Press Release

Ballard Spahr Represents Communications Systems, Inc. in Transformative Transactions

April 5, 2022

Ballard Spahr represented Communications Systems, Inc., in a series of strategic transformative transactions over the course of 2021 and 2022, including the company’s March 28, 2022 acquisition by merger of Pineapple Energy LLC. In connection with the merger transaction, the company changed its name to Pineapple Holdings, Inc. and continued trading on the Nasdaq system under the new symbol “PEGY” as of March 29, 2022. As a result of the merger, the company now operates a portfolio of brands including Hawaii Energy Connection, E-Gear, Sungevity, and Horizon Solar Power that provide homeowners with an end-to-end product offering spanning solar, battery storage, and grid services.

The transaction required approval by two-thirds of the outstanding shares of the company, which the company obtained on March 25, 2022. In connection with the transaction, to retain its Nasdaq listing, the company effected a 1-for-4 reverse stock split on March 18, 2022. Immediately following the merger, on March 28, 2022, the company also completed a previously announced private placement of Series A preferred stock and warrants to institutional investors, resulting in gross proceeds to the company of $32 million. Additionally, on March 25, 2022, the company’s legacy shareholders received non-transferable contingent value right (CVRs) that will entitle them to receive future distribution proceeds from the sale of company pre-merger assets.

Ballard Spahr also represented the company in the August 2021 sale of its Electronics & Software (E&S) Segment to Lantronix, and with several other acquisitions and dispositions over the past several years. On October 15, 2022, the company paid its shareholders a special dividend of approximately $34 million from the net proceeds from the E&S sale transaction and other available cash resources.

The company has been based in Minnesota since 1969. The Pineapple merger transaction, $32 million private placement transaction, CVR distribution, E&S sale transaction, and special dividend are the result of the company’s March 2018 announcement that it had begun a process to explore strategic alternatives.

Business and Transactions Partner Barbara Lano Rummel, co-leader of Ballard Spahr’s Mergers and Acquisitions Group, led the team that handled these transactions and was assisted by Associate Stephen J. Stark. The client team also included securities and capital markets Partner April Hamlin, Partner Peter Jaslow, Partner Gerald J. Guarcini, Senior Counsel Thomas G. Lovett, and Associate David B. Gross.

For further information, please visit Pineapple Holdings, Inc.’s press release.

For media inquiries, please contact Will Ashenmacher at 612.371.5792.

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