Quarterly report pursuant to Section 13 or 15(d)

Nature of Operations (Policy)

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Nature of Operations (Policy)
 6 Months Ended
Jun. 30, 2024
Nature of Operations [Abstract]  
Description of Business Description of Business

Pineapple Energy Inc. (“PEGY”, “Pineapple”, “we”, “our”, “us” or the “Company”) was originally organized as a Minnesota corporation in 1969. On March 28, 2022, the Company completed its previously announced merger transaction with Pineapple Energy LLC (“Pineapple Energy”) in accordance with the terms of that certain Agreement and Plan of Merger dated March 1, 2021, as amended by an Amendment No. 1 to Merger Agreement dated December 16, 2021 (collectively the “Merger Agreement”), by and among the Company, Helios Merger Co., a Delaware corporation and a wholly-owned subsidiary of the Company (the “Merger Sub”), Pineapple Energy LLC, a Delaware limited liability company, Lake Street Solar LLC as the Members’ Representative, and Randall D. Sampson as the Shareholders’ Representative, pursuant to which Merger Sub merged with and into Pineapple Energy, with Pineapple Energy surviving the merger as a wholly-owned subsidiary of the Company (the “Merger”). Following the closing of the Merger (the “Closing”) the Company changed its name to Pineapple Holdings, Inc. and commenced doing business using the Pineapple name, and subsequently, on April 13, 2022, changed its name to Pineapple Energy Inc.

 

The Company is a 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.  

Pineapple today is primarily engaged in the sale, design, and installation of photovoltaic solar energy systems and battery storage systems through its Hawaii-based subsidiary, Hawaii Energy Connection, LLC (“HEC”) and New York-based subsidiaries, the SUNation entities (collectively, “SUNation”). 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.  

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. Our primary customers for this technology are energy services companies and other utilities.  

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. (“JDL”) and Ecessa Corporation (“Ecessa”) businesses. See Note 5, Discontinued Operations. As a result, unless otherwise noted, all information in this quarterly report on Form 10-Q 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.
Reverse Stock Split 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.

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 “Reverse Stock Split”) and approved an amendment (“Reverse Stock Split Amendment”) to the Fourth Amended and Restated Articles of Incorporation of the Company to effect the Reverse Stock Split.

Effective June 12, 2024, the Company amended its Fourth Amended and Restated Articles of Incorporation to implement the Reverse Stock Split. The Company's common stock began trading on a split-adjusted basis when the market opened on June 12, 2024 (the "Effective Date").

 

As a result of the Reverse Stock Split, at 12:01 a.m. Central Time on the 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. No fractional shares were outstanding following the Reverse Stock Split, and any fractional shares that would have resulted from the 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. The total number of shares authorized for issuance was reduced to 7,500,000 in proportion to the Reverse Stock Split ratio.

 

Effective as of the same time as the Reverse Stock Split, the number of shares of common stock available for issuance under the Company's equity compensation plans were automatically reduced in proportion to the Reverse Stock Split ratio. Upon effectiveness, the Reverse Stock Split also resulted in reductions in the number of shares of common stock issuable upon exercise or vesting of equity awards in proportion to the Reverse Stock Split ratio and caused a proportionate increase in exercise price or share-based performance criteria, if any, applicable to such awards.

The effects of the Reverse Stock Split have been reflected in this Quarterly Report on Form 10-Q for all periods presented.

Impact of the Reverse Stock Split

The impact of the Reverse Stock Split was applied retroactively for all periods presented in accordance with applicable guidance. Therefore, prior period amounts are different than those previously reported.

The following table illustrates changes in common stock (in number of shares and dollar amount) and additional paid-in-capital, as previously reported prior to, and as adjusted subsequent to, the impact of the Reverse Stock Split retroactively adjusted for the periods presented:

June 30, 2023

As Previously Reported

Impact of Reverse Stock Split

As Adjusted

Common Stock shares

10,033,831

(9,364,909)

668,922

Common Stock amount

$

501,692

$

(468,246)

$

33,446

Additional Paid-in-Capital

$

46,546,917

$

468,246

$

47,015,163

March 31, 2023

March 31, 2024

As Previously Reported

Impact of Reverse Stock Split

As Adjusted

As Previously Reported

Impact of Reverse Stock Split

As Adjusted

Common Stock shares

9,948,836

(9,285,580)

663,256

64,154,286

(59,877,333)

4,276,953

Common Stock amount

$

497,442

$

(464,279)

$

33,163

$

3,207,714

$

(2,993,867)

$

213,847

Additional Paid-in-Capital

$

46,088,941

$

464,279

$

46,553,220

$

11,470,950

$

2,993,867

$

14,464,817

December 31, 2022

December 31, 2023

As Previously Reported

Impact of Reverse Stock Split

As Adjusted

As Previously Reported

Impact of Reverse Stock Split

As Adjusted

Common Stock shares

9,915,586

(9,254,547)

661,039

10,246,605

(9,563,498)

683,107

Common Stock amount

$

495,779

$

(462,727)

$

33,052

$

512,330

$

(478,175)

$

34,155

Additional Paid-in-Capital

$

45,798,069

$

462,727

$

46,260,796

$

46,977,870

$

478,175

$

47,456,045

The following table illustrates changes in loss per share and weighted average shares outstanding, as previously reported prior to, and as adjusted subsequent to, the impact of the Reverse Stock Split retroactively adjusted for the periods presented:

Three Months Ended June 30, 2023

As Previously Reported

Impact of Reverse Stock Split

As Adjusted

Weighted average shares outstanding - basic and diluted

9,948,836

(9,285,580)

663,256

Loss per share from continuing operations - basic and diluted

$

(0.03)

$

(0.47)

$

(0.50)

Loss per share from discontinued operations - basic and diluted

$

(0.13)

$

(1.70)

$

(1.83)

Six Months Ended June 30, 2023

As Previously Reported

Impact of Reverse Stock Split

As Adjusted

Weighted average shares outstanding - basic and diluted

9,934,324

(9,272,036)

662,288

Loss per share from continuing operations - basic and diluted

$

(0.29)

$

(4.14)

$

(4.43)

Loss per share from discontinued operations - basic and diluted

$

(0.12)

$

(1.65)

$

(1.77)