Financial Performance - Consolidated sales decreased by $6,286,871, or 31.7%, to $13,549,420 in Q2 2024 from $19,836,291 in Q2 2023[134] - Residential contract sales decreased by $2,691,079, or 18%, due to a 7% reduction in residential kilowatts installed and a decrease in average price per system[134] - Commercial contract sales decreased by $3,268,061, or 87%, due to delays in the start of commercial pipeline projects[134] - Consolidated gross profit decreased to $4,792,354 in Q2 2024 from $7,136,934 in Q2 2023, with a gross margin of 35%[135] - Consolidated operating expenses decreased to $6,818,298 in Q2 2024 from $8,552,254 in Q2 2023, with selling, general and administrative expenses down by 18%[136] - Consolidated operating loss from continuing operations was $2,025,944 in Q2 2024 compared to $1,415,320 in Q2 2023[137] - Net loss from continuing operations attributable to shareholders was $6,934,015, or $(1.11) per diluted share, in Q2 2024[137] - Consolidated sales decreased by $15,133,099, or 36.1%, to $26,768,617 in the first six months of 2024 from $41,901,716 in the same period of 2023[138] - Residential contract sales decreased by $9,434,879, or 28%, due to a 19% reduction in residential kilowatts installed[138] - Consolidated gross profit decreased to $9,597,802 in the first six months of 2024 compared to $15,143,250 in the same period of 2023, with a gross margin remaining flat at 36%[139] - Consolidated operating expenses decreased to $13,806,700 in the first six months of 2024 from $18,708,095 in the same period of 2023, a reduction of $4,901,395, or 26.2%[140] - Consolidated operating loss from continuing operations was $4,208,898 in the first six months of 2024, compared to a loss of $3,564,845 in the same period of 2023[141] - Net loss from continuing operations attributable to shareholders was $17,054,003, or $(3.83) per diluted share, in the first six months of 2024, compared to a net loss of $2,933,481, or $(4.43) per diluted share, in the same period of 2023[141] Working Capital and Cash Flow - As of June 30, 2024, the company had a working capital deficit of $(11,600,420), compared to $(6,594,834) at December 31, 2023[144] - Cash used in operating activities was $3,425,726 in the first six months of 2024, compared to $1,660,982 in the same period of 2023[144] - The company requires additional funding and seeks to raise capital through public or private equity offerings, debt financings, and/or strategic alliances[149] Internal Controls and Compliance - The Company concluded that its internal control over financial reporting was not effective as of December 31, 2023, due to material weaknesses identified[156] - Material weaknesses were attributed to limited accounting and finance resources, leading to inappropriate preparation and maintenance of critical documentation[157] - A remediation plan is being formalized, which includes implementing a new Enterprise Resource Planning (ERP) system to enhance internal controls[158] - The design and implementation of the remediation efforts are ongoing and will require validation and testing over a sustained period[158] - There were no changes in internal control over financial reporting during the three months ended June 30, 2024, that materially affected the controls[160] - The Company plans to continue performing additional analyses to ensure consolidated financial statements are prepared in accordance with U.S. GAAP until weaknesses are remediated[158] - Inherent limitations in control systems mean that not all control issues or instances of fraud can be detected[159] Nasdaq Compliance - The Company received a notice from Nasdaq on October 27, 2023, regarding non-compliance with the minimum closing bid price requirement, as the stock price was below $1.00 for 31 consecutive business days[162] - The Company has until April 24, 2024, to regain compliance with the Nasdaq Minimum Bid Rule[162] - The failure to maintain compliance with Nasdaq's listing requirements could negatively impact the market price of the common stock and the Company's liquidity[161] Strategic Focus - The company is focused on acquiring, integrating, and growing leading local and regional solar, storage, and energy services companies nationwide[129] - The company sold substantially all of the remaining assets of its JDL Technologies and Ecessa businesses on June 30, 2023, reporting these as discontinued operations[131] - A reverse stock split at a ratio of 1-for-15 was approved, reducing the number of shares outstanding from 108,546,773 to 7,235,731[133] CVR Liability - The CVR liability as of June 30, 2024, was estimated at $1,198,212, representing the estimated fair value of legacy CSI assets to be distributed to CVR holders[150]
Pineapple Energy (PEGY) - 2024 Q2 - Quarterly Report