Capstone Green Energy Holdings, Inc.

Three Months Ended June 30, 2025 and 2024

The following table summarizes our revenue by geographic markets (in millions):

Revenuefor the three months ended June 30, 2025 increased $12.3 million to $27.9 million from $15.6 million for the three months ended June 30, 2024. The increase was primarily driven by increases in revenue of $14.1 million in the United States and Canada and $0.8 million in Latin America, offset by a decrease in revenue of $1.4 million in Europe, $1.1 million in Asia and Australia and $0.1 million in Middle East and Africa. The increases in the United States and Canada, Latin America and Europe were due to increased microturbine product, parts and rental demand. The decrease in Europe, Asia and Australia were primarily due to decreases in microturbine deliveries for projects in those regions during thethree months ended June 30, 2025.

The following table summarizes our revenue (revenue amounts in millions):

For the three months ended June 30, 2025, revenue from microturbine products and accessories increased $10.3 million, or 191%, to $15.7 million from $5.4 million for the three months ended June 30, 2024. The $10.3 million increase was driven primarily by product mix, with the 4.5 megawatts increase in shipments during the three months ended June 30, 2025, including increased demand for our C1000 turbines, compared to the three months ended June 30, 2024. Average revenue per megawatt shipped was approximately $1.8 million and $1.3 million during the three months ended June 30, 2025 and 2024, respectively. The increase in revenue per megawatt resulted from price increases and product mix.

Parts and service revenue, which are part of our EaaS business line and includes revenue from our spare parts shipments, FPP contracts, and other service revenue, for the three months ended June 30, 2025, was consistent with increased revenues of $0.2 million, or 3%, to $8.0 million from $7.8 million for the three months ended June 30, 2024.

Rentals revenue for three months ended June 30, 2025 increased $1.8 million or 75%, to $4.2 million from $2.4 million for the three months ended June 30, 2024. This increase was driven by growth in rental utilization and increased rental prices.

Sales to Cal Microturbine and Lone Star Power Solutions, LLC (“Lone Star”), two of the Company’s domestic distributors, accounted for 47% and 10% of revenue for the three months ended June 30, 2025, respectively. Lone Star, Cal Microturbine and E-Finity Distributed Generation (“E-Finity”), three of the Company’s domestic distributors and Optimal Group Australia Pty Ltd, one of the Company’s international distributors, accounted for 16%, 13%, 11% and 11% of revenue for the three months ended June 30, 2024, respectively.

Gross Profit Cost of goods sold includes direct material costs, production and service center labor and overhead, inventory charges and provision for estimated product warranty expenses. Gross profit was $7.6 million, or 27% of revenue for the three months ended June 30, 2025, compared to a gross profit of $3.8 million, or 24% of revenue for the three months ended June 30, 2024. The improvement was primarily the result of an increase in product sales volume and the full effect of an increase in pricing and decreases in production and service center labor and overhead expenses. Effective March 2024, we increased our sales prices and we are continually negotiating to reduce material costs with vendors.

The following table summarizes our gross profit (in millions except percentages):

The improvement of $1.8 million in product and accessories gross profit was primarily due to higher product pricing, improved cost efficiencies, high volume and product mix.

Product and accessories gross margin as a percentage of product and accessories revenue improved to 8% during the three months ended June 30, 2025, from negative 11% during the three months ended June 30, 2024, primarily due to higher product volume and revenue for the three months ended June 30, 2025. Parts and services gross margin as a percentage of parts and service revenue decreased to 53% during the three months ended June 30, 2025, compared to 56% during the three months ended June 30, 2024, primarily as a result additional cost for service during the three months ended June 30, 2025. Rentals gross margin as a percentage of rental revenue increased to 52% for the three months ended June 30, 2025, compared to 0% for the three months ended June 30, 2024, primarily due to increased rental pricing and utilization.

Research and Development (“R&D”) Expenses R&D expenses were $0.8 million and $0.5 million during the three months ended June 30, 2025 and 2024, respectively, and was 3% and 4% of revenue for the three months ended June 30, 2025, and 2024, respectively. During the three months ended June 30, 2025 as R&D programs for new product development and product enhancements expanded.

Selling, General, and Administrative (“SG&A”) Expenses SG&A expenses were $6.9 million and $6.8 million during the three months ended June 30, 2025 and 2024, respectively, and was 25% and 43% of revenue for the three months ended June 30, 2025, and 2024, respectively.

Other Income Other income was $0.4 million and $0.6 million during the three months ended June 30, 2025 and 2024.

Interest Income. Interest income was $0.1 million and less than $0.1 million during the three months ended June 30, 2025 and 2024, respectively..

Interest Expense Interest expense was $1.0 million during both the three months ended June 30, 2025 and 2024.

Liquidity and Capital Resources

Cash Flows

Our cash requirements depend on many factors, including the execution of our business strategy and plan. Ourcash and cash equivalents balance decreased $2.0 million during the three months ended June 30, 2025, compared to an increase in cash of $1.9 million during the three months ended June 30, 2024. The decrease in cash during the three months ended June 30, 2025 was primarily due to net cash used in operating activities.

Operating Activities During the three months ended June 30, 2025, net cash used by operating activities was $1.6 million, consisting of a net loss for the period of $0.7 million, changes in operating assets and liabilities of $4.0 million offset by non-cash adjustments, primarily representing depreciation and amortization, non-cash lease expense, stock based compensation and paid-in-kind interest expense, totaling $3.1 million.

For the three months ended June 30, 2024, net cash provided by operating activities was $2.1 million, consisting of net loss of $3.9 million, offset by changes in operating assets and liabilities of $2.8 million and non-cash adjustments, primarily representing depreciation and amortization, non-cash lease expense and paid-in-kind interest expense, of $3.2 million.

The following is a summary of the significant sources (uses) of cash from operating activities (in millions):

The $3.4 million increase in use of cash in accounts receivable resulted from the timing of sales in the three months ended June 30, 2025 and 2024. The $1.8 million decrease in cash provided by accounts payable resulted from the timing of payment of trade accounts. The $0.5 million increase in cash provided by accrued expenses was primarily due to a decrease in legal accrual and accrued sponsorship related to litigation that has since been resolved. The $0.2 million decrease in use of cash by operating lease liability was primarily due to a decrease in lease liability. The $0.6 million decrease in cash provided from prepaid and other assets is primarily the result of usage of prepaid inventory. The $1.5 million increase in cash provided by FFP liability was primary driven by an increase in value of new claims outpacing the fulfillment of claims. The $3.2 million increase in cash used in other operating assets and liabilities, was primarily driven by an increase in cash used in deferred revenue of $3.8 million primarily driven by increased shipments in the three months ended June 30, 2025 compared to the three months ended June 30, 2024, lowering attributable customer deposits, and decrease in FPP deferred revenue, offset by $0.6 increase in cash provided in accrued salaries and wages and other long term liabilities primarily driven by the Company’s Annual Incentive Program (“AIP”) bonus accrual in the three months ended June 30, 2025. There were no significant changes in inventory or lease receivable.

Investing Activities Net cash used in investing activities was $0.1 million during the three months ended June 30, 2025 and 2024, respectively, primarily due to investments in operating assets.

Financing Activities Net cash used in financing activities of $0.3 million and $0.1 million during the three months ended June 30, 2025 and 2024, respectively, was used for repayment of finance lease obligations. Additionally, during the three months ended June 30, 2025 there was the accumulation of treasury stock resulting from the tax withholdings of employee stock vesting.

Debt Refer to Note 8— Debt in the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for information related to our notes.

Lease Commitments Refer to Note 9— Leases in the Notes to Condensed Consolidated Financial Statements for information related to our leases.

Going Concern In connection with the preparation of the Condensed Consolidated Financial Statements for the three months ended June 30, 2025, management evaluated whether there were conditions and events, considered in the aggregate, that raised substantial doubt about the Company’s ability to meet its obligations as they become due over the next twelve months from the date of the issuance of the financial statements. As of June 30, 2025, the Company had cash

of $6.6 million and a working capital deficit of $14.2 million. The Company incurred a net loss of $0.7 million during the three months ended June 30, 2025.

A robust plan to improve the Company’s future financial performance has been developed. The plan includes multiple process improvement workstreams directed to drive operational and financial performance. The process improvement initiatives are supported with external resources with the needed specific level of expertise. The plan includes cost reduction in products, services and operating expenses, margin expansion through price increases, and sales volume initiatives focused on improving the Company’s liquidity. Achieving the targeted product cost reductions has risk, and is being challenged by the current geopolitical environment, including the impact of tariffs. There is no guarantee that such steps will be successful, or to result in our ability to meet our payment obligations coming due within the twelve month period after the date of this report.

The Company has initiated financing discussions with its advisors to refinance the New Money Note and add additional liquidity. There is not guarantee that the Company will be successful in it is financing efforts.

Given the Company’s current cash position, lack of liquidity, short term debt repayments, limits to accessing capital and debt funding options and current economic and market risks, there exists substantial doubt regarding the Company’s ability to continue as a going concern and its ability to meet its financial obligations as they become due over the next twelve months from the date of issuance of the financial statements as of, and for the period ended June 30, 2025

New Accounting PronouncementsRefer to Note 3— Recently Issued Accounting Pronouncements in the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for information regarding new accounting standards.