Stem, Inc. (STEM) came out with a quarterly loss of $0.15 per share versus the Zacks Consensus Estimate of a loss of $0.20. This compares to loss of $0.46 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 25%. A quarter ago, it was expected that this company would post a loss of $0.16 per share when it actually produced a loss of $0.12, delivering a surprise of 25%. Over the last four quarters, the company has surpassed consens ...

Financial Data and Key Metrics Changes - Total revenue increased by 27% year over year, driven by strong growth across the business [18] - Software revenue rose by 17% compared to Q1 2024, reflecting continued strong performance from PowerTrack and increased storage software activations [18] - GAAP gross margin reached a record 32%, while non-GAAP gross margin was close to an all-time high at 46% [19] - Positive operating cash flow of $9 million was generated for the first time in the company's history [19] - Cash balance grew to $59 million at quarter end, with over $2 million in net cash generated during the quarter [20] Business Line Data and Key Metrics Changes - Solar annual recurring revenue (ARR) increased by 10% sequentially and 24% year over year [10] - Storage ARR grew by 4% sequentially and 31% year over year [11] - Professional services are gaining momentum, establishing the company as a trusted advisor in the clean energy sector [12] Market Data and Key Metrics Changes - The company is experiencing strong bookings in the solar segment, with no significant slowdown noted despite macroeconomic uncertainties [36] - The pace of deployment for solar projects remains robust, with customers continuing to develop new projects [38] Company Strategy and Development Direction - The company has restructured into four distinct business units: software, professional services, managed services, and OEM hardware, each with full P&L responsibility [6][7] - A targeted 27% reduction in workforce is expected to yield $30 million in annual cash cost savings, with $24 million of that benefit realized in 2025 [7][23] - The focus is on growing software revenue, particularly through PowerTrack, and enhancing product capabilities with AI integration [15][19] Management's Comments on Operating Environment and Future Outlook - The clean energy sector faces uncertainty due to evolving economic and regulatory policies, but the company maintains upward momentum [15] - The company reaffirms its full-year 2025 financial guidance across all metrics, with no discernible slowdown in customer deployments [22] - Management emphasizes a commitment to enhancing software features and functionality to maximize customer value [28] Other Important Information - The company plans to enhance financial transparency through segment reporting following the new business unit structure [24] - A reverse stock split is proposed to regain compliance with New York Stock Exchange listing standards [26] Q&A Session Summary Question: How is the bookings environment evolving given the tariffs? - Management noted that OEM hardware sales are not a significant component of the business going forward, and they are actively engaging with customers regarding tariffs [32][33] Question: Are customers still contracting for storage projects? - Management indicated that while there is volatility, they have not seen a significant impact on bookings, particularly in the solar segment [36][38] Question: What are the drivers for expected improving profitability? - Management highlighted that improvements will come from operational expense reductions and revenue growth, with a focus on higher-margin offerings [40][43] Question: Can you elaborate on the brownfield opportunities mentioned? - Management stated that there are broad-based opportunities in core geographies where they operate, with a focus on increasing assets under management [48][49] Question: What is the rationale for deemphasizing PowerBidder Pro? - Management explained that the decision was based on growth potential and execution capabilities, focusing resources on more promising products like PowerTrack [55][56]

Financial Data and Key Metrics Changes - Total revenue increased by 27% year over year, driven by strong growth across the business [18] - Software revenue rose by 17% compared to Q1 2024, reflecting continued strong performance from PowerTrack and increased storage software activations [18] - GAAP gross margin reached a record 32%, while non-GAAP gross margin was close to an all-time high at 46% [19] - Positive operating cash flow of $9 million was generated for the first time in the company's history [19] - Cash balance grew to $59 million at quarter end, with over $2 million in net cash generated during the quarter [20] Business Line Data and Key Metrics Changes - Solar annual recurring revenue (ARR) increased by 10% sequentially and 24% year over year [10] - Storage ARR grew by 4% sequentially and 31% year over year [11] - Professional services are gaining momentum, establishing the company as trusted advisors in the clean energy sector [12] Market Data and Key Metrics Changes - The company is experiencing strong bookings in the solar segment, with no significant slowdown noted despite macroeconomic uncertainties [36] - The pace of deployment for solar projects remains robust, with customers continuing to develop new projects [38] Company Strategy and Development Direction - The company has restructured into four distinct business units: software, professional services, managed services, and OEM hardware, each with full P&L responsibility [6] - A targeted 27% reduction in workforce is expected to yield $30 million in annual cash cost savings, with $24 million of that benefit realized in 2025 [7] - The focus is on growing software revenue, particularly through PowerTrack, and optimizing capital deployment towards high-growth opportunities [9] Management's Comments on Operating Environment and Future Outlook - The clean energy sector faces uncertainty due to evolving economic and regulatory policies, but the company maintains upward momentum [15] - The company expects improving profitability as it moves through the year, driven by operational cost discipline and revenue growth [13][22] - The organizational changes are seen as a significant milestone in the company's evolution, supporting a strategy shift aimed at enhancing shareholder value [24] Other Important Information - The company plans to enhance financial transparency through segment reporting, providing deeper insights into performance drivers across business lines [24] - A reverse stock split is proposed to regain compliance with New York Stock Exchange listing standards [26] Q&A Session Summary Question: How is the bookings environment evolving given the tariffs? - The OEM hardware sales are not a significant component of the business going forward, and there is active dialogue with customers regarding the impact of tariffs [32][33] Question: Are customers still contracting for storage projects? - There has not been a significant slowdown in solar bookings, and the pace of deployment remains strong [36][38] Question: What are the drivers for expected improving profitability? - Improvement is anticipated from operational expense reductions and revenue growth, with a focus on managing operating expenses effectively [40][42] Question: Can you elaborate on the brownfield opportunities mentioned? - The company is pursuing opportunities in core geographies where managed services are already established, with a broad-based approach rather than targeting specific areas [48] Question: What is the rationale for deemphasizing PowerBidder Pro? - The decision was based on growth potential and the ability to execute effectively, focusing on PowerTrack and associated offerings instead [55]

[Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Stem, Inc. presents its unaudited condensed consolidated financial statements for Q1 2025, showing a net loss of $25.0 million and decreased total assets [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $405.1 million, liabilities to $822.0 million, and stockholders' deficit increased to $416.9 million as of March 31, 2025 Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $58,584 | $56,299 | | Accounts receivable, net | $34,733 | $59,316 | | Total current assets | $110,580 | $136,617 | | **Total assets** | **$405,081** | **$437,359** | | Total current liabilities | $120,177 | $128,800 | | Convertible notes, noncurrent | $526,503 | $525,922 | | **Total liabilities** | **$822,005** | **$835,192** | | **Total stockholders' (deficit) equity** | **($416,924)** | **($397,833)** | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Revenue increased to $32.5 million, gross profit turned positive at $10.5 million, and net loss narrowed to $25.0 million in Q1 2025 Q1 2025 vs. Q1 2024 Statement of Operations (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total revenue | $32,512 | $25,469 | | Gross profit (loss) | $10,538 | ($24,191) | | Loss from operations | ($21,148) | ($68,013) | | **Net loss** | **($25,000)** | **($72,307)** | | **Net loss per share, basic and diluted** | **($0.15)** | **($0.46)** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating activities generated $8.5 million in cash, with total cash, cash equivalents, and restricted cash ending at $60.4 million for Q1 2025 Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $8,536 | ($621) | | Net cash (used in) provided by investing activities | ($3,590) | $4,675 | | Net cash (used in) provided by financing activities | ($2,819) | $3,142 | | **Net increase in cash, cash equivalents and restricted cash** | **$2,285** | **$7,429** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail business, accounting policies, liquidity, convertible notes, and subsequent events, including a 27% workforce reduction in April 2025 - The company leads in **AI-driven software and services** for clean energy assets, utilizing its Athena® AI platform and PowerTrack software[22](index=22&type=chunk)[23](index=23&type=chunk) - As of March 31, 2025, the company held **$58.6 million in cash and cash equivalents**, deemed sufficient for the next 12 months despite a **$9.6 million negative working capital**[26](index=26&type=chunk) - Q1 2024 included a **$33.1 million net revenue reduction** from Parent Company Guarantees (PCGs) on hardware, with no remaining PCGs as of March 31, 2025[69](index=69&type=chunk)[70](index=70&type=chunk) - On April 9, 2025, the company announced a **27% global workforce reduction**, anticipating **$6.0 million to $6.5 million in Q2 2025 charges**[121](index=121&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 financial results, including a 28% revenue increase, improved gross profit, a new software strategy, NYSE compliance, and liquidity, with an Adjusted EBITDA loss of $4.6 million [Key Factors, Trends and Uncertainties](index=23&type=section&id=Key%20Factors,%20Trends%20and%20Uncertainties%20Affecting%20our%20Business) Key factors include a new AI-enabled software strategy, NYSE non-compliance due to stock price, and uncertainty regarding the Inflation Reduction Act - The company adopted a new business strategy focusing on **AI-enabled software and services**, reducing battery resales, a historical revenue source[134](index=134&type=chunk) - The company received an **NYSE non-compliance notice** on August 28, 2024, due to its stock price falling below $1.00, and plans to seek stockholder approval for a reverse stock split[138](index=138&type=chunk) - Uncertainty surrounds the **Inflation Reduction Act (IRA)** and **Infrastructure Investment and Jobs Act (IIJA)** due to a new U.S. administration's executive order pausing government fund disbursements[141](index=141&type=chunk)[142](index=142&type=chunk) [Non-GAAP Financial Measures](index=26&type=section&id=Non-GAAP%20Financial%20Measures) Non-GAAP Gross Profit reached $14.8 million (46% margin) and Adjusted EBITDA loss improved to $4.6 million in Q1 2025, excluding specific non-recurring items Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit (in millions) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | GAAP gross profit (loss) | $10.5 | ($24.2) | | Add: Revenue reduction, net | — | $33.1 | | Add: Amortization of capitalized software | $4.3 | $3.9 | | Add: Excess supplier costs | — | $1.0 | | **Non-GAAP gross profit** | **$14.8** | **$13.8** | Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | ($25,000) | ($72,307) | | Depreciation and amortization | $11,695 | $11,154 | | Stock-based compensation | $4,317 | $8,374 | | Revenue reduction, net | — | $33,128 | | **Adjusted EBITDA** | **($4,627)** | **($12,239)** | [Financial Results and Key Metrics](index=29&type=section&id=Financial%20Results%20and%20Key%20Metrics) Key operating metrics for Q1 2025 include Bookings of $34.5 million, Contracted Backlog of $25.3 million, and ARR of $56.9 million, with redefined definitions Key Operating Metrics | Metric (at period end unless noted) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Bookings (for the quarter) | $34.5M | $23.8M | | Contracted backlog* | $25.3M | $1,639.6M | | Storage operating AUM (GWh) | 1.6 | 0.8 | | Solar operating AUM (GW) | 32.4 | 26.9 | | CARR* | $69.0M | $89.3M | | ARR | $56.9M | $45.1M | *Redefined metric vs. prior periods [Results of Operations](index=32&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20March%2031,%202025%20and%202024) Q1 2025 revenue increased 28% to $32.5 million, gross profit reached $10.5 million, and total operating expenses decreased 28% to $31.7 million - Revenue increased by **$7.0 million (28%) year-over-year**, driven by **$4.2 million in hardware revenue** and **$2.9 million in services and other revenue** growth[184](index=184&type=chunk) - Cost of revenue decreased by **$27.7 million (56%) year-over-year**, primarily due to a **$29.1 million reduction in hardware cost** from product mix changes[185](index=185&type=chunk) - Total operating expenses decreased by **$12.1 million (28%) year-over-year**, with reductions across Sales & Marketing (**$4.3 million**), R&D (**$2.8 million**), and G&A (**$5.0 million**) due to lower headcount and professional services costs[186](index=186&type=chunk)[187](index=187&type=chunk)[188](index=188&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity as of March 31, 2025, was **$58.6 million in cash**, deemed sufficient for 12 months despite a **$9.6 million working capital deficit**, with significant convertible notes outstanding - Principal liquidity sources as of March 31, 2025, were **$58.6 million in cash and cash equivalents**, with a **$9.6 million working capital deficit**[193](index=193&type=chunk) - Long-term debt includes **$297.0 million** for 2028 Convertible Notes and **$240.0 million** for 2030 Convertible Notes[85](index=85&type=chunk)[98](index=98&type=chunk) - The company generated **$8.5 million in cash from operations** in Q1 2025, a significant improvement from a **$0.6 million use of cash** in Q1 2024, driven by a smaller net loss and a **$24.4 million decrease in accounts receivable**[207](index=207&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, the company is exempt from providing quantitative and qualitative disclosures about market risk - As a smaller reporting company, Stem, Inc. is **not required to provide quantitative and qualitative disclosures about market risk**[216](index=216&type=chunk) [Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls over financial reporting - The CEO and CFO concluded that the company's **disclosure controls and procedures were effective** as of March 31, 2025[218](index=218&type=chunk) - No material changes to **internal controls over financial reporting** occurred during Q1 2025[219](index=219&type=chunk) [Part II. Other Information](index=38&type=section&id=Part%20II.%20Other%20Information) [Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings but does not anticipate a material loss from any pending cases - The company does not believe any pending legal proceedings will have a **material adverse effect** on the company[118](index=118&type=chunk)[222](index=222&type=chunk) [Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported from the Annual Report on Form 10-K for the fiscal year ended December 31, 2024 - No **material changes to risk factors** from the Annual Report on Form 10-K for the fiscal year ended December 31, 2024, were reported[223](index=223&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales or repurchases of its equity securities during the period - There were **no unregistered sales of equity securities** or company repurchases of its equity securities in the quarter[224](index=224&type=chunk)[225](index=225&type=chunk) [Other Information](index=38&type=section&id=Item%205.%20Other%20Information) A Section 16 officer adopted a Rule 10b5-1 trading plan on March 18, 2025, to sell up to 20,017 shares of common stock - Matthew Tappin, President, Software, adopted a **Rule 10b5-1 trading plan** on March 18, 2025, to sell up to **20,017 shares of common stock**[229](index=229&type=chunk)

Exhibit 99 Stem Announces First Quarter 2025 Results Achieved strong GAAP and non-GAAP gross margins The definitions of bookings, contracted backlog, and CARR have been revised versus prior period disclosure. Thus, related 4Q24 operating metrics in this press release have been recalculated under the revised definitions to achieve a more accurate comparison. See table titled "Key Financial Results and Operating Metrics" for these new definitions. * First quarter of positive operating cash flow in company his ...

Core Viewpoint - Stem (STEM) is expected to report its first-quarter 2025 earnings on April 29, with revenues estimated at $25.80 million, reflecting a 1.30% increase year-over-year, and a projected loss of 20 cents per share, which is an improvement from a loss of 46 cents in the same quarter last year [1][3]. Group 1: Earnings Expectations - The Zacks Consensus Estimate for first-quarter 2025 revenues is $25.80 million, indicating a 1.30% increase from the previous year [1]. - The consensus for the bottom line is a loss of 20 cents per share, which has widened by 6 cents over the past month but shows improvement from a loss of 46 cents in the prior year [1][2]. Group 2: Performance Drivers - The anticipated performance for the first quarter is expected to benefit from the high-margin software platform, PowerTrack, which has delivered gross margins of 70-80% in previous quarters [3]. - The company's strategic shift towards software and services aims to reduce reliance on lower-margin hardware sales, likely supporting improved profitability [3]. - International expansion, particularly a deal with Neovolt in Hungary to manage a 484 MW solar portfolio, is expected to contribute to revenue growth [4]. Group 3: Operational Improvements - The company expects an improvement in operating cash flow due to working capital releases related to OEM hardware, aided by efficient inventory management and a reduction in lower-margin hardware deployments [5]. - Stem plans to cut operational expenses by over 20% in 2025, focusing on profitability and operational efficiency through targeted initiatives [6]. Group 4: Challenges - A significant decline in hardware sales during the fourth quarter of 2024 negatively impacted overall performance, and this trend is expected to continue into the first quarter of 2025, putting pressure on total revenues [7]. Group 5: Earnings Prediction Model - According to the Zacks model, Stem currently has an Earnings ESP of 0.00% and a Zacks Rank of 2 (Buy), indicating that the odds of an earnings beat are not favorable [8].

Stem’s (STEM) shares have lost 13% in the past month, underperforming the broader Zacks Computer and Technology sector’s 7.1% drop and the Zacks Computers - IT Services industry’s 9.8% decline.STEM shares have underperformed industry peers like Amdocs (DOX) , CDW Corp. (CDW) and Infosys (INFY) .Over the same timeframe, Amdocs shares have returned 2.2%, while CDW Corp. and Infosys have experienced declines of 5.5% and 10.5%, respectively.The underperformance can be attributed to the disappointing fourth-quar ...

Core Viewpoint - Adia Med is leading an initiative to standardize umbilical cord stem cell use in the U.S., focusing on quality, safety, and accountability to enhance trust in regenerative medicine [1][2][3] Group 1: Initiative Overview - The initiative aims to establish rigorous best practices, including third-party verification and homologous applications, to redefine standards in regenerative medicine [1][3] - Adia Med plans to present these standards to the new head of the Department of Health and Human Services and the FDA to address inconsistencies in stem cell therapies [1][5] Group 2: Current Challenges - Patients have faced issues with low-quality or non-viable stem cells, leading to a lack of trust and limited potential in regenerative medicine [2][5] - Reports of patients receiving substandard stem cells are increasing, highlighting the urgent need for standardized practices [5][9] Group 3: Proposed Standards - Key pillars of the standardization framework include homologous use standards and strict quality control protocols for harvesting, processing, and storing stem cells [3][4] - Third-party verification will be required for all labs providing stem cell products, ensuring minimum stem cell count and viability for each batch [8] Group 4: Industry Impact - The initiative aims to enhance patient safety by reducing risks associated with poor-quality cells and ensuring treatment consistency across providers [9] - By establishing ethical standards, the initiative seeks to eliminate bad actors in the industry and restore trust among patients [9]

Core Insights - The Progress Women in STEM Scholarship Series aims to empower future women leaders in STEM fields, supporting students in the U.S., Bulgaria, and India [1][2] Group 1: Scholarship Details - The Mary Székely Scholarship for Women in STEM offers a renewable $10,000 scholarship for women in Massachusetts pursuing undergraduate degrees in computer science, software engineering, IT, or computer information systems [2] - The Women in STEM Scholarship Program in Bulgaria awards two scholarships of BGN 3,000 each (approximately $1,700) for women in their second, third, or fourth year of study in relevant fields at accredited Bulgarian universities [3] - The Akanksha Scholarship for Women in STEM in India provides a renewable award of up to INR 1,50,000 (approximately $2,000) annually for women pursuing undergraduate degrees in related fields, emphasizing resilience and ambition [4] Group 2: Corporate Social Responsibility - The scholarship series is part of the Progress for Tomorrow Corporate Social Responsibility (CSR) program, highlighting the company's commitment to innovation and social impact [5] - Past scholarship recipients have demonstrated innovation in various fields, including AI applications for affordable housing and technology integration with art and sustainability [5] Group 3: Application Information - Applications for the scholarships must be submitted by April 11, 2025, with details available on the Progress website [6]

Revenue and Financial Performance - Total hardware revenue for fiscal year 2024 was $76.8 million, accounting for 53.1% of total revenue, down from $399.0 million and 86.4% in fiscal year 2023[90]. - The company has incurred an accumulated deficit of approximately $1,626.5 million as of December 31, 2024, and expects to continue to incur net losses on a GAAP basis through at least 2025[109]. - The company's financial condition and results of operations are expected to fluctuate quarterly, with potential revenue reductions due to a new business strategy announced in October 2024[188]. - Future revenue and key operating metrics may fall short of investor expectations, adversely affecting the stock price[189]. - The company may issue a significant number of shares in the future for investments or acquisitions, potentially leading to dilution for existing shareholders[190]. Business Strategy and Transition - The company announced a new strategy on October 1, 2024, focusing on transitioning from hardware resales to a software- and services-focused business[89]. - The transition is expected to lead to decreased revenue in the short term, potentially straining cash flow and limiting investment in necessary technologies and infrastructure[90]. - The future growth of the company depends on successfully executing new product and market opportunities, particularly in AI-enabled software and services[85]. - The company plans to pursue future acquisitions to enhance revenue and market position, but such efforts may involve significant risks and costs[112]. Market and Competitive Landscape - The distributed generation industry is emerging, and there is uncertainty regarding the widespread market acceptance of the company's offerings[79]. - The company faces significant competition from established providers with more capital resources and longer operating histories[84]. - The market for renewable energy generation is rapidly evolving, and the company's revenue and profitability may be adversely impacted if demand does not develop as anticipated[80]. - The company relies on significant customers for a substantial portion of its revenue, and any loss of these relationships could lead to a significant decline in revenue[72]. Operational Risks and Challenges - The company may experience operational disruptions and restructuring-related costs during the transition to its new strategy[91]. - The lengthy sales cycle for hardware and software-enabled services typically ranges from six to 12 months, which may adversely affect revenue generation and operational results[100]. - The company faces supply chain risks, including potential disruptions from international vendors and geopolitical factors, which could negatively impact operations and customer relationships[94]. - The company has entered into long-term supply agreements that may result in insufficient inventory, impacting operational results if suppliers fail to meet quality and quantity requirements[96]. - The company is subject to credit risk from customers, with potential delays in payments adversely affecting revenue and financial condition[99]. Customer and Market Dynamics - Customer retention is critical for the company's subscription services, and failure to renew or expand subscriptions could adversely affect financial results[136]. - Subscription revenue is recognized ratably over contract terms, meaning declines in new or renewed subscriptions may not immediately impact revenue but will affect future quarters[138]. - The successful installation of energy storage systems is contingent upon timely interconnection to local electric grids, with delays potentially impacting revenue recognition[135]. Regulatory and Compliance Issues - The company is facing regulatory risks due to negative attitudes toward renewable energy projects, which could adversely affect its business and financial condition[168]. - Environmental laws and regulations are complex and evolving, potentially leading to liability for administrative oversight costs and fines[169]. - The company is subject to significant compliance burdens due to the Uyghur Forced Labor Prevention Act, potentially causing supply chain constraints and project delays[180]. - The company continues to develop and refine its internal controls over financial reporting, which may require significant resources[193]. Technology and Innovation - The performance of the Athena platform is critical; disruptions or outages could significantly affect customer satisfaction and financial results[125]. - The company's future growth relies on developing and maintaining proprietary technology, including the Athena platform, to support its products and services[152]. - The company has received patents and filed applications to protect its technology, but there is no assurance that these measures will prevent misappropriation[152]. External Economic Factors - Unfavorable macroeconomic conditions, such as inflation and rising interest rates, could reduce investment in projects utilizing the company's services[206]. - The economic benefit of the company's offerings is influenced by local electricity rates, which are subject to change, potentially affecting the demand for energy storage systems[131]. - Changes in U.S. trade policies, including tariffs, could disrupt supply chains and negatively impact costs and gross margins, with a 25% tariff on steel and a 10% tariff on aluminum already imposed[175]. Legal and Litigation Risks - The company has faced two securities class action lawsuits filed in May and July 2023, alleging violations of the Securities Exchange Act and seeking damages and litigation costs[187]. - The company is subject to increased legal, accounting, and financial compliance costs due to the requirements of the Sarbanes-Oxley Act and other regulations[191].