UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Amendment No. 1)
| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the fiscal year ended
OR
| |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission
File No.
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) |
| (Address of Principal Executive Offices) | (Zip Code) |
(Registrant’s telephone number)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Common Stock, Par Value $0.0001
(Title of class)
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and, (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically, if any, every Interactive Data File required to be submitted pursuant
to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit).
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein and, will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
| ☒ | Smaller reporting company | |||||
| Emerging growth company |
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 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262 (b)) by the registered public
accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
YES
☐ NO
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).
YES ☐ NO ☒
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO
The
aggregate market value of the Common Stock held by non-affiliates as of March 31, 2024 was $
The number of shares of the Registrant’s Common Stock outstanding as of March 31, 2024 was .
| Auditor Name | Auditor Location | Auditor Firm ID | ||
DOCUMENTS INCORPORATED BY REFERENCE
EXPLANATORY NOTE
Except as expressly noted in this Amendment No. 1, this Amendment No. 1 does not reflect events that may have occurred subsequent to the Original Filing Date or modify or otherwise update any other disclosures contained in the Original Form 10-K, including, without limitation, the financial statements. Accordingly, this Amendment No. 1 should be read in conjunction with the Original Form 10-K.
TABLE OF CONTENTS
PART III
| ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
Directors, Executive Officers and Corporate Governance
Directors and Executive Officers
Our directors and executive officers are as follows:
| Name | Age | Position | ||
| Jeffrey Peck | 53 | Chief Executive Officer | ||
| Rob Vanderbeek | 59 | Interim Chief Financial Officer | ||
| Frederick Myrick | 62 | Executive Vice President of Solar and Director | ||
| Stewart Martin | 59 | Director | ||
| Andrew Matthy | 43 | Director | ||
| Claudia Meer | 62 | Director |
Jeffrey Peck was appointed Chief Executive Officer and President of the Company upon the closing of the Reverse Merger and Recapitalization between the Company and Jensysn Acquisition Corp. which occurred on June 20, 2019 (the “Reverse Merger and Recapitalization”) and has served in those capacities except for a brief period in 2024. Mr. Peck previously was the majority owner and President of Peck Electric Co. (“Peck Electric”) since he purchased it from his family in the late 1990s. Since then, Mr. Peck transformed Peck Electric from a local electrical contracting business to one of the largest commercial solar EPC companies in the Northeastern United States, ranked 59th in the U.S. for 2020 by Solar Power World (listed as, “Peck Electric Company”). Mr. Peck grew Peck Electric to nearly 100 employees, with many employees having tenures of over 30 years. Mr. Peck was also responsible for timing the strategic direction of Peck Electric’s focus into solar EPC at the time when solar installation became a profitable business in 2013 and also began investing in Company-owned arrays, with a current portfolio of approximately three megawatts. Mr. Peck has served as Chairman of Vermont Electrical Contractors, Chairman of the Joint Health and Welfare Committee as well as the IBEW Local 300 Pension funds. Mr. Peck graduated from Champlain College in 1993. Mr. Peck is well qualified to serve as a director due to his extensive management experience of the Company.
Rob Vanderbeek was appointed to serve as Interim Chief Financial Officer of the Company pursuant to a Letter of Engagement between Novo Advisors, LLC and the Company, dated April 16, 2024. Mr. Vanderbeek will not receive any direct compensation from the Company other than indirectly in connection with the fees paid by the Company to Novo Advisors, LLC. Mr. Vanderbeek is a partner with Novo Advisors, LLC, and has more than 30 years of restructuring, performance improvement and a deep understanding of corporate finance and due diligence in a broad range of industries, including healthcare, renewable energy, financial services, transportation and trucking, manufacturing, mortgage products, real estate, retail, hospitality, equipment leasing and distribution. Mr. Vanderbeek has led many companies facing operational and financial challenges through the restructuring and sales processes for various constituents. He has served as interim COO, CFO, Treasurer and other interim mandates related to complex matters and has also played key roles in operational cost rationalization efforts.,
Fredrick “Kip” Myrick was appointed to the Board of Directors of the Company and Executive Vice President of Solar upon the consummation of the Reverse Merger and Recapitalization. At the time, he had worked at Peck Electric for over 30 years. Mr. Myrick joined the Company in 1988 as a journeyman electrician, and in 1993, Mr. Myrick was promoted to foreman and successfully managed the numerous small and large-scale projects at Global Foundries, IBM’s chip-manufacturing business. From 1995 to 1998 Mr. Myrick held positions of general foreman and superintendent, then project manager/estimator in 2005. In 2006, Mr. Myrick became a significant minority stockholder in the Company and its Vice President, then started the Peck Solar division in 2008 and has managed the construction of the largest solar array in Vermont. Mr. Myrick is also responsible for the innovative dual-use farming of saffron with solar arrays in collaboration with the University of Vermont, which has attracted national news attention. Mr. Myrick is a NABCEP-certified Photovoltaic Installation Professional and holds a Vermont Master Electricians License. Mr. Myrick is well qualified to serve as a director due to his experience in solar project design and construction.
Stewart Martin was appointed to the Board of Directors of the Company upon the consummation of the Company’s Reverse Merger and Recapitalization with Jensyn Acquisition Corp. and previously served as a member of Jensyn’s Board of Directors since November 2016. Since August 2013, he has served as Executive Vice President, Sales and Producer Development of Marsh & McLennan Agencies – Florida, a subsidiary of Marsh & McLennan Companies. He previously served as Senior Vice President and a member of the Board of Directors of Seitlin Insurance and Advisors, which was acquired by Marsh & McLennan, LLC in November 2011. The Board determined that Mr. Martin qualifies as “independent” in accordance with the published listing requirement. Mr. Martin is a member of the Company’s Compensation Committee, Corporate Governance/Nominating Committee and Audit Committee. Mr. Martin is well qualified to serve as independent director due to his substantial management and previous board experience.
| 1 |
Andrew Matthy was appointed to the Board of Directors of the Company on June 2, 2021. The Board determined that Mr. Matthy qualifies as “independent” in accordance with the published listing requirements of Nasdaq. Mr. Matthy has been appointed to the Company’s Compensation Committee, Corporate Governance/Nominating Committee and Audit Committee. Mr. Matthy previously served as Vice President at Hobbs & Towne, one of the first executive search firms to ever focus on cleantech. In this role he placed senior executives in many of the leading industry platforms, often building entire teams to facilitate new market entry. Starting his career off at Iron Mountain, Andy has almost twenty years of building teams for leading finance and renewable energy firms, advising on strategy, compensation, capital structuring and more. Mr. Matthy is well qualified to serve on the Company’s Audit Committee as a financial expert.
Claudia Meer was appointed to the Board of Directors on February 1, 2021. The Board determined that Ms. Meer qualifies as “independent” in accordance with the published listing requirements of Nasdaq. Ms. Meer has been appointed to the Company’s Compensation Committee, Corporate Governance/Nominating Committee and Audit Committee. Ms. Meer has more than 30 years’ experience in corporate finance, strategy, creative deal structuring and executive leadership in real estate, hospitality, telecom, financial services and renewable energy industries. For the past fifteen years she has driven financial transactions in the clean energy industry. Ms. Meer currently serves as Chief Executive Officer of Coremax Consulting Inc., and formerly served as Chief Investment Officer & Chief Financial Officer at AlphaStruxure, a venture created in early 2019 by the Carlyle Group and Schneider Electric to develop and fund clean energy infrastructure. Ms. Meer currently serves as Director at Newpark Resources, Inc. Ms. Meer is well qualified to serve on the Company’s Audit Committee as a financial expert.
Family Relationships
There are no family relationships among any of our directors or executive officers.
Involvement in Certain Legal Proceedings
No officer, director, promoter or significant employee of the Company has been involved in the last ten years in any of the following:
| ● | any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; | |
| ● | any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); | |
| ● | being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his/her involvement in any type of business, securities or banking activities; |
| ● | being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated; | |
| ● | having any government agency, administrative agency, or administrative court impose an administrative finding, order, decree, or sanction against them as a result of their involvement in any type of business, securities, or banking activity; | |
| ● | being the subject of a pending administrative proceeding related to their involvement in any type of business, securities, or banking activity; or | |
| ● | having any administrative proceeding been threatened against him/her related to their involvement in any type of business, securities, or banking activity. |
Code of Ethics
The Company has adopted a code of ethics that applies to the directors, officers and employees of the Company. A copy of this code has been filed with the Commission as Exhibit 14 to the Original Form 10-K.
| 2 |
Classified Board of Directors
In accordance with our Fifth Amended and Restated Certificate of Incorporation, our Board of Directors is divided into three classes, i.e., Class A, Class B and Class C, with only one class of directors being elected in each year and the members of each class serving a three-year term. Our Board of Directors consists of five members.
During the fiscal year ended December 31, 2023, our Board of Directors held three meetings and acted by Unanimous Written Consent on nineteen occasions, and our Audit Committee, Compensation Committee, Corporate Governance and Nominating Committee each held four meetings. During the fiscal year ended December 31, 2023, each of our directors attended at least 75% of the Board meetings and their respective committee meetings. The Company does not have a policy regarding director attendance at annual meetings but encourages the directors to attend if possible.
Corporate Governance
Committees of the Board of Directors
The standing committees of our Board of Directors consists of an Audit Committee, a Compensation Committee and a Corporate Governance and Nominating Committee. Each of the committees report to the Board of Directors as they deem appropriate and as the Board may request. The composition, duties and responsibilities of these committees are set forth below.
Audit Committee
The Board has established an Audit Committee of the Board of Directors, which currently consists of Messrs. Matthy and Martin and Ms. Meer as Chair, each of whom meets the independent director standard under Nasdaq’s listing standards and under Rule 10A-3(b)(1) of the Exchange Act. The Audit Committee’s duties, which are specified in our Audit Committee Charter, include, but are not limited to:
| ● | reviewing and discussing with management and the independent auditor the annual audited financial statements, and recommending to the board whether the audited financial statements should be included in our Form 10-K; | |
| ● | discussing with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of our financial statements; | |
| ● | discussing with management major risk assessment and risk management policies; | |
| ● | monitoring the independence of the independent auditor; | |
| ● | verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law; | |
| ● | reviewing and approving all related-party transactions; | |
| ● | inquiring and discussing with management our compliance with applicable laws and regulations; | |
| ● | pre-approving all audit services and permitted non-audit services to be performed by our independent auditor, including the fees and terms of the services to be performed; | |
| ● | appointing or replacing the independent auditor; | |
| ● | determining the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work; | |
| ● | establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies; and | |
| ● | approving reimbursement of expenses incurred by our management team in identifying potential target businesses. |
The Audit Committee will at all times be composed exclusively of independent directors who are “financially literate” as defined under Nasdaq’s listing standards. The Nasdaq listing standards define “financially literate” as being able to read and understand fundamental financial statements, including a company’s balance sheet, income statement and cash flow statement. In addition, we must certify to the Nasdaq Capital Market that the audit committee has, and will continue to have, at least one member who has past employment experience in finance or accounting, requisite professional certification in accounting, or other comparable experience or background that results in the individual’s financial sophistication. We have determined that each of Mr. Martin, Mr. Matthy and Ms. Meer satisfy Nasdaq’s definition of financial sophistication and Mr. Matthy and Ms. Meer each also qualifies as an “audit committee financial expert,” as defined under the rules and regulations of the SEC.
Our Board of Directors has adopted a written charter for the Audit Committee, which is available on our corporate website at www.isunenergy.com. The information on our website is not part of this Amendment.
| 3 |
Compensation Committee
The current members of our Compensation Committee are Ms. Meer and Messrs. Martin and Matthy, with Mr. Martin serving as Chair of the Compensation Committee. The Compensation Committee’s duties, which are specified in our Compensation Committee Charter, include, but are not limited to:
| ● | reviewing and approving on an annual basis the corporate goals and objectives relevant to our President and Chief Executive Officer’s compensation, evaluating our President and Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration of our President and Chief Executive Officer based on such evaluation; | |
| ● | reviewing and approving the compensation of all of our other executive officers; | |
| ● | reviewing our executive compensation policies and plans; | |
| ● | implementing and administering our incentive compensation equity-based remuneration plans; | |
| ● | reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors. |
Our Board of Directors has adopted a written charter for the Corporate Governance and Nominating Committee, which is available on our corporate website at www.isunenergy.com. The information on our website is not part of this Amendment. The charter also provides that the Compensation Committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the Compensation Committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.
Corporate Governance and Nominating Committee
Our Corporate Governance and Nominating Committee is responsible for, among other matters: (1) identifying individuals qualified to become members of our Board of Directors, consistent with criteria approved by our Board of Directors; (2) overseeing the organization of our Board of Directors to discharge the Board’s duties and responsibilities properly and efficiently; (3) identifying best practices and recommending corporate governance principles; and (4) developing and recommending to our Board of Directors a set of corporate governance guidelines and principles applicable to us.
Our Corporate Governance and Nominating Committee consists of Ms. Meer and Messrs. Matthy and Martin, with Mr. Matthy serving as Chair. Our Board of Directors has adopted a written charter for the Corporate Governance and Nominating Committee, which is available on our corporate website at www.isunenergy.com. The information on our website is not part of this Amendment.
Compensation Committee Interlocks and Insider Participation
During 2023, no officer or employee served as a member of the Company’s Compensation Committee. None of our executive officers serve as a member of the Board of Directors or Compensation Committee of any entity that has one or more executive officers serving on our Board of Directors or Compensation Committee.
Director Independence
Our Board of Directors has determined that Messrs. Martin, Matthy and Ms. Meer are “independent directors” as such term is defined in Rule 10A-3 of the Exchange Act and the Nasdaq listing standards.
| 4 |
Director Diversity
iSun is currently in compliance with all ESG-related requirements of the SEC and of Nasdaq including the Board Diversity Disclosure Matrix provided below.
| iSun, Inc. Board Diversity Matrix for 2023 | ||||||||||||||||
| Total Number of Directors : 5 | ||||||||||||||||
| Female | Male | Non-Binary | Did Not
Disclose Gender | |||||||||||||
| Part 1: Gender Identity | ||||||||||||||||
| Directors | 1 | 4 | 0 | 0 | ||||||||||||
| Part 2: Demographic Background | ||||||||||||||||
| African American or Black | 0 | 0 | 0 | 0 | ||||||||||||
| Alaskan Native or Native American | 0 | 0 | 0 | 0 | ||||||||||||
| Asian | 0 | 0 | 0 | 0 | ||||||||||||
| Hispanic or Latin | 0 | 0 | 0 | 0 | ||||||||||||
| Native Hawaiian or Pacific Islander | 0 | 0 | 0 | 0 | ||||||||||||
| White | 1 | 4 | 0 | 0 | ||||||||||||
| Two or more Races/Ethnicities | 0 | 0 | 0 | 0 | ||||||||||||
| LGBTQ+ | 0 | 0 | 0 | 0 | ||||||||||||
| Did Not Disclose Demographic Background | 0 | 0 | 0 | 0 | ||||||||||||
| iSun, Inc. Board Diversity Matrix for 2024 | ||||||||||||||||
| Total Number of Directors : 5 | ||||||||||||||||
| Female | Male | Non-Binary | Did Not Disclose Gender | |||||||||||||
| Part 1: Gender Identity | ||||||||||||||||
| Directors | 1 | 4 | 0 | 0 | ||||||||||||
| Part 2: Demographic Background | ||||||||||||||||
| African American or Black | 0 | 0 | 0 | 0 | ||||||||||||
| Alaskan Native or Native American | 0 | 0 | 0 | 0 | ||||||||||||
| Asian | 0 | 0 | 0 | 0 | ||||||||||||
| Hispanic or Latin | 0 | 0 | 0 | 0 | ||||||||||||
| Native Hawaiian or Pacific Islander | 0 | 0 | 0 | 0 | ||||||||||||
| White | 1 | 4 | 0 | 0 | ||||||||||||
| Two or more Races/Ethnicities | 0 | 0 | 0 | 0 | ||||||||||||
| LGBTQ+ | 0 | 0 | 0 | 0 | ||||||||||||
| Did Not Disclose Demographic Background | 0 | 0 | 0 | 0 | ||||||||||||
| ITEM 11. | EXECUTIVE COMPENSATION |
Compensation Discussion and Analysis
The following Compensation Discussion and Analysis describes the material elements of compensation for our executive officers identified in the Summary Compensation Table (“Named Executive Officers”), and executive officers that we may hire in the future. As more fully described above, the Compensation Committee is responsible for recommendations relating to compensation of the Company’s directors and executive officers.
Compensation Program Objectives and Rewards
Our compensation philosophy is based on the premise of attracting, retaining, and motivating exceptional leaders, setting high goals, working toward the common objectives of meeting the expectations of customers and stockholders, and rewarding outstanding performance. Following this philosophy, in determining executive compensation, we consider all relevant factors, such as the competition for talent, our desire to link pay with performance in the future, the use of equity to align executive interests with those of our Stockholders, individual contributions, teamwork and performance, and each executive’s total compensation package. We strive to accomplish these objectives by compensating all executives with total compensation packages consisting of a combination of competitive base salary and incentive compensation.
| 5 |
The primary purpose of the compensation and benefits described below is to attract, retain, and motivate highly talented individuals who will engage in the behaviors necessary to enable us to succeed in our mission while upholding our values in a highly competitive marketplace. Different elements are designed to engender different behaviors, and the actual incentive amounts, which may be awarded to each Named Executive Officer are subject to the annual review of the Board of Directors. The following is a brief description of the key elements of our planned executive compensation structure.
| ● | Base salary and benefits are designed to attract and retain employees over time. | |
| ● | Incentive compensation awards are designed to focus employees on the business objectives for a particular year. | |
| ● | Equity incentive awards, such as stock options and non-vested stock, focus executives’ efforts on the behaviors within the recipients’ control that they believe are designed to ensure our long-term success as reflected in increases to our stock prices over a period of several years, growth in our profitability and other elements. | |
| ● | Severance and change in control plans are designed to facilitate a company’s ability to attract and retain executives as we compete for talented employees in a marketplace where such protections are commonly offered. We currently have not given separation benefits to any of our Named Executive Officers. |
Benchmarking
The company has not yet adopted benchmarking but may do so in the future. When making compensation decisions, our Board of Directors may compare each element of compensation paid to our Named Executive Officers against a report showing comparable compensation metrics from a group that includes both publicly-traded and privately-held companies. Our Board believes that while such peer group benchmarks are a point of reference for measurement, they are not necessarily a determining factor in setting executive compensation as each executive officer’s compensation relative to the benchmark varies based on scope of responsibility and time in the position. We have not yet formally established our peer group for this purpose.
The Elements of iSun’s Compensation Program
Base Salary
Executive officer base salaries are based on job responsibilities and individual contribution. The Board reviews the base salaries of our executive officers, including our Named Executive Officers, considering factors such as corporate progress toward achieving objectives (without reference to any specific performance-related targets) and individual performance experience and expertise. Additional factors reviewed by the Board of Directors in determining appropriate base salary levels and raises include subjective factors related to corporate and individual performance. For the year ended December 31, 2023, the Board of Directors approved all executive officer base salary decisions.
Our Board of Directors determines base salaries for the Named Executive Officers annually, and the Board, upon recommendation of the Compensation Committee proposes new base salary amounts, if appropriate, based on its evaluation of individual performance and expected future contributions.
Pay Versus Performance Table
The Company has opted to comply with the less restrictive mandates regarding a “pay versus performance” table under Item 402(v) of Regulation S-K because the Company is an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act of 1933, and therefore exempt from providing such a table for 2023.
Summary Compensation Table
The following table sets forth information regarding the compensation awarded to or earned by the executive officers listed below during the years ended December 31, 2023 and 2022. As an emerging growth company, we have opted to comply with the reduced executive compensation disclosure rules applicable to “smaller reporting companies,” as such term is defined in the rules promulgated under the Securities Act, which require compensation disclosure for only our principal executive officer and the two most highly compensated executive officers other than our principal executive officer. Throughout this Amendment, these officers are referred to as our “named executive officers.”
| 6 |
2022 & 2023 SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) | Total ($) | |||||||||||||||||||||
| Jeffrey Peck Chief | 2023 | $ | 595,010 | 267,500 | 82,400 | - | - | $ | 944,910 | |||||||||||||||||||
| Executive Officer, President and Chairman | 2022 | $ | 548,085 | $ | 15,000 | $ | 252,000 | — | $ | — | $ | 815,085 | ||||||||||||||||
| Frederick Myrick | 2023 | $ | 400,000 | $ | $ | - | $ | 400,000 | ||||||||||||||||||||
| Executive Vice President of Solar | 2022 | $ | 428,245 | $ | - | $ | 63,000 | — | $ | — | $ | 491,245 | ||||||||||||||||
| John Sullivan | 2023 | $ | 325,000 | $ | 152,500 | $ | 41,200 | $ | 518,700 | |||||||||||||||||||
| Former Chief Financial Officer | 2022 | $ | 319,629 | $ | 15,000 | $ | 624,707 | — | $ | — | $ | 959,336 | ||||||||||||||||
Nonqualified Deferred Compensation
We did not sponsor any nonqualified defined contribution plans or other nonqualified deferred compensation plans during the years ended December 31, 2023 and 2022. Similarly, we did not sponsor any nonqualified defined contribution plans or other nonqualified deferred compensation plans during the years ended December 31, 2023 and 2022. Our management or the Company’s Compensation Committee may elect to provide our executive officers and other employees with nonqualified defined contribution or other nonqualified deferred compensation benefits in the future if we determine that doing so is in our best interests.
Outstanding Equity Awards as of December 31, 2023
The following options or other awards were issued to our Named Executive Officers under the Plan or were outstanding as of December 31, 2023.
| December 31, 2023 | ||||||||
Number of Options | Weighted average exercise price | |||||||
| Outstanding, beginning January 1, 2023 | 576,334 | $ | 3.80 | |||||
| Granted | 410,000 | $ | 1.03 | |||||
| Exercised | - | $ | - | |||||
| Forfeited | 98,250 | - | ||||||
| Outstanding, ending December 31, 2023 | 888,084 | $ | 2.94 | |||||
| Exercisable at December 31, 2023 | 605,249 | $ | 2.84 | |||||
| 7 |
Executive Employment Agreements and Arrangements
Messrs. Peck, Sullivan, the Company’s former Chief Financial Officer, and Myrick are parties to Employment Agreements and Change of Control Agreements with the Company. Mr. Sullivan was not employed by the Company as of the date of the filing of this Form 10-K/A. Material terms of the Employment Agreements are as follows:
| Name | Date of Agreement | Title | Term | Compensation | ||||
| Jeffrey Peck | 7/1/21 | Chief Executive Officer | 7/1/21 – 7/1/26 | Base Salary $450,000 / year, subject to increase in Board discretion, plus incentive and deferred compensation programs available, plus benefits | ||||
| Frederick Myrick | 7/1/21 | Executive Vice
President of Solar |
7/1/21 – 7/1/26 | Base Salary $400,000 / year, subject to increase in CEO discretion, plus incentive and deferred compensation programs available, plus benefits | ||||
| John Sullivan | 7/1/21 | Former Chief Financial Officer | 7/1/21 – 7/1/26 | Base Salary $250,000 / year, subject to increase in CEO discretion, plus incentive and deferred compensation programs available, plus benefits |
The Change of Control Agreements with Messrs. Peck and Myrick each provide for the following benefits upon termination of employment under certain circumstances upon a change of control: payment of accrued base salary, payment of the value of any unused paid time off and reimbursable expenses, payment of any accrued cash incentive bonus, a lump sum severance payment, permitted continuation of health benefits under COBRA, and immediate vesting and the right to exercise all equity based awards that were otherwise unvested as of the termination date, as well as the immediate lapse of any Company rights to repurchase any equity awards as of such date. Mr. Sullivan’s Change of Control Agreement with the Company is no longer in effect.
Equity Incentive Plans
The iSun 2020 Equity Incentive Plan (the “Plan”) was adopted on February 25, 2021 and approved by the shareholders of the Company at a Special Meeting of the Company’s shareholders on the same date. A total of 1,000,000 shares of Common Stock were initially available for Awards under the Plan. At a Special Meeting of the Stockholders on December 17, 2021, the Company’s stockholders approved an amendment to the Plan that increased the number of shares allocated to the Plan from 1,000,000 shares to 3,000,000 shares.
Disclosure of Erroneously Awarded Compensation
The Company has not made any accounting restatements requiring disclosure pursuant to Item 402(w) of Regulation S-K.
| 8 |
| ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
The percentage ownership information shown in the table below is based upon 47,384,672 shares of Common Stock outstanding as of March 31, 2024.
| Name and Address of Beneficial Owner(1) | Shares of Common Stock | Percentage Owned | ||||||
| 5% or greater stockholders | ||||||||
| None | - | - | ||||||
| Directors and Executive Officers | ||||||||
| Jeffrey Peck | 1,577,056 | (2-4) | 3.33 | % | ||||
| Rob Vanderbeek | 0 | 0 | % | |||||
| Frederick Myrick | 733,778 | (5) | 1.55 | % | ||||
| Andrew Matthy | 118,427 | 0.25 | % | |||||
| Stewart Martin | 132,427 | 0.28 | % | |||||
| Claudia Meer | 115,427 | 0.24 | % | |||||
| All officers and directors as a group (6 persons) | 2,677,115 | 5.65 | % | |||||
| (1) | Unless otherwise indicated, the business address of each of the stockholders is 400 Avenue D, Suite 10, Williston, VT 05495. |
| (2) | Pursuant to a Voting Agreement dated June 20, 2019 between Mr. Peck and certain individuals (the “Key Holders”), Mr. Peck has sole voting power over the shares held by each of the Key Holders listed in this Footnote 2,90,660 shares held by Corundum AB, and 1,263,318 shares held by Veroma, LLC. |
| (3) | Pursuant to an Irrevocable Proxy dated January 19, 2021. between Mr. Peck and Sassoon M. Peress, Mr. Peck has sole voting power over the 491,500 shares held by Sassoon M. Peress, 2,000 shares held by Dan Cohen, 3,000 shares held by Emma Peress, and 1,500 shares held by Shoshanna Zimmerman. |
| (4) | Pursuant to an Irrevocable Proxy dated October 31, 2021 between Mr. Peck and John Comeau, Mr. Peck has sole voting power over the 29,749 shares held by John Comeau. |
| (5) | These shares are held by The Mykilore Trust of which Mr. Myrick is a trustee. |
| 9 |
| ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
Director Independence
Our Board of Directors presently consists of five members. Our Board of Directors has determined that each of Mr. Martin, Mr. Matthy, and Ms. Meer are “independent,” as defined by SEC rules adopted pursuant to the requirements of the Sarbanes-Oxley Act of 2002 and as determined in accordance with Rule 4200(a) (15) of the Marketplace Rules of the Nasdaq Stock Market, Inc.
In 2014, the minority stockholders of Peck Electric Co., who sold the building that the Company formerly occupied, lent the proceeds to the majority stockholders of Peck Electric Co. who contributed $400,000 of the net proceeds as paid in capital. At December 31, 2022 and December 31, 2021, the amounts owed were $0 and $21,000, respectively.
In May 2018, stockholders of the Company bought out a minority stockholder of Peck Electric Co. The Company advanced $250,000 for the stock purchase which is included in the “due from stockholders”. At December 31, 2022 and December 31, 2021, the amounts due were $0 and $39,000, respectively.
In 2019, the Company’s majority stockholders lent proceeds to the Company to help with cash flow needs. At December 31, 2022 and December 31, 2021, the amounts owed were $0 and $60,000, respectively.
Communications with the Board of Directors on Corporate Governance and Related Matters
Stockholders and other parties may communicate directly with the Board or any relevant director by addressing communications to:
| iSun, Inc. | |
| 400 Avenue D, Suite 10 | |
| Williston, VT 05495 |
All stockholder correspondence will be compiled and forwarded as appropriate.
| 10 |
| ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES |
Principal Accounting Fees and Services
Audit Fees
The following table sets forth information regarding fees for services rendered by Marcum LLP related to the fiscal years ended December 31, 2023 and 2022:
| Types of Fees | Fees for 2023 | Fees for 2022 | ||||||
| Audit Fees (1) | $ | 285,328 | $ | 376,850 | ||||
| Audit Related Fees | $ | - | $ | - | ||||
| Tax Fees | $ | - | $ | - | ||||
| All Other Fees | $ | - | $ | - | ||||
| Total Fees | $ | 285,328 | $ | 376,850 | ||||
| (1) | Audit fees for the audit of the consolidated financial statements for the years ended December 31, 2023 and 2022, review of the financial statements in the Company’s Form 10-Q for the years ended December 31, 2023 and 2022 and other fees for service that only our independent registered public accounting firm can perform such as consents and assistance with review of documents filed with the SEC. |
Pre-Approval Policies and Procedures of Audit and Non-Audit Services of Independent Registered Public Accounting Firm
The Audit Committee’s policy is to pre-approve, typically at the beginning of our fiscal year, all audit and non-audit services, other than de minimis non-audit services, to be provided by an independent registered public accounting firm. These services may include, among others, audit services, audit-related services, tax services and other services and such services are generally subject to a specific budget. The independent registered public accounting firm and management are required to periodically report to the full Board of Directors regarding the extent of services provided by the independent registered public accounting firm in accordance with this pre-approval, and the fees for the services performed to date. As part of the Board’s review, the Board will evaluate other known potential engagements of the independent auditor, including the scope of work proposed to be performed and the proposed fees, and approve or reject each service, taking into account whether the services are permissible under applicable law and the possible impact of each non-audit service on the independent auditor’s independence from management. At Audit Committee meetings throughout the year, the auditor and management may present subsequent services for approval. Typically, these would be services such as due diligence for an acquisition, that would not have been known at the beginning of the year.
The Audit Committee has considered the provision of non-audit services provided by our independent registered public accounting firm to be compatible with maintaining their independence. The audit committee will continue to approve all audit and permissible non-audit services provided by our independent registered public accounting firm.
A representative of Marcum LLP is expected to attend virtually at the 2024 Annual Meeting and will have an opportunity to make a statement if he or she desires to do so. It is also expected that such representative will be available to respond to appropriate questions.
PART IV
| ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
See accompanying Index to Exhibits.
| 11 |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
| iSUN, INC. | ||||
| By: | /s/ Jeffrey Peck | Chief Executive Officer | April 29, 2024 | |
| Jeffrey Peck | (Principal Executive Officer) | |||
| 12 |
INDEX TO EXHIBITS
| Number | Description | |
| 31.1 | * | Certification of Principal Executive Officer |
| 31.2 | * | Certification of Principal Financial Officer |
| * | Filed herewith |
| 13 |