SolarMax

Core business

SolarMax is an integrated solar and renewable energy company that designs, installs, and services solar energy systems and large-scale battery energy storage systems (BESS). Since Q3 2025 the company has primarily contracted and performed EPC (engineering, procurement, and construction) services for solar-based BESS commercial projects. It continues residential and commercial solar installations (primarily in California) and LED lighting projects. The company previously provided financing for solar customers but ceased new financing in 2022.

Large-scale BESS (EPC) business

Active EPC projects and backlog as of December 31, 2025:

• Longfellow BESS I, LLC (Texas): 430 MWh storage. Contract value includes batteries and services. The company committed to a $5.0 million equity contribution (8% interest) that had not been funded as of 12/31/2025.
• Three EPC agreements awarded at 12/31/2025:
  • Naguabo BESS, Ceiba Municipality, Puerto Rico: ~320 MWh; revenue ~$122.3 million.
  • Yabucoa BESS, Humacao Municipality, Puerto Rico: ~80 MWh; revenue ~$35.9 million.
  • Navboot Holdco, Corpus Christi, Texas: ~600 MWh; revenue ~$258.1 million.

Longfellow contract details (as of 12/31/2025):

• Revenues recognized in 2025: $60.2 million (66.1% of the company’s total 2025 revenue), recorded in the second half of 2025.
• Cost of revenues for the period: $59.8 million.
• Batteries delivered but not installed at year-end: $58.8 million (capitalized as a contract asset; recognized in revenue upon installation/progress).
• Engineering and pre-construction services recognized: $1.0 million (2.9% progress) included in cost of revenue.
• Accounts receivable from Longfellow: $9.4 million.
• Unbilled revenue (contract asset): $45.8 million.

Backlog and pipeline are built around large-scale BESS, with multiple long-term EPC contracts in Puerto Rico and Texas.

Residential and commercial solar (California)

• Market focus: California installations; more than 12,000 solar installations (homes and businesses) in the state.
• Business model: grid-tied and off-grid systems. Grid-tied systems can export excess power to the grid and draw from the grid as needed.
• Project process and revenue recognition: five stages — feasibility, design, permitting, procurement, and installation; post-installation maintenance is available.
• Financing: the company ceased offering new customer financing in 2022; remaining finance revenue derives from existing loans.
• Dealer network (introduced 2023): independent licensed dealers sell residential solar products on non-exclusive terms; dealer commissions are included in cost of revenue.
  • 2025: dealer network accounted for ~11% of total revenues; about 47% of residential and battery contract revenue originated through the dealer network.
  • 2024: dealer network accounted for ~22% of total revenues; about 21% of residential and battery contract revenue originated through dealers.
• Sales and marketing: combination of in-house team and dealer network; dealer relationships were expanded in late 2023–2024.

LED and government projects

• Provides LED products and systems for government and municipal uses, including a government-exclusive ETL-marked streetlight system.
• Offers related commercial consulting and project services.

Financing and portfolio

• SolarMax Financial historically offered financing to customers; no new financing since 2022. Remaining customer loans receivable (as of 12/31/2025):
  • Gross loans: $3.337 million
  • Allowance for loan losses: $(0.206) million
  • Net loans: $3.131 million
  • Current portion: $0.875 million
  • Non-current portion: $2.256 million
• Financing arrangement with Dividend (Fifth Third Bank): Dividend pays the company for customer-financed systems; financing contracts are between customers and Dividend.

Customers and scale

• The residential and commercial solar business has served thousands of customers in California.
• 2025 revenue was approximately $91 million, with $60.2 million from the Longfellow EPC contract.

Employment and operations

• U.S. headcount (as of March 15, 2026): 72 employees
  • 5 executives
  • 24 sales and marketing
  • 31 operations and installation
  • 13 accounting and administrative
• China operations (as of March 15, 2026): 7 employees (1 executive; 6 accounting/administrative).
• No workforce-wide labor union representation.

Corporate structure and footprint

SolarMax is a Nevada corporation with four U.S. wholly-owned subsidiaries:

• SolarMax Renewable Energy Provider, Inc. (SREP) — California operations (PV and energy storage installations; EPC for commercial projects)
• SolarMax LED, Inc. — California operations (LED and government/commercial projects)
• SolarMax Financial, Inc. — California (financing operations; ceased new financing)
• SMX Capital, Inc. — New Jersey (ownership and funding of renewable projects; operates mainly through existing leases/PPAs)

Four non-U.S. subsidiaries historically connected with China have not been actively engaged in business since 2021.

Production and warranties

• Manufacturer warranties on panels and inverters can extend up to 25 years; other component warranties generally range 1–10 years.
• Company warranties: 10-year limited installation warranty on PV modules and inverters; BESS workmanship warranty typically 3 years.
• Batteries are covered by manufacturer warranties up to 10 years.
• Residential contracts (from 2015) include production guarantees of minimum annual production (typically a 10-year term); shortfalls due to weather or external events may be contractually borne by the company.

Market and policy context

• The company is exposed to government incentives (federal tax credits, state rebates), net metering policies, and tariff regimes affecting solar components.
• California’s NEM 3.0, effective April 2023, changed export credit calculations and affected residential-market economics. The company reported a slowdown in residential demand, responded with downsizing in 2024, and shifted focus toward large-scale BESS EPC projects.

Revenue and income snapshot

• 2025 revenue: approximately $91 million (with $60.2 million from the Longfellow EPC contract, representing 66.1% of 2025 revenue).
• Net loss:
  • 2025 net loss: approximately $6.3 million.
  • 2024 net loss: approximately $35.0 million (driven by one-time non-cash stock compensation, goodwill impairment related to China operations, and a tax valuation allowance).
• Working capital and liquidity (as of 12/31/2025):
  • Working capital deficiency: $20.4 million
  • Cash and cash equivalents: $8.0 million
  • Accounts receivable: $12.9 million
• Debt and obligations:
  • Convertible notes outstanding: $14.3 million in default as of 12/31/2025 (accelerable; 12% default interest if accelerated). Current liabilities reflect the default status; collateral includes accounts receivable and inventory on BESS projects.
  • Other obligations: $5.5 million to a related party and $2.5 million due to the CEO.
• Longfellow-specific receivables and contract assets:
  • Unbilled revenue (contract asset): $45.8 million
  • Accounts receivable: $9.4 million

Strategy emphasis

The company emphasizes large-scale BESS EPC projects while continuing California residential/commercial solar installations and LED projects. The dealer network is a material sales channel for residential solar revenue, with the dealer network accounting for roughly 11% of total revenue in 2025 and directing about 47% of residential and battery contract revenue that year (versus 22% and 21% in 2024).