail at least annually.
Biggest changeITEM 1C. CYBERSECURITY Our Board and Audit Committee oversee risks from cybersecurity threats. Our Audit Committee reviews cybersecurity risks on a quarterly basis and our Board periodically reviews cybersecurity risks as part of its overall risk management oversight and specifically reviews cybersecurity in detail at least annually.
The board relies on management and its use of the third-party consultants for expertise for assessing and managing our risks from cybersecurity threats.
Our Board relies on management and its use of the third-party consultants for expertise for assessing and managing our risks from cybersecurity threats.
In conjunction with management, the board considers the nature of the work provided by our operations, the potential impact of a cybersecurity event, costs, potential likelihood of an event, prior events, and benefits in its general oversight of the cybersecurity risk management.
In conjunction with management, our Board considers the nature of the work provided by our operations, the potential impact of a cybersecurity event, costs, potential likelihood of an event, prior events, and benefits in its general oversight of the cybersecurity risk management.
To date, no cybersecurity incident or attack, or any risk from cybersecurity threats, has materially affected or has been determined to be reasonably likely to materially affect us or our business strategy, results of operations, or financial condition. See also “Item 1A. Risk Factors — Operational Risks.” 26
To date, no cybersecurity incident or attack, or any risk from cybersecurity threats, has materially affected or has been determined to be reasonably likely to materially affect us or our business strategy, results of operations, or financial condition. See also “Item 1A. Risk Factors — Operational Risks.” 27

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe own our approximately 70,000 square foot technology center and corporate headquarters adjacent to our leased Manitowoc manufacturing and distribution facility. We also lease approximately 10,500 square feet of office space in Jacksonville, Florida, 5,375 square feet in Lawrence, Massachusetts and 9,180 square feet of office space in Pewaukee, Wisconsin.
Biggest changeWe own our approximately 70,000 square foot technology center and corporate headquarters adjacent to our leased Manitowoc manufacturing and distribution facility. We also lease approximately 10,500 square feet of office space in Jacksonville, Florida and 5,375 square feet in Lawrence, Massachusetts. Additionally, Orion had a lease in Pewaukee, Wisconsin that ended in August of the current fiscal year.
The Manitowoc and Jacksonville facilities noted above are utilized by all our business segments, the Lawrence facility by our EV Segment and the Pewaukee facility by our Lighting segment.
The Manitowoc and Jacksonville facilities noted above are utilized by all our business segments and the Lawrence facility by our EV segment.
ITEM 2. P ROPERTIES We lease our approximately 266,000 square foot manufacturing and distribution facility located in Manitowoc, Wisconsin. On January 31, 2020, we entered a new lease for the facility with a ten-year term, and an option to terminate after six years.
ITEM 2. P ROPERTIES We lease our approximately 266,000 square foot manufacturing and distribution facility located in Manitowoc, Wisconsin. On January 31, 2020, we entered a new lease for the facility with a ten-year term, which had an option to terminate that expired on January 31, 2025.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeEquity Compensation Plan Information Plan Category Number of Shares to be Issued Upon Exercise of Outstanding Options and Vesting of Restricted Shares Weighted Average Exercise Price of Outstanding Options Number of Shares Remaining Available for Future Issuances Under the 2016 Omnibus Incentive Plan Plans (1) Equity Compensation plans approved by security holders 1,014,104 — 1,788,994 Equity Compensation plans not approved by security holders — — — Total 1,014,104 — 1,788,994 (1) Excludes shares reflected in the column titled “Number of Shares to be Issued Upon Exercise of Outstanding Options and Vesting of Restricted Shares”.
Biggest changeEquity Compensation Plan Information Plan Category Number of Shares to be Issued Upon Vesting of Restricted Shares Weighted Average Exercise Price of Outstanding Options Number of Shares Remaining Available for Future Issuances Under Equity Compensation Plans (excluding Securities Refleted in Column (a) (a) (b) (c) Equity Compensation plans approved by security holders 2,861,530 — 219,782 Equity Compensation plans not approved by security holders — — — Total 2,861,530 — 219,782 Issuer Purchase of Equity Securities We did not purchase shares of our common stock during the fiscal year ended March 31, 2025.
We currently intend to retain all available funds and any future earnings to fund the development and expansion of our business, and we do not anticipate paying any cash dividends in the foreseeable future. In addition, the terms of our existing credit agreement restrict the payment of cash dividends on our common stock.
We currently intend to retain all available funds and any future earnings to fund the development and expansion of our business, and we do not anticipate paying any cash dividends in the foreseeable future. In addition, the terms of our existing senior credit agreement restrict the payment of cash dividends on our common stock.
Any future determination to pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, contractual restrictions (including those under our loan agreements) and other factors that our board of directors deems relevant. 27 Securities Authorized for Issuance under Equity Compensation Plans The following table represents shares outstanding under our 2004 Stock and Incentive Awards Incentive Plan, and our 2016 Omnibus Incentive Plan as of March 31, 2024.
Any future determination to pay dividends will be at the discretion of our Board and will depend on our financial condition, results of operations, capital requirements, contractual restrictions (including those under our loan agreements) and other factors that our Board deems relevant. 28 Securities Authorized for Issuance under Equity Compensation Plans The following table represents shares outstanding under our 2016 Omnibus Incentive Plan as of March 31, 2025.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHA REHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Shares of our common stock are traded on the NASDAQ Capital Market under the symbol “OESX”. Shareholders As of May 31, 2024, there were approximately 158 record holders of the 32,567,746 outstanding shares of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHA REHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Shares of our common stock are traded on the NASDAQ Capital Market under the symbol “OESX”. Shareholders As of May 31, 2025, there were approximately 152 record holders of the 33,305,699 outstanding shares of our common stock.
Issuer Purchase of Equity Securities We did not purchase shares of our common stock during the fiscal year ended March 31, 2024. Unregistered Sales of Securities We did not effect any unregistered sales of our common stock during the year ended March 31, 2024. ITE M 6. [RESERVED] 28
Unregistered Sales of Securities We did not effect any unregistered sales of our common stock during the fiscal year ended March 31, 2025. ITE M 6. [RESERVED] 29
Added
It is expected that our anticipated subordinated debt agreement evidencing our Voltrek earn-out payment obligations will contain a similar restriction.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

72 edited+50 added−38 removed53 unchanged
Biggest changeWe do not expect to remit significant cash taxes for the next several years. 34 Results of Operations: Fiscal 2023 versus Fiscal 2022 The following table sets forth the line items of our consolidated statements of operations and as a relative percentage of our total revenue for each applicable period, together with the relative percentage change in such line item between applicable comparable periods (in thousands, except percentages): Fiscal Year Ended March 31, 2023 2022 2023 2022 Amount Amount % Change % of Revenue % of Revenue Product revenue $ 57,210 $ 91,889 (37.7 )% 73.9 % 73.9 % Service revenue 20,173 32,494 (37.9 )% 26.1 % 26.1 % Total revenue 77,383 124,383 (37.8 )% 100.0 % 100.0 % Cost of product revenue 42,979 65,249 (34.1 )% 55.5 % 52.5 % Cost of service revenue 16,893 25,222 (33.0 )% 21.8 % 20.3 % Total cost of revenue 59,872 90,471 (33.8 )% 77.4 % 72.7 % Gross profit 17,511 33,912 (48.4 )% 22.6 % 27.3 % General and administrative expenses 19,487 11,680 66.8 % 25.2 % 9.4 % Acquisition related costs 765 512 49.4 % 1.0 % 0.4 % Sales and marketing expenses 11,392 11,628 (2.0 )% 14.7 % 9.3 % Research and development expenses 1,852 1,701 8.9 % 2.4 % 1.4 % (Loss) income from operations (15,985 ) 8,391 (290.5 )% (20.7 )% 6.7 % Other income - 1 (100.0 )% 0.0 % 0.0 % Interest expense (339 ) (80 ) (323.8 )% (0.4 )% (0.1 )% Amortization of debt issue costs (73 ) (62 ) (17.7 )% (0.1 )% (0.0 )% (Loss) income before income tax (16,363 ) 8,250 (298.3 )% (21.1 )% 6.6 % Income tax expense (benefit) 17,978 2,159 NM 23.2 % 1.7 % Net (loss) income $ (34,341 ) $ 6,091 (663.8 )% (44.4 )% 4.9 % * NM = Not Meaningful Revenue, Cost of Revenue and Gross Margin.
Biggest changeFiscal 2023 includes tax expense of $17.8 million related to the recording of the valuation allowance on deferred tax assets. 33 (8) Fiscal 2022 includes an offset to payroll expenses of $1.6 million related to the anticipated employee retention payroll tax credit (“payroll tax credit”), as expanded and extended by the American Rescue Plan Act of 2021, as follows: Fiscal Year Ended March 31, 2022 (in thousands) Cost of product revenue $ 649 Cost of service revenue 144 General and administrative expenses 273 Sales and marketing expenses 416 Research and development expenses 105 Total payroll tax credit $ 1,587 Results of Operations: Fiscal 2025 versus Fiscal 2024 The following table sets forth the line items of our consolidated statements of operations and as a relative percentage of our total revenue for each applicable period, together with the relative percentage change in such line item between applicable comparable periods (in thousands, except percentages): Fiscal Year Ended March 31, 2025 2024 2025 2024 Amount Amount % Change % of Revenue % of Revenue Product revenue $ 54,368 $ 63,307 (14.1 )% 68.2 % 69.9 % Service revenue 25,352 27,274 (7.0 )% 31.8 % 30.1 % Total revenue 79,720 90,581 (12.0 )% 100.0 % 100.0 % Cost of product revenue 37,319 44,466 (16.1 )% 46.8 % 49.1 % Cost of service revenue 22,165 25,204 (12.1 )% 27.8 % 27.8 % Total cost of revenue 59,484 69,670 (14.6 )% 74.6 % 76.9 % Gross profit 20,236 20,911 (3.2 )% 25.4 % 23.1 % General and administrative expenses 18,008 16,740 7.6 % 22.6 % 18.5 % Impairment on Intangibles — 456 (100.0 )% 0.0 % 0.5 % Acquisition related costs — 56 (100.0 )% 0.0 % 0.1 % Sales and marketing expenses 11,595 12,988 (10.7 )% 14.5 % 14.3 % Research and development expenses 1,229 1,495 (17.8 )% 1.5 % 1.7 % (Loss) income from operations (10,596 ) (10,824 ) (2.1 )% (13.3 )% (11.9 )% Other income 62 39 59.0 % 0.1 % 0.0 % Interest expense (1,026 ) (752 ) (36.4 )% (1.3 )% (0.8 )% Amortization of debt issue costs (206 ) (95 ) (116.8 )% (0.3 )% (0.1 )% (Loss) income before income tax (11,759 ) (11,630 ) (1.1 )% (14.8 )% (12.8 )% Income tax expense 42 41 (2.4 )% 0.1 % 0.0 % Net (loss) income $ (11,801 ) $ (11,671 ) (1.1 )% (14.8 )% (12.9 )% * NM = Not Meaningful 34 Revenue, Cost of Revenue and Gross Margin.
In fiscal 2023, we incurred acquisition expenses of $0.8 million relating to the acquisition of Voltrek. Sales and Marketing. Our sales and marketing expenses increased 14.0%, or $1.6 million, in fiscal 2024 compared to fiscal 2023. The increase was primarily due to an increase in commission expense on higher sales volume. Research and Development.
In fiscal 2023, we incurred acquisition expenses of $0.8 million relating to the acquisition of Voltrek. Sales and Marketing. Our sales and marketing expenses increased 14.0%, or $1.6 million, in fiscal 2024 compared to fiscal 2023. The increase was primarily due to an increase in commission expense on higher sales volume. 36 Research and Development.
Recent Accounting Pronouncements See Note 3 – Summary of Significant Accounting Policies to our accompanying audited consolidated financial statements for a full description of recent accounting pronouncements including the respective expected dates of adoption and expected effects on results of operations and financial condition.
Recent Accounting Pronouncements See Note 3 – Summary of Significant Accounting Policies to our accompanying audited consolidated financial statements for a full description of recent accounting pronouncements including the respective expected dates of adoption and expected effects on results of operations and financial condition. 45
If impairment is indicated, we determine if the total estimated future cash flows on an undiscounted basis are less than the carrying amounts of the asset or assets. If so, an impairment loss is measured and recognized.
If impairment is indicated, we determine if the total 43 estimated future cash flows on an undiscounted basis are less than the carrying amounts of the asset or assets. If so, an impairment loss is measured and recognized.
Our annual impairment test may begin with a qualitative test to determine 41 whether it is more likely than not that an indefinite lived intangible asset's carrying value is greater than its fair value.
Our annual impairment test may begin with a qualitative test to determine whether it is more likely than not that an indefinite lived intangible asset's carrying value is greater than its fair value.
We continue to monitor the realizability of our deferred tax assets and adjust the valuation allowance accordingly. During fiscal 2023, we established a full valuation allowance on our net deferred tax assets due to end of the period of sustained profitability.
We continue to monitor the realizability of our deferred tax assets and adjust the 44 valuation allowance accordingly. During fiscal 2023, we established a full valuation allowance on our net deferred tax assets due to end of the period of sustained profitability.
If an event of default under the credit agreement occurs and is continuing, then the lender may cease making advances under the credit agreement and declare any outstanding obligations 39 under the credit agreement to be immediately due and payable.
If an event of default under the credit agreement occurs and is continuing, then the lender may cease making advances under the credit agreement and declare any outstanding obligations under the credit agreement to be immediately due and payable.
In addition, in order to provide quality and timely service under our 29 multi-location master retrofit agreements we make substantial working capital expenditures and advance inventory purchases that we intend to recoup through the completion of these or similar projects. We typically sell our lighting systems in replacement of our customers’ existing fixtures. We call this replacement process a "retrofit".
In addition, in order to provide quality and timely service under our multi-location master retrofit agreements, we make substantial working capital expenditures and advance inventory purchases that we intend to recoup through the completion of these or similar projects. 30 We typically sell our lighting systems in replacement of our customers’ existing fixtures. We call this replacement process a "retrofit".
As of March 31, 2024, the balance of gross unrecognized tax benefits was approximately $0.2 million, all of which would reduce our effective tax rate if recognized. We believe that our estimates and judgments discussed herein are reasonable, however, actual results could differ, which could result in gains or losses that could be material.
As of March 31, 2025, the balance of gross unrecognized tax benefits was approximately $0.2 million, all of which would reduce our effective tax rate if recognized. We believe that our estimates and judgments discussed herein are reasonable, however, actual results could differ, which could result in gains or losses that could be material.
EV segment operating loss decreased $2.6 million or 62.4% in fiscal 2024 compared to fiscal 2023 due to increased revenue volume in the segment, partially offset by reduced gross margins. Liquidity and Capital Resources Overview We had $5.2 million in cash and cash equivalents as of March 31, 2024, compared to $16.0 million at March 31, 2023.
EV segment operating loss decreased $2.6 million, or 62.4%, in fiscal 2024 compared to fiscal 2023 due to increased revenue volume in the segment, partially offset by reduced gross margins. Liquidity and Capital Resources Overview We had $6.0 million in cash and cash equivalents as of March 31, 2025, compared to $5.2 million at March 31, 2024.
As a result of the conditions that existed as of the assessment date, an asset impairment was not deemed to be more likely than not in the Lighting and EV segments and a quantitative analysis was not required. Stock-Based Compensation. We currently issue restricted stock awards to our employees, executive officers and directors.
As a result of the conditions that existed as of the assessment date, an asset impairment was not deemed to be more likely than not in the lighting and EV segments and a quantitative analysis was not required. Stock-Based Compensation. We currently issue time-based and performance-based restricted stock awards to our employees, executive officers and directors.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS O F FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read together with our audited consolidated financial statements and related notes included in this Annual Report on Form 10-K for the fiscal year ended March 31, 2024.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS O F FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read together with our audited consolidated financial statements and related notes included in this Annual Report on Form 10-K for the fiscal year ended March 31, 2025.
We 31 continue to attempt to diversify our customer base by expanding our reach to national accounts, ESCOs, the agent driven distribution channel, lighting maintenance customers and the EV market. Selected Financial Data The selected historical consolidated financial data are not necessarily indicative of future results.
We continue to attempt to diversify our customer base by expanding our reach to national accounts, ESCOs, the agent driven distribution channel, lighting maintenance customers and the EV market. 32 Selected Financial Data The selected historical consolidated financial data are not necessarily indicative of future results.
Cash Flows Related to Investing Activities. Cash used in investing activities in fiscal 2024 was $0.7 million and consisted primarily of $0.8 million of purchases of property and equipment. 38 Cash used in investing activities in fiscal 2023 was $6.2 million and consisted primarily of the $5.6 million acquisition of Voltrek and $0.6 million of purchases of property and equipment.
Cash used in investing activities in fiscal 2024 was $0.7 million and consisted primarily of $0.8 million of purchases of property and equipment. Cash used in investing activities in fiscal 2023 was $6.2 million and consisted primarily of the $5.6 million acquisition of Voltrek and $0.6 million of purchases of property and equipment. Cash Flows Related to Financing Activities.
In addition, we offer lighting and electrical maintenance services which enables us to support a lifetime business relationship with our customer (which we call “Customers for Life”). We completed the acquisition of Voltrek on October 5, 2022, which was intended to further expand our turnkey services capabilities as well as capitalize on the rapidly growing market for EV charging solutions.
In addition, we offer lighting and electrical maintenance services which enables us to support a lifetime business relationship with our customer (which we call “Customers for Life”). We completed the acquisition of Voltrek on October 5, 2022, which further expanded our turnkey services capabilities as well as capitalized on the rapidly growing market for EV charging solutions.
Recent Acquisitions Acquisition of Voltrek Effective on October 5, 2022, we acquired all of the outstanding membership interests of Voltrek LLC, a leading electric vehicle charging company that provides turnkey installation solutions with ongoing support to all commercial verticals. The initial purchase price consisted of $5.0 million cash and $1.0 million of stock.
Voltrek Earn-Out Effective on October 5, 2022, we acquired all of the outstanding membership interests of Voltrek, a leading electric vehicle charging company that provides turnkey installation solutions with ongoing support to all commercial verticals. The initial purchase price consisted of $5.0 million cash and $1.0 million of common stock.
We expect to finance these capital expenditures primarily through our existing cash, equipment secured loans and leases, to the extent needed, long-term debt financing, or by using our Credit Facility.
We expect to finance these capital expenditures primarily through our existing cash, equipment secured loans and leases, to the extent needed, long-term debt financing, or by using our Credit Facility. As discussed in Item 1A.
Indebtedness Revolving Credit Agreement Our credit agreement provides for a five-year $25.0 million revolving credit facility (the “Credit Facility”) that matures on December 29, 2025. Borrowings under the Credit Facility are subject to a borrowing base requirement based on eligible receivables, inventory and cash.
Indebtedness Revolving Credit Agreement Our credit agreement provides for a five-year $25.0 million revolving credit facility (the “Credit Facility”) that matures on June 30, 2027. Borrowings under the Credit Facility are subject to a borrowing base requirement based on eligible receivables, inventory and cash.
Revenue from a customer contract which includes both the sale of Orion manufactured or sourced fixtures and the installation of such fixtures (which we refer to as a turnkey project) is allocated between each lighting fixture and the installation performance obligation based on relative standalone selling prices. 40 Revenue from turnkey projects that is allocated to the single installation performance obligation is reflected in Service revenue.
Revenue from a customer contract which includes both the sale of Orion manufactured or sourced fixtures and the installation of such fixtures (which we refer to as a turnkey project) is allocated between each lighting fixture and the installation performance obligation based on relative standalone selling prices.
We refer to our just completed fiscal year, which ended on March 31, 2024, as "fiscal 2024", and our prior fiscal years which ended on March 31, 2023 and March 31, 2022 as "fiscal 2023" and “fiscal 2022”, respectively.
We refer to our just completed fiscal year, which ended on March 31, 2025, as "fiscal 2025", and our prior fiscal years which ended on March 31, 2024 and March 31, 2023 as "fiscal 2024" and “fiscal 2023”, respectively.
This increase led to a corresponding operating loss decrease in this segment, along with improved project margins.
This decrease in revenues led to a corresponding operating loss increase in this segment, along with decreased project margins.
Fiscal Year Ended March 31, 2024 2023 2022 2021 2020 (in thousands, except per share amounts) Consolidated statements of operations data: Product revenue $ 63,307 $ 57,210 $ 91,889 $ 87,664 $ 113,352 Service revenue 27,274 20,173 32,494 29,176 37,489 Total revenue 90,581 77,383 124,383 116,840 150,841 Cost of product revenue (1) (2) (7) 44,466 42,979 65,249 63,233 83,588 Cost of service revenue (1) (3) (7) 25,204 16,893 25,222 23,483 30,130 Total cost of revenue 69,670 59,872 90,471 86,716 113,718 Gross profit 20,911 17,511 33,912 30,124 37,123 General and administrative expenses (1) (4) (7) 16,740 19,487 11,680 11,262 11,184 Impairment of assets (5) 456 — 512 — — Acquisition related costs 56 765 — — — Sales and marketing expenses (1) (5) (7) 12,988 11,392 11,628 10,341 11,113 Research and development expenses (1) (7) 1,495 1,852 1,701 1,685 1,716 (Loss) income from operations (10,824 ) (15,985 ) 8,391 6,836 13,110 Other income 39 — 1 56 28 Interest expense (752 ) (339 ) (80 ) (127 ) (279 ) Amortization of debt issue costs (95 ) (73 ) (62 ) (157 ) (243 ) Loss on debt extinguishment — — — (90 ) — Dividend and interest income 2 34 — — 5 (Loss) income before income tax (11,630 ) (16,363 ) 8,250 6,518 12,621 Income tax expense (benefit) (6) 41 17,978 2,159 (19,616 ) 159 Net (loss) income $ (11,671 ) $ (34,341 ) $ 6,091 $ 26,134 $ 12,462 Net (loss) income per share attributable to common shareholders: Basic $ (0.36 ) $ (1.08 ) $ 0.20 $ 0.85 $ 0.41 Diluted $ (0.36 ) $ (1.08 ) $ 0.19 $ 0.83 $ 0.40 Weighted-average shares outstanding: Basic 32,486 31,704 31,018 30,635 30,105 Diluted 32,486 31,704 31,295 31,304 30,965 (1) Includes stock-based compensation expense recognized under Financial Accounting Standards Board Accounting Standards Codification Topic 718, or ASC Topic 718, as follows: Fiscal Year Ended March 31, 2024 2023 2022 2021 2020 (in thousands) Cost of product revenue $ 5 $ 4 $ 5 $ 4 $ 3 Cost of service revenue — — — — (1 ) General and administrative expenses 923 1,596 793 716 576 Sales and marketing expenses 17 8 12 29 38 Research and development expenses 5 4 3 4 2 Total stock-based compensation expense $ 950 $ 1,612 $ 813 $ 753 $ 618 (2) Fiscal 2024 and Fiscal 2020 includes expense of $26 thousand and $0.1 million related to restructuring, respectively.
Fiscal Year Ended March 31, 2025 2024 2023 2022 2021 (in thousands, except per share amounts) Consolidated statements of operations data: Product revenue $ 54,368 $ 63,307 $ 57,210 $ 91,889 $ 87,664 Service revenue 25,352 27,274 20,173 32,494 29,176 Total revenue 79,720 90,581 77,383 124,383 116,840 Cost of product revenue (1) (2) (8) 37,319 44,466 42,979 65,249 63,233 Cost of service revenue (1) (3) (8) 22,165 25,204 16,893 25,222 23,483 Total cost of revenue 59,484 69,670 59,872 90,471 86,716 Gross profit 20,236 20,911 17,511 33,912 30,124 General and administrative expenses (1) (4) (8) 18,008 16,740 19,487 11,680 11,262 Impairment of assets (5) — 456 — 512 — Acquisition related costs — 56 765 — — Sales and marketing expenses (1) (5) (8) 11,595 12,988 11,392 11,628 10,341 Research and development expenses (1)(6) (8) 1,229 1,495 1,852 1,701 1,685 (Loss) income from operations (10,596 ) (10,824 ) (15,985 ) 8,391 6,836 Other income 62 39 — 1 56 Interest expense (1,026 ) (752 ) (339 ) (80 ) (127 ) Amortization of debt issue costs (206 ) (95 ) (73 ) (62 ) (157 ) Loss on debt extinguishment — — — — (90 ) Dividend and interest income 7 2 34 — — (Loss) income before income tax (11,759 ) (11,630 ) (16,363 ) 8,250 6,518 Income tax expense (benefit) (7) 42 41 17,978 2,159 (19,616 ) Net (loss) income $ (11,801 ) $ (11,671 ) $ (34,341 ) $ 6,091 $ 26,134 Net (loss) income per share attributable to common shareholders: Basic $ (0.36 ) $ (0.36 ) $ (1.08 ) $ 0.20 $ 0.85 Diluted $ (0.36 ) $ (0.36 ) $ (1.08 ) $ 0.19 $ 0.83 Weighted-average shares outstanding: Basic 32,829 32,486 31,704 31,018 30,635 Diluted 32,829 32,486 31,704 31,295 31,304 (1) Includes stock-based compensation expense recognized under Financial Accounting Standards Board Accounting Standards Codification Topic 718, or ASC Topic 718, as follows: Fiscal Year Ended March 31, 2025 2024 2023 2022 2021 (in thousands) Cost of product revenue $ 7 $ 5 $ 4 $ 5 $ 4 Cost of service revenue — — — — — General and administrative expenses 1,111 923 1,596 793 716 Sales and marketing expenses 31 17 8 12 29 Research and development expenses 8 5 4 3 4 Total stock-based compensation expense $ 1,157 $ 950 $ 1,612 $ 813 $ 753 (2) Fiscal 2025 and Fiscal 2024 includes expense of $295 thousand and $26 thousand related to restructuring, respectively.
ASC 740 utilizes a two-step approach for evaluating tax positions. Recognition (Step 1) occurs when an enterprise concludes that a tax position, based solely on its technical merits, is more likely than not to be sustained upon examination. Measurement (Step 2) is only addressed if Step 1 has been satisfied.
Recognition (Step 1) occurs when an enterprise concludes that a tax position, based solely on its technical merits, is more likely than not to be sustained upon examination. Measurement (Step 2) is only addressed if Step 1 has been satisfied.
As of March 31, 2024, the borrowing base supported approximately $20.1 million of availability under the Credit Facility with $10.0 million drawn against that availability. As of March 31, 2023, the borrowing base supported approximately $17.3 million of availability under the Credit Facility with $10.0 million drawn against that availability.
As of March 31, 2025, the borrowing base supported approximately $15.0 million of availability under the Credit Facility with $7.0 million drawn against that availability. As of March 31, 2024, the borrowing base supported approximately $20.1 million of availability under the Credit Facility with $10.0 million drawn against that availability.
Operating loss increased $2.6 million, or 759.1%, in fiscal 2023 compared to fiscal 2022 primarily due to inflationary pressures causing increased costs on fixed price contracts. EV Charging Segment Our EV segment offers leading electric vehicle charging expertise and provides EV turnkey installation solutions with ongoing support to all commercial verticals.
Operating loss increased $3.3 million, or 148.6%, in fiscal 2024 compared to fiscal 2023 primarily due to increased costs on fixed price contracts. EV Segment Our EV segment offers leading electric vehicle charging expertise and provides EV turnkey installation solutions with ongoing support to all commercial verticals.
(7) Fiscal 2022 includes an offset to payroll expenses of $1.6 million related to the anticipated employee retention payroll tax credit (“payroll tax credit”), as expanded and extended by the American Rescue Plan Act of 2021, as follows: Fiscal Year Ended March 31, 2022 (in thousands) Cost of product revenue $ 649 Cost of service revenue 144 General and administrative expenses 273 Sales and marketing expenses 416 Research and development expenses 105 Total payroll tax credit $ 1,587 Results of Operations: Fiscal 2024 versus Fiscal 2023 The following table sets forth the line items of our consolidated statements of operations and as a relative percentage of our total revenue for each applicable period, together with the relative percentage change in such line item between applicable comparable periods (in thousands, except percentages): Fiscal Year Ended March 31, 2024 2023 2024 2023 Amount Amount % Change % of Revenue % of Revenue Product revenue $ 63,307 $ 57,210 10.7 % 69.9 % 73.9 % Service revenue 27,274 20,173 35.2 % 30.1 % 26.1 % Total revenue 90,581 77,383 17.1 % 100.0 % 100.0 % Cost of product revenue 44,466 42,979 3.5 % 49.1 % 55.5 % Cost of service revenue 25,204 16,893 49.2 % 27.8 % 21.8 % Total cost of revenue 69,670 59,872 16.4 % 76.9 % 77.4 % Gross profit 20,911 17,511 19.4 % 23.1 % 22.6 % General and administrative expenses 16,740 19,487 (14.1 )% 18.5 % 25.2 % Impairment on Intangibles 456 — NM 0.5 % 0.0 % Acquisition related costs 56 765 (92.7 )% 0.1 % 1.0 % Sales and marketing expenses 12,988 11,392 14.0 % 14.3 % 14.7 % Research and development expenses 1,495 1,852 (19.3 )% 1.7 % 2.4 % (Loss) income from operations (10,824 ) (15,985 ) NM (11.9 )% (20.7 )% Other income 39 0 NM 0.0 % 0.0 % Interest expense (752 ) (339 ) (121.8 )% (0.8 )% (0.4 )% Amortization of debt issue costs (95 ) (73 ) (30.1 )% (0.1 )% (0.1 )% (Loss) income before income tax (11,630 ) (16,363 ) NM (12.8 )% (21.1 )% Income tax expense 41 17,978 NM 0.0 % 23.2 % Net (loss) income $ (11,671 ) $ (34,341 ) NM (12.9 )% (44.4 )% * NM = Not Meaningful 33 Revenue, Cost of Revenue and Gross Margin.
Interest expense in fiscal 2025 increased by $0.3 million to $1.0 million primarily because the term loan that was entered into in the first quarter of fiscal 2025 and a higher interest rate on our credit facility. 35 Results of Operations: Fiscal 2024 versus Fiscal 2023 The following table sets forth the line items of our consolidated statements of operations and as a relative percentage of our total revenue for each applicable period, together with the relative percentage change in such line item between applicable comparable periods (in thousands, except percentages): Fiscal Year Ended March 31, 2024 2023 2024 2023 Amount Amount % Change % of Revenue % of Revenue Product revenue $ 63,307 $ 57,210 10.7 % 69.9 % 73.9 % Service revenue 27,274 20,173 35.2 % 30.1 % 26.1 % Total revenue 90,581 77,383 17.1 % 100.0 % 100.0 % Cost of product revenue 44,466 42,979 3.5 % 49.1 % 55.5 % Cost of service revenue 25,204 16,893 49.2 % 27.8 % 21.8 % Total cost of revenue 69,670 59,872 16.4 % 76.9 % 77.4 % Gross profit 20,911 17,511 19.4 % 23.1 % 22.6 % General and administrative expenses 16,740 19,487 (14.1 )% 18.5 % 25.2 % Impairment on intangibles 456 — NM 0.5 % 0.0 % Acquisition related costs 56 765 (92.7 )% 0.1 % 1.0 % Sales and marketing expenses 12,988 11,392 14.0 % 14.3 % 14.7 % Research and development expenses 1,495 1,852 (19.3 )% 1.7 % 2.4 % (Loss) income from operations (10,824 ) (15,985 ) (32.3 )% (11.9 )% (20.7 )% Other income 39 — NM 0.0 % 0.0 % Interest expense (752 ) (339 ) (121.8 )% (0.8 )% (0.4 )% Amortization of debt issue costs (95 ) (73 ) (30.1 )% (0.1 )% (0.1 )% (Loss) income before income tax (11,630 ) (16,363 ) (28.9 )% (12.8 )% (21.1 )% Income tax expense (benefit) 41 17,978 NM 0.0 % 23.2 % Net (loss) income $ (11,671 ) $ (34,341 ) (66.0 )% (12.9 )% (44.4 )% * NM = Not Meaningful Revenue, Cost of Revenue and Gross Margin.
Income tax expense decreased $18.0 million, or 99.9%, to $41 thousand compared to fiscal 2023. The fiscal 2023 expense included a one-time $17.8 million non-cash charge to increase the valuation allowance on a significant portion of our deferred tax assets.
Income tax expense decreased $18.0 million, or 99.9%, to $41 thousand compared to fiscal 2023. The fiscal 2023 expense included a one-time $17.8 million non-cash charge to increase the valuation allowance on a significant portion of our deferred tax assets. We do not expect to remit significant cash taxes for the next several years.
Cash provided by financing activities in fiscal 2023 was $10.0 million which consisted of proceeds from our revolving credit facility. Cash provided by financing activities in fiscal 2022 was $0.1 million. Working Capital Our net working capital as of March 31, 2024 was $16.7 million, consisting of $44.8 million of current assets and $28.1 million of current liabilities.
Cash provided by financing activities in fiscal 2023 was $10.0 million which consisted of proceeds from our revolving credit facility. Working Capital Our net working capital as of March 31, 2025 was $8.7 million, consisting of $35.5 million of current assets and $26.8 million of current liabilities.
As of March 31, 2024, we had net operating loss carryforwards of approximately $78.2 million for federal tax purposes, $70.3 million for state tax purposes, and $0.8 million for foreign tax purposes. We also had federal tax credit carryforwards of $1.3 million and state tax credit carryforwards of $0.3 million, which are reserved for as part of our valuation allowance.
As of March 31, 2025, we had net operating loss carryforwards of approximately $85.4 million for federal tax purposes, $76.1 million for state tax purposes, and $0.7 million for foreign tax purposes. We also had federal tax credit carryforwards of $1.2 million and state tax credit carryforwards of $0.2 million, which are reserved for as part of our valuation allowance.
Reportable segments are components of an entity that have separate financial data that the entity's chief operating decision maker ("CODM") regularly reviews when allocating resources and assessing performance. Our CODM is our chief executive officer. Previously, we had four reportable segments: Orion Services Group Segment, Orion Distribution Services Segment, Orion U.S.
Reportable segments are components of an entity that have separate financial data that the entity's chief operating decision maker ("CODM") regularly reviews when allocating resources and assessing performance. Our CODM is our chief executive officer.
By their nature, tax laws are often subject to interpretation. Further complicating matters is that in those cases where a tax position is open to interpretation, differences of opinion can result in differing conclusions as to the amount of tax benefits to be recognized under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 740, Income Taxes.
Further complicating matters is that in those cases where a tax position is open to interpretation, differences of opinion can result in differing conclusions as to the amount of tax benefits to be recognized under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 740, Income Taxes. ASC 740 utilizes a two-step approach for evaluating tax positions.
Under our shelf registration statement, we currently have the flexibility to publicly offer and sell from time to time up to $100 million of debt and/or equity securities.
In March 2023, we filed a universal shelf registration statement with the Securities and Exchange Commission. Under our shelf registration statement, we currently have the flexibility to publicly offer and sell from time to time up to $100 million of debt and/or equity securities.
No share sales have yet been affected pursuant to the ATM program through March 31, 2024. In April 2024, we executed Amendment No.2 to our Loan Security Agreement to add a $3.5 million term loan to the credit facility. The amendment also expanded the pool of eligible receivables to include government receivables in the calculation of the borrowing base.
In March 2025, the ATM was terminated. In April 2024, we executed Amendment No.2 to our Loan Security Agreement to add a $3.5 million term loan to the credit facility. The amendment also expanded the pool of eligible receivables to include government receivables in the calculation of the borrowing base.
Markets Division and Orion Electric Vehicle Charging (the “EV Segment”). Effective during the first quarter of fiscal 2024, we began to evaluate and report the business using three segments: Lighting Segment, Maintenance Segment and EV Segment.
Effective during the first quarter of fiscal 2024, we began to evaluate and report the business using three segments: lighting segment, maintenance segment and EV segment. Previously, we had four reportable segments: Orion Services Group Segment, Orion Distribution Services Segment, Orion U.S. Markets Division and Orion Electric Vehicle Charging.
We must then assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent we believe that recovery is not likely, establish a valuation allowance.
These differences result in deferred tax assets and liabilities, which are included within our consolidated balance sheet. We must then assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent we believe that recovery is not likely, establish a valuation allowance.
The following table summarizes our lighting segment operating results (dollars in thousands): Fiscal Year Ended March 31, 2024 2023 2022 Revenues $ 61,102 $ 56,553 $ 118,557 Operating (loss) income $ (1,352 ) $ (5,150 ) $ 21,647 Operating margin (2.2 )% (9.1 )% 18.3 % Fiscal 2024 Compared to Fiscal 2023 Lighting segment revenue increased in fiscal 2024 by 8.0%, or $4.6 million, and operating loss decreased $3.8 million, compared to fiscal 2023, due to increased project volume on a government retrofit project.
The following table summarizes our lighting segment operating results (dollars in thousands): Fiscal Year Ended March 31, 2025 2024 2023 Revenues $ 47,704 $ 61,102 $ 56,553 Operating (loss) income $ (2,765 ) $ (1,352 ) $ (5,150 ) Operating margin (5.8 )% (2.2 )% (9.1 )% Fiscal 2025 Compared to Fiscal 2024 Lighting segment revenue decreased in fiscal 2025 by 21.9%, or $13.4 million, and operating loss increased $1.4 million, compared to fiscal 2024, due to decreased project volumes in fiscal 2025.
While we believe that we will likely have adequate available cash and equivalents and credit availability under our Credit Agreement to satisfy our currently anticipated working capital and liquidity requirements during the next 12 months and beyond based on our current cash flow forecast, there can be no assurance to that effect.
While we believe that we will likely have adequate available cash and equivalents and credit availability under our Credit Agreement to satisfy our currently anticipated working capital and liquidity requirements, including our negotiated Voltrek acquisition earn-out payment obligations, during the next 12 months and beyond based on our current cash flow forecast, there can be no assurance to that effect, particularly if our Voltrek earn-out amounts are in excess of the liability we have currently accrued.
The following table summarizes our EV segment operations results (dollars in thousands): Fiscal Year Ended March 31, 2024 2023 2022 Revenues $ 12,332 $ 6,275 — Operating loss $ (1,563 ) $ (4,158 ) — Operating margin (12.7 )% (66.3 )% — Fiscal 2024 Compared to Fiscal 2023 EV segment revenue increased 96.5% or $6.1 million in fiscal 2024 compared to fiscal 2023 primarily due to a full year of Voltrek results being included in segment results.
The following table summarizes our EV segment operations results (dollars in thousands): Fiscal Year Ended March 31, 2025 2024 2023 Revenues $ 16,826 $ 12,332 6,275 Operating loss $ (2,356 ) $ (1,563 ) (4,158 ) Operating margin (14.0 )% (12.7 )% (66.3 )% Fiscal 2025 Compared to Fiscal 2024 EV segment revenue increased 36.4%, or $4.5 million, in fiscal 2025 compared to fiscal 2024 primarily due to increased sales to municipalities.
Our capital spending plans predominantly consist of investments related to maintenance fleet vehicles, new product development tooling and equipment and information technology systems, exclusive of any capital spending for potential acquisitions.
Our capital expenditures totaled $0.1 million in fiscal 2025, $0.8 million in fiscal 2024 and $0.7 million in fiscal 2023. Our capital spending plans predominantly consist of investments related to maintenance fleet vehicles, new product development tooling and equipment and information technology systems, exclusive of any capital spending for potential acquisitions.
(5) Fiscal 2024 and Fiscal 2020 includes expense of $21 thousand and $0.2 million related to restructuring, respectively. 32 (6) Fiscal 2021 includes tax benefit of $20.9 million related to the release of the valuation allowance on deferred tax assets. Fiscal 2023 includes tax expense of $17.8 million related to the recording of the valuation allowance on deferred tax assets.
(6) Fiscal 2025 and Fiscal 2024 includes expense of $109 thousand and $0 related to restructuring, respectively. (7) Fiscal 2021 includes tax benefit of $20.9 million related to the release of the valuation allowance on deferred tax assets.
Our net working capital as of March 31, 2023 was $25.9 million, consisting of $50.4 million of current assets and $24.5 million of current liabilities. The change was primarily due to a decrease in cash and cash equivalents and an increase in accounts payable, partially offset by an increase in revenue earned not billed.
The change was primarily due to a decrease in inventories along with a decrease in accounts payable. 40 Our net working capital as of March 31, 2023 was $25.9 million, consisting of $50.4 million of current assets and $24.5 million of current liabilities.
Of these tax attributes, $25.8 million of the federal and state net operating loss carryforwards are not subject to time restrictions on use but may only be used to offset 80% of future adjusted taxable income.
Of these tax attributes, $36.2 million of the federal and state net operating loss carryforwards are not subject to time restrictions on use but may only be used to offset 80% of future adjusted taxable income. The $126.0 million net operating loss and tax credit carryforwards will begin to expire in varying amounts between 2025 and 2045.
The filing of the shelf registration statement may help facilitate our ability to raise public equity or debt capital to expand existing businesses, fund potential acquisitions, invest in other growth opportunities, repay existing debt, or for other general corporate purposes. 37 In March 2021, we entered into an At Market Issuance Sales Agreement to undertake an “at the market” (ATM) public equity capital raising program pursuant to which we may offer and sell shares of our common stock, having an aggregate offering price of up to $50 million from time to time through or to the Agent, acting as sales agent or principal.
In March 2021, we entered into an At Market Issuance Sales Agreement to undertake an “at the market” (ATM) public equity capital raising program pursuant to which we may offer and sell shares of our common stock, having an aggregate offering price of up to $50 million from time to time through or to the Agent, acting as sales agent or principal.
The amount of expected consideration includes estimated deductions and early payment discounts calculated based on historical experience, customer rebates based on agreed upon terms applied to actual and projected sales levels over the rebate period, and any amounts paid to customers in conjunction with fulfilling a performance obligation.
The amount of expected consideration includes estimated deductions and early payment discounts calculated based on historical experience, customer rebates based on agreed upon terms applied to actual and projected sales levels over the rebate period, and any amounts paid to customers in conjunction with fulfilling a performance obligation. 42 If there are multiple performance obligations in a single contract, the contract’s total transaction price per GAAP is allocated to each individual performance obligation based on their relative standalone selling price.
In addition, if we become the subject of voluntary or involuntary proceedings under any bankruptcy or similar law, then any outstanding obligations under the credit agreement will automatically become immediately due and payable.
In addition, if we become the subject of voluntary or involuntary proceedings under any bankruptcy or similar law, then any outstanding obligations under the credit agreement will automatically become immediately due and payable. Effective April 22, 2024, we, along with our lender, executed Amendment No. 2 (“Amendment No. 2”) to the credit agreement.
(3) Fiscal 2024 and Fiscal 2020 includes expense of $48 thousand and $0.1 million related to restructuring, respectively. (4) Fiscal 2024 and Fiscal 2020 include expenses of $28 thousand and $28 thousand related to restructuring, respectively.
(3) Fiscal 2025 and Fiscal 2024 includes expense of $176 thousand and $48 thousand related to restructuring, respectively. (4) Fiscal 2025 and Fiscal 2024 include expenses of $442 thousand and $28 thousand related to restructuring, respectively. (5) Fiscal 2025 and Fiscal 2024 includes expense of $26 thousand and $21 thousand related to restructuring, respectively.
Service revenue is recorded over-time as we fulfill our obligation to install the light fixtures.
Revenue from turnkey projects that is allocated to the single installation performance obligation is reflected in Service revenue. Service revenue is recorded over-time as we fulfill our obligation to install the light fixtures.
The following table summarizes our maintenance segment operating results (dollars in thousands): Fiscal Year Ended March 31, 2024 2023 2022 Revenues $ 17,147 $ 14,555 $ 5,826 Operating (loss) income $ (5,523 ) $ (2,221 ) $ 337 Operating margin (32.2 )% (15.3 )% 5.8 % 36 Fiscal 2024 Compared to Fiscal 2023 Maintenance segment revenue increased $2.6 million, or 17.8% in fiscal 2024 compared to fiscal 2023 primarily due to increased volume at a major customer.
The following table summarizes our maintenance segment operating results (dollars in thousands): Fiscal Year Ended March 31, 2025 2024 2023 Revenues $ 15,190 $ 17,147 $ 14,555 Operating (loss) income $ (1,188 ) $ (5,523 ) $ (2,221 ) Operating margin (7.8 )% (32.2 )% (15.3 )% Fiscal 2025 Compared to Fiscal 2024 Maintenance segment revenue decreased $2.0 million, or 11.4%, in fiscal 2025 compared to fiscal 2024 primarily due to some legacy customers not renewing their contracts in fiscal 2025 due to increased project costs to improve segment margins.
Our future liquidity needs and forecasted cash flows are dependent upon many factors, including our relative revenue, gross margins, cash management practices, cost containment, working capital management, capital expenditures.
We regularly explore various alternative sources of liquidity to help ensure that we will have the best allocation of invested capital to satisfy our working capital needs. Our future liquidity needs and forecasted cash flows are dependent upon many factors, including our relative revenue, gross margins, cash management practices, cost containment, working capital management, capital expenditures.
We use an observable price to determine the stand-alone selling price for separate performance obligations or an expected cost-plus margin per GAAP approach when one is not available. The expected cost-plus margin per GAAP approach is used to determine the stand-alone selling price for the installation performance obligation and is based on average historical installation margin.
A performance obligation’s standalone selling price is the price at which we would sell such promised good or service separately to a customer. We use an observable price to determine the stand-alone selling price for separate performance obligations or an expected cost-plus margin per GAAP approach when one is not available.
Among other fees, we are required to pay an annual facility fee of $15,000 and a fee of 25 basis points on the unused portion of the Credit Facility.
Among other fees, we are required to pay an annual facility fee of $15,000 and a fee of 25 basis points on the unused portion of the Credit Facility. The credit agreement includes a springing minimum fixed cost coverage ratio of 1.0 to 1.0 when excess availability under the Credit Facility falls below $4.0 million of the committed facility.
To make these judgments, we may use internal discounted cash flow estimates, quoted market prices, when available, and independent appraisals, as appropriate, to determine fair value.
Our impairment loss calculations require that we apply judgment in identifying asset groups, estimating future cash flows, determining asset fair values, and estimating asset’s useful lives. To make these judgments, we may use internal discounted cash flow estimates, quoted market prices, when available, and independent appraisals, as appropriate, to determine fair value.
Our cash position decreased due to the results in our operations and a $3.0 million Voltrek earnout payment. As of March 31, 2024, our borrowing base supported $20.1 million of availability under our credit facility, with $10.0 million drawn against that availability.
As of March 31, 2025, our borrowing base supported $15.0 million of availability under our credit facility, with $7.0 million drawn against that availability. As of March 31, 2024, our borrowing base supported $20.1 million of availability under our credit facility, with $10.0 million drawn against that availability.
This process involves estimating our actual current tax expenses, together with assessing temporary differences resulting from recognition of items for income tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within our consolidated balance sheet.
As part of the process of preparing our consolidated financial statements, we are required to determine our income taxes in each of the jurisdictions in which we operate. This process involves estimating our actual current tax expenses, together with assessing temporary differences resulting from recognition of items for income tax and accounting purposes.
We completed the Stay-Lite Lighting acquisition on January 1, 2022, which was intended to further expand our maintenance services capabilities. We believe the market for LED lighting products and related controls continues to grow.
We completed the Stay-Lite Lighting acquisition on January 1, 2022, which further expanded our maintenance services capabilities. We believe the market for LED lighting products and related controls continues to grow. Due to their size and flexibility in application, we also believe that LED lighting systems can address opportunities for retrofit applications that cannot be satisfied by other lighting technologies.
However, our maintenance services contracts usually consist of multi-year arrangements. We typically generate substantially all of our revenue from sales of lighting and control systems and related services to governmental, commercial and industrial customers on a project-by-project basis. We also perform work under master services or product purchasing agreements with major customers with sales completed on a purchase order basis.
Other than our multi-year maintenance service contracts, we generally do not have long-term contracts with our customers for product or turnkey services that provide us with recurring annual revenue. We typically generate substantially all of our revenue from sales of lighting and control systems and related services to governmental, commercial and industrial customers on a project-by-project basis.
Cash Flows The following table summarizes our cash flows for our fiscal 2024, fiscal 2023 and fiscal 2022: Fiscal Year Ended March 31, 2024 2023 2022 (in thousands) Operating activities $ (10,092 ) $ (2,291 ) $ (113 ) Investing activities (731 ) (6,195 ) (4,918 ) Financing activities (14 ) 10,012 104 (Decrease) increase in cash and cash equivalents $ (10,837 ) $ 1,526 $ (4,927 ) Cash Flows Related to Operating Activities.
If we experience significant liquidity constraints, we may be required to issue equity or debt securities, reduce our sales efforts, implement additional cost savings initiatives or undertake other efforts to conserve our cash. 39 Cash Flows The following table summarizes our cash flows for our fiscal 2025, fiscal 2024 and fiscal 2023: Fiscal Year Ended March 31, 2025 2024 2023 (in thousands) Operating activities $ 599 $ (10,092 ) $ (2,291 ) Investing activities 128 (731 ) (6,195 ) Financing activities 90 (14 ) 10,012 (Decrease) increase in cash and cash equivalents $ 817 $ (10,837 ) $ 1,526 Cash Flows Related to Operating Activities.
Cash used in operating activities for fiscal 2022 was $0.1 million and consisted of a net income of $6.1 million adjusted for non-cash expense items of $5.0 million and offset by net cash used by changes in operating assets and liabilities of $11.2 million.
Cash provided by operating activities for fiscal 2025 was $0.6 million and consisted of our net loss of $11.8 million adjusted for non-cash expense items and net cash provided by changes in operating assets of $12.4 million, the largest of which was a decrease of $6.1 million in inventories, a $5.1 million decrease in accounts payable, and an increase of $1.9 million in accrued expenses.
Our net working capital as of March 31, 2022 was $32.9 million, consisting of $51.2 million in current assets and $18.4 million in current liabilities.
Our net working capital as of March 31, 2024 was $16.7 million, consisting of $44.8 million of current assets and $28.1 million of current liabilities.
The $123.5 million net operating loss and tax credit carryforwards will begin to expire in varying amounts between 2024 and 2044. 42 We recognize penalties and interest related to uncertain tax liabilities in income tax expense. Penalties and interest were immaterial as of the date of adoption and are included in unrecognized tax benefits.
We recognize penalties and interest related to uncertain tax liabilities in income tax expense. Penalties and interest were immaterial as of the date of adoption and are included in unrecognized tax benefits. By their nature, tax laws are often subject to interpretation.
Replacing Reduced Revenue from Primary Customer In fiscal 2024, 2023 and 2022, one customer accounted for 25.2%, 16.2% and 49.1% of our total revenue, respectively. In fiscal 2025, we expect that our customer concentration will continue at the approximate range experienced in fiscal 2024 and 2023.
In fiscal 2026, we expect that our customer concentration will continue at the approximate range experienced in fiscal 2025 and 2024.
We see significant opportunity to cross-sell our three platforms of Lighting, Maintenance Services and EV Charging installation systems to our Commercial and Industrial customer base. We are pursuing opportunities to cross-sell to direct customers as well as through select partners.
Our LED lighting technologies have become the primary component of our revenue as we continue to strive to be a leader in the LED market. We see opportunity to cross-sell our three platforms of lighting, maintenance services and EV charging installation systems to our commercial and industrial customer base.
Sales and Marketing. Our sales and marketing expenses decreased 2.0%, or $0.2 million, in fiscal 2023 compared to fiscal 2022. The decrease was primarily due to an decrease in commission expense on lower sales partially offset by expenses associated with the Stay-Lite Lighting and Voltrek businesses. 35 Research and Development.
The decrease was primarily due to an decrease in commission expense on lower sales volume. Research and Development. Research and development expenses decreased 17.8%, or $0.3 million, in fiscal 2025 compared to fiscal 2024 primarily due to a decrease in testing costs. Interest Expense.
Compensation costs for equity incentives are recognized in earnings, on a straight-line basis over the requisite service period. Accounting for Income Taxes. As part of the process of preparing our consolidated financial statements, we are required to determine our income taxes in each of the jurisdictions in which we operate.
Additionally, it is necessary to estimate the achievement of the performance-based awards to ensure the expense remains accurate. Compensation costs for equity incentives are recognized in earnings, on a straight-line basis over the requisite service period. Accounting for Income Taxes.
The increase in our working capital in fiscal 2023 from our fiscal 2022 year-end was primarily due to an overall reduction in project volume performed for our largest customer and partially offset by the acquisition of Stay-Lite Lighting.
The change in our working capital in fiscal 2024 from our fiscal 2024 year-end was primarily due to a decrease in cash and cash equivalents and an increase in accounts payable, partially offset by an increase in revenue earned not billed.
Fiscal 2023 Compared to Fiscal 2022 Lighting segment revenue decreased in fiscal 2023 compared to fiscal 2022 by 52.3%, or $62.0 million, and operating income decreased by 123.8%, or $26.8 million, compared to fiscal 2022, due to an overall reduction in project volume performed for our largest customer.
Fiscal 2024 Compared to Fiscal 2023 Lighting segment revenue increased in fiscal 2024 compared to fiscal 2023 by 8.0%, or $4.6 million, and operating income decreased $3.8 million, compared to fiscal 2023, due to increased project volume on a government retrofit project. This increase led to a corresponding operating loss decrease in this segment, along with improved project margins.
The decrease in service revenue was primarily due to the completion of the significant project for our largest customer partially offset by revenue association with the acquisition of Stay-Lite and Voltrek. Cost of product revenue decreased by 34.1%, or $22.3 million, in fiscal 2023 versus the comparable period in fiscal 2022.
The decrease in service revenue was due to multiple customers in our maintenance segment that chose not to renew their contracts for fiscal 2025. Cost of product revenue decreased by 16.1%, or $7.1 million, in fiscal 2025 versus the comparable period in fiscal 2024. Cost of service revenue decreased by 12.1%, or $3.0 million, in fiscal 2025 versus fiscal 2024.
Operating loss increased $3.3 million, or 148.6%, in fiscal 2024 compared to fiscal 2023 primarily due to increased costs on fixed price contracts. Fiscal 2023 Compared to Fiscal 2022 Maintenance segment revenue increased $8.7 million, or 149.8% in fiscal 2023 compared to fiscal 2022 primarily due to a full year of operations from the Stay-Lite acquisition.
Fiscal 2024 Compared to Fiscal 2023 EV segment revenue increased 96.5%, or $6.1 million, in fiscal 2024 compared to fiscal 2023 primarily due to a full year of Voltrek results being included in segment results.
General and administrative expenses increased 66.8%, or $7.8 million, in fiscal 2023 compared to fiscal 2022. This comparative increase was primarily due to the acquisition of Stay-Lite Lighting and Voltrek, which included $4.0 million for compensatory Voltrek earn-out payments.
General and administrative expenses increased 7.6%, or $1.3 million, in fiscal 2025 compared to fiscal 2024. This comparative increase was primarily due to increased earn-out compensation costs along with incurred severance expenses, which were partially offset by a reduction in workforce related to restructuring that occurred in the first half of fiscal 2025. Acquisition Related Costs .
Cash used in investing activities in fiscal 2022 was $4.9 million and consisted primarily of the $4.0 million acquisition of Stay-Lite Lighting, and an investment of a non-controlling equity stake in ndustrial, Inc. of $0.5 million and purchases of property and equipment. Cash Flows Related to Financing Activities. Cash used in financing activities in fiscal 2024 was $14 thousand.
Cash Flows Related to Investing Activities. Cash provided by investing activities in fiscal 2025 was $0.1 million and consisted primarily of $0.2 million of sales of property and equipment and $0.1 million of purchases of property and equipment.
Capital Spending Our capital expenditures are primarily for general corporate purposes for our corporate headquarters and technology center, production equipment and tooling and for information technology systems. Our capital expenditures totaled $0.8 million in fiscal 2024, $0.7 million in fiscal 2023 and $0.5 million in fiscal 2022.
The final earn-out amount determined to be owed by us could be in excess of our current accrued liability for such earn-out amount and could materially adversely affect our future liquidity. Capital Spending Our capital expenditures are primarily for general corporate purposes for our corporate headquarters and technology center, production equipment and tooling and for information technology systems.
We also paid $3.0 million based on Voltrek's performance in fiscal 2023 and will pay an additional $0.9 million and could pay up to an additional $9.8 million if Voltrek exceeds certain earnings targets in fiscal 2024 and 2025, respectively.
We also paid $3.0 million in initial earn-out payments based on Voltrek’s financial performance in fiscal 2023. We may owe additional material earn-out payments based on Voltrek’s financial performance in fiscal 2025.
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Due to their size and flexibility in application, we also believe that LED lighting systems can address opportunities for retrofit applications that cannot be satisfied by other lighting technologies. Our LED lighting technologies have become the primary component of our revenue as we continue to strive to be a leader in the LED market.
Added
We are pursuing opportunities to cross-sell to direct customers, as well as through select partners. We also see opportunity for further integration of our service capabilities to expand our geographic reach and we currently intend to pursue growth organically.
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While we currently intend to primarily pursue growth organically, we also may explore potential additional business acquisitions to expand and add different capabilities to our product and services offerings. We generally do not have long-term contracts with our customers for product or turnkey services that provide us with recurring annual revenue.
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We also perform work under master services or product purchasing agreements with major customers with sales completed on a purchase order basis.
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Fiscal 2025 Outlook In fiscal 2025, we plan on focusing on the following initiatives: Executing and Marketing our Turnkey LED Retrofit Capabilities to Large National Account Customers . We believe one of our competitive advantages is our ability to deliver full turnkey LED lighting project capabilities.
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Recent Developments Replacement of our CEO On April 14, 2025, Michael Jenkins’ employment was terminated by Orion, with our Board appointing Sally A. Washlow as our new Chief Executive Officer, effective as of Mr. Jenkins’ termination date. As a result of the termination, Mr.
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These turnkey services were the principal reason we achieved significant recent revenue growth as we executed on our commitment to retrofit multiple locations for a major national account customer.
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Jenkins will receive approximately $633 thousand in severance and the acceleration of approximately 322 thousand restricted stock awards. Mr. Jenkins forfeited approximately 646 thousand performance shares along with approximately $170 thousand in tandem cash awards. Additionally, Mr. Jenkins forfeited restricted stock awards not vesting within two years from the termination date, which was a forfeiture of approximately 78 thousand shares.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeDuring fiscal 2024, we have experienced commodity price increases; however, as of the date of this report, we are not able to predict the future impact of on this risk. A hypothetical additional 20% increase in aluminum prices would have had a negative impact of $0.7 million on our net income in fiscal 2024. 43
Biggest changeDuring fiscal 2025, we have experienced commodity price increases; however, as of the date of this report, we are not able to predict the future impact of on this risk. A hypothetical additional 20% increase in aluminum prices would have had a negative impact of $0.7 million on our net income in fiscal 2025. 46
As a result, we do not currently have any significant interest rate exposure. As of March 31, 2024, we had $10.0 million of outstanding debt with floating interest rates. Commodity Price Risk. We are exposed to certain commodity price risks associated with our purchases of raw materials, most significantly our aluminum purchases.
As a result, we do not currently have any significant interest rate exposure. As of March 31, 2025, we had $10.3 million of outstanding debt with floating interest rates. Commodity Price Risk. We are exposed to certain commodity price risks associated with our purchases of raw materials, most significantly our aluminum purchases.

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