Company: ARRY
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001820721-25-000095
Chunk: 138

Company: Array Technologies, Inc.
Filing Date: 2025-11-05
Form: 10-Q
Item: Part I, Item 8
Chunk 138
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 4,686,530 shares of common stock, which was determined by dividing $40 million by the volume weighted average price of the Company’s common stock for the 10 trading days immediately following the Closing Date. The number of shares payable will be subject to reduction if the cumulative value of the Earnout Consideration earned (measured on each date such shares are issued) exceeds $90 million. The Purchase Agreement provides that, to the extent the issuance of any Earnout Consideration or Deferred Consideration Shares would require stockholder approval under Nasdaq Listing Rule 5635(a), the Company will pay cash in lieu of issuing such shares, unless such stockholder approval has been obtained.The Earnout Consideration is accounted for as contingent consideration, and the fair value is estimated each reporting period. As of September 30, 2025, the Earnout Consideration was estimated to have a fair value of approximately $20.4 million using a Monte-Carlo simulation method. Changes in fair value of the contingent liability are recognized in contingent consideration on the condensed consolidated statements of operations. Estimating the amount of payments that may be made under the Earnout Consideration is by nature imprecise. The significant fair value inputs used to estimate the future expected Earnout Consideration payments to Seller include a discount rate, earnings forecasts, and actual and estimated future volatility in the Company’s stock price.

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The following table summarizes the activity related to the estimated Earnout Consideration liability (in thousands):Three Months Ended September 30,Nine Months Ended September 30,2025202420252024Beginning balance$— $— $— $— Additions20,007 — 20,007 — Payments— — — — Fair value adjustment403 — 403 — Ending balance$20,410 $— $20,410 $— The Earnout Consideration liability requires significant judgment and is classified as Level 3 in the fair value hierarchy.Surety BondsAs of September 30, 2025, the Company posted surety bonds in the total amount of $227.4 million. The Company is required to provide surety bonds to various parties as required for certain transactions initiated during the ordinary course of business to guarantee the Company’s performance in accordance with contractual or legal obligations. These off-balance sheet arrangements do not adversely impact the Company’s liquidity or capital resources.

13.    Fair Value of Financial Instruments

The carrying values and estimated