FTC Solar (FTCI) risk factors, FY2024 10-K

Risks Related to Our Business and Our Industry

1. 01We also executed a term sheet with the Investor on March 4, 2025, in which the Investor agreed to purchase up to an additional $10.0 million in principal amount of senior secured promissory notes and warrants to purchase up to 1,166,667 shares of our common stock
2. 02Our dependence on a limited number of customers, the payment terms we agree to with such customers and the expected timing of customer project development activity may impair our ability to operate profitably
3. 03The market for our products and services is highly competitive and rapidly evolving and we expect to face increased competition
4. 04changes in corporate sustainability goals, among other factors
5. 05our ability to develop and maintain successful relationships with our customers and contract manufacturers
6. 06Our success in providing panel agnostic versions of our solar tracker systems will depend in part upon our ability to continue to work closely with leading solar panel manufacturers
7. 07timing of orders for our products. We have expanded into areas with traditionally warmer climates which has resulted in less pronounced seasonal variations in our revenue profile, and we expect this trend to continue as we continue to expand into such areas
8. 08We plan to continue expanding into additional international markets, which will expose us to additional regulatory, economic, political, reputational and competitive risks
9. 09political or social unrest, military conflict or economic instability in a specific country or region in which we operate
10. 10We may invest in or acquire other companies or technologies, which could divert our management’s attention, result in dilution to our stockholders, reduce our available cash that could be used for other purposes and otherwise disrupt our operations and harm our results of operations
11. 11litigation or other claims in connection with the acquisition, including claims from terminated employees, customers, former stockholders or other third parties
12. 12Defects or quality or performance problems in our products could result in loss of customers, reputational damage and decreased revenue, and we may face warranty, indemnity and product liability claims arising from defective products
13. 13If we fail to retain key personnel or if we fail to attract additional qualified personnel, we may not be able to achieve our anticipated level of growth, and our business could suffer

Risks Related to Government Regulations and Legal Compliance

1. 14The 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
2. 15The concentration of our sales in a limited number of specific markets increases risks associated with the reduction, elimination or expiration of governmental subsidies and economic incentives for solar energy products
3. 16Existing electric utility industry policies and regulations, and any subsequent changes, may present technical, regulatory and economic barriers to the purchase and use of solar energy systems that may significantly reduce demand for our products and services or harm our ability to compete
4. 17Actions addressing determinations of forced labor practices in China and legislation and policies adopted to address such practices may disrupt the global supply of solar panels and affect our business
5. 18Changes in the U.S. trade environment, including the imposition of import tariffs, could adversely affect the amount or timing of our revenue, results of operations or cash flows
6. 19Finally, the new Trump administration has announced plans to impose 25% tariffs, affecting steel and aluminum imports into the United States, which could result in interruptions in the supply chain and impact costs and our gross margins
7. 20Changes in tax laws or regulations that are applied adversely to us, or our customers, could materially adversely affect our business, prospects, financial condition and results of operations
8. 21We could be adversely affected by any violations of the FCPA and other foreign anti-bribery laws, as well as of export controls and economic sanctions laws

Risks Related to Manufacturing and Our Supply Chain

1. 22We depend upon a limited number of outside contract manufacturers, and our operations could be disrupted if our relationships with these contract manufacturers are compromised
2. 23are required to purchase products at a price in excess of the prevailing market rate. Any change in our relationships with our contract manufacturers or changes to contractual terms of our agreements with them could adversely affect our financial condition and results of operations
3. 24We may experience delays, disruptions or quality control problems in our contract manufacturers’ manufacturing operations, which could result in reputational damage and other liabilities to our customers
4. 25The interruption of the flow of components from international contract manufacturers could disrupt our supply chain, including as a result of the imposition of additional laws, duties, tariffs and other charges on imports and exports
5. 26Failure by our contract manufacturers to use ethical business practices and comply with applicable laws and regulations may adversely affect our business
6. 27We may not have sufficient insurance coverage to cover business continuity
7. 28our size makes it difficult to insure some or all of the possible harms that could result if we fail to sell and deliver our products in a timely manner, which may adversely affect our financial results

Risks Related to Intellectual Property

1. 29If we fail, in whole or in part, to obtain, maintain, protect, defend or enforce our intellectual property and other proprietary rights, our business and results of operations could be materially harmed
2. 30Our issued U.S. patents are expected to expire between 2027 and 2043
3. 31We use “open-source” software, and any failure to comply with the terms of one or more open-source licenses could negatively affect our business

Risks Related to Information Technology and Data Privacy

1. 32A significant cybersecurity incident or other disruption to our technology infrastructure could disrupt our business operations and cause financial and reputational damage
2. 33Unauthorized disclosure of personal or sensitive data or confidential information, whether through a breach of our computer or information technology systems or otherwise, could severely hurt our business

Risks Related to Our Capital Strategy, Ownership of Our Common Stock, and Our Senior Notes

1. 34An active, liquid trading market for our common stock may not be sustained
2. 35Our common stock is currently listed for trading on Nasdaq. We must satisfy applicable listing requirements of Nasdaq, to maintain the listing of our common stock on Nasdaq
3. 36The market price of our common stock remains volatile, and we may in the future fail to meet Nasdaq's listing requirements which, if we are unable to correct, could cause our stock to be delisted and may limit your ability to sell your shares timely and at an acceptable price
4. 37changes in accounting principles
5. 38Raising additional funds may cause dilution to existing stockholders and/or may restrict our operations or require us to relinquish proprietary rights
6. 39There may be future sales of our securities or other dilution of our equity, which may adversely affect the market price of our common stock
7. 40Certain provisions of the Warrants could discourage an acquisition of us by a third party
8. 41We do not intend to pay dividends on our common stock for the foreseeable future
9. 42The price of our common stock could decline if securities analysts do not publish research or if securities analysts or other third parties publish inaccurate or unfavorable research about us
10. 43Our directors, executive officers and principal stockholders will continue to have significant influence over our company, which could limit your ability to influence the outcome of key transactions, including a change of control
11. 44Anti-takeover provisions in our governing documents and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management and depress the market price of our common stock
12. 45the authorization of undesignated or “blank check” preferred stock, the terms of which may be established and shares of which may be issued without further action by our stockholders
13. 46We are an “emerging growth company” and have taken advantage of the reduced disclosure requirements applicable to emerging growth companies which may make our common stock less attractive to investors

Risks Related to Climate Change and Health Epidemics

1. 47We face risks related to extreme weather events caused by climate change and actual or threatened health epidemics, which could significantly disrupt our operations