Company: SUNE
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0000022701-25-000002
Chunk: 43

Company: SUNation Energy, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 8
Chunk 43
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 2024, the fair value of this embedded derivative liability was estimated to be $29,121 and was recorded within current liabilities. For the year ended December 31, 2024, the Company recorded a loss of $21,041 from the change in fair value of the derivative liability, which is included in “Other (expense) income, net" in the consolidated statements of operations and comprehensive loss. The OID of $100,000 was recorded as a discount and initially amortized using the effective interest method over the life of the Initial MBB Loan along with the initial fair value of the embedded derivative liability using an effective interest rate of approximately 24.3%. On August 16, 2024, MBB provided an additional principal advance of $500,000 (the “Second MBB Advance”). The Second MBB Advance represented a modification under ASC 470-50. A new effective interest rate of approximately 24.1% was established following the Second MBB Advance based on the carrying value of the revised cash flows. Notwithstanding anything to the contrary as set forth in the MBB Note or any tranche or amendment related thereto, in no event shall the OID, together with interest payable under the MBB Note or such other documents related thereto, exceed an aggregate of twenty percent on the then outstanding principal sum, except in the event of a default, which shall include an additional 5% on the then outstanding principal sum. On February 28, 2025, the Company paid the $1,000,000 loan balance to MBB as the Company had gross proceeds from equity offerings in excess of $4.4 million. See further discussion in Note 17, Subsequent Events. At December 31, 2024 and 2023, the loan balance was $1,000,000 and $0, respectively, and the unamortized debt issuance costs balance was $125,391 and $0, respectively. The Company recorded interest and accretion expense of $82,689 for the year ended December 31, 2024. Equipment Loans The Company obtains various equipment loan agreements through SUNation. These loans are secured by machinery and equipment and expire at various dates through August 2029 with interest rates ranging from 4.5 to 9.7% per annum. The balance for the equipment loans recorded at December 31, 2024 and 2023 was $238,266 and $333,717, respectively. Interest expense was $24,