947397--3/2/2009--EVERGREEN_SOLAR

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We have a history of losses, expect to incur substantial further losses and may not achieve or maintain profitability in the future, which in turn could materially decrease the value of our common stock We may need to raise significant additional capital in order to continue to grow our business and fund our operations, as planned, which may not be available on acceptable terms or at all. Our future success depends on our ability to increase our manufacturing capacity through the development of manufacturing facilities in addition to the completion of our Devens facility, to establish contract manufacturers, license our technologies or otherwise outsource the manufacturing of our products. Our inability to increase our production capacity directly or successfully outsource the manufacturing of our products will limit our growth potential and impair our operating results and financial condition. We may be unable to effectively manage the expansion of our operations, and our Sovello joint venture agreement that governs our relationship with the other Sovello joint venture participants may limit our ability to expand our manufacturing outside of the United States. If our suppliers fail to deliver polysilicon sufficient to meet our needs or we are unable to otherwise obtain the polysilicon we need to meet our production targets, our revenue growth, gross margins and profitability would be adversely affected. Our dependence on a limited number of suppliers for raw materials other than polysilicon, key components for our solar power products and capital equipment could adversely affect our ability to manufacture and timely deliver our products, which could result in order cancellations and loss of market share. If the market price of polysilicon continues to decrease, we could be at a significant competitive disadvantage because we have entered into multi-year polysilicon contracts. In light of current market conditions, we may be unable to complete an initial public offering of shares of our Sovello joint venture as was previously contemplated or otherwise realize a return on our investment in Sovello in the near term. We continue to invest significantly in research and development, and these efforts may not result in improved products or manufacturing processes. Our solar power products may not gain market acceptance, which would prevent us from achieving increased revenues and market share Technological changes in the solar power industry could render our solar power products uncompetitive or obsolete, which could reduce our market share and cause our revenues to decline Our ability to increase market share and revenues depends on our ability to successfully maintain our existing distribution relationships and expand our distribution channels We face risks associated with the marketing, distribution and sale of our solar power products internationally, and if we are unable to effectively manage these risks, it could impair our ability to expand our business abroad Our dependence on a small number of distribution partners may cause significant fluctuations or declines in our product revenues Our recent long-term customer contracts for our products will result in a significant portion of our sales of Evergreen Solar manufactured products being concentrated among a limited number of customers in 2009 and 2010. The failure of one or more customers to purchase our products in accordance with their contractual commitments could significantly decrease our revenues and harm our business, financial condition and results of operations. Problems with product quality or product performance may cause us to incur warranty expenses and may damage our market reputation and prevent us from achieving increased sales and market share. Our success in the future may depend on our ability to establish and maintain strategic alliances, and any failure on our part to establish and maintain such relationships could adversely affect our market penetration and revenue growth The success of our business depends on the continuing contributions of our key personnel and our ability to attract and retain new qualified employees. Because we utilize highly flammable materials in our manufacturing processes, we are subject to the risk of losses arising from explosions and fires, which could materially adversely affect our financial condition and results of operations. The reduction or elimination of government subsidies and economic incentives for solar technology could cause our revenues to decline. If solar power technology is not suitable for widespread adoption or sufficient demand for solar power products does not develop or takes longer to develop than we anticipate, our revenues would not significantly increase and we would be unable to achieve or sustain profitability We face intense competition from other companies producing solar power and other energy generation products. If we fail to compete effectively, we may be unable to increase our market share and revenues If we are unable to protect our intellectual property adequately, we could lose our competitive advantage in the solar power market Our technology and products could infringe intellectual property rights of others, which may require costly litigation and, if we are not successful, could cause us to pay substantial damages and disrupt our business. We may be unable to protect adequately or enforce our proprietary information, which may result in its unauthorized use, reduced revenues or otherwise reduce our ability to compete Licenses for technologies and intellectual property may not be available to us. Existing regulations and changes to such regulations concerning the electrical utility industry may present technical, regulatory and economic barriers to the purchase and use of solar power products, which may significantly reduce demand for our products. Compliance with environmental regulations can be expensive, and noncompliance with these regulations may result in potentially significant monetary damages and penalties and adverse publicity. Compliance with occupational safety and health requirements and best practices can be costly, and noncompliance with such requirements may result in potentially significant monetary penalties and adverse publicity. A significant portion of our revenue has been generated from our relationship with Sovello and Sovello faces many of the same risks and uncertainties we face. Litigation against Lehman Brothers and Barclays to recover shares of our common stock loaned to Lehman Brothers could be expensive, time-consuming and ultimately unsuccessful. In light of economic uncertainty and extremely difficult credit markets, our expansion plans may be delayed and we may not be able to fulfill customer contracts for shipments in 2011 and beyond. The significant amount and the structure of our recent offering of senior convertible notes could adversely affect our business, financial condition and results of operations. Unfavorable changes in foreign currency exchange rates could increase the cost to manufacture our products or result in foreign currency exchange losses, which could adversely affect our profits, product orders and market share. Our ability to use net operating loss carryforwards may be subject to limitation. Provisions of our senior convertible notes could discourage an acquisition of us by a third party. RISKS RELATED TO OUR COMMON STOCK The issuance or sale of equity, convertible or exchangeable securities in the market, or the perception of such future sales or issuances, could lead to a decline in the price of our common stock. Three stockholders own, or claim to own, a large portion of our outstanding voting power and may be able to influence significantly the outcome of any stockholder vote. The price of our common stock may fluctuate significantly, which could result in substantial losses for our stockholders and subject us to litigation.

Full 10-K form ▸

947397--3/2/2009--EVERGREEN_SOLAR_INC