Communications Systems, Inc. Announces Amendment To Merger Agreement With Pineapple Energy LLC

Author: Benzinga Newsdesk | December 20, 2021 09:23am

Communications Systems, Inc. (NASDAQ:JCS) ("CSI" or the "Company") announced today that on December 16, 2021, the Company entered an amendment (Amendment") to the definitive merger agreement ("Merger Agreement") dated March 1, 2021, between the Company and privately held Pineapple Energy, LLC ("Pineapple"), a growing U.S. operator and consolidator of residential solar, battery storage, and grid services solutions.

Under the Amendment, among other things, CSI and Pineapple agreed:

to extend the Merger Agreement Outside Date from August 31, 2021 to March 31, 2022;

to add additional conditions to closing of the Merger Agreement, including that (i) there arebinding agreements for at least $32.0 million in cash from the Equity Offering (as defined in the Merger Agreement) payable to CSI immediately following the effective time of the merger; (ii) other than as set forth in the Amendment, there will be no accrued payable amounts or liabilities on the balance sheet of Pineapple to specific related parties or affiliates of Pineapple; (iii) Hercules Capital, Inc. will have waived Pineapple's obligation to pay upon consummation of the merger $3.0 million of debt under a prior agreement and extended the maturity date of this debt to the earlier of (a) December 10, 2024 or (b) the date on which CSI or Pineapple receives equity financing in one more transactions in an amount in excess of $25.0 million (other than pursuant to the PIPE Agreement); and (iv) the entire amounts owed by Pineapple under a working capital loan will have been extinguished or the maturity date extended to at least December 10, 2024;

to change the Milestone under which CSI will be obligated to issue the 3.0 million shares of its common stock as Earnout Consideration to provide that if the new closing conditions are met, CSI will be obligated to issue these 3.0 million shares;

to extend the time for CSI to complete the Dispositions from 18 months to 24 months from the closing date; and

to extend the time under which CSI will be obligated to issue up to 10.0 million shares of its common stock for achievement of other Milestones from on or before the 18-month anniversary to on or before the 24-month anniversary of the closing date.

Posted In: JCS