Question:

I went to Western Energy Systems website. It only mentions Jenbacher. Does this reflect a conflict of interest with Capstone?

Answer from Capstone Management:

Western Energy Systems received approval from GE Jenbacher to represent the Capstone product line because GE Jenbacher was unable to produce a CARB-certified product for Western Energy to sell and market in the California market.

Question:

What amount of CPST stock is held by upper management and the board of directors?

Answer from Capstone Management:

The tables below set forth certain information as of June 30, 2010 (unless otherwise indicated) regarding beneficial ownership of Common Stock by: (1) each director, nominee for director and Named Executive Officer of the Company; (2) all directors and executive officers as a group; and (3) each person known by the Company to be the beneficial owner of more than 5% of the outstanding Common Stock of the Company. As of June 30, 2010, there were 242,348,323 shares of Common Stock outstanding. Except as otherwise indicated, the beneficial owners listed below have sole voting and investment power with respect to all shares owned by them, except to the extent such power is shared by a spouse under applicable law.

 

Name of Beneficial Owner**		Amount and Nature of Beneficial Ownership(1)				Percent of Class
Gilder, Gagnon, Howe & Co. LLC 3 Columbus Circle, 26th Floor New York, NY 10019(2)			41,750,272				17.8	%
Darren R. Jamison(2)			2,754,556				1.1	%
Eliot G. Protsch			224,348				*
Mark G. Gilbreth(3)			1,039,849				*
James D. Crouse			907,320				*
Edward I. Reich(4)			645,002				*
John V. Jaggers(5)			318,243				*
Jayme L. Brooks			175,878				*
Noam Lotan			82,779				*
Darrell J. Wilk			89,006				*
Gary D. Simon			76,966				*
Richard K. Atkinson			59,100				*
Gary J. Mayo			59,834				*
Holly A. Van Deursen			59,854				*
Directors and executive officers as a group (13 persons)			6,492,736				2.6	%

____________

 

*		Less than one percent.
**		Unless otherwise indicated, the address of each person listed is c/o Capstone Turbine Corporation, 21211 Nordhoff Street, Chatsworth, California 91311

(1)

In computing the number of shares beneficially owned by an individual and the percentage ownership of that individual, shares of Common Stock underlying options held by that individual that are currently exercisable, or will become exercisable within 60 days from June 30, 2010, are deemed outstanding. The total number of shares of Common Stock underlying options, pursuant to which such individuals have rights to acquire beneficial ownership of Common Stock within 60 days, is as follows:

 

		Shares Underlying
Name		Options
Darren R. Jamison			2,195,833
Eliot G. Protsch			106,884
Mark G. Gilbreth			894,387
James D. Crouse			775,000
Edward I. Reich			621,875
John V. Jaggers			85,284
Jayme L. Brooks			104,688
Noam Lotan			71,600
Darrell J. Wilk			61,600
Gary D. Simon			61,600
Richard K. Atkinson			61,600
Gary J. Mayo			34,400
Holly A. Van Deursen			34,400

(2)		The number of shares listed as beneficially owned by Gilder, Gagnon, Howe & Co. LLC includes shares held by certain of its affiliates. Information is based solely from a Schedule 13G filed by Gilder, Gagnon, Howe & Co. LLC on March 10, 2010 and amended on June 10, 2010. Gilder, Gagnon, Howe & Co. LLC has sole voting power and sole dispositive power with respect to 1,109,742 shares and shared dispositive power with respect to 40,640,530 shares.
(3)		Mr. Gilbreth disclaims beneficial ownership of 362,708 shares underlying stock options, 15,374 shares underlying restricted stock units and 6,375 shares underlying exercised stock options which were the subject of a divorce decree.
(4)		Mr. Reich disclaims beneficial ownership of 37,500 shares underlying stock options and 21,675 shares underlying restricted stock units which were the subject of a divorce decree.
(5)		The ownership includes: (a) 43,087 shares of Common Stock held by Sevin Rosen Fund V L.P.; (b) 1,842 shares of Common Stock held by Sevin Rosen V Affiliates Fund L.P.; (c) 9,728 shares of Common Stock held by Sevin Rosen VII Affiliates Fund, L.P.; (d) 16 shares of Common Stock held by SRB Associates VII L.P.; and (e) 180,786 shares directly owned by Mr. Jaggers.  Mr. Jaggers is a general partner of SRB Associates V L.P. (the general partner of Sevin Rosen Fund V L.P. and Sevin Rosen V Affiliates Fund L.P.) and of SRB Associates VII L.P. (the general partner of Sevin Rosen VII Affiliates Fund L.P.) and may be deemed to have shared power to dispose of and vote these shares. Mr. Jaggers disclaims beneficial ownership of these shares except to the extent of his proportionate partnership interest in these shares.

 

Question:

You can sell your product all over the world but when it comes to the US. Why is America so far behind? Probably because you're in California and not in the Midwest.

Answer from Capstone Management:

Sales in the United States have historically lagged sales in the rest of the world because the U.S. is less focused on green energy, energy efficiency and renewable portfolio standards. In general, countries with higher energy costs and a strong focus on global warming and energy efficiency have adopted the Capstone product faster than the U.S.  Management is hopeful that the combination of new products, new certifications, new distributors and the Obama Administration will increase future product shipments in the U.S.

Question:

Has UTC's relationship with Capstone deteriorated to the point of direct competitor now with them promoting fuel cell tech. (grocery stores) rather than microturbine installation?

Answer from Capstone Management:

United Technologies Corporation (UTC) has offered both fuel cells and microturbines for many years. UTC sells and markets its fuel cell product in its UTC Power Group and the Capstone product in the Carrier organization as part of its PureComfort product.  Carrier sales locations are today actively promoting and selling the PureComfort product.

Question:

 

Class 1 Division 2 explosion proof C200 offshore oil and gas product. Is Capstone expected to gain market acceptance with this product?

Answer from Capstone Management:

Capstone has had positive penetration into the Oil & Gas market with the C30 and C65 Class 1 Division 2 products. Management expects that the C200 C1 D2 will have similar success in the marketplace. Capstone had received interest in the [C200] C1 D2 product prior to its market release.