Climate Change Data

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Investigation by the U.S. Department of Justice (DOJ) regarding potential violation of the federal False Claims Act by subsidiary JDL Technologies, Inc. (JDL).
• Internal investigation regarding implications of the DOJ investigation on financial statements and future reporting.
• Assessment of collectability of approximately $4.57 million in receivables related to work for VIDOE.
• Assessment of revenue recognition standards for work performed under the E-Rate program.

Mitigation Strategies

• Cooperating with the DOJ investigation.
• Conducting an internal investigation with Audit Committee oversight.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Reconciling consolidated Stockholders Equity ($57.4 million) with aggregate market capitalization ($38.2 million as of June 30, 2017, and $34.5 million as of August 11, 2017), considering operating losses and fair value of operating business segments.
• Reporting an operating loss for the quarter ended June 30, 2017.

Mitigation Strategies

• Took a $1.6 million impairment of Goodwill and Intangible assets at JDL Technologies and Net2Edge subsidiaries.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Social Achievements

• Instituted temporary office closures, implemented shelter-in-place orders and restrictions and instituted a mandatory work from home policy for substantially all office employees, and instituted social distancing work rules for operations personnel that continued to work in our facilities to satisfy customer orders. We believe the Company has generally been successful implementing proactive measures to protect the health and safety of its employees while maintaining business continuity and high levels of service to our customers.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacting supply chain, demand, and operations; potential for higher logistics and operational costs; project delays due to inability to access locations; slowdown in business due to customer or supplier delays; slowdown in receivable collections due to customer cash flow difficulties.

Mitigation Strategies

• Instituted temporary office closures, implemented shelter-in-place orders and restrictions, instituted a mandatory work from home policy for substantially all office employees, and instituted social distancing work rules for operations personnel.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Our growth strategy depends on the continued origination of solar service agreements; if sufficient additional demand for residential solar power systems does not develop or takes longer to develop than we anticipate, our ability to originate solar service agreements may decrease; a material reduction in the retail price of electricity charged by electric utilities or other retail electricity providers could harm our business, financial condition and results of operations; we need to obtain substantial additional financing arrangements to provide working capital and growth capital; our business prospects are dependent in part on a continuing decline in the cost of solar energy system components; we face competition from centralized electric utilities, retail electric providers, independent power producers and renewable energy companies.; developments in technology or improvements in distributed solar energy generation and related technologies or components may materially adversely affect demand for our offerings; we depend on a limited number of suppliers of solar energy system components; increases in the cost of our solar power systems due to tariffs imposed by the U.S. government could have a material adverse effect on our business, financial condition and results of operations; our operating results may fluctuate from quarter to quarter and year to year; if we are unable to make acquisitions on economically acceptable terms, our future growth would be limited, and any acquisitions we may make could reduce, rather than increase, our cash flows; the installation and operation of solar power systems depends heavily on suitable solar and meteorological conditions; the loss of one or more members of our senior management or key employees may adversely affect our ability to implement our strategy; our inability to protect our intellectual property could adversely affect our business; we may be subject to interruptions, failures or breaches in our information technology systems; we may be subject to regulation as an electric utility in the future; electric utility policies and regulations, including those affecting electric rates, may present regulatory and economic barriers to the purchase and use of solar power systems; we rely on net metering and related policies for competitive pricing to our customers; our business depends in part on the availability of financial incentives; limitations regarding the interconnection of solar power systems to the electrical grid may significantly reduce our ability to sell electricity from our solar power systems; and compliance with occupational safety and health requirements and best practices can be costly.
• our ability to profitably increase our business serving small and mid-size businesses (“SMB”) commercial businesses as well as any decreased spending by our existing SMB customers due to uncertainty or lower customer demand due to the COVID-19 pandemic; our ability to successfully and profitably manage a large number of small accounts; our ability to establish and maintain a productive and efficient workforce; our ability to compete in a fast growing and large field of SD-WAN competitors, some of which have more features than our current product offering; and our ability to successfully sell the legacy CSI businesses at a value closes to their fair market value.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• The Company needs to raise additional capital to fund its operations and repay its obligations, which funding may not be available on favorable terms or at all and may lead to substantial dilution to the Company’s existing shareholders.
• There is substantial doubt about the Company’s ability to continue as a going concern, which conditions may adversely affect the Company’s stock price and its ability to raise capital.

Mitigation Strategies

• Management plans to raise capital through sources that may include public or private equity offerings, debt financings and/or strategic alliances.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Investigation by the U.S. Department of Justice (DOJ) regarding potential violation of the federal False Claims Act by subsidiary JDL Technologies, Inc. (JDL).
• Internal investigation regarding implications of the DOJ investigation on financial statements and future reporting.
• Assessment of collectability of approximately $4.0 million in receivables related to work performed for VIDOE.
• Assessment of revenue recognition standards for work performed under the E-Rate program.

Mitigation Strategies

• Cooperating with the DOJ investigation.
• Conducting an internal investigation with Audit Committee oversight.

Supply Chain Management

Climate-Related Risks & Opportunities