{"url_path":"/sec/cgeh/10-k/2026/item-9a","section_key":"item-9a","section_title":"Item 9A Controls and Procedures.**","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-06-25","source_url":"https://www.sec.gov/Archives/edgar/data/1009759/0001104659-26-077817-index.html","accession_number":"0001104659-26-077817","cik":"0001009759","ticker":"CGEH","issuer_name":"Capstone Energy Plus, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1009759/0001104659-26-077817-index.html","primary_entity_key":"0001009759","primary_entity_name":"Capstone Energy Plus, Inc."},"word_count":27324,"has_tables":true,"body_markdown":"**Item 9A.  Controls and Procedures.**\n\nDisclosure Controls and Procedures\n\nWe maintain disclosure controls and procedures that are designed to ensure that the information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.\n\nIn connection with the preparation of this Form 10-K for the fiscal year ended March 31, 2026, an evaluation was performed under the supervision and with the participation of our management, including the CEO and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in and pursuant to Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, our CEO and CFO have concluded that, as of March 31, 2026, our disclosure controls and procedures were effective.\n\nManagement’s Report on Internal Control Over Financial Reporting\n\nOur management is responsible for establishing and maintaining adequate internal control over our financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act as a process designed by, or under the supervision of, our CEO and CFO and effected by our Board, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that:\n\n●Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;\n\n●Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and\n\n●Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.\n\nWe conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on this evaluation, management concluded that our internal control over financial reporting was effective as of March 31, 2026.\n\n*Remediation of Previously Reported Material Weakness*As previously disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025, management identified a material weakness in internal control over financial reporting related to the proper accounting, presentation, and disclosure for FPP service contracts, including controls relating to the relevant information technology systems used in this process.\n\nDuring fiscal year 2026, management, under the direction and oversight of the Audit Committee and the Board, undertook the following remediation actions to address this material weakness:\n\n47\n\n[Table of Contents](#TOC)\n\n●Management enhanced the design of and implemented controls over financial reporting for FPP service contracts, including controls over the Company's process for receiving and validating notice of FPP claims;\n\n●We reinforced the Company's tone at the top through employee meetings, CEO letters, management training, and enhanced communication of the Company's values and expected business conduct directly from senior leadership;\n\n●We enhanced our quarterly disclosure committee meetings to require additional communication of business activities to the appropriate finance and accounting personnel and to our Board and Audit Committee;\n\n●We hired additional accounting and compliance personnel to maintain an effective control environment commensurate with our financial reporting requirements; and\n\n●We implemented a process to periodically review and update accounting policies.\n\nAs of March 31, 2026, management has concluded, through testing of the design and operating effectiveness of the related controls, that the previously reported material weakness has been fully remediated. There are no remaining material weaknesses in our internal control over financial reporting.\n\nChanges in Internal Control over Financial Reporting\n\nExcept as described above, there were no changes in our internal control over financial reporting during the most recent fiscal quarter that were identified in connection with management’s evaluation required by paragraph (d) of Rules 13d-15 and 15d-15 under the Exchange Act that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.\n\nInherent limitations of Internal Control\n\nA control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the internal control system are met. Because of the inherent limitations of any internal control system, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected.\n\n**Item ****9B. Other Information.**\n\n*Rule 10b5-1 Trading Plans*\n\nDuring the year ended March 31, 2026, none of our directors or officers adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities to satisfy the affirmative defense conditions of “Rule 10b5-1 trading arrangement” or any “non-Rule 10b5-1 trading arrangement.”\n\n**Item ****9C. Disclosure Regarding F****oreign Jurisdictions that Prevent Inspections.**\n\nNot applicable.\n\n48\n\n[Table of Contents](#TOC)\n\n**PART III**\n\n**Item ****10. Directors, Executive Officers and Corporate Governance.**\n\nThe information required by this Item is incorporated by reference from our proxy statement for our 2026 Annual Meeting of Stockholders under the captions “Election of Directors to the Board of Directors,” “Executive Officers of the Company,” “Governance of the Company and Practices of the Board of Directors,” “Insider Trading Policies and Procedures,” and “Code of Business Conduct and Code of Ethics.” With regard to the information required by this Item regarding compliance with Section 16(a) of the Exchange Act, we will provide disclosure of delinquent Section 16(a) reports, if any, in our Proxy Statement related to the 2026 Annual Meeting of Shareholders in a section entitled “Additional Information—Delinquent Section 16(a) Reports,” and such disclosure, if any, is incorporated herein by reference.\n\n**Item ****11. Executive Compensation.**\n\nThe information required by this Item is incorporated by reference from our proxy statement for our 2026 Annual Meeting of Stockholders under the caption “Compensation of Officers,” and “Compensation of Directors.”\n\n​\n\n**Item ****12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.**\n\nThe information required by this Item is incorporated by reference from our proxy statement for our 2026 Annual Meeting of Stockholders under the caption “Security Ownership of Certain Beneficial Owners and Management”\n\n**Item ****13. Certain Relationships and Related Transactions, and Director Independence.**\n\nThe information required by this Item is incorporated by reference from our proxy statement for our 2026 Annual Meeting of Stockholders under the caption “Other Information.”\n\n**Item ****14. Principal Accountant Fees and Services.**\n\nThe information required by this Item is incorporated by reference from our proxy statement for our 2026 Annual Meeting of Stockholders under the caption “Ratification of Appointment of Independent Registered Public Accounting Firm.”\n\n​\n\n49\n\n[Table of Contents](#TOC)\n\n**PART IV**\n\n**Item ****15. Exhibits and Financial Statement Schedules.**\n\n*(a) 1. and 2. Financial statements and financial statement schedule*\n\nThe financial statements and notes are listed in the Index to [Consolidated Financial Statements](#INDEXTOCONSOLIDATEDFINANCIALSTATEMENTS_4) on page F-1 of this Form 10-K. Financial statement schedules not included in this Form 10-K have been omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.\n\n*3. Exhibits*\n\nThe exhibits filed as part of this Form 10-K are set forth on the Exhibit Index immediately preceding the signatures of this Form 10-K. The Exhibit Index is incorporated herein by reference.\n\n**Item ****16. Form 10-K Summary.**\n\nNot applicable.\n\n​\n\n​\n\n50\n\n[Table of Contents](#TOC)\n\n**CAPSTONE ENERGY+, INC.**\n\n**INDEX TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n​\n\n**  ​ ​ ​**\n\n**Page**\n\n[Report of Independent Registered Public Accounting Firm](#ACCOUNTINGFIRM) (PCAOB 00199); CBIZ CPAs P.C., Los Angeles, CA\n\n​\n\nF-2\n\nConsolidated Financial Statements:\n\n​\n\n​\n\n[Consolidated Balance Sheets as of March 31, 2026 and 2025](#BALANCESHEETS_93789)\n\n​\n\nF-5\n\nYears Ended March 31, 2026 and 2025:\n\n​\n\n​\n\n[Consolidated Statements of Operations](#STATEMENTSOFOPERATIONS)\n\n​\n\nF-6\n\n[Consolidated Statements of Changes in Temporary Equity and Stockholders’ Deficit](#STOCKHOLDERSEQUITY)\n\n​\n\nF-7\n\n[Consolidated Statements of Cash Flows](#STATEMENTSOFCASHFLOWS)\n\n​\n\nF-8\n\n[Notes to Consolidated Financial Statements](#NOTESTOCONDENSEDCONSOLIDATEDFINANCIALSTA)\n\n​\n\nF-9\n\n​\n\nFinancial statement schedules not included in this Form 10-K have been omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.\n\n​\n\nF-1\n\n[Table of Contents](#TOC)\n\n**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**\n\nTo the Stockholders and Board of Directors of\n\nCapstone Energy +, Inc.\n\n​\n\n**Opinion on the Financial Statements**\n\n​\n\nWe have audited the accompanying consolidated balance sheets of Capstone Energy+, Inc. (the “Company”) as of March 31, 2026 and 2025, the related consolidated statements of operations, temporary equity and stockholders’ deficit, and cash flows for each of the two years in the period ended March 31, 2026 and 2025, and the related notes****(collectively referred to as the “financial statements”).  In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2026 and 2025, and the results of its operations and its cash flows for each of the two years in the period ended March 31, 2026, in conformity with accounting principles generally accepted in the United States of America.\n\n​\n\n**Basis for Opinion**\n\n​\n\nThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (\"PCAOB\") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\n​\n\nWe conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.\n\n​\n\nOur audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits****provide a reasonable basis for our opinion.\n\n​\n\n**Critical Audit Matters**\n\n​\n\nThe critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.\n\nNet Realizable Value of Inventories\n\n*Description of the Matter*\n\nThe Company’s inventories totaled approximately $24.8 million as of March 31, 2026 and approximately $2.7 million of inventories were classified as long-term on the Company’s consolidated balance sheet. As described in Note 2 to the consolidated financial statements, management values inventories at the lower of cost (determined on a first-in-first-out basis) or net realizable value. In determining this estimate, the Company will both (a) perform a monthly analysis to compare the previous 36-month usage of its inventories to the current quantities on hand and (b) judgmentally review their\n\nF-2\n\n[Table of Contents](#TOC)\n\ninventories for any non-recurring adjustments that may be necessary based on their knowledge of the business. Changes in the assumptions used could have a significant impact on the net realizable value of inventories.\n\nThe principal considerations for our determination that performing procedures relating to the net realizable value of inventories is a critical audit matter are (i) the significant judgement required by management when determining the net realizable value; and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures to evaluate management’s estimate and significant assumptions in determining the net realizable value.\n\n*How We Addressed the Matter*\n\nAddressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others:\n\n◾Obtained an understanding of the Company’s financial reporting processes in place to estimate the net realizable value of inventories;\n\n◾Compared the assumptions made by management in evaluating its slow moving or obsolete goods to prior years to ensure such estimates and policies have remained consistent;\n\n◾Tested management’s calculation and significant assumptions made in determining its current year net realizable value of inventories, which included substantively testing the inventory usage and movement used in such calculations;\n\n◾Performed an independent sensitivity analysis to determine whether or not material differences in the net realizable value of inventories existed if management were to use a different look-back time period in their calculation; and\n\n◾Performed a retrospective analysis of the Company’s net realizable value of inventories by comparing the Company’s historical write-downs in prior periods to the actual current period usage and movement.\n\nValuation of Intangible Assets Acquired in a Business Combination\n\n*Description of the Matter*\n\nAs described in Note 20 to the consolidated financial statements, the Company completed the acquisition of Cal Microturbine on August 13, 2025. The Company accounted for this transaction under the acquisition method for business combinations in accordance with ASC 805. Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their respective fair values, including identified customer relationship related intangible assets.\n\nWe identified the valuation of the customer relationship related intangible asset as a critical audit matter due to (i) the significant estimates and assumptions made by management, (ii) high degree of auditor judgment when performing audit procedures to evaluate the reasonableness of management's forecast of future cash flows, and (iii) use of significant unobservable inputs and assumptions, including the need to involve our fair value specialists.\n\n*How We Addressed the Matter*\n\nAddressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others:\n\n◾Obtained an understanding of management's process over the valuation of customer relationship related intangible asset;\n\n◾Evaluated the reasonableness of forecasted future cash flows used in valuation of the customer relationship related intangible asset by comparing to contracts, historical results, and other metrics;\n\n◾With the assistance of our fair value specialists, evaluated the reasonableness of the valuation methodology, and significant unobservable inputs and assumptions by:\n\nF-3\n\n[Table of Contents](#TOC)\n\notesting the source information underlying the determination of certain significant unobservable inputs and assumptions,\n\nodeveloping a range of independent estimates for other unobservable assumptions and comparing them to the assumptions used by management, and\n\notesting the mathematical accuracy of the calculations.\n\n​\n\n/s/ CBIZ CPAs P.C.\n\n​\n\n**CBIZ CPAs P.C.**\n\n​\n\nWe have served as the Company’s auditor since 2017 (such date takes into account the acquisition of the attest business of Marcum LLP by CBIZ CPAs P.C. effective November 1, 2024)\n\n​\n\nLos Angeles, California\n\n​\n\nJune 25, 2026\n\n​\n\n​\n\nF-4\n\n[Table of Contents](#TOC)\n\n**CAPSTONE ENERGY+, INC. AND SUBSIDIARIES**\n\n**CONSOLIDATED BALANCE SHEETS**\n\n**(In thousands, except share amounts)**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**March 31,**\n\n**  ​ ​ ​**\n\n**March 31,**\n\n** **\n\n​\n\n**  ​ ​ ​**\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n** **\n\n**Assets**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nCurrent Assets:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nCash and cash equivalents\n\n​\n\n$\n\n28,179\n\n​\n\n$\n\n8,671\n\n​\n\nRestricted cash\n\n​\n\n​\n\n715\n\n​\n\n​\n\n—\n\n​\n\nAccounts receivable, net of allowances of $1,337 at March 31, 2026 and $607 at March 31, 2025\n\n​\n\n \n\n12,911\n\n​\n\n \n\n7,037\n\n​\n\nInventories\n\n​\n\n \n\n22,106\n\n​\n\n \n\n16,615\n\n​\n\nLease receivable, current\n\n​\n\n​\n\n377\n\n​\n\n​\n\n113\n\n​\n\nPrepaid expenses and other current assets\n\n​\n\n \n\n3,547\n\n​\n\n \n\n3,653\n\n​\n\nTotal current assets\n\n​\n\n \n\n67,835\n\n​\n\n \n\n36,089\n\n​\n\nProperty, plant, equipment and rental assets, net\n\n​\n\n \n\n16,185\n\n​\n\n \n\n19,362\n\n​\n\nIntangible assets, net\n\n​\n\n​\n\n5,546\n\n​\n\n​\n\n—\n\n​\n\nFinance lease right-of-use assets\n\n​\n\n​\n\n4,789\n\n​\n\n​\n\n3,787\n\n​\n\nOperating lease right-of-use assets\n\n​\n\n​\n\n9,859\n\n​\n\n​\n\n8,282\n\n​\n\nNon-current portion of inventories\n\n​\n\n \n\n2,736\n\n​\n\n \n\n3,464\n\n​\n\nLease receivable, non-current\n\n​\n\n​\n\n1,868\n\n​\n\n​\n\n1,175\n\n​\n\nOther assets\n\n​\n\n \n\n2,632\n\n​\n\n \n\n2,705\n\n​\n\nTotal assets\n\n​\n\n$\n\n111,450\n\n​\n\n$\n\n74,864\n\n​\n\n**Liabilities, Temporary Equity and Stockholders’ Deficit**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nCurrent Liabilities:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nAccounts payable\n\n​\n\n$\n\n17,614\n\n​\n\n$\n\n14,092\n\n​\n\nAccrued expenses\n\n​\n\n​\n\n3,796\n\n​\n\n​\n\n1,447\n\n​\n\nAccrued salaries and wages\n\n​\n\n \n\n3,233\n\n​\n\n \n\n2,838\n\n​\n\nAccrued warranty reserve\n\n​\n\n \n\n971\n\n​\n\n \n\n1,070\n\n​\n\nDeferred revenue\n\n​\n\n \n\n10,040\n\n​\n\n \n\n13,351\n\n​\n\nDeferred acquisition costs, current\n\n​\n\n​\n\n1,726\n\n​\n\n​\n\n—\n\n​\n\nFinance lease liability, current\n\n​\n\n​\n\n1,520\n\n​\n\n​\n\n2,017\n\n​\n\nOperating lease liability, current\n\n​\n\n​\n\n1,862\n\n​\n\n​\n\n3,539\n\n​\n\nFactory protection plan liability\n\n​\n\n​\n\n4,698\n\n​\n\n​\n\n6,256\n\n​\n\nExit notes, net of discount, current\n\n​\n\n​\n\n25,320\n\n​\n\n​\n\n7,968\n\n​\n\nTotal current liabilities\n\n​\n\n \n\n70,780\n\n​\n\n \n\n52,578\n\n​\n\nDeferred revenue, non-current\n\n​\n\n​\n\n648\n\n​\n\n​\n\n598\n\n​\n\nDeferred acquisition costs, non-current\n\n​\n\n​\n\n1,430\n\n​\n\n​\n\n—\n\n​\n\nFinance lease liability, non-current\n\n​\n\n​\n\n991\n\n​\n\n​\n\n248\n\n​\n\nOperating lease liability, non-current\n\n​\n\n​\n\n8,132\n\n​\n\n​\n\n4,988\n\n​\n\nExit notes, net of discount, non-current\n\n​\n\n​\n\n—\n\n​\n\n​\n\n24,213\n\n​\n\nTotal liabilities\n\n​\n\n \n\n81,981\n\n​\n\n \n\n82,625\n\n​\n\nCommitments and contingencies (Note 12)\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nTemporary equity:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nRedeemable noncontrolling interests\n\n​\n\n​\n\n—\n\n​\n\n​\n\n13,859\n\n​\n\nRedeemable preferred stock, $0.001 par value; 1,000,000 shares authorized, 80,000 shares issued and outstanding at March 31, 2026; 1,000,000 shares authorized, zero shares issued and outstanding at March 31, 2025 (Note 13)\n\n​\n\n​\n\n73,936\n\n​\n\n​\n\n—\n\n​\n\nTotal temporary equity\n\n​\n\n​\n\n73,936\n\n​\n\n​\n\n13,859\n\n​\n\nStockholders’ deficit:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nCommon stock, $.001 par value; 100,000,000 shares authorized, 30,163,613 shares issued and outstanding at March 31, 2026; 100,000,000 shares authorized, 18,643,587 shares issued and outstanding at March 31, 2025\n\n​\n\n \n\n30\n\n​\n\n \n\n18\n\n​\n\nNon-voting common stock, $.001 par value; 600,000 shares authorized, 333,120 shares issued and outstanding at March 31, 2026; 600,000 shares authorized, 508,475 shares issued and outstanding at March 31, 2025\n\n​\n\n​\n\n1\n\n​\n\n​\n\n1\n\n​\n\nAdditional paid-in capital\n\n​\n\n \n\n930,234\n\n​\n\n \n\n955,407\n\n​\n\nAccumulated deficit\n\n​\n\n \n\n(974,175)\n\n​\n\n \n\n(977,000)\n\n​\n\nTreasury stock, at cost; 269,603 shares at March 31, 2026 and 57,202 shares at March 31, 2025\n\n​\n\n \n\n(557)\n\n​\n\n \n\n(46)\n\n​\n\nTotal stockholders’ deficit\n\n​\n\n \n\n(44,467)\n\n​\n\n \n\n(21,620)\n\n​\n\nTotal liabilities, temporary equity and stockholders' deficit\n\n​\n\n$\n\n111,450\n\n​\n\n$\n\n74,864\n\n​\n\nSee accompanying notes to consolidated financial statements.\n\nF-5\n\n[Table of Contents](#TOC)\n\n**CAPSTONE ENERGY+, INC. AND SUBSIDIARIES**\n\n**CONSOLIDATED STATEMENTS OF OPERATIONS**\n\n**(In thousands, except per share amounts)**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended March 31,**\n\n​\n\n \n\n**2026**\n\n​\n\n**2025**\n\nRevenue, net:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nProduct and accessories\n\n​\n\n$\n\n56,949\n\n  ​ ​ ​\n\n$\n\n40,281\n\nParts and service\n\n​\n\n​\n\n33,200\n\n​\n\n​\n\n30,877\n\nRentals\n\n​\n\n​\n\n15,855\n\n​\n\n​\n\n14,406\n\nTotal revenue, net\n\n​\n\n​\n\n106,004\n\n​\n\n​\n\n85,564\n\nCost of goods sold:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nProduct and accessories\n\n​\n\n​\n\n51,500\n\n​\n\n​\n\n39,191\n\nParts and service\n\n​\n\n​\n\n11,806\n\n​\n\n​\n\n13,669\n\nRentals\n\n​\n\n​\n\n8,827\n\n​\n\n​\n\n9,406\n\nTotal cost of goods sold\n\n​\n\n \n\n72,133\n\n​\n\n \n\n62,266\n\nGross profit\n\n​\n\n \n\n33,871\n\n​\n\n \n\n23,298\n\nOperating expenses:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nResearch and development\n\n​\n\n \n\n3,621\n\n​\n\n \n\n2,667\n\nSelling, general and administrative\n\n​\n\n \n\n26,858\n\n​\n\n \n\n26,205\n\nTotal operating expenses\n\n​\n\n \n\n30,479\n\n​\n\n \n\n28,872\n\nIncome (loss) from operations\n\n​\n\n \n\n3,392\n\n​\n\n \n\n(5,574)\n\nOther income\n\n​\n\n \n\n3,284\n\n​\n\n \n\n2,317\n\nInterest income\n\n​\n\n \n\n242\n\n​\n\n \n\n186\n\nInterest expense\n\n​\n\n \n\n(4,147)\n\n​\n\n \n\n(3,944)\n\nIncome (loss) before provision for income taxes\n\n​\n\n \n\n2,771\n\n​\n\n \n\n(7,015)\n\nProvision (benefit) for income taxes\n\n​\n\n \n\n(54)\n\n​\n\n \n\n175\n\nNet income (loss)\n\n​\n\n​\n\n2,825\n\n​\n\n​\n\n(7,190)\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nNet loss per share of common stock and non-voting common stock—basic and diluted\n\n​\n\n$\n\n(3.21)\n\n​\n\n$\n\n(0.38)\n\nWeighted average shares used to calculate basic and diluted net income (loss) per common stock and non-voting common stock\n\n​\n\n \n\n20,833\n\n​\n\n \n\n19,056\n\n​\n\nSee accompanying notes to consolidated financial statements.\n\n​\n\n​\n\n​\n\nF-6\n\n[Table of Contents](#TOC)\n\n​\n\n**CAPSTONE ENERGY+, INC. AND SUBSIDIARIES**\n\n**CONSOLIDATED STATEMENTS OF TEMPORARY EQUITY AND STOCKHOLDERS’ DEFICIT**\n\n**(In thousands, except share amounts)**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Temporary Equity**\n\n​\n\n**Permanent Equity**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Redeemable**\n\n​\n\n**Redeemable**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Non-Voting**\n\n​\n\n**Additional**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Total**\n\n​\n\n​\n\n**Noncontrolling Interest**\n\n​\n\n**Preferred Stock**\n\n​\n\n**Common Stock**\n\n​\n\n**Common Stock**\n\n​\n\n**Paid-in**\n\n​\n\n**Accumulated**\n\n​\n\n​\n\n**Treasury Stock**\n\n​\n\n**Stockholders’**\n\n​\n\n  ​\n\n**Shares**\n\n  ​\n\n**Amount**\n\n​\n\n**Shares**\n\n  ​\n\n**Amount**\n\n  ​\n\n**Shares**\n\n  ​\n\n**Amount**\n\n  ​\n\n**Shares**\n\n  ​\n\n**Amount**\n\n  ​\n\n**Capital**\n\n  ​\n\n**Deficit**\n\n  ​\n\n**Amount**\n\n​\n\n**Deficit**\n\nBalance, April 1, 2024\n\n​\n\n10,449,863\n\n​\n\n$\n\n13,859\n\n​\n\n—\n\n​\n\n$\n\n—\n\n​\n\n18,540,789\n\n​\n\n$\n\n18\n\n​\n\n508,475\n\n​\n\n$\n\n1\n\n​\n\n$\n\n955,145\n\n​\n\n$\n\n(969,810)\n\n** **\n\n$\n\n—\n\n​\n\n$\n\n(14,646)\n\nPurchase of treasury stock\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n(57,202)\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n \n\n—\n\n​\n\n \n\n—\n\n \n\n \n\n(46)\n\n​\n\n \n\n(46)\n\nVested restricted stock units\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n160,000\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n \n\n \n\n—\n\n​\n\n​\n\n—\n\nStock-based compensation\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n262\n\n​\n\n​\n\n—\n\n \n\n \n\n—\n\n​\n\n​\n\n262\n\nNet loss\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n(7,190)\n\n \n\n \n\n—\n\n​\n\n​\n\n(7,190)\n\nBalance, March 31, 2025\n\n​\n\n10,449,863\n\n​\n\n​\n\n13,859\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n18,643,587\n\n​\n\n​\n\n18\n\n​\n\n508,475\n\n​\n\n​\n\n1\n\n​\n\n​\n\n955,407\n\n​\n\n​\n\n(977,000)\n\n \n\n​\n\n(46)\n\n​\n\n​\n\n(21,620)\n\nPurchase of treasury stock\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n(212,401)\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n \n\n \n\n(511)\n\n​\n\n​\n\n(511)\n\nVested restricted stock units\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n654,849\n\n​\n\n​\n\n1\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n \n\n \n\n—\n\n​\n\n​\n\n1\n\nNet proceeds from the issuance of common stock\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n10,902,223\n\n​\n\n​\n\n11\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n36,007\n\n​\n\n​\n\n—\n\n \n\n \n\n—\n\n​\n\n​\n\n36,018\n\nIssuance of prefunded warrants\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n7,638\n\n​\n\n​\n\n—\n\n \n\n \n\n—\n\n​\n\n​\n\n7,638\n\nStock-based compensation\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n788\n\n​\n\n​\n\n—\n\n \n\n \n\n—\n\n​\n\n​\n\n788\n\nSettlement of redeemable noncontrolling interests\n\n​\n\n(10,449,863)\n\n​\n\n​\n\n(83,465)\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\nIssuance of redeemable preferred stock\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n80,000\n\n​\n\n​\n\n73,936\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\nConversion of non-voting common stock to voting common stock\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n175,355\n\n​\n\n​\n\n—\n\n​\n\n(175,355)\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\nAccretion to redemption value of redeemable equity\n\n​\n\n—\n\n​\n\n​\n\n69,606\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n(69,606)\n\n​\n\n​\n\n—\n\n \n\n \n\n—\n\n​\n\n​\n\n(69,606)\n\nNet income\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n2,825\n\n \n\n \n\n—\n\n​\n\n​\n\n2,825\n\nBalance, March 31, 2026\n\n​\n\n—\n\n​\n\n$\n\n—\n\n​\n\n80,000\n\n​\n\n$\n\n73,936\n\n​\n\n30,163,613\n\n​\n\n$\n\n30\n\n​\n\n333,120\n\n​\n\n$\n\n1\n\n​\n\n$\n\n930,234\n\n​\n\n$\n\n(974,175)\n\n \n\n$\n\n(557)\n\n​\n\n$\n\n(44,467)\n\n​\n\n(1)The common stock par value in total does not change the total common stock par value presented in thousands.\n\n​\n\nSee accompanying notes to consolidated financial statements.\n\n​\n\n​\n\n​\n\nF-7\n\n[Table of Contents](#TOC)\n\n**CAPSTONE ENERGY+, INC. AND SUBSIDIARIES**\n\n**CONSOLIDATED STATEMENTS OF CASH FLOWS**\n\n**(In thousands)**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended March 31,**\n\n​\n\n​\n\n**2026**\n\n​\n\n**2025**\n\n**Cash Flows from Operating Activities:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nNet income (loss)\n\n​\n\n$\n\n2,825\n\n​\n\n$\n\n(7,190)\n\nAdjustments to reconcile net income (loss) to net cash used in operating activities:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nDepreciation and amortization\n\n​\n\n \n\n4,281\n\n​\n\n​\n\n3,858\n\nAmortization of financing costs and discounts\n\n​\n\n \n\n105\n\n​\n\n​\n\n71\n\nPaid-in-kind interest expense\n\n​\n\n​\n\n1,365\n\n​\n\n​\n\n3,199\n\nInterest related to deferred acquisition costs\n\n​\n\n​\n\n229\n\n​\n\n​\n\n—\n\nNon-cash lease expense\n\n​\n\n​\n\n2,862\n\n​\n\n​\n\n3,996\n\nProvision for credit loss expense\n\n​\n\n \n\n151\n\n​\n\n​\n\n823\n\nInventory write-down\n\n​\n\n \n\n480\n\n​\n\n​\n\n900\n\nProvision (benefit) for warranty expenses\n\n​\n\n \n\n195\n\n​\n\n​\n\n(184)\n\nLoss on disposal of equipment\n\n​\n\n \n\n—\n\n​\n\n​\n\n67\n\nStock-based compensation (excludes $11 thousand recorded directly to equity; see Note 14)\n\n​\n\n \n\n777\n\n​\n\n​\n\n262\n\nChanges in operating assets and liabilities:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nAccounts receivable\n\n​\n\n \n\n(7,051)\n\n​\n\n​\n\n(2,083)\n\nInventories\n\n​\n\n \n\n(4,150)\n\n​\n\n​\n\n7,628\n\nLease receivable\n\n​\n\n​\n\n(591)\n\n​\n\n​\n\n(1,288)\n\nPrepaid expenses, other current assets and other assets\n\n​\n\n \n\n149\n\n​\n\n​\n\n2,128\n\nAccounts payable\n\n​\n\n \n\n5,173\n\n​\n\n​\n\n(1,002)\n\nAccrued expenses\n\n​\n\n​\n\n1,810\n\n​\n\n​\n\n(268)\n\nOperating lease liability, net\n\n​\n\n​\n\n(2,972)\n\n​\n\n​\n\n(4,041)\n\nAccrued salaries and wages and long-term liabilities\n\n​\n\n \n\n(332)\n\n​\n\n​\n\n(94)\n\nAccrued warranty reserve\n\n​\n\n \n\n(294)\n\n​\n\n​\n\n(183)\n\nDeferred revenue\n\n​\n\n \n\n138\n\n​\n\n​\n\n2,092\n\nDeposits\n\n​\n\n​\n\n(6,121)\n\n​\n\n​\n\n—\n\nFactory protection plan liability\n\n​\n\n​\n\n(1,558)\n\n​\n\n​\n\n(1,003)\n\nNet cash (used in) provided by operating activities\n\n​\n\n \n\n(2,529)\n\n​\n\n \n\n7,688\n\n**Cash Flows from Investing Activities:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nCash acquired in acquisitions, net of cash paid\n\n​\n\n​\n\n410\n\n​\n\n​\n\n—\n\nPayment of deferred acquisition costs\n\n​\n\n​\n\n(500)\n\n​\n\n​\n\n—\n\nExpenditures for property, plant, equipment and rental assets\n\n​\n\n \n\n(835)\n\n​\n\n​\n\n(879)\n\nNet cash used in investing activities\n\n​\n\n \n\n(925)\n\n​\n\n \n\n(879)\n\n**Cash Flows from Financing Activities:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nProceeds from the issuance of common stock and warrants\n\n​\n\n​\n\n43,660\n\n​\n\n​\n\n—\n\nShares withheld related to employee tax withholding obligations\n\n​\n\n​\n\n(512)\n\n​\n\n​\n\n—\n\nPayment of Exit Note, net\n\n​\n\n​\n\n(8,331)\n\n​\n\n​\n\n—\n\nSettlement of redeemable noncontrolling interests\n\n​\n\n​\n\n(83,465)\n\n​\n\n​\n\n—\n\nIssuance of new redeemable preferred stock\n\n​\n\n​\n\n73,936\n\n​\n\n​\n\n—\n\nRepayment of finance lease obligations\n\n​\n\n \n\n(1,611)\n\n​\n\n​\n\n(223)\n\nNet cash provided by (used in) financing activities\n\n​\n\n \n\n23,677\n\n​\n\n \n\n(223)\n\nNet increase in cash, cash equivalents, and restricted cash\n\n​\n\n \n\n20,223\n\n​\n\n \n\n6,586\n\nCash, cash equivalents, and restricted cash, Beginning of Period\n\n​\n\n \n\n8,671\n\n​\n\n \n\n2,085\n\nCash, cash equivalents, and restricted cash, End of Period\n\n​\n\n$\n\n28,894\n\n​\n\n$\n\n8,671\n\n**Supplemental Disclosures of Cash Flow Information:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nCash paid during the period for:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nInterest\n\n​\n\n$\n\n2,369\n\n​\n\n$\n\n533\n\nIncome taxes\n\n​\n\n$\n\n101\n\n​\n\n$\n\n126\n\n**Supplemental Disclosures of Non-Cash Information:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nRight-of-use assets obtained in exchange for operating lease obligations\n\n​\n\n$\n\n4,729\n\n​\n\n$\n\n—\n\nRight-of-use assets obtained in exchange for finance lease obligations\n\n​\n\n$\n\n1,101\n\n​\n\n$\n\n—\n\nSettlement of lease obligations with accounts receivable due\n\n​\n\n$\n\n360\n\n​\n\n$\n\n775\n\nRental assets transferred to inventory\n\n​\n\n$\n\n—\n\n​\n\n$\n\n3,067\n\nSales-type lease\n\n​\n\n$\n\n333\n\n​\n\n$\n\n981\n\nOperating lease modified to finance lease\n\n​\n\n$\n\n614\n\n​\n\n$\n\n—\n\nAccounts payable negotiated in lease modification\n\n​\n\n$\n\n1,289\n\n​\n\n$\n\n—\n\nAcquisition of treasury stock by incurring a liability\n\n​\n\n$\n\n—\n\n​\n\n$\n\n46\n\nSee accompanying notes to consolidated financial statements.\n\nF-8\n\n[Table of Contents](#TOC)\n\n**CAPSTONE ENERGY+, INC. AND SUBSIDIARIES**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n**1.****Business and Organization**\n\nCapstone Energy+, Inc. (the “Company”), formerly known as Capstone Green Energy Holdings, Inc., the public successor to Capstone Green Energy Corporation, together with its consolidated operating subsidiary Capstone Green Energy LLC (the “Operating Subsidiary”) is a provider of behind-the-meter clean microturbine energy solutions for industrial and commercial operations, with solutions designed for the next generation of artificial intelligence (\"AI\") and data center applications. The Company addresses the \"Energy Trilemma\" facing today's commercial, industrial, and utility customers: the simultaneous need for resiliency, affordability, and sustainability.\n\nEffective April 30, 2026, the Company changed its name from Capstone Green Energy Holdings, Inc. to Capstone Energy+, Inc.\n\nThe Company’s offerings include stationary distributed power generation and energy distribution solutions, including cogeneration systems such as combined heat and power (“CHP”), integrated combined heat and power (“ICHP”), and combined cooling, heat and power (“CCHP”), as well as solutions for renewable energy, natural resources, and critical power supply applications. The Company’s inverter-based technologies enable operation in parallel with the electric grid or in island mode within localized microgrids and serves as the stabilizing backbone for microgrid installations integrating renewables, battery energy storage, and other distributed energy resources.\n\nThe Company’s energy conversion products business line is driven by its industry-leading, highly efficient, low-emission and resilient microturbine energy systems, which offer scalable configurations and customer-tailored solutions ranging from 65 kilowatts to multiple megawatts. The Company is also actively developing energy solutions purpose-built for AI and data center applications, including an 800-volt direct-current (\"VDC\") microturbine solution designed to interface directly with next-generation AI chip architectures, and its Energy Surplus Program (\"ESP\"), an integrated architecture purpose-built for the high-density, mission-critical power demands of modern AI workloads.\n\nThrough its EaaS business line, the Company provides Build, Own, Operate and Maintain (“BOOM”) and energy rental solutions, as well as power purchase agreements (\"PPA\") and lease-to-own structures, utilizing its microturbine energy systems. The Company also offers long-term maintenance agreements (\"LTMAs\") covering planned and unplanned maintenance to protect customers' total cost of ownership and ensure maximum system availability, with access to Original Equipment Manufacturer (\"OEM\") parts.\n\nAs a result of past delays in filing the Company’s periodic reports with the Securities Exchange Commission (the “SEC”) and the requirements relating to Market Value of Listed Securities (“MVLS”), the Company was unable to comply with the Nasdaq listing standards, and as a result, the Company’s common stock was suspended from trading on the Nasdaq Capital Market effective October 5, 2023 and formally delisted effective October 23, 2023. Following completion of the financial statement restatements for Fiscal 2022 and 2023 and completion of the filings for Fiscal 2024, the Company became current with all periodic filings with the SEC. Effective January 2, 2025, the Company’s common stock began trading on the over-the-counter market (“OTC”). On September 26, 2025, the Company’s common stock was approved for quotation on the OTCQX Best Market, under the symbol “CGEH.”\n\nAll references in these footnotes to “the Company,” “we,” “us,” “our,” or “Capstone” are to Capstone Energy+, Inc. and its consolidated subsidiaries.\n\n \n\n​\n\n**2. Basis of Presentation and Significant Accounting Policies**\n\nThese Consolidated Financial Statements refer to the Company’s fiscal years ended March 31 as its “Fiscal” year.\n\nBasis of Presentation The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). The Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in\n\nF-9\n\n[Table of Contents](#TOC)\n\nconsolidation. The fiscal years presented herein are the years ended March 31, 2026, and March 31, 2025. In the opinion of management, the Consolidated Financial Statements reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the Company’s financial position as of March 31, 2026 and 2025, and the results of its operations and its cash flows for the years then ended.\n\nThe preparation of Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements, as well as the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.\n\nBasis for Consolidation The Consolidated Financial Statements included in this filing include the accounts of the Company, the Operating Subsidiary and Capstone Turbine Financial Services, LLC, its wholly owned subsidiary that was formed in October 2015, and Cal Microturbine LLC (“Cal Microturbine”) after elimination of inter-company transactions.\n\nBusiness Combinations The Company accounts for business combinations using the acquisition method in accordance with ASC Topic 805, *Business Combinations*. Under this method, the total purchase consideration is measured at fair value on the acquisition date, and identifiable assets acquired and liabilities assumed are recognized at their estimated fair values as of that date. The excess of purchase consideration over the fair value of net identifiable assets acquired is recorded as goodwill. If the fair value of net identifiable assets acquired exceeds the purchase consideration, the resulting gain is recognized in earnings on the acquisition date. Acquisition-related costs, including advisory, legal, and other professional fees, are expensed as incurred and recorded within selling, general and administrative expenses in the Consolidated Statements of Operations.\n\nFor transactions that do not meet the definition of a business under ASC 805, the Company applies asset acquisition accounting, under which the total purchase consideration, including assumed liabilities, is allocated to the assets acquired on a relative fair value basis. No goodwill is recognized in an asset acquisition.\n\nThe operating results of acquired businesses are included in the Company's Consolidated Statements of Operations from the acquisition date. The determination of fair values of assets acquired and liabilities assumed requires management to make significant estimates and assumptions, particularly with respect to intangible assets. The Company may adjust the preliminary purchase price allocation during the measurement period, which may not exceed one year from the acquisition date, as additional information becomes available. Refer to Note 20 – Business Combinations for information regarding the Company's acquisitions completed during Fiscal 2026.\n\nNoncontrolling Interests in Consolidated Operating Subsidiary**Noncontrolling interests in the Company’s consolidated operating subsidiary represented the equity interests held by a related party. These interests were redeemable and were therefore presented as temporary equity in the Company’s Consolidated Balance Sheets. See Note 13 – Temporary Equity and Note 12 – Commitments and Contingencies, Related Party Transactions for additional information.\n\nThe Company uses the hypothetical liquidation at book value (“HLBV”) method to attribute the earnings of the consolidated Operating Subsidiary between the controlling and noncontrolling interests. Under this method, amounts reported as noncontrolling interests in the consolidated Operating Subsidiary on the Consolidated Balance Sheets represent the amounts the noncontrolling interest holders would hypothetically receive at each balance sheet date under the liquidation provisions of the governing agreements, assuming net assets were liquidated at recorded amounts and distributed in accordance with the governing documents. Net income attributable to noncontrolling interests reflected the change in the noncontrolling interest holders' contractual claims between the beginning and end of the reporting period, assuming hypothetical liquidation at each date, after removing the impact of any contributions or distributions. The Company separately remeasured and adjusted the noncontrolling interest to reflect changes in the redemption value of the Preferred Units, with an offsetting adjustment to retained earnings at the end of each period. Refer to Note 13 – Temporary Equity for further details.\n\nFor the fiscal year ended March 31, 2026, the Company reported a net gain; accordingly, net income was allocated between the controlling and noncontrolling interests pursuant to the HLBV method based on the change in the respective holders' contractual claims on the net assets of the consolidated Operating Subsidiary. The allocation reflected the contractual provisions of the governing agreements, including the liquidation preference of the noncontrolling interest\n\nF-10\n\n[Table of Contents](#TOC)\n\nholders. As a result, the amount of net income attributable to noncontrolling interests may differ from the noncontrolling interests' proportionate ownership percentage. For the fiscal year ended March 31, 2025, the Company reported a net loss; accordingly, no allocation of losses was made to the noncontrolling interests, as the holders' contractual liquidation preference protects them from absorbing losses.\n\nReclassification Certain prior period amounts have been reclassified to conform to the current year presentation for comparability purposes. Such reclassifications had no effect on previously reported results of operations or financial position.\n\nCash, Cash Equivalents and Restricted Cash Cash and cash equivalents include cash on hand and highly liquid investments with original maturities of three months or less at the time of purchase. The Company maintains cash balances at financial institutions which, at times, may exceed federally insured limits.\n\nThe following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets to the total amounts presented in the Consolidated Statements of Cash Flows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**March 31,**\n\n​\n\n**March 31,**\n\n​\n\n**  ​ ​ ​**\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\nCash and cash equivalents\n\n​\n\n$\n\n28,179\n\n​\n\n$\n\n8,671\n\nRestricted cash\n\n​\n\n​\n\n715\n\n​\n\n​\n\n—\n\nTotal cash and cash equivalents\n\n​\n\n$\n\n28,894\n\n​\n\n$\n\n8,671\n\n \n\n \n\nRestricted cash represents amounts deposited with the Registry of the Court in connection with ongoing litigation, which are held as security pending resolution of the matter and are not available for operational use. See Note 12 - Commitments and Contingencies for more information on the ongoing litigation.\n\nFair 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. Refer to Note 9 – Fair Value Measurements, for disclosure regarding the fair value of other financial instruments.\n\nAccounts Receivable and Allowance for Credit Losses Accounts receivable are presented on the Consolidated Balance Sheets, net of estimated credit losses. The Company applies the aging method by pooling receivables based on levels of delinquency and applying historical loss rates on what has been historically uncollectible by aging categories. The historical loss rate is adjusted for current conditions and reasonable and supportable forecasts of future losses, as necessary. Additionally, the allowance for credit loss calculation includes subjective adjustments for qualitative risk* *factors that could likely cause estimated credit losses to differ from historical experience. The factors include assessments of various economic conditions, significant events that have or will occur, geographic location, size, and credit ratings of the customers. The Company may also record a specific reserve for individual accounts when the Company becomes aware of specific customer circumstances, such as in the case of a bankruptcy filing or deterioration in the customer’s operating results or financial position. Accounts deemed uncollectible are written off against the allowance for credit loss. Refer to Note 4 – Customer Concentrations and Accounts Receivable for disclosure regarding the change in allowance for expected credit loss.\n\nInventories The Company values inventories at the lower of cost (determined on a first in, first out (“FIFO”) basis) or net realizable value. The composition of inventory is routinely evaluated to identify slow-moving, excess, obsolete or otherwise impaired items, which are assessed for potential write-down, including consideration of engineering changes to the Company's products. Inventories expected to be used beyond one year are classified as long-term.\n\nDepreciation and Amortization Depreciation and amortization are recognized using the straight-line method over estimated useful lives ranging from two to ten years. Leasehold improvements are amortized over the shorter of the remaining lease term or the estimated useful life of the asset. Finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives. Refer to Note 8 – Intangible Assets for amortization information.\n\nLong-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\n\nF-11\n\n[Table of Contents](#TOC)\n\nrecoverable. 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.\n\nResidual Assets The Company estimates the residual asset as the amount expected to be derived from the underlying asset following the end of the lease term. In a sales-type lease, the unguaranteed residual asset is recognized on a discounted basis upon lease commencement. Residual values are evaluated for impairment quarterly, and impairments are recognized as incurred.\n\nDeferred Revenue Deferred revenue consists of deferred product, service revenue and customer deposits, and is 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.\n\nTemporary Equity Common or preferred shares that are conditionally redeemable upon the occurrence of events not solely within the Company's control are classified outside of permanent equity as temporary equity (\"mezzanine equity\"). This classification conveys that such securities may not be permanently part of equity and could result in a future demand for cash or other assets. Where redemption of such shares becomes probable, the Company adjusts the carrying value to reflect the maximum redemption value at the end of the reporting period.\n\nRevenue The Company derives its revenues primarily from the sale of microturbine products, accessories, parts, equipment rentals, and services.\n\nRevenue is recognized in accordance with the following five-step model under ASC 606:\n\n●Identification of the contract(s) with a customer\n\n●Identification of the performance obligations in the contract\n\n●Determination of the transaction price\n\n●Allocation of the transaction price to the performance obligations\n\n●Recognition of revenue when, or as, each performance obligation is satisfied.\n\n*Microturbine Products* Revenue from microturbine product sales is recognized at the point in time when control transfers to the customer in accordance with contractual terms, which is generally upon shipment. The Company occasionally enters into bill-and-hold arrangements, which are recognized as revenue only when all required criteria are met: (i) the reason for the arrangement is substantive; (ii) the product is segregated from other inventory; (iii) the product is ready for shipment; and (iv) the Company cannot redirect the product to another customer.\n\nCustomer deposits representing advance payments are typically received for a substantial portion of contract value prior to shipment and are not considered a significant financing component, as they are generally received less than one year before the related performance obligations are satisfied. Standard payment terms are 0 to 60 days, with extensions beyond 60 days granted only on a limited basis.\n\n*Accessories and Parts* Revenue from accessories and parts is recognized at the point in time when control transfers to the customer, generally upon shipment.\n\n*Warranty Services* The Company provides standard (assurance) warranties which do not represent separate performance obligations and are reflected as product liability. Shipping and handling costs billed to customers are included in revenue; costs associated with outbound freight after control transfers are recorded as fulfillment costs in cost of goods sold. Sales and usage-based taxes are excluded from revenue.\n\n*Factory Protection Plan (“FPP”), Long Term Maintenance Agreements (“LTMA”) and Service Cost Reimbursement* The Company is transitioning from its Factory Protection Plan to Long-Term Maintenance Agreements. Both programs are designed to minimize product downtime and provide predictable maintenance costs. Revenue related to the obligation to provide replacement parts is recognized over the term of the contract aligned to monthly service periods. LTMA contracts typically range from four to twelve years and are cancellable at any time. Related costs are accrued when a customer submits a qualifying claim, based on the Company's best estimate of the probable obligation.\n\nF-12\n\n[Table of Contents](#TOC)\n\nLTMA contracts cover critical components including engine, fuel, and electronic components, and include an annual escalator but exclude freight and labor reimbursement. Advance payments received at contract inception are classified as deferred revenue and recognized on a straight-line basis over the contract term. These advance payments are not considered a significant financing component.\n\nRemaining FPP contracts may include labor reimbursements for work performed by Authorized Service Providers (\"ASPs\"). These reimbursements are accounted for under ASC 460 and recognized as contra revenue under ASC 606. The labor reimbursement is treated as a distinct performance obligation, with a portion of the transaction price allocated based on relative standalone selling price (\"SSP\"). A liability is recognized at contract inception for the labor component, with income recognized on a straight-line basis and reimbursement costs expensed as incurred.\n\n*Rentals* The Company accounts for customer leases under lessor accounting guidance in ASC 842, utilizing a portfolio approach for similar assets leased to a single customer. Leases are classified as either sales-type or operating leases based on whether one of the five ASC 842 classification criteria are met.\n\nFor sales-type leases, the Company recognizes at commencement a lease receivable (equal to the present value of lease payments) and a residual asset, with revenue recognized in the amount of the lease receivable as part of Product and Accessories revenue, and cost of sales equal to the carrying value of the underlying asset less the unguaranteed residual asset. Subsequent to commencement, interest income is recognized using the effective interest method.\n\nFor operating leases, the underlying asset is recorded as a rental lease asset and depreciated on a straight-line basis to its estimated residual value. Lease payments are recognized as Rental Revenue on a straight-line basis over the lease term.\n\nContracts with Multiple Performance Obligations Contracts with customers often include promises to transfer multiple products, parts, accessories, and services. The Company evaluates whether each promised good or service is distinct and should be accounted for as a separate performance obligation, which may require significant judgment. Products, parts, and accessories are generally sold separately and are therefore considered distinct. Service contracts, including FPP and LTMA agreements, are evaluated based on availability from other vendors, the nature of the services, timing relative to product delivery, and contractual dependencies. To date, the Company has concluded that all service contracts within multiple-element arrangements are distinct.\n\nThe transaction price is allocated to each performance obligation based on relative SSP, which the Company determines by considering overall pricing objectives, market conditions, discounting practices, transaction size, customer demographics, geographic factors, price lists, and historical contract data. SSP is established using observable prices where available; otherwise, a range is used based on market conditions and other observable inputs. The Company typically maintains more than one SSP for individual products and services due to stratification by customer size and geography.\n\nUnsatisfied Performance Obligations The Company has elected the practical expedient to disclose unsatisfied performance obligations only for contracts with an original expected duration greater than one year. The majority of product sales have lead times of less than one year and are therefore excluded. Service contracts, while often exceeding one year in duration, are cancellable without significant penalty; accordingly, their enforceable duration is considered one year or less, and they are also excluded from this disclosure.\n\nPractical Expedients For contracts with a duration of one year or less, the Company expenses incremental costs to obtain a contract as incurred. Such costs are recorded within sales and marketing expenses in the Consolidated Statements of Operations.\n\nWarranty The Company accrues estimated warranty costs at the time revenue is recognized. Warranty terms vary by product and geography and generally extend up to 24 months from the delivery date. Key factors in the warranty estimate include product failure rates, anticipated operating hours, and estimated repair or replacement costs. These estimates are updated each period as new information becomes available. The Company may also accrue costs for reliability repairs on out-of-warranty products when, in management's judgment, a specific remediation plan makes such accrual prudent. Warranty liabilities are assessed quarterly and adjusted as necessary, including when product improvements alter historical failure rates.\n\nF-13\n\n[Table of Contents](#TOC)\n\nResearch and Development (“R&D”) The Company accounts for grant distributions and development funding as offsets to R&D expenses and both are recorded as the related costs are incurred in the Company’s statement of operations. There were no offsets to R&D during Fiscal 2026 and 2025.\n\nIncome 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.\n\nASC Topic 740-10, *Income Taxes*(“ASC 740”), clarifies the accounting for uncertainty in income taxes recognized in the financial statements in accordance with U.S. GAAP. Income tax positions must meet a more-likely-than-not recognition threshold to be recognized. Income tax positions that previously failed to meet the more-likely-than-not threshold are recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not threshold are derecognized in the first subsequent financial reporting period in which that threshold is no longer met. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as interest and other expense, net in the Consolidated Statements of Operations.\n\nContingencies 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 Balance Sheet date and the amount of the loss can be reasonably estimated.\n\nRisk Concentrations Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and accounts receivable. At March 31, 2026, the majority of our cash balances were held at financial institutions located in California. The accounts at these institutions are insured by the Federal Deposit Insurance Corporation up to certain limits. Balances that exceed the insurance coverage aggregate to approximately $27.7 million as of March 31, 2026. The Company places its cash with high credit quality institutions. The Company performs ongoing credit evaluations of its customers and maintains an allowance for potential credit losses. See Note 4 – Customer Concentrations and Accounts Receivable for further detail.\n\nCertain 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.\n\nEstimates and Assumptions The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates include accounting for accounts receivable allowances for credit losses, stock-based compensation, inventory write-downs, valuation of equity and long-lived assets including intangible assets with finite lives, product warranties, income taxes, and other contingencies. Actual results could differ from those estimates.\n\nNet Income (Loss) Per Common Share The Company has both common stock and non-voting common stock outstanding. The non-voting common stock has the same economic rights as the common stock; accordingly, earnings per share (“EPS”) is presented on a combined basis. Basic net income (loss) per share is computed using the weighted-average number of common and non-voting common shares outstanding during the period. Diluted net income (loss) per share reflects the potential dilution from common stock equivalents, including stock options, restricted stock units, and warrants, as their inclusion would be anti-dilutive. The carrying value adjustments related to the redeemable noncontrolling interests in the consolidated Operating Subsidiary, including remeasurement of the Preferred Units to their redemption value, are reflected in the calculation of net income (loss) attributable to common stockholders for purposes of computing earnings per share. As a result, for the years ended March 31, 2026, and 2025 basic and diluted weighted-average shares outstanding were the same.\n\nStock-Based Compensation Stock-based awards exchanged for services are accounted for under the fair value method. Accordingly, stock-based compensation cost is measured at the grant date based on the estimated fair value of the award. The expense for awards is recognized over the requisite service period (generally the vesting period of the award). The Company has elected to treat awards with only service conditions and with graded vesting as one award. Consequently,\n\nF-14\n\n[Table of Contents](#TOC)\n\nthe total compensation expense is recognized straight-line over the entire vesting period, so long as the compensation cost recognized at any date at least equals the portion of the grant date fair value of the award that is vested at that date. The Company has elected to account for forfeitures as they occur.\n\nLeases As lessee, the Company classifies lease arrangements as operating or financing leases and records a right-of-use asset and corresponding lease liability on the Consolidated Balance Sheet, measured by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company's incremental borrowing rate. For operating leases, interest on the lease liability and amortization of the right-of-use asset result in straight-line rent expense over the lease term. The Company has elected to (i) combine lease and non-lease components and (ii) exclude short-term leases with initial terms of twelve months or less from balance sheet recognition, with rent expense recorded on a straight-line basis.\n\nAs lessor, financing receivables arising from sales-type leases are recorded separately on the Consolidated Balance Sheets. Lease terms generally range from one to eight years, with most terms between one and two years. Certain agreements provide the lessee with an option to purchase the underlying asset at end of term, including occasional bargain purchase options.\n\nSegment Reporting The Company determines its reporting units in accordance with ASC Topic 280, *Segment Reporting*. The Company's chief operating decision maker (\"CODM\") is the Chief Executive Officer. Based on how the CODM evaluates performance and allocates resources, the Company is considered to operate as a single reportable segment, encompassing the development, manufacture, and sale of turbine generator sets and related parts, services, and rentals.\n\nImpact of Recently Issued Accounting Standards\n\n*Adopted*\n\nIn December 2023, the FASB issued ASU No. 2023-09, Income Taxes: Improvements to Income Tax Disclosures (Topic 740). The standard requires enhanced annual disclosures primarily related to the rate reconciliation and income taxes paid, intended to improve the transparency and decision usefulness of income tax disclosures. The Company adopted this standard for the fiscal year ended March 31, 2026, on a prospective basis. The adoption resulted in enhanced disclosures within Note 18 – Income Taxes. The adoption did not have an impact on the Company's consolidated financial position, results of operations, or cash flows. Prior-period amounts were not recast and continue to be presented in accordance with the accounting standards in effect for those periods.\n\nIn March 2024, the FASB issued ASU No. 2024-01, *Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards*. The amendments clarify the scope of Topic 718 as it relates to profits interest and similar awards. The Company adopted this guidance for the fiscal year ended March 31, 2026. The Company evaluated the impact of this guidance on its stock-based compensation arrangements, including profit unit arrangements associated with noncontrolling interests, and determined that the adoption did not have a material impact on its consolidated financial statements.\n\n*Not Yet Adopted*\n\nIn November 2024, the FASB issued ASU No. 2024-03, *Income Statement (Subtopic 220-40): Disaggregation of Income Statement Expenses*, as subsequently clarified by ASU No. 2025-01. The amendments require disaggregated disclosure of certain income statement expense line items. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements and related disclosures.\n\nIn July 2025, the FASB issued ASU No. 2025-05, *Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets*. The amendments provide an optional practical expedient for estimating expected credit losses on current accounts receivable and contract assets arising from revenue transactions. The guidance is effective for fiscal years beginning after December 15, 2025. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements and related disclosures.\n\nF-15\n\n[Table of Contents](#TOC)\n\nIn 2025, the FASB issued ASU No. 2025-12, *Codification Improvements*. The amendments include clarifications related to diluted earnings per share when a loss from continuing operations exists, disclosure requirements for lease receivables arising from sales-type or direct financing leases, and permissible methods for accounting for treasury stock retirements. The guidance is effective for fiscal years beginning after December 15, 2026. The Company is currently evaluating the impact of this guidance on its consolidated financial statements and related disclosures.\n\nIn April 2026, the FASB issued ASU 2026-01, *Equity (Topic 505): Initial Measurement of Paid-in-Kind Dividends on Equity-Classified Preferred Stock*. The new guidance requires an entity to initially measure paid-in-kind (“PIK”) dividends on equity-classified preferred stock based on the dividend rate stated in the underlying preferred stock agreement. The Company has issued Redeemable Series A Convertible Preferred Stock that accrues PIK dividends. The guidance will apply to the Company’s measurement of such dividends upon adoption. The guidance is effective for the Company for annual reporting periods beginning after December 15, 2026, and interim periods within those annual periods. Early adoption is permitted. The Company is currently evaluating the impact that adoption of this guidance will have on its consolidated financial statements.\n\n \n\n \n\n \n\n​\n\n**3. Revenue Recognition**\n\nThe following table presents disaggregated revenue by business group (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended March 31,**\n\n​\n\n  ​ ​ ​\n\n**2026**\n\n  ​ ​ ​\n\n**2025**\n\nMicroturbine Products\n\n​\n\n$\n\n53,929\n\n​\n\n$\n\n36,732\n\nAccessories\n\n​\n\n​\n\n2,113\n\n​\n\n​\n\n2,240\n\nTotal Product and Accessories\n\n​\n\n​\n\n56,042\n\n​\n\n​\n\n38,972\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nParts and Service\n\n​\n\n​\n\n33,200\n\n​\n\n​\n\n30,877\n\nTotal ASC 606 Revenue\n\n​\n\n​\n\n89,242\n\n​\n\n​\n\n69,849\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nMicroturbine Products\n\n​\n\n​\n\n907\n\n​\n\n​\n\n1,309\n\nRentals\n\n​\n\n \n\n15,855\n\n​\n\n \n\n14,406\n\nTotal ASC 842 Revenue\n\n​\n\n \n\n16,762\n\n​\n\n​\n\n15,715\n\nTotal Revenue\n\n​\n\n$\n\n106,004\n\n​\n\n$\n\n85,564\n\n \n\n \n\nThe following table presents disaggregated revenue by geography based on the primary operating location of the Company’s customers (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended March 31,**\n\n \n\n​\n\n  ​ ​ ​\n\n**2026**\n\n  ​ ​ ​\n\n**2025**\n\n \n\nUnited States\n\n​\n\n$\n\n70,133\n\n​\n\n$\n\n55,732\n\n​\n\nMexico\n\n​\n\n \n\n13,600\n\n​\n\n \n\n2,822\n\n​\n\nAll other North America\n\n​\n\n \n\n506\n\n​\n\n \n\n718\n\n​\n\nTotal North America\n\n​\n\n \n\n84,239\n\n​\n\n \n\n59,272\n\n​\n\nEurope\n\n​\n\n​\n\n9,939\n\n​\n\n​\n\n11,281\n\n​\n\nAsia\n\n​\n\n \n\n3,778\n\n​\n\n \n\n2,248\n\n​\n\nAustralia\n\n​\n\n \n\n1,438\n\n​\n\n \n\n5,843\n\n​\n\nAll other\n\n​\n\n \n\n6,610\n\n​\n\n \n\n6,920\n\n​\n\nTotal Revenue\n\n​\n\n$\n\n106,004\n\n​\n\n$\n\n85,564\n\n​\n\n \n\n \n\nSubstantially all of the Company’s operating assets are in the United States.\n\nF-16\n\n[Table of Contents](#TOC)\n\n**Contract Balances**\n\nThe Company's contract liabilities consist of customer deposits and advance payments received for microturbine products, parts, accessories, and equipment ordered under sales contracts for which the related goods or services have not yet been delivered or performed. Contract liabilities also include advance payments received for service obligations, Factory Protection Plan (\"FPP\") contracts, Long-Term Maintenance Agreements (\"LTMAs\"), and extended warranties. Customer deposits are primarily non-refundable cash payments received from distributors for future orders.\n\nThe current and non-current portions of deferred revenue are presented within Current Liabilities and Long-Term Liabilities, respectively, on the Consolidated Balance Sheets.\n\nChanges in deferred revenue consisted of the following (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**March 31,**\n\n​\n\n**March 31,**\n\n​\n\n​\n\n**2026**\n\n​\n\n**2025**\n\nOpening balance, beginning of the year\n\n​\n\n$\n\n13,949\n\n​\n\n$\n\n11,858\n\nClosing balance, end of the year\n\n​\n\n$\n\n10,688\n\n​\n\n$\n\n13,949\n\nRevenue recognized during the year from:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nAmounts included in deferred revenue at the beginning of the year\n\n​\n\n$\n\n13,286\n\n​\n\n$\n\n10,054\n\n \n\n \n\n*FPP and LTMA Contract Liabilities*\n\nDeferred revenue attributable to FPP and LTMA contracts represents the unearned portion of advance payments received under those agreements. Payments are generally received quarterly in advance, with revenue recognized on a straight-line basis over the applicable contract period. As of March 31, 2026, approximately $6.1 million is expected to be recognized from remaining FPP and LTMA contract liabilities. The Company expects to recognize approximately $5.5 million of these remaining performance obligations over the next 12 months, with the remaining balance of $0.6 million to be recognized thereafter.\n\n*Distributor Support System (\"DSS\") Program*\n\nThe Company’s DSS program provides support for business development activities, including customer lead generation, brand awareness, and tailored marketing services across the Company’s major geographic and vertical markets. Prior to March 31, 2026, these activities were administered through third-party distributors and funded by participating distributors.\n\nEffective March 31, 2026, in connection with the acquisition of CDSS (see Note 20 – Business Combinations), the Company internalized these activities and now performs such services directly.\n\nDSS program fees are generally invoiced and paid quarterly, with revenue recognized on a straight-line basis over the applicable service period, which is typically one year. As of March 31, 2026, approximately $2.0 million is expected to be recognized from remaining DSS contract liabilities. The Company expects to recognize substantially all of these remaining performance obligations within the next 12 months.\n\nRefer to Note 12 – Commitments and Contingencies for information regarding the transition of PrivateCo's distributor services business in connection with the Company's emergence from the Chapter 11 Cases.\n\nF-17\n\n[Table of Contents](#TOC)\n\n**4.** **Customer Concentrations and Accounts** **Receivable**\n\nThe Company recorded credit loss expense of $0.5 million and $0.8 million for the fiscal years ended March 31, 2026 and 2025, respectively. The following table presents the changes in the allowance for expected credit losses for the periods presented (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nBalance, April 1, 2024\n\n​\n\n$\n\n3,287\n\n​\n\nProvision for credit losses\n\n​\n\n \n\n823\n\n​\n\nRecoveries\n\n​\n\n​\n\n31\n\n​\n\nWrite-offs\n\n​\n\n \n\n(3,534)\n\n​\n\nBalance, March 31, 2025\n\n​\n\n$\n\n607\n\n​\n\nProvision for credit losses\n\n​\n\n \n\n524\n\n​\n\nRecoveries\n\n​\n\n​\n\n302\n\n​\n\nWrite-offs\n\n​\n\n \n\n(96)\n\n​\n\nBalance, March 31, 2026\n\n​\n\n$\n\n1,337\n\n​\n\n \n\n \n\n*Revenue Concentrations*\n\nThe Company’s revenue is concentrated among a limited number of distributors. For the year ended March 31, 2026, sales to E-Finity Distributed Generation (“E-Finity”), Cal Microturbine, DTC Soluciones SA de CV (“DTC”), and Lone Star Power Solutions, LLC (“Lone Star”) accounted for approximately 17%, 16%, 13%, and 10% of total revenue, respectively.\n\nOn August 13, 2025, the Company completed its acquisition of Cal Microturbine. See Note 20 - Business Combination for additional information. Cal Microturbine revenue for Fiscal 2026 reflects the period subsequent to acquisition.\n\nFor the year ended March 31, 2025, sales to E-Finity, Lone Star, and Horizon Power Systems accounted for approximately 13%, 12%, and 11% of total revenue, respectively.\n\n*Accounts Receivable Concentrations*\n\nAs of March 31, 2026, E-Finity, Lone Star and RSP Systems accounted for approximately 14%, 14% and 10%, respectively, of total accounts receivable. As of March 31, 2025, Lone Star and Optimal Group Australia accounted for approximately 18% and 10%, respectively, of total accounts receivable.\n\n**5. Inventories**\n\nInventories are valued at the lower of cost (determined on a FIFO basis) or net realizable value and consisted of the following (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**March 31,**\n\n​\n\n**March 31,**\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n** **\n\nRaw materials\n\n​\n\n$\n\n21,015\n\n​\n\n$\n\n19,914\n\n​\n\nWork in process\n\n​\n\n​\n\n1,597\n\n​\n\n \n\n—\n\n​\n\nFinished goods\n\n​\n\n​\n\n2,230\n\n​\n\n​\n\n165\n\n​\n\nTotal\n\n​\n\n​\n\n24,842\n\n​\n\n​\n\n20,079\n\n​\n\nLess: non-current portion\n\n​\n\n​\n\n(2,736)\n\n​\n\n​\n\n(3,464)\n\n​\n\nTotal inventory, net non-current portion\n\n​\n\n$\n\n22,106\n\n​\n\n$\n\n16,615\n\n​\n\n \n\n \n\n \n\nF-18\n\n[Table of Contents](#TOC)\n\nThe non-current portion of inventories represents that portion of inventories in excess of amounts expected to be sold or used in the next twelve months and could include repair parts for older generation products that are still in operation but are not technologically compatible with current configurations. The Company expects to use the non-current portion of the inventories on hand as of March 31, 2026, over the periods presented in the following table (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Non-current Inventory**\n\n​\n\n​\n\n** **\n\n​\n\n**Balance Expected**\n\n​\n\n**Expected Period of Use**\n\n**  ​ ​ ​**\n\n​\n\n**to be Used**\n\n** **\n\n13 to 24 months\n\n​\n\n$\n\n797\n\n​\n\n25 to 36 plus months\n\n​\n\n \n\n1,939\n\n​\n\nTotal\n\n​\n\n$\n\n2,736\n\n​\n\n \n\n \n\n \n\n​\n\n**6. Accrued Warranty Reserve**\n\nThe Company accrues the estimated costs of product warranties at the time the related revenue is recognized. Warranty terms and conditions vary by product and geography; however, the Company's standard product warranties generally commence on the delivery date and extend for up to twenty-four months.\n\nThe Company's warranty obligation is influenced by several key estimates, including product failure rates, anticipated hours of product operation, and the expected costs of repair or replacement necessary to correct product failures. These estimates are reviewed and updated each reporting period as new information becomes available, including field performance data and engineering assessments. When the Company has sufficient evidence that product modifications or design changes are materially affecting historical failure rates, those changes are incorporated prospectively into the warranty liability estimate.\n\nIn addition to standard warranty obligations, the Company may accrue estimated costs for reliability repairs on products that are no longer under warranty. Such accruals are recorded when, in management's judgment, and in accordance with a specific remediation plan approved by the Company, it is prudent to provide such repairs. The adequacy of all recorded warranty liabilities is assessed quarterly, and adjustments are made as warranted by updated estimates or actual claims experience.\n\n​\n\nF-19\n\n[Table of Contents](#TOC)\n\nChanges in the accrued warranty reserve consisted of the following (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**March 31,**\n\n** **\n\n**March 31,**\n\n**  ​ ​ ​**\n\n​\n\n​\n\n**2026**\n\n​\n\n**2025**\n\n​\n\nBalance, beginning of the period\n\n​\n\n$\n\n1,070\n\n​\n\n$\n\n1,437\n\n​\n\nStandard warranty provision\n\n​\n\n \n\n195\n\n​\n\n \n\n(184)\n\n​\n\nDeductions for warranty claims\n\n​\n\n \n\n(294)\n\n​\n\n \n\n(183)\n\n​\n\nBalance, end of the period\n\n​\n\n$\n\n971\n\n​\n\n$\n\n1,070\n\n​\n\n \n\n \n\n \n\n​\n\n**7. Property, Plant, Equipment and Rental Assets**\n\nProperty, plant, equipment and rental assets consisted of the following (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**March 31,**\n\n​\n\n**March 31,**\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n** **\n\nMachinery, equipment, automobiles and furniture\n\n​\n\n$\n\n13,441\n\n​\n\n$\n\n14,467\n\n \n\nLeasehold improvements\n\n​\n\n \n\n8,941\n\n​\n\n \n\n8,919\n\n \n\nMolds and tooling\n\n​\n\n​\n\n3,465\n\n​\n\n​\n\n3,510\n\n​\n\nRental assets\n\n​\n\n​\n\n27,204\n\n​\n\n​\n\n27,963\n\n​\n\nTotal property, plant, equipment and rental assets\n\n​\n\n \n\n53,051\n\n​\n\n \n\n54,859\n\n​\n\nLess: accumulated depreciation\n\n​\n\n \n\n(36,866)\n\n​\n\n \n\n(35,497)\n\n​\n\nTotal property, plant, equipment and rental assets, net\n\n​\n\n$\n\n16,185\n\n​\n\n$\n\n19,362\n\n​\n\n \n\n​\n\nThe Company regularly assesses the useful lives of property and equipment and retires assets no longer in service. Depreciation expense for property, plant, equipment and rental assets was $3.9 million for Fiscal 2026 and 2025, respectively. There was no inventory converted to rental assets during Fiscal 2026 and Fiscal 2025, respectively. There were no direct sales of rental assets sold as product revenue and cost of goods sold in Fiscal 2026. Direct sales of rental assets sold as product revenue and cost of goods sold in Fiscal 2025 had a net book value of $3.1 million. The depreciation expense recorded to cost of sales during Fiscal 2026 and 2025, was $3.7 million, respectively.\n\n \n\n​\n\n**8.** **Intangible Assets**\n\nDuring the year ended March 31, 2026, the Company recognized identifiable intangible assets in connection with two acquisitions: Cal Microturbine which was accounted for as a business combination under ASC 805, and the acquisition of Capstone Distributor Support Services Corporation which was accounted for as an asset acquisition. The acquired intangible assets consist of customer relationships and trademark, respectively. The Company did not have any intangible assets as of March 31, 2025.\n\nThe acquired intangible assets have finite useful lives and are being amortized on a straight-line basis over their estimated useful lives. Amortization expense related to intangible assets was $0.4 million for the year ended March 31, 2026, and no amortization expense was recognized in the year ended March 31, 2025, due to the absence of such assets.\n\nThe recognition and measurement of intangible assets were determined as part of the allocation of the purchase price for each respective acquisition. For the acquisition of Cal Microturbine, intangible assets were recognized and measured in accordance with ASC 805, Business Combinations. For the acquisition of Capstone Distributor Support Services Corporation, intangible assets were recognized and measured in accordance with the asset acquisition framework under ASC 805-50. Additional information regarding the acquisition is included in Note 20 - Business Combinations.\n\nF-20\n\n[Table of Contents](#TOC)\n\nIntangible assets consisted of the following (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**March 31, 2026**\n\n \n\n​\n\n​\n\n**Total**\n\n \n\n​\n\n​\n\n \n\n​\n\n​\n\n \n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Estimated**\n\n \n\n**Intangible**\n\n \n\n​\n\n​\n\n \n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Useful**\n\n \n\n**Assets,**\n\n​\n\n**Accumulated**\n\n​\n\n**Intangible**\n\n​\n\n​\n\n​\n\n**Life**\n\n​\n\n**Gross**\n\n​\n\n**Amortization**\n\n​\n\n**Assets, Net**\n\n** **\n\nCustomer relationships\n\n  ​ ​ ​\n\n6 years\n\n  ​ ​ ​\n\n$\n\n4,376\n\n  ​ ​ ​\n\n$\n\n(411)\n\n  ​ ​ ​\n\n$\n\n3,965\n\n​\n\nTrademark (1)\n\n \n\n10 years\n\n​\n\n \n\n1,581\n\n​\n\n \n\n—\n\n​\n\n \n\n1,581\n\n​\n\nTotal\n\n​\n\n​\n\n​\n\n$\n\n5,957\n\n​\n\n$\n\n(411)\n\n​\n\n$\n\n5,546\n\n​\n\n \n\n(1)The trademark asset was acquired on March 31, 2026 and, accordingly, no amortization was recognized during the year ended March 31, 2026.\n\n \n\n \n\nEstimated future amortization expense for intangible assets as of March 31, 2026 is as follows (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n**Year Ending March 31,**\n\n**  ​ ​ ​**\n\n​\n\n2027\n\n$\n\n890\n\n2028\n\n​\n\n890\n\n2029\n\n​\n\n890\n\n2030\n\n​\n\n890\n\n2031\n\n​\n\n890\n\nThereafter\n\n​\n\n1,096\n\nTotal\n\n$\n\n5,546\n\n \n\n \n\n \n\n​\n\n**9. Fair Value Measurements**\n\nThe FASB has established a framework for measuring fair value using 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:\n\n*Level 1.*  Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets.\n\n*Level 2.*  Inputs to the valuation methodology include:\n\n●Quoted prices for similar assets or liabilities in active markets\n\n●Quoted prices for identical or similar assets or liabilities in inactive markets\n\n●Inputs other than quoted prices that are observable for the asset or liability\n\n●Inputs that are derived principally from or corroborated by observable market data by correlation or other means\n\nIf 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.\n\n*Level 3.*  Inputs to the valuation methodology are unobservable and significant to the fair value measurement.\n\nThe 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 must maximize the use of observable inputs and minimize the use of unobservable inputs.\n\nF-21\n\n[Table of Contents](#TOC)\n\n*Basis for Valuation*\n\nThe carrying amounts reported in the Consolidated Balance Sheets for cash, accounts receivable, and accounts payable approximate fair value due to the short-term nature of these instruments. Financial and nonfinancial assets and liabilities measured at fair value on a recurring basis represent those that are remeasured and reported at fair value at each balance sheet date. The Company's Redeemable non-controlling interest was the only instrument measured at fair value on a recurring basis.\n\nThe fair value of the Redeemable non-controlling interest was estimated using the hypothetical liquidation at book value (\"HLBV\") method, which incorporates significant unobservable inputs. Accordingly, the measurement is classified within Level 3 of the fair value hierarchy for both fiscal years ended March 31, 2026 and March 31, 2025. Under the HLBV method, the fair value represented the amount the Redeemable non-controlling interest holders would hypothetically receive if the net assets of the consolidated Operating Subsidiary were liquidated at recorded amounts and distributed in accordance with the contractual provisions of the governing agreements, including the liquidation preference of the Redeemable non-controlling interest.\n\nThe primary input in the HLBV measurement was the underlying net asset value of the Operating Subsidiary, which reflects the assets, liabilities, and operations of the Operating Subsidiary. The Company's publicly traded common stock (ticker: CGEH, traded on the OTCQX Best Market) was considered in this assessment as the Common Units of the Operating Subsidiary into which the Redeemable non-controlling interest might have converted were economically similar to the shares of CGEH. As CGEH is a holding company with no independent business operations, the value of its shares is derived entirely from the net assets and operations of the Operating Subsidiary. Refer to Note 13 – Temporary Equity for additional information regarding the Redeemable non-controlling interest and its remeasurement. The Redeemable non-controlling interest was fully redeemed on March 31, 2026 as described therein.\n\n \n\n​\n\n**10. Leases**\n\n**Lessor**\n\nThe Company rents microturbine equipment to customers under lease agreements with terms ranging from a few months to ninety-six months. The majority of leases carry an initial term of thirty-six months and may include extension options, which are assessed at lease commencement to determine whether they are reasonably certain of exercise. Certain lease agreements provide the lessee with an option to purchase the underlying asset at the end of the lease term.\n\nMonthly rental payments are fixed. Certain leases also include variable payment components for items such as fuel, excess labor, additional equipment, or technician labor and engineering support. Variable payments are not included in the measurement of the lease receivable and are recognized as revenue in the period earned.\n\nLeases are classified at commencement as either sales-type leases or operating leases in accordance with ASC 842. In connection with its Energy-as-a-Service (\"EaaS\") business, the Company also enters into arrangements under which it rents certain microturbine equipment back from customers and subleases that equipment to end users, as further described in the Lessee section below.\n\n​\n\nF-22\n\n[Table of Contents](#TOC)\n\n**Lessor – Operating Leases**\n\nAt March 31, 2026, the Company's minimum rental revenue expected to be received under operating leases was as follows (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Leased**\n\n​\n\n**Owned and**\n\n​\n\n**Year Ending March 31,**\n\n**  ​ ​ ​**\n\n**Assets**\n\n** **\n\n**Financed Assets**\n\n** **\n\n2027\n\n​\n\n$\n\n2,014\n\n​\n\n$\n\n4,179\n\n​\n\n2028\n\n​\n\n \n\n392\n\n​\n\n \n\n1,211\n\n​\n\n2029\n\n​\n\n \n\n—\n\n​\n\n \n\n29\n\n​\n\nThereafter\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\nTotal minimum rental revenue\n\n​\n\n$\n\n2,406\n\n​\n\n$\n\n5,419\n\n​\n\n \n\n \n\n**Lessor – Sales-Type Leases**\n\nThe profit recognized from sales-type leases at their commencement date was as follows (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended March 31,**\n\n​\n\n**  ​ ​ ​**\n\n**2026**\n\n  ​ ​ ​\n\n**2025**\n\nNet sales\n\n​\n\n$\n\n907\n\n  ​ ​ ​\n\n$\n\n1,309\n\nCost of sales\n\n​\n\n​\n\n266\n\n  ​ ​ ​\n\n​\n\n911\n\nGross profit\n\n​\n\n$\n\n641\n\n  ​ ​ ​\n\n$\n\n398\n\n \n\n \n\n​\n\nAt March 31, 2026, the Company’s future scheduled minimum lease payments to be received from its sales-type leases were as follows (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ending March 31,**\n\n**  ​ ​ ​**\n\n​\n\n​\n\n2027\n\n​\n\n$\n\n507\n\n2028\n\n​\n\n \n\n589\n\n2029\n\n​\n\n \n\n589\n\n2030\n\n​\n\n \n\n345\n\n2031\n\n​\n\n \n\n264\n\nThereafter\n\n​\n\n​\n\n264\n\nTotal minimum lease payments\n\n​\n\n$\n\n2,558\n\nLess: imputed interest\n\n​\n\n​\n\n(555)\n\nPlus: unguaranteed residual value\n\n​\n\n​\n\n242\n\nPresent value of lease receivable\n\n​\n\n$\n\n2,245\n\n \n\n \n\nThe Company recognized $0.2 million and $0.2 million of interest income related to lease receivables in Fiscal 2026 and Fiscal 2025, respectively.\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended March 31,**\n\n​\n\n**2026**\n\n  ​ ​ ​\n\n**2025**\n\nGross receivables\n\n$\n\n2,003\n\n  ​ ​ ​\n\n$\n\n1,209\n\nUnguaranteed residual value\n\n​\n\n242\n\n​\n\n​\n\n79\n\nTotal, net\n\n$\n\n2,245\n\n​\n\n$\n\n1,288\n\nReported as:\n\n​\n\n​\n\n​\n\n​\n\n​\n\nCurrent\n\n​\n\n377\n\n​\n\n​\n\n113\n\nLong-Term\n\n​\n\n1,868\n\n​\n\n​\n\n1,175\n\nTotal, net\n\n$\n\n2,245\n\n  ​ ​ ​\n\n$\n\n1,288\n\n \n\n \n\nF-23\n\n[Table of Contents](#TOC)\n\n**Lessee**\n\nThe Company leases facilities and equipment under various non-cancellable operating and finance leases with expiration dates through fiscal 2037. All leases require the Company to pay maintenance, insurance, and property taxes. Lease agreements for the Company's primary office and manufacturing facilities include rent escalation provisions over the lease term and renewal options for successive five-year periods. Lease expense is recognized on a straight-line basis over the lease term, including any extension periods that are reasonably certain of exercise.\n\n**EaaS Sublease Arrangements**\n\nAs part of its EaaS business, the Company rents used microturbine equipment from customers where that equipment would otherwise not be in use, and subleases that equipment to end users. During Fiscal 2026, the Company did not enter into any new rental agreements under this program, though it modified four existing lease agreements during the year ended March 31, 2026. The existing rental agreements provide the Company an option to extend the lease term; however, as exercise of these options is not considered reasonably certain, they are excluded from the determination of the lease term. There were no new rental agreements under this program in Fiscal 2025 either.\n\nAs of March 31, 2026, lease commitments under EaaS arrangements totaled approximately 18.4 megawatts of microturbine capacity, with an average remaining term of 37 months and a total remaining commitment value of approximately $8.5 million.\n\n**Lease Costs**\n\nThe components of total lease expense were as follows (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended March 31,**\n\n​\n\n**  ​ ​ ​**\n\n**2026**\n\n  ​ ​ ​\n\n**2025**\n\nFinance lease costs (1)\n\n​\n\n$\n\n1,085\n\n  ​ ​ ​\n\n$\n\n719\n\nOperating lease costs\n\n​\n\n​\n\n3,498\n\n  ​ ​ ​\n\n​\n\n5,335\n\nVariable lease costs\n\n​\n\n​\n\n208\n\n​\n\n​\n\n—\n\nTotal lease costs\n\n​\n\n$\n\n4,791\n\n  ​ ​ ​\n\n$\n\n6,054\n\n(1)Finance lease costs include both the amortization of the right-of-use asset and interest expense on the finance lease liability.\n\n \n\n \n\nF-24\n\n[Table of Contents](#TOC)\n\n**Supplemental Balance Sheet Information**\n\nRight-of-use assets and lease liabilities consisted of the following (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**March 31, 2026**\n\n​\n\n**March 31, 2025**\n\nFinance lease right-of-use assets\n\n$\n\n4,789\n\n​\n\n$\n\n3,787\n\nOperating lease right-of-use assets\n\n​\n\n9,859\n\n​\n\n​\n\n8,282\n\nTotal right-of-use assets\n\n$\n\n14,648\n\n​\n\n$\n\n12,069\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nFinance lease liability, current\n\n$\n\n1,520\n\n​\n\n$\n\n2,017\n\nOperating lease liability, current\n\n​\n\n1,862\n\n​\n\n​\n\n3,539\n\nFinance lease liability, non-current\n\n​\n\n991\n\n​\n\n​\n\n248\n\nOperating lease liability, non-current\n\n \n\n8,132\n\n​\n\n \n\n4,988\n\nTotal lease liabilities\n\n$\n\n12,505\n\n​\n\n$\n\n10,792\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Finance leases:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\nWeighted average remaining lease life\n\n \n\n1.70 years\n\n​\n\n \n\n0.42 years\n\nWeighted average discount rate\n\n​\n\n11.77%\n\n​\n\n​\n\n12.81%\n\n**Operating leases:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\nWeighted average remaining lease life\n\n \n\n4.76 years\n\n​\n\n \n\n4.41 years\n\nWeighted average discount rate\n\n​\n\n10.75%\n\n​\n\n​\n\n12.33%\n\n \n\n \n\n**Supplemental Cash Flow Information (in thousands):**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended March 31,**\n\n​\n\n**2026**\n\n​\n\n**2025**\n\nCash paid for amounts included in the measurement of lease liabilities\n\n​\n\n  ​ ​ ​\n\n​\n\nFinance cash flows from finance leases\n\n$\n\n2,014\n\n​\n\n$\n\n222\n\nOperating cash flows from finance leases\n\n$\n\n307\n\n​\n\n$\n\n33\n\nOperating cash flows from operating leases\n\n$\n\n3,679\n\n​\n\n$\n\n5,380\n\nChange in Right-of-use assets obtained in exchange for lease obligations\n\n​\n\n​\n\n​\n\n​\n\n​\n\nFinance leases\n\n$\n\n1,101\n\n​\n\n$\n\n—\n\nOperating leases\n\n$\n\n4,729\n\n​\n\n$\n\n—\n\n \n\n \n\n**Lease Maturity Analysis**\n\nAt March 31, 2026, the Company’s minimum commitments under non-cancelable operating and finance leases were as follows (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Finance**\n\n​\n\n**Operating**\n\n**Year Ending March 31,**\n\n**  ​ ​ ​**\n\n**Leases**\n\n**  ​ ​ ​**\n\n**Leases**\n\n2027\n\n​\n\n$\n\n1,720\n\n​\n\n$\n\n2,692\n\n2028\n\n​\n\n​\n\n868\n\n​\n\n​\n\n3,303\n\n2029\n\n​\n\n \n\n197\n\n​\n\n \n\n3,173\n\n2030\n\n​\n\n \n\n—\n\n​\n\n \n\n1,584\n\n2031\n\n​\n\n \n\n—\n\n​\n\n \n\n781\n\nThereafter\n\n​\n\n​\n\n—\n\n​\n\n​\n\n1,369\n\nTotal lease payments\n\n​\n\n$\n\n2,785\n\n​\n\n$\n\n12,902\n\nLess: imputed interest\n\n​\n\n​\n\n(274)\n\n​\n\n​\n\n(2,908)\n\nPresent value of lease liabilities\n\n​\n\n$\n\n2,511\n\n​\n\n$\n\n9,994\n\n \n\n \n\n \n\nF-25\n\n[Table of Contents](#TOC)\n\n**11. Debt**\n\n*Exit Facility Agreement*\n\nOn December 7, 2023, in connection with the Company's emergence from Chapter 11 bankruptcy, the Company entered into a Note Purchase Agreement (the \"Exit Note Purchase Agreement\") for an aggregate principal amount of $28.1 million, consisting of $21.1 million of Exit Roll Up Notes (including accrued and unpaid interest and commitment fees) and $7.0 million of Exit New Money Notes (together, the \"Exit Notes\"). The Exit Note Purchase Agreement was entered into by and among Capstone Green Energy LLC (the \"Operating Subsidiary\"), as issuer, the Company and Capstone Turbine Financial Services, LLC, as guarantors (the \"Guarantors\"), Capstone Distributor Support Services Corporation (\"CDSS\"), as Purchaser, and Goldman Sachs Specialty Lending Group, L.P. (\"Goldman Sachs\"), as Collateral Agent.\n\nThe Exit Notes bear interest at Adjusted Term SOFR plus 7.00% per annum. A portion of the interest accrues as paid-in-kind (\"PIK\") through the third year following the closing date of December 7, 2023. The Exit Note Purchase Agreement also provided for a $10.0 million uncommitted incremental facility, which remained undrawn as of March 31, 2026.\n\nThe Exit Notes are secured by a lien on substantially all of the present and future property and assets of the Operating Subsidiary and each Guarantor, subject to customary exceptions and exclusions. The Exit Note Purchase Agreement includes customary representations and warranties, affirmative and negative covenants, events of default, and financial covenants with respect to minimum consolidated liquidity and minimum consolidated adjusted EBITDA, as described further below.\n\n**Amendments to the Exit Note Purchase Agreement**\n\n*First Amendment – June 28, 2024*\n\nOn June 28, 2024, the Company entered into the First Amendment to the Exit Note Purchase Agreement, which provided for: (i) modifications to the minimum consolidated adjusted EBITDA covenant to permit adjustment for costs related to the restatement of financial statements, with initial testing deferred to the quarter ended September 30, 2024; (ii) a reduction of the minimum consolidated liquidity covenant to $1.0 million from September 30, 2024 through March 30, 2025, with testing deferred to September 30, 2024; and (iii) an extension of the deadline for delivery of the Company's audited fiscal 2024 financial statements to September 27, 2024, with removal of the requirement that such statements be unqualified as to going concern.\n\n*Second Amendment – August 13, 2025*\n\nOn August 13, 2025, in connection with the Company's acquisition of Cal Microturbine (see Note 20 – Business Combinations), the Company entered into the Consent to Cal Micro Acquisition and Second Amendment to the Exit Note Purchase Agreement. The Second Amendment provided for the Collateral Agent and Purchaser's consent to the Cal Microturbine acquisition and related amendments to accommodate the acquisition within the terms of the Exit Note Purchase Agreement.\n\n*Third Amendment – March 29, 2026*\n\nOn March 29, 2026, the Company entered into the Consent and Third Amendment to the Exit Note Purchase Agreement in connection with the March 2026 PIPE (see Note 15). The Third Amendment provided for the Collateral Agent and Purchaser's consent to the transactions contemplated by the Strategic Investment, including clarifying amendments confirming that the Preferred Stock Investor is a \"Permitted Holder\" and that the Preferred Stock Investment does not constitute a \"Change of Control\" under the Exit Note Purchase Agreement.\n\n**Financial Covenants**\n\nThe Exit Note Purchase Agreement requires the Company to maintain minimum consolidated liquidity and minimum consolidated adjusted EBITDA, tested as described below.\n\nF-26\n\n[Table of Contents](#TOC)\n\n*Minimum Consolidated Liquidity*\n\nThe minimum consolidated liquidity covenant requires the Company and its subsidiaries to maintain a minimum average consolidated liquidity during any seven consecutive day period of no less than:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Period**\n\n​\n\n​\n\n**Minimum Liquidity**\n\n​\n\nSeptember 30, 2024 – March 30, 2025\n\n​\n\n$\n\n1,000,000\n\n​\n\nMarch 31, 2025 – July 30, 2025\n\n​\n\n$\n\n2,500,000\n\n(1)\n\nJuly 31, 2025 – September 29, 2025\n\n​\n\n$\n\n3,000,000\n\n(1)\n\nSeptember 30, 2025 – March 30, 2026\n\n​\n\n$\n\n3,500,000\n\n​\n\nMarch 31, 2026 – December 7, 2026\n\n​\n\n$\n\n4,000,000\n\n​\n\n \n\n(1) On June 23, 2025 the Company received a waiver from Goldman Sachs to defer the increase in the minimum liquidity threshold from $2.5 million to $3.0 million from June 20, 2025 to July 31, 2025.\n\n \n\n \n\n*Minimum Consolidated Adjusted EBITDA*\n\nThe minimum consolidated adjusted EBITDA covenant is tested on the last day of each fiscal quarter, commencing with September 30, 2024, and requires the Company to maintain a minimum trailing four-quarter consolidated adjusted EBITDA (as defined in the Exit Note Purchase Agreement) of no less than:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Fiscal Quarter Ending**\n\n​\n\n​\n\n**Minimum Adjusted EBITDA**\n\nSeptember 30, 2024\n\n​\n\n$\n\n2,500,000\n\nDecember 31, 2024\n\n​\n\n$\n\n4,000,000\n\nMarch 31, 2025\n\n​\n\n$\n\n5,000,000\n\nJune 30, 2025\n\n​\n\n$\n\n5,500,000\n\nSeptember 30, 2025\n\n​\n\n$\n\n6,000,000\n\nDecember 31, 2025\n\n​\n\n$\n\n6,500,000\n\nMarch 31, 2026\n\n​\n\n$\n\n8,000,000\n\nJune 30, 2026\n\n​\n\n$\n\n8,000,000\n\nSeptember 30, 2026\n\n​\n\n$\n\n8,000,000\n\n \n\n \n\nAs of March 31, 2026, the Company was in compliance with all financial covenants under the Exit Note Purchase Agreement.\n\n**Outstanding Balance and Maturity**\n\nAs of March 31, 2026, the outstanding Exit Notes balance was $25.3 million, consisting of Exit Roll Up Notes of $21.1 million and PIK interest of $4.3 million, net of unamortized debt issuance costs of $0.1 million. The Exit New Money Notes matured and were repaid in full on December 7, 2025, using a portion of the net proceeds from the November 2025 PIPE (see Note 15). The Exit Roll Up Notes mature on December 7, 2026. Debt issuance costs are amortized over the term of the respective notes at an effective interest rate of 11.09% as of March 31, 2026.\n\nInterest expense related to the term note payable during Fiscal 2026 and 2025 was $3.5 million and $3.8 million, respectively.\n\n​\n\nF-27\n\n[Table of Contents](#TOC)\n\nThe scheduled maturities of the Company’s long-term debt are as follows as of March 31, 2026 (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ending March 31,**\n\n**  ​ ​ ​**\n\n​\n\n** **\n\n2027\n\n​\n\n$\n\n25,385\n\n​\n\nThereafter\n\n​\n\n​\n\n-\n\n​\n\nTotal principal payments and debt maturities\n\n​\n\n​\n\n25,385\n\n​\n\nLess unamortized issuance costs\n\n​\n\n​\n\n(65)\n\n​\n\nNet principal payments and debt maturities\n\n​\n\n$\n\n25,320\n\n​\n\n \n\n \n\n \n\n​\n\n**12. Commitments and Contingencies**\n\n**Purchase Commitments**\n\nAs of March 31, 2026 the Company had firm commitments to purchase inventories of approximately $49.3 million through Fiscal 2029. 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 inventory.\n\n**Lease Commitments**\n\nRefer to Note 10 – Leases.\n\n**Related Party Transactions**\n\nOn December 7, 2023 (the \"Effective Date\"), in connection with the Company's emergence from Chapter 11 bankruptcy, certain assets of the predecessor entity (\"Reorganized PrivateCo”) including the Company's trademarks and distributor support services business were retained by Reorganized PrivateCo and held by Capstone Distributor Support Services Corporation (\"CDSS\"), an entity controlled by Goldman Sachs. A series of agreements were entered into on the Effective Date governing the relationship between the Company and CDSS, as described below. On March 31, 2026, in connection with the closing of the March 2026 PIPE (see Note 15) the Company completed a series of transactions that substantially unwound these related party arrangements, as further described below.\n\n*Reorganized PrivateCo Services Agreement*\n\nOn the Effective Date, the Operating Subsidiary entered into a Services Agreement with Reorganized PrivateCo (the \"Reorganized PrivateCo Services Agreement\"), pursuant to which Reorganized PrivateCo provided the Operating Subsidiary's distributors, on a subcontracted basis, with certain ongoing and transition services related to Reorganized PrivateCo's distributor support services business. In consideration for these services, Reorganized PrivateCo paid the Operating Subsidiary a service fee equal to 90% of Reorganized PrivateCo's income (as defined in the Reorganized PrivateCo Services Agreement), less itemized expenses incurred and paid in direct support of the Operating Subsidiary's distributors.\n\nThe Company recognized $2.3 million and $2.5 million in other income for DSS service fees for Fiscal 2026 and Fiscal 2025, respectively.\n\nIn connection with the closing of the March 2026 PIPE, the Operating Subsidiary and the Company entered into an Asset Purchase Agreement with CDSS pursuant to which the Operating Subsidiary acquired the Distributor Support Services assets previously held by CDSS for a purchase price of $1.0 million (the \"DSS Asset Acquisition\"). As a result of the DSS Asset Acquisition, the Reorganized PrivateCo Services Agreement was terminated, and the distributor support services business is now fully owned and operated by the Operating Subsidiary. Accordingly, the Reorganized PrivateCo Services Agreement is no longer in effect as of March 31, 2026.\n\nF-28\n\n[Table of Contents](#TOC)\n\n*Trademark License Agreement*\n\nOn the Effective Date, the Company entered into a Trademark License Agreement (the \"Trademark License Agreement\") with Reorganized PrivateCo, as licensor, pursuant to which Reorganized PrivateCo granted the Company a non-exclusive, royalty-bearing, non-transferable, non-sublicensable (except to affiliates), worldwide, perpetual and irrevocable (each subject to the terms of the Trademark License Agreement) license to use the Capstone trademarks solely in connection with the Company's business. In consideration for this license, the Company paid Reorganized PrivateCo an annual royalty of $100,000.\n\nThe Trademark License Agreement included a provision that if Reorganized PrivateCo did not use any of the Capstone trademarks for six consecutive months, those trademarks would be assigned to the Company for no further consideration. Additionally, Reorganized PrivateCo was restricted from assigning the Capstone trademarks to any third party without the Company's prior consent, not to be unreasonably withheld.\n\nIn connection with the DSS Asset Acquisition and the related unwinding of the Reorganized PrivateCo structure, the Trademark License Agreement was superseded, and the Trademarks were acquired by the Company. See Note 8 – Intangible Assets for additional information.\n\n*Services Agreement between the Company and the Operating Subsidiary*\n\nOn the Effective Date, the Company entered into a Services Agreement with the Operating Subsidiary (the \"New Capstone Services Agreement\"), pursuant to which the Company provided certain services to the Operating Subsidiary in its capacity as majority equity holder, and in consideration, the Operating Subsidiary would reimburse the Company for its reasonable audit, board, and executive compensation expenses incurred in connection with being a publicly traded company (the \"New Capstone Services Fee\").\n\nThe New Capstone Services Fee was subject to an annual cap of $2,500,000 per fiscal year, increased on April 1 of each year by the greater of 3.5% or the Consumer Price Index as published by the U.S. Bureau of Labor Statistics as of March 31 of the prior year; provided that the increase effective April 1, 2024 was equal to 1.75%.\n\nFollowing the closing of the March 2026 PIPE and the full redemption of the Preferred Units, Capstone Green Energy LLC became a wholly owned subsidiary of the Company.\n\n*Preferred Unit Redemption*\n\nOn March 31, 2026, the Company redeemed all outstanding Preferred Units for $83.5 million. See Note 13 for additional information regarding the redemption and Note 15 for information on funding.\n\n**Legal Proceedings**\n\n*Capstone Turbine Corporation v. Turbine International, LLC.*\n\nOn February 3, 2020, Capstone Turbine Corporation filed suit against its former distributor, Turbine International, LLC (“Turbine Intl.”), in the Superior Court of California alleging breach of contract relating to the parties’ prior distributor relationship (which terminated at the end of March 2018) and Turbine Intl.’s failure to satisfy its payment obligations under certain financial agreements, namely an accounts receivable agreement and promissory note in favor of Capstone. The Company subsequently modified its complaint to include Turbine Intl. guarantors as defendants. The Company was seeking approximately $4.8 million in compensatory damages, along with injunctive relief and attorney’s fees, interest, and costs. In 2024, the Court ordered default judgments first against Turbine International and then against the other defendants. The default judgement in the amount of approximately $7.3 million, which included pre-judgement interest and costs of the suite, was entered and placed on the docket in June 2025. The Company has prevailed in this proceeding. The ability of Capstone to collect on the judgement is unclear, as the defendants are overseas or without U.S.-based assets, therefor we have not recorded a receivable as of March 31, 2026.\n\nF-29\n\n[Table of Contents](#TOC)\n\n**13. Temporary Equity**\n\n**Overview**\n\nAs of March 31, 2026, the Company's temporary equity consists solely of the Redeemable Series A Convertible Preferred Stock issued on March 31, 2026, in connection with the March 2026 PIPE. The Operating Subsidiary's Redeemable Preferred Units, which had been classified as temporary equity in prior periods, were fully redeemed on March 31, 2026, as described below.\n\n**Part I — Redeemable Preferred Units (Extinguished March 31, 2026)**\n\n**Issuance and Terms**\n\nIn connection with the Company's emergence from Chapter 11 bankruptcy on December 7, 2023 (the \"Effective Date\"), the Operating Subsidiary issued 10,449,863 Preferred Units to Capstone Distributor Support Services Corporation (\"CDSS\"), an entity controlled by Goldman Sachs. The Preferred Units represented an aggregate 37.5% equity ownership interest in the Operating Subsidiary (the \"Aggregate Purchase Price\") and were classified as temporary equity due to their redeemable nature.\n\nThe Preferred Units provided CDSS with the following rights:\n\n●**Redemption right:** At any time during the six-month period following the sixth anniversary of the Effective Date, CDSS could elect to have all, but not less than all, of the then-outstanding Preferred Units redeemed by the Operating Subsidiary.\n\n●**Conversion right:** CDSS had the option to convert all or a portion of the Preferred Units into Operating Subsidiary Common Units at any time without payment of additional consideration, based on the proportion of Preferred Units converted multiplied by 37.5% of the Common Units deemed outstanding, adjusted proportionately for partial conversions.\n\n●**Put option and liquidation preference:** The Preferred Units also provided CDSS with a put option to sell the units back to the Operating Subsidiary and a liquidation preference that protected the holder from absorbing losses.\n\nNone of the Preferred Units were converted into Common Units prior to their redemption.\n\n**Valuation and Measurement**\n\nThe Preferred Units were initially measured at fair value upon issuance using an option-pricing method (\"OPM\") under ASC 480-10-S99-3A, which treats the common and preferred units as call options on the enterprise value of the Operating Subsidiary with exercise prices based on the liquidation preference of the Preferred Units. The enterprise value used in the OPM was the value agreed upon by the parties in connection with the restructuring as approved by the U.S. Bankruptcy Court. The initial fair value was established at $13.9 million.\n\nSubsequent remeasurement of the Preferred Units followed the HLBV method, with the maximum redemption value defined under the Capstone Green Energy LLC Agreement as the greater of (i) the share price of CGEH common stock (if publicly traded), with appropriate adjustments, or (ii) the Aggregate Purchase Price plus declared but unpaid dividends. The carrying value of the Preferred Units was not reduced below the initial recorded value of $13.9 million, consistent with the guidance in ASC 480-10-S99.\n\nF-30\n\n[Table of Contents](#TOC)\n\nFor fiscal years ended March 31, 2026 and March 31, 2025, the Company's common stock was publicly traded on the OTCQX Best Market. As of March 31, 2025, the closing price of CGEH common stock was $0.75 per share. The maximum redemption value as of March 31, 2025 did not exceed the initial fair value of $13.9 million; accordingly, no adjustment to the carrying value was recorded for Fiscal 2025.\n\n**Earnings Allocation**\n\nFor the fiscal year ended March 31, 2026, the Company reported net income of $2.8 million, or $0.14 per basic share. However, net loss attributable to common stockholders was $66.8 million, or $3.21 per basic and diluted share, after deducting a non-cash deemed dividend of $69.6 million representing the accretion of the Operating Subsidiary's Redeemable Preferred Units to their maximum redemption value immediately prior to their full redemption on March 31, 2026. Accordingly, net income was allocated between controlling and noncontrolling interests pursuant to the HLBV method. For the fiscal year ended March 31, 2025, the Company reported a net loss; therefore, no allocation of losses was made to the noncontrolling interest, as the holder's contractual liquidation preference protected it from absorbing losses.\n\n**Redemption**\n\nOn March 29, 2026, the Operating Subsidiary and the Company entered into a Preferred Unit Redemption Agreement with CDSS, providing for the full redemption of all outstanding Preferred Units for a redemption price of $83.5 million. The redemption closed on March 31, 2026, and was funded using a portion of the net proceeds from the March 2026 PIPE. As a result of the redemption, CDSS no longer holds any equity interest in the Operating Subsidiary, and Capstone Green Energy LLC is now a wholly owned subsidiary of the Company. The Preferred Units are no longer outstanding as of March 31, 2026. See Note 15 for additional information.\n\nThe following table presents the activity in the Redeemable Preferred Units for the fiscal years presented (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended March 31,**\n\n​\n\n**  ​ ​ ​**\n\n**2026**\n\n  ​ ​ ​\n\n**2025**\n\nBalance, beginning of year\n\n​\n\n$\n\n13,859\n\n  ​ ​ ​\n\n$\n\n13,859\n\nAccretion to maximum redemption value\n\n​\n\n \n\n69,606\n\n​\n\n \n\n—\n\nRedemption of preferred units\n\n​\n\n​\n\n(83,465)\n\n​\n\n​\n\n—\n\nBalance, end of year\n\n​\n\n$\n\n0\n\n​\n\n$\n\n13,859\n\n \n\n \n\nF-31\n\n[Table of Contents](#TOC)\n\n**Part II — Redeemable Series A Convertible Preferred Stock**\n\n**Issuance**\n\nOn March 31, 2026, in connection with the March 2026 PIPE, the Company issued 80,000 shares of Redeemable Series A Convertible Preferred Stock (the \"Redeemable Series A Preferred Stock\") to funds managed by Monarch Alternative Capital LP (\"Monarch\") at a stated value of $1,000 per share, for an aggregate purchase price of $80.0 million. The Certificate of Designation establishing the Redeemable Series A Preferred Stock was filed with the Secretary of State of the State of Delaware and became effective on March 31, 2026. As redemption of the Redeemable Series A Preferred Stock is not solely within the Company's control, it is classified as temporary equity in accordance with ASC 480.\n\nHolders of the Series A Preferred Stock are entitled to vote together with common stockholders on an as-converted basis, possess separate class voting rights over certain significant corporate actions, and have the right to designate directors to the Company’s board of directors, subject to certain ownership thresholds. The Series A Preferred Stock is convertible at the option of the holder into shares of common stock at an initial conversion price of $5.00 per share, subject to certain anti-dilution adjustments.\n\n**Dividends**\n\nThe Redeemable Series A Preferred Stock accrues a cumulative paid-in-kind (\"PIK\") dividend at an initial rate of 5.00% per annum on the original issue price, as increased by prior PIK dividends, compounding annually. The PIK dividend accrues daily from the date of issuance and compounds on each anniversary thereof automatically, without any requirement for declaration by the Company. Beginning on June 30, 2030, the Company may elect to pay accrued and unpaid dividends for any quarterly period in cash, provided the Company satisfies minimum earnings, leverage, and liquidity requirements (the \"Minimum Financial Metrics\"). The Redeemable Series A Preferred Stock also participates in any dividends or distributions paid on the common stock on an as-converted basis.\n\nThe dividend rate is subject to increase as follows:\n\n●If the Company's common stock is not listed on a U.S. national securities exchange within 18 months of the closing date (i.e., by approximately September 30, 2027), the dividend rate increases by 200 basis points per annum on that date, and by an additional 100 basis points on each anniversary thereafter.\n\n●Additional rate increases may apply if the Minimum Financial Metrics are not satisfied.\n\n●The dividend rate may increase up to a maximum of 13.0% per annum.\n\n**Conversion**\n\nThe Series A Preferred Stock is initially recorded at its allocated purchase price, net of $6.0 million of issuance costs. Subsequent measurement depends on whether the instrument is currently redeemable or probable of redemption. If redemption becomes probable, or if the instrument becomes currently redeemable, the carrying amount is adjusted to its redemption value in accordance with applicable SEC guidance. As of March 31, 2026, the Series A Preferred Stock is not currently redeemable or probable of redemption and, therefore, is not currently subject to remeasurement. Cumulative dividends, which are paid-in-kind by increasing the accreted value of the shares, are recorded as an increase to the carrying amount of the redeemable preferred stock at a dividend rate of 5% per annum.\n\nAdditionally, two features within the Series A Preferred Stock provide for potential cash payment upon the occurrence of certain events. These features were identified as embedded derivatives requiring bifurcation. The issuance-date fair values of these embedded derivatives were determined to be de minimis due to the likelihood of a triggering event occurring.\n\nF-32\n\n[Table of Contents](#TOC)\n\nOptional Conversion: Each share of Redeemable Series A Preferred Stock is convertible at the holder's election at any time into a number of shares of common stock equal to (x) the original issue price of such share, plus accrued PIK dividends, divided by (y) the then-applicable conversion price. The initial conversion price is $5.00 per share, subject to customary anti-dilution adjustments.\n\nMandatory Conversion (Forced Conversion): Following a listing of the Company's common stock on a U.S. national securities exchange, the Company will have the right to require conversion of all outstanding Redeemable Series A Preferred Stock into common stock at the then-applicable conversion price if the volume-weighted average trading price of the common stock equals or exceeds $15.00 for at least 20 out of 30 consecutive trading days, subject to conditions including an effective resale registration statement, average daily trading volume of at least $5 million in value for at least 20 out of 30 consecutive trading days, and a publicly traded float of no less than $425 million.\n\nAs of March 31, 2026, 80,000 shares of Redeemable Series A Preferred Stock were outstanding, representing 16,000,000 shares of common stock on an as-converted basis at the initial conversion price of $5.00 per share.\n\n**Redemption**\n\nThe Redeemable Series A Preferred Stock is redeemable at the option of the holder upon certain breaches by the Company, subject to available funds and the restrictions of the Exit Note Purchase Agreement. As redemption is contingent upon certain events not solely within the Company's control, Redeemable Series A Preferred Stock is classified as temporary equity rather than permanent equity.\n\n**Governance Rights**\n\nSo long as Monarch holds at least 20% of the Company's common stock on an as-converted basis, it has the right to appoint two independent directors to the Board. Monarch retains the right to appoint one director while holding at least 10% on an as-converted basis, and board observer rights at 5% ownership. Monarch also holds broad consent rights over major corporate actions while a substantial portion of the Redeemable Series A Preferred Stock remains outstanding, and a potential board reconstitution right if the accreted value of the preferred exceeds $45 million after five years.\n\n**Registration Rights**\n\nIn connection with the issuance of the Redeemable Series A Preferred Stock, the Company entered into a registration rights agreement pursuant to which the Company agreed to file a resale registration statement with the SEC registering the resale of the shares of common stock underlying the Redeemable Series A Preferred Stock within 30 days of the closing date.\n\nThe following table presents the activity in the Redeemable Series A Convertible Preferred Stock since issuance (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended March 31,**\n\n​\n\n​\n\n​\n\n**2026**\n\nBalance, beginning of year\n\n​\n\n$\n\n—\n\nIssuance of Redeemable Series A Preferred Stock, net of issuance costs\n\n​\n\n​\n\n73,936\n\nPIK dividend accrual\n\n​\n\n​\n\n—\n\nBalance, end of year\n\n​\n\n$\n\n73,936\n\n \n\n \n\n \n\n​\n\nF-33\n\n[Table of Contents](#TOC)\n\n**14. Stock Compensation**\n\nThe Company recognized $11 thousand of additional paid in capital related to stock compensation for Capstone Distributor Support Services Corporation (“CDSSC”) employees that was recorded directly to equity and not recognized in the Consolidated Statement of Operations. As a result, this amount is not included in stock-based compensation reflected in the Consolidated Statement of Cash Flows, which results in a difference between the statements.\n\nThe following table summarizes stock-based compensation expense by line item in the Consolidated Statements of Operations (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended March 31,**\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**2026**\n\n  ​ ​ ​\n\n**2025**\n\n \n\nCost of goods sold\n\n​\n\n$\n\n46\n\n  ​ ​ ​\n\n$\n\n7\n\n​\n\nResearch and development\n\n​\n\n \n\n43\n\n​\n\n \n\n5\n\n​\n\nSelling, general and administrative\n\n​\n\n \n\n688\n\n​\n\n \n\n250\n\n​\n\nStock-based compensation expense\n\n​\n\n$\n\n777\n\n​\n\n$\n\n262\n\n​\n\n \n\n \n\n**2023 Equity Incentive Plans**\n\n*Capstone Energy+, Inc**. 2023 Equity Incentive Plan*\n\nOn December 7, 2023, in connection with the Company's emergence from Chapter 11 bankruptcy, the Board adopted the Capstone Energy+, Inc. 2023 Equity Incentive Plan (the \"2023 Plan\"). The 2023 Plan is administered by the Compensation and Human Capital Committee of the Board, or the Board itself, and is intended to attract and retain employees, consultants, and directors, align their interests with those of stockholders, and promote the long-term success of the Company.\n\nThe 2023 Plan was originally adopted with a maximum of 3,000,000 shares authorized for issuance. On August 12, 2025, during the Annual Meeting, the shareholders approved Amendment No. 1 to the 2023 Plan, increasing the share limit to 4,000,000 shares.\n\nAwards under the 2023 Plan generally vest over three years. The aggregate value of awards granted during any single fiscal year to any non-employee director, together with cash fees paid to such director and any awards granted under any other equity compensation plan of the Company, may not exceed $300,000 in total value.\n\nAs of March 31, 2026, 2,207,544 shares remained available for future grants under the 2023 Plan.\n\n*Non-Voting Common Stock*\n\nIn connection with the Company's emergence from bankruptcy, Capstone Energy+, Inc.'s Amended and Restated Certificate of Incorporation designated a class of non-voting common stock with a par value of $0.001 per share. The non-voting common stock was issued to certain key employees and directors as an incentive following the restructuring.\n\nThe non-voting common stock carries no voting rights on matters on which holders of common stock are generally entitled to vote, except that holders of non-voting common stock have the right to vote, separately or together with the common stock, on any amendments to the Certificate of Incorporation relating to (i) the authorized number of shares of common stock or non-voting common stock, or (ii) any preferences, rights, or powers of the non-voting common stock. The authorized number of shares of each class may be increased or decreased (but not below the number then outstanding) by the affirmative vote of holders of a majority of the common stock.\n\nThe non-voting common stock ranks equally with the common stock in all respects, including upon any liquidation, dissolution, or winding up of the Company, and shares ratably in any dividends and distributions. Each share of non-voting common stock automatically converts into one share of common stock upon transfer, subject to a twelve-month lock-up period following the date of the Certificate of Incorporation, with certain exceptions.\n\nUpon emergence, the Company calculated a step-up in value for the non-voting common stock reflecting the maximum value of the shares after applying a discount for lack of voting rights and the lock-up restriction. On the Effective\n\nF-34\n\n[Table of Contents](#TOC)\n\nDate, $0.5 million was recorded as a one-time compensation expense in the Consolidated Statement of Operations, with a corresponding credit to Additional Paid-In Capital.\n\nAs of March 31, 2026 and 2025, 333,120 and 508,475 shares of fully vested non-voting common stock were outstanding, respectively.\n\n*Restricted Stock Units*\n\nThe 2023 Plan authorizes the grant of restricted stock units (\"RSUs\") and performance-based restricted stock units (\"PRSUs\"). The following table summarizes RSU activity for the fiscal years presented:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Weighted**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Average Grant**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Date Fair**\n\n​\n\n**Restricted Stock Units**\n\n​\n\n**Shares**\n\n​\n\n**Value**\n\n** **\n\nNon-vested restricted stock units outstanding at April 1, 2024\n\n​\n\n460,000\n\n​\n\n$\n\n1.05\n\n​\n\nGranted\n\n​\n\n519,740\n\n​\n\n​\n\n0.92\n\n​\n\nVested and issued\n\n​\n\n(160,000)\n\n​\n\n​\n\n1.05\n\n​\n\nForfeited/cancelled\n\n​\n\n(92,917)\n\n​\n\n​\n\n1.03\n\n​\n\nNon-vested restricted stock units outstanding at March 31, 2025\n\n  ​ ​ ​\n\n726,823\n\n​\n\n$\n\n0.96\n\n​\n\nGranted\n\n \n\n950,845\n\n​\n\n​\n\n1.33\n\n​\n\nVested and issued\n\n \n\n(654,849)\n\n​\n\n​\n\n0.84\n\n​\n\nForfeited/cancelled\n\n \n\n(174,193)\n\n​\n\n​\n\n0.90\n\n​\n\nNon-vested restricted stock units outstanding at March 31, 2026\n\n \n\n848,626\n\n​\n\n​\n\n1.49\n\n​\n\nRestricted stock units expected to vest beyond March 31, 2026\n\n \n\n848,626\n\n​\n\n$\n\n1.49\n\n​\n\n \n\n \n\n*Performance Restricted Stock Units*\n\nThe following table summarizes performance restricted stock unit (“PRSU”) activity:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Weighted**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Average Grant**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Date Fair**\n\n​\n\n**Performance Restricted Stock Units**\n\n​\n\n**Shares**\n\n​\n\n**Value**\n\n** **\n\nNon-vested restricted stock units outstanding at April 1, 2024\n\n​\n\n—\n\n​\n\n$\n\n—\n\n​\n\nGranted\n\n​\n\n56,033\n\n​\n\n​\n\n0.93\n\n​\n\nVested and issued\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\nForfeited/cancelled\n\n​\n\n(2,500)\n\n​\n\n​\n\n0.93\n\n​\n\nNon-vested restricted stock units outstanding at March 31, 2025\n\n  ​ ​ ​\n\n53,533\n\n​\n\n$\n\n0.93\n\n​\n\nGranted\n\n \n\n84,141\n\n​\n\n​\n\n0.73\n\n​\n\nVested and issued\n\n \n\n—\n\n​\n\n​\n\n—\n\n​\n\nForfeited/cancelled\n\n \n\n(33,693)\n\n​\n\n​\n\n0.82\n\n​\n\nNon-vested restricted stock units outstanding at March 31, 2026\n\n \n\n103,981\n\n​\n\n​\n\n0.80\n\n​\n\nRestricted stock units expected to vest beyond March 31, 2026\n\n \n\n103,981\n\n​\n\n$\n\n0.80\n\n​\n\n \n\n \n\nF-35\n\n[Table of Contents](#TOC)\n\n*Unrecognized Compensation Cost*\n\nAs of March 31, 2026, there was approximately $1.1 million of aggregate unrecognized compensation cost related to unvested RSUs and PRSUs, which is expected to be recognized over a weighted-average remaining period of approximately 1.66 years. As of March 31, 2025, there was $0.7 million of aggregate unrecognized compensation cost related to unvested restricted stock units (including PRSU) expected to be recognized in compensation expense in future periods with a weighted-average period of 1.98 years.\n\n*Warrants*\n\nNo warrants are currently outstanding under the 2023 Equity Incentive Plan as of March 31, 2026.\n\n**15. Common Stock Issuance and Private Investment in Public Equity (\"PIPE\") Financing Transaction**\n\n*November 2025 PIPE Financing Transaction*\n\n**Overview**\n\nOn November 24, 2025, the Company entered into a Securities Purchase Agreement with certain accredited investors pursuant to which the Company agreed to issue and sell (collectively, the “November 2025 PIPE”) (i) 3,980,000 shares of common stock at $2.00 per share and (ii) pre-funded warrants to purchase 3,520,000 shares of common stock at a purchase price equal to the common stock purchase price minus $0.001, with an exercise price of $0.001 per share. The transaction closed on November 25, 2025, generating gross proceeds of approximately $15.0 million before placement agent fees and offering costs.\n\nTotal offering costs were approximately $1.4 million, consisting of a placement agent cash fee of 7.0% of gross proceeds received from investors who were not directors or executive officers, plus reimbursement of up to $100,000 of legal and out-of-pocket expenses. Offering costs were recorded as a reduction of additional paid-in capital. Net proceeds were approximately $13.6 million, of which approximately $8.3 million was used to repay the Exit New Money Notes maturing December 7, 2025 (see Note 11 – Debt), with the remainder available for working capital and general corporate purposes.\n\nAs of March 31, 2026, all 3,520,000 pre-funded warrants from this transaction remained outstanding and unexercised.\n\n*March 2026 Common Stock Issuance and PIPE Financing Transaction*\n\n**Overview**\n\nIn connection with the issuance of the Series A Preferred Stock on March 31, 2026, the Company also issued 3,333,334 shares of common stock to the Series A Preferred investor at a purchase price of $4.50 per share for aggregate gross proceeds of $15.0 million.\n\nThe issuance of common stock was part of the same securities purchase agreement and closed contemporaneously with the Series A Preferred Stock financing. The Company evaluated the common stock and Series A Preferred Stock as separate freestanding financial instruments and concluded that the transaction price was representative of the relative fair value of the instruments at issuance. Accordingly, no material reallocation of proceeds was required.\n\nOn March 31, 2026, the Company issued 3,588,889 shares of common stock of the Company, at a price of $4.50 per share as well as pre-funded warrants at a price of $4.499 to purchase up to 300,000 shares of common stock for aggregate gross proceeds of approximately $17.5 million (the “March 2026 PIPE”). The shares of common stock issued in the PIPE Investment were offered in a private placement under the Securities Act of 1933, as amended (the “Securities Act”).\n\nUpon closing, total offering costs of approximately $8.5 million were incurred, consisting primarily of a placement agent cash fee of 5.5% of gross proceeds and reimbursement of legal and other out-of-pocket expenses. These\n\nF-36\n\n[Table of Contents](#TOC)\n\noffering costs were allocated to the Series A Preferred Stock, common stock, and pre-funded warrants on a relative fair value basis, resulting in approximately:\n\n●$6.0 million allocated to the Series A Preferred Stock\n\n●$2.4 million allocated to the common stock\n\n●$0.1 million allocated to the pre-funded warrants\n\nOffering costs allocated to the Series A Preferred Stock were presented as a direct reduction of the carrying amount of the preferred stock within temporary equity. Offering costs allocated to the common stock and pre-funded warrants were recorded as a reduction of additional paid-in capital.\n\nA portion of the net proceeds, together with the proceeds from the Series A Convertible Preferred Stock issuance, was used to fund the $83.5 million redemption of the Preferred Units (see Note 12 – Commitments and Contingencies and Note 13 – Temporary Equity), with the remainder available for working capital and growth initiatives.\n\n*Pre-Funded Warrants*\n\nThe pre-funded warrants issued in both PIPE Financings have substantially similar terms. Each warrant is exercisable at any time following issuance until exercised in full, subject to beneficial ownership limitations restricting exercise if the holder would beneficially own more than 4.99% of the Company's outstanding common stock (or, at the holder's election upon 61 days' prior notice, up to 9.99%). The warrants are exercisable into a fixed number of shares at a fixed exercise price and contain no cash settlement features outside the Company's control. Accordingly, both series of pre-funded warrants are classified as equity in accordance with ASC 480 and ASC 815, with proceeds allocated to additional paid-in capital.\n\nThe following table summarizes pre-funded warrant activity for fiscal 2026:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**November 2025 PIPE**\n\n**March 2026 PIPE**\n\n**Total**\n\nWarrants issued\n\n3,520,000\n\n300,000\n\n3,820,000\n\nWarrants exercised\n\n-\n\n-\n\n-\n\nWarrants outstanding at March 31, 2026\n\n3,520,000\n\n300,000\n\n3,820,000\n\n \n\n \n\n*Registration Rights*\n\nIn connection with each transaction, the Company entered into Registration Rights Agreements requiring it to file a resale registration statement covering the shares issued and the shares underlying the pre-funded warrants. Neither agreement imposes cash penalties for failure to meet filing or effectiveness deadlines; accordingly, no liability has been recorded in connection with these obligations. As of March 31, 2026, the registration statement related to the November 2025 PIPE had been filed with the SEC. The registration statement related to the March 2026 PIPE was filed with the SEC on April 28, 2026, subsequent to the fiscal year end.\n\n \n\n​\n\n**16. Employee Benefit Plans**\n\nThe Company maintains a defined contribution 401(k) profit-sharing plan (the \"Plan\") in which all employees are eligible to participate. Employees may contribute up to the lesser of 90% of their eligible compensation or the applicable Internal Revenue Service annual contribution limits. Employee contributions are fully vested at all times.\n\nThe Plan provides for both Company matching contributions and discretionary contributions, with discretionary contributions determined by the Board of Directors. The Company makes matching contributions at a rate of 50% of each employee's contributions, up to 6% of eligible compensation, a matching formula that has been in place since February 2019. Company matching contributions vest at a rate of 25% per year over four years, measured from each employee's hire date.\n\nThe Company recorded matching contribution expense of approximately $0.3 million and $0.3 million for Fiscal 2026 and 2025, respectively.\n\n \n\nF-37\n\n[Table of Contents](#TOC)\n\n​\n\n**17. Net Income (Loss) Per Common Share**\n\nThe Company has common stock and non-voting common stock outstanding. As both classes carry identical economic rights, earnings per share is presented on a combined basis. Basic income (loss) per share is computed using the weighted average number of combined common and non-voting common shares outstanding during the period.\n\nDiluted income (loss) per share excludes potentially dilutive instruments, including restricted stock units, pre-funded warrants, and shares issuable upon conversion of the Series A Convertible Preferred Stock, when their inclusion would be anti-dilutive. For periods in which the Company reports a net loss available to common stockholders, all potentially dilutive instruments are excluded from the diluted share count as their inclusion would reduce the loss per share.\n\nThe accretion of the Preferred Units to their maximum redemption value is reflected as a reduction in net income (or increase in net loss) available to common and non-voting common stockholders in the computation of basic and diluted earnings per share, consistent with the two-class method requirements under ASC 260. Refer to Note 13 – Temporary Equity for additional information regarding the accretion of the Preferred Units and the issuance of the Series A Convertible Preferred Stock.\n\nThe following table presents the computation of basic and diluted net income (loss) per share for the fiscal years presented (in thousands, except per share amounts):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended March 31,**\n\n​\n\n**  ​ ​ ​**\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n**Numerator:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nConsolidated net income (loss)\n\n​\n\n$\n\n2,825\n\n​\n\n$\n\n(7,190)\n\nLess: Accretion to redemption value of Preferred Units\n\n​\n\n \n\n69,606\n\n​\n\n \n\n—\n\nNet loss available to holders of common stock and non-voting common stock\n\n​\n\n$\n\n(66,781)\n\n​\n\n$\n\n(7,190)\n\n**Denominator:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nWeighted average shares outstanding - common and non-voting common stock\n\n​\n\n \n\n20,833\n\n​\n\n \n\n19,056\n\nPre-funded warrants and other equivalents (1)\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\nWeighted average shares outstanding - diluted\n\n​\n\n​\n\n20,833\n\n​\n\n​\n\n19,056\n\nNet income (loss) per share - basic\n\n​\n\n$\n\n(3.21)\n\n​\n\n$\n\n(0.38)\n\nNet income (loss) per share - diluted\n\n​\n\n$\n\n(3.21)\n\n​\n\n$\n\n(0.38)\n\n \n\n(1)*For fiscal years ended March 31, 2026 and 2025, all potentially dilutive instruments were excluded from the diluted share count as their inclusion would be anti-dilutive given the net loss available to common stockholders in each period.*\n\n \n\n \n\nThe following table summarizes the potentially dilutive securities excluded from the diluted share calculation for each period presented:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended March 31,**\n\n​\n\n**  ​ ​ ​**\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\nRestricted stock units\n\n​\n\n​\n\n848,626\n\n​\n\n​\n\n726,823\n\nPerformance restricted stock units\n\n​\n\n​\n\n103,981\n\n​\n\n​\n\n53,533\n\nPre-funded warrants - November 2025 PIPE\n\n​\n\n​\n\n3,520,000\n\n​\n\n​\n\n—\n\nPre-funded warrants - March 2026 PIPE\n\n​\n\n​\n\n300,000\n\n​\n\n​\n\n—\n\nSeries A Convertible Preferred Stock (as-converted basis)\n\n​\n\n​\n\n16,000,000\n\n​\n\n​\n\n—\n\nTotal potentially dilutive securities excluded\n\n​\n\n​\n\n20,772,607\n\n​\n\n​\n\n780,356\n\n \n\n \n\n \n\n​\n\nF-38\n\n[Table of Contents](#TOC)\n\n**18. Income Taxes**\n\nIncome (loss) before provision for income taxes consisted of the following for the years ended March 31, 2026 and 2025 (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended March 31,**\n\n \n\n​\n\n  ​ ​ ​\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n \n\nUnited States\n\n​\n\n$\n\n2,706\n\n​\n\n$\n\n(7,066)\n\n​\n\nForeign\n\n  ​ ​ ​\n\n \n\n65\n\n  ​ ​ ​\n\n \n\n51\n\n​\n\nIncome (loss) before provision for income taxes\n\n​\n\n$\n\n2,771\n\n​\n\n$\n\n(7,015)\n\n​\n\n \n\n \n\nThe current income tax provision represents income taxes reported or expected to be reported on the Company's federal, state, and foreign income tax returns for the respective periods. The Company has recorded a full valuation allowance against its net deferred tax assets.\n\nThe components of the provision for income tax expense (benefit) are as follows for the years ended March 31, 2026 and 2025 (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended March 31,**\n\n​\n\n​\n\n​\n\n**2026**\n\n​\n\n**2025**\n\n​\n\nCurrent:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nFederal\n\n​\n\n$\n\n(19)\n\n​\n\n$\n\n85\n\n​\n\nState\n\n​\n\n​\n\n(16)\n\n​\n\n​\n\n61\n\n​\n\nForeign\n\n​\n\n​\n\n(19)\n\n​\n\n​\n\n29\n\n​\n\n​\n\n​\n\n​\n\n(54)\n\n​\n\n​\n\n175\n\n​\n\nDeferred:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nFederal\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\nState\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\nForeign\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\nTotal income tax expense (benefit)\n\n​\n\n$\n\n(54)\n\n​\n\n$\n\n175\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n \n\n \n\n​\n\nF-39\n\n[Table of Contents](#TOC)\n\nActual income tax expense differed from the amount computed by applying statutory corporate income tax rates to income from operations before income taxes. A reconciliation of income tax expense (benefit) to the U.S. federal statutory rate, presented in accordance with ASU 2023-09, follows (in thousands, except percentages):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended March 31, 2026**\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Amount**\n\n**  ​ ​ ​**\n\n**Percent**\n\n​\n\nFederal income tax at the statutory rate\n\n​\n\n$\n\n582\n\n​\n\n​\n\n21.0%\n\n​\n\nState and local taxes, net of federal income tax effect (1)\n\n  ​ ​ ​\n\n \n\n(13)\n\n  ​ ​ ​\n\n​\n\n(0.5)%\n\n​\n\nForeign tax effects\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nUnited Kingdom\n\n​\n\n \n\n​\n\n​\n\n​\n\n​\n\n​\n\nStatutory tax rate difference between United Kingdom and United States\n\n​\n\n​\n\n16\n\n​\n\n​\n\n0.6%\n\n​\n\nOther\n\n​\n\n​\n\n(35)\n\n​\n\n​\n\n(1.3)%\n\n​\n\nEffect of cross-border tax laws\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nOther\n\n​\n\n​\n\n(2)\n\n​\n\n​\n\n(0.1)%\n\n​\n\nTax credits\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nResearch and development credits\n\n​\n\n​\n\n(50)\n\n​\n\n​\n\n(1.8)%\n\n​\n\nChanges in valuation allowances\n\n​\n\n​\n\n198\n\n​\n\n​\n\n7.2%\n\n​\n\nNontaxable or nondeductible items\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nSec 162(m) officers' compensation\n\n​\n\n​\n\n105\n\n​\n\n​\n\n3.8%\n\n​\n\nShare-based payment awards (2)\n\n​\n\n​\n\n(123)\n\n​\n\n​\n\n(4.4)%\n\n​\n\nOther\n\n​\n\n​\n\n10\n\n​\n\n​\n\n0.3%\n\n​\n\nOther adjustments\n\n​\n\n \n\n​\n\n​\n\n​\n\n​\n\n​\n\nRedeemable noncontrolling interest (3)\n\n​\n\n​\n\n(381)\n\n​\n\n​\n\n(13.8)%\n\n​\n\nTrue-up\n\n​\n\n​\n\n(362)\n\n​\n\n​\n\n(13.1)%\n\n​\n\nIncome tax expense (benefit)\n\n​\n\n$\n\n(54)\n\n​\n\n​\n\n(1.9)%\n\n​\n\n(1)A majority (greater than 50%) of the tax effect in this category relates to state and local taxes in California and Pennsylvania.\n\n(2)The Company classifies windfalls and shortfalls related to share-based compensation within the nondeductible/nontaxable category.\n\n(3)Partnership income allocated to noncontrolling interest prior to redemption.\n\n \n\n \n\nAs previously disclosed for the year ended March 31, 2025, prior to the adoption of ASU 2023-09, the table below is a reconciliation of the components that caused the Company's income tax expense to differ from amounts computed by applying the U.S. federal statutory rate (in thousands, except percentages):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended March 31, 2025**\n\n \n\n​\n\n**  ​ ​ ​**\n\n**Amount**\n\n**  ​ ​ ​**\n\n**Percent**\n\n** **\n\nFederal income tax at the statutory rate\n\n​\n\n$\n\n(1,473)\n\n​\n\n​\n\n21.0%\n\n​\n\nState taxes, net of federal effect\n\n  ​ ​ ​\n\n \n\n(304)\n\n  ​ ​ ​\n\n​\n\n4.3%\n\n​\n\nRedeemable noncontrolling interest\n\n​\n\n​\n\n563\n\n​\n\n​\n\n(8.0)%\n\n​\n\nChange in valuation allowance\n\n​\n\n \n\n2,208\n\n​\n\n​\n\n(31.5)%\n\n​\n\nResearch and development credits\n\n​\n\n​\n\n(44)\n\n​\n\n​\n\n0.6%\n\n​\n\nExcess business interest expense\n\n​\n\n​\n\n218\n\n​\n\n​\n\n(3.1)%\n\n​\n\nTrue-up of prior year's estimates\n\n​\n\n​\n\n(1,004)\n\n​\n\n​\n\n14.3%\n\n​\n\nOther\n\n​\n\n \n\n11\n\n​\n\n​\n\n(0.2)%\n\n​\n\nIncome tax expense\n\n​\n\n$\n\n175\n\n​\n\n​\n\n(2.5)%\n\n​\n\n \n\n \n\nF-40\n\n[Table of Contents](#TOC)\n\n*Deferred Tax Assets and Liabilities*\n\nThe Company’s deferred tax assets and liabilities consisted of the following at March 31, 2026 and 2025 (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**As of March 31,**\n\n​\n\n​\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\nDeferred tax assets:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nNOL carryforwards\n\n​\n\n$\n\n1,962\n\n​\n\n$\n\n1,456\n\nInvestment in partnership\n\n​\n\n \n\n—\n\n​\n\n \n\n825\n\nGoodwill\n\n​\n\n \n\n16,833\n\n​\n\n \n\n—\n\nLease liabilities\n\n​\n\n​\n\n1,461\n\n​\n\n​\n\n—\n\nIntangible assets\n\n​\n\n​\n\n1,487\n\n​\n\n​\n\n—\n\nInventory reserve\n\n​\n\n​\n\n925\n\n​\n\n​\n\n—\n\nWarranty reserve\n\n​\n\n​\n\n1,364\n\n​\n\n​\n\n—\n\nDeferred revenue\n\n​\n\n​\n\n1,845\n\n​\n\n​\n\n—\n\nAccrued expenses\n\n​\n\n​\n\n873\n\n​\n\n​\n\n—\n\nAllowance for bad debts\n\n​\n\n​\n\n322\n\n​\n\n​\n\n—\n\nProperty, plant, and equipment\n\n​\n\n​\n\n450\n\n​\n\n​\n\n—\n\nOther\n\n​\n\n​\n\n206\n\n​\n\n​\n\n—\n\nDeferred tax assets\n\n​\n\n \n\n27,727\n\n​\n\n \n\n2,281\n\nValuation allowance for deferred tax assets\n\n​\n\n \n\n(26,038)\n\n​\n\n \n\n(2,281)\n\nDeferred tax assets, net of valuation allowance\n\n​\n\n \n\n1,689\n\n​\n\n \n\n—\n\nDeferred tax liabilities:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nRight-of-use assets\n\n​\n\n​\n\n(1,428)\n\n​\n\n​\n\n—\n\nOther\n\n​\n\n​\n\n(261)\n\n​\n\n​\n\n—\n\nNet deferred tax assets\n\n​\n\n$\n\n—\n\n​\n\n$\n\n—\n\n \n\n \n\nOn March 29, 2026, the Operating Subsidiary and the Company entered into a Preferred Unit Redemption Agreement with CDSS, providing for the full redemption of all outstanding Preferred Units. Following the redemption, as of March 31, 2026, the Operating Subsidiary, which was previously treated as a partnership, is treated as a disregarded entity for tax purposes as it is 100% owned by the Company. Prior to the redemption, the Company recorded an outside basis difference related to its investment in the Operating Subsidiary. Following the redemption, the Company directly owns the assets and liabilities of the Operating Subsidiary and is required to track the related inside book-to-tax basis differences. The deferred tax assets and liabilities presented as of March 31, 2026 reflect these inside book-to-tax basis differences.\n\n*Valuation Allowance*\n\nDue to the uncertainty surrounding the timing and realization of the benefits of the Company's favorable tax attributes in future income tax returns, the Company has established a full valuation allowance against its net deferred tax assets. The Company's return to profitability in Fiscal 2026, while a positive indicator, does not yet constitute sufficient positive evidence to overcome negative evidence considered in the valuation allowance assessment under ASC 740. The Company will continue to evaluate the realizability of its deferred tax assets each reporting period and will reduce the valuation allowance when, in management's judgment, it is more likely than not that some or all of the deferred tax assets will be realized. While the weight of positive evidence does not outweigh the negative evidence at the end of Fiscal 2026, the Company anticipates that a release of valuation allowance may be appropriate within the next 12 months. The change in the valuation allowance was as follows (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Year Ended March 31,**\n\n​\n\n​\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\nBalance, beginning of year\n\n​\n\n$\n\n(2,281)\n\n​\n\n$\n\n(155,382)\n\nChange in valuation allowance recorded in continuing operations\n\n​\n\n​\n\n(265)\n\n​\n\n​\n\n153,101\n\nChange in valuation allowance recorded in APIC\n\n​\n\n​\n\n(23,492)\n\n​\n\n​\n\n—\n\nBalance, end of year\n\n​\n\n$\n\n(26,038)\n\n​\n\n$\n\n(2,281)\n\nF-41\n\n[Table of Contents](#TOC)\n\n \n\n \n\nFor fiscal 2025, the decrease in the valuation allowance of $153.1 million was primarily attributable to the impact of the Plan of Reorganization, which resulted in the elimination of pre-reorganization tax attributes, including NOL carryforwards that remained with Reorganized PrivateCo (CDSS). For fiscal 2026, the increase in valuation allowance of $23.8 million primarily reflects 100% of the Operating Subsidiary's inside book and tax basis differences and tax basis step up resulting from the redemption of the Company’s Preferred Units, recorded through APIC.\n\n*Net Operating Loss Carryforwards*\n\nThe Company’s NOL carryforwards for federal and state income tax purposes at March 31, 2026, were as follows (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Expiration**\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Amount**\n\n**  ​ ​ ​**\n\n**Period**\n\n** **\n\nFederal NOL\n\n​\n\n$\n\n8,002\n\n \n\nIndefinite\n\n​\n\nState NOL\n\n​\n\n$\n\n4,222\n\n \n\n2044\n\n​\n\n \n\n \n\nFederal NOL carryforwards generated after December 31, 2017 are carried forward indefinitely but are subject to an 80% limitation on taxable income in the year of utilization under the Tax Cuts and Jobs Act of 2017.\n\n*IRC Section 382 Limitations*\n\nInternal Revenue Code Section 382 (“Section 382”) limits the use of net operating loss (“NOL”) and tax credit carryforwards when changes occur in the capital stock ownership of the Company. Any annual limitation may result in the expiration of NOL and credits before utilization. If the Company experiences an ownership change, utilization of the NOL and carryforwards could be significantly reduced. The Company does not expect to utilize NOL and tax credit carryforwards in the near term; accordingly, any Section 382 limitation is not expected to have a material impact on the financial statements given the full valuation allowance currently in place.\n\n*Unrecognized Tax Benefits*\n\nASC 740 clarifies the accounting for income taxes by prescribing a minimum recognition threshold that a tax position is required to meet before being recognized in the financial statements. ASC 740 also provides guidance on derecognition, measurement, classification, interest and penalties, accounting for interim periods, disclosure and transition. Based on management's evaluation, there were unrecognized tax benefits primarily related to research and development credits as of March 31, 2026 and March 31, 2025.\n\nA reconciliation of the beginning and ending amount of total gross unrecognized tax benefits is as follows (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nBalance at April 1, 2024\n\n​\n\n$\n\n—\n\n​\n\nGross increase related to prior year tax positions\n\n​\n\n \n\n19\n\n​\n\nGross increase related to current year tax positions\n\n​\n\n \n\n—\n\n​\n\nGross decrease due to reorganization\n\n​\n\n \n\n—\n\n​\n\nBalance at March 31, 2025\n\n​\n\n$\n\n19\n\n​\n\nGross increase related to prior year tax positions\n\n​\n\n \n\n5\n\n​\n\nGross increase related to current year tax positions\n\n​\n\n \n\n32\n\n​\n\nLapse of statute of limitations\n\n​\n\n \n\n—\n\n​\n\nBalance at March 31, 2026\n\n​\n\n$\n\n56\n\n​\n\n \n\n \n\n*Tax Return Jurisdictions and Open Years*\n\nThe Company files income tax returns in the U.S. federal jurisdiction and various state, local, and foreign jurisdictions. The Company is generally subject to examination by taxing authorities for fiscal years ended March 31, 2023 through the present period, subject to applicable statute of limitations periods.\n\nF-42\n\n[Table of Contents](#TOC)\n\nIncome taxes paid, net of refunds received for the fiscal year ended March 31, 2026, are as follows in accordance with ASU 2023-09 (in thousands):\n\n​\n\n​\n\n​\n\nFederal\n\n$ 70\n\nState:\n\n​\n\nPennsylvania\n\n21\n\nOther\n\n10\n\nForeign\n\n—\n\nTotal payments made (net of refunds received)\n\n$ 101\n\n \n\n \n\n \n\n​\n\n**19. Segment Information**\n\n*Segment Structure*\n\nThe Company operates as a single reportable segment encompassing the development, manufacture, sale, and rental of microturbine energy systems and their related parts and services. This determination is consistent with how the Company's Chief Executive Officer (the \"CODM\") evaluates performance and allocates resources on a consolidated basis.\n\nThe CODM assesses segment performance using consolidated net income (loss) on a GAAP basis, consistent with the basis of presentation in these financial statements. This measure is compared against prior periods and forecasted results to support operational decision-making, cost management, and business expansion initiatives. The CODM does not evaluate the segment using asset or liability information, and there are no intersegment sales or transfers within the consolidated entity.\n\n*Segment Profit or Loss and Reconciliation to Consolidated Statements of Operations*\n\nThe following table presents reported segment revenue, gross profit, significant segment expenses regularly provided to the CODM, and a reconciliation to consolidated net income (loss) (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended March 31,**\n\n​\n\n \n\n**2026**\n\n​\n\n**2025**\n\nRevenue, net:\n\n​\n\n$\n\n106,004\n\n  ​ ​ ​\n\n$\n\n85,564\n\nLess:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nCost of revenue\n\n​\n\n​\n\n72,133\n\n​\n\n​\n\n62,266\n\nGross profit\n\n​\n\n​\n\n33,871\n\n​\n\n​\n\n23,298\n\nLess:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nResearch and development\n\n​\n\n​\n\n3,621\n\n​\n\n​\n\n2,667\n\nSelling, general & administrative expenses\n\n​\n\n​\n\n22,928\n\n​\n\n​\n\n19,328\n\nNon-recurring professional expenses\n\n​\n\n​\n\n3,930\n\n​\n\n​\n\n6,877\n\nOther (income) expense items (1)\n\n​\n\n​\n\n567\n\n​\n\n​\n\n1,616\n\nConsolidated net income (loss)\n\n​\n\n$\n\n2,825\n\n​\n\n$\n\n(7,190)\n\n \n\n(1)Other segment items included in segment (income) expense include other income (expense), interest expense, interest income and income tax expense.\n\n \n\n \n\n*Significant Segment Expenses*\n\nIn accordance with ASU 2023-07, *Segment Reporting: Improvements to Reportable Segment Disclosures (Topic 280)*, the following describes the significant expense categories regularly provided to the CODM and included in the segment profit or loss measure:\n\n*Cost of Revenue* includes direct materials, direct labor, manufacturing overhead, warranty costs, and the cost of services performed under FPP and LTMA agreements.\n\nF-43\n\n[Table of Contents](#TOC)\n\n*Research and Development* includes salaries, materials, and overhead costs associated with the design, development, and improvement of the Company's microturbine technology.\n\n*Selling, General and Administrative* includes salaries and benefits for sales, marketing, and administrative personnel, commissions, marketing expenses, occupancy costs, and other general corporate expenses.\n\n*Non-Recurring Professional Expenses* includes costs that are separately identified and regularly presented to the CODM because they are not reflective of the Company's underlying operating performance. These consist of restructuring costs, financing transaction fees, shareholder litigation expenses, non-recurring legal costs, financial statement restatement expenses, and costs related to the SEC investigation.\n\n*Measure of Segment Profitability*\n\nFor Fiscal 2026, the CODM's primary measure of segment performance is consolidated net income, reflecting the Company's return to profitability. For Fiscal 2025, this measure was consolidated net loss. In both periods, the CODM evaluates performance against prior period results and internal forecasts to assess operational efficiency and progress against the Company's strategic objectives.\n\n \n\n​\n\n**20**. **Business Combinations**\n\n**Acquisition of****Cal Microturbine, LLC**\n\nOn August 13, 2025, the Company entered into an Equity Purchase Agreement (the “Purchase Agreement”) to acquire 100% of the equity interests of Cal Microturbine for total consideration of approximately $14.9 million, which was comprised of $6.0 million cash paid at closing, $3.4 million in deferred consideration, and the settlement of preexisting relationships of $5.5 million. The acquisition expands the Company’s direct distribution and service capabilities in key markets and is expected to enhance operational efficiencies and customer reach. The transaction closed on August 13, 2025 (“Closing Date”) and was funded using available cash on hand.\n\nThe table below summarizes the total consideration transferred at the Closing Date (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**As of the Closing Date**\n\nCash paid at close\n\n​\n\n$\n\n5,951\n\nDeferred consideration (1)\n\n​\n\n​\n\n3,427\n\nSettlement of preexisting relationships (2)\n\n​\n\n​\n\n5,538\n\n**Total consideration**\n\n​\n\n$\n\n14,916\n\n \n\n(1)The deferred consideration reflects cash payments of $4.0 million which will be distributed over 24 monthly installments starting in January 2026. These payments were discounted to their present value using an 11.45% discount rate.\n\n(2)The settlement of preexisting relationships reflects the resolution of outstanding accounts receivable and deferred revenue balances between Capstone and Cal Microturbine that existed as of the Closing Date. In accordance with ASC 805-10-25-20, this settlement was accounted for separately from the business combination and is excluded from the measurement of consideration transferred for purposes of the purchase price allocation and the determination of goodwill.\n\n \n\n \n\nAt the time of acquisition, Capstone and Cal Microturbine were engaged in ongoing litigation and arbitration related to their distributor agreement. As a result of the Purchase Agreement, these disputes were resolved, and mutual releases were executed. Neither company had recorded any contingent assets nor liabilities related to these matters as of the Closing Date.\n\nThe Company incurred acquisition and integration-related costs of $1.6 million during the year ended March 31, 2026, which were recorded within “Selling, general and administrative” expenses on the Company’s Consolidated Statement of Operations.\n\nF-44\n\n[Table of Contents](#TOC)\n\nThe Company accounted for the acquisition using the acquisition method under ASC 805, *Business Combinations*, under which assets acquired and liabilities assumed are recorded at their estimated fair values as of the Closing Date.\n\nThe most significant judgment in the purchase price allocation relates to the valuation of Cal Microturbine's customer relationships, which were valued using the multi-period excess earnings method. Key assumptions include projected revenue, customer attrition rates, operating expenses, selling and general administrative expenses, and a discount rate. Because this valuation relies on company-specific forecasts and assumptions rather than observable market inputs, the customer relationship intangible asset is classified as a Level 3 measurement within the ASC 820 fair value hierarchy.\n\nAs of the date of this filing, the Company performed the preliminary analysis to assign fair value to all tangible and intangible assets acquired and liabilities assumed. The preliminary purchase price allocation includes measurement period adjustments recognized based on information obtained subsequent to the Closing Date related to facts and circumstances that existed as of the acquisition date, primarily related to the identification of previously unrecorded sales tax payable and commissions payable, which resulted in corresponding adjustments to the estimated fair value of identifiable intangible assets. The purchase price allocation remains preliminary and is subject to further refinement as additional information becomes available, which may result in changes to the estimated fair values of assets acquired and liabilities assumed. The Company expects to finalize the fair value measurements as soon as practicable, but no later than 12 months from the Closing Date. No goodwill has been recognized as its management estimate as of the date of this filing is that the fair value of the net assets and liabilities acquired approximate the purchase price. However, upon finalizing its purchase price allocation, goodwill may result.\n\nThe following table summarizes the amounts of assets acquired and liabilities assumed at the acquisition date, valued at their estimated acquisition date fair value and subsequent adjustments made during the measurement period (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Acquisition Date Fair Value**\n\n​\n\n**Measurement Period Adjustments**\n\n​\n\n**Updated Acquisition Date Fair Value**\n\n**Assets acquired**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nCash\n\n​\n\n$\n\n7,361\n\n​\n\n$\n\n—\n\n​\n\n$\n\n7,361\n\nAccounts receivable\n\n​\n\n​\n\n6,689\n\n​\n\n​\n\n—\n\n​\n\n​\n\n6,689\n\nInventories\n\n​\n\n​\n\n760\n\n​\n\n​\n\n—\n\n​\n\n​\n\n760\n\nLease receivable, current\n\n​\n\n​\n\n366\n\n​\n\n​\n\n—\n\n​\n\n​\n\n366\n\nPrepaid expenses and other current assets\n\n​\n\n​\n\n19\n\n​\n\n​\n\n5\n\n​\n\n​\n\n24\n\nProperty, plant, equipment and rental assets\n\n​\n\n​\n\n52\n\n​\n\n​\n\n—\n\n​\n\n​\n\n52\n\nFinance lease right-of-use assets\n\n​\n\n​\n\n36\n\n​\n\n​\n\n—\n\n​\n\n​\n\n36\n\nOperating lease right-of-use assets\n\n​\n\n​\n\n12\n\n​\n\n​\n\n—\n\n​\n\n​\n\n12\n\nIntangible assets (1)\n\n​\n\n​\n\n3,884\n\n​\n\n​\n\n491\n\n​\n\n​\n\n4,375\n\nGoodwill\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\nTotal assets acquired\n\n​\n\n​\n\n19,179\n\n​\n\n​\n\n496\n\n​\n\n​\n\n19,675\n\n**Liabilities assumed**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nAccounts payable\n\n​\n\n​\n\n432\n\n​\n\n​\n\n—\n\n​\n\n​\n\n432\n\nAccrued expenses\n\n​\n\n​\n\n479\n\n​\n\n​\n\n391\n\n​\n\n​\n\n870\n\nAccrued salaries and wages\n\n​\n\n​\n\n655\n\n​\n\n​\n\n105\n\n​\n\n​\n\n760\n\nDeferred revenue, current\n\n​\n\n​\n\n2,649\n\n​\n\n​\n\n—\n\n​\n\n​\n\n2,649\n\nFinance lease liability, current\n\n​\n\n​\n\n17\n\n​\n\n​\n\n—\n\n​\n\n​\n\n17\n\nOperating lease liability, current\n\n​\n\n​\n\n7\n\n​\n\n​\n\n—\n\n​\n\n​\n\n7\n\nFinance lease liability, non-current\n\n​\n\n​\n\n19\n\n​\n\n​\n\n—\n\n​\n\n​\n\n19\n\nOperating lease liability, non-current\n\n​\n\n​\n\n5\n\n​\n\n​\n\n—\n\n​\n\n​\n\n5\n\nTotal liabilities assumed\n\n​\n\n​\n\n4,263\n\n​\n\n​\n\n496\n\n​\n\n​\n\n4,759\n\n**Net assets acquired**\n\n​\n\n$\n\n14,916\n\n​\n\n$\n\n—\n\n​\n\n$\n\n14,916\n\n \n\n(1) The intangible asset relates to customer relationships and was determined to have a amortization period of six years, amortized on a straight-line basis. Amortization expense from August 13, 2025, Closing Date, through March 31, 2026 is $0.4 million.\n\n \n\n \n\nF-45\n\n[Table of Contents](#TOC)\n\nNo goodwill was recognized as the estimated fair value of the net assets acquired approximates the total consideration transferred.\n\nThe post-closing operating results of Cal Microturbine have been included in our consolidated financial statements. For the period from the Closing Date through March 31, 2026, the Company’s Consolidated Statements of Operations include Cal Microturbine revenue of $4.0 million and earnings of $1.2 million for the year ended March 31, 2026, respectively.\n\n*Pro Forma Financial Information (Unaudited)*\n\nThe following unaudited pro forma consolidated results of operations present the estimated unaudited pro forma combined results of Capstone and Cal Microturbine for the year ended March 31, 2026 and 2025, as if the acquisition had occurred on April 1, 2024 and was prepared in accordance with ASC 805.\n\nThe pro forma information does not necessarily represent what the combined companies' revenue or results of operations would have been had the acquisition occurred on April 1, 2024, nor is it intended to be a projection of future operating results. It does not reflect any operating efficiencies or potential cost savings from combining the two entities. Cal Microturbine's fiscal year ends December 31; accordingly, the pro forma financial information was prepared using comparable reporting periods, with Cal Microturbine's financial data derived from internally generated, unaudited reports and certain estimates applied to allocate revenues and expenses across periods.\n\nPro forma adjustments include the elimination of intercompany revenue and expenses, amortization of the customer relationship intangible asset, interest expense on deferred consideration, and reclassification of acquisition-related transaction costs. Acquisition-related costs incurred by Capstone were excluded from the fiscal 2026 pro forma results and included in the fiscal 2025 pro forma results, consistent with ASC 805 requirements.\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nCombined Company Pro Forma\n\n**Year ended March 31,**\n\n​\n\n**2026**\n\n​\n\n**2025**\n\nRevenues, net\n\n$\n\n111,915\n\n​\n\n$\n\n90,514\n\nNet income (loss)\n\n​\n\n7,621\n\n​\n\n​\n\n(9,069)\n\n \n\n \n\n \n\n**Asset Acquisition of Capstone Distributor Support Services (“CDSS”)**\n\nOn March 31, 2026, pursuant to an asset purchase agreement, the Company acquired a set of assets and assumed certain liabilities associated with its distributor support activities, including  the Company’s right, title, and interest in and to certain trademarks of the Company from Capstone Distributor Support Services Corporation (the “Seller” or “CDSS”) (the “DSS Transaction”).\n\nTotal consideration transferred was $4.4 million, consisting of $1.0 million of cash paid at closing, $1.0 million attributable to the settlement of a pre-existing relationship between the Company and CDSS and the assumption of $2.4 million of liabilities.\n\nThe Company determined the Transaction constituted an asset acquisition because the acquired set did not include an assembled workforce with a substantive process and therefore did not meet the definition of a business under U.S. GAAP. Under asset acquisition accounting, the total purchase consideration was allocated to assets acquired and liabilities assumed on a relative fair value basis. No goodwill was recognized.\n\nF-46\n\n[Table of Contents](#TOC)\n\nThe allocation of the purchase consideration to the assets acquired and liabilities assumed is summarized below (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Purchase Price Allocation**\n\nPurchase consideration:\n\n​\n\n​\n\n​\n\nCash paid at close\n\n​\n\n$\n\n1,000\n\nSettlement of preexisting relationships (1)\n\n​\n\n​\n\n971\n\nAssumed liabilities (2)\n\n​\n\n​\n\n2,394\n\n**Total purchase consideration**\n\n​\n\n$\n\n4,365\n\n​\n\n​\n\n​\n\n​\n\nAssets acquired:\n\n​\n\n​\n\n​\n\nAccounts receivable\n\n​\n\n$\n\n2,764\n\nPrepaid expenses and other current assets\n\n​\n\n​\n\n19\n\nProperty, plant, equipment and rental assets\n\n​\n\n​\n\n1\n\nIntangible assets (3)\n\n​\n\n​\n\n1,581\n\n**Net assets acquired**\n\n​\n\n$\n\n4,365\n\n(1)The settlement of pre-existing relationships related to accounts receivable. In accordance with ASC 805-10-25-20, this settlement was accounted for separately from the business combination and is excluded from the measurement of consideration transferred for purposes of the purchase price allocation and the determination of goodwill.\n\n(2)The assumed liabilities include: Accounts payable of $335 thousand, Accrued salaries and wages of $27 thousand, and Deferred revenue of approximately $2.0 million.\n\n(3)The Company recognized an intangible asset related to the Company’s right, title, and interest in and to certain trademarks of $1.6 million with a 10-year life which is amortized on a straight-line basis over its estimated useful life.\n\n \n\n \n\n \n\n​\n\n**21. Supplemental Balance Sheet Information**\n\n*Prepaid and Other Assets*\n\nThe following table presents the components of prepaid expenses, other current assets, and other long-term assets as of March 31, 2026 and 2025 (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**March 31,**\n\n​\n\n**March 31,**\n\n​\n\n**  ​ ​ ​**\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\nOther royalty-related current assets\n\n​\n\n$\n\n150\n\n​\n\n$\n\n124\n\nOther royalty-related noncurrent assets\n\n​\n\n​\n\n1,878\n\n​\n\n \n\n2,102\n\nTotal royalty-related assets\n\n​\n\n$\n\n2,028\n\n​\n\n$\n\n2,226\n\nPrepaid insurance current asset\n\n​\n\n​\n\n167\n\n​\n\n​\n\n148\n\nPrepaid insurance noncurrent asset\n\n​\n\n​\n\n298\n\n​\n\n​\n\n431\n\nTotal prepaid insurance\n\n​\n\n$\n\n465\n\n​\n\n$\n\n579\n\nDeposits current asset\n\n​\n\n​\n\n187\n\n​\n\n​\n\n169\n\nDeposits noncurrent asset\n\n​\n\n​\n\n456\n\n​\n\n​\n\n172\n\nTotal deposits\n\n​\n\n$\n\n643\n\n​\n\n$\n\n341\n\nPrepaid vendor inventory\n\n​\n\n​\n\n1,534\n\n​\n\n​\n\n2,126\n\nPrepaid taxes\n\n​\n\n​\n\n965\n\n​\n\n​\n\n698\n\nOther current assets\n\n​\n\n​\n\n544\n\n​\n\n​\n\n388\n\nTotal Prepaid expenses, other current assets and other assets\n\n​\n\n$\n\n6,179\n\n​\n\n$\n\n6,358\n\n \n\n \n\n*Prepaid Royalties*\n\nThe Company holds a prepaid royalty asset that is being amortized over a fifteen-year period through September 2033 using an effective royalty rate methodology. The fifteen-year amortization period reflects the minimum expected life cycle of the current generation of microturbine products. The effective royalty rate is calculated as the total prepaid royalty settlement divided by total projected microturbine system unit shipments over the amortization period.\n\nF-47\n\n[Table of Contents](#TOC)\n\nOn a quarterly basis, the Company re-forecasts projected microturbine unit shipments to determine whether an adjustment to the effective royalty rate is necessary and whether any impairment indicators exist. No impairment was identified as of March 31, 2026 or March 31, 2025.\n\nAs of March 31, 2026, the remaining balance of the prepaid royalty asset was $2.0 million, of which $0.1 million is classified as current and $1.9 million is classified as non-current on the Consolidated Balance Sheets.\n\n \n\n​\n\n**22. Subsequent Events**\n\nSubsequent to March 31, 2026, certain investors exercised warrants issued in connection with the Company’s March 2026 PIPE. On May 8, 2026, an investor exercised warrants to purchase 2,019,812 shares of common stock pursuant to a cashless exercise feature.\n\nOn April 21, 2026, the Company’s Board of Directors approved Amendment No. 2 to the Capstone Energy+, Inc. 2023 Equity Incentive Plan (the “2023 Plan”), increasing the maximum number of shares authorized for issuance under the 2023 Plan from 4,000,000 to 7,000,000 shares. This amendment was disclosed in the Company’s Current Report on Form 8-K filed on April 21, 2026.\n\nThe Company evaluated subsequent events through the date of issuance of these financial statements and determined that no events occurred that require recognition or disclosure, other than those described above.\n\n​\n\n​\n\n​\n\nF-48\n\n[Table of Contents](#TOC)\n\n**Exhibit Index**\n\n​\n\n**Exhibit********Number**\n\n​\n\n**Description**\n\n2.1\n\n​\n\n[Joint Prepackaged Chapter 11 Plan of Reorganization of Capstone Green Energy Corporation and its Debtor Affiliates (incorporated by reference to Exhibit A of Findings of Fact, Conclusions of Law, and Order (I) Approving the Disclosure Statement; (II) Confirming the Joint Prepackaged Chapter 11 Plan of Reorganization of Capstone Green Energy Corporation and Its Debtor Affiliates; and (III) Granting Related Relief, dated November 14, 2023) (k)](https://www.sec.gov/Archives/edgar/data/1009759/000155837023019179/cgrn-20231109xex2d1.htm)\n\n2.2\n\n​\n\n[Plan Supplement to Joint Prepackaged Chapter 11 Plan of Reorganization of Capstone Green Energy Corporation and its Debtor Affiliates, dated as of October 24, 2023 (j)](https://www.sec.gov/Archives/edgar/data/1009759/000155837023016729/cgrn-20231024xex99d1.htm)\n\n2.3\n\n​\n\n[Notice of Filing of Additional Exhibits to Plan Supplement, dated as of November 9, 2023 (k)](https://www.sec.gov/Archives/edgar/data/1009759/000155837023019179/cgrn-20231109xex99d1.htm)\n\n2.4\n\n​\n\n[Findings of Fact, Conclusions of Law, and Order (I) Approving the Disclosure Statement; (II) Confirming the Joint Prepackaged Chapter 11 Plan of Reorganization of Capstone Green Energy Corporation and Its Debtor Affiliates; and (III) Granting Related Relief, dated November 14, 2023 (k)](https://www.sec.gov/Archives/edgar/data/1009759/000155837023019179/cgrn-20231109xex2d1.htm)\n\n2.5\n\n​\n\n[Equity Purchase Agreement, dated August 13, 2025, by and among Capstone Green Energy LLC, Cal Micro Holdco, Inc., and the other parties thereto (u)](https://www.sec.gov/Archives/edgar/data/1009759/000155837025011486/cgeh-20250812xex2.htm)\n\n3.1\n\n​\n\n[Second Amended and Restated Certificate of Incorporation of Capstone Green Energy Holdings, Inc. (l)](https://www.sec.gov/Archives/edgar/data/1009759/000110465923124877/tm2332548d1_ex3-1.htm)\n\n3.2\n\n​\n\n[Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation (x)](https://www.sec.gov/Archives/edgar/data/1009759/000110465926052878/cgeh-20260429xex3d1.htm)\n\n3.3\n\n​\n\n[Second Amended and Restated Bylaws of Capstone Energy+, Inc. (x)](https://www.sec.gov/Archives/edgar/data/1009759/000110465926052878/cgeh-20260429xex3d2.htm)\n\n3.4\n\n​\n\n[Certificate of Designation of Series A Convertible Preferred Stock of Capstone Green Energy Holdings, Inc. (q)](https://www.sec.gov/Archives/edgar/data/1009759/000110465926036455/tm2610121d1_ex3-1.htm)\n\n4.1\n\n​\n\n[Exit Note Purchase Agreement, dated December 7, 2023, by and among Capstone Green Energy LLC, Capstone Green Energy Holdings, Inc., Capstone Financial Services, Broad Street Credit Holdings LLC, as Purchaser, and Goldman Sachs Specialty Lending Group, L.P., as Collateral Agent (l)](https://www.sec.gov/Archives/edgar/data/1009759/000110465923124877/tm2332548d1_ex4-1.htm)\n\n4.2\n\n​\n\n[First Amendment to Note Purchase Agreement, dated as of June 28, 2024, by and among Capstone Green Energy Holdings, Inc., Capstone Green Energy LLC, Capstone Turbine Financial Services, LLC, Goldman Sachs Specialty Lending Group, L.P. and the Purchaser party thereto (n)](https://www.sec.gov/Archives/edgar/data/1009759/000155837024009633/tmb-20240626xex4d1.htm)\n\n4.3\n\n​\n\n[Consent and Second Amendment to Note Purchase Agreement, dated as of August 13, 2025, by and among Capstone Green Energy Holdings, Inc., Capstone Green Energy LLC, Capstone Turbine Financial Services, LLC, Goldman Sachs Specialty Lending Group, L.P. and the Purchaser party thereto. (u)](https://www.sec.gov/Archives/edgar/data/1009759/000155837025011486/cgeh-20250812xex4.htm)\n\n4.4\n\n​\n\n[Consent and Third Amendment to Note Purchase Agreement, dated March 29, 2026. (q)](https://www.sec.gov/Archives/edgar/data/1009759/000110465926036455/tm2610121d1_ex4-2.htm)\n\n4.5\n\n​\n\n[Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (o)](https://www.sec.gov/Archives/edgar/data/1009759/000155837024009109/tmb-20230331xex4d4.htm)\n\n4.6\n\n​\n\n[Form of 2025 Pre-Funded Warrant. (r)](https://www.sec.gov/Archives/edgar/data/1009759/000110465925115134/tm2532029d1_ex4-1.htm)\n\n4.7\n\n​\n\n[Form of 2026 Pre-Funded Warrant. (q)](https://www.sec.gov/Archives/edgar/data/1009759/000110465926036455/tm2610121d1_ex4-1.htm)\n\n10.1\n\n*\n\n[Amended and Restated Capstone Turbine Corporation Change of Control Severance Plan (a)](https://www.sec.gov/Archives/edgar/data/1009759/000095012905001095/a05519exv10w3.htm)\n\n10.2\n\n​\n\n[Development and License Agreement between Capstone Turbine Corporation and Carrier Corporation, successor-in-interest to UTC Power Corporation, dated September 4, 2007 (b)](https://www.sec.gov/Archives/edgar/data/1009759/000110465907081198/a07-26068_1ex10d2.htm)\n\n10.3\n\n​\n\n[Promissory Note between Capstone Turbine Corporation and Turbine International, LLC, dated October 13, 2017 (c)](https://www.sec.gov/Archives/edgar/data/1009759/000155837017007422/ex-10d2.htm)\n\n10.4\n\n​\n\n[Guaranty between Capstone Turbine Corporation and Hispania Petroleum, S.A., dated October 13, 2017 (c)](https://www.sec.gov/Archives/edgar/data/1009759/000155837017007422/ex-10d3.htm)\n\n10.5\n\n​\n\n[First Amendment to the Accounts Receivable Assignment Agreement and Promissory Note between Capstone Turbine Corporation and Turbine International, LLC, dated June 5, 2018 (d)](https://www.sec.gov/Archives/edgar/data/1009759/000155837018005175/cpst-20180331ex10433c234.htm)\n\n10.6\n\n*\n\n[Capstone Green Energy Corporation Amended and Restated Severance Pay Plan and Summary Plan Description, dated July 3, 2018, as amended March 2023 (e)](https://www.sec.gov/Archives/edgar/data/1009759/000155837023002916/cgrn-20230306xex10d1.htm)\n\n10.7\n\n*\n\n[Form of Capstone Green Energy Corporation Change in Control Agreement (f)](https://www.sec.gov/Archives/edgar/data/1009759/000110465918039404/a18-15164_1ex10d1.htm)\n\n​\n\n[Table of Contents](#TOC)\n\n​\n\n**Exhibit********Number**\n\n​\n\n**Description**\n\n10.8\n\n​\n\n[Consulting Agreement between Capstone Green Energy Corporation and Capstone Engineered Solutions, dated May 22, 2022 (g)](https://www.sec.gov/Archives/edgar/data/1009759/000155837022010690/cgrn-20220331xex10d28.htm)\n\n10.9\n\n​\n\n[National Account Agreement between Capstone Green Energy Corporation and Capstone Engineered Solutions, dated May 20, 2022 (g)](https://www.sec.gov/Archives/edgar/data/1009759/000155837022010690/cgrn-20220331xex10d29.htm)\n\n10.10\n\n​\n\n[Installation Agreement between Capstone Green Energy Corporation and Capstone Engineered Solutions Corporation (g)](https://www.sec.gov/Archives/edgar/data/1009759/000155837022010690/cgrn-20220331xex10d30.htm)\n\n10.11\n\n​\n\n[Lease Agreement between Capstone Green Energy Corporation and Prologis, L.P., dated January 25, 2023 (h)](https://www.sec.gov/Archives/edgar/data/1009759/000155837023001197/cgrn-20221231xex10d1.htm)\n\n10.12\n\n​\n\n[Transaction Support Agreement, dated September 28, 2023, by and among Capstone Green Energy Corporation and certain of its subsidiaries, Goldman Sachs Specialty Lending Group, L.P., and Broad Street Credit Holdings LLC (i)](https://www.sec.gov/Archives/edgar/data/1009759/000155837023016108/cgrn-20230926xex10d1.htm)\n\n10.13\n\n​\n\n[Reorganized PublicCo Services Agreement, dated December 7, 2023, by and among Capstone Green Energy Holdings, Inc. and Capstone Green Energy LLC (l)](https://www.sec.gov/Archives/edgar/data/1009759/000110465923124877/tm2332548d1_ex10-2.htm)\n\n10.14\n\n​\n\n[Trademark License Agreement, dated December 7, 2023, by and among Capstone Distributor Support Services Corporation and Capstone Green Energy Holdings, Inc. (l)](https://www.sec.gov/Archives/edgar/data/1009759/000110465923124877/tm2332548d1_ex10-4.htm)\n\n10.15\n\n*\n\n[Capstone Green Energy Holdings, Inc. Form of Indemnity Agreement (l)](https://www.sec.gov/Archives/edgar/data/1009759/000110465923124877/tm2332548d1_ex10-6.htm)\n\n10.16\n\n*\n\n[Severance Pay Plan of Capstone Green Energy Holdings, Inc. (l)](https://www.sec.gov/Archives/edgar/data/1009759/000110465923124877/tm2332548d1_ex10-7.htm)\n\n10.17\n\n*\n\n[Capstone Energy+, Inc. 2023 Equity Incentive Plan, as amended. (v)](https://www.sec.gov/Archives/edgar/data/1009759/000110465926056336/tm2613542d1_ex99-1.htm)\n\n10.18\n\n​\n\n[Amended and Restated Limited Liability Company Agreement, dated December 7, 2023, of Capstone Green Energy LLC. (l)](https://www.sec.gov/Archives/edgar/data/1009759/000110465923124877/tm2332548d1_ex10-1.htm)\n\n10.19\n\n​\n\n[Reorganized PrivateCo Services Agreement, dated December 7, 2023, by and among Capstone Distributor Support Services Corporation and Capstone Green Energy LLC (l)](https://www.sec.gov/Archives/edgar/data/1009759/000110465923124877/tm2332548d1_ex10-3.htm)\n\n10.20\n\n​\n\n[Registration Rights Agreement, dated December 7, 2023, by and among Capstone Green Energy LLC and Capstone Distributor Support Services Corporation (l)](https://www.sec.gov/Archives/edgar/data/1009759/000110465923124877/tm2332548d1_ex10-5.htm)\n\n10.21\n\n*\n\n[Employment Offer Letter for Vincent J. Canino, dated February 22, 2024 (m)](https://www.sec.gov/Archives/edgar/data/1009759/000155837024002988/tmb-20240312xex10d1.htm)\n\n10.22\n\n*\n\n[Capstone Green Energy Holdings, Inc. Form of Amended and Restated Change in Control Agreement (m)](https://www.sec.gov/Archives/edgar/data/1009759/000155837024002988/tmb-20240312xex10d2.htm)\n\n10.23\n\n*\n\n[Form of Restricted Stock Unit Agreement (o)](https://www.sec.gov/Archives/edgar/data/1009759/000155837024009109/tmb-20230331xex10d23.htm)\n\n10.24\n\n​\n\n[Exit Note Purchase Agreement Waiver Letter dated June 23, 2025](cgeh-20260331xex10d24.htm).\n\n10.25\n\n​\n\n[Consulting Agreement, dated as of November 10, 2025, between Capstone Green Energy Holdings, Inc. and BBR Financial Solutions, LLC. (t)](https://www.sec.gov/Archives/edgar/data/1009759/000100975925000057/cgeh-20251030xex10d1.htm)\n\n10.26\n\n​\n\n[Securities Purchase Agreement, dated as of November 24, 2025, by and among Capstone Green Energy Holdings, Inc. and the purchasers party thereto. (r)](https://www.sec.gov/Archives/edgar/data/1009759/000110465925115134/tm2532029d1_ex10-1.htm)\n\n10.27\n\n​\n\n[Registration Rights Agreement, dated as of November 24, 2025, by and among Capstone Green Energy Holdings, Inc. and the purchasers party thereto. (r)](https://www.sec.gov/Archives/edgar/data/1009759/000110465925115134/tm2532029d1_ex10-2.htm)\n\n10.28\n\n​\n\n[Placement Agency Agreement, dated November 24, 2025, by and between Capstone Green Energy Holdings, Inc. and Craig-Hallum Capital Group LLC. (r)](https://www.sec.gov/Archives/edgar/data/1009759/000110465925115134/tm2532029d1_ex10-3.htm)\n\n10.29\n\n​\n\n[Securities Purchase Agreement with Preferred Stock Investor, dated March 29, 2026, by and among Capstone Green Energy Holdings, Inc. and the purchasers party thereto. (q)](https://www.sec.gov/Archives/edgar/data/1009759/000110465926036455/tm2610121d1_ex10-1.htm)\n\n10.30\n\n​\n\n[Securities Purchase Agreement for PIPE, dated as of March 29, 2026, by and among Capstone Green Energy Holdings, Inc. and the purchasers party thereto. (q)](https://www.sec.gov/Archives/edgar/data/1009759/000110465926036455/tm2610121d1_ex10-2.htm)\n\n10.31\n\n​\n\n[Registration Rights Agreement with Preferred Stock Investor, dated as of March 29, 2026, by and among Capstone Green Energy Holdings, Inc. and the purchasers party thereto. (q)](https://www.sec.gov/Archives/edgar/data/1009759/000110465926036455/tm2610121d1_ex10-3.htm)\n\n10.32\n\n​\n\n[Registration Rights Agreement for PIPE, dated as of March 29, 2026, by and among Capstone Green Energy Holdings, Inc. and the purchasers party thereto. (q)](https://www.sec.gov/Archives/edgar/data/1009759/000110465926036455/tm2610121d1_ex10-4.htm)\n\n​\n\n[Table of Contents](#TOC)\n\n​\n\n**Exhibit********Number**\n\n​\n\n**Description**\n\n10.33\n\n​\n\n[Placement Agency Agreement, dated March 29, 2026, by and between Capstone Green Energy Holdings, Inc. and Craig-Hallum Capital Group LLC. (q)](https://www.sec.gov/Archives/edgar/data/1009759/000110465926036455/tm2610121d1_ex10-5.htm)\n\n10.34\n\n​\n\n[Preferred Unit Redemption Agreement, dated March 29, 2026. (q)](https://www.sec.gov/Archives/edgar/data/1009759/000110465926036455/tm2610121d1_ex10-6.htm)\n\n10.35\n\n​\n\n[Asset Purchase Agreement, dated March 29, 2026. (q)](https://www.sec.gov/Archives/edgar/data/1009759/000110465926036455/tm2610121d1_ex10-7.htm)\n\n19.1\n\n​\n\n[Insider Trading Policy.](cgeh-20260331xex19d1.htm)\n\n21.1\n\n​\n\n[List of Subsidiaries.](cgeh-20260331xex21d1.htm)\n\n23.1\n\n​\n\n[Consent of CBIZ CPAs P.C.](cgeh-20260331xex23d1.htm)\n\n24\n\n​\n\n[Power of Attorney (included on the signature page of this Form 10-K)](#Sig)\n\n31.1\n\n​\n\n[Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes­–Oxley Act of 2002](cgeh-20260331xex31d1.htm)\n\n31.2\n\n​\n\n[Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes­–Oxley Act of 2002](cgeh-20260331xex31d2.htm)\n\n32\n\n​\n\n[Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes–Oxley Act of 2002 (furnished herewith)](cgeh-20260331xex32.htm)\n\n97.1\n\n​\n\n[Capstone Energy+, Inc. Clawback Policy, effective October 2, 2023, amended June 1, 2026](cgeh-20260331xex97d1.htm)\n\n101.INS\n\n​\n\nXBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document\n\n101.SCH\n\n​\n\nXBRL Schema Document\n\n101.CAL\n\n​\n\nXBRL Calculation Linkbase Document\n\n101.LAB\n\n​\n\nXBRL Label Linkbase Document\n\n101.PRE\n\n​\n\nXBRL Presentation Linkbase Document\n\n101.DEF\n\n​\n\nXBRL Definition Linkbase Document\n\n104\n\n​\n\nThe cover page from Capstone Green Energy Corporation’s Annual Report on Form 10-K for the fiscal year ended March 31, 2026, formatted in Inline XBRL and contained in Exhibit 101\n\n*Management contract or compensatory plan or arrangement\n\n(a)Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2004 (File No. 001-15957).\n\n(b)Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2007 (File No. 001-15957).\n\n(c)Incorporated by reference to the Company’s Current Report on Form 8-K filed on October 13, 2017 (File No. 001-15957).\n\n(d)Incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2018 (File No. 001-15957).\n\n(e)Incorporated by reference to the Company’s Current Report on Form 8-K filed on March 6, 2023 (File No. 001-15957).\n\n(f)Incorporated by reference to the Company’s Current Report on Form 8-K filed on June 5, 2018 (File No. 001-15957).\n\n(g)Incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2022 (File No. 001-15957).\n\n(h)Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2022 (File No. 001-15957).\n\n(i)Incorporated by reference to the Company’s Current Report on Form 8-K filed on September 28, 2023 (File No. 001-15957).\n\n​\n\n[Table of Contents](#TOC)\n\n(j)Incorporated by reference to the Company’s Current Report on Form 8-K filed on October 25, 2023 (File No. 001-15957).\n\n(k)Incorporated by reference to the Company’s Current Report on Form 8-K filed on November 17, 2023 (File No. 001-15957).\n\n(l)Incorporated by reference to the Company’s Current Report on Form 8-K12G3 filed on December 11, 2023 (File No. 001-15957).\n\n(m)Incorporated by reference to the Company’s Current Report on Form 8-K filed on March 12, 2024 (File No. 001-15957).\n\n(n)Incorporated by reference to the Company’s Current Report on Form 8-K filed on June 28, 2024 (File No. 001-15957).\n\n​\n\n(o)Incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2023 (File No. 001-15957).\n\n​\n\n(p)Incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2024 (File No. 001-15957).\n\n(q)Incorporated by reference to the Company’s Current Report on Form 8-K filed on March 30, 2026 (File No. 001-15957).\n\n​\n\n(r)Incorporated by reference to the Company’s Current Report on Form 8-K filed on November 24, 2025 (File No. 110-15957).\n\n​\n\n(s)Incorporated by reference to the Company’s Registration Statement on Form S-8 filed on May 6, 2026 (File No. 333-295611).\n\n​\n\n(t)Incorporated by reference to the Company’s Current Report on Form 8-K filed on November 14, 2025 (File No. 001-15957).\n\n​\n\n(u)Incorporated by reference to the Company’s Current Report on Form 8-K filed on August 14, 2025 (File No. 001-15957).\n\n​\n\n(v)Incorporated by reference to the Company’s Current Report on Form 8-K filed on August 14, 2025 (File No. 001-15957).\n\n​\n\n(w)Incorporated by reference to the Company’s Registration Statement on Form S-3 filed on April 28, 2026 (File No. 333-295366).\n\n​\n\n(x)Incorporated by reference to the Company’s Current Report on Form 8-K filed on April 30, 2026 (File No. 001-15957).\n\n​\n\n​\n\n​\n\n​\n\n[Table of Contents](#TOC)\n\n**SIGNATURES**\n\nPursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nCAPSTONE ENERGY+, INC.\n\n​\n\n​\n\n​\n\n​\n\n​\n\nDate: June 25, 2026\n\n​\n\nBy:\n\n​\n\n/s/ John P. Miller\n\n​\n\n  ​ ​ ​\n\n​\n\nJohn P. Miller\nInterim Chief Financial Officer and Director (Principal Financial Officer)\n\n​\n\nKNOW ALL MEN BY THESE PRESENTS, that we, the undersigned officers and directors of Capstone Energy+, Inc., hereby severally constitute Vince Canino and John P. Miller, and each of them singly, our true and lawful attorneys with full power to them, and each of them singly, to sign for us and in our names in the capacities indicated below, this Annual Report on Form 10-K and any and all amendments to said Form 10-K, and generally to do all such things in our names and in our capacities as officers and directors to enable Capstone Energy+, Inc. to comply with the provisions of the Securities Exchange Act of 1934, and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorneys, or any of them, to said Form 10-K and any and all amendments thereto.\n\nPursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.\n\n**Signature**\n\n  ​ ​ ​\n\n**Title**\n\n**  ​ ​ ​**\n\n**Date**\n\n​\n\n​\n\n​\n\n/s/ Vince J. Canino\n\n​\n\nPresident, Chief Executive Officer and Director (Principal Executive Officer)\n\n​\n\nJune 25, 2026\n\nVince J. Canino\n\n​\n\n​\n\n​\n\n​\n\n​\n\n/s/ John P. Miller\n\n​\n\nInterim Chief Financial Officer and Director (Principal Financial Officer)\n\n​\n\nJune 25, 2026\n\nJohn P. Miller\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n/s/ Candice Graves\n\n​\n\nChief Accounting Officer and Controller (Principal Accounting Officer)\n\n​\n\nJune 25, 2026\n\nCandice Graves\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n/s/ Robert F. Powelson\n\n​\n\nInterim Chair of the Board of Directors\n\n​\n\nJune 25, 2026\n\nRobert F. Powelson\n\n​\n\n​\n\n​\n\n​\n\n​\n\n/s/ Denise Wilson\n\n​\n\nDirector\n\n​\n\nJune 25, 2026\n\nDenise Wilson\n\n​\n\n​\n\n​\n\n​\n\n​\n\n/s/ Ping Fu\n\n​\n\nDirector\n\n​\n\nJune 25, 2026\n\nPing Fu\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n/s/ Christopher J. Close\n\n​\n\nDirector\n\n​\n\nJune 25, 2026\n\nChristopher J. Close\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n/s/ Robert F. Beard\n\n​\n\nDirector\n\n​\n\nJune 25, 2026\n\nRobert F. Beard\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​"}