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What changed in AMERICAN SUPERCONDUCTOR CORP /DE/'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of AMERICAN SUPERCONDUCTOR CORP /DE/'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.

+392 added−381 removedSource: 10-K (2025-05-21) vs 10-K (2024-05-29)

Top changes in AMERICAN SUPERCONDUCTOR CORP /DE/'s 2025 10-K

392 paragraphs added · 381 removed · 292 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

138 edited+60 added−44 removed118 unchanged
Biggest changeFINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS (In thousands) March 31, March 31, 2024 2023 ASSETS Current assets: Cash and cash equivalents $ 90,522 $ 23,360 Accounts receivable, net 26,325 30,665 Inventory, net 41,857 36,986 Prepaid expenses and other current assets 7,295 13,429 Restricted cash 468 1,733 Total current assets 166,467 106,173 Property, plant and equipment, net 10,861 12,309 Intangibles, net 6,369 8,527 Right-of-use assets 2,557 2,857 Goodwill 43,471 43,471 Restricted cash 1,290 582 Deferred tax assets 1,119 1,114 Other assets 637 528 Total assets $ 232,771 $ 175,561 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses $ 24,235 $ 38,383 Lease liability, current portion 716 808 Debt, current portion 25 75 Contingent consideration 3,100 1,270 Deferred revenue, current portion 50,732 43,572 Total current liabilities 78,808 84,108 Deferred revenue, long term portion 7,097 7,188 Lease liability, long term portion 1,968 2,184 Deferred tax liabilities 300 243 Debt, long-term portion — 15 Other liabilities 27 26 Total liabilities 88,200 93,764 Commitments and Contingencies (Note 17) Stockholders' equity: Common stock, $ 0.01 par value, 75,000,000 shares authorized; 37,343,812 and 29,937,119 shares issued and 36,946,181 and 29,539,488 shares outstanding at March 31, 2024 and 2023, respectively 373 299 Additional paid-in capital 1,212,913 1,139,113 Treasury stock, at cost, 397,631 at March 31, 2024 and 2023, respectively (3,639 ) (3,639 ) Accumulated other comprehensive income 1,582 1,571 Accumulated deficit (1,066,658 ) (1,055,547 ) Total stockholders' equity 144,571 81,797 Total liabilities and stockholders' equity $ 232,771 $ 175,561 The accompanying notes are an integral part of the consolidated financial statements. 35 AMERICAN SUPERCONDUCTOR CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Fiscal Year Ended March 31, 2024 2023 Revenues $ 145,639 $ 105,984 Cost of revenues 110,356 97,463 Gross profit 35,283 8,521 Operating expenses: Research and development 7,991 8,966 Selling, general and administrative 31,600 28,700 Amortization of acquisition related intangibles 2,152 2,746 Change in fair value on contingent consideration 4,922 70 Restructuring (14 ) 1,048 Total operating expenses 46,651 41,530 Operating loss (11,368 ) (33,009 ) Interest income, net 1,302 252 China dissolution — (1,921 ) Other expense, net (736 ) (148 ) Loss before income tax expense (10,802 ) (34,826 ) Income tax expense 309 215 Net loss $ (11,111 ) $ (35,041 ) Net loss per common share Basic $ (0.37 ) $ (1.26 ) Diluted $ (0.37 ) $ (1.26 ) Weighted average number of common shares outstanding Basic 29,825 27,848 Diluted 29,825 27,848 The accompanying notes are an integral part of the consolidated financial statements. 36 AMERICAN SUPERCONDUCTOR CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In thousands) Fiscal Year Ended March 31, 2024 2023 Net loss $ (11,111 ) $ (35,041 ) Other comprehensive income, net of tax: China dissolution — 1,921 Foreign currency translation gain (loss) 11 (59 ) Total other comprehensive income, net of tax 11 1,862 Comprehensive loss $ (11,100 ) $ (33,179 ) The accompanying notes are an integral part of the consolidated financial statements. 37 AMERICAN SUPERCONDUCTOR CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In thousands) Common Stock Accumulated Other Total Number of Shares Par Value Additional Paid-in Capital Treasury Stock Comprehensive Income (Loss) Accumulated Deficit Stockholders' Equity Balance at March 31, 2022 28,920 $ 289 $ 1,133,536 $ (3,639 ) $ (291 ) $ (1,020,506 ) $ 109,389 Issuance of common stock - ESPP 60 1 234 — — — 235 Issuance of common stock - restricted shares, net of forfeited shares 827 8 (8 ) — — — — Stock-based compensation expense — — 4,729 — — — 4,729 Issuance of stock for 401(k) match 130 1 622 — — — 623 Cumulative translation adjustment — — — — 1,862 — 1,862 Net loss — — — — — (35,041 ) (35,041 ) Balance at March 31, 2023 29,937 $ 299 $ 1,139,113 $ (3,639 ) $ 1,571 $ (1,055,547 ) $ 81,797 Issuance of common stock - ESPP 34 — 279 — — — 279 Issuance of common stock - restricted shares, net of forfeited shares 682 7 (7 ) — — — — Stock-based compensation expense — — 4,652 — — — 4,652 Issuance of stock for 401(k) match 80 1 623 — — — 624 Issuance of common stock for contingent consideration 400 4 3,088 — — — 3,092 Issuance of common stock - equity offering 6,210 62 65,165 — — — 65,227 Cumulative translation adjustment — — — — 11 — 11 Net loss — — — — — (11,111 ) (11,111 ) Balance at March 31, 2024 37,343 $ 373 $ 1,212,913 $ (3,639 ) $ 1,582 $ (1,066,658 ) $ 144,571 The accompanying notes are an integral part of the consolidated financial statements. 38 AMERICAN SUPERCONDUCTOR CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Fiscal Year Ended March 31, 2024 2023 Cash flows from operating activities: Net loss $ (11,111 ) $ (35,041 ) Adjustments to reconcile net loss to net cash used in operations: Depreciation and amortization 4,494 5,361 Stock-based compensation expense 4,652 4,729 Provision for excess and obsolete inventory 1,970 1,467 Deferred income taxes 65 24 Change in fair value of contingent consideration 4,922 70 China dissolution — 1,921 Other non-cash items 44 600 Unrealized foreign exchange gain on cash and cash equivalents (2 ) (226 ) Changes in operating asset and liability accounts: Accounts receivable 4,340 (10,360 ) Inventory (6,841 ) (14,796 ) Prepaid expenses and other current assets 6,313 (5,757 ) Accounts payable and accrued expenses (13,825 ) 8,660 Deferred revenue 7,117 20,863 Net cash provided by (used in) operating activities 2,138 (22,485 ) Cash flows from investing activities: Purchases of property, plant and equipment (934 ) (1,236 ) Change in other assets (27 ) (281 ) Net cash used in investing activities (961 ) (1,517 ) Cash flows from financing activities: Repayment of debt (65 ) (73 ) Proceeds from public equity offering, net 65,227 — Proceeds from exercise of ESPP 279 235 Net cash provided by financing activities 65,441 162 Effect of exchange rate changes on cash, cash equivalents and restricted cash (13 ) 29 Net increase (decrease) in cash, cash equivalents and restricted cash 66,605 (23,811 ) Cash, cash equivalents and restricted cash at beginning of year 25,675 49,486 Cash, cash equivalents and restricted cash at end of year $ 92,280 $ 25,675 Supplemental schedule of cash flow information: Cash paid for income taxes, net of refunds $ 286 $ 350 Non-cash investing and financing activities Issuance of common stock to settle contingent consideration $ 3,092 $ — Issuance of common stock to settle liabilities $ 624 $ 623 The accompanying notes are an integral part of the consolidated financial statements. 39 1.
Biggest changeFINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS (In thousands) March 31, March 31, 2025 2024 ASSETS Current assets: Cash and cash equivalents $ 79,494 $ 90,522 Accounts receivable, net 46,186 26,325 Inventory, net 71,169 41,857 Prepaid expenses and other current assets 8,055 7,295 Restricted cash 1,613 468 Total current assets 206,517 166,467 Property, plant and equipment, net 38,572 10,861 Intangibles, net 5,916 6,369 Right-of-use assets 3,829 2,557 Goodwill 48,164 43,471 Restricted cash 4,274 1,290 Deferred tax assets 1,178 1,119 Equity-method investments 1,113 — Other assets 958 637 Total assets $ 310,521 $ 232,771 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses $ 32,282 $ 24,235 Lease liability, current portion 685 716 Debt, current portion — 25 Contingent consideration — 3,100 Deferred revenue, current portion 66,797 50,732 Total current liabilities 99,764 78,808 Deferred revenue, long term portion 9,336 7,097 Lease liability, long term portion 2,684 1,968 Deferred tax liabilities 1,595 300 Other liabilities 28 27 Total liabilities 113,407 88,200 Commitments and Contingencies (Note 18) Stockholders' equity: Common stock, $ 0.01 par value, 75,000,000 shares authorized; 39,887,536 and 37,343,812 shares issued and 39,484,185 and 36,946,181 shares outstanding at March 31, 2025 and 2024, respectively 399 373 Additional paid-in capital 1,259,540 1,212,913 Treasury stock, at cost, 403,351 and 397,631 at March 31, 2025 and 2024, respectively (3,765 ) (3,639 ) Accumulated other comprehensive income 1,565 1,582 Accumulated deficit (1,060,625 ) (1,066,658 ) Total stockholders' equity 197,114 144,571 Total liabilities and stockholders' equity $ 310,521 $ 232,771 The accompanying notes are an integral part of the consolidated financial statements. 49 AMERICAN SUPERCONDUCTOR CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Fiscal Year Ended March 31, 2025 2024 Revenues $ 222,818 $ 145,639 Cost of revenues 160,964 110,356 Gross profit 61,854 35,283 Operating expenses: Research and development 11,425 7,991 Selling, general and administrative 43,091 31,600 Amortization of acquisition related intangibles 1,733 2,152 Change in fair value of contingent consideration 6,682 4,922 Restructuring — (14 ) Total operating expenses 62,931 46,651 Operating loss (1,077 ) (11,368 ) Interest income, net 3,708 1,302 Other expense, net (265 ) (736 ) Income (loss) before income tax (benefit) expense 2,366 (10,802 ) Income tax (benefit) expense (3,667 ) 309 Net income (loss) $ 6,033 $ (11,111 ) Net income (loss) per common share Basic $ 0.16 $ (0.37 ) Diluted $ 0.16 $ (0.37 ) Weighted average number of common shares outstanding Basic 36,990 29,825 Diluted 37,718 29,825 The accompanying notes are an integral part of the consolidated financial statements. 50 AMERICAN SUPERCONDUCTOR CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In thousands) Fiscal Year Ended March 31, 2025 2024 Net income (loss) $ 6,033 $ (11,111 ) Other comprehensive gain (loss), net of tax: Foreign currency translation gain (loss) (17 ) 11 Total other comprehensive (loss) gain, net of tax (17 ) 11 Comprehensive income (loss) $ 6,016 $ (11,100 ) The accompanying notes are an integral part of the consolidated financial statements. 51 AMERICAN SUPERCONDUCTOR CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In thousands) Common Stock Accumulated Other Total Number of Shares Par Value Additional Paid-in Capital Treasury Stock Comprehensive Income (Loss) Accumulated Deficit Stockholders' Equity Balance at March 31, 2023 29,937 $ 299 $ 1,139,113 $ (3,639 ) $ 1,571 $ (1,055,547 ) $ 81,797 Issuance of common stock - ESPP 34 — 279 — — — 279 Issuance of common stock - restricted shares, net of forfeited shares 682 7 (7 ) — — — — Stock-based compensation expense — — 4,652 — — — 4,652 Issuance of stock for 401(k) match 80 1 623 — — — 624 Issuance of common stock for contingent consideration 400 4 3,088 — — — 3,092 Issuance of common stock - Equity Offering 6,210 62 65,165 — — — 65,227 Cumulative translation adjustment — — — — 11 — 11 Net loss — — — — — (11,111 ) (11,111 ) Balance at March 31, 2024 37,343 $ 373 $ 1,212,913 $ (3,639 ) $ 1,582 $ (1,066,658 ) $ 144,571 Issuance of common stock - ESPP 18 — 307 — — — 307 Issuance of common stock - restricted shares, net of forfeited shares 889 10 (9 ) — — — 1 Stock-based compensation expense — — 7,794 — — — 7,794 Issuance of stock for 401(k) match 41 — 845 — — — 845 Repurchase of treasury stock — — — (126 ) — — (126 ) Issuance of common stock - NWL acquisition, net of offering expenses 1,297 13 31,189 — — — 31,202 Issuance of common stock to settle contingent consideration 300 3 6,501 — — — 6,504 Cumulative translation adjustment — — — — (17 ) — (17 ) Net income — — — — — 6,033 6,033 Balance at March 31, 2025 39,888 $ 399 $ 1,259,540 $ (3,765 ) $ 1,565 $ (1,060,625 ) $ 197,114 The accompanying notes are an integral part of the consolidated financial statements. 52 AMERICAN SUPERCONDUCTOR CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Fiscal Year Ended March 31, 2025 2024 Cash flows from operating activities: Net income (loss) $ 6,033 $ (11,111 ) Adjustments to reconcile net income (loss) to net cash provided by operations: Depreciation and amortization 5,560 4,494 Stock-based compensation expense 7,794 4,652 Provision for excess and obsolete inventory 1,532 1,970 Amortization of operating lease right-of-use assets 976 321 Deferred income taxes (4,304 ) 65 Earnings from equity method investments 132 — Change in fair value of contingent consideration 6,682 4,922 Other non-cash items (587 ) 44 Unrealized foreign exchange gain on cash and cash equivalents (41 ) (2 ) Changes in operating asset and liability accounts: Accounts receivable (3,213 ) 4,340 Inventory (7,707 ) (6,841 ) Prepaid expenses and other current assets 543 5,992 Operating leases (1,563 ) (327 ) Accounts payable and accrued expenses 3,209 (13,498 ) Deferred revenue 13,239 7,117 Net cash provided by operating activities 28,285 2,138 Cash flows from investing activities: Purchases of property, plant and equipment (2,415 ) (934 ) Cash paid to settle NWL contingent consideration liability (3,278 ) — Cash paid for NWL Acquisition, net of cash acquired (29,577 ) — Change in other assets 64 (27 ) Net cash used in investing activities (35,206 ) (961 ) Cash flows from financing activities: Repurchase of treasury stock (126 ) — Repayment of debt (25 ) (65 ) Cash paid related to registration of common stock shares (148 ) — Proceeds from public equity offering, net — 65,227 Proceeds from exercise of employee stock options and ESPP 307 279 Net cash provided by financing activities 8 65,441 Effect of exchange rate changes on cash, cash equivalents and restricted cash 14 (13 ) Net (decrease) increase in cash, cash equivalents and restricted cash (6,899 ) 66,605 Cash, cash equivalents and restricted cash at beginning of year 92,280 25,675 Cash, cash equivalents and restricted cash at end of year $ 85,381 $ 92,280 Supplemental schedule of cash flow information: Cash paid for income taxes, net of refunds $ 312 $ 286 Non-cash investing and financing activities Issuance of common stock in connection with the purchase of NWL $ 31,350 $ — Issuance of common stock to settle contingent consideration $ 6,504 $ 3,092 Right-of-use assets obtained in exchange for new lease obligations $ 2,247 $ 680 Issuance of common stock to settle 401(k) match liabilities $ 845 $ 624 The accompanying notes are an integral part of the consolidated financial statements. 53 1.
Contingent Consideration Contingent Consideration On October 1, 2020 ( the "NEPSI Acquisition Date"), the Company entered into a Stock Purchase Agreement (the "NEPSI Stock Purchase Agreement") with the selling stockholders named therein.
Contingent Consideration NEPSI Contingent Consideration On October 1, 2020 ( the "NEPSI Acquisition Date"), the Company entered into a Stock Purchase Agreement (the "NEPSI Stock Purchase Agreement") with the selling stockholders named therein.
The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. The Company reevaluates these uncertain tax positions on a quarterly basis.
The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. The Company reevaluates these uncertain tax positions on a quarterly basis.
This evaluation is based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, effectively settled issues under audit and new audit activity. Any changes in these factors could result in the recognition of a tax benefit or an additional charge to the tax provision.
This evaluation is based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, effectively settled issues under audit and new audit activity. Any changes in these factors could result in the recognition of a tax benefit or an additional charge to the tax provision.
For contractual arrangements that involve variable consideration, the Company recognizes revenue for these amounts upon reaching the constraining event successfully. The Company does not generally provide for extended payment terms or provide its customers with a right of return. Infrequently, the Company receives requests from customers to hold product being purchased from us for a valid business purpose.
For contractual arrangements that involve variable consideration, the Company recognizes revenue for these amounts upon reaching the constraining event successfully. The Company does not generally provide for extended payment terms or provide its customers with a right of return. 61 Infrequently, the Company receives requests from customers to hold product being purchased from us for a valid business purpose.
The Company has provided a full valuation allowance against its net deferred income tax assets in the U.S. and Romania since it is more likely than not that its deferred tax assets will not be realizable.
The Company has provided a full valuation allowance against its net deferred income tax assets in the U.S., Romania and Poland since it is more likely than not that its deferred tax assets will not be realizable.
Subsequent Events The Company has performed an evaluation of subsequent events through the time of filing this Annual Report on Form 10 -K with the SEC, and has determined that there are no such events to report. 63
Subsequent Events The Company has performed an evaluation of subsequent events through the time of filing this Annual Report on Form 10 -K with the SEC, and has determined that there are no such events to report.
NEPSI is a U.S.-based global provider of medium-voltage metal-enclosed power capacitor banks and harmonic filter banks for use on electric power systems. NEPSI is a wholly-owned subsidiary of the Company and is operated by its Grid business unit. The purchase price was $26.0 million in cash and 873,657 restricted shares of common stock of the Company.
NEPSI is a U.S.-based global provider of medium-voltage metal-enclosed power capacitor banks and harmonic filter banks for use on electric power systems. NEPSI is a wholly-owned subsidiary of the Company and is operated by its Grid business segment. The purchase price was $26.0 million in cash and 873,657 restricted shares of common stock of the Company.
The Company includes interest and penalties related to gross unrecognized tax benefits within the provision for income taxes. See Note 13, “Income Taxes,” for further information regarding its income tax assumptions and expenses. Stock-Based Compensation The Company accounts for stock-based payment transactions using a fair value-based method and recognizes the related expense in the results of operations.
The Company includes interest and penalties related to gross unrecognized tax benefits within the provision for income taxes. See Note 14, “Income Taxes,” for further information regarding its income tax assumptions and expenses. Stock-Based Compensation The Company accounts for stock-based payment transactions using a fair value-based method and recognizes the related expense in the results of operations.
Actual results could materially differ from those estimates and would impact future results of operations and cash flows. The Company invests its available cash in high credit, quality financial instruments and invests primarily in investment-grade marketable securities, including, but not limited to, government obligations, money market funds and corporate debt instruments.
Actual results could materially differ from those estimates and would impact future results of operations and cash flows. The Company invests its available cash in high credit, quality financial instruments and invests primarily in investment-grade marketable securities, including, but not limited to, government obligations and money market funds.
The Company conducts business globally and, as a result, its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. Major tax jurisdictions include the U.S. and Austria. All U.S. income tax filings for fiscal years ended March 31, 1997 through 2023 remain open and subject to examination.
The Company conducts business globally and, as a result, its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. Major tax jurisdictions include the U.S. and Austria. All U.S. income tax filings for fiscal years ended March 31, 1997 through 2024 remain open and subject to examination.
The Company did not have any transfers of assets and liabilities from Level 1, Level 2 or Level 3 of the fair value measurement hierarchy during the year ended March 31, 2024 . A financial asset’s or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.
The Company did not have any transfers of assets and liabilities from Level 1, Level 2 or Level 3 of the fair value measurement hierarchy during the year ended March 31, 2025 . A financial asset’s or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.
Valuation Techniques Cash Equivalents Cash equivalents consist of highly liquid instruments with maturities of three months or less that are regarded as high quality, low risk investments and are measured using such inputs as quoted prices, and are classified within Level 1 of the valuation hierarchy. Cash equivalents consist principally of certificates of deposits and money market accounts.
Valuation Techniques Cash Equivalents Cash equivalents consist of highly liquid instruments with maturities of three months or less that are regarded as high quality, low risk investments and are measured using such inputs as quoted prices, and are classified within Level 1 of the valuation hierarchy. Cash equivalents consist principally of money market accounts.
The carrying amounts of cash and cash equivalents, restricted cash, accounts receivable, short-term debt, accounts payable, and accrued expenses due to their short nature approximate fair value at March 31, 2024 and 2023 . The estimated fair values have been determined through information obtained from market sources and management estimates.
The carrying amounts of cash and cash equivalents, restricted cash, accounts receivable, short-term debt, accounts payable, and accrued expenses due to their short nature approximate fair value at March 31, 2025 and 2024 . The estimated fair values have been determined through information obtained from market sources and management estimates.
The Company has not recorded an allowance for credit losses as of each of the years ended March 31, 2024 and 2023 . If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payment, additional allowances may be required.
The Company has not recorded an allowance for credit losses as of each of the years ended March 31, 2025 and 2024 . If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payment, additional allowances may be required.
The Company has a history of successfully obtaining financing under incrementally-funded contracts with the U.S. government and it expects to continue to obtain additional contract modifications in the year ending March 31, 2025 and beyond as incremental funding is authorized and appropriated by the government.
The Company has a history of successfully obtaining financing under incrementally-funded contracts with the U.S. government and it expects to continue to obtain additional contract modifications in the year ending March 31, 2026 and beyond as incremental funding is authorized and appropriated by the government.
Should actual performance rates or repair costs differ from estimates, revision to the estimated warranty liability would be required. Research and Development Costs Research and development costs are expensed as incurred. 44 Income Taxes The Company’s provision for income taxes is comprised of a current and a deferred portion.
Should actual performance rates or repair costs differ from estimates, revision to the estimated warranty liability would be required. 62 Research and Development Costs Research and development costs are expensed as incurred. Income Taxes The Company’s provision for income taxes is comprised of a current and a deferred portion.
If the carrying value of a reporting unit exceeds the reporting unit’s fair value, then an impairment charge is recognized reducing the goodwill by the excess of the carrying amount over the fair value, not to exceed the total amount of the goodwill allocated to the that reporting unit. See Note 4, "Goodwill" for further information and discussion.
If the carrying value of a reporting unit exceeds the reporting unit’s fair value, then an impairment charge is recognized reducing the goodwill by the excess of the carrying amount over the fair value, not to exceed the total amount of the goodwill allocated to the that reporting unit. See Note 5, "Goodwill" for further information and discussion.
The Company evaluated the NEPSI Acquisition earnout payment set forth in the NEPSI Stock Purchase Agreement, which is expected to require settlement in the Company's common stock, and determined the contingent consideration qualified for liability classification and derivative treatment under ASC 815, Derivatives and Hedging .
The Company evaluated the NEPSI Acquisition earnout payment set forth in the NEPSI Stock Purchase Agreement, which was expected to require settlement in the Company's common stock, and determined the contingent consideration qualified for liability classification and derivative treatment under ASC 815, Derivatives and Hedging .
The Company updated its study in fiscal 2023 to determine whether Section 382 could limit the use of its carryforwards in this manner. After completing this study, the Company has concluded that the limitation will not have a material impact on its ability to utilize its NOL carryforwards.
The Company updated its study in fiscal 2024 to determine whether Section 382 could limit the use of its carryforwards in this manner. After completing this study, the Company has concluded that the limitation will not have a material impact on its ability to utilize its NOL carryforwards.
The Company estimates the fair value of contingent consideration obligations through valuation models that incorporate probability adjusted assumptions related to the achievement of the milestones and the likelihood of making related payments, refer to Note 12 for further information regarding valuation methodology and assumptions.
The Company estimates the fair value of contingent consideration obligations through valuation models that incorporate probability adjusted assumptions related to the achievement of the milestones and the likelihood of making related payments, refer to Note 13 for further information regarding valuation methodology and assumptions.
The Company did not identify any uncertain tax positions at March 31, 2024 . The Company did not have any gross unrecognized tax benefits at March 31, 2024 or 2023 . There were no reversals of uncertain tax positions in the fiscal years ended March 31, 2024 and 2023 .
The Company did not identify any uncertain tax positions at March 31, 2025 . The Company did not have any gross unrecognized tax benefits at March 31, 2025 or 2024 . There were no reversals of uncertain tax positions in the fiscal years ended March 31, 2025 and 2024 .
In November 2023, the FASB issued ASU 2023 - 07, Segment Reporting (Topic 280 ): Improvements to Reportable Segment Disclosures . The amendments in ASU 2023 - 07 improve the disclosures about a public entity’s reportable segments and address requests from investors for additional, more detailed information about a reportable segment’s expenses.
Recent Accounting Pronouncements In November 2023, the FASB issued ASU 2023 - 07, Segment Reporting (Topic 280 ): Improvements to Reportable Segment Disclosures . The amendments in ASU 2023 - 07 improve the disclosures about a public entity’s reportable segments and address requests from investors for additional, more detailed information about a reportable segment’s expenses.
The Company's goodwill balance relates to the Neeltran acquisition in fiscal 2021, the NEPSI acquisition in fiscal 2020, and Infinia Technology Corporation acquisition in fiscal 2017 and is reported in the Grid business segment.
The Company's goodwill balance relates to the NWL acquisition in fiscal 2024, the Neeltran acquisition in fiscal 2021, the NEPSI acquisition in fiscal 2020, and Infinia Technology Corporation acquisition in fiscal 2017 and is reported in the Grid business segment.
As part of the transaction, the selling stockholders may receive up to an additional 1,000,000 shares of common stock of the Company upon the achievement of certain specified revenue objectives during varying periods of up to four years following closing of the NEPSI Acquisition.
As part of the transaction, the selling stockholders were entitled to receive up to an additional 1,000,000 shares of common stock of the Company upon the achievement of certain specified revenue objectives during varying periods of up to four years following closing of the NEPSI Acquisition.
These deposits are held in interest bearing accounts. 61 18. Employee Benefit Plans The Company has implemented a defined contribution plan (the “Plan”) under Section 401 (k) of the IRC. Any contributions made by the Company to the Plan are discretionary.
These deposits are held in interest bearing accounts. 19. Employee Benefit Plans The Company has implemented a defined contribution plan (the “Plan”) under Section 401 (k) of the IRC. Any contributions made by the Company to the Plan are discretionary.
There were 200,000 performance-based restricted shares awarded during the fiscal year ended March 31, 2023 for which the performance conditions are deemed probable to be met and the expense is being recorded over a three -year vesting period. The remaining shares awarded vest upon the passage of time.
There were 213,000 performance-based restricted shares awarded during the fiscal year ended March 31, 2024 for which the performance conditions are deemed probable to be met and the expense is being recorded over a three -year vesting period. The remaining shares awarded vest upon the passage of time.
The Company’s performance obligations may vary significantly each reporting period based on the timing of major new contractual commitments. As of March 31, 2024 , the Company had outstanding performance obligations on existing contracts under ASC 606 to be recognized in the next twelve months of approximately $139.9 million.
The Company’s performance obligations may vary significantly each reporting period based on the timing of major new contractual commitments. As of March 31, 2025 , the Company had outstanding performance obligations on existing contracts under ASC 606 to be recognized in the next twelve months of approximately $200.9 million.
There we r e 213,000 perfor mance-based restricted shares awarded during th e fiscal year ended March 31, 2024 for which the performance conditions are deemed probable to be met and the expense is being recorded over a three -year vesting period.
There we r e 250,000 perfor mance-based restricted shares awarded during th e fiscal year ended March 31, 2025 for which the performance conditions are deemed probable to be met and the expense is being recorded over a three -year vesting period.
The Company accounts for depreciation and amortization using the straight-line method to allocate the cost of property, plant and equipment over their estimated useful lives as follows: Asset Classification Estimated Useful Life in Years Machinery and equipment 3-10 Furniture and fixtures 3-5 Leasehold improvements Shorter of the estimated useful life or the remaining lease term Expenditures for maintenance and repairs are expensed as incurred.
The Company accounts for depreciation and amortization using the straight-line method to allocate the cost of property, plant and equipment over their estimated useful lives as follows: Asset Classification Estimated Useful Life in Years Building 40 Equipment and software 3-10 Furniture and fixtures 3-5 Leasehold improvements Shorter of the estimated useful life or the remaining lease term 59 Expenditures for maintenance and repairs are expensed as incurred.
If there were material ownership changes subsequent to the study, such changes could limit the Company's ability to utilize its NOL carryforwards. The total amount of undistributed foreign earnings available to be repatriated at March 31, 2024 was $2.2 million resulting in the recording of a $0.3 million deferred tax liability for foreign withholding taxes.
If there were material ownership changes subsequent to the study, such changes could limit the Company's ability to utilize its NOL carryforwards. The total amount of undistributed foreign earnings available to be repatriated at March 31, 2025 was $3.1 million resulting in the recording of a $0.4 million deferred tax liability for foreign withholding taxes.
These write-downs were based on the Company's evaluation on its inventory on hand for excess quantities and obsolescence. Deferred program costs as of March 31, 2024 and March 31, 2023 primarily represent costs incurred on programs where the Company needs to complete performance obligations before the related revenue and costs will be recognized. 51 8.
These write-downs were based on the Company's evaluation on its inventory on hand for excess quantities and obsolescence. Deferred program costs as of March 31, 2025 and March 31, 2024 primarily represent costs incurred on programs where the Company needs to complete performance obligations before the related revenue and costs will be recognized. 9.
The Company periodically assesses the need to provide for impairment on these purchase contracts and records a loss on purchase commitments when required. Lease Commitments During the years ended March 31, 2024 and 2023 , all lease costs were recorded in selling, general and administrative expense. See Note 15, "Leases" for further details.
The Company periodically assesses the need to provide for impairment on these purchase contracts and records a loss on purchase commitments when required. 82 Lease Commitments During the years ended March 31, 2025 and 2024 , all lease costs were recorded in selling, general and administrative expense. See Note 16, "Leases" for further details.
See Note 5, “Fair Value Measurements” for a full discussion on fair value measurements. 46 3. Revenue Recognition The Company’s revenues in its Grid segment are derived primarily through enabling the transmission and distribution of power, providing planning services that allow it to identify power grid needs and risks, and developing ship protection systems for the U.S. Navy.
See Note 6, “Fair Value Measurements” for a full discussion on fair value measurements. 65 4. Revenue Recognition The Company’s revenues in its Grid segment are derived primarily through enabling the transmission and distribution of power, providing planning services that allow it to identify power grid needs and risks, and developing ship protection systems for the U.S. Navy.
There are also approximately $23.7 million of outstanding performance obligations to be recognized over a period of thirteen to sixty months. The remaining performance obligations are subject to customer actions and therefore the timing of revenue recognition cannot be reasona bly estimated.
There are also approximately $109.4 million of outstanding performance obligations to be recognized over a period of thirteen to sixty months. The remaining performance obligations are subject to customer actions and therefore the timing of revenue recognition cannot be reasona bly estimated.
Research and development and other tax credit carryforwards amounting to approximately $10.6 million and $2.8 million are availab le to offset federal and state income taxes, respectively, and will expire in the years ending 2025 through 2041.
Research and development and other tax credit carryforwards amounting to approximately $10.6 million and $2.5 million are availab le to offset federal and state income taxes, respectively, and will expire in the years ending 2026 through 2041.
Legal costs incurred in connection with loss contingencies are expensed as incurred. See Note 17, “Commitments and Contingencies,” for further information. Disclosure of Fair Value of Financial Instruments The Company’s financial instruments consist principally of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued expenses, and derivatives.
Legal costs incurred in connection with loss contingencies are expensed as incurred. See Note 18, “Commitments and Contingencies,” for further information. Disclosure of Fair Value of Financial Instruments The Company’s financial instruments consist principally of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued expenses, and contingent consideration.
After consideration of all the available evidence, both positive and negative, the Company has determined tha t a $177.1 million valuation allowance at March 31, 2024 is necessary to reduce the deferred tax assets to the amount that will more likely than not be realized which is a $6.5 million decrease from the $183.6 valuation allowance as of March 31, 2023 .
After consideration of all the available evidence, both positive and negative, the Company has determined tha t a $171.7 million valuation allowance at March 31, 2025 is necessary to reduce the deferred tax assets to the amount that will more likely than not be realized which is a $5.4 million decrease from the $177.1 million valuation allowance as of March 31, 2024 .
In addition, the Company has various contractual arrangements in which minimum quantities of goods or services have been committed to be purchased on an annual basis. As of March 31, 2024 , the Company had $1.3 million of restricted cash included in long-term assets and $0.5 million of restricted cash included in current assets.
In addition, the Company has various contractual arrangements in which minimum quantities of goods or services have been committed to be purchased on an annual basis. As of March 31, 2025 , the Company had $4.3 million of restricted cash included in long-term assets and $1.6 million of restricted cash included in current assets.
These services often lead to sales of grid interconnection solutions for wind farms and solar power plants, power quality systems, and transmission and distribution cable systems. The Company also sells ship protection products to the U.S. Navy through its Grid business segment.
These services often lead to sales of grid interconnection solutions for wind farms and solar power plants, power quality systems, and transmission and distribution cable systems. The Company also sells ship protection products to the U.S.
Contingent Consideration Contingent consideration relates to the earnout payment set forth in the Stock Purchase Agreement governing the acquisition of Northeast Power Systems, Inc ("NEPSI") that provides that the selling stockholders may receive up to an additional 1,000,000 shares of common stock of the Company upon the achievement of certain specified revenue objectives over varying periods of up to four years following the NEPSI Acquisition Date which conclude in September of 2024.
Contingent Consideration Contingent consideration relates to the earnout payment set forth in the Stock Purchase Agreement governing the acquisition of Northeast Power Systems, Inc ("NEPSI") that provided that NEPSI could receive up to an additional 1,000,000 shares of common stock of the Company upon the achievement of certain specified revenue objectives over varying periods of up to four years following the NEPSI Acquisition Date which concluded in September of 2024.
As of March 31, 2023 , the Company had $0.6 million of restricted cash included in long term assets and $1.7 million of restricted cash included in current assets. These amounts included in restricted cash primarily represent deposits to secure letters of credit for various supply contracts and long-term projects or collateral deposits.
As of March 31, 2024 , the Company had $1.3 million of restricted cash included in long term assets and $0.5 million of restricted cash included in current assets. These amounts included in restricted cash primarily represent deposits to secure letters of credit for various supply contracts and long-term projects or collateral deposits.
Net foreign currency gains and losses are included in other expense, net on the consolidated statements of operations and were net losses of $0.7 million and $0.1 million, for the fiscal years ended March 31, 2024 and 2023 , respectively.
Net foreign currency gains and losses are included in other expense, net on the consolidated statements of operations and were net losses of $0.7 million, for both of the fiscal years ended March 31, 2025 and 2024 .
In other license arrangements, the Company may also agree to provide training services to transfer the technology know-how. In these arrangements, the Company has determined that the licenses have no standalone value to the customer and are not separable from training services as the Company can only fully transfer the technology know-how through the training component.
In these arrangements, the Company has determined that the licenses have no standalone value to the customer and are not separable from training services as the Company can only fully transfer the technology know-how through the training component.
The Company has elected to recognize revenue based on the as invoiced practical expedient if there is a right to consideration from a customer in an amount that corresponds directly with the value of the Company's performance. The Company monitors costs to meet its obligations on its customer contracts.
The Company has elected to recognize revenue based on the as invoiced practical expedient if there is a right to consideration from a customer in an amount that corresponds directly with the value of the Company's performance.
The Company evaluates its long-lived assets whenever events or circumstances suggest that the carrying amount of an asset or group of assets may not be recoverable from the estimated undiscounted future cash flows. There were no indicators requiring impairment testing on the Company's long-lived assets during the fiscal years ended March 31, 2024 and 2023 .
The Company evaluates its long-lived assets whenever events or circumstances suggest that the carrying amount of an asset or group of assets may not be recoverable from the estimated undiscounted future cash flows. There was no impairment indicators during the fiscal years ended March 31, 2025 and 2024 .
At March 31, 2024 , the Company had aggregate net operating loss carryforwards in the U.S. for federal and state income tax purposes of approximately $682.7 million and $197.2 m illion, respectively, which expire in the years ending March 31, 2025 through 2040.
At March 31, 2025 , the Company had aggregate net operating loss carryforwards in the U.S. for federal and state income tax purposes of approximately $655.7 million and $185.6 m illion, respectively, which expire in the years ending March 31, 2026 through 2040.
In accordance with the applicable accounting guidance for the treatment of long-lived assets, the Company reviews the carrying value of its long-lived assets or asset group that is held and used, including intangible assets subject to amortization, for impairment whenever events and circumstances indicate that the carrying value of the assets may not be recoverable.
Valuation of Long-Lived Assets The Company reviews the carrying value of its long-lived assets or asset group that is held and used, including intangible assets subject to amortization, for impairment whenever events and circumstances indicate that the carrying value of the assets may not be recoverable.
These consolidated financial statements of the Company have been prepared on a going concern basis in accordance with United States generally accepted accounting principles (“GAAP”) and the Securities and Exchange Commission’s (“SEC”) instructions to Form 10 -K.
These consolidated financial statements of the Company have been prepared on a going concern basis in accordance with United States generally accepted accounting principles (“GAAP”) and the Securities and Exchange Commission’s (“SEC”) instructions to Form 10 -K. Certain prior period amounts were reclassified to conform to the presentation in the current period.
The Company defines a lease as a contract, or part of a contract, that conveys the right to control the use of identified property or equipment (an identified asset) for a period of time in exchange for consideration.
Leases The Company determines whether a contract is or contains a lease at inception of a contract. The Company defines a lease as a contract, or part of a contract, that conveys the right to control the use of identified property or equipment (an identified asset) for a period of time in exchange for consideration.
During the fiscal year ended March 31, 2024 there were no such held transactions. Revenues for the fiscal year ended March 31, 2023 included $0.6 million from such held transactions. The Company has elected to record taxes collected from customers on a net basis and does not include tax amounts in revenue or costs of revenue.
During the fiscal years ended March 31, 2025 and 2024 there were no such held transactions. The Company has elected to record taxes collected from customers on a net basis and does not include tax amounts in revenue or costs of revenue.
The total fair value of restricted stock that vested during the fiscal years ended March 31, 2024 and 2023 was $4.5 million and $2.6 million, respectively.
The total fair value of restricted stock that vested during the fiscal years ended March 31, 2025 and 2024 was $10.7 million and $4.5 million, respectively.
Amortization recovery for such costs are five years for domestic expenditures and fifteen for foreign expenditures. As of March 31, 2024 , the Company had approximately $18.4 million of research and experimental expenses that had been capitalized under Section 174.
Amortization recovery for such costs are five years for domestic expenditures and fifteen for foreign expenditures. As of March 31, 2025 , the Company had approximately $31.9 million of research and experimental expenses that had been capitalized under Section 174 with a remaining basis of $24.4 million.
See Note 12, "Contingent Consideration" for further discussion.
See Note 13, "Contingent Consideration" for further discussion.
Following the release of ASU 2023 - 07 in November 2023, the effective date will be annual reporting periods beginning after December 15, 2024. As of March 31, 2024 , the Company is evaluating the impact on its consolidated financial statements.
Following the release of ASU 2024 - 03 in November 2024, the effective date will be annual reporting periods beginning after December 15, 2026. The Company is evaluating the impact on its consolidated financial statements. 22.
The following table reconciles the numerators and denominators of the EPS calculation for the fiscal years ended March 31, 2024 and 2023 (in thousands except per share amounts): Fiscal year ended March 31, 2024 2023 Numerator: Net loss $ (11,111 ) $ (35,041 ) Denominator: Weighted-average shares of common stock outstanding 31,277 29,038 Weighted-average shares subject to repurchase (1,452 ) (1,190 ) Shares used in per-share calculation ― basic 29,825 27,848 Shares used in per-share calculation ― diluted 29,825 27,848 Net loss per share ― basic $ (0.37 ) $ (1.26 ) Net loss per share ― diluted $ (0.37 ) $ (1.26 ) Foreign Currency Translation The functional currency of all the Company’s foreign subsidiaries is the U.S. dollar, except for AMSC Austria, for which the local currency (Euro) is the functional currency.
The following table reconciles the numerators and denominators of the EPS calculation for the fiscal years ended March 31, 2025 and 2024 (in thousands except per share amounts): Fiscal year ended March 31, 2025 2024 Numerator: Net income (loss) $ 6,033 $ (11,111 ) Denominator: Weighted-average shares of common stock outstanding 38,457 31,277 Weighted-average shares subject to repurchase (1,467 ) (1,452 ) Shares used in per-share calculation ― basic 36,990 29,825 Shares used in per-share calculation ― diluted 37,718 29,825 Net loss per share ― basic $ 0.16 $ (0.37 ) Net loss per share ― diluted $ 0.16 $ (0.37 ) Foreign Currency Translation The functional currency of all the Company’s foreign subsidiaries is the U.S. dollar, except for AMSC Austria, for which the local currency (Euro) is the functional currency.
The 2022 Plan authorizes the issuance of 1,150,000 shares of common stock. The amendment to the 2007 Director Plan increased the total number of shares of common stock authorized for issuance under the 2007 Director Plan from 280,000 shares to 430,000 shares.
The amendment to the 2007 Director Plan increased the total number of shares of common stock authorized for issuance under the 2007 Director Plan from 430,000 shares to 580,000 shares.
The total unrecognized compensation cost for unvested outstanding stock options was less than $0.1 million as of March 31, 2024 . The total unrecognized compensation cost for unvested outstanding restricted stock was $4.7 million as of March 31, 2024 . This expense will be recognized over a weighted-average expense period of approximately 1.6 years.
The total unrecognized compensation cost for unvested outstanding restricted stock was $15.6 million as of March 31, 2025 . This expense will be recognized over a weighted-average expense period of approximately 1.6 years.
Intangible Assets Intangible assets at March 31, 2024 and 2023 consisted of the following (in thousands): 2024 2023 Gross Amount Accumulated Amortization Net Book Value Gross Amount Accumulated Amortization Net Book Value Estimated Useful Life Backlog 681 (681 ) — 681 (675 ) 6 2 Trade names and trademarks 1,800 — 1,800 1,800 — 1,800 Indefinite Customer relationships 9,600 (6,649 ) 2,951 9,600 (4,980 ) 4,620 7 Core technology and know-how 5,970 (4,352 ) 1,618 5,970 (3,869 ) 2,101 5-10 Intangible assets $ 18,051 $ (11,682 ) $ 6,369 $ 18,051 $ (9,524 ) $ 8,527 The Company recorded intangible amortization expense of $2.2 million and $2.8 million, for the fiscal years ended March 31, 2024 and 2023 , respectively.
Intangible Assets Intangible assets at March 31, 2025 and 2024 consisted of the following (in thousands): 2025 2024 Gross Amount Accumulated Amortization Net Book Value Gross Amount Accumulated Amortization Net Book Value Estimated Useful Life Backlog 1,381 (1,381 ) — 681 (681 ) - 2 Trade names and trademarks 1,800 — 1,800 1,800 — 1,800 Indefinite Customer relationships 10,880 (7,901 ) 2,980 9,600 (6,649 ) 2,951 7 - 10 Core technology and know-how 5,970 (4,834 ) 1,136 5,970 (4,352 ) 1,618 5-10 Intangible assets $ 20,031 $ (14,116 ) $ 5,916 $ 18,051 $ (11,682 ) $ 6,369 The Company recorded intangible amortization expense of $2.4 million and $2.2 million, for the fiscal years ended March 31, 2025 and 2024 , respectively.
As of March 31, 2024 , the ESPP had 66,221 shares available for future issuance. The Company recognized less than $0.1 million of compensation expense for both the fiscal years ended March 31, 2024 and 2023 , related to the ESPP. 60 17.
As of March 31, 2025 , the ESPP had 48,635 shares available for future issuance. The Company recognized less than $0.1 million of compensation expense for both the fiscal years ended March 31, 2025 and 2024 , related to the ESPP. 18.
Changes in the Company’s contract assets, which are included in “Unbilled accounts receivable” and “De ferred program costs” (see Note 6, “Accounts Receivable” and Note 7, “Inventory” for a reconciliation to the consolidated balance sheets) and "Contract liabilities", which are included in the current portion and long term portion of “Deferred revenue” in the Company’s consolidated balance sheets, are as follows (in thousands): Unbilled AR Deferred Program Costs Contract Liabilities Ending balance as of March 31, 2023 $ 9,958 $ 2,136 $ 50,760 Increases for costs incurred to fulfill performance obligations — 4,411 — Increase (decrease) due to customer billings (20,392 ) — 77,685 Decrease due to cost recognition on completed performance obligations — (4,021 ) — Increase (decrease) due to recognition of revenue based on transfer of control of performance obligations 16,572 — (70,529 ) Other changes and foreign currency exchange impact 12 (3 ) (87 ) Ending balance as of March 31, 2024 $ 6,150 $ 2,523 $ 57,829 Unbilled AR Deferred Program Costs Contract Liabilities Beginning balance as of March 31, 2022 $ 6,492 $ 858 $ 30,034 Increases for costs incurred to fulfill performance obligations — 2,476 — Increase (decrease) due to customer billings (14,373 ) — 77,489 Decrease due to cost recognition on completed performance obligations — (1,189 ) — Increase (decrease) due to recognition of revenue based on transfer of control of performance obligations 17,839 — (56,643 ) Other changes and foreign currency exchange impact — (9 ) (120 ) Ending balance as of March 31, 2023 $ 9,958 $ 2,136 $ 50,760 The Company’s remaining performance obligations represent the unrecognized revenue value of the Company’s contractual commitments.
Changes in the Company’s contract assets, which are included in “Unbilled accounts receivable” and “De ferred program costs” (see Note 7, “Accounts Receivable” and Note 8, “Inventory” for a reconciliation to the consolidated balance sheets) and "Contract liabilities", which are included in the current portion and long term portion of “Deferred revenue” in the Company’s consolidated balance sheets, are as follows (in thousands): Unbilled AR Deferred Program Costs Contract Liabilities Beginning balance as of March 31, 2024 $ 6,150 $ 2,523 $ 57,829 Increases for balances acquired — — 5,049 Increases for costs incurred to fulfill performance obligations — 16,363 — Increase (decrease) due to customer billings (8,754 ) — 120,533 Decrease due to cost recognition on completed performance obligations — (13,131 ) — Increase (decrease) due to recognition of revenue based on transfer of control of performance obligations 8,981 — (107,211 ) Other changes and foreign currency exchange impact (1 ) 1 (67 ) Ending balance as of March 31, 2025 $ 6,376 $ 5,756 $ 76,133 Unbilled AR Deferred Program Costs Contract Liabilities Beginning balance as of March 31, 2023 $ 9,958 $ 2,136 $ 50,760 Increases for costs incurred to fulfill performance obligations — 4,411 — Increase (decrease) due to customer billings (20,392 ) — 77,685 Decrease due to cost recognition on completed performance obligations — (4,021 ) — Increase (decrease) due to recognition of revenue based on transfer of control of performance obligations 16,572 — (70,529 ) Other changes and foreign currency exchange impact 12 (3 ) (87 ) Ending balance as of March 31, 2024 $ 6,150 $ 2,523 $ 57,829 68 The Company’s remaining performance obligations represent the unrecognized revenue value of the Company’s contractual commitments.
Fair Value Measurements A valuation hierarchy for disclosure of the inputs to valuation used to measure fair value has been established. This hierarchy prioritizes the inputs into three broad levels as follows: Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
This hierarchy prioritizes the inputs into three broad levels as follows: Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
The Company has provided a valuation allowance against its U.S. and Romania deferred income tax assets since the Company believes that it is more likely than not that these deferred tax assets are not currently realizable due to uncertainty around profitability in the future. Accounting for income taxes requires a two -step approach to recognizing and measuring uncertain tax positions.
The Company has provided a valuation allowance against its U.S., Poland, and Romania deferred income tax assets since the Company believes that it is more likely than not that these deferred tax assets are not currently realizable due to uncertainty around profitability in the future.
The first step is to evaluate the tax position for recognition by determining if, based on the technical merits, it is more likely than not that the position will be sustained upon audit, including resolution of related appeals or litigation processes, if any.
Accounting for income taxes requires a two -step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if, based on the technical merits, it is more likely than not that the position will be sustained upon audit, including resolution of related appeals or litigation processes, if any.
The first step is to evaluate the tax position for recognition by determining if, based on the technical merits, it is more likely than not that the position will be sustained upon audit, including resolution of related appeals or litigation processes, if any.
Accounting for income taxes requires a two -step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if, based on the technical merits, it is more likely than not that the position will be sustained upon audit, including resolution of related appeals or litigation processes, if any.
Changes in fair value are recorded to other income (expense), net. The fair value for the contingent consideration is estimated using a Monte Carlo simulation and subject to revaluation at each balance sheet date.
Changes in fair value are recorded to other income (expense), net. The fair value for the contingent consideration is estimated using a Monte Carlo simulation and subject to revaluation at each balance sheet date. The Company classifies the estimates used to fair value these instruments as Level 3 inputs.
The Company recorded a loss of $4.9 million for the increase in the fair value of the contingent consideration in the year ended March 31, 2024 . The Company recorded a loss of $0.1 million for the increase in the fair value of the contingent consideration in the year ended March 31, 2023 . 54 13.
The Company recorded a loss of $3.4 million for the increase in the fair value of the contingent consideration in the year ended March 31, 2025 . The Company recorded a loss of $4.9 million for the increase in the fair value of the contingent consideration in the year ended March 31, 2024 .
The following table summarizes stock-based compensation expense by financial statement line item for the fiscal years ended March 31, 2024 and 2023 (in thousands): Fiscal years ended March 31, 2024 2023 Cost of revenues $ 293 $ 283 Research and development 627 865 Selling, general and administrative 3,732 3,581 Total $ 4,652 $ 4,729 59 The following table summarizes the information concerning currently outstanding and exercisable employee and non-employee options: Options / Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (thousands) Outstanding at March 31, 2023 81,205 $ 16.92 Granted — — Exercised — — Canceled/forfeited (44,999 ) 24.95 Outstanding at March 31, 2024 36,206 $ 6.94 6.2 $ 238 Exercisable at March 31, 2024 25,924 $ 7.34 5.4 $ 160 Fully vested and expected to vest at March 31, 2024 36,107 $ 6.94 6.2 $ 237 The Company did not grant any stock options under the 2007 Director Plan nor under the 2022 Plan during the fiscal year ended March 31, 2024 .
The following table summarizes stock-based compensation expense by financial statement line item for the fiscal years ended March 31, 2025 and 2024 (in thousands): Fiscal years ended March 31, 2025 2024 Cost of revenues $ 536 $ 293 Research and development 1,132 627 Selling, general and administrative 6,126 3,732 Total $ 7,794 $ 4,652 The following table summarizes the information concerning currently outstanding and exercisable employee and non-employee options: Options / Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (thousands) Outstanding at March 31, 2024 36,206 $ 6.94 Granted — Exercised — Canceled/forfeited — Outstanding at March 31, 2025 36,206 $ 6.94 5.2 $ 406 Exercisable at March 31, 2025 36,206 $ 6.94 5.2 $ 406 Fully vested and expected to vest at March 31, 2025 36,206 $ 6.94 5.2 $ 406 81 The Company did not grant any stock options under the 2007 Director Plan nor the 2022 Plan during both fiscal years ended March 31, 2025 and 2024 .
On an ongoing basis, the Company evaluates its estimates, including those related to revenue recognition, collectability of receivables, realizability of inventory, goodwill and intangible assets, contingent consideration, warranty provisions, stock-based compensation, tax reserves, and deferred tax assets. Provisions for depreciation are based on their estimated useful lives using the straight-line method.
On an ongoing basis, the Company evaluates its estimates, including those related to revenue recognition, goodwill and intangible assets, business combinations, tax reserves, and deferred tax assets. Provisions for depreciation are based on their estimated useful lives using the straight-line method.
Supplemental balance sheet information related to leases at March 31, 2024 and 2023 are as follows (in thousands): March 31, 2024 March 31, 2023 Leases: Right-of-use assets - Financing $ — $ 1 Right-of-use assets - Operating 2,557 2,857 Total right-of-use assets $ 2,557 $ 2,858 Lease liabilities - ST Financing $ — $ 1 Lease liabilities - ST Operating 716 807 Lease liabilities - LT Financing — — Lease liabilities - LT Operating 1,968 2,184 Total lease liabilities $ 2,684 $ 2,992 Weighted-average remaining lease term 3.49 3.95 Weighted-average discount rate 9.83 % 6.46 % The costs related to the Company's finance lease are not material.
Supplemental balance sheet information related to leases at March 31, 2025 and 2024 are as follows (in thousands): March 31, 2025 March 31, 2024 Leases: Right-of-use assets - Operating 3,829 2,557 Total right-of-use assets $ 3,829 $ 2,557 Lease liabilities - ST Operating 685 716 Lease liabilities - LT Operating 2,684 1,968 Total lease liabilities $ 3,369 $ 2,684 Weighted-average remaining lease term 4.94 3.49 Weighted-average discount rate 14.94 % 9.83 % The costs related to the Company's finance lease are not material.
The impact of global sources of instability, including the wars between Russia and Ukraine and Israel and Hamas, on the global financing markets may reduce the Company's ability to raise additional capital, if necessary, which could negatively impact the Company's liquidity.
The impact of global sources of instability on the global financing markets may reduce the Company's ability to raise additional capital, if necessary, which could negatively impact the Company's liquidity.
All fiscal years from the fiscal year ended March 31, 2022 through 2024 remain open and subject to examination in Austria. Tax filings in Romania for the fiscal years ended March 31, 2019 through 2024 remain open and subject to examination. 57 14.
All fiscal years from the fiscal year ended March 31, 2023 through 2025 remain open and subject to examination in Austria. Tax filings in Romania for the fiscal years ended March 31, 2020 through 2025 remain open and subject to examination.
The Form S- 3 allows the Company to offer and sell from time-to-time up to $250 million of common stock, debt securities, warrants or units comprised of any combination of these securities.
The Second Form S- 3 allows the Company to offer and sell from time-to-time unspecified amounts of common stock, debt securities, warrants or units comprised of any combination of these securities and allows certain selling stockholders to offer and sell from time-to-time common stock.
Accounts Payable and Accrued Expenses Accounts payable and accrued expenses at March 31, 2024 and March 31, 2023 consisted of the following (in thousands): March 31, 2024 March 31, 2023 Accounts payable $ 4,476 $ 13,935 Accrued inventories in-transit 539 2,267 Accrued other miscellaneous expenses 2,366 2,662 Accrued contract loss 97 3,464 Advanced deposits 2,270 5,653 Accrued compensation 10,326 5,430 Income taxes payable 346 409 Accrued product warranty 2,363 2,638 Accrued commissions 1,452 1,208 Accrued restructuring — 717 Total $ 24,235 $ 38,383 The Company generally provides a one to three year warranty on its products, commencing upon delivery or installation, where applicable.
Accounts Payable and Accrued Expenses Accounts payable and accrued expenses at March 31, 2025 and March 31, 2024 consisted of the following (in thousands): March 31, 2025 March 31, 2024 Accounts payable $ 6,733 $ 4,476 Accrued inventories in-transit 2,111 539 Accrued other miscellaneous expenses 3,600 2,366 Accrued contract loss 97 97 Advanced deposits 1,267 2,270 Accrued compensation 13,418 10,326 Income taxes payable 305 346 Accrued product warranty 3,033 2,363 Accrued commissions 1,718 1,452 Total $ 32,282 $ 24,235 The Company generally provides a one to three year warranty on its products, commencing upon delivery or installation where applicable.
The following table sets forth customers who represented 10% or more of the Company’s total revenues for the years ended March 31, 2024 and 2023 : Year Ended Reportable March 31, Segment 2024 2023 Inox Wind Limited Wind 13 % Fuji Bridex Pte Ltd Grid 15 % 4.
The following table sets forth customers who represented 10% or more of the Company’s total revenues for the years ended March 31, 2025 and 2024 : Year Ended Reportable March 31, Segment 2025 2024 Inox Wind Limited Wind 14 % 13 % 5.
For each of the fiscal years ended March 31, 2024 and 2023 , 80% of revenue was recognized at the point in time when control transferred to the customer, with the remainder being recognized over time.
For the fiscal year ended March 31, 2025 , 88% of revenue was recognized at the point in time when control transferred to the customer, with the remainder being recognized over time.
The Form S- 3 is intended to provide the Company flexibility to conduct registered sales of its securities, subject to market conditions, in order to fund its future capital needs.
The Second Form S- 3 assisted the Megatran selling stockholders in the resale of their common stock and is intended to provide the Company flexibility to conduct registered sales of its securities, subject to market conditions, in order to fund its future capital needs.
Stockholders’ Equity Stock-Based Compensation Plans As of March 31, 2024 , the Company had two active stock plans: the Amended and Restated 2007 Director Stock Plan (the “2007 Director Plan”) and the 2022 Stock Incentive Plan (the "2022 Plan"). On August 2, 2022, the Company's stockholders approved the 2022 Plan and amendments to the Company's 2007 Director Plan.
Stockholders’ Equity Stock-Based Compensation Plans As of March 31, 2025 , the Company had two active stock plans: the Amended and Restated 2007 Director Stock Plan, as amended (the “2007 Director Plan”) and the 2022 Stock Incentive Plan, as amended and restated (the "2022 Plan").
Following the release of ASU 2023 - 09 in December 2023, the effective date will be annual reporting periods beginning after December 15, 2024. As of March 31, 2024 , the Company is evaluating the impact on its consolidated financial statements.
Following the release of ASU 2023 - 09 in December 2023, the effective date will be annual reporting periods beginning after December 15, 2024. The Company is evaluating the impact on its consolidated financial statements. In March 2024, the FASB issued ASU 2024 - 02, Codification Improvements—Amendments to Remove References to the Concepts Statements .
Inventory Inventory, net of reserves, at March 31, 2024 and March 31, 2023 consisted of the following (in thousands): March 31, 2024 March 31, 2023 Raw materials $ 20,622 $ 16,654 Work-in-process 14,872 15,200 Finished goods 3,840 2,996 Deferred program costs 2,523 2,136 Inventory $ 41,857 $ 36,986 The Company recorded inventory write-downs of $2.0 million and $1.5 million for the fiscal years ended March 31, 2024 and 2023 , respectively.
Inventory Inventory, net of reserves, at March 31, 2025 and March 31, 2024 consisted of the following (in thousands): March 31, 2025 March 31, 2024 Raw materials $ 35,892 $ 20,622 Work-in-process 19,633 14,872 Finished goods 9,888 3,840 Deferred program costs 5,756 2,523 Inventory $ 71,169 $ 41,857 The Company recorded inventory write-downs of $1.5 million and $2.0 million for the fiscal years ended March 31, 2025 and 2024 , respectively.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

91 edited+18 added−13 removed119 unchanged
Biggest changeAny failure to manage, expand, or update our IT Systems or any disruption to or failure in the operation of such IT Systems could harm our business. In addition, the costs associated with updating and securing our IT Systems are likely to increase as such security measures become more complex, which may harm our operating results and financial condition.
Biggest changeIn addition, the costs associated with updating and securing our IT Systems or Confidential Information are likely to increase as such security measures become more complex, which may harm our operating results and financial condition. We face numerous and evolving cybersecurity risks that threaten the confidentiality, integrity and availability of our IT Systems and Confidential Information.
Companies such as Ultra Maritime, L3 Harris, and Raytheon have the bulk of the copper-based business today. As the HTS systems markets develop, other large industrial companies may enter those fields and compete with us. If we are unable to compete successfully, it may harm our business, which in turn may limit our ability to acquire or retain customers.
Companies such as Ultra Maritime, L3 Harris, and Raytheon have the bulk of the copper-based business today. 29 As the HTS systems markets develop, other large industrial companies may enter those fields and compete with us. If we are unable to compete successfully, it may harm our business, which in turn may limit our ability to acquire or retain customers.
Regardless of merit, legal proceedings could result in substantial costs and significantly and adversely impact our reputation and divert management’s attention and resources, which could have a material adverse effect on our business, operating results or financial condition. In addition, such lawsuits may make it more difficult to finance our operations.
Regardless of merit, legal proceedings could result in substantial costs and significantly and adversely impact our reputation and divert management’s attention and resources, which could have a material adverse effect on our business, operating results or financial condition. In addition, such lawsuits may make it more difficult to finance our operations. 33
Further, in the event that any of our government contracts are terminated for cause, it could affect our ability to obtain future government contracts which could, in turn, seriously harm our ability to develop our technologies and products. Changes in U.S. government defense spending could negatively impact our financial position, results of operations, liquidity and overall business.
Further, in the event that any of our government contracts are terminated for cause, it could affect our ability to obtain future government contracts which could, in turn, seriously harm our ability to develop our technologies and products. 23 Changes in U.S. government defense spending could negatively impact our financial position, results of operations, liquidity and overall business.
We manage certain IT Systems but also rely on IT Systems and various products and services provided by critical third-party vendors and others in the supply chain. We also collect and store sensitive and confidential information ("Confidential Information") in the ordinary course of our business.
We manage certain IT Systems but also rely on IT Systems and various products and services provided by critical third-party vendors and others in the supply chain. We also collect and store sensitive, personal and confidential information ("Confidential Information") in the ordinary course of our business.
We cannot assure you that we will realize the revenue we expect to generate from our backlog in the periods we expect to realize such revenue, or at all. In addition, the backlog of orders, if realized, may not result in profitable revenue.
We cannot assure you that we will realize the revenue we expect to generate from our backlog in the periods we expect to realize such revenue, or at all. 21 In addition, the backlog of orders, if realized, may not result in profitable revenue.
We rely upon the capacity, reliability, and security of information technology hardware and software infrastructure and networks (collectively, "IT Systems"), and our ability to expand and update IT Systems in response to our changing needs.
We rely upon the capacity, reliability, and security of information technology hardware and software infrastructure and networks (collectively, "IT Systems"), and our ability to expand and update such IT Systems in response to our changing needs.
Our U.S. government contracts customarily contain other provisions that give the government substantial rights and remedies, many of which are not typically found in commercial contracts, including provisions that allow the government to: • obtain certain rights to the intellectual property that we develop under the contract; • decline to award future contracts if actual or apparent organizational conflicts of interest are discovered, or to impose organizational conflict mitigation measures as a condition of eligibility for an award; • suspend or debar us from doing business with the government or a specific government agency; and • pursue criminal or civil remedies under the False Claims Act, False Statements Act and similar remedy provisions unique to government contracting.
Our government contracts customarily contain other provisions that give the government substantial rights and remedies, many of which are not typically found in commercial contracts, including provisions that allow the applicable government to: • obtain certain rights to the intellectual property that we develop under the contract; • decline to award future contracts if actual or apparent organizational conflicts of interest are discovered, or to impose organizational conflict mitigation measures as a condition of eligibility for an award; • suspend or debar us from doing business with the government or a specific government agency; and • pursue criminal or civil remedies under the False Claims Act, False Statements Act and similar remedy provisions unique to government contracting.
Our ability to implement our business strategy could also be affected by a number of factors beyond our control, such as increased competition, legal developments, government regulation, general economic conditions, including as a result of the ongoing wars between Russia and Ukraine and Israel and Hamas, or increased operating costs or expenses.
Our ability to implement our business strategy could also be affected by a number of factors beyond our control, such as increased competition, legal developments, government regulation, general economic conditions, including as a result of the ongoing wars between Russia and Ukraine and Israel and Hamas and trade conflicts, or increased operating costs or expenses.
As a result, we and our third-party providers may be unable to timely or effectively anticipate, detect, investigate, remediate or recover from cyberattacks in the future or avoid material impact to our IT Systems and our business.
As a result, we and our third-party providers may be unable to timely or effectively anticipate, detect, investigate, remediate or recover from cyberattacks in the future or avoid material impact to our IT Systems, Confidential Information, and our business.
Our business is also subject to break-ins, sabotage, and intentional acts of vandalism by third parties as well as employees. We cannot guarantee the security or protection of any IT Systems.
Our business is also subject to break-ins, sabotage, and intentional acts of vandalism by third parties as well as employees. We cannot guarantee the security or protection of any IT Systems or Confidential Information.
In addition to the right of the U.S. government to terminate its contracts with us, U.S. government contracts are conditioned upon the continuing approval by the U.S. Congress of the necessary spending to honor such contracts. Congress often appropriates funds for a program on a fiscal year basis even though contract performance may take more than one year.
In addition to the right of the government to terminate its contracts with us, these government contracts are conditioned upon the continuing approval by the applicable legislature of the necessary spending to honor such contracts. The U.S. Congress often appropriates funds for a program on a fiscal year basis even though contract performance may take more than one year.
There can also be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, or the processes of third-party vendors we rely on, will be fully implemented, complied with or effective in protecting our IT Systems and data.
There can also be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, or the processes of third-party vendors we rely on, will be fully implemented, complied with or effective in protecting our IT Systems and Confidential Information.
This requires us to operate in a complex environment where there are significant constraints on how we can process personal data across our business. The scope of these laws are changing, subject to differing interpretations, and may be inconsistent among jurisdictions.
These laws require us to operate in a complex environment where there are significant constraints on how we can process Personal Data across our business. The scope of these laws are changing, subject to differing interpretations, and may be inconsistent among jurisdictions.
With respect to our Wind business, other companies that serve the wind turbine components industry include ABB and Hopewind. We also face indirect competition in the wind energy market from global manufacturers of wind turbines, such as Siemens Gamesa, General Electric, Vestas and Suzlon.
With respect to our Wind business, other companies that serve the wind turbine components industry include ABB and Hopewind. We also face indirect competition in the wind energy market from global manufacturers of wind turbines, such as Siemens Gamesa, Vestas, Envision and Suzlon.
Consequently, at the beginning of many major governmental programs, contracts often may not be fully funded, and additional monies are then committed to the contract only if, as and when appropriations are made by the U.S. Congress for future fiscal years. In addition, government shutdowns could prevent or delay such contracts from being funded. Failure by the U.S.
Consequently, at the beginning of many major governmental programs, contracts often may not be fully funded, and additional monies are then committed to the contract only if, as and when appropriations are made by the U.S. Congress or other applicable body for future fiscal years. In addition, government shutdowns could prevent or delay such contracts from being funded.
Achieving the benefits of any acquisition involves additional risks, including: • difficulty assimilating acquired operations, technologies and personnel; • inability to retain management and other key personnel of the acquired business; • changes in management or other key personnel that may harm relationships with the acquired business’s customers and employees; • unforeseen liabilities of the acquired business; • diversion of management’s and employees’ attention from other business matters as a result of the integration process; • mistaken assumptions about volumes, revenues and costs associated with the acquired business, including synergies; • limitations on rights to indemnity from the seller; • mistaken assumptions about the overall costs of equity or debt used to finance the acquisition; and • unforeseen difficulties operating in new product areas, with new customers, or in new geographic areas.
Achieving the benefits of any acquisition involves additional risks, including: • difficulty integrating acquired operations, technologies and personnel; • inability to retain management and other key personnel of the acquired business; • changes in management or other key personnel that may harm relationships with the acquired business’s customers and employees; • unforeseen liabilities of the acquired business; • diversion of management’s and employees’ attention from other business matters as a result of the integration process; 25 • mistaken assumptions about volumes, revenues and costs associated with the acquired business, including synergies; • limitations on indemnification from the seller; • mistaken assumptions about the overall costs of equity or debt used to finance the acquisition; and • unforeseen difficulties operating in new product areas, with new customers, or in new geographic areas.
Our IT Systems, and those of the third-party vendors we rely on, are vulnerable to disruption, compromise and damage from computer viruses (including malware and ransomware), bugs, misconfigurations or vulnerabilities, social engineering/phishing, natural disasters, human or technical error, intentional conduct, cyberattacks, unauthorized access and other similar disruptions.
Our IT Systems, and those of the third-party vendors we rely on, as well as our Confidential Information, are vulnerable to disruption, compromise and damage from computer viruses (including malware and ransomware), bugs, misconfigurations or vulnerabilities, social engineering/phishing, natural disasters, human or technical error, intentional conduct, cyberattacks, unauthorized access and other similar disruptions.
As a company that contracts with the U.S. government, we are subject to financial audits and other reviews by the U.S. government of our costs and performance, accounting, and general business practices relating to these contracts. Based on the results of these audits, the U.S. government may adjust our contract-related costs and fees.
As a company that contracts with the U.S. and Canadian governments, we are subject to financial audits and other reviews by such governments of our costs and performance, accounting, and general business practices relating to these contracts. Based on the results of these audits, such governments may adjust our contract-related costs and fees.
For example, 37% of our revenues in fiscal 2023 and 45% of our revenues in fiscal 2022 were recognized from sales outside the United States. We also manufacture certain of our products and purchase a portion of our raw materials and components from suppliers in other foreign countries.
For example, 31% of our revenues in fiscal 2024 and 37% of our revenues in fiscal 2023 were recognized from sales outside the United States. We also manufacture certain of our products and purchase a portion of our raw materials and components from suppliers in other foreign countries.
We have become increasingly subject to the risks arising from adverse changes in domestic and global economic conditions, including as a result of political instability in the United States. In recent years, financial markets have been volatile and the state of both the domestic and global economies has been uncertain.
We have become increasingly subject to the risks arising from adverse changes in domestic and global economic conditions, including as a result of governmental policies and actions in the United States. In recent years, financial markets have been volatile and the state of both the domestic and global economies has been uncertain.
Any failure or perceived failure by us to comply with our privacy, data protection and data security obligations may result in substantial fines, regulatory investigations or enforcement, reputational damage, orders to cease/change our use of data, enforcement notices, as well as potential civil claims, including class action type litigation, and could result in significant liability (including monetary penalties or requirements to alter our operations), and otherwise materially and adversely affect our reputation and business.
Any failure or perceived failure by us to comply with our privacy, data protection and data security obligations may result in substantial fines, regulatory investigations or enforcement, reputational damage, orders to cease/change our use of data, as well as potential civil claims, including class action litigation, and could result in significant liability (including monetary penalties or requirements to alter our operations), any of which could materially and adversely affect our business, results of operations, and financial condition.
Our international operations are subject to a variety of risks that we do not face in the United States, including: • potentially longer payment cycles for sales in foreign countries and difficulties in collecting accounts receivable; • difficulties in staffing and managing our foreign offices and the increased travel, infrastructure and legal compliance costs associated with multiple international locations; • additional withholding taxes or other taxes on our foreign income and repatriated cash, and tariffs or other restrictions on foreign trade or investment, including export duties and quotas, trade and employment restrictions; • imposition of, or unexpected adverse changes in, foreign laws or regulatory requirements; • increased exposure to foreign currency exchange rate risk; • reduced protection for intellectual property rights in some countries; and • natural disasters, pandemics, political unrest, war or acts of terrorism.
Our international operations are subject to a variety of risks that we do not face in the United States, including: • potentially longer payment cycles for sales in foreign countries and difficulties in collecting accounts receivable; • difficulties in staffing and managing our foreign offices and the increased travel, infrastructure and legal compliance costs associated with multiple international locations; • additional withholding taxes or other taxes on our foreign income and repatriated cash, and tariffs or other restrictions on foreign trade or investment, including export duties and quotas, trade and employment restrictions; • imposition of, or unexpected adverse changes in, foreign laws or regulatory requirements; • increased exposure to foreign currency exchange rate risk; • reduced protection for intellectual property rights in some countries; and • natural disasters, pandemics, political unrest, war or acts of terrorism. 28 Trade tensions between the U.S. and China, the U.S. and Russia, as well as those between the U.S. and Canada, Mexico and other countries have been escalating in recent years.
If these business collaborators fail to deliver their products or perform their obligations on a timely basis or fail to generate sufficient demand for the systems they manufacture, our revenue from the project may be delayed or decreased, and we may not be successful in selling our products. 15 If we fail to implement our business strategy successfully, our financial performance could be harmed.
If these business collaborators fail to deliver their products or perform their obligations on a timely basis or fail to generate sufficient demand for the systems they manufacture, our revenue from the project may be delayed or decreased, and we may not be successful in selling our products.
Even if a commercial market for our REG systems were to develop, commercial terms requested by utilities and power grid operators relating to bonding requirements, limitations of liability, warranty periods, or other contractual provisions, may not be acceptable to us, which could impede our ability to enter into contractual arrangements for the sale of our REG system. 17 Industry consolidation could result in more powerful competitors and fewer customers.
Even if a commercial market for our REG systems were to develop, commercial terms requested by utilities and power grid operators relating to bonding requirements, limitations of liability, warranty periods, or other contractual provisions, may not be acceptable to us, which could impede our ability to enter into contractual arrangements for the sale of our REG system.
The continued funding of such contracts remains subject to annual congressional appropriation, which, if not approved, could reduce our revenue and lower or eliminate our profit.
The continued funding of such contracts may remain subject to annual legislative appropriation, which, if not approved, could reduce our revenue and lower or eliminate our profit.
We also purchase large amounts of commodity-based raw materials. Prevailing prices for such commodities are subject to fluctuations due to changes in supply and demand and a variety of additional factors beyond our control, such as global political and economic conditions. Any of these events would likely harm our business, results of operations and financial condition.
Prevailing prices for such commodities are subject to fluctuations due to changes in supply and demand, tariffs, and a variety of additional factors beyond our control, such as global political and economic conditions. Any of these events would likely harm our business, results of operations and financial condition.
Maintaining effective internal control over financial reporting is necessary for us to produce reliable financial statements. If material weaknesses or significant deficiencies in our internal control over financial reporting are discovered or occur in the future, our consolidated financial statements may contain material misstatements and we could be required to restate our financial results.
If material weaknesses or significant deficiencies in our internal control over financial reporting are discovered or occur in the future, our consolidated financial statements may contain material misstatements and we could be required to restate our financial results.
For example, European General Data Protection Regulation, the California Consumer Privacy Act, Massachusetts Data Privacy Law and the data protection and security laws of other jurisdictions impose onerous obligations — including around transparency, data breach reporting, and international data transfers — with respect to our processing personal data of individuals.
For example, the European and United Kingdom General Data Protection Regulation, the California Consumer Privacy Act, and the data protection and security laws of other jurisdictions impose onerous obligations — including around transparency, data subject rights, contractual requirements, data breach reporting, and international data transfers — with respect to our processing Personal Data.
If we experience problems with obtaining registrations, compliance with foreign country or applicable U.S. laws, or if we experience difficulties in payments or intellectual property matters in foreign jurisdictions, or if significant political, economic or regulatory changes occur, our results of operations would be adversely affected.
If we experience problems with obtaining registrations, compliance with foreign country or applicable U.S. laws, or if we experience difficulties in payments or intellectual property matters in foreign jurisdictions, or if significant political, economic or regulatory changes occur, our results of operations would be adversely affected. Industry consolidation could result in more powerful competitors and fewer customers.
We are also subject to certain contractual obligations related to privacy, data protection and data security.
We are also subject to certain contractual obligations related to privacy, data protection and data security that may also impose onerous obligations.
Such sanctions and other measures, as well as the existing and potential further responses from countries subject to such sanctions, tensions and military actions, could adversely affect the global economy and financial markets and could adversely affect our business, financial condition and results of operations.
Increased tariffs, sanctions, and other trade restrictions, as well as the existing and potential further responses from countries subject to such tariffs, sanctions, and other trade restrictions, could adversely affect the global economy and financial markets and could adversely affect our business, financial condition and results of operations.
Congress to further suspend or increase the debt ceiling could delay or result in the loss of contracts for the procurement of our products and services, and we may be asked or required to continue to perform for some period of time on certain of our U.S. government contracts, even if the U.S. government is unable to make timely payments. 13 We cannot be certain that our U.S. government contracts, or our contracts with third parties that relate to projects for the U.S. government will not be terminated or suspended in the future.
Congress to further suspend or increase the debt ceiling could delay or result in the loss of contracts for the procurement of our products and services, and we may be asked or required to continue to perform for some period of time on certain of our U.S. government contracts, even if the U.S. government is unable to make timely payments.
In addition, we may need to attempt to license the intellectual property right from such third party or spend time and money to design around or avoid the intellectual property. Any such license may not be available on reasonable terms, or at all. An adverse determination may subject us to significant liabilities and/or disrupt our business.
In addition, we may need to attempt to license the intellectual property right from such third party or spend time and money to design around or avoid the intellectual property. Any such license may not be available on reasonable terms, or at all.
In prior years, the U.S. government has been unable to timely complete its budget process before the end of its fiscal year, resulting in governmental shut-downs or providing only enough funds for U.S. government agencies to continue operating at prior-year levels.
In recent years, U.S. government appropriations have been affected by larger U.S. government budgetary issues and related legislation. In prior years, the U.S. government has been unable to timely complete its budget process before the end of its fiscal year, resulting in governmental shut-downs or providing only enough funds for U.S. government agencies to continue operating at prior-year levels.
We plan to continue to closely monitor our expenses and, if required, will further reduce operating costs and capital spending to enhance liquidity. Our liquidity is highly dependent on our ability to profitably grow our revenues, control our operating costs, and secure additional financing, if required.
In prior years, we have experienced net losses and negative operating cash flows. We plan to continue to closely monitor our expenses and, if required, will further reduce operating costs and capital spending to enhance liquidity. Our liquidity is highly dependent on our ability to profitably grow our revenues, control our operating costs, and secure additional financing, if required.
We cannot predict whether the United States or any other country will impose new quotas, tariffs, taxes or other trade barriers upon the importation or exportation of our products or gauge the effect that new barriers would have on our financial position or results of operations.
We cannot predict with certainty the effect that new quotas, tariffs, taxes or other trade barriers upon the importation or exportation of our products or gauge the effect that new barriers would have on our financial position or results of operations.
Threat actors, such as ransomware groups, are becoming increasingly sophisticated in using techniques and tools including artificial intelligence that are designed to circumvent controls, evade detection and remove or obfuscate forensic evidence.
Cyberattacks are expected to accelerate on a global basis in frequency and magnitude, particularly as threat actors, such as ransomware groups, are becoming increasingly sophisticated in using techniques and tools including artificial intelligence that are designed to circumvent controls, evade detection and remove or obfuscate forensic evidence.
We have a history of negative operating cash flows, and we may require additional financing in the future, which may not be available to us.
While we generated positive operating cash flow in fiscal 2024 and the prior year, we have a history of negative operating cash flows, and we may require additional financing in the future, which may not be available to us.
Any reductions in, or eliminations of, government subsidies, economic incentives or favorable legislative programs before the wind energy industry reaches a sufficient scale to be cost-effective in a non-subsidized marketplace could reduce demand for our products and adversely affect our business prospects and results of operations.
Any reductions in, or eliminations of, government subsidies, economic incentives or favorable legislative programs before the wind energy industry reaches a sufficient scale to be cost-effective in a non-subsidized marketplace could reduce demand for our products and adversely affect our business prospects and results of operations. 31 Lower prices for other energy sources may reduce the demand for wind energy development, which could have a material adverse effect on our ability to grow our Wind business.
Significant changes in U.S. government defense spending or changes in U.S. government priorities, policies and requirements could have a material adverse effect on our results of operations, financial condition and liquidity. Pandemics, epidemics, or other public health crises may adversely impact our business, financial condition and results of operations .
Significant changes in U.S. government defense spending or changes in U.S. government priorities, policies and requirements could have a material adverse effect on our results of operations, financial condition and liquidity.
We may not be able to enter into marketing or distribution arrangements with third parties on financially acceptable terms, or at all, and third parties may not be successful in selling our products or applications incorporating our products.
We may not be able to enter into marketing or distribution arrangements with third parties on financially acceptable terms, or at all, and third parties may not be successful in selling our products or applications incorporating our products. Many of our revenue opportunities are dependent upon subcontractors and other business collaborators.
Any or all of the foregoing could materially adversely affect our business, operating results, and financial condition. We may acquire additional complementary businesses or technologies, which may require us to incur substantial costs for which we may never realize the anticipated benefits. Our recent acquisitions have required substantial integration and management efforts.
Losing the services of any of our executive officers or key employees could materially and adversely impact our business. We may acquire additional complementary businesses or technologies, which may require us to incur substantial costs for which we may never realize the anticipated benefits. Our recent acquisitions have required substantial integration and management efforts.
Our programs are subject to U.S. government policies, budget decisions and appropriation processes which are driven by numerous factors including: (1) geopolitical events; (2) macroeconomic conditions; and (3) the ability of the U.S. government to enact relevant legislation, such as appropriations bills. In recent years, U.S. government appropriations have been affected by larger U.S. government budgetary issues and related legislation.
Our programs are subject to U.S. government policies, budget decisions and appropriation processes which are driven by numerous factors including: (1) geopolitical events; (2) macroeconomic conditions; (3) the ability of the U.S. government to enact relevant legislation, such as appropriations bills; and (4) the spending priorities of the U.S. Presidential Administration.
Our actual results may not always be in line with or exceed the guidance we have provided. If our revenue or operating results fall below the expectations of investors or any securities analysts that follow our company in any period or we do not meet our guidance, the trading price of our common stock would likely decline.
If our revenue or operating results fall below the expectations of investors or any securities analysts that follow our company in any period or we do not meet our guidance, the trading price of our common stock would likely decline. 19 Our operating expenses do not always vary directly with revenue and may be difficult to adjust in the short term.
Sustained higher prices continued throughout fiscal 2023, although we believe inflationary pressures were more stable. These events have resulted or could in the future result in higher product costs, reductions in sales of our products, longer sales cycles, slower adoption of new technologies, increased accounts receivable and inventory write-offs and increased price competition.
These events have resulted or could in the future result in higher product costs, reductions in sales of our products, longer sales cycles, slower adoption of new technologies, increased accounts receivable and inventory write-offs and increased price competition.
Our business and operations would be adversely impacted in the event of a failure or security breach of our or any critical third parties' information technology infrastructure and networks.
Our business and operations may be materially adversely impacted in the event of a failure or security breach of our or any critical third parties' IT Systems or Confidential Information.
Many of our customers outside of the United States may be either directly or indirectly related to governmental entities, and we could be adversely affected by violations of the United States Foreign Corrupt Practices Act and similar worldwide anti-bribery laws outside the United States. The U.S.
Furthermore, widespread product failures may damage our market reputation and reduce our market share and cause sales to decline. 26 Many of our customers outside of the United States may be either directly or indirectly related to governmental entities, and we could be adversely affected by violations of the United States Foreign Corrupt Practices Act and similar worldwide anti-bribery laws outside the United States.
Foreign Corrupt Practices Act and similar worldwide anti-bribery laws in non-U.S. jurisdictions generally prohibit companies and their intermediaries from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business. Many of our customers outside of the United States are, either directly or indirectly, related to governmental entities and are therefore subject to such anti-bribery laws.
The U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws in non-U.S. jurisdictions generally prohibit companies and their intermediaries from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business.
At March 31, 2024, we had approximately $92.3 million of cash, cash equivalents and restricted cash, and during the fiscal year ended March 31, 2024, $2.1 m illion in cash was provided by our operating activities. We have historically experienced net losses and negative operating cash flows.
At March 31, 2025, we had approximately $85.4 million of cash, cash equivalents and restricted cash, and during the fiscal year ended March 31, 2025, $28.3 m illion in cash was provided by our operating activities. In the current period, we experienced net income and positive operating cash flows.
These include Southern States, Controllix PowerSide, Elgin Power Solutions (formally Gilbert), Scott Engineering and QVARx. We face competition from other companies offering DC power supply systems similar to our Neeltran products. These include SCR Controlled Rectifiers, IGBT-controlled choppers produced by ABB, Siemens, Friem, Dynapower, and Nidec offering systems around the world.
These include SCR Controlled Rectifiers, IGBT-controlled choppers produced by ABB, Siemens, Friem, Dynapower, and Nidec offering systems around the world. We face competition from other companies offering transformers and power supplies similar to our NWL products.
We believe we are currently the only company that can offer HTS-based SPS products that have been fully qualified for use aboard U.S. Navy surface combatants. Therefore, the primary competition for our SPS products is currently coming from defense contractors that provide the copper-based systems that our lighter, more efficient HTS versions have been developed to replace.
Therefore, the primary competition for our SPS products is currently coming from defense contractors that provide the copper-based systems that our lighter, more efficient HTS versions have been developed to replace.
Our policies mandate compliance with these anti-bribery laws. We operate in many parts of the world that have experienced governmental corruption to some degree, and in certain circumstances strict compliance with anti-bribery laws may conflict with local customs and practices.
We operate in many parts of the world that have experienced governmental corruption to some degree, and in certain circumstances strict compliance with anti-bribery laws may conflict with local customs and practices. Our internal control policies and procedures may not always protect us from reckless or criminal acts committed by our employees or agents.
Item 1A. RISK FACTORS Risks Related to Our Financial Performance We have a history of operating losses, which may continue in the future. Our operating results may fluctuate significantly from quarter to quarter and may fall below expectations in any particular fiscal quarter.
Item 1A. RISK FACTORS Risks Related to Our Financial Performance We have not been historically profitable, which may recur in the future. Our operating results may fluctuate significantly from quarter to quarter and may fall below expectations in any particular fiscal quarter. We were profitable in fiscal 2024, however, we have recorded net losses for the prior three fiscal years.
Further, any significant change to applicable laws, regulations or industry practices regarding privacy, data protection, and data security could increase our costs and require us to modify our operations, possibly in a material manner. Many of our revenue opportunities are dependent upon subcontractors and other business collaborators.
Further, any significant change to applicable laws, regulations or industry practices regarding privacy, data protection, and data security could increase our costs and require us to modify our operations, possibly in a material manner. Our success is dependent upon attracting and retaining qualified personnel and our inability to do so could significantly damage our business and prospects.
In addition, if credit is difficult to obtain in the future, some customers may delay or reduce purchases. Similarly, inflationary pressures have increased and may increase our costs or force us to increase prices for our products. In particular, in fiscal 2022, we experienced substantial inflationary pressure in our supply chain.
Adverse credit conditions in the future could have a negative impact on our ability to execute on future strategic activities. In addition, if credit is difficult to obtain in the future, some customers may delay or reduce purchases. Similarly, inflationary pressures have increased and may increase our costs or force us to increase prices for our products.
The U.S. government’s termination of, or failure to fully fund, one or more of our contracts would have a negative impact on our operating results and financial condition.
We cannot be certain that our U.S. government contracts, or our contracts with third parties that relate to projects for the U.S. government will not be terminated or suspended in the future. The U.S. government’s termination of, or failure to fully fund, one or more of our contracts would have a negative impact on our operating results and financial condition.
Measures to contain a public health crisis may intensify other risks described in these Risk Factors. We rely upon third-party suppliers for the components and subassemblies of many of our Grid and Wind products, making us vulnerable to supply shortages and price fluctuations, which could harm our business.
We rely upon third-party suppliers for the components and subassemblies of many of our Grid and Wind products, making us vulnerable to supply shortages and price fluctuations, which could harm our business. Many of our components and subassemblies are currently manufactured for us by a limited number of qualified suppliers.
Alternatively, if we do not adjust the prices for our products in response to unfavorable currency fluctuations, our results of operations could be adversely affected.
Unfavorable currency fluctuations could require us to increase prices to foreign customers, which could result in a lesser value of orders, and therefore lower revenues, from such customers. Alternatively, if we do not adjust the prices for our products in response to unfavorable currency fluctuations, our results of operations could be adversely affected.
Further, should our working capital situation deteriorate, we would not be able to access the restricted cash to meet working capital requirements. 12 If we fail to maintain proper and effective internal control over financial reporting, our ability to produce accurate and timely financial statements could be impaired and may lead investors and other users to lose confidence in our financial data .
If we fail to maintain proper and effective internal control over financial reporting, our ability to produce accurate and timely financial statements could be impaired and may lead investors and other users to lose confidence in our financial data . Maintaining effective internal control over financial reporting is necessary for us to produce reliable financial statements.
Our relationships with our customers and suppliers are predicated on the belief that we will continue to operate. Our customers, particularly in the utility industry, are generally risk averse and may not enter into sales contracts with us if there is uncertainty regarding our ability to support working capital needs of large-scale projects.
Our customers, particularly in the utility industry, are generally risk averse and may not enter into sales contracts with us if there is uncertainty regarding our ability to support working capital needs of large-scale projects. 27 Pandemics, epidemics, or other public health crises may adversely impact our business, financial condition and results of operations .
Similarly, in many other instances, we have been required to deposit cash in escrow accounts as collateral for these instruments, which is unavailable to us for general use for significant periods of time. Should we be unable to obtain performance bonds or letters of credit in the future, significant future potential revenue could become unavailable to us.
In recent years, we have entered into contracts that require us to post bonds and to deliver letters of credit of significant magnitude. Similarly, in many other instances, we have been required to deposit cash in escrow accounts as collateral for these instruments, which is unavailable to us for general use for significant periods of time.
Changes in exchange rates could adversely affect our results of operations. Currency exchange rate fluctuations could have an adverse effect on our revenues and results of operations, and we could experience losses with respect to hedging activities. In fiscal 2023, 37% of our revenues were recognized from sales outside of the United States.
An adverse determination may subject us to significant liabilities and/or disrupt our business. 20 Changes in exchange rates could adversely affect our results of operations. Currency exchange rate fluctuations could have an adverse effect on our revenues and results of operations, and we could experience losses with respect to hedging activities.
Our internal control policies and procedures may not always protect us from reckless or criminal acts committed by our employees or agents. Violations of these laws, or allegations of such violations, could disrupt our business and result in a material adverse effect on our business, results of operations and financial condition.
Violations of these laws, or allegations of such violations, could disrupt our business and result in a material adverse effect on our business, results of operations and financial condition.
These include adaptive VAR compensators, Dynamic voltage restorers (“DVRs”), and STATCOMs produced by ABB, Hitachi, Siemens, Mitsubishi, and Ingeteam, and battery-based uninterruptable power supply (“UPS”) systems offered by various companies around the world. We face competition from other companies offering medium-voltage metal-enclosed power capacitor banks and harmonic filter banks for use on electric power systems similar to our NEPSI products.
These include adaptive VAR compensators, Dynamic voltage restorers (“DVRs”), and STATCOMs produced by ABB, Hitachi, Ingeteam, Mitsubishi, RXHK, and Siemens, and battery-based uninterruptable power supply (“UPS”) systems offered by various companies around the world.
In order to minimize costs and time to market, we have and will continue to identify local suppliers that meet our quality standards to produce certain of our subassemblies and components. These efforts may not be successful including as quality standards evolve.
Moreover, if the costs of acquiring components and subassemblies from these suppliers significantly increase, we may not be able to identify alternative suppliers, which could adversely impact our business and operating results. 22 In order to minimize costs and time to market, we have and will continue to identify local suppliers that meet our quality standards to produce certain of our subassemblies and components.
There has been increasing public focus by investors, customers, environmental activists, the media and governmental and nongovernmental organizations on a variety of environmental, social and other sustainability matters. If we are not effective in addressing environmental, social and other sustainability matters affecting our business, including any relevant sustainability goals, our reputation and financial results may suffer.
If we are not effective in addressing environmental, social and other sustainability matters affecting our business, including any relevant sustainability goals, our reputation and financial results may suffer.
We may be unable to meet such technological challenges or to sufficiently improve the performance and reduce the costs of our Amperium wire.
We may be unable to meet such technological challenges or to sufficiently improve the performance and reduce the costs of our Amperium wire. Delays in development, as a result of technological challenges or other factors, may result in the introduction or commercial acceptance of our superconductor products later than anticipated.
For more information, please refer to our risk factor titled “The increasing focus on environmental sustainability and social initiatives could increase our costs, and inaction could harm our reputation and adversely impact our financial results." 16 Risks Related to Our Markets Adverse changes in domestic and global economic conditions could adversely affect our operating results.
For more information, please refer to our risk factor titled “The increasing focus on environmental sustainability and social initiatives could increase our costs, and inaction could harm our reputation and adversely impact our financial results." Uncertainty surrounding our prospects and financial condition may have an adverse effect on our customer and supplier relationships.
All of our U.S. government contracts, as well as certain of our contracts with third parties that are dependent on U.S. government contracts, can be terminated by the U.S. government for its convenience. Termination-for-convenience provisions typically provide only for our recovery of costs incurred or committed, and for settlement of expenses and profit on work completed prior to termination.
All of our U.S. and Canadian government contracts, as well as certain of our contracts with third parties that are dependent on such government contracts, can be terminated by the applicable government for its convenience.
Moreover, we may not be able to successfully complete such initiatives due to factors that are within or outside of our control.
Moreover, we may not be able to successfully complete such initiatives due to factors that are within or outside of our control. Even if this is not the case, we cannot guarantee that our approaches or results will align with the expectations of any particular stakeholder.
For example, various policymakers have adopted, or are considering adopting, requirements for the disclosure of climate- or other ESG-related information, which may require significant additional costs to comply. If we fail to comply with new laws, regulations, or reporting requirements, our reputation and business could be adversely impacted.
For example, various policymakers have adopted, or are considering adopting, requirements for the disclosure of climate- or other ESG-related information, or certain substantive considerations regarding ESG in operations, which may require significant additional costs to comply.
If the patents that we own or license or our trade secrets and proprietary know-how fail to protect our technologies, our market position may be adversely affected.
If the patents that we own or license or our trade secrets and proprietary know-how fail to protect our technologies, our market position may be adversely affected. 32 Third parties have or may acquire patents that cover the materials, processes and technologies we use or may use in the future to manufacture our Amperium products, and our success depends on our ability to license such patents or other proprietary rights.
We cannot provide any assurance that we will realize any of the anticipated benefits of any acquisition, including our NEPSI acquisition completed in October 2020, and Neeltran, Inc. acquisition completed in May 2021, and if we fail to realize these anticipated benefits, our operating performance could suffer.
We cannot provide any assurance that we will realize any of the anticipated benefits of any acquisition, including our acquisition of Megatran Industries, Inc. including its subsidiaries, completed in August 2024, and if we fail to realize these anticipated benefits, our operating performance could suffer. A significant portion of our Wind segment revenues are derived from a single customer.
We were not profitable in fiscal 2023 and have recorded net losses for the last three fiscal years. We may not be profitable in fiscal 2024 or future years. There remains substantial uncertainty in our business, which makes it difficult to evaluate our business and future prospects.
We may not be profitable in fiscal 2025 or future years. While we achieved profitable results in fiscal 2024, we cannot be certain that we will sustain profitability in future years. There remains uncertainty in our business, which makes it difficult to evaluate our business and future prospects.
We may be required to issue performance bonds or provide letters of credit, which restricts our ability to access any cash used as collateral for the bonds or letters of credit.
Significant deficiencies or material weaknesses in our internal control over financial reporting could also reduce our ability to obtain financing or could increase the cost of any financing we obtain. We may be required to issue performance bonds, which restricts our ability to access any cash used as collateral for the bonds.
Lower prices for other energy sources may reduce the demand for wind energy development, which could have a material adverse effect on our ability to grow our Wind business. The wind energy market is affected by the price and availability of other energy sources, including nuclear, coal, natural gas and oil, as well as other sources of renewable energy.
The wind energy market is affected by the price and availability of other energy sources, including nuclear, coal, natural gas and oil, as well as other sources of renewable energy.
Failure to comply with evolving data privacy and data protection laws and regulations or to otherwise protect personal data, may adversely impact our business and financial results. We are subject to many rapidly evolving privacy and data protection laws and regulations in the United States, Europe and around the world.
Any or all of the foregoing could materially adversely affect our business, operating results, and financial condition. 24 Failure to comply with evolving data privacy and data protection laws and regulations or to otherwise protect personal data, may adversely impact our business and financial results.
Our success is dependent upon attracting and retaining qualified personnel and our inability to do so could significantly damage our business and prospects. We have attracted a highly skilled management team and specialized workforce, including scientists, engineers, researchers, manufacturing, personnel, and marketing and sales professionals.
We have attracted a highly skilled management team and specialized workforce, including scientists, engineers, researchers, manufacturing, personnel, and marketing and sales professionals. Hiring and retaining good personnel for our business is challenging, and highly qualified technical personnel are likely to remain a limited resource for the foreseeable future.
Our success could depend upon the commercial adoption of the REG system, which is currently limited, and a widespread commercial market for our REG products may not develop. To date, there has been no widespread commercial use of the REG system. It is uncertain whether a robust commercial market for those new and unproven products will ever develop.
To date, there has been no widespread commercial use of the REG system. It is uncertain whether a robust commercial market for those new and unproven products will ever develop. In addition, we believe in-grid demonstrations of REG systems are necessary to convince utilities and power grid operators of the benefits of this technology.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. PROPERTIES Our corporate headquarters and Grid manufacturing operations are located in a leased 88,000-square-foot facility in Ayer, Massachusetts. Additionally, we have Grid manufacturing operations located in a leased 77,500 square-foot facility in Westminster, Massachusetts as well as an owned 35,000 square-foot facility in Queensbury, New York and an owned 85,000 square-foot facility in New Milford, Connecticut.
Biggest changeAdditionally, we have Grid manufacturing operations located in a leased 77,500 square-foot facility in Westminster, Massachusetts, and a 43,000 square-foot facility in Silesian, Poland, as well as an owned 35,000 square-foot facility in Queensbury, New York, an owned 126,800 square-foot facility in Bordentown, New Jersey, an owned 85,000 square-foot facility in New Milford, Connecticut, and an owned 19,350 square-foot facility in Roebling, New Jersey.
These locations focus primarily on research and development, sales and/or field service and do not have significant leases or physical presence. We believe all of these facilities are well-maintained and suitable for their intended uses.
These locations focus primarily on research and development, sales and/or field service and do not have significant leases or physical presence.
The following table summarizes information regarding our significant properties, as of March 31, 2024: Location Supporting Square footage Owned/Leased United States Ayer, Massachusetts Corporate & Grid Segment 88,000 Leased New Milford, Connecticut Grid Segment 85,000 Owned Queensbury, New York Grid Segment 35,000 Owned Westminster, Massachusetts Grid Segment 77,500 Leased
We believe all of these facilities are well-maintained and suitable for their intended uses. 35 The following table summarizes information regarding our significant properties, as of March 31, 2025: Location Supporting Square footage Owned/Leased United States Ayer, Massachusetts Corporate & Grid Segment 88,000 Leased Bordentown, New Jersey Grid Segment 126,800 Owned New Milford, Connecticut Grid Segment 85,000 Owned Queensbury, New York Grid Segment 35,000 Owned Roebling, New Jersey Grid Segment 19,350 Owned Westminster, Massachusetts Grid Segment 77,500 Leased Poland Bielsko-Biala, Silesian Grid Segment 43,000 Leased
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Item 2. PROPERTIES Our corporate headquarters and Grid manufacturing operations are located in a leased 88,000-square-foot facility in Ayer, Massachusetts.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeCOMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among American Superconductor Corporation, the Nasdaq Composite Index and the Nasdaq Electrical Components & Equipment Index Fiscal year ended March 31, Company/Index 2019 2020 2021 2022 2023 2024 American Superconductor Corporation 100.00 42.61 147.43 59.18 38.18 105.05 Nasdaq Composite Index 100.00 100.70 174.60 188.67 163.62 221.02 Nasdaq Electrical Components & Equipment Index 100.00 82.93 154.08 153.37 160.21 189.37
Biggest changeCOMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among American Superconductor Corporation, the Nasdaq Composite Index and the Nasdaq Electrical Components & Equipment Index Fiscal year ended March 31, Company/Index 2020 2021 2022 2023 2024 2025 American Superconductor Corporation 100.00 351.82 162.41 75.00 235.40 331.02 Nasdaq Composite Index 100.00 169.65 185.88 157.18 218.62 233.47 Nasdaq Electrical Components & Equipment Index 100.00 175.83 187.81 183.07 223.64 256.20
This graph assumes the investment of $100.00 on March 31, 2019 in our common stock, the Nasdaq Composite Index and the Nasdaq Electrical Components & Equipment Index, and assumes any dividends are reinvested. Measurement points are March 31, 2019; March 31, 2020; March 31, 2021; March 31, 2022; March 31, 2023; and March 31, 2024.
This graph assumes the investment of $100.00 on March 31, 2020 in our common stock, the Nasdaq Composite Index and the Nasdaq Electrical Components & Equipment Index, and assumes any dividends are reinvested. Measurement points are March 31, 2020; March 31, 2021; March 31, 2022; March 31, 2023; March 31, 2024; and March 31, 2025.
Payment of future cash dividends, if any, will be at the discretion of our board of directors after taking into account various factors, including our financial condition, operating results, current and anticipated cash needs and plans for expansion. 22 Stock Performance Graph The following graph compares the cumulative total stockholder return on our common stock from March 31, 2019 to March 31, 2024 with the cumulative total return of (i) the Nasdaq Composite Index and (ii) the Nasdaq Electrical Components & Equipment Index.
Payment of future cash dividends, if any, will be at the discretion of our board of directors after taking into account various factors, including our financial condition, operating results, current and anticipated cash needs and plans for expansion. 36 Stock Performance Graph The following graph compares the cumulative total stockholder return on our common stock from March 31, 2020 to March 31, 2025 with the cumulative total return of (i) the Nasdaq Composite Index and (ii) the Nasdaq Electrical Components & Equipment Index.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock has been listed on the Nasdaq Global Select Market under the symbol “AMSC” since 1991. Holders The number of holders of record of our common stock on May 24, 2024 was 168 .
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock has been listed on the Nasdaq Global Select Market under the symbol “AMSC” since 1991. Holders The number of holders of record of our common stock on May 16, 2025 was 179 .

Item 7. Management's Discussion & Analysis

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

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Biggest changeA reconciliation of GAAP to non-GAAP net income (loss) is set forth in the table below (in thousands, except per share data): Year ended March 31, 2024 2023 Net loss $ (11,111 ) $ (35,041 ) Stock-based compensation 4,652 4,729 Amortization of acquisition-related intangibles 2,158 2,784 Change in fair value of contingent consideration 4,922 70 China dissolution — 1,921 ERC tax benefit — (3,283 ) Non-GAAP net income (loss) 621 (28,820 ) Non-GAAP net income (loss) per share - basic $ 0.02 $ (1.03 ) Non-GAAP net income (loss) per share - diluted $ 0.02 $ (1.03 ) Weighted average shares outstanding - basic 29,825 27,848 Weighted average shares outstanding - diluted 30,909 27,848 We incurred non-GAAP net income of $0.6 million or $0.02 per s hare for fiscal 2023, compared to non-GAAP net loss of $28.8 million, or $1.03 per share, for fiscal 2022.
Biggest changeA reconciliation of GAAP net income (loss) to non-GAAP net income is set forth in the table below (in thousands, except per share data): Year ended March 31, 2025 2024 Net income (loss) $ 6,033 $ (11,111 ) Stock-based compensation 7,794 4,652 Amortization of acquisition-related intangibles 2,433 2,158 Change in fair value of contingent consideration 6,682 4,922 Acquisition costs 1,095 — Non-GAAP net income 24,037 621 Non-GAAP net income per share - basic $ 0.65 $ 0.02 Non-GAAP net income per share - diluted $ 0.64 $ 0.02 Weighted average shares outstanding - basic 36,990 29,825 Weighted average shares outstanding - diluted 37,718 30,909 Non-GAAP net income was $24.0 million, or $0.65 per s hare, for fiscal 2024, compared to $0.6 million, or $0.02 per share, for fiscal 2023.
We believe non-GAAP net income (loss) assists management and investors in comparing our performance across reporting periods on a consistent basis by excluding these non-cash charges and other items that we do not believe are indicative of our core operating performance. In addition, we use non-GAAP net income (loss) as a factor to evaluate the effectiveness of our business strategies.
We believe non-GAAP net income assists management and investors in comparing our performance across reporting periods on a consistent basis by excluding these non-cash charges and other items that we do not believe are indicative of our core operating performance. In addition, we use non-GAAP net income as a factor to evaluate the effectiveness of our business strategies.
Non-GAAP Financial Measure - Non-GAAP Net Income (Loss) Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flow that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States (“GAAP”).
Non-GAAP Financial Measure - Non-GAAP Net Income Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flow that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States (“GAAP”).
We do not believe that, outside of those disclosed here, there are any other recently issued accounting pronouncements that will have a material impact on our consolidated financial statem ents. 30 Critical Accounting Policies and Estimates The preparation of the consolidated financial statements requires that we make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.
We do not believe that, outside of those disclosed here, there are any other recently issued accounting pronouncements that will have a material impact on our consolidated financial statem ents. 44 Critical Accounting Policies and Estimates The preparation of the consolidated financial statements requires that we make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.
See Note 3, “Revenue Recognition,” for additional information. Business Acquisitions We account for acquisitions using the purchase method of accounting in accordance with Accounting Standards Codification ("ASC") 805, Business Combinations . The purchase price for each acquisition is allocated to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition.
See Note 4, “Revenue Recognition,” for additional information. Business Acquisitions We account for acquisitions using the purchase method of accounting in accordance with Accounting Standards Codification ("ASC") 805, Business Combinations . The purchase price for each acquisition is allocated to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition.
The future cash flows are discounted using an applicable discount rate. The key uncertainties in the calculations, as applicable, are the selection of an appropriate royalty rate, assumptions used in developing estimates of future cash flows, including revenue growth and expense forecasts, assumed customer attrition rates, as well as perceived risks associated with those forecasts in determining the discount rate.
The key uncertainties in the calculations, as applicable, are the selection of an appropriate royalty rate, assumptions used in developing estimates of future cash flows, including revenue growth and expense forecasts, assumed customer attrition rates, as well as perceived risks associated with those forecasts in determining the discount rate.
Item 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Executive Overview We are a leading system provider of megawatt-scale power resiliency solutions that orchestrate the rhythm and harmony of power on the grid™, and protect and expand the capability of our Navy's fleet.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Executive Overview We are a leading system provider of megawatt-scale power resiliency solutions that orchestrate the rhythm and harmony of power on the grid™, and protect and expand the capability of our Navy's fleet.
These technologies and our system-level solutions are protected by a robust intellectual property portfolio consisting of patents and patent applications worldwide and rights through exclusive and non-exclusive licenses. We operate our business under two market-facing business units: Grid and Wind.
These technologies and our system-level solutions are protected by a robust intellectual property portfolio consisting of patents and patent applications worldwide and rights through exclusive and non-exclusive licenses. We operate our business under two market-facing business segments: Grid and Wind.
Navy's effort to upgrade onboard power systems to support fleet electrification, and the need for increased renewable sources of electricity, such as wind and solar energy.
Navy's effort to upgrade onboard power systems to support fleet electrification, and the needs for increased renewable sources of electricity, such as wind and solar energy.
See Note 13, “Income Taxes,” of our consolidated financial statements for further information regarding our income tax assumptions and expenses.
See Note 14, “Income Taxes,” of our consolidated financial statements for further information regarding our income tax assumptions and expenses.
As of March 31, 2024, we are evaluating the impact on our consolidated financial statements. In March 2024, the FASB issued ASU 2024-02, Codification Improvements—Amendments to Remove References to the Concepts Statements . The amendments in ASU 2024-02 contain amendments to the Codification that remove references to various FASB Concepts Statements.
We are evaluating the impact on our consolidated financial statements. In March 2024, the FASB issued ASU 2024-02, Codification Improvements—Amendments to Remove References to the Concepts Statements . The amendments in ASU 2024-02 contain amendments to the Codification that remove references to various FASB Concepts Statements.
Amortization of acquisition related intangibles We recorded $2.2 million in fiscal 2023 and $2.7 million in fiscal 2022 in amortization expense related to our core technology and know-how, customer relationships, and other intangible assets.
Amortization of acquisition related intangibles We recorded $1.7 million in fiscal 2024 and $2.2 million in fiscal 2023 in amortization expense related to our core technology and know-how, customer relationships, and other intangible assets.
Additionally, the impact of global sources of instability, including the ongoing wars between Russia and Ukraine and Israel and Hamas, instability of financial institutions and political instability in the United States, on the global financial markets may reduce our ability to raise additional capital, if necessary, which could negatively impact our liquidity.
Additionally. the impact of global sources of instability, including tariffs, trade restrictions and resulting trade conflicts, the ongoing wars between Russia and Ukraine and Israel and Hamas, instability of financial institutions and political instability in the United States, on the global financial markets may reduce our ability to raise additional capital, if necessary, which could negatively impact our liquidity.
("NEPSI") product sales, Neeltran product sales, HTS wire sales, ship protection systems ("SPS"), government-sponsored electric utility projects and other prototype development contracts. We also engineer, install and commission our products on a turnkey-basis for some customers. The Grid business unit accounted for 84% of total revenues in fiscal 2023 and 89% in fiscal 2022.
("Neeltran") product sales, NWL product sales, HTS wire sales, ship protection systems ("SPS"), government-sponsored electric utility projects and other prototype development contracts. We also engineer, install and commission our products on a turnkey-basis for some customers. The Grid business segment accounted for 84% of total revenues in both fiscal 2024 and 2023.
For information regarding our other contractual obligations, refer to Note 12, "Contingent Consideration," Note 14, "Debt," Note 15, "Leases" and Note 17, "Commitments and Contingencies" to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. We believe we have sufficient available liquidity to fund our operations and capital expenditures for the next twelve months.
For information regarding our other contractual obligations, refer to Note 13, "Contingent Consideration," Note 16, "Leases", and Note 18, "Commitments and Contingencies" to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. 43 We believe we have sufficient available liquidity to fund our operations and capital expenditures for the next twelve months.
Revenues in our Wind business unit are derived from wind turbine electrical control systems and core components, wind turbine license and development contracts, service contracts and consulting arrangements. Our Wind business unit accounted for 16% of total revenues in fiscal 2023 and 11% in fiscal 2022.
Revenues in our Wind business segment are derived from wind turbine electrical control systems and core components, wind turbine license and development contracts, service contracts and consulting arrangements. Our Wind business segment accounted for 16% of total revenues in both fiscal 2024 and 2023.
The decrease in amortization expense is primarily a result of using the economic consumption method as the basis to amortize the acquired customer relationship intangible assets related to NEPSI and Neeltran.
The decrease in amortization expense is primarily a result of using the economic consumption method as the basis to amortize the acquired customer relationship intangible assets related to NEPSI and Neeltran, partially offset by the increase related to amortization of NWL related intangibles.
The increase in the Wind business unit operating income was due to higher revenue and gross margins in fiscal 2023, compared to fiscal 2022. Unallocated corporate expenses in fiscal 2023 consisted of a loss on contingent consideration of $4.9 million and stock-based compensation expense of $4.7 million.
The increase in the Wind business segment operating income was due to higher revenue and gross margins in fiscal 2024, compared to fiscal 2023. Unallocated corporate expenses consisted of a loss on contingent consideration of $6.7 million in fiscal 2024, and a loss on contingent consideration of $4.9 million in fiscal 2023 .
When we refer to a particular fiscal year, we are referring to the fiscal year that began on April 1 of that same year. For example, fiscal 2023 refers to the fiscal year that began on April 1, 2023.
When we refer to a particular fiscal year, we are referring to the fiscal year that began on April 1 of that same year. For example, fiscal 2024 refers to the fiscal year that began on April 1, 2024. Other fiscal years follow similarly.
Our cash, cash equivalents and restricted cash are summarized as follows (in thousands): March 31, 2024 March 31, 2023 Cash and cash equivalents $ 90,522 $ 23,360 Restricted cash 1,758 2,315 Total cash, cash equivalents and restricted cash $ 92,280 $ 25,675 Net cash provided by operating activities was $2.1 m illion compared to net cash used in operating activities of $22.5 million in fiscal 2023 and 2022, respectively.
Our cash, cash equivalents and restricted cash are summarized as follows (in thousands): March 31, 2025 March 31, 2024 Cash and cash equivalents $ 79,494 $ 90,522 Restricted cash 5,887 1,758 Total cash, cash equivalents and restricted cash $ 85,381 $ 92,280 42 Net cash provided by operating activities was $28.3 m illion compared to net cash used in operating activities of $2.1 million in fiscal 2024 and 2023, respectively.
Following the release of ASU 2024-02 in March 2024, the effective date will be annual reporting periods beginning after December 15, 2024. As of March 31, 2024, we are evaluating the impact on our consolidated financial statements .
Following the release of ASU 2024-02 in March 2024, the effective date will be annual reporting periods beginning after December 15, 2024. We are evaluating the impact on our consolidated financial statements . In November 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures .
Change in fair value of contingent consideration The change in fair value of our contingent consideration for the earnout payment on the NEPSI acquisition resulted in a loss of $4.9 million and $0.1 million in fiscal 2023 and 2022, respectively.
Change in fair value of contingent consideration The change in fair value of our contingent consideration for the earnout payment on the acquisition of NEPSI resulted in a loss of $3.4 million resulting from an increase in fair value in fiscal 2024, and $4.9 million during fiscal 2023.
The terms of any future offering under the Form S-3 will be established at the time of such offering and will be described in a prospectus supplement filed with the SEC prior to the completion of any such offering.
The terms of any future offering under the Second Form S-3 will be established at the time of such offering and will be described in a prospectus supplement filed with the SEC prior to the completion of any such offering. We are a party to many contractual obligations involving commitments to make payments to third parties.
We continue to closely monitor our expenses and, if required, expect to reduce our operating and capital spending to enhance liquidity. In January 2024, we filed a shelf registration statement on Form S-3 that will expire three years from the date on which it was declared effective, March 15, 2027 (the “Form S-3”).
In January 2024, we filed a shelf registration statement on Form S-3 that will expire three years from the date on which it was declared effective, March 15, 2027 (the “Form S-3”).
As of March 31, 2024, we are evaluating the impact on our consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures .
As of March 31, 2025, we have adopted ASU 2023-07 and made the required disclosures, and noted no other material impact on our consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures .
The decrease in the Grid business unit operating loss was due to higher revenues and gross margins, compared to fiscal 2022. The Wind segment generated operating income of $0.9 m illion in fiscal 2023 and an operating loss of $2.5 million in fiscal 2022.
The improvement in the Grid business segment was due to higher revenues and gross margins in fiscal 2024, compared to fiscal 2023. The Wind segment generated operating income of $3.8 m illion in fiscal 2024 and $0.4 million in fiscal 2023.
Our revenues are summarized as follows (in thousands): Fiscal Years Ended March 31, 2024 2023 Revenues: Grid $ 122,065 $ 94,631 Wind 23,574 11,353 Total $ 145,639 $ 105,984 Revenues in our Grid business unit are derived from our D-VAR product sales, Northeast Power Systems, Inc.
Our revenues are summarized as follows (in thousands): Fiscal Years Ended March 31, 2025 2024 Revenues: Grid $ 187,170 $ 122,065 Wind 35,648 23,574 Total $ 222,818 $ 145,639 Revenues in our Grid business segment are derived from our D-VAR product sales, Northeast Power Systems, Inc. ("NEPSI") product sales, Neeltran, Inc.
At March 31, 2023, we had $0.6 million of restricted cash included in long-term assets and $1.7 million of restricted cash in current assets. These amounts included in restricted cash primarily represent collateral deposits to secure surety bonds and letters of credit for various customer contracts. These deposits are held in interest bearing accounts.
These amounts included in restricted cash primarily represent collateral deposits to secure surety bonds and letters of credit for various customer contracts. These deposits are held in interest bearing accounts.
Please refer to the “Risk Factors” section in Part I, Item 1A, for a discussion of certain factors that may affect our future results of operations and financial condition.
The improvement in net income was driven primarily by higher revenues and gross margins in fiscal 2024 and other factors described above. Please refer to the “Risk Factors” section in Part I, Item 1A, for a discussion of certain factors that may affect our future results of operations and financial condition.
The excess purchase price over the estimated fair value of the net assets acquired is recorded as goodwill. Intangible assets, if identified, are also recorded. Determining the fair value of certain assets and liabilities assumed is judgmental in nature and often involves the use of significant estimates and assumptions as well as the use of specialists as needed.
The excess purchase price over the estimated fair value of the net assets acquired and liabilities assumed is recorded as goodwill. Intangible assets, if identified, are also recorded.
The increase in other expense was driven by the impacts of unfavorable fluctuations in foreign currencies in fiscal 2023. 27 Income Taxes We recorded an income tax expense of $0.3 million in fiscal 2023, compared to $0.2 million in fiscal 2022. The increase in income tax expense is a result of higher income tax in foreign jurisdictions.
The decrease in other expense was driven by the impacts of more favorable fluctuations in foreign currencies in fiscal 2024, compared to fiscal 2023. Income Taxes We recorded an income tax benefit of $3.7 million in fiscal 2024, compared to income tax expense of $0.3 million in fiscal 2023.
Changes in macroeconomic conditions arising from various reasons, such as the ongoing wars between Russia and Ukraine, and Israel and Hamas, inflation, rising interest rates, labor force availability, sourcing, material delays and global supply chain disruptions could have a material adverse effect on the Company's business, financial condition and results of operation.
Changes in macroeconomic conditions arising from various reasons, such as the ongoing wars between Russia and Ukraine, and Israel and Hamas, tariffs, trade restrictions and resulting trade conflicts, labor force availability, sourcing, material delays and global supply chain disruptions could have a material adverse effect on our business, financial condition and results of operation. 38 On August 1, 2024, we entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with the selling stockholders named therein.
Our liquidity is highly dependent on our ability to increase revenues, control our operating costs, and raise additional capital, if necessary. There can be no assurance that we will be able to raise additional capital on favorable terms or at all or execute on any other means of improving our liquidity as described above.
We may seek to raise additional capital, which could be in the form of loans, convertible debt or equity, to fund our operating requirements and capital expenditures. There can be no assurance that we will be able to raise additional capital on favorable terms or at all or execute on any other means of improving our liquidity as described above.
Other expense, net Oth er expense, ne t was $0.7 million in fiscal 2023, compared to $0.1 million in fiscal 2022.
Interest income, net Interest income, net was $3.7 million in fiscal 2024 compared to $1.3 million for fiscal 2023. The increase in interest income, net, was primarily due to higher cash balances in fiscal 2024. Other expense, net Oth er expense, ne t was $0.3 million in fiscal 2024, compared to $0.7 million in fiscal 2023.
Revenues in the Wind business unit increased 108% to $23.6 million in fiscal 2023 from $11.4 million in fiscal 2022. The increase over the prior year period was driven by additional shipments of electrical control systems ("ECS") at increased prices.
The increase over the prior year period was driven by additional shipments of electrical control systems ("ECS") at increased prices. 39 Cost of Revenues and Gross Margin Cost of revenues increased by 46% to $161.0 million in fiscal 2024 , compared to $110.4 million in fiscal 2023.
At March 31, 2024, we had cash, cash equivalents and restricted cash of $92.3 million, compared to $25.7 million at March 31, 2023, an increase of $66.6 million. As of March 31, 2024, we had approximately $4.0 million in cash, cash equivalents and restricted cash in foreign bank accounts.
As of March 31, 2025, we had approximately $4.7 million in cash, cash equivalents and restricted cash in foreign bank accounts.
We are a party to many contractual obligations involving commitments to make payments to third parties. These obligations impact our short-term and long-term liquidity and capital resource needs. Certain contractual obligations are reflected on the consolidated balance sheet as of March 31, 2024, while others are considered future commitments.
These obligations impact our short-term and long-term liquidity and capital resource needs. Certain contractual obligations are reflected on the consolidated balance sheet as of March 31, 2025, while others are considered future commitments. We have various contractual arrangements, under which we have committed to purchase certain minimum quantities of goods or services on an annual basis.
Grid revenues increased 29% to $122.1 million in fiscal 2023 from $94.6 million in fiscal 2022. The increase in revenues was driven by higher NEPSI, Neeltran, and SPS revenues than in the prior year period.
Grid revenues increased 53% to $187.2 million in fiscal 2024 from $122.1 million in fiscal 2023. The increase in revenues was driven by higher D-VAR and NEPSI revenues than in the prior year period along with the NWL revenues earned after the acquisition of NWL.
The non-GAAP measures included in this Form 10-K, however, should be considered in addition to, and not as a substitute for or superior to the comparable measure prepared in accordance with GAAP.
The non-GAAP measures included in this Form 10-K, however, should be considered in addition to, and not as a substitute for or superior to the comparable measure prepared in accordance with GAAP. 41 We define non-GAAP net income as net income (loss) before stock-based compensation, amortization of acquisition-related intangibles, change in fair value of contingent consideration, acquisition costs, and other non-cash or unusual charges.
We record a liability in our consolidated financial statements for these matters when a loss is known or considered probable and the amount can be reasonably estimated. We review these estimates each accounting period as additional information is known and adjust the loss provision when appropriate.
Legal Proceedings From time to time, we are involved in legal and administrative proceedings and claims of various types. We record a liability in our consolidated financial statements for these matters when a loss is known or considered probable and the amount can be reasonably estimated.
Selling, general, and administrative Selling, general and administrative (“SG&A”) expenses increased by 10% to $31.6 million, or 22% of rev enue in fiscal 2023 from $28.7 million, or 27% of revenue, in fiscal 2022. The increase in SG&A expenses is primarily a result of higher total compensation expense.
Selling, general, and administrative Selling, general and administrative (“SG&A”) expenses increased by 36% to $43.1 million, or 19% of rev enue in fiscal 2024 from $31.6 million, or 22% of revenue, in fiscal 2023.
We performed our annual assessment of goodwill on February 29, 2024 and noted no triggering events from the analysis date to March 31, 2024 and determined that there was no impairment to goodwill. See Note 4, “Goodwill,” for further information regarding our goodwill valuation assumptions.
We performed our annual assessment of goodwill on February 28, 2025 including a quantitative assessment of our goodwill balance acquired from our acquisition of Neeltran, and a qualitative assessment of all other reporting units goodwill, and determined that there was no impairment to goodwill. See Note 5, “Goodwill,” for further information regarding our goodwill valuation assumptions.
Accordingly, future business and economic conditions, as well as changes in any of the assumptions described above, can materially impact the fair value of contingent consideration recorded at each reporting period. 31 Valuation of long-lived assets We periodically evaluate our long-lived assets, consisting principally of fixed and amortizable intangible assets for potential impairment.
Accordingly, future business and economic conditions, as well as changes in any of the assumptions described above, can materially impact the fair value of contingent consideration recorded at each reporting period. 45 Goodwill Goodwill represents the excess of cost over net assets of acquired businesses that are consolidated.
Operating Expenses Research and development Research and development (“R&D”) expenses decreased by 11% to $8.0 million, or 5% of revenue in fiscal 2023 , compared to $9.0 million, or 8% of revenue, in fiscal 2022. The decrease in R&D expenses is primarily a result of lower total compensation expense and lower materials and consulting expenses.
Operating Expenses Research and development Research and development (“R&D”) expenses increased by 43% to $11.4 million, or 5% of revenue in fiscal 2024 , compared to $8.0 million, or 5% of revenue, in fiscal 2023.
The increase in net cash provided by financing activities in fiscal 2023 compared to fiscal 2022 was primarily due to the equity raise in February 2024. At March 31, 2024, we had $1.3 million of restricted cash included in long-term assets and $0.5 million of restricted cash in current assets.
At March 31, 2025, we had $4.3 million of restricted cash included in long-term assets and $1.6 million of restricted cash in current assets. At March 31, 2024, we had $1.3 million of restricted cash included in long-term assets and $0.5 million of restricted cash in current assets.
If the loss is not probable or cannot be reasonably estimated, a liability is not recorded in our consolidated financial statements. 29 Recent Accounting Pronouncements In June 2016, the Finan cial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments .
If the loss is not probable or cannot be reasonably estimated, a liability is not recorded in our consolidated financial statements. Recent Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures .
See Note 1, “Nature of the Business and Operations and Liquidity,” for further information about this offering. 25 Results of Operations Fiscal Years Ended March 31, 2024 and March 31, 2023 Revenues Total revenues increased by 37% to $145.6 million in fiscal 2023 from $106.0 million in fiscal 2022.
Results of Operations Fiscal Years Ended March 31, 2025 and March 31, 2024 Revenues Total revenues increased by 53% to $222.8 million in fiscal 2024 from $145.6 million in fiscal 2023.
The decrease in net cash used in investing activities in fiscal 2023 compared to fiscal 2022 was due primarily to lower investment in property, plant, and equipment in fiscal 2023 compared to fiscal 2022. Net cash provided by financing activities was $65.4 million and $0.2 million in fiscal 2023 and 2022, respectively.
Net cash used in investing activities was $35.2 million and $1.0 million in fiscal 2024 and 2023, respectively. The increase in net cash used in investing activities in fiscal 2024 compared to fiscal 2023 was due primarily to cash paid for the acquisition of NWL.
The Company utilizes management estimates and an independent third-party valuation firm to assist in determining the fair values of assets acquired, including intangible assets and liabilities assumed. The primary intangible assets acquired include customer relationship and trade names. Intangible assets are initially valued using a methodology commensurate with the intended use of the asset.
Determining the fair value of certain assets and liabilities assumed is judgmental in nature and often involves the use of significant estimates and assumptions as well as the use of specialists as needed. The Company utilizes management estimates and an independent third-party valuation firm to assist in determining the fair values of assets acquired, including intangible assets and liabilities assumed.
The fair value of customer relationships is measured using the multi-period excess earnings method (“MPEEM”). The fair value of the trade names is measured using a relief-from-royalty (“RFR”) approach. The basis for future sales projections for both the MPEEM and RFR are based on internal revenue forecasts which the Company believes represents reasonable market participant assumptions.
The basis for future sales projections for both the MPEEM and RFR are based on internal revenue forecasts which the Company believes represents reasonable market participant assumptions. The future cash flows are discounted using an applicable discount rate.
The change in fair value was primarily driven by an increased likelihood of achieving certain revenue targets and an increase in our stock price. 26 Operating loss Our operating loss is summarized as fo llows (in thousands): Fiscal Years Ended March 31, 2024 2023 Operating income (loss): Grid $ (2,754 ) $ (24,615 ) Wind 946 (2,547 ) Unallocated corporate expenses (9,560 ) (5,847 ) Total $ (11,368 ) $ (33,009 ) Our Grid business segment generated an operating loss o f $2.8 million in fiscal 2023 and $24.6 million in fiscal 2022.
Operating income (loss) Our operating income (loss) is summarized as fo llows (in thousands): Fiscal Years Ended March 31, 2025 2024 Operating income (loss): Grid $ 1,812 $ (6,909 ) Wind 3,792 449 Unallocated corporate expenses (6,681 ) (4,908 ) Total $ (1,077 ) $ (11,368 ) 40 Our Grid business segment generated operating income o f $1.8 million in fiscal 2024 and operating loss of $6.9 million in fiscal 2023.
Fiscal 2023 experienced a favorable product mix in the Wind and Grid business units, with increased service revenues and a sharp improvement in Neeltran project margins.
Gross margin increased to 28% in fis cal 2024 from 24% in fiscal 2023. The increase in gross margin in fiscal 2024 was due to additional revenues, a favorable product mix, and a sharp improvement in Neeltran project margins.
Over-time revenue recognition accounting is predominantly used on certain turnkey power systems installations for electric utilities and long-term prototype development contracts with the U.S. government. In addition, some contracts contain an element of variable consideration, including liquidated damages and/or penalties, which requires payment to the customer in the event that delivery timelines or milestones are not met.
Over-time revenue recognition accounting is predominantly used on certain turnkey power systems installations for electric utilities and long-term prototype development contracts with the U.S. government. Significant judgement is required to estimate the total expected costs for projects that typically have a timeline of 12-24 months.
The improvement in the non-GAAP net income in fiscal 2023 compared to fiscal 2022 was due to an improved operating loss driven by higher revenues and gross margins. 28 Liquidity and Capital Resources We have experienced recurring operating losses and as of March 31, 2024 had an accumulated deficit of $1,066.7 million.
The improvement in non-GAAP net income in fiscal 2024 compared to fiscal 2023 was due to improved operating income driven by higher revenues and gross margins. Liquidity and Capital Resources The Company’s primary sources of liquidity are internally generated cash provided by operating activities, our cash and cash equivalents on hand, along with access to capital markets.
The increase in net cash provided by operations in fiscal 2023 compared to fiscal 2022 was driven primarily by higher gross margins, increased cash collections, and relief of deferred revenue from prior fiscal periods. Net cash used in investing activities was $1.0 million and $1.5 million in fiscal 2023 and 2022, respectively.
The increase in net cash provided by operations in fiscal 2024 compared to fiscal 2023 was driven primarily by higher gross margins, favorable changes in accounts payable and accrued expenses, relief of deferred revenue, increased non-cash expenses like stock-based compensation, depreciation and amortization, and change in fair value of contingent consideration, offset by decreased cash collections, increased prepaid balances, and change in deferred income taxes.
Following the release of ASU 2019-10 in November 2019, the effective date, as long as the Company remained a smaller reporting company, was annual reporting periods beginning after December 15, 2022. As of April 1, 2023, we have adopted ASU 2016-13, and noted no material impact on our consolidated financial statements.
The amendments in ASU 2024-03 address investor requests for more disclosure of disaggregated financial reporting information about expenses presented in the income statement. Following the release of ASU 2024-03 in November 2024, the effective date will be annual reporting periods beginning after December 15, 2026. We are evaluating the impact on our consolidated financial statements.
Removed
Other fiscal years follow similarly. 24 We continue to experience some inflationary pressure in our supply chain and some delays in sourcing materials needed for our products, resulting in some production disruption both of which have increased our cost of revenues and decreased gross margin.
Added
Pursuant to the terms of the Stock Purchase Agreement and concurrently with entering into such agreement, we acquired all of the issued and outstanding shares of Megatran, Industries, Inc.
Removed
While the impact of inflation has been challenging, we continue to take actions to limit this pressure including adjusting the pricing of our products and services.
Added
("Megatran"), for aggregate consideration in an amount equal to $61.4 million, as may be adjusted pursuant to the Stock Purchase Agreement (the “Purchase Price”), including a cash payment after closing of $5.0 million, as adjusted pursuant to Sections 5.6(c), (d), and (f) of the Stock Purchase Agreement (the “Additional Cash Purchase Price”).
Removed
From time-to-time we may undertake restructuring activities in order to align our global organization in a manner that we believe will better position us to achieve our long-term goals. In January 2023, we undertook a reduction in force that involved approximately 5% of our global workforce.
Added
At closing, we paid to Megatran's selling stockholders $25.0 million in cash on hand, and 1,297,600 restricted shares of our common stock.
Removed
This restructuring has caused us to incur $1.0 million of cash expense which has been fully paid as of March 31, 2024 and is expected to result in annualized cost savings of approximately $5.0 million, which we began to realize in fiscal 2023.
Added
On September 23, 2024, we paid the Additional Cash Purchase Price to the selling stockholders, which was calculated based on the agreed upon formula set forth in the Stock Purchase Agreement, in the amount of $8.3 million which includes the Additional Cash Purchase Price and the make whole payment. Megatran's wholly-owned subsidiary, NWL, Inc.
Removed
In February 2023, we completed the process of determining and verifying our eligibility and amount of payroll tax credits known as the Employee Retention Credit (“ERC”) under the CARES Act which Congress enacted as part of the Taxpayer Certainty and Disaster Tax Relief Act of 2020.
Added
("NWL"), is a U.S.-based global provider of engineered power conversion solutions for demanding industrial and military applications. As a result of this transaction, Megatran became a wholly-owned subsidiary and is operated by our Grid business segment. We refer to this transaction as the "acquisition of NWL".
Removed
This resulted in filing certain amended payroll tax forms for eligible quarters in 2020 and 2021, which, in the aggregate, totaled $3.3 million. We recognized a receivable in prepaid expenses and other current assets and a benefit to cost of revenues and operating expenses in the quarter ended March 31, 2023.
Added
Revenues in the Wind business segment increased 51% to $35.6 million in fiscal 2024 from $23.6 million in fiscal 2023.
Removed
In the year ended March 31, 2024, the Company received $3.0 million in payments for the initial claims that were processed. The remaining balance is expected to be paid during fiscal 2024.
Added
The increase in R&D expenses is primarily a result of additional total compensation and stock compensation expense due in part to additional employees as a result of the acquisition of NWL.
Removed
On February 2, 2024, we completed an offering of 6,210,000 shares of our common stock at a public offering price of $11.25 per share under our then-existing Registration Statement on Form S-3. We received net proceeds of approximately $65.2 million after deducting underwriting discounts and commissions and offering expenses.
Added
The increase in SG&A expenses is primarily a result of higher total compensation expense, additional stock compensation expense and acquisition costs related to the acquisition of NWL.
Removed
Cost of Revenues and Gross Margin Cost of revenues increased by 13% to $110.4 million in fiscal 2023 , compared to $97.5 million in fiscal 2022. Gross margin increased to 24% in fis cal 2023 from 8% in fiscal 2022. The increase in gross margin in fiscal 2023 was due to additional revenues while minimizing fixed factory cost.
Added
During fiscal 2024, we issued 300,000 shares of our common stock to the selling stockholders following certification of the achievement of specified earnout revenue objectives. We also recorded a $3.3 million payment relating to the acquisition of NWL, as a payment to settle the remaining obligations after the acquisition.
Removed
During fiscal 2023, we issued 399,999 shares of common stock and cash in lieu of a fractional share of common stock, related to the achievement of specified revenue objectives in connection with the acquisition of NEPSI at a fair value of $3.1 million.
Added
The value of this contingent consideration was de minimis at the Acquisition Date and the resulting change in fair value was recorded in September 2024 when the payment was calculated and paid.
Removed
One specified revenue objective, which would have earned the selling stockholders 300,000 shares of our common stock, was not achieved, leaving 300,000 shares of common stock remaining for potential issuance upon the achievement of the last specified revenue objective by September 30, 2024.
Added
The net improvement in income tax is a result of the release of the valuation allowance due to the recording of the deferred tax liability from the acquisition of NWL. Net income (loss) Net income was $6.0 million in fiscal 2024, compared to net loss of $11.1 million in fiscal 2023.
Removed
Unallocated corporate expenses in fiscal 2022 consisted of a loss on contingent consideration of $0.1 million, stock-based compensation expense of $4.7 million, and a restructuring charge of $1.0 million. Interest income, net Interest income, net was $1.3 million in fiscal 2023 compared to $0.3 million for fiscal 2022.
Added
The Company believes that these sources of liquidity provide adequate liquidity to meet both its short-term and reasonably foreseeable long-term requirements and obligations. At March 31, 2025, we had cash, cash equivalents and restricted cash of $85.4 million, compared to $92.3 million at March 31, 2024, a decrease of $6.9 million.

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