Capstone Energy Plus, Inc 10-Q for FY2023 Q1

Capstone Energy Plus, Inc. (CEPL)

10-Q 2022-08-11 For: 2022-06-30

Added on April 06, 2026

About this 10-Q

Capstone Energy Plus, Inc filed this 10-Q on August 11, 2022, covering the quarter ended June 30, 2022 (FY2023 Q1).

Headline figures

Quarter ended June 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $18.65M; up 16.0% from $16.08M a year earlier
Net loss: $2.06M; compared with a net loss of $2.18M a year earlier
Diluted EPS: -$0.13; compared with -$0.16 a year earlier

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Delaware		95-4180883
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

16640 Stagg Street Van Nuys, California (Address of principal executive offices)		91406 (Zip Code)


Title of each class	Trading Symbol(s)	Name of exchange on which registered
Common Stock, par value $.001 per share	CGRN	NASDAQ Capital Market
Series B Junior Participating Preferred Stock Purchase Rights


Large accelerated filer ☐	Accelerated filer ☐	Non-accelerated filer ☒	Smaller reporting company ☒
Emerging growth company ☐

		Page Number
PART I — FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	3

	Condensed Consolidated Balance Sheets as of June 30, 2022 and March 31, 2022	3

	Condensed Consolidated Statements of Operations for the Three Months Ended June 30, 2022 and 2021	4

	Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended June 30, 2022 and 2021	5

	Condensed Consolidated Statements of Cash Flows for the Three Months Ended June 30, 2022 and 2021	6

	Notes to Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25

Item 4.	Controls and Procedures	37

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	37

Item 1A.	Risk Factors	37

Item 6.	Exhibits	39

Signatures		40


	June 30,		March 31,
	2022		2022
Assets
Current Assets:
Cash and cash equivalents	$	16,914	$	22,559
Accounts receivable, net of allowances of $850 at June 30, 2022 and $845 at March 31, 2022		24,168		24,665
Inventories, net		18,608		18,465
Prepaid expenses and other current assets		6,468		5,519
Total current assets		66,158		71,208
Property, plant, equipment and rental assets, net		21,694		18,038
Non-current portion of accounts receivable		1,056		1,212
Non-current portion of inventories		2,013		1,680
Other assets		8,933		8,635
Total assets	$	99,854	$	100,773
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable and accrued expenses	$	22,238	$	25,130
Accrued salaries and wages		1,360		1,147
Accrued warranty reserve		1,527		1,483
Deferred revenue		9,694		9,185
Current portion of notes payable and lease obligations		1,930		675
Total current liabilities		36,749		37,620
Deferred revenue - non-current		934		981
Term note payable, net		50,957		50,949
Long-term portion of notes payable and lease obligations		7,627		5,809
Total liabilities		96,267		95,359
Commitments and contingencies (Note 14)
Stockholders’ Equity:
Preferred stock, $.001 par value; 1,000,000 shares authorized; none issued		—		—
Common stock, $.001 par value; 51,500,000 shares authorized, 15,431,602 shares issued and 15,320,673 shares outstanding at June 30, 2022; 15,398,368 shares issued and 15,296,735 shares outstanding at March 31, 2022		15		15
Additional paid-in capital		947,237		946,969
Accumulated deficit		(941,541)		(939,482)
Treasury stock, at cost; 110,929 shares at June 30, 2022 and 101,633 shares at March 31, 2022		(2,124)		(2,088)
Total stockholders’ equity		3,587		5,414
Total liabilities and stockholders' equity	$	99,854	$	100,773


	Three Months Ended
	June 30,
	2022		2021
Revenue:
Product and accessories	$	9,167	$	8,389
Parts, service and rentals		9,485		7,693
Total revenue		18,652		16,082
Cost of goods sold:
Product and accessories		8,891		8,992
Parts, service and rentals		5,055		4,442
Total cost of goods sold		13,946		13,434
Gross margin		4,706		2,648
Operating expenses:
Research and development		490		883
Selling, general and administrative		4,919		5,324
Total operating expenses		5,409		6,207
Loss from operations		(703)		(3,559)
Other income		2		665
Interest income		6		5
Interest expense		(1,362)		(1,235)
Gain (loss) on debt extinguishment		—		1,950
Loss before provision for income taxes		(2,057)		(2,174)
Provision for income taxes		2		8
Net loss		(2,059)		(2,182)

Net loss per common share attributable to common stockholders—basic and diluted	$	(0.13)	$	(0.16)
Weighted average shares used to calculate basic and diluted net loss per common share attributable to common stockholders		15,318		13,226


				Additional							Total
	Common Stock			Paid-in		Accumulated		Treasury Stock			Stockholders’
	Shares	Amount		Capital		Deficit		Shares	Amount		Equity
Balance, March 31, 2022	15,398,368	$	15	$	946,969	$	(939,482)	101,633	$	(2,088)	$	5,414
Purchase of treasury stock	—		—		—		—	9,296		(36)		(36)
Vested restricted stock awards	33,234		—		36		—	—		—		36
Stock-based compensation	—		—		232		—	—		—		232
Net loss	—		—		—		(2,059)	—		—		(2,059)
Balance, June 30, 2022	15,431,602	$	15	$	947,237	$	(941,541)	110,929	$	(2,124)	$	3,587


		Non-current Inventory
		Balance Expected
Expected Period of Use		to be Used
13 to 24 months	$	766
25 to 36 months		1,247
Total	$	2,013


		Weighted
		Average Grant
		Date Fair
Restricted Stock Units and Performance Restricted Stock Units	Shares	Value
Non-vested restricted stock units outstanding at March 31, 2022	591,805	$	5.66
Granted	200,889		2.44
Vested and issued	(33,234)		8.58
Forfeited	(96,176)		4.86
Non-vested restricted stock units outstanding at June 30, 2022	663,284		4.65
Restricted stock units expected to vest beyond June 30, 2022	663,284	$	4.65


	Three Months Ended June 30,
	2022		2021
Restricted stock compensation expense (in thousands)	$	232	$	305
Aggregate fair value of restricted stock units vested and issued (in thousands)	$	129	$	160
Weighted average grant date fair value of restricted stock units granted during the period	$	2.44	$	6.35


Risk-free interest rate		0.2%
Contractual term		3 years
Expected volatility		81.0%


	As of				As of
	June 30, 2022				March 31, 2022
	Carrying		Estimated		Carrying		Estimated
	Value		Fair Value		Value		Fair Value
Term note payable	$	50,957	$	51,000	$	50,949	$	51,000
PPP loan		—		—		—		—
Total	$	50,957	$	51,000	$	50,949	$	51,000


Balance, beginning of the period	$	1,483
Standard warranty provision		174
Deductions for warranty claims		(130)
Balance, end of the period	$	1,527


FPP Balance, beginning of the period	$	4,544
FPP Billings		5,316
FPP Revenue recognized		(4,812)
Balance attributed to FPP contracts		5,048
DSS Program		1,993
Deposits		3,587
Deferred revenue balance, end of the period	$	10,628


	June 30, 2022		March 31, 2022
Operating lease right-of-use assets	$	6,321	$	5,959
Total operating lease right-of-use assets	$	6,321	$	5,959

Operating lease liability, current	$	764	$	586
Operating lease liability, non-current		5,774		5,619
Total operating lease liabilities	$	6,538	$	6,205

Weighted average remaining lease life		7.77 years		8.35 years

Weighted average discount rate		12.00%		12.00%


	June 30,		March 31,
	2022		2022
Raw materials	$	22,624	$	20,071
Work in process		—		—
Finished goods		—		1,935
Total		22,624		22,006
Less: inventory reserve		(2,003)		(1,861)
Less: non-current portion		(2,013)		(1,680)
Total inventory, net-current portion	$	18,608	$	18,465


	June 30,		March 31,
	2022		2022
Machinery, equipment, automobiles and furniture	$	16,156	$	15,945
Leasehold improvements		8,868		8,848
Molds and tooling		3,499		3,469
Rental assets		21,135		17,079
		49,658		45,341
Less: accumulated depreciation		(27,964)		(27,303)
Total property, plant, equipment and rental assets, net	$	21,694	$	18,038


	Three Months Ended June 30,
	2022		2021
United States	$	11,676	$	7,343
Mexico		610		441
All other North America		631		39
Total North America		12,917		7,823
Russia		340		1,257
All other Europe		3,635		2,785
Total Europe		3,975		4,042
Asia		471		364
Australia		714		1,411
All other		575		2,442
Total Revenue	$	18,652	$	16,082


	Operating
Year Ending March 31,	Leases
2023 (remainder of fiscal year)	$	1,128
2024		1,529
2025		1,453
2026		1,243
2027		1,279
Thereafter		3,358
Total lease payments	$	9,990
Less: imputed interest		(3,452)
Present value of operating lease liabilities	$	6,538


Exhibit Number		Description
3.1		Conformed Copy of Second Amended and Restated Certificate of Incorporation of Capstone Green Energy Corporation, as amended through April 22, 2021 (b)
3.2		Conformed Copy of Fifth Amended and Restated Bylaws of Capstone Green Energy Corporation effective as of April 22, 2021, as amended through August 26, 2021 (a)
4.1		Amended and Restated Note Purchase Agreement, dated as of October 1, 2020, by and among Capstone Turbine Corporation, certain subsidiaries of the Company and Goldman Sachs Specialty Lending Group, L.P. (as successor in interest to Goldman Sachs Specialty Lending Holdings, Inc.) (c)
4.2		First Amendment to the Amended and Restated Note Purchase Agreement, dated as of May 13, 2021 by and among Capstone Green Energy Corporation, certain subsidiaries of the Company and Goldman Sachs Specialty Lending Group, L.P. (d)
4.3		Capstone Green Energy Corporation 2017 Equity Incentive Plan, as amended through August 27, 2021 (a)
4.4		Second Amendment to the Amended and Restated Note Purchase Agreement dated as of July 13, 2022, by and among Capstone Green Energy Corporation, certain subsidiaries of the Company, the purchaser party thereto and Goldman Sachs Specialty Lending Group, L.P. (e)
10.1		Consulting Agreement between Capstone Green Energy Corporation and Capstone Engineered Solutions, dated May 22, 2022 (e)
10.2		National Account Agreement between Capstone Green Energy Corporation and Capstone Engineered Solutions, dated May 20, 2022 (e)
10.3		Installation Agreement between Capstone Green Energy Corporation and Capstone Engineered Solutions Corporation (e)
31.1		Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32		Certification of Chief Executive Officer and Chief Financial Officer 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document
101.SCH		XBRL Schema Document
101.CAL		XBRL Calculation Linkbase Document
101.LAB		XBRL Label Linkbase Document
101.PRE		XBRL Presentation Linkbase Document
101.DEF		XBRL Definition Linkbase Document
104		The cover page from Capstone Green Energy Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, formatted in Inline XBRL and contained in Exhibit 101

	CAPSTONE GREEN ENERGY CORPORATION


	By:	/s/ SCOTT W. ROBINSON
		Scott W. Robinson
		Interim Chief Financial Officer
		(Principal Financial Officer)
Date: August 11, 2022


Date: August 11, 2022	By:	/s/ DARREN R. JAMISON
		Darren R. Jamison
		President and Chief Executive Officer (Principal Executive Officer)


	By:	/s/ DARREN R. JAMISON
		Darren R. Jamison
		President and Chief Executive Officer (Principal Executive Officer)


	By:	/s/ SCOTT W. ROBINSON
		Scott W. Robinson
		Interim Chief Financial Officer (Principal Financial Officer)

Date: August 11, 2022