Quarterly report [Sections 13 or 15(d)]

Segment Information

v3.25.1
Segment Information
 3 Months Ended
Mar. 31, 2025
Segment Information [Abstract]  
Segment Information NOTE 11

NOTE 11 – 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.

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.

Corporate and

SUNation

HEC

Other

Total

Three Months Ended March 31, 2025

Sales

$

9,544,554

$

3,092,084

$

—

$

12,636,638

Cost of sales

5,871,972

2,333,341

—

8,205,313

Gross profit

3,672,582

758,743

—

4,431,325

Operating expenses:

Selling, general and administrative expenses

3,847,500

976,674

1,215,124

6,039,298

Amortization expense

203,125

356,250

—

559,375

Total operating expenses

4,050,625

1,332,924

1,215,124

6,598,673

Operating loss

(378,043)

(574,181)

(1,215,124)

(2,167,348)

Other income (expenses):

Investment and other income

7,525

7,276

33,364

48,165

Fair value remeasurement of contingent forward contract

—

—

109,492

109,492

Fair value remeasurement of contingent value rights

—

—

19,179

19,179

Financing fees

—

—

(576,594)

(576,594)

Interest expense

(15,857)

—

(555,383)

(571,240)

Loss on debt extinguishment

—

—

(343,471)

(343,471)

Other (expense) income, net

(8,332)

7,276

(1,313,413)

(1,314,469)

Net loss before income taxes

$

(386,375)

$

(566,905)

$

(2,528,537)

$

(3,481,817)

Depreciation and amortization

$

251,050

$

376,265

$

—

$

627,315

Assets

$

25,302,335

$

17,320,441

$

1,804,896

$

44,427,672

Corporate and

SUNation

HEC

Other

Total

Three Months Ended March 31, 2024

Sales

$

9,752,970

$

3,466,227

$

—

$

13,219,197

Cost of sales

5,801,760

2,611,989

—

8,413,749

Gross profit

3,951,210

854,238

—

4,805,448

Operating expenses:

Selling, general and administrative expenses

3,872,455

1,002,052

1,754,520

6,629,027

Amortization expense

203,125

506,250

—

709,375

Fair value remeasurement of SUNation earnout consideration

—

—

(350,000)

(350,000)

Total operating expenses

4,075,580

1,508,302

1,404,520

6,988,402

Operating loss

(124,370)

(654,064)

(1,404,520)

(2,182,954)

Other income (expenses):

Investment and other income

4,657

1,807

39,377

45,841

(Loss) gain on sale of assets

—

6,118

—

6,118

Fair value remeasurement of warrant liability

—

—

3,728,593

3,728,593

Fair value remeasurement of contingent value rights

—

—

376,085

376,085

Interest expense

(22,262)

—

(742,608)

(764,870)

Other (expense) income, net

(17,605)

7,925

3,401,447

3,391,767

Net (loss) income before income taxes

$

(141,975)

$

(646,139)

$

1,996,927

$

1,208,813

Depreciation and amortization

$

270,603

$

530,421

$

768

$

801,792

Capital expenditures

$

—

$

5,594

$

—

$

5,594

Assets

$

27,568,483

$

23,575,775

$

3,510,099

$

54,654,357