Energy Vault Holdings (NRGV) risk factors, FY2025 10-K

Risks Related to Our Business and Our Industry

1. 01Our limited operating history and our rapidly evolving industry make it difficult to evaluate our business, the risks and challenges we may face and future prospects28% rewritten
2. 02Our projections are subject to significant risks, assumptions, estimates and uncertainties. As a result, our projected revenues, market share, expenses and profitability may differ materially from our expectations
3. 03Our business model depends on acceptance of our technology by our customers, retaining existing customers, obtaining new customers, and the success of our business model
4. 04Our energy storage systems involve a lengthy sales and installation cycle, and if we fail to close sales on a regular and timely basis it could harm our business. Moreover, the long sales cycles for our energy storage systems and other factors may result in significant fluctuations in our results from period to period
5. 05These lengthy sales and installation cycles increase the risk that our customers fail to satisfy their payment obligations or cancel orders before the completion of the transaction or delay the planned date for installation
6. 06We depend on a limited number of customers for the majority of our revenue, and the loss of any one of these customers could substantially reduce our revenue and impact our liquidity
7. 07Our business depends on our ability to succeed in implementing our energy storage systems and introduce innovative and competitive energy storage technologies. As our energy storage systems are highly complex, this process is costly and time-consuming
8. 08If we are no t able to reduce our cost structure in the future, our ability to become profitable may be impaired
9. 09Operational costs can be difficult to predict and may include costs from requirements related to the decommissioning of our systems
10. 10Our energy storage systems have significant upfront costs, and certain customers may need, or may prefer to acquire, third-party financing to purchase our systems. We will need to obtain third-party financing to continue our transition to owning assets as well as selling energy storage products
11. 11The economic benefit of our energy storage systems to us and to our customers depends on the cost of electricity available from alternative sources, including local electric utility companies, which cost structure is subject to change
12. 12Our energy storage systems’ performance may not meet our customers’ expectations or needs
13. 13If our estimates of the useful life for our energy storage systems are inaccurate or we do not meet service and warranties and performance guarantees, our business and financial results could be adversely affected
14. 14We intend to explore alternative, co-active use case opportunities for our systems, but there is no assurance that such opportunities exist or that they would be as beneficial to us as we expect
15. 15Our future growth depends upon our ability to maintain relationships with third parties, and the terms and enforceability of many of these relationships are not certain
16. 16We depend upon component and product manufacturing and logistical services provided by third parties, many of whom are located outside of the U.S
17. 17We may be unable to achieve our strategic priorities in emerging marketsNew
18. 18The failure or i nability of our suppliers to deliver necessary components or raw materials for construction of our energy storage systems and their failure or inability to deliver them in a timely manner could cause installation delays, cancellations, penalty payments and damage to our reputation
19. 19Our systems often rely on interconnections to distribution and transmission facilities that are owned and operated by third parties, and as a result, are exposed to interconnection and transmission facility development and curtailment risks
20. 20Our business is subject to risks associated with construction, cost overruns and delays, including those related to obtaining government permits and approvals, electrical interconnection, and other contingencies that may arise in the course of completing installations
21. 21The size of our G-VAULT products may negatively impact our ability to enter into contracts with customers or obtain government permits and approvals
22. 22The design of our G-VAULT and H-VAULT products are based on established principles that are deployed in a novel way; the products are intended to provide longer energy storage durations than are provided by other types of energy storage systems
23. 23In certain circumstances we enter into tolling arrangements in which customers purchase the energy storage and dispatch of electricity from us while we retain an ownership interest in the system. To date, we have entered into two such tolling arrangements, but we are actively looking at additional opportunities
24. 24Increased attention to, and scrutiny of, ESG matters could increase our costs, harm our reputation, impact our share price or access to or cost of capital, or otherwise adversely impact our business51% rewritten
25. 25Should we pursue acquisitions in the future, it would be subject to risks associated with acquisitions
26. 26Our operations are international, and expanding operations in some international markets could expose us to additional risks
27. 27As a result of these risks, any potential future international expansion efforts that we may undertake may not be successful
28. 28Even if renewable energy and energy storage become more widely adopted, our energy storage technology may not achieve widespread market acceptance or may be less cost-effective as compared to competing technologies
29. 29We operate in highly competitive energy industries and there is increasing competition. Many of our competitors and future competitors may have significantly more financial and other resources than we do and if we do not compete effectively, our competitive positioning and our operating results will be harmed
30. 30If we are unable to attract and retain key employees and hire qualified management, technical, engineering, and sales personnel, including a highly skilled management team with diverse experience in the energy storage sectors, our ability to compete and successfully grow our business could be harmed
31. 31Labor disputes could disrupt our ability to serve our customers and/or lead to higher labor costs
32. 32Changes in business, economic, or political conditions, including overall changes in demand, are beyond our control and could impact our business, resulting in lower revenues and other adverse effects to our results of operations
33. 33Similarly, our business depends on the overall business and global or regional political conditions, which are beyond our control
34. 34We are subject to a series of risks related to climate change
35. 35Fuel prices, including volatility in the cost of diesel or natural gas or a prolonged period of low gasoline and natural gas costs, could decrease incentives to transition to renewable energy
36. 36Our insurance coverage, customer indemnifications or other liability protections may be unavailable or inadequate to cover all of our significant risks, which could adversely affect our profitability and overall financial position

Risks Related to Our Financial Condition and Liquidity

1. 37Material weaknesses in our internal control over financial reporting could have a significant adverse effect on our business and the price of our common stock
2. 38In addition, as a public company we are required to document and test our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act so that our management can certify as to the effectiveness of our internal control over financial reporting
3. 39We are an early stage company with a history of losses, and expect to incur significant expenses and continuing losses for the foreseeable future, and we may not be able to achieve profitability in the future
4. 40Our total backlog, bookings and developed pipeline may not be indicative of our future revenue, which could have a material adverse impact on our business, financial condition, and results of operations83% rewritten
5. 41(“GAAP”). We believe our new methodology for computing backlog allows us to better evaluate the growth of our Company and estimate future revenueNew
6. 42Our ability to use certain of our current and future net operating loss and tax credit carryforwards may be limited and could adversely affect our operating results and cash flowsNew
7. 43Changes to applicable tax laws or regulations or the interpretation thereof or the imposition of new or increased taxes or fees could increase our future tax liabilities and adversely affect our business, financial condition, and cash flowsNew
8. 44We may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and stock price, which could cause you to lose some or all of your investment24% rewritten
9. 45Incorrect estimates or assumptions by management in connection with the preparation of our consolidated financial statements could adversely affect our reported assets, liabilities, income, revenue or expenses
10. 46Government control of currency conversion and expatriation of funds may affect our liquidity

Risks Related to Our IP and Technology

1. 47We may be unable to protect, defend, maintain or enforce IP rights on which our business depends, including as against existing or future competitors, which may adversely affect our growth and success62% rewritten
2. 48enable competitors to offer similar or better energy storage products, in each case potentially resulting in the loss of some of our competitive advantage and a decrease in our revenue, which would adversely affect our business, prospects, financial condition and operating resultsNew
3. 49We may be subject to third-party claims of infringement, misappropriation or other violation of IP rights, or other claims challenging our agreements related to IP, which may be time-consuming and costly to defend, and could result in substantial liability
4. 50Any of the foregoing could adversely affect our business, prospects, operating results, and financial condition. In addition, any litigation or claims, even if lacking merit, could harm our reputation, result in substantial costs and divert resources and management attention
5. 51We may be subject to claims that our employees, consultants, or advisors have wrongfully used or disclosed proprietary information or know-how of their current or former employers or claims asserting ownership of what we regard as our own IP rights
6. 52We utilize open-source software, which may pose particular risks to our proprietary software and solutions30% rewritten
7. 53Cyberattacks and other security breaches affecting, or significant interruptions to, information technology systems on which we rely could have an adverse effect on our business, operations and financial condition, including through harm to our reputation and exposure to liability
8. 54Any failure to offer high-quality technical support services may adversely affect our relationships with our customers and adversely affect our financial results
9. 55If any of our products are or are alleged to be defective in design or manufacturing or experience other failures, we may be compelled to undertake corrective actions, which could adversely affect our business, prospects, operating results, reputation and financial condition

Risks Related to Government Regulation

1. 56Changes to U.S. tariff and import/export regulations may have a negative effect on our business, financial condition and results of operations100% rewritten
2. 57Further, President Trump has continued to rely on the tariff power to drive trade negotiations globally resulting in fluctuating tariff rates especially with respect to tariff rates on imports from ChinaNew
3. 58We could be liable for environmental, health, and safety (“EHS”) issues resulting from our operations, which could impact our reputation, our business, and our operating results62% rewritten
4. 59however, this insurance may not provide adequate coverage against potential liabilities and not all workers have or may agree to our workers’ compensation policyNew
5. 60Our services depend on the creation of renewable energy by third parties, and changes to regulations and policies affecting renewable energy may adversely impact our businessNew
6. 61Action by governmental authorities and local residents to restrict construction or use of our systems or the projects/facilities that rely on our systems in their localities could substantially harm our business and financial results33% rewritten
7. 62our business, results of operations, and financial condition. In addition, future macroeconomic pressures and public policy concerns could continue to lead to new laws and regulations, or interpretations of existing laws and regulations, that could limit our future customers’ use of our systemsNew
8. 63Litigation, regulatory actions and compliance issues could subject us to significant fines, penalties, judgments, remediation costs, negative publicity and requirements resulting in increased expenses
9. 64Government reviews, inquiries, investigations, and actions could harm our business or reputation

Risks Related to Ownership of Our Securities

1. 65Concentration of ownership among our named executive officers, directors, and their affiliates may prevent new investors from influencing significant corporate decisions
2. 66There can be no assurance that our common stock will be able to continue to comply with the continued listing standards of the NYSE
3. 67If, securities or industry analysts cease publishing research or reports about the Company, its business, or its market, or if they change their recommendations regarding the Company’s securities adversely, the price and trading volume of the Company’s securities could decline
4. 68Because we have no current plans to pay cash dividends on the Company’s common stock for the foreseeable future, you may not receive any return on investment unless you sell the Company’s common stock for a price greater than that which you paid for it
5. 69The Company may issue additional shares of common stock or other equity securities without your approval, which would dilute your ownership interests and may depress the market price of the Company’s common stock48% rewritten
6. 70Our stock price may be volatile or may decline regardless of our operating performance. You may lose some or all of your investment
7. 71Activist stockholders may attempt to effect changes to our company, which could adversely affect our corporate governance, results of operations, and financial condition
8. 72Anti-takeover provisions in our certificate of incorporation, our bylaws and under Delaware law could make an acquisition of the Company, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove the Company’s current management