UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _____ to _____
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
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(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol |
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of May 8, 2024, the registrant had
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains statements that are “forward-looking looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements regarding the financial position, business strategy and the plans and objectives of management for future operations. These statements constitute projections, forecasts and forward-looking statements, and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this Quarterly Report on Form 10-Q, words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “strive,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. When the Company discusses its strategies or plans, the Company is making projections, forecasts or forward-looking statements. Such statements are based on the beliefs of, as well as assumptions made by and information currently available to, the Company’s management.
Forward-looking statements in this Quarterly Report on Form 10-Q may include, for example, statements about:
The Company cautions you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q. These forward-looking statements are only predictions based on the Company’s current expectations and projections about future events and are subject to a number of risks, uncertainties and assumptions, including those described in Part I, Item 1A, “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 21, 2024 (the “2023 Annual Report”), this Quarterly Report on Form 10-Q and the Company’s other filings with the SEC. It is not possible for the management of the Company to predict all risks, nor can the Company assess the impact of all factors on
i
the Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements the Company may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report on Form 10-Q may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements in this Quarterly Report on Form 10-Q.
The forward-looking statements included in this Quarterly Report on Form 10-Q are made only as of the date hereof. You should not rely upon forward-looking statements as predictions of future events. Although the Company believes that the expectations reflected in its forward-looking statements are reasonable, the Company cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. The Company does not undertake any obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report on Form 10-Q to conform these statements to actual results or to changes in expectations, except as required by law. You should read this Quarterly Report on Form 10-Q and the documents that have been filed as exhibits hereto with the understanding that the actual future results, levels of activity, performance, events and circumstances of the Company may be materially different from what is expected.
ii
TABLE OF CONTENTS
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PART I. FINANCIAL INFORMATION |
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Item 1. |
1 |
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Condensed Consolidated Balance Sheets as of March 31, 2024, and December 31, 2023 |
1 |
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Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income for the Three Months Ended March 31, 2024 and 2023 |
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3 |
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Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024, and 2023 |
4 |
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6 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
23 |
Item 3. |
28 |
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Item 4. |
28 |
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PART II. OTHER INFORMATION |
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Item 1. |
29 |
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Item 1A. |
29 |
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Item 2. |
29 |
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Item 3. |
29 |
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Item 4. |
29 |
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Item 5. |
29 |
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Item 6. |
30 |
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31 |
iii
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
TIGO ENERGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
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March 31, |
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December 31, |
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ASSETS |
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Current assets |
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Cash and cash equivalents |
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$ |
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$ |
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Marketable securities, short-term |
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Accounts receivable, net of allowances for credit losses of $ |
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Inventory, net |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Operating right-of-use assets |
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Marketable securities, long-term |
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— |
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Intangible assets, net |
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Other assets |
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Goodwill |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities |
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Accounts payable |
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$ |
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$ |
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Accrued expenses and other current liabilities |
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Deferred revenue, current portion |
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Warranty liability, current portion |
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Operating lease liabilities, current portion |
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Total current liabilities |
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Warranty liability, net of current portion |
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Deferred revenue, net of current portion |
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Long-term debt, net of unamortized debt discount and issuance costs |
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Operating lease liabilities, net of current portion |
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Total liabilities |
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(see Note 10) |
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Stockholders’ equity |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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( |
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( |
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Accumulated other comprehensive loss |
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( |
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( |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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See accompanying notes to condensed consolidated financial statements.
1
TIGO ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
(In thousands, except share and per share data)
(Unaudited)
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Three Months Ended March 31, |
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2024 |
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2023 |
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Net revenue |
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$ |
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$ |
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Cost of revenue |
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Gross profit |
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Operating expenses: |
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Research and development |
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Sales and marketing |
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General and administrative |
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Total operating expenses |
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(Loss) income from operations |
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( |
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Other expenses, net: |
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Change in fair value of preferred stock warrant and contingent shares liability |
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( |
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Loss on debt extinguishment |
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— |
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Interest expense |
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Other income, net |
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( |
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( |
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Total other expenses, net |
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Net (loss) income |
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( |
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Unrealized gain resulting from change in fair value of marketable securities |
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$ |
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$ |
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Comprehensive (loss) income |
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$ |
( |
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$ |
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Net (loss) income |
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$ |
( |
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$ |
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Cumulative dividends on convertible preferred stock |
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— |
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( |
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Net (loss) income attributable to common stockholders |
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$ |
( |
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$ |
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(Loss) earnings per common share |
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Basic |
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$ |
( |
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$ |
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Diluted |
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$ |
( |
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$ |
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Weighted-average shares of common stock outstanding |
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Basic |
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Diluted |
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See accompanying notes to condensed consolidated financial statements.
2
TIGO ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
(In thousands, except share data) (Unaudited)
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Stockholders’ equity |
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Common stock |
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Shares |
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Amount |
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Additional |
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Accumulated |
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Accumulated comprehensive (loss) income |
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Total |
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Balance at December 31, 2023 |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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Issuance of common stock upon exercise of stock options |
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— |
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— |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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Issuance of common stock in connection with the acquisition of fSight (see Note 4) |
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— |
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— |
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— |
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Issuance of common stock in connection with employee incentive stock awards |
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— |
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— |
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— |
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— |
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— |
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Unrealized gain resulting from change in fair value of marketable securities |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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( |
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— |
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( |
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Balance at March 31, 2024 |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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Stockholders’ deficit |
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Convertible preferred stock |
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Common stock |
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Shares (1) |
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Amount |
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Shares (1) |
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Amount |
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Additional |
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Accumulated |
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Accumulated comprehensive income |
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Total |
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Balance at December 31, 2022 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
— |
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$ |
( |
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Retroactive application (Note 3) |
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( |
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— |
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( |
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( |
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— |
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— |
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— |
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Balance at December 31, 2022, as converted |
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( |
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— |
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( |
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Issuance of common stock upon exercise of stock options |
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— |
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— |
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— |
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— |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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— |
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— |
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Issuance of common stock in connection with the acquisition of fSight |
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— |
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— |
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— |
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— |
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— |
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Unrealized gain resulting from change in fair value of marketable securities |
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— |
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— |
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— |
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— |
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— |
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— |
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Net income |
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— |
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— |
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— |
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— |
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— |
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— |
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Balance at March 31, 2023, as converted |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
( |
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See accompanying notes to condensed consolidated financial statements.
3
TIGO ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
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Three Months Ended March 31, |
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2024 |
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2023 |
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Cash Flows from Operating activities: |
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Net (loss) income |
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$ |
( |
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$ |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation and amortization |
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Reserve for inventory obsolescence |
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Change in fair value of preferred stock warrant and contingent shares liability |
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( |
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Non-cash interest expense |
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Stock-based compensation |
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Allowance for credit losses |
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( |
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Loss on debt extinguishment |
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— |
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Non-cash lease expense |
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Accretion of interest on marketable securities |
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( |
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( |
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Changes in operating assets and liabilities: |
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Accounts receivable |
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( |
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Inventory |
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( |
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Prepaid expenses and other assets |
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( |
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Accounts payable |
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( |
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Accrued expenses and other liabilities |
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( |
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Deferred revenue |
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Warranty liability |
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( |
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Operating lease liabilities |
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( |
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( |
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Net cash used in operating activities |
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$ |
( |
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$ |
( |
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Investing activities: |
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Purchase of marketable securities |
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— |
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( |
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Acquisition of fSight |
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— |
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Purchase of intangible assets |
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— |
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( |
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Purchase of property and equipment |
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( |
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( |
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Sales and maturities of marketable securities |
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— |
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Net cash provided (used) by investing activities |
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$ |
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$ |
( |
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Financing activities: |
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Proceeds from Convertible Promissory Note |
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— |
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Repayment of from Series 2022-1 Notes |
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— |
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( |
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Payment of financing costs |
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— |
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( |
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Payment of deferred issuance costs related to future equity issuance |
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— |
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( |
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Proceeds from exercise of stock options |
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Net cash provided by financing activities |
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$ |
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$ |
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Net increase in cash and cash equivalents |
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Cash and cash equivalents at beginning of period |
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Cash and cash equivalents at end of period |
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$ |
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$ |
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See accompanying notes to condensed consolidated financial statements.
4
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Three Months Ended March 31, |
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(in thousands) |
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2024 |
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2023 |
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Supplemental disclosure of cash flow information: |
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Cash paid for interest |
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$ |
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$ |
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Cash paid for income taxes |
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— |
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Supplemental schedule of non-cash investing and financing activities: |
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Deferred issuance costs related to future equity issuance in accrued expenses and accounts payable |
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— |
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Financing costs in accounts payable |
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— |
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Operating lease right of use assets obtained in exchange for operating lease liabilities |
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Property and equipment in accounts payable |
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Non-cash consideration paid for the acquisition of fSight |
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Contingent shares liability from fSight acquisition |
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Unrealized gain resulting from change in fair value of marketable securities |
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$ |
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$ |
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See accompanying notes to condensed consolidated financial statements.
5
TIGO ENERGY, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
Tigo Energy, Inc. (f/k/a Roth CH Acquisition IV Co.) and subsidiaries (together, the “Company”) consists of Tigo Energy, Inc. (“Tigo”), its wholly-owned direct subsidiary: Tigo Energy MergeCo, Inc. (f/k/a Tigo Energy, Inc.) (“Legacy Tigo”), and its wholly-owned indirect subsidiaries: Tigo Energy Israel Ltd., Foresight Energy, Ltd. (“fSight”), Tigo Energy Italy SRL, Tigo Energy Systems Trading (Suzhou) and Tigo Energy Australia Pty Ltd. Prior to the consummation of the Business Combination (as defined below), the operations of the Company were conducted through Legacy Tigo. Legacy Tigo was incorporated in Delaware in 2007 and commenced operations in 2010.
The Company provides solar and energy storage solutions, including module level power electronics (“MLPE”) designed to maximize the energy output of individual solar modules, delivering more energy, active management, and enhanced safety for utility, commercial, and residential solar arrays. The Company is headquartered in Campbell, California with offices in Europe, Asia and the Middle East.
Entry into a Material Definitive Agreement
On December 5, 2022, Roth CH Acquisition IV Co., a Delaware corporation (“ROCG”), Roth IV Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of ROCG (“Merger Sub”), and Legacy Tigo, entered into an Agreement and Plan of Merger, as amended on April 6, 2023 (the “Merger Agreement”), pursuant to which, among other transactions, on May 23, 2023 (the “Closing Date”), Merger Sub merged with and into Legacy Tigo (the “Merger”), with Legacy Tigo surviving the Merger as a wholly-owned subsidiary of ROCG (the Merger, together with the other transactions described in the Merger Agreement, the “Business Combination”). In connection with the closing of the Business Combination, ROCG changed its name to “Tigo Energy, Inc.”
Please refer to Note 3 “Merger with Roth CH Acquisition IV Co.” for additional details regarding the Business Combination.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) promulgated by the Financial Accounting Standards Board (“FASB”). The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Pursuant to the Business Combination, the merger between ROCG and Legacy Tigo was accounted for as a reverse recapitalization in accordance with U.S. GAAP (the “Reverse Recapitalization”). Under this method of accounting, ROCG was treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Legacy Tigo issuing stock for the net assets of ROCG, accompanied by a recapitalization. The net assets of ROCG are stated at historical cost, with no goodwill or other intangible assets recorded. The consolidated assets, liabilities and results of operations prior to the Reverse Recapitalization are those of Legacy Tigo. The shares and corresponding capital amounts and earnings per share available for common stockholders, prior to the Closing Date, have been retroactively recasted as shares reflecting the exchange ratio established in the Business Combination. Please refer to Note 3 “Merger with Roth CH Acquisition IV Co.” for additional details regarding the Business Combination.
The Company has determined the functional currency of the subsidiaries to be the U.S. dollar. The Company remeasures monetary assets and liabilities of its foreign operations at exchange rates in effect at the balance sheet date and nonmonetary assets and liabilities at their historical exchange rates. Expenses are remeasured at the weighted-average exchange rates during the relevant reporting period. These remeasurement gains and losses are recorded in other income, net in the condensed consolidated statements of operations and comprehensive loss and were not material for the three months ended March 31, 2024 and 2023.
In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all normal and recurring adjustments (which consist primarily of accruals, estimates and assumptions that impact the unaudited condensed consolidated financial statements) considered necessary to present fairly Tigo’s condensed consolidated balance sheet as of March 31, 2024 and its condensed consolidated statements of operations and comprehensive (loss) income, cash flows, and convertible preferred stock and changes stockholders’ equity (deficit) for the three months ended March 31, 2024 and 2023. Operating results for the three months ended March 31, 2024, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2024.
6
Tigo Energy, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
The unaudited condensed consolidated financial statements, presented herein, do not contain all of the required disclosures under GAAP for annual consolidated financial statements. The condensed consolidated balance sheet as of December 31, 2023, has been derived from the audited consolidated balance sheet as of that date. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and related notes thereto for the year ended December 31, 2023.
The Company’s significant accounting policies are described in Note 2 to its audited consolidated financial statements for the year ended December 31, 2023, which are included in the Company’s Annual Report on Form 10-K filed with the SEC on March 21, 2024.
Emerging Growth Company Status
The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (JOBS Act). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical information and various other assumptions that are believed to be reasonable under the circumstances. Examples of such estimates include, among other things, the valuation of share-based awards, the recoverability of long-lived assets, the assessment of intangible assets and goodwill for impairment, provisions for warranty and expected credit losses, inventory obsolescence, sales returns, future price concessions, valuation allowances and the estimated useful lives of plant and equipment and acquired intangible assets. Actual results may materially differ from these estimates. On an ongoing basis, the Company reviews its estimates to ensure that these estimates appropriately reflect changes in its business or new information as it becomes available.
Recently issued accounting pronouncements not yet adopted
In November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (CODM) and included within each reported measure of a segment’s profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is also permitted. We are currently evaluating the provisions of this ASU and expect to adopt them for the year ending December 31, 2024.
In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). This ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024, although retrospective application is permitted. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. We are currently evaluating the provisions of this ASU and expect to adopt them for the year ending December 31, 2024.
In March 2024, the SEC adopted final rules that would require registrants to provide certain climate-related information in their registration statements and annual reports. The new rules require information about a registrant's climate-related risks that are reasonably likely to have a material impact on its business, results of operations, or financial condition. The rules also require disclosure of certain climate-related financial metrics in registrant’s audited financial statements, and, for certain registrants, disclosure regarding such registrant’s greenhouse gas emissions. In April 2024, the SEC voluntarily stayed the rules pending completion of a judicial review that
7
Tigo Energy, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
is currently pending in the U.S. Court of Appeals for the Eighth Circuit. The Company is currently evaluating the impact of these rules on the Company’s financial statements and related disclosures.
The Business Combination was accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, ROCG was treated as the “acquired” company and Legacy Tigo was considered the “acquirer” for financial reporting purposes. This determination was primarily based on Legacy Tigo stockholders comprising a majority of the voting power of the Company, Legacy Tigo’s senior management comprising substantially all of the senior management of the Company, Legacy Tigo’s relative size compared to ROCG, and Legacy Tigo’s operations prior to the acquisition comprising the only ongoing operations of the Company. Accordingly, for accounting purposes, the financial statements of the Company represent a continuation of the financial statements of Legacy Tigo with the Business Combination being treated as the equivalent of Legacy Tigo issuing stock for the net assets of ROCG, accompanied by a recapitalization. The net assets of ROCG are stated at historical costs, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination are presented as those of Legacy Tigo. All periods prior to the Business Combination have been retrospectively adjusted using the exchange ratio established in the Business Combination of
As part of the reverse recapitalization, Legacy Tigo acquired $
Immediately prior to the closing of the Business Combination:
At the effective time of the Business Combination, each share of Legacy Tigo common stock issued and outstanding immediately prior to the closing (including the shares of Legacy Tigo common stock issued in connection with the foregoing) were canceled and converted into the right to receive a pro rata portion of the merger consideration based on the Exchange Ratio.
In connection with the Business Combination, the Company issued
Immediately following the Business Combination, there were
On January 25, 2023 (“Acquisition Closing Date”), Legacy Tigo acquired
Under the terms of the purchase agreement, total consideration amounted to $
8
Tigo Energy, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
Combination) issued at closing with a fair value of approximately $
Pursuant to the terms of the purchase agreement, the Contingent Shares are subject to adjustment based on certain indemnification obligations, liabilities or settlements that may arise during the contingency period, which ends 18 months following the Acquisition Closing Date. During the year ended December 31, 2023, there was an adjustment recorded against the Contingent Shares related to an unrecorded liability that was not present as of the opening balance sheet date of January 25, 2023, and the number of Contingent Shares was adjusted downward by
The Contingent Shares were recorded as a liability at a fair value of approximately $
On January 25, 2024, consistent with the terms of the purchase agreement, the Company issued the 12-month tranche of Contingent Shares,
At March 31, 2024, the remaining liability was revalued to $
The transaction was accounted for as a business combination pursuant to ASC Topic 805, Business Combinations, using the acquisition method of accounting and in conjunction with the acquisition, Legacy Tigo recognized $
9
Tigo Energy, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
The assets acquired and liabilities assumed were recorded at fair value as follows (in thousands):
Consideration transferred: |
|
|
|
|
Fair value of common stock issued |
|
$ |
|
|
Fair value of contingent shares |
|
|
|
|
Deemed settlement of loan payable |
|
|
|
|
Total consideration |
|
$ |
|
|
|
|
|
|
|
Assets acquired: |
|
|
|
|
Cash and cash equivalents |
|
$ |
|
|
Accounts receivable |
|
|
|
|
Property and equipment |
|
|
|
|
Developed technology |
|
|
|
|
Customer relationships |
|
|
|
|
Goodwill |
|
|
|
|
Total assets acquired |
|
$ |
|
|
Liabilities assumed: |
|
|
|
|
Accounts payable |
|
$ |
|
|
Accrued expenses |
|
|
|
|
Net assets acquired |
|
$ |
|
|
Supplemental Pro Forma Information (Unaudited)
The following table presents supplemental pro-forma information for the three months ended March 31, 2023 as if the merger with fSight had occurred on January 1, 2022. These amounts have been calculated after applying the Company's accounting policies and are based upon currently available information.
|
|
Three Months Ended |
|
|
(in thousands) |
|
March 31, 2023 |
|
|
Net revenue |
|
$ |
|
|
Net income |
|
$ |
|
|
Supplemental Information of Operating Results
For the three months ended March 31, 2024, the Company’s condensed consolidated statement of operations and comprehensive (loss) income included net revenue of $
Basic net (loss) earnings per share of common stock is computed by dividing net (loss) income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during each period, without consideration for potential dilutive shares of common stock. Diluted net loss per share of common stock is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common share equivalents outstanding for the period determined using the treasury-stock method and if-converted method, as applicable. Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities, which include convertible preferred stock.
Under the two-class method, net earnings for the three months ended March 31, 2023 are adjusted by the difference between the fair value of consideration transferred and the carrying amount of convertible preferred stock during periods where the Company redeems its convertible preferred stock. The remaining earnings (undistributed earnings) are allocated to common stock and each series of convertible preferred stock to the extent that each preferred security may share in earnings as if all of the earnings for the period had been distributed. The total earnings allocated to common stock are then divided by the number of outstanding shares to which the earnings are allocated to determine the earnings per share. The two-class method is not applicable during periods with a net loss, as the holders of the convertible preferred stock have no obligation to fund losses.
10
Tigo Energy, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
The following table sets forth the computation of basic and diluted net (loss) earnings per share to common stockholders:
|
|
Three Months Ended March 31, |
|
|||||
(in thousands, except share and per share data) |
|
2024 |
|
|
2023 |
|
||
Basic net (loss) earnings per common share calculation: |
|
|
|
|
|
|
||
Net (loss) income attributable to common stockholders |
|
$ |
( |
) |
|
$ |
|
|
Undistributed earnings to preferred stock stockholders |
|
|
— |
|
|
|
( |
) |
Net (loss) income attributable to common stockholders – basic |
|
$ |
( |
) |
|
$ |
|
|
Weighted-average shares of common stock outstanding – basic |
|
|
|
|
|
|
||
Net (loss) earnings per share of common stock – basic |
|
$ |
( |
) |
|
$ |
|
|
|
|
|
|
|
|
|
||
Diluted net (loss) earnings per common share calculation: |
|
|
|
|
|
|
||
Net (loss) income attributable to common stockholders – basic |
|
$ |
( |
) |
|
$ |
|
|
Net (loss) income attributable to common stockholders – diluted |
|
$ |
( |
) |
|
$ |
|
|
Weighted-average shares of common stock outstanding – basic |
|
|
|
|
|
|
||
Outstanding options and restricted stock units |
|
|
— |
|
|
|
|
|
Legacy Tigo warrants and common stock warrants |
|
|
— |
|
|
|
|
|
Weighted-average shares of common stock – diluted |
|
|
|
|
|
|
||
Net (loss) earnings per share of common stock – diluted |
|
$ |
( |
) |
|
$ |
|
|
The Company excluded the effect of the below elements from our calculation of diluted (loss) earnings per share, as their inclusion would have been anti-dilutive. These amounts represent the number of instruments outstanding at the end of the period.
|
|
As of March 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Common stock warrants |
|
|
— |
|
|
|
|
|
Outstanding stock options and restricted stock units |
|
|
|
|
|
|
||
Convertible promissory note |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Fair Value Measurements
The Company measures its financial assets and liabilities at fair value on a recurring basis using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Authoritative guidance establishes three levels of the fair value hierarchy as follows:
Level 1: |
Quoted market prices in active markets for identical assets or liabilities; |
Level 2: |
Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and |
Level 3: |
Fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
11
Tigo Energy, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
The following fair value hierarchy table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis:
|
|
Fair value measurement at |
|
|||||||||
(in thousands) |
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
|||
March 31, 2024 |
|
|
|
|
|
|
|
|
|
|||
Assets: |
|
|
|
|
|
|
|
|
|
|||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|||
Money market accounts |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
Marketable securities: |
|
|
|
|
|
|
|
|
|
|||
Corporate bonds |
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
U.S. agency securities |
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|||
Contingent shares liability from fSight acquisition |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
December 31, 2023 (audited) |
|
|
|
|
|
|
|
|
|
|||
Assets: |
|
|
|
|
|
|
|
|
|
|||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|||
Money market accounts |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
Marketable securities: |
|
|
|
|
|
|
|
|
|
|||
Corporate bonds |
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
U.S. agency securities |
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|||
Contingent shares liability from fSight acquisition |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
During the three months ended March 31, 2024 and 2023, there were no transfers between Level 1, Level 2 and Level 3.
The following tables are a summary of the changes in fair value of the Company’s marketable securities as of March 31, 2024 and December 31, 2023, respectively:
|
|
As of March 31, 2024 |
|
|||||||||||||
(in thousands) |
|
Amortized cost |
|
|
Unrealized gain |
|
|
Unrealized loss |
|
|
Fair value |
|
||||
Available-for-sale marketable securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Current assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate bonds |
|
$ |
|
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
|
||
U.S. agency securities |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
||
Total available-for-sale marketable securities |
|
$ |
|
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
|
||
|
|
As of December 31, 2023 |
|
|||||||||||||
(in thousands) |
|
Amortized cost |
|
|
Unrealized gain |
|
|
Unrealized loss |
|
|
Fair value |
|
||||
Available-for-sale marketable securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Current assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate bonds |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
U.S. agency securities |
|
|
|
|
|
|
|
$ |
( |
) |
|
|
|
|||
Total |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Long-term assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate bonds |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Total |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total available-for-sale marketable securities |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
12
Tigo Energy, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
As of March 31, 2024, available-for-sale securities consisted of investments that mature within one year.
Fair Value of Financial Instruments
The carrying amounts of cash and cash equivalents, marketable securities, accounts receivable, accounts payable, and customer deposits approximate fair value due to their short-term nature. As of March 31, 2024, the fair value and carrying value of the Company’s Convertible Promissory Note (Note 9) was $
Geographic Net Revenue
The Company sells its products in the Americas (North and South America), EMEA (Europe, Middle East, and Africa), and APAC (Asia-Pacific) regions.
The following table summarizes net revenue by major geographic region (in millions):
|
|
Three Months Ended March 31, |
|
|||||
(in thousands) |
|
2024 |
|
|
2023 |
|
||
EMEA |
|
$ |
|
|
$ |
|
||
Americas |
|
|
|
|
|
|
||
APAC |
|
|
|
|
|
|
||
Total net revenue |
|
$ |
|
|
$ |
|
||
Deferred Revenue
Deferred revenue or contract liabilities consists of payments received from customers in advance of revenue recognition for the Company’s products and service. The current portion of deferred revenue represents the unearned revenue that will be earned within 12 months of the balance sheet date. Correspondingly, noncurrent deferred revenue represents the unearned revenue that will be earned after 12 months from the balance sheet date.
The following table summarizes the changes in deferred revenue:
|
|
Three Months Ended March 31, |
|
|||||
(in thousands) |
|
2024 |
|
|
2023 |
|
||
Balance at the beginning of the period |
|
$ |
|
|
$ |
|
||
Deferral of revenue |
|
|
|
|
|
|
||
Recognition of unearned revenue |
|
|
( |
) |
|
|
( |
) |
Balance at the end of the period |
|
$ |
|
|
$ |
|
||
As of March 31, 2024, the Company expects to recognize $
The Company recognized approximately $
Product Warranty
The Company estimates the cost of its warranty obligations based on several key estimates: the warranty period (which vary from
13
Tigo Energy, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
The following table summarizes the changes in product warranty liability:
|
|
Three Months Ended March 31, |
|
|||||
(in thousands) |
|
2024 |
|
|
2023 |
|
||
Warranty liability, beginning of the period |
|
$ |
|
|
$ |
|
||
Provision for warranty issued during period |
|
|
|
|
|
|
||
Benefit from changes in estimate |
|
|
( |
) |
|
|
( |
) |
Settlements |
|
|
( |
) |
|
|
( |
) |
Warranty liability, end of the period |
|
$ |
|
|
$ |
|
||
Selected financial data as of the dates presented below is as follows (in thousands, except useful life data):
Inventory, net |
|
March 31, |
|
|
December 31, |
|
||
Raw materials |
|
$ |
|
|
$ |
|
||
Finished goods |
|
|
|
|
|
|
||
Inventory, net |
|
$ |
|
|
$ |
|
||
The inventory reserve was $
Property and equipment, net |
|
Estimated Useful Life |
|
March 31, |
|
|
December 31, |
|
||
Machinery and equipment |
|
|
$ |
|
|
$ |
|
|||
Vehicles |
|
|
|
|
|
|
|
|||
Computer software |
|
|
|
|
|
|
|
|||
Computer equipment |
|
|
|
|
|
|
|
|||
Furniture and fixtures |
|
|
|
|
|
|
|
|||
Leasehold improvements |
|
|
|
|
|
|
|
|||
Construction in progress |
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
||
Less: Accumulated depreciation |
|
|
|
|
|
|
|
|
||
Property and equipment, net |
|
|
|
$ |
|
|
$ |
|
||
For the three months ended March 31, 2024, and 2023 the Company recorded depreciation expense of $
Accrued expenses and other current liabilities |
|
March 31, |
|
|
December 31, |
|
||
Accrued vacation |
|
$ |
|
|
$ |
|
||
Accrued compensation |
|
|
|
|
|
|
||
Accrued interest |
|
|
|
|
|
|
||
Accrued professional fees |
|
|
|
|
|
|
||
Accrued warehouse and freight |
|
|
|
|
|
|
||
Accrued other |
|
|
|
|
|
|
||
Other current liabilities(1) |
|
|
|
|
|
|
||
Accrued expenses and other current liabilities |
|
$ |
|
|
$ |
|
||
|
|
March 31, |
|
|
December 31, |
|
||
Allowance for credit losses, beginning balance |
|
$ |
|
|
$ |
|
||
Net charges to expense or revenue |
|
|
( |
) |
|
|
|
|
Write-offs, net of recoveries |
|
|
— |
|
|
|
( |
) |
Allowance for credit losses, ending balance |
|
$ |
|
|
$ |
|
||
14
Tigo Energy, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
Long-term debt consisted of the following (in thousands):
|
|
March 31, |
|
|
December 31, |
|
||
Convertible Promissory Note |
|
$ |
|
|
$ |
|
||
Less: unamortized debt discount and issuance costs |
|
|
( |
) |
|
|
( |
) |
Long-term debt, net of unamortized debt discount and issuance costs |
|
$ |
|
|
$ |
|
||
During the three months ended March 31, 2024, and 2023, the Company recorded amortization of $
Convertible Promissory Notes
On January 9, 2023, the Company entered into the Note Purchase Agreement (“Note Purchase Agreement”) with L1 Energy Capital Management S.a.r.l. (“L1 Energy”) pursuant to which the Company issued the Convertible Promissory Note in the aggregate principal amount of $
Under the terms of the Note Purchase Agreement,
As a result of the Business Combination, the conversion options were bifurcated and accounted for as derivatives. Upon recognition, the Company recorded the conversion options at fair value and associated debt discount of $
15
Tigo Energy, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
Future aggregate principal maturities of long-term debt are as follows as of March 31, 2024 (in thousands):
Remainder of 2024 |
|
$ |
— |
|
2025 |
|
|
— |
|
2026 |
|
|
|
|
2027 |
|
|
— |
|
2028 |
|
|
— |
|
Thereafter |
|
|
— |
|
|
|
$ |
|
Series 2022-1 Notes
In January 2023, concurrently with the Convertible Promissory Note transaction, the Company repaid the Series 2022-1 Notes issued in January 2022 with a principal amount of $
Employment Agreements
The Company entered into employment agreements with key personnel providing compensation and severance in certain circumstances, as defined in the respective employment agreements.
Legal
In the normal course of business, the Company may become involved in litigation or legal disputes that are not covered by insurance. While the Company intends to vigorously defend itself with respect to such disputes, any potential outcomes resulting from such claims would be inherently difficult to quantify.
Indemnification Agreements
From time to time, in its normal course of business, the Company may indemnify other parties with which it enters into contractual relationships, including customers, lessors and parties to other transactions with the Company. The Company may agree to hold other parties harmless against specific losses, such as those that could arise from third-party claims or a breach of representation or covenant. It may not be possible to determine the maximum potential amount of liability under such indemnification agreements due to the unique facts and circumstances that are likely to be involved in each particular claim and indemnification provision.
The Company has also indemnified its Directors and Executive Officers, to the extent legally permissible, against all liabilities reasonably incurred in connection with any action in which such individual may be involved by reason of such individual being or having been a Director or Executive Officer.
The Company believes the current estimated fair value of any obligation from these indemnification agreements is minimal; therefore, these condensed consolidated financial statements do not include a liability for any potential obligations at March 31, 2024.
Common and Preferred Stock
The Company is authorized to issue
The Company is authorized to issue
16
Tigo Energy, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
Common Stock Reserved for Future Issuance
Shares of Common Stock reserved for future issuance, on an as-if converted basis, were as follows:
|
|
As of March 31, 2024 |
|
|
Stock options issued and outstanding |
|
|
|
|
Restricted stock units issued and outstanding |
|
|
|
|
Shares available for potential conversion of L1 Convertible Note |
|
|
|
|
Shares available for fSight Contingent Shares |
|
|
|
|
Shares available for grant under 2023 Equity Incentive Plan |
|
|
|
|
|
|
|
|
|
Common Stock Warrants
Legacy Tigo had outstanding warrants to purchase
In connection with the Business Combination, the Company assumed
On August 9, 2023, the Company announced the redemption of all of its outstanding Public Warrants and Private Warrants to purchase shares of Common Stock that were issued under the Warrant Agreement, dated as of August 5, 2021, by and among the Company and Continental Stock Transfer & Trust Company, as warrant agent, at a redemption price of $
Under the terms of the Warrant Agreement, the Company was entitled to redeem all of its outstanding Warrants for $
A total of
The Company paid $
Convertible Preferred Stock
In connection with the Business Combination, as discussed in Note 3, the Company issued
Convertible Preferred Stock Warrants
Warrants to purchase a total of
17
Tigo Energy, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
was subsequently converted into Legacy Tigo common stock pursuant to the conversion rate in effect immediately prior to the consummation of the Business Combination and all related Legacy Tigo convertible preferred stock warrants were converted into warrants exercisable for shares of Common Stock with terms consistent with the Legacy Tigo convertible preferred stock warrants except for the number of shares exercisable and the exercise price, each of which was adjusted using the Exchange Ratio. In connection with the Business Combination, as discussed in Note 3, all outstanding Series C convertible preferred stock warrants were exercised resulting in the net issuance of
The Company adopted the 2008 Stock Plan (“2008 Plan”) under which it may issue stock options to purchase shares of common stock, and award restricted stock and stock appreciation rights to employees, Directors and consultants. The 2008 Plan expired in March 2018 and all award issuance therefore ceased. Options generally vest over a four-year period with a one-year cliff. The option term is no longer than five years for incentive stock options for which the grantee owns greater than
In May 2018, the Company adopted the 2018 Stock Plan (“2018 Plan”) under which the Company may issue stock options to purchase shares of common stock, and award restricted stock and stock appreciation rights to employees, Directors and consultants.
Under the 2018 Plan, the Board of Directors may grant incentive stock options or nonqualified stock options. Incentive stock options may only be granted to Company employees. The 2018 Plan expired in May 2023 and all award issuance therefore ceased. The exercise price of incentive stock options and non-qualified stock options cannot be less than
In May 2023, the Company adopted the 2023 Equity Incentive Plan (“2023 Plan”) under which the Company may issue stock options to purchase shares of common stock, award restricted stock, restricted stock units (“RSU”), dividend equivalents, stock appreciation rights, and other stock-based or cash-based awards to employees, Directors and consultants.
Through March 31, 2024, the Company has granted
Collectively, the 2008 Stock Plan, 2018 Stock Plan and the 2023 Equity Incentive Plan are referred to as “the Plans”. The Company has authorized
18
Tigo Energy, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
The Company measures stock-based awards at their grant-date fair value and records compensation expense on a straight-line basis over the vesting period of the awards.
|
|
Three Months Ended March 31, |
|
|||||
(in thousands) |
|
2024 |
|
|
2023 |
|
||
Research and development |
|
$ |
|
|
$ |
|
||
Sales and marketing |
|
|
|
|
|
|
||
General and administrative |
|
|
|
|
|
|
||
Cost of sales |
|
|
|
|
|
|
||
Total stock-based compensation |
|
$ |
|
|
$ |
|
||
Stock Options
The following table summarizes stock option activity for the Plans for the three months ended March 31, 2024:
|
|
Number |
|
|
Weighted |
|
|
Weighted |
|
|
Aggregate intrinsic value (in 000's) |
|
||||
Outstanding at December 31, 2023 |
|
|
|
|
$ |
|
|
|
|
|
|
|
||||
Granted |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
|
|
||
Exercised |
|
|
( |
) |
|
$ |
|
|
|
|
|
|
|
|||
Forfeited |
|
|
( |
) |
|
$ |
|
|
|
|
|
|
|
|||
Expired |
|
|
( |
) |
|
$ |
|
|
|
|
|
|
|
|||
Outstanding at March 31, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Exercisable at March 31, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Vested and expected to vest at March 31, 2024 |
|
|
|
|
$ |
|
|
|
|
|
|
|
||||
As of March 31, 2024, the total unrecognized compensation expense related to unvested stock option awards was $
The fair value of options is estimated using the Black-Scholes option pricing model, which takes into account inputs such as the exercise price, the value of the underlying common stock at the grant date, expected term, expected volatility, risk-free interest rate and dividend yield. The fair value of each grant of options was determined using the methods and assumptions discussed below.
19
Tigo Energy, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
There were
|
|
March 31, 2023 |
|
|
Expected volatility |
|
|
% |
|
Risk-free interest rate |
|
|
% |
|
Expected term (in years) |
|
|
|
|
Expected dividend yield |
|
|
— |
% |
Restricted Stock Units
The following table summarizes RSU activity for the Plans for the three months ended March 31, 2024:
|
|
Number |
|
|
Weighted |
|
||
Outstanding at December 31, 2023 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
$ |
|
||
Vested |
|
|
( |
) |
|
$ |
|
|
Forfeited |
|
|
( |
) |
|
$ |
|
|
Outstanding at March 31, 2024 |
|
|
|
|
$ |
|
||
As of March 31, 2024, the total unrecognized compensation expense related to unvested RSUs was $
As a lessee, the Company currently leases office space and vehicles in the United States, Italy, Israel, China, Philippines and Thailand. All of the Company leases are classified as operating leases. The Company has no leases classified as finance or sales-type leases. For leases with terms greater than
When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of its leases do not provide a readily determinable implicit rate. Therefore, the Company must estimate its incremental borrowing rate to discount the lease payments based on information available at lease commencement. The majority of the Company’s leases have remaining lease terms of one to
The components of lease expense are as follows (in thousands):
|
|
Three Months Ended March 31, |
|
|||||
(in thousands) |
|
2024 |
|
|
2023 |
|
||
Operating lease costs |
|
$ |
|
|
$ |
|
||
Variable lease costs |
|
|
|
|
|
|
||
Total lease cost |
|
$ |
|
|
$ |
|
||
Other information related to leases was as follows:
|
|
Three Months Ended March 31, |
|
|||||
Supplemental Cash Flows Information (in thousands) |
|
2024 |
|
|
2023 |
|
||
Operating lease right of use assets obtained in exchange for operating lease liabilities |
|
$ |
|
|
$ |
|
||
Cash paid for amounts included in the measurement of lease liabilities |
|
$ |
|
|
$ |
|
||
20
Tigo Energy, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
|
|
March 31, 2024 |
|
|
December 31, 2023 |
|
||
Weighted average remaining lease term (years) |
|
|
|
|
|
|
||
Weighted average discount rate |
|
|
% |
|
|
% |
||
Future maturities of lease liabilities were as follows as of March 31, 2024:
(in thousands) |
|
Operating Leases |
|
|
Remainder of 2024 |
|
$ |
|
|
2025 |
|
|
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
Thereafter |
|
|
|
|
Total future minimum lease payments |
|
$ |
|
|
Less: imputed interest |
|
|
|
|
Present value of lease liabilities |
|
$ |
|
|
As of March 31, 2024, the Company had a goodwill balance of $
The Company's intangible assets by major asset class are as follows:
|
|
March 31, 2024 |
|
|||||||||||||
(in thousands, except for useful life amounts) |
|
Weighted Average Useful Life (Years) |
|
Gross |
|
|
|
Accumulated Amortization |
|
|
|
Net Book Value |
|
|||
Amortizing: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Patents |
|
|
$ |
|
|
|
$ |
( |
) |
|
|
$ |
|
|||
Customer relationships |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
Developed technology |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
Total intangible assets |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
|
$ |
|
||
|
|
December 31, 2023 |
|
|||||||||||||
(in thousands, except for useful life amounts) |
|
Weighted Average Useful Life (Years) |
|
Gross |
|
|
|
Accumulated Amortization |
|
|
|
Net Book Value |
|
|||
Amortizing: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Patents |
|
|
$ |
|
|
|
$ |
( |
) |
|
|
$ |
|
|||
Customer relationships |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
Developed technology |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
Total intangible assets |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
|
$ |
|
||
The Company recognized amortization expense related to intangible assets of $
21
Tigo Energy, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
Amortization expense related to intangible assets at March 31, 2024 in each of the next five years and beyond is expected to be incurred as follows (in thousands):
(in thousands) |
|
Amount |
|
|
Remainder of 2024 |
|
$ |
|
|
2025 |
|
|
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
Thereafter |
|
|
|
|
|
|
$ |
|
|
The income tax provision is calculated for an interim period by distinguishing between elements recognized in the income tax provision through applying an estimated annual effective tax rate to a measure of year-to-date operating results referred to as “ordinary income (or loss),” and discretely recognizing specific events referred to as “discrete items” as they occur. The Company’s effective tax rates for the three months ended March 31, 2024, and 2023 differ from the federal statutory rate of
22
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with our condensed consolidated financial statements and the related notes that appear elsewhere in this Quarterly Report on Form 10-Q, and the audited consolidated financial statements and notes thereto included in our 2023 Annual Report. In addition to historical data, this discussion contains forward-looking statements about our business, results of operations, cash flows, financial condition and prospects based on current expectations that involve risks, uncertainties and assumptions. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those discussed in the sections titled “Cautionary Note Regarding Forward-Looking Statements” included elsewhere in this Quarterly Report on Form 10-Q and in Part I, Item 1A, “Risk Factors” in the 2023 Annual Report. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future. Unless otherwise indicated or the context otherwise requires, references in this section to “we,” “our,” “us,” “the Company” or other similar terms refer to the business and operations of Tigo Energy, Inc. and its subsidiaries prior to the Business Combination (“Legacy Tigo”) and Tigo Energy Inc. following the consummation of the Business Combination. References to “ROCG” refer to Roth CH Acquisition IV Co. prior to the consummation of the Business Combination.
Overview
Our mission is to deliver smart systems solutions, combining hardware and software, which enhance safety, increase energy yield, and lower operating costs of residential, commercial, and utility-scale solar systems. We believe we are a worldwide leader in the development and delivery of products and solutions that are flexible and dependable, increase the energy generation of solar energy systems and address the need for change. We primarily offer products and services through distributors and solar installers. We have a worldwide footprint with product installations in over 100 countries and on all seven continents.
Key Factors that May Influence Future Results of Operations
Our financial results of operations may not be comparable from period to period due to several factors. Key factors affecting our results of operations are summarized below.
Demand for Products. The demand for our products in Europe and the United States experienced a notable slowdown beginning in the second quarter in 2023 and continued into the first quarter of 2024. In Europe, the slowdown was primarily due to elevated inventory levels with distributors and an overall channel inventory correction as they responded to a slower demand environment. Additionally, there has been uncertainty surrounding the net energy metering policies and solar export penalties in the European markets, such as Germany, Belgium, Italy and the United Kingdom, which also contributed to the overall slowdown in demand in Europe. In the United States, the slowdown was primarily attributable due to higher interest rates than recent prior periods and the transition from the second iteration of net metering (“NEM 2.0”) to the third iteration of net metering (“NEM 3.0”) in California. The factors noted above have led to elevated inventory levels with distributors and installers in both regions. Given these factors, revenues have been, and may continue to be, adversely affected in 2024.
In response to the factors noted above, we reduced staffing levels across all geographies in December 2023 by approximately 15%, and in April 2024 by approximately 10%. As a result, we expect to reduce cash expenditures associated with the reduction of personnel costs by approximately $7.3 million in 2024.
Unfavorable Macroeconomic and Market Conditions. The global macroeconomic and market uncertainty, including higher interest rates and inflation, has caused disruptions in financial markets and may continue to have an adverse effect on the U.S. and world economies. Since the second quarter of 2023, we have experienced a significant number of customer requests to delay purchase order deliveries and a smaller number of purchase order cancellations and returns. Other customers may decide to delay purchasing our products and services or not purchase at all. A tighter credit market for consumer and business spending could, in turn, adversely affect spending levels of installers and end users and lead to increased price competition for our products. Reductions in customer spending in response to unfavorable or uncertain macroeconomic and market conditions, globally or in a particular region where we operate, have adversely affected, and could continue to adversely affect our business, results of operations and financial condition.
Managing Supply Chain. We rely on contract manufacturers and suppliers to produce our components. Our ability to grow depends, in part, on the ability of our contract manufacturers and suppliers to provide high quality services and deliver components and finished products on time and at reasonable costs. While we have diversified our supply chain, some of our suppliers and contract manufacturers are sole-source suppliers. Our concentration of suppliers could lead to supply shortages, long lead times for components and supply changes. A significant portion of our supply chain originates in Thailand and China. In the event we are unable to mitigate the impact of delays and/or price increases in raw materials, electronic components and freight, it could delay the manufacturing and delivery of our products, which would adversely impact our cash flows and results of operations, including revenue and gross margin. In addition, in a slowing economic environment, our inventory levels may continue to increase due to existing purchase commitments and our ability to negotiate volume pricing discounts may be impaired.
23
Expansion of Sales with Existing Customers and Adding New Customers. Our future revenue growth is, in part, dependent on our ability to expand product offerings and services in the U.S. residential market. In our North American market, revenue is generally generated from our product offerings and services in the commercial and industrial markets. In order to continue revenue growth, we plan to expand our presence in the residential market through offerings with residential solar providers. We also expect to continue to evaluate and invest in new market opportunities internationally. We believe that our entry into new markets will continue to facilitate revenue growth and customer diversification. We primarily acquire new customers through collaboration with our industry partners and distributors. While we expect that a substantial portion of our future revenues in the near-term will be generated from our existing customers, we expect to invest in our sales and marketing to broaden reach with new residential customers in the U.S. and EMEA.
Expansion of New Products and Services. We have made substantial investments in research and development and sales and marketing to achieve a leading position in our market and revenue growth. While a majority of our revenue is generated from the sale of our MLPE products, we intend to continue the development and promotion of our GO Energy Storage Systems (“GO ESS”) and Predict+ product and service lines.
Key Operating and Financial Metrics
We regularly review a number of metrics, including the following key operating and financial metrics, to evaluate our business, measure our performance, identify trends in our business, prepare financial projections and make strategic decisions. We believe the operating and financial metrics presented are useful in evaluating our operating performance, as they are similar to measures used by our public competitors and are regularly used by security analysts, institutional investors, and other interested parties in analyzing operating performance and prospects.
The following table sets forth these metrics for the periods presented:
|
|
Three Months Ended March 31, |
|
|||||
(in thousands, except percentages) |
|
2024 |
|
|
2023 |
|
||
Net revenue |
|
$ |
9,802 |
|
|
$ |
50,058 |
|
Gross profit |
|
$ |
2,766 |
|
|
$ |
18,369 |
|
Gross margin |
|
|
28.2 |
% |
|
|
36.7 |
% |
(Loss) income from operations |
|
$ |
(9,088 |
) |
|
$ |
7,820 |
|
Net (loss) income |
|
$ |
(11,506 |
) |
|
$ |
6,910 |
|
Gross Profit and Gross Margin
We define gross profit as total net revenue less cost of revenue, and define gross margin, expressed as a percentage, as the ratio of gross profit to revenue. Gross profit and margin can be used to understand our financial performance and efficiency and allow investors to evaluate its pricing strategy and compare it against competitors. We use these metrics to make strategic decisions identifying areas for improvement, set targets for future performance and make informed decisions about how to allocate resources going forward.
Key Components and Comparison of Results of Operations
Net Revenue
|
|
Three Months Ended March 31, |
|
|||||||||||||
|
|
|
|
|
|
|
|
Change in |
|
|||||||
(in thousands, except percentages) |
|
2024 |
|
|
2023 |
|
|
$ |
|
|
% |
|
||||
Net revenue |
|
$ |
9,802 |
|
|
$ |
50,058 |
|
|
$ |
(40,256 |
) |
|
|
(80.4 |
)% |
Three Months ended March 31, 2024, and 2023
Net revenue decreased by $40.3 million or 80.4% for the three months ended March 31, 2024, as compared to the same period in 2023, primarily due to the solar industry experiencing a broad-based slowdown in both the U.S. and European markets, that resulted in elevated inventory with distributors and installers, and as a result the overall demand for our products and services decreased as distributors and installers responded to this slower demand environment. In the Americas region, this slowdown was primarily the result of higher interest rates and the transition from NEM 2.0 to NEM 3.0 in California. In the EMEA region, this slowdown was primarily the result of a decrease in customer purchases in Europe after a surge of sales were realized in 2022 and going into the first half of 2023
24
due to higher energy prices in Europe related to the onset of the armed conflict in Ukraine in 2022, and overall channel inventory correction.
|
|
Three Months Ended March 31, |
|
|||||||||||||
|
|
|
|
|
|
|
|
Change in |
|
|||||||
(in thousands, except percentages) |
|
2024 |
|
|
2023 |
|
|
$ |
|
|
% |
|
||||
EMEA |
|
$ |
5,789 |
|
|
$ |
40,259 |
|
|
$ |
(34,470 |
) |
|
|
(85.6 |
)% |
Americas |
|
|
2,738 |
|
|
|
6,981 |
|
|
|
(4,243 |
) |
|
|
(60.8 |
)% |
APAC |
|
|
1,275 |
|
|
|
2,818 |
|
|
|
(1,543 |
) |
|
|
(54.8 |
)% |
Total net revenue |
|
$ |
9,802 |
|
|
$ |
50,058 |
|
|
$ |
(40,256 |
) |
|
|
(80.4 |
)% |
Three Months ended March 31, 2024, and 2023
Cost of Revenue and Gross Profit
|
|
Three Months Ended March 31, |
|
|||||||||||||
|
|
|
|
|
|
|
|
Change in |
|
|||||||
(in thousands, except percentages) |
|
2024 |
|
|
2023 |
|
|
$ |
|
|
% |
|
||||
Cost of revenue |
|
$ |
7,036 |
|
|
$ |
31,689 |
|
|
$ |
(24,653 |
) |
|
|
(77.8 |
)% |
Gross profit |
|
$ |
2,766 |
|
|
$ |
18,369 |
|
|
$ |
(15,603 |
) |
|
|
(84.9 |
)% |
|
|
Three Months Ended March 31, |
|
|||||||||
|
|
2024 |
|
|
2023 |
|
|
Change |
|
|||
Gross margin |
|
|
28.2 |
% |
|
|
36.7 |
% |
|
|
(8.5 |
)% |
Three Months ended March 31, 2024, and 2023
Cost of revenue decreased by $24.7 million or 77.8% and gross profit decreased by $15.6 million or 84.9% for the three months ended March 31, 2024, as compared to the same period in 2023, primarily due to an 80.4% decrease in net revenue for the three months ended March 31, 2024 compared to the same period in 2023.
Gross margin decreased by 8.5% for the three months ended March 31, 2024, as compared to the same period in 2023, primarily due to sales promotions and discounts related to the Company’s GO ESS product line.
Research and Development
|
|
Three Months Ended March 31, |
|
|||||||||||||
|
|
|
|
|
|
|
|
Change in |
|
|||||||
(in thousands, except percentages) |
|
2024 |
|
|
2023 |
|
|
$ |
|
|
% |
|
||||
Research and development |
|
$ |
2,471 |
|
|
$ |
2,214 |
|
|
$ |
257 |
|
|
|
11.6 |
% |
Percentage of net revenue |
|
|
25.2 |
% |
|
|
4.4 |
% |
|
|
|
|
|
|
||
Three Months ended March 31, 2024, and 2023
Research and development expense increased by $0.3 million or 11.6% for the three months ended March 31, 2024, as compared to the same period in 2023. Research and development expense as percentage of net revenue increased to 25.2% for the three months ended March 31, 2024, compared to 4.4% for the same period in 2023. The overall increase was primarily driven by higher personnel-related expenses attributable to higher personnel-related stock-based compensation expenses, in addition to an increase in consulting
25
expense. The amount of research and development expenses may fluctuate from period to period due to differing levels and stages of development activity.
Sales and Marketing
|
|
Three Months Ended March 31, |
|
|||||||||||||
|
|
|
|
|
|
|
|
Change in |
|
|||||||
(in thousands, except percentages) |
|
2024 |
|
|
2023 |
|
|
$ |
|
|
% |
|
||||
Sales and marketing |
|
$ |
4,603 |
|
|
$ |
4,772 |
|
|
$ |
(169 |
) |
|
|
(3.5 |
)% |
Percentage of net revenue |
|
|
47.0 |
% |
|
|
9.5 |
% |
|
|
|
|
|
|
||
Three Months ended March 31, 2024, and 2023
Sales and marketing expense remained consistent for the three months ended March 31, 2024, as compared to the same period in 2023. Sales and marketing expense as a percentage of net revenue increased by 37.5% primarily due to a decrease in net revenues for the three months ending March 31, 2024 compared to the same period in 2023.
General and Administrative
|
|
Three Months Ended March 31, |
|
|||||||||||||
|
|
|
|
|
|
|
|
Change in |
|
|||||||
(in thousands, except percentages) |
|
2024 |
|
|
2023 |
|
|
$ |
|
|
% |
|
||||
General and administrative |
|
$ |
4,780 |
|
|
$ |
3,563 |
|
|
$ |
1,217 |
|
|
|
34.2 |
% |
Percentage of net revenue |
|
|
48.8 |
% |
|
|
7.1 |
% |
|
|
|
|
|
|
||
Three Months ended March 31, 2024, and 2023
General and administrative expense increased by $1.2 million or 34.2% for the three months ended March 31, 2024, as compared to the same period in 2023. The increase was primarily related to higher personnel-related stock-based compensation expenses, and an increase in professional fees, which is attributable to higher audit fees and legal expenses.
Other Expenses, Net
|
|
Three Months Ended March 31, |
|
|||||||||||||
|
|
|
|
|
|
|
|
Change in |
|
|||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
$ |
|
|
% |
|
||||
Change in fair value of preferred stock warrant and contingent shares liability |
|
$ |
(196 |
) |
|
$ |
512 |
|
|
$ |
(708 |
) |
|
|
(138.3 |
)% |
Loss on debt extinguishment |
|
|
— |
|
|
|
171 |
|
|
|
(171 |
) |
|
|
(100.0 |
)% |
Interest expense |
|
|
2,826 |
|
|
|
778 |
|
|
|
2,048 |
|
|
|
263.2 |
% |
Other income, net |
|
|
(212 |
) |
|
|
(551 |
) |
|
|
339 |
|
|
|
(61.5 |
)% |
Total other expenses, net |
|
$ |
2,418 |
|
|
$ |
910 |
|
|
$ |
1,508 |
|
|
|
165.7 |
% |
Three Months ended March 31, 2024, and 2023
Change in fair value of preferred stock warrant and contingent shares liability decreased by $0.7 million or 138.3% for the three months ended March 31, 2024, as compared to the same period in 2023, primarily due to a decrease in mark-to-market expense associated with the contingent shares related to the fSight acquisition.
The loss on debt extinguishment for the three months ended March 31, 2023, is primarily related to the repayment of our Series 2022-1 Notes.
Interest expense increased by $2.0 million or 263.2% for the three months ended March 31, 2024, as compared to the same period in 2023. This increase is primarily due to the amortization of the debt discount of $23.5 million that was recorded upon the bifurcation of the conversion options at the time of the Business Combination. Please see Note 9, “Long-Term Debt,” of the notes to condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information on the conversion options.
26
Other income, net decreased $0.3 million or 61.5% for the three months ended March 31, 2024, as compared to the same period in 2023. This decrease is primarily due to a decrease in interest income from the Company’s marketable securities, as the underlying asset base generating interest income decreased during the three months ended March 31, 2024 compared to the same period in 2023.
Liquidity and Capital Resources
Our principal sources of liquidity are cash, cash equivalents and marketable securities. As of March 31, 2024, the Company held $21.9 million in cash, cash equivalents and marketable securities which were held primarily for working capital purposes. Our working capital, which we define as current assets less current liabilities, decreased by $4.1 million to $74.2 million as March 31, 2024 compared to $78.3 million as of December 31, 2023. The decrease in working capital during this period is primarily attributable to lower marketable securities and inventory balances, and is partially offset by a decrease in accounts payable and accrued expenses and other current liabilities. During the first quarter of 2024, revenues stabilized on a sequential quarter basis but declined on a year over year basis. While we have been actively working on reducing our inventory levels, these efforts will depend on our ability to increase future quarterly revenues, maintain a minimal level of inventory purchases with suppliers, and our ability to recover the book value of inventory. In the first quarter of 2024, we reduced our inventory levels by $5.6 million from December 31, 2023, and expect lower inventory levels and positive working capital cash conversion throughout the remainder of 2024. We believe that our cash position is sufficient to meet our capital and liquidity requirements for at least the next 12 months from the date of this Quarterly Report on Form 10-Q.
In the future, our ability to sustain operations and invest in new technologies may necessitate seeking additional equity or debt financing. Our capital needs will be influenced by several factors, including our revenue growth rate, the success of our future product development and capital investments, and the timing and extent of spending to support further sales and marketing and research and development efforts. In addition, we have incurred and expect to continue to incur additional costs as a result of operating as a public company. In the event that additional financing is required from outside sources, we cannot be certain that any additional financing will be available to us on acceptable terms, or at all. If we are required but unable to raise additional capital or generate cash flows to sustain or expand our business, our business, operating results, and financial condition could be adversely affected.
Cash Flows
The following table summarizes our cash flows for the periods presented:
|
|
Three Months Ended March 31, |
|
|||||
|
|
|
|
|
|
|
||
(in thousands, except percentages) |
|
2024 |
|
|
2023 |
|
||
Net cash used in operating activities |
|
$ |
(11,266 |
) |
|
$ |
(5,087 |
) |
Net cash provided (used) by investing activities |
|
|
15,636 |
|
|
|
(10,655 |
) |
Net cash provided by financing activities |
|
|
250 |
|
|
|
28,631 |
|
Net increase in cash and cash equivalents |
|
$ |
4,620 |
|
|
$ |
12,889 |
|
Management closely monitors expenditures and is focused on obtaining new customers and continuing to develop our products and services. Cash from operations and our liquidity could also be affected by various risks and uncertainties, including, but not limited to, economic concerns related to interest rates, inflation or the supply chain, including timing of cash collections from customers and other risks which are detailed in the section entitled “Cautionary Note Regarding Forward-Looking Statements” included elsewhere in this Quarterly Report on Form 10-Q and in Part I, Item 1A, “Risk Factors” in the 2023 Annual Report.
Cash Flows Used in Operating Activities
Operating cash flows consists primarily of net loss adjusted for certain non-cash items and changes in operating assets and liabilities. Cash used in operating activities increased by $6.2 million for the three months ended March 31, 2024, as compared to the same period in 2023, which was primarily driven by a higher net loss in the first quarter of 2024 compared to the same period in 2023, which is a result of the negative macroeconomic factors that are noted above. The increase in net cash used in operating activities was partially offset by increases in non-cash expenses related to stock-based compensation and accretion of interest expense.
Cash Flows Used in Investing Activities
Net cash provided by investing activities increased by $26.3 million for the three months ended March 31, 2024, compared to the same period in 2023, primarily due to the proceeds from the sale and maturities of a portion of the Company’s marketable securities.
27
Cash Flows Provided by Financing Activities
Net cash provided by financing activities decreased by $28.4 million in the three months ended March 31, 2024, compared to the same period in 2023. For the three months ended March 31, 2024, we received proceeds of $0.3 from the exercise of stock options by employees. For the three months ended March 31, 2023, we received proceeds of $50.0 million from the Convertible Promissory Note, which was partially offset by the $20.8 million repayment of the Series 2022-1 Notes.
Contractual Obligations
Our contractual obligations primarily consist of our Convertible Promissory Note, obligations under operating leases and inventory component purchases. As of March 31, 2024, there have been no material changes from our disclosure in our 2023 Annual Report. For more information on our future minimum operating leases, see Note 13, “Leases” and for more information on our Convertible Promissory Notes and other related debt, see Note 9, “Long-Term Debt,” of the notes to condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Off-Balance Sheet Arrangements
During the periods presented, the Company did not have any off-balance sheet arrangements.
Critical Accounting Estimates
For the period ended March 31, 2024, there have been no material changes to our critical accounting estimates from the information reported in our 2023 Annual Report.
Recent Accounting Pronouncements
For a description of recent accounting pronouncements, including the expected dates of adoption and estimated effects, if any, on the Company’s condensed consolidated financial statements, see Part I, Note 2, “Summary of Significant Accounting Policies”, in the notes to condensed consolidated financial statements in this Quarterly Report on Form 10-Q.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As a “smaller reporting company” as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company is not required to provide the information required under this item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2024, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. Based upon the evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls were effective as of March 31, 2024.
28
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the three months ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Disclosure Controls and Procedures
Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and implemented, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues within a company are detected. The inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
PART II—OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, the Company may be subject to various claims, lawsuits, and other legal and administrative proceedings that may arise in the ordinary course of business. Some of these claims, lawsuits, and other proceedings may range in complexity and result in substantial uncertainty; it is possible that they may result in damages, fines, penalties, non-monetary sanctions, or relief. While the Company intends to vigorously defend itself with respect to such disputes, any potential outcomes resulting from such claims would be inherently difficult to quantify.
Item 1A. Risk Factors
In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors disclosed in the section entitled “Risk Factors” in Part I, Item 1A, of the Company’s 2023 Annual Report, and the other reports that we have filed with the SEC. Any of the risks discussed in such reports, as well as additional risks and uncertainties not currently known to us or that we currently deem immaterial, could materially and adversely affect our results of operations, financial condition or prospects. During the period covered by this Quarterly Report on Form 10-Q, there have been no material changes in our risk factors as previously disclosed.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.
29
Item 6. Exhibits
Exhibit No. |
|
Description |
3.1 |
|
|
3.2 |
|
Amended and Restated Bylaws of Tigo Energy, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K, filed with the SEC on May 30, 2023). |
10.1† |
|
|
31.1† |
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) |
31.2† |
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) |
32.1* |
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(b)/15d-14(b) |
32.2* |
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(b)/15d-14(b) |
101.INS† |
|
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
101.SCH† |
|
Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents |
104† |
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
|
|
|
† Filed herewith. |
|
|
* Furnished herewith. |
|
|
30
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
Tigo Energy, Inc. |
|
|
|
|
|
|
|
By: |
/s/ Bill Roeschlein |
|
|
|
Bill Roeschlein |
|
|
|
Chief Financial Officer |
Date: May 14, 2024 |
|
|
|
31
Exhibit 10.1
TIGO ENERGY, INC.
INDEPENDENT DIRECTOR COMPENSATION POLICY
AND STOCK OWNERSHIP GUIDELINES
APPROVED JUNE 10, 2023; AMENDED APril 4, 2024
Tigo Energy, Inc. (the “Company”) believes that the granting of cash and equity compensation to members of the Company’s Board of Directors (the “Board,” and members of the Board, “Directors”) represents an effective tool to attract, retain and reward Directors who are not employees of the Company (“Independent Directors”). This Independent Director Compensation Policy (the “Policy”) is intended to formalize the Company’s policy regarding cash compensation and grants of equity awards to its Independent Directors. Unless otherwise defined herein, capitalized terms used in this Policy will have the meaning given such term in the Tigo Energy, Inc. 2023 Equity Incentive Plan, as amended from time to time, or if such plan no longer is in use at the time of the grant of an equity award, the meaning given such term or similar term in the equity plan then in place under which the equity award is granted (the “Plan”). Each Independent Director will be solely responsible for any tax obligations incurred by such Independent Director as a result of the compensation such Independent Director receives under this Policy.
|
|
|
Non-Employee Chair $20,000
Lead Independent Director $20,000
Audit Committee Chair $20,000
Compensation Committee Chair $15,000
Nominating & Governance Chair $10,000
|
2 |
|
|
3 |
|
|
4 |
|
EXHIBIT 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO RULE 13A-14(A) AND 15D-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Zvi Alon, certify that:
Date: May 14, 2024 |
|
|
|
|
/s/ Zvi Alon |
|
Zvi Alon |
|
Chief Executive Officer and Chairman of the Board |
|
(Principal Executive Officer) |
EXHIBIT 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO RULE 13A-14(A) AND 15D-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Bill Roeschlein, certify that:
Date: May 14, 2024 |
|
|
|
|
/s/ Bill Roeschlein |
|
Bill Roeschlein |
|
Chief Financial Officer |
|
(Principal Financial and Accounting Officer) |
EXHIBIT 32.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO
18 U.S.C. 1350
(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)
In connection with the Quarterly Report on Form 10-Q of Tigo Energy, Inc. (the “Company”) for the quarter ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Zvi Alon, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
Dated: May 14, 2024
|
/s/ Zvi Alon |
|
Zvi Alon |
|
Chief Executive Officer and Chairman of the Board |
|
(Principal Executive Officer) |
EXHIBIT 32.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO
18 U.S.C. 1350
(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)
In connection with the Quarterly Report on Form 10-Q of Tigo Energy, Inc. (the “Company”) for the quarter ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Bill Roeschlein, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
Dated: May 14, 2024
|
/s/ Bill Roeschlein |
|
Bill Roeschlein |
|
Chief Financial Officer |
|
(Principal Financial and Accounting Officer) |