Company: FTCI
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0000950170-25-047224
Chunk: 62

Company: FTC Solar, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1
Chunk 62
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 common stock.

The terms and covenants included in the Senior Notes could restrict our business, and if we do not comply with the covenants included in the Senior Notes our financial condition and results of operations could be adversely affected. In addition, our operations may not provide sufficient cash to meet the repayment obligations under the Senior Notes. 

In addition to the obligation to repay the principal amount of the Senior Notes and related interest, the Senior Notes include customary covenants, as well as certain financial covenants. The financial covenants in the Senior Notes require us to (i) maintain a minimum of $5.0 million of unrestricted cash on the last calendar day of each quarter, (ii) have annual revenue of $100 million for 2025 and $200 million for subsequent years and (iii) have annual EBITDA, as defined in the Purchase Agreement, of at least $25 million starting in 2026. We have granted the Investor a security interest in substantially all of our and our subsidiaries’ assets.

While we believe we will be able to comply with the covenants under the Senior Notes, including the financial covenants, we may not be able to comply with these covenants in the future. Failure to comply with such covenants would constitute an event of default under the Senior Notes If there is an event of default under the Senior Notes, including with respect to the financial covenants, the Investor would have the right to accelerate payment of the indebtedness outstanding under the Senior Notes, which we would be required to pay. 

We may not generate sufficient cash flow from our operations to satisfy the obligations under the Senior Notes. If we are not able to satisfy our obligations under the Senior Notes or if there are events of defaults under the Senior Notes (including with respect to the financial covenants), the Investor could foreclose on its security interest and would have a prior right to substantially all of our assets to the exclusion of our general unsecured creditors. Any such foreclosure would have a material and adverse impact on our business. 

Additionally, while the Senior Notes are outstanding, the security interest granted to the Investor and the other terms and conditions imposed by the Senior Notes may limit our flexibility in raising capital. Given the Investor’s security interest in our and our subsidiaries’ assets, we are constrained in our ability to incur additional secured indebtedness or to sell, transfer or dispose of our assets to raise capital without the Investor’s consent, which could have an adverse impact on our financial flexibility.

There may