What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-10-30 compared with 2024-08-06 · 100 added, 67 removed, 182 unchanged (48% of the section changed)

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Risk Factors” and in Part I under “Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” and located elsewhere herein regarding industry prospects, our prospective results of operations or financial position, the benefits of our acquisitions of Northeast Power Systems, Inc.

("NEPSI") and Neeltran, Inc.

("Neeltran"), contingent payments related to the NEPSI acquisition, changes in macroeconomic and market conditions, including increasing inflation and impacts from sourcing, production disruption, material delays and global supply chain disruptions and adoption of accounting changes may be deemed to be forward-looking statements.

("Megatran") together with its wholly-owned subsidiaries and affiliates

, changes in macroeconomic and market conditions, including inflationary pressure and impacts from sourcing, production disruption, material delays and global supply chain disruptions and adoption of accounting changes may be deemed to be forward-looking statements.

Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” and similar expressions are intended to identify forward-looking statements.

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While the impact of inflation has been challenging, we continue to take actions to limit this pressure including adjusting the pricing of our products and services.

Changes in macroeconomic conditions arising from various reasons, such as the ongoing wars between Russia and Ukraine and Israel and Hamas, inflation, rising interest rates, labor force availability, sourcing, material delays and global supply chain disruptions, could have a material adverse effect on the Company’s business, financial condition and results of operation.

In February 2023, we completed the process of determining and verifying our eligibility and amount of payroll tax credits known as the Employee Retention Credit (“ERC”) under the CARES Act which Congress enacted as part of the Taxpayer Certainty and Disaster Tax Relief Act of 2020.

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On August 1, 2024, we entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with the selling stockholders named therein.

The Megatran purchase price was $30.0 million in cash on hand, and 1,297,600 restricted shares of our common stock.

Megatran is a U.S.-based global provider of engineered power conversion solutions for demanding industrial and military applications.

As a result of this transaction, Megatran became a wholly-owned subsidiary and will be operated by our Grid business unit.

Pursuant to the terms of the Stock Purchase Agreement and concurrently with entering into such agreement, the Company acquired all of the issued and outstanding shares of Megatran, for aggregate consideration in an amount equal to $61.4 million, as may be adjusted pursuant to the Stock Purchase Agreement (the “Purchase Price”), including a cash payment after closing of $5.0 million, as adjusted pursuant to Sections 5.6(c), (d), and (f) of the Stock Purchase Agreement (the “Additional Cash Purchase Price”).

At closing, we paid to Megatran's selling stockholders $25.0 million in cash on hand, and 1,297,600 restricted shares of our common stock.

On September 23, 2024, the Company paid the Additional Cash Purchase Price to the selling stockholders, which was calculated based on the agreed upon formula set forth in the Stock Purchase Agreement, in the amount of $8.3 million.

Megatran's wholly-owned subsidiary, NWL, Inc.

("NWL"), is a U.S.-based global provider of engineered power conversion solutions for demanding industrial and military applications.

As a result of this transaction, Megatran became a wholly-owned subsidiary and is operated by our Grid business unit.

Critical Accounting Policies and Estimates

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Actual results may differ under different assumptions or conditions.

Certain prior period amounts were reclassified to conform to the presentation in the current period.

There were no significant changes in the critical accounting policies that were disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024.

Equity Method Investments

We treat the equity investment in the condensed consolidated financial statements under the equity method.

Equity method investments are equity securities in entities we do not control but over which we have the ability to exercise significant influence.

These investments are accounted for under the equity method of accounting in accordance with ASC 323, Investments — Equity Method and Joint Ventures .

Equity method investments are measured at cost minus impairment, if any, plus or minus the Company’s share of an investee’s income or loss, less distributions received.

Other than those noted here, there were no significant changes in the critical accounting policies that were disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024.

Results of Operations

Three months ended June 30, 2024 , compared to the three months ended June 30, 2023

Total revenues increased 33% to $40.3 million for the three months ended June 30, 2024, compared $30.3 million for the three months ended June 30, 2023.

Three and six months ended September 30, 2024 , compared to the three and six months ended September 30, 2023

Total revenues increased 60% to $54.5 million for the three months ended September 30, 2024 and total revenues increased 47% to $94.8 million for the six months ended September 30, 2024, compared to $34.0 million and $64.3 million for the three and six months ended September 30, 2023, respectively.

Our revenues are summarized as follows (in thousands):

Three Months Ended June 30,

Our Grid business unit accounted for 80% of total revenues for the three months ended June 30, 2024, compared to 85% for the three months ended June 30, 2023.

Our Grid business unit revenues increased 26% to $32.3 million in the three months ended June 30, 2024, from $25.7 million in the three months ended June 30, 2023.

The increase in the Grid business unit revenues in the three months ended June 30, 2024, compared to the three months ended June 30, 2023 was primarily driven by increased shipments of new energy power systems than in the prior year period.

Our Wind business unit accounted for 20% of total revenues for the three months ended June 30, 2024, compared to 15% for the three months ended June 30, 2023.

Revenues in the Wind business unit increased 76% to $8.0 million in the three months ended June 30, 2024, from $4.5 million in the three months ended June 30, 2023.

The increase during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, was driven by additional shipments of electrical control systems ("ECS") at increased prices.

Three Months Ended September 30,

Six Months Ended September 30,

Our Grid business unit accounted for 86% and 84% of total revenues for the three and six months ended September 30, 2024, respectively, compared to 84% for each of the three and six months ended September 30, 2023.

Our Grid business unit revenues increased 65% to $46.9 million in the three months ended September 30, 2024, from $28.5 million in the three months ended September 30, 2023.

Our Grid business unit revenues increased 46% to $79.3 million in the six months ended September 30, 2024, from $54.3 million in the six months ended September 30, 2023.

The increase in the Grid business unit revenues in the three and six months ended September 30, 2024, compared to the three and six months ended September 30, 2023 was primarily driven by the acquisition of Megatran and increased shipments of new energy power systems than in the prior year periods.

Our Wind business unit accounted for 14% and 16% of total revenues for the three and six months ended September 30, 2024, respectively, compared to 16% for each of the three and six months ended September 30, 2023.

Revenues in the Wind business unit increased 37% and 55% to $7.5 million and $15.5 million in the three and six months ended September 30, 2024, respectively, from $5.5 million and $10.0 million in the three and six months ended September 30, 2023, respectively.

The increase during the three and six months ended September 30, 2024, compared to the three and six months ended September 30, 2023, was driven by additional shipments of electrical control systems ("ECS") at increased prices.

Cost of Revenues and Gross Margin

Cost of revenues increased by 17% to $28.1 millio n for the three months ended June 30, 2024 , compared to $24.0 million for the three months ended June 30, 2023.

Gross margin was 30% for the three months ended June 30, 2024 , compared to 21% for the three months ended June 30, 2023 .

The increase in gross margin in the three months ended June 30, 2024 was due to higher revenues, a more favorable product mix and favorable impacts across the business due to pricing increases across our product lines.

Cost of revenues increased by 53% to $38.9 millio n for the three months ended September 30, 2024 , compared to $25.4 million for the three months ended September 30, 2023.

Cost of revenues increased by 35% to $66.9 millio n for the six months ended September 30, 2024 , compared to $49.4 million for the six months ended September 30, 2023.

Gross margin was 29% and 29% for the three and six months ended September 30, 2024, respectively, compared to 25% and 23% for the three and six months ended September 30, 2023, respectively.

Cost of revenues includes total amortization expense of $0.2 million in the three months ended September 30, 2024, as a result of the Megatran acquired backlog intangible assets.

In addition, a fair value purchase adjustment of approximately $0.7 million for the step-up basis assigned to acquired inventory, to properly reflect the fair value in purchase accounting.

Of this adjustment, $0.3 million was charged to cost of revenues in the three months ended September 30, 2024, when the inventory sold.

The increase in gross margin in the three and six months ended September 30, 2024 was due to higher revenues, a favorable product mix and favorable impacts across the business due to pricing increases across our product lines.

Operating Expenses

Research and development

Research and development ("R&D") expenses increased 23% in the three months ended June 30, 2024 to $2.3 million from $1.9 million in the three months ended June 30, 2023 .

Research and development ("R&D") expenses increased 61% and 41% in the three and six months ended September 30, 2024 , respectively, to $2.6 million and $4.9 million from $1.6 million and $3.5 million in the three and six months ended September 30, 2023, respectively.

The increase was driven primarily by higher overall compensation expense and additional supplies and materials.

Selling, general, and administrative

Selling, general and administrative ("SG&A") expenses increased 13% in the three months ended June 30, 2024 to $ 8.9 million from $7.9 million in the three months ended June 30, 2023 .

The increase in SG&A expense in the three months ended June 30, 2024, was due to higher overall compensation expense and higher outside services expense.

Selling, general and administrative ("SG&A") expenses increased 32% and 23% in the three and six months ended September 30, 2024, respectively, to $ 10.5 million and $19.4 million from $7.9 million and $15.8 million in the three and six months ended September 30, 2023, respectively.

The increase in SG&A expense in the three and six months ended September 30, 2024, respectively, was due to higher overall compensation expense and higher acquisition costs.

Amortization of acquisition related intangibles

We recorded amortization expense related to our core technology and know-how, customer relationships, and other intangible assets of $ 0.4 million in the three months ended June 30, 2024 , and $0.5 million in the three months ended June 30, 2023 .

The decrease in amortization expense is a result of using the economic consumption method as the basis to amortize the acquired customer relationship intangible assets from NEPSI and Neeltran.

We recorded amortization expense related to our core technology and know-how, customer relationships, and other intangible assets of $ 0.4 million and $0.8 million in the three and six months ended September 30, 2024 , respectively, and $0.5 million and $1.1 million in the three and six months ended September 30, 2023, respectively.

The decrease in amortization expense is a result of using the economic consumption method as the basis to amortize the acquired customer relationship intangible assets from Northeast Power Systems, Inc.

("NEPSI") and Neeltran.

Change in fair value of contingent consideration

The change in fair value of our contingent consideration for the earnout payment on the acquisition of NEPSI resulted in losses of $3.9 million and $1.3 million in the three months ended June 30, 2024 and 2023, respectively.

The change in the fair value was primarily driven by an increased likelihood of achieving certain revenue targets and an increase in our stock price.

The change in fair value of our contingent consideration for the earnout payment on the acquisition of NEPSI resulted in a gain of $0.5 million from a decrease in fair value and a loss of $3.4 million resulting from an increase in fair value in the three and six months ended September 30, 2024, respectively.

During the three and six months ended September 30, 2024, we issued 300,000 shares of common stock of the Company to the selling stockholders following certification of the achievement of specified earnout revenue objectives.

We recorded the above noted changes, compared to losses of $0.9 million and $2.2 million in the three and six months ended September 30, 2023, respectively.

We also recorded a $3.3 million payment relating to the Megatran acquisition, as a payment to settle the remaining obligations after the acquisition.

The value of this contingent consideration was de minimus at the Acquisition Date and the resulting change in fair value was recorded during the three and six months ended September 30, 2024

Operating income (loss)

Our operating income (loss) is summarized as follows (in thousands):

Three Months Ended June 30,

Three Months Ended September 30,

Six Months Ended September 30,

Operating income (loss):

Unallocated corporate expenses

Ou r Grid business segment generated operating income of $ 0.9 million in the three months ended June 30, 2024 , compared to operating losses of $2.0 million in the three months ended June 30, 2023 .

The increase in the Grid business unit operating income in the three months ended June 30, 2024 was due to higher revenues and gross margins due to a favorable product mix .

Our Wind business segment generated operating income of $ 1.0 million in the three months ended June 30, 2024 , compared to operating losses of $0.6 million in the three months ended June 30, 2023 .

The improvement in the Wind business unit operating income in the three months ended June 30, 2024 was due to higher revenues and gross margins from increased sales of ECS units.

Unallocated corporate expenses included net losses on contingent consideration of $3.9 million and $1.3 million in the three months ended June 30, 2024 and 2023, respectively.

Additionally, unallocated corporate expenses consisted of stock-based compensation expense of $1.2 million and $1.4 million in the three months ended June 30, 2024 and 2023, respectively.

Ou r Grid business segment generated operating income of $ 2.3 million and $3.2 million in the three and six months ended September 30, 2024 , respectively, compared to operating losses of $0.7 million and $2.6 million in the three and six months ended September 30, 2023 , respectively.

The increase in the Grid business unit operating income in the three and six months ended September 30, 2024 was due to higher revenues and gross margins in part due to a favorable product mix .

Our Wind business segment generated operating income of $ 0.5 million and $1.5 million in the three and six months ended September 30, 2024 , respectively, compared to operating income of $0.3 million and operating loss of $0.4 million in the three and six months ended September 30, 2023 , respectively.

The improvement in the Wind business unit operating income in the three and six months ended September 30, 2024 was due to higher revenues and gross margins from increased sales of ECS units.

Unallocated corporate expenses included net losses on contingent consideration of $2.8 million and $6.7 million in the three and six months ended September 30, 2024, respectively, and net losses of $0.9 million and $2.2 million in the three and six months ended September 30, 2023, respectively.

Additionally, unallocated corporate expenses consisted of stock-based compensation expense of $0.8 million and $2.1 million in the three and six months ended September 30, 2024, respectively, and $1.1 million and $2.5 million in the three and six months ended September 30, 2023, respectively.

Interest income, net

Interest income, net, was $1.1 million in the three months ended June 30, 2024, compared to $0.2 million in the three months ended June 30, 2023.

The increase in interest income, net, in the three months ended June 30, 2024 was due to higher cash balances earning higher interest rates.

Interest income, net, was $1.0 million and $2.1 million in the three and six months ended September 30, 2024, respectively, compared to $0.2 million and $0.4 million in the three and six months ended September 30, 2023 , respectively.

The increase in interest income, net, in the three and six months ended September 30, 2024 was due to higher cash balances.

Other expense, net

Other expense, net, was $0.2 million in the three months ended June 30, 2024 , compared to $0.1 million in the three months ended June 30, 2023.

The increase in other expense, net, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, was driven by the impacts of unfavorable fluctuations in foreign currencies during the periods.

Income tax expense was $0.2 million in the three months ended June 30, 2024.

Income tax expense was $0.1 million in the three months ended June 30, 2023.

Net loss was $ 2.5 million in the three months ended June 30, 2024 , compared to $5.4 million in the three months ended June 30, 2023 .

The decrease in net loss was driven primarily by the increased revenues and gross margins.

Other expense, net, was $0.3 million and $0.5 million in the three and six months ended September 30, 2024 , respectively, compared to $0.2 million and $0.3 million in the three and six months ended September 30, 2023 , respectively.

The increase in other expense, net, during the three and six months ended September 30, 2024, compared to the three and six months ended September 30, 2023, was driven by the impacts of unfavorable fluctuations in foreign currencies during the periods.

Income tax benefit was $5.0 million and $4.8 million in the three and six months ended September 30, 2024 , respectively.

Income tax expense was $0.1 million and $0.2 million in the three and six months ended September 30, 2023 , respectively.

The improvement in income tax benefit was a result of the release of the valuation allowance due to the recording of the deferred tax liability from the acquisition of Megatran.

Net income (loss)

Net income was $ 4.9 million and $2.4 million in the three and six months ended September 30, 2024 , respectively, compared to net losses of $2.5 million and $7.9 million in the three and six months ended September 30, 2023, respectively.

The improvement in net loss was driven primarily by deferred tax liability recorded as a result of the Megatran acquisition as well as increased revenues and gross margins.

Non-GAAP Financial Measure - Non-GAAP Net Income (Loss)

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The non-GAAP measures included in this Quarterly Report on Form 10-Q, however, should be considered in addition to, and not as a substitute for or superior to the comparable measures prepared in accordance with GAAP.

We define non-GAAP net income (loss) as net loss before stock-based compensation, amortization of acquisition-related intangibles, change in fair value of contingent consideration, and other non-cash or unusual charges.

We define non-GAAP net income (loss) as net income (loss) before stock-based compensation, acquisition costs, amortization of acquisition-related intangibles, change in fair value of contingent consideration, and other non-cash or unusual charges.

We believe non-GAAP net income (loss) assists management and investors in comparing our performance across reporting periods on a consistent basis by excluding these non-cash charges and other items that we do not believe are indicative of our core operating performance.

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A reconciliation of GAAP to non-GAAP net income (loss) is set forth in the table below (in thousands, except per share data):

Three Months Ended June 30,

Three Months Ended September 30,

Six Months Ended September 30,

Net income (loss)

Stock-based compensation

Acquisition costs

Amortization of acquisition-related intangibles

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Weighted average shares outstanding - diluted

We incurred non-GAAP net income of $3.0 million, or $ 0.09 per share, for the three months ended June 30, 2024 , compared to non-GAAP net losses of $2.1 million, or $(0.08) per share, for the three months ended June 30, 2023 .

The improvement in the non-GAAP net income (loss) for the three months ended June 30, 2024 was due to a lower operating loss driven by higher revenues and gross margins.

We incurred non-GAAP net income of $10.0 million and $13.2 million, or $ 0.27 and $0.36 per share, for the three and six months ended September 30, 2024 , respectively, compared to a non-GAAP net income of less than $0.1 million and a non-GAAP net loss of $2.1 million, or $0.00 and $0.07 per share, for the three and six months ended September 30, 2023 , respectively.

The improvement in the non-GAAP net income (loss) for the three and six months ended September 30, 2024 was due to a lower operating loss driven by higher revenues and gross margins.

In the three months ended June 30, 2024, we excluded acquisition costs from the r econciliation of GAAP to non-GAAP net income (loss) as there was no definitive agreement with respect to the acquisition of Megatran as of June 30, 2024.

Liquidity and Capital Resources

We have experienced recurring operating losses and, as of June 30, 2024 , had an accumulated deficit of $1,069.2 millio n.

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

Our cash requirements depend on numerous factors, including the successful completion of our product development activities, our ability to commercialize our Resilient Electric Grid and ship protection system solutions, the rate of customer and market adoption of our products, collecting receivables according to established terms, the continued availability of U.S.

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We continue to closely monitor our expenses and, if required, expect to reduce our operating and capital spending to enhance liquidity.

In January 2024, we filed a shelf registration statement on Form S-3 that will expire three years from the date on which it was declared effective, March 15, 2027 (the “Form S-3”).

The Form S-3 allows us to offer and sell from time-to-time up to $250 million of common stock, debt securities, warrants or units comprised of any combination of these securities.

The Form S-3 is intended to provide us flexibility to conduct registered sales of our securities, subject to market conditions, in order to fund our future capital needs.

The terms of any future offering under the Form S-3 will be established at the time of such offering and will be described in a prospectus supplement filed with the SEC prior to the completion of any such offering.

In January 2024, we filed a shelf registration statement on Form S-3 that will expire three years from the date on which it was declared effective, March 15, 2027 (the “First Form S-3”).

The First Form S-3 allows us to offer and sell from time-to-time up to $250 million of common stock, debt securities, warrants or units comprised of any combination of these securities.

The First Form S-3 is intended to provide us flexibility to conduct registered sales of our securities, subject to market conditions, in order to fund our future capital needs.

The terms of any future offering under the First Form S-3 will be established at the time of such offering and will be described in a prospectus supplement filed with the SEC prior to the completion of any such offering.

On February 14, 2024, we completed a public offering of 6,210,000 shares of our common stock at a price of $11.25 per share under our then-existing Registration Statement on Form S-3.

We received net proceeds of approximately $65.2 million after deducting underwriting discounts and commissions and offering expenses.

As of June 30, 2024 , we had cash, cash equivalents and restricted cash of $95.5 million, compared to $92.3 million as of March 31, 2024, an increase of $3.2 million.

As of June 30, 2024 , we had $3.2 million in cash, cash equivalents, and restricted cash in foreign bank accounts.

As described above, on August 1, 2024, we acquired all of the issued and outstanding shares of Megatran, for aggregate consideration in an amount equal to $61.4 million (the “Purchase Price”), which consideration amount was subject to various adjustments set forth in the Stock Purchase Agreement (including those described below) and consisted of:

(a) (i) $25.0 million, minus (ii) the Indebtedness (as defined in the Stock Purchase Agreement) outstanding as of immediately prior to the closing, minus (iii) Company Expenses (as defined in the Stock Purchase Agreement) (collectively, the “Cash Purchase Price”);

(b) a number of restricted shares (rounded up or down to the nearest whole share, as applicable) (the “Company Shares”) of our common stock equal to the quotient obtained by dividing (x) $31.4 million by (y) the closing price per share of Common Stock on the Nasdaq Global Select Market on the last trading day immediately preceding August 1, 2024;

and (c) an additional cash payment equal to $5.0 million, as adjusted pursuant to Sections 5.6(c), (d), and (f) of the Stock Purchase Agreement.

Megatran is now a wholly-owned subsidiary of the Company and, together with its wholly-owned subsidiaries and affiliates, is operated and reported as a component of its Grid business unit.

On September 23, 2024, the Company paid the Additional Cash Purchase Price to the selling stockholders, which was calculated based on the agreed upon formula, in the amount of $8.3 million.

In August 2024, we filed an automatically-effective shelf registration statement on Form S-3 that will expire no later than August 12, 2027 (the “Second Form S-3”).

The Second Form S-3 allows us to offer and sell from time-to-time common stock, debt securities, warrants or units comprised of any combination of these securities and allows certain selling stockholders to offer and sell from time-to-time common stock.

The Second Form S-3 is intended to assist the selling stockholders in the resale of their common stock and to provide us flexibility to conduct registered sales of its securities, subject to market conditions, in order to fund our future capital needs.

The terms of any future offering under the Second Form S-3 will be established at the time of such offering and will be described in a prospectus supplement filed with the SEC prior to the completion of any such offering.

As of September 30, 2024 , we had cash, cash equivalents and restricted cash of $74.8 million, compared to $92.3 million as of March 31, 2024, a decrease of $17.5 million.

As of September 30, 2024 , we had $3.9 m illion in cash, cash equivalents, and restricted cash in foreign bank accounts.

Our cash, cash equivalents, and restricted cash are summarized as follows (in thousands):

June 30, 2024

September 30, 2024

March 31, 2024

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Total cash, cash equivalents, and restricted cash

For the three months ended June 30, 2024, net cash provided by operating activities was $3.4 million, compared to cash used in operations of $2.2 million for the three months ended June 30, 2023.

The increase in cash flows from operating activities in the three months ended June 30, 2024 was due primarily to improvement in net loss, increase in the change in fair value of contingent consideration, and less cash used to settle accounts payable and accrued expenses, slightly offset by cash used for prepaid expenses and other assets.

For the three months ended June 30, 2024, net cash used in investing activities was less than $0.1 million, compared to $0.3 million for the three months ended June 30, 2023.

The decrease in net cash used in investing activities was primarily due to changes in other assets.

For the three months ended June 30, 2024, net cash used in financing activities was $0.1 million compared to less than $0.1 million for the three months ended June 30, 2023.

The increase was in the repurchase of common stock in connection with employee tax obligations upon the vesting of stock awards.

As of June 30, 2024, we had $1.6 million of restricted cash included in long-term assets and $0.5 million of restricted cash included in current assets.

For the six months ended September 30, 2024, net cash provided by operating activities was $16.1 million, compared to cash used in operations of $1.3 million for the six months ended September 30, 2023.

The increase in cash flows provided by operating activities in the six months ended September 30, 2024 was due primarily to increased net income, increased deferred revenue, decrease in cash spent on accounts payable and accrued expenses, and a decrease in inventory purchases, and change in fair value of contingent consideration, offset by cash spent on prepaid expenses, deferred income taxes, decreased accounts receivable, and a decrease in operating leases.

For the six months ended September 30, 2024, net cash used in investing activities was $33.5 million, compared to $0.4 million for the six months ended September 30, 2023.

The increase in net cash used in investing activities was primarily due to cash paid for the acquisition of Megatran.

For the six months ended September 30, 2024, net cash used in financing activities was $0.1 million compared to net cash provided by financing activities of $0.1 million for the six months ended September 30, 2023.

The decrease was due to the repurchase of common stock in connection with employee tax obligations upon the vesting of stock awards, offset by proceeds related to ESPP.

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

At March 31, 2024, we had $1.3 million of restricted cash included in long-term assets and $0.5 million of restricted cash in current assets.

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These obligations impact our short-term and long-term liquidity and capital resource needs.

Certain contractual obligations are reflected on the condensed consolidated balance sheet as of June 30, 2024, while others are considered future commitments.

Certain contractual obligations are reflected on the condensed consolidated balance sheet as of September 30, 2024, while others are considered future commitments.

We have various contractual arrangements, under which we have committed to purchase certain minimum quantities of goods or services on an annual basis.

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Following the release of ASU 2023-07 in November 2023, the effective date will be annual reporting periods beginning after December 15, 2024.

As of June 30, 2024, we are evaluating the impact on our condensed consolidated financial statements.

As of September 30, 2024, we are evaluating the impact on our condensed consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

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Following the release of ASU 2023-09 in December 2023, the effective date will be annual reporting periods beginning after December 15, 2024.

As of June 30, 2024, we are evaluating the impact on our condensed consolidated financial statements.

As of September 30, 2024, we are evaluating the impact on our condensed consolidated financial statements.

In March 2024, the FASB issued ASU 2024-02, Codification Improvements — Amendments to Remove References to the Concepts Statements .

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Following the release of ASU 2024-02 in March 2024, the effective date will be annual reporting periods beginning after December 15, 2024.

As of June 30, 2024, we are evaluating the impact on our condensed consolidated financial statements.

As of September 30, 2024, we are evaluating the impact on our condensed consolidated financial statements.

We do not believe that, outside of those disclosed here, there are any other recently issued accounting pronouncements that will have a material impact on our condensed consolidated financial statements.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis