AMERICAN SUPERCONDUCTOR CORP DE

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 from our acquisition of Megatran Industries, Inc. ("Megatran") together with its wholly-owned subsidiaries and affiliates , changes in macroeconomic and market conditions, including inflationary pressure 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 approved, could reduce our rev…

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 from our acquisition of Megatran Industries, Inc. ("Megatran") together with its wholly-owned subsidiaries and affiliates , changes in macroeconomic and market conditions, anticipated payment of ERC's (as defined herein), 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 approved, could reduce our revenue and lower or eliminate our profit; Changes in U.S. government defense spending …

Excerpt shortened here; the source contains the full paragraph.

Previous wording

We operate our business under two market-facing business units: Grid and Wind. We believe this market-centric structure enables us to more effectively anticipate and meet the needs of power generation project developers, the Navy's ship protection systems, electric utilities and wind turbine manufacturers.

Current wording

We operate our business under two market-facing business segments: Grid and Wind. We believe this market-centric structure enables us to more effectively anticipate and meet the needs of power generation project developers, the Navy's ship protection systems, electric utilities and wind turbine manufacturers.

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, 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 operations.

Current wording

Changes in macroeconomic conditions arising from various reasons, such as the ongoing wars between Russia and Ukraine and Israel and Hamas, 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 operations.

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. 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.

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, we received $3.0 million in payments for the initial claims that were processed. The remaining balance is expected to be received during fiscal 2025.

Previous wording

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 $61.4 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”). 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. On September 23, 2024, the Company 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. Megatran's wholly-owned subsidiary, NWL, Inc. ("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 unit.

Current wording

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, we acquired all of the issued and outstanding shares of 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”). 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. 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. ("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.

Previous wording

Total revenues increased 60% to $54.5 million for the three months ended September 30, 2024 and total revenues increased 47% to $94.8 million for the six months ended September 30, 2024, compared to $34.0 million and $64.3 million for the three and six months ended September 30, 2023, respectively. Our revenues are summarized as follows (in thousands):

Current wording

Total revenues increased 56% to $61.4 million for the three months ended December 31, 2024 and total revenues increased 51% to $156.2 million for the nine months ended December 31, 2024, compared to $39.4 million and $103.6 million for the three and nine months ended December 31, 2023, respectively. Our revenues are summarized as follows (in thousands):

Previous wording

Our Grid business unit accounted for 86% and 84% of total revenues for the three and six months ended September 30, 2024, respectively, comparedto 84% foreach of the three and six months ended September 30, 2023. Our Grid business unit revenues increased 65% to $46.9 million in the three months ended September 30, 2024, from $28.5 million in the three months ended September 30, 2023. Our Grid business unit revenues increased 46% to $79.3 million in thesix months ended September 30, 2024, from $54.3 million in thesix months ended September 30, 2023. The increase in the Grid business unit revenues in the three and six months ended September 30, 2024, compared to the three and six months ended September 30, 2023 was primarily driven by the acquisition of Megatran and increased shipments of new energy power systems than in the prior year periods.

Current wording

Our Grid business segment accounted for 85% and 84% of total revenues for the three and nine months ended December 31, 2024, respectively, comparedto 85% foreach of the three and nine months ended December 31, 2023. Our Grid business segment revenues increased 56% to $52.3 million in the three months ended December 31, 2024, from $33.6 million in the three months ended December 31, 2023. Our Grid business segment revenues increased 50% to $131.6 million in thenine months ended December 31, 2024, from $87.9 million in thenine months ended December 31, 2023. The increase in the Grid business segment revenues in the three and nine months ended December 31, 2024, compared to the three and nine months ended December 31, 2023 was primarily driven by the acquisition of Megatran and increased shipments of new energy power systems than in the prior year periods.

Previous wording

Our Wind business unit accounted for 14% and 16% of total revenues for the three and six months ended September 30, 2024, respectively, comparedto 16% for each of the three and six months ended September 30, 2023. Revenues in the Wind business unit increased 37% and 55% to $7.5 million and $15.5 million in the three and six months ended September 30, 2024, respectively, from $5.5 million and $10.0 million in the three and six months ended September 30, 2023, respectively. The increase during the three and six months ended September 30, 2024, compared to the three and six months ended September 30, 2023, was driven by additional shipments of electrical control systems ("ECS") at increased prices.

Current wording

Our Wind business segment accounted for 15% and 16% of total revenues for the three and nine months ended December 31, 2024, respectively, comparedto 15% for each of the three and nine months ended December 31, 2023. Revenues in the Wind business segment increased 58% and 56% to $9.1 million and $24.6 million in the three and nine months ended December 31, 2024, respectively, from $5.8 million and $15.8 million in the three and nine months ended December 31, 2023, respectively. The increase during the three and nine months ended December 31, 2024, compared to the three and nine months ended December 31, 2023, was driven by additional shipments of electrical control systems ("ECS") at increased prices.

Previous wording

Cost of revenues increased by 53% to $38.9 million for the three months ended September 30, 2024, compared to $25.4 million for the three months ended September 30, 2023. Cost of revenues increased by 35% to $66.9 million for thesix months ended September 30, 2024, compared to $49.4 million for thesix months ended September 30, 2023. Gross margin was 29% and 29% for thethree and six months ended September 30, 2024, respectively, compared to 25% and 23% for thethree and six months ended September 30, 2023, respectively. Cost of revenues includes total amortization expense of $0.2 million in the three months ended September 30, 2024, as a result of the Megatran acquired backlog intangible assets. In addition, a fair value purchase adjustment of approximately $0.7 million for the step-up basis assigned to acquired inventory, to properly reflect the fair value in purchase accounting. Of this adjustment, $0.3 million was charged to cost of revenues in the three months ended September 30, 2024, when the inventory sold. The increase in gross margin in the three and six months ended September 30, 2024 was due to higher revenues, a favorable product mix and favorable impacts across the business due to pricing increases across our product lines.

Current wording

Cost of revenues increased by 53% to $45.1 million for the three months ended December 31, 2024, compared to $29.4 million for the three months ended December 31, 2023. Cost of revenues increased by 42% to $112.0 million for thenine months ended December 31, 2024, compared to $78.8 million for thenine months ended December 31, 2023. Gross margin was 27% and 28% for thethree and nine months ended December 31, 2024, respectively, compared to 25% and 24% for thethree and nine months ended December 31, 2023, respectively. Cost of revenues includes total amortization expense of $0.3 million and $0.4 million in the three andnine months ended December 31, 2024, as a result of the Megatran acquired backlog intangible assets. In addition, a charge of $0.4 million and $0.7 million related to a fair value adjustment of approximately for the step-up basis assigned to acquired inventory to properly reflect the fair value in purchase accounting was charged to cost of revenues in the three and nine months ended December 31, 2024, when the inventory sold. The increase in gross margin in the three and nine months ended December 31, 2024 was due to higher revenues, a 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 61% and 41% in the three and six months ended September 30, 2024, respectively, to $2.6 million and $4.9 million from $1.6 million and $3.5 million in the three and six months ended September 30, 2023, respectively. The increase was driven primarily by higher overall compensation expense and additional supplies and materials.

Current wording

Research and development ("R&D") expenses increased 36% and 39% in the three and nine months ended December 31, 2024, respectively, to $3.0 million and $7.9 million from $2.2 million and $5.7 million in the three and nine months ended December 31, 2023, respectively. The increasein thethree and nine months ended December 31, 2024 was driven primarily by the addition of Megatran R&D expenses, higher overall compensation expense and additional stock-based compensation expense.

Previous wording

Selling, general and administrative ("SG&A") expenses increased 32% and 23% in the three and six months ended September 30, 2024, respectively, to $10.5 million and $19.4 million from $7.9 million and $15.8 million in the three and six months ended September 30, 2023, respectively. The increase in SG&A expense in thethree and six months ended September 30, 2024, respectively, was due to higher overall compensation expense and higher acquisition costs.

Current wording

Selling, general and administrative ("SG&A") expenses increased 48% and 31% in the three and nine months ended December 31, 2024, respectively, to $11.6 million and $31.0 million from $7.8 million and $23.6 million in the three and nine months ended December 31, 2023, respectively. The increase in SG&A expense in the three months ended December 31, 2024 was driven primarily by the addition of Megatran SG&A expenses, higher overall compensation expense and additional stock-based compensation expense. The increase in the nine months ended December 31, 2024 was due to the addition of Megatran SG&A expenses, higher overall compensation expense, additional stock-based compensation expense, and higher acquisition costs.

Previous wording

We recorded amortization expense related to our core technology and know-how, customer relationships, and other intangible assets of $0.4 million and $0.8 million in the three and six months ended September 30, 2024, respectively, and $0.5 million and $1.1 million in the three and six months ended September 30, 2023, respectively. 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 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 and $1.3 million in the three and nine months ended December 31, 2024, respectively, and $0.5 million and $1.6 million in the three and nine months ended December 31, 2023, respectively. 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 Northeast Power Systems, Inc. ("NEPSI") and Neeltran.

Previous wording

The change in fair value of our contingent consideration for the earnout payment on the acquisition of NEPSI resulted ina gain of $0.5 million from a decrease in fair value and a loss of $3.4 million resulting from an increase in fair value in the three and six months ended September 30, 2024, respectively. During the three and six months ended September 30, 2024, we issued 300,000 shares of common stock of the Company to the selling stockholders following certification of the achievement of specified earnout revenue objectives. We recorded the above noted changes, compared to losses of $0.9 million and $2.2 million in thethree and six months ended September 30, 2023, respectively. We also recorded a $3.3 million payment relating to the Megatran acquisition, as a payment to settle the remaining obligations after the acquisition. The value of this contingent consideration was de minimus at the Acquisition Date and the resulting change in fair value was recorded during the three and six months ended September 30, 2024

Current wording

The change in fair value of our contingent consideration for the earnout payment on the acquisition of NEPSI resulted ina loss of $3.4 million resulting from an increase in fair value in thenine months ended December 31, 2024. During the three months ended September 30, 2024, we issued 300,000 shares of common stock of the Company to the selling stockholders following certification of the achievement of specified earnout revenue objectives. We recorded the above noted changes, compared to losses of $0.9 million and $3.1 million in thethree and nine months ended December 31, 2023, respectively. We also recorded a $3.3 million payment relating to the Megatran acquisition, as a payment to settle the remaining obligations after the acquisition. The value of this contingent consideration was de minimis at the Acquisition Date and the resulting change in fair value was recorded in September during the nine months ended December 31, 2024.

Previous wording

Our Grid business segment generated operating income of $2.3 million and $3.2 million in thethree and six months ended September 30, 2024, respectively, compared to operating losses of $0.7 million and $2.6 million in thethree and six months ended September 30, 2023, respectively. The increase in the Grid business unit operating income in the three and six months ended September 30, 2024 was due to higher revenues and gross margins in part due to a favorable product mix.

Current wording

Our Grid business segment generated operating income of $2.8 million and $6.0 million in thethree and nine months ended December 31, 2024, respectively, compared to operating income of $0.3 million and operating loss of $2.4 million in thethree and nine months ended December 31, 2023, respectively. The increase in the Grid business segment operating income in the three and nine months ended December 31, 2024 was due to higher revenues and gross margins in part due to a favorable product mix.

Previous wording

Our Wind business segment generated operating income of $0.5 million and $1.5 million in thethree and six months ended September 30, 2024, respectively, compared to operating income of $0.3 million and operating loss of $0.4 million in thethree and six months ended September 30, 2023, respectively. The improvement in the Wind business unit operating income in the three and six months ended September 30, 2024 was due to higher revenues and gross margins from increased sales of ECS units.

Current wording

Our Wind business segment generated operating income of $1.4 million and $2.9 million in thethree and nine months ended December 31, 2024, respectively, compared to operating income of $0.3 million and operating loss of $0.1 million in thethree and nine months ended December 31, 2023, respectively. The improvement in the Wind business segment operating income in the three and nine months ended December 31, 2024 was due to higher revenues and gross margins from increased sales of ECS units.

Previous wording

Unallocated corporate expenses includednet losses on contingent consideration of $2.8 million and $6.7 million in the three and six months ended September 30, 2024, respectively, and net losses of $0.9 million and $2.2 million in the three and six months ended September 30, 2023, respectively. Additionally, unallocated corporate expenses consisted of stock-based compensation expense of $0.8 millionand $2.1 million in the three and six months ended September 30, 2024, respectively, and$1.1 million and $2.5 million in the three and six months ended September 30, 2023, respectively.

Current wording

Unallocated corporate expenses includednet losses on contingent consideration of $6.7 million in the nine months ended December 31, 2024, and net losses on contingent consideration of $0.9 million and $3.1 million in the three and nine months ended December 31, 2023, respectively. Additionally, unallocated corporate expenses consisted of stock-based compensation expense of $2.9 millionand $4.9 million in the three and nine months ended December 31, 2024, respectively, and$1.1 million and $3.6 million in the three and nine months ended December 31, 2023, respectively.

Previous wording

Interest income, net, was $1.0 million and $2.1 million in the three and six months ended September 30, 2024, respectively, compared to $0.2 million and $0.4 million in the three and six months ended September 30, 2023, respectively. The increase in interest income, net, in the three and six months ended September 30, 2024 was due to higher cash balances.

Current wording

Interest income, net, was $0.8 million and $2.9 million in the three and nine months ended December 31, 2024, respectively, compared to $0.2 million and $0.5 million in the three and nine months ended December 31, 2023, respectively. The increase in interest income, net, in the three and nine months ended December 31, 2024 was due to higher cash balances.

Previous wording

Other expense, net, was $0.3 million and $0.5 million in thethree and six months ended September 30, 2024, respectively, compared to $0.2 million and $0.3 million in the three and six months ended September 30, 2023, respectively. The increase in other expense, net, during the three and six months ended September 30, 2024, compared to the three and six months ended September 30, 2023, was driven by the impacts of unfavorable fluctuations in foreign currencies during the periods.

Current wording

Other income, net, was $0.3 million and other expense, net was $0.2 million in thethree and nine months ended December 31, 2024, respectively, compared to other expense, net of $0.3 million and $0.6 million in the three and nine months ended December 31, 2023, respectively. The decrease in other expense, net, during the three and nine months ended December 31, 2024, compared to the three and nine months ended December 31, 2023, was driven by the impacts of favorable fluctuations in foreign currencies and gain on earnings from NWL Pacific during the periods.

Previous wording

Income tax benefit was $5.0 million and $4.8 million in the three and six months ended September 30, 2024, respectively. Income tax expense was $0.1 million and $0.2 million in the three and six months ended September 30, 2023, respectively. The improvement in income tax benefit was a result of the release of the valuation allowance due to the recording of the deferred tax liability from the acquisition of Megatran.

Current wording

Income tax benefit was $0.1 million and $4.9 million in the three and nine months ended December 31, 2024, respectively. Income tax expense was $0.1 million and $0.3 million in the three and nine months ended December 31, 2023, respectively. The net improvement to income tax benefit for the three and nine months ended December 31, 2024 was a result of the release of the valuation allowance due to the recording of the deferred tax liability from the acquisition of Megatran.

Previous wording

Net income was $4.9 million and $2.4 million in thethree and six months ended September 30, 2024, respectively, compared to net losses of $2.5 million and $7.9 million in thethree and six months ended September 30, 2023, respectively. The improvement in net loss was driven primarily by deferred tax liability recorded as a result of the Megatran acquisition as well as increased revenues and gross margins.

Current wording

Net income was $2.5 million and $4.8 million in thethree and nine months ended December 31, 2024, respectively, compared to net losses of $1.6 million and $9.5 million in thethree and nine months ended December 31, 2023, respectively. The improvement in net income was driven primarily by increased revenues and gross margins as well as therelease of a partial valuation allowance against the deferred tax liability recorded as a result of the Megatran acquisition.

Previous wording

We incurred non-GAAP net income of $10.0 million and $13.2 million, or $0.27 and $0.36 per share, for thethree and six months ended September 30, 2024, respectively, compared to a non-GAAP net income of less than $0.1 million and a non-GAAP net loss of $2.1 million, or $0.00 and $0.07 per share, for thethree and six months ended September 30, 2023, respectively. The improvement in the non-GAAP net income (loss) for the three and six months ended September 30, 2024 was due to a lower operating loss driven by higher revenues and gross margins. In the three months ended June 30, 2024, we excluded acquisition costs from the reconciliation of GAAP to non-GAAP netincome (loss) as there was no definitive agreement with respect to the acquisition of Megatran as of June 30, 2024.

Current wording

We incurred non-GAAP net income of $6.0 million and $19.3 million, or $0.16 and $0.52 per share, for thethree and nine months ended December 31, 2024, respectively, compared to a 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. The improvement in the non-GAAP net income (loss) for the three and nine months ended December 31, 2024 was due to higher revenues and gross margins.

Previous wording

We have experienced recurring operating losses and, as of September 30, 2024, had an accumulated deficit of $1,064.3 million.

Current wording

We have experienced recurring operating losses and, as of December 31, 2024, had an accumulated deficit of $1,061.8 million.

Previous wording

As described above, on August 1, 2024, we acquired all of the issued and outstanding shares of Megatran, for aggregate consideration in an amount equal to $61.4 million (the “Purchase Price”), which consideration amount was subject to various adjustments set forth in the Stock Purchase Agreement (including those described below) and consisted of: (a) (i) $25.0 million, minus (ii) the Indebtedness (as defined in the Stock Purchase Agreement) outstanding as of immediately prior to the closing, minus (iii) Company Expenses (as defined in the Stock Purchase Agreement) (collectively, the “Cash Purchase Price”); (b) a number of restricted shares (rounded up or down to the nearest whole share, as applicable) (the “Company Shares”) of our common stock equal to the quotient obtained by dividing (x) $31.4 million by (y) the closing price per share of Common Stock on the Nasdaq Global Select Market on the last trading day immediately preceding August 1, 2024; and (c) an additional cash payment equal to $5.0 million, as adjusted pursuant to Sections 5.6(c), (d), and (f) of the Stock Purchase Agreement. Megatran is now a wholly-owned subsidiary of the Company and, together with its wholly-owned subsidiaries and affiliates, is operated and reported as a component of its Grid business unit. On September 23, 2024, the Company paid the Additional Cash Purchase Price to the selling stockholders, which was calculated based on the agreed upon formula, in the amount of $8.3 million.

Current wording

As described above, on August 1, 2024, we acquired all of the issued and outstanding shares of Megatran, for aggregate consideration in an amount equal to $61.4 million (the “Purchase Price”), which consideration amount was subject to various adjustments set forth in the Stock Purchase Agreement (including those described below) and consisted of: (a) (i) $25.0 million, minus (ii) the Indebtedness (as defined in the Stock Purchase Agreement) outstanding as of immediately prior to the closing, minus (iii) Company Expenses (as defined in the Stock Purchase Agreement) (collectively, the “Cash Purchase Price”); (b) a number of restricted shares (rounded up or down to the nearest whole share, as applicable) (the “Company Shares”) of our common stock equal to the quotient obtained by dividing (x) $31.4 million by (y) the closing price per share of Common Stock on the Nasdaq Global Select Market on the last trading day immediately preceding August 1, 2024; and (c) an additional cash payment equal to $5.0 million, as adjusted pursuant to Sections 5.6(c), (d), and (f) of the Stock Purchase Agreement. Megatran is now a wholly-owned subsidiary of the Company and, together with its wholly-owned subsidiaries and affiliates, is operated and reported as a component of its Grid business segment. On September 23, 2024, the Company paid the Additional Cash Purchase Price to the selling stockholders, which was calculated based on the agreed upon formula, in the amount of $8.3 million.

Previous wording

In August 2024, we filed an automatically-effective shelf registration statement on Form S-3 that will expire no later than August 12, 2027 (the “Second Form S-3”). The Second Form S-3 allows us to offer and sell from time-to-time 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. The Second Form S-3 is intended to assist the selling stockholders in the resale of their common stock and to provide us flexibility to conduct registered sales of its securities, subject to market conditions, in order to fund our future capital needs. 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.

Current wording

In August 2024, we filed an automatically-effective shelf registration statement on Form S-3 that will expire no later than August 12, 2027 (the “Second Form S-3”). The Second Form S-3 allows us to offer and sell from time-to-time 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. The Second Form S-3 assisted the Megatran selling stockholders in the resale of their common stock and 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 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.

Previous wording

As of September 30, 2024, we had cash, cash equivalents and restricted cash of $74.8 million, compared to $92.3 million as of March 31, 2024, a decrease of $17.5 million. As of September 30, 2024, wehad $3.9 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 December 31, 2024, we had cash, cash equivalents and restricted cash of $80.0 million, compared to $92.3 million as of March 31, 2024, a decrease of $12.3 million. As of December 31, 2024, wehad $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 six months ended September 30, 2024, net cash provided by operating activities was $16.1 million, compared to cash used in operations of $1.3 million for the six months ended September 30, 2023. The increase in cash flows provided by operating activities in the six months ended September 30, 2024 was due primarily to increased net income, increased deferred revenue, decrease in cash spent on accounts payable and accrued expenses, and a decrease in inventory purchases, and change in fair value of contingent consideration, offset by cash spent on prepaid expenses, deferred income taxes, decreased accounts receivable, and a decrease in operating leases.

Current wording

For the nine months ended December 31, 2024, net cash provided by operating activities was $22.0 million, compared to cash used in operations of $0.1 million for the nine months ended December 31, 2023. The increase in cash flows provided by operating activities in the nine months ended December 31, 2024 was due primarily to increased net income, decrease in cash spent on accounts payable and accrued expenses, and increased deferred revenue, offset by an increase in accounts receivable, and cash spent on inventory purchases, prepaid expenses, and operating leases.

Previous wording

For the six months ended September 30, 2024, net cash used in investing activities was $33.5 million, compared to $0.4 million for the six months ended September 30, 2023. The increase in net cash used in investing activities was primarily due to cash paid for the acquisition of Megatran.

Current wording

For the nine months ended December 31, 2024, net cash used in investing activities was $34.1 million, compared to $0.6 million for the nine months ended December 31, 2023. The increase in net cash used in investing activities was primarily due to cash paid for the acquisition of Megatran.

Previous wording

For the six months ended September 30, 2024, net cash used in financing activities was $0.1 million compared to net cash provided by financing activities of $0.1 million for the six months ended September 30, 2023. The decrease was due to the repurchase of common stock in connection with employee tax obligations upon the vesting of stock awards, offset by proceeds related to ESPP.

Current wording

For the nine months ended December 31, 2024, net cash used in financing activities was $0.1 million compared to net cash provided by financing activities of $0.1 million for the nine months ended December 31, 2023. The decrease was due to the repurchase of common stock in connection with employee tax obligations upon the vesting of stock awards, offset by proceeds related to our ESPP.

Previous wording

As of September 30, 2024, we had $1.5 million of restricted cash included in long-term assets and $1.2 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.

Current wording

As of December 31, 2024, we had $3.5 million of restricted cash included in long-term assets and $1.3 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 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.

Current wording

We believe we have sufficient available liquidity to fund our operations and capital expenditures for the next twelve months. We 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.