Pineapple Energy Inc. filed SEC Form 8-K: Material Modification to Rights of Security Holders, Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year, Changes in Control of Registrant, Submission of Matters to a Vote of Security Holders, Other Events, Financial Statements and Exhibits
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CURRENT
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PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
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| Item 3.03 | Material Modifications to Rights of Security Holders. |
The information contained in Item 5.03 under the heading, “Elimination of Series B Preferred Stock,” is incorporated by reference into this Item 3.03.
| Item 5.01 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Amendment to Equity Plan
As reported below in Item 5.07, on July 19, 2024, the shareholders of Pineapple Energy Inc. (the “Company”) approved an amendment to the Company’s 2022 Equity Incentive Plan (the “2022 Equity Plan”) to increase the number of shares of the Company’s common stock, par value $0.05 per share (the “Common Stock”), authorized for issuance under the 2022 Equity Plan, and the number of shares of Common Stock that can be issued as incentive stock options under the 2022 Equity Plan, in each case from 83,333 to 666,666 shares (collectively, the “Plan Amendments”) on a post-split basis reflecting the 1-for-15 reverse stock split that took effect on June 12, 2024 (the “June 2024 Reverse Stock Split”).
The Plan Amendments were included as Proposal 7 in the Company’s definitive proxy statement (the “Proxy Statement”) for its Annual Meeting of Shareholders filed with the Securities and Exchange Commission (the “SEC”) on May 29, 2024. A copy of the 2022 Equity Plan, as amended to reflect the Plan Amendments, is attached as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
| Item 5.03. | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
Increase in Authorized Shares
As reported below in Item 5.07, on July 19, 2024, the shareholders of the Company approved an amendment to the Company’s Fourth Amended and Restated Articles of Incorporation (the “Articles of Incorporation”) to increase the number of authorized shares of Common Stock to a total of 133,333,333 shares (the “Share Amendment”) on a post-split basis reflecting the June 2024 Reverse Stock Split. The Share Amendment, which was included as Proposal 6 in the Proxy Statement, became effective on July 24, 2024 upon filing of Articles of Amendment to the Articles of Incorporation with the Secretary of State of the State of Minnesota.
A copy of the Articles of Amendment as filed with the Secretary of State of the State of Minnesota is attached as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Elimination of Series B Preferred Stock
As previously reported, on May 13, 2024, the Company issued and sold one share of the Company’s Series B Preferred Stock, par value $1.00 per share (the “Series B Preferred Stock”). As described in Item 5.07 below, on July 19, 2024, the Company’s shareholders approved proposals relating to a reverse stock split and an increase in the Company’s authorized number of shares of Common Stock and, as a result, the Series B Preferred Stock was automatically, and without any further action, cancelled for no consideration.
| Item 5.07. | Submission of Matters to a Vote of Security Holders. |
On July 19, 2024, the Company held its reconvened 2024 Annual Meeting of Shareholders (the “Reconvened Annual Meeting”). At the Reconvened Annual Meeting, the Company’s shareholders voted on the eight proposals described below. The proposals presented at the Reconvened Annual Meeting are described in detail in the Proxy Statement.
Of the 108,546,773 shares of Common Stock outstanding and entitled to vote, and the one share of Series B Preferred Stock, at the Reconvened Annual Meeting, 55,485,322, or 51.1%, of the outstanding shares, were present either in person or by proxy. Holders of Common Stock voted one vote per share on all matters properly brought before the Reconvened Annual Meeting. The holder of the Series B Preferred Stock voted 5,000,000,000 votes per share for only the Reverse Stock Split Proposal and the Authorized Share Amendment Proposal, and one vote per share for each of the director nominees. The Series B Preferred Stock was not entitled to vote on any other matters. Holders of record of shares of Common Stock and the Series B Preferred Stock voted on the election of directors, the Reverse Stock Split Proposal and the Authorized Share Amendment Proposal as a single class.
Therefore, a total of (i) 108,546,774 votes were entitled to be cast at the meeting with respect to the election of each of the six directors, (ii) 108,546,773 votes were entitled to be cast at the meeting with respect to each of the Auditor Ratification Proposal, Say-On-Pay Proposal, Say-On-Frequency Proposal, the Equity Incentive Plan Amendment Proposal, and the Adjournment Proposal and (iii) 5,108,546,773 votes were entitled to be cast at the meeting with respect to each of the Reverse Stock Split Proposal and the Authorized Share Amendment Proposal.
The results for each of the proposals submitted to a vote of shareholders at the Reconvened Annual Meeting are as follows:
Proposal 1: Election of Directors Proposal
The following nominees were elected to serve as directors for a term that will last until the Company’s 2025 Annual Meeting of Shareholders or until his successor is duly elected and qualified. The voting with respect to the election of directors was as follows:
| Nominee | Votes For | Withheld | Broker Non-Votes |
| Thomas Holland | 29,486,293 | 6,622,274 | 19,376,756 |
| Scott Honour | 29,050,151 | 7,058,416 | 19,376,756 |
| Henry B. Howard | 30,542,226 | 5,566,341 | 19,376,756 |
| Roger Lacey | 30,621,864 | 5,486,703 | 19,376,756 |
| Scott Maskin | 30,585,274 | 5,523,293 | 19,376,756 |
| Kevin O’Connor | 30,508,865 | 5,599,702 | 19,376,756 |
Proposal 2: Auditor Ratification Proposal
The Company’s shareholders ratified the appointment of UHY LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2024 by voting as follows:
| For | Against | Abstain | ||||
| 46,674,827 | 2,751,063 | 6,058,432 |
Proposal 3: Say-On-Pay Proposal
The Company’s shareholders approved, on a non-binding advisory basis, the compensation for our named executive officers by voting as follows:
| For | Against | Abstain | Broker Non-Votes | |||
| 26,701,336 | 3,868,884 | 5,538,346 | 19,376,756 |
Proposal 4: Say-On-Frequency Proposal
The Company’s shareholders conduct an advisory vote on the frequency (every one, two, or three years) of future advisory votes on the compensation of the Company’s named executive officers. The shareholders voted as follows:
| One Year | Two Years | Three Years | Abstain | Broker Non-Votes | ||||
| 6,009,729 | 995,107 | 22,160,097 | 6,943,633 | 19,376,756 |
Proposal 5: Reverse Stock Split Proposal
The Company’s shareholders approved an amendment to the Company’s Articles of Incorporation, to effect, at the discretion of the Company’s board of directors, a reverse stock split of the Company’s issued and outstanding Common Stock at a ratio of 1-for-2 to 1-for-200, with a ratio within such range to be determined by the board of directors of the Company, based on the votes set forth below:
| For | Against | Abstain | |||
| 3,858,163,919 | 902,209,786 | 295,111,617 |
Proposal 6: Authorized Share Amendment Proposal
The Company’s approved the amendment of the Company’s Articles of Incorporation to increase the number of authorized shares of Common Stock from 7,500,000 to 133,333,333 by voting as follows:
| For | Against | Abstain | Broker Non-Votes | |||||
| 3,694,720,624 | 892,199,566 | 449,188,375 | 19,376,756 |
Proposal 7: Equity Incentive Plan Amendment Proposal
The Company’s shareholders approved the amendment to the Company’s 2022 Equity Plan to increase the number of shares of Common Stock authorized for issuance under the 2022 Equity Plan and the number of shares that can be issued as incentive stock options under the 2022 Equity Plan from 83,333 to 666,666 shares by voting as follows:
| For | Against | Abstain | Broker Non-Votes | |||
| 24,417,889 | 6,623,269 | 5,067,408 | 19,376,756 |
Proposal 8: Adjournment Proposal
The Company’s shareholders approved the one or more adjournments of the Reconvened Annual Meeting to a later date or dates to solicit additional proxies if there are insufficient votes to approve any of the proposals at the time of the Reconvened Annual Meeting by voting as follows:
| For | Against | Abstain | ||||
| 45,621,618 | 6,243,635 | 3,620,069 |
| Item 8.01. | Other Events. |
Nasdaq Compliance
On July 18, 2024, the Company received a notice (the “Notice”) from the Listing Qualifications Department (the “Staff”) of the Nasdaq Stock Market informing the Company that it has regained compliance with the bid price requirement in Listing Rule 5550(a)(2) (the “Bid Price Rule”), and that, as a result, the Company will be subject to a Mandatory Panel Monitor for a period of one year from the date of this letter in accordance with Listing Rule 5815(d)(4)(B). If, within that one-year monitoring period, the Staff finds the Company again out of compliance with the Bid Price Rule, the Company will not be permitted to provide the Staff with a plan of compliance with respect to that deficiency and the Staff will not be permitted to grant additional time for the Company to regain compliance with respect to that deficiency, nor will the Company be afforded an applicable cure or compliance period pursuant to Rule 5810(c)(3). Instead, the Staff will issue a Delist Determination Letter and the Company will have an opportunity to request a new hearing with the initial panel or a newly convened Hearings Panel if the initial panel is unavailable. The Company will have the opportunity to respond/present to the Hearings Panel as provided by Listing Rule 5815(d)(4)(C). The Company’s securities may be at that time delisted from Nasdaq.
The Notice also reminded the Company that while the Company has regained compliance with the Bid Price Rule, it is still required to regain compliance with the equity requirement in Listing Rule 5550(b)(1) (the “Equity Rule”).
As previously disclosed, On May 16, 2024, the Company received a notice from the Staff informing the Company that it no longer complies with the requirement under Nasdaq Listing Rule 5550(b)(1) to maintain a minimum of $2,500,000 in stockholders’ equity for continued listing on the Nasdaq Capital Market because the Company reported stockholders’ equity of negative $11.2 million in its Form 10-Q for the period ended March 31, 2024, and, as of the date of the Notice, the Company did not meet the alternatives of market value of listed securities or net income from continuing operations.
As of July 24, 2024, as a result of the shareholder approval of the increase in authorized shares of the Company’s common stock as disclosed in Item 5.01 and incorporated by reference under this Item, the Company believes it has stockholders’ equity above the $2.5 million requirement under the Equity Rule as the Company will be able to reclassify equity previously treated as mezzanine equity to permanent equity. In addition, the Company provided an update to the Hearing Panel on how it plans to maintain long-term compliance with the Equity Rule. This plan is under Nasdaq review.
Potential Changes in Domicile
The Company is considering certain changes to its Articles of Incorporation, including, without limitation, changes in domicile or its state of incorporation. The Company is still investigating its options and may choose not to undertake any such action.
| Item 9.01. | Financial Statements and Exhibits. |
The following exhibits are being filed with this Current Report on Form 8-K:
EXHIBIT INDEX
| Exhibit No. | Description | |
| 3.1 | Articles of Amendment to the Articles of Incorporation, dated July 24, 2024. | |
| 10.1 | Pineapple Energy Inc. 2022 Equity Incentive Plan, as amended through July 19, 2024. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
Forward-Looking Statements
This Current Report on Form 8-K includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the Company’s current expectations or beliefs and are subject to uncertainty and changes in circumstances, including the Company’s ability to regain compliance with Nasdaq’s listing standards, its ability to effect another reverse stock split, and its efforts to manage costs, including the possibility of a change in domicile. While the Company believes its plans, intentions, and expectations reflected in those forward-looking statements are reasonable, these plans, intentions, or expectations may not be achieved. For information about the factors that could cause such differences, please refer to the Company’s filings with the Securities and Exchange Commission, including, without limitation, the statements made under the heading “Risk Factors” in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 and in subsequent filings. The Company does not undertake any obligation to update or revise these forward-looking statements for any reason, except as required by law.
SIGNATUREs
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| PINEAPPLE ENERGY INC | ||
| By: | /s/ Scott Maskin | |
| Scott Maskin, | ||
| Interim Chief Executive Officer | ||
| Date: July 25, 2024 | ||