THE PECK COMPANY HOLDINGS, INC. Item 8.01. Other Events.
Supplemental Disclosures to the Proxy Statement/Prospectus
As previously announced, onAugust 10, 2020 , Sunworks, Inc., aDelaware corporation ("Sunworks"), entered into an Agreement and Plan of Merger (the "Merger Agreement") with ThePeck Company Holdings, Inc. , aDelaware corporation ("Peck"), andPeck Mercury, Inc. , aDelaware corporation and direct wholly owned subsidiary of Peck ("Merger Sub"), pursuant to which Merger Sub will merge with and into Sunworks, with Sunworks continuing as the surviving corporation (the "Merger").
This Current Report on Form 8-K (this "Form 8-K") is being filed to update and supplement the Joint Proxy Statement/Prospectus (the "Joint Proxy Statement/Prospectus") (1) included in the Registration Statement on Amendment No. 1 to Form S-4, File No. 333-249183 (the "Registration Statement"), filed by Peck with theSecurities and Exchange Commission (the "SEC") onOctober 14, 2020 and declared effective by theSEC onOctober 15, 2020 , (2) filed by Peck with theSEC as a prospectus onOctober 15, 2020 , (3) filed by Sunworks with theSEC as a definitive proxy statement on Schedule 14A onOctober 15, 2020 , and (4) mailed by Peck to its stockholders commencing onOctober 15, 2020 . The information contained in this Form 8-K is incorporated by reference into the Joint Proxy Statement/Prospectus. Terms used in this Form 8-K, but not otherwise defined, shall have the meanings ascribed to such terms in the Joint Proxy Statement/Prospectus. Following the announcement of the Merger Agreement and as of the date of this Form 8-K, eight lawsuits have been filed by alleged stockholders of Sunworks challenging the Merger.
Peck, Sunworks and the other named defendants deny that they have violated any laws or breached any duties to Peck's or Sunworks' stockholders and believe that these lawsuits are without merit and that no supplemental disclosure is required to the Joint Proxy Statement/Prospectus under any applicable law, rule or regulation. However, solely to eliminate the burden and expense of litigation and to avoid any possible disruption to the Merger that could result from further litigation, Peck and Sunworks are providing the supplemental disclosures set forth in this Form 8-K. Nothing in this Form 8-K shall be deemed an admission of the legal necessity or materiality under applicable laws of any of the disclosures set forth herein. If you have not already submitted a proxy for use at the Peck virtual special meeting, you are urged to do so promptly. This Form 8-K does not affect the validity of any proxy card or voting instructions that Peck stockholders may have previously received or delivered. No action is required by any Peck stockholder who has previously delivered a proxy or voting instructions and who does not wish to revoke or change that proxy or voting instructions. Supplemental Disclosures The following supplemental disclosures should be read in conjunction with the Joint Proxy Statement/Prospectus, which should be read in its entirety. To the extent that information in the supplemental disclosures differs from or updates information contained in the Joint Proxy Statement/Prospectus, the information in the supplemental disclosures shall supersede or supplement the information in the Joint Proxy Statement/Prospectus. Defined terms used but not defined in the supplemental disclosures have the meanings set forth in the Joint Proxy Statement/Prospectus. Paragraph and page references used herein refer to the Joint Proxy Statement/Prospectus before any additions or deletions resulting from the supplemental disclosures. The supplemental disclosures speak only as of the date on which the information contained therein was prepared and provided to the Board of Directors of Sunworks (the "Sunworks Board") in connection with, and at the time of, the Sunworks Board's evaluation of the Merger (including with respect to any forecasts, projections, or other forward-looking statements contained in the supplemental disclosures with respect to Sunworks), and no such information has been updated or otherwise revised to reflect subsequent events since such date. The inclusion of financial projections in the Joint Proxy Statement/Prospectus (the "Projections") should not be regarded as an indication that any of Sunworks or its respective affiliates, advisors or representatives considered such Projections to be predictive of actual future events, and the Projections should not be relied upon as such. The Projections constitute forward-looking statements and no assurances can be given that the assumptions made in preparing such Projections will accurately reflect future conditions. Accordingly, there can be no assurance that the prospective results will be realized or that actual results will not be significantly higher or lower than estimated. None of Sunworks or its respective affiliates, advisors, officers, directors, partners or representatives undertake any obligation to update or otherwise revise or reconcile these Projections to reflect circumstances existing after the date the Projections were generated or to reflect the occurrence of future events even in the event that any or all of the assumptions underlying the Projections are shown to be in error, in each case, except as may be required under applicable law. Sunworks advised the recipients of the Projections that its internal financial forecasts upon which the Projections were based are subjective in many respects. While presented with numerical specificity, the Projections were based on numerous variables and assumptions known to Sunworks at the time of their preparation. These variables and assumptions are inherently uncertain and many are beyond the control of Sunworks. Unless stated otherwise, the revised text in the supplemental disclosures is underlined to highlight the supplemental information being disclosed.
1. The following disclosure replaces the second and third full paragraphs on page
17 of the Joint Proxy Statement/Prospectus. The modified text is underlined
below:
Litigation Relating to the Merger (page 161)
OnOctober 12, 2020 , a putative class action complaint was filed in theCourt of Chancery in theState of Delaware by a purported stockholder of Sunworks regarding the Merger against each of the members of the Sunworks Board (the "First Complaint"). OnOctober 15, 2020 , a second complaint was filed in theUnited States District Court in the District ofDelaware by a purported stockholder of Sunworks regarding the Merger against Sunworks, Peck, Merger Sub and each of the members of the Sunworks Board (the "Second Complaint"). OnOctober 19, 2020 , a third complaint was filed in theUnited States District Court in theSouthern District ofNew York by a purported stockholder of Sunworks regarding the Merger against Sunworks and each of the members of the Sunworks Board (the "Third Complaint"). OnOctober 20, 2020 , a fourth complaint was filed in theUnited States District Court in theSouthern District ofNew York by a purported stockholder of Sunworks regarding the Merger against Sunworks and each of the members of the Sunworks Board (the "Fourth Complaint"). OnOctober 21, 2020 , a fifth complaint was filed in theUnited States District Court in the District ofNew Jersey by a purported stockholder of Sunworks regarding the Merger against Sunworks and each of the members of the Sunworks Board (the "Fifth Complaint"). OnOctober 22, 2020 , a sixth complaint was filed in theUnited States District Court in theEastern District ofCalifornia by a purported stockholder of Sunworks regarding the Merger against Sunworks, Peck, Merger Sub, and each of the members of the Sunworks Board (the "Sixth Complaint"). OnOctober 23, 2020 , a seventh complaint was filed in theUnited States District Court in theEastern District ofCalifornia by a purported stockholder of Sunworks regarding the Merger against Sunworks and each of the members of the Sunworks Board (the "Seventh Complaint"). OnOctober 23, 2020 , an eighth complaint was filed in theUnited States District Court in theNorthern District ofCalifornia by a purported stockholder of Sunworks regarding the Merger against Sunworks and each of the members of the Sunworks Board (the "Eighth Complaint" and together with the First, Second, Third, Fourth, Fifth, Sixth, and Seventh Complaints, the "Complaints"). The First and Sixth Complaints contend, among other things, that (i) the consideration to be paid to Sunworks stockholders pursuant to the Merger is inadequate and (ii) the Registration Statement on Form S-4 filed with the Commission by Peck onOctober 1, 2020 , and serving as the preliminary Joint Proxy Statement/Prospectus (the "Original S-4"), contained materially incomplete and misleading information regarding the Merger. The First Complaint further alleges that in facilitating the Merger for the alleged inadequate consideration and the dissemination of the preliminary Joint Proxy Statement/Prospectus, each member of the Sunworks Board breached his or her fiduciary duties. The Second Complaint contends, among other things, that the Original S-4 omits material information regarding the Merger, rendering it false and misleading. The Third, Fourth, Fifth, Sixth, Seventh, and Eighth Complaints contend, among other things, that the definitive proxy statement on Schedule 14A, filed with the Commission by Sunworks onOctober 15, 2020 (the "Proxy Statement"), omits material information regarding the Merger, rendering it false and misleading.
Each of the Complaints seeks injunctive relief and an award of plaintiff's costs, including reasonable attorneys' fees and experts' fees, and other remedies.
For a more detailed description of litigation in connection with the Merger, see the section entitled "The Merger-Litigation Relating to the Merger" beginning on page 161 of this Joint Proxy Statement/Prospectus.
2. The following disclosure replaces the paragraph beginning at the end of page
131 and continuing onto page 132 of the Joint Proxy Statement/Prospectus. The
modified text is underlined below:
Opinion of Sunworks' Financial Advisor
Sunworks retainedHolthouse Carlin & Van Trigt LLP ("HCVT") to act as its financial advisor in connection with the proposed Merger. HCVT is a nationally recognized advisory firm which is engaged in the valuation of businesses and securities in connection with mergers and acquisitions and valuations for corporate and other purposes. Sunworks selected HCVT to act as Sunworks' financial advisor in connection with the Merger on the basis of HCVT's experience in transactions similar to the Merger and its reputation in the investment community. Sunworks first initiated conversations regarding engaging HCVT onMarch 20, 2020 . Sunworks subsequently engaged HCVT to conduct a quality of earnings analysis of Peck onJuly 6, 2020 and further engaged HCVT to render an opinion regarding whether the Exchange Ratio is fair to the Sunworks' stockholders from a financial point of view onJuly 20, 2020 . HCVT had no previous working relationships with Sunworks prior to these two engagements.
3. The following table replaces the table on page 137 of the Joint Proxy
Statement/Prospectus. The modified text is underlined below:
Enterprise
Market Value of Equity(3) Value(4)
Per Share Enterprise Value /
Price(2)
($ in
Selected Public Companies(1) ($ in millions) millions) Revenue EBITDA Backlog
Ameresco, Inc. 30.00 1,463 2,182
$ $ $ 2.29x 22.6x 2.14x
43.77 685 325 Argan, Inc.
1.20x NMF 0.25x
Canadian Solar Inc. 23.77 1,428 2,699 0.85x 5.5x NA First Solar, Inc. 65.73 7,013 5,931 1.98x 11.1x NA Gibraltar Industries, Inc. 61.07 1,996 1,899 1.74x 14.1x 8.71x IES Holdings, Inc. 24.10 505 494 NMF NMF 0.84x Infrastructure and Energy Alts, Inc. 4.06 91
488
0.30x 4.0x
0.24x
Quanta Services, Inc. 42.78 5,988 7,131
0.61x 8.4x 0.48x
1.63 78 224
1.65x 18.1x NA
Solar Integrated Roofing Corp 0.04 13 15 NMF NMF NA SPI Energy Co., Ltd. 1.59 88 110 NMF NMF NA Sunnova Energy International Inc.*
27.50 2,450 4,316
30.21x NMF 3.32x SunPower Corporation
11.50 2,049 2,739
1.46x 27.3x 4.81x
46.40 5,583 9,042 Sunrun Inc.*
10.55x NMF 1.39x
The Peck Company Holdings, Inc. 4.52 24 32
NMF NMF 1.08x
1.87 26 43
Vivo Power International PLC NMF NMF NA
* Outliers excluded from summary data
NA = Not Available; NMF = No Meaningful Figure; projections per analysts' estimates or actuals, if available
Note: On
Note: Ameresco, Inc., Sunnova Energy International, Inc.,Gibralter Industries, Inc. , SunPower Corporation and Vivint Solar Inc. reported Q2'2020 results onAugust 4-5, 2020 , and therefore the figures above reflect actual Q2'2020 results.
1 No company used in this analysis for comparative purposes is identical to
Sunworks.
2 Based on closing prices as of
3 Based on reported fully-diluted shares outstanding.
4 Enterprise Value equals equity market value + debt outstanding + preferred
stock + minority interests - cash and cash equivalents.
4. The following table replaces the first table on page 138 of the Joint Proxy
Statement/Prospectus. The modified text is underlined below:
Enterprise Value /
Selected Public
Companies Analysis
Revenue EBITDA Backlog
High
2.29x 27.3x 4.81x
Mean 1.34x 13.9x 1.62x
Median
1.46x 12.6x 1.08x
Low
0.30x 4.0x 0.24x
5. The following table replaces the second table on page 138 of the Joint Proxy
Statement/Prospectus. The modified text is underlined below:
Market Value of
Per Share Equity Enterprise Value Enterprise Value /
Price ($ in millions) ($ in millions) Revenue EBITDA Backlog
Sunworks, Inc. (Implied
Multiples)* $ 1.38 $ 23 $ 21 0.39x NMF 0.58x
* Implied multiples based on market capitalization plus net debt as of the most
recent public filing (Q1'2020) relative to non-public actual financials for the
latest twelve months ended Q2'2020.
6. The following disclosure replaces the second to last paragraph on page 138 of
the Joint Proxy Statement/Prospectus. The modified text is underlined below:
Based on the selected public companies analysis performed by HCVT described above, it derived a range of multiples of 0.20x to 0.25x based on the (i) enterprise value to projected revenue multiples based on the last 12 months endedJune 30, 2020 and (ii) enterprise value to reported backlog multiples as of the last reported backlog date, respectively. The derived range of multiples gives consideration to size, profitability, industry segment, intellectual property and other factors of comparable companies. Using these various factors, HCVT concluded that Selected Public Companies with lower revenue and backlog multiples were more comparable to Sunworks than Selected Public Companies with higher revenue and backlog multiples. Based on the foregoing analysis, HCVT derived implied per share reference ranges from its selected public companies analysis of (x)$0.72 to$0.87 per share, based on the projected revenue multiples and (y)$0.54 to$0.65 per share, based on the latest backlog multiples. The foregoing analysis indicated that the implied per share consideration range derived by HCVT (as further described in the Section titled "Implied Range of Per Share Consideration") was greater than the implied per share reference range indicated by the backlog multiples of the Selected Public Companies and within the implied per share reference range indicated by the projected revenue multiples of the Selected Public Companies.
7. The following table replaces the table on page 139 of the Joint Proxy
Statement/Prospectus. The modified text is underlined below:
Transaction Value(1) /
Acquiror Revenue
Announced Target EBITDA
07/06/2020 Vivint Solar, Inc.* Sunrun Inc. (NasdaqGS:RUN)
(NYSE:VSLR) 8.05x
(29.9)x
08/06/2019 Gruppo Green Power Alperia S.p.A.
S.p.A. (BIT:GGP) 0.63x
19.7x
02/27/2019 The Peck Company, Jensyn Acquisition Corp.
Inc. (NasdaqCM:JSYN) 1.13x
9.1x
12/17/2018 Sunden Co., Ltd. Recomm Co., Ltd.
(JASDAQ:3323) 0.44x
NA
08/23/2018 SolarBOS, Inc. Gibraltar Industries, Inc.
(NasdaqGS:ROCK) 0.42x
NA
12/04/2017 NAPEC Inc. Oaktree Capital Management, 0.74x
L.P.
9.8x
08/19/2016 Voltalia Portugal, Voltalia SA (ENXTPA:VLTSA)
S.A. 0.06x
4.3x
06/21/2016 Tesla Energy Tesla, Inc. (NasdaqGS:TSLA)
Operations, Inc.* 11.90x
(11.7)x
5/6/2016(2) Commonwealth Beroa Corporation LLC
Dynamics, Inc. 0.12x
NA
03/07/2016 Service Experts LLC Enercare Solutions Inc. 0.78x
NA
02/24/2016 PowerSecure The Southern Company
International, Inc. (NYSE:SO) 0.96x
18.7x
* Outliers and negative multiples excluded from summary data
NA = Not Available; NMF = No Meaningful Figure; EBITDA = Earnings Before Interest, Taxes, Depreciation and Amortization
Note: Transactions study based on announced and completed, controlling interest
acquisitions greater than
Note: Transactions with announcements dates between 2016 and the Opinion Reference Date for which purchase price multiples were available were considered.
Note: Target companies were required to have SIC codes of 15, 16, 36, 49 or 50.
Note: No transaction used in this analysis for comparative purposes is identical to the Merger.
Note: Based on reported metric for the most recent LTM period prior to the announcement of the transaction.
(1) Transaction value refers to the implied enterprise value of target company,
based on the announced transaction equity price and other public information
available at the time of the announcement.
(2) Purchase consideration includes an earnout of $3.9 million .
Sources: Capital IQ, public filings, earnings transcripts, and "heard-on-the-street."
8. The following disclosure replaces the paragraph beginning at the end of page
139 and continuing onto page 140 and the first full paragraph of page 140 of
the Joint Proxy Statement/Prospectus. The modified text is underlined below:
Based on the selected precedent M&A transactions analysis performed by HCVT described above, it derived a range of multiples of 0.15x to 0.20x based on the transaction value to revenue multiples based on the most recent 12 month period prior to the announcement of the Merger. HCVT used the foregoing range of multiples based on its professional judgement giving consideration to a number of quantitative and qualitative factors, including size, profitability, industry segment, intellectual property and other factors of comparable companies. Using these various factors HCVT concluded that selected precedent M&A transactions with lower revenue multiples were more comparable to Sunworks than transactions with higher revenue multiples. Based on the foregoing analysis, HCVT derived an implied per share reference range from its selected precedent M&A transactions analysis of$0.60 to$0.76 per share. The foregoing analysis indicated that the implied per share transaction range derived by HCVT (as further described in the Section titled "Implied Range of Per Share Consideration") was within the . . .
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