Fluence Energy, Inc.

We believe that our existing properties are in good condition and are sufficient and suitable for the conduct of our business for the foreseeable future. To the extent our needs change as our business grows, we expect that additional space and facilities will be available.

We have gone through rigorous certification processes at several of our offices and are actively pursuing additional certification at others. The corporate office space in Arlington is ISO 9001 and ISO 45001 certified and the testing facility in Erlangen is ISO 9001, ISO 14001, and ISO 45001 certified (quality, environmental and safety certifications, respectively). Our Melbourne office is ISO 9001 certified and ISO 45001, and our U.S. Arlington office is SA8000 certified which is a standard of ethical and decent working conditions.

• We have experienced and may continue to be exposed to risks associated with engineering and construction, utility interconnection, commissioning and installation of our energy storage solutions, and other project delays and disruptions, including those related to obtaining government authorizations and permits, issues relating to customer financing, and other contingencies that may arise in the course of delivering equipment and completing installations.
• We have experienced and may continue to be exposed to risks from supplier concentration and limited supplier capacity for battery energy storage solutions and their failure to perform could impair our ability to deliver our energy storage solutions to our customers.
• We have experienced and may continue to experience risk of exposure that our suppliers may not be able to provide us with the quality or quantity of components on the terms or timeline that we have contracted for which could result in insufficient inventory as well as negatively affect our results of operations and impact our customer relationships.
• We are a global company with operations in many countries and maintain a global supply chain which comes with a number of risks that may impact our business, results of operations, and future growth.
• Significant changes in the cost and/or availability of raw materials that are incorporated into component pieces of our energy storage products could adversely affect our business, results of operations, and future prospects.
• The sales and installation cycle of our energy storage solutions is lengthy, and if we fail to close sales as we anticipate and forecast and on a regular and timely basis, it could adversely affect our business, financial condition, and results of operations.
• Our energy storage solutions, including components thereof, and underlying technology as well as our digital application offerings could have undetected defects, errors, vulnerabilities, and bugs which could reduce market adoption, cause reputational damage, and expose us to legal claims that could materially and adversely affect our business.
• Our energy storage products and solutions, which are complex, could contain defects, or may not operate at expected performance levels, which may cause us to incur warranty expenses beyond current estimates and could adversely affect our business and results of operations.
• Our customer relationships, business, financial results, and reputation may be adversely impacted due to events and incidents relating to storage, delivery, installation, operation, maintenance, and shutdowns of our energy storage solutions.
• Our current and planned foreign operations expose us to additional business, financial, regulatory, geopolitical, and other related risks which may have a material adverse effect on our business.
• Failure by our contract manufacturers, vendors, and suppliers to use ethical business practices and comply with applicable laws and regulations, including labor, health, safety, and environmental laws, may adversely affect our business.
• Actual or threatened health epidemics, pandemics, or similar public health threats have had and could in the future have a material adverse effect on our business, outlook, financial condition, results of operations, and liquidity.
• Severe weather events, including the effects of climate change, are inherently unpredictable and may have a material adverse effect on our financial results and financial condition.
• Risks Related to Acquisitions
• As part of growing our business, we have in the past made acquisitions and expect to continue to evaluate acquisitions and other strategic transactions into the future. If we fail to successfully select, execute, or integrate our acquisitions or other transactions, then our business and operating results could be adversely affected and our stock price could decline.
• Risks Related to Our Financial Condition and Liquidity
• We may not be able to obtain letters of credit, surety bonds, or other financial assurances for our projects, if and when needed on favorable terms, if at all, and we may not have sufficient liquidity to satisfy any indemnification obligations thereunder.
• Our relatively limited operating and revenue history as an independent entity and the endlessly evolving clean energy industry in which we operate makes evaluating our business and future prospects difficult.
• We may increase our expenses in the future and we may not be able to achieve or maintain prolonged profitability.
• Amounts included in our pipeline and contracted backlog may not result in actual revenue or translate into profits.
• Our current credit agreement imposes, and future debt agreements may impose, certain restrictions that may affect our ability to operate our business and make payments on our indebtedness.
• We may not be able to raise additional capital to execute on our current or future business opportunities on favorable terms, if at all, or without dilution to our stockholders.
• We are exposed to fluctuations in currency exchange rates, which could negatively affect our operating results.
• Risks Related to the Clean Energy Industry
• If renewable energy technologies are not suitable for widespread adoption or sufficient demand for our offerings does not develop or takes longer to develop than we anticipate, our sales may decline, and we may be unable to achieve or sustain profitability.
• If the estimates and assumptions we use to determine the size of our total addressable market are inaccurate, our future growth rate may be affected, and the potential growth of our business could be limited.
• Macroeconomic uncertainty and market conditions may adversely affect our industry, business, and financial results.
• An increase in interest rates or a reduction in the availability of tax equity, project debt capital, or project financing in the global financial markets could make it difficult for customers to finance the cost of a battery energy storage system and could reduce the demand for our energy storage solutions.
• The economic benefit of our offerings to our customers depends on the cost of energy and capacity, as well as its availability from alternative sources, including existing infrastructure and /or new natural gas power plants.
• Revenue from any projects we support may be adversely affected if there is a decline in public acceptance or support of renewable energy, or regulatory agencies, local communities, or other third parties delay, prevent, or increase the cost of constructing and operating customer projects.
• Increasing attention to, and evolving expectations regarding, ESG matters may impact the clean energy industry as well as our business and reputation.
• Risks Related to Our Intellectual Property and Technology
• If we are unable to obtain, maintain, and enforce adequate protection for our intellectual property or if the scope of our intellectual property protection is not sufficiently broad, others may be able to develop, commercialize, and/or receive patents for technology and intellectual property substantially similar to ours, and our ability to successfully commercialize our technology or intellectual property may be adversely affected.
• As a technology company selling commercial products, we run the risk of being sued by third parties for infringement, misappropriation, dilution, or other violation of their intellectual property or proprietary rights.
• If our trademarks and trade names are not adequately protected or protectable, we may not be able to build name recognition in our markets of interest, and our competitive position may be harmed.
• We may not be able to enforce our intellectual property rights throughout the world.
• We 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.
• If our existing patents expire or are not maintained, or our pending patent applications are not granted or our patent rights are contested, circumvented, invalidated, or limited in scope, we may not be able to prevent others from selling, developing or exploiting competing technologies, products, services, or digital applications, which could have a material adverse effect on our business, prospects, financial condition, results of operations, and cash flows.
• Our business depends on our ability to implement improvements to and properly maintain and protect the continuous operation and data integrity of our technology infrastructure, data and other business systems and the inability to do so may have a material adverse effect on our reputation and harm our business prospects, financial conditions, and operating results.
• We utilize open-source software, which may pose particular risks to our proprietary software and solutions.
• If we fail to comply with our obligations under license or technology agreements with third parties, including AES and Siemens, we may be required to pay damages, and we could lose license rights that are critical to our business.
• If we cannot license rights to use technologies on reasonable terms, we may not be able to commercialize new solutions or services in the future.
• Compromises, interruptions, and 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.
• We utilize AI technologies in connection with our business, which may expose us to operational, reputational and/or other risks.
• Changes in tax laws or regulations could materially adversely affect our business, financial condition, results of operations, and prospects.
• Existing electric utility industry policies and regulations, and any subsequent changes or new related policies and regulations, may present technical, regulatory, and economic barriers to the purchase and use of energy storage solutions or our digital offerings that may significantly reduce demand for our offerings or harm our ability to compete.
• We 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.
• Any actual or perceived failure to comply with data privacy and data security laws, regulations, industry standards, and other requirements related to the privacy, security, and processing of personal information could have a material adverse effect on our reputation, results of operations, financial condition or have other adverse consequences.
• From time to time, we may be subject to legal proceedings, regulatory disputes, and governmental investigations and inquiries that could cause us to incur significant expenses, divert our management’s attention, and materially harm our business, financial condition, and operating results.
• Risks related to Ownership of our Class A Common Stock
• Certain provisions of Delaware law and antitakeover provisions in our organizational documents could delay or prevent a change of control.
• Because we have no current plans to pay regular cash dividends on our Class A common stock for the foreseeable future, you may not receive any return on investment unless you sell your Class A common stock for a price greater than that which you paid for it.
• The dual class structure of our common stock may adversely affect the trading market for our Class A common stock. We cannot predict the effect our multiple class structure may have on the market price of our Class A common stock.
• We are a “controlled company” within the meaning of the Nasdaq rules and, as a result, qualify for, and intend to rely on, exemptions from certain corporate governance requirements. You may not have the same protections afforded to stockholders of companies that are subject to such corporate governance requirements.
• Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters, and the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees, or stockholders.
• Our amended and restated certificate of incorporation provides that the doctrine of “corporate opportunity” does not apply with respect to any director or stockholder who is not employed by us or our subsidiaries.
• You may be diluted by future issuances of additional Class A common stock or LLC Interests in connection with our incentive plans, acquisitions, or otherwise; future sales of such shares in the public market, or the expectations that such sales may occur, could lower our stock price.
• Short sellers may engage in manipulative activity intended to drive down the market price of our Class A common stock, which has and could in the future result in related governmental and regulatory scrutiny, among other effects.
• Risks Related to Our Existing Shareholders
• We are controlled by the Continuing Equity Owners, whose interests may differ from those of our public stockholders.
• Certain of our officers and directors may have actual or potential conflicts of interest because of their positions with our Continuing Equity Owners.
• We rely on our access to our Founders’ brands and reputation for establishing and building relationships with customers, and on our strategic relationships with our Founders.
• Third parties may seek to hold us responsible for liabilities of our Founders, which could result in a decrease in our income.
• We may be required to pay additional taxes as a result of partnership tax audit rules.
• If we were deemed to be an investment company under the Investment Company Act of 1940, as amended (the “1940 Act”), including as a result of our ownership of Fluence Energy, LLC, applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business.
• Risks Related to Our Organizational Structure
• Our principal asset is our interest in Fluence Energy, LLC, and, as a result, we depend on distributions from Fluence Energy, LLC to pay our taxes and expenses, including payments under the Tax Receivable Agreement. Fluence Energy, LLC’s ability to make such distributions may be subject to various limitations and restrictions.
• The Tax Receivable Agreement with the Founders requires us to make cash payments to them in respect of certain tax benefits to which we may become entitled, and we expect that such payments will be substantial.