SolarMax Technology, Inc.
For the period ended Jun 30, 2025. Filed Aug 14, 2025.
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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, 2025 · Filed Aug 14, 2025
SMXT$3.80+0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-16.
0001640334-25-000889
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-14.
0001640334-25-001506
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 118 previous paragraphs and 122 current paragraphs.
67 unchanged; 45 reworded; 7 added; 5 removed; 1 previous and 3 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 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 (7)
Current report
The federal residential solar tax credit, officially known as the Residential Clean Energy Credit, is set to expire on December 31, 2025. This means that homeowners who have solar energy systems installed and placed into service by this date will still qualify for a 30% federal tax credit on the cost of the system. After December 31, 2025, there will be no federal tax credit available for new residential solar installations. This represents a significant change from the previous plan laid out in the Inflation Reduction Act, which would have seen the credit gradually phase out until it expired in 2034. This change in the tax law may significantly reduce the incentive of residential users to install solar systems.
Current report
On July 31, 2025, we entered into an engineering, procurement and construction agreement (the “EPC Contract”) with Longfellow BESS I LLC (“Longfellow”), a Texas limited liability company, to develop a battery energy storage system (“BESS”) facility. The contract is expected to generate revenues of approximately $127.3 million. Longfellow will own and operate the facility, which will be located in Pecos County, Texas and is expected to have a storage capacity of 430 megawatt-hours. Completion of the BESS facility is targeted for June 2026, although we cannot assure you that this completion date will be met. To the extent that our costs for the project increase as a result of tariffs, supply chain issues or other factors, any change in the price of the project would be subject to the approval of Longfellow. To the extent that we cannot adjust our prices to reflect such additional costs, our gross margin on the project will be impacted. We will have an 8% membership interest in Longfellow. Our capital contribution in the amount of $5,000,000 is due no later than December 31, 2025.
Current report
Three and Six Months Ended June 30, 2025 and 2024
Current report
Gain (loss) on debt extinguishment
Current report
For the three and six months ended June 30, 2025, our loss on debt extinguishment was $314,000 and relates to the exchange of the $900,000 unsecured loan to shares of our common stock because the purchase price for the shares is less than its fair market value.
Current report
No EB-5 notes were exchanged during the three and six months ended June 30, 2025. The gain on debt extinguishment for the three months ended June 30, 2024 was $222,000 and for the six months ended June 30, 2024 was $276,000. The gain on debt extinguishment related to the exchange of 3% notes to a related party for secured convertible 4% notes to limited partners of the related party. The limited partners are not related parties.
Current report
During the six months ended June 30, 2025, other income, net was $129,000 consisting primarily of $228,000 foreign currency transaction gains for our United States segment intercompany receivable denominated in the Chinese currency, offset with a loss on a solar asset disposal in the United States segment of $65,000 and a foreign currency elimination adjustment of $37,000. During the six months ended June 30, 2024, other expense was $306,000, consisting of $291,000 of foreign currency transaction loss for our United States segment intercompany receivable denominated in the Chinese currency, a $30,000 loss associated with the write-off of legal settlement receivable as a result of the debtor's bankruptcy, and a gain on disposal of property in the amount of $14,000.
Removed paragraphs (5)
Previous report
Management believes participation in the dealer network enhances the Company’s competitive position and customer acquisition capabilities.
Previous report
*The percentage is not applicable since the change is from a negative gross profit to a positive gross profit.
Previous report
Gain on debt extinguishment
Previous report
No EB-5 notes were exchanged during the three months ended March 31, 2025. Gain on debt extinguishment for the three months ended March 31, 2024 was $54,000, representing the gain on exchange of EB-5 notes in the principal amount of $2,000,000 for convertible notes in the same principal amount.
Previous report
The 2,136,907 shares were issued at a 25% discount to the market price at the time of the investment. No broker was involved in these transactions.
Reworded paragraphs (45)
Previous wording
Recent changes in U.S. trade policy have resulted in the implementation of tariffs on certain imported goods, particularly those manufactured in China and other countries. These tariffs have increased the cost of certain raw materials and components used in our products. While we have taken steps to mitigate the impact, including working with suppliers and adjusting our pricing strategy, the tariffs are expected to have resulted in higher input costs for our operations for the remainder of 2025. For the three months ended March 31, 2025, the tariffs did not have material effects on our cost of revenue.
Current wording
Recent changes in U.S. trade policy have resulted in the implementation or threatened implementation of tariffs on certain imported goods, particularly those manufactured in China and other countries. These tariffs have increased the cost of certain raw materials and components used in our products. While we have taken steps to mitigate the impact, including working with suppliers and adjusting our pricing strategy, the tariffs are expected to result in higher input costs for our operations for the remainder of 2025. For the six months ended June 30, 2025, the tariffs did not have material effects on our cost of revenue.
Previous wording
Inflation and Supply Chain Issues
Current wording
Regulatory Changes, Inflation and Supply Chain Issues
Previous wording
Compensation costs per employee, excluding stock-based compensation, for sales, marketing and administrative personnel in our United States segment decreased approximately 11% for the three months ended March 31, 2025 compared to the same period in 2024. The decrease in 2025 reflected the lay-off of a portion of our employees resulting from a slowdown after we had completed installation of the increased 2023 backlog resulting orders placed in 2023 in advance of NEM 3.0 becoming effective in April 2023, as discussed below under “Effects of NEM 3.0.” The increase in 2023 also reflected the increased cost of retaining and attracting talent, and such costs may continue to increase as labor costs in California continue to increase as a result of the inflationary pressures. In addition, to the extent that inflationary pressure affects our cost of revenue and general overhead, we may face the choice of raising prices to try and maintain our margins or reduce or maintain our price structure to meet competition which would resulting in a lower gross margin and a drop in operating income. Supply chain issues have caused us to periodically stock up on components such as solar panels and battery systems to ensure an adequate supply to meet expected demand, putting pressure on our cash flow. We do not believe that the supply chain issues that affected our operations in prior periods are currently affecting us. We cannot assure you that such delays and increased costs will not affect our business in the future.
Current wording
Compensation costs per employee, excluding stock-based compensation, for sales, marketing and administrative personnel in our United States segment decreased approximately 11% for the six months ended June 30, 2025 compared to the same period in 2024. The decrease in 2025 reflected the lay-off of a portion of our employees resulting from a slowdown after we had completed installation of the increased 2023 backlog resulting orders placed in 2023 in advance of NEM 3.0 becoming effective in April 2023, as discussed below under “Effects of NEM 3.0.” The increase in 2023 also reflected the increased cost of retaining and attracting talent, and such costs may continue to increase as labor costs in California continue to increase as a result of the inflationary pressures. In addition, to the extent that inflationary pressure affects our cost of revenue and general overhead, we may face the choice of raising prices to try and maintain our margins or reduce or maintain our price structure to meet competition which would result in a lower gross margin and a drop in operating income. Supply chain issues have caused us to periodically stock up on components such as solar panels and battery systems to ensure an adequate supply to meet expected demand, putting pressure on our cash flow. We do not believe that the supply chain issues that affected our operations in prior periods are currently affecting us. We cannot assure you that such delays and increased costs will not affect our business in the future.
Previous wording
During the years 2015 to 2019, we granted shares of restricted stock and incentive stock options to employees and consultants, of which 264,650 shares of restricted stock and incentive stock options to purchase 5,898,137 shares were outstanding at the date of our initial public offering. Under the terms of the restricted stock and incentive stock options, the restricted stock and options became vested and non-forfeitable upon the completion of our initial public offering, which occurred on February 12, 2024, the effective date of the registration statement relating to our initial public offering. Under GAAP, upon the completion of the initial public offering, the value of the restricted stock and the incentive stock options is treated as compensation expense in the period in which the restricted stock and incentive stock options become non-forfeitable and are deemed to have met the performance-based indicator (i.e., the completion of the initial public offering). Using the Black Scholes valuation method, the fair value of the incentive stock options at the time of the Company’s initial public offering was approximately $18.5 million, which is stock-based compensation that does not reflect a cash expense, of which approximately $1.3 million is included in cost of revenues and $15.9 million is included in general and administrative expense in the three months ended March 31, 2024.
Current wording
During the years 2015 to 2019, we granted shares of restricted stock and incentive stock options to employees and consultants, of which 264,650 shares of restricted stock and incentive stock options to purchase 5,898,137 shares were outstanding at the date of our initial public offering. Under the terms of the restricted stock and incentive stock options, the restricted stock and options became vested and non-forfeitable upon the completion of our initial public offering, which occurred on February 12, 2024, the effective date of the registration statement relating to our initial public offering. Under GAAP, upon the completion of the initial public offering, the value of the restricted stock and the incentive stock options is treated as compensation expense in the period in which the restricted stock and incentive stock options become non-forfeitable and are deemed to have met the performance-based indicator (i.e., the completion of the initial public offering). Using the Black Scholes valuation method, the fair value of the incentive stock options at the time of the Company’s initial public offering was approximately $18.5 million, which is stock-based compensation that does not reflect a cash expense, of which approximately $1.3 million is included in cost of revenues and $15.9 million is included in general and administrative expense in the six months ended June 30, 2024.
Previous wording
We are seeking to offset our decline in residential solar sales in California for the year ended December 31, 2024 as compared with the year ended December 31, 2023 by marketing commercial sales of larger systems to commercial users both in California and in other states; however, we cannot assure you that we will be successful in marketing to commercial users. As of the date of this report, we do not have any contacts for major commercial solar projects. Although we have a non-binding letter of intent with respect to one proposed project and a non-binding term sheet with respect to a second proposed project, both of these proposed projects are subject to the negotiation of development agreements with the owners of the property on which the solar system is to be installed, the identification of a financing source to provide the full financing for each project, the negotiation and execution of an agreement with the financing sources, who would own the project on completion, and the negotiation and execution of a power purchase agreement between the property owner (and in the case of one of these projects, the tenant) and the financing source as the project owner for the purchase of the electricity generated by the project. We cannot assure you that either of these projects or any other projects will be completed or that we will be successful in developing our commercial business as planned.
Current wording
We are seeking to offset our decline in residential solar sales in California for the year ended December 31, 2024 as compared with the year ended December 31, 2023 and the anticipated continued decline as a result of expiration of the federal residential solar tax credit on December 31, 2025 by marketing commercial sales of larger systems to commercial users both in California and in other states; however, we cannot assure you that we will be successful in marketing to commercial users.
Previous wording
In the fourth quarter of 2023, we began to work with several independent dealers. Our dealer network is comprised of independent licensed sales companies that sell our products pursuant to non-exclusive agreement. The dealers sell our products as well as products sold by our competitors. The dealer handles the sales process, and once the sales agreement with the customer is signed, we install the solar system pursuant to an installation agreement with customer. The dealers earn a commission which is included in cost of revenue.
Current wording
In the fourth quarter of 2023, we began to work with several independent dealers which form our dealer network. Our dealer network is comprised of independent licensed sales companies that sell our products pursuant to non-exclusive agreement. The dealers sell our products as well as products sold by our competitors. The dealer handles the sales process, and once the sales agreement with the customer is signed, we install the solar system pursuant to an installation agreement with customer. The dealers earn a commission which is included in cost of revenue.
Previous wording
Although sales through the dealer network were nominal during the year ended December 31, 2023, during the three months ended March 31, 2025 and 2024, approximately 57% and 13% of total sales, respectively, were through the dealer network program.
Current wording
Although we had nominal sales through the dealer network prior to 2024, during the six months ended June 30, 2025 and 2024, approximately 48% and 11%, respectively, of our revenues were generated through the dealer network program. We believe that our participation in the dealer network enhances our ability to attract customers.
Previous wording
The following tables set forth information relating to our operating results for the three months ended March 31, 2025 and 2024 (dollars in thousands) and as a percentage of revenue:
Current wording
The following tables set forth information relating to our operating results for the three and six months ended June 30, 2025 and 2024 (dollars in thousands) and as a percentage of revenue:
Previous wording
The following table set forth information relating to our revenue and gross profit results for the three months ended March 31, 2025 and 2024 (dollars in thousands):
Current wording
The following table set forth information relating to our revenue and gross profit results for the three and six months ended June 30, 2025 and 2024 (dollars in thousands):
Previous wording
Revenues for the three months ended March 31, 2025 were $6.9 million, an increase of $1.2 million or 20.2% from $5.8 million in the three months ended March 31, 2024. The increase resulted from a $1.2 million increase in solar energy and battery sales, a $41,000 increase in LED sales, offset by a $30,000 decrease in financing revenue. Our revenue from solar systems increased from $4.6 million for the three months ended March 31, 2024 to $5.8 million for the three months ended March 31, 2025, a 24.8% increase. Our revenues in the three months ended March 31, 2024 were negatively impacted by unusually frequent and heavy rains in California, which affected our ability to complete the installation of solar systems as well as the effect of the adoption of NEM 3.0, which resulted in an increase in solar revenue in 2023 as homeowners purchased solar systems in anticipation of the effectiveness of NEM 3.0, which also resulted in a decrease in solar revenue in 2024. We did not experience the level of rainfalls in the three months ended March 31, 2025, coupled with our ability to increase solar revenue from our dealer network, which resulted in the increase in sales of both the solar energy systems and batteries. The increase in the solar energy and battery sales in the three months ended March 31, 2025 reflects a 15.0% increase in the number of systems completed and a 20.7% increase in the wattages deployed. During the three months ended March 31, 2025 and 2024, our battery sales were $328,000 and $234,000, respectively. Battery sales refer to the sale of batteries sold other than as a part of a solar system.
Current wording
Revenues for the six months ended June 30, 2025 were $13.8 million, an increase of $3.6 million or 35.2% from $10.2 million in the six months ended June 30, 2024. The increase resulted from a $3.9 million increase in solar energy and battery sales, offset by a 267,000 decrease in LED sales and a $42,000 decrease in financing revenue. Our revenue from solar systems increased from $7.8 million for the six months ended June 30, 2024 to $11.7 million for the six months ended June 30, 2025, a 50.3% increase. Our revenues in the six months ended June 30, 2024 were negatively impacted by unusually frequent and heavy rains in California in the first quarter of 2024, which affected our ability to complete the installation of solar systems as well as the effect of the adoption of NEM 3.0 in April 2024, which resulted in a temporary surge resulting in an increase in solar revenue in 2023 as homeowners purchased solar systems prior to the effectiveness of NEM 3.0. We did not experience the level of rainfalls in the first quarter of 2025, coupled with our ability to increase solar revenue from our dealer network program, which resulted in the increase in sales of both the solar energy systems and batteries. The increase in the solar energy and battery sales in the six months ended June 30, 2025 reflects a 48.2% increase in the number of systems completed and a 37.8% increase in the wattages deployed. During the six months ended June 30, 2025 and 2024, our battery sales were $1.2 million and $608,000, respectively. Battery sales refer to the sale of batteries sold other than as a part of a solar system.
Previous wording
As a result of the continued high interest rate environment, we expect the revenue from our residential sales to grow modestly in 2025 through our expansion of the dealer network program, but we are looking to offset the potential residential decrease with commercial sales and sales to residential customers through third party leasing companies which may be able to offer favorable terms to customers when compared with third party financing.
Current wording
As a result of the continued high interest rate environment and the anticipated expiration of the federal residential solar tax credit on December 31, 2025, we expect the revenue from our residential sales to grow modestly in 2025 through our expansion of the dealer network program compared to the prior period. We are also looking to offset the potential residential sales decrease with commercial sales and sales of industrial scale projects. On July 31, 2025, we entered into an EPC Contract with Longfellow to develop a battery energy storage system (“BESS”) facility. The contract is expected to generate revenues of approximately $127.3 million for us and is expected to be completed by June 2026.
Previous wording
During the three months ended March 31, 2025 and continuing through the date of this quarterly report, we did not generate any revenue in the China segment because there are no projects under construction and we have not been able to negotiate new contracts with SPIC since the last project, which was completed in June 2021. As a result of the ongoing geopolitical conditions and economic downturn in China and the deterioration of trade relations between the United States and China, we do not expect to be in the position to negotiate any new projects with SPIC or with any new customers for the remainder of 2025. In the event that we believe that we will not be able to operate profitably in China, we may find it necessary to discontinue our China segment.
Current wording
During the three months ended June 30, 2025 and continuing through the date of this quarterly report, we did not generate any revenue in the China segment because there are no projects under construction and we have not been able to negotiate new contracts with SPIC or any other Chinese potential customer since the last project, which was completed in June 2021. As a result of the ongoing geopolitical conditions and economic downturn in China and the deterioration of trade relations between the United States and China, we do not expect to be in the position to negotiate any new projects with SPIC or with any new customers for the remainder of 2025. In the event that we believe that we will not be able to operate profitably in China, we may find it necessary to discontinue our China segment.
Previous wording
Our LED revenue increased by $41,000 or 4.0% to $1.1 million for the three months ended March 31, 2025 from $1.0 million for the three months ended March 31, 2024, primarily resulting from the increase in the number of LED projects. LED revenues include LED product sales and LED consulting revenues and are expected to continue to fluctuate based on the number of LED projects awarded which is based on the bidding process and specific customer purchase requirements and timing. Revenue from our LED business tends to fluctuate period to period.
Current wording
Our LED revenue decreased by $319,000 or 25.9% to $911,000 for the three months ended June 30, 2025 from $1.2 million for the three months ended June 30, 2024, and by $278,000, or 12.4%, to $2.0 million for the six months ended June 30, 2025 from $2.2 million for the six months ended June 30, 2024, primarily resulting from the decrease in the number of LED projects with a higher sales price. LED revenues include LED product sales and LED consulting revenues which are expected to continue to fluctuate based on the number of LED projects awarded which is based on the bidding process and specific customer purchase requirements and timing. Revenue from our LED business tends to fluctuate period to period.
Previous wording
We have not originated any loans to our solar customers since early 2020. As a result, our finance revenue for the three months ended March 31, 2025 and 2024 was $72,000 and $102,000, respectively, from our portfolio of solar loans. Finance revenue decreases as loans in our portfolio are paid and not replaced by new loans.
Current wording
We have not originated any loans to our solar customers since early 2020. As a result, our finance revenue for the three months ended June 30, 2025 and 2024 was $81,000 and $93,000, respectively, and for the six months ended June 30, 2025 and 2024 was $153,000 and $195,000, respectively, from our portfolio of solar loans. Finance revenue decreases as loans in our portfolio are paid and not replaced by new loans.
Previous wording
Our cost of revenue for the three months ended March 31, 2025 was $5.5 million, a decrease of $720,000, or 11.6% from $6.2 million for the three months ended March 31, 2024. During the three months ended March 31, 2024, we recognized a one-time non-cash stock-based compensation expense of approximately $1.3 million in cost of revenue as a result of performance options vesting upon our initial public offering in the first quarter of 2024. Excluding this one-time stock-based compensation expense cost of revenue increased 11.0% from $5.0 million in the three months ended March 31, 2024 to $5.5 million in the three months ended March 31, 2025, primarily driven by the corresponding increase in sales revenue of 24%.
Current wording
Our cost of revenue for the three months ended June 30, 2025 was $6.3 million, a increase of $2.4 million, or 62.4% from $3.9 million for the three months ended June 30, 2024. Our cost of revenue for the six months ended June 30, 2025 was $11.8 million, an increase of $1.7 million, or 16.8% from $10.1 million for the six months ended June 30, 2024. During the six months ended June 30, 2024, we recognized a one-time non-cash stock-based compensation expense of approximately $1.3 million in cost of revenue as a result of performance options vesting upon our initial public offering in the first quarter of 2024. Excluding this one-time stock-based compensation expense, our cost of revenue increased 33.5% from $8.8 million in the six months ended June 30, 2024 to $11.8 million in the six months ended June 30, 2025, primarily driven by the corresponding increase in sales revenue of 24%.
Previous wording
The overall gross margin increased to 20.5% for the three months ended March 31, 2025 from (8.1)% in the three months ended March 31, 2024. Excluding the effect of $1.3 million of the stock-based compensation expense recognized in the three months ended March 31, 2024, the overall gross margin for the three months ended March 31, 2025 was 20.5% compared to 13.9% for the three months ended March 31, 2024. The increase in gross margin was due to lower unit cost in our solar business. This increase in gross margin was partially offset by a decrease in the gross margin of our LED operation resulting from an increase in tariffs for imported items, a fee charged to us by a logistics company who provides financing for one of our suppliers and arranges their shipments to our warehouse, and a lower volume of higher margin LED products. We have no cost of revenue with respect to interest income on customer loans.
Current wording
The overall gross margin decreased to 8.8% for the three months ended June 30, 2025 from 13.2% in the three months ended June 30, 2024, and increased to 14.7% for the six months ended June 30, 2025 from 1.2% in the six months ended June 30, 2024. The increase in gross profit and the percentage increase in gross profit in the six months ended June 30, 2025 from the comparable period of 2024 reflect the effect of the $1.3 million non-cash compensation in the first quarter of 2024. Excluding the effect of $1.3 million of the stock-based compensation expense recognized in the three months ended March 31, 2024, our overall gross margin increased to 14.7% for the six months ended June 30, 2025 from 13.6% in the six months ended June 30, 2024. The increase in gross margin was due to lower unit cost in our solar business. This increase in gross margin was partially offset by a decrease in the gross margin of our LED operation resulting from an increase in tariffs for imported items, a fee charged to us by a logistics company who provides financing for one of our suppliers and arranges their shipments to our warehouse, and a lower volume of higher margin LED products. We have no cost of revenue with respect to interest income on customer loans.
Previous wording
Sales and marketing expenses for our United States segment for the three months ended March 31, 2025 decreased to $79,000, a decrease of $86,000, or 52.2%, from $165,000 in the comparable period of 2024. Sales and marketing expenses in the United States were 1.1% of revenue for the three months ended March 31, 2025 compared to 2.9% for the three months ended March 31, 2024. Our sales and marketing expenses in the United States fluctuate based on the types of marketing and promotion initiatives we deploy. Our China segment did not incur sales and marketing expenses for the three months ended March 31, 2025 and 2024.
Current wording
Sales and marketing expenses for the three months ended June 30, 2025 decreased to $70,691, a decrease of $16,000 or 18.7% from $87,000 in the comparable period of 2024. Sales and marketing expenses were 1.0% of revenue for the three months ended June 30, 2025 compared to 2.0% for the three months ended June 30, 2024. Sales and marketing expenses for the six months ended June 30, 2025 decreased to $150,000, a decrease of $102,000, or 40.6%, from $252,000 in the comparable period of 2024. Sales and marketing expenses in the United States were 1.1% of revenue for the six months ended June 30, 2025 compared to 2.5% for the six months ended June 30, 2024. Our sales and marketing expenses in the United States fluctuate based on the types of marketing and promotion initiatives we deploy. We expect to continue to be selective in our sales and marketing spends for the remainder of 2025. Our China segment did not incur sales and marketing expenses for the six months ended June 30, 2025 and 2024.
Previous wording
General and administration expenses for the United States segment for the three months ended March 31, 2025 decreased $15.6 million or 86.7% to $2.4 million compared to $18.0 million for the three months ended March 31, 2024, representing 34.7% of revenue for the three months ended March 31, 2025 compared to 312.3% of revenue for the three months ended March 31, 2024. The decrease during the three months ended March 31, 2025 is principally attributed to the $15.9 million stock compensation expense recognized in the three months ended March 31, 2024 as a result of performance options vesting upon our initial public offering in the first quarter of 2024. Excluding the effect of the stock compensation expense, general and administrative expenses were $2.5 million or 34% of revenue for the three months ended March 31, 2025 compared to $2.1 million or 36% of revenue for the three months ended March 31, 2024. Our general increase, excluding the stock compensation expense, in general and administrative expenses in 2025 reflects the cost of compliance and other regulatory costs associated with being a public reporting company which is expected to continue for us. All of our corporate overhead, other than overhead directly related to the China segment, is allocated to the United States segment.
Current wording
General and administration expenses for the United States segment for the three months ended June 30, 2025 decreased $589,000 million or 21.6%, to $2.1 million compared to $2.7 million for the three months ended June 30, 2024, representing 31.0% of revenue for the three months ended June 30, 2025 compared to 61.2% of revenue for the three months ended June 30, 2024. General and administration expenses for the United States segment for the six months ended June 30, 2025 decreased $16.2 million or 78.1%, to $4.5 million compared to $20.7 million for the six months ended June 30, 2024, representing 32.9% of revenue for the six months ended June 30, 2025 compared to 202.8% of revenue for the six months ended June 30, 2024. The decrease during the six months ended June 30, 2025 is principally attributed to the $15.9 million stock compensation expense recognized in the six months ended June 30, 2024 as a result of performance options vesting upon our initial public offering in the first quarter of 2024. Our general increase, excluding the stock compensation expense, in general and administrative expenses in 2025 reflects the cost of compliance and other regulatory costs associated with being a public reporting company which is expected to continue for us all. All of our corporate overhead, other than overhead directly related to the China segment, is allocated to the United States segment.
Previous wording
General and administrative expenses relating to the China segment were $95,000 in the three months ended March 31, 2025, as compared with $252,000 in the three months ended March 31, 2024. During the three months ended March 31, 2024, we had a $1.1 million recovery of previously reserved receivable on one of our projects for SPIC as a result of the settlement of a legal proceeding.
Current wording
General and administrative expenses relating to the China segment were $166,000 in the three months ended June 30, 2025 compared to $175,000 in the three months ended June 30, 2024, and $261,000 in the six months ended June 30, 2025, as compared with $427,000 in the six months ended June 30, 2024. During the six months ended June 30, 2024, we had a $1.1 million recovery of previously reserved receivable on one of our projects for SPIC as a result of the settlement of a legal proceeding.
Previous wording
As a result of the factors described above, our loss from operations for the United States segment was $1.1 million for the three months ended March 31, 2025, compared to loss from operations of $18.6 million in the three months ended March 31, 2024. Our loss from operations for the China segment was $95,000 for the three months ended March 31, 2025, compared to a loss from operations of $252,000 in the three months ended March 31, 2024.
Current wording
As a result of the factors described above, our loss from operations for the United States segment was $1.6 million for the three months ended June 30, 2025, compared to loss from operations of $2.2 million in the three months ended June 30, 2024, and a loss from operations of $2.7 million for the six months ended June 30, 2025, compared to loss from operations of $20.9 million in the six months ended June 30, 2024. Excluding the effect of stock compensation expense recognized in the three months ended March 31, 2024, our loss from operations in the United States segment was $2.7 million for the six months ended June 30, 2025 compared to a loss from operations of $3.6 million for the six months ended June 30, 2024. Our loss from operations for the China segment was $166,000 for the three months ended June 30, 2025, compared to a loss from operations of $175,000 in the three months ended June 30, 2024, and a loss from operations of $261,000 for the six months ended June 30, 2025, compared to a loss from operations of $427,000 in the six months ended June 30, 2024.
Previous wording
The consolidated loss from operations was $1.2 million for the three months ended March 31, 2025 compared to a consolidated loss from operations of $18.9 million for the three months ended March 31, 2024.
Current wording
The consolidated loss from operations was $1.8 million for the three months ended June 30, 2025 compared to a consolidated loss from operations of $2.4 million for the three months ended June 30, 2024, and a consolidated loss from operations of $2.9 million for the six months ended June 30, 2025 compared to a consolidated loss from operations for $21.3 million for the six months ended June 30, 2024. Excluding the effect of stock compensation expense recognized in the three months ended March 31, 2024, our consolidated loss from operations was $2.9 million for the six months ended June 30, 2025 compared to the consolidated loss from operations of $4.1 million for the six months ended June 30, 2024.
Previous wording
Equity in income from unconsolidated entities relates to our China segment and comprises the equity in income from three unconsolidated project companies in which we have a non-controlling 30% interest. The equity in income for the three months ended March 31, 2025 was a loss of $14,000 compared to income of $60,000 in the three months ended March 31, 2024, a decrease of $74,000 or 123.7%. During the three months ended March 31, 2025, two of the three projects experienced losses due to insufficient sunlight which adversely impacted power generation, while one project had income. The change in the three months ended March 31, 2025 over the comparable period in 2024 correlates with the lower power production in the Guizhou region in China, which can vary from year to year depending on the weather.
Current wording
Equity in income from unconsolidated entities relates to our China segment and comprises the equity in income from three unconsolidated project companies in which we have a non-controlling 30% interest. The equity in income for the three months ended June 30, 2025 was income of $144,000 compared to income of $239,000 in the three months ended June 30, 2024, a decrease of $95,000 or 39.7%. The equity in income for the six months ended June 30, 2025 was income of $130,000 compared to income of $299,000 in the six months ended June 30, 2024, a decrease of $169,000 or 56.6%. The decline in income in the current period is attributed to insufficient sunlight, cloudy and frequent rain in the Guizhou region leading to a decline in the power production relative to the prior period which contributed to lower revenues.
Previous wording
Interest expense, net, for the three months ended March 31, 2025 was $249,000, a decrease of $119,000, or 32.4%, from the three months ended March 31, 2024. Our interest expense in the three months ended March 31, 2025 primarily includes interest at 3% on two EB-5 loans from related parties in the United States with a total principal balance of $11.0 million at March 31, 2025, interest at 4% on convertible notes issued to former limited partners of CEF in transactions in which the former limited partners of CEF accepted 4% convertible notes issued by SolarMax and the subsidiary that borrowed the funds from CEF with an aggregate principal balance of $16.5 million at March 31, 2025, interest at 8% on promissory notes issued to SMX Property (a related party) due in October 2025 with a principal balance of $1.4 million at March 31, 2025, interest at 8% on a promissory note issued to an unrelated individual due on June 30, 2025 with a principal balance of $2.0 million at March 31, 2025, and interest at 12% on a promissory note issued to an unrelated party due on June 30, 2025 with a principal balance of $900,000 at March 31, 2025. The convertible notes issued to the former limited partners of CEF were issued as payment of the former limited partner’s capital account in CEF and were issued in connection with cancellation of debt to CEF of an equal amount. The convertible notes are secured by the same collateral as the notes to CEF. Our interest income for the three months ended March 31, 2025 includes interest earned on promissory notes receivable at 8.0% in the United States segment due June 30, 2025 with a principal balance of $5.7 million at March 31, 2025, and interest earned on a promissory notes receivable at 5% in the China segment due June 30, 2025 with a principal balance of RMB 3,973,000 ($548,000) at March 31, 2025, which notes are reflected as short-term investments. See Note 5 of Notes to Consolidated Financial Statements.
Current wording
Interest expense, net, for the three months ended June 30, 2025 was $136,000, a decrease of $108,000, or 44.2%, from the three months ended June 30, 2024. Interest expense, net, for the six months ended June 30, 2025 was $385,000, a decrease of $227,000, or 37.1%, from the six months ended June 30, 2024. The overall decline in interest expense corresponds to the decline in the two related party EB-5 loan balances as well as the decline in the convertible note balances as scheduled annual principals payments were made. Our interest expense in the six months ended June 30, 2025 primarily includes interest at 3% on two EB-5 loans from related parties in the United States with a total principal balance of $11.0 million at June 30, 2025, interest at 4% on convertible notes issued to former limited partners of CEF in transactions in which the former limited partners of CEF accepted 4% convertible notes issued by SolarMax and the subsidiary that borrowed the funds from CEF with an aggregate principal balance of $16.3 million at June 30, 2025, interest at 8% on promissory notes issued to SMX Property (a related party) due in October 2025 with a principal balance of $1.4 million at June 30, 2025, and interest at 8% on a promissory note issued to an unrelated individual due on June 30, 2025 with a principal balance of $2.0 million at June 30, 2025. The convertible notes issued to the former limited partners of CEF were issued as payment of the former limited partner’s capital account in CEF and were issued in connection with cancellation of debt to CEF of an equal amount. The convertible notes are secured by the same collateral as the notes to CEF. Our interest income for the three and six months ended June 30, 2025 includes interest earned on promissory notes receivable at 8.0% in the United States segment due December 31, 2025 with a principal balance of $5.7 million at June 30, 2025, and interest earned on a promissory notes receivable at 5% in the China segment due September 30, 2025 with a principal balance of RMB 3,607,000 ($503,000) at June 30, 2025, which notes are reflected as short-term investments. See Note 5 of Notes to Condensed Consolidated Financial Statements.
Previous wording
During the three months ended March 31, 2025, other income, net was $59,000 consisting primarily of foreign currency transaction gains for our United States segment intercompany receivable denominated in the Chinese currency. During the three months ended March 31, 2024, other expense was $209,000, consisting primarily of $264,000 of gain on insurance settlement related the fire claim at our Riverside, California headquarters, $48,000 of income related to the foreign currency transaction gain for our United States segment intercompany receivable denominated in the Chinese currency, offset with $17,000 of expense related to a legal settlement involving a former employee.
Current wording
During the three months ended June 30, 2025, other income was $70,000 consisting primarily of $131,000 of foreign currency transaction gains for our United States segment intercompany receivable denominated in the Chinese currency, offset with a loss on a solar asset disposal in the United States segment of $65,000 During the three months ended June 30, 2024, other expense was $97,000 consisting of $66,000 of foreign currency transaction loss for our United States segment intercompany receivable denominated in the Chinese currency, and a $30,000 loss associated with the write-off of legal settlement receivable as a result of the debtor's bankruptcy.
Previous wording
For the three months ended March 31, 2025 and 2024, our United States segment reported an income tax expense of $6,000 and $6,000, respectively, attributable to minimum state tax liabilities.
Current wording
For the three months ended June 30, 2025 and 2024, our United States segment reported an income tax expense of $0 and $0, respectively, attributable to minimum state tax liabilities. For the six months ended June 30, 2025 and 2024, our United States segment reported an income tax expense of $6,000 and $6,000, respectively, attributable to minimum state tax liabilities.
Previous wording
For the China segment, income tax benefit of approximately $70,000 and $1,000 was reported for the three months ended March 31, 2025 and 2024, respectively. The increase in income tax benefit for our China segment in the three months ended March 31, 2025 was driven by the reduction in the net receivable balance resulting from the reserve taken at December 31, 2024 and the net losses in our China segment.
Current wording
For the China segment, income tax benefit of approximately $106,000 and $115,000 was reported for the three months ended June 30, 2025 and 2024, respectively. For the China segment, income tax benefit of approximately $176,000 and $116,000 was reported for the six months ended June 30, 2025 and 2024, respectively. The increase in income tax benefit for our China segment in the six months ended June 30, 2025 was driven by the reduction in the net receivable balance resulting from the reserve taken at December 31, 2024 and the net losses in our China segment.
Previous wording
As a result of the foregoing, we had consolidated net loss of $1.3 million, or $(0.03) per share (basic and diluted), for the three months ended March 31, 2025, compared with a consolidated net loss of $19.3 million, or $(0.46) per share (basic and diluted), for the three months ended March 31, 2024.
Current wording
As a result of the foregoing, we had consolidated net loss of $1.9 million, or $(0.04) per share (basic and diluted), for the three months ended June 30, 2025, compared with a consolidated net loss of $2.2 million, or $(0.05) per share (basic and diluted), for the three months ended June 30, 2024.
Previous wording
As a result of foreign currency translations, we reported net foreign currency translation income of $1,000 for the three months ended March 31, 2025 and a loss of $208,000 for the comparable period in 2024.
Current wording
As a result of foreign currency translations, we reported net foreign currency translation gains (losses) of $3,000 and $(65,000) for the three months ended June 30, 2025 and 2024, respectively, and $3,000 and $(273,000) for the six months ended June 30, 2025 and 2024, respectively.
Previous wording
The following tables show consolidated cash flow information for the three months ended March 31, 2025 and 2024 (dollars in thousands):
Current wording
The following tables show consolidated cash flow information for the six months ended June 30, 2025 and 2024 (dollars in thousands):
Previous wording
Net cash used in operating activities for the three months ended March 31, 2025 was $601,000, compared to net cash used by operating activities for the three months ended March 31, 2024 of $6.4 million. The cash used in operations for the three months ended March 31, 2025, resulting from our net loss of $1.3 million, decreases in non-cash expense of $17.2 million related primarily to the stock-based compensation expenses in the prior period as described in “Elimination of Forfeiture Provisions of Options and Stock Grants,” and an increase of $4.8 million in cash from our operating assets and liabilities. During the three months ended March 31, 2025, our operating assets and liabilities used $195,000 in cash, compared to $4.7 million of cash used in the three months ended March 31, 2024.
Current wording
Net cash used in operating activities for the six months ended June 30, 2025 was $380,000, compared to net cash used by operating activities for the six months ended June 30, 2024 of $8.0 million. The cash used in operations for the six months ended June 30, 2025, resulting from our net loss of $3.2 million, decreases in non-cash expense of $16.8 million related primarily to the $17.2 million stock-based compensation expenses in the six months ended June 30, 2024 as described in “Elimination of Forfeiture Provisions of Options and Stock Grants,” and an increase of $6.0 million in cash from our operating assets and liabilities. During the six months ended June 30, 2025, our operating assets and liabilities used $1.8 million in cash, compared to $4.3 million of cash used in the six months ended June 30, 2024.
Previous wording
Net cash used by operations for the three months ended March 31, 2024 of $6.4 million resulted from net loss of $19.3 million, non-cash expense of $17.6 million, and $4.3 million in cash used in our operating assets and liabilities.
Current wording
Net cash used by operations for the six months ended June 30, 2024 of $8.0 million resulted from net loss of $21.4 million, non-cash expense of $17.8 million, and $4.3 million of cash used in our operating assets and liabilities.
Previous wording
Non-cash adjustments changes for the three months ended March 31, 2025:
Current wording
Non-cash adjustments changes for the six months ended June 30, 2025:
Previous wording
Changes in operating assets and liabilities for the three months ended March 31, 2025:
Current wording
Changes in operating assets and liabilities for the six months ended June 30, 2025:
Previous wording
Net cash provided by investment activities for the three months ended March 31, 2025 was $93,000 consisting of the partial principal repayment on the short term loan investments in China. Net cash used by investing activities for the three months ended March 31, 2024 was approximately $7.0 million, consisting of $7.0 million short-term investment in two promissory notes, offset by $14,000 of cash proceeds received from disposal of property and equipment.
Current wording
Net cash provided by investment activities for the six months ended June 30, 2025 was $138,000 consisting of the partial principal repayment on the short term loan investments in China. Net cash used by investing activities for the six months ended June 30, 2024 was approximately $7.7 million, consisting of $7.7 million short-term investment in two promissory notes, offset by $14,000 of cash proceeds received from disposal of property and equipment.
Previous wording
Net cash provided by financing activities for the three months ended March 31, 2025 was $377,000, consisting primarily of $500,000 of cash proceeds from the issuance of shares of common stock, offset by $50,000 principal payments on convertible notes, and $69,000 payment of accrued legal settlement.
Current wording
Net cash provided by financing activities for the six months ended June 30, 2025 was $1.6 million, consisting primarily of $2.0 million of cash proceeds from the issuance of shares of common stock, offset by $250,000 principal payments on convertible notes, $138,000 payment of accrued legal settlement, and $9,000 payment on equipment leases.
Previous wording
Net cash provided by financing activities for the three months ended March 31, 2024 was $15.6 million, consisting of $18.2 million of net cash proceeds from our initial public offering in March 2024, offset by $3.0 million principal payments on convertible notes, $69,000 payment of accrued legal settlement, and $4,000 payment on equipment leases.
Current wording
Net cash provided by financing activities for the six months ended June 30, 2024 was $14.2 million, consisting of $18.6 million of net cash proceeds from our initial public offering in March 2024, $900,000 loan proceeds from a new short term borrowing, offset by $5.0 million principal payments on convertible notes, and $8,000 payment on equipment leases.
Previous wording
We invested $7,000,000 from the proceeds of our initial public offering in an 8% promissory note issued by Webao Limited, a Hong Kong based social media company. The initial maturity was June 1, 2024 and it was extended at the request of the maker to December 31, 2024 and subsequently extended to June 30, 2025. Our China segment invested RMB 5,000,000, or approximately $688,000, in a 5% note due June 25, 2024 issued by Qingdao Xiaohuangbei Technology Co., Ltd., a PRC-based company. The initial maturity date was extended at the request of the maker initially to December 25, 2024 and subsequently extended to June 30, 2025. As of May 12, 2025, we had received payments of RMB 1,344,474, or approximately $185,000, on account of this note. These notes are shown on our balance sheet as short-term investments. Maintaining any significant portion of our cash in non-financial institutions, particularly companies in Hong Kong and China, which do not have any of the protections provided by United States banks, is subject to adverse conditions in the Chinese financial and credit markets, which could impact access to our invested cash and could adversely impact our operating liquidity and financial performance.
Current wording
We invested $7,000,000 from the proceeds of our initial public offering in an 8% promissory note issued by Webao Limited, a Hong Kong based social media company. The initial maturity was June 1, 2024 and it was extended to December 31, 2024 and further extended to December 31, 2025. Our China segment invested RMB 5,000,000, or approximately $688,000, in a 5% note due June 25, 2024 issued by Qingdao Xiaohuangbei Technology Co., Ltd. ("Qingdao"), a PRC-based company. The initial maturity date was extended initially to December 25, 2024 and further subsequently extended to September 30, 2025. All of the extensions were at the request of the respective makers of the notes. As of August 1, 2025, we had received payments of RMB 1,344,475, or approximately $188,000, on account of the Qingdao note. These notes are shown on our balance sheet as short-term investments. Maintaining any significant portion of our cash in non-financial institutions, particularly companies in Hong Kong and China, which do not have any of the protections provided by United States banks, is subject to adverse conditions in the Chinese financial and credit markets, which could impact access to our invested cash and could adversely impact our operating liquidity and financial performance.
Previous wording
At March 31, 2025, our current liabilities included secured convertible notes in the principal amount of $10.7 million, secured notes to related parties of $7.4 million and unsecured notes payable of $2.9 million.
Current wording
At June 30, 2025, our current liabilities included secured convertible notes in the principal amount of $11.5 million, secured notes to related parties of $7.4 million and unsecured notes payable of $2.0 million.
Previous wording
Contemporaneously with the execution of our lease with 3080 Landlord and the termination of our former lease with SMXP, a related party, we issued two two-year 8% notes to SMXP in the aggregate principal amount of $1,358,658. These notes provide for quarterly payments of interest during the term with the principal being initially due at maturity. The initial maturity date in October 2024 was extended to October 10, 2025.
Current wording
Contemporaneously with the execution of our lease with 3080 Landlord and the termination of our former lease with SMXP, a related party, we issued two two-year 8% notes to SMXP in the aggregate principal amount of $1,358,658. These notes provide for quarterly payments of interest during the term with the principal being initially due at maturity. The initial maturity date in October 2024 was extended to October 10, 2025. On July 22, 2025, we paid the outstanding principal balance of $414,580 on one of the notes. On July 28, 2025, we made a partial payment of $400,000 on the principal balance on the remaining note. As of August 1, 2025, the outstanding principal balance is $544,076.88
Previous wording
In March and April 2025, we issued to a total of 2,136,907 shares of common stock to five accredited investors for a total of $1,850,000, which included the cancelation of the $900,000 promissory note described in the previous paragraph. The shares were issued at prices per share ranging from $0.83 to $.90, which represented 75% of the market price on the date that the investment was made. Two of the investors were the beneficial owners of the investment company that made the $900,000 loan to the Company and made an additional $100,000 investment and assigned the investment company’s interest in the note and the additional investment to the beneficial owners.
Current wording
On March 6, 2025, our board of directors authorized the private placement sale of our common stock, at a discount of up to 25% from the market price on the date of the investment and appointed a special committee to approve such issuances. Through July 31, 2025, a total of 9,032,090 shares were issued pursuant to such authorization for a total consideration of $7,230,000, at a price ranging from $0.74 to $0.90, with an average purchase price of $0.80. The purchase price was 75% of the market price on the date of the respective agreements. At June 30, 2025, 3,319,682 shares were issued for a total consideration of $2,850,000, at a price ranging from $0.83 to $0.90, with an average purchase price of $0.86. Two of the investors were the beneficial owners of the investment company that made the $900,000 loan to us and made an additional $100,000 investment and assigned the investment company’s interest in the note and the additional investment to the beneficial owners. Under the Nasdaq regulations, we may not be able to raise any significant funding from the sale of common stock at a discount from market in the near future without stockholder approval.
Showing the first 40 of 45 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
We also have non-binding term sheets or non-binding letters of intent with respect to other proposed commercial projects and these projects are subject to the negotiation of development and financing agreements. We cannot assure you that these projects will be completed or that we will be successful in developing our commercial business as planned.
Current report — wording carried from elsewhere
Revenues for the three months ended June 30, 2025 were $6.9 million, an increase of $2.4 million or 54.5%% from $4.5 million in the three months ended June 30, 2024. The increase resulted from a $2.8 million increase in solar energy and battery sales, offset by a $319,000 decrease in LED sales and a $12,000 decrease in financing revenue. Our revenue from solar systems increased from $3.1 million for the three months ended June 30, 2024 to $5.9 million for the three months ended June 30, 2025, a 88.2% increase. The increase in solar energy sales over the prior period is primarily attributed to sale resulting from our dealer network program that commenced in or about October 2024. This increase covered both the solar energy systems and sales of batteries separate from solar systems. The increase in the solar energy and battery sales in the three months ended June 30, 2025 reflects a 90.1% increase in the number of systems completed and a 65.1% increase in the wattages deployed. During the three months ended June 30, 2025 and 2024, our battery sales were $864,000 and $374,000, respectively. Battery sales refer to the sale of batteries sold other than as a part of a solar system.
Current report — wording carried from elsewhere
As a result of the foregoing, we had consolidated net loss of $3.2 million, or $(0.07) per share (basic and diluted), for the six months ended June 30, 2025, compared with a consolidated net loss of $21.4 million, or $(0.50) per share (basic and diluted), for the six months ended June 30, 2024.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Three Months Ended March 31, 2025*** and 2024***