Company: SUNE
Filing Date: 2025-02-27
Form Type: 8-K
Source: 0001213900-25-017658
Chunk: 2

Company: SUNation Energy, Inc.
Filing Date: 2025-02-27
Form: 8-K
Item: Item 7.01
Chunk 2
---
 to the
PIPE Investors for thirty-two million dollars in cash (the “ Amendment”). Concurrent with the Amendment, the Company entered
into warrant agreements with the PIPE Investors to purchase Common Stock, whereby the Company issued approximately five-year warrants
(“ PIPE Warrants”) to purchase Common Stock for cash or in a cashless exercise. These Series A Preferred Stock and PIPE Warrants
were issued on March 28, 2022 upon the consummation of the merger between CSI and Pineapple.

The Series A Warrants contained anti-dilution
provisions that would increase the number of shares issuable upon exercise and lower the exercise price of the Series A Warrants if the
Company issued equity securities at a price less than the then current exercise price of the Series A Warrants at the time of such issuance.
Numerous Series A Warrants were exercised and, as a result, most and eventually all of our then authorized shares were issued as a result.
Beginning on or about May 29, 2024 through June 5, 2024, the Company had received additional warrant exercise notices; however, as a result
of the anti-dilution provisions of the then outstanding Series A Warrants and the prior exercises thereunder, the Company did not have
sufficient shares authorized to issue all of such warrant shares thereunder in a timely manner. Upon receiving shareholder approval in
July 2024, however, our authorized share capital was increased, and we immediately proceeded to satisfy the issuance of these remaining
shares of common stock. As further disclosed in our previously filed SEC reports and the risk factors therein, including an accrual for
then estimated loss contingencies related thereto (including for the payment of up to fifty thousand dollars in cash), while we had ultimately
satisfied our share delivery obligations to the then outstanding Series A Warrant holders, the Series A Warrants contained certain contractual
clauses, including potential financial penalty provisions for late delivery of shares. Recently, a limited number of alleged penalty claims
were informally (not through a legal proceeding or threatened legal action) brought to the Company’s attention and assessed in regard
to the potential contractual provisions at issue. Following our internal analysis and other discussions, it was concluded that there were
only three holders of such contractual rights under the previously outstanding Series A Warrants. Therefore, it was determined to be in
the best interest of the Company to issue (subject to beneficial ownership limitations), an aggregate of four-hundred seven thousand,
six hundred fifty-six shares of