FTC Solar, Inc. Fair Value Disclosure
Note 21. Fair value measurements
Certain of our cash equivalents include deposits in money market funds that invest primarily in short-term securities issued or guaranteed by the U.S. government or its agencies or instrumentalities and contain no restrictions on immediate redemption. The carrying value for money market fund deposits approximates fair value based on quoted prices in active markets for units held (Level 1 classification), and totaled $0.5 million at December 31, 2025 and $0.5 million at December 31, 2024.
At December 31, 2025 and 2024, we estimated the fair value of our outstanding warrants to be approximately $74.5 million and $9.5 million, respectively, utilizing a Black-Scholes model (Level 2 measurement). The estimated fair value of our warrants is primarily impacted by the closing price of our common stock on Nasdaq at each period end. Other assumptions used, as shown below, have a significantly lesser impact on the fair value of our warrants.
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
Closing stock price on Nasdaq |
|
$ |
10.91 |
|
|
$ |
5.51 |
|
Expected term in years |
|
|
3.5 |
|
|
|
4.9 |
|
Historical volatility of our common stock |
|
|
118.1 |
% |
|
|
108.6 |
% |
Risk free interest rate |
|
|
3.6 |
% |
|
|
4.4 |
% |
Dividend yield |
|
|
0.0 |
% |
|
|
0.0 |
% |
We estimate the carrying value of our Acquisition Notes, as shown in our Consolidated Balance Sheet, approximates fair value at December 31, 2025 due to their recent issuance and short-term nature.
We estimate the fair value of our Term Loans, based primarily on Level 2 inputs involving credit spreads on similar debt and other market participant factors involving observed secured and unsecured recovery rates, to be approximately $16.5 million at December 31, 2025. At December 31, 2024, we estimated the fair value of our long-term debt approximated carrying value due to its then-recent issuance.
We did not hold any other financial instruments measured at fair value on a recurring basis as categorized within the fair value hierarchy at December 31, 2025 and 2024.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 24, 2026 | Showing above |
| 2024 | Mar 31, 2025 | |
| 2023 | Mar 15, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Mar 21, 2022 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.