Pineapple Energy Inc. (Nasdaq: PEGY) (“Pineapple”), a leading provider of sustainable solar energy and backup power to households, businesses, municipalities, and for servicing existing systems, today announced that it will distribute to the holders of its non-transferable Contingent Value Rights (“CVRs”) a payment of $850,269, or $0.35 per CVR.
“Since taking the helm, one of our top priorities has been honoring the trust of our investors. Making good on our commitments means meeting our obligations to CSI shareholders through these CVR distributions,” said Scott Maskin, Interim Chief Executive Officer. “Our new leadership team continues to author a new future for Pineapple Energy, with a focus on elevating our corporate governance, properly aligning our cost structure, creating a new corporate culture, and refining our strategy to most effectively and efficiently address the significant long-term market opportunities we believe exist in our industry.”
Pursuant to the merger of Communications Systems Inc. (CSI) and Pineapple, which was completed on March 28, 2022 (the “Merger”), CSI shareholders of record at the close of business on March 25, 2022 (the “CVR Holders”) received one contractual, non-transferable CVR per share of CSI common stock. Subject to the terms of the Contingent Value Rights Agreement dated March 25, 2022 and amended on March 27, 2024, which governs the rights of Pineapple and the CVR Holders, each CVR represents the right to receive a pro rata portion of net proceeds available from the disposition of CSI’s premerger assets following the Merger.
In addition to the distribution to all CVR Holders, a nominal amount (in addition to the $0.35) will be paid solely to the Pineapple Energy Employee Stock Ownership Plan (“ESOP”) (formerly Communication Systems, Inc. Employee Stock Ownership Plan) with respect to the CVRs held by the ESOP to permit the orderly termination of the ESOP in 2024. The ESOP acquired its CVRs at the time of the Merger for CSI shares allocated to the accounts of CSI employees and former employees.
We expect that the $0.35 per CVR payment to the CVR Holders will commence by November 15, 2024.
