FTC Solar Announces Closing of Promissory Note Private Placement

Rhea-AI Summary

FTC Solar (Nasdaq: FTCI) has completed a private placement of senior secured promissory notes worth $15 million, along with warrants. The notes carry an 11% annual interest rate if paid in cash, or 13% if paid-in-kind, maturing on December 4, 2029. The warrants allow purchase of 1,750,000 shares of Common Stock at $0.10 per share over a five-year period. The company plans to use the proceeds for balance sheet support, growth acceleration, and general corporate purposes.

Positive

• Secured $15 million in additional funding through note placement
• Flexibility in interest payment options (cash or in-kind)

Negative

• High interest rate of 11-13% indicates expensive financing terms
• Potential dilution for existing shareholders through 1.75M warrant shares at $0.10
• Need for additional funding suggests possible cash flow concerns

Insights

Financial Analyst

The $15 million promissory note placement represents a significant financing event for FTC Solar, though at relatively expensive terms. The 11% cash interest rate (or 13% PIK) is notably high, reflecting the company's current market position and risk profile. The warrant component, with 1.75 million shares at a $0.10 strike price, represents substantial potential dilution given the company's current market cap of about $39 million.

The financing provides important working capital but comes at a significant cost to shareholders. The extremely low warrant exercise price suggests deep concerns about the company's current valuation and future prospects. This debt arrangement, while providing needed liquidity, indicates significant financial stress and potential challenges ahead for the solar tracker manufacturer.

AUSTIN, Texas, Dec. 04, 2024 (GLOBE NEWSWIRE) -- FTC Solar, Inc. (Nasdaq: FTCI), a leading provider of solar tracker systems, today announced that it has closed a previously announced private placement of senior secured promissory notes (the “Notes”) in an aggregate principal amount of fifteen million dollars ($15,000,000) and warrants (the “Warrants”). The offering closed on December 4, 2024.

The Notes bear interest at a rate of 11% per annum if payable in cash or, at the Company’s option, 13% per annum if paid-in-kind and will mature on December 4, 2029. The Warrants are exercisable for five (5) years to purchase an aggregate of 1,750,000 shares of Common Stock at an exercise price of $0.10, subject to adjustment under certain circumstances described in the Warrants.

The Company is utilizing the proceeds of the offering for balance sheet support, growth acceleration and general corporate purposes.

About FTC Solar Inc.
Founded in 2017 by a group of renewable energy industry veterans, FTC Solar is a leading provider of solar tracker systems, technology, software, and engineering services. Solar trackers significantly increase energy production at solar power installations by dynamically optimizing solar panel orientation to the sun. FTC Solar’s innovative tracker designs provide compelling performance and reliability, with an industry-leading installation cost-per-watt advantage.

FTC Solar Contact:
Bill Michalek 
Vice President, Investor Relations 
FTC Solar
T: (737) 241-8618 
E: IR@FTCSolar.com

Forward-Looking Statements 
This press release contains forward looking statements. These statements are not historical facts but rather are based on our current expectations and projections regarding our business, operations and other factors relating thereto. Words such as “may,” “will,” “could,” “would,” “should,” “anticipate,” “predict,” “potential,” “continue,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates” and similar expressions are used to identify these forward-looking statements. These statements are only predictions and as such are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict.  In addition, this press release contains statements about third parties and their commercial activity.  We have not independently verified or confirmed such statements and have instead relied on the veracity of information as provided to us by such third parties related to such statements.  You should not rely on our forward-looking statements or statements related to third parties or their commercial activities as predictions of future events, as actual results may differ materially from those in the forward-looking statements or statements related to third parties or their commercial activities because of several factors, including those described in more detail above and in our filings with the U.S. Securities and Exchange Commission, including the section entitled “Risk Factors” contained therein. FTC Solar undertakes no duty or obligation to update any forward-looking statements or statements related to third parties or their commercial activities contained in this release as a result of new information, future events or changes in its expectations, except as required by law.

FAQ

What are the terms of FTC Solar's (FTCI) December 2024 promissory note placement?

The promissory notes total $15 million with 11% annual interest for cash payments or 13% for paid-in-kind payments, maturing on December 4, 2029. The deal includes warrants for 1,750,000 shares at $0.10 per share.

How much funding did FTC Solar (FTCI) raise in its December 2024 private placement?

FTC Solar raised $15 million through a private placement of senior secured promissory notes.

What is the exercise price and duration of FTC Solar's (FTCI) December 2024 warrants?

The warrants have an exercise price of $0.10 per share and are exercisable for five years, allowing the purchase of 1,750,000 shares of Common Stock.