Company: SUNE
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0000022701-25-000002
Chunk: 5

Company: SUNation Energy, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 8
Chunk 5
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 as of December 31, 2024.  As disclosed in Note 9 to the consolidated financial statements, the amortized cost of the Decathlon Fixed Loan was $6,586,325 and the fair value of  the embedded derivative was $24,800 as of December 31, 2024.  Management engaged a third-party valuation specialist to assist with the accounting and fair value analysis.   Auditing management’s conclusions required the interpretation of complex accounting literature related to financial instruments, more specifically embedded derivatives in debt instruments. In addition, auditing management’s fair value estimates was complex and judgmental because the measurements involved unobservable inputs.  There was management judgment in determining the probability of various payoff alternatives occurring as well as the estimated payoff date under each alternative. How the Critical Audit Matter Was Addressed in Our AuditOur audit procedures to evaluate the reasonableness of management’s accounting and fair value estimates for the Decathlon Fixed Loan included the following:Involved financial instrument accounting subject matter specialists to assess the Company's embedded derivative accounting conclusions. Evaluated management’s accounting memorandum and read the underlying contract for consistency with the conclusions reached.Involved our valuation specialists to 1) assess management’s fair value methodology and 2) develop an independent estimate of the fair value of the embedded derivative liability. Assessed the reasonableness of management’s payoff assumptions, more specifically the probabilities of various payoff alternatives occurring and the estimated payoff dates of each alternative. We 1) made inquiries of management and the board, 2) inspected board meeting minutes, 3) compared forecasts used to support the assumptions with forecasts used by management in other accounting estimates as of December 31, 2024, and 4) evaluated events occurring subsequent to December 31, 2024.  Assessed the appropriateness of the disclosures in the financial statements.    /s/ UHY LLP  We have served as the Company’s auditor since 2023.  

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Melville, New York April 15, 2025     ‎ 

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  Click or tap here to enter text.         SUNATION ENERGY, INC.CONSOLIDATED BALANCE SHEETSASSETS   December 31 December 31 2024  2023 CURRENT ASSETS:     Cash and cash equivalents$ 839,268 $ 3,575,283Restricted cash and cash equivalents  312,080   1,821,060Trade accounts receivable, less allowance for