Delaware
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3674
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81-4816270
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(State or other jurisdiction of
incorporation or organization)
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer Identification Number)
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Andrea L. Nicolás, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
One Manhattan West
New York, New York 10001
(212) 735-3000
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Jacob D. Wolf, Esq.
General Counsel and Secretary
FTC Solar, Inc.
9020 N Capital of Texas Hwy, Suite I-260,
Austin, Texas 78759
(737) 787-7906
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Benjamin K. Marsh, Esq.
Goodwin Procter LLP
620 Eighth Avenue
New York, New York 10018
(212) 813-8800
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Large accelerated filer
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☐
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Accelerated filer
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☐
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Non-accelerated filer
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☒
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Smaller reporting company
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☐
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Emerging growth company
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☒
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Title of Each Class
of Securities to be Registered
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Amount to be
Registered(1)
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Proposed Maximum
Offering Price per Share(1)
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Proposed Maximum
Aggregate Offering Price(1)(2)
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Amount of
Registration Fee(3)
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Common Stock, par value $0.0001 per share
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21,184,210
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$20.00
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$423,684,200
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$46,224.00
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(1)
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Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(a) under the Securities Act of 1933.
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(2)
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Includes shares which may be sold pursuant to the underwriters’ option to purchase additional shares, solely to cover over-allotments, if any.
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(3)
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Of this amount, the Registrant previously paid $10,910.00 of the total registration fee in connection with the previous filing of the Registration Statement.
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PROSPECTUS
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Per Share
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Total
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Public offering price
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$
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$
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Underwriting discounts and commissions(a)
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$
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$
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Proceeds to us before expenses
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$
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$
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(a)
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See “Underwriting” for a complete description of the compensation payable to the underwriters.
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Barclays
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BofA Securities
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Credit Suisse
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UBS Investment Bank
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HSBC
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Cowen
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Simmons Energy | A Division of Piper Sandler
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Raymond James
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Roth Capital Partners
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Page
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Allied Market Research – Solar Energy Market by Technology, Solar Module, Application and End-Use: Global Opportunity Analysis and Industry Forecast, 2019-2026
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Australia Clean Energy Council – Clean Energy Australia Report 2020
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Black & Veatch Holding Company (“Black & Veatch”) – Voyager Photovoltaic Single Axis Tracker – Independent Assessment – 2019
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Bloomberg New Energy Finance (“BNEF”) – 2020 New Energy Outlook (“NEO”)
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BNEF – 2H 2020 LCOE Update
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BNEF – Capacity Forecast Update
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Eclipse-M – FTC Solar Voyager Single-Axis Tracker Market Annual 2020 Update: Comparison Report
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IHS Markit Ltd (“IHS Markit”) – Global PV Tracker Market Report: 2020
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IHS Markit – PV Installations Tracker
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International Renewable Energy Agency (“IRENA”) – Renewable Power Generation Costs in 2019
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InfoLink Consulting Co., Ltd. (“PV InfoLink”) – The New Era of PV: 600W+ Modules
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Solar Energy Industries Association (“SEIA”) – Solar Industry Research Data
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United States Energy Information Administration – United States Electricity Profile 2019
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United States Environmental Protection Agency – Air Pollutant Emissions Trends Data
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United States Forum for Sustainable and Responsible Investment (“SIF”) – Report on U.S. Sustainable and Impact Investing Trends 2020
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United States National Renewable Energy Laboratory (“NREL”) – Understanding Bifacial Photovoltaics Potential: Field Performance – December 2019
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Wood Mackenzie Power & Renewables (“Wood Mackenzie”) – The Global PV Tracker Landscape 2019
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Wood Mackenzie – Global Bifacial Module Market Report 2019
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Wood Mackenzie – Global Solar PV Market Outlook Update – Q3 2020
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Wood Mackenzie – H2 2020 U.S. Solar PV System Pricing
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Wood Mackenzie – The Global Solar PV Tracker Landscape 2020
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Industry-Leading Installation Speed and Low Labor Costs. Voyager requires up to 56% fewer foundations per MW than other competing solutions, or only seven structural foundations, or piles, per row. This results in 15% less steel content in projects using our system. Voyager also utilizes (i) simplified assembly methods that require fewer tools and up to 45% fewer connection points between piles than competing solutions and (ii) our patented panel hanging and self-alignment features, which together result in industry-leading installation speeds. In a study we commissioned in 2020, Eclipse-M, a nationally-recognized construction management consultant, found that Voyager’s installation time is 41% less than the industry average, or 211 person-hours per MW compared to 355 person-hours per MW for the trackers of our leading competitors that were evaluated in the study. In the United States, Australia and parts of Europe, we estimate that this reduced installation time, together with EPC contractors’ savings on materials due to our design methodologies (which are applicable to all sales markets), can result in 1.5-2.0 cents per watt of cost savings as compared to industry-leading one-panel in-portrait and two-panel in-portrait competitors. As such, on a 50 MW system in the United States, this could represent up to $1 million of project savings. In 2020, we reduced the installation time of our products by 32% from 2019 and we believe there is an opportunity to further reduce our customers' average installation cost through additional product innovation and installation technique improvements. Faster installation times are an increasingly impactful competitive advantage, as labor is a significant and growing contributor to total solar energy project costs, increasing from 22% in 2015 to 35% for standard 10 MW tracker projects in 2020 (over this same period, equipment costs have decreased from representing 66% to 51% of total costs of these projects), according to a 2020 Wood Mackenzie report. While independent row trackers are typically more expensive due to the higher-technology equipment required for their operation, we believe our independent row design offsets these higher fixed costs with lower installation cost and increased energy production.
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Design Flexibility that Optimizes Solar Panel Density. Voyager has a typical row length of 60 meters, compared to the significantly longer row lengths of some of our competitors’ systems, providing relative site design flexibility. Additionally, the two-panel in-portrait design of Voyager provides twice the number of solar panels across a given length of row compared to one-panel in-portrait systems. This increased panel density allows for greater design flexibility on sites with irregular boundaries, maximizes the use of available land and helps to preserve site environment. We believe these features, combined with the slope and terrain flexibility of Voyager, will be increasingly advantageous moving forward as an increasing percentage of solar projects are developed on sites with irregular boundaries and undulating terrain. Additionally, two-panel in-portrait systems capture more diffuse light due to their increased height as compared to one-panel in-portrait systems, and have higher panel performance from the reduced impact of radiant ground heat.
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Slope and Terrain Flexibility. Our independent row design allows for simplified installation on undulating terrain and irregular site boundaries. With no connection point between sequential rows, unlike linked-row systems, each Voyager row can be positioned without consideration of adjacent rows, enabling optimized row configuration. Additionally, Voyager’s adjustable design mounting allows for installation on terrain with slopes of up to 17.5% grade. This deployment flexibility allows Voyager to maximize solar energy production on sloped terrain while avoiding high grading costs, and our customers have the opportunity to enhance such benefits through the use of our SunPath tracking algorithm that reduces row-to-row shading.
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Structural Design that Optimizes Bifacial Panel Yield. Bifacial panels collect solar energy from both sides of the solar panel, resulting in up to a 9% gain in energy production compared with monofacial panels, according to an ongoing study by NREL. This efficiency improvement over traditional solar panels is driving a significant market shift to the use of bifacial panels, with bifacial panels expected to account for 17% of total installed solar capacity by 2024, quadrupling its share in 2019, according to a 2019 Wood Mackenzie report. We believe Voyager improves bifacial panel yield as compared to one-panel in-portrait systems by approximately 2% due to its structural design that minimizes rear side shading, increases rear side irradiance and improves thermal performance.
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DC Collections Advantages. In utility-scale solar projects, individual solar panels are wired in series into strings of solar panels, which typically consist of approximately 30 individual solar panels per string. Voyager can support four strings of panels per row versus the more common single-axis structure that only supports three strings of panels per row. This four string architecture allows for approximately 25% less direct current (“DC”) cabling to collect the power from each row, which we believe results in cost savings on materials and labor. In addition, the symmetric four string Voyager architecture, which isolates strings of panels into four quadrants on the tracker row, allows projects using Voyager to observe significantly less mismatch loss for bifacial panels compared to projects using (i) one-panel in-portrait single-axis trackers or (ii) two-panel in-portrait three string trackers that cannot isolate strings of panels onto a single side of the tracker. We believe Voyager’s reduction in mismatch loss for bifacial panels provides a significant energy production advantage compared to other trackers.
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Site Accessibility. Our two-panel in-portrait architecture maximizes row spacing and allows improved site access for operations and maintenance of the solar energy project or the grounds on which the project is sited. For an equivalent panel density or ground coverage ratio, Voyager provides twice the spacing between rows compared to one-panel in-portrait systems. This increased, open row spacing allows for vehicle access even in the most dense system layouts. Additionally, unlike linked-row systems, our design has no physical barriers that prevent movement between rows, such as movement undertaken during routine ground maintenance, which is important to maintain energy yields from the rear facing panel of bifacial solar panels.
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Performance-Enhancing Software Solution. Voyager uses a motor and slew drive on each row to continuously align the solar panels to the sun through the use of our baseline, proprietary solar tracking algorithm. Our customers also have the option to license our premium performance-enhancing software solution, SunPath, that uses proprietary algorithms that take into consideration topography, meteorological conditions and other local site conditions to reduce shading on every row and adjust panel positioning to address diffused light conditions (e.g. cloud cover), which results in optimized tracking and solar energy generation. Our SunPath software solution was released in the fourth quarter of 2020 and is backward compatible with all previously installed Voyager systems.
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Cost Competitiveness with Fossil-Fuel Energy Generation. Solar energy is currently one of the cheapest sources of new-build power generation, on an LCOE basis, in countries that account for approximately two-thirds of the global population and is forecasted to continue decreasing in cost to become the cheapest form of wholesale electric generation in the United States by 2022, according to BNEF.
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Governmental Policies and Regulations Across the Globe Supporting Renewable Energy. Governments across the globe have established policies to support a transition away from fossil fuels and towards low-carbon forms of energy, such as solar power. In the United States, for example, 30 states and the District of Columbia have implemented Renewable Portfolio Standards (“RPS”), which require a specified percentage of the electricity sold by utilities to come from renewable resources by a certain date. Global renewable energy support has accelerated since the Paris Agreement under the United Nations Framework Convention on Climate Change, which became effective in 2016.
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Corporate Procurement of Renewable Energy. Companies across a variety of industries have become increasingly focused on the climate impact of their operations. For example, over 1,000 companies around the world have committed to or already set science-based greenhouse gas emissions targets in accordance with the goals of the Paris Agreement, according to The Science Based Targets initiative. Since fossil fuel-based energy generation is one of the main sources of corporate greenhouse gas emissions, shifting to renewable energy is a primary way for companies to reduce their carbon emissions and achieve such targets.
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Improvement in Battery Storage Technology. Recent advances in technology and cost reductions have helped battery storage emerge as a solution to the intermittent nature of solar power. The cumulative installed capacity of energy storage projects is expected to increase from 11 GW in 2020 to 168 GW in 2030, according to BNEF NEO. The ability of battery technology to convert solar energy to a baseload form of power is expected to establish solar energy as a firm, reliable source of power, increasing overall demand for solar energy.
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Continued Development of Newly-Renewable Use Cases. The increased cost competitiveness of electricity is driving new sectors of the economy to switch from fossil fuels to electricity as their source of energy, such as passenger and commercial vehicles, and heating and industrial processes.
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Increased Capital Available for Green Investments. Environmental responsibility has become a priority for investors, demonstrated by a meaningful trend in allocation of capital to companies that are leading and committed to the energy transition from fossil fuels to low-carbon alternatives.
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Market and Product Positioning. In designing Voyager, we sought to introduce a solution that is differentiated from existing industry solutions and positioned to address the future needs of the solar industry as it continues to develop. In addition to benefitting from the growth in solar energy and the increasing penetration of trackers, we believe we are positioned to benefit from the accelerating adoption of two-panel in-portrait tracker systems, bifacial panels and larger-format or higher-powered bifacial panels. Our two-panel in-portrait solutions are already optimized for bifacial panels. In 2020, we introduced our first Voyager solution designed for the new larger-format panels entering the marketplace and were awarded one of the world’s first larger-format panel projects.
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Management Team with Extensive Renewable Energy Industry Experience. Our management team has global experience across the full solar energy project lifecycle, including project development, finance, equipment supply, construction and operations. Since 2013, our management team has spearheaded the design and delivery of more than 2.7 GW of single-axis tracker equipment, attributable to both the AP90 tracker (and its predecessor product) and Voyager. Our management team’s experience beyond these products includes the development, financing and construction of more than 5.5 GW of utility-scale solar energy projects.
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Multi-Region, Asset-Light Contract Manufacturing Model. Voyager is manufactured through proven and certified contract manufacturing partners. This allows us to scale to meet growing customer demand without intensive capital investment, leading to strong cash flow conversion, all while ensuring the high quality of our products. Our contract manufacturing partners are subject to a rigorous qualification process, which includes third party audits and production monitoring. Our global supply chain allows us to optimize logistics and lead times for both domestic and international growth. This provides geographic diversity which reduces the impact of trade tariffs and enables the reliable supply of our product.
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Focus on Product Improvement and Technology Innovation. Voyager offers proprietary architecture advances that lower installation cost and improve operational performance. These innovations help us deliver additional value to our customers and improve our competitive positioning. Additionally, we leverage innovative forecasting and modeling platforms and methods to optimize project yield.
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Flexible Capital Structure. We have been able to grow our company without the use of long-term debt as a result of our asset-light contract manufacturing model and by leveraging operating efficiencies. Because we have prudently operated our business since our inception, we have significant capital structure flexibility with which to fund our future growth at an attractive cost of capital. We ended 2020 with a positive net cash position and no long-term debt.
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Engineering Services Offerings. Voyager is augmented by our engineering services offerings that assist customers in optimizing our product and reducing total project costs. The engineering services we offer include power plant design services for array layout and electrical design as well as structural and foundation design, and construction engineering consulting services focused on improving productivity and
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Value-Added Project Management Software. In addition to SunPath, our software that is designed to increase energy production from Voyager, we offer two other software solutions to support our customers in project design and development, Atlas and SunDAT. These project management software solutions can be coupled with Voyager, but can also be utilized by non-Voyager customers. Our software licensing model also provides additional opportunities for engagement and service, which strengthen customer relationships.
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Increasing Our Market Share in the United States. From the first installation of Voyager in the third quarter of 2019, we have quickly built a strong track record of innovative design, construction efficiency and customer engagement. As of December 31, 2020, we had an estimated U.S. tracker market share of approximately 11%, which was calculated using our MW shipped for fiscal year 2020 compared to a total tracker market shipment estimate from a 2020 Wood Mackenzie report. We plan to leverage Voyager’s strong value proposition to transition from predominantly contracts for sales for single projects to a mix of such single project sales and contracts for sales for multiple projects with project developers, solar asset owners and EPC contractors.
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Expanding Internationally. We believe there is a significant opportunity for us to penetrate additional markets outside of the United States. International markets are experiencing the same benefits from, and trend towards adoption of, trackers as seen in the United States, and represent further upside potential, as these markets have lower tracker penetration today. Cumulative installed capacity outside of the United States is expected to reach approximately 1.7 TW in 2025, up from 775 GW in 2019, according to BNEF NEO. In 2020, we established sales and marketing operations in Asia, the Middle East, North Africa and Australia, and we expect to continue to expand our global footprint in 2021 by establishing similar operations in Latin America and Europe. In addition to our strong product offerings, we believe our growing track record and strong customer relationships will aid our international expansion efforts.
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Enhancing Our Product Capability. We believe that Voyager is well-positioned to continue to adapt to evolving changes in panel technology because it has been engineered to be panel agnostic and designed to be flexible to form. We are intensely focused on continuing to enhance our product performance and positioning. Our initial version of Voyager was marketed for inclusion in projects in regions with maximum wind speeds of 105 mph. Throughout 2020, we have released and contracted to sell two additional versions of Voyager that are marketed for inclusion in projects in regions with maximum wind speeds of both 120 mph and 135 mph, according to a 2019 Black & Veatch report. In addition, panel manufacturers continue to advance the efficiency of solar panels through design and manufacturing changes, including, in particular, in the form of bifacial panels and larger-format panels. In 2020, we released Voyager+, our next generation single-axis Voyager Tracker, which is compatible with larger-format panels from a variety of solar panel manufacturers and we were awarded one of the world’s first larger-format panel projects.
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Reducing Operating Costs through Operating Leverage. We believe that the scaling of our workforce in 2020, combined with our focus on lower-cost employees and lower-cost regions in the future, such as Asia, provides us with operating efficiencies that will enable us to enhance our profitability as we grow. We have historically prioritized establishing operations in the United States to support the growth we have achieved to date. We expect a significant portion of our incremental headcount additions moving forward to be lower-cost employees to support increased sales (such as field service employees), and expect future growth in sales employees to be focused on lower-cost regions.
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Capturing Additional Revenue Streams through Software Services. We believe that our add-on SunPath software, with performance-enhancing algorithms, has the potential to provide significant
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Developing Additional Tracker Services. We believe we have additional opportunities to differentiate ourselves as a solar energy solutions provider to our customers through the introduction of a targeted set of offerings beyond sales of Voyager. We have the ability to introduce hardware and software upgrades and retrofits as well as preventative maintenance services and extended warranty plans, each of which we believe can generate high margin, recurring revenue that also strengthens customer relationships.
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Growing through Strategic Acquisitions. We believe that our strong balance sheet affords us the opportunity to access the capital markets on favorable terms, which in turn gives us the option to accelerate our growth through strategic acquisitions. We continue to investigate opportunities to further diversify our platform through strategic acquisitions.
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our limited operating history and the rapidly changing solar industry make it difficult to evaluate our current business and future prospects and we may not achieve profitability in the future;
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we have a history of losses that may continue in the future, and we may not achieve profitability;
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the market for our products and services is highly competitive and rapidly evolving and we expect to face increased competition;
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if potential owners of solar energy systems incorporating our solar tracker systems are unable to secure financing on acceptable terms, we could experience a reduction in the demand for our products;
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our dependence on a limited number of customers may impair our ability to operate profitably;
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we invest significant time, resources and management attention to identifying and developing project leads that are subject to our sales and marketing focus and if we are unsuccessful in converting such project leads (or awarded orders) into binding purchase orders, our business, financial condition or results of operations could be materially adversely affected;
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we plan to expand into additional international markets, which will expose us to additional regulatory, economic, political, reputational and competitive risks;
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we may 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;
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defects 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;
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we face risks related to actual or threatened health epidemics, such as the novel coronavirus
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if 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;
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we depend upon a limited number of outside contract manufacturers, and our operations could be disrupted if our relationships with these contract manufacturers are compromised;
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we 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;
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failure by our contract manufacturers to use ethical business practices and comply with applicable laws and regulations may adversely affect our business;
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in certain circumstances, our contract manufacturers are dependent on ocean transportation to deliver our products. If our contract manufacturers experience disruptions in the use of ocean transportation, which includes vessels, ports and related infrastructure and logistics, to deliver our products, our business and financial condition could be materially and adversely impacted;
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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;
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changes 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; and
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we could be adversely affected by any violations of the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), and other foreign anti-bribery laws, as well as of export controls and economic sanctions laws.
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we are permitted to include only two years of audited financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure;
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we are not required to engage an auditor to report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended, or the Sarbanes-Oxley Act;
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we are permitted to take advantage of extended transition periods for complying with new or revised accounting standards which allows an emerging growth company to delay the adoption of some accounting standards until those standards would otherwise apply to private companies;
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we are not required to submit certain executive compensation matters to stockholder advisory votes, such as “say-on-pay,” “say-on-frequency” and “say-on-golden parachutes;” and
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we are not required to comply with certain disclosure requirements related to executive compensation, such as the requirement to disclose the correlation between executive compensation and performance and the requirement to present a comparison of our Chief Executive Officer’s compensation to our median employee compensation.
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$181.0 million for general corporate purposes, including working capital and operating expenses. We may also use a portion of such proceeds to acquire or invest in businesses, products, services or technologies, however, we do not have binding agreements or commitments for any material acquisitions or investments at this time.
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$140.3 million to purchase an aggregate of 7,894,735 shares of our common stock (or $189.3 million to purchase 10,657,892 shares if the underwriters exercise their over-allotment option in full), some of which will result from the settlement of certain vested RSUs and the exercise of certain options in connection with this offering, from the Stock Repurchase Parties at the initial public offering price less the underwriting discounts and commissions.
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12,324,533 shares of common stock reserved for future grant or issuance under our 2021 Stock Incentive Plan (the “2021 Plan”) and 1,643,271 shares of common stock reserved for future grant or issuance under our 2021 Employee Stock Purchase Plan (the “ESPP”), which shares will automatically increase each year, as more fully described in “Executive and Director Compensation;”
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8,236,363 shares of common stock issuable upon exercise of options outstanding as of March 31, 2021, having a weighted-average exercise price of $0.23 per share (with 5,802,779 of such options being vested as of March 31, 2021);
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15,462,270 shares of common stock issuable upon settlement of RSUs outstanding as of March 31, 2021, having an estimated grant date fair value of $7.15 per share (with 10,915,938 of such RSUs being vested as of March 31, 2021); and
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32,467 shares of our common stock that we intend to repurchase and retire pursuant to the Stock Repurchase resulting from the exercise of certain options and 4,192,896 shares of our common stock that we intend to repurchase and retire pursuant to the Stock Repurchase resulting from the settlement of certain vested RSUs in connection with this offering.
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a 8.25-for-1 stock split to be effected prior to the closing of this offering (the “Forward Stock Split”);
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no exercise, settlement or termination of outstanding options or RSUs after March 31, 2021, except in connection with the settlement of certain vested RSUs and the exercise of certain options for the Stock Repurchase;
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the filing and effectiveness of our amended and restated certificate of incorporation in Delaware and the adoption of our amended and restated bylaws immediately prior to the closing of this offering;
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an initial public offering price of $19.00 per share of common stock, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus; and
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no exercise of the underwriters’ over-allotment option to purchase additional shares of our common stock.
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Years Ended
December 31,
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2019
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2020
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(in thousands, except per share data)
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Revenue:
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Product revenue
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$43,085
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$158,925
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Service revenue
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10,039
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28,427
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Total revenue
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53,124
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187,352
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Cost of revenue(1):
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Product cost of revenue
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44,212
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155,967
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Service cost of revenue
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10,863
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27,746
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Total cost of revenue
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55,075
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183,713
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Gross (loss) profit
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(1,951)
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3,639
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Operating expenses
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Research and development(1)
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3,960
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5,222
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Selling and marketing(1)
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1,897
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3,545
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General and administrative(1)
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4,563
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11,798
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Total operating expenses
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10,420
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20,565
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Loss from operations
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(12,371)
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(16,926)
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Interest expense, net
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454
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480
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Loss before income taxes
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(12,825)
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(17,406)
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Benefit from income taxes
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(39)
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(83)
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Loss (Income) from unconsolidated subsidiary
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709
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(1,399)
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Net loss
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$(13,495)
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$(15,924)
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Net loss per share
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Basic and diluted
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(1.79)
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(1.91)
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Weighted-average common shares outstanding
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Basic and diluted
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7,523,447
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8,344,039
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Pro forma net loss per share information (unaudited)(2)
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Pro forma net loss
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(51,280)
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Pro forma basic and diluted net loss per share
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(0.70)
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Pro forma weighted average shares outstanding — basic and diluted
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73,564,070
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(1)
|
Costs and expenses include stock-based compensation expense as follows:
|
|
| |
Years Ended
December 31,
|
|||
|
| |
2019
|
| |
2020
|
|
| |
(in thousands)
|
|||
Cost of revenue
|
| |
$ 176
|
| |
$322
|
General and administrative
|
| |
653
|
| |
1,401
|
Research and development
|
| |
51
|
| |
57
|
Selling and marketing
|
| |
26
|
| |
38
|
Total stock-based compensation expense
|
| |
$ 906
|
| |
$1,818
|
(2)
|
Pro forma basic net loss per share is computed using pro forma net loss divided by the weighted average number of common shares outstanding during the period, the effect of assumed vesting of the RSUs with service condition satisfied as of December 31, 2020 and the effect of the Forward Stock Split. Pro forma diluted net loss per share is computed using the weighted average number of common shares, the effect of assumed vesting of the RSUs with service condition satisfied, the effect of potentially dilutive equity awards outstanding during the period and the effect of the Forward Stock Split. There were no potentially dilutive equity securities in the period presented.
|
|
| |
As of December 31, 2020
|
||||||
|
| |
Actual
|
| |
Pro Forma(1)
|
| |
Pro Forma as
Adjusted(2)(3)
|
|
| |
(in thousands)
|
||||||
Consolidated Balance Sheet Data:
|
| |
|
| |
|
| |
|
Cash and restricted cash
|
| |
$33,373
|
| |
$33,373
|
| |
$215,589
|
Total assets
|
| |
71,393
|
| |
71,393
|
| |
252,019
|
Total liabilities
|
| |
63,942
|
| |
63,942
|
| |
63,492
|
Total stockholders’ equity (deficit)
|
| |
7,451
|
| |
7,451
|
| |
188,527
|
(1)
|
The pro forma consolidated balance sheet data gives effect to (i) the filing and effectiveness of our amended and restated certificate of incorporation and (ii) an increase to additional paid-in capital and accumulated deficit related to stock-based compensation expense of $35.4 million associated with RSUs for which the service-based vesting condition was satisfied as of December 31, 2020 and for which the liquidity event-related performance vesting condition will be satisfied in connection with this offering.
|
(2)
|
The pro forma as adjusted column in the balance sheet data table above gives effect to (i) the pro forma adjustments set forth above, (ii) the sale and issuance by us of shares of our common stock in this offering, based upon the assumed initial public offering price of $19.00 per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us and (iii) the Stock Repurchase.
|
(3)
|
Each $1.00 increase or decrease in the assumed initial public offering price of $19.00 per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, would have no impact on our pro forma as adjusted cash and restricted cash, total assets, total liabilities and total stockholders’ equity (deficit) as a result of the Stock Repurchase, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, after deducting estimated underwriting discounts and commissions payable by us. An increase or decrease of 1.0 million shares in the number of shares offered by us would have no impact on the amount of our pro forma as adjusted cash and restricted cash, total assets, total liabilities, and total stockholders’ equity (deficit) as a result of the Stock Repurchase, assuming the assumed initial public offering price remains the same, and after deducting estimated underwriting discounts and commissions payable by us.
|
|
| |
Years Ended
December 31,
|
|||
|
| |
2019
|
| |
2020
|
|
| |
(in thousands, except per share data)
|
|||
Non-GAAP Measures(1)
|
| |
|
| |
|
Adjusted EBITDA
|
| |
$(11,053)
|
| |
$(15,062)
|
Adjusted Net Loss
|
| |
$(11,477)
|
| |
$(15,475)
|
Adjusted EPS
|
| |
$(1.53)
|
| |
$(1.86)
|
(1)
|
We present Adjusted EBITDA, Adjusted Net Loss and Adjusted EPS as supplemental measures of our performance. We define Adjusted EBITDA as net loss plus (i) income tax benefit, (ii) interest expense, (iii) depreciation expense, (iv) amortization of intangibles, (v) stock-based compensation and (vi) loss (income) from unconsolidated subsidiary. We define Adjusted Net Loss as net loss plus (i) amortization of intangibles, (ii) stock-based compensation, (iii) loss (income) from unconsolidated subsidiary and (iv) income tax benefit of adjustments. Adjusted EPS is defined as Adjusted Net Loss on a per share basis using the weighted average diluted shares outstanding and excluding the effect of the Forward Stock Split.
|
|
Adjusted EBITDA, Adjusted Net Loss and Adjusted EPS are intended as supplemental measures of performance that are neither required by, nor presented in accordance with, GAAP. We present Adjusted EBITDA, Adjusted Net Loss and Adjusted EPS because we believe they assist investors and analysts in comparing our performance across reporting periods on an ongoing basis by excluding items that we do not believe are indicative of our core operating performance. In addition, we use Adjusted EBITDA, Adjusted Net Loss and Adjusted EPS to evaluate the effectiveness of our business strategies.
|
|
Among other limitations, Adjusted EBITDA, Adjusted Net Loss and Adjusted EPS do not reflect (i) our cash expenditures, or future requirements, for capital expenditures or contractual commitments, and (ii) the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations. Further, the adjustments noted in Adjusted EBITDA do not reflect the impact of any income tax expense or benefit. Additionally, other companies in our industry may calculate Adjusted EBITDA, Adjusted Net Loss and Adjusted EPS differently than we do, which limits its usefulness as a comparative measure.
|
|
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 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 GAAP measure as disclosed below.
|
|
| |
Years Ended
December 31,
|
|||
|
| |
2019
|
| |
2020
|
|
| |
(in thousands)
|
|||
Net loss
|
| |
$(13,495)
|
| |
$(15,924)
|
Income tax benefit
|
| |
(39)
|
| |
(83)
|
Interest expense, net(a)
|
| |
454
|
| |
480
|
Depreciation expense
|
| |
12
|
| |
13
|
Amortization of intangibles(b)
|
| |
400
|
| |
33
|
Stock-based compensation(c)
|
| |
906
|
| |
1,818
|
Loss (Income) from unconsolidated subsidiary(d)
|
| |
709
|
| |
(1,399)
|
Adjusted EBITDA
|
| |
$(11,053)
|
| |
$(15,062)
|
(a)
|
Represents interest expense, annual amortization of debt issuance cost and loss on debt extinguishment in connection with our Secured Promissory Notes (as defined herein), and a revolving line of credit with Western Alliance Bank. See “Non-Operating Expenses and Other Items—Interest Expense” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
|
(b)
|
Represents amortization expense related to developed technology.
|
(c)
|
Represents stock-based compensation expense. See “Executive and Director Compensation.”
|
(d)
|
Represents results of an entity that we do not consolidate, as our management excludes these results when evaluating our operating performance.
|
|
| |
Years Ended
December 31,
|
|||||||||
|
| |
2019
|
| |
2020
|
||||||
|
| |
Loss
|
| |
EPS
|
| |
Loss
|
| |
EPS
|
|
| |
(in thousands, except per share data)
|
|||||||||
Net loss and EPS
|
| |
$(13,495)
|
| |
(1.79)
|
| |
$(15,924)
|
| |
(1.91)
|
Amortization of intangibles
|
| |
400
|
| |
0.05
|
| |
33
|
| |
—
|
Stock-based compensation
|
| |
906
|
| |
0.12
|
| |
1,818
|
| |
0.22
|
Loss (Income) from unconsolidated subsidiary
|
| |
709
|
| |
0.09
|
| |
(1,399)
|
| |
(0.17)
|
Income tax expense of adjustments(a)
|
| |
3
|
| |
—
|
| |
(3)
|
| |
—
|
Adjusted Net Loss and Adjusted EPS
|
| |
$(11,477)
|
| |
(1.53)
|
| |
$(15,475)
|
| |
(1.86)
|
Adjusted effective tax rate(b)
|
| |
0.36%
|
| |
|
| |
0.50%
|
| |
|
(a)
|
Represents incremental tax expense of adjustments assuming the adjusted effective tax rate.
|
(b)
|
Represents the adjusted effective tax rate for the periods presented. For the year ended December 31, 2019, the effective tax rate of 0.29% was increased by 0.07% to 0.36% and for the year ended December 31, 2020, the effective tax rate of 0.36% was increased by 0.14% to 0.50%. The increases were due to the impact of adjustments made for loss (income) from unconsolidated subsidiary.
|
•
|
the cost competitiveness, reliability and performance of solar energy systems compared to conventional and non-solar renewable energy sources and products;
|
•
|
the availability, scale and scope of federal, state, local and foreign government subsidies and incentives to support the development and deployment of solar energy products;
|
•
|
prices of traditional carbon-based energy sources and government subsidies for these sources;
|
•
|
the extent to which the electric power industry and broader energy industries are deregulated to permit broader adoption of solar electricity generation;
|
•
|
investment by end-users of solar energy products, which tends to decrease when economic growth slows; and
|
•
|
the emergence, continuance or success of, or increased government support for, other alternative energy generation technologies and products.
|
•
|
our ability to produce solar tracker systems that compete favorably against other products on the basis of price, quality, cost of installation, overall cost savings, reliability and performance;
|
•
|
the rate and extent of deployment of tracker systems versus fixed-tilt ground-mounted systems within the solar industry, especially in international markets;
|
•
|
the rate and extent of deployment of two-panel in-portrait tracker systems versus one-panel in-portrait tracker systems;
|
•
|
our ability to timely introduce new products and complete new designs, and qualify and certify our products;
|
•
|
whether project developers, solar asset owners, EPC contractors and solar financing providers will continue to adopt and finance our solar tracker systems and other products and services, including as a result of the quality, reliability and performance of our tracker systems that are in operation, which have a relatively limited history;
|
•
|
the ability of prospective customers to obtain financing, including tax equity financing, for solar energy installations using our products on acceptable terms or at all;
|
•
|
our ability to develop products and related processes that comply with local standards and regulatory requirements, as well as local content requirements; and
|
•
|
our ability to develop and maintain successful relationships with our customers and contract manufacturers.
|
•
|
construction of a significant number of new, lower-cost power generation plants, including plants utilizing natural gas, renewable energy or other generation technologies;
|
•
|
relief of transmission constraints that enable distant, lower-cost generation to transmit energy less expensively or in greater quantities;
|
•
|
reductions in the price of natural gas or other fuels;
|
•
|
utility rate adjustment and customer class cost reallocation;
|
•
|
decreased electricity demand, including from energy conservation technologies and public initiatives to reduce electricity consumption;
|
•
|
development of smart-grid technologies that lower peak energy requirements;
|
•
|
development of new or lower-cost customer-sited energy storage technologies that have the ability to reduce a customer’s average cost of electricity by shifting load to off-peak times; and
|
•
|
development of new energy generation technologies that provide less expensive energy.
|
•
|
difficulty in establishing and managing international operations, including establishment of local customer service operations and local sales operations, and the associated legal compliance costs;
|
•
|
risks related to the usage of international sales representatives, who are not our employees and not under our direct control, including legal compliance risks and reputational risks;
|
•
|
acceptance of our single-axis tracker systems or other solar energy products and services in markets in which they have not traditionally been used;
|
•
|
our ability to accurately forecast product demand and manage manufacturing capacity and production;
|
•
|
willingness of our potential customers to incur a higher upfront capital investment for Voyager than may be required for competing fixed-tilt ground-mounted systems;
|
•
|
our ability to reduce production costs to price our products competitively;
|
•
|
availability of government subsidies and economic incentives for solar energy products and services;
|
•
|
timely qualification and certification of new products;
|
•
|
the ability to protect and enforce intellectual property rights abroad;
|
•
|
compliance with sanctions laws and anti-bribery laws, such as the FCPA, by us, our employees, our sales representatives and our business partners;
|
•
|
import and export controls and restrictions and changes in trade regulations;
|
•
|
tariffs and other non-tariff barriers, tax consequences and local content requirements;
|
•
|
fluctuations in currency exchange rates and the requirements of currency control regulations, which might restrict or prohibit conversion of other currencies into U.S. dollars; and
|
•
|
political or social unrest or economic instability in a specific country or region in which we operate.
|
•
|
diversion of management time and focus from operating our business to addressing acquisition integration challenges;
|
•
|
retention of key employees from the acquired company;
|
•
|
failure to realize long-term value and synergies from the acquisition;
|
•
|
failure to realize incremental revenue that was anticipated to result from the acquisition;
|
•
|
synchronization and integration of the operations of the acquired company with our operations, including blending of corporate cultures;
|
•
|
assumption of liabilities for activities of the acquired company before the acquisition; and
|
•
|
litigation or other claims in connection with the acquisition, including claims from terminated employees, customers, former stockholders or other third parties.
|
•
|
the imposition of additional trade laws, regulations, duties, tariffs and other charges on imports and exports that could relate to imports from a number of different countries, including as a result of the escalating trade war between China and the United States;
|
•
|
the potential imposition of restrictions on our acquisition, importation or installation of equipment under future U.S. regulations implementing the Executive Order on Securing the United States Bulk-Power System;
|
•
|
quotas imposed by bilateral trade agreements;
|
•
|
foreign currency fluctuations;
|
•
|
public health issues and epidemic diseases, their effects (including any disruptions they may cause) or the perception of their effects, such as the ongoing COVID-19 pandemic; and
|
•
|
significant labor disputes, such as transportation worker strikes.
|
•
|
changes in laws or regulations applicable to our industry or offerings;
|
•
|
speculation about our business in the press or investment community;
|
•
|
price and volume fluctuations in the overall stock market;
|
•
|
volatility in the market price and trading volume of companies in our industry or companies that investors consider comparable;
|
•
|
share price and volume fluctuations attributable to inconsistent trading levels of our common stock;
|
•
|
our ability to protect our intellectual property and other proprietary rights and to avoid infringement, misappropriation or violation of the intellectual property and other proprietary rights of third parties or claims by third parties of such infringement, misappropriation or violation;
|
•
|
sales of our common stock by us or our principal stockholders, officers and directors;
|
•
|
the expiration of contractual lock-up agreements;
|
•
|
the development and sustainability of an active trading market for our common stock;
|
•
|
success of competitive products or services;
|
•
|
the public’s response to press releases or other public announcements by us or others, including our filings with the SEC, announcements relating to litigation or significant changes in our key personnel;
|
•
|
the effectiveness of our internal controls over financial reporting;
|
•
|
changes in our capital structure, such as future issuances of debt or equity securities;
|
•
|
our entry into new markets;
|
•
|
tax developments in the U.S. or other markets;
|
•
|
strategic actions by us or our competitors, such as acquisitions or restructurings; and
|
•
|
changes in accounting principles.
|
•
|
a staggered board, which means that our board of directors is classified into three classes of directors with staggered three-year terms;
|
•
|
limitations on convening special stockholder meetings, which could make it difficult for our stockholders to adopt desired governance changes;
|
•
|
advance notice procedures, which apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders;
|
•
|
a prohibition on stockholder action by written consent, which means that our stockholders will only be able to take action at a meeting of stockholders;
|
•
|
a forum selection clause, which means certain litigation against us can only be brought in Delaware;
|
•
|
no authorization of cumulative voting, which limits the ability of minority stockholders to elect director candidates;
|
•
|
directors will only be able to be removed for cause;
|
•
|
certain amendments to our certificate of incorporation will require the approval of two-thirds of the then outstanding voting power of our capital stock;
|
•
|
our bylaws will provide that the affirmative vote of two-thirds of the then outstanding voting power of our capital stock, voting as a single class, is required for stockholders to amend or adopt any provision of our bylaws; and
|
•
|
the 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.
|
•
|
We did not have a sufficient complement of experienced personnel with the requisite technical knowledge of public company accounting and reporting and for non-routine, unusual or complex transactions. This material weakness contributed to the following material weakness.
|
•
|
We did not design and maintain adequate controls over the period-end close and financial reporting process including establishment of accounting policies and procedures, certain account reconciliations, cut-off, segregation of duties, journal entries and financial statement preparation. This material weakness contributed to material adjustments in the 2019 consolidated financial statements principally, but not limited to, the following areas: definite-lived intangibles, warranty obligation, cut-off of revenue transactions and related cost of sales.
|
•
|
We did not design and maintain effective information technology general controls over the IT systems used for preparation of the financial statements. Specifically, we did not design and maintain (i) program change management controls to ensure that information technology program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized and implemented appropriately; (ii) user access controls to ensure appropriate segregation of duties and that adequately restrict user and privileged access to financial applications, programs and data to appropriate Company personnel; and (iii) testing and approval controls for program development to ensure that new software development is aligned with business and IT requirements.
|
•
|
$181.0 million for general corporate purposes, including working capital and operating expenses. We may also use a portion of such proceeds to acquire or invest in businesses, products, services or technologies, however, we do not have binding agreements or commitments for any material acquisitions or investments at this time.
|
•
|
$140.3 million to purchase an aggregate of 7,894,735 shares of our common stock (or $189.3 million to purchase 10,657,892 shares if the underwriters exercise their over-allotment option in full), some of which will result from the settlement of certain vested RSUs and the exercise of certain options in connection with this offering, from the Stock Repurchase Parties at the initial public offering price less the underwriting discounts and commissions.
|
•
|
on an actual basis;
|
•
|
on a pro forma basis to give effect to (i) the filing and effectiveness of our amended and restated certificate of incorporation in Delaware immediately prior to the closing of this offering, (ii) an increase to additional paid-in capital and accumulated deficit related to stock-based compensation expense of $35.4 million associated with the RSUs for which the service-based vesting condition was satisfied as of December 31, 2020 and for which the liquidity event-related performance vesting condition will be satisfied in connection with this offering, in each case as if such event had occurred on December 31, 2020 and (iii) the Forward Stock Split; and
|
•
|
on a pro forma as adjusted basis to give effect to the adjustments described in the preceding clause and to reflect (i) the issuance and sale of 18,421,053 shares of common stock in this offering at an assumed initial public offering price of $19.00 per share of common stock, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us and (ii) the Stock Repurchase.
|
|
| |
As of December 31, 2020
|
||||||
|
| |
Actual
|
| |
Pro Forma
|
| |
Pro Forma As
Adjusted
|
|
| |
(dollars in thousands)
|
||||||
Cash and restricted cash
|
| |
$33,373
|
| |
$33,373
|
| |
$215,589
|
Debt:
|
| |
|
| |
|
| |
|
Line of credit
|
| |
$1,000
|
| |
$1,000
|
| |
$1,000
|
Paycheck Protection Program loan
|
| |
784
|
| |
784
|
| |
784
|
Total debt
|
| |
1,784
|
| |
1,784
|
| |
1,784
|
Stockholders’ equity (deficit):
|
| |
|
| |
|
| |
|
Common stock, par value $0.0001 per share: 12,000,000 shares authorized, 8,022,066 shares issued and outstanding on an actual basis, 98,960,060 shares authorized, 66,155,328 shares issued and outstanding on a pro forma basis, 98,960,060 shares authorized, 80,907,007 shares issued and outstanding on a pro forma as adjusted basis
|
| |
1
|
| |
7
|
| |
9
|
Additional paid-in capital
|
| |
50,096
|
| |
85,446
|
| |
266,520
|
Accumulated other comprehensive loss
|
| |
(3)
|
| |
(3)
|
| |
(3)
|
Accumulated deficit
|
| |
(42,643)
|
| |
(77,999)
|
| |
(77,999)
|
Total stockholders’ equity (deficit)
|
| |
7,451
|
| |
7,451
|
| |
188,527
|
Total capitalization
|
| |
$9,235
|
| |
$9,235
|
| |
$190,311
|
Assumed initial public offering price per share of common stock
|
| |
|
| |
$19.00
|
Pro forma net tangible book value per share of common stock as of December 31, 2020
|
| |
$0.11
|
| |
|
Increase in pro forma net tangible book value per share of common stock attributable to investors in this offering
|
| |
$2.22
|
| |
|
Pro forma as adjusted net tangible book value per share of common stock after giving effect to this offering
|
| |
|
| |
2.33
|
Dilution in pro forma as adjusted net tangible book value per share of common stock to new investors in this offering
|
| |
|
| |
$16.67
|
|
| |
Shares Purchased
|
| |
Total Consideration
|
| |
Average
Price Per
Share
|
||||||
|
| |
Number
|
| |
Percent
|
| |
Amount
|
| |
Percent
|
| ||
Existing stockholders
|
| |
62,485,954
|
| |
77%
|
| |
$37,781
|
| |
10%
|
| |
$0.60
|
New investors
|
| |
18,421,053
|
| |
23
|
| |
350,000
|
| |
90
|
| |
19.00
|
Total
|
| |
80,907,007
|
| |
100%
|
| |
$387,781
|
| |
100%
|
| |
$4.79
|
|
| |
Years Ended
December 31,
|
|||
|
| |
2019
|
| |
2020
|
|
| |
(in thousands)
|
|||
Net loss
|
| |
$(13,495)
|
| |
$(15,924)
|
Income tax benefit
|
| |
(39)
|
| |
(83)
|
Interest expense, net(a)
|
| |
454
|
| |
480
|
Depreciation expense
|
| |
12
|
| |
13
|
Amortization of intangibles(b)
|
| |
400
|
| |
33
|
Stock-based compensation(c)
|
| |
906
|
| |
1,818
|
Loss (Income) from unconsolidated subsidiary(d)
|
| |
709
|
| |
(1,399)
|
Adjusted EBITDA
|
| |
$(11,053)
|
| |
$(15,062)
|
(a)
|
Represents interest expense, annual amortization of debt issuance cost and loss on debt extinguishment in connection with our Secured Promissory Notes, and a revolving line of credit with Western Alliance Bank. See “Non-Operating Expenses and Other Items—Interest Expense” below
|
(b)
|
Represents amortization expense related to developed technology.
|
(c)
|
Represents stock-based compensation expense. See “Executive and Director Compensation.”
|
(d)
|
Represents results of an entity that we do not consolidate, as our management excludes these results when evaluating our operating performance.
|
|
| |
Years Ended
December 31,
|
|||||||||
|
| |
2019
|
| |
2020
|
||||||
|
| |
Loss
|
| |
EPS
|
| |
Loss
|
| |
EPS
|
|
| |
(in thousands, except per share data)
|
|||||||||
Net loss and EPS
|
| |
$(13,495)
|
| |
(1.79)
|
| |
$(15,924)
|
| |
(1.91)
|
Amortization of intangibles
|
| |
400
|
| |
0.05
|
| |
33
|
| |
—
|
Stock-based compensation
|
| |
906
|
| |
0.12
|
| |
1,818
|
| |
0.22
|
Loss (Income) from unconsolidated subsidiary
|
| |
709
|
| |
0.09
|
| |
(1,399)
|
| |
(0.17)
|
Income tax expense of adjustments(a)
|
| |
3
|
| |
—
|
| |
(3)
|
| |
—
|
Adjusted Net Loss and Adjusted EPS
|
| |
$(11,477)
|
| |
(1.53)
|
| |
$(15,475)
|
| |
(1.86)
|
Adjusted effective tax rate(b)
|
| |
0.36%
|
| |
|
| |
0.50%
|
| |
|
(a)
|
Represents incremental tax expense of adjustments assuming the adjusted effective tax rate.
|
(b)
|
Represents the adjusted effective tax rate for the periods presented. For the year ended December 31, 2019, the effective tax increased by 0.07% to 0.36% and for the year ended December 31, 2020, the effective tax rate of 0.36% was increased by 0.14% to 0.50%. The increases were due to the impact of adjustments made for loss (income) from unconsolidated subsidiary.
|
|
| |
Years Ended
December 31,
|
|||
|
| |
2019
|
| |
2020
|
|
| |
(dollars in thousands, except per share data)
|
|||
Revenue:
|
| |
|
| |
|
Product revenue
|
| |
$43,085
|
| |
$158,925
|
Service revenue
|
| |
10,039
|
| |
28,427
|
Total revenue
|
| |
53,124
|
| |
187,352
|
Cost of Revenue
|
| |
|
| |
|
Product cost of revenue
|
| |
44,212
|
| |
155,967
|
Service cost of revenue
|
| |
10,863
|
| |
27,746
|
Total cost of revenue
|
| |
55,075
|
| |
183,713
|
Gross (loss) profit
|
| |
(1,951)
|
| |
3,639
|
Operating expenses
|
| |
|
| |
|
Research and development(a)
|
| |
3,960
|
| |
5,222
|
Selling and marketing(a)
|
| |
1,897
|
| |
3,545
|
General and administrative(a)
|
| |
4,563
|
| |
11,798
|
Total operating expenses
|
| |
10,420
|
| |
20,565
|
Loss from operations
|
| |
(12,371)
|
| |
(16,926)
|
Interest expense, net
|
| |
454
|
| |
480
|
Loss before income taxes
|
| |
(12,825)
|
| |
(17,406)
|
Benefit from income taxes
|
| |
(39)
|
| |
(83)
|
Loss (Income) from unconsolidated subsidiary
|
| |
709
|
| |
(1,399)
|
Net loss
|
| |
$(13,495)
|
| |
$(15,924)
|
|
| |
|
| |
|
Non-GAAP Measures
|
| |
|
| |
|
Adjusted EBITDA
|
| |
$(11,053)
|
| |
$(15,062)
|
Adjusted Net Loss
|
| |
$(11,477)
|
| |
$(15,475)
|
Adjusted EPS
|
| |
$(1.53)
|
| |
$(1.86)
|
(a)
|
Includes stock-based compensation expense as follows:
|
|
| |
Years Ended
December 31,
|
|||
|
| |
2019
|
| |
2020
|
Cost of revenue
|
| |
$176
|
| |
$322
|
Research and development
|
| |
51
|
| |
57
|
Selling and marketing
|
| |
26
|
| |
38
|
General and administrative
|
| |
653
|
| |
1,401
|
Total stock-based compensation expense
|
| |
$906
|
| |
$1,818
|
|
| |
Years Ended
December 31,
|
| |
|
| |
|
|||
|
| |
2019
|
| |
2020
|
| |
$ Change
|
| |
% Change
|
|
| |
(dollars in thousands)
|
| |
|
| |
|
|||
Product revenue
|
| |
$43,085
|
| |
$158,925
|
| |
$115,840
|
| |
269%
|
|
| |
Years Ended
December 31,
|
| |
|
| |
|
|||
|
| |
2019
|
| |
2020
|
| |
$ Change
|
| |
% Change
|
|
| |
(dollars in thousands)
|
| |
|
| |
|
|||
Service revenue
|
| |
$10,039
|
| |
$28,427
|
| |
$18,388
|
| |
183%
|
|
| |
Years Ended
December 31,
|
| |
|
| |
|
|||
|
| |
2019
|
| |
2020
|
| |
$ Change
|
| |
% Change
|
|
| |
(dollars in thousands)
|
| |
|
| |
|
|||
Product cost of revenue
|
| |
$44,212
|
| |
$155,967
|
| |
$111,755
|
| |
253%
|
Service cost of revenue
|
| |
10,863
|
| |
27,746
|
| |
16,883
|
| |
155%
|
Total cost of revenue
|
| |
$55,075
|
| |
$183,713
|
| |
$128,638
|
| |
234%
|
Gross (loss) profit
|
| |
(1,951)
|
| |
3,639
|
| |
5,590
|
| |
287%
|
Gross margin
|
| |
(4)%
|
| |
2%
|
| |
|
| |
|
|
| |
Years Ended
December 31,
|
| |
|
| |
|
|||
|
| |
2019
|
| |
2020
|
| |
$ Change
|
| |
% Change
|
|
| |
(dollars in thousands)
|
| |
|
| |
|
|||
Research and development
|
| |
$3,960
|
| |
$5,222
|
| |
$1,262
|
| |
32%
|
|
| |
Years Ended
December 31,
|
| |
|
| |
|
|||
|
| |
2019
|
| |
2020
|
| |
$ Change
|
| |
% Change
|
|
| |
(dollars in thousands)
|
| |
|
| |
|
|||
Selling and marketing
|
| |
$1,897
|
| |
$3,545
|
| |
$1,648
|
| |
87%
|
|
| |
Years Ended
December 31,
|
| |
|
| |
|
|||
|
| |
2019
|
| |
2020
|
| |
$ Change
|
| |
% Change
|
|
| |
(dollars in thousands)
|
| |
|
| |
|
|||
General and administrative
|
| |
$4,563
|
| |
$11,798
|
| |
$7,235
|
| |
159%
|
|
| |
Years Ended
December 31,
|
| |
|
| |
|
|||
|
| |
2019
|
| |
2020
|
| |
$ Change
|
| |
% Change
|
|
| |
(dollars in thousands)
|
| |
|
| |
|
|||
Interest expense, net
|
| |
$454
|
| |
$480
|
| |
$26
|
| |
6%
|
|
| |
Years Ended
December 31,
|
| |
|
| |
|
|||
|
| |
2019
|
| |
2020
|
| |
$ Change
|
| |
% Change
|
|
| |
(dollars in thousands)
|
| |
|
| |
|
|||
Loss (Income) from unconsolidated subsidiary
|
| |
$709
|
| |
$(1,399)
|
| |
$(2,108)
|
| |
(297)%
|
|
| |
Years Ended
December 31,
|
| |
|
| |
|
|||
|
| |
2019
|
| |
2020
|
| |
$ Change
|
| |
% Change
|
|
| |
(dollars in thousands)
|
| |
|
| |
|
|||
Net loss
|
| |
$(13,495)
|
| |
$(15,924)
|
| |
$(2,429)
|
| |
18%
|
|
| |
Years Ended
December 31,
|
|||
|
| |
2019
|
| |
2020
|
|
| |
(in thousands)
|
|||
Net cash used in operating activities
|
| |
$(254)
|
| |
$(511)
|
Net cash (used in) provided by investing activities
|
| |
(18)
|
| |
1,868
|
Net cash provided by financing activities
|
| |
7,000
|
| |
23,784
|
Effect on exchange rate changes on cash and restricted cash
|
| |
—
|
| |
(3)
|
Increase in cash and restricted cash
|
| |
$ 6,728
|
| |
$25,138
|
•
|
contemporaneous third party valuations of our common stock;
|
•
|
the prices at which we or other holders sold our common stock to outside investors in arms-length transactions;
|
•
|
our financial condition, results of operations and capital resources;
|
•
|
the industry outlook;
|
•
|
the fact that option and restricted stock awards involve rights in illiquid securities in a private company;
|
•
|
the valuation of comparable companies;
|
•
|
the lack of marketability of our common stock;
|
•
|
the likelihood of achieving a liquidity event, such as an initial public offering or a sale of our company given prevailing market conditions;
|
•
|
the history and nature of our business, industry trends and competitive environment; and
|
•
|
general economic outlook including economic growth, inflation, unemployment, interest rate environment and global economic trends.
|
•
|
Cost Competitiveness with Fossil-Fuel Energy Generation. Solar energy is currently one of the cheapest sources of new-build power generation, on an LCOE basis, in countries that account for approximately two-thirds of the global population and is forecasted to continue decreasing in cost to become the cheapest form of wholesale electric generation in the United States by 2022, according to BNEF. Cost reductions have been driven by technological innovation and engineering advancements. For example, solar panel manufacturers have successfully developed higher capacity, more highly-efficient solar panels. Solar energy projects that utilize tracker technology are particularly cost competitive relative to fossil fuels.
|
•
|
Governmental Policies and Regulations Across the Globe Supporting Renewable Energy. Governments across the globe have established policies to support a transition away from fossil fuels and towards low-carbon forms of energy, such as solar power. In the United States, for example, 30 states and the District of Columbia have implemented RPSs, which require a specified percentage of the electricity sold by utilities to come from renewable resources by a certain date. While some state targets are between 10% and 45%, 14 states have targets of 50% or greater, according to the U.S. National Conference of State Legislatures. The U.S. ITC program, a federal tax incentive that benefits solar projects, provides an additional layer of government support. The ITC’s 26% tax credit rate was extended for two years under the Consolidated Appropriations Act, 2021. Feed-in-tariffs, which pay owners of renewable energy systems a certain amount per unit of electricity they generate and provide to the grid, is a common form of incentive outside of the United States. Additionally, many countries globally have corporate income tax regulations that provide a preferential tax rate for income from investment in the production of renewable energy. Global renewable energy support has accelerated since the Paris Agreement under the United Nations Framework Convention on Climate Change, which became effective in 2016.
|
•
|
Corporate Procurement of Renewable Energy. Companies across a variety of industries have become increasingly focused on the climate impact of their operations and have sought ways to lower their carbon footprints. For example, over 1,000 companies around the world have committed to or already set science-based greenhouse gas emissions targets in accordance with the goals of the Paris Agreement, according to The Science Based Targets initiative. Over 300 of these companies have committed to setting targets to limit global temperature rise to 1.5°C above pre-industrial levels and reach net-zero carbon emissions by 2050, in accordance with the Paris Agreement’s most ambitious goals. Since fossil fuel-based energy generation is one of the main sources of corporate greenhouse gas emissions, shifting to renewable energy is a primary way for companies to reduce their carbon emissions and achieve such targets. For example, in September 2019, Amazon created The Climate Pledge, which includes a commitment to achieve net-zero carbon emissions across Amazon’s business by 2040 and a commitment to power Amazon’s operations with 100% renewable energy by 2025.
|
•
|
Improvement in Battery Storage Technology. One challenge to even faster adoption of solar energy technology is that it is an intermittent power source, because solar power can only be generated during the hours of the day when sunlight is available. Recent advances in technology and cost reductions have helped battery storage emerge as a solution to the intermittent nature of solar power. The cumulative installed capacity of energy storage projects is expected to increase from 11 GW in 2020 to 168 GW in 2030, according to BNEF NEO. This growth is supported by declines in the prices of lithium-ion batteries, which have fallen by approximately 80% over the last five years, according to the U.S. Department of Energy. The ability of battery technology to convert solar energy to a baseload form of power is expected to establish solar energy as a firm, reliable source of power, increasing overall demand for solar energy.
|
•
|
Continued Development of Newly-Renewable Use Cases. The increased cost competitiveness of electricity is driving new sectors of the economy to switch from fossil fuels to electricity as their source of energy, such as passenger and commercial vehicles, and heating and industrial processes. This is expected to lead to increased demand for electricity, which should benefit the solar energy industry as one of the lowest-cost sources of power production. The shift of new sectors toward solar energy is also expected to provide public health benefits, as pollutants, such as carbon dioxide, created from the use of fossil fuels, are reduced. The realization of these benefits should serve to accelerate the trend toward renewable energy sources, which should in turn increase the demand for solar energy.
|
•
|
Increased Capital Available for Green Investments. Environmental responsibility has become a priority for investors, demonstrated by a meaningful trend in allocation of capital to companies that are leading and committed to the energy transition from fossil fuels to low-carbon alternatives. The growing emphasis on Environmental, Social and Governance (“ESG”) principles is one example of the increase in investor commitment to sustainable business practices. In the United States, total assets under management that are allocated using sustainable investing strategies (including ESG screening) grew from $12.0 trillion at the start of 2018 to $17.1 trillion at the start of 2020, an increase of 42%, according to a 2020 SIF report. In January 2020, the world’s largest asset manager, BlackRock, announced in a letter to clients that it would place sustainability, particularly with respect to global warming, at the center of how it “manages risk, constructs portfolios, designs products, and engages with companies.”
|
•
|
Axis Design and Row Design. Single-axis trackers rotate across one axis, while dual-axis trackers rotate across two axes. Dual-axis trackers, however, have a higher degree of mechanical complexity, making them more expensive and requiring more maintenance over their installed lifetime.
|
•
|
Panel Size. Solar panel manufacturers have begun to produce larger solar cell arrangement, or wafer, sizes (with diameters of 182mm and 210mm in particular) as a result of technological advancements driving individual solar cell efficiency. These larger wafer sizes have resulted in the production of solar panels that are larger, heavier, higher wattage and lower cost. With a gain in energy production per panel of up to 30% in some instances due to the size increase, larger-format panels are expected to represent approximately 85% of the solar energy market by 2024, according to a 2020 PV InfoLink Report.
|
•
|
Panel Configuration. The traditional one-panel in-portrait tracker design has one row of panels in portrait orientation, supported by a rotating axis in the middle of the row. The alternative two-panel in-portrait tracker design has two adjacent rows of panels in portrait orientation, supported by a rotating axis between the rows. With two panels in each row as opposed to one, two-panel in-portrait tracker designs provide increased panel density and have a larger overall surface area, capturing more sunlight. Additionally, two-panel in-portrait tracker systems capture more diffuse light due to their increased height and have higher panel performance from the reduced impact of radiant ground heat. The two-panel in-portrait tracker design has increased its market share in the tracker space in recent years, representing approximately 21% of total tracker shipments in 2019, according to a 2020 Wood Mackenzie report. Between 2016 and 2019, we estimate that two-panel in-portrait installations grew three times faster than one-panel in-portrait installations, according to a combination of Wood Mackenzie data and our internal data.
|
•
|
Industry-Leading Installation Speed and Low Labor Costs. Voyager requires up to 56% fewer foundations per MW than other competing solutions, or only seven structural foundations, or piles, per row. This results in 15% less steel content in projects using our system. Voyager also utilizes (i) simplified assembly methods that require fewer tools and up to 45% fewer connection points between piles than competing solutions and (ii) our patented panel hanging and self-alignment features, which together result in industry-leading installation speeds. In a study we commissioned in 2020, Eclipse-M, a nationally-recognized construction management consultant, found that Voyager’s installation time is 211 person-hours per MW, a reduction of 41% compared to the industry average of 355 person-hours per MW for the trackers of our leading competitors that were evaluated in the study. In the United States, Australia and parts of Europe, we estimate that this reduced installation time, together with EPC contractors’ savings on materials due to our design methodologies (which are applicable to all sales markets), can result in 1.5-2.0 cents per watt of cost savings as compared to industry-leading one-panel in-portrait and two-panel in-portrait competitors. As such, on a 50 MW system in the United States, this could represent up to $1 million of project savings. We intend to continue to improve on this competitive advantage by further reducing our installation times, as well as installation cost. For example, in 2020, we reduced the installation time of our products by 32% from 2019 and we believe there is an opportunity to further reduce our customers' average installation cost through additional product innovation and installation technique improvements. Faster installation times are an increasingly impactful competitive advantage, as labor is a significant and growing contributor to total solar energy project costs, increasing from 22% in 2015 to 35% for standard 10 MW tracker projects in 2020 (over this same period, equipment costs have decreased from representing 66% to 51% of total costs of these projects), according to a 2020 Wood Mackenzie report. While independent row trackers are typically more expensive due to the higher-technology equipment required for their operation, we believe our independent row design offsets these higher fixed costs with lower installation cost and increased energy production.
|
•
|
Design Flexibility that Optimizes Solar Panel Density. Voyager has a typical row length of 60 meters, compared to the significantly longer row lengths of some of our competitors’ systems, providing relative site design flexibility. Additionally, the two-panel in-portrait design of Voyager provides twice the number of solar panels across a given length of row compared to one-panel in-portrait systems. This increased panel density allows for greater design flexibility on sites with irregular boundaries, maximizes the use of available land and helps to preserve site environment. We believe these features, combined with the slope and terrain flexibility of Voyager, will be increasingly advantageous moving forward as an increasing percentage of solar projects are developed on sites with irregular boundaries and undulating terrain. Additionally, two-panel in-portrait systems capture more diffuse light due to their increased height as compared to one-panel in-portrait systems, and have higher panel performance from the reduced impact of radiant ground heat.
|
•
|
Slope and Terrain Flexibility. Our independent row design allows for simplified installation on undulating terrain and irregular site boundaries. With no connection point between sequential rows, unlike linked-row systems, each Voyager row can be positioned without consideration of adjacent rows, enabling optimized row configuration. Additionally, Voyager’s adjustable design mounting allows for installation on terrain with slopes of up to 17.5% grade. This deployment flexibility allows Voyager to maximize solar energy production on sloped terrain while avoiding high grading costs, and our customers have the opportunity to enhance such benefits through the use of our SunPath tracking algorithm that reduces row-to-row shading.
|
•
|
Structural Design that Optimizes Bifacial Panel Yield. Bifacial panels collect solar energy from both sides of the solar panel, resulting in up to a 9% gain in energy production compared with monofacial panels, according to an ongoing study by NREL. This efficiency improvement over traditional solar panels is driving a significant market shift to the use of bifacial panels, with bifacial panels expected to account for 17% of total installed solar capacity by 2024, quadrupling its share in 2019, according to a 2019 Wood Mackenzie report. We believe Voyager improves bifacial panel yield as compared to one-panel in-portrait systems by approximately 2% due to its structural design that minimizes rear side shading, increases rear side irradiance and improves thermal performance.
|
•
|
DC Collections Advantages. In utility-scale solar projects, individual solar panels are wired in series into strings of solar panels, which typically consist of approximately 30 individual solar panels per string. Voyager can support four strings of panels per row versus the more common single-axis structure that only supports three strings of panels per row. This four string architecture allows for approximately 25% less DC cabling to collect the power from each row, which we believe results in cost savings on materials and labor. In addition, the symmetric four string Voyager architecture isolates strings of panels into four quadrants on the tracker row, with two strings of panels on the east side of the torque tube and two strings of panels on the west side of the torque tube. This symmetric four string architecture allows projects using Voyager to observe significantly less mismatch loss for bifacial panels compared to projects using (i) one-panel in-portrait single-axis trackers or (ii) two-panel in-portrait three string trackers that cannot isolate strings of panels onto a single side of the tracker. We believe Voyager’s reduction in mismatch loss for bifacial panels provides a significant energy production advantage compared to other trackers.
|
•
|
Site Accessibility. Our two-panel in-portrait architecture maximizes row spacing and allows improved site access for operations and maintenance of the solar energy project or the grounds on which the project is sited. For an equivalent panel density or ground coverage ratio, Voyager provides twice the spacing between rows compared to one-panel in-portrait systems. This increased, open row spacing allows for vehicle access even in the most dense system layouts. Additionally, unlike linked-row systems, our design has no physical barriers that prevent movement between rows, such as movement undertaken during routine ground maintenance, which is important to maintain energy yields from the rear facing panel of bifacial solar panels.
|
•
|
Performance-Enhancing Software Solution. Voyager uses a motor and slew drive on each row to continuously align the solar panels to the sun through the use of our baseline, proprietary solar tracking algorithm. Our customers also have the option to license our premium performance-enhancing software solution, SunPath, through either recurring payments or a single up-front payment. SunPath uses proprietary algorithms that take into consideration topography, meteorological conditions and other local site conditions to reduce shading on every row and adjust panel positioning to address diffused light conditions (e.g. cloud cover), which results in optimized tracking and solar energy generation. Depending on the dynamics of a specific site and the algorithms utilized, our internal simulations have demonstrated that the SunPath software solution can produce up to an additional 6% energy yield advantage over our base-model Voyager Trackers. Our SunPath software solution was released in the fourth quarter of 2020 and is backward compatible with all previously installed Voyager systems.
|
•
|
Market and Product Positioning. In designing Voyager, we sought to introduce a solution that is differentiated from existing industry solutions and positioned to address the future needs of the solar industry as it continues to develop. In addition to benefitting from the growth in solar energy and the increasing penetration of trackers, we believe we are positioned to benefit from the accelerating adoption of two-panel in-portrait tracker systems, bifacial panels and larger-format or higher-powered bifacial panels. Our two-panel in-portrait solutions are already optimized for bifacial panels. In 2020, we introduced our first Voyager solution designed for the new larger-format panels entering the marketplace and were awarded one of the world’s first larger-format panel projects.
|
•
|
Management Team with Extensive Renewable Energy Industry Experience. Our management team has global experience across the full solar energy project lifecycle, including project development, finance, equipment supply, construction and operations. Since 2013, our management team has spearheaded the design and delivery of more than 2.7 GW of single-axis tracker equipment, attributable to both the AP90 tracker (and its predecessor product) and Voyager. Our management team’s experience beyond these products includes the development, financing and construction of more than 5.5 GW of utility-scale solar energy projects.
|
•
|
Multi-Region, Asset-Light Contract Manufacturing Model. Voyager is manufactured through proven and certified contract manufacturing partners. This allows us to scale to meet growing customer demand without intensive capital investment, leading to strong cash flow conversion, all while ensuring the high
|
•
|
Focus on Product Improvement and Technology Innovation. Voyager offers proprietary architecture advances that lower installation cost and improve operational performance. Our management team has a demonstrated history of driving cost reductions through design innovations, such as our patented fast attach panel installation features that reduce labor requirements and complexity. These innovations help us deliver additional value to our customers and improve our competitive positioning. Additionally, we leverage innovative forecasting and modeling platforms and methods to optimize project yield.
|
•
|
Flexible Capital Structure. We have been able to grow our company without the use of long-term debt as a result of our asset-light contract manufacturing model and by leveraging operating efficiencies. Because we have prudently operated our business since our inception, we have significant capital structure flexibility with which to fund our future growth at an attractive cost of capital. We ended 2020 with a positive net cash position and no long-term debt.
|
•
|
Engineering Services Offerings. Voyager is augmented by our engineering services offerings that assist customers in optimizing our product and reducing total project costs. The engineering services we offer include power plant design services for array layout and electrical design as well as structural and foundation design, and construction engineering consulting services focused on improving productivity and reducing installation times. In the United States, we provided preliminary design services, including array layout, DC collections and energy modeling, for a leading fully-integrated utility-scale solar developer on their portfolio of projects, which has helped to generate further sales of Voyager Trackers to this customer. In emerging markets, these services can provide assistance to less experienced project developers and EPC contractors in their transition from fixed-tilt projects to tracker projects by removing the design barrier. For example, in Vietnam, we provided design services and construction management on-site consulting to a Vietnamese developer for its first two solar sites.
|
•
|
Value-Added Project Management Software. In addition to SunPath, our software that is designed to increase energy production from Voyager, we offer two other software solutions to support our customers in project design and development. The project management software solutions can be coupled with Voyager, but can also be utilized by non-Voyager customers. Our software licensing model also provides additional opportunities for engagement and service, which strengthen customer relationships. Our software offering consists of:
|
○
|
Atlas. Our Atlas software solution provides project developers and solar asset owners with a “one-stop” solution to manage all solar energy projects on a centralized platform. Atlas is a web-based, enterprise-level database that allows users to manage their project portfolio. Atlas includes project management, financial reporting and data management services that enable clear and consistent project execution from early-stage development through commercial operations.
|
○
|
SunDAT. Our SunDAT software solution enables automated design and optimization of solar panel systems across residential, commercial and utility-scale sites. SunDAT optimizes system layout, equipment hierarchy and energy output based on local site constraints.
|
•
|
Increasing Our Market Share in the United States. From the first installation of Voyager in the third quarter of 2019, we have quickly built a strong track record of innovative design, construction efficiency and customer engagement. As of December 31, 2020, we had an estimated U.S. tracker market share of approximately 11%, which was calculated using our MW shipped for fiscal year 2020 compared to a total tracker market shipment estimate from a 2020 Wood Mackenzie report. We plan to leverage Voyager’s strong value proposition to transition from predominantly contracts for sales for single projects to a mix of such single project sales and contracts for sales for multiple projects with project developers, solar asset owners and EPC contractors. We expect to continue to increase our market share in the United States by leveraging our competitive advantages and building upon the strength of our existing customer relationships and our additional relationships within the solar energy industry.
|
•
|
Expanding Internationally. We believe there is a significant opportunity for us to penetrate additional markets outside of the United States. International markets are experiencing the same benefits from, and trend towards adoption of, trackers as seen in the United States, and represent further upside potential, as these markets have lower tracker penetration today. Cumulative installed capacity outside of the United States is expected to reach approximately 1.7 TW in 2025, up from 775 GW in 2019, according to BNEF NEO. In 2020, we established sales and marketing operations in Asia, the Middle East, North Africa and Australia, and we expect to continue to expand our global footprint in 2021 by establishing similar operations in Latin America and Europe. In addition to our strong product offerings, we believe our growing track record and strong customer relationships will aid our international expansion efforts.
|
•
|
Enhancing Our Product Capability. We believe that Voyager is well-positioned to continue to adapt to evolving changes in panel technology because it has been engineered to be panel agnostic and designed to be flexible to form. We are intensely focused on continuing to enhance our product performance and positioning. Our initial version of Voyager was marketed for inclusion in projects in regions with maximum wind speeds of 105 mph. Throughout 2020, we have released and contracted to sell two additional versions of Voyager that are marketed for inclusion in projects in regions with maximum wind speeds of both 120 mph and 135 mph, according to a 2019 Black & Veatch report. We expect continued growth in sales of these additional versions of Voyager as solar energy projects are increasingly being constructed in coastal regions that have higher wind speeds. In addition, panel manufacturers continue to advance the efficiency of solar panels through design and manufacturing changes, including, in particular, in the form of bifacial panels and larger-format panels. In 2020, we released Voyager+, our next generation single-axis Voyager Tracker, which is compatible with larger-format panels from a variety of solar panel manufacturers and can incorporate larger solar cells, allowing for increased energy production. We were also awarded one of the world’s first larger-format panel projects.
|
•
|
Reducing Operating Costs through Operating Leverage. Throughout 2020, we added 118 employees, predominantly in operations and support as well as in general and administrative capacities, as part of the preparation for our expected expansion in the United States and abroad, as well as to facilitate our operations as a public company following this offering. We have historically prioritized establishing operations in the United States to support the growth we have achieved to date. We expect a significant portion of our incremental headcount additions moving forward to be lower-cost employees to support increased sales (such as field service employees), and expect future growth in sales employees to be focused on lower-cost regions, such as Asia. Approximately 40% of our headcount is currently in lower-cost regions outside of the United States and we expect that figure to grow due to both international market penetration as well as back-office support being increasingly located in those areas. We believe that the scalable nature of our corporate workforce, combined with our focus on hiring employees in lower-cost regions in the future, will provide us with operating efficiencies that will enable us to enhance our profitability as we grow.
|
•
|
Capturing Additional Revenue Streams through Software Services. We believe that our add-on SunPath software, with performance-enhancing algorithms, has the potential to provide significant
|
•
|
Developing Additional Tracker Services. We believe we have additional opportunities to differentiate ourselves as a solar energy solutions provider to our customers through the introduction of a targeted set of offerings beyond sales of Voyager. Similar to our SunPath software solution that was released in the fourth quarter of 2020, we have the ability to introduce hardware and software upgrades and retrofits as well as preventative maintenance services and extended warranty plans, each of which we believe can generate high margin, recurring revenue that also strengthens customer relationships.
|
•
|
Growing through Strategic Acquisitions. We believe that our strong balance sheet affords us the opportunity to access the capital markets on favorable terms, which in turn gives us the option to accelerate our growth through strategic acquisitions. We continue to investigate related products, technologies, software and services to further diversify our platform through strategic acquisitions. While the supply of tracker equipment and software services for solar energy projects will remain our core focus, we may explore additional offerings that add value to our customers and deepen our relationships.
|
•
|
Terrain-Based Tracking. This feature enables Voyager to reduce shading on sloped terrain sites during morning and afternoon backtracking. Elevation data is captured by a drone survey during site commissioning and then stored within each Voyager Tracker that utilizes the SunPath software. Using elevation information for each row in the tracker system allows this algorithm to calculate the daily setpoint angles to minimize row-to-row shading and maximize energy output.
|
•
|
Diffuse Light Optimization. This feature enables Voyager to maximize energy yield during diffuse light conditions created by elements such as clouds, fog, smoke and sand. Typically, trackers try to angle themselves as close to perpendicular to the sun’s position as possible, but during diffuse light conditions, it is advantageous to position the tracker at a flatter or lower angle. This algorithm uses short-term irradiance forecasts based on satellite imagery to determine when a diffuse light condition will exist, and then positions Voyager Trackers that utilize the SunPath software at the angle that maximizes energy output. Our method is unique because it is a purely software-driven optimization with no reliance on on-site sensors that require regular maintenance and cleaning.
|
•
|
Contract Manufacturers. All Voyager components are built to our specification. Based on set criteria, we select contract manufacturers from countries around the world that are well versed in component engineering and change management and stand behind their craftsmanship by providing warranties on defects to support the warranties we provide to our customers. As of December 31, 2020, we had 31 manufacturing partners across 12 countries. Our contract manufacturers undergo a rigorous and continuous qualification process to remain on our approved vendor list, including an evaluation of their business practices. We verify that our contract manufacturers are ISO certified for ISO 14001:2015 (environmental management system certification), ISO 9001:2015 (quality management system certification) and ISO 45001:2018 (occupational health and safety management certification). We also perform due diligence to confirm that our contract manufacturers are in compliance with the FCPA and applicable child labor laws.
|
•
|
Logistics. We select our logistics providers based on similar criteria that we use to select our contract manufacturers. We partner with a leading global third party logistics provider to support our logistic operations. This partnership allows us to develop flexible delivery plans that can accommodate the specific site and construction needs of our customers.
|
•
|
Capacity. We maintain supply source redundancy to help protect our customers from disruptive risks. We have sized our supply chain to meet the variability and seasonality of our customers and industry. We currently have eight GW of annualized supply capacity and seek to deliver a 100% tariff-free solution to our U.S. customers by sourcing supply from qualified manufacturers that are located outside tariff zones and who satisfy our qualification specifications.
|
Name
|
| |
Age
|
| |
Position
|
Anthony P. Etnyre
|
| |
51
|
| |
President and Chief Executive Officer, Director
|
Patrick M. Cook
|
| |
37
|
| |
Chief Financial Officer and Treasurer
|
Deepak Navnith
|
| |
47
|
| |
Chief Operations Officer
|
Nagendra Cherukupalli
|
| |
61
|
| |
Chief Technology Officer
|
Ali Mortazavi
|
| |
61
|
| |
Executive Vice President, Global Sales and Marketing
|
Jay B. Grover
|
| |
59
|
| |
Vice President, Supply Chain
|
Kristian Nolde
|
| |
44
|
| |
Vice President, Marketing and Strategy
|
Thurman J. “T.J.” Rodgers
|
| |
72
|
| |
Chairman of the Board
|
David Springer
|
| |
52
|
| |
Director
|
Ahmad Chatila
|
| |
53
|
| |
Director
|
William Aldeen (“Dean”) Priddy, Jr.
|
| |
60
|
| |
Director
|
Isidoro Quiroga Cortés
|
| |
33
|
| |
Director
|
Shaker Sadasivam
|
| |
60
|
| |
Director
|
Lisan Hung
|
| |
52
|
| |
Director
|
•
|
the Class I directors will be Isidoro Quiroga Cortés, David Springer and Thurman J. “T.J.” Rodgers and their initial terms will expire at the annual meeting of stockholders to be held in 2022;
|
•
|
the Class II directors will be Shaker Sadasivam and Anthony P. Etnyre and their initial terms will expire at the annual meeting of stockholders to be held in 2023; and
|
•
|
the Class III directors will be Ahmad Chatila, William Aldeen (“Dean”) Priddy, Jr. and Lisan Hung and their initial terms will expire at the annual meeting of stockholders to be held in 2024.
|
•
|
personal and professional integrity;
|
•
|
ethics and values;
|
•
|
experience in corporate management, such as serving as an officer or former officer of a publicly held company;
|
•
|
experience in the industries in which we compete;
|
•
|
experience as a board member or executive officer of another publicly held company;
|
•
|
diversity of background and expertise and experience in substantive matters pertaining to our business relative to other board members;
|
•
|
conflicts of interest; and
|
•
|
practical and mature business judgment.
|
•
|
selecting and hiring our independent auditors, and approving the audit and non-audit services to be performed by our independent auditors;
|
•
|
assisting the board of directors in evaluating the qualifications, performance and independence of our independent auditors;
|
•
|
assisting the board of directors in monitoring the quality and integrity of our financial statements and our accounting and financial reporting;
|
•
|
assisting the board of directors in monitoring our compliance with legal and regulatory requirements;
|
•
|
reviewing with management and our independent auditors the adequacy and effectiveness of our internal controls over financial reporting processes;
|
•
|
assisting the board of directors in monitoring the performance of our internal audit function;
|
•
|
reviewing with management and our independent auditors our annual and quarterly financial statements;
|
•
|
reviewing and overseeing all transactions between us and a related person for which review or oversight is required by applicable law or that are required to be disclosed in our financial statements or SEC filings, and developing policies and procedures for the committee’s review, approval and/or ratification of such transactions;
|
•
|
establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters; and
|
•
|
preparing the audit committee report that the rules and regulations of the SEC require to be included in our annual proxy statement.
|
•
|
reviewing and approving corporate goals and objectives relevant to the compensation of our Chief Executive Officer, evaluating our Chief Executive Officer’s performance in light of those goals and objectives, and, either as a committee or together with the other independent directors (as directed by the board of directors), determining and approving our Chief Executive Officer’s compensation level based on such evaluation;
|
•
|
reviewing and approving, or making recommendations to the board of directors with respect to, the compensation of our other executive officers, including annual base salary, bonus and equity-based incentives and other benefits;
|
•
|
reviewing and recommending to the board of directors the compensation of our directors;
|
•
|
appointing and overseeing any compensation consultants;
|
•
|
reviewing and discussing with management our “Compensation Discussion and Analysis” disclosure required by SEC rules;
|
•
|
preparing the compensation committee report required by the SEC to be included in our annual proxy statement; and
|
•
|
reviewing and making recommendations with respect to our equity and equity-based compensation plans.
|
•
|
assisting our board of directors in identifying prospective director nominees and recommending nominees to the board of directors;
|
•
|
overseeing the evaluation of the board of directors and management;
|
•
|
reviewing developments in corporate governance practices and developing and recommending a set of corporate governance guidelines; and
|
•
|
recommending members for each committee of our board of directors.
|
•
|
Anthony P. Etnyre, Chief Executive Officer;
|
•
|
Patrick M. Cook, Chief Financial Officer; and
|
•
|
Jay B. Grover, Vice President, Supply Chain.
|
Name and Principal Position
|
| |
Year
|
| |
Salary
($)(1)
|
| |
Bonus
($)(2)
|
| |
Stock
Awards
($)(3)
|
| |
Option
Awards
($)
|
| |
Non-Equity
Incentive Plan
Compensation
($)(4)
|
| |
All Other
Compensation
($)(5)
|
| |
Total
($)
|
Anthony P. Etnyre
Chief Executive Officer
|
| |
2020
|
| |
336,369
|
| |
188,622
|
| |
5,374,000
|
| |
0
|
| |
0
|
| |
11,577
|
| |
5,910,568
|
Patrick M. Cook
Chief Financial Officer
|
| |
2020
|
| |
283,812
|
| |
134,200
|
| |
1,343,500
|
| |
0
|
| |
0
|
| |
11,450
|
| |
1,772,962
|
Jay B. Grover
Vice President, Supply Chain
|
| |
2020
|
| |
233,221
|
| |
90,570
|
| |
2,687,000
|
| |
0
|
| |
0
|
| |
11,577
|
| |
3,022,368
|
(1)
|
Amounts in this column reflect salary paid to the Named Executive Officers with respect to the 2020 Fiscal Year. See the section entitled “Employment Agreements with Named Executive Officers” below for additional details.
|
(2)
|
Amounts in this column reflect the discretionary cash bonuses paid to the Named Executive Officers with respect to the 2020 Fiscal Year.
|
(3)
|
Amounts in this column represent the aggregate grant date fair value, computed in accordance with FASB ASC Topic 718, of stock awards granted to the Named Executive Officers with respect to the 2020 Fiscal Year. For additional information regarding the calculation of this amount and related assumptions, see Note 12 to our consolidated financial statements for the year ended December 31, 2020 under the heading “Determination of Fair Market Value” in this registration statement. For Messrs. Etnyre, Cook and Grover, this amount includes a special, one-time recognition grant of restricted stock units that will only be settled in the form of shares of our common stock upon the occurrence of a “Liquidity Event,” which includes the effectiveness of the registration statement in this offering. See the section entitled “2020 Equity Grants—Recognition Awards” below for additional details.
|
(4)
|
Amounts in this column reflect the annual performance-based bonuses paid to the Named Executive Officers with respect to the 2020 Fiscal Year. No awards were payable based on the “Critical Success Factors” established for 2020.
|
(5)
|
Amounts in this column reflect (i) in the case of Mr. Etnyre, $11,400 in 401(k) plan matching contributions made on his behalf during the 2020 Fiscal Year and the following insurance premiums made on his behalf during the 2020 Fiscal Year: $117 to MetLife Life Insurance and $60 to Insperity Life Insurance, (ii) in the case of Mr. Cook, $11,450 in 401(k) plan matching contributions made on his behalf during the 2020 Fiscal Year and (iii) in the case of Mr. Grover, $11,577 in 401(k) plan matching contributions made on his behalf during the 2020 Fiscal Year.
|
|
| |
Option Awards
|
| |
Stock Awards
|
|||||||||||||||||||||
Name
|
| |
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
| |
Number of
Securities
Underlying
Unexercised
Options
(#)(1)
Unexercisable
|
| |
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
| |
Option
Exercise
Price
($)
|
| |
Option
Expiration
Date
|
| |
Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)(2)
|
| |
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(3)
|
| |
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested
(#)(4)
|
| |
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested
($)(5)
|
Anthony P. Etnyre
|
| |
39,583
|
| |
60,417
|
| |
0
|
| |
3.92
|
| |
5/09/2029
|
| |
25,000
|
| |
671,750
|
| |
200,000
|
| |
5,374,000
|
Patrick M.
Cook
|
| |
53,125
|
| |
96,875
|
| |
0
|
| |
3.92
|
| |
11/3/2029
|
| |
0
|
| |
0
|
| |
50,000
|
| |
1,343,500
|
Jay B. Grover
|
| |
39,583
|
| |
10,417
|
| |
|
| |
0.57
|
| |
03/13/2028
|
| |
|
| |
|
| |
|
| |
|
|
| |
3,958
|
| |
6,042
|
| |
0
|
| |
3.92
|
| |
05/08/2029
|
| |
0
|
| |
0
|
| |
100,000
|
| |
2,687,000
|
(1)
|
The stock option awards for our Named Executive Officers have a four-year vesting period, with one quarter of the award vesting on the first anniversary of the grant date and 1/48 of the award vesting each month thereafter on the anniversary until the end of the four-year vesting period, based on continued employment.
|
(2)
|
This column indicates shares of restricted stock that had not vested as of December 31, 2020. On February 1, 2021, such 25,000 shares of restricted stock vested.
|
(3)
|
Based on the valuation of $26.87 per share of our common stock as of December 31, 2020.
|
(4)
|
The restricted stock units disclosed in this column are vested, subject to the performance condition which requires that a “Liquidity Event,” (as defined in the RSU award agreement) must occur on or before June 29, 2022 in order for the award to settle. The completion of this offering will qualify as a “Liquidity Event” and result in the settlement of the restricted stock unit awards in the form of shares of our common stock on a one-for-one basis. For more information regarding these recognition grants, see the section entitled “2020 Equity Grants—Recognition Awards.”
|
(5)
|
Based on the valuation of $26.87 per share of our common stock as of December 31, 2020.
|
•
|
Stock Options. The 2017 Plan authorizes the issuance of stock options under the 2017 Plan. Each option issued under the 2017 Plan will indicate whether it is intended to be an ISO or a nonqualified stock option. The exercise price of all stock options granted under the 2017 Plan will be determined by the plan administrator, but in no event may the exercise price be less than 100% of the fair market value of the related shares of common stock on the date of grant. The maximum number of shares of common stock that may be issued as incentive stock options may not exceed ten times the authorized share limit, as amended from time to time, plus to the extent permitted by Section 422 of the Code any shares previously issued under the plan that we reacquire pursuant to a forfeiture provision. The maximum term of all stock options granted under the 2017 Plan will be determined by the plan administrator, but may not exceed ten years. Each stock option will vest and become exercisable at such time and subject to such terms and conditions (including treatment upon the optionee’s termination of employment or service) as determined by the plan administrator in the applicable individual option agreement. The board may provide for accelerated exercisability in the event of a Change in Control (as defined in the 2017 Plan); provided, however, that vesting and exercisability of an option granted to an outside director will be automatically accelerated in full in the event of a Change in Control. A participant will have no voting, dividend or other rights as a stockholder with respect to any shares covered by the option until such person becomes entitled to receive such shares by filing a notice of exercise and paying the exercise price pursuant to the terms of the option.
|
•
|
SARs. SARs may be granted under the 2017 Plan. Each SAR will be granted with a base price that is not less than 100% of the fair market value of the related shares of common stock on the date of grant. The maximum term of all SARs will be determined by the plan administrator, but may not exceed 10 years. Each SARs will vest and become exercisable at such time and subject to such terms and conditions (including treatment upon the grantee’s termination of employment or service) as determined by the plan administrator in the applicable individual award agreement. The board may provide for accelerated exercisability in the event of a Change in Control; provided, however, that vesting and exercisability of SARs granted to an outside director will be automatically accelerated in full in the event of a Change in Control. SARs may be awarded in combination with options and such awards may provide that the SARs will not be exercisable unless the related options are forfeited. The plan administrator may determine to settle the exercise of a SAR in shares of common stock, cash, or any combination thereof. A participant will have no voting, dividend or other rights as a stockholder with respect to any shares covered by the SAR until such person becomes entitled to receive such shares upon exercise of the SAR.
|
•
|
Restricted Stock and RSUs. Restricted stock and RSUs may be granted under the 2017 Plan. The plan administrator will determine the purchase price, vesting schedule and performance objectives, if any, applicable to the grant of restricted stock and RSUs. Unless otherwise provided in the applicable award agreement relating to the RSUs, the RSUs will generally be settled when they vest. RSUs issued to date require the occurrence of a “Liquidity Event” (as defined in the applicable award agreement) in order to settle.
|
•
|
Other Stock-Based Awards. Other stock-based awards, valued in whole or in part by reference to, or otherwise based on, shares of common stock (including dividend equivalents) may be granted under the 2017 Plan. The plan administrator will determine the terms and conditions of such other stock-based awards, including the number of shares of common stock to be granted pursuant to such other stock-based awards.
|
•
|
$20,000 annual cash retainer for service as the committee chair of the audit committee;
|
•
|
$15,000 annual cash retainer for service as the committee chair of the compensation committee; and
|
•
|
$10,000 annual cash retainer for service as the committee chair of the nominating and corporate governance committee.
|
Name(1)
|
| |
Fees Earned or
Paid in Cash(2)
($)
|
| |
Stock Awards(2)
($)
|
| |
All Other
Compensation(3)
($)
|
Thurman J. (“T.J.”) Rodgers
|
| |
—
|
| |
2,687,000
|
| |
—
|
Ahmad Chatila
|
| |
52,590
|
| |
—
|
| |
20,304
|
William Aldeen (“Dean”) Priddy, Jr.
|
| |
21,923
|
| |
268,700
|
| |
—
|
Isidoro Quiroga Cortés
|
| |
—
|
| |
2,687,000
|
| |
—
|
Shaker Sadasivam
|
| |
—
|
| |
2,687,000
|
| |
—
|
(1)
|
In 2020, David Springer served as an executive officer of the Company (in the role of Executive Vice President, Field Operations of the Company), other than a named executive officer, who did not receive any additional compensation for his services as a director. Accordingly, we have omitted Mr. Springer from the Director Compensation Table.
|
(2)
|
Amounts represent, for Mr. Chatila, the fees paid in cash in 2020 for services as a non-executive director, and for Mr. Priddy, cash fees earned with respect to services as a non-employee director in 2020.
|
(3)
|
Amounts represent the aggregate grant date fair value of the restricted stock unit awards made to the non-employee director during the 2020 Fiscal Year, computed in accordance with FASB ASC Topic 718.
|
|
As of December 31, 2020, our directors held the following restricted stock unit awards in the aggregate:
|
Name
|
| |
RSUs (#)
|
Thurman J. (“T.J.”) Rodgers
|
| |
100,000
|
David Springer
|
| |
—
|
Ahmad Chatila
|
| |
37,694
|
William Aldeen (“Dean”) Priddy, Jr.
|
| |
10,000
|
Isidoro Quiroga Cortés
|
| |
—
|
Shaker Sadasivam
|
| |
100,000
|
(4)
|
Amounts represent the incremental cost to the Company of providing health and life insurance benefits to the director.
|
•
|
each stockholder known by us to own beneficially more than 5% of our outstanding shares of common stock;
|
•
|
each of our directors and named executive officers individually; and
|
•
|
all of our directors and executive officers as a group.
|
|
| |
|
| |
Shares of Common Stock
Beneficially Owned After
This Offering
|
||||||||||||
|
| |
Shares of Common Stock
Beneficially Owned Before
This Offering
|
| |
No exercise
of option
|
| |
Full exercise
of option
|
|||||||||
Name of Beneficial Owner
|
| |
Number
|
| |
%
|
| |
Number
|
| |
%
|
| |
Number
|
| |
%
|
5% Stockholders:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
ARC Family Trust(1)
|
| |
22,504,507
|
| |
33.8
|
| |
21,514,907
|
| |
26.2
|
| |
20,298,869
|
| |
24.7
|
South Lake One LLC(2)
|
| |
15,272,217
|
| |
22.9
|
| |
14,277,858
|
| |
17.4
|
| |
13,077,102
|
| |
15.9
|
Catherine L. Springer(3)
|
| |
4,948,003
|
| |
7.4
|
| |
4,381,122
|
| |
5.3
|
| |
4,381,122
|
| |
5.3
|
Rodgers Massey Revocable Living Trust dated 4/4/11(4)
|
| |
3,768,069
|
| |
5.6
|
| |
3,768,069
|
| |
4.5
|
| |
3,768,069
|
| |
4.5
|
Named Executive Officers and Directors:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Anthony P. Etnyre(5)
|
| |
4,275,553
|
| |
6.2
|
| |
4,275,553
|
| |
5.1
|
| |
4,275,553
|
| |
5.1
|
Patrick M. Cook(6)
|
| |
2,081,254
|
| |
3.1
|
| |
2,081,254
|
| |
2.5
|
| |
2,081,254
|
| |
2.5
|
Jay B. Grover(7)
|
| |
1,245,586
|
| |
1.8
|
| |
1,111,577
|
| |
1.3
|
| |
1,111,577
|
| |
1.3
|
Thurman J. “T.J.” Rodgers(8)
|
| |
3,768,069
|
| |
5.6
|
| |
3,768,069
|
| |
4.5
|
| |
3,768,069
|
| |
4.5
|
David Springer(9)
|
| |
11,518,077
|
| |
17.3
|
| |
10,610,943
|
| |
12.9
|
| |
9,703,809
|
| |
11.8
|
Ahmad Chatila
|
| |
310,850
|
| |
*
|
| |
310,850
|
| |
*
|
| |
310,850
|
| |
*
|
William Aldeen (“Dean”) Priddy, Jr.(10)
|
| |
16,493
|
| |
*
|
| |
16,493
|
| |
*
|
| |
16,493
|
| |
*
|
Isidoro Quiroga Cortés(11)
|
| |
824,667
|
| |
1.2
|
| |
255,746
|
| |
*
|
| |
255,746
|
| |
*
|
Shaker Sadasivam(12)
|
| |
25,803,176
|
| |
38.7
|
| |
23,988,908
|
| |
28.9
|
| |
22,772,870
|
| |
27.4
|
Lisan Hung
|
| |
—
|
| |
*
|
| |
—
|
| |
*
|
| |
—
|
| |
*
|
All Executive Officers and Directors as a group (14 individuals)
|
| |
51,959,268
|
| |
77.1%
|
| |
48,060,340
|
| |
57.9
|
| |
45,937,169
|
| |
55.4
|
*
|
Represents beneficial ownership of less than 1%
|
(1)
|
The ARC Family Trust was established by Mr. Chatila for the benefit of certain members of his family. Mr. Sadasivam is the trustee of the ARC
|
(2)
|
Isidoro Quiroga Moreno directly owns approximately 71% of the issued and outstanding capital stock of Inversiones El Aromo Limitada (“El Aromo”). El Aromo directly controls South Cone Investments Limited Partnership, a Canadian limited partnership (“South Cone”), as its general partner with the power to manage South Cone. South Cone directly owns 100% of the issued and outstanding capital stock of South Lake One LLC (“South Lake”) and South Lake has sole voting power and sole dispositive power with respect to all of the shares. Mr. Quiroga Moreno is the father of Mr. Quiroga Cortés. The address for South Lake is 5711 Pdte. Riesco, Office No. 1603, Las Condes, Santiago, Chile. We intend to repurchase 994,359 shares of common stock (or 2,195,116 shares if the underwriters exercise their over-allotment option in full) from this shareholder, some of which will result from the vesting and settlement of RSUs in connection with this offering, in the Stock Repurchase. See “Certain Relationships and Related Party Transactions—Stock Repurchase Agreements.”
|
(3)
|
The address of this shareholder is 2006 Overcup Dr., Round Rock, TX78681. Ms. Springer is the former spouse of Mr. Springer. We intend to repurchase 566,881 shares of common stock from this shareholder, some of which will result from the vesting and settlement of RSUs in connection with this offering, in the Stock repurchase. See “Certain Relationships and Related Party Transactions.”
|
(4)
|
Consists of (i) 2,943,402 shares of common stock and (ii) 824,667 shares of common stock to be issued from the settlement of restricted stock units that have vested held by the Rodgers Massey Revocable Living Trust dated 4/4/11 (the “Rodgers Trust”). Mr. Rodgers is the trustee of the Rodgers Trust and has sole voting and dispositive power with respect to these shares. The address of this shareholder is 575 Eastview Way Woodside, CA 94062.
|
(5)
|
Consists of (i) 824,667 shares of common stock held by Mr. Etnyre, (ii) 1,649,334 shares of common stock to be issued from the settlement of restricted stock units that have vested held by Mr. Etnyre, (iii) 395,148 shares of common stock subject to options that have vested held by Mr. Etnyre, (iv) 34,364 shares of common stock subject to options that are exercisable within 60 days of April 15, 2021, held by Mr. Etnyre and (v) 1,372,040 shares of common stock held by the Tony Etnyre 2021 GRAT. With respect to the Tony Etnyre 2021 GRAT, Mr. Etnyre (a) is the sole trustee, (b) has sole voting and dispositive power with respect to the shares held by the trust, and (c) has sole power to acquire for himself any asset held in the trust, including the shares, by substituting other property of equivalent value. With respect to the Etnyre 2021 Family Trust, Mr. Etnyre's spouse, Brooke Murray-Etnyre, has sole power to acquire for herself any asset held in the trust, including the shares, by substituting other property of equivalent value. Mr. Etnyre disclaims beneficial ownership over the shares held by the Etnyre 2021 Family Trust.
|
(6)
|
Consists of (i) 515,417 shares of common stock subject to options that have vested held by Mr. Cook, (ii) 51,542 shares of common stock subject to options that are exercisable within 60 days of April 15, 2021, held by Mr. Cook, (iii) 206,167 shares of common stock to be issued from the settlement of restricted stock units that have vested held by the Patrick Cook 2021 Trust, (iv) 206,167 shares of common stock to be issued from the settlement of restricted stock units that have vested and are held by the Cook 2021 Family Trust and (v) 1,101,961 shares of common stock held by the Etnyre 2021 Family Trust for the benefit of certain members of Mr. Etnyre's family. With respect to the Patrick Cook 2021 Trust, Mr. Cook (a) is the sole trustee of the trust and (b) has sole voting and dispositive power with respect to the shares held by the trust. With respect to the Patrick Cook 2021 Trust, Mr. Cook's spouse, Brooke Nicole Cook, has sole power to acquire for herself any asset held in the trust, including the shares, by substituting other property of equivalent value. With respect to the Cook 2021 Family Trust, Mr. Cook (a) is the sole investment adviser of the trust, (b) has sole power to direct the trustee as to the voting and disposition of the shares held by the trust, and (c) has sole power to acquire for himself any asset held in the trust, including the shares, by substituting other property of equivalent value. With respect to the Etnyre 2021 Family Trust, Mr. Cook (a) is the sole trustee of the trust and (b) has sole voting and dispositive power with respect to the shares held by the trust.
|
(7)
|
Consists of (i) 824,667 shares of common stock to be issued from the settlement of restricted stock units that have vested, (ii) 400,302 shares of common stock subject to options that have vested and (iii) 20,617 shares of common stock subject to options that are exercisable within 60 days of April 15, 2021, held by Mr. Grover. We intend to repurchase 134,008 shares of common stock from this shareholder, some of which will result from the vesting and settlement of RSUs in connection with this offering, in the Stock Repurchase. See “Certain Relationships and Related Party Transactions—Stock Repurchase Agreements.”
|
(8)
|
Consists of (i) 2,943,402 shares of common stock and (ii) 824,667 shares of common stock to be issued from the settlement of restricted stock units that have vested held by the Rodgers Trust. See also above footnote (4) for further information about the Rodgers Trust. The address of this shareholder is 575 Eastview Way Woodside, CA 94062.
|
(9)
|
Consists of (i) 8,186,421 shares of common stock held by Mr. Springer, (ii) 2,474,001 shares of common stock held by the DS 2021 GRAT, (iii) 329,867 shares of common stock held by the KC 2021 Trust, (iv) 247,400 shares held by the JT 2021 Trust, (v) 247,400 shares held by the SF 2021 Trust and (vi) 32,987 shares of common stock held by the KNS 2021 Trust. With respect to the DS 2021 GRAT, Mr. Springer (a) is the sole trustee, (b) has sole voting and dispositive power with respect to the shares held by the trust and (c) has sole power to acquire for himself any asset held in the trust, including the shares, by substituting other property of equivalent value. With respect to the KC 2021 Trust, the JT 2021 Trust, the SF 2021 Trust and the KNS 2021 Trust, Mr. Springer has sole power to acquire for himself any asset held in the trust, including the shares, by substituting other property of equivalent value. We intend to repurchase 907,134 shares of common stock (or 1,814,268 shares if the underwriters exercise their over-allotment option in full) of the shares held by Mr. Springer, some of which will result from the vesting and settlement of RSUs in connection with this offering, in the Stock Repurchase. See “Certain Relationships and Related Party Transactions—Stock Repurchase Agreements.”
|
(10)
|
Consists of 16,493 shares of common stock to be issued from the settlement of restricted stock units that have vested held by Mr. Priddy.
|
(11)
|
Consists of 824,667 shares of common stock to be issued from the settlement of restricted stock units that have vested held by Mr. Quiroga Cortés. We intend to repurchase 568,921 shares of common stock from this shareholder, some of which will result from the vesting and settlement of RSUs in connection with this offering, in the Stock Repurchase. See “Certain Relationships and Related Party Transactions—Stock Repurchase Agreements.”
|
(12)
|
Consists of (i) 2,474,001 shares of common stock held by ChristSivam, LLC (ii) 824,667 shares of common stock to be issued from the settlement of restricted stock units that have vested and are held by ChristSivam, LLC and (iii) 2,728,920 shares of common stock held by the ARC Family Trust for the benefit of certain members of Mr. Chatila's family. Mr. Sadasivam is the Manager of ChristSivam, LLC and has sole voting and dispositive power with respect to the shares held by ChristSivam, LLC. See also above footnote (1) for further information about ARC Family Trust. The address of this shareholder is 1950 Pine Run Drive, Chesterfield, MO 63108. We intend to repurchase (i) 989,601 shares of common stock (or 2,205,639 shares if the underwriters exercise their over-allotment option in full) of the shares held by ARC Family Trust and (ii) 824,667 of the shares held by ChristSivam LLC, some of which will result from the vesting and settlement of RSUs in connection with this offering, in the Stock Repurchase. See “Certain Relationships and Related Party Transactions—Stock Repurchase Agreements.”
|
•
|
we have been or are to be a participant;
|
•
|
the amount involved exceeds $120,000; and
|
•
|
any of our directors, officers or holders of more than 5% of our outstanding capital stock, or any immediate family member of, or person sharing the household with, any of these individuals or entities, had or will have a direct or indirect material interest.
|
|
| |
No Exercise
|
| |
Full Exercise
|
||||||
|
| |
Number of
shares of
common stock
to be purchased
|
| |
Aggregate
Purchase
Price
|
| |
Number of
shares of
common stock
to be purchased
|
| |
Aggregate
Purchase
Price
|
Nagendra Cherukupalli
|
| |
412,334
|
| |
$7,325,114
|
| |
412,334
|
| |
$7,325,114
|
Ali Mortazavi
|
| |
30,925
|
| |
549,383
|
| |
30,925
|
| |
549,383
|
Jay B. Grover
|
| |
134,008
|
| |
2,380,652
|
| |
134,008
|
| |
2,380,652
|
Kristian Nolde
|
| |
31,337
|
| |
556,702
|
| |
31,337
|
| |
556,702
|
David Springer
|
| |
907,134
|
| |
16,115,236
|
| |
1,814,268
|
| |
32,230,471
|
Isidoro Quiroga Cortés(1)
|
| |
568,921
|
| |
10,106,882
|
| |
568,921
|
| |
10,106,882
|
ARC Family Trust(2)
|
| |
989,601
|
| |
17,580,262
|
| |
2,205,639
|
| |
39,183,177
|
South Lake One LLC(1)
|
| |
994,359
|
| |
17,664,788
|
| |
2,195,116
|
| |
38,996,236
|
Catherine L. Springer
|
| |
566,881
|
| |
10,070,641
|
| |
566,881
|
| |
10,070,641
|
ChristSivam, LLC(3)
|
| |
824,667
|
| |
14,650,209
|
| |
824,667
|
| |
14,650,209
|
Total
|
| |
5,460,167
|
| |
$96,999,867
|
| |
8,784,096
|
| |
$156,049,465
|
(1)
|
South Lake One LLC is an entity affiliated with our director Isidoro Quiroga Cortés.
|
(2)
|
ARC Family Trust is an entity affiliated with our director Shaker Sadasivam and family members of our director Ahmad Chatila are beneficiaries of the ARC Family Trust.
|
(3)
|
ChristSivam, LLC is an entity affiliated with our director Shaker Sadasivam.
|
•
|
850,000,000 shares of common stock, par value $0,0001 per share; and
|
•
|
10,000,000 shares of preferred stock, par value $0.0001 per share.
|
•
|
the designation of the series;
|
•
|
the number of shares of the series, which our board of directors may, except where otherwise provided in the preferred stock designation, increase (but not above the total number of authorized shares of the class) or decrease (but not below the number of shares then outstanding);
|
•
|
whether dividends, if any, will be cumulative or non-cumulative and the dividend rate of the series;
|
•
|
the dates at which dividends, if any, will be payable;
|
•
|
the redemption or repurchase rights and price or prices, if any, for shares of the series;
|
•
|
the terms and amounts of any sinking fund provided for the purchase or redemption of shares of the series;
|
•
|
the amounts payable on shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding-up of our affairs;
|
•
|
whether the shares of the series will be convertible into shares of any other class or series, or any other security, of us or any other entity, and, if so, the specification of the other class or series or other security, the conversion price or prices or rate or rates, any rate adjustments, the date or dates as of which the shares will be convertible and all other terms and conditions upon which the conversion may be made;
|
•
|
restrictions on the issuance of shares of the same series or of any other class or series; and
|
•
|
the voting rights, if any, of the holders of the series.
|
•
|
a stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an “interested stockholder”);
|
•
|
an affiliate of an interested stockholder; or
|
•
|
an associate of an interested stockholder
|
•
|
our board of directors approves the transaction that made the stockholder an “interested stockholder” prior to the date of the transaction;
|
•
|
after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, other than statutorily excluded shares of common stock; or
|
•
|
on or subsequent to the date of the transaction, the business combination is approved by our board of directors and authorized at a meeting of our stockholders, and not by written consent, by an affirmative vote of at least two-thirds of the outstanding voting stock not owned by the interested stockholder.
|
•
|
a financial institution;
|
•
|
an insurance company;
|
•
|
a controlled foreign corporation;
|
•
|
a passive foreign investment company;
|
•
|
a tax-exempt entity or governmental organization;
|
•
|
a U.S. expatriate or former long-term resident of the United States;
|
•
|
a pass-through entity (such as a partnership or entity or arrangement treated as a partnership for U.S. federal income tax purposes) or an investor in such an entity;
|
•
|
a trader, dealer or broker in securities or foreign currencies, including one who elects to apply a mark-to-market method of accounting;
|
•
|
a stockholder who holds shares of our common stock as part of a straddle, hedge, conversion, appreciated financial position, constructive sale or other integrated transaction for U.S. federal income tax purposes;
|
•
|
a stockholder who acquired shares of our common stock pursuant to the exercise of employee stock options or otherwise as compensation; and
|
•
|
a stockholder who actually or constructively owns, or has owned, 10% or more of our stock (by vote or value).
|
•
|
such gain is “effectively connected” with a trade or business of the non-U.S. Holder in the United States (and, if required by an applicable income tax treaty, is attributable to the non-U.S. Holder’s permanent establishment in the United States);
|
•
|
the non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year of the exchange and certain other conditions are met; or
|
•
|
shares of our common stock constitute a U.S. real property interest by reason of our status as a U.S. real property holding corporation, or a USRPHC, for U.S. federal income tax purposes.
|
•
|
1% of the number of shares of our common stock then outstanding, which will equal approximately shares of our common stock immediately after this offering assuming no exercise of the underwriters’ over-allotment option; and
|
•
|
the average weekly trading volume of our common stock on Nasdaq during the four calendar weeks preceding the filing of a notice on Form 144 with respect to that sale.
|
Underwriters
|
| |
Number of
Shares
|
Barclays Capital Inc.
|
| |
|
BofA Securities, Inc.
|
| |
|
Credit Suisse Securities (USA) LLC
|
| |
|
UBS Securities LLC
|
| |
|
HSBC Securities (USA) Inc.
|
| |
|
Cowen and Company, LLC
|
| |
|
Piper Sandler & Co.
|
| |
|
Raymond James & Associates, Inc.
|
| |
|
Roth Capital Partners, LLC
|
| |
|
Total
|
| |
18,421,053
|
•
|
the obligation to purchase all of the shares of common stock offered hereby (other than those shares of common stock covered by their over-allotment option to purchase additional shares as described below), if any of the shares are purchased;
|
•
|
the representations and warranties made by us to the underwriters are true;
|
•
|
there is no material change in our business or the financial markets; and
|
•
|
we deliver customary closing documents to the underwriters.
|
|
| |
No Exercise
|
| |
Full Exercise
|
Per Share
|
| |
$
|
| |
$
|
Total
|
| |
$
|
| |
$
|
•
|
the history and prospects for the industry in which we compete;
|
•
|
our financial information;
|
•
|
the ability of our management and our business potential and earning prospects;
|
•
|
the prevailing securities markets at the time of this offering; and
|
•
|
the recent market prices of, and the demand for, publicly traded shares of generally comparable companies.
|
•
|
Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum.
|
•
|
A short position involves a sale by the underwriters of shares in excess of the number of shares the underwriters are obligated to purchase in the offering, which creates the syndicate short position. This short position may be either a covered short position or a naked short position. In a covered short position, the number of shares involved in the sales made by the underwriters in excess of the number of shares they are obligated to purchase is not greater than the number of shares that they may purchase by exercising their over-allotment option to purchase additional shares. In a naked short position, the number of shares involved is greater than the number of shares in their over-allotment option to purchase additional shares. The underwriters may close out any short position by either exercising their over-allotment option to purchase additional shares and/or purchasing shares in the open market. In determining the source of shares to close out the short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through their over-allotment option to purchase additional shares. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering.
|
•
|
Syndicate covering transactions involve purchases of the common stock in the open market after the distribution has been completed in order to cover syndicate short positions.
|
•
|
Penalty bids permit the representatives to reclaim a selling concession from a syndicate member when the common stock originally sold by the syndicate member is purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.
|
•
|
to any legal entity which is a qualified investor as defined in the Prospectus Regulation;
|
•
|
to fewer than 150 natural or legal persons (other than qualified investors as defined under the Prospectus Regulation), subject to obtaining the prior consent of the underwriters for any such offer; or
|
•
|
in any other circumstances falling within Article 1(4) of the Prospectus Regulation;
|
(a)
|
a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or
|
(b)
|
a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor,
|
(a)
|
to an institutional investor or to a relevant person, or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA;
|
(b)
|
where no consideration is or will be given for the transfer;
|
(c)
|
where the transfer is by operation of law; or
|
(d)
|
as specified in Section 276(7) of the SFA.
|
|
| |
As of December 31,
|
|||
|
| |
2019
|
| |
2020
|
ASSETS
|
| |
|
| |
|
Current assets
|
| |
|
| |
|
Cash
|
| |
$7,221
|
| |
$32,359
|
Restricted cash
|
| |
1,014
|
| |
1,014
|
Accounts receivable, net
|
| |
14,048
|
| |
23,734
|
Inventories
|
| |
4,505
|
| |
1,686
|
Prepaid and other current assets
|
| |
3,848
|
| |
6,924
|
Total current assets
|
| |
30,636
|
| |
65,717
|
Intangible assets, net
|
| |
33
|
| |
—
|
Investments in unconsolidated subsidiary
|
| |
2,582
|
| |
1,857
|
Other assets
|
| |
579
|
| |
3,819
|
Total assets
|
| |
$33,830
|
| |
$71,393
|
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
| |
|
| |
|
Current liabilities
|
| |
|
| |
|
Accounts payable
|
| |
$8,191
|
| |
$17,127
|
Line of credit
|
| |
—
|
| |
1,000
|
Accrued expenses and other liabilities
|
| |
5,375
|
| |
18,495
|
Accrued interest – related party
|
| |
285
|
| |
207
|
Deferred revenue
|
| |
19,873
|
| |
22,980
|
Total current liabilities
|
| |
33,724
|
| |
59,809
|
Long-term debt and other borrowings
|
| |
1,976
|
| |
784
|
Long-term debt – related party
|
| |
5,857
|
| |
—
|
Other non-current liabilities
|
| |
715
|
| |
3,349
|
Deferred income taxes
|
| |
3
|
| |
—
|
Total liabilities
|
| |
42,275
|
| |
63,942
|
Commitments and contingencies (Note 9)
|
| |
|
| |
|
Stockholders’ equity (deficit)
|
| |
|
| |
|
Common stock par value of $0.0001 per share, 12,000,000 shares authorized at December 31, 2020 and 2019; 8,022,066 and 7,716,323 shares issued and outstanding as of December 31, 2020 and 2019, respectively
|
| |
1
|
| |
1
|
Treasury stock, at cost (1,200,080 and 0 shares as of December 31, 2020 and 2019, respectively)
|
| |
—
|
| |
—
|
Additional paid-in capital
|
| |
18,273
|
| |
50,096
|
Accumulated other comprehensive loss
|
| |
—
|
| |
(3)
|
Accumulated deficit
|
| |
(26,719)
|
| |
(42,643)
|
Total stockholders’ equity (deficit)
|
| |
(8,445)
|
| |
7,451
|
Total liabilities and stockholders’ equity (deficit)
|
| |
$33,830
|
| |
$71,393
|
|
| |
Years Ended December 31,
|
|||
|
| |
2019
|
| |
2020
|
Revenue:
|
| |
|
| |
|
Product
|
| |
$43,085
|
| |
$158,925
|
Service
|
| |
10,039
|
| |
28,427
|
Total revenue
|
| |
53,124
|
| |
187,352
|
Cost of revenue:
|
| |
|
| |
|
Product
|
| |
44,212
|
| |
155,967
|
Service
|
| |
10,863
|
| |
27,746
|
Total cost of revenue
|
| |
55,075
|
| |
183,713
|
Gross profit (loss)
|
| |
(1,951)
|
| |
3,639
|
Operating expenses
|
| |
|
| |
|
Research and development
|
| |
3,960
|
| |
5,222
|
Selling and marketing
|
| |
1,897
|
| |
3,545
|
General and administrative
|
| |
4,563
|
| |
11,798
|
|
| |
10,420
|
| |
20,565
|
Loss from operations
|
| |
(12,371)
|
| |
(16,926)
|
Interest expense, net
|
| |
454
|
| |
480
|
Loss before income taxes
|
| |
(12,825)
|
| |
(17,406)
|
(Benefit from) income taxes
|
| |
(39)
|
| |
(83)
|
(Income) Loss from unconsolidated subsidiary
|
| |
709
|
| |
(1,399)
|
Net loss
|
| |
$(13,495)
|
| |
$(15,924)
|
|
| |
|
| |
|
Net loss per share
|
| |
|
| |
|
Basic and diluted
|
| |
$(1.79)
|
| |
$(1.91)
|
Weighted-average common shares outstanding
|
| |
|
| |
|
Basic and diluted
|
| |
7,523,447
|
| |
8,344,039
|
|
| |
Common Stock
|
| |
Treasury Stock
|
| |
Additional
Paid-In
Capital
|
| |
Accumulated
Other
Comprehensive
Loss
|
| |
Accumulated
Deficit
|
| |
Total
Stockholders’
Equity
(Deficit)
|
||||||
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |||||||||||
Balance as of December 31, 2018
|
| |
6,808,372
|
| |
$1
|
| |
—
|
| |
$ —
|
| |
$11,367
|
| |
$—
|
| |
$(13,224)
|
| |
$(1,856)
|
Restricted stock awards vested during the period
|
| |
463,462
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Issuance of common stock
|
| |
444,489
|
| |
—
|
| |
—
|
| |
—
|
| |
6,000
|
| |
—
|
| |
—
|
| |
6,000
|
Stock-based compensation
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
906
|
| |
—
|
| |
—
|
| |
906
|
Net loss
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(13,495)
|
| |
(13,495)
|
Balance as of December 31, 2019
|
| |
7,716,323
|
| |
$1
|
| |
—
|
| |
$—
|
| |
$18,273
|
| |
$ —
|
| |
$(26,719)
|
| |
$(8,445)
|
Restricted stock awards vested during the period
|
| |
394,711
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Issuance of common stock
|
| |
1,111,112
|
| |
—
|
| |
—
|
| |
—
|
| |
30,000
|
| |
—
|
| |
—
|
| |
30,000
|
Repurchase of common stock, held in treasury
|
| |
(1,200,080)
|
| |
—
|
| |
1,200,080
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Stock-based compensation
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
1,823
|
| |
—
|
| |
—
|
| |
1,823
|
Net loss
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(15,924)
|
| |
(15,924)
|
Other comprehensive loss
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(3)
|
| |
—
|
| |
(3)
|
Balance at December 31, 2020
|
| |
8,022,066
|
| |
$1
|
| |
1,200,080
|
| |
$ —
|
| |
$50,096
|
| |
$(3)
|
| |
$(42,643)
|
| |
$7,451
|
|
| |
Years Ended December 31,
|
|||
|
| |
2019
|
| |
2020
|
Cash flows from operating activities
|
| |
|
| |
|
Net loss
|
| |
$(13,495)
|
| |
$(15,924)
|
Adjustments to reconcile net loss to cash (used in) provided by operating activities:
|
| |
|
| |
|
Stock-based compensation
|
| |
906
|
| |
1,818
|
Depreciation and amortization
|
| |
412
|
| |
47
|
(Income)/Loss from unconsolidated subsidiary, net of distributions received
|
| |
709
|
| |
(1,399)
|
Loss on debt extinguishment
|
| |
—
|
| |
116
|
Warranty provision
|
| |
2,057
|
| |
7,866
|
Warranty recoverable from manufacturers
|
| |
(284)
|
| |
(1,021)
|
Bad debt expense
|
| |
444
|
| |
24
|
Deferred income taxes
|
| |
(3)
|
| |
(3)
|
Other non-cash items
|
| |
89
|
| |
50
|
Changes in operating assets and liabilities:
|
| |
|
| |
|
Accounts receivable, net
|
| |
(13,838)
|
| |
(9,710)
|
Inventories
|
| |
(4,505)
|
| |
2,819
|
Prepaid and other current assets
|
| |
(3,154)
|
| |
(2,847)
|
Other assets
|
| |
(156)
|
| |
(1,672)
|
Accounts payable
|
| |
7,781
|
| |
8,936
|
Accruals and other current liabilities
|
| |
3,389
|
| |
7,162
|
Accrued interest – related party debt
|
| |
(289)
|
| |
(78)
|
Deferred revenue
|
| |
19,683
|
| |
3,107
|
Other non-current liabilities
|
| |
1
|
| |
496
|
Other, net
|
| |
(1)
|
| |
(298)
|
Net cash used in operating activities
|
| |
(254)
|
| |
(511)
|
Cash flows from investing activities:
|
| |
|
| |
|
Purchases of property and equipment
|
| |
(18)
|
| |
(256)
|
Distributions received from unconsolidated subsidiary, return of investment
|
| |
—
|
| |
2,124
|
Net cash provided by (used in) investing activities:
|
| |
(18)
|
| |
1,868
|
Cash flows from financing activities:
|
| |
|
| |
|
Proceeds from borrowings
|
| |
1,000
|
| |
784
|
Repayments of borrowings
|
| |
—
|
| |
(7,000)
|
Proceeds from stock issuance
|
| |
6,000
|
| |
30,000
|
Net cash provided by financing activities
|
| |
7,000
|
| |
23,784
|
Effect of exchange rate changes on cash and restricted cash
|
| |
—
|
| |
(3)
|
Net increase in cash and restricted cash
|
| |
6,728
|
| |
25,138
|
Cash and restricted cash at beginning of period
|
| |
1,507
|
| |
8,235
|
Cash and restricted cash at end of period
|
| |
$8,235
|
| |
$33,373
|
|
| |
|
| |
|
Supplemental disclosures of cash flow information:
|
| |
|
| |
|
Cash paid during the year for interest
|
| |
$708
|
| |
$350
|
Cash paid during the year for income taxes
|
| |
$—
|
| |
$—
|
|
| |
|
| |
|
Reconciliation of cash and restricted cash at period end
|
| |
|
| |
|
Cash
|
| |
7,221
|
| |
32,359
|
Restricted cash
|
| |
1,014
|
| |
1,014
|
Total cash and restricted cash
|
| |
$8,235
|
| |
$33,373
|
1.
|
Description of Business
|
2.
|
Summary of Significant Accounting Policies
|
•
|
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.
|
•
|
Level 2: Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.
|
•
|
Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
3.
|
Revenue
|
4.
|
Accrued Expenses and Other Current Liabilities
|
|
| |
As of December 31,
|
|||
|
| |
2019
|
| |
2020
|
Accrued cost of revenue
|
| |
$2,106
|
| |
$7,812
|
Accrued expenses
|
| |
1,644
|
| |
2,856
|
Warranty reserves
|
| |
1,368
|
| |
3,985
|
Accrued compensation
|
| |
177
|
| |
2,869
|
Accrued interest expense
|
| |
47
|
| |
28
|
Other
|
| |
32
|
| |
945
|
Total
|
| |
$5,375
|
| |
$18,495
|
5.
|
Prepaid Expenses and Other Current Assets
|
|
| |
As of December 31,
|
|||
|
| |
2019
|
| |
2020
|
Vendor deposits
|
| |
$1,738
|
| |
$4,205
|
Prepaid expenses
|
| |
209
|
| |
1,043
|
Deferred cost of revenue
|
| |
19
|
| |
992
|
Surety collateral*
|
| |
1,835
|
| |
113
|
Other current assets
|
| |
47
|
| |
571
|
|
| |
$3,848
|
| |
$6,924
|
*
|
Surety collateral represents amounts held in deposit to secure performance bonds, which is expected to be ultimately received back in cash when settled.
|
6.
|
Equity Method Investments
|
|
| |
As of December 31,
|
|||
|
| |
2019
|
| |
2020
|
Dimension Energy LLC
|
| |
|
| |
|
Carrying value
|
| |
$2,582
|
| |
$1,857
|
Ownership percentage
|
| |
23.7%
|
| |
23.6%
|
|
| |
As of December 31,
|
|||
|
| |
2019
|
| |
2020
|
Current assets
|
| |
$4,466
|
| |
$10,162
|
Non-current assets
|
| |
13,123
|
| |
9,045
|
Current liabilities
|
| |
3,219
|
| |
12,350
|
Non-current liabilities
|
| |
14,344
|
| |
9,723
|
Members’ equity (deficit)
|
| |
25
|
| |
(2,866)
|
|
| |
Years Ended December 31
|
|||
|
| |
2019
|
| |
2020
|
Revenue
|
| |
$—
|
| |
$22,570
|
Gross profit
|
| |
—
|
| |
17,360
|
Income (loss) from operations
|
| |
(3,413)
|
| |
9,185
|
Net income (loss)
|
| |
(2,987)
|
| |
5,933
|
Share of earnings from equity method investment
|
| |
(709)
|
| |
1,399
|
7.
|
Intangible Assets, Net
|
|
| |
|
| |
As of December 31,
|
|||
|
| |
Estimated Useful Lives (Years)
|
| |
2019
|
| |
2020
|
Developed technology
|
| |
3
|
| |
1,200
|
| |
1,200
|
Total intangible assets
|
| |
|
| |
1,200
|
| |
1,200
|
Less: accumulated amortization
|
| |
|
| |
1,167
|
| |
1,200
|
Total intangible assets, net
|
| |
|
| |
$33
|
| |
$—
|
8.
|
Debt and Other Borrowings
|
9.
|
Commitments and Contingencies
|
|
| |
Years Ended December 31,
|
|||
|
| |
2019
|
| |
2020
|
Balance at beginning of period
|
| |
$—
|
| |
$2,057
|
Warranties issued during the period
|
| |
2,057
|
| |
7,866
|
Settlements made during the period
|
| |
—
|
| |
(3,111)
|
Changes in liability for pre-existing warranties
|
| |
—
|
| |
(1)
|
Balance at end of period
|
| |
$2,057
|
| |
$6,811
|
10.
|
Leases
|
|
| |
As of December 31,
|
|||
Reported as:
|
| |
2019
|
| |
2020
|
Assets:
|
| |
|
| |
|
Operating lease right of use assets (included in Other assets)
|
| |
$43
|
| |
$571
|
Liabilities:
|
| |
|
| |
|
Operating lease liabilities, current portion (included in Accrued expenses and other current liabilities)
|
| |
$11
|
| |
$242
|
Operating lease liabilities, non-current (included in Other non-current liabilities)
|
| |
27
|
| |
355
|
Total operating lease liabilities
|
| |
$38
|
| |
$597
|
|
| |
As of December 31,
|
|||
|
| |
2019
|
| |
2020
|
Cash payments for operating leases
|
| |
$38
|
| |
$ 140
|
New operating lease assets obtained in exchange for operating lease liabilities
|
| |
$42
|
| |
$ 672
|
2021
|
| |
$266
|
2022
|
| |
241
|
2023
|
| |
128
|
Total future lease payments
|
| |
$635
|
Less imputed interest
|
| |
(38)
|
Total lease liability
|
| |
$597
|
11.
|
Common Stock
|
12.
|
Stock Plans
|
|
| |
Options Outstanding
|
| |
|
| |
|
|||
|
| |
Number of
Shares
|
| |
Weighted
Average
Exercise Price
|
| |
Weighted-Average
Remaining
Contractual
Term
(in years)
|
| |
Aggregate
Intrinsic Value
(in thousands)
|
Outstanding - December 31, 2019
|
| |
980,000
|
| |
$1.78
|
| |
|
| |
|
Granted during the year
|
| |
63,750
|
| |
3.92
|
| |
|
| |
|
Exercised or released
|
| |
—
|
| |
—
|
| |
|
| |
|
Cancelled or forfeited
|
| |
10,000
|
| |
0.57
|
| |
|
| |
|
Expired
|
| |
—
|
| |
—
|
| |
|
| |
|
Balances - December 31, 2020
|
| |
1,033,750
|
| |
$1.93
|
| |
7.51
|
| |
$25,785
|
Vested and expected to vest - December 31, 2020
|
| |
1,033,750
|
| |
$1.93
|
| |
7.51
|
| |
$25,785
|
Exercisable - December 31, 2020
|
| |
652,283
|
| |
$1.28
|
| |
7.11
|
| |
$16,693
|
|
| |
Unvested Restricted Stock Units
|
| |
Unvested Restricted Stock Awards
|
||||||
|
| |
Number of
Shares
|
| |
Weighted-Average
Intrinsic Value
|
| |
Number of
Shares
|
| |
Weighted-Average
Grant Date Fair Value
|
Unvested as of December 31, 2019
|
| |
100,000
|
| |
$13.50
|
| |
536,538
|
| |
$0.54
|
Granted
|
| |
1,479,580
|
| |
26.87
|
| |
—
|
| |
—
|
Vested
|
| |
—
|
| |
—
|
| |
394,711
|
| |
0.54
|
Forfeited or canceled
|
| |
10,000
|
| |
26.87
|
| |
—
|
| |
—
|
Unvested as of December 31, 2020
|
| |
1,569,580
|
| |
$26.02
|
| |
141,827
|
| |
$0.54
|
|
| |
Years Ended December 31,
|
|||
|
| |
2019
|
| |
2020
|
Cost of revenue
|
| |
$176
|
| |
322
|
General and administrative
|
| |
653
|
| |
1,401
|
Research and development
|
| |
51
|
| |
57
|
Selling and marketing
|
| |
26
|
| |
38
|
Total stock-based compensation expense
|
| |
$906
|
| |
1,818
|
|
| |
Years Ended December 31,
|
|||
|
| |
2019
|
| |
2020
|
Expected term (years)
|
| |
5.66 – 6.09
|
| |
5.99 – 6.17
|
Expected volatility
|
| |
52.01% - 54.10%
|
| |
51.52% - 51.58%
|
Risk-free interest rate
|
| |
1.63% - 2.3%
|
| |
1.60% - 1.61%
|
Expected dividends
|
| |
—
|
| |
—
|
Grant date fair value per option
|
| |
$10.49 - $10.71
|
| |
$23.55 - $23.58
|
13.
|
Net loss per share
|
|
| |
Years Ended December 31,
|
|||
|
| |
2019
|
| |
2020
|
Basic and diluted:
|
| |
|
| |
|
Net loss
|
| |
$13,495
|
| |
$15,924
|
Weighted-average number of common shares outstanding
|
| |
7,523
|
| |
8,344
|
Basic and diluted loss per share
|
| |
$1.79
|
| |
$1.91
|
|
| |
As of December 31,
|
|||
|
| |
2019
|
| |
2020
|
Shares of common stock issuable under stock option plans outstanding
|
| |
980
|
| |
1,034
|
Shares of common stock issuable upon vesting of restricted stock awards
|
| |
637
|
| |
1,711
|
Potential common shares excluded from diluted net loss per share
|
| |
1,617
|
| |
2,745
|
14.
|
Income Taxes
|
|
| |
Years Ended December 31,
|
|||
|
| |
2019
|
| |
2020
|
U.S.
|
| |
$(13,534)
|
| |
$(16,269)
|
Foreign
|
| |
—
|
| |
262
|
Total loss before income taxes
|
| |
$(13,534)
|
| |
$(16,007)
|
|
| |
Years Ended December 31,
|
|||
|
| |
2019
|
| |
2020
|
Income tax expense (benefit) derived by applying the federal statutory tax
rate to income (loss) before income taxes
|
| |
$(2,842)
|
| |
$(3,362)
|
State taxes, net of federal
|
| |
(551)
|
| |
(215)
|
Research and experimentation tax credit
|
| |
(118)
|
| |
(179)
|
Valuation allowance
|
| |
3,184
|
| |
3,523
|
Stock compensation
|
| |
225
|
| |
406
|
Dividends received deduction
|
| |
—
|
| |
(308)
|
Permanent differences and other
|
| |
63
|
| |
52
|
|
| |
$(39)
|
| |
$(83)
|
|
| |
As of December 31,
|
|||
|
| |
2019
|
| |
2020
|
Deferred tax assets:
|
| |
|
| |
|
Fixed assets and intangibles
|
| |
$156
|
| |
$135
|
Leases
|
| |
—
|
| |
106
|
Accrued expenses
|
| |
333
|
| |
2,066
|
Net operating loss carryforward
|
| |
4,626
|
| |
6,679
|
Capital loss carryforward
|
| |
501
|
| |
—
|
Investment difference
|
| |
—
|
| |
148
|
R&D credit carryforward
|
| |
181
|
| |
325
|
Subtotal
|
| |
5,797
|
| |
9,459
|
Less valuation allowance
|
| |
(5,774)
|
| |
(9,297)
|
Total deferred tax asset
|
| |
23
|
| |
162
|
|
| |
|
| |
|
Deferred tax (liabilities):
|
| |
|
| |
|
Investment difference
|
| |
(15)
|
| |
—
|
Leases
|
| |
—
|
| |
(101)
|
Prepaid expenses
|
| |
(11)
|
| |
(61)
|
Total deferred tax (liability)
|
| |
(26)
|
| |
(162)
|
Net deferred tax asset (liability)
|
| |
$(3)
|
| |
$—
|
|
| |
Years Ended December 31,
|
|||
|
| |
2019
|
| |
2020
|
Balance, beginning of the year
|
| |
$22
|
| |
$45
|
Increase for tax positions related to the current year
|
| |
23
|
| |
36
|
Decrease for tax positions related to prior years
|
| |
—
|
| |
—
|
Balance, end of year
|
| |
$45
|
| |
$81
|
15.
|
Retirement Plan
|
16.
|
Segment Information
|
|
| |
Years Ended December 31,
|
|||
|
| |
2019
|
| |
2020
|
United States
|
| |
$45,264
|
| |
$187,093
|
Vietnam
|
| |
7,149
|
| |
38
|
Other
|
| |
711
|
| |
221
|
Total net revenue
|
| |
$53,124
|
| |
$187,352
|
17.
|
Related Parties
|
18.
|
Subsequent Events
|
|
| |
Years Ended December 31,
|
|||
|
| |
2019
|
| |
2020
|
Numerator
|
| |
|
| |
|
Net loss
|
| |
$(13,495)
|
| |
$(15,924)
|
Denominator
|
| |
|
| |
|
Weighted-average shares used in computing pro forma net loss per share only after giving effect of a 8.25-for-1 stock split, basic and diluted
|
| |
62,043
|
| |
68,811
|
Pro forma net loss per share, basic and diluted
|
| |
$(0.22)
|
| |
$(0.23)
|
Barclays
|
| |
BofA Securities
|
| |
Credit Suisse
|
| |
UBS Investment Bank
|
|
|||
HSBC
|
|||
Cowen
|
Simmons Energy | A Division of Piper Sandler
|
Raymond James
|
Roth Capital Partners
|
Item 13.
|
Other Expenses of Issuance and Distribution.
|
Expenses of Issuance and Distribution ($ thousands)
|
| |
$ Amount
to be Paid
|
SEC registration fee
|
| |
$46,224
|
FINRA filing fee
|
| |
53,000
|
Nasdaq listing fee
|
| |
295,000
|
Transfer agent and registrar fees
|
| |
4,500
|
Printing expenses
|
| |
130,000
|
Legal fees and expenses
|
| |
2,500,000
|
Accounting fees and expenses
|
| |
2,800,000
|
Blue Sky fees and expenses
|
| |
45,000
|
Miscellaneous expenses
|
| |
50,000
|
Total
|
| |
$5,923,724
|
Item 14.
|
Indemnification of Directors and Officers.
|
Item 15.
|
Recent Sales of Unregistered Securities.
|
Item 16.
|
Exhibits and Financial Statement Schedules.
|
(a)
|
Exhibits. See the Exhibit Index immediately preceding the signature pages hereto, which is incorporated by reference as if fully set forth herein.
|
(b)
|
Financial Statement Schedules. None.
|
Item 17.
|
Undertakings.
|
(a)
|
For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
|
(b)
|
For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
|
Exhibit
Number
|
| |
Description
|
| |
Form of Underwriting Agreement
|
|
| |
Certificate of Incorporation of FTC Solar, Inc., as currently in effect(a)
|
|
| |
Form of Amended and Restated Certificate of Incorporation of FTC Solar, Inc., to be in effect upon the completion of this offering
|
|
| |
Bylaws of FTC Solar, Inc., as currently in effect(a)
|
|
| |
Form of Amended and Restated Bylaws of FTC Solar, Inc., to be in effect upon the completion of this offering
|
|
| |
Form of Specimen Common Stock Certificate
|
|
| |
Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
|
|
| |
FTC Solar, Inc. 2017 Stock Incentive Plan(b)
|
|
| |
FTC Solar, Inc. 2021 Stock Incentive Plan and form of agreement(b)
|
|
| |
FTC Solar, Inc. 2021 Employee Stock Purchase Plan(b)
|
|
| |
Form of Indemnification Agreement
|
|
| |
Form of Employment Agreement by and between FTC Solar, Inc. and Anthony P. Etnyre(b)
|
|
| |
Form of Employment Agreement by and between FTC Solar, Inc. and Patrick M. Cook(b)
|
|
| |
Form of Employment Agreement by and between FTC Solar, Inc. and Jay B. Grover(b)
|
|
| |
Form of Registration Rights Agreement, by and among FTC Solar, Inc. and certain holders of its capital stock
|
|
| |
List of Subsidiaries of FTC Solar, Inc.(a)
|
|
| |
Consent of PricewaterhouseCoopers LLP
|
|
| |
Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5.1)
|
|
| |
Consent of Eclipse-M(a)
|
|
| |
Power of Attorney (included in signature page)
|
(a)
|
Previously filed.
|
(b)
|
Management contract or compensatory plan or arrangement.
|
|
| |
FTC SOLAR, INC.
|
|||
|
| |
|
| ||
|
| |
By:
|
| |
/s/ Anthony P. Etnyre
|
|
| |
|
| |
Name: Anthony P. Etnyre
|
|
| |
|
| |
Title: Chief Executive Officer
|
Signature
|
| |
Title
|
| |
Date
|
|
| |
|
| |
|
/s/ Anthony P. Etnyre
|
| |
Chief Executive Officer and Director
(Principal Executive Officer)
|
| |
April 19, 2021
|
Anthony P. Etnyre
|
| |||||
|
| |||||
/s/ Patrick M. Cook
|
| |
Chief Financial Officer
(Principal Financial Officer)
|
| |
April 19, 2021
|
Patrick M. Cook
|
| |||||
|
| |||||
/s/ M. Cathy Behnen
|
| |
Chief Accounting Officer
(Principal Accounting Officer)
|
| |
April 19, 2021
|
M. Cathy Behnen
|
| |||||
|
| |||||
*
|
| |
Director
|
| |
April 19, 2021
|
T.J. Rodgers
|
| |||||
|
| |||||
*
|
| |
Director
|
| |
April 19, 2021
|
David Springer
|
| |||||
|
| |||||
*
|
| |
Director
|
| |
April 19, 2021
|
Ahmad Chatila
|
| |||||
|
| |||||
*
|
| |
Director
|
| |
April 19, 2021
|
William Aldeen (“Dean”) Priddy, Jr.
|
|
Signature
|
| |
Title
|
| |
Date
|
|
| |||||
*
|
| |
Director
|
| |
April 19, 2021
|
Isidoro Quiroga Cortés
|
| |||||
|
| |||||
*
|
| |
Director
|
| |
April 19, 2021
|
Shaker Sadasivam
|
| |||||
|
| |
|
| |
|
/s/ Lisan Hung
|
| |
Director
|
| |
April 19, 2021
|
Lisan Hung
|
|
*By:
|
| |
/s/ Anthony P. Etnyre
|
| |
|
|
| |
Anthony P. Etnyre
|
| |
|
|
| |
Attorney-in-fact
|
| |
|
Very truly yours,
|
||
FTC SOLAR, INC.
|
||
By:
|
||
Name:
|
||
Title:
|
By:
|
||
Name:
|
||
Title:
|
By:
|
||
Name:
|
||
Title:
|
By:
|
||
Name:
|
||
Title:
|
By:
|
||
Name:
|
||
Title:
|
Underwriters
|
Number of Shares of Firm Stock
|
Number of Shares of Option Stock
|
Barclays Capital Inc.
|
||
BofA Securities, Inc.
|
||
Credit Suisse Securities (USA) LLC
|
||
UBS Securities LLC
|
||
HSBC Securities (USA) Inc.
|
||
Cowen and Company, LLC
|
||
Piper Sandler & Co.
|
||
Raymond James & Associates, Inc.
|
||
Roth Capital Partners, LLC
|
||
Total:
|
|
i. |
the sale of Common Stock to the Company under stock repurchase agreements entered into in connection with the Offering as described in the Prospectus;
|
|
ii. |
transactions relating to shares of Common Stock or other securities acquired in the open market after the completion of the offering;
|
|
iii. |
bona fide gifts, sales or other dispositions of shares of any class of the Company’s capital stock or Derivative Instruments, in each case that are made exclusively
between and among the undersigned or members of the undersigned’s family, or a charitable contribution of the Company’s capital stock;
|
|
iv. |
transfers of shares of Common Stock or Derivative Instruments to any beneficiary of or estate of a beneficiary of the undersigned pursuant to a trust, will, other
testamentary document or intestate succession or applicable laws of descent;
|
|
v. |
transfers of shares of Common Stock or Derivative Instruments by operation of law, such as pursuant to a qualified domestic order of a court (including a divorce
settlement, divorce decree or separation agreement) or regulatory agency;
|
|
vi. |
transfers of shares of Common Stock or Derivative Instruments to any direct or indirect wholly owned subsidiary, limited partners, members, stockholders, other equity
holders or trust beneficiaries of the undersigned or to any investment fund or other entity that is controlled or managed by or under common control with the undersigned, or, if the undersigned is a trust, to a trustor, trustee or
beneficiary of the trust or to the estate of a beneficiary of such trust;
|
|
vii. |
the (i) exercise of warrants, stock options or any other equity awards granted pursuant to the Company’s stock option/incentive plans or otherwise outstanding on the
date hereof, (ii) transfer of shares of Common Stock for the primary purpose of satisfying any tax or other governmental withholding obligation with respect to any award of equity-based compensation granted pursuant to the Company’s
incentive plans, and (iii) forfeitures of shares of Common Stock to the Company to satisfy tax withholding requirements of the undersigned or the Company upon the vesting, during the Lock-Up Period, of equity based awards granted under
incentive plans or pursuant to other stock purchase agreements; provided, that, in each case, the restrictions shall apply to the
underlying shares of Common Stock;
|
|
viii. |
transactions pursuant to a bona fide third-party tender offer, merger, consolidation or other similar transaction made to all holders of the Company’s capital stock
after the consummation of the public offering, involving a change of control of the Company, the result of which is that any “person” (as defined in Section 13(d)(3) of the Exchange Act (as defined below)) or group of persons, shall become,
after the closing of the transaction, the beneficial owner (as defined in Rule 13d-3 and 13d-5 of the Exchange Act) of more than 50% of total voting power of the voting securities of the Company, provided that in the event that such tender offer, merger, consolidation or other such transaction is not completed, the undersigned’s shares of Common Stock shall remain
subject to the provisions of this Lock-Up Letter Agreement;
|
|
ix. |
transfers to the Company in connection with the repurchase by the Company from the undersigned of shares of Common Stock or Derivative Instruments pursuant to a
repurchase right arising upon the termination of the undersigned’s employment with the Company; provided that such repurchase right is
pursuant to contractual agreements with the Company;
|
|
x. |
the establishment of any contract, instruction or plan that satisfies all of the requirements of Rule 10b5-1 (a “Rule 10b5-1 Plan”) under the Exchange Act; provided, however, that no sales of Common Stock or securities convertible into, or exchangeable or exercisable for, Common Stock, shall be made
pursuant to a Rule 10b5-1 Plan prior to the expiration of the Lock-Up Period; provided further, that the Company is not required to report the establishment of such Rule 10b5-1 Plan in any public report or filing with the Commission under the Exchange Act during
the Lock-Up Period and does not otherwise voluntarily effect any such public filing or report regarding such Rule 10b5-1 Plan;
|
|
xi. |
any demands or requests for, exercises of any right with respect to, or taking of any action in preparation of (including confidential submission of any registration
statement for), the registration by the Company under the Securities Act (as defined below) of the undersigned’s shares of Common Stock, provided that no transfer of the undersigned’s shares of Common Stock registered pursuant to the
exercise of any such right and no registration statement shall be publicly filed under the Securities Act with respect to any of the undersigned’s shares of Common Stock during the Lock-Up Period; and
|
|
xii. |
any transactions with the prior written consent of the Representatives on behalf of the Underwriters;
|
Very truly yours,
|
|||
By:
|
|||
Name:
|
|||
Title:
|
|||
Dated:
|
FTC SOLAR, INC.
|
|||
By:
|
/s/ Anthony P. Etnyre
|
||
Name:
|
Anthony P. Etnyre
|
||
Title:
|
Chief Executive Officer
|
Article I OFFICES
|
4
|
|
Section 1.1
|
Registered Office
|
4
|
Section 1.2
|
Other Offices
|
4
|
Article II MEETINGS OF STOCKHOLDERS
|
4
|
|
Section 2.1
|
Place of Meetings
|
4
|
Section 2.2
|
Annual Meetings
|
4
|
Section 2.3
|
Special Meetings
|
4
|
Section 2.4
|
Nature of Business at Meetings of Stockholders
|
4
|
Section 2.5
|
Nomination of Directors
|
5
|
Section 2.6
|
Notice
|
7 |
Section 2.7
|
Adjournments
|
7 |
Section 2.8
|
Quorum
|
7 |
Section 2.9
|
Voting
|
7 |
Section 2.10
|
Proxies
|
7 |
Section 2.11
|
Consent of Stockholders in Lieu of Meeting
|
8
|
Section 2.12
|
List of Stockholders Entitled to Vote
|
8 |
Section 2.13
|
Record Date
|
8 |
Section 2.14
|
Stock Ledger
|
9 |
Section 2.15
|
Conduct of Meetings
|
9 |
Section 2.16
|
Inspectors of Election
|
9 |
Article III DIRECTORS
|
9 | |
Section 3.1
|
Number and Election of Directors
|
9 |
Section 3.2
|
Vacancies
|
10 |
Section 3.3
|
Duties and Powers
|
10 |
Section 3.4
|
Meetings
|
10 |
Section 3.5
|
Organization
|
10 |
Section 3.6
|
Resignations and Removals of Directors
|
10 |
Section 3.7
|
Quorum
|
10 |
Section 3.8
|
Actions of the Board by Written Consent
|
11 |
Section 3.9
|
Meetings by Means of Conference Telephone
|
11 |
Section 3.10
|
Committees
|
11 |
Section 3.11
|
Compensation
|
11 |
Section 3.12
|
Interested Directors
|
11 |
|
Article IV OFFICERS
|
12 | |
Section 4.1
|
General
|
12 |
Section 4.2
|
Election
|
12 |
Section 4.3
|
Voting Securities Owned by the Corporation
|
12 |
Section 4.4
|
Chairman of the Board of Directors
|
12 |
Section 4.5
|
President
|
12 |
Section 4.6
|
Vice Presidents
|
12 |
Section 4.7
|
Secretary
|
12 |
Section 4.8
|
Treasurer
|
13 |
Section 4.9
|
Assistant Secretaries
|
13 |
Section 4.10
|
Assistant Treasurers
|
13 |
Section 4.11
|
Other Officers
|
13 |
Article V STOCK
|
13 | |
Section 5.1
|
Shares of Stock
|
13 |
Section 5.2
|
Signatures
|
13 |
Section 5.3
|
Lost Certificates
|
13 |
Section 5.4
|
Transfers
|
14 |
Section 5.5
|
Dividend Record Date
|
14 |
Section 5.6
|
Record Owners
|
14 |
Section 5.7
|
Transfer and Registry Agents
|
14 |
Article VI NOTICES
|
14 | |
Section 6.1
|
Notices
|
14 |
Section 6.2
|
Waivers of Notice
|
15 |
Article VII GENERAL PROVISIONS
|
15 | |
Section 7.1
|
Dividends
|
15 |
Section 7.2
|
Disbursements
|
15 |
Section 7.3
|
Fiscal Year
|
15
|
Section 7.4
|
Corporate Seal
|
15
|
Article VIII INDEMNIFICATION
|
15 | |
Section 8.1
|
Actions not by or in the Right of the Corporation
|
15 |
Section 8.2
|
Actions by or in the Right of the Corporation
|
15 |
Section 8.3
|
Authorization of Indemnification
|
16 |
Section 8.4
|
Good Faith Defined
|
16 |
Section 8.5
|
Indemnification by a Court
|
16 |
Section 8.6
|
Expenses Payable in Advance
|
16 |
Section 8.7
|
Nonexclusivity of Indemnification and Advancement of Expenses
|
16 |
Section 8.8
|
Insurance
|
17 |
Section 8.9
|
Certain Definitions
|
17 |
Section 8.10
|
Survival of Indemnification and Advancement of Expenses
|
17 |
Section 8.11
|
Limitation on Indemnification
|
17 |
Section 8.12
|
Indemnification of Employees and Agents
|
17 |
Article IX FORUM FOR ADJUDICATION OF CERTAIN DISPUTES
|
17 | |
Section 9.1
|
Forum for Adjudication of Certain Disputes
|
17 |
Article X AMENDMENTS
|
18 | |
Section 10.1
|
Amendments
|
18 |
Section 10.2
|
Entire Board of Directors
|
18 |
FTC Solar, Inc.
9020 N Capital of Texas Hwy, Suite I-260,
Austin, Texas 78759
|
|
Re: |
FTC Solar, Inc.
Registration Statement on Form S‑1 |
Very truly yours,
|
|
/s/ Skadden, Arps, Slate, Meagher & Flom LLP
|
Exhibit 10.1
FTC SOLAR, INC.
2017 Stock Incentive Plan
Adopted by the Board on January 9, 2017
Approved by the Stockholders on January 9, 2017
TABLE OF CONTENTS
Page | ||||
SECTION 1. | PURPOSE | 1 | ||
SECTION 2. | DEFINITIONS | 1 | ||
2.1 | “Award” | 1 | ||
2.2 | “Award Agreement” | 1 | ||
2.3 | “Board” | 1 | ||
2.4 | “Cause” | 1 | ||
2.5 | “Change in Control” | 2 | ||
2.6 | “Code” | 3 | ||
2.7 | “Committee” | 3 | ||
2.8 | “Company” | 3 | ||
2.9 | “Consultant” | 3 | ||
2.10 | “Disability” | 3 | ||
2.11 | “Employee” | 3 | ||
2.12 | “Exchange Act” | 3 | ||
2.13 | “Exercise Price” | 3 | ||
2.14 | “Fair Market Value” | 3 | ||
2.15 | “ISO” | 3 | ||
2.16 | “NSO” | 3 | ||
2.17 | “Option” | 3 | ||
2.18 | “Other Stock Award” | 3 | ||
2.19 | “Outside Director” | 3 | ||
2.20 | “Parent” | 3 | ||
2.21 | “Participant” | 4 | ||
2.22 | “Plan” | 4 | ||
2.23 | “Purchase Price” | 4 | ||
2.24 | “Restricted Stock Award” | 4 | ||
2.25 | “Restricted Stock Unit” | 4 | ||
2.26 | “Securities Act” | 4 | ||
2.27 | “Service” | 4 | ||
2.28 | “Share” | 4 | ||
2.29 | “Stock” | 4 | ||
2.30 | “Stock Appreciation Right” or “SAR” | 4 | ||
2.31 | “Subsidiary” | 4 | ||
2.32 | “Ten-Percent Stockholder” | 4 | ||
SECTION 3. | ADMINISTRATION | 5 | ||
3.1 | General Rule | 5 | ||
3.2 | Board Authority and Responsibility | 5 | ||
SECTION 4. | ELIGIBILITY | 5 |
SECTION 5. | STOCK SUBJECT TO PLAN | 5 | ||
5.1 | Share Limit | 5 | ||
5.2 | Additional Shares | 5 | ||
5.3 | Incentive Stock Option Limit | 5 | ||
SECTION 6. | RESTRICTED STOCK | 6 | ||
6.1 | Restricted Stock Award | 6 | ||
6.2 | Duration of Offers and Nontransferability of Rights | 6 | ||
6.3 | Consideration | 6 | ||
6.4 | Vesting Restrictions | 6 | ||
SECTION 7. | STOCK OPTIONS | 6 | ||
7.1 | Stock Option Award | 6 | ||
7.2 | Number of Shares; Kind of Option | 6 | ||
7.3 | Exercise Price | 7 | ||
7.4 | Term | 7 | ||
7.5 | Exercisability | 7 | ||
7.6 | Transferability of Options | 7 | ||
7.7 | Exercise of Options on Termination of Service | 8 | ||
7.8 | No Rights as a Stockholder | 8 | ||
7.9 | Modification, Extension and Renewal of Options | 8 | ||
SECTION 8. | STOCK APPRECIATION RIGHTS. | 8 | ||
8.1 | Stock Appreciation Right Award | 8 | ||
8.2 | Number of Shares | 9 | ||
8.3 | Exercise Price | 9 | ||
8.4 | Term | 9 | ||
8.5 | Exercisability | 9 | ||
8.6 | Exercise of SARs | 9 | ||
8.7 | Transferability of SARs | 9 | ||
8.8 | Exercise of SARs on Termination of Service | 9 | ||
8.9 | No Rights as a Stockholder | 10 | ||
8.10 | Modification, Extension and Renewal of SARs | 10 | ||
SECTION 9. | RESTRICTED STOCK UNITS AND OTHER STOCK AWARDS | 10 | ||
9.1 | Restricted Stock Unit Award | 10 | ||
9.2 | Number of Shares; Payment | 10 | ||
9.3 | Vesting Conditions | 10 | ||
9.4 | Settlement of Restricted Stock Units | 11 | ||
9.5 | Transfer Restrictions | 11 | ||
9.6 | No Rights as a Stockholder | 11 | ||
9.7 | Other Stock Awards | 11 | ||
SECTION 10. | PAYMENT FOR SHARES | 11 | ||
10.1 | General | 11 | ||
10.2 | Surrender of Stock | 11 | ||
10.3 | Services Rendered | 11 | ||
10.4 | Promissory Notes | 11 |
10.5 | Exercise/Sale | 12 | ||
10.6 | Exercise/Pledge | 12 | ||
10.7 | Net Exercise | 12 | ||
10.8 | Other Forms of Payment | 12 | ||
SECTION 11. | ADJUSTMENT OF SHARES | 12 | ||
11.1 | General | 12 | ||
11.2 | Dissolution or Liquidation | 13 | ||
11.3 | Mergers, Consolidations and Other Corporate Transactions | 13 | ||
11.4 | Reservation of Rights | 13 | ||
11.5 | Buyout Provisions | 14 | ||
SECTION 12. | REPURCHASE RIGHTS AND TRANSFER RESTRICTIONS | 14 | ||
12.1 | Company’s Right to Repurchase Shares | 14 | ||
SECTION 13. | WITHHOLDING AND OTHER TAXES | 14 | ||
13.1 | General | 14 | ||
13.2 | Share Withholding | 14 | ||
13.3 | Cashless Exercise/Pledge | 14 | ||
13.4 | Other Forms of Payment | 14 | ||
13.5 | Employer Fringe Benefit Taxes | 14 | ||
13.6 | Section 409A | 15 | ||
SECTION 14. | LEGAL AND REGULATORY REQUIREMENTS | 15 | ||
SECTION 15. | NO RETENTION RIGHTS | 15 | ||
SECTION 16. | DURATION AND AMENDMENTS | 16 | ||
16.1 | Term of the Plan | 16 | ||
16.2 | Right to Amend or Terminate the Plan | 16 | ||
16.3 | Effect of Amendment or Termination | 16 | ||
SECTION 17. | EXECUTION | 16 |
FTC SOLAR, INC.
2017 STOCK INCENTIVE PLAN
SECTION 1. PURPOSE.
The Plan was adopted by the Board of Directors effective January 9, 2017. The purpose of the Plan is to offer selected service providers the opportunity to acquire equity in the Company through awards of Options (which may constitute incentive stock options or nonstatutory stock options), Restricted Stock Awards, Stock Appreciation Rights, Restricted Stock Units and Other Stock Awards.
The Awards under the Plan are intended to be exempt from the securities qualification requirements of the California Corporations Code by satisfying the exemption under section 25102(o) of the California Corporations Code. However, Awards may be made in reliance upon other state securities law exemptions. To the extent that other state exemptions are relied upon, the terms of this Plan which are included only to comply with section 25102(o) shall be disregarded to the extent provided in the applicable Award Agreement. In addition, to the extent that section 25102(o) or the regulations promulgated thereunder are amended to delete any requirements set forth in such law or regulations, the terms of this Plan which are included only to comply with section 25102(o) or the regulations promulgated thereunder as in effect prior to any such amendment shall be disregarded to the extent permitted by applicable law.
SECTION 2. DEFINITIONS.
2.1 | “Award” shall mean, individually or collectively, a grant under the Plan of Options, Restricted Stock Awards, Stock Appreciation Rights, Restricted Stock Units or Other Stock Awards. |
2.2 | “Award Agreement” shall mean the written or electronic agreement setting forth the terms and provisions applicable to each Award granted under the Plan, as determined by the Board. The Award Agreement is subject to the terms and conditions of the Plan. |
2.3 | “Board” shall mean the Board of Directors of the Company, as constituted from time to time. |
2.4 | “Cause” shall mean (i) in the case where the Employee, Consultant or Outside Director does not have an employment agreement, consulting agreement or similar agreement in effect with the Company or its affiliate at the time of grant of the Award or where there is such an agreement but it does not define “cause” (or words of like import), conduct related to the Employee’s, Consultant’s or Outside Director’s service to the Company or an affiliate for which either criminal or civil penalties against the Employee, Consultant or Outside Director may be sought, misconduct, insubordination, material violation of the Company’s or its affiliate’s policies, disclosing or misusing any confidential information or material concerning the Company or an affiliate or material breach of any employment agreement, consulting agreement or similar agreement, or (ii) in the case where the Employee, Consultant or Outside Director has an employment agreement, consulting agreement or similar agreement in effect with the Company or its affiliate at the time of grant of the Award that defines a termination for “cause” (or words of like import), “cause” as defined in such agreement; provided, however, that with regard to any agreement that defines “cause” on occurrence of or in connection with a change in control, such definition of “cause” shall not apply until a change in control actually occurs and then only with regard to a termination thereafter. Notwithstanding the foregoing, in the case of an Award which is intended to comply with section 25102(o) of the California Corporations Code, such event must also constitute “cause” under applicable law. |
2.5 | “Change in Control” shall mean the occurrence of any of the following events: |
(a) | The consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, if persons who were not stockholders of the Company immediately prior to such merger, consolidation or other reorganization own immediately after such merger, consolidation or other reorganization fifty percent (50%) or more of the voting power of the outstanding securities of each of (A) the continuing or surviving entity and (B) any direct or indirect parent corporation of such continuing or surviving entity; |
(b) | The consummation of the sale, transfer or other disposition of all or substantially all of the Company’s assets or the stockholders of the Company approve a plan of complete liquidation of the Company; or |
(c) | Any “person” (as defined below) who, by the acquisition or aggregation of securities, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the combined voting power of the Company’s then outstanding securities ordinarily (and apart from rights accruing under special circumstances) having the right to vote at elections of directors (the “Base Capital Stock”); except that any change in the relative beneficial ownership of the Company’s securities by any person resulting solely from a reduction in the aggregate number of outstanding shares of Base Capital Stock, and any decrease thereafter in such person’s ownership of securities, shall be disregarded until such person increases in any manner, directly or indirectly, such person’s beneficial ownership of any securities of the Company. |
For purposes of Section 2.5(c), the term “person” shall have the same meaning as when used in sections 13(d) and 14(d) of the Exchange Act but shall exclude (1) a trustee or other fiduciary holding securities under an employee benefit plan maintained by the Company or a Parent or Subsidiary and (2) a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the Stock.
Notwithstanding the foregoing, the term “Change in Control” shall not include (a) a transaction the sole purpose of which is to change the state of the Company’s incorporation, (b) a transaction the sole purpose of which is to form a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction, (c) a transaction the sole purpose of which is to make an initial public offering of the Company’s Stock or (d) any change in the beneficial ownership of the securities of the Company as a result of a private financing of the Company that is approved by the Board.
2.6 | “Code” shall mean the Internal Revenue Code of 1986, as amended. |
2.7 | “Committee” shall mean the committee designated by the Board, which is authorized to administer the Plan, as described in Section 3 hereof. |
2.8 | “Company” shall mean FTC Solar, Inc., a Delaware corporation. |
2.9 | “Consultant” shall mean a consultant or advisor who is not an Employee or Outside Director and who performs bona fide services for the Company, a Parent or Subsidiary. |
2.10 | “Disability” shall mean a condition that renders an individual unable to engage in substantial gainful activity by reason of any medically determinable physical or mental impairment. |
2.11 | “Employee” shall mean any individual who is a common-law employee of the Company, a Parent or a Subsidiary and who is an “employee” within the meaning of section 3401(c) of the Code and regulations issued thereunder. |
2.12 | “Exchange Act” shall mean the U.S. Securities and Exchange Act of 1934, as amended. |
2.13 | “Exercise Price” shall mean the amount for which one Share may be purchased upon the exercise of an Option, or the amount from which appreciation is measured upon exercise of a Stock Appreciation Right, as specified in an Award Agreement. |
2.14 | “Fair Market Value” means, with respect to a Share, the market price of one Share of Stock, determined by the Board in good faith. Such determination shall be conclusive and binding on all persons. |
2.15 | “ISO” shall mean an incentive stock option described in section 422(b) of the Code. |
2.16 | “NSO” shall mean a stock option that is not an ISO. |
2.17 | “Option” shall mean an ISO or NSO granted under the Plan and entitling the holder to purchase Shares. |
2.18 | “Other Stock Award” shall mean an Award based in whole or in part by reference to Stock which is granted pursuant to the terms and conditions of Section 9.7 of the Plan. |
2.19 | “Outside Director” shall mean a member of the Board of the Company, a Parent or a Subsidiary who is not an Employee. |
2.20 | “Parent” shall mean any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be considered a Parent commencing as of such date. |
2.21 | “Participant” shall mean the holder of an outstanding Award. |
2.22 | “Plan” shall mean the FTC Solar, Inc. 2017 Stock Incentive Plan. |
2.23 | “Purchase Price” shall mean the consideration for which one Share may be acquired under the Plan pursuant to a Restricted Stock Award. |
2.24 | “Restricted Stock Award” shall mean an award or sale of Shares pursuant to the terms and conditions of Section 6 of the Plan. |
2.25 | “Restricted Stock Unit” shall mean an Award of an unfunded and unsecured right to receive Shares (or cash or a combination of Shares and cash, as determined in the sole discretion of the Board) upon settlement of the Award, which is granted pursuant to the terms and conditions of Section 9 of the Plan. |
2.26 | “Securities Act” shall mean the U.S. Securities Act of 1933, as amended. |
2.27 | “Service” shall mean service as an Employee, a Consultant or an Outside Director, subject to such further limitations as may be set forth in the applicable Award Agreement. Service shall be deemed to continue during a bona fide leave of absence approved by the Company in writing if and to the extent that continued crediting of Service for purposes of the Plan is expressly required by the terms of such leave or by applicable law, as determined by the Company. However, for purposes of determining whether an Option is entitled to ISO status, and to the extent required under the Code, an Employee’s employment will be treated as terminating three (3) months after such Employee went on leave, unless such Employee’s right to return to active work is guaranteed by law or by a contract or such Employee immediately returns to active work. The Company determines which leaves count toward Service, and when Service terminates for all purposes under the Plan. |
2.28 | “Share” shall mean one share of Stock, as adjusted in accordance with Section 11 (if applicable). |
2.29 | “Stock” shall mean the common stock of the Company. |
2.30 | “Stock Appreciation Right” or “SAR” shall mean a stock appreciation right which is granted pursuant to the terms and conditions of Section 8 of the Plan. |
2.31 | “Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date. |
2.32 | “Ten-Percent Stockholder” means an individual who owns more than ten percent (10%) of the total combined voting power of all classes of outstanding stock of the Company, its Parent or any of its Subsidiaries. In determining stock ownership for purposes of this Section 2.32, the attribution rules of section 424(d) of the Code shall be applied. |
SECTION 3. ADMINISTRATION.
3.1 | General Rule. The Plan shall be administered by the Board. However, the Board may delegate any or all administrative functions under the Plan otherwise exercisable by the Board to one or more Committees. Each Committee shall consist of at least one member of the Board who has been appointed by the Board. Each Committee shall have the authority and be responsible for such functions as the Board has assigned to it. If a Committee has been appointed, any reference to the Board in the Plan shall be construed as a reference to the Committee to whom the Board has assigned a particular function. To the extent permitted by applicable law, the Board may also authorize one or more officers of the Company to designate Employees, other than such authorized officer or officers, to receive Awards and/or to determine the number of such Awards to be received by such persons; provided, however, that the Board shall specify the total number of Awards that such officer or officers may so award. |
3.2 | Board Authority and Responsibility. Subject to the provisions of the Plan, the Board shall have full authority and discretion to take any actions it deems necessary or advisable for the administration of the Plan. All decisions, interpretations and any other actions of the Board with respect to the Plan shall be final and binding on all persons deriving rights under the Plan. |
SECTION 4. ELIGIBILITY.
Only Employees shall be eligible for the grant of ISOs. Only Employees, Consultants and Outside Directors shall be eligible for the grant of NSOs, Restricted Stock Awards, Stock Appreciation Rights, Restricted Stock Units or Other Stock Awards.
SECTION 5. STOCK SUBJECT TO PLAN.
5.1 | Share Limit. Subject to Section 11, the aggregate number of Shares which may be issued under the Plan shall be Seven Hundred Seventy-Five Thousand (775,000) Shares (the “Authorized Share Limit”). The number of Shares which are subject to Options or other rights to acquire Shares pursuant to Awards which are outstanding at any time shall not exceed the number of Shares which then remain available for issuance under the Plan. The Company, during the term of the Plan, shall at all times reserve and keep available sufficient Shares to satisfy the requirements of the Plan. Shares offered under the Plan may be authorized but unissued Shares or treasury Shares. |
5.2 | Additional Shares. Shares subject to Awards that are cancelled, forfeited, settled in cash or expire by their terms, and Shares subject to Awards that are used to pay withholding obligations or the Exercise Price of an Option, will again be available for grant and issuance in connection with other Awards. However, Shares that have actually been issued under the Plan will not be added back to the number of Shares available for issuance under the Plan unless reacquired by the Company pursuant to a forfeiture provision. |
5.3 | Incentive Stock Option Limit. Subject to the foregoing limits, the aggregate number of Shares that may be issued under the Plan upon the exercise of ISOs shall not exceed ten times the Authorized Share Limit set forth in Section 5.1 (as amended from time to time and as adjusted pursuant to Section 11), plus, only to the extent allowable under section 422 of the Code, any Shares previously issued under the Plan that are reacquired by the Company pursuant to a forfeiture provision. |
SECTION 6. RESTRICTED STOCK.
6.1 | Restricted Stock Award. Subject to the terms of the Plan, the Board may grant Restricted Stock Awards to Participants in such amounts as the Board, in its sole discretion, may determine. Each award or sale of Shares pursuant to a Restricted Stock Award under the Plan shall be evidenced by an Award Agreement between the Participant and the Company. Such award or sale shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions imposed by the Board, as set forth in the Award Agreement, that are not inconsistent with the Plan. The provisions of such Award Agreements need not be identical. |
6.2 | Duration of Offers and Nontransferability of Rights. Any right to acquire Shares pursuant to a Restricted Stock Award shall automatically expire if not exercised by the Participant within thirty (30) days after the Company communicates the grant of such right to the Participant, unless otherwise determined by the Board. Such right shall be nontransferable and shall be exercisable only by the Purchaser to whom the right was granted, except to the extent otherwise determined by the Board in its sole discretion. |
6.3 | Consideration. To the extent an Award consists of newly issued Shares, the Award recipient shall furnish consideration having a value not less than the par value of such Shares as determined by the Board. Subject to the foregoing in this Section 6.3, the Board shall determine the amount of the Purchase Price in its sole discretion. The Purchase Price shall be payable in a form described in Section 10. |
6.4 | Vesting Restrictions. Each award or sale of Shares shall be subject to such vesting and forfeiture conditions as the Board may determine. Such restrictions shall be set forth in the applicable Award Agreement and, unless otherwise provided in the Award Agreement, shall apply to any dividends paid with respect to such Shares. The vesting of a Restricted Stock Award granted to a Participant for Service as an Outside Director shall be automatically accelerated in full in the event of a Change in Control. |
SECTION 7. STOCK OPTIONS.
7.1 | Stock Option Award. Subject to the terms of the Plan, the Board may grant Options to Participants in such amounts as the Board, in its sole discretion, may determine. Each grant of an Option under the Plan shall be evidenced by an Award Agreement between the Participant and the Company. The Option shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions imposed by the Board, as set forth in the Option Award Agreement, which are not inconsistent with the Plan. The provisions of the various Option Award Agreements entered into under the Plan need not be identical. |
7.2 | Number of Shares; Kind of Option. Each Option Award Agreement shall specify the number of Shares that are subject to the Option and shall provide for the adjustment of such number in accordance with Section 11. The Award Agreement shall also specify whether the Option is intended to be an ISO or an NSO. |
7.3 | Exercise Price. Each Award Agreement shall set forth the Exercise Price, which shall be payable in a form described in Section 10. Subject to the following requirements, the Exercise Price under any Option shall be determined by the Board in its sole discretion: |
(a) | Minimum Exercise Price for ISOs. The Exercise Price per Share of an ISO shall not be less than one hundred percent (100%) of the Fair Market Value of a Share on the date of grant; provided, however, that the Exercise Price per Share of an ISO granted to a Ten-Percent Stockholder shall not be less than one hundred ten percent (110%) of the Fair Market Value of a Share on the date of grant. |
(b) | Minimum Exercise Price for NSOs. The Exercise Price per Share of an NSO shall not be less than one-hundred percent (100%) of the Fair Market Value of a Share on the date of grant. |
7.4 | Term. Each Award Agreement shall specify the term of the Option. The term of an Option shall in no event exceed ten (10) years from the date of grant. The term of an ISO granted to a Ten-Percent Stockholder shall not exceed five (5) years from the date of grant. Subject to the foregoing, the Board in its sole discretion shall determine when an Option shall expire. |
7.5 | Exercisability. Each Award Agreement shall specify the date when all or any installment of the Option is to become exercisable; provided, however, that no Option shall be exercisable unless the Participant has delivered to the Company an executed copy of the Award Agreement. Subject to the following restrictions, the Board in its sole discretion shall determine when all or any installment of an Option is to become exercisable and may, in its discretion, provide for accelerated exercisability in the event of a Change in Control or other events: |
(a) | Options Granted to Outside Directors. The vesting and exercisability of an Option granted to a Participant for Service as an Outside Director shall be automatically accelerated in full in the event of a Change in Control. |
(b) | Early Exercise. An Option Award Agreement may permit the Participant to exercise the Option prior to the time that it has become vested provided that the Shares acquired on exercise will be treated as unvested and subject to a right of repurchase by the Company and any other restrictions that the Board determines appropriate as set forth in the Award Agreement. |
7.6 | Transferability of Options. During a Participant’s lifetime, his or her Options shall be exercisable only by the Participant or by the Participant’s guardian or legal representatives, and shall not be transferable other than by beneficiary designation, will or the laws of descent and distribution. Notwithstanding the foregoing, however, to the extent permitted by the Board in its sole discretion, an NSO may be transferred by the Participant to a revocable trust or to one or more family members or a trust established for the benefit of the Participant and/or one or more family members to the extent permitted by section 260.140.41(c) of Title 10 of the California Code of Regulations and Rule 701 of the Securities Act. |
7.7 | Exercise of Options on Termination of Service. Each Option shall set forth the extent to which the Participant shall have the right to exercise the Option following termination of the Participant’s Service. Each Award Agreement shall provide the Participant with the right to exercise the Option following the Participant’s termination of Service during the Option term, to the extent the Option was exercisable for vested Shares upon termination of Service, for at least thirty (30) days if termination of Service is due to any reason other than Cause, death or Disability, and for at least six (6) months after termination of Service if due to death or Disability (but in no event later than the expiration of the Option term). If the Participant’s Service is terminated for Cause, the Option Award Agreement may provide that the Participant’s right to exercise the Option terminates immediately on the effective date of the Participant’s termination. To the extent the Option was not exercisable for vested Shares upon termination of Service, the Option shall terminate when the Participant’s Service terminates. Subject to the foregoing, such provisions shall be determined in the sole discretion of the Board, need not be uniform among all Options issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination of Service. |
7.8 | No Rights as a Stockholder. A Participant, or a transferee of a Participant, shall have no rights as a stockholder with respect to any Shares covered by the Option until such person becomes entitled to receive such Shares by filing a notice of exercise and paying the Exercise Price pursuant to the terms of the Option. No adjustments shall be made, except as provided in Section 11. |
7.9 | Modification, Extension and Renewal of Options. Within the limitations of the Plan, the Board may modify, extend or renew outstanding Options or may accept the cancellation of outstanding Options (to the extent not previously exercised), whether or not granted hereunder, in return for the grant of new Options for the same or a different number of Shares and at the same or a different Exercise Price, or in return for the grant of a different Award for the same or a different number of Shares. The foregoing notwithstanding, except for a modification required to comply with any applicable law, regulation or rule, no modification of an Option shall, without the consent of the Participant, materially impair his or her rights or increase the Participant’s obligations under such Option; provided, however, that a modification which may cause an ISO to become an NSO shall not be treated as materially impairing a Participant’s rights or increasing a Participant’s obligations under an Award. |
SECTION 8. STOCK APPRECIATION RIGHTS.
8.1 | Stock Appreciation Right Award. Subject to the terms of the Plan, the Board may grant Stock Appreciation Rights to Participants in such amounts as the Board, in its sole discretion, may determine. Each grant of a Stock Appreciation Right under the Plan shall be evidenced by an Award Agreement between the Participant and the Company. The Stock Appreciation Right shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions imposed by the Board, as set forth in the Award Agreement, which are not inconsistent with the Plan. The provisions of the various Stock Appreciation Right Award Agreements entered into under the Plan need not be identical. |
8.2 | Number of Shares. Each Award Agreement shall specify the number of Shares to which the SAR pertains and shall provide for the adjustment of such number in accordance with Section 11. |
8.3 | Exercise Price. Each Award Agreement shall specify the Exercise Price of the SAR. The Exercise Price shall not be less than 100% of the Fair Market Value of a Share on the date of grant. |
8.4 | Term. Each Award Agreement shall specify the term of the SAR. The term of a SAR shall in no event exceed ten (10) years from the date of grant. Subject to the foregoing, the Board in its sole discretion shall determine when an Option shall expire. |
8.5 | Exercisability. Each Award Agreement shall specify the date when all or any installment of the SAR is to become exercisable; provided, however, that no SAR shall be exercisable unless the Participant has delivered to the Company an executed copy of the Award Agreement. The Board in its sole discretion shall determine when all or any installment of a SAR is to become exercisable and may, in its discretion, provide for accelerated exercisability in the event of a Change in Control or other events. The vesting and exercisability of a SAR granted to a Participant for Service as an Outside Director shall be automatically accelerated in full in the event of a Change in Control. SARs may be awarded in combination with Options, and such Awards may provide that the SARs will not be exercisable unless the related Options are forfeited. |
8.6 | Exercise of SARs. Upon exercise of a SAR, the Participant (or any person having the right to exercise the SAR after his or her death) shall receive from the Company (a) Shares, (b) cash or (c) a combination of Shares and cash, as the Board shall determine. The amount of cash and/or the Fair Market Value of Shares received upon exercise of SARs shall, in the aggregate, be equal to the amount by which the Fair Market Value (on the date of surrender) of the Shares subject to the SARs exceeds the Exercise Price. |
8.7 | Transferability of SARs. During a Participant’s lifetime, his or her SARs shall be exercisable only by the Participant or by the Participant’s guardian or legal representatives, and shall not be transferable other than by beneficiary designation, will or the laws of descent and distribution. Notwithstanding the foregoing, however, to the extent permitted by the Board in its sole discretion, a SAR may be transferred by the Participant to a revocable trust or to one or more family members or a trust established for the benefit of the Participant and/or one or more family members to the extent permitted by section 260.140.41(c) of Title 10 of the California Code of Regulations and Rule 701 of the Securities Act. |
8.8 | Exercise of SARs on Termination of Service. Each SAR shall set forth the extent to which the Participant shall have the right to exercise the SAR following termination of the Participant’s Service. Each Award Agreement shall provide the Participant with the right to exercise the SAR following the Participant’s termination of Service during the SAR term, to the extent the SAR was vested upon termination of Service, for at least thirty (30) days if termination of Service is due to any reason other than Cause, death or Disability, and for at least six (6) months after termination of Service if due to death or Disability (but in no event later than the expiration of the SAR term). If the Participant’s Service is terminated for Cause, the SAR Award Agreement may provide that the Participant’s right to exercise the SAR terminates immediately on the effective date of the Participant’s termination. To the extent the SAR was not vested upon termination of Service, the SAR shall terminate when the Participant’s Service terminates. Subject to the foregoing, such provisions shall be determined in the sole discretion of the Board, need not be uniform among all SARs issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination of Service. |
8.9 | No Rights as a Stockholder. A Participant, or a transferee of a Participant, shall have no rights as a stockholder with respect to any Shares covered by the SAR unless and until such person becomes entitled to receive Shares upon exercise of the SAR. No adjustments shall be made, except as provided in Section 11. |
8.10 | Modification, Extension and Renewal of SARs. Within the limitations of the Plan, the Board may modify, extend or renew outstanding SARs or may accept the cancellation of outstanding SARs (to the extent not previously exercised), whether or not granted hereunder, in return for the grant of new SARs for the same or a different number of Shares and at the same or a different Exercise Price, or in return for the grant of a different Award for the same or a different number of Shares. The foregoing notwithstanding, except for a modification required to comply with any applicable law, regulation or rule, no modification of a SAR shall, without the consent of the Participant, materially impair his or her rights or increase the Participant’s obligations under such SAR. |
SECTION 9. RESTRICTED STOCK UNITS AND OTHER STOCK AWARDS.
9.1 | Restricted Stock Unit Award. Subject to the terms of the Plan, the Board may grant Restricted Stock Units to Participants in such amounts as the Board, in its sole discretion, may determine. Each Award of Restricted Stock Units under the Plan shall be evidenced by an Award Agreement between the Participant and the Company. Such Award shall be subject to all applicable terms and conditions of the Plan and any other terms and conditions imposed by the Board, as set forth in the Award Agreement, that are not inconsistent with the Plan. The provisions of the various Restricted Stock Unit Award Agreements entered into under the Plan need not be identical. |
9.2 | Number of Shares; Payment. Each Restricted Stock Unit Award Agreement shall specify the number of Shares that are subject to the Award and shall provide for the adjustment of such number in accordance with Section 11. Unless otherwise provided in the Award Agreement, no consideration other than services shall be required of the Participant for a Restricted Stock Unit Award. |
9.3 | Vesting Conditions. Each Award of Restricted Stock Units may or may not be subject to vesting. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Award Agreement. The Board may determine, at the time of granting Restricted Stock Units or thereafter, that all or part of such Award shall become vested in the event that a Change in Control occurs with respect to the Company. The vesting of a Restricted Stock Unit Award granted to a Participant for Service as an Outside Director shall be automatically accelerated in full in the event of a Change in Control. |
9.4 | Settlement of Restricted Stock Units. Unless otherwise provided in the Award Agreement, Restricted Stock Units shall be settled when they vest. The Award Agreement may provide that settlement may be deferred to any later date, provided that the terms of such deferral satisfy the requirements of section 409A of the Code. Settlement of the Restricted Stock Units may be made in the form of cash or whole Shares or a combination thereof, as determined by the Board in its sole discretion. |
9.5 | Transfer Restrictions. Unless otherwise provided in the Award Agreement, Restricted Stock Units may not be transferred other than by beneficiary designation, will or the laws of descent and distribution. |
9.6 | No Rights as a Stockholder. A Participant, or a transferee of a Participant, shall have no voting, dividend or other rights as a stockholder with respect to any Shares covered by a Restricted Stock Unit Award until such person receives such Shares upon settlement of the Award. Unless the Award Agreement provides otherwise, the Participant shall have no right to be credited with amounts equal to dividends paid on Shares subject to the Restricted Stock Unit Award. A Participant shall have no rights under a Restricted Stock Unit Award other than those of a general creditor of the Company. |
9.7 | Other Stock Awards. The Board may grant other forms of Award under the Plan that are based in whole or in part on Stock or the value thereof. Subject to the provisions of the Plan, the Board shall have authority in its sole discretion to determine the terms and conditions of such Other Stock Awards, including the number of Shares (or the cash equivalent thereof) to be granted pursuant to such Awards. |
SECTION 10. PAYMENT FOR SHARES.
10.1 | General. The entire Purchase Price of Shares or Exercise Price of Options issued under the Plan shall be payable in cash, cash equivalents or one of the other forms provided in this Section 10, to the extent provided under Applicable Law. |
10.2 | Surrender of Stock. To the extent permitted by the Board in its sole discretion, payment may be made in whole or in part by surrendering (in good form for transfer), or attesting to ownership of, Shares which have already been owned by the Participant; provided, however, that payment may not be made in such form if such action would cause the Company to recognize any (or additional) compensation expense with respect to the Award for financial reporting purposes. Such Shares shall be valued at their Fair Market Value on the date of surrender. |
10.3 | Services Rendered. As determined by the Board in its discretion, Shares may be awarded under the Plan in consideration of past or future services rendered to the Company, a Parent or Subsidiary. |
10.4 | Promissory Notes. To the extent permitted by the Board in its sole discretion, payment may be made in whole or in part with a full-recourse promissory note executed by the Participant. The interest rate payable under the promissory note shall not be less than the minimum rate required to avoid the imputation of income for U.S. federal income tax purposes. Shares shall be pledged as security for payment of the principal amount of the promissory note, and interest thereon; provided that if the Participant is a Consultant, such note must be collateralized with such additional security to the extent required by applicable laws. In no event shall the stock certificate(s) representing such Shares be released to the Participant until such note is paid in full. Subject to the foregoing, the Board shall determine the term, interest rate and other provisions of the note. |
10.5 | Exercise/Sale. To the extent permitted by the Board in its sole discretion, and if a public market for the Shares exists, payment may be made in whole or in part by delivery (on a form prescribed by the Company) of an irrevocable direction to a securities broker approved by the Company to sell Shares and to deliver all or part of the sale proceeds to the Company in payment of all or part of the Exercise Price and any withholding taxes. |
10.6 | Exercise/Pledge. To the extent permitted by the Board in its sole discretion, and if a public market for the Shares exists, payment may be made in whole or in part by delivery (on a form prescribed by the Company) of an irrevocable direction to a securities broker or lender approved by the Company to pledge Shares, as security for a loan, and to deliver all or part of the loan proceeds to the Company in payment of all or part of the Exercise Price and any withholding taxes. |
10.7 | Net Exercise. To the extent permitted by the Board in its sole discretion, payment of the Exercise Price may be made by a “net exercise” arrangement pursuant to which the number of Shares issuable upon exercise of the Option shall be reduced by the largest whole number of Shares having an aggregate Fair Market Value that does not exceed the aggregate Exercise Price (plus tax withholdings, if applicable) and any remaining balance of the aggregate Exercise Price (and/or applicable tax withholdings) not satisfied by such reduction in the number of whole Shares to be issued shall be paid by the Participant in cash or other form of payment permitted under the Option Award Agreement. |
10.8 | Other Forms of Payment. To the extent permitted by the Board in its sole discretion, payment may be made in any other form that is consistent with applicable laws, regulations and rules. |
SECTION 11. ADJUSTMENT OF SHARES.
11.1 | General. In the event of a subdivision of the outstanding Stock, a declaration of a dividend payable in Shares, a declaration of an extraordinary dividend payable in a form other than Shares in an amount that has a material effect on the Fair Market Value of the Stock, a combination or consolidation of the outstanding Stock into a lesser number of Shares, a recapitalization, a spin-off, a reclassification, or a similar occurrence, the Board shall make appropriate adjustments to the following: (i) the number and class of Shares available for future Awards under Section 5; (ii) the number and class of Shares covered by each outstanding Award; (iii) the Exercise Price under each outstanding Award; and (iv) the price of Shares subject to the Company’s right of repurchase; provided, however, that fractions of a Share will not be issued but will either be paid in cash at the Fair Market Value of such fraction of a Share or will be rounded down to the nearest whole Share, as determined by the Board. |
11.2 | Dissolution or Liquidation. To the extent not previously exercised or settled, Awards shall terminate immediately prior to the dissolution or liquidation of the Company. |
11.3 | Mergers, Consolidations and Other Corporate Transactions. In the event that the Company is a party to a merger or other consolidation, or in the event of a transaction providing for the sale of all or substantially all of the Company’s stock or assets, or in the event of such other corporate transaction, such as a separation or reorganization, outstanding Awards shall be subject to the agreement of merger, consolidation, sale or other corporate transaction, in each case without the Participant’s consent. Subject to compliance with Section 409A of the Code, such agreement may provide, without limitation, for one or more of the following: (i) the continuation of the outstanding Awards by the Company, if the Company is a surviving corporation; (ii) the assumption, in whole or in part, of the outstanding Awards by the surviving corporation or a successor entity or its parent; (iii) the substitution, in whole or in part, by the surviving corporation or a successor entity or its parent of its own awards for such outstanding Awards; (iv) exercisability and settlement, in whole or in part, of outstanding Awards to the extent vested and exercisable (if applicable) under the terms of the Award Agreement followed by the cancellation of such Awards (whether or not then vested or exercisable) upon or immediately prior to the effectiveness of the transaction; or (v) settlement of the intrinsic value of the outstanding Awards to the extent vested and exercisable (if applicable) under the terms of the Award Agreement, with payment made in cash or cash equivalents or property (including cash or property subject to deferred vesting and delivery consistent with the vesting restrictions applicable to such Awards or the underlying Shares) followed by the cancellation of such Awards (whether or not then vested or exercisable) (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction the Board determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Participant’s rights, then such Award may be terminated by the Company without payment). For avoidance of doubt, the value of any property, including the value of property provided in settlement of an Award, shall be determined by the Committee and, to extent permitted under Section 409A of the Code, the settlement of an Award may provide for payment to be made on a delayed basis and/or contingent basis in recognition of and a reflection of escrows, earn-outs, or other limitations, conditions, contingencies or holdbacks applicable to holders of Stock in connection with the transaction. Any acceleration of payment of an amount that is subject to section 409A of the Code will be delayed, if necessary, until the earliest time that such payment would be permissible under Section 409A without triggering any additional taxes applicable under Section 409A. The Company will have no obligation to treat all Awards, all Awards held by a Participant, or all Awards of the same type, similarly. |
11.4 | Reservation of Rights. Except as provided in this Section 11, a Participant shall have no rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend or any other increase or decrease in the number of shares of stock of any class. Any issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise Price of Shares subject to an Award. The grant of an Award pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or assets. |
11.5 | Buyout Provisions. The Board may at any time (a) offer to buy out for a payment in cash or cash equivalents an Award previously granted, or (b) authorize a Participant to elect to cash out an Award previously granted, in either case at such time and based upon such terms and conditions as the Board shall establish. |
SECTION 12. REPURCHASE RIGHTS AND TRANSFER RESTRICTIONS.
12.1 | Company’s Right to Repurchase Shares. Shares acquired through an Award shall be subject to such forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions as the Board may determine. Such restrictions shall be set forth in the applicable Award Agreement and, unless otherwise provided in the Award Agreement, shall apply to any dividends paid with respect to such Shares. Such restrictions shall apply in addition to any restrictions otherwise applicable to holders of Shares generally. |
SECTION 13. WITHHOLDING AND OTHER TAXES.
13.1 | General. A Participant or his or her successor shall pay, or make arrangements satisfactory to the Board for the satisfaction of, any federal, state, local or foreign withholding tax obligations that may arise in connection with the Plan. The Company shall not be required to issue any Shares or make any cash payment under the Plan if such obligations are not timely satisfied. |
13.2 | Share Withholding. The Board may permit a Participant to satisfy all or part of his or her withholding tax obligations by having the Company withhold all or a portion of any Shares that would otherwise be issued to him or her upon exercise or settlement of an Award, or by surrendering all or a portion of any Shares that he or she previously acquired; provided, however, that in no event may a Participant surrender Shares in excess of the legally required minimum tax withholding amount. Such Shares shall be valued at their Fair Market Value on the date when taxes otherwise would be withheld in cash. Any payment of taxes by assigning Shares to the Company may be subject to restrictions, including any restrictions required by rules of any federal or state regulatory body or other authority. All elections by Participants to have Shares withheld for this purpose shall be made in such form and under such conditions as the Board may deem necessary or advisable. |
13.3 | Cashless Exercise/Pledge. The Board may provide that if Company Shares are publicly traded at the time of exercise, arrangements may be made to meet the Participant’s withholding obligation by cashless exercise or pledge. |
13.4 | Other Forms of Payment. The Board may permit such other means of tax withholding as it deems appropriate. |
13.5 | Employer Fringe Benefit Taxes. To the extent permitted by applicable federal, state, local and foreign law, a Participant shall be liable for any fringe benefit tax that may be payable by the Company and/or the Participant’s employer in connection with any award granted to the Participant under the Plan, which the Company and/or employer may collect by any reasonable method established by the Company and/or employer. |
13.6 | Section 409A. Each Award that provides for “nonqualified deferred compensation” within the meaning of section 409A of the Code shall be subject to such additional rules and requirements as specified by the Board from time to time in order to comply with Section 409A. If any amount under such an Award is payable upon a “separation from service” (within the meaning of section 409A) to a Participant who is then considered a “specified employee” (within the meaning of section 409A), then no such payment shall be made prior to the date that is the earlier of (i) six months and one day after the Participant’s separation from service, or (ii) the Participant’s death, but only to the extent such delay is necessary to prevent the Award from being subject to interest, penalties and/or additional tax imposed pursuant to section 409A. In addition, the settlement of any such Award may not be accelerated except to the extent permitted by section 409A. The provisions of the Plan and each Award Agreement are intended to comply with or be exempt from the provisions of section 409A and shall be interpreted in a manner consistent therewith. Notwithstanding any other provision of the Plan or an Award Agreement to the contrary, the Board may in its sole discretion (but without any obligation to do so) amend the terms of any Award to the extent it determines necessary to comply with section 409A. |
SECTION 14. LEGAL AND REGULATORY REQUIREMENTS.
Shares shall not be issued under the Plan unless the issuance and delivery of such Shares complies with (or is exempt from) all applicable requirements of law, including (without limitation) the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder, state securities laws and regulations and the regulations of any stock exchange on which the Company’s securities may then be listed, and the Company has obtained the approval or favorable ruling from any governmental agency which the Company determines is necessary or advisable. The Company shall not be liable to a Participant or other persons as to: (a) the non-issuance or sale of Shares as to which the Company has not obtained from any regulatory body having jurisdiction the authority deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares under the Plan; and (b) any tax consequences expected, but not realized, by any Participant or other person due to the receipt, exercise or settlement of any Award granted under the Plan.
SECTION 15. NO RETENTION RIGHTS.
No provision of the Plan, or any Award granted under the Plan, shall be construed to give any Participant any right to become an Employee or other Service provider, to be treated as an Employee, or to continue in Service for any period of time, or restrict in any way the rights of the Company (or Parent or Subsidiary to whom the Participant provides Service), which rights are expressly reserved, to terminate the Service of such person at any time and for any reason, with or without cause.
SECTION 16. DURATION AND AMENDMENTS.
16.1 | Term of the Plan. The Plan, as set forth herein, shall become effective on the date of its adoption by the Board, subject to the approval of the Company’s stockholders. In the event that the stockholders fail to approve the Plan within twelve (12) months after its adoption by the Board, any grants, exercises or sales that have already occurred under the Plan shall be rescinded, and no additional grants, exercises or sales shall be made under the Plan after such date. The Plan shall terminate automatically ten (10) years after the later of (i) its adoption by the Board, or (ii) the most recent increase in the number of Shares reserved under Section 5 (other than pursuant to Section 11) that was approved by stockholders on or within twelve (12) months after the Board’s approval of such increase. The Plan may be terminated on any earlier date pursuant to Section 16.2 below. |
16.2 | Right to Amend or Terminate the Plan. The Board may amend, suspend, or terminate the Plan at any time and for any reason. An amendment of the Plan shall not be subject to the approval of the Company’s stockholders unless it (i) increases the number of Shares available for issuance under the Plan (except as provided in Section 11) or (ii) materially changes the class of persons who are eligible for the grant of Awards. |
16.3 | Effect of Amendment or Termination. No Shares shall be issued or sold under the Plan after the termination thereof, except upon exercise or settlement of an Award granted prior to such termination. Except as otherwise permitted by the Plan or an Award Agreement or as required to comply with any applicable law, regulation or rule, the termination of the Plan, or any amendment thereof, shall not have a material adverse effect on any Award previously granted under the Plan without the holder’s consent; provided, however, that an amendment which may cause an ISO to become an NSO shall not be treated as having a material adverse effect on an Award. |
SECTION 17. EXECUTION.
To record the adoption of the Plan by the Board on January 9, 2017, effective on such date, the Company has caused its authorized officer to execute the same.
[signature page follows]
FTC SOLAR, INC. | ||
By | /s/ David Springer | |
David Springer, CEO |
Signature Page to Stock Incentive Plan of FTC Solar, Inc.
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1. |
Amendment. The first sentence of Section 5.1 of the Plan (Share Limit) is hereby amended to read as follows:
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2. |
“Subject to Section 11, the aggregate number of Shares which may be issued under the Plan shall be Three Million One Hundred Twenty-Six Thousand Two Hundred and Twelve (3,126,212) Shares (the “Authorized Share Limit”), including shares
subject to awards granted prior to the date hereof.
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3. |
Effect on 2017 Plan. Except as expressly amended hereby, the 2017 Plan shall remain unchanged and in full force and effect.
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4. |
Effective Date. The effective date of this amendment shall be April 5, 2021, subject to the approval of the stockholders of the Company.
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1. |
Section 2.5 (Change in Control) is hereby amended to read as follows:
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2. |
Section 18 (Change in Control) is hereby added to read as follows:
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(i) |
any unvested or unexercisable portion of any Award carrying a right to exercise shall become fully vested and exercisable; and
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1. |
Amendment. The first sentence of Section 5.1 of the Plan (Share Limit) is hereby amended to read as follows:
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2. |
“Subject to Section 11, the aggregate number of Shares which may be issued under the Plan shall be Three Million One Hundred Ninety-Eight Thousand Seven Hundred and Twelve (3,198,712) Shares (the “Authorized Share Limit”), including
shares subject to awards granted prior to the date hereof.
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3. |
Effect on 2017 Plan. Except as expressly amended hereby, the 2017 Plan shall remain unchanged and in full force and effect.
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4. |
Effective Date. The effective date of this amendment shall be April 13, 2021, subject to the approval of the stockholders of the Company.
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Section 1. |
Purpose of Plan.
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Section 2. |
Definitions.
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Section 3. |
Administration.
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Section 4. |
Shares Reserved for Issuance; Certain Limitations
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Section 5. |
Equitable Adjustments.
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Section 6. |
Eligibility.
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Section 7. |
Options.
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Section 8. |
Stock Appreciation Rights.
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Section 9. |
Restricted Stock and Restricted Stock Units.
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Section 10. |
Other Stock-Based Awards.
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Section 11. |
Stock Bonuses.
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Section 12. |
Cash Awards.
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Section 13. |
Change in Control Provisions.
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Section 14. |
Amendment and Termination.
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Section 15. |
Unfunded Status of Plan.
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Section 16. |
Withholding Taxes.
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Section 17. |
Transfer of Awards.
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Section 18. |
Continued Employment or Service.
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Section 19. |
Effective Date.
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Section 20. |
Term of Plan.
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Section 21. |
Securities Matters and Regulations.
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Section 22. |
Notification of Election Under Section 83(b) of the Code.
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Section 23. |
No Fractional Shares.
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Section 24. |
Beneficiary.
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Section 25. |
Paperless Administration.
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Section 26. |
Severability.
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Section 27. |
Clawback.
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Section 28. |
Section 409A of the Code.
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Section 29. |
Governing Law.
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Section 30. |
Titles and Headings.
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Section 31. |
Successors.
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Section 32. |
Relationship to other Benefits.
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Section 33. |
Provisions for Foreign Participants.
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COMPANY:
FTC SOLAR, INC.
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PARTICIPANT:
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Accepted and executed via the On-Line Platform
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Accepted and executed via the On-Line Platform
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Address: As set forth in the On-Line Platform
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Address: As set forth in the On-Line Platform
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COMPANY:
FTC SOLAR, INC.
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PARTICIPANT:
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Accepted and executed via the On-Line Platform
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Accepted and executed via the On-Line Platform
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Address: As set forth in the On-Line Platform
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Address: As set forth in the On-Line Platform
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Company:
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Indemnitee:
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FTC SOLAR, INC.
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By:
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By:
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Name:
Title:
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Name:
Title:
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FTC SOLAR, INC. | ||
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By:
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Name:
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Jacob D. Wolf | ||
Title:
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General Counsel | ||
EXECUTIVE | |||
Anthony P. Etnyre |
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FTC SOLAR, INC. | ||
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By:
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Name:
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Title:
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EXECUTIVE | |||
[Name] |
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FTC SOLAR, INC. | ||
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By:
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Name:
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Jacob D. Wolf | ||
Title:
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General Counsel | ||
EXECUTIVE | |||
Patrick M. Cook |
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FTC SOLAR, INC. | ||
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By:
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Name:
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Title:
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EXECUTIVE | |||
[Name] |
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FTC SOLAR, INC. | ||
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By:
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Name:
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Jacob D. Wolf | ||
Title:
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General Counsel | ||
EXECUTIVE | |||
Jay B. Grover |
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FTC SOLAR, INC. | ||
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By:
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Name:
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Title:
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EXECUTIVE | |||
[Name] |
1.
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Definitions and Interpretation
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2
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2.
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Demand Registration
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7
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3.
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Shelf Registration
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9
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4.
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Lock-up Agreements
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11
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5.
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Other Registration Rights
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12
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6.
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Registration Procedures
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12
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7.
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Indemnification by the Company
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15
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8.
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Indemnification by Participating Shareholders
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15
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9.
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Conduct of Indemnification Proceedings
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16
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10.
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Survival
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16
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11.
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Contribution
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16
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12.
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Participation in Public Offering
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17
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13.
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Compliance with Rule 144 and Rule 144A
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17
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14.
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Selling Expenses
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18
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15.
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Prohibition on Requests; Holders’ Obligations
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18
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16.
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Miscellaneous
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19
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1.
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Definitions and Interpretation.
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(a)
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Definitions. As used in this Agreement, each of the following capitalized terms has the
meaning specified in this Section 1(a).
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(b)
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Other Definitions. In addition to the defined terms set forth in Section 1(a), as used in this Agreement, each of the following capitalized terms has the meaning specified in the Section set forth opposite such term below.
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Term
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Section
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Agreement
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Preamble
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Company
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Preamble
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Damages
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7(a)
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Demand Notice
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2(a)(i)
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Demand Period
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2(d)
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Demand Registration
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2(a)(i)
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Demand Suspension
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2(g)
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Holder
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Preamble
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Holder Information
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15(b)
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Indemnified Party
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9
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Indemnifying Party
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9
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Inspectors
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6(k)
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Long-Form Registration
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2(a)(i)
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Maximum Offering Size
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2(f)
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Parties
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Preamble
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Records
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6(k)
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Requesting Shareholder
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2(a)(i)
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Shelf Period
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3(b)
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Shelf Request
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3(a)
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Shelf Suspension
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3(d)
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Short-Form Registration
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2(a)(i)
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Underwritten Requesting Shareholder
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3(e)
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Underwritten Takedown
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3(e)
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Underwritten Takedown Notice
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3(e)
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Underwritten Takedown Request
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3(e)
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(c)
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Interpretation.
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2.
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Demand Registration.
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(a)
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Demand by Qualified Shareholders.
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(b)
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Demand Withdrawal. A Participating Shareholder may withdraw its Registrable Securities from
a Demand Registration prior to three (3) Business Days before the effectiveness of the applicable Registration Statement. Upon receipt of a notice from all of the Participating Shareholders to such effect, the Company shall cease all
efforts to secure effectiveness of the applicable Registration Statement, and such registration shall nonetheless be deemed a Demand Registration for purposes of Section 2(a)
unless (i) the withdrawing Participating Shareholders shall have paid or reimbursed the Company for their pro rata share of all reasonable and documented out-of-pocket fees and expenses incurred by the Company in connection with the
registration of the withdrawing Participating Shareholders’ withdrawn Registrable Securities (based on the number of Registrable Securities such withdrawing Participating Shareholders sought to register, as compared to the total number of
Company Shares included on such Registration Statement) or (ii) the withdrawal is made following the occurrence of a Material Adverse Change, because the registration would require the Company to make an Adverse Disclosure or because the
Company otherwise requests withdrawal.
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(c)
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Registration Expenses. The Company shall be liable for and pay all Registration Expenses in
connection with any Demand Registration, regardless of whether such registration is effected, subject to reimbursement pursuant to Section 2(b)(i), if applicable.
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(d)
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Effective Registration. A Demand Registration
shall be deemed to have occurred if the Registration Statement relating thereto (i) has become effective under the Securities Act and (ii) has remained effective for a period of at least one hundred eighty (180) calendar days (or such
shorter period in which all Registrable Securities of the Participating Shareholders included in such registration have actually been sold thereunder or withdrawn) or, if such Registration Statement relates to an Underwritten Offering,
such longer period as, in the opinion of counsel for the underwriter or underwriters, a prospectus is required by Law to be delivered in connection with sales of Registrable Securities by an underwriter or dealer (the applicable period,
the “Demand Period”); provided, that a Demand Registration shall not be deemed to have occurred if, (x) during the Demand
Period, such Registration Statement is not available for use as a result of any stop order, injunction or other order or requirement of the SEC or other Governmental Entity or court, (y) the conditions to closing specified in the
underwriting agreement, if any, entered into in connection with such registration are not satisfied other than by reason of a wrongful act, misrepresentation or breach of such applicable underwriting agreement by any Participating
Shareholder or (z) the Maximum Offering Size (as defined below) is reduced in accordance with Section 2(f) such that less than fifty percent (50%) of the Registrable Securities that the Requesting Shareholders sought to be included in such registration are included.
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(e)
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Underwritten Offerings. If any Participating Shareholder that is a Qualified Shareholder so
requests, an offering of Registrable Securities pursuant to a Demand Registration shall be in the form of an Underwritten Offering.
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(f)
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Priority of Securities Registered Pursuant to Demand Registrations. If the managing underwriter or underwriters of a proposed Underwritten Offering advise the Board (or, in the case of a Demand Registration not being underwritten, the Board determines in its reasonable discretion)
that, in its view, the number of Registrable Securities requested to be included in such registration (including any securities that the Company proposes to be included that are not Registrable Securities) exceeds the largest number of
shares that can be sold without being likely to have an adverse effect on the price, timing or distribution of the shares offered in such offering (the “Maximum
Offering Size”), the Company shall include in such registration, in the priority listed below, up to the Maximum Offering Size:
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(g)
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Delay in Filing; Suspension of Registration. If,
upon the determination of a majority of the members of the Board, the filing, initial effectiveness or continued use of a Registration Statement in respect of a Demand Registration at any time would require the Company to make an Adverse
Disclosure, the Company may, upon giving prompt written notice of such action to the Participating Shareholders, delay the filing or initial effectiveness of, or suspend use of, such Registration Statement (a “Demand Suspension”); provided, that (i) the Company shall not be permitted to exercise a Demand Suspension (x) more than four (4) times during
any twelve (12) month period or (y) for more than ninety (90) calendar days per Demand Suspension and (ii) such Demand Suspension shall terminate at such time as the Company would no longer be required to make any Adverse Disclosure; and
provided, further, that in the event of a Demand Suspension, if a Participating Shareholder has not sold any Registrable Securities
under such Registration Statement, it shall be entitled to withdraw its Registrable Securities from such Demand Registration and, if all Participating Shareholders so withdraw, such Demand Registration shall not be counted for purposes of
the limit on Demand Registrations requested by such Participating Shareholders in Section 2(a). In the case of a Demand Suspension, the Participating Shareholders agree to suspend use of the applicable prospectus and any issuer free writing prospectuses in connection with any
sale or purchase of, or offer to sell or purchase, Registrable Securities, upon receipt of the notice referred to above. The Company shall immediately notify the Participating Shareholders upon the termination of any Demand Suspension,
amend or supplement the prospectus and any issuer free writing prospectus, if necessary, so it does not contain any untrue statement or omit to state a material fact required to be stated therein or necessary to make the statements
therein not misleading and furnish to the Participating Shareholders such numbers of copies of the prospectus and any issuer free writing prospectus as so amended or supplemented as the Participating Shareholders may reasonably request.
The Company agrees, if necessary, to supplement or make amendments to the applicable Registration Statement if required by the registration form used by the Company for the applicable Demand Registration or by the instructions
applicable to such registration form or by the Securities Act or the rules or regulations promulgated thereunder, or as may reasonably be requested by the Participating Shareholders.
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3.
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Shelf Registration.
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(a)
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Filing. If, at any time following the IPO, the
Company shall have received a request, subject to Section 15, by a Qualified Shareholder (a “Shelf Request”), for the filing of a Shelf
Registration Statement pursuant to this Section 3, and at such time the Company is eligible to
file a registration statement on Form S-3, the Company shall, within thirty (30) calendar days of such Shelf Request, file with the SEC a Shelf Registration Statement relating to the offer and sale of all Registrable Securities by the
Holders from time to time including customary methods of distribution and, as promptly as practicable thereafter, the Company shall use its reasonable best efforts to cause such Shelf Registration Statement to be declared effective
under the Securities Act (or if the Company qualifies to do so, it shall file an automatic Shelf Registration Statement in response to any such request). If, on the date of any such Shelf Request, the Company does not qualify to file a
Shelf Registration Statement under the Securities Act, the provisions of this Section 3 shall not
apply, and the provisions of Section 2 shall apply instead.
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(b)
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Continued Effectiveness. The Company shall use
its reasonable best efforts to keep such Shelf Registration Statement continuously effective under the Securities Act (including, if necessary, by renewing or refiling a Shelf Registration Statement prior to expiration of the existing
Shelf Registration Statement or by filing with the SEC a post-effective amendment or a supplement to the Shelf Registration Statement or any document incorporated therein by reference or by filing any other required document or otherwise
supplementing or amending the Shelf Registration Statement, if required by the rules, regulations or instructions applicable to the registration form used by the Company for such Shelf Registration Statement or by the Securities Act, the
Exchange Act, any state securities or blue sky Laws, or any rules and regulations thereunder) in order to permit the prospectus forming a part thereof to be usable by Holders until the earlier of (i) the date as of which all Registrable
Securities have been sold pursuant to the Shelf Registration Statement or another Registration Statement filed under the Securities Act (but in no event prior to the applicable period referred to in Section 4(a)(3) of the Securities Act
and Rule 174 thereunder) and (ii) the date as of which each of the Holders is permitted to sell its Registrable Securities without registration pursuant to Rule 144 under the Securities Act without volume limitation or other restrictions
on transfer thereunder (such period of effectiveness, the “Shelf Period”).
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(c)
|
Shelf Notice. The Company shall (i) promptly upon receipt of any request to file a Shelf
Registration Statement pursuant to Section 3(a) (but in no event more than five (5) Business Days thereafter), deliver a written notice of any such request to all
other Holders and (ii) include on such Shelf Registration Statement the aggregate amount of Registrable Securities held by such Holders requested to be registered within ten (10) Business Days of the written notice referred to in clause
(i).
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(d)
|
Suspension of Registration. If, upon the determination of a majority of the members of the
Board, the continued use of such Shelf Registration Statement at any time would require the Company to make an Adverse Disclosure, the Company may, upon giving at least ten (10) calendar days’ prior written notice of such action to the
Holders, suspend use of the Shelf Registration Statement (a “Shelf Suspension”); provided,
that (i) the Company shall not be permitted to exercise a Shelf Suspension (x) more than four (4) times during any twelve (12) month period, or (y) for more than ninety (90) calendar days per Shelf Suspension and (ii) such Shelf
Suspension shall terminate at such time as the Company would no longer be required to make any Adverse Disclosure. In the case of a Shelf Suspension, the Holders agree to suspend use of the applicable prospectus and any issuer free
writing prospectus in connection with any sale or purchase of, or offer to sell or purchase, Registrable Securities, upon receipt of the notice referred to above. The Company shall immediately notify the Holders upon the termination of
any Shelf Suspension, amend or supplement the prospectus and any issuer free writing prospectus, if necessary, so it does not contain any untrue statement or omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading and furnish to the Holders such numbers of copies of the prospectus and any issuer free writing prospectus as so amended or supplemented as the Holders may reasonably request. The Company agrees, if
necessary, to supplement or make amendments to the Shelf Registration Statement, if required by the registration form used by the Company for the shelf registration or by the instructions applicable to such registration form or by the
Securities Act or the rules or regulations promulgated thereunder or as may reasonably be requested by the Holders.
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(e)
|
Underwritten Takedown. For any offering of Registrable Securities pursuant to a Registration Statement for which the value of Registrable Securities proposed to be offered is at least two
million dollars ($2,000,000) and a Registration Statement is effective or has been requested under Section 2(a), any Qualified Shareholder (the “Underwritten Requesting Shareholder”) may elect for an offering to be in the form of an Underwritten Offering, and the Company shall prepare a prospectus or prospectus supplement for such purpose. The Underwritten Requesting Shareholder shall give
written notice to the Company of such intention (i) for a Shelf Registration Statement, at least four (4) Business Days prior to the date on which such Underwritten Offering is anticipated to launch, specifying the number of Registrable
Securities for which the Underwritten Requesting Shareholder is requesting registration under this Section 3(e) or (ii) for a Demand Registration, at the time of the demand under Section 2(a) and, in each case, the other material terms of such Underwritten Offering (such request, an “Underwritten Takedown Request,” and any Underwritten Offering conducted pursuant thereto, an “Underwritten Takedown”), and the Company shall (i) for a Shelf Registration Statement, one (1) Business Day following the receipt of such Underwritten Takedown Request or (ii) for a Demand Registration, at
the time of the demand under Section 2(a), give written notice of such Underwritten Takedown
Request (such notice, an “Underwritten Takedown Notice”) to the other Participating Shareholders
and such Underwritten Takedown Notice shall offer the other Participating Shareholders the opportunity to include in such Underwritten Takedown the number of Registrable Securities as each such other Participating Shareholder may
request in writing. Subject to (i) Section 3(f) and Section 3(g) for a Shelf Registration Statement or (ii) Section 2(b) and Section 2(f) for a Demand Registration,
the Company and the Underwritten Requesting Shareholder(s) shall cause the underwriter(s) to include as part of the Underwritten Takedown all Registrable Securities that are requested to be included therein by any of the other
Participating Shareholders in writing within (i) two (2) Business Days of delivery of such notice for a Shelf Registration Statement or (ii) seven (7) Business Days after receipt of such notice for a Demand Registration; provided, that all such other Participating Shareholders requesting to participate in the Underwritten Takedown
must sell their Registrable Securities to the underwriters on the same terms and conditions as apply to the Underwritten Requesting Shareholder(s); provided, further, that, if at any time after making
an Underwritten Takedown Request and prior to the launch of the Underwritten Takedown, the Underwritten Requesting Shareholder(s) shall determine for any reason not to proceed with or to delay such Underwritten Takedown, the
Underwritten Requesting Shareholder(s) shall give written notice to the Company of such determination and the Company shall give written notice of the same to each other Participating Shareholder and, thereupon, (x) in the case of a
determination not to proceed, the Company and such Underwritten Requesting Shareholder(s) shall be relieved of their respective obligations to cause the underwriter(s) to include any Registrable Securities of the other Participating
Shareholders as part of such Underwritten Takedown (but the Company shall not be relieved from its obligation to pay the Registration Expenses in connection therewith), without prejudice, however, to the other registration rights
contained herein, and (y) in the case of a determination to delay such Underwritten Takedown, the Company and such Underwritten Requesting Shareholder(s) shall be relieved of their respective obligations to cause the underwriter(s) to
include any Registrable Securities of the other Participating Shareholders as part of such Underwritten Takedown for the same period as the Underwritten Requesting Shareholder(s) determine(s) to delay such Underwritten Takedown.
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(i)
|
first, all Registrable Securities requested to be included in such registration by the
Underwritten Requesting Shareholder(s); provided that any Underwritten Requesting Shareholder may elect to allocate its priority to permit any other holder of Common
Stock to register shares in lieu of the same amount of Registrable Securities held by such Underwritten Requesting Shareholder;
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(ii)
|
second, and only if all the securities referred to in clause (i) have been included, all Registrable Securities requested to be registered by the other Participating Shareholders (allocated, if necessary for the offering not to exceed the Maximum Offering
Size, pro rata among such Participating Shareholders on the basis of the relative number of Registrable Securities owned by the Participating Shareholders; provided,
that any securities thereby allocated to a Participating Shareholder that exceed such Participating Shareholder’s request shall be reallocated among the remaining Participating Shareholders in like manner); and
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(iii)
|
third, and only if all the securities referred to in clauses (i) and (ii) have been included, any securities proposed to be registered by the Company or any securities proposed to be registered for the account of any other Persons, with such priorities
among them as the Company shall determine.
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4.
|
Lock-up Agreements.
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(a)
|
To the extent requested by any lead managing underwriter in connection with each Underwritten Offering, the Company and each Participating Shareholder shall agree not to effect any
public sale or distribution of any Company Shares or other security of the Company (except as part of such Underwritten Offering) during the period beginning on the date that is no earlier than estimated by the Company, in good faith and
provided in writing to such Holder, to be the fifteenth (15th) Business Day prior to the effective date of the applicable Registration Statement (or the
anticipated launch date in the case of a “take-down” off of an already effective Shelf Registration Statement) until the earlier of (i) such time as the Company and any lead managing underwriter shall agree and (ii) one hundred eighty (180)
calendar days after the effective date of the applicable Registration Statement (or the pricing date in the case of a “take-down” off of an already effective Shelf Registration Statement); provided, that the Company shall cause all
directors and executive officers of the Company to enter into agreements similar to those contained in this Section 4(a) (without regard to this proviso), subject to exceptions for gifts, sales pursuant to pre-existing 10b5-1 plans
and other customary exclusions agreed to by any lead managing underwriter; provided further, that any lead managing underwriter may extend such period as necessary to comply with applicable FINRA rules.
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(b)
|
Notwithstanding the foregoing, the Company may effect a public sale or distribution of securities of the type described above and during the periods described above if such sale or
distribution is made pursuant to registrations on Form S-4 or Form S-8 or any successor form to such forms or as part of any registration of securities for offering and sale to employees or directors of the Company pursuant to any employee
share plan or other employee benefit plan arrangement and other customary exclusions agreed to by any lead managing underwriter.
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5.
|
Other Registration Rights.
|
6.
|
Registration Procedures.
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(a)
|
Prior to filing a Registration Statement covering Registrable Securities or prospectus or any amendment or supplement thereto, the Company shall furnish to each Participating
Shareholder and each underwriter, if any, of the Registrable Securities covered by such Registration Statement copies of such Registration Statement as proposed to be filed, and thereafter the Company shall furnish to such Participating
Shareholder and underwriter, if any, without charge such number of copies of such Registration Statement, each amendment and supplement thereto (in each case including all exhibits thereto and documents incorporated by reference therein),
the prospectus included in such Registration Statement (including each preliminary prospectus and any summary prospectus) and any other prospectus filed under Rule 424 or Rule 430A under the Securities Act and such other documents as such
Participating Shareholder or underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Participating Shareholder. Each Participating Shareholder shall have the right to request
that the Company modify any information contained in such Registration Statement, amendment and supplement thereto pertaining to such Participating Shareholder upon four (4) Business Days written notice and the Company shall use all
reasonable efforts to comply with such request; provided, that the Company shall not have any obligation to so modify any information if the Company reasonably expects that so doing would cause the prospectus to contain an untrue
statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading.
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(b)
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In connection with any filing of any Registration Statement or prospectus or amendment or supplement thereto, the Company shall cause such document (i) to comply in all material
respects with the requirements of the Securities Act and the rules and regulations of the SEC thereunder and (ii) with respect to information supplied by or on behalf of the Company for inclusion in the Registration Statement, to not
contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.
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(c)
|
The Company shall promptly notify each Holder of such Registrable Securities and the underwriter(s) when a Registration Statement has become effective and when any post-effective
amendments and supplements thereto become effective.
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(d)
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The Company shall furnish counsel for each underwriter, if any, and for the Holders of such Registrable Securities with copies of any written comments from the SEC or any state
securities authority or any written request by the SEC or any state securities authority for amendments or supplements to a Registration Statement or prospectus or for additional information generally.
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(e)
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After the filing of the Registration Statement, the Company shall (i) cause the related prospectus to be supplemented by any required prospectus supplement, and, as so supplemented, to
be filed pursuant to Rule 424 under the Securities Act, (ii) comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such Registration Statement during the applicable period
in accordance with the intended methods of disposition by the Participating Shareholders set forth in such Registration Statement or supplement to such prospectus and (iii) promptly notify each Participating Shareholder holding Registrable
Securities covered by such Registration Statement of any stop order issued or threatened by the SEC or any state securities commission and use commercially reasonable best efforts to prevent the entry of such stop order or to remove it if
entered.
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(f)
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The Company shall use all reasonable best efforts to (i) register or qualify the Registrable Securities covered by such Registration Statement under such securities or “blue sky” Laws
of such jurisdictions in the United States as any Participating Shareholder holding such Registrable Securities reasonably (in light of such Participating Shareholder’s intended plan of distribution) requests and (ii) cause such Registrable
Securities to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that may be reasonably
necessary or advisable to enable such Participating Shareholder to consummate the disposition of the Registrable Securities owned by such Participating Shareholder, provided, that the Company shall not be required to (x) qualify
generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 6(f), (y) subject itself to taxation in any such jurisdiction or (z) consent to general service of process in any
such jurisdiction.
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(g)
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The Company shall use reasonable best efforts to list such Registrable Securities on the principal securities exchange on which the Company’s Common Stock is then listed and provide a
transfer agent, registrar and CUSIP number for all such Registrable Securities not later than the effective date of such Registration Statement.
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(h)
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The Company shall use reasonable best efforts to cooperate with each Participating Shareholder and the underwriter or managing
underwriter, if any, to facilitate the timely preparation and delivery of certificates (or its book-entry equivalent) representing Registrable Securities to be sold and not bearing any restrictive legends (including by delivering to the
transfer agent a Company instruction letter and a written opinion from counsel to the Company stating unlegended stock certificates (or its book-entry equivalent) may be issued in respect of any
Registrable Securities, subject to compliance with the requirements of the Securities Act); and enable such Registrable Securities to be registered in such names as each
Participating Shareholder or the underwriter or managing underwriter, if any, may reasonably request in connection with any sale of Registrable Securities.
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(i)
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The Company shall immediately notify each Participating Shareholder holding such Registrable Securities covered by such Registration Statement, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the occurrence of an event requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and promptly prepare and make
available to each such Participating Shareholder and file with the SEC any such supplement or amendment subject to any suspension rights contained herein.
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(j)
|
The Company shall have the right to select an underwriter or underwriters in connection with any underwritten Public Offering resulting from the exercise of a Demand Registration or
Underwritten Takedown upon consultation with the Underwritten Requesting Shareholder. In connection with any Public Offering, the Company shall enter into customary agreements (including an underwriting agreement in customary form) and take
all other actions as are reasonably required and customary in order to expedite or facilitate the disposition of such Registrable Securities in any such Public Offering, including the engagement of a “qualified independent underwriter” in
connection with the qualification of the underwriting arrangements with FINRA.
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(k)
|
Upon execution of confidentiality agreements or other similar arrangements in form and substance reasonably satisfactory to the Company,
the Company shall make available during regular business hours for inspection by any underwriter participating in any disposition pursuant to a Registration Statement being filed by the Company pursuant to this Section 6 and any attorney, accountant or other professional
retained by a Participating Shareholder or underwriter (collectively, the “Inspectors”), all
financial and other records, pertinent corporate documents and properties of the Company (collectively, the “Records”) as shall be reasonably necessary or desirable to enable them to exercise their due diligence responsibility, and cause the Company’s officers, directors and employees to supply all information reasonably
requested by any Inspectors in connection with such Registration Statement (including by participation in a reasonable number of diligence calls). Records that the Company determines, in good faith, to be confidential and that it
notifies the Inspectors are confidential shall not be disclosed by the Inspectors unless (i) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in such Registration Statement or (ii) the release
of such Records is required pursuant to applicable Law or regulation or judicial process. Each Participating Shareholder agrees that information obtained by it as a result of such inspections shall be deemed confidential and shall not
be used by it or its Affiliates as the basis for any market transactions in any Company Shares unless and until such information is made generally available to the public. Each Participating Shareholder further agrees that, upon
learning that disclosure of such Records is sought in a court of competent jurisdiction, it shall give notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of the Records
deemed confidential.
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(l)
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In connection with an Underwritten Offering, the Company shall use commercially reasonable efforts to furnish to each underwriter a signed counterpart, addressed to such underwriter(s),
of (i) an opinion or opinions of counsel to the Company and (ii) a comfort letter or comfort letters from the Company’s independent certified public accountants, each in customary form and covering such matters of the kind customarily
covered by opinions or comfort letters, as the case may be, as the managing underwriter therefor reasonably requests.
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(m)
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In connection with an Underwritten Offering, the Company shall have appropriate officers of the Company (i) prepare and make presentations at any “road shows” and before analysts, (ii)
otherwise use their commercially reasonable efforts to cooperate as reasonably requested by the underwriters in the offering, marketing or selling of the Registrable Securities, including, by executing customary underwriting agreements and
(iii) otherwise use their commercially reasonable efforts to cooperate as reasonably requested by the Holders in the marketing of the Registrable Securities.
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(n)
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The Company shall take all commercially reasonable actions to ensure that any free-writing prospectus utilized in connection with any Demand Registration, Underwritten Takedown or other
offering off of a Shelf Registration Statement hereunder complies in all material respects with the Securities Act, is filed in accordance with the Securities Act to the extent required thereby, is retained in accordance with the Securities
Act to the extent required thereby and, when taken together with the related prospectus, shall not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
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(o)
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The Company shall otherwise use all commercially reasonable efforts to comply with all applicable rules and regulations of the SEC, and make available to its security holders, as soon
as reasonably practicable, an earnings statement or such other document that shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.
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(p)
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The Company may require each such Participating Shareholder promptly to furnish in writing to the Company the Notice, Agreement and Questionnaire and such other information regarding
the distribution of the Registrable Securities as the Company may from time to time reasonably request and such other information as may be legally required or the Company may deem reasonably advisable in connection with such registration
and shall not have any obligation to include a Participating Shareholder on any Registration Statement if the Notice, Agreement and Questionnaire or such other information is not promptly provided; provided, that, prior to excluding
such Participating Shareholder on the basis of its failure to provide the Notice, Agreement and Questionnaire or such other information, the Company must furnish in writing a notice to such Participating Shareholder requesting the Notice,
Agreement and Questionnaire and such other information at least three (3) calendar days prior to filing the applicable Registration Statement or prospectus supplement for an Underwritten Offering.
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7.
|
Indemnification by the Company.
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(a)
|
The Company agrees to indemnify and hold harmless each Participating Shareholder holding Registrable Securities covered by a Registration
Statement, each member, trustee, limited or general partner thereof, each member, trustee, limited or general partner of each such member, limited or general partner, each of their respective Affiliates, officers, directors, stockholders,
shareholders, employees, advisors and agents, each Person, if any, who controls such Person within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and each of their Representatives from and against any
and all losses, claims, damages, liabilities and expenses (including reasonable expenses of investigation and reasonable attorneys’ fees and expenses) (“Damages”) caused by or relating to (i) any untrue statement or alleged untrue statement of a material fact contained in (x) any Registration Statement or prospectus relating to
the Registrable Securities (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), any preliminary prospectus or any “issuer free writing prospectus” (as defined in Rule 433 of the
Securities Act) or (y) any application or other document or communication executed by or on behalf of the Company or based upon written information furnished by or on behalf of the Company filed in any jurisdiction in order to qualify any
securities covered by such registration under the securities Laws thereof, (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or
(iii) any violation or alleged violation by the Company of the Securities Act or any other similar federal or state securities Laws or any rule or regulation promulgated thereunder applicable to the Company and relating to action or
inaction required of the Company in connection with any such registration, qualification or compliance, except in all cases insofar as such Damages are caused by or related to any such untrue statement or omission or alleged untrue
statement or omission so made based upon or contained in any information furnished in writing to the Company by such Participating Shareholder expressly for use therein or by such Participating Shareholder’s failure to deliver a copy of
the prospectus, the issuer free writing prospectus or any amendments or supplements thereto after the Company has furnished such Participating Shareholder with a sufficient number of copies of the same.
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(b)
|
The Company also agrees to indemnify any underwriters of the Registrable Securities, their officers and directors and each Person who controls such underwriters within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act on substantially the same basis as that of the indemnification of the Participating Shareholders provided in this Section 7 or otherwise on commercially reasonable
terms negotiated on an arm’s length basis with such underwriters.
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8.
|
Indemnification by Participating Shareholders.
|
9.
|
Conduct of Indemnification Proceedings.
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10.
|
Survival.
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11.
|
Contribution.
|
(a)
|
If the indemnification provided for herein is unavailable to the Indemnified Parties in respect of any Damages, then each such Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Damages (i) as between the Company and the Participating Shareholders holding Registrable Securities covered by a Registration
Statement on the one hand and the underwriters on the other, in such proportion as is appropriate to reflect the relative benefits received by the Company and such Participating Shareholders on the one hand and the underwriters on the
other, from the offering of the Registrable Securities, or if such allocation is not permitted by applicable Law, in such proportion as is appropriate to reflect not only the relative benefits but also the relative fault of the Company and
such Participating Shareholders on the one hand and of such underwriters on the other in connection with the statements or omissions that resulted in such Damages, as well as any other relevant equitable considerations, and (ii) as between
the Company on the one hand and each Participating Shareholder on the other, in such proportion as is appropriate to reflect the relative fault of the Company and of each Participating Shareholder in connection with such statements or
omissions, as well as any other relevant equitable considerations. The relative benefits received by the Company and Participating Shareholders on the one hand and such underwriters on the other shall be deemed to be in the same proportion
as the total proceeds from the offering (net of underwriting discounts and commissions but before deducting expenses) received by the Company and Participating Shareholders bear to the total underwriting discounts and commissions received
by such underwriters, in each case as set forth in the table on the cover page of the applicable prospectus. The relative fault of the Company and Participating Shareholders on the one hand and of such underwriters on the other shall be
determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company and Participating
Shareholders or by such underwriters. The relative fault of the Company on the one hand and of each Participating Shareholder on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
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(b)
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The Company and the Participating Shareholders agree that it would not be just and equitable if contribution pursuant to this Section 11 were determined by pro rata allocation
(even if the underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or
payable by an Indemnified Party as a result of the Damages referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 11, no Participating Shareholder shall be required to contribute any amount for Damages in
excess of the gross proceeds realized by Participating Shareholder in the sale of Registrable Securities of Participating Shareholder to which such Damages relate. No Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. Each Participating Shareholder’s obligation to contribute pursuant to this Section 11 is
several in the proportion that the net proceeds of the offering received by Participating Shareholder bears to the total net proceeds of the offering received by all such Participating Shareholders and not joint.
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12.
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Participation in Public Offering.
|
(a)
|
No Person may participate in any Public Offering hereunder unless such Person (i) agrees to sell such Person’s securities on the basis provided in any underwriting arrangements approved
by the Persons entitled hereunder to approve such arrangements (provided, that no Holder of Registrable Securities will be required to sell more than the number of Registrable Securities that such Holder has requested the Company
include in any Registration Statement) and (ii) completes, executes and delivers or causes to be delivered all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents and instruments reasonably required
under the terms of such underwriting arrangements and the provisions set forth herein in respect of registration rights.
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(b)
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Each Person that is participating in any registration hereunder agrees that, upon receipt of any notice from the Company of the occurrence of any event of the kind described in Section 6(i)
above, such Person shall immediately discontinue the disposition of its Registrable Securities pursuant to the Registration Statement until such Person’s receipt of the copies of a supplemented or amended prospectus as contemplated by Section 6(i),
and, if so directed by the Company, such Person shall deliver to the Company all copies, other than any permanent file copies then in such Person’s possession, of the most recent prospectus covering such Registrable Securities at the time
of receipt of such notice. In the event the Company has given any such notice, the applicable time period during which a Registration Statement is to remain effective shall be extended (provided, that the Company shall not cause any
Registration Statement to remain effective beyond the latest date allowed by applicable Law) by the number of days during the period from and including the date of the giving of such notice pursuant to Section 6(i) to and including
the date when each Holder of Registrable Securities covered by such Registration Statement shall have received the copies of the supplemented or amended prospectus contemplated by Section 6(i).
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13.
|
Compliance with Rule 144 and Rule 144A.
|
(a)
|
The Company shall file any reports required to be filed by it under the Securities Act and the Exchange Act, and it will take such further action as any Holder may reasonably request
(including making available adequate current public information with respect to the Company meeting the current public information requirements of Rule 144(c)), to the extent required to enable such Holder to sell Registrable Securities
without registration under the Securities Act within the limitation of the exemptions provided by Rule 144. Notwithstanding the foregoing, nothing in this Section 13 shall be deemed to require the Company to register any of its
securities pursuant to the Exchange Act.
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(b)
|
At the request of any Holder who proposes to sell any Registrable Securities in compliance with Rule 144, the Company shall use reasonable best efforts to (i) cooperate with such Holder in connection with such sale and (ii) furnish, subject to compliance with the
requirements of the Securities Act, to the Company’s transfer agent an instruction letter and an opinion of counsel stating that unlegended stock certificates (or its book-entry equivalent) may be issued in respect of such Registrable Securities.
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(c)
|
Unless the Company is subject to Section 13 or 15(d) of the Exchange Act, the Company will provide to the Holder of Registrable Securities and to any prospective purchaser of
Registrable Securities under Rule 144A, the information described in Rule 144A(d)(4).
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14.
|
Selling Expenses.
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15.
|
Prohibition on Requests; Holders’ Obligations.
|
(a)
|
No Holder shall, without the Company’s consent, be entitled to deliver a request for a Demand Registration, a Shelf Request or an Underwritten Takedown if less than sixty (60) calendar
days have elapsed since (i) the effective date of a prior Registration Statement (which shall include the filing of a final prospectus supplement to an already effective Shelf Registration Statement) in connection with a Demand Registration
or Shelf Request or (ii) the date of withdrawal by the Participating Shareholders of a Demand Registration or Underwritten Takedown; provided, in each case, that such Holder has been provided with an opportunity to participate in
the prior offering and either (x) has refused or not promptly accepted such opportunity or (y) has not been cut back to less than 50% of the Registrable Securities requested to be included by such Holder.
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(b)
|
No Holder of Registrable Securities shall be entitled to sell any of such Registrable Securities pursuant to this Agreement, unless such
Holder has timely furnished the Company with all information required to be disclosed in order to make the information previously furnished to the Company by such Holder not misleading and any other information regarding such Holder and
the distribution of such Registrable Securities as the Company may from time to time reasonably request pursuant to Section 6(p). Any sale of any Registrable Securities by any Holder shall constitute a representation and warranty by such Holder that the information of such
Holder furnished in writing by or on behalf of such Holder, including in such Holder’s Notice, Agreement and Questionnaire (all such information, “Holder Information”), to the Company does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements in such Holder Information, in the
light of the circumstances under which they were made, not misleading. Furthermore, if the Company is required to file a subsequent Registration Statement upon expiration of effectiveness of the Registration Statement naming a Holder,
the Company shall be under no obligation to include such Holder as a selling securityholder if such Holder does not timely deliver an updated properly completed (as solely determined by the Company), executed and acknowledged Notice,
Agreement and Questionnaire and other information upon request by the Company therefore pursuant to Section 6(p).
|
16.
|
Miscellaneous.
|
(a)
|
Remedies; Specific Performance.
|
(b)
|
Amendments and Waivers. The provisions of this Agreement, including the provisions of this
sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, without the written consent of the Company and the Holders holding a majority of the Registrable
Securities (as calculated in Section 16(d)); provided that this Agreement may be amended and restated or amended without consent of the Holders solely to allow for
the addition of new Holders and the granting to such new Holders rights hereunder and any additional rights after the date hereof that does not adversely affect or is not inconsistent with the existing rights and priorities of the Holders
(other than by virtue of adding a Person with additional similar rights and Company Shares). Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Registrable Securities whose securities are being sold pursuant to a Shelf Registration Statement and that does not directly or indirectly affect the rights of other Holders of Registrable Securities may be given by
each Holder of the Registrable Securities being sold by such Holders pursuant to such Shelf Registration Statement; provided, however, that the provisions of this sentence may not be amended, modified or supplemented except in accordance with the provisions of the immediately preceding sentence. Each Holder of Registrable
Securities outstanding at the time of any such amendment, modification, supplement, waiver or consent or thereafter shall be bound by any such amendment, modification, supplement, waiver or consent effected pursuant to this Section 16(b), whether or not any notice, writing or marking indicating such amendment, modification, supplement, waiver or consent appears on the Registrable Securities
or is delivered to such Holder.
|
(c)
|
Notices. Any notice, request, instruction or other document to be given hereunder by any
Party to the others shall be in writing and shall be deemed duly given (i) on the date of delivery, if delivered personally; (ii) on the date sent, if sent by email; (iii) on the first (1st) Business Day following the date of dispatch, if delivered utilizing a next-day service by a recognized next-day courier; or (iv) on the earlier of confirmed receipt or the fifth (5th) Business Day following the date of mailing, if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder
shall be delivered to the addresses set forth below, or pursuant to such other instructions as may be designated in writing by the Party to receive such notice:
|
|
Email:
|
jwolf@ftcsolar.com
|
Attn:
|
General Counsel
|
Email:
|
andrea.nicolas@skadden.com
|
Attn:
|
Andrea L. Nicolás, Esq.
|
(d)
|
Majority of Registrable Securities. For purposes of determining what constitutes Holders of
a majority of Registrable Securities, as referred to in this Agreement, a majority shall constitute a majority of the shares of Company Shares that constitute Registrable Securities (assuming conversion or exercise of all Equity Rights at
the five (5) day average market price of any five (5) days chosen by the Company from the twenty (20) Business Days preceding the date of such amendment or waiver).
|
(e)
|
Assignability; Third-Party Rights. Neither this
Agreement nor any of the rights, interests or obligations under this Agreement may be assigned, in whole or in part, by operation of law or otherwise, by any Party, and any such assignment shall be null and void, except for any assignment
(i) by a Holder to a Permitted Transferee who executes a Joinder Agreement to the extent provided in the Joinder Agreement and any such assignment permitted hereunder shall be effected hereunder only
by giving written notice thereof from both the transferor and the transferee to the Company or (ii) with the prior written consent of the Company, with respect to an assignment by
a Holder, or the Holders of a majority of Registrable Securities, with respect to an assignment by the Company. This Agreement shall be binding upon, and shall be enforceable by and inure to the benefit of, the Parties and their
respective successors and assigns. Nothing in this Agreement is intended to or shall confer upon any Person (other than the Parties) any right, benefit or remedy of any
nature whatsoever.
|
(f)
|
Counterparts; Electronic Signature. This Agreement may be executed in counterparts (each of
which shall be deemed to be an original but all of which taken together shall constitute one and the same agreement) and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the
other Parties. This Agreement may be executed by facsimile, by any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act, or other applicable
law, e.g., www.docusign.com or by .pdf signature by any Party and such signature shall be deemed binding for all purposes hereof without delivery of an original signature being thereafter required.
|
(g)
|
Governing Law and Venue; Jurisdiction; WAIVER OF JURY TRIAL.
|
(h)
|
Severability. Any term or provision of this Agreement that is invalid or unenforceable in
any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other
jurisdiction.
|
(i)
|
Entire Agreement. This Agreement is intended by the Parties as a final expression of their
agreement and is intended to be a complete and exclusive statement of the agreement and understanding of the Parties in respect of the subject matter contained herein and the registration rights granted by the Company with respect to the
Registrable Securities. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein, with respect to the registration rights granted by the Company with respect to the Registrable
Securities. This Agreement supersedes all prior agreements and undertakings among the Parties with respect to such registration rights. No Party shall have any rights, duties or obligations other than those specifically set forth in this
Agreement.
|
(j)
|
Termination. This Agreement and the obligations of the Parties hereunder shall terminate
upon the earlier of such time as there are no Registrable Securities or three (3) years from the date of this Agreement, except for the provisions of Sections 2(c),
3(h), 7, 8, 9, 10, 11, 14, 16(g) and this 16(j), which shall survive such termination.
|
COMPANY:
|
|||
FTC SOLAR, INC.
|
|||
By:
|
|||
Name:
|
|||
Title:
|
HOLDER:
|
|||
[__________]
|
|||
By:
|
|||
Name:
|
|||
Title:
|
Legal Name
|
Mailing Address
|
Email
|
Phone
|
ARC Family Trust
|
|||
David Springer
|
|||
Catherine L. Springer
|
|||
South Lake One LLC
|
|||
Rodgers Massey Revocable Living Trust dated 4/4/11
|
|||
ChristSivam, LLC
|
|||
DS 2021 GRAT
|
|||
Tony Etnyre 2021 GRAT
|
|||
Etnyre 2021 Family Trust
|
|||
Anthony P. Etnyre
|
|||
Aaron Vernon
|
|||
Ahmad Chatila
|
|||
Scott Williams
|
|||
Patrick M. Cook
|
|||
Jay B. Grover
|
|||
Isidoro Quiroga Cortés
|
|||
Ali Mortazavi
|
|||
Jacob D. Wolf
|
|||
Nagendra Cherukupalli
|
|||
Kristian Nolde
|
|||
Mitchell Bowman
|
|||
Andrew Morse
|
|||
Kirk Hayes
|
|||
TCV 2021 Trust
|
|||
Dale Herron
|
|||
KC 2021 Trust
|
|||
Thurman J. “T.J.” Rodgers
|
|||
William Aldeen (“Dean”) Priddy, Jr.
|
|||
Lisan Hung
|
|||
Jeremy Avenier
|
|||
Patrick Cook 2021 Trust
|
|||
Cook 2021 Family Trust
|
|||
Vernon 2021 Family Trust
|
|||
Deepak Navnith
|
|||
Tamara Mullings
|
|||
Shaker Sadasivam
|
1.
|
(a)
|
Full Legal Name of Selling Securityholder:
|
|
(b)
|
Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities listed in Item (3) below are held:
|
|
(c)
|
Full Legal Name of DTC Participant (if applicable and if not the same as (b) above) through which Registrable Securities listed in Item (3) below are held:
|
2.
|
Address for Notices to Selling Securityholder:
|
|
Telephone:
|
Fax:
|
Email Address:
|
Contact Person:
|
3. |
Beneficial Ownership of Registrable Securities:
|
|
(a) |
Number of shares of Registrable Securities beneficially owned:
|
|
(b) |
Number of shares of the Registrable Securities which the Selling Securityholder wishes to be included in the Registration Statement:
|
4. |
Beneficial Ownership of other securities of the Company owned by the Selling Securityholder.
|
(a)
|
Type and amount of other securities beneficially owned by the Selling Securityholder:
|
|
(b)
|
CUSIP No(s). of other securities beneficially owned by the Selling Securityholder:
|
|
5. |
Relationship with the Company:
|
|
(a) |
Have you or any of your affiliates, officers, directors or principal equity holders (owners of 5% or more of the equity securities of the Selling Securityholder) held any position or
office or have you had any other material relationship with the Company (or its predecessors or affiliates) within the past three years?
|
❑
|
Yes
|
❑
|
No
|
(b)
|
If so, please state the nature and duration of your relationship with the Company:
|
|
6. |
Broker-Dealer Status:
|
|
(a) |
Is the Selling Securityholder a broker-dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)?
|
❑
|
Yes
|
❑
|
No
|
|
(b) |
Affiliation with Broker-Dealers:
|
❑
|
Yes
|
❑
|
No
|
|
(i) |
Please describe the affiliation between the Selling Securityholder and any registered broker-dealers:
|
|
(ii) |
If the Selling Securityholder, at the time of its acquisition of the Registrable Securities, had any agreements or understandings, directly or indirectly, with any person to distribute
the Registrable Securities, please describe such agreements or understandings:
|
7. |
Nature of Beneficial Holding. The purpose of this question is to identify the ultimate natural person(s) or publicly held entity that exercise(s) sole or shared voting or dispositive
power over the Registrable Securities.
|
|
(a) |
Is the Selling Securityholder required to file, or is it a wholly-owned subsidiary of a company that is required to file, periodic and other reports (for example, Forms 10-K, 10-Q and
8-K) with the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act?
|
❑
|
Yes
|
❑
|
No
|
|
(b) |
State whether the Selling Securityholder is an investment company, or a subsidiary of an investment company, registered under the Investment Company Act of 1940, as amended:
|
❑
|
Yes
|
❑
|
No
|
|
(c) |
If a subsidiary, please identify the publicly held parent entity:
|
8.
|
Plan of Distribution:
|
|
Email:
|
jwolf@ftcsolar.com
|
|
Attn:
|
General Counsel
|
Selling Securityholder:
|
|||
By:
|
|
||
|
Name:
|
||
|
Title:
|
FTC Solar, Inc.:
|
|||
By:
|
|
||
|
Name:
|
||
|
Title:
|
1. |
A “Beneficial Owner” of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares:
|
2. |
Any person who, directly or indirectly, creates or uses a trust, proxy, power of attorney, pooling arrangement or any other contract, arrangement or device with the purpose or effect of
divesting such person of beneficial ownership of a security or preventing the vesting of such beneficial ownership as part of a plan or scheme to evade the reporting requirements of the federal securities acts shall be deemed to be the
beneficial owner of such security.
|
3. |
Notwithstanding the provisions of paragraph (1), a person is deemed to be the “beneficial owner” of a security if that person has the right to acquire beneficial ownership of such
security within 60 days, including but not limited to any right to acquire: (a) through the exercise of any option, warrant or right; (b) through the conversion of a security; (c) pursuant to the power to revoke a trust, discretionary account
or similar arrangement; or (d) pursuant to the automatic termination of a trust, discretionary account or similar arrangement; provided, however, any person who acquires a security or power specified in (a), (b) or (c) above,
with the purpose or effect of changing or influencing the control of the issuer, or in connection with or as a participant in any transaction having such purpose or effect, immediately upon such acquisition shall be deemed to be the
beneficial owner of the securities which may be acquired through the exercise or conversion of such security or power.
|
1.
|
Acknowledgment. Transferee and Transferor each acknowledge that
Transferee is acquiring Common Stock of the Company from Transferor, upon the terms and subject to the conditions of the Registration Rights Agreement.
|
2.
|
Assignment. Transferor hereby assigns all of its rights under the
Registration Rights Agreement to Transferee.
|
3.
|
Agreement. Transferee agrees that it shall be fully bound by and
subject to the terms of the Registration Rights Agreement and the terms of this Joinder.
|
4.
|
Notice. Any notice required or permitted by the Registration Rights
Agreement shall be given to Transferee at the address listed beside Transferee’s signature below.
|
5.
|
Electronic Signature. This Joinder may be executed by facsimile, by any
electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act, or other applicable law, e.g., www.docusign.com or by .pdf signature by any party and such signature shall be deemed binding for all purposes hereof without delivery of an original signature being thereafter required.
|
TRANSFEROR
|
||
[________________________________]
|
||
By:
|
||
Name:
|
||
Title:
|
||
TRANSFEREE
|
||
[________________________________]
|
||
By:
|
||
Name:
|
||
Title:
|
Legal Name
|
||
Mailing Address
|
||
Email
|
||
Phone
|
||
Information for Notices: |