Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): August 2, 2023

SUNWORKS, INC.

(Exact Name of the Registrant as Specified in Charter)

Delaware	001-36868	01-0592299
(State or Other Jurisdiction	(Commission	(IRS Employer
of Incorporation)	File Number)	Identification No.)

1555 Freedom Blvd.
Provo, UT		84604
(Address of Principal Executive Offices)		(Zip Code)

(385) 497-6955

Registrant’s telephone number, including area code

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, par value $0.001		SUNW		The Nasdaq Capital Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On August 2, 2023, Sunworks, Inc. (the “Company”) issued a press release announcing select preliminary operational and financial data for the three months ended June 30, 2023. A copy of the Company’s press release is attached as Exhibit 99.1 to this current report on Form 8-K.

The information in this Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 hereto, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. Such information shall not be deemed incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing, except as otherwise expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number		Description
99.1		Press release dated August 2, 2023.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

	SUNWORKS, INC.

Date: August 8, 2023	By:	/s/ Gaylon Morris
	Name:	Gaylon Morris
	Title:	Chief Executive Officer

Exhibit 99.1

SUNWORKS PROVIDES PRELIMINARY

SECOND QUARTER 2023 BUSINESS UPDATE

PROVO, UT. August 2, 2023 - Sunworks, Inc. (Nasdaq: SUNW), a leading provider of solar power and battery storage solutions for residential, agriculture, commercial, industrial, and public works markets, today announced select preliminary operational and financial data for the three months ended June 30, 2023.

PRELIMINARY UNAUDITED SECOND QUARTER 2023 RESULTS

●	Total revenue of range between $33.0 and 35.0 million
●	Total Adjusted EBITDA range between ($10.0) and ($11.5) million
●	Residential Direct sales channel represented approximately 45% of new originations
●	Total backlog of approximately $84 million
●	Approximately $4.8 million in cash and restricted cash as of June 30, 2023

MANAGEMENT COMMENTARY

“Following a period of strong residential origination activity in the first quarter, demand conditions softened during the second quarter in several markets, including California, where consumers adapted to the NEM 3.0 transition,” stated Gaylon Morris, Chief Executive Officer of Sunworks. “Further, with the rise in interest rates, customers have contended with a higher overall cost of ownership, even though the long-term economics of solar remain highly favorable. These factors, together with utility approval delays in California, reduced our productivity during the second quarter, resulting in lower fixed cost absorption. In view of the current operating environment, we’ve taken decisive action to further right-size our cost structure, including a reduction in force. While the Residential business manages through this transitional period, our Commercial segment continues to execute well, while continuing to build a strengthening sales pipeline, which is supportive of a targeted return to positive free cash flow generation.”

NON-GAAP FINANCIAL MEASURES

EBITDA is a non-GAAP financial measure defined as net income (loss) excluding interest, taxes and depreciation and amortization. Adjusted EBITDA is further adjusted for non-cash stock-based compensation expense, goodwill impairment and acquisition transaction expenses. Adjusted EBITDA is a key measure used by the Company to evaluate operating performance, generate future operating plans and make strategic decisions for the allocation of capital. The Company presents Adjusted EBITDA to provide information that may assist investors in understanding its financial results. However, Adjusted EBITDA is not intended to be a substitute for net income (loss).

Certain non-GAAP financial measures are presented in this press release, including Adjusted EBITDA, to provide information that may assist investors in understanding the Company’s financial results and assessing its prospects for future performance. We believe these non-GAAP financial measures are important indicators of our operating performance because they exclude items that are unrelated to, and may not be indicative of, our core operating results. These non-GAAP financial measures, as we calculate them, may not be comparable to similarly titled measures of other companies and may not be appropriate measures for comparing the performance of other companies relative to the Company. These non-GAAP financial results are not intended to represent, and should not be considered to be more meaningful measures than, or alternatives to, measures of operating performance as determined in accordance with GAAP. To the extent we utilize such non-GAAP financial measures in the future, we expect to calculate them using a consistent method from period to period. A reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure is provided below.

In Millions	Three Months Ended						Year To Date
	June 30, 2023			June 30, 2022			June 30, 2023			June 30, 2022
Reconciliation of Net Loss to Adjusted EBITDA
Net Loss	$	(12.6-14.1	)	$	(7.6	)	$	(19.0-20.5	)	$	(15.8	)
Stock-based compensation		.4			.4			.9			1.7
Depreciation and amortization		1.0			1.3			2.0			2.6
Interest expense		.1			.1			.2			.1
Income Tax Expense		.1			.1			.1			.1
Employee Retention Tax Credit and related financing		1.0			-			(4.0	)		-
Adjusted EBITDA	$	(10.0-11.5	)	$	(5.7	)	$	(20.0-21.5	)	$	(11.4	)

ABOUT SUNWORKS

Sunworks has been providing high-performance solar and battery storage solutions since 2000. The Company acquired Solcius in 2021 to extend its national presence and provide high-quality, performance-oriented solutions to sectors ranging from residential to agricultural, commercial, industrial, federal, and public works. Today, Sunworks is proudly paving the way toward the democratization of renewable energy for all with their agile, partner-centric, and technology-agnostic network that has installed over 200 MW of solar and battery storage systems. Their dependable, solutions-oriented teams are recognized in the industry for their commitment to customer service and renewable energy advancement. Sunworks was recently recognized by Solar Power World as a leading solar supplier and is a member of the Solar Energy Industries Association (SEIA). For more information, visit www.sunworksusa.com and www.solcius.com.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to statements regarding the impact of higher financing costs on solar adoption, the Company’s ability to scale its decentralized operational model, the Company’s ability to increase margins, the strength of demand for the Company’s products, the expansion of the Company’s direct sales force, the impact of the Inflation Reduction Act, the Company’s ability to diversify sourcing of materials, the Company having sufficient liquidity to conduct its operations, and the Company’s ability to improve its working capital position. These forward-looking statements are based upon the current beliefs and expectations of management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of Sunworks. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the anticipated results discussed in these forward-looking statements because of possible uncertainties. Factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in Sunworks’ reports (such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the SEC and available on the SEC’s Internet site (http://www.sec.gov). We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

IR CONTACT
720.778.2415
IR@sunworksusa.com

Cover	Aug. 02, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 02, 2023
Entity File Number	001-36868
Entity Registrant Name	SUNWORKS, INC.
Entity Central Index Key	0001172631
Entity Tax Identification Number	01-0592299
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	1555 Freedom Blvd.
Entity Address, City or Town	Provo
Entity Address, State or Province	UT
Entity Address, Postal Zip Code	84604
City Area Code	(385)
Local Phone Number	497-6955
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.001
Trading Symbol	SUNW
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false