Item 3. Legal Proceedings
ITEM 3. LEGAL PROCEEDINGS
We are involved in various claims arising in the ordinary course of business, including some which we believe are immaterial or which we believe to be frivolous, including actions with respect to contractual matters. In connection with these matters, we assess, on a regular basis, the probability and range of possible loss based on the developments in these matters.
In early 2025, an action by a landlord was brought to recover approximately $34,000 plus attorneys’ fees and punitive damages based upon an alleged breach of the lease between Remington Industrial Management LLC and Sunation Solar Systems, Inc. The landlord asserts that Sunation Solar Systems, Inc. has the obligation to insure the entire building rather than keep in full force and effect “fire and hazard insurance for the full replacement value of all improvements located on the demised premise” as specifically provided in the lease rider. Sunation Solar Systems denies that it has an obligation to insure the entire building under the express terms of the lease, which is not a “triple net lease.” The landlord had asserted three causes of action for breach of contract, declaratory judgment that the lease requires Sunation Solar Systems to insure the building itself, and a third vague “fraud” theory. The claims against SUNation Energy, Inc. based upon vague allegations of fraud are likely unsustainable. We have since come to agreement with the Landlord on this matter and a stipulation of discontinuance with prejudice has been filed with the court. As a result, the action has been dismissed.
From time to time, we also face threatened legal actions or claims in the ordinary course of our business. One such matter involved a residential customer who has informally alleged that our subsidiary, Sunation Solar Systems, was responsible for the cost to replace certain equipment by a third-party manufacturer that was found to be admittedly defective (by the manufacturer), the cost of which
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may be substantial. We have since come to agreement with this residential customer in this matter and, as a result, no litigation or threatened claims relating to this matter remain, and no formal action was filed.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
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PART II
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.