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Table of Contents
<br />assets we own or operate, it could cause significant damage to our reputation, affect our relationships with our customers and employees, lead to claims against us and
<br />ultimately harm our business and operating results.
<br />If we cannot obtain surety bonds and letters of credit, our ability to operate may be restricted.
<br />Federal and state laws require us to secure the performance of certain long-term obligations through surety bonds and letters of credit. In addition, we are occasionally required
<br />to provide bid bonds or performance bonds to secure our performance under energy efficiency contracts. In the future, we may have difficulty procuring or maintaining surety
<br />bonds or letters of credit, and obtaining them may become more expensive, require us to post cash collateral or otherwise involve unfavorable terms. Because we are sometimes
<br />required to have performance bonds or letters of credit in place before projects can commence or continue, our failure to obtain or maintain those bonds and letters of credit
<br />would adversely affect our ability to begin and complete projects, and thus could have a material adverse effect on our business, financial condition and operating results.
<br />We operate in a highly competitive industry, and our current or future competitors may be able to compete more effectively than we do, which could have a material
<br />adverse effect on our business, revenues, growth rates, and market share.
<br />Our industry is highly competitive, with many companies of varying size and business models, many of which have their own proprietary technologies, competing for the same
<br />business as we do. Many of our competitors have longer operating histories and greater resources than us and could focus their substantial financial resources to develop a
<br />competitive advantage, others may be smaller and able to adapt to the constantly changing demand of the market more quickly. The passage of the IRA and the opportunities it
<br />brings could intensify competition in our industry. Our competitors may also offer energy solutions at prices below cost, devote significant sales forces to competing with us or
<br />attempt to recruit our key personnel by increasing compensation, any of which could improve their competitive positions. Any of these competitive factors could make it more
<br />difficult for us to attract and retain customers, cause us to lower our prices in order to compete, and reduce our market share and revenues, any of which could have a material
<br />adverse effect on our financial condition and operating results. We can provide no assurance that we will continue to effectively compete against our current competitors or
<br />additional companies that may enter our markets. In addition, we may also face competition based on technological developments that reduce demand for electricity, increase
<br />power supplies through existing infrastructure or otherwise compete with our products and services. We also encounter competition in the form of potential customers electing
<br />to develop solutions or perform services internally rather than engaging an outside provider such as us.
<br />Our small-scale renewable energy plants may not generate expected levels of output.
<br />The small-scale renewable energy plants that we construct and own are subject to various operating risks that may cause them to generate less than expected amounts of
<br />processed biogas, electricity, or thermal energy. These risks include a failure or degradation of our, our customers' or utilities' equipment; an inability to find suitable
<br />replacement equipment or parts; less than expected supply of the plant's source of renewable energy, downtime to our plants such as biogas or biomass; or a faster than expected
<br />diminishment of such supply. For example, in 2022 we had to undertake some unscheduled maintenance at some of our RNG plants impacting the energy output from such
<br />plants. Any extended interruption in the plant's operation, or failure of the plant for any reason to generate the expected amount of output, could have a material adverse effect
<br />on our business and operating results. In addition, we have in the past and, could in the future, incur material asset impairment charges if any of our renewable energy plants
<br />incur operational issues that indicate that our expected future cash flows from the plant are less than its carrying value. Any such impairment charge could have a material
<br />adverse effect on our operating results in the period in which the charge is recorded.
<br />We have not entered into long-term offtake agreements for a portion of the output from our small-scale renewable energy plants and a portion of the related renewable
<br />identification numbers ("RINs'q are not subject to long term contracts.
<br />We have not entered into long-term offtake agreements for a portion of the output from our small-scale renewable energy plants, particularly RNG and non-RNG plants, and we
<br />may sell portions of the processed RNG, medium -BTU gas or electricity produced by the facility at wholesale prices, which are exposed to market fluctuations and risks.
<br />Similarly, we have not entered into long-term agreements with respect to the RINs for which the production and sale of such biof iel may qualify. The failure to sell such
<br />processed RNG, medium -BTU gas, electricity, or the related RINs at a favorable price, or at all could have a material adverse effect on our business and operating results.
<br />We may not be able to replace expiring offtake agreements with contracts on similar terms. If we are unable to replace an expired offtake agreement with an acceptable
<br />new contract, we may be required to remove the small-scale renewable energy plant from the site or, alternatively, we may sell the assets to the customer.
<br />We may not be able to replace an expiring offtake agreement with a contract on equivalent terms and conditions, including at prices that permit operation of the related facility
<br />on a profitable basis. If we are unable to replace an expiring offtake agreement with an acceptable new revenue contract, the affected site may temporarily or permanently cease
<br />operations, or we may be required to sell the power produced by the facility at wholesale prices which are exposed to market fluctuations and risks. In the
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