SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This annual report on Form 10-K contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to our management. The forward-looking statements are contained principally in “Item 1. Business,” “Item 1A. Risk Factors” “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” and “Item 7A. Quantitative and Qualitative Disclosures About Market Risk”. Forward looking statements include information concerning our possible or assumed future results of operations, business strategies, technology developments, new product developments, financing and investment plans, dividend policy, competitive position, industry and regulatory environment, potential growth opportunities and the effects of competition. Forward looking statements include statements that are not historical facts and can be identified by terms such as “anticipate,” “believe,” “could,” “seek,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or similar expressions and the negatives of those terms.
Forward looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward looking statements. Given these uncertainties, you should not place undue reliance on forward looking statements. Also, forward looking statements represent our management’s beliefs and assumptions only as of the date of this filing. Important factors that could cause actual results to differ materially from our expectations include:
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our history of losses and limited period of profitability, which profitability may not continue in the future;
our limited operating history, which makes it difficult to predict future results;
future demand for solar energy solutions;
changes to net metering policies or the reduction, elimination or expiration of government subsidies and economic incentives for on-grid solar electricity applications;
federal, state and local regulations governing the electric utility industry with respect to solar energy;
the retail price of electricity derived from the utility grid or alternative energy sources;
interest rates and supply of capital in the global financial markets;
competition, including introductions of power optimizer, inverter and solar photovoltaic (“PV”) system monitoring products by our competitors;
developments in alternative technologies or improvements in distributed solar energy generation;
historic cyclicality of industry and periodic downturns;
defects or performance problems in our products;
our ability to forecast demand for our products accurately and to match production with demand;
our dependence on ocean transportation to deliver our products in a cost effective manner;
our dependence upon a small number of outside contract manufacturers;
capacity constraints, delivery schedules, manufacturing yields and costs of our contract manufacturers and availability of components;
delays, disruptions and quality control problems in manufacturing;
shortages, delays, price changes or cessation of operations or production affecting our suppliers of key components;
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business practices and regulatory compliance of our raw material suppliers;
performance of distributors and large installers in selling our products;
our ability to retain key personnel and attract additional qualified personnel;
our ability to effectively design, launch, market and sell new generations of our products and services;
our ability to maintain our brand and to protect and defend our intellectual property;
our ability to retain, and events affecting, our major customers;
our ability to manage effectively the growth of our organization and expansion into new markets;
our ability to raise additional capital on favorable terms or at all;
fluctuations in currency exchange rates;
unrest, terrorism or armed conflict in Israel;
general economic conditions in our domestic and international markets; and
the other factors set forth under “Risk Factors.”
Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
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ITEM 1.
BUSINESS
Introduction
We have invented an intelligent inverter solution that has changed the way power is harvested and managed in a solar PV system. Our direct current (“DC”) optimized inverter system maximizes power generation at the individual PV module level while lowering the cost of energy produced by the solar PV system and providing comprehensive and advanced safety features. Our system consists of our power optimizers, inverters and cloud-based monitoring platform and addresses a broad range of solar market segments, from residential solar installations to commercial and small utility- scale solar installations. Since we began commercial shipments in 2010, we have shipped approximately 1.7 gigawatts (“GW”) of our DC optimized inverter systems and our products have been installed in solar PV systems in 74 countries.
Historically, the solar PV industry used traditional string and central inverter architectures to harvest PV solar power. However, traditional inverter architectures result in energy losses as well as systemic challenges in design flexibility, safety and monitoring. More recently, microinverter technology was introduced in an attempt to resolve these challenges, but this technology has certain inherent limitations. We believe that our DC optimized inverter system, consisting of an inverter and distributed power optimizers, best addresses all of these challenges.