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Our products and solutions are based on our patented flywheel and power electronics technology and are designed to ensure continuity for data centers and other mission critical operations in the event of power disturbances. We also offer services, including hardware and software maintenance, on all Active Power products, and other professional services such as assessment and implementation for our customers&#8217; infrastructure projects. </div><div><br /></div><div style="text-align: justify; text-indent: 27pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">Our products and solutions are designed to deliver continuous conditioned power during power disturbances and outages, voltage sags and surges, and provide ride-through power in the event of utility failure, supporting operations until utility power is restored or a longer term alternative power source, such as a diesel generator, is started. We sell our products globally through our direct sales force, manufacturer&#8217;s representatives, Original Equipment Manufacturer (&#8220;OEM&#8221;) channels and IT partners. Our current principal markets are the Americas, Europe, Middle East and Africa (&#8220;EMEA&#8221;), and Asia.</div><div><br /></div><div style="text-align: justify; text-indent: 27pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">We were founded as a Texas Corporation in 1992 and reincorporated in Delaware in 2000 prior to our initial public offering. Our headquarters are in Austin, Texas, with international offices in the United Kingdom, Germany and China.</div><div><br /></div><div style="text-align: justify; text-indent: 27pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;"><font style="font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">The accompanying condensed consolidated balance sheet as of December 31, 2013, which has been derived from our audited financial statements, and the unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (&#8220;US GAAP&#8221;) for interim financial statements and pursuant to the rules and regulations of the Securities and Exchange Commission (&#8220;SEC&#8221;) for interim reporting, and include the accounts of the Company and its consolidated subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring items) necessary to present fairly the consolidated financial position of the Company and its consolidated results of operations and cash flows. These interim financial statements should be read in conjunction with the financial statements and accompanying notes included in the Company&#8217;s Annual Report on Form 10-K for the year ended December 31, 2013. </font><font style="font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">Please refer to our filing on Form 10-Q/A for the period ended March 31, 2013 for information regarding the restatement of our financial results for the period ended March 31, 2013.</font></div></div> 562000 488000 132000 215000 8000 0 0 0 108000 0 108000 0 0 0 0 0 0 0 0 34000 20306000 27349000 -271168000 19000 -215000 706000 290964000 704000 23000 -275042000 301886000 -222000 <div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><div style="text-align: left;"><table cellpadding="0" cellspacing="0" class="DSPFListTable" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><tr><td style="width: 27pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt; vertical-align: top; font-weight: bold; align: right;">6.</td><td style="text-align: left; width: auto; font-family: ''Times New Roman'', Times, serif; font-size: 10pt; vertical-align: top; font-weight: bold;">Stockholders&#8217; Equity</td></tr></table></div><div><br /></div><div style="text-align: justify; text-indent: 27pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">In March 2014, we sold approximately 3.7 million shares of common stock at a purchase price of $3.15 per share in a public underwritten offering made under a shelf registration statement that we had filed with the SEC and that had been declared effective in June 2013. This offering resulted in proceeds, net of expenses including underwriting discounts, commissions and fees of $0.8 million and professional service expenses of $0.2 million, of approximately $10.5 million. 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Occasionally, we offer longer warranty periods to certain customers. The warranty period for products sold to our primary OEM customer, Caterpillar, is 12 months from the date of shipment to the end-user, or up to 36 months from shipment from Active Power. This is dependent upon Caterpillar complying with our storage requirements for our products in order to preserve this warranty period beyond the standard 18-month limit. 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font-size: 10pt;">Balance at December 31, 2013</div></td><td valign="bottom" style="background-color: #cceeff; width: 1%; vertical-align: bottom;">&#160;</td><td valign="bottom" style="text-align: left; background-color: #cceeff; width: 1%; vertical-align: bottom;"><div style="font-family: ''Times New Roman'', Times, serif; color: #000000; font-size: 10pt;">$</div></td><td valign="bottom" style="text-align: right; background-color: #cceeff; width: 9%; vertical-align: bottom;"><div style="font-family: ''Times New Roman'', Times, serif; color: #000000; font-size: 10pt;">562</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; background-color: #cceeff; width: 1%; vertical-align: bottom;">&#160;</td></tr><tr><td valign="bottom" style="background-color: #ffffff; width: 78%; vertical-align: bottom;"><div style="text-align: left; font-family: ''Times New Roman'', Times, serif; color: #000000; margin-left: 9pt; font-size: 10pt;">Warranty expense</div></td><td valign="bottom" style="background-color: #ffffff; 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In general, revenue is recognized when revenue-generating transactions generally fall into one of the following categories of revenue recognition:</div><div><br /></div><div style="text-align: justify;"><table cellpadding="0" cellspacing="0" class="DSPFListTable" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><tr><td style="width: 27pt;"></td><td style="width: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt; vertical-align: top; align: right;">&#9679;</td><td style="text-align: justify; width: auto; font-family: ''Times New Roman'', Times, serif; font-size: 10pt; vertical-align: top;">We recognize product revenue at the time of shipment for a significant portion of all products sold directly to customers and through distributors because title and risk of loss pass on delivery to the common carrier. Our customers and distributors do not have the right to return products. If title and risk of loss pass at some other point in time, we recognize such revenue for our customers when the product is delivered to the customer and title and risk of loss have passed.&#160; We may enter into bill-and-hold arrangements and when this happens delivery may not occur, but other criteria are reviewed to determine proper timing of revenue recognition.</td></tr></table></div><div><br /></div><div style="text-align: left;"><table cellpadding="0" cellspacing="0" class="DSPFListTable" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><tr><td style="width: 27pt;"></td><td style="width: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt; vertical-align: top; align: right;">&#9679;</td><td style="text-align: left; width: auto; font-family: ''Times New Roman'', Times, serif; font-size: 10pt; vertical-align: top;">We recognize installation, service and maintenance revenue at the time the service is performed.</td></tr></table></div><div>&#160;</div><div style="text-align: justify;"><table cellpadding="0" cellspacing="0" class="DSPFListTable" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><tr><td style="width: 27pt;"></td><td style="width: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt; vertical-align: top; align: right;">&#9679;</td><td style="text-align: justify; width: auto; font-family: ''Times New Roman'', Times, serif; font-size: 10pt; vertical-align: top;">We recognize revenue associated with extended maintenance agreements (&#8220;EMAs&#8221;) over the life of the contracts using the straight-line method, which approximates the expected timing in which applicable services are performed. Amounts collected in advance of revenue recognition are recorded as a current liability in the deferred revenue line of the consolidated balance sheet or long-term liability based on the time from the balance sheet date to the future date of revenue recognition.</td></tr></table></div><div><br /></div><div style="text-align: justify;"><table cellpadding="0" cellspacing="0" class="DSPFListTable" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><tr><td style="width: 27pt;"></td><td style="width: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt; vertical-align: top; align: right;">&#9679;</td><td style="text-align: justify; width: auto; font-family: ''Times New Roman'', Times, serif; font-size: 10pt; vertical-align: top;">We recognize revenue on certain rental programs over the life of the rental agreement using the straight-line method. Amounts collected in advance of revenue recognition are recorded as a current or long-term liability based on the time from the balance sheet date to the future date of revenue recognition.</td></tr></table></div><div><br /></div><div style="text-align: left;"><table cellpadding="0" cellspacing="0" class="DSPFListTable" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><tr><td style="width: 27pt;"></td><td style="width: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt; vertical-align: top; align: right;">&#9679;</td><td style="text-align: left; width: auto; font-family: ''Times New Roman'', Times, serif; font-size: 10pt; vertical-align: top;">Shipping costs reimbursed by the customer are included in revenue.</td></tr></table></div><div><br /></div><div style="text-align: justify; text-indent: 27pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">When collectability is not reasonably assured, we defer revenue and will recognize revenue on a cost recovery basis as payments are received.</div><div><br /></div><div style="text-align: justify; text-indent: 27pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">Multiple element arrangements (&#8220;MEAs&#8221;) are arrangements to sell products to customers that frequently include multiple deliverables. Our most significant MEAs include the sale of one or more of our CleanSource&#174; UPS or CleanSource PowerHouse products, combined with one or more of the following products: design services, project management, commissioning and installation services, spare parts or consumables, and EMAs. Delivery of the various products or performance of services within the arrangement may or may not coincide. Certain services related to design and consulting may occur prior to delivery of product.&#160;Commissioning and installation typically take place within six months of product delivery, depending upon customer requirements. EMAs, consumables, and repair, maintenance or consulting services generally are delivered over a period of one to five years. In certain arrangements revenue recognized is limited to the amount invoiced or received that is not contingent on the delivery of future products and services.</div><div><br /></div><div style="text-align: justify; text-indent: 27pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">When arrangements include multiple elements, we allocate revenue to each element based on the relative selling price and recognize revenue when the elements have standalone value and the four criteria for revenue recognition have been met. We establish the selling price of each element based on Vendor Specific Objective Evidence (&#8220;VSOE&#8221;) if available, Third Party Evidence (&#8220;TPE&#8221;) if VSOE is not available, or Best Estimate of Selling Price (&#8220;BESP&#8221;) if neither VSOE nor TPE is available. We generally determine selling price based on amounts charged separately for the delivered and undelivered elements to similar customers in standalone sales of the specific elements. When arrangements include an EMA, we recognize revenue related to the EMA at the stated contractual price on a straight-line basis over the life of the agreement.</div><div><br /></div><div style="text-align: justify; text-indent: 27pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">Any taxes imposed by governmental authorities on our revenue-producing transactions with customers are shown in our consolidated statements of operations on a net-basis; that is, excluded from our reported revenues.</div></div> 424000 483000 -301000 -2000 222000 215000 19225000 20574000 20574000 19225000 101000 82000 P36M P12M P12M P5Y 1 1 4 P18M P6M P1Y 9000 7000 36000 3700000 800000 200000 0 3651000 10481000 0 10485000 4000 Restated