American Superconductor (AMSC) risk factors, FY2026 10-K

Risks Related to Our Operations

1. 01If we fail to implement our business strategy successfully, our financial performance could be harmed
2. 02We cannot assure you that we will realize the revenue we expect to generate from our backlog in the periods we expect to realize such revenue, or at all43% rewritten
3. 03We rely upon third-party suppliers for the components and subassemblies of many of our Grid and Wind products, making us vulnerable to supply shortages and price fluctuations, which could harm our business44% rewritten
4. 04We may acquire additional complementary businesses or technologies, which may require us to incur substantial costs for which we may never realize the anticipated benefits
5. 05unforeseen difficulties operating in new product areas, with new customers, or in new geographic areas, including in emerging markets38% rewritten
6. 06Our business and operations may be materially adversely impacted in the event of a failure or security breach of our or any critical third parties' IT Systems or Confidential Information29% rewritten
7. 07pursue criminal or civil remedies under the False Claims Act, False Statements Act and similar remedy provisions unique to government contracting
8. 08Changes in U.S. government defense spending could negatively impact our financial position, results of operations, liquidity and overall business64% rewritten
9. 09Failure to comply with evolving data privacy and data protection laws, regulations, and other obligations, or to otherwise protect personal data, may adversely impact our business and financial results
10. 10Our success is dependent upon attracting and retaining qualified personnel and our inability to do so could significantly damage our business and prospects
11. 11A significant portion of our Wind segment revenues are derived from a single customer. If this customer’s business is negatively affected, it could adversely impact our business
12. 12Our success in addressing the wind energy market is dependent on the manufacturers that license our designs
13. 13Many of our revenue opportunities are dependent upon subcontractors and other business collaborators
14. 14Problems with product quality or product performance may cause us to incur warranty expenses or product liability charges and may damage our market reputation and prevent us from achieving increased sales and market share25% rewritten
15. 15Many of our customers outside of the United States may be either directly or indirectly related to governmental entities, and we could be adversely affected by violations of the United States Foreign Corrupt Practices Act and similar worldwide anti-bribery laws outside the United States
16. 16We have had limited success marketing and selling our superconductor products and system-level solutions, including our REG system, and our failure to more broadly market and sell our products and solutions could lower our revenue and cash flow 49% rewritten
17. 17We or third parties on whom we depend may be adversely affected by natural disasters, including events resulting from climate change, and our business continuity and disaster recovery plans may not adequately protect us or our value chain from such events
18. 18Uncertainty surrounding our prospects and financial condition may have an adverse effect on our customer and supplier relationships
19. 19Pandemics, epidemics, or other public health crises may adversely impact our business, financial condition and results of operations

Risks Related to Our Financial Performance

1. 20Changes in valuation allowance of deferred tax assets may affect our future operating resultsNew
2. 21If we fail to maintain proper and effective internal control over financial reporting, our ability to produce accurate and timely financial statements could be impaired and may lead investors and other users to lose confidence in our financial data97% rewritten
3. 22Notwithstanding the material weakness, we believe that our financial statements contained in this Annual Report on Form 10-K fairly present our financial position, results of operations and cash flows for the periods covered by this report in all material respectsNew
4. 23We have not been historically profitable, and there can be no assurance that we will sustain our recent profitability. Our operating results may fluctuate significantly from quarter to quarter and may fall below expectations in any particular fiscal quarter29% rewritten
5. 24While we generated positive operating cash flow in fiscal 2025 and the prior year, we have a history of negative operating cash flows, and we may require additional financing in the future, which may not be available to us24% rewritten
6. 25In the event that additional liquidity is required, there can be no assurance that such financing would be available or, if available, that such financing could be obtained upon terms acceptable to us, which would have a material adverse effect on our business, financial condition and prospects
7. 26Changes in exchange rates could adversely affect our results of operations
8. 27We may be required to issue performance bonds, which restricts our ability to access any cash used as collateral for the bonds

Risks Related to Our Markets

1. 28Adverse changes in domestic and global economic conditions could adversely affect our operating results60% rewritten
2. 29Our international operations are subject to risks that we do not face in the United States, which could have an adverse effect on our operating results
3. 30natural disasters, pandemics, political unrest, war or acts of terrorism38% rewritten
4. 31Our products face competition, which could limit our ability to acquire or retain customers82% rewritten
5. 32With our HTS-based REG product, we are offering a new approach that provides alternatives to utilities for power system design. Therefore, we believe that we compete with traditional approaches such as new full-sized substations, overhead and underground transmission, and urban power transformers
6. 33As the HTS systems markets develop, other large industrial companies may enter those fields and compete with us. If we are unable to compete successfully, it may harm our business, which in turn may limit our ability to acquire or retain customers
7. 34Industry consolidation could result in more powerful competitors and fewer customers
8. 35Evolving and varied expectations on environmental sustainability and social initiatives could adversely impact our business and financial results New
9. 36Growth of the wind energy market depends largely on the availability and size of government subsidies, economic incentives and legislative programs designed to support the growth of wind energy32% rewritten
10. 37Lower prices for other energy sources may reduce the demand for wind energy development, which could have a material adverse effect on our ability to grow our Wind business

Risks Related to Our Technologies

1. 38Our technology and products could infringe intellectual property rights of others, which may require costly litigation and, if we are not successful, could cause us to pay substantial damages and disrupt our business
2. 39We may be unable to adequately prevent disclosure of trade secrets and other proprietary information
3. 40Our patents may not provide meaningful or long-term protection for our technology, which could result in us losing some or all of our market position
4. 41In particular, if any material patents expire, we may not be able to prevent competitors from producing products similar to ours, possibly at lower prices, which could adversely impact our business, results of operations, and financial condition
5. 42Third parties have or may acquire patents that cover the materials, processes and technologies we use or may use in the future to manufacture our Amperium products, and our success depends on our ability to license such patents or other proprietary rights
6. 43There are a number of technological challenges that must be successfully addressed before our superconductor products can gain widespread commercial acceptance, and our inability to address such technological challenges could adversely affect our ability to acquire customers for our products

Risks Related to Our Common Stock

1. 44Our common stock has experienced, and may continue to experience, market price and volume fluctuations, which may prevent our stockholders from selling our common stock at a profit and could lead to costly litigation against us that could divert our management’s attention
2. 45Unfavorable results of legal proceedings could have a material adverse effect on our business, operating results and financial condition