Company: ARRY
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001820721-25-000095
Chunk: 60

Company: Array Technologies, Inc.
Filing Date: 2025-11-05
Form: 10-Q
Item: Part I, Item 1
Chunk 60
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 the rights of the note holders. Upon conversion of the 2031 Convertible Notes, the 2031 Capped Calls are expected to reduce potential dilution by delivering shares of the Company’s common stock (or, at the Company’s election and subject to certain conditions, the cash equivalent value) to the Company.Together, the 2028 Capped Calls and the 2031 Capped Calls are collectively referred to herein as the “Capped Calls”. At issuance of each of the Capped Calls, the Company concluded that the Capped Calls met the criteria 

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for equity classification because they are indexed to the Company’s common stock and the Company has discretion to settle the Capped Calls in shares or cash. As a result, the amount paid for the Capped Calls was recorded as a reduction to Additional paid-in capital.The Company made a tax election to integrate the 2031 Convertible Notes and the 2031 Capped Calls. The accounting impact of this tax election makes the 2031 Capped Calls deductible as original issue discount interest for tax purposes over the term of the note, and as a result, the Company established a Deferred income tax asset of $8.6 million at inception, with an offsetting adjustment to Additional paid-in capital on the consolidated balance sheets.If the Convertible Notes are converted, the number of shares to be issued by the Company would be effectively partially offset by the shares of common stock received by the Company under the Capped Calls, thereby mitigating dilution. The Capped Calls are subject to termination or adjustment upon the occurrence of certain events, including mergers, tender offers, nationalization, insolvency, delisting of the Company’s common stock, events of default, changes in law, failure to deliver, stock splits, combinations, dividends, repurchases, or early conversion of the Convertible Notes.Other DebtOther debt consists of the debt obligations of STI Operations (“Other Debt”). Interest rates on Other Debt are based on SOFR or EURIBOR plus a spread and range from 2.5% to 6.1% annually. Of the $25.6 million carrying value of the Other Debt balance as of September 30, 2025, $19.0 million is denominated in Euros and $6.6 million is denominated in U.S. dollar. These debt obligations mature between 2025 and 2027.At September 30, 2025, STI Operations had one note payable with a carrying value of $6