##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q/A
 (Amendment No.1)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Quarterly Period Ended September 30, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission file number 001-33887
 Orion Energy Systems, Inc.
 (Exact name of Registrant as specified in its charter)
 Wisconsin
    
    39-1847269(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification number)2210 Woodland Drive, Manitowoc, Wisconsin
    
    54220(Address of principal executive offices)
    
    (Zip code)
 Registrants telephone number, including area code: (920) 892-9340
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### Table of Contents



EXPLANATORY NOTE
 As used herein, unless otherwise expressly stated or the context otherwise requires, all
references to Orion, we, us, our, Company and similar references are to Orion Energy
Systems, Inc. and its consolidated subsidiaries.
    
 
 
     2




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##### 



Orion Energy Systems, Inc.
 Quarterly Report On Form 10-Q/A
 For The Quarter Ended September 30, 2009
 Table Of Contents
 Page(s)PART I FINANCIAL INFORMATION
    
    
    4ITEM 1. Financial Statements (unaudited)
    
    
    4Condensed Consolidated Balance Sheets as of March 31, 2009 and September 30, 2009
    
    
    4Condensed Consolidated Statements of Operations for the Three and Six Months Ended September 30, 2008 and 2009
    
    
    5Condensed Consolidated Statements of Cash Flows for the Six Months Ended September 30, 2008 and 2009
    
    
    6Notes to the Condensed Consolidated Financial Statements
    
    
    7ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    21ITEM 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    31ITEM 4. Controls and Procedures
    
    
    31PART II OTHER INFORMATION
    
    
    32ITEM 1. Legal Proceedings
    
    
    32ITEM 1A. Risk Factors
    
    
    32ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    34ITEM 5. Other Information
    
    
    35ITEM 6. Exhibits
    
    
    36SIGNATURES
    
    
    37Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   3




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1:
    
    Financial Statements
 ORION ENERGY SYSTEMS, INC. AND SUBSIDIARIES
 
 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
 (in thousands, except share and per share amounts)
 March 31,
    
    
    September 30,2009
    
    
    2009(As Restated)AssetsCash and cash equivalents
    
    $
    36,163
    
    
    $
    33,413Short-term investments
    
    
    6,490
    
    
    
    1,000Accounts receivable, net of allowances of $222 and $316
    
    
    11,572
    
    
    
    13,447Inventories, net
    
    
    20,232
    
    
    
    19,672Deferred tax assets
    
    
    548
    
    
    
    1,629Prepaid expenses and other current assets
    
    
    3,369
    
    
    
    1,396Total current assets
    
    
    78,374
    
    
    
    70,557Property and equipment, net
    
    
    22,999
    
    
    
    23,974Patents and licenses, net
    
    
    1,404
    
    
    
    1,482Deferred tax assets
    
    
    593
    
    
    
    1,068Long-term accounts receivable
    
    
    
    
    
    
    2,432Other long-term assets
    
    
    352
    
    
    
    88Total assets
    
    $
    103,722
    
    
    $
    99,601Liabilities and Shareholders EquityAccounts payable
    
    $
    7,817
    
    
    $
    5,479Accrued expenses
    
    
    2,315
    
    
    
    3,018Current maturities of long-term debt
    
    
    815
    
    
    
    693Total current liabilities
    
    
    10,947
    
    
    
    9,190Long-term debt, less current maturities
    
    
    3,647
    
    
    
    3,337Other long-term liabilities
    
    
    433
    
    
    
    507Total liabilities
    
    
    15,027
    
    
    
    13,034Commitments and contingencies (See Note F)Shareholders equity:Preferred stock, $0.01 par value: Shares authorized: 30,000,000 shares at March 31, 2009 and
September 30, 2009; no shares issued and outstanding at March 31, 2009 and September 30, 2009
    
    
    
    
    
    
    Common stock, no par value: Shares authorized: 200,000,000 at March 31, 2009 and September
30, 2009; shares issued: 28,875,879 and 29,173,406 at March 31, 2009 and September 30, 2009;
shares outstanding: 21,528,783 and 21,721,667 at March 31, 2009 and September 30, 2009
    
    
    
    
    
    
    Additional paid-in capital
    
    
    118,907
    
    
    
    120,098Treasury stock: 7,347,096 and 7,451,739 common shares at March 31, 2009 and September 30, 2009
    
    
    (31,536
    )
    
    
    (31,936
    )Accumulated other comprehensive (loss) income
    
    
    (32
    )
    
    
    61Retained earnings (deficit)
    
    
    1,356
    
    
    
    (1,656
    )Total shareholders equity
    
    
    88,695
    
    
    
    86,567Total liabilities and shareholders equity
    
    $
    103,722
    
    
    $
    99,601
   4




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##### Table of Contents



ORION ENERGY SYSTEMS, INC. AND SUBSIDIARIES
 
 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (in thousands, except share and per share amounts)
 Three Months Ended September 30,
    
    
    Six Months Ended September 30,2008
    
    
    2009
    
    
    2008
    
    
    2009(As Restated)
    
    
    
    
    
    (As Restated)Product revenue
    
    $
    17,280
    
    
    $
    15,219
    
    
    $
    30,169
    
    
    $
    27,143Service revenue
    
    
    1,480
    
    
    
    856
    
    
    
    4,697
    
    
    
    2,807Total revenue
    
    
    18,760
    
    
    
    16,075
    
    
    
    34,866
    
    
    
    29,950Cost of product revenue
    
    
    11,467
    
    
    
    10,122
    
    
    
    20,080
    
    
    
    18,870Cost of service revenue
    
    
    958
    
    
    
    632
    
    
    
    3,254
    
    
    
    1,887Total cost of revenue
    
    
    12,425
    
    
    
    10,754
    
    
    
    23,334
    
    
    
    20,757Gross profit
    
    
    6,335
    
    
    
    5,321
    
    
    
    11,532
    
    
    
    9,193Operating expenses:General and administrative
    
    
    2,893
    
    
    
    3,143
    
    
    
    5,508
    
    
    
    6,307Sales and marketing
    
    
    2,771
    
    
    
    2,962
    
    
    
    5,423
    
    
    
    6,113Research and development
    
    
    373
    
    
    
    491
    
    
    
    791
    
    
    
    910Total operating expenses
    
    
    6,037
    
    
    
    6,596
    
    
    
    11,722
    
    
    
    13,330Income (loss) from operations
    
    
    298
    
    
    
    (1,275
    )
    
    
    (190
    )
    
    
    (4,137
    )Other income (expense):Interest expense
    
    
    (41
    )
    
    
    (73
    )
    
    
    (108
    )
    
    
    (127
    )Dividend and interest income
    
    
    550
    
    
    
    147
    
    
    
    1,167
    
    
    
    383Total other income
    
    
    509
    
    
    
    74
    
    
    
    1,059
    
    
    
    256Income (loss) before income tax
    
    
    807
    
    
    
    (1,201
    )
    
    
    869
    
    
    
    (3,881
    )Income tax expense (benefit)
    
    
    354
    
    
    
    (269
    )
    
    
    382
    
    
    
    (869
    )Net income (loss)
    
    $
    453
    
    
    $
    (932
    )
    
    $
    487
    
    
    $
    (3,012
    )Basic net income (loss) per share
    
    $
    0.02
    
    
    $
    (0.04
    )
    
    $
    0.02
    
    
    $
    (0.14
    )Weighted-average common shares outstanding
    
    
    26,959,790
    
    
    
    21,707,477
    
    
    
    26,998,857
    
    
    
    21,648,246Diluted net income (loss) per share
    
    $
    0.02
    
    
    $
    (0.04
    )
    
    $
    0.02
    
    
    $
    (0.14
    )Weighted-average common shares and share
equivalents outstanding
    
    
    29,018,991
    
    
    
    21,707,477
    
    
    
    29,613,684
    
    
    
    21,648,246
   5




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##### Table of Contents



ORION ENERGY SYSTEMS, INC. AND SUBSIDIARIES
 
 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (in thousands)
 Six Months Ended September 30,2008
    
    
    2009(As Restated)Operating activitiesNet income (loss)
    
    $
    487
    
    
    $
    (3,012
    )Adjustments to reconcile net income (loss) to net cash used
in operating activities:Depreciation and amortization
    
    
    856
    
    
    
    1,325Stock-based compensation expense
    
    
    846
    
    
    
    663Deferred income tax (benefit) expense
    
    
    193
    
    
    
    (1,556
    )Change in allowance for notes and accounts receivable
    
    
    20
    
    
    
    353Other
    
    
    62
    
    
    
    (3
    )Changes in operating assets and liabilities:Accounts receivable
    
    
    1,275
    
    
    
    (1,969
    )Inventories
    
    
    (2,096
    )
    
    
    560Prepaid expenses and other assets and liabilities
    
    
    (1,504
    )
    
    
    (383
    )Accounts payable
    
    
    (43
    )
    
    
    (2,338
    )Accrued expenses
    
    
    (467
    )
    
    
    703Net cash used in operating activities
    
    
    (371
    )
    
    
    (5,657
    )Investing activitiesPurchase of property and equipment
    
    
    (6,865
    )
    
    
    (2,235
    )Purchase of property and equipment held under operating leases
    
    
    
    
    
    
    Purchase of short-term investments
    
    
    (17,415
    )
    
    
    Sale of short-term investments
    
    
    
    
    
    
    5,583Additions to patents and licenses
    
    
    (1,074
    )
    
    
    (131
    )Proceeds from sales of long term assets
    
    
    860
    
    
    
    6Gain on sale of long term investment
    
    
    (361
    )
    
    
    Net cash provided by (used in) investing activities
    
    
    (24,855
    )
    
    
    3,223Financing activitiesPayment of long-term debt
    
    
    (405
    )
    
    
    (433
    )Repurchase of common stock into treasury
    
    
    (8,138
    )
    
    
    (400
    )Excess tax benefits from stock-based compensation
    
    
    505
    
    
    
    Deferred financing costs and offering costs
    
    
    7
    
    
    
    Proceeds from issuance of common stock
    
    
    1,352
    
    
    
    517Net cash used in financing activities
    
    
    (6,679
    )
    
    
    (316
    )Net decrease in cash and cash equivalents
    
    
    (31,905
    )
    
    
    (2,750
    )Cash and cash equivalents at beginning of period
    
    
    78,312
    
    
    
    36,163Cash and cash equivalents at end of period
    
    $
    46,407
    
    
    $
    33,413Supplemental cash flow information:Cash paid for interest
    
    $
    186
    
    
    $
    149Cash paid for income taxes
    
    
    83
    
    
    
    30Supplemental disclosure of non-cash investing and financing
activitiesLong-term note receivable received on sale of investment
    
    $
    298
    
    
    $
    
   6




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##### Table of Contents



ORION ENERGY SYSTEMS, INC. AND SUBSIDIARIES
 
 UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 NOTE A  DESCRIPTION OF BUSINESS
 Organization
  NOTE B  RESTATEMENT OF FINANCIAL STATEMENTS
      Consolidated Balance Sheets as of September 30, 2009As Previouslyreported
    
    
    Adjustments
    
    
    As RestatedAssets:Accounts receivable
    
    $
    12,742
    
    
    $
    705
    
    
    $
    13,447Deferred tax assets, current
    
    
    765
    
    
    
    864
    
    
    
    1,629Prepaid expenses and other current assets
    
    
    1,520
    
    
    
    (124
    )
    
    
    1,396Total current assets
    
    
    69,112
    
    
    
    1,445
    
    
    
    70,557Property and equipment, net
    
    
    25,739
    
    
    
    (1,765
    )
    
    
    23,974Deferred tax assets, long-term
    
    
    1,886
    
    
    
    (818
    )
    
    
    1,068Accounts receivable, long-term
    
    
    
    
    
    
    2,432
    
    
    
    2,432Total assets
    
    
    98,307
    
    
    
    1,294
    
    
    
    99,601Liabilities and Shareholders Equity:Accrued expenses
    
    
    2,885
    
    
    
    133
    
    
    
    3,018Shareholders equity:Retained deficit
    
    
    (2,817
    )
    
    
    1,161
    
    
    
    (1,656
    )
  7




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##### Table of Contents



Consolidated Statements of OperationsThree months ended September 30, 2009
    
    
    Six months ended September 30, 2009As Previously
    
    
    
    
    
    
    
    
    
    
    As Previouslyreported
    
    
    Adjustments
    
    
    As Restated
    
    
    reported
    
    
    Adjustments
    
    
    As RestatedProduct revenue
    
    $
    13,763
    
    
    $
    1,456
    
    
    $
    15,219
    
    
    $
    24,440
    
    
    $
    2,703
    
    
    $
    27,143Cost of product revenue
    
    
    9,222
    
    
    
    900
    
    
    
    10,122
    
    
    
    17,094
    
    
    
    1,776
    
    
    
    18,870Interest expense
    
    
    (74
    )
    
    
    1
    
    
    
    (73
    )
    
    
    (130
    )
    
    
    3
    
    
    
    (127
    )Dividend and interest
income
    
    
    76
    
    
    
    71
    
    
    
    147
    
    
    
    198
    
    
    
    185
    
    
    
    383Income tax benefit
    
    
    (430
    )
    
    
    161
    
    
    
    (269
    )
    
    
    (824
    )
    
    
    (45
    )
    
    
    (869
    )Net loss
    
    
    (1,399
    )
    
    
    467
    
    
    
    (932
    )
    
    
    (4,172
    )
    
    
    1,161
    
    
    
    (3,012
    )Net loss per share
attributable to common
shareholders  basic
and diluted
    
    $
    (0.06
    )
    
    $
    0.02
    
    
    $
    (0.04
    )
    
    $
    (0.19
    )
    
    $
    0.05
    
    
    $
    (0.14
    )Weighted average
common shares
outstanding  basic
and diluted
    
    
    21,707,477
    
    
    
    
    
    
    
    21,707,477
    
    
    
    21,648,246
    
    
    
    
    
    
    
    21,648,246
 Consolidated Statements of Cash FlowsSix months ended September 30, 2009As PreviouslyReported
    
    
    Adjustments
    
    
    As RestatedNet loss
    
    $
    (4,172
    )
    
    $
    1,161
    
    
    $
    (3,012
    )Deferred income tax benefit
    
    
    (1,510
    )
    
    
    (46
    )
    
    
    (1,556
    )Accounts receivable
    
    
    (1,264
    )
    
    
    (705
    )
    
    
    (1,969
    )Prepaid
expenses and other assets and liabilities
    
    
    1,845
    
    
    
    (2,228
    )
    
    
    (383
    )Accrued expenses
    
    
    651
    
    
    
    52
    
    
    
    703Net cash used in operating activities
    
    
    (3,890
    )
    
    
    (1,767
    )
    
    
    (5,657
    )Purchase of property and equipment
    
    
    (2,501
    )
    
    
    266
    
    
    
    (2,235
    )Purchase of property and equipment held under operating leases
    
    
    (1,501
    )
    
    
    1,501
    
    
    
    Other long-term assetsNet cash provided by investing activities
    
    
    1,456
    
    
    
    1,767
    
    
    
    3,223
 NOTE C  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Principles of consolidation
   8




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Basis of presentation
     Use of estimates
  Reclassification
  Cash and cash equivalents
  Short-term investments available for sale
  March 31, 2009Amortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    
    
    
    
    Cash and Cash
    
    
    Short TermCost
    
    
    Gains
    
    
    Losses
    
    
    Fair Value
    
    
    Equivalents
    
    
    InvestmentsMoney market funds
    
    $
    14,114
    
    
    $
    
    
    
    $
    
    
    
    $
    14,114
    
    
    $
    14,114
    
    
    $
    Bank certificate of deposit
    
    
    9,007
    
    
    
    
    
    
    
    
    
    
    
    9,007
    
    
    
    6,207
    
    
    
    2,800Commercial paper
    
    
    3,690
    
    
    
    
    
    
    
    
    
    
    
    3,690
    
    
    
    
    
    
    
    3,690Corporate obligations
    
    
    2,257
    
    
    
    
    
    
    
    (7
    )
    
    
    2,250
    
    
    
    2,250
    
    
    
    Government agency obligations
    
    
    12,412
    
    
    
    
    
    
    
    (25
    )
    
    
    12,387
    
    
    
    12,387
    
    
    
    Total
    
    $
    41,480
    
    
    $
    
    
    
    $
    (32
    )
    
    $
    41,448
    
    
    $
    34,958
    
    
    $
    6,490
 September 30, 2009Amortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    
    
    
    
    Cash and Cash
    
    
    Short TermCost
    
    
    Gains
    
    
    Losses
    
    
    Fair Value
    
    
    Equivalents
    
    
    InvestmentsMoney market funds
    
    $
    22,107
    
    
    $
    
    
    
    $
    
    
    
    $
    22,107
    
    
    $
    22,107
    
    
    $
    Bank certificate of deposit
    
    
    7,282
    
    
    
    
    
    
    
    
    
    
    
    7,282
    
    
    
    6,282
    
    
    
    1,000Commercial paper
    
    
    3,639
    
    
    
    61
    
    
    
    
    
    
    
    3,700
    
    
    
    3,700
    
    
    
    Total
    
    $
    33,028
    
    
    $
    61
    
    
    $
    
    
    
    $
    33,089
    
    
    $
    32,089
    
    
    $
    1,000
  9




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##### Table of Contents



Fair value of financial instruments
  Accounts receivable
   Fiscal 2010
    
    $
    36Fiscal 2011
    
    
    25Total gross receivable
    
    
    61Less: amount representing interest
    
    
    (4
    )Net contracts receivable
    
    $
    57
  10




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##### Table of Contents



Inventories
    March 31,
    
    
    September 30,2009
    
    
    2009Raw materials and components
    
    $
    9,629
    
    
    $
    9,383Work in process
    
    
    1,753
    
    
    
    574Finished goods
    
    
    8,850
    
    
    
    9,715$
    20,232
    
    
    $
    19,672
 Property and Equipment
  March 31,
    
    
    September 30,2009
    
    
    2009(As Restated)Land and land improvements
    
    $
    822
    
    
    $
    1,435Buildings
    
    
    5,435
    
    
    
    14,127Furniture, fixtures and office equipment
    
    
    3,432
    
    
    
    5,010Plant equipment
    
    
    6,882
    
    
    
    7,190Construction in progress
    
    
    11,366
    
    
    
    2,26227,937
    
    
    
    30,024Less: accumulated depreciation and amortization
    
    
    (4,938
    )
    
    
    (6,050
    )Net property and equipment
    
    $
    22,999
    
    
    $
    23,974
  March 31,
    
    
    September 30,2009
    
    
    2009Equipment
    
    $
    1,104
    
    
    $
    1,104Less: accumulated amortization
    
    
    (477
    )
    
    
    (535
    )Net equipment
    
    $
    627
    
    
    $
    569
  Patents and Licenses
   11




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##### Table of Contents



Long-Term Receivables
  Investment
  Other Long-Term Assets
  Accrued Expenses
    Three Months Ended
    
    
    Six Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2009
    
    
    2008
    
    
    2009Beginning of period
    
    $
    63
    
    
    $
    65
    
    
    $
    69
    
    
    $
    55Provision to cost of revenue
    
    
    17
    
    
    
    10
    
    
    
    20
    
    
    
    20Charges
    
    
    (34
    )
    
    
    (33
    )
    
    
    (43
    )
    
    
    (33
    )End of period
    
    $
    46
    
    
    $
    42
    
    
    $
    46
    
    
    $
    42
 Revenue Recognition
  
    
    persuasive evidence of an arrangement exists;
    
    delivery has occurred and title has passed to the customer;
    
    the sales price is fixed and determinable and no further obligation exists; and
    
    collectability is reasonably assured
   12




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##### Table of Contents



March 31,
    
    
    September 30,2009
    
    
    2009Deferred revenue  current liability
    
    $
    103
    
    
    $
    98Deferred revenue  long term liability
    
    
    36
    
    
    
    109Total deferred revenue
    
    $
    139
    
    
    $
    207
 Income Taxes
   Six Months Ended,September 30, 2008
    
    
    September 30, 2009Unrecognized tax benefits as of beginning of period
    
    $
    392
    
    
    $
    397Decreases relating to settlements with tax authorities
    
    
    (5
    )
    
    
    Additions based on tax positions related to the current period positions
    
    
    6
    
    
    
    1Unrecognized tax benefits as of end of period
    
    $
    393
    
    
    $
    398
   13




---



##### Table of Contents



Six Months EndedSeptember 30, 2008
    
    
    September 30, 2009(As Restated)Statutory federal tax rate
    
    
    34.00
    %
    
    
    (34.0
    )%State taxes, net
    
    
    5.47
    %
    
    
    2.6
    %Stock-based compensation expense
    
    
    4.16
    %
    
    
    5.0
    %Federal tax credit
    
    
    0.00
    %
    
    
    (3.5
    )%State tax credit
    
    
    0.00
    %
    
    
    (0.4
    )%Permanent items
    
    
    0.00
    %
    
    
    0.1
    %Change in valuation reserve
    
    
    0.00
    %
    
    
    5.1
    %Other, net
    
    
    0.35
    %
    
    
    2.7
    %Effective income tax rate
    
    
    43.98
    %
    
    
    (22.4
    )%
  Stock Option Plans
  Three months Ended September 30,
    
    
    Six months Ended September 30,2008
    
    
    2009
    
    
    2008
    
    
    2009Weighted average expected term
    
    6.0 years
    
    
    7.3 years
    
    
    5.7 years
    
    
    6.5 yearsRisk-free interest rate
    
    
    3.35
    %
    
    
    2.77
    %
    
    
    3.24
    %
    
    
    2.57
    %Expected volatility
    
    
    60
    %
    
    
    60
    %
    
    
    60
    %
    
    
    60
    %Expected forfeiture rate
    
    
    2
    %
    
    
    3
    %
    
    
    2
    %
    
    
    3
    %Expected dividend yield
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %
 Net Income (Loss) per Common Share
   Three Months Ended
    
    
    Six Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2009
    
    
    2008
    
    
    2009(As Restated)
    
    
    
    
    
    (As Restated)Numerator:Net income (loss)
    
    $
    453
    
    
    $
    (932
    )
    
    $
    487
    
    
    $
    (3,012
    )Denominator:Weighted-average common shares outstanding
    
    
    26,959,790
    
    
    
    21,707,477
    
    
    
    26,998,857
    
    
    
    21,648,246Weighted-average effect of restricted
stock, and assumed conversion of stock
options and warrants
    
    
    2,059,201
    
    
    
    644,920
    
    
    
    2,614,827
    
    
    
    788,723Weighted-average common shares and common
share equivalents outstanding
    
    
    29,018,991
    
    
    
    22,352,397
    
    
    
    29,613,684
    
    
    
    22,436,969
  14




---



##### Table of Contents



Concentration of Credit Risk and Other Risks and Uncertainties
     Segment Information
   Recent Accounting Pronouncements
 Subsequent Events.
 The FASB Accounting
Standards Codification and the Hierarchy of Generally Accepted Accounting Principles
 Multiple-Deliverable
Revenue Arrangements  a consensus of the FASB Emerging Issues Task Force
  15




---



##### Table of Contents



NOTE D  RELATED PARTY TRANSACTIONS
      NOTE E  LONG-TERM DEBT
  March 31,
    
    
    September 30,2009
    
    
    2009Term note
    
    $
    1,235
    
    
    $
    1,128First mortgage note payable
    
    
    990
    
    
    
    956Debenture payable
    
    
    885
    
    
    
    867Lease obligations
    
    
    227
    
    
    
    87Other long-term debt
    
    
    1,125
    
    
    
    992Total long-term debt
    
    
    4,462
    
    
    
    4,030Less current maturities
    
    
    (815
    )
    
    
    (693
    )Long-term debt, less current maturities
    
    $
    3,647
    
    
    $
    3,337
 Revolving Credit Agreement
    16




---



##### Table of Contents



NOTE F  COMMITMENTS AND CONTINGENCIES
 Operating Leases and Purchase Commitments
  Litigation
     17




---



##### Table of Contents



NOTE G  SHAREHOLDERS EQUITY
 Share Repurchase Program
  Shareholder Rights Plan
     NOTE H  STOCK OPTIONS AND WARRANTS
    18




---



##### Table of Contents



Three Months Ended September 30,
    
    
    Six Months Ended September 30,2008
    
    
    2009
    
    
    2008
    
    
    2009Cost of product revenue
    
    $
    65
    
    
    $
    53
    
    
    $
    130
    
    
    $
    112General and administrative
    
    
    171
    
    
    
    145
    
    
    
    425
    
    
    
    267Sales and marketing
    
    
    145
    
    
    
    136
    
    
    
    271
    
    
    
    265Research and development
    
    
    7
    
    
    
    9
    
    
    
    20
    
    
    
    19Total
    
    $
    388
    
    
    $
    343
    
    
    $
    846
    
    
    $
    663
   Options OutstandingWeightedWeighted
    
    
    AverageShares
    
    
    
    
    
    
    Average
    
    
    Remaining
    
    
    AggregateAvailable for
    
    
    Number
    
    
    Exercise
    
    
    Contractual
    
    
    IntrinsicGrant
    
    
    of Shares
    
    
    Price
    
    
    Term (in years)
    
    
    valueBalance at March 31, 2009
    
    
    1,070,954
    
    
    
    3,680,945
    
    
    $
    3.40
    
    
    
    6.82Granted stock options
    
    
    (549,227
    )
    
    
    549,227
    
    
    
    3.38Granted shares in lieu of cash compensation
    
    
    (2,843
    )
    
    
    
    
    
    
    Forfeited
    
    
    212,360
    
    
    
    (212,360
    )
    
    
    5.22Exercised
    
    
    
    
    
    
    (265,498
    )
    
    
    1.70Balance at September 30, 2009
    
    
    731,244
    
    
    
    3,752,314
    
    
    $
    3.41
    
    
    
    6.89
    
    
    $
    2,871,547Exercisable at September 30, 2009
    
    
    
    
    
    
    1,702,251
    
    
    $
    2.65
    
    
    
    5.21
    
    
    $
    1,999,824
   Non-vested at March 31, 2009
    
    
    1,821,827Granted
    
    
    549,227Vested
    
    
    (108,631
    )Forfeited
    
    
    (212,360
    )Non-vested at September 30, 2009
    
    
    2,050,063
   19




---



##### Table of Contents



WeightedAverageNumber of
    
    
    ExerciseShares
    
    
    PriceBalance at March 31, 2009
    
    
    488,504
    
    
    $
    2.31Issued
    
    
    
    
    
    
    Exercised
    
    
    (29,186
    )
    
    $
    2.30Cancelled
    
    
    
    
    
    
    Balance at September 30, 2009
    
    
    459,318
    
    
    $
    2.31
  Exercise Price
    
    Number of 
Warrants
    
    
    Expiration$2.25
    
    
    38,980
    
    
    Fiscal 2014$2.30
    
    
    383,078
    
    
    Fiscal 2010$2.50
    
    
    37,260
    
    
    Fiscal 2011Total
    
    
    459,318
  20




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##### Table of Contents



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 The following discussion and analysis should be read in conjunction with our unaudited consolidated
financial statements and related notes, included elsewhere in this Quarterly Report on Form 10-Q/A.
The information below has been adjusted to reflect the impact of the restatement of our financial
results which is more fully described in Note B Restatement to the unaudited consolidated
financial statements contained in this Quarterly Report on Form 10-Q/A and under the paragraph
Restatement of Previously Issued Consolidated Financial Statements below and does not reflect any
subsequent information or events occurring after the Original Filing or to modify or update those
disclosures affected by subsequent events.
 Cautionary Note Regarding Forward-Looking Statements
 Any statements in this Quarterly Report on Form 10-Q/A about our expectations, beliefs, plans,
objectives, prospects, financial condition, assumptions or future events or performance are not
historical facts and are forward-looking statements as that term is defined under the federal
securities laws. These statements are often, but not always, made through the use of words or
phrases such as believe, anticipate, should, intend, plan, will, expects,
estimates, projects, positioned, strategy, outlook and similar words. You should read the
statements that contain these types of words carefully. Such forward-looking statements are subject
to a number of risks, uncertainties and other factors that could cause actual results to differ
materially from what is expressed or implied in such forward-looking statements. There may be
events in the future that we are not able to predict accurately or over which we have no control.
Potential risks and uncertainties include, but are not limited to, those discussed in Part I, Item
1A. Risk Factors in our 2009 Annual Report filed on Form 10-K for the year ended March 31, 2009
and elsewhere in this Quarterly Report. We urge you not to place undue reliance on these
forward-looking statements, which speak only as the date of this report. We do not undertake any
obligation to release publicly any revisions to such forward-looking statements to reflect events
or uncertainties after the date hereof or to reflect the occurrence of unanticipated events.
 Restatement of Previously Issued Consolidated Financial Statements
    
 
 
  21




---



##### Table of Contents



Consolidated Balance Sheets as of September 30, 2009As Previouslyreported
    
    
    Adjustments
    
    
    As RestatedAssets:Accounts receivable
    
    $
    12,742
    
    
    $
    705
    
    
    $
    13,447Deferred tax assets, current
    
    
    765
    
    
    
    864
    
    
    
    1,629Prepaid expenses and other current assets
    
    
    1,520
    
    
    
    (124
    )
    
    
    1,396Total current assets
    
    
    69,112
    
    
    
    1,445
    
    
    
    70,557Property and equipment, net
    
    
    25,739
    
    
    
    (1,765
    )
    
    
    23,974Deferred tax assets, long-term
    
    
    1,886
    
    
    
    (818
    )
    
    
    1,068Accounts receivable, long-term
    
    
    
    
    
    
    2,432
    
    
    
    2,432Total assets
    
    
    98,307
    
    
    
    1,294
    
    
    
    99,601Liabilities and Shareholders Equity:Accrued expenses
    
    
    2,885
    
    
    
    133
    
    
    
    3,018Shareholders equity:Retained deficit
    
    
    (2,817
    )
    
    
    1,161
    
    
    
    (1,656
    )
 Consolidated Statements of OperationsThree months ended September 30, 2009
    
    
    Six months ended September 30, 2009As Previously
    
    
    
    
    
    
    
    
    
    
    As Previouslyreported
    
    
    Adjustments
    
    
    As Restated
    
    
    reported
    
    
    Adjustments
    
    
    As RestatedProduct revenue
    
    $
    13,763
    
    
    $
    1,456
    
    
    $
    15,219
    
    
    $
    24,440
    
    
    $
    2,703
    
    
    $
    27,143Cost of product revenue
    
    
    9,222
    
    
    
    900
    
    
    
    10,122
    
    
    
    17,094
    
    
    
    1,776
    
    
    
    18,870Interest expense
    
    
    (74
    )
    
    
    1
    
    
    
    (73
    )
    
    
    (130
    )
    
    
    3
    
    
    
    (127
    )Dividend and interest
income
    
    
    76
    
    
    
    71
    
    
    
    147
    
    
    
    198
    
    
    
    185
    
    
    
    383Income tax benefit
    
    
    (430
    )
    
    
    161
    
    
    
    (269
    )
    
    
    (824
    )
    
    
    (45
    )
    
    
    (869
    )Net loss
    
    
    (1,399
    )
    
    
    467
    
    
    
    (932
    )
    
    
    (4,172
    )
    
    
    1,161
    
    
    
    (3,012
    )Net loss per share
attributable to common
shareholders  basic
and diluted
    
    $
    (0.06
    )
    
    $
    0.02
    
    
    $
    (0.04
    )
    
    $
    (0.19
    )
    
    $
    0.05
    
    
    $
    (0.14
    )Weighted average
common shares
outstanding  basic
and diluted
    
    
    21,707,477
    
    
    
    
    
    
    
    21,707,477
    
    
    
    21,648,246
    
    
    
    
    
    
    
    21,648,246
 Consolidated Statements of Cash FlowsSix months ended September 30, 2009As PreviouslyReported
    
    
    Adjustments
    
    
    As RestatedNet loss
    
    $
    (4,172
    )
    
    $
    1,161
    
    
    $
    (3,012
    )Deferred income tax benefit
    
    
    (1,510
    )
    
    
    (46
    )
    
    
    (1,556
    )Accounts receivable
    
    
    (1,264
    )
    
    
    (705
    )
    
    
    (1,969
    )Prepaid
expenses and other assets and liabilities
    
    
    1,845
    
    
    
    (2,228
    )
    
    
    (383
    )Accrued expenses
    
    
    651
    
    
    
    52
    
    
    
    703Net cash used in operating activities
    
    
    (3,890
    )
    
    
    (1,767
    )
    
    
    (5,657
    )Purchase of property and equipment
    
    
    (2,501
    )
    
    
    266
    
    
    
    (2,235
    )Purchase of property and equipment held under
operating leases
    
    
    (1,501
    )
    
    
    1,501
    
    
    
    Other long-term assetsNet cash provided by (used in) investing activities
    
    
    1,456
    
    
    
    1,767
    
    
    
    3,223
  22




---



##### Table of Contents



Overview
      Recent Developments
   23




---



##### Table of Contents



Revenue and Expense Components
 Revenue.
       24




---



##### Table of Contents



Contracted Revenue.
 Backlog.
 Cost of Revenue.
 Gross Margin.
 Operating Expenses.
  25




---



##### Table of Contents



Interest Expense.
 Dividend and Interest Income.
 Income Taxes.
   26




---



##### Table of Contents



Results of Operations
  Three Months Ended September 30,
    
    
    Six Months Ended September 30,2008
    
    
    2009
    
    
    
    
    
    
    2008
    
    
    2009(As Restated)
    
    
    (As Restated)
    
    
    (As Restated)
    
    
    
    
    
    
    
    
    
    
    (As Restated)
    
    
    (As Restated)
    
    
    (As Restated)% of
    
    
    
    
    
    
    % of
    
    
    %
    
    
    
    
    
    
    % of
    
    
    
    
    
    % of
    
    
    %Amount
    
    
    Revenue
    
    
    Amount
    
    
    Revenue
    
    
    Change
    
    
    Amount
    
    
    Revenue
    
    
    Amount
    
    
    Revenue
    
    
    ChangeProduct revenue
    
    $
    17,280
    
    
    
    92.1
    %
    
    $
    15,219
    
    
    
    94.7
    %
    
    
    (11.9
    )%
    
    $
    30,169
    
    
    
    86.5
    %
    
    $
    27,143
    
    
    
    90.6
    %
    
    
    (10.0
    )%Service revenue
    
    
    1,480
    
    
    
    7.9
    %
    
    
    856
    
    
    
    5.3
    %
    
    
    (42.2
    )%
    
    
    4,697
    
    
    
    13.5
    %
    
    
    2,807
    
    
    
    9.4
    %
    
    
    (40.2
    )%Total revenue
    
    
    18,760
    
    
    
    100.0
    %
    
    
    16,075
    
    
    
    100.0
    %
    
    
    (14.3
    )%
    
    
    34,866
    
    
    
    100.0
    %
    
    
    29,950
    
    
    
    100.0
    %
    
    
    (14.1
    )%Cost of product revenue
    
    
    11,467
    
    
    
    61.1
    %
    
    
    10,122
    
    
    
    63.0
    %
    
    
    (11.7
    )%
    
    
    20,080
    
    
    
    57.6
    %
    
    
    18,870
    
    
    
    63.0
    %
    
    
    (6.0
    )%Cost of service revenue
    
    
    958
    
    
    
    5.1
    %
    
    
    632
    
    
    
    3.9
    %
    
    
    (34.0
    )%
    
    
    3,254
    
    
    
    9.3
    %
    
    
    1,887
    
    
    
    6.3
    %
    
    
    (42.0
    )%Total cost of revenue
    
    
    12,425
    
    
    
    66.2
    %
    
    
    10,754
    
    
    
    66.9
    %
    
    
    (13.4
    )%
    
    
    23,334
    
    
    
    66.9
    %
    
    
    20,757
    
    
    
    69.3
    %
    
    
    (11.0
    )%Gross profit
    
    
    6,335
    
    
    
    33.8
    %
    
    
    5,321
    
    
    
    33.1
    %
    
    
    (16.0
    )%
    
    
    11,532
    
    
    
    33.1
    %
    
    
    9,193
    
    
    
    30.7
    %
    
    
    (20.3
    )%General and administrative expenses
    
    
    2,893
    
    
    
    15.4
    %
    
    
    3,143
    
    
    
    19.6
    %
    
    
    8.6
    %
    
    
    5,508
    
    
    
    15.8
    %
    
    
    6,307
    
    
    
    21.1
    %
    
    
    14.5
    %Sales and marketing expenses
    
    
    2,771
    
    
    
    14.8
    %
    
    
    2,962
    
    
    
    18.4
    %
    
    
    6.9
    %
    
    
    5,423
    
    
    
    15.6
    %
    
    
    6,113
    
    
    
    20.4
    %
    
    
    12.7
    %Research and development expenses
    
    
    373
    
    
    
    2.0
    %
    
    
    491
    
    
    
    3.1
    %
    
    
    31.6
    %
    
    
    791
    
    
    
    2.3
    %
    
    
    910
    
    
    
    3.0
    %
    
    
    15.0
    %Income (loss) from operations
    
    
    298
    
    
    
    1.6
    %
    
    
    (1,275
    )
    
    
    (7.9
    )%
    
    
    (527.9
    )%
    
    
    (190
    )
    
    
    (0.5
    )%
    
    
    (4,137
    )
    
    
    (13.8
    )%
    
    NMInterest expense
    
    
    41
    
    
    
    0.2
    %
    
    
    73
    
    
    
    0.5
    %
    
    
    78.0
    %
    
    
    108
    
    
    
    0.3
    %
    
    
    127
    
    
    
    0.4
    %
    
    
    17.6
    %Dividend and interest income
    
    
    550
    
    
    
    2.9
    %
    
    
    147
    
    
    
    0.9
    %
    
    
    (73.3
    )%
    
    
    1,167
    
    
    
    3.3
    %
    
    
    383
    
    
    
    1.3
    %
    
    
    (67.2
    )%Income (loss) before income tax
    
    
    807
    
    
    
    4.3
    %
    
    
    (1,201
    )
    
    
    (7.5
    )%
    
    
    (248.8
    )%
    
    
    869
    
    
    
    2.5
    %
    
    
    (3,881
    )
    
    
    (13.0
    )%
    
    
    (546.6
    )%Income tax expense (benefit)
    
    
    354
    
    
    
    1.9
    %
    
    
    (269
    )
    
    
    (1.7
    )%
    
    
    (176.0
    )%
    
    
    382
    
    
    
    1.1
    %
    
    
    (869
    )
    
    
    (2.9
    )%
    
    
    (327.5
    )%Net income (loss)
    
    $
    453
    
    
    
    2.4
    %
    
    $
    (932
    )
    
    
    (5.8
    )%
    
    
    (305.7
    )%
    
    $
    487
    
    
    
    1.4
    %
    
    $
    (3,012
    )
    
    
    (10.1
    )%
    
    
    (718.5
    )%
 
 NM = Not Meaningful Revenue.
 Cost of Revenue and Gross Margin.
 Operating Expenses
 General and Administrative.
  27




---



##### Table of Contents



Sales and Marketing.
  Research and Development.
 Interest Expense.
 Dividend and Interest Income.
 Income Taxes.
 Liquidity and Capital Resources
 Overview
    28




---



##### Table of Contents



Cash Flows
  Six Months EndedSeptember 30,2008
    
    
    2009(As Restated)Operating activities
    
    $
    (371
    )
    
    $
    (5,657
    )Investing activities
    
    
    (24,855
    )
    
    
    3,223Financing activities
    
    
    (6,679
    )
    
    
    (316
    )Decrease in cash and cash equivalents
    
    $
    (31,905
    )
    
    $
    (2,750
    )
 Cash Flows Related to Operating Activities.
   Cash Flows Related to Investing Activities.
  Cash Flows Related to Financing Activities.
   29




---



##### Table of Contents



Working Capital
   Indebtedness
 Revolving Credit Agreement
      Capital Spending
   30




---



##### Table of Contents



Contractual Obligations and Commitments
  Less than 1
    
    
    
    
    
    
    
    
    
    
    More than 5Total
    
    
    Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    YearsBank debt obligations
    
    $
    4,030
    
    
    $
    693
    
    
    $
    1,200
    
    
    $
    926
    
    
    $
    1,211Cash interest payments on debt
    
    
    1,063
    
    
    
    208
    
    
    
    316
    
    
    
    189
    
    
    
    350Operating lease obligations
    
    
    3,660
    
    
    
    938
    
    
    
    1,914
    
    
    
    601
    
    
    
    207Purchase order and cap-ex commitments (1)
    
    
    11,637
    
    
    
    10,462
    
    
    
    1,175
    
    
    
    
    
    
    
    Total
    
    $
    20,390
    
    
    $
    12,301
    
    
    $
    4,605
    
    
    $
    1,716
    
    
    $
    1,768
 
 (1)
    
    Reflects non-cancellable purchase order commitment in the amount of $10.7 million for certain
inventory items entered into in order to secure better pricing and ensure materials on hand
and capital expenditure commitments in the amount of $0.9 million for improvements to
information technology systems and manufacturing equipment and tooling. Off-Balance Sheet Arrangements
  Inflation
  Critical Accounting Policies and Estimates
  Recent Accounting Pronouncements
  
 ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4.
    
    CONTROLS AND PROCEDURES
   31




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##### Table of Contents



Evaluation of Disclosure Controls and Procedures
   
 PART II OTHER INFORMATION
 
 ITEM 1.
    
    LEGAL PROCEEDINGS
     
 ITEM 1A.
    
    RISK FACTORS
   32




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Our potential addition of new renewable energy technologies into our product, application or
service offerings involves many risks and uncertainties. Many technologies do not become
commercially profitable products, applications or services despite extensive development and
commercialization efforts.
   
    
    Unanticipated and/or substantial delays;
 
    
    Unanticipated and/or substantially increased costs;
 
    
    Unrecoverable and/or substantially increased expenses;
 
    
    Technical, reliability, durability or quality problems, including potential warranty and/or
product liability claims;
 
    
    Insufficiency of dedicated or budgeted funds;
 
    
    Inability to meet targeted cost or performance objectives;
 
    
    Inability to satisfy industry standards or consumer expectations and needs;
 
    
    Regulatory obstacles;
 
    
    Competition;
 
    
    Inability to prove the original concept;
 
    
    Lack of demand; and
 
    
    Diversion of our managements and employees focus and/or attention.
  OTV may not be able to identify suitable new technologies, we may invest too much in new
technologies, our management could be distracted by new technologies and we could fail to develop
any new products, applications or services successfully.
   33




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##### Table of Contents



We may not be able to obtain additional equity capital or debt financing necessary to effectively
introduce and commercialize any new alternative renewable energy technologies identified by OTV
into our product, application and service offerings.
  
    
    The price, volatility and trading volume and history of our common stock.
 
    
    Our current and future financial results and position, including our recent losses
generated from operations.
 
    
    The markets view of our industry and products.
 
    
    The perception in the equity and debt markets of our ability to execute our business plan.
 We have no operating history in the solar photovoltaic or wind energy industries that can be used
to evaluate our potential prospects for success in these industries.
   OTVs pursuit of solar photovoltaic and/or wind electricity generating technologies is subject to
risks specific to the solar photovoltaic and/or wind industry.
  
    
    The market for photovoltaic and wind electricity generating technologies has been adversely
affected by the recessionary economic conditions over the past year, and we cannot guarantee
that demand will return or increase in the future.
 
    
    A variety of solar power, wind power and other renewable energy technologies may be
currently under development by other companies that could result in higher or more effective
product performance than the performance expected to be produced by any technology that we
decide to offer.
 
    
    Our ability to generate revenue and profitability from adding solar photovoltaic and/or
wind electricity generating technologies into our product, application or service offerings
will be dependent on consumer acceptance and the economic feasibility of solar and/or wind
generated energy.
 
    
    A drop in the retail price of conventional energy or other alternate renewable energy
sources may negatively impact our ability to generate revenue and profitability from solar
photovoltaic and/or wind generated energy technologies.
 
    
    The reduction, elimination or expiration of government mandates and subsidies or economic
or tax rebates, credits and/or incentives for alternative renewable energy systems would
likely substantially reduce the demand for, and economic feasibility of, any solar
photovoltaic and/or wind electricity generating products, applications or services and could
materially reduce any prospects for our successfully introducing any new products,
applications or services using such technologies.
 
 ITEM 2.
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 (b) Use of Proceeds
   34




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(c) Purchases of Equity Securities
  Total Number ofTotal
    
    
    
    
    
    
    Shares Purchased as
    
    
    Approximate Dollar ValueNumber of
    
    
    
    
    
    
    Part of Publicly
    
    
    of Shares that May Yet BeShares
    
    
    Average Price
    
    
    Announced Plans
    
    
    Purchased Under thePeriod
    
    Purchased
    
    
    Paid per Share
    
    
    or Programs(1)
    
    
    Plans or Programs(1)July 1  July 31, 2009
    
    
    46,667
    
    
    $
    3.75
    
    
    
    46,667
    
    
    $
    335,000August 1  August 31, 2009
    
    
    0
    
    
    $
    0
    
    
    
    0
    
    
    $
    335,000September 1  September 30, 2009
    
    
    23,962
    
    
    $
    3.13
    
    
    
    23,962
    
    
    $
    260,00070,629
    
    
    
    
    
    
    
    70,629
 
 (1)
    
    On December 15, 2008, we announced that our board of directors had authorized the
repurchase of up to an additional $10 million of our outstanding common stock. The action
supplemented the $20 million share repurchase authorization announced on July 17, 2008.
Unless terminated earlier by resolution of our board of directors, this repurchase program
will expire when we have repurchased all shares authorized for repurchase thereunder. 
 ITEM 5.
    
    OTHER INFORMATION
 Statistical Data
  Cumulative FromDecember 1, 2001Through September 30, 2009(in thousands, unaudited)HIF lighting systems sold(1)
    
    
    1,572Total units sold (including HIF lighting systems)
    
    
    2,037Customer kilowatt demand reduction(2)
    
    
    477Customer kilowatt hours saved(2)(3)
    
    
    9,230,379Customer electricity costs saved(4)
    
    $
    710,739Indirect carbon dioxide emission reductions from customers energy savings (tons)(5)
    
    
    6,135Square footage retrofitted(6)
    
    
    806,946
 
 (1)
    
    HIF lighting systems includes all HIF units sold under the brand name Compact Modular and
its predecessor, Illuminator.(2)
    
    A substantial majority of our HIF lighting systems, which generally operate at approximately
224 watts per six-lamp fixture, are installed in replacement of HID fixtures, which generally
operate at approximately 465 watts per fixture in commercial and industrial applications. We
calculate that each six-lamp HIF lighting system we install in replacement of an HID fixture
generally reduces electricity consumption by approximately 241 watts (the difference between
465 watts and 224 watts). In retrofit projects where we replace fixtures other than HID
fixtures, or where we replace fixtures with products other than our HIF lighting systems
(which other products generally consist of products with lamps similar to those used in our
HIF systems, but with varying frames,
ballasts or power packs), we generally achieve similar wattage reductions (based on an analysis
of the operating wattages of each of our fixtures compared to the operating wattage of the
fixtures they typically replace). We calculate the amount of kilowatt demand reduction by
multiplying (i) 0.241 kilowatts per six-lamp equivalent unit we install by (ii) the number of
units we have installed in the period presented, including products other than our HIF lighting
systems (or a total of approximately 2.0 million units).  35




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##### Table of Contents



(3)
    
    We calculate the number of kilowatt hours saved on a cumulative basis by assuming the
reduction of 0.241 kilowatts of electricity consumption per six-lamp equivalent unit we
install and assuming that each such unit has averaged 7,500 annual operating hours since its
installation.(4)
    
    We calculate our customers electricity costs saved by multiplying the cumulative total
customer kilowatt hours saved indicated in the table by $0.077 per kilowatt hour. The national
average rate for 2008, which is the most current full year for which this information is
available, was $0.098 per kilowatt hour according to the United States Energy Information
Administration.(5)
    
    We calculate this figure by multiplying (i) the estimated amount of carbon dioxide emissions
that result from the generation of one kilowatt hour of electricity (determined using the
Emissions and Generation Resource Integration Database, or EGrid, prepared by the United
States Environmental Protection Agency), by (ii) the number of customer kilowatt hours saved
as indicated in the table. The calculation of indirect carbon dioxide emissions reductions
reflects the most recent Environmental Protection Agency eGrid data.(6)
    
    Based on 2.04 million total units sold, which contain a total of approximately 10.2 million
lamps. Each lamp illuminates approximately 75 square feet. The majority of our installed
fixtures contain six lamps and typically illuminate approximately 450 square feet. 
 ITEM 6.
    
    EXHIBITS
 (a) Exhibits
 10.1
    
    Letter Agreement, dated as of August 27, 2009, between Orion Energy Systems, Inc. and
John H. Scribante, filed as Exhibit 10.1 to Orion Energy Systems, Inc.s Form 8-K filed on
September 2, 2009, is hereby incorporated by reference as Exhibit 10.1. *
 10.2
    
    Executive Employment and Severance Agreement, dated September 8, 2009, by and between
Stuart L. Ralsky and Orion Energy Systems, Inc. *+
 31.1
    
    Certification of Chief Executive Officer of Orion Energy Systems, Inc. pursuant to Rule
13a-14(a) or Rule 15d-14(a) promulgated under the Securities Exchange Act of 1934, as
amended.
 31.2
    
    Certification of Chief Financial Officer of Orion Energy Systems, Inc. pursuant to Rule
13a-14(a) or Rule 15d-14(a) promulgated under the Securities Exchange Act of 1934, as
amended.
 32.1
    
    Certification of Chief Executive Officer of Orion Energy Systems, Inc. pursuant to Rule
13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 32.2
    
    Certification of Chief Financial Officer of Orion Energy Systems, Inc. pursuant to Rule
13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 *
    
    Management contract or compensatory plan or arrangement.+
    
    Previously filed.  36




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##### Table of Contents



SIGNATURE
  ORION ENERGY SYSTEMS, INC.
RegistrantBy:
    /s/ Scott R. JensenScott R. JensenChief Financial Officer(Principal Financial Officer and Authorized Signatory)  37




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Exhibit Index to Form 10-Q for the Period Ended September 30, 2009
 10.2
    
    Executive Employment and Severance Agreement, dated September 8, 2009, by and between Stuart
L. Ralsky and Orion Energy Systems, Inc.+
 31.1
    
    Certification of Chief Executive Officer of Orion Energy Systems, Inc. pursuant to Rule
13a-14(a) or Rule 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
 31.2
    
    Certification of Chief Financial Officer of Orion Energy Systems, Inc. pursuant to Rule
13a-14(a) or Rule 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
 32.1
    
    Certification of Chief Executive Officer of Orion Energy Systems, Inc. pursuant to Rule
13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 32.2
    
    Certification of Chief Financial Officer of Orion Energy Systems, Inc. pursuant to Rule
13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 +
    
    Previously filed.  38