FTC Solar, Inc.

Current report

We have incurred cumulative losses since inception and have a history of cash outflows from operations, inclusive of $33.4 million in cash utilized for our operating activities during the year ended December 31, 2025. As of June 30, 2026, we had unrestricted cash on hand of $10.1 million, a working capital deficit of $7.9 million and stockholders' deficit of $30.3 million.

Current report

Given these and other factors, including financial covenant requirements and principal repayment obligations in our Credit Agreement, as further discussed in Note 2, "Summary of significant accounting policies" in our Condensed Consolidated Financial Statements included in in Part I, Item 1 of this Quarterly Report, there is substantial doubt about our ability to continue as a going concern during the next year.

Current report

On March 23, 2026, we entered into the Second Amendment pursuant to which the Lenders: (i) provided a waiver relating to our breach of the purchase order covenant in our Credit Agreement for the fiscal quarter ended December 31, 2025; (ii) agreed that a purchase order covenant will not apply to us until the fiscal quarter ending March 31, 2027; and (iii) agreed to further amend certain other existing financial covenants under the Credit Agreement, including (a) a required minimum unrestricted cash covenant of $10.0 million as of September 30, 2026 and a minimum revenue covenant of $50.0 million for the quarter ended September 30, 2026. Additionally, in connection with the Second Amendment, we agreed to repay a portion of the principal amount outstanding under the Credit Agreement as follows: (x) $2.5 million of principal was repaid on March 23, 2026; (y) $2.5 million of principal was repaid on May 22, 2026; and (z) $5.0 million of principal will be repaid on September 30, 2026.

Current report

Our unrestricted cash on hand at June 30, 2026 was $10.1 million. As a result, we were not in compliance with the required minimum unrestricted cash covenant of $15.0 million pursuant to the Second Amendment as of June 30, 2026. We were also not in compliance with a required minimum direct tracker margin covenant for the three months ended June 30, 2026. Accordingly, as of June 30, 2026, as the Lenders were able to call the debt for repayment in accordance with the terms of the Credit Agreement.

Current report

On August 4, 2026, we entered into a Limited Waiver and Limited Consent to Credit Agreement (the “Waiver”) with the Lenders in which the Lenders waived our noncompliance with the minimum unrestricted cash and minimum direct tracker margin covenants as described above. The Waiver covers the periods of noncompliance but does not cover our ability to comply with covenants in future periods. As a result of factors that are outside of our control in terms of timing of customer project activity and resulting revenue and cash flows, there is currently uncertainty as to our ability to fully meet all existing quarterly and annual financial covenants during the twelve-month period following the date of the consolidated financial statements included in our most recent Quarterly Report on Form 10-Q. Accordingly, we have classified all outstanding debt under our Credit Agreement as a current obligation as of June 30, 2026.

Current report

Given these and other factors, including financial covenant requirements and principal repayment obligations in our Credit Agreement, as further discussed in the consolidated financial statements included in our Annual and Quarterly Reports incorporated herein by reference, there is substantial doubt about our ability to continue as a going concern during the next year.

Current report

Our ability to meet our liquidity needs over the next year is dependent upon (i) our cash on hand (subject to (x) a required principal repayment of $5.0 million during September 2026 under the Credit Agreement and (y) a $15.0 million minimum unrestricted cash covenant under the Credit Agreement effective for the quarter ending June 30, 2026 and as further reduced by required principal repayments under the Credit Agreement thereafter) and our compliance with the financial covenants under the Credit Agreement, (ii) our current expectations of increased project activity and cash flow during the twelve-month period following issuance of our consolidated financial statements, (iii) the availability of additional proceeds in the form of Second Delayed Draw Term Loans that may be requested by the Company and approved by the Lenders in their sole discretion, (iv) utilization, as appropriate, of the capacity available for future sales of our common stock under the ATM program, and (v) if we determine necessary, our ability to raise additional capital through other securities offerings. 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.

Current report

Additional information relating to our outstanding debt may be found under "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Liquidity and going concern."

Current report

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

Current report

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

Current report

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

Current report

If we are not able to secure adequate additional funding when needed or do not generate sufficient cash from operations, we will need to reevaluate our operating plan and may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, or suspend or curtail planned programs. These actions could materially impact our business, results of operations and future prospects. There can be no assurance that in the event we require additional financing, such financing will be available on terms that are favorable to us, or at all. Failure to generate sufficient cash from operations, raise additional capital, win new and retain current customers and vendors, or reduce certain discretionary spending would have a material adverse effect on our ability to achieve our intended business objectives.

Current report

For further discussion, see "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Liquidity and going concern" and Note 11, "Debt" in our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report.

Current report

As described further in Note 11, "Debt" in Part I, Item 1 of this Quarterly Report, as of June 30, 2026, the Company was not in compliance with the required minimum unrestricted cash and direct tracker margin financial covenants under the Credit Agreement. On August 4, 2026, we entered into the Waiver with the Lenders in which the Lenders waived our noncompliance with these minimum unrestricted cash and minimum direct tracker margin covenants.

Current report

At June 30, 2026, the outstanding principal balance of our Term Loans and the A&R Promissory Note totaled approximately $52.1 million, including accrued paid-in-kind interest to date. As a result of factors that are outside of our control in terms of timing of customer project activity and resulting revenue and cash flows, there is currently uncertainty as to our ability to fully meet all existing quarterly and annual financial covenants during the twelve-month period following the date of the consolidated financial statements included herein. Accordingly, the outstanding Term Loan and A&R Promissory principal, plus accrued paid-in-kind interest, related unamortized discount and debt issue costs and any applicable Exit Fee, have been classified as a current obligation at June 30, 2026.

Previous report

Not applicable.

Current report — wording carried from elsewhere

We have a history of losses that may continue in the future, and we were not in compliance with the required minimum unrestricted cash and direct tracker margin financial covenants pursuant to the Second Amendment to our Credit Agreement as of June 30, 2026. As a result, we have determined there is substantial doubt about our ability to continue as a going concern. The demand for our products and related revenue depends on many factors beyond our control; we may not achieve profitability or generate positive cash flow; and we may not be able to obtain additional debt or equity financing on terms favorable to us.