FTC Solar, Inc.
For the period ended Jun 30, 2025. Filed Aug 5, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 5, 2025
FTCI$1.56+21.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-01.
0000950170-25-061469
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-05.
0000950170-25-102455
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsOutstanding debt and warrantsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 130 previous paragraphs and 168 current paragraphs.
89 unchanged; 40 reworded; 30 added; 1 removed; 0 previous and 9 current paragraphs rearranged.
Tables are not compared: 13 previous and 26 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (30)
Current report
On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act, which accelerates the phase-outs and terminations of various eligible tax credits enacted as part of the IRA and places restrictions on continued receipt of tax credits by specified foreign entities and foreign influenced entities. The reduction, elimination or expiration of government incentives for, or regulations mandating the use of, as well as corporate commitments to the use of renewable energy and solar energy specifically could reduce demand for solar energy systems and harm our business, financial condition and results of operations.
Current report
The increase in service revenue for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, primarily resulted from (i) an increase of 35% in logistics activity levels and (ii) an increase of 15% in ASP as compared to the three months ended June 30, 2024 as a result of project size and pricing. We also had higher engineering consulting revenue associated with new project activity during the three months ended June 30, 2025.
Current report
We had negative gross margin for the three months ended June 30, 2025 due to the impact of additional costs associated with tariffs and specified minimum purchase commitments referred to above. This was partially offset by higher revenues and indirect cost reductions, primarily due to lower personnel costs from headcount reductions and lower warranty and remediation expenses.
Current report
We had negative gross margin for the three months ended June 30, 2024 due to (i) the impact of lower revenue levels on our ability to cover certain overhead costs and (ii) insufficient service revenue to fully cover our warehousing costs.
Current report
The decrease in selling and marketing expenses for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, was primarily attributable to (i) lower payroll costs of $0.6 million, (ii) lower marketing costs of $0.2 million, primarily associated with reduced spending for trade shows, (iii) lower professional services and stock-based compensation expense of $0.2 million and (iv) lower travel spending. This was partially offset by higher credit loss provisions of $0.4 million associated with certain specific customer accounts. Selling and marketing costs as a percentage of revenue were 6.5% for the three months ended June 30, 2025, compared to 17.8% for the three months ended June 30, 2024.
Current report
Gain on sale of Atlas
Current report
We sold our Atlas web-based software platform on December 2, 2024. In connection with the sale, the purchaser agreed to future potential earnout payments based on annual license renewals by certain existing customers during 2025. We received such a payment from the purchaser in June 2025. In accordance with our existing accounting policy, we recognize a gain from these contingent earnout payments upon receipt.
Current report
Results of Operations - Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
Current report
Revenue
Current report
Product revenue
Current report
Service revenue
Current report
The increase in cost of revenue for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, was primarily driven by (i) an increase of 147% in MW produced, (ii) additional costs associated with tariffs and specified minimum purchase commitments with Alpha Steel, a related party, and (iii) an increase of 62% in logistics activity levels. Costs associated with these increases in activity levels were partially offset by lower personnel costs from headcount reductions and lower warranty and remediation expenses.
Current report
Our gross margin percentage of revenue for the six months ended June 30, 2025 was a negative 18.1%, which was slightly better than the negative 18.5% for the six months ended June 30, 2024.
Current report
Research and development
Current report
Selling and marketing
Current report
General and administrative
Current report
Interest expense
Current report
Gain on sale of Atlas
Current report
We sold our Atlas web-based software platform on December 2, 2024. In connection with the sale, the purchaser agreed to future potential earnout payments based on annual license renewals by certain existing customers during 2025. We received such a payment from the purchaser in June 2025. In accordance with our existing accounting policy, we recognize a gain from these contingent earnout payments upon receipt.
Current report
Loss from unconsolidated subsidiary
Current report
As described further in Note 19, "Subsequent events" in Part I, Item 1 of this Quarterly Report, on July 2, 2025 (the "Closing Date"), we entered into a Credit Agreement (the "Credit Agreement") by and among the Company, as borrower, each lender party thereto from time to time (the "Lenders"), and Acquiom Agency Services LLC, as administrative agent for the Lenders. The Credit Agreement provides for a senior secured term facility of up to $75 million, consisting of (i) $14.3 million principal amount of Initial Term Loans that were funded on the Closing Date; (ii) $23.2 million principal amount of First Delayed Draw Term Loans that may be funded during the 90-day period following the Closing Date, subject to Company stockholder approval of the issuance of all of the shares of the Company's common stock issuable upon the full exercise of the warrants issued to the Lenders on the Closing Date in connection with the transactions under the Credit Agreement; and (iii) up to $37.5 million principal amount of Second Delayed Draw Term Loans that may be requested by the Company and approved by the Lenders in their sole discretion. After deductions for certain fees and expenses, the net proceeds received by the Company on the Closing Date from the funding of the Initial Term Loans totaled approximately $13.0 million.
Current report
At June 30, 2025, we had long-term Senior Notes outstanding, inclusive of paid-in-kind interest, totaling $16.1 million in accumulated principal. In connection with the initial issuance of these Senior Notes in December 2024, we also issued warrants to the institutional investor in the Notes (the "Investor") for 1,750,000 shares of our common stock (the "Original Warrants"). The Investor exercised the Original Warrants in full on June 30, 2025 and received 1,750,000 shares of our common stock in return.
Current report
As described above, on July 2, 2025, we entered into a Credit Agreement with the Lenders, including the Investor, for a senior secured term facility of up to $75 million and obtained $14.3 million principal amount of Initial Term Loans from the Lenders maturing on July 2, 2029, receiving proceeds, net of fees and expenses, of approximately $13.0 million. As consideration for the transaction under the Credit Agreement, we also issued warrants to the Lenders to purchase up to an aggregate of 5,418,292 shares of our common stock at an exercise price of $0.01 per share (together with the Amendment Warrants (defined below), collectively, the "New Warrants"). A total of 6,836,237 shares of common stock are issuable upon exercise of the New Warrants, subject to the terms of the New Warrants. The New Warrants are exercisable from time to time in accordance with their terms for either a cash payment equal to the exercise price or on a cashless exercise basis until or prior to 11:59 p.m., New York time, on July 2, 2035. Exercise of the New Warrants are subject to certain exercise caps that limit the number of shares of our common stock issuable under the New Warrants, in the aggregate, to less than 20% of our common stock outstanding on the date the New Warrants were issued, unless stockholder approval is otherwise obtained under applicable Nasdaq rules. We have filed definitive proxy materials for a special meeting of stockholders to be held during the third quarter of 2025 to seek such approval.
Current report
Under the Credit Agreement, subject to Company stockholder approval of the issuance of all of the shares of the Company's common stock issuable upon the full exercise of the New Warrants issued, we can obtain an additional $23.2 million principal amount of First Delayed Draw Term Loans from the Lenders under the Credit Agreement. We have filed definitive proxy materials for a special meeting of stockholders to be held during the third quarter of 2025 to seek such approval.
Current report
Also, under the Credit Agreement, assuming stockholder approval was obtained as described above, up to $37.5 million principal amount of Second Delayed Draw Term Loans may also be requested by the Company, subject to approval by the Lenders in their sole discretion.
Current report
Outstanding obligations under the Credit Agreement are secured by a first priority lien on substantially all tangible and intangible property of the Company and the guarantors and pledges of the equity of certain Company subsidiaries, in each case subject to certain exceptions, limitations and exclusions for the collateral.
Current report
In connection with the Credit Agreement, the Investor entered into a Subordination Agreement, dated July 2, 2025 (the “Subordination Agreement”). Pursuant to the Subordination Agreement, the Investor agreed to the subordination of all indebtedness owed by the Company to the Investor, including under the Senior Notes issued by the Company to the Investor on December 4, 2024, to the indebtedness and obligations owed under the Credit Agreement and the other applicable loan documents.
Current report
Also, in connection with the Credit Agreement and the Subordination Agreement, the Company and Investor entered into an Amended and Restated Promissory Note, dated July 2, 2025 (the “A&R Promissory Note”). The A&R Promissory Note amends and restates the original Senior Notes to remove the seniority terms of those notes, conform the original Senior Notes to the terms of the Credit Agreement and the Subordination Agreement, amend certain prepayment and make-whole terms under the original Senior Notes, delete certain covenants and event of default terms, reduce the interest rate under the original Senior Notes to 5% per annum paid in cash and 7% per annum paid in kind, and to delete the financial covenants set forth in the original Senior Notes. As a result of an amendment to the Purchase Agreement entered into on July 2, 2025 (the "Purchase Agreement Amendment"), among other things, the Investor agreed to release all liens and guarantees securing the obligations under the Senior Notes, the Purchase Agreement, and the A&R Promissory Note.
Current report
In consideration for the Investor's agreements under the A&R Promissory Note, the Subordination Agreement, and the Purchase Agreement Amendment, the Investor received 1,417,945 warrants with a term of 10 years, to purchase our common stock at an exercise price of $0.01 per share (the "Amendment Warrants").
Removed paragraphs (1)
Previous report
In order to conserve our existing cash, we have elected, pursuant to the Senior Notes, for interest payable under the Senior Notes to be added to the principal amount on the applicable interest payment dates of the last day of June and December of each year, and we anticipate that we will make similar elections in the future. However, we could elect to make such interest payments in cash instead depending on changes in our future financial position. The obligations under the Senior Notes are secured by a lien on our assets and the assets of our subsidiaries.
Reworded paragraphs (40)
Previous wording
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 original two modules-in-portrait ("2P") solar tracker system is marketed under the Voyager brand name (“Voyager”) and our one module-in-portrait ("1P") solar tracker system is marketed under the Pioneer brand name ("Pioneer"). We also have a mounting solution to support the installation and use of U.S.-manufactured thin-film modules. Our primary software offerings include SUNPATH, which helps customers optimize solar tracking for increased energy production, 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 tracker solutions 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.
Current wording
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 ("1P") solar tracker system is marketed under the Pioneer brand name ("Pioneer") and our original two modules-in-portrait ("2P") solar tracker system is marketed under the Voyager brand name (“Voyager”). We also have a mounting solution to support the installation and use of U.S.-manufactured thin-film modules. Our primary software offerings include SUNPATH, which helps customers optimize solar tracking for increased energy production, 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 tracker solutions 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.
Previous wording
Government Regulations. Changes in the U.S. trade environment, including the imposition of import tariffs, AD/CVD investigations and the 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. There continues to be some uncertainty in the market around 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 investment in Alpha Steel, as described further in Note 9, "Equity method investment" in Part I, Item 1 of this Form 10-Q. In 2019, 90% of our supply chain was sourced from China. As of March 31, 2025, 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 and China-wide anti-dumping duties are now nearly 240% and countervailing duties for all other countries are over 15%. Additionally, on December 29, 2023, Auxin and Concept Clean Energy, Inc. filed suit in the U.S. Court of International Trade challenging the legal basis for the moratorium and implementing regulations. Several motions have been filed to date, including a motion to dismiss by the U.S. government, which the court rejected. If the suit proves successful, solar module importers could owe retroactive duties on goods that have already cleared customs. In addition, the U.S. Department of Commerce is currently conducting an antidumping and countervailing duty investigation into imports of Crystalline Silicon Photovoltaic Cells from Vietnam, Malaysia, Thailand and Cambodia, which may result in additional duties imposed on imports from those nations.
Current wording
Government Regulations. Changes in the U.S. trade environment, including the imposition of import tariffs, AD/CVD investigations and the 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. There continues to be some uncertainty in the market around 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 investment in Alpha Steel, as described further in Note 9, "Equity method investment" in Part I, Item 1 of this Form 10-Q. In 2019, 90% of our supply chain was sourced from China. As of June 30, 2025, 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 and anti-dumping and countervailing duties on solar products linked to China are now well in excess of 200% for certain countries where Chinese firms have relocated production. Additionally, on December 29, 2023, Auxin and Concept Clean Energy, Inc. filed suit in the U.S. Court of International Trade challenging the legal basis for the moratorium and implementing regulations. Several motions have been filed to date, including a motion to dismiss by the U.S. government, which the court rejected. If the suit proves successful, solar module importers could owe retroactive duties on goods that have already cleared customs.
Previous wording
Effective April 5, 2025, the United States imposed a universal 10% tariff on most imports into the United States, excluding certain trade agreements. Since then, the United States also imposed a 145% tariff on goods imported from China, and China imposed a retaliatory 125% tariff on goods imported from the United States. As of the issuance of this Quarterly Report, matters involving tariffs continue to evolve and change, including in some cases, implementation of temporary pauses on certain announced tariffs as negotiations on final trade deals occur. Depending on the terms of our existing contracts with customers, we may not in all cases be able to fully recover the increased cost of tracker systems currently being manufactured for our customers by our international vendors due to higher tariffs currently in place, which has and may continue to impact our expected profitability under certain contracts.
Current wording
Effective April 5, 2025, the United States imposed a universal 10% tariff on most imports into the United States, excluding certain trade agreements. Tariff rates continue to change and fluctuate as negotiations continue between the United States and various countries. As an example, the United States previously imposed a 145% tariff on goods imported from China, and China imposed a retaliatory 125% tariff on goods imported from the United States. 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. Also, in May 2025, the Trump administration announced the doubling of steel and aluminum tariffs to 50%. New reciprocal tariffs have also been announced on selected countries that are well above the universal 10% tariff rate. As of the filing of this Quarterly Report, matters involving tariffs continue to evolve and change, including in some cases, implementation of temporary pauses on certain announced tariffs as negotiations on final trade deals occur. Depending on the terms of our existing contracts with customers, we may not in all cases be able to fully recover the increased cost for delivery of tracker systems currently being manufactured for our customers by our international vendors due to higher tariffs currently in place, which has and may continue to impact our expected profitability under certain contracts. Imposition of new or higher tariffs could also adversely affect the amount or timing of our future revenue, results of operations or cash flows.
Previous wording
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. The Inflation Reduction Act of 2022 ("IRA"), passed by the U.S. Congress and signed into law by then-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 are now 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 investment in, and commitments made to Alpha Steel allow us 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.
Current wording
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. The Inflation Reduction Act of 2022 ("IRA"), passed by the U.S. Congress and signed into law by then-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. U.S. manufacturers of specific solar components also became 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 investment in, and commitments made to Alpha Steel allow us 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.
Previous wording
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. Current market conditions and international conflicts that constrain the supply of materials and disrupt the flow of materials from international vendors can impact the cost of our products and services, along with overall rates of inflation in the global economy. While certain costs have moderated compared to pre-pandemic rates, domestic fuel prices continue 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.
Current wording
Disruptions in Transportation and Supply Chain. Our costs are affected by the costs of certain components and materials, such as steel, motors and microchips, as well as tariffs and transportation costs. Current market conditions and international conflicts that constrain the supply of materials and disrupt the flow of materials from international vendors can impact the cost of our products and services, along with overall rates of inflation in the global economy and currently imposed tariff rates. We do not believe inflation has had a material impact on our results as presented in this report. However, such cost increases and decreases could impact our future operating margins, if material.
Previous wording
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 due to declining costs in the container market starting in 2022, but container shipping rates have since increased. 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. We also intend to maintain our focus on our design-to-value initiative to continue to improve margins by reducing the manufacturing and material costs of our products.
Current wording
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. 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. We also intend to maintain our focus on our design-to-value initiative to continue to improve margins by reducing the manufacturing and material costs of our products.
Previous wording
Megawatts ("MW") Produced and MW Shipped and Average Selling Price ("ASP"). The primary operating metrics we use to evaluate our sales performance and to track market acceptance of our products are the change in quantity of MW produced and MW shipped from period to period. MW are measured for each individual project and are calculated based on the expected output of that project once installed and fully operational. We also utilize metrics related to price and cost of goods sold per watt, including the change in ASP from period to period and cost per watt. ASP is calculated by dividing product and service revenue by total watts produced or shipped and product and service cost per watt is calculated by dividing product or service costs of revenue by total watts produced or shipped. These metrics enable us to evaluate trends in pricing, manufacturing and logistics costs and profitability. Events such as the COVID-19 pandemic, global inflation rates, high interest rates and international conflicts have in the past impacted and may continue to impact the U.S. economy, global supply chains, and our business. These impacts can cause significant project development and shipping delays and cost increases, as well as offsetting ASP increases, and also raise the price of inputs like steel and logistics, affecting our cost per watt. Competitive tracker pricing pressures can also impact our ASP, and thus our profitability, by limiting our ability to raise prices to offset cost increases.
Current wording
Megawatts ("MW") Produced and MW Shipped and Average Selling Price ("ASP"). The primary operating metrics we use to evaluate our sales performance and to track market acceptance of our products are the change in quantity of MW produced and MW shipped from period to period. MW are measured for each individual project and are calculated based on the expected output of that project once installed and fully operational. We also utilize metrics related to price and cost of goods sold per watt, including the change in ASP from period to period and cost per watt. ASP is calculated by dividing product and service revenue by total watts produced or shipped and product and service cost per watt is calculated by dividing product or service costs of revenue by total watts produced or shipped. These metrics enable us to evaluate trends in pricing, manufacturing and logistics costs and profitability. Events such as the COVID-19 pandemic, global inflation rates, tariffs, high interest rates and international conflicts have in the past impacted and may continue to impact the U.S. economy, global supply chains, and our business. These impacts can cause significant project development and shipping delays and cost increases, as well as offsetting ASP increases, and also raise the price of inputs like steel and logistics, affecting our cost per watt. Competitive tracker pricing pressures can also impact our ASP, and thus our profitability, by limiting our ability to raise prices to offset cost increases.
Previous wording
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, in August 2023, we introduced SUNOPS, a cloud-based solar asset monitoring solution, allowing asset owners and managers to evaluate the operation and performance of their solar deployments. Additionally, in May 2024, we announced the launch of our Automated Hail Stow Solution, aimed at minimizing solar panel damage caused by hailstorms. This solution integrates advanced technology with meteorological data to automatically adjust the positioning of solar panels, reducing the risk of hail-related damage.
Current wording
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, in August 2023, we introduced SUNOPS, a cloud-based solar asset monitoring solution, allowing asset owners and managers to evaluate the operation and performance of their solar deployments. Additionally, in May 2024, we announced the launch of our Automated Hail Stow Solution, aimed at minimizing solar panel damage caused by hailstorms. This solution integrates advanced technology with meteorological data to automatically adjust the positioning of solar panels, reducing the risk of hail-related damage. And, in April 2025, we unveiled dual-row configuration for our Pioneer tracker that allows for higher East-West slope tolerance, increased power density and installation on more challenging terrains while minimizing site preparation expense and environmental impact.
Previous wording
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 2025 Short-Term Energy Outlook, estimates that solar generation, as a result of capacity additions, will increase in the United States by 34% in 2025 and 17% in 2026 and will supply most of the increase in electrical generation during those years.
Current wording
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 July 2025 Short-Term Energy Outlook, estimates that solar generation of electricity this summer will increase in the United States by 34% from last summer and by summer 2026, will grow another 19% and surpass wind to become the leading source of renewables generation during the summer months of June through September.
Previous wording
We subcontract with third-party manufacturers to manufacture and deliver our products directly to our customers. Our product costs are affected by the underlying cost of raw materials procured by these contract manufacturers, 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.
Current wording
We subcontract with third-party manufacturers to manufacture and deliver our products directly to our customers. Our product costs are affected by the underlying cost of raw materials procured by these contract manufacturers, 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 for personnel, are not directly affected by sales volume.
Previous wording
The increase in product revenue for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, was primarily due to an increase of 147% in the amount of MW produced as activity has been positively impacted by recent project wins. This was partially offset by a decrease of 32% in ASP for the three months ended March 31, 2025, as a result of project mix changes as compared to the three months ended March 31, 2024.
Current wording
The increase in product revenue for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, was primarily due to an increase of 147% in the amount of MW produced as activity has been positively impacted by recent project wins mainly associated with our 1P solar tracker solution. This was partially offset by a decrease of 27% in ASP for the three months ended June 30, 2025, resulting from project mix changes as compared to the three months ended June 30, 2024.
Previous wording
Cost of revenue consists primarily of costs related to raw materials, equipment manufacturing activities, net of incentives earned, freight and delivery, product warranty, remediation and personnel costs (salaries, bonuses, benefits, and stock-based compensation). Personnel costs in cost of revenue include both direct labor costs, as well as costs attributable to any individuals whose activities relate to the procurement, installment and delivery of the finished product and services.
Current wording
Cost of revenue consists primarily of costs related to raw materials, equipment manufacturing activities, net of incentives earned, freight and delivery, tariffs, product warranty, remediation and personnel costs (salaries, bonuses, benefits, and stock-based compensation). Personnel costs in cost of revenue include both direct labor costs, as well as costs attributable to any individuals whose activities relate to the procurement, installment and delivery of the finished product and services.
Previous wording
Gross profit may vary from period-to-period and is primarily affected by our ASP, product costs, timing of tracker production and delivery, customer mix, geographical mix, shipping method, logistics costs, warranty costs, indirect cost control efforts and seasonality.
Current wording
Gross loss may vary from period-to-period and is primarily affected by our ASP, product costs, timing of tracker production and delivery, customer mix, geographical mix, shipping method, logistics costs, warranty costs, indirect cost control efforts and seasonality.
Previous wording
The increase in cost of revenue for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, was primarily driven by (i) an increase of 147% in MW produced and (ii) an increase of 103% in logistics activity levels.
Current wording
The increase in cost of revenue for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, was primarily driven by (i) an increase of 147% in MW produced, (ii) additional costs associated with tariffs and specified minimum purchase commitments with Alpha Steel, a related party, and (iii) an increase of 35% in logistics activity levels. Costs associated with these increases in activity levels were partially offset by lower personnel costs from headcount reductions and lower warranty and remediation expenses.
Previous wording
Our gross margin percentage of revenue for the three months ended March 31, 2025 was a negative 16.6%, which was relatively flat compared to a negative 16.7% for the three months ended March 31, 2024.
Current wording
Our gross margin percentage of revenue for the three months ended June 30, 2025 was a negative 19.6%, a slight improvement compared to a negative 20.5% for the three months ended June 30, 2024.
Previous wording
The decrease in general and administrative expenses for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, was primarily attributable to (i) lower stock-based compensation totaling $1.3 million, largely associated with certain executive award forfeitures during the three months ended March 31, 2025, (ii) lower professional service costs of $0.5 million, (iii) lower insurance costs of $0.2 million, and (iv) lower intangible asset amortization expense of $0.1 million as such assets became fully amortized as of December 31, 2024. This was partially offset by higher payroll costs of $0.6 million. General and administrative expenses as a percentage of revenue were 24.3% for the three months ended March 31, 2025, compared to 52.2% for the three months ended March 31, 2024, largely due to the lower level of revenue.
Current wording
The decrease in general and administrative expenses for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, was primarily attributable to (i) lower professional service costs of $0.3 million, (ii) lower stock-based compensation totaling $0.2 million, (iii) lower insurance costs of $0.2 million, (iv) lower intangible asset amortization expense of $0.1 million as such assets became fully amortized as of December 31, 2024, and (v) lower payroll and travel expenses. General and administrative expenses as a percentage of revenue were 25.8% for the three months ended June 30, 2025, compared to 52.6% for the three months ended June 30, 2024. The decrease in the percentage was largely attributable to the increased level of revenue during the three months ended June 30, 2025.
Previous wording
The increase in service revenue for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, primarily resulted from an increase of 103% in logistics activity levels. This was partially offset by (i) a decrease of 24% in ASP as compared to the three months ended March 31, 2024 as a result of project size and pricing and (ii) lower engineering consulting and software revenues.
Current wording
The increase in service revenue for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, primarily resulted from (i) an increase of 62% in logistics activity levels and (ii) higher engineering consulting revenue associated with new project activity during the six months ended June 30, 2025. This was partially offset by a decrease of 4% in ASP as compared to the six months ended June 30, 2024 as a result of project size and pricing.
Previous wording
We had negative gross margin for the three months ended March 31, 2025 as revenue levels were not sufficient to cover certain overhead costs, and due to the impact of increased tariffs and freight costs.
Current wording
We had negative gross margin for the six months ended June 30, 2025 as revenue levels were not sufficient to cover certain overhead costs, including additional costs associated with specified minimum purchase commitments referred to above and due to the impact of increased tariffs and freight costs.
Previous wording
We had negative gross margin for the three months ended March 31, 2024 as production volumes were not sufficient to cover certain overhead costs and our service revenue was not sufficient to fully cover our related shipping, transportation and warehousing costs.
Current wording
We had negative gross margin for the six months ended June 30, 2024 as (i) production volumes were not sufficient to cover certain overhead costs and (ii) our service revenue was not sufficient to fully cover our warehousing and certain other costs.
Previous wording
The decrease in research and development expenses for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, was primarily attributable to (i) lower payroll costs of $0.3 million, (ii) lower spending on lab and other research activities of $0.1 million, and (iii) lower professional service costs of $0.1 million resulting from cost reduction initiatives. Research and development expenses as a percentage of revenue were 4.4% for the three months ended March 31, 2025, as compared to 11.4% for the three months ended March 31, 2024.
Current wording
The decrease in research and development expenses for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, was primarily attributable to (i) lower payroll costs of 0.5 million, (ii) lower spending on lab and other research activities of $0.2 million, and (iii) lower professional service costs of $0.2 million resulting from cost reduction initiatives. Research and development expenses as a percentage of revenue were 5.0% for the six months ended June 30, 2025, as compared to 12.4% for the six months ended June 30, 2024.
Previous wording
The decrease in selling and marketing expenses for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, was primarily attributable to (i) lower provisions for credit losses of $0.8 million, mainly related to charges associated with specific individual customer accounts during 2024, and (ii) lower payroll costs of $0.3 million. Lower travel and professional service costs accounted for the remaining decrease. Selling and marketing costs as a percentage of revenue were 5.5% for the three months ended March 31, 2025, compared to 19.0% for the three months ended March 31, 2024.
Current wording
The decrease in selling and marketing expenses for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, was primarily attributable to (i) lower payroll costs of $0.9 million, (ii) lower provisions for credit losses of $0.4 million, mainly related to charges associated with specific individual customer accounts during 2024, and (iii) lower travel, marketing and professional service costs of $0.5 million accounted for much of the remaining decrease. Selling and marketing costs as a percentage of revenue were 5.9% for the six months ended June 30, 2025, compared to 18.4% for the six months ended June 30, 2024.
Previous wording
During the three months ended March 31, 2025 and 2024, we received earnout payments of $3.2 million and $4.1 million, respectively, that were recognized in accordance with our policy election of recording such gains when realized.
Current wording
During the six months ended June 30, 2025 and 2024, we received earnout payments of $3.2 million and $4.1 million, respectively, that were recognized in accordance with our policy election of recording such gains when realized.
Previous wording
The Warrants issued in connection with the Offering described further in Note 12, "Debt" in our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report, have been classified as a long-term liability. Due largely to a significant decrease in the price of our common stock during the three months ended March 31, 2025, the fair value of the Warrants decreased from $9.5 million at December 31, 2024 to $4.9 million at March 31, 2025, resulting in recognition of a non-cash gain for the decrease in value during the three months ended March 31, 2025.
Current wording
The Original Warrants issued in connection with the Offering described further in Note 12, "Debt" in our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report, were classified as a long-term liability. Due largely to a decrease in the price of our common stock during the six months ended June 30, 2025, the fair value of the Original Warrants decreased from $9.5 million at December 31, 2024 to approximately $7.8 million when they were exercised in full on June 30, 2025, resulting in recognition of a non-cash gain for the decrease in value during the six months ended June 30, 2025.
Previous wording
Since our inception, we have financed our operations primarily through sales of shares of common stock, including our IPO in April 2021, issuance of debt and payments from our customers and others. Our ability to generate positive cash flow from operations is dependent on our level of production, contract payment terms, timely collections from our customers and the strength of our gross margins.
Current wording
Since our inception, we have financed our operations primarily through sales of shares of common stock, issuance of debt and payments from our customers and others. Our ability to generate positive cash flow from operations is dependent on our level of production, contract payment terms, timely collections from our customers and the strength of our gross margins.
Previous wording
We have incurred cumulative losses since inception and have a history of cash outflows from operations, inclusive of $8.5 million in cash utilized in our operating activities during the three months ended March 31, 2025. As of March 31, 2025, we had $5.9 million of cash on hand and $20.2 million of working capital.
Current wording
We have incurred cumulative losses since inception and have a history of cash outflows from operations, inclusive of $10.8 million in cash utilized in our operating activities during the six months ended June 30, 2025. As of June 30, 2025, we had cash on hand of $3.5 million and $9.7 million of working capital.
Previous wording
As of March 31, 2025, in addition to our cash on hand and working capital, we had approximately $64.9 million of remaining capacity available for future sales of our common stock under our ATM program as defined and described further in Note 14, "ATM Program" below. 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 there can be no assurance regarding the price at which we will be able to sell such shares, and any sales of our common stock under the ATM program may be at prices that result in additional dilution to our existing stockholders.
Current wording
As of June 30, 2025, in addition to our cash on hand and working capital, we had nearly $13.8 million of capacity available for future sales of our common stock under our ATM program as defined and described further in Note 14, "ATM Program" in Part I, Item 1 of this Quarterly Report. There can be no assurance regarding the price at which we will be able to sell such shares, and any sales of our common stock under the ATM program may be at prices that result in additional dilution to our existing stockholders.
Previous wording
Based on our cash position at March 31, 2025 and our recent operating losses, we have concluded that substantial doubt exists as to our ability to continue as a going concern within the next year.
Current wording
Based on our cash position at June 30, 2025, including consideration of the $13.0 million of net proceeds from the initial funding received on July 2, 2025 under the Credit Agreement, and in view of our recent operating losses and due to the availability of additional financing provided by the Credit Agreement following the Closing Date in the form of the First Delayed Draw Term Loans and Second Delayed Draw Term Loans not being completely within our control, we have concluded that substantial doubt exists as to our ability to continue as a going concern within the next year.
Previous wording
At March 31, 2025, we had a contractual obligation that could require us to make additional capital contributions of up to $0.8 million to Alpha Steel, as well as make a minimum level of purchases from Alpha Steel, as described further in Note 9, "Equity method investment" below. In the event we were to fail to meet our minimum required purchase commitments during a specified period, including the current period from January 1, 2024 to June 30, 2025, we may be required to make a cash payment for the net profit attributable to any unfilled requirements, calculated as specified in the agreement, in an amount not to exceed $4.0 million in the aggregate.
Current wording
We also have a contractual obligation that could require us to make additional capital contributions of up to $0.8 million to Alpha Steel, as well as make a minimum level of purchases from Alpha Steel, as described further in Note 9, "Equity method investment" in Part I, Item 1 of this Quarterly Report. In the event we were to fail to meet our minimum required purchase commitments during a specified period, including the period from July 1, 2025 to June 30, 2026, we may be required to make a cash payment for the net profit attributable to any unfilled requirements, calculated as specified in the agreement, in an amount not to exceed $4.0 million in the aggregate.
Previous wording
Our ability to meet our liquidity needs over the next year is dependent upon (i) our cash on hand (subject to a quarter-end minimum balance covenant of $5 million under the terms of our Senior Notes offering), (ii) our expectations of increased project activity and cash flow during the twelve-month period following issuance of these Condensed Consolidated Financial Statements, (iii) expected proceeds of up to $10 million from an additional private placement of debt based on a term sheet executed on March 4, 2025, as described further below, and (iv) utilization, as appropriate, of the capacity available for future sales of our common stock under the ATM program, which may be constrained by the size of our non-affiliate market capitalization, our trading volume and other factors. In addition, we continue to remain focused on implementing additional cost savings steps, which could impact, among other things, location of our headcount and the level of services currently provided by third parties, and we continue to evaluate further opportunities to obtain additional financing, although the ability to ultimately obtain such additional financing is not entirely within our control.
Current wording
Our ability to meet our liquidity needs over the next year is dependent upon (i) our cash on hand (subject to a $20.0 million minimum unrestricted cash covenant under the Credit Agreement effective for the quarter ended September 30, 2025 (such minimum cash covenant and the other financial covenants under the Credit Agreement as described further in Note 19, "Subsequent events" in Part I, Item 1 of this Quarterly Report)), (ii) our expectations of increased project activity and cash flow during the twelve-month period following issuance of these Condensed Consolidated Financial Statements, (iii) the availability of expected additional proceeds in the form of First Delayed Draw Term Loans under the Credit Agreement during September 2025, the funding of which is subject to Company stockholder approval of the issuance of all of the shares of the Company's common stock issuable upon the full exercise of the warrants issued, and the potential availability of the Second Delayed Draw Term Loans that may be requested by the Company and approved by the Lenders in their sole discretion, and (iv) utilization, as appropriate, of the capacity available for future sales of our common stock under the ATM program, which is currently constrained to a degree by the size of our non-affiliate market capitalization, our trading volume and other factors. In addition, we continue to remain focused on implementing additional cost savings steps, which could impact, among other things, the location of our headcount and the level of services currently provided by third parties.
Previous wording
During the three months ended March 31, 2025, we used approximately $8.4 million of cash to fund a portion of our current period expenditures for personnel and facilities, legal and professional fees, insurance, research and development and various other operating activities. This compares to approximately $8.1 million of cash used during the three months ended March 31, 2024, also to fund a portion of our prior period expenditures for various operating activities as described above.
Current wording
During the six months ended June 30, 2025, we used approximately $13.4 million of cash to fund a portion of our current period expenditures for personnel and facilities, legal and professional fees, insurance, research and development and various other operating activities. This compares to approximately $17.1 million of cash used during the six months ended June 30, 2024, also to fund a portion of our prior period expenditures for various operating activities as described above.
Previous wording
During the three months ended March 31, 2024, we used approximately $3.8 million of cash for working capital and other increases as a result of production activity and the timing of customer receipts and vendor payments.
Current wording
During the six months ended June 30, 2025 and 2024, we generated approximately $2.7 million and $1.5 million of cash, respectively, primarily from working capital reductions, including timing of customer receipts and vendor payments.
Previous wording
Our working capital decreased by approximately $6.9 million from almost $27.1 million at December 31, 2024 to $20.2 million at March 31, 2025. The decrease was largely attributable to (i) the use of cash to fund current period expenditures as described above and (ii) the impact of higher activity levels on the amount of billed and unbilled accounts receivable during the three months ended March 31, 2025.
Current wording
Our working capital decreased by approximately $17.4 million from almost $27.1 million at December 31, 2024 to $9.7 million at June 30, 2025. The decrease was largely attributable to (i) the use of cash to fund current period expenditures as described above and (ii) the impact of higher activity levels on various components of working capital during the six months ended June 30, 2025.
Previous wording
During the three months ended March 31, 2025, we received $3.2 million of contingent earnout payments in connection with the June 2021 sale of our equity interest in Dimension. We also had capital expenditures of approximately $0.1 million, primarily for tooling.
Current wording
During the six months ended June 30, 2025, we received a $3.2 million contingent earnout payment in connection with the June 2021 sale of our equity interest in Dimension, as well as a small earnout payment from the sale of our Atlas software platform in 2024. We also had capital expenditures of approximately $0.3 million, primarily for tooling.
Previous wording
During the three months ended March 31, 2024, we received $4.1 million of contingent earnout payments from Dimension. We also made an additional equity investment of $1.0 million in Alpha Steel and spent nearly $0.4 million, mainly for tooling and new computer and IT equipment.
Current wording
During the six months ended June 30, 2024, we received $4.1 million of contingent earnout payments from Dimension. We also made an additional equity investment of $1.8 million in Alpha Steel and spent nearly $1.1 million, mainly for tooling and new computer and IT equipment.
Previous wording
During the three months ended March 31, 2025, we received a minimal amount of proceeds from employee exercises of stock options. No options were exercised during the three months ended March 31, 2024.
Current wording
During the six months ended June 30, 2025 and 2024, we received a minimal amount of proceeds from employee exercises of stock options during each period.
Previous wording
Adjustments to the allowance are largely dependent on historical experience involving amounts previously collected from our customers in recent years or based on specific changes in a customer's ability to pay. As an example, during the three months ended March 31, 2025, we recognized a reduction of $0.1 million in our allowance for credit losses compared to an additional credit loss provision of $0.7 million during the three months ended March 31, 2024, with the change primarily related to our assessment in 2024 as to a specific customer's inability to fully pay amounts owed. Historical experience, when used in making such adjustments, may not reflect current actual experience.
Current wording
Adjustments to the allowance are largely dependent on historical experience involving amounts previously collected from our customers in recent years or based on specific changes in a customer's ability to pay. As an example, during the six months ended June 30, 2025, we recognized additional credit loss provisions of $0.2 million compared to $0.6 million recognized during the six months ended
Previous wording
Our use of the simplified method for estimating the expected outstanding term of our options may differ significantly from future actual exercise patterns of our option holders. Estimates of the outstanding term of our options that are less than the actual exercise patterns of our option holders, may result in lower recognized expense. Alternatively, our recognized expense may be higher if our option holders exercise their options sooner than our estimates project.
Current wording
Our use of the simplified method for estimating the expected outstanding term of our options may differ significantly from future actual exercise patterns of our option holders. Estimates of the outstanding terms of our options, which are less than the actual exercise patterns of our option holders, may result in lower recognized expense. Alternatively, our recognized expense may be higher if our option holders exercise their options sooner than our estimates project.
Previous wording
We did not identify any impairments of our long-lived assets or goodwill during the three months ended March 31, 2025 and 2024.
Current wording
We did not identify any impairments of our long-lived assets or goodwill during the six months ended June 30, 2025 and 2024.
Previous wording
We utilize Adjusted EBITDA, Adjusted Net Loss, and Adjusted EPS as supplemental measures of our performance. We define Adjusted EBITDA as net loss plus (i) provision for (benefit from) income taxes, (ii) interest expense, less interest income, (iii) depreciation expense, (iv) amortization of intangibles, (v) stock-based compensation, and (vi) Chief Executive Officer ("CEO") transition costs, non-routine legal fees, costs associated with our Reverse Stock Split, severance and certain other costs (credits). We also deduct the contingent gains arising from earnout payments and project escrow releases relating to the disposal of our investment in an unconsolidated subsidiary and gains from changes in fair value of our warrant liability from net loss in arriving at Adjusted EBITDA. We define Adjusted Net Loss as net loss plus (i) amortization of debt issue costs and intangibles, (ii) stock-based compensation, (iii) CEO transition costs, non-routine legal fees, costs associated with our Reverse Stock Split, severance and certain other costs (credits), and (iv) the income tax expense (benefit) of those adjustments, if any. We also deduct the contingent gains arising from earnout payments and project escrow releases relating to the disposal of our investment in an unconsolidated subsidiary and gains from changes in fair value of our warrant liability in arriving at Adjusted Net Loss. Adjusted EPS is defined as Adjusted Net Loss on a per share basis using our weighted average diluted shares outstanding.
Current wording
We utilize Adjusted EBITDA, Adjusted Net Loss, and Adjusted EPS as supplemental measures of our performance. We define Adjusted EBITDA as net loss plus (i) provision for (benefit from) income taxes, (ii) interest expense, less interest income, (iii) depreciation expense, (iv) amortization of intangibles, (v) stock-based compensation, (vi) loss from changes in the fair value of our warrant liability, and (vii) Chief Executive Officer ("CEO") transition costs, non-routine legal fees, costs associated with our Reverse Stock Split, severance and certain other costs (credits). We also deduct the contingent gains arising from earnout payments and project escrow releases relating to the disposal of our investment in an unconsolidated subsidiary and gains from changes in fair value of our warrant liability from net loss in arriving at Adjusted EBITDA. We define Adjusted Net Loss as net loss plus (i) amortization of debt discount and issue costs and intangibles, (ii) stock-based compensation, (iii) loss from changes in the fair value of our warrant liability, (iv) CEO transition costs, non-routine legal fees, costs associated with our Reverse Stock Split, severance and certain other costs (credits), and (v) the income tax expense (benefit) of those adjustments, if any. We also deduct the contingent gains arising from earnout payments and project escrow releases relating to the disposal of our investment in an unconsolidated subsidiary and gains from changes in fair value of our warrant liability in arriving at Adjusted Net Loss. Adjusted EPS is defined as Adjusted Net Loss on a per share basis using our weighted average diluted shares outstanding.
Previous wording
Because of these limitations, Adjusted EBITDA, Adjusted Net Loss, and Adjusted EPS should not be considered in isolation or as substitutes for performance measures calculated in accordance with U.S. GAAP, and you should not rely on any single financial measure to evaluate our business. These non-GAAP financial measures, when presented, are reconciled to the most closely applicable U.S. GAAP measure as disclosed below:
Current wording
Because of these limitations, Adjusted EBITDA, Adjusted Net Loss, and Adjusted EPS should not be considered in isolation or as substitutes for performance measures calculated in accordance with U.S. GAAP, and you should not rely on any single financial measure to evaluate our business. These non-GAAP financial measures, when presented, are reconciled to the most closely applicable U.S. GAAP measure as disclosed below for the three and six months ended June 30, 2025 and 2024:
Rearranged current paragraphs (9)
Current report — wording carried from elsewhere
The decrease in research and development expenses for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, was primarily attributable to (i) lower payroll costs of $0.2 million, and (ii) lower professional service costs of $0.1 million resulting from cost reduction initiatives. Research and development expenses as a percentage of revenue were 5.6% for the three months ended June 30, 2025, as compared to 13.4% for the three months ended June 30, 2024.
Current report — wording carried from elsewhere
Loss from change in fair value of warrant liability
Current report — wording carried from elsewhere
The Original Warrants (as defined below under "Outstanding debt and warrants") issued in connection with the Offering described further in Note 12, "Debt" in our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report, were classified as a long-term liability. Due largely to an increase in the price of our common stock during the three months ended June 30, 2025, the fair value of the Original Warrants increased from $4.9 million at March 31, 2025 to approximately $7.8 million when they were exercised in full on June 30, 2025, resulting in recognition of a non-cash loss for the increase in value during the three months ended June 30, 2025.
Current report — wording carried from elsewhere
The increase in product revenue for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, was primarily due to an increase of 147% in the amount of MW produced as activity has been positively impacted by recent project wins mainly associated with our 1P solar tracker solution. This impact has been partially offset by a decrease of 30% in ASP for the six months ended June 30, 2025, as a result of project mix changes as compared to the six months ended June 30, 2024.
Current report — wording carried from elsewhere
Cost of revenue and gross loss
Current report — wording carried from elsewhere
The decrease in general and administrative expenses for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, was primarily attributable to (i) lower stock-based compensation totaling $1.6 million, largely associated with certain executive award forfeitures during the six months ended June 30, 2025, (ii) lower professional service costs of $0.8 million resulting from our cost reduction initiatives, (iii) lower insurance costs of $0.4 million, and (iv) lower intangible asset amortization expense of $0.3 million as such assets became fully amortized as of December 31, 2024. This was partially offset by higher payroll costs of $0.6 million largely due to higher executive bonus expense. General and administrative expenses as a percentage of revenue were 25.0% for the six months ended June 30, 2025, compared to 52.4% for the six months ended June 30, 2024. The decrease in the percentage was largely attributable to the increased level of revenue during the six months ended June 30, 2025.
Current report — wording carried from elsewhere
Interest expense incurred during the six months ended June 30, 2025 was primarily related to paid-in-kind interest added to the principal amount of our Senior Notes, as well as amortization of the discount and deferred loan costs on the Senior Notes. Interest expense during the six months ended June 30, 2024, primarily consisted of letter of credit and commitment fees on our Credit Facility that expired unused in April 2024, along with associated debt issue cost amortization.
Current report — wording carried from elsewhere
The losses from unconsolidated subsidiary for the six months ended June 30, 2025 and 2024 represent our share of the net operating losses incurred by Alpha Steel during each period.
Current report — wording carried from elsewhere
June 30, 2024, with the change primarily related to our assessments in both 2025 and 2024 as to the ability by certain specific customers to fully pay contractual amounts owed us. Historical experience, when used in making such adjustments, may not reflect current actual experience.