Peck Company (PECK) to Acquire Sunworks (SUNW) via Share Exchange

The Peck Company Holdings, Inc. (NASDAQ: PECK) ( “Peck”), a leading commercial solar engineering, procurement and construction (EPC) company and Sunworks, Inc. (NASDAQ: SUNW) (“Sunworks”), a provider of solar power solutions for agriculture, commercial and industrial (“ACI”), public works and residential markets, today announced that they have entered into a definitive agreement under which Peck will acquire Sunworks in an all-stock transaction, pursuant to which each share of Sunworks common stock will be exchanged for 0.185171 shares of Peck common stock (subject to certain adjustments). Assuming no adjustments, Sunworks’ stockholders would receive an aggregate of approximately 3,079,207 shares of Peck common stock, representing approximately 36.54% of Peck common stock outstanding after the merger.

Merger Rationale and Highlights

• Combination creates a national leader with a coast-to-coast presence poised to capitalize on significant cost synergies.
• Improves scale and strengthens national presence, with pro forma revenue of $88 million if the companies had been combined in 2019, and a combined backlog of $76.8 million if the companies had been combined as of June 30, 2020.
• Management has identified approximately $6 million in anticipated annualized cost synergies, including supply chain management leverage, redundant public company costs and various operating expenses.
• The transaction is expected to be accretive to earnings and free cash flow after integration synergies have been implemented.
• Combined company will have significantly expanded addressable market to leverage Sunworks’ core capabilities in agriculture and public works.
• Combination leverages Peck’s strategic partnership with GreenBond Advisors to provide project development and financing to fuel growth and solar project ownership improving the conversion of Sunworks’ pipeline and expanding its addressable market.
• Peck and Sunworks installed a combined 62,973kW in 2019, which would rank 41st overall and would be the 16th largest EPC contractor based on the latest Sun Power World ranking list.

Management Commentary

Jeffrey Peck, Chairman of the Board and Chief Executive Officer of Peck, commented, “This is a transformational combination, leveraging the respective strengths of the two organizations and creating a national leader in the fast-growing and resilient solar energy industry. It provides Peck expansion, scale, an enhanced financial profile and a stronger platform from which we can continue to build more solar projects. Our integration with Sunworks will extend our presence to the west coast and broaden our offerings to agriculture and public works. The transaction solidifies our three-pronged growth strategy that we announced a year ago when we listed on Nasdaq through a SPAC merger. Since we have been public, we (1) delivered organic growth of revenue from $16 million to $28 million in the first year, (2) partnered with GreenBond Advisors to access capital that provides EPC revenue as well as asset ownership in the solar projects we build for the partnership, and now (3) we are delivering on the third prong of our strategy with an exciting accretive acquisition. We have been focused on executing these important initiatives for our shareholders and expect the acquisition of Sunworks to provide many more opportunities for long term growth and profitability.”

Chuck Cargile, Chairman of the Board and Chief Executive Officer of Sunworks, added, “By joining with Peck, our vision for spreading clean solar energy throughout the U.S. is amplified and expanded. Peck has demonstrated the ability to grow revenue and maintain profitability, and we believe that the combination of our teams, customers, projects and partners will materially accelerate revenue growth and earnings. Peck’s strong partnership with GreenBond Advisors will allow us to offer financing to a broader range of customers and increase our addressable market. Additionally, our expanded scale will enable us to source solar panels and equipment through Peck’s established relationships at lower costs, benefiting our profit margins. Being part of Peck’s platform is exciting, and in the best interest of Sunworks shareholders, customers, business partners and employees.”

Transaction Details

The transaction is expected to close during the fourth quarter of 2020, subject to approval by shareholders of both companies and other customary closing conditions.

The Board of Directors of Peck and Sunworks have each unanimously voted in favor of the definitive transaction agreement.

As part of the agreement, after the transaction closes, Jeff Peck will continue as Chairman of the Board and Chief Executive Officer of the combined company. The Board of Directors of the combined company will be comprised of four members of the Peck Board of Directors and three members appointed by the Sunworks Board of Directors. Because the combined company will be in competition with SunPower Corporation in some markets, Doug Rose, who is also a Vice President at SunPower Corporation, has resigned from the Board of Directors of Peck to avoid conflicts of interests.

Roth Capital will be acting as financial advisor to Peck and Merritt and Merritt is serving as its legal counsel.

Holthouse Carlin & Van Trigt LLP is acting as financial advisor to Sunworks and Stradling Yocca Carlson & Rauth, P.C. is acting as its legal counsel.

Conference Call to Discuss the Transaction:

Date: Monday, August 10, 2020Time: 5:30 p.m. ETDial-in: 1-866-952-8559 (Domestic) 1-785-424-1743 (International)

To Access Slide Presentation and Webcast: https://www.webcaster4.com/Webcast/Page/2298/36374

Replay: 1-877-481-4010 (Domestic) 1-919-882-2331 (International) Passcode: 36374

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