Risk Factors Update Summary

• Failure to maintain appropriate ESG practices and disclosures could result in reputational harm and loss of customer and investor confidence. This change might impact the company's ability to attract and retain stakeholders.
• The company may face significant charges related to assets, resulting in a decrease in profitability.
• The company's Water segment revenues largely depend on the construction of new desalination plants and retrofitting of existing water treatment plants. This may result in decreased revenues if there is a decline in construction or retrofit projects.
• The company cannot assure the retention of key personnel, which may have a material adverse effect.
• The company continues to invest in manufacturing, R&D, engineering, sales, and customer support. This change might result in improved product quality and customer satisfaction.
• Changes in U.S. tax laws or regulations could increase future tax expenses for the company.
• The profitability in new industrial verticals may be lower than in the Water segment. This change might result in lower revenues and financial performance in those verticals.
• Threats or acts of war or terrorism can adversely affect the company's business, especially in regions with large water desalination plants. This change might result in reduced product demand and financial performance.
• Rising inflation may increase costs of operations and negatively impact credit and securities markets.
• The company's Water segment sales and revenue may be negatively impacted by factors such as global or regional economic downturns, changing government priorities, and conflicts, which could affect the number and capacity of desalination plants built or the timing of their completion.
• The company faces competition in the desalination and industrial wastewater treatment markets, with new competitors entering the market and existing competitors introducing improvements to their products. This could impact the company's market share and revenue.
• Increased interest rates could have a negative effect on securities markets and the market price of common stock.
• The company's ability to complete acquisitions and integrate them successfully is crucial for strengthening its competitive and financial position. This change might impact the company's growth strategy and financial results.
• The company's Form 10-K Annual Report for 2022 has one less note (25 instead of 26).
• The average sales cycle for international customers involved with larger desalination plants ranges from 16 to 36 months. This change might result in longer lead times for revenue recognition.
• The company's diversification into new fluid flow markets, such as commercial refrigeration and industrial wastewater, may not be successful in competing with existing competitors and capturing market opportunities.
• Uncertainty in the global geopolitical landscape and macro-economic environment may impact operations outside the U.S.
• The company is exposed to credit risk on trade accounts receivable, which may be higher during economic downturns. This change might result in higher credit and collectability risk.
• Uncertainty regarding future actions and risks related to internal control and accounting principles may impact the company's financial statements.
• The company's ability to successfully compete in the CO2 refrigeration market is uncertain, and the adoption of their PX G1300 energy recovery device may be limited, affecting their growth and profitability.
• Supply chain may be adversely impacted due to global events, resulting in production delays and loss of critical materials.
• The market price of the company's common stock may be influenced by underlying business prospects and the availability of funds.
• Business disruptions and restrictions may impact the availability of components and raw materials, affecting sales and operations.
• Shareholders may experience future dilution as a result of the vesting or exercise of equity awards.
• The company's ability to develop and commercialize new technologies for industrial wastewater treatment and CO2 refrigeration is subject to technological challenges and may not generate sufficient interest or adoption.
• The company does not plan to pay cash dividends in the foreseeable future, limiting potential gains for shareholders.
• The company's growth and competitive position depend on their ability to innovate, develop competitive products, defend market share, and attract individuals with the necessary expertise. Failure to do so could impact their future growth and financial condition.
• Risks associated with the security of information technology systems and potential data breaches.