XML 35 R27.htm IDEA: XBRL DOCUMENT
v3.25.2

Subsequent Events | 6 Months Ended
--- | ---
Jun. 30, 2025
Subsequent Events [Abstract] |
Subsequent events | 19. Subsequent events On July 2, 2025, we entered into the Credit Agreement by and among the Company, as borrower, the Lenders, and Acquiom Agency Services LLC, as administrative agent for the Lenders. The Credit Agreement provides for a senior secured term loan facility of up to $75 million, consisting of: (i) $14.3 million principal amount of Initial Term Loans that were funded on the Closing Date; (ii) $23.2 million principal amount of First Delayed Draw Term Loans that may be funded during the 90-day period following the Closing Date, subject to Company stockholder approval of the issuance of all of the shares of the Company’s common stock, issuable upon the full exercise of the Warrants (as defined below) issued to the Lenders on the Closing Date in connection with the transactions under the Credit Agreement; and (iii) up to $37.5 million principal amount of Second Delayed Draw Term Loans (together with the Initial Term Loans and the First Delayed Draw Term Loans, collectively, the "Term Loans") that may be requested by the Company and approved by the Lenders (in their sole discretion). The Company may only use the loan proceeds to pay transaction costs and for general corporate purposes. After deductions for certain fees and expenses, the net proceeds received by the Company on the Closing Date from the funding of the Initial Term Loans totaled approximately $13.0 million. Key Credit Agreement Terms The Term Loans will mature on July 2, 2029. The Term Loans bear interest at 12.00% per annum. A portion of the interest equal to 7.00% per annum will be capitalized and added as paid-in-kind interest and will increase the outstanding amount of the Term Loans. The remainder of the interest will be paid in cash. Upon the occurrence and during the continuation of certain events of default under the Credit Agreement ("Events of Default") or upon the election of certain required Lenders during the occurrence and continuation of any Event of Default, the interest rate applicable to the Term Loans will be increased by a 7.00% default interest rate. The Credit Agreement provides for the mandatory prepayment of the indebtedness and other obligations outstanding under the Credit Agreement and other applicable loan documents upon the occurrence of certain events (including in connection with a change in control of FTC) and upon acceleration following an Event of Default (an "Exit Fee Event"). If an Exit Fee Event occurs, the Company shall pay an exit fee (the "Exit Fee") equal to (x) the aggregate amount of all Term Loans extended by the Lenders under the Credit Agreement, multiplied by (y) the Exit Fee Percentage, minus (z) the amount of interest paid in cash by the Company prior to the Exit Fee Event, where the "Exit Fee Percentage" equals 25% in connection with a change of control transaction, or otherwise equals 50%. The Credit Agreement includes customary repayment and prepayment terms, affirmative and negative covenants and representations and warranties, including certain covenants that require the winddown and liquidation of our China subsidiary - FTC Solar (China) Co. Ltd. The Credit Agreement also includes customary events of default. Financial Covenants Additionally, the Credit Agreement contains a minimum unrestricted cash covenant and financial covenants relating to minimum revenue-, product margin-, EBITDA- and purchase order-related targets. The minimum unrestricted cash covenant first applies to the Company for the quarter ending September 30, 2025, and the Company is required to have an aggregate balance of unrestricted cash of $20.0 million as of September 30, 2025, of $17.5 million as of December 31, 2025, of $15.0 million as of March 31, 2026 and $12.5 million as of June 30, 2026 and the last day of each quarter thereafter. Further, the Company is required to comply with a minimum revenue target for each twelve-month period ending December 31, 2025, June 30, 2026, and December 31, 2026 and the last day of each June and December thereafter. Commencing with the fiscal quarter ending March 31, 2026, the Company’s direct tracker margin must exceed certain thresholds for each fiscal quarter. The Company’s consolidated EBITDA also is required to exceed a minimum amount for each twelve consecutive months ending on the last day of the fiscal year, beginning on December 31, 2026. Lastly, the financial covenants include a requirement that the amounts due to the Company under new purchase orders meet certain thresholds measured from July 1, 2025 through December 31, 2025, January 1, 2026 through June 30, 2026, July 1 2026 through December 31, 2026 and for each six-month period ending on the last day of June and December thereafter. First Priority Security Interest and Subordination The Company and certain of its subsidiaries from time-to-time party thereto guarantee the obligations under the Credit Agreement and other Loan Documents. In addition, such obligations are secured by a first priority lien on substantially all tangible and intangible property of the Company and the guarantors and pledges of the equity of certain Company subsidiaries, in each case subject to certain exceptions, limitations and exclusions for the collateral. In connection with the Credit Agreement, the Investor entered into the Subordination Agreement, dated July 2, 2025. Pursuant to the Subordination Agreement, the Investor agreed to the subordination of all indebtedness owed by the Company to the Investor, including under the Senior Notes issued by the Company to the Investor on December 4, 2024, to the indebtedness and obligations owed under the Credit Agreement and the other applicable loan documents. A&R Promissory Note Also, in connection with the Credit Agreement and the Subordination Agreement, the Company and Investor entered into the A&R Promissory Note, dated July 2, 2025. The A&R Promissory Note amends and restates the original Senior Notes to remove the seniority terms of those notes, conform the original Senior Notes to the terms of the Credit Agreement and the Subordination Agreement, amend certain prepayment and make-whole terms under the original Senior Notes, delete certain covenants and event of default terms, reduce the interest rate under the original Senior Notes to 5% per annum paid in cash and 7% per annum paid in kind, and to delete the financial covenants set forth in the original Senior Notes. As a result of the Purchase Agreement Amendment entered into on July 2, 2025, among other things, the Investor agreed to release all liens and guarantees securing the obligations under the Senior Notes, the Purchase Agreement, and the A&R Promissory Note. Amendment Warrants and Warrants Issued to Lenders Under Credit Agreement In consideration for the Investor's agreements under the A&R Promissory Note, the Subordination Agreement, and the Purchase Agreement Amendment, the Investor received 1,417,945 warrants with a term of 10 years, to purchase our common stock at an exercise price of $0.01 per share (the "Amendment Warrants"). Additionally, on July 2, 2025, the Company issued warrants to the Lenders to purchase up to an aggregate of 5,418,292 shares of our common stock at an exercise price of $0.01 per share (together with the Amendment Warrants, collectively, the "New Warrants"). A total of 6,836,237 shares of common stock are issuable upon exercise of the New Warrants, subject to the terms of the New Warrants. The New Warrants are exercisable from time to time in accordance with their terms for either a cash payment equal to the exercise price or on a cashless exercise basis until or prior to 11:59 p.m., New York time, on July 2, 2035. Exercise of the New Warrants are subject to certain exercise caps that limit the number of shares of our common stock issuable under the New Warrants, in the aggregate, to less than 20% of our common stock outstanding on the date the New Warrants were issued, unless stockholder approval is otherwise obtained under applicable Nasdaq rules. We have filed definitive proxy materials for a special meeting of stockholders to be held during the third quarter of 2025 to seek such approval. In the event of a change of control of the Company, a holder of the New Warrants may, at its option, elect to exercise its New Warrants or exercise a repurchase option that requires the Company to repurchase its New Warrants upon the consummation of the change of control for a cash amount equal to the Black Scholes Value (as defined in the New Warrants). Additionally, the New Warrants provide each holder with a pro rata purchase right (based on the total number of shares of common stock held by a holder and the number of shares issuable upon exercise of the New Warrants) in the event the Company issues any equity securities, convertible securities or rights, options or warrants to purchase equity securities, subject to customary exceptions and conditions. The New Warrants include other customary terms and provisions, including adjustment provisions relating to stock splits, stock dividends, reclassifications and other recapitalization events. The Company has also agreed to file a registration statement with the Securities and Exchange Commission registering the resale by the holders of the maximum number of shares issuable upon exercise of the New Warrants with the Securities and Exchange Commission within the later of 30 days following the closing of the Credit Agreement and 5 business days after its entry into a Registration Rights Agreement (following the request of certain Lenders), and seek effectiveness of such registration statement within 75 days.

X
- References No definition available. + Details
Name: | us-gaap_SubsequentEventsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 855 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/855/tableOfContent Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 855 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147483399/855-10-50-2 + Details
Name: | us-gaap_SubsequentEventsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration