SUNation Energy, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Restricted Cash Equivalents and Investments

Restricted Cash Equivalents and Investments

12 Months Ended

Dec. 31, 2022

Restricted Cash Equivalents and Investments [Abstract]

Restricted Cash Equivalents and Investments

NOTE 8 –RESTRICTED CASH EQUIVALENTS AND INVESTMENTS

The following tables show the Company’s restricted cash equivalents and available-for-sale securities’ amortized cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category recorded as cash equivalents or short and long-term investments as of December 31, 2022. The Company did not have any restricted cash equivalents and available for sale securities in 2021.


December 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Restricted Cash Equivalents		Short-Term Investments		Long-Term Investments
Restricted cash equivalents:
Money Market funds	$	978,462	$	—	$	—	$	978,462	$	978,462	$	—	$	—
Subtotal		978,462		—		—		978,462		978,462		—		—

Investments:
Corporate Notes/Bonds		2,715,607		—		(48,841)		2,666,766		—		2,666,766		—
Subtotal		2,715,607		—		(48,841)		2,666,766		—		2,666,766		—


Total	$	3,694,069	$	—	$	(48,841)	$	3,645,228	$	978,462	$	2,666,766	$	—

The following table summarizes the estimated fair value of our investments, designated as available-for-sale and classified by the contractual maturity date of the securities as of December 31, 2022:


	Amortized Cost		Estimated ‎Market Value
Due within one year	$	2,715,607	$	2,666,766
Due after one year through five years		—		—
	$	2,715,607	$	2,666,766

The Company tests for other than temporary losses on a quarterly basis and has considered the unrealized losses indicated above to be temporary in nature. The Company intends to hold the investments until it can recover the full principal amount and has the ability to do so based on other sources of liquidity. The Company expects such recoveries to occur prior to the contractual maturities.

The Company did not recognize any gross realized gains or losses during the years ended December 31, 2022 or 2021.

As part of the merger, the Company acquired an investment totaling $250,000 in preferred shares of Kogniz, Inc., a privately owned artificial intelligence company based in Silicon Valley, CA. The Company’s investment represented less than 10% of the outstanding equity of Kogniz. The Company uses the cost method to account for investments in common stock of entities such as Kogniz if the Company does not have the ability to exercise significant influence over the operating and financial matters of the entity. The Company also uses the cost method to account for its investments that are not in the form of common stock or in-substance common stock in entities if the Company does not have the ability to exercise significant influence over the entity’s operating and financial matters. Based on Kogniz’s 2022 performance and overall financial outlook, the Company recognized an impairment loss of $250,000 within operating expenses in the accompanying consolidated statement of operations and comprehensive loss.