SUNation Energy, Inc.
For the period ended Jun 30, 2026. Filed Aug 12, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 12, 2026
SUNE$2.05+2.5%Stored close · as of Nov 6, 2026
What changed in Risk Factors?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-15.
0000022701-26-000007
Item 1A. Risk FactorsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-12.
0000022701-26-000010
Item 1A. Risk FactorsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 13 previous paragraphs and 53 current paragraphs.
6 unchanged; 7 reworded; 40 added; 0 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 0 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (40)
Current report
Risks Relating to the Consummation of the Proposed Suniva Merger and such transactions related thereto
Current report
Failure to complete the proposed Suniva Merger and such transactions related thereto could negatively impact the Company.
Current report
If the Merger and such other transactions related thereto are not completed for any reason, there may be various adverse consequences, and the Company may experience negative reactions from the financial markets, as well as from its investors, customers and employees. For example, the Company’s business may have been adversely impacted by the failure to pursue other beneficial opportunities due to management’s focus on the proposed Merger and such other transactions related thereto, without realizing any of the anticipated benefits of completing the proposed Merger and such other transactions related thereto. Additionally, the market price of the Company’s Common Stock could decline to the extent that current market prices reflect a market assumption that the proposed Merger and such other transactions related thereto will be completed. The Company could also be subject to litigation related to the failure to consummate the proposed Merger and such other transactions related thereto or to proceedings commenced against the Company to perform its obligations pursuant to the Merger Agreement.
Current report
Additionally, the Company has incurred and may continue to incur substantial expenses in connection with the negotiation and completion of the transactions contemplated by the Merger Agreement, as well as the costs and expenses of preparing, filing, printing, and mailing any necessary joint proxy statement/prospectus, and all filing and other fees paid in connection with the proposed Merger and such other transactions related thereto. If the proposed Merger and such other transactions related thereto are not consummated, the Company would have paid these expenses without realizing the expected benefits of the proposed Merger and such other transactions related thereto.
Current report
The Company may not be able to satisfy the requirements for the Closing under the Merger Agreement, which may cause material adverse consequences due to the consequent failure to complete the proposed Merger and such other transactions related thereto.
Current report
Consummation of the proposed Merger is subject to certain closing conditions, including, among other things, (a) approval by the Company’s stockholders of the matters being put to their vote, (b) approval by the requisite Suniva stockholders of the adoption and approval of the Merger Agreement and the transactions contemplated thereby, (c) Nasdaq’s approval of the listing of the shares of the Company’s common stock to be issued in connection with the Merger, (d) the effectiveness of the Registration Statement, and (e) the Company’s net cash not being less than negative $1,500,000. Each party’s obligation to consummate the Merger is also subject to other specified customary conditions, including regarding the accuracy of the representations and warranties of the other party, subject to the applicable materiality standard, and the performance in all material respects by the other party of its obligations under the Merger Agreement required to be performed on or prior to the date of the closing of the proposed Merger.
Current report
The Merger Agreement also contains customary termination rights of each of the Company and Suniva. Upon termination of the Merger Agreement under specified circumstances, the Company may be required to pay Suniva a termination fee of $1,000,000, and Suniva may be required to pay the Company a termination fee of $1,000,000. The Merger Agreement may be terminated if the proposed Merger has not been consummated on or before January 30, 2027, subject to a potential sixty (60)-day extension in certain circumstances, as set forth in the Merger Agreement.
Current report
The failure to meet the material conditions requisite to the closing of the proposed Merger may prevent the consummation of the Merger, and the consequent negative effects of such failure to meet these conditions and successfully close the transaction related thereto.
Current report
Failure to obtain the Stockholder Approval could result in significant disruption of business operations.
Current report
If the Company does not obtain the necessary stockholder approval for the proposals related to the proposed Merger as set forth in the Merger Agreement or as otherwise related thereto, then the Company will be required to unwind the proposed Merger transactions. Any such unwinding of the proposed Merger transactions may have significant and adverse effects on the Company’s business operations and could result in the loss of key assets and personnel, the threat of litigation over disagreements between the parties on how to implement the unwinding, and many or all of the negative consequences discussed throughout this document that would apply to the Company if it is unable to successfully consummate the proposed Merger and the transactions contemplated thereunder or that may apply regardless of whether the Company is able to successfully consummate the proposed Merger and the transactions contemplated thereby. The inability to secure the requisite stockholder approval could also undermine investor confidence, which may further negatively influence the Company’s stock price and market reputation.
Current report
The Company and Suniva will incur substantial costs related to the proposed Merger and integration of their businesses.
Current report
The Company and Suniva have incurred and expect to incur a number of non-recurring costs in furtherance of the consummation of the proposed Merger and transactions related thereto, including legal, financial advisory, accounting, consulting, and other advisory fees; regulatory filing fees; financial printing and other transaction-related costs. Some of these costs are payable by either the Company or Suniva whether the proposed Merger or the transactions related thereto are completed or not. Additionally, the integration costs following the proposed Merger’s completion may be substantial, and may include expenses related to facilities and systems consolidation, employment-related obligations, and efforts to maintain employee morale and retain key personnel. These costs may stem from the complex integration of numerous processes, policies, operations, technologies, and systems across areas such as purchasing, accounting, finance, payroll, compliance, treasury and vendor management, risk management, business operations, pricing, and employee benefits.
Current report
While the Company and Suniva estimate a certain level of integration costs, many factors beyond their control could increase the total amount and timing of these expenses. Additionally, many of these costs are inherently difficult to estimate with precision. As a result, assuming that the proposed Merger and related transactions are consummated, the combined company may need to take charges against earnings following the Merger’s consummation, and the amount and timing of such charges are uncertain. There can be no assurance that the transaction and integration costs will not outweigh any benefits of the consummation of the proposed Merger and related transactions, assuming that they occur.
Current report
The Company and Suniva may fail to realize the anticipated benefits of the proposed Merger and any related transactions.
Current report
Assuming that the consummation of the proposed Merger occurs, the result will be the combination of companies of significantly differing sizes, geographic bases, and operations. The success of the proposed Merger will depend, in part, on the ability to realize the anticipated benefits from integrating the businesses of the Company and Suniva. To achieve these benefits, the Company and Suniva must effectively merge and align their operations in a manner that permits the realization of those benefits and cost savings without adversely affecting current revenues and future growth. If the Company and Suniva do not successfully integrate their operations, the anticipated benefits of the consummation of the
Current report
Merger may not be realized fully or at all, or they may take longer to realize than expected. In addition, the actual cost savings achieved could be less than anticipated, and integration may result in additional or unforeseen expenses. An inability to realize the full extent of the anticipated benefits, or any delays in integrating the businesses, could adversely affect the revenues, expense levels, and operating results of the combined company, which may negatively impact the value of the Company’s common stock.
Current report
It is also possible that combining the two businesses could result in the disruption of ongoing operations or inconsistencies in standards, controls, procedures, and policies that adversely affect the ability to maintain relationships with customers, clients, and employees, or to achieve the anticipated benefits and cost savings of the proposed Merger. Moreover, integration efforts may divert management’s attention and resources, further impacting the combined company’s performance both during and after the integration period.
Current report
Furthermore, the board of directors and executive leadership of the combined company will consist of individuals from Suniva or at its section, which could require reconciling differing priorities and philosophies from those anticipated or which the Company’s employees, key personnel or shareholders are accustomed to. Any difficulties in effectively unifying these teams may also delay or prevent realization of the anticipated benefits of the Merger and any related transactions.
Current report
The Proposed Merger transaction is subject to review, clearance and approval of both the Securities and Exchange Commission, as well as the Nasdaq Stock Market.
Current report
The completion of the Company’s proposed Merger transaction with Suniva is subject to the receipt of necessary consents, clearance, and/or review by the SEC and approval of our application for listing on the Nasdaq Stock Market. We cannot assure you that the SEC will timely clear the Company’s filings, including the Registration statement on Form S-4 relating to the Merger, or at all, including the financial statements related thereto and incorporated therein, or that Nasdaq will approve our listing application on a timely basis, or at all.
Current report
Upon the Consummation of the proposed Merger, existing holders of the Company’s Common Stock will experience substantial dilution of their ownership interest in the Company, which could materially reduce or be perceived to reduce the value of their Company shareholdings.
Current report
Assuming that the proposed Merger closing occurs, the Company will issue the shares of its Common Stock at the Exchange Ratio, which involves a) each then-outstanding share of Suniva capital stock (including shares of Suniva common stock and shares of Suniva preferred stock) will be converted into the right to receive a number of shares of the Company’s common stock calculated in accordance with the Merger Agreement; (b) each then-outstanding Suniva warrant will be cancelled at the Effective Time, with each warrantholder entitled to receive for each warrant share a number of shares of the Company’s common stock equal to the Exchange Ratio, the per share exercise price of the warrant; and (c) each then-outstanding Suniva restricted stock unit will be fully vested and converted into shares of the Company’s common stock at the Exchange Ratio.
Current report
Under the Exchange Ratio in the Merger Agreement, upon the closing of the proposed Merger, on a pro forma basis and based upon the number of shares of the Company’s common stock expected to be issued in the proposed Merger, pre-Merger Suniva stockholders are expected to own approximately 98.2% of the combined company and pre-Merger SUNation stockholders are expected to own approximately 1.8% of the combined company. Therefore, the Exchange Ratio is anticipated to result in an immediate and substantial increase in the number of outstanding shares of Company Common Stock, and substantial dilution of existing Company stockholders’ ownership of and voting power in the Company. As such, existing Company stockholders should assume that their ownership stake and influence will be severely reduced upon the closing of the proposed Merger based on the Exchange Ratio.
Current report
Additionally, if the Company successfully registers the resale of the Company Common Stock issuable pursuant to any existing restricted shares or such future financing involving registration rights or pursuant to an exemption from registration and satisfaction of applicable holding periods related thereto, a substantial number of additional shares may become freely tradable. The presence of these newly registered or tradeable shares, as wel as the perception that they may be sold, could create an “overhang” in the market. Specifically, if the trading volume of the Company’s common stock cannot absorb the sales of these newly registered or tradeable shares, the price per share may decline.
Current report
The future results of the combined company following the consummation of the proposed Merger and such related transactions may suffer if it cannot effectively manage its expanded operations, and the potential need to obtain sufficient capital for the expansion of the combined company’s operations.
Current report
Assuming that the consummation of the proposed Merger and such related transactions occur, the size of the combined company’s business is expected to be significantly greater than the current size of the Company’s existing business. The combined company’s future success will depend, in part, on its ability to manage these expanded operations, which may pose challenges for management, including challenges related to oversight of new operations and the associated increase in capital financing needs, expenditures and complexity. The combined company may also face heightened scrutiny from governmental and regulatory authorities as a result of its larger scale. However, there can be no assurance that the combined company will be successful or that it will realize the operating efficiencies, revenue enhancements, or other benefits currently anticipated from the consummation of the Merger and such related transactions.
Current report
The combined company may be unable to retain the Company’s and/or Suniva’s personnel after the consummation of the proposed Merger and such related transactions.
Current report
Assuming that the consummation of the proposed Merger and such related transactions occurs, their eventual success will depend in-part on the combined company’s ability to retain the talents and dedication of key employees currently employed by the Company and Suniva. It is possible that these employees may decide not to remain with the Company or Suniva, as applicable, while the proposed Merger and such related transactions are pending or with the combined company after the propsosed Merger and such related transactions are consummated. If the Company and Suniva are unable to retain key employees, including management, who are critical to the successful integration and future operations of the respective companies, the lines of business conducted by the Company and Suniva prior to the consummation of the proposed Merger and such related transactions could face disruptions in their operations, loss of existing customers, loss of key information, expertise, or know-how, and unanticipated recruitment costs. In addition, if key employees terminate their employment following the consummation of the proposed Merger and such related transactions, the combined company’s business activities may be adversely affected, and management’s attention may be diverted from successfully hiring suitable replacements, all of which may cause the combined company’s business to suffer. The combined company may be unable to locate or retain suitable replacements for any key employees who leave either company.
Current report
The anticipated pro formas of the combined consolidated financial information of the Company and Suniva is preliminary and the actual consideration to be issued in the proposed Merger and such related transactions, as well as the actual financial condition and results of operations of the combined company after the proposed Merger, may differ materially.
Current report
The anticipated pro formas of the combined consolidated financial information of the Company and Suniva are currently preliminary and indicative and may not necessarily and ultimately prove to be what the combined company’s actual financial conditions or results of operations will be in the future. The pro forma combined consolidated financial information will reflect potential adjustments, which are based upon preliminary estimates. Among other things, the actual value of the consideration that the Company receives upon the consummation of the proposed Merger, assuming that it occurs, may vary significantly from the value used in preparing the unaudited pro forma combined consolidated financial information provided in tandem with these risk factors and the SEC filings of which they form a part. Accordingly, the final acquisition accounting adjustments may differ materially from the pro formas and any adjustments which may be reflected in the pro formas combined consolidated financial information.
Current report
Suniva’s directors, executive officers and principal stockholders will have substantial control over the Company after the consummation of the proposed Merger, which could limit other stockholders’ ability to influence the outcome of corporate matters and key transactions, including a change of control.
Current report
Upon (and assuming) the consummation of the proposed Merger, the Company’s executive officers, directors and principal stockholders and their affiliates will own less than 1% of the outstanding shares of the Company Common Stock, after giving effect to the Exchange Ratio related to the proposed Merger, with the Company’s existing stockholders owning approximately 1.8% of the outstanding shares of the Company common stock. This significant concentration of ownership may have a negative impact on the trading price of the Company’s common stock because investors often perceive disadvantages in owning stock in companies with controlling stockholders. In addition, these stockholders will be able to exercise a significant level of control over all matters requiring stockholder approval, including the election of directors and the approval of mergers, acquisitions or other extraordinary transactions. They may also have interests that differ from other stockholders of the Company and may vote in a way with which other stockholders of the Company disagree, and which may be adverse to the Company’s interests. This concentration of ownership may have the effect of delaying, preventing or deterring a change of control of the Company, could deprive the Company’s stockholders of an opportunity to receive a premium for their common stock as part of a sale of the Company and might ultimately affect the market price of the Company Common Stock.
Current report
The Company will be subject to business uncertainties and contractual restrictions while the proposed Merger and related transactions are pending.
Current report
Uncertainty about the success of consummation and the effect of consummation of the proposed Merger and such related transactions on employees and customers may have an adverse effect on the Company and Suniva. These uncertainties may impair the Company’s or Suniva’s ability to attract, retain, and motivate key personnel until the proposed Merger and such related transactions are completed, and could cause suppliers, business partners, and other parties that deal with the Company or Suniva to seek to change existing business relationships with the Company or Suniva. In addition, subject to certain exceptions, the Company and Suniva have each agreed to operate their businesses in the ordinary course in all material respects and to refrain from taking certain actions that may adversely affect their ability to consummate the proposed Merger and such related transactions on a timely basis without the consent of the other party. These restrictions may prevent the Company and Suniva from pursuing attractive business opportunities that may arise prior to the completion of the proposed Merger and such related transactions. If any of the aforementioned risks were to materialize, they could lead to significant costs which may negatively impact each party’s results of operations and financial condition if the parties are not successful in consummating the proposed Merger and such related transactions, and which may also cause material adverse effects on the Company if the Merger and such related transactions are not consummated.
Current report
The market price of the Company Common Stock may be affected by factors different from those currently affecting the shares of the Company Common Stock assuming the consummation of the proposed Merger and such related transactions.
Current report
The Company’s business differs from that of Suniva, and certain adjustments will be made to the Company’s operations assuming that the consummation of the proposed Merger and such related transactions occur. Accordingly, the results of operations of the combined company and the market price of the Company’s common stock after the assumed consummation of the proposed Merger and such related transactions may be affected by factors different from those currently affecting the independent results of operations of the Company.
Current report
The Company’s stockholders will not have appraisal rights or dissenters’ rights in the Merger.
Current report
Under Section 262 of the Delaware General Corporation Law, the Company’s stockholders will not be entitled to appraisal rights in connection with the Merger. If the Merger is completed, the Company’s stockholders will not receive any consideration, and their shares of the Company Common Stock will remain outstanding and will constitute shares of the Company following the completion of the Merger. Accordingly, the Company’s stockholders are not entitled to any appraisal rights in connection with the Merger.
Current report
The absence of appraisal or dissenters’ rights poses several risks to the stockholders of the Company with respect to the Merger. Specifically, stockholders dissatisfied with the terms of the Merger cannot seek a judicial determination of fair value for their shares, limiting their ability to contest valuation. Without these rights, minority stockholders have fewer legal tools to challenge transactions they perceive as unfair, reducing their recourse in potentially inequitable situations. Additionally, stockholders unable to exercise appraisal or dissenters’ rights may be forced to sell their shares on the open market, exposing them to potential losses due to market fluctuations.
Current report
On June 7, 2026, the Company entered into a securities purchase agreement (“SPA”) with certain institutional and accredited investors for the purchase and sale of an aggregate of 2,390,000 in shares of common stock of the Company, par value $0.05 per share (the “PIPE Shares”), for gross proceeds of $2,700,700, which PIPE Shares were priced at market at $1.13 per share, based on the closing price of the Company’s Common Stock on the Nasdaq Capital Market on June 5, 2026. There are no warrants related to this issuance, and no price adjustment features related to the PIPE Shares. The PIPE Shares have not been registered under the Securities Act of 1933 and were offered pursuant to exemption from registration. Concurrently with the entry into the SPA, the Company entered into a Registration Rights Agreement (“RRA”) with the PIPE investors for the registration for resale of the PIPE Shares pursuant to a registration statement. A copy of the SPA and RRA are included as exhibits to the Company’s Form 8-K, dated June 8, 2026, and referenced in the exhibit index to this quarterly report on Form 10-Q.
Reworded paragraphs (7)
Previous wording
There have beenno material changes in the risk factors disclosed in our Form 10-K filed with the SEC on March 23, 2026, other than as set forth below.
Current wording
There have beenno material changes in the risk factors disclosed in our Form 10-K filed with the SEC on March 23, 2026, other than as set forth in our quarterly report on Form 10-Q filed on May 15, 2026, and as otherwise set forth below.
Previous wording
On April 9, 2026, the Company announced that its Board of Directors has authorized the review of a full range of strategic alternatives aimed at increasing shareholder value and best positioning the Company for long-term success, and in connection therewith, the Company has engaged Maxim Group, LLC to serve as its M&A and financial advisor to assist in this strategic process. The review will consider a broad spectrum of possible actions, including, but not limited to, a potential sale of the Company, strategic merger or other business combinations, acquisitions, divestitures of assets, further optimization of the corporate structure, or other strategic or financial transactions that could enhance shareholder value and further optimize capital resources. Additionally, we have in the past and continue to periodically receive inquiries related to a range of strategic transactions and strategic alternatives, ranging from offers to acquire assets to grow our existing business to expansions to diversify our business and more. Strategic alternatives, if consummated, could take the form of mergers, acquisitions, partnerships, joint ventures, licensing arrangements or other strategic transactions.
Current wording
On April 9, 2026, the Company announced that its Board of Directors, including with the approval of its Transaction Committee, had authorized the review of a full range of strategic alternatives aimed at increasing shareholder value and best positioning the Company for long-term success, and in connection therewith, the Company had engaged Maxim Group, LLC to serve as its M&A and financial advisor to assist in this strategic process. The review considered a broad spectrum of possible actions, including, but not limited to, a potential sale of the Company, strategic merger or other business combinations, acquisitions, divestitures of assets, further optimization of the corporate structure, or other strategic or financial transactions that could enhance shareholder value and further optimize capital resources. Additionally, we have in the past and continue to periodically receive inquiries related to a range of strategic transactions and strategic alternatives, ranging from offers to acquire assets to grow our existing business to expansions to diversify our business and more. Strategic alternatives, if consummated, could take the form of mergers, acquisitions, partnerships, joint ventures, licensing arrangements or other strategic transactions.
Previous wording
We expect to continue to devote substantial time, as well as substantial human and capital resources, to exploring legitimate strategic options that we believe may increase shareholder value. There can be no assurance that any of these proposals will result in a successful consummation, if pursued, or that they will be completed on attractive terms or at all. Additionally, there can be no assurances that any particular course of action, business arrangement or transaction, or series of transactions, will lead to increased shareholder value or that it will ultimately result in a successful expansion or diversified business.
Current wording
We expect to continue to devote substantial time, as well as substantial human and capital resources, as we have in this regard to both the prior exploration of legitimate strategic options as well as with regard to our recently announced proposed Merger with Suniva Inc. -- in each case with the goal to increase shareholder value. There can be no assurance that the proposed Suniva Merger will result in a successful consummation, or such other strategic transaction if pursued in the alternative, or that such transaction(s) will be completed on attractive terms or at all. Additionally, there can be no assurances that any particular course of action, business arrangement or transaction, or series of transactions, will lead to increased shareholder value or that it will ultimately result in a successful expansion or diversified business.
Previous wording
The process of evaluating these strategic options may be very costly, including such as legal and accounting fees, expenses and other related charges that would otherwise be committed to operations. In addition, any strategic business combination or other transactions that we may consummate in the future could have a variety of negative consequences and we may implement a course of action or consummate a transaction that yields unexpected results that adversely affect our business and decreases the remaining cash available for use in our business.
Current wording
The process of evaluating these strategic options is very costly, including legal, financial advisor and accounting fees, expenses and other related charges that would otherwise be committed to operations. In addition, any strategic business combination or other transactions that we may consummate in the future could have a variety of negative consequences and we may implement a course of action or consummate a transaction that yields unexpected results that adversely affect our business and decreases the remaining cash available for use in our business.
Previous wording
If we are not successful in identifying a successful strategic alternative, expansion or diversification or if our plans are not executed in a timely fashion, this may cause reputational harm with our shareholders and the value of our common stock shares may be materially adversely impacted. In addition, speculation regarding any developments related to the review of strategic alternatives and/or perceived uncertainties related to the future of our business could cause our share price to fluctuate significantly or result in the total loss of your investment.
Current wording
If we are not successful in consummating a successful strategic alternative, expansion or diversification or if our plans are not executed in a timely fashion, this may cause reputational harm with our shareholders and the value of our common stock shares may be materially adversely impacted. In addition, speculation regarding any developments related to the review, execution and changes to the material terms of the proposed Suniva Merger, or of a an alternative strategic transaction and/or perceived uncertainties related to the future of our business could cause our share price to fluctuate significantly or result in the total loss of your investment.
Previous wording
We continually review our operations with a view toward reducing our cost structure, including, but not limited to, reducing our labor cost-to-revenue ratio, improving process and system efficiencies and increasing our revenues and operating margins. During the 2026, we have reduced headcount and related personnel costs as we adjust to the reduction in residential solar installation demand following the January 1, 2026 effective date of the loss of certain federal residential tax credits. Despite these efforts, we have needed and may continue to need to adjust our business strategies to meet these changes, or we may otherwise find it necessary to restructure our operations or particular businesses or assets. When these changes or events occur, we may incur costs to change our business strategy and may need to write down the value of assets or sell certain assets. Additionally, we may seek to strategically roll up entities that we believe will be revenue accretive, and/or consider strategic transactions that may significantly alter our principal business focus or expand or diversify our business, in each case, such strategic transaction may result in a need to execute a financing, including potentially significant dilutive financings. Any of these events our costs may increase, and we may have significant charges or losses associated with the write-down or divestiture of assets and our business may be materially and adversely affected.
Current wording
We continually review our operations with a view toward reducing our cost structure, including, but not limited to, reducing our labor cost-to-revenue ratio, improving process and system efficiencies and increasing our revenues and operating margins. During the 2026, we have reduced headcount and related personnel costs as we adjust to the reduction in residential solar installation demand following the January 1, 2026 effective date of the loss of certain federal residential tax credits. Despite these efforts, we have needed and may continue to need to adjust our business strategies to meet these changes, or we may otherwise find it necessary to restructure our operations or particular businesses or assets. When these changes or as certain events occur, we may incur costs to change our business strategy and may need to write down the value of assets or sell certain assets. Additionally, we may seek to consider strategic changes to our business that may significantly alter our principal business focus or expand or diversify our business, in each case, such strategic transaction or changes, as the case may be, may result in a need to execute additional financing(s), including potentially significant dilutive financings. Any of these events may increase our operating costs, reduce revenue or have other detrimental effects, and we may have significant charges or losses associated with the write-down or divestiture of assets and our business may be materially and adversely affected.
Previous wording
Not applicable during the reporting period. However, as discussed in Note 14, Subsequent Events, on April 14, 2026 the Board of Directors approved issuance of $1.2 million in restricted shares of the Company’s common stock related to the conversion of a portion of the Company’s Long-Term Note, pursuant to which (1) Mr. Scott Maskin was issued 554,712 shares of restricted common stock and (2) Mr. James Brennan was issued 123,254 shares of restricted common stock, each issuance at a price of $1.77 per share (a premium to both the stock price and 5-day average on April 13, 2026). In addition, such shares issued under the debt conversion agreement, are subject to a 6-month lock-up agreement, which is in addition to their other affiliate/control person restrictions.
Current wording
On April 14, 2026 the Board of Directors approved issuance of $1.2 million in restricted shares of the Company’s common stock related to the conversion of a portion of the Company’s Long-Term Note, pursuant to which (1) Mr. Scott Maskin was issued 554,712 shares of restricted common stock and (2) Mr. James Brennan was issued 123,254 shares of restricted common stock, each issuance at a price of $1.77 per share (a premium to both the stock price and 5-day prior closing average on April 13, 2026). In addition, such shares issued under the debt conversion agreement, are subject to a 6-month lock-up agreement, which is in addition to their other affiliate/control person restrictions.