Risks Related to Our Financial Performance
−Removed: We have a history of operating losses, which may continue in the future.
+Added: We have not been historically profitable, which may recur in the future.
Our operating results may fluctuate significantly from quarter to quarter and may fall below expectations in any particular fiscal quarter.
−Removed: We were not profitable in fiscal 2023 and have recorded net losses for the last three fiscal years.
+Added: We were profitable in fiscal 2024, however, we have recorded net losses for the prior three fiscal years.
We may not be profitable in fiscal 2025 or future years.
−Removed: There remains substantial uncertainty in our business, which makes it difficult to evaluate our business and future prospects.
+Added: While we achieved profitable results in fiscal 2024, we cannot be certain that we will sustain profitability in future years.
+Added: There remains uncertainty in our business, which makes it difficult to evaluate our business and future prospects.
In addition, our operating results historically have been difficult to predict and have at times fluctuated from quarter to quarter due to a variety of factors, many of which are outside of our control.
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As a result, if revenue for a particular quarter is below our expectations, we may not be able to proportionately reduce operating expenses for that quarter, and therefore such a revenue shortfall would have a disproportionate effect on our operating results for that quarter.
−Removed: We have a history of negative operating cash flows, and we may require additional financing in the future, which may not be available to us.
+Added: While we generated positive operating cash flow in fiscal 2024 and the prior year, we have a history of negative operating cash flows, and we may require additional financing in the future, which may not be available to us.
At March 31, 2025, we had approximately $85.4 million of cash, cash equivalents and restricted cash, and during the fiscal year ended March 31, 2025, $28.3 m illion in cash was provided by our operating activities.
−Removed: We have historically experienced net losses and negative operating cash flows.
+Added: In the current period, we experienced net income and positive operating cash flows.
+Added: In prior years, we have experienced net losses and negative operating cash flows.
We plan to continue to closely monitor our expenses and, if required, will further reduce operating costs and capital spending to enhance liquidity.
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In addition, approximately 16% of our revenues in fiscal 2024 were derived under sales contracts where prices were denominated in the Euro.
−Removed: Unfavorable currency fluctuations could require us to increase prices to foreign customers, which could result in a lesser number of orders, and therefore lower revenues, from such customers.
+Added: Unfavorable currency fluctuations could require us to increase prices to foreign customers, which could result in a lesser value of orders, and therefore lower revenues, from such customers.
Alternatively, if we do not adjust the prices for our products in response to unfavorable currency fluctuations, our results of operations could be adversely affected.
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However, we cannot be certain that our efforts will be adequate to protect us against significant currency fluctuations or that such efforts will not expose us to additional exchange rate risks.
−Removed: We may be required to issue performance bonds or provide letters of credit, which restricts our ability to access any cash used as collateral for the bonds or letters of credit.
−Removed: While we have been required to provide performance bonds in the form of surety bonds or other forms of security and letters of credit in the past, the size of the bonds and letters of credit was not material.
−Removed: In recent years, we have entered into contracts that require us to post bonds and to deliver letters of credit of significant magnitude, such as our prior $5.0 million irrevocable letter of credit (secured by a $5.0 million deposit in an escrow account, subsequently released upon completion of our obligations) as part of the agreement with Commonwealth Edison Company (“ComEd”) to install the Resilient Electric Grid (“REG”) system in Chicago.
−Removed: Similarly, in many other instances, we have been required to deposit cash in escrow accounts as collateral for these instruments, which is unavailable to us for general use for significant periods of time.
−Removed: Should we be unable to obtain performance bonds or letters of credit in the future, significant future potential revenue could become unavailable to us.
−Removed: Further, should our working capital situation deteriorate, we would not be able to access the restricted cash to meet working capital requirements.
If we fail to maintain proper and effective internal control over financial reporting, our ability to produce accurate and timely financial statements could be impaired and may lead investors and other users to lose confidence in our financial data .
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Significant deficiencies or material weaknesses in our internal control over financial reporting could also reduce our ability to obtain financing or could increase the cost of any financing we obtain.
+Added: We may be required to issue performance bonds, which restricts our ability to access any cash used as collateral for the bonds.
+Added: While we have been required to provide performance bonds in the form of surety bonds or other forms of security and letters of credit in the past, the size of the bonds and letters of credit was not material.
+Added: In recent years, we have entered into contracts that require us to post bonds and to deliver letters of credit of significant magnitude.
+Added: Similarly, in many other instances, we have been required to deposit cash in escrow accounts as collateral for these instruments, which is unavailable to us for general use for significant periods of time.
+Added: Should we be unable to obtain performance bonds or letters of credit in the future, significant future potential revenue could become unavailable to us.
+Added: Further, should our working capital situation deteriorate, we would not be able to access the restricted cash to meet working capital requirements.
Risks Related to Our Operations
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In addition, current and future suppliers may be less likely to grant us credit, resulting in a negative impact on our working capital and cash flows.
+Added: If we fail to implement our business strategy successfully, our financial performance could be harmed.
+Added: Our future financial performance and success are dependent in large part upon our ability to implement our business strategy successfully.
+Added: Our business strategy envisions several initiatives, including driving revenue growth and enhancing operating results by increasing customer adoption of our products by targeting high-growth segments with commercial and system-level products.
+Added: We may not be able to implement our business strategy successfully or achieve the anticipated benefits of our business plan.
+Added: If we are unable to do so, our long-term growth and profitability may be adversely affected.
+Added: Even if we are able to implement some or all of the initiatives of our business plan successfully, our operating results may not improve to the extent we anticipate, or at all.
+Added: In addition, to the extent we have misjudged the nature and extent of industry trends or our competition, we may have difficulty in achieving our strategic objectives.
+Added: Any failure to implement our business strategy successfully may adversely affect our business, financial condition and results of operations.
+Added: In addition, we may decide to alter or discontinue certain aspects of our business strategy at any time.
+Added: Our ability to implement our business strategy could also be affected by a number of factors beyond our control, such as increased competition, legal developments, government regulation, general economic conditions, including as a result of the ongoing wars between Russia and Ukraine and Israel and Hamas and trade conflicts, or increased operating costs or expenses.
+Added: We rely upon third-party suppliers for the components and subassemblies of many of our Grid and Wind products, making us vulnerable to supply shortages and price fluctuations, which could harm our business.
+Added: Many of our components and subassemblies are currently manufactured for us by a limited number of qualified suppliers.
+Added: Any interruption in the supply of components or subassemblies, or our inability to obtain substitute components or subassemblies from alternate sources at acceptable prices in a timely manner, could impair our ability to meet the demand of our customers, which would have an adverse effect on our business and operating results.
+Added: Moreover, if the costs of acquiring components and subassemblies from these suppliers significantly increase, we may not be able to identify alternative suppliers, which could adversely impact our business and operating results.
+Added: In order to minimize costs and time to market, we have and will continue to identify local suppliers that meet our quality standards to produce certain of our subassemblies and components.
+Added: These efforts may not be successful including as quality standards evolve.
+Added: For example, there are increasing expectations in various jurisdictions that companies monitor the environmental, social, and/or geographic provenance of their supply chain;
+Added: complying with such expectations may cause us to incur additional costs, subject us to increased scrutiny, reduce the number of acceptable suppliers, or otherwise impact our business or operations.
+Added: In addition, any event that negatively impacts our supply, including, among others, wars, terrorist activities, cyberattacks, natural disasters and outbreaks of infectious disease, could delay or suspend shipments of products or the release of new products or could result in the delivery of inferior products.
+Added: Our revenues from the affected products would decline or we could incur losses until such time as we are able to restore our production processes or put in place alternative contract manufacturers or suppliers.
+Added: Even though we carry business interruption insurance policies, we may suffer losses as a result of business interruptions that exceed the coverage available under our insurance policies.
Our contracts with the U.S.
−Removed: government are subject to audit, modification or termination by the U.S.
−Removed: government and include certain other provisions in favor of the government.
−Removed: The continued funding of such contracts remains subject to annual congressional appropriation, which, if not approved, could reduce our revenue and lower or eliminate our profit.
+Added: and Canadian governments are subject to audit, modification or termination by such governments and include certain other provisions in favor of the governments.
+Added: The continued funding of such contracts may remain subject to annual legislative appropriation, which, if not approved, could reduce our revenue and lower or eliminate our profit.
As a company that contracts with the U.S.
−Removed: government, we are subject to financial audits and other reviews by the U.S.
−Removed: government of our costs and performance, accounting, and general business practices relating to these contracts.
−Removed: Based on the results of these audits, the U.S.
−Removed: government may adjust our contract-related costs and fees.
+Added: and Canadian governments, we are subject to financial audits and other reviews by such governments of our costs and performance, accounting, and general business practices relating to these contracts.
+Added: Based on the results of these audits, such governments may adjust our contract-related costs and fees.
We cannot be certain that adjustments arising from government audits and reviews would not have a material adverse effect on our results of operations.
−Removed: government contracts customarily contain other provisions that give the government substantial rights and remedies, many of which are not typically found in commercial contracts, including provisions that allow the government to:
+Added: Our government contracts customarily contain other provisions that give the government substantial rights and remedies, many of which are not typically found in commercial contracts, including provisions that allow the applicable government to:
obtain certain rights to the intellectual property that we develop under the contract;
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All of our U.S.
−Removed: government contracts, as well as certain of our contracts with third parties that are dependent on U.S.
−Removed: government contracts, can be terminated by the U.S.
−Removed: government for its convenience.
+Added: and Canadian government contracts, as well as certain of our contracts with third parties that are dependent on such government contracts, can be terminated by the applicable government for its convenience.
Termination-for-convenience provisions typically provide only for our recovery of costs incurred or committed, and for settlement of expenses and profit on work completed prior to termination.
−Removed: In addition to the right of the U.S.
−Removed: government to terminate its contracts with us, U.S.
−Removed: government contracts are conditioned upon the continuing approval by the U.S.
−Removed: Congress of the necessary spending to honor such contracts.
+Added: In addition to the right of the government to terminate its contracts with us, these government contracts are conditioned upon the continuing approval by the applicable legislature of the necessary spending to honor such contracts.
Congress often appropriates funds for a program on a fiscal year basis even though contract performance may take more than one year.
Consequently, at the beginning of many major governmental programs, contracts often may not be fully funded, and additional monies are then committed to the contract only if, as and when appropriations are made by the U.S.
−Removed: Congress for future fiscal years.
+Added: Congress or other applicable body for future fiscal years.
In addition, government shutdowns could prevent or delay such contracts from being funded.
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government is unable to make timely payments.
+Added: Moreover, the U.S.
+Added: executive branch has recently created the Department of Government Efficiency, which is identifying ways to cut federal spending.
+Added: There can be no assurance that we will not be adversely affected by such cost-cutting measures.
We cannot be certain that our U.S.
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(2) macroeconomic conditions;
−Removed: and (3) the ability of the U.S.
+Added: (3) the ability of the U.S.
government to enact relevant legislation, such as appropriations bills;
+Added: and (4) the spending priorities of the U.S.
+Added: Presidential Administration.
In recent years, U.S.
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government priorities, policies and requirements could have a material adverse effect on our results of operations, financial condition and liquidity.
−Removed: Pandemics, epidemics, or other public
−Removed: health crises may
−Removed: adversely impact our business, financial condition and results of operations
−Removed: The occurrence or reoccurrence of regional epidemics, a global pandemic or other public health crises, such as COVID-19, may adversely affect our operations, financial condition, and results of operations.
−Removed: The extent to which a public health crisis impacts our business going forward will depend on factors such as the duration and scope;
−Removed: governmental, business, and individuals' actions in response to the public health crisis;
−Removed: and the impact on economic activity, including the possibility of recession or financial market instability.
−Removed: Measures to contain a public health crisis may intensify other risks described in these Risk Factors.
−Removed: We rely upon third-party suppliers for the components and subassemblies of many of our Grid and Wind products, making us vulnerable to supply shortages and price fluctuations, which could harm our business.
−Removed: Many of our components and subassemblies are currently manufactured for us by a limited number of qualified suppliers.
−Removed: Any interruption in the supply of components or subassemblies, or our inability to obtain substitute components or subassemblies from alternate sources at acceptable prices in a timely manner, could impair our ability to meet the demand of our customers, which would have an adverse effect on our business and operating results.
−Removed: In order to minimize costs and time to market, we have and will continue to identify local suppliers that meet our quality standards to produce certain of our subassemblies and components.
−Removed: These efforts may not be successful including as quality standards evolve.
−Removed: For example, there are increasing expectations in various jurisdictions that companies monitor the environmental, social, and/or geographic provenance of their supply chain;
−Removed: complying with such expectations may cause us to incur additional costs, subject us to increased scrutiny, reduce the number of acceptable suppliers, or otherwise impact our business or operations.
−Removed: In addition, any event that negatively impacts our supply, including, among others, wars, terrorist activities, cyberattacks, natural disasters and outbreaks of infectious disease, could delay or suspend shipments of products or the release of new products or could result in the delivery of inferior products.
−Removed: Our revenues from the affected products would decline or we could incur losses until such time as we are able to restore our production processes or put in place alternative contract manufacturers or suppliers.
−Removed: Even though we carry business interruption insurance policies, we may suffer losses as a result of business interruptions that exceed the coverage available under our insurance policies.
−Removed: Uncertainty surrounding our prospects and financial condition may have an adverse effect on our customer and supplier relationships.
−Removed: Our relationships with our customers and suppliers are predicated on the belief that we will continue to operate.
−Removed: Our customers, particularly in the utility industry, are generally risk averse and may not enter into sales contracts with us if there is uncertainty regarding our ability to support working capital needs of large-scale projects.
−Removed: Our success is dependent upon attracting and retaining qualified personnel and our inability to do so could significantly damage our business and prospects.
−Removed: We have attracted a highly skilled management team and specialized workforce, including scientists, engineers, researchers, manufacturing, personnel, and marketing and sales professionals.
−Removed: Hiring and retaining good personnel for our business is challenging, and highly qualified technical personnel are likely to remain a limited resource for the foreseeable future.
−Removed: We may not be able to hire the necessary personnel to implement our business strategy.
−Removed: In addition, we may need to provide higher compensation or more training to our personnel than we currently anticipate.
−Removed: Moreover, any officer or employee can terminate his or her relationship with us at any time.
−Removed: Losing the services of any of our executive officers or key employees could materially and adversely impact our business.
−Removed: A significant portion of our Wind segment revenues are derived from a single customer.
−Removed: If this customer’s business is negatively affected, it could adversely impact our business .
−Removed: A significant portion of our Wind segment revenues have historically been derived from Inox and a significant decrease in revenues from Inox could adversely impact our Wind segment.
−Removed: Revenues from Inox are supported by supply contracts to purchase wind turbine ECS, and licenses to make, use and supply, wind turbines based on our designs.
−Removed: Inox has been active in the new central and state government auction regime in India and has a cumulative order book of over 2.6 GW.
−Removed: However, we cannot predict if and how successful Inox will be in executing on these orders or in obtaining new orders under the new central and state auction regime.
−Removed: Any failure by Inox to succeed under this regime, or any delay in Inox’s ability to deliver its wind turbines, could result in fewer ECS shipments to Inox.
−Removed: Inox has historically failed to post letters of credit and take delivery of forecasted ECS quantities.
−Removed: Our success in addressing the wind energy market is dependent on the manufacturers that license our designs.
−Removed: Because an important element of our strategy for addressing the wind energy market involves the license of our wind turbine designs to manufacturers of those systems, the financial benefits to us from our products for the wind energy market are dependent on the success of these manufacturers in selling wind turbines based on our designs.
−Removed: We may not be able to enter into marketing or distribution arrangements with third parties on financially acceptable terms, or at all, and third parties may not be successful in selling our products or applications incorporating our products.
−Removed: Our business and operations would be adversely impacted in the event of a failure or security breach of our or any critical third parties' information technology infrastructure and networks.
−Removed: We rely upon the capacity, reliability, and security of information technology hardware and software infrastructure and networks (collectively, "IT Systems"), and our ability to expand and update IT Systems in response to our changing needs.
+Added: Our business and operations may be materially adversely impacted in the event of a failure or security breach of our or any critical third parties' IT Systems or Confidential Information.
+Added: We rely upon the capacity, reliability, and security of information technology hardware and software infrastructure and networks (collectively, "IT Systems"), and our ability to expand and update such IT Systems in response to our changing needs.
We manage certain IT Systems but also rely on IT Systems and various products and services provided by critical third-party vendors and others in the supply chain.
−Removed: We also collect and store sensitive and confidential information ("Confidential Information") in the ordinary course of our business.
−Removed: Any failure to manage, expand, or update our IT Systems or any disruption to or failure in the operation of such IT Systems could harm our business.
−Removed: In addition, the costs associated with updating and securing our IT Systems are likely to increase as such security measures become more complex, which may harm our operating results and financial condition.
−Removed: Despite our implementation of security measures, we face numerous and evolving cybersecurity risks that threaten the confidentiality, integrity and availability of our IT Systems and Confidential Information.
−Removed: Our IT Systems, and those of the third-party vendors we rely on, are vulnerable to disruption, compromise and damage from computer viruses (including malware and ransomware), bugs, misconfigurations or vulnerabilities, social engineering/phishing, natural disasters, human or technical error, intentional conduct, cyberattacks, unauthorized access and other similar disruptions.
+Added: We also collect and store sensitive, personal and confidential information ("Confidential Information") in the ordinary course of our business.
+Added: Any failure to manage, expand, or update our IT Systems or Confidential Information or any disruption to or failure in the operation of such IT Systems or Confidential Information could harm our business.
+Added: In addition, the costs associated with updating and securing our IT Systems or Confidential Information are likely to increase as such security measures become more complex, which may harm our operating results and financial condition.
+Added: We face numerous and evolving cybersecurity risks that threaten the confidentiality, integrity and availability of our IT Systems and Confidential Information.
+Added: Our IT Systems, and those of the third-party vendors we rely on, as well as our Confidential Information, are vulnerable to disruption, compromise and damage from computer viruses (including malware and ransomware), bugs, misconfigurations or vulnerabilities, social engineering/phishing, natural disasters, human or technical error, intentional conduct, cyberattacks, unauthorized access and other similar disruptions.
Because we rely on certain third party vendors that support our operations, successful cyberattacks that disrupt or result in unauthorized access to third party IT Systems can materially impact our operations and financial results.
−Removed: There can also be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, or the processes of third-party vendors we rely on, will be fully implemented, complied with or effective in protecting our IT Systems and data.
+Added: There can also be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, or the processes of third-party vendors we rely on, will be fully implemented, complied with or effective in protecting our IT Systems and Confidential Information.
Our business is also subject to break-ins, sabotage, and intentional acts of vandalism by third parties as well as employees.
−Removed: We cannot guarantee the security or protection of any IT Systems.
−Removed: Threat actors, such as ransomware groups, are becoming increasingly sophisticated in using techniques and tools including artificial intelligence that are designed to circumvent controls, evade detection and remove or obfuscate forensic evidence.
−Removed: As a result, we and our third-party providers may be unable to timely or effectively anticipate, detect, investigate, remediate or recover from cyberattacks in the future or avoid material impact to our IT Systems and our business.
+Added: We cannot guarantee the security or protection of any IT Systems or Confidential Information.
+Added: Cyberattacks are expected to accelerate on a global basis in frequency and magnitude, particularly as threat actors, such as ransomware groups, are becoming increasingly sophisticated in using techniques and tools including artificial intelligence that are designed to circumvent controls, evade detection and remove or obfuscate forensic evidence.
+Added: As a result, we and our third-party providers may be unable to timely or effectively anticipate, detect, investigate, remediate or recover from cyberattacks in the future or avoid material impact to our IT Systems, Confidential Information, and our business.
We also face increased cyber risk due to the number of our and others' employees who are (and may continue to be) working remotely due to the challenges associated with managing remote computing assets and security vulnerabilities that are present in many non-corporate and home networks.
+Added: We and certain of our third-party providers regularly experience cyberattacks and other incidents, and we expect such attacks and incidents to continue in varying degrees.
+Added: While to date no incidents have had a material impact on our operations or financial results, we cannot guarantee that material incidents will not occur in the future.
Any adverse impact to the availability, integrity or confidentiality of our IT Systems or those of third parties upon which we rely could result in disruptions to our operations, loss, damage or compromise to our data, or inappropriate disclosure of Confidential Information.
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Any or all of the foregoing could materially adversely affect our business, operating results, and financial condition.
+Added: Failure to comply with evolving data privacy and data protection laws and regulations or to otherwise protect personal data, may adversely impact our business and financial results.
+Added: In connection with running our business, we receive, store, use and otherwise process information that relates to individuals and/or constitutes “personal data,” “personal information,” “personally identifiable information,” or similar terms under applicable data privacy laws (collectively, “Personal Data”).We are therefore subject to many rapidly evolving privacy and data protection laws and regulations in the United States, Europe and around the world.
+Added: These laws require us to operate in a complex environment where there are significant constraints on how we can process Personal Data across our business.
+Added: The scope of these laws are changing, subject to differing interpretations, and may be inconsistent among jurisdictions.
+Added: For example, the European and United Kingdom General Data Protection Regulation, the California Consumer Privacy Act, and the data protection and security laws of other jurisdictions impose onerous obligations — including around transparency, data subject rights, contractual requirements, data breach reporting, and international data transfers — with respect to our processing Personal Data.
+Added: We are also subject to certain contractual obligations related to privacy, data protection and data security that may also impose onerous obligations.
+Added: The legal and regulatory framework for privacy, data protection and data security worldwide is, and is likely to remain for the foreseeable future, uncertain and complex, and it is possible that these or other actual or alleged obligations may be interpreted and applied in a manner that we do not anticipate or that is inconsistent from one jurisdiction to another, and may conflict with our other legal obligations or our practices.
+Added: Any failure or perceived failure by us to comply with our privacy, data protection and data security obligations may result in substantial fines, regulatory investigations or enforcement, reputational damage, orders to cease/change our use of data, as well as potential civil claims, including class action litigation, and could result in significant liability (including monetary penalties or requirements to alter our operations), any of which could materially and adversely affect our business, results of operations, and financial condition.
+Added: Further, any significant change to applicable laws, regulations or industry practices regarding privacy, data protection, and data security could increase our costs and require us to modify our operations, possibly in a material
+Added: Our success is dependent upon attracting and retaining qualified personnel and our inability to do so could significantly damage our business and prospects.
+Added: We have attracted a highly skilled management team and specialized workforce, including scientists, engineers, researchers, manufacturing, personnel, and marketing and sales professionals.
+Added: Hiring and retaining good personnel for our business is challenging, and highly qualified technical personnel are likely to remain a limited resource for the foreseeable future.
+Added: We may not be able to hire the necessary personnel to implement our business strategy.
+Added: In addition, we may need to provide higher compensation or more training to our personnel than we currently anticipate.
+Added: Moreover, any officer or employee can terminate his or her relationship with us at any time.
+Added: Losing the services of any of our executive officers or key employees could materially and adversely impact our business.
We may acquire additional complementary businesses or technologies, which may require us to incur substantial costs for which we may never realize the anticipated benefits.
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Achieving the benefits of any acquisition involves additional risks, including:
−Removed: difficulty assimilating acquired operations, technologies and personnel;
+Added: difficulty integrating acquired operations, technologies and personnel;
inability to retain management and other key personnel of the acquired business;
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mistaken assumptions about volumes, revenues and costs associated with the acquired business, including synergies;
−Removed: limitations on rights to indemnity from the seller;
+Added: limitations on indemnification from the seller;
mistaken assumptions about the overall costs of equity or debt used to finance the acquisition;
unforeseen difficulties operating in new product areas, with new customers, or in new geographic areas.
−Removed: We cannot provide any assurance that we will realize any of the anticipated benefits of any acquisition, including our NEPSI acquisition completed in October 2020, and Neeltran, Inc.
−Removed: acquisition completed in May 2021, and if we fail to realize these anticipated benefits, our operating performance could suffer.
−Removed: Failure to comply with evolving data privacy and data protection laws and regulations or to otherwise protect personal data, may adversely impact our business and financial results.
−Removed: We are subject to many rapidly evolving privacy and data protection laws and regulations in the United States, Europe and around the world.
−Removed: This requires us to operate in a complex environment where there are significant constraints on how we can process personal data across our business.
−Removed: The scope of these laws are changing, subject to differing interpretations, and may be inconsistent among jurisdictions.
−Removed: For example, European General Data Protection Regulation, the California Consumer Privacy Act, Massachusetts Data Privacy Law and the data protection and security laws of other jurisdictions impose onerous obligations — including around transparency, data breach reporting, and international data transfers — with respect to our processing personal data of individuals.
−Removed: We are also subject to certain contractual obligations related to privacy, data protection and data security.
−Removed: The legal and regulatory framework for privacy, data protection and data security worldwide is, and is likely to remain for the foreseeable future, uncertain and complex, and it is possible that these or other actual or alleged obligations may be interpreted and applied in a manner that we do not anticipate or that is inconsistent from one jurisdiction to another, and may conflict with our other legal obligations or our practices.
−Removed: Any failure or perceived failure by us to comply with our privacy, data protection and data security obligations may result in substantial fines, regulatory investigations or enforcement, reputational damage, orders to cease/change our use of data, enforcement notices, as well as potential civil claims, including class action type litigation, and could result in significant liability (including monetary penalties or requirements to alter our operations), and otherwise materially and adversely affect our reputation and business.
−Removed: Further, any significant change to applicable laws, regulations or industry practices regarding privacy, data protection, and data security could increase our costs and require us to modify our operations, possibly in a material manner.
+Added: We cannot provide any assurance that we will realize any of the anticipated benefits of any acquisition, including our acquisition of Megatran Industries, Inc.
+Added: including its subsidiaries, completed in August 2024, and if we fail to realize these anticipated benefits, our operating performance could suffer.
+Added: A significant portion of our Wind segment revenues are derived from a single customer.
+Added: If this customer’s business is negatively affected, it could adversely impact our business .
+Added: A significant portion of our Wind segment revenues have historically been derived from Inox and a significant decrease in revenues from Inox could adversely impact our Wind segment.
+Added: Revenues from Inox are supported by supply contracts to purchase wind turbine ECS, and licenses to make, use and supply, wind turbines based on our designs.
+Added: Inox has been active in the new central and state government auction regime in India and has a cumulative order book of over 2.6 GW.
+Added: However, we cannot predict if and how successful Inox will be in executing on these orders or in obtaining new orders under the new central and state auction regime.
+Added: Any failure by Inox to succeed under this regime, or any delay in Inox’s ability to deliver its wind turbines, could result in fewer ECS shipments to Inox.
+Added: Inox has historically failed to post letters of credit and take delivery of forecasted ECS quantities.
+Added: Our success in addressing the wind energy market is dependent on the manufacturers that license our designs.
+Added: Because an important element of our strategy for addressing the wind energy market involves the license of our wind turbine designs to manufacturers of those systems, the financial benefits to us from our products for the wind energy market are dependent on the success of these manufacturers in selling wind turbines based on our designs.
+Added: We may not be able to enter into marketing or distribution arrangements with third parties on financially acceptable terms, or at all, and third parties may not be successful in selling our products or applications incorporating our products.
Many of our revenue opportunities are dependent upon subcontractors and other business collaborators.
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If these business collaborators fail to deliver their products or perform their obligations on a timely basis or fail to generate sufficient demand for the systems they manufacture, our revenue from the project may be delayed or decreased, and we may not be successful in selling our products.
−Removed: If we fail to implement our business strategy successfully, our financial performance could be harmed.
−Removed: Our future financial performance and success are dependent in large part upon our ability to implement our business strategy successfully.
−Removed: Our business strategy envisions several initiatives, including driving revenue growth and enhancing operating results by increasing customer adoption of our products by targeting high-growth segments with commercial and system-level products.
−Removed: We may not be able to implement our business strategy successfully or achieve the anticipated benefits of our business plan.
−Removed: If we are unable to do so, our long-term growth and profitability may be adversely affected.
−Removed: Even if we are able to implement some or all of the initiatives of our business plan successfully, our operating results may not improve to the extent we anticipate, or at all.
−Removed: In addition, to the extent we have misjudged the nature and extent of industry trends or our competition, we may have difficulty in achieving our strategic objectives.
−Removed: Any failure to implement our business strategy successfully may adversely affect our business, financial condition and results of operations.
−Removed: In addition, we may decide to alter or discontinue certain aspects of our business strategy at any time.
−Removed: Our ability to implement our business strategy could also be affected by a number of factors beyond our control, such as increased competition, legal developments, government regulation, general economic conditions, including as a result of the ongoing wars between Russia and Ukraine and Israel and Hamas, or increased operating costs or expenses.
Problems with product quality or product performance may cause us to incur warranty expenses and may damage our market reputation and prevent us from achieving increased sales and market share.
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Natural disasters (including, but not limited to tornadoes, earthquakes, fires, storms, floods, droughts and extreme temperatures) and chronic changes in the physical environment, such as changes to meteorological or hydrological patterns, could severely disrupt our operations and have a material adverse effect on our business, results of operations, financial condition and prospects.
−Removed: Climate change may increase the frequency or intensity of such events.
+Added: Climate change may increase the frequency or intensity of such events, as well as contribute to chronic changes (such as changes in meteorological or hydrological patterns) that may result in similar risk.
If a natural disaster, power outage, or other event, including human acts such as terrorism, occurred that prevented us from fully utilizing our value chain or facilities, that damaged critical infrastructure, such as the manufacturing facilities on which we rely, or that otherwise disrupted operations, it may be difficult or, in certain cases, impossible for us to continue our business for a substantial period of time.
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For more information, please refer to our risk factor titled “The increasing focus on environmental sustainability and social initiatives could increase our costs, and inaction could harm our reputation and adversely impact our financial results."
+Added: Uncertainty surrounding our prospects and financial condition may have an adverse effect on our customer and supplier relationships.
+Added: Our relationships with our customers and suppliers are predicated on the belief that we will continue to operate.
+Added: Our customers, particularly in the utility industry, are generally risk averse and may not enter into sales contracts with us if there is uncertainty regarding our ability to support working capital needs of large-scale projects.
+Added: Pandemics, epidemics, or other public
+Added: health crises may
+Added: adversely impact our business, financial condition and results of operations
+Added: The occurrence or reoccurrence of regional epidemics, a global pandemic or other public health crises, such as COVID-19, may adversely affect our operations, financial condition, and results of operations.
+Added: The extent to which a public health crisis impacts our business going forward will depend on factors such as the duration and scope;
+Added: governmental, business, and individuals' actions in response to the public health crisis;
+Added: and the impact on economic activity, including the possibility of recession or financial market instability.
+Added: Measures to contain a public health crisis may intensify other risks described in these Risk Factors.
Risks Related to Our Markets
Adverse changes in domestic and global economic conditions could adversely affect our operating results.
−Removed: We have become increasingly subject to the risks arising from adverse changes in domestic and global economic conditions, including as a result of political instability in the United States.
+Added: We have become increasingly subject to the risks arising from adverse changes in domestic and global economic conditions, including as a result of governmental policies and actions in the United States.
In recent years, financial markets have been volatile and the state of both the domestic and global economies has been uncertain.
−Removed: Political instability in the United States, such as the failure to increase the federal debt ceiling, could lead to further financial market volatility and harm the economy.
+Added: Governmental policies and actions in the United States, such as new tariffs, trade restrictions and resulting trade conflicts, cuts in government spending or the failure to increase the federal debt ceiling, could lead to further financial market volatility and harm the economy.
Adverse credit conditions in the future could have a negative impact on our ability to execute on future strategic activities.
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These events have resulted or could in the future result in higher product costs, reductions in sales of our products, longer sales cycles, slower adoption of new technologies, increased accounts receivable and inventory write-offs and increased price competition.
+Added: If recessionary conditions exist and continue for an extended period of time, our business and results of operations may be materially adversely affected.
We also purchase large amounts of commodity-based raw materials.
−Removed: Prevailing prices for such commodities are subject to fluctuations due to changes in supply and demand and a variety of additional factors beyond our control, such as global political and economic conditions.
+Added: Prevailing prices for such commodities are subject to fluctuations due to changes in supply and demand, tariffs, and a variety of additional factors beyond our control, such as global political and economic conditions.
Any of these events would likely harm our business, results of operations and financial condition.
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and Canada, Mexico and other countries have been escalating in recent years.
−Removed: Such sanctions and other measures, as well as the existing and potential further responses from countries subject to such sanctions, tensions and military actions, could adversely affect the global economy and financial markets and could adversely affect our business, financial condition and results of operations.
−Removed: We cannot predict whether the United States or any other country will impose new quotas, tariffs, taxes or other trade barriers upon the importation or exportation of our products or gauge the effect that new barriers would have on our financial position or results of operations.
+Added: Increased tariffs, sanctions, and other trade restrictions, as well as the existing and potential further responses from countries subject to such tariffs, sanctions, and other trade restrictions, could adversely affect the global economy and financial markets and could adversely affect our business, financial condition and results of operations.
+Added: We cannot predict with certainty the effect that new quotas, tariffs, taxes or other trade barriers upon the importation or exportation of our products or gauge the effect that new barriers would have on our financial position or results of operations.
These new tariffs or any additional tariffs or other trade barriers may cause our costs to increase, our products to be less competitive, and our business, results of operations and financial position to be materially adversely affected.
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We face competition from other companies offering FACTS systems similar to our D-VAR products.
−Removed: These include adaptive VAR compensators, Dynamic voltage restorers (“DVRs”), and STATCOMs produced by ABB, Hitachi, Siemens, Mitsubishi, and Ingeteam, and battery-based uninterruptable power supply (“UPS”) systems offered by various companies around the world.
+Added: These include adaptive VAR compensators, Dynamic voltage restorers (“DVRs”), and STATCOMs produced by ABB, Hitachi, Ingeteam, Mitsubishi, RXHK, and Siemens, and battery-based uninterruptable power supply (“UPS”) systems offered by various companies around the world.
We face competition from other companies offering medium-voltage metal-enclosed power capacitor banks and harmonic filter banks for use on electric power systems similar to our NEPSI products.
−Removed: These include Southern States, Controllix PowerSide, Elgin Power Solutions (formally Gilbert), Scott Engineering and QVARx.
+Added: These include Southern States, Controllix, Powerside, Elgin Power Solutions (formally Gilbert), Scott Manufacturing Solutions, and QVARx.
We face competition from other companies offering DC power supply systems similar to our Neeltran products.
These include SCR Controlled Rectifiers, IGBT-controlled choppers produced by ABB, Siemens, Friem, Dynapower, and Nidec offering systems around the world.
+Added: We face competition from other companies offering transformers and power supplies similar to our NWL products.
+Added: These include industrial and military transformers produced by Espey Manufacturing & Electronics Corp .
+Added: , Hammond and Ocrev, and power supplies offered by Kraft Powercon, Andritz, Lonking Holdings, and Rico.
With our HTS-based REG product, we are offering a new approach that provides alternatives to utilities for power system design.
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With respect to our Wind business, other companies that serve the wind turbine components industry include ABB and Hopewind.
−Removed: We also face indirect competition in the wind energy market from global manufacturers of wind turbines, such as Siemens Gamesa, General Electric, Vestas and Suzlon.
+Added: We also face indirect competition in the wind energy market from global manufacturers of wind turbines, such as Siemens Gamesa, Vestas, Envision and Suzlon.
We face competition for the supply of wind turbine engineering design services from design engineering firms such as Aerovide and W2E.
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laws, or if we experience difficulties in payments or intellectual property matters in foreign jurisdictions, or if significant political, economic or regulatory changes occur, our results of operations would be adversely affected.
−Removed: Our success could depend upon the commercial adoption of the REG system, which is currently limited, and a widespread commercial market for our REG products may not develop.
−Removed: To date, there has been no widespread commercial use of the REG system.
−Removed: It is uncertain whether a robust commercial market for those new and unproven products will ever develop.
−Removed: In addition, we believe in-grid demonstrations of REG systems are necessary to convince utilities and power grid operators of the benefits of this technology.
−Removed: Even if a project is funded, completion of projects can be delayed as a result of other factors.
−Removed: It is possible that the market demands we currently anticipate for our REG system will not develop and that they will never achieve widespread commercial acceptance.
−Removed: In such event, we would not be able to implement our strategy, and our results of operations could be adversely affected.
−Removed: Even if a commercial market for our REG systems were to develop, commercial terms requested by utilities and power grid operators relating to bonding requirements, limitations of liability, warranty periods, or other contractual provisions, may not be acceptable to us, which could impede our ability to enter into contractual arrangements for the sale of our REG system.
Industry consolidation could result in more powerful competitors and fewer customers.
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If we were to lose market share or customers or face pricing pressure due to consolidation of our customers, our results of operations and financial condition could be adversely affected.
−Removed: Increasing focus and scrutiny on environmental sustainability and social initiatives could increase our costs, and inaction could harm our reputation and adversely impact our financial results.
−Removed: There has been increasing public focus by investors, customers, environmental activists, the media and governmental and nongovernmental organizations on a variety of environmental, social and other sustainability matters.
+Added: Our success could depend upon the commercial adoption of the REG system, which is currently limited, and a widespread commercial market for our REG products may not develop.
+Added: To date, there has been no widespread commercial use of the REG system.
+Added: It is uncertain whether a robust commercial market for those new and unproven products will ever develop.
+Added: In addition, we believe in-grid demonstrations of REG systems are necessary to convince utilities and power grid operators of the benefits of this technology.
+Added: Even if a project is funded, completion of projects can be delayed as a result of other factors.
+Added: It is possible that the market demands we currently anticipate for our REG system will not develop and that they will never achieve widespread commercial acceptance.
+Added: In such event, we would not be able to implement our strategy, and our results of operations could be adversely affected.
+Added: Even if a commercial market for our REG systems were to develop, commercial terms requested by utilities and power grid operators relating to bonding requirements, limitations of liability, warranty periods, or other contractual provisions, may not be acceptable to us, which could impede our ability to enter into contractual arrangements for the sale of our REG system.
+Added: Increasing focus and scrutiny on environmental sustainability and social initiatives could adversely impact our business and financial results .
+Added: There has been increasing public focus by investors, customers, environmental activists, the media and governmental and nongovernmental organizations on climate, human capital, and other environmental, social and similar sustainability matters.
If we are not effective in addressing environmental, social and other sustainability matters affecting our business, including any relevant sustainability goals, our reputation and financial results may suffer.
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Moreover, we may not be able to successfully complete such initiatives due to factors that are within or outside of our control.
−Removed: Even if this is not the case, our actions may subsequently be determined to be insufficient by various stakeholders, and we may be subject to investor or regulator engagement on our ESG efforts, even if such initiatives are currently voluntary.
−Removed: Certain market participants, including major institutional investors and capital providers, use third-party benchmarks and scores to assess companies’ ESG profiles in making investment or voting decisions.
−Removed: We have limited and in some instances no visibility or control over these scores or their underlying methodologies.
−Removed: Unfavorable ESG ratings could lead to increased negative investor sentiment towards us or our industry, which could negatively impact our share price as well as our access to and cost of capital.
−Removed: To the extent ESG matters negatively impact our reputation, it may also impede our ability to compete as effectively to attract and retain employees or customers, which may adversely impact our operations.
−Removed: Simultaneously, there are efforts by some stakeholders to reduce companies’ efforts on certain ESG-related matters.
−Removed: Both advocates and opponents to certain ESG matters are increasingly resorting to a range of activism forms, including media campaigns and litigation, to advance their perspectives.
−Removed: In addition, this emphasis on environmental, social, and other sustainability matters has resulted and may result in the adoption of new laws and regulations, including new reporting requirements.
−Removed: For example, various policymakers have adopted, or are considering adopting, requirements for the disclosure of climate- or other ESG-related information, which may require significant additional costs to comply.
−Removed: If we fail to comply with new laws, regulations, or reporting requirements, our reputation and business could be adversely impacted.
+Added: Even if this is not the case, we cannot guarantee that our approaches or results will align with the expectations of any particular stakeholder.
+Added: Stakeholder expectations are not uniform, and both advocates and opponents to certain ESG matters are increasingly resorting to a range of activism forms, including media campaigns and litigation, to advance their perspectives.
+Added: There are also increasing regulatory requirements related to various ESG matters.
+Added: For example, various policymakers have adopted, or are considering adopting, requirements for the disclosure of climate- or other ESG-related information, or certain substantive considerations regarding ESG in operations, which may require significant additional costs to comply.
+Added: As with other stakeholder expectations, such regulations are divergent and, at times, conflict, which may increase the costs and complexity of compliance and any associated risks.
+Added: Any failure to successfully navigate regulatory developments and other stakeholder expectations may result in additional costs, difficulties in attracting or retaining customers or employees, reputational harm, regulatory or investor engagement, or other adverse impacts.
Additionally, many of our customers and suppliers may be subject to similar expectations, which may augment or create additional risks, including risks that may not be known to us.
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If the patents that we own or license or our trade secrets and proprietary know-how fail to protect our technologies, our market position may be adversely affected.
−Removed: There are a number of technological challenges that must be successfully addressed before our superconductor products can gain widespread commercial acceptance, and our inability to address such technological challenges could adversely affect our ability to acquire customers for our products.
−Removed: Many of our superconductor products are in the early stages of commercialization, while others are still under development.
−Removed: There are a number of technological challenges that we must successfully address to complete our development and commercialization efforts for superconductor products.
−Removed: We will also need to improve the performance and reduce the cost of our Amperium wire to expand the number of commercial applications for it.
−Removed: We may be unable to meet such technological challenges or to sufficiently improve the performance and reduce the costs of our Amperium wire.
−Removed: Delays in development, as a result of technological challenges or other factors, may result in the introduction or commercial acceptance of our superconductor products later than anticipated.
Third parties have or may acquire patents that cover the materials, processes and technologies we use or may use in the future to manufacture our Amperium products, and our success depends on our ability to license such patents or other proprietary rights.
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Even if we are successful in such a proceeding, we could incur substantial costs and diversion of management resources in prosecuting or defending such a proceeding.
+Added: There are a number of technological challenges that must be successfully addressed before our superconductor products can gain widespread commercial acceptance, and our inability to address such technological challenges could adversely affect our ability to acquire customers for our products.
+Added: Many of our superconductor products are in the early stages of commercialization, while others are still under development.
+Added: There are a number of technological challenges that we must successfully address to complete our development and commercialization efforts for superconductor products.
+Added: We will also need to improve the performance and reduce the cost of our Amperium wire to expand the number of commercial applications for it.
+Added: We may be unable to meet such technological challenges or to sufficiently improve the performance and reduce the costs of our Amperium wire.
+Added: Delays in development, as a result of technological challenges or other factors, may result in the introduction or commercial acceptance of our superconductor products later than anticipated.
Risks Related to Our Common Stock
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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.