Company: SUNE
Filing Date: 2025-02-27
Form Type: 8-K
Source: 0001213900-25-017658
Chunk: 3

Company: SUNation Energy, Inc.
Filing Date: 2025-02-27
Form: 8-K
Item: Item 7.01
Chunk 3
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 common stock, to date, with each and all such issuances at the market value (with no anti-dilution or
price reset features), and to reserve an additional aggregate of approximately five hundred thousand shares of common stock for any subsequent
issuances related thereto (which share total may change as it is subject to the market price at the time of such issuance, but also subject
to applicable Nasdaq marketplace rules). The common stock share issuance(s) described herein are collectively intended to serve as a complete
form of a penalty payment in exchange for and in order to settle and release any and all such individual contractual disputes and potential
future claims and costs, as well as the time burden on management that would be involved in connection with a potential legal dispute
in the absence of such contractual settlement, and in order to preserve cash for working capital and other necessary items. None of the
Series A Warrants or Series A Preferred Stock shares remain outstanding as of the date of this current report.

Legal Proceedings

We are involved in various claims, many arising
in the ordinary course of business, including some which we believe are immaterial or which we believe to be frivolous, including actions
with respect to contractual matters. In connection with these matters, we assess, on a regular basis, the probability and range of possible
loss based on the developments in these matters. Recently, an action by a landlord to recover approximately $34,000 plus attorneys’
fees and punitive damages based upon an alleged breach of the lease between Remington Industrial Management LLC and Sunation Solar Systems,
Inc. The landlord asserts that Sunation Solar Systems, Inc. has the obligation to insure the entire building rather than keep in full
force and effect “fire and hazard insurance for the full replacement value of all improvements located on the demised premise”
as specifically provided in the lease rider. Sunation Solar Systems denies that it has an obligation to insure the entire building under
the express terms of the lease which is not a “triple net lease.” The landlord has asserted three causes of action for breach
of contract, declaratory judgment that the lease requires Sunation to insure the building itself, and a third vague “fraud”
theory. The claims against SUNation Energy, Inc. based upon vague allegations of fraud are likely unsustainable. The claims are baseless
and frivolous and defendants intend to vigorously defend them.

From time to time, we also face threatened legal
actions or claims in the ordinary course of our business. One such matter