Pineapple Energy Announces Lease Termination for Former Minnesota Headquarters - Move Expected to Produce Total Savings of Approximately $480,000
Pineapple Energy Inc. (NASDAQ: PEGY), a leading sustainable solar energy and backup power provider, has terminated the operating lease for its former corporate office in Minnetonka, Minnesota. This strategic move is expected to generate total savings of approximately $480,000. The lease, originally set to expire in 2027, was costing the company about $17,500 per month or $210,000 annually in rent.
While there is a one-time buyout fee associated with the termination, Pineapple Energy will spread this payment over the next 14 months. Interim CEO Scott Maskin stated that this decision aligns with the company's ongoing cost reduction initiatives and efforts to centralize operations in their primary markets of Long Island, NY and Hawaii. Maskin emphasized that this move is part of their strategy to align cost structure and deliver long-term value to shareholders.
- Expected total savings of approximately $480,000 from lease termination
- Monthly rent savings of $17,500 or $210,000 annually
- Alignment with ongoing cost reduction initiatives
- Centralization of operations in primary markets (Long Island, NY and Hawaii)
- One-time buyout fee associated with lease termination
Insights
The termination of Pineapple Energy's lease in Minnesota represents a significant cost-saving measure, aligning with the company's broader strategy to streamline operations and improve financial efficiency. The expected savings of
This move demonstrates management's commitment to cost reduction and operational centralization, which could potentially improve PEGY's bottom line. The
For a small-cap company like PEGY, this level of cost savings could be material to its financial performance. The decision to consolidate operations in Long Island, NY and Hawaii suggests a strategic focus on key markets, which may lead to improved operational efficiency and potentially better market penetration in these areas.
Pineapple Energy's lease termination in Minnetonka, Minnesota, is a strategic real estate move that reflects current market trends and corporate priorities. By exiting a long-term lease commitment early, the company is demonstrating agility in its real estate strategy, which is important in today's dynamic business environment.
The decision to centralize operations in Long Island, NY and Hawaii indicates a shift towards markets that likely offer better growth opportunities or operational synergies for PEGY's solar energy business. This geographic consolidation could lead to improved team collaboration and reduced overhead costs associated with maintaining multiple corporate locations.
The negotiated early termination, despite involving a buyout fee, shows prudent financial management. Spreading the fee over 14 months helps mitigate immediate cash flow impact while still realizing long-term savings. This approach to lease management could set a positive precedent for future real estate decisions, potentially leading to a more optimized and cost-effective property portfolio for PEGY.
RONKONKOMA, N.Y., Oct. 17, 2024 (GLOBE NEWSWIRE) -- Pineapple Energy Inc. (the “Company”) (NASDAQ: PEGY), a leading provider of sustainable solar energy and backup power to households, businesses, municipalities, and for servicing existing systems, announced today that it has terminated the operating lease for its former corporate office in Minnetonka, Minnesota.
The termination of the lease, which was set to expire in 2027, is expected to save the Company approximately
Taking into account the remaining years on the now terminated lease, other related costs, and the effect of the buyout fee, total savings are estimated at approximately
“The termination of this lease is another positive step in our ongoing cost reduction initiatives and reflects our efforts to centralize the Company’s operations in our current primary markets of Long Island, NY and Hawaii,” said Scott Maskin, Interim Chief Executive Officer. “We are authoring a new future for the Company, an important part of which is properly aligning our cost structure to help us deliver long-term value to our shareholders.”
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) provide homeowners and businesses of all sizes 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. These statements are based on the Company’s current expectations or beliefs and are subject to uncertainty and changes in circumstances, including the Company’s expectations regarding its ability to effect the reverse stock split and regain compliance with Nasdaq’s continued listing standards. While the Company believes its plans, intentions, and expectations reflected in those forward-looking statements are reasonable, these plans, intentions, or expectations may not be achieved. For information about the factors that could cause such differences, please refer to the Company’s filings with the Securities and Exchange Commission, including, without limitation, the statements made under the heading “Risk Factors” in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 and in subsequent filings. The Company does not undertake any obligation to update or revise these forward-looking statements for any reason, except as required by law.
Safe Harbor Statement
Our prospects here at Pineapple Energy Inc. are subject to uncertainties and risks. This news release (video statement) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. The Company intends that such forward-looking statements be subject to the safe harbor provided by the foregoing Sections. These forward-looking statements are based largely on the expectations or forecasts of future events, can be affected by inaccurate assumptions, and are subject to various business risks and known and unknown uncertainties, a number of which are beyond the control of management. Therefore, actual results could differ materially from the forward-looking statements contained in this presentation. The Company cannot predict or determine after the fact what factors would cause actual results to differ materially from those indicated by the forward-looking statements or other statements. The reader should consider statements that include the words "believes", "expects", "anticipates", "intends", "estimates", "plans", "projects", "should", or other expressions that are predictions of or indicate future events or trends, to be uncertain and forward-looking. We caution readers not to place undue reliance upon any such forward-looking statements. The Company does not undertake to publicly update or revise forward-looking statements, whether because of new information, future events or otherwise. Additional information respecting factors that could materially affect the Company and its operations are contained in the Company's filings with the SEC which can be found on the SEC's website at www.sec.gov.
Contacts:
Scott Maskin
Interim Chief Executive Officer
+1 (631) 823-7131
scott.maskin@pineappleenergy.com
Pineapple Investor Relations
+1 (952) 996-1674
IR@pineappleenergy.com
FAQ
What is the expected total savings from Pineapple Energy's lease termination?
How much monthly rent will Pineapple Energy save by terminating the Minnesota lease?
Where is Pineapple Energy (PEGY) centralizing its operations?
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