13. Investments in Unconsolidated Companies

At June 30, 2026 and December 31, 2025, the Company has a 30% non-controlling interest in three PRC companies. These PRC companies were project subsidiaries previously owned by the Company that previously performed EPC services for three projects pursuant to agreement with SPIC. The project subsidiaries are the entities that hold the ownership and operate the solar farms. When the projects were completed in 2020, the customer, SPIC, purchased a 70% equity interest in these project subsidiaries. The Company accounts for its 30% equity interest using the equity method. Activity in the Company’s 30% non-controlling investments in these entities for the six months ended June 30, 2026 and 2025 is reflected in the following tables:

The following tables present the summary of the unaudited combined financial statements of the three solar project companies in which the Company has a 30% equity interest as of June 30, 2026 and December 31, 2025, and for the six months ended June 30, 2026 and 2025:

Revenue of these project companies is generated from the power purchase agreements with the PRC utility companies as well as government subsidies.

On April 29, 2025, Longfellow was formed as a Texas limited liability company and commenced its business on the same date. Longfellow is a special purpose company created to own and operate a new battery storage system located in Pecos County, Texas. Pursuant to the LLC agreement, the Company owns an 8% interest percentage and was to make a contribution of $5.0 million the earlier of December 31, 2025 or when the board of managers determines such contributions are necessary to meet Longfellow’s obligations under the Longfellow Contract pursuant to which the Company is the EPC contractor (see Note 8). Longfellow’s business is managed by the board of managers comprising of five managers, one of whom is the Company’s chief executive officer who is representing the Company on the board of managers. The Company’s interest in Longfellow is effective in June 2025, even though its capital contribution was not due until December 31, 2025 pursuant to the LLC agreement. At June 30, 2026 and December 31, 2025, the Company had not paid its $5.0 million capital contribution and accordingly, has not recorded its $5.0 million investment. The Company has the consent from Longfellow to defer the date of the Company’s capital contribution to a later date, which has not been determined.

The Company has determined that Longfellow is a variable interest entity (“VIE”) in which the Company has an 8% equity interest. Additionally, the Company has an EPC contract with Longfellow which contains a $42.0 million payment milestone pursuant to a tax equity transaction and a deferred payment of $17.0 million annually over three years after the completion of the EPC project which is to be paid from the project’s operational revenues. The amounts of the tax equity transaction and the deferred payments are uncertain and therefore represent variable interest assumed by the Company. 

Although Longfellow is a VIE, the Company has determined that it is not the primary beneficiary of Longfellow because it does not have both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE. Accordingly, the Company does not consolidate Longfellow in its consolidated financial statements.

The carrying amount of the Company’s equity interest in Longfellow was zero as of June 30, 2026. As of June 30, 2026, the Company had accounts receivable of $9.4 million and total current and noncurrent contract assets of $51.9 million related to the Longfellow Contract. The Company also had prepaid inventory of $285,000 related to the Longfellow Contract, primarily representing amounts billed by suppliers.

The Company’s maximum exposure to loss related to its involvement with Longfellow was approximately $61.6 million as of June 30, 2026. The maximum exposure to loss consists primarily of accounts receivable of $9.4 million, total current and noncurrent contract assets of $51.9 million and prepaid inventory of $285,000. The Company’s 8% equity interest had a carrying amount of zero as of June 30, 2026. The Company’s maximum exposure to loss does not reflect the probability of loss or the likelihood that the Company will be required to fund such amounts.

As of June 30, 2026, approximately $61.1 million of contractual value remained under the Longfellow Contract. The remaining contractual value represents future consideration expected to be received for performance of the remaining performance obligation under the Longfellow Contract and is not included in the Company’s maximum exposure to loss.

The following table presents the carrying amounts of the Company’s assets related to Longfellow and the Company’s maximum exposure to loss: