SUNation Energy, Inc.
For the period ended Jun 30, 2026. Filed Aug 12, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 12, 2026
SUNE$2.05+2.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-15.
0000022701-26-000007
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-12.
0000022701-26-000010
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 93 previous paragraphs and 122 current paragraphs.
68 unchanged; 22 reworded; 24 added; 3 removed; 0 previous and 8 current paragraphs rearranged.
Tables are not compared: 3 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (24)
Current report
Recent Development: Proposed Merger with Suniva
Current report
On June 5, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with SUNation Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (the “Merger Sub”), and Suniva, Inc., a Delaware corporate (“Suniva”), pursuant to which, among other matters, and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Suniva with Suniva surviving the merger as a wholly owned subsidiary of the Company (the “Suniva Merger”).
Current report
Concurently with the execution of the Merger Agreement, certain key stockholders of the Company (solely in their respective capacities as SUNation stockholders) holding approximately 10.4% of the outstanding shares of the Company’s capital stock entered into voting agreements with the Company and Suniva to vote all of their shares of the Company’s capital stock in favor of the adoption and approval of the Merger Agreement and the transactions contemplated thereby (the “Voting Agreements”).
Current report
Subject to the terms and conditions of the Merger Agreement, assuming consummation thereof, at the effective time of the Merger (the “Effective Time”): (a) each then-outstanding share of Suniva capital stock (including shares of Suniva common stock and shares of Suniva preferred stock) will be converted into the right to receive a number of shares of the Company’s common stock calculated in accordance with the Merger Agreement (the “Exchange Ratio”); (b) each then-outstanding Suniva warrant will be cancelled at the Effective Time, with each warrantholder entitled to receive for each warrant share a number of shares of the Company’s common stock equal to the Exchange Ratio, the per share exercise price of the warrant; and (c) each then-outstanding Suniva restricted stock unit will be fully vested and converted into shares of the Company’s common stock at the Exchange Ratio. Additionally, pursuant to the terms of the Merger Agreement, in addition to the conversion of 50% of the remaining secured long-term debt obligations of the Company into shares of common stock, the terms of which conversion to equity shall be subject to approval of the Company’s stockholders at the special meeting which shall be called to approve the proposed Merger and related matters, Suniva shall also pay to the Company at the closing of the proposed Merger approximately $3.75 million in cash in satisfaction of the current secured long-term debt of the Company.
Current report
Under the Exchange Ratio in the Merger Agreement, upon the closing of the Merger, on a pro forma basis and based upon the number of shares of the Company’s common stock expected to be issued in the Merger, pre-Merger Suniva stockholders are expected to own approximately 98.2% of the combined company and pre-Merger SUNation stockholders are expected to own approximately 1.8% of the combined company. The percentage of the combined company that each party’s stockholders will own following the closing is subject to adjustments as described in the Merger Agreement for the amount of the Company’s net cash at closing relative to a specified target.
Current report
For purposes of calculating the Merger Consideration, (a) shares of the Company’s common stock underlying the Company’s stock options, warrants and other rights to receive shares outstanding as of immediately prior to the closing of the Merger will be deemed to be outstanding, (b) shares of the Company’s common stock issuable upon the settlement of our restricted stock units (excluding performance-based restricted stock units for which the performance condition has not been met) will be deemed to be outstanding, and (c) all shares of Suniva common stock underlying outstanding Suniva stock options, Suniva restricted stock units and Suniva warrants will be deemed to be outstanding.
Current report
In connection with the Merger, the Company will seek the approval of its stockholders of, among other things, (a) the issuance of shares of the Company’s common stock in connection with the Merger on the terms and conditions set forth in the Merger Agreement, (b) if Suniva deems it advisable, an amendment and restatement of the Company’s amended certificate of incorporation, (c) if deemed necessary by the Company and Suniva, an amendment to the Company’s amended certificate of incorporation to effect a reverse stock split of all outstanding Company shares of common stock, (d) the conversion of certain secured insider/ related party debt to the Company’s common stock, and (e) an increase in the number of shares of the Company’s common stock reserved for issuance under the existing Company equity incentive plan of no less than 5% of the projected total post-Merger number of outstanding shares of the Company’s common stock. To the extent necessary or deemed appropriate, additional proposals may be added by the Company’s board of directors, which will be included in any prospectus/proxy statement relating to the special meeting of stockholders.
Current report
Each of the Company and Suniva has agreed to customary representations, warranties and covenants in the Merger Agreement, including, among others, covenants relating to (a) using commercially reasonable efforts to obtain the requisite approval of its stockholders, (b) non-solicitation of alternative acquisition proposals, (c) the conduct of their respective businesses during the period between the date of signing the Merger Agreement and the closing of the Merger,
Current report
(d) the Company using commercially reasonable efforts to maintain the existing listing of the Company’s common stock on The Nasdaq Capital Market and cause the shares of the Company’s common stock to be issued in connection with the Merger to be approved for listing on The Nasdaq Capital Market prior to the closing of the Merger and (e) the Company’s filing with the U.S. Securities and Exchange Commission (the “SEC”) and causing to become effective a registration statement to register the shares of the Company’s common stock to be issued in connection with the Merger (the “Registration Statement”).
Current report
Consummation of the proposed Merger is subject to certain closing conditions, including, among other things, (a) approval by the Company’s stockholders of the matters being put to their vote, (b) approval by the requisite Suniva stockholders of the adoption and approval of the Merger Agreement and the transactions contemplated thereby, (c) Nasdaq’s approval of the listing of the shares of the Company’s common stock to be issued in connection with the Merger, (d) the effectiveness of the Registration Statement, and (e) the Company’s net cash not being less than negative $1,500,000. Each party’s obligation to consummate the Merger is also subject to other specified customary conditions, including regarding the accuracy of the representations and warranties of the other party, subject to the applicable materiality standard, and the performance in all material respects by the other party of its obligations under the Merger Agreement required to be performed on or prior to the date of the closing of the Merger.
Current report
The Merger Agreement also contains customary termination rights of each of the Company and Suniva. Upon termination of the Merger Agreement under specified circumstances, the Company may be required to pay Suniva a termination fee of $1,000,000, and Suniva may be required to pay the Company a termination fee of $1,000,000. The Merger Agreement may be terminated if the Merger has not been consummated on or before January 30, 2027, subject to a potential sixty (60)-day extension in certain circumstances as set forth in the Merger Agreement. At the Effective Time, assuming consummation of the proposed Merger, the Board of Directors of SUNation is expected to consist of five members, all of whom will be designated by Suniva.
Current report
In connection with the proposed Merger between the Company and Suniva, the Company intends to file relevant materials with the SEC, including a registration statement on Form S-4 that will contain a proxy statement/prospectus of relating to the proposed Merger and containing the proposals to be voted upon by the shareholders of record as the date to be set forth therein.
Current report
Following submission of our SEC filings related to the proposed Merger, SUNATION ENERGY URGES INVESTORS AND STOCKHOLDERS TO READ THE REGISTRATION STATEMENT, PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS THAT MAY BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS, SUPPLEMENTS OR DOCUMENTS INCORPORATED BY REFERENCE IN OR TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT SUNATION, SUNIVA, THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors and stockholders will be able to obtain free copies of the proxy statement/prospectus and other documents filed by SUNation Energy with the SEC (when they become available) through the website maintained by the SEC at www.sec.gov. In addition, investors and stockholders should note that SUNation Energy communicates with investors and the public using its website (www.sunation.com) and the investor relations website (ir.sunation.com) where anyone will be able to obtain free copies of the proxy statement/prospectus and other documents filed by SUNation with the SEC and stockholders are urged to read the proxy statement/prospectus and the other relevant materials when they become available before making any voting or investment decision with respect to the proposed transaction.
Current report
Consolidated other (expense) income decreased by $7,285,626 to expense of $143,966 in the second quarter of 2026 as compared to $7,429,592 of expense in the second quarter of 2025. The decrease was primarily related to a $7,531,044 fair value remeasurement loss in the prior year, and $559,938 in financing fees in the prior year, partially offset by a $789,588 decrease in gain on fair value remeasurement of contingent forward contract.
Current report
Comparison of the Six Months Ended June 30, 2026 and 2025
Current report
Consolidated Results
Current report
Consolidated operating expenses decreased 17% to $11,233,785 in the first six months of 2026 as compared to $13,601,777 in the first six months of 2025. Consolidated selling, general and administrative expenses decreased $2,938,508, or 24%, to $9,544,519 in the first six months of 2026 from $12,483,027 in the first six months of 2025, due primarily to lower selling and marketing expenses on lower revenue and lower personnel costs on headcount reductions during the first half of 2026. Amortization expense remained flat at $1,118,750 in the first six months of 2026 as compared to the same period of the prior year. The Company incurred $570,516 in transaction costs during the first six months of 2026 related to the proposed Suniva Merger.
Current report
Consolidated operating loss in the first six months of 2026 was $7,513,015 as compared to $4,330,935 in the first six months of 2025. Net loss in the first six months of 2026 was $7,429,441, or $(1.86) per diluted share, compared to net loss of $13,103,847, or $ (8.42) per diluted share, in the first six months of 2025.
Current report
SUNation NY Operating Results
Current report
SUNation NY revenue decreased 46% or $8,836,895, to $10,528,508 in the first six months of 2026 as compared to $19,365,403 in first six months of 2025. Revenue in the first six monthss of 2026 and 2025 by type were as follows:
Current report
Selling, general and administrative expenses decreased 32% or $2,445,308 to $5,148,696 in 2026 (49% as a percentage of sales) as compared to $7,594,004 in 2025 (39% as a percentage of sales), due primarily to a decrease in selling and marketing expenses on lower residential contract revenue and lower personnel costs on headcount reductions during the first half of 2026. Amortization expense remained flat at $406,250 in 2026 as compared to 2025.
Current report
HEC Operating Results
Current report
HEC sales decreased 24%, or $1,507,561, to $4,827,928 in the first six months of 2026 as compared to $6,335,489 in the first six months of 2025. Sales in 2026 and 2025 by type were as follows:
Current report
Gross profit decreased 37% to $1,037,640 in the first six months of 2026 as compared to gross profit of $1,637,238 in the first six months of 2025 due primarily to the decrease in revenue and decrease in gross margin. Gross margin decreased to 21.5% in the first six months of 2026 compared to 25.8% in the first six months of 2025, driven by an increase in labor and overhead costs as a percentage of revenue.
Removed paragraphs (3)
Previous report
April 2026 Strategic Review Process
Previous report
The Company has not set a timetable for the completion of a strategic transaction, and there can be no assurance that the exploration of a strategic transaction will result in any specific outcome. The Company does not intend to provide additional updates regarding this process unless the Board approves a particular course of action or determines additional disclosure is appropriate.
Previous report
Consolidated operating expenses decreased 10% to $5,920,798 in the first quarter of 2026 as compared to $6,598,673 in the first quarter of 2025. Consolidated selling, general and administrative expenses decreased $677,875, or 11%, to
Reworded paragraphs (22)
Previous wording
On April 9, 2026, the Company announced that its Board of Directors has authorized the review of a full range of strategic alternatives aimed at increasing shareholder value and best positioning the Company for long-term success. In connection with the strategic review, the Company has engaged Maxim Group, LLC to serve as its M&A and financial advisor to assist in this strategic process. The review will consider a broad spectrum of possible actions, including, but not limited to, a potential sale of the Company, strategic merger or other business combinations, acquisitions, divestitures of assets, further optimization of the corporate structure, or other strategic or financial transactions that could enhance shareholder value and further optimize capital resources.
Current wording
On April 9, 2026, the Company announced that its Board of Directors, including the approval of the Board’s “Transaction Committee”, had authorized the formal review of a full range of strategic alternatives aimed at increasing shareholder value and best positioning the Company for long-term success. The Transaction Committee is comprised of independent members of the Board. In connection with the strategic review, the Company had engaged Maxim Group, LLC to serve as its M&A and financial advisor to assist in this strategic process. The review included the consideration of a broad spectrum of possible actions, including, but not limited to, a potential sale of the Company, strategic merger or other business combinations, acquisitions, divestitures of assets, further optimization of the corporate structure, or other strategic or financial transactions that could enhance shareholder value and further optimize capital resources.
Previous wording
Consolidated sales decreased $5,442,189, or 43.1% to $7,194,449 in the first quarter of 2026 from $12,636,638 in the first quarter of 2025, with a 53% decrease within residential contract revenue and a 3% decrease in service revenue, partially offset by a 15% increase in commercial revenue. On a consolidated basis, overall kilowatts installed on residential projects decreased 52%, revenue per residential installation increased 2% and the overall price per watt on residential projects decreased 6% in the first quarter of 2026 as compared to the first quarter of 2025. The overall decrease in residential revenue is driven by decreased customer demand due to the expiration of federal tax credits at December 31, 2025 under the passing of the One Big Beautiful Bill Act.
Current wording
Consolidated sales decreased $4,902,267, or 37.5% to $8,161,987 in the second quarter of 2026 from $13,064,254 in the second quarter of 2025, with a 48% decrease within residential contract revenue and a 3% decrease in service revenue, partially offset by a 23% increase in commercial revenue. On a consolidated basis, overall kilowatts installed on residential projects decreased 46%, revenue per residential installation decreased 5% and the overall price per watt on residential projects decreased 5% in the second quarter of 2026 as compared to the second quarter of 2025. The overall decrease in residential revenue is driven by decreased customer demand due to the expiration of federal tax credits at December 31, 2025 under the passing of the One Big Beautiful Bill Act.
Previous wording
Consolidated gross profit decreased to $1,591,248 in the first quarter of 2026 as compared to gross profit of $4,431,325 in the first quarter of 2025 due primarily to the decrease in revenue. Gross margin decreased to 22% during the first quarter of 2026 as compared to 35% in the first quarter of 2025 due to fixed costs in cost of sales not declining with the revenue decrease.
Current wording
Consolidated gross profit decreased to $2,129,522 in the second quarter of 2026 as compared to gross profit of $4,839,517 in the second quarter of 2025 due primarily to the decrease in revenue. Gross margin decreased to 26% during the second quarter of 2026 as compared to 37% in the second quarter of 2025 due to fixed costs in cost of sales not declining with the revenue decrease.
Previous wording
$5,361,423 in the first quarter of 2026 from $6,039,298 in the first quarter of 2025, due primarily to lower selling and marketing expenses on lower revenue and lower personnel costs on headcount reductions in the first quarter of 2026, partially offset by $531,503 in compensation expense related to the earnout liability as discussed in Note 6, Commitments and Contingencies Amortization expense remained flat at $559,375 in the first quarter of 2026 as compared to the same period of the prior year.
Current wording
Consolidated operating expenses decreased 24% to $5,312,988 in the second quarter of 2026 as compared to $7,003,104 in the second quarter of 2025. Consolidated selling, general and administrative expenses decreased $2,260,632, or 35%, to $4,183,097 in the second quarter of 2026 from $6,443,729 in the second quarter of 2025, due primarily to lower selling and marketing expenses on lower revenue and lower personnel costs on headcount reductions during the first half of 2026. Amortization expense remained flat at $559,375 in the second quarter of 2026 as compared to the same period of the prior year. The Company incurred $570,516 in transaction costs during the second quarter of 2026 related to the proposed Suniva Merger.
Previous wording
Consolidated operating loss in the first quarter of 2026 was $4,329,550 as compared to $2,167,348 in the first quarter of 2025. Net loss in the first quarter of 2026 was $4,090,614, or $ (1.20) per diluted share, compared to net loss of $3,496,432, or $(106.71) per diluted share, in the first quarter of 2025.
Current wording
Consolidated operating loss in the second quarter of 2026 was $3,183,466 as compared to $2,163,587 in the second quarter of 2025. Net loss in the second quarter of 2026 was $3,338,827, or $(0.52) per diluted share, compared to net loss of $9,607,415, or $(3.14) per diluted share, in the second quarter of 2025.
Previous wording
SUNation NY revenue decreased 46% or $4,390,712, to $5,153,843 in the first quarter of 2026 as compared to $9,544,554 in first quarter of 2025. Revenue in the first quarters of 2026 and 2025 by type were as follows:
Current wording
SUNation NY revenue decreased 45% or $4,446,184, to $5,374,665 in the second quarter of 2026 as compared to $9,820,849 in second quarter of 2025. Revenue in the second quarters of 2026 and 2025 by type were as follows:
Previous wording
Selling, general and administrative expenses decreased 27% or $1,050,229 to $2,797,271 in 2026 (54% as a percentage of sales) as compared to $3,847,500 in 2025 (40% as a percentage of sales), due primarily to decrease in selling and marketing expenses on lower residential contract revenue. Amortization expense remained flat at $203,125 in 2026 as compared to 2025.
Current wording
Selling, general and administrative expenses decreased 37% or $1,395,079 to $2,351,425 in 2026 (44% as a percentage of sales) as compared to $3,746,504 in 2025 (38% as a percentage of sales), due primarily to a decrease in selling and marketing expenses on lower residential contract revenue and lower personnel costs on headcount reductions during the first half of 2026. Amortization expense remained flat at $203,125 in 2026 as compared to 2025.
Previous wording
HEC sales decreased 34%, or $1,051,478, to $2,040,606 in the first quarter of 2026 as compared to $3,092,084 in the first quarter of 2025. Sales in 2026 and 2025 by type were as follows:
Current wording
HEC sales decreased 14%, or $456,083, to $2,787,322 in the second quarter of 2026 as compared to $3,243,405 in the second quarter of 2025. Sales in 2026 and 2025 by type were as follows:
Previous wording
Gross profit decreased 57% to $323,518 in the first quarter of 2026 as compared to gross profit of $758,743 in the first quarter of 2025 due primarily to the decrease in revenue and decrease in gross margin. Gross margin decreased to 15.9% in the first quarter of 2026 compared to 24.5% in the first quarter of 2025, driven by an increase in labor and overhead costs as a percentage of revenue.
Current wording
Gross profit decreased 19% to $714,122 in the second quarter of 2026 as compared to gross profit of $878,495 in the second quarter of 2025 due primarily to the decrease in revenue and decrease in gross margin. Gross margin decreased to 25.6% in the second quarter of 2026 compared to 27.1% in the second quarter of 2025, driven by an increase in labor and overhead costs as a percentage of revenue.
Previous wording
Selling, general and administrative expenses decrease 19% to $786,993 in the first quarter of 2026 (39% as a percentage of sales) as compared to $976,674 in the first quarter of 2025 (32% as a percentage of sales), due primarily to a decrease in general excise tax on lower revenue and personnel expenses on headcount reductions. Amortization expense remained flat at $356,250 in 2026 as compared to 2025.
Current wording
Selling, general and administrative expenses decrease 19% to $826,553 in the second quarter of 2026 (30% as a percentage of sales) as compared to $1,021,320 in the second quarter of 2025 (31% as a percentage of sales), due primarily to a decrease in general excise tax on lower revenue and personnel expenses on headcount reductions. Amortization expense remained flat at $356,250 in 2026 as compared to 2025.
Previous wording
Consolidated other income (expense) increased by $1,564,760 to income of $250,291 in the first quarter of 2026 as compared to $1,314,469 of expense in the first quarter of 2025. The increase was primarily related to a $437,791 decrease in interest expense and a $675,883 increase in gain on debt extinguishment, partially offset by a $109,492 decrease in gain on fair value remeasurement of contingent forward contract.
Current wording
Consolidated other income (expense) increased by $8,850,386 to income of $106,325 in the first six months of 2026 as compared to $8,744,061 of expense in the first six months of 2025. The decrease was primarily related to a $7,531,044 fair value remeasurement loss of the warranty liability in the prior year, a decrease of $1,136,532 in financing fees, a $675,883 increase in gain on debt extinguishment, a $441,446 decrease in interest expense, partially offset by a $899,080 decrease in gain on fair value remeasurement of contingent forward contract.
Previous wording
Residential contract revenue decreased $4,501,090, or 57%, due to a 57% decrease in number of systems installed, 54% decrease in kilowatts installed and a 7% decrease in revenue per install. This overall decrease is due partially to the decreased customer demand with the expiration of federal tax credits at December 31, 2025 under the passage of the One Big Beautiful Bill Act, along with a decrease in available install days due to weather-related events during the quarter. The weather-related events during the first quarter of 2026 resulted in 13.5 less available days to complete installations as compared to the same period of the prior year. Commercial contract revenue increased $71,418, or 6%. Service revenue increased $38,961, or 10%, due to an increase in battery installations.
Current wording
Residential contract revenue decreased $9,494,831, or 60%, due to a 59% decrease in number of systems installed, 55% decrease in kilowatts installed and an 8% decrease in revenue per install. This overall decrease is due partially to the decreased customer demand with the expiration of federal tax credits at December 31, 2025 under the passage of the One Big Beautiful Bill Act, along with a decrease in available install days due to weather-related events during the first half of the year. The weather-related events during the first six months of 2026 resulted in 17 less available days to complete installations as compared to the same period of the prior year. Commercial contract revenue increased $476,791, or 19%. Service revenue increased $181,145, or 20%, due primarily to an increase in remove and reinstall projects and battery installations.
Previous wording
Gross profit decreased 65% to $1,267,730 in the first quarter of 2026 as compared to gross profit of $3,672,582 in the first quarter of 2025 due primarily to the decrease in revenue and additional decrease in gross margin. Gross margin decreased to 24.6% in 2026 compared to 38.5% in 2025 due primarily to fixed labor and overhead costs that did not decrease at the same rate as the revenue decline.
Current wording
Gross profit decreased 65% to $2,683,130 in the first six months of 2026 as compared to gross profit of $7,633,604 in the first six months of 2025 due primarily to the decrease in revenue and additional decrease in gross margin. Gross margin decreased to 25.5% in 2026 compared to 39.4% in 2025 due primarily to fixed labor and overhead costs that did not decrease at the same rate as the revenue decline.
Previous wording
Residential contract sales decreased $1,114,423, or 41%, due to a 38% decrease in kilowatts installed, a 54% decrease in installations, partially offset by a 46% increase in battery attachment rates, which is driving a 27% increase in average revenue per system installed. In May 2025, Hawaii implemented a new Bring Your Own Device Plus (“BYOD Plus”) program. Under this program, customers were paid a cash incentive and provided energy bill credits to add energy storage to an existing or new rooftop solar system. The overall decrease in residential installations is due to the expiration of federal tax credits at December 31, 2025 under the passage of the One Big Beautiful Bill Act. Service revenue decreased $63,191, or 18%, due to a decrease in repair and replacement installations.
Current wording
Residential contract sales decreased $1,315,803, or 24%, due to a 28% decrease in kilowatts installed and a 36% decrease in installations, partially offset by a 38% increase in battery attachment rates, which is driving a 15% increase in average revenue per system installed. In May 2025, Hawaii implemented a new Bring Your Own Device Plus (“BYOD Plus”) program. Under this program, customers were paid a cash incentive and provided energy bill credits to add energy storage to an existing or new rooftop solar system. The overall decrease in residential installations is due to the expiration of federal tax credits at December 31, 2025 under the passage of the One Big Beautiful Bill Act. Service revenue decreased $228,633, or 31%, due to a decrease in repair and replacement installations.
Previous wording
As of March 31, 2026, the Company had $1,686,605 in cash, restricted cash and cash equivalents. Of this amount, $670,409 was invested in short-term money market funds that are not considered to be bank deposits and are not insured or guaranteed by the Federal Deposit Insurance Corporation or other government agency. These money market funds seek to preserve the value of the investment at $1.00 per share; however, it is possible to lose money investing in these funds. The remainder in cash and cash equivalents is operating cash.
Current wording
As of June 30, 2026, the Company had $3,061,222 in cash, restricted cash and cash equivalents. Of this amount, $675,258 was invested in short-term money market funds that are not considered to be bank deposits and are not insured or guaranteed by the Federal Deposit Insurance Corporation or other government agency. These money market funds seek to preserve the value of the investment at $1.00 per share; however, it is possible to lose money investing in these funds. The remainder in cash and cash equivalents is operating cash.
Previous wording
The Company had working capital deficit of $(3,509,756) at March 31, 2026, consisting of current assets of $9,049,534 and current liabilities of $12,559,290 compared to working capital of $1,066,408 at December 31, 2025.
Current wording
The Company had working capital deficit of $(3,223,953) at June 30, 2026, consisting of current assets of $10,549,361 and current liabilities of $13,773,314 compared to working capital of $1,066,408 at December 31, 2025.
Previous wording
Cash used in operating activities was $5,164,097 in the first three months of 2026 as compared to $3,403,349 in the same period of 2025. The increase in negative cash flow from operations is primarily driven by the increase in the net loss and an increase in payments against accounts payable. Significant working capital changes in the three months ended March 31, 2026 included a decrease of accounts payable of $2,782,565, an decrease in other assets of $1,273,206, and a decrease in accounts receivable of $942,875.
Current wording
Cash used in operating activities was $6,264,594 in the first six months of 2026 as compared to $3,533,533 in the same period of 2025. The increase in negative cash flow from operations is primarily driven by the increase in the net loss and an increase in payments against accounts payable. Significant working capital changes in the six months ended June 30, 2026 included a decrease of accounts payable of $2,791,040, a decrease in accounts receivable of $1,027,851, and a decrease in other assets of $857,855.
Previous wording
Net cash provided by investing activities was $2,700 in the first three months of 2026.
Current wording
Net cash provided by investing activities was $1,200 in the first six months of 2026.
Previous wording
Net cash used in financing activities was $334,342 in the first three months of 2026 compared to $3,992,231 provided by in the same period of 2025. Net cash used in financing activities in the first three months of 2026 was related to $1,134,342 in payments against loans payable and related party loans payable, including the settlement of the debt with a former SUNation NY shareholder, partially offset by $800,000 in borrowings against the related party line of credit. Net cash provided by financing activities in the first three months of 2025 wasdue to $13,431,902 in net proceeds from the issuance of common stock under a registered direct offering and $351,372 in proceeds from the issuance of common stock under the at-the-market offering, partially offset by $9,401,939 in payments against loans payable and $389,104 in payments of contingent consideration.
Current wording
Net cash provided by financing activities was $2,142,272 in the first six months of 2026 compared to $5,864,389 provided by in the same period of 2025. Net cash provided by financing activities in the first six months of 2026 was related to $2,700,700 in proceeds from the issuance of common stock under a PIPE offering and $800,000 in borrowings against the related party line of credit, partially offset by $1,164,673 in payments against loans payable and related party loans payable, including the settlement of the debt with a former SUNation NY shareholder and $254,359 in equity issuance costs. Net cash provided by financing activities in the first sx months of 2025 wasdue to $17,871,964 in net proceeds from the issuance of common stock under a registered direct offering and $351,372 in proceeds from the issuance of common stock under the at-the-market offering, partially offset by $9,552,943 in payments against loans payable, $2,500,000 in payments of contingent consideration, and $267,391 in payments for the termination of warrants.
Previous wording
In connection with the SUNation NY acquisition, on November 9, 2022, the Company issued a $5,486,000 Long-Term Promissory Note(the “Long-Term Note”). The Long-Term Note was unsecured and matured on November 9, 2025. It carried an annual interest rate of 4% until the first anniversary of issuance, then 8% thereafter until the Long-Term Note was paid in full. The Company was required to make a principal payment of $2.74 million on the second anniversary of the Long-Term Note. The Long-Term Note may be prepaid at our option at any time without penalty. On April 10, 2025, the Long-Term Note was amended and restated whereby the principal amount of $5,486,000 previously due and payable under the original Long-Term Note, together with all accrued and unpaid interest owing thereunder, shall be due and payable on May 1, 2028, and such amended note became a senior secured instrument. Principal and interest payments under the amended Long-Term Note are payable monthly on the first day of each month commencing on June 1, 2025 for thirty-six consecutive months thereafter. Additionally, pursuant to the terms of that certain Senior Secured Contingent Note Instrument, entered into on April 10, 2025, the unearned 2024 earnout was rescheduled and is based on the earnout terms set forth therein pursuant to the financial conditions and terms covering each of fiscal years 2024 and 2025 and, if attained, shall be payable in fiscal year 2026, which payment is further conditioned on the continued employment of the note holders at the time of such earnout payment trigger date. See also Note 14, Subsequent Events, related to the conversion of $1,200,000 of debt into equity in April 2026, which reduced the Long-Term Note obligations thereunder.
Current wording
In connection with the SUNation NY acquisition, on November 9, 2022, the Company issued a $5,486,000 Long-Term Promissory Note(the “Long-Term Note”). The Long-Term Note was unsecured and matured on November 9, 2025. It carried an annual interest rate of 4% until the first anniversary of issuance, then 8% thereafter until the Long-Term Note was paid in full. The Company was required to make a principal payment of $2.74 million on the second anniversary of the Long-Term Note. The Long-Term Note may be prepaid at our option at any time without penalty. On April 10, 2025, the Long-Term Note was amended and restated whereby the principal amount of $5,486,000 previously due and payable under the original Long-Term Note, together with all accrued and unpaid interest owing thereunder, shall be due and payable on May 1, 2028, and such amended note became a senior secured instrument. Principal and interest payments under the amended Long-Term Note are payable monthly on the first day of each month commencing on June 1, 2025 for thirty-six consecutive months thereafter. Additionally, pursuant to the terms of that certain Senior Secured Contingent Note Instrument, entered into on April 10, 2025, the unearned 2024 earnout was rescheduled and is based on the earnout terms set forth therein pursuant to the financial conditions and terms covering each of fiscal years 2024 and 2025 and shall be payable in fiscal year 2026. On April 14, 2026 the Company entered into a debt conversion agreement in the aggregate amount of $1,200,000 of related party debt into restricted common stock, which reduced the Long-Term Note obligations thereunder.
Previous wording
Based on the Company’s current financial position, and the Company’s forecasted future cash flows for twelve months beyond the date of issuance of these financial statements, substantial doubt exists around the Company’s ability to continue as a going concern for a reasonable period of time. As noted in Notes 6, 9 and 14, the Company raised capital and satisfied and reduced certain outstanding debt obligations during 2025 and 2026; however, there remains uncertainty related to our future cash flows as it relies on the ability to generate enough cash flow from its operating segments to cover the Company’s corporate overhead costs.
Current wording
Based on the Company’s current financial position, and the Company’s forecasted future cash flows for twelve months beyond the date of issuance of these financial statements, substantial doubt exists around the Company’s ability to continue as a going concern for a reasonable period of time. As noted in Notes 6 and 9, the Company raised capital and satisfied and reduced certain outstanding debt obligations during 2025 and 2026; however, there remains uncertainty related to our future cash flows as it relies on the ability to generate enough cash flow from its operating segments to cover the Company’s corporate overhead costs.
Previous wording
As a result, the Company requires additional funding and seeks to raise capital through sources that may include public or private equity offerings, debt financings and/or strategic alliances. On February 27, 2025, the Company entered into a securities purchase agreement with certain institutional investors for the purchase and sale of an aggregate of $20.0 million in securities, with $15.0 million in gross proceeds in the first closing on February 27, 2025 and $5.0 million in gross proceeds in the second closing on April 7, 2025. The Company was able to use the proceeds to pay off approximately $12.6 million in 2025 in outstanding debt and contingent liability obligations and since April 2025, the Company has further reduced certain debt obligations. However, it has not been sufficient to cover all of the Company’s current and future obligations. Additional funding or other financing structures may not be available on terms acceptable to the Company, or at all. If the Company is unable to raise additional funds, or further restructure remaining debt obligations, it would have a negative impact on the Company’s business, results of operations and financial condition. To the extent that additional funds are raised through the sale of equity or securities convertible into or exercisable for equity securities, the issuance of securities will result in dilution to the Company’s shareholders.
Current wording
As a result, the Company requires additional funding and seeks to raise capital through sources that may include public or private equity offerings, debt financings and/or strategic alliances. On February 27, 2025, the Company entered into a securities purchase agreement with certain institutional investors for the purchase and sale of an aggregate of $20.0 million in securities, with $15.0 million in gross proceeds in the first closing on February 27, 2025 and $5.0 million in gross proceeds in the second closing on April 7, 2025. The Company was able to use the proceeds to pay off approximately $12.6 million in 2025 in outstanding debt and contingent liability obligations and since April 2025, the Company has further reduced certain debt obligations. However, it has not been sufficient to cover all of the Company’s current and future obligations. Additional funding or other financing structures may not be available on terms acceptable to the Company, or at all. On June 9, 2026, the Company also closed on a private placement financing involving the issuance of 2,390,000 shares of common stock on an at market price basis (with no price or other reset features) in the aggregate gross amount of $2,700,700, before deducting placement agent fees and expenses. The use of the proceeds of the June 2026 private placement are for working capital and operating expenses.
Rearranged current paragraphs (8)
Current report — wording carried from elsewhere
Residential contract revenue decreased $4,993,742, or 62%, due to a 59% decrease in number of systems installed, 55% decrease in kilowatts installed and an 8% decrease in revenue per install. This overall decrease is due partially to the decreased customer demand with the expiration of federal tax credits at December 31, 2025 under the passage of the One Big Beautiful Bill Act. Commercial contract revenue increased $405,373, or 32%. Service revenue increased $142,185, or 26%, due primarily to an increase in remove and reinstall projects.
Current report — wording carried from elsewhere
Gross profit decreased 64% to $1,415,400 in the second quarter of 2026 as compared to gross profit of $3,961,022 in the second quarter of 2025 due primarily to the decrease in revenue and additional decrease in gross margin. Gross margin decreased to 26.3% in 2026 compared to 40.3% in 2025 due primarily to fixed labor and overhead costs that did not decrease at the same rate as the revenue decline.
Current report — wording carried from elsewhere
Residential contract sales decreased $201,380, or 7%, due to a 9% decrease in kilowatts installed and a 16% decrease in installations, , partially offset by a 28% increase in battery attachment rates, which is driving a 10% increase in average revenue per system installed. In May 2025, Hawaii implemented a new Bring Your Own Device Plus (“BYOD Plus”) program. Under this program, customers were paid a cash incentive and provided energy bill credits to add energy storage to an existing or new rooftop solar system. The overall decrease in residential installations is due to the expiration of federal tax credits at December 31, 2025 under the passage of the One Big Beautiful Bill Act. Service revenue decreased $165,442, or 44%, due to a decrease in repair and replacement installations.
Current report — wording carried from elsewhere
The following table summarizes our consolidated results for the six months ended June 30, 2026 and 2025:
Current report — wording carried from elsewhere
Consolidated sales decreased $10,344,456, or 40.2% to $15,356,436 in the first six months of 2026 from $25,700,892 in the first six months of 2025, with a 51% decrease within residential contract revenue and a 3% decrease in service revenue, partially offset by a 19% increase in commercial revenue. On a consolidated basis, overall kilowatts installed on residential projects decreased 49%, revenue per residential installation decreased 3% and the overall price per watt on residential projects decreased 6% in the first six months of 2026 as compared to the first six months of 2025. The overall decrease in residential revenue is driven by decreased customer demand due to the expiration of federal tax credits at December 31, 2025 under the passing of the One Big Beautiful Bill Act.
Current report — wording carried from elsewhere
Consolidated gross profit decreased to $3,720,770 in the first six months of 2026 as compared to gross profit of $9,270,842 in the first six months of 2025 due primarily to the decrease in revenue. Gross margin decreased to 24% during the first six months of 2026 as compared to 36% in the first six months of 2025 due to fixed costs in cost of sales not declining with the revenue decrease.
Current report — wording carried from elsewhere
Selling, general and administrative expenses decreased 19% to $1,613,546 in the first six months of 2026 (33% as a percentage of sales) as compared to $1,997,994 in the first six months of 2025 (32% as a percentage of sales), due primarily to a decrease in general excise tax on lower revenue and personnel expenses on headcount reductions. Amortization expense remained flat at $712,500 in 2026 as compared to 2025.
Current report — wording carried from elsewhere
If the Company is unable to raise additional funds, or further restructure remaining debt obligations, it would have a negative impact on the Company’s business, results of operations and financial condition. To the extent that additional funds are raised through the sale of equity or securities convertible into or exercisable for equity securities, the issuance of securities will result in dilution to the Company’s shareholders.