Question:

When can we expect updates of Ask Management? Once a quarter? Once a year?

Answer from Capstone Management:

All questions submitted to “Ask Management” are recorded and reviewed by Capstone’s CEO. The answers are provided directly from members of the Senior Leadership Team and therefore are subject to the respective individual’s time constraints. The Company strives to provide updates at least on a quarterly basis.

Question:

As a shareholder, I must say I'm pleased to see Hybrid Capstone applications, especially on class 8 trucks. Capstone turbines seem ideal for larger, long haul hybrid 'rigs'. But conversely, can Capstone Turbine systems contribute in another way for electric passenger vehicles? 

I've just seen a CNN report about the stress that charging electric vehicles may place on 'grids', and concerns of running out of charge with no way to recharge. It occurred to me that a small Capstone system would be ideal for "Urban" charging stations for electric vehicles. There should be ample access to natural gas supplies in large cities. Hence, has any thought been given to 'compact, efficient, low emission' passenger vehicle charging systems?? 

Answer from Capstone Management:

Yes, Capstone’s product is an excellent fit for electric vehicle charging stations, and we have had discussions with potential charging station developers. Capstone’s products not only can supply electrical energy without further stressing the local utility grid but in most cases around the world our CARB certified microturbine products are much cleaner than the local utility. Plug-in electric vehicles are only as clean as the electricity used to charge the batteries. Therefore, grids that primarily use coal fired power plants would translate into coal fired electric vehicles and have a negative impact on the environment.

Question:

How many C200 were produced during Fiscal 2010 that were used in the C200, C600, C800 and C1000?

Answer from Capstone Management:

The table below summarizes our revenue (in millions) and megawatts and units shipped by product line for each of Fiscal 2009 and Fiscal 2010:

 

		Years Ended March 31,
		2010									2009
		Revenue			Megawatts			Units			Revenue			Megawatts			Units
C30		$	6.9			5.0			161		$	4.0			3.1			104
C60 Series			17.4			17.7			272			23.8			24.4			375
TA100			1.2			1.1			11			—			—			—
C200			4.9			5.6			28			1.4			1.8			9
C600			2.8			3.0			5			1.0			1.2			2
C800			5.0			6.4			8			1.1			1.6			2
C1000 Series			10.5			14.0			14			1.1			2.0			2
Total from Microturbine Products		$	48.7			52.8			499		$	32.4			34.1			494
Accessories, Parts and Service			12.9			—			—			11.5			—			—
Total		$	61.6			52.8			499		$	43.9			34.1			494

   

 

 

 

Question:

Please explain the Wells Fargo credit problems and possible seizure of Capstone assets upon default.

Answer from Capstone Management:

As of March 31, 2010, Capstone determined that it was not in compliance with the financial covenant in the Credit and Security Agreements (the “Agreements”) with Wells Fargo regarding net income.  On May 11, 2010, Capstone received a notice of default from Wells Fargo related to the noncompliance. As a result, Wells Fargo imposed default pricing of an additional 3.0% effective March 1, 2010.  On June 11, 2010, Capstone received from Wells Fargo a waiver of the noncompliance with the financial covenant as of March 31, 2010, and Capstone amended the Agreements to set the covenants for Fiscal 2011. As a condition of the amended Agreements, Capstone has restricted $5.0 million of cash effective June 11, 2010 as additional security for the Credit Facility.

If Capstone had not obtained the waiver and amended the Agreements, Capstone would not be able to draw additional funds under the Credit Facility. In addition, Capstone has pledged its accounts receivables, inventories, equipment, patents and other assets as collateral for the Agreements, which would be subject to seizure by Wells Fargo if Capstone was in default under the Agreements and unable to repay the indebtedness.  Wells Fargo also has the option to terminate the Agreements or accelerate the indebtedness during a period of noncompliance. Based on its current forecasts, Capstone believes it will maintain compliance with the covenants contained in the amended Agreements for the next twelve months.

 

Question:

Can the 30kW Capstone Microturbine be run on a very high hydrogen content syngas? This would be a very clean gas, comprised of hydrogen and carbon monoxide.

Answer from Capstone Management:

In conjunction with a U.S. Department of Energy program, Capstone is currently developing a flex fuel microturbine that can run on agricultural syngas, which is akin to hydrogen. Capstone anticipates finishing this funded product development project in the next 18 months. After successful completion of this program, Capstone plans to release a hydrogen product.