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Document and Entity Information (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Mar. 31, 2013
Jun. 06, 2013
Sep. 30, 2012
Document and Entity Information
Entity Registrant Name CAPSTONE TURBINE Corp
Entity Central Index Key 0001009759
Document Type 10-K
Document Period End Date Mar 31, 2013
Amendment Flag false
Current Fiscal Year End Date --03-31
Entity Well-known Seasoned Issuer No
Entity Voluntary Filers No
Entity Current Reporting Status Yes
Entity Filer Category Accelerated Filer
Entity Public Float $ 304.4
Entity Common Stock, Shares Outstanding 304,762,788
Document Fiscal Year Focus 2013
Document Fiscal Period Focus FY
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CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2013
Mar. 31, 2012
Current Assets:
Cash and cash equivalents $ 38,817 $ 49,952
Accounts receivable, net of allowance for doubtful accounts of $2,142 at March 31, 2013 and $2,228 at March 31, 2012 17,941 18,576
Inventories 18,513 18,881
Prepaid expenses and other current assets 2,588 2,974
Total current assets 77,859 90,383
Property, plant and equipment, net 3,543 4,833
Non-current portion of inventories 3,252 1,313
Intangible assets, net 2,313 2,811
Other assets 371 452
Total 87,338 99,792
Current Liabilities:
Accounts payable and accrued expenses 24,121 23,061
Accrued salaries and wages 1,721 1,716
Accrued warranty reserve 2,299 1,494
Deferred revenue 3,089 2,995
Revolving credit facility 13,476 10,431
Current portion of notes payable and capital lease obligations 361 363
Warrant liability 10 791
Total current liabilities 45,077 40,851
Long-term portion of notes payable and capital lease obligations 233 70
Other long-term liabilities 142 254
Commitments and contingencies (Note 12)      
Stockholders' Equity:
Preferred stock, $.001 par value; 10,000,000 shares authorized; none issued      
Common stock, $.001 par value; 515,000,000 shares authorized, 305,661,276 shares issued and 304,622,573 shares outstanding at March 31, 2013; 415,000,000 shares authorized, 300,315,313 shares issued and 299,317,493 shares outstanding at March 31, 2012 306 300
Additional paid-in capital 796,767 790,901
Accumulated deficit (753,975) (731,412)
Treasury stock, at cost; 1,038,703 shares at March 31, 2013 and 997,820 shares at March 31, 2012 (1,212) (1,172)
Total stockholders' equity 41,886 58,617
Total $ 87,338 $ 99,792
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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Mar. 31, 2013
Mar. 31, 2012
CONSOLIDATED BALANCE SHEETS
Accounts receivable, allowance for doubtful accounts (in dollars) $ 2,142 $ 2,228
Preferred stock, par value (in dollars per share) $ 0.001 $ 0.001
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred stock, shares issued 0 0
Common stock, par value (in dollars per share) $ 0.001 $ 0.001
Common stock, shares authorized 515,000,000 415,000,000
Common stock, shares issued 305,661,276 300,315,313
Common stock, shares outstanding 304,622,573 299,317,493
Treasury stock, shares 1,038,703 997,820
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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2011
CONSOLIDATED STATEMENTS OF OPERATIONS
Revenue $ 127,557 $ 109,371 $ 81,890
Cost of goods sold 113,172 103,944 82,427
Gross margin (loss) 14,385 5,427 (537)
Operating expenses:
Research and development 8,979 8,237 6,986
Selling, general and administrative 27,364 28,927 26,203
Total operating expenses 36,343 37,164 33,189
Loss from operations (21,958) (31,737) (33,726)
Other income 25 31 32
Interest income 2 4
Interest expense (717) (857) (873)
Change in fair value of warrant liability 781 13,983 (3,667)
Loss before income taxes (21,869) (18,578) (38,230)
Provision for income taxes 694 186 240
Net loss $ (22,563) $ (18,764) $ (38,470)
Net loss per common share-basic and diluted (in dollars per share) $ (0.07) $ (0.07) $ (0.16)
Weighted average shares used to calculate basic and diluted net loss per common share (in shares) 302,168 266,945 245,941
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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $)
Total
Common Stock
Additional Paid-in Capital
Accumulated Deficit
Treasury Stock
Balance at Mar. 31, 2010 $ 46,432,000 $ 243,000 $ 721,408,000 $ (674,178,000) $ (1,041,000)
Balance (in shares) at Mar. 31, 2010 243,015,511 896,109
Increase (Decrease) in Stockholders' Equity
Purchase of treasury stock (53,000) (53,000)
Purchase of treasury stock (in shares) 53,511
Vested restricted stock awards 1,000 (1,000)
Vested restricted stock awards (in shares) 742,460
Stock-based compensation 2,318,000 2,318,000
Exercise of stock options and employee stock purchases 74,000 74,000
Exercise of stock options and employee stock purchases (in shares) 72,842
Stock awards to Board of Directors 100,000 100,000
Stock awards to Board of Directors (in shares) 109,554
Warrants exercised 20,981,000 13,000 20,968,000
Warrants exercised (in shares) 12,473,231
Issuance of common stock for Calnetix Power Solutions acquisition 3,098,000 3,000 3,095,000
Issuance of common stock for Calnetix Power Solutions acquisition (in shares) 3,131,313 3,131,313
Net loss (38,470,000) (38,470,000)
Balance at Mar. 31, 2011 34,480,000 260,000 747,962,000 (712,648,000) (1,094,000)
Balance (in shares) at Mar. 31, 2011 259,544,911 949,620
Increase (Decrease) in Stockholders' Equity
Purchase of treasury stock (78,000) (78,000)
Purchase of treasury stock (in shares) 48,200
Vested restricted stock awards (in shares) 699,107
Stock-based compensation 1,558,000 1,558,000
Exercise of stock options and employee stock purchases 780,000 1,000 779,000
Exercise of stock options and employee stock purchases (in shares) 785,504
Stock awards to Board of Directors 94,000 94,000
Stock awards to Board of Directors (in shares) 77,971
Warrants exercised 17,401,000 16,000 17,385,000
Warrants exercised (in shares) 16,657,820
Issuance of common stock, net of issuance costs 23,146,000 23,000 23,123,000
Issuance of common stock, net of issuance costs (in shares) 22,550,000
Net loss (18,764,000) (18,764,000)
Balance at Mar. 31, 2012 58,617,000 300,000 790,901,000 (731,412,000) (1,172,000)
Balance (in shares) at Mar. 31, 2012 300,315,313 997,820
Increase (Decrease) in Stockholders' Equity
Purchase of treasury stock (40,000) (40,000)
Purchase of treasury stock (in shares) 40,883
Vested restricted stock awards (in shares) 469,911
Stock-based compensation 1,500,000 1,500,000
Exercise of stock options and employee stock purchases 21,000 1,000 20,000
Exercise of stock options and employee stock purchases (in shares) 22,478
Stock awards to Board of Directors 101,000 101,000
Stock awards to Board of Directors (in shares) 103,574
Issuance of common stock upon exercise of put option 4,250,000 5,000 4,245,000
Issuance of common stock upon exercise of put option (in shares) 4,750,000
Net loss (22,563,000) (22,563,000)
Balance at Mar. 31, 2013 $ 41,886,000 $ 306,000 $ 796,767,000 $ (753,975,000) $ (1,212,000)
Balance (in shares) at Mar. 31, 2013 305,661,276 1,038,703
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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
12 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2011
Cash Flows from Operating Activities:
Net loss $ (22,563,000) $ (18,764,000) $ (38,470,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 2,820,000 3,404,000 3,823,000
Amortization of deferred financing costs 148,000 169,000 193,000
Interest expense on second funding liability 55,000
Provision for allowance for doubtful accounts 276,000 2,256,000 231,000
Inventory write-down 1,307,000 1,525,000 1,123,000
Provision for warranty expenses 5,129,000 4,227,000 2,089,000
Loss on disposal of equipment 41,000 3,000 213,000
Stock-based compensation 1,601,000 1,652,000 2,418,000
Change in fair value of warrant liability (781,000) (13,983,000) 3,667,000
Changes in operating assets and liabilities:
Accounts receivable 359,000 (1,503,000) (1,096,000)
Inventories (2,878,000) (998,000) 1,764,000
Prepaid expenses and other assets 587,000 (220,000) (910,000)
Accounts payable and accrued expenses 1,221,000 2,660,000 4,966,000
Accrued salaries and wages and long term liabilities (107,000) 106,000 (151,000)
Accrued warranty reserve (4,324,000) (3,814,000) (2,044,000)
Deferred revenue 94,000 1,842,000 230,000
Net cash used in operating activities (17,070,000) (21,438,000) (21,899,000)
Cash Flows from Investing Activities:
Acquisition of and deposits on equipment and leasehold improvements (1,213,000) (1,419,000) (1,047,000)
Changes in restricted cash 1,250,000 (1,250,000)
Net cash used in investing activities (1,213,000) (169,000) (2,297,000)
Cash Flows from Financing Activities:
Net proceeds from (repayment of) revolving credit facility 3,045,000 3,351,000 (491,000)
Repayment of notes payable and capital lease obligations (128,000) (499,000) (448,000)
Net (cash used in) proceeds from employee stock-based transactions (19,000) 702,000 39,000
Net proceeds from issuance of common stock and warrants 23,146,000
Proceeds from exercise of common stock warrants and put options 4,250,000 11,403,000 11,282,000
Net cash provided by financing activities 7,148,000 38,103,000 10,382,000
Net increase (decrease) in Cash and Cash Equivalents (11,135,000) 16,496,000 (13,814,000)
Cash and Cash Equivalents, Beginning of Year 49,952,000 33,456,000 47,270,000
Cash and Cash Equivalents, End of Year 38,817,000 49,952,000 33,456,000
Cash paid during the year for:
Interest 588,000 672,000 624,000
Income taxes 635,000 204,000
Cash received during the period for income tax refund 127,000 222,000
Supplemental Disclosures of Non-Cash Information:
Issuance of common stock for Calnetix Power Solutions acquisition (in shares) 3,131,313
Insurance contracts financed by notes payable 476,000 635,000 443,000
Accrued purchases of property and equipment included in accounts payable 26,000 187,000 78,000
Fixed assets purchased with a note payable $ 306,000 $ 0 $ 0
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Description of the Company and Basis of Presentation
12 Months Ended
Mar. 31, 2013
Description of the Company and Basis of Presentation
Description of the Company and Basis of Presentation

1. Description of the Company and Basis of Presentation

        Capstone Turbine Corporation (the "Company") develops, manufactures, markets and services microturbine technology solutions for use in stationary distributed power generation applications, 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 addition, the Company's microturbines can be used as battery charging generators for hybrid electric vehicle applications. The Company was organized in 1988 and has been commercially producing its microturbine generators since 1998.

        The Company has incurred significant operating losses since its inception. Management anticipates incurring additional losses until the Company can produce sufficient revenue to cover its operating costs. To date, the Company has funded its activities primarily through private and public equity offerings. This Annual Report on Form 10-K (this "Form 10-K") refers to the Company's fiscal years ending March 31 as its "Fiscal" years.

        The consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company's net loss from operations for the Fiscal years ended 2013, 2012 and 2011 was $22.0 million, $31.7 million and $33.7 million, respectively. Management believes the improvement in the net loss will continue as the Company makes overall progress on our path to profitability. The Company's cash and cash equivalents as of March 31, 2013 and 2012 were $38.8 million and $50.0 million, respectively. The Company's change in cash and cash equivalents and its working capital requirements were in accordance with management's plan during Fiscal 2013.

        Management believes that existing cash and cash equivalents are sufficient to meet the Company's anticipated cash needs for working capital and capital expenditures for at least the next twelve months; however, if our anticipated cash needs change, it is possible that the Company may need to raise additional capital in the future. The Company may seek to raise funds by selling additional securities to the public or to selected investors or by obtaining additional debt financing. There is no assurance that the Company will be able to obtain additional funds on commercially favorable terms, or at all. If the Company raises additional funds by issuing additional equity or convertible debt securities, the fully diluted ownership percentages of existing stockholders will be reduced. In addition, any equity or debt securities that the Company would issue may have rights, preferences or privileges senior to those of the holders of its common stock.

        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 Singapore Pte., Ltd., its wholly owned subsidiary that was formed in February 2011, after elimination of inter-company transactions.

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Summary of Significant Accounting Policies
12 Months Ended
Mar. 31, 2013
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies

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.

        Restricted Cash    As of March 31, 2011, the Company had maintained $1.3 million as additional security for its line of credit with Wells Fargo. During Fiscal 2012, Wells Fargo released $1.3 million of the restricted cash.

        See Note 11—Revolving Credit Facility, for discussion of the line of credit with Wells Fargo.

        Fair Value of Financial Instruments    The carrying value of certain financial instruments, including cash equivalents, accounts receivable, accounts payable, revolving credit facility and notes payable approximate fair market value based on their short-term nature. See Note 10—Fair Value Measurements, for disclosure regarding the fair value of other financial instruments.

        Accounts Receivable    The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of customers to make required payments.

        Inventories    The Company values inventories at first in first out ("FIFO") basis and lower of cost or market. 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 with the exception of the backlog of 100 kW microturbines ("TA100") acquired from Calnetix Power Solutions, Inc. ("CPS"). Purchased backlog is amortized based on unit sales and presented as a component of cost of goods sold.

        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, 2013 and determined that no impairment was necessary. Intangible assets include a manufacturing license, trade name, technology, backlog and customer relationships. 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's revenue consists of sales of products, parts, accessories and service, which includes a comprehensive Factory Protection Plan ("FPP"), net of discounts. Capstone's distributors purchase products, parts and FPPs for sale to end users and are also required to provide a variety of additional services, including application engineering, installation, commissioning and post-commissioning repair and maintenance service. The Company's standard terms of sales to distributors and direct end-users include transfer of title, care, custody and control at the point of shipment, payment terms ranging from full payment in advance of shipment to payment in 90 days, no right of return or exchange, and no post-shipment performance obligations by Capstone except for warranties provided on the products and parts sold.

        Revenue from the sale of products, parts and accessories is generally recognized and earned when all of the following criteria are satisfied: (a) persuasive evidence of a sales arrangement exists; (b) price is fixed or determinable; (c) collectability is reasonably assured; and (d) delivery has occurred. Delivery generally occurs when the title and the risks and rewards of ownership have substantially transferred to the customer. Service performed by the Company has consisted primarily of time and materials based contracts. The time and materials contracts are usually related to out-of-warranty units. Service revenue derived from time and materials contracts is recognized as the service is performed. The Company also provides maintenance service contracts to customers of its existing installed base. The maintenance service contracts are agreements to perform certain services to maintain a product for a specified period of time. Service revenue derived from maintenance service contracts is recognized on a straight-line basis over the contract period.

        The Company occasionally enters into agreements that contain multiple elements, such as sale of equipment, installation, engineering and/or service. The Company allocates the total contract value among each element based on a selling price hierarchy as follows, where the selling price is based on (i) vendor specific objective evidence ("VSOE"), (ii) third party evidence ("TPE") or (iii) best estimate of selling price if VSOE or TPE are not available. Revenue is the amount related to each element or recognized in accordance with the revenue recognition policies discussed above.

        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 eighteen months. Factors that affect the Company's warranty obligation include product failure rates, anticipated hours of product operations and costs of repair or replacement in correcting product failures. These factors are estimates that may change based on new information that becomes available each period. Similarly, the Company also accrues the estimated costs to address reliability repairs on products no longer in warranty when, in the Company's judgment, and in accordance with a specific plan developed by the Company, it is prudent to provide such repairs. The Company assesses the adequacy of recorded warranty liabilities quarterly and makes adjustments to the liability as necessary. When the Company has sufficient evidence that product changes are altering the historical failure occurrence rates, the impact of such changes is then taken into account in estimating future warranty liabilities.

        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. Total offsets to R&D expenses amounted to $1.7 million, $0.8 million and $0.9 million for the years ended March 31, 2013, 2012 and 2011, respectively.

        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.

        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, 2013, the majority of our cash balances were held at financial institutions located in California, in accounts that are insured by the Federal Deposit Insurance Corporation. Uninsured balances aggregate to approximately $38.6 million as of March 31, 2013. 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 Horizon Power Systems ("Horizon"), one of the Company's domestic distributors, accounted for 27%, 19% and 18% of revenue for the years ended March 31, 2013, 2012 and 2011, respectively. Sales to BPC Engineering ("BPC"), one of the Company's Russian distributors, accounted for 11%, 26% and 23% of revenue for the years ended March 31, 2013, 2012 and 2011, respectively. Additionally, BPC and Regatta Solutions, Inc., one of the Company's domestic distributors, accounted for 35% and 11%, respectively, of net accounts receivable as of March 31, 2013. BPC accounted for 44% of net accounts receivable as of March 31, 2012.

        Accounts receivable, net as of March 31, 2013 and 2012 includes $0.3 million and $0.1 million of other receivables, respectively from the U.S. Department of Energy ("DOE") under grants awarded in 2009 and 2010.

        The Company recorded bad debt expense of $0.3 million, $2.3 million and $0.2 million for the years ended March 31, 2013, 2012 and 2011, respectively.

        Certain components of the Company's products are available from a limited number of suppliers. An interruption in supply could cause a delay in manufacturing, which would affect operating results adversely.

        Estimates and Assumptions    The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates include accounting for doubtful accounts, 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 at March 31, 2013, 2012 and 2011 were 11.8 million, 10.0 million and 10.1 million, respectively. Outstanding restricted stock units at March 31, 2013, 2012 and 2011 were 1.5 million, 1.1 million and 1.5 million, respectively. As of March 31, 2013, 2012 and 2011, the number of warrants excluded from diluted net loss per common share computations was approximately 26.5 million, 26.5 million and 21.7 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.

        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,  
 
  2013   2012   2011  

United States

  $ 57,001   $ 41,796   $ 25,630  

Mexico

    22,581     7,798     5,416  

All other North America

    4,370     116     808  
               

Total North America

    83,952     49,710     31,854  

Russia

   
13,827
   
29,722
   
20,655
 

All other Europe

    12,036     17,452     15,375  
               

Total Europe

    25,863     47,174     36,030  

Asia

   
8,473
   
5,692
   
7,811
 

Australia

    5,461     2,749     3,754  

All other

    3,808     4,046     2,441  
               

Total Revenue

  $ 127,557   $ 109,371   $ 81,890  
               

        The following table summarizes the Company's revenue by product (in thousands):

 
  Year Ended March 31,  
 
  2013   2012   2011  

C30

  $ 6,756   $ 4,426   $ 6,043  

C65

    22,899     28,680     23,377  

TA100

    1,485     681     5,121  

C200

    18,099     7,361     5,289  

C600

    12,384     7,567     2,172  

C800

    5,324     8,728     4,362  

C1000

    35,571     32,475     18,619  

Waste heat recovery generator

            627  

Unit upgrades

    129         704  
               

Total from Microturbine Products

    102,647     89,918     66,314  

Accessories, Parts and Service

    24,910     19,453     15,576  
               

Total

  $ 127,557   $ 109,371   $ 81,890  
               

        Substantially all of the Company's operating assets are in the United States.

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Inventories
12 Months Ended
Mar. 31, 2013
Inventories
Inventories

3. Inventories

        Inventories are valued on a FIFO basis and lower of cost or market and consisted of the following as of March 31, 2013 and 2012 (in thousands):

 
  2013   2012  

Raw materials

  $ 20,198   $ 18,476  

Work in process

        151  

Finished goods

    1,567     1,567  
           

Total

    21,765     20,194  

Less non-current portion

    (3,252 )   (1,313 )
           

Current portion

  $ 18,513   $ 18,881  
           

        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, 2013 is 1.6 years. The Company expects to use the non-current portion of the inventories on hand as of March 31, 2013 over the periods presented in the following table (in thousands):

Expected Period of Use
  Non-current
Inventory Balance
Expected to be Used
 

13 to 24 months

  $ 2,401  

25 to 36 months

    567  

37 to 48 months

    284  
       

Total

  $ 3,252  
       
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Property, Plant and Equipment
12 Months Ended
Mar. 31, 2013
Property, Plant and Equipment
Property, Plant and Equipment

4. Property, Plant and Equipment

        Property, plant and equipment as of March 31, 2013 and 2012 consisted of the following (in thousands):

 
  2013   2012   Estimated
Useful Life

Machinery, rental equipment, equipment, automobiles and furniture

  $ 20,649   $ 20,506   2 - 10 years

Leasehold improvements

    9,708     9,696   10 years

Molds and tooling

    4,933     4,880   2 - 5 years
             

 

    35,290     35,082    

Less, accumulated depreciation

    (31,747 )   (30,249 )  
             

Total property, plant and equipment, net

  $ 3,543   $ 4,833    
             

        Depreciation expense for property, plant and equipment was $2.3 million, $2.6 million and $2.8 million for the years ended March 31, 2013, 2012 and 2011, respectively.

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Intangible Assets
12 Months Ended
Mar. 31, 2013
Intangible Assets
Intangible Assets

5. Intangible Assets

        Intangible assets consisted of the following (in thousands):

 
  March 31, 2013  
 
  Weighted
Average
Amortization
Period
  Intangible
Assets,
Gross
  Accumulated
Amortization
  Intangible
Assets,
Net
 

Manufacturing license

  17 years   $ 3,700   $ 3,487   $ 213  

Technology

  10 years     2,240     709     1,531  

Parts and service customer relationships

  5 years     1,080     684     396  

TA100 customer relationships

  2 years     617     617      

Backlog

  Various     490     317     173  

Trade name

  1.2 years     69     69      
                   

Total

      $ 8,196   $ 5,883   $ 2,313  
                   


 

 
  March 31, 2012  
 
  Weighted
Average
Amortization
Period
  Intangible
Assets,
Gross
  Accumulated
Amortization
  Intangible
Assets,
Net
 

Manufacturing license

  17 years   $ 3,700   $ 3,437   $ 263  

Technology

  10 years     2,240     485     1,755  

Parts and service customer relationships

  5 years     1,080     468     612  

TA100 customer relationships

  2 years     617     617      

Backlog

  Various     490     309     181  

Trade name

  1.2 years     69     69      
                   

Total

      $ 8,196   $ 5,385   $ 2,811  
                   

        Amortization expense for the intangible assets was $0.5 million, $0.8 million, and $1.1 million for the years ended March 31, 2013, 2012 and 2011.

        Expected future amortization expense of intangible assets as of March 31, 2013 is as follows (in thousands):

Year Ending March 31,
  Amortization
Expense
 

2014

  $ 582  

2015

    532  

2016

    273  

2017

    273  

2018

    242  

Thereafter

    411  
       

Total expected future amortization

  $ 2,313  
       

        The manufacturing license provides the Company with the ability to manufacture recuperator cores previously purchased from Solar Turbines Incorporated ("Solar"). 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 $76,700, $72,800, and $62,800 were earned by Solar for the years ended March 31, 2013, 2012 and 2011, respectively. Earned royalties of approximately $24,600 and $17,500 were unpaid as of March 31, 2013 and 2012, respectively, and are included in accrued expenses in the accompanying balance sheets.

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Accrued Warranty Reserve
12 Months Ended
Mar. 31, 2013
Accrued Warranty Reserve
Accrued Warranty Reserve

6. Accrued Warranty Reserve

        Changes in the accrued warranty reserve are as follows as of March 31, 2013, 2012 and 2011 (in thousands):

 
  2013   2012   2011  

Balance, beginning of the period

  $ 1,494   $ 1,081   $ 1,036  

Standard warranty provision

    3,874     3,790     2,015  

Changes for accrual related to reliability repair programs

    1,255     437     74  

Deductions for warranty claims

    (4,324 )   (3,814 )   (2,044 )
               

Balance, end of the period

  $ 2,299   $ 1,494   $ 1,081  
               
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Deferred Revenue
12 Months Ended
Mar. 31, 2013
Deferred Revenue
Deferred Revenue

7. Deferred Revenue

        Changes in deferred revenue are as follows as of March 31, 2013 (in thousands):

 
  2013  

FPP Balance, beginning of the period

  $ 1,167  

FPP Billings

    5,884  

FPP Revenue recognized

    (5,639 )
       

Balance attributed to FPP contracts

    1,412  

Deposits

    1,677  
       

Deferred revenue balance, end of the period

  $ 3,089  
       

        Comprehensive Factory Protection Plan ("FPP") deferred revenue represents the unearned portion of our agreements. FPP agreements are generally paid quarterly in advance with revenue recognized on a straight line basis over the contract period. Deposits are primarily non-refundable cash payments from distributors for future orders.

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Income Taxes
12 Months Ended
Mar. 31, 2013
Income Taxes
Income Taxes

8. Income Taxes

        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 for the year ended March 31, 2013 was $0.7 million, which was all related to foreign taxes. The Company did not have current federal income taxes for the year ended March 31, 2013.

        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,  
 
  2013   2012   2011  

Federal income tax at the statutory rate

  $ (7,436 ) $ (6,317 ) $ (12,997 )

State taxes, net of federal effect

    (661 )   (727 )   (1,390 )

Foreign taxes

    675     313     461  

R&D tax credit

    (1,157 )   (455 )   (367 )

Impact of state rate change

    838     (693 )   1,541  

Warrant liability

    (299 )   (5,301 )   9,981  

Expiring NOL

        9,765     6,278  

Valuation allowance

    (1,877 )   3,423     (4,343 )

Excess tax benefit—stock compensation

    10,383          

Other

    228     178     1,076  
               

Income tax expense (benefit)

  $ 694   $ 186   $ 240  
               

        The Company's deferred tax assets and liabilities consisted of the following at March 31, 2013 and 2012 (in thousands):

 
  2013   2012  

Deferred tax assets:

             

Inventories

  $ 1,754   $ 1,492  

Warranty reserve

    866     597  

Deferred revenue

    532     466  

Net operating loss ("NOL") carryforwards

    211,724     215,545  

Tax credit carryforwards

    18,295     17,013  

Depreciation, amortization and impairment loss

    3,997     4,252  

Other

    5,498     5,434  
           

Deferred tax assets

    242,666     244,799  

Valuation allowance for deferred tax assets

    (232,555 )   (234,432 )
           

Deferred tax assets, net of valuation allowance

    10,111     10,367  

Deferred tax liabilities:

             

Federal benefit of state taxes

    (10,111 )   (10,367 )
           

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 2013, 2012 and 2011 was $1.9 million, $3.4 million and $4.3 million, respectively.

        The Company's NOL and tax credit carryforwards for federal and state income tax purposes at March 31, 2013 were as follows (in thousands):

 
  Amount   Expiration
Period

Federal NOL

  $ 592,005   2018 - 2033

State NOL

  $ 283,866   2013 - 2033

Federal tax credit carryforwards

  $ 9,577   2018 - 2033

State tax credit carryforwards

  $ 8,718   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.

        Tax benefits arising from the disposition of certain shares issued upon exercise of stock options within two years of the date of grant or within one year of the date of exercise by the option holder ("Disqualifying Dispositions") provide the Company with a tax deduction equal to the difference between the exercise price and the fair market value of the stock on the date of exercise. Approximately $27.7 million of the Company's federal and state NOL carryforwards as of March 31, 2013 were generated by Disqualifying Dispositions of stock options and exercises of nonqualified stock options. In accordance with the reporting requirements under ASC 718, we did not include approximately $10.4 million of excess windfall tax benefits resulting from stock option exercises as components of our gross deferred tax assets and corresponding valuation allowance disclosures, as tax attributes related to those windfall tax benefits should not be recognized until they result in a reduction of taxes payable. The tax effected amount of gross unrealized net operating loss carry forwards excluded under ASC 718 was approximately $10.4 million at March 31, 2013. When realized, those excess windfall tax benefits are credited to additional paid-in capital.

        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, 2013 and 2012 was $2.4 million and $2.1 million, respectively. There were no interest or penalties related to unrecognized tax benefits as of March 31, 2013 or March 31, 2012. The amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate as of March 31, 2013 and March 31, 2012 was $2.4 million and $2.1 million, respectively. However, this impact would be offset by an equal increase in the deferred tax valuation allowance as the Company has recorded a full valuation allowance against its deferred tax assets because of uncertainty as to future realization. The fully reserved recognized federal and state deferred tax assets related to research and development credits balance as of March 31, 2013 and 2012 was $9.6 million and $9.1 million, and $8.7 million and $7.9 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, 2010

  $ 1,806  

Gross increase related to prior year tax positions

     

Gross increase related to current year tax positions

    167  

Lapse of statute of limitations

     
       

Balance at March 31, 2011

  $ 1,973  

Gross increase related to prior year tax positions

     

Gross increase related to current year tax positions

    175  

Lapse of statute of limitations

     
       

Balance at March 31, 2012

  $ 2,148  

Gross decrease related to prior year tax positions

    (100 )

Gross increase related to prior year tax positions

    222  

Gross increase related to current year tax positions

    148  

Lapse of statute of limitations

     
       

Balance at March 31, 2013

  $ 2,418  
       

        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 2008. 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, 2013. The Company settled its Internal Revenue Service examination of its U.S. federal tax return for the fiscal year ended March 31, 2010 during the third quarter of the fiscal year ended March 31, 2012, with no findings that resulted in a change to the Company's financial statements. When applicable, the Company accounts for interest and penalties generated by tax contingencies as interest and other expense, net in the statements of operations.

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Stockholders' Equity
12 Months Ended
Mar. 31, 2013
Stockholders' Equity
Stockholders' Equity

9. Stockholders' Equity

        The following table summarizes, by statement of operations line item, stock-based compensation expense for the years ended March 31, 2013, 2012 and 2011 (in thousands):

 
  Fiscal Year Ended March 31,  
 
  2013   2012   2011  

Cost of goods sold

  $ 92   $ 136   $ 209  

Research and development

    319     324     211  

Selling, general and administrative

    1,190     1,192     1,998  
               

Stock-based compensation expense

  $ 1,601   $ 1,652   $ 2,418  
               

Stock Plans

1993 Incentive Stock Plan and 2000 Equity Incentive Plan

        In 1993, the Board of Directors adopted and the stockholders approved the 1993 Incentive Stock Plan ("1993 Plan"). A total of 7,800,000 shares of common stock were initially reserved for issuance under the 1993 Plan. In June 2000, the Company adopted the 2000 Equity Incentive Plan ("2000 Plan") as a successor plan to the 1993 Plan. The 2000 Plan provides for awards of up to 11,180,000 shares of common stock, plus 7,800,000 shares previously authorized under the 1993 Plan; provided, however, that the maximum aggregate number of shares which may be issued is 18,980,000 shares. The 2000 Plan is administered by the Compensation Committee designated by the Board of Directors. The Compensation Committee's authority includes determining the number of incentive awards and vesting provisions. As of March 31, 2013, there were 7,059,019 shares available for future grant.

        As of March 31, 2013, the Company had outstanding 3,550,000 non-qualified common stock options issued outside of the 2000 Plan. The Company granted 250,000 of these stock options during the second quarter of Fiscal 2013, 250,000 of these stock options during Fiscal 2012 and 3,050,000 of the options prior to Fiscal 2008 as inducement grants to new officers and employees of the Company, with exercise prices equal to the fair market value of the Company's common stock on the grant date. Included in the 3,550,000 options were 2,000,000 options granted to the Company's President and Chief Executive Officer, 850,000 options granted to the Company's Executive Vice President of Sales and Marketing, 250,000 options granted to the Company's Senior Vice President of Program Management, 200,000 options granted to the Company's Senior Vice President of Human Resources and 250,000 options granted to the Company's Senior Vice President of Customer Service. Additionally, as of March 31, 2013, the Company had outstanding 62,500 restricted stock units issued outside of the 2000 Plan. These restricted stock units were issued during the second quarter of Fiscal 2013 as an inducement grant to the Company's Senior Vice President of Customer Service. Although the options and restricted stock units were not granted under the 2000 Plan, they are governed by terms and conditions identical to those under the 2000 Plan. All options are subject to the following vesting provisions: one-fourth vest one year after the issuance date and 1/48th vest on the first day of each full month thereafter, so that all options will be vested on the first day of the 48th month after the grant date. All outstanding options have a contractual term of ten years. The restricted stock units vest in equal installments over a period of four years. Information relating to all outstanding stock options, except for rights associated with the Purchase Plan, is as follows:

 
  Shares   Weighted-
Average
Exercise Price
  Weighted-
Average
Remaining
Contractual
Term
  Aggregate
Intrinsic
Value
 
 
   
   
  (in years)
   
 

Options outstanding at March 31, 2012

    10,039,651   $ 1.41              

Granted

    1,958,330   $ 1.01              

Exercised

                     

Forfeited, cancelled or expired

    (206,216 ) $ 2.16              
                       

Options outstanding at March 31, 2013

    11,791,765   $ 1.33     5.6   $ 157,050  

Options fully vested at March 31, 2013 and those expected to vest beyond March 31, 2013

    11,560,603   $ 1.34     5.5   $ 157,048  

Options exercisable at March 31, 2013

    9,024,229   $ 1.39     4.6   $ 155,696  
                   

        The weighted average per share grant date fair value of options granted during the fiscal years ended March 31, 2013, 2012 and 2011 was $0.67, $1.19 and $1.02, respectively. There were no options exercised during the fiscal year ended March 31, 2013. The weighted average per share grant date fair value of options exercised during the fiscal years ended March 31, 2012 and 2011 was $0.99 and $1.05, respectively. The Company recorded expense of approximately $0.9 million, $0.9 million and $1.5 million associated with its stock options for the fiscal years ended March 31, 2013, 2012 and 2011, respectively. The total intrinsic value of option exercises during the fiscal years ended March 31, 2012 and 2011, was approximately $0.6 million and $35,000, respectively. As of March 31, 2013, there was approximately $1.7 million of total compensation cost related to unvested stock option awards that is expected to be recognized as expense over a weighted average period of 2.8 years.

        The Company calculated the estimated fair value of each stock option on the date of grant using the Black-Scholes valuation method and the following weighted-average assumptions:

 
  Fiscal Year Ended
March 31,
 
 
  2013   2012   2011  

Risk-free interest rates

    0.8 %   1.9 %   3.1 %

Expected lives (in years)

    5.7     5.0     5.0  

Dividend yield

    %   %   %

Expected volatility

    79.8 %   89.0 %   97.9 %

Weighted average grant date fair value of options granted during the period

  $ 0.67   $ 1.19   $ 1.02  

        The Company's computation of expected volatility for the fiscal years ended March 31, 2013, 2012 and 2011 was based on historical volatility. The expected life, or term, of options granted is derived from historical exercise behavior and represents the period of time that stock option awards are expected to be outstanding. Management has selected a risk-free rate based on the implied yield available on U.S. Treasury Securities with a maturity equivalent to the options' expected term. Stock-based compensation expense is based on awards that are ultimately expected to vest and accordingly, stock-based compensation recognized in the fiscal years ended March 31, 2013, 2012 and 2011 has been reduced by estimated forfeitures. Management's estimate of forfeitures is based on historical forfeitures. The following table outlines the restricted stock unit activity:

Restricted Stock Units
  Shares   Weighted
Average Grant
Date Fair
Value
 

Nonvested restricted stock units outstanding at March 31, 2012

    1,143,262   $ 1.20  

Granted

    919,414   $ 1.00  

Vested and issued

    (469,911 ) $ 1.15  

Forfeited

    (125,669 ) $ 1.05  
             

Nonvested restricted stock units outstanding at March 31, 2013

    1,467,096   $ 1.10  
           

Restricted stock units expected to vest beyond March 31, 2013

    1,358,386   $ 1.10  
           

        The restricted stock units were 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 related compensation expense recognized has been reduced by estimated forfeitures. The Company's estimate of forfeitures is based on historical forfeitures. The restricted stock units vest in equal installments over a period of two or four years. For restricted stock units with two year vesting, one-half of such units vest one year after the issuance date and the other half vest two years after the issuance date. For restricted stock units with four year vesting, one-fourth vest annually beginning one year after the issuance date.

        The weighted average per share grant date fair value of restricted stock granted during the fiscal years ended March 31, 2013, 2012 and 2011 was $1.00, $1.47 and $1.04, respectively. The total fair value of restricted stock units vested and issued by the Company during the years ended March 31, 2013, 2012 and 2011 was approximately $0.6 million, $1.1 million and $0.8 million, respectively. The Company recorded expense of approximately $0.8 million, $0.7 million and $1.0 million associated with its restricted stock awards and units for the fiscal years ended March 31, 2013, 2012 and 2011, respectively. As of March 31, 2013, there was approximately $1.0 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 2.2 years.

        During the fiscal years ended March 31, 2013, 2012 and 2011 the Company issued a total of 103,574, 77,971 and 109,554 shares of stock, respectively, to non-employee directors who elected to take payment of all or any part of the directors' fees in stock in lieu of cash. For each term of the Board of Directors (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, in lieu of all or any portion of their annual retainer or committee fee cash payment, a stock award. The shares of stock were valued based on the closing price of the Company's common stock on the date of grant, and the weighted average grant date fair value for these shares during each of the fiscal years ended March 31, 2013, 2012 and 2011 was $0.98, $1.20 and $0.91, respectively.

2000 Employee Stock Purchase Plan

        In June 2000, the Company adopted the 2000 Employee Stock Purchase Plan (the "Purchase Plan"), which provides for the granting of rights to purchase common stock to regular full and part-time employees or officers of the Company and its subsidiaries. Under the Purchase Plan, shares of common stock will be issued upon exercise of the purchase rights. Under the Purchase Plan, an aggregate of 900,000 shares may be issued pursuant to the exercise of purchase rights. In August 2010, the Board of Directors adopted and the stockholders approved an amendment and restatement of the Purchase Plan. The amendment and restatement includes an increase of 500,000 shares of common stock that will be available under the Purchase Plan and extends the term of the Purchase Plan for a period of ten years. As amended, the Purchase Plan will continue by its terms through June 30, 2020, unless terminated sooner, and will reserve for issuance a total of 1,400,000 shares of common stock. The maximum amount that an employee can contribute during a purchase right period is $25,000 or 15% of the employee's regular compensation. Under the Purchase Plan, the exercise price of a purchase right is 95% of the fair market value of such shares on the last day of the purchase right period. The fair market value of the stock is its closing price as reported on the Nasdaq Global Market on the day in question. During the fiscal years ended March 31, 2013, 2012 and 2011, the Company issued a total of 22,478 shares, 21,338 shares and 25,133 shares of stock, respectively, to regular full and part-time employees or officers of the Company who elected to participate in the Purchase Plan. As of March 31, 2013, there were 442,490 shares available for future grant under the Purchase Plan.

Stockholder Rights Plan

        The Company has entered into a rights agreement, as amended, with Mellon Investor Services LLC, as rights agent. In connection with the rights agreement, the Company's board of directors authorized and declared a dividend distribution of one preferred stock purchase right for each share of the Company's common stock authorized and outstanding. Each right entitles the registered holder to purchase from the Company a unit consisting of one one-hundredth of a share of Series A Junior Participating Preferred Stock, par value $0.001 per share, at a purchase price of $10.00 per unit, subject to adjustment. The description and terms of the rights are set forth in the rights agreement. Initially, the rights are attached to all common stock certificates representing shares then outstanding, and no separate rights certificates are distributed. Subject to certain exceptions specified in the rights agreement, the rights will separate from the common stock and will be exercisable upon the earlier of (i) 10 days following a public announcement that a person or group of affiliated or associated persons has acquired, or obtained the right to acquire, beneficial ownership of 20% or more of the outstanding shares of common stock, other than as a result of repurchases of stock by the Company or certain inadvertent actions by institutional or certain other stockholders, or (ii) 10 days (or such later date as the Company's Board of Directors shall determine) following the commencement of a tender offer or exchange offer (other than certain permitted offers described in the rights agreement) that would result in a person or group beneficially owning 20% or more of the outstanding shares of the Company's common stock. On June 9, 2011, the Company's Board of Directors unanimously approved a second amendment to the rights agreement, which was approved by the stockholders in August 2011. The second amendment adds an additional "sunset provision," which provides that the rights agreement will expire on the 30th day after the 2014 annual meeting of stockholders unless continuation of the rights agreement is approved by the stockholders at that meeting. The second amendment also provides for an update to the definition of "Beneficial Owner" to include derivative interests in the calculation of a stockholder's ownership. In addition, the second amendment clarifies the manner in which the exchange provision of the rights agreement shall be effected. The rights are intended to protect the Company's stockholders in the event of an unfair or coercive offer to acquire the Company. The rights, however, should not affect any prospective offeror willing to make an offer at a fair price and otherwise in the best interests of the Company and its stockholders, as determined by the Board of Directors. The rights should also not interfere with any merger or other business combination approved by the Board of Directors.

Underwritten and Registered Direct Placement of Common Stock

        Effective March 5, 2012, the Company completed a registered direct placement in which it sold 22.6 million shares of the Company's common stock, par value $.001 per share, and warrants to purchase 22.6 million shares of common stock with an initial exercise price of $1.55 per share, at a price of $1.11 per unit (the "2012 Warrants"). Each unit consisted of one share of common stock and a warrant to purchase one share of common stock. The 2012 Warrants expire on October 31, 2013. In addition, the Company obtained the right to require investors in the offering to purchase up to an aggregate maximum of 19.0 million additional shares of common stock from the Company (the "Put Options") during two option exercise periods, the first such option exercise period beginning September 10, 2012 and the second such option exercise period beginning March 4, 2013. Each Put Option was subject to certain conditions which reduced the number of shares that could be sold or eliminate the Put Option. These conditions included a minimum volume-weighted average price (VWAP) and a minimum average trading volume of the Company's common shares during the 30 trading days prior to the exercise of the Put Option. The March 2012 sale resulted in net proceeds of approximately $23.1 million net of direct incremental costs of approximately $1.9 million.

        On September 18, 2012, the Company entered into an Investor Agreement with one of the investors in the 2012 registered direct offering pursuant to which the investor agreed to (i) waive the condition precedent to the Company's exercise of the Put Option requiring the arithmetic average of the average daily trading volumes during the measurement period set forth in the subscription agreement between the Company and the investor and on the exercise date be not less than 1.75 million shares and (ii) amend the subscription agreement to provide that the purchase price of the additional shares during the first exercise period would be discounted pursuant to a formula that resulted in a purchase price for the first exercise period of $0.94 per share. Additionally, pursuant to the Investor Agreement, the Company agreed to amend the exercise price of the 2012 Warrants originally issued to the Investor to $1.26. The exercise of the first Put Option resulted in net proceeds of $4.2 million. The 2012 Warrants still outstanding as of March 31, 2013 provided for the purchase of 22.6 million shares at a weighted average exercise price of $1.41 per share. On February 21, 2013, the Company entered into a letter agreement (each a "Letter Agreement" and, collectively, the "Letter Agreements") with each of the investors in the March 5, 2012 registered direct offering. Pursuant to the Letter Agreements, the parties evidenced their mutual agreement that the Company would not exercise any portion of the second Put Option. The Company chose not to exercise the second of the two Put Options because of its improved cash position and its desire to avoid stockholder dilution.

        Effective January 9, 2012, the Company entered into warrant exercise agreements with two holders of warrants issued by the Company on January 24, 2007 (the "2007 Warrants") to purchase an aggregate of 1.6 million shares of the Company's common stock. Pursuant to the warrant exercise agreements, the holders agreed to exercise the 2007 Warrants at the existing exercise price of $1.17 in exchange for fees in the aggregate amount of approximately $0.3 million. The net proceeds to the Company in connection with the exercise of these 2007 Warrants was approximately $1.6 million.

        Effective November 21, 2011, the Company entered into warrant exercise agreements with (i) two holders of warrants issued by the Company on September 17, 2009 (the "September 2009 Warrants") to purchase an aggregate of 5.8 million shares of the Company's common stock, (ii) four holders of warrants issued by the Company on September 17, 2008 (the "2008 Warrants") to purchase an aggregate of 2.4 million shares of the Company's common stock and (iii) six holders of 2007 Warrants to purchase an aggregate of 5.2 million shares of the Company's common stock. Pursuant to the warrant exercise agreements, the September 2009 Warrant holders agreed to exercise the September 2009 Warrants described above at the existing exercise price of $1.34 in exchange for a fee of an aggregate amount of approximately $5.4 million, the 2008 Warrant holders agreed to exercise the 2008 Warrants described above at the existing exercise price of $1.60 in exchange for a fee of an aggregate amount of approximately $2.2 million and the 2007 Warrant holders agreed to exercise the 2007 Warrants described above at the existing exercise price of $1.17 in exchange for a fee of an aggregate amount of approximately $1.8 million. The net proceeds to the Company, in connection with the exercise of the September 2009 Warrants, the 2008 Warrants and the 2007 Warrants, were approximately $8.4 million. The 2008 Warrants to purchase an additional 0.5 million shares were subsequently exercised on November 22, 2011 at the existing exercise price of $1.60 in exchange for a fee of approximately $0.5 million, resulting in net proceeds of approximately $0.4 million.

        Effective March 9, 2011, the Company entered into warrant exercise agreements with (i) the only two holders of warrants issued by the Company on May 7, 2009 (the "May 2009 Warrants") to purchase an aggregate of 3.6 million shares of the Company's common stock, (ii) one holder of 2008 Warrants to purchase 0.4 million shares of the Company's common stock and (iii) four holders of 2007 Warrants to purchase an aggregate of 8.5 million shares of the Company's common stock. Pursuant to the warrant exercise agreements, the May 2009 Warrant holders agreed to exercise the May 2009 Warrants described above at the existing exercise price of $0.95 per share in exchange for a fee of an aggregate amount of approximately $1.0 million, the 2008 Warrant holder agreed to exercise the 2008 Warrants described above at the existing exercise price of $1.60 per share in exchange for a fee of an aggregate amount of approximately $0.2 million and the 2007 Warrant holders agreed to exercise the 2007 Warrants described above at the existing exercise price of $1.17 per share in exchange for a fee of an aggregate amount of approximately $1.2 million. The net proceeds to the Company in connection with the exercise of the May 2009 Warrants, the 2008 Warrants and the 2007 Warrants, after deducting expenses of approximately $0.4 million, was approximately $11.2 million. Immediately prior to the exercise of these warrants, the Company revalued the warrants and recorded a charge of $6.9 million to operations during the three months ended March 31, 2011. The induced exercise of the warrants resulted in a reduction of the charge to operations by $1.0 million during the three months ended March 31, 2011. The exercise of these warrants resulted in a reduction of the warrant liability of $9.7 million.

        The following table outlines the warrant activity:

 
  March
2012
Shares
  September
2009
Shares
  May
2009
Shares
  September
2008
Shares
  January
2007
Shares
 

Balance, March 31, 2010

        5,780,347     3,612,717     7,686,795     17,003,898  

Issuance of warrants

                48,042      

Warrants exercised

            (3,612,717 )   (392,190 )   (8,468,324 )
                       

Balance, March 31, 2011

        5,780,347         7,342,647     8,535,574  

Issuance of warrants

    22,550,000                  

Warrants exercised

        (5,780,347 )       (3,579,239 )   (7,298,234 )

Anti-dilution provision

                146,626      

Warrants expired

                    (1,237,340 )
                       

Balance, March 31, 2012

    22,550,000             3,910,034      

Anti-dilution provision

                51,437        
                       

Balance, March 31, 2013

    22,550,000             3,961,471      
                       
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Fair Value Measurements
12 Months Ended
Mar. 31, 2013
Fair Value Measurements
Fair Value Measurements

10. Fair Value Measurements

        The FASB has established a framework for measuring fair value in generally accepted accounting principles. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are described as follows:

  •         Level 1.     Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets.

            Level 2.     Inputs to the valuation methodology include:

    • Quoted prices for similar assets or liabilities in active markets

      Quoted prices for identical or similar assets or liabilities in inactive markets

      Inputs other than quoted prices that are observable for the asset or liability

      Inputs that are derived principally from or corroborated by observable market data by correlation or other means

            If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability.

            Level 3.     Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

        The asset or liability's fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

        The table below presents our assets and liabilities that are measured at fair value on a recurring basis during Fiscal 2013 and are categorized using the fair value hierarchy (in thousands):

 
  Fair Value Measurements at March 31, 2013  
 
  Total   Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
  Significant Other
Observable
Inputs
(Level 2)
  Significant
Unobservable
Inputs
(Level 3)
 

Cash equivalents

  $ 27,742   $ 27,742   $   $  

Warrant liability

  $ (10 ) $   $   $ (10 )

        Cash equivalents includes cash held in money market and U.S. Treasury Funds at March 31, 2013.

        The table below presents our assets and liabilities that are measured at fair value on a recurring basis during Fiscal 2012 and are categorized using the fair value hierarchy (in thousands):

 
  Fair Value Measurements at March 31, 2012  
 
  Total   Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
  Quoted Prices in
Active Markets for
Identical Assets
(Level 2)
  Significant
Unobservable
Inputs
(Level 3)
 

Cash equivalents

  $ 39,790   $ 39,790   $   $  

Warrant liability

  $ (791 ) $   $   $ (791 )

Basis for Valuation

        The carrying values reported in the consolidated balance sheets for cash and cash equivalents, restricted cash, accounts receivable and accounts payable approximate fair values because of the immediate or short-term maturities of these financial instruments. As the Company's obligations under the Credit Facility are based on adjustable market interest rates, the Company has determined that the carrying value approximates the fair value. The carrying values and estimated fair values of these obligations are as follows (in thousands):

 
  As of
March 31, 2013
  As of
March 31, 2012
 
 
  Carrying
Value
  Estimated
Fair Value
  Carrying
Value
  Estimated
Fair Value
 

Obligations under the credit facility

  $ 13,476   $ 13,476   $ 10,431   $ 10,431  

        The Company adopted the amended provisions of ASC 815 on determining what types of instruments or embedded features in an instrument held by a reporting entity can be considered indexed to its own stock for the purpose of evaluating the first criteria of the scope exception in ASC 815. Warrants issued by the Company in prior periods with certain antidilution provisions for the holder are no longer considered indexed to the Company's own stock, and therefore no longer qualify for the scope exception and must be accounted for as derivatives. These warrants were reclassified as liabilities under the caption "Warrant liability" and recorded at estimated fair value at each reporting date, computed using the Monte Carlo simulation valuation method. The Company will continue to adjust the warrant liability for changes in fair value until the earlier of the exercise of the warrants, at which time the liability will be reclassified to stockholders' equity, or expiration of the warrants. Changes in the liability from period to period are recorded in the Statements of Operations under the caption "Change in fair value of warrant liability."

        The fair value of the Company's warrant liability (see Note 9—Stockholders' Equity—Underwritten and Registered Direct Placement of Common Stock) recorded in the Company's financial statements is determined using the Monte Carlo simulation valuation method and the quoted price of the Company's common stock in an active market, volatility and expected life, a Level 3 measurement. Volatility is based on the actual market activity of the Company's stock. The expected life is based on the remaining contractual term of the warrants and the risk free interest rate is based on the implied yield available on U.S. Treasury Securities with a maturity equivalent to the warrants' expected life.

        The Company calculated the estimated fair value of warrants on the date of issuance and at each subsequent reporting date using the following assumptions:

 
  Fiscal Year Ended
March 31, 2013
  Fiscal Year Ended
March 31, 2012

Risk-free interest rates range

  0.1% to 0.2%   0.0% to 1.5%

Contractual term (in years)

  0.5 years to 1.2 years   0.1 years to 4.9 years

Expected volatility range

  37.2% to 65.8%   60.5% to 84.9%

        From time to time, the Company sells common stock warrants that are derivative instruments. The Company does not enter into speculative derivative agreements and does not enter into derivative agreements for the purpose of hedging risks.

        As discussed above, the Company adopted authoritative guidance issued by the FASB on contracts in an entity's own equity that requires the common stock warrants to be classified as liabilities at their estimated fair value with changes in fair value at each reporting date recognized in the statement of operations. The table below provides a reconciliation of the beginning and ending balances for the warrant liability which is measured at fair value using significant unobservable inputs (Level 3) (in thousands):

Warrant liability:

       

Balance as of March 31, 2010

  $ 26,803  

Total realized and unrealized (gains) losses:

       

Expense included in change in fair value of warrant liability

    3,667  

Purchases, issuances and settlements

    (9,698 )
       

Balance as of March 31, 2011

  $ 20,772  

Total realized and unrealized (gains) losses:

       

Income included in change in fair value of warrant liability

    (13,872 )

Purchases, issuances and settlements

    (6,109 )
       

Balance at March 31, 2012

  $ 791  

Total realized and unrealized (gains) losses:

       

Income included in change in fair value of warrant liability

    (781 )
       

Balance at March 31, 2013

  $ 10  
       
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Revolving Credit Facility
12 Months Ended
Mar. 31, 2013
Revolving Credit Facility
Revolving Credit Facility

11. Revolving Credit Facility

        The Company maintains two Credit and Security Agreements, as amended (the "Agreements"), with Wells Fargo Bank, National Association ("Wells Fargo"), which provide the Company with a line of credit of up to $15.0 million in the aggregate (the "Credit Facility"). The amount actually available to the Company may be less and may vary from time to time depending on, among other factors, the amount of its eligible inventory and accounts receivable. As security for the payment and performance of the Credit Facility, the Company granted a security interest in favor of Wells Fargo in substantially all of the assets of the Company. The Agreements will terminate in accordance with their terms on September 30, 2014.

        The Agreements include affirmative covenants as well as negative covenants that prohibit a variety of actions without Wells Fargo's consent, including covenants that limit the Company's ability to (a) incur or guarantee debt, (b) create liens, (c) enter into any merger, recapitalization or similar transaction or purchase all or substantially all of the assets or stock of another entity, (d) pay dividends on, or purchase, acquire, redeem or retire shares of, the Company's capital stock, (e) sell, assign, transfer or otherwise dispose of all or substantially all of the Company's assets, (f) change the Company's accounting method or (g) enter into a different line of business. Furthermore, the Agreements contain financial covenants, including (a) a requirement not to exceed specified levels of losses, (b) a requirement to maintain a substantial minimum monthly cash balance to outstanding line of credit advances based upon the Company's financial performance which was $15.0 million as of March 31, 2013, and (c) limitations on the Company's annual capital expenditures. The Agreement also defines an event of default to include a material adverse effect on the Company's business, as determined by Wells Fargo. An event of default for this or any other reason, if not waived, would have a material adverse effect on the Company.

        Several times since entering into the Agreements and prior to April 1, 2012, the Company was not in compliance with certain covenants under the Credit Facility. In connection with each event of noncompliance, Wells Fargo waived the event of default and, on several occasions, the Company amended the Agreements in response to the default and waiver. If the Company had not obtained the waivers and amended the Agreements as described above, the Company would not have been able to draw additional funds under the Credit Facility.

        In addition, the Company has pledged its accounts receivables, inventories, equipment, patents and other assets as collateral for its Agreements, which would be subject to seizure by Wells Fargo if the Company were in default under the Agreements and unable to repay the indebtedness. Wells Fargo also has the option to terminate the Agreements or accelerate the indebtedness during a period of noncompliance. Based on the Company's current forecasts, the Company believes it will maintain compliance with the covenants contained in the amended Agreements for at least the next twelve months. If a covenant violation were to occur, the Company would attempt to negotiate a waiver of compliance from Wells Fargo. On June 7, 2013, the Company entered into an amendment to the Agreements which set the financial covenants for Fiscal 2014. As of March 31, 2013 the Company was in compliance with the covenants contained in the amended Agreements for Fiscal 2013.

        The Company is required to maintain a Wells Fargo collection account for cash receipts on all of its accounts receivable. These amounts are immediately applied to reduce the outstanding amount on the Credit Facility. The floating rate for line of credit advances is the sum of daily three month London Inter—Bank Offer Rate ("LIBOR"), which interest rate shall change whenever daily three month LIBOR changes, plus applicable margin. Based on the revolving nature of the Company's borrowings and payments, the Company classifies all outstanding amounts as current liabilities. The applicable margin varies based on net income and the minimum interest floor is set at $66,000 each calendar quarter. The Company's borrowing rate at March 31, 2013 and March 31, 2012 was 5.4% and 5.5%, respectively.

        The Company incurred $0.1 million in origination fees in connection with a September 2011 amendment to the Agreements that increased borrowing capacity and extended the maturity date of the line of credit. These fees were capitalized and are being amortized to interest expense through September 2014. The Company is also required to pay an annual unused line fee of one-quarter of one percent of the daily average of the maximum line amount and 1.5% interest with respect to each letter of credit issued by Wells Fargo. These amounts, if any, are also recorded as interest expense by the Company. As of March 31, 2013 and March 31, 2012, $13.5 million and $10.4 million in borrowings were outstanding, respectively, under the Credit Facility. As of March 31, 2013, approximately $40,000 was available for additional borrowing. Interest expense related to the Credit Facility during the year ended March 31, 2013 was $0.7 million, which includes $0.1 million in amortization of deferred financing costs.  Interest expense related to the Credit Facility during each of the years ended March 31, 2012 and 2011 was $0.8 million, which includes $0.2 million in amortization of deferred financing costs.

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Commitments and Contingencies
12 Months Ended
Mar. 31, 2013
Commitments and Contingencies
Commitments and Contingencies

12. Commitments and Contingencies

Purchase Commitments

        As of March 31, 2013, the Company had firm commitments to purchase inventories of approximately $31.5 million through Fiscal 2014. Certain inventory delivery dates and related payments are not scheduled; therefore amounts under these firm purchase commitments will be payable upon the receipt of the related inventories.

Lease Commitments

        The Company leases offices and manufacturing facilities under various non-cancelable operating leases expiring at various times through the fiscal year ending March 31, 2018. 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. Rent expense is recognized on a straight-line basis over the term of the lease. The difference between rent expense recorded and the amount paid is credited or charged to deferred rent, which is included in other long-term liabilities in the accompanying consolidated balance sheets. The balance of deferred rent was approximately $0.1 million and $0.3 million as of March 31, 2013 and 2012, respectively. Rent expense was approximately $2.1 million, $2.1 million and $2.4 million for the years ended March 31, 2013, 2012 and 2011, respectively.

        On August 27, 2009, the Company entered into a second amendment (the "Chatsworth Amendment") to the Lease Agreement, dated December 1, 1999, for leased premises used by the Company for primary office space, engineering testing and manufacturing located in Chatsworth, California. The Chatsworth Amendment extends the term of the Lease Agreement from May 31, 2010 to July 31, 2014. The Company has two five-year options to extend the term of the Lease Agreement beyond July 31, 2014. The Chatsworth Amendment also sets the monthly base rent payable by the Company under the Lease Agreement at $67,000 per month, with an annual increase in the base rent on August 1, 2010, August 1, 2011, August 1, 2012 and August 1, 2013. On such dates, the base rent shall increase by 5% of the base rent in effect at the time of the increase or a percentage equivalent to the increase in the Consumer Price Index, whichever is greater.

        On March 28, 2013, the Company and Prologis, L.P., formerly known as AMB Property, L.P., entered into a third amendment (the "Van Nuys Amendment") to the Lease Agreement dated September 25, 2000, for leased premises used by the Company for engineering testing and manufacturing located in Van Nuys, California. The Van Nuys Amendment extends the term of the Lease Agreement from December 31, 2012 to December 31, 2017. The Amendment also adjusts the monthly base rent payable by the Company under the Lease Agreement to the following: $60,000 per month from January 1, 2013 through June 30, 2015 and $65,000 per month from July 1, 2015 through December 31, 2017.

        At March 31, 2013, the Company's minimum commitments under non-cancelable operating leases were as follows (in thousands):

Year Ending March 31,
  Operating
Leases
 

2014

  $ 1,881  

2015

    1,136  

2016

    780  

2017

    779  

2018

    584  
       

Total minimum lease payments

  $ 5,160  
       

Other Commitments

        During the three months ended December 31, 2012, the Company incurred $0.5 million in connection with the renewal of insurance contracts, which was financed by a note payable. The note bears interest at rate of 2.2% per annum with principal and interest paid monthly through August 2013. The outstanding balance of the note payable as of March 31, 2013 was approximately $0.2 million.

        During the three months ended December 31, 2011, the Company incurred $0.6 million in connection with the renewal of insurance contracts, which was financed by a note payable. The note bears interest at rate of 2.2% per annum with principal and interest paid monthly through October 2012. The outstanding balance of the note payable as of March 31, 2012 was approximately $0.3 million. As of March 31, 2013 this note payable was paid in full.

        On February 1, 2010, the Company and CPS also entered into an agreement pursuant to which the Company agreed to purchase 125 kW waste heat recovery generator systems from CPS, which agreement was subsequently assigned to General Electric Company (GE) in October of 2010. In exchange for certain minimum purchase requirements of $18.7 million through December 2015, the Company has exclusive rights to sell the zero-emission waste heat recovery generator for all microturbine applications and for applications 500 kW or lower where the source of heat is the exhaust of a reciprocating engine used in a landfill application. As of March 31, 2013, the Company was not in compliance with the minimum purchase requirements in the agreement. Loss of exclusivity is dependent upon receiving proper notification from GE as set forth in the agreement.

        In September 2010, the Company was awarded a grant from the DOE for the research, development and testing of a more efficient microturbine Combined Heat and Power (CHP) system. Part of the improved efficiency will come from an improved microturbine design, with a projected electrical efficiency of 42% and power output of 370 kW. The project is estimated to cost approximately $17.4 million. The DOE will contribute $5.0 million toward the project, and the Company will incur approximately $12.4 million in research and development expense. During Fiscal 2012, this project was extended until September 2013. The Company billed the DOE under the contract for this project a cumulative amount of $2.4 million through March 31, 2013.

        In November 2009, the Company was awarded a grant from the DOE for the research, development and testing of a more fuel flexible microturbine capable of operating on a wider variety of biofuels. The project is estimated to cost approximately $3.8 million. The DOE will contribute $2.5 million under the program, and the Company will incur approximately $1.3 million in research and development expense. During Fiscal 2012, this project was extended until September 2013. The Company billed the DOE under this contract a cumulative amount of $1.3 million through March 31, 2013.

        Agreements the Company has with some of its distributors require that if the Company renders parts obsolete in inventories they 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, 2013, no significant inventories were held at distributors.

Legal Matters

        From time to time, the Company may become subject to certain legal proceedings, claims and litigation arising in the ordinary course of business. In the opinion of management, the Company is not currently a party to any material legal proceedings, nor is the Company aware of any pending or threatened litigation that would have a material effect on the Company's operating results, cash flows, financial position or results of operations should such litigation be resolved unfavorably.

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Employee Benefit Plans
12 Months Ended
Mar. 31, 2013
Employee Benefit Plans
Employee Benefit Plans

13. Employee Benefit Plans

        The Company maintains a defined contribution 401(k) profit-sharing plan in which all employees are eligible to participate. Employees may contribute up to Internal Revenue Service annual limits or, if less, 90% of their eligible compensation. Employees are fully vested in their contributions to the plan. The plan also provides for both Company matching and discretionary contributions, which are determined by the Board of Directors. The Company began matching 50 cents on the dollar up to 4% of the employee's contributions in October 2006. Prior to that date, no Company contributions had been made since the inception of the plan. The Company's match vests 25% a year over four years starting from the employee's hire date. The expense recorded by the Company for the years ended March 31, 2013, 2012 and 2011 was approximately $0.2 million, $0.3 million and $0.2 million, respectively.

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Other Current Liabilities
12 Months Ended
Mar. 31, 2013
Other Current Liabilities
Other Current Liabilities

14. Other Current Liabilities

        In September 2007, the Company entered into a Development and License Agreement (the "Development Agreement") with UTC Power Corporation ("UTCP"), a division of United Technologies Corporation. The Development Agreement engaged UTCP to fund and support the Company's continued development and commercialization of the Company's 200 kilowatt ("C200") microturbine. Pursuant to the terms of the Development Agreement, UTCP contributed $12.0 million in cash and approximately $800,000 of in-kind services toward the Company's efforts to develop the C200. In return, the Company agreed to pay to UTCP an ongoing royalty of 10% of the sales price of the C200 sold to customers other than UTCP until the aggregate of UTCP's cash and in-kind services investment had been recovered and, thereafter, the royalty would be reduced to 5% of the sales price. In August 2009, the Development Agreement was assigned by UTCP to Carrier Corporation ("Carrier").

        On January 14, 2011, the Company entered into an amendment to the Development Agreement with Carrier. The amendment amends the royalty payment from a certain percentage of the sales prices to a predetermined fixed rate for each microturbine system covered by the amendment. Carrier earned $4.3 million, $3.2 million and $1.9 million in royalties for C200 and C1000 Series system sales during the year ended March 31, 2013, 2012 and 2011, respectively. Earned royalties of $1.4 million and $1.0 million were unpaid as of March 31, 2013 and March 31, 2012, respectively, and are included in accrued expenses in the accompanying balance sheets.

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Acquisition
12 Months Ended
Mar. 31, 2013
Acquisition
Acquisition

15. Acquisition

        On February 1, 2010 (the "Closing Date"), the Company acquired the microturbine generator product line (the "MPL") from CPS to expand the Company's microturbine product line and to gain relationships with distributors to supply the Company's products. The Company entered into an Asset Purchase Agreement ("APA"), subject to an existing license retained by CPS, to purchase all of the rights and assets related to the manufacture and sale of the MPL, including intellectual property, design, tooling, drawings, patents, know-how, distribution and supply agreements.

        The table below summarizes the consideration paid for the rights and assets of the MPL on the Closing Date. No voting interests in CPS were acquired in this transaction (in thousands).

Description
  Purchase
Price
 

Stock issued at Closing Date

  $ 1,798  

Fair value of consideration at Second Funding Date, stock or cash

    2,990  
       

Total purchase consideration

  $ 4,788  
       

        Pursuant to the APA, the Company issued to CPS 1,550,387 shares of common stock at the Closing Date and agreed to pay additional consideration of $3.1 million on July 30, 2010 (the "Second Funding Date"). The additional consideration was to be paid, at the Company's discretion, in shares of the Company's common stock or cash. The Company elected to satisfy the amount due on the Second Funding Date with common stock and issued 3,131,313 shares to CPS. This second payment constituted a financial instrument which was accounted for as a liability at fair value at the acquisition date in accordance with ASC 480, "Distinguishing Liabilities from Equity." This liability was recorded at fair value on the Closing Date and was accreted to its full settlement value at the Second Funding Date by recording the increase to interest expense.

        The Company determined that the CPS transaction constitutes a business combination in accordance with ASC 805, "Business Combinations." The purchase price was allocated to the tangible and intangible assets acquired based on their estimated fair values on the acquisition date. The Company incurred $0.1 million of costs during Fiscal 2010 related to the acquisition of the MPL. These costs are recorded in selling, general and administrative expenses in the accompanying statement of operations. In October 2010, General Electric Company purchased certain assets of CPS, including the 125 kW waste heat recovery generator systems product line.

        The following table presents the purchase price allocation (in thousands):

Description
  Purchase
Price
 

Manufacturing equipment

  $ 292  

Intangible Assets:

       

Technology

    2,240  

Parts/service customer relationships

    1,080  

TA100 customer relationships

    617  

Backlog

    490  

Trade name

    69  
       

Total purchase consideration

  $ 4,788  
       

        The financial results of the MPL have been included in the Company's Statements of Operations commencing on the Closing Date. Total revenue and net loss generated from the MPL subsequent to the Closing Date were $1.3 million and $32,500, respectively. The following unaudited pro forma financial information presents the results as if the MPL acquisition had occurred at the beginning of Fiscal 2010 (in thousands):

 
  Fiscal Year
Ended
March 31, 2010
 

Revenue

  $ 64,279  

Net Loss

    (69,977 )

Supply Agreement

        On the Closing Date, the Company and CPS entered into a manufacturing supply agreement under which CPS would continue to manufacture the TA100 microturbines for the Company through March 31, 2011 (the "Transition Period"). During the Transition Period, CPS leased from the Company on a royalty-free basis the intellectual property required to manufacture TA100 microturbines.

        On April 28, 2011, the Company purchased $2.3 million of the remaining TA100 microturbine inventory that was not consumed as part of the TA100 manufacturing process and acquired the manufacturing equipment.

Original Equipment Manufacturer ("OEM") Agreement

        On the Closing Date, the Company also entered into an agreement with CPS to purchase 125 kW waste heat recovery generator systems from CPS. In exchange for certain minimum purchase requirements through December 2015, the Company has exclusive rights to sell the zero-emission waste heat recovery generator for all microturbine applications and for applications 500 kW or lower where the source of heat is the exhaust of a reciprocating engine used in a landfill application. The Company must meet specified annual sales targets in order to maintain the exclusive rights to sell the waste heat recovery generators. The OEM agreement is being treated as a separate transaction from the MPL acquisition. As of March 31, 2013, the Company was not in compliance with the minimum purchase requirements in the agreement. Loss of exclusivity is dependent upon receiving proper notification from GE as set forth in the agreement.

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SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS
12 Months Ended
Mar. 31, 2013
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS

SCHEDULE II

CAPSTONE TURBINE CORPORATION

VALUATION AND QUALIFYING ACCOUNTS

FOR THE YEARS ENDED MARCH 31, 2013, 2012 and 2011

(In thousands)

Allowance for Doubtful Accounts:
   
 

Balance, March 31, 2010

  $ 121  

Additions charged to costs and expenses

    359  

Deductions

    (268 )
       

Balance, March 31, 2011

  $ 212  

Additions charged to costs and expenses

    2,256  

Deductions

    (240 )
       

Balance, March 31, 2012

  $ 2,228  

Additions charged to costs and expenses

    276  

Deductions

    (362 )
       

Balance, March 31, 2013

  $ 2,142  
       
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Summary of Significant Accounting Policies (Policies)
12 Months Ended
Mar. 31, 2013
Summary of Significant Accounting Policies
Cash Equivalents
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.
Restricted Cash

Restricted Cash    As of March 31, 2011, the Company had maintained $1.3 million as additional security for its line of credit with Wells Fargo. During Fiscal 2012, Wells Fargo released $1.3 million of the restricted cash.

        See Note 11—Revolving Credit Facility, for discussion of the line of credit with Wells Fargo.

Fair Value of Financial Instruments
Fair Value of Financial Instruments    The carrying value of certain financial instruments, including cash equivalents, accounts receivable, accounts payable, revolving credit facility and notes payable approximate fair market value based on their short-term nature. See Note 10—Fair Value Measurements, for disclosure regarding the fair value of other financial instruments.
Accounts Receivable
Accounts Receivable    The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of customers to make required payments.
Inventories
Inventories    The Company values inventories at first in first out ("FIFO") basis and lower of cost or market. 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    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 with the exception of the backlog of 100 kW microturbines ("TA100") acquired from Calnetix Power Solutions, Inc. ("CPS"). Purchased backlog is amortized based on unit sales and presented as a component of cost of goods sold.
Long-Lived Assets
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, 2013 and determined that no impairment was necessary. Intangible assets include a manufacturing license, trade name, technology, backlog and customer relationships. See Note 5—Intangible Assets.
Deferred Revenue
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

Revenue    The Company's revenue consists of sales of products, parts, accessories and service, which includes a comprehensive Factory Protection Plan ("FPP"), net of discounts. Capstone's distributors purchase products, parts and FPPs for sale to end users and are also required to provide a variety of additional services, including application engineering, installation, commissioning and post-commissioning repair and maintenance service. The Company's standard terms of sales to distributors and direct end-users include transfer of title, care, custody and control at the point of shipment, payment terms ranging from full payment in advance of shipment to payment in 90 days, no right of return or exchange, and no post-shipment performance obligations by Capstone except for warranties provided on the products and parts sold.

        Revenue from the sale of products, parts and accessories is generally recognized and earned when all of the following criteria are satisfied: (a) persuasive evidence of a sales arrangement exists; (b) price is fixed or determinable; (c) collectability is reasonably assured; and (d) delivery has occurred. Delivery generally occurs when the title and the risks and rewards of ownership have substantially transferred to the customer. Service performed by the Company has consisted primarily of time and materials based contracts. The time and materials contracts are usually related to out-of-warranty units. Service revenue derived from time and materials contracts is recognized as the service is performed. The Company also provides maintenance service contracts to customers of its existing installed base. The maintenance service contracts are agreements to perform certain services to maintain a product for a specified period of time. Service revenue derived from maintenance service contracts is recognized on a straight-line basis over the contract period.

        The Company occasionally enters into agreements that contain multiple elements, such as sale of equipment, installation, engineering and/or service. The Company allocates the total contract value among each element based on a selling price hierarchy as follows, where the selling price is based on (i) vendor specific objective evidence ("VSOE"), (ii) third party evidence ("TPE") or (iii) best estimate of selling price if VSOE or TPE are not available. Revenue is the amount related to each element or recognized in accordance with the revenue recognition policies discussed above.

Warranty
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 eighteen months. Factors that affect the Company's warranty obligation include product failure rates, anticipated hours of product operations and costs of repair or replacement in correcting product failures. These factors are estimates that may change based on new information that becomes available each period. Similarly, the Company also accrues the estimated costs to address reliability repairs on products no longer in warranty when, in the Company's judgment, and in accordance with a specific plan developed by the Company, it is prudent to provide such repairs. The Company assesses the adequacy of recorded warranty liabilities quarterly and makes adjustments to the liability as necessary. When the Company has sufficient evidence that product changes are altering the historical failure occurrence rates, the impact of such changes is then taken into account in estimating future warranty liabilities.
Research and Development ("R&D")
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. Total offsets to R&D expenses amounted to $1.7 million, $0.8 million and $0.9 million for the years ended March 31, 2013, 2012 and 2011, respectively.
Income Taxes
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.
Contingencies
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

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, 2013, the majority of our cash balances were held at financial institutions located in California, in accounts that are insured by the Federal Deposit Insurance Corporation. Uninsured balances aggregate to approximately $38.6 million as of March 31, 2013. 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 Horizon Power Systems ("Horizon"), one of the Company's domestic distributors, accounted for 27%, 19% and 18% of revenue for the years ended March 31, 2013, 2012 and 2011, respectively. Sales to BPC Engineering ("BPC"), one of the Company's Russian distributors, accounted for 11%, 26% and 23% of revenue for the years ended March 31, 2013, 2012 and 2011, respectively. Additionally, BPC and Regatta Solutions, Inc., one of the Company's domestic distributors, accounted for 35% and 11%, respectively, of net accounts receivable as of March 31, 2013. BPC accounted for 44% of net accounts receivable as of March 31, 2012.

        Accounts receivable, net as of March 31, 2013 and 2012 includes $0.3 million and $0.1 million of other receivables, respectively from the U.S. Department of Energy ("DOE") under grants awarded in 2009 and 2010.

        The Company recorded bad debt expense of $0.3 million, $2.3 million and $0.2 million for the years ended March 31, 2013, 2012 and 2011, respectively.

        Certain components of the Company's products are available from a limited number of suppliers. An interruption in supply could cause a delay in manufacturing, which would affect operating results adversely.

Estimates and Assumptions
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 doubtful accounts, 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
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 at March 31, 2013, 2012 and 2011 were 11.8 million, 10.0 million and 10.1 million, respectively. Outstanding restricted stock units at March 31, 2013, 2012 and 2011 were 1.5 million, 1.1 million and 1.5 million, respectively. As of March 31, 2013, 2012 and 2011, the number of warrants excluded from diluted net loss per common share computations was approximately 26.5 million, 26.5 million and 21.7 million, respectively.
Stock-Based Compensation
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.
Segment Reporting

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,  
 
  2013   2012   2011  

United States

  $ 57,001   $ 41,796   $ 25,630  

Mexico

    22,581     7,798     5,416  

All other North America

    4,370     116     808  
               

Total North America

    83,952     49,710     31,854  

Russia

   
13,827
   
29,722
   
20,655
 

All other Europe

    12,036     17,452     15,375  
               

Total Europe

    25,863     47,174     36,030  

Asia

   
8,473
   
5,692
   
7,811
 

Australia

    5,461     2,749     3,754  

All other

    3,808     4,046     2,441  
               

Total Revenue

  $ 127,557   $ 109,371   $ 81,890  
               

        The following table summarizes the Company's revenue by product (in thousands):

 
  Year Ended March 31,  
 
  2013   2012   2011  

C30

  $ 6,756   $ 4,426   $ 6,043  

C65

    22,899     28,680     23,377  

TA100

    1,485     681     5,121  

C200

    18,099     7,361     5,289  

C600

    12,384     7,567     2,172  

C800

    5,324     8,728     4,362  

C1000

    35,571     32,475     18,619  

Waste heat recovery generator

            627  

Unit upgrades

    129         704  
               

Total from Microturbine Products

    102,647     89,918     66,314  

Accessories, Parts and Service

    24,910     19,453     15,576  
               

Total

  $ 127,557   $ 109,371   $ 81,890  
               

        Substantially all of the Company's operating assets are in the United States.

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Summary of Significant Accounting Policies (Tables)
12 Months Ended
Mar. 31, 2013
Summary of Significant Accounting Policies
Schedule of geographic revenue information based on the primary operating location of the Company's customers

Following is the geographic revenue information based on the primary operating location of the Company's customers (in thousands):

 
  Year Ended March 31,  
 
  2013   2012   2011  

United States

  $ 57,001   $ 41,796   $ 25,630  

Mexico

    22,581     7,798     5,416  

All other North America

    4,370     116     808  
               

Total North America

    83,952     49,710     31,854  

Russia

   
13,827
   
29,722
   
20,655
 

All other Europe

    12,036     17,452     15,375  
               

Total Europe

    25,863     47,174     36,030  

Asia

   
8,473
   
5,692
   
7,811
 

Australia

    5,461     2,749     3,754  

All other

    3,808     4,046     2,441  
               

Total Revenue

  $ 127,557   $ 109,371   $ 81,890  
               
Summary of Company's revenue by product

The following table summarizes the Company's revenue by product (in thousands):

 
  Year Ended March 31,  
 
  2013   2012   2011  

C30

  $ 6,756   $ 4,426   $ 6,043  

C65

    22,899     28,680     23,377  

TA100

    1,485     681     5,121  

C200

    18,099     7,361     5,289  

C600

    12,384     7,567     2,172  

C800

    5,324     8,728     4,362  

C1000

    35,571     32,475     18,619  

Waste heat recovery generator

            627  

Unit upgrades

    129         704  
               

Total from Microturbine Products

    102,647     89,918     66,314  

Accessories, Parts and Service

    24,910     19,453     15,576  
               

Total

  $ 127,557   $ 109,371   $ 81,890  
               
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Inventories (Tables)
12 Months Ended
Mar. 31, 2013
Inventories
Summary of inventory

Inventories are valued on a FIFO basis and lower of cost or market and consisted of the following as of March 31, 2013 and 2012 (in thousands):

 
  2013   2012  

Raw materials

  $ 20,198   $ 18,476  

Work in process

        151  

Finished goods

    1,567     1,567  
           

Total

    21,765     20,194  

Less non-current portion

    (3,252 )   (1,313 )
           

Current portion

  $ 18,513   $ 18,881  
           
Schedule of expected usage for non-current inventory

The Company expects to use the non-current portion of the inventories on hand as of March 31, 2013 over the periods presented in the following table (in thousands):

Expected Period of Use
  Non-current
Inventory Balance
Expected to be Used
 

13 to 24 months

  $ 2,401  

25 to 36 months

    567  

37 to 48 months

    284  
       

Total

  $ 3,252  
       
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Property, Plant and Equipment (Tables)
12 Months Ended
Mar. 31, 2013
Property, Plant and Equipment
Schedule of property, plant and equipment

Property, plant and equipment as of March 31, 2013 and 2012 consisted of the following (in thousands):

 
  2013   2012   Estimated
Useful Life

Machinery, rental equipment, equipment, automobiles and furniture

  $ 20,649   $ 20,506   2 - 10 years

Leasehold improvements

    9,708     9,696   10 years

Molds and tooling

    4,933     4,880   2 - 5 years
             

 

    35,290     35,082    

Less, accumulated depreciation

    (31,747 )   (30,249 )  
             

Total property, plant and equipment, net

  $ 3,543   $ 4,833    
             
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Intangible Assets (Tables)
12 Months Ended
Mar. 31, 2013
Intangible Assets
Schedule of intangible assets

Intangible assets consisted of the following (in thousands):

 
  March 31, 2013  
 
  Weighted
Average
Amortization
Period
  Intangible
Assets,
Gross
  Accumulated
Amortization
  Intangible
Assets,
Net
 

Manufacturing license

  17 years   $ 3,700   $ 3,487   $ 213  

Technology

  10 years     2,240     709     1,531  

Parts and service customer relationships

  5 years     1,080     684     396  

TA100 customer relationships

  2 years     617     617      

Backlog

  Various     490     317     173  

Trade name

  1.2 years     69     69      
                   

Total

      $ 8,196   $ 5,883   $ 2,313  
                   

 

 
  March 31, 2012  
 
  Weighted
Average
Amortization
Period
  Intangible
Assets,
Gross
  Accumulated
Amortization
  Intangible
Assets,
Net
 

Manufacturing license

  17 years   $ 3,700   $ 3,437   $ 263  

Technology

  10 years     2,240     485     1,755  

Parts and service customer relationships

  5 years     1,080     468     612  

TA100 customer relationships

  2 years     617     617      

Backlog

  Various     490     309     181  

Trade name

  1.2 years     69     69      
                   

Total

      $ 8,196   $ 5,385   $ 2,811  
                   
Schedule of expected future amortization expense of intangible assets

Expected future amortization expense of intangible assets as of March 31, 2013 is as follows (in thousands):

Year Ending March 31,
  Amortization
Expense
 

2014

  $ 582  

2015

    532  

2016

    273  

2017

    273  

2018

    242  

Thereafter

    411  
       

Total expected future amortization

  $ 2,313  
       
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Accrued Warranty Reserve (Tables)
12 Months Ended
Mar. 31, 2013
Accrued Warranty Reserve
Schedule of changes in accrued warranty reserve

Changes in the accrued warranty reserve are as follows as of March 31, 2013, 2012 and 2011 (in thousands):

 
  2013   2012   2011  

Balance, beginning of the period

  $ 1,494   $ 1,081   $ 1,036  

Standard warranty provision

    3,874     3,790     2,015  

Changes for accrual related to reliability repair programs

    1,255     437     74  

Deductions for warranty claims

    (4,324 )   (3,814 )   (2,044 )
               

Balance, end of the period

  $ 2,299   $ 1,494   $ 1,081  
               
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Deferred Revenue (Tables)
12 Months Ended
Mar. 31, 2013
Deferred Revenue
Schedule of changes in deferred revenue

Changes in deferred revenue are as follows as of March 31, 2013 (in thousands):

 
  2013  

FPP Balance, beginning of the period

  $ 1,167  

FPP Billings

    5,884  

FPP Revenue recognized

    (5,639 )
       

Balance attributed to FPP contracts

    1,412  

Deposits

    1,677  
       

Deferred revenue balance, end of the period

  $ 3,089  
       
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Income Taxes (Tables)
12 Months Ended
Mar. 31, 2013
Income Taxes
Schedule of reconciliation of income tax (benefit) expense to the federal statutory rate

A reconciliation of income tax (benefit) expense to the federal statutory rate follows (in thousands):

 
  Year Ended March 31,  
 
  2013   2012   2011  

Federal income tax at the statutory rate

  $ (7,436 ) $ (6,317 ) $ (12,997 )

State taxes, net of federal effect

    (661 )   (727 )   (1,390 )

Foreign taxes

    675     313     461  

R&D tax credit

    (1,157 )   (455 )   (367 )

Impact of state rate change

    838     (693 )   1,541  

Warrant liability

    (299 )   (5,301 )   9,981  

Expiring NOL

        9,765     6,278  

Valuation allowance

    (1,877 )   3,423     (4,343 )

Excess tax benefit—stock compensation

    10,383          

Other

    228     178     1,076  
               

Income tax expense (benefit)

  $ 694   $ 186   $ 240  
               
Schedule of the Company's deferred tax assets and liabilities

The Company's deferred tax assets and liabilities consisted of the following at March 31, 2013 and 2012 (in thousands):

 
  2013   2012  

Deferred tax assets:

             

Inventories

  $ 1,754   $ 1,492  

Warranty reserve

    866     597  

Deferred revenue

    532     466  

Net operating loss ("NOL") carryforwards

    211,724     215,545  

Tax credit carryforwards

    18,295     17,013  

Depreciation, amortization and impairment loss

    3,997     4,252  

Other

    5,498     5,434  
           

Deferred tax assets

    242,666     244,799  

Valuation allowance for deferred tax assets

    (232,555 )   (234,432 )
           

Deferred tax assets, net of valuation allowance

    10,111     10,367  

Deferred tax liabilities:

             

Federal benefit of state taxes

    (10,111 )   (10,367 )
           

Net deferred tax assets

  $   $  
           
Schedule of the Company's NOL and tax credit carry forwards for federal and state income tax purposes

The Company's NOL and tax credit carryforwards for federal and state income tax purposes at March 31, 2013 were as follows (in thousands):

 
  Amount   Expiration
Period

Federal NOL

  $ 592,005   2018 - 2033

State NOL

  $ 283,866   2013 - 2033

Federal tax credit carryforwards

  $ 9,577   2018 - 2033

State tax credit carryforwards

  $ 8,718   Indefinite
Schedule of reconciliation of the beginning and ending amount of total gross unrecognized tax benefits

A reconciliation of the beginning and ending amount of total gross unrecognized tax benefits is as follows (in thousands):

Balance at March 31, 2010

  $ 1,806  

Gross increase related to prior year tax positions

     

Gross increase related to current year tax positions

    167  

Lapse of statute of limitations

     
       

Balance at March 31, 2011

  $ 1,973  

Gross increase related to prior year tax positions

     

Gross increase related to current year tax positions

    175  

Lapse of statute of limitations

     
       

Balance at March 31, 2012

  $ 2,148  

Gross decrease related to prior year tax positions

    (100 )

Gross increase related to prior year tax positions

    222  

Gross increase related to current year tax positions

    148  

Lapse of statute of limitations

     
       

Balance at March 31, 2013

  $ 2,418  
       
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Stockholders' Equity (Tables)
12 Months Ended
Mar. 31, 2013
Stockholders' Equity
Summary of stock-based compensation expense by statement of operations line item

The following table summarizes, by statement of operations line item, stock-based compensation expense for the years ended March 31, 2013, 2012 and 2011 (in thousands):

 
  Fiscal Year Ended March 31,  
 
  2013   2012   2011  

Cost of goods sold

  $ 92   $ 136   $ 209  

Research and development

    319     324     211  

Selling, general and administrative

    1,190     1,192     1,998  
               

Stock-based compensation expense

  $ 1,601   $ 1,652   $ 2,418  
               
Schedule of weighted-average assumptions used to calculate the estimated fair value of each stock option

 

 

 
  Shares   Weighted-
Average
Exercise Price
  Weighted-
Average
Remaining
Contractual
Term
  Aggregate
Intrinsic
Value
 
 
   
   
  (in years)
   
 

Options outstanding at March 31, 2012

    10,039,651   $ 1.41              

Granted

    1,958,330   $ 1.01              

Exercised

                     

Forfeited, cancelled or expired

    (206,216 ) $ 2.16              
                       

Options outstanding at March 31, 2013

    11,791,765   $ 1.33     5.6   $ 157,050  

Options fully vested at March 31, 2013 and those expected to vest beyond March 31, 2013

    11,560,603   $ 1.34     5.5   $ 157,048  

Options exercisable at March 31, 2013

    9,024,229   $ 1.39     4.6   $ 155,696  
                   
Summary of stock option activity

 

 

 
  Fiscal Year Ended
March 31,
 
 
  2013   2012   2011  

Risk-free interest rates

    0.8 %   1.9 %   3.1 %

Expected lives (in years)

    5.7     5.0     5.0  

Dividend yield

    %   %   %

Expected volatility

    79.8 %   89.0 %   97.9 %

Weighted average grant date fair value of options granted during the period

  $ 0.67   $ 1.19   $ 1.02  
Summary of restricted stock unit activity

 

 

Restricted Stock Units
  Shares   Weighted
Average Grant
Date Fair
Value
 

Nonvested restricted stock units outstanding at March 31, 2012

    1,143,262   $ 1.20  

Granted

    919,414   $ 1.00  

Vested and issued

    (469,911 ) $ 1.15  

Forfeited

    (125,669 ) $ 1.05  
             

Nonvested restricted stock units outstanding at March 31, 2013

    1,467,096   $ 1.10  
           

Restricted stock units expected to vest beyond March 31, 2013

    1,358,386   $ 1.10  
           
Schedule of warrant activity

 

 

 
  March
2012
Shares
  September
2009
Shares
  May
2009
Shares
  September
2008
Shares
  January
2007
Shares
 

Balance, March 31, 2010

        5,780,347     3,612,717     7,686,795     17,003,898  

Issuance of warrants

                48,042      

Warrants exercised

            (3,612,717 )   (392,190 )   (8,468,324 )
                       

Balance, March 31, 2011

        5,780,347         7,342,647     8,535,574  

Issuance of warrants

    22,550,000                  

Warrants exercised

        (5,780,347 )       (3,579,239 )   (7,298,234 )

Anti-dilution provision

                146,626      

Warrants expired

                    (1,237,340 )
                       

Balance, March 31, 2012

    22,550,000             3,910,034      

Anti-dilution provision

                51,437        
                       

Balance, March 31, 2013

    22,550,000             3,961,471      
                       
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Fair Value Measurements (Tables)
12 Months Ended
Mar. 31, 2013
Fair Value Measurements
Schedule of assets and liabilities measured at fair value on a recurring basis

The table below presents our assets and liabilities that are measured at fair value on a recurring basis during Fiscal 2013 and are categorized using the fair value hierarchy (in thousands):

 
  Fair Value Measurements at March 31, 2013  
 
  Total   Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
  Significant Other
Observable
Inputs
(Level 2)
  Significant
Unobservable
Inputs
(Level 3)
 

Cash equivalents

  $ 27,742   $ 27,742   $   $  

Warrant liability

  $ (10 ) $   $   $ (10 )

        

        The table below presents our assets and liabilities that are measured at fair value on a recurring basis during Fiscal 2012 and are categorized using the fair value hierarchy (in thousands):

 
  Fair Value Measurements at March 31, 2012  
 
  Total   Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
  Quoted Prices in
Active Markets for
Identical Assets
(Level 2)
  Significant
Unobservable
Inputs
(Level 3)
 

Cash equivalents

  $ 39,790   $ 39,790   $   $  

Warrant liability

  $ (791 ) $   $   $ (791 )
Schedule of carrying values and estimated fair values of obligations under the credit facility

The carrying values and estimated fair values of these obligations are as follows (in thousands):

 
  As of
March 31, 2013
  As of
March 31, 2012
 
 
  Carrying
Value
  Estimated
Fair Value
  Carrying
Value
  Estimated
Fair Value
 

Obligations under the credit facility

  $ 13,476   $ 13,476   $ 10,431   $ 10,431  
Schedule of assumptions used to calculate estimated fair value of warrants

 

 

 
  Fiscal Year Ended
March 31, 2013
  Fiscal Year Ended
March 31, 2012

Risk-free interest rates range

  0.1% to 0.2%   0.0% to 1.5%

Contractual term (in years)

  0.5 years to 1.2 years   0.1 years to 4.9 years

Expected volatility range

  37.2% to 65.8%   60.5% to 84.9%
Schedule of reconciliation of warrant liability measured at fair value using significant inputs (level 3)

The table below provides a reconciliation of the beginning and ending balances for the warrant liability which is measured at fair value using significant unobservable inputs (Level 3) (in thousands):

Warrant liability:

       

Balance as of March 31, 2010

  $ 26,803  

Total realized and unrealized (gains) losses:

       

Expense included in change in fair value of warrant liability

    3,667  

Purchases, issuances and settlements

    (9,698 )
       

Balance as of March 31, 2011

  $ 20,772  

Total realized and unrealized (gains) losses:

       

Income included in change in fair value of warrant liability

    (13,872 )

Purchases, issuances and settlements

    (6,109 )
       

Balance at March 31, 2012

  $ 791  

Total realized and unrealized (gains) losses:

       

Income included in change in fair value of warrant liability

    (781 )
       

Balance at March 31, 2013

  $ 10  
       
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Commitments and Contingencies (Tables)
12 Months Ended
Mar. 31, 2013
Commitments and Contingencies
Schedule of minimum commitments under non-cancelable operating leases

At March 31, 2013, the Company's minimum commitments under non-cancelable operating leases were as follows (in thousands):

Year Ending March 31,
  Operating
Leases
 

2014

  $ 1,881  

2015

    1,136  

2016

    780  

2017

    779  

2018

    584  
       

Total minimum lease payments

  $ 5,160  
       
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Acquisition (Tables)
12 Months Ended
Mar. 31, 2013
Acquisition
Summary of consideration paid

No voting interests in CPS were acquired in this transaction (in thousands).

Description
  Purchase
Price
 

Stock issued at Closing Date

  $ 1,798  

Fair value of consideration at Second Funding Date, stock or cash

    2,990  
       

Total purchase consideration

  $ 4,788  
       
Schedule of purchase price allocation

The following table presents the purchase price allocation (in thousands):

Description
  Purchase
Price
 

Manufacturing equipment

  $ 292  

Intangible Assets:

       

Technology

    2,240  

Parts/service customer relationships

    1,080  

TA100 customer relationships

    617  

Backlog

    490  

Trade name

    69  
       

Total purchase consideration

  $ 4,788  
       
Schedule of unaudited pro forma financial information

The following unaudited pro forma financial information presents the results as if the MPL acquisition had occurred at the beginning of Fiscal 2010 (in thousands):

 
  Fiscal Year
Ended
March 31, 2010
 

Revenue

  $ 64,279  

Net Loss

    (69,977 )
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Description of the Company and Basis of Presentation (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2011
Mar. 31, 2010
Description of the Company and Basis of Presentation
Loss from operations $ (21,958) $ (31,737) $ (33,726)
Cash and cash equivalents $ 38,817 $ 49,952 $ 33,456 $ 47,270
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Summary of Significant Accounting Policies (Details) (USD $)
12 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2011
Restricted Cash
Additional security maintained with Wells Fargo for line of credit $ 1,300,000
Restricted cash released by Wells Fargo (1,250,000) 1,250,000
Long-Lived Assets
Impairment 0
Revenue
Term for advance payment from shipment of sales 90 days
Research and Development ("R&D")
Total offsets to R&D expenses 1,700,000 800,000 900,000
Risk Concentrations
Aggregate uninsured balances 38,600,000
Bad debt expense 276,000 2,256,000 231,000
Net Loss Per Common Share
Outstanding stock options (in shares) 11,800,000 10,000,000 10,100,000
Outstanding restricted stock units (in shares) 1,500,000 1,100,000 1,500,000
Number of warrants excluded from diluted net loss per common share computations 26,500,000 26,500,000 21,700,000
Revenue | Customer concentrations | BPC
Risk Concentrations
Concentration percentage 11.00% 26.00% 23.00%
Revenue | Customer concentrations | Horizon
Risk Concentrations
Concentration percentage 27.00% 19.00% 18.00%
Net accounts receivable | Credit concentration | BPC
Risk Concentrations
Concentration percentage 35.00% 44.00%
Net accounts receivable | Credit concentration | Regatta Solutions, Inc.
Risk Concentrations
Concentration percentage 11.00%
CPS
Depreciation and Amortization
Capacity of microturbine (in kW) 100
DOE
Risk Concentrations
Other receivables under grants awarded $ 300,000 $ 100,000
Minimum
Depreciation and Amortization
Estimated Useful Life 2 years
Maximum
Depreciation and Amortization
Estimated Useful Life 10 years
Warranty
Warranty period 18 months
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Summary of Significant Accounting Policies (Details 2) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2011
Geographic revenue information
Total Revenue $ 127,557 $ 109,371 $ 81,890
United States
Geographic revenue information
Total Revenue 57,001 41,796 25,630
Mexico
Geographic revenue information
Total Revenue 22,581 7,798 5,416
All other North America
Geographic revenue information
Total Revenue 4,370 116 808
Total North America
Geographic revenue information
Total Revenue 83,952 49,710 31,854
Russia
Geographic revenue information
Total Revenue 13,827 29,722 20,655
All other Europe
Geographic revenue information
Total Revenue 12,036 17,452 15,375
Total Europe
Geographic revenue information
Total Revenue 25,863 47,174 36,030
Asia
Geographic revenue information
Total Revenue 8,473 5,692 7,811
Australia
Geographic revenue information
Total Revenue 5,461 2,749 3,754
All other
Geographic revenue information
Total Revenue $ 3,808 $ 4,046 $ 2,441
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Summary of Significant Accounting Policies (Details 3) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2011
Revenue by product
Total $ 127,557 $ 109,371 $ 81,890
C30
Revenue by product
Total 6,756 4,426 6,043
C65
Revenue by product
Total 22,899 28,680 23,377
TA100
Revenue by product
Total 1,485 681 5,121
C200
Revenue by product
Total 18,099 7,361 5,289
C600
Revenue by product
Total 12,384 7,567 2,172
C800
Revenue by product
Total 5,324 8,728 4,362
C1000
Revenue by product
Total 35,571 32,475 18,619
Waste heat recovery generator
Revenue by product
Total 627
Unit upgrades
Revenue by product
Total 129 704
Total from Micro turbine Products
Revenue by product
Total 102,647 89,918 66,314
Accessories, Parts and Service
Revenue by product
Total $ 24,910 $ 19,453 $ 15,576
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Inventories (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Inventories
Raw materials $ 20,198 $ 18,476
Work in process 151
Finished goods 1,567 1,567
Total 21,765 20,194
Less non-current portion (3,252) (1,313)
Current portion $ 18,513 $ 18,881
Weighted average age of non-current portion of inventories 1 year 7 months 6 days
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Inventories (Details 2) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2017
Forecast
Mar. 31, 2016
Forecast
Mar. 31, 2015
Forecast
Non-current Inventory Balance Expected to be Used $ 3,252 $ 1,313 $ 284 $ 567 $ 2,401
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Property, Plant and Equipment (Details) (USD $)
12 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2011
Property, Plant and Equipment
Total property, plant and equipment, gross $ 35,290,000 $ 35,082,000
Less, accumulated depreciation (31,747,000) (30,249,000)
Total property, plant and equipment, net 3,543,000 4,833,000
Depreciation expense 2,300,000 2,600,000 2,800,000
Minimum
Property, Plant and Equipment
Estimated Useful Life 2 years
Maximum
Property, Plant and Equipment
Estimated Useful Life 10 years
Machinery, rental equipment, equipment, automobiles and furniture
Property, Plant and Equipment
Total property, plant and equipment, gross 20,649,000 20,506,000
Machinery, rental equipment, equipment, automobiles and furniture | Minimum
Property, Plant and Equipment
Estimated Useful Life 2 years
Machinery, rental equipment, equipment, automobiles and furniture | Maximum
Property, Plant and Equipment
Estimated Useful Life 10 years
Leasehold improvements
Property, Plant and Equipment
Total property, plant and equipment, gross 9,708,000 9,696,000
Estimated Useful Life 10 years
Molds and tooling
Property, Plant and Equipment
Total property, plant and equipment, gross $ 4,933,000 $ 4,880,000
Molds and tooling | Minimum
Property, Plant and Equipment
Estimated Useful Life 2 years
Molds and tooling | Maximum
Property, Plant and Equipment
Estimated Useful Life 5 years
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Intangible Assets (Details) (USD $)
12 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2011
Intangible Assets
Intangible Assets, Gross $ 8,196,000 $ 8,196,000
Accumulated Amortization 5,883,000 5,385,000
Intangible assets, net 2,313,000 2,811,000
Amortization expense 500,000 800,000 1,100,000
Expected future amortization expense of intangible assets
2014 582,000
2015 532,000
2016 273,000
2017 273,000
2018 242,000
Thereafter 411,000
Intangible assets, net 2,313,000 2,811,000
Manufacturing license
Intangible Assets
Weighted Average Amortization Period 17 years 17 years
Intangible Assets, Gross 3,700,000 3,700,000
Accumulated Amortization 3,487,000 3,437,000
Intangible assets, net 213,000 263,000
Expected future amortization expense of intangible assets
Intangible assets, net 213,000 263,000
Technology
Intangible Assets
Weighted Average Amortization Period 10 years 10 years
Intangible Assets, Gross 2,240,000 2,240,000
Accumulated Amortization 709,000 485,000
Intangible assets, net 1,531,000 1,755,000
Expected future amortization expense of intangible assets
Intangible assets, net 1,531,000 1,755,000
Parts and service customer relationships
Intangible Assets
Weighted Average Amortization Period 5 years 5 years
Intangible Assets, Gross 1,080,000 1,080,000
Accumulated Amortization 684,000 468,000
Intangible assets, net 396,000 612,000
Expected future amortization expense of intangible assets
Intangible assets, net 396,000 612,000
TA100 customer relationships
Intangible Assets
Weighted Average Amortization Period 2 years 2 years
Intangible Assets, Gross 617,000 617,000
Accumulated Amortization 617,000 617,000
Backlog
Intangible Assets
Intangible Assets, Gross 490,000 490,000
Accumulated Amortization 317,000 309,000
Intangible assets, net 173,000 181,000
Expected future amortization expense of intangible assets
Intangible assets, net 173,000 181,000
Trade name
Intangible Assets
Weighted Average Amortization Period 1 year 2 months 12 days 1 year 2 months 12 days
Intangible Assets, Gross 69,000 69,000
Accumulated Amortization $ 69,000 $ 69,000
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Intangible Assets (Details 2) (Solar, USD $)
12 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2011
Solar
Intangible Assets
Royalties earned $ 76,700 $ 72,800 $ 62,800
Unpaid earned royalties $ 24,600 $ 17,500
Years subject to payment of per-unit royalty fees 17 years
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Accrued Warranty Reserve (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2011
Accrued Warranty Reserve
Balance at the beginning of the period $ 1,494 $ 1,081 $ 1,036
Standard warranty provision 3,874 3,790 2,015
Changes for accrual related to reliability repair programs 1,255 437 74
Deductions for warranty claims (4,324) (3,814) (2,044)
Balance at the end of the period $ 2,299 $ 1,494 $ 1,081
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Deferred Revenue (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2013
FPP agreements
Changes in deferred revenue
FPP Balance, beginning of the period $ 3,089 $ 2,995 $ 1,167
FPP Billings 5,884
FPP Revenue recognized (5,639)
Balance attributed to FPP contracts 1,412
Deposits 1,677
Deferred revenue balance, end of the period $ 3,089 $ 2,995 $ 3,089
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Income Taxes (Details) (USD $)
12 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2011
Current tax expense:
Provision for current income taxes related to foreign taxes $ 700,000
Reconciliation of income tax (benefit) expense to the federal statutory rate
Federal income tax at the statutory rate (7,436,000) (6,317,000) (12,997,000)
State taxes, net of federal effect (661,000) (727,000) (1,390,000)
Foreign taxes 675,000 313,000 461,000
R&D tax credit (1,157,000) (455,000) (367,000)
Impact of state rate change 838,000 (693,000) 1,541,000
Warrant liability (299,000) (5,301,000) 9,981,000
Expiring NOL 9,765,000 6,278,000
Valuation allowance (1,877,000) 3,423,000 (4,343,000)
Excess tax benefit - stock compensation 10,383,000
Other 228,000 178,000 1,076,000
Income tax expense (benefit) 694,000 186,000 240,000
Deferred tax assets:
Inventories 1,754,000 1,492,000
Warranty reserve 866,000 597,000
Deferred revenue 532,000 466,000
Net operating loss (NOL) carry forwards 211,724,000 215,545,000
Tax credit carry forwards 18,295,000 17,013,000
Depreciation, amortization and impairment loss 3,997,000 4,252,000
Other 5,498,000 5,434,000
Deferred tax assets 242,666,000 244,799,000
Valuation allowance for deferred tax assets (232,555,000) (234,432,000)
Deferred tax assets, net of valuation allowance 10,111,000 10,367,000
Deferred tax liabilities:
Federal benefit of state taxes (10,111,000) (10,367,000)
Net deferred tax assets 0
Valuation allowance
Change in valuation allowance $ 1,900,000 $ 3,400,000 $ 4,300,000
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Income Taxes (Details 2) (USD $)
12 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2011
NOL and tax credit carry forwards for federal and state income tax purposes
Period of time from grant date during which a tax benefit may be generated from a premature disposition of option shares exercised 2 years
Period of time from exercise date during which a tax benefit may be generated from a premature disposition of option shares exercised 1 year
Federal and state NOL carryforwards generated by disqualifying dispositions of stock options and exercises of nonqualified stock options $ 27,700,000
Tax benefits associated with the stock options excluded from the provision for income taxes and credited directly to additional paid-in-capital 10,400,000
Other disclosures
Interest or penalties related to unrecognized tax benefits 0 0
Amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate 2,400,000 2,100,000
Reconciliation of the beginning and ending amount of total gross unrecognized tax benefits
Balance at the beginning of the period 2,148,000 1,973,000 1,806,000
Gross decrease related to prior year tax positions (100,000)
Gross increase related to prior year tax positions 222,000
Gross increase related to current year tax positions 148,000 175,000 167,000
Lapse of statute of limitations 0
Balance at the end of the period 2,418,000 2,148,000 1,973,000
Maximum
NOL and tax credit carry forwards for federal and state income tax purposes
Annual limitation amount on utilization of the NOLs and tax credits 57,300,000
Federal
NOL and tax credit carry forwards for federal and state income tax purposes
Deferred tax assets related to research and development credits 9,600,000 9,100,000
NOL 592,005,000
Tax credit carry forwards 9,577,000
State
NOL and tax credit carry forwards for federal and state income tax purposes
Deferred tax assets related to research and development credits 8,700,000 7,900,000
NOL 283,866,000
Tax credit carry forwards $ 8,718,000
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Stockholders' Equity (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2011
Stockholders' equity
Stock-based compensation expense $ 1,601 $ 1,652 $ 2,418
Cost of goods sold
Stockholders' equity
Stock-based compensation expense 92 136 209
Research and development
Stockholders' equity
Stock-based compensation expense 319 324 211
Selling, general and administrative
Stockholders' equity
Stock-based compensation expense $ 1,190 $ 1,192 $ 1,998
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Stockholders' Equity (Details 2)
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2011
Mar. 31, 2013
Stock options
Mar. 31, 2012
Stock options
Mar. 31, 2013
Restricted stock units
Mar. 31, 2012
Restricted stock units
Sep. 30, 2012
Restricted stock units
Senior vice president of customer service
Mar. 31, 2013
1993 Incentive Stock Plan and 2000 Equity Incentive Plan
Mar. 31, 2013
1993 Plan
Mar. 31, 2013
2000 Plan
Mar. 31, 2013
Non-qualified stock options
Mar. 31, 2013
Non-qualified stock options
Non-qualified stock options issued prior to Fiscal 2008
Sep. 30, 2012
Non-qualified stock options
Stock options
Mar. 31, 2012
Non-qualified stock options
Stock options
Mar. 31, 2013
Non-qualified stock options
Stock options
President and chief executive officer
Mar. 31, 2013
Non-qualified stock options
Stock options
Executive vice president of sales and marketing
Mar. 31, 2013
Non-qualified stock options
Stock options
Senior vice president of program management
Mar. 31, 2013
Non-qualified stock options
Stock options
Senior vice president of human resources
Mar. 31, 2013
Non-qualified stock options
Stock options
Senior vice president of customer service
Stockholders' equity
Number of shares of common stock reserved for issuance 18,980,000 7,800,000 11,180,000
Number of shares available for future grant 7,059,019
Options outstanding (in shares) 11,800,000 10,000,000 10,100,000 11,791,765 10,039,651 3,550,000
Options granted (in shares) 1,958,330 3,050,000 250,000 250,000 2,000,000 850,000 250,000 200,000 250,000
Restricted stock units outstanding (in shares) 1,500,000 1,100,000 1,500,000 1,467,096 1,143,262 62,500
Portion vesting one year after the issuance date (as a percent) 25.00%
Portion vesting on first day of each month after one year from the issuance date (as a percent) 2.08%
Vesting period of awards after issuance date 1 year
Vesting period after one year of grant 48 months
Vesting period 4 years
Contractual term 10 years
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Stockholders' Equity (Details 3) (USD $)
12 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2011
Shares
Outstanding at the beginning of the period (in shares) 10,000,000 10,100,000
Outstanding at the end of the period (in shares) 11,800,000 10,000,000 10,100,000
Additional disclosure
Stock-based compensation expense $ 1,601,000 $ 1,652,000 $ 2,418,000
Stock options
Shares
Outstanding at the beginning of the period (in shares) 10,039,651
Granted (in shares) 1,958,330
Exercised (in shares) 0
Forfeited, cancelled or expired (in shares) (206,216)
Outstanding at the end of the period (in shares) 11,791,765 10,039,651
Vested and expected to vest (in shares) 11,560,603
Options exercisable 9,024,229
Weighted Average Exercise Price
Outstanding at the beginning of the period (in dollars per share) $ 1.41
Granted (in dollars per share) $ 1.01
Forfeited, cancelled or expired (in dollars per share) $ 2.16
Outstanding at the end of the period (in dollars per share) $ 1.33 $ 1.41
Vested and expected to vest (in dollars per share) $ 1.34
Exercisable (in dollars per share) $ 1.39
Weighted Average Remaining Contractual Term (in years)
Outstanding at the end of the period 5 years 7 months 6 days
Vested and expected to vest 5 years 6 months
Exercisable 4 years 7 months 6 days
Aggregate Intrinsic Value
Outstanding at the end of the period 157,050
Vested or expected to vest 157,048
Exercisable 155,696
Additional disclosure
Weighted average grant date fair value of options exercised during the period (in dollars per share) $ 0.99 $ 1.05
Stock-based compensation expense 900,000 900,000 1,500,000
Total intrinsic value of option exercises during the period 600,000 35,000
Unrecognized compensation cost $ 1,700,000
Weighted average period for recognizing compensation cost 2 years 9 months 18 days
Weighted-average assumptions used to calculate estimated fair value of each stock option
Risk-free interest rates (as a percent) 0.80% 1.90% 3.10%
Expected lives (in years) 5 years 8 months 12 days 5 years 5 years
Expected volatility (as a percent) 79.80% 89.00% 97.90%
Weighted average grant date fair value of options granted during the period $ 0.67 $ 1.19 $ 1.02
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Stockholders' Equity (Details 4) (USD $)
1 Months Ended 12 Months Ended
Aug. 31, 2009
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2011
Aug. 31, 2010
Jun. 30, 2000
Shares
Nonvested, balance at the beginning of the period (in shares) 1,100,000 1,500,000
Nonvested, balance at the end of the period (in shares) 1,500,000 1,100,000 1,500,000
Additional disclosure
Stock-based compensation expense $ 1,601,000 1,652,000 2,418,000
Number of preferred stock purchase right for each share of common stock 1
Preferred stock, par value (in dollars per share) $ 0.001 0.001
Purchase price (in dollars per share) $ 10
Period following public announcement of beneficial ownership acquired by various persons resulting in rights becoming exercisable 10 days
Beneficial ownership of common stock (as a percent) 20.00%
Period following commencement of tender offer or exchange offer that would result in acquisition of beneficial ownership various persons resulting in rights becoming exercisable 10 days
Series A Junior Participating Preferred Stock
Additional disclosure
Preferred stock conversion basis 0.01
Purchase Plan
Additional disclosure
Number of shares of common stock reserved for issuance 1,400,000 900,000
Increase in common stock available under the plan 500,000
Expiration term from approval of grant 10 years
Maximum amount that can be contributed by the employee 25,000
Maximum percentage of regular compensation that can be contributed by the employee 15.00%
Percentage of the fair market value of common stock on the last day of the purchase right period 95.00%
Options granted (in shares) 22,478 21,338 25,133
Number of shares available for future grant 442,490
Restricted stock units
Shares
Nonvested, balance at the beginning of the period (in shares) 1,143,262
Granted (in shares) 919,414
Vested and issued (in shares) (469,911)
Forfeited (in shares) (125,669)
Nonvested, balance at the end of the period (in shares) 1,467,096 1,143,262
Awards expected to vest (in shares) 1,358,386
Weighted Average Grant-Date Fair Value
Nonvested restricted stock units outstanding at the beginning of the period (in dollars per share) $ 1.2
Granted (in dollars per share) $ 1
Vested and issued (in dollars per share) $ 1.15
Forfeited (in dollars per share) $ 1.05
Nonvested restricted stock units outstanding at the end of the period (in dollars per share) $ 1.1 1.2
Awards expected to vest (in dollars per share) $ 1.1
Additional disclosure
Vesting period 4 years
Total fair value of units vested and issued 600,000 1,100,000 800,000
Stock-based compensation expense 800,000 700,000 1,000,000
Unrecognized compensation cost $ 1,000,000
Weighted average period for recognizing compensation cost 2 years 2 months 12 days
Weighted average grant date fair value of options granted during the period $ 1 1.47 1.04
Restricted stock units | Minimum
Additional disclosure
Vesting period 2 years
Restricted stock units | Maximum
Additional disclosure
Vesting period 4 years
Restricted stock units | Awards vesting over two years with one-half of units vesting one year after the issuance date
Additional disclosure
Vesting period 1 year
Awards vesting percentage 50.00%
Restricted stock units | Awards vesting over two years with other half of units vesting two years after the issuance date
Additional disclosure
Vesting period 2 years
Restricted stock units | Awards vesting over four years with one-fourth units vesting one year after the issuance date
Additional disclosure
Vesting period 1 year
Awards vesting percentage 25.00%
Non-employee director
Weighted Average Grant-Date Fair Value
Granted (in dollars per share) $ 0.98 1.2 0.91
Additional disclosure
Number of shares issued 103,574 77,971 109,554
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Stockholders' Equity (Details 5) (USD $)
0 Months Ended 1 Months Ended 12 Months Ended 0 Months Ended 3 Months Ended 1 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended
Sep. 18, 2012
item
investors
Sep. 30, 2012
Mar. 31, 2012
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2011
Mar. 05, 2012
Sep. 18, 2012
Minimum
Nov. 21, 2011
Exercise of September 2009 Warrants, the 2008 Warrants and the 2007 Warrants
Mar. 09, 2011
Exercise of the May 2009 Warrants, the 2008 Warrants and the 2007 Warrants
Mar. 31, 2011
Exercise of the May 2009 Warrants, the 2008 Warrants and the 2007 Warrants
Nov. 21, 2011
Warrants exercised on November 21, 2011
Mar. 31, 2012
March 2012
Mar. 31, 2013
March 2012
Jan. 09, 2012
January 2007
item
Nov. 21, 2011
January 2007
item
Mar. 09, 2011
January 2007
item
Mar. 31, 2012
January 2007
Mar. 31, 2011
January 2007
Mar. 31, 2010
January 2007
Nov. 21, 2011
September 2009
item
Mar. 31, 2012
September 2009
Mar. 31, 2011
September 2009
Mar. 31, 2010
September 2009
Nov. 21, 2011
September 2008
item
Mar. 09, 2011
September 2008
item
Mar. 31, 2012
September 2008
Mar. 31, 2011
September 2008
Mar. 31, 2013
September 2008
Mar. 31, 2010
September 2008
Mar. 09, 2011
September 2008
Warrants exercised on March 9, 2011
Nov. 21, 2011
September 2008
Warrants exercised on November 22, 2011
Mar. 09, 2011
May 2009
item
Mar. 31, 2011
May 2009
Mar. 31, 2010
May 2009
Stockholders' Equity
Common stock sold (in shares) 22,600,000
Common stock, par value (in dollars per share) $ 0.001 $ 0.001 $ 0.001 $ 0.001
Number of shares of common stock under warrants issued 22,600,000 5,800,000 1,600,000 5,200,000 8,500,000 2,400,000 500,000 3,600,000
Exercise price (in dollars per share) $ 1.26 $ 1.41 $ 1.55 $ 1.17 $ 1.17 $ 1.17 $ 1.34 $ 1.6 $ 1.6 $ 1.6 $ 0.95
Number of investors with whom Investor Agreement entered 1
Warrant unit price (in dollars per shares) $ 1.11
Right to purchase maximum additional number of shares of common stock under put option 19,000,000
Number of trading days prior to the exercise of put option 30 days
Expenses incurred upon the exercise of warrants $ 400,000 $ 1,900,000
Number of shares of common stock in each unit 1
Number of shares of common stock in each warrant 1
Arithmetic average of the average daily trading volumes on the exercise date (in shares) 1,750,000
Purchase price of additional shares determined pursuant to the Investor Agreement (in dollars per share) $ 0.94
Net proceeds from exercise of warrants 4,200,000 8,400,000 11,200,000 1,600,000 400,000
Number of warrants exercised (in shares) 7,298,234 8,468,324 5,780,347 3,579,239 392,190 400,000 3,612,717
Proceeds from issuance of warrants 4,250,000 11,403,000 11,282,000 23,100,000
Number of Put Options 2
Number of holders of warrants 2 6 4 2 4 1 2
Outstanding warrants (in shares) 22,600,000 22,550,000 22,550,000 8,535,574 17,003,898 5,780,347 5,780,347 3,910,034 7,342,647 3,961,471 7,686,795 3,612,717
Fee on exercise of warrants 300,000 1,800,000 1,200,000 5,400,000 2,200,000 200,000 500,000 1,000,000
Amount charged against earnings for warrant revaluation prior to exercise of warrants 6,900,000
Reduction in amount charged against earnings for warrant revaluation due to induced exercise of warrants 1,000,000
Reduction of warrant liability $ 9,700,000
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Stockholders' Equity (Details 6)
Mar. 31, 2013
Mar. 31, 2012
March 2012
Mar. 31, 2013
March 2012
Mar. 31, 2012
September 2009
Mar. 31, 2010
September 2009
Mar. 31, 2011
May 2009
Mar. 31, 2013
September 2008
Mar. 31, 2012
September 2008
Mar. 31, 2011
September 2008
Mar. 31, 2012
January 2007
Mar. 31, 2011
January 2007
Shares
Balance at the beginning of period (in shares) 22,600,000 22,550,000 5,780,347 5,780,347 3,612,717 3,910,034 7,342,647 7,686,795 8,535,574 17,003,898
Issuance of warrants (in shares) 22,550,000 48,042
Warrants exercised (in shares) (5,780,347) (3,612,717) (3,579,239) (392,190) (7,298,234) (8,468,324)
Anti-dilution provision (in shares) 51,437 146,626
Warrants expired (in shares) (1,237,340)
Balance at the end of period (in shares) 22,600,000 22,550,000 22,550,000 5,780,347 3,961,471 3,910,034 7,342,647 8,535,574
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Fair Value Measurements (Details) (Recurring, USD $)
In Thousands, unless otherwise specified
Mar. 31, 2013
Mar. 31, 2012
Total
Fair Value Measurements
Cash equivalents $ 27,742 $ 39,790
Warrant liability (10) (791)
Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value Measurements
Cash equivalents 27,742 39,790
Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Warrant liability $ (10) $ (791)
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Fair Value Measurements (Details 2) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Warrants | Minimum
Assumptions for calculating fair value of warrants
Risk-free interest rates range (as a percent) 0.10% 0.00%
Contractual term 6 months 1 month 6 days
Expected volatility range (as a percent) 37.20% 60.50%
Warrants | Maximum
Assumptions for calculating fair value of warrants
Risk-free interest rates range (as a percent) 0.20% 1.50%
Contractual term 1 year 2 months 12 days 4 years 10 months 24 days
Expected volatility range (as a percent) 65.80% 84.90%
Carrying Value
Fair Value Measurements
Obligations under the credit facility 13,476 10,431
Estimated Fair Value
Fair Value Measurements
Obligations under the credit facility 13,476 10,431
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Fair Value Measurements (Details 3) (Warrants, USD $)
In Thousands, unless otherwise specified
12 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2011
Warrants
Reconciliation of the beginning and ending balances for the warrant liability
Balance at the beginning of the period $ 791 $ 20,772 $ 26,803
Total realized and unrealized (gains) losses, income (expense) included in change in fair value of warrant liability (781) (13,872) 3,667
Purchases, issuances and settlements (6,109) (9,698)
Balance at the end of the period $ 10 $ 791 $ 20,772
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Revolving Credit Facility (Details) (USD $)
12 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2011
Revolving Credit Facility
Outstanding borrowings $ 13,476,000 $ 10,431,000
Interest expense 717,000 857,000 873,000
Amortization of deferred financing costs 148,000 169,000 193,000
Credit Facility
Revolving Credit Facility
Credit and security agreements 2
Maximum borrowing capacity under facility 15,000,000
Minimum monthly requirement to maintain cash balance for outstanding line of credit 15,000,000
Minimum covenant compliance period 12 months
Variable base rate LIBOR
Borrowing rate (as a percent) 5.40% 5.50%
Origination fees 100,000
Annual unused line fee (as a percent) 0.25%
Interest rate with respect to letters of credit (as a percent) 1.50%
Outstanding borrowings 13,500,000 10,400,000
Additional borrowing capacity under facility 40,000
Interest expense 700,000 800,000 800,000
Amortization of deferred financing costs 100,000 200,000 200,000
Credit Facility | Minimum
Revolving Credit Facility
Interest floor amount $ 66,000
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Commitments and Contingencies (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2011
Lease Commitments
Renewal option period 5 years
Deferred rent $ 0.1 $ 0.3
Rent expense 2.1 2.1 2.4
Inventory
Commitments and Contingencies
Commitment to purchase $ 31.5
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Commitments and Contingencies (Details 2) (USD $)
12 Months Ended
Mar. 31, 2013
item
Minimum commitments under non-cancelable operating leases
2014 $ 1,881,000
2015 1,136,000
2016 780,000
2017 779,000
2018 584,000
Total minimum lease payments 5,160,000
Chatsworth Amendment
Commitments and Contingencies
Number of options available for lease extensions 2
Period for which each option to extend the lease term is available 5 years
Monthly base rent payable under the Lease Agreement 67,000
Percentage of increase in monthly base rent payable under the Lease Agreement 5.00%
Van Nuys Amendment
Commitments and Contingencies
Monthly base rent payable from January 1, 2013 through June 30, 2015 60,000
Monthly base rent payable from July 1, 2015 through December 31, 2017 $ 65,000
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Commitments and Contingencies (Details 3) (Note payable at an interest rate of 2.2%, USD $)
In Millions, unless otherwise specified
3 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Mar. 31, 2013
Mar. 31, 2012
Note payable at an interest rate of 2.2%
Commitments and Contingencies
Outstanding balance $ 0.2 $ 0.3
Interest rate (as a percent) 2.20% 2.20%
Expense upon renewal of insurance contracts $ 0.5 $ 0.6
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Commitments and Contingencies (Details 4) (Waste heat recovery generator, USD $)
In Millions, unless otherwise specified
0 Months Ended 1 Months Ended 12 Months Ended
Feb. 01, 2010
kW
Oct. 31, 2010
kW
Mar. 31, 2013
kW
Commitments and Contingencies
Maximum capacity of applications for which zero emission generators can be exclusively sold 500
CPS
Commitments and Contingencies
Capacity of generator (in kW) 125 125
Minimum purchase requirements $ 18.7
Maximum capacity of applications for which zero emission generators can be exclusively sold 500
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Commitments and Contingencies (Details 5) (USD $)
In Millions, unless otherwise specified
12 Months Ended 1 Months Ended 1 Months Ended
Mar. 31, 2013
Sep. 30, 2010
Research, development and testing of a more efficient microturbine Combined Heat and Power (CHP) system
DOE
kW
Mar. 31, 2013
Research, development and testing of a more efficient microturbine Combined Heat and Power (CHP) system
DOE
Nov. 30, 2009
Research, development and testing of a more fuel flexible microturbine
DOE
Mar. 31, 2013
Research, development and testing of a more fuel flexible microturbine
DOE
Commitments and Contingencies
Projected electrical efficiency of microturbine (as a percent) 42.00%
Power output of microturbine (in kW) 370
Projected cost of research, development and testing project $ 17.4 $ 3.8
Contribution by other party 5 2.5
Expense to be incurred by the company in research and development 12.4 1.3
Cumulative amount of bill under contract 2.4 1.3
Other disclosures
Cost to distributors for replacement of affected stock $ 0
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Employee Benefit Plans (Details) (USD $)
12 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2011
Employee Benefit Plans
Maximum employee contribution as percentage of their eligible compensation 90.00%
Employer's matching contribution on the dollar up to 4% of the employee's contributions (as a percent) 50.00%
Maximum percentage of employee's contributions for employer's matching contribution of 50 cents for every dollar contributed by employees 4.00%
Employer's contributions made since the inception of the plan $ 0
Employer's match vesting percentage 25.00%
Employer's match vesting period starting from employee's hire date 4 years
Expense recorded $ 200,000 $ 300,000 $ 200,000
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Other Current Liabilities (Details) (USD $)
12 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2011
UTCP
Other Current Liabilities
Capacity of microturbine (in kW) 200
Cash contribution $ 12,000,000
In-kind services contribution 800,000
Royalty payable (as a percent) 10.00%
Royalty payable after recovery of cash and in-kind services (as a percent) 5.00%
Carrier
Other Current Liabilities
Royalties earned 4,300,000 3,200,000 1,900,000
Unpaid earned royalties $ 1,400,000 $ 1,000,000
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Acquisition (Details) (USD $)
0 Months Ended 12 Months Ended 0 Months Ended 1 Months Ended 0 Months Ended 2 Months Ended 12 Months Ended
Apr. 28, 2011
Mar. 31, 2011
Feb. 01, 2010
CPS
Waste heat recovery generator
kW
Oct. 31, 2010
CPS
Waste heat recovery generator
kW
Jul. 30, 2010
MPL
CPS
Feb. 01, 2010
MPL
CPS
Mar. 31, 2010
MPL
CPS
Mar. 31, 2010
MPL
CPS
Oct. 31, 2010
MPL
CPS
Oct. 31, 2010
MPL
CPS
Technology
Oct. 31, 2010
MPL
CPS
Parts/service customer relationships
Oct. 31, 2010
MPL
CPS
TA100 customer relationships
Oct. 31, 2010
MPL
CPS
Backlog
Oct. 31, 2010
MPL
CPS
Trade name
Consideration paid for the rights and assets on the Closing Date
Stock issued at Closing Date $ 1,798,000
Fair value of consideration at Second Funding Date, stock or cash 2,990,000
Total purchase consideration 4,788,000 4,788,000
Number of shares of common stock issued at the Closing Date 3,098,000 3,131,313 1,550,387
Additional consideration payable on the Second Funding Date 3,100,000
Costs incurred related to the acquisition 100,000 100,000
Capacity of generator (in kW) 125 125
Purchase price allocation
Manufacturing equipment 292,000
Intangible Assets 2,240,000 1,080,000 617,000 490,000 69,000
Total purchase consideration 4,788,000 4,788,000
Total revenue 1,300,000
Net loss 32,500
Unaudited pro forma financial information
Revenue 64,279,000
Net Loss (69,977,000)
Supply Agreement
Remaining TA100 microturbine inventory purchased $ 2,300,000
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Acquisition (Details 2) (Waste heat recovery generator)
0 Months Ended 1 Months Ended 12 Months Ended
Feb. 01, 2010
kW
Oct. 31, 2010
kW
Mar. 31, 2013
kW
Original Equipment Manufacturer (OEM) Agreement
Maximum capacity of applications for which zero emission generators can be exclusively sold 500
CPS
Original Equipment Manufacturer (OEM) Agreement
Capacity of generator (in kW) 125 125
Maximum capacity of applications for which zero emission generators can be exclusively sold 500
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SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS (Details) (Allowance for Doubtful Accounts, USD $)
In Thousands, unless otherwise specified
12 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2011
Allowance for Doubtful Accounts
VALUATION AND QUALIFYING ACCOUNTS
Balance at the beginning of the period $ 2,228 $ 212 $ 121
Additions charged to costs and expenses 276 2,256 359
Deductions (362) (240) (268)
Balance at the end of the period $ 2,142 $ 2,228 $ 212
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