Pineapple Energy (PEGY) - 2025 Q2 - Quarterly Results

Sales Agreement Overview Details the agreement between SUNation Energy, Inc. and Needham & Company, LLC for an "at-the-market" common stock offering 1. Issuance and Sale of Shares Outlines the terms for SUNation Energy to sell up to $30,000,000 of common stock through an ATM offering via Needham & Company ATM Offering Details | Item | Detail | | :--- | :--- | | Company | SUNation Energy, Inc. | | Sales Agent | Needham & Company, LLC | | Agreement Date | August 18, 2025 | | Security | Common Stock, par value $0.05 per share | | Aggregate Offering Amount | Up to $30,000,000 | - The issuance and sale of shares are contingent upon several limitations, collectively referred to as the "Maximum Amount", including the amount registered on the effective Registration Statement, the number of authorized but unissued shares, and limits under Form S-3[2] - The offering will be conducted pursuant to the Company's Registration Statement on Form S-3 (File No. 333-267066), which was declared effective by the SEC on April 29, 2025[2][3] 2. Placements Describes the process for the Company to initiate share sales by sending a Placement Notice to the Sales Agent - To initiate a sale, the Company must deliver a Placement Notice to the Sales Agent specifying the terms of the desired sale, including volume, timing, and minimum price[5] - The Sales Agent is not obligated to proceed with any Placement and may decline the terms of a Placement Notice in its sole discretion[5] - The compensation for the Sales Agent is determined according to Schedule 2 of the agreement[5] 3. Sale of Placement Shares by the Sales Agent Specifies the Sales Agent's commitment to use commercially reasonable efforts for "at the market" share sales - The Sales Agent will use commercially reasonable efforts consistent with its normal trading practices to sell the Placement Shares[6] - Sales methods are those permitted for an "at the market offering" under Rule 415(a)(4), including sales on the Nasdaq Capital Market or in negotiated transactions[6] - The Sales Agent is not obligated to purchase shares as a principal and bears no liability for not selling shares, other than for a failure to use commercially reasonable efforts[6] 4. Suspension of Sales Allows either party to suspend sales, mandating cessation when the Company holds material non-public information - Both the Company and the Sales Agent have the right to suspend sales by giving notice to the other party[7] - Sales are prohibited, and the Company must not request sales, during any period in which the Company is in possession of material non-public information[8] 5. Settlement and Delivery Details the T+1 settlement process for share sales, including net proceeds calculation and electronic delivery - Settlement for sales typically occurs on the first trading day following the trade date[9] - Net Proceeds are calculated as the aggregate gross sales price less the Sales Agent's commission and any transaction fees[9] - The Company is obligated to deliver the Placement Shares electronically via its transfer agent on the Settlement Date. Failure to do so will result in the Company holding the Sales Agent harmless for any resulting losses[10] 6. Representations and Warranties of the Company The Company provides assurances regarding its SEC filings, corporate status, financial health, and legal compliance SEC Filings and Compliance The Company warrants its SEC filings, Form S-3 eligibility, and the absence of material misstatements or stop orders - The Company confirms its eligibility to use Form S-3 and that the Registration Statement for the offering has been declared effective by the SEC[13] - It is warranted that the Registration Statement and Prospectus comply with SEC rules and do not contain any untrue statements of a material fact or omit material facts[13][14] - The Company represents that no stop order suspending the effectiveness of the Registration Statement has been issued or is being threatened by the SEC[13] Corporate Structure and Capitalization The Company assures its corporate standing, validly issued shares, and compliance with public float requirements - The Company and its subsidiaries are duly organized, validly existing, and in good standing in their respective jurisdictions[21] - The Placement Shares have been duly authorized and, upon issuance and payment, will be validly issued, fully paid, and nonassessable[22] - The Company meets the public float requirement of at least $75 million for the use of Form S-3, as calculated within 60 days of its most recent annual report filing[23] Financial Matters and Disclosures The Company warrants its financial statements conform to GAAP, auditors are independent, and no Material Adverse Effect has occurred - The financial statements incorporated by reference in the Registration Statement and Prospectus fairly present the Company's financial condition in accordance with GAAP[25] - The Company's auditors, CBIZ LLC and UHY LLP, are independent registered public accounting firms as required by the Act and PCAOB[25] - There has been no Material Adverse Effect or Material Adverse Change in the Company's business, financial condition, or prospects since the date of the latest financial information provided in the Prospectus[27] Legal and Operational Compliance The Company represents compliance across litigation, intellectual property, tax, environmental, anti-corruption, and SOX - The Company is not involved in any pending or threatened litigation that would reasonably be expected to have a Material Adverse Effect[30] - The Company and its subsidiaries own or have adequate rights to all Intellectual Property necessary to conduct their business[40] - The Company is in compliance with the Sarbanes-Oxley Act, and its principal officers have made all required certifications under Sections 302 and 906[46] - The Company maintains effective internal controls over financial reporting and disclosure controls and procedures[48][49] - The Company represents that it is not a party to any other "at the market" or continuous equity transaction agreement[59] 7. Agreements of the Company The Company commits to ongoing filing, reporting, financial covenants, and due diligence support for the Sales Agent Filing and Reporting Obligations The Company agrees to maintain registration effectiveness, file amendments, and notify the Sales Agent of SEC communications - The Company will promptly notify the Sales Agent of any SEC requests for amendments, the issuance of any stop order, or any other significant communication from the Commission[64] - If any event occurs that requires an amendment or supplement to the Prospectus to ensure it is not misleading, the Company will promptly prepare and file such amendment and suspend sales until it is effective[67] - The Company agrees to file a prospectus supplement with the SEC detailing the number of shares sold, net proceeds, and compensation, which may be satisfied by inclusion in its periodic Form 10-K or 10-Q reports[82] Financial Covenants and Expenses The Company commits to paying all offering expenses and using proceeds as disclosed, with caps on Sales Agent reimbursement Expense Reimbursement Caps for Sales Agent | Expense Category | Reimbursement Cap | | :--- | :--- | | Establishment of ATM Program | $100,000 | | Each Periodic Update of ATM Program | $7,500 | - The Company will use the net proceeds from the offering in the manner described under the "Use of Proceeds" section of the Prospectus[76] Due Diligence and Certification The Company agrees to provide ongoing officer certificates, legal opinions, and comfort letters on Representation Dates - The Company must provide an officer's certificate reaffirming its representations and warranties on each "Representation Date," which includes the filing of annual (10-K) and quarterly (10-Q) reports[83] - Within five trading days of each Representation Date, the Company must cause its counsel to furnish a legal opinion and negative assurance letter to the Sales Agent[84] - Similarly, within five trading days of each Representation Date, the Company must cause its independent accountants to furnish a "Comfort Letter" to the Sales Agent[85] 8. Conditions of the Obligations of the Sales Agent Outlines prerequisites for the Sales Agent's obligation to sell shares, including effective registration and accurate company warranties - The Registration Statement must be effective, and no stop order from the SEC can be pending or threatened[89][90] - The Company's representations and warranties must remain true and correct, and it must have performed all its covenants under the agreement[95] - The Sales Agent must have received all required deliverables, including the officer's certificate (Section 7(s)), legal opinions (Section 7(t)), and accountant's Comfort Letter (Section 7(u))[96][97][98] - There must not have been any Material Adverse Effect or Material Adverse Change in the Company's business or a suspension of trading of its stock on the Exchange[93][101] 9. Indemnification and Contribution Details mutual indemnification provisions, with the Company providing broad coverage and the Sales Agent limited to its furnished information - The Company provides broad indemnification to the Sales Agent against losses from material misstatements or omissions in the offering documents[106] - The Sales Agent's indemnification to the Company is limited to losses arising from information furnished in writing by the Sales Agent specifically for use in the offering documents[107] - The agreement includes contribution provisions, which allocate liability based on relative benefits and fault if direct indemnification is unavailable[110] 10. Reimbursement of Certain Expenses The Company agrees to quarterly reimbursement of the Sales Agent's reasonable legal and other defense expenses - The Company agrees to reimburse the Sales Agent quarterly for reasonable legal and other expenses incurred in defending claims related to the offering[114] 11. Termination Specifies conditions for agreement termination by either party, including immediate termination for adverse events or 10-day notice - The Sales Agent can terminate the agreement immediately for causes such as a Material Adverse Effect, trading suspension, or a general banking moratorium[115] - Both the Company and the Sales Agent can terminate the agreement in their sole discretion with 10 days' prior notice[116][117] - Obligations related to expenses (Section 7(i)), indemnification (Section 9), and reimbursement (Section 10) survive the termination of the agreement[118] 12. No Fiduciary Relationship Clarifies that the Sales Agent acts solely as an agent in an arm's-length transaction, without fiduciary duties - The agreement is defined as an arm's-length commercial transaction, and the Sales Agent is not acting as a fiduciary or advisor to the Company[120] 13. Miscellaneous Covers standard legal clauses, including New York governing law, jury trial waiver, and the agreement constituting the entire understanding - The agreement is governed by the laws of the State of New York[126] - Both parties waive their right to a trial by jury in any claim arising from the agreement[131] - The agreement constitutes the entire understanding between the parties and supersedes all prior agreements[125] Schedules and Forms Provides templates and specific details for operational aspects of the sales agreement, including notices and compensation Schedule 1: Form of Placement Notice Template for the Company to instruct the Sales Agent on share sales, specifying volume, price, and period Schedule 2: Compensation Details the Sales Agent's compensation, set at 3% of the aggregate gross proceeds from share sales Sales Agent Compensation | Metric | Rate | | :--- | :--- | | Commission Rate | 3% of aggregate gross proceeds | Schedule 3: Notice Parties Lists authorized contacts for official communications between the Company and the Sales Agent Schedule 4: Permitted Free Writing Prospectus States that no Permitted Free Writing Prospectuses are associated with this offering - No Permitted Free Writing Prospectuses are listed for this offering[150] Form of Representation Date Certificate Template for the officer's certificate reaffirming company representations and warranties on Representation Dates