SUNation Energy, Inc. 10-K

ITEM 9A: CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures In connection with the filing of this Form 10-K, under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of December 31, 2021. Based on that evaluation, as detailed below, management concluded that the Company’s disclosure controls and procedures are effective. Management Report on Internal Control over Financial Reporting The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as that term is defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act. Under the supervision and with the participation of the Company’s management, including the CEO and CFO, the Company conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2021, based on Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “Framework”) . Based on that evaluation, management concluded that the Company’s internal controls and procedures are effective. Inherent Limitations on Control Systems Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, will be or have been detected. These inherent limitations include the realities that judgments in decision making can by faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Changes in Internal Control There were no other changes in the Company’s internal control over financial reporting that occurred during the Company’s most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting . This annual report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report. ITEM 9B. OTHER INFORMATION None. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. ‎ 64 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE INFORMATION REGARDING BOARD OF DIRECTORS The following table sets forth information regarding the Company’s current directors including information regarding their principal occupations currently and for the preceding five years, as well as discussion of the specific experience, qualifications, attributes and skills that led to the conclusion that such person should serve as director of CSI: ROGER H.D. LACEY (71) served as CSI’s chief executive officer from February 2015 until November 30, 2020 and has served as the executive chairman of CSI board of directors since December 2018. He also assumed the additional role of interim chief executive officer on August 2, 2021 when then-CEO Anita Kumar’s employment was terminated in connection with the closing of the Company’s sale of its Electronics & Software Segment to Lantronix and Ms. Kumar was hired by Lantronix. Mr. Lacey has been a CSI director since 2008, served as board vice chair from September 2013 until December 2018 and interim chief executive officer from June 2014 until February 2015. Mr. Lacey was senior vice president of strategy and corporate development at the 3M Company from 2009 to his retirement in 2013. He was the 3M Company’s chief strategy officer and head of global mergers and acquisitions from 2000 to 2013. Mr. Lacey’s career with 3M began in 1975; from 1989 to 2000 he held various senior positions including serving as division vice president of 3M Telecom Division. In addition, Mr. Lacey served as a member of the corporate venture capital board for internal and external new venture investments from 2009 to 2013. Mr. Lacey is a board member of Johnsonville Sausage Corporation, a leading US food company, and also a Senior Partner in CGMR Capital, a private equity firm. He is a member of the board of governors for Opus Business School, University of St. Thomas; a visiting professor of strategy and corporate development, Huddersfield University; a founding member of the Innovation Lab at MIT; and is a former vice chair of Abbott Northwestern Hospital Foundation. Mr. Lacey brings a unique perspective that combines familiarity with key telecommunication and data markets around the world combined with deep experience in strategic planning and business development. RICHARD A. PRIMUTH (75) was elected as a director in October 2013 and serves as Chair of the Compensation Committee. Beginning January 1, 2018, Mr. Primuth began providing legal and business consulting services as an independent contractor. Prior thereto, for over 44 years, Mr. Primuth served as an attorney with the Minneapolis law firm of Lindquist & Vennum LLP, specializing in business law. He was a partner in this firm from 1977 until December 2011 when he became Of Counsel to the firm. Mr. Primuth’s business law practice was heavily focused on representing public and private corporations, securities offerings, mergers and acquisitions, and other complex business transactions. He served as the Company’s primary outside legal counsel from 1983 until he was elected to the Board in 2013. Upon being elected to the Board, he ceased providing any legal services to the Company. On December 31, 2017, Mr. Primuth retired from and ceased having any further association with Lindquist & Vennum LLP when it merged with and into Ballard Spahr LLP. The Board of Directors believes that Mr. Primuth’s significant experience in corporate governance, public offerings and other financings, capital markets, SEC compliance and reporting, mergers and acquisitions, spin offs, complex contract negotiations, and other business law areas, as well as his deep understanding of the Company, its history, markets and products, make him a significant resource as a Company director. RANDALL D. SAMPSON (61) has been a director since 1999 and the Lead Independent Director since December 2018. He currently serves as Chair of the Audit & Finance Committee, and also is a member of the Compensation Committee. Mr. Sampson is the President, Chief Executive Officer, and a Board member of Canterbury Park Holding Corporation (“CPHC”), all positions he has held since 1994. CPHC is a public company based in Shakopee Minnesota that re-launched a failed pari-mutuel race track and stimulated the revival of Minnesota’s horse breeding and training industries. Under his leadership, the Canterbury Park Racetrack has become a unique, family-friendly venue for live horse races and other entertainment, as well as pari-mutuel and card club wagering. Before becoming one of the three co-founders of CPHC in 1994, and after graduating from college with a degree in accounting, Mr. Sampson worked for five years in the audit department of a large public accounting firm where he earned his CPA certification, subsequently gained experience as a controller of a private company, served as a chief financial officer of a public company and managed Sampson family interests in horse breeding and training. The challenging nature of Canterbury Park’s business has demanded from its CEO an entrepreneurial mindset, attention to expense control, continuous innovation in marketing, and attention to the needs of customers, which, along with other qualities, Mr. Sampson uniquely brings to the governance responsibilities of the CSI Board. STEVEN C. WEBSTER (64) has served as a director since 2017. Since July 2013, Mr. Webster has served as Senior Fellow and Spencer Chair in Technology Management at the University of Minnesota. In this capacity, he teaches graduate classes in innovation for mid-career professionals and in business basics for graduate students in science and technology. From May 2005 to October 2012, Mr. Webster was Vice President of Research and Technology Commercialization for 3M Company’s Display and Graphics Business. In that role, he had responsibility for about 1,000 technical professionals worldwide, setting technology strategy and guiding key programs for a $4 billion global business. He directly led laboratories in Saint Paul, Minnesota; Austin, Texas; and Singapore. Over his 31-year career with 3M, Mr. Webster also held the executive position leading the global deployment of 3M Six Sigma; held R&D leadership roles in display technology, optical films, telecommunications, data storage and optical recording; and had business responsibility for fiber optics and test systems products in the 3M Telecom Systems Division. Prior to joining 3M, Mr. Webster was a Member of Technical Staff at Bell Laboratories in Holmdel New Jersey, from 1979 to 1981, where he worked on the first commercial 65 fiber optics transmission system. Mr. Webster received a Master of Science in electrical engineering and computer science and a Bachelor of Science in electrical engineering from MIT in 1979. Mr. Webster currently serves on the Board of Directors and Executive Committee of the Guthrie Theater, and on the MIT Undergraduate Practice Opportunities Program Advisory Board. Mr. Webster brings deep experience in new product development, an understanding of telecommunications technology and business dynamics, expertise in the application of Six Sigma to improve business processes and significant executive level management skill, all qualities that strengthen the Board’s oversight of the Company’s businesses. MICHAEL R. ZAPATA (43) has served as a director since June 2020. Mr. Zapata has served as Executive Chairman and President of Schmitt Industries, Inc. since December 2018, and as Chief Executive Officer of that company since July 2019. Mr. Zapata is the founder and Managing Member of Sententia Capital Management, LLC, a value investing focused investment management firm (“Sententia”). Since its inception in 2012, Sententia has invested in deep value public equities in a concentrated portfolio. The firm employs a rigorous research process and attempts to engage constructively with management when appropriate. Prior to Sententia, Mr. Zapata served nearly 10 years in the U.S. Navy. During his service from 2001 to 2010, he held various leadership roles during the Global War on Terror. Deploying to locations including Iraq, Afghanistan, Africa, the Middle East and the Arabian Peninsula, he brings valuable insight and expertise in intelligence fusion, operational execution, strategic planning and risk mitigation. He received his B.S. from Texas A&M University, where he was recognized as a Dougherty Award Recipient. He received his M.B.A. from Columbia University as a student in the Heilbrunn Center for Value Investing. He serves as a director of Tip of the Spear Foundation, a non-profit dedicated to supporting Elite Operators and their families during times of need. Mr. Zapata ’ s background in, and kno w ledge of, operational execution and str a t eg i c p l ann i ng , as well as his familiarity with small public companies and the challenges they face bring a good perspective to the Board. CORPORATE GOVERNANCE AND BOARD MATTERS General Information Our Board is committed to sound and effective corporate governance practices. Our governance policies are consistent with applicable provisions of the rules of the SEC and the listing standards of the Nasdaq Capital Market (“Nasdaq”). We also periodically review our governance policies and practices in comparison to those suggested by authorities in corporate governance and the practices of other public companies. You can access the charter of our Audit & Finance Committee, the charter of our Compensation Committee, our Governance Guidelines and our Code of Ethics and Business Conduct by following links on the “Corporate Governance” page of our website http://commsystems.com. The Board, Board Committees and Meetings Meeting Attendance. Our Board meets regularly during the year to review matters affecting our Company and to act on matters requiring Board approval. Each of our directors is expected to make a reasonable effort to attend all meetings of the Board, applicable committee meetings and our annual meeting of shareholders. During 2021, the Board met thirty-one times. Each director attended at least 80% of the meetings of the Board and committees on which he or she served, and all directors attended the 2021 Annual Meeting of Shareholders, which was held virtually. Board Committees. Our Board has established two standing committees: Audit & Finance and Compensation. Only non-employee, independent directors of the Board serve on these committees. Following is information about each committee: Audit & Finance Committee. The Audit & Finance Committee is responsible for the engagement, retention and replacement of the independent registered public accounting firm, approval of transactions between the Company and a director or executive officer unrelated to service as a director or officer, approval of non-audit services provided by the Company’s independent registered public accounting firm, oversight of the Company’s internal controls and the receipt, retention and treatment of complaints regarding accounting, internal controls and auditing matters. The Company’s independent registered public accounting firm reports directly to the Audit & Finance Committee. The Audit & Finance Committee operates under a formal charter that is reviewed annually and was most recently revised on May 5, 2021. The current members of the Audit & Finance Committee are Randall D. Sampson (Chair), Steven C. Webster and Michael Zapata, each of whom is independent under applicable SEC Rules and Nasdaq listing standards. In addition, the Board has determined that Randall D. Sampson qualifies as the Committee’s financial expert. The Audit & Finance Committee met four times during 2021. Compensation Committee. The Compensation Committee is responsible for the overall compensation strategy and policies of the Company; reviews and approves the compensation and other terms of employment of the Company’s chief executive officer and other executive officers, subject to final Board approval; oversees the establishment of performance goals and objectives for the Company’s executive officers; administers the Company’s incentive compensation plans, including the Company Employee Stock Purchase Plan; considers the adoption of other or additional compensation plans; and provides oversight and final determinations with respect to the Company’s 401(k) plan, employee stock ownership plan and other similar employee benefit plans. The Committee operates under a Board-approved charter that is reviewed annually and was most recently amended on December 8, 2020. The current members of the 66 Compensation Committee are Richard A. Primuth (Chair), Randall D. Sampson, and Steven C. Webster. Each Compensation Committee member is independent under Nasdaq standards. The Committee met four times in 2021. In addition, at Board meetings and in separate meetings among themselves, Mr. Primuth, Mr. Sampson, Mr. Webster, and Mr. Zapata, the independent and non-employee members of the CSI board of directors, participate in the consideration of director nominees. See “Selecting Nominees for Election to the Board.” ‎ The independent and non-employee members of the CSI board of directors, acting as a nominating committee and the Board continue to assess the Board’s strengths and may in the future recommend new persons for election to the Board of Directors. Director Independence The Board has adopted director independence guidelines that conform to the definitions of “independence” set forth in Section 301 of the Sarbanes-Oxley Act of 2002, Rule 10A-3 under the Securities Exchange Act of 1934 and listing standards of the Nasdaq Stock Market. In accordance with these guidelines, the Board has reviewed and considered facts and circumstances relevant to the independence of each of our directors and director nominees and has determined that each of the following current directors qualifies as “independent” under Nasdaq listing standards: Richard A. Primuth, Randall D. Sampson, Steven C. Webster, and Michael Zapata. Selecting Nominees for Election to the Board Although the Board does not have a formal policy regarding diversity, in addition to minimum requirements of integrity, ability to make independent analytical inquiries, personal health and a willingness to devote adequate time and effort to Board responsibilities, the Board seeks individuals who reflect diversity in background, education, business experience, skills, business relationships and associations and other factors that will contribute to the Board’s governance of the Company. In making recommendations regarding nominees for election as directors, the Board will consider qualified candidates who are proposed by our shareholders. Shareholders may directly nominate an individual for election to the Board at our shareholders meeting by following procedures in our Bylaws. Board Leadership In December 2018, CSI’s Roger H.D. Lacey was named as the Executive Chairman of the CSI board of directors. Mr. Lacey continued to serve as Chief Executive Officer of CSI until December 1, 2020 when Anita Kumar was elected to the board and appointed Chief Executive Officer. Mr. Lacey also assumed the additional role of interim chief executive officer on August 1, 2021 when then-CEO Anita Kumar’s employment was terminated in connection with the closing of the E&S Sale Transaction and Ms. Kumar was hired by Lantronix. Effective August 1, 2021, Ms. Kumar also resigned from the CSI board of directors. In connection with the December 2018 changes, Randall D. Sampson was named as the lead independent director and has continued to serve in that capacity. Board’s Role in Managing Risk In general, management is responsible for the day-to-day management of the risks the Company faces, while the Board, acting as a whole and through the Audit & Finance Committee, has oversight responsibility for risk management. In its risk oversight role, the Board has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed. Members of senior management attend the regular meetings of the Board and are available to address questions and concerns raised by the Board related to risk management. In addition, the Board regularly discusses with management, the Company’s independent registered public accounting firm and the internal auditor, identified major risk exposures, their potential financial impact on the Company, and steps that could be taken to manage these risks. The Audit & Finance Committee assists the Board in fulfilling its risk management oversight responsibilities in the areas of financial reporting, internal controls and compliance with legal and regulatory requirements. The Audit & Finance Committee reviews the Company’s financial statements and meets with the Company’s independent registered public accounting firm and internal auditor at least four times each year to review their respective reports on the adequacy and effectiveness of our internal audit and internal control systems, and to discuss policies with respect to risk assessment and risk management. Code of Ethics and Business Conduct We have adopted a Code of Ethics and Business Conduct (the “Code”) applicable to all of the Company’s officers, directors, employees, and consultants that establish guidelines for professional and ethical conduct in the workplace. The Code also contains a 67 special set of guidelines applicable to the Company’s senior financial officers, including the chief executive officer, principal financial officer, principal accounting officer, and others involved in the preparation of the Company’s financial reports. These guidelines are intended to promote the ethical handling of conflicts of interest, full and fair disclosure in periodic reports filed by the Company, and compliance with laws, rules and regulations concerning this periodic reporting. A copy of the Code is available by following links on the “Corporate Governance” page of our website at http://commsystems.com, and is also available, without charge, by writing to the Company’s Corporate Secretary at: Communications Systems, Inc., 10900 Red Circle Drive, Minnetonka, Minnesota 55343. Contacting the Board of Directors Any shareholder who desires to contact our Board of Directors may do so by writing to the Board of Directors, generally, or to an individual director at Communications Systems, Inc., 10900 Red Circle Drive, Minnetonka, Minnesota 55343. Communications received electronically or in writing are distributed to the full Board of Directors, a committee or an individual director, as appropriate, depending on the facts and circumstances described in the communication received. By way of example, a complaint regarding accounting, internal accounting controls or auditing matters would be forwarded to the Chair of the Audit & Finance Committee for review. Complaints and other communications may be submitted on a confidential or anonymous basis. Compensation Committee Interlocks and Insider Participation No member of our Compensation Committee has served as one of our officers or employees at any time. None of our executive officers serves as a member of the compensation committee of any other company that has an executive officer serving as a member of the board. None of our executive officers serves as a member of the board of directors of any other company that has an executive officer serving as a member of our Compensation Committee during the last year. INFORMATION REGARDING EXECUTIVE OFFICERS Set forth below is biographical and other information for our current executive officers, including their ages as of March 1, 2022. Information about Roger H.D. Lacey, our Interim Chief Executive Officer and Executive Chair, may be found above in this Annual Report on Form 10-K under the heading “Information Regarding Directors.” Name Age Position 1 Mark D. Fandrich 60 Treasurer, Secretary and Chief Financial Officer 1 Scott Fluegge 52 VP of IT and Digital Transformation 2 1 Mr. Fandrich was appointed Chief Financial Officer in August 2016. From July 2015 to August 2016, he served as Vice President of Finance of Suttle, Inc. From April 2004 to July 2015, he was Corporate Controller for The Bergquist Company, a global supplier of thermal interface material. ‎ 2 Mr. Fluegge was appointed Vice President of IT and Digital Transformation in January 2021. Previously he became Vice President and General Manager of JDL Technologies in December 2011, and was named President and General Manager in September 2013. Prior to this, he was the Vice President of Workload Automation at GSS America / GSS Infotech / Infospectrum Consulting. ITEM 11. EXECUTIVE COMPENSATION This section discusses our executive compensation objectives and policies, forms of compensation, and compensation related to services in 2021 paid or potentially payable to the Named Executive Officers identified below under the Summary Compensation Table (“NEOs”). For 2021, the Compensation Committee’s approach to compensation of the NEOs has been significantly impacted by the proposed Pineapple Merger Transaction and CSI’s related efforts to divest its assets, which have led to the E&S Sale Transaction. 68 Historically, the Compensation Committee’s approach in executive compensation have been: ‎  To align compensation with shareholder interests;  To reward both annual and long-term financial performance;  To provide pay opportunities comparable to opportunities at companies with which the Company competes for management talent; and  To maintain internally fair and equitable compensation levels and practices. ‎ Historically, the Company has generally structured its annual and long-term incentive compensation to be “performance-based.” In addition, when determining how much performance-based compensation should be paid in cash versus granting stock options or other awards payable in stock, the Compensation Committee has generally emphasized paying long-term compensation through equity awards. Due to the pendency of the Pineapple Merger Transaction, the Compensation Committee did not change base salaries of the NEOs following the March 1, 2021 date of the merger agreement. Accordingly, the base salaries for the NEOs for 2021 were the same as in effect at the end of 2020. Further, due to pendency of the Pineapple Merger Transaction, CSI did not adopt an annual bonus plan for 2021, pay discretionary bonuses for 2021, approve long-term incentive (LTI) awards under the Company’s Long Term Incentive Compensation Plan (the “LTI Plan”) for 2021, or grant stock options, restricted stock units or other equity awards to the NEOs in 2021 under the 2011 Executive Incentive Compensation Plan (the “2011 Plan”) or otherwise. E&S Sale Transaction Impact on 2021 NEO Compensation On August 2, 2021, CSI completed the E&S Sale Transaction. The closing of the E&S Sale Transaction constituted a “Change in Control” as defined in the 2011 Plan. As of the time of the closing of the E&S Sale Transaction, all of CSI’s outstanding equity incentive awards, consisting of stock options and restricted stock units (RSUs), were granted under the 2011 Plan. The closing of the E&S Sale Transaction also constituted as Change in Control under the LTI Plan and at the time of the closing, there were outstanding Incentive Awards under the LTI Plan that had been granted to the NEOs and other participants for the three-year performance period of 2019 to 2021 and the three-year performance period of 2020 to 2022 (collectively, the “LTI Awards”). Kumar Separation and Severance Agreement In connection with the closing of the E&S Sale Transaction, CSI entered into a separation and severance agreement dated August 1, 2021 with its Anita Kumar, CSI’s chief executive officer at that time and an NEO. The separation and severance agreement superseded the employment agreement between CSI and Ms. Kumar dated effective as of December 1, 2020 and the change in control agreement between CSI and Ms. Kumar effective as of December 8, 2020, which were each terminated. Under the separation and severance agreement, Ms. Kumar was paid a severance benefit equal to $140,000 or six months base salary, the same amount that would have been required under her employment agreement, in a lump sum. Ms. Kumar also will be paid a severance benefit equal to $329,784, the same amount that would have been required under her change in control agreement, over the 12-month period following the closing of the E&S Sale Transaction. Ms. Kumar delivered a general release of claims as required under the separation and severance agreement, which was a condition to the severance benefit. Under the separation and severance agreement, any remaining portion of the severance benefit of $329,784 would become payable in a lump if Ms. Kumar’s employment with Lantronix is terminated by Lantronix without cause or by Ms. Kumar for good reason, as those terms are defined in the separation and severance agreement, or if Ms. Kumar dies. Under the separation and severance agreement, any remaining portion of the severance benefit of $329,784 would be forfeited if Ms. Kumar’s employment with Lantronix is terminated by Lantronix for cause or by Ms. Kumar without good reason. In connection with Ms. Kumar’s pending employment with Lantronix, CSI terminated the employment of Ms. Kumar and her position as a CSI officer and Ms. Kumar resigned as a CSI director effective August 1, 2021. In connection with Ms. Kumar’s departure, Roger H.D. Lacey, then serving as Executive Chairman of the CSI board of directors, assumed the additional role of Interim Chief Executive Officer. CSI expects Mr. Lacey to continue in this role until the closing of the Pineapple Merger Transaction. 2011 Incentive Plan Awards In order that all holders of Incentive Awards (as defined under the 2011 Plan) would receive the benefit of these Incentive Awards even though, as a condition of the E&S Sale Transaction, CSI was obligated to terminate the employment of these individuals immediately prior to the closing date and immediately prior to the Change in Control that occurred by virtue of the consummation of 69 the E&S Sale Transaction, the Compensation Committee made determinations and approvals under the 2011 Plan consistent with its earlier approvals and determinations at the time CSI entered into the securities purchase agreement with Lantronix . In accordance with the determinations and approvals of the Compensation Committee, effective on August 1, 2021, each Incentive Award granted and outstanding under the 2011 Plan and not otherwise forfeited or expired in accordance with its terms was fully vested and exercisable and any restrictions lapsed. After giving effect to such acceleration and vesting, on the August 2, 2021 closing date:  All then-outstanding RSUs were settled by exchanging them for the equivalent number of shares of CSI’s common stock specified in the respective RSU award agreements, with the shares of CSI’s common stock issued on settlement of the RSUs being issued and outstanding as of the closing date.  All then-outstanding stock options having an exercise price less than $7.15 per share, the Fair Market Value as defined in the 2011 Plan on the closing date, were settled by exchanging the options for a “net” number of shares of CSI’s common stock as if exercised on a net or cashless basis as provided in the 2011 Plan (for administrative convenience, rounded up to the next whole share), with the net shares of CSI’s common stock issued on settlement of these stock options being issued and outstanding as of the closing date.  Following the disposition of the outstanding RSUs and stock options as described above, these Incentive Awards were terminated and cancelled as of the closing date.  All then-outstanding stock options having an exercise price equal to or greater than $7.15 per share , the Fair Market Value on the closing date, were terminated and cancelled as of the closing date without any payment therefor.  Any required tax withholding not otherwise satisfied in cash on the closing date is being satisfied by CSI reducing the shares otherwise issuable to the holder of the Incentive Award by that number of whole shares (rounded up to the nearest whole share) having a Fair Market Value equal to the amount of any tax withholding required. Immediately prior to the closing date, there were outstanding under the 2011 Plan stock options to purchase 995,930 shares of CSI common stock and RSUs for 98,705 shares of CSI common stock. Immediately following the closing date, there were no equity incentive awards outstanding under the 2011 Plan or otherwise. Immediately prior to the closing date, the NEOs held outstanding stock options set forth below. As described above, based on the $7.15 per share Fair Market Value, the options were vested and either (1) net exercised and terminated or (2) terminated and cancelled . Named Executive Officer Grant Date Shares Granted Unvested Shares Shares Vested Exercise Price Roger H.D. Lacey 3/17/2015 22,655 — 22,655 $ 11.65 4/3/2015 6,100 — 6,100 $ 11.09 4/3/2015 18,850 — 18,850 $ 11.09 5/21/2015 25,050 — 25,050 $ 11.05 1/25/2016 16,667 — 16,667 $ 7.34 3/15/2016 41,250 — 41,250 $ 6.85 3/31/2017 15,456 — 15,456 $ 4.40 3/31/2017 40,794 — 40,794 $ 4.40 3/9/2018 61,875 15,469 46,406 $ 3.61 12/12/2018 50,000 — 50,000 $ 2.55 3/28/2019 7,500 3,750 3,750 $ 2.64 5/6/2020 35,095 26,321 8,774 $ 5.39 Named Executive Officer Grant Date Shares Granted Unvested Shares Shares Vested Exercise Price Anita Kumar 5/6/2020 10,493 7,870 2,623 $ 5.39 11/24/2020 25,000 18,750 6,250 $ 4.45 Named Executive Officer Grant Date Shares Granted Unvested Shares Shares Vested Exercise Price Mark Fandrich 8/29/2016 20,000 — 20,000 $ 5.72 3/31/2017 19,900 — 19,900 $ 4.40 3/9/2018 29,150 7,287 21,863 $ 3.61 3/28/2019 12,660 6,330 6,330 $ 2.64 5/6/2020 18,849 14,137 4,712 $ 5.39 70 Named Executive Officer Grant Date Shares Granted Unvested Shares Shares Vested Exercise Price Scott Fluegge 3/17/2015 15,732 — 15,732 $ 11.65 3/15/2016 11,724 — 11,724 $ 6.85 3/15/2016 8,900 — 8,900 $ 6.85 5/25/2016 10,000 — 10,000 $ 6.55 3/31/2017 10,621 — 10,621 $ 4.40 3/9/2018 16,410 5,470 10,940 $ 3.61 3/28/2019 8,752 4,376 4,376 $ 2.64 5/6/2020 12,782 9,586 3,196 $ 5.39 Additionally, immediately prior to the closing date, the NEOs held outstanding RSUs as follows: Named Executive Officer RSUs Roger H.D. Lacey 20,444 Anita Kumar 11,735 Mark Fandrich 16,250 Scott Fluegge 11,122 LTI Plan and Awards The Compensation Committee also determined that all participants with outstanding LTI Awards would receive the benefit of these LTI Awards even though, as a condition of the E&S Sale Transaction, CSI was required to terminate the employment of certain of these participants immediately prior to the Closing Date and immediately prior to the Change in Control that occurred by virtue of the consummation of the E&S Sale Transaction. In accordance with the authority granted to the Compensation Committee by the LTI Plan, the Compensation Committee determined that each participant with an LTI Award outstanding as of the day immediately prior to the closing date of the E&S Sale Transaction would receive an amount equal to the LTI Award amount pro-rated based upon the number of days elapsed from the commencement of the three-year performance period in respect of such LTI Award and the closing date. The following table shows the aggregate amounts that were paid to the NEOs in respect of their respective LTI Awards: Aggregate Amount of Payment Named Executive Officer for LTI Awards Roger H.D. Lacey $ 48,911 Anita Kumar $ 14,479 Mark Fandrich $ 44,876 Scott Fluegge $ 30,792 Other Compensation In addition to participating in Company-wide plans providing health, dental and life insurance on the same basis as all of our other U.S.-based employees, the NEOs receive other compensation in various forms, primarily the following:  An annual contribution to the Company’s Employee Stock Ownership Plan and Trust (“ESOP”).  An annual matching contribution of up to 50% of each executive’s personal contribution to the Company’s 401(k) Plan up to the first 6% of the personal contribution.  A car allowance or company car.  In individual, unique circumstances, additional compensation to support an overseas assignment or travel to a residence away from the Company’s offices. ‎ The amount of this other compensation for our Named Executive Officers is presented in the column titled “All Other Compensation” under the “Summary of Executive Compensation Table” and the “Other Compensation Table.” 71 SUMMARY COMPENSATION TABLE The following table presents information regarding compensation earned in 2021 and 2020 for services as executive officers, by Roger H.D. Lacey the Company’s Chief Executive Officer until November 30, 2020 and Interim Chief Executive Officer effective August 1, 2021, Anita Kumar, the Company’s Chief Executive Officer beginning December 1, 2020 until August 1, 2021, Mark Fandrich, the Company’s Chief Financial Officer, and the other most highly compensated executive officer of the Company in 2021 (together referred to as the “Named Executive Officers” or “NEOs”). Non-Equity Stock Option Incentive Plan All Other Awards Awards Compensation Compensation Name and Principal Position Year Salary ($) Bonus ($) ($) (1) ($) (2) ($) (3) ($) (4) Total ($) Roger H.D. Lacey 2021 120,000 — — — 48,911 975,956 1,144,867 Executive Chair and Interim 2020 120,000 — 169,254 61,875 40,637 45,248 437,014 Chief Executive Officer (5) Anita Kumar 2021 172,308 — — — 14,479 466,254 653,041 President and Chief Executive 2020 198,250 — 65,077 61,780 4,433 17,130 346,670 Officer (6) Mark Fandrich 2021 265,860 — — — 44,876 484,316 795,052 Chief Financial Officer 2020 265,860 25,000 88,204 33,232 19,145 23,367 454,808 Scott Fluegge 2021 225,400 — — — 30,792 309,227 565,419 Vice President of Information 2020 225,363 — 61,214 22,536 48,180 19,349 376,642 Technology and Digital Transformation (1) Represents stock earned under the Company’s Annual Bonus Plan and Long-Term Incentive Plan (“LTI Plan”) for the year indicated. The values expressed represent the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 and Item 402(r)(2)(iv) of Regulation S-K, using the assumptions discussed in Note 11, “Stock Compensation” in the notes to consolidated financial statements included in this Annual Report on Form 10-K for the year ended December 31, 2021. ‎ (2) The values expressed represent the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 and Item 402(r)(2)(iv) of Regulation S-K, using the assumptions discussed in Note 11, “Stock Compensation,” in the notes to consolidated financial statements included in this Annual Report on Form 10-K for the year ended December 31, 2021. ‎ (3) Represents amounts earned under the Company’s Short-Term Incentive plan for the year indicated. See “Non-Equity Incentive Plan Compensation Table” below. ‎ (4) See “Other Compensation Table” below. ‎ (5) Mr. Lacey was appointed as Interim Chief Executive Officer of the Company effective August 1, 2021. ‎ (6) Ms. Kumar served as the Chief Executive Officer of the Company until August 1, 2021. 72 Non-Equity Incentive Plan Compensation Table The following table provides a breakdown of information under the column “Non-Equity Incentive Plan Compensation” in the preceding Summary Compensation Table. Short-term Plans Long-term Plans Total Name Year ($) ($) ($) Mr. Lacey 2021 — 48,911 48,911 2020 — 40,637 40,637 Ms. Kumar 2021 — 14,479 14,479 2020 — 4,433 4,433 Mr. Fandrich 2021 — 44,876 44,876 2020 — 19,145 19,145 Mr. Fluegge 2021 — 30,792 30,792 2020 33,810 14,370 48,180 Other Compensation Table The following table provides a breakdown of information under the column “Other Compensation” above. Non-Elective Acceleration of Contributions to Contributions to Stock Options Defined CSI Defined and Restricted Contribution Plan Contribution Plan Severance Stock Units (1) Other Total Name Year ($) ($) ($) ($) ($) ($) Mr. Lacey 2021 — 5,843 — 938,363 31,750 975,956 2020 8,550 7,630 — — 29,068 45,248 Ms. Kumar 2021 — 4,333 241,342 197,584 22,995 466,254 2020 7,522 7,522 — — 2,086 17,130 Mr. Fandrich 2021 — 8,759 — 467,807 7,750 484,316 2020 8,550 9,750 — — 5,067 23,367 Mr. Fluegge 2021 — 9,131 — 292,346 7,750 309,227 2020 7,141 7,141 — — 5,067 19,349 (1) The amounts reported in this column represent the value of acceleration in connection with the closing of the E&S Sale Transaction of stock options and restricted stock units (RSUs) outstanding to our named executive officers under the 2011 Plan. The value of the unvested equity awards that would accelerate in connection with the closing of the E&S Sale Transaction is calculated as follows: (a) in the case of a CSI stock option, the product of (i) the excess, if any, of $7.15 (the value of a share of the CSI’s common stock on the closing date) over the exercise price per share of such stock option, multiplied by (ii) the number of shares of common stock subject to the unvested portion of such stock option; and (b) in the case of CSI RSU awards, the value of a share of the Company’s common stock ($7.15) multiplied by the number of shares of common stock subject to the RSU award. Outstanding Equity Awards at Fiscal Year-End There were no outstanding equity awards as of December 31, 2021. 2021 Options Exercised and Stock Vested The following table shows the stock options, stock awards and restricted stock grants that vested during 2021 for the Named Executive Officers. The value realized upon exercise of the options and the shares represented by the vesting of the RSUs is based on the closing price of our stock on the exercise date and the vesting date, respectively. 73 Option Awards Stock Awards Number of shares Value realized Number of shares Value realized acquired on exercise on exercise acquired on vesting on vesting Name (#) ($) (#) ($) Mr. Lacey 251,970 711,954 32,955 226,409 Ms. Kumar 35,493 85,943 16,098 111,641 Mr. Fandrich 100,559 276,798 28,240 191,009 Mr. Fluegge 79,189 161,476 19,354 130,870 POTENTIAL PAYMENTS UNDER CHANGE OF CONTROL As of December 31, 2021, we were a party to change of control agreements (“CIC Agreements”) with the following NEOs: Roger H.D. Lacey, Mark D. Fandrich and Scott Fluegge. The CIC Agreements provide for payment of severance compensation if there is a change in control of CSI and within 24 months following this change of control, there is either an involuntary termination of employment other than for cause, death, disability or retirement or a voluntary termination of employment for good reason (each a “Triggering Event”). The closing of the E&S Sale Transaction constituted a change of control under the CIC Agreements. We did not terminate the employment of any of Messrs. Lacey, Fandrich or Fluegge at the time of the closing of the E&S Sale Transaction and these NEOs continue to be employed by us as of the date of this Annual Report on Form 10-K. We do not expect to terminate the employment of Roger H.D. Lacey, Mark Fandrich or Scott Fluegge as they are expected to continue to serve in roles following the closing of the Pineapple Merger Transaction. The severance benefit is a specified multiple of the executive’s annual compensation at the date of the change of control, payable in a lump sum within 75 days following the date of the Triggering Event. The multiple of the executive’s annual compensation for our named executive officers is as follows: Mr. Lacey, 1.0 times; Mr. Fandrich, 1.5 times; and Mr. Fluegge, 1.0 times. Additionally, each executive will be entitled to receive medical and dental insurance and life insurance substantially in the form and expense to the executive as received by the executive on the date of the Triggering Event. The CIC Agreements provide that the payments made to the executive will be one dollar less than the amount which would cause all payments to the executive (including payments to the executive which are not included in the CIC Agreement) to be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code. Executive officers are not entitled to any gross-up payment under CIC Agreements for such excise taxes. ‎ The CIC Agreements include provisions requiring each executive to maintain confidentiality of information acquired during the period of employment, to refrain for a period of one year from competing with CSI or soliciting other CSI employees to leave their employment with us and to provide a release of all claims against CSI in exchange for the benefit paid pursuant to the CIC agreement. Assuming a change of control occurred on December 31, 2021, the following table presents amounts potentially payable to each of the Named Executive Officers, without and with a corresponding Triggering Event. The cash amount set forth below is cash severance CSI would be obligated to pay the NEOs in the form of a single lump-sum cash payment pursuant to the CIC Agreement. As noted above, there were no outstanding equity awards as of December 31, 2021. Name Reason for Payment Cash ‎ Severance ‎ ($) (1) Partial ‎ Vesting of ‎ Incentive ‎ Awards ‎ ($) (2) Vesting of ‎ Unvested ‎ Options (3) Total ($) Mr. Lacey Change of Control without a Triggering Event — — — — Change of Control with Triggering Event 812,182 — — 812,182 Mr. Fandrich Change of Control without a Triggering Event — — — — Change of Control with Triggering Event 957,973 — — 957,973 Mr. Fluegge Change of Control without a Triggering Event — — — — Change of Control with Triggering Event 464,049 — — 464,049 74 (1) The amounts in this column reflect the amount of cash severance and benefits the Company would be obligated to pay these individuals in the form of a single lump-sum cash payment pursuant to their CIC Agreements. (2) The amounts in this column reflect the estimated value of unvested Incentive Awards under the Company’s LTI Plan at December 31, 2021 that would become payable upon the occurrence of a change in control. No unvested Incentive Awards were outstanding at December 31, 2021. (3) The amount in this column represents the value of options, restricted stock units or other equity awards assuming vesting upon a change in control at December 31, 2021. There were no equity awards outstanding at December 31, 2021. DIRECTOR COMPENSATION The 2021 compensation of non-employee directors was as follows: (i) each director was paid an annual cash retainer of $20,000; (ii) the two committee chairs were each paid an additional $7,500 in cash; (iii) each non-chair committee member was paid an additional $5,000 in cash; and (iv) each director was paid an additional $25,000 in lieu of receiving a stock option award in 2021. The following table presents the 2021 cash and dollar value of stock options paid to each Company’s non-employee Board member. Fees Earned or All Other Paid in Cash Compensation (2) Total Name (1) ($) ($) ($) Richard A. Primuth 52,500 172,608 225,108 Randall D. Sampson 57,500 119,083 176,583 Steven C. Webster 55,000 148,856 203,856 Michael Zapata 50,000 22,101 72,101 (1) In addition to compensation as directors, the named directors serve in differing roles for which they receive separate compensation, including as a committee chair, committee member, and Board Secretary. See “The Board, Board Committees and Meetings” and “Board Leadership” above under “Corporate Governance.” (2) The amounts reported in this column represent the value of acceleration in connection with the closing of the E&S Sale Transaction of stock options and restricted stock units (RSUs) outstanding to our named executive officers under the 2011 Plan. The value of the unvested equity awards that would accelerate in connection with the closing of the E&S Sale Transaction is calculated as follows: (a) in the case of a CSI stock option, the product of (i) the excess, if any, of $7.15 (the value of a share of the CSI’s common stock on the closing date) over the exercise price per share of such stock option, multiplied by (ii) the number of shares of common stock subject to the unvested portion of such stock option; and (b) in the case of CSI RSU awards, the value of a share of the Company’s common stock ($7.15) multiplied by the number of shares of common stock subject to the RSU award. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Securities Authorized For Issuance Under Equity Compensation Plans The information included in Part II, Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities - Securities Authorized for Issuance Under Equity Compensation Plans, is incorporated herein by reference. Security Ownership of Certain Beneficial Owners and Management The following table sets forth ownership of the Company’s common stock by (i) each person known by the Company to own of record or beneficially 5% or more of the Company’s common stock, (ii) each director of the Company, (iii) each of the Named Executive Officers of the Company identified in Item 11 under Executive Compensation of this Form 10-K and (iv) all executive officers and directors of the Company as a group, in each case based upon information available as of March 1, 2022 (unless otherwise noted). Percentage ownership is based on 9,720,627 shares of CSI common stock outstanding as of March 1, 2022. Unless otherwise stated, the address of each person is 10900 Red Circle Drive, Minnetonka, MN 55343. 75 Number of Shares Percent of Name and Address of Beneficial Owner Beneficially Owned (1) Outstanding GAMCO Investors, Inc. (2) One Corporate Center Rye, NY 10580-1435 1,434,884 14.8% Renaissance Technologies LLC (3) 800 Third Avenue New York, NY 10022 540,463 5.6% Communications Systems, Inc. Employee Stock Ownership Plan and Trust (4) 517,348 5.3% Roger H.D. Lacey (5)(6) 168,521 1.7% Mark D. Fandrich (6) 69,943 * Scott Fluegge (6) 61,017 * Anita Kumar (6)(7) 29,486 * Richard A. Primuth (5) 50,270 * Randall D. Sampson (5)(8) 1,252,499 12.9% Steven C. Webster (5) 25,819 * Michael R. Zapata (5) 3,091 * All current executive officers and directors as a group (8 persons) 1,664,511 17.1% *Less than one percent (1) There are no options, restricted stock units or other rights outstanding to any of the CSI directors or executive officers as of March 1, 2022. ‎ Includes the following number of shares allocated to the accounts of the following participants in the CSI Employee Stock Ownership Plan and Trust (ESOP) as of March 1, 2022: Mr. Lacey, 9,630 shares; Mr. Fandrich, 8,141 shares; Mr. Fluegge, 11,110 shares; Ms. Kumar, 7,331 shares; and all current directors and executive offers as a group, 38,298 shares. ‎ (2) Based on Amendment No. 21 to Schedule 13D filed on January 12, 2022 in which the reporting persons disclose the following beneficial ownership as of January 12, 2022: Gabelli Funds, LLC, 297,200 shares sole voting and dispositive power; GAMCO Asset Management Inc., 771,324 shares sole voting and dispositive power; Teton Advisors, Inc., 342,600 shares sole voting and dispositive power; MJG Associates, Inc., 8,760 shares sole voting and dispositive power; and Gabelli Foundation, Inc., 15,000 shares sole voting and dispositive power. ‎ (3) Based on Amendment No. 3 to Schedule 13G filed by Renaissance Technologies LLC on February 11, 2022 reporting sole voting power over 540,463 shares and sole dispositive power over 630,983 shares as of December 31, 2021. ‎ (4) Based on Amendment No. 8 to Schedule 13G filed by the CSI ESOP on February 14, 2022 reporting ownership as of December 31, 2021. Messrs. Roger H.D. Lacey, Randall D. Sampson and Mark D. Fandrich serve as Trustees of the CSI ESOP, and disclaim beneficial ownership of the shares held by the CSI ESOP, except for shares allocated to their respective accounts. ‎ (5) Currently serves as a director of Communications Systems, Inc. ‎ (6) Named executive officer of Communications Systems, Inc. ‎ 76 (7) Ms. Kumar’s employment was terminated effective August 1, 2021 in connection with the closing of the E&S Sale Transaction. Information based on Ms. Kumar’s Form 4 filed on August 5, 2021 and CSI records. ‎ (8) Based on Amendment No. 1 to Schedule 13G filed on February 14, 2022 by Mr. Sampson reporting his beneficial ownership as of December 31, 2021, as well as CSI records. As of March 1, 2022, Mr. Sampson has or shares voting and dispositive power over: (i) 51,205 shares of common stock owned by Mr. Sampson individually; (ii) 25,349 shares of common stock owned jointly by Mr. Sampson and his spouse; (iii) 380,370 shares of common stock held by the Marian Arlis Sampson Revocable Trust, of which Mr. Sampson is the sole trustee; (iv) 37,722 shares of common stock held by the Marian Sampson IRA, of which Mr. Sampson is an attorney-in-fact authorized to act alone and Ms. Sampson retains authority to act on behalf of the Marian Sampson IRA; (v) 681,334 shares of common stock held by Sampson Family Real Estate Holdings, LLC, of which Mr. Sampson is the sole manager; and (vi) 76,519 shares of common stock held by the Sampson Family Foundation, a charitable foundation of which Mr. Sampson is one of five directors. The two officers of the Sampson Family Foundation have the authority to vote and dispose of the shares of common stock held by the Sampson Family Foundation. Mr. Sampson is not an officer of the Sampson Family Foundation. Mr. Sampson disclaims beneficial ownership of all of the shares of CSI common stock except those shares he holds individually or jointly with his spouse. Mr. Sampson is not a participant in the CSI ESOP. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Since the beginning of 2021, we have not entered into any transaction and there are no currently proposed transactions, in which CSI was or is to be a participant and the amount involved exceeds the lesser of $120,000 or one percent of the average of CSI’s total assets at year end for the last two completed fiscal years and in which any related person had or will have a direct or indirect material interest. The Company’s Board has adopted Governance Guidelines that include provisions with respect to conflicts of interest. These Guidelines describe “conflict of interest” as a situation in which a director’s personal interest, including an immediate family member interest, is adverse to, or may appear to be adverse to, the interests of the Company. The Guidelines provide that any situation that involves, or may reasonably be expected to involve, a conflict of interest with the Company, must be disclosed promptly to the Chief Executive Officer, the Chairman, and the Company’s primary legal counsel. If the Company wishes to proceed with a transaction involving a potential conflict of interest, the Board would intend to seek prior approval from the Audit & Finance Committee to ensure the transaction is beneficial to the Company and the terms of the transaction are fair to the Company. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES Independent Registered Public Accounting Firm Fees and Services The following is a summary of the fees billed to the Company by Baker Tilly US, LLP for professional service for the year ended December 31, 2021 and 2020. Fee Category 2021 2020 Audit Fees $ 288,516 $ 204,400 Audit-Related Fees 31,500 — Tax Fees — — All Other Fees — — Total Fees $ 320,016 $ 204,400 Audit Fees . This category consists of fees billed for professional services rendered for the audit of the Company’s annual financial statements and review of financial statements included in our quarterly reports. Audit-Related Fees . This category consists of fees billed for assurance and related services, such as the Company’s employee benefit plan audits that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not otherwise reported under “Audit Fees.” Tax Fees. This category consists of fees billed for professional services for tax compliance, tax advice and tax planning. Assistance regarding federal and state tax compliance and acquisitions are provided to the Company by RSM US LLP. All Other Fees . All other fees are fees for products and services other than those listed above. 77 Audit & Finance Committee Pre-approval Policies and Procedures In addition to approving the engagement of the independent registered public accounting firm to audit the Company’s consolidated financial statements, the policy of the Audit & Finance Committee is to approve all use of the Company’s independent registered public accounting firm for non-audit services prior to any such engagement. To minimize relationships that could appear to impair the objectivity of the independent registered public accounting firm, the policy of the Committee is to restrict the non-audit services that may be provided to the Company by the Company’s independent registered public accounting firm primarily to tax services, merger and acquisition due diligence and integration services, and any other services that can clearly be designated as “non-audit” services. All of the services described above for 2021 and 2020 were pre-approved by the Audit & Finance Committee before Baker Tilly US, LLP was engaged to render the services. ‎ 78 PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) (1) Consolidated Financial Statements The following Consolidated Financial Statements of Communications Systems, Inc. and subsidiaries appear at pages 31 to 58 herein:  Report of Independent Registered Public Accounting Firm  Consolidated Balance Sheets as of December 31, 2021 and 2020  Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the years ended December 31, 2021 and 2020  Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2021  Consolidated Statements of Cash Flows for the years ended December 31, 2021 and 2020  Notes to Consolidated Financial Statements ‎ (a) (2) Consolidated Financial Statement Schedules The schedules are omitted as the required information is inapplicable or the information is presented in the consolidated financial statements or related notes. (a) (3) Exhibits Regulation S-K Reference Title of Document Location 2.1 # Agreement and Plan of Merger, dated March 1, 2021, by and among Communications Systems, Inc., Helios Merger Co., Pineapple Energy LLC, Lake Street Solar LLC, and Randall D. Sampson Filed as Exhibit 2.1 to the Form 8-K dated March 1, 2021. 2.2 # Asset Purchase Agreement dated March 11, 2020, by and among Oldcastle Infrastructure, Inc., Suttle, Inc. and Communications Systems, Inc. Filed as Exhibit 10.1 to Form 8-K dated March 11, 2020. 3.1 Articles of Incorporation, as amended Filed as Exhibit 3.1 to the Form 10-Q for the quarter ended June 30, 2014. 3.2 Bylaws, as amended through April 10, 2020 Filed as Exhibit 3.2 to the Form 10-Q for the quarter ended March 31, 2020. 4.1 Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 Filed as Exhibit 4.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. 4.2 Form of Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock of Communications Systems, Inc. Filed as Exhibit 4.1 to the Registration Statement on Form S-3 filed on February 22, 2022 (SEC File No. 333-262893). 4.3 Form of Communications Systems, Inc. Warrant to be issued to the PIPE Investors Filed as Exhibit 4.2 to the Form 8-K dated September 14, 2021. 4.4 Registration Rights Agreement between Communications Systems, Inc. and PIPE Investors Filed as Exhibit 4.3 to the Form 8-K dated September 14, 2021. 10.1 * Employee Stock Ownership Plan and Trust, effective as of January 1, 2009 Filed as Exhibit 10.3 to the Form 10-K for the year ended December 31, 2011 (2011 Form 10-K) and incorporated herein by reference. 10.2 * First Amendment, dated October 21, 2011, to the Communications Systems, Inc. Employee Stock Ownership Plan and Trust. Filed as Exhibit 10.3.1 to the 2011 Form 10-K and incorporated herein by reference. 10.3 * Third Amendment, dated December 14, 2012 to the Communications Systems, Inc. Employee Stock Ownership Plan and Trust. Filed as Exhibit 10.1 to the Form 8-K dated December 14, 2012 and incorporated herein by reference. 10.4 * Fourth Amendment, dated January 1, 2015 to the Communications Systems, Inc. Employee Stock Ownership Plan and Trust Filed as Exhibit 10.3.3 to the Form 10-K for the year ended December 31, 2014 and incorporated herein by reference. 10.5 * 1990 Employee Stock Purchase Plan, as amended May 21, 2015 Filed as Appendix B to the Proxy Statement dated April 10, 2015 for the 2015 Annual Meeting of Shareholders and incorporated herein by reference. 79 10.6 * Form of Communications Systems, Inc. Change of Control Agreement for Executives Filed as Exhibit 10.13 to the 2018 Form 10-K and incorporated herein by reference. 10.7 Voting Agreement, dated March 1, 2021, by and among Communications Systems, Inc., Pineapple Energy LLC, and the holders of capital stock of Communications Systems, Inc. Filed as Exhibit 10.1 to the Form 8-K dated March 1, 2021. 10.8 Amended and Restated Securities Purchase Agreement dated as of September 15, 2021, between Communications Systems, Inc. and the PIPE Investors Filed as Exhibit 10.1 to the Form 8-K dated September 14, 2021. 10.9 Form of Contingent Value Rights Agreement (December 16, 2021) Filed as Exhibit 10.1 to the Form 8-K dated December 16, 2021. 10.1 Form of Lock-up Agreement by and among Communications Systems, Inc., certain directors, officers and shareholders of Communications Systems, Inc., and the PIPE Investors Filed as Exhibit 10.2 to the Form 8-K dated June 28, 2021. 10.11 # Asset Purchase Agreement dated March 1, 2021 by and among Hawaii Energy Connection, LLC and E-Gear, LLC as Seller, Steven P. Godmere as Seller Representative, Pineapple Energy LLC as Buyer. Filed as Exhibit 10.13 to Registration Statement on Form S-4 filed on November 12, 2021 (File No. 333-260999) 10.12 Loan and Security Agreement dated as of December 11, 2020 by and between Pineapple Energy LLC as Borrower and Hercules Capital, Inc. as Lender and Agent. Filed as Exhibit 10.14 to Registration Statement on Form S-4 filed on November 12, 2021 (File No. 333-260999) 10.13 Working Capital Loan and Security Agreement dated as of January 8, 2021 by and between Pineapple Energy LLC as Borrower and Hercules Capital, Inc. as Lender and Agent. Filed as Exhibit 10.15 to Registration Statement on Form S-4 filed on November 12, 2021 (File No. 333-260999) 10.14 * Employment Agreement dated February 10, 2021 by and between Pineapple Energy LLC and Kyle Udseth. Filed as Exhibit 10.17 to Registration Statement on Form S-4 filed on November 12, 2021 (File No. 333-260999) 10.15 # Amendment No. 1 to Asset Purchase Agreement dated December 16, 2021 by and among Hawaii Energy Connection, LLC and E-Gear, LLC as Seller, Steven P. Godmere as Seller Representative, Pineapple Energy LLC as Buyer. Filed as Exhibit 10.18 to Registration Statement on Form S-4/A filed on January 26, 2022 (File No. 333-260999) 10.16 # Consent and Amendment to Loan and Security Agreement dated as of December 16, 2021 by and between Pineapple Energy LLC as Borrower and Hercules Capital, Inc. as Lender and Agent. Filed as Exhibit 10.19 to Registration Statement on Form S-4/A filed on January 26, 2022 (File No. 333-260999) 10.17 First Amendment to Working Capital Loan and Security Agreement dated as of December 16, 2021 by and between Pineapple Energy LLC as Borrower and Hercules Capital, Inc. as Lender and Agent. Filed as Exhibit 10.20 to Registration Statement on Form S-4/A filed on January 26, 2022 (File No. 333-260999) 10.18 Subscription Agreement dated as of December 16, 2021 by and between Pineapple Energy LLC and Lake Street Solar LLC. Filed as Exhibit 10.21 to Registration Statement on Form S-4/A filed on January 26, 2022 (File No. 333-260999) 10.19 Subscription Agreement dated as of December 16, 2021 by and between Pineapple Energy LLC and Hercules Capital, Inc. Filed as Exhibit 10.22 to Registration Statement on Form S-4/A filed on January 26, 2022 (File No. 333-260999) 21 Subsidiaries of the Registrant Filed herewith. 23.1 Consent of Independent Registered Public Accounting Firm Filed herewith. 24 Power of Attorney Included in signatures at page 82 . 31.1 Certification of Chief Executive Officer Filed herewith. 31.2 Certification of Chief Financial Officer Filed herewith. 32 Certification under USC § 1350 Filed herewith. 80 101 .INS Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) 101 .SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101 .DEF Inline XBRL Taxonomy Definition Linkbase Document 101 LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101 .PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) # Certain of the exhibits and schedules to this exhibit have been omitted in accordance with Regulation S-K Item 601. CSI agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request. *Indicates management contract or compensatory plan or arrangement. ‎ ITEM 16. FORM 10-K SUMMARY ‎ Not applicable. ‎ 81 SIGN ATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Communications Systems, Inc By /s/ Roger H.D. Lacey Roger H.D. Lacey Date: March 14, 2022 Interim Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated: Each person whose signature appears below constitutes and appoints ROGER H.D. LACEY and MARK D. FANDRICH as their true and lawful attorneys-in-fact and agents, each acting alone, with full power of substitution and resubstitution, for them and in their name, place and stead, in any and all capacities, to sign any or all amendments to this Annual Report on Form 10-K and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, each acting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as they might or could do in person, hereby ratifying and confirming all said attorneys-in-fact and agents, each acting alone, or their substitute or substitutes, may lawfully do or cause to be done by virtue thereof. Signature Title Date /s/Roger H.D. Lacey Interim Chief Executive Officer (Principal Executive March 14, 2022 Roger H.D. Lacey Officer), Executive Chair of the Board, Director /s/Mark D. Fandrich Chief Financial Officer (Principal March 14, 2022 Mark D. Fandrich Financial Officer) /s/Kristin A. Hlavka Corporate Controller (Principal Accounting Officer) March 14, 2022 Kristin A. Hlavka /s/Randall D. Sampson Director March 14, 2022 Randall D. Sampson /s/Richard A. Primuth Director March 14, 2022 Richard A. Primuth /s/Steven C. Webster Director March 14, 2022 Steven C. Webster /s/Michael R. Zapata Director March 14, 2022 Michael R. Zapata 82