Debt |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt |
11. Debt Exit Facility Agreement On 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. The Exit Notes bear interest at Adjusted Term 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. The 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. Amendments to the Exit Note Purchase Agreement First Amendment – June 28, 2024 On 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. Second Amendment – August 13, 2025 On 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. Third Amendment – March 29, 2026 On 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. Financial Covenants The Exit Note Purchase Agreement requires the Company to maintain minimum consolidated liquidity and minimum consolidated adjusted EBITDA, tested as described below. Minimum Consolidated Liquidity The 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:
(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.
Minimum Consolidated Adjusted EBITDA The 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:
As of March 31, 2026, the Company was in compliance with all financial covenants under the Exit Note Purchase Agreement. Outstanding Balance and Maturity As 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. Interest expense related to the term note payable during Fiscal 2026 and 2025 was $3.5 million and $3.8 million, respectively.
The scheduled maturities of the Company’s long-term debt are as follows as of March 31, 2026 (in thousands):
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