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, 2023, 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 and pursuant to Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, our CEO and CFO have concluded that, as of March 31, 2023, due to the material weaknesses in our internal control over financial reporting described below, our disclosure controls and procedures were not effective. Notwithstanding the identified material weaknesses, management believes the consolidated financial statements included in this Annual Report on Form 10-K fairly present, in all material respects, our consolidated financial position and consolidated results from operations and cash flows for the fiscal years ended March 31, 2023 and March 31, 2022, and our financial condition as of each such date and have been prepared in conformity with U.S. GAAP. 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 Rules 13a-15(f) and 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 U.S. 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 U.S. GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and 66 Table of Contents ● 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. 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 our internal control over financial reporting was not effective as of March 31, 2023 because of the material weaknesses described below. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual and interim financial statements will not be detected or prevented on a timely basis. The following material weaknesses were identified: ● There was an inappropriate tone at the top established by certain former senior executives. For example, certain former senior executives delayed shipments of parts under the FPP service contracts, which because of our incorrect accounting for our FPP program resulted in delayed recording of the associated expense and liabilities on the Company’s financial statements. These business practices were also not properly communicated to our Board, Audit Committee, or independent registered public accounting firm. ● We lacked sufficient qualified professionals with an appropriate level of accounting and internal control knowledge, training and experience to (i) appropriately analyze, record and disclose accounting matters timely and accurately and (ii) design and maintain effective internal control over financial reporting. ● We did not perform a sufficient review of accounting policies to ensure ongoing adherence with U.S. GAAP. ● We did not design and maintain effective controls over financial reporting for systems, products, parts, and accessories sales subject to bill and hold arrangements with customers. ● We did not design and maintain effective controls over financial reporting related to the proper accounting, presentation and disclosure for FPP service contracts, including the cost recognition of parts and labor associated with FPP service contracts. Management’s Remediation Plan Management, with the direction and oversight of the Audit Committee and the Board of Directors, is engaged in remediation actions to address the material weaknesses described above. The Company’s remediation actions include, but are not limited to the following: ● The Company has reinforced and will continue to reinforce its tone at the top through enhanced communication of the Company’s values and expected business conduct to their personnel directly from the Company’s senior leadership. ● Management is enhancing our quarterly disclosure committee meetings to require additional communication of business activities to the appropriate finance and accounting personnel and to our Board and Audit Committee as required. ● The Company has hired and continues to hire additional accounting and compliance personnel as is necessary to maintain an effective control environment commensurate with our financial reporting requirements. Management will continue to assess the composition of its resource needs, both internal and external, which may include hiring additional accounting and compliance resources, including engaging in third-party advisors when necessary. ● Management is implementing a formal process to periodically review and update accounting policies. ● Management has reviewed and refined the Company’s current accounting memorandums related to product, parts, and accessories sales and FPP service contracts to address the proper financial reporting considerations. Additionally, management is enhancing the design of and implementing controls over financial reporting for (i) systems, products, parts, and accessories sales subject to bill and hold arrangements with customers and (ii) FPP service contracts, including the cost recognition of parts and labor associated with FPP service contracts. We believe these measures will remediate the material weaknesses, but management is assessing the need for any additional steps to remediate the underlying causes that gave rise to these weaknesses. The material weaknesses will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. There is no assurance that additional remediation steps will not be necessary. 67 Table of Contents Inherent Limitations of the Effectiveness of Internal Control Management recognizes that a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of its inherent limitations, internal control over financial reporting may not prevent or detect errors or misstatements in our consolidated financial statements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate. Changes in Internal Control Over Financial Reporting Except as described above, there were no changes in our internal control over financial reporting during the most recent fiscal quarter that were identified in connection with management’s evaluation required by paragraph (d) of Rules 13d-15 and 15d-15 under the Exchange Act that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information. Not applicable. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not applicable. PART III Item 10. Directors, Executive Officers and Corporate Governance. Board of Directors; Leadership Structure Set forth below is certain information regarding the directors of the Company. The ages of and biographical information regarding the directors is based on information furnished to the Company by each director and is as of May 31, 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Directors Age Director Since ​ Board Class ​ Audit Committee ​ Compensation & Human Capital Committee ​ Governance & Sustainability Committee Robert C. Flexon(1) ​ 66 ​ 2018 ​ II ​ ​ ​ ​ ​ ​ Vince J. Canino(2) 61 2024 ​ III ​ ​ ​ ​ ​ ​ Yon Y. Jorden 69 2017 ​ I ​ X ​ X ​ ​ Robert F. Powelson 55 2019 ​ II ​ ​ ​ ​ X ​ X Denise M. Wilson(3) 65 2019 ​ II ​ ​ ​ X ​ X Ping Fu 66 2021 ​ I ​ X ​ ​ ​ X John P. Miller(4) 66 2024 ​ III ​ X ​ ​ ​ X (1) Chair of the Board (2) Mr. Canino joined the Board on March 11, 2024 in connection with his appointment as President and Chief Executive Officer (3) Lead Independent Director (4) Mr. Miller joined the Board on February 26, 2024 The principal occupations and business experience for at least the last five years for each director are set forth below. The biographies of each of the directors below contain information regarding the person’s service as a director, business experience, director positions held currently or at any time during the last five years, information regarding the experiences, qualifications, attributes or skills that caused the Governance and Sustainability Committee and the Board to determine that the person should serve as a director. 68 Table of Contents Robert C. Flexon. Mr. Flexon has been a director since April 2018 and has served as Chair since January 2021. Mr. Flexon served as our Executive Chairman from August 9, 2023 until March 31, 2024 and as our Interim President and Chief Executive Officer from August 22, 2023 until March 10, 2024. Mr. Flexon has served as a director of PG&E Corporation (NYSE: PCG) since June 2020 and is currently the chair of the board. He has also served as a director for Charah Solutions, Inc. (NYSE: CHRA) from June 2018 to July 2023 and of the Electric Reliability Council of Texas (ERCOT) since 2021. Mr. Flexon was President and Chief Executive Officer and a director of Dynegy Inc. (NYSE: DYN), a power-generating company that owns and operates a number of natural gas-fueled or coal-fueled power stations in the U.S, from July 2011 to April 2018. Prior to joining Dynegy, Mr. Flexon served as the Chief Financial Officer of UGI Corporation (NYSE: UGI), a distributor and marketer of energy products and related services from February 2011 to July 2011. Mr. Flexon was the Chief Executive Officer of Foster Wheeler AG (Nasdaq: FWLT) from June to October 2010 and the President and Chief Executive Officer of Foster Wheeler USA from November 2009 to May 2010. Prior to joining Foster Wheeler, Mr. Flexon was Executive Vice President and Chief Financial Officer of NRG Energy, Inc. (NYSE: NRG) from February to November 2009. Mr. Flexon previously served as Executive Vice President and Chief Operating Officer of NRG Energy from March 2008 to February 2009 and as its Executive Vice President and Chief Financial Officer from 2004 to 2008. Prior to joining NRG Energy, Mr. Flexon held executive positions with Hercules, Inc. and various key positions, including General Auditor, with Atlantic Richfield Company. In addition, Mr. Flexon was a CPA with the former Coopers & Lybrand from 1980 to 1987. Mr. Flexon served on the public board of directors of Foster Wheeler from 2006 until 2009 and from May to October 2010, of Westmoreland Coal Company from 2017 to 2019 and of TransAlta Corp. from 2019 to 2020. He served on the Board of Directors for Genesys Works-Houston, an organization that transforms the lives of disadvantaged high school students through meaningful work experience, from 2016 to 2021. He also served on the board of directors of Baker Ripley, a Texas non-profit organization that connects low-income people to opportunities, from 2014 to 2016. Mr. Flexon holds a Bachelor of Science degree in Accounting from Villanova University. He became a Certified Public Accountant (inactive) in the State of Pennsylvania. Among his other skills and expertise, Mr. Flexon brings to the Board over a decade of experience in accounting and financial matters and has a breadth of executive management experience. In his years as an energy industry executive, he has developed a deep comprehension of wholesale power generation markets and customers. Vince J. Canino . See “Executive Officers” for information pertaining to Mr. Canino. Yon Y. Jorden . Ms. Jorden has been a director since April 2017. Ms. Jorden has also served as director and audit committee and nominating & governance committee member of Cohu, Inc. (Nasdaq: COHU) since May 2021, which is a global leader in back-end semiconductor equipment and services, delivering leading-edge solutions for the manufacturing of semiconductors. She has also served as director and audit committee member of Alignment Healthcare, Inc. (Nasdaq: ALHC), which is a tech-enabled Medicare Advantage plan company, since January 2022. Additionally, she serves as a director and finance committee member of Methodist Health System, a not-for-profit Texas-based hospital system since 2008. Prior to her current roles, Ms. Jorden served as director, chairperson of the compensation committee, a member of the audit committee and a member of the governance and nominating committee, the latter of which she previously served on as chairperson, for Maxwell Technologies (Nasdaq: MXWL), a leader in development and manufacturing of energy storage and power delivery solutions from 2008 to 2017. In addition, she also served as director and chairperson of the audit committee of Magnatek, Inc. (Nasdaq: MAG), a manufacturer of digital power control systems, U.S. Oncology, a privately-held oncology services company, and BioScrip, Inc. (Nasdaq: BIOS), a national provider of infusion and home care management solutions. During her business career, Ms. Jorden has served as chief financial officer of four publicly traded companies, including as Executive Vice President and Chief Financial Officer of AdvancePCS (Nasdaq: ADVP), a pharmacy benefits management company, from 2002 to 2004. Previously she was chief financial officer of Informix, a Nasdaq-listed technology company, Oxford Health Plans, a Nasdaq-listed provider of managed health care services, and WellPoint, Inc., a NYSE-listed managed care company. Ms. Jorden received her Bachelor of Science degree in Accounting from the California State University, Los Angeles. Earlier in her career, she was a senior auditor with Arthur Andersen & Co., where she became a Certified Public Accountant (inactive) in the State of California. Among her other skills and expertise, Ms. Jorden brings to the Board decades of extensive experience as both a chief financial officer as well as a board member in all areas of corporate governance and finance, including mergers and acquisitions, structuring IPOs, restructurings, and managing public debt and equity offerings. Ms. Jorden is a board 69 Table of Contents leadership fellow of the National Association of Corporate Directors, demonstrating her commitment and leadership as a board member. Robert F. Powelson . Mr. Powelson has been a director since June 2019. Mr. Powelson has served as the President and Chief Executive Officer of the National Association of Water Companies (“NAWC”) since June 2018. Prior to joining NAWC, Mr. Powelson was nominated to the Federal Energy Regulatory Commissioner (“FERC”) by President Donald J. Trump in May 2017, confirmed by the U.S. Senate in August 2017, and served as a member of FERC until August 2018. Prior to his appointment to FERC, Mr. Powelson served on the Pennsylvania Public Utility Commission (“PUC”) from June 2008 to August 2017, and served as the PUC’s chairman from February 2011 to May 2015. Mr. Powelson also served on Pennsylvania’s Marcellus Shale Advisory Commission from March 2011 to July 2011. Prior to joining the PUC, Mr. Powelson served as president of the Chester County Chamber of Business & Industry from February 1994 to July 2008. Mr. Powelson was also a past president of the National Association of Regulatory Utility Commissioners (“NARUC”), where he also was a member of the board of directors from March 2011 to July 2017. Mr. Powelson served as chairman of the NARUC Committee on Water and Power and represented the Water Committee on NARUC’s Task Force on Climate Policy. Mr. Powelson holds a Masters of Governmental Administration from the University of Pennsylvania and a Bachelor of Arts from St. Joseph’s University. Among his other skills and expertise, Mr. Powelson brings to the Board extensive expertise in public utilities, the regulatory environment and public policy. Denise M. Wilson . Ms. Wilson has been a director since November 2019. Ms. Wilson served as Executive Vice President and President, Alternative Energy Businesses for NRG Energy, Inc. (NYSE: NRG), an independent power company with generation, energy retail business and cleantech ventures, from July 2011 through January 2016. Ms. Wilson served as Executive Vice President and Chief Administrative Officer of NRG from September 2008 through July 2011. Prior to September 2008, Ms. Wilson served as Executive Vice President, Human Resources for Nash-Finch Company, a national food distributor, and other various senior roles at NRG from 2000 through 2007. Prior to joining NRG, Ms. Wilson held various key positions as Vice President Human Resources with Metris Companies Inc. and Director, Human Resources with General Electric ITS. Ms. Wilson holds a Masters in Industrial Relations from the University of Minnesota. Ms. Wilson brings to the Board extensive experience as President of a Fortune 500 company that generates electricity and provides energy solutions and natural gas to more than 3.7 million residential, small business, and commercial and industrial customers. Ping Fu . Ms. Fu has been a director since August 2021. She currently serves on the board of directors of Live Nation Entertainment (NYSE: LYV), the world’s largest live entertainment Company, as well as the boards of Long Now Foundation and Burning Man Project. In 1996, Ms. Fu co-founded Geomagic, a leader in 3D imaging and 3D printing technologies that has fundamentally changed the way products are designed and manufactured around the world, and she served as its CEO until 2013. Following the acquisition by 3D Systems (NYSE: DDD) of Geomagic in 2013, Ms. Fu served as Chief Strategy Officer and Chief Entrepreneur Officer at 3D Systems until 2016. She was also part of the team that created the NCSA Mosaic software and HTTP server software which were key in the early development of the Internet. Ms. Fu has received numerous awards for her leadership, including the Outstanding American by Choice award from the U.S. Citizenship and Immigration Services, the Ernst & Young Entrepreneur of the Year award and Inc. Magazine’s Entrepreneur of the Year award. Ms. Fu’s book, Bend Not Break: A Life in Two Worlds, was on the New York Times bestseller list. Ms. Fu brings to the Board extensive experience in senior executive and leadership positions, global business experience and expertise in technology trends, social change and policy making. Mr. Miller Mr. Miller has over 40 years of broad-based executive management experience in the manufacturing, distribution and transportation industries and has served in senior finance and leadership roles at public and private companies across a range of industry categories. He has served on the board of directors of Spruce Power Holding Corporation, an owner and operator of distributed solar energy assets, since 2022. From 2017 to 2021, he served as Chief Executive Officer of Power Solutions International, Inc., a publicly traded company focusing on the design, engineering and manufacture of a broad range of advanced, emission-certified engines and power systems. From 2008 until 2016, Mr. Miller served in operational and financial management positions of increasing responsibility at Navistar International 70 Table of Contents Corporation, a global vehicle manufacturer and solutions provider, including as senior vice president of operations and corporate finance. Prior to such roles, he served in the role of Chief Financial Officer of Laidlaw International, Inc., a provider of public transportation services, Chicago Metallic Corporation, a global manufacturer of suspended ceiling and metal products, Fleetpride, Inc., a distributor of heavy duty truck parts, and Peapod, an online grocery delivery company. Mr. Miller received his Master of Business Administration from the University of Michigan and a Bachelor of Arts degree in economics from DePauw University. Mr. Miller brings to the Board extensive industry experience and expertise in financial management and strategic planning. Other than Mr. Flexon and Mr. Juric in respect of the Chapter 11 Cases, no director or officer has been involved in any legal proceedings required to be disclosed under Item 401(f) of Regulation SK. The Board met ten (10) times during the fiscal year ended March 31, 2023 (the “2023 Fiscal Year” or “Fiscal 2023”). The Board has established an Audit Committee (the “Audit Committee”), a Compensation and Human Capital Committee (the “Compensation and Human Capital Committee”), and a Governance and Sustainability Committee (the “Governance and Sustainability Committee”). During Fiscal 2023, each director attended at least 75% of the aggregate of (1) the total number of meetings of the Board (held during the period for which he or she was a director) and (2) the total number of meetings of all committees of the Board of the Company on which the director served (during the periods that he or she served). The Company strongly encourages each member of the Board to attend each annual meeting of stockholders. All of the directors serving on the Board at the time attended the 2022 Annual Meeting. The Company’s independent directors met in executive session, without members of the Company’s management present, at all of the regularly scheduled meetings of the Board in Fiscal 2023. Risk Oversight The Board oversees an enterprise-wide approach to risk management designed to support the achievement of organizational objectives, including strategic objectives, to improve long-term organizational performance and to enhance stockholder value. A fundamental part of risk management is not only understanding the risks the Company faces and what steps management is taking to manage those risks, but also understanding what level of risk is appropriate for the Company. The involvement of the full Board in setting the Company’s business strategy is a key part of its assessment of management’s appetite for risk and also a determination of what constitutes an appropriate level of risk for the Company. The full Board participates in an annual enterprise risk management assessment. While the Board has the ultimate oversight responsibility for the risk management process, various committees of the Board also have responsibility for risk management. In particular, the Audit Committee focuses on financial risk, including internal controls, and receives an annual risk assessment report from the Company’s internal auditors. In setting compensation, the Compensation and Human Capital Committee strives to create incentives that encourage a level of risk-taking behavior consistent with the Company’s business strategy and is responsible for oversight with respect to compensation and succession planning risks. Audit Committee The Audit Committee currently consists of Ms. Jorden (Chair), Ms. Fu and Mr. Miller. The Audit Committee consisted of Ms. Jorden (Chair), Mr. Flexon, and Ms. Fu as of March 31, 2023. Following his appointment as Executive Chairman in August 2023, Mr. Flexon resigned from the Audit Committee. Upon his appointment to the Board on February 26, 2024, Mr. Miller was appointed to the Audit Committee. The Audit committee is constituted to comply with Section 3(a)(58)(A) of the Exchange Act and is responsible, among other items, for: (i) overseeing the Company’s accounting and financial reporting practices; (ii) annually retaining the independent public accountants as auditors of the financial statements and accounts of the Company; (iii) monitoring the scope of audits made by the independent public accountants and the audit reports submitted by the independent public accountants; (iv) overseeing the systems of internal control which management and the Board have established; and (v) discussing with management and the independent and internal auditors the Company’s major financial risk exposure and the steps taken to monitor and control such exposure. In addition, the Audit Committee reviews and approves all related party transactions. The Audit Committee operates under a written charter adopted by the Board, a copy of which is available on the Company’s website at www.capstonegreenenergy.com. 71 Table of Contents Pursuant to its written charter, the Audit Committee reviews its charter on an annual basis for compliance, best practices and any other needed updates or changes. During Fiscal 2023, the Audit Committee held six meetings. The Board has determined that Ms. Jorden is an “audit committee financial expert,” as that term is defined by applicable rules adopted by the SEC. The Board has further determined that each member of the Audit Committee is independent and financially literate as defined by Nasdaq and SEC rules, as applicable. Compensation and Human Capital Committee The Compensation and Human Capital Committee currently consists of Ms. Wilson (Chair), Mr. Powelson, and Ms. Jorden, which was also the composition as of March 31, 2023. The Compensation and Human Capital Committee is comprised solely of directors who qualify as independent for purposes of Nasdaq rules in conformance with the Compensation and Human Capital Committee’s charter, and are “non-employee directors,” as defined in Rule 16b-3 under the Exchange Act and “outside directors,” as defined under Section 162(m) of the Internal Revenue Code of 1986, amended (the “Code”). The functions of the Compensation and Human Capital Committee include: (i) annually reviewing and recommending to the Board the corporate goals and objectives relevant to the compensation of our Chief Executive Officer, (ii) evaluating the performance of our Chief Executive Officer in light of such corporate goals and objectives and, based on such evaluation, recommending to the Board the compensation of our Chief Executive Officer, (iii) determining the compensation of all executive officers other than the Chief Executive Officer, (iv) retaining, terminating and approving the compensation of any compensation advisors, (v) reviewing and approving our policies and procedures for the grant of equity based awards, (vi) reviewing and approving grants of awards under our incentive based compensation plans and equity based plans, (vii) reviewing and making recommendations to the Board with respect to director compensation, (viii) reviewing and overseeing the Company’s policies and practices relating to human capital management, (ix) reviewing, monitoring and providing recommendations to our Board on our workplace policies and practices, including corporate culture and employee engagement, talent management and leadership development, employee diversity and inclusion, and ensuring a respectful workplace free of discrimination and harassment, and (x) reviewing and evaluating, at least annually, the performance of our Compensation and Human Capital Committee and its members, and reporting to the Board on the results of such evaluation. The Compensation and Human Capital Committee operates under a written charter adopted by the Board, a copy of which is available on the Company’s website at www.capstonegreenenergy.com. Pursuant to its written charter, the Compensation and Human Capital Committee reviews its charter on an annual basis for compliance, best practices and any other needed updates or changes. During Fiscal 2023, the Compensation and Human Capital Committee held six meetings. Processes and procedures for determining executive and director compensation, including authority and delegation, and the role of executive officers, if any, are discussed in the section titled “Compensation of Officers and Directors.” Governance and Sustainability Committee The Governance and Sustainability Committee consisted of Mr. Powelson (Chair), Ms. Wilson, and Ms. Fu as of March 31, 2023. Upon his appointment to the Board on February 26, 2024, Mr. Miller was appointed to the Governance and Sustainability Committee. The Governance and Sustainability Committee is comprised solely of “independent directors” as defined by Nasdaq rules in conformance with the Governance and Sustainability Committee’s charter. The Governance and Sustainability Committee is responsible for, among other things, (i) monitoring corporate governance matters; (ii) recommending to the full Board candidates for election to the Board and committees of the Board; (iii) coordinating the Board evaluation process; (iv) providing general oversight in respect of corporate governance, social responsibility, and sustainability matters; and (v) overseeing succession planning of the CEO and other key positions. The Governance and Sustainability Committee operates under a written charter adopted by the Board, a copy of which is available on the Company’s website at www.capstonegreenenergy.com. Pursuant to its written charter, the Governance and Sustainability Committee reviews its charter on an annual basis for compliance, best practices and any other needed updates or changes. During Fiscal 2023, the Governance and Sustainability Committee held four meetings. The Governance and Sustainability Committee met subsequent to the end of Fiscal 2023 to recommend to the full Board each of the nominees for election to the Board as presented herein. Board of Directors and Committee Performance Evaluations The charter of each of the Audit Committee, the Compensation and Human Capital Committee and the Governance and Sustainability Committee requires an annual performance evaluation, and the Company’s Corporate 72 Table of Contents Governance Principles also mandate an annual evaluation of the Board. Such performance evaluations are designed to assess whether the Board and its committee’s function effectively and make valuable contributions to the Company. In June 2023, the Governance and Sustainability Committee conducted an assessment of the performance of the Board, as well as an assessment of each member’s skill sets and experience and how such skill sets and experience align with the needs of the Company in reaching the Company’s strategic objectives. In June 2023, the Governance and Sustainability Committee and the Board discussed the results of the assessments and put a follow-up process in place to conduct the annual performance evaluation of the Audit Committee, the Compensation and Human Capital Committee and the Governance and Sustainability Committee as well as the Board. Director Recommendation and Nomination Process Nominations of persons for election to our Board by the stockholders may be made at an annual meeting of stockholders by any stockholder who (i) was a stockholder of record entitled to vote in the election of directors at the time of giving of notice provided for below and at the time of the annual meeting, and (ii) complies with the notice procedures set forth below and as further described in our bylaws as to such nomination. Without qualification, for nominations, the stockholder must have given timely notice thereof in writing to the secretary of the corporation at: Capstone Green Energy Holdings, Inc. 16640 Stagg Street Van Nuys, CA 91406 Attention: Mark Funaki, Secretary ​ To be timely, a stockholder’s notice shall be delivered to the Secretary at the principal executive offices of the corporation not earlier than the close of business on the 150th calendar day and not later than the close of business on the 120th calendar day prior to the first anniversary of the date of the immediately preceding annual meeting of stockholders; provided, however, that if no annual meeting was held in the previous year or the date of the annual meeting is advanced by more than thirty (30) calendar days prior to such anniversary date or delayed more than seventy (70) calendar days after such anniversary date, a proposal shall be received by the corporation not earlier than the close of business on the 150th day before the meeting and not later than the later of (a) the close of business on the 120th day before the meeting or (b) the close of business on the tenth day following the day on which public announcement of the date of the annual meeting is first made by the corporation. In no event shall the public announcement of an adjournment of an annual meeting commence a new time period for the giving of a stockholder’s notice as described above. As discussed in the Company’s bylaws, the notice must set forth: (A) certain information as to each nominee such stockholder proposes to nominate at the meeting as set forth in the Company’s bylaws, including such person’s written consent to being named in the proxy statement, proxy card and ballot as a nominee and to serving as a director if elected, and (B) certain information as to, and certain representations and certifications from, the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is being made, as set forth in the Company’s bylaws. The above does not purport to provide in detail the requirements for a stockholder’s nomination of the director. A stockholder interested in nominating a director to our Board is encouraged to review our bylaws and the SEC’s proxy rules, as any stockholder nomination must comply with the applicable provisions of our bylaws and the SEC’s proxy rules and will be handled in accordance with our bylaws and applicable laws. The Governance and Sustainability Committee reviews the composition and size of the Board and determines the criteria for Board membership. In addition, the Governance and Sustainability Committee reviews the qualifications, qualities, skills and other expertise of prospective candidates to determine whether they will make good candidates for membership on the Company’s Board. This consideration includes, at a minimum, a review of each prospective candidate’s character, judgment, experience, expertise, age, diverse characteristics, independence under applicable law and freedom from other conflicts, as well as other factors that the Governance and Sustainability Committee deems relevant in light of the needs of the Board and the Company and/or that are in the best interests of the Company, including the ability to dedicate sufficient time, energy and attention to performance of Board duties, among other things. The Governance and Sustainability Committee selects qualified candidates and recommends those candidates to the Board, and the Board then 73 Table of Contents decides if it will invite the candidates to be nominees for election to the Board. The Governance and Sustainability Committee also considers legal requirements, including stock exchange requirements and applicable laws and regulations. The Governance and Sustainability Committee also considers issues of diversity, such as diversity of education and professional experience and differences in viewpoints, skills and backgrounds, including gender, race and ethnicity differences, as well as other differentiating characteristics. The Governance and Sustainability Committee actively considers all relevant factors when considering nominees for directors, including the factors outlined above, when evaluating potential nominees to the Board. The Board and the Governance and Sustainability Committee believe that it is essential that members of the Board represent diverse viewpoints. As of the date of this Annual Report on Form 10-K, we meet California state laws (that were recently ruled to be unconstitutional by California Superior Courts) to have (i) at least one director who self-identifies as a member of an underrepresented community (as defined by such law) and (ii) based on the current size of our Board, at least three female directors. The Governance and Sustainability Committee uses the following process to identify prospective candidates for the Board and to evaluate all candidates, including candidates recommended by stockholders in accordance with the Company’s policy regarding stockholder recommendations and the director nominations process. The Governance and Sustainability Committee: (i) reviews the composition and size of the Board and determines the criteria for Board membership; (ii) evaluates the Board for effectiveness and makes a verbal presentation of its findings to the Board; (iii) determines whether the current members of the Board who satisfy the criteria for Board membership are willing to continue in service; if the current members of the Board are willing to continue in service, the Governance and Sustainability Committee evaluates the performance of such board members and considers those current members for re-nomination, and if the current members of the Board are not willing to continue in service or if there will be an increase in the number of directors on the Board, the Governance and Sustainability Committee considers candidates who meet the criteria for Board membership; (iv) if necessary, engages a search firm to assist with the identification of potential candidates; (v) compiles a list of potential candidates; (vi) evaluates the prospective candidates, including candidates recommended by stockholders, to determine which of the prospective candidates, if any, will best represent the interests of all stockholders and determines whether any conflicts of interest exist; (vii) holds meetings to narrow the list of prospective candidates; (viii) along with the Chair of the Board and management, interviews a select group of prospective candidates; (ix) approves the candidate or candidates who are most likely to advance the best interests of the stockholders; and (x) recommends the selected candidate or candidates to the Board and the stockholders for approval. The Governance and Sustainability Committee, which may request the assistance of members of the Board who are not on the Governance and Sustainability Committee in the execution of its duties, carefully documents the selection and evaluation process. Pursuant to our Corporate Governance Guidelines, management directors are required to offer to resign from the Board upon their termination as an officer of the Company (other than as a result of normal retirement), which resignation may be accepted by the Board in its sole discretion. A non-employee director must inform, and offer his or her resignation to, the Board in the event of any principal occupation or business association change, including retirement. The Board does not believe that directors who retire from or change the primary occupation that they held when they were first elected to the Board should necessarily leave the Board in every instance. Stockholder Communications The Company has a policy whereby stockholders may communicate directly with the Company’s Board, or individual members of the Board, by writing to the Company at: Capstone Green Energy Holdings, Inc. 16640 Stagg Street Van Nuys, CA 91406 Attention: Mark Funaki, Secretary and indicating prominently on the outside of any envelope that the communication is intended for: (i) the Board; (ii) the Chair of the Board; (iii) a specific committee of the Board; (iv) the non-management directors; or (v) any director or subset of directors of the Board. The Secretary of the Board reviews all correspondence and regularly forwards to the appropriate director, directors or the Board, copies of all communications that, in the opinion of the Secretary, deal with the functions 74 Table of Contents of or otherwise require the attention of individual directors, the Board or committees or subsets thereof. Unless, in the opinion of the Secretary, a communication is improper or irrelevant, a communication will not be withheld from its intended recipient(s) without the approval of the Chair of the Board, the Chair of the appropriate committee or the director who presides during non-management executive sessions. Directors may, at any time, review a log of all correspondence received by the Company in accordance with the policy and request copies of any such correspondence. Executive Officers The names and ages of all executive officers of the Company and the principal occupation and business experience for at least the last five years for each are set forth below. The age of and biographical information regarding each executive officer is based on information furnished to the Company by each executive officer and is as of May 31, 2024. The following list identifies the name, age and position(s) of the executive officers of the Company: ​ ​ ​ ​ ​ ​ Name Age Position Vince J. Canino ​ 61 ​ President & Chief Executive Officer ​ John J. Juric ​ 62 ​ Chief Financial Officer ​ Mark Funaki ​ 52 ​ General Counsel ​ The term of each executive officer runs until his or her successor is elected and qualified, or until his or her earlier death, resignation or removal. The following is a biographical summary of the experience of the executive officers of the Company who are not members of the Company’s Board of Directors: Vince J. Canino . Mr. Canino was appointed as President and Chief Executive Officer and a member of the Board on March 11, 2024. Prior to joining the Company, Mr. Canino served as the Chief Operating Officer of ESS Tech, Inc. (NYSE: GWH), a developer of long-duration energy storage solutions, from September 2022 to March 2024. He previously spent approximately eight years with Smardt Chiller Group, Inc. (“Smardt”), a manufacturer of oil-free chillers, most recently serving as Smardt’s President and Chief Executive Officer. Mr. Canino also served in various roles with Trane Commercial Systems (“Trane”), a manufacturer of heating, ventilation and air conditioning systems, including as Trane’s Vice President, Enterprise Businesses and Renewable Energy. Mr. Canino’s career includes multiple leadership, management, operations and sales roles with publicly traded and privately held organizations. Mr. Canino serves as a board member of Western Washington University and holds a Master of Science in Engineering Mechanics from Pennsylvania State University and a Bachelor of Technology in Mechanical Engineering from the State University of New York at Binghamton. Among his other skills and expertise, Mr. Canino brings to the Board his unique perspective as President and Chief Executive Officer of the Company and substantial executive and industry experience. John J. Juric . Mr. Juric was appointed Chief Financial Officer in March 2023. Prior to joining the Company, Mr. Juric spent nearly two years providing management and financial consulting services to C-suite executives in multiple industries. Previously, Mr. Juric served as Vice President of Finance and Chief Financial Officer of USALCO, LLC, a chemical manufacturing and distribution company, for six years, and as President Americas & Asia Industrial Division and Americas Region Chief Financial Officer of Fiberweb, PLC., a global nonwoven products manufacturer and distributor, for nearly five years. Additionally, Mr. Juric’s career includes multiple leadership, finance, and accounting roles with publicly traded and privately held organizations. He also previously served as the Director of Finance at Hercules, Inc., a global specialty chemical manufacturing company. Mr. Juric is a Certified Public Accountant, and holds an MBA and Bachelor of Science in Accounting degree from West Chester University. Mark Funaki . Mr. Funaki was appointed General Counsel in April 2024. Mr. Funaki has extensive experience as a senior legal officer operating in complex legal environments, with a focus on transactional and compliance matters. He has served as a member of the board of directors of Vorwerk (US) Inc., a distributor of kitchen appliances, since 2016 and as a consultant for Vorwerk & Co. Interholding GmbH, an international conglomerate with home and kitchen appliance distribution, financial services and venture capital operations, since 2022. Previously, Mr. Funaki spent approximately 21 years in the legal department of Jafra Cosmetics International, Inc., a privately held cosmetics company, most recently serving as Senior Vice President, General Counsel from 2018-2022. Mr. Funaki began his career as an associate at Cades 75 Table of Contents Schutte LLP and holds a law degree from the Vanderbilt University Law School and a Bachelor of Arts degree in Public Policy from Duke University. Code of Business Conduct and Code of Ethics The Company has adopted a Code of Business Conduct and Ethics that applies to all directors, officers and employees of the Company. All directors, officers and employees of the Company are expected to be committed to the highest standards of honest, ethical and legal behavior. The Board reviews the Code of Business Conduct and Ethics on an annual basis or more often, if necessary. The Code of Business Conduct and Ethics is available on the Company’s website at www.capstonegreenenergy.com . The Company has also adopted a Code of Ethics for Principal and Senior Financial Officers, which is also available on the Company’s website at www.capstonegreenenergy.com. Delinquent Section 16(a) Reports Section 16(a) of the Exchange Act requires the Company’s directors and executive officers and persons who own more than 10% of a registered class of the Company’s equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of the Company’s equity securities. The Company endeavors to assist officers and directors in making these filings. Based solely on its review of the reports filed with the SEC during the Company’s fiscal year ended March 31, 2023, the Company believes that all reporting requirements under Section 16(a) for the fiscal year ended March 31, 2023 were met in a timely manner by its directors, executive officers, and greater than 10% beneficial owners, except for the following late filings: (1) filing made by Frederick S. Hencken III in connection with the withholding of 1,730 shares to cover the tax liability resulting from the vesting of restricted stock units, the information for which was filed on Form 4 on May 17, 2022; (2) filing made by Mr. Jamison in connection with the withholding of 2,356 shares to cover the tax liability resulting from the vesting of restricted stock units, the information for which was filed on Form 4 on May 17, 2022; (3) filing made by Mr. Crouse in connection with the withholding of 1,342 shares to cover the tax liability resulting from the vesting of restricted stock units, the information for which was filed on Form 4 on May 17, 2022; and (4) filing made by Mr. Jamison in connection with the withholding of 6,085 shares to cover the tax liability resulting from the vesting of restricted stock units, the information for which was filed on Form 4 on August 31, 2022. Item 11. Executive Compensation. The Company is a “smaller reporting company” under Item 10 of Regulation S-K promulgated under the Exchange Act and has elected to comply with certain of the requirements applicable to smaller reporting companies in connection with this Annual Report on Form 10-K. Although the rules allow the Company to provide less detail about its executive compensation program, the Compensation and Human Capital Committee is committed to providing the information necessary to help stockholders understand its executive compensation-related decisions. The information below summarizes the executive compensation program and results for our named executive officers (“NEOs”) for Fiscal 2023. 76 Table of Contents 2023 Summary Compensation Table The following table sets forth information regarding the compensation paid to or earned by the Company’s CEO and our other NEOs, for services rendered to the Company and its subsidiaries for the fiscal years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock ​ Non-Equity Incentive ​ All Other ​ ​ ​ ​ ​ ​ ​ Salary ​ Bonus ​ Awards ​ Plan Compensation ​ Compensation ​ Total Name and Principal Position ​ Year ​ ($) ​ ($) ​ ($)(1) ​ ($)(3) ​ ($)(4) ​ ($) Darren R. Jamison 2023 ​ ​ 557,180 ​ — ​ ​ ​ 362,170 ​ ​ — ​ ​ 7,389 ​ ​ 926,739 President & Chief Executive Officer (5) 2022 ​ ​ 545,841 ​ — ​ ​ ​ 362,162 ​ ​ 111,436 ​ ​ 6,445 ​ ​ 1,025,884 John J. Juric 2023 ​ 21,635 ​ 100,000 (2) ​ 220,000 ​ — ​ 666 ​ 342,301 Chief Financial Officer (6) 2022 ​ ​ — ​ — ​ ​ — ​ — ​ — ​ ​ — Frederick S. Hencken III 2023 ​ 69,346 ​ — ​ ​ 150,252 ​ — ​ 3,615 ​ 223,213 Former Chief Financial Officer (7) 2022 ​ ​ 291,125 ​ — ​ ​ 145,004 ​ 27,044 ​ 5,869 ​ ​ 469,042 (1) This column represents the aggregate grant date fair value of restricted stock units (“RSUs”) and performance restricted stock units (“PRSUs”) granted in the years presented in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, excluding the estimated impact of forfeitures related to service-based vesting conditions. Grant date fair value is calculated using the closing price of Capstone’s common stock on the date of grant. For a discussion of the valuation assumptions, see Note 9 in the Notes to Consolidated Financial Statements. For PRSUs granted in Fiscal 2023, the amount reported in the table above represents the grant date fair value of such award assuming the probable outcome of the performance conditions. The value of such award, assuming the maximum achievement of the performance conditions, is $181,085 for Mr. Jamison. Mr. Hencken forfeited his PRSU award upon his termination of service. Mr. Juric joined the Company in March 2023 and did not receive a PRSU award for Fiscal 2023. (2) Mr. Juric earned a signing bonus of $100,000 upon joining the Company on March 6, 2023. (3) This column represents non-equity incentive plan compensation earned pursuant to the Capstone Executive Annual Incentive Plan (the “AIP”). (4) Amounts reported in this column include Company vacation payouts, Company contributions to the 401(k) plan and premiums paid by the Company for life insurance. (5) Mr. Jamison departed the Company on August 22, 2023. (6) Mr. Juric joined the Company on March 6, 2023. (7) Mr. Hencken departed the Company on July 15, 2022. Components and Results of the Fiscal 2023 Executive Compensation Program The primary components of the compensation program for our NEOs are base salary, annual incentive compensation and long-term incentives and awards. Our NEOs are also eligible for employee benefits consistent with those offered to other employees of the Company and for severance and change in control benefits. Base Salary Base salary is intended to provide a level of assured cash compensation that is competitive in the marketplace to our executive officers. It is based on the individual’s qualifications, experience with the Company, past performance, taking into account all relevant criteria, value to the Company, the Company’s ability to pay and relevant competitive market data. For Fiscal 2023, the Compensation and Human Capital Committee approved the following base salaries: ​ ​ ​ ​ Base Salary at the end ​ Base Salary at the end ​ ​ Named Executive Officer ​ of 2023 Fiscal Year ​ of 2022 Fiscal Year ​ % Increase Darren R. Jamison (1) ​ $ 557,180 ​ $ 557,180 ​ 0% John J. Juric (2) ​ $ 375,000 ​ $ — ​ — Frederick S. Hencken III (3) ​ $ 300,500 ​ $ 300,500 ​ 0% 77 Table of Contents (1) Mr. Jamison departed the Company on August 22, 2023. (2) Mr. Juric joined the Company on March 6, 2023. (3) Mr. Hencken departed the Company on July 15, 2022. Annual Incentive Compensation, Targets and Results The AIP for Fiscal 2023 was designed to focus our NEOs on driving future growth and profitability. Specifically, this plan was designed to reward our NEOs and other senior executives if the Company were to achieve pre-determined total revenue, adjusted EBITDA, and cash provided by working capital targets, subject to the Company’s standard clawback provisions. Target annual incentive opportunities are expressed as a percentage of base salary and were established based on each NEO’s level of responsibility and ability to impact overall results. The Compensation and Human Capital Committee also considers market data in setting target award amounts. Mr. Jamison’s target award opportunity for Fiscal 2023 was 100% of his base salary. Mr. Hencken’s target award opportunity for Fiscal 2023 was 45% of his base salary. Mr. Juric will begin participating in the AIP in Fiscal 2024, and his target award opportunity will be 60% of his base salary. All awards require compliance with the $50.0 million 3-year term note covenants to be eligible for any incentive payout regardless of goal achievement(s). The Compensation and Human Capital Committee also has the discretion to determine if any amendments to the note covenants that have a financial impact on the Company could result in the performance gate/trigger to not have been met. The weightings for the performance measures for Fiscal 2023 are set forth in the table below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Provided by Total ​ Adjusted ​ Working Revenue ​ EBITDA ​ Capital ​ 40% ​ 40% ​ 20% The Fiscal 2023 AIP performance goals were structured to encourage growth: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Performance Payout Level ​ ​ ​ Performance Metrics ​ Threshold (50%) Target (100%) Maximum (150%) Actual Results(3) ​ Revenue (in millions) ​ $ 75.100 ​ $ 80.100 ​ $ 85.100 ​ $ 80.200 ​ Adjusted EBITDA (in millions) ​ $ — ​ $ 0.925 ​ $ 1.850 ​ $ (6.607) (1) Cash provided by working capital (in millions) ​ $ — ​ $ 1.910 ​ $ 3.820 ​ $ 3.273 (2) (1) Adjusted EBITDA for purposes of the AIP is defined as EBITDA before loss on debt extinguishment, stock-based compensation and other expense, non-recurring legal settlement, reliability repair accrual, and non-recurring legal costs related to settlement and other items determined at the discretion of the Compensation and Human Capital Committee. Refer to page 84 for a reconciliation of Net Loss, as reported to adjusted EBITDA. (2) Cash provided by the changes in operating assets and operating liabilities of the Company’s working capital accounts for Fiscal 2023 was $3.3 million. (3) Actual results as presented herein do not reflect the impact of the Restatement. On June 13, 2023, the Compensation and Human Capital Committee met to determine if certain performance targets were met under the terms of awards granted for the 2023 Fiscal Year pursuant to the AIP. The Compensation and Human Capital Committee determined that the Company reached slightly above the target level of achievement for the revenue performance criteria and slightly less than the maximum payment for working capital performance criteria, but the performance gate/trigger requiring compliance with the $50.0 million 3-year term note covenants was not met. As such, the Compensation and Human Capital Committee did not authorize non-equity incentive plan compensation payments for Fiscal 2023 pursuant to the AIP. Mr. Juric was appointed at the end of the fiscal year and did not receive an award under this plan for Fiscal 2023. Long-Term Incentive Targets and Awards In discharging its responsibility for administering the Company’s stock-based compensation programs, the Compensation and Human Capital Committee regularly monitors and evaluates the total cost of such programs, based on information provided annually by, and in consultation with, Pearl Meyer, the Company’s independent compensation consultant. This information includes share utilization and annual grant levels. The Compensation and Human Capital Committee determines the appropriate award to each NEO by assessing equity incentive awards made to officers of comparable companies. 78 Table of Contents Long-term incentive awards are designed to have senior executives focused on the execution of longer-term financial and strategic growth goals that drive stockholder value creation, strengthen our financial position, and support the Company’s leadership retention strategy. At the beginning of Fiscal 2023, Mr. Jamison’s target long-term incentive opportunity was set at 65% of his base salary. Mr. Juric’s target long-term incentive opportunity was set at 60% of his base salary for Fiscal 2024. Mr. Hencken’s target long-term incentive opportunity was set at 50% of his base salary. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Value of Target ​ ​ Value of Target Executive Officer ​ ​ RSUs Granted(1) ​ ​ PRSUs Granted(1) Darren R. Jamison (3) $ 181,085 ​ $ 181,085 John J. Juric (2) $ 220,000 ​ $ — Frederick S. Hencken III (3) ​ $ 112,689 ​ $ 37,563 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Award amounts for RSUs and PRSUs were determined based on the closing price of our common stock on the Nasdaq Capital Market on the date of grant, which was April 7, 2022. The closing price of the common stock on April 7, 2022 was $3.80. (2) In connection with his appointment as Chief Financial Officer, Mr. Juric received 125,000 RSUs, which will vest on March 6, 2025, provided that Mr. Juric remains employed as Chief Financial Officer on such date. The closing price of the common stock on March 6, 2023 was $1.76. (3) All unvested grants were forfeited by Mr. Jamison and Mr. Hencken upon their respective departures. Outstanding Equity Awards at 2023 Fiscal Year-End Information about outstanding equity awards held by our NEOs as of the end of Fiscal 2023 is set forth in the table below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Option Awards ​ Stock Awards ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equity Incentive ​ Equity Incentive ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Plan Awards: ​ Plan Awards: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ Market Value ​ Number of ​ Market or Payout ​ ​ Number of Securities ​ ​ ​ ​ ​ Shares or ​ of Shares or ​ Unearned Shares, ​ Value of Unearned ​ ​ Underlying ​ Option ​ Option ​ Units of Stock ​ Units of Stock ​ Units or Other ​ Shares, Units or ​ ​ Unexercised Options ​ Exercise ​ Expiration ​ That Have ​ That Have ​ Rights That Have ​ Other Rights That ​ ​ Exercisable ​ Unexercisable ​ Price ​ Date ​ Not Vested ​ Not Vested ​ Not Vested ​ Have Not Vested Name ​ (#)(1) ​ (#)(1) ​ ($) ​ (2) ​ (#) ($)(3) (#) ($)(3) Darren R. Jamison(10) 353 — 280.00 05/14/2024 — ​ ​ — ​ 23,827 (8) 31,690 ​ ​ — ​ — ​ — ​ — ​ — ​ ​ — ​ 10,792 (9) 14,353 ​ 2,149 — ​ 184.00 04/09/2023 47,654 (4) 63,380 ​ — ​ — ​ — — ​ — — 14,388 (5) 19,136 ​ — ​ — ​ ​ — ​ — ​ — ​ — ​ 18,580 (6) 24,711 ​ — ​ — John J. Juric — — ​ — — 125,000 (7) 166,250 ​ — ​ — (1) Options vested 25% on the first anniversary of the grant date and monthly thereafter on a pro rata basis over the next 36 months, conditioned on continued service to the Company. However, all grants were cancelled on the Effective Date in connection with Emergence. (2) All options terminate, if not sooner, at the expiration of ten years following the grant date. However, all grants were cancelled on the Effective Date in connection with Emergence. (3) Based on the closing price of our common stock of $1.33 on the Nasdaq Capital Market on March 31, 2023, the last trading day of Fiscal 2023. (4) These RSUs vest in three equal installments on each anniversary of April 7, 2022, conditioned on continued service to the Company. However, all grants were cancelled on the Effective Date in connection with Emergence. (5) These RSUs vest in three equal installments on each anniversary of April 13, 2021, conditioned on continued service to the Company. However, all grants were cancelled on the Effective Date in connection with Emergence. (6) These RSUs vest in three equal installments on each anniversary of August 27, 2020, conditioned on continued service to the Company. However, all grants were cancelled on the Effective Date in connection with Emergence. (7) These RSUs vest in one installment on March 6, 2025, conditioned on continued service to the Company. However, all grants were cancelled on the Effective Date in connection with Emergence. 79 Table of Contents (8) These PRSUs are earned based on the achievement of pre-determined Free Cash Flow and Aftermarket Sales Absorption goals measured in the third year of a three-year performance period (2022-2024). However, all grants were cancelled on the Effective Date in connection with Emergence. (9) These PRSUs are earned based on the achievement of pre-determined Free Cash Flow and Aftermarket Sales Absorption goals measured in the third year of a three-year performance period (2021-2023). However, all grants were cancelled on the Effective Date in connection with Emergence. (10) Mr. Jamison departed the Company on August 22, 2023 and unvested shares were forfeited upon his departure. Employee Benefits Executive officers are generally entitled only to health, welfare and retirement benefits that are consistent with those offered to other employees of the Company. The Company offers group life, disability, medical, dental and vision insurance and an employee stock purchase program. The Company maintains a defined contribution 401(k) profit - sharing plan in which all employees are eligible to participate. The plan also provides for both Company matching and discretionary contributions, which are determined by the Board. The Company matches 50 cents on the dollar up to 6% of the employee’s compensation that is contributed. The Company’s match vests 25% a year over four years starting from the employee’s hire date. Executive Employment Contracts, Termination of Employment and Change in Control Arrangements In July 2018, the Company adopted the Capstone Turbine Corporation Amended and Restated Severance Pay Plan (the “Original Severance Plan”). The Original Severance Plan provided that, in the event that a NEO’s employment is terminated by the Company without Cause (as defined in the Original Severance Plan), the NEO would be entitled to receive, subject to the execution of a separation agreement containing a general release of claims, 26 weeks (or 52 weeks in the case of the Chief Executive Officer) of base salary continuation and reimbursement of COBRA premiums for six months (or twelve months in the case of the Chief Executive Officer). In connection with the termination of employment of Mr. Crouse, effective on April 15, 2022, the Company executed a separation agreement with Mr. Crouse providing for twelve months of reimbursement of COBRA premiums. On March 2, 2023, the Company amended the Original Severance Plan (the “Amended Original Severance Plan”) to provide that, in the event that the Chief Financial Officer’s employment is terminated by the Company without Cause, the Chief Financial Officer will be entitled to receive, subject to the execution of a separation agreement containing a general release of claims, 52 weeks of base salary continuation and reimbursement of COBRA premiums for twelve months. The amendment also provides that, in the event that the Chief Executive Officer’s employment is terminated by the Company without Cause, the Chief Executive Officer will be entitled to receive, subject to the execution of a separation agreement containing a general release of claims, 18 months of base salary continuation and reimbursement of COBRA premiums for eighteen months. On the Effective Date, the Company adopted the Capstone Green Energy Holdings, Inc. Severance Pay Plan (the “New Severance Plan”), which contains terms substantially similar to those set forth in the Amended Original Severance Plan. Prior to the Effective Date, the Company entered into Change in Control Agreements with each of our NEOs that provide for certain payments and benefits following a termination of the NEO’s employment either by the Company without Cause (as defined in the Change in Control Agreements) (other than due to the NEO’s death, the NEO being Disabled (as defined in the Change in Control Agreements), or the NEO becoming an employee of any direct or indirect successor to the business or assets of the Company, rather than continuing as an employee of the Company) or by the NEO for Good Reason (as defined in the Change in Control Agreements), in either case within six months prior to or 24 months following a Change in Control (as defined in the Change in Control Agreements and such a termination, a “Qualifying Termination”). In the event of a Qualifying Termination, subject to the NEO signing and not revoking a separation agreement containing a general release of claims and a non-disparagement covenant (the “Separation Agreement”), compliance with his or her obligations under the Separation Agreement and compliance with any other continuing obligations to the Company or its successor, the NEO will be eligible to receive (a) a lump sum severance payment equal to 1.0 times (or 1.5 times in the case of Mr. Juric and 2.0 times, in the case of Mr. Jamison) the sum of the NEO’s (i) annual base salary for the calendar year in which the Qualifying Termination occurs (or annual base salary in effect immediately prior to the Change in Control, if higher) and (ii) target annual incentive compensation for the calendar year in which the Qualifying Termination occurs, but pro-rated for the portion of such calendar year that falls prior to the Qualifying Termination; (b) a monthly cash payment in an amount equal to the monthly employer contribution that the Company 80 Table of Contents would have made to provide health insurance to the NEO if he or she had remained employed by the Company for up to 18 months; and (c) acceleration of any unvested equity awards outstanding on the date of the Qualifying Termination, assuming achievement of performance criteria at target and without reduction for any shortened performance period in the case of performance-based equity awards. Payments under the Change in Control Agreements are in lieu of payments under the Severance Plan. Our recently completed financial restructuring constituted a Change in Control under the Change in Control Agreements. If a NEO experiences a Qualifying Termination within 24 months following such restructuring, such NEO would be eligible to the receive the foregoing severance payments and benefits, as applicable, pursuant to such NEO’s Change in Control Agreement. On the Effective Date, the Company entered into a Change in Control Agreement with Mr. Juric (the “Effective Date Change in Control Agreement”). The Effective Change in Control Agreement provides for certain payments and benefits following a Qualifying Termination (as defined in the Effective Date Change in Control Agreement). In the event of a Qualifying Termination, subject to such officer’s execution and non-revocation of a Separation Agreement, compliance with such officer’s obligations under the Separation Agreement and compliance with any other continuing obligations to the Company or its successor, such officer will be eligible to receive: (a) a severance payment equal to 1.5 times the sum of such officer’s (i) annual base salary for the calendar year in which the Qualifying Termination occurs (or annual base salary in effect immediately prior to the Change in Control, if higher) and (ii) target annual incentive compensation for the calendar year in which the Qualifying Termination occurs, but pro-rated for the portion of such calendar year that falls prior to the Qualifying Termination; (b) a monthly cash payment in an amount equal to the monthly employer contribution that the Company would have made to provide health insurance to such officer if he or she had remained employed by the Company, for up to 18 months; and (c) acceleration of any unvested equity awards outstanding on the date of the Qualifying Termination, assuming achievement of performance criteria at target and without reduction for any shortened performance period in the case of performance-based equity awards. Payments under the Effective Date Change in Control Agreements are in lieu of payments under the Severance Plan. In connection with the appointment of Mr. Canino as President and Chief Executive Officer, the Company amended and restated its form Effective Date Change in Control Agreement (the “Amended and Restated Change in Control Agreement”) to revise the definition of “Severance Pay” that will be paid in the event of a Qualifying Termination within the CIC Window (each such term, as defined in the Amended and Restated Change in Control Agreement) to mean an amount equal to a multiple of the sum of the employee’s: (i) annual base salary for the calendar year in which the Date of Termination (as defined in the Amended and Restated Change in Control Agreement) occurs (or the employee’s annual base salary in effect immediately prior to the change in control, if higher); and (ii) target annual incentive compensation for the calendar year in which the Date of Termination occurs. For calculating Mr. Canino’s Severance Pay, the Compensation and Human Capital Committee of the Board approved a multiple of two and one-half (2.5). The Company has entered into indemnification agreements with its officers and directors containing provisions which may require the Company, among other things, to indemnify its officers and directors against certain liabilities that may arise by reason of their status or service as officers or directors (other than liabilities arising from willful misconduct of a culpable nature) and to advance their expenses incurred as a result of any proceeding against them as to which they could be indemnified. The tables below set forth the amount of compensation payable to each of Messrs. Jamison and Juric, as if each situation occurred on March 31, 2023, under the Severance Plan or Change in Control Agreements discussed above. Mr. Jamison departed the Company on August 22, 2023. Mr. Jamison ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Involuntary Termination ​ ​ Involuntary Termination ​ ​ Related to ​ Executive Benefits and Payments upon Termination ​ without Cause ​ Change in Control Cash Payments ​ $ 557,180 (1) $ 2,228,720 (2) RSUs (unvested) ​ — ​ 252,829 (3) Insurance Benefits ​ 46,165 (4) 69,248 (5) Total (6) ​ $ 603,345 ​ $ 2,550,797 ​ (1) Reflects severance payments of Mr. Jamison’s annual base salary as of March 31, 2023 over a period of 52 weeks, payable under the Severance Plan. 81 Table of Contents (2) Reflects a lump sum severance payment equal to two times the sum of Mr. Jamison’s annual base salary as of March 31, 2023 and target annual incentive compensation, payable under the Change in Control Agreement with Mr. Jamison. (3) Reflects the value of unvested RSUs and PRSUs that become vested upon a Qualifying Termination, pursuant to the Change in Control Agreement with Mr. Jamison, based on the market value of $1.33 per share on March 31, 2023, the last trading day of Fiscal 2023. In the event of a Qualifying Termination, unvested equity awards outstanding on the date of the Qualifying Termination accelerate and vest in full, assuming achievement of performance criteria at target and without reduction for any shortened performance period in the case of performance-based equity awards. Full vesting is also triggered if the acquirer of the Company does not assume the awards issued under the Capstone Green Energy Corporation 2017 Equity Incentive Plan (the “2017 Plan”). (4) Reflects monthly payments of health benefit premiums over a period of 12 months, payable under the Severance Plan. (5) Reflects monthly payments of health benefit premiums over a period of 18 months, payable under the Change in Control Agreement with Mr. Jamison. (6) Mr. Jamison departed the Company on August 22, 2023. Mr. Juric ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Involuntary Termination ​ ​ Involuntary Termination ​ ​ Related to ​ Executive Benefits and Payments upon Termination ​ without Cause ​ Change in Control Cash Payments ​ $ 375,000 (1) $ 750,000 (2) RSUs (unvested) ​ — ​ 166,250 (3) Insurance Benefits ​ 30,365 (4) 45,548 (5) Total ​ $ 405,365 ​ $ 961,798 ​ (1) Reflects severance payments of Mr. Juric’s annual base salary as of March 31, 2023 over a period of 52 weeks, payable under the Severance Plan. (2) Reflects a lump sum severance payment equal to two times the sum of Mr. Juric’s annual base salary as of March 31, 2023 and target annual incentive compensation, payable under the Change in Control Agreement with Mr. Juric. (3) Reflects the value of unvested RSUs and PRSUs that become vested upon a Qualifying Termination, pursuant to the Change in Control Agreement with Mr. Juric, based on the market value of $1.33 per share on March 31, 2023, the last trading day of Fiscal 2023. In the event of a Qualifying Termination, unvested equity awards outstanding on the date of the Qualifying Termination accelerate and vest in full, assuming achievement of performance criteria at target and without reduction for any shortened performance period in the case of performance-based equity awards. Full vesting is also triggered if the acquirer of the Company does not assume the awards issued under the 2017 Plan. (4) Reflects monthly payments of health benefit premiums over a period of 12 months, payable under the Severance Plan. (5) Reflects monthly payments of health benefit premiums over a period of 18 months, payable under the Change in Control Agreement with Mr. Juric. Director Compensation On August 24, 2022, each non-employee director received an annual grant of RSUs with a grant date fair value of approximately $50,000, calculated using the closing price of our common stock on the date of grant. These RSUs will become vested upon completion of the annual term of the Board that includes the date of grant. The director fee schedule for the 2023 Fiscal Year remained unchanged from the previous fiscal year. The director cash retainer was $35,000, the Chair of the Board additional cash retainer was $25,000, and the director equity retainer was $50,000. The Audit Committee Chair retainer was $17,000, the Compensation and Human Capital Committee Chair retainer was $15,000, and the Governance and Sustainability Committee Chair retainer was $10,000. Each non-employee director who served on the Audit Committee received an $8,000 annual retainer. Each non-employee director who served on the Compensation and the Governance and Sustainability Committees received a $5,000 annual retainer. Non-employee directors may elect to receive shares of Common Stock in lieu of any cash retainer, based on the fair market value of Common Stock on the date that cash would have otherwise been paid. All payments are paid quarterly 82 Table of Contents in arrears. If requested, all director expenses incurred in attending the Board or committee meetings are reimbursed by the Company. On the Effective Date, the Board adopted a new director compensation policy. Pursuant to the revised director compensation policy, each non-executive director will receive an annual base retainer of $75,000, payable in cash on a quarterly basis. The Audit Committee chair will receive an additional annual retainer of $17,000 and each other Audit Committee member will receive an additional annual retainer of $8,000. The Compensation and Human Capital Committee chair will receive an annual retainer of $15,000 and each other Compensation and Human Capital Committee chair will receive an additional annual retainer of $6,000. The Governance and Sustainability Committee chair will receive an additional annual retainer of $10,000 and each other Governance and Sustainability Committee Chair will receive an additional annual retainer of $6,000. Non-executive directors will also receive an annual grant of $10,000 of restricted stock units, commencing with the 2024 annual meeting of stockholders. On January 22, 2024, the Board approved a policy providing for the grant of 10,000 RSU’s to each new director appointed on or prior to December 7, 2024. Mr. Jamison, the Company’s former President and Chief Executive Officer, did not receive compensation for serving as a member of the Board. The Company uses its fiscal year in reporting compensation rather than the term of the Board. Compensation amounts may differ between the Company’s fiscal year and the term of the Company’s Board. Information about the compensation of the non-employee directors for the 2023 Fiscal Year is set forth in the table below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fees Earned or Stock ​ ​ Name ​ Paid in Cash ($)(1) ​ Awards ($)(2) ​ Total ($) Paul DeWeese (3) ​ ​ 10,750 ​ ​ — ​ ​ 10,750 Robert C. Flexon ​ ​ 68,000 ​ ​ 50,000 ​ ​ 118,000 Yon Y. Jorden ​ ​ 58,000 ​ ​ 50,000 ​ ​ 108,000 Robert F. Powelson ​ ​ 51,000 ​ ​ 50,000 ​ ​ 101,000 Denise M. Wilson ​ 56,000 ​ 50,000 ​ 106,000 Ping Fu ​ 49,000 ​ 50,000 ​ 99,000 (1) For each term of the Board (beginning on the date of an annual meeting of stockholders and ending on the date immediately preceding the next annual meeting of stockholders), a non-employee director may elect to receive a stock award in lieu of all or any portion of his or her annual retainer or committee fee cash payment. The award is calculated by dividing the amount of the fee by the fair market value of a share of common stock on the date the fee is payable. For the 2023 Fiscal Year, due to limited share pool availability, 100% of the amount of the aggregate directors’ fees was paid in cash. (2) This column represents the aggregate grant date fair value of stock awards granted during the 2023 Fiscal Year calculated in accordance with FASB ASC Topic 718, excluding the estimated impact of forfeitures related to service-based vesting conditions. For a discussion of valuation assumptions, see Note 9 to the Notes to Consolidated Financial Statements. (3) Mr. Deweese resigned as a Director in March 2022. 83 Table of Contents Non-GAAP Measures Reconciliation Because we disclose Adjusted EBITDA in connection with the disclosure regarding the AIP targets, we have provided the below reconciliation of net loss to Adjusted EBITDA: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ Reconciliation of Reported Net Loss to EBITDA and Adjusted EBITDA ​ March 31, ​ (In thousands) 2023 2022 Net loss, as reported ​ $ (24,522) ​ $ (22,370) ​ Interest expense 6,163 5,004 ​ Provision for income taxes ​ 7 ​ 19 ​ Depreciation and amortization ​ 3,177 ​ 1,915 ​ EBITDA ​ $ (15,175) ​ $ (15,432) ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss (gain) on debt extinguishment ​ ​ — ​ ​ (2,610) ​ Stock-based compensation and other expense ​ ​ 863 ​ ​ 1,245 ​ Non-recurring legal/consulting ​ ​ 1,474 ​ ​ 882 ​ Severance ​ ​ 83 ​ ​ — ​ Stock to vendors ​ ​ — ​ ​ 1,012 ​ Executive bonus ​ ​ 408 ​ ​ 190 ​ Adjusted EBITDA ​ $ (12,347) ​ $ (14,713) ​ ​ Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The table below sets forth certain information as of May 31, 2024 (unless otherwise indicated) regarding beneficial ownership of our common stock and non-voting common stock by: (1) each director, nominee for director and NEO of the Company; (2) all directors and executive officers as a group; and (3) each person known by the Company to be the beneficial owner of more than 5% of the outstanding common stock of the Company. As of June 10, 2024, there were 18,546,649 shares of common stock and 508,475 shares of non-voting common stock outstanding. Except as otherwise indicated, the beneficial owners listed below have sole voting and investment power with respect to all shares owned by them, except to the extent such power is shared by a spouse under applicable law. The information provided in the table below is based on the Company’s records, information filed publicly with the SEC and other information provided to the Company. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Stock Non-Voting Common Stock % of Combined ​ Number % of ​ Number % of ​ Total Voting Name and Address of Beneficial Owner**(1) of Shares Shares ​ of Shares Shares ​ Power Stockholders Beneficially Owning More Than 5% ​ ​ ​ ​ ​ ​ ​ ​ Non-Management ​ ​ ​ ​ ​ ​ ​ ​ AIGH Capital Management, LLC(2) 1,800,000 9.7 % — * ​ 9.7 % Named Executive Officers and Directors ​ ​ ​ ​ ​ ​ ​ ​ Darren R. Jamison — * — * * ​ Frederick S. Hencken III — * ​ — * ​ * ​ John J. Juric — * 114,560 22.5 % * Vince J. Canino — * — * * ​ Robert C. Flexon 61,798 0.3 % 60,795 12.0 % 0.3 % Yon Y. Jorden 74,197 0.4 % 60,795 12.0 % 0.4 % Robert F. Powelson 51,560 0.3 % 60,795 12.0 % 0.3 % Denise M. Wilson 48,928 0.3 % 60,795 12.0 % 0.3 % Ping Fu 30,372 0.2 % 60,795 12.0 % 0.2 % John P. Miller — * ​ — * ​ * ​ Mark Funaki — * ​ — * ​ * ​ All directors, director nominees and executive officers as a group (9 persons) 266,855 1.4 % 418,535 82.3 % 1.4 % * Less than one percent. 84 Table of Contents ** Unless otherwise indicated, the address of each person listed is c/o Capstone Green Energy Holdings, Inc., 16640 Stagg Street, Van Nuys, California 91406. (1) In computing the number of shares beneficially owned by an individual and the percentage ownership of that individual, shares of common stock, shares of non-voting common stock and shares underlying options held by that individual that are currently exercisable, or will become exercisable within 60 days from May 31, 2024, are deemed outstanding. In addition, shares underlying RSUs that will vest within 60 days from May 31, 2024 are deemed outstanding. Percentage of combined total voting power excludes our non-voting common stock, any shares of non-voting common stock underlying options held by that individual that are currently exercisable, or will become exercisable within 60 days from May 31, 2024, or any shares of non-voting common stock underlying RSUs that will vest within 60 days from May 31, 2024 , as our non-voting common stock is non-voting. (2) AIGH Capital Management, LLC (“AIGH”) filed a Schedule 13G on September 29, 2023 reporting beneficial ownership, as of September 28, 2023, of the number of shares reflected in the above table. AIGH reported having sole voting power and sole dispositive power over 1,800,000 shares of common stock. The business address of AIGH is 6006 Berkeley Avenue, Baltimore, MD 21209. Stock Ownership Guidelines In 2012, the Board established stock ownership guidelines applicable to senior executives (including the NEOs) and non-employee directors in order to further align the interests of executives and directors with the interests of stockholders. These ownership guidelines provide that the subject persons should own common stock equal in value to a multiple of their annual salary (or, in the case of directors, their annual retainer) as follows: ​ ​ ​ ​ Chief Executive Officer 4 times annual base salary Executive Vice Presidents ​ 2 times annual base salary ​ Senior Vice Presidents and other NEOs ​ 1 times annual base salary ​ Non-employee members of the Board ​ 4 times annual retainer ​ Covered persons are expected to hold the specified amount of stock within five years from the later of June 6, 2012 or the date they become subject to the ownership guidelines. Although, the Board has extended the amount of time in which covered persons will be expected to hold the specified amount of stock based on the recent low price of the Company’s stock, the Board is committed to increasing the stock ownership of the executive team and the non-employee members of the Board within the next several years. The Board will continue to monitor progress towards the achievement of the ownership guidelines. Clawbacks Prior to the Effective Date, it was the policy of the Company, to the extent determined to be appropriate by the Board, in their sole discretion, based on relevant facts and circumstances, in connection with any material restatement of any financial statements included in a filing by the Company with the SEC, because of noncompliance with financial reporting requirement under federal securities laws, to require its executive officers to repay to the Company, upon demand, any excess proceeds from any incentive compensation received by the executive officer. Alternatively, the Board could in their sole discretion may reduce the amount of future compensation, in accordance with applicable law, including, without limitation, any future salary, bonus or severance, or the future grant or vesting of any equity award, payable to any executive officer by an amount equal to the excess proceeds from incentive compensation received by the executive officer. Any repayment or reduction in future compensation pursuant to this policy is in addition to, and not in lieu of, any other relief available to the Company. On the Effective Date, the Company adopted the Executive Officer Incentive Compensation Recoupment (Clawback) Policy in accordance with Rule 10D-1 of the Exchange Act (the “Clawback Policy”). The Clawback Policy applies to incentive-based compensation that is granted, earned or vested based wholly or in part upon the attainment of a financial reporting measure and requires the Company to recover Erroneously Awarded Compensation (as defined below) from covered executive officers in the event that the Company is required to prepare an Accounting Restatement (as defined below) (except in certain limited circumstances). Current and former covered executive officers of the Company are subject to the Clawback Policy regardless of whether such covered executive officers engaged in misconduct or otherwise caused or contributed to the requirement for an Accounting Restatement. 85 Table of Contents “Erroneously Awarded Compensation” means, in the event of an accounting restatement, the amount of incentive-based compensation previously received by covered executive officers that exceeds the amount of incentive-based compensation that otherwise would have been received had it been determined based on the restated amounts in such accounting restatement, and must be computed without regard to any taxes paid by the relevant covered executive officer. “Accounting Restatement” means an accounting restatement of the Company’s financial statements due to the Company’s material noncompliance with any financial reporting requirement under U.S. federal securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or to correct an error that is not material to the previously issued financial statements, but that would result in a material misstatement if the error were corrected or left uncorrected in the current period. In connection with the Restatement, the Board expects to seek a recoupment of certain incentive compensation paid to certain former executive officers of the Company. Anti-Hedging Policy The Company’s insider trading policy prohibits officers and directors and employees designated by the Company’s executive officers as more likely to have access to material, nonpublic information (and their family members, including spouses, minor children, or any other family members living in the same household) from engaging in short sales of the Company’s common stock prohibited by Section 16 of the Exchange Act, i.e., sales of shares which the insider does not own at the time of sale, or sales of common stock against which the insider does not deliver the shares within 20 days after the sale involving the Company’s securities, including the Company’s common stock, options or warrants. The insider trading policy further directs officers, directors and employees designated by the Company’s executive officers as more likely to have access to material, nonpublic information (and their family members, including spouses, minor children, or any other family members living in the same household) to obtain clearance from the Company’s Audit Committee prior to buying or selling puts, calls, other derivative securities of the Company or any derivative securities that that provide the economic equivalent of ownership of any of the Company’s securities or an opportunity, direct or indirect, to profit from any change in the value of the Company’s securities or engage in any other hedging transaction with respect to the Company’s securities. Any request for approval of such a pledge by an insider must be submitted to the Audit Committee in writing at least two (2) weeks prior to the proposed execution of documents evidencing the proposed transaction. Any such request submitted by an insider will be considered by the Audit Committee on a case-by-case basis and, if permitted, shall be subject to all of the other restrictions set forth in the Company’s trading policy. Anti-Pledging Policy The Company’s insider trading policy also states that no insider may pledge Company securities as collateral for a loan (or modify an existing pledge) unless the pledge has been approved by the Audit Committee of the Board. Any request for approval of such a pledge by an insider must be submitted to the Audit Committee in writing at least two (2) weeks prior to the proposed execution of documents evidencing the proposed pledge. Any such request submitted by an insider will be considered by the Audit Committee on a case-by-case basis and, if permitted, shall be subject to all of the other restrictions set forth in the Company’s trading policy. Compliance The responsibilities and authority of the Compensation and Human Capital Committee are set forth in its charter, which is intended to set forth best practices for compensation. The members of the Compensation and Human Capital Committee are all “independent directors,” as defined under Nasdaq rules. Equity incentive awards are granted by the Compensation and Human Capital Committee in a manner that is intended to satisfy Rule 16b-3 under the Exchange Act. 86 Table of Contents Securities Authorized for Issuance Under Equity Compensation Plans ​ The following table sets forth information regarding securities authorized for issuance under equity compensation plans as of March 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ ​ ​ Number of ​ ​ ​ ​ securities ​ ​ ​ securities to ​ ​ ​ ​ remaining ​ ​ ​ be issued ​ ​ ​ ​ available for ​ ​ ​ upon exercise ​ Weighted-average ​ future issuance ​ ​ ​ of outstanding ​ exercise price of ​ under equity ​ ​ ​ options and ​ outstanding ​ compensation ​ Plan category ​ rights ​ options and rights ​ plans ​ Equity Compensation Plans Approved by Securityholders 845,244 $ 197.54 984,411 (1) Equity Compensation Plans Not Approved by Securityholders ​ — ​ ​ — ​ — ​ Total 845,244 $ 197.54 (2) 984,411 ​ (1) These shares available for stock options, restricted stock, RSUs, PRSUs and other awards under the 2017 Plan. (2) The weighted-average exercise price does not take into account RSUs and PRSUs as there is no exercise price associated with RSUs and PRSUs. Capstone Green Energy Holdings, Inc. 2023 Equity Incentive Plan In connection with Emergence, on November 30, 2023, the Capstone Green Energy Holdings, Inc. 2023 Equity Incentive Plan (the “Incentive Plan”) was approved and adopted by the Board. The Incentive Plan is intended to, among other things, (i) attract and retain the types of employees, consultants and directors who will contribute the Company’s long-term success, (ii) provide incentives that align the interests of employees, consultants and directors with those of the stockholders of the Company, and (iii) promote the success of the Company’s business. The Incentive Plan was not approved by the Company’s stockholders. All outstanding unvested equity awards outstanding under the Capstone Green Energy Corporation 2017 Equity Incentive Plan were cancelled on the Effective Date in accordance with the Plan. The Incentive Plan is administered by the Compensation and Human Capital Committee or the Board. No more than 3,000,000 shares of New Common Stock are available for the grant of awards under the Incentive Plan. The Company intends to issue equity awards to incentivize employees whose unvested equity awards were terminated in accordance with the Plan. The aggregate value of awards granted during a single fiscal year to any non-employee director, together with any cash fees paid or to be paid to such non-employee director during the fiscal year and the value of awards granted to such non-employee director under any other equity compensation plan of the Company during the fiscal year, will not exceed a total value of $300,000. The Board at any time, and from time to time, may amend or terminate the Incentive Plan. However, (i) in some situations, no amendment shall be effective unless approved by the stockholders of the Company to the extent stockholder approval is necessary to satisfy any applicable laws, and (ii) rights under any award granted before an amendment shall not be impaired by any amendment without the grantee’s written consent. 87 Table of Contents Item 13. Certain Relationships and Related Transactions, and Director Independence. Certain Relationships and Related Transactions The Audit Committee has adopted written policies and procedures regarding related party transactions. The policies and procedures require that the Audit Committee, whose members are all independent directors, review and approve all related party transactions. This review covers any material transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we were or are to be a participant, and a related person had or will have a direct or indirect material interest, including, purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related person. A “related person” is any person who is or was one of our executive officers, directors or director nominees or is a holder of more than 5% of our common stock, or their immediate family members or any entity owned or controlled by any of the foregoing persons. In determining whether to approve or ratify a related party transaction, the Audit Committee considers, among other factors, whether the related party transaction is on terms no more favorable than terms generally available to an unaffiliated third party under the same or similar circumstances, the extent of the related person’s interest in the transaction and, in the case of directors and officers, whether the provisions of Section 144 of the Delaware General Corporation Law have been met. Any director who is a related person with respect to a transaction under review may not participate in the discussion or approval of the transaction. On May 20, 2022, the Company entered into a National Account Agreement (the “National Account Agreement”) with Capstone Engineered Solutions (“CES”), a corporation wholly owned by our former Chief Revenue Officer, Mr. Crouse. Under the terms of the National Account Agreement, CES is authorized to market, actively promote, and sell the Company’s products, parts, and services. The dollar value of this contract will depend on the amount of sales generated by CES. On May 20, 2022, the Company also entered into a Consulting Agreement with CES, whereby CES will provide certain engineering services to the Company on an as needed basis at a rate of $150 per hour. Additionally on May 10, 2022, the Company entered into an agreement with CES, whereby CES will provide general contract and installation services for one of the Company’s Energy as a Service projects for approximately $0.2 million. The aggregate amount paid to CES in Fiscal 2023 was $0.3 million. Director Independence and Board Structure The Board is committed to having a sound governance structure that promotes the best interests of all of the Company’s stockholders. To that end, the Board has evaluated and actively continues to examine emerging corporate governance trends and best practices. Stockholder perspectives play an important role in that process. The following are the key aspects of the Company’s governance structure: ● The Board is predominantly independent. Of our seven directors, one (our President and Chief Executive Officer) is an employee of the Company. Further, the Board has affirmatively determined that all six of our other directors are independent under SEC and Nasdaq corporate governance rules, as applicable. ● Our board committees are comprised exclusively of independent directors. ● Our independent directors meet in executive session at every regularly scheduled board and committee meeting. ● We have separated the roles of Chair of the Board and Chief Executive Officer. Our Chair focuses on board oversight responsibilities, strategic planning, setting board agendas and mentoring company officers, as well as facilitating communications between the Board and management. Mr. Flexon served as both Chairman and Interim President and Chief Executive Officer from August 22, 2023 until March 10, 2024, following the departure of our former President and Chief Executive Officer Darren Jamison and in order to lead the Company through its bankruptcy and financial restructuring. ● Our Board is very active and our directors are engaged. As noted above, each of our directors attended more than 75% of the 2023 Fiscal Year board meetings and meetings of the committees on which such director served. 88 Table of Contents We believe our Board structure serves the interests of stockholders by balancing board continuity and the promotion of long-term thinking with the need for director accountability. Item 14. Principal Accounting Firm Fees and Services. The table below provides information concerning fees for services rendered by our current principal independent registered public accounting firm, Marcum, for the audit of our annual consolidated financial statements for the fiscal years ended March 31, 2023 and March 31, 2022. All fees described below were pre-approved by the Audit Committee. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amount of Fees Description of Fees ​ 2023 ​ 2022 Audit Fees $ 1,312,735 $ 424,784 ​ Audit-Related Fees ​ — ​ — ​ Tax Fees ​ — ​ — ​ All Other Fees ​ — ​ — ​ Total ​ $ 1,312,735 ​ $ 424,784 ​ Audit Fees These fees were primarily for professional services rendered by Marcum in connection with the audit of the Company’s consolidated annual financial statements and reviews of the interim condensed consolidated financial statements included in the Company’s quarterly reports on Form 10-Q for the first three fiscal quarters of the 2023 Fiscal Year and the 2022 Fiscal Year, respectively. The fees also relate to Marcum’s comfort letters and consents related to SEC filings. Finally, of the total amount for Fiscal 2023, $406,850 pertained to fees incurred in connection with the restatement of our March 31, 2022 and 2021 consolidated annual financial statements. 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 Form 10-K. 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. ​ ​ ​ 89 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES INDEX TO CONSOLIDATED FINANCIAL STATEMENTS ​ Page Report of Independent Registered Public Accounting Firm (PCAOB 00 688 ); Marcum LLP, Los Angeles, CA ​ F-2 Consolidated Financial Statements: ​ ​ Consolidated Balance Sheets as of March 31, 2023 and 2022 ​ F-5 For the years ended March 31, 2023 and 2022: ​ ​ Consolidated Statements of Operations ​ F-6 Consolidated Statements of Stockholders’ (Deficiency) Equity ​ F-7 Consolidated Statements of Cash Flows ​ F-8 Notes to Consolidated Financial Statements ​ F-9 ​ 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 Stockholders 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, 2023 and 2022, the related consolidated statements of operations, stockholders’ equity (deficiency) and cash flows for each of the two years in the period ended March 31, 2023, 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, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended March 31, 2023, in conformity with accounting principles generally accepted in the United States of America. Explanatory Paragraph – Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 2, the Company has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. 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 audits 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 provide a reasonable basis for our opinion. Critical Audit Matters Critical audit matters 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 critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter 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 matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. F-2 Table of Contents Inventory Reserves Description of Matter The Company’s gross inventory and inventory reserve totaled approximately $42.9 million and $2.5 million as of March 31, 2023, respectively. In addition, approximately $3.1 million of inventory was classified as long-term on the Company’s consolidated balance sheet. As described in Note 2 to the consolidated financial statements, management values inventories at the lower of cost (determined on a first-in-first-out basis) or net realizable value and estimates a potential reserve for obsolete or slow-moving goods. In determining this estimate, the Company will both (a) perform a monthly analysis to compare the previous 36-month usage of its inventory to the current quantities on hand and (b) judgmentally review their reserve estimate for any non-recurring adjustments that may be necessary based on their knowledge of the business. Changes in the assumptions used could have a significant impact on the valuation of inventory. The principal considerations for our determination that performing procedures relating to the inventory reserve is a critical audit matter are (i) the significant judgement required by management when determining the estimate for the inventory reserve; 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 inventory reserve. 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: ● Evaluated the design and implementation of the Company’s information technology (“IT”) general controls pertaining to relevant applications used by the Company in reviewing its inventory usage and determining an appropriate inventory reserve; ● Obtained an understanding of the Company’s financial reporting processes in place in order to estimate the inventory reserve; ● Compared the assumptions made by management in evaluating its-slow moving or obsolete goods to prior years to ensure such estimates and policies have remained consistent; ● Tested management’s calculation and significant assumptions made in determining its current year inventory reserve, which included substantively testing the inventory usage and movement used in such calculations; ● Performed an independent sensitivity analysis to determine whether or not material differences in the reserve existed if management was to use a different look-back time period in their reserve calculation; and ● Performed a retrospective analysis of the Company’s reserve by comparing the Company’s unreserved quantities in prior periods to the actual current period usage and movement. ​ Revenue Recognition – Bill and Hold Transactions Description of Matter The Company’s revenues totaled approximately $73.9 million for the year ended March 31, 2023. During the year ended March 31, 2023, the Company utilized third-party warehouses in the normal course of business to store customer-ordered equipment for various periods of time until such customers we ready to take delivery of the equipment. Such transactions, which are commonly referred to as Bill-and-Hold transactions, required the Company to evaluate whether or not revenue is properly recognized in connection with the ASC 606. The Company has historically failed to properly identify and apply the appropriate guidance under ASC 606 to such transactions, which has resulted in the identification of material weaknesses in internal controls over financial reporting. The principal consideration for our determination that performing procedures related to bill and hold transactions was a critical audit matter was the high degree of effort in performing the audit procedures to test such transactions. F-3 Table of Contents 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 the following: ● Evaluated management’s revised technical accounting analysis in applying the provisions of ASC 606 as it pertains to bill and hold transactions. ● Performed an analysis comparing invoice and custodial information from the third-party warehouses to the Company’s records to ensure accuracy and completeness of the population of bill and hold transactions; ● Confirmed directly with the customers the periods for which they had taken delivery of the goods; ● Selected a sample of sales transactions to substantively test whether or not the revenue was properly recognized in the appropriate period; and ● For transactions where a third-party warehouse was used to hold product, we examined evidence between the Company and customer to determine if the bill-and-hold revenue recognition was properly applied. ​ Factory Protection Plan Liability Description of Matter The Company’s factory protection plan (“FPP”) liability as of March 31, 2023 was $10.8 million. The Company accounts for the costs of such factory protection plans at the time the customer orders the spare part. The Company has historically failed to properly identify and apply the appropriate accounting guidance to such transactions, which has resulted in the identification of material weaknesses in internal controls over financial reporting. The principal consideration for our determination that performing procedures related to the FPP liability was a critical audit matter was the high degree of effort in performing the audit procedures to test such transactions. 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 the following: ● Evaluated management’s revised technical accounting analysis in applying the provisions of ASC 606 as it pertains to FPP transactions; and ● Performed a substantive test of details and cutoff testing procedures over such transaction to ensure (i) costs associated with the FPP contracts were recorded in the appropriate period and (ii) accuracy and completeness of the population of such transactions. ​ ​ /s/ Marcum LLP ​ Marcum LLP ​ We have served as the Company’s auditor since 2017. ​ ​ Los Angeles, CA June 12, 2024 ​ F-4 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share amounts) ​ ​ ​ ​ ​ ​ ​ ​ March 31, March 31, ​ 2023 2022 Assets ​ ​ ​ ​ ​ Current Assets: ​ ​ ​ ​ ​ ​ Cash and cash equivalents $ 12,839 ​ $ 22,559 ​ Accounts receivable, net of allowances of $ 4,813 at March 31, 2023 and $ 586 at March 31, 2022 7,102 ​ 15,894 ​ Inventories, net 37,328 ​ 30,167 ​ Prepaid expenses and other current assets 7,447 ​ 5,519 ​ Total current assets 64,716 ​ 74,139 ​ Property, plant, equipment and rental assets, net 24,275 ​ 17,792 ​ Finance lease right-of-use assets ​ 4,529 ​ ​ 246 ​ Operating lease right-of-use assets ​ 8,808 ​ ​ 5,959 ​ Non-current portion of inventories 3,112 ​ 1,680 ​ Other assets 2,591 ​ 2,676 ​ Total assets $ 108,031 ​ $ 102,492 ​ Liabilities and Stockholders’ (Deficiency) Equity ​ ​ ​ ​ ​ ​ Current Liabilities: ​ ​ ​ ​ ​ ​ Accounts payable and accrued expenses $ 30,290 ​ $ 25,130 ​ Accrued salaries and wages 1,223 ​ 1,147 ​ Accrued warranty reserve 1,576 ​ 1,483 ​ Deferred revenue 23,372 ​ 14,835 ​ Finance lease liability, current ​ 773 ​ ​ 89 ​ Operating lease liability, current ​ 2,492 ​ ​ 586 ​ Factory protection plan liability ​ 10,844 ​ ​ 9,170 ​ Term note payable ​ 50,983 ​ ​ 50,949 ​ Total current liabilities 121,553 ​ 103,389 ​ Deferred revenue, non-current ​ 817 ​ ​ 981 ​ Finance lease liability, non-current ​ 2,903 ​ ​ 190 ​ Operating lease liability, non-current ​ 6,588 ​ ​ 5,619 ​ Other non-current liabilities 265 ​ — ​ Total liabilities 132,126 ​ 110,179 ​ Commitments and contingencies (Note 13) ​ ​ ​ ​ ​ ​ Stockholders’ (Deficiency) Equity: ​ ​ ​ ​ ​ ​ Preferred stock, $ .001 par value; 1,000,000 shares authorized; none issued ​ — ​ ​ — ​ Common stock, $ .001 par value; 51,500,000 shares authorized, 18,511,555 shares issued and 18,394,541 shares outstanding at March 31, 2023; 15,398,368 shares issued and 15,296,735 shares outstanding at March 31, 2022 18 ​ 15 ​ Additional paid-in capital 955,228 ​ 946,969 ​ Accumulated deficit ( 977,202 ) ​ ( 952,583 ) ​ Treasury stock, at cost; 117,014 shares at March 31, 2023 and 101,633 shares at March 31, 2022 ( 2,139 ) ​ ( 2,088 ) ​ Total stockholders’ (deficiency) equity ( 24,095 ) ​ ( 7,687 ) ​ Total liabilities and stockholders' (deficiency) equity $ 108,031 ​ $ 102,492 ​ ​ ​ See accompanying notes to consolidated financial statements. F-5 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ ​ ​ 2023 ​ 2022 ​ ​ ​ Revenue, net: ​ ​ ​ ​ ​ ​ ​ Product and accessories ​ $ 35,033 $ 32,720 ​ Parts, service and rentals ​ ​ 38,849 ​ ​ 31,244 ​ Total revenue, net ​ ​ 73,882 ​ ​ 63,964 ​ Cost of goods sold: ​ ​ ​ ​ ​ ​ ​ Product and accessories ​ ​ 39,938 ​ ​ 37,106 ​ Parts, service and rentals ​ ​ 24,880 ​ ​ 21,217 ​ Total cost of goods sold ​ 64,818 ​ 58,323 ​ Gross profit ​ 9,064 ​ 5,641 ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ Research and development ​ 2,376 ​ 3,359 ​ Selling, general and administrative ​ 25,148 ​ 22,242 ​ Total operating expenses ​ 27,524 ​ 25,601 ​ Loss from operations ​ ( 18,460 ) ​ ( 19,960 ) ​ Other income (expense) ​ ( 33 ) ​ 642 ​ Interest income ​ 141 ​ 21 ​ Interest expense ​ ( 6,163 ) ​ ( 5,004 ) ​ Gain on debt extinguishment ​ ​ — ​ ​ 1,950 ​ Loss before provision for income taxes ​ ( 24,515 ) ​ ( 22,351 ) ​ Provision for income taxes ​ 7 ​ 19 ​ Net loss ​ ​ ( 24,522 ) ​ ​ ( 22,370 ) ​ Less: Deemed dividend on purchase warrant for common shares ​ ​ 97 ​ ​ — ​ Net loss attributable to common stockholders ​ $ ( 24,619 ) ​ $ ( 22,370 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per common share attributable to common stockholders—basic and diluted ​ $ ( 1.43 ) ​ $ ( 1.52 ) ​ Weighted average shares used to calculate basic and diluted net loss per common share attributable to common stockholders ​ 17,206 ​ 14,727 ​ ​ ​ See accompanying notes to consolidated financial statements. ​ F-6 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIENCY) EQUITY (In thousands, except share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ Common Stock ​ Paid-in ​ Accumulated ​ Treasury Stock ​ Stockholders’ ​ Shares Amount Capital Deficit Shares Amount Equity (Deficiency) Balance, April 1, 2021 ​ 12,898,144 ​ $ 13 ​ $ 934,381 ​ $ ( 930,213 ) 73,954 ​ $ ( 1,949 ) ​ $ 2,232 Purchase of treasury stock ​ — ​ ​ — ​ — ​ — 27,679 ​ ( 139 ) ​ ( 139 ) Vested restricted stock awards ​ 124,184 ​ ​ — ​ 100 ​ — — ​ — ​ 100 Stock-based compensation ​ — ​ ​ — ​ 1,245 ​ — — ​ — ​ 1,245 Stock awards to Board of Directors ​ 70,260 ​ ​ — ​ — ​ — — ​ — ​ — Issuance of common stock, net of issuance costs ​ 2,305,780 ​ ​ 2 ​ ​ 11,243 ​ ​ — ​ — ​ ​ — ​ ​ 11,245 Net loss ​ — ​ ​ — ​ — ​ ( 22,370 ) — ​ — ​ ( 22,370 ) Balance, March 31, 2022 ​ 15,398,368 ​ ​ 15 ​ ​ 946,969 ​ ​ ( 952,583 ) 101,633 ​ ​ ( 2,088 ) ​ ​ ( 7,687 ) Purchase of treasury stock ​ — ​ — ​ — ​ — 15,381 ​ ( 51 ) ​ ( 51 ) Vested restricted stock awards ​ 124,104 ​ — ​ 52 ​ — — ​ — ​ 52 Stock-based compensation ​ — ​ — ​ 863 ​ — — ​ — ​ 863 Stock awards to Board of Directors ​ 54,585 ​ — ​ — ​ — — ​ — ​ — Issuance of common stock, net of issuance costs ​ 2,934,498 ​ ​ 3 ​ ​ 7,247 ​ ​ — ​ — ​ ​ — ​ ​ 7,250 Deemed dividend on purchase warrant for common shares ​ — ​ ​ — ​ ​ 97 ​ ​ ( 97 ) ​ — ​ ​ — ​ ​ — Net loss ​ — ​ — ​ — ​ ( 24,522 ) — ​ — ​ ( 24,522 ) Balance, March 31, 2023 ​ 18,511,555 ​ $ 18 ​ $ 955,228 ​ $ ( 977,202 ) 117,014 ​ $ ( 2,139 ) ​ $ ( 24,095 ) ​ ​ See accompanying notes to consolidated financial statements. ​ F-7 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ ​ 2023 ​ 2022 Cash Flows from Operating Activities: ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 24,522 ) ​ $ ( 22,370 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ 3,177 ​ ​ 1,915 Amortization of financing costs and discounts ​ 68 ​ ​ 35 Amortization of right-of-use assets ​ ​ 1,330 ​ ​ 657 (Gain) loss on debt extinguishment ​ ​ — ​ ​ ( 1,950 ) Bad debt expense (recovery) ​ 4,277 ​ ​ 391 Inventory provision ​ 961 ​ ​ 791 Provision for warranty expenses ​ 592 ​ ​ 646 Stock-based compensation ​ 863 ​ ​ 1,245 Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ Accounts receivable ​ 4,060 ​ ​ ( 3,383 ) Inventories ​ ( 11,521 ) ​ ​ ( 9,105 ) Prepaid expenses, other current assets and other assets ​ ( 1,210 ) ​ ​ 164 Accounts payable and accrued expenses ​ 5,660 ​ ​ 5,098 Operating lease liability ​ ​ ( 1,304 ) ​ ​ ( 613 ) Accrued salaries and wages and long-term liabilities ​ 77 ​ ​ ( 743 ) Accrued warranty reserve ​ ( 499 ) ​ ​ ( 5,013 ) Deferred revenue ​ 8,373 ​ ​ 3,229 Factory protection plan liability ​ ​ 1,674 ​ ​ 1,508 Net cash used in operating activities ​ ( 7,944 ) ​ ( 27,498 ) Cash Flows from Investing Activities: ​ ​ ​ ​ ​ ​ Expenditures for property, plant, equipment and rental assets ​ ( 8,222 ) ​ ​ ( 9,924 ) Net cash used in investing activities ​ ( 8,222 ) ​ ( 9,924 ) Cash Flows from Financing Activities: ​ ​ ​ ​ ​ ​ Repayment of notes payable and lease obligations ​ ( 804 ) ​ ​ ( 685 ) Cash used in employee stock-based transactions ​ ( 52 ) ​ ​ ( 138 ) Net proceeds from issuance of common stock and warrants ​ 7,302 ​ ​ 11,271 Net cash provided by financing activities ​ 6,446 ​ 10,448 Net (decrease) in Cash and Cash Equivalents ​ ( 9,720 ) ​ ( 26,974 ) Cash and Cash Equivalents, Beginning of Period ​ 22,559 ​ 49,533 Cash and Cash Equivalents, End of Period ​ $ 12,839 ​ $ 22,559 Supplemental Disclosures of Cash Flow Information: ​ ​ ​ ​ ​ ​ Cash paid during the period for: ​ ​ ​ ​ ​ ​ Interest ​ $ 5,701 ​ $ 5,095 Income taxes ​ $ 13 ​ $ 20 Supplemental Disclosures of Non-Cash Information: ​ ​ ​ ​ ​ ​ Acquisition of property and equipment through accounts payable ​ $ 29 ​ $ 264 Renewal of insurance contracts financed by notes payable ​ $ 665 ​ $ 567 Issuance of common stock for services to be received ​ $ — ​ $ 75 Deemed dividend ​ $ 97 ​ $ — Right-of-use assets obtained in exchange for lease obligations ​ $ 8,170 ​ $ — Rental assets capitalized from inventory ​ $ 1,687 ​ $ — ​ ​ See accompanying notes to consolidated financial statements. ​ ​ F-8 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, on-site resilient green Energy as a Service (EaaS) 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. 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, and Capstone Turbine Financial Services, LLC, its wholly owned subsidiary that was formed in October 2015, after elimination of inter-company transactions. ​ ​ 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. F-9 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ 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. We evaluate all accounts aged over 60 days past payment terms. If the financial condition of our customers deteriorates or if other conditions arise that result in an impairment of their ability or intention to make payments, additional allowances may be required. Accounts receivable that is expected to be received past 12 months are recorded as non-current accounts receivable. The Company has determined any financing component of non-current receivables to be immaterial. Changes in the accounts receivable allowances are as follows (in thousands): ​ ​ ​ ​ ​ Balance, March 31, 2021 ​ $ 197 ​ Additions charged to expenses ​ 391 ​ Bad debt write-off ​ ( 2 ) ​ Balance, March 31, 2022 ​ $ 586 ​ Additions charged to expenses ​ 4,277 ​ Bad debt write-off ​ ( 50 ) ​ Balance, March 31, 2023 ​ $ 4,813 ​ 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, 2023 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. Revenue The Company derives its revenues primarily from the sale of microturbine products, accessories, parts, equipment rentals and 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 F-10 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ Microturbine Products The Company recognizes revenue when the performance obligation identified under the terms of the contract with its customer is satisfied, which generally occurs, for microturbine products, 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 a microturbine product is recognized at a point in time when the microturbine product is shipped to the customer. On occasion, the Company enters into bill-and-hold arrangements. Each bill-and-hold arrangement is reviewed and revenue is recognized only when certain criteria have been met: (i) the reason for the bill-and-hold arrangement is substantive; (ii) the product is segregated from the Company’s other inventory items held for sale; (iii) the product is ready for shipment to the customer; and (iv) the Company does not have the ability to use the product or direct it to another customer. Accessories The Company recognizes revenue when performance obligations identified under the terms of contracts with its customers are satisfied, which generally occurs, for accessories, upon the transfer of control in accordance with the contractual terms and conditions of the sale. Parts and Services Revenue from extended warranties 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. The Company extends payment terms past one year only on a limited basis, and thus any financing component is not considered material. Factory Protection Plan In addition to the provision of standard warranties, the Company offers comprehensive Factory Protection Plans (“FPP”) to minimize product downtime and guarantee maintenance costs to ensure the microturbine system will operate when needed and perform as intended at the lowest cost of ownership. Revenue related to the Company’s performance obligation to provide replacement parts as needed is recognized over the 30-day , noncancellable FPP contract period with automatic renewals for 5 , 10 , 15 , or 20 years under ASC 606. The related costs are accrued at the time a customer submits an order for a replacement part to reflect the Company’s obligation. The accrual reflects the Company’s best estimate of the probable liability under the replacement part obligation. The provision is periodically adjusted to reflect actual experience. FPP contracts typically go into effect once the standard warranty expires. The current carrying amount of the liability is $ 10.8 million. Some FPPs offer a labor reimbursement on the labor performed on a microturbine system. Due to the nature of the arrangement, labor reimbursements are accounted for under ASC 460. See below for additional information on the labor reimbursement within the FPP offering. 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 F-11 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ 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 other 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 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 stand-alone 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. 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 adjusts 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-12 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ Factory Protection Plan Service Cost Reimbursement Each FPP is a 30-day contract period with automatic renewals for 5 , 10 , 15 , or 20 years . As previously noted, some FPPs offer a labor reimbursement on the labor performed on a product. An Authorized Service Provider (ASP) must perform the labor. ASPs submit claims for labor reimbursements and are credited for the cost of labor if the repairs meet the Company’s prescribed standards. The Company is unable to develop a reasonable estimate of the maximum potential payout under these arrangements because the FPPs do not contain a limit on the number of labor reimbursements that may be submitted. However, given historical practice, the Company has priced the FPP to cover all costs incurred related to the labor reimbursement and is not exposed to significant losses over the FPP premium. The labor reimbursement is separate and distinct from the parts offering; therefore the Company allocates a portion of the transaction price to the labor reimbursement based on SSP. The Company applies judgment in determining the SSP as the labor reimbursement is not sold separately. The Company will recognize a liability at the inception of the executed FPP agreement for the premium received in advance for the Labor offering. Income will be recognized on a net, straight-line basis with labor reimbursement costs recognized when incurred. 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 in the Company’s statement of operations. There were no offsets to R&D during Fiscal 2023 and 2022. 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 positions 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, 2023, 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 $ 12.1 million as of March 31, 2023. 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 E-Finity Distributed Generation, LLC (“E-Finity”) and RSP Systems accounted for 12 % and 11 %, respectively, of the Company’s revenue for Fiscal 2023. Sales to E-Finity accounted for 18 % of the Company’s revenue for Fiscal 2022. Additionally, E-Finity accounted for 12 % of net accounts receivable as of March 31, 2023, and E-Finity and Radian Oil & Gas Services Co. accounted for 28 % and 14 % of net accounts receivable as of March 31, 2022, respectively. F-13 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ 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, 2023 and 2022 were 0.8 million and 0.6 million, respectively. As of March 31, 2023 and 2022, the number of warrants excluded from diluted net loss per common share computations was approximately 3.8 million and 0.8 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 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 or life of the asset based on the classification of the lease. 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 twelve 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. Going Concern In connection with preparing the consolidated financial statements for the fiscal year ended March 31, 2023, 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 for the next twelve months from the date of issuance of our Fiscal 2023 consolidated financial statements. The Company incurred a net loss of $ 24.5 million and used cash from operating activities of $ 7.9 million during Fiscal 2023. As of March 31, 2023, the Company had cash and cash equivalents of $ 12.8 million, and outstanding debt of $ 51.0 million at fair value. We reduced our outstanding debt via proceedings in U.S. Chapter 11 Bankruptcy Court. On September 28, 2023, the Company filed for a prepackaged financial restructuring with its Senior Lender, Goldman Sachs under the U.S. Chapter 11 Bankruptcy laws, as further discussed in Note 17–Subsequent Events in the Notes to Consolidated Financial Statements. The Company emerged from Bankruptcy on December 7, 2023, and affected the financial and organizational restructuring. Given our current cash position, lack of liquidity, limits to accessing capital and debt funding options, the economic and market risk of the forecast, there is substantial doubt regarding the Company’s ability to continue as a going concern and our ability to meet our financial obligations as they become due over the next twelve months from the date of issuance of our Fiscal 2023 financial statements. 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, ​ 2023 2022 United States ​ $ 45,071 ​ $ 30,269 ​ Mexico ​ 2,990 ​ 3,706 ​ All other North America ​ 1,412 ​ 600 ​ Total North America ​ 49,473 ​ 34,575 ​ Russia ​ 3,045 ​ 3,381 ​ All other Europe ​ ​ 11,553 ​ ​ 10,872 ​ Total Europe ​ ​ 14,598 ​ ​ 14,253 ​ Asia ​ 3,251 ​ 5,978 ​ Australia ​ 2,840 ​ 4,195 ​ All other ​ 3,720 ​ 4,963 ​ Total Revenue ​ $ 73,882 ​ $ 63,964 ​ The following table summarizes the Company’s revenue by product (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ 2023 2022 C30 ​ $ 383 ​ $ 1,101 ​ C65 ​ ​ 12,021 ​ ​ 8,763 ​ C200 ​ 4,035 ​ 3,213 ​ C400 ​ 321 ​ 1,555 ​ C600 ​ 4,361 ​ 5,344 ​ C800 ​ — ​ 4,935 ​ C1000 ​ 12,075 ​ 6,456 ​ Microturbine Products ​ $ 33,196 ​ $ 31,367 ​ Accessories ​ ​ 1,837 ​ ​ 1,353 ​ Total Product and Accessories ​ ​ 35,033 ​ ​ 32,720 ​ Parts and Service ​ ​ 30,684 ​ ​ 28,475 ​ Rentals ​ 8,165 ​ 2,769 ​ Total Revenue ​ $ 73,882 ​ $ 63,964 ​ ​ Substantially all of the Company’s operating assets are in the United States. Impact of Recently Issued Accounting Standards Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments in this ASU provide guidance for estimating credit losses on certain types of financial instruments, including trade receivables, by introducing an approach based on expected losses. The expected loss approach will require entities to incorporate considerations of historical information, current information and reasonable forecasts. With certain exceptions, the transition to the new guidance will be through a cumulative effect adjustment to opening accumulated deficit as of the beginning of the first reporting period in which the guidance is adopted. In November 2019, the FASB issued ASU 2019-10, Financial Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) (“ASU 2019-10”), which defers the adoption of ASU F-15 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ 2016-13 for Smaller Reporting Companies (“SRCs”) as defined by the SEC for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. On April 1, 2023 , the Company adopted Financial Instruments—Credit Losses (Topic 326). The standard will require entities to record a cumulative-effect adjustment to the balance sheet as of the beginning of the first reporting period in which the guidance is effective. The adoption did not have a material impact on its financial statements. 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 FIFO basis) or net realizable value and consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ March 31, ​ ​ 2023 2022 Raw materials ​ $ 29,222 ​ $ 20,071 ​ Finished goods ​ ​ 13,695 ​ ​ 13,637 ​ Total ​ ​ 42,917 ​ ​ 33,708 ​ Less: inventory reserve ​ ​ ( 2,477 ) ​ ​ ( 1,861 ) ​ Less: non-current portion ​ ​ ( 3,112 ) ​ ​ ( 1,680 ) ​ Total inventory, net-current portion ​ $ 37,328 ​ $ 30,167 ​ ​ 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, 2023 and 2022 were 0.9 years and 1.2 years, respectively. The Company expects to use the non-current portion of the inventories on hand as of March 31, 2023 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 ​ $ 1,469 ​ 25 to 36 months ​ 1,643 ​ Total ​ $ 3,112 ​ ​ 4. Property, Plant and Equipment Property, plant, equipment and rental assets consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ March 31, ​ ​ 2023 2022 Machinery, equipment, automobiles and furniture ​ $ 14,760 ​ $ 15,945 Leasehold improvements ​ 8,868 ​ 8,848 Molds and tooling ​ ​ 3,516 ​ ​ 3,469 ​ Rental assets ​ ​ 26,868 ​ ​ 16,751 ​ ​ ​ 54,012 ​ 45,013 ​ Less: accumulated depreciation ​ ( 29,737 ) ​ ( 27,221 ) ​ Total property, plant, equipment and rental assets, net ​ $ 24,275 ​ $ 17,792 ​ ​ F-16 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ 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 $ 3.2 million and $ 1.8 million for Fiscal 2023 and 2022, respectively. 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, 2023 and March 31, 2022. 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 $ 23,100 and $ 22,600 were earned by Solar for Fiscal 2023 and 2022, respectively. Earned royalties of approximately $ 99,500 and $ 76,400 were unpaid as of March 31, 2023 and 2022, respectively, and are included in accrued expenses in the accompanying consolidated balance sheets. Amortization expense for the intangible assets was zero and $ 0.1 million for Fiscal 2023 and 2022, 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 adjusts 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 consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, March 31, ​ ​ 2023 ​ 2022 ​ Balance, beginning of the period ​ $ 1,483 ​ $ 5,850 ​ Standard warranty provision ​ 592 ​ 646 ​ Deductions for warranty claims ​ ( 499 ) ​ ( 5,013 ) ​ Balance, end of the period ​ $ 1,576 ​ $ 1,483 ​ ​ During the fourth quarter of Fiscal 2021, the Company recorded a specific $ 4.9 million accrual related to a reliability repair program to account for the replacement of remaining high-risk failure parts in some of the Company’s fielded units due to a supplier defect. As of March 31, 2023, the accrual related to this reliability repair program was zero as the Company has determined it replaced a sufficient quantity of high-risk failure parts in its fielded units under this reliability repair program and that it should be terminated. F-17 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ 7. Revenue Recognition The following table presents disaggregated revenue by business group (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ 2023 2022 Microturbine Products ​ $ 33,196 ​ $ 31,367 Accessories ​ ​ 1,837 ​ ​ 1,353 Total Product and Accessories ​ ​ 35,033 ​ ​ 32,720 Parts and Service (1) ​ ​ 30,684 ​ ​ 28,475 Rentals ​ 8,165 ​ 2,769 Total Revenue ​ $ 73,882 ​ $ 63,964 ​ (1) $ 0.4 million and $ 0.3 million of parts and service revenue reported were non-ASC-606 revenue related to the labor reimbursement of FPP contracts as of March 31, 2023 and 2022, respectively. Contract Balances The Company’s deferred revenues consist of advance payments for microturbine products, parts, accessories, and parts ordered under an FPP plan, but not yet delivered (contract liabilities), as well as advanced payments on service obligations and extended warranties. The current portion of deferred revenue is included in Deferred revenue and the non-current portion of deferred revenue is included in Deferred revenue, non-current in the consolidated balance sheets. As of March 31, 2023, the balance of deferred revenue was approximately $ 24.2 million compared to $ 15.8 million as of March 31, 2022. This overall increase in the balance of deferred revenue of $ 8.4 million during Fiscal 2023 was comprised of increases in deferred revenue attributable to deposits of $ 8.4 million and FPP contracts of $ 0.3 million, offset by a decrease in deferred revenue attributable to Distributor Support System (“DSS program”) of $ 0.3 million. Changes in deferred revenue are as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ March 31, ​ ​ ​ 2023 ​ 2022 ​ Opening balance, beginning of the period ​ $ 15,816 ​ $ 12,587 ​ Closing balance, end of the period ​ $ 24,189 ​ $ 15,816 ​ Revenue recognized in the period from: ​ ​ ​ ​ ​ ​ ​ Amounts included in contract liability at the beginning of the period ​ $ 13,026 ​ $ 11,303 ​ ​ 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. As of March 31, 2023, approximately $ 4.9 million of revenue is expected to be recognized from remaining performance obligations for FPP service contracts. The Company expects to recognize revenue on approximately $ 4.1 million of these remaining performance obligations over the next 12 months and the balance of $ 0.8 million will be recognized thereafter. F-18 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ 8. Income Taxes Loss before provision for income taxes consisted of the following for the years ended March 31, 2023 and 2022 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ 2023 2022 United States ​ $ ( 24,560 ) ​ $ ( 22,391 ) ​ Foreign 45 40 ​ Loss before provision for income taxes ​ $ ( 24,515 ) ​ $ ( 22,351 ) ​ ​ 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 $ 7,000 and $ 19,000 for the years ended March 31, 2023 and March 31, 2022, respectively. The current income taxes were related to state income and foreign taxes. The Company did no t have current federal income taxes for the fiscal years ended March 31, 2023 and March 31, 2022. 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, ​ 2023 2022 Federal income tax benefit at the statutory rate ​ $ ( 5,148 ) ​ $ ( 4,694 ) ​ State taxes, net of federal effect ( 1,837 ) ( 714 ) ​ Foreign taxes ​ — ​ 5 ​ Expiring NOLs and tax credits ​ ​ 10,156 ​ ​ 11,028 ​ Impact of state rate change ​ 107 ​ ( 142 ) ​ Valuation allowance ​ ( 3,532 ) ​ ( 5,552 ) ​ Shortfall in tax benefit—stock compensation ​ 262 ​ 75 ​ True-up ​ ​ ( 5 ) ​ ​ — ​ Other ​ 4 ​ 13 ​ Income tax expense ​ $ 7 ​ $ 19 ​ ​ 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, 2023 and 2022 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ ​ 2023 2022 Deferred tax assets: ​ ​ ​ ​ ​ ​ Inventories ​ $ 3,456 ​ $ 2,194 Warranty reserve ​ 3,140 ​ 2,513 Bad debt reserve ​ ​ 1,217 ​ ​ 199 Deferred revenue ​ 2,385 ​ 2,284 Net operating loss (“NOL”) carryforwards ​ 126,180 ​ 130,928 Tax credit carryforwards ​ 12,686 ​ 13,370 Depreciation, amortization and impairment loss ​ 496 ​ — Lease liability ​ 2,113 ​ 1,464 Interest limitation ​ 6,330 ​ 4,655 Other ​ 1,279 ​ 1,095 Deferred tax assets ​ 159,282 ​ 158,702 Valuation allowance for deferred tax assets ​ ( 153,171 ) ​ ( 156,702 ) Deferred tax assets, net of valuation allowance ​ 6,111 ​ 2,000 Deferred tax liabilities: ​ ​ ​ ​ ​ ​ Depreciation, amortization and impairment loss ​ ( 3,998 ) ​ ( 594 ) Right of use assets ​ ( 2,113 ) ​ ( 1,406 ) 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 years ended March 31, 2023 and 2022 was $ 3.5 million and $ 5.5 million, respectively. The Company’s NOL and tax credit carryforwards for federal and state income tax purposes at March 31, 2023 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Expiration ​ ​ Amount Period Federal NOL generated before April 1, 2018 ​ $ 449,151 2023 - 2038 ​ Federal NOL generated after March 31, 2018 ​ $ 89,643 Indefinite ​ State NOL ​ $ 185,650 2025 - 2039 ​ Federal tax credit carryforwards ​ $ 5,029 2023 - 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 derecognition, 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, 2023 and 2022 was $ 1.9 million. There were no interest or penalties related to unrecognized tax benefits as of March 31, 2023 or March 31, 2022. The amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate as of March 31, 2023 and 2022 was $ 1.9 million. However, this impact would be offset by an equal increase in the deferred tax valuation allowance as the F-20 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ 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, 2023 and 2022 was $ 5.0 million and $ 9.7 million, and $ 5.7 million and $ 9.7 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, 2021 ​ $ 1,946 ​ Gross increase related to prior year tax positions ​ — ​ Gross increase related to current year tax positions ​ — ​ Lapse of statute of limitations ​ ( 48 ) ​ Balance at March 31, 2022 ​ $ 1,898 ​ Gross increase related to prior year tax positions ​ — ​ Gross increase related to current year tax positions ​ — ​ Lapse of statute of limitations ​ ( 42 ) ​ Balance at March 31, 2023 ​ $ 1,856 ​ ​ 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 2017. 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, 2023. When applicable, the Company accounts for interest and penalties generated by tax contingencies as interest and other expense, net in the statements of operations. 9. Stockholders’ Equity (Deficiency) The following table summarizes, by consolidated statements of operations line item, stock-based compensation expense (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ March 31, ​ ​ 2023 2022 Cost of goods sold ​ $ 37 $ 109 ​ Research and development ​ 97 ​ 79 ​ Selling, general and administrative ​ 729 ​ 1,057 ​ Stock-based compensation expense ​ $ 863 ​ $ 1,245 ​ ​ 2000 and 2017 Equity Incentive Plans In June 2017, the Company’s Board of Directors (the “Board”) adopted the Capstone Green Energy 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 initially provided for awards of up to 300,000 shares of Common Stock. The 2017 Plan is administered by the Compensation and Human Capital 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 Board adopted an amendment to 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. Since this time, the Company’s stockholders have approved amendments to increase the aggregate number of shares authorized for issuance under the 2017 Plan by an additional 2,200,000 shares of Common Stock, including, most recently, on June 7, 2022, the Board adopted Amendment No. 6 (the F-21 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ “Plan Amendment”) of the 2017 Plan to increase the aggregate number of shares of Common Stock authorized for issuance under the 2017 Plan by 600,000 shares of Common Stock. The Plan amendment was approved by the Company’s stockholders at the 2022 annual meeting of stockholders on September 12, 2022. As of March 31, 2023, there were 984,411 shares available for future grants under the 2017 Plan. Restricted Stock Units and Performance Restricted Stock Units The Company issued restricted stock units under the Company’s 2000 Equity Incentive Plan, as well as issued (and may in the future issue) 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 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 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ Average Grant ​ ​ ​ ​ ​ Date Fair ​ Restricted Stock Units and Performance Restricted Stock Units ​ Shares ​ Value Non-vested restricted stock units outstanding at March 31, 2022 591,805 $ 5.66 ​ Granted 646,814 ​ ​ 2.04 ​ Vested and issued ( 179,471 ) ​ ​ 5.76 ​ Forfeited ( 216,517 ) ​ ​ 4.54 ​ Non-vested restricted stock units outstanding at March 31, 2023 842,631 ​ ​ 3.13 ​ Restricted stock units expected to vest beyond March 31, 2023 842,631 ​ $ 3.13 ​ ​ ​ The following table provides additional information on restricted stock units and performance restricted stock units: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ 2023 2022 Restricted stock compensation expense (in thousands) $ 863 $ 1,245 Aggregate fair value of restricted stock units vested and issued (in thousands) $ 477 $ 936 Weighted average grant date fair value of restricted stock units granted during the period $ 2.29 $ 5.40 ​ As of March 31, 2023, there was approximately $ 1.6 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 2.1 years. The Company’s PRSU activity is included in the above restricted stock unit tables. The PRSU program has a three-year performance measurement period. The performance measurement occurs in the 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. The overall performance at the end of the three-year period will be defined as the average of the yearly goals to determine the payout. Overall performance and payout at the end of the three-year period will be defined as the average of the three annual goals achievement. At the end of each performance measurement period, the Compensation Committee will determine the achievement against the performance objectives. During Fiscal 2023, the Company granted 72,412 PRSUs with a three-year performance measurement and the criteria measured by the Company’s aftermarket sales absorption. During Fiscal 2022, the Company granted 35,986 PRSUs F-22 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ 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 weighing 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 weighs 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 2023 and 2022 was $ 3.80 and $ 8.39 , respectively. Based on the Company’s assessment as of March 31, 2023, the Company will not meet the threshold of the performance measurements, and as a result, no compensation expense was recorded during Fiscal 2023 and 2022. 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. 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 was 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 F-23 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ 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. 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. On April 7, 2022, the Board approved an extension of the NOL Rights Agreement from May 6, 2022 to May 6, 2025. This extension was approved by the stockholders at the 2022 annual meeting of stockholders held on September 12, 2022. Offerings of Common Stock and Warrants Common Stock Offerings On June 17, 2021, the Company entered into an amended and restated underwriting agreement (the “Wainwright Underwriting Agreement”) with H.C. Wainwright & Co., LLC (”Wainwright”) whereby the Company agreed to sell to Wainwright, and Wainwright agreed to purchase, in a firm commitment underwritten public offering 1,904,763 shares (the “Wainwright Shares”) of the Company’s Common Stock, $ 0.001 par value per share (the “Wainwright Offering”). The F-24 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ offering price to the public in the Offering was $ 5.25 per share of Common Stock, and the Underwriter agreed to purchase the Wainwright Shares from the Company pursuant to the Wainwright Underwriting Agreement at a price of $ 4.91 per share, representing an underwriting discount of 6.5 % . Pursuant to the Wainwright Underwriting Agreement, the Company also granted Wainwright an option to purchase, for a period of 30 days from the date of the Underwriting Agreement, up to an additional 285,714 shares of Common Stock (the “Option Shares”). On June 21, 2021, Wainwright exercised the option in full. The Wainwright Offering of the Wainwright Shares was registered pursuant to a shelf registration statement (No. 333-254290) on Form S-3 filed by the Company with the Securities and Exchange Commission on March 22, 2021, and declared effective on April 14, 2021 (the “Registration Statement”), and made pursuant to a prospectus supplement, dated June 17, 2021, and accompanying prospectus that form a part of the Registration Statement relating to the Offering. The Offering closed on June 22, 2021, and the Company received net proceeds of $ 10.5 million after deducting $ 1.0 million in underwriting discounts, commissions and offering expenses paid by the Company. On August 18, 2022, the Company entered into an underwriting agreement (the “Lake Street Underwriting Agreement”) with Lake Street Capital Markets, LLC and Joseph Gunnar and Company, LLC (the “Underwriters”) whereby the Company agreed to sell to the Underwriters, and the Underwriters agreed to purchase, in a firm commitment underwritten public offering 2,934,498 (the “Lake Street Shares”) of the Company’s Common Stock, $ 0.001 par value per share (the “Lake Street Offering”) and accompanying warrants to purchase up to 2,934,498 shares of common stock. The offering price to the public in the Offering was $ 2.75 per share of Common Stock and accompanying warrant, and the Underwriter agreed to purchase the shares and accompanying warrants from the Company pursuant to the Underwriting Agreement at a price of $ 2.585 per share and accompanying warrant, representing an underwriting discount of 6.0 %. The Lake Street Offering of the Lake Street Shares was registered pursuant to the Registration Statement, and made pursuant to a prospectus supplement, dated August 22, 2022, and accompanying prospectus that form a part of the Registration Statement relating to the Lake Street Offering. The Lake Street Offering closed on August 24, 2022, and the Company received net proceeds of $ 7.3 million after deducting $ 0.8 million in underwriting discounts, commissions and offering expenses paid by the Company. Warrants 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 Common Stock 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 expired 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. As of March 31, 2023, 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 amends 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 amends 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 F-25 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ 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 amends 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. 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 expired 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 the Company’s consolidated balance sheets. The value of the Warrant was determined using the Black-Scholes Option Pricing model using the following assumptions: ​ ​ ​ ​ Risk-free interest rate 0.2 % Contractual term 3 years Expected volatility 81.0 % ​ Amendment No. 2 also amends 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-26 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ 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, 2023, there were 75,000 Series D warrants outstanding. August 2022 Warrants On August 24, 2022, the Company issued 2,934,498 of common stock warrants with an exercise price of $ 2.75 in conjunction with the Lake Street Offering. Stock to Vendors From time to time, the Company may enter into agreements with vendors for sponsorship, marketing or investor relation services whereby it may agree to compensate the vendor in cash and unregistered shares of Common Stock of the Company. The value of the unregistered shares of Common Stock is recorded as prepaid marketing cost and included in prepaid expenses and other current assets and stockholder’s equity in the Condensed Consolidated Balance Sheets and is amortized in proportion to the terms of their respective agreements. On February 17, 2021 and April 1, 2021, the Company issued 105,933 and 9,541 shares of the Company’s Common Stock, under a sponsorship agreement and an investor relations consulting agreement, respectively to vendors. The prepaid marketing cost amortization associated with the Common Stock issued were $ 1.0 million during Fiscal 2022, and were included in selling, general and administrative expense in the Consolidated Statements of Operations. As of March 31, 2023, there are no amounts remaining in prepaid marketing cost, prepaid expenses and other current assets in the Consolidated Balance Sheets related to the value of shares issued under the sponsorship agreement and investor relations consulting agreement. 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: F-27 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ 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. 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, 2022 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, 2023 ​ March 31, 2022 ​ ​ ​ Carrying ​ Estimated ​ Carrying ​ Estimated ​ Value Fair Value Value Fair Value Term note payable ​ $ 50,983 $ 51,000 ​ $ 50,949 $ 51,000 ​ ​ 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 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, certain of its subsidiaries as guarantors, the Collateral Agent and various purchasers party thereto. Under the A&R Note Purchase Agreement, the Company issued an F-28 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ additional $ 20 million in Notes, increasing total borrowings to $ 50.0 million. Following entry into the A&R Note Purchase Agreement, all outstanding Notes bear interest at the Adjusted (London Interbank Offer) LIBO Rate (as defined in the A&R Note Purchase Agreement) plus 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, September 1, 2024. As of March 31, 2023, $ 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 September 30, 2021. 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. On May 12, 2021, the Company and the collateral agent, entered into a First Amendment (the “Amendment”), to the A&R Note Purchase Agreement. 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 $ 9.0 million to $ 12.2 million for the period from May 12, 2021 to March 31, 2022, and $ 9.0 million thereafter. 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 September 30, 2021. As of March 31, 2022, the Company was not in compliance with the Adjusted EBITDA covenant contained in the A&R Note Purchase Agreement and did not cure such non-compliance by prepaying the Notes. As a result, the Company was in breach of the Adjusted EBITDA covenant as of May 27, 2022. On July 13, 2022 the Company entered into the A&R NPA Second Amendment with the Purchaser and the Collateral Agent, pursuant to which (i) the Purchaser and the Collateral Agent waived our breach of the Adjusted EBITDA covenant and (ii) the A&R Note Purchase Agreement has been amended to, among other things, add certain new covenants, including requirements that the Company uses its commercially reasonable best efforts to raise at least $ 10 million through a sale of its common stock by September 14, 2022 and refinance the Notes by October 1, 2022. On March 13, 2023, the Company transferred $ 9 million of funds from Bridge Bank, Affiliate of Western Alliance Bank, to Wells Fargo Bank. The Wells Fargo Bank account did not have an account control agreement in place, resulted in a breach of the covenant requiring the Company to have at all times a liquidity (i.e., cash in accounts covered by account control agreements) (the “Liquidity Covenant”) of at least $ 9 million. The Company transferred the $ 9 million back to its Bridge Bank account on April 5, 2023. On April 21, 2023, the Company again breached the Liquidity Covenant when its total funds in accounts subject to account control agreements fell below $ 9 million. On July 3, 2023, the Company failed to make the interest payment for the most recently ended quarter. On July 6, 2023, the Company entered into the A&R NPA Fourth Amendment with the Purchase and the Collateral Agent. F-29 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ As a result of the Company’s restated earnings, we were not in compliance with the Adjusted EBITDA covenant contained in the A&R Note Purchase Agreement. The breach required a change in classification of the term note payable to a current liability on our consolidated balance sheet resulting in a liquidity issue for the Company (see Note 17–Subsequent Events in the Notes to the Consolidated Financial Statements for further discussion of the outstanding debt and the post emergence financing). 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 $ 34,000 for both Fiscal 2023 and 2022, 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 2023 and 2022 was $ 6.2 million and $ 5.0 million, respectively, and includes $ 34,000 in amortization of debt issuance costs in both periods. 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 (“PPP”) 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. 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 . 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. In February 2021, the Company applied for forgiveness of the PPP Loan, and the loan was forgiven in full on June 30, 2021 (see “Gain and Loss on Extinguishment of Debt” below). Gain and Loss on Extinguishment of Debt In June 2021, the Company received notification from Western Alliance that the SBA approved forgiveness of the PPP loan in its entirety. The Company accounted for forgiveness on the PPP Loan in accordance with ASC 470 and recognized a gain on debt extinguishment of $ 1.9 million on its Consolidated Statements of Operations and Consolidated Statements of Cash Flows during Fiscal 2022. In June 2021, the Company also received a refund of the $ 660,200 previously repaid in accordance with the Fourth Amendment to the Note Purchase Agreement between the Company and Goldman Sachs Specialty Lending Group, L.P. and recorded these amounts within other income on the Company’s Consolidated Statements of Operations. 12. Leases Lessor The Company rents microturbine equipment to our customer for twelve to thirty six months with an extension option , which may impact the lease term. Monthly rental payments are fixed; however, the leases may include variable payments for fuel, excess labor, additional equipment, or technician labor and engineering support. As further described below, the Company rents certain microturbine equipment back from customers and subleases this equipment to end users as a part of its Energy-as-a-Service business. F-30 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ At March 31, 2023, the Company’s minimum rental revenue to be received under operating leases were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ Operating ​ Year Ending March 31, Leases 2024 ​ $ 1,756 ​ 2025 ​ 1,756 ​ 2026 ​ 466 ​ 2027 ​ — ​ 2028 ​ — ​ Thereafter ​ ​ — ​ Total minimum rental revenue ​ $ 3,978 ​ ​ Lessee The Company leases facilities and equipment under various non-cancelable operating and finance leases expiring at various times through Fiscal 2037. 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, which may include extension periods. During Fiscal 2023, the Company entered into several rental agreements to rent used microturbine equipment from customers where that equipment was not currently in use. These rental agreements provide the Company an option to extend the lease, however, the Company is not likely to exercise these options and they are therefore not included in the determination of the lease term. These agreements totaled approximately 9.8 MW of microturbines and have an average term of 36 months , and a total commitment value of approximately $ 8.9 million. The components of lease expense were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ 2023 2022 Finance lease costs (1) ​ $ 697 $ 80 Operating lease costs ​ ​ 2,291 ​ 1,157 Total lease costs ​ $ 2,988 $ 1,237 (1) Interest expense is included in finance lease costs. F-31 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ Supplemental balance sheet information related to the leases was as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ March 31, 2023 ​ March 31, 2022 Finance lease right-of-use assets $ 4,529 ​ $ 246 Operating lease right-of-use assets ​ 8,808 ​ ​ 5,959 Total right-of-use assets $ 13,337 ​ $ 6,205 ​ ​ ​ ​ ​ ​ Finance lease liability, current $ 773 ​ $ 89 Operating lease liability, current ​ 2,492 ​ ​ 586 Finance lease liability, non-current ​ 2,903 ​ ​ 190 Operating lease liability, non-current 6,588 ​ 5,619 Total lease liabilities $ 12,756 ​ $ 6,484 ​ ​ ​ ​ ​ ​ Finance leases: ​ ​ ​ ​ ​ Weighted average remaining lease life 2.27 years ​ 3.49 years Weighted average discount rate ​ 13.00 % ​ ​ 5.00 % Operating leases: ​ ​ ​ ​ ​ Weighted average remaining lease life 4.86 years ​ 8.35 years Weighted average discount rate ​ 12.00 % ​ ​ 12.00 % Supplemental cash flow information related to the leases was as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ 2023 ​ 2022 Cash paid for amounts included in the measurement of lease liabilities ​ ​ Financing cash flows from finance leases $ 803 ​ $ 92 Operating cash flows from finance leases $ 45 ​ $ 17 Operating cash flows from operating leases $ 2,258 ​ $ 1,106 Right-of-use assets obtained in exchange for lease obligations ​ ​ ​ ​ ​ Finance leases $ 3,991 ​ $ — Operating leases $ 4,179 ​ $ 1,877 ​ Other supplemental operating lease information consists of the following: At March 31, 2023, the Company’s minimum commitments under non-cancelable operating and finance leases were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Finance ​ Operating Year Ending March 31, Leases Leases 2024 ​ $ 1,017 ​ $ 3,477 2025 ​ ​ 1,017 ​ ​ 3,424 2026 ​ 1,963 ​ 2,412 2027 ​ — ​ 255 2028 ​ — ​ 256 Thereafter ​ ​ — ​ ​ 2,138 Total lease payments ​ $ 3,997 ​ $ 11,962 Less: imputed interest ​ ​ ( 321 ) ​ ​ ( 2,882 ) Present value of lease liabilities ​ $ 3,676 ​ $ 9,080 ​ ​ F-32 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ 13. Commitments and Contingencies Purchase Commitments As of March 31, 2023, the Company had firm commitments to purchase inventories of approximately $ 54.2 million through Fiscal 2026. 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. 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, 2023, 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”). The Company has 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 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, the Company is seeking compensatory, consequential, along with injunctive relief and attorney’s fees, interest, and costs. On March 18, 2020, Turbine Intl. filed its answer and cross-claims in the Capstone-Turbine Intl. Litigation. In its cross-claims, Turbine Intl. 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 California 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 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. The Company has not recorded any liability as of March 31, 2023 as the matter is too early to estimate. As of March 31, 2023, discovery had been served and answered on both sides. On May 17, 2024, the trial was set for July 29, 2024; and the court ordered the parties to mediate the matter by June 19, 2024. SEC Investigation In June 2023, prior to the issuance of the Company’s consolidated financial statements for the fiscal year ended March 31, 2023, the Audit Committee of the Company’s Board commenced the Revenue Recognition Investigation into F-33 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ certain accounting and internal control matters of the Company, principally focused on certain revenue recognition matters, and self-reported its findings to the Division of Enforcement of the Securities and Exchange Commission (the “SEC”) upon the conclusion of the Revenue Recognition Investigation. Following the self-report, The SEC Enforcement Division has commenced an investigation into the circumstances surrounding the Restatement (the “SEC Investigation”). The Audit Committee further self-reported its findings pursuant to the FPP Investigation to the SEC. The Company is cooperating with the SEC in connection with its investigation. Investigations of this nature may be costly and require management to devote significant time and attention away from the ongoing operation of the business. The Company cannot predict the duration or outcome of this matter. Cal Microturbine Arbitration On March 13, 2024, Cal Microturbine, a distributor of the Company, submitted a demand for arbitration before the American Arbitration Association seeking, among other things, approximately $ 24.5 million in damages and alleging that the Company breached its distributor agreement with Cal Microturbine and committed fraud in allowing another company, Capstone Engineered Solutions, to sell, rent and service turbines in Cal Microturbine’s exclusive territory under the distribution agreement. The parties are in the process of selecting the arbitration panel. The matter is in its preliminary stages with no hearing date set as of the date hereof. The Company cannot estimate the outcome and will fight this claim vigorously. Spitzer v. Flexon, Jamison, Juric, Robinson, and Hencken On October 13, 2023, a putative securities class action was filed in the U.S. District Court for the Central District of California, captioned Spitzer v. Flexon, et al., Case No. 2:23-cv-08659, naming certain of the Company’s current and former directors and officers as defendants. The suit alleges claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder based on allegedly false and misleading statements regarding, and allegedly inadequate disclosure surrounding, the Company’s business, operations and prospects and the circumstances leading up to the restatement of the Company’s quarterly and annual financial statements. The suit is purportedly brought on behalf of persons and entities that purchased or otherwise acquired the Company’s securities between June 14, 2021 and September 22, 2023 and seeks to recover unspecified compensatory damages and other relief, including attorney’s fees. The Company may incur significant legal expenses in defending the legal matters described above during the pendency of these matters, and in connection with any other potential legal matters, including expenses for the potential reimbursement of legal fees of officers and directors under indemnification obligations. The Company anticipates these legal fees to not exceed the insurance deductible of $ 1.2 million. 14. 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. 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 2023 and 2022, respectively. 15. 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 F-34 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ 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 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 twelve 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, ​ ​ 2023 2022 Other current assets ​ $ 124 ​ $ 124 ​ Other assets ​ ​ 2,381 ​ 2,506 ​ Royalty-related assets ​ $ 2,505 ​ $ 2,630 ​ ​ ​ 16. Restatement of Consolidated Financial Statements As previously disclosed in the Current Report on Form 8-K filed by the Company on September 22, 2023 with the SEC, the Company’s previously issued financial statements included in its Annual Reports on Form 10-K for the fiscal year ended March 31, 2022, and each of the interim financial statements for the quarterly periods in 2023, 2022, and 2021 included in its Quarterly Reports on Form 10-Q (collectively, the “Restated Periods”), should no longer be relied upon and a restatement is required for these previously issued consolidated financial statements. In accordance with ASC Topic 250, Accounting Changes and Error Corrections, the Company has restated herein the unaudited financial information for the quarterly periods ended June 30, 2022, September 30, 2022, and December 31, 2022. The categories of misstatements and their impact on the Company’s previously issued consolidated financial statements are described in more detail below. Restatement of Previously Issued Consolidated Financial Statements In connection with the restatement, the Company restated the consolidated financial statements as of and for the years ended March 31, 2022 and March 31, 2021, as well as the relevant unaudited quarterly financial information for the quarterly periods ended June 30, 2021, September 30, 2021, December 31, 2021, June 30, 2020, September 30, 2020, and December 31, 2020 in its 2022 Annual Report, as amended, on Form 10-K/A, filed with the SEC on June 12, 2024. F-35 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ Description of Misstatements The following includes descriptions of the significant adjustments to the Company’s financial position and results of operations from previously reported consolidated financial statements. Revenue Recognition of Bill-and-Hold Arrangements (“Bill and Hold”) The Company previously recognized revenue related to the sale of products, parts, and accessories at the point of shipment. In certain circumstances, the Company recognized revenue when the order is shipped to an in-transit warehouse where it is held until it is shipped to the customer. Under ASC 606, Revenue from Contracts with Customers (“ASC 606”), revenue recognized under bill-and-hold arrangements is required to meet specific criteria including: (i) the reason for the bill-and-hold arrangement is substantive, (ii) the product is segregated from the Company’s other inventory items held for sale, (iii) the product is ready for shipment to the customer, and (iv) the Company does not have the ability to use the product or direct it to another customer. As the Company’s previous revenue recognition policy did not correctly apply the required criteria to recognize revenue related to bill-and-hold arrangements, the Company concluded certain revenue related to bill-and-hold arrangements was prematurely recognized. The Company has since revised the revenue recognition policy, and related internal controls, to properly consider the required bill-and-hold criteria. Some of previously recognized revenue that did not meet the bill-and-hold criteria, related to products, parts, and accessories that were subsequently returned to the Company. In the third quarter of fiscal year 2023, the Company began recording a sales return allowance for returned systems. Under the revised revenue recognition policy, the sales return allowance is no longer required . To correct this error, (i) the revenue and cost of goods sold were reversed in the period in which the accounting errors took place, (ii) the revenue and cost of goods sold was recognized in subsequent periods when all of the revenue recognition criteria had been met, and (iii) the bad debt expense relating to prematurely recognized revenue was reversed in the periods prior to achieving the revenue recognition criteria and recognized in subsequent periods consistent with the Company’s policy, and (iv) the sales return allowance was reversed in the period in which it was originally recorded. Additionally, the related adjustments to accounts receivable, inventory, accrued expenses, and deferred revenue were made in the consolidated financial statements for the relevant Restated Periods. In correcting for the bill-and-hold error, sales were identified where revenue was prematurely recognized, and the Company had entered into a subsequent agreement to lease the system from the customer to re-rent the system to others as part of the Company’s rental fleet (“Re-rent Agreement”). The Re-rent Agreements were recorded as finance leases under ASC 842, Leases. The related lease payments to the customer were recorded as a reduction to the customer’s outstanding accounts receivable balance from the initial recognition of the sale and no cash was exchanged. As the initial sale of the system to the customer did not satisfy the requirements for revenue recognition and the Re-rent Agreement lacked economic substance, the Company concluded the Re-rent Agreements were improperly accounted for as finance leases. Additionally, resulting from mandatory buyout clauses contained in certain Re-rent Agreements, the amounts owed to the customer as stated in the Re-rent Agreement exceeded the accounts receivable associated with the prematurely recognized sale. The Company concluded this payment reflected consideration payable to a customer under ASC 606. To correct this error (i) the finance lease right-of-use asset and lease liability were removed and the related system was recognized as a rental asset in the period the Re-rent Agreements were executed, (ii) the finance lease costs, including interest expense, and right-of-use asset amortization were reversed in the period the Re-rent Agreements were executed and subsequent periods, and (iii) consideration payable to a customer was recognized in the period the Re-rent Agreements were executed . Recognition of Costs Associated with Factory Protection Plan Contracts (“FPP Contracts”) The Company offers a comprehensive factory protection plan to microturbine system customers guaranteeing service in the form of labor and spare parts to maintain product performance. For a fixed fee, the customer can purchase a FPP for either spare parts only or spare parts and labor reimbursement. The Company previously recognized the FPP revenue on a straight-line basis F-36 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ for the term of the contract, typically 5, 10, 15, or 20 years, and recorded the costs when the replacement parts shipped and when the labor reimbursement request was received. In addition, FPP revenues and costs were presented on a gross basis in the Consolidated Statements of Operations. As part of the restatement efforts, the Company reviewed the previous accounting conclusions related to FPP recognition, including a separate analysis of the spare parts and labor reimbursement offerings and the general terms of the contract. For FPP Contract revenue, under both the spare parts and labor reimbursement offerings, the Company concluded revenue was properly recognized. As it relates to the accounting for spare parts (“FPP Parts”), the Company concluded the timing of cost recognition was delayed and the cost should be recognized when the customer orders the spare parts. As it relates to the accounting for labor reimbursement (“FPP Labor”), the income, based on the respective standalone selling price, and related costs should be presented on a net basis in the Consolidated Statements of Operations. In addition, the Company concluded the FPP Contract term is 30 days, as the customer has the right to cancel with a 30-day notice. The Company has since revised its policy, and related internal controls, to properly consider the recognize FPP Contracts. To correct this error, as it relates to FPP Parts, the cost of goods sold was recognized at the time the spare parts order was received and a liability was recognized for any orders that had not been shipped to the customers in the period the accounting error took place. As it relates to FPP Labor, the labor reimbursement cost was reversed out of cost of goods sold and reclassified to revenue, net. The Company also revised the FPP contract disclosure included in Note 2 – Summary of Significant Accounting Policies to reflect the revised classification of the contract term. The Company also corrected for revenue improperly recognized relating to a cancelled FPP contract. Note Classification As a result of the restated earnings, the Company was in breach of its Consolidated Adjusted EBITDA Financial Covenant to the Note Purchase Agreement dated as of December 9, 2019, and later amended for the quarter ended June 30, 2021. The breach required a reclassification of the term note payable to a current liability on the Consolidated Balance Sheets as of June 30, 2022 and September 30, 2022. For further discussion on the Company’s ability to continue as a going concern see Note 3 – Summary of Significant Accounting Policies. Reclassifications Certain reclassifications have been made to the Company’s previously issued Consolidated Statements of Operations to enhance comparability with the current year’s financial statements. As a result, certain amounts relating to revenues and cost of goods sold for the sale of parts, previously reflected in Product, accessories and parts have been reclassified to Parts and service. These reclassifications had no impact on previously reported net income, cash flows, or shareholders’ equity. Reclassifications Certain reclassifications have been made to the Company’s previously issued Consolidated Balance Sheets to enhance comparability with the current year’s financial statements. As a result, certain amounts relating to finance and operating leases have been reclassified, as noted below. • Finance and operating lease right-of-use assets, previously presented in Property, plant, equipment and rental assets, net and Other assets, respectively, have been reclassified to Finance lease right-of-use assets and Operating lease right-of-use assets, respectively. • Current finance and operating lease liabilities, both previously presented in Current portion of notes payable and lease obligations, have been reclassified to Finance lease liability, current and Operating lease liability, current, respectively. • Long-term finance and operating lease liabilities, both previously presented in Long-term portion of notes payable and lease obligations, have been reclassified to Finance lease liability, non-current and Operating lease liability, non-current, respectively. F-37 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ Description of Quarterly Restatement Tables The following tables present the impact of the restatement on the previously reported Consolidated Balance Sheets, Consolidated Statements of Operations, and Statements of Cash Flows for quarterly periods ended June 30, 2022, September 30, 2022, and December 31, 2022. Changes to the Consolidated Statements of Stockholders’ Equity (Deficiency) for the quarterly periods ended June 30, 2022, September 30, 2022, and December 31, 2022 as a result of the restatement are due to the changes in net income. The values as previously reported for the quarterly periods ended June 30, 2022, September 30, 2022, and December 31, 2022 were derived from our Quarterly Reports on Form 10-Q filed on August 11, 2022, November 14, 2022, and February 14, 2023, respectively. F-38 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of June 30, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ FPP ​ Note ​ ​ ​ (in thousands) As Reported Reclassifications Bill and Hold Contracts Classification As Restated Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents $ 16,914 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 16,914 ​ Accounts receivable, net of allowances 24,168 ​ — ​ ( 9,871 ) ​ ( 18 ) ​ — ​ 14,279 ​ Inventories, net 18,608 ​ — ​ 9,255 ​ — ​ — ​ 27,863 ​ Prepaid expenses and other current assets 6,468 ​ — ​ — ​ — ​ — ​ 6,468 ​ Total current assets 66,158 ​ — ​ ( 616 ) ​ ( 18 ) ​ — ​ 65,524 ​ Property, plant, equipment and rental assets, net 21,694 ​ ( 2,560 ) ​ ​ 1,484 ​ ​ — ​ ​ — ​ 20,618 ​ Finance lease right-of-use assets — ​ 2,560 ​ ( 1,886 ) ​ — ​ — ​ 674 ​ Operating lease right-of-use assets — ​ 6,321 ​ — ​ — ​ — ​ 6,321 ​ Non-current portion of accounts receivable 1,056 ​ — ​ ( 1,056 ) ​ — ​ — ​ — ​ Non-current portion of inventories 2,013 ​ — ​ — ​ — ​ — ​ 2,013 ​ Other assets 8,933 ​ ( 6,321 ) ​ — ​ — ​ — ​ 2,612 ​ Total assets $ 99,854 ​ $ — ​ $ ( 2,074 ) ​ $ ( 18 ) ​ $ — ​ $ 97,762 ​ Liabilities and Stockholders’ (Deficiency) Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accounts payable and accrued expenses $ 22,238 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 22,238 ​ Accrued salaries and wages 1,360 ​ — ​ — ​ — ​ — ​ 1,360 ​ Accrued warranty reserve 1,527 ​ — ​ — ​ — ​ — ​ 1,527 ​ Deferred revenue 9,694 ​ — ​ 3,988 ​ — ​ — ​ 13,682 ​ Current portion of notes payable and lease obligations 1,930 ​ ( 1,409 ) ​ — ​ — ​ — ​ 521 ​ Finance lease liability, current — ​ 645 ​ ( 454 ) ​ — ​ — ​ 191 ​ Operating lease liability, current — ​ 764 ​ — ​ — ​ — ​ 764 ​ Factory protection plan liability — ​ — ​ — ​ 10,727 ​ — ​ 10,727 ​ Term note payable ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 50,957 ​ ​ 50,957 ​ Total current liabilities 36,749 ​ — ​ 3,534 ​ 10,727 ​ 50,957 ​ 101,967 ​ Deferred revenue, non-current ​ 934 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 934 ​ Long-term portion of notes payable and lease obligations 7,627 ​ ( 7,627 ) ​ — ​ — ​ — ​ — ​ Finance lease liability, non-current — ​ 1,853 ​ ( 1,376 ) ​ — ​ — ​ 477 ​ Operating lease liability, non-current — ​ 5,774 ​ — ​ — ​ — ​ 5,774 ​ Term note payable, non-current ​ 50,957 ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 50,957 ) ​ ​ — ​ Other long-term liabilities — ​ ​ — ​ ​ 265 ​ ​ — ​ ​ — ​ 265 ​ Total liabilities 96,267 ​ — ​ 2,423 ​ 10,727 ​ — ​ 109,417 ​ Stockholders’ (Deficiency) Equity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common stock 15 ​ — ​ ​ — ​ ​ — ​ ​ — ​ 15 ​ Additional paid-in capital 947,237 ​ — ​ ​ — ​ ​ — ​ ​ — ​ 947,237 ​ Accumulated deficit ( 941,541 ) ​ — ​ ​ ( 4,497 ) ​ ​ ( 10,745 ) ​ ​ — ​ ( 956,783 ) ​ Treasury stock ( 2,124 ) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ( 2,124 ) ​ Total stockholders’ (deficiency) equity 3,587 ​ — ​ ( 4,497 ) ​ ( 10,745 ) ​ — ​ ( 11,655 ) ​ Total liabilities and stockholders' (deficiency) equity $ 99,854 ​ $ — ​ $ ( 2,074 ) ​ $ ( 18 ) ​ $ — ​ $ 97,762 ​ ​ F-39 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of September 30, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ FPP ​ Note ​ ​ ​ (in thousands) As Reported Reclassifications Bill and Hold Contracts Classification As Restated Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents $ 23,780 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 23,780 ​ Accounts receivable, net of allowances 18,189 ​ — ​ ( 4,540 ) ​ ( 74 ) ​ — ​ 13,575 ​ Inventories, net 21,801 ​ — ​ 10,293 ​ — ​ — ​ 32,094 ​ Prepaid expenses and other current assets 7,039 ​ — ​ — ​ — ​ — ​ 7,039 ​ Total current assets 70,809 ​ — ​ 5,753 ​ ( 74 ) ​ — ​ 76,488 ​ Property, plant, equipment and rental assets, net 25,375 ​ ( 6,888 ) ​ ​ 1,607 ​ ​ — ​ ​ — ​ 20,094 ​ Finance lease right-of-use assets — ​ 6,888 ​ ( 2,080 ) ​ — ​ — ​ 4,808 ​ Operating lease right-of-use assets — ​ 9,075 ​ — ​ — ​ — ​ 9,075 ​ Non-current portion of accounts receivable 1,109 ​ — ​ ( 1,109 ) ​ — ​ — ​ — ​ Non-current portion of inventories 2,277 ​ — ​ — ​ — ​ — ​ 2,277 ​ Other assets 11,735 ​ ( 9,075 ) ​ — ​ — ​ — ​ 2,660 ​ Total assets $ 111,305 ​ $ — ​ $ 4,171 ​ $ ( 74 ) ​ $ — ​ $ 115,402 ​ Liabilities and Stockholders’ (Deficiency) Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accounts payable and accrued expenses $ 24,344 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 24,344 ​ Accrued salaries and wages 1,123 ​ — ​ — ​ — ​ — ​ 1,123 ​ Accrued warranty reserve 1,662 ​ — ​ — ​ — ​ — ​ 1,662 ​ Deferred revenue 10,686 ​ — ​ 9,581 ​ — ​ — ​ 20,267 ​ Current portion of notes payable and lease obligations 3,215 ​ ( 2,955 ) ​ — ​ — ​ — ​ 260 ​ Finance lease liability, current — ​ 1,262 ​ ( 496 ) ​ — ​ — ​ 766 ​ Operating lease liability, current — ​ 1,693 ​ — ​ — ​ — ​ 1,693 ​ Factory protection plan liability — ​ — ​ — ​ 10,192 ​ — ​ 10,192 ​ Term note payable ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 50,966 ​ ​ 50,966 ​ Total current liabilities 41,030 ​ — ​ 9,085 ​ 10,192 ​ 50,966 ​ 111,273 ​ Deferred revenue, non-current ​ 915 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 915 ​ Long-term portion of notes payable and lease obligations 12,321 ​ ( 12,321 ) ​ — ​ — ​ — ​ — ​ Finance lease liability, non-current ​ — ​ ​ 4,749 ​ ​ ( 1,468 ) ​ ​ — ​ ​ — ​ ​ 3,281 ​ Operating lease liability, non-current ​ — ​ ​ 7,572 ​ ​ — ​ ​ — ​ ​ — ​ ​ 7,572 ​ Term note payable, non-current ​ 50,966 ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 50,966 ) ​ ​ — ​ Other long-term liabilities ​ — ​ ​ — ​ ​ 265 ​ ​ — ​ ​ — ​ ​ 265 ​ Total liabilities 105,232 ​ — ​ 7,882 ​ 10,192 ​ — ​ 123,306 ​ Stockholders’ (Deficiency) Equity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common stock 18 ​ — ​ ​ — ​ ​ — ​ ​ — ​ 18 ​ Additional paid-in capital 954,750 ​ — ​ ​ — ​ ​ — ​ ​ — ​ 954,750 ​ Accumulated deficit ( 946,556 ) ​ — ​ ​ ( 3,711 ) ​ ​ ( 10,266 ) ​ ​ — ​ ( 960,533 ) ​ Treasury stock ( 2,139 ) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ( 2,139 ) ​ Total stockholders’ (deficiency) equity 6,073 ​ — ​ ( 3,711 ) ​ ( 10,266 ) ​ — ​ ( 7,904 ) ​ Total liabilities and stockholders' (deficiency) equity $ 111,305 ​ $ — ​ $ 4,171 ​ $ ( 74 ) ​ $ — ​ $ 115,402 ​ ​ F-40 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ FPP ​ ​ ​ (in thousands) As Reported Reclassifications Bill and Hold Contracts As Restated Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents $ 16,618 ​ $ — ​ $ — ​ $ — ​ $ 16,618 ​ Accounts receivable, net of allowances 15,119 ​ — ​ ( 3,579 ) ​ ( 129 ) ​ 11,411 ​ Inventories, net 25,602 ​ — ​ 8,267 ​ — ​ 33,869 ​ Prepaid expenses and other current assets 7,125 ​ — ​ — ​ — ​ 7,125 ​ Total current assets 64,464 ​ — ​ 4,688 ​ ( 129 ) ​ 69,023 ​ Property, plant, equipment and rental assets, net 25,906 ​ ( 6,694 ) ​ ​ 1,565 ​ ​ — ​ 20,777 ​ Finance lease right-of-use assets — ​ 6,694 ​ ( 2,025 ) ​ — ​ 4,669 ​ Operating lease right-of-use assets — ​ 8,702 ​ — ​ — ​ 8,702 ​ Non-current portion of accounts receivable 107 ​ — ​ ( 107 ) ​ — ​ — ​ Non-current portion of inventories 3,055 ​ — ​ — ​ — ​ 3,055 ​ Other assets 11,334 ​ ( 8,702 ) ​ — ​ — ​ 2,632 ​ Total assets $ 104,866 ​ $ — ​ $ 4,121 ​ $ ( 129 ) ​ $ 108,858 ​ Liabilities and Stockholders’ (Deficiency) Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accounts payable and accrued expenses $ 26,087 ​ $ — ​ $ ( 284 ) ​ $ — ​ $ 25,803 ​ Accrued salaries and wages 1,421 ​ — ​ — ​ — ​ 1,421 ​ Accrued warranty reserve 1,540 ​ — ​ — ​ — ​ 1,540 ​ Deferred revenue 9,699 ​ — ​ 7,772 ​ — ​ 17,471 ​ Current portion of notes payable and lease obligations 2,201 ​ ( 2,201 ) ​ — ​ — ​ — ​ Finance lease liability, current — ​ 908 ​ ( 118 ) ​ — ​ 790 ​ Operating lease liability, current — ​ 1,293 ​ — ​ — ​ 1,293 ​ Factory protection plan liability — ​ — ​ — ​ 11,848 ​ 11,848 ​ Term note payable ​ 50,974 ​ ​ — ​ ​ — ​ ​ — ​ ​ 50,974 ​ Total current liabilities 91,922 ​ — ​ 7,370 ​ 11,848 ​ 111,140 ​ Deferred revenue, non-current ​ 817 ​ ​ — ​ ​ — ​ ​ — ​ ​ 817 ​ Long-term portion of notes payable and lease obligations 11,036 ​ ( 11,036 ) ​ — ​ — ​ — ​ Finance lease liability, non-current — ​ 3,464 ​ ( 392 ) ​ — ​ 3,072 ​ Operating lease liability, non-current — ​ 7,572 ​ — ​ — ​ 7,572 ​ Term note payable, non-current ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ Other long-term liabilities ​ — ​ ​ — ​ ​ 265 ​ ​ — ​ ​ 265 ​ Total liabilities 103,775 ​ — ​ 7,243 ​ 11,848 ​ 122,866 ​ Stockholders’ (Deficiency) Equity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common stock 18 ​ — ​ ​ — ​ ​ — ​ 18 ​ Additional paid-in capital 954,982 ​ — ​ ​ — ​ ​ — ​ 954,982 ​ Accumulated deficit ( 951,770 ) ​ — ​ ​ ( 3,122 ) ​ ​ ( 11,977 ) ​ ( 966,869 ) ​ Treasury stock ( 2,139 ) ​ — ​ ​ — ​ ​ — ​ ( 2,139 ) ​ Total stockholders’ (deficiency) equity 1,091 ​ — ​ ( 3,122 ) ​ ( 11,977 ) ​ ( 14,008 ) ​ Total liabilities and stockholders' (deficiency) equity $ 104,866 ​ $ — ​ $ 4,121 ​ $ ( 129 ) ​ $ 108,858 ​ ​ F-41 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, 2022 ​ ​ ​ ​ ​ ​ ​ ​ FPP ​ ​ ​ (in thousands) As Reported Bill and Hold Contracts As Restated Revenue, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ Product and accessories $ 9,167 ​ $ 367 ​ $ — ​ $ 9,534 ​ Parts, service and rentals ​ 9,485 ​ ​ ( 70 ) ​ ​ ( 184 ) ​ ​ 9,231 ​ Total revenue, net ​ 18,652 ​ ​ 297 ​ ​ ( 184 ) ​ ​ 18,765 ​ Cost of goods sold: ​ ​ ​ ​ ​ ​ ​ ​ Product and accessories ​ 8,891 ​ ​ 878 ​ ​ — ​ ​ 9,769 ​ Parts, service and rentals ​ 5,055 ​ ​ 36 ​ ​ 1,391 ​ ​ 6,482 ​ Total cost of goods sold ​ 13,946 ​ ​ 914 ​ ​ 1,391 ​ ​ 16,251 ​ Gross profit 4,706 ​ ( 617 ) ​ ( 1,575 ) ​ 2,514 ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development 490 ​ — ​ — ​ 490 ​ Selling, general and administrative 4,919 ​ — ​ — ​ 4,919 ​ Total operating expenses 5,409 ​ — ​ — ​ 5,409 ​ Loss from operations ( 703 ) ​ ( 617 ) ​ ( 1,575 ) ​ ( 2,895 ) ​ Other income (expense) 2 ​ — ​ — ​ 2 ​ Interest income 6 ​ — ​ — ​ 6 ​ Interest expense ( 1,362 ) ​ 51 ​ — ​ ( 1,311 ) ​ Gain (loss) on debt extinguishment ​ — ​ ​ — ​ ​ — ​ ​ — ​ Loss before provision for income taxes ( 2,057 ) ​ ( 566 ) ​ ( 1,575 ) ​ ( 4,198 ) ​ Provision for income taxes 2 ​ — ​ — ​ 2 ​ Net loss ​ ( 2,059 ) ​ ​ ( 566 ) ​ ​ ( 1,575 ) ​ ​ ( 4,200 ) ​ Less: Deemed dividend on purchase warrant for common shares ​ — ​ ​ — ​ ​ — ​ ​ — ​ Net loss attributable to common stockholders $ ( 2,059 ) ​ $ ( 566 ) ​ $ ( 1,575 ) ​ $ ( 4,200 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per share—basic and diluted $ ( 0.13 ) ​ $ ( 0.04 ) ​ $ ( 0.10 ) ​ $ ( 0.27 ) ​ Weighted average shares outstanding 15,318 ​ 15,318 ​ 15,318 ​ 15,318 ​ ​ F-42 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, 2022 ​ ​ ​ ​ ​ ​ ​ ​ FPP ​ ​ ​ (in thousands) As Reported Bill and Hold Contracts As Restated Revenue, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ Product and accessories $ 10,603 ​ $ ( 1,009 ) ​ $ — ​ $ 9,594 ​ Parts, service and rentals ​ 10,172 ​ ​ 529 ​ ​ ( 171 ) ​ ​ 10,530 ​ Total revenue, net ​ 20,775 ​ ​ ( 480 ) ​ ​ ( 171 ) ​ ​ 20,124 ​ Cost of goods sold: ​ ​ ​ ​ ​ ​ ​ ​ Product and accessories ​ 12,496 ​ ​ ( 1,452 ) ​ ​ — ​ ​ 11,044 ​ Parts, service and rentals ​ 6,103 ​ ​ 237 ​ ​ ( 650 ) ​ ​ 5,690 ​ Total cost of goods sold ​ 18,599 ​ ​ ( 1,215 ) ​ ​ ( 650 ) ​ ​ 16,734 ​ Gross profit 2,176 ​ 735 ​ 479 ​ 3,390 ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development 603 ​ — ​ — ​ 603 ​ Selling, general and administrative 5,107 ​ — ​ — ​ 5,107 ​ Total operating expenses 5,710 ​ — ​ — ​ 5,710 ​ Loss from operations ( 3,534 ) ​ 735 ​ 479 ​ ( 2,320 ) ​ Other income (expense) ( 50 ) ​ — ​ — ​ ( 50 ) ​ Interest income 26 ​ — ​ — ​ 26 ​ Interest expense ( 1,356 ) ​ 51 ​ — ​ ( 1,305 ) ​ Gain (loss) on debt extinguishment ​ — ​ ​ — ​ ​ — ​ ​ — ​ Loss before provision for income taxes ( 4,914 ) ​ 786 ​ 479 ​ ( 3,649 ) ​ Provision for income taxes 4 ​ — ​ — ​ 4 ​ Net loss ​ ( 4,918 ) ​ ​ 786 ​ ​ 479 ​ ​ ( 3,653 ) ​ Less: Deemed dividend on purchase warrant for common shares ​ 97 ​ ​ — ​ ​ — ​ ​ 97 ​ Net loss attributable to common stockholders $ ( 5,015 ) ​ $ 786 ​ $ 479 ​ $ ( 3,750 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per share—basic and diluted $ ( 0.30 ) ​ $ 0.05 ​ $ 0.03 ​ $ ( 0.22 ) ​ Weighted average shares outstanding 16,785 ​ 16,785 ​ 16,785 ​ 16,785 ​ ​ F-43 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended September 30, 2022 ​ ​ ​ ​ ​ ​ ​ ​ FPP ​ ​ ​ (in thousands) As Reported Bill and Hold Contracts As Restated Revenue, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ Product and accessories $ 19,770 ​ $ ( 642 ) ​ $ — ​ $ 19,128 ​ Parts, service and rentals ​ 19,657 ​ ​ 459 ​ ​ ( 355 ) ​ ​ 19,761 ​ Total revenue, net ​ 39,427 ​ ​ ( 183 ) ​ ​ ( 355 ) ​ ​ 38,889 ​ Cost of goods sold: ​ ​ ​ ​ ​ ​ ​ ​ Product and accessories ​ 21,387 ​ ​ ( 574 ) ​ ​ — ​ ​ 20,813 ​ Parts, service and rentals ​ 11,158 ​ ​ 273 ​ ​ 741 ​ ​ 12,172 ​ Total cost of goods sold ​ 32,545 ​ ​ ( 301 ) ​ ​ 741 ​ ​ 32,985 ​ Gross profit 6,882 ​ 118 ​ ( 1,096 ) ​ 5,904 ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development 1,093 ​ — ​ — ​ 1,093 ​ Selling, general and administrative 10,026 ​ — ​ — ​ 10,026 ​ Total operating expenses 11,119 ​ — ​ — ​ 11,119 ​ Loss from operations ( 4,237 ) ​ 118 ​ ( 1,096 ) ​ ( 5,215 ) ​ Other income (expense) ( 48 ) ​ — ​ — ​ ( 48 ) ​ Interest income 32 ​ — ​ — ​ 32 ​ Interest expense ( 2,718 ) ​ 102 ​ — ​ ( 2,616 ) ​ Gain (loss) on debt extinguishment ​ — ​ ​ — ​ ​ — ​ ​ — ​ Loss before provision for income taxes ( 6,971 ) ​ 220 ​ ( 1,096 ) ​ ( 7,847 ) ​ Provision for income taxes 6 ​ — ​ — ​ 6 ​ Net loss ​ ( 6,977 ) ​ ​ 220 ​ ​ ( 1,096 ) ​ ​ ( 7,853 ) ​ Less: Deemed dividend on purchase warrant for common shares ​ 97 ​ ​ — ​ ​ — ​ ​ 97 ​ Net loss attributable to common stockholders $ ( 7,074 ) ​ $ 220 ​ $ ( 1,096 ) ​ $ ( 7,950 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per share—basic and diluted $ ( 0.44 ) ​ $ 0.01 ​ $ ( 0.07 ) ​ $ ( 0.50 ) ​ Weighted average shares outstanding 16,056 ​ 16,056 ​ 16,056 ​ 16,056 ​ ​ F-44 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ FPP ​ ​ ​ (in thousands) As Reported Bill and Hold Contracts As Restated Revenue, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ Product and accessories $ 10,003 ​ $ 1,424 ​ $ — ​ $ 11,427 ​ Parts, service and rentals ​ 9,603 ​ ​ 172 ​ ​ ( 192 ) ​ ​ 9,583 ​ Total revenue, net ​ 19,606 ​ ​ 1,596 ​ ​ ( 192 ) ​ ​ 21,010 ​ Cost of goods sold: ​ ​ ​ ​ ​ ​ ​ ​ Product and accessories ​ 11,630 ​ ​ 837 ​ ​ — ​ ​ 12,467 ​ Parts, service and rentals ​ 5,307 ​ ​ 17 ​ ​ 1,519 ​ ​ 6,843 ​ Total cost of goods sold ​ 16,937 ​ ​ 854 ​ ​ 1,519 ​ ​ 19,310 ​ Gross profit 2,669 ​ 742 ​ ( 1,711 ) ​ 1,700 ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development 633 ​ — ​ — ​ 633 ​ Selling, general and administrative 5,397 ​ 200 ​ — ​ 5,597 ​ Total operating expenses 6,030 ​ 200 ​ — ​ 6,230 ​ Loss from operations ( 3,361 ) ​ 542 ​ ( 1,711 ) ​ ( 4,530 ) ​ Other income (expense) 5 ​ — ​ — ​ 5 ​ Interest income 42 ​ — ​ — ​ 42 ​ Interest expense ( 1,900 ) ​ 47 ​ — ​ ( 1,853 ) ​ Gain (loss) on debt extinguishment ​ — ​ ​ — ​ ​ — ​ ​ — ​ Loss before provision for income taxes ( 5,214 ) ​ 589 ​ ( 1,711 ) ​ ( 6,336 ) ​ Provision for income taxes — ​ — ​ — ​ — ​ Net loss ​ ( 5,214 ) ​ ​ 589 ​ ​ ( 1,711 ) ​ ​ ( 6,336 ) ​ Less: Deemed dividend on purchase warrant for common shares ​ — ​ ​ — ​ ​ — ​ ​ — ​ Net loss attributable to common stockholders $ ( 5,214 ) ​ $ 589 ​ $ ( 1,711 ) ​ $ ( 6,336 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per share—basic and diluted $ ( 0.28 ) ​ $ 0.03 ​ $ ( 0.09 ) ​ $ ( 0.35 ) ​ Weighted average shares outstanding 18,351 ​ 18,351 ​ 18,351 ​ 18,351 ​ ​ F-45 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ FPP ​ ​ ​ (in thousands) As Reported Bill and Hold Contracts As Restated Revenue, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ Product and accessories $ 29,773 ​ $ 782 ​ $ — ​ $ 30,555 ​ Parts, service and rentals ​ 29,260 ​ ​ 631 ​ ​ ( 547 ) ​ ​ 29,344 ​ Total revenue, net ​ 59,033 ​ ​ 1,413 ​ ​ ( 547 ) ​ ​ 59,899 ​ Cost of goods sold: ​ ​ ​ ​ ​ ​ ​ ​ Product and accessories ​ 33,017 ​ ​ 263 ​ ​ — ​ ​ 33,280 ​ Parts, service and rentals ​ 16,465 ​ ​ 290 ​ ​ 2,260 ​ ​ 19,015 ​ Total cost of goods sold ​ 49,482 ​ ​ 553 ​ ​ 2,260 ​ ​ 52,295 ​ Gross profit 9,551 ​ 860 ​ ( 2,807 ) ​ 7,604 ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development 1,726 ​ — ​ — ​ 1,726 ​ Selling, general and administrative 15,423 ​ 200 ​ — ​ 15,623 ​ Total operating expenses 17,149 ​ 200 ​ — ​ 17,349 ​ Loss from operations ( 7,598 ) ​ 660 ​ ( 2,807 ) ​ ( 9,745 ) ​ Other income (expense) ( 43 ) ​ — ​ — ​ ( 43 ) ​ Interest income 74 ​ — ​ — ​ 74 ​ Interest expense ( 4,618 ) ​ 149 ​ — ​ ( 4,469 ) ​ Gain (loss) on debt extinguishment ​ — ​ ​ — ​ ​ — ​ ​ — ​ Loss before provision for income taxes ( 12,185 ) ​ 809 ​ ( 2,807 ) ​ ( 14,183 ) ​ Provision for income taxes 6 ​ — ​ — ​ 6 ​ Net loss ​ ( 12,191 ) ​ ​ 809 ​ ​ ( 2,807 ) ​ ​ ( 14,189 ) ​ Less: Deemed dividend on purchase warrant for common shares ​ 97 ​ ​ — ​ ​ — ​ ​ 97 ​ Net loss attributable to common stockholders $ ( 12,288 ) ​ $ 809 ​ $ ( 2,807 ) ​ $ ( 14,286 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per share—basic and diluted $ ( 0.73 ) ​ $ 0.05 ​ $ ( 0.17 ) ​ $ ( 0.85 ) ​ Weighted average shares outstanding 16,824 ​ 16,824 ​ 16,824 ​ 16,824 ​ ​ F-46 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ FPP ​ ​ (in thousands) As Reported Reclassifications Bill and Hold Contracts As Restated Cash Flows from Operating Activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss $ ( 2,059 ) ​ $ — ​ $ ( 566 ) ​ $ ( 1,575 ) $ ( 4,200 ) ​ Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization 661 ​ — ​ ( 10 ) ​ — 651 ​ Amortization of financing costs and discounts 43 ​ — ​ — ​ — 43 ​ Amortization of right-of-use assets ​ 151 ​ ​ — ​ ​ — ​ ​ — 151 ​ Inventory provision 270 ​ — ​ — ​ — 270 ​ Provision for warranty expenses 174 ​ — ​ ​ — ​ ​ — 174 ​ Stock-based compensation 232 ​ — ​ — ​ — 232 ​ Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accounts receivable 653 ​ ​ — ​ 926 ​ ​ 18 1,597 ​ Inventories ( 746 ) ​ — ​ 924 ​ — 178 ​ Prepaid expenses, other current assets and other assets ( 253 ) ​ — ​ — ​ — ( 253 ) ​ Accounts payable and accrued expenses ( 3,112 ) ​ 179 ​ 265 ​ — ( 2,668 ) ​ Operating lease liability — ​ ( 179 ) ​ — ​ — ( 179 ) ​ Accrued salaries and wages and long-term liabilities 212 ​ — ​ — ​ — 212 ​ Accrued warranty reserve ( 130 ) ​ — ​ — ​ — ( 130 ) ​ Deferred revenue 462 ​ — ​ ( 1,662 ) ​ — ( 1,200 ) ​ Factory protection plan liability — ​ — ​ — ​ 1,557 1,557 ​ Net cash used in operating activities ( 3,442 ) ​ — ​ ( 123 ) ​ — ( 3,565 ) ​ Cash Flows from Investing Activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Expenditures for property, plant, equipment and rental assets ( 1,887 ) ​ — ​ — ​ — ( 1,887 ) ​ Net cash used in investing activities ( 1,887 ) ​ — ​ — ​ — ( 1,887 ) ​ Cash Flows from Financing Activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Repayment of notes payable and lease obligations ( 316 ) ​ — ​ 123 ​ — ( 193 ) ​ Cash used in employee stock-based transactions ( 36 ) ​ — ​ — ​ — ( 36 ) ​ Net proceeds from issuance of common stock and warrants 36 ​ — ​ — ​ — 36 ​ Net cash used in financing activities ( 316 ) ​ — ​ 123 ​ — ( 193 ) ​ Net increase (decrease) increase in Cash and Cash Equivalents ( 5,645 ) ​ — ​ — ​ — ( 5,645 ) ​ Cash and Cash Equivalents, Beginning of Period 22,559 ​ — ​ — ​ — ​ 22,559 ​ Cash and Cash Equivalents, End of Period $ 16,914 ​ $ — ​ $ — ​ $ — $ 16,914 ​ ​ F-47 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended September 30, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ FPP ​ ​ (in thousands) As Reported Reclassifications Bill and Hold Contracts As Restated Cash Flows from Operating Activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss $ ( 6,977 ) ​ $ — ​ $ 220 ​ $ ( 1,096 ) $ ( 7,853 ) ​ Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization 1,493 ​ — ​ ( 23 ) ​ — 1,470 ​ Amortization of financing costs and discounts 51 ​ — ​ — ​ — 51 ​ Amortization of right-of-use assets ​ 475 ​ ​ — ​ ​ — ​ ​ — 475 ​ Bad debt expense (recovery) 75 ​ ​ — ​ ​ — ​ ​ — 75 ​ Inventory provision 420 ​ — ​ — ​ — 420 ​ Provision for warranty expenses 364 ​ — ​ ​ — ​ ​ — 364 ​ (Gain) loss on disposal of equipment 279 ​ ​ — ​ — ​ ​ — 279 ​ Stock-based compensation 386 ​ — ​ — ​ — 386 ​ Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accounts receivable 6,504 ​ ​ — ​ ( 4,502 ) ​ ​ 74 2,076 ​ Inventories ( 4,353 ) ​ — ​ ( 278 ) ​ — ( 4,631 ) ​ Prepaid expenses, other current assets and other assets ( 874 ) ​ — ​ — ​ — ( 874 ) ​ Accounts payable and accrued expenses ( 1,667 ) ​ 531 ​ 265 ​ — ( 871 ) ​ Operating lease liability — ​ ( 531 ) ​ — ​ — ( 531 ) ​ Accrued salaries and wages and long-term liabilities ( 23 ) ​ — ​ — ​ — ( 23 ) ​ Accrued warranty reserve ( 185 ) ​ — ​ — ​ — ( 185 ) ​ Deferred revenue 1,435 ​ — ​ 3,931 ​ — 5,366 ​ Factory protection plan liability — ​ — ​ — ​ 1,022 1,022 ​ Net cash used in operating activities ( 2,597 ) ​ — ​ ( 387 ) ​ — ( 2,984 ) ​ Cash Flows from Investing Activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Expenditures for property, plant, equipment and rental assets ( 2,564 ) ​ — ​ — ​ — ( 2,564 ) ​ Net cash used in investing activities ( 2,564 ) ​ — ​ — ​ — ( 2,564 ) ​ Cash Flows from Financing Activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Repayment of notes payable and lease obligations ( 868 ) ​ — ​ 387 ​ — ( 481 ) ​ Cash used in employee stock-based transactions ( 52 ) ​ — ​ — ​ — ( 52 ) ​ Net proceeds from issuance of common stock and warrants 7,302 ​ — ​ — ​ — 7,302 ​ Net cash provided by financing activities 6,382 ​ — ​ 387 ​ — 6,769 ​ Net increase (decrease) increase in Cash and Cash Equivalents 1,221 ​ — ​ — ​ — 1,221 ​ Cash and Cash Equivalents, Beginning of Period 22,559 ​ — ​ — ​ — ​ 22,559 ​ Cash and Cash Equivalents, End of Period $ 23,780 ​ $ — ​ $ — ​ $ — $ 23,780 ​ ​ F-48 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ FPP ​ ​ (in thousands) As Reported Reclassifications Bill and Hold Contracts As Restated Cash Flows from Operating Activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss $ ( 12,191 ) ​ $ — ​ $ 809 ​ $ ( 2,807 ) $ ( 14,189 ) ​ Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization 2,345 ​ — ​ ( 36 ) ​ — 2,309 ​ Amortization of financing costs and discounts 60 ​ — ​ — ​ — 60 ​ Amortization of right-of-use assets ​ 848 ​ ​ — ​ ​ — ​ ​ — 848 ​ Bad debt expense (recovery) 237 ​ — ​ 200 ​ — 437 ​ Inventory provision 771 ​ — ​ — ​ — 771 ​ Provision for warranty expenses 369 ​ — ​ ​ — ​ ​ — 369 ​ Provision for sales returns, net 81 ​ ​ — ​ ​ ( 81 ) ​ ​ — — ​ Stock-based compensation 617 ​ — ​ — ​ — 617 ​ Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accounts receivable 9,077 ​ ​ — ​ ( 5,481 ) ​ ​ 129 3,725 ​ Inventories ( 9,080 ) ​ — ​ 1,545 ​ — ( 7,535 ) ​ Prepaid expenses, other current assets and other assets ( 933 ) ​ — ​ — ​ — ( 933 ) ​ Accounts payable and accrued expenses ( 276 ) ​ 931 ​ 265 ​ — 920 ​ Operating lease liability — ​ ( 931 ) ​ — ​ — ( 931 ) ​ Accrued salaries and wages and long-term liabilities 274 ​ — ​ — ​ — 274 ​ Accrued warranty reserve ( 312 ) ​ — ​ — ​ — ( 312 ) ​ Deferred revenue 350 ​ — ​ 2,122 ​ — 2,472 ​ Factory protection plan liability — ​ — ​ — ​ 2,678 2,678 ​ Net cash used in operating activities ( 7,763 ) ​ — ​ ( 657 ) ​ — ( 8,420 ) ​ Cash Flows from Investing Activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Expenditures for property, plant, equipment and rental assets ( 3,999 ) ​ — ​ — ​ — ( 3,999 ) ​ Net cash used in investing activities ( 3,999 ) ​ — ​ — ​ — ( 3,999 ) ​ Cash Flows from Financing Activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Repayment of notes payable and lease obligations ( 1,429 ) ​ — ​ 657 ​ — ( 772 ) ​ Cash used in employee stock-based transactions ( 52 ) ​ — ​ — ​ — ( 52 ) ​ Net proceeds from issuance of common stock and warrants 7,302 ​ — ​ — ​ — 7,302 ​ Net cash provided by financing activities 5,821 ​ — ​ 657 ​ — 6,478 ​ Net increase (decrease) increase in Cash and Cash Equivalents ( 5,941 ) ​ — ​ — ​ — ( 5,941 ) ​ Cash and Cash Equivalents, Beginning of Period 22,559 ​ — ​ — ​ — ​ 22,559 ​ Cash and Cash Equivalents, End of Period $ 16,618 ​ $ — ​ $ — ​ $ — $ 16,618 ​ ​ ​ ​ F-49 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ 17. Subsequent Events On July 6, 2023, the Company entered into a Fourth Amendment (the “Fourth Amendment”) to the A&R Note Purchase Agreement among the Company, certain subsidiaries of the Company, Goldman and the purchaser party thereto (the “Purchaser”). The Fourth Amendment provides for (i) the waiver by the Purchaser and the Collateral Agent of the Company’s breach of the minimum Consolidated Liquidity covenant contained in the A&R Note Purchase Agreement, the failure to make the interest payment for the most recently ended quarter and certain other breaches specified therein; (ii) the extension of the maturity of the $ 50 million aggregate principal amount of Notes outstanding pursuant to the A&R Note Purchase Agreement from October 1, 2023 to September 1, 2024; (iii) an amendment fee payable by the Company at maturity equal to 1.00 % of the principal balance of the Notes on the Effective Date; (iv) a due date for the next interest payment on the date that is 30 days from the Effective Date, which interest payment was originally due on July 3, 2023; (v) following the Company’s entry into a Transaction Support Agreement (as defined below), the payment-in-kind of the quarterly interest payments that are due following the next the interest payment; (vi) a new minimum Consolidated Liquidity covenant requirement of $ 4.0 million, commencing on July 14, 2023, which amount will increase to $ 4.5 million on August 16, 2023 and to $ 6.0 million on August 31, 2023; (vii) the replacement of the Adjusted LIBO Rate with a Term SOFR interest rate benchmark; (viii) the ability for Goldman to either (A) force a conversion of the interest rate benchmark to Base Rate or (B) impose default interest during an Event of Default; (ix) the right for one designated Goldman board observer to attend the meetings of the Company’s Board of Directors (and committees thereof) in a non-voting capacity, subject to certain customary exceptions; and (x) the amendment to certain provisions of the A&R Note Purchase Agreement, including to add a number of new covenants. Those new covenants include requirements that the Company (i) enter into a transaction support agreement with one or more lenders in form and substance mutually satisfactory to Goldman and the Company (the “Transaction Support Agreement”) within 30 days of the Effective Date; (ii) subject to necessary stockholder approvals, execute and deliver, or reach agreement on substantially final versions of, the definitive documentation with respect of the transactions specified in the Transaction Support Agreement in form and substance satisfactory to the Collateral Agent within 45 days after the Effective Date; (iii) close the transactions specified by the Transaction Support Agreement by September 15, 2023; and (iv) provide a Section 382 analysis (i.e., an analysis relating to the potential limitation of the use of the Company’s net operating loss carryforwards due to ownership changes, which loss carryforwards the Company understands may be potentially valuable in one or more transaction structures) to Goldman on a quarterly basis. The Fourth Amendment also imposes restrictions on the Company’s ability to (i) pay professional fees for the next 30 days in excess of $ 2,000,000 in the aggregate; (ii) make certain other cash disbursements in excess of thresholds set forth in the Fourth Amendment; and (iii) amend existing, or enter into new, employment agreements or pay or incur any bonus or severance payment. On August 16, 2023, the Company entered into a Fifth Amendment (the “Fifth Amendment”) to the A&R Note Purchase Agreement among the Company, certain subsidiaries of the Company, Goldman and the purchaser. The Fifth Amendment provides for (i) the waiver by the Purchaser and the Collateral Agent of the Company’s breach of a covenant contained in the A&R Note Purchase Agreement to enter into a transaction support agreement with one or more lenders in form and substance mutually satisfactory to the Collateral Agent and the Company (the “Transaction Support Agreement”) within 30 days of the Fourth Amendment Effective Date and the failure to make an interest payment within 30 days of the Fourth Amendment Effective Date; (ii) a due date for the next interest payment on August 22, 2023 or such later date as is agreed to by the Collateral Agent in its sole discretion, which interest payment was originally due within 30 days of the effective date of the Fourth Amendment to the A&R Note Purchase Agreement; (iii) a minimum Consolidated Liquidity covenant requirement of $ 3.5 million, commencing on July 14, 2023 and operative through September 1, 2024; and (iv) the amendment of the milestones with respect of the Transaction Support Agreement to require that the Company (A) agree to the terms and form of the Transaction Support Agreement (which may include a structure including bankruptcy proceedings) with one or more lenders in form and substance mutually satisfactory to the Collateral Agent and the Company by August 22, 2023 or such later date as is agreed to by the Collateral Agent in its sole discretion,(B) subject to any necessary stockholder approvals, execute and deliver, or reach agreement on substantially final versions of, the definitive documentation with respect of the transactions specified in the Transaction Support Agreement in form and substance satisfactory to the Collateral Agent by August 31, 2023 or such later date as is agreed to by the Collateral Agent F-50 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ in its sole discretion, and (C) that the Company shall have closed the transactions specified by the Transaction Support Agreement by September 15, 2023 or such later date as is agreed by the Collateral Agent in its sole discretion. On September 22, 2023, the Company entered into a Sixth Amendment (the “Sixth Amendment”) to the Amended and Restated Note Purchase Agreement among the Company, certain subsidiaries of the Company, Goldman Sachs Specialty Lending Group, L.P. and the purchaser. Pursuant to the Sixth Amendment, the Company issued and the Purchaser purchased for $ 3,000,000 in cash additional senior secured notes on September 22, 2023 (the “Additional Notes”). The Additional Notes bear interest at the SOFR Rate plus 8.75 % per annum, payable-in-kind 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 entire principal amount of the Additional Notes is due and payable on September 1, 2024 (the “Maturity Date”). The Additional Notes do not amortize and the entire principal balance is due in a single payment on the Maturity Date. Voluntary Filing under Chapter 11 On September 28, 2023, the Company and its wholly owned direct subsidiaries, Capstone Turbine International, Inc. (“Capstone Turbine International”) and Capstone Turbine Financial Services, LLC. (together with the Company, the “Debtors”), commenced voluntary proceedings under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). The Chapter 11 proceedings were jointly administered under the caption In re Capstone Green Energy Corporation, Inc., et al. (the “Chapter 11 Cases”). The Debtors continued to operate their business in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. At hearings before the Bankruptcy Court on September 29, 2023, the Debtors obtained approval from the Bankruptcy Court of certain “first day” motions containing customary relief intended to assure the Debtors’ ability to continue their ordinary course operations during the Chapter 11 Cases. Concurrent with the petition, the Debtors entered into the Transaction Support Agreement with the pre-petition senior secured creditor, Broad Street Credit Holdings, LLC. (“Broad Street”), and Goldman Sachs Specialty Lending Group, L.P. (the “Collateral Agent”). The Transaction Support Agreement, among other things, provides that Broad Street and the Collateral Agent will support the Debtors’ restructuring efforts as set forth in, and subject to the terms and conditions of, the Transaction Support Agreement. The Transaction Support Agreement contains customary conditions, representations, and warranties of the parties and is subject to a number of conditions, including, among others, the accuracy of the representations and warranties of the parties and compliance with the obligations set forth in the Transaction Support Agreement. The Transaction Support Agreement also provides for termination by the parties upon the occurrence of certain events. DIP Note Purchase Agreement On October 3, 2023, the Debtors entered into a super-priority senior secured debtor-in-possession note purchase agreement (the “DIP Note Purchase Agreement”) with Broad Street and the Collateral Agent. Broad Street provided the Debtors with a credit facility (the “DIP Facility”) in an aggregate principal amount of $ 30.0 million, consisting of (1) $ 12.0 million new money DIP notes, and (2) a roll-up of secured obligations under the existing pre-petition debt with Broad Street in the amount of $ 18.0 million, subject to the terms and conditions set forth in the DIP Note Purchase Agreement. On September 28, 2023, the Debtors filed the Motion of Debtors for Interim and Final Orders (I) Authorizing the Debtors to Obtain Senior Secured Postpetition Financing, (II) Granting Liens and Superpriority Administrative Expense Status, (III) Authorizing the Use of Cash Collateral, (IV) Granting Adequate Protection to Pre-Petition Secured Parties, (V) Scheduling a Final Hearing, and (VI) Granting Related Relief (the “DIP Motion”) seeking the Bankruptcy Court’s approval of the DIP Facility and certain related relief. A copy of the DIP Note Purchase Agreement was attached to the joint prepackaged Chapter 11 plan of reorganization (as amended, restated, supplemented or otherwise modified from time to time, the “Plan”) filed as part of the voluntary petition. On October 2, 2023, the Bankruptcy Court granted the DIP Motion and entered an interim order (the “Interim DIP Order”) approving the DIP Facility on an interim basis and providing the Debtors with the necessary liquidity to F-51 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ continue to operate in Chapter 11. Upon entry of the Interim DIP Order and satisfaction of all applicable conditions precedent, as set forth in the DIP Note Purchase Agreement, the Debtors were authorized to make a single, initial draw of $ 9.0 million on the DIP Facility (the “Initial Draw”). The remaining $ 3.0 million of the DIP Facility became available to be drawn by the Debtors on November 13, 2023, after the Bankruptcy Court entered the Final DIP Order (the “Final Order”). The amount was drawn by the Debtors on October 24, 2023, after the entry of the Final Order and compliance with the terms, conditions, and covenants to be set forth in the DIP Documents. Substantially all of the Debtors’ assets were encumbered by first-priority liens of the Purchaser. The Bankruptcy Court originally set a final hearing date on November 7, 2023, in accordance with the requirements of the Transaction Support Agreement. On November 3, 2023, the final hearing was cancelled and rescheduled to November 13, 2023, with the permission of the Bankruptcy Court. Emergence from Voluntary Chapter 11 Proceedings The Bankruptcy Court confirmed the Plan on November 14, 2023, and the Debtors satisfied all conditions required for Plan effectiveness and emerged from the Chapter 11 Cases ("Emergence") on December 7, 2023. On or following the emergence date and pursuant to the terms of the Plan, the following occurred or became effective: ▪Restructuring: The Company was reorganized pursuant to the Transaction Support Agreement and became a private company that continues to own assets consisting of (i) all of the Company’s right, title, and interest in and to certain trademarks of the Company and (ii) assets owned by the Company relating to distributor support services ((i) and (ii) together, the “Retained Assets”) and certain income tax attributes that remained with Reorganized PrivateCo. Capstone Turbine International became a publicly traded company and was renamed Capstone Green Energy Holdings, Inc. This entity is the successor entity for purposes of Securities and Exchange Commission registration. Pre-petition equity holders received 100 % of the common equity in this public entity, subject to dilution for any equity incentive plans implemented as part of the reorganization. All equity of the predecessor entity was cancelled, and the predecessor entity became a reorganized private company. The reorganized private company equity is owned 100 % by the pre-petition senior secured lender in exchange for the satisfaction of $ 35.0 million of its pre-petition claims, and $ 10.0 million of its DIP claim. A new subsidiary to the public entity was created, issuing 100 % of its common equity to the public entity, and 100 % of its preferred equity to the reorganized private entity. Such new subsidiary conducts all of the Capstone business (other than in respect of the Retained Assets). The preferred equity is convertible at the option of the holder at any time to 37.5 % of the common equity deemed outstanding, making the common equity of the new subsidiary subject to dilution to 62.5 % ownership. ▪Exit Financing: The DIP Facility converted into an exit facility (as defined herein) for an aggregate principal amount of $ 27.0 million, consisting of (1) $ 7.0 million new money notes, (2) a roll-up of secured obligations under the pre-petition debt in the amount of $ 8.0 million, and (3) a roll-up of the DIP new money notes of $ 12.0 million, subject to the terms and conditions set forth in the Exit Note Purchase Agreement by and among Capstone Green Energy LLC, as the issuer, Capstone Green Energy Holdings, Inc. and Capstone Turbine Financial Services, LLC, as the guarantors, Broad Street and the Collateral Agent. The new money notes mature two years from the Effective Date, and the roll-up debts mature three years from the emergence date. Interest is calculated using a SOFR rate plus an applicable margin, and a portion is paid-in-kind until the third year following emergence. In the original Plan, the exit facility was to be for an aggregate principal amount of $ 25.0 million, with only $ 5.0 million in new money notes. The final approved Plan increased the new money notes to $ 7.0 million upon the confirmation of the Plan by Bankruptcy Court. F-52 Table of Contents CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ Nasdaq Delisting of Common Stock Effective at the opening of the trading session on October 5, 2023, the Company’s common stock was suspended from trading on the Nasdaq Capital Market. Effective October 23, 2023, the Company’s common stock was delisted from the Nasdaq Capital Market. Capstone Green Energy Holdings, Inc. 2023 Equity Incentive Plan In connection with the Emergence, on November 30, 2023, the Capstone Green Energy Holdings, Inc. 2023 Equity Incentive Plan (the “Incentive Plan”) was approved and adopted by the Board. The Incentive Plan is intended to, among other things, (i) attract and retain the types of employees, consultants and directors who will contribute the Company’s long-term success, (ii) provide incentives that align the interests of employees, consultants and directors with those of the stockholders of the Company, and (iii) promote the success of the Company’s business. The Incentive Plan was not approved by the Company’s stockholders. All outstanding unvested equity awards outstanding under the Capstone Green Energy Corporation 2017 Equity Incentive Plan were cancelled on the Effective Date in accordance with the Plan. The Incentive Plan is administered by the Compensation and Human Capital Committee or the Board. No more than 3,000,000 shares of New Common Stock are available for the grant of awards under the Incentive Plan. The Company intends to issue equity awards to incentivize employees whose unvested equity awards were terminated in accordance with the Plan. The aggregate value of awards granted during a single fiscal year to any non-employee director, together with any cash fees paid or to be paid to such non-employee director during the fiscal year and the value of awards granted to such non-employee director under any other equity compensation plan of the Company during the fiscal year, will not exceed a total value of $ 300,000 . The Board at any time, and from time to time, may amend or terminate the Incentive Plan. However, (i) in some situations, no amendment shall be effective unless approved by the stockholders of the Company to the extent stockholder approval is necessary to satisfy any applicable laws, and (ii) rights under any award granted before an amendment shall not be impaired by any amendment without the grantee’s written. ​ ​ F-53 Table of Contents Exhibit Index ​ Exhibit Number ​ Description 2.1 ​ Joint Prepackaged Chapter 11 Plan of Reorganization of Capstone Green Energy Corporation and its Debtor Affiliates (incorporated by reference to Exhibit A of Findings of Fact, Conclusions of Law, and Order (I) Approving the Disclosure Statement; (II) Confirming the Joint Prepackaged Chapter 11 Plan of Reorganization of Capstone Green Energy Corporation and Its Debtor Affiliates; and (III) Granting Related Relief, dated November 14, 2023) (l) 2.2 ​ Plan Supplement to Joint Prepackaged Chapter 11 Plan of Reorganization of Capstone Green Energy Corporation and its Debtor Affiliates, dated as of October 24, 2023 (k) 2.3 ​ Notice of Filing of Additional Exhibits to Plan Supplement, dated as of November 9, 2023 (l) 3.1 ​ Second Amended and Restated Certificate of Incorporation of Capstone Green Energy Holdings, Inc. (m) 3.2 ​ Amended and Restated Bylaws of Capstone Green Energy Holdings, Inc. (m) 4.1 ​ Super-Priority Senior Secured Debtor-In-Possession Note Purchase Agreement, dated as of October 2, 2023, among Capstone Green Energy Corporation, as a Chapter 11 Debtor and Debtor-in-Possession, the other debtors party thereto from time to time, each as a Chapter 11 Debtor and Debtor-in-Possession and as a Guarantor, Broad Street Credit Holdings LLC, as Purchaser, and Goldman Sachs Specialty Lending Group, L.P., as Collateral Agent (j) 4.2 ​ First Amendment to Super-Priority Senior Secured Debtor-In-Possession Note Purchase Agreement, dated as of November 15, 2023, among Capstone Green Energy Corporation, as a Chapter 11 Debtor and Debtor-in-Possession, the other debtors party thereto from time to time, each as a Chapter 11 Debtor and Debtor-in-Possession and as a Guarantor, Broad Street Credit Holdings LLC, as Purchaser, and Goldman Sachs Specialty Lending Group, L.P., as Collateral Agent (l) 4.3 ​ Exit Note Purchase Agreement, dated December 7, 2023, by and among Capstone Green Energy LLC, Capstone Green Energy Holdings, Inc., Capstone Financial Services, Broad Street Credit Holdings LLC, as Purchaser, and Goldman Sachs Specialty Lending Group, L.P., as Collateral Agent (m) 4.4 ​ Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934, as amended 10.1 * Amended and Restated Capstone Turbine Corporation Change of Control Severance Plan (a) 10.2 ​ Development and License Agreement between Capstone Turbine Corporation and Carrier Corporation, successor-in-interest to UTC Power Corporation, dated September 4, 2007 (b) 10.3 ​ Promissory Note between Capstone Turbine Corporation and Turbine International, LLC, dated October 13, 2017 (c) 10.4 ​ Guaranty between Capstone Turbine Corporation and Hispania Petroleum, S.A., dated October 13, 2017 (c) 10.5 ​ First Amendment to the Accounts Receivable Assignment Agreement and Promissory Note between Capstone Turbine Corporation and Turbine International, LLC, dated June 5, 2018 (d) 10.6 * Capstone Green Energy Corporation Amended and Restated Severance Pay Plan and Summary Plan Description, dated July 3, 2018, as amended March 2023 (e) 10.7 * Form of Capstone Green Energy Corporation Change in Control Agreement (f) 10.8 ​ Consulting Agreement between Capstone Green Energy Corporation and Capstone Engineered Solutions, dated May 22, 2022 (g) 10.9 ​ National Account Agreement between Capstone Green Energy Corporation and Capstone Engineered Solutions, dated May 20, 2022 (g) 10.10 ​ Installation Agreement between Capstone Green Energy Corporation and Capstone Engineered Solutions Corporation (g) ​ Table of Contents ​ Exhibit Number ​ Description 10.11 ​ Lease Agreement between Capstone Green Energy Corporation and Prologis, L.P., dated January 25, 2023 (h) 10.12 ​ Transaction Support Agreement, dated September 28, 2023, by and among Capstone Green Energy Corporation and certain of its subsidiaries, Goldman Sachs Specialty Lending Group, L.P., and Broad Street Credit Holdings LLC (i) 10.13 ​ Reorganized PublicCo Services Agreement, dated December 7, 2023, by and among Capstone Green Energy Holdings, Inc. and Capstone Green Energy LLC (m) 10.14 ​ Trademark License Agreement, dated December 7, 2023, by and among Capstone Distributor Support Services Corporation and Capstone Green Energy Holdings, Inc. (m) 10.15 * Capstone Green Energy Holdings, Inc. Form of Indemnity Agreement (m) 10.16 * Severance Pay Plan of Capstone Green Energy Holdings, Inc. (m) 10.17 * 2023 Equity Incentive Plan of Capstone Green Energy Holdings, Inc. (m) 10.18 ​ Amended and Restated Limited Liability Company Agreement, dated December 7, 2023, of Capstone Green Energy LLC. (m) 10.19 ​ Reorganized PrivateCo Services Agreement, dated December 7, 2023, by and among Capstone Distributor Support Services Corporation and Capstone Green Energy LLC (m) 10.20 ​ Registration Rights Agreement, dated December 7, 2023, by and among Capstone Green Energy LLC and Capstone Distributor Support Services Corporation (m) 10.21 * Employment Offer Letter for Vincent J. Canino, dated February 22, 2024 (n) 10.22 * Capstone Green Energy Holdings, Inc. Form of Amended and Restated Change in Control Agreement (n) 10.23 * Form of Restricted Stock Unit Agreement 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 (furnished herewith) 101.INS ​ XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL 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 104 ​ The cover page from Capstone Green Energy Corporation’s Annual Report on Form 10-K for the fiscal year ended March 31, 2023, formatted in Inline XBRL and contained in Exhibit 101 *Management contract or compensatory plan or arrangement (a) 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). (b) 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). (c) Incorporated by reference to Capstone Turbine Corporation’s Current Report on Form 8-K filed on October 13, 2017 (File No. 001-15957). ​ Table of Contents (d) Incorporated by reference to Capstone Turbine Corporation’s Annual Report on Form 10-K for the fiscal year ended March 31, 2018 (File No. 001-15957). (e) Incorporated by reference to Capstone Green Energy Corporation’s Current Report on Form 8-K filed on March 6, 2023 (File No. 001-15957). (f) Incorporated by reference to Capstone Turbine Corporation’s Current Report on Form 8-K filed on June 5, 2018 (File No. 001-15957). (g) Incorporated by reference to Capstone Green Energy Corporation’s Annual Report on Form 10-K for the fiscal year ended March 31, 2022 (File No. 001-15957). (h) Incorporated by reference to Capstone Green Energy Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2022 (File No. 001-15957). (i) Incorporated by reference to Capstone Green Energy Corporation’s Current Report on Form 8-K filed on September 28, 2023 (File No. 001-15957). (j) Incorporated by reference to Capstone Green Energy Corporation’s Current Report on Form 8-K filed on October 3, 2023 (File No. 001-15957). (k) Incorporated by reference to Capstone Green Energy Corporation’s Current Report on Form 8-K filed on October 25, 2023 (File No. 001-15957). (l) Incorporated by reference to Capstone Green Energy Corporation’s Current Report on Form 8-K filed on November 17, 2023 (File No. 001-15957). (m) Incorporated by reference to Capstone Green Energy Holdings, Inc.’s Current Report on Form 8-K12G3 filed on December 11, 2023 (File No. 001-15957). (n) Incorporated by reference to Capstone Green Energy Holdings, Inc.’s Current Report on Form 8-K filed on March 12, 2024 (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 HOLDINGS, INC. ​ ​ ​ ​ ​ Date: June 12, 2024 ​ By: ​ /s/ John J. Juric ​ ​ John J. Juric Chief Financial Officer (Principal Financial Officer) ​ KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned officers and directors of Capstone Green Energy Holdings Inc., hereby severally constitute Vince Canino and John J. Juric, 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/ Vince Canino ​ President, Chief Executive Officer and Director (Principal Executive Officer) ​ June 12, 2024 Vince Canino ​ ​ ​ ​ ​ /s/ John J. Juric ​ Chief Financial Officer (Principal Financial Officer) ​ June 12, 2024 John J. Juric ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Celia fanning ​ Controller and Chief Accounting Officer ​ ​ Celia Fanning ​ (Principal Accounting Officer) ​ June 12, 2024 ​ ​ ​ ​ ​ /s/ Robert C. Flexon ​ Chair of the Board of Directors ​ June 12, 2024 Robert C. Flexon ​ ​ ​ ​ ​ /s/ Yon Y. Jorden ​ Director ​ June 12, 2024 Yon Y. Jorden ​ ​ ​ ​ ​ /s/ Robert F. Powelson ​ Director ​ June 12, 2024 Robert F. Powelson ​ ​ ​ ​ ​ /s/ Denise Wilson ​ Director ​ June 12, 2024 Denise Wilson ​ ​ ​ ​ ​ /s/ PING FU ​ Director ​ June 12, 2024 Ping Fu ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ John Miller ​ Director ​ June 12, 2024 John Miller ​ ​ ​ ​ ​ ​ ​ ​