# Orion Energy Systems, Inc.: Form 10-Q for the period ended Jun 30, 2025

- Company: [Orion Energy Systems, Inc.](/companies/oesx.md) (CIK 1409375)
- Form: 10-Q
- Filed: 2025-08-06
- Accepted by EDGAR: Aug 6, 2025, 16:08 ET
- Period: 2025-06-30
- Accession: 0000950170-25-104003
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1409375/000095017025104003/oesx-20250630.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1409375/000095017025104003/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-04-01 to 2025-06-30 | $19.6m | us-gaap:Revenues |
| Cost of revenue | 3 months, 2025-04-01 to 2025-06-30 | $13.7m | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2025-04-01 to 2025-06-30 | $5.9m | us-gaap:GrossProfit |
| Research and development | 3 months, 2025-04-01 to 2025-06-30 | $208.0k | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2025-04-01 to 2025-06-30 | −$1.0m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2025-04-01 to 2025-06-30 | $13.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-04-01 to 2025-06-30 | −$1.2m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-04-01 to 2025-06-30 | −$0.04 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-04-01 to 2025-06-30 | −$0.04 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-04-01 to 2025-06-30 | 33,315,237 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-04-01 to 2025-06-30 | −$515.0k | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2025-04-01 to 2025-06-30 | $55.0k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2025-06-30 | $3.6m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-06-30 | $32.7m | us-gaap:AssetsCurrent |
| Total assets | at 2025-06-30 | $49.0m | us-gaap:Assets |
| Current liabilities | at 2025-06-30 | $26.6m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-06-30 | $38.2m | us-gaap:Liabilities |
| Long-term debt | at 2025-06-30 | $8.1m | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2025-06-30 | $353.0k | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2025-06-30 | $10.8m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 29,451 characters.

*The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited Condensed Consolidated Financial Statements and related notes included in this Form 10-Q, as well as our audited Consolidated Financial Statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025.*

### Cautionary Note Regarding Forward-Looking Statements

Any statements in this Quarterly Report on Form 10-Q about our expectations, beliefs, plans, objectives, prospects, financial condition, assumptions or future events or performance are not historical facts and are “forward-looking statements” as that term is defined under the federal securities laws. These statements are often, but not always, made through the use of words or phrases such as “believe”, “anticipate”, “should”, “intend”, “plan”, “will”, “expects”, “estimates”, “projects”, “positioned”, “strategy”, “outlook” and similar words. You should read the statements that contain these types of words carefully. Such forward-looking statements are subject to several risks, uncertainties and other factors that could cause actual results to differ materially from what is expressed or implied in such forward-looking statements. There may be events in the future that we are not able to predict accurately or over which we have no control. Potential risks and uncertainties include, but are not limited to, those discussed in “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025. We urge you not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. We do not undertake any obligation to release publicly any revisions to such forward-looking statements to reflect events or uncertainties after the date hereof or to reflect the occurrence of unanticipated events.

### Overview

We provide state-of-the-art light emitting diode (“LED”) lighting systems, wireless Internet of Things (“IoT”) enabled control solutions, project engineering, energy project management design and maintenance services and electric vehicle (“EV”) charging infrastructure solutions. We help our customers achieve their sustainability, energy savings and carbon footprint reduction goals through innovative technology and exceptional service. We research, design, develop, manufacture, market, sell, install, and implement energy management systems consisting primarily of high-performance, energy-efficient commercial and industrial interior and exterior LED lighting systems and related services. Our products are targeted for applications in the following segments: commercial office and retail, area lighting, industrial applications and government, although we do sell and install products into other markets. Our services consist of turnkey installation and system maintenance. Virtually all of our sales occur within North America.

Our principal lighting customers include large national account end-users, electrical distributors, electrical contractors and energy service companies (“ESCOs”). Currently, a significant amount of our interior lighting products are manufactured at our leased production facility located in Manitowoc, Wisconsin, although as the LED and related IoT market continues to evolve, we are increasingly sourcing products and components from third parties in order to provide versatility in our product development and offerings.

We differentiate ourselves from our competitors by offering very efficient light fixtures (measured in lumens per watt) coupled with our project management services to national account customers to retrofit their multiple locations. Our comprehensive services include initial site surveys and audits, utility incentive and government subsidy management, engineering design, and project management from delivery through to installation and controls integration. In addition, we began to offer lighting and electrical maintenance services in fiscal 2021. We believe that providing these services enables us to support a long-term business relationship with our customers and results in an increase in our recurring revenue. We completed the acquisition of Stay-Lite on January 1, 2022, which further expanded our maintenance services capabilities. On October 5, 2022, we acquired Voltrek, LLC ("Voltrek"), which leveraged our project management and maintenance expertise in the EV sector.

We believe the market for LED lighting products and related controls continues to grow. Due to their size and flexibility in application, we also believe that LED lighting systems can address opportunities for retrofit applications that cannot be satisfied by other lighting technologies. Our LED technologies have become the primary component of our revenue as we continue to strive to be a leader in the LED market.

We see opportunity to cross-sell our three platforms of lighting, maintenance services and EV charging installation systems to our commercial and industrial customer base. We are pursuing opportunities to cross-sell to direct customers, as well as through select partners. We also see opportunity for further integration of our service capabilities to expand our geographic reach and we intend to pursue growth organically.

Other than our multi-year maintenance service contracts, we generally do not have long-term contracts with our customers for product or turnkey services that provide us with recurring annual revenue. We typically generate substantially all of our revenue from sales of lighting and control systems and related services to governmental, commercial and industrial customers on a project-by-project basis. We also perform work under global services or product purchasing agreements with major customers with sales completed on a purchase order basis. The loss of, or substantial reduction in sales to, any of our significant customers, or our current single largest customer, or the termination or delay of a significant volume of purchase orders by one or more key customers, could have a material adverse effect on our results of operations in any given future period.

We typically sell our lighting systems in replacement of our customers’ lighting fixtures. We call this replacement process a "retrofit". We frequently engage our customer's existing electrical contractor to provide installation and project management services. We also sell our lighting systems on a wholesale basis, principally to electrical distributors and ESCOs to sell to their own customer bases.

The gross margins of our products can vary significantly depending upon the types of products we sell, with margins typically ranging from 10% to 50%. As a result, a change in the total mix of our sales among higher or lower margin products can cause our profitability to fluctuate from period to period.

Our fiscal year ends on March 31. We refer to our current fiscal year which ends on March 31, 2026 as "fiscal 2026". We refer to our most recently completed fiscal year, which ended on March 31, 2025, as “fiscal 2025”, and our prior fiscal year which ended on March 31, 2024 as "fiscal 2024". Our fiscal first quarter of each fiscal year ends on June 30, our fiscal second quarter ends on September 30, our fiscal third quarter ends on December 31, and our fiscal fourth quarter ends on March 31.

### Recent Developments

### Replacement of our CEO

On April 14, 2025, Michael Jenkins' employment was terminated by Orion, with our Board appointing Sally A. Washlow as our new Chief Executive Officer, effective as of Mr. Jenkins' termination date.

As a result of the termination, Mr. Jenkins received approximately $633 thousand in severance and the acceleration of approximately 322 thousand restricted stock awards. Mr. Jenkins forfeited approximately 646 thousand performance shares along with approximately $170 thousand in tandem cash awards. Additionally, Mr. Jenkins forfeited restricted stock awards not vesting within two years from the termination date, which was a forfeiture of approximately 78 thousand shares.

On April 14, 2025, we entered into an Executive Employment and Severance Agreement with Ms. Washlow (the "Employment Agreement"). The Employment Agreement provides Ms. Washlow with the following compensation arrangements: (i) an annual base salary of $382,500, provided that if our other named executive officers' base salaries are returned to their pre-reduction levels, then Ms. Washlow's base salary will also be similarly adjusted up to $425,000; (ii) a target annual bonus of 100% (threshold 80% and maximum of 200%) of her base salary upon our relative achievement of executive incentive plan performance targets for each fiscal year; (iii) a special bonus of $100,000 if we achieve a stretch goal of $100 million in revenue for fiscal 2026; (iv) a cash signing bonus of $500,000, approximately $300,000 of was required to be used by Ms. Washlow to purchase shares of our common stock directly from us; (v) a pre-change of control severance multiplier of 1.5x and a post-change of control severance multiplier of 2.0x; (vi) an initial equity grant consisting of a non-qualified stock option exercisable for a total of 500,000 shares of our common stock; and (vii) certain other benefits and perquisites. On May 29, 2025, our board and Ms. Washlow mutually agreed to defer Ms. Washlow's cash signing bonus and related direct purchase of common stock for up to one year, with the timing of such cash signing bonus and related direct purchase of our common stock to be reviewed quarterly and mutually agreed upon by the compensation committee and Ms. Washlow.

### Voltrek Earn-Out

Effective on October 5, 2022, we acquired all of the outstanding membership interest of Voltrek, a leading electric vehicle charging company that provides turnkey installation solutions with ongoing support to all commercial verticals.The initial purchase price consisted of $5.0 million cash and $1.0 million of common stock. We also paid $3.0 million in initial earn-out payments based on Voltrek's financial performance in fiscal 2023. We may owe additional material earn-out payments based on Voltrek's financial performance in fiscal 2025. We have currently accrued an estimated liability of approximately $3.3 million for such remaining earn-out payments.

On June 23, 2025, we entered into a binding term sheet (the "Term Sheet") with respect to our remaining earn-out obligations owed to Final Frontier pursuant to our October 5, 2022 acquisition of Voltrek, and on July 31, 2025, we entered into an amendment to the Term Sheet (the "Term Sheet Amendment"). Pursuant to the Term Sheet and Term Sheet Amendment, we agreed to pay Final Frontier $875,000 in full and final payment of our fiscal 2024 Voltrek acquisition earn-out obligations as follows: $500,000 was paid on August 1, 2025 and the remaining $375,000 will be paid on September 3, 2025. We also agreed with Final Frontier to submit the final determination of our fiscal 2025 and aggregate fiscal 2023 through fiscal 2025 earn-out obligations to binding arbitration if not otherwise mutually agreed by the parties. We agreed to pay Final Frontier the finally determined remaining earn-out amount as follows; (i) $1.0 million in our common stock was issued on July 16, 2025 and (ii) the remaining amount will be paid pursuant to the anticipated Senior Subordinated Note. We agreed to pay monthly principal payments to Final Frontier on the anticipated Senior Subordinated Note of $25,000 beginning on January 15, 2026, which will increase to $50,000 on July 15, 2026 through maturity. We will also pay interest monthly to Final Frontier at the annual rate of 7% beginning on July 15, 2025. We have the right to pay up to 20% of the remaining outstanding earn-out amount at maturity in shares of our common stock. The anticipated Senior Subordinated Note will be subordinated to our senior credit facilities with Bank of America and will be secured by a second lien on all of our assets. We and Final Frontier agreed to use our respective commercially reasonable best efforts to agree to final documentation further reflecting the terms and conditions set forth in the Term Sheet within 30 days of entering into the Term Sheet.

The final earn-out amount determined to be owed by us could be in excess of our current accrued liability for such earn-out amount and could materially adversely affect our future liquidity.

### Replacing Reduced Revenue from Primary Customer

In fiscal 2025, 2024, and 2023, one customer accounted for 24.3%, 25.2% and 16.2% of our total revenue, respectively. In fiscal 2026, we expect that our customer concentration will continue at the approximate range experienced in fiscal 2025 and 2024. We continue to attempt to diversify our customer base by expanding our reach to national accounts, ESCOs, the agent driven distribution channel, lighting maintenance customers and the EV market.

### Results of Operations - Three Months Ended June 30, 2025 versus Three Months Ended June 30, 2024

The following table sets forth the line items of our Condensed Consolidated Statements of Operations and as a relative percentage of our total revenue for each applicable period, together with the relative percentage change in such line item between applicable comparable periods (dollars in thousands, except percentages):

|  | Three Months Ended June 30, 2025 Amount | 2024 Amount | % Change | 2025 % of Revenue | 2024 % of Revenue |
| --- | ---: | ---: | ---: | ---: | ---: |
| Product revenue | $13,512 | $12,767 | 5.8% | 69.0% | 64.1% |
| Service revenue | 6,063 | 7,139 | (15.1)% | 31.0% | 35.9% |
| Total revenue | 19,575 | 19,906 | (1.7)% | 100.0% | 100.0% |
| Cost of product revenue | 8,822 | 8,541 | 3.3% | 45.1% | 42.9% |
| Cost of service revenue | 4,852 | 7,066 | (31.3)% | 24.8% | 35.5% |
| Total cost of revenue | 13,674 | 15,607 | (12.4)% | 69.9% | 78.4% |
| Gross profit | 5,901 | 4,299 | 37.3% | 30.1% | 21.6% |
| General and administrative expenses | 4,290 | 4,530 | (5.3)% | 21.9% | 22.8% |
| Sales and marketing expenses | 2,416 | 2,937 | (17.7)% | 12.3% | 14.8% |
| Research and development expenses | 208 | 264 | (21.2)% | 1.1% | 1.3% |
| Loss from operations | (1,013) | (3,432) | (70.5)% | (5.2)% | (17.2)% |
| Interest expense | (169) | (262) | (35.5)% | (0.9)% | (1.3)% |
| Amortization of debt issue costs | (51) | (58) | (12.1)% | (0.3)% | (0.3)% |
| Royalty income | 2 | 15 | NM | 0.0% | 0.2% |
| Interest income | 0 | — | NM | — | — |
| Loss before income tax | (1,231) | (3,737) | (67.1)% | (6.3)% | (18.8)% |
| Income tax expense | 13 | 21 | (38.1)% | 0.1% | 0.1% |
| Net loss | (1,244) | (3,758) | (66.9)% | (6.4)% | (18.9)% |

\* NM - Not Meaningful

*Revenue, Cost of Revenue and Gross Margin.* Product revenue increased 5.8%, or $0.7 million, for the first quarter of fiscal 2026 versus the first quarter of fiscal 2025. Service revenue decreased 15.1%, or $1.1 million, for the first quarter of fiscal 2026 versus the first quarter of fiscal 2025. The resulting decrease in total revenue was due to decreased revenue in the EV segment because of lower volume. Cost of product revenue increased by 3.3%, or $0.3 million, in the first quarter of fiscal 2026 versus the comparable period in fiscal 2025. Cost of service revenue decreased by 31.3%, or $2.2 million, in the first quarter of fiscal 2026 versus the comparable period in fiscal 2025, primarily due to lower volume and the restructuring efforts made in fiscal 2025. Gross margin increased from 21.6% of revenue in the first quarter of fiscal 2025 to 30.1% in the first quarter of fiscal 2026, due primarily to increased margins in all three segments.

#### Operating Expenses

*General and Administrative.* General and administrative expenses decreased 5.3%, or $0.2 million, in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025. This comparative decrease was primarily due to decreased wages and benefits as a result of the restructuring that took place in fiscal 2025, which was partially offset by a one-time sign on bonus related to the hiring of Orion's new CEO.

*Sales and Marketing.* Sales and marketing expenses decreased 17.7%, or $0.5 million, in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025. This comparative decrease was primarily due to the decreased wages and benefits as a result of the restructuring that took place in fiscal 2025.

*Research and Development.* Research and development expenses decreased 21.2%, or $0.1 million, in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025.

### Lighting Segment

Our lighting segment develops and sells lighting products and provides construction and engineering services for our commercial lighting and energy management systems. Our lighting segment provides engineering, design, lighting products and in many cases turnkey solutions for large national accounts, governments, municipalities, schools and other customers mostly through direct sales and also sells lighting products though manufacturer representative agencies and to the wholesale contractor markets through ESCOs and contractors.

The following table summarizes our lighting segment operating results (dollars in thousands):

|  | Three Months Ended June 30, 2025 | 2024 | % Change |
| --- | ---: | ---: | ---: |
| Revenues | $12,882 | $12,751 | 1.0% |
| Operating income | $235 | $(1,206) | 119.5% |
| Operating margin | 1.8% | (9.5)% |  |

Lighting segment revenue in the first quarter of fiscal 2026 increased by 1.0%, or $0.1 million, compared to the first quarter of fiscal 2025. The increase in operating income in this segment was a result of increased production volume along with increased volumes from sourced goods, along with a decrease in cost of sales.

### Maintenance Segment

Our maintenance segment provides retailers, distributors and other businesses with maintenance, repair and replacement services for the lighting and related electrical components deployed in their facilities.

The following table summarizes our maintenance segment operating results (dollars in thousands):

|  | Three Months Ended June 30, 2025 | 2024 | % Change |
| --- | ---: | ---: | ---: |
| Revenues | $3,997 | $3,324 | 20.2% |
| Operating income (loss) | $128 | $(976) | 113.1% |
| Operating margin | 3.2% | (29.4)% |  |

Maintenance segment revenue in the first quarter of fiscal 2026 increased by 20.2%, or $0.7 million, compared to the first quarter of fiscal 2025 primarily due to increased work orders from our major customer. Operating income in this segment increased as a result of an increase in revenues along with a decrease in operating expenses as a result of restructuring efforts in fiscal 2025.

### EV Segment

Our EV segment offers leading electric vehicle charging expertise and provides EV turnkey installation solutions with ongoing support to all commercial verticals.

The following table summarizes our EV segment operations results (dollars in thousands):

|  | Three Months Ended June 30, 2025 | 2024 | % Change |
| --- | ---: | ---: | ---: |
| Revenues | $2,696 | $3,831 | (29.6)% |
| Operating loss | $(322) | $(231) | 39.4% |
| Operating margin | (11.9)% | (6.0)% |  |

27

EV segment revenue in the first quarter of fiscal 2026 decreased by 29.6%, or $1.1 million, compared to the first quarter of fiscal 2025. The decrease in revenue compared to the first quarter of fiscal 2025 was due to a lower revenue volume to municipalities. Operating loss increased $0.1 million in the first quarter of fiscal 2026 due to the decreased revenues mentioned above.

### Liquidity and Capital Resources

### Overview

We believe our existing cash and operating cash flow provide us with the financial flexibility needed to meet our capital requirements, including to fund our budgeted capital expenditures and working capital needs for at least one year from the date of this report, as well as our longer-term capital requirements for periods beyond at least one year from the date of this report.

We had approximately $3.6 million in cash and cash equivalents as of June 30, 2025, compared to $6.0 million at March 31, 2025. Our cash position decreased as a result of an operating loss along with a $1.8 million repayment of debt in the first quarter of fiscal 2026.

Our future liquidity needs and forecasted cash flows are dependent upon many factors, including our relative revenue, gross margins, cash management practices, cost containment, working capital management and capital expenditures. While we believe that we will likely have adequate available cash and equivalents and credit availability under our credit agreement to satisfy our currently anticipated working capital and liquidity requirements for at least the next 12 months based on our current cash flow forecast, if we experience significant liquidity constraints, we may be required to issue equity or debt securities, reduce our sales efforts, implement additional cost savings initiatives or undertake other efforts to conserve our cash.

### Cash Flows

The following table summarizes our cash flows for the three months ended June 30, 2025 and 2024 (in thousands):

|  | Three Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: |
| Operating activities | $(515) | $(2,962) |
| Investing activities | (55) | (24) |
| Financing activities | (1,838) | 3,523 |
| (Decrease) increase in cash and cash equivalents | $(2,408) | $537 |

*Cash Flows Related to Operating Activities.* Cash used in operating activities primarily consisted of net loss adjusted for certain non-cash items, including depreciation, amortization of intangible assets, stock-based compensation, amortization of debt issue costs, provisions for reserves, and the effect of changes in working capital and other activities.

Cash used in operating activities for the first three months of fiscal 2026 was $0.5 million and consisted of our net loss of $1.2 million adjusted for non-cash expense items and net cash provided in changes in operating assets of $0.7 million, the largest of which were inventories, depreciation, amortization, and prepaids, totaling $1.8 million, partially offset by a decrease in accounts payable and an increase in accounts receivable.

Cash used in operating activities for the first three months of fiscal 2025 was $3.0 million and consisted of our net loss of $3.8 million adjusted for non-cash expense items and net cash provided by changes in operating assets of $0.6 million, the largest of which was a $3.9 million decrease in accounts payable, which was mostly offset by increases in accounts receivable and inventories.

*Cash Flows Related to Investing Activities*. Cash used in investing activities of $55 thousand in the first three months of fiscal 2026 consisted primarily of purchases of property and equipment.

Cash used in investing activities of $24 thousand in the first three months of fiscal 2025 consisted primarily of purchases of property and equipment, net of proceeds.

*Cash Flows Related to Financing Activities.* Cash used in financing activities of $1.8 million in the first three months of fiscal 2026 was primarily due to payments on our revolving credit facility and long-term debt.

Cash provided by financing activities of $3.5 million in the first quarter of fiscal 2025 was primarily due to the term loan discussed in Note 12 above, which was partially offset by payments on long-term debt.

### Working Capital

Our net working capital as of June 30, 2025 was $6.1 million, consisting of $32.7 million in current assets and $26.6 million in current liabilities. Our net working capital as of March 31, 2025 was $8.7 million, consisting of $35.5 million in current assets and $26.8 million in current liabilities.

We generally attempt to maintain at least a three-month supply of on-hand inventory of purchased components and raw materials to meet anticipated demand, as well as to reduce our risk of unexpected raw material or component shortages or supply interruptions. Our accounts receivables, inventory, payables and unbilled revenue may increase to the extent our revenue and order levels increase.

### Indebtedness

#### Revolving Credit Agreement

Our credit agreement provides for a $25.0 million revolving credit facility (the “Credit Facility”) that matures on June 30, 2027. Borrowings under the Credit Facility are subject to a borrowing base requirement based on eligible receivables, inventory and cash. As of June 30, 2025, the borrowing base supported approximately $11.5 million of availability under the Credit Facility, with $5.3 million drawn against that availability. As of June 30, 2024, the borrowing base supported approximately $18.3 million of availability under the Credit Facility, with $10.0 million drawn against that availability.

The credit agreement is secured by a first lien security interest in substantially all of our assets.

Borrowings under the credit agreement are permitted in the form of SOFR or prime rate-based loans and generally bear interest at floating rates plus an applicable margin determined by reference to our availability under the Credit Agreement. Among other fees, we are required to pay an annual facility fee of $15,000 and a fee of 25 basis points on the unused portion of the Credit Facility.

The credit agreement includes a springing minimum fixed cost coverage ratio of 1.0 to 1.0 when excess availability under the Credit Facility falls below $4.0 million of the committed facility. Currently, the required springing minimum fixed cost coverage ratio is not required.

#### Voltrek Earn-Out

Effective on October 5, 2022, we acquired all of the outstanding membership interests of Voltrek, a leading electric vehicle charging company that provides turnkey installation solutions with ongoing support to all commercial verticals. The initial purchase price consisted of $5.0 million cash and $1.0 million of common stock. We also paid $3.0 million in initial earn-out payments based on Voltrek’s financial performance in fiscal 2023. We may owe additional material earn-out payments based on Voltrek’s financial performance in fiscal 2025. We have currently accrued an estimated liability of approximately $3.3 million for such remaining earn-out payments.

On June 23, 2025, we entered into the Term Sheet with respect to our remaining earn-out obligations owed to Final Frontier pursuant to our October 5, 2022 acquisition of Voltrek, and on July 31, 2025, we entered into the Term Sheet Amendment. Pursuant to the Term Sheet and the Term Sheet Amendment, we agreed to pay Final Frontier $875,000 in full and final payment of our fiscal 2024 Voltrek acquisition earn-out obligations as follows: $500,000 was paid on August 1, 2025 and the remaining $375,000 will be paid on September 3, 2025. We also agreed with Final Frontier to submit the final determination of our fiscal

2025 and aggregate fiscal 2023 through fiscal 2025 earn-out obligations to binding arbitration if not otherwise mutually agreed by the parties. We agreed to pay to Final Frontier the finally determined remaining earn-out amount as follows: (i) $1.0 million in our common stock was issued on July 16, 2025 and (ii) the remaining amount pursuant to the anticipated Senior Subordinated Note. We agreed to pay monthly principal payments to Final Frontier on the anticipated Senior Subordinated Note of $25,000 beginning on January 15, 2026, which will increase to $50,000 on July 15, 2026 through maturity. We will also pay interest monthly to Final Frontier at the annual rate of 7% beginning on July 15, 2025. We have the right to pay up to 20% of the remaining outstanding earn-out amount at maturity in shares of our common stock. The anticipated Senior Subordinated Note will be subordinated to our senior credit facilities with Bank of America and will be secured by a second lien on all of our assets. We and Final Frontier agreed to use our respective commercially reasonable best efforts to agree to final documentation further reflecting the terms and conditions set forth in the Term Sheet within 30 days of entering into the Term Sheet.

The final earn-out amount determined to be owed by us could be in excess of our current accrued liability for such earn-out amount and could materially adversely affect our future liquidity.

### Backlog

Backlog represents the amount of revenue that we expect to realize in the future as a result of firm, committed purchase orders. Backlog totaled $19.0 million and $17.3 million as of June 30, 2025 and March 31, 2025, respectively. We generally expect our backlog to be recognized as revenue within one year. Backlog does not include any amounts for contracted maintenance services.

### Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

### Critical Accounting Estimates

There have been no material changes to our critical accounting estimates since March 31, 2025. For a full discussion of these estimates and policies, see "Critical Accounting Estimates" within "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2025 Annual Report on Form 10-K.

### Recent Accounting Pronouncements

For a complete discussion of recent accounting pronouncements, refer to Note 2 in the Condensed Consolidated Financial Statements included elsewhere in this report.

## Market risk

As filed, 272 characters.

Our exposure to market risk was discussed in the “Quantitative and Qualitative Disclosures About Market Risk” section contained in our Annual Report on Form 10-K for the year ended March 31, 2025. There have been no material changes to such exposures since March 31, 2025.

## Controls and procedures

As filed, 1,222 characters.

### Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As of June 30, 2025, an evaluation was conducted under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based on this evaluation, such officers have concluded that our disclosure controls and procedures were effective as of June 30, 2025.

### Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) for the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 701 characters.

We operate in a rapidly changing environment that involves a number of risks that could materially affect our business, financial condition or future results, some of which are beyond our control. In addition to the other information set forth in this Quarterly Report on Form 10-Q, the risks and uncertainties that we believe are most important for you to consider are discussed in Part I - Item 1A under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025, which we filed with the SEC on June 26, 2025 and in Part 1 - Item 2 under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Form 10-Q.

Filed Aug 6, 2025.
Source: SEC EDGAR, the filing index for accession 0000950170-25-104003. Last ingested by Listed: Nov 5, 2026, 18:15 ET. No prices; not investment advice.