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Item 8. Financial Statements and Supplementary Data

2026-05-27 compared with 2025-05-21 · 447 added, 179 removed, 1025 unchanged (38% of the section changed)

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Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors of American Superconductor Corporation

To the Stockholders and the Board of Directors of American Superconductor Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of American Superconductor Corporation and its subsidiaries (the Company) as of March 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the two years in the period ended March 31, 2025, and the related notes to the consolidated financial statements (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended March 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of March 31, 2025, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated May 21, 2025 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

We have audited the accompanying consolidated balance sheets of American Superconductor Corporation and its subsidiaries (the Company) as of March 31, 2026 and 2025, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended March 31, 2026, and the related notes to the consolidated financial statements and schedules (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2026 and 2025, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 2026, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of March 31, 2026, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

Our report dated May 27, 2026, expressed an opinion that the Company had not maintained effective internal control over financial reporting as of March 31, 2026, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2023.

Basis for Opinion

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As described in Notes 3 and 4 of the consolidated financial statements, for certain arrangements, such as contracts to perform research and development, prototype development contracts and certain customized product sales, the Company records revenues using the over-time method, measured by the relationship of costs incurred to total estimated contract costs.

The ability to reliably estimate total estimated contract costs is challenging, especially on long-term prototype development contracts, and may require significant analysis and judgments by management, including evaluating customer change orders, to determine the appropriate amount of revenue to recognize.

The ability to reliably estimate total estimated contract costs is challenging, especially on long-term prototype development contracts, and may require significant analysis and judgments by management to determine the appropriate amount of revenue to recognize.

We identified revenue recognition pertaining to customer contracts satisfied over-time as a critical audit matter as there are significant judgments exercised by management in determining total estimated contract costs used in determining revenue recognition.

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Evaluated management’s estimations of total contract cost by assessing actual costs to date against projections made throughout the course of the contract term.

Valuation of Certain Tangible and Intangible Assets in Business Combination

As described in Note 2 of the consolidated financial statements, the Company completed the acquisition of Megatran Industries, Inc.

on August 1, 2024, for total consideration of $61.4 million.

Valuation of Certain Intangible Assets and Contingent Consideration in Business Combination

As described in Note 2 of the consolidated financial statements, the Company completed the acquisition of Comtrafo Indústria de Transformadores Elétricos S.A.

("Comtrafo") on December 5, 2025, for total consideration of $202.9 million.

The Company accounted for this transaction under the acquisition method of accounting for business combinations.

Accordingly, the total consideration paid was allocated to the assets acquired and liabilities assumed based on their respective fair values, including identified intangible assets and land.

The Company estimated the fair value of the identified intangible assets using the multi-period excess earnings method, which required management to make significant estimates and assumptions related to revenue growth and expense forecasts, customer attrition rates, and the selection of discount rates.

The Company also made significant judgments regarding the estimates used to determine the fair value of the acquired land.

We identified the valuation of the identified intangible assets and land as a critical audit matter because of the significant estimates and assumptions management used in the fair value determination.

Auditing management’s forecasted revenue growth and expenses, customer attrition rates, selection of the discount rates, and the fair value of acquired land required a high degree of auditor judgment and an increased extent of effort when performing audit procedures, including the use of our valuation specialists.

Our audit procedures related to the determination of the fair value of identified intangible assets and land, included the following, among others:

We obtained an understanding of the relevant internal controls related to the valuation of the identified intangible assets and land and tested the design and operating effectiveness of those internal controls including management’s review control over the assumptions and key inputs used in the purchase price allocation.

We evaluated the reasonableness of management’s revenue growth and expenses forecasts and customer attrition rates by comparing the projections to historical results as well as industry benchmarks.

Accordingly, the total consideration paid was allocated to the assets acquired and liabilities assumed based on their respective fair values, including identified intangible assets of $10.5 million and resulting goodwill of $125.3 million.

Of the identified intangible assets acquired, the most significant included a customer relationship intangible asset of $7.9 million.

The Company estimated the fair value of the customer relationship intangible asset using the multi-period excess earnings method, which required management to make significant estimates and assumptions related to revenue growth and expense forecasts, customer attrition rates, and the selection of discount rates.

In addition, as described in Notes 2 and 13 of the consolidated financial statements, the total consideration included contingent consideration in the form of a seller earnout payment with a fair value of $34.8 million at the acquisition date.

The Company estimated the fair value of the contingent consideration upon acquisition using a valuation model that incorporates probability adjusted assumptions that required the use of a management third-party specialist as well as required management to make significant estimates and assumptions related to forecasted earnings before interest, taxes, depreciation, and amortization (EBITDA), EBITDA volatility and discount rate.

We identified the valuation of the customer relationship intangible asset and contingent consideration as a critical audit matter because of the significant estimates and assumptions management used in the fair value determination.

Auditing management’s forecasted revenue growth and expenses, customer attrition rates, and selection of the discount rate related to the customer relationship intangible asset and forecast of future EBITDA, EBITDA volatility, and the selection of the discount rate along with the complexity of the valuation model related to the contingent consideration required a high degree of auditor judgment and an increased extent of effort when performing audit procedures, including the use of our valuation specialists.

Our audit procedures related to the determination of the fair value of the customer relationship intangible asset and contingent consideration, included the following, among others:

We evaluated the reasonableness of management’s revenue growth and expenses forecasts and customer attrition rates for the customer relationship intangible asset and forecasted EBITDA and probabilities of achieving these metrics for contingent consideration by comparing the projections to historical results as well as industry benchmarks.

With the assistance of our valuation specialists, we:

Evaluated the reasonableness of the Company’s valuation methodologies

Evaluated the reasonableness of the Company’s valuation methodologies and verified the accuracy of the calculations in the customer relationship and contingent consideration models, including the performance of corroborating calculations.

Tested the source information underlying the determination of the discount rates and verified the accuracy of the calculations.

Tested the relevance and reliability of source information underlying the determination of fair value of the acquired land and compared to available market data.

Developed an independent estimate of the fair value of the acquired land and compared to management’s estimate.

Neeltran Goodwill Valuation Impairment Assessment

As described in Notes 3 and 5 to the consolidated financial statements, management tests goodwill for impairment, at the reporting unit level, as of February 28 of each fiscal year, or more frequently if events or changes in circumstances indicate the goodwill asset might be impaired.

The Company first assesses qualitatively whether it is necessary to perform a quantitative goodwill impairment test.

The quantitative impairment test is required only if the entity concludes that it is more likely than not that a reporting unit’s fair value is less than its carrying amount.

A quantitative assessment was performed as of February 28, 2025, for the Company’s goodwill balance resulting from its acquisition of Neeltran, Inc.

To test goodwill quantitatively for impairment, management compares the estimated fair value of each reporting unit with the carrying amount of each reporting unit, including the recorded goodwill.

In estimating the fair value of each reporting unit, management uses a methodology which combines an income approach, using a discounted cash flows method, with a market approach.

We identified the goodwill impairment assessment for the Company’s Neeltran reporting unit as a critical audit matter because of the significant estimates and assumptions used by management when estimating the fair value of this reporting unit, including management’s forecasts of revenue growth rates, operating margins and terminal growth rates as well as management’s selection of the discount rates.

Auditing the reasonableness of management’s estimates and assumptions involved a high degree of auditor judgment and increased audit effort, including the use of our valuation specialists.

Our audit procedures related to the assessment of Neeltran goodwill impairment included the following, among others:

We obtained an understanding of the relevant internal controls related to management’s goodwill impairment assessment and tested the design and operating effectiveness of those internal controls including management’s review control over the significant assumptions in the goodwill impairment assessment.

We evaluated the reasonableness of management’s forecasts of revenue growth rates and operating margins by comparing the projections to historical results.

We tested the underlying data used by management in their development of forecasts of revenue growth rates and operating margins for accuracy and completeness.

We evaluated the reasonableness of management’s selection of comparable entities with similar operations and economic characteristics.

With the assistance of our valuation specialists, we:

Evaluated the reasonableness of the discount rate and multiple of earnings used in management’s assessment by comparing the underlying source information to publicly available market data and verifying the accuracy of the calculations

Evaluated the appropriateness of the valuation methods used by management and tested their mathematical accuracy.

/s/ RSM US LLP

Evaluated the appropriateness of the approach taken to determine the discount rate and performed a corroborative calculation on the components of the discount rate and compared that analysis to the discount rate selected by management.

Realizability of Deferred Tax Assets

As described in Notes 3 and 14 to the consolidated financial statements, as of March 31, 2026, the Company’s deferred tax assets, before valuation allowance, were $177.2 million, and during the year ended March 31, 2026, the Company recorded a deferred tax benefit of $118.4 million related to the reduction of a previously established valuation allowance against deferred tax assets.

The Company assesses the likelihood that its deferred tax assets will be realizable from the generation of future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense.

In making the determination of the realizability of deferred tax assets and the need for a valuation allowance, management analyzes all available positive and negative evidence, including estimates of projected future taxable income, and recent financial results.

We identified the Company’s evaluation of the realizability of deferred tax assets as a critical audit matter because of the significant assumptions and judgments used by management in considering all positive and negative evidence, including projections of future taxable income.

Auditing management’s assumptions and judgments regarding the realizability of the Company’s deferred tax assets involved a high degree of auditor judgment and increased audit effort, including the use of our income tax professionals, due to the impact these assumptions and judgments have on the valuation allowance analysis.

Our audit procedures related to the estimates and assumptions used in the Company’s evaluation of the realizability of deferred tax assets included the following, among others:

We obtained an understanding of the relevant internal controls related to the realizability of deferred tax assets and tested the design and operating effectiveness of those internal controls including management’s evaluation of the positive and negative evidence such as projections of future taxable income.

We tested the completeness and accuracy of the underlying data used by management in developing the projections of future taxable income and confirmed consistency with projections used and assumptions utilized in other areas of the audit.

With the assistance of our income tax professionals, we evaluated the reasonableness of the Company’s projections of future taxable income, including the taxable income by tax jurisdiction, by comparing the projections to historical results and comparing management's prior forecasts to historical results.

We have served as the Company's auditor since 2013.

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AMERICAN SUPERCONDUCTOR CORPORATION

PART I — FINANCIAL INFORMATION

FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

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Deferred tax assets

119,474 1,178

Equity-method investments

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Lease liability, current portion

Debt, current portion

Contingent consideration

Contingent consideration, current portion

Deferred revenue, current portion

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Deferred tax liabilities

Contingent consideration, long term portion

Other liabilities

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1,481,476 1,259,540

Treasury stock, at cost, 403,351 and 397,631 at March 31, 2025 and 2024, respectively

Treasury stock, at cost, 403,351 at March 31, 2026 and 2025

( 3,765 ) ( 3,765 )

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Total operating expenses

Operating loss

Operating income (loss)

Interest income, net

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Comprehensive Income (Loss)

Accumulated Deficit

Stockholders' Equity

Accumulated Deficit Stockholders' Equity

Balance at March 31, 2023

29,937 $ 299 $ 1,139,113 $ ( 3,639 ) $ 1,571 $ ( 1,055,547 ) $ 81,797

Issuance of common stock - ESPP

34 — 279 — — — 279

Issuance of common stock - restricted shares, net of forfeited shares

682 7 ( 7 ) — — — —

Stock-based compensation expense

— — 4,652 — — — 4,652

Issuance of stock for 401(k) match

80 1 623 — — — 624

Issuance of common stock for contingent consideration

400 4 3,088 — — — 3,092

Issuance of common stock - Equity Offering

6,210 62 65,165 — — — 65,227

Cumulative translation adjustment

— — — — 11 — 11

— — — — — ( 11,111 ) ( 11,111 )

Balance at March 31, 2024

37,343 $ 373 $ 1,212,913 $ ( 3,639 ) $ 1,582 $ ( 1,066,658 ) $ 144,571

Issuance of common stock - ESPP

18 — 307 — — — 307

Issuance of common stock - restricted shares, net of forfeited shares

889 10 ( 9 ) — — — 1

Stock-based compensation expense

— — 7,794 — — — 7,794

Issuance of stock for 401(k) match

41 — 845 — — — 845

Repurchase of treasury stock

— — — ( 126 ) — — ( 126 )

Issuance of common stock - NWL acquisition, net of offering expenses

1,297 13 31,189 — — — 31,202

Issuance of common stock to settle contingent consideration

300 3 6,501 — — — 6,504

Cumulative translation adjustment

— — — — ( 17 ) — ( 17 )

— — — — — 6,033 6,033

Balance at March 31, 2025

39,888 $ 399 $ 1,259,540 $ ( 3,765 ) $ 1,565 $ ( 1,060,625 ) $ 197,114

Issuance of common stock - ESPP

9 — 325 — — — 325

Exercise of stock options

10 — 66 — — — 66

Issuance of common stock - restricted shares, net of forfeited shares

926 10 ( 10 ) — — — —

Stock-based compensation expense

— — 15,869 — — — 15,869

Issuance of stock for 401(k) match

42 — 1,467 — — — 1,467

Issuance of common stock - equity offering, net of offering expenses

4,744 47 124,530 — — — 124,577

Issuance of common stock - Comtrafo acquisition, net of offering expenses

2,417 24 79,689 — — — 79,713

Cumulative translation adjustment

— — — — 2,507 — 2,507

— — — — — 133,809 133,809

Balance at March 31, 2026

48,036 $ 480 $ 1,481,476 $ ( 3,765 ) $ 4,072 $ ( 926,816 ) $ 555,447

The accompanying notes are an integral part of the consolidated financial statements.

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Net income (loss)

$ 133,809 $ 6,033 $ ( 11,111 )

Adjustments to reconcile net income (loss) to net cash provided by operations:

Depreciation and amortization

7,386 5,560 4,494

Stock-based compensation expense

15,869 7,794 4,652

Provision for excess and obsolete inventory

3,497 1,532 1,970

Amortization of operating lease right-of-use assets

1,068 976 321

Deferred income taxes

Earnings from equity method investments

( 118,683 ) ( 4,304 ) 65

Earnings (loss) from equity method investments

( 220 ) 132 —

Change in fair value of contingent consideration

4,171 6,682 4,922

Other non-cash items

316 ( 587 ) 44

Unrealized foreign exchange gain on cash and cash equivalents

( 2 ) ( 41 ) ( 2 )

Changes in operating asset and liability accounts:

Accounts receivable

( 16,292 ) ( 3,213 ) 4,340

( 6,961 ) ( 7,707 ) ( 6,841 )

Prepaid expenses and other current assets

( 598 ) 543 5,992

Operating leases

( 503 ) ( 1,563 ) ( 327 )

Accounts payable and accrued expenses

7,142 3,209 ( 13,498 )

Deferred revenue

( 6,851 ) 13,239 7,117

Net cash provided by operating activities

23,148 28,285 2,138

Cash flows from investing activities:

Purchases of property, plant and equipment

( 4,888 ) ( 2,415 ) ( 934 )

Cash paid to settle NWL contingent consideration liability

Cash paid for NWL Acquisition, net of cash acquired

— ( 3,278 ) —

Cash paid for acquisition, net of cash acquired

( 72,096 ) ( 29,577 ) —

Change in other assets

( 98 ) 64 ( 27 )

Net cash used in investing activities

( 77,082 ) ( 35,206 ) ( 961 )

Cash flows from financing activities:

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Repayment of debt

( 8,809 ) ( 25 ) ( 65 )

Cash paid related to registration of common stock shares

Proceeds from public equity offering, net

Proceeds from public equity offering, net of offering expenses

124,501 — 65,227

Proceeds from exercise of employee stock options and ESPP

Net cash provided by financing activities

116,082 8 65,441

Effect of exchange rate changes on cash, cash equivalents and restricted cash

Net (decrease) increase in cash, cash equivalents and restricted cash

62,172 ( 6,899 ) 66,605

Cash, cash equivalents and restricted cash at beginning of year

85,381 92,280 25,675

Cash, cash equivalents and restricted cash at end of year

$ 147,553 $ 85,381 $ 92,280

Supplemental schedule of cash flow information:

Cash paid for income taxes, net of refunds

$ 706 $ 312 $ 286

Non-cash investing and financing activities

Issuance of common stock in connection with the purchase of NWL

$ — $ 31,350 $ —

Issuance of common stock in connection with the purchase of Comtrafo

$ 79,713 $ — $ —

Issuance of common stock to settle contingent consideration

$ — $ 6,504 $ 3,092

Right-of-use assets obtained in exchange for new lease obligations

$ 1,136 $ 2,247 $ 680

Issuance of common stock to settle 401(k) match liabilities

$ 1,467 $ 845 $ 624

The accompanying notes are an integral part of the consolidated financial statements.

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American Superconductor Corporation (together with its subsidiaries, “AMSC®” or the “Company”) was founded on April 9, 1987.

The Company is a leading system provider of megawatt-scale power resiliency solutions that orchestrate the rhythm and harmony of power on the grid™ and protect and expand the capability of the Navy's fleet.

The Company is a leading provider of power control solutions that harmonize an increasingly complex energy system and enable customers to scale their operations without added complexity or size.

The Company’s system level products leverage its proprietary “smart materials” and “smart software and controls” to provide enhanced resiliency and improved performance of megawatt-scale power flow.

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Cash provided by operations for the year ended March 31, 2026 was $ 23.1 million.

On December 5, 2025 ( the "Comtrafo Acquisition Date"), the Company entered into a Stock Exchange Agreement (the "Stock Exchange Agreement") with the selling stockholders named therein (the "Stockholders").

Pursuant to the terms of the Stock Exchange Agreement, Mardin Participações Ltda., an entity incorporated in Brazil (“AMSC Brazil”) and the Company's wholly-owned subsidiary, directly or indirectly, purchased all of the issued and outstanding shares of Comtrafo Indústria de Transformadores Elétricos S.A.

("Comtrafo") (collectively, the "Comtrafo Acquisition") for (a) (i) 300 million Brazilian Real in cash;

and (b) 2,417,142 restricted shares of our common stock, $ 0.01 par value per share (the "AMSC Shares") that were paid and issued, respectively, at closing.

In addition, pursuant to certain additional real property agreements, AMSC Brazil through Comtrafo purchased certain real estate assets and transportation assets of Comtrafo for 155.6 million Brazilian Real and 13.4 million Brazilian Real, respectively, in cash.

Additionally, AMSC Brazil has agreed to pay the Stockholders up to an additional 382.5 million Brazilian Real in cash (the "Earnout") upon the achievement of specified earnings before interest, taxes, depreciation, and amortization ("EBITDA") objectives during the three years following the closing.

On May 15, 2026, pursuant to the terms of the Stock Exchange Agreement, Comtrafo purchased a certain real estate asset from the selling stockholders that Comtrafo was leasing and using for administrative and manufacturing operations for 37.2 million Brazilian Real in cash.

Comtrafo is a Brazil-based manufacturer of large power and distribution transformers primarily for utility customers and also for industrial customers.

In June 2025, we completed an offering of 4,743,750 shares of our common stock at a public offering price of $ 28.00 per share under our Registration Statement on Form S- 3.

We received aggregate net proceeds of approximately $ 124.6 million after deducting underwriting discounts and commissions and offering expenses.

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

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

(b) a number of restricted shares (rounded up or down to the nearest whole share, as applicable) (the “Company Shares”) of the Company’s common stock, $.

01 par value per share equal to the quotient obtained by dividing ( x ) $ 31.4 million (the “Share Purchase Price”) by (y) the closing price per share of common stock on the Nasdaq Global Select Market on the last trading day immediately preceding the Acquisition Date;

(b) a number of restricted shares (rounded up or down to the nearest whole share, as applicable) (the “Company Shares”) of the Company’s common stock, $.01 par value per share equal to the quotient obtained by dividing ( x ) $ 31.4 million (the “Share Purchase Price”) by (y) the closing price per share of common stock on the Nasdaq Global Select Market on the last trading day immediately preceding the Acquisition Date;

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 (the “Additional Cash Purchase Price”).

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The Second Form S- 3 allows the Company to offer and sell from time-to-time unspecified amounts of 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 assisted the Megatran selling stockholders in the resale of their common stock and is intended to provide the Company flexibility to conduct registered sales of its securities, subject to market conditions, in order to fund its future capital needs.

The Second Form S- 3 assisted the Megatran selling stockholders in the resale of their common stock and registers Comtrafo selling stockholder's AMSC shares, and is intended to provide the Company flexibility to conduct registered sales of its securities, subject to market conditions, in order to fund its 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.

The Company believes that based on the information presented above and its annual management assessment, it has sufficient liquidity to fund its operations and capital expenditures for the next

The Company believes that based on the information presented above and its annual management assessment, it has sufficient liquidity to fund its operations and capital expenditures for at least the next

twelve months following the issuance of the consolidated financial statements for the year ended

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no assurance that the Company will be able to continue to raise additional capital, on favorable terms or at all, from other sources or execute on any other means of improving liquidity described above.

Acquisition of Comtrafo

On December 5, 2025, the Company entered into the Stock Exchange Agreement with the selling stockholders named therein.

Pursuant to the terms of the Stock Exchange Agreement and concurrently with entering into such agreement, AMSC Brazil, the Company's wholly-owned subsidiary, directly or indirectly acquired all of the issued and outstanding shares of capital stock of Comtrafo.

Additionally, the Company has agreed to pay the selling stockholders of the Comtrafo Acquisition an additional amount up to an additional 382.5 million Brazilian Real of cash upon the achievement of specified EBITDA objectives during the three years following the Comtrafo Acquisition Date.

This contingent consideration is recorded as a liability based on a Monte Carlo simulation to determine fair value at the time of issuance.

Comtrafo is a Brazil-based manufacturer of large power and distribution transformers primarily for utility customers and also for industrial customers.

The acquisition will expand the Company's global footprint into Latin America.

The Comtrafo Acquisition has been accounted for under the purchase method of accounting in accordance with ASC 805, Business Combinations .

The Company allocated the purchase price on a preliminary basis using the information available as of December 5, 2025 to the assets acquired and liabilities assumed at their estimated fair values as of the date of acquisition.

Due to the timing of the completion of the acquisition, the purchase price and related allocation are preliminary and could be revised as a result of adjustments made to the purchase price, and revisions of provisional estimates of fair values of deferred taxes, contingent consideration and intangible asset balances.

Changes to the purchase price allocation could be significant.

The purchase price allocation will be finalized within the measurement period of up to one year from the acquisition.

The excess of the purchase price paid by the Company over the estimated fair value of net assets acquired has been recorded as goodwill.

The total purchase price of approximately $ 202.9 million includes the fair value of the Company's common stock issued at closing, contingent consideration and cash paid, as follows (in millions except share data and per share):

Cash payments

Issuance of 2,417,142 shares of Company’s common stock

Contingent consideration

Total consideration

At the Comtrafo Acquisition Date, in addition to the $ 88.3 million cash, the Company valued the Company's common stock at $ 33.01 per share, which was the opening price on that date.

Comtrafo Acquisition costs of $ 1.2 million were included in selling, general, and administrative ("SG&A") for the fiscal year ended March 31, 2026 .

During the quarter ended March 31, 2026 the Company determined adjustments were required to the opening balance sheet to correct immaterial errors in the allocation and recording of the purchase price reflected in the table below.

The debt was subsequently paid in the quarter ended March 31, 2026 and the restricted cash balance was released in the quarter ended March 31, 2026.

The following table summarizes the allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed and related deferred income taxes in connection with the Comtrafo Acquisition as of the Comtrafo Acquisition Date as previously reported in the period ended December 31, 2025 and after the adjustments for the immaterial errors recorded in the quarter ended March 31, 2026 ( in millions):

December 05, 2025 Allocation of Purchase Price as Initially Reported Adjustments

December 05, 2025 Allocation of Purchase Price as Corrected

Cash and cash equivalents

$ 16.2 $ ( 3.4 ) $ 12.8

Restricted cash

Prepaid expenses and other current assets

6.7 ( 1.1 ) $ 5.6

Accounts receivable

4.1 2.4 $ 6.5

28.4 0.2 $ 28.6

Property, plant and equipment

50.3 ( 0.4 ) $ 49.9

Deferred tax asset

Accounts payable and accrued expenses

( 10.2 ) 1.1 $ ( 9.1 )

Debt, current and long-term

( 8.8 ) - $ ( 8.8 )

Deferred revenue

( 19.8 ) ( 3.5 ) $ ( 23.3 )

Net tangible assets/(liabilities)

71.0 ( 1.3 ) $ 69.7

1.8 0.8 $ 2.6

Customer relationships

7.7 0.2 $ 7.9

Net identifiable intangible assets/(liabilities)

9.5 1.0 $ 10.5

122.2 0.5 $ 122.7

Total purchase consideration

$ 202.7 $ 0.2 $ 202.9

Based on further review by management, a measurement period adjustment of $ 0.4 million was recorded to increase accounts receivable and reduce deferred tax assets by $ 3.0 million with an offsetting increase to goodwill, increasing the total goodwill to $ 125.3 million.

The fair value of the financial assets acquired includes receivables with a fair value of $ 6.9 million.

The gross amount due is $ 10.5 million, of which $ 3.6 million is expected to be uncollectible.

The Company adjusted the fair value for receivables that exceeded a year.

Inventory includes a $ 1.5 million adjustment to step-up the inventory balance to fair value consistent with the purchase price allocation.

The fair value was determined based on the estimated selling price of the inventory, less the remaining manufacturing and selling cost and a normal profit margin on those manufacturing and selling efforts.

The inventory step-up adjustment increased cost of revenue $ 0.8 million in the fiscal year ended March 31, 2026 , as the inventory was sold.

Backlog of $ 2.6 million was evaluated using the multi period excess earnings method under the income approach.

The contracts do not provide for any guarantees to source all future requirements from the Company.

The amortization method being utilized is economic consumption estimated over a sixteen -month period with the expense being allocated to cost of revenues.

Customer relationships of $ 7.9 million relate to customers currently under contract and was based on a multi period excess earnings method under the income approach.

The method of amortization being utilized is the economic consumption over 5 years with the expense being allocated to SG&A.

Goodwill represents the value associated with the acquired workforce and expected synergies related to the business combination of the two companies.

Goodwill resulting from the Comtrafo Acquisition was assigned to the Company's Grid segment.

Goodwill recognized in the Comtrafo Acquisition is not deductible for tax purposes.

The $ 1.1 million of deferred tax asset is primarily related to net operating losses and basis difference of inventory, offset by basis difference of intangibles and property, plant, and equipment.

Acquisition of NWL

As described in Note 1, Nature of the Business and Operations and Liquidity, on the Acquisition Date, the Company acquired all of the issued and outstanding shares of capital stock of Megatran.

On August 1, 2024, the Company acquired all of the issued and outstanding shares of capital stock of Megatran.

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

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The excess of the purchase price paid by the Company over the estimated fair value of net assets acquired has been recorded as goodwill.

The total purchase price of approximately $ 61.4 million includes the fair value of shares of the Company’s common stock issued at closing, and cash paid, as follows (in millions):

The total purchase price of approximately $ 61.4 million includes the fair value of shares of the Company’s common stock issued at closing, and cash paid, as follows (in millions except shares):

Cash payments $ 30.0

Issuance of 1,297,600 shares of Company’s common stock 31.4

Total consideration $ 61.4

At the Acquisition Date, in addition to the $ 30.0 million cash, the Company valued the Company’s common stock, using $ 24.16 per share, which was the closing price on the day prior to the day that the Company acquired Megatran.

Acquisition costs of $ 1.1 million were included in selling, general and administrative ("SG&A") for the fiscal year ended March 31, 2025 .

Acquisition costs of $ 1.1 million were included in SG&A for the fiscal year ended March 31, 2025.

The following table summarizes the allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed and related deferred income taxes in connection with the Acquisition as of the Acquisition Date and reflective of measurement period adjustments (in millions):

24 unchanged sentences

Goodwill recognized in the Acquisition is not deductible for tax purposes.

This purchase price allocation is preliminary and has not been finalized as the analysis on the assets and liabilities acquired, primarily the tax related liability, may require further adjustments to our purchase accounting that could result in a measurement period adjustment that would impact the Company's reported net assets and goodwill as of August 1, 2024.

Material changes, if any, to the preliminary allocation summarized above will be reported once the related uncertainties are resolved, but no later than August 1, 2025.

The deferred tax liability initially valued at $ 6.4 million is primarily related to basis difference of property, plant, and equipment.

As of March 31, 2025 based on basis differences identified through the finalization of NWL’s pre-acquisition tax returns as well as a true up of state tax rates, a reduction in the deferred tax liability of $ 0.8 million was recorded in the three months ended March 31, 2025.

This decreased the balance to $ 5.6 million, and the offsetting reduction was recorded to Goodwill, decreasing the balance to $ 4.7 million.

The Company has finalized its purchase price allocation for the NWL Acquisition, and there were no changes to net assets and goodwill recorded by the Company as of August 1, 2025.

Pro forma Operating Results (Unaudited)

The pro forma consolidated statement of operations for the fiscal years ended March 31, 2025 and 2024 presented as if the Acquisition had occurred on April 1, 2023, is unaudited and is as follows:

The pro forma consolidated statement of operations for the fiscal years ended March 31, 2026 and 2025 presented as if the acquisitions of Comtrafo and NWL had occurred on April 1, 2024 , is unaudited and is as follows:

Fiscal year ended March 31,

2 unchanged sentences

$ 139,474 $ 14,611

$ 4,153 $ 1,245

Net income per common share

5 unchanged sentences

45,551 40,572

The pro forma amounts include the historical operating results of the Company and Megatran with appropriate adjustments that give effect to acquisition related costs, income taxes, intangible amortization resulting from the Acquisition and certain conforming accounting policies of the Company.

The pro forma amounts are not necessarily indicative of the operating results that would have occurred if the Acquisition and related transactions had been completed at the beginning of the applicable periods presented.

The pro forma amounts include the historical operating results of the Company, NWL, and Comtrafo with appropriate adjustments that give effect to acquisition related costs, income taxes, intangible amortization resulting from the Acquisitions and certain conforming accounting policies of the Company.

The pro forma amounts are not necessarily indicative of the operating results that would have occurred if the Acquisitions and related transactions had been completed at the beginning of the applicable periods presented.

In addition, the pro forma amounts are not necessarily indicative of operating results in future periods.

In the consolidated results for the fiscal year ended March 31, 2025 , Megatran’s operations are included in the Company’s consolidated results from the Acquisition Date of August 1, 2024.

Megatran contributed $ 50.5 million of revenue and $ 6.0 million in net income for the Company for the fiscal year ended March 31, 2025 .

Amortization expense of $ 0.8 million is included for the fiscal year ended March 31, 2025 , as a result of the Megatran acquired intangible assets.

In the consolidated results for the fiscal year ended March 31, 2026 , Comtrafo and AMSC Brazil's operations are included in the Company's consolidated results from the Acquisition Date of December 5, 2025.

Comtrafo and AMSC Brazil contributed $ 21.9 million of revenue and $ 3.2 million in net loss for the Company for the fiscal year ended March 31, 2026 .

Amortization expense of $ 1.7 million is included for the fiscal year ended March 31, 2026 , as a result of the Comtrafo acquired intangible assets.

In addition, $ 0.8 million for the step-up basis assigned to acquired inventory was charged to cost of revenues for the fiscal year ended March 31, 2026 .

AMSC Brazil includes a $ 4.2 million loss for the change in fair value on the contingent consideration in the fiscal year ended March 31, 2026 .

Summary of Significant Accounting Policies

5 unchanged sentences

The Company bases its estimates on historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

On an ongoing basis, the Company evaluates its estimates, including those related to revenue recognition, goodwill and intangible assets, business combinations, tax reserves, and deferred tax assets.

On an ongoing basis, the Company evaluates its estimates, including those considered significant related to revenue recognition, goodwill, business combinations, tax reserves, and deferred tax assets.

Provisions for depreciation are based on their estimated useful lives using the straight-line method.

3 unchanged sentences

Cash equivalents consist of highly liquid instruments with maturities of three months or less that are regarded as high quality, low risk investments and are measured using such inputs as quoted prices, and are classified within Level 1 of the valuation hierarchy.

Cash equivalents consist principally of certificates of deposits and money market accounts.

Cash equivalents consist principally of certificates of deposits and money market accounts, and are classified within Level 2 of the valuation hierarchy.

Accounts Receivable

2 unchanged sentences

The Company’s accounts receivable relate principally to a limited number of customers.

As of March 31, 2025 , Innomotics, LLC.

, accounted for approximately 22 % of the Company's accounts receivable balance, with no other customers accounting for greater than 10% of the balance.

As of March 31, 2024 , Capital Power and INOX Wind Limited accounted for approximately 14 % and 12 % of the Company's accounts receivable balance, respectively, with no other customers accounting for greater than 10% of the balance.

As of March 31, 2026 , Irving Shipbuilding accounted for approximately 10 % of the Company's accounts receivable balance, with no other customers accounting for greater than 10% of the balance.

As of March 31, 2025 , Innomotics, LLC accounted for approximately 22 % of the Company's accounts receivable balance, with no other customers accounting for greater than 10% of the balance.

Changes in the financial condition or operations of the Company’s customers may result in delayed payments or non-payments which would adversely impact its cash flows from operating activities and/or its results of operations.

1 unchanged sentence

In determining the allowance for credit losses, the Company evaluates the collectability of accounts receivable based primarily on the probability of recoverability based on historical collection and write-off experience, the age of past due receivables, specific customer circumstances, and current economic trends.

The Company has not recorded an allowance for credit losses as of each of the years ended March 31, 2025 and 2024 .

The Company has not recorded a material allowance for credit losses as of each of the fiscal years ended March 31, 2026 and 2025 .

If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payment, additional allowances may be required.

Failure to accurately estimate the losses for credit losses and ensure that payments are received on a timely basis could have a material adverse effect on the Company’s business, financial condition, results of operations, and cash flows.

Inventories include material, direct labor and related manufacturing overhead, and are stated at the lower of cost, determined on a first -in, first -out basis, or net realizable value determined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.

The Company records inventory when it takes delivery and title to the product according to the terms of each supply contract.

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An analysis is performed annually, or upon execution of any individually material agreement, to ensure that the rates being applied to newly acquired leases are still accurate.

The majority of the Company's leases are classified as operating leases, and therefore the expense is captured in operating loss from operations each period.

All of the Company's leases are classified as operating leases, and therefore the expense is captured in operating loss from operations each period.

The Company has elected to exclude all leases of less than twelve months from the balance sheet presentation.

16 unchanged sentences

The Company evaluates its long-lived assets whenever events or circumstances suggest that the carrying amount of an asset or group of assets may not be recoverable from the estimated undiscounted future cash flows.

There was no impairment indicators during the fiscal years ended March 31, 2025 and 2024 .

There were no impairment indicators identified during the fiscal years ended March 31, 2026 and 2025 or 2024 .

Goodwill represents the excess of cost over net assets of acquired businesses that are consolidated.

5 unchanged sentences

In evaluating whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, an entity should consider the totality of all relevant events or circumstances that affect the fair value or carrying amount of a reporting unit.

If the carrying value of a reporting unit exceeds the reporting unit’s fair value, then an impairment charge is recognized reducing the goodwill by the excess of the carrying amount over the fair value, not to exceed the total amount of the goodwill allocated to the that reporting unit.

See Note 5, "Goodwill" for further information and discussion.

The Company performed its annual assessment of goodwill on February 28, 2025 , and determined that there was no impairment to goodwill.

The Company performed its annual assessment of goodwill on February 28, 2026 , using both qualitative and quantitative analyses and determined that there was no impairment to goodwill.

Revenue Recognition

2 unchanged sentences

The transfer of control can occur at the time of delivery, installation or post-installation where applicable.

The Company's equipment and system product line includes certain contracts which do not meet the requirements of an exchange transaction and therefore do not fall within the scope of Accounting Standards Codification ("ASC") 606.

The Company's product segment line includes certain contracts which do not meet the requirements of an exchange transaction and therefore do not fall within the scope of Accounting Standards Codification ("ASC") 606.

For certain arrangements, such as contracts to perform research and development, prototype development contracts and certain customized product sales, the Company records revenues using the over-time method, measured by the relationship of costs incurred to total estimated contract costs.

38 unchanged sentences

there are no continuing performance obligation in regards to the purchased product and these products have been segregated from the Company's inventories and cannot be used to fill other orders received.

During the fiscal years ended March 31, 2025 and 2024 there were no such held transactions.

During the fiscal year ended March 31, 2026 , revenues included $ 7.9 million from such held transactions.

During the fiscal year ended March 31, 2025 and 2024 there were no such held transactions.

The Company has elected to record taxes collected from customers on a net basis and does not include tax amounts in revenue or costs of revenue.

25 unchanged sentences

Research and development costs are expensed as incurred.

The Company’s provision for income taxes is comprised of a current and a deferred portion.

The current income tax provision is calculated as the estimated taxes payable or refundable on tax returns for the current fiscal year.

The Company’s provision (benefit) for income taxes is comprised of a current and a deferred portion.

The current income (benefit) tax provision is calculated as the estimated taxes payable or refundable on tax returns for the current fiscal year.

The deferred income tax provision is calculated for the estimated future tax effects attributable to temporary differences and carry-forwards using expected tax rates in effect in the years during which the differences are expected to reverse.

1 unchanged sentence

Valuation allowances are established when necessary to reduce net deferred tax assets to the amount expected to be realized.

The Company has provided a valuation allowance against its U.S., Poland, and Romania deferred income tax assets since the Company believes that it is more likely than not that these deferred tax assets are not currently realizable due to uncertainty around profitability in the future.

As of March 31, 2026, the company recorded a $ 118.4 million non-cash income tax benefit related to the release of a substantial portion of its valuation allowance against deferred income tax assets.

This was based on the Company's evaluation of the positive evidence, including cumulative net income position over the three year period ended March 31, 2026, revenue growth, current profitability, expectations regarding future forecasted income, and negative evidence, including uncertainty in economic and political environments from industry competition and dependence on government contracts.

The Company has provided a valuation allowance against certain of its U.S.

deferred income tax assets and a full valuation allowance on its Poland deferred income tax assets since the Company believes that it is more likely than not that these deferred tax assets are not currently realizable due to uncertainty around profitability to fully utilize these deferred tax assets in the future.

Accounting for income taxes requires a two -step approach to recognizing and measuring uncertain tax positions.

29 unchanged sentences

Computation of Net Income (Loss) per Common Share

Basic net loss per share (“EPS”) is computed by dividing net loss by the weighted-average number of common shares outstanding for the period.

Basic net income (loss) per share (“EPS”) is computed by dividing net income (loss) by the weighted-average number of common shares outstanding for the period.

Diluted EPS is computed in periods of net income, by dividing the net loss by the weighted-average number of common shares and dilutive common equivalent shares outstanding during the period, calculated using the treasury stock method.

2 unchanged sentences

Of these, 427,380 were shares of performance-based restricted stock where the contingency was not met, and 731 were awards that were considered anti-dilutive.

For the fiscal years ended March 31, 2024 , common equivalent shares of 809,949 were not included in the calculation of diluted EPS as they were considered antidilutive.

For the fiscal year ended March 31, 2025 , common equivalent shares of 468,815 were not included in the calculation of diluted EPS as they were considered antidilutive.

Of these, 468,652 were shares of performance-based restricted stock where the contingency was not met, and 163 relate to shares associated with the derivative liability for which the contingency had not yet been met.

For the fiscal year ended March 31, 2024 , common equivalent shares of 809,949 were not included in the calculation of diluted EPS as they were considered antidilutive.

Of these, 509,949 were shares of performance-based restricted stock where the contingency was not met, and 300,000 relate to share associated with the derivative liability for which the contingency has not yet been met.

The following table reconciles the numerators and denominators of the EPS calculation for the fiscal years ended March 31, 2026 , 2025 , and 2024 (in thousands except per share amounts):

10 unchanged sentences

43,902 37,718 29,825

Net loss per share ― basic

Net income (loss) per share ― basic

$ 3.12 $ 0.16 $ ( 0.37 )

Net loss per share ― diluted

Net income (loss) per share ― diluted

$ 3.05 $ 0.16 $ ( 0.37 )

1 unchanged sentence

The functional currency of all the Company’s foreign subsidiaries is the U.S.

dollar, except for AMSC Austria, for which the local currency (Euro) is the functional currency.

The assets and liabilities of AMSC Austria are translated into U.S.

dollar, except for AMSC Austria (euro), AMSC Brazil and Comtrafo (Real), for which the local currencies are the functional currency.

The assets and liabilities of AMSC Austria, AMSC Brazil and Comtrafo are translated into U.S.

dollars at the exchange rate in effect at the balance sheet date and income and expense items are translated at average rates for the period.

Cumulative translation adjustments are excluded from net loss and shown as a separate component of stockholders’ equity.

Net foreign currency gains and losses are included in other expense, net on the consolidated statements of operations and were net losses of $ 0.7 million, for both of the fiscal years ended March 31, 2025 and 2024 .

Net foreign currency gains and losses are included in other expense, net on the consolidated statements of operations and were net losses of $ 1.1 million, $ 0.7 million, and $ 0.7 million for the fiscal years ended March 31, 2026 , 2025 , and 2024 , respectively.

The Company has no restrictions on the foreign exchange activities of its foreign subsidiaries, including the payment of dividends and other distributions.

30 unchanged sentences

For the fiscal year ended March 31, 2025 , 88 % of revenue was recognized at the point in time when control transferred to the customer, with the remainder being recognized over time.

In the Company's equipment and system product line, each contract with a customer summarizes each product sold to a customer, which typically represents distinct performance obligations.

For the fiscal year ended March 31, 2024 , 80 % of revenue was recognized at the point in time when control transferred to the customer, with the remainder being recognized over time.

In the Company's product sales, each contract with a customer summarizes each product sold to a customer, which typically represents distinct performance obligations.

A contract's transaction price is allocated to each distinct performance obligation using the respective standalone selling price which is determined primarily using the cost plus expected margin approach and recognized as revenue when, or as, the performance obligation is satisfied.

The majority of the Company’s product sales transfer control to the customer in line with the contracted delivery terms and revenue is recorded at the point in time when title and risk transfer to the customer, which is primarily upon delivery, as the Company has determined that this is the point in time that control transfers to the customer.

In the Company's service and technology development product line, there are several different types of transactions and each begins with a contract with a customer that summarizes each product sold to a customer, which typically represents distinct performance obligations.

The technology development transactions are primarily for activities that have no alternative use and for which a profit can be expected throughout the life of the contract.

For the fiscal year ended March 31, 2026 , 93 % of revenue was recognized related to the sales of product, with the remainder being recognized based on the performance of services.

For the fiscal year ended March 31, 2025 , 94 % of revenue was recognized related to the sales of product, with the remainder being recognized based on the performance of services.

For the fiscal year ended March 31, 2024 , 92 % of revenue was recognized related to the sales of product, with the remainder being recognized on the performance of services.

Included in the Company's performance of services, there are several different types of transactions and each begins with a contract with a customer that summarizes each product sold to a customer, which typically represents distinct performance obligations.

Included in the business segment line there are technology development transactions that are primarily for activities that have no alternative use and for which a profit can be expected throughout the life of the contract.

In these cases, the revenue is recognized over time, but in the instances where the profit cannot be assured throughout the entire contract then the revenue is recognized at a point in time.

26 unchanged sentences

Payment terms vary by contract type and type of customer and generally range from 30 to 60 days from delivery.

The following tables disaggregate the Company’s revenue by product line and by shipment destination (in thousands):

Year Ended March 31, 2025

Product Line:

Equipment and systems

Following the Comtrafo Acquisition, the Company re-assessed the disaggregated revenue disclosure and determined that segment revenue by product line is no longer a meaningful disclosure.

Driven by the change in the overall business landscape following the Comtrafo Acquisition, the Company has determined an increased breakout of segment revenue by region provides more meaningful insight to our overall financial position.

The following tables disaggregate the Company’s revenue by shipment destination (in thousands):

North America

$ 174,103 $ 169,104 $ 104,423

Services and technology development

South America

23,819 782 2,613

1 unchanged sentence

12,345 9,892 5,261

Year Ended March 31, 2024

Product Line:

Equipment and systems

$ 251,317 $ 187,170 $ 122,065

Services and technology development

North America

$ 16 $ 2 $ 102

South America

47,668 35,608 23,404

23 unchanged sentences

$ 6,150 $ 2,523 $ 57,829

Increases for balances acquired

Increases for costs incurred to fulfill performance obligations

16 unchanged sentences

Inox Wind Limited

15 % 14 % 13 %

Fuji Bridex Pte Ltd

The guidance under ASC 805 - 30, Business Combinations , provides for the recognition of goodwill on the acquisition date measured as the excess of the aggregate consideration transferred over the net of the acquisition date amounts of net assets acquired and liabilities assumed.

The Company's goodwill balance relates to the NWL acquisition in fiscal 2024, the Neeltran acquisition in fiscal 2021, the NEPSI acquisition in fiscal 2020, and Infinia Technology Corporation acquisition in fiscal 2017 and is reported in the Grid business segment.

The Company's goodwill balance relates to the Comtrafo acquisition in fiscal 2025, the NWL acquisition in fiscal 2024, the Neeltran acquisition in fiscal 2021, the NEPSI acquisition in fiscal 2020, and Infinia Technology Corporation acquisition in fiscal 2017 and is reported in the Grid business segment.

Goodwill represents the difference between the purchase price and the fair value of the identifiable tangible and intangible net assets when accounted for using the purchase method of accounting.

1 unchanged sentence

Goodwill is reviewed annually on February 28th and whenever events or changes in circumstances indicate that the carrying value of the goodwill might not be recoverable.

Goodwill increased by $ 4.7 million during the fiscal year ended March 31, 2025 , related to the NWL acquisition.

This includes a $ 0.8 million adjustment related to the true up of the deferred tax asset consisting primarily of tax basis differences identified through NWL's final pre-acquisition tax returns.

There were no changes to Goodwill during the fiscal year ended March 31, 2024 .

Goodwill increased by $ 125.3 million during the fiscal year ended March 31, 2026 , related to the Comtrafo acquisition.

Changes in the Company's goodwill are as follows (in thousands):

March 31, 2025

Balance acquired – Comtrafo

Measurement period adjustment

March 31, 2026

The Company performed its annual assessment of goodwill on February 28, 2026 and determined that there was no impairment to goodwill.

19 unchanged sentences

Contingent Consideration

Contingent consideration relates to the earnout payment set forth in the Stock Purchase Agreement governing the acquisition of Northeast Power Systems, Inc ("NEPSI") that provided that NEPSI could receive up to an additional 1,000,000 shares of common stock of the Company upon the achievement of certain specified revenue objectives over varying periods of up to four years following the NEPSI Acquisition Date which concluded in September of 2024.

The Megatran Stock Purchase Agreement provided that the selling stockholders would be made whole as set forth in the agreement.

We classified contingent consideration related to certain acquisitions within level 3 of the fair value hierarchy because the fair value is derived using significant unobservable inputs, which include revenue risk premium and revenue volatility.

Contingent consideration relates to the earnout payment set forth in the Stock Exchange Agreement governing the acquisition of Comtrafo that provides the selling stockholders may receive an additional sum of cash upon the achievement of certain specified earnings before interest, taxes, depreciation, and amortization ("EBITDA") objectives during the three years following the Comtrafo Acquisition Date.

See Note 13, "Contingent Consideration" for further discussion.

As of September 30, 2024, the Company had settled all outstanding contingent consideration.

The Company relied on a Monte Carlo method to determine the fair value of the contingent consideration on the closing of the acquisition of Comtrafo and continues to revalue the fair value of the contingent consideration using the same method at each subsequent balance sheet date until the contingencies are resolved and the cash to be paid is determined, with the change in fair value recorded in the current period operating loss.

For the period ended March 31, 2026 , the change in fair value was $ 4.2 million.

Contingent consideration is classified within Level 3 of the valuation hierarchy.

The following table provides the assets and liabilities carried at fair value on a recurring basis, measured as of March 31, 2026 and 2025 (in thousands):

8 unchanged sentences

$ 1,278 $ — $ 1,278 $ —

Current liabilities:

Contingent Consideration

$ 12,808 $ — $ — $ 12,808

Long-term liabilities:

Contingent Consideration

$ 26,721 $ — $ — $ 26,721

Total Carrying Value

7 unchanged sentences

$ 1,404 $ — $ 1,404 $ —

Derivative liabilities:

Contingent Consideration

$ 3,100 $ — $ — $ 3,100

The table below reflects the activity for the Company’s contingent consideration derivative liability measured at fair value on a recurring basis (in thousands):

NEPSI Acquisition Contingent Consideration

NWL Acquisition Contingent Consideration

Balance at March 31, 2023

Change in fair value

Settlement of contingent consideration

The table below reflects the activity for the Company’s contingent consideration liability measured at fair value on a recurring basis (in thousands):

Comtrafo Acquisition Contingent Consideration

Balance at March 31, 2025

Issuance of contingent consideration

Change in fair value

Settlement of contingent consideration

( 6,504 ) ( 3,278 )

Balance at March 31, 2026

18 unchanged sentences

$ 103,748 $ 71,169

The Company recorded inventory write-downs of $ 1.5 million and $ 2.0 million for the fiscal years ended March 31, 2025 and 2024 , respectively.

The Company recorded inventory write-downs of $ 3.5 million, $ 1.5 million, and $ 2.0 million for the fiscal years ended March 31, 2026 , 2025 , and 2024 respectively.

These write-downs were based on the Company's evaluation on its inventory on hand for excess quantities and obsolescence.

16 unchanged sentences

$ 89,775 $ 38,572

Depreciation expense was $ 3.1 million and $ 2.3 million, for the fiscal years ended March 31, 2025 and 2024 , respectively.

The increase in land relates to the property added as part of the NWL Acquisition.

Depreciation expense was $ 4.4 million, $ 3.1 million, and $ 2.3 million for the fiscal years ended March 31, 2026 , 2025 , and 2024 respectively.

The increase in land, building, and equipment and software relates to the property added as part of the Comtrafo Acquisition.

Intangible Assets

14 unchanged sentences

$ 30,698 $ ( 17,150 ) $ 13,548 $ 20,031 $ ( 14,116 ) $ 5,916

The Company recorded intangible amortization expense of $ 2.4 million and $ 2.2 million, for the fiscal years ended March 31, 2025 and 2024 , respectively.

Included in the current period is $ 0.7 million related to intangible amortization related to backlog that is reported in cost of revenues for the fiscal year ended March 31, 2025 and less than $ 0.1 million for the fiscal year ended March 31, 2024 .

The Company recorded intangible amortization expense of $ 3.0 million, $ 2.4 million, and $ 2.2 million for the fiscal years ended March 31, 2026 , 2025 , and 2024 respectively.

Included in these figures is $ 0.6 million for the fiscal year ended March 31, 2026 , $ 0.7 million for the fiscal year ended March 31, 2025 and less than $ 0.1 million for the fiscal year ended March 31, 2024 related to intangible amortization related to backlog that is reported in cost of revenues.

Expected future amortization expense related to intangible assets is as follows (in thousands):

Fiscal years ending March 31,

The Company's intangible assets relate entirely to the Grid business segment operations in the United States.

The Company's intangible assets relate entirely to the Grid business segment operations in the United States and Brazil.

The following table summarizes the Company's intangibles by geography (in thousands):

March 31, 2026

March 31, 2025

Intangible assets by geography:

$ 4,567 $ 5,916

$ 13,548 $ 5,916

Equity-Method Investments

8 unchanged sentences

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

As of March 31, 2025 the Company did not have material accounts receivable nor accounts payable balances with NWL Pacific.

As of March 31, 2026 and 2025 the Company did not have material accounts receivable nor accounts payable balances with NWL Pacific.

The tables below present the summarized financial information from the Acquisition Date through March 31, 2026 , as provided to the Company by the investee, for the unconsolidated company (in thousands):

Fiscal year ended March 31,

$ 7,293 $ 3,702

Income from operations

Balance at March 31,

Current Assets

$ 5,278 $ 5,423

Noncurrent Assets

9 unchanged sentences

Accrued other miscellaneous expenses

Accrued contract loss

Advanced deposits

40 unchanged sentences

During the fiscal year ended March 31, 2025, the Company issued 300,000 shares of common stock related to the achievement of specified revenue objectives at a fair value of $ 6.5 million.

The Company recorded a loss of $ 3.4 million for the increase in the fair value of the contingent consideration in the year ended March 31, 2025 .

The Company recorded a loss of $ 4.9 million for the increase in the fair value of the contingent consideration in the year ended March 31, 2024 .

The Company recorded no loss for the increase in the fair value of the contingent consideration in the fiscal year ended March 31, 2026 .

The Company recorded a loss of $ 3.4 million for the increase in the fair value of the contingent consideration in the fiscal year ended March 31, 2025 .

NWL Contingent Consideration

5 unchanged sentences

As of September 30, 2024, there were no remaining obligations to the selling stockholders of NWL.

(Loss) income before income taxes for the fiscal years ended March 31, 2025 , and 2024 are provided in the table as follows (in thousands):

Comtrafo Contingent Consideration

On December 5, 2025, the Company entered into the Stock Exchange Agreement with the selling stockholders named therein.

Pursuant to the terms of the Stock Exchange Agreement, the Company has agreed to pay the selling stockholders of the Comtrafo Acquisition an additional amount in cash upon the achievement of specified EBITDA objectives during the three years following the Comtrafo Acquisition Date.

The Company evaluated the Comtrafo Acquisition earnout payment set forth in the Comtrafo Stock Exchange Agreement (See Note 2, "Acquisitions" for further details), which will require settlement in cash, and determined the contingent consideration qualified for liability classification.

As a result, for each period, the fair value of the contingent consideration will be remeasured, and the resulting gain or loss will be recognized until the cash amount is fixed.

Following is a summary of the key assumptions used in a Monte Carlo simulation to calculate the fair value of contingent consideration related to the Comtrafo Acquisition:

Fiscal Year 2025

EBITDA Risk Premium (continuous)

1.40 % 2.10 % 2.10 %

EBITDA Volatility

25.0 % 25.0 % 25.0 %

Credit Spread (semiannual)

1.9 % 1.9 % 1.9 %

EBITDA discount rate

14.7 % 15.0 % 15.0 %

Payment delay (days)

Fair value (millions)

$ 39.5 $ 34.8 $ 34.8

The Company performed an analysis on the change in fair value through March 31, 2026 and recorded a loss from the change in fair value of the contingent consideration for the fiscal year ended March 31, 2026 of $ 4.2 million.

Income (loss) before income taxes for the fiscal years ended March 31, 2026 , 2025 and 2024 are provided in the table as follows (in thousands):

Fiscal years ended March 31,

Income/(Loss) before income tax expense:

Income (loss) from continuing operations before income tax expense (benefit)

$ 18,641 $ 1,882 $ ( 11,503 )

( 1,893 ) 484 701

$ 16,748 $ 2,366 $ ( 10,802 )

The components of income tax expense (benefit) consist of the following (in thousands):

Fiscal years ended March 31,

Current provision

$ 36 $ 305 $ 150

Total current

1,622 637 244

Deferred provision (benefit)

( 116,947 ) ( 4,259 ) 56

( 1,418 ) ( 13 ) —

( 318 ) ( 32 ) 9

Total deferred

( 118,683 ) ( 4,304 ) 65

Income tax expense (benefit)

$ ( 117,061 ) $ ( 3,667 ) $ 309

The reconciliation between the statutory federal income tax rate and the Company’s effective income tax rate is shown below.

As further described in Note 3, Summary of Significant Accounting Policies, the Company has elected to prospectively adopt the guidance in ASU 2023 - 09.

The following table is a reconciliation of the Company's effective income tax rate to the statutory income tax rate for the fiscal year ended March 31, 2026 in accordance with the guidance in ASU 2023 - 09:

Fiscal year ended March 31,

Federal Statutory Income Tax (benefit) at 21%

Domestic Federal

Non Taxable or Non Deductible Items

Stock Compensation

Excess Officer Compensation

Transaction Costs

Changes in Valuation Allowance

Global intangible low-tax income

Other reconciling items

Domestic State and local income taxes, net of federal effect

Foreign Tax effects

Fair value adjustment for Contingent Liability

Statutory income tax rate differential

Other foreign jurisdictions

Worldwide Changes in unrecognized tax benefits

Effective income tax rate

The following table is a reconciliation of the Company's effective income tax rate to the statutory federal income tax for the fiscal years ended March 31, 2025 and 2024 in accordance with the guidance prior to the adoption of ASU 2023 - 09:

Fiscal years ended March 31,

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Nondeductible expenses

True-up of NOLs

Withholding Tax

Valuation allowance

231 % ( 60 %)

NOL and capital loss expiration

Withholding Taxes

Effective income tax rate

The following is a summary of the principal components of the Company’s deferred tax assets and liabilities (in thousands):

For the fiscal year ended March 31, 2026 , the Company paid income taxes, net of refunds received as follows:

Fiscal years ended March 31,

Income taxes paid, net of refunds:

State and Local

Other foreign

The following is a summary of the principal components of the Company’s deferred tax assets and liabilities at March 31, 2026 and 2025 (in thousands):

March 31, 2026

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Total deferred tax assets

132,201 8,426

Deferred tax liabilities:

Amortization of fixed assets and intangibles

( 11,191 ) ( 7,127 )

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$ 119,474 $ ( 417 )

Under the Tax Cuts and Jobs Act of 2017, taxpayers are required to capitalize and amortize expenses related for research and experimental as classified under Section 174 beginning in 2022.

Amortization recovery for such costs are five years for domestic expenditures and fifteen for foreign expenditures.

As of March 31, 2025 , the Company had approximately $ 31.9 million of research and experimental expenses that had been capitalized under Section 174 with a remaining basis of $ 24.4 million.

The Company has provided a full valuation allowance against its net deferred income tax assets in the U.S., Romania and Poland since it is more likely than not that its deferred tax assets will not be realizable.

After consideration of all the available evidence, both positive and negative, the Company has determined tha t a $ 171.7 million valuation allowance at March 31, 2025 is necessary to reduce the deferred tax assets to the amount that will more likely than not be realized which is a $ 5.4 million decrease from the $ 177.1 million valuation allowance as of March 31, 2024 .

The above deferred tax balances are recorded on the consolidated balance sheet as follows:

March 31, 2026

Deferred tax assets

Deferred tax liabilities

Net deferred tax assets (liabilities)

On a quarterly basis, the Company reassesses the valuation allowance on deferred income tax assets, weighing positive and negative evidence to assess the recoverability of the deferred tax assets.

During the fiscal year ended March 31, 2026 , the Company recorded a net $ 118.4 million non-cash income tax benefit related to the release of a substantial portion of its valuation allowance against U.S.

deferred tax assets.

This was based on the Company's evaluation of the positive evidence, including cumulative income position over the previous three -years, revenue growth, current profitability, expectations regarding future forecasted income, and negative evidence, including uncertainty in economic and political environments from industry competition and dependence on government contracts.

This release of the valuation allowance resulted in the recognition of a deferred tax asset and a corresponding increase to income tax benefit in the current period, the effect of which is an increase in reported net income.

After consideration of all the available evidence, both positive and negative, the Company has determined that a $ 45.0 million valuation allowance at March 31, 2026 is necessary to reduce the U.S.

deferred tax assets to the deferred tax assets to the amount that will more likely than not be realized which is a $ 126.7 million decrease from the $ 171.7 million valuation allowance as of March 31, 2025 .

As of March 31, 2026 , the Company provides a valuation allowance against certain deferred tax assets in the U.S.

At March 31, 2026 , the Company had aggregate net operating loss carryforwards in the U.S.

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federal tax purpose, approximately $ 73.0 million of federal net operating losses have an indefinite carryforward period.

Included in the U.S.

net operating loss are $ 3.5 million of acquired losses from Power Quality Systems, Inc.

and $ 0.3 million of acquired losses from Infinia Technology Corporation.

Research and development and other tax credit carryforwards amounting to approximately $ 10.6 million and $ 2.0 million are availab le to offset federal and state income taxes, respectively, and will expire in the years ending through 2042.

As of March 31, 2025 , AMSC Romania has aggregate net operating loss carryforwards of approximately $ 0.4 million, which will begin to expire at March 31, 2028 and NWL Poland has aggregate net operating loss carryforwards of approximately $ 0.4 million, which will begin to expire at March 31, 2030.

As of March 31, 2026 , AMSC Brazil has aggregate net operating loss carryforwards of approximately $ 7.9 million, which have an indefinite carryforward period.

As of March 31, 2026 , AMSC Poland has aggregate net operating loss carryforwards of approximately $ 0.4 million, which will begin to expire March 31, 2030.

Under the Tax Cuts and Jobs Act of 2017, taxpayers are required to capitalize and amortize expenses related for research and experimental as classified under Section 174 beginning in 2022.

Amortization recovery for such costs are five years for domestic expenditures and fifteen for foreign expenditures.

As of March 31, 2026 , the Company had approximately $ 35.6 million of research and experimental expenses that had been capitalized under Section 174 with a remaining basis of $ 21.2 million for U.S.

Federal purposes.

On July 4, 2025, the reconciliation bill, commonly referred to as the One Big Beautiful Bill ("OBBB") was signed into law, which includes a broad range of tax reform provisions that may affect a company's financial results.

The OBBB allows an elective deduction for domestic research and development (R&D), a reinstatement of elective 100% first -year bonus depreciation, and a more favorable tax rate on Foreign derived deduction eligible income and income from non-U.S.

subsidiaries (Net CFC Tested Income), among other provisions.

The Company has performed an evaluation of the impact of the OBBB on the Company's effective tax rate and deferred tax assets in fiscal year 2025 and future periods.

Based on this evaluation, the tax reform provisions do not have a material impact on the Company's consolidated financial statements and related disclosures for the fiscal year ended March 31, 2026 .

We will continue to assess the implications of the OBBB, and our tax provision may be further impacted as additional guidance from the U.S department of the Treasury is released.

382 of the U.S.

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1986, as amended (the “IRC”), provides limits on the extent to which a corporation that has undergone an ownership change (as defined) can utilize any net operating loss ("NOL") and general business tax credit carryforwards it

The Company updated its study in fiscal

2024 to determine whether Section

The Company updated its ownership change study through

March 31, 2026 to determine whether Section

382 could limit the use of its carryforwards in this manner.

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The total amount of undistributed foreign earnings available to be repatriated at March 31, 2026 was $ 5.5 million resulting in the recording of a $ 0.4 million deferred tax liability for foreign withholding taxes.

The Company has not recorded a deferred tax asset for the temporary difference associated with the excess of the tax greater than the book basis in its Romanian and Poland subsidiaries as the future tax benefit is not expected to reverse in the foreseeable future.

Accounting for income taxes requires a two -step approach to recognizing and measuring uncertain tax positions.

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federal jurisdiction and various state and foreign jurisdictions.

Major tax jurisdictions include the U.S.

Major tax jurisdictions include the U.S., Austria, and Brazil.

income tax filings for fiscal years ended March 31, 1996 through 2026 remain open and subject to examination.

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Tax filings in Poland for tax years 2022 through March 31, 2026 remain open and subject to examination.

As part of the acquisition of Neeltran, the Company identified four equipment financing agreements that Neeltran had entered into prior to the acquisition of Neeltran on May 6, 2021.

The Company did not have a current or long-term debt balance as of March 31, 2025 , and had a current debt balance of less than $ 0.1 million and no long-term debt balance as of March 31, 2024 .

Tax filings in Brazil for the tax years 2020 through March 31, 2026 remain open and subject to examination.

As part of the Comtrafo Acquisition, the Company identified three debt agreements that Comtrafo had entered into prior to the Comtrafo Acquisition Date.

The debt agreements totaling $ 8.8 million were subsequently paid off during the fiscal year ended March 31, 2026 .

Operating Leases

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14.13 % 14.94 %

The costs related to the Company's finance lease are not material.

The costs related to the Company's operating leases for the fiscal years ended March 31, 2025 and 2024 , are as follows (in thousands):

The Company did not incur any finance lease costs and the costs related to the Company's operating leases for the fiscal years ended March 31, 2026 and 2025 , are as follows (in thousands):

Fiscal year ended

March 31, 2026

March 31, 2025

March 31, 2024

Operating Leases:

Operating lease costs - fixed

$ 1,453 $ 1,023

Operating lease costs - variable

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Total lease costs

$ 1,725 $ 1,330

The Company’s estimated minimum future lease obligations under the Company's leases are as follows:

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the Amended and Restated 2007 Director Stock Plan, as amended (the “2007 Director Plan”) and the 2022 Stock Incentive Plan, as amended and restated (the "2022 Plan").

On August 2, 2024, the Company's stockholders approved the amendments to the 2022 Plan and amendments to the Company's 2007 Director Plan.

On August 2, 2024, the Company's stockholders approved amendments to the 2022 Plan and amendments to the Company's 2007 Director Plan.

The amendment to the 2022 Plan increased the total number of shares of common stock authorized for issuance under the 2022 Plan from 1,150,000 shares to 4,400,000 shares of common stock.

The amendment to the 2007 Director Plan increased the total number of shares of common stock authorized for issuance under the 2007 Director Plan from 430,000 shares to 580,000 shares.

The 2022 Plan provides for the grant of incentive stock options intended to qualify under Section 422 of the IRC of 1986, as amended, nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards.

The 2022 Plan provides for the grant of incentive stock options intended to qualify under Section 422 of the IRC of 1986 nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards.

In the case of options, the exercise price is no less than the fair market value of the common stock, as determined by (or in a manner approved by) the Board of Directors, on the date of grant.

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Stock-Based Compensation

The components of stock-based compensation for the years ended March 31, 2025 and 2024 were as follows (in thousands):

The components of stock-based compensation for the fiscal years ended March 31, 2026 , 2025 and 2024 were as follows (in thousands):

Fiscal years ended March 31,

Stock options

$ 17 $ 8 $ 40

Restricted stock and stock awards

15,794 7,732 4,563

Employee stock purchase plan

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Cost of revenues

$ 1,138 $ 536 $ 293

Research and development

2,192 1,132 627

Selling, general and administrative

12,539 6,126 3,732

$ 15,869 $ 7,794 $ 4,652

The following table summarizes the information concerning currently outstanding and exercisable employee and non-employee options:

Weighted-Average Exercise Price

Options / Shares Weighted-Average Exercise Price

Weighted-Average Remaining Contractual Term

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28,560 $ 8.46 5.8 $ 725

The Company did not grant any stock options under the 2007 Director Plan nor the 2022 Plan during both fiscal years ended March 31, 2025 and 2024 .

The Company issued 887,000 and 872,500 shares of restricted stock during the fiscal years ended March 31, 2026 and 2025 , respectively.

The Company issued 39,445 and 19,200 shares of immediately vested common stock during the fiscal years ended March 31, 2026 and 2025 , respectively.

These restricted stock awards generally vest over 2 - 3 years.

Awards of restricted stock include both time-based and performance-based awards.

For time-based restricted stock awards, expense is being recorded over the vesting period.

Performance-based restricted stock awards are expensed over the requisite service period based on probability of achievement.

The Company granted 2,112 stock options during the fiscal year ended March 31, 2026 and no stock options during the fiscal year ended March 31, 2025 .

The stock options granted during the fiscal year ended March 31, 2026 will vest over 2 years.

The estimated fair value of the Company's stock-based awards, less expected annual forfeitures, is amortized over the awards' service period.

There were less than $ 0.1 million of unrecognized compensation costs for unvested stock options as of March 31, 2026 .

This expense will be recognized over a period of approximately 1.2 years.

The weighted average assumptions used in the Black Scholes valuation model for stock options granted during the fiscal year ended March 31, 2026 are as follows:

Fiscal Year Ended March 31,

Expected volatility

Risk-free interest rate

Expected life (years)

Dividend yield

The following table summarizes the restricted stock activity for the year ended March 31, 2026 :

5 unchanged sentences

( 821,707 ) 10.79

( 3,000 ) 5.94

Outstanding at March 31, 2026

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Employee Stock Purchase Plan

The Company maintains the 2000 Employee Stock Purchase Plan, as amended (the "ESPP") which provides employees with the opportunity to purchase shares of common stock at a price equal to the market value of the common stock at the end of the offering period, less a 15 % purchase discount.

The Company maintains the 2000 Employee Stock Purchase Plan, as amended (the "ESPP") which provides employees with the opportunity to purchase shares of common stock at a price equal to the fair market value of the common stock at the end of the offering period, less a 15 % purchase discount.

As of March 31, 2026 , the ESPP had 39,977 shares available for future issuance.

The Company recognized less than $ 0.1 million of compensation expense for both the fiscal years ended March 31, 2025 and 2024 , related to the ESPP.

The Company recognized $ 0.1 million of compensation expense for each of the fiscal years ended March 31, 2026 , 2025 , and 2024 related to the ESPP.

Commitments and Contingencies

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Lease Commitments

During the years ended March 31, 2025 and 2024 , all lease costs were recorded in selling, general and administrative expense.

During the fiscal years ended March 31, 2026 , 2025 , and 2024 all lease costs were recorded in selling, general and administrative expense.

See Note 16, "Leases" for further details.

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In addition, the Company has various contractual arrangements in which minimum quantities of goods or services have been committed to be purchased on an annual basis.

AMSC Brazil, through Comtrafo, purchased additional real estate within the twelve months following the Comtrafo Acquisition Date for 37.2 million Brazilian Real in cash upon successful re-zoning classification of such real estate.

As of March 31, 2026 , the Company had $ 3.3 million of restricted cash included in long-term assets and $ 3.5 million of restricted cash included in current assets.

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The Company has a stock match program under which the Company matched, in the form of Company common stock, 100 % up to 5 % of eligible contributions.

The Company recorded expenses of $ 1.2 million and $ 0.6 million in the fiscal years ended March 31, 2025 and 2024 , respectively, and recorded corresponding charges to additional paid-in capital related to this program.

The Company recorded expenses of $ 1.9 million, $ 1.2 million and $ 0.6 million in the fiscal years ended March 31, 2026 , 2025 , and 2024 respectively, and recorded corresponding charges to additional paid-in capital related to this program.

Business Segments

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The chief operating decision maker also uses segment operating income or loss to assess the performance for each segment by comparing the results and return on assets of each segment with one another and in the compensation of certain employees.

The following tables (i) summarize total sales by segment and (ii) reconcile each segment's sales to their respective segment operating income, including segment operating expenses, for each of the years ended March 31, 2025 and 2024 (in thousands):

The following tables (i) summarize total sales by segment and (ii) reconcile each segment's sales to their respective segment operating income, including segment operating expenses, for each of the fiscal years ended March 31, 2026 , 2025 , and 2024 (in thousands):

Fiscal Year Ended March 31, 2026

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(b) Segment other operating expense includes cost of sales, research and development expense, selling general, and administrative expense, amortization of acquisition related intangibles, and gain/loss on contingent consideration.

Unallocated corporate expenses consist of a loss on contingent consideration of $ 6.7 million in the fiscal year ended March 31, 2025, and a loss on contingent consideration of $ 4.9 million in the fiscal year ended March 31, 2024.

The reconciliation of segment operating loss to consolidated income (loss) before income taxes for the years ended March 31, 2025 and 2024 is as follows (in thousands):

Fiscal Year Ended March 31, 2024

Segment operating income:

$ 122,065 $ 23,574 $ — $ 145,639

Segment other operating expenses (b)

128,974 23,125 4,908 157,007

Segment operating income (loss)

$ ( 6,909 ) $ 449 $ ( 4,908 ) $ ( 11,368 )

(a) The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker.

Unallocated corporate expenses consist of a loss on contingent consideration of $ 4.2 million, $ 6.7 million and $ 4.9 million in the fiscal years ended March 31, 2026 , 2025 and 2024 , respectively.

The reconciliation of segment operating income (loss) to consolidated income (loss) before income taxes for the fiscal years ended March 31, 2026 , 2025 , and 2024 is as follows (in thousands):

Fiscal Years Ended March 31,

Operating loss:

Operating income (loss):

$ 11,445 $ ( 1,077 ) $ ( 11,368 )

Interest income, net

6,356 3,708 1,302

Other expense

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$ 36,521 $ 37,426

South America

$ 89,775 $ 38,572

Recent Accounting Pronouncements

In November 2023, the FASB issued ASU 2023 - 07, Segment Reporting (Topic 280 ):

Improvements to Reportable Segment Disclosures .

The amendments in ASU 2023 - 07 improve the disclosures about a public entity’s reportable segments and address requests from investors for additional, more detailed information about a reportable segment’s expenses.

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

As of March 31, 2025 , the Company has adopted ASU 2023 - 07 and made the required disclosures, and noted no other material impact on its 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.

The Company is evaluating the impact on its consolidated financial statements.

As of March 31, 2025, the Company has adopted ASU 2023 - 09 and made the required disclosures, and noted no other material impact on its 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.

The Company is evaluating any material impact on its consolidated financial statements.

As of March 31, 2026, the Company has adopted ASU 2024 - 02 and noted no other material impact on its consolidated financial statements.

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

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The Company is evaluating the impact on its consolidated financial statements.

In July 2025, the FASB issued ASU 2025 - 05, Financial Instruments —Credit Losses .

The amendments in ASU 2025 - 05 contain updates to how entities are permitted to estimate expected credit losses for accounts receivable and contract assets.

Following the release of ASU 2025 - 05 in July 2024, the effective date will be annual reporting periods beginning after December 15, 2025.

As of April 1, 2025, the Company early adopted ASU 2025 - 05 and noted no material impact on its consolidated financial statements.

In November 2025, the FASB issued ASU 2025 - 08, Financial Instruments — Credit Losses:

Purchased Loans.

The amendments in ASU 2025 - 08 requires that loans acquired without credit deterioration and deemed “seasoned” will be considered purchased seasoned loans and accounted for using the gross-up approach at acquisition.

Following the release of ASU 2025 - 08 in November 2025, the effective date will be annual reporting periods beginning after December 15, 2026.

As of April 1, 2025, the Company early adopted ASU2025 - 08 and noted no material impact on its consolidated financial statements.

Subsequent Events

The Company has performed an evaluation of subsequent events through the time of filing this Annual Report on Form 10 -K with the SEC, and has determined that there are no such events to report.

The Company has performed an evaluation of subsequent events through the time of filing this Annual Report on Form 10 -K with the SEC, On May 15, 2026, pursuant to the terms of the Stock Exchange Agreement, Comtrafo purchased a certain real estate asset from the selling stockholders that Comtrafo was leasing and using for administrative and manufacturing operations for 37.2 million Brazilian Real in cash.

Other than the above, management has determined that there are no such events to report.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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-K

Item 8. Financial Statements and Supplementary Data