Company: FTCI
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0000950170-25-047224
Chunk: 406

Company: FTC Solar, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1A
Chunk 406
---
daq and continued or further declines in our stock price could also greatly impair our ability to raise additional necessary capital through equity or debt financing.

Raising additional funds may cause dilution to existing stockholders and/or may restrict our operations or require us to relinquish proprietary rights.

To the extent that we raise additional capital by issuing equity or convertible debt securities, our existing stockholders may experience substantial dilution, and the terms of these issued securities may include liquidation or other preferences that adversely affect the rights of our existing common stockholders. For example, we issued warrants relating to 1,750,000 shares of our common stock with an exercise price of $0.10 per share to the Investor in connection with the Senior Notes transaction. Further, the Senior Notes include covenants, including financial covenants, applicable to the operation of our business and our future capital raising transactions. Any agreements for future debt or preferred equity financings, if available, may involve covenants limiting or restricting our ability to take specific actions, such as raising additional capital, incurring additional debt, making capital expenditures or declaring dividends. If we incur additional debt, the debt holders, together with holders of the Senior Notes, would have rights senior to holders of common stock to make claims on our assets, and the terms of any future debt could restrict our operations, including our ability to pay dividends on our 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