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What changed in SUNation Energy, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of SUNation Energy, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+360 added−185 removedSource: 10-K (2025-04-15) vs 10-K (2024-04-01)

Top changes in SUNation Energy, Inc.'s 2024 10-K

360 paragraphs added · 185 removed · 120 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeFor customers pursuing the home ownership model, these customers typically pursue loan financing, although a small proportion pay in cash. Pineapple assists customers in obtaining loan financing options through our relationships with diverse funding sources. Under these loan financing agreements, there is typically no down-payment or upfront cost to the homeowner.
Biggest changePineapple assists customers in obtaining loan financing options through our relationships with diverse funding sources. Under these loan financing agreements, there is typically no down-payment or upfront cost to the homeowner. A “dealer fee” is typically rolled into the principal balance, and that amount is amortized over the tenure of the loan.
This is an emerging part of the business, but soon we believe we will be able to help homeowners generate ongoing revenue streams by 7 aggregating their batteries into a fleet, thus creating a “virtual power plant” and selling grid services to the utility. We have proprietary technology in this area, strong relationships with regulators and utilities.
This is an emerging part of the business, but soon we believe we will be able to help homeowners generate ongoing revenue streams by aggregating their batteries into a fleet, thus creating a “virtual power plant” and selling grid services to the utility. We have proprietary technology in this area, strong relationships with regulators and utilities.
Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and other reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available 9 free of charge on our website as soon as reasonably practicable after these documents are filed electronically with the Securities and Exchange Commission (“SEC”).
Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and other reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available free of charge on our website as soon as reasonably practicable after these documents are filed electronically with the Securities and Exchange Commission (“SEC”).
Residential solar is like many industries in that cost-of-goods-sold is a significant expense, and companies with greater scale can enjoy significantly lower costs throughout their equipment supply chain.
Residential and Commercial solar is like many industries in that cost-of-goods-sold is a significant expense, and companies with greater scale can enjoy significantly lower costs throughout their equipment supply chain.
We believe there is a tremendous opportunity for a consolidator to rapidly scale its business and become one of the most recognized brands in the industry through acquiring, integrating, and growing leading local and regional solar sales and installation companies. 6 Leverage and continue to lower our customer acquisition costs through referral programs.
We believe there is a tremendous opportunity for a consolidator to rapidly scale its 7 business and become one of the most recognized brands in the industry through acquiring, integrating, and growing leading local and regional solar sales and installation companies. Leverage and continue to lower our customer acquisition costs through referral programs.
Our installers complete offerings in-house as full-service installers to have total control of the customer experience. Pineapple offers transparent, clear sales agreements and has invested in digital tools to support customers along the installation journey. Our installers are active in their local communities to build a trusted brand.
Our installers complete offerings in-house as full-service installers to have total control of the customer experience. Our Company offers transparent, clear sales agreements and has invested in digital tools to support customers along the installation journey. Our installers are active in their local communities to build a trusted brand.
See Note 7 of the Notes to the Consolidated Financial Statements, “Discontinued Operations.” As a result, unless otherwise noted, all information in this Form 10-K related to the JDL and Ecessa businesses is discussed and presented as discontinued operations and the Company’s remaining business operations are reported as continuing operations.
See Note 6 of the Notes to the Consolidated Financial Statements, “Discontinued Operations.” As a result, unless otherwise noted, all information in this Form 10-K related to the JDL and Ecessa businesses is discussed and presented as discontinued operations and the Company’s remaining business operations are reported as continuing operations.
This direct current (“DC”) is sent to an inverter, which converts the DC electricity into alternating-current (“AC”) electricity, which is the type of electricity that is needed to provide power to outlets and run home appliances and equipment The AC flows from the inverter to the home’s main electrical panel, where it is then used to supply the home’s current power needs.
This direct current (“DC”) is sent to an inverter, which converts the DC electricity into alternating-current (“AC”) electricity, which is the type of electricity that is needed to provide power to outlets and run home appliances and equipment The AC flows from the inverter to the home’s main electrical panel, where it is then used to supply the home, business, or institution’s current power needs.
We believe that the following key strengths of our business position us to execute on our M&A roll-up strategy and to distinguish us from competitors. Customer centric approach in market, leading to competitive customer acquisition costs. Pineapple seeks to put the customer above all else.
We believe that the following key strengths of our business position us to execute on our M&A roll-up strategy and to distinguish us from competitors. Customer centric approach in market, leading to competitive customer acquisition costs. SUNation Energy seeks to put the customer above all else.
We already have what we believe are premier referral rates, with over 50% of installed jobs in 2022 and 2023 coming from referrals or repeat customers.
We already have what we believe are premier referral rates, with over 50% of installed jobs in 2023 and 2024 coming from referrals or repeat customers.
We believe the Company has generally been successful implementing proactive measures to protect the health and safety of its employees while maintaining business continuity and high levels of service to our customers. Available Information The Company maintains a website at www.pineappleenergy.com.
We believe the Company has generally been successful implementing proactive measures to protect the health and safety of its employees while maintaining business continuity and high levels of service to our customers. Available Information The Company maintains a website at www.sunation.com/corporate.
To obtain copies of these reports, go to www.ir.pineappleenergy.com and click on “Financial Info,” then click on “Financial Results” to view all of our current EDGAR reports. The SEC also maintains a website that contains reports, proxy and information statements, and other information regarding issuers, like Pineapple, that file electronically with the SEC. The SEC’s website is www.sec.gov.
To obtain copies of these reports, go to www.ir.sunation.com and click on “Financial Info,” then click on “Financial Results” to view all of our current EDGAR reports. The SEC also maintains a website that contains reports, proxy and information statements, and other information regarding issuers, like SUNation Energy, that file electronically with the SEC. The SEC’s website is www.sec.gov.
Human Capital As of March 15, 2024, the Company employed 201 people. We consider our relations with our employees to be good. None of our employees are currently represented by a labor union. The Company aims to attract and retain qualified personnel and provides wages and benefits that are competitive locally to reward employees for performance.
Human Capital As of March 31, 2025, the Company employed 189 people. We consider our relations with our employees to be good. None of our employees are currently represented by a labor union. The Company aims to attract and retain qualified personnel and provides wages and benefits that are competitive locally to reward employees for performance.
Government Incentives Federal, state, and local government bodies provide incentives, including rebates, tax credits, and other financial incentives, to catalyze customer acceptance of solar energy as an alternative to utility-provided power. Some of the most significant federal incentives are expected to come from the Inflation Reduction Act of 2022 (“IRA”). In August 2022, President Biden signed the IRA.
Government Incentives Federal, state, and local government bodies provide incentives, including rebates, tax credits, and other financial incentives, to catalyze customer acceptance of solar energy as an alternative to utility-provided power. 10 Some of the most significant federal incentives are sourced from the Inflation Reduction Act of 2022 (“IRA”).
Intellectual Property We hold registered trademarks for, among others, “Pineapple Energy Inc,” “Hawaii Energy Connection,” “SUNation Solar Systems, Inc.,” “Sungevity,” and “Horizon Solar Power.” These trademarks are important to our regional branding and growth strategy. We hold patents related to E-Gear technologies.
Intellectual Property We hold registered trademarks for, among others, “SUNation”, “SUNation Energy”, “Hawaii Energy Connection,” “SUNation Solar Systems, Inc.,” “Sungevity,” and “Horizon Solar Power.” These trademarks are important to our regional branding and growth strategy.
Corporate History Pineapple is a Minnesota corporation organized in 1969 that operates directly and through its subsidiaries located in the United States (“U.S.”).
Corporate History SUNation Energy is a Delaware corporation originally organized in 1969 that operates directly and through its subsidiaries located in the United States (“U.S.”).
Department of Transportation (“DOT”), and comparable state laws that protect and regulate employee health and safety. We endeavor to maintain compliance with applicable DOT, OSHA, and other comparable government regulations.
For example, we are subject to the requirements of the federal Occupational Safety and Health Act, as amended (“OSHA”), the U.S. Department of Transportation (“DOT”), and comparable state laws that protect and regulate employee health and safety. We endeavor to maintain compliance with applicable DOT, OSHA, and other comparable government regulations.
In almost all cases, interconnection permissions are issued based on a standard process that has been pre-approved by the local public utility commission or other regulatory body with jurisdiction over net metering policies. As such, no additional regulatory approvals are required once interconnection permission is given.
Depending on the size of the solar energy system and local law requirements, interconnection permission is provided by the local utility directly to us and/or our customers. In almost all cases, interconnection permissions are issued based on a standard process that has been pre-approved by the local public utility commission or other regulatory body with jurisdiction over net metering policies.
When bidding for solar installation projects, however, our current experience suggests that there is no clear dominant or preferred competitor in the markets in which we compete. We do not believe that any competitor has more than 25% of market share in the regions in which we operate.
Some of these companies have greater financial resources, operational experience, and technical capabilities than we do. When bidding for solar installation projects, however, our current experience suggests that there is no clear dominant or preferred competitor in the markets in which we compete.
On November 9, 2022, the Company purchased the equity of New York-based SUNation Solar Systems, Inc. and five of its affiliated entities (collectively “SUNation”). Pursuant to the merger agreement, the Company sold substantially all of its JDL Technologies, Inc. (“JDL”) and Ecessa Corporation (“Ecessa”) businesses on June 30, 2023.
On November 9, 2022, the Company purchased the equity of New York-based SUNation Solar Systems, Inc. and five of its affiliated entities (collectively “SUNation”).
The home can continue utilizing the electricity generated by the panels, as well as electricity stored in the battery when the sun is not shining. In addition, the excess production from the panels during the day can be used to recharge a battery that was depleted overnight.
The home can continue utilizing the electricity generated by the panels, as well as electricity stored in the battery when the sun is not shining.
Residential Customers Agreements The majority of Pineapple revenue (81% of 2023 consolidated revenue) comes from photovoltaic solar energy systems and batteries for residential homeowners. The size of our residential installations vary by location. In 2023, the average system size was 6.2 kilowatts for HEC customers in Hawaii and 11.5 kilowatts for SUNation customers in Long Island, New York.
Residential Customers Agreements The majority of SUNation Energy’s revenue (82% of 2024 consolidated revenue) comes from photovoltaic solar energy systems and batteries for residential homeowners. The size of our residential installations vary by location.
Our operations are subject to stringent and complex federal, state, and local laws, including regulations governing the occupational health and safety of our employees and wage regulations. For example, we are subject to the requirements of the federal Occupational Safety and Health Act, as amended (“OSHA”), the U.S.
As such, no additional regulatory approvals are required once interconnection permission is given. Our operations are subject to stringent and complex federal, state, and local laws, including regulations governing the occupational health and safety of our employees and wage regulations.
While these patents are an important part of our intellectual property, we do not consider any to be material to our business. 8 Government Regulation We are not regulated as a public utility in the U.S. under applicable national, state, or other local regulatory regimes where we conduct business.
Government Regulation We are not regulated as a public utility in the U.S. under applicable national, state, or other local regulatory regimes where we conduct business. To install systems, we obtain interconnection permission from the applicable local primary electric utility.
As we continue to grow our customer base, we may have new opportunities for incremental revenue by cross-selling ancillary market products such as more energy storage, smart appliance, energy management software, comfort and lighting and security markets.
As we continue to grow our customer base, we may have new opportunities for incremental revenue generation by cross-selling ancillary market products such as more energy storage and service contracts on orphaned systems (customers whose original solar contractor is no longer in business).
In the Hawaiian market we also offer energy management control devices on solar systems that are paired with batteries.
In addition, the excess production from the panels during the day can be used to recharge a battery that was depleted overnight. 8 In the Hawaiian market we also offer energy management control devices on solar systems that are paired with batteries.
Our chief financial officer has previously scaled a business unit of a public company and was a key M&A finance leader. Our Products and Services The primary product we offer to customers is a photovoltaic solar energy system, which is almost always installed on the roof, although can at times be ground mounted.
Our Products and Services The primary product we offer to customers is a photovoltaic solar energy system, which is almost always installed on the roof, although can at times be ground mounted. Solar panels, also called modules, generate direct-current electricity when they are struck by sunlight.
Historically, most residential homeowners have chosen to own their home system rather than pursue a third-party ownership model. Pineapple believes that it has historically been best for customers to own their own systems, but recognizes that some customers do not want to own their systems.
The Company believes that it has historically been best for customers to own their own systems, but recognizes that some customers do not want to own their systems. For customers pursuing the home ownership model, these customers typically pursue loan financing, although a small proportion pay in cash.
We compete with other solar installers on pricing, service, warranty, and the ability to arrange financing.
We do not believe that any competitor has more than 25% of market share in the regions in which we operate. We compete with other solar installers on pricing, service, warranty, and the ability to arrange financing.
ITEM 1. BUSINESS OVERVIEW Pineapple Energy Inc.’s (herein referred to as “Pineapple,” “PEGY,” “our,” “we” or the “Company”) vision is to power the energy transition through grass-roots growth of solar electricity paired with battery storage. The Company is a growing domestic operator and consolidator of residential and commercial solar, battery storage, and grid services solutions.
ITEM 1. BUSINESS OVERVIEW SUNation Energy, Inc. (herein referred to as “SUNation Energy,” “SUNE,” “our,” “we” or the “Company”) is focused on growing leading local and regional solar, storage, and energy services companies nationwide.
We install systems that provide clean, reliable solar energy typically at savings relative to traditional utility offerings. Our primary customers are residential homeowners. We also provide solar energy systems to commercial owners and other municipal customers.
SUNation Energy, Inc.’s markets are New York, Florida, and Hawaii, and the company operates proudly within three (3) U.S. states. Our primary customers are residential homeowners. We also provide solar energy systems to commercial owners and other municipal customers.
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Our strategy is focused on acquiring, integrating, and growing leading local and regional solar, storage, and energy services companies nationwide. Pineapple is primarily engaged in the sale, design, and installation of photovoltaic solar energy systems and battery storage systems through its Hawaii-based Hawaii Energy Connection (“HEC”) and New York-based SUNation Solar Systems (“SUNation”) entities.
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The SUNation Energy vision is the provision of exemplary client service while powering the energy transition through grass-root, community-centric growth of solar electricity paired with battery storage. Our portfolio of brands (SUNation, Hawaii Energy Connection, E-Gear) provide homeowners and businesses of all sizes with an end-to-end product offering spanning solar, battery storage, and grid services.
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Through its E-Gear, LLC (“E-Gear”) business, Pineapple also develops, manufactures, and sells patented edge-of-grid energy management software and hardware technology, such as energy management control devices. These products allow homeowners to get the most out of their installed photovoltaic solar energy systems and utility grid support benefits. Our primary customers for this technology are energy services companies and other utilities.
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On November 14, 2024, the Company filed articles of conversion with the Secretary of State of the State of Minnesota and filed a certificate of conversion with the Secretary of State of the State of Delaware changing its jurisdiction of incorporation from Minnesota to Delaware (the “Reincorporation”), as well as having filed a Certificate of Incorporation with the Secretary of State of the State of Delaware on this same date.
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Our founder and chief executive officer previously led various marketing, digital, product, and customer experience functions at the two largest U.S. residential solar companies. Our senior executive in charge of products and technology has more than a decade of experience in residential solar development, manufacturing, and sales.
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Concurrently with the Reincorporation, the Company also effectuated a change to its name from Pineapple Energy, Inc. to SUNation Energy, Inc., and to its stock trading symbol from PEGY to SUNE, effective November 19, 2024. Pursuant to the merger agreement, the Company sold substantially all of its JDL Technologies, Inc. (“JDL”) and Ecessa Corporation (“Ecessa”) businesses on June 30, 2023.
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Solar panels, also called modules, generate direct-current electricity when they are struck by sunlight.
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Our chief executive officer grew our New York business into the third largest solar provider in one of the most dynamic markets in the country. Our chief operating officer and chief financial officer is a seasoned leader in the M&A, finance and solar spaces.
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A “dealer fee” is typically rolled into the principal balance, and that amount is amortized over the tenure of the loan. Customers will pay for this amount financed plus a finance charge through a monthly payment to a financing supplier.
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In 2024, the average system size installed was 6.1 kilowatts for HEC customers in Hawaii and 11.4 kilowatts for SUNation’s regional customers on Long Island, New York. Historically, most residential homeowners have chosen to own their home system rather than pursue a third-party ownership model.
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Under the customer loan scenario, Pineapple receives cash payments from the loan company upon completion of various milestones during the installation process. Competition In the solar installation market, we compete with companies that offer products like ours. Some of these companies have greater financial resources, operational experience, and technical capabilities than we do.
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Customers will pay for this amount financed plus a finance charge through a monthly payment to a financing supplier. Under the customer loan scenario, we receive cash payments from the loan company upon completion of various milestones during the installation process. In addition to our residential offerings, the Company has a distinct roofing business within the New York market.
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To install systems, we obtain interconnection permission from the applicable local primary electric utility. Depending on the size of the solar energy system and local law requirements, interconnection permission is provided by the local utility directly to us and/or our customers.
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This division offers vertically integrated roofing services alongside our solar and storage options. Thanks to this distinction, our roofing services allow for the diversification of our product offerings, offering our regional business the chance for additional revenue opportunities.
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To showcase workmanship and the Company’s commitment to quality, the Company has worked alongside General Aniline & Film (“GAF”), a respected industry leader in the roofing field, to climb up their partnership ranks. Since launch, the Company has reached the upper echelon of GAF installer status tiers and is being recognized for its quality work in the field.
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Commercial and Industrial Contracts SUNation Energy, through its regional business entities, actively develops and installs photovoltaic (PV) arrays and other renewable energy solutions for commercial, industrial, and institutional facilities across both the New York and Hawaii markets.
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Projects span a wide range of property types—including office buildings, warehouses, schools, and non-profit organizations—and are tailored to meet customer needs through various system configurations, including rooftop installations, ground-mounted arrays, and solar carports.
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The nature of the commercial business is highly complex, and has a significantly different timeline, permitting process, and labor standards as compared to solar development and deployment in the residential spaces.
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As a result of these complex nuances, the Company has a seasoned commercial leadership team that oversees a dedicated department whose sole focus is on operations, installation, project management and development of commercial, institutional, and industrial sites.
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In addition to the development of commercial projects, the Company has worked with stakeholders in the private and public sectors to offer community solar, which distributes the benefits of renewable energy that is produced on larger sites to ratepayers who have opted in at a competitively-priced market rate, as well as shaping policy actions across the local, state, and federal governments that are favorable towards the mass adoption of green technology.
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As a result of the U.S. Inflation Reduction Act, which was passed by Congress and signed into law by then-President Joe Biden in 2022, commercial solar opportunities have grown as more institutional uses, including churches, private schools, and non-profit organizations, have become both eligible and aware of governmental incentives to enhance solar adoption across the country.
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Service of Existing and Orphaned Systems SUNation Energy, through its regional businesses, also offers service, repair and preventative maintenance of solar systems, batteries, and other related components.
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Within the industry, these service operations are a unique differentiator that sets the Company apart from its peers as most solar operators in the Company’s key markets do not seek to maintain and/or monitor the performance of existing systems for their customers and/or non-customers. 9 The Company actively services and repairs the systems of competitor systems, as is technically feasible based on component type, age, and staff qualifications and training.
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With over twenty years in business, the Company has found that as other solar providers have exited the market or have gone out of business, there has been ample consumer demand for these types of services, and these operations offer enhanced and diversified revenue opportunities. Competition In the solar installation market, we compete with companies that offer products like ours.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOn October 27, 2023, we received a notice from the Listing Qualifications Department of the Nasdaq Stock Market informing us that because the closing bid price for our common stock listed on Nasdaq was below $1.00 per share for the last 31 consecutive business days, we did not comply with the minimum closing bid price requirement for continued listing on The Nasdaq Capital Market under Nasdaq Marketplace Rule 5550(a)(2) (the "Minimum Bid Rule").
Biggest changeOn April 11, 2025, we received a new non-compliance notice notifying the Company that, for the 30 consecutive business day period immediately preceding deficiency letter, the Company’s common stock had not maintained a minimum closing bid price of $1.00 per share (the “Minimum Bid Price Requirement”) and, as a result, does not comply with Listing Rule 5550(a)(2) (the “Rule”).
The process of designing and implementing and maintaining effective internal controls for newly acquired businesses has required and is expected to continue to require significant resources of the Company.
The process of designing and implementing and maintaining effective internal controls for newly acquired businesses has required and is expected to continue to require significant resources of the Company.
We have concluded that we have material weaknesses in our internal controls due to our limited accounting and finance resources which resulted in inappropriate preparation, review and maintenance of documentation critical to the design and consistent execution of internal controls. Due to limited staffing, it can be challenging to properly prepare, review and maintain appropriate documentation critical to the process.
We have concluded that we have material weaknesses in our internal controls due to our limited accounting and finance resources which resulted in inappropriate preparation, review and maintenance of documentation critical to the design and consistent execution of internal controls. Due to limited staffing, it can be challenging to properly prepare, review and maintain appropriate documentation critical to the process.
These risks include the following, among others: ‎ Failure to satisfy the required conditions and otherwise complete a planned acquisition, joint venture or other strategic transaction on a timely basis or at all; Legal or regulatory proceedings, if any, relating to a planned acquisition, joint venture or other strategic transaction and the outcome of such legal proceedings; Difficulty in assimilating the operations, systems, and personnel of the acquired company; Difficulty in effectively integrating the acquired technologies or products with our current products and technologies; Difficulty in maintaining controls, procedures and policies during the transition and integration; Disruption of our ongoing business and distraction of our management and employees from other opportunities and challenges due to integration issues; Difficulty integrating the acquired company’s accounting, management information and other administrative systems; Inability to retain key technical and managerial personnel of the acquired business; Inability to retain key customers, vendors and other business partners of the acquired business; Inability to achieve the financial and strategic goals for the acquired and combined businesses; Incurring acquisition-related costs or amortization costs for acquired intangible assets that could impact our results of operations; Significant post-acquisition investments which may lower the actual benefits realized through the acquisition; Potential failure of the due diligence processes to identify significant issues with product quality, legal, and financial liabilities, among other things; Moderating and anticipating the impacts of inherent or emerging seasonality in acquired customer agreements; Potential inability to assert that internal controls over financial reporting are effective; and Potential inability to obtain, or obtain in a timely manner, approvals from governmental authorities, which could delay or prevent such acquisitions. ‎ Our failure to address these risks, or other problems encountered in connection with our past or future investments, strategic transactions, or acquisitions, could cause us to fail to realize the anticipated benefits of these acquisitions or investments, cause us to incur unanticipated liabilities, and harm our business generally.
These risks include the following, among others: ‎ Failure to satisfy the required conditions and otherwise complete a planned acquisition, joint venture or other strategic transaction on a timely basis or at all; Legal or regulatory proceedings, if any, relating to a planned acquisition, joint venture or other strategic transaction and the outcome of such legal proceedings; 17 Difficulty in assimilating the operations, systems, and personnel of the acquired company; Difficulty in effectively integrating the acquired technologies or products with our current products and technologies; Difficulty in maintaining controls, procedures and policies during the transition and integration; Disruption of our ongoing business and distraction of our management and employees from other opportunities and challenges due to integration issues; Difficulty integrating the acquired company’s accounting, management information and other administrative systems; Inability to retain key technical and managerial personnel of the acquired business; Inability to retain key customers, vendors and other business partners of the acquired business; Inability to achieve the financial and strategic goals for the acquired and combined businesses; Incurring acquisition-related costs or amortization costs for acquired intangible assets that could impact our results of operations; Significant post-acquisition investments which may lower the actual benefits realized through the acquisition; Potential failure of the due diligence processes to identify significant issues with product quality, legal, and financial liabilities, among other things; Moderating and anticipating the impacts of inherent or emerging seasonality in acquired customer agreements; Potential inability to assert that internal controls over financial reporting are effective; and Potential inability to obtain, or obtain in a timely manner, approvals from governmental authorities, which could delay or prevent such acquisitions. ‎ Our failure to address these risks, or other problems encountered in connection with our past or future investments, strategic transactions, or acquisitions, could cause us to fail to realize the anticipated benefits of these acquisitions or investments, cause us to incur unanticipated liabilities, and harm our business generally.
The price of electricity from utilities could decrease for any one or more reasons, including but not limited to: the construction of a significant number of new power generation plants, whether generated by natural gas, nuclear power, coal or renewable energy; the construction of additional electric transmission and distribution lines; a reduction in the price of natural gas or other natural resources as a result of increased supply due to new drilling techniques or other technological developments; a relaxation of associated regulatory standards or broader economic or policy developments; less demand for electricity due to energy conservation technologies and public initiatives to reduce electricity consumption or to recessionary economic conditions; and development of competing energy technologies that provide less expensive energy. ‎ A reduction in electric utilities’ rates or changes to peak hour pricing policies or rate design (such as the adoption of a fixed or flat rate or adding fees to homeowners that have residential solar systems) could also make the Company’s offerings less competitive with the price of electricity from the electrical grid.
The price of electricity from utilities could decrease for any one or more reasons, including but not limited to: the construction of a significant number of new power generation plants, whether generated by natural gas, nuclear power, coal or renewable energy; the construction of additional electric transmission and distribution lines; a reduction in the price of natural gas or other natural resources as a result of increased supply due to new drilling techniques or other technological developments; a relaxation of associated regulatory standards or broader economic or policy developments; less demand for electricity due to energy conservation technologies and public initiatives to reduce electricity consumption or to recessionary economic conditions; and development of competing energy technologies that provide less expensive energy. ‎ A reduction in electric utilities’ rates or changes to peak hour pricing policies or rate design (such as the adoption of a fixed or flat rate or adding fees to homeowners that have residential solar systems) could also make the Company’s offerings less competitive with the 23 price of electricity from the electrical grid.
In addition to the other risks described in this section, the following factors could cause the Company’s operating results to fluctuate: expiration or initiation of any governmental rebates or incentives; significant fluctuations in customer demand for the Company’s solar energy systems; our ability to continue to expand the Company’s operations and the amount and timing of expenditures related to this expansion; announcements by the Company or its competitors of significant acquisitions; strategic partnerships, joint ventures or capital-raising activities or commitments; price of materials and supplies; availability and cost of labor; changes in the Company’s pricing policies or terms or those of its competitors, including centralized electric utilities; actual or anticipated developments in the Company’s competitors’ businesses; technology or the competitive landscape; and 15 natural disasters or other weather or meteorological conditions. ‎ For these or other reasons, past performance should not be relied upon as indications of the Company’s future performance.
In addition to the other risks described in this section, the following factors could cause the Company’s operating results to fluctuate: expiration or initiation of any governmental rebates or incentives; significant fluctuations in customer demand for the Company’s solar energy systems; our ability to continue to expand the Company’s operations and the amount and timing of expenditures related to this expansion; announcements by the Company or its competitors of significant acquisitions; strategic partnerships, joint ventures or capital-raising activities or commitments; price of materials and supplies; availability and cost of labor; changes in the Company’s pricing policies or terms or those of its competitors, including centralized electric utilities; actual or anticipated developments in the Company’s competitors’ businesses; technology or the competitive landscape; and natural disasters or other weather or meteorological conditions. ‎ For these or other reasons, past performance should not be relied upon as indications of the Company’s future performance.
If the Company were subject to the same state or federal regulatory authorities as centralized electric utilities in the U.S. and its territories or if new regulatory bodies were established to oversee its business in the U.S. and its territories or in foreign markets it enters, its operating costs would materially increase or it might have to change its business in ways that could have a material adverse effect on its business, financial condition and results of operations.
If the Company were subject to the same state 24 or federal regulatory authorities as centralized electric utilities in the U.S. and its territories or if new regulatory bodies were established to oversee its business in the U.S. and its territories or in foreign markets it enters, its operating costs would materially increase or it might have to change its business in ways that could have a material adverse effect on its business, financial condition and results of operations.
The Company’s articles of incorporation authorize the board of directors, without the approval of the Company shareholders, to issue up to 3,000,000 shares of preferred stock, subject to limitations prescribed by applicable law, rules and regulations and the provisions of the articles of incorporation, as shares of preferred stock in series, to establish from time to time the number of shares to be included in each such series and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof.
The Company’s articles of incorporation authorize the board of directors, without the approval of the Company shareholders, to issue up to 3,000,000 shares of preferred stock, subject to limitations prescribed by applicable law, rules and regulations and the provisions 14 of the articles of incorporation, as shares of preferred stock in series, to establish from time to time the number of shares to be included in each such series and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof.
Delays in interconnections could also harm the Company’s growth rate and customer satisfaction scores. 23 As adoption of solar distributed generation rises, along with the increased operation of utility-scale solar generation (such as in key markets including California), the amount of solar energy being contributed to the electrical grid may surpass the capacity anticipated to be needed to meet aggregate demand.
Delays in interconnections could also harm the Company’s growth rate and customer satisfaction scores. As adoption of solar distributed generation rises, along with the increased operation of utility-scale solar generation (such as in key markets including California), the amount of solar energy being contributed to the electrical grid may surpass the capacity anticipated to be needed to meet aggregate demand.
Significant developments in technology, such as advances in distributed solar power generation, energy storage solutions such as batteries, energy storage management systems, the widespread use or adoption of fuel cells for residential or commercial properties or 20 improvements in other forms of distributed or centralized power production may materially and adversely affect demand for the Company’s offerings and otherwise affect its business.
Significant developments in technology, such as advances in distributed solar power generation, energy storage solutions such as batteries, energy storage management systems, the widespread use or adoption of fuel cells for residential or commercial properties or improvements in other forms of distributed or centralized power production may materially and adversely affect demand for the Company’s offerings and otherwise affect its business.
This may limit the Company’s ability to acquire new customers, particularly those who have an objection to putting solar panels on their roofs. The Company also competes with solar companies with business models similar to its own, that market to similar potential customers. Some of these competitors specialize in the distributed residential solar energy market.
This 22 may limit the Company’s ability to acquire new customers, particularly those who have an objection to putting solar panels on their roofs. The Company also competes with solar companies with business models similar to its own, that market to similar potential customers. Some of these competitors specialize in the distributed residential solar energy market.
However, these programs may expire on a particular date, end when the allocated funding is exhausted or be reduced or terminated as solar energy adoption rates increase. A loss or reduction in such incentives could decrease the attractiveness of new solar energy systems to customers, which could adversely impact the Company’s business.
However, these programs may expire on a particular date, end when the allocated funding is exhausted or be reduced or terminated as solar energy adoption rates increase. 25 A loss or reduction in such incentives could decrease the attractiveness of new solar energy systems to customers, which could adversely impact the Company’s business.
These jurisdictions, by statute, regulation, administrative order or a combination thereof, have recently adopted or are considering new restrictions and 22 additional changes to net metering programs either on a state-wide basis or within specific utility territories. Many of these measures were introduced and supported by centralized electric utilities.
These jurisdictions, by statute, regulation, administrative order or a combination thereof, have recently adopted or are considering new restrictions and additional changes to net metering programs either on a state-wide basis or within specific utility territories. Many of these measures were introduced and supported by centralized electric utilities.
If the Company cannot manage its hiring and training processes to avoid or minimize these issues to the extent possible, its reputation may be harmed and its ability to attract new customers would suffer. The loss of one or more members of the Company’s senior management or key employees may adversely affect its ability to implement its strategy.
If the Company cannot manage its hiring and training processes to avoid or minimize these issues to the extent possible, its reputation may be harmed and its ability to attract new customers would suffer. 19 The loss of one or more members of the Company’s senior management or key employees may adversely affect its ability to implement its strategy.
This growth may place a strain on the Company’s management, operational and financial infrastructure. The Company’s growth requires management to devote a significant amount of time and effort to maintain and expand 13 its relationships with customers and third parties, attract new customers, arrange financing for its growth and manage its expansion into additional markets.
This growth may place a strain on the Company’s management, operational and financial infrastructure. The Company’s growth requires management to devote a significant amount of time and effort to maintain and expand its relationships with customers and third parties, attract new customers, arrange financing for its growth and manage its expansion into additional markets.
The successful assertion of product liability claims against the Company could result in potentially significant monetary damages, potential increases in insurance expenses, penalties or fines, subject it to adverse publicity, damage its reputation and competitive position and adversely affect sales of solar energy systems.
The successful assertion 18 of product liability claims against the Company could result in potentially significant monetary damages, potential increases in insurance expenses, penalties or fines, subject it to adverse publicity, damage its reputation and competitive position and adversely affect sales of solar energy systems.
Any failure, or perceived failure, by the Company to comply with any regulatory requirements or international privacy or consumer protection-related laws and regulations could result in proceedings or actions against it by governmental entities or others, subject it to significant penalties and negative publicity and adversely affect us.
Any failure, or perceived failure, by the Company to comply with any regulatory requirements or international privacy or consumer protection-related laws and regulations could result in proceedings or actions against it by governmental entities or others, subject it to significant penalties and negative 20 publicity and adversely affect us.
As a result, the Company requires a dditional funding and seeks to raise capital through sources that may include public or private equity offerings, debt financings and/or strategic alliances. However, additional funding may not be available on terms acceptable to the Company, or at all.
As a result, the Company requires a dditional funding and seeks to raise 15 capital through sources that may include public or private equity offerings, debt financings and/or strategic alliances. However, additional funding may not be available on terms acceptable to the Company, or at all.
The Company depends on its experienced management team and the loss of one or more key executives could have a negative impact on its business. The Company may be unable to replace key members of its management team and key employees if it loses their 17 services.
The Company depends on its experienced management team and the loss of one or more key executives could have a negative impact on its business. The Company may be unable to replace key members of its management team and key employees if it loses their services.
The White House initiated this “bridge” action in advance of the Department of Commerce’s preliminary decision, in effect guaranteeing no new solar tariffs for 24 months. Nonetheless, the Department’s investigation had the effect of increasing module prices and affected supply.
The White House initiated this “bridge” action in advance of the Department of Commerce’s preliminary decision, in effect guaranteeing no new solar tariffs for 24 months. Nonetheless, the 16 Department’s investigation had the effect of increasing module prices and affected supply.
Given that the Company receives, stores and 18 uses personal information of its customers, including names, addresses, e-mail addresses, credit information, credit card and financial account information and other housing and energy use information, this risk is amplified.
Given that the Company receives, stores and uses personal information of its customers, including names, addresses, e-mail addresses, credit information, credit card and financial account information and other housing and energy use information, this risk is amplified.
Any need to transition to a new supplier may result in additional costs and delays in 14 originating solar installation agreements and deploying its related solar energy systems, which in turn may result in additional costs and delays in its acquisition of such solar installation agreements and related solar energy systems.
Any need to transition to a new supplier may result in additional costs and delays in originating solar installation agreements and deploying its related solar energy systems, which in turn may result in additional costs and delays in its acquisition of such solar installation agreements and related solar energy systems.
The consummation and timing of any future acquisitions will depend upon, among other things, whether the Company is able to: identify attractive acquisition candidates; negotiate economically acceptable purchase agreements; obtain any required governmental or third-party consents; obtain financing for these acquisitions on economically acceptable terms; which may be more difficult at times when the capital markets are less accessible; and outbid any competing bidders. ‎ Additionally, any acquisition involves potential risks, including, among other things: mistaken assumptions about assets, revenues and expenses of the acquired company, including synergies and potential growth; an inability to successfully integrate the assets or businesses the Company acquires; coordinating geographically disparate organizations, systems and facilities; 16 the assumption of unknown liabilities for which the Company is not indemnified or for which its indemnity is inadequate; mistaken assumptions about the acquired company’s suppliers or other vendors; the diversion of management’s and employees’ attention from other business concerns; unforeseen difficulties operating in new geographic areas and business lines; customer or key employee losses at the acquired business; and poor quality assets or installation. ‎ If the Company consummates future acquisitions, its capitalization, results of operations and future growth may change significantly and its shareholders may not have the opportunity to evaluate the economic, financial and other relevant information considered in deciding to engage in these future acquisitions.
The consummation and timing of any future acquisitions will depend upon, among other things, whether the Company is able to: identify attractive acquisition candidates that are accretive and net profitable; negotiate economically acceptable purchase agreements; obtain any required governmental or third-party consents; obtain financing for these acquisitions on economically acceptable terms; which may be more difficult at times when the capital markets are less accessible; and outbid any competing bidders. ‎ Additionally, any acquisition involves potential risks, including, among other things: mistaken assumptions about assets, revenues and expenses of the acquired company, including synergies and potential growth; an inability to successfully integrate the assets or businesses the Company acquires; coordinating geographically disparate organizations, systems and facilities; the assumption of unknown liabilities for which the Company is not indemnified or for which its indemnity is inadequate; mistaken assumptions about the acquired company’s suppliers or other vendors; the diversion of management’s and employees’ attention from other business concerns; unforeseen difficulties operating in new geographic areas and business lines; customer or key employee losses at the acquired business; and poor quality assets or installation. ‎ If the Company consummates future acquisitions, its capitalization, results of operations and future growth may change significantly and its shareholders may not have the opportunity to evaluate the economic, financial and other relevant information considered in deciding to engage in these future acquisitions.
Our management concluded that our disclosure controls and procedures and our internal control over financial reporting were not effective as of December 31, 2023 due to material weaknesses in internal control over financial reporting.
Our management concluded that our disclosure controls and procedures and our internal control over financial reporting were not effective as of December 31, 2024 and 2023 due to material weaknesses in internal control over financial reporting.
Solar energy system 19 component and raw material prices may not continue to decline at the same rate as they have over the past several years or at all.
Solar energy system component and raw material prices may not continue to decline at the same rate as they have over the past several years or at all.
These types of risks could harm the Company’s business, financial condition and results of operations. 21 Risks Related to Regulations Increases in the cost of the Company’s solar energy systems due to tariffs imposed by the U.S. government could have a material adverse effect on its business, financial condition and results of operations.
These types of risks could harm the Company’s business, financial condition and results of operations. Risks Related to Regulations Increases in the cost of the Company’s solar energy systems due to tariffs imposed by the U.S. and foreign government could have a material adverse effect on its business, financial condition and results of operations.
Increases in the cost of the Company’s solar energy systems due to tariffs and other trade restrictions imposed by the U.S. government could have a material adverse effect on its business, financial condition and results of operations. The United States has often considered tariffs on industry-related goods imported from other countries.
Increases in the cost of the Company’s solar energy systems due to tariffs and other trade restrictions imposed by the U.S. and foreign governments could have a material adverse effect on its business, financial condition and results of operations. The United States has often considered tariffs on industry-related goods imported from other countries.
If the Company is unable to make acquisitions on economically acceptable terms, its future growth would be limited, and any acquisitions it may make could reduce, rather than increase, its cash flows.
If the Company is unable to make net profitable acquisitions on economically acceptable terms, its future growth would be limited, and any acquisitions it may make could reduce, rather than increase, its cash flows.
Factors that may have a significant impact on the market price and marketability of the Company’s common stock include, among others: public reaction to the Company’s press releases, announcements and filings with the SEC; the Company’s operating and financial performance; fluctuations in broader securities market prices and volumes, particularly among securities of technology and solar companies; changes in market valuations of similar companies; departures of key personnel; commencement of or involvement in litigation; variations in the Company’s quarterly results of operations or those of other technology and solar companies; 11 changes in general economic conditions, financial markets or the technology and solar industries; announcements by the Company or its competitors of significant acquisitions or other transactions; changes in accounting standards, policies, guidance, interpretations or principles; speculation in the press or investment community; actions by the Company’s shareholders, particularly relating to the Company’s common stock; the failure of securities analysts to cover the Company’s common stock or changes in their recommendations and estimates of its financial performance; future sales of the Company’s common stock; the delisting of the Company’s common stock or halting or suspension of trading in its common stock by the Nasdaq Stock Market; economic and other external factors, such as the COVID-19 pandemic; and general market conditions.
Factors that may have a significant impact on the market price and marketability of the Company’s common stock include, among others: public reaction to the Company’s press releases, announcements and filings with the SEC; the Company’s operating and financial performance; fluctuations in broader securities market prices and volumes, particularly among securities of technology and solar companies; changes in market valuations of similar companies; departures of key personnel; 13 commencement of or involvement in material litigation; variations in the Company’s quarterly results of operations or those of other technology and solar companies; changes in general economic conditions, financial markets or the technology and solar industries; announcements by the Company or its competitors of significant acquisitions or other transactions; changes in accounting standards, policies, guidance, interpretations or principles; speculation in the press or investment community; actions by the Company’s shareholders, particularly relating to the Company’s common stock; the failure of securities analysts to cover the Company’s common stock or changes in their recommendations and estimates of its financial performance; future sales of the Company’s common stock; the delisting of the Company’s common stock or halting or suspension of trading in its common stock by the Nasdaq Stock Market; economic and other external factors such as global conflicts, trade wars and the impacts of domestic and foreign tariffs on supplies, parts and other solar related materials and components; and general market conditions.
Failure to implement or maintain effective internal control over financial reporting and disclosure controls and procedures required of public companies could also restrict the Company’s future access to the capital markets. The price of the Company’s common stock may be volatile and may decline in value.
Failure to implement or maintain effective internal control over financial reporting and disclosure controls and procedures required of public companies could also restrict the Company’s future access to the capital markets. The price of the Company’s common stock and trading volume may be volatile and may negatively impact shareholders’ value of their investment.
If shareholders of the Company, sell, or indicate an intention to sell, substantial amounts of the Company’s common stock in the public market, the trading price of the common stock of the Company could decline.
Future sales of Company shares or securities exercisable for shares could cause the Company’s stock price to decline. If shareholders of the Company, sell, or indicate an intention to sell, substantial amounts of the Company’s common stock in the public market, the trading price of the common stock of the Company could decline.
During 2024 through March 15, 2024, the sale price of common stock ranged from $0.05 to $0.63 per share, and our daily trading volume ranged from 8,000 to approximately 49.5 million shares. This volatility may, in part, be the result of broad market and industry factors.
During 2024 through March 15, 2025, the sale price of common stock ranged from $0.16 to $480 per share, and our daily trading volume ranged from 11 to approximately 514.0 million shares. This volatility may, in part, be the result of broad market and industry factors.
Furthermore, the losses insured through commercial insurance are subject to the credit risk of those insurance companies. The Company may not be able to maintain or obtain insurance of the type and amount it desires at reasonable rates. The insurance coverage the Company does obtain may contain large deductibles or fail to cover certain risks or all potential losses.
The Company may not be able to maintain or obtain insurance of the type and amount it desires at reasonable rates. The insurance coverage the Company does obtain may contain large deductibles or fail to cover certain risks or all potential losses.
If alternative sources are not available on competitive terms in the future, the Company may seek to purchase these products from manufacturers in China.
The tariff increases took effect on January 1, 2025. If alternative sources are not available on competitive terms in the future, the Company may seek to purchase these products from manufacturers in China.
The Company’s business prospects are dependent in part on a continuing decline in the cost of solar energy system components and the Company’s business may be adversely affected to the extent the cost of these components stabilize or increase in the future.
The Company’s business prospects are dependent in part on a continuing decline in the cost of solar energy system components and the Company’s business may be adversely affected to the extent the cost of these components stabilize or increase in the future, whether through international supply disruptions, conflicts, trade wars, new tariffs or otherwise.
These laws and regulations are subject to change and modification by statute, administrative rules and orders, and judicial interpretation. As a result of infrequent or sparse interpretations, ambiguities in these laws and regulations may create uncertainty with respect to what type of conduct is permitted or restricted under such laws and regulations.
As a result of infrequent or sparse interpretations, ambiguities in these laws and regulations may create uncertainty with respect to what type of conduct is permitted or restricted under such laws and regulations.
The Company may issue additional common stock resulting in stock ownership dilution. As of March 15, 2024, we had 64,927,119 shares of common stock outstanding.
The Company may issue additional common stock resulting in stock ownership dilution. As of April 11, 2025, we had 646,282,496 shares of common stock outstanding.
If the Company is unable to raise additional funds, it would have a negative impact on the Company’s business, results of operations and financial condition. Raising additional capital may be costly or difficult to obtain and could significantly dilute the Company’s shareholders’ ownership interests or inhibit the Company’s ability to achieve its business objectives.
Raising additional capital may be costly or difficult to obtain and could significantly dilute the Company’s shareholders’ ownership interests or inhibit the Company’s ability to achieve its business objectives.
There are an additional 911,404 shares reserved for issuance upon the settlement of outstanding restricted stock units, 271,090 shares available for grant under the 2022 Equity Incentive Plan, and 415,005 shares available for issuance under the 2022 Employee Stock Purchase Plan. Accordingly, our shareholders may experience future dilution, which may be substantial .
There are an additional 264 shares reserved for issuance upon the settlement of outstanding restricted stock units, 12,482 shares available for grant under the 2022 Equity Incentive Plan, and 400 shares available for issuance under the 2022 Employee Stock Purchase Plan.
Furthermore, the receipt of insurance proceeds may be delayed, requiring the Company to use cash or incur financing costs in the interim. To the extent the Company experiences covered losses under its insurance policies, the limit of its coverage for potential losses may be decreased or the insurance rates it has to pay increased.
To the extent the Company experiences covered losses under its insurance policies, the limit of its coverage for potential losses may be decreased or the insurance rates it has to pay increased. Furthermore, the losses insured through commercial insurance are subject to the credit risk of those insurance companies.
Individuals hired by or on behalf of the Company may have workplace accidents and receive citations from OSHA regulators for alleged safety violations, resulting in fines. Any such accidents, citations, violations, injuries or failure to comply with industry best practices may subject the Company to adverse publicity, damage its reputation and competitive position and adversely affect its business.
Individuals hired by or on behalf of the Company may have workplace accidents and receive citations from OSHA regulators for alleged safety violations, resulting in fines.
Our business is subject to consumer protection laws. Such laws and regulatory enforcement policies and priorities are subject to change, which may negatively impact our business. We must comply with various international, federal, state, and local regulatory regimes, including those applicable to consumer credit transactions, leases, and marketing activities.
We must comply with various international, federal, state, and local regulatory regimes, including those applicable to consumer credit transactions, leases, and marketing activities. These laws and regulations are subject to change and modification by statute, administrative rules and orders, and judicial interpretation.
Actual events and results may differ materially from those expressed or forecasted in forward-looking statements due to a number of factors, including those factors discussed below.
Actual events and results may differ materially from those expressed or forecasted in forward-looking statements due to a number of factors, including those factors discussed below. Risks Related to the Company’s Common Stock Our shares will be subject to potential delisting if we do not maintain the listing requirements of the Nasdaq Capital Market.
The Company will not be able to insure against all potential risks and it may become subject to higher insurance premiums. The Company’s insurance policies do not cover all potential losses and coverage is not always available in the insurance market on commercially reasonable terms.
The Company’s insurance policies do not cover all potential losses and coverage is not always available in the insurance market on commercially reasonable terms. Furthermore, the receipt of insurance proceeds may be delayed, requiring the Company to use cash or incur financing costs in the interim.
In addition, we may raise additional capital through the sale of equity or convertible debt securities, which would further dilute the ownership interests of our shareholders.
In addition, we may raise additional capital through the sale of equity or convertible debt securities, which would further dilute the ownership interests of our shareholders. As of April 11, 2025, there are currently 156,752,190 shares reserved for issuance upon the exercise of the remaining outstanding Series A and Series B Warrants.
Any disruptions to these specific states or regional areas may impact the Company’s operations and financial results. Risks Related to the Solar Industry If sufficient additional demand for residential solar energy systems does not develop or takes longer to develop than the Company anticipates, its ability to originate solar installation agreements may decrease.
We may be forced to sell material assets to satisfy such judgment, which may, in turn, force us to reduce or discontinue our operations. 21 Risks Related to the Solar Industry If sufficient additional demand for residential solar energy systems does not develop or takes longer to develop than the Company anticipates, its ability to originate solar installation agreements may decrease.
Anti-takeover provisions in the Company’s organizational documents and agreements may discourage or prevent a change in control, even if a sale of the Company could be beneficial to the Company’s shareholders, which could cause its stock price to decline and prevent attempts by the Company’s shareholders to replace or remove its current management.
Anti-Takeover Effects of Delaware Law, the Certificate of Incorporation and the Bylaws may discourage or prevent a change in control, even if beneficial to our shareholders and could cause our stock price to decline.
The Company’s board of directors is authorized to issue and designate shares of preferred stock without shareholder approval.
These provisions also may promote the continuity of our management by making it more difficult for a person to remove or change the incumbent members of our board of directors. The Company’s board of directors is authorized to issue and designate shares of preferred stock without shareholder approval.
Based on the Company’s current financial position, including the approximately $1.8 million of cash, restricted cash, cash equivalents and investments that are restricted under the Company’s contingent value rights (“CVR”) agreement and cannot be used by the Company for its own working capital needs , the Company’s forecasted future cash flows for twelve months beyond the date of issuance of the financial statements in this report indicate that the Company will not have sufficient cash to make the first earnout payment in the second quarter of 2024 under the SUNation Transaction Agreement or the first principal payment of the long-term note that is due on November 9, 2024 .
Based on the Company’s current financial position, which includes approximately $0.3 million of restricted cash, cash equivalents and investments that are restricted under the CVR agreement and cannot be used by the Company for its own working capital needs, and the Company’s forecasted future cash flows for twelve months beyond the date of issuance of these financial statements, substantial doubt exists around the Company’s ability to continue as a going concern for a reasonable period of time.
Our common stock is currently listed on The Nasdaq Capital Market. In order to maintain this listing, we must satisfy minimum financial and other requirements.
The shares of our common stock are listed on the Nasdaq Capital Market, or Nasdaq. Nasdaq has rules for continued listing, including, without limitation, minimum market capitalization and other requirements.
Removed
Risks Related to the Company’s Common Stock Our failure to maintain compliance with the Nasdaq Stock Market’s continued listing requirements could result in the delisting of our common stock , which could negatively affect the market price of our common stock, our liquidity and our ability to raise capital .
Added
Failure to maintain our listing, or de-listing from Nasdaq, would make it more difficult for shareholders to dispose of our common stock and more difficult to obtain accurate price quotations 11 on our common stock. This could have an adverse effect on the price of our common stock.
Removed
In accordance with Nasdaq’s Listing Rules, we have a period of 180 calendar days, or until April 24, 2024, to regain compliance with the Minimum Bid Rule.
Added
Our ability to issue additional securities for financing or other purposes, or otherwise to arrange for any financing we may need in the future, may also be materially and adversely affected if our common stock is not traded on a national securities exchange.
Removed
Additionally, on February 27, 2024, the Staff issued another notice (the “February Notice”) notifying us that our common stock had a closing bid price of $0.10 or less for 10 consecutive trading days (February 12, 2024 to February 26, 2024). Accordingly, the Company is subject to the provisions contemplated under Nasdaq Listing Rule 5810(c)(3)(A)(iii) (the “Low Priced Stock Rule”).
Added
Normally, a company would be afforded a 180-calendar day period (“Cure Period”) to demonstrate compliance with such deficiency; however, pursuant to Listing Rule 5810(c)(3)(A)(iv), the Company is not eligible for a customary Cure Period specified in Rule 5810(c)(3)(A) due to the fact that the Company has effected a reverse stock split over the prior one-year period or has effected one or more reverse stock splits over the prior two-year period with a cumulative ratio of 250 shares or more to one..
Removed
As a result, the Staff had determined to delist the Company’s securities from Nasdaq effective as of the opening of business on March 7, 2024, unless the Company requested an appeal before the Nasdaq Hearings Panel (the “Panel”) of the Staff’s determination by March 5, 2024.
Added
Instead, the Company is offered an opportunity to appeal any deficiency related to a delisting determination to Nasdaq within seven days from receipt of the non-compliance notice. Accordingly, unless the Company timely requests a hearing before a Hearings Panel, the Company’s securities would be subject to suspension/delisting. The Company intends to timely request a hearing before the Hearing Panel.
Removed
The Company requested a hearing before the Panel to appeal the February Notice, and Nasdaq has scheduled the hearing for April 30, 2024. Accordingly, the delisting action has been stayed, pending a final written decision by the Panel.
Added
While the hearing request will automatically stay any suspension or delisting action pending the hearing and the expiration of any additional extension period if granted by the Panel following the hearing, there can be no assurance that the Panel will grant the Company an additional extension period or that the Company will ultimately regain compliance with all applicable requirements for continued listing on The Nasdaq Capital Market.
Removed
There can be no assurances that the Company will be able to regain compliance with the Minimum Bid Rule at all or by the deadline, or that any related extension request will be granted.
Added
Additionally, to this end, the stockholders of the Company had approved a share consolidation on April 3, 2025 that has been effectuated within the discretion of the board of directors of the Company and, if such action ultimately resolves the above noted Nasdaq listing compliance deficiency prior to such hearing date, then we may be mooted out of the hearing; however, there can be no assurance that this action by us will result n regaining compliance with the deficiency for a sufficiently long period, or that the we may be delisted despite taking all such remedial actions to avoid such a negative result.
Removed
Further, there can be no assurances that the hearing related to the Low Priced Stock Rule will occur, that a favorable decision will be obtained if the hearing is held, that the Panel will grant any request for an extension period within which to regain compliance, or that the Company will be able meet the continued listing requirements during any compliance period or in the future.
Added
Shareholders may be diluted if additional capital stock is issued to raise capital, including to finance acquisitions, repay debt or in connection with strategic transactions.
Removed
If the Company is unable to regain or maintain compliance with these Nasdaq requirements, its common stock will be delisted from Nasdaq.
Added
We intend to seek to raise additional funds for our operations, to finance acquisitions, repay existing debt or to develop strategic relationships by issuing equity or convertible debt securities, which would reduce the percentage ownership of our existing stockholders.
Removed
While on January 3, 2024 the Company’s shareholders approved a reverse stock split of the outstanding shares of the Company’s common stock at a ratio within a range of 1-for-2 to 1-for-15, as determined by our board of directors, the board has not implemented a reverse stock split pursuant to that approval, and has determined that, based on recent stock prices of the Company’s common stock, the maximum ratio under that approved range of 1-for-15 would not be sufficient to cause the stock price to increase or be maintained at a level that would satisfy the Minimum Bid Rule.
Added
Our board of directors has the authority, without action or vote of the stockholders, to issue all or any part of our authorized but unissued shares of common or preferred stock. Following our recent shareholder approval, our amended and restated certificate of incorporation authorizes us to issue up to 1,000,000,000 shares of common stock and 3,000,000 shares of preferred stock.
Removed
As a result, the board has called a special meeting of shareholders to request, among other matters, that its shareholders approve a reverse stock split of the outstanding shares of the Company’s common stock at a ratio within a range of 1-for-25 and 1-for-200, as determined by the board.
Added
Future issuances of common or preferred stock would reduce your influence over matters on which stockholders vote and would be dilutive to earnings per share. In addition, any newly issued preferred stock could have rights, preferences and privileges senior to those of the common stock.
Removed
However, there can be no assurance that shareholders will approve that reverse stock split or that any reverse stock split that is effected will increase, or maintain, the bid price per share of our common stock sufficiently to satisfy the Minimum Bid Rule or the Low Priced Stock Rule.
Added
Those rights, preferences and privileges could include, among other things, the establishment of dividends that must be paid prior to declaring or paying dividends or other distributions to holders of our common stock or providing for preferential liquidation rights.
Removed
The perception among investors that we are at a heightened risk of delisting could negatively affect the market price and trading volume of our common stock.
Added
These rights, preferences and privileges could negatively affect the rights of holders of our common stock, and the right to convert such preferred stock into shares of our common stock at a rate or price that would have a dilutive effect on the outstanding shares of our common stock.
Removed
If our common stock is delisted from Nasdaq, the delisting could: substantially decrease trading in our common stock; adversely affect the market liquidity of our common stock as a result of the loss of market efficiencies associated with Nasdaq and the loss of federal preemption of state securities laws; adversely affect our ability to issue additional securities or obtain additional financing in the future on acceptable terms, if at all; result in the potential loss of confidence by investors, suppliers, partners and employees and fewer business development opportunities; and result in limited analyst interest.
Added
There is no public market for the common warrants or pre-funded warrants issued and outstanding. There is no established public trading market for the common warrants or pre-funded warrants previously issued by us, and we do not expect a market to develop.
Removed
Additionally, the market price of our common stock may decline further, and shareholders may lose some or all of their investment. 10 Future sales of Company shares could cause the Company’s stock price to decline.
Added
In addition, we do not intend to apply to list any of our outstanding warrants on any securities exchange or nationally recognized trading system, including The Nasdaq Stock Market. Without an active market, the liquidity of our issued and outstanding warrants will be limited.
Removed
Upon conversion of the Convertible Preferred Stock and exercise of the common stock PIPE Warrants or the issuance of the earnout consideration from the merger, the number of shares outstanding of the Company’s common stock could increase substantially.
Added
Holders of our common warrants and pre-funded warrants will have no rights as a common stockholder until they acquire our common stock.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

4 edited+0 added−0 removed2 unchanged
Biggest changeThe CFO in conjunction with senior management conducts periodic reviews of cybersecurity control, policies, and procedures to ensure relevance and effectiveness for the Company’s needs and operating environment. The CFO has previously led IT/cyber strategy and programs in his past work experiences and is able to apply those experiences to the Company.
Biggest changeThe COO in conjunction with senior management conducts periodic reviews of cybersecurity control, policies, and procedures to ensure relevance and effectiveness for the Company’s needs and operating environment. The COO has previously led IT programs in his past work experiences and is able to apply those experiences to the Company.
The audit and finance committee of the board has discussions with 24 management on an annual basis about the Company’s risk assessment and risk management policies, particularly in the areas of financial reporting, internal controls, and compliance with legal and regulatory requirements. One aspect of the Company’s information security program is focused on vendor selection.
The audit and finance committee of the board has discussions with management on an annual basis about the Company’s risk assessment and risk management policies, particularly in the areas of financial reporting, internal controls, and compliance with legal and regulatory requirements. One aspect of the Company’s information security program is focused on vendor selection.
The Company evaluates all third-party vendors and service providers for their cybersecurity features and compliance with security requirements. Selected vendors, for example, must employ a variety of security measures to protect against unauthorized access, data breaches, and data loss. Pineapple Energy remains committed to maintaining the highest standards of data security and ensuring the integrity and confidentiality of our data.
The Company evaluates all third-party vendors and service providers for their cybersecurity features and compliance with security requirements. Selected vendors, for example, must employ a variety of security measures to protect against unauthorized access, data breaches, and data loss. The Company remains committed to maintaining the highest standards of data security and ensuring the integrity and confidentiality of our data.
ITEM 1C. CYBERSECURITY The Company has an information security program designed to identify, mitigate, respond to and manage reasonably foreseeable cybersecurity risks and threats. The program is overseen by the Chief Financial Officer.
ITEM 1C. CYBERSECURITY The Company has an information security program designed to identify, mitigate, respond to and manage reasonably foreseeable cybersecurity risks and threats. The program is overseen by the Chief Operating Officer .

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeJDL Technologies and Ecessa use this facility for some administrative operations. The Company leases 10,000 square feet of office and warehouse space in Aiea, Hawaii. SUNation leases 59,000 square feet of office and warehouse space in Ronkonkoma, New York and 3,000 square feet of office and warehouse space in Tampa, FL.
Biggest changeITEM 2. PROPERTIES The following is a summary of the Company’s leased property: The Company leases 10,000 square feet of office and warehouse space in Aiea, Hawaii. SUNation leases 20,000 square feet of office and warehouse space in Ronkonkoma, New York and 3,000 square feet of office and warehouse space in Tampa, FL.
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ITEM 2. PROPERTIES The following is a summary of the Company’s leased property:  The Company leases 8,590 square feet of office space in Minnetonka, Minnesota, where its executive and administrative offices are located.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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ITEM 3. LEGAL PROCEEDINGS The Company is subject to claims and lawsuits that have been filed in the ordinary course of business. From time to time, the Company brings suit against others to enforce contract rights or property rights, or to collect debts in the ordinary course of business.
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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.
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Management believes that the resolution or settlement of any pending litigation will not have a material adverse effect on the results of operations or liquidity of the Company. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II
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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.
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In February 2025, an action by a landlord 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.
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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.
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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 has asserted three causes of action for breach of contract, declaratory judgment that the lease requires Sunation to insure the building itself, and a third vague “fraud” theory.
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The claims against SUNation Energy, Inc. based upon vague allegations of fraud are likely unsustainable. The claims are baseless and frivolous and defendants intend to vigorously defend them. 32 From time to time, we also face threatened legal actions or claims in the ordinary course of our business.
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One such matter involves a residential customer who has informally alleged that Sunation Solar Systems is 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 may be substantial.
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At the moment, SUNation Energy, Inc. has not been included in the claim or allegations; however, to the extent that litigation is commenced, the Company intends to vigorously defend against these as yet unasserted claims. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeHolders At March 15, 2024, there were approximately 272 registered holders of record of Pineapple Energy Inc. common stock. 25 Securities Authorized for Issuance Under Equity Compensation Plans The following table presents information about the Company’s equity compensation plans, under which equity securities of the Company are authorized for issuance, as of December 31, 2023: Equity Compensation Plan Information Number of securities Number of securities to be issued upon remaining available exercise of Weighted-average for future issuance under outstanding exercise price of equity compensation options, warrants outstanding options plans (excluding shares Plan Category and rights (1) warrants and rights (2) in first column) Equity compensation plans approved by security holders: (3) 2022 Employee Stock Purchase Plan — $ — 415,005 2022 Equity Incentive Plan 640,854 $ — 397,089 Equity compensation plans not approved by security holders: CFO Inducement Grant 54,852 $ — — SUNation Inducement Grants 89,698 $ — — TOTAL 785,404 $ — 812,094 (1) Includes outstanding awards under the 2022 Equity Incentive Plan, as well as restricted stock units outstanding under inducement grants made to the Company’s newly-hired Chief Financial Officer in October 2022 and to newly-hired employees in connection with the SUNation acquisition in November 2022, in each case in accordance with Nasdaq Listing Rule 5635(c)(4).
Biggest changeSecurities Authorized for Issuance Under Equity Compensation Plans The following table presents information about the Company’s equity compensation plans, under which equity securities of the Company are authorized for issuance, as of December 31, 2024: Equity Compensation Plan Information Number of securities Number of securities to be issued upon remaining available exercise of Weighted-average for future issuance under outstanding exercise price of equity compensation options, warrants outstanding options plans (excluding shares Plan Category and rights (1) warrants and rights (2) in first column) Equity compensation plans approved by security holders: (3) 2022 Employee Stock Purchase Plan — $ — 400 2022 Equity Incentive Plan 237 $ — 12,482 Equity compensation plans not approved by security holders: SUNation Inducement Grants 60 $ — — TOTAL 297 $ — 12,882 (1) Includes outstanding awards under the 2022 Equity Incentive Plan, as well as restricted stock units outstanding under inducement grants made to the Company’s newly-hired Chief Financial Officer in October 2022 and to newly-hired employees in connection with the SUNation acquisition in November 2022, in each case in accordance with Nasdaq Listing Rule 5635(c)(4).
The number of shares of Company common stock available for issuance under the Equity Plan initially was 750,000 and was increased to 1,250,000 by shareholder approval on December 7, 2022.
The number of shares of Company common stock available for issuance under the Equity Plan initially was 1,000 and was increased to 13,333 after shareholder approvals on December 7, 2022 and July 19, 2024.
The ESPP was approved by shareholders on December 7, 2022, and provides for the purchase by eligible employees of shares of the Company’s common stock at a discount to the market price. The number of shares authorized for issuance under the ESPP was initially 200,000 and was increased to 500,000 by shareholder approval on December 14, 2023.
The ESPP was approved by shareholders on December 7, 2022, and provides for the purchase by eligible employees of shares of the Company’s common stock at a discount to the market price.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information The Company’s common stock trades on the Nasdaq Capital Market under the trading symbol PEGY.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information The Company’s common stock trades on the Nasdaq Capital Market under the trading symbol SUNE. Holders At March 31, 2025, there were approximately 84 registered holders of record of SUNation Energy, Inc. common stock.
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The number of shares authorized for issuance under the ESPP was initially 267 and was increased to 667 by shareholder approval on December 14, 2023. 33 ITEM 6. [RESERVED] 34

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeBased on the Company’s current financial position, the Company’s forecasted future cash flows for twelve months beyond the date of issuance of the financial statements in this report indicate that the Company will not have sufficient cash to make the first SUNation earnout payment in the second quarter of 2024 or the first principal payment of the Long-Term Note due on November 9, 2024, factors which raise substantial doubt about the Company’s ability to continue as a going concern.
Biggest changeBased on the Company’s current financial position, which includes approximately $0.3 million of restricted cash, cash equivalents and investments that are restricted under the CVR agreement and cannot be used by the Company for its own working capital needs, and the Company’s forecasted future cash flows for twelve months beyond the date of issuance of these financial statements, substantial doubt exists around the Company’s ability to continue as a going concern for a reasonable period of time .
We test goodwill for impairment annually on October 1 or more frequently if events and circumstances warrant. Such events and circumstances may be a significant change in our business climate, economic and industry trends, legal factors, negative operating performance indicators, significant competition or changes in strategy.
We test goodwill for impairment annually on October 1 or more frequently if events and circumstances warrant. Such events and circumstances may be a significant change 37 in our business climate, economic and industry trends, legal factors, negative operating performance indicators, significant competition or changes in strategy.
The Company is a growing domestic operator and consolidator of residential and commercial solar, battery storage, and grid services solutions. Our strategy is focused on acquiring, integrating, and growing leading local and regional solar, storage, and energy services companies nationwide.
The Company is a domestic operator and consolidator of residential solar, battery storage, and grid services solutions. Our strategy is focused on acquiring, integrating, and growing leading local and regional solar, storage, and energy services companies nationwide.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with the Company’s Consolidated Financial Statements and the related notes that appear elsewhere in this report. Overview Pineapple Energy Inc. (formerly Communications Systems, Inc.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with the Company’s Consolidated Financial Statements and the related notes that appear elsewhere in this report. Overview SUNation Energy Inc. (formerly Communications Systems, Inc.
It carried an annual interest rate of 4% until the three-month anniversary of issuance, 8% thereafter until the six-month anniversary of issuance, then 12% thereafter until the Short-Term Note is paid in full. The Short-Term Note was paid in full in conjunction 30 with the Decathlon loan. The Long-Term Note is unsecured and matures on November 9, 2025.
It carried an annual interest rate of 4% until the three-month anniversary of issuance, 8% thereafter until the six-month anniversary of issuance, then 12% thereafter until the Short-Term Note is paid in full. The Short-Term Note was paid in full in conjunction with the Decathlon loan. The Long-Term Note is unsecured and initially matured on November 9, 2025.
Of this amount, $1,799,357 was invested in short-term money market funds that are not considered to be bank deposits and are not insured or guaranteed by the Federal Deposit Insurance Corporation or other government agency.
Of this amount, $368,138 was invested in short-term money market funds that are not considered to be bank deposits and are not insured or guaranteed by the Federal Deposit Insurance Corporation or other government agency.
(“CSI”) and Pineapple Holdings, Inc.) (herein referred to as “Pineapple,” “PEGY,” “our,” “we” or the “Company”) was originally organized as a Minnesota corporation in 1969.
(“CSI”), Pineapple Holdings, Inc. and Pineapple Energy Inc.) (herein referred to as “SUNation Energy,” “SUNE,” “our,” “we” or the “Company”) was originally organized as a Minnesota corporation in 1969.
This amount is recorded as a long-term liability that includes the remaining restricted cash and cash equivalents, investments, along with the other tangible and intangible assets related to the legacy CSI business. The proceeds from CSI’s pre-merger business working capital and related long term-assets and liabilities are not available to fund the working capital needs of the post-merger company.
This amount is recorded as a current liability that includes the remaining restricted cash and cash equivalents and payables related to the legacy CSI business. The proceeds from CSI’s pre-merger business 42 working capital and related long term-assets and liabilities are not available to fund the working capital needs of the post-merger company.
Contingent Value Rights and Impact on Cash As discussed in Note 3, Business Combinations, the Company issued CVRs prior to the closing of the merger to CSI shareholders of record on the close of business on March 25, 2022.
Contingent Value Rights and Impact on Cash The Company issued CVRs prior to the closing of the merger to CSI shareholders of record on the close of business on March 25, 2022.
Of the amounts of cash, restricted cash, and restricted cash equivalents on the balance sheet at December 31, 2023, $1,821,060 consist of funds that can only be used to support the legacy CSI business, will be distributed to CVR holders and cannot be used to support the working capital needs of the Pineapple Energy business.
Of the amounts of cash, restricted cash, and restricted cash equivalents on the balance sheet at December 31, 2024, $312,080 consist of funds that can only be used to support the legacy CSI business, will be distributed to CVR holders and cannot be used to support the working capital needs of the SUNation Energy business.
The CVR liability as of December 31, 2023 was estimated at $1,691,072 and represented the estimated fair value as of that date of the legacy CSI assets to be distributed to CVR holders as of that date.
The CVR liability as of December 31, 2024 was estimated at $312,080 and represented the estimated fair value as of that date of the legacy CSI assets to be distributed to CVR holders as of that date.
The Company accounts for the Convertible Preferred Stock and PIPE Warrants based on an assessment of the specific terms and applicable authoritative guidance in Accounting Standards Codification (“ASC”) 480, “Distinguishing Liabilities from Equity”, and ASC 815, “Derivatives and Hedging”. The Convertible Preferred Stock is reported as part of permanent equity and the PIPE Warrants were determined to be equity-classified.
The Company accounts for the Convertible Preferred Stock and PIPE Warrants based on an assessment of the specific terms and applicable authoritative guidance in Accounting Standards Codification (“ASC”) 480, “Distinguishing Liabilities from Equity”, and ASC 815, “Derivatives and Hedging”.
As a result, the Company requires a dditional funding and seeks to raise capital through sources that may include public or private equity offerings, debt financings and/or strategic alliances. However, additional funding may not be available on terms acceptable to the Company, or at all.
As a result, the Company requires a dditional funding and seeks to raise capital through sources that may include public or private equity offerings, debt financings and/or strategic alliances.
It carries an annual interest rate of 4% until the first anniversary of issuance, then 8% thereafter until the Long-Term Note is paid in full. The Company will be required to make a principal payment of $2.74 million on the second anniversary of the Long- Term Note.
It carried an annual interest rate of 4% until the first anniversary of issuance, then 8% thereafter until the Long-Term Note is paid in full. The Company was required to make a principal payment of $2.74 million on the second anniversary of the Long- Term Note. The Long-Term Note may be prepaid at our option at any time without penalty.
Net cash provided in 2023 was the result of proceeds from the sale of investments and proceeds from the sale of the JDL and Ecessa assets included within discontinued operations, partially offset by capital expenditures.
Net cash provided in 2023 was the result of proceeds from the sale of investments and proceeds from the sale of the JDL and Ecessa assets included within discontinued operations, partially offset by capital expenditures. 41 Net cash provided by financing activities was $2,084,358 in 2024 compared to $2,760,236 used in 2023.
No goodwill impairment was recorded during the years ended December 31, 2023 and 2022. Convertible Preferred Stock and Warrants: In March 2022, the Company issued shares of Series A convertible preferred stock (the “Convertible Preferred Stock”) and warrants (the “PIPE Warrants”) to investors as part of a $32.0 million private investment in public equity (“PIPE”) transaction.
Convertible Preferred Stock and Warrants: In March 2022, the Company issued shares of Series A convertible preferred stock (the “Convertible Preferred Stock”) and PIPE Warrants to investors as part of a $32.0 million private investment in public equity (“PIPE”) transaction.
Our discounted cash flow estimates use discount rates that correspond to a weighted-average cost of capital consistent with a market-participant view. Certain other key assumptions utilized, including revenue and cash flow projections, are based on estimates consistent with those utilized in our annual budgeting and planning process that we believe are reasonable.
Certain other key assumptions utilized, including revenue and cash flow projections, are based on estimates consistent with those utilized in our annual budgeting and planning process that we believe are reasonable.
The Company had working capital of $(6,594,834), consisting of current assets of approximately $15,778,648 and current liabilities of $22,373,482 at December 31, 2023 compared to working capital of $27,366, consisting of current assets of $25,961,524 and current liabilities of $25,934,158 at the end of 2022.
The Company had working capital of $(16,051,658), consisting of current assets of approximately $11,110,385 and current liabilities of $27,162,043 at December 31, 2024 compared to working capital of $(6,594,834), consisting of current assets of $15,778,648 and current liabilities of $22,373,482 at the end of 2023.
If the estimated fair value of the reporting entity exceeds the carrying value, the goodwill is not impaired, and no further review is required.
If the estimated fair value of the reporting entity exceeds the carrying value, the goodwill is not impaired, and no further review is required. However, if the carrying value exceeds the estimated fair value of the reporting unit, an impairment expense should be recognized for the excess of the carrying value over the fair value.
For a detailed discussion of a number of these risk factors, please see Item 1A, “Risk Factors,” of this Annual Report on Form 10-K. 27 Critical Accounting Estimates The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”).
Critical Accounting Estimates The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”).
Net cash used in financing activities was $2,760,236 in 2023 compared to $15,912,117 in 2022. Net cash used in financing activities in 2023 was due to $3,036,676 in CVR distributions and $5,000,000 in payments against the SUNation Short-Term Note and $1,500,000 in payments against the Hercules Capital, Inc.
Net cash used in financing activities in 2023 was due to $3,036,676 in CVR distributions and $5,000,000 in payments against the SUNation Short-Term Note and $1,500,000 in payments against the Hercules Capital, Inc. (“Hercules”) term loan, as discussed further in Note 9, Commitments and Contingencies, partially offset by $7,500,000 in borrowings from Decathlon Specialty Finance, LLC (“Decathlon”).
For additional details, see Note 3, Business Combinations and Note 10, Goodwill and Intangible Assets. Goodwill: Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the assets acquired and liabilities assumed from acquisitions.
The Company records interest and penalties related to income taxes as income tax expense in the consolidated statements loss and comprehensive loss. Goodwill: Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the assets acquired and liabilities assumed from acquisitions.
Consolidated operating loss from continuing operation s before income taxes in 2023 was $6,820,716, compared to a consolidated operating loss from continuing operations before income taxes of $3,265,819 in 2022. Net loss from continuing operations in 2023 was $6,939,892, or ($0.69) per diluted share.
Consolidated operating loss from continuing operation s before income taxes in 2024 was $15,814,986, compared to a consolidated operating loss from continuing operations before income taxes of $6,820,716 in 2023. Net loss from continuing operations attributable to shareholders in 2024 (after taking into effect $11,587,121 in deemed dividends) was $27,436,926, or ($50.58) per diluted share.
However, if the carrying value exceeds the estimated fair value of the reporting unit, an impairment expense should be recognized for the excess of the carrying value over the fair value. 28 Under the income approach, the estimated discounted cash flows are based on the best information available to us at the time, including supportable assumptions and projections we believe are reasonable.
Under the income approach, the estimated discounted cash flows are based on the best information available to us at the time, including supportable assumptions and projections we believe are reasonable. Our discounted cash flow estimates use discount rates that correspond to a weighted-average cost of capital consistent with a market-participant view.
On November 9, 2022, the Company purchased the equity of New York-based SUNation Solar Systems, Inc. and five of its affiliated entities (collectively “SUNation”). Pineapple’s vision is to power the energy transition through grass-roots growth of solar electricity paired with battery storage.
Concurrently with the Reincorporation, the Company also effectuated a change to its name from Pineapple Energy, Inc. to SUNation Energy, Inc., and to its stock trading symbol from PEGY to SUNE, effective November 19, 2024. SUNation Energy’s vision is to power the energy transition through grass-roots growth of solar electricity paired with battery storage.
Transaction costs decreased by $2,229,509 to $2,020 in 2023, due to the consummation 29 of the merger and the HEC Asset Acquisition in the first quarter of 2022 and limited activity in 2023. There was also a $1,350,000 fair value remeasurement loss related to the SUNation acquisition earnout consideration in 2023.
Amortization expense decreased by $1,900,977 to $2,837,500 in 2024 due to the completion of the amortization of certain intangible assets in late 2023. The fair value remeasurement related to the SUNation acquisition earnout consideration in 2024 was a gain of $1,000,000 compared to a loss of $1,350,000 in 2023.
Net loss attributable to common shareholders in 2022 (after taking into effect $16,863,892 in deemed dividends) was $27,216,132, or ($2.99) per diluted share from continuing operations. Liquidity and Capital Resources As of December 31, 2023, the Company had approximately $5,396,343 in cash, restricted cash and cash equivalents, and liquid investments, compared to $7,923,244 at December 31, 2022.
Liquidity and Capital Resources As of December 31, 2024, the Company had approximately $1,151,348 in cash, restricted cash and cash equivalents, and liquid investments, compared to $5,396,343 at December 31, 2023.
The decrease was related to a $4,684,000 gain on the fair value remeasurement of the merger earnout consideration in 2022, a $792,767 decrease in the gain on sale of assets in 2023 compared to the same period of 2022 and a $1,680,911 increase in interest and accretion expense, partially offset by a $549,017 increase in fair value remeasurement gain on the CVRs.
The decrease was related to a $429,933 increase in interest and accretion expense, a $974,823 fair value remeasurement loss on the embedded derivative liability, a $2,152,709 decrease in fair value remeasurement gain on the CVRs, a $974,823 fair value remeasurement loss on the warrant liability, and a $437,938 decrease in gain on sale of assets.
Cash flow used in operating activities was approximately $667,177 in 2023 compared to $7,577,199 used in 2022.
Cash used in investing activities was $26,667 in 2024 compared to $3,567,278 provided in 2023.
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In addition, on March 28, 2022 and immediately prior to the Closing, the Company completed its acquisition (“HEC Asset Acquisition”) of substantially all of the assets of two Hawaii-based solar energy companies, Hawaii Energy Connection, LLC (“HEC”) and E-Gear, LLC (“E-Gear”).
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On November 14, 2024, the Company filed articles of conversion with the Secretary of State of the State of Minnesota and filed a certificate of conversion with the Secretary of State of the State of Delaware changing its jurisdiction of incorporation from Minnesota to Delaware (the “Reincorporation”), as well as having filed a Certificate of Incorporation with the Secretary of State of the State of Delaware on this same date.
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Pineapple is primarily engaged in the sale, design, and installation of photovoltaic solar energy systems and battery storage systems through its Hawaii-based HEC and New York-based SUNation entities. We install systems that provide clean, reliable solar energy typically at savings relative to traditional utility offerings. Our primary customers are residential homeowners.
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Our current business units, Hawaii Energy Connection, LLC (“HEC”), and New York-based subsidiaries, the SUNation entities (collectively, “SUNation”). are engaged in the design, installation, and maintenance of solar energy systems across residential, commercial, and municipal sectors. Our team specializes in providing tailored solar solutions that meet the specific energy needs of each client, ensuring both efficiency and sustainability.
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We also provide solar energy systems to commercial owners and other municipal customers. Through its E-Gear business, Pineapple also develops, manufactures, and sells patented edge-of-grid energy management software and hardware technology, such as energy management control devices. These products allow homeowners to get the most out of their installed photovoltaic solar energy systems and utility grid support benefits.
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In addition to our core solar services, we also offer energy storage systems to optimize energy use and increase reliability. Our New York business unit further integrates a broader range of services, including residential roofing solutions, to ensure seamless solar installations and long-term durability.
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Our primary customers for this technology are energy services companies and other utilities. While CSI was the legal acquirer in the merger, because Pineapple Energy was determined to be the accounting acquirer, the historical financial statements of Pineapple Energy became the historical financial statements of the combined company upon the consummation of the merger.
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Additionally, we provide community solar services that allow groups of individuals, businesses, or organizations to share the benefits of a single solar array, making renewable energy accessible to more people in the community. On June 30, 2023, the Company divested its legacy operations and operating assets through the sale of substantially all of the assets of its JDL Technologies, Inc.
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As a result, the financial statements included in the accompanying consolidated financial statements, and the discussion in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, reflect the historical operating results of Pineapple Energy prior to the merger, the consolidated results of CSI, Pineapple Energy, HEC, and E-Gear following the Closing, including the results of SUNation following that acquisition, and the Company’s equity structure for all periods presented.
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(“JDL”) and Ecessa Corporation (“Ecessa”) businesses. See Note 5, Discontinued Operations. As a result, unless otherwise noted, all information in this report on Form 10-K related to the JDL and Ecessa businesses are discussed and presented as discontinued operations and the Company reports its remaining business operations as continuing operations.
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Accordingly, references to “the Company” herein are to the applicable entity at the date or during the time period in the applicable discussion.
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Bitcoin Strategy WE ARE NOT REGISTERED AS AN INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940 AND STOCKHOLDERS DO NOT HAVE THE PROTECTIONS ASSOCIATED WITH OWNERSHIP OF SHARES IN A REGISTERED INVESTMENT COMPANY NOR THE PROTECTIONS AFFORDED BY THE COMMODITIES EXCHANGE ACT.
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The Company records interest and penalties related to income taxes as income tax expense in the consolidated statements loss and comprehensive loss. Accounting for Business Combinations: We record all acquired assets and liabilities, including goodwill, other identifiable intangible assets, contingent value rights and contingent consideration at fair value.
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In January 2025, our board of directors approved and adopted a corporate treasury strategy, adopting the inclusion of bitcoin (“BTC”) as a treasury reserve asset on an ongoing basis, subject to, among other factors, market conditions, the Company’s operational requirements, including in support of its planned expansion strategy, and our anticipated cash needs, instead of solely looking to keep cash in short and intermediate-term, interest-bearing obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the U.S. federal government.
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The initial recording of goodwill, other identifiable intangible assets, contingent value rights and contingent consideration, requires certain estimates and assumptions concerning the determination of the fair values and useful lives. The judgments made in the context of the purchase price allocation can materially affect our future results of operations.
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As part of this strategy, we may allocate a minority portion of our excess cash, calculated based on our estimated six-month operating expenses, toward BTC purchases. 35 Since 2003, we have been designing, developing, and providing solar energy solutions tailored to customers in the information technology and technology sectors.
Removed
The valuations calculated from estimates are based on information available at the acquisition date. Goodwill is not amortized, but is subject to annual tests for impairment or more frequent tests if events or circumstances indicate it may be impaired.
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The Company believes this BTC initiative further solidifies its role in supporting the new digital economy and its expanding energy needs in an environmentally conscious manner. Accordingly, this strategic initiative aligns with the Company’s goal to enable BTC as a possible payment option for its customers and suppliers as part of its core mission to make solar power more accessible.
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Other intangible assets are amortized over their estimated useful lives and are subject to impairment if events or circumstances indicate a possible inability to realize the carrying amount. The contingent consideration and contingent value rights liability are adjusted to fair value each reporting period with any adjustments recorded within the statement of operations.
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We believe it has unique characteristics as a scarce and finite asset that can serve as a reasonable inflation hedge and safe haven amid global instability. Bitcoin is often compared by some to gold, the latter of which has been viewed as a dependable store of value throughout history.
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Results of Operations 2023 Compared to 2022 The consolidated results herein reflect the historical operating results of Pineapple Energy prior to the merger and the consolidated results of CSI (excluding the discontinued operations of JDL & Ecessa), Pineapple Energy, HEC and E-Gear following the Closing on March 28, 2022 and the results of SUNation following the closing on its acquisition on November 9, 2022.
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As of January 3, 2025, the total market capitalization of gold was approximately $17.8 trillion compared to nearly $1.95 trillion for bitcoin. Bitcoin is a highly volatile asset that has traded below $38,000 per bitcoin and above $108,000 per bitcoin on Coinbase in the 12 months preceding the date of this annual report.
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Consolidated sales were $79,632,709 in 2023 and $27,522,099 in 2022. As Pineapple Energy had limited revenue in the first quarter of the prior year, the increase in sales was due to the merger, the HEC Asset Acquisition and the acquisition of SUNation during 2022.
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While highly volatile, bitcoin’s price has also appreciated significantly since bitcoin’s inception in January 2009 (at zero per bitcoin). We believe that a substantial portion of bitcoin’s appreciation is attributable to the view that bitcoin is or will become a reliable store of value.
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Sales in 2023 and 2022 by type were as follows: Revenue by Type 2023 2022 Residential contracts $ 64,855,898 $ 25,375,067 Commercial contracts 11,283,903 1,673,403 Service revenue 3,133,865 412,388 Software revenue 347,550 — Other 11,493 61,241 $ 79,632,709 $ 27,522,099 Consolidated gross profit increased to $27,696,190 in 2023 as compared to gross profit of $7,377,445 in 2022 due to the increase in revenue through acquisitions.
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Like gold, bitcoin is also viewed as a scarce asset; the ultimate supply of bitcoin is limited to 21 million coins and approximately 94.5% of its supply already exists. We believe that bitcoin’s finite, digital and decentralized nature as well as its architectural resilience make it a highly attractive and potentially highly appreciable asset.
Removed
Gross margin increased to 34.8% in 2023 compared to 26.8% in 2022 due to the SUNation acquisition, normalization of the supply chain and an overall decrease in product costs.
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We also believe that the growing global acceptance across sectors, public and private companies and other “institutionalization” of bitcoin, including in some governments integrating bitcoin into their financial strategies as a hedge against inflation, macro-economic instability, and geopolitical risks facing global economies, supports our view that bitcoin is a reliable store of value.
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Consolidated operating expenses, which include selling, general and administrative expenses, amortization expense, transaction costs and a fair value remeasurement loss on SUNation earnout consideration increased 97.3% to $35,163,055 in 2023 as compared to $17,826,124 in 2022.
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We believe that bitcoin’s unique attributes discussed above not only differentiate it from fiat money, but also from other cryptocurrency assets, and for that reason, we have no plans to purchase cryptocurrency assets other than bitcoin.
Removed
Consolidated selling, general and administrative expenses increased to $29,072,558 in 2023 from $12,211,135 in 2022, due primarily to a $16,038,900 increase in selling, general and administrative costs associated with acquired businesses. Amortization expense increased by $1,605,017 to $4,738,477 in 2023 due to additional intangible assets acquired through acquired businesses.
Added
Reverse Stock Splits June 2024 Reverse Stock Split On January 3, 2024, the Company’s shareholders approved a reverse stock split of the Company’s common stock at a ratio within a range of 1-for-2 and 1-for-15 and granted the Company’s board of directors the discretion to determine the timing and ratio of the split within such range.
Removed
Consolidated other income decreased $6,536,711 to $646,149 in 2023 as compared to $7,182,860 in 2022.
Added
On May 28, 2024, the Company’s board of directors determined to effect the reverse stock split of the common stock at a 1-for-15 ratio (the “June Reverse Stock Split”) and approved an amendment (“June Reverse Stock Split Amendment”) to the Fourth Amended and Restated Articles of Incorporation of the Company to effect the June Reverse Stock Split.
Removed
The Company also had $0 in investments consisting of corporate notes and bonds that are traded on the open market and are classified as available-for-sale at December 31, 2023.
Added
Effective June 12, 2024, the Company amended its Fourth Amended and Restated Articles of Incorporation to implement the June Reverse Stock Split. The Company's common stock began trading on a split-adjusted basis when the market opened on June 12, 2024 (the "June Effective Date"). As a result of the June Reverse Stock Split, at 12:01 a.m.
Removed
Significant working capital changes from 2022 to 2023 included a decrease in other accrued liabilities of $4,494,247, a decrease in other assets of $3,333,146, a decrease in inventory of $2,475,825, and a decrease in customer deposits of $2,172,766. $1,584,541 of the decrease in other assets and $2,181,761 of the decrease in other accrued liabilities was related to the receipt and payment out of the employee retention credit receivable and other related party payables.
Added
Central Time on the June Effective Date, every 15 shares of common stock then issued and outstanding automatically were combined into one share of common stock, with no change in par value per share.
Removed
Other accrued liabilities also decreased by approximately $2.3 million due to a decrease in billings in excess of costs and estimated earnings as commercial projects were completed during the year. Cash provided by investing activities was $3,567,278 in 2023 compared to $3,097,406 provided in 2022.
Added
No fractional shares were outstanding following the June Reverse Stock Split, and any fractional shares that would have resulted from the June Reverse Stock Split were settled in cash. The number of shares of common stock outstanding was reduced from 108,546,773 to 7,235,731, with 720.901 fractional shares paid out in cash totaling $1,132.
Removed
Net cash used in 2022 was primarily related to $10,991,128 in net cash paid for the HEC Asset Acquisition, the merger, and the SUNation acquisition partially offset by $6,297,865 in proceeds from the sale of assets previously classified as held for sale and $1,500,000 in earnout consideration payments related to legacy CSI’s sale of its Electronics and Software segment in 2021.
Added
The total number of shares authorized for issuance was reduced to 7,500,000 in proportion to the June Reverse Stock Split ratio. ‎ October 2024 Reverse Stock Split On July 19, 2024, the Company’s shareholders approved a reverse stock split of the Company’s common stock at a ratio within a range of 1-for-2 and 1-for-200 and granted the Company’s board of directors the discretion to determine the timing and ratio of the split within such range.
Removed
(“Hercules”) term loan, as discussed further in Note 11, Commitments and Contingencies, partially offset by $7,500,000 in borrowings from Decathlon Specialty Finance, LLC (“Decathlon”). In 2022, the Company received $32,000,000 in proceeds from the issuance of convertible preferred stock and warrants to PIPE Investors and paid $2,699,370 in related issuance costs.
Added
Additionally, the shareholders also approved an increase in authorized shares to 133,333,333 shares.
Removed
The Company also paid $8,745,628 in CVR distributions and $4,500,000 in principal against the Hercules term loan in 2022, as discussed further in Note 11, Commitments and Contingencies.
Added
On October 1, 2024, the Company’s board of directors determined to effect the reverse stock split of the common stock at a 1-for-50 ratio (the “October Reverse Stock Split”) and approved an amendment (“October Reverse Stock Split Amendment”) to the Fourth Amended and Restated Articles of Incorporation of the Company to effect the October Reverse Stock Split.
Removed
The Long-Term Note may be prepaid at our option at any time without penalty. As discussed above and in Note 3, Business Combinations and Note 11, Commitments and Contingencies, on November 9, 2022, the Company, in connection with the SUNation acquisition, paid $2.39 million in cash and entered into the Short-Term Note and the Long-Term Note.
Added
Effective October 17, 2024, the Company amended its Fourth Amended and Restated Articles of Incorporation to implement the October Reverse Stock Split. The Company's common stock began trading on a split-adjusted basis when the market opened on October 17, 2024 (the "October Effective Date"). 36 As a result of the October Reverse Stock Split, at 12:01 a.m.
Removed
Further, certain transactions could trigger an adjustment to the exercise price of the Convertible Preferred Stock and PIPE Warrants, which would lead to a corresponding increase in the number of shares of common stock issuable upon exercise of the PIPE Warrants, further diluting the Company’s shareholders.
Added
Central Time on the October Effective Date, every 50 shares of common stock then issued and outstanding automatically were combined into one share of common stock, with no change in par value per share.
Added
No fractional shares were outstanding following the Reverse Stock Split, and any fractional shares that would have resulted from the October Reverse Stock Split were settled in cash. The number of shares of common stock outstanding was reduced from 67,260,696 to 1,344,841, with 372.92 fractional shares payable in cash totaling $1,891.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

1 edited+0 added−0 removed1 unchanged
Biggest changeThe Company’s investments are in money markets that earn interest at prevailing market rates and as such do not have material risk exposure. Based on the Company’s operations, in the opinion of management, the Company is not exposed to material future losses due to market risk. ‎ 31
Biggest changeThe Company’s investments are in money markets that earn interest at prevailing market rates and as such do not have material risk exposure. Based on the Company’s operations, in the opinion of management, the Company is not exposed to material future losses due to market risk. ‎ 43

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