Sustainable Community Networks Overview

RISK FACTORS electriq power Any investment in our securities involves a high degree of risk. In connection with any actual or proposed investment in our securities, you should consider carefully all of the risks described below, together with the risks described under the section titled "Risk Factors" in our quarterly report on Form 10-Q (as amended) filed with the SEC on January 12, 2024, our reports filed from time to time with the SEC and other public announcements we make from time to time. If any of the following risks occur, our business, financial condition or results may be materially and adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your investment. The risk factors described below are not necessarily exhaustive and you are encouraged to perform your own investigation with respect to us and our business. Electriq is a relatively new company with a history of losses, and we expect to incur significant expenses for the foreseeable future. We cannot be certain that we will achieve or sustain profitability. Electriq's limited operating history and its rapidly evolving industry make it difficult to evaluate Electriq's business, the risks and challenges it may face and future prospects. We may be unable to obtain the additional capital that is required to execute its business plan, which could restrict our ability to grow. ► Electriq's operating and financial results and growth forecast rely in large part upon assumptions and analyses developed by Electriq. If these assumptions or analyses prove to be incorrect, Electriq's actual operating results may be materially different from Electriq's forecasted results. There can be no assurance that we will be able to regain compliance or comply with the continued listing standards of NYSE, which could result in the delisting of our securities, limiting investors' ability to make transactions in our securities and subject us to additional trading restrictions. Our independent registered public accounting firm's report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a "going concern." If we are not able to reduce our cost structure in the future, our ability to become profitable may be impaired. The energy storage industry is highly competitive and rapidly changing. Our business may be adversely affected if we cannot adapt quickly and effectively. We have identified a material weakness in our internal control over financial reporting and we may identify additional material weaknesses in the future or otherwise fail to maintain effective internal control over financial reporting, which may result in material misstatements of our reported financial information or cause us to fail to meet our periodic reporting obligations or cause our business to be impaired. If we are unable to recruit and retain key management, technical and sales personnel, our business would be negatively affected. Potential tariffs or a global trade war have increased our costs and could further increase the cost of our products. Our objective is to develop partnerships with municipalities, community choice aggregators and sustainable solutions developers. If we fail to develop those partnerships, our business and financial results would suffer. The majority of our revenues in the years 2021 and 2022 and for the nine months ended September 30, 2023 were derived from a small number of customers, and one of our customers accounted for greater than 87 percent of our revenue in 2022. The majority of our revenue for the remainder of 2023 are derived as a result of a single relationship with a major U.S. clean-energy company in the sustainable community networks program. The loss of, or events affecting, one of our major customers or this relationship with the major U.S. clean-energy company, or the failure to realize the full amount of revenue estimated to be potentially generated over a 30-month period under a project financing agreement with a major U.S. clean-energy company, could reduce our sales, cause us to miss our revenue and other projections and have an adverse effect on our business, financial condition and results of operations. We rely on a small number of third party suppliers. This reliance on third parties increases the risk that necessary components of our products may not be delivered according to our schedule and at prices, quality levels and volumes acceptable to us. We have projected that the majority of our revenue in 2023 and 2024 will be derived from Sustainable Community Networks. We have not generated any revenue from Sustainable Community Networks in the past. There can be no assurances that we will meet our projections for Sustainable Community Networks in 2023 and 2024, or that we will be able to generate revenue from Sustainable Community Networks in the future. We expect to rely on project finance capital to fund installation of our products in the Sustainable Community Networks market, and that funding may be unavailable or expensive. Strictly Confidential / Not for Redistribution 16

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