Quarterly report [Sections 13 or 15(d)]

Segment Information

v3.25.2
Segment Information
 6 Months Ended
Jun. 30, 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 June 30, 2025

Sales

$

9,820,849

$

3,243,405

$

—

$

13,064,254

Cost of sales

5,859,827

2,364,910

—

8,224,737

Gross profit

3,961,022

878,495

—

4,839,517

Operating expenses:

Selling, general and administrative expenses

3,746,504

1,021,320

1,675,905

6,443,729

Amortization expense

203,125

356,250

—

559,375

Total operating expenses

3,949,629

1,377,570

1,675,905

7,003,104

Operating loss

11,393

(499,075)

(1,675,905)

(2,163,587)

Other income (expenses):

Investment and other income

10,722

2,957

13,982

27,661

Fair value remeasurement of warrant liability

—

—

(7,531,044)

(7,531,044)

Fair value remeasurement of contingent forward contract

—

—

789,588

789,588

Fair value remeasurement of contingent value rights

—

—

6,271

6,271

Financing fees

—

—

(559,938)

(559,938)

Interest expense

(15,098)

—

(147,032)

(162,130)

Loss on debt extinguishment

—

—

—

—

Other (expense) income, net

(4,376)

2,957

(7,428,173)

(7,429,592)

Net loss before income taxes

$

7,017

$

(496,118)

$

(9,104,078)

$

(9,593,179)

Depreciation and amortization

$

251,048

$

374,381

$

—

$

625,429

Capital expenditures

$

—

$

8,817

$

—

$

8,817

Assets

$

24,140,111

$

16,935,705

$

3,054,034

$

44,129,850

Corporate and

SUNation

HEC

Other

Total

Three Months Ended June 30, 2024

Sales

$

9,731,647

$

3,817,773

$

—

$

13,549,420

Cost of sales

6,018,778

2,738,288

—

8,757,066

Gross profit

3,712,869

1,079,485

—

4,792,354

Operating expenses:

Selling, general and administrative expenses

3,970,704

991,480

1,596,739

6,558,923

Amortization expense

203,125

506,250

—

709,375

Fair value remeasurement of SUNation earnout consideration

—

—

(450,000)

(450,000)

Total operating expenses

4,173,829

1,497,730

1,146,739

6,818,298

Operating loss

(460,960)

(418,245)

(1,146,739)

(2,025,944)

Other income (expenses):

Investment and other income

5,115

3,644

18,566

27,325

Fair value remeasurement of warrant liability

—

—

(3,267,571)

(3,267,571)

Fair value remeasurement of embedded derivative liability

—

—

(1,055,600)

(1,055,600)

Fair value remeasurement of contingent value rights

—

—

116,775

116,775

Interest expense

(15,388)

—

(720,245)

(735,633)

Other (expense) income, net

(10,273)

3,644

(4,908,075)

(4,914,704)

Net (loss) income before income taxes

$

(471,233)

$

(414,601)

$

(6,054,814)

$

(6,940,648)

Depreciation and amortization

$

255,559

$

530,443

$

770

$

786,772

Capital expenditures

$

11,985

$

—

$

—

$

11,985

Assets

$

27,468,300

$

22,786,653

$

2,598,738

$

52,853,691

Corporate and

SUNation

HEC

Other

Total

Six Months Ended June 30, 2025

Sales

$

19,365,403

$

6,335,489

$

—

$

25,700,892

Cost of sales

11,731,799

4,698,251

—

16,430,050

Gross profit

7,633,604

1,637,238

—

9,270,842

Operating expenses:

Selling, general and administrative expenses

7,594,004

1,997,994

2,891,029

12,483,027

Amortization expense

406,250

712,500

—

1,118,750

Operating (loss) income

(366,650)

(1,073,256)

(2,891,029)

(4,330,935)

Other income (expenses):

Investment and other income

18,247

10,233

47,346

75,826

Fair value remeasurement of warrant liability

—

—

(7,531,044)

(7,531,044)

Fair value remeasurement of contingent forward contract

—

—

899,080

899,080

Fair value remeasurement of contingent value rights

—

—

25,450

25,450

Financing fees

—

—

(1,136,532)

(1,136,532)

Interest expense

(30,956)

—

(702,414)

(733,370)

Loss on debt extinguishment

—

—

(343,471)

(343,471)

Other expense, net

(12,709)

10,233

(8,741,585)

(8,744,061)

Net loss before income taxes

$

(379,359)

$

(1,063,023)

$

(11,632,614)

$

(13,074,996)

Depreciation and amortization

$

502,098

$

750,646

$

—

$

1,252,744

Capital expenditures

$

—

$

8,817

$

—

$

8,817

Corporate and

SUNation

HEC

Other

Total

Six Months Ended June 30, 2024

Sales

$

19,484,617

$

7,284,000

$

—

$

26,768,617

Cost of sales

11,820,538

5,350,277

—

17,170,815

Gross profit

7,664,079

1,933,723

—

9,597,802

Operating expenses:

Selling, general and administrative expenses

7,843,159

1,993,532

3,351,259

13,187,950

Amortization expense

406,250

1,012,500

—

1,418,750

Fair value remeasurement of SUNation earnout consideration

—

—

(800,000)

(800,000)

Total operating expenses

8,249,409

3,006,032

2,551,259

13,806,700

Operating (loss) income

(585,330)

(1,072,309)

(2,551,259)

(4,208,898)

Other income (expenses):

Investment and other income

9,772

5,451

57,943

73,166

(Loss) gain on sale of assets

—

6,118

—

6,118

Fair value remeasurement of warrant liability

—

—

461,022

461,022

Fair value remeasurement of embedded derivative liability

—

—

(1,055,600)

(1,055,600)

Fair value remeasurement of contingent value rights

—

—

492,860

492,860

Interest expense

(37,650)

—

(1,462,853)

(1,500,503)

Other expense, net

(27,878)

11,569

(1,506,628)

(1,522,937)

Net loss before income taxes

$

(613,208)

$

(1,060,740)

$

(4,057,887)

$

(5,731,835)

Depreciation and amortization

$

526,162

$

1,060,864

$

1,538

$

1,588,564

Capital expenditures

$

11,985

$

5,594

$

—

$

17,579