FTCI 10-K & 10-Q changes, risk factors and insider trading

We have a history of losses that may continue in the future and have determined there is substantial doubt about our ability to continue as a going concern; the demand for our products and related revenue depends on many factors beyond our control; we may not achieve profitability or generate positive cash flow; and we may not be able to obtain desired additional debt or equity financing on terms favorable to us.

As of December 31, 2024,2025, in addition to our cash on hand and working capital, we had approximately $64.9$9.0 million of remaining capacity available for future sales of our common stock under an effective prospectus supplement to our ATM programprogram. as defined and described further in Note 16, "Stockholders' equity" in Part II, Item 8 of this Annual Report. Our ability to use the ATM program may be constrained by the size of our non-affiliate market capitalization, our trading volume and other factors, and thereThere can be no assurance regarding the price at which we will be able to sell such shares,shares in the future, whether under the ATM program or other securities offerings, and any sales of our common stock under the ATM program or other securities offerings may be at prices that result in additional dilution to our existing stockholders.

The demand for our products depends on many factors outside of our control, and we may not be able to grow our revenue as expected, or our revenue may decline further for a number of reasons, including (i) delays in, or cancellation of, our customers' project development activity due to the inability of our customers to obtain (a) funding at an acceptable cost, (b) permits, (c) interconnection agreements, or (d) other matters; (ii) any slowdown in the level of investments in solar energy projects that may result from slowdowns in economic growth in the U.S. or outside of the U.S.; (iii) U.S. and global macroeconomic trends including with respect to (a) further increases inin, or continued high levels of, governmental tariffs or restrictions on imports, (b) changes in interest rates and inflation, (c) changes to or the availability of tax credits or other governmental incentives available for solar project development or the manufacturing of solar components; (iv) a decline in demand for our offerings, or an increase in the cost of our offerings, including as a result of increases in the cost of or limited supplies of the raw materials necessary to produce our products and offerings; (v) increased competition; (vi) a lack of success in converting sales leads into binding purchase orders; (vii) loss of existing customers; (viii) our inability to sell software and other complementary products; (ix) a decrease in the growth of the solar industry or our market share, including as a result of potential increases in governmental support for other sources of energy production; (x) future decline in average selling prices of our products and services; (xi) our inability to enter certain international markets; (xii) technological changes or development that could render our products and services obsolete or uncompetitive; or, (xiii) our failure to capitalize on growth opportunities. Additionally, demand for our products may be impacted by the delays that have occurred in the integration of new solar resources due to interconnection queue study backlogs and the identified need for the construction of transmission grid upgrades. Further, regional Transmission Organizations have adopted metrics such as the effective load carrying capability metric used in the PJM Interconnection (“PJM”) that impose low capacitylow-capacity values on solar, and high values on baseload plants. PJM has offered an accelerated interconnection process that will prioritize generators with high effective load carrying capabilities, which may expedite the interconnection of thermal generation over renewable generation. Various countieslocations have imposed limits on new renewable projects, which also could temper the level of new solar projects.

We may not achieve profitability or positive cash flow for a number of reasons, including further declines in, or continued low levels of, revenue, as well as increases in costs to manufacture our products, U.S. and global macroeconomic trends, including with respect to the impact of U.S. trade tariffs and the imposition of additional duties or tariffs applicable to our industry or our products. In addition, we may be unable to identify further cost savings opportunities below present levels that would not adversely impact the functioning of our existing operations needed to meet customer and regulatory requirements. We also expect we could incur additional costs and expenses should activity levels increase from recent project wins that would allow us to continue to expand our business, including in connection with any future acquisitions, as well as ongoing development and marketing of our products and services, expanding into new markets and geographies with respect to both manufacturing and sales of our products, maintaining and enhancing our research and development operations, hiring additional personnel, incurring additional overhead costs and incurring greater costs from professional third-party advisors as necessary in connection with any expansion of our business. We do not know whether our revenue will grow rapidly enough to absorb such costs and expenses, or the extent of such costs and expenses and their impact on our results of operations. If we fail to generate sufficient revenue to support our operations, we may not be able to achieve profitability or generate sufficient cash flow to meet our financial obligationsobligations, and our liquidity position will be negatively impacted. Additionally, if we fail to growcomply ourwith revenuethe covenants under the Credit Agreement, including the principal repayment obligations and EBITDA to levels required by the financial covenants included in our SeniorCredit Notes,Agreement, as described above, we may default under the SeniorCredit NotesAgreement and/or not have sufficient cash flow available to repay the SeniorTerm NotesLoans earlyearly, inif thethey are accelerated following an event of our failure to meet those financial covenantsdefault, or upon maturity of the SeniorTerm Notes. See "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources" for a further discussion of the other factors that may impact our liquidity position.Loans.

We may need to issue additional debt or obtain new equity financing to fund our operations and to execute on our current and future business strategies and plans. We may be unable to obtain any desired additional debt or equity financing on terms favorable to us, or at all, depending on, among other things, receiving required consents and approval from our existing lenders, the ability to issue other debt that is subordinate to the security interests under the SeniorTerm NotesLoans (or to obtain the consent of theour Investorlenders to issue additional secured debt), interest rates, our stock price, our market capitalization, the availability of or our ability to use our ATM program, our ability to have our stock continue to tradebe listed and traded on active markets and existing market or other conditions. The ability to raise additional financing depends on numerous factors that are outside our control, including general economic and market conditions, interest rates, the health of financial institutions, investors' and lenders' assessments of our prospects and the prospects of the solar industry in general.

We have been dependent in each year since our inception on a small number of customers who generate a significant portion of our business. During the year ended December 31, 2025, four customers accounted for approximately 28%, 20%, 18% and 12%, respectively, of total revenue. During the year ended December 31, 2024, four customers accounted for approximately 39%, 11%, 11% and 11%, respectively, of total revenue. During the year ended December 31, 2023, four customers accounted for approximately 23%, 19%, 17% and 13%, respectively, of total revenue. Further, our trade accounts receivables are all from companies within or those that serve the solar industry. At December 31, 2024,2025, three customers accounted for approximately 74%55% of our total receivables, including one customer that accounted for approximately 42%21% of our total receivables.

As a result, we may have difficulty operating profitably or generating positive cash flow if there is a delay or default in payment by any of our customers, we lose an existing order, an existing order or project is delayed, postponed or cancelled, or we are unable to generate new orders from new or existing customers. For example, in both 20242025 and 2023,2024, the timeline for constructing a number of projects that had been awarded to us was subsequently delayed after being awarded due to various reasons including delays by our customer in obtaining permits, interconnection agreements, project financing or other matters. In addition, we often make significant expenditures in fulfilling an order prior to being paid in full by our customer for such order, and therefore any delay or default in payment by a customer may result in our business, prospects, financial condition, cash flows and results of operations being materially adversely affected. Furthermore, to the extent that any one customer or a small number of customers continues to account for a large percentage of our revenue, the loss of any such customer or that customer’s inability to meet its payment obligations could materially affect our ability to operate profitably. In certain circumstances we may not have sufficient recourse to recover our losses in full after a customer fails to meet its payment obligations. As an example, during 2024, we wrote-offwrote off $8.9 million of uncollectible receivables relating to a specific customer that was unable to fully satisfy their payment obligations to us after selling their project to a new developer. Each period we recognize expected credit losses from our customers by taking into consideration historical experience and certain other factors, as appropriate, such as credit quality, current economic or other conditions and changes in project status that may affect a customer's ability to pay. Further information on our reserves for expected credit losses may be found in Note 5, "Accounts receivable, net" in our consolidated financial statements included in Part II, Item 8 of this Annual Report. We anticipate that our dependence on a limited number of customers in any given fiscal year, as well as being required to make significant expenditures in fulfilling an order prior to being paid in full by our customer for such order, will continue for the foreseeable future. There is always a risk that existing customers will elect not to do business with us in the future or will experience financial difficulties, and the nature of our business requires us to take credit risk on behalf of our customers. If we do not book more orders with existing customers, or develop relationships with new customers, we may not be able to increase, or even maintain, our revenue, and our business, prospects, financial condition, results of operations and cash flows may be materially adversely affected.

The market for our products and services is highly competitive and rapidly evolvingevolving, and we expect to face increased competition.

investment by end-users of solar energy products, which tends to decrease when economic growth slows, or interest rates rise; and changes in corporate sustainability goals, among other factors The market for solar energy products and services is highly competitive with relatively low barriers to entry. We principally compete with other solar tracker equipment suppliers, as well as fixed-tilt suppliers. A number of companies have developed or are developing solar tracker systems and other products and services that compete or will compete directly with our products and services in the utility-scale solar energy market. Competitors in the solar tracker market include, among others, Array Technologies, Inc., GameChange Solar, NextrackerNextpower Inc. and PVH. In addition, there are numerous private company competitors, both domestically and internationally. We expect competition to continue to intensify as new competitors enter the market and existing competitors attempt to increase their market shares.

Further, technological advances in the tracker industry are developing rapidly and certain competitors may be able to develop or deploy new products and services more quickly than we can, or that are more reliable or that provide more functionality than ours. For example, we intend to continue to develop and deploy new products that can withstand higher wind speeds, are more adaptable to irregular site boundaries and undulating terrain and can better support larger-formatlarger format panels; however, our competitors may do so more quickly or effectively. In addition, some of our competitors have the financial resources to offer competitive products at aggressive pricing levels, which could cause us to lose sales or market share, or prevent us from gaining sales or market share, or require us to lower prices for our products and services to compete effectively. If we have to reduce our prices, or if we are unable to offset any future reductions in our average selling prices by increasing our sales volume, reducing our costs and expenses, or introducing new products and services, our revenue and gross profit would suffer.

Any failure by us to develop or adopt new or enhanced technologies or processes, or to adapt or react to changes in existing technologies, could result in product obsolescence, the loss of competitiveness of our products, including offering lower cost savings or return on investment relative to competing products, decreased revenue and a loss of market share to competitors. For example, at inception of the company, our primary product offering was a 2P tracker solution. As a result of UFLPA and AD/CVD regulations, among other factors, which impacted imports of solar modules from international locations, we experienced a decline in demand from customers in recent years for 2P tracker solutions in favor of 1P tracker solutions which limited the potential projects and markets to which we could sell our products. We introduced our 1P tracker solution in the second half of 2023 and arehave beginning to seeseen increasing demand for that new product offering. However, if our 1P tracker solution does not achieve broader market acceptance, future demand for our 1P tracker solution, in addition to our 2P tracker solution, may not grow at levels expected or required for us to increase our revenue to a level to be profitable.

The ability of our customers to obtain project financing on acceptable terms may be impacted by (i) current interest ratesrates, which remain at current elevated levels in relation to rates of several years ago, (ii) further increases in interest rates, (iii) increased inflationinflation, or (iv) a reduction in the supply of, or change in the market terms offered for project debt or tax equity financingfinancing, or regulatory restrictions on lenders,lenders. whichThe inability of our customers to obtain timely and acceptable project financing has in the past had, and could havecontinue to have, a material adverse effect on our financial condition, cash flows and results of operations.

The market success of our panel agnostic tracker solutions will depend in part on our ability to continue to work closely with solar panel manufacturers to design solar tracker systems that are compatible with their solar panels. The solar panel manufacturer market is large and diversified, with many market participants, and we may not be able to effectively work with all necessary solar panel manufacturers on the development of such compatible tracker solutions for a variety of reasons, including differences in marketing or selling strategy, our available financial resources, competitive considerations, engineering challenges, lack of competitive pricing and technological compatibility. In addition, our ability to form effective partnerships with solar panel manufacturers may be adversely affected by the substantial challenges faced by many of these manufacturers due to declining prices and revenue from sales of solar panels and the possibility of increased tariffs in the United States.

We have been, and plan to continue, expanding our operations to other countries, which requires significant resources and management attention and subjects us to regulatory, economic, political and competitive risks in addition to those we already face in the United States. As an example, we launched commercial activity in the India market during 2025. There are significant risks and costs inherent in doing business in international markets, including:

We have limited experience with certain international regulatory environments and market practices and may not be able to penetrate or successfully operate in the markets we may choose to enter or have entered or otherwise effectively mitigate the regulatory, economic, political, reputational and competitive risks that are inherent when operating in such environments. In addition, we may incur significant expenses as a result of our international expansion, and we may not be successful. For example, we have made investments into the European, Indian, South African and Asian markets but are yet to realize material revenue from customers in such markets, and we typically anticipate that we will not realize material revenue from customers in new markets until significant time and expense has been invested, and in some cases we may not realize material revenue at all despite making such investments. Our failure to successfully manage these risks could harm our international operations and have an adverse effect on our business, financial condition and operating results.

Our future success and ability to implement our business strategy depends, in part, on our ability to attract and retain key personnel, and on the continued contributions of members of our senior management team and key technical personnel, each of whom it would be difficult to replace. All of our employees, including our senior management, are free to terminate their employment relationships with us at any time. Competition for highly skilled individuals with technical expertise is extremely intense in our industry, and we face challenges identifying, hiring and retaining qualified personnel in many areas of our business. Additionally, as discussed further in responseNote to4, adverse"Reduction marketin andforce" regulatoryin conditions,our asconsolidated wellfinancial asstatements otherincluded factors,in Part II, Item 8 of this Annual Report, we made workforce reductions in the fourth quarter of 2024 and in Augustthe 2023,first which included certain membersquarter of our2025 executivein leadershipresponse team.to Bothadverse ourmarket then Presidentconditions and Chiefto Executivetake Officeradvantage andof thenprocess Chiefefficiencies Financialwe Officerhad agreed that each would step down from their positions, and such executives departed the Company, effectivegained in Decemberprevious 2023.years.

IfAs oura expectationsresult of futurenew growthawards materialize,received, we would expect to beginbegan to increase our workforce again atduring the appropriate time.2025. Integrating new employees into our team couldmay be disruptive to our operations, requiring substantial resources and management attention and ultimately prove unsuccessful. Any inability to retain our current senior management and other key personnel or to attract additional qualified personnel could limit or delay our strategic efforts, which could have a material adverse effect on our business, prospects, financial condition and results of operations.

We may not have sufficient insurance coverage to cover business continuity.continuity and cybersecurity incidents.

WeIn addition to Alpha Steel, we also rely on a limited number of contract manufacturers and, as a result, a sustained or repeated interruption in the manufacturing of our products by such internal and outsourced manufacturers due to fire, flood, war, pandemic or natural disasters, and/or an interruption in the provision of the required components for our business by these manufacturers may interfere with our ability to sell our products to our customers in a timely manner. Additionally, we also insure against losses due to cybersecurity incidents. The nature of our business and our size makes it difficult to insure some or all of the possible harms that could result if we fail to sell and deliver our products in a timely manner,manner or incur significant costs from a cybersecurity incident, which may adversely affect our financial results. See further information below under "Risks Related to Information Technology and Data Privacy" with regard to risks we face from cybersecurity incidents.

We are a global provider of solar tracker systems, supported by proprietary software and value-added engineering services. Solar tracker systems move solar panels throughout the day to maintain an optimal orientation relative to the sun, thereby increasing the amount of solar energy produced at a solar installation. Our one module-in-portrait solar tracker system is marketed under the Pioneer brand name, and our original two modules-in-portrait solar tracker system is marketed under the Voyager brand name and our one module-in-portrait solar tracker system is marketed under the Pioneer brand name. We also have a mounting solution to support the installation and use of U.S.-manufactured thin-film modules. Our primary software offerings include SUNPATHSUNPATH, which helps customers optimize solar tracking for increased energy productionproduction, and our SUNOPS real-time operations management platform. In addition, we have a team of renewable energy professionals available to assist our U.S. and worldwide clients in site layout, structural design, pile testing and other needs across the solar project development and construction cycle. Our products and services provide an easy to install and safe tracker solutionsolutions for large utility-scale solar and distributed generation projects around the world. Our customers are primarily engineering, procurement and construction companies ("EPCs") and we also contract with developers and owners. The Company is headquartered in Austin, Texas, and has international subsidiaries in Australia, China, India, South Africa and Spain.

The most notable incentive program impacting our U.S. business has historically been the ITC for solar energy projects, which allows taxpayers to offset their U.S. federal income tax liability by a certain percentage of their cost basis in solar energy systems placed in service for commercial use.use, subject to compliance with applicable prevailing wage and apprenticeship requirements. The IRA,Inflation Reduction Act of 2022 ("IRA"), passed by the U.S. Congress and signed into law by Presidentthen-President Biden on August 16, 2022, expanded and extended the tax credits and other tax benefits available to solar energy projects and the solar energy supply chain. ITCs are currently available at a base rate of 30% for projects that begin construction by the end of 2032, and decline to 26% and 22% for projects beginning construction in 2033 and 2034, respectively. Bonus credits are additionally available for projects that meet applicable domestic content and prevailing wage and apprenticeship rules. U.S. manufacturers of specific solar components arealso nowbecame eligible to claim production tax credits under Section 45X of the Internal Revenue Code of 1986, as amended, which was established as part of the IRA and is a per-unit tax credit earned for each clean energy component manufactured domestically and sold by a manufacturer. Our investmentacquisition in, and commitments made toof Alpha Steel allowallows us to continue for a longer period of time to obtain benefits of lower product costs from Alpha Steel as a result of the production tax credit program, subject to our level of purchases from Alpha Steel.program.

Disruptions in Transportation and Supply Chain. Our costs are affected by the costs of certain components and materials, such as steel, motors and micro-chips, as well as transportation costs. CurrentCapacity constraints, particularly with regard to U.S. manufactured steel output, current market conditionsconditions, extreme adverse weather events and international conflicts thatmay constrain the supply of materials and disrupt the flow of materials from international vendorsvendors, canwhich could impact the cost of our products and services, along with overall rates of inflation in the global economy, which have been higher than pre-COVID 19 pandemic historical rates.economy. While inflation rates and certain costs have moderated comparedrecently, tothe pre-pandemicoverall rates,level domesticof fuelvarious pricesother continuecosts continues to be elevated. Although we don't believe inflation has had a material impact on our results as presented in this report, such cost increases and decreases could impact our future operating margins, if material.

We have taken steps to expand and diversify our manufacturing partnerships and have adjusted our modes of transportation to mitigate the impact of headwinds that might arise in the global supply chain and logistics markets. As an example, we modified our ocean freight from previously using charter shipments to now using containerized shipments as costs in the container market began to decrease starting in 2022, but more recently have begun to increase. However, we have been able to mitigate some of this increase as a result of increasing our domestic production capabilities. We continue to monitor the logistics markets and will continue to evaluate our use of various modes of transportation when warranted to optimize our transportation costs. Additionally, from February 2022 to September 2023, we utilized a related-party consulting firm to support us in making improvements to our processes and performance in various areas, including design, sourcing, logistics, pricing, software and our distributed generation business. For further information regarding this consulting firm, see Note 18 "Related party transactions" included in our consolidated financial statements in Part II, Item 8 of this Annual Report. We also intend to maintain a sharp focus on our design-to-value initiative to continue to improve margins by reducing manufacturing and material costs of our products.

Investment in technology and personnel. We invest in both the people and technology behind our products. We intend to continue making investments in the technology for our products and expansion of our patent portfolio to attract and retain customers, expand the capabilities and scope of our products, and enhance user experience. As an example, induring August 2023,2025, we (i) introduced SUNOPS, a cloud-baseddual solarrow assetconfiguration monitoringfor solution,our allowing1P assetPioneer ownerstracker for improved slope tolerance and managersworking with complex project landscapes, (ii) released our Pioneer+ High Wind tracker, which is engineered to evaluatewithstand thewind operationspeeds up to 150 miles per hour, and performance(iii) oflaunched theiran solarautomated deployments.80° Additionally,high angle stow capability in May 2024, we announced the launch of our AutomatedPioneer Hail Stow Solution, aimed at minimizing solar panel damage caused by hailstorms. This solution integrates advanced technology with meteorological datatrackers to automaticallyprovide adjustimproved theprotection positioningin ofhail-prone solar panels, reducing the risk of hail-related damage.regions.

Impact of Climate Change. Climate change has primarily impacted our business operations by increasing demand for solar power generation and, as a result, for use of our products. The U.S. Energy Information Administration, in its January 20252026 Short-Term Energy Outlook, estimates that solar generation, as a result of capacity additions,generation will increaselead intotal theelectricity Unitedgeneration States by 34% in 2025 and 17%growth in 2026 and will2027, supplyby mostincreasing ofmore thethan increase20% each year, after increasing 33% in electrical generation during those years.2025.

While climate change has not resulted in any material negative impact to our operations to date, we recognize the risk of disruptions to our supply chain due to extreme weather events. This, among other things, has led us to expand the diversity of our supplier base and to partner with more local suppliers to reduce shipping and transportation needs. We are also increasingly partnering with larger scale steel producers rather than smaller suppliers to facilitate scaling of our operations while remaining conscious of the environmental impacts of steel manufacturing as the regulatory landscape around these high-emitting industries evolves. An example of this strategy is our investmentacquisition inof Alpha Steel, a U.S.-based manufacturing partnership with a leading steel fabricator.Steel.

Liquidity. See "Liquidity and Capital Resources" below for a discussion of the impact of our liquidity position, including the itemsrequirements aboveunder the Credit Agreement, on our liquiditybusiness position.and financial performance. As included in such discussion, our management has concluded that there is substantial doubt about our ability to continue as a going concern for one year after the date that this Annual Report is issued.

WeIn certain cases, we subcontract with third-party manufacturers to manufacture and deliver our products directly to our customers.customers, although with our acquisition of Alpha Steel, we now have the ability to manufacture and deliver certain products to our domestic customers seeking U.S.-based content. Our product costs are affected by the underlying cost of raw materials procured by theseAlpha Steel and our other contract manufacturers,manufacturing partners, including steel and aluminum; component costs, including electric motors and gearboxes; technological innovation in manufacturing processes; and our ability to achieve economies of scale resulting in lower component costs. We do not currently hedge against changes in the price of raw materials, but we continue to explore opportunities to mitigate the risks of foreign currency and commodity fluctuations through the use of hedges and foreign exchange lines of credit. Some of these costs, primarily personnel, are not directly affected by sales volume.

AlthoughDuring 2025, we continue to addadded new employees in certain areas, we have also reduced our total headcount over the last two years as we made adjustments during the fourth quarter of 2024 and in August 2023,areas in response to current project activity levels and process efficiencies we have gained in the last few years due to our design-to-value and cost reduction efforts.levels. Certain of our headcount changes also reflect a shift of our employee base to more cost-effective markets with exceptional talent. Our gross profit may vary period-to-period due to changes in our headcount, ASP, product costs, product versus service mix, customer mix, geographical mix, shipping methods, warranty costs and seasonality.

The decreaseincrease in product revenue in 2024,2025, as compared to 2023,2024, was primarily due to aan decreaseincrease of 69%168% in MW produced as manufacturing activity during 20242025 washas adverselybeen positively impacted by customerrecent project delays.wins, Thismainly associated with our 1P solar tracker solution. Partially offsetting this impact was partiallya offset by an increasedecrease of 17%20% in ASP resulting from better pricing and project mix changes during 20242025 as compared to 2023.2024.

The decreaseincrease in service revenue in 2024,2025, as compared to 2023,2024, primarily resulted from (i) aan decreaseincrease of 50%76% in the amountlogistics ofactivity MW delivered resulting from a lower volume of projects available for delivery and timing of shipments related to customer project delays,levels, (ii) aan decreaseincrease of 21%12% in ASP,ASP as a result of project size and pricing, and (iii) lowerhigher engineering consulting and software revenuesrevenue in 2024,2025, as compared to 2023.2024.

Cost of revenue and gross (loss) profit

Gross profitloss may vary from period-to-period and is primarily affected by our ASP, product costs, product mix, customer mix, geographical mix, shipping method, logistics costs, warranty costs and potentially, seasonality.

Our gross profit (loss) percentage of revenue for 20242025 was a negative 26.6%,0.9%, as compared to a positivenegative 6.5%26.6% in 2023.2024.

We had negative gross margin for the year ended December 31, 2024 largely due to (i) our revenue for both products and services being insufficient to fully cover our indirect and warehousing costscosts, (ii) higher remediation costs, and (iii) changesthe inimpact of project mix and cost of freight.

The decrease in research and development expenses in 2024,2025, as compared to 2023,2024, was primarily due to (i) lower spending of nearly $0.5 million on lab activity and materials, (ii) lower payroll-related costs of $0.4$1.3 million, largely due to the impactrelocation of employeeemployees terminationsto more cost-effective locations, and severance costs recognized in 2023, (iii) $0.2 million of lower stock-based compensation expense and, (ivii) lower researchprofessional facilityservice and software license costsfees of $0.2$0.3 million.million, resulting from our cost control efforts. Research and development expenses as a percentage of revenue were 4.4% for the year ended December 31, 2025, compared to 12.5% for the year ended December 31, 2024, compared to 5.6% for the year ended December 31, 2023. The increase in the percentage of research and development costs to revenue for 2024 was largely a function of the lower level of revenue.2024.

The decrease in selling and marketing expenses in 2024,2025, as compared to 2023,2024, was primarily attributable to (i) lower credit loss provisions totaling $5.3$0.7 million, primarily associated with the level of provisions in each year for certain specific customer accountsaccounts, (ii) lower payroll-related costs of $1.3 million associated with lower salary, commission, incentive compensation and severance costs, (iii) lower travel and professional service costs of $0.4 million, and (iiiv) lower stock-based compensation expense of $0.4$0.2 million. Selling and marketing expenses as a percentage of revenue were 6.2% for the year ended December 31, 2025, compared to 18.8% for the year ended December 31, 2024, compared to 11.7% for the year ended December 31, 2023.2024.

During the years ended December 31, 20242025 and 2023,2024, we received escrow releaseearnout payments of $8.8$3.2 million and $1.3$8.8 million, respectively, that were recognized in accordance with our policy election of recording such gains when realized. We also received a final earnout payment during the first quarter of 2025 of approximately $3.2 million attributable to performance by Dimension as of December 31, 2024.

In December 2024, we sold certain assets, including intellectual property, associated with our Atlas web-based software platform, used by customers to organize and manage their solar project portfolios.portfolios, We recognizedrecognizing a gain on the sale of $0.9 millionmillion. associatedIn connection with the sale.sale, Ifthe purchaser agreed to future contingentpotential considerationearnout ispayments based on annual license renewals during 2025 by certain existing customers. During 2025, we received relatedsuch toearnout payments from the sale,purchaser suchtotaling amounts$0.1 willmillion, bewhich we recognized as a gain uponin realization.accordance with our accounting policy to recognize such gains when realized.

OnIn Decemberconnection 4,with 2024,our entry into the Credit Agreement on July 2, 2025, we completedissued anNew offeringWarrants at a fair value of Seniorapproximately Notes$32.1 and Warrants.million. The Warrants,New whichWarrants haveare beenalso reflectedaccounted for as a liabilitylong-term in our Consolidated Balance Sheets, were initially valued at $5.2 million at the time of issuance.liability. Due largely to a significant increase in the price of our common stock as reported on Nasdaq between DecemberJuly 4,2, 20242025 and December 31, 2024,2025, the fair value of the New Warrants increased to $9.5approximately $74.5 million, resulting in a loss during the recognitionperiod from July 2, 2025 to December 31, 2025 of anearly non-cash$42.5 loss in our Consolidated Statements of Comprehensive Loss for the change in fair value.million.

We anticipate that further gains and losses will be recognized in future periods during which the New Warrants are outstanding as a result of changes in the trading price of our common stock, some of which may be material to our consolidated financial position and results of operations.

We have incurred cumulative losses since inception and have a history of cash outflows from operations, inclusive of $34.7$33.4 million in cash utilized for our operating activities during the year ended December 31, 2024.2025. As of December 31, 2024,2025, we had $11.2 million of cash on hand andof $27.1$21.1 million, $29.5 million of working capital.capital, $22.6 million of net total debt and an accumulated deficit of $427.3 million.

As of December 31, 2024,2025, in addition to our cash on hand and working capital, we had approximately $64.9$9.0 million of remaining capacity available for future sales of our common stock under an effective prospectus supplement to our ATMat programthe asmarket definedfacility under the At the Market Offering Agreement dated May 1, 2025 with H.C. Wainwright & Co. LLC and describedthe furtherrelated inprospectus Notecovering 16,the "Stockholders'offering, equity"issuance inand Part II, Item 8sale of this Annual Report. Our abilityup to usea themaximum ATMaggregate programoffering price of approximately $13.75 million of our common stock that may be constrainedsold byunder such At the sizeMarket ofOffering ourAgreement non-affiliatein at the market capitalization,offerings our(the trading"ATM volumeprogram"). and other factors, and thereThere can be no assurance regarding the price at which we will be able to sell such shares,shares in the future, whether under the ATM program or other securities offerings, and any sales of our common stock under the ATM program or other securities offerings may be at prices that result in additional dilution to our existing stockholders.

We are subject to a number of risks that in some cases have and moving forward if realized could further adversely affect our business, strategies, prospects, financial condition, results of operations and cash flows. Some of the more significant risks and uncertainties we face include those summarized below. In addition to the risk factors set forth below and the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors set forth in Item 1A. "Risk Factors" in our 2025 Annual Report, which could materially affect our business, financial condition, or future results. Please carefully consider all of the information in this Quarterly Report and our 2025 Annual Report, including the full set of risks set forth in Item 1A. "Risk Factors" of our 2025 Annual Report, and in our other filings with the SEC before making an investment decision regarding us. ThereWe have beenmarked nowith materialan changesasterisk to(*) theand included in full below this summary those risk factors disclosedthat were not included as separate risk factors in, or reflect changes from the similarly titled risk factors included in Part I, Item 1A, "Risk Factors" of our 2025 Annual Report which are summarized below.

We have a history of losses that may continue in the futurefuture, and we were not in compliance with the required minimum unrestricted cash and direct tracker margin financial covenants pursuant to the Second Amendment to our Credit Agreement as of June 30, 2026. As a result, we have determined there is substantial doubt about our ability to continue as a going concern;concern. theThe demand for our products and related revenue depends on many factors beyond our control; we may not achieve profitability or generate positive cash flow; and we may not be able to obtain additional debt or equity financing on terms favorable to us.* Our dependence on a limited number of customers, the payment terms we agree to with such customers and the expected timing of customer project development activity may impair our ability to operate profitably.

The terms and covenants, including the financial covenants, set forth in the Credit Agreement, as amended, restrict our business. In addition, our operations may not provide sufficient cash to meet the repayment obligations under the Credit Agreement or to satisfy thefuture minimum cash, revenue, purchase order and other financial covenants that apply to the Company under the Credit Agreement. If we defaultDefaults under the Credit Agreement, including breaches of the financial covenants, could adversely affect our financial condition and results of operations could be adversely affected,operations, including, without limitation as a result of the reclassification of the term loan balances under the Credit Agreement from long-term debt to currentcurrent, such as shown in our Condensed Consolidated Balance Sheet as of June 30, 2026, or the Lenders' exercise of their rights under the Credit Agreement, including the requirement that the Company reasonably cooperate in good faith with the Lenders to pursue alternative strategic transactions, in the case of a breach of the financial covenants or the Lenders' foreclosure on their first priority security interest in substantially all of our assets.

There may be future issuances of new shares of our common stock under our ATM program or other equity offerings, or other dilution of our equity, which may adversely affect the market price of our common stock.

This discussion and analysis of our financial condition and results of operations containcontains the presentation of Adjusted EBITDA, Adjusted Net Loss and Adjusted EPS, which are not presented in accordance with U.S. GAAP. Adjusted EBITDA, Adjusted Net Loss and Adjusted EPS are being presented because they provide the Company and readers of this Form 10-Q with additional insight into our operational performance relative to earlier periods and relative to our competitors. We do not intend Adjusted EBITDA, Adjusted Net Loss and Adjusted EPS to be substitutes for any U.S. GAAP financial information. Readers of this Form 10-Q should use Adjusted EBITDA, Adjusted Net Loss and Adjusted EPS only in conjunction with Net Income (Loss) and Net Income (Loss) per Share, the most comparable U.S. GAAP financial measures. Reconciliations of Adjusted EBITDA, Adjusted Net Loss and Adjusted EPS to Net Income (Loss) and Net Income (Loss) per Share, the most comparable U.S. GAAP measures, are provided in "Non-GAAP Financial Measures" below.

Government Regulations. Changes in the U.S. trade environment, including the imposition of import tariffs, antidumping and countervailing duties ("AD/CVD") investigations and the Uyghur Forced Labor Prevention Act ("UFLPA"), which became effective in June 2022, can have an impact on the timing of developer projects. The UFLPA resulted in new rules for module importers and reviews by CBP.U.S. Customs and Border Protection ("CBP"). There continues to be challenges in achieving full compliance with UFLPA, whether related to sufficient traceability of materials or other factors. Escalating trade tensions, particularly between the United States and China, have led to increased tariffs and trade restrictions, including tariffs applicable to certain raw materials and components for our products. We have taken measures with the intention of mitigating the effect of tariffs and the impact of AD/CVD and UFLPA on our business by reducing our reliance on China and enhancing our U.S.-based supply chain, including through our acquisition of Alpha Steel.

In 2019, 90% of our supply chain was sourced from China. As of MarchJune 31,30, 2026, we have qualified suppliers outside of China for certain of our commodities and we continue to work to have second-source capability for all Chinese-manufactured components to help reduce the extent to which our supply chain for U.S.-based projects is subject to existing tariffs and to be able to quickly address potential future regulatory and governmental policy changes. We have entered into partnerships with manufacturers based in the United States, India, South Africa, Spain, Turkey, Thailand and Vietnam to diversify our supply chain and optimize costs.

On June 6, 2022, President Biden issued an Executive Order allowing U.S. solar deployers to import solar modules and cells from Cambodia, Malaysia, Thailand and Vietnam free from certain duties for 24 months, along with other incentives designed to accelerate U.S. domestic production of clean energy technologies. This moratorium ended in June 2024. The U.S. International Trade Administration and the U.S. International Trade Commission completed a sunset review in October 2024 and decided to continue existing AD/CVD orders on CSPV cells/modules from China resulting in longstanding China tariffs remaining in force. In April 2025, the U.S. Department of Commerce issued final determinations concluding that producers and exporters in Cambodia, Malaysia, Thailand and Vietnam were dumping and/or receiving countervailing subsidies resulting in high tariff rates now applying to many Chinese-owned manufacturers operating in these countries. In addition, in August 2025, the U.S. International Trade Commission issued an affirmative preliminary injury determination on imports of CSPV cells and modules from Laos, Indonesia and India. TheOn April 23, 2026, the U.S. Department of Commerce issued preliminary affirmative antidumping determinations finding that CSPV products from all three countries were being sold in the U.S. at less than fair value. While the investigation by the U.S. Department of Commerce is currently assessing whetherin the importsfinal atphase, issuefinal areorders beinghave dumpednot oryet unfairlybeen subsidized.issued and a final injury determination by the U.S. International Trade Commission is currently scheduled for the fourth quarter of 2026.

On April 5, 2025, the United States imposed a universal 10% "reciprocal" tariff on most imports into the United States, excluding certain products and certain qualifying imports from Canada and Mexico. Throughout 2025, tariff rates continued to change and fluctuate as negotiations continued between the United States and various countries. As an example, the United States increased the reciprocal tariff rate on China from 10% to 125%, in addition to other tariffs of 20% imposed on China earlier in 2025 and the Section 301 tariffs imposed on many Chinese-origin products during the first Trump Administration, and China imposed a retaliatory 125% tariff on goods imported from the United States in response. In May 2025, the U.S. and China agreed to a 90-day rollback whereby the United States cut the Chinese levies from 145% to 30% and China lowered the duties on U.S. goods from 125% to 10%, effective May 14, 2025. This rollback period was subsequently extended through November 10, 2026. New reciprocal tariffs were also announced on selected countries that were well above the universal 10% tariff rate. On February 20, 2026, the U.S. Supreme Court rejected the Trump Administration's use of the International Emergency Economic Powers Act ("IEEPA") as a basis for the imposition of tariffs and, as a result of that ruling, onduring March 6,Q2 2026, CBPthe outlinedU.S. plansgovernment implemented initial mechanisms allowing importers to establishseek a system for tariff refunds in 45 days following an order on March 4, 2026, by the Courtrecovery of Internationaltariffs Tradepreviously forimposed CBPunder toIEEPA progress with a tariff refund process.authorities. Following the ruling by the U.S. Supreme Court, the Trump Administration announced it would utilize authority under Section 122 of the Trade Act of 1974 to implement tariffs of up to 15% for a limited period of time without U.S. Congressional approval and may ultimately replace such tariffs with longer-lasting authority under Section 301 of the Trade Act. On May 7, 2026, the U.S. Court of International Trade (the "CIT") held that Proclamation 11012, which imposed the Section 122 tariffs, was invalid. The U.S. government appealed the decision and on June 11, 2026, the Federal Court stayed the CIT decision pending appeal, allowing for CBP to continue to collect the tariffs. As of the filing of this Quarterly Report, matters involving tariffs continue to evolve and change. 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 or that may be imposed in the future, 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.

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act, which acceleratesaccelerated the phase-outsphase-out and terminationstermination of various eligible federal tax credits enacted as part of the IRA.

Disruptions in Transportation and Supply Chain. Our costs are affected by the costs of certain components and materials, such as steel, motors and micro-chips, as well as transportation costs. Capacity constraints, particularly with regard to U.S. manufactured steel output, current market conditions, extreme adverse weather events and international conflicts may constrain the supply of materials and disrupt the flow of materials from international vendors, which could impact the cost of our products and services, along with overall rates of inflation in the global economy. For example, the war with Iran has led to recent increases in the price of oil which can affect transportation costs we are required to pay for delivery of materials to our customers that we may not be able to recover under the terms of our contracts. While inflation rates and certain costs have moderated recently,in recent years, the overall level of various other costs, including fuel costs, continues to fluctuate and be elevated. Although we don't believe inflation has had a material impact on our results as presented in this report, such cost increases and decreases could impact our future operating margins, if material.

Impact of Climate Change. Climate change has primarily impacted our business operations by increasing demand for solar power generation and, as a result, for use of our products. The U.S. Energy Information Administration, in its JanuaryJuly 2026 Short-Term Energy Outlook, indicates that solar remains one of the fastest-growing generation sources in the U.S. power mix and estimates that solar generationgeneration, as a percent of total U.S. electricity generation, will leadcontinue totalto electricityincrease generation growth induring 2026 and 2027, by increasing more than 20% each year, after increasing 33% in 2025.relation to prior years.

For the periods included in this Quarterly Report, no company locations other than in the United States and Australia accounted for more than 10% of our consolidated revenue. Our revenue growth is dependent on continued growth in the number of solar tracker projects and engineering services we win in competitive bidding processes and growth in our software sales each year, as well as our ability to increase our market share in each of the geographies in which we currently compete, expand our global footprint to new emerging markets, grow our production capabilities to meet demand and continue to develop and introduce new and innovative products that address the changing technology and performance requirements of our customers, among other things.

During 2025, and for the three and six months ended MarchJune 31,30, 2026 and 2025, we added new employees in certain areas in response to current project activity levels. Certain of our headcount changes also reflect a shift of our employee base to more cost-effective markets with exceptional talent. Our gross profit may vary period-to-period due to changes in our headcount, ASP, product costs, product versus service mix, customer mix, geographical mix, shipping methods, warranty costs and seasonality.

Results of Operations - Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025

The decreaseincrease in product revenue for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025, was primarily due to aan decreaseincrease of 52%56% in the amount of MW produced due mainly to project size and timing. This was partially offset by ana increasedecrease of 34%10% in ASP for the three months ended MarchJune 31,30, 2026, resulting from project mix changes as compared to the three months ended MarchJune 31,30, 2025.

The increasedecrease in service revenue for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025, primarily resulted from (i)a an increasedecrease of 56%37% in logistics activity levels anddue (ii)to timing of shipments. This was largely offset by an increase of 35%44% in ASP as compared to the three months ended MarchJune 31,30, 2025 as a result of project size and pricing.

Cost of revenue and gross profit (loss)

The decreaseincrease in cost of revenue for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025, was primarily driven by aan decreaseincrease of 52%56% in MW produced and lowerthe shippinginclusion andof warehousingadditional costs.costs for Alpha Steel as Alpha Steel is now a wholly owned subsidiary. This was partially offset by (i)a additional costs related to the inclusiondecrease of Alpha Steel, (ii) higher tariffs, and (iii) an increase of 56%37% in logistics activity levels.levels and lower tariffs. In addition, we incurred additional costs during the three months ended June 30, 2025 associated with specified minimum purchase commitments with Alpha Steel that did not reoccur during the three months ended June 30, 2026.

Our gross margin percentage of revenue for the three months ended MarchJune 31,30, 2026 was a negative 7.1%,8.5%, compared to a negative 16.6%19.6% for the three months ended MarchJune 31,30, 2025.

We had negative gross margin for the three months ended MarchJune 31,30, 2026 due mainly to the impactinclusion of theadditional lowcosts levelsfor ofAlpha Steel as Alpha Steel is now a wholly owned subsidiary and lower product revenues which were not sufficient to fully cover our indirect costs.ASP.

The increase in research and development expenses for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025, was primarily attributable to (i) higher spending on lab and other research activities totaling $0.1 million. and (ii) higher stock-based compensation costs of $0.1 million due to recent grants of new awards. Research and development expenses as a percentage of revenue were 6.5%4.6% for the three months ended MarchJune 31,30, 2026, as compared to 4.4%5.6% for the three months ended MarchJune 31,30, 2025.

The increase in selling and marketing expenses for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025, was primarily attributable to (i) higher payroll costs of $0.2$0.8 million due to higher headcount levels, (ii) higher professionaltravel services and stock-based compensation expensecosts of $0.2 million, and (iii) higher professional service costs of $0.1 million. This was partially offset by lower credit loss provisions of $0.1$0.3 million, and (iv) increased travel.million. Selling and marketing costs as a percentage of revenue were 9.9%7.9% for the three months ended MarchJune 31,30, 2026, compared to 5.5%6.5% for the three months ended MarchJune 31,30, 2025.

The increase in general and administrative expenses for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025, was primarily attributable to (i) higher payroll expense of $1.2 million, due mainly to CEO transition costs in April 2026, (ii) higher stock-based compensation expense of $2.5$0.7 million as a result of (a) new award grants,grants and (iib) the impact of certain executive award forfeitures during the three months ended June 30, 2025, (iii) higher professional service costs of $1.0$0.4 million, largely attributable to increased legal fees and (iiiiv) increased traveltravel, insurance, depreciation and facilityother costs. These increases were partially offset by lower payroll expense of $0.7 million, due mainly to lower headcount levels and lower bonus and severanceoperating costs. General and administrative expenses as a percentage of revenue were 46.3%31.4% for the three months ended MarchJune 31,30, 2026, compared to 24.3%25.8% for the three months ended MarchJune 31,30, 2025.

Interest expense is related mainly to our outstanding short- and long-term debt and consisted of the following:

The New Warrants issued in connection with the Credit Agreement, as described further in Note 11, "Debt" in our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report, are classified as a long-term liability. Due largely to aan decreaseincrease in the price of our common stock during the three months ended MarchJune 31,30, 2026, the fair value of the New Warrants decreasedincreased from $74.5$25.8 million at DecemberMarch 31, 20252026 to $25.8$34.7 million as of MarchJune 31,30, 2026, resulting in recognition of a non-cash gainloss during the three months ended MarchJune 31,30, 2026.

On November 11, 2025, we entered into a Membership Interest Purchase Agreement with the other equity holders of Alpha Steel pursuant to which we acquired 100% of the membership interests in Alpha Steel, effective November 12, 2025. As a result, Alpha Steel is now our wholly owned subsidiary and the financial results of Alpha Steel since November 12, 2025 have been included in our consolidated results. Prior to November 12, 2025, we held a 45% interest in Alpha Steel, which we accounted for under the equity method of accounting. The loss from unconsolidated subsidiary for the three months ended MarchJune 31,30, 2025 represented our share of the net operating results incurred by Alpha Steel during that period.

We have incurred cumulative operating losses since inception and have a history of cash outflows from operations, inclusive of $12.8$4.5 million in cash utilized in our operating activities during the threesix months ended MarchJune 31,30, 2026. As of MarchJune 31,30, 2026, we had unrestricted cash on hand of $5.6$10.1 million, $20.4 million ofa working capital deficit of $7.9 million and a stockholders' deficit of $6.1$30.3 million.

Second Amendment to Credit Agreement, failure to meet cash and direct tracker margin covenants and Limited Waiver As described further in Note 11, "Debt" in Part I, Item 1 of this Quarterly Report, on March 23, 2026, we entered into a Second Amendment and Limited Waiver to our Credit Agreement (the “Second Amendment”) pursuant to which the Lenders: (i) provided a waiver relating to our breach of the purchase order covenant in our Credit Agreement for the fiscal quarter ended December 31, 2025; (ii) agreed that a purchase order covenant will not apply to us until the fiscal quarter ending March 31, 2027; and (iii) agreed to further amend certain other existing financial covenants under the Credit Agreement, including the(a) eliminationa required minimum unrestricted cash covenant of the$10.0 million as of September 30, 2026 and a minimum revenue andcovenant cashof covenants$50.0 million for the quarter ended MarchSeptember 31,30, 2026. Additionally, in connection with the Second Amendment, we agreed to repay a portion of the principal amount outstanding under the Credit Agreement as follows: (x) $2.5 million of principal was repaid on March 23, 2026; (y) $2.5 million of principal will bewas repaid on May 22, 2026; and (z) $5.0 million of principal will be repaid on September 30, 2026.