SolarMax Technology, Inc. 10-K

Item 3. Legal Proceedings In the ordinary course of our business, we and our subsidiaries are involved in various legal proceedings involving contractual relationships, product liability claims, and a variety of other matters. We do not believe there are any such pending legal proceedings that will have a material impact on our financial position or results of operations. We previously initiated arbitration proceedings against SPIC, the state-owned company related to the receivable balances of several photovoltaic EPC projects that we completed in 2020 and 2021. In April 2025, the arbitration tribunal issued awards in favor of us and subsequently we were able to collect approximately RMB 42.5 million ($6.0 million) of the receivable balance. At December 31, 2025, the unpaid receivable balance was RMB 7.0 million ($1.0 million) and we received no payments since December 31, 2025. We initiated another enforcement proceeding to collect the balance of the arbitration awards. In connection with the enforcement actions, the court has frozen certain bank accounts and real estate assets of the related SPIC subsidiaries and has issued enforcement notices requiring the Xingyi Power Supply Bureau to withhold electricity sales proceeds generated by the photovoltaic power plants. As of December 31, 2025, no cash recoveries had been received. Based on discussions with legal counsel and the enforcement court, we expect that collections will occur through the withholding of electricity revenues generated by the projects. While we believe recovery is probable, the timing and amount of collections remain subject to enforcement procedures and operating performance of the power plants. We continue to monitor the status of the enforcement proceedings and will update our assessment of collectability as additional information becomes available. Item 4. Mine Safety Disclosures Not applicable. 39 Table of Contents Part II