Shoals Technologies Group, Inc.

Current report

Risks Related to the ARRAY Merger

Current report

The Company’s shareholders cannot be sure of the value of the consideration they will receive in the ARRAY Merger, if completed, because the exchange ratio is fixed and the market price of ARRAY common stock has fluctuated and will continue to fluctuate.

Current report

If the ARRAY Merger is completed, each share of the Company’s Class A common stock outstanding immediately prior to the ARRAY Merger will automatically be converted into the right to receive 1.6931 shares of ARRAY common stock and, if applicable, cash in lieu of fractional shares (the “ARRAY Merger Consideration”). Because the exchange ratio is fixed, the value of the ARRAY Merger Consideration will depend on the market price of ARRAY common stock at the time the ARRAY Merger is completed. The value of ARRAY common stock has fluctuated since the date of the announcement of the ARRAY Merger Agreement and will continue to fluctuate. Accordingly, the Company’s shareholders will not know or be able to determine the market value of the ARRAY Merger Consideration they would receive upon completion of the ARRAY Merger. Share price changes may result from a variety of factors, including, among others, general market and economic conditions, changes in ARRAY’s and the Company’s respective businesses, operations and prospects, market assessments of the likelihood that the ARRAY Merger will be completed and the timing of the ARRAY Merger and regulatory considerations. Many of these factors are beyond the Company’s control.

Current report

Completion of the ARRAY Merger is subject to certain conditions, including approval of our shareholders, ARRAY stockholders and certain governmental and regulatory approvals, and if these conditions are not satisfied or waived, the ARRAY Merger will not be completed.

Current report

The completion of the ARRAY Merger is subject to satisfaction or waiver of certain customary closing conditions, including (i) the adoption of the ARRAY Merger Agreement by the Company’s shareholders and the approval of the issuance of ARRAY common stock in connection with the ARRAY Merger by ARRAY stockholders, (ii) the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), (iii) the absence of any law or order issued by a governmental entity of competent jurisdiction prohibiting, restraining or making illegal the consummation of the ARRAY Merger, (iv) the effectiveness of the Registration Statement on Form S-4 to be filed by ARRAY pursuant to which the shares of ARRAY common stock to be issued in connection with the ARRAY Merger will be registered with the SEC, and the absence of any stop order suspending such effectiveness or proceeding for the purpose of suspending such effectiveness, and (v) approval for listing on Nasdaq of the shares of ARRAY common stock to be issued in connection with the ARRAY Merger. The obligation of each party to consummate the ARRAY Merger is also conditioned upon (i) the other party having performed in all material respects its obligations under the ARRAY Merger Agreement, (ii) the other party’s representations and warranties in the ARRAY Merger Agreement being true and correct (subject to certain materiality qualifiers) and (iii) the other party having not experienced a material adverse effect. There can be no assurance that the conditions to the closing of the ARRAY Merger will be satisfied or waived or that the ARRAY Merger will be completed.

Current report

Failure to complete the ARRAY Merger could negatively impact the share price and the future business and financial results of the Company.

Current report

The ARRAY Merger may not be completed within the expected timeframe, or at all, as a result of various factors and conditions, some of which may be beyond our control. If the ARRAY Merger is not completed for any reason, including as a result of any condition not being satisfied or waived prior to the outside date specified in the ARRAY Merger Agreement, the ongoing business of the Company may be adversely affected, and without realizing any of the benefits of having completed the ARRAY Merger, the Company would be subject to a number of risks, including the following:

Current report

•the Company may experience negative reactions from its customers, regulators and employees;

Current report

•the Company will be required to pay certain costs relating to the ARRAY Merger, whether or not the ARRAY Merger is completed;

Current report

•the ARRAY Merger Agreement places certain restrictions on the conduct of the Company’s business prior to completion of the ARRAY Merger, and such restrictions, the waiver of which are subject to the written consent of ARRAY, and subject to certain exceptions and qualifications, may prevent the Company from taking certain other specified actions or otherwise pursuing business opportunities during the pendency of the ARRAY Merger that the Company would have made, taken or pursued if these restrictions were not in place; and

Current report

•matters relating to the ARRAY Merger (including integration planning) will require substantial commitments of time and resources by the Company’s management, which would otherwise have been devoted to day-to-day operations and other opportunities that may have been beneficial to the Company as an independent company.

Current report

The ARRAY Merger Agreement does not allow the Company to solicit competing acquisition proposals and restricts the Company’s ability to engage in discussions regarding such proposals, subject to certain exceptions. In the event of a termination of the ARRAY Merger Agreement under certain circumstances specified in such agreement, including a change in the recommendation of the Company’s Board of Directors or the Company entering into an agreement with respect to a competing acquisition proposal within twelve months following certain terminations, the Company may be required to pay a termination fee of $40.3 million to ARRAY. This payment could affect the structure, pricing and terms proposed by a third party seeking to acquire or merge with the Company and could discourage a third party from making a competing acquisition proposal, including a proposal that would be more favorable to the Company’s shareholders than the ARRAY Merger. ARRAY may be required to pay the Company a termination fee of $22.2 million under certain specified circumstances; however, if the ARRAY Merger Agreement is terminated under circumstances in which no termination fee is payable to the Company, the Company may not receive any compensation for the costs it has incurred or the opportunities it has forgone.

Current report

There can be no assurance that the risks described above will not materialize. If any of those risks materialize, they may materially and adversely affect the Company’s business, financial condition, financial results and/or share price.

Current report

The Company will be subject to various uncertainties while the ARRAY Merger is pending that may cause disruption and may make it more difficult to maintain relationships with customers and other third-party business partners.

Current report

The Company’s efforts to complete the ARRAY Merger could cause substantial disruptions in, and create uncertainty surrounding, its business, which may materially adversely affect its results of operations and its business. Uncertainty as to whether the ARRAY Merger will be completed may affect the Company’s ability to recruit prospective employees or to retain and motivate existing employees. Employee retention may be particularly challenging while the ARRAY Merger is pending because employees may experience uncertainty about their roles following the ARRAY Merger. As mentioned above, a substantial amount of our management’s and employees’ attention is being directed toward the completion of the ARRAY Merger and thus is being diverted from our day-to-day operations. Uncertainty as to the Company’s future could materially adversely affect its business and its relationship with customers and potential customers. For example, customers, suppliers and other third parties may defer decisions concerning working with the Company, or seek to change existing business relationships with the Company. Changes to or termination of existing business relationships could adversely affect the Company’s revenue, earnings and financial condition, as well as the market price of the Company’s Class A common stock. The adverse effects of the pendency of the ARRAY Merger could be exacerbated by any delays in completion of the ARRAY Merger or termination of the ARRAY Merger Agreement.

Current report

Potential litigation against the Company could result in substantial costs, prevention or delay of the completion of the ARRAY Merger, and/or a judgment resulting in the payment of damages.

Current report

The Company could be subject to litigation related to any failure to complete the ARRAY Merger or related to any enforcement proceeding commenced against the Company to perform its obligations under the ARRAY Merger Agreement. If the ARRAY Merger is not completed, these risks may materialize and may adversely affect the Company’s business, financial condition, financial results and/or share price.

Current report

Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into merger agreements. Shareholders of the Company may file lawsuits against ARRAY, the Company and/or the directors and officers of either company in connection with the ARRAY Merger, which may result in payment of damages. These lawsuits could prevent or delay the completion of the ARRAY Merger and result in substantial costs to the Company, including any costs associated with the indemnification of directors and officers. There can be no assurance that any of the defendants will be successful in the outcome of any potential lawsuits.

Current report

The Company has incurred and will continue to incur significant transaction and merger-related costs in connection with the ARRAY Merger.

Current report

The Company has incurred and expects to continue to incur a number of non-recurring costs associated with the ARRAY Merger. The significant non-recurring costs associated with the ARRAY Merger include, among others, fees and expenses of financial advisors and other advisors and representatives, certain employment-related costs relating to employees of the Company and filing fees due in connection with filings required under the HSR Act. Some of these costs have already been incurred or may be incurred regardless of whether the ARRAY Merger is completed, including a portion of the fees and expenses of financial advisors and other advisors and representatives.