SUNation Energy Inc. (SUNE) Earnings Call Transcript & Summary

Hey, good morning, everyone. Thanks so much for joining us. We're super happy here to be joined here with Scott Maskin of Pineapple Energy and now SUNE of SUNation Energy, and it's wonderful to chat with you here, Scott. It is a true pleasure to have you on the line and be able to reconnect here about all sorts of things going on in your world. Obviously, residential solar has been dynamic and never failed to deliver in novel storylines. So Scott, you have seen a lot of change at your company here. And so let me just take a quick second to let you introduce your company. And then over the course of this little conversation, we'll take comments and questions back from the audience here, principally on the form of chat, Bloomberg chat and e-mail, but also at the end, we'll have time for folks on the line here as well. But with that said, Scott, let me turn it over to you because we really got to take a step back, walk through some of the recent history and explain how we got here with SUNation Energy.

Yes. First of all, Julie, thanks for jumping on with me. I know that Pineapple is a small piece of the big picture, but I appreciate the effort that you put in with Pineapple over the years. And I think you'll be -- Jefferies will be covering us in the next year if all goes according to plan. So I appreciate that. And also to all the shareholders, the analysts, the employees, everybody that's on today. I hope this is meaningful. When we get to the end, being mindful of time, my e-mail will come up. I make it a point to talk to every shareholder, every person, answer every question. If I can't get them all today, I can promise you, I will e-mail or call every single person that has a question and get on with them. So Pineapple Energy, like, first of all, it's been a crazy week, right, like in the -- from my standpoint. So last Monday, we were fortunate, and we'll go through the whole history of Pineapple, what -- the good, the bad, the ugly, very transparent and very raw. So we'll get it out there today. But listen, last Monday, my shareholders overwhelmingly voted to do some cool stuff. I mean we're changing the name from Pineapple to SUNation Energy. The ticker is going from PEGY to SUNE. These are all necessary things to do to kind of shed the bad juju and have a restart and a reboot. We also were able to redo our charter that we were inherited through our reverse merger way back when with a 50-year-old company. That was archaic. But it's a new day. It's a new dawn, and we redomiciled to Delaware. So it's a new day. It's a new dawn, and I'm feeling good. So shoot, man, I'm here for you. Pineapple Energy is -- Pineapple Energy, it's more than just a solar company. We believe solar, battery storage, it's essential for the future. It's not the -- it's not it, but it's a big part of it. I came out of the electrical industry, which is, "Do the most cheapest, fastest," and found solar. And it's been great for the employees, for the community. It's just been fun. 21 years ago, when we started, we didn't think it would morph into what it has. But there's a huge future happening. We already -- we have a lot of loyal customers. We're doing all the right things. And 21 years ago, we kind of saw how the roll-up strategy of strong regional EPCs was going to win. And we see it more and more every day as the nationals keep coming in, reaping the corn fields and leaving, right? So we believe that the pineapple strategy of rolling up regional players, and I'll probably morph back and forth between Pineapple and SUNation, but it's all us. It's just we're in such a transitionary phase. But we think that -- we've already started the process of the rolling up with SUNation, which I founded in 2003, Hawaiian energy connection (sic) [ Hawaii Energy Connection ], which is an insane market there. In 2022, we brought them into the family. But it's just the tip of the iceberg. The reality is we've seen national players like SolarCity, NRG, Vivint and even most recently, SunPower collected 10 stakes. So I think local companies grouped together are going to outlast them all, and I want to be leading that mission.

That's awesome, Scott. Thank you so much. Look, let's talk about maybe a little bit of the past, right? How did we get here? What happened with Pineapple? Let's talk about what happened in terms of mistakes and decisions made. And then where are we here now -- like, how do we get here if we can try to pass and move forward to, like, where we go from here. Let's just talk about how we got here, what the thought of the company was at the outset and really level setting of what just happened here more discretely in the last few [ months ].

Thanks, Julie. You'll hear me say that I feel the pain with the shareholders. Not only am I the -- oh, you remember that commercial Hair Club for Men? Well, I'm also a customer. We -- my family was impacted through the dilution of the share prices as well. So every time there's pain, I feel it also. I lost $5 million when -- on Pineapple. So when I answer these e-mails, believe me, I get it. But it's easy to point fingers at who did or didn't do what in the past. The reality is that the company was -- it was conceived on a capital stack and it discouraged future investment. The leadership was good and had a great plan. But the one thing, as you know, and this is called the solo coaster for a reason, right? This is not a static business. And I don't know if the -- I certainly know that the cash on hand and the leadership didn't understand how -- what the solo coaster is like and how turbulent it is. But for the cap stack to work when it was the inception, kind of everything had to work, right? Like every tooth, like the back of a watch, had to fall in. That's just not the reality of what we went through, certainly not in the last 2 years. The dip in the last 18 months was extreme. I don't think anybody in the industry, 21 years, has ever seen what we've gone through. But I also think that to lead a company like this, you got to have some, "boots on the ground," experience. You can't run a business like this just out of a book and a degree. But fundamentally, most solar companies are construction businesses and you surround yourself with an incredible group of people. So -- but like I said, the cap structure of Pineapple, it sort of left the company overleveraged. We weren't able to attract more money to execute on more roll-ups. And the focus was a little too short term. On top of that, again, we had some inefficiencies. We were struggling to adapt as the solar market really faced significant headwinds. And again, like I said, the last 18 months, aside from our internal problems, then the external problems were pretty wild. So being a microcap company traded without the resources to effectively execute on the roll-up strategy, well, that's kind of what led to the leadership change. I lost you on camera, Julien, but, yes.

No, no, no. I'm here. Just in terms of -- so what steps have you taken, right? So you've level set us on where we are here today, right, in terms of past tense. What steps have you taken to address the challenges? Like, what are you doing now? What's sort of different under your leadership versus past? And let's start to take a step forward here. Like, what's going to happen here, right, on the company, right? I mean, I think we talk about, like, building this company back down to the core. What's about to happen?

Yes. So that's a big deal. Certainly, I want to spend some time on what happened Tuesday with the election and give you what I think. But the short answer is, I think, that we're going to be just fine, and I'll go into those reasons later. But again, I've been in charge now for 5 months or so. And this is a big deal. It's been a team effort, though. When the Board made the leadership change, they were inheriting a really good team of people. My COO, Jim Brennan. We had a CFO change, but everybody, the business units, the general managers stayed and just keep grinding away, so. But we've made some tough necessary decisions to rip the Band-aid off and focus on the company's survival during this crazy turbulent period. First and foremost decision that we had to talk about was, well, is this company worth saving? I mean, listen, if you look at when SunPower filed for bankruptcy, they said, in print, we just couldn't make it past leadership's decisions, right? So we said -- and that's backed by Total. So we said, is this company, is this business worth saving? And honestly, that was like a 2-minute conversation because unlike a lot of smaller companies and people in the space, we have 2 incredible core business units, SUNation and Hawaii Energy Connection. They have fantastic market presence. They're well-run, loyal customer bases. They were just being suffocated, basically OpEx-ed into oblivion. So trying to cover corporate overhead and the cost of being a public company just really, really put a pound and a gut punch into those companies. And you just -- you're either going to have a massive bank roll or you don't justify to be public. So the old Pineapple had neither. In the past month, we've just taken some extraordinary steps to, not only avoid bankruptcy, but to completely reposition the company for long-term success. And when I talk to the shareholders, and a lot of them -- listen, they've been diluted and it's been painful and they've bled. But the alternative was you get nothing, right? You get 0. If we hit that button, you get 0. Now there's a really high likelihood that we can increase shareholder value over the course. But this is a marathon. This is not a race, and that's how our industry operates. We have to pivot when things are given to us. But in the last 5 months, we avoided 2 NASDAQ delistings. We converted our -- which is most important. We exited our complete cap stack. So we are a clean company with a very small piece of debt and very liquid. We paid down a lot of debt. We were left with a lot of AP, but we also -- we raised some cash, and we cleaned up a lot of the balance sheet, so. But it's been a team effort. To add to the accomplishment, we transitioned all the corporate leadership to our New York office and eliminated a massive load on the company. We have a completely new Board of Directors, which was necessary. Again, we moved to Delaware. We changed -- there's been so much that we've done in 5 months, more than what's done in 3 years with $32 million of initial investment, we've done in 5 months. But at the same time, our business units have been streamlining, relentless focus on efficiencies and what differentiates us. We've enhanced our customer service side and our product offerings. In short, we didn't just survive, we've now -- in 5 months, we've positioned SUNation to thrive in the next upturn, and that's something I'm really proud of, and we're already in the next upturn now, so that's super cool.

Yes, absolutely. Look, thank you again for those responses. Let's talk a little bit more about a forward-looking outlook, right? What is to come here, right? Let's lean into this a little bit more, right? I mean you've got a backdrop here where the company is repositioning itself. What is the strategy here, right? I think maybe that's a nice way to start talking about it a little bit of like what is next, right? You've gone through these challenges, you've reset, you've got folks in place. What's about to happen here, right? I just want to make sure -- and again, I love the format of doing this webcast because we really can talk about what is to come, right? How would you describe what the strategy is at this point? We see some of these other larger residential solar companies, their positions, the challenges they've gone through, what's the come for you guys? What are you guys going to look like?

Yes. Well, again, the last 18 months have been brutal, right? Like, I think, it started with the Silicon Valley thing, and we had to transform our business from an M1 milestone in both Hawaii and New York into not having M1 milestones, right? That's kind of where it's -- the financial industry changed. One of the reasons why I joined Pineapple in the beginning was cost of capital, procuring more equipment at better prices. And really, I wanted to build a FinCo. None of that really happened, but that's all on the table right now. I would say in the next 3 years, next 2 to 3 years, we will execute on the roll-up strategy. We are well positioned right now to attract cost-effective capital to get the next 2 LOIs, which we already -- the next 2 OLs, I'm being very careful with the [ NMPI ] because our Q is coming out today. So I certainly don't want to lead anybody to any unpromised stuff until the Q is out for sure. But in the next 2 or 3 years, we already started to see clearer skies, right? The election cycle is behind us. Likely, the major players in the industry are in deep discussion about post-election landscape, especially regarding tax credits and domestic content. As these conversations unfold, we're positioning ourselves to capitalize on the opportunities. SUNation is already a significant player, but we have a very distinct advantage. Our portfolio of companies will grow while remaining regional. We're not trying to put one label. Regional companies is the core here. They know how to deal with their state issues, their utility issues. And I know some people have tried it in the past, but they don't have 21 years of experience and they aren't run by operators like me. So probably a good segue into the political landscape, right? Let's touch what people don't want to touch. Like I said, in 21 years, we've survived and thrived through Bush, wars, Obama, Biden, Trump. We -- every -- the federal level is always interesting, but it's not the end of the industry. People, don't panic, relax. Let's see how this kind of plays out. The IRA, is it -- could it be changed? I suppose, but why would it be? We've had bipartisan support through, again, my 21 years, and we've always grown through it. I think for SUNation, specifically, the nomination of Lee Zeldin, who is literally a New Yorker that lives 20 minutes away from SUNation has been in our offices. And where you can make the argument, "Where does solar fit into the political landscape?" We create jobs. SUNation alone, without layering on HEC, SUNation alone, in 20 years, has offset a $25 million annually of ratepayer dollars that don't go to the utility and get spent in local restaurants and you know. This is exactly what Lee is about. So I think that there is some vulnerability, but I'm not too worried about it. I think that it's going to play out. I think some of the larger company -- some of the larger people are probably more vulnerable than our roll-up strategy and our individual ideas about that. I also think that everybody needs to just take a breath, right? If you look backwards for a second, the trade tariffs that Trump put in on China during his tenure, like, it added to a whole bunch of companies coming and building solar products in the United States, which never happened before. Billions and billions of dollars of manufacturing was lost to the United States. So a bunch of these guys came and started building. And then all of a sudden, Biden comes out with the Investment Recovery Act and domestic content. And those companies that actually moved over here are the ones profiting or will profit off domestic content. If not, if domestic content goes away, we'll figure it out. This industry is just -- it's so resilient. But our mission is pretty sound and pretty clear. We're going to execute by acquiring strong diversified companies in really key growth markets where utility and state policies align with our work. And we're way more vulnerable from state policy and utility policy than federal policy. We're going to do this at a very deliberate pace, maybe acquire 1 or 2 companies annually. We want to be able to integrate in the right way and throwing the dart at the right companies in the right states. And again, depending on the availability of the capital, there's still -- mergers are a possibility. There are a ton of companies out there that -- or small cap companies that are in the space struggling with PubCo costs also. I tried to do this a year ago with somebody, but maybe the right move is also to merge some of these smaller PubCos and to get to scale. There's a lot of opportunity for SUNation/Pineapple to grow. And every day, new opportunities come our way and new people reach out for us, not just companies that want to be part of the family, they're just waiting for what's going to happen. And I think that it's a great opportunity to seize up stuff. So again, in the next 2 to 3 years, I see Pineapple. We're going to be at the forefront of this resurgence. We're doubling down on commercial solar. Any of the portfolio that we bring in, they're going to be very diversified between residential, commercial and especially service. Again, these companies -- these systems in Hawaii and New York, man, some of these are aging out already. They're ready for replacement, so service is a massive opportunity. And we'll be expanding our regional footprint all over the place, but it's going to be the right companies at the right place with regional presence. These are the people that, again, they're in the communities. They contribute. They're part of it. They're trusted. Their brands are trusted. When we did the Pineapple thing, one of the things that did work out was we decided we were never going to be Pineapple all over the country. It would be SUNation by Pineapple, one energy country by Pineapple. You've got to leverage the local side. That's what nobody is doing. That's what we're going to do.

Awesome. Excellent. Hey, by the way, thank you for all this thus far. I mean, let me just pull back on one thing you said here. I mean what are you guys doing to mitigate the risk? Or how are you guys thinking about the election risk here, right? I mean there are a lot of questions out there. Are you guys doing anything differently at this point? Or again, like, I know there's a lot of -- the word is probably uncertainty more than anything tangible here, but I'm just curious, are you seeing your customers do anything? I mean you could say the customers are concerned that maybe they're accelerating orders. Are you seeing anything on that front right now just to kind of just talk to that a little bit?

Yes. I think in New York, there was a nice steady increase on the residential side. On the C&I space, we're seeing explosions. We're seeing a lot of good stuff, right? People are trying to accelerate their decisions. Maybe there is a little bit more fear. One of the other distinct advantages of SUNation and HEC is that we have a philosophy that if our trucks are rolling, we're making money, right? Like, if they're sitting, we're going broke. So we build for a lot of national developers. Our core competency is in the construction side and operations side. We know our utility. Same thing in Hawaii. So when you have a diversified portfolio of work coming in, and we're seeing it grow every day on the C&I side. We're seeing it in Hawaii. We see -- they kind of put a bullet -- I have some other colleagues. My wolfpack is also in Hawaii. And we're seeing the carnage in California. We're seeing the carnage of the NEM 3.0 thing. We're seeing the carnage in Hawaii of the Battery Bonus program. So there's always going to be challenges, right? It's how do you pivot, right? How fast can you pivot and make lemonade out of lemons that are handed to you. So I'm not too worried about -- call me naïve. I'm not too worried about the federal side of what's going to happen. I think that we -- the team here at SUNation, every day we go to work and we sell solar, we process solar, we install solar, we service solar in Hawaii and New York. And if you keep your head down, because fundamentally, what we do is good, right? It saves people money. People like it. We're done with the early adopters. These are people that are making good, strong financial decisions, and I'm not worried about the federal side. What will come down, we will deal with and the industry and the hundreds of thousands of jobs that rely on this industry are going to move forward.

Are you seeing -- I mean, forget the election for a -- I mean what are you seeing in terms of sales trends overall, right? I mean, let's talk about the business. What are you thinking about '25 here? Any sense on how to frame expectations here? I mean -- because we get so many questions we've got -- we continue to get.

My colleague from California said, it's "Survive till '25 and then thrive," right? That was the mantra through the whole industry. And that was -- that phrase is coined pre-election when nobody knew what was going to happen. It hasn't changed from our standpoint. We're a little concerned. But we see orders coming in. We see our national developers accelerating. We see a lot of capital to do this kind of stuff. I'm developing a project right now on Long Island in the second largest hub -- industrial hub in the country that has 20 million square feet of, "I just wish the utility could take everything that I could build and connect into it." So we're not overly concerned. We're ready to tackle it as it comes. And that's how we've done it for 20 years, so. I could be wrong. I haven't been wrong yet.

I mean what do you see -- or actually, do you want to talk about the business between C&I and residential super quickly here? I mean just -- because you talked about some big sites versus residential here. How do you think about the priorities there on that front?

Yes. Listen, we have separate cups, right, at Pineapple/SUNation. We have a residential cup that also spills it. Every one of the people that we serve on the residential side work somewhere. So it inherently drives opportunity in the commercial space and vice versa. Every time we finish a megawatt on a rooftop, there's 400 employees that are exposed to SUNation. I see that I see that in the next year or 2 or 3, whereas maybe a year ago, we were 80% residential, 20% C&I space. That's going to change. It's already started to change in 2024. We're probably 70-30. We're going to go to 60-40. Resi is a great stake to have. If you think about the old TV dinners, resi is the Salisbury Steak on that silver plate, right? But commercial is coming more and more into that plate. So I also see that the diversification of our company is so relevant because I can give you a list of commercial-only companies that can't handle the lumpiness of the cash flow and the delays and the studies that have to be done. And I could show you 100 residential companies that don't do any commercial or any service that when their milestone payments were done or when they're beholden to only 1 finance company, they're done, right? We've seen them all go bankrupt. So that is one of the distinct thing, differentiators for Pineapple/SUNation that is going to take us well into the future. And no company that we acquire is going to be just solely focused on resi or solely focused on commercial.

Yes, absolutely. And how are you thinking about the acquisition strategy here? I mean, how do you think about financing? And how do you think about just executing that over the next, frankly, years ahead? And what -- any particular geographies or focus or strategy?

It's not years ahead, it's months ahead, right? Like, so now that we successfully cleared out our cap stack, and we really -- we have some great people working for us, and we will raise the capital quite soon. And now it's a decision which one we want to do first, right? Like, it's not just about, well, this company has great revenue and great EBITDA, because you know that a year from now, some state policy could change. And we watched it -- one of my brothers in North Carolina had a horrible 2023. Boom, Duke comes in with a battery program, and he's off to the races with 80% attachment rate. right? So it's almost -- it's not just throwing the dart at the board. You kind of have to know where on the board, you're throwing -- you're aiming the dart to, where is the state policy. Now we're going to look a lot at what are the results of the election from a state level of where is policy going to change more on a state level and a utility level than on a federal level. And that's going to guide a lot of the forward inertia for the acquisition strategy. Or again, as I said, there's a lot of merger discussion on the table. There's a lot of people that are struggling with the PubCo cost that don't have the revenue, but they have cash, or they don't have the revenue and they have EBITDA that it makes all the sense in the world to work together and be more efficient that way.

Yes, absolutely. Well, look, I mean, let's talk a little bit more about the end market here. I mean, if we can, if you don't mind. I want to just continue on this because I'm getting asked inbound. So I think I'd just love to hear, I mean, what geographies are working out for you? I mean, where are you seeing sort of the best opportunities emerge, if you will, right? I mean, I think that's -- people are really curious to hear. I mean, given the diversified footprint of your network and business, how do you think about where there is real excitement here? And how do you think about what the financing and interest rate environment is doing to how you think about the business model itself?

Yes. The Southwest is pretty interesting to us. The Tampa, the Southeast is also interesting. We already did an organic expansion into Tampa. And like any organic expansion, I describe it like a runway. First, it's gravel -- first, it's dirt, then it's gravel, then it's pavement, right? So -- but I think that's -- the Florida area is really cool, especially with all the storms that go through there. We're not really looking at just solar anymore, right? Like, I think, that, again, without getting too political, the fact that we have leave for New York, that's a good thing. But I'm really -- I'm curious as to the Elon Musk factor and the efficiencies of government that he brings in. I know -- I saw like a blurb yesterday that he just did like a $500 million bond roll for residential solar financing. So there are a lot of weird indicators there, but we look at the ecosystem of a house or a building. It's not just, "Throw solar up." It's -- Elon is right, solar, storage, EV charging. These are all part of it. And I love the fact that he's sort of involved in whatever capacity in Washington also. It's funny. We're talking yesterday about that, people, well, Elon this and Elon that. And you know what, the reality is none of us even operate on the same mental wavelength as Elon Musk, right? So to think you know how he operates is just wrong. I also -- but -- listen, there -- more and more acquisitions are going to come into play. I think my partner, Jim has -- when he was doing this specifically in the beginnings of Pineapple, I think he had like a list of 84 relevant companies that we've had meaningful conversation with. That's 84 companies that are strategic targets that are waiting to see, "What am I going to do now?" "Is this the right company to go with?" "Is there a future?" So -- and listen, it's been bloody, man. I want to spend some time talking about the shareholders, and it's been bloody for them. It's -- so the acquisitions are going to look at that, like, "Okay, where are we now?" Where are we in the future, right? Are you going to see another reverse split, are you going to see this, are you going to see that. And again, I got to go back to the fact that the easiest path would have been steer the ship right into the iceberg, right? Wipe out the debt, screw the shareholders, screw the supply houses and rebuild. And a lot of people took that route. We immediately took the other route, right? So I lost a ton of money, shareholders were diluted. We took -- in the last 5 months, we took all the necessary steps, as bloody as they were, to get this company and this ship headed in the right direction, and we're there, right? So the 2 years have been tough, right? I understand our shareholders' concerns, myself included. We've always been transparent, very accessible. The shareholders have been diluted. While that's certainly not something I'm proud of, it's important that the shareholders know that when they feel the pain, so do I. But here's what I know from 2 decades in the industry, I've seen and thrived through many cycles. The solar industry is set for the next, probably the best chapter in the solar industry as far as I'm concerned. And we've laid out a really cohesive, strong, achievable set of goals. Slow and steady wins the race. We've cleaned up the balance sheet. We've enhanced operational efficiencies, made a lot of strategic investments that is going to prepare us, not just for the present, but for the future. So I'm not overreacting to this. We're going to come to work every day. The funny part is my Board was so specific about making sure that my partner, Jim, and I were invested for the long term in the company. When I really saw for me, retirement happening in -- here's my countdown clock. I had 46 days to retire, and that's just not happening anymore, so I'm in for the long haul. I guess what I hope is that the shareholders believe in me, believe in the company and believe in the plan. And I get on the phone -- I'll get on the phone with anybody. If you're a day trader, there are different traders, right? And what I've learned in my very small tenure as the CEO of this company is we don't control the share price. All I can do is go to work every day, sell jobs, deliver on -- perform, okay? And the traders really decide what the stock price is going to be that day and what it's not, right? I just have to give -- keep working forward, keep cleaning things up and keep sending good messages out there, and that's what we're doing.

Awesome. Excellent. Well, I'm really glad to hear that. From my vantage point, look, I think there's a bunch of questions that have come in. Since you bring up Elon, let's talk about Tesla super quickly, right? I mean we've seen an equipment evolution here. I mean just -- can you talk about what you're actually selling today, what that looks...

Sure.

What that could look like over time? And then more importantly, how that differs maybe to the extent to which it has evolved over the last 6, 12, 2 years even?

Yes. So we've always been -- we were a huge dealer for SunPower, right? I think anybody that has a lot of experience, a lot of people left SunPower. They got very arrogant. They changed their business model. So we've become -- when we left SunPower, we became very module agnostic, especially at the kitchen table. And when I say agnostic, meaning that when our reps sit on whatever coast, they're going to sit there and they're going to say, well, let's talk about -- you went on the Internet, you found REC, you found this, you found that panel. So let's talk about that. You've heard of Sanyo, Sharp, Mitsubishi, British Petroleum, LG, Panasonic, you heard those names, right? Boom, in the industry, out of the industry, we're still here, right? So we're going to use high-quality Tier 1 modules and that's it, right? Obviously, there's been a lot of downward pressure on module pricing, thank God, because inflation has definitely -- the biggest impediments were inflation and interest rates to the adoption of solar over the last year or the last 2 years. So from the electronics, which is the vulnerability, we've transitioned. We do a lot of Enphase work, we do a lot of Tesla work. I believe in the Tesla brand, right? Like they've never felt -- even though they're having their struggles now with fulfillment, right, because their product is so good, it's a sizzle to Tesla. But Enphase has been a great partner. For us, being the boots on the roof, right, like, it's really important that the way we install solar, and we provide in New York, a lifetime workmanship warranty, which we think is -- we think any of the companies that we acquire, that's going to be the model. You have to stand behind what you do. That's what creates lower cost of lead acquisition. It creates loyalty. It creates commitment. All the good stuff with our business is done regionally and locally, right? So it's how we install so that we don't have service problems that's really critical, and making sure the electronics are going to be there and protected. You know what, we've talked about this before. Like, in the early days of Enphase, if you jumped on the Enphase bandwagon, you were replace every single microinverter, right? And the same thing with SolarEdge. If you jumped on the SolarEdge bandwagon in 2016, they had their own problems. So you just got to pick a solid company. We believe in the Tesla product. We believe in Enphase, module agnostic and making sure that the customers, whether it's at a boardroom table, or at a kitchen table, understand that it's us you're buying, is more important than what you're buying. And for most people, it's about return on investment and making sure that we can deliver on those promises, trouble-free for a long time. So that's the answer to your product stuff. I lost you, buddy. Your mic's out.

All right. One second there. Sorry about that. All right. Cool. All right. Now I'm good. Hey, man, so look, another question that a lot of people are talking about is, look, let's talk about financing and how that's [Technical Difficulty] loans, I mean how are you guys thinking about adapting your business model around the different permutations and the new offerings that are coming out there? How do you think about that strategy here?

Yes. So in New York, we're probably a 98% loan company, 95% loan company. But I'm going to -- you got to put the financing [Technical Difficulty] it's either cash, it's local credit, local [Technical Difficulty] there. That's not to say that [Technical Difficulty] the core competency, we first start out right and eliminate all vulnerabilities. On the community solar which we're actively on the C&I side, we're actively engaged in. We, not only [ in-housed ], we see a lot of uptick on that side, [Technical Difficulty] systems. It's -- but you got to put the right butt in the in the right seat, saying, hey, well, my trucks are rolling. I'm making good money. So there's the opportunity to go, hey, 2 options, which one is right for you? Either way, you're going to get a SUNation installation or an HEC installation, which is the right way to pay for this. And [ what we ] don't do is [ credit-carry ] stuff and the idea of selling to 80-year-old people with tubes and they know -- the oxygen tubes as we [Technical Difficulty].

No, I really do hear you. I mean maybe just taking a step forward then, when you think about the ability to grow here, I mean, any kind of milestones or kind of targets you're talking about? I mean some of these other industry forecasters like to put out targets about teens growth or high single digit or what have you. I mean, have you thought about how you guys are thinking about 2025 preliminarily in terms of putting volumes on in any sort of term? I get that you guys are mixed between C&I and resi, too.

Yes. So I would say that what I'd like to get the company back to in 2025 is where we were in 2023 before all this transitionary stuff. We will be able to do that because we wiped out all the bad juju, right? We're able to -- we have to have capital to operate a business. You have to have employees that have raises and are current and happy to come to work. You have to have trucks that are out there rolling that don't have a -- so the 2025 model is to get back, not have to worry and be in harm's way as an entity. And to take it from the verge of bankruptcies where we are now in 5 months to where we're going to be in another 7 -- in another 12 is going to be a complete transition, right? We're going to be out of -- completely out of harm's way, restoring confidence and doing all that stuff through acquisition, through merger or, listen, we're going to raise the capital. The capital is coming to us. One of the things that I've glossed over that we were able to do, we were able to raise a couple of million bucks a month ago, being mindful of the share price, but raise it off our own equity. That's never been done in the history of Pineapple is to make a $0.10 on equity. So we were able to navigate, once we cleared out our cap stack, to actually use our currency to build this business. And I think that is also a really important step forward for the company. So that's kind of like from a cadence standpoint, the cadence standpoint is going to be -- we're going to trudge through the end of the year, and then we're going to have everything in place for Q1 in 2025. It's going to be a meaningful news month, I believe, a meaningful news quarter for us that'll set the stage for a really significant 2025 through acquisition. I'll leave it at that, all right? I don't want to give you -- it's like -- if this is like a horror story, you got to know where the guy with the chainsaw is standing, right? Like, I'm not going to tell you where the chainsaw guy is, but we're in a good place.

Nice. Excellent. I appreciate that. Please go for it.

I'd love to get to some -- is anybody live? I want to -- listen, I want to -- first of all, I want to express a gratitude to the investors, my leadership team, the Board of Directors, our employees in New York and Hawaii. Julien, thank you for your confidence. I hope we deliver value your way also. You know that, like, I'm in the trenches every day, man. We let you know what it looks like from the trenches, not from the spreadsheets and not from the balance sheets and not from the Excel formats, right? But, listen, I wake up now with a different purpose. I have to deliver, right? There's a meaningful conversation here. When we made the name change from Pineapple to SUNation, the SUNation brand is me. I grew that. So if my legacy in this industry is hinged on that, and that's why I push so hard for that because if SUNation fails, Scott Maskin fails, and I have to live with that the rest of my life, and that's just simply not going to happen. The simple, we're going to build -- we're reimagining the company. And I -- just, I'm incredibly grateful for the trust people have put. I get a lot of letters of support. I also get some interesting comments. I'm live on chatboards. I've had some stalkers. I've had people send stuff to my house. So -- but I'm up for the fight. And we're up to the challenge of creating value for the shareholders and getting this back on track.

Look, let me ask you this. How do you think about differentiating yourself in a world of different residential solar installers? I mean how do you think about saying, "Look, this is what we're going to do differently to succeed."

We do...

And it's something that stands out?

Brother, we do it differently already. Our customer approval rating is off the charts, like [ avalanche ]. It's not just a sale and a solar system. Like, we build raving fans. This is a family -- that's kind of what has always been the secret sauce of HEC and SUNation is that we bring people into the -- and we make a family, right? So now what we're seeing, like, there's an amazing company, an appliance company that we modeled after. Like it's not just the -- when I sold solar, just to the grandparents, they're buying it for their kids that are buying houses. The grandparents are leaving it, right? Like you're building it -- no, you don't -- it's SUNation. You're going to use SUNation. You're going to use HEC. That's who you're going to use, right? And that's something that you can only get at regional level. National people, people that are sitting at Home Depot, hey, do you want to save $30 on your bill. That's not the message, right? This is -- we have the right message. I will go to my grave believing that when you do the right thing by the customer, everybody wins, everybody. The shareholders win, the finances win, splash, everybody is entitled to win on us. And that's -- I'll go to my grave with that one. So if you want to take some [ on the ] line, again, I want to be mindful.

Yes, let's do it. Yes, 100%. Yes, let's -- operator, let's see if there's any questions here, if you don't mind. I know I've already satiated a bunch. So let's see if there's any left.

[Operator Instructions].

And also Julie, if you have to drop, I'll stay on and answer. We have a lot of questions queued up that I'm happy to answer also.

We've got someone on the line.

Yes, we got no -- there's a glitch on the live stuff? So start hitting the list if you want instead of live, just going forward and hitting the list of some of those questions that are up there also.

Yes. Yes, absolutely. I mean -- so look, I'd love to get your opinions here. I mean what do you think about the state of the industry? Let's just come back here. And people are really, really concerned here, a lot of different nuances. What are your concerns? And what do you think is an overblown concern?

Not -- I'm not concerned. I have 21 years of -- we're more vulnerable at the state level than anything. I have no concerns that my business is going to open tomorrow. People are going to keep filling out Q cards. People are still going to buy solar. Businesses are still -- school districts are still going to go solar, right? I have no questions about that. I think that we have to be super aggressive on making sure that we deliver the value, deliver on the promises, maintain operational expertise and efficiencies and drive profitability and that's going to come out in the Q that's going to be released later today. I also have my state of the company address for employees that are spread out all over the country right now the end of the day today, so that's always fun. But like I said, I have no concern about the industry. I just don't man. I've seen worse downturns before. I think that we've hit the bottom in the last 18 months, right? And I think that we're going to be a major -- I think there's going to be growth in other sections. Like, if the federal government has its way, they're going to do other -- oil and gas and stuff like that. I think wind could be vulnerable. But the idea of people taking control of their own energy consumption and owning that is something that is really attractive on buildings. When you look at a building and you say, "Hey, listen, I can give you $100,000 a year in income for -- or give you a new roof or something like that. These are meaningful discussions that we have, so I'm not worried about it at all. It's just going to keep moving forward with or without tax credit. I mean, tax credits are a big deal. Hopefully, they stay where they are. But if interest rates and inflation goes down, look at what just happened in module pricing since COVID, right? What, I used to pay $0.80 a watt for I'm paying $0.25 a watt, so.

I mean do you want to talk about costs in the business real quickly? I mean, because you just talked about panel pricing here. I mean where is panel pricing? How have costs evolved for you? And when you think about this inflation/deflation trend here, I mean, I'm very curious to see what you're seeing on the ground here.

A little give and take here. And we're turning off Pineapple/SUNation and into Jefferies. I got you. So what I see is I think that we've seen a lot of efficiencies on modules. I have not seen tremendous changes on the electronics side. We pretty much install as efficiently as possible as it is. So I don't see any major breakthroughs with racking. But again, for every $0.01 we save on a module, we're spending it on finance, right? So it's a net neutral. We have our margins that we work with in Hawaii and New York and every other business that we'll be acquiring. We have our margins that are our minimal operating margins, oh, and we're not afraid to walk away from work, right? But again, in the ownership model, you have to deliver on those things. It's not just about a monthly payment, right? It's -- you have to deliver on a lot more than just a monthly payment. So it's always a give and take. During -- when interest rates were down, equipment was up. Labor is always going to consistently go up a little bit. It's important that, that happens. But save your -- keep your margins where they are. Don't be afraid to walk away from work if it's not profitable. We don't really compete -- we don't compete a lot because our -- the customers that are calling us -- and that comes with years in Hawaii and New York of developing relationships with these customers. It's not just an Internet -- and yes, we're starting to adopt some AI stuff in the business, which is super cool. I'm 61 years old, man. A and I were just -- they were just 2 vowels when I was growing up. Now it's, like, how you run your business, right? But -- so that's kind of fun. And it's helped me, as a leader, to word things a little bit differently. I haven't -- kudos, I haven't dropped an F bomb or a curse in 56 minutes, okay, which you know is not -- I'm not used to doing. But that's really what -- again, you're buying into -- the Pineapple people are going to buy in one way or the other, right? But we have to perform to make that happen. People that are going to get in early are going to win the race. And I just want -- I'm just going to keep doing what we do as a business every single day. And as soon as something comes up, which comes up every day, we squish it, we figure it out, we move on. We squish it, we grow with it. We celebrate the wins, we work through the losses and we do it as a team. And again, that is the differentiator with our company versus so many other companies. And you sort of lose that, right? Like, that's what I don't want to do, like when you go from a mom-and-pop, $10 million, $20 million,[ etc. ], and you join into a PubCo, it's easy to lose sight of who's important. I made a real -- when I took over the reins, first thing I did, I got out to Hawaii and -- who hadn't seen any leadership in 14 months, right, and let them know, there's a new sheriff in town, things are going to be done differently. But my idea is that shareholders are super important. Everybody is important. If the core business units are succeeding, everything upstream works itself out. If the core business units are failing, everything upstream follows suit and goes down also. So it's really important to make sure that the core business units are operating at maximum efficiency. Doing things the right way, doing things that -- it's funny, like, in our business, you want all the good you want, but if [Technical Difficulty] whole community. So that's from $10 billion to $100 billion who knows where their core competency is. And we're just going to be the group that puts it [Technical Difficulty] the very thing regionally, throws the dart [Technical Difficulty] get better, right? We watched -- Vermont was a tough [ market ]. It was kind of go from zero to hero. So we'll see what happens in California. I'm not really interested on going that far. There are a lot of cool markets right now with great EPCs that want to be part of something like this and deliver tremendous value. So that's our model. That's where we're headed, and that's what 2025 is going to bring. And I hope everybody jumps on board.

Any other final comments here? Otherwise, we'll call it there. You tell me.

No, man. I appreciate it. I don't know, the OpenExchange people, if you want me to stay on, if you can post, like, my e-mail address any questions that I didn't get to, please submit at [email protected] or go to the Pineapple now website, submit that stuff, give me your contact information. I commit to you, I don't care where you are in the world, I will get to you, I will talk to you. And to the people that had stuck it out, continue, stick out and watch this -- watch what's about to happen. I got a lot of confidence, and I appreciate you sticking it out with me. All right, brother?

Awesome. Excellent. Well, hey, Scott, always a pleasure, sir. I wish you all the best, all right? Good luck on the new one.

In Hawaii, we call you ohana, you're family, Julien. Thank you, brother. And anything I can do for you, I appreciate it.

Hey, likewise. All the best and take care. It's been a pleasure.

Talk to you later.

Take care, Scott.