Pineapple Energy Closes Debt Financing with Decathlon Capital Partners
June 01 2023 - 4:15PM
Pineapple Energy Inc. (NASDAQ: PEGY) (the “Company” or
“Pineapple”), a leading provider of solar power, battery storage
systems, and smart energy control to households and small
businesses, today announced the closing of a $7.5 million debt deal
with Decathlon Capital Partners, the country’s largest
revenue-based funding investor.
The transaction, which carries a 48-month term, is a straight
debt instrument, thus avoiding any equity dilution. Debt service
payments begin at a smaller initial level and increase over the
course of the loan in several step-ups, tracking the Company’s
revenue growth. Along with Decathlon’s collaborative approach and
covenant-light terms, these features make this an ideal funding
instrument for Pineapple at this stage of the company’s life.Funds
will be utilized as follows:
- $5.0 million to retire the short-term note issued in connection
with the SUNation acquisition
- $1.5 million to retire other debt
- $1.0 million remaining for working capital as needed
Pineapple Chief Financial Officer Eric Ingvaldson commented,
“After careful consideration of all available financing options,
the terms negotiated with Decathlon were the most favorable for the
PEGY shareholders. We took advantage of our ability to issue
senior-secured debt to retire certain obligations and to refinance
other obligations over a 4-year term. Most importantly, we resolved
short-term liquidity concerns resulting from the SUNation
acquisition and related short-term note due in August. SUNation is
now fully a part of Pineapple, and we are acting with urgency to
fully integrate the business and realize synergies on both the
revenue and expense sides. This funding round wouldn’t have been
possible without our relentless focus on execution and operational
excellence, as demonstrated by our achieving positive cash flow
from operations in Q1. We will continue to run the businesses
aggressively and with financial discipline.”
Pineapple Chief Executive Officer Kyle Udseth added, “This is a
huge milestone for Pineapple, and I want to say ‘thank you’ to our
new financing partners at Decathlon and to our employees for all
their hard work in getting this across the finish line. With this
debt funding round, we can move the company forward without taking
equity dilution, which has been a primary focus of ours with
residential solar valuations so irrationally low. We’ll keep our
eye on the ball of helping homeowners go solar, driving top-line
revenue growth and bottom-line profitability, and we’re confident
that high-quality and sustainable companies that strive to deliver
a great customer experience will be rewarded over time. We believe
this funding round validates our strategy and our leadership team’s
ability to execute, and we appreciate the confidence that Decathlon
has shown in us here.”
About Pineapple Energy
Pineapple is focused on growing leading local and regional
solar, storage, and energy services companies nationwide. Our
vision is to power the energy transition through grass-roots growth
of solar electricity paired with battery storage. Our portfolio of
brands (SUNation, Hawaii Energy Connection, E-Gear, Sungevity, and
Horizon Solar Power) provide homeowners and small businesses with
an end-to-end product offering spanning solar, battery storage, and
grid services.
Forward Looking Statements
This press release includes certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995, including statements regarding future financial
performance, future growth or growth opportunities, future
opportunities, future flexibility to pursue acquisitions, future
cash flows, and the expected financial impact of, and results
following, the SUNation acquisition. These statements are based on
the Company’s current expectations or beliefs and are subject to
uncertainty and changes in circumstances. Actual results may vary
materially from those expressed or implied by the statements here
due to changes in economic, business, competitive or regulatory
factors, and other risks and uncertainties, including those set
forth in the Company’s filings with the Securities and Exchange
Commission. The forward-looking statements in this press release
speak only as of the date of this press release. The Company does
not undertake any obligation to update or revise these
forward-looking statements for any reason, except as required by
law.
Contacts:
Pineapple EnergyKyle UdsethChief Executive Officer+1 (952)
996-1674Kyle.Udseth@pineappleenergy.com
Eric IngvaldsonChief Financial Officer+1 (952)
582-6417Eric.Ingvaldson@pineappleenergy.com
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