{"id":521660,"date":"2021-08-02T16:37:04","date_gmt":"2021-08-02T20:37:04","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/communications-systems-closes-the-sale-of-its-transition-networks-and-net2edge-businesses-to-lantronix\/"},"modified":"2021-08-02T16:37:04","modified_gmt":"2021-08-02T20:37:04","slug":"communications-systems-closes-the-sale-of-its-transition-networks-and-net2edge-businesses-to-lantronix","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/communications-systems-closes-the-sale-of-its-transition-networks-and-net2edge-businesses-to-lantronix\/","title":{"rendered":"Communications Systems Closes the Sale of its Transition Networks and Net2Edge Businesses to Lantronix"},"content":{"rendered":"

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Communications Systems Closes the Sale of its Transition Networks and Net2Edge Businesses to Lantronix<\/b><\/p>\n

MINNETONKA, Minn.–(BUSINESS WIRE<\/a>)–Communications Systems, Inc. (NASDAQ: JCS)<\/b> (\u201cCSI\u201d or the \u201cCompany\u201d), today announced that following CSI shareholder approval and satisfaction of other customary conditions, it completed the sale of the Transition Networks and Net2Edge businesses, which comprised substantially all of the assets of the Company\u2019s Electronics & Software Segment, to Lantronix, Inc. (Nasdaq: LTRX) (\u201cLantronix\u201d).\n<\/p>\n

\nAt the closing, CSI received a $24.16 million cash payment, which was based on a $25.0 million closing payment, as adjusted by estimated closing net working capital. This amount may be further adjusted to reflect the final closing net working capital amount. Also, up to an additional $7.0 million may be paid by Lantronix to CSI in earnouts based on revenue milestones for the Transition Networks and Net2Edge businesses in the two 180-day periods after closing of the sale.\n<\/p>\n

\nIn connection with the sale of the Electronics & Software Segment to Lantronix, effective immediately, Anita Kumar stepped down as CSI\u2019s Chief Executive Officer and resigned as a CSI director and has joined Lantronix. Roger Lacey, the Executive Chairman of the CSI Board of Directors, also effective immediately, assumed the additional role of Interim Chief Executive Officer until the closing of the CSI-Pineapple merger transaction is completed.\n<\/p>\n

\nFor more information about the previously announced CSI-Pineapple merger visit https:\/\/www.commsystems.com\/investor-resources\/<\/a>.\n<\/p>\n

Additional Legacy CSI Assets<\/strong><\/p>\n

\nConsistent with the announcement of the CSI-Pineapple merger transaction, CSI has been devoting its efforts to monetizing CSI\u2019s assets for the benefit of our shareholders by actively pursuing the divestiture of substantially all our current operating and non-operating assets. Following the closing of the sale of the Electronics & Software Segment, CSI\u2019s remaining legacy assets include the Services & Support Segment (JDL Technologies and Ecessa Corporation), which had revenues of $8.8 million in 2020, the Company\u2019s headquarters building in Minnetonka, Minnesota, currently listed for $10.0 million, and real estate in Hector, Minnesota, currently listed for $975,000. As previously disclosed, in addition to any cash dividends paid prior to the CSI-Pineapple merger transaction, CSI shareholders immediately prior to the closing of the CSI \u2013Pineapple merger transaction (i) will receive a CVR that will entitle them to participate in distributions of the net proceeds from earnouts related to the Lantronix transaction and the sale of the remaining CSI legacy assets and (ii) will continue to own the same number of shares of CSI common stock immediately following the closing of the CSI-Pineapple merger transaction and therefore have an interest as shareholders in the post-merger CSI that will commence doing business as Pineapple Energy, with a business model focused on the rapidly growing home solar industry.\n<\/p>\n

About Communications Systems, Inc.<\/b><\/p>\n

\nCommunications Systems, Inc. (Nasdaq: JCS), which has operated as an IoT intelligent edge products and services company, has announced its planned merger transaction with Pineapple Energy. After the Pineapple merger transaction, the Company will be positioned to grow organically and to acquire and grow leading local and regional solar, storage, and energy services companies nationwide. The vision is to power the energy transition through grass-roots growth of solar electricity paired with battery storage on consumers’ homes.\n<\/p>\n

Website Information<\/b><\/p>\n

\nCSI routinely posts important information for investors on its website, www.commsystems.com<\/a>, in the \u201cInvestor Resources\u201d section. CSI uses this website as a means of disclosing material information in compliance with its disclosure obligations under SEC Regulation FD. Accordingly, investors should monitor the \u201cInvestor Resources\u201d section of CSI\u2019s website, in addition to following its press releases, SEC filings, future public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, CSI\u2019s website is not incorporated by reference into, and is not a part of, this document.\n<\/p>\n

Forward Looking Statements<\/b><\/p>\n

\nThis press release includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding future financial performance, future growth and future acquisitions. These statements are based on Communications Systems\u2019 current expectations or beliefs and are subject to uncertainty and changes in circumstances. There can be no guarantee that the proposed transactions described in this document will be completed, or that they will be completed as currently proposed, or at any particular time. Actual results may vary materially from those expressed or implied by the statements here due to changes in economic, business, competitive or regulatory factors, and other risks and uncertainties affecting the operation of Communications Systems\u2019 business. These risks, uncertainties and contingencies are presented in the Company\u2019s Annual Report on Form 10-K and, from time to time, in the Company\u2019s other filings with the Securities and Exchange Commission. The information set forth herein should be read considering such risks. Further, investors should keep in mind that the Company\u2019s financial results in any period may not be indicative of future results. Communications Systems is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether because of new information, future events, changes in assumptions or otherwise. In addition to these factors, there are a number of additional factors, including:\n<\/p>\n