As filed with the Securities and Exchange Commission on November 12, 2021

Registration No. 333-          

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form S-4

REGISTRATION STATEMENT

UNDER THE SECURITIES ACT OF 1933

COMMUNICATIONS SYSTEMS, INC.

(Exact name of Registrant as specified in its charter)

10900 Red Circle Drive

Minnetonka, Minnesota 55343

(952) 996-1674

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Mark Fandrich

Chief Financial Officer

Communications Systems, Inc.

10900 Red Circle Drive

Minnetonka, Minnesota 55343

(952) 996-1674

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this Registration Statement becomes effective and after all conditions under the merger agreement to consummate the proposed merger are satisfied or waived.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, as amended, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Securities Exchange Act of 1934.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)         ☐

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)    ☐

CALCULATION OF REGISTRATION FEE

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. 

The information in this proxy statement/prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is declared effective. This proxy statement/prospectus is not an offer to sell and it is not soliciting an offer to buy these securities in any jurisdiction where the offer, solicitation or sale is not permitted.

Preliminary – Subject to Completion, Dated November 12, 2021

COMMUNICATIONS SYSTEMS, INC.
10900 Red Circle Drive
Minnetonka, MN 55343

Dear Fellow Shareholder:

You are invited to attend a special meeting of shareholders of Communications Systems, Inc. (“CSI,” “Communications Systems,” “we” or “us”), which will be held on              ,               , 2021, at 10:00 a.m. Central Time (CT), unless postponed or adjourned to a later time or date. The special meeting will be online and a completely virtual meeting of shareholders due to the ongoing public health impact of the coronavirus (COVID-19) pandemic. The accompanying proxy statement/prospectus contains important information concerning the proposals to be presented at the special meeting, specific information about the special meeting and how to cast your vote on the proposals. We encourage you to read the accompanying proxy statement/prospectus in its entirety. Capitalized terms used in this letter are explained fully in the accompanying proxy statement/prospectus.

On March 1, 2021, CSI, Helios Merger Co., a Minnesota corporation and a wholly-owned subsidiary of CSI (“Merger Sub”), and Pineapple Energy LLC, a Delaware limited liability company (“Pineapple”), entered into a merger agreement, pursuant to which Merger Sub will merge with and into Pineapple, with Pineapple surviving the merger as a wholly-owned subsidiary of CSI. The merger and the other transactions contemplated by the merger agreement are referred to collectively as the “Pineapple Merger Transaction.” Following the merger, CSI will be renamed “Pineapple Holdings, Inc.” and is sometimes referred to herein as the “combined company.” As consideration for the merger, CSI will issue shares of its common stock to the members of Pineapple and the members of Pineapple will become the majority owners of CSI’s outstanding common stock upon the closing of the merger.

Pursuant to the merger agreement, at the effective time of the merger, the outstanding Pineapple units held by members of Pineapple immediately prior to the effective time will be automatically cancelled and represent only the right to receive shares of CSI common stock. As Base Consideration, CSI has agreed to issue to the members of Pineapple 15.6 million shares of CSI’s common stock. The Base Consideration will be increased for any outstanding convertible notes issued by Pineapple in a pre-closing financing referred to as the Convertible Note Financing, which will convert into additional shares of CSI common stock at a rate of one additional share for every $2.00 in unpaid principal and accrued interest on outstanding convertible notes. The Base Consideration will be decreased for any outstanding indebtedness of Pineapple at the closing of the merger in excess of $22.5 million, which will reduce the Base Consideration at a rate one share for every $2.00 of excess indebtedness. In addition to the Base Consideration, certain members of Pineapple may receive up to an additional 13.0 million shares of CSI common stock referred to as the Earnout Consideration, upon the occurrence of milestones specified in the merger agreement.

Immediately prior to the effective time, Pineapple will complete its acquisition of two Hawaiian solar companies, Hawaii Energy Connection, LLC and E-Gear, LLC, and the equity owners of these two Hawaiian companies will receive cash and Pineapple units that will be cancelled at the effective time of the merger in exchange for a portion of the CSI common stock to be issued under the merger agreement.

The shareholders of CSI as of the close of the business day immediately preceding the effective time of the merger will receive one contractual non-transferable contingent value right, or CVR, per share of CSI common stock then held by them, which will entitle the CVR holder to a portion of the proceeds of dispositions of CSI’s pre-merger assets after the effective time of the merger.

At the effective time, CSI’s shareholders will continue to own and hold their existing shares of CSI common stock. The Pineapple Merger Transaction will not alter the rights, privileges or nature of the issued and outstanding shares of CSI common stock.

In addition, in connection with the Pineapple Merger Transaction, on September 15, 2021, CSI entered into a securities purchase agreement with certain investors, referred to as the PIPE Investors, to make a $32.0 million private placement investment referred to as the PIPE Offering. Under the terms of the securities purchase agreement, for their $32.0 million investment, the PIPE Investors will receive shares of newly authorized CSI Series A convertible preferred stock convertible at a price of $3.40 per share into CSI common stock, together with five-year warrants to purchase an additional $32.0 million of common shares at that same price. The PIPE Offering is expected to close immediately following the consummation of the merger. Thus, the PIPE Investors will invest in the combined company and will not be entitled to any cash dividends prior to the effective time nor to the CVRs issued to CSI shareholders as of the close of the business day immediately preceding the effective time. The combined company intends to use the proceeds from the PIPE Offering to fund the cash portion of the purchase price to acquire Hawaii Energy Connection, LLC and E-Gear, LLC assets, transaction expenses, and for working capital to support Pineapple’s growth strategy of acquiring leading local and regional solar installers around the United States. It is expected that the Pre-Closing Acquisition, the merger and the PIPE Offering will close sequentially on the same date.

Immediately following the consummation of the merger, assuming CSI issues only the Base Consideration in the merger and not accounting for additional shares of CSI common stock that are issuable in connection with the Earnout Consideration, the Convertible Note Financing, incentive plan, or the PIPE Offering, pre-merger CSI shareholders are expected to own approximately 38.4% of the combined company common stock outstanding immediately following the effective time of the merger, as well as one CVR per share of CSI common stock held by them as of the close of the business day immediately preceding the effective time, and the pre-merger Pineapple unit holders are expected to own approximately 61.6% of the combined company common stock outstanding immediately following the effective time of the merger.

Immediately following the consummation of both the merger and the PIPE Offering, the pre-merger CSI shareholders are expected to own approximately 28.0% of the combined company, on a fully-diluted basis, the pre-merger Pineapple unit holders are expected to own approximately 44.9% of the combined company, on a fully-diluted basis, and the PIPE Investors are expected to own approximately 27.1% of the combined company, on a fully-diluted basis. As part of the fully diluted share ownership, the foregoing calculation (i) includes the Base Consideration that CSI will issue in the merger, (ii) excludes any additional shares of CSI common stock that are issuable in connection with the merger such as the Earnout Consideration or the Convertible Note Financing, (iii) includes the shares of the combined company common stock that are issuable on conversion of the Series A convertible preferred stock and exercise of warrants issued in the PIPE Offering, and (iv) excludes any shares of combined company common stock issued in connection with awards under the 2021 Equity Incentive Plan shareholders are being asked to approve at the special meeting.

When the Pineapple Merger Transaction is effective, our new corporate name will be Pineapple Holdings, Inc. We will continue to be a publicly-traded company with the new Nasdaq ticker symbol “PEGY” that is focused on the growing home solar industry, primarily operating through our Pineapple, Hawaii Energy Connection and E-Gear subsidiary businesses. Following the merger, we will continue our efforts to monetize the legacy CSI assets and properties for the benefit of the CVR holders. Upon completion of the merger, the combined company’s initial board of directors will be set at seven and initially be comprised of four directors, two of the current members of the CSI board of directors, Roger H.D. Lacy, and Randall D. Sampson, and two directors associated with Pineapple, Kyle Udseth and Scott Honour. Kyle Udseth, currently the Chief Executive Officer of Pineapple, also will be the Chief Executive Officer of the combined company and Mark Fandrich, the current Chief Financial Officer of CSI, will continue as the Chief Financial Officer of the combined company.

Shares of CSI common stock are currently listed on the Nasdaq Global Market under the symbol “JCS.” On                 , 2021, the last trading day before the date of this proxy statement/prospectus, the closing sale price of CSI common stock was $         per share.

CSI is holding a special meeting of shareholders in order to obtain the shareholder approvals necessary to complete the merger, the PIPE Offering and other matters. At the special meeting, CSI is asking its shareholders to approve nine proposals, each as described in this proxy statement/prospectus.

After careful consideration, the CSI board of directors has unanimously approved the merger agreement and the transactions contemplated thereby, and the CSI board of directors unanimously recommends that its shareholders

vote to approve the merger agreement and the Pineapple Merger Transaction. Accordingly, the CSI board of directors unanimously recommends that its shareholders vote “FOR” each of the Pineapple Merger Proposal, the Merger Issuance Proposal, the PIPE Issuance Proposal, the Authorized Share Amendment Proposal, the Article IX Amendment Proposal, the Reverse Stock Split Proposal, the 2021 Equity Incentive Plan Proposal, the Advisory Compensation Proposal and the Adjournment Proposal described in this proxy statement/prospectus.

More information about CSI, Pineapple, the Pineapple Merger Transaction and each of the proposals are contained in this proxy statement/prospectus. CSI urges you to read this proxy statement/prospectus carefully and in its entirety. IN PARTICULAR, YOU SHOULD CAREFULLY CONSIDER THE MATTERS DISCUSSED UNDER “RISK FACTORS” BEGINNING ON PAGE 28.

Your vote is very important. Whether or not you plan to attend the special meeting of shareholders, please vote by proxy over the internet, by telephone or by mailing the enclosed proxy card or by following the instructions for voting that accompanied your proxy materials.

We cannot complete the Pineapple Merger Transaction without the approval of the holders of two-thirds of the shares that were outstanding on the record date. Accordingly, it is extremely important that you vote your shares. Please vote promptly so that your shares will be represented, to avoid delays in completing the Pineapple Merger Transaction and to save the company the cost of additional solicitation.

The CSI board of directors believes the strategy of re-inventing CSI through the Pineapple Merger Transaction and related transactions has allowed and will continue to allow us the ability to deliver immediate value to our shareholders while retaining an opportunity for long-term appreciation. CSI is excited about the opportunities the merger will bring to the CSI shareholders.

We look forward to your support at the special meeting.

Sincerely,

Roger H. D. Lacey
Executive Chairman
Communications Systems, Inc.

Neither the Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved the Pineapple Merger Transaction, passed upon the merits or fairness of the Pineapple Merger Transaction or passed upon the adequacy or accuracy of the disclosure in the accompanying proxy statement. Any representation to the contrary is a criminal offense.

This proxy statement/prospectus is dated                     , 2021 and is first being mailed to shareholders on or about                 , 2021.

The information in this proxy statement/prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is declared effective. This proxy statement/prospectus is not an offer to sell and it is not soliciting an offer to buy these securities in any jurisdiction where the offer, solicitation or sale is not permitted.

Preliminary – Subject to Completion, Dated November 12, 2021

COMMUNICATIONS SYSTEMS, INC.
10900 Red Circle Drive
Minnetonka, Minnesota 55343

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

To be held on             ,           , 2021

To Shareholders of Communications Systems, Inc.:

A special meeting of shareholders of Communications Systems, Inc., a Minnesota corporation, will be held on                ,               , 2021 at 10:00 a.m. CT for the following purposes:

The special meeting will be a virtual meeting of shareholders.

Except with respect to shares allocated to you as a participant in the CSI Employee Stock Purchase Plan (ESOP), you may attend the online meeting and vote your shares electronically during the special meeting via the internet by visiting: www.virtualshareholdermeeting.com/JCS2021SM2. You will need the 16-digit control number that is printed in the box marked by the arrow on your proxy card or on the voting instructions that accompanied your proxy materials. We recommend that you log in at least fifteen minutes before the start of the special meeting to ensure that you are logged in when the special meeting starts.

Please note that if you hold shares of CSI common stock through the CSI ESOP, your voting instructions for these shares must be received by 11:59 p.m. Eastern Time on                       , 2021. You may not vote the CSI common stock allocated to you through the ESOP electronically during the special meeting.

The CSI board of directors has fixed                        , 2021, as the record date for the determination of shareholders entitled to notice of, and to vote at, the special meeting and any adjournment or postponement thereof. Only holders of record of shares of our common stock at the close of business on the record date are entitled to notice of, and to vote at, the special meeting. At the close of business on the record date, we had 9,720,627 shares of common stock outstanding and entitled to vote.

The CSI board of directors has unanimously approved the Pineapple Merger Transaction. The CSI board of directors unanimously recommends that you vote “FOR” the Pineapple Merger Proposal and “FOR” each of the other proposals.

Your vote is very important. Please vote your shares by proxy as promptly as possible whether or not you plan to attend the special meeting.

By Order of the Board of Directors,

Roger H. D. Lacey
Executive Chairman
Communications Systems, Inc.
Minnetonka, Minnesota

            , 2021

Table of Contents

ABOUT THIS PROXY STATEMENT/PROSPECTUS

This document, which forms part of a registration statement on Form S-4 filed with the SEC, by CSI (File No. 333-          ) (the “Registration Statement”), constitutes a prospectus of CSI under Section 5 of the Securities Act with respect to the shares of CSI common stock to be issued if the merger described herein is consummated. This document also constitutes a notice of meeting and a proxy statement/prospectus under Section 14(a) of the Exchange Act with respect to the special meeting of CSI shareholders at which CSI shareholders will be asked to consider and vote upon a proposal to approve the merger transactions by the approval of the merger agreement, among other matters.

CERTAIN DEFINED TERMS

In this proxy statement/prospectus:

“Base Consideration” means the 15.6 million shares of CSI’s common stock, subject to certain adjustments as described in the merger agreement, that CSI will issue as consideration for the merger to members of Pineapple at the effective time of the merger.

“Convertible Note Financing” means the financing that may be entered into by Pineapple prior to the closing of the merger for the issuance and sale of up to $10 million in gross proceeds of convertible notes that will convert, immediately prior to the merger, into Pineapple Class C Units at a rate of one Pineapple Class C Unit for every $2.00 of unpaid principal and accrued interest thereon. To the extent Pineapple sells any such convertible notes, the Class C Units outstanding will be exchanged at the effective time of the merger into shares of CSI common stock at a ratio of one share of CSI common stock for each Pineapple Class C Unit.

“combined company” means CSI following the consummation of the merger, which will be renamed Pineapple Holdings Inc.

“CSI,” “Communications Systems,” the “Company,” “we,” “us,” or “our” refer to Communications Systems, Inc., a Minnesota corporation.

“CVR” means contingent value rights, governed by the CVR agreement, to be issued and distributed by CSI to CSI shareholders of record as of the close of the business day immediately preceding the closing of the merger.

“CVR agreement” means the Contingent Value Rights Agreement by and among Communications Systems, Inc., the Rights Agent and the CVR Holders’ Representative, a form of which is attached as Appendix A-2.

“E-Gear” means E-Gear, LLC, a Hawaii limited liability company.

“E&S Sale Transaction” means the sale by Communications Systems to Lantronix, Inc. on August 2, 2021 of all of the issued and outstanding stock of CSI’s wholly owned subsidiary, Transition Networks, Inc., and the entire issued share capital of CSI’s wholly owned subsidiary, Transition Networks Europe Limited.

“HEC” means Hawaii Energy Connection, LLC, a Hawaii limited liability company.

“Pre-Closing Acquisition” means Pineapple’s acquisition of substantially all of the assets of HEC and E-Gear and assumption of certain liabilities of HEC and E-Gear pursuant to that certain Asset Purchase Agreement, dated March 1, 2021 (the “Pre-Closing Acquisition Agreement”), by and among Pineapple, HEC, and E-Gear and Steven P. Godmere, as representative for the Sellers (as defined in the Pre-Closing Acquisition Agreement).

“merger agreement” refers to the Agreement and Plan of Merger dated as of March 1, 2021 by and among CSI, Helios Merger Co., a wholly owned subsidiary of CSI (“Merger Sub”), Pineapple, Lake Street Solar LLC, as the Pineapple Members’ Representative (the “Members’ Representative”), and Randall D. Sampson, as the CSI Shareholders’ Representative (the “Shareholders’ Representative”), a copy of which is attached as Appendix A-1.

“Pineapple” means Pineapple Energy LLC, a Delaware limited liability company.

“Pineapple Merger Transaction” refers to the transactions pursuant to the merger agreement, including the merger pursuant to which Merger Sub will merge with and into Pineapple with Pineapple surviving the merger as a wholly owned subsidiary of CSI and CSI will issue shares of its common stock in connection with the merger to members of Pineapple, as well as CSI entering into the CVR agreement and distributing the CVRs.

“PIPE Offering” means the transactions contemplated by the amended and restated securities purchase agreement dated September 15, 2021 between Communications Systems and the PIPE Investors that are the purchasers party to the securities purchase agreement pursuant to which CSI has agreed to sell and the PIPE Investors have agreed to purchase $32.0 million in newly authorized CSI Series A convertible preferred stock convertible at a price of $3.40 per share into CSI common stock, with five-year warrants to purchase an additional $32.0 million of common shares at that same price.

QUESTIONS AND ANSWERS

Q: Why am I receiving this proxy statement/prospectus?

A: You are receiving this proxy statement/prospectus because you have been identified as a shareholder of Communications Systems as of the record date, and you are entitled to vote at the special meeting. This document serves as a proxy statement of CSI used to solicit proxies for the special meeting of CSI shareholders and a prospectus of CSI used to issue shares of CSI common stock to members of Pineapple in connection with the merger.

Q: When and where will the special meeting be held?

A: The special meeting will be held on                ,             , 2021, at 10:00 a.m. Central Time (CT). The special meeting will be a virtual meeting of shareholders. You may attend the online meeting and vote your shares electronically during the special meeting via the internet by visiting: www.virtualshareholdermeeting.com/JCS2021SM2.

Q: How can I attend the virtual special meeting?

A: The special meeting will be online and a completely virtual meeting of shareholders due to the ongoing public health impact of the coronavirus (COVID-19) pandemic. This decision was made in light of the protocols that federal, state, and local governments have imposed or may impose in the near future and taking into account the health and safety of our shareholders, directors and members of management, as well as our desire to allow shareholders to participate in the special meeting wherever they may be located.

All shareholders are cordially invited to attend the special meeting. Whether or not you plan to attend the special meeting, please vote your shares by internet, telephone or signing and returning the enclosed proxy or other voting instruction form.

Please note that if you hold shares of CSI common stock through the CSI Employee Stock Purchase Plan (ESOP), your voting instructions for these shares must be received by 11:59 p.m. Eastern Time on             , 2021. You may not vote the CSI common stock allocated to you through the ESOP electronically during the special meeting.

To participate in the special meeting, you will need the 16-digit control number included on your proxy card or on the voting instructions that accompanied your proxy materials. Please have your 16-digit control number readily available and log on to the special meeting by visiting www.virtualshareholdermeeting.com/JCS2021SM2 and entering your 16-digit control number. If you are a participant in the CSI ESOP, you may attend the special meeting as a guest by visiting the same website and logging in as a guest. If you are attending as a guest, you will not need a control number. You may begin to log into the meeting platform beginning at 9:30 a.m. CT on             , 2021. The special meeting will begin promptly at 10:00 a.m. CT on               , 2021.

The virtual meeting platform is fully supported across browsers (Internet Explorer, Firefox, Chrome, and Safari) and devices (desktops, laptops, tablets, and cell phones) running the most updated version of applicable software and plugins. Participants should ensure that they have a strong internet connection wherever they intend to participate in the special meeting. Participants should also give themselves plenty of time to log in and ensure that they can hear streaming audio prior to the start of the special meeting. We recommend that you log in at least fifteen minutes before the special meeting.

Q: What matters will the shareholders vote on at the special meeting?

A: The shareholders will vote on the following nine proposals:

Q: What is the Pineapple Merger Proposal?

A: The Pineapple Merger Proposal is a proposal to approve the Agreement and Plan of Merger dated as of March 1, 2021 (the “merger agreement”) by and among Communications Systems, Inc., Helios Merger Co., a wholly owned subsidiary of CSI (“Merger Sub”), Pineapple Energy LLC (“Pineapple”), Lake Street Solar LLC, as the Pineapple Members’ Representative (the “Members’ Representative”), and Randall D. Sampson, as the CSI Shareholders’ Representative (the “Shareholders’ Representative”) pursuant to which Merger Sub will merge with and into Pineapple with Pineapple surviving the merger as a wholly owned subsidiary of CSI.

As consideration for the merger, CSI will issue to the members of Pineapple as of the effective time of the merger the “Base Consideration,” which is 15.6 million shares of CSI’s common stock, subject to certain adjustments. The Base Consideration will be increased for any outstanding convertible notes issued by Pineapple in the Convertible Note Financing, which will convert into additional shares of CSI common stock at a rate of one additional share for every $2.00 in unpaid principal and accrued interest on outstanding convertible notes. The Base Consideration will be decreased for any outstanding indebtedness of Pineapple at the closing of the merger in excess of $22.5 million, which will reduce the base consideration at a rate one share for every $2.00 of excess indebtedness. In addition to the Base Consideration, certain members of Pineapple may receive “Earnout Consideration,” which is additional shares upon the occurrence of milestones specified in the merger agreement.

We refer to the Base Consideration, as adjusted pursuant to the merger agreement, and the Earnout Consideration collectively as the “Merger Consideration.”

We refer to the transactions contemplated by the merger agreement as the “Pineapple Merger Transaction.”

Q: What will happen if the Pineapple Merger Proposal is approved by our shareholders?

A: Under the terms of the merger agreement, if the Pineapple Merger Proposal is approved by our shareholders and the other closing conditions under the merger agreement have been satisfied or waived, Merger Sub will merge with and into Pineapple with Pineapple surviving the merger as a wholly owned subsidiary of CSI. The Merger Consideration to the former Pineapple members will consist of CSI common stock. As a result, the former members of Pineapple will become shareholders of CSI.

The shareholders of CSI as of the close of the business day immediately preceding the effective time will continue to be shareholders in the merged company and receive one contractual contingent value right, or CVR, for each share of CSI common stock then held by them that entitle the holder of the CVR to a portion of the proceeds of dispositions received after the effective time pursuant to the CVR agreement.

Q: What is the Merger Issuance Proposal?

A: The Merger Issuance Proposal is a proposal to approve the issuance by CSI of shares of its common stock under the merger agreement.

Q: What is the PIPE Issuance Proposal?

A: The PIPE Issuance Proposal is a proposal to approve the issuance by CSI of shares of its common stock to the PIPE Investors in connection with the PIPE Offering. In the PIPE Offering, the PIPE Investors have agreed to purchase $32.0 million in newly authorized CSI Series A convertible preferred stock convertible at a price of $3.40 per share into CSI common stock, with five-year warrants to purchase an additional $32.0 million of common shares at that same price, pursuant to the terms of an amended and restated securities purchase agreement dated September 15, 2021.

Q: What is the Authorized Share Amendment Proposal?

A: The Authorized Share Amendment Proposal is a proposal to approve an amendment to CSI’s articles of incorporation to increase the authorized shares of common stock to 150 million.

Q; What is the Article IX Amendment Proposal?

A: The Article IX Amendment Proposal is a proposal to approve an amendment to the CSI articles of incorporation to eliminate Article IX relating to business combinations.

Q: What is the Reverse Stock Split Proposal?

A: The Reverse Stock Split Proposal is a proposal to approve a reverse stock split of the outstanding shares of CSI common stock, at a ratio within a range of 1-for-3 to 1-for-5, as determined by the CSI board of directors. Article IX of the CSI articles of incorporation requires shareholder approval of a reverse stock split. The Reverse Stock Split Proposal is being made in the event that our shareholders do not approve Proposal #5: Article IX Amendment Proposal to eliminate Article IX. The CSI board of directors may determine to effect the reverse stock split, if the Reverse Stock Split Proposal is approved by CSI shareholders, even if the merger is not consummated. The CSI board of directors also reserves the right to not effect the reverse stock split, even if the Reverse Stock Split Proposal is approved by CSI shareholders.

Q: What is the 2021 Equity Incentive Plan Proposal?

A: The 2021 Equity Incentive Plan Proposal is a proposal to approve the 2021 Equity Incentive Plan, a copy of which is attached to this proxy statement/prospectus as Appendix D.

Q: What is the Advisory Compensation Proposal?

A: The Advisory Compensation Proposal is a proposal to approve, on an advisory, non-binding basis, certain compensation that has, will or may be paid or become payable to the CSI named executive officers in connection with the Pineapple Merger Transaction.

The Advisory Compensation Proposal is advisory in nature and the outcome of the vote on the Advisory Compensation Proposal is not binding on CSI. Further, because we are contractually obligated to make the potential payments detailed in “Proposal #1: Pineapple Merger Proposal – Interests of Our Directors and Executive Officers in the Pineapple Merger Transaction – Golden Parachute Compensation,” such compensation may be paid, subject only to the conditions applicable thereto, regardless of the outcome of the vote on the Advisory Compensation Proposal.

Q: What is the Adjournment Proposal?

A: The Adjournment Proposal is a proposal to permit us to adjourn or postpone the special meeting for the purpose of soliciting additional proxies in the event that, at the special meeting, the affirmative votes in favor of the Pineapple Merger Proposal, the Merger Issuance Proposal, the PIPE Issuance Proposal, the Authorized Share Amendment Proposal or the Reverse Stock Split Proposal are less than the number of votes required to approve any such proposal.

If there are insufficient votes at the time of the special meeting to approve the Pineapple Merger Proposal, the Merger Issuance Proposal, the PIPE Issuance Proposal, the Authorized Share Amendment Proposal or the Reverse

Stock Split Proposal, and the Adjournment Proposal is approved at the special meeting, we will be able to adjourn or postpone the special meeting for purposes of soliciting additional proxies to approve the Pineapple Merger Proposal or the other proposals. If you have previously submitted a proxy on the proposals discussed in this proxy statement/prospectus and wish to revoke it upon adjournment or postponement of the special meeting, you may do so.

Q: Am I entitled to appraisal or dissenters’ rights in connection with the Pineapple Merger Proposal or any other proposal?

A: Shareholders are not entitled to appraisal or dissenters’ rights under Minnesota law or under CSI’s articles of incorporation or bylaws in connection with the Pineapple Merger Proposal or any other proposal.

Q: Who is entitled to vote at the special meeting?

A: Holders of CSI common stock at the close of business on                , 2021, the record date for the special meeting established by the CSI board of directors, are entitled to receive notice of, and to vote their shares at, the special meeting and any related adjournments or postponements. As of the close of business on the record date, there were 9,720,627 shares of our common stock outstanding and entitled to vote. Holders of our common stock are entitled to one vote per share.

Q: What are the quorum requirements for the special meeting?

A: The presence at the special meeting of at least a majority of the issued and outstanding shares of CSI’s common stock entitled to vote at the special meeting is necessary to constitute a quorum for transacting business at the special meeting. A shareholder is counted as present at the special meeting if the shareholder attends the online special meeting or the shareholder has properly submitted a proxy by internet, telephone or signing and returning the enclosed proxy or other voting instruction form as described below under “Q: How do I vote?” A validly submitted proxy will result in your shares counting towards a quorum even if no voting instructions are provided.

Q: What vote is required to approve each of the proposals?

A: You may vote “FOR,” “AGAINST” or “ABSTAIN” on each proposal. The following table summarizes the vote required for each proposal, the effect on each proposal of a vote of “ABSTAIN”, and the effect on each proposal of failing to vote at the special meeting. For Proposals #1-#8, a quorum also must be present at the special meeting.

* Other than shares allocated to participants in the CSI ESOP.

If you are a participant in the CSI ESOP and do not vote the CSI shares allocated to you in the CSI ESOP, your shares will be voted at the special meeting according to the provisions of the CSI ESOP, which provide that the trustees will vote these shares on each proposal in the same proportion as all shares of CSI common stock allocated to ESOP participants for which voting instructions were received and were voted on that proposal.

Q: How do I vote?

A: Whether or not you plan to attend the special meeting, you may vote your shares in advance of the special meeting by internet, telephone or signing and returning the enclosed proxy card. If you hold your shares in street name, then you received this proxy statement/prospectus from your broker, bank or nominee, along with a voting instruction card from your broker, bank or nominee. You will need to instruct your broker, bank or other nominee on how to vote your shares of common stock using the voting instructions provided.

Please note that if you hold shares of CSI common stock through the CSI Employee Stock Purchase Plan (ESOP), your voting instructions for these shares must be received by 11:59 p.m. Eastern Time on                        , 2021. You may not vote the CSI common stock allocated to you through the ESOP electronically during the special meeting.

Except with respect to shares allocated to you as a participant in the CSI ESOP, you may vote your shares electronically during the special meeting. You will need the 16-digit control number included on your proxy card or on the voting instructions that accompanied your proxy materials. Please have your 16-digit control number readily available and log on to the special meeting by visiting www.virtualshareholdermeeting.com/JCS2021SM2 and entering your 16-digit control number. You may begin to log into the meeting platform beginning at 9:30 a.m. CT on                        , 2021. The special meeting will begin promptly at 10:00 a.m. CT on                         , 2021.

Even if you plan to attend the special meeting, we strongly encourage you to submit a proxy for your shares in advance as described above, so your vote will be counted if you are not able to attend.

All shares represented by properly executed proxies received in time for the special meeting will be voted in the manner specified by the shareholders giving those proxies.

Q: If I hold my shares in street name through my broker, will my broker vote these shares for me?

A: If you hold your shares in street name, you must provide your broker, bank or other nominee with instructions in order to vote those shares. To do so, you should follow the voting instructions provided to you by your bank, broker or other nominee. If your bank, broker or nominee holds your shares in its name and you do not instruct it how to vote, it will not have discretion to vote on any of the proposals at the special meeting and none of your street name shares will be voted at the special meeting. If you provide voting instructions to your broker, bank or other nominee, that entity will vote your shares as you instruct.

Q: Can I change my vote?

A: Yes. If you are a shareholder of record, you may change your vote or revoke your proxy at any time before the vote at the special meeting by:

If your shares are held in street name, you must contact your broker, bank or nominee to revoke your proxy or vote at the special meeting.

Q: What if I do not specify a voting choice for a proposal when returning a proxy?

A: Proxies or other voting instruction forms that are signed and returned without voting instructions will be voted in accordance with the recommendations of the CSI board of directors. The CSI board of directors unanimously recommends that shareholders vote FOR the Pineapple Merger Proposal and FOR each other proposal presented at the special meeting.

Q: What is the difference between a shareholder of record and a shareholder who holds stock in street name?

A: If your shares are registered in your name, that is, you have a Communications Systems stock certificate or hold your shares in an account with our transfer agent, Equiniti Trust Company, you are a shareholder of record. If your shares are held in an account with a broker, bank or another holder of record, these shares are considered to be held in street name.

Q: What does it mean if I get more than one proxy card?

A: If your shares are registered differently and are in more than one account, you may receive more than one proxy card. Please complete, sign, date, and return all of the proxy cards you receive regarding the special meeting to ensure that all of your shares are voted.

Q: How are proxies solicited and what is the cost?

A: CSI will bear all expenses incurred in connection with the solicitation of proxies and printing, filing and mailing this proxy statement/prospectus. We have engaged The Proxy Advisory Group, LLC (“PAG”) to assist in the solicitation of proxies and provide related advice and information support, for a services fee and the reimbursement of customary disbursements, which are not expected to exceed $40,000 in total. CSI will be solely responsible for the costs of the solicitation.

Additionally, certain of CSI’s directors, officers and regular employees may solicit proxies personally or by telephone, letter, facsimile, or email. These directors, officers and employees will not be paid additional remuneration for their efforts but may be reimbursed for out-of-pocket expenses incurred in connection therewith. We will request brokers, custodians, nominees, and other record holders to forward copies of the proxy statement/prospectus and related soliciting materials to persons for whom they hold shares of our common stock and to request authority for the exercise of proxies. In such cases, upon the request of the record holders, we will reimburse such holders for their reasonable out-of-pocket expenses.

Q: What should I do if I have questions regarding the special meeting?

A: If you have any questions about how to cast your vote for the special meeting or would like copies of any of the documents referred to or incorporated by reference in this proxy statement/prospectus, you should call our Secretary at (952) 996-1674 or our proxy solicitor, The Proxy Advisory Group, LLC, 18 East 41st Street, Suite 2000, New York, New York 10017, at (212) 616-2181.

SELECTED HISTORICAL AND UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL DATA

Selected Historical Financial Data of CSI

The following table sets forth selected historical statements of loss and comprehensive loss and balance sheet data of CSI for each of the periods presented. The selected financial data has been derived from CSI’s audited financial statements as of and for the years ended December 31, 2020 and 2019, and from CSI’s unaudited financial statements as of and for the six months ended June 30, 2021, each of which is included elsewhere in this proxy statement/prospectus.

The following table should be read together with “CSI MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” beginning on page 171 of this proxy statement/prospectus and CSI’s consolidated audited financial statements as of and for the years ended December 31, 2020 and 2019 and related notes and CSI’s condensed consolidated unaudited financial statements as of and for the six months ended June 30, 2021 and related notes beginning on page F-1 of this proxy statement/prospectus.

CSI’s historical results are not necessarily indicative of results to be expected in any future period.