ELON Echelon Corp. (delisted)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE

SECURITIES EXCHANGE ACT OF 1934

(Amendment No. 1)

Filed by the Registrant  ☒                            Filed by a Party other than the Registrant  ☐

Check the appropriate box:

ECHELON CORPORATION

(Name of Registrant as Specified In Its Charter)

N/A

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

Echelon Corporation

2901 Patrick Henry Drive

Santa Clara, California 95054

The 59th paragraph under the caption “The Merger—Background of the Merger” is replaced with the following:

On June 22, 2018, the Echelon Board met, with members of Echelon management and representatives of each of Piper Jaffray and Wilson Sonsini in attendance. The Echelon Board discussed the proposals from Adesto and Party C and the risks and uncertainties of each. The Echelon Board continued to have many of the same concerns regarding Party C as those previously considered and discussed. The Echelon Board determined to proceed with additional negotiations with Adesto because, in the judgment of the Echelon Board, Adesto’s proposal had the potential to deliver the best value (taking into consideration both deal terms and closing certainty) to Echelon stockholders.

The second paragraph under the caption “The Merger—Fairness Opinion of Piper Jaffray—Selected Public Companies Analysis—Semiconductor Companies” is replaced with the following:

Based on these criteria, Piper Jaffray selected the following eight companies:

The second paragraph under the caption “The Merger—Fairness Opinion of Piper Jaffray Selected Public Companies Analysis—Financial Profile” is replaced with the following:

Based on these criteria, Piper Jaffray selected the following six companies:

-2-

The second paragraph under the caption “The Merger—Fairness Opinion of Piper Jaffray—Selected M&A Transaction Analysis” is replaced with the following:

Based on these criteria, Piper Jaffray selected the following 10 transactions:

The second paragraph under the caption “The Merger—Fairness Opinion of Piper Jaffray—Premiums Paid Analysis” is replaced with the following:

Based on these criteria, Piper Jaffray selected the following 39 transactions:

-3-

-4-

The table below shows a comparison of premiums paid in the selected transactions over certain time periods to the premium that would be paid to the holders of common stock based on the merger consideration of $8.50 per share.

The two paragraphs under the caption “The Merger—Fairness Opinion of Piper Jaffray—Discounted Cash Flow Analysis” are replaced with the following:

Using a discounted cash flows analysis, Piper Jaffray calculated an estimated range of theoretical enterprise values for Echelon based on the net present value of (1) projected unlevered free cash flows from May 31, 2018, to December 31, 2022, and (2) a projected terminal value at December 31, 2022 based upon terminal year multiples of projected revenue, discounted back to May 31, 2018. The free cash flows for each year and terminal year revenue were calculated from the Financial Forecasts, which were provided to Piper Jaffray by Echelon and are described in the section of this proxy statement captioned “The Merger—Financial Forecasts.” Piper Jaffray calculated the range of net present values for unlevered free cash flows for such periods based on a range of discount rates ranging from 25% to 35%, based on its estimation of Echelon’s weighted average cost of capital (which we refer to as “WACC”), taking into account the aggregate revenue weighting of Echelon’s embedded and lighting businesses forecast revenue between 2018 and 2022. The portion of Echelon’s aggregate forecast revenue during this period attributable to Echelon’s embedded business, which was 59.81% of aggregate revenue, was multiplied by 24.55%, a figure calculated by evaluating the WACC of the selected public semiconductor companies. The aggregate forecast revenue during this period attributable to Echelon’s lighting business, which was 40.19% of aggregate revenue, was multiplied by 35.66%, the Q1 2017 Cambridge Associates US Venture Capital Return—25 Year Early Stage Index. These discount rates were then added to determine the total discount rate of 29.02%, which formed the middle of the 25% to 35% range of discount rates utilized by Piper Jaffray. Piper Jaffray calculated a range of terminal values using terminal revenue multiples ranging from 0.5x to 1.7x applied to projected 2022 revenue (these multiples were selected by Piper Jaffray based on the minimum to median values from Piper Jaffray’s analysis of the 2018 EV/revenue multiples of the selected financial profile public companies), and discounted such resulting values back to May 31, 2018, using discount rates ranging from 25% to 35%. Using 1.1x projected 2020 revenue (the midpoint of the range identified by Piper Jaffray), Piper Jaffray calculated a terminal value for Echelon of approximately $88.9 million.

-5-

This analysis resulted in implied per share values for common stock ranging from $6.67 to $14.65 (excluding the value of Echelon’s net operating losses). Piper Jaffray observed that the merger consideration was within the range of implied per share values derived from this analysis. Piper Jaffray also calculated a theoretical range of present values of Echelon’s net operating losses based on discounting Echelon’s projected tax savings from utilizing the net operating losses at discount rates ranging from 30% to 40%, which were selected by Piper Jaffray utilizing its professional judgment and experience, with long-term earnings growth rates ranging from 0% to 3.0%, which were selected by Piper Jaffray utilizing its professional judgment and experience. This analysis resulting in implied per share values of Echelon’s net operating losses ranging from $0.88 to $1.39.

The second and third paragraphs under the caption “The Merger—Financial Forecasts” are replaced with the following:

In connection with Echelon’s strategic planning process, in early 2018 Echelon management prepared and provided to the Echelon Board various forward-looking financial information for fiscal years 2018 through 2022. This financial information was also made available to certain parties considering a transaction with Echelon, including Adesto, Party B, Party C, Party D and Party E. This financial information is collectively referred to as the “Management Original Forecasts.”

In connection with the preparation of the fairness opinion by Piper Jaffray, in May 2018 Echelon management updated the Management Original Forecasts solely to account for the actual and projected level of capital expenditures and working capital since the preparation of the Management Original Forecasts. This financial information is collectively referred to as the “Management Refreshed Forecasts.” Echelon provided the Management Refreshed Forecasts to Piper Jaffray for use in the preparation of its fairness opinion, but did not make the Management Refreshed Forecasts available to any parties considering a transaction with Echelon. The Management Original Forecasts and the Management Refreshed Forecasts are collectively referred to as the “Forecasts.” A summary of the Forecasts is set forth below.

The table under the caption “The Merger—Financial Forecasts—Management Original Forecasts” is replaced with the following:

-6-

The table under the caption “The Merger—Financial Forecasts—Management Refreshed Forecasts” is replaced with the following:

*            *             *

If you have any questions concerning the special meeting, the Proxy Statement or this Supplement, would like additional copies of the Proxy Statement or this Supplement, or need help submitting your proxy or voting your shares of common stock, please contact Echelon’s proxy solicitor:

The Proxy Advisory Group, LLC

18 East 41st Street, Suite 2000

New York, New York 10017

Stockholders May Call:

(888) 557-7699 (Toll-Free From the U.S. and Canada)

or

(212) 616-2180 (From Other Locations)

-7-