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

Investing in our securities involves risks. If any of these risks actually occur, it may materially harm our business, financial condition, liquidity and results of operations. As a result, the market price of our securities could decline, and you could lose all or part of your investment. Additionally, the risks and uncertainties described in this Annual Report on Form 10-K are not the only risks and uncertainties that we face. We may face additional risks and uncertainties that are not presently known to us, or that we currently deem immaterial, which may also impair our business, prospects, financial condition or operating results. References to past events are provided by way of example only and they or the lack of reference to any past event or example are not intended to be a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future. The following discussion should be read in conjunction with our financial statements and notes to our financial statements included herein, as well as the other documents that we file with the Securities and Exchange Commission.

We have a history of incurring net losses, and we may not achieve or maintain profitability in the future. We experienced net losses of $62.7$1.9 million and $1.0$62.7 million for the years ended December 31, 20242025, and 2023,2024, respectively. As of December 31, 2024, we had an accumulated deficit of $138.5 million. Beginning in the second half of 2023,2023 and continuing into 2024, we also experienced higher operating losses than in previous quarters, primarily as a result of higher channel inventories, order cancellations and a slowdown in the macroeconomic environment. While we did see some stabilization in the solar market during 2024, we cannotexperienced belower certaindemand thatfor thisour trendproducts willand continueservices orduring otherthe unfavorableyear ended December 31, 2024, primarily due to macroeconomic conditionsfactors. andOur marketoperating conditionsresults willimproved notfor arise,the includingyear asended aDecember result31, of2025, acompared changeto the same period in policies2024, ofhowever thethere newis U.S.no presidentialguarantee administration. As a result, we cannot accurately predict when or whetherthat we will reachachieve or maintainsustain profitability.profitability Inin addition,future our management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern. See the risk factor described under the heading, “Our management has performed an analysis of our ability to continue as a going concern and has identified substantial doubt about our ability to continue as a going concern. If we are unable to obtain sufficient additional funding or if we do not have access to sufficient capital, we may be required to terminate or significantly curtail our operations.”periods. We expect our costs will increase over time and our losses to continue as we expect to continue to invest significant additional funds in expanding our business, sales, and marketing activities, and research and development as we continue to develop our products and services, and maintain high levels of customer support, each of which we consider critical to our continued success. We also expect to incur additional general and administrative expenses as we continue to support our operations as a public company. Historically, our costs have increased over the years due to these factors, and we expect to continue to incur increasing costs to support our anticipated future growth. If we are unable to generate adequate revenue growth and manage our expenses, we may continue to incur significant losses and may not achieve or maintain profitability or have sufficient cash to fund our future operations. Because we have a limited operating history, predicting our future revenue and appropriately budgeting for our expenses is difficult, and we have limited insight into trends that may emerge and affect our business.

levels of investment by end-users of solar energy products, which tend to decrease when economic growth slows; and the emergence, continuance or success of, or increased government support for, other alternative energy generation technologies and products.

Our business depends on the overall demand for our solar energy hardware and software solutions and on the economic health and willingness of our customers and potential customers to make capital commitments to purchase our products and services. As a result of macroeconomic or market uncertainty, including inflation concerns, tariffs and risingfluctuating interest rates, fluctuations in foreign currency exchange rates, potential economic slowdowns or recessions, geopolitical conflicts, potential regulatory changes through future legislative or executive action, and higher inventory levels in distribution channels have caused and may continue to cause customers to delay purchasing our products and services or not purchase at all. In addition, a number of the risks associated with our business, which are disclosed in these risk factors, may increase in likelihood, magnitude or duration, and we may face new risks that we have not yet identified.

Unfavorable global macroeconomic and market conditions, including higher interest rates, tariffs and inflation, have resulted in sustained periods of decreased demand. For example, starting in the second quarter of 2023, we experienced a significant decline in sales activity due to an industry-wide inventory oversupply, higher interest rates and governmental changes to net metering programs in the U.S. and Europe. While we didcontinue to see some stabilization in the solar market in 2024,market, we cannot be certain that this trend will continue or other unfavorable macroeconomic conditions and market conditions will not arise, including as a result of a change in policies of the new U.S. presidential administration.

Reductions in customer spending in response to unfavorable or uncertain macroeconomic and market conditions, globally or in a particular region where we operate, as well as uncertainty in the regulatory landscape, have adversely affected, and could continue to adversely affect our business, results of operations and financial condition.

The solar industry has historically been cyclical and experienced periodic downturns, includingwhich thecould currentadversely downturn.affect demand for our products and services and our results of operations.

Our future success partly depends on continued demand for solar PV systems in the end-markets we serve, including residential, commercial and utility sectors across the world. The solar industry has historically been cyclical and is currently experiencing a downturn which has affected the demand for our products. Challenging business conditions, mainly as a result of overproduction, higher interest rates, and reductions in applicable governmental subsidies, have also contributed to demand decreases. For example, beginning in the second parthalf of 2023, the solar industry began to experience a downturn, particularly in Europe, which led to a large amount of requests to cancel or delay orders and the buildup of significantchannel backloginventory of oursolar products. While we did see stabilization in the solar market throughout 2024,recent periods, we cannot be certain that this trend will continue or other unfavorable macroeconomic conditions and market conditions will not arise, including as a result of a change in policies of the new U.S. presidential administration.administration or other shifts in the policy and regulatory landscape in the U.S. and internationally. The cancellation or deferral of product orders, or overproduction due to a change in anticipated order volumes or an inability to accurately forecast demand and align production and inventory levels accordingly could result in us holding excess or obsolete inventory, which could result in inventory write-downs and, in turn, could have a material adverse effect on our financial condition. Therefore, the solar industry may suffer significant or sustained downturns now or in the future, which has in the past and could in the future adversely affect demand for our solar products and our results of operations.

We have been and could continue to be subject to industry-specific seasonal fluctuations. Historically, the majority of our revenues are from the European and North American regions which experience higher sales of our products in the second and third quarters and have been affected by seasonal customer demand trends, including weather patterns and construction cycles. The first and fourth quarters historically have had softer customer demand in our industry, due to these same factors. In addition, construction levels of new solar PV projects, which create demand for our products, are typically slower in colder and wetter months. In European countries with Feed-in-Tariffs (FiTs), the construction of solar PV systems requiring our products may be concentrated during the second half of the calendar year, largely due to the annual reduction of the applicable minimum FiT and the fact that the coldest winter months are January through March. Accordingly, our business and quarterly results of operations could be affected by seasonal fluctuations in the future.

The revenues that our contract manufacturers generate from our orders represent a relatively small percentage of their overall revenues. As a result, fulfilling our orders may not be considered a priority in the event of constrained ability to fulfill all of their customer obligations in a timely manner. In addition, the facilities in which our products are manufactured are located outside of the U.S., currently in ThailandThailand, Vietnam and China. The location of these facilities outside of key markets such as the U.S. increases shipping time, thereby causing a long lead time between manufacturing and delivery.

If we fail to achieve broader market acceptance of our products, there would be an adverse impact on our ability to increase our revenue, and gain market share. For example, our GO ESS line of energy storage solutions line of business has not participated in our business recovery as well as we had anticipated and we incurred inventory charges for the fourth quarter and full year 2024.

our ability to develop products that comply with local standards and regulatory requirements, including evolving incentive-related requirements, as well as potential in-country manufacturing requirements; and our ability to develop and maintain successful relationships with our customers and suppliers.

Failure to develop and introduce these new products successfully, to successfully integrate acquired businesses or to otherwise manage the risks and challenges associated with our potential expansion into new product and geographic markets, could adversely affect our revenues.revenues, including if we are unable to generate sufficient revenue from these initiatives to offset associated research and development, marketing, manufacturing and regulatory costs

We believe that our success and our ability to reach our strategic objectives are highly dependent on the contributions of our key management, technical, engineering and sales personnel. The loss of the services of any of our key employees could disrupt our operations, delay the development and introduction of our hardware and software-enabled services, and negatively impact our business, financial condition and operating results. In particular, we are highly dependent on the services of our Chief Executive Officer and Chairman, as he possesses technical knowledge of our business, operations, and strategy. If we lose his services or if he decides to join a competitor or otherwise compete directly or indirectly with us, our business, operating results and financial condition could be materially harmed. We also depend on the skills and knowledge of our Chief Financial Officer and Vice President of Software and Hardware R&D. We cannot assure you that we will be able to successfully attract and retain the senior leadership necessary to grow our business. Furthermore, there is increasing competition for talented individuals in our field, and competition for qualified personnel is especially intense in the San Francisco Bay Area, where our principal offices are located.

The reduction, eliminationelimination, expiration, material modification, or expirationincreased qualification requirements of government subsidies and economic incentives forapplicable on-gridto solar electricityPV applicationssystems and energy storage systems could reduce demand for solar PV systems and harm our business.

The market for on-grid applications, where solar power, on a standalone basis or paired with energy storage systems, is used to supplement a customer’s electricity purchased from the utility network or sold to a utility under tariff, depends in large part on the availability and size of government-issued subsidies and economic incentives that vary by geographic market. Because our customers’ sales of solar power are typically into the on-grid market, the reduction, elimination or expiration of government subsidies and economic incentives for on-grid solar electricity may negatively affect the competitiveness of solar electricity relative to conventional and non-solar renewable sources of electricity and could harm or halt the growth of the solar electricity industry and our business. In addition, changes to the design, administration, monetization, or eligibility criteria of these programs may reduce their economic value or increase compliance burdens, which could similarly reduce demand for solar and energy storage solutions.

National, state and local government bodies in many countries, including the United States, have provided incentives in the form of feed-in tariffs (“FiTs”), NEM tariffs and related policies, rebates, tax credits, tax incentives and other incentives to system owners, distributors, system integrators and manufacturers of solar PV systems and battery energy storage systems to bolster the cost competitiveness of solar electricity in on-grid applications relative to the cost of utility power, and to reduce dependency on other forms of energy. Many of these government incentives expire, phase out over time, have limited funding allocations that require renewal by the applicable jurisdictional authority, or are being changed by governments due to changing market circumstances or changes to national, state or local energy policy. Further, if the ITC, AMPTC, or any other existing tax credits or incentives are reduced or eliminated as part of futures changes to the U.S. Internal Revenue Code, or changes to state law or regulatory reform initiatives by subsequent legislative or executive actions, sales of our products in North America and other markets could be adversely affected. Further, changes in U.S. federal tax law, Treasury or IRS guidance, or related administrative actions could reduce, phase down, limit, or impose additional requirements for claiming or monetizing incentives, including through timing requirements, domestic content rules, and restrictions related to “foreign entities of concern” (“FEOC”), which could reduce the attractiveness of projects that utilize our products and adversely affect demand in North America and other markets.

In addition, several European countries, including Germany, Belgium, Italy, the Netherlands and the United Kingdom, have adopted reductions in or ended their NEM or FiT programs. Certain countries have proposed or enacted taxes levied on renewable energy. These and related developments have significantly impacted the solar industry in Europe and may adversely affect the future demand for solar energy solutions in Europe, which could adversely impact our results of operations. In certain jurisdictions, additional grid fees or other charges applicable to renewable energy systems have also been proposed or implemented, which may further impact project economics and demand.

Federal, state, local and foreign tax credits, grants and other incentive programs have in the past had a positive effect on our sales since inception. However, if these programs are reduced, eliminated or expire, it could adversely affect sales of our products in the future. Reductions in incentives and uncertainty around future energy policy, including local content requirements, have in the past and could in the future negatively affect us and may continue to negatively affect our business, financial condition, and results of operations as we seek to increase our business domestically and abroad. Furthermore, electric utility companies may establish rate structures or interconnection requirements that could be harmful to the solar industry and adversely affect our sales. Additionally, our ability to expand to other countries may depend on new countries adopting and maintaining tax credits, tax incentives, NEM policies, or other programs to promote solar electricity and storage, to the extent such incentives or programs are not currently in place. Changes in incentive programs or electricity policies could negatively affect returns on our investments in the countries in which we operate as well as our business, financial condition and results of operations. In addition, uncertainty regarding future interpretations or implementation of incentive rules, including any “beginning of construction” or FEOC-related guidance, may increase market volatility and could result in delays or cancellations of projects.

WeIn mayaddition, alsorecent bepolicy negativelyactions affectedand byproposals the prospect of expanded trade restrictions between the government ofin the United States andhave whereincluded wethe imposition of, or ourconsideration partnersof, operate. Escalating trade tensions between the United States and China have led to increasedadditional tariffs and other trade restrictions,restrictions on certain imported goods, including tariffs applicable to some of our products. In addition, in early 2025 the new U.S. presidential administration imposed, or sought to impose, additional tariffs on goods importedsourced from China, Mexico, Canada,China and indicatedother that that it may impose substantial new or increased tariffs on foreign imports into the U.S.jurisdictions. Any escalation of a trade war between China and the U.S., or between any other jurisdictions in which we conduct business, could potentially impact our hardware component prices and impact any plans to sell products in China and other international markets. The escalation of any “trade war” may also contribute to the rise of inflation, which may negatively affect the United States’ and global markets. AtRetaliatory thismeasures, time,changes itin iscustoms unclearenforcement howpractices, furtheror expandedbroader trade restrictions maycould impactalso usdisrupt orlogistics, ourlengthen partners,lead althoughtimes, theylimit posecomponent theavailability, riskand ofincrease price instability and that exports of our products may become subject to retaliatory tariffs. Any of these factors could have a material adverse effect on our business, financial condition and results of operations.volatility.

.CurrentCurrent or future litigation or administrative proceedings could have a material adverse effect on our business, financial condition and results of operations.

The tax regimes we are subject to or operate under, including income and non-income taxes, are unsettled and may be subject to significant change. Changes in tax laws, regulations, or rulings, or changes in interpretations of existing laws and regulations, could materially affect our financial position and results of operations. For example, the 2017 Tax Cuts and Jobs Act, or Tax Act, made broad and complex changes to the U.S. tax code, including changes to U.S. federal tax rates, additional limitations on the deductibility of interest, both positive and negative changes to the utilization of future NOL carryforwards, and allowing for the expensing of certain capital expenditures. The 2020 Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, modified certain provisions of the Tax Act. In addition, on August 16, 2022, the IRA, among other provisions, imposes a 15% minimum tax on the adjusted financial statement income of certain large corporations and a 1% excise tax on corporate stock repurchases by U.S. publicly traded corporations and certain U.S. subsidiaries of non-U.S. publicly traded corporations, as well as significant enhancements of U.S. tax incentives relating to climate and energy investments. The change in U.S. presidential administrations raises the prospect of shifts in public policies and government incentives. Among the recent policy shifts directed by the new presidential administration is a pause in disbursements and review of funding processes for projects supported by the IRA. The exact impact of the Tax Act, the CARES Act and the IRA for future years is difficult to quantify, but these changes could materially affect our effective tax rate in future periods, in addition to any changes made by new tax legislation.

Our worldwide operations could be subject to natural disasters (including as a result of climate change), public health events, significant disruptions of information technology systems, data security breaches and other catastrophic business disruptions, which could harm our future revenue and financial condition and increase our costs and expenses. We rely on third-party manufacturing facilities, including for all product assembly and final testing of our products, which are performed at third-party manufacturing facilities in Chinacountries andoutside Thailand.of the United States. There may be conflict or uncertainty in the countries in which we operate, including public health issues (for example, the COVID-19 pandemic or an outbreak of other contagious diseases or health epidemics), safety issues, natural disasters, fire, disruptions of service from utilities, nuclear power plant accidents, regional wars, or general economic or political factors. Such risks could result in an increase in the cost of components, production delays, general business interruptions, delays from difficulties in obtaining export licenses for certain technology, tariffs and other barriers and restrictions, longer payment cycles, increased taxes, restrictions on the repatriation of funds and the burdens of complying with a variety of foreign laws, any of which could ultimately have a material adverse effect on our business.

The failure of battery energy storage cost to continue to decline would have a negative impact on our business and financial condition.

The growth and profitability of our GO ESS product line is dependent upon the continued decline in the cost of battery energy storage. Over the last decade, the cost of battery energy storage systems, particularly lithium-ion based battery energy storage systems, has declined significantly. This lower cost has been driven by advances in battery technology, maturation of the battery supply chain, the scale of battery production by the leading manufacturers and other factors. The growth of our hardware sales and related software-enabled services is dependent upon the continued decrease in the price and efficiency of battery energy storage systems of our OEM suppliers. If for whatever reason, our OEM suppliers are unable to continue to reduce the price of their battery energy storage systems, our GO ESS product line could be negatively impacted.

We are seeing an increase in overall operating and other costs as the result of higherinflationary inflationpressures rates,and elevated production costs, in particular in Europe and the United States. While inflationary pressures have moderated from recent peaks, and we do not believe inflationary pressures have caused a material impact on our business to date, there can be no guarantee that inflation will not cause our operations to suffer in the future. If high inflation rates continue,were rise, or if the global or U.S. economies experience a recession or economic slowdown, consumers may not be able to purchase our products as usual, especially where these factors have a direct impact on the consumers. As a consequence, our earnings may be adversely affected. High interest rates in Europe, the U.S., or elsewhere could adversely affect our costs and earnings due to the impact those changes have on our variable-rate debt instruments.

The Company has subsidiaries that conduct research and development, in addition to our Predict+ service, that are located in Israel. Accordingly, political, economic, and military conditions in Israel directly affect us. Israel has been and is currently involved in a number of armed conflicts and is the target of terrorist activity, including threats from Hezbollah militants in Lebanon, Iranian militia in Syria, repeated attacks on civilians from Iran,Iran and others.other Forregional example, on October 7, 2023, Hamas terroristsactors, and membersthe ofsecurity othersituation terroristremains organizations conducted a series of attacks on Israeli civilianvolatile and military targets. Shortly following the attack, Israel declared war against Hamas, and several hundred thousand Israeli reservists were drafted to perform immediate military service. Although Israel has since agreed to cease fires with each of Hamas and Hezbollah with respect to the conflicts in the Gaza Strip and Iran, these conflicts could re-escalate if the cease fires are violated. Military conflicts at some of Israel’s borders are difficult to predict, as are its economic implications on the Company’s business and operations in Israel and on Israel’s economy in general.predict.

In addition, any future armed conflict, political instability, event of escalation or violence in the region may impede our ability to manage our business effectively or otherwise adversely affect our business or operations. Some of our employees in Israel are obligated to perform annual reserve duty in the Israeli military and are subject to being called for additional active duty under emergency circumstances, including in connection with the current wararmed againstconflict Hamas.and Inrelated the event that our subsidiary’s office is damaged as a result of hostile action, or the current war against Hamas or new hostilities otherwise disrupt the ongoing operation of our office, our ability to operate could be materially adversely affected.hostilities.

Managing Supply Chain. We rely on contract manufacturers and suppliers to produce our components.components, with a significant portion of our supply chain originating in Thailand and China. As noted above, we transitioned production of our GO ESS product line for the U.S. market from China to Vietnam in October 2025. Our ability to grow depends, in part, on the ability of our contract manufacturers and suppliers to provide high quality services and deliver components and finished products on time and at reasonable costs. While we have diversified our supply chain, some of our suppliers and contract manufacturers are sole-source suppliers. Our concentration of suppliers could lead to supply shortages, long lead times for components and supply changes. A significant portion of our supply chain originates in Thailand and China. In the event we are unable to mitigate the impact of delays and/or price increases in raw materials, electronic components and freight, as a result of new or existing tariffs, trade restrictions, retaliatory actions, or otherwise, it could delay the manufacturing and delivery of our products, which would adversely impact our cash flows and results of operations, including revenue and gross margin. In addition, in a slowing economic environment,environment in the U.S. and worldwide, our inventory levels may continue to increase due to existing purchase commitments and our ability to negotiate volume pricing discounts may be impaired.

Gross Profit (Loss) Profit and Gross Margin

We define gross profit (loss) profit as total net revenue less cost of revenue, and define gross margin expressed as a percentage, as the ratio of gross profit to revenue. Gross profit (loss) profit and margin can be used to understand our financial performance and efficiency and allow investors to evaluate its pricing strategy and compare it against competitors. We use these metrics to make strategic decisions identifying areas for improvement, set targets for future performance and make informed decisions about how to allocate resources going forward.

Net revenue decreasedincreased by $91.2$49.5 million or 62.8%91.7% for the year ended December 31, 2024,2025, as compared to the same period in 2023.2024. The decreaseincrease is driven primarily by an increase of $42.1 million or 87.2% in net revenue from our MLPE product line, compared to the same period in 2024, which is primarily dueattributable to the solarcontinued industrymarket experiencingrecovery athat broad-based slowdown startingbegan in the secondfirst halfquarter of 20232024 and increased market acceptance of our products. Additionally, our GO ESS product line increased by $6.2 million or 178.6% in bothnet revenue for the U.S.year andended EuropeanDecember markets,31, 2025, compared to the same period in 2024, which resultedis inprimarily elevated inventory levels with distributors and installers, and as a result the overall demand for our products and services decreased as distributors and installers respondedattributable to thisincreased slowersolar demandrepowering environment.activities. Please see the section below for a discussion of the factors influencing the fluctuations in net revenue for each of our geographic regions.

AmericasEMEA – Net revenue for the AmericasEMEA region decreasedincreased by $12.0$36.9 million or 47.8%113.2% for the year ended December 31, 2024,2025, as compared to the same period in 2023.2024. The decreaseincrease is driven primarily dueby an increase of $33.1 million and $3.2 million in net revenue from our MLPE and GO ESS product lines, respectively. This growth was primarily driven by higher demand of our MLPE products in Germany, the Czech Republic, the United Kingdom, Italy and Poland, in addition to lowerthe demandsale forof $3.1 million of our solutionsGO asESS products to a result of higher interest rates and the transition from NEM 2.0 to NEM 3.0customer in California.Italy.

APAC – Net revenue for the APAC region decreased by $2.5$0.8 million or 23.0%9.2% for the year ended December 31, 2024,2025, as compared to the same period in 2023.2024. The decreasechange wasis driven primarily driven by a $2.2decrease of $0.7 million declinein net revenue from our MLPE product line in salesAustralia, inthe ChinaPhilippines, which is primarily attributable to higher interest rates impacting investment decisionsThailand and new entrants to the MLPE market, including low-cost Asian manufacturers.Singapore.

Cost of revenue decreasedincreased by $35.8$1.0 million or 38.1%1.7% for the year ended December 31, 2024,2025, as compared to the same period in 2023.2024. The decreaseincrease is primarily duedriven toby a 62.8%91.7% declineincrease in net revenuesrevenue for the year ended December 31, 2024,2025, compared to the same period in 2023.2024. In addition to higher net revenue, the increase was driven by higher product warranty expense, primarily due to an increased number of units sold during the period, as well as a change in estimated future service delivery costs. The decreasechange was also driven by an increase of $1.5 million in customs fees primarily associated with the tariffs that were enacted in 2025. The increase was partially offset by inventorythe chargessale of $23.5GO millionESS duringinventory in 2025 that had been previously reserved in 2024. During the year ended December 31, 2024, the Company recorded $23.5 million of inventory reserve charges, primarily duerelated to excess and slow-moving inventory within the GO ESS lineinventory and lower sales volumes driven by unfavorable macroeconomic and market conditions in the second half of energy storage solutions as a result of the macroeconomic factors noted above.2024.

Gross profit decreasedincreased fromby $51.3$48.5 million foror the1,167.2% year ended December 31, 2023, tofrom a gross loss of $4.2 million for the year ended December 31, 2024, to a decreasegross profit of $55.5$44.4 million orfor 108.1%.the year ended December 31, 2025. Gross margin decreasedincreased by 43.050.5 percentage points for the year ended December 31, 2024,2025, as compared to the same period in 2023.2024. The decreasesincreases arewere primarily duedriven toby inventoryan reserve88.8% chargesdecrease of $23.5 million during the year ended December 31, 2024 primarily due toin excess and slow-movingobsolete inventory within the GO ESS line of energy storage solutions and lower sales volume due to the unfavorable macroeconomic and market conditions noted above,expense, in addition to higher-margin sales promotionsof andpreviously discounts related to ourreserved GO ESS productinventory, line.resulting from reserves established in the second half of 2024.

Research and development expenses consist of personnel-related expenses and facility-related expenses. Research and development employees are primarily engaged in the design and development of our MLPE, GO ESS solutions and Predict+. products. We devote substantial resources to research and development programs that focus on enhancements to, and cost efficiencies in, our existing products or services and timely development of new products and services that utilize technological innovation to drive down product costs, improve functionality and enhance reliability. We intend to continue to invest appropriate resources in our research and development efforts because we believe they are critical to maintaining our competitive position.

Research and development expense increaseddecreased by $0.4$0.6 million or 3.8%6.2% for the year ended December 31, 2024,2025, as compared to the same period in 2023.2024. The increase was primarily driven by an increase in consulting and personnel-related stock-based compensation expenses, anddecrease is partiallyattributed offsetto by a decrease inreduced payroll relatedexpense expensesresulting from a lower headcount during the year ended December 31, 2024,2025, compared to the same period in 2024, primarily due to workforce reductions of 10% in April 2024 that were implemented in response to the industry-wide slowdown in 2023.

Sales and marketing expensesexpense consist primarily of personnel-related expenses, as well as advertising, travel, trade shows, marketing, customer support and other indirect costs. We expect to continue to make theinvestments necessaryin investmentsthis area to enable us to execute our strategy to increase our market penetration geographically and enter into new markets by expanding our customer base of distributors.

Other Expenses (Income), Expenses, Net

Other expenses (income),expenses, net, primarily consist of interest income earned on our cash and short term investments, realized gains and losses on short-term and long-term marketable securities, interest expense and fees under our convertible note, non-cash interest expense related to the amortization of debt issuance costs, and non-cash charges recognized for the change in fair value of our convertiblecontingent notesshare embeddedliability, derivative,losses andor convertiblegains preferredon stocksale warrantsintangible assets and losses or gains on debt extinguishment. Refer below for further details on the separate components of other (income) expenses, net.

InterestThe expensegain increasedon bysale $3.3of millionintangible orassets 40.7%was for the year ended December 31, 2024, as comparedattributable to the samepatent periodsale inwhich 2023.occurred Thison increaseDecember is16, primarily2025. due to the timing of the amortization of the debt discount of $23.5 million that was recorded upon the bifurcation of the conversion options at the time of the Business Combination. Please seeSee Note 9,14, “Long-TermPatent Debt,Sale,” of the notes to consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information.

OtherInterest income, net of $37,000expense decreased toby other expenses, net of $0.2$0.4 million or 3.6% for the year ended December 31, 2024,2025, as compared to the same period in 2023.2024. ThisThe isdecrease was primarily duedriven tothe extinguishment of the Company’s Convertible Promissory Note on December 17, 2025, which reduced the period over which interest was accrued, and issuance costs were amortized during 2025. Interest income increased by a reductionde ofminimis finance fees charged to customersamount for the year ended December 31, 2024,2025, as compared to the same period in 2023.2024.

In accordance with ASU No. 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“Subtopic 205-40”), wethe Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about ourthe Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued. The Convertible Promissory Note, which has an aggregate principal amount outstanding of $50.0 million as of December 31, 2024, has a maturity date of January 9, 2026. See Note 9, “Long-Term Debt,” of the notes to consolidated financial statements for additional information regarding the Convertible Promissory Note. Management determined as a result of this evaluation, our current cash, working capital position, and upcoming maturity date of its Convertible Promissory Note, raises substantial doubt about our ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.

At-the-market offering. In November 2024, we entered into thean ATM Agreement with the Sales Agent, pursuant to which we may offer and sell shares of our common stock having an aggregate gross sales price of up to $14.2 million, from time to time, through the Sales Agent in transactions deemed to be “at-the-market” offerings under federal securities laws (the “2024 ATM Program”). The offeringprogram ofconcluded Sharesin pursuantOctober to the ATM Agreement will terminate upon (a) five business days’ advance notice from us to the Sales Agent or five business days’ advance notice from the Sales Agent to us or (b) otherwise by mutual agreement of the parties pursuant to the terms of the ATM Agreement. Sales under the 2024 ATM Program are subject to a maximum commission of up to 3.0% of the gross proceeds per share sold through the Sales Agent.2025.

During the year ended December 31, 2024,2025, a total of 16,3368,309,168 shares of common stock were issued pursuant to the SalesATM Agreement for aggregate gross proceeds of approximately $17,000,$14.2 million, before deducting commissions and offering expenses payable by us. AtAs of December 31, 2024,2025, $14.2the million2024 remainedATM Program was fully utilized, and there are no additional shares available for issuance under the ATM Agreement.program. Refer to Note 11,9, in Part II, Item 8 of this Annual Report on Form 10-K for more information on the at-the-market offering.

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors disclosed in the section entitled “Risk Factors” in Part I, Item 1A, of the Company’s 2025 Annual Report, and the other reports that we have filed with the SEC. Any of the risks discussed in such reports, as well as additional risks and uncertainties not currently known to us or that we currently deem immaterial, could materially and adversely affect our results of operations, financial condition or prospects. During the period covered by this Quarterly Report on Form 10-Q, there have been no material changes in our risk factors as previously disclosed.disclosed, except for the following:

Revolving Credit Facility. On March 31, 2026, we entered into a revolving credit facility (“Credit Facility”) with Wells Fargo Bank, National Association that provides for up to $10.0 million of borrowing capacity, subject to a borrowing base based on eligible accounts receivable and eligible inventory. The Credit Facility matures on March 31, 2029. As of MarchJune 31,30, 2026, there$4.1 weremillion no amountswas outstanding under the facility,Credit Facility, and thewe Company waswere in compliance with all applicable covenants. For more information, see Note 7, “Debt” of the notes to condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Patent Sale. As disclosed in the Company’s 2025 Annual Report, on December 16, 2025, we entered into a patent purchase agreement involving the sale of certain patent rights. Under the terms of the patent purchase agreement, total consideration is expected to be between $15.0 million and $18.0 million. We received $15.0 million at the initial closing,closing. On May 14, 2026, we satisfied the specified conditions required to release the holdback payment and anreceived additional holdback amountconsideration of up$2.8 tomillion, $3.0for total consideration received under the patent purchase agreement of $17.8 million. Net proceeds from the holdback payment were approximately $0.4 million is contingent onafter the satisfactionrepayment of specifiedexpenses. conditions.We Asrecognized a gain of Marchapproximately 31,$0.4 2026,million theseduring conditionsthe hadthree notand beensix met.months ended June 30, 2026. Additionally, seller-retained royalties under the patent purchase patent agreement, which entitlesentitle us to receive up to $5.0 million of future license proceeds, represent contingent income and will be recognized in other (income) expenses,income, net when and if earned. As of June 30, 2026, we have collected $0.7 million in seller-retained royalties. For more information, see Note 14, “Patent Sale” of the notes to condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Trade Tariffs. It is uncertain what impact new or existing tariffs, trade restrictions, or retaliatory actions,actions may have on us, our business, the solar industry, and our customers. U.S. net revenue represented 19.8% and 23.3%17.8% of our total net revenue for the threesix months ended MarchJune 31,30, 2026, and year ended December 31, 2025, respectively.2026. Substantially all of our MLPE products, which represented 66.7% and 68.9%71.6% of U.S. net revenues during the threesix months ended MarchJune 31,30, 2026, and year ended December 31, 2025, respectively, were manufactured in Thailand. Our GO Energy Storage Systems (“GO ESS”) products represented 32.2%27.6% and 23.1%of of U.S. net revenues during the threesix months ended MarchJune 31,30, 2026, and year ended December 31, 2025, respectively.2026. Beginning in October 2025, we transitioned production of our GO ESS product lineproducts for the U.S. market from China to Vietnam. As of MarchJune 31,30, 2026, we were subject to tariffs on all products imported into the United States from the countries in which we manufacture our products. During the three months ended MarchJune 31,30, 2026 and 2025,2026, we incurred $0.7$0.8 million and $0.1 million ofin tariff-related costs, respectively.compared to $0.2 million during the same period in 2025. During the six months ended June 30, 2026, we incurred $1.5 million in tariff-related costs, compared to $0.3 million during the same period in 2025.

Managing Supply Chain. We rely on contract manufacturers and suppliers to produce our components, with a significant portion of our supply chain originating in Thailand, VietnamThailand and China. AsIn notedOctober above,2025, wethe transitionedCompany productionbegan manufacturing a mix of ourits GO ESS product line for the U.S. market from China to Vietnamproducts in October 2025.Vietnam. Our ability to grow depends, in part, on the ability of our contract manufacturers and suppliers to provide high quality services and deliver components and finished products on time and at reasonable costs. While we have diversified our supply chain, some of our suppliers and contract manufacturers are sole-source suppliers. Our concentration of suppliers could lead to supply shortages, long lead times for components and supply changes. In the event we are unable to mitigate the impact of delays and/or price increases in raw materials, electronic components and freight, as a result of new or existing tariffs, trade restrictions, retaliatory actions, or otherwise, it could delay the manufacturing and delivery of our products, which would adversely impact our cash flows and results of operations, including revenue and gross margin. In addition, in a slowing economic environment in the U.S. and worldwide, our inventory levels may continue to increase due to existing purchase commitments and our ability to negotiate volume pricing discounts may be impaired.

On July 7, 2025, the President issued an Executive Order directing the Secretary of the Treasury to issue updated guidance within 45 days regarding the “beginning of construction” requirements applicable to Section 48E projects. In August 2025, the U.S. Department of the Treasury and the IRS issued revised “beginning of construction” guidance for clean energy tax credits that applies only to projects above 1MW. The Executive Order also directs the Secretary to implement the FEOC restrictions set forth in the OBBB. Under the new FEOC rules, a U.S. energy project can only receive specific tax credits if the project’s equipment from certain FEOC-related entities does not exceed set amounts, and the rules disqualify other credits from applying to US-made products that contain too many inputs from certain FEOC-related entities. The rules also prevent a company from receiving specific tax credits if it relies too much on investment or material assistance from certain FEOC-related entities, including in circumstances where a contract, license, or other arrangement gives an FEOC-related entity effective control over the company or its projects or products. In February 2026, the U.S. Department of the Treasury and the IRS issued guidance applicable to Sections 48E and 45X of the Code, including rules and interim safe harbors for determining whether projects or manufactured components receive material assistance from prohibited foreign entities. Additional FEOC guidance remains forthcoming and is expected to be finalized in 2026, which could further tighten existing requirements.

During the threesix months ended MarchJune 31,30, 2026, production activities commenced through a U.S. based contract manufacturer for certain components that are expected to be used in products supplied under the EG4 arrangement. No component shipments were made to EG4 duringDuring the threesix months ended MarchJune 31,30, 2026, and we did not recognize any benefit related to the AMPTC under Section 45X of the Code during the period. There can be no assurance that EG4 will qualify for, receive, monetize or retain any AMPTC, that any products manufactured using our components will satisfy applicable requirements, or that we will receive any amounts under the amended agreement, including as to the timing or amount of any such payments. Changes in the law, additional guidance, FEOC-related restrictions, sourcing requirements, documentation requirements, or interpretations of Section 45X of the Code could affect the expected economics of our agreement with EG4, our sourcing strategy, and our customers’ eligibility for tax credits, which may affect their purchasing decisions and demand for our products.

Macroeconomic and Market Conditions. The global macroeconomic and market uncertainty has adversely impacted the U.S. and global economies and may continue to do so. As our global footprint expands, we are increasingly exposed to the effects of this evolving environment, including inflation and input-cost pressures, interest rate levels and volatility, tariffs and changes in trade policy, foreign currency fluctuations, potential economic slowdowns or recessions, geopolitical tensions, and regulatory changes stemming from current and future trade policies. A tighter credit market for consumer and business spending could, in turn, adversely affect the spending levels of installers and end users and lead to increased price competition for our products. In addition, a tighter credit environment could adversely affect installer and end-customer demand, increase price sensitivity, and lead to greater price competition for our products. In addition, several European countries, including Germany, Belgium, Italy, the Netherlands and the United Kingdom, have adopted reductions in or ended their NEM tariffs or feed-in tariffs programs. Certain countries have proposed or enacted taxes levied on renewable energy. These and related developments have significantly impacted the solar industry in Europe and may adversely affect the future demand for solar energy solutions in Europe, which could adversely impact our results of operations. Reductions in customer spending in response to unfavorable or uncertain macroeconomic and market conditions, globally or in a particular region where we operate, have adversely affected, and could continue to adversely affect, our business, results of operations and financial condition.

Additionally, we have made, and plan to continue to make, substantial investments in research and development initiatives to support new product introductions. Although a significant portion of our revenue is derived from our MLPE products, we are continuing to develop and promote additional offerings such as our GO ESS product line and Predict+ service, which we believe will help contribute to long-term revenue growth and market leadership.growth. We believe that our entry into new markets will facilitate revenue growth and customer diversification.diversification, however, we cannot assure you that we will be able to enter into new markets or in expand our product offerings in new and existing markets on the timelines that we expect or at all due to the risks and uncertainties related to such expansion discussed Part I, Item 1A, “Risk Factors” in our 2025 Annual Report.

We define gross profit as total net revenue less cost of revenue, and define gross margin, expressed as a percentage, as the ratio of gross profit to revenue. Gross profit and margin can be used to understand our financial performance and efficiency and allow investors to evaluate itsour pricing strategy and compare it against competitors. We use these metrics to make strategic decisions identifying areas for improvement, set targets for future performance and make informed decisions about how to allocate resources going forward.

Net revenue increased by $6.4$1.4 million or 33.7%5.6% for the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025, which is driven primarily by an increase of $4.8$2.0 million or 30.0%9.9% in net revenue from our MLPE product line, which is attributable to an increased market acceptance of the products. Additionally,The netincrease is partially offset by a decrease in royalty revenue fromof our GO ESS products increased by $2.0$0.8 million orprimarily 96.4%due to all royalty income now being recognized in other income, net for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025, which is primarily attributable tofollowing the sale of $2.2certain millionpatent rights in December 2025. Royalty income was recognized in net revenue during the three months ended June 30, 2025. For more information on the royalty revenue transition to other income, net, see Note 14, “Patent Sale” of ourthe GO ESS productsnotes to acondensed customerconsolidated financial statements included in ItalyPart andI, increasedItem solar1 repoweringof activitiesthis inQuarterly theReport Unitedon States.Form 10-Q.

APACEMEA - Net revenue for the APACEMEA region decreasedincreased by $0.2$0.3 million or 6.5%1.7% for the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025, which is driven primarily by aan decreaseincrease of $0.2 million in net revenue from our MLPE products. ThisThe decreasegrowth was primarily driven by lowerhigher demand of our MLPE products in theSpain, Philippines, ChinaItaly and Thailand.Germany, Theand decrease wasis partially offset by ana increasedecrease in demandnet ofrevenue ourfrom MLPE productsproduct sales in Australia.the Czech Republic and United Kingdom.

Cost of revenues increased by $2.7$2.1 million or 23.5%15.9% and gross profit decreased by $0.8 million or 7.1% for the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025,2025. whichThe isincrease in cost of revenues was primarily driven by a 33.7%5.6% increase in net revenue for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025. In addition to higher net revenue, thecost increaseof wasrevenues primarilyincreased drivendue byto a $0.5$2.9 million increasedecrease in inventoryfavorable scrapexcess expense, mainly related toand obsolete rawinventory materials,adjustments and a $0.7 million increase in expensecustoms associatedand with tariffs enacted in 2025. The increase was partially offset by higher sales volumes of GO ESS inventory that had been previously impaired in the second half of 2024, as well as a $1.3 million decrease in warrantyfreight expense for the three months ended March 31, 2026 compared to the same period in 2025. TheThese increases were partially offset by a $1.1 million decrease in warranty expense was primarily due to changes in estimated shipping costs during the three months ended March 31, 2025.costs.

Gross profit increased by $3.6 million or 50.5% for the three months ended March 31, 2026, as compared to the same period in 2025. Gross margin increaseddecreased by 4.75.4 percentage points for the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025. The increasedecrease was primarily driven by higher-marginlower sales of previously reserved GO ESS inventory thatat hadhigher beenmargins previouslyas reserveda result of the inventory reserves recorded against the product line in the second half of 2024,2024. asThe welldecrease aswas partially offset by a $1.1 million decrease in warranty expense forprimarily theas threea monthsresult endedof March 31, 2026 compared to the same periodchanges in 2025,estimated asshipping noted above.costs.

Research and development expense increased by $0.5$0.2 million or 22.2%10.6% for the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025. The increase was primarily attributable to higher payroll-related expenses and bonus expense, driven by increased headcount and the timing of bonus accruals during the three months ended March 31, 2026, compared to the same period in 2025.

Sales and marketing expense increaseddecreased by $0.6$0.4 million or 14.4%8.3% for the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025. The increasedecrease was primarily attributable to highera payroll-related$0.5 million decrease in bonus and stock-based compensation expenses andprimarily bonusrelated expense,to drivenreversals byof increasedamounts headcountpreviously accrued and thea timingreduction ofin bonusequity accrualsawards granted during the three months ended MarchJune 31,30, 2026, compared to the same period in 2025. This increase was partially offset by a $0.2 million increase in payroll costs driven by annual compensation adjustments during the three months ended June 30, 2026, compared to the same period in 2025.

General and administrative expense increased by $1.0$0.5 million or 19.9%5.1% for the threesix months ended MarchJune 31,30, 2026, as compared to the same period in 2025. The increase was primarily attributable to higheran increases in bad debt expense of $1.2 million related to a customer bankruptcy, increased payrollbankruptcy and related expenses, and higher office and facilitiesfacility-related insurance expense.expense of $0.6 million. The increase was partially offset by decreases in payrollbonus and relatedstock based compensation expenses wasof driven$1.2 bymillion higherrelated employee-relatedto costsreversals acrossof multipleamounts payrollpreviously expenseaccrued categoriesand compareda forreduction in equity awards granted during the threesix months ended MarchJune 31,30, 2026, compared to the same period in 2025. These increases were partially offset by lower professional services expense primarily due to decreased legal expense in the three months ended March 31, 2026 compared to the same period in 2025.

Other Expenses (Income) Expenses,, Net

Interest expense decreased by $2.9$2.8 million or 99.1% for the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025,2025. The decrease was primarily duedriven toby the extinguishment of the Convertible Promissory Note in December 2025, resulting in no related interest expense during the three months ended MarchJune 31,30, 2026.

IncomeWe recorded income tax benefit of $0.2$3.2 million incurredand during$3.4 million for the three and six months ended MarchJune 31,30, 20262026, respectively. This was primarily due to primarily related to realizeda foreignvaluation currencyallowance translationrelease lossesresulting recognized byfrom a change to an intercompany transfer pricing arrangement at the affected foreign subsidiary. IncomeWe recorded income tax expense of $0.3$0.2 million incurredand during$0.5 for the three and six months ended MarchJune 31,30, 2025, was primarily duerelated to the estimated settlement of a foreign tax examination.examination during the period. For more information, see Note 13, “"Income Taxes”" of the notes to condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

As of MarchJune 31,30, 2026, our principal sources of liquidity were cash and cash equivalents of $11.6$16.9 million and total working capital, which we define as current assets less current liabilities, of $32.7$36.6 million, and availability under our revolving credit facility. Our principal uses of cash are for funding our operations, capital expenditures, other working capital requirements and other investments. On February 26, 2026, we closed the Registered Direct Offering resulting in gross proceeds of $15.0 million, and net proceeds of approximately $14.0 million, after deducting placement agent fees and offering expenses. We believe that our existing cash providedand bycash equivalents, our expected cash flows from operations, as well as the gross proceeds received from the Registered Direct Offering and our available borrowing capacity under the Credit Facility,Facility will provide adequate liquidity for ongoing operations, planned capital expenditures and other investments for at least the next 12 months from the issuance date of this Quarterly Report on Form 10-Q.

Revolving Credit Facility. In March 2026, we entered into the Credit Facility with Wells Fargo that provides for borrowings of up to $10.0 million. As of MarchJune 31,30, 2026, there$4.1 weremillion no borrowingswas outstanding under the facility.Credit Facility, and we were in compliance with all applicable covenants. For more information, see Note 7, “Debt” of the notes to condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Operating Leases. We have entered into various non-cancelable operating leases primarily for our facilities with original lease periods expiring through the year 2029, with our most significant leases relating to our facilities in Los Gatos, California and Ra’anana, Israel. As of MarchJune 31,30, 20262026, we had total lease obligations of $2.5$2.3 million recorded on our condensed consolidated balance sheet. For more information, see Note 11, “Leases” of the notes to condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Management closely monitors expenditures and is focused on obtaining new customers and continuing to develop our products and services. Cash from operations and our liquidity could also be affected by various risks and uncertainties, including, but not limited to, economic concerns related to tariffs, interest rates, inflation or the supply chain, including timing of cash collections from customers and other risks which are detailed in the section entitled “Cautionary Note Regarding Forward-Looking Statements” included elsewhere in this Quarterly Report on Form 10-Q, including in Part II, Item 1A, “Risk Factors” of this Quarterly Report on Form 10-Q and in Part I, Item 1A, “Risk Factors,Factors” in the 2025 Annual Report.

Cash Flows (Used in) Provided By Operating Activities

Cash flows from operating activities consisted of net loss adjusted for certain non-cash reconciling items, such as non-cash interest expense, stock-based compensation expense, provision to write down inventories to net realizable value, depreciation and amortization, and non-cash lease expense, gain on sale and payment of transaction costs related to the sale of intangible assets, deferred income tax benefit and changes in our operating assets and liabilities. Cash provided by operating activities decreased by $17.5 million to cash used in operating activities increased by $8.7 million during the threesix months ended MarchJune 31,30, 2026, as compared to the same period in 2025.

Net cash usedprovided inby investing activities was $0.2$2.3 million for the threesix months ended MarchJune 31,30, 2026, which is primarily attributable to the proceeds from the sale of intangible assets as a result of our satisfaction of the conditions specified in the patent purchase agreement and receipt of an additional holdback payment in May 2026, and was partially offset by the purchase of property and equipment. Net cash used in investing activities was $3.5$9.6 million for the threesix months ended MarchJune 31,30, 2025, which is primarily attributable to the purchase of marketable securities and was partially offset by proceeds received from the sale and maturities of marketable securities.

Net cash provided by financing activities increased by $12.5$16.4 million during the threesix months ended MarchJune 31,30, 2026, compared to the same period in 2025 which is primarily attributable to the proceeds from the Company’sissuance of common stock in the Registered Direct Offering and proceeds from theborrowings exercise of stock options duringunder the currentCredit period.Facility. TheseThis inflows wereis partially offset bydue theto payments of tax withholdings of restricted and performance stock awards, payment of offeringdebt issuance costs relatedon tothe Credit Facility and payment of expenses associated with the Registered Direct Offering, and payment of tax withholdings on restricted stock awards, performance stock awards, and exercised options.Offering.

Our contractual obligations primarily consist of our obligations under operating leases and inventory component purchases. As of MarchJune 31,30, 2026, there have been no material changes from our disclosure in our 2025 Annual Report. For more information on our future minimum operating leases, see Note 11, “Leases” and for more information on our ConvertibleCredit PromissoryFacility, Notessee andNote other7, related“Debt,” debtof the notes to condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

For the period ended MarchJune 31,30, 2026, there have been no material changes to our critical accounting estimates from the information reported in our 2025 Annual Report.