|
x
|
Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
¨
|
Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
Delaware
|
04-2959321
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
|
|
114 East Main St. Ayer, Massachusetts
|
01432
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer
¨
|
|
|
|
|
|
Accelerated filer
x
|
Non-accelerated filer
¨
|
|
|
|
Smaller reporting company
x
|
||
|
|
|
|
|
|
Emerging growth company
¨
|
Common Stock, par value $0.01 per share
|
|
21,417,822
|
Class
|
|
Outstanding as of January 31, 2019
|
|
|
|
Page No.
|
PART I—FINANCIAL INFORMATION
|
|
|
|
|
|
Item 1.
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 3.
|
||
|
|
|
Item 4.
|
||
|
|
|
PART II—OTHER INFORMATION
|
|
|
|
|
|
Item 1.
|
||
|
|
|
Item 1A.
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 3.
|
||
|
|
|
Item 4.
|
||
|
|
|
Item 5.
|
||
|
|
|
Item 6.
|
||
|
|
|
|
|
December 31,
2018 |
|
March 31,
2018 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
80,042
|
|
|
$
|
34,084
|
|
Accounts receivable, net
|
8,055
|
|
|
7,365
|
|
||
Inventory
|
14,006
|
|
|
19,780
|
|
||
Note receivable, current portion
|
3,000
|
|
|
3,000
|
|
||
Prepaid expenses and other current assets
|
4,091
|
|
|
2,947
|
|
||
Total current assets
|
109,194
|
|
|
67,176
|
|
||
|
|
|
|
||||
Property, plant and equipment, net
|
9,808
|
|
|
12,513
|
|
||
Intangibles, net
|
2,975
|
|
|
3,230
|
|
||
Note receivable, long term portion, net of discount of $168 as of December 31, 2018 and net of discount of $336 and deferred gain of $105 as of March 31, 2018
|
2,832
|
|
|
2,559
|
|
||
Goodwill
|
1,719
|
|
|
1,719
|
|
||
Restricted cash
|
165
|
|
|
165
|
|
||
Deferred tax assets
|
1,438
|
|
|
542
|
|
||
Other assets
|
373
|
|
|
271
|
|
||
Total assets
|
$
|
128,504
|
|
|
$
|
88,175
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
17,681
|
|
|
$
|
12,625
|
|
Derivative liabilities
|
3,875
|
|
|
1,217
|
|
||
Deferred revenue, current portion
|
9,929
|
|
|
13,483
|
|
||
Total current liabilities
|
31,485
|
|
|
27,325
|
|
||
|
|
|
|
||||
Deferred revenue, long term portion
|
8,133
|
|
|
8,454
|
|
||
Deferred tax liabilities
|
110
|
|
|
110
|
|
||
Other liabilities
|
97
|
|
|
57
|
|
||
Total liabilities
|
39,825
|
|
|
35,946
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 15)
|
|
|
|
|
|
||
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
||||
Common stock
|
217
|
|
|
211
|
|
||
Additional paid-in capital
|
1,043,815
|
|
|
1,041,113
|
|
||
Treasury stock
|
(2,101
|
)
|
|
(1,645
|
)
|
||
Accumulated other comprehensive (loss) income
|
(65
|
)
|
|
883
|
|
||
Accumulated deficit
|
(953,187
|
)
|
|
(988,333
|
)
|
||
Total stockholders' equity
|
88,679
|
|
|
52,229
|
|
||
Total liabilities and stockholders' equity
|
$
|
128,504
|
|
|
$
|
88,175
|
|
|
Three months ended
December 31, |
|
Nine months ended
December 31, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenues
|
$
|
14,134
|
|
|
$
|
14,933
|
|
|
$
|
41,618
|
|
|
$
|
34,904
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of revenues
|
10,398
|
|
|
9,917
|
|
|
30,364
|
|
|
34,103
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Gross margin
|
3,736
|
|
|
5,016
|
|
|
11,254
|
|
|
801
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research and development
|
2,470
|
|
|
3,023
|
|
|
7,573
|
|
|
8,690
|
|
||||
Selling, general and administrative
|
5,347
|
|
|
5,486
|
|
|
16,308
|
|
|
16,964
|
|
||||
Amortization of acquisition-related intangibles
|
85
|
|
|
85
|
|
|
255
|
|
|
98
|
|
||||
Change in fair value of contingent consideration
|
—
|
|
|
272
|
|
|
—
|
|
|
71
|
|
||||
Restructuring
|
47
|
|
|
1
|
|
|
450
|
|
|
1,328
|
|
||||
(Gain) on Sinovel settlement, net
|
(24,978
|
)
|
|
—
|
|
|
(53,698
|
)
|
|
—
|
|
||||
Total operating (income) expenses
|
(17,029
|
)
|
|
8,867
|
|
|
(29,112
|
)
|
|
27,151
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating income (loss)
|
20,765
|
|
|
(3,851
|
)
|
|
40,366
|
|
|
(26,350
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Change in fair value of warrants
|
(2,475
|
)
|
|
399
|
|
|
(2,658
|
)
|
|
1,468
|
|
||||
Gain on sale of minority interest
|
127
|
|
|
—
|
|
|
127
|
|
|
951
|
|
||||
Interest income, net
|
336
|
|
|
49
|
|
|
769
|
|
|
94
|
|
||||
Other income (expense), net
|
124
|
|
|
(279
|
)
|
|
1,058
|
|
|
(2,449
|
)
|
||||
Income (loss) before income tax expense
|
18,877
|
|
|
(3,682
|
)
|
|
39,662
|
|
|
(26,286
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Income tax expense
|
1,584
|
|
|
566
|
|
|
4,548
|
|
|
496
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
17,293
|
|
|
$
|
(4,248
|
)
|
|
$
|
35,114
|
|
|
$
|
(26,782
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per common share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.85
|
|
|
$
|
(0.21
|
)
|
|
$
|
1.73
|
|
|
$
|
(1.44
|
)
|
Diluted
|
$
|
0.83
|
|
|
$
|
(0.21
|
)
|
|
$
|
1.71
|
|
|
$
|
(1.44
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares outstanding
|
|
|
|
|
|
|
|
||||||||
Basic
|
20,419
|
|
|
19,949
|
|
|
20,300
|
|
|
18,614
|
|
||||
Diluted
|
20,864
|
|
|
19,949
|
|
|
20,538
|
|
|
18,614
|
|
|
Three months ended
December 31, |
|
Nine months ended
December 31, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income (loss)
|
$
|
17,293
|
|
|
$
|
(4,248
|
)
|
|
$
|
35,114
|
|
|
$
|
(26,782
|
)
|
Other comprehensive gain (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation gain (loss)
|
(54
|
)
|
|
52
|
|
|
(948
|
)
|
|
1,273
|
|
||||
Total other comprehensive gain (loss), net of tax
|
(54
|
)
|
|
52
|
|
|
(948
|
)
|
|
1,273
|
|
||||
Comprehensive income (loss)
|
$
|
17,239
|
|
|
$
|
(4,196
|
)
|
|
$
|
34,166
|
|
|
$
|
(25,509
|
)
|
|
Nine months ended
December 31, |
||||||
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
|
|
|
|
||||
Net income (loss)
|
$
|
35,114
|
|
|
$
|
(26,782
|
)
|
Adjustments to reconcile net income (loss) to net cash used in operations:
|
|
|
|
||||
Depreciation and amortization
|
3,455
|
|
|
9,239
|
|
||
Stock-based compensation expense
|
2,402
|
|
|
2,115
|
|
||
Provision for excess and obsolete inventory
|
686
|
|
|
415
|
|
||
(Gain) on sale of minority interest
|
(127
|
)
|
|
(951
|
)
|
||
Change in fair value of warrants and contingent consideration
|
2,658
|
|
|
(1,397
|
)
|
||
Non-cash interest (income) expense
|
(168
|
)
|
|
19
|
|
||
Other non-cash items
|
(1,692
|
)
|
|
81
|
|
||
Changes in operating asset and liability accounts:
|
|
|
|
||||
Accounts receivable
|
(724
|
)
|
|
(3,576
|
)
|
||
Inventory
|
3,320
|
|
|
180
|
|
||
Prepaid expenses and other current assets
|
(1,380
|
)
|
|
647
|
|
||
Accounts payable and accrued expenses
|
4,603
|
|
|
638
|
|
||
Deferred revenue
|
(361
|
)
|
|
(862
|
)
|
||
Net cash provided by/(used in) operating activities
|
47,786
|
|
|
(20,234
|
)
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Purchase of property, plant and equipment
|
(709
|
)
|
|
(2,125
|
)
|
||
Proceeds from the sale of property, plant and equipment
|
138
|
|
|
18
|
|
||
Cash paid for acquisition, net of cash acquired
|
—
|
|
|
74
|
|
||
Proceeds from sale of minority interest
|
127
|
|
|
951
|
|
||
Change in other assets
|
(206
|
)
|
|
26
|
|
||
Net cash provided by/(used in) investing activities
|
(650
|
)
|
|
(1,056
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Employee taxes paid related to net settlement of equity awards
|
(456
|
)
|
|
(274
|
)
|
||
Repayment of debt
|
—
|
|
|
(1,575
|
)
|
||
Proceeds from public equity offering, net
|
—
|
|
|
16,952
|
|
||
Proceeds from exercise of employee stock options and ESPP
|
71
|
|
|
85
|
|
||
Net cash provided by/(used in) financing activities
|
(385
|
)
|
|
15,188
|
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash
|
(792
|
)
|
|
636
|
|
||
|
|
|
|
||||
Net increase in cash, cash equivalents and restricted cash
|
45,959
|
|
|
(5,466
|
)
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
34,248
|
|
|
27,744
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
80,207
|
|
|
$
|
22,278
|
|
|
|
|
|
||||
Supplemental schedule of cash flow information:
|
|
|
|
||||
Issuance of common stock in connection with the purchase of Infinia Technology Corporation
|
$
|
—
|
|
|
$
|
3,498
|
|
Cash paid for income taxes, net of refunds
|
2,792
|
|
|
1,012
|
|
||
Issuance of common stock to settle liabilities
|
235
|
|
|
252
|
|
||
Cash paid for interest
|
—
|
|
|
42
|
|
|
March 31,
2018 |
|
Opening Adjustment
|
|
April 1,
2018 |
||||||
Assets:
|
|
|
|
|
|
||||||
Accounts Receivable
|
$
|
7,365
|
|
|
$
|
(678
|
)
|
|
$
|
6,687
|
|
Inventory
|
19,780
|
|
|
(1,599
|
)
|
|
18,181
|
|
|||
Prepaid expenses and other current assets
|
2,947
|
|
|
2,277
|
|
|
5,224
|
|
|||
Notes receivable, long term portion
|
2,559
|
|
|
105
|
|
|
2,664
|
|
|||
|
|
|
|
|
|
||||||
Liabilities and Stockholders' Equity:
|
|
|
|
|
|
||||||
Accounts payable and accrued expenses
|
$
|
(12,625
|
)
|
|
$
|
(2,729
|
)
|
|
$
|
(15,354
|
)
|
Deferred revenue
|
(13,483
|
)
|
|
2,657
|
|
|
(10,826
|
)
|
|||
|
|
|
|
|
|
||||||
Accumulated deficit
|
$
|
(988,333
|
)
|
|
$
|
(33
|
)
|
|
$
|
(988,366
|
)
|
|
Three Months Ended December 31, 2018
|
|
Nine Months Ended December 31, 2018
|
||||||||||||
Product Line:
|
Grid
|
|
Wind
|
|
Grid
|
|
Wind
|
||||||||
Equipment and systems
|
$
|
4,614
|
|
|
$
|
7,215
|
|
|
$
|
17,571
|
|
|
$
|
17,925
|
|
Services and technology development
|
2,212
|
|
|
93
|
|
|
5,754
|
|
|
368
|
|
||||
Total
|
$
|
6,826
|
|
|
$
|
7,308
|
|
|
$
|
23,325
|
|
|
$
|
18,293
|
|
|
|
|
|
|
|
|
|
||||||||
Region:
|
|
|
|
|
|
|
|
||||||||
Americas
|
$
|
3,771
|
|
|
$
|
36
|
|
|
$
|
16,319
|
|
|
$
|
82
|
|
Asia Pacific
|
2,815
|
|
|
7,263
|
|
|
5,930
|
|
|
18,136
|
|
||||
EMEA
|
240
|
|
|
9
|
|
|
1,076
|
|
|
75
|
|
||||
Total
|
$
|
6,826
|
|
|
$
|
7,308
|
|
|
$
|
23,325
|
|
|
$
|
18,293
|
|
|
Unbilled AR
|
|
Deferred Program Costs
|
|
Contract Liabilities
|
||||||
Beginning balance as of March 31, 2018
|
$
|
3,016
|
|
|
$
|
2,567
|
|
|
$
|
21,937
|
|
Impact of adoption of ASC 606
|
—
|
|
|
(1,599
|
)
|
|
(2,657
|
)
|
|||
Increases for costs incurred to fulfill performance obligations
|
—
|
|
|
1,461
|
|
|
—
|
|
|||
Increase (decrease) due to customer billings
|
(11,063
|
)
|
|
—
|
|
|
11,167
|
|
|||
Decrease due to cost recognition on completed performance obligations
|
—
|
|
|
(1,132
|
)
|
|
—
|
|
|||
Increase (decrease) due to recognition of revenue based on transfer of control of performance obligations
|
9,722
|
|
|
(9
|
)
|
|
(11,345
|
)
|
|||
Other changes and FX impact
|
(53
|
)
|
|
8
|
|
|
(1,040
|
)
|
|||
Ending balance as of December 31, 2018
|
$
|
1,622
|
|
|
$
|
1,296
|
|
|
$
|
18,062
|
|
|
Reportable
|
|
Three Months Ended
December 31, |
|
Nine Months Ended
December 31, |
||||||||
|
Segment
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Inox Wind Limited
|
Wind
|
|
47
|
%
|
|
15
|
%
|
|
40
|
%
|
|
27
|
%
|
Vestas
|
Grid
|
|
<10 %
|
|
|
27
|
%
|
|
15
|
%
|
|
11
|
%
|
SSE Generation Ltd.
|
Grid
|
|
<10 %
|
|
|
17
|
%
|
|
<10 %
|
|
|
<10 %
|
|
Fuji Bridex Pte Ltd
|
Grid
|
|
17
|
%
|
|
—
|
%
|
|
<10 %
|
|
|
—
|
%
|
|
Three months ended December 31,
|
|
Nine months ended December 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Cost of revenues
|
$
|
42
|
|
|
$
|
39
|
|
|
$
|
132
|
|
|
$
|
98
|
|
Research and development
|
168
|
|
|
184
|
|
|
289
|
|
|
294
|
|
||||
Selling, general and administrative
|
582
|
|
|
660
|
|
|
1,981
|
|
|
1,723
|
|
||||
Total
|
$
|
792
|
|
|
$
|
883
|
|
|
$
|
2,402
|
|
|
$
|
2,115
|
|
|
Three months ended December 31,
|
|
Nine months ended December 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
17,293
|
|
|
$
|
(4,248
|
)
|
|
$
|
35,114
|
|
|
$
|
(26,782
|
)
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares of common stock outstanding
|
21,396
|
|
|
20,889
|
|
|
21,216
|
|
|
19,189
|
|
||||
Weighted-average shares subject to repurchase
|
(977
|
)
|
|
(940
|
)
|
|
(916
|
)
|
|
(575
|
)
|
||||
Shares used in per-share calculation ― basic
|
20,419
|
|
|
19,949
|
|
|
20,300
|
|
|
18,614
|
|
||||
Shares used in per-share calculation ― diluted
|
20,864
|
|
|
19,949
|
|
|
20,538
|
|
|
18,614
|
|
||||
Net income (loss) per share ― basic
|
$
|
0.85
|
|
|
$
|
(0.21
|
)
|
|
$
|
1.73
|
|
|
$
|
(1.44
|
)
|
Net income (loss) per share ― diluted
|
$
|
0.83
|
|
|
$
|
(0.21
|
)
|
|
$
|
1.71
|
|
|
$
|
(1.44
|
)
|
|
Level 1
|
-
|
Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
|
|
|
|
|
|
Level 2
|
-
|
Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).
|
|
|
|
|
|
Level 3
|
-
|
Unobservable inputs that reflect the Company’s assumptions that market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available, including its own data.
|
|
Total
Carrying
Value
|
|
Quoted Prices in
Active Markets
(
Level 1)
|
|
Significant Other
Observable Inputs
(
Level 2)
|
|
Significant
Unobservable Inputs
(
Level 3)
|
||||||||
December 31, 2018:
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
47,089
|
|
|
$
|
47,089
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivative liabilities:
|
|
|
|
|
|
|
|
||||||||
Warrants
|
$
|
3,875
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,875
|
|
|
Total
Carrying Value |
|
Quoted Prices in
Active Markets (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
||||||||
March 31, 2018:
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
32,589
|
|
|
$
|
32,589
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivative liabilities:
|
|
|
|
|
|
|
|
||||||||
Warrants
|
$
|
1,217
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,217
|
|
|
Warrants
|
||
April 1, 2018
|
$
|
1,217
|
|
Mark to market adjustment
|
2,658
|
|
|
Balance at December 31, 2018
|
$
|
3,875
|
|
|
Warrants
|
|
Acquisition Contingent Consideration
|
||||
April 1, 2017
|
$
|
1,923
|
|
|
$
|
—
|
|
Issuance of contingent consideration
|
—
|
|
|
571
|
|
||
Mark to market adjustment
|
(1,468
|
)
|
|
71
|
|
||
Settlement fees
|
—
|
|
|
45
|
|
||
Balance at December 31, 2017
|
$
|
455
|
|
|
$
|
687
|
|
|
December 31,
2018 |
|
March 31,
2018 |
||||
Accounts receivable (billed)
|
$
|
6,433
|
|
|
$
|
4,403
|
|
Accounts receivable (unbilled)
|
1,622
|
|
|
3,016
|
|
||
Less: Allowance for doubtful accounts
|
—
|
|
|
(54
|
)
|
||
Accounts receivable, net
|
$
|
8,055
|
|
|
$
|
7,365
|
|
|
December 31,
2018 |
|
March 31,
2018 |
||||
Raw materials
|
$
|
5,777
|
|
|
$
|
7,526
|
|
Work-in-process
|
3,296
|
|
|
920
|
|
||
Finished goods
|
3,637
|
|
|
8,767
|
|
||
Deferred program costs
|
1,296
|
|
|
2,567
|
|
||
Net inventory
|
$
|
14,006
|
|
|
$
|
19,780
|
|
Current assets
|
December 31,
2018 |
|
March 31,
2018 |
||||
Note receivable, current
|
$
|
3,000
|
|
|
$
|
3,000
|
|
Total current note receivable
|
$
|
3,000
|
|
|
$
|
3,000
|
|
|
|
|
|
||||
Long term assets
|
|
|
|
||||
Note receivable, long term
|
$
|
3,000
|
|
|
$
|
3,000
|
|
Note receivable discount
|
(168
|
)
|
|
(336
|
)
|
||
Deferred gain on sale
|
—
|
|
|
(105
|
)
|
||
Total long term note receivable
|
$
|
2,832
|
|
|
$
|
2,559
|
|
|
December 31,
2018 |
|
March 31,
2018 |
||||
Construction in progress - equipment
|
632
|
|
|
654
|
|
||
Equipment and software
|
45,747
|
|
|
72,760
|
|
||
Furniture and fixtures
|
1,308
|
|
|
1,878
|
|
||
Leasehold improvements
|
1,955
|
|
|
1,426
|
|
||
Property, plant and equipment, gross
|
49,642
|
|
|
76,718
|
|
||
Less accumulated depreciation
|
(39,834
|
)
|
|
(64,205
|
)
|
||
Property, plant and equipment, net
|
$
|
9,808
|
|
|
$
|
12,513
|
|
|
December 31,
2018 |
|
March 31,
2018 |
||||
Accounts payable
|
$
|
2,939
|
|
|
$
|
3,096
|
|
Accrued inventories in-transit
|
217
|
|
|
1,207
|
|
||
Accrued other miscellaneous expenses
|
3,638
|
|
|
2,412
|
|
||
Advanced deposits
|
1,765
|
|
|
—
|
|
||
Accrued compensation
|
4,424
|
|
|
3,605
|
|
||
Income taxes payable
|
3,202
|
|
|
536
|
|
||
Accrued warranty
|
1,496
|
|
|
1,769
|
|
||
Total
|
$
|
17,681
|
|
|
$
|
12,625
|
|
|
Three months ended December 31,
|
|
Nine months ended December 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Balance at beginning of period
|
$
|
1,760
|
|
|
$
|
1,852
|
|
|
$
|
1,769
|
|
|
$
|
2,344
|
|
Change in accruals for warranties during the period
|
260
|
|
|
25
|
|
|
577
|
|
|
152
|
|
||||
Settlements during the period
|
(524
|
)
|
|
(406
|
)
|
|
(850
|
)
|
|
(1,025
|
)
|
||||
Balance at end of period
|
$
|
1,496
|
|
|
$
|
1,471
|
|
|
$
|
1,496
|
|
|
$
|
1,471
|
|
Fiscal Year 18
|
December 31,
2018 |
|
September 30,
2018 |
|
June 30,
2018 |
Risk-free interest rate
|
2.61%
|
|
2.62%
|
|
2.40%
|
Expected annual dividend yield
|
—
|
|
—
|
|
—
|
Expected volatility
|
70.29%
|
|
63.66%
|
|
67.40%
|
Term (years)
|
0.87
|
|
1.12
|
|
1.37
|
Fair value
|
$3.6 million
|
|
$1.3 million
|
|
$1.6 million
|
Fiscal Year 17
|
March 31,
2018 |
|
December 31,
2017 |
|
September 30,
2017 |
|
June 30,
2017 |
|
March 31,
2017 |
Risk-free interest rate
|
2.20%
|
|
1.87%
|
|
1.49%
|
|
1.44%
|
|
1.41%
|
Expected annual dividend yield
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Expected volatility
|
65.86%
|
|
65.86%
|
|
65.64%
|
|
67.21%
|
|
66.53%
|
Term (years)
|
1.62
|
|
1.87
|
|
2.12
|
|
2.37
|
|
2.62
|
Fair value
|
$1.1 million
|
|
$0.4 million
|
|
$0.8 million
|
|
$0.9 million
|
|
$1.8 million
|
|
Severance pay
|
|
Facility exit and
|
|
|
||||||
|
and benefits
|
|
Relocation costs
|
|
Total
|
||||||
Accrued restructuring balance at April 1, 2018
|
$
|
262
|
|
|
$
|
173
|
|
|
$
|
435
|
|
Charges to operations
|
—
|
|
|
450
|
|
|
450
|
|
|||
Cash payments
|
(262
|
)
|
|
(623
|
)
|
|
(885
|
)
|
|||
Accrued restructuring balance at December 31, 2018
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Severance pay
|
|
Facility exit and
|
|
|
||||||
|
and benefits
|
|
Relocation costs
|
|
Total
|
||||||
Accrued restructuring balance at April 1, 2017
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Charges to operations
|
1,328
|
|
|
—
|
|
|
1,328
|
|
|||
Cash payments
|
(934
|
)
|
|
—
|
|
|
(934
|
)
|
|||
Accrued restructuring balance at December 31, 2017
|
$
|
394
|
|
|
$
|
—
|
|
|
$
|
394
|
|
|
Three months ended December 31,
|
|
Nine months ended December 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenues
:
|
|
|
|
|
|
|
|
||||||||
Wind
|
$
|
7,308
|
|
|
$
|
2,633
|
|
|
$
|
18,293
|
|
|
$
|
10,465
|
|
Grid
|
6,826
|
|
|
12,300
|
|
|
23,325
|
|
|
24,439
|
|
||||
Total
|
$
|
14,134
|
|
|
$
|
14,933
|
|
|
$
|
41,618
|
|
|
$
|
34,904
|
|
|
Three months ended December 31,
|
|
Nine months ended December 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Operating profit/(loss):
|
|
|
|
|
|
|
|
||||||||
Wind
|
$
|
24,269
|
|
|
$
|
(1,684
|
)
|
|
$
|
51,419
|
|
|
$
|
(7,557
|
)
|
Grid
|
(2,665
|
)
|
|
(1,011
|
)
|
|
(8,202
|
)
|
|
(15,279
|
)
|
||||
Unallocated corporate expenses
|
(839
|
)
|
|
(1,156
|
)
|
|
(2,851
|
)
|
|
(3,514
|
)
|
||||
Total
|
$
|
20,765
|
|
|
$
|
(3,851
|
)
|
|
$
|
40,366
|
|
|
$
|
(26,350
|
)
|
|
December 31,
2018 |
|
March 31,
2018 |
||||
Wind
|
$
|
8,204
|
|
|
$
|
16,790
|
|
Grid
|
38,214
|
|
|
37,012
|
|
||
Corporate assets
|
82,086
|
|
|
34,373
|
|
||
Total
|
$
|
128,504
|
|
|
$
|
88,175
|
|
•
|
In July 2018, the FASB issued ASU 2018-10,
Codification improvements to Topic 842, Leases.
The amendments in ASU 2018-10 provide more clarification in regards to the application and requirements of ASU 2016-02.
|
•
|
In July 2018, the FASB issued ASU 2018-11,
Topic 842, Leases - Targeted improvements.
The amendments in ASU 2018-11 provide for the option to adopt the standard prospectively and recognize a cumulative-effect adjustment to the opening balance of retained earnings as well as offer a new practical expedient that will allow the Company to elect, by class of underlying asset, to not separate non-lease and lease components in certain circumstances and instead to account for those components as a single item.
|
•
|
In August 2016, the FASB issued ASU 2016-15,
Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments
. The amendments in ASU 2016-15 provide more guidance towards the classification of multiple different types of cash flows in order to reduce the diversity in reporting across entities.
|
•
|
In November 2016, the FASB issued ASU 2016-18,
Statement of Cash Flows (Topic 230): Restricted Cash
. The amendments in ASU 2016-18 explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows.
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Wind.
Through our Windtec Solutions
™
, our Wind business segment enables manufacturers to field wind turbines with exceptional power output, reliability and affordability. We supply advanced power electronics and control systems, license our highly engineered wind turbine designs, and provide extensive customer support services to wind turbine manufacturers. Our design portfolio includes a broad range of drive trains and power ratings of 2 megawatts (“MW”) and higher. We provide a broad range of power electronics and software-based control systems that are highly integrated and designed for optimized performance, efficiency, and grid compatibility.
|
•
|
Grid.
Through our Gridtec Solutions
™
, our Grid business segment enables electric utilities and renewable energy project developers to connect, transmit and distribute power with exceptional efficiency, reliability, security and affordability. We provide transmission planning services that allow us to identify power grid congestion, poor power quality, and other risks, which help us determine how our solutions can improve network performance. These services often lead to sales of our grid interconnection solutions for wind farms and solar power plants, power quality systems and transmission and distribution cable systems. We also sell ship protection products to the U.S. Navy through our Grid business segment.
|
|
Three months ended December 31,
|
|
Nine months ended December 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenues
:
|
|
|
|
|
|
|
|
|
|
||||||
Wind
|
$
|
7,308
|
|
|
$
|
2,633
|
|
|
$
|
18,293
|
|
|
$
|
10,465
|
|
Grid
|
6,826
|
|
|
12,300
|
|
|
23,325
|
|
|
24,439
|
|
||||
Total
|
$
|
14,134
|
|
|
$
|
14,933
|
|
|
$
|
41,618
|
|
|
$
|
34,904
|
|
|
Reportable
|
|
Three months ended December 31,
|
|
Nine months ended December 31,
|
||||||||
|
Segment
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Inox Wind Limited
|
Wind
|
|
47
|
%
|
|
15
|
%
|
|
40
|
%
|
|
27
|
%
|
Vestas
|
Grid
|
|
<10 %
|
|
|
27
|
%
|
|
15
|
%
|
|
11
|
%
|
SSE Generation Ltd.
|
Grid
|
|
<10 %
|
|
|
17
|
%
|
|
<10 %
|
|
|
<10 %
|
|
Fuji Bridex Pte Ltd
|
Grid
|
|
17
|
%
|
|
—
|
%
|
|
<10 %
|
|
|
—
|
%
|
|
Three months ended December 31,
|
|
Nine months ended December 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Operating profit/(loss):
|
|
|
|
|
|
|
|
||||||||
Wind
|
$
|
24,269
|
|
|
$
|
(1,684
|
)
|
|
$
|
51,419
|
|
|
$
|
(7,557
|
)
|
Grid
|
(2,665
|
)
|
|
(1,011
|
)
|
|
(8,202
|
)
|
|
(15,279
|
)
|
||||
Unallocated corporate expenses
|
(839
|
)
|
|
(1,156
|
)
|
|
(2,851
|
)
|
|
(3,514
|
)
|
||||
Total
|
$
|
20,765
|
|
|
$
|
(3,851
|
)
|
|
$
|
40,366
|
|
|
$
|
(26,350
|
)
|
|
Three months ended December 31,
|
|
Nine months ended December 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income (loss)
|
$
|
17,293
|
|
|
$
|
(4,248
|
)
|
|
$
|
35,114
|
|
|
$
|
(26,782
|
)
|
Sale of minority investments
|
(127
|
)
|
|
—
|
|
|
(127
|
)
|
|
(951
|
)
|
||||
Stock-based compensation
|
792
|
|
|
883
|
|
|
2,402
|
|
|
2,115
|
|
||||
(Gain) on Sinovel settlement, net
|
(24,978
|
)
|
|
—
|
|
|
(53,698
|
)
|
|
—
|
|
||||
Amortization of acquisition-related intangibles
|
85
|
|
|
85
|
|
|
255
|
|
|
98
|
|
||||
Changes in fair value of warrants and contingent consideration
|
2,475
|
|
|
(126
|
)
|
|
2,658
|
|
|
(1,397
|
)
|
||||
Non-cash interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
||||
Tax effect of adjustments
|
2,163
|
|
|
19
|
|
|
4,991
|
|
|
142
|
|
||||
Non-GAAP net loss
|
$
|
(2,297
|
)
|
|
$
|
(3,387
|
)
|
|
$
|
(8,405
|
)
|
|
$
|
(26,756
|
)
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP net loss per share - basic
|
$
|
(0.11
|
)
|
|
$
|
(0.17
|
)
|
|
$
|
(0.41
|
)
|
|
$
|
(1.44
|
)
|
Weighted average shares outstanding - basic
|
20,419
|
|
|
19,949
|
|
|
20,300
|
|
|
18,614
|
|
|
Three months ending
|
|
Nine months ending
|
||
|
December 31, 2018
|
|
December 31, 2018
|
||
Operating cash flow
|
$24,191
|
|
$47,786
|
||
Sinovel settlement (net of legal fees and expenses)
|
(24,388
|
)
|
|
(54,724
|
)
|
Tax effect of adjustments
|
1,130
|
|
|
2,377
|
|
Non-GAAP operating cash flow
|
$933
|
|
$(4,561)
|
|
December 31, 2018
|
|
March 31,
2018
|
||||
Cash and cash equivalents
|
$
|
80,042
|
|
|
$
|
34,084
|
|
Restricted cash
|
165
|
|
|
165
|
|
||
Total cash, cash equivalents, and restricted cash
|
$
|
80,207
|
|
|
$
|
34,249
|
|
•
|
In July 2018, the FASB issued ASU 2018-10,
Codification improvements to Topic 842, Leases.
The amendments in ASU 2018-10 provide more clarification in regards to the application and requirements of ASU 2016-02.
|
•
|
In July 2018, the FASB issued ASU 2018-11,
Topic 842, Leases - Targeted improvements.
The amendments in ASU 2018-11 provide for the option to adopt the standard prospectively and recognize a cumulative-effect adjustment to the opening balance of retained earnings as well as offer a new practical expedient that will allow us to elect, by class of underlying asset, to not separate non-lease and lease components in certain circumstances and instead to account for those components as a single item.
|
•
|
In August 2016, the FASB issued ASU 2016-15,
Statement of Cash Flows
(Topic 230): Classification of Certain Cash Receipts and Cash Payments. The amendments in ASU 2016-15 provide more guidance towards the classification of multiple different types of cash flows in order to reduce the diversity in reporting across entities.
|
•
|
In November 2016, the FASB issued ASU 2016-18,
Statement of Cash Flows (Topic 230): Restricted Cas
h. The amendments in ASU 2016-18 explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
ITEM 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
OTHER INFORMATION
|
ITEM 6.
|
EXHIBITS
|
|
|
|
Incorporated by Reference
|
|||||||||
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit
|
|
Filing
Date
|
|
Filed/Furnished
Herewith
|
10.1†
|
|
|
|
|
|
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.1
|
|
|
|
|
|
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.2
|
|
|
|
|
|
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.1
|
|
|
|
|
|
|
|
|
|
|
**
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.2
|
|
|
|
|
|
|
|
|
|
|
**
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document.***
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document. ***
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Calculation Linkbase Document. ***
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.DEF
|
|
XBRL Definition Linkbase Document. ***
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Label Linkbase Document. ***
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Presentation Linkbase Document. ***
|
|
|
|
|
|
|
|
|
|
|
*
|
Filed herewith
|
**
|
Furnished herewith
|
***
|
Submitted electronically herewith
|
|
|
AMERICAN SUPERCONDUCTOR CORPORATION
|
|
|
|
|
|
Date:
|
February 5, 2019
|
By:
|
/s/ John W. Kosiba, Jr.
|
|
|
|
John W. Kosiba, Jr.
|
|
|
|
Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)
|
2.2.3.1.
|
Either Party may terminate, at its sole discretion, this Agreement within thirty (30) days following the receipt of notice of a termination of the Prime Contract, except that, if a termination of the Prime Contract is due to AMSC’s breach of the Prime Contract, only Subcontractor may terminate this Agreement, which right to terminate may be exercised at its sole discretion.
|
2.2.3.2.
|
If the DHS Amendment differs from the Proposed DHS Amendment with regards to the Project (an “OTA Change”), the Parties agree as follows:
|
2.2.3.2.1.
|
AMSC shall include in the written notice required pursuant to Section 2.2.3(c) a copy of the signed DHS Amendment (“Modification Notice”).
|
2.2.3.2.2.
|
Subcontractor may request a meeting with AMSC to review the DHS Amendment by delivering a written notice to AMSC (“Negotiation Request”) at any time prior to the expiration of 30 days after receipt of the Modification Notice.
|
2.2.3.2.3.
|
Promptly following AMSC’s receipt of any Negotiation Request, Subcontractor and AMSC shall meet to discuss the OTA Change and possible
|
2.2.3.2.4.
|
In the event that Subcontractor fails to deliver a Negotiation Request on or before 30 days after receipt of a Modification Notice or if Subcontractor provides AMSC with written notice that it waives its right to require a Requested Adjustment during such 30 day period, Subcontractor shall be deemed to have waived its right to require a Requested Adjustment and neither Party shall be entitled to terminate this Agreement pursuant to Section 2.2.3.2.3.
|
2.2.3.3.
|
If DHS submits any additional amendments to the Prime Contract to AMSC regarding the Project after the Effective Date (each, a “Subsequent DHS Amendment”), the Parties agree as follows:
|
2.2.3.3.1.
|
AMSC shall include in the written notice required pursuant to Section 2.2.3(c) a copy of the signed Subsequent DHS Amendment (“Subsequent Modification Notice”).
|
2.2.3.3.2.
|
Subcontractor may request a meeting with AMSC to review such Subsequent DHS Amendment by delivering a written notice to AMSC (“Subsequent Negotiation Request”) at any time prior to the expiration of 30 days after receipt of the Subsequent Modification Notice.
|
2.2.3.3.3.
|
Promptly following AMSC’s receipt of the Subsequent Negotiation Request, Subcontractor and AMSC shall meet to discuss the Subsequent DHS Amendment and possible adjustments to this Agreement that may be requested by Subcontractor as a result of the Subsequent DHS Amendment (“Subsequent Requested Adjustment”). If, during the 30 days after the date that AMSC receives the Subsequent Negotiation Request, or during any longer period as agreed upon in writing by the Parties, the Parties cannot reach an agreement with respect to any Subsequent Requested Adjustment, either Party can terminate this Agreement by delivering written termination notice to the other Party (“Subsequent Termination Notice”). The Parties shall use good faith efforts to negotiate and cooperate with each other regarding any Subsequent Requested Adjustment. Upon delivery of a Subsequent Termination Notice, Subcontractor’s sole and exclusive remedy for any and all claims arising under Section 2.2.3.3 shall be as set forth in Section 2.2.8.2 of this Agreement.
|
2.2.3.3.4.
|
In the event that Subcontractor fails to deliver a Subsequent Negotiation Request on or before 30 days after receipt of a Subsequent Modification Notice or if Subcontractor provides AMSC with written notice that it waives its right to require a Subsequent Requested Adjustment during such 30 day period,
|
2.2.4.1.
|
If AMSC commits any material default or violation of (a) any material debt agreement, instrument, indenture, mortgage or deed of trust to which it is a party or by which it is bound. AMSC shall provide Subcontractor with written notice of any material default as soon as possible after receipt thereof and, upon Subcontractor’s request, status reports and any material correspondence relating thereto; or (b) the Prime Contract, or DHS terminates the Prime Contract as a result of a breach by AMSC;
|
2.2.4.2.
|
If a Change In Control occurs. For purposes of this Agreement, the term “Change in Control” shall mean any of the following transactions or a series of related transactions where the acquiring, surviving or counter-party to the transaction is not a US domiciled entity having rated Baa/BBB or higher by Moody’s and S&P, respectively, on or after each of the announcement and consummation of the Change of Control:
|
2.2.4.2.1.
|
a sale, conveyance, transfer, distribution, lease, assignment, license or other disposition of all or substantially all of the assets of AMSC;
|
2.2.4.2.2.
|
any consolidation, merger, dissolution or reorganization of AMSC in which the holders of all of the equity securities or securities or instruments convertible or exchangeable for equity securities (collectively, “securities”) that may be entitled to vote for the election of any member of a board of directors or similar governing body of AMSC immediately prior to such transaction(s) hold less than fifty percent (50%) of the securities that may be entitled to vote for the election of any such member in such entity immediately following such transaction(s); or
|
2.2.4.2.3.
|
any sale, transfer, issuance, or disposition of any securities of AMSC in which the holders of all of the securities that may be entitled to vote for the election of any member of a board of directors or similar governing body of AMSC immediately prior to such transaction(s) hold less than fifty percent (50%) of the securities that may be entitled to vote for the election of any such member in such entity immediately following such transaction(s);
|
2.2.4.3.
|
If AMSC is unable to perform this Agreement as stated in writing by AMSC;
|
2.2.5.1.
|
AMSC shall promptly provide written notice to Subcontractor:
|
2.2.5.1.1.
|
upon the occurrence of any of the events described in subsection 2.2.4. during the term from the Effective Date through the date of Commissioning, or
|
2.2.5.1.2.
|
in the event that AMSC becomes aware or reasonably believes that any of the events described in subsection 2.2.4. is imminent or likely to occur during such period.
|
2.2.6.1.
|
AMSC may terminate this Agreement upon providing thirty (30) days prior written notice to Subcontractor if Subcontractor does not pursue all necessary approvals and permits set forth in Appendix A with reasonable diligence.
|
2.2.6.2.
|
Either Party may terminate this Agreement upon providing thirty (30) days prior written notice to the other Party if Subcontractor is denied any necessary approval or permit required to be obtained by it on Appendix A and Subcontractor has not appealed, contested, or waived the condition or provided an alternate plan for obtaining such approval or permit within ninety (90) days after receipt of any such denial.
|
2.2.8.1.
|
If this Agreement is terminated by Subcontractor pursuant to Sections 2.2.1 and 2.2.2 hereof, Subcontractor shall, without limiting its other remedies set forth herein (subject to Sections 9.5 and 9.6), be entitled to draw the full $5,000,000 amount of the Letter of Credit (as defined below).
|
2.2.8.2.
|
If this Agreement is terminated pursuant to any of Sections 2.2.3.1, 2.2.3.3, 2.2.4 or 2.2.6 hereof, Subcontractor’s sole and exclusive remedy for any and all claims arising under Sections 2.2.3.1, 2.2.3.3, 2.2.4 and 2.2.6 shall be limited to the Payable Milestones invoiced and earned up to the date of such termination plus the then outstanding amount of the Letter of Credit.
|
2.2.8.3.
|
If this Agreement is terminated pursuant to Section 2.2.3.2, all rights and obligations of the Parties hereunder shall cease and be of no further force or effect; provided, however, the rights and obligations of the Parties under Section 4 (Proprietary Information), Section 5 (Intellectual Property), Section 9 (Indemnity and Limitation of Liability), Section 12 (Notices), and Section 17 (Miscellaneous)
shall survive termination or cancellation of the Agreement indefinitely.
|
2.2.8.4.
|
Upon the expiration or earlier termination of this Agreement other than pursuant to Section 2.2.3.2, all rights and obligations of the Parties hereunder shall cease and be of no further force or effect; provided, however, that the rights and obligations of the Parties under Section 3 (Pricing and Payment), Section 10 (Insurance), and Section 16 (Inspection and Warranty) shall survive for the duration of the Warranty Period, if applicable. However, Section 4 (Proprietary Information), Section 5 (Intellectual Property), Section 9 (Indemnity and Limitation of Liability), Section 12 (Notices), and Section 17 (Miscellaneous), shall survive termination or cancellation of the Agreement
|
2.2.9.
|
Continuation of Agreement after Termination Event
|
2.2.9.1.
|
Without limitation on or waiver of any other rights or remedies of Subcontractor hereunder, Subcontractor shall be entitled to draw on the then outstanding amount of the Letter of Credit, upon providing written notice to AMSC within thirty (30) days following the occurrence of (a) any event that would be a default or give rise to Subcontractor's right to terminate or draw on the Letter of Credit pursuant to Sections 2.2.1, 2.2.2, 2.2.3.1, 2.2.4 or 2.2.6, or (b) any breach or failure to perform by AMSC any obligation to deliver a deliverable or provide a service expressly required or included in its respective obligations pursuant to the terms of this Agreement, in the case where Subcontractor does not terminate the Agreement, in an amount equal to Subcontractor’s actual incurred damages caused by the occurrence of such event.
|
Milestone Number
|
Description
|
Milestone Date
|
Reimbursement Amount
|
||
1
|
Notice from Subcontractor that long-lead materials (as determined by Subcontractor) have been ordered to perform the Subcontractor Work having a sale price in an amount not less than $500,000 (“Payable Milestone #1”)
|
To be determined by Subcontractor upon receipt of the DHS Amendment
|
|
$500,000
|
|
2
|
Receipt by AMSC of plans for the designs described in Appendix A, Subcontractor Specific Responsibilities 1 through 4, together with a certification from Subcontractor that such designs are substantially complete, subject to any material assumptions set forth in such design plans.
|
To be determined by Subcontractor upon receipt of the DHS Amendment
|
|
$500,000
|
|
|
|
|
|
||
TOTAL MILESTONE COSTS
|
|
$1,000,000
|
|
•
|
This Agreement Number
|
•
|
Invoice Number and Date
|
•
|
The time period covered by the invoice
|
•
|
Milestone Number and Description from Schedule of Payable Milestones
|
•
|
Milestone Completion Date
|
•
|
Written description of work performed to complete Milestone (one or two paragraphs)
|
•
|
Evidence of Subcontractor’s completion for each Milestone reimbursement claimed
|
•
|
Milestone Total Value in accordance with Schedule of Payable Milestones
|
•
|
Subcontractor’s Cost Share Amount
|
•
|
Milestone Reimbursement Amount (Amount Claimed) in accordance with Schedule of Payable Milestones
|
3.3.1.
|
Subcontractor shall document each Payable Milestone by submitting the deliverables in accordance with the Schedule of Payable Milestones in Section 3.2 and 3.3, and as defined in the Statement of Work. Subcontractor shall submit an electronic invoice to the email addresses below. In no event shall the date on any invoice submitted by Subcontractor precede the date on which the milestone criteria were met, as evidenced by reasonable documentation upon request of AMSC.
|
3.4.
|
Letter of Credit
. AMSC and Subcontractor have determined that in order to secure Subcontractor’s right to recover certain losses that may be incurred after the Effective Date and secure Subcontractor’s right to payment and performance pursuant to the terms of this Agreement, AMSC
|
5.1.11.1.
|
Use, modify, reproduce, release, perform, display, or disclose GOVERNMENT PURPOSE RIGHTS DATA within the GOVERNMENT for GOVERNMENT PURPOSES only; and
|
5.1.11.2.
|
Release or disclose GOVERNMENT PURPOSE RIGHTS DATA outside the GOVERNMENT and authorize persons to whom release or disclosure has been made to use, modify, reproduce, release, perform, display, or disclose the GOVERNMENT RIGHTS DATA for GOVERNMENT PURPOSES only. DHS shall assure that any non-GOVERNMENT party receiving GOVERNMENT PURPOSE RIGHTS DATA shall be under an obligation not to disclose or to use the GOVERNMENT PURPOSE RIGHTS DATA except for the purposes of the PRIME CONTRACT.
|
5.1.14.1.
|
Use (except for commercial purposes) by support service contractors related to this Project.
|
5.1.14.2.
|
Evaluation of this Project by nongovernment evaluators.
|
5.1.14.3.
|
Use (except for commercial purposes) by other contractors participating in this Project.
|
5.1.14.4.
|
Emergency repair or overhaul work.
|
5.1.18.1.
|
Is not generally known, or is not available from other sources without obligation restricting its disclosure;
|
5.1.18.2.
|
Has not been made available by the owners to others without obligation restricting its disclosure;
|
5.1.18.3.
|
Is not described in an issued patent or a published copyrighted work or is not otherwise available to the public without obligation restricting its disclosure; or
|
5.1.18.4.
|
Can be withheld from disclosure under the Freedom of Information Act, 5 U.S.C. § 552 et seq.; and
|
5.1.18.5.
|
Is identified as such by labels or markings designating the information as proprietary.
|
5.2.1.1.
|
The CONTRACTOR has provided a listing of all PATENTS and pending PATENT applications owned by the CONTRACTOR and its subcontractors associated with the technology that is being pursued under the PRIME CONTRACT, classified as BACKGROUND PATENTS or as SUBJECT INVENTIONS, which listing is attached as Appendix B.
|
5.2.1.2.
|
PATENT Indemnity.
|
5.2.1.2.1.
|
The CONTRACTOR shall indemnify AMSC and its officers, agents, and employees against liability, including costs, for infringement of any United States PATENT (except a PATENT issued upon an application that is now or may hereafter be withheld from issue pursuant to a Secrecy Order under 35 U.S.C. § 181) arising out of the manufacture or delivery of supplies, the performance of services, or
|
5.2.1.2.2.
|
This indemnity shall not apply unless the CONTRACTOR shall have been informed as soon as practicable by the GOVERNMENT of the suit or action alleging such infringement and shall have been given such opportunity as is afforded by applicable laws, rules, or regulations to participate in its defense. Further, this indemnity shall not apply to:
|
5.2.1.3.
|
For the purposes of this sub-clause “GOVERNMENT” shall mean AMSC.
|
5.2.4.1.
|
The CONTRACTOR agrees to execute or to have executed and promptly deliver to GOVERNMENT all instruments necessary to establish or confirm the rights the GOVERNMENT has throughout the world in those SUBJECT INVENTIONS.
|
5.2.4.2.
|
The CONTRACTOR shall include, within the specification of any United States PATENT application and any PATENT issuing thereon covering a SUBJECT INVENTION, the following statement: “This invention was made with Government support under Agreement No.: HSHQDC-08-9-00001. The Government has certain rights in the invention.”
|
5.2.6.1.
|
The CONTRACTOR or assignee has not taken effective steps, consistent with the intent of the PRIME CONTRACT, to achieve practical application of the SUBJECT INVENTION within 5 years of the termination or expiration of the PRIME CONTRACT;
|
5.2.6.2.
|
Such action is necessary to alleviate health or safety needs that are not reasonably satisfied by the CONTRACTOR, its exclusive licensees, or any assignee; or
|
5.2.6.3.
|
Such action is necessary to meet requirements for public use and such requirements are not reasonably satisfied by the CONTRACTOR, its exclusive licensee, or assignee.
|
5.3.2.1.
|
UNLIMITED RIGHTS in all FORM, FIT, AND FUNCTION DATA and all Phase 0-2 FOREGROUND DATA, except to the extent that the PHASE 0-2 FOREGROUND DATA qualifies and is properly marked as:
|
5.3.2.1.1.
|
One of the types of data listed on Appendix B (LIMITED RIGHTS PROPRIETARY INFORMATION/GOVERNMENT PURPOSE RIGHTS DATA AND SOFTWARE);
|
5.3.2.1.2.
|
GOVERNMENT PURPOSE RIGHTS DATA produced under Phases 0-2; or
|
5.3.2.1.3.
|
LIMITED RIGHTS.
|
5.3.4.1.
|
In addition to the TECHNICAL DATA or COMPUTER SOFTWARE specified to be delivered under the PRIME CONTRACT, the DHS OT Officer may, at any time during the PRIME CONTRACT performance or within a period of 3 years after acceptance of all items to be delivered under this the PRIME CONTRACT, order any data CREATED or specifically used in the performance of the PRIME CONTRACT.
|
5.3.4.2.
|
When data are to be delivered under this clause, the Contractor will be compensated for converting the data into the prescribed form, for reproduction, and for delivery.
|
5.3.5.1.
|
In the performance of Phase 2, DHS may need to disclose LIMITED RIGHTS DATA or GOVERNMENT PURPOSE RIGHTS DATA, whether the DATA originated under Phases 0-2, to third parties for assistance in its oversight of the Project. Paragraphs (b) and (c) of this clause describe the process by which that DATA will be made available.
|
5.3.5.2.
|
Prior to DHS’s disclosing any LIMITED RIGHTS DATA and PHASES 0-2 FOREGROUND DATA to AUTHORIZED CONTRACTORS, DHS will provide notice to the CONTRACTOR and allow a review for identification of relevant, competing work’s being performed by the same entity on a competing technology. Should any such circumstance be identified, DHS will acquire relevant facts, and the Parties will consult to reach a mutually agreeable strategy to safeguard the specific LIMITED RIGHTS or PHASES 0-2 FOREGROUND DATA.
|
5.3.5.3.
|
Prior to DHS’s disclosing any GOVERNMENT PURPOSE RIGHTS DATA outside of DHS, DHS will provide the notice to the CONTRACTOR.
|
5.3.5.4.
|
The parties agree to confer and consult with each other prior to publication or other public disclosure of the results of work under the PRIME CONTRACT to ensure that no LIMITED RIGHTS DATA or GOVERNMENT PURPOSE RIGHTS DATA and/or military critical technology or other controlled information is released. No CRITICAL ENERGY
|
9.3.2.1.
|
If the Indemnified Party’s continued use of the Product is restricted or prohibited as a result of any such infringement, misappropriation, or violation of third party rights, Indemnifying Party shall, at Indemnified Party’s option and at no charge to Indemnified Party, and in addition to Indemnified Party’s other rights and remedies under this Section 9.3, (i) obtain for Indemnified Party the right to continue using the such Product; (ii) modify the item(s) in question so that it is no longer infringing (provided that such modification does not degrade the performance or quality of the Product or adversely affect Indemnified Party’s intended use thereof as contemplated in this Agreement); or (iii) replace such item(s) with a non-infringing functional equivalent, provided that Indemnifying Party makes commercially reasonable efforts to ensure that the implementation of such equivalent does not have any
adverse impact on Indemnified Party use thereof or performance of any of its business operations related thereto.
|
9.3.2.2.
|
If none of Section 9.3.2.1(i), (ii) or (iii) is available to Indemnifying Party after exercising all commercially reasonable efforts, it shall have the right to require Indemnified Party to cease using and to remove the affected Product, provided that Indemnified Party shall maintain all rights and remedies otherwise available under this Section 9.3.
|
9.3.2.3.
|
Notwithstanding the foregoing, Indemnifying Party shall not have any obligation of indemnification under Section 9.3 to the extent that such infringement or misappropriation is directly attributable to: (i) modifications made by Indemnified Party or any other party after delivery to Indemnified Party (other than at Indemnifying Party’s direction) if such infringement or misappropriation would not have occurred but for such modification, (ii) the combination of the Product with items not furnished, specified or reasonably anticipated by Indemnifying Party to be used by Indemnified Party or contemplated by this Agreement if such infringement or misappropriation would not have occurred but for such combined use, (iii) any infringement or misappropriation arising from Indemnifying Party’s compliance with Indemnified Party’s designs, specifications, or directions if such infringement or misappropriation would not have occurred but for such compliance and Indemnifying Party had no reasonable basis for knowing that such compliance would result in an infringement or misappropriation, or (iv) any intellectual property or Proprietary Information in which the Indemnified Party or any affiliate of the Indemnified Party has an ownership interest or license (independent of this Agreement).
|
9.5.
|
Limitation of Liability.
EXCEPT WITH REGARD TO CAUSES OF ACTIONS ARISING FROM A PARTY’S OR ITS AFFILIATE’S OR SUBCONTRACTORS’ FRAUD, GROSS NEGLIGENCE OR WILLFUL AND INTENTIONAL MISCONDUCT, A BREACH OF CONFIDENTIALITY OBLIGATIONS OR DAMAGES FOR INDEMNIFICATION FOR BODILY INJURY OR DEATH AS SET FORTH IN, AND SUBJECT TO THE PROVISIONS OF, SECTIONS 9.1 AND 9.2 OF THIS AGREEMENT (COLLECTIVELY, “CAUSES OF ACTION”), THE AGGREGATE LIABILITY OF EACH PARTY, ITS AFFILIATES AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, SUBCONTRACTORS AND SUPPLIERS IN ANY AND ALL CAUSES OF ACTION ARISING UNDER, OUT OF, OR IN RELATION TO THIS AGREEMENT, OR THE PERFORMANCE, BREACH OR TERMINATION OF THIS AGREEMENT SHALL NOT EXCEED TWENTY MILLION DOLLARS (US$20,000,000), REGARDLESS OF WHETHER THE CAUSE OF ACTION ARISES IN TORT, INCLUDING, WITHOUT LIMITATION, NEGLIGENCE OR STRICT LIABILITY, IN CONTRACT, UNDER STATUTE OR OTHERWISE.
|
SECTION 11.
|
ASSIGNMENT AND AMENDMENT
|
12.1.1.
|
Notice to AMSC shall be given to:
|
12.1.2.
|
Notices to Subcontractor shall be given to:
|
SECTION 13.
|
REPRESENTATIONS AND WARRANTIES
|
13.2.
|
Authorization and Authority
. The execution and delivery of this Agreement and any ancillary documents related hereto, the performance of each Party of its obligations hereunder are within each Party’s corporate powers and have been duly authorized by all necessary action on the part of each Party. This Agreement has been duly executed and delivered by each Party, and (assuming due authorization, execution and delivery by the other parties thereto) this Agreement constitutes, the legal, valid and binding obligations of each Party enforceable against each Party in accordance with its respective terms, subject only to (i) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other laws of general application relating to or affecting the enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.
|
16.1.
|
Material Warranty
. For a period of [***] ([***]) years from date of Commissioning, however not exceeding a maximum period of [***] ([***]) months from the date of shipment of the cable system to Subcontractor (the “Warranty Period”), AMSC warrants that the HTS Cable System, software and materials required to be provided or verified by AMSC pursuant to this Agreement, including Appendix A, AMSC Specific Responsibilities ("Material") and all components thereof, and HTS Cable System as a whole, will: (1) comply with the Specifications for such Materials, including the HTS Cable System as a whole, whether existing on the date hereof or developed pursuant to the terms hereof, and the terms of this Agreement, (2) be free from defects in design, workmanship and materials, (3) be conveyed to Subcontractor with good and merchantable title, (4) be free and clear of all security interests, liens, encumbrances or claims of AMSC, Other Subcontractors and third-party suppliers, (5) be free of any claim of unfair competition, (6) be fit for the particular purpose intended therefor to the extent such purpose is set forth in, or reasonably anticipated by, the Agreement, (7) be sourced, manufactured, sold and delivered in accordance with the then-prevailing Applicable Laws, and industry standards and practices, (8) be fully tested in accordance with the Agreement, (9) be of new or unused manufacture, unless specifically noted otherwise in the Agreement, and (10) be interoperable in accordance with the HTS Cable System requirements and Specifications with the system components in which such Material is installed.
|
16.4.
|
Inspection
.
|
16.4.1.
|
DHS
. The Parties shall permit DHS to inspect the work performed in the Subcontractor’s and/or its subcontractor’s facility(ies) or by AMSC to the extent required in the Prime Contract as of the date hereof.
|
16.4.2.
|
Effect
. No inspection, testing, acceptance, payment, or use of any Material or Services will affect the warranties and obligations of AMSC under this Agreement, and such warranties and obligations will survive any such inspection, testing, acceptance, payment, or use.
|
16.5.
|
Subcontractor’s Right to Perform
. In the event of AMSC’s failure to repair or replace the Material, or AMSC’s failure to re-perform the Services within thirty (30) days of Subcontractor’s notice of noncompliance to AMSC under Sections 16.3.1 and 16.3.2, as the case may be, or such shorter time
|
16.6.
|
Backup Inventory and Bailed Property
|
16.6.1.
|
As promptly and as soon as reasonably practicable following execution of this Agreement and no later than the date of Commissioning, AMSC shall deliver to Subcontractor a list of all backup/replacement equipment, supplies, materials, machinery and other items necessary for the operation and maintenance of the HTS Cable System in accordance with this Agreement (collectively, "
Backup Inventory
"). Such list shall be appended to Appendix E. Upon Commissioning, title to such Backup Inventory will immediately transfer to Subcontractor and such Backup Inventory will at all times remain the property of Subcontractor and be held by Subcontractor.
|
16.6.2.
|
Effective as of Commissioning, AMSC hereby assigns to Subcontractor exclusive right, title or interest in and to Backup Inventory, except for AMSC's limited right, subject to Subcontractor's sole discretion, to use the Backup Inventory in the performance of AMSC's obligations under this Agreement. AMSC shall not use the Backup Inventory for any other purpose.
|
16.6.3.
|
All replacement parts, additions, improvements, and accessories for such Backup Inventory will automatically become Subcontractor's property. All replacements of Backup Inventory will also be Subcontractor's property. AMSC shall replace any missing components of or inserts to any Backup Inventory.
|
16.6.4.
|
AMSC will maintain a written inventory of all Backup Inventory that sets forth a description of all Backup Inventory, and provide a copy of this inventory to Subcontractor upon request. AMSC shall immediately sign any documents reasonably requested by Subcontractor to evidence all of Subcontractor's rights to and interests in Backup Inventory.
|
16.6.5.
|
An amount of superconducting wire sufficient to reproduce the longest segment of cable used in this Project ("
Bailed Property
") shall be held by AMSC throughout the Warranty Period in connection with the Project and upon Commissioning, title to such Bailed Property will transfer to Subcontractor and be held by AMSC on a bailment-at-will basis. At the end of the Warranty Period AMSC shall ship the Bailed Property to Subcontractor.
|
16.6.6.
|
Only Subcontractor has any right, title or interest in and to Bailed Property, except for AMSC's limited right, subject to Subcontractor's sole discretion, to use the Bailed Property in the performance of AMSC's obligations under this Agreement. AMSC shall not use the Bailed Property for any other purpose. AMSC shall not commingle Bailed Property with the property of AMSC or with that of a Person other than Subcontractor or AMSC and shall not move any Bailed Property from AMSC's premises without the prior written approval by Subcontractor. Subcontractor may, at any time, for any reason and without payment of any kind, retake possession of any Bailed Property without the necessity of payment or notice to AMSC, or a hearing or a court order, which rights, if any, are waived by AMSC. Upon Subcontractor's request, Bailed Property will be immediately released to Subcontractor or delivered to Subcontractor by AMSC. AMSC's continued holding of Bailed Property after demand has been made by Subcontractor for delivery will substantially impair the value thereof, and, accordingly, Subcontractor will be entitled to a court order of possession without any need or proving damages or a bond. To the fullest extent permitted by law, AMSC shall not allow any encumbrance to be imposed on or attach to the Bailed Property through AMSC or as a result of AMSC's action or inaction, and AMSC hereby waives any encumbrance that it may have or acquire in the Bailed Property.
|
16.6.7.
|
If the bailment relationship described in this Section 16.6 is deemed to be a secured financing transaction, AMSC grants to Subcontractor a continuing security interest in any rights or interests it may have in the Bailed Property.
|
16.6.8.
|
AMSC shall bear all risk of loss of and damage to Bailed Property. AMSC shall, at its own expense, for the benefit of Subcontractor, insure all Bailed Property with full and extended coverage for all losses, for its full replacement value, in accordance with the terms of Section 16. AMSC shall, at its sole cost and expense, maintain, repair, refurbish and replace Bailed Property.
|
16.6.9.
|
AMSC shall mark all Bailed Property permanently and conspicuously to identify it as the property of Subcontractor, and indicate Subcontractor's name and address. AMSC shall immediately sign any documents reasonably requested by Subcontractor to evidence all of Subcontractor's rights to and interests in Bailed Property. AMSC grants to Subcontractor a limited and irrevocable power of attorney, coupled with an interest, to execute and record on AMSC's behalf any documents with respect to Bailed Property that Subcontractor determines are reasonably necessary to reflect Subcontractor's interest in the Bailed Property.
|
16.7.
|
Assignment of Warranties
. AMSC shall and does hereby assign to Subcontractor the benefits of the warranties provided by [***] and [***] as attached in Appendix F to AMSC for the Material provided by them hereunder; provided, however, that Subcontractor shall only receive the benefit of such assignment if (1) AMSC ceases to exist prior to the expiration of the Term of the Agreement, or (2) Subcontractor is allowed to repair or replace any Material or re-perform any Services as detailed in the first sentence of Section 16.5 hereof. AMSC will perform its responsibilities so that such warranties remain in full force and effect throughout the Term of this Agreement.
|
SECTION 17.
|
MISCELLANEOUS
|
17.7.
|
Counterparts
. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and all of which together shall constitute one and the same agreement. This Agreement may be executed and delivered by facsimile or by .pdf file and upon such delivery the facsimile or .pdf signature will be deemed to have the same effect as if the original signature had been delivered to the other Party.
|
1.
|
Design of the overall substation layout to accommodate the HTS Cable System.
|
2.
|
Design, permitting and construction of foundations for HTS cable terminations. [***]. If needed, protection from snow build-up will also be provided.
|
3.
|
Design, permitting, construction and installation of a [***] enclosure, with foundations, for the HTS Refrigeration system and ancillary components, control panels and instrumentation. This will include the utilities needed for the refrigeration system. This includes foundations for the refrigeration chillers which are to be mounted outside, but adjacent to, the refrigeration enclosure. A temporary space outside the enclosure is required to place a [***] LN2 tank for the cable initial cooldown process.
|
4.
|
Design, procurement, construction and installation of any substation structures and equipment necessary to connect the HTS cable to the [***] substation system.
|
5.
|
Trenching, ducts or similar as chosen by Subcontractor for the HTS cable [***]. This must include a [***] or similar for the HTS [***], and provisions for valves and instrumentation at both HTS cable terminations.
|
6.
|
Electrical interconnect from HTS cable terminations to the Subcontractor system including all related equipment and installation thereof such as risers, bus work, circuit breakers, monitoring and protection PT’s and CT’s, etc.
|
7.
|
Off-load and installation of the Refrigeration system into the Refrigeration enclosure. This will include set-up and connection to the Subcontractor provided enclosure and utilities. Off-load, installation, set-up and connection of the chillers is part of this item.
|
8.
|
Connection of AMSC provided controls, alarms and instrumentation to the Subcontractor [***] networks. Programming of [***] for Operations and Engineering, and Remote interfaces is implied.
|
9.
|
Intentionally Deleted.
|
10.
|
Physical access, security, temporary site office and sanitary facilities for use by employees of AMSC and its contractors during installation and commissioning. This will include secure storage of tools and equipment and a laydown area at site for AMSC and their subcontractors’ materials and equipment required for installation and commissioning.
|
11.
|
Temporary power and simple weather shelter to support making outdoor connections.
|
12.
|
Monthly progress reports to include schedule, technical and [***] information. [***] information is for comparison to the [***] proposal provided to DHS in the AMSC/ DHS Agreement.
|
13.
|
Proof of completion of all Milestones executed by Subcontractor set forth in Schedule 1 to this Appendix A, regardless of whether the Milestone is billable by Subcontractor or not.
|
14.
|
Participation in quarterly progress reviews with AMSC and DHS from the project start through the first year of operation.
|
15.
|
Support for start-up and commissioning of the HTS Cable System including the Refrigeration System, as expressly set forth in this Agreement, a Statement of Work or written commissioning plan signed by the Parties.
|
16.
|
Expeditious access pursuant to the access procedures set forth in this Agreement, to site to affect parameter changes, adjustments, repairs, or data collection during operation of the cable system.
|
1.
|
A delivered HTS cable, [***] terminations and [***] of the design which was tested and witnessed by Subcontractor at the [***] facility in September 2016. The cable will be approximately [***] in length. A [***] of suitable length (approximately [***]) will also be provided. Final length to be agreed upon by Subcontractor and AMSC.
|
2.
|
Support to engineer the interfaces between the AMSC refrigeration and cable system controller and the Subcontractor [***] network interfaces.
|
3.
|
A refrigeration system including controls and chillers, [***].
|
4.
|
Installation of the HTS cable, Terminations and [***]. Interconnection piping to connect the HTS cable to the refrigeration system.
|
5.
|
Provide the AMSC Support.
|
6.
|
Verify that Subcontractor has performed the Subcontractor Responsibilities necessary for commissioning and performance of the AMSC Specific Responsibilities and required by the Specification.
|
7.
|
Start-up, cool down and commissioning of the commercially operational HTS Cable System. This will include filling of liquid nitrogen (LN2) as necessary.
|
8.
|
Start-up and commissioning of the Refrigeration System. This will include filling of liquid nitrogen (LN2) as necessary.
|
9.
|
Delivery of HTS Cable System operating and maintenance manual and training.
|
Technical Data/Computer Software To Be
Furnished with Restrictions
|
Basis for Assertion
|
Asserted Rights Category
|
Person Asserting Restrictions
|
Expiration
Date
|
1.
Pre-existing integrated HTS/FCL cable data
|
Developed at private expense outside of Agreement
|
Limited Rights Proprietary Information
|
American Superconductor
|
N/A
|
2.
Pre-existing HTS/FCL cable wire data
|
Developed at private expense outside of Agreement
|
Limited Rights Proprietary Information
|
American Superconductor
|
N/A
|
3.
Pre-existing stand-alone fault current limiter data
|
Developed at private expense outside of Agreement
|
Limited Rights Proprietary Information
|
American Superconductor
|
N/A
|
4.
Integrated HTS/FCL cable data developed on this Agreement
|
Developed under the Letter Contract or this Agreement
|
Government Purpose Rights
|
American Superconductor
|
N/A
|
5.
HTS/FCL cable wire data developed on this Agreement
|
Developed in part or whole under the Letter Contract or this Agreement
|
Government Purpose Rights
|
American Superconductor
|
N/A
|
6.
Stand-alone fault current limiter data developed on this Agreement
|
Developed in part or whole under the Letter Contract or this Agreement
|
Government Purpose rights
|
American Superconductor or its Stand-alone FCL Subcontractors
|
N/A
|
7.
Pre-existing Stand-alone fault current limiter data
|
Developed at private expense outside of Agreement
|
Limited Rights Proprietary Information
|
Stand-alone FCL Subcontractors
|
N/A
|
Technical Data/Computer Software To Be
Furnished with Restrictions
|
Basis for Assertion
|
Asserted Rights Category
|
Person Asserting Restrictions
|
Expiration
Date
|
8.
Pre-existing HTS cable, cable termination and/or raw materials there-of data
|
Developed at private expense outside of Agreement
|
Limited Rights Proprietary Information
|
[***]
|
N/A
|
9.
Integrated HTS/FCL cable, cable termination and/or raw materials there-of data developed on the Agreement
|
Developed in part or whole under the Letter Contract or this Agreement
|
Government Purpose Rights
|
[***]
|
N/A
|
10.
Pre-existing cryogenics and refrigeration system data
|
Developed at private expense outside of Agreement
|
Limited Rights Proprietary Information
|
[***]
|
N/A
|
11.
All other technical data and computer software developed by American Superconductor or its Other Subcontractors under this Agreement
|
Developed in part or whole under the Letter Contract or this Agreement
|
Government Purpose Rights
|
American Superconductor or its Other Subcontractors, as applicable
|
N/A
|
Date of Issuance:
[DATE]
|
Reference Number:
[NUMBER]
Expiration Date:
[DATE]
|
Applicant:
American Superconductor Corporation, a Delaware corporation with offices at [114 East Main Street, Ayer, MA 01432]
|
Beneficiary:
Commonwealth Edison Company, an Illinois corporation with offices at 440 South LaSalle, Chicago, IL 60605
|
|
Very truly yours,
[ISSUER’S NAME]
|
|
By_____________________
Name:
Title:
Office for Presentment:
[______________________]
|
1.1.
|
Performance of Work.
|
1.1.1
|
Material Warranty. For a period of [***] ([***]) years from the date that the cable system (“Material”) has been commissioned, however not exceeding a maximum period of [***] from the date of shipment to Subcontractor, Seller warrants that the Material furnished to Buyer under these Terms and Conditions and all components thereof will: (1) comply with the Specifications contained in or developed in accordance with these Terms and Conditions, (2) be free from defects in design, workmanship and materials, (3) be conveyed to Buyer with good and merchantable title, (4) be free and clear of all security interests, liens, encumbrances or claims of Seller, subcontractors and third-party suppliers, (5) be free of any claim of infringement, misappropriation, unfair competition or violation of any third-party right, including intellectual property rights, (6) be fit for the particular purpose intended therefor to the extent such purpose is set forth in the technical specification, (7) be sourced, manufactured, sold and delivered in accordance with the then-prevailing applicable laws, and industry standards as defined in the technical specification, (8) be fully tested in accordance with these Terms and Conditions, (9) be of new manufacture, unless specifically noted otherwise in the Contract Documents.
|
1.2.
|
Remedies.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of American Superconductor Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
February 5, 2019
|
By:
|
/s/D
aniel
P. M
c
G
ahn
|
|
|
|
Daniel P. McGahn
|
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of American Superconductor Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
February 5, 2019
|
By:
|
/s/John W. Kosiba, Jr.
|
|
|
|
John W. Kosiba, Jr.
|
|
|
|
Chief Financial Officer
|
Date:
|
February 5, 2019
|
By:
|
/s/D
aniel
P. M
c
G
ahn
|
|
|
|
Daniel P. McGahn
|
|
|
|
Chief Executive Officer
|
Date:
|
February 5, 2019
|
By:
|
/s/John W. Kosiba, Jr.
|
|
|
|
John W. Kosiba, Jr.
|
|
|
|
Chief Financial Officer
|