On Aug. 4, Petaluma-based Enphase Energy, Inc. (NASDAQ:ENPH), a maker of solar micro-inverters, reported that CEO and president Paul Nahi resigned effective Aug. 8. The resignation came just before the company reported on Aug. 9 that it lost $35.4 million in the first six months of 2017, and on June 30 had accumulated deficit of nearly $286 million.
“We have a history of losses which may continue,” the company reported, “and we cannot be certain that we will achieve or sustain profitability.” In the past year the company made numerous efforts to raise money and cut expenses.
Enphase Energy, founded in 2006, makes micro-inverters that attach to individual solar panels to change direct current into alternating current — the kind used in households and businesses for lighting, computing and manufacturing.
“If demand for solar energy solutions does not grow or grows at a slower rate than we anticipate, our business will suffer,” Enphase said. “Our micro-inverter and AC battery storage systems are utilized in solar photovoltaic, or PV, installations,” the company said. “Our future success depends on continued demand for solar energy solutions and the ability of solar-equipment vendors to meet this demand. The solar industry is an evolving industry that has experienced substantial changes in recent years, and we cannot be certain that consumers and businesses will adopt solar PV systems as an alternative energy source at levels sufficient to continue to grow our business.”
Management of Enphase shifted to Humberto Garcia, CFO, and Badrinarayanan Kothandaraman, COO. Garcia, 52, acquired 300,000 shares in May, bringing his stock holdings to nearly 377,000 shares. Garcia served as CFO since August 2016, and has worked for Enphase since 2010. Kothandaraman, 45, has been COO since April.
The two executives inherited a challenged company that acknowledged in its Aug. 9 quarterly report that it might not survive, citing “substantial doubt as to its ability to continue as a going concern within one year from the date of this filing.”
Enphase Energy’s stock price has fallen precipitously since September 2014, when it sparkled at $16.85 a share. On Aug. 17 the stock traded at 82 cents. For the six months ended June 30, 2017, the company’s net loss per share was 44 cents.
The North Bay Business Journal published an in-depth story about Enphase Energy in Feb. 2017. At that time the stock traded near $1.85. In six months since then the stock price has dropped more than half.
In January 2017, Enphase cut its workforce by 18 percent, roughly 75 jobs. “These actions are necessary to create a near-term path to sustained profitability,” Nahi said then. A previous layoff occurred a few months earlier in the third quarter of 2016.
In 2016 the company raised $16.2 million in a public offering of about 15 million shares. In January 2017, Enphase Energy received an investment totaling $10 million from John Doerr, chairman of Kleiner Perkins Caulfield & Byers, and Thurman J. Rodgers, founder and former CEO of Cypress Semiconductor. The shares were purchased for about $1 a share.
Rodgers, based in Woodside, joined Enphase’s board of directors. In May, he acquired options giving him the right to buy, expiring May 2024, 111,052 shares of common stock at a price of 70 cents a share.
During the first three months of 2017, Enphase sold $16.6 million worth of common stock under an At The Market Issuance Sales Agreement formed in Dec. 2016.