What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-02-05 compared with 2024-10-30 · 79 added, 78 removed, 204 unchanged (43% of the section changed)

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("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.

, changes in macroeconomic and market conditions, anticipated payment of ERC's (as defined herein), and adoption of accounting changes may be deemed to be forward-looking statements.

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

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Our success is dependent upon attracting and retaining qualified personnel and our inability to do so could significantly damage our business and prospects;

A significant portion of our Wind segment revenues are derived from a single customer.

A significant portion of our Wind business segment revenues are derived from a single customer.

If this customer’s business is negatively affected, it could adversely impact our business;

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These technologies and our system-level solutions are protected by a robust intellectual property portfolio consisting of patents and patent applications worldwide and rights through exclusive and non-exclusive licenses.

We operate our business under two market-facing business units:

We operate our business under two market-facing business segments:

Grid and Wind.

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Other fiscal years follow similarly.

We continue to experience some inflationary pressure in our supply chain and some delays in sourcing materials needed for our products, resulting in some production disruption, both of which have increased our cost of revenues and decreased gross margin.

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

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

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

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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We recognized a receivable in prepaid expenses and other current assets and a benefit to cost of revenues and operating expenses in the quarter ended March 31, 2023.

In the year ended March 31, 2024, the Company received $3.0 million in payments for the initial claims that were processed.

The remaining balance is expected to be paid during fiscal 2024.

In the year ended March 31, 2024, we received $3.0 million in payments for the initial claims that were processed.

The remaining balance is expected to be received during fiscal 2025.

On February 2, 2024, we completed an offering of 6,210,000 shares of our common stock at a public offering price of $11.25 per share under our then-existing Registration Statement on Form S-3.

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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.

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”).

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

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

On September 23, 2024, 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.

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

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

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

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

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

Critical Accounting Policies and Estimates

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Results of Operations

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.

Three and nine months ended December 31, 2024 , compared to the three and nine months ended December 31, 2023

Total revenues increased 56% to $61.4 million for the three months ended December 31, 2024 and total revenues increased 51% to $156.2 million for the nine months ended December 31, 2024, compared to $39.4 million and $103.6 million for the three and nine months ended December 31, 2023, respectively.

Our revenues are summarized as follows (in thousands):

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.

Three Months Ended December 31,

Nine Months Ended December 31,

Our Grid business segment accounted for 85% and 84% of total revenues for the three and nine months ended December 31, 2024, respectively, compared to 85% for each of the three and nine months ended December 31, 2023.

Our Grid business segment revenues increased 56% to $52.3 million in the three months ended December 31, 2024, from $33.6 million in the three months ended December 31, 2023.

Our Grid business segment revenues increased 50% to $131.6 million in the nine months ended December 31, 2024, from $87.9 million in the nine months ended December 31, 2023.

The increase in the Grid business segment revenues in the three and nine months ended December 31, 2024, compared to the three and nine months ended December 31, 2023 was primarily driven by the acquisition of Megatran and increased shipments of new energy power systems than in the prior year periods.

Our Wind business segment accounted for 15% and 16% of total revenues for the three and nine months ended December 31, 2024, respectively, compared to 15% for each of the three and nine months ended December 31, 2023.

Revenues in the Wind business segment increased 58% and 56% to $9.1 million and $24.6 million in the three and nine months ended December 31, 2024, respectively, from $5.8 million and $15.8 million in the three and nine months ended December 31, 2023, respectively.

The increase during the three and nine months ended December 31, 2024, compared to the three and nine months ended December 31, 2023, was driven by additional shipments of electrical control systems ("ECS") at increased prices.

Cost of Revenues and Gross Margin

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.

Cost of revenues increased by 53% to $45.1 millio n for the three months ended December 31, 2024 , compared to $29.4 million for the three months ended December 31, 2023.

Cost of revenues increased by 42% to $112.0 millio n for the nine months ended December 31, 2024 , compared to $78.8 million for the nine months ended December 31, 2023.

Gross margin was 27% and 28% for the three and nine months ended December 31, 2024, respectively, compared to 25% and 24% for the three and nine months ended December 31, 2023, respectively.

Cost of revenues includes total amortization expense of $0.3 million and $0.4 million in the three and nine months ended December 31, 2024, as a result of the Megatran acquired backlog intangible assets.

In addition, a charge of $0.4 million and $0.7 million related to a fair value adjustment of approximately for the step-up basis assigned to acquired inventory to properly reflect the fair value in purchase accounting was charged to cost of revenues in the three and nine months ended December 31, 2024, when the inventory sold.

The increase in gross margin in the three and nine months ended December 31, 2024 was due to higher revenues, a favorable product mix and favorable impacts across the business due to pricing increases across our product lines.

Operating Expenses

Research and development

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.

Research and development ("R&D") expenses increased 36% and 39% in the three and nine months ended December 31, 2024 , respectively, to $3.0 million and $7.9 million from $2.2 million and $5.7 million in the three and nine months ended December 31, 2023, respectively.

The increase in the three and nine months ended December 31, 2024 was driven primarily by the addition of Megatran R&D expenses, higher overall compensation expense and additional stock-based compensation expense.

Selling, general, and administrative

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.

Selling, general and administrative ("SG&A") expenses increased 48% and 31% in the three and nine months ended December 31, 2024, respectively, to $ 11.6 million and $31.0 million from $7.8 million and $23.6 million in the three and nine months ended December 31, 2023, respectively.

The increase in SG&A expense in the three months ended December 31, 2024 was driven primarily by the addition of Megatran SG&A expenses, higher overall compensation expense and additional stock-based compensation expense.

The increase in the nine months ended December 31, 2024 was due to the addition of Megatran SG&A expenses, higher overall compensation expense, additional stock-based compensation expense, and higher acquisition costs.

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 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.

We recorded amortization expense related to our core technology and know-how, customer relationships, and other intangible assets of $ 0.4 million and $1.3 million in the three and nine months ended December 31, 2024 , respectively, and $0.5 million and $1.6 million in the three and nine months ended December 31, 2023, respectively.

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

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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 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.

The change in fair value of our contingent consideration for the earnout payment on the acquisition of NEPSI resulted in a loss of $3.4 million resulting from an increase in fair value in the nine months ended December 31, 2024.

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

We recorded the above noted changes, compared to losses of $0.9 million and $3.1 million in the three and nine months ended December 31, 2023, respectively.

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

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

The value of this contingent consideration was de minimis at the Acquisition Date and the resulting change in fair value was recorded in September during the nine months ended December 31, 2024.

Operating income (loss)

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

Three Months Ended September 30,

Six Months Ended September 30,

Three Months Ended December 31,

Nine Months Ended December 31,

Operating income (loss):

Unallocated corporate expenses

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.

Ou r Grid business segment generated operating income of $ 2.8 million and $6.0 million in the three and nine months ended December 31, 2024 , respectively, compared to operating income of $0.3 million and operating loss of $2.4 million in the three and nine months ended December 31, 2023 , respectively.

The increase in the Grid business segment operating income in the three and nine months ended December 31, 2024 was due to higher revenues and gross margins in part due to a favorable product mix.

Our Wind business segment generated operating income of $ 1.4 million and $2.9 million in the three and nine months ended December 31, 2024 , respectively, compared to operating income of $0.3 million and operating loss of $0.1 million in the three and nine months ended December 31, 2023 , respectively.

The improvement in the Wind business segment operating income in the three and nine months ended December 31, 2024 was due to higher revenues and gross margins from increased sales of ECS units.

Unallocated corporate expenses included net losses on contingent consideration of $6.7 million in the nine months ended December 31, 2024, and net losses on contingent consideration of $0.9 million and $3.1 million in the three and nine months ended December 31, 2023, respectively.

Additionally, unallocated corporate expenses consisted of stock-based compensation expense of $2.9 million and $4.9 million in the three and nine months ended December 31, 2024, respectively, and $1.1 million and $3.6 million in the three and nine months ended December 31, 2023, respectively.

Interest income, net

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 $0.3 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.

Interest income, net, was $0.8 million and $2.9 million in the three and nine months ended December 31, 2024, respectively, compared to $0.2 million and $0.5 million in the three and nine months ended December 31, 2023 , respectively.

The increase in interest income, net, in the three and nine months ended December 31, 2024 was due to higher cash balances.

Other income (expense), net

Other income, net, was $0.3 million and other expense, net was $0.2 million in the three and nine months ended December 31, 2024 , respectively, compared to other expense, net of $0.3 million and $0.6 million in the three and nine months ended December 31, 2023 , respectively.

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

Income tax benefit was $0.1 million and $4.9 million in the three and nine months ended December 31, 2024 , respectively.

Income tax expense was $0.1 million and $0.3 million in the three and nine months ended December 31, 2023 , respectively.

The net improvement to income tax benefit for the three and nine months ended December 31, 2024 was a result of the release of the valuation allowance due to the recording of the deferred tax liability from the acquisition of Megatran.

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.

Net income was $ 2.5 million and $4.8 million in the three and nine months ended December 31, 2024 , respectively, compared to net losses of $1.6 million and $9.5 million in the three and nine months ended December 31, 2023, respectively.

The improvement in net income was driven primarily by increased revenues and gross margins as well as the release of a partial valuation allowance against the deferred tax liability recorded as a result of the Megatran acquisition .

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

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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 September 30,

Six Months Ended September 30,

Three Months Ended December 31,

Nine Months Ended December 31,

Net income (loss)

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Weighted average shares outstanding - diluted

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.

We incurred non-GAAP net income of $6.0 million and $19.3 million, or $ 0.16 and $0.52 per share, for the three and nine months ended December 31, 2024 , respectively, compared to a non-GAAP net income of $0.9 million and a non-GAAP net loss of $1.3 million, or $0.03 and $(0.04) per share, for the three and nine months ended December 31, 2023 , respectively.

The improvement in the non-GAAP net income (loss) for the three and nine months ended December 31, 2024 was due to higher revenues and gross margins.

Liquidity and Capital Resources

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

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

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

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

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

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

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.

As of December 31, 2024 , we had cash, cash equivalents and restricted cash of $80.0 million, compared to $92.3 million as of March 31, 2024, a decrease of $12.3 million.

As of December 31, 2024 , we had $3.2 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):

September 30, 2024

December 31, 2024

March 31, 2024

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Total cash, cash equivalents, and restricted cash

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.

For the nine months ended December 31, 2024, net cash provided by operating activities was $22.0 million, compared to cash used in operations of $0.1 million for the nine months ended December 31, 2023.

The increase in cash flows provided by operating activities in the nine months ended December 31, 2024 was due primarily to increased net income, decrease in cash spent on accounts payable and accrued expenses, and increased deferred revenue, offset by an increase in accounts receivable, and cash spent on inventory purchases, prepaid expenses, and operating leases.

For the nine months ended December 31, 2024, net cash used in investing activities was $34.1 million, compared to $0.6 million for the nine months ended December 31, 2023.

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

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.

For the nine months ended December 31, 2024, net cash used in financing activities was $0.1 million compared to net cash provided by financing activities of $0.1 million for the nine months ended December 31, 2023.

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

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

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

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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 September 30, 2024, while others are considered future commitments.

Certain contractual obligations are reflected on the condensed consolidated balance sheet as of December 31, 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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We believe we have sufficient available liquidity to fund our operations and capital expenditures for the next twelve months.

We recently raised $65.2 million, net of offering expenses, through an equity raise in February 2024.

We raised $65.2 million, net of offering expenses, through an equity raise in February 2024.

In addition, we may seek to raise additional capital, which could be in the form of loans, convertible debt or equity, to fund our operating requirements and capital expenditures.

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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, 2023.

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

As of December 31, 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 September 30, 2024, we are evaluating the impact on our condensed consolidated financial statements.

As of December 31, 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 September 30, 2024, we are evaluating the impact on our condensed consolidated financial statements.

As of December 31, 2024, we are evaluating the impact on our condensed consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures .

The amendments in ASU 2024-03 address investor requests for more disclosure of disaggregated financial reporting information about expenses presented in the income statement.

Following the release of ASU 2024-03 in November 2024, the effective date will be annual reporting periods beginning after December 15, 2026.

As of December 31, 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.

2 unchanged sentences

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