Capstone Energy Plus, Inc. 10-K

Item 9A. Controls and Procedures. Disclosure Controls and Procedures We maintain disclosure controls and procedures that are designed to ensure that the information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In connection with the preparation of this Form 10-K for the fiscal year ended March 31, 2021, an evaluation was performed under the supervision and with the participation of our management, including the CEO and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based on this evaluation, our CEO and CFO have concluded that our disclosure controls and procedures were effective as of March 31, 2021 and provided reasonable assurance that the information required to be disclosed by us in reports we submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms prescribed by the SEC and that such information is accumulated and communicated to management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure. Management’s Annual Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over our financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) under the Exchange Act as a process designed by, or under the supervision of, our CEO and CFO and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that: ● Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; ● Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and ● Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. 55 Table of Contents We conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on this evaluation, management concluded that we maintained effective internal control over financial reporting as of March 31, 2021. Changes in Internal Control Over Financial Reporting There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information. None. PART III Item 10. Directors, Executive Officers and Corporate Governance. Directors The information required by this Item will be included in the Company’s 2021 Proxy Statement to be filed with the SEC in connection with the solicitation of proxies for the Company’s 2021 Annual Meeting of Shareholders (“2021 Proxy Statement”) and is incorporated herein by reference. Such Proxy Statement will be filed with the SEC within 120 days after the end Fiscal 2021. Delinquent Section 16(a) Reports The information required regarding our directors’ and executive officers’ compliance with Section 16(a) of the Exchange Act will be included in the Company’s 2021 Proxy Statement under the heading “Delinquent Section 16(a) Reports” and is incorporated herein by reference. Item 11. Executive Compensation. The information required by this Item will be included in the Company’s 2021 Proxy Statement and is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The information required by this Item will be included in the Company’s 2021 Proxy Statement and is incorporated herein by reference . Item 13. Certain Relationships and Related Transactions, and Director Independence. The information required by this Item will be included in the Company’s 2021 Proxy Statement and is incorporated herein by reference . Item 14. Principal Accounting Firm Fees and Services. The information required by this Item will be included in the Company’s 2021 Proxy Statement and is incorporated herein by reference . ​ 56 Table of Contents ​ PART IV Item 15. Exhibits and Financial Statement Schedules. (a) 1. and 2. Financial statements and financial statement schedule The financial statements and notes are listed in the Index to Consolidated Financial Statements on page F-1 of this Report. Financial statement schedules not included in this Form 10-K have been omitted because they are not applicable or the required information is shown in the financial statements or notes thereto. 3. Exhibits The exhibits filed as part of this Form 10-K are set forth on the Exhibit Index immediately preceding the signatures of this Form 10-K. The Exhibit Index is incorporated herein by reference. Item 16. Form 10-K Summary. Not applicable. ​ ​ ​ 57 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES INDEX TO CONSOLIDATED FINANCIAL STATEMENTS ​ Page Report of Independent Registered Public Accounting Firm ​ F-2 Consolidated Financial Statements: ​ ​ Consolidated Balance Sheets as of March 31, 2021 and 2020 ​ F-4 For the years ended March 31, 2021 and 2020: ​ ​ Consolidated Statements of Operations ​ F-5 Consolidated Statements of Stockholders’ Equity ​ F-6 Consolidated Statements of Cash Flows ​ F-7 Notes to Consolidated Financial Statements ​ F-8 ​ Financial statement schedules not included in this Form 10-K have been omitted because they are not applicable or the required information is shown in the financial statements or notes thereto. ​ F-1 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and Board of Directors of Capstone Green Energy Corporation ​ Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Capstone Green Energy Corporation (the “Company”) as of March 31, 2021 and 2020, the related consolidated statements of operations, stockholders’ equity and cash flows for each of the two years in the period ended March 31, 2021 and 2020, and the related notes (collectively referred to as 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, 2021 and 2020, and the results of its operations and its cash flows for each of the two years in the period ended March 31, 2021, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit [s] to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provides a reasonable basis for our opinion. Critical Audit Matters ​ The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. ​ Accounts Receivable Allowances ​ Description of Matter ​ As described in Note 2 to the consolidated financial statements, management maintains allowances for estimated losses resulting from the inability of customers to make required payments and other accounts receivable allowances. F-2 Table of Contents The principal considerations for our determination that performing procedures relating to the accounts receivable allowances is a critical audit matter are (i) the significant judgement by management when determining the estimate for the accounts receivable allowances; and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures to evaluate management’s estimate and significant assumptions related to the customers continued ability to make required payments. ​ How We Addressed the Matter ​ Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others, testing management’s process for determining the accounts receivable allowances. Procedures related to management’s estimate included evaluating the appropriateness of the method used by management, the completeness, accuracy, and relevance of underlying data used in the estimate, and the reasonableness of significant assumptions used by management in estimating the customers continued ability to make required payments. Evaluating management’s assumptions relating to customers’ credit worthiness, historical payment experience with the customer, and the customers’ new business opportunities. ​ Extended Warranty – Powerhead Failure ​ Description of Matter ​ As described in Note 6 to the consolidated financial statements, management accrued an extended warranty to account for the replacement of high risk failure parts in fielded systems due to a supplier defect. Management’s estimate of this extended warranty liability is generally affected by historical failure rates within a certain population of components, repair costs, and the point of failure within the product life cycle. ​ The principal considerations for our determination that performing procedures relating to the extended warranty liability is a critical audit matter are (i) the significant judgement by management when determining the estimate for the extended warranty liability; and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures to evaluate management’s estimate and significant assumptions related to historical failure rates, repair costs, and the point of failure within the product life cycle. ​ How We Addressed the Matter ​ Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others, testing management’s process for determining the extended warranty liability. Procedures related to management’s estimate included evaluating the appropriateness of the method used by management, the completeness, accuracy, and relevance of underlying data used in the warranty estimate, and the reasonableness of significant assumptions used by management in estimating the extended warranty liability related to the component failure rates, repair costs, and the point of failure within the product life cycle. Evaluating management’s assumptions relating to the component failure rates, repair costs, and the point of failure within the product life cycle involved evaluating whether the assumptions were reasonable considering historical product experience of the Company. ​ /s/ Marcum LLP ​ Marcum LLP ​ We have served as the Company’s auditor since 2017. ​ ​ Costa Mesa, California June 11, 2021 ​ F-3 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share amounts) ​ ​ ​ ​ ​ ​ ​ ​ March 31, March 31, ​ 2021 2020 Assets ​ ​ ​ ​ ​ ​ Current Assets: ​ ​ ​ ​ ​ ​ Cash and cash equivalents $ 49,533 ​ $ 15,068 ​ Accounts receivable, net of allowances of $314 at March 31, 2021 and $703 at March 31, 2020 20,593 ​ 16,240 ​ Inventories, net 11,829 ​ 21,460 ​ Prepaid expenses and other current assets 4,953 ​ 3,987 ​ Total current assets 86,908 ​ 56,755 ​ Property, plant, equipment and rental assets, net 9,630 ​ 7,749 ​ Non-current portion of inventories 1,845 ​ 1,221 ​ Other assets 7,639 ​ 8,230 ​ Total assets $ 106,022 ​ $ 73,955 ​ Liabilities and Stockholders’ Equity ​ ​ ​ ​ ​ ​ Current Liabilities: ​ ​ ​ ​ ​ ​ Accounts payable and accrued expenses $ 19,767 ​ $ 15,000 ​ Accrued salaries and wages 1,889 ​ 1,644 ​ Accrued warranty reserve 5,850 ​ 1,934 ​ Deferred revenue 6,374 ​ 7,898 ​ Current portion of notes payable and lease obligations 576 ​ 477 ​ Total current liabilities 34,456 ​ 26,953 ​ Deferred revenue - non-current ​ 765 ​ ​ 944 ​ Term note payable, net ​ 52,865 ​ ​ 27,963 ​ Long-term portion of notes payable and lease obligations 4,762 ​ 5,074 ​ Total liabilities 92,848 ​ 60,934 ​ Commitments and contingencies (Note 12) ​ ​ ​ ​ ​ ​ Stockholders’ Equity: ​ ​ ​ ​ ​ ​ Preferred stock, $.001 par value; 1,000,000 shares authorized; none issued ​ — ​ ​ — ​ Common stock, $.001 par value; 51,500,000 shares authorized, 12,898,144 shares issued and 12,824,190 shares outstanding at March 31, 2021; 10,286,366 shares issued and 10,228,789 shares outstanding at March 31, 2020 13 ​ 10 ​ Additional paid-in capital 934,381 ​ 915,755 ​ Accumulated deficit (919,271) ​ (900,869) ​ Treasury stock, at cost; 73,954 shares at March 31, 2021 and 57,577 shares at March 31, 2020 (1,949) ​ (1,875) ​ Total stockholders’ equity 13,174 ​ 13,021 ​ Total liabilities and stockholders' equity $ 106,022 ​ $ 73,955 ​ ​ See accompanying notes to consolidated financial statements. ​ F-4 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ March 31, ​ 2021 2020 Revenue: ​ ​ ​ ​ ​ ​ ​ Product and accessories ​ $ 36,517 $ 35,338 ​ Parts and service ​ ​ 31,119 ​ ​ 33,588 ​ Total revenue ​ ​ 67,636 ​ ​ 68,926 ​ Cost of goods sold: ​ ​ ​ ​ ​ ​ ​ Product and accessories ​ ​ 42,025 ​ ​ 42,273 ​ Parts and service ​ ​ 18,756 ​ ​ 17,622 ​ Total cost of goods sold ​ 60,781 ​ 59,895 ​ Gross margin ​ 6,855 ​ 9,031 ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ Research and development ​ 2,417 ​ 3,649 ​ Selling, general and administrative ​ 18,391 ​ 22,211 ​ Total operating expenses ​ 20,808 ​ 25,860 ​ Loss from operations ​ (13,953) ​ (16,829) ​ Other income ​ 4,993 ​ 133 ​ Interest income ​ 30 ​ 8 ​ Interest expense ​ (5,156) ​ (5,198) ​ Loss on debt extinguishment ​ ​ (4,282) ​ ​ — ​ Loss before provision for income taxes ​ (18,368) ​ (21,886) ​ Provision for income taxes ​ 19 ​ 12 ​ Net loss ​ ​ (18,387) ​ ​ (21,898) ​ Less: Deemed dividend on purchase warrant for common shares ​ ​ 15 ​ ​ 87 ​ Net loss attributable to common stockholders ​ $ (18,402) ​ $ (21,985) ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per common share attributable to common stockholders—basic and diluted ​ $ (1.63) ​ $ (2.70) ​ Weighted average shares used to calculate basic and diluted net loss per common share attributable to common stockholders ​ 11,280 ​ 8,150 ​ ​ ​ See accompanying notes to consolidated financial statements. ​ F-5 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In thousands, except share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ Common Stock ​ Paid-in ​ Accumulated ​ Treasury Stock ​ Stockholders’ ​ Shares Amount Capital Deficit Shares Amount Equity Balance, March 31, 2019 ​ 7,216,910 ​ $ 7 ​ $ 903,803 ​ $ (878,884) 26,239 ​ $ (1,772) ​ $ 23,154 Purchase of treasury stock ​ — ​ ​ — ​ — ​ — 31,338 ​ (103) ​ (103) Vested restricted stock awards ​ 73,983 ​ ​ — ​ 102 ​ — — ​ — ​ 102 Stock-based compensation ​ — ​ ​ — ​ 913 ​ — — ​ — ​ 913 Exercise of employee stock purchases ​ 522 ​ ​ — ​ 3 ​ — — ​ — ​ 3 Stock awards to Board of Directors ​ 26,315 ​ ​ — ​ (24) ​ — — ​ — ​ (24) Issuance of common stock, net of issuance costs ​ 2,528,636 ​ ​ 2 ​ ​ 10,580 ​ ​ — ​ — ​ ​ — ​ ​ 10,582 Warrants exercised ​ 440,000 ​ ​ 1 ​ ​ — ​ ​ — ​ — ​ ​ — ​ ​ 1 Change in warrants valuation ​ — ​ ​ — ​ ​ 291 ​ ​ — ​ — ​ ​ — ​ ​ 291 Deemed dividend on purchase warrant for common shares ​ — ​ ​ — ​ ​ 87 ​ ​ (87) ​ — ​ ​ — ​ ​ — Net loss ​ — ​ ​ — ​ — ​ (21,898) — ​ — ​ (21,898) Balance, March 31, 2020 ​ 10,286,366 ​ ​ 10 ​ ​ 915,755 ​ ​ (900,869) 57,577 ​ ​ (1,875) ​ ​ 13,021 Purchase of treasury stock ​ — ​ — ​ — ​ — 16,377 ​ (74) ​ (74) Vested restricted stock awards ​ 71,767 ​ — ​ 74 ​ — — ​ — ​ 74 Stock-based compensation ​ — ​ — ​ 937 ​ — — ​ — ​ 937 Stock awards to Board of Directors ​ 57,098 ​ — ​ (38) ​ — — ​ — ​ (38) Issuance of common stock, net of issuance costs ​ 2,130,634 ​ ​ 3 ​ ​ 16,778 ​ ​ — ​ — ​ ​ — ​ ​ 16,781 Warrants issued ​ — ​ ​ — ​ ​ 761 ​ ​ — ​ — ​ ​ — ​ ​ 761 Warrants exercised ​ 352,279 ​ ​ — ​ ​ — ​ ​ — ​ — ​ ​ — ​ ​ — Change in warrants valuation ​ — ​ ​ — ​ ​ 99 ​ ​ — ​ — ​ ​ — ​ ​ 99 Deemed dividend on purchase warrant for common shares ​ — ​ ​ — ​ ​ 15 ​ ​ (15) ​ — ​ ​ — ​ ​ — Net loss ​ — ​ — ​ — ​ (18,387) — ​ — ​ (18,387) Balance, March 31, 2021 ​ 12,898,144 ​ $ 13 ​ $ 934,381 ​ $ (919,271) 73,954 ​ $ (1,949) ​ $ 13,174 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ See accompanying notes to consolidated financial statements. ​ F-6 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ 2021 2020 Cash Flows from Operating Activities: ​ ​ ​ ​ ​ ​ ​ Net loss ​ $ (18,387) ​ $ (21,898) ​ Adjustments to reconcile net loss to net cash provided by (used in) operating activities: ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ 1,452 ​ ​ 1,616 ​ Amortization of financing costs and discounts ​ 623 ​ ​ 1,155 ​ Amortization of right-of-use assets ​ ​ 378 ​ ​ 870 ​ Loss on debt extinguishment ​ ​ 4,282 ​ ​ — ​ Provision for (reduction in) accounts receivable allowances ​ (228) ​ ​ 431 ​ Inventory provision ​ 305 ​ ​ 564 ​ Provision for warranty expenses ​ 5,930 ​ ​ 594 ​ (Gain) loss on disposal of equipment ​ (1) ​ ​ 17 ​ Stock-based compensation ​ 937 ​ ​ 913 ​ Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ ​ Accounts receivable ​ (4,125) ​ ​ (449) ​ Inventories ​ 8,702 ​ ​ (1,499) ​ Prepaid expenses, other current assets and other assets ​ 653 ​ ​ 1,215 ​ Accounts payable and accrued expenses ​ 4,652 ​ ​ (2,567) ​ Accrued salaries and wages and long term liabilities ​ 245 ​ ​ 8 ​ Accrued warranty reserve ​ (2,014) ​ ​ (1,274) ​ Deferred revenue ​ (1,703) ​ ​ 606 ​ Net cash provided by (used in) operating activities ​ 1,701 ​ (19,698) ​ Cash Flows from Investing Activities: ​ ​ ​ ​ ​ ​ ​ Expenditures for property, plant, equipment and rental assets ​ (3,209) ​ ​ (4,207) ​ Net cash used in investing activities ​ (3,209) ​ (4,207) ​ Cash Flows from Financing Activities: ​ ​ ​ ​ ​ ​ ​ Net proceeds from term note payable ​ ​ 20,833 ​ ​ — ​ Repayment of notes payable and lease obligations ​ (691) ​ ​ (613) ​ Cash used in employee stock-based transactions ​ (74) ​ ​ (100) ​ Net proceeds from issuance of common stock and warrants ​ 15,905 ​ ​ 9,959 ​ Net cash provided by financing activities ​ 35,973 ​ 9,246 ​ Net increase (decrease) in Cash and Cash Equivalents ​ 34,465 ​ (14,659) ​ Cash and Cash Equivalents, Beginning of Year ​ 15,068 ​ 29,727 ​ Cash and Cash Equivalents, End of Year ​ $ 49,533 ​ $ 15,068 ​ Supplemental Disclosures of Cash Flow Information: ​ ​ ​ ​ ​ ​ ​ Cash paid during the period for: ​ ​ ​ ​ ​ ​ ​ Interest ​ $ 4,287 ​ $ 3,603 ​ Income taxes ​ $ 14 ​ $ 17 ​ Supplemental Disclosures of Non-Cash Information: ​ ​ ​ ​ ​ ​ ​ Acquisition of property and equipment through accounts payable ​ $ 36 ​ $ 72 ​ Renewal of insurance contracts which was financed by notes payable ​ $ 593 ​ $ 700 ​ Deemed dividend ​ $ 15 ​ $ 87 ​ ​ See accompanying notes to consolidated financial statements. ​ ​ F-7 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ​ 1. Description of the Company and Basis of Presentation Capstone Green Energy Corporation (“Capstone”, “We” or the “Company”) is a provider of customized microgrid solutions and on-site energy technology systems focused on helping customers around the globe meet their environmental, energy savings, and resiliency goals. These solutions include stationary distributed power generation applications and distribution networks, including cogeneration (combined heat and power (“CHP”), integrated combined heat and power (“ICHP”), and combined cooling, heat and power (“CCHP”), renewable energy, natural resources, and critical power supply. In April 2021, we added additional products to our portfolio and shifted our focus to four key business lines. Our Energy Conversion Products business lines is driven by the Company’s industry-leading, highly efficient, low-emission, resilient microturbine energy systems offering scalable solutions in addition to a broad range of customer-tailored solutions, including hybrid energy systems and larger frame industrial turbines. Through our Energy as a Service business line, we offer rental solutions utilizing our microturbine energy systems and battery storage systems, comprehensive factory protection plan service contracts that guarantee life-cycle costs, as well as aftermarket spare parts. Our two emerging business lines are Energy Storage Products and Hydrogen Energy Solutions. Our Energy Storage Products business line designs and installs microgrid storage systems creating customized solutions using a combination of battery technologies and monitoring software. Through our Hydrogen Energy Solutions business line, we offer customers a variety of hydrogen products, including the Company’s microturbine energy systems. Because these are new offerings, Energy Storage Products and Hydrogen Energy Solutions revenue has been immaterial to date. The Company was organized in 1988 and has been commercially producing its microturbine generators since 1998. On April 22, 2021, the Company filed with the Secretary of State of the State of Delaware a Certificate of Amendment of the Second Amended and Restated Certificate of Incorporation of the Company for the sole purpose of changing the Company’s name to Capstone Green Energy Corporation effective as of 12:01 a.m. Eastern Time on April 22, 2021 (the “Corporate Name Change”). In addition, the Company amended and restated its Fourth Amended and Restated Bylaws, effective as of April 22, 2021, solely to reflect the Corporate Name Change. This Annual Report on Form 10-K (this “Form 10-K”) refers to the Company’s fiscal years ended March 31 as its “Fiscal” years. The consolidated financial statements include the accounts of the Company, Capstone Turbine International, Inc., its wholly owned subsidiary that was formed in June 2004, Capstone Turbine Singapore Pte., Ltd., its wholly owned subsidiary that was formed in February 2011, and Capstone Turbine Financial Services, LLC, its wholly owned subsidiary that was formed in October 2015, after elimination of inter-company transactions. The Company closed its wholly owned subsidiary, Capstone Turbine Singapore Pte., Ltd and the corporate structure related to this entity was dissolved in September 2018. Certain reclassifications have been made to the prior year’s financial statements to enhance comparability with the current year’s financial statements. As a result, certain line items have been amended in the Consolidated Statements of Operations and the related notes to the consolidated financial statements. Comparative figures have been adjusted to conform to the current year’s presentation. The items were reclassified as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Previously Reported ​ After Reclassification ​ ​ Year Ended March 31, 2020 ​ ​ ​ Year Ended March 31, 2020 Product, accessories and parts $ 48,143 Product and accessories $ 35,338 Service ​ 20,783 ​ Parts and service ​ 33,588 Total revenue ​ $ 68,926 ​ Total revenue ​ $ 68,926 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ F-8 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ 2. Summary of Significant Accounting Policies Cash Equivalents The Company considers only those investments that are highly liquid and readily convertible to cash with original maturities of three months or less at date of purchase as cash equivalents. Fair Value of Financial Instruments The carrying value of certain financial instruments, including cash equivalents, accounts receivable, accounts payable, revolving credit facility and notes payable approximate fair market value based on their short-term nature. See Note 10—Fair Value Measurements, for disclosure regarding the fair value of other financial instruments. Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and are typically non-interest bearing. The Company maintains allowances for estimated losses resulting from the inability of customers to make required payments and other accounts receivable allowances. Changes in the accounts receivable allowances are as follows (in thousands): ​ ​ ​ ​ ​ Balance, March 31, 2019 ​ $ 5,298 ​ Reductions charged to costs and expenses ​ 431 ​ Bad debt write-off ​ (5,026) ​ Balance, March 31, 2020 ​ $ 703 ​ Additions charged to costs and expenses ​ (228) ​ Bad debt write-off ​ (161) ​ Balance, March 31, 2021 ​ $ 314 ​ ​ ​ Inventories The Company values inventories at the lower of cost (determined on a first in first out (“FIFO”) basis) or net realizable value. The composition of inventory is routinely evaluated to identify slow-moving, excess, obsolete or otherwise impaired inventories. Inventories identified as impaired are evaluated to determine if write-downs are required. Included in the assessment is a review for obsolescence as a result of engineering changes in the Company’s products. All inventories expected to be used in more than one year are classified as long-term. Depreciation and Amortization Depreciation and amortization are provided for using the straight-line method over the estimated useful lives of the related assets, ranging from two to ten years. Leasehold improvements are amortized over the lease term or the estimated useful lives of the assets, whichever is shorter. Intangible assets that have finite useful lives are amortized over their estimated useful lives using the straight-line method. Long-Lived Assets The Company reviews the recoverability of long-lived assets, including intangible assets with finite lives, whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. If the expected future cash flows from the use of such assets (undiscounted and without interest charges) are less than the carrying value, the Company may be required to record a write-down, which is determined based on the difference between the carrying value of the assets and their estimated fair value. The Company performed an analysis as of March 31, 2021 and determined that no impairment was necessary. See Note 5—Intangible Assets. Deferred Revenue Deferred revenue consists of deferred product and service revenue and customer deposits. Deferred revenue will be recognized when earned in accordance with the Company’s revenue recognition policy. The Company has the right to retain all or part of customer deposits under certain conditions. F-9 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ Revenue On April 1, 2018, the Company adopted the new revenue standard ASU 2014-09 and applied it to all contracts using the modified retrospective method. The Company determined there was no change in applying the new revenue standard, therefore no adjustment to the opening balance of accumulated deficit was needed. The Company derives its revenues primarily from system sales, service contracts and professional services. Revenues are recognized when control of the systems and services is transferred to the Company’s customers in an amount that reflects the consideration it expects to be entitled to in exchange for those services. The Company determines revenue recognition through the following steps: ● Identification of the contract, or contracts, with a customer ● Identification of the performance obligations in the contract ● Determination of the transaction price ● Allocation of the transaction price to the performance obligations in the contract ● Recognition of revenue when, or as, the Company satisfies a performance obligation The Company recognizes revenue when performance obligations identified under the terms of contracts with its customers are satisfied, which generally occurs, for systems, upon the transfer of control in accordance with the contractual terms and conditions of the sale. The majority of the Company’s revenue associated with systems is recognized at a point in time when the system is shipped to the customer. Revenue from service contracts and post-shipment performance obligations is recognized when or as those obligations are satisfied. The Company primarily offers assurance-type standard warranties that do not represent separate performance obligations and will separately offer and price extended warranties that are separate performance obligations for which the associated revenue is recognized over-time based on the extended warranty period. The Company records amounts billed to customers for reimbursement of shipping and handling costs within revenue. Shipping and handling costs associated with outbound freight after control over a system has transferred to a customer are accounted for as fulfillment costs and are included in cost of goods sold. Sales taxes and other usage-based taxes are excluded from revenue. Comprehensive factory protection plan service contracts require payment at the beginning of the contract period. Advance payments are not considered a significant financing component as they are typically received less than one year before the related performance obligations are satisfied. These payments are treated as a contract liability and are classified in deferred revenue in the Consolidated Balance Sheets. Once control transfers to the customer and the Company meets the revenue recognition criteria, the deferred revenue is recognized in the Consolidated Statement of Operations. The deferred revenue relating to the annual maintenance service contracts is recognized in the Consolidated Statement of Operations on a straight line basis over the expected term of the contract. Significant Judgments - Contracts with Multiple Performance Obligations The Company enters into contracts with its customers that often include promises to transfer multiple products, parts, accessories, FPP and services. A performance obligation is a promise in a contract with a customer to transfer products or services that are distinct. Determining whether products and services are distinct performance obligations that should be accounted for separately or combined as one unit of accounting may require significant judgment. Products, parts and accessories are distinct as such services are often sold separately. In determining whether FPP and service contracts are distinct, the Company considers the following factors for each FPP and services agreement: availability of the services from other vendors, the nature of the services, the timing of when the services contract was signed in comparison to the product delivery date and the contractual dependence of the product on the customer’s F-10 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ satisfaction with the professional services work. To date, the Company has concluded that all of the FPP and services contracts included in contracts with multiple performance obligations are distinct. The Company allocates the transaction price to each performance obligation on a relative standalone selling price (“SSP”) basis. The SSP is the price at which the Company would sell a promised product or service separately to a customer. Judgment is required to determine the SSP for each distinct performance obligation. The Company determines SSP by considering its overall pricing objectives and market conditions. Significant pricing practices taken into consideration include the Company’s discounting practices, the size and volume of the Company’s transactions, the customer demographic, the geographic area where systems and services are sold, price lists, its go-to-market strategy, historical sales and contract prices. The determination of SSP is made through consultation with and approval by the Company’s management, taking into consideration the go-to-market strategy. As the Company’s go-to-market strategies evolve, the Company may modify its pricing practices in the future, which could result in changes to SSP. In certain cases, the Company is able to establish SSP based on observable prices of products or services sold separately in comparable circumstances to similar customers. The Company uses a single amount to estimate SSP when it has observable prices. If SSP is not directly observable, for example when pricing is highly variable, the Company uses a range of SSP. The Company determines the SSP range using information that may include market conditions or other observable inputs. The Company typically has more than one SSP for individual products and services due to the stratification of those products and services by customer size and geography. Unsatisfied Performance Obligations The Company has elected the practical expedient to disclose only the value of unsatisfied performance obligations for contracts with an original expected length greater than one year. The majority of the Company’s revenues resulted from sales of inventoried systems with short periods of manufacture and delivery and thus are excluded from this disclosure. As of March 31, 2021, the FPP backlog was approximately $75.1 million, which represents the value of the contractual agreement for FPP services that has not been earned and extends through Fiscal 2041. Practical Expedients We apply a practical expedient to expense costs as incurred for costs to obtain a contract when the amortization period would have been one year or less. These costs are recorded within sales and marketing expenses. Warranty The Company provides for the estimated costs of warranties at the time revenue is recognized. The specific terms and conditions of those warranties vary depending upon the product sold and geography of sale. The Company’s product warranties generally start from the delivery date and continue for up to twenty-four months. Factors that affect the Company’s warranty obligation include product failure rates, anticipated hours of product operations and costs of repair or replacement in correcting product failures. These factors are estimates that may change based on new information that becomes available each period. Similarly, the Company also accrues the estimated costs to address reliability repairs on products no longer in warranty when, in the Company’s judgment, and in accordance with a specific plan developed by the Company, it is prudent to provide such repairs. The Company assesses the adequacy of recorded warranty liabilities quarterly and makes adjustments to the liability as necessary. When the Company has sufficient evidence that product changes are altering the historical failure occurrence rates, the impact of such changes is then taken into account in estimating future warranty liabilities. F-11 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ Research and Development (“R&D”) The Company accounts for grant distributions and development funding as offsets to R&D expenses and both are recorded as the related costs are incurred. There were no offsets to R&D during Fiscal 2021 and 2020. Income Taxes Deferred income tax assets and liabilities are computed for differences between the consolidated financial statement and income tax basis of assets and liabilities. Such deferred income tax asset and liability computations are based on enacted tax laws and rates applicable to periods in which the differences are expected to reverse. Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amounts expected to be realized. ASC Topic 740-10, Income Taxes , clarifies the accounting for uncertainty in income taxes recognized in our financial statements in accordance with accounting principles generally accepted in the United States of America, or GAAP. Income tax positions must meet a more-likely-than-not recognition threshold to be recognized. Income tax positions that previously failed to meet the more-likely-than-not threshold are recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax potions that no longer meet the more-likely-than-not threshold are derecognized in the first subsequent financial reporting period in which that threshold is no longer met. Our policy is to recognize interest and penalties accrued on any unrecognized tax benefits as interest and other expense, net in the statements of operations. Contingencies The Company records an estimated loss from a loss contingency when information available prior to issuance of its financial statements indicates that it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Risk Concentrations Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. At March 31, 2021, the majority of our cash balances were held at financial institutions located in California. The accounts at these institutions are insured by the Federal Deposit Insurance Corporation up to certain limits. Balances that exceed the insurance coverage aggregate to approximately $48.6 million as of March 31, 2021. The Company places its cash and cash equivalents with high credit quality institutions. The Company performs ongoing credit evaluations of its customers and maintains an allowance for potential credit losses. Sales to CAL and E-Finity accounted for 15% and 12%, respectively, of the Company’s revenue for Fiscal 2021. Sales to E-Finity accounted for 12% of Company’s revenue for Fiscal 2020. Additionally, E-Finity accounted for 13% and 14% of net accounts receivable as of March 31, 2021 and March 31, 2020, respectively. The Company recorded net bad debt recovery of $0.2 million and net bad debt expense of $0.4 million for Fiscal 2021 and 2020, respectively. Certain components of the Company’s products are available from a limited number of suppliers. An interruption in supply could cause a delay in manufacturing, which would affect operating results adversely. Estimates and Assumptions The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates include accounting for accounts receivable allowances, stock-based compensation, inventory write-downs, valuation of long-lived assets including intangible assets with finite lives, product warranties, income taxes and other contingencies. Actual results could differ from those estimates. Net Loss Per Common Share Basic loss per common share is computed using the weighted-average number of common shares outstanding for the period. Diluted loss per share is also computed without consideration to potentially dilutive instruments because the Company incurred losses which would make such instruments antidilutive. Outstanding stock options and restricted stock units at March 31, 2021 and 2020 were 0.5 million and 0.3 million, respectively. As of F-12 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ March 31, 2021 and 2020, the number of warrants excluded from diluted net loss per common share computations was approximately 1.1 million and 1.5 million, respectively. Stock-Based Compensation Options or stock awards are recorded at their estimated fair value at the measurement date. The Company recognizes compensation cost for options and stock awards that have a graded vesting schedule on a straight-line basis over the requisite service period for the entire award. Leases Effective April 1, 2019, the Company accounts for its leases under ASC 842, Leases. Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded on the consolidated balance sheet as both a right of use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right of use asset result in straight-line rent expense over the lease term. In calculating the right of use asset and lease liability, the Company elects to combine lease and non-lease components. The Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election and recognizes rent expense on a straight-line basis over the lease term. Reverse Stock Split At the annual meeting of stockholders of the Company held on August 29, 2019, the Company’s stockholders approved an amendment to the Company’s Second Amended and Restated Certificate of Incorporation (the “Amendment”) to effect a reverse stock split of the Company’s common stock, $0.001 par value per share (“Common Stock”) at a ratio in the range of one-for-five (1:5) to one-for-ten (1:10). Pursuant to such authority granted by the stockholders, the Company’s Board of Directors (the “Board”) approved a one-for-ten (1:10) reverse stock split (the “Reverse Stock Split”) of the Common Stock and the filing of the Amendment. The Certificate of Amendment was filed with the Secretary of State of Delaware, effective on October 21, 2019 and the Reverse Stock Split became effective as of that date. Accordingly, all references to numbers of shares of Common Stock, including the number of shares of Common Stock on an as-if-converted basis, per-share data and share prices and exercise prices in the accompanying condensed consolidated financial statements have been adjusted to reflect the reverse stock split on a retroactive basis. Evaluation of Ability to Maintain Current Level of Operations In connection with the preparation of these consolidated financial statements for Fiscal 2021, management evaluated whether there were conditions and events, considered in the aggregate, that raised substantial doubt about the Company’s ability to meet its obligations as they became due over the next twelve months from the date of issuance of the Company’s Fiscal 2021 consolidated financial statements. Management assessed that there were such conditions and events, including a history of recurring operating losses, negative cash flows from operating activities, the continued impact of the COVID-19 pandemic, volatility of the global oil and gas markets, a strong U.S. dollar in certain markets making its products more expensive in such markets and ongoing global geopolitical tensions. The Company incurred a net loss of $18.4 million and provided cash from operating activities of $1.7 million during Fiscal 2021. The Company’s working capital requirements during Fiscal 2021 were in-line with management’s expectations, which included reductions in inventory and accounts payable primarily due our lower revenue levels. The Company’s net loss improved during Fiscal 2021 primarily due to reduced overhead and operating expenses resulting from the Company’s COVID-19 Business Continuity Plan described below, as well as reduced FPP costs as the Company’s reliability improved due to the reduced impact of the part defect from a supplier first identified during the first quarter of Fiscal 2019. As of March 31, 2021, the Company had cash and cash equivalents of $49.5 million, and outstanding debt of $51.0 million at fair value (see Note 11–Term Note Payable for further discussion of the outstanding debt). F-13 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ Management evaluated these conditions in relation to the Company’s ability to meet its obligations as they become due over the next twelve months from the date of issuance of these consolidated financial statements. The Company’s ability to continue current operations and to execute on management’s plan is dependent on its ability to generate sufficient cash flows from operations. Management believes that the Company will continue to make progress on its path to profitability by continuing to maintain low operating expenses and develop its geographical and vertical markets. The Company may seek to raise funds by selling additional securities (through the at-the-market offering or otherwise) to the public or to selected investors or by obtaining additional debt financing. There is no assurance that the Company will be able to obtain additional funds on commercially favorable terms or at all. If the Company raises additional funds by issuing additional equity or convertible debt securities, the fully diluted ownership percentages of existing stockholders will be reduced. In addition, any equity or debt securities that the Company would issue may include rights, preferences or privileges senior to those of the holders of its common stock. Based on the Company’s current operating plan, management anticipates that, given current working capital levels, current financial projections and funds received under debt agreements as further described in Note 11-Term Note Payable, the Company will be able to meet its financial obligations as they become due over at least the next twelve months from the date of issuance of the Company’s Fiscal 2021 consolidated financial statements. Company Response to COVID-19 In March 2020, the Company began to monitor the global effects of COVID-19, the worldwide spread of which led the World Health Organization (“WHO”) to characterize it as a pandemic on March 11, 2020. Thereafter, most U.S. states imposed “stay-at-home” orders on their populations to stem the spread of COVID-19. Of specific interest to the Company, stay-at-home orders were imposed in the state of California on March 20, 2020. On March 23, 2020 the Company enacted a Business Continuity Plan in response to COVID-19. Beginning March 30, 2020, the Company furloughed 52 employees, leaving behind only staff deemed essential for day-to-day administrative operations for a minimum period of 45 days. The Company’s Leadership Team volunteered to take a 25% temporary salary cut. In addition, 25 other top Company managers volunteered to take a similar 15% reduction in salary. Several employees returned to work June 1, 2020, most with the 15% voluntary salary cuts, with others returning in a staggered manner through the end of September 2020. Additionally, in March 2020, the Board voted to take a temporary 25% reduction in base cash retainer in support of the Company’s Business Continuity Plan. As a result of the continued global economic slowdown due to COVID-19 and the associated decline in global crude oil prices, the Company eliminated 26 positions on June 1, 2020. During the period of March 30, 2020 to June 1, 2020, the Company had limited production capability of new microturbine products, but had pre-built approximately 5.9 MW of microturbine finished goods during March 2020 for shipment during this period of suspended production. On September 28, 2020 salaries were returned to 100% and remaining furloughed employees returned to work. The Company’s vendor supply chain has also been impacted by the pandemic; however, the Company has been able to maintain sufficient supply flow to continue operations. F-14 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ Segment Reporting The Company is considered to be a single reporting segment. The business activities of this reporting segment are the development, manufacture and sale of turbine generator sets and their related parts and service. Following is the geographic revenue information based on the primary operating location of the Company’s customers (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ 2021 2020 United States ​ $ 32,502 ​ $ 31,082 Mexico ​ 3,931 ​ 2,361 All other North America ​ 321 ​ 1,145 Total North America ​ 36,754 ​ 34,588 Russia ​ 3,577 ​ 3,653 All other Europe ​ ​ 13,659 ​ ​ 12,858 Total Europe ​ ​ 17,236 ​ ​ 16,511 Asia ​ 6,087 ​ 4,074 Australia ​ 3,165 ​ 4,559 All other ​ 4,394 ​ 9,194 Total Revenue ​ $ 67,636 ​ $ 68,926 ​ The following table summarizes the Company’s revenue by product (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ 2021 2020 C30 ​ $ 1,607 ​ $ 1,518 C65 ​ 10,756 ​ 9,366 C200 ​ 3,603 ​ 3,880 C600 ​ 7,913 ​ 7,204 C800 ​ 3,069 ​ 3,253 C1000 ​ 7,173 ​ 8,340 Unit upgrades ​ — ​ 229 Microturbine Products ​ $ 34,121 ​ $ 33,790 Accessories ​ ​ 2,396 ​ ​ 1,548 Total Product and Accessories ​ ​ 36,517 ​ ​ 35,338 Parts and Service ​ 31,119 ​ 33,588 Total Revenue ​ $ 67,636 ​ $ 68,926 ​ Substantially all of the Company’s operating assets are in the United States. Impact of Recently Issued Accounting Standards Not yet adopted In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes . The new guidance removes certain exceptions to the general principles of ASC 740 in order to simplify the complexities of its application. These changes include eliminations to the exceptions for intraperiod tax allocation, recognizing deferred tax liabilities related to outside basis differences, and year-to-date losses in interim periods, among others. The effective date of this guidance for public companies is for fiscal years, and interim period within those fiscal years, beginning after December 15, 2020. The Company does not anticipate the adoption will have a material impact on its financial statements F-15 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ Management considers the applicability and impact of all Accounting Standards Updates (“ASUs”). The ASUs not listed were assessed and determined by management to be either not applicable or are expected to have minimal impact on our consolidated financial position and/or results of operations. ​ 3. Inventories Inventories are valued at the lower of cost (determined on a first in first out (“FIFO”) basis) or net realizable value and consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ March 31, ​ ​ 2021 2020 Raw materials ​ $ 15,755 ​ $ 20,672 ​ Work in process ​ ​ (30) ​ 3 ​ Finished goods ​ ​ — ​ ​ 4,820 ​ Total ​ ​ 15,725 ​ ​ 25,495 ​ Less: inventory reserve ​ ​ (2,051) ​ ​ (2,814) ​ Less: non-current portion ​ ​ (1,845) ​ ​ (1,221) ​ Total inventory, net-current portion ​ $ 11,829 ​ $ 21,460 ​ ​ The non-current portion of inventories represents that portion of the inventories in excess of amounts expected to be used in the next twelve months. The non-current inventories are primarily comprised of repair parts for older generation products that are still in operation, but are not technologically compatible with current configurations. The weighted average age of the non-current portion of inventories on hand as of March 31, 2021 is 1.2 years. The Company expects to use the non-current portion of the inventories on hand as of March 31, 2021 over the periods presented in the following table (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ Non-current Inventory ​ ​ ​ Balance Expected ​ Expected Period of Use ​ to be Used 13 to 24 months ​ $ 785 ​ 25 to 36 months ​ 1,060 ​ Total ​ $ 1,845 ​ ​ ​ 4. Property, Plant and Equipment Property, plant, equipment and rental assets consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ March 31, ​ ​ 2021 2020 Machinery, equipment, automobiles and furniture ​ $ 15,523 ​ $ 15,115 Leasehold improvements ​ 8,069 ​ 7,857 Molds and tooling ​ ​ 3,192 ​ ​ 3,101 ​ Rental assets ​ 8,378 ​ 5,986 ​ ​ 35,162 ​ 32,059 ​ Less: accumulated depreciation ​ (25,532) ​ (24,310) ​ Total property, plant, equipment and rental assets, net ​ $ 9,630 ​ $ 7,749 ​ ​ The Company regularly assesses the useful lives of property and equipment and retires assets no longer in service. Depreciation expense for property, plant, equipment and rental assets was $1.3 million for Fiscal 2021 and 2020. F-16 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ 5. Intangible Assets Intangible assets, net of amortization include intellectual property such as manufacturing licenses providing the Company with the ability to manufacture recuperator cores previously purchased from Solar Turbines Incorporated (“Solar”) and were fully amortized as of March 31, 2021 and March 31, 2020. The Company is required to pay a per-unit royalty fee over a seventeen-year period for cores manufactured and sold by the Company using the technology. Royalties of approximately $27,400 and $26,400 were earned by Solar for Fiscal 2021 and 2020, respectively. Earned royalties of approximately $53,800 and $52,500 were unpaid as of March 31, 2021 and 2020, respectively, and are included in accrued expenses in the accompanying consolidated balance sheets. Amortization expense for the intangible assets was $0.1 million and $0.2 million for Fiscal 2021 and 2020, respectively. 6. Accrued Warranty Reserve The Company provides for the estimated costs of warranties at the time revenue is recognized. The specific terms and conditions of those warranties vary depending upon the microturbine product sold and the geography of sale. The Company’s product warranties generally start from the delivery date and continue for up to twenty-four months. Factors that affect the Company’s warranty obligation include product failure rates, anticipated hours of product operations and costs of repair or replacement in correcting product failures. These factors are estimates that may change based on new information that becomes available each period. Similarly, the Company also accrues the estimated costs to address reliability repairs on products no longer in warranty when, in the Company’s judgment, and in accordance with a specific plan developed by the Company, it is prudent to provide such repairs. The Company assesses the adequacy of recorded warranty liabilities quarterly and makes adjustments to the liability as necessary. When the Company has sufficient evidence that product changes are altering the historical failure occurrence rates, the impact of such changes is then taken into account in estimating future warranty liabilities. Changes in the accrued warranty reserve are as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ March 31, March 31, ​ ​ 2021 ​ 2020 Balance, beginning of the period ​ $ 1,934 ​ $ 2,614 Standard warranty provision ​ 985 ​ 594 Accrual related to reliability repair programs ​ 4,945 ​ — Deductions for warranty claims ​ (2,014) ​ (1,274) Balance, end of the period ​ $ 5,850 ​ $ 1,934 During the fourth quarter of Fiscal 2021, we recorded a specific $4.9 million accrual related to reliability repair programs to account for the replacement of remaining high risk failure parts in some of our fielded units due to a supplier defect. 7. Revenue Recognition The following table presents disaggregated revenue by business group (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ 2021 2020 Microturbine Products ​ $ 34,121 ​ $ 33,790 Accessories ​ ​ 2,396 ​ ​ 1,548 Total Product and Accessories ​ ​ 36,517 ​ ​ 35,338 Parts and Service ​ 31,119 ​ 33,588 Total Revenue ​ $ 67,636 ​ $ 68,926 F-17 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ Following is the geographic revenue information based on the primary operating location of the Company’s customers (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ 2021 2020 United States ​ $ 32,502 ​ $ 31,082 Mexico ​ 3,931 ​ 2,361 All other North America ​ 321 ​ 1,145 Total North America ​ 36,754 ​ 34,588 Russia ​ 3,577 ​ 3,653 All other Europe ​ ​ 13,659 ​ ​ 12,858 Total Europe ​ ​ 17,236 ​ ​ 16,511 Asia ​ 6,087 ​ 4,074 Australia ​ 3,165 ​ 4,559 All other ​ 4,394 ​ 9,194 Total Revenue ​ $ 67,636 ​ $ 68,926 ​ Contract Balances The Company’s contract liabilities consist of advance payments for systems as well as deferred revenue on service obligations and extended warranties. The current portion of deferred revenue is included in current liabilities under deferred revenue and the non-current portion of deferred revenue is included in other non-current liabilities in the consolidated balance sheets. As of March 31, 2021, the balance of deferred revenue was approximately $7.1 million compared to $8.8 million as of March 31, 2020. This overall decrease in the balance of deferred revenue of $1.7 million during Fiscal 2021 was comprised of decreases in deferred revenue attributable to deposits of $0.7 million, FPP contracts of $0.6 million and Distributor Support System (“DSS program”) of $0.4 million. Changes in deferred revenue are as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, March 31, ​ ​ 2021 ​ 2020 ​ FPP Balance, beginning of the period ​ $ 5,342 ​ $ 4,882 ​ FPP Billings ​ 16,700 ​ 17,004 ​ FPP Revenue recognized ​ (17,277) ​ (16,544) ​ Balance attributed to FPP contracts ​ 4,765 ​ 5,342 ​ DSS Program ​ ​ 1,417 ​ ​ 1,831 ​ Deposits ​ 957 ​ 1,669 ​ Deferred revenue balance, end of the period ​ $ 7,139 ​ $ 8,842 ​ ​ Deferred revenue attributed to FPP contracts represents the unearned portion of the Company’s agreements. FPP agreements are generally paid quarterly in advance with revenue recognized on a straight line basis over the contract period. The DSS program provides additional support for distributor business development activities, customer lead generation, brand awareness and tailored marketing services for each of the Company’s major geography and market vertical. This program is funded by the Company’s distributors and was developed to provide improved worldwide distributor training, sales efficiency, website development, company branding and provide funding for increased strategic marketing activities. DSS program revenue is generally paid quarterly with revenue recognized on a straight line basis over a calendar year period. Deposits are primarily non-refundable cash payments from distributors for future orders. F-18 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ As of March 31, 2021, approximately $4.8 million of revenue is expected to be recognized from remaining performance obligations for FPP service contracts. The Company expects to recognize revenue on approximately $4.0 million of these remaining performance obligations over the next 12 months and the balance of $0.8 million will be recognized thereafter. 8. Income Taxes Loss before provision for income taxes consisted of the following for the years ended March 31, 2021 and 2020 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ 2021 2020 United States ​ $ (18,388) ​ $ (21,920) ​ Foreign 20 34 ​ Loss before provision for income taxes ​ $ (18,368) ​ $ (21,886) ​ Current income tax provision is the amount of income taxes reported or expected to be reported on our income tax return. The provision for current income taxes was $19,000 and $12,000 for Fiscal 2021 and 2020, respectively. The current income taxes were related to state income and foreign taxes. The Company did not have current federal income taxes for Fiscal 2021 and 2020. Actual income tax expense differed from the amount computed by applying statutory corporate income tax rates to loss from operations before income taxes. A reconciliation of income tax (benefit) expense to the federal statutory rate follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ 2021 2020 Federal income tax benefit at the statutory rate ​ $ (3,857) ​ $ (4,596) ​ State taxes, net of federal effect (311) (248) ​ Foreign taxes ​ 9 ​ 2 ​ Expiring NOLs and tax credits ​ ​ 14,086 ​ ​ 6,273 ​ Impact of state rate change ​ 160 ​ 24 ​ Valuation allowance ​ (10,154) ​ (1,792) ​ Shortfall in tax benefit—stock compensation ​ 87 ​ 321 ​ True-up ​ ​ (2) ​ ​ (2) ​ Other ​ 1 ​ 30 ​ Income tax expense ​ $ 19 ​ $ 12 ​ ​ F-19 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ The Company’s deferred tax assets and liabilities consisted of the following at March 31, 2021 and 2020 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ ​ 2021 2020 Deferred tax assets: ​ ​ ​ ​ ​ ​ Inventories ​ $ 889 ​ $ 1,536 Warranty reserve ​ 1,357 ​ 454 Bad debt reserve ​ ​ 58 ​ ​ 139 Deferred revenue ​ 1,434 ​ 1,684 Net operating loss (“NOL”) carryforwards ​ 135,895 ​ 146,503 Tax credit carryforwards ​ 13,988 ​ 15,227 Depreciation, amortization and impairment loss ​ 1,237 ​ 1,652 Lease liability ​ 1,146 ​ 1,263 Interest limitation ​ 3,735 ​ 1,570 Other ​ 1,032 ​ 998 Deferred tax assets ​ 160,771 ​ 171,026 Valuation allowance for deferred tax assets ​ (159,671) ​ (169,825) Deferred tax assets, net of valuation allowance ​ 1,100 ​ 1,201 Deferred tax liabilities: ​ ​ ​ ​ ​ ​ Right of use assets ​ (1,100) ​ (1,201) Net deferred tax assets ​ $ — ​ $ — ​ Because of the uncertainty surrounding the timing of realizing the benefits of favorable tax attributes in future income tax returns, the Company has placed a valuation allowance against its net deferred income tax assets. The change in valuation allowance for Fiscal 2021 and 2020 was $10.2 million and $1.8 million, respectively. The Company’s NOL and tax credit carryforwards for federal and state income tax purposes at March 31, 2021 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Expiration ​ ​ Amount Period Federal NOL generated before April 1, 2018 ​ $ 543,781 2022 - 2038 ​ Federal NOL generated after March 31, 2018 ​ $ 48,899 Indefinite ​ State NOL ​ $ 162,967 2022 - 2039 ​ Federal tax credit carryforwards ​ $ 6,331 2022 - 2038 ​ State tax credit carryforwards ​ $ 9,692 Indefinite ​ ​ The NOLs and federal and state tax credits can be carried forward to offset future taxable income, if any. Utilization of the NOLs and tax credits are subject to an annual limitation of approximately $57.3 million due to the ownership change limitations provided by the Internal Revenue Code of 1986 and similar state provisions. The federal tax credit carryforward is a research and development credit, which may be carried forward. The state tax credits consist of a research and development credit can be carried forward indefinitely. Accounting Standards Codification (“ASC”) 740, Income Taxes clarifies the accounting for income taxes by prescribing a minimum recognition threshold that a tax position is required to meet before being recognized in the financial statements. ASC 740 also provides guidance on de-recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. Based on management’s evaluation, the total amount of unrecognized tax benefits related to research and development credits as of March 31, 2021 and 2020 was $1.9 million and $2.3 million, respectively. There were no interest or penalties related to unrecognized tax benefits as of March 31, 2021 or March 31, 2020. The amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate F-20 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ as of March 31, 2021 and March 31, 2020 was $1.9 million and $2.3 million, respectively. However, this impact would be offset by an equal increase in the deferred tax valuation allowance as the Company has recorded a full valuation allowance against its deferred tax assets because of uncertainty as to future realization. The fully reserved recognized federal and state deferred tax assets related to research and development credits balance as of March 31, 2021 and 2020 was $6.3 million and $9.7 million, and $7.6 million and $8.4 million, respectively. A reconciliation of the beginning and ending amount of total gross unrecognized tax benefits is as follows (in thousands): ​ ​ ​ ​ ​ Balance at March 31, 2019 ​ $ 2,390 ​ Gross increase related to prior year tax positions ​ — ​ Gross increase related to current year tax positions ​ — ​ Lapse of statute of limitations ​ (118) ​ Balance at March 31, 2020 ​ $ 2,272 ​ Gross increase related to prior year tax positions ​ — ​ Gross increase related to current year tax positions ​ — ​ Lapse of statute of limitations ​ (326) ​ Balance at March 31, 2021 ​ $ 1,946 ​ ​ The Company does not expect a material change to its unrecognized tax benefits over the next twelve months. The Company files income tax returns in the U.S. federal jurisdiction and various state, local and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state, local or non-U.S. income tax examinations by tax authorities for the years before 2015. However, net operating loss carryforwards remain subject to examination to the extent they are carried forward and impact a year that is open to examination by tax authorities. The Company's evaluation was performed for the tax years which remain subject to examination by major tax jurisdictions as of March 31, 2021. When applicable, the Company accounts for interest and penalties generated by tax contingencies as interest and other expense, net in the statements of operations. In response to the coronavirus (COVID-19) pandemic, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted on March 27, 2020 in the U.S. The CARES Act includes many measures to assist companies, including temporary changes to income and non-income-based tax laws. The Company currently does not expect the CARES Act to have a material impact on the Company’s financial results, including on the Company’s annual estimated effective tax rate. The Company will continue to monitor and assess the impact the CARES Act, and similar legislation in other countries, with respect to what impact they may have on the Company’s business and financial results. On December 27, 2020 the Consolidated Appropriations Act, 2021 was signed into law. It provides additional COVID-19 focused relief and extends certain provisions of the CARES Act. At this time, we do not expect that the Consolidated Appropriations Act, 2021 to have a material impact on the Company’s financial results. F-21 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ 9. Stockholders’ Equity The following table summarizes, by consolidated statements of operations line item, stock-based compensation expense (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ 2021 2020 Cost of goods sold ​ $ 83 $ 69 ​ Research and development ​ 41 ​ 44 ​ Selling, general and administrative ​ 813 ​ 800 ​ Stock-based compensation expense ​ $ 937 ​ $ 913 ​ ​ 2000 and 2017 Equity Incentive Plans In June 2000, the Company adopted the 2000 Equity Incentive Plan (“2000 Plan”). The 2000 Plan provides for a total maximum aggregate number of shares which may be issued of 184,900 shares. In June 2017, the Company’s Board adopted the Capstone Turbine Corporation 2017 Equity Incentive Plan (the “2017 Plan”), which was approved by the stockholders at the Company’s 2017 annual meeting of stockholders on August 31, 2017 (the “2017 Annual Meeting”). The 2017 Plan provides for awards of up to 300,000 shares of Common Stock. The 2017 Plan is administered by the Compensation Committee designated by the Board (the “Compensation Committee”). The Compensation Committee’s authority includes determining the number of incentive awards and vesting provisions. On June 5, 2018, the Company’s Board of Directors adopted an amendment of the 2017 Plan to increase the aggregate number of shares of Common Stock authorized for issuance under the 2017 Plan by 300,000 shares of Common Stock. The amendment of the 2017 Plan was approved by the Company’s stockholders at the 2018 annual meeting of stockholders on August 30, 2018. On August 29, 2019, at the Company’s 2019 annual meeting, the Company’s stockholders approved another amendment to the 2017 Plan to increase the aggregate number of shares authorized for issuance under the 2017 Plan by 300,000 shares to 900,000 shares of Common Stock. On August 27, 2020, at the Company’s 2020 annual meeting, the Company’s stockholders approved another amendment to the 2017 Plan to increase the aggregate number of shares authorized for issuance under the 2017 Plan by 500,000 shares to 1,400,000 shares of Common Stock. As of March 31, 2020, there were 603,677 shares available for future grants under the 2017 Plan. F-22 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ Stock Options The Company issued stock options under the 2000 Plan and issues stock options under the 2017 Plan to employees, non-employee directors and consultants that vest and become exercisable over a four-year period and expire 10 years after the grant date. The Company uses a Black-Scholes valuation model to estimate the fair value of the options at the grant date, and compensation cost is recorded on a straight-line basis over the vesting period. All options are subject to the following vesting provisions: one-fourth vest one year after the issuance date and 1/48th vest on the first day of each full month thereafter, so that all options will be vested on the first day of the 48th month after the grant date. The following table summarizes information relating to the Company’s stock option activity during Fiscal 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ ​ ​ Weighted- ​ Remaining ​ Aggregate ​ ​ ​ ​ Average ​ Contractual ​ Intrinsic ​ ​ ​ Shares ​ Exercise Price ​ Term ​ Value ​ ​ ​ ​ ​ ​ ​ (in years) ​ ​ ​ ​ Options outstanding at March 31, 2020 11,249 $ 215.56 ​ ​ ​ ​ Granted — ​ $ — ​ ​ ​ ​ ​ ​ Exercised — ​ $ — ​ ​ ​ ​ ​ ​ Forfeited, cancelled or expired (2,325) ​ $ 204.97 ​ ​ ​ ​ ​ ​ Options outstanding at March 31, 2021 8,924 ​ $ 218.32 1.6 ​ ​ — ​ Options fully vested at March 31, 2021 and those expected to vest beyond March 31, 2021 8,924 ​ $ 218.32 1.6 ​ ​ — ​ Options exercisable at March 31, 2021 8,924 ​ $ 218.32 1.6 ​ ​ — ​ ​ Black-Scholes Model Valuation Assumptions There were no stock options granted and no expense associated with stock options during Fiscal 2021 or 2020. There were no unvested stock option awards as of March 31, 2021. Restricted Stock Units and Performance Restricted Stock Units The Company issued restricted stock units under the 2000 Plan and issues restricted stock units under the 2017 Plan to employees, non-employee directors and consultants. The restricted stock units are valued based on the closing price of the Company’s common stock on the date of issuance, and compensation cost is recorded on a straight-line basis over the vesting period. The restricted stock units issued to employees vest in equal installments over a period of two, three or four years. For restricted stock units with two year vesting, 100% vests on the second year anniversary. For restricted stock units with three year vesting, one-third vest annually beginning one year after the issuance date. For restricted stock units with four year vesting, one-fourth vest annually beginning one year after the issuance date. The restricted stock units issued to non-employee directors vest one year after the issuance date. The following table summarizes restricted stock unit and performance restricted stock unit (“PRSU”) activity during Fiscal 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ Average Grant ​ ​ ​ ​ ​ Date Fair ​ Restricted Stock Units and Performance Restricted Stock Units ​ Shares ​ Value Non-vested restricted stock units outstanding at March 31, 2020 330,830 $ 6.28 ​ Granted 308,503 ​ ​ 5.28 ​ Vested and issued (128,865) ​ ​ 6.44 ​ Forfeited (13,187) ​ ​ 5.21 ​ Non-vested restricted stock units outstanding at March 31, 2021 497,281 ​ ​ 5.65 ​ Restricted stock units expected to vest beyond March 31, 2021 497,281 ​ $ 5.65 ​ ​ ​ F-23 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ The following table provides additional information on restricted stock units and performance restricted stock units: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ 2021 2020 Restricted stock compensation expense (in thousands) ​ $ 937 $ 913 Aggregate fair value of restricted stock units vested and issued (in thousands) ​ $ 352 $ 384 Weighted average grant date fair value of restricted stock units granted during the period ​ $ 5.28 $ 4.74 ​ ​ As of March 31, 2021, there was approximately $1.8 million of total compensation cost related to unvested restricted stock units that is expected to be recognized as expense over a weighted average period of 2.3 years. The Company’s PRSU activity is included in the above restricted stock units tables. The PRSU program has a two-year or three-year performance measurement period. The performance measurement occurs in the second year (for a two-year grant) or third year (for a three-year grant) following the grant date. The program is intended to have overlapping performance measurement periods (e.g., a new three-year cycle begins each year on April 1), subject to Compensation Committee approval. At the end of each performance measurement period, the Compensation Committee will determine the achievement against the performance objectives. There were no PRSUs granted during Fiscal 2021. During Fiscal 2020, the Company granted 30,139 PRSUs with a third-year performance measurement and the criteria measured by the Company’s cash flow from operations and aftermarket sales absorption. The target PRSU awards for each participant, will be paid upon achievement of the target level of performance for cash flow from operations and aftermarket sale absorption, taking into account the applicable weighting for the individual metric. Achievement of a performance goal at the threshold level will result in a payment that is 50% of the target PRSU award. Achievement of a performance goal at the maximum level will result in a payment that is 150% of the target PRSU award. The Compensation Committee will use an interpolation table that weights performance between levels for determining the portion of the Target PRSU that is earned. The weighted average per share grant date fair value of PRSUs granted during Fiscal 2020 was $8.90. Based on the Company’s assessment as of March 31, 2021, the Company will not meet the threshold of the performance measurements, and as a result, no compensation expense was recorded during Fiscal 2021. Compensation expense is recognized over the corresponding requisite service period and will be adjusted in subsequent reporting periods if the Company’s assessment of the probable level of achievement of the performance goals change. The Company will continue to assess the likelihood of the PRSU threshold being met until the end of the applicable performance period. Employee Stock Purchase Plan In June 2000, the Company adopted the Employee Stock Purchase Plan (the “ESPP”). The ESPP provides for the granting of rights to purchase common stock to regular full and part-time employees or officers of the Company and its subsidiaries. In June 2017, the Board unanimously approved an amendment and restatement to the ESPP which was approved by the stockholders at the Company’s annual meeting of stockholders on August 31, 2017. Prior to the amendment, 7,000 shares of the Company’s Common Stock had been reserved for issuance. As amended, the ESPP continued by its terms and the number of shares of the Company’s common stock available increased by 50,000 shares which reserved for issuance a total of 57,000 shares of Common Stock. Under the ESPP, shares of the Company’s common stock are issued upon exercise of the purchase rights. The ESPP terminated as of March 31, 2021. The maximum amount that an employee can contribute during a purchase right period is $25,000 or 15% of the employee’s regular compensation. Under the ESPP, the exercise price of a purchase right is 95% of the fair market value of such shares on the last day of the purchase right period. The fair market value of the stock is its closing price as reported on the Nasdaq Capital Market on the day in question. F-24 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ Stockholder Rights Plan On May 6, 2019, the Board declared a dividend of one right (a “New Right”) for each of the Company’s issued and outstanding shares of Common Stock. The dividend will be paid to the stockholders of record at the close of business on May 16, 2019 (the “Record Date”). Each New Right entitles the registered holder, subject to the terms of the NOL Rights Agreement (as defined below), to purchase from the Company one one-thousandth of a share of the Company’s Series B Junior Participating Preferred Stock (the “Preferred Stock”) at a price of $5.22 (the “Exercise Price”), subject to certain adjustments. The description and terms of the New Rights are set forth in the Rights Agreement dated as of May 6, 2019 (the “NOL Rights Agreement”) between the Company and Broadridge Financial Solutions, Inc., as Rights Agent (the “Rights Agent”). The NOL Rights Agreement replaced the Company’s Rights Agreement, dated May 6, 2016, by and between the Company and Broadridge Financial Solutions, Inc., as successor-in-interest to Computershare Inc., as rights agent (the “Original Rights Agreement”). The Original Rights Agreement, and the rights thereunder to purchase fractional shares of Preferred Stock, expired at 5:00 p.m., New York City time, on May 6, 2019 and the NOL Rights Agreement was entered into immediately thereafter. The purpose of the NOL Rights Agreement is to diminish the risk that the Company’s ability to use its net operating losses and certain other tax assets (collectively, “Tax Benefits”) to reduce potential future federal income tax obligations would become subject to limitations by reason of the Company’s experiencing an “ownership change,” as defined in Section 382 of the Internal Revenue Code of 1986, as amended (the “Tax Code”). A company generally experiences such an ownership change if the percentage of its stock owned by its “5-percent shareholders,” as defined in Section 382 of the Tax Code, increases by more than 50 percentage points over a rolling three-year period. The NOL Rights Agreement is designed to reduce the likelihood that the Company will experience an ownership change under Section 382 of the Tax Code by (i) discouraging any person or group from becoming a 4.9% or greater shareholder and (ii) discouraging any existing 4.9% or greater shareholder from acquiring additional shares of the Company’s stock. The New Rights will not be exercisable until the earlier to occur of (i) the close of business on the tenth business day after a public announcement or filing that a person has, or group of affiliated or associated persons have, become an “Acquiring Person,” which is defined as a person or group of affiliated or associated persons who, at any time after the date of the NOL Rights Agreement, have acquired, or obtained the right to acquire, beneficial ownership of 4.9% or more of the Company’s outstanding shares of Common Stock, subject to certain exceptions or (ii) the close of business on the tenth business day after the commencement of, or announcement of an intention to commence, a tender offer or exchange offer the consummation of which would result in any person becoming an Acquiring Person (the earlier of such dates being called the “Distribution Date”). Certain synthetic interests in securities created by derivative positions, whether or not such interests are considered to be ownership of the underlying Common Stock or are reportable for purposes of Regulation 13D of the Exchange Act, are treated as beneficial ownership of the number of shares of Common Stock equivalent to the economic exposure created by the derivative position, to the extent actual shares of the Common Stock are directly or indirectly held by counterparties to the derivatives contracts. With respect to certificates representing shares of Common Stock outstanding as of the Record Date, until the Distribution Date, the New Rights will be evidenced by such certificates for shares of common stock registered in the names of the holders thereof, and not by separate Rights Certificates, as described further below. With respect to book entry shares of common stock outstanding as of the Record Date, until the Distribution Date, the New Rights will be evidenced by the balances indicated in the book entry account system of the transfer agent for the common stock. Until the earlier of the Distribution Date and the Expiration Date, as described below, the transfer of any shares of common stock outstanding on the Record Date will also constitute the transfer of the New Rights associated with such shares of common stock. As soon as practicable after the Distribution Date, separate certificates evidencing the New Rights (“Right Certificates”) will be mailed to holders of record of the common stock as of the close of business on the Distribution Date, and such Right Certificates alone will evidence the New Rights. F-25 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ The New Rights, which are not exercisable until the Distribution Date, will expire prior to the earliest of (i) May 6, 2022 or such later day as may be established by the Board prior to the expiration of the New Rights, provided that the extension is submitted to the Company’s stockholders for ratification at the next annual meeting of stockholders of the Company succeeding such extension; (ii) the time at which the New Rights are redeemed pursuant to the NOL Rights Agreement; (iii) the time at which the New Rights are exchanged pursuant to the NOL Rights Agreement; (iv) the time at which the New Rights are terminated upon the occurrence of certain transactions; (v) the close of business on the first day after the Company’s 2019 annual meeting of stockholders, if approval by the stockholders of the Company of the NOL Rights Agreement has not been obtained on or prior to the close of business on the first day after the Company’s 2019 annual meeting of stockholders; (vi) the close of business on the effective date of the repeal of Section 382 of the Tax Code, if the Board determines that the NOL Rights Agreement is no longer necessary or desirable for the preservation of Tax Benefits; and (vii) the close of business on the first day of a taxable year of the Company to which the Board determines that no Tax Benefits are available to be carried forward, (the earliest of (i), (ii), (iii), (iv), (v), (vi) and (vii) is referred to as the “Expiration Date”). Each share of Preferred Stock will be entitled, when, as and if declared, to a preferential per share quarterly dividend payment equal to the greater of (i) $1.00 per share or (ii) an amount equal to 1,000 times the aggregate quarterly dividend declared per share of common stock since the immediately preceding quarterly dividend payment date for the common stock (or, with respect to the first quarterly dividend payment on the Common Stock, since the first issuance of the Preferred Stock). Each share of Preferred Stock will entitle the holder thereof to 1,000 votes on all matters submitted to a vote of the stockholders of the Company. In the event of any merger, consolidation or other transaction in which shares of Common Stock are converted or exchanged, each share of Preferred Stock will be entitled to receive 1,000 times the amount received per one share of Common Stock. Offerings of Common Stock and Warrants and At-the-Market Offering Program At-the-Market Offering On June 7, 2018, we entered into a Sales Agreement with H.C. Wainwright & Co., LLC (the “Sales Agreement”) with respect to an at-the-market offering program (the “ATM Program”) pursuant to which we may offer and sell, from time to time at our sole discretion, shares of our Common Stock, having an aggregate offering price of up to $25.0 million. We will set the parameters for sales of the shares, including the number to be sold, the time period during which sales are requested to be made, any limitation on the number that may be sold in one trading day and any minimum price below which sales may not be made. During Fiscal 2021, we issued approximately 2.0 million shares of our Common Stock under the ATM program and the net proceeds to us from the sale of our Common Stock were approximately $15.9 million after deducting commissions paid of approximately $0.5 million. During our fourth fiscal quarter ended March 31, 2021, we issued 1,242,253 shares of our common stock under the ATM program and the net proceeds to us were approximately $14.5 million after deducting commissions paid of approximately $0.5 million. On July 15, 2020, we entered into an amendment to the Sales Agreement, which modified the Sales Agreement to, among other things, amend the termination provisions of the Agreement and amend the maximum amount of shares of our Common Stock that we may offer and sell through or to H.C. Wainwright & Co., LLC from time to time under the ATM Program. On March 19, 2021, we entered into a second amendment to the Sales Agreement, which modified the Sales Agreement to, among other things, reflect the Company’s filing of a new Registration Statement on Form S-3 with the SEC on March 22, 2021 and set the maximum amount of shares of our Common Stock that we may offer and sell through or to H.C. Wainwright at $50 million, subject to certain limitations set forth in the amendment. As of March 31, 2021, approximately $3.9 million remained available for issuance with respect to this ATM Program. F-26 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ Warrants Series A Warrants As of March 31, 2021, there were 271,875 Series A warrants outstanding. 217,875 Series A warrants were issued with an exercise price of $25.50 per share of Common Stock, are exercisable into an aggregate amount of up to 217,875 shares of our common stock, and have an expiration date of October 25, 2021. 54,000 Series A warrants with anti-dilution provisions were issued with an initial exercise price of $13.40 per share of Common Stock, are exercisable into an aggregate amount of up to 54,000 shares of our common stock, and have an expiration date of April 22, 2021. As of March 31, 2021, because of the anti-dilution provisions, these warrants had an adjusted exercise price of $1.15 per share of Common Stock. Goldman Warrant On February 4, 2019, the Company sold to Goldman Sachs & Co. LLC (the “Holder”), a Purchase Warrant for Common Shares (the “Warrant”) pursuant to which the Holder may purchase shares of the Company’s in an aggregate amount of up to 404,634 shares (the “Warrant Shares”). The Warrant was sold to the Holder at a purchase price of $150,000, in a private placement exempt from registration under the Securities Act. The Warrant may be exercised by the Holder at any time after August 4, 2019 at an exercise price equal to $8.86 and will expire on February 4, 2024. The Warrant contains standard adjustment provisions in the event of additional stock issuances below the exercise price of the warrant, stock splits, combinations, rights offerings and similar transactions. The value of the Warrant was $2.3 million, and has been classified as an equity instrument in additional paid in capital in the Company’s condensed consolidated balance sheets. The Company’s Common Stock and warrant transactions during Fiscal 2021 triggered certain anti-dilution provisions in the warrants outstanding. As a result, the Company issued an additional 8,542 warrants and recorded a deemed dividend amounting to $15,000 during Fiscal 2021 in the Company’s consolidated statements of operations. As of March 31, 2021, the Holder may purchase shares of the Company’s Common Stock in an aggregate amount of up to 463,067 shares. On December 9, 2019, the Company entered into an Amendment No. 1 to the Purchase Warrant for Common Shares (the “Amendment No. 1”) with Special Situations Investing Group II, LLC (as successor in interest to Goldman Sachs & Co. LLC) (the “Warrant Holder”) that amended the Warrant. The Amendment No. 1 amended the Warrant to increase the number of Warrant Shares issuable under the Warrant (on a post-reverse split basis) and to decrease the exercise price from $8.86 per share (on a post-reverse split basis) to $3.80 per share (the “Per Share Warrant Exercise Price”). The Amendment No. 1 also amended the Warrant such that the Per Share Anti-Dilution Price is equal to the Per Share Warrant Exercise Price. As a result of the decrease in exercise price, the Company recorded the change in valuation of $0.3 million as additional debt discount with a corresponding entry to additional paid-in capital in the condensed consolidated balance sheets and statements of stockholders equity. On June 16, 2020, the Company entered into an Amendment No. 2 to the Purchase Warrant for Common Shares (“Amendment No. 2”) with the Warrant Holder to increase the number of Warrant Shares (as defined therein) issuable under the Warrant and to decrease the exercise price from $3.80 per share to $2.61 per share (the “Per Share Warrant Exercise Price”). The Company would receive aggregate gross proceeds of $1,186,313 if the outstanding Warrant is exercised at the new Per Share Warrant Exercise Price. Amendment No. 2 also amended the Warrant such that the Per Share Anti-Dilution Price (as defined therein) is equal to the Per Share Warrant Exercise Price as provided in the Amendment No. 2 to the Warrant. As a result of the decrease in exercise price, the Company recorded the change in valuation of $0.1 million as additional debt discount with a corresponding entry to additional paid in capital in the condensed consolidated balance sheets and statements of stockholders equity. All other terms and provisions in the Warrant remain in effect. F-27 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ Goldman “2020 Warrant” On October 1, 2020, the Company entered into an Amendment No. 3 to the Purchase Warrant for Common Shares (the “Amendment No. 3”) with Special Situations Investing Group II, LLC (as successor in interest to Goldman Sachs & Co. LLC) (the “Warrant Holder”) that amends that certain Purchase Warrant for Common Shares originally issued by the Company to Goldman Sachs & Co. LLC, dated February 4, 2019, as amended (the “Original Warrant”). Amendment No. 3 amends the Original Warrant to amend Section 2.1, Section 2.2(c) and Section 18.1 of the Warrant to, among other things, make certain changes necessitated by the issuance of a second Warrant (the “2020 Warrant”) to the Warrant Holder pursuant to the Company’s entry into the Amended & Restated (“A&R”) Note Purchase Agreement (See Note 11 – Term Note Payable). On October 1, 2020, and pursuant to the Company’s entry into the A&R Note Purchase Agreement, the Company sold to the Warrant Holder the 2020 Warrant to purchase up to 291,295 shares (the “2020 Warrant Shares”) of the Company’s Common Stock. The 2020 Warrant was sold to the Warrant Holder at a purchase price of $10,000, in a private placement exempt from registration under the Securities Act. The 2020 Warrant may be exercised by the Warrant Holder at any time after October 1, 2020 at an exercise price equal to $4.76 and will expire on February 4, 2024. The Warrant contains standard adjustment provisions in the event of additional stock issuances below the exercise price of the warrant, stock splits, combinations, rights offerings and similar transactions. The value of the Warrant was $0.8 million, and has been classified as an equity instrument in additional paid in capital in our consolidated balance sheets. The value of the Warrant was determined using the Black-Scholes Option Pricing model using the following assumptions: ​ ​ ​ ​ Year Ended ​ March 31, 2021 Risk-free interest rate 0.2% Contractual term 3 years Expected volatility 81.0% ​ ​ September 2019 Pre-Funded and Series D Warrants On September 4, 2019, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with certain institutional and accredited investors pursuant to which the Company agreed to issue and sell in a registered direct offering (the “Registered Direct Offering”) an aggregate of 580,000 shares of Common Stock, at a negotiated purchase price of $5.00 per share, and pre-funded warrants to purchase up to an aggregate of 440,000 shares of Common Stock at a negotiated purchase price of $5.00 per Pre-Funded Warrant, for aggregate gross proceeds of approximately $5.1 million (580,000 shares of Common Stock plus 440,000 pre-funded warrants at a $5.00 per share purchase price), before deducting placement agent fees and other offering expenses. Net proceeds from the offering were $4.6 million. The offering closed on September 9, 2019. On October 24, 2019, a warrant holder exercised its rights to the warrant agreement to exercise on a cash basis 440,000 pre-funded warrants at an exercise price of $0.001 per share under the warrant agreement. In a concurrent private placement, the Company issued to the purchasers warrants to purchase 765,000 shares of Common Stock, which represent 75% of the number of shares of Common Stock and shares underlying the Pre-Funded Warrants purchased in the Registered Direct Offering, pursuant to the Securities Purchase Agreement. The Common Warrants will be exercisable for shares of Common Stock at an initial exercise price of $6.12 per share for a period of five years, starting on April 2, 2020 and expiring on April 2, 2025. In January 2021, three warrant holders exercised their rights to the warrant agreement to exercise on a cashless basis 690,000 Series D warrants at an exercise price of $6.12 per share under the warrant agreement. In accordance with terms of the warrant agreement, after taking into account the shares withheld to satisfy the cashless exercise option, the Company issued 352,279 shares of Common Stock. As of March 31, 2021, there were 75,000 Series D warrants outstanding. F-28 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ Stock to Vendors On February 17, 2021, the Company and Andretti Autosport 6, Inc. (“AA”), a race team participating in the IndyCar Series sanctioned by INDYCAR, LLC (the “Series”), entered into a Sponsorship Agreement (the “Sponsorship Agreement”) effective January 1, 2021 through December 31, 2021, whereby the Company agreed to sponsor AA’s Car #88 participation in the Series on a full-time basis. In exchange for AA’s participation in the Series, the Company agreed to a sponsorship fee in the total amount of approximately, $1.1 million of which $0.2 million due and payable in cash and $0.9 million in unregistered shares of Common Stock of the Company. During the term of the Sponsorship Agreement and any renewal or extension of the agreement, the Company has agreed that it shall exclusively sponsor the AA Group (as defined therein). The Sponsorship Agreement contains, among other provisions, certain representations and warranties by the parties, intellectual property protection covenants, certain indemnification rights in favor of each party and customary confidentiality provisions. Under the Sponsorship Agreement, 105,933 shares of the Company’s Common Stock were issued as of February 17, 2021. The value of the unregistered shares of Common Stock have been recorded as a prepaid marketing cost and are included in prepaid expenses and other current assets and stockholder’s equity in the consolidated balance sheets as of March 31, 2021. ​ 10. Fair Value Measurements The FASB has established a framework for measuring fair value in generally accepted accounting principles. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are described as follows: Level 1. Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets. Level 2. Inputs to the valuation methodology include: ● Quoted prices for similar assets or liabilities in active markets ● Quoted prices for identical or similar assets or liabilities in inactive markets ● Inputs other than quoted prices that are observable for the asset or liability ● Inputs that are derived principally from or corroborated by observable market data by correlation or other means If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability. Level 3. Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. F-29 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ Basis for Valuation The carrying values reported in the condensed consolidated balance sheets for cash and cash equivalents, accounts receivable and accounts payable approximate their fair values because of the immediate or short-term maturities of these financial instruments. The term note payable has been recorded net of a discount based on the fair value of the associated warrant and capitalized debt issuance costs and as of March 31, 2021 includes both the Three-Year Term Note and the SBA Paycheck Protection Program (“PPP”) Loan as discussed in Note 11–Term Note Payable. The carrying values and estimated fair values of these obligations are as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ As of ​ ​ ​ March 31, 2021 ​ March 31, 2020 ​ ​ ​ Carrying ​ Estimated ​ Carrying ​ Estimated ​ Value Fair Value Value Fair Value Term note payable ​ $ 50,915 $ 51,000 ​ $ 27,963 $ 30,000 ​ PPP loan ​ ​ 1,950 ​ ​ 1,950 ​ ​ — ​ ​ — ​ Total $ 52,865 $ 52,950 $ 27,963 $ 30,000 ​ ​ ​ 11. Term Note Payable Three-Year Term Note On February 4, 2019, the Company entered into a Note Purchase Agreement (as amended, the “Note Purchase Agreement”), by and among the Company, certain subsidiaries of the Company party thereto as guarantors, Goldman Sachs Specialty Lending Holdings, Inc. and any other purchasers party thereto from time to time (collectively, the “Purchaser”). Under the Note Purchase Agreement, the Company sold to the Purchaser $30.0 million aggregate principal amount of senior secured notes (the “Notes”), bearing interest at a rate of 13.0% per annum and payable quarterly on March 31, June 30, September 30 and December 31 of each year until maturity. On December 9, 2019, the Company entered into a Second Amendment (the “Second Amendment”) to the Note Purchase Agreement. Under the Second Amendment, the parties agreed to amend the Note Purchase Agreement to increase the Section 382 Ownership Shift threshold to not exceed 40.0%. On April 24, 2020, the Company entered into a Third Amendment (the “Third Amendment”) to the Note Purchase Agreement. Under the Third Amendment, the parties agreed to amend the Note Purchase Agreement to, among other things, carve out the PPP Loan pursuant to the CARES Act from the negative covenants restricting the Company from incurring certain debt and the related terms and conditions as a result of such PPP Loan. On May 13, 2020, the Company entered into a Fourth Amendment (the “Fourth Amendment”) to the Note Purchase Agreement. Under the Fourth Amendment, the parties agreed to amend certain repayment language in the Note Purchase Agreement with respect to the PPP Loan pursuant to the CARES Act. On June 16, 2020, the Company entered into a Fifth Amendment (the “Fifth Amendment”) to the Note Purchase Agreement. Under the Fifth Amendment, the parties agreed to amend Section 6.21 of the Note Purchase Agreement to increase the Section 382 Ownership Shift (as defined therein) threshold to not exceed 42.0% until April 1, 2021, and 40% thereafter. On October 1, 2020, the Company entered into an Amended & Restated Note Purchase Agreement (the “A&R Note Purchase Agreement”). The A&R Note Purchase Agreement amends and restates that certain Note Purchase Agreement, as amended, dated February 4, 2019, by and among the Company, the Collateral Agent and the other parties party thereto. Under the A&R Note Purchase Agreement, the Company issued $20 million in additional Notes. The Notes bear interest at the Adjusted (London Interbank Offer) LIBO Rate (as defined in the A&R Note Purchase Agreement) plus F-30 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ 8.75% per annum, payable on the last day of each interest period of one-, two-, three- or six-months (but, in the case of a six-month interest period, every three-months). The Notes do not amortize and the entire principal balance is due in a single payment on the maturity date, October 1, 2023. As of March 31, 2021, $51.0 million in borrowings were outstanding under the Notes, which includes the accrual for an exit fee to be paid at maturity or upon pre-payment. Obligations under the A&R Note Purchase Agreement are secured by all of the Company’s assets, including intellectual property and general intangibles. The A&R Note Purchase Agreement contains customary covenants, including, among others, covenants that restrict the Company’s ability to incur debt, grant liens, make certain investments and acquisitions, pay dividends, repurchase equity interests, repay certain debt, amend certain contracts, enter into affiliate transactions and asset sales or make certain equity issuances (including equity issuances that would cause an ownership change within the meaning of Section 382 of the Internal Revenue Code), and covenants that require the Company to, among other things, provide annual, quarterly and monthly financial statements, together with related compliance certificates, maintain its property in good condition, maintain insurance and comply with applicable laws. The financial covenants of the A&R Note Purchase Agreement require the Company not to exceed specified levels of Adjusted EBITDA losses relative to its financial model, beginning with the fiscal quarter ending December 31, 2020. Additionally, the Company shall not permit the Company’s minimum consolidated liquidity, which consists of its cash and cash equivalents, to be less than $9.0 million. Furthermore, the covenants require the Company to expand its Rental Fleet (as defined in the A&R Note Purchase Agreement) by (i) at least 6.25 MW by the 9-month anniversary of the Closing Date, and (ii) at least 12.50 MW by the 18-month anniversary of the Closing Date. As of March 31, 2021, the Company was in compliance with the covenants contained in the A&R Note Purchase Agreement. On May 13, 2021, the Company and the collateral agent, entered into a First Amendment, dated as of May 13, 2021 (the “Amendment”), to the Amended and Restated Note Purchase Agreement, dated as of October 1, 2020. The Amendment amends certain provisions of the A&R Note Purchase Agreement, including to (a) require the Company to expand its Rental Fleet (as defined in the A&R Note Purchase Agreement) by (i) at least 2.00 MW by the 9-month anniversary of the Closing Date (instead of 6.25 MW as provided in the A&R Note Purchase Agreement prior to the Amendment), and (ii) at least 12.50 MW by the 18-month anniversary of the Closing Date (which is unchanged from the covenant set forth in in the A&R Note Purchase Agreement prior to the Amendment), and (b) increase the Company’s minimum consolidated liquidity requirement from $9,000,000 to $12,200,000 for the period from the Amendment Date to March 31, 2022. The Notes have been recorded net of a discount based on the debt issuance costs totaling $0.1 million. Amortization of the debt discount and debt issuance costs was $0.6 million and $1.2 million for Fiscal 2021 and 2020, respectively, based on an effective interest rate, and has been recorded as interest expense in the consolidated statements of operations. Interest expense related to the Notes payable during Fiscal 2021 and 2020 was $5.2 million and includes $0.6 million and $1.2 million in amortization of debt issuance costs, respectively. Loss on extinguishment of debt The Company determined the A&R Note Purchase Agreement should be accounted for as an extinguishment of debt rather than a modification of debt in accordance with ASC 470. Accordingly, the Company recognized a loss on extinguishment of debt of approximately $4.3 million during Fiscal 2021. The loss on extinguishment of debt comprised of the write-off of approximately $1.5 million of unamortized debt issuance costs, a facility fee in the amount of $1.0 million paid to the lender, an accrual of $1.0 million for anticipated exit fees due upon repayment of the principal balance to the lender and the fair value of common stock warrants issued to the warrant holder in connection with Amendment No. 3 to the Purchase Warrant of $0.8 million. F-31 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ SBA Paycheck Protection Program Loan On April 15, 2020, the Company submitted an application to its banking partner Western Alliance Bank, an Arizona corporation (“Western Alliance”) under the Small Business Administration (the “SBA”) Paycheck Protection Program enabled by the Coronavirus Aid, Relief and Economic Security Act of 2020 (the “CARES Act”). Western Alliance entered into a note on April 24, 2020 with the Company and agreed to make available to the Company a loan in the amount of $2,610,200 (the “PPP Loan”). The Company received the full amount of the PPP Loan on April 24, 2020 (the “Initial Disbursement Date) and has used the proceeds to support fixed costs such as payroll costs, rent and utilities in accordance with the relevant terms and conditions of the CARES Act. On May 13, 2020, the Company repaid $660,200 of the PPP Loan in accordance with the Fourth Amendment to the Note Purchase Agreement between the Company and Goldman Sachs Specialty Lending Group, L.P. As of December 31, 2020, approximately $1.9 million in borrowings were outstanding under the PPP Loan. The advance under the Loan bears interest at a rate per annum of 1%. The term of the PPP Loan is two years, ending April 24, 2022. Beginning on the seventh month following the Initial Disbursement Date, the Company is required to pay monthly principal and interest payments, with each installment payment first to pay interest accrued since the Initial Disbursement Date, then to bring principal current. The Company may adjust the payment amount periodically to amortize the principal over the remaining term of the PPP Loan. The PPP Loan may be forgiven partially or fully if the funding received is used for payroll costs, interest on mortgages, rent, and utilities, provided that at least 75% of the forgiven amount has been used for payroll costs. Forgiveness is based on the Company maintaining, or quickly rehiring employees and maintaining applicable salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease. Any forgiveness of the PPP Loan shall be subject to approval of the SBA and will require the Company and Western Alliance to apply to the SBA for such treatment in the future. In February 2021, the Company applied for forgiveness on its PPP Loan and is awaiting review and approval. The Company will account for forgiveness on the PPP Loan in accordance with ASC 470 and record a gain on extinguishment of debt on its condensed consolidated financial statements and related footnote disclosures, provided the forgiveness is approved by the SBA. No assurance can be provided that forgiveness of any portion of the PPP loan will be obtained. 12. Commitments and Contingencies Purchase Commitments As of March 31, 2021, the Company had firm commitments to purchase inventories of approximately $40.1 million through Fiscal 2023. Certain inventory delivery dates and related payments are not scheduled; therefore amounts under these firm purchase commitments will be payable upon the receipt of the related inventories. Lease Commitments In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), requiring lessees to recognize most leases on the balance sheet, while recognition on the statements of operations will remain similar to current lease accounting. The ASU requires lessees to recognize a liability for lease obligations, which represents the discounted obligation to make future lease payments, and a corresponding right-of-use (ROU) asset on the balance sheet. The guidance requires disclosure of key information about leasing arrangements that is intended to give financial statement users the ability to assess the F-32 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ amount, timing and potential uncertainty of cash flows related to leases. The ASU also eliminates real estate-specific provisions and modifies certain aspects of lessor accounting. The Company adopted the new standard on April 1, 2019 using the modified retrospective approach. The Company elected to apply the transition method allowing companies to continue applying the guidance under the lease standard in effect at that time in the comparative periods presented in the consolidated financial statements and recognize a cumulative-effect adjustment to the opening balance of retained earnings on the date of adoption. The Company also elected the “package of practical expedients;” which permits the Company not to reassess under the new standard the Company’s prior conclusions about lease identification, lease classification and initial direct costs; the use of hindsight in order to calculate the lease term of existing assets and the use of the portfolio approach on similar assets; and the Company has elected not to separate lease and non-lease assets. Upon adoption of the new lease standard on April 1, 2019, the Company recorded approximately $5.5 million of right-of-use assets, adjusted for the reclassification of deferred rent and lease incentive of approximately $0.3 million, and $5.8 million of operating lease liabilities, within the Company’s condensed consolidated balance sheets upon adoption. The adoption of this standard did not have an impact on the Company’s condensed consolidated statements of operations or cash flows and did not result in a cumulative catch-up adjustment to the opening balance of retained earnings. Financed leases are not material to the Company’s condensed consolidated financial statements and are therefore not included in the footnote disclosures. In June 2019, the Company entered into a new lease of approximately 9,216 square feet of warehouse space at 16701 Stagg Street in Van Nuys, California. Upon the lease commencement date in July 2019, the Company recorded $0.5 million of right-of-use assets and operating lease liabilities. The Company leases offices and manufacturing facilities under various non-cancelable operating leases expiring at various times through Fiscal 2025. All of the leases require the Company to pay maintenance, insurance and property taxes. The lease agreements for primary office and manufacturing facilities provide for rent escalation over the lease term and renewal options for five-year periods. Lease expense is recognized on a straight-line basis over the term of the lease. The components of lease expense were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ 2021 2020 Operating lease cost ​ $ 1,051 $ 1,532 Supplemental balance sheet information related to the leases was as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ March 31, 2021 ​ March 31, 2020 Operating lease right-of-use assets $ 4,741 ​ $ 5,118 Total operating lease right-of-use assets $ 4,741 ​ $ 5,118 ​ ​ ​ ​ ​ ​ Operating lease liability, current $ 485 ​ $ 443 Operating lease liability, non-current 4,456 ​ 4,941 Total operating lease liabilities $ 4,941 ​ $ 5,384 ​ ​ ​ ​ ​ ​ Weighted average remaining lease life 6.51 years ​ 7.41 years ​ ​ ​ ​ ​ ​ Weighted average discount rate ​ 13.00% ​ ​ 13.00% F-33 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ The Company records its right-of-use assets within other assets (non-current) and its operating lease liabilities within current and long-term portion of notes payable and lease obligations. Supplemental cash flow information related to the leases was as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ 2021 ​ 2020 Cash paid for amounts included in the measurement of lease liabilities ​ ​ Operating cash flows from operating leases $ 1,116 ​ $ 1,609 Other supplemental operating lease information consists of the following: At March 31, 2021, the Company’s minimum commitments under non-cancelable operating leases were as follows (in thousands): ​ ​ ​ ​ ​ ​ Operating Year Ending March 31, Leases 2022 ​ $ 1,099 2023 ​ ​ 1,125 2024 ​ 1,153 2025 ​ 1,077 2026 ​ 1,013 Thereafter ​ ​ 1,989 Total lease payments ​ $ 7,456 Less: imputed interest ​ ​ (2,515) Present value of operating lease liabilities ​ $ 4,941 Other Commitments The Company has agreements with certain of its distributors requiring that, if the Company renders parts obsolete in inventories the distributors own and hold in support of their obligations to serve fielded microturbines, then the Company is required to replace the affected stock at no cost to the distributors. While the Company has never incurred costs or obligations for these types of replacements, it is possible that future changes in the Company’s product technology could result and yield costs to the Company if significant amounts of inventory are held at distributors. As of March 31, 2021, no significant inventories were held at distributors. Legal Matters Capstone Turbine Corporation v. Turbine International, LLC. On February 3, 2020, Capstone Turbine Corporation filed suit against its former distributor, Turbine International, LLC (“Turbine Intl.”), in the Superior Court of California for the County of Los Angeles under the following caption: Capstone Turbine Corporation v. Turbine International, LLC; Case No. 20STCV04372 (“Capstone-Turbine Intl. Litigation”). We have alleged claims against Turbine Intl. for breach of contract and for injunctive relief relating to the parties’ prior distributor relationship, which terminated at the end of March of 2018, and Turbine Intl.’s failure to satisfy its payment obligations under certain financial agreements, namely an accounts receivable agreement and promissory note in favor of Capstone. As remedies for these claims, we are seeking compensatory, consequential, along with injunctive relief and attorney’s fees, interest, and costs. F-34 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ On March 18, 2020, Turbine Intl. filed its answer and cross-claims in the Capstone-Turbine Intl. Litigation. In its cross-claims, Turbine Intl. has asserted claims against Capstone, and individually against Mr. James Crouse, Capstone’s Chief Revenue Officer, for breach of contract under the distributor agreement, accounts receivable agreement and promissory note, fraud, breach of the covenant of good faith and fair dealing, unjust enrichment and constructive trust, negligent misrepresentation, violation of the unfair practices act, violation of racketeer influenced corrupt organizations act, and conspiracy to commit fraud. As remedies for these alleged claims, Turbine Intl. are seeking compensatory, consequential, and punitive damages along with attorney’s fees, interest, and costs. Capstone answered the cross-claims on May 7, 2020. On June 29, 2020, Capstone filed a motion to file a First Amended Complaint that would add, among other things, a claim for enforcement of a personal guaranty signed by an entity related to Turbine Intl., Hispania Petroleum, S.A., and personal claims against the principals of Turbine Intl. and Hispania. That motion was granted on August 19, 2020, and the First Amended Complaint (“FAC”) is now on file. All of the new defendants have been served and have filed answers. A case management conference is set in the matter for June 21, 2021. Discovery is ongoing. We have not recorded any liability as of March 31, 2021, as the matter is too early to estimate. 13. Employee Benefit Plans The Company maintains a defined contribution 401(k) profit-sharing plan in which all employees are eligible to participate. Employees may contribute up to Internal Revenue Service annual limits or, if less, 90% of their eligible compensation. Employees are fully vested in their contributions to the plan. The plan also provides for both Company matching and discretionary contributions, which are determined by the Board of Directors. The Company has been matching 50 cents on the dollar up to 6% of the employee’s contributions since February 2019. Prior to that date, the Company had been matching 50 cents on the dollar up to 4% of the employee’s contributions since October 2006. There were no Company contributions to the plan prior to October 2006. The Company’s match vests 25% a year over four years starting from the employee’s hire date. The Company recorded expense of approximately $0.2 million and $0.3 million for Fiscal 2021 and 2020, respectively. 14. Other Assets The Company was a party to a Development and License Agreement with Carrier Corporation (“Carrier”) regarding the payment of royalties on the sale of each of the Company’s 200 kilowatt (“C200”) microturbines. In 2013, the Company reached its repayment threshold level and the fixed rate royalty was reduced by 50%. On July 25, 2018, the Company and Carrier entered into a Second Amendment to the Development and License Agreement (“Second Amendment”) whereby the Company agreed to pay Carrier approximately $3.0 million to conclude the Company’s current royalty obligation under the Development and License Agreement, dated as of September 4, 2007, as amended (“Development Agreement”), and release the Company from any future royalty payment obligations. The Second Amendment also removed non-compete provisions from the Development Agreement, allowing the Company to design market or sell its C200 System in conjunction with any energy system and compete with Carrier products in the CCHP market. On September 19, 2018, the Company paid in full the negotiated royalty settlement of $3.0 million to Carrier, and as such, there is no further royalty obligation to Carrier. The prepaid royalty of $3.0 million has been recorded under the captions “Prepaid expenses and other current assets” and “Other assets” in the accompanying consolidated balance sheets and will be amortized in the accompanying consolidated statements of operations over a 15-year amortization period through September 2033 using an effective royalty rate. A 15-year amortization period is the minimum expected life cycle of the current generation of product. The effective royalty rate is calculated as the prepaid royalty settlement divided by total projected C200 System units over the 15-year amortization period. On a quarterly basis, the Company will perform a re-forecast of C200 System unit shipments, to determine if an adjustment to the effective royalty rate is necessary. Accordingly, if the Company’s future projections change, its effective royalty rates would change, which could affect the F-35 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ amount and timing of royalty expense the Company recognizes. If impairment exists, then the prepaid royalty asset could be written down to fair value. Prepaid royalties are classified as current assets to the extent that such amounts will be recognized in the Company’s consolidated statements of operations within the next 12 months. The current and long-term portions of prepaid royalties, included in other current assets and other assets, respectively, consisted of (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ March 31, ​ ​ 2021 2020 Other current assets ​ $ 124 ​ $ 124 ​ Other assets ​ ​ 2,613 ​ 2,672 ​ Royalty-related assets ​ $ 2,737 ​ $ 2,796 ​ ​ ​ 15. Subsequent Events The Company has evaluated all subsequent events through the filing date of this Form 10-K with the SEC, to ensure that this filing includes appropriate disclosure of events both recognized in the financial statements as of March 31, 2021, and events which occurred subsequently but were not recognized in the financial statements. On May 13, 2021, the Company and Goldman Sachs Specialty Lending Group, L.P. (as successor in interest to Goldman Sachs Specialty Lending Holdings, Inc.) entered into a First Amendment, dated as of May 13, 2021, to the Amended and Restated Note Purchase Agreement (the “A&R Note Purchase Agreement”), dated as of October 1, 2020 (the “Closing Date”). The Amendment amends certain provisions of the A&R Note Purchase Agreement, including to (a) require the Company to expand its Rental Fleet (as defined in the A&R Note Purchase Agreement) by (i) at least 2.00 MW by the 9-month anniversary of the Closing Date (instead of 6.25 MW as provided in the A&R Note Purchase Agreement prior to the Amendment), and (ii) at least 12.50 MW by the 18-month anniversary of the Closing Date (which is unchanged from the covenant set forth in in the A&R Note Purchase Agreement prior to the Amendment), and (b) increase the Company’s minimum consolidated liquidity requirement from $9,000,000 to $12,200,000 for the period from the Amendment Date to March 31, 2022. ​ F-36 Table of Contents Exhibit Index ​ Exhibit Number ​ Description 3.1 ​ Second Amended and Restated Certificate of Incorporation of Capstone Turbine Corporation(a) 3.2 ​ Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of Capstone Turbine Corporation, filed October 21, 2019(b) 3.3 ​ Certificate of Amendment of the Second Amended and Restated Certificate of Incorporation of Capstone Turbine Corporation, filed April 22, 2021(m) 3.4 ​ Fifth Amended and Restated Bylaws of Capstone Green Energy Corporation effective as of April 22, 2021(m) 3.5 ​ Certificate of Elimination of Series A Junior Participating Preferred Stock of Capstone Turbine Corporation, dated May 9, 2016(d) 3.6 ​ Certificate of Designations of Series B Junior Participating Preferred Stock of Capstone Turbine Corporation(d) 4.1 ​ Specimen stock certificate(e) 4.2 ​ NOL Rights Agreement, dated May 6, 2019, between Capstone Turbine Corporation and Broadridge Financial Solutions, Inc. successor-in-interest to Computershare Inc.(f) 4.3 ​ Form of Series A Warrant issued to investors in the April 2016 public offering(g) 4.4 ​ Form of Pre-Funded Series B Warrant issued to investors in the April 2016 public offering(g) 4.5 ​ Form of Series A Warrant issued to investors in the October 2016 public offering(h) 4.6 ​ Form of Pre-Funded Series B Warrant issued to investors in the October 2016 public offering(h) 4.7 ​ Purchase Warrant for Common Shares issued in favor of Goldman Sachs & Co. LLC, dated February 4, 2019 (i) 4.8 ​ Rights Agreement by and between Capstone Turbine Corporation and Broadridge Financial Solutions, Inc., dated May 6, 2019 (f) 4.9 ​ Form of Prefunded Series C Warrant issued to investors in the September 2019 public offering (j) 4.10 ​ Form of Series D Warrant issued to investors in the September 2019 public offering (j) 4.11 ​ Amendment No. 1 to the Purchase Warrant for Common Shares issued in favor of Special Situations Investing Group II, LLC (a successor in interest to Goldman Sachs & Co. LLC), dated December 9, 2019 (k) 4.12 ​ Note between Western Alliance Bank and Capstone Turbine Corporation, effective as of April 24, 2020 (l) 4.13 ​ Amended and Restated Note Purchase Agreement dated October 1, 2020 by and among Capstone Turbine Corporation, certain subsidiaries of the company and Goldman Sachs Specialty Lending Group, L.P. (as successor in interest to Goldman Sachs Specialty Lending Holdings, Inc.) (gg) 4.14 ​ First Amendment to the Amended and Restated Note Purchase Agreement, dated as of May 13, 2021, by and among Capstone Green Energy Corporation, certain subsidiaries of the Company and Goldman Sachs Specialty Lending Group, L.P. (hh) 4.15 ​ Amendment No. 2 to the Purchase Warrant for Common Shares issued in favor of Special Situations Investing Group II, LLC (as successor in interest to Goldman Sachs & Co. LLC), dated June 16, 2020 (n) 4.16 ​ Amendment No. 3 to the Purchase Warrant for Common Shares issued in favor of Special Situations Investing Group II, LLC (as success in interest to Goldman Sachs & Co. LLC), dated October 1, 2020 and Purchase Warrant for Common Shares issued in favor of Special Situations Investing Group II, LLC (as successor in interest to Goldman Sachs & Co. LLC), dated October 1, 2020 (gg) 4.17 ​ Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934, as Amended (kk) ​ Table of Contents ​ Exhibit Number ​ Description 10.1 ​ Lease between Capstone Turbine Corporation and Prologis, L.P., formerly known as AMB Property, L.P., dated September 25, 2000, as amended, for leased premises at 16640 Stagg Street, Van Nuys, California(o) 10.2 ​ Fourth Amendment to Lease, dated June 7, 2017, between Capstone Turbine Corporation and Prologis, L.P., for leased premises at 16640 Stagg Street, Van Nuys, California(p) 10.3 * Capstone Turbine Corporation 2017 Equity Incentive Plan effective August 30, 2017(q) 10.4 * Capstone Turbine Corporation Employee Stock Purchase Plan effective August 30, 2017(r) 10.5 * Amended and Restated Capstone Turbine Corporation Change of Control Severance Plan(s) 10.6 ​ Development and License Agreement between Capstone Turbine Corporation and Carrier Corporation, successor-in-interest to UTC Power Corporation, dated September 4, 2007(t) 10.7 ​ Promissory Note between Capstone Turbine Corporation and Turbine International, LLC, dated October 13, 2017(u) 10.8 ​ Guaranty between Capstone Turbine Corporation and Hispania Petroleum, S.A., dated October 13, 2017(u) 10.9 ​ First Amendment to the Accounts Receivable Assignment Agreement and Promissory Note between Capstone Turbine Corporation and Turbine International, LLC, dated June 5, 2018 (v) 10.10 * Capstone Turbine Corporation Amended and Restated Executive Performance Incentive Plan as amended and restated effective August 29, 2013(w) 10.11 * Amendment to the Capstone Turbine Corporation Amended and Restated Executive Performance Incentive Plan, dated June 9, 2014(x) 10.12 * Form of Inducement Stock Option Agreement(y) 10.13 * Form of Inducement Restricted Stock Unit Agreement(y) 10.14 * Amended and Restated Change in Control Severance Agreement with Darren R. Jamison, dated June 14, 2012(z) 10.15 * First Amendment to Amended and Restated Change in Control Severance Agreement with Darren R. Jamison, effective June 14, 2015(aa) 10.16 * Capstone Turbine Corporation Severance Pay Plan as amended and restated effective February 1, 2010(aa) 10.17 ​ Form of Securities Purchase Agreement used in the September 2019 offering (j) 10.18 ​ At the Market Offering Agreement, dated June 7, 2018, between Capstone and H.C. Wainwright & Co., LLC (bb) 10.19 ​ Second Amendment to the Development and License Agreement, dated July 25, 2018, between Capstone Turbine Corporation and Carrier Corporation (cc) 10.20 * Capstone Turbine Corporation 2017 Equity Incentive Plan, as amended (dd) 10.21 * Form of Change in Control Agreement (ee) 10.22 * Form of Restricted Stock Unit Award Agreement for Company Employees under the Capstone Turbine Corporation 2017 Stock Option and Incentive Plan –Four Year Vesting Schedule (kk) 10.23 * Form of Restricted Stock Unit Award Agreement for Company Employees under the Capstone Turbine Corporation 2017 Stock Option and Incentive Plan –Three Year Vesting Schedule (kk) 10.24 * Form of Restricted Stock Unit Award Agreement for Company Employees under the Capstone Turbine Corporation 2017 Stock Option and Incentive Plan –Two Year Vesting Schedule (kk) 10.25 * Form of Performance Restricted Stock Unit Award Agreement for Company Employees under the Capstone Turbine Corporation 2017 Stock Option and Incentive Plan (kk) 10.26 ​ Amendment, dated July 15, 2020, to At The Market Offering Agreement, dated June 7, 2018, between Capstone Turbine Corporation and H.C. Wainwright & Co., LLC (ii) ​ Table of Contents ​ Exhibit Number ​ Description 10.27 ​ Amendment, dated March 19, 2021, to At the Market Offering Agreement, dated June 7, 2018, between Capstone Turbine Corporation and H.C. Wainwright & Co., LLC (jj) 14.1 ​ Code of Business Conduct(ff) 14.2 ​ Code of Ethics for Senior Financial Officers and Chief Executive Officer (ff) 21 ​ Subsidiary List 23 ​ Consent of Marcum LLP 24 ​ Power of Attorney (included on the signature page of this Form 10-K) 31.1 ​ Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes­–Oxley Act of 2002 31.2 ​ Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes­–Oxley Act of 2002 32 ​ Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes–Oxley Act of 2002 101.INS ​ XBRL Instance Document 101.SCH ​ XBRL Schema Document 101.CAL ​ XBRL Calculation Linkbase Document 101.LAB ​ XBRL Label Linkbase Document 101.PRE ​ XBRL Presentation Linkbase Document 101.DEF ​ XBRL Definition Linkbase Document *Management contract or compensatory plan or arrangement (a) Incorporated by reference to Capstone Turbine Corporation’s Registration Statement on Form S-1/A, dated May 8, 2000 (File No. 333-33024). (b) Incorporated by reference to Capstone Turbine Corporation’s Current Report on Form 8-K, filed on October 21, 2019 (File No. 001-15957). (c) Incorporated by reference to Capstone Turbine Corporation’s Current Report on Form 8-K, filed September 1, 2017 (File No. 001-15957). (d) Incorporated by reference to Capstone Turbine Corporation’s Current Report on Form 8-K, filed on May 9, 2016 (File No. 001-15957). (e) Incorporated by reference to Capstone Turbine Corporation’s Registration Statement on Form S-1/A, dated June 21, 2000 (File No. 333-33024). (f) Incorporated by reference to Capstone Turbine Corporation’s Current Report on Form 8-K, filed on May 6, 2019 (File No. 001-15957). (g) Incorporated by reference to Capstone Turbine Corporation’s Current Report on Form 8-K, filed on April 21, 2016 (File No. 001-15957). (h) Incorporated by reference to Capstone Turbine Corporation’s Current Report on Form 8-K, filed on October 18, 2016 (File No. 001-15957). (i) Incorporated by reference to Capstone Turbine Corporation’s Current Report on Form 8-K, filed on February 5, 2019 (File No. 001-15957). (j) Incorporated by reference to Capstone Turbine Corporation’s Current Report on Form 8-K, filed on September 4, 2019 (File No. 001-15957). ​ Table of Contents (k) Incorporated by reference to Capstone Turbine Corporation’s Current Report on Form 8-K, filed on December 9, 2019 (File No. 001-15957). (l) Incorporated by reference to Capstone Turbine Corporation’s Current Report on Form 8-K, filed on April 29, 2020 (File No. 001-15957). (m) Incorporated by reference to Capstone Turbine Corporation’s Current Report on Form 8-K, filed on April 22, 2021 (File No. 001-15957). (n) Incorporated by reference to Capstone Turbine Corporation’s Current Report on Form 8-K, filed on June 17, 2020 (File No. 001-15957). (o) Incorporated by reference to Capstone Turbine Corporation’s Annual Report on Form 10-K for the fiscal year ended March 31, 2013 (File No. 001-15957). (p) Incorporated by reference to Capstone Turbine Corporation’s Annual Report on Form 10-K for the fiscal year ended on March 31, 2017 (File No. 001-15957). (q) Incorporated by reference to Appendix A to Capstone Turbine Corporation’s Definitive Proxy Statement, filed on July 21, 2017 (File No. 001-15957). (r) Incorporated by reference to Appendix B to Capstone Turbine Corporation’s Definitive Proxy Statement, filed on July 21, 2017 (File No. 001-15957). (s) Incorporated by reference to Capstone Turbine Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2004 (File No. 001-15957). (t) Incorporated by reference to Capstone Turbine Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2007 (File No. 001-15957). (u) Incorporated by reference to Capstone Turbine Corporation’s Current Report on Form 8-K, filed on October 13, 2017 (File No. 001-15957). (v) Incorporated by reference to Capstone Turbine Corporation’s Annual Report on Form 10-K, filed on June 7, 2018 (File No. 001-15957) (w) Incorporated by reference to Capstone Turbine Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2013 (File No. 001-15957). (x) Incorporated by reference to Appendix B to Capstone Turbine Corporation’s Definitive Proxy Statement, filed on July 16, 2014 (File No. 001-15957). (y) Incorporated by reference to Capstone Turbine Corporation’s Registration Statement on Form S-8, dated June 17, 2009 (File No. 333-160049). (z) Incorporated by reference to Capstone Turbine Corporation’s Annual Report on Form 10-K for the fiscal year ended on March 31, 2012 (File No. 001-15957). (aa) Incorporated by reference to Capstone Turbine Corporation’s Annual Report on Form 10-K for the fiscal year ended on March 31, 2015 (File No. 001-15957). (bb) Incorporated by reference to Capstone Turbine Corporation’s Current Report on Form 8-K, filed on June 7, 2018 (File No. 001-15957). (cc) Incorporated by reference to Capstone Turbine Corporation’s Current Report on Form 8-K, filed on July 26, 2018 (File No. 001-15957). ​ Table of Contents (dd) Incorporated by reference to Appendix A to Capstone Turbine Corporation’s Definitive Proxy Statement, filed July 13, 2018 (File No. 001-15957). (ee) Incorporated by reference to Capstone Turbine Corporation’s Current Report on Form 8-K filed on June 5, 2018 (File No. 001-15957). (ff) Incorporated by reference to Capstone Turbine Corporation’s Annual Report on Form 10-K for the fiscal year ended March 31, 2014 (File No. 001-15957). (gg) Incorporated by reference to Capstone Turbine Corporation’s Current Report on Form 8-K filed on October 5, 2020 (File No. 001-15957). (hh) Incorporated by reference to Capstone Turbine Corporation’s Current Report on Form 8-K filed on May 14, 2021 (File No. 001-15957). (ii) Incorporated by reference to Capstone Turbine Corporation’s Current Report on Form 8-K filed on July 15, 2020 (File No. 001-15957). (jj) Incorporated by reference to Capstone Turbine Corporation’s Current Report on Form 8-K filed on March 22, 2021 (File No. 001-15957). (kk) Incorporated by reference to Capstone Turbine Corporation’s Annual Report on Form 10-K for the fiscal year ended March 31, 2020 (File No. 001-15957). ​ ​ ​ Table of Contents SIGNATURES Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ​ ​ ​ ​ ​ ​ ​ CAPSTONE GREEN ENERGY CORPORATION ​ ​ ​ ​ ​ Date: June 11, 2021 ​ By: ​ /s/ Frederick S. Hencken III ​ ​ Frederick S. Hencken III Chief Financial Officer (Principal Financial Officer) ​ KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned officers and directors of Capstone Green Energy Corporation, hereby severally constitute Darren R. Jamison and Frederick S. Hencken III, and each of them singly, our true and lawful attorneys with full power to them, and each of them singly, to sign for us and in our names in the capacities indicated below, this Annual Report on Form 10-K and any and all amendments to said Form 10-K, and generally to do all such things in our names and in our capacities as officers and directors to enable Capstone Green Energy Corporation to comply with the provisions of the Securities Exchange Act of 1934, and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorneys, or any of them, to said Form 10-K and any and all amendments thereto. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Signature Title Date ​ ​ ​ /s/ Darren R. Jamison ​ President, Chief Executive Officer and Director (Principal Executive Officer) ​ June 11, 2021 Darren R. Jamison ​ ​ ​ ​ ​ /s/ Frederick S. Hencken III ​ Chief Financial Officer (Principal Financial Officer) ​ June 11, 2021 Frederick S. Hencken III ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Neshan N. Tavitian ​ Chief Accounting Officer (Principal Accounting Officer) ​ June 11, 2021 Neshan N. Tavitian ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Robert C. Flexon ​ Chair of the Board of Directors ​ June 11, 2021 Robert C. Flexon ​ ​ ​ ​ ​ /s/ Paul DeWeese ​ Director ​ June 11, 2021 Paul DeWeese ​ ​ ​ ​ ​ /s/ Holly A. Van Deursen ​ Director ​ June 11, 2021 Holly A. Van Deursen ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Yon Y. Jorden ​ Director ​ June 11, 2021 Yon Y. Jorden ​ ​ ​ ​ ​ /s/ Robert F. Powelson ​ Director ​ June 11, 2021 Robert F. Powelson ​ ​ ​ ​ ​ /s/ Denise Wilson ​ Director ​ June 11, 2021 Denise Wilson ​ ​ ​ ​ ​ ​ ​