This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995, which are subject to known and unknown risks, uncertainties and other important factors that may cause actual results to be materially different from the statements made herein. All statements other than statements of historical facts contained in this Quarterly Report are forward-looking statements. Forward-looking statements discuss our current expectations and projections relating to our financial position, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to any historical or current facts. These statements may include words such as “aim,” “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “future,” “intend,” “outlook,” “potential,” “project,” “projection,” “plan,” “seek,” “may,” “could,” “would,” “will,” “should,” “can,” “can have,” “likely,” the negatives thereof and other similar expressions. You should evaluate all forward-looking statements made in this Quarterly Report in the context of the risks and uncertainties disclosed herein, in our Annual Report on Form 10-K, including “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our other filings with the Securities and Exchange Commission (the “SEC”), accessible on the SEC’s website at www.sec.gov and the Investors Relations section of the Company’s website athttps://investors.solvenergy.com/financial-information/sec-filings. Important factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions and the following, each of which could have a material adverse effect on our business, financial condition and results of operations:
| • | A wide range of factors, many that are beyond our control, can impact the timing, performance or profitability of our projects, any of which can result in additional costs to us, reductions or delays in revenues, the payment of liquidated damages by us or project termination; |
| • | Our results of operations, financial condition and other financial and operational disclosures are based upon estimates and assumptions that may differ from actual results or future outcomes; |
| • | Changes in estimates related to revenues and costs associated with our contracts with customers could result in a reduction or elimination of revenues, a reduction of profits or the recognition of losses; |
| • | Backlog may not be realized or may not result in profits and may not accurately represent future revenue; |
| • | The imposition of additional duties and tariffs and other trade barriers and retaliatory countermeasures implemented by the U.S. and other governments; |
| • | Our results of operations may vary significantly from quarter to quarter; |
| • | The reduction, elimination or expiration of government incentives for, or regulations mandating the use of, renewable energy and battery storage specifically; |
| • | Limitations on the availability or an increase in the price of materials, equipment and subcontractors that we and our customers depend on to complete and maintain projects; |
| • | Our business is labor-intensive, and we may be unable to attract and retain qualified employees or we may incur significant costs in the event we are unable to efficiently manage our workforce or the cost of labor increases; |
| • | The loss, or reduction in business from, certain significant customers; |
| • | Many of our contracts may be canceled or suspended on short notice or may not be renewed upon completion or expiration, and we may be unsuccessful in replacing our contracts; |
| • | We may fail to adequately recover on contract modifications against project owners for payment or performance; |
| • | The nature of our business exposes us to potential liability for warranty, engineering and other related claims; |
| • | During the ordinary course of our business, we are subject to lawsuits, claims and other legal proceedings, as well as bonding claims and related reimbursement requirements; |
| • | We can incur liabilities or suffer negative financial or reputational impacts relating to health and safety matters; |
| • | Disruptions to our information technology systems or our failure to adequately protect critical data, sensitive information and technology systems; |
| • | We have identified material weaknesses in our internal control over financial reporting and if our remediation of the material weaknesses is not effective, or if we otherwise fail to maintain effective internal control over financial reporting in the future, we may not be able to accurately or timely report our financial condition or results of operations; |
| • | Any deterioration in the quality or reputation of our brands, which can be exacerbated by the effect of social media or significant media coverage; |
| • | The loss of, or our inability to attract or keep, key personnel could disrupt our business; |
| • | Our inability to successfully execute our acquisition strategy; |
| • | We may be unable to compete for projects if we are not able to obtain surety bonds, letters of credit or bank guarantees; |
| • | We are generally paid in arrears for our services and may enter into other arrangements with certain of our customers, which could subject us to potential credit or investment risk and the risk of client defaults; |
| • | Insurance and claims expenses, as well as the unavailability or cancellation of third-party insurance coverage; |
| • | Our business and results of operations are subject to physical risks including those associated with climate change; |
| • | Our business is subject to operational hazards, including, among others, damage from severe weather conditions and electrical hazards, that can result in significant liabilities, and we may not be insured against all potential liabilities; |
| • | Increasing scrutiny and changing expectations from various stakeholders with respect to corporate sustainability practices may impose additional costs on us or expose us to reputational or other risks; |
| • | Our unionized workforce and related obligations; |
| • | Our inability to maintain, protect or enforce our rights in intellectual property; |
| • | We may be subject to intellectual property rights claims by third parties, which are extremely costly to defend, could require us to pay significant damages and could limit our ability to use certain technologies; |
| • | We use artificial intelligence technologies in our business, and the deployment, use, and maintenance of these technologies involve significant technological and legal risks; |
| • | Negative macroeconomic conditions and industry-specific market conditions; |
| • | Fluctuations in economic, political, financial, industry and market conditions on a regional, national or global basis, including as a result of, among other things, inflationary pressure that impacts our costs associated with labor, equipment and materials, increased interest rates, default or threat of default by the U.S. federal government with respect to its debt obligations, U.S. government shutdowns, natural disasters and other emergencies (e.g., wildfires, weather-related events or pandemics), deterioration of global or specific trade relationships, or acts of war, including but not limited to conflicts in the Middle East, geopolitical conflicts and political unrest; |
| • | Projects in our industry can have long sales cycles requiring significant upfront investment of resources; |
| • | Our revenues and profitability can be negatively impacted if our customers encounter financial difficulties or file for bankruptcy or disputes arise with our customers; |
| • | The highly competitive nature of our business; |
| • | Technological advancements in other forms of power generation could negatively affect our business; |
| • | Regulatory requirements applicable to our industry and changes in current and potential legislative and regulatory initiatives may adversely affect demand for our services; |
| • | We are subject to complex federal, state and other environmental, health and safety laws and regulations that could adversely affect the cost, manner or feasibility of conducting our operations or expose us to significant liabilities; |
| • | We are subject to various specific regulatory regimes and requirements that could result in significant compliance costs and liabilities; |
| • | Any actual or perceived failure to comply with new or existing laws, regulations or other requirements relating to the privacy, security and processing of personal information; |
| • | Changes in tax laws or our tax estimates or positions; |
| • | Failure to comply with anti-corruption, anti-bribery and/or international trade laws; |
| • | Violations of export control and/or economic sanctions laws and regulations to which we are subject and changes to U.S. foreign trade and tariff policies; |
| • | Immigration laws, including our inability to verify employment eligibility; |
| • | Our variable rate indebtedness may subject us to interest rate risk, which, subject to borrowings, could cause our debt service obligations to increase significantly; |
| • | Our failure to comply with the covenants contained in our credit agreements could result in an event of default that could cause repayment of our debt to be accelerated; |
| • | We may incur substantial additional indebtedness in the future and may not be able to generate sufficient cash to service such indebtedness, and may be forced to take other actions to satisfy our obligations under such indebtedness, which may not be successful; and |
| • | The expenses that are required in order to operate as a public company |
Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. For the reasons described above, we caution you against relying on any forward-looking statements, which should also be read in conjunction with the other cautionary statements that are included elsewhere in this Quarterly Report, our most recent Annual Report on Form 10-K and our other filings with the SEC. Any forward-looking statement made by us in this Quarterly Report speaks only as of the date on which we make it.
Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
