Enphase Energy Inc

From time to time, we might be subject to various legal proceedings relating to claims arising out of our operations. The outcome of litigation is inherently uncertain. If one or more legal matters were resolved against us in a reporting period for amounts above management’s expectations, our business, results of operations, financial position and cash flows for that reporting period could be materially adversely affected. Except as described in this Item 1, we are not currently involved in any material legal proceedings, the ultimate disposition of which could have a material adverse effect on our operations, financial condition or cash flows.

Class Action Suit and Derivative Lawsuits

On May 29, 2024, a putative securities class action complaint was filed against us, our chief executive officer and our chief financial officer (collectively, the "Defendants") in the United States District Court for the Northern District of California, captioned Bialic v. Enphase Energy, Inc., Case No. 3:24-cv-03216-BLF (the “Bialic Action”), purportedly on behalf of a class of individuals who purchased or otherwise acquired our common stock between February 7, 2023 and April 25, 2023. On July 15, 2024 a second putative class action complaint was filed naming the same Defendants in the United States District Court for the Northern District of California, captioned Hayes v. Enphase Energy, Inc., Case No. 3:24-cv-04249 (together with the Bialic Action, the “Securities Class Action”), purportedly on behalf of a class of individuals who purchased or otherwise acquired our common stock between December 12, 2022 and April 25, 2023. Both complaints allege that Defendants made false and/or misleading statements in violation of Sections 10(b) and 20(a) of the Exchange Act. Both plaintiffs seek unspecified monetary damages and other relief. We expect the cases to be consolidated and a lead plaintiff to be appointed by the Court. We intend to defend the case vigorously.

On July 16, 2024, a shareholder derivative lawsuit was filed purportedly on our behalf against the Defendants and our non-employee directors in the United States District Court for the Northern District of California, captioned Ibarra v. Kothandaraman, Case No. 3:24-cv-04278. The lawsuit asserts claims for breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, waste of corporate assets, and violations of Sections 14(a), 10(b) and 20(a) of the Exchange Act, and contribution under Sections 10(b) and 21D of the Exchange Act based on the purported dissemination of same allegedly false and misleading statements as in the Securities Class Action. The plaintiffs are seeking unspecified damages and other relief, including reforms and improvements to our corporate governance and internal procedures. We also intend to defend this case vigorously.

Zola Electric International, Ltd. v. Enphase Energy, Inc.

On July 17, 2024, Zola Electric International, Ltd. (“Zola”) filed a complaint with the United States District Court for the Northern District of California against us, alleging breach of contract and breach of the covenant of good faith and fair dealing related to a joint development agreement and master supply agreement between Zola and us. Zola does not quantify any alleged damages in the complaint, but in addition to attorneys' fees and costs, seeks an order compelling specific performance of our contractual obligations, as well as damages in an amount to be proven at trial. We also intend to defend this case vigorously.

The pending lawsuits and any other related lawsuits are subject to inherent uncertainties, and the actual defense and disposition costs will depend upon many unknown factors. The outcome of the pending lawsuits and any other related lawsuits are necessarily uncertain. We could be forced to expend significant resources in the defense of the pending lawsuits and any additional lawsuits, and we may not prevail. In addition, we may incur substantial legal fees and costs in connection with such lawsuits.