Company: SUNE
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0000022701-25-000002
Chunk: 61

Company: SUNation Energy, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 8
Chunk 61
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2,500,000 and $3,500,000, respectively. The $2,500,000 balance at December 31, 2024 is related to the first earnout period recorded in current liabilities. See further discussion within Note 17, Subsequent Events on the subsequent payment of this liability. The estimated fair value is now considered a Level 2 measurement now that the earnout amounts have been established and there is no longer a reliance on unobservable inputs. The fair value was considered a Level 3 measurement at December 31, 2023 and in order to update the fair value of the earnout consideration, the Company utilized a Monte Carlo simulation, which included the following significant assumptions: the expected probability and timing of achievement of milestone events. As a result of the fair value remeasurement, the Company recorded a remeasurement gain of $1,000,000 and a remeasurement loss of $1,350,000 during the years ended December 31, 2024 and 2023, respectively. The estimated fair value of the PIPE warrants was $0 as of both December 31, 2024 and 2023, respectively. As noted in Note 12, the warrants were classified as a liability during the first quarter of 2024, resulting in a $10,592,202 reclassification from equity. During the third quarter of 2024, the warrants met equity classification requirements upon the shareholder approval of an increase in authorized outstanding shares and reclassified the fair value liability totaling $11,242,254 back to equity. The estimated fair value is considered a Level 3 measurement and the fair value of the warrant liability is determined using a Monte Carlo simulation to model future movement of the stock price. As a result of the fair value remeasurement, the Company recorded a remeasurement loss of $974,823 and $0 during the years ended December 31, 2024 and 2023, respectively. The estimated fair value of the embedded derivative liability was $82,281 and $0 as of December 31, 2024 and 2023, respectively. As a result of the fair value remeasurement, the Company recorded a remeasurement loss of $65,617 and $0 during the years ended December 31, 2024 and 2023, respectively. The estimated fair value is considered a Level 3 measurement and the fair value of the embedded derivative liability is determined based on a comparison of the present value of cash flows with