The Company offers an assurance type warranty for its products against manufacturer defects which does not contain a service element. For these assurance type warranties, a provision for estimated future costs related to warranty expense is recorded when they are probable and reasonably estimable. As of September 30, 2024 and December 31, 2023 our estimated general warranty liability was approximately $1.7 million and zero, respectively. The Company recorded total warranty expense related to general warranty matters of $0.5 million and $1.9 million for the three and nine months ended September 30, 2024, respectively, and $0.2 million and $0.6 million for the three and nine months ended September 30, 2023, respectively.

The Company has been notified by certain customers that a subset of wire harnesses used in its EBOS solutions is presenting unacceptable levels of contraction of wire insulation (“wire insulation shrinkback”). Based upon the Company’s ongoing assessment, the Company currently believes the wire insulation shrinkback is related to defective wire manufactured by Prysmian Cables and Systems USA, LLC (“Prysmian”). Based on the Company’s continued analysis of information available as of the date of this Quarterly Report, the Company determined that a potential range of loss was both probable and reasonably estimable. The Company has continued to refine assumptions based on additional information obtained throughout the remediation process, and as of September 30, 2024, determined that it was appropriate to adjust the range from the estimates provided as of June 30, 2024. Based on additional information obtained, the Company has increased the low-end of the estimated range from $59.7 million to $73.0 million, and decreased the high-end of the estimated range from $184.9 million to $160.0 million. As no amount within the current range of loss appears to be a better estimate than any other amount, the Company recorded a warranty liability and related expense representing the low-end of the range of potential loss of $73.0 million, which resulted in an increase in the warranty liability and warranty expense of $13.3 million. The high-end of the range of potential loss is $160.0 million, which is $87.0 million higher than the amount recorded. As of September 30, 2024 and December 31, 2023, the remaining estimated warranty liability related to this matter was $53.0 million and $54.9 million, respectively.

The estimated range, as revised, continues to be based on several assumptions, including the potential magnitude of engineering, procurement and construction firm’s labor cost to identify and perform the repair and replacement of impacted harnesses, estimated failure rates, materials replacement cost, planned remediation method, inspection costs, and other various assumptions. While our wire insulation shrinkback warranty liability represents our best estimate of the range of expected losses at any given time, the Company remains active in the ongoing identification, repair and replacement process and has increased, and may further increase or decrease, its estimated warranty liability from its current estimate based on available information, including with respect to experience relating to weather delays, site access, the scope of replacement, vegetation management or other factors. Such increase or decrease may be material. The Company does not maintain insurance for product warranty issues and has commenced a lawsuit against Prysmian, as discussed in more detail under Wire Insulation Shrinkback Litigation section of Note 13 - Commitments and Contingencies. Because the lawsuit against Prysmian is ongoing, potential recovery from Prysmian is not considered probable as defined in ASC 450, and has not been considered in our estimate of the warranty liability as of September 30, 2024.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Warranty liability, beginning of period	$	47,330	$	9,634	$	54,914	$	560
Warranty expense	13,809		50,421		15,203		59,723
Payments	(6,396)		(3,441)		(15,374)		(3,669)
Warranty liability, end of period	54,743		56,614		54,743		56,614
Less: current portion	34,743		17,254		34,743		17,254
Warranty liability, net of current portion	$	20,000	$	39,360	$	20,000	$	39,360