14. Financing Arrangements

As of June 30, 2026 and December 31, 2025, the Company had the following borrowings:

Related party EB-5 financings

The Company’s borrowings under the EB-5 program from related parties consisted of the following as of June 30, 2026 and December 31, 2025:

On January 3, 2012, Clean Energy Fund, LP (“CEF”) entered into a secured loan agreement with SREP, a wholly owned subsidiary of the Company. Under the secured loan agreement, CEF agreed to make loans to SREP in an amount not to exceed $45.0 million, to be used to finance the installment purchases for customers of the solar energy systems. A total of $45.0 million was lent. The loan accrues interest at 3% per annum, payable quarterly in arrears. Each advanced principal amount is due and payable 48 months from the advance date or the U.S. Immigration Form I-829 approval date of the CEF limited partner who made the investment in CEF, if later. The I-829 petition includes evidence that the immigrant investors successfully met all U.S. Citizenship and Immigration Services requirements of the EB‑5 program. As of June 30, 2026 and December 31, 2025, the principal loan balance was $2.0 million and $3.5 million, respectively.

On August 26, 2014, Clean Energy Funding II, LP (“CEF II”) entered into a secured loan agreement with LED, a wholly-owned subsidiary of the Company, for up to $13.0 million. A total of $10.5 million was lent. The proceeds of the loan were used by LED for its operations. The loan accrues interest at fixed interest rate of 3.0% per annum, payable quarterly in arrears. Each advance of principal is due and payable in 48 months or the U.S. Immigration Form I-829 approval date of the CEF II limited partner who made the investment in CEF II, if longer. As of June 30, 2026 and December 31, 2025, the principal loan balance was $6.5 million and $7.0 million, respectively.

The general partner of CEF and CEF II is Inland Empire Renewable Energy Regional Center (“IERE”). The principal owners and managers of IERE consist of the Company’s chief executive officer and its former executive vice president, who is a 5% stockholder.

Convertible Notes

The Company has issued 4% secured subordinated convertible notes to former limited partners of CEF and CEF II, pursuant to exchange agreements with the limited partners. The limited partners accepted the notes in lieu of cash payments of their capital contribution to CEF or CEF II, which resulted in a reduction of SREP’s and LED’s notes to CEF and CEF II, respectively, in the same amount, reducing the outstanding EB-5 loan balance. Payment of the notes is secured by a security interest in SREP’s and LED’s accounts and inventory. The convertible notes are payable in five equal installments on the first, second, third, fourth and fifth anniversaries of the date of issuance. The convertible notes made prior to, or on or about the date of, the Company’s initial public offering are convertible into common stock at a conversion price of $38.40, which is 80% of the $48.00 public stock price of the Company’s common stock. The convertible notes made after the Company’s initial public offering are convertible into common stock at a conversion price equal to 80% of the average closing price of the Company’s common stock for the ten trading days preceding the date of the exchange agreement with the limited partner, which ranged from $6.06 per share to $108.84 per share. The convertible notes may be converted into common stock at the first, second, third, fourth and fifth anniversaries of the date of issuance.

All convertible notes issued contained redemption put features that allow the holders of the convertible notes the right to receive, for each conversion share that would have been issuable upon conversion immediately prior to the occurrence of an effective change in control event defined as a fundamental transaction, the number of shares of common stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration receivable as a result of such fundamental transaction by a holder of the number of shares of common stock for which these convertible notes are convertible immediately prior to such fundamental transaction. The Company evaluated the redemption put feature contained in the convertible notes under the guidance of ASC 815 and concluded that the requirements for contingent exercise provisions as well as the settlement provision for scope exception in ASC 815-10-15-74 has been meet. Accordingly, the redemption put features contained in the convertible notes were not bifurcated and are accounted for as freestanding derivative instruments.

During the three months ended June 30, 2026, the Company recognized a gain on debt of extinguishment in the amount of approximately $13,000, relating to the issuance of a convertible note in the principal amount of $500,000 to a former limited partner of CEF I in exchange for a $500,000 reduction of the note from CEF I. During the three months ended June 30, 2025 as there were no issuances of convertible notes in exchange for a reduction of the note from CEF I or II.

During six months ended June 30, 2026, the Company recognized a gain on debt of extinguishment in the amount of approximately $54,000, relating to the issuance of convertible notes in the principal amount of $2.0 million to former limited partners of CEF I and II in exchange for a $2.0 million reduction of the notes from CEF I and II. During the six months ended June 30, 2025 there was no issuance of convertible notes in exchange for a reduction of the note from CEF I or II.

Event of Default on Convertible Notes

From April 2023 through June 30, 2026, the Company did not pay certain annual principal installment payments and related quarterly interest payments which is an event of default on convertible notes. As of June 30, 2026 and December 31, 2025, the aggregate principal amount of the notes in default was $13.7 million and $14.3 million, respectively. The default provisions of the notes provide that if an event of default occurs the outstanding principal amount of the note, plus accrued but unpaid interest and other amounts owing in respect thereof through the date of acceleration, shall become, at the noteholder’s election, immediately due and payable in cash, and, commencing five days after occurrence of any event of default that results in the eventual acceleration of the note, the interest rate on the note shall accrue at an interest rate of 12% per annum. Further, if an event of default occurs, the noteholders, together, have rights to foreclose on the collateral securing the notes.

The Company accrued interest at the rate of 4% per annum since no noteholder has taken action to accelerate payment of principal and interest. Since the Company has accrued interest at 4% per annum on the outstanding notes, in the aggregate principal amount of $13.7 million, with respect to which there is an event of default but with respect to which the noteholders did not demand acceleration. Such accrued interest was approximately $350,387 at June 30, 2026. In the event that the holders of all of these notes demand acceleration, the amount of accrued interest on those at 12% would be approximately $2.2 million at June 30, 2026. The difference between the interest at 12% and the accrued interest at 4% as of June 30, 2026, together with any additional interest due subsequent to June 30, 2026 is a contingent liability of the Company. If any noteholders exercise their right to accelerate, the accrued interest at the default rate of 12% will be reflected as an interest expense in the period the note is accelerated.

Interest Expense

For the three months ended June 30, 2026 and 2025, interest expense incurred on the long-term EB‑5 related party loans was approximately $64,000 and $82,000, respectively. For the six months ended June 30, 2026 and 2025, interest expense incurred on the long-term EB‑5 related party loans was approximately $134,000 and $164,000, respectively.

Total interest expense incurred (including interest on long-term related party EB-5 loans) was approximately $249,000 and $363,000 for the three months ended June 30, 2026 and 2025, respectively, and approximately $547,000 and $732,000 for the six months ended June 30, 2026 and 2025, respectively. The weighted average interest rate on loans outstanding was 3.8% and 4.0% as of June 30, 2026 and December 31, 2025.

Principal stated maturities for the financing arrangements as of June 30, 2026 are as follows:

*The principal amount of the convertible notes that are in default are treated as current liabilities, due in 2026.