1. Nature of the Business and Operations and Liquidity 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 Navys fleet, and lower the cost of wind power. The Companys products leverage its proprietary smart materials and smart software and controls to provide enhanced resiliency and improved performance of megawatt-scale power flow. The Companys consolidated financial statements have been prepared on a going concern basis in accordance with United States generally accepted accounting principles (GAAP) and the Securities and Exchange Commissions (SEC) instructions to Form 10 -K. 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. Liquidity The Company has historically experienced recurring operating losses and as of March 31, 2020 , the Company had an accumulated deficit of $ 978.6 million. In addition, the Company has historically experienced recurring negative operating cash flows. At March 31, 2020 , the Company had cash, cash equivalents, and marketable securities of $ 59.9 million. Marketable securities include certificate of deposits with maturities between eleven and eighteen months. Cash used in operations for the year ended March 31, 2020 was $ 16.5 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 settled 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 U.S. entity 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 include 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 Companys 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 Purchasers 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 is 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 to Inox and a license agreement allowing Inox to manufacture a limited number of electrical control systems. After Inox purchases the specified number of electrical control systems required under the terms of the supply contract, Inox agreed that the Company will continue as Inoxs preferred supplier and Inox will be required to purchase from the Company a majority of its electrical control systems requirements for an additional three -year period. Pursuant to these strategic agreements, Inox must forecast future purchase orders of sets of Electrical Control Systems ("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. On May 29, 2020, the Company sent written notice to Inox notifying Inox of its default under the supply contract due to Inoxs failure to post letters of credit in the amount of 6.0 million for the payment of ECS that Inox is obligated to purchase under the terms of the supply contract. If Inox fails to post letters of credit in the amount of 6.0 million in accordance with the terms of the supply contract within the ninety day cure period after receipt of the default notice, then the Company may terminate the supply contract by providing written notice of such termination to Inox. We cannot predict if and when Inox will post letters of credit consistent with the forecasted ECS quantities. Inoxs failure to post letters of credit and take delivery of forecasted ECS quantities would impact the Companys revenues and liquidity. In the event the Company were to terminate the supply contract, the Company's revenues and liquidity would be impacted. 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 the exercise of 786,000 warrants. The remaining 32,181 warrants expired unexercised on November 13, 2019. In March 2020, the World Health Organization declared the disease caused by the novel coronavirus (COVID- 19 ) to be a pandemic. COVID- 19 has spread throughout the globe, including in the Commonwealth of Massachusetts where the Companys headquarters are located, and in other areas where the Company has business operations. In response to the outbreak, the Company has followed the guidelines of the U.S. Centers for Disease Control and Prevention (CDC) and applicable state government authorities to protect the health and safety of the Companys employees, families, suppliers, customers and communities. While these existing measures and, COVID- 19 generally, have not materially disrupted the Companys business to date, any future actions necessitated by the COVID- 19 pandemic may result in disruption to the Companys business. While the COVID- 19 pandemic continues to rapidly evolve, the Company continues to assess the impact of the COVID- 19 pandemic to best mitigate risk and continue the operations of the Companys business. The extent to which the outbreak impacts the Companys business, liquidity, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including new information that may emerge concerning the severity of the COVID- 19 pandemic and the actions to contain it or treat its impact, among others. If the Company, its customers or suppliers experience prolonged shutdowns or other business disruptions, the Companys business, liquidity, results of operations and financial condition are likely to be materially adversely affected, and the Companys ability to access the capital markets may be limited. The Company believes that based on the information presented above and its annual 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 year ended March 31, 2020 . The Companys 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. The impact of the COVID- 19 pandemic on the global financing markets may reduce the Company's ability to raise additional capital, if necessary, which could negatively impact the Company's liquidity. 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.