Company: FTCI
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001193125-25-276228
Chunk: 3

Company: FTC Solar, Inc.
Filing Date: 2025-11-12
Form: 10-Q
Item: Item 1A
Chunk 3
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 countries that are well above the universal 10% tariff rate. As of the filing of this Quarterly Report, matters involving tariffs continue to evolve and change, including a review which is underway by the U.S. Supreme Court, following an adverse ruling by the U.S. Court of International Trade, regarding the Trump Administration's use of the International Emergency Economic Powers Act to justify the imposition of tariffs without approval by the U.S. Congress and, in some cases, implementation of new temporary pauses on certain announced tariffs as negotiations on final trade deals occur. Depending on the terms of our existing contracts with customers, we may not in all cases be able to fully recover the increased cost for delivery of tracker systems currently being manufactured for our customers by our international vendors due to higher tariffs currently in place, which has and may continue to impact our expected profitability under certain contracts. Imposition of new or higher tariffs could also adversely affect the amount or timing of our future revenue, results of operations or cash flows.

The terms and covenants, including financial covenants, set forth in the Credit Agreement could restrict our business, and if we do not comply with the covenants, including financial covenants, set forth in the Credit Agreement, our financial condition and results of operations could be adversely affected, including as a result of the Lenders' foreclosure on their first priority security interest in substantially all of our assets. In addition, our operations may not provide sufficient cash to meet the repayment obligations under the Credit Agreement or to satisfy the minimum cash, revenue or purchase order covenants that will apply to the Company on December 31, 2025.

In addition to the obligation to repay the principal amount of the Credit Agreement and related interest, the Credit Agreement includes customary affirmative and negative covenants, such as restrictions on our business activities, including debt incurrence, asset dispositions, distributions, and investments. The Credit Agreement also includes the various financial covenants summarized in this Quarterly Report under "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Outstanding debt and warrants - Key terms", including with respect to minimum unrestricted cash requirements, minimum quarterly revenue thresholds, minimum direct tracker margin requirements, minimum consolidated EBITDA requirements, and minimum purchase order thresholds. The Credit Agreement is also subject to certain customary events of default and other event of default provisions that can be triggered by, among other things: (i) breach of payment obligations and other obligations and representations in the Credit Agreement or other loan documents; (ii)