Company: SUNE
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0000022701-25-000002
Chunk: 24

Company: SUNation Energy, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 8
Chunk 24
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 business operations done in Hawaii. The Company records the tax revenue and expense on a gross basis. Cost of Sales Cost of sales consist of direct and indirect material and labor costs for solar energy system installations as well as warranty costs, permitting fees, financing fees and overhead including costs related to procurement, warehousing and inventory management. Employee Retirement Benefits The Company has an Employee Savings Plan (401(k)) and matches a percentage of employee contributions up to six percent of compensation. Employer contributions to the plan in 2024 and 2023 were $303,878 and $140,652, respectively. Additionally, as part of the November 9, 2022 SUNation Acquisition, the Company also acquired the SUNation Solar Systems, Inc. 401(k) Plan. Employer contributions into this plan were $176,334 during 2023 until the plan was merged with the Employee Savings Plan on December 1, 2023. Share Based Compensation  The Company accounts for share-based compensation awards on a fair value basis. The estimated grant date fair value of each stock-based award is recognized in the statement of operations over the requisite service period (generally the vesting period). The Company recognizes forfeitures as they occur. Warranty SUNation warrants its products for various periods against defects in material or installation workmanship.  The manufacturers of the solar panels and the inverters provide a warranty period of generally 25 years and 10 years, respectively.  SUNation will assist its customers in the event that the manufacturers' warranty needs to be used to replace a defective solar panel or inverter.  SUNation provides for warranty up to the lifetime of the system on the installation of a system and all equipment and incidental supplies other than solar panels and inverters that are recovered under the manufacturers' warranty.  SUNation provides extended workmanship warranties to the customer for up to 25 years for the service of inverters, which is reimbursed by the manufacturer. The Company estimates its warranty obligations upon installation, an expense included in cost of sales, based on management’s best estimate of the probable cost to be incurred in honoring its warranty commitment.  Advertising Advertising costs are expensed as they are incurred. Advertising expense was $746,805 and $946,379 for the years ended December 31, 2024 and 2023, respectively. Segment Information Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker, or decision-making group, in deciding the method to allocate resources and assess performance