Ormat Technologies (ORA) risk factors, FY2024 10-K

Risks Related to the Company’s Business and Operation

1. 01Our financial performance depends on the successful operation of our geothermal, REG and solar PV power plants under the Electricity segment, as well as our Energy Storage facilities, which are subject to various operational risks
2. 02Our exploration, development, and operation of geothermal energy resources are subject to geological risks and uncertainties, which may result in insufficient prospects to support our growth, decreased performance or increased costs for our power plants
3. 03Strengthening our core geothermal business to new customers and geographical areas will have many of the same risks and uncertainties as those outlined above
4. 04we incurred $9.1 million in losses associated with our Rabbit Hill facility because ERCOT restricted us from providing battery charging services
5. 05Concentration of customers, specific projects and regions may expose us to heightened financial exposure
6. 06Our global operations expose us to risks related to the application of international laws and regulations, any of which may adversely affect our business, financial condition, future results and cash flows
7. 07Political, economic and other conditions in the emerging economies where we operate, may subject us to greater risk than in the developed U.S. economy, which may have a materially adverse effect on our business
8. 08Conditions in and around Israel, where the majority of our senior management and our main production and manufacturing facilities are located, may adversely affect our operations and may limit our ability to produce and sell our products, and support our Electricity segment
9. 09Responses in various countries where we have business operations to Israel’s ongoing military conflicts on some of its borders or future similar conflicts may adversely affect our operations and may limit our ability to produce and sell our products
10. 10Our business development activities may not be successful and our projects under construction or facilities undergoing enhancement and repowering may encounter delays, which may impact our future growth
11. 11Any one of these could give rise to delays, cost overruns, the termination of the plant expansion, construction or development or the loss (total or partial) of our interest in the project under development, construction, or expansion
12. 12We rely on power transmission facilities that we do not own or control
13. 13Our use of joint ventures may limit our flexibility with jointly owned investments
14. 14Our operations could be adversely impacted by climate change and other extreme weather events
15. 15We could be impacted by regulatory and other responses to climate change and other sustainability-related matters
16. 16We may not be able to successfully conclude the transactions, integrate companies, which we acquired and may acquire in the future, which could materially and adversely affect our business, financial condition, future results and cash flow
17. 17We encounter intense competition in the energy storage market
18. 18Changes in costs and technology may significantly impact our business by making our power plants and products less competitive resulting in the inability to sign new PPAs for our Electricity segment and new supply and EPC contracts for our Products segment
19. 19Our intellectual property rights may not be adequate to protect our business
20. 20A cyber-incident, cyber security breach, severe natural event or physical attack on our operational networks and information technology systems could have a material adverse effect on our financial condition, results of operations, liquidity and cash flows

Risks Related to Governmental Regulations, Laws and Taxation

1. 21Our financial performance could be adversely affected by changes in the legal and regulatory environment affecting our operations
2. 22Pursuant to the terms of some of our PPAs with investor-owned electric utilities and publicly-owned electric utilities in states that have renewable portfolio standards, the failure to supply the contracted capacity and energy thereunder may result in the imposition of penalties
3. 23Most of our domestic power plants are Qualifying Facilities pursuant to PURPA, which largely exempts the power plants from the FPA, and certain state and local laws and regulations regarding rates and financial and organizational requirements for electric utilities
4. 24The reduction, elimination or inability to monetize government incentives could adversely affect our business, financial condition, future results and cash flows
5. 25We are a holding company whose primary assets are our ownership of the equity interests in our subsidiaries. We conduct no other business and, as a result, we depend entirely upon our subsidiaries’ earnings and cash flow
6. 26We could be exposed to significant liability for violations of hazardous substances laws because of the use or presence of such substances at our power plants
7. 27U.S. federal, state and international income tax law changes could adversely affect us
8. 28Litigation, legal proceedings, regulatory investigations or other administrative proceedings could expose us to significant liabilities and reputational damage that could have a material adverse effect on us

Risks Related to Economic and Financial Conditions

1. 29We may be unable to obtain the additional financing we need to pursue our growth strategy and any future financing we receive may be less favorable to us than our current financing arrangements, either of which may adversely affect our ability to expand our operations
2. 30capital on acceptable or favorable terms to us is necessary for the success of our growth strategy, particularly in enhancing our portfolio through M&A activities. Our attempts to obtain future financings may not be successful or on favorable terms
3. 31Also, in the absence of favorable financing options, we may decide not to build new plants or acquire facilities from third parties. Any of these alternatives could have a material adverse effect on our growth prospects
4. 32Our debt obligations may adversely affect our ability to raise additional capital and will be a burden on our future cash resources, particularly if we elect to settle these obligations in cash upon conversion or upon maturity or required repurchase
5. 33Our foreign power plants and foreign manufacturing operations expose us to risks related to fluctuations in currency rates, which may reduce our profits from such power plants and operations
6. 34Possible fluctuations in the cost of construction, raw materials, commodities and drilling may materially and adversely affect our business, financial condition, future results, and cash flow
7. 35Our commodity derivative activity may limit potential gains, increase potential losses, result in earnings volatility and involve other risks
8. 36We have incurred substantial indebtedness that may decrease our business flexibility, access to capital, and/or increase our borrowing costs, and we may still incur substantially more debt, which may adversely affect our operations and financial results
9. 37We may issue additional shares of our common stock in connection with conversions of the Notes, and thereby dilute our existing stockholders and potentially adversely affect the market price of our common stock
10. 38The fundamental change provisions of the Notes may delay or prevent an otherwise beneficial takeover attempt of us
11. 39The Capped Call Transactions may affect the value of the Notes and our common stock
12. 40We are subject to counterparty risk with respect to the Capped Call Transactions
13. 41We are exposed to swap counterparty credit risk that could materially and adversely affect our business, operating results, and financial condition

Risks Related to Force Majeure

1. 42The existence of a prolonged force majeure event or a forced outage affecting a power plant, or the transmission systems could reduce our net income and materially and adversely affect our business, financial condition, future results and cash flow
2. 43Threats of terrorism and other disasters may impact our operations in unpredictable ways and could adversely affect our business, financial condition, future results and cash flow

Risks Related to Ownership of Our Common Stock

1. 44Future equity issuances, including through our current or any future equity compensation plans, could result in dilution, which could cause the price of our shares of common stock to decline
2. 45The price of our common stock has in the past and may in the future fluctuate substantially, and your investment may decline in value