Significant Accounting Policies (Policies)

9 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Nature of Business and Operations, Policy [Policy Text Block]

Nature of the Business and Operations

American Superconductor Corporation (together with its subsidiaries, “AMSC®” or the “Company”) was founded on

April 

9,

1987.

The Company is a leading system provider of megawatt-scale power solutions that enhance the performance of the power grid, protect the Navy’s fleet, and lower the cost of wind power. The Company’s system level products leverage its proprietary “smart materials” and “smart software and controls” to provide enhanced resiliency and improved performance of megawatt-scale power flow.

These unaudited condensed consolidated financial statements of the Company have been prepared on a going concern basis in accordance with United States generally accepted accounting principles (“GAAP”) and the Securities and Exchange Commission’s (“SEC”) instructions to Form

10

-Q. The going concern basis of presentation assumes that the Company will continue operations and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those instructions. The year-end condensed balance sheet data was derived from audited financial statements but does

not

include all disclosures required by GAAP. The unaudited condensed consolidated financial statements, in the opinion of management, reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the results for the interim periods ended

December 31, 2019

and 

2018

and the financial position at

December 31, 2019

; however, these results are

not

necessarily indicative of results which

may

be expected for the full year. The interim condensed consolidated financial statements, and notes thereto, should be read in conjunction with the audited consolidated financial statements for the year ended

March 31, 2019

, and notes thereto, included in the Company’s annual report on Form

10

-K for the year ended 

March 31, 2019

filed with the Securities and Exchange Commission on

June 5, 2019.

Liquidity, Policy [Policy Text Block]

Liquidity

The Company has historically experienced recurring operating losses and as of

December 31, 2019

, the Company had an accumulated deficit of $

972.7

million. In addition, the Company has historically experienced recurring negative operating cash flows.  At

December 31, 2019

, the Company had cash, cash equivalents, and marketable securities of $

60.5

million, with

no

outstanding debt other than ordinary trade payables. Marketable securities include certificate of deposits with maturities between

eleven

and

twenty-four

months.  Cash used in operations for the 

nine

months ended 

December 31, 2019

was $

17.8

million.

On

July 

3,

2018,

the Company and its wholly-owned subsidiaries Suzhou AMSC Superconductor Co. Ltd. (“AMSC China”) and AMSC Austria GMBH (“AMSC Austria”) entered into a settlement agreement (the “Settlement Agreement”) with Sinovel Wind Group Co., Ltd. (“Sinovel”). The Settlement Agreement settles the litigation and arbitration proceedings between the Company and Sinovel. Under the terms of the Settlement Agreement, Sinovel agreed to pay AMSC China an aggregate cash amount in Renminbi (“RMB”) equivalent to

$57.5

million, consisting of

two

installments. Sinovel paid the

first

installment of the RMB equivalent of

$32.5

million on

July 

4,

2018,

which was repatriated to the Company during the

nine

months ended

December 

31,

2018

and paid the

second

installment of the RMB equivalent of

$25.0

million on

December 27, 2018. 

The Company’s fiscal

2018

results included the net gain received from the settlement with Sinovel of

$52.7

million.

On

February 1, 2018,

ASC Devens LLC (the “Seller”), a wholly-owned subsidiary of the Company, entered into a Purchase and Sale Agreement (the “PSA”) with

64

Jackson, LLC (the “Purchaser”) and Stewart Title Guaranty Company (“Escrow Agent”), to effectuate the sale of certain real property located at

64

Jackson Road, Devens, Massachusetts, including the building that had served as the Company’s headquarters (collectively, the “Property”), in exchange for total consideration of

$23.0

million, composed of (i) cash consideration of

$17.0

million, and (ii) a

$6.0

million subordinated secured commercial promissory note payable to the Company (the “Seller Note”). Subsequently, the Seller, the Purchaser and Jackson

64

MGI, LLC (“Assignee”) entered into an Assignment of Purchase and Sale Agreement (the “Assignment Agreement”), pursuant to which the Purchaser assigned all of its rights and interests in the PSA to the Assignee and the Assignee agreed to assume all of the Purchaser’s obligations and liabilities under the PSA. The transaction closed on

March 28, 2018,

at which time the Company received, from the Assignee, cash consideration, net of certain agreed upon closing costs, of

$16.9

million, and the Seller Note at an interest rate of

1.96%.

The Seller Note was secured by a subordinated

second

mortgage on the Property and a subordinated

second

assignment of leases and rents.  The Company received the

first

$3.0

million payment due pursuant to the Seller Note on

March 28, 2019

and the

second

$3.0

million payment plus interest on

May 23, 2019.

In

December 2015,

the Company entered into a set of strategic agreements valued at approximately

$210.0

million with Inox Wind Ltd. (“Inox” or “Inox Wind”), which includes a multi-year supply contract pursuant to which the Company will supply electrical control systems ("ECS") to Inox and a license agreement allowing Inox to manufacture a limited number of ECS. After Inox purchases the specified number of ECS required under the terms of the supply contract, Inox agreed that the Company will continue as Inox’s preferred supplier and Inox will be required to purchase from the Company a majority of its ECS requirements for an additional

three

-year period. Pursuant to these strategic agreements, Inox must forecast future purchase orders of sets of ECS which become firm orders

three

months prior to shipment, and Inox must post letters of credit before the Company will ship such orders. Inox is currently delinquent on its obligation to post letters of credit for sets of ECS that Inox forecasted to purchase under the terms of the supply contract.  We cannot predict if and when Inox will post letters of credit consistent with the forecasted ECS quantities. Inox’s failure to post letters of credit and take delivery of forecasted ECS quantities would impact the Company’s revenues and liquidity.

The Company issued warrants in conjunction with an equity offering to Hudson Bay Capital ("Hudson") in

November 2014 (

the "Hudson Warrant").  The Hudson Warrant was partially exercised on

November 13, 2019

with an exercise price of

$7.81.

The Company received

$6.1

million in cash for

786,000

warrants. The remaining

32,181

warrants expired on

November 13, 2019.

The Company believes that based on the information presented above and its quarterly management assessment, it has sufficient liquidity to fund its operations and capital expenditures for the next

twelve

months following the issuance of the financial statements for the

nine

months ended

December 31, 2019

. The Company’s liquidity is highly dependent on its ability to increase revenues, including its ability to collect revenues under its agreements with Inox, its ability to control its operating costs, and its ability to raise additional capital, if necessary. There can be

no

assurance that the Company will be able to continue to raise additional capital, on favorable terms or at all, from other sources or execute on any other means of improving liquidity described above.