AMERICAN SUPERCONDUCTOR CORP DE
For the period ended Jun 30, 2024. Filed Aug 6, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 6, 2024
AMSC$23.39-2.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2023-12-31; filed 2024-01-24.
0001437749-24-002041
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-06.
0001437749-24-024886
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 71 previous paragraphs and 70 current paragraphs.
33 unchanged; 29 reworded; 7 added; 9 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
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. See Note 1, “Nature of the Business and Operations and Liquidity,” for further information about this offering.
Current report
On August 1, 2024, we entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with the selling stockholders named therein. Pursuant to the terms of the Stock Purchase Agreement and concurrently with entering into such agreement, the Company acquired all of the issued and outstanding shares of Megatran, for aggregate consideration in an amount equal to $61,350,000 (the “Purchase Price”). The Megatran purchase price was $30.0 million in cash on hand, and 1,297,600 restricted shares of our common stock. Megatran 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 will be operated by our Grid business unit.
Current report
Interest income, net, was $1.1 million in the three months ended June 30, 2024, compared to $0.2 million in the three months ended June 30, 2023. The increase in interest income, net, in the three months ended June 30, 2024 was due to higher cash balances earning higher interest rates.
Current report
Other expense, net
Current report
On February 14, 2024, we completed a public offering of 6,210,000 shares of our common stock at a 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.
Current report
For the three months ended June 30, 2024, net cash used in financing activities was $0.1 million compared to less than $0.1 million for the three months ended June 30, 2023. The increase was in the repurchase of common stock in connection with employee tax obligations upon the vesting of stock awards.
Current report
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. 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 June 30, 2024, we are evaluating the impact on our condensed consolidated financial statements.
Removed paragraphs (9)
Previous report
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. This restructuring is expected to incur $1.0 million of cash expenses, of which $0.9 million has been paid as of December 31, 2023 and the remaining $0.1 million is expected to be paid by March 31, 2024, and to result in annualized cost savings of approximately $5.0 million, beginning in fiscal 2023.
Previous report
Three and nine months ended December 31, 2023, compared to the three and nine months ended December 31, 2022
Previous report
Interest income, net, was $0.2 million and $0.5 million in the three and nine months ended December 31, 2023, respectively, compared to less than $0.1 million and $0.1 million in the three and nine months ended December 31, 2022, respectively, due to higher earned interest at increased interest rates in the fiscal year 2023 periods.
Previous report
China dissolution
Previous report
China dissolution expense was $1.9 million in the nine months ended December 31, 2022, and there was no similar transaction in thethree and nine months ended December 31, 2023, or the three months ended December 31, 2022. The impact of the China dissolution expense during the nine months ended December 31, 2022 was driven by the liquidation of our China entity, resulting in a foreign currency loss from the cumulative translation release of $1.9 million.
Previous report
Other income (expense), net
Previous report
For the nine months ended December 31, 2023, net cash provided by financing activities was $0.1 million. For the nine months ended December 31, 2022, net cash provided by financing activities was less than $0.1 million.
Previous report
In June 2016*,* the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU")2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments in ASU 2016-13 will provide more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. Following the release of ASU 2019-10 in November 2019, the effective date, as long as the Company remains 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 condensed consolidated financial statements.
Previous report
In October 2021, the FASB issued ASU 2021-08,Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The amendments in ASU 2021-08 will improve the accounting for acquired revenue contracts with customers in a business combination. Following the release of ASU 2021-08 in October 2021, the effective date was annual reporting periods beginning after December 15, 2022. As of April 1, 2023, we have adopted ASU 2021-08 and noted no material impact on our condensed consolidated financial statements.
Reworded paragraphs (29)
Previous wording
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). For this purpose, any statements contained herein that relate to future events or conditions, including without limitation, the statements in Part II, “Item 1A. Risk Factors” and in Part I under “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and located elsewhere herein regarding industry prospects, our prospective results of operations or financial position, the benefits of our acquisitions of Northeast Power Systems, Inc. ("NEPSI") and Neeltran, Inc. ("Neeltran"), contingent payments related to the NEPSI acquisition, changes in macroeconomic and market conditions, including increasing inflation and impacts from COVID-19, sourcing, production disruption, material delays and global supply chain disruptions and adoption of accounting changes may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” and similar expressions are intended to identify forward-looking statements. Such forward-looking statements represent management’s current expectations and are inherently uncertain. There are a number of important factors that could materially impact the value of our common stock or cause actual results to differ materially from those indicated by such forward-looking statements. These important factors include but are not limited to: 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; 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; 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; Changes in exchange rates could adversely affect our results of operations; 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; We may not realize all of the sales expected from our backlog of orders and contracts; Our contracts with the U.S. government are subject to audit, modification or termination by the U.S. government and include certain other provisions in favor of the government. 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; COVID-19 has adversely impacted our business, financial condition and results of operations and other future pandemics or health crises may have…
Excerpt shortened here; the source contains the full paragraph.
Current wording
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). For this purpose, any statements contained herein that relate to future events or conditions, including without limitation, the statements in Part II, “Item 1A. Risk Factors” and in Part I under “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and located elsewhere herein regarding industry prospects, our prospective results of operations or financial position, the benefits of our acquisitions of Northeast Power Systems, Inc. ("NEPSI") and Neeltran, Inc. ("Neeltran"), contingent payments related to the NEPSI acquisition, changes in macroeconomic and market conditions, including increasing inflation and impacts from sourcing, production disruption, material delays and global supply chain disruptions and adoption of accounting changes may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” and similar expressions are intended to identify forward-looking statements. Such forward-looking statements represent management’s current expectations and are inherently uncertain. There are a number of important factors that could materially impact the value of our common stock or cause actual results to differ materially from those indicated by such forward-looking statements. These important factors include, but are not limited to: 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; 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; Our technology and products could infringe intellectual property rights of others, which may require costly litigation and, if we are not successful, could cause us to pay substantial damages and disrupt our business; Changes in exchange rates could adversely affect our results of operations; 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; 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; We may not realize all of the sales expected from our backlog of orders and contracts; Our contracts with the U.S. government are subject to audit, modification or termination by the U.S. government and include certain other provisions in favor of the government. The continued funding of such contracts remains subject to annual congressional appropriation, which, if not appro…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
Our power system solutions help to improve energy efficiency, alleviate power grid capacity constraints, improve system resiliency, and increase the adoption of renewable energy generation. Demand for our solutions is driven by the growing needs for modernized smart grids that improve power reliability, security and quality, the U.S. Navy's effort to upgrade in-board power systems to support fleet electrification, and the need for increased renewable sources of electricity, such as wind and solar energy. Concerns about these factors have led to increased spending by corporations and the military, as well as supportive government regulations and initiatives on local, state, and national levels, including renewable portfolio standards, tax incentives and international treaties.
Current wording
Our power system solutions help to improve energy efficiency, alleviate power grid capacity constraints, improve system resiliency, and increase the adoption of renewable energy generation. Demand for our solutions is driven by the growing needs for modernized smart grids that improve power reliability, security and quality, the U.S. 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. Concerns about these factors have led to increased spending by corporations and the military, as well as supportive government regulations and initiatives on local, state, and national levels, including renewable portfolio standards, tax incentives and international treaties.
Previous wording
We manufacture products using two proprietary core technologies: PowerModule™ programmable power electronic converters and our Amperium® high temperature superconductor (“HTS”) wires. These technologies and our system-level solutions are protected by a broad and deep intellectual property portfolio consisting of hundreds of patents and licenses worldwide.
Current wording
We manufacture products using two proprietary core technologies: PowerModule™ programmable power electronic converters and our Amperium® high temperature superconductor ("HTS") wires. 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.
Previous wording
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. 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. Changes in macroeconomic conditions arising from various reasons, such as the ongoing wars between Russia and Ukraine and Israel and Hamas, inflation, COVID-19, 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.
Current wording
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. 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. 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.
Previous wording
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. 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. During the nine months ended December 31, 2023, we received $3.0 million in payments for the initial claims that were processed. The remaining balance is expected to be paid during the remainder of fiscal 2023.
Current wording
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. 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. 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.
Previous wording
Total revenues increased 65% to $39.4 million for the three months ended December 31, 2023 and total revenues increased 40% to $103.6 million for the nine months ended December 31, 2023, compared to $23.9 million and $74.2 million for the three and nine months ended December 31, 2022, respectively. Our revenues are summarized as follows (in thousands):
Current wording
Total revenues increased 33% to $40.3 million for the three months ended June 30, 2024, compared $30.3 million for the three months ended June 30, 2023. Our revenues are summarized as follows (in thousands):
Previous wording
Our Grid business unit accounted for 85% of total revenues for each of the three and nine months ended December 31, 2023, respectively, compared to 87% and 89% for the three and nine months ended December 31, 2022, respectively. Our Grid business unit revenues increased 61% to $33.6 million in the three months ended December 31, 2023, from $20.8 million in the three months ended December 31, 2022. Our Grid business unit revenues increased 32% to $87.9 million in the nine months ended December 31, 2023, from $66.3 million in the nine months ended December 31, 2022. The increase in the Grid business unit revenues in the three and nine months ended December 31, 2023, compared to the three and nine months ended December 31, 2022 was primarily driven by increased shipments of new energy power systems and increased ship protection systems revenues than in the prior year periods.
Current wording
Our Grid business unit accounted for 80% of total revenues for the three months ended June 30, 2024, compared to 85% for the three months ended June 30, 2023. Our Grid business unit revenues increased 26% to $32.3 million in the three months ended June 30, 2024, from $25.7 million in the three months ended June 30, 2023. The increase in the Grid business unit revenues in the three months ended June 30, 2024, compared to the three months ended June 30, 2023 was primarily driven by increased shipments of new energy power systems than in the prior year period.
Previous wording
Our Wind business unit accounted for 15% of total revenues for each of the three and nine months ended December 31, 2023, respectively, compared to 13% and 11% for the three and nine months ended December 31, 2022, respectively. Revenues in the Wind business unit increased 87% and 99% to $5.8 million and $15.8 million in the three and nine months ended December 31, 2023, from $3.1 million and $7.9 million in the three and nine months ended December 31, 2022, respectively. The increase during the three and nine months ended December 31, 2023, compared to the three and nine months ended December 31, 2022, was driven by additional shipments of electrical control systems ("ECS") at increased prices.
Current wording
Our Wind business unit accounted for 20% of total revenues for the three months ended June 30, 2024, compared to 15% for the three months ended June 30, 2023. Revenues in the Wind business unit increased 76% to $8.0 million in the three months ended June 30, 2024, from $4.5 million in the three months ended June 30, 2023. The increase during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, was driven by additional shipments of electrical control systems ("ECS") at increased prices.
Previous wording
Cost of revenues increased by 26% to $29.4 million for the three months ended December 31, 2023, compared to $23.4 million for the three months ended December 31, 2022. Cost of revenues increased by 13% to $78.8 million for the nine months ended December 31, 2023, compared to $69.5 million for the nine months ended December 31, 2022. Gross margin was 25% and 24% for thethree and nine months ended December 31, 2023, respectively, compared to 2% and 6% for thethree and nine months ended December 31, 2022, respectively. The increase in gross margin in the three and nine months ended December 31, 2023 was due to higher revenues, a more favorable product mix and favorable impacts across the business due to pricing increases across our product lines.
Current wording
Cost of revenues increased by 17% to $28.1 million for the three months ended June 30, 2024, compared to $24.0 million for the three months ended June 30, 2023. Gross margin was 30% for thethree months ended June 30, 2024, compared to 21% for thethree months ended June 30, 2023. The increase in gross margin in the three months ended June 30, 2024 was due to higher revenues, a more favorable product mix and favorable impacts across the business due to pricing increases across our product lines.
Previous wording
Research and development ("R&D") expenses increased 6% in the three months ended December 31, 2023 to $2.2 million from $2.1 million in the three months ended December 31, 2022. The increase was driven primarily bylower cost share revenue. R&D expense decreased 20% in the nine months ended December 31, 2023 to $5.7 million from $7.1 million in the nine months ended December 31, 2022. The decrease was driven primarily by decreased compensation, materials and supplies expenses.
Current wording
Research and development ("R&D") expenses increased 23% in the three months ended June 30, 2024 to $2.3 million from $1.9 million in the three months ended June 30, 2023. The increase was driven primarily by higher overall compensation expense and additional supplies and materials.
Previous wording
Selling, general and administrative ("SG&A") expenses increased 9% in the three months ended December 31, 2023 to $7.8 million from $7.2 million in the three months ended December 31, 2022. SG&A expenses increased 7% to $23.6 million in the nine months ended December 31, 2023, compared to $22.1 million in the nine months ended December 31, 2022. The increase in SG&A expense in the three and nine months ended December 31, 2023, was due to higher overall compensation expense than in each of the prior year periods.
Current wording
Selling, general and administrative ("SG&A") expenses increased 13% in the three months ended June 30, 2024 to $8.9 million from $7.9 million in the three months ended June 30, 2023. The increase in SG&A expense in the three months ended June 30, 2024, was due to higher overall compensation expense and higher outside services expense.
Previous wording
We recorded amortization expense related to our core technology and know-how, customer relationships, and other intangible assets of $0.5 million and $1.6 million in the three and nine months ended December 31, 2023, respectively, and $0.7 million and $2.1 million in the three and nine months ended December 31, 2022, respectively. The decrease in amortization expense in both periods is a result of using the economic consumption method as the basis to amortize the acquired customer relationship intangible assets from Northeast Power Systems, Inc ("NEPSI") and Neeltran.
Current wording
We recorded amortization expense related to our core technology and know-how, customer relationships, and other intangible assets of $0.4 million in the three months ended June 30, 2024, and $0.5 million in the three months ended June 30, 2023. The decrease in amortization expense is a result of using the economic consumption method as the basis to amortize the acquired customer relationship intangible assets from NEPSI and Neeltran.
Previous wording
The change in fair value of our contingent consideration for the earnout payment on the acquisition of NEPSI resulted in losses of $0.9 million and $3.1 million resulting from the increase in the fair value of the contingent consideration in the three and nine months ended December 31, 2023, respectively. During the three and nine months ended December 31, 2023 we issued 399,999 shares 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. 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. We recorded the above noted losses, compared to a gain of $0.2 million and $0.3 million in the three and nine months ended December 31, 2022, respectively. The change in the fair value was driven by an increased likelihood of achieving certain revenue targets and an increase in our stock price.
Current wording
The change in fair value of our contingent consideration for the earnout payment on the acquisition of NEPSI resulted in losses of $3.9 million and $1.3 million in the three months ended June 30, 2024 and 2023, respectively. The change in the fair value was primarily driven by an increased likelihood of achieving certain revenue targets and an increase in our stock price.
Previous wording
Our Grid business segment generated operating income of $0.3 million and operating loss of $2.4 million in thethree and nine months ended December 31, 2023, respectively, compared to operating losses of $7.1 million and $20.9 million in thethree and nine months ended December 31, 2022, respectively. The increase in the Grid business unit operating income in the three and nine months ended December 31, 2023 was due to higher revenues and gross margins due to a favorable product mixas well as the reduction of the remaining acquired Neeltran backlog.
Current wording
Our Grid business segment generated operating income of $0.9 million in thethree months ended June 30, 2024, compared to operating losses of $2.0 million in thethree months ended June 30, 2023. The increase in the Grid business unit operating income in the three months ended June 30, 2024 was due to higher revenues and gross margins due to a favorable product mix.
Previous wording
Our Wind business segment generated operating income of $0.3 million and operating loss of $0.1 million in thethree and nine months ended December 31, 2023, respectively, compared to operating losses of $0.9 million and $2.2 million in thethree and nine months ended December 31, 2022, respectively. The improvement in the Wind business unit operating income in the three and nine months ended December 31, 2023 was due to higher revenues and gross margins from increased sales of ECS units.
Current wording
Our Wind business segment generated operating income of $1.0 million in thethree months ended June 30, 2024, compared to operating losses of $0.6 million in thethree months ended June 30, 2023. The improvement in the Wind business unit operating income in the three months ended June 30, 2024 was due to higher revenues and gross margins from increased sales of ECS units.
Previous wording
Unallocated corporate expenses includednet losses of $0.9 million and $3.1 million resulting from the increases in the fair value of the NEPSI contingent consideration in the three and nine months ended December 31, 2023, respectively. Additionally, unallocated corporate expenses consisted of stock-based compensation expense of $1.1 million and$3.6 million in the three and nine months ended December 31, 2023, respectively, and $1.4 million and $3.5 million in thethree and nine months ended December 31, 2022, respectively.
Current wording
Unallocated corporate expenses includednet losses on contingent consideration of $3.9 million and $1.3 million in the three months ended June 30, 2024 and 2023, respectively. Additionally, unallocated corporate expenses consisted of stock-based compensation expense of $1.2 millionand $1.4 million in the three months ended June 30, 2024 and 2023, respectively.
Previous wording
Other expense, net, was $0.3 million and $0.6 million in thethree and nine months ended December 31, 2023, respectively, compared to other expense, net, of $0.3 million and less than $0.1 million in the three and nine months ended December 31, 2022, respectively. The increase in other expense, net, during the three and nine months ended December 31, 2023, compared to the three and nine months ended December 31, 2022, was driven by the impacts of unfavorable fluctuations in foreign currencies during the periods.
Current wording
Other expense, net, was $0.2 million in thethree months ended June 30, 2024, compared to $0.1 million in the three months ended June 30, 2023. The increase in other expense, net, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, was driven by the impacts of unfavorable fluctuations in foreign currencies during the periods.
Previous wording
Income tax expense was $0.1 million and $0.3 million in the three and nine months ended December 31, 2023, respectively. Income tax expense was $0.1 million in each of the three and nine months ended December 31, 2022.
Current wording
Income tax expense was $0.2 million in the three months ended June 30, 2024. Income tax expense was $0.1 million in the three months ended June 30, 2023.
Previous wording
Net loss was $1.6 million and $9.5 million in thethree and nine months ended December 31, 2023, respectively, compared to $9.6 million and $28.2 million in thethree and nine months ended December 31, 2022, respectively. The decrease in net loss in both periods was driven primarily by the increased revenues and gross margins.
Current wording
Net loss was $2.5 million in thethree months ended June 30, 2024, compared to $5.4 million in thethree months ended June 30, 2023. The decrease in net loss was driven primarily by the increased revenues and gross margins.
Previous wording
We define non-GAAP net income (loss) as net loss before China dissolution, stock-based compensation, amortization of acquisition-related intangibles, change in fair value of contingent consideration, and other non-cash or unusual charges. We believe non-GAAP netincome (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 netincome (loss) as a factor to evaluate the effectiveness of our business strategies. A reconciliation of GAAP to non-GAAP netincome (loss) is set forth in the table below (in thousands, except per share data):
Current wording
We define non-GAAP net income (loss) as net loss before stock-based compensation, amortization of acquisition-related intangibles, change in fair value of contingent consideration, and other non-cash or unusual charges. We believe non-GAAP netincome (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 netincome (loss) as a factor to evaluate the effectiveness of our business strategies. A reconciliation of GAAP to non-GAAP netincome (loss) is set forth in the table below (in thousands, except per share data):
Previous wording
We incurred non-GAAP net income of $0.9 million and a non-GAAP net loss of $1.3 million, or $0.03 and $(0.04) per share, for thethree and nine months ended December 31, 2023, respectively, compared to non-GAAP net losses of $7.7 million and $21.0 million, or $(0.27) and $(0.76) per share, for thethree and nine months ended December 31, 2022, respectively. The improvement in the non-GAAP net income (loss) for the three and nine months ended December 31, 2023 was due to a lower operating loss driven by higher revenues and gross margins.
Current wording
We incurred non-GAAP net income of $3.0 million, or $0.09 per share, for thethree months ended June 30, 2024, compared to non-GAAP net losses of $2.1 million, or $(0.08) per share, for thethree months ended June 30, 2023. The improvement in the non-GAAP net income (loss) for the three months ended June 30, 2024 was due to a lower operating loss driven by higher revenues and gross margins.
Previous wording
We have experienced recurring operating losses and, as of December 31, 2023, had an accumulated deficit of $1,065.1 million.
Current wording
We have experienced recurring operating losses and, as of June 30, 2024, had an accumulated deficit of $1,069.2 million.
Previous wording
In February 2021, we filed a shelf registration statement on Form S-3 that will expire in February 2024 (the “Form S-3”). The Form S-3 allows us 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 Form S-3 is intended to provide us flexibility to conduct registered sales of our securities, subject to market conditions, in order to fund our future capital needs. 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.
Current wording
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”). The Form S-3 allows us 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 Form S-3 is intended to provide us flexibility to conduct registered sales of our securities, subject to market conditions, in order to fund our future capital needs. 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.
Previous wording
As of December 31, 2023, we had cash, cash equivalents and restricted cash of $25.0 million, compared to $25.7 million as of March 31, 2023, a decrease of $0.7 million. As of December 31, 2023, we had $2.4 million in cash, cash equivalents, and restricted cash in foreign bank accounts. Our cash, cash equivalents, and restricted cash are summarized as follows (in thousands):
Current wording
As of June 30, 2024, we had cash, cash equivalents and restricted cash of $95.5 million, compared to $92.3 million as of March 31, 2024, an increase of $3.2 million. As of June 30, 2024, we had $3.2 million in cash, cash equivalents, and restricted cash in foreign bank accounts. Our cash, cash equivalents, and restricted cash are summarized as follows (in thousands):
Previous wording
For the nine months ended December 31, 2023, net cash used in operating activities was $0.1 million, compared to $17.1 million for the nine months ended December 31, 2022. The decrease in net cash used in operations was due primarily to decreases in net loss and in prepaid expenses and other current assets in the nine months ended December 31, 2023 as compared to December 31, 2022. Cash flows from operating activities in the nine months ended December 31, 2023 included a reimbursement of $3.0 million for the ERC receivable included in prepaid expenses and other current assets at March 31, 2023.
Current wording
For the three months ended June 30, 2024, net cash provided by operating activities was $3.4 million, compared to cash used in operations of $2.2 million for the three months ended June 30, 2023. The increase in cash flows from operating activities in the three months ended June 30, 2024 was due primarily to improvement in net loss, increase in the change in fair value of contingent consideration, and less cash used to settle accounts payable and accrued expenses, slightly offset by cash used for prepaid expenses and other assets.
Previous wording
For the nine months ended December 31, 2023, net cash used in investing activities was $0.6 million, compared to $1.2 million for the nine months ended December 31, 2022. The decrease in net cash used in investing activities was primarily due to a decrease in purchases of property, plant and equipment.
Current wording
For the three months ended June 30, 2024, net cash used in investing activities was less than $0.1 million, compared to $0.3 million for the three months ended June 30, 2023. The decrease in net cash used in investing activities was primarily due to changes in other assets.
Previous wording
As of December 31, 2023, we had $0.4 million of restricted cash included in long-term assets and $0.7 million of restricted cash included in current assets. 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.
Current wording
As of June 30, 2024, we had $1.6 million of restricted cash included in long-term assets and $0.5 million of restricted cash included 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. 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.
Previous wording
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 December 31, 2023, 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. For information regarding our other contractual obligations, refer to Note 13, "Contingent Consideration," Note 14, "Debt," Note 15, "Leases" and Note 16, "Commitments and Contingencies" to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
Current wording
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 condensed consolidated balance sheet as of June 30, 2024, 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. For information regarding our other contractual obligations, refer to Note 13, "Contingent Consideration," Note 14, "Debt," Note 15, "Leases" and Note 16, "Commitments and Contingencies" to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
Previous wording
We believe we have sufficient available liquidity to fund our operations and capital expenditures for the next twelve months. In addition, 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. 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. Additionally, the impact of COVID-19 or other sources of instability, including the ongoing wars between Russia and Ukraine or 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. We also continue to closely monitor our expenses and, if required, we intend to reduce our operating and capital spending to enhance liquidity.
Current wording
We believe we have sufficient available liquidity to fund our operations and capital expenditures for the next twelve months. We recently raised $65.2 million, net of offering expenses, through an equity raise in February 2024. In addition, 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. 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. 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. We also continue to closely monitor our expenses and, if required, we intend to reduce our operating and capital spending to enhance liquidity.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Three months ended June 30, 2024, compared to the three months ended June 30, 2023