Array Technologies (ARRY) risk factors, FY2024 10-K

Risks Related to Demand for our Products

1. 01If demand for solar energy projects does not continue to grow or grows at a slower rate than we anticipate, our business will suffer
2. 02The solar tracker industry is globally fragmented and we face intense competition in nearly all of the markets in which we compete. This may result in price competition being greater than expected, which could adversely affect our revenue and margins
3. 03We face competition from conventional and renewable energy sources
4. 04A loss of one or more of our significant customers, their inability to perform under their contracts, or their default in payment, could harm our business and negatively impact revenue, results of operations, and cash flow
5. 05A drop in the price of electricity sold may harm our business, financial condition, results of operations and prospects
6. 06Our results of operations may fluctuate across fiscal periods, which could make our future performance difficult to predict and could cause our results of operations for a particular period to fall below expectations, resulting in a decline in the price of our common stock
7. 07Any increase in interest rates, or a reduction in the availability of tax equity or project debt capital in the global financial markets could make it difficult for end customers to finance the cost of a solar energy system and could reduce the demand for our products

Risk Related to the Regulatory Environment

1. 08The interruption of the flow of components and materials from international vendors could disrupt our supply chain, including as a result of the imposition of additional duties, tariffs and other charges on imports and exports
2. 09our and our competitors’ responses to those demands could result in lower sale prices, lower volume, and consequently, negatively affect our profitability
3. 10Changes in the global trade environment, including the imposition of import tariffs, could adversely affect the amount or timing of our revenues, results of operations or cash flows
4. 11deposit rates for CSPV modules covered by the China AD/CVD orders vary significantly depending on the producer and exporter of the modules and may amount to over 250% of the entered value of the imported merchandise
5. 12We may not be able to convert our orders in backlog into revenue
6. 13Actions addressing determinations of forced labor practices in China and legislation and policies adopted to address such practices may disrupt the global supply of solar panels and have an adverse material effect on our business, financial condition and results of operations
7. 14The reduction, elimination, expiration, or our failure to optimize the benefits of government incentives for, or regulations mandating the use of, renewable energy and solar energy, particularly in relation to our competitors, could reduce demand for solar energy systems and harm our business
8. 15We may incur obligations, liabilities or costs under environmental, health and safety laws, which could have an adverse impact on our business, financial condition and results of operations

Risks Related to Intellectual Property

1. 16If we fail to, or incur significant costs in order to, obtain, maintain, protect, defend or enforce, our intellectual property and other proprietary rights, our business and results of operations could be materially harmed
2. 17If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed
3. 18We may be subject to claims that our employees, consultants, or advisors have wrongfully used or disclosed alleged trade secrets of their current or former employers or claims asserting ownership of what we regard as our own intellectual property

Risks Related to Our Operations

1. 19We depend upon a number of outside vendors. Our operations could be disrupted if we encounter problems with these vendors
2. 20We depend upon a number of vendors to manufacture certain components used in our products. Our reliance on these vendors makes us vulnerable to possible capacity constraints and reduced control over component availability, delivery schedules, manufacturing yields and costs
3. 21Delays in construction projects and any failure to manage our inventory could have a material adverse effect on us
4. 22Significant changes in the cost of raw materials could adversely affect our financial performance
5. 23We are dependent on transportation and logistics providers to deliver our products in a cost-efficient manner. Disruptions to transportation and logistics, including increases in shipping costs, could adversely impact our financial condition and results of operations
6. 24Defects or performance problems in our products could result in loss of customers, reputational damage and decreased revenue, and we may experience delays, disruptions or quality control problems in our manufacturing operations
7. 25Failure by our vendors or our component or raw material suppliers to use ethical business practices and comply with applicable laws and regulations may adversely affect our business
8. 26Our continued planned expansion into new markets could subject us to additional business, financial, regulatory and competitive risks
9. 27We have been and will in the future continue to be exposed to risks from currency exchange rate fluctuations between the U.S. dollar and foreign currencies that could adversely affect our financial results and comparability of our results between financial periods
10. 28Inadequacy of our insurance coverage could have a material and adverse effect on our business, financial condition and results of operations

Risks Related to Information Technology

1. 29Failure to effectively utilize information technology systems or implement new technologies could disrupt our business or reduce our sales or profitability
2. 30Compromises, interruptions or shutdowns of our systems, including those managed by third parties, whether intentional or inadvertent, could lead to delays in our business operations and, if significant or extreme, affect our results of operations, potentially materially
3. 31Cybersecurity or other data incidents, including unauthorized disclosure of personal or sensitive data or theft of confidential information could harm our business
4. 32Failure to comply with current or future federal, state and foreign laws and regulations and industry standards relating to privacy, data protection, cybersecurity and advertising could adversely affect our business, financial condition, results of operations and prospects

Risks Related to Internal Controls over Financial Reporting

1. 33Internal control deficiencies have been identified that constituted material weaknesses in our internal control over financial reporting
2. 34If our estimates or judgments relating to our critical accounting policies are based on assumptions that change or prove to be incorrect, our operating results could fall below the expectations of securities analysts and investors, resulting in a decline in the market price of our common stock

Risks Related to Indebtedness and Financing

1. 35Our indebtedness could adversely affect our financial flexibility and our competitive position
2. 36Our substantial indebtedness could adversely affect our financial condition
3. 37Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our substantial debt
4. 38We may not be able to raise additional capital to execute our current or future business strategies on favorable terms, if at all, or without dilution to our stockholders
5. 39Despite our current debt levels, we may still incur substantially more debt or take other actions which would intensify the risks discussed above
6. 40The conditional conversion feature of the Convertible Notes, if triggered, may adversely affect our financial condition and operating results
7. 41The fundamental change repurchase feature of the Convertible Notes may delay or prevent an otherwise beneficial attempt to acquire us
8. 42The capped call transactions may affect the market price of our common stock
9. 43We are subject to counterparty risk with respect to the capped call transactions

Risks Related to Ownership of Our Common Stock

1. 44Sales of substantial amounts of our common stock in the public markets, or the perception that such sales could occur, could reduce the market price of our common stock
2. 45Sales of a substantial number of shares of our common stock in the public market, or the perception that such sales could occur, could adversely affect the market price of our common stock. We are unable to predict the effect that such sales may have on the prevailing market price of our common stock
3. 46The market price for our common stock could be volatile, which could result in substantial losses for purchasers of our common stock and subject us to securities class action litigation
4. 47We have issued and may in the future issue preferred stock whose terms could adversely affect the voting power or value of our common stock
5. 48Provisions in our certificate of incorporation and bylaws, may have the effect of delaying or preventing a change of control or changes in our management
6. 49amended, but that the forum selection provision will not apply to claims brought to enforce a duty or liability created by the Exchange Act
7. 50We do not intend to pay any cash distributions or dividends on our common stock in the foreseeable future
8. 51Changes in laws and regulations, including changes to tax laws, or regulations that are applied adversely to us or our customers could materially adversely affect our business, financial condition, results of operations and prospects
9. 52Economic, political and market conditions could adversely effect on our business, results of operations and financial condition, including our revenue growth and profitability, which in turn could adversely affect our stock price
10. 53Our business is subject to the risks of severe weather events, natural disasters and other catastrophic events
11. 54The severity and duration of public health threats could materially impact our business, financial condition, and results of operations