1.
Nature of the Business and Operations and Liquidity
Nature of the Business and Operations
American Superconductor Corporation (together with its subsidiaries, “AMSC®” or the “Company”) was founded on April
9,
1987.
The Company is a leading system provider of megawatt-scale power resiliency solutions that orchestrate the rhythm and harmony of power on the grid™ and protect and expand the capability of the Navy's fleet. The Company's products leverage its proprietary “smart materials” and “smart software and controls” to provide enhanced resiliency and improved performance of megawatt-scale power flow.
The Company's consolidated financial statements have been prepared on a going concern basis in accordance with United States generally accepted accounting principles (“GAAP”) and the Securities and Exchange Commission's (“SEC”) instructions to Form 10
-K. The going concern basis of presentation assumes that the Company will continue operations and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business.
Liquidity
The Company has historically experienced recurring operating losses and as of March 31, 2021 , the Company had an accumulated deficit of $ 1,001.3
million. In addition, the Company has historically experienced recurring negative operating cash flows. At March 31, 2021 , the Company had cash, cash equivalents, and marketable securities of $ 73.0
million. Marketable securities includes a certificate of deposit with maturity in six
months. Cash used in operations for the year ended March 31, 2021
was $ 8.7
million.
In December 2015,
the Company entered into a set of strategic agreements valued at approximately $210.0
million with Inox Wind Ltd. (“Inox” or “Inox Wind”), which includes a multi-year supply contract pursuant to which the Company will supply electrical control systems to Inox and a license agreement allowing Inox to manufacture a limited number of electrical control systems. After Inox purchases the specified number of electrical control systems required under the terms of the supply contract, Inox agreed that the Company will continue as Inox's preferred supplier and Inox will be required to purchase from the Company a majority of its electrical control systems requirements for an additional three
-year period. Pursuant to these strategic agreements, Inox must forecast future purchase orders of sets of Electrical Control Systems ("ECS") which become firm orders three
months prior to shipment, and Inox must post letters of credit before the Company will ship such orders. During the year ended March 31, 2020,
Inox was delinquent on its obligation to post letters of credit for sets of ECS that Inox had agreed to purchase under the terms of the supply contract. On May 29, 2020,
the Company sent written notice to Inox notifying Inox of its default under the supply contract due to Inox's failure to post letters of credit in the amount of €6.0
million for the payment of ECS that Inox is obligated to purchase under the terms of the supply contract. If Inox failed to post letters of credit in the amount of €6.0
million in accordance with the terms of the supply contract within the ninety
day cure period after receipt of the default notice, then the Company could have terminated the supply contract by providing written notice of such termination to Inox. On September 2, 2020,
Inox delivered approved letters of credit in the amount of €1.3
million for the payment of a portion of the ECS that Inox was obligated to purchase under the terms of the supply contract. On September 11, 2020,
the Company notified Inox that due to (i) the Company's business relationship with Inox, and (ii) Inox's delivery of approved letters of credit in the amount of €1.3
million as described above, the Company gave Inox until October 5, 2020
to regain compliance with the terms of the supply contract by providing approved letters of credit in the amoun
Free historical financial statements for American Superconductor Corp.
See how revenue, income, cash flow, and balance sheet financials have changed over 53 quarters since 2011. Compare with AMSC stock chart to see long term trends.
Data imported from American Superconductor Corp SEC filings. Check original filings before making any investment decision.