TIGO ENERGY, INC. Income Taxes Disclosure

During the years ended December 31, 2024, and 2023, the Company recorded total income tax expense of $0.1 million and $0.1 million, respectively, primarily related to foreign earnings.

The Company assesses the realizability of deferred tax assets based on the available evidence, including a history of taxable income and estimates of future taxable income. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that all or some portion of deferred tax assets will not be realized. Due to the history of losses incurred by the Company, management believes it is not more likely than not that substantially all of the U.S. federal, state and certain foreign deferred tax assets can be realized. Accordingly, the Company established and recorded a full valuation allowance on its U.S. domestic and certain foreign net deferred tax assets of $36.9 million and $24.3 million as of December 31, 2024, and 2023, respectively. The valuation allowance increased by $12.6 million during the year ended December 31, 2024, and increased by $1.7 million during the year ended December 31, 2023.

No deferred tax liabilities have been recorded relating to the earnings of the Company’s foreign subsidiaries since all such earnings are intended to be indefinitely reinvested. The amount of the unrecognized deferred tax liability associated with these earnings is immaterial.

Utilization of the net operating loss and tax credit carryforwards is subject to a substantial annual limitation due to the “ownership change” limitations provided by Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (“IRC”) and other similar state provisions. Any annual limitation may result in the expiration of net operating loss and tax credit carryforwards before utilization. As of December 31, 2024, the Company had $73.6 million of U.S. federal net operating loss carryforwards available to reduce future taxable income, of which $38.8 million will be carried forward indefinitely for U.S. federal tax purposes and $34.8 million will expire beginning in 2028. The Company also has $56.8 million of U.S. state net operating loss carryforwards that will expire beginning in 2028. The Company also has $15.4 million of foreign net operating loss carryforwards that do not expire.

The Company also has federal and state research and development (“R&D”) and other tax credit carryforwards of $2.5 million and $2.5 million, respectively, as of December 31, 2024. The federal credit carryforwards will begin expiring in 2033 and state research credit carryforwards do not expire.

At December 31, 2024, and 2023, the balance of gross unrecognized tax benefits was $1.5 million and $1.4 million, respectively. For each of the years ended December 31, 2024, and 2023, the balance of gross unrecognized tax benefits increased $0.1 million and $0.4 million, respectively, related to research and development income tax credits claimed. None of the Company’s unrecognized tax benefits would, if recognized, reduce the Company’s effective tax rate since the tax benefits would increase a deferred tax asset that is currently offset by a full valuation allowance. The Company does not anticipate a significant change to the total amount of unrecognized tax benefits within the next twelve months.

The Company files income tax returns in the U.S. federal, California and other various state and international jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. Carryover attributes beginning in 2008 remain open to adjustment by the U.S. and state authorities. There are no tax examinations in any material tax jurisdictions.

The Company recognizes any interest and/or penalties related to income tax matters as a component of income tax expense. As of December 31, 2024, there were no accrued interest and penalties related to uncertain tax positions.