Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Sep. 30, 2017 | Oct. 27, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | CAPSTONE TURBINE Corp | |
Entity Central Index Key | 1,009,759 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --03-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 46,742,619 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2017 | Mar. 31, 2017 |
Current Assets: | ||
Cash and cash equivalents | $ 10,156 | $ 14,191 |
Restricted cash | 5,000 | 5,514 |
Accounts receivable, net of allowances of $6,773 at September 30, 2017 and $6,845 at March 31, 2017 | 13,248 | 17,003 |
Inventories | 16,274 | 14,538 |
Prepaid expenses and other current assets | 2,545 | 3,073 |
Total current assets | 47,223 | 54,319 |
Property, plant and equipment, net | 2,232 | 2,115 |
Non-current portion of inventories | 994 | 961 |
Intangible assets, net | 523 | 651 |
Other assets | 331 | 225 |
Total assets | 51,303 | 58,271 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 14,096 | 14,719 |
Accrued salaries and wages | 1,834 | 1,819 |
Accrued warranty reserve | 2,562 | 3,766 |
Deferred revenue | 4,999 | 5,050 |
Revolving credit facility | 9,575 | 11,533 |
Current portion of notes payable and capital lease obligations | 14 | 302 |
Total current liabilities | 33,080 | 37,189 |
Long-term portion of notes payable and capital lease obligations | 20 | 26 |
Other long-term liabilities | 136 | 158 |
Total liabilities | 33,236 | 37,373 |
Commitments and contingencies (Note 15) | ||
Stockholders' Equity: | ||
Preferred stock, $.001 par value; 10,000,000 shares authorized; none issued | ||
Common stock, $.001 par value; 515,000,000 shares authorized, 44,959,744 shares issued and 44,813,869 shares outstanding at September 30, 2017; 38,920,174 shares issued and 38,803,630 shares outstanding at March 31, 2017 | 45 | 39 |
Additional paid-in capital | 879,639 | 874,697 |
Accumulated deficit | (859,959) | (852,199) |
Treasury stock, at cost; 145,875 shares at September 30, 2017 and 116,544 shares at March 31, 2017 | (1,658) | (1,639) |
Total stockholders' equity | 18,067 | 20,898 |
Total liabilities and stockholders' equity | $ 51,303 | $ 58,271 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Mar. 31, 2017 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowances (in dollars) | $ 6,773 | $ 6,845 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 515,000,000 | 515,000,000 |
Common stock, shares issued | 44,959,744 | 38,920,174 |
Common stock, shares outstanding | 44,813,869 | 38,803,630 |
Treasury stock, shares | 145,875 | 116,544 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenue: | ||||
Product, accessories and parts | $ 16,005 | $ 11,518 | $ 31,496 | $ 27,301 |
Service | 3,769 | 3,480 | 7,518 | 6,762 |
Total revenue | 19,774 | 14,998 | 39,014 | 34,063 |
Cost of goods sold: | ||||
Product, accessories and parts | 13,549 | 11,341 | 27,586 | 24,978 |
Service | 3,209 | 2,987 | 6,173 | 5,416 |
Total cost of goods sold | 16,758 | 14,328 | 33,759 | 30,394 |
Gross margin | 3,016 | 670 | 5,255 | 3,669 |
Operating expenses: | ||||
Research and development | 1,139 | 1,350 | 2,288 | 2,972 |
Selling, general and administrative | 4,796 | 5,036 | 9,757 | 10,782 |
Total operating expenses | 5,935 | 6,386 | 12,045 | 13,754 |
Loss from operations | (2,919) | (5,716) | (6,790) | (10,085) |
Other income (expense) | 14 | (27) | 4 | (43) |
Interest income | 7 | 9 | 12 | |
Interest expense | (98) | (129) | (319) | (263) |
Change in warrant valuation | (657) | (657) | ||
Loss before income taxes | (3,660) | (5,865) | (7,753) | (10,379) |
Provision for income taxes | 7 | 7 | 3 | |
Net loss | $ (3,667) | $ (5,865) | $ (7,760) | $ (10,382) |
Net loss per common share-basic and diluted (in dollars per share) | $ (0.09) | $ (0.19) | $ (0.18) | $ (0.36) |
Weighted average shares used to calculate basic and diluted net loss per common share (in shares) | 42,941 | 30,498 | 42,606 | 28,843 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (7,760,000) | $ (10,382,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 583,000 | 802,000 |
Amortization of deferred financing costs | 133,000 | 86,000 |
Reduction in accounts receivable allowances | (22,000) | (1,396,000) |
Inventory provision | 590,000 | 483,000 |
Provision for warranty expenses | 995,000 | 775,000 |
Loss on disposal of equipment | 26,000 | 170,000 |
Stock-based compensation | 307,000 | 479,000 |
Change in warrant valuation | 657,000 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 3,778,000 | 2,221,000 |
Inventories | (2,360,000) | (1,442,000) |
Prepaid expenses and other current assets | 266,000 | 322,000 |
Accounts payable and accrued expenses | (790,000) | (1,156,000) |
Accrued salaries and wages and long term liabilities | (7,000) | (55,000) |
Accrued warranty reserve | (2,199,000) | (1,087,000) |
Deferred revenue | (49,000) | 153,000 |
Net cash used in operating activities | (5,852,000) | (10,027,000) |
Cash Flows from Investing Activities: | ||
Expenditures for property and equipment | (521,000) | (84,000) |
Net cash used in investing activities | (521,000) | (84,000) |
Cash Flows from Financing Activities: | ||
Net repayments of revolving credit facility | (1,958,000) | (3,281,000) |
Repayment of notes payable and capital lease obligations | (183,000) | (298,000) |
Cash used in employee stock-based transactions | (22,000) | (17,000) |
Net proceeds from issuance of common stock and warrants | 3,987,000 | 13,113,000 |
Net cash provided by financing activities | 1,824,000 | 9,517,000 |
Net decrease in Cash, Cash Equivalents and Restricted Cash | (4,549,000) | (594,000) |
Cash, Cash Equivalents and Restricted Cash, Beginning of Period | 19,705,000 | 16,706,000 |
Cash, Cash Equivalents and Restricted Cash, End of Period | 15,156,000 | 16,112,000 |
Cash paid during the period for: | ||
Interest | 205,000 | 87,000 |
Income taxes | 7,000 | |
Supplemental Disclosures of Non-Cash Information: | ||
Acquisition of property and equipment through accounts payable | $ 99,000 | $ 27,000 |
Business and Organization
Business and Organization | 6 Months Ended |
Sep. 30, 2017 | |
Business and Organization | |
Business and Organization | 1. Business and Organization Capstone Turbine Corporation (the “Company”) develops, manufactures, markets and services microturbine technology solutions for use in stationary distributed power generation applications, including cogeneration (combined heat and power (“CHP”), integrated combined heat and power (“ICHP”), and combined cooling, heat and power (“CCHP”)), renewable energy, natural resources, critical power supply, transportation and marine. In addition, the Company’s microturbines can be used as battery charging generators for hybrid electric vehicle applications. The Company was organized in 1988 and has been commercially producing its microturbine generators since 1998. |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Sep. 30, 2017 | |
Basis of Presentation | |
Basis of Presentation | 2. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“generally accepted accounting principles” or “GAAP”) for interim financial information and the instructions to Form 10-Q and Regulation S-X promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). They do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The condensed consolidated balance sheet at March 31, 2017 was derived from audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended March 31, 2017. In the opinion of management, the interim condensed consolidated financial statements include all adjustments (including normal recurring adjustments) necessary for a fair presentation of the financial condition, results of operations and cash flows for such periods. Results of operations for any interim period are not necessarily indicative of results for any other interim period or for the full year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended March 31, 2017. This Quarterly Report on Form 10-Q (this “Form 10-Q”) refers to the Company’s fiscal years ending March 31 as its “Fiscal” years. Evaluation of Ability to Maintain Current Level of Operations In connection with preparing the consolidated financial statements for the second quarter of Fiscal 2018, 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 became due for the next twelve months from the date of issuance of its second quarter of Fiscal 2018 financial statements. Management assessed that there were such conditions and events, including a history of recurring operating losses, negative cash flows from operating activities, the continued negative impact caused by the volatility of the global oil and gas markets, a strong U.S. dollar (making our products more expensive overseas) and ongoing geopolitical tensions in Russia, North Africa and the Middle East. Cash used for working capital during the second quarter of Fiscal 2018 was higher than planned, primarily as a result of higher finished goods inventory. Additionally, the Company did not fully achieve its planned number of product shipments during the second quarter of Fiscal 2018, resulting in lower than expected revenue. The Company incurred a net loss of $3.7 million and used cash in operating activities of $5.1 million for the second quarter of Fiscal 2018. As of September 30, 2017, the Company had cash, cash equivalents and restricted cash of $15.2 million, and outstanding borrowings under its credit facility of $9.6 million. Management evaluated these conditions in relation to the Company’s ability to meet its obligations as they become due. The Company’s ability to continue current operations and to execute on management’s plans is dependent on its ability to generate cash flows from operations. Management believes that the Company will continue to make progress on its path to profitability by continuing to lower its operating costs and to develop its geographical and vertical markets. The Company may seek to raise funds by selling additional securities (through the at-the-market offering or otherwise) to the public or to selected investors or by obtaining additional debt financing. There is no assurance that the Company will be able to obtain additional funds on commercially favorable terms or at all. If the Company raises additional funds by issuing additional equity or convertible debt securities, the fully diluted ownership percentages of existing stockholders will be reduced. In addition, any equity or debt securities that the Company would issue may have rights, preferences or privileges senior to those of the holders of its common stock. On June 2, 2017, the Company, entered into two secured credit facilities (the “Bridge Bank Credit Agreements”) with Western Alliance Bank through its Bridge Bank division (“Bridge Bank”), with credit support provided by the Export-Import Bank of the United States through its working capital guarantee program. Under the terms of the Bridge Bank Credit Agreements, the Company may borrow up to $12.0 million on a revolving basis depending on, among other factors, the amount of its eligible inventory and accounts receivable. The Bridge Bank Credit Agreements are for a two-year period ending June 2, 2019. See Note 11—Revolving Credit Facility, for discussion of the credit facilities with Bridge Bank. The Company maintained two Credit and Security Agreements, with Wells Fargo Bank, National Association (“Wells Fargo”), which provided the Company with a credit facility up to $20.0 million in the aggregate. Upon closing with Bridge Bank, the Company’s existing credit facilities with Wells Fargo, were paid off in full. Based on the Company’s current operating plan, management anticipates that, given current working capital levels, current financial projections, the ability to borrow under its credit facility with Bridge Bank, net proceeds from exercise of Series A warrants and the funds expected to be received from the new oil and gas sector distributor in Russia, the Company will be able to meet its financial obligations as they become due over the next twelve months from the date of issuance of its second quarter of Fiscal 2018 financial statements. See Note 17— Subsequent Events, for discussion with respect to the exercise of Series A warrants and new Russian distributor. The consolidated financial statements include the accounts of the Company, Capstone Turbine International, Inc., its wholly owned subsidiary that was formed in June 2004 and Capstone Turbine Financial Services, LLC, its wholly owned subsidiary that was formed in October 2015, after elimination of inter-company transactions. |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 6 Months Ended |
Sep. 30, 2017 | |
Recently Issued Accounting Standards | |
Recently Issued Accounting Standards | 3. Recently Issued Accounting Standards In July 2017, the Financial Accounting Standards Board (“FASB”) issued a two-part Accounting Standards Update (“ASU”) No. 2017-11, I. Accounting for Certain Financial Instruments With Down Round Features and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests With a Scope Exception (“ASU 2017-11”). ASU 2017-11 amends guidance in FASB ASC 260, Earnings Per Share, FASB ASC 480, Distinguishing Liabilities from Equity, and FASB ASC 815, Derivatives and Hedging. The amendments in Part I of ASU 2017-11 change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. The amendments in Part II of ASU 2017-11 re-characterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. ASU 2017-11 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The Company adopted ASU 2017-11 for the three months ended June 30, 2017, and retrospectively applied ASU 2017-11 as required. See Note 10—Fair Value Measurements for further discussion on changes as a result of the adoption of ASU 2017-11. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), (“ASU 2016-02”). The purpose of ASU 2016-02 is to provide financial statement users a better understanding of the amount, timing, and uncertainty of cash flows arising from leases. The adoption of ASU 2016-02 will result in the recognition of a right-of-use asset and a lease liability for most operating leases. New disclosure requirements include qualitative and quantitative information about the amounts recorded in the financial statements. In September 2017, the FASB issued ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842), which provides additional implementation guidance on the previously issued ASU 2016-02 Leases (Topic 842). ASU 2016-02 requires a lessee to recognize assets and liabilities on the balance sheet for leases with lease terms greater than 12 months. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018. ASU 2016-02 requires a modified retrospective transition by means of a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year in which the guidance is effective with the option to elect certain practical expedients. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2016-02 on its consolidated financial position and results of operations. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory (“ASU 2015-11”). ASU 2015-11 requires inventory that is recorded using the first-in, first-out method to be measured at the lower of cost or net realizable value. ASU 2015-11 is effective for annual and interim periods beginning after December 15, 2016, and should be applied prospectively with early adoption permitted at the beginning of an interim or annual reporting period. The Company adopted ASU 2015-11 with no impact on its consolidated financial position or results of operations. Revenue Recognition Related ASUs: In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). ASU 2014-09 supersedes nearly all existing revenue recognition guidance under GAAP. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued FASB ASU No. 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date (“ASU 2014-09”), which deferred the effective date of ASU 2014-09 by one year. ASU 2014-09 is now effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, using one of two retrospective application methods. Early application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. In March 2016, the FASB issued FASB ASU No. 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations (“ASU 2016-08”). ASU 2016-08 clarifies the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing (“ASU 2016-10”). ASU 2016-10 clarifies the implementation guidance for identifying performance obligations and determining when to recognize revenue on licensing agreements for intellectual property. In May 2016, the FASB issued ASU No. 2016-11, Revenue Recognition and Derivatives and Hedging: Rescission of SEC Guidance Because of ASU 2014-09 and ASU 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting (“ASU 2016-11”). ASU 2016-11 rescinds certain SEC staff comments previously made in regard to these ASU’s. In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients (“ASU 2016-12”) that provide guidance on assessing collectability, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition. In December 2016, the FASB issued ASU 2016-20, Technical Corrections and Improvements to ASU 2014-09. The amendments in ASU 2014-09 affect narrow aspects of the guidance in ASU 2014-09, which is not yet effective. The amendments in ASU 2014-09 address loan guarantee fees, impairment testing of contract costs, provisions for losses on construction-type and production-type contracts, and various disclosures. In September 2017, the FASB issued ASU 2017-13, “Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments”(“ASU 2017-13”) The amendments in ASU 2017-13 amends the early adoption date option for certain companies related to the adoption of ASU 2014-09 and ASU 2016-02. The Company is evaluating its existing revenue recognition policies and the impact of ASU 2014-09, ASU 2015-14, ASU 2016-08, ASU 2016- 10, ASU 2016-11, ASU 2016-12 and ASU 2016-20, if any, on its financial position and results of operations. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements for ASU 2014-09. The Company will be required to adopt the revenue recognition standard in annual reporting periods beginning after December 15, 2017 (fiscal year ending March 31, 2019) and interim periods within those annual periods. |
Customer Concentrations and Acc
Customer Concentrations and Accounts Receivable | 6 Months Ended |
Sep. 30, 2017 | |
Customer Concentrations and Accounts Receivable | |
Customer Concentrations and Accounts Receivable | 4. Customer Concentrations and Accounts Receivable Sales to Reliable Secure Power Systems, (“RSP”), Regatta Solutions, Inc. (“Regatta”) and E-Finity Distributed Generation, LLC (“E-Finity”), three of the Company’s domestic distributors, and Optimal Group Australia Pty Ltd, one of the Company’s Australian distributors and IBT Europe GmbH (“IBT”), one of the Company’s European distributors, accounted for 12%, 11%, 11%, 11% and 10%, respectively, of revenue for the three months ended September 30, 2017. Sales to BPC Engineering (“BPC”), one of the Company’s Russian distributors, accounted for 11% of revenue for the three months ended September 30, 2016. For the six months ended September 30, 2017, E-Finity, Horizon Power Systems (“Horizon”) and Optimal accounted for 13%, 12% and 10% of revenue, respectively. For the six months ended September 30, 2016, Regatta Solutions, Inc. (“Regatta”), one of the Company’s domestic distributors, accounted for 11% of revenue. Additionally, E-Finity, RSP, Regatta and IBT accounted for 16%, 16%, 13% and 11%, respectively, of net accounts receivable as of September 30, 2017. E-Finity, Dtc Soluciones Inmobiliarias S.A. de C.V. (“DTC”), one of the Company’s Mexican distributors and RSP accounted for 29%, 12% and 10%, respectively, of net accounts receivable as of March 31, 2017. The Company recorded a net bad debt recovery of approximately $9,000 and $22,000 during the three and six months ended September 30, 2017, respectively. As of September 30, 2017, the Company collected approximately $1.7 million from BPC on their accounts receivable allowance of approximately $8.1 million. The Company recorded net bad debt recovery of approximately $0.5 million for the three months ended September 30, 2016. During the six months ended September 30, 2016, the Company recorded approximately $1.4 million in net bad debt recovery, which was previously reserved during Fiscal 2015, for cash received primarily from BPC and Electro Mecanique Industries, one of the Company’s distributors in the Middle East and Africa. |
Inventories
Inventories | 6 Months Ended |
Sep. 30, 2017 | |
Inventories | |
Inventories | 5. Inventories Inventories are valued on a first in first out (“FIFO”) basis and lower of cost or net realizable value and consisted of the following as of September 30, 2017 and March 31, 2017 (in thousands): September 30, March 31, 2017 2017 Raw materials $ 14,436 $ 15,035 Work in process 290 — Finished goods 2,542 464 Total 17,268 15,499 Less non-current portion (994) (961) Current portion $ 16,274 $ 14,538 The non-current portion of inventories represents the portion of the inventories in excess of amounts expected to be sold or used in the next twelve months. The non-current inventories are primarily comprised of repair parts for older generation products that are still in operation but are not technologically compatible with current configurations. The weighted average age of the non-current portion of inventories on hand as of September 30, 2017 is 1.6 years. The Company expects to use the non-current portion of the inventories on hand as of September 30, 2017 over the periods presented in the following table (in thousands): Non-current Inventory Balance Expected Expected Period of Use to be Used 13 to 24 months $ 358 25 to 36 months 636 Total $ 994 |
Property, Plant and Equipment
Property, Plant and Equipment | 6 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment | |
Property, Plant and Equipment | 6. Property, Plant and Equipment Property, plant and equipment consisted of the following as of September 30, 2017 and March 31, 2017 (in thousands): September 30, March 31, 2017 2017 Machinery, rental equipment, equipment, automobiles and furniture $ 16,050 $ 17,657 Leasehold improvements 9,828 9,870 Molds and tooling 2,929 2,866 28,807 30,393 Less, accumulated depreciation (26,575) (28,278) Total property, plant and equipment, net $ 2,232 $ 2,115 Depreciation expense for property and equipment was $0.2 million and $0.4 million for the three and six months ended September 30, 2017, respectively. The Company recorded depreciation expense of $0.3 million and $0.6 million for the three and six months ended September 30, 2016, respectively. |
Intangible Assets
Intangible Assets | 6 Months Ended |
Sep. 30, 2017 | |
Intangible Assets | |
Intangible Assets | 7. Intangible Assets Intangible assets consisted of the following as of September 30, 2017 and March 31, 2017 (in thousands): September 30, 2017 Weighted Average Intangible Amortization Assets, Accumulated Intangible Period Gross Amortization Assets, Net Manufacturing license 17 years $ 3,700 $ 3,700 $ — Technology 10 years 2,240 1,717 523 Trade name & parts, service and TA100 customer relationships 1.2 to 5 years 1,766 1,766 — Total $ 7,706 $ 7,183 $ 523 March 31, 2017 Weighted Average Intangible Amortization Assets, Accumulated Intangible Period Gross Amortization Assets, Net Manufacturing license 17 years $ 3,700 $ 3,684 $ 16 Technology 10 years 2,240 1,605 635 Trade name & parts, service and TA100 customer relationships 1.2 to 5 years 1,766 1,766 — Total $ 7,706 $ 7,055 $ 651 Amortization expense for the intangible assets was $0.1 million for each of the three and six months ended September 30, 2017 and 2016, respectively. Expected future amortization expense of intangible assets as of September 30, 2017 is as follows (in thousands): Amortization Year Ending March 31, Expense 2018 (remainder of fiscal year) 112 2019 224 2020 187 Thereafter — Total expected future amortization $ 523 The manufacturing license provides the Company with the ability to manufacture recuperator cores previously purchased from Solar Turbines Incorporated (“Solar”). The Company is required to pay a per-unit royalty fee over a seventeen-year period for cores manufactured and sold by the Company using the technology. Royalties of approximately $7,200 and $6,400 were earned by Solar for the three months ended September 30, 2017 and 2016, respectively. Royalties of approximately $13,700 and $14,700 were earned by Solar for the six months ended September 30, 2017 and 2016, respectively. Earned royalties of approximately $7,200 and $10,000 were unpaid as of September 30, 2017 and March 31, 2017, respectively, and are included in accounts payable and accrued expenses in the accompanying balance sheets. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Sep. 30, 2017 | |
Stock-Based Compensation | |
Stock-Based Compensation | 8. Stock-Based Compensation The following table summarizes, by statement of operations line item, stock-based compensation expense for the Company’s three and six months ended September 30, 2017 and 2016 (in thousands): Three Months Ended Six Months Ended September 30, September 30, 2017 2016 2017 2016 Cost of goods sold $ 18 $ 14 $ 38 $ 29 Research and development 5 13 12 16 Selling, general and administrative 130 214 257 434 Stock-based compensation expense $ 153 $ 241 $ 307 $ 479 Stock Plans 2000 Equity Incentive Plan and 2017 Equity Incentive Plan In June 2000, the Company adopted the 2000 Equity Incentive Plan (the “2000 Plan”). The 2000 Plan provides for a total maximum aggregate number of shares which may be issued of 1,849,000 shares. In June 2017, the Company adopted the Capstone Turbine Corporation 2017 Equity Incentive Plan (the “2017 Plan”) which was approved by the stockholders at the Company’s 2017 annual meeting of stockholders on August 31, 2017. The 2017 Plan provides for awards of up to 3,000,000 shares of common stock. The 2017 Plan is administered by the Compensation Committee designated by the Board of Directors (the “Compensation Committee”). The Compensation Committee’s authority includes determining the number of incentive awards and vesting provisions. Stock Options The Company issued stock options under the 2000 Plan and issues stock options under the 2017 Plan to employees, non-employee directors and consultants that vest and become exercisable over a four-year period and expire 10 years after the grant date. The Company uses a Black-Scholes valuation model to estimate the fair value of the options at the grant date, and compensation cost is recorded on a straight-line basis over the vesting period. During the year ended March 31, 2017, the Company established an accounting policy election to assume zero forfeiture for stock options and account for forfeitures when they occur. All options are subject to the following vesting provisions: one-fourth vest one year after the issuance date and 1/48th vest on the first day of each full month thereafter, so that all options will be vested on the first day of the 48th month after the grant date. Information relating to stock options for the Company’s six months ended September 30, 2017 is as follows: Weighted- Average Weighted- Remaining Aggregate Average Contractual Intrinsic Shares Exercise Price Term Value (in years) Options outstanding at March 31, 2017 314,537 $ 15.48 Granted — $ — Exercised — $ — Forfeited, cancelled or expired (4,000) $ 24.25 Options outstanding at September 30, 2017 310,537 $ 15.37 — Options fully vested at September 30, 2017 and those expected to vest beyond September 30, 2017 310,537 $ 15.37 — Options exercisable at September 30, 2017 245,693 $ 18.98 — Black-Scholes Model Valuation Assumptions There were no stock options granted during either the three or six months ended September 30, 2017. The Company calculated the estimated fair value of each stock option granted during the three and six months ended September 30, 2016 on the date of grant using the Black-Scholes option-pricing model and the following weighted-average assumptions: Three and Six Months Ended September 30, 2016 Risk-free interest rates 1.3 % Expected lives (in years) 5.7 Dividend yield — % Expected volatility 133.9 % Weighted average grant date fair value of options granted during the period $ 1.52 The Company’s computation of expected volatility for the three and six months ended September 30, 2016 was based on historical volatility. The expected life, or term, of options granted is derived from historical exercise behavior and represents the period of time that stock option awards are expected to be outstanding. Management has selected a risk-free rate based on the implied yield available on U.S. Treasury Securities with a maturity equivalent to the options’ expected term. The Company recorded expense of approximately $8,000 and $3,000 associated with its stock options during the three months ended September 30, 2017 and 2016, respectively. The Company recorded expense of approximately $17,000 and $3,000 associated with its stock options during the six months ended September 30, 2017 and 2016, respectively. As of September 30, 2017, there was approximately $0.1 million of total compensation cost related to unvested stock option awards that is expected to be recognized as expense over a weighted average period of 2.9 years. Restricted Stock Units and Performance Restricted Stock Units The Company issued restricted stock units under the 2000 Plan and issues restricted stock units under the 2017 Plan to employees, non-employee directors and consultants. The restricted stock units are valued based on the closing price of the Company’s common stock on the date of issuance, and compensation cost is recorded on a straight-line basis over the vesting period. During the fiscal year ended March 31, 2017, the Company established an accounting policy election to assume zero forfeiture for restricted stock units and account for forfeitures when they occur. The restricted stock units vest in equal installments over a period of four years. For restricted stock units with four year vesting, one-fourth vest annually beginning one year after the issuance date. The restricted stock units issued to non-employee directors vest one year after the issuance date. The following table outlines the restricted stock unit and performance restricted stock unit (“PRSU”) activity: Weighted Average Grant Date Fair Restricted Stock and Performance Restricted Stock Units Shares Value Nonvested restricted stock units outstanding at March 31, 2017 316,709 $ 2.85 Granted 474,848 0.64 Vested and issued (212,924) 2.76 Forfeited (9,513) 2.49 Nonvested restricted stock units outstanding at September 30, 2017 569,120 1.05 Restricted stock units expected to vest beyond September 30, 2017 569,097 $ 1.05 The following table provides additional information on restricted stock units for the three and six months ended September 30, 2017 and 2016: Three Months Ended Six Months Ended September 30, September 30, 2017 2016 2017 2016 Restricted stock compensation expense (in thousands) $ 144 $ 188 $ 287 $ 375 Aggregate fair value of restricted stock units vested and issued (in thousands) $ 130 $ 85 $ 137 $ 107 Weighted average grant date fair value of restricted stock units granted during the period $ 0.62 $ 1.71 $ 0.67 $ 1.71 As of September 30, 2017, there was approximately $0.5 million of total compensation cost related to unvested restricted stock units that is expected to be recognized as expense over a weighted average period of 1.2 years. Restricted Stock Awards The Company issued restricted stock awards under the 2000 Plan and issues restricted stock awards under the 2017 Plan to employees and non-employee directors. During the three and six months ended September 30, 2017 and 2016 the Company granted stock awards to non-employee directors who elected to take payment of all or any part of the directors’ fees in stock in lieu of cash. The following table outlines the restricted stock award activity for the three and six months ended September 30, 2017 and 2016: Three Months Ended Six Months Ended September 30, September 30, 2017 2016 2017 2016 Restricted stock awards compensation expense (in thousands) $ 1 $ 50 $ 3 $ 101 Restricted stock awards granted 1,953 29,910 3,969 62,111 Weighted average grant date fair value of restricted stock awards granted during the period $ 0.64 $ 1.69 $ 0.63 $ 1.63 For each term of the Board of Directors (beginning on the date of an annual meeting of stockholders and ending on the date immediately preceding the next annual meeting of stockholders), a non-employee director may elect to receive a stock award in lieu of all or any portion of their annual retainer or committee fee cash payment. The shares of stock were valued based on the closing price of the Company’s common stock on the date of grant. Employee Stock Purchase Plan In June 2000, the Company adopted the Employee Stock Purchase Plan (the “ESPP”). The ESPP provides for the granting of rights to purchase common stock to regular full and part-time employees or officers of the Company and its subsidiaries. In June 2017, the Board of Directors unanimously approved an amendment and restatement to the ESPP which was approved by the stockholders at the Company’s annual meeting of stockholders on August 31, 2017. Prior to the current amendment, 70,000 shares of the Company’s common stock had been reserved for issuance. As amended, the ESPP will continue by its terms and will increase the number of shares of the Company’s common stock available by 500,000 shares which will reserve for issuance a total of 570,000 shares of common stock. Under the ESPP, shares of the Company’s common stock will be issued upon exercise of the purchase rights. The ESPP will continue by its terms through June 30, 2020, unless terminated sooner. Grants outside of 2000 Plan and 2017 Plan As of September 30, 2017, the Company had outstanding 88,930 non-qualified common stock options and 11,115 restricted stock units issued outside of the 2017 Plan. The Company granted these stock options and restricted stock units during the three months ended September 30, 2016 as inducement grants to the new Vice President, Manufacturing of the Company, with exercise prices or values, as applicable, based on the fair market value of the Company’s common stock on the grant date. Although the options and restricted stock units were not granted under the 2000 Plan and 2017 Plan, they are governed by terms and conditions identical to those under the 2000 Plan and 2017 Plan. All options are subject to the following vesting provisions: one-fourth vest one year after the issuance date and 1/48th vest on the first day of each full month thereafter, so that all options will be vested on the first day of the 48th month after the grant date. All outstanding options have a contractual term of ten years. The restricted stock units vest in equal installments over a period of four years. Stockholder Rights Plan On May 6, 2016, the Company entered into Amendment No. 5 (the “Amendment”) to the Rights Agreement, dated as of July 7, 2005, as amended by Amendment No. 1, dated as of July 3, 2008, Amendment No. 2, dated as of June 9, 2011, Amendment No. 3, dated as of July 1, 2014 and Amendment No. 4, dated as of August 5, 2014, (the “Original Rights Agreement”) between the Company and Computershare Inc. The Amendment accelerated the expiration of the Company’s preferred share purchase rights (the “Original Rights”) from 5:00 p.m., California time, on the 30th day after the Company’s 2017 annual meeting of stockholders to 5:00 p.m., California time, on May 6, 2016, and had the effect of terminating the Original Rights Agreement on that date. At the time of the termination of the Original Rights Agreement, all of the Original Rights distributed to holders of the Company’s common stock pursuant to the Original Rights Agreement expired. On May 6, 2016, the Company entered into a rights agreement (the “NOL Rights Agreement”) with Computershare Inc., as rights agent. In connection with the NOL Rights Agreement, the Company’s Board of Directors authorized and declared a dividend distribution of one preferred stock purchase right (a “New Right”) for each share of the Company’s common stock authorized and outstanding. Each New Right entitles the registered holder to purchase from the Company a unit consisting of one one-thousandth of a share of Series B Junior Participating Preferred Stock, par value $0.001 per share, at a purchase price of $8.76 per unit, subject to adjustment. The description and terms of the New Rights are set forth in the NOL Rights Agreement. The purpose of the NOL Rights Agreement is to diminish the risk that the Company’s ability to use its net operating losses and certain other tax assets (collectively, “Tax Benefits”) to reduce potential future federal income tax obligations would become subject to limitations by reason of the Company’s experiencing an “ownership change,” as defined in Section 382 of the Internal Revenue Code of 1986. A company generally experiences such an ownership change if the percentage of its stock owned by its “5-percent shareholders,” as defined in Section 382 of the Internal Revenue Code of 1986, increases by more than 50 percentage points over a rolling three-year period. The NOL Rights Agreement is designed to reduce the likelihood that the Company will experience an ownership change under Section 382 of the Internal Revenue Code of 1986 by (i) discouraging any person or group from becoming a 4.99% shareholder and (ii) discouraging any existing 4.99% shareholder from acquiring additional shares of the Company’s stock. The New Rights will not be exercisable until the earlier to occur of (i) the close of business on the tenth business day after a public announcement or filing that a person has, or group of affiliated or associated persons or persons acting in concert have, become an “Acquiring Person,” which is defined as a person or group of affiliated or associated persons or persons acting in concert who, at any time after the date of the NOL Rights Agreement, have acquired, or obtained the right to acquire, beneficial ownership of 4.99% or more of the Company’s outstanding shares of common stock, subject to certain exceptions or (ii) the close of business on the tenth business day after the commencement of, or announcement of an intention to commence, a tender offer or exchange offer the consummation of which would result in any person becoming an Acquiring Person (the earlier of such dates being called the “Distribution Date”). Certain synthetic interests in securities created by derivative positions, whether or not such interests are considered to be ownership of the underlying common stock or are reportable for purposes of Regulation 13D of the Exchange Act, are treated as beneficial ownership of the number of shares of common stock equivalent to the economic exposure created by the derivative position, to the extent actual shares of the common stock are directly or indirectly held by counterparties to the derivatives contracts. The New Rights, which are not exercisable until the Distribution Date, will expire prior to the earliest of (i) May 6, 2019 or such later day as may be established by the Board of Directors prior to the expiration of the New Rights, provided that the extension is submitted to the Company’s stockholders for ratification at the next annual meeting of stockholders of the Company succeeding such extension; (ii) the time at which the New Rights are redeemed pursuant to the NOL Rights Agreement; (iii) the time at which the New Rights are exchanged pursuant to the NOL Rights Agreement; (iv) the time at which the New Rights are terminated upon the occurrence of certain transactions; (v) the close of business on the first day after the Company’s 2017 annual meeting of stockholders, if approval by the stockholders of the Company of the NOL Rights Agreement has not been obtained on or prior to the close of business on the first day after the Company’s 2017 annual meeting of stockholders; (vi) the close of business on the effective date of the repeal of Section 382 of the Internal Revenue Code of 1986, if the Board of Directors determines that the NOL Rights Agreement is no longer necessary or desirable for the preservation of Tax Benefits; and (vii) the close of business on the first day of a taxable year of the Company to which the Board of Directors determines that no Tax Benefits are available to be carried forward. Each share of Series B Junior Participating Preferred Stock will be entitled, when, as and if declared, to a preferential per share quarterly dividend payment equal to the greater of (i) $1.00 per share or (ii) an amount equal to 1,000 times the dividend declared per share of common stock. Each share of Series B Junior Participating Preferred Stock will entitle the holder thereof to 1,000 votes on all matters submitted to a vote of the stockholders of the Company. In the event of any merger, consolidation or other transaction in which shares of common stock are converted or exchanged, each share of Series B Junior Participating Preferred Stock will be entitled to receive 1,000 times the amount received per one share of common stock. At the Company’s 2017 annual meeting of stockholders on August 31, 2017, the stockholders approved the NOL Rights Agreement, dated as of May 6, 2016, with Computershare Inc. |
Offerings of Common Stock and W
Offerings of Common Stock and Warrants and At-the-Market Offering Program | 6 Months Ended |
Sep. 30, 2017 | |
Offerings of Common Stock and Warrants and At-the-Market Offering Program | |
Offerings of Common Stock and Warrants and At-the-Market Offering Program | 9. Offerings of Common Stock and Warrants and At-the-Market Offering Program On October 18, 2016, the Company entered into a securities purchase agreement with certain accredited investors, pursuant to which the Company agreed to sell 3.6 million shares of common stock, pre-funded Series B warrants to purchase up to 2.7 million shares of common stock, and Series A warrants to purchase up to 6.3 million shares of common stock. Pursuant to a placement agent agreement, dated as of October 18, 2016, the Company engaged Oppenheimer & Co. Inc. as the lead placement agent for the offering and ROTH Capital Partners, LLC as co-placement agent for the offering. Each share of common stock was sold at a price of $1.20. Each Series B warrant was issued with an exercise price of $1.20 per share of common stock, $1.19 of which was pre-funded at closing and $0.01 of which is payable upon exercise. Each Series A warrant was issued with an initial exercise price of $1.34 per share of common stock. These Series A warrants contain anti-dilution provisions that reduce the exercise price of the warrants if certain dilutive issuances occur. The anti-dilution provisions of the Series A warrants were approved by the Company’s stockholders at the 2017 annual meeting of stockholders held on August 31, 2017 and exercise price of the warrants was adjusted to $0.65 per share. The value of this down round feature was measured using the Binomial valuation model and resulted in a loss of approximately $0.7 million during the three and six months ended September 30, 2017, respectively. The net proceeds to the Company from this offering, after deducting the placement agent fees and other estimated offering expenses, were approximately $6.8 million. The offering closed on October 21, 2016. On April 19, 2016, the Company entered into an underwriting agreement with Oppenheimer & Co. Inc. as the sole book-running manager, and Rodman & Renshaw, a unit of H.C. Wainwright & Co., LLC, as the co-manager, related to the public offering of 2.7 million shares of our common stock and pre-funded Series B warrants to purchase up to 5.5 million shares of common stock, which were offered in lieu of common stock to those purchasers whose purchase of common stock in the offering otherwise would result in the purchaser beneficially owning more than 4.99% of the Company’s outstanding common stock following the completion of the offering. Also included in the offering were Series A warrants to purchase 4.1 million shares of common stock. Every two shares of common stock were sold with one Series A warrant to purchase one share of common stock at a collective negotiated price of $3.50. Every two Series B warrants were sold with one Series A warrant to purchase one share of common stock at a collective negotiated price of $3.48. The Series A warrants are exercisable, subject to certain limitations, during the period commencing six months after the date of the issuance and expire five years after the first day they are exercisable. The pre-funded Series B warrants were exercisable, subject to certain limitations, upon issuance and expire nine months from the date of issuance, subject to extension under certain circumstances. The net proceeds to the Company from the sale of the common stock and warrants, after deducting fees and other offering expenses, were approximately $13.1 million. The offering closed on April 22, 2016. During each of the three and six months ended September 30, 2017, there was no Series A warrant activity and 10,407,500 Series A warrants remained outstanding. During the Fiscal year ended March 31, 2017, all Series B warrants were exercised and there are no Series B warrants outstanding. Effective August 28, 2015, the Company entered into a sales agreement with respect to an at-the-market offering program pursuant to which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock, having an aggregate offering price of up to $30.0 million. The Company will set the parameters for sales of the shares, including the number to be sold, the time period during which sales are requested to be made, any limitation on the number that may be sold in one trading day and any minimum price below which sales may not be made. During the three months ended September 30, 2017, the Company issued 2.4 million shares of the Company’s common stock under the at-the-market offering program and the net proceeds to the Company from the sale of the Company’s common stock were approximately $1.4 million after deducting commissions paid of approximately $45,000. During the six months ended September 30, 2017, the Company issued 5.8 million shares of the Company’s common stock under the at-the-market offering program and the net proceeds to the Company from the sale of the Company’s common stock were approximately $4.0 million after deducting commissions paid of approximately $0.1 million. As of September 30, 2017, 13.1 million shares of the Company’s common stock were sold pursuant to the at-the-market offering program and the net proceeds to the Company from the sale of the common stock were approximately $16.8 million after deducting commissions paid of approximately $0.5 million. As of September 30, 2017, approximately $12.2 million remained available for issuance with respect to the at-the-market offering program. These available proceeds are subject to Instruction I.B.6(a) to Form S-3 often referred to as the “Baby Shelf Rules.” |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Sep. 30, 2017 | |
Fair Value Measurements | |
Fair Value Measurements | 10. Fair Value Measurements The FASB has established a framework for measuring fair value using generally accepted accounting principles. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are described as follows: Level 1. Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets. Level 2. Inputs to the valuation methodology include: · Quoted prices for similar assets or liabilities in active markets · Quoted prices for identical or similar assets or liabilities in inactive markets · Inputs other than quoted prices that are observable for the asset or liability · Inputs that are derived principally from or corroborated by observable market data by correlation or other means If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability. Level 3. Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used must maximize the use of observable inputs and minimize the use of unobservable inputs. The table below presents our assets and liabilities that are measured at fair value on a recurring basis at September 30, 2017 and are categorized using the fair value hierarchy (in thousands): Fair Value Measurements at September 30, 2017 Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Restricted cash $ 5,000 $ 5,000 $ — $ — The table below presents our assets and liabilities that are measured at fair value on a recurring basis during the fiscal year ended March 31, 2017 and are categorized using the fair value hierarchy (in thousands): Fair Value Measurements at March 31, 2017 Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Cash equivalents $ 7,520 $ 7,520 $ — $ — Restricted cash $ 5,514 $ 5,514 $ — $ — Cash equivalents include cash held in money market and U.S. treasury funds at March 31, 2017. Basis for Valuation The carrying values reported in the consolidated balance sheets for cash and cash equivalents, restricted cash, accounts receivable and accounts payable approximate fair values because of the immediate or short-term maturities of these financial instruments. As the Company's obligations under the Credit Facility are based on adjustable market rates reflective of what would currently be available to the Company, the Company has determined that the carrying value approximates the fair value. The carrying values and estimated fair values of these obligations are as follows (in thousands): As of As of September 30, 2017 March 31, 2017 Carrying Estimated Carrying Estimated Value Fair Value Value Fair Value Obligations under the credit facility $ 9,575 $ 9,575 $ $ 11,533 Adoption of ASU 2017-11 The Company changed its method of accounting for warrants through the early adoption of ASU 2017-11 during the three months ended June 30, 2017 on a full retrospective basis. Accordingly, the Company reclassified the warrant liability to additional paid in capital on its March 31, 2017 consolidated balance sheets, which increased additional paid-in capital by $2.9 million and decreased warrant liability by $2.9 million. In addition, because of the retrospective adoption, the Company credited change in fair value of warrant liability on its consolidated statements of operations by $0.5 million and $1.3 million for the three months and year ended March 31, 2017, respectively. The change in unrealized gain/loss on warrant liability was offset by a $1.3 million credit to accumulated deficit on the consolidated balance sheets. Adoption of ASU 2017-11 had no impact on the Company’s consolidated statement of cash flows in the current or previous interim and annual reporting periods. The adoption of ASU 2017-11 also had no impact on statement of operations during the six months ended September 30, 2016 and no cumulative effect to the accumulated deficit as of the beginning of the prior annual reporting period, as there were no warrants outstanding in those respective periods that were impacted by ASU 2017-11. The following table provides a reconciliation of warrant liability, additional paid-in capital, accumulated deficit and change in fair value of warrant liability on the consolidated balance sheets for the year ended March 31, 2017 (in thousands): Consolidated Balance Sheets Warrant Liability Additional Paid-in Capital Accumulated deficit Balance, March 31, 2017 (Prior to adoption of ASU 2017-11) $ 2,917 $ 870,457 $ (850,876) Reclassified warrant liability $ (4,240) $ 4,240 $ — Reclassified unrealized gain on warrant liability $ 1,323 $ — $ (1,323) Balance, March 31, 2017 (After adoption of ASU 2017-11) $ — $ 874,697 $ (852,199) |
Revolving Credit Facility
Revolving Credit Facility | 6 Months Ended |
Sep. 30, 2017 | |
Revolving Credit Facility | |
Revolving Credit Facility | 11. Revolving Credit Facility Former Credit Facility The Company maintained two Credit and Security Agreements, as amended, with Wells Fargo, which provided the Company with a line of credit of up to $20.0 million in the aggregate. As of September 30, 2016 and March 31, 2017, $6.2 million and $11.5 million in borrowings were outstanding, respectively, under the former credit facility. Interest expense related to the former credit facility during the six months ended September 30, 2017 was $0.2 million, which includes $0.1 million in amortization of deferred financing costs. Interest expense related to the former credit facility during the three months ended September 30, 2016 was $0.1 million, which includes $42,000 in amortization of deferred financing costs. Interest expense related to the former credit facility during the six months ended September 30, 2016 was $0.3 million, which includes $0.1 million in amortization of deferred financing costs. The Company’s borrowing rate was 4.9% at March 31, 2017. Upon closing the Bridge Bank Credit Agreements with Bridge Bank the Company’s existing credit facilities with Wells Fargo were paid off in full. New Credit Facility On June 2, 2017, the Company entered into the Bridge Bank Credit Agreements with Western Alliance Bank through Bridge Bank, with credit support provided by the Export-Import Bank of the United States through its working capital guarantee program. Under the terms of the Bridge Bank Credit Agreements, the Company may borrow up to $12.0 million on a revolving basis depending on, among other factors, the amount of its eligible inventory and accounts receivable. The Bridge Bank Credit Agreements are for a two-year period ending June 2, 2019. Total borrowings, letter of credit obligations and the then aggregate committed amount of cash management services under the Bridge Bank Credit Agreements may not exceed 85% of the sum of unrestricted cash and the amount of cash collateral held at Bridge Bank. As a condition of the Bridge Bank Credit Agreements, the Company has restricted $5.0 million of cash equivalents as additional security for the credit facility. Borrowings under the Bridge Bank Credit Agreements will bear per annum interest at the prime rate plus 1.5 percent, subject to increase during the occurrence of an event of default. Obligations under the Bridge Bank Credit Agreements are secured by all of the Company’s assets, including intellectual property and general intangibles. The Company has incurred $0.2 million in origination fees. These fees has been recorded under the caption “Prepaid expenses and other current assets” in the accompanying condensed consolidated balance sheets and amortized to interest expense through June 2019. As of September 30, 2017, $9.6 million in borrowings were outstanding under the new credit facility. Interest expense related to the new credit facility during the three months ended September 30, 2017 was $0.1 million, which includes $28,000 in amortization of deferred financing costs. Interest expense related to the new credit facility during the six months ended September 30, 2017 was $0.2 million, which includes $46,000 in amortization of deferred financing costs. The Company’s borrowing rate was 5.8% at September 30, 2017. The Bridge Bank Credit Agreements include affirmative covenants as well as negative covenants that prohibit a variety of actions without Bridge Bank’s consent, including covenants that limit the Company’s ability to (a) incur or guarantee debt, (b) create liens, (c) enter into any merger, recapitalization or similar transaction or purchase all or substantially all of the assets or stock of another entity, or (d) sell, assign, transfer or otherwise dispose of the Company’s assets. The financial covenants of the domestic credit agreement with Bridge Bank (the “Domestic Facility”), which is included in the Bridge Bank Credit Agreements, requires the Company not to exceed specified levels of losses relative to its financial model and the outstanding line of credit advances may not exceed 85% of the sum of unrestricted cash and the amount of cash collateral held at Bridge Bank. The Domestic Facility also defines an event of default to include a material adverse effect on the Company’s business. An event of default for this or any other reason, if not waived, could have a material adverse effect on the Company. As of September 30, 2017 we were in compliance with the covenants contained in the Bridge Bank Credit Agreements for Fiscal 2018. |
Accrued Warranty Reserve
Accrued Warranty Reserve | 6 Months Ended |
Sep. 30, 2017 | |
Accrued Warranty Reserve | |
Accrued Warranty Reserve | 12. Accrued Warranty Reserve The Company provides for the estimated costs of warranties at the time revenue is recognized. The specific terms and conditions of those warranties vary depending upon the microturbine product sold and geography of sale. The Company’s product warranties generally start from the delivery date and continue for up to eighteen months. Factors that affect the Company’s warranty obligation include product failure rates, anticipated hours of product operations and costs of repair or replacement in correcting product failures. These factors are estimates that may change based on new information that becomes available each period. Similarly, the Company also accrues the estimated costs to address reliability repairs on products no longer in warranty when, in the Company’s judgment, and in accordance with a specific plan developed by the Company, it is prudent to provide such repairs. The Company assesses the adequacy of recorded warranty liabilities quarterly and makes adjustments to the liability as necessary. When the Company has sufficient evidence that product changes are altering the historical failure occurrence rates, the impact of such changes is then taken into account in estimating future warranty liabilities. During the three months ended December 31, 2016, the Company recorded a one-time non-cash warranty provision of approximately $5.2 million to retrofit proactively select non-Signature Series C200 microturbines with the more robust new Signature Series generator components to improve product performance and reliability. The balance of this reliability repair program liability as of September 30, 2017 was $0.7 million. Changes in accrued warranty reserve during the six months ended September 30, 2017 are as follows (in thousands): Balance, beginning of the period $ 3,766 Standard warranty provision 1,190 Net accrual related to reliability repair programs (195) Deductions for warranty claims (2,199) Balance, end of the period $ 2,562 |
Deferred Revenue
Deferred Revenue | 6 Months Ended |
Sep. 30, 2017 | |
Deferred Revenue | |
Deferred Revenue | 13. Deferred Revenue As of March 31, 2017 the balance of deferred revenue was approximately $5.0 million. The change in deferred revenue attributed to Comprehensive Factory Protection Plan (“FPP”) contracts during the six months ended September 30, 2017 was a decrease of $0.1 million and the change in deferred revenue attributed to deposits during the six months ended September 30, 2017 was an increase of $0.1 million. Changes in deferred revenue during the six months ended September 30, 2017 are as follows (in thousands): FPP Balance, beginning of the period $ 3,414 FPP Billings 7,164 FPP Revenue recognized (7,309) Balance attributed to FPP contracts 3,269 Deposits 1,730 Deferred revenue balance, end of the period $ 4,999 Deferred revenue attributed to FPP contracts represents the unearned portion of the billed agreements. FPP agreements are generally paid quarterly in advance with revenue recognized on a straight line basis over the contract period. Deposits are primarily non-refundable cash payments from distributors for orders to be delivered in the future. |
Other Current Liabilities
Other Current Liabilities | 6 Months Ended |
Sep. 30, 2017 | |
Other Current Liabilities | |
Other Current Liabilities | 14. Other Current Liabilities The Company is a party to a Development and License Agreement with Carrier Corporation (“Carrier”) regarding the payment of royalties on the sale of each of the Company’s 200 kilowatt (“C200”) microturbines. Carrier earned $0.2 million and $0.1 million in royalties for C200 and C1000 Series system sales during the three months ended September 30, 2017 and 2016, respectively. Carrier earned $0.5 million and $0.3 million in royalties for C200 and C1000 system sales during the six months ended September 30, 2017 and 2016, respectively. Earned royalties of approximately $0.2 million and $0.3 million were unpaid as of September 30, 2017 and March 31, 2017, respectively, and are included in accrued expenses in the accompanying balance sheets. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | 15. Commitments and Contingencies Purchase Commitments As of September 30, 2017, the Company had firm commitments to purchase inventories of approximately $23.3 million through Fiscal 2019. Certain inventory delivery dates and related payments are not firmly scheduled; therefore, amounts under these firm purchase commitments will be payable upon the receipt of the related inventories. Lease Commitments The Company leases offices and manufacturing facilities under various non-cancelable operating leases expiring at various times through the fiscal year ending March 31, 2020. All of the leases require the Company to pay maintenance, insurance and property taxes. The lease agreements for primary office and manufacturing facilities provide for rent escalation over the lease term and renewal options for five-year periods. Rent expense is recognized on a straight-line basis over the term of the lease. The difference between rent expense recorded and the amount paid is credited or charged to deferred rent, which is included in other long-term liabilities in the accompanying balance sheets. The balance of deferred rent was approximately $0.1 million and $0.2 million as of September 30, 2017 and March 31, 2017, respectively. Rent expense was approximately $0.6 million during each of the three months ended September 30, 2017 and 2016. Rent expense was approximately $1.1 million and $1.2 million during the six months ended September 30, 2017 and 2016, respectively. On June 7, 2017 the Company and Prologis, L.P entered into a Fourth Amendment to Lease (the “Van Nuys Fourth Amendment”) to amend the Lease by extending the term of the Lease for a period of sixty-two (62) months commencing on December 31, 2017 to February 28, 2023. The Van Nuys Fourth Amendment also adjusts the monthly base rent payable by the Company under the Lease Agreement to the following: $0 per month from January 1, 2018 through February 28, 2018; $66,846 per month from March 1, 2018 through December 31, 2018; $68,852 per month from January 1, 2019 through December 31, 2019; $70,917 per month from January 1, 2020 through December 31, 2020; $73,045 per month from January 1, 2021 through December 31, 2021; $75,236 per month from January 1, 2022 through December 31, 2022; and $77,493 per month from January 1, 2023 through February 28, 2023. The Van Nuys Fourth Amendment also provides the Company with an option to extend the Lease by an additional five-year term following the expiration of the term of the Lease as amended by the Lease Amendment and provides that Prologis, L.P. will contribute a tenant improvement allowance toward the Company’s approved alterations to the premises. Other Commitments The Company has agreements with certain of its distributors requiring that if the Company renders parts obsolete in inventories the distributors own and hold in support of their obligations to serve fielded microturbines, then the Company is required to replace the affected stock at no cost to the distributors. While the Company has never incurred costs or obligations for these types of replacements, it is possible that future changes in the Company’s product technology could result and yield costs to the Company if significant amounts of inventory are held at distributors. As of September 30, 2017, no significant inventories were held at distributors. Legal Matters Federal Securities Class Action Two putative securities class action complaints were filed against the Company and certain of its current and former officers in the United States District Court for the Central District of California under the following captions: David Kinney, etc. v. Capstone Turbine, et al., No. 2:15-CV-08914 on November 16, 2015 (the “Kinney Complaint”) and Kevin M. Grooms, etc. v. Capstone Turbine, et al., No. 2:15-CV-09155 on December 18, 2015 (the “Grooms Complaint”). The putative class in the Kinney Complaint is comprised of all purchasers of the Company’s securities between November 7, 2013 and November 5, 2015. The Kinney Complaint alleges material misrepresentations and omissions in public statements regarding BPC and the likelihood that BPC would not be able to fulfill many legal and financial obligations to the Company. The Kinney Complaint also alleges that the Company’s financial statements were not appropriately adjusted in light of this situation and were not maintained in accordance with GAAP, and that the Company lacked adequate internal controls over accounting. The Kinney Complaint alleges that these public statements and accounting irregularities constituted violations by all named defendants of Section 10(b) of the Exchange Act, and Rule 10b-5 thereunder, as well as violations of Section 20(a) of the Exchange Act by the individual defendants. The Grooms Complaint makes allegations and claims that are substantially identical to those in the Kinney Complaint, and both complaints seek compensatory damages of an undisclosed amount. On January 16, 2016, several shareholders filed motions to consolidate the Kinney and Grooms actions and for appointment as lead plaintiff. On February 29, 2016, the Court granted the motions to consolidate, and appointed a lead plaintiff. On May 6, 2016, a Consolidated Amended Complaint with allegations and claims substantially identical to those of the Kinney Complaint was filed in the consolidated action. The putative class period in the Consolidated Amended Complaint is June 12, 2014 to November 5, 2015. Defendants filed a motion to dismiss the Consolidated Amended Complaint on June 17, 2016. On March 10, 2017, the Court issued an order granting Defendants’ motion to dismiss in its entirety with leave to amend. Plaintiffs filed an amended complaint on April 28, 2017. Defendants’ motion to dismiss was filed June 2, 2017. Plaintiffs filed their opposition to the motion to dismiss on July 7, 2017, and Defendants filed their reply in support of the motion to dismiss on July 28, 2017. The court vacated the hearing that was scheduled for August 18, 2017. The Company has not recorded any liability as of September 30, 2017 since any potential loss is not probable or reasonably estimable given the preliminary nature of the proceedings. State Derivative Lawsuits — California On February 18, 2016, a purported shareholder derivative action was filed in Los Angeles Superior Court in the State of California against the Company and certain of its current and former officers and directors under the following caption: Stesiak v. Jamison, et al., No. BC610782. The lawsuit alleges that certain of the Company’s current and former officers and directors knew or should have known that BPC would be unable to fulfill its obligations to the Company, but allowed the Company to make false and misleading statements regarding BPC and the Company’s financial condition. The complaint also alleges that the defendants failed to timely adjust the Company’s account receivables and backlog to reflect BPC’s inability to pay the Company. The complaint asserts causes of action for breach of fiduciary duty and unjust enrichment. It demands damages for the amount of damage sustained by the Company as a result of the individual defendants’ alleged breach of fiduciary duties and unjust enrichment, that the Company institute corporate governance reforms, and disgorgement from the individual defendants. On May 5, 2016, the parties filed a stipulation and proposed order seeking to stay this action until such time as the defendants’ motion(s) to dismiss the federal securities class action are either granted with prejudice or denied in whole or in part. On May 10, 2016, the Court entered that proposed order. Given that the federal securities class action was dismissed with leave to amend, this case is still stayed. A status conference is scheduled for January 2, 2018. On June 8, 2016, a purported shareholder derivative action entitled Velma Kilpatrick v. Simon, et al., No. BC623167, was filed in Los Angeles Superior Court in the State of California against the Company and certain of its current and former officers and directors. The complaint alleges that certain of the Company’s current and former officers and directors knew or should have known that BPC would be unable to fulfill its obligations to the Company, but allowed the Company to make false and misleading statements regarding BPC and the Company’s financial condition. The complaint also alleges that the defendants failed to timely adjust the Company’s account receivables and backlog to reflect BPC’s inability to pay the Company. The complaint asserts causes of action for breach of fiduciary duty. It demands damages for the amount of damage sustained by the Company as a result of the individual defendants’ alleged breach of fiduciary duties, and that the Company institute corporate governance reforms. On August 23, 2016, the parties filed a stipulation and proposed order seeking to stay this action until such time as the defendants’ motion(s) to dismiss the federal securities class action are either granted with prejudice or denied in whole or in part. Given that the federal securities class action was dismissed with leave to amend, this case is still stayed. A status conference is scheduled for December 1, 2017. On December 27, 2016, a purported shareholder derivative action entitled Andre Rosowsky v. Jamison, et al., No. 30-2016-00894859-CU-MC-CJC was filed in Orange County Superior Court in the State of California against the Company and certain of its current and former officers and directors. The complaint alleges that certain of the Company’s current and former officers and directors knew or should have known that BPC would be unable to fulfill its obligations to the Company, but allowed the Company to make false and misleading statements regarding BPC and the Company’s financial condition. The complaint also alleges that the defendants failed to timely adjust the Company’s account receivables and backlog to reflect BPC’s inability to pay the Company. The complaint asserts causes of action for breach of fiduciary duty and unjust enrichment. It demands damages for the amount of damage sustained by the Company as a result of the individual defendants’ alleged breach of fiduciary duties, that the Company institute corporate governance reforms, and restitution from the individual defendants. On April 14, 2017, the case was removed to the United States District Court for the Central District of California. On May 5, 2017, the plaintiff voluntarily dismissed his complaint without prejudice. Federal Derivative Lawsuits On March 7, 2016, a purported shareholder derivative action was filed in the United States District Court for the Central District of California against the Company and certain of its current and former officers and directors under the following caption: Haber v. Jamison, et al., No. CV16-01569-DMG (RAOx). The lawsuit alleges that certain of the Company’s current and former officers and directors knew or should have known that BPC would be unable to fulfill its obligations to the Company, but allowed the Company to make false and misleading statements regarding BPC and the Company’s financial condition. The complaint asserts a cause of action for breach of fiduciary duty. It demands damages for the amount of damage sustained by the Company as a result of the individual defendants’ alleged breach of fiduciary duties, and equitable relief, including that the Company institute appropriate corporate governance reforms. On May 11, 2016, the parties filed a stipulation and proposed order seeking to stay this action until such time as the defendants’ motion(s) to dismiss the federal securities class action are either granted with prejudice or denied in whole or in part. On May 13, 2016, the Court entered that proposed order. Given that the federal securities class action was dismissed with leave to amend, this case is still stayed. On July 12, 2016 and July 18, 2016, respectively, two additional purported shareholder derivative actions were filed in the United States District Court for the Central District of California against the Company and certain of its current and former officers and directors, under the caption Tuttle v. Atkinson, et al., No. CV16-05127, and Boll v. Jamison, et al., No. CV16-5282, respectively. The lawsuits allege that certain of the Company’s current and former officers and directors knew or should have known that BPC would be unable to fulfill its obligations to the Company, but allowed the Company to make false and misleading statements regarding BPC and the Company’s financial condition. The Tuttle complaint asserts causes of action for breach of fiduciary duty, gross mismanagement, and unjust enrichment, and the Boll complaint asserts causes of action for breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets. Both complaints demand damages sustained by the Company as a result of the individual defendants’ alleged breaches of fiduciary duties, and equitable relief, including that the Company institute appropriate corporate governance reforms. The federal derivative actions have been stayed until such time as the defendants’ motion(s) to dismiss the federal securities class action are either granted with prejudice or denied in whole or in part. Given that the federal securities class action was dismissed with leave to amend, these cases are still stayed. Shareholder Demand Following the dismissal without prejudice of his purported shareholder derivative action discussed above, former plaintiff in Andre Rosowsky v. Jamison, et al. sent us a letter dated July 7, 2017 (the “Shareholder Demand”) demanding that the Board of Directors take action to remedy purported breaches of fiduciary duties allegedly related to the claims asserted in the above-discussed securities class action and derivative actions. The Company acknowledged the Shareholder Demand on July 25, 2017. The Company’s Board of Directors has formed a committee to evaluate the Shareholder Demand. |
Net Loss Per Common Share
Net Loss Per Common Share | 6 Months Ended |
Sep. 30, 2017 | |
Net Loss Per Common Share | |
Net Loss Per Common Share | 16. Net Loss Per Common Share Basic loss per share of common stock is computed using the weighted average number of common shares outstanding for the period. Diluted loss per share is computed without consideration to potentially dilutive instruments because the Company incurred losses in the three months ended September 30, 2017 which would make these instruments anti-dilutive. As of September 30, 2017 and 2016, the number of anti-dilutive stock options and restricted stock units excluded from diluted net loss per common share computations was approximately 0.9 million and 0.8 million, respectively. As of September 30, 2017 and 2016, the number of warrants excluded from diluted net loss per common share computations was approximately 10.4 million and 5.5 million, respectively. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Sep. 30, 2017 | |
Subsequent Events | |
Subsequent Events | 17. Subsequent Events On October 26, 2017, the Company entered into a Warrant Exercise Agreement (the “Exercise Agreement”) with a holder of the Series A warrants (the “Exercising Holder”), which Exercising Holder owns Series A warrants exercisable for 1,928,750 shares of Common Stock. Pursuant to the Exercise Agreement, the Exercising Holder and the Company agreed that the Exercising Holder would exercise its Series A warrants with respect to 1,928,750 shares of Common Stock underlying such Series A warrants for a reduced exercise price equal to $0.90 per share. On October 27, 2017, the Company received net proceeds of approximately $1.7 million from the exercise of the Series A warrants by the Exercising Holder. The Company did not pay any financial advisory fees in connection with the exercise of the Series A warrants by the Exercising Holder. In addition, the exercise resulted in the reduction of warrants to purchase common stock, par value $0.001 per share, of the Company by approximately 19% and was not dilutive to existing stockholders of the Company calculated on a fully diluted basis for outstanding warrants. On October 18, 2017, the Company announced that it had granted Turbine International, LLC (“TI”) and its affiliate, MTE Service, the sole distribution rights for Capstone products and services in the Russian oil and gas sector in exchange for approximately $6.3 million in cash. In connection with the appointment of TI as the Company’s distributor in the Russian oil and gas sector, on October 13, 2017, the Company and TI entered into an Accounts Receivable Assignment Agreement (the “Accounts Receivable Agreement”) and Promissory Note (the “Promissory Note”). Pursuant to the terms of the Accounts Receivable Agreement, the Company assigned to IT its right, title and interest to receivables owed to the Company from the Company’s distributor BPC Engineering. As consideration for the assignment of the BPC receivable, TI will pay the Company $2.5 million in three payments by February 1, 2018. The first payment of $0.1 million was paid on September 13, 2017. Under the terms of the Promissory Note, TI agreed to pay the Company $3.8 million to be paid over a three-year period in 35 equal monthly installments starting in August 2018. On October 13, 2017, the Company and Hispania Petroleum, S.A. (the “Guarantor”), entered into a Guaranty Agreement (the “Guaranty Agreement”) whereby the Guarantor guarantees TI’s obligations under the Accounts Receivable Agreement and Promissory Note. MTE Service is a wholly owned subsidiary of Hispania Petroleum S.A. |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Inventories | |
Summary of inventory | Inventories are valued on a first in first out (“FIFO”) basis and lower of cost or net realizable value and consisted of the following as of September 30, 2017 and March 31, 2017 (in thousands): September 30, March 31, 2017 2017 Raw materials $ 14,436 $ 15,035 Work in process 290 — Finished goods 2,542 464 Total 17,268 15,499 Less non-current portion (994) (961) Current portion $ 16,274 $ 14,538 |
Schedule of expected usage for non-current inventory | The Company expects to use the non-current portion of the inventories on hand as of September 30, 2017 over the periods presented in the following table (in thousands): Non-current Inventory Balance Expected Expected Period of Use to be Used 13 to 24 months $ 358 25 to 36 months 636 Total $ 994 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment | |
Schedule of property, plant and equipment | Property, plant and equipment consisted of the following as of September 30, 2017 and March 31, 2017 (in thousands): September 30, March 31, 2017 2017 Machinery, rental equipment, equipment, automobiles and furniture $ 16,050 $ 17,657 Leasehold improvements 9,828 9,870 Molds and tooling 2,929 2,866 28,807 30,393 Less, accumulated depreciation (26,575) (28,278) Total property, plant and equipment, net $ 2,232 $ 2,115 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Intangible Assets | |
Schedule of intangible assets | Intangible assets consisted of the following as of September 30, 2017 and March 31, 2017 (in thousands): September 30, 2017 Weighted Average Intangible Amortization Assets, Accumulated Intangible Period Gross Amortization Assets, Net Manufacturing license 17 years $ 3,700 $ 3,700 $ — Technology 10 years 2,240 1,717 523 Trade name & parts, service and TA100 customer relationships 1.2 to 5 years 1,766 1,766 — Total $ 7,706 $ 7,183 $ 523 March 31, 2017 Weighted Average Intangible Amortization Assets, Accumulated Intangible Period Gross Amortization Assets, Net Manufacturing license 17 years $ 3,700 $ 3,684 $ 16 Technology 10 years 2,240 1,605 635 Trade name & parts, service and TA100 customer relationships 1.2 to 5 years 1,766 1,766 — Total $ 7,706 $ 7,055 $ 651 |
Schedule of expected future amortization expense of intangible assets | Expected future amortization expense of intangible assets as of September 30, 2017 is as follows (in thousands): Amortization Year Ending March 31, Expense 2018 (remainder of fiscal year) 112 2019 224 2020 187 Thereafter — Total expected future amortization $ 523 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity. | |
Summary of stock-based compensation expense by statement of operations line item | The following table summarizes, by statement of operations line item, stock-based compensation expense for the Company’s three and six months ended September 30, 2017 and 2016 (in thousands): Three Months Ended Six Months Ended September 30, September 30, 2017 2016 2017 2016 Cost of goods sold $ 18 $ 14 $ 38 $ 29 Research and development 5 13 12 16 Selling, general and administrative 130 214 257 434 Stock-based compensation expense $ 153 $ 241 $ 307 $ 479 |
Summary of stock option activity | Weighted- Average Weighted- Remaining Aggregate Average Contractual Intrinsic Shares Exercise Price Term Value (in years) Options outstanding at March 31, 2017 314,537 $ 15.48 Granted — $ — Exercised — $ — Forfeited, cancelled or expired (4,000) $ 24.25 Options outstanding at September 30, 2017 310,537 $ 15.37 — Options fully vested at September 30, 2017 and those expected to vest beyond September 30, 2017 310,537 $ 15.37 — Options exercisable at September 30, 2017 245,693 $ 18.98 — |
Schedule of weighted-average assumptions used to calculate the estimated fair value of each stock option | Three and Six Months Ended September 30, 2016 Risk-free interest rates 1.3 % Expected lives (in years) 5.7 Dividend yield — % Expected volatility 133.9 % Weighted average grant date fair value of options granted during the period $ 1.52 |
Summary of restricted stock unit and performance restricted stock unit activity | Weighted Average Grant Date Fair Restricted Stock and Performance Restricted Stock Units Shares Value Nonvested restricted stock units outstanding at March 31, 2017 316,709 $ 2.85 Granted 474,848 0.64 Vested and issued (212,924) 2.76 Forfeited (9,513) 2.49 Nonvested restricted stock units outstanding at September 30, 2017 569,120 1.05 Restricted stock units expected to vest beyond September 30, 2017 569,097 $ 1.05 |
Schedule of additional information on restricted stock units | Three Months Ended Six Months Ended September 30, September 30, 2017 2016 2017 2016 Restricted stock compensation expense (in thousands) $ 144 $ 188 $ 287 $ 375 Aggregate fair value of restricted stock units vested and issued (in thousands) $ 130 $ 85 $ 137 $ 107 Weighted average grant date fair value of restricted stock units granted during the period $ 0.62 $ 1.71 $ 0.67 $ 1.71 |
Schedule of restricted stock award activity | Three Months Ended Six Months Ended September 30, September 30, 2017 2016 2017 2016 Restricted stock awards compensation expense (in thousands) $ 1 $ 50 $ 3 $ 101 Restricted stock awards granted 1,953 29,910 3,969 62,111 Weighted average grant date fair value of restricted stock awards granted during the period $ 0.64 $ 1.69 $ 0.63 $ 1.63 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Fair Value Measurements | |
Schedule of assets and liabilities measured at fair value on a recurring basis | The table below presents our assets and liabilities that are measured at fair value on a recurring basis at September 30, 2017 and are categorized using the fair value hierarchy (in thousands): Fair Value Measurements at September 30, 2017 Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Restricted cash $ 5,000 $ 5,000 $ — $ — The table below presents our assets and liabilities that are measured at fair value on a recurring basis during the fiscal year ended March 31, 2017 and are categorized using the fair value hierarchy (in thousands): Fair Value Measurements at March 31, 2017 Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Cash equivalents $ 7,520 $ 7,520 $ — $ — Restricted cash $ 5,514 $ 5,514 $ — $ — |
Schedule of carrying values and estimated fair values of obligations under the revolving credit facility | The carrying values and estimated fair values of these obligations are as follows (in thousands): As of As of September 30, 2017 March 31, 2017 Carrying Estimated Carrying Estimated Value Fair Value Value Fair Value Obligations under the credit facility $ 9,575 $ 9,575 $ $ 11,533 |
Reconciliation of warrant liability, additional paid-in capital, accumulated deficit and change in fair value of warrant liability on the consolidated balance sheets and consolidated statement of operations | Consolidated Balance Sheets Warrant Liability Additional Paid-in Capital Accumulated deficit Balance, March 31, 2017 (Prior to adoption of ASU 2017-11) $ 2,917 $ 870,457 $ (850,876) Reclassified warrant liability $ (4,240) $ 4,240 $ — Reclassified unrealized gain on warrant liability $ 1,323 $ — $ (1,323) Balance, March 31, 2017 (After adoption of ASU 2017-11) $ — $ 874,697 $ (852,199) |
Accrued Warranty Reserve (Table
Accrued Warranty Reserve (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Accrued Warranty Reserve | |
Schedule of changes in accrued warranty reserve | Changes in accrued warranty reserve during the six months ended September 30, 2017 are as follows (in thousands): Balance, beginning of the period $ 3,766 Standard warranty provision 1,190 Net accrual related to reliability repair programs (195) Deductions for warranty claims (2,199) Balance, end of the period $ 2,562 |
Deferred Revenue (Tables)
Deferred Revenue (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Deferred Revenue | |
Schedule of changes in deferred revenue | FPP Balance, beginning of the period $ 3,414 FPP Billings 7,164 FPP Revenue recognized (7,309) Balance attributed to FPP contracts 3,269 Deposits 1,730 Deferred revenue balance, end of the period $ 4,999 |
Basis of Presentation (Details)
Basis of Presentation (Details) $ in Thousands | Jun. 02, 2017USD ($)agreement | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)agreement | Sep. 30, 2016USD ($) | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) |
Net loss | $ 3,667 | $ 5,865 | $ 7,760 | $ 10,382 | |||
Cash used in operating activities | 5,852 | 10,027 | |||||
Cash, cash equivalents and restricted cash | 15,156 | $ 16,112 | 15,156 | $ 16,112 | $ 19,705 | $ 16,706 | |
Outstanding borrowings | 9,575 | $ 9,575 | 11,533 | ||||
Bridge Bank | |||||||
Number of secured credit facilities | agreement | 2 | ||||||
Term of credit agreements | 2 years | ||||||
Wells Fargo | |||||||
Number of credit and security agreements | agreement | 2 | ||||||
Credit Facility | Bridge Bank | |||||||
Outstanding borrowings | 9,600 | $ 9,600 | |||||
Maximum borrowing capacity under facility | $ 12,000 | ||||||
Credit Facility | Wells Fargo | |||||||
Outstanding borrowings | 6,200 | 6,200 | $ 11,500 | ||||
Maximum borrowing capacity under facility | 20,000 | 20,000 | |||||
Doubt about Company’s ability to meet obligations for next 12 months | |||||||
Net loss | 3,700 | ||||||
Cash used in operating activities | 5,100 | ||||||
Cash, cash equivalents and restricted cash | 15,200 | 15,200 | |||||
Doubt about Company’s ability to meet obligations for next 12 months | Credit Facility | |||||||
Outstanding borrowings | $ 9,600 | $ 9,600 |
Customer Concentrations and A31
Customer Concentrations and Accounts Receivable (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Mar. 31, 2017 | |
Customer Concentrations and Accounts Receivable | |||||
Provision for doubtful accounts receivable | $ (9,000) | $ (500,000) | $ (22,000) | $ (1,396,000) | |
Accounts receivable | 3,778,000 | 2,221,000 | |||
Deferred revenue | (49,000) | $ 153,000 | |||
BPC Engineering | |||||
Customer Concentrations and Accounts Receivable | |||||
Provision for doubtful accounts receivable | 8,100,000 | ||||
Accounts receivable | $ 1,700,000 | ||||
Sales | Customer concentrations | Regatta | |||||
Customer Concentrations and Accounts Receivable | |||||
Concentration percentage | 11.00% | 11.00% | |||
Sales | Customer concentrations | E-Finity | |||||
Customer Concentrations and Accounts Receivable | |||||
Concentration percentage | 11.00% | 13.00% | |||
Sales | Customer concentrations | Horizon Power Systems | |||||
Customer Concentrations and Accounts Receivable | |||||
Concentration percentage | 12.00% | ||||
Sales | Customer concentrations | Reliable Secure Power Systems | |||||
Customer Concentrations and Accounts Receivable | |||||
Concentration percentage | 12.00% | ||||
Sales | Customer concentrations | Optimal Group Australia | |||||
Customer Concentrations and Accounts Receivable | |||||
Concentration percentage | 11.00% | 10.00% | |||
Sales | Customer concentrations | BPC Engineering | |||||
Customer Concentrations and Accounts Receivable | |||||
Concentration percentage | 11.00% | ||||
Sales | Customer concentrations | IBT Europe GmbH | |||||
Customer Concentrations and Accounts Receivable | |||||
Concentration percentage | 10.00% | ||||
Net accounts receivable | Credit concentration | Regatta | |||||
Customer Concentrations and Accounts Receivable | |||||
Concentration percentage | 13.00% | ||||
Net accounts receivable | Credit concentration | E-Finity | |||||
Customer Concentrations and Accounts Receivable | |||||
Concentration percentage | 16.00% | 29.00% | |||
Net accounts receivable | Credit concentration | Reliable Secure Power Systems | |||||
Customer Concentrations and Accounts Receivable | |||||
Concentration percentage | 16.00% | 10.00% | |||
Net accounts receivable | Credit concentration | DTC | |||||
Customer Concentrations and Accounts Receivable | |||||
Concentration percentage | 12.00% | ||||
Net accounts receivable | Credit concentration | IBT Europe GmbH | |||||
Customer Concentrations and Accounts Receivable | |||||
Concentration percentage | 11.00% |
Inventories - Current (Details)
Inventories - Current (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Sep. 30, 2017 | Mar. 31, 2017 | |
Inventories | ||
Raw materials | $ 14,436 | $ 15,035 |
Work in process | 290 | |
Finished goods | 2,542 | 464 |
Total | 17,268 | 15,499 |
Less non-current portion | (994) | (961) |
Current portion | $ 16,274 | $ 14,538 |
Weighted average age of noncurrent inventories | 1 year 7 months 6 days |
Inventories - Non-Current (Deta
Inventories - Non-Current (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Mar. 31, 2017 |
Inventories | ||
Non-current inventory, 13 to 24 Months | $ 358 | |
Non-current inventory, 25 to 36 Months | 636 | |
Total | $ 994 | $ 961 |
Property, Plant and Equipment34
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Mar. 31, 2017 | |
Property, Plant and Equipment | |||||
Total property, plant and equipment, gross | $ 28,807 | $ 28,807 | $ 30,393 | ||
Less accumulated depreciation | (26,575) | (26,575) | (28,278) | ||
Total property, plant and equipment, net | 2,232 | 2,232 | 2,115 | ||
Depreciation expense | 200 | $ 300 | 400 | $ 600 | |
Machinery, rental equipment, equipment, automobiles and furniture | |||||
Property, Plant and Equipment | |||||
Total property, plant and equipment, gross | 16,050 | 16,050 | 17,657 | ||
Leasehold improvements | |||||
Property, Plant and Equipment | |||||
Total property, plant and equipment, gross | 9,828 | 9,828 | 9,870 | ||
Molds and tooling | |||||
Property, Plant and Equipment | |||||
Total property, plant and equipment, gross | $ 2,929 | $ 2,929 | $ 2,866 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Mar. 31, 2017 | |
Intangible Assets | |||||
Intangible Assets, Gross | $ 7,706 | $ 7,706 | $ 7,706 | ||
Accumulated Amortization | 7,183 | 7,183 | 7,055 | ||
Intangible Assets, Net | 523 | 523 | 651 | ||
Amortization expense | 100 | $ 100 | 100 | $ 100 | |
Expected future amortization expense of intangible assets | |||||
2018 (remainder of fiscal year) | 112 | 112 | |||
2,019 | 224 | 224 | |||
2,020 | 187 | 187 | |||
Intangible Assets, Net | 523 | $ 523 | $ 651 | ||
Manufacturing license | |||||
Intangible Assets | |||||
Weighted Average Amortization Period | 17 years | 17 years | |||
Intangible Assets, Gross | 3,700 | $ 3,700 | $ 3,700 | ||
Accumulated Amortization | 3,700 | $ 3,700 | 3,684 | ||
Intangible Assets, Net | 16 | ||||
Expected future amortization expense of intangible assets | |||||
Intangible Assets, Net | $ 16 | ||||
Technology | |||||
Intangible Assets | |||||
Weighted Average Amortization Period | 10 years | 10 years | |||
Intangible Assets, Gross | 2,240 | $ 2,240 | $ 2,240 | ||
Accumulated Amortization | 1,717 | 1,717 | 1,605 | ||
Intangible Assets, Net | 523 | 523 | 635 | ||
Expected future amortization expense of intangible assets | |||||
Intangible Assets, Net | 523 | 523 | 635 | ||
Trade Name and Parts, Service and TA100 Customer Relationships | |||||
Intangible Assets | |||||
Intangible Assets, Gross | 1,766 | 1,766 | 1,766 | ||
Accumulated Amortization | $ 1,766 | $ 1,766 | $ 1,766 | ||
Minimum | Trade Name and Parts, Service and TA100 Customer Relationships | |||||
Intangible Assets | |||||
Weighted Average Amortization Period | 1 year 2 months 12 days | 1 year 2 months 12 days | |||
Maximum | Trade Name and Parts, Service and TA100 Customer Relationships | |||||
Intangible Assets | |||||
Weighted Average Amortization Period | 5 years | 5 years |
Intangible Assets - Solar Turbi
Intangible Assets - Solar Turbines (Details) - Solar - USD ($) | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Mar. 31, 2017 | |
Intangible Assets | |||||
Years subject to payment of per-unit royalty fees | 17 years | ||||
Royalties earned | $ 7,200 | $ 6,400 | $ 13,700 | $ 14,700 | |
Unpaid earned royalties | $ 7,200 | $ 7,200 | $ 10,000 |
Stock-Based Compensation - Comp
Stock-Based Compensation - Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Stock-Based Compensation | ||||
Share based compensation expenses | $ 153 | $ 241 | $ 307 | $ 479 |
Cost of goods sold. | ||||
Stock-Based Compensation | ||||
Share based compensation expenses | 18 | 14 | 38 | 29 |
Research and development | ||||
Stock-Based Compensation | ||||
Share based compensation expenses | 5 | 13 | 12 | 16 |
Selling, general and administrative | ||||
Stock-Based Compensation | ||||
Share based compensation expenses | $ 130 | $ 214 | $ 257 | $ 434 |
Stock-Based Compensation - 2000
Stock-Based Compensation - 2000 Equity Incentive Plan and 2017 Equity Incentive Plan (Details) | 6 Months Ended |
Sep. 30, 2017shares | |
2000 Equity Incentive Plan and 2017 Equity Incentive Plan | Stock options | |
Stockholders' equity | |
Vesting period | 4 years |
Expiration Term | 10 years |
Assumed stock option forfeitures (in shares) | 0 |
Portion vesting one year after the issuance date (as a percent) | 25.00% |
Vesting period after one year of grant | 1 year |
Portion vesting on first day of each month after one year from the issuance date (as a percent) | 2.083% |
Vesting period of awards after issuance date | 48 months |
2000 Plan | |
Stockholders' equity | |
Number of shares of common stock reserved for issuance | 1,849,000 |
2017 Plan | |
Stockholders' equity | |
Number of shares of common stock reserved for issuance | 3,000,000 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Additional disclosure | ||||
Share based compensation expenses | $ 153,000 | $ 241,000 | $ 307,000 | $ 479,000 |
Stock options | ||||
Shares | ||||
Outstanding at the beginning of the period (in shares) | 314,537 | |||
Granted (in shares) | 0 | 0 | ||
Forfeited, cancelled or expired (in shares) | (4,000) | |||
Outstanding at the end of the period (in shares) | 310,537 | 310,537 | ||
Options fully vested and those expected to vest (in shares) | 310,537 | 310,537 | ||
Options exercisable | 245,693 | 245,693 | ||
Weighted Average Exercise Price | ||||
Outstanding at the beginning of the period (in dollars per share) | $ 15.48 | |||
Forfeited, cancelled or expired (in dollars per share) | 24.25 | |||
Outstanding at the end of the period (in dollars per share) | $ 15.37 | 15.37 | ||
Options fully vested and those expected to vest (in dollars per share) | 15.37 | 15.37 | ||
Exercisable (in dollars per share) | $ 18.98 | $ 18.98 | ||
Weighted Average Remaining Contractual Term (in years) | ||||
Outstanding at the end of the period | 4 years 10 months 24 days | |||
Options fully vested and those expected to vest | 4 years 10 months 24 days | |||
Exercisable | 3 years 10 months 24 days | |||
Weighted-average assumptions used to calculate estimated fair value of each stock option | ||||
Risk-free interest rates (as a percent) | 1.30% | |||
Expected lives (in years) | 5 years 8 months 12 days | |||
Expected volatility (as a percent) | 133.90% | |||
Weighted average grant date fair value of options granted during the period (in dollars per share) | $ 1.52 | |||
Additional disclosure | ||||
Total compensation cost related to unvested stock option awards | $ 100,000 | $ 100,000 | ||
Share based compensation expenses | $ 8,000 | $ 3,000 | $ 17,000 | $ 3,000 |
Weighted average period for recognizing compensation cost | 2 years 10 months 24 days |
Stock-Based Compensation - RSU'
Stock-Based Compensation - RSU's and PRSU's (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Aug. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Jul. 31, 2017 | |
Additional disclosure | ||||||
Share based compensation expenses | $ 153 | $ 241 | $ 307 | $ 479 | ||
Employee Stock Purchase Plan | ||||||
Additional disclosure | ||||||
Number of shares available for future grant | 570,000 | 570,000 | 70,000 | |||
Increase in common stock available under the plan | 500,000 | |||||
Restricted stock units | ||||||
Weighted Average Grant-Date Fair Value | ||||||
Granted (in dollars per share) | $ 0.62 | $ 1.71 | $ 0.67 | $ 1.71 | ||
Additional disclosure | ||||||
Assumed forfeiture (in shares) | 0 | |||||
Share based compensation expenses | $ 144 | $ 188 | $ 287 | $ 375 | ||
Aggregate fair value of restricted stock units vested and issued | 130 | $ 85 | 137 | $ 107 | ||
Unrecognized compensation cost | $ 500 | $ 500 | ||||
Restricted stock units | Awards vesting over four years with one-fourth units vesting one year after the issuance date | ||||||
Additional disclosure | ||||||
Vesting period | 4 years | |||||
Awards vesting percentage | 25.00% | |||||
Vesting period of awards after issuance date | 1 year | |||||
PRSU Program | ||||||
Shares | ||||||
Nonvested, balance at the beginning of the period (in shares) | 316,709 | |||||
Granted (in shares) | 474,848 | |||||
Vested and issued (in shares) | (212,924) | |||||
Forfeited (in shares) | (9,513) | |||||
Nonvested, balance at the end of the period (in shares) | 569,120 | 569,120 | ||||
Awards expected to vest (in shares) | 569,097 | 569,097 | ||||
Weighted Average Grant-Date Fair Value | ||||||
Nonvested restricted stock units outstanding at the beginning of the period (in dollars per share) | $ 2.85 | |||||
Granted (in dollars per share) | 0.64 | |||||
Vested and issued (in dollars per share) | 2.76 | |||||
Forfeited (in dollars per share) | 2.49 | |||||
Nonvested restricted stock units outstanding at the end of the period (in dollars per share) | $ 1.05 | 1.05 | ||||
Awards expected to vest (in dollars per share) | $ 1.05 | $ 1.05 | ||||
Restricted Stock Awards | ||||||
Shares | ||||||
Granted (in shares) | 1,953 | 29,910 | 3,969 | 62,111 | ||
Weighted Average Grant-Date Fair Value | ||||||
Granted (in dollars per share) | $ 0.64 | $ 1.69 | $ 0.63 | $ 1.63 | ||
Additional disclosure | ||||||
Share based compensation expenses | $ 1 | $ 50 | $ 3 | $ 101 | ||
Weighted average period for recognizing compensation cost | 1 year 2 months 12 days | |||||
Non-employee director | Restricted stock units | ||||||
Additional disclosure | ||||||
Vesting period | 1 year |
Stock-Based Compensation - Gran
Stock-Based Compensation - Grants outside of 2000 Plan and 2017 Plan (Details) - shares | 3 Months Ended | 6 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2017 | Mar. 31, 2017 | |
Stock options | |||
Class of Stock | |||
Options outstanding (in shares) | 310,537 | 310,537 | 314,537 |
Granted (in shares) | 0 | 0 | |
Stock options | Non-qualified stock options | |||
Class of Stock | |||
Portion vesting one year after the issuance date (as a percent) | 25.00% | ||
Vesting period after one year of grant | 1 year | ||
Vesting period of awards after issuance date | 48 months | ||
Portion vesting on first day of each month after one year from the issuance date (as a percent) | 2.083% | ||
Vesting period | 4 years | ||
Expiration Term | 10 years | ||
Stock options | Non-qualified stock options | Vice President, Manufacturing | |||
Class of Stock | |||
Options outstanding (in shares) | 88,930 | 88,930 | |
Restricted stock units | Vice President, Manufacturing | |||
Class of Stock | |||
Restricted stock units outstanding (in shares) | 11,115 | 11,115 |
Stock-Based Compensation - St42
Stock-Based Compensation - Stockholder Rights Plan (Details) | May 06, 2016Vote$ / shares | Sep. 30, 2017$ / shares | Mar. 31, 2017$ / shares |
Stockholder Rights Plan | |||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Series B Junior Participating Preferred Stock | |||
Stockholder Rights Plan | |||
Preferred share purchase rights period | 30 days | ||
Preferred share purchase right ratio | 1 | ||
Preferred stock conversion basis | 0.001 | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | ||
Purchase price (in dollars per share) | $ 8.76 | ||
Period following public announcement of beneficial ownership acquired by various persons resulting in rights becoming exercisable | 10 days | ||
Period following commencement of tender offer or exchange offer that would result in acquisition of beneficial ownership various persons resulting in rights becoming exercisable | 10 days | ||
Preferred stock dividend minimum if declared | $ 1 | ||
Preferred stock rights ratio over common stock | 1,000 | ||
Number of votes per share | Vote | 1,000 | ||
Ratio of consideration received in event of conversion or exchange transaction | 1,000 | ||
Series B Junior Participating Preferred Stock | Minimum | |||
Stockholder Rights Plan | |||
Beneficial ownership of common stock (as a percent) | 4.99% |
Offerings of Common Stock and43
Offerings of Common Stock and Warrants and At-the-Market Offering Program (Details) - USD ($) | Oct. 21, 2016 | Oct. 18, 2016 | Apr. 22, 2016 | Apr. 19, 2016 | Aug. 28, 2015 | Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Aug. 31, 2017 |
Number of common stock shares available to accredited investors | 3,600,000 | |||||||||
Share price of common stock sold (in dollars per share) | $ 1.20 | |||||||||
Loss on adjustment of exercise price | $ 657,000 | $ 657,000 | ||||||||
Net proceeds from offering of common stock and warrants | $ 6,800,000 | $ 13,100,000 | 3,987,000 | $ 13,113,000 | ||||||
Number of common stock shares available in public offering | 2,700,000 | |||||||||
Beneficial ownership of common stock resulting from purchase of stock in public offering (as a percent) | 4.99% | |||||||||
Number of warrants or shares of common stock to be sold to purchase common stock | 2 | |||||||||
Aggregate offering price for at-the-market offering program | $ 12,200,000 | |||||||||
Common stock sold (in shares) | 2,400,000 | 5,800,000 | 13,100,000 | |||||||
Net proceeds from sale of the common stock, after deducting fees and other offering expenses (in dollars) | $ 1,400,000 | $ 4,000,000 | $ 16,800,000 | |||||||
Common stock commissions paid | 45,000 | 100,000 | $ 500,000 | |||||||
Maximum | ||||||||||
Aggregate offering price for at-the-market offering program | $ 30,000,000 | |||||||||
Series A Warrants | ||||||||||
Number of shares of common stock that could be purchased with warrants | 4,100,000 | |||||||||
Exercise price (in dollars per share) | $ 1.34 | $ 3.50 | $ 0.65 | |||||||
Loss on adjustment of exercise price | $ 700,000 | $ 700,000 | ||||||||
Number of warrants or shares of common stock to be sold to purchase common stock | 1 | |||||||||
Number of shares of common stock purchased with each warrant | 1 | |||||||||
Length of time from issue date until warrants are exercisable | 6 months | |||||||||
Length of time from exercise date until warrants expire | 5 years | |||||||||
Outstanding warrants (in shares) | 10,407,500 | 10,407,500 | 10,407,500 | |||||||
Series A Warrants | Maximum | ||||||||||
Number of shares of common stock that could be purchased with warrants | 6,300,000 | |||||||||
Series B Warrants | ||||||||||
Number of shares of common stock that could be purchased with warrants | 2,700,000 | |||||||||
Exercise price (in dollars per share) | $ 1.20 | $ 3.48 | ||||||||
Exercise price pre-funded at closing (in dollars per share) | 1.19 | |||||||||
Exercise price, payable upon exercise (in dollars per share) | $ 0.01 | |||||||||
Number of warrants or shares of common stock to be sold to purchase common stock | 2 | |||||||||
Length of time from exercise date until warrants expire | 9 months | |||||||||
Outstanding warrants (in shares) | 0 | 0 | 0 | |||||||
Series B Warrants | Maximum | ||||||||||
Number of shares of common stock that could be purchased with warrants | 5,500,000 |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring (Details) - Recurring - USD ($) $ in Thousands | Sep. 30, 2017 | Mar. 31, 2017 |
Total | ||
Fair Value Measurements | ||
Cash equivalents | $ 7,520 | |
Restricted cash | $ 5,000 | 5,514 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value Measurements | ||
Cash equivalents | 7,520 | |
Restricted cash | $ 5,000 | $ 5,514 |
Fair Value Measurements - Oblig
Fair Value Measurements - Obligations (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Mar. 31, 2017 |
Carrying Value | ||
Fair Value Measurements | ||
Obligations under the Credit Facility | $ 9,575 | $ 11,533 |
Total | ||
Fair Value Measurements | ||
Obligations under the Credit Facility | $ 9,575 | $ 11,533 |
Fair Value Measurements _ Adopt
Fair Value Measurements – Adoption of ASU 2017-11 (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Sep. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Additional Paid-in Capital | $ 879,639 | $ 874,697 | $ 879,639 |
Accumulated deficit | (859,959) | (852,199) | (859,959) |
Change in fair value of warrant liability | $ (657) | $ (657) | |
ASU 2017-11 | Prior to adoption | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Warrant Liability | 2,917 | ||
Additional Paid-in Capital | 870,457 | ||
Accumulated deficit | (850,876) | ||
ASU 2017-11 | Reclassified warrant liability | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Warrant Liability | (4,240) | ||
Additional Paid-in Capital | 4,240 | ||
ASU 2017-11 | Reclassified unrealized gain on warrant liability | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Warrant Liability | 1,323 | ||
Accumulated deficit | (1,323) | ||
Change in fair value of warrant liability | $ 500 |
Revolving Credit Facility (Deta
Revolving Credit Facility (Details) | Jun. 02, 2017USD ($)agreement | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)agreement | Sep. 30, 2016USD ($) | Mar. 31, 2017USD ($) |
Revolving Credit Facility | ||||||
Outstanding borrowings | $ 9,575,000 | $ 9,575,000 | $ 11,533,000 | |||
Interest expense | $ 98,000 | $ 129,000 | 319,000 | $ 263,000 | ||
Amortization of deferred financing costs | $ 133,000 | 86,000 | ||||
Borrowing rate (as a percent) | 5.80% | 5.80% | 4.90% | |||
Wells Fargo | ||||||
Revolving Credit Facility | ||||||
Number of credit and security agreements | agreement | 2 | |||||
Bridge Bank | ||||||
Revolving Credit Facility | ||||||
Number of secured credit facilities | agreement | 2 | |||||
Term of credit agreements | 2 years | |||||
Maximum borrowings as a percent of cash held | 85.00% | |||||
Credit Facility | Wells Fargo | ||||||
Revolving Credit Facility | ||||||
Maximum borrowing capacity under facility | $ 20,000,000 | $ 20,000,000 | ||||
Outstanding borrowings | 6,200,000 | 6,200,000 | $ 11,500,000 | |||
Interest expense | 100,000 | 200,000 | 300,000 | |||
Amortization of deferred financing costs | $ 42,000 | 100,000 | $ 100,000 | |||
Credit Facility | Bridge Bank | ||||||
Revolving Credit Facility | ||||||
Maximum borrowing capacity under facility | $ 12,000,000 | |||||
Outstanding borrowings | 9,600,000 | 9,600,000 | ||||
Interest expense | 100,000 | 200,000 | ||||
Amortization of deferred financing costs | $ 28,000 | $ 46,000 | ||||
Restricted cash equivalents for credit facility | 5,000,000 | |||||
Origination fees | $ 200,000 | |||||
Credit Facility | Bridge Bank | Prime Rate | ||||||
Revolving Credit Facility | ||||||
Variable base rate | prime rate | |||||
Interest margin on variable rate | 1.50% |
Accrued Warranty Reserve (Detai
Accrued Warranty Reserve (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Dec. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Maximum period of product warranties | 18 months | ||
Provision for warranty expenses | $ 995 | $ 775 | |
Balance of warranty provision | 3,766 | ||
Accrued Warranty Reserve | |||
Balance, beginning of the period | 3,766 | ||
Standard warranty provision | 1,190 | ||
Accrual related to reliability repair programs | (195) | ||
Deductions for warranty claims | (2,199) | ||
Balance, end of the period | 2,562 | ||
C200 | |||
Provision for warranty expenses | $ 5,200 | ||
Balance of warranty provision | 700 | ||
Accrued Warranty Reserve | |||
Balance, end of the period | $ 700 |
Deferred Revenue (Details)
Deferred Revenue (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Mar. 31, 2017 | |
Deferred Revenue | |||
Increase in deposits | $ 100 | ||
Change in balance attributed to FPP contracts | (49) | $ 153 | |
Changes in deferred revenue | |||
Deferred revenue balance, end of the period | 4,999 | $ 5,050 | |
FPP agreements | |||
Deferred Revenue | |||
Change in balance attributed to FPP contracts | (100) | ||
Changes in deferred revenue | |||
FPP Balance, beginning of the period | 3,414 | ||
FPP Billings | 7,164 | ||
FPP Revenue recognized | (7,309) | ||
Balance attributed to FPP contracts | 3,269 | ||
Deposits | 1,730 | ||
Deferred revenue balance, end of the period | $ 4,999 |
Other Current Liabilities (Deta
Other Current Liabilities (Details) - Carrier $ in Millions | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)kW | Sep. 30, 2016USD ($) | Mar. 31, 2017USD ($) | |
Other Current Liabilities | |||||
Capacity of microturbine (in kW) | kW | 200 | ||||
Royalties earned | $ 0.2 | $ 0.1 | $ 0.5 | $ 0.3 | |
Unpaid earned royalties | $ 0.2 | $ 0.2 | $ 0.3 |
Commitments and Contingencies -
Commitments and Contingencies - Purchase and Lease Commitments (Details) - USD ($) | Jun. 07, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Mar. 31, 2017 |
Lease Commitments | ||||||
Renewal option period | 5 years | |||||
Deferred rent | $ 100,000 | $ 100,000 | $ 200,000 | |||
Rent expense | 600,000 | $ 600,000 | 1,100,000 | $ 1,200,000 | ||
Inventory | ||||||
Commitments and Contingencies | ||||||
Commitment to purchase inventories | $ 23,300,000 | $ 23,300,000 | ||||
Van Nuys Fourth Amendment | ||||||
Lease Commitments | ||||||
Operating Lease, Extension Term | 62 months | |||||
Monthly base rent payable for the first agreed period | $ 0 | |||||
Monthly base rent payable for the second agreed period | 66,846 | |||||
Monthly base rent payable for the third agreed period | 68,852 | |||||
Monthly base rent payable for the fourth agreed period | 70,917 | |||||
Monthly base rent payable for the fifth agreed period | 73,045 | |||||
Monthly base rent payable for the sixth agreed period | 75,236 | |||||
Monthly base rent payable for the seventh agreed period | $ 77,493 | |||||
Operating Lease, Period Available under Options for Lease Extension | 5 years |
Commitments and Contingencies52
Commitments and Contingencies - Other Commitments and Legal Matters (Details) | Jul. 18, 2016action | Dec. 18, 2015complaint |
Legal matters | ||
Number of putative securities class action complaints filed against the Company | complaint | 2 | |
Number of additional purported shareholder derivative actions filed | action | 2 |
Net Loss Per Common Share - Ant
Net Loss Per Common Share - Antidilutive Securities (Details) - shares shares in Millions | 6 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Antidilutive stock options and restricted stock units | ||
Net Loss Per Common Share | ||
Antidilutive securities excluded from diluted net loss per common share computations | 0.9 | 0.8 |
Warrants | ||
Net Loss Per Common Share | ||
Antidilutive securities excluded from diluted net loss per common share computations | 10.4 | 5.5 |
Subsequent Events (Details)
Subsequent Events (Details) $ / shares in Units, $ in Millions | Oct. 27, 2017USD ($)$ / shares | Oct. 18, 2017USD ($) | Oct. 13, 2017USD ($)payment | Sep. 13, 2017USD ($) | Sep. 30, 2017USD ($)$ / shares | Sep. 30, 2017USD ($)$ / shares | Sep. 30, 2017USD ($)$ / shares | Oct. 26, 2017$ / sharesshares | Aug. 31, 2017$ / shares | Mar. 31, 2017$ / shares | Oct. 18, 2016$ / shares | Apr. 19, 2016$ / sharesshares |
Subsequent Event Items | ||||||||||||
Net proceeds from equity issuances | $ 1.4 | $ 4 | $ 16.8 | |||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||
Subsequent event | ||||||||||||
Subsequent Event Items | ||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | |||||||||||
Reduction of warrants to purchase common stock (as a percent) | 19.00% | |||||||||||
Turbine International, LLC. and MTE Service | Subsequent event | ||||||||||||
Subsequent Event Items | ||||||||||||
Proceeds from sale of distribution rights | $ 6.3 | |||||||||||
Turbine International, LLC. and MTE Service | Accounts Receivable Agreement | ||||||||||||
Subsequent Event Items | ||||||||||||
Proceeds from sale of receivables | $ 0.1 | |||||||||||
Turbine International, LLC. and MTE Service | Accounts Receivable Agreement | Subsequent event | ||||||||||||
Subsequent Event Items | ||||||||||||
Total consideration receivable | $ 2.5 | |||||||||||
Number of payments to be received | payment | 3 | |||||||||||
Turbine International, LLC. and MTE Service | Promissory Note Agreement | Subsequent event | ||||||||||||
Subsequent Event Items | ||||||||||||
Total consideration receivable | $ 3.8 | |||||||||||
Number of payments to be received | payment | 35 | |||||||||||
Term of payments | 3 years | |||||||||||
Series A Warrants | ||||||||||||
Subsequent Event Items | ||||||||||||
Number of shares of common stock that could be purchased with warrants | shares | 4,100,000 | |||||||||||
Exercise price (in dollars per share) | $ / shares | $ 0.65 | $ 1.34 | $ 3.50 | |||||||||
Series A Warrants | Subsequent event | ||||||||||||
Subsequent Event Items | ||||||||||||
Number of shares of common stock that could be purchased with warrants | shares | 1,928,750 | |||||||||||
Exercise price (in dollars per share) | $ / shares | $ 0.90 | |||||||||||
Net proceeds from equity issuances | $ 1.7 |