Annual report [Section 13 and 15(d), not S-K Item 405]

Segment Information

v3.25.1
Segment Information
 12 Months Ended
Dec. 31, 2024
Segment Information [Abstract]  
Segment Information NOTE 14 – SEGMENT INFORMATION

The Company’s segment structure reflects how management makes financial decisions and allocates resources. The Company manages its operations based on the combined results of the residential and commercial businesses with a geographical focus. The SUNation segment provides solar power, battery storage, and related services to customers primarily in New York and Florida. The Hawaii Energy Connection (“HEC”) segment provides the same products and services to residential and commercial customers in Hawaii. The Company’s CODM is represented by a committee that includes the Company’s CEO, CFO, and COO. The CODM regularly reviews discrete financial information for SUNation and HEC in deciding how to allocate resources and in assessing performance. Corporate and other represents the unallocated corporate business activities and corporate shared services, which support the Company’s operating segments, along with operating and other expenses related to legacy CSI assets.

During 2024 management determined that their two operating segments no longer met the criteria to be aggregated into one reportable segment due to changes in economic forecasts and the Company’s plans for integrating SUNation and HEC. As a result, management determined HEC and SUNation to be distinct reportable segments. Prior period amounts have been recast for comparative purposes to reflect this change, which had no impact on the Company’s consolidated financial position, results of operations, and cash flows. The accounting policies of the segments are the same as those applied in the consolidated financial statements as disclosed in Note 2, Summary of Significant Accounting Policies.

The CODM committee evaluates performance for both reportable segments based on segment revenue, gross profit, and operating (loss) income before income taxes. When using these metrics, the CODM committee considers forecast-to-actual variances on a quarterly basis when making decisions about the allocation of operating and capital resources to each segment. The CODM committee also uses these metrics for evaluating pricing strategy to assess the performance of each segment by comparing the results of each segment with one another and in determining the compensation of certain employees.

The Company had no customers that comprised more than 10% of the Company's consolidated revenues during either of the years ended December 31, 2024 and 2023.

Summarized financial information for the Company’s reportable segments are presented and reconciled to consolidated financial information in the following tables, including a reconciliation of segment earnings to income before income taxes. This reconciliation also represents the significant expense categories reviewed by the CODM.

Year ended December 31, 2024

Corporate and

SUNation

HEC

Other

Total

Sales

$

39,733,362

$

17,128,391

$

—

$

56,861,753

Cost of sales

24,639,695

11,795,814

—

36,435,509

Gross profit

15,093,667

5,332,577

—

20,426,244

Operating expenses:

Selling, general and administrative expenses

15,265,443

4,530,879

7,257,844

27,054,166

Amortization expense

812,500

2,025,000

—

2,837,500

Fair value remeasurement of SUNation earnout consideration

—

—

(1,000,000)

(1,000,000)

Goodwill impairment loss

3,101,981

3,101,981

Intangible asset impairment loss

—

750,000

—

750,000

Total operating expenses

16,077,943

10,407,860

6,257,844

32,743,647

Operating (loss) income

(984,276)

(5,075,283)

(6,257,844)

(12,317,403)

Other income (expenses):

Investment and other income

25,920

17,742

100,867

144,529

(Loss) gain on sale of assets

—

6,118

(6,940)

(822)

Fair value remeasurement of warrant liability

—

—

(974,823)

(974,823)

Fair value remeasurement of embedded derivative liability

—

—

(65,617)

(65,617)

Fair value remeasurement of contingent value rights

—

—

522,257

522,257

Interest expense

(74,507)

—

(3,012,943)

(3,087,450)

Loss on debt extinguishment

—

—

(35,657)

(35,657)

Other expense, net

(48,587)

23,860

(3,472,856)

(3,497,583)

Operating loss from continuing operations before income taxes

$

(1,032,863)

$

(5,051,423)

$

(9,730,700)

$

(15,814,986)

Depreciation and amortization

$

1,031,418

$

2,120,364

$

2,050

$

3,153,832

Capital expenditures

$

24,155

$

8,630

$

—

$

32,785

Assets

$

26,127,816

$

18,150,306

$

1,434,610

$

45,712,732

Year ended December 31, 2023

Corporate and

SUNation

HEC

Other

Total

Sales

$

52,363,710

$

27,268,999

$

—

$

79,632,709

Cost of sales

32,992,901

18,943,618

—

51,936,519

Gross profit

19,370,809

8,325,381

—

27,696,190

Operating expenses:

Selling, general and administrative expenses

16,178,126

5,448,385

7,448,067

29,074,578

Amortization expense

1,362,500

2,025,000

1,350,977

4,738,477

Fair value remeasurement of SUNation earnout consideration

—

—

1,350,000

1,350,000

Total operating expenses

17,540,626

7,473,385

10,149,044

35,163,055

Operating (loss) income

1,830,183

851,996

(10,149,044)

(7,466,865)

Other income (expenses):

Investment and other income

35,633

9,773

146,178

191,584

(Loss) gain on sale of assets

—

(5,279)

442,395

437,116

Fair value remeasurement of contingent value rights

—

—

2,674,966

2,674,966

Interest expense

(74,077)

—

(2,583,440)

(2,657,517)

Other expense, net

(38,443)

4,494

680,099

646,149

Operating loss from continuing operations before income taxes

$

1,791,740

$

856,490

$

(9,468,945)

$

(6,820,716)

Depreciation and amortization

$

1,676,842

$

2,105,685

$

1,353,893

$

5,136,420

Capital expenditures

$

473,236

$

173,080

$

9,375

$

655,691

Assets

$

28,738,285

$

26,097,414

$

3,337,112

$

58,172,811